Good afternoon, ladies and gentlemen. Thank you for joining us for EnBW's Conference Call on the First Quarter of Fiscal 2025. I'm joined here by our Deputy CEO and CFO, Thomas Kusterer, who will lead you through the presentation. Now, without further delay, over to you, Thomas.
Thank you, Lenka. It's my great pleasure to welcome you all today. From a financial perspective, the first quarter was a good start into the year, with earnings moderately above last year's level. We recorded a group-adjusted EBITDA of EUR 1.4 billion and confirmed our guidance for the full year. In parallel, our CapEx plan is progressing well, with investments across all segments reaching a total of EUR 1.5 billion. In terms of financing, we successfully returned to the Swiss market with a dual- tranche issuance totaling CHF 350 million, following our last CHF transaction in 2023. This transaction marks an additional step in broadening our footprint in the international debt capital markets, following our inaugural bond issuance in the Australian capital market in October last year. Additionally, private placements with a volume of over EUR 200 million complemented our strategic diversification efforts year to date.
This brings me to the operating highlights of Q1 2025. After two years of construction, our fuel switch power plant in Stuttgart-Münster, with 124 MW of installed capacity, was successfully put into operation just a few weeks ago. It is one of the first hydrogen-ready gas power plants in Germany, replacing the previous coal-fired power plant at the same location, and will be able to run entirely on hydrogen in the future. This is a first step to increase the much-needed dispatchable and flexible power generation capacity to ensure security of supply, with more intermittent renewable energies entering into the market, and the planned shutdown of coal power stations in Germany. Now, with the new government finally being in place, we await a stable and financially attractive legal framework to allow for more investment into additional gas-fired power plant capacity.
On the renewable side, we reached a major milestone at He Dreiht, our 960 MW offshore wind farm currently under construction. EnBW just installed the world's first 15 MW Vestas turbine, the most powerful offshore wind turbine currently available on the market. Another 63 turbines will follow in due course. Also, our expansion of onshore wind and solar capacity is well underway, and we have successfully secured almost 130 MW in German and French public tenders year to date. All in all, we currently have around 1.7 GW of renewables under construction. Finally, we are delighted to have received a positive vote on the authorized capital at our AGM last week, laying the foundation of a potential capital increase. This additional equity provides us with the flexibility to finance further investments of up to EUR 10 billion by 2030 into the expansion of EnBW's integrated portfolio, while maintaining our solid investment-grade ratings.
Now, back to the financials of the first quarter of 2025. As just mentioned, we started well into 2025, achieving an adjusted EBITDA of EUR 1.4 billion for the group, which is some 5% above last year's level. This expected development was mainly driven by the performance of our grids business. Low-risk activities comprising our grids, as well as renewable activities, contributed 70% of our total earnings in Q1, accounting for almost EUR 990 million in adjusted EBITDA, compared to 67% in Q1 of last year. Let's now have a closer look at the performance of our three business segments, starting on slide four. In sustainable generation infrastructure, adjusted EBITDA stood at EUR 691 million after the first three months. Earnings decreased due to lower realized hedge generation margins and unfavorable weather conditions. Starting with renewables, adjusted EBITDA amounted to EUR 303 million.
Year- on- year, earnings were lower as weather conditions in Q1 were quite unfavorable this year, particularly for offshore wind. Compared to normalized wind conditions, and even more so compared to last year's wind levels, the wind yields in Q1 this year were extremely low. This was slightly offset by higher margins from pumped storage and run-of-river power generation. Adjusted EBITDA of thermal generation and trading was at EUR 388 million, marked by lower realized hedge margins and a weaker performance in our gas storage business. First earnings contributions from our new stabilization power plant in Marbach, an installed capacity of 300 MW, partly compensated for this. Let's have a brief look at our thermal power generation for the next three years and the respective hedge levels.
We are fully hedged for this year, 70%-90% for 2026, 20%-50% for 2027, and we already have started hedging first volumes for 2028 as well. This is consistent with our well-established and proven hedging policy. Moving on to system-critical infrastructure on slide five, which comprises our electricity and gas transmission and distribution grids. Adjusted EBITDA of system-critical infrastructure reached EUR 684 million for the first three months, corresponding to an increase of 19%. The significant year-on-year growth can be attributed to higher income from our investments in grid expansion and reinforcement, as well as higher congestion revenues and lower costs for energy losses. This strong performance was partly offset by increased personnel expenses in both our transmission and distribution grid businesses and higher costs for operation and maintenance. Turning to the details on the development of smart infrastructure for customers, as shown on page six.
Our third segment, smart infrastructure for customers, achieved an adjusted EBITDA of EUR 120 million. Operating earnings in our retail and e-mobility businesses were meaningfully higher than last year due to a solid B2C performance. In addition, e-mobility continues to improve further after having reached EBITDA break-even in 2024. Moving on to the earnings drivers, down to adjusted net profit. Adjusted net profit attributable to EnBW shareholders amounted to a solid level of EUR 442 million, approximately EUR 75 million lower than the previous year, mainly marked by a decline in our adjusted financial result due to market valuation effect and higher interest expenses. Moving on to slide eight, with a brief look at our Q1 investments. For the first quarter of 2025, our cross-investments totaled EUR 1.5 billion. This was 11% above the previous year's figure and in line with our planned CapEx program.
90% of these capital expenditures were taxonomy aligned, and 86% were attributable to growth projects linked to the transformation of the energy infrastructure. By the rest, there were investments in retrofitting existing assets. We invested more than 50% of our cross-investments in sustainable generation infrastructure, mainly for the development and construction of our offshore activities in Germany and the U.K., and three hydrogen-ready gas power plants in Baden-Württemberg. More than 40% of our CapEx went into system-critical infrastructure, focusing on the expansion and modernization of our transmission and distribution grids. Construction of our DC transmission line project, SuedLink and Ultranet, as well as on the German hydrogen core network, played a key role for our grid investments. The remaining investments went into smart infrastructure for customers, mostly related to the further expansion of our e-mobility charging infrastructure.
Moreover, and in accordance with payment schedules, we recorded lower proceeds from co-financing contributions by our partners, particularly for our transmission grid operator, TransnetBW. Now, let's take a brief look at our retained cash flow on slide nine. Our retained cash flow amounted to EUR 1 billion in the first three months of 2025, a minor year-on-year decline despite the moderate increase in adjusted EBITDA. Lower non-cash valuation effects in the gas storage business and higher provision utilization were key factors in the decrease. With that, let's move on to the development of net debt. Ladies and gentlemen, as illustrated on slide ten, net debt decreased to EUR 13.5 billion since the end of 2024. This is mainly due to seasonal working capital effects, in particular to gas storage withdrawals during the winter season.
Another driver is the reduction in pension provisions by roughly EUR 300 million compared to year-end, resulting from a 35 basis points increase in the discount rate to 3.8%, reflecting the current market conditions. That brings me to the last slide on our guidance and our guidance for 2025. As already mentioned at the beginning of the presentation, we confirm our full-year guidance for fiscal year 2025. With solid performance during the first quarter and an overall good beginning of the year, we feel comfortable with both the outlook on segment as well as on group level. Now, let me hand back to Lenka.
Thank you so much. Ladies and gentlemen, we will now start with the Q&A session. Sandra, operator, please begin.
Thank you, Madam. We will now begin the Q&A session. Anyone who wishes to ask a question may press star and one on the telephone.
You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questions on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Anyone with a question may press star and one at this time. Once again, to ask a question, please press star followed by one. The first question comes from Andrew Molde from Credit Suisse. Please go ahead.
Yes. Hi, Thomas. Hi, Lenka.
Hi. Welcome, Andrew.
Thank you. A couple of things. Just on the capital increase, when do you actually expect that to come in? Is it going to be? I remember the last capital increase you did, and it took years for you to get it organized.
Is it likely to be this year, or are we talking 2026? That is my first question. Second, I just wanted to ask you on the net debt. I mean, you had an improvement this quarter, and I understand that was seasonal. Have you changed your expectation for the full year? I mean, what are you expecting now for net debt for the full year? Finally, I would just like to ask you one sort of general question. Obviously, we had this blackout in Spain, and they have talked a lot about possibly renewables being one of the reasons, and also kind of the construction of the system and the ancillary services and so on like that. Obviously, Germany also has a lot of renewables, particularly a lot of solar. I just wonder, how secure is the German system?
Do you feel there are sufficient mechanisms in place to prevent something like that happening? We've had a lot of talk about inertia being one of the reasons that the grid could not respond quickly enough because of the sequence of events in Spain. I just want to know, how secure do you think the German network is? I'm sure you probably think it's very secure being the German network, but I just wondered about your comments on that, please.
Yeah, Andrew, let me get started actually with your last question regarding the blackout in Spain and Portugal, and whether the German network is stable. I think in general, I think it's fair to say, Andrew, that the European network as such is extremely stable. We have not seen something like we have now had in Spain and Portugal never before.
From my perspective, we do have a really stable network in Germany, but as I just said, across Europe. The reason for the blackout, I think it's too early to say what it really was. For the time being, it's a lot of speculation ongoing. However, there's now an international expert group installed or established to look into the causes of the blackout. I would really advise that we wait until we get the results from this expert group and not enter into much of speculation. There's already a lot of rumors in the market, so I don't want to participate in that. Again, I think in general, we do have a very stable and solid network infrastructure across Europe. To your second question regarding net debt, yes, indeed, we have seen a slight decrease to EUR 13.4 billion in Q1.
However, we do not adjust our guidance for year-end. Our year-end guidance, if I'm not mistaken, was EUR 17 billion-EUR 17.5 billion in net debt. We stick to that guidance. To your first question regarding capital increase, I mean, as I already mentioned in my presentations, we're extremely happy that we got the resolution regarding the authorized capital. We are now starting to prepare for the capital increase. I'm quite positive that we are going to see the capital increase within this year. I do not think we need a lot of time to get prepared and get it executed. I hope that answers your question, Andrew.
Yeah, that does. That's great, Thomas. Thank you very much.
Perfect. Thank you.
For any further questions, please press star followed by one. So far, there are no further questions from the phone.
Back over to you for any closing remarks.
Thank you. With that, we come to a close. Once again, thank you very much, Thomas and everyone online. As always, if you have any further questions, please do not hesitate to reach out to our team for more details or in-depth discussions. All the best and have a great rest of the day. Bye. Bye.