Good morning, ladies and gentlemen, here at the Park Hyatt in Zürich, and dear participants in the live stream. On behalf of BKW, I'd like to welcome you to the presentation of the annual report 2024. My name is Marisa Fetzer. I'm in charge of group topics in corporate communications at BKW. I'd like to introduce our CEO, Robert Itschner, and our CFO, Martin Zwyssig, with me on stage. This man here on the slide is Finn Rösch. He is a project manager at Essmann Consulting and Planning, a company in the BKW engineering network. He's standing in front of the Roots Timber High Rise in Hamburg's Harbor City. The building was completed last year, and almost all of the apartments on the 19 floors have already been sold. This is the highest building of its type.
Finn Rösch and his team designed the supporting structure of the timber high rise and planned it down to the last screw. Compared to conventional construction, the building method used for the Roots helped save a remarkable 31% of CO2 emissions, approximately 3,520 tons. The Roots is one of many examples of how BKW is helping to design pioneering buildings and offering solutions for the new energy world. Now, before handing over to Robert Itschner, I'd like to briefly talk about the program of today. First, Robert Itschner is going to present the business results 2024, and he's going to give a review of the business year. Martin Zwyssig will present the financial results for the 2024 fiscal year in detail, and Robert Itschner is going to give an outlook on the current fiscal year. We will have time for Q&A.
We will conclude the presentations with a Q&A round. Dear participants in the live stream, you're welcome to enter your questions online during the presentations. We will answer them in the Q&A session. Now, let us begin with the business results 2024, and I'd like to hand over to Robert Itschner.
Thank you, Marisa. Ladies and gentlemen, a hearty welcome to the Media Conference on the Result 2024. I have the great privilege to present gratifying figures to you. Here you can see the overview: CHF 4.8 billion revenue, EBIT CHF 790 million, net profit CHF 647 million. We are clearly above the results of the previous year. It has been a very successful year. All business segments contributed to this very successful result. Martin Zwyssig will give you more details on the key ratios.
Just to remind you, at the capital markets day, we presented our strategy, BKW Solutions 2030, and we also said we would stay with our three-pillar model, but we would slightly change the names. Energy became energy solutions. This includes sustainable energy production and structured customer solutions. That is where we want to grow in the future. Grids is now power grid. There we build and maintain BKW's distribution grid, and we supply over 1 million households and companies. Services turned into infrastructure and buildings. We plan, implement, and maintain forward-looking infrastructure. The renaming was not made because English sounds better. We wanted to emphasize our focus on the three markets: energy, infrastructure, and buildings. These are all markets with great growth opportunities. Let me look at the overall conditions of the business segments.
Energy solutions, but we had a very wet year. For us as hydropower producers, this was a bliss. It was a very good year, and this contributed to this. The year before, 2023, was a very dry year. We had a much lower hydropower production. All in all, we worked very good volume-wise. Another highlight was the approval to the Electricity Act, and we do hope that we can now move forward to make the big investments in Switzerland, something we have been talking about for a long time. This is developing, and we're working on it. This was an important milestone. Another highlight was the yes to the Alpine Solar Project Morsel. That was, again, very pleasing, and we do hope that we can start constructing this solar plant. We have various opinions in Parliament, but we are convinced that we will get the necessary support.
What is not surprising for us, and we mentioned and discussed this at the Capital Market Day, there is a growing demand from major customers for customized energy solutions. This is another growth area. Some very specific highlights: a smaller project that we realized. We are happy about every commissioning of projects, and we are happy to be able to start construction in Gstaad, a hydropower plant supplying energy to 1,400 households. We inaugurated one of the three Swedish wind farms, Rosenskog. We made the investment in 2023, and they contribute to our growth already in renewables. Before Christmas, we invited you to a media event when we celebrated the fifth year of decommissioning of Mühleberg, and we were able to report that we are on budget and on time. We invested or paid CHF 3 billion into the decommissioning and disposal fund. CHF 1 billion will go to decommissioning.
We are on track, and we are nuclear fuel-free since September 2023, and we are in phase two of decommissioning. Something we also mentioned at the media event is that by 2027, we will submit a proposal to the authorities on how we want to use this site after 2034. This is a unique site and is very appropriate for further development. There are not many such sites. We contracted various PPAs, 1 GW last year. We are well on track in our markets, Italy, Germany, and France. In Germany, according to the Montal ranting, we are among the top 10 with regard to PPAs. This is not our primary goal, but it is a pleasing byproduct. Power grids. We saw that photovoltaic expansion is still growing. We have a total capacity of 650 MW installed capacity. That is enormous. 30,000 solar plants, PV plants.
On average, per working day, we connect 25 such PV systems to the grid. We saw a small decline in the second half of last year. In the long run, this expansion will continue. We connected 5,900 solar systems last year with a total output of 135 MW. Now the virtual SIFs. With the Electricity Act, we got some homework, and this is one of the homework we got, the SIFs, the Virtual Associations for Self-Consumption. We installed 16,000 smart meters. By 2028, we will have to have replaced all meters by smart meters. That is a total of 400,000. We will continue this wrap-up. The first 16,000 have been installed, were installed by the end of 2024. This is an example, the 50 kV line in Wilmisfrutigen. CHF 7 million is the investment volume.
There was one topic for which we were criticized, the speed with which we process grid connection applications in the boom period '22-'23. We were lagging behind. We were building up a backlog, and we established a task force and normalized the situation so we can process these grid connection applications much faster. Last year alone, we processed 43,000 forms. That's a lot of paperwork. Here comes something that I'm proud of. We train young people. We have a total of 650 learners or apprentices in BKW. In power grids, we have a total of 66 apprentices, men and women. We launched a career changer program last year and are offering an abbreviated apprenticeship. Out of the 66 apprentices, 43 are such career changers. Again, that's very gratifying.
Now, infrastructure and buildings in the market, we can see an increasing demand for our skills, also a demand for higher complexity projects in engineering, specialist skills on infrastructure, hospitals, water utilities, etc., heat transition. These are all skills that we have in our portfolio where we can offer overall solutions, and we are very interesting partners for private customers and institutional customers. We will continue investing into infrastructure. If we look at Germany, we see that a lot of money will be invested into infrastructure, and we are well positioned to benefit from this growth and support the country. Solar boom, I mentioned it. We saw this demand in the first half year, a slight decline in the second half year, but we are still confident that this trend will continue, and we will push this area, especially in Switzerland. Specific highlights, the Roots was mentioned.
That's a very interesting project that will be copied, probably. We have the biggest battery storage facility in Europe, 200 MWh storage capacity. It was symbolically inaugurated. It will go into operation in these days. The politicians were on site in Germany, in Arzberg. In Switzerland, we have a good project, Albula tunnel 2 in the Grisons, was opened in June 2024. Four of our companies were in this project, the whole cabling, electricity, communication, safety systems, and radio technology for the tunnel. PV, I mentioned with the Solstice brand. We will have a good offering for the Swiss market, and we will double the output to over 75 MW. We're well on track. Before handing over to Martin Zwyssig, two slides on sustainability. You might remember at the capital markets day, we defined new goals, clearer goals. You can see them here.
What I would like to point out is that we are really working on these goals. I'm not going to mention all of this. We have work in process. As I said, we're well on track. Greenhouse gas intensity was reduced. We have the first electric vehicles in operation. We still have some path ahead. Now on governance, we invested a lot so that in the sustainability report, we can base ourselves on the ESRS, the European Sustainability Reporting Standards. We are aligning our reporting with the ESRS. This is no small task. It is very, very demanding. Again, we are well on track, and we were assessed externally, and it was confirmed that we are well on track. T his was my review, and I'd like to hand over to my colleague, Martin Zwyssig, to give us some more details.
Thank you very much, Robert.
Good morning, ladies and gentlemen. Welcome to today's analyst and media conference from my side too. I'm very pleased to guide you through the details of a very successful 2024 financial year. To start with, here's an overview of the key figures. Revenue in the 2024 financial year, BKW generated a revenue of CHF 4.77 billion. This is a plus of 3.8% compared to the previous year. Our EBIT increased to CHF 790 million, which is an increase of 27.3%. The main driver here is the energy business, which once again generated an extraordinary result. In addition to the good result of the power grid segment, the infrastructure and buildings business segment is also responsible for this good result. It even slightly exceeded the communicated target of achieving an EBIT at the 2022 level of CHF 43 million with CHF 57 million.
Our net profit, as you know, includes the revenue from STENFO. That is the decommissioning and waste disposal fund of the NPP Mühleberg. The STENFO performed even better than in the previous year and made a significant contribution to the high net profit. The net profit amounts to CHF 647.5 million. Operating net profit is a key figure, which means net profit adjusted for STENFO. The operating performance of the group amounts to CHF 550.4 million, a plus of 27.4% compared to the previous year. The operating cash flow amounts to an outstanding CHF 739 million. The build-up of networking capital, which was still significant at the end of the first half of the year, was, as expected, substantially curbed over the year as a whole. Details will be provided later on in the comments on the cash flow statement.
Rosie, the return on capital employed is at 9.5%, well above the WACC of BKW. Last but not least, our equity ratio. Despite the dividend payment, the equity ratio increased further to 48.8%, which is 3 percentage points above last year. Now, this slide shows you the business fields on which the development is based, both at revenue and EBIT level. First of all, a few comments about revenue on the left-hand side. In energy solutions, the decline amounts to minus CHF 73 million. One of the main reasons for this reduction is the lower market price level. Power grid, the revenue increased by CHF 133 million, which is mainly due to the tariff increases of Swissgrid and BKW. Infrastructure and buildings, the development was very encouraging, and the increase of the revenue is CHF 135 million.
Around three quarters is attributable to organic growth and one quarter to acquisitions. EBIT on the right-hand side. The lower market price level mentioned before and the resulting decline in revenue had hardly any impact on the result at energy solutions because the procurement costs fell in parallel. There were several positive effects that are the reason for the very good result, and I'll come back to that later on. At power grid, the increase in tariffs to a cost-covering level is the main reason for the improved EBIT. The high hydro production also led to the lower upstream costs as the company's own supplier area was supplied with electricity from nearby power plants. Infrastructure and buildings. This segment performed very gratifyingly and significantly increased its results.
Impairments on customer lists and trademarks, as well as project value adjustments, still had a significant impact on EBIT in the previous year. In 2024, project value adjustments had to be made as well. However, it is encouraging to note that the fluctuations are becoming less frequent and less severe, which goes to show in the result. Now, on this slide and on the following slides, I shall discuss the individual business segments, energy solutions, power grid, and infrastructure and buildings in more detail. First of all, energy solutions. As I've already mentioned, revenue decreased by 3%, or CHF 73 million, to CHF 2.166 billion. The main driver of this decline is the lower level of electricity prices on the energy markets, which reduces revenues quite remarkably.
By contrast, the slightly higher hedged electricity prices compared with the previous year and the additional volumes from hydropower plants have a positive impact on revenue. When it comes to EBIT in 2024, EBIT from the energy business amounts to CHF 586 million, 10%, or CHF 52 million above the level of the successful previous year. The higher hedged electricity prices have a positive impact of around CHF 30 million. Furthermore, the exceptionally high production volumes of our hydropower plants led to an increase of around CHF 60 million compared to the previous year. Due to the ongoing normalization of the market, however, the result of trading fell by CHF 40 million but remains at a high level.
The NPP Leibstadt Fund had a very good performance, which is reflected in lower procurement costs and has a positive impact of around CHF 30 million on the result, but is offset by the costs incurred for the strategic expansion of energy solutions. Let's take a look at the production mix on the right-hand side. In the reporting year, BKW produced 10.6 TWh of energy, around 11% more than last year. The winter weather led to an increase in production from hydropower plants of around 0.9 TWh. Production from wind and PV plants was maintained at the previous year's level, thanks to the three new wind farms in southern Sweden, while the existing wind farms produced less due to low wind levels. The higher availability at the NPP Gösgen increased nuclear production by 0.2 TWh due to prices. The thermal power plants were again little used.
As mentioned, the energy solutions business segment benefited from several favorable factors in 2024, and this is shown on this slide here. First of all, on the left-hand side, the volatility of electricity prices. What you can see here are the fluctuations of the three-year forward electricity prices in the corresponding year, and as a line, the development of average prices. In 2024, the volatility of forward electricity prices decreased. However, it was still at an elevated level. This reduces trading opportunities. Now, in the current year, BKW expects a further normalization of the operating and trading results, which already started to show in the second half of 2024. The chart in the middle shows the hydropower production. In 2024, the wet weather led to an increase in production at hydropower plants of 0.9 TWh.
In a multi-year comparison, this is an increase of over 25% in the volumes produced. However, we do not expect this to be repeated in 2025. Last but not least, the STENFO performance of NPP Leibstadt on the far right. After a poor year on the stock market in 2022 and corresponding losses, the decommissioning and waste disposal funds recovered very well in 2023 and increased significantly again in 2024. BKW's result is influenced by this in two ways. The performance of our own STENFO for the NPP Mühleberg is reflected in the financial result, and the STENFO of the NPP Leibstadt, in which BKW has a 14.5% stake, influences the result through higher or lower energy procurement costs, which in turn influences EBIT.
We don't know what the stock market will be like in 2025, but we're planning with a target return of 2.1% as a standard, and that's also stipulated in the appendix to the relevant regulation. The last two factors, water production and STENFO performance together, had a positive effect of around CHF 100 million or, let's say, CHF 90 million on the 2024 result. On to the power grid business segment. The revenue of power grid increases by CHF 133 million, 25% plus. The passing on of the tariff increases in CHF 27 million of Swissgrid and the pricing in of higher costs and depreciation of plus CHF 15 million percent. This means that this has not had an impact on EBIT. However, there are tariff increases of plus CHF 30 million to a cost-covering level.
The EBIT in the grid business increases by around 28% from CHF 110 million to CHF 140 million. First, again, the above-mentioned tariff increases, and then the increase of the WACC from 3.8% to 4.1% for the year 2024 had also an effect. The hydropower volumes led to lower upstream costs, as I said, as the company's own supply area was able to be supplied with electricity from nearby power plants. The positive EBIT effect here was CHF 8 million. Finally, on to the business segment, infrastructure and buildings. Revenue increased by 7%, or CHF 135 million, to CHF 1.973 billion. Three quarters of this increase was organic growth. The rest was due to acquisitions. On organic sales growth, we can say that the main contributor was the infrastructure services business, which grew by 34.1%, mainly due to major orders in the German high voltage market.
The infrastructure and buildings segment increased its EBIT to CHF 57 million, which corresponds to an increase of CHF 97 million. Excluding the impairment of customer lists and trademarks in the amount of CHF 48 million recognized in the previous year, the improvement amounts to CHF 49 million. Important for you to know is the following. I've already mentioned this before. The INB segment is contributing an additional CHF 16 million in internal costs compared to the previous year due to the adjustment of the allocation concept. This means that the operating performance actually improved by a total of over CHF 60 million in the first half of the year compared to previous year, which is quite remarkable. The level is returning to the level of 2022.
Now, to put all this in perspective, it's obvious that despite these significant improvements, we're still not there where we want to be, as we explained at the capital markets day. It is a very positive step in the right direction. Now, let's turn to the cash flow statement. The group's cash and cash equivalents amounted to CHF 872 million, an increase of CHF 100 million compared to previous year. These are the blue bars that you can see on this line. The operating cash flow before the use of nuclear provisions amounted to a high CHF 843 million. This is due to a substantially high result and only a slight increase in networking capital.
At the end of the first half of 2024, the increase in net working capital was still CHF 179 million and was due to higher gas inventories in trading and uninvoiced work or work in progress. As expected, this build-up of net working capital is still CHF 43 million. The next bar in the chart shows the STENFO of NPP Mühleberg. These are at the previous year's levels of CHF 104 million and are offset against the nuclear provisions. I will come back to that later on. The investment cash flow is CHF 395 million before the STENFO and is below the previous year's level. It's important to note that for the first time, refunds from STENFO of CHF 94 million and payments from the use of nuclear provisions of about CHF 104 million are similar.
In other words, the impact of the decommissioning of NPP Mühleberg is quite negligible and neutral for BKW in terms of free cash flow. All this results in a free cash flow of CHF 438 million for the financial year 2024. That's mentioned in brackets. This free cash flow is sufficient to finance the dividend payments to the tune of CHF 196 million. The high operating cash flow ultimately leads to an increase in cash and cash equivalents to the initially mentioned CHF 872 million. Now, let's take a quick look at where exactly BKW invested. In 2024, investments in property, plant and equipment, intangible assets, and acquisitions amounted to CHF 486 million. 60% of this was invested into growth, and CHF 191 million were invested into maintenance. That's 40%. Now, why does this value differ?
Here, we only consider investments in property, plant and equipment, intangible assets, and acquisitions. However, we exclude, for example, interest and dividends received or income from divestments of property, plant and equipment, or financial assets. On growth in the business segment, energy solutions, CHF 198 million were invested in growth, the largest part of which was for the wind farms in southern Sweden and Italy. In addition, investments were made in the expansion of heating networks and the construction of small hydropower plants. At power grid, growth in investments of CHF 58 million were made into strategic expansion of the power grid. In the INB segment, smaller complementing acquisitions with a total investment volume of 26.8% were made. In maintenance, CHF 102 million was invested in the power grid segment. That's the lion's share.
With the investments into the wind farms in southern Sweden and Italy, in Swiss hydropower, and the strategic expansion of the electricity grid, BKW invested primarily along the value chain of the energy transition. This overview shows you on the left side the development of our net debt and on the right side the maturity profile of our outstanding bonds and notes. First of all, development of net debt. I've already mentioned the development of the liquidity. That's the bars above the zero line. Here, in addition, the short-term financial investments are also taken into account. Financial liabilities remain stable at around CHF 1.9 billion. As a result of the higher cash equivalents and the stable financial liabilities, net debt decreases by CHF 76 million to CHF 876 million as of the reporting date. The maturity profile on the right-hand side, as you can see, is very well balanced.
BKW has an excellent diversification over time, and this means we have a low refinancing risk, great flexibility, and sufficient leeway for further growth financing. What is not included in these figures is the revolving credit facility or syndicated credit line to the tune of CHF 1 billion that we renewed in spring 2024. This is a great liquidity cushion and is not being used. The facility has a term of five years until 2029, with two renewal options of one year each and a guaranteed increase option of CHF 0.5 billion. BKW's A rating allows us to adjust our financial core set at any time to suit our specific needs. On this slide, you can see the balance sheet schematically. Since the situation on the energy markets eased, the balance sheet has been fundamentally stable with slight shifts between current and non-current assets.
Current assets increased by CHF 0.3 billion due to higher cash and cash equivalents and higher gas inventories for trading. Non-current assets increased by CHF 0.3 billion, mainly due to investing activities. Liabilities remained unchanged, more or less, and equity increased by CHF 0.7 billion. The main reasons for the strengthening of equity are the following. First and foremost, the net profit of CHF 647 million earned by the group, and in addition, actuarial gains on defined benefit pension plans, positive currency translation effects, and the recognition of hedging gains in hedge accounting also boosted equity by a total of CHF 153 million. The dividends paid out in the first half of the year amounting to CHF 196 million are charged to equity. As a result, the equity ratio rose by a further 3 percentage points to a solid 48.8%.
This supports further growth and enables us to actively shape the energy transition. On to the return on capital employed and net debt versus EBITDA ratio. The return on capital employed is 9.5%, well above BKW's cost of capital, and is very stable. The ratio of net debt to EBITDA shown on the right, this has improved further to 0.8 and has improved. Last but not least, let's take a look at the dividend proposal. The Board of Directors proposes to the AGM an increase in the dividend of CHF 0.30 to CHF 3.70 per share. The proposed appropriation of available earnings takes account of BKW's long-term dividend policy, which we communicated at the Capital Markets Day.
With the proposed dividend of CHF 3.70, the payout ratio is a good 35%, and a dividend yield of 2.5% will be achieved based on the year-end price of CHF 150 and CHF 20. This concludes my statements, and I would like to hand over to Robert Itschner. Thank you very much.
Thank you, Martin. I am going to look at BKW Solutions 2030 very briefly, not in detail. We are starting with a very strong basis of implementation. We communicated this strategy in November, and we had a very good implementation phase and defined the KPIs that help us measure whether we are on track. We are well on track. Let me give you an outlook of the expected highlights. It is the commissioning of Cerignola Wind Park. That is the biggest wind park in Italy that we are building. We are progressing according to plan.
140,000 households will be served. Around 310 GWh will be produced. This is within our initiative to expand renewables. We will commission a smaller plant, Hydropower Plant Sousbach in the Bernese Oberland, that is 6 GWh. it is a somewhat smaller plant, and it will supply 6,700 households. We invested CHF 50 million into this plant. We will commission a battery storage this year that we are building for ourselves, BKW Infra Services and Energy Solutions. We are building this storage. In our strategy, we spoke about the expansion of battery storage. Here we have the first 60 MWh that we can produce. We will further grow when it comes to structured customer solutions in our core markets. We are considering individual geographic expansions. The rollout of the smart meters was mentioned under power grid, and we will improve the connection applications that will be integrated into our processes.
When it comes to basic supply, we are looking at our product portfolio and trying to diversify it a bit more to cater even better to the needs of our customers. There is a lot of homework that we need to do to implement the Electricity Act. The LECs, the local electricity associations, are one such homework. In infrastructure and buildings, we have a major project. That is the expansion of Terminal 1E at Munich Airport. We are in charge of the planning for building technology and the whole construction project. The terminal and the docks and the gates are being built and renovated. This will contribute to the fact that Munich can become an even better hub for international connections. That is a major project. We will continue working in the energy transition, especially in Germany. We have this major contract from Tennet Grid Reinforcement Project.
We have quite a strong backlog. Unterweser Conneford is such a project. Approximately EUR 15 million is the investment. Another project, Railway Station Bern, is going to be expanded, Bern West. We are in charge of electrification, cabling, low voltage, middle voltage, and also communication. Service is an important growth business. We are laying the foundations for an even stronger growth in this profitable part of our market. This takes me to the last slide. We heard that in energy solutions, we saw a further normalization of the markets. That is something that we mentioned in our strategy. Now we are producing the results. Electricity production from our own plants for 2025 has already been largely hedged at attractive prices. Power grid, we expect the usual stable earnings contributions, and we will continue on the path that we started.
We want to grow selectively in the profitable unit and taking all this into account, we're expecting EBIT in the range of CHF 650 million-CHF 750 million for the current year, 2025. This concludes my presentation. I'd like to hand back and thank you for your attention.
Thank you both, Robert and Martin, for your presentations. Ladies and gentlemen, now it's time for your questions. We received some questions in the live stream already. Thank you very much for this. Ladies and gentlemen here in the room, please wait for the microphones. My colleagues on the left and on the right will bring the microphone to you. Please state your name and the company you represent. Is there a first question her e in the room? Yes, please. First row, please.
Janik Rüegg, Zürcher Kantonalbank . I have two questions. First question on the general hedging strategy of BKW.
We keep reading that it has changed slightly. Has there been a change, or are you hedging production three years ahead? That is the first question. Second question on the outlook, the absolute EBIT, CHF 650 million-CHF 750 million. That is the range you mentioned. The way I calculated, the hedging of higher electricity prices should have a positive effect of CHF 150 million. The service segment should improve CHF 30 million additional EBIT. Maybe it will not rain as much. Then hydro will be deducted CHF 60 million. I still have an EBIT that is CHF 120 million higher. Can I assume that you are assuming that this will be eaten up by a lower trading result?
First, the easier question, hedging strategy, yes. We are hedging in the spring, around this time of year, three years ahead. That is, we hedge production. Nothing has changed there.
Now on the outlook, the higher electricity prices, the figure is correct, about CHF 150 million additional secured price. That will be a positive EBIT effect. These are the hedge prices that we hedged three years ago. Improvement of services, yes. Of course, CHF 60 million, yes, correct. That is the effect of hydro production. What is missing is the CHF 30 million from the KKL performance. That is Leibstadt, that will flow into the EBIT. Why the difference? Different comes or it is traced back to trade. It is due to the volatility. The way we see the normalization of the markets. These positive effects will be eaten up by the lower trading result or be balanced out. The positive effect of hydro and KKL performance, we do not rely on that. We do not take this into account. That is correct, your analysis. We are cautious.
The success from energy own trading, CHF 1.6 million or something, yes. That's not exaggerated, yes.
Thank you. Thank you, Martin. I'm going to take a question from the live stream. We have an anonymous question on the work. On the imputed interest rate, what does the reduction of this interest rate have in the way of an impact on the work? Will BKW invest less into the power grid?
We're not happy about the reduction of this interest rate. We don't think this is a good idea. With a view to the developments we try to achieve, we will stay with our policy that the individual business segments will realize their own growth. This is true for power grids and all the other segments.
If we see that the work will go down to a level that does not guarantee this, we will have to really think twice about how fast we can go on with this development. We will have to involve our stakeholders and the authorities. Of course, this interest rate can go up or down. We will see how it will develop and what the repercussions will be on the investment speed into the grid. Thank you.
Thank you, Robert. Mr. Reichberg, there is a question here.
Alwin Reichberg, ZKB. I have two additional questions. One, the hedging business, three years, you said still. The amount or the volume of the hedging. Your colleagues reduced the hedging volume marginally. What about you? Another question with regard to the work and the rollout with the smart meters there compared to your competitions. You are slightly lagging. That is my impression.
Is that a tactical decision with a view to the work? Hedging volume, is it the quantity you're referring to, 90%? It's the percentage, yes. How much is being hedged? On what day? It is in the responsibility of trade. We're heading over the total volume to trading, and they start hedging. It takes about three to four weeks to do this. The decisions are with trade. If they take a position, say, I will keep 10%, that's their decision. This is tactical, not strategic. I can see how the prices are moving. There is a certain expectation. Generally speaking, we want to hedge everything. We're not saying strategically 10% will not be hedged. That could be done if trade had a specific idea. They could say, okay, we withhold 10%, but generally we hedge the total.
Smart meters had nothing to do with the work.
That was a decision that was made years ago that we use the time that the regulator gives us until 2028. We do have time so that we can be certain that we are building in the right smart meter. We saw very good developments with regard to technology. We are benefiting from the fact that we waited a little bit, but it would be nice if everybody had a smart meter already.
Thank you very much. There is another question from the live stream. We were talking about the hedged prices and trade. We have a question in the live stream. Can you give an indication on the average hedged prices for the next three years?
Currently, we are hedging prices for the coming three years. What we hedged last year, it is CHF 60 for the time in three years, 2027.
Currently, we are hedging the volumes. I cannot give you any figures yet.
Here in the room, I have two sm all questions. You had a very good half year and a normalized second half year. The first half year was very good. He drove on Stanford, these special effects. What's the seasonality there? Is it similar in every half year, or did it boost particularly the first half year?
Stanford was active the whole year. You know the development in the stock exchanges. Hydro was more effective in the first half year, not so much in the second half year. There was a lot of rain in the first half year.
The power purchase agreements, you said, it was an extra GW. What's the basis for this plus? Is this a significant contribution to the EBIT bridge for solutions?
Probably not. Currently, not a big EBIT contribution with the PPAs. This one gigaplus, what is the basis, is my question.
In Germany alone, 4.8 GW. That's the figure. That's the biggest of our markets. It's significant. That's the answer.
On the power grid, you're writing about the stable EBIT and the outlook and the work will go down. What is the factor that is the positive driver?
The influence of the work. You know, we have about CHF 2 billion regulatory asset base. As of 2026, the work will go down. It's against 2024. It will be about CHF 12 million this effect. Between 2024 to 2025, it's almost negligible. Some of the 4.13 will go down to 3.93. I think we will not really feel this.
The last strategic question. Should there be peace in Ukraine?
What would be the expected scenario on electricity prices that you're expecting? Could this lead to a lower price?
That's the million-dollar question. I am not sure I can answer this question. The market is very nervous. On the 12th of February, Trump announced that he wants peace with Russia and the gas price dropped. It was a two-digit drop. The market is very nervous. If we imported Russian gas or not in the EU, that's a big question. Do we want to be dependent on the U.S.? Another big question, relevant questions, obviously. We have no certainties, and I cannot give you more certainty. It's something we're following very closely. We are trying to come up with an opinion, but I don't think it would be a good idea to offer concrete figures. Thank you very much for these questions.
Again, Armin Rechberger, ZKB.
The reversion is something that is being discussed time and again. You may profit, benefit from this. Where could you really benefit if these concessions expire and you could take over other concessions? Are there any examples? For example, in the canton of Bern, I am not aware of many of these cases. Maybe in Germany, you've had good productions also due to higher water levels. You probably benefited from these higher levels. What is the current status there? Battery storage. Is it mainly battery storage examples outside of Switzerland, or do you have any examples of battery storage facilities in Switzerland? Why is Germany more profitable, maybe?
I'm not sure whether I said that we would benefit from reverse because we will lose capacities depending on the individual cantons and how they view things.
We will see what these reversions will mean for us and how they will be going about. That is something that we will only feel in the 2040s. That is when the reversions, first reversions will take place. We have concessions for hydropower plants, Ricardo, for example, for many years. We have a clear understanding of how we want to proceed, and we are quite positive that this will be a good thing. Dunkelflaute, yes, Switzerland helped to safeguard grid stability in Europe. I think this is a really good example that goes to show that we play a role in the grid because we benefit from this balancing in the grid, these 40 lines that connect us with the European grid. Primarily that was in November when Dunkelflaute in Germany came about and when we contributed with our hydro park.
However, the Lake of Grimsel had to be depleted because we are now building up the dam. Therefore, we have, of course, in sum, in total, less water. The battery storage facilities in Germany, of course, this is a business part that's already further developed. There are no reasons speaking against such facilities being built in Switzerland too. I have talked about the site, the location of NPP Mühleberg, other power plants. It is absolutely possible that we might build a battery storage facility there. It is a good location close to the river, and that can be used then, for example, during the night or in bad weather periods. Germany is certainly ahead of us and works just faster in this area, currently at least.
Thank you very much. Another question.
Thank you for the presentation, Emmanuel Ojoni at Kepler Chevreux. I have three questions.
The first one is on the generation business. I would like to understand better the embedded hypothesis behind your 2025 guidance as regards the output production, in particular for hydroelectric capacity, considering the poor snowfall condition in year-to-date at least. It seemed quite dry year so far. Still on the generation business, the expected capacity to be added in 2025 and 2026 based on your current visible late-stage projects in the pipeline. This is the first question.
Thank you very much. [Foreign language] Ich werde die Fragen kurz auf Deutsch zusammenfassen. I shall now summarize the question in German, and we will then answer the question in German. The host is now repeating the question in German. [Foreign language] Der Ausblick ist im 2025 bis jetzt trocken, was wir hier sagen können, wie das weitergeht.
[Foreign language] Und die zweite Frage geht die Projektpipeline, die wir haben, was wir hier auch analysieren oder was wir erwarten, was wir an Kapazitäten dieses und nächstes Jahr anschließen werden. Vielleicht over to you, Martin.
First of all, on production in terms of water, I'm not sure whether I can give you a forecast here. What I can say is the following: it has been a dry year so far. However, I really do not know how this will develop in terms of hydro production. We wouldn't have expected a plus of 0.9 TWh last year. I really cannot give you a forecast here. When it comes to capacities, what was the question exactly about expansion? Yes, Cerignola is, for example, one example that expands our portfolio with 310 GWh. We will have further projects that we will try to acquire.
However, in the wind business, we might also invest into the early phases of certain projects because we have only bought acquisitions when the projects could be realized.
We do have certain projects in Switzerland, for example, Morsel Solar with 30 GWh. This then is another one, Belpmoos Solar at the airport of Bern, for example, a major solar project. We have the wind farm of Tow Law. These are the immediate projects on which we're currently working. We are on the way to expand the pipeline outside of Switzerland. Maybe just one remark about hydro. I do have the impression that we have quite dry weather this year, but we did have quite large snowfalls just before Christmas. KWO have told us that a large part of hydro levels are quite high, but the year is still young, so many things may happen there.
Thank you, Robert, for these comments. I would like to go into a question about water as well. We have a question in the live chat. We heard that the Lake Grimsel was completely emptied. Peter Gürtler of Tax Advice asks, in terms of the Grimsel Lake, which was emptied, and BKW has a 50% stake at the KWO, that's Kraftwerk Oberhasli. What's the impact on the financial statement 2025?
Oh, that is a very good question. Good question. I cannot really tell you off the cuff, but I think it does have an impact. If you are very good at calculating, then you can do it right away. Unfortunately, I cannot do it right away now, but I can come back to the answer later on.
We had another question at the back of the hall.
Z Capital. I have a question.
EBIT in 2024 was charged by about CHF 50 million. What's the forecast for 2025? If I look at the CHF 50 million and if I look at your guidance for 2025 in terms of EBIT, and if I ass ume that this is not recurring, then I have to say your guidance is very conservative. Is that right?
Yes, I can answer your question. Every single year in October, when we discuss our price curve and also fix the basis at the management level in terms of assets, we have certain values that come up. This is just one value that we base upon. Last year, it was CHF 50 million, but I think this is not just one impairment for one facility, but it is a bunch of various impairments and adjustments that we have in our books.
I cannot yet tell you what the price curve will look like in October, but in the past, it was shown that time and again, we had to make value adjustments or impairments. In terms of the fluctuations of the WACC, of course, they play an important role too. This year, it was not really the impairment, but it was really the expectation of electricity prices that really had an impact. It is, I think, a good thing not just to pick out one single value and base your assumptions on just one value for 2025.
We have another question in the live stream about hedged prices by Richard Alderman, BTIG. Thank you for this question in the live stream. What is the achieved hedge price 2025 and 2026?
Now for 2025, that is the big leap. That is actually now coming from 2024 to 2025, I must say.
This will be a price leap of about CHF 35 to CHF 92. That is hedged for 2025. In 2026, it will be slightly above CHF 100 until it might go back again in 2027.
Thank you very much, Martin. Are there any other questions in this room? Yes, please.
Emmanuel Ojoni Kepler Chevreux. I have another two questions. The first one is on the networks, electricity networks. If you can share with us the regulatory asset base value for the end of 2024. The other second question is on the infrastructure and building business unit. You are exposed to the German economy, and we know that recently the government will announce a big public spending also in infrastructure. We could be directly involved. I would like to have a comment from you. Thank you.
Thank you.
Regulatory asset base slightly above the CHF 2 billion, CHF 2.x billion.
2.x billion, that is. Thank you very much. That was the answer to the first question. The second question is infrastructures and building of BKW. The moderator is summarizing the question for the German-speaking audience. [Foreign language]
Yes, of co urse, I can comment on that. We are very optimistic and even euphoric on the development for the structure. These infrastructure investments are very high. That is great. If the German government now has announced that other infrastructures have to be renewed, such as bridges, we can only say that we are very well positioned to benefit from such projects and to support these programs.
Thank you very much. We have further questions in the live stream. Change of topic, PPA business. We have a question of Andreas Lochner. You've already mentioned the PPA business.
What are the growth targets and what are the growth opportunities despite the issues in wind and PV? Are there still good prices possible in the market?
Yes, we do have certain targets, and the market is changing here. Our assessment is the following. We will expand renewables, and that will continue. We, of course, have to sell this in the market. I think PPA is a very good tool to do that. We support this very much. It is also by regulations also pushed this forward. PPA markets are very gratifying. I think we are quite optimistic that we will be able to achieve our goals. However, the market is subject to great fluctuations. That is true. We are growing profitably. It is not just about volume. It is really profitability that we are envisaging.
Thank you very much, Robert.
A question from the live stream from Carnot Capital, AG. These are the virtual associations for self-consumption. Could you quantify the financial effects if 50% of all PV installations, for example, use this possibility of these virtual associations?
We have the paradox situation. As a grid operator, we have a cost model that we uphold in Switzerland. We try to offset costs that arise in the grid. We try to offset this with the tariffs in the grid. These costs, and for those consumers that are in these associations, will benefit from lower tariffs. We have to offset the cost basis. It means that it does not really have any financial effects on BKW, but we have to upgrade the systems, of course. It means, in a nutshell, that this is, for us, cost-neutral.
What, of course, we hope for with regard to these tools is that the local consumption will increase and that we can reduce the grid expansion speed, which will lower the cost in the grid. That is the ambition of the regulatory authorities as well. That is why these VZEFs, these associations, virtual associations were created. We are absolutely in favor to do this. Of course, the local self-consumption needs to increase as well.
Any further questions in this room? Yes, Mr. Rechberger.
KWO and the large projects of TRIFT and the increase of the dam of Lake Grimsel. There was a back and forth with certain environmental associations. What is the status there? What can you tell us of what the schedule looks like?
It sounds definitely better than in the past.
With the Electricity Act that was passed last year and got a yes from the population, we do have a consent from the population. However, we do have two appeals from cantonal associations in terms of KWO. The political realm took note of this, that it is still stagnating, this development. We are now discussing whether the right to appeal by environmental associations could be suspended for these specific projects. Of course, it is important to find common solutions in Switzerland. However, it is also a difficult thing because it is slow and politics is a little bit nervous because we need to push forward here. We have a referendum with a clear yes, and we need to go forward. We really do hope that we will find a solution. KWO is having a positive dialogue for the dam of the Grimsel.
Aqua Viva, we do not know yet whether we will find a solution for the concession there. We are quite optimistic, I must say. KWO is ready for discussions, has always been. We are quite optimistic here. These are important projects, and we can just not have another 20 years of discussions. I think that is exactly it. We need to calculate with 20 years of discussions. No, I do not calculate with 20 years. Maybe I am a complete optimist, but I firmly believe that we can do this because the awareness in Switzerland is increasing. If we can do this very first step, then we will already achieve much. We really need to push forward with these projects right now. I think the expectations are increasing as well. Everyone is hoping for a solution.
Thank you so much.
Are there any more questions here in the room? This does not seem to be the case. We have two more questions in the live stream. Richard Alderman from BTIG. The first one is, can you please outline what has changed in the energy business given at the November Capital Markets Day? Your power hedging slide suggested a 2025 security price comfortably above that achieved in 2024. Have you lost money in trading and optimization in Q1, or are you being very conservative at the start of the year and assuming that contribution from trading will be much smaller than in 2024?
The price difference between 2024 and 2025, that is CHF 35 for 2025. We lost money. Did we lose money? Was the question? No, we did not lose money. Trading at the end of last year and the beginning of this year did not really start euphorically.
We had moderate results in trading November, December, and January and February too of this year. We're not particularly conservative or cautious on how we evaluate the market. That's my answer.
Thank you, Martin. We have a question by Peter Gürtler . Ladies and gentlemen, income tax, is that a position you could say more about? In 2024, CHF 173.4 million, that is, and 2023, CHF 104.1 million.
Yes, there is a note 13 in the annex to the annual report. All effects are explained there. You start with an applicable tax rate. That's about 20%, slightly above. Between 2023 and 2024, there has hardly been any changes. This is what we have to pay by law without any one-off or special effects. In 2023, what were the special effects?
We had contribution deductions that were not much higher than in 2024 based on a dividend that we paid out in Italy. In 2024, we had an additional resource tax income from Norway. No, that we had to pay, sorry, because we had a certain backlog because this is a new tax. We did not really know how much we would have to pay there because it is a new tax. There were special effects, various special effects. The main effect, however, the main impact, it is the profit that we need to pay taxes on. That is the difference between the two figures. I do hope I made this clear.
Thank you, Martin. Are there more questions in the live stream? Oh, again, Berger, research partners, AG, is Ukraine a topic in infrastructure and buildings? Protection of the energy infrastructure and repair. Will BKW be involved in that?
We have enough work in the markets where we are already active. Currently, we really are using our full capacity, and we are focusing on Switzerland and Germany.
Thank you. Let me check if there are any more questions here in this room. There is another question in the live stream. Yannick Belzil, NZZ, acceleration ordinance on the expansion of hydro, solar, and wind power. The parliament said they would look into that in more depth. What would that mean for electricity supply in Switzerland?
Mr. Belzil is better informed than me on the current developments, political developments. In the short term, we keep on having a dialogue. We are looking for solutions. If politics give us some momentum, all the better. I do hope there will not be too many objections because this will delay the whole process.
That is why we really focus on having a dialogue.
There is yet another question from Andreas Lochner. Montel, Federal Councilor Albert Rösti called the decommissioning of Mühleberg a failure, a political failure. How do you see that?
We are looking in the mid-range and in the long term on what we voted on. This is our focus. I want to see progress in these areas. It does not really make sense to imagine an ideal situation in the year 2060 if we cannot manage to realize projects in the next 10 years. What the power mix will be, whether nuclear power will play a more important role in the future, this technology is developing, and we are open to technologies and new technologies. We will look at the situation when it comes up and make a decision.
Thank you, Robert.
Are there any more questions here in the room? This does not seem to be the case. No more questions. Open questions in the live stream. I'd like to thank you on behalf of BKW very much for your interest. Thank you for having come here. We would like to invite all the guests here to an aperitif in the foyer. Thank you so much for having joined us today. We would be very happy to see you again on the 21st of August of this year for the half-year report 2025. Enjoy spring, enjoy summer. Thank you again, and hope to see you again.