Hello, and welcome to Iren's conference call. In the first part of the presentation, participants will be in listen-only mode. During the Q&A session, participants will be able to ask questions by pressing the hash key, followed by the number five on the telephone keypad. I will now hand the floor over to Carlo Dacco', Head of IR, to begin today's call. Please go ahead.
Good afternoon, everybody, and thank you for joining this conference call to present the results as of 13th December 2025 of Gruppo Iren. The results will be presented by the Executive President, Luca Dal Fabbro, and by the CFO, Giovanni Gazza. At the end of the presentation, there will be the usual Q&A session. I will now give the floor to Luca to present the results of the period.
Thank you, Carlo.
Good afternoon to all of you, and thank you for joining us today. The board of directors meeting today approved the results as of 13th December 2025, showing a growth at the EBITDA level of up 6%, exceeding the EUR 1.350 billion, and 12% at group net profit, reaching about EUR 300 million. The increment of the EBITDA is supported by the organic growth for the investments operating the last few years of the synergy plans and the consolidation of the [Group Iren] that contributes to the growth for about EUR 6 million.
74% of EBITDA of the group was generated by regulated or semi-regulated activities, confirming the strengthening and the strategic positioning of the core regulated businesses, and this is a stability element in such an uncertain period. The net financial position grew by about EUR 140 million, reaching about EUR 4.2 billion. The increment at 3% allowed a decrease in the NFP/EBITDA ratio at 3.1x , as anticipated in the last guidance last November. Operating cash flow fully covered the more than EUR 920 million in technical investments.
The results of the group, in line with the strategic plan presented in November 2025, allows to propose in the next shareholders' meeting a dividend amounting to EUR 0.3086 per share, growing by 8% compared to last year, with a payout of about 60%. Sustainability, which is one of the pillars of our group strategy, continues to guide the strategic choices of investment. That's why at the end of the year, I would like to share with us the main results reached. During 2025, 73% of investments were invested into projects that support the transition plan towards 2040.
Concerning transition, we confirm what we anticipated in November during the transition plan towards 2040. That is, for some indicators, we need more time so that the planned interventions can really become measurable results. This is the case, for example, carbon intensity that remains stable compared to last year. The investments made in the environmental sector allowed a further increase of 1 percentage point in separate waste collection, bringing it to 70.5%. There is a slight decrease in materials recovered at the group's facilities due to the unavailability of the plastic recovery plant in Cadelbosco, following the fire that occurred in August 2024. 2025 was particularly important due to the strengthening in our local presence, thanks to the consolidation of Egea.
That contributed to an increase in the municipalities served in waste collection, customer base, and the volume served for district heating. Finally, the quality of our services is the base of the daily management of our activities that are stable, with a stable customer satisfaction at an excellent level, with the loyalty at 31%, due to expansion of the managed perimeter. Thanks to the excellent product services of Iren Plus and the green energy sold at the final customers as foreseen in the industrial plan. As usual, moving to page four in our presentation, we can see the main economic financial indicators and the moving parts of the period.
EBITDA, which is EUR 1.35 billion, up 6%, thanks to the positive contribution of Egea for EUR 60 million, more positive results than foreseen at the beginning of the year, thanks to EUR 5 million synergies. The efficiency gains were in fact made possible by the early full consolidation of Egea at 100%, which enabled an acceleration of integration activities, thus aligning various holding functions and the direct coordination of business operations. During 2026, we foresee that we will complete the integration at the company level, and today we already integrated the market and environment business units, and also at operating level.
The second element is the positive contribution to organic growth of regulated businesses amounting to EUR 22 billion, driven by the full execution of planned investments and a strategy aimed at strengthening the group's presence in regulated segments with a strong focus on improving service quality. The third item is synergies that are in line with the planned success rates at about EUR 20 million, and the amount of the extracted synergies in 2025 is 2.5x. higher than in 2024, signaling that this is a good lever for increasing the group's profitability. The energy value chain reported an overall increase of EUR 7 million, despite being negatively affected by several factors.
The absence of the strong margins recorded in 2024 in gas segment, lower hydroelectric generation volumes, and lower prices for renewable technologies compared to the previous year. EBIT amounts at EUR 402 million, up 2%, due to the higher amortization and provisions to bad debt. Group net profit instead amounts to EUR 301 million, up 12%, and it benefits from the acquisition of minority interests of the Iren Acqua company, and a reduction of the tax rate.
Overall investments of the year amounted to EUR 1.35 billion, of which EUR 925 million in technical investments, up 12%, mainly destined to the development of the hydroelectric network, waste treatment and the completion of waste treatment plants. The financing of these investments through the issue of a EUR 500 million hybrid bond made it possible to contain the increase in net financial debt to EUR 5.22 billion, resulting in a reduction in the NFP/EBITDA ratio at 3.1x . I will now give the floor to Giovanni for an in-depth analysis of business dynamics.
Thank you, Luca, and good afternoon, everybody. We'll now go more in depth in the perform...
In the business units performance, starting by the network business units that you can see at page five. The EBITDA increase of 11% amounted to EUR 51 million, was generated by all three business lines. In general, we can see that the organic growth generated EUR 22 million, partially offset by the reduction WACC on the gas and electricity distribution with the down of EUR 7 million and the consolidation of Egea that contributed for EUR 12 million. Finally, the efficiency plan delivered a positive contribution of approximately EUR 8 million. More in detail, we can see the strength in the integrated water service and the organic growth and the consolidation of Egea contributing for EUR 50 million overall.
The positive result of the period is also supported by two non-recurring extraordinary items. EUR 8 million related to the ARERA award for technical quality and EUR 3 million for our previous year adjustment. These positive elements offset the absence of an extraordinary recovery of the inflation amounted to EUR 9 million that was accounted for in the first quarter of 2024. In the electricity energy business line, an increase of EUR 30 million is mainly due to the increase of revenue constraint due to the increase of RAB, up 7%. The gas distribution business, the result increased by EUR 21 million, benefiting from the consolidation of Egea's networks for EUR 5 million.
The extraordinary recovery of operating costs recognized for the 2025 period under ARERA resolution number 570, amounting to approximately EUR 30 million, and from other minor items totaling EUR 4 million. The investments made during the period exceeding EUR 282 million register 8% growth compared to 2024. This demonstrates the strategy of the group, which is aimed at strengthening the regulated businesses. These investments are focused on improving the quality of the services provided with the aim of ensuring high quality standards and continuity in achieving the incentives established by ARERA. Moving to the environment business units at page six. EBITDA in 2025 reached EUR 277 million, growing by 8% compared to 2024.
Waste collection activities recorded an increase of EUR 60 million, driven by the consolidation of Egea, up EUR 3 million and the one-off type recognition of past operating costs in the latter part of the year, amounting to EUR 13 million. Treatment and disposal activities positively contributed to the business units results, with a higher contribution compared to 2024 of EUR 5 million. This result was achieved mainly thanks to the launch of the efficiency plan across the treatment and material recovery plans. These positive elements for the periods include also the contribution for environmental remediation activities and the lower volumes of waste disposed of in landfills due to site saturation and the lower prices for electricity generated from WTE plants offset the positive factors.
Overall, the volumes of waste managed during the year increased by 3%, supported by growth both in municipal and special waste, mainly as a result of the integration of Egea. Continuing the analysis with the energy business unit on page seven. We note reversal of the trend at the end of the year compared to previous periods due to a contraction in prices and hydroelectric volumes, which led to a decrease of EUR 60 million in the fourth quarter of 2025 alone. Looking at the overall effects recorded during the year, which result in a decline for renewable generation of EUR 35 million, we can note that PUN values were lower than in 2024.
Hydroelectricity production was down by 165 GWh, and we also recorded a lower solar radiation offset by the full contribution of the 38.5 MW photovoltaic plant, which only became operating in the second half of 2024. Regarding photovoltaic capacity, a 20 MW plant built in Sicily became active in October. While at the beginning of this month, an 8.5 MW plant was built in the province of Bologna and became operational. Thermal and cogeneration production reported growth of EUR 90 million due to the higher capacity factors and increased production volumes up 170 GWh. Also thanks to the full availability and efficiency of the new 400 MW thermal unit in Turbigo.
The higher contribution from the capacity market, up EUR 17 million, was almost entirely offset by the decline in the ancillary services market, MSD, with a performance that was EUR 15 million lower than in 2024. Heat increased by EUR 9 million, driven by higher volumes resulting from network expansion and the consolidation of Egea. These factors were partially offset by a slight decline in unit margins. In particular, the reduction in spark spread is linked to the high margins achieved in 2024, supported by particularly favorable and non-repeatable hedging operations. Finally, also the segment of energy efficiency is positive, up EUR 3 million, due to increased rebuilding activities.
We conclude the analysis of the business units with the market segment on page eight, which reports an increase of EUR 12 million, up 5%, driven by the consolidation of Egea, up EUR 29 million, and by synergies achieved through the optimization of commercial processes. These more than offset both the lower margins on electricity sales and the absence of the extra margins recorded last year in gas sales. Volumes sold increased both for electricity, up 18%, and gas, up 10% as a result of the consolidation of Egea. The customer base increased by 3%, exceeding 2,350,000 customers served. The contractual strategy implemented after the 2022 energy crisis allows us to...
Allowed us to be more resilient to potential commodity price fluctuations with 72% of contracts at variable prices and only 28% at the fixed prices. Market competition remained high, with higher churn rates than in previous years. However, towards the end of the year, we observed some stabilization in the indicator, which did not increase compared to September's level. Finally, we confirmed a positive commercial trend in the sale of high value-added products and services, which recorded an increase of EUR 3 million compared to 2024. Moving to slide nine, we can identify the main elements that enabled the group to achieve a net profit of EUR 301 million.
In more detail, depreciation and amortization increased by EUR 61 million, driven by investments as well as the consolidation of Egea, which contributed EUR 33 million. Provisions for bad debt increased by EUR 12 million, mainly in the Environment BU, due to the shift in revenue recognition for environmental sanitation services from a tax collected by municipality to a fee collected directly from customers by the group. The average cost of debt stood at 2.4% higher than in 2024, mainly due to the interest rate differential between new bond issuances and those that were repaid, which had particularly favorable rates. We recorded a higher contribution from consolidated companies at the equity, up EUR 7 million.
Net profit attributable to the group for the period amounted to EUR 301 million, up 12% compared to last year, thanks to the higher EBITDA, a lower net profit attributable to minorities, and a lower tax rate, which, as already highlighted during the year, stands at 27.8%, benefiting from non-recurring tax items related to the consolidation of Egea. I conclude the economic and financial analysis with the evolution of the net financial position, which stands at EUR 4.32 billion, up 3% compared to 2024.
It should be noted that the operating cash flow amounted to EUR 943 million, fully covered the EUR 925 million cash out for CapEx investments. Within operating cash flow, we recorded an increase for Superbonus of EUR 43 million, as the credits accrued from rebuilding activities exceeded the credits sold and offset. The increase in the net working capital by EUR 148 million is mainly attributable to three factors. One, tariff receivables in regulated businesses, the so-called extra cap, due beyond 12 months amounted to approximately EUR 80 million. So, of which around EUR 40 million related to water service and 35 million to waste collection, plus other smaller receivables related to deferred incentive collections.
EUR 260 million are due to a reduction in trade payables linked to the seasonal pattern of investments. In 2025, they were more concentrated in the first part of the year, but also to decline in energy prices that characterize the latter part of the year. Three, finally, around EUR 10 million in receivables will be collected for contributions relating to PNRR funded projects. The cash outflow from M&A transactions, acquisition of minority stakes in Iren Acqua and Egea was offset by the issuance of a hybrid bond in January 2025. I will now hand the floor back to Luca for the conclusion of the presentation.
Thank you, Giovanni.
To conclude the presentation, we will now look at 2026, the current year, which will be characterized, according to us, by the implementation of the strategic plan, primarily focused on regulated businesses, with the rollout of the first actions aimed at further sharpening our business model. Two, the maintenance of financial targets and the current rating assessments. Three, the continuation of the efficiency plan, which was set a target of approximately EUR 20 million in additional synergies by the year-end. Regarding energy production in the first quarter of 2026, we can see that, while gas-fired generation and heat production are broadly in line with last year, hydroelectric production is down by approximately 80 GWh.
This trend is attributable to the start of 2026, with hydro reservoirs substantially depleted due to scheduled extraordinary maintenance works on the reservoirs. Therefore, in 2026, we expect an EBITDA growth of 4% compared to 2025, technical investments of approximately EUR 950 million, and thus, stable NFP/EBITDA ratio of 3.1x . We can now move to the Q&A session.
Thank you very much. I would like to remind you that if you would like to ask a question, you have to press the hash five key on your phone. The first question comes from Javier Suarez from Mediobanca. Please go ahead.
Yes. Hello. Good evening, everybody, and thank you for this presentation. I have two questions.
The first is a bit about the context in a situation of emergency for Europe due to the geopolitical crisis. How do you see the impact for a company like Iren of the measures introduced by the government in the energy sector? Can you give us an update about your forecast for 2026 and 2027, and how this hedging strategy may compensate a higher volatility in the sector and in energy prices? This was the first question. The second question was related to the net income guidance. What do you think may be the impact in 2026 and 2027? Can you share guidance on the net impact also for 2026?
Third and last question, I would like to have an update on the supply business. The dynamics that you mentioned, but I would like to have more insights on the first quarter of 2026, what you're seeing at the moment. Do you think there should be updates or changes to your policies and supply activities? Thank you very much.
I will give an introduction, and then we'll give the floor to Giovanni. Talking about the context, it is a very volatile context.
Concerning the impact of the government measures on the energy sector, we are waiting to see what Europe will say about ABS, but we cannot see a high impact, a high economic impact. I will now give the floor to Giovanni.
In 2026, we already did an important hedging strategy. Concerning supply, we covered contracts with a fixed rate at 5%. Concerning production, we covered all our renewable production at 65% with a price of EUR 105. We would also like to note that a small part of our production would not be subject to these provisions due to the green certificates.
This hedging strategy allows us to say that we have about 500-600 GWh uncovered and that are subject to interventions to regulate the prices in a very low way. Referring to bills, the increase of 2% of IRAP on the energy consumption was estimated at EUR 7 billion, EUR 7 million. We expect that if this provision will be kept with this percentage, there will be a negative result of EUR 7 billion, EUR 7 million.
What we foresee in 2036 regarding supply, as we already said, we see a stable CR, and especially in the last part of 2036, we foresee a slight reduction of margins of about EUR 5 per customer compared to 2025. We can say that the first quarter is not marked by particular dynamics regarding churn rate on the supply side. On the production side, as we already said, we point out a reduction on the hydroelectric production compared to last year of about 80 GWh.
These are the main aspects in the energy line that will be related to first quarter.
Thank you. The next question comes to Roberto Letizia by Equita. You have the floor.
Good afternoon. Thank you for this presentation. I would like to do a follow-up on some of your question because you gave the positions open for 2036. I would like also some indications about 2027, and if you could clarify if in 2027 there is more margin for more benefits in power generation because the measures from the government can only compensate what the scenario will develop into.
If there is an intervention on the side of government, there could also be a positive result. I would also like you to comment on how you will manage the spark spread dynamic that at the moment had a collapse. The gas situation with gas is not good, and there was a collapse at 10 GWh in gas production. How do you foresee the situation to develop? Concerning the scenario, I would like you to give us an explanation about gas procurement.
If you have contracts that could have any issues due to force majeure, or if there are any issues related to the volumes or to the dynamics of guarantees liquidation, as we saw in 2022. Last question, if you would like, if you can remind us what could be the elements of 2025 recurring in 2036. Thank you very much.
Yes, compared to 2027, we can already explain our coverages. For 2037, we expect our renewable production of 2.1 TWh. At the moment, we have covered 20%. We cover 20% at a price of about 105 MWh.
Of this 2.1 TWh, we have a covered part. A part that is covered by green certificates and with incentives. We have about 1.5-1.6 TWh. We could have an advantage related to the prices for 2037. These are the volumes. Concerning the spark spread, as you said, the dynamics are highly volatile. The forwards don't give any signals of results. The spark spreads become more positive as we go near every day to the delivery, and they are strongly marked by the gas prices. On the thermoelectric side, in 2026, we cover 20% of thermoelectric production.
Because this will mean losing the possibility of margins that we generate every day with a high probability on the delivery phase. Concerning gas procurement, our supply contracts foresee arrive at the PSV, Italia. We have no force majeure clauses, so they are only to the national territory, so this contractual position puts us in a safe position concerning risks of supply. Also consider the fact that from Qatar we receive 4% of liquid gas for Italy, so this is a low volume.
We don't have force majeure clauses unless we count the one on Italian soil.
Thank you. Next question comes from Francesco Sala by Banca Akros. You have the floor.
Good afternoon. Thank you for allowing us to ask you questions. One is on the investments for 2026. Concerning the target, they are a bit below the average that you really estimated for the following year. Where will the investments be focused in 2026? The second question concerns hydroelectric concessions. Are there any updates on the renewal process? How do you intend to proceed? Thank you very much.
Yes, concerning CapEx, we foresee coherently with the industrial plan.
This is a business unit that we would like to develop and focus on. About EUR 140 million-EUR 150 million for environment, EUR 250 million for energy, and EUR 260 million for the market side. The other investments are corporate investments, so also an upgrade of IT systems, also in line with the new NIS2 directive, which must be complied with by 2026. Concerning hydroelectric aspects, the current directives were put in doubt, and we are now discussing with the government the possibility of a so-called fourth way, which is an extension of the concessions by paying a fee to the companies or to the families.
This is something that we are monitoring, and this applies to all operators and not only to us. We are expecting the decisions of the institutions by the government, by the ARERA.
Thank you. Next question comes from Emanuele Oggioni from Kepler Cheuvreux. You have the floor.
Good afternoon. Thank you for this presentation. I also have a few questions. The first one is a follow-up about the guidance concerning EBITDA. Could you please sum up the 4% of growth foreseen? A confirmation of the guidance of the capacity market of net profit in 2026. I don't know if you already answered these questions. Also the one-off increase of IRAP. This is the first question about the guidance.
The second question is about certification. Could you please describe the reasons for the decision to sell the assets? I don't know if only a part of or a majority of the renewable assets, in particular floating photovoltaic assets. Could you give us a reason for this decision? Something more about the numbers for hydro production. I don't know if the reduction in GWh refers only to a part or to the whole 2026. If the volume of GWh is assumed, and what is the total volume you refer to in 2026? I marked 2.1x for 2037, but I didn't catch the number you said for 2036.
I've seen that there was an increase of provision by that of about EUR 10 million. I would like to understand if you have a guidance about a guidance on 2026, if this was a one-off or related to 2035, or if this will continue or it will increase in 2036. Finally, last question. I saw EUR 14.3 million released in 2025 concerning credits generated by Superbonus. Could you please remind us if there is or still a residual part in 2026 or in the following year? Thank you very much.
Yes, I will like to start with the target of hydroelectric production in 2026.
This reduction for the first quarter is a reduction of about 550 GWh on-year production because it is due to lower reservoirs at the beginning of the year. There were maintenance works on the reservoirs, so we started with little water in the reservoirs. What we foresee for 2026 is 1.2 TWh of hydroelectric production. About 590 GWh of increase for photovoltaic because we have higher powers installed. As we have said, Tinottos plant in Sicily and Bologna's plant will become operational. We have a higher capacity, and we foresee a target of 250-270 GWh.
The usual 150 GWh from thermo. Concerning provisions, we had an increase due to the change from a tax to a tariff to a fee. This was implemented in the foreseen municipalities, and we foresee that there will remain that amount that is stable also for 2036. As for Superbonus, we can say that the activities were terminated, so we don't have more initiatives or only limited initiatives related to nonprofit organizations. We foresee in 2026 to liquidate the credit generated, EUR 43 million, generated in 2025, and also to liquidate a fair amount of about EUR 90 million.
This cash in will compensate the increase in net circulating capital linked to extra cap that will characterize 2026 as well. Regarding EBITDA, the growth of 4% is driven by synergies. In 2025 we reached EUR 950 million. We are planning to add another EUR 20 million in 2026. We also activated a specific project for the performance improvement in addition to the ones we had in previous years, and this will contribute for EUR 20 million. Concerning business dynamics, we have organic growth on the networks. A slight increase in the environment business unit by recovering the margins for the treatment plants.
We believe we can also generate EUR 5 million in 2036. The energy side is driven by the prices and by a higher contribution of the capacity market of about EUR 50 million more than 2035. Concerning the market business units, we can foresee a reduction, as we said before, of about EUR 5 per customer. Overall, a reduction of EUR 10 million. Regarding net profit, we don't give a guidance. We'll give it during the first quarter analysis, as is usual for us. I will give the floor to the president for the asset rotation. Concerning asset rotation, I confirm that no decision was taken.
That is differences from the industrial plan. Of course, with the aim of optimizing the other asset allocation. At the moment, we didn't take any decision. We don't foresee to sell photovoltaic, and we will assess opportunities should there be an opportunity. This doesn't mean we would like to stop investing in the renewable energies. We are one of the major supplier of hydroelectric in Italy. In this stage with the enormous crisis, we should look at the opportunities in sale and in acquisition. I have also read in the newspapers some rumors, but there are no decisions already made.
Thank you. Next question comes from Davide Candela, Intesa Sanpaolo. You have the floor.
Good afternoon. Thank you for this presentation and for accepting my questions. I have a couple questions relating to that. The first one is a clarification about the approximately EUR 90 million that you reported as a guidance for 2026 in the guidance for extra cap. I would like to ask if this is something that is not recoverable, so about EUR 30 million more than the EUR 60 million, or if you are investing more and thus creating a regulatory capital. And if you have a plan to recover this cash that at the moment you are not recovering.
Also concerning that, in light of the scenario that we are seeing in these weeks, do you see anything that has an impact on the medium term? Or does this force you to ask for credit lines and this will impact also the financial burdens on the short term? Thank you.
Concerning security capital, it is correct, this interpretation, that these extra cap credits that are recognized on an economic and financial point of view will be recovered at a later date. On these credits, the inflation is foreseen. We foresee to invest about EUR 50 million on the networks, and this will generate credits.
This will be recovered in the following years. I would say starting from 2028. In 2027, there should be less credits, so the amount should be lower. In 2028, 2029, we should recover the tariffs. These credits are recognized also in the new concessions. If there should be a succession, the new manager should recognize this difference. Concerning 2026, we don't have significant margin cost because our operations are mainly on the DC market. Very low on HECS, so we don't foresee any negative impact on trade.
We are waiting for the conversion of the decree to see if there should be any additional measures that at the moment are not known on the invoicing mechanism.
Thank you. There are no further questions. I would like to give the floor back to the speakers for concluding.
Thank you very much for your attention, for your questions. I would like to wish you a good afternoon and we will hear from each other next time. Bye.