Good morning, ladies and gentlemen. I would like to wish everybody a good morning to the audience here at the Widder Hotel and in Zurich, and our esteemed participants in the live stream. On behalf of BKW AG, I would like to extend a cordial welcome to our analyst. Marisa Fetzer, I am Head of Group Topics for Corporate Communications of BKW. I would like to welcome on stage Robert Itschner, CEO of BKW. Annual report, you can see Farzaneh Abbaspourtorbati. She's Head of Long-Term Asset Optimization for BKW. She's standing on the new Spitallamm Dam, 113 meters high, which BKW holds vast hydropower plant entity. CapEx investments are key to the success of the energy transition against the backdrop of generation. This is the Solutions 2030 strategy.
Before I continue through today's program, Robert Itschner will take the floor in a minute to give you a quick glance at the result, and will then go on to explain the most important developments of 2025 in its Power Grid and infrastructure and buildings. He will then also explain the main thrusts for the current year. After that, BKW 2025 fiscal year in detail. He will also present the EBIT guidance for 2026. Have the chance to ask questions during the question and answer session on the 2025 financial results. Questions from the live stream can be submitted during the presentation. They will then be of BKW, and I'm happy to hand the floor to Robert Itschner.
Thank you very much. A warm welcome, ladies and gentlemen. Results 2025. I'm very happy to inform you that we had a solid operating result in 2025. Total operating income of CHF 4.5 billion. This is also including the value adjustment of the Wilhelmshaven coal-fired power plant. We want to convert and expand the system, but there is also a sustained customer demand. Infrastructure in this wind, low laden. It is a dry year, 2025, and therefore hydro production, as we will see later on, is rather low. It is quite surprising to have such low wind levels over the entire Switzerland and Europe. This is quite remarkable. Now let us go into the engines. We have very successfully started the implementation of our growth strategy. There were some challenges.
This is in Zürich, Düsseldorf, Paris, and of having 24-hour trading strengthened our BKW portfolio. Commissioned new power plants. Their hydropower plant in the Bernese Oberland, which is called Sousbach, with 11 MW output. We've already mentioned the expansion of our green electricity purchase agreements. We are very well on track there. Also, when it comes to direct marketing, we are now one of the biggest direct marketers by the acquisition of CKW. The topic of virtual power plants is very important to us. We've been working on this forward. This is about pooling of smaller power optimally in the market. This is just one example or a few highlights of 2025. We've already been making project progress there as well in terms of these projects. A few success stories. Certainly, Cerignola, we're working with this for eight.
Italy with a total that we had to negotiate and find an agreement on time with the construction of the entire farm. I've mentioned the name. This is an acquisition of a marketer of flexibility in Germany with a very good customer base, which is extremely important for us so that we expand this flexibility portfolio step by step. Another example for a large battery contract in conclusion. That's absolutely crucial for us. Parts of our investments have been invested in new production assets, for example. We just wanted to be very transparent here where we are at. We have the ambition of 20. The pipeline of the various acquisitions under construction. What you can see here, the pipelines are really gratifying to look at.
Of course, they have to be expanded to some extent, but we are very happy with this setup, and we're looking optimistically into the future so that we can have more fine investing decisions in the future. For example, when it comes to hydro, of course is something for example the investment pipeline, so that you can see how well we implement our strategy. When it comes to these projects, it always figures. I do think that with regard to our pipeline, expectations have been a little bit high here, it's very interesting to be able to smart meter rollout about 2.5 or three years. The Power Grid segment. First of all, the fact that we have a very high availability level in our distribution grid. That means that the grid is at a very good quality.
Only to 16 minutes. This is in terms at a very high level. It doesn't have a high level here. I've already talked about summary of. Then we have 16 that we buildings, a few highlights here. Profit by five for per se improvements, efficiency, for example. We also want to grow in certain parts of the market. We made a few smaller acquisitions, especially when it comes to project management. That is steering, controlling projects. That is a very gratifying business. We acquired a smaller company there with about 60 FTEs, and we have now a very solid position in the market there. We have various rather big infrastructure projects to starting this conference, but also, for example, the bundling of rail activities in Switzerland has been progressive, and this is very service.
We also have a few nice success stories that I would like to highlight. For example, CHEMOFAST Anchoring in Willich. It's a huge logistics area that we are constructing. Energy efficiency and various of our strengths. E.g., pipeline meters in line lengths. The total volume is EUR 147 million, 50% of which is without technology. We are focusing on certain tools here in order to reach our end consumers. This is a very interesting topic, especially in Switzerland with building solutions at present. Let us have a look at our Solutions 2030. Intensity by 24% compared to 2022. Gratifying, we are well on our way. We were able to decrease the number of lost time injury frequency. These are occupational, at least one day of inability to work. This was decreased.
This will prove I do not want to go here into every single detail, but we need to know that our services are certainly demanded in the market. However, there are challenges not only for this year, but also for the coming years and going forward. Across Europe, that is rather challenging and always moving with some uncertainties, prices too. Also challenges in Switzerland, something that we've been observing. Smaller power plants that become part of BKW, that is nice because we can cover the fixed costs there. However, it is of course at quite a lot of expenses to integrate such small power plants going forward. In terms of expert structures, we need to see at a high level. This is a rather balanced picture overall. Now, what is on the right-hand side, you can.
When it comes to BESS and other power plants, we will have final investment decisions pending in the coming months. We've already commissioned 82.5 MW, for example, with Cerignola in Italy, so this portfolio is expanding and the rollout is of course to proceed further when it comes to structure and buildings. We also want very specific M&A opportunities. This gives us a high stability. Over the past 20 months, we've great opportunities and projects. With 20 months in engineering, 18 in info services, and 10. This was it from my part, and I'd like to hand over to Martin for the figures.
Thank you, Robert. I would also like to welcome you very warmly to today's Analyst and Media Conference, Financial Results 2025. Let me start by giving you an overview of our key figures. First of all, a short note on the value adjustment for our interest in the Wilhelmshaven coal power plant, which we communicated as energy procurement cost. That's usually if you have an impairment of an asset, it becomes recognized either in EBIT for onerous contracts figures. I will focus on the columns excluding the value adjustment for Wilhelmshaven. BKW generated this fiscal year, as mentioned by Robert Itschner. This corresponds to a percentage change of -4.8% compared to the previous year.
EBIT, amounting to CHF 113.7 million, decreases by CHF 115.3 million, or 14.6%, year-over-year. Range of 650-600. That we communicate blind. Of it decreased more than EBIT. The reason for the stronger decline in net profit, the Decommissioning and Disposal Fund, compared to the previous year, it performed less well than planned, and I will refer to this a little bit later. The performance of STENFO for Mühleberg is reported in the financial CHF 82.4 million compared to the previous year. We had a normal expense. The income taxes amounted to CHF 121.8 million. That's slight in net profit. Presents the operating performance of the group, representing a decrease of 19.3% compared to the previous year.
Despite the lower earnings, operating cash flow comes to CHF 685.9 million, and I will come to the details on this when I comment on the cash flow statement. % significantly exceeding BKW's WACC. Equity ratio, it was strong at 1.5 as well. This slide shows you the performance of the business segments and their contribution to the result, both first on revenue of the CHF 70.9 million. Generation of hydro and wind power plants and the lower price level in the business with independent customers. At Power Grid, revenue drops by CHF 43.8 million due to the EBIT neutral pass-through of the tariff reductions for ancillary services and the winter power reserve of Swissgrid.
In buildings, as the segment is focusing on more profitable projects, this leads to a slight reduction in organic revenue, while growth enabled by acquisitions can compensate for this, resulting in a small plus of the previous year. In the support functions, the decline in revenue is mainly due to the disposal of the two-thirds stake in the customer service and metering provider, CKW. Now, EBIT on the right-hand side at Energy Solutions, the expected normalization of the energy markets shows despite higher hedge prices, the EBIT is lower. Due to a growing regulatory asset base has a negative impact on EBIT. We are very pleased with the performance of the infrastructure and building segment, where the result could be increased considerably. This is attributed in previous years.
In addition, substantial project impairments had to be made in the course of our equity in activities, which is necessary for tax purposes at the level of BKW AG holding. Slide: Infrastructure. You can see the revenue in millions of CHF 2,101, which leads to a reduction in energy sales with an ensuing negative effect on EBIT. Now, EBIT comes to CHF 1,020 million CHF below previous earnings to the tune of 150 million CHF, while lower volumes had an adverse effect on EBIT in the amount of approximately 90 million CHF. The ongoing market normalization dampens result from previous year. The market environment during the reporting period was characterized by noticeable normalization on forward markets. Compared to previous years, there were no extraordinary revenues from short-term disruptive market events. This return to more stable market conditions reduces earnings opportunities.
The ancillary services and intraday business, however, continued to perform strongly. Which has decreased, so that's still above the total. We will see that impact of CHF 25 million later on. Let's take a look at the production under review, that's some 14% less than in the previous year. Due to the drier weather, the production of hydropower plants decreased by about 1.2 TWh, and you can see this at the bottom of the slide. Owing to favorable wind conditions, the nuclear power plants in which BKW holds ownership are producing the same amount as the previous year. Furthermore, both the further decline in price volatility on forward markets and the low production in a multi-year comparison have had a negative impact on the Energy Solutions business segment, as illustrated by this slide.
Above the target return of 2.8%, I mentioned this, it has a less positive influence on earnings than in 2024. Now, for the volatility of electricity prices and a further decline in year-on-year comparison. As mentioned, this reduces opportunities in trading and limits the possibilities of generation due to a significant decline in production from hydro of 1.2 TWh, and, in a multi-year comparison, it was lower, and the performance of the KKL STENFO fund reduces energy procurement earnings in 2025 by less than in the previous year. Revenue declines by 43 points. The main reason for the lower revenue is the EBIT neutral pass-through of tariff reductions for system services and the winter power reserve of Switzerland.
In addition, the decline in grid usage adversely, EBIT of the Power Grid business declines by approximately 7% from CHF 140 to CHF 130 previous year due to higher costs related to the smart meter rollout and project-related expenses. In the reporting period as a consequence of the growing regulatory asset base due to investing activities. These costs form part of the general production costs, which will be accounted for in future power tariffs. To Infrastructure & Buildings. Let's take a look at rises from 975 to 3 million as a result of. Slightly overcompensated by non-organic growth. Now, on EBIT, the Infrastructure & Buildings segment managed to grow EBIT to CHF 80 million, a year-on-year increase of 23%.
Leading performance becomes apparent if you consider the reduction in operating expenses as a ratio of total revenue in the EBIT margin. Underscores the successful and stringent implementation of the measures from previous years. Please allow me to reiterate comments from previous presentations. This is a positive interim result, and we are able to report on another year. Let's now leave the income statement and proceed to the cash flow statement. 800 declined by CHF 17.5 million lower than in the previous year. The high operating cash flow before the use of nuclear, at CHF 88.7 million, and with about CHF 55 million in previous year. Cash flow doubled to cash inflow from investing cash flow for the decommissioning and disposal of Mühleberg nuclear power plant.
At CHF 102.7 million, they are at the same level as last year. 102.8 million cash flow from investing activities before STENFO refunds is slightly above the previous year. Cash inflows, they are built over time, amounts to CHF 94 million. It is important to note that the refunds from STENFO must largely match the expenses. We could also say the influence from the decommissioning of nuclear power plant in Mühleberg is the bottom line here is a positive 25, and you can see the gray bar here across the first 14.6 million. The high operating cash flow results in the mentioned figure for cash and cash equivalents of 850. Now, as announced, let's take a look at where BKW has invested.
In 2025, investments in property, plant and equipment, intangible assets, and the acquisition of group companies amounted to CHF 456.6 million. Of these, 56% were for growth and CHF 200.9 million, or approximately 44%, were for maintenance. Why does this figure investments in property and exclude, for example, bits of property, plant and equipment or financial assets? Distribution segment CHF 143.7 million were invested in growth, largely for the expansion in Germany, the expansion of district heating networks, and the expansion of hydropower plants. At Power Grid, the investment in growth and the strategic expansion of the electricity grid. At Infrastructure and Buildings, we undertook smaller-scale acquisition.
One note on maintenance of the CHF 200.9 million investment in maintenance. This overview shows you the development of net debt on the left-hand side and the maturity profile of our outstandings and liquidity. You can see this on the left-hand side. The bars above the zero line, I've already explained. That remains stable at around CHF 1.89 billion. As a result of virtually as of the reporting date has changed CHF 138.2 million. Bonds and debentures is, this means low refinancing risks, great flexibility, and corresponding room to maneuver for future growth financing. Important RCF of CHF 1.5 billion. This serves as an additional liquidity buffer and has not been utilized in one year. BKW at any time.
This slide shows a rough outline of our balance sheet. Since the net debt slightly shifts, current assets and reserves. Non-current assets increased by CHF 0.2 billion, mainly due to our ongoing investment activity. Liabilities decreased by a total of CHF 0.3 billion, and this was mainly due to tax liabilities. In turn, the net increase in provisions for onerous contract value adjustment is almost fully compensated by the use of decommissioning and disposal. Fund provisions remain stable despite. Equity is first and foremost, net operating profit of CHF 387.9 million. Further, the actuarial gains from the remeasurement of defined benefit changes to 2.7%, which supports further growth and enables us to continue to actively shape the energy transition. Now, ROIC, our adjustment comes to 7.5% and clearly surpasses BKW's capital costs. It has remained very stable.
The net debt to EBITDA ratio includes. Directors will propose to the annual general meeting an increase in the dividend of CHF 0.10 to CHF 3.80 per share. Dividend policy of BKW, which we also communicate following principle. Here, it's defined as net profit of the group minus the taxed performance of the STENFO for Mühleberg. For 2025, the value adjustment for Wilhelmshaven was excluded because it has no impact on cash. With the proposed dividend of CHF 3.80, the distribution ratio is at 45.2% with a dividend return of 2.3% based on the year-end share price of CHF 168.40. With this, I would like to conclude the financial part and pass the floor back to Robert Itschner for the outlook.
Expect an EBIT in the range of 600 to 700.
Still, these have been hedged at a higher level for 2026. We will have stable earnings in Power Grid and ongoing. We are still expecting a gratifying year for 2026.
Thank you so much, Robert and Mark, for your questions. I think we've already received a question in the live stream. Here is a question, and we also kindly ask you to state your name and your company. Sorry, please?
AVP with regard to infrastructure and buildings. In the past, there was an EBIT margin goal of 8%. Is that still upheld? Because you said it is, it was a transition year last year, and maybe it is still in a transition year this year with operating progress. That is the first question. Then basically, midterm goals. Any goals for EBIT for 2026? I think this has been revised already. A last question. You've also mentioned the shortage of skilled labor, that this is quite a challenge. Could you maybe go into this a little bit as well? It's also probably new talents talking about here. Yes, we uphold the 8%. We will move step by step in this direction with operating improvements mainly. That is the plan.
We said 2030, that is true, 8%.
If it is earlier, of course, that would be lovely. However, we have a very solid structure in I&B. We have done a great deal there, so therefore, we will come to these improvements. Now, when it comes to the shortage of skills, it has been mitigated a little bit over the past five months. But we are looking for specific expertise, very skilled labor, and of course, we also invest in internal trainings. We have a new training center, and we of course recruit from universities.
Next question. In 2026. That's of course. Of course, there is a range. To be clear, this is not a linear development up to 2030. However, there are no corrections for these figures with the goals for 2030. Have I answered your questions? I mean, 2026. No.
Actually, we do a guidance, and then we have the Kronos figures. That's the long-term ambition that we want to attain. Thank you.
Further question?
Yeah.
UBS. You have market. Now you need to more volatile question. The midterm, the price, what the prices are that you've already hedged. I also have a question of understanding, but I'll come later on with that. Very current environment that you're talking about here. Now, this is characterized by extremely difficult, very challenging environment really. There's so many events on a daily basis that we need to take into consideration. I would not like to give you any information about these developments because situation on a daily basis, and this happens very quickly. President Trump announces the developments to some. We have very solid models, and rely on about the hedged prices. Now, we are not really there yet. We will communicate a little bit later on.
This is also due to the fact that we have become a bit more cautious of how we want to do this, but this has not yet happened. Thank you. I have got a question with regard. There was a slide. What does that mean exactly? Whether it's not yet clear. Lagging a little bit behind your midterm plan. Can you improve this significantly going forward? Well, of course, we are observing and monitoring all kinds of opportunities, for example, in Italy. Or we have also developed projects that we acquire. They are a little bit higher in terms of price. But what we see currently is that in the pipeline, we also have the gigawatt and megawatt projects of course that we see irrespective of the structure of what we want to acquire.
Maybe about CapEx, w ild with CapEx, because we have a financial structure that we rely upon, so this has to be upheld. There are opportunities. If this is such an opportunity, is profitable, we might, you know, go forward with it. If this is tendering for our expectations, then we will withdraw. Take a question from the live stream from Alessandro Foletti from Octavian. 14% less terawatt-hours was produced, and he asks, this is probably in line with consumption because consumption is decreasing as well, not only in Switzerland, although it's a different story. Yes, please. We've explained before the fact that production had declined not because we didn't want to, but it was just hydro and wind levels that led to this fact.
If we cannot sell it to direct customers, then we will sell it on the free market, for example, on the exchange markets. That happens on the daily basis. In the short term, of course, this has an effect on, of course, our energy. Are there any further questions? Thank you for your presentation. I have two questions. The first is on the EBIT guidance of CHF 650 million-CHF 750 million. To what extent regular, like regulatory revenues, hedged portfolios? And the second question is on CapEx. Distribution, especially in Energy Solutions. Well, first of all, now the regulator, it's most of the time they are negative. They impact us. They adversely impact us.
We've got hedged prices on the one hand, and in 2026, it is for the first time, for the last time that we have a little plus of about 30. 2025, the hedged price was now it is 26-100 CHF, and in 2026, the hedged price will. For the ambition, Solutions 2030, what we said was that investment in Switzerland, so go to Switzerland, but the rest will go to Europe.
Thank you. Did we answer your question? On the left-hand side, Berner Kantonalbank. You mentioned challenging regulatory. Now on this new graph that you're processing. Then investment in gas-fired power plants, 2030, 450 explanation as to where you are. In hydro plus 150 megawatt. This is excluding partner plants such as, for example, KWO. Plus one other. The hydro projects that you originate. Did we answer that question? Regulation. Now different issues there. In Germany, for example, there is a debate on how to deal with the volume of connection requests for energy storage facilities. These are questions that the regulator has to answer as to how to proceed and what kind of rules apply when. We assume that the storage facilities that we the reduced fees, but that of course is one aspect in the EU of the.
Now, what does this mean and what the result of this discussion will be is something that we can hardly predict. There are different possibilities for that. Because they will have a two-in-one project and of course we are also talking. It is one of our partners where in Hamm in Germany we are going to take a share, a stake in this entity. There will be an auction on that volume. It holds all the specifications and everything. Soon, because actually this year, 2026, this is supposed to happen. The two gas power plants at this time. Now, investment in hydro, I'm wondering about the 150 MW. That's the pipeline I think you were talking about, right? In that slide. Yeah? Yeah, that's correct. For takeover plant.
5 MW, and they also have Trift and Grimsel reservoir enlargement. These are elements that are in the pipeline, but of course the payback will come later. The payback for our. You also wondered about. Let's take a look at the live stream. We have a question. Talked about battery storage. And it plans to build. Did I understand correctly that the investment decisions. Give us an explanation on what the current status is and how these projects are supposed to be developed. The locations and how they are, but we're still analyzing about zoning and what the municipalities think about those projects. This is still a planning phase. But as soon as we know that the construction of these storage facilities would be possible, then of course we will take a decision. Thank you, Robert.
Another question here in the room. Yes, here. I have a question for Coach, relates to Thomas. The electricity prices, the three-year. What I can see there is that over the last five days, for example, paid between EUR 6. So that was. Volumes are at their desks all day. The price at EUR 85 for the next three years. In the financial industry, we would know how to, how the traders are supposed to behave. Well, thank you very much for this advice. Now EUR 86 is a new price for me. I saw different prices yesterday and we discussed it, and it's absolutely true. Our traders are sitting there and they're taking care of hedging those volumes. Well, what we do is we do proxy hedges, so a little bit more. Are supposed to do to hedge those.
Well, of course this is the ambition. Work perfectly. But of course, we're making an effort and This is the case, and you know, the scenario is absolutely not clear yet. We don't know whether the conflict will last much longer, but yeah. Thank you very much. We have another question here on the right-hand side. This microphone is on its way. Thank you. Alexander B- On slide eight, the pipeline. On the right-hand side, I do assume that the figures 150, the number, 1,450, that's the Swiss it wouldn't. So you're planning battery storage, and on the right-hand side you have CHF 1 billion. You have to understand these figures.
We have specific projects that we're working on worth megawatts, and of those in the volume of 500 MW that we would build immediately, and then we will think about whether of the remaining 600 could be spent on other projects. Whether it is a good thing to have battery volume in that amount in the portfolio or not, it shows that the agreement with the partners that we illustrate this on the slide. Of those investment decisions planned for 2026, if all of them materialize, what is the CapEx? What is the number that you're expecting? Well, you can, and the investment decisions or to make a forecast, but you can assume this range. Then there's a bond that will expire this year. Yes, correct. Question from Mr. Manuela.
Good morning, everybody, Manuel Gsell i n basically all the three questions, the first one embedded in the guidance, considering that you released the guidance in mid-January. With a different, completely different. My question is not about volatility in 2026, is to what extent the mid-range or bottom range of the guidance includes probably, hopefully, the lower volatility than in 2025, you know. Depending on how long will last, in any case, you should have an. If you can still count on high output in 2025 for hydro in the guidance range still. The third question is on the hedging. We know that the hedging level price is compared with the previous slides, 80% hedging so far never disclosed before. Thank you.
Herzlichen Dank. Ich würde ganz kurz die Fragen auf Deutsch zusammenfassen.
Yes, I'm happy to take this question. Your first question, you're absolutely correct. At the moment, we are faced with higher volatilities. In the short term, also intraday, day ahead, the volatilities were pretty high. Contracts and trade is something I would caution you to phrase this information. It was 3.7 for transitions, as the 20-zone increase. The weather, of course, added about CHF 60. I'd like to go to outlook for infrastructure and buildings. Does this also include the special asset in Germany. Without this special effect or this special asset in Germany. The special asset in Germany would give us the opportunity to grow. Clearly in engineering, we have a very high order backlog, so we are not relying on this special asset to come.
Of course, it would be great for the years to come. Thank you very much for this answer. We have two questions in the live stream. We have one from Claire Aïcardi from Europ'Energies in English. On new acquisitions, what is your plan in France? Herzlichen Dank für die Präsentation. Können Sie einige Details zum internationalen Wachstum geben? Ms. Fetzer is summarizing the question in German. Well, our strong position in Switzerland has to be safeguarded. However, also in our core markets, a risk. We want to have a differentiated portfolio. This differentiated portfolio is across many countries without a special focus. However, we want to guarantee and make sure that we are in France. We are actually quite strongly positioned, for example, but also team. We certainly will grow in this respect.
That we also will improve the market access on the sales side. France is very interesting because the old market scheme, which was in the past regulated much more, which is of course an opportunity for us. Thank you very much. We have one last question in the live stream by Peter Gutley. He asked about the value adjustment of the coal-fired power plant in Wilhelmshaven. Do you want that? Have you benefited from this specific coal power plant in the year 2026 so far? Well, the value adjustment, of course, is not linked to our wish to withdraw from the coal production. Up to 2030, we want to withdraw from coal power plant and its productions. However, there is not a true market for stakes in coal power plants. We have to make sure.
Supplemented this year, which is basically good for us. We will see what the remainder of this year will bring. We expect decline quite significantly. It is that if there are crises, supply crises like this, that it is good to have such a power plant in operation. Thank you very much. This leads us to the end of this Q&A session. I would like to thank you very much for your interest and your questions, and thank you for the statements. Today's analyst and media conference. To draw your attention to the next dates in 2026, BKW will publish its half year results. The presentation of the half year results will no longer take place in a hybrid format, but it will be exclusively online.
Between the half-year and full-year results, BKW will therefore provide information on business performance up to the third quarter for the first time in 2026. This new nine-month business call, this update business call, will take place on Tuesday, November 10, 2026. I'd like to thank you. Refreshments that are available. To welcome you again to the August half-year results 2026. We wish you a wonderful spring and summer and see you then. Goodbye.