Uniper SE (UN0) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the conference call of Uniper regarding the Business Development 2021. At our customers' request this conference will be recorded. [Operator Instructions] May I now hand you over to Georg Oppermann, Senior Vice President, External Communications and Sustainability, who will lead you through this conference. Please go ahead.

Thank you, and good morning, ladies and gentlemen. I would like to welcome you to the Uniper Annual Press Conference for the financial year 2021. Unfortunately, due to an illness my colleague, Fabienne Twelemann is unable to do the moderation of this call. Therefore, I'm happy to take over that part today. First, our CEO, Klaus-Dieter Maubach, will present the key developments of last year and the status of our strategy implementation. After that, our CFO, Tiina Tuomela, will give you an overview of the key business figures. As usual, you will have the opportunity to ask your questions after the 2 speeches. Myself and my colleagues from the press office will, of course, be available, as usual, to answer further questions after the call. Klaus-Dieter, may I ask you to start, please.

Thank you. Good morning, and welcome to today's press conference. Thanks for joining us. I'm pleased to be able to take a look at current developments at Uniper with you today. Last year was a challenge, but that's true for all of us. Our company handled these challenges very well as our results for the 2021 financial year clearly indicate. But let me start with some comments on the recent developments. I obviously can't leave the events of the last days go unaddressed. Let me be open with you. The situation at the Russian, Ukrainian border leaves us at Uniper profoundly unsettled. And please note that I'm saying this as the CEO of a company where thousands of colleagues work hard every day to help earning a significant share of profits, either in Russia itself all long-standing ties with Russian partners that go back more than 50 years. During that time, a lot has been achieved for all parties based on foresighted collaboration, mutual agreements and trustful dialogues. My experience is, if solutions based on those principles, are not possible. This usually results in consequences with significant costs for all sites involved. Looking at Uniper now. While we are certainly hoping for a deescalation, we need to be clear about the risk and the potential mitigation tools at our hands. So let me be clear and transparent about our exposure to Russia. Uniper's key exposure to the current situation can be categorized into 4 areas. The first one is kind of familiar already. Further escalation might lead to more volatile prices and, therefore, higher margining and liquidity needs for us. While we cannot predict how prices will develop going forward, it is good to see that the last days went by without turbulences. The second one is Nord Stream 2. It probably did not come as a surprise that Nord Stream 2, got immediately into the focus of political counteractions. As you all know, Nord Stream 2 is completed and only waiting for the certification process to be completed. Yesterday, the German government has taken steps to put this certification process on hold until further notice. We are evaluating the impact of yesterday's decision on our claims towards Nord Stream 2, including potential impairment implications. The third section comprises potential sanctions against partners of Uniper, our Russian power generation affiliate and Uniper, including financial institutions. As of today, we consider it unlikely that the business of Uniper or Unipro could be significantly affected in this regard, but I wanted it to mention here. The last category is related to possible interruptions of Russian gas supply in our portfolio, depending on the situation, Uniper could be required to source gas against high market prices to ensure security of supply to our customers. Let me put it clear, we cannot exclude none of these risks. The situation is unclear. But when it comes to the likelihood of such interruptions, recent public statements provide some comfort. It is apparently understood that maintaining the supply into Europe is in the interest of all sides. As we have stated in the past, throughout our 50 years of partnership, Gazprom has always been a reliable partner who delivered as promised. On this positive note, I would like to conclude this topic for now. Let me assure you, Uniper is closely monitoring the situation and evaluating mitigation measures. We will keep you updated going forward. However, while the situation is certainly getting our highest attention, we need also to keep our daily business and the strategy execution on track. Let's move over to this part of today's presentation, starting with an overview of the key highlights in 2021. First of all, on balance, 2021 was a successful but turbulent year in which we took many important steps forward. We met our earnings forecast, Standard & Poor's Global Ratings confirmation of our BBB flat credit rating in January 2022 reaffirms that we operate as a structurally sound business in markets with uncommonly erratic price fluctuations. We delivered adjusted EBIT of approximately EUR 1.2 billion in the financial 2021 financial year, that's nearly a 19% increase from our solid prior year earnings. The main earnings driver was an outstanding performance by Global Commodities segment. Adjusted net income rose by 17% to just over EUR 900 million. Tiina will provide you with the details in a moment. 2021 was a year with 2 phases. The first was that we were successful operationally and posted a very good earnings. The second was that volatile and above all sharply higher prices on commodity markets post considerable challenges for us. We have obtained the necessary financial flexibility to secure our deliveries for the possibility that extreme power and gas prices recur. Overall, the financing measures we took around the end of 2021, expanded our liquidity framework to EUR 12 billion. Even if those liquidity risks are only temporary in nature, we need to properly and carefully manage those risks going forward, especially in the current geopolitical, this involves not only our internal business steering, but also our dividend policy. Most of you will already know from the ad hoc we have released this month a that Uniper's management will propose to reduce the dividend from prior years of EUR 501 million to EUR 26 million for the fiscal year 2021. This proposal has been aligned with majority shareholder Fortum and will be brought forward to the AGM on May 18. Ultimately, the purpose of the dividend cut is to increase the resilience of Uniper's investment capability in a highly volatile environment. The development on energy markets in recent ones have underscored the importance of gas and supply security, being one of Europe's largest gas traders and gas storage operators gives Uniper a key role to play in such a complex situation. The numbers tell me we played this role well. Last year, let's take the LNG business as an example. 2021, we traded a total of 356 LNG tanker cargoes, 131 more than in the prior year compared with our LNG activities 5 years ago, that's very swift progress. In 2016, the year of Uniper's stock market listing, we traded a total of 16 1-6 cargoes. In short, we have achieved enormous and sustained volume growth in this business. To illustrate the 356 cargoes, we traded amounts to about 330 terawatt hours. That's equal to 1/3 of Germany's gas consumption in 2021. So we're not just able to operate successfully in the demand in global market. We have also been able to grow significantly and profitably in an extremely short time. The numbers demonstrate that Uniper ranks among Europe's biggest LNG traders. We now want to use our many years of experience to help ramp up the hydrogen economy. It will be built largely on the same markets and along the same transport pathways. In addition, we marketed about 83 terawatt hours of gas storage capacity. If all this capacity is equal to 12.5% of Germany's winter gas demand and would fully cover the country's gas consumption on more than 20 winter days. Of course, we are already planning for the future, our cavern storage facilities. We are Germany's biggest operator are particularly suited for storing and retrieving hydrogen. Whenever we think about gas, we include hydrogen otherwise, it's unclear how gas can serve as a bridge. The bridge extends from fossil gas to clean hydrogen and other 0 carbon gases. This long-term aspect plays a decisive role in all our projects. There's currently a lot of discussion about how the tight situation on the gas market, high prices combined with comparatively the empty storage facilities can be improved. My personal view is that we can ensure a secure gas supply with market-based instruments. These instruments already exist. They just have to be used. There are various possibilities or ways to do this. For example, operators could be obliged to use storage facilities and to engage in secondary storage marketing as early as the summer months. long-term options, tenders at storage connection points are another possibility. In the future, they could be tendered for several years and on a larger scale at the latest at the beginning of the injection period. Combining the tendering at storage facilities described above with additional tenders at import points would make the model even more robust. The basis of these additions and the import points could be, for example, minimum flows from pipeline supply or from LNG deliveries. In other words, there are a number of good mechanism for absorbing or at least cushioning future bottlenecks and which would take effect in the short term. We shouldn't wait until next winter to talk about this. The time is now. Whether it's LNG, pipeline gas, order production and import of hydrogen and other green gases, our company is prepared to do its part. Our company has no influence on political and geopolitical issues. So I will focus primarily on what Uniper can influence our own transformation. And we have made important indeed game-changing decisions. The coal exit of Uniper's power generation business in Europe is decided from 2035 onward. The power generate in Europe will be climate neutral. We've also significantly accelerated the pace of our coal exit technologically, advance in Datteln 4 and Maasvlakte 3 will be our only coal plant operating in Europe after the year-end 2024. That's less than 3 years away. A recent example of this acceleration is starting a power station, which will stop commercial operation in May 2023. That's over a year and half earlier than our original plan alongside our coal exit, we are systematically finding other businesses with a climate-neutral future. By 2035, we aim to reduce our indirect Scope 3 emissions by 35% relative to 2021. Uniper as well as the entire port [indiscernible] group will be climate neutral by 2050. This kind of transformation, especially at this speed, involves difficult decisions that reflect the resulantness of our actions. The decision to restructure our engineering business was one such necessary consequence. Negotiations are currently underway to find acceptable solutions for everyone involved. We are providing social packages that promote smoother changes to those employees who need to reorient themselves professionally. I and the entire management board are very aware that successful transformation has a price. Nevertheless, we have a corporate and social responsibility to take a strategic look into the future. Ladies and gentlemen, ought to be clear to everyone that this isn't just about exiting coal and reducing carbon emissions. We intend to invest more than EUR 500 million in green growth businesses in 2022. This money will go primarily towards renewable green gases and green thermal generation. That, we are not a renewable front runner is no secret, but we are slowly gathering speed and just before the new year, announced our first joint wind project with Fortune. The decision to build the Pjelax-Böle and Kristinestad Norr wind farms in Finland, which will have a combined capacity of 380 megawatts represents the first important step toward achieving our minimum target of 1.5 to 2 gigawatts of renewables capacity by 2025. Beginning in early 2024, the 56 terabytes of these 2 wind farms will generate about 1.1 terawatt hours of electricity annually. Construction began in early January and will be completed in about 2 years. We are off to a good start, and we want to steadily increase the pace. You'll see that there is more to come. We now come to the ideal partners of renewables, green and low carbon gases. Uniper has all the capabilities to make a significant contribution to the ramp-up of a hydrogen economy in Germany and Europe. All our current gas activities, our experience in trading, structuring, marketing, transport and storage. All of it is applicable to green and low-carbon gases. Germany, in particular, needs these capabilities because it wants and needs to secure its energy policy agenda with the help of low-carbon gases. It's undisputed for example, that Germany will have to import around 70% to 80% of the green hydrogen it will need. The German Federal Ministry of Economic Affairs and Climate Protection has taken an important step in this direction by approving EUR 900 million for the H2 Global Foundation. The federal government has already announced its attention to increase these funds further. The purpose is to propel the ramp-up of a green hydrogen market by means of double act auctions. As the market environment, slowly takes form, we are moving forward with our hydrogen business, just before the new year, you could see that December was a busy month. We signed a term sheet with Novatek for the long-term delivery of up to 1.2 million metric tons of low-carbon ammonia. Our partnership with high product Consortium in Oman to import green ammonia to Europe is moving forward as well. We are also involving projects in key industrial customers around Europe, like Rotterdam, the Netherlands, Hamburg, Britain, Luleå in Sweden and Wilhelmshaven in Germany. We want to establish Wilhelmshaven as a green hydrogen hub that can meet about 15% of Germany's hydrogen needs by 2030. We are working with strong partners in the Wilhelmshaven as well. This includes developing more than one gigawatt of electrolysis capacity on the grounds of our power station in Wilhelmshaven by 2030. We are exploring obtaining the renewable electricity needed for electrolyzers for offshore and wind farms by Ørsted of Denmark. We're also planning an important terminal for green and blue ammonia, terminal would have a cracker that transforms the ammonia back into hydrogen. And just the day before yesterday, we concluded a cooperative agreement with Salzgitter AG. The goal is for Uniper to supply competitively priced green hydrogen to Salzgitter AG SALCOS project to produce climate-neutral steel. Ladies and gentlemen, there is no shortage of projects and plans that help reduce carbon emissions and eventually that could enable Europe to achieve its climate targets. But a vision client targets are one thing. The realities of the energy system are another. It's good that Europe is phasing out coal and the phase-out of nuclear power enjoys broad public support at least in Germany. But we now need to face something in. And what we need to phase in are new than technologies that are also flexible and reliable. This is the key challenge of this decade. Natural gas is a transitional technology that plays a key role in stabilizing the energy system. Natural gas can also enable rapid significant emission reductions whenever it replaces carbon-intensive energy sources. I therefore welcome the fact that the German government coalition agreement foresees precisely this. This is the foundation and the prerequisite for Germany to decarbonize its economy as quickly as possible. This transformation will certainly take a number of years, a joint study by Boston Consulting Group and the Federal Federation of Industries estimates that Germany will need 60 new gas-fired power plants with a total capacity of 40 gigawatts of 2030. Today, it's February 23, 2022, and construction has not yet begun on a single one of these much needed gas plants. If you consider the time it takes to approve and build such a plant, meeting this target is going to be challenging. This makes it all the more important for Germany to establish an investment framework as quickly as possible so that in view of the leads time necessary for planning approval and construction, the target remains achievable by 2030 and beyond. And at the right conditions, Uniper would be prepared to invest into 2 gigawatts of gas file capacity. Provided this investment is compatible with our decarbonization targets for 2030 and 2035. But ultimately, this is a matter for policymakers. At meantime, gradually decarbonizing by moving forward with projects relating to green thermal generation. The first example is easing 6, a 300-megawatt gas-fired power plant that will serve as a reserve capacity for the transmission system operator in Southeast Germany starting this fall. The second is [indiscernible], a 130-megawatt gas fire plant that will provide power and heat to an industrial customer. Both these projects combine supply, security with decarbonization. We'll also pipe waste heat from a BP refinery into our district heating network in the northern rural region. This will enable us to displace 60,000 metric tons of CO2 a year. In addition, we are partnering Dutch Energy Company, Eneco to make the district heating network in The Hague more sustainable. We are developing a plan to make the energy this network supplies net-zero carbon by 2035. Ladies and gentlemen, I'm certain that the energy transition will succeed even though Germany has set the hurdles very high. This means that we'll just have to jump higher than other countries. First, Germany, therefore needs to swiftly plan and build new clean hydrogen-ready gas-fired power plants. The German government intends to present proposals for the investment framework in the fall of 2022. Speed will be essential here. Second and simultaneously, Germany needs to steadily expand its renewables capacity and build and incentivize the market for hydrogen and green gas. Uniper is already developing these types of projects and seizing opportunities. We are propelling our own transition by means of renewables, green gases and innovations. Fortunately, as CEO, I can say that I have the right colleagues on the Board for this and that Uniper has the right expertise and the right mindset. These will again be our most valuable assets in the year ahead. Thanks for listening. Over to you, Tiina.

Thank you, Klaus-Dieter. This morning. A warm welcome from me as well to our annual results press conference. Thanks for joining us. I'm pleased to be able to present to you full year results for the 2021 financial year that are in line with the expectation of our forecast for 2021 obtained at the end of October. I start as usual with adjusted EBIT. We recorded adjusted EBIT of EUR 1,187 million which is almost 19% before the prior year figure of EUR 998 million. The is mainly attributable to the strong earnings delivered by our Global Commodities segment. Before we turn to that, let's take a look at the most important developments at the European Generation segment. This segment posted adjusted EBIT of EUR 473 million in 2021, which is significantly below the prior year figure of EUR 492 million. This is attributable especially to the nonrecurrence of positive income from the optimization of fossil fuel power plants and the temporary unavailability explicit with the noncash of positive income from the optimization of the fossil fuel power plants and the temporary unavailability of [indiscernible] electricity hard coal-fired power station. In the Netherlands. Earnings were also adversely affected relatively to the prior year by an increase in provision for asset retirement application at our nuclear power business in Sweden. A positive factor was that in [indiscernible] 4 and is the 4 and 5 power plant which entered commercial operation in the course of 2020 committed earnings for the full year in 2021. Global Commodities, adjusted EBIT of EUR 756 million surpassed its prior year earnings of EUR 476 million by a wide margin. The increase is attributable in the path to higher earnings from our international portfolio, which benefited from unusual weather conditions in North America and from business activities in Asia. In addition, our gas business followed up its good results in 2020 by having a positive impact in 2021 and financial year as well. It benefited from exceptionally volatile and rising prices. Our Russian Power Generation segment recorded earnings of EUR 230 million, which was at the prior year level. The recommissioning of the Unit 3 at Berezovskaya power station in May 2021 and the associated income from the capacity mechanism along with higher prices and the sales volume on the electricity market had positive effects on earnings. These positive developments were partially offset by the expiration of the long-term capacity payments for the total of 4 generating units at Surgutskaya and Berezovskaya power station at the year-end 2020. And at Surgutskaya during the 2021 financial year as well as negative FX effect. Adjusted net income essentially tracks adjusted EBIT. Our full year adjusted net income of EUR 906 million, significantly surpasses the prior year figure of EUR 774 million. Uniper recorded a net loss of 4,106 billion at the end of the 2021 financial year. The main reason for this is the discripency in IFRS accounting treatment of the marking to market of the hedging transaction and hedge position. Derivatives are recorded at the fair value on the balance sheet gain, whereas the increase in the value of the hedged asset is initially limited to the acquisition of production costs. Any increase in the value beyond this may only be recorded when the hedges are unwound. This means that we record income from hedges as soon as we settle our contracts. This valuation this fund is factored of adjusted EBIT and adjusted net income in order to better reflect Uniper's operating performance. The net loss we recorded is a snapshot at the end of 2021, which may already look very different today. The main reason for these developments was the rapid rise in electricity and above all gas prices towards the end of the last year. Uniper sales power and gas also on forward markets as well. This enables our customers to lock in a fixed contractual price. For Uniper, it ultimately means that rising commodity prices have a negative impact on unadjusted IFRS earnings. While falling prices have a positive effect on IFRS earnings all due to the RFO mentioned valuation mismatch. In addition, collateral payments are usually agreed on forward transactions. This collateral reflects the difference between the current market price and the contractual price. Normally, this collateral amounts to a few percent of the contractual price. But at one point towards the end of last year, it amounted to 9x this difference. The increase in collateral payments is not only reflected in an adjusted net income, but also requires us to have significantly more liquidity. At the end of last year, we obtained the necessary additional flexibility in the form of a credit and guarantee facility agreement with Fortum in early 2022, a revolving credit facility, KFW Bank in addition to the existing revolving credit facility with Uniper's core banks. To state it very clearly, Uniper has a solid operating and financial foundation. Uniper's coal is a stable investment credit rating of BBB. And in late January, SMB Corporating reaffirm Uniper's BBB credit trading and stable outlook. Economic net debt declined significantly from EUR 3,050 million at the year 2020 to EUR 324 million. The main reason is the increase in our operating cash flow due to the measures to optimize liquidity, a reduction in provisions for pensions and other applications resulting from the increase in actual discount rates relative to year-end 2020 led to a further decline in economic net debt. Full year cash effective investments totaled EUR 720 million which is EUR 23 million below the prior year level. About EUR 329 million went towards growth investments and EUR 392 million towards maintenance investments. Our growth investments were lower than in the prior year, whereas our maintenance investments were higher. I turn now to our forecast. We anticipate adjusted EBIT of EUR 1 billion to EUR 1.3 billion and adjusted net income to be between EUR 0.8 million and EUR 0.3 billion for the 2022 financial year. In Uniper's Foundation, we'll always place great emphasis on presenting our business transparently. Last year, we published our first tax transparency report that 2021 report will be disclosed in March. This year, we are taking an additional step. Our TCFD report, TCFD stands for Task Force on Climate-Related Financial Disclosure, represent the opportunities and risks that climate change has for Uniper. The report is for the first time, part of the nonfinancial report included in our annual report. In addition, Uniper is reporting its EU taxonomy eligible economic activities for the first time. And now we are happy to take your questions.

[Operator Instructions] And the first question is from Christoph Steitz, Reuters.

Mr. Maubach, I have a question on the Nord Stream 2 funding. So your co-financing partner OMV said yesterday that the consortium had started to pay back the loans in the second half of last year. Can you confirm that you -- that the consortium has also started to repay the funds to you? And if that's the case, can you tell us by how much has been paid back? And the second question would be on your operations in Russia. I mean you laid out your conviction that there will be limited impact on your business there. But what can you share in terms of contingency plans? How have you prepared staff at Unipro for eventual escalation of the conflict. Maybe that's something you could comment on.

Maybe let me start with your second question. I mean, Unipro is a Russian-based business, okay? Their performance is excellent, was in 2021, and we expect this also for 2022. There is no emergency plan or something in place. This is something they are doing business as usual. And I don't expect any kind of immediate impact that the conflict on the Russian Ukrainian border would have on our Uniper businesses, okay? The power units that we are running are not close to that border. They shouldn't have any impact, and I'd see why they should be interrupted in terms of fuel supply. We are running gas-fired power stations and a lignite fire power station. So I don't see why this should be interrupted. So in an operational sense, I don't expect this to have any -- I don't expect this to have any impact on our businesses and operations in Russia. Whether sanctions would be imposed on Uniper and/or Unipro or whatever could have an impact on our business relationship between Uniper and Unipro -- that is impossible to assess today because we do not know about anything that could have an impact on that. Today, I can say I don't expect anything to -- I don't expect anything to happen with this regard. But clearly, I mean, this is obviously a very dynamic situation that can develop over time. And hence, I would also kind of refrain from speculating how this could develop going forward. But again, back to your question, operationally, today, I don't see any issue with our operations in Russia. On the Nord Stream thing, I don't know what -- or we said on Nord Stream 2. So I cannot comment on that. What I can say is that we are kind of treated in the same way. And I do not know what they were referring to when they said they received payments back, whether this was related to a payback of the loan itself I would be surprised whether there are other payments that they are claiming to have received, then I would simply say we are treated in the same way. OMV is in the same situation as we are with regard to the fact that both companies and 3 more companies are financial investors to Nord Stream 2.

The next question is from the German channel. The next question comes from [indiscernible].

I would just like to ask something about [indiscernible]. Could you also say that whether the sanction of the Federica government is something you understand and accept that? And the second question is, that Nord Stream 2 has finally started. Will you then actually take action with regards to the shareholders, Germany against the EU, again, that's a strong?

I have to admit we had some difficult -- at least I had some difficulty to understand both questions. We were -- maybe you can repeat that, that would be very helpful. Thank you for that.

My first question is, do you understand that Germany hesitated that? Do you really accept that personally? The second question is now that it starts working will you actually take actions against the General Chair or take actions against Nord Stream or the Gazprom?

I think, operator, we have a technical problem. This seems to be the translation channel. Could you please connect us with [indiscernible].

Are you hearing me?

I can perfectly hear you.

I just need a moment. We have the translations connected to each other. So I have to dial in a link line. One moment, please.

Please apologize the problems. Hold on, please. Maybe it'll take some seconds to sort that out, but we will soon continue. Sorry for that. Do we have another question? Operator, please? Operator, can you please let us know if the call can continue? Or if we Okay. If that doesn't work, can we maybe change to the next question?

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The next question is then from Christian [indiscernible].

Two questions, if I may, actually, I'm still trying to understand the implications from the sanctions in Russia and how this is going to unfold in the near future. You just confirmed your guidance, your financial guidance on Monday? But looking into the future, could the whole Russia situation endanger your guidance for this year? That's the first question. And the second question is about the Nordic hedging numbers. If you could shed a little light on that. I'm a bit puzzled by the development for 2023, even compared -- comparing the numbers Q3 2021 and the full year hedging the hedging ratio increased, but the prices fell, but shouldn't at some point, the higher prices in Nordic region be reflected in those numbers?

So on your second question, Tiina will come back to you in a second, let me try to answer your first question. I understand that you were asking about our guidance that we have produced on Monday and to what extent sanctions or other things that might happen around Russian Ukrainian conflict might have an impact. Well, I don't know. I don't know because we don't know how this entire situation will develop. We don't know how commodity prices will develop going forward. And hence, we don't know what kind of impact that will have. What I can say is that we are rather under cautious and on the conservative side, also with our guidance that we have released on Monday because it's really unclear how a number of factors will have an impact on 2022 in particular. So I cannot rule out that also the developments in Russia, Ukraine will have an impact on prices and price levels on our activities that certainly also includes Nord Stream 2 or our gas business that is, as you know, also depending on Russian gas imports. Maybe on Nordic hedging, Tiina.

Thank you. So our hedge prices for 2022, 2023, so as mentioned, so on the lower level than in previous year. And I would mention maybe 2 main reasons. So first of all, our hedging includes the impact. So the area price hedges and whereas the overall system and other area prices have increased. So the price area 2, I think, is relatively low compared to other prices. So it is the kind of the structural where our production is and what are the ways of the different areas. Then the other reason relates to the proxy hedging. So usually, we paid our hedging during 2, 3 years before hand. Now we have some hedges done a couple of years ago when we were under corona pandemic and the price is very, very low liquidity, particularly in the price area 2, very low. So we used the hedge -- price hedges, and now obviously, those pricing hedges have had temporarily at least a negative impact. But as I said, of course, hedging ratios for '23, '24, 60% and 20%. So obviously, possibilities to improve also the hedge prices in the future.

We have another question from the German channel. Just one moment, please. I will switch the channels.

Good morning. So I'm just trying to be lucky as well. You were talking about the fact that this credit was not seem to -- might actually lead to reduction?

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Has precautionary measures already been taken in 2021. Does it relate to the prices because only this year...

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We have another question if you want to take the time for that question.

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Okay, sure. So we are now in the English channel again. And we have a next question from [indiscernible].

Apologies if I repeat a question that was asked in German, but I wanted to ask, is Uniper or would Uniper consider any legal action against the German government or the European Commission if Nord Stream 2 is blocked indefinitely or if it's not allowed to continue operating. That's one question. My second question is, how do you see the German supply picture if Nord Stream 2 is indefinitely not allowed to operate. And my third and last question is, you mentioned that under the right conditions, Uniper would be interested in investing 2 gigawatts in gas capacity. Could you be a bit more specific what those right conditions would be?

Okay. Let me start with your last question on new build on gas-fired power stations. I think we try to be clear in public but also in our conversations with the German government on that we think from our end that it would be not sufficient to just rely on wholesale prices as an incentive enough to us to make a decision on additional new build of gas-fired power stations, that is something that no one should please expect. Reason for that is not only that we are in a volatile price environment, but also because we have ongoing discussions about how long you could then operate a natural gas-fired power station going forward. And how long you would have the permission to do so. And hence, we would need any kind of framework that would provide for an attractive incentive in order to make decisions from our end. If I may add, I take away from discussions in the sector and with peers that there is not a single competitor to us having a different view and saying, well, that's sufficient. We will just rely on wholesale prices and make a decision on additional gas-fired units in Germany. So that's number one. Or that was your third question. Then you are -- indeed, you don't have to apologize, but indeed, you are referring to that question whether we consider any legal action based on what's happening around Nord Stream 2. I just wanted to point out that we are not equity investors into Nord Stream 2. I would believe that if anyone would consider legal actions against German government or the EU commission, it would be Nord stream 2 -- the legal entity in Nord Stream 2 themselves and not us being basically a financial investor. And I don't have any reason to believe that they are considering such kind of action, but that is certainly a question that the responsible managers on the Nord Stream 2 AG have to look into and understand whether they would like to take such kind of step. And your second question was around how would that situation look like if Nord Stream 2 would not be CoD and if that was not made available for supplying gas to Europe, Well, I think what's fair to say is that the gas supply situation would then strongly depend on pipelines through Poland, through the Ukraine and the availability of additional transport capacity and the willingness of Russian gas suppliers to use that transport capacities into the European market. We have seen in recent years that in terms of capacity, those transmission lines are sufficient but it's obviously not only a technical question for the gas supply situation in Europe and in Germany.

Hopefully, your questions are answered. I assume they are. So at the moment, we have no further questions. I would like to hand back to Mr. Maubach for some closing remarks.

Thank you for joining us. Apologies that this was a little tricky, particularly if we had tried to use our German channel, I think we have to kind of again consider how we view that going forward. Thanks for joining us. Thanks for your questions. I understand there are a number of questions that you have, and we have only limited answers, but that's obviously a very dynamic situation in which we are right now. And I would dare to predict that this will stay to be a very dynamic situation going forward around prices and also around what's happening on the Russian Ukraine border and what kind of impact it will have on our businesses. So let's stay in touch. Thanks for joining.

Thank you.

Ladies and gentlemen, thank you for your attendance. This conference has been concluded. You may disconnect.