[Foreign language]
Good morning, ladies and gentlemen, to our presentation of our half-year results from Romande Energie Holding SA, Michele Pedemonte. I am François Felley. I am the new CEO of the group. I joined yesterday as CEO, which is why I won't be presenting these results myself, but I'll be delighted to do it for the full-year results. That's when I will be presenting results. I'm now going to hand over to Patrick Bertschy, who is our Group Director, and he's been serving as CEO since late last year, and also our CFO, Nicolas Conne. Thank you.
Thank you very much indeed, François. Now, if I have to summarize these results, I would like to say that our operating profitability is up and with sound basis. Now, as you can see on the screen, if I may use an image, you can see a brighter patch, and we are confident that we're going to attain our objectives which are on the horizon. We are convinced that our strategy is achievable, and we're going to embark on this strategy in the near future. To continue with the metaphor, we have prepared ourselves for more turbulent times. We have equipped ourselves for good weather, but also we've taken a hat and sunscreen. Up to now, Romande Energie has always adapted to this fluctuating environment. We've always adapted in a measured manner, and we will continue to do so in future. This presentation contains five points.
I will handle the first two items, and Nicolas Conne will handle the rest. Looking at the regulatory context, if you look factually at what came into force in 2025, it's not very different from what we had in 2024. But nevertheless, these factors are impacting us. As you can see in the decrease of the WACC, the political world is becoming more and more aware that the conditions for grid managers are becoming more and more difficult, and they are in the process of easing up the situation. In recent years, many measures were taken to promote solar energy, and the development of solar energy is going at a good pace, but the consequences for the grid are substantial, particularly in terms of the reinforcement of the grid.
So we are, of course, in favor of the energy transition, but we have to do it at a pace which is reasonable. Looking further ahead, therefore, to 2026, we have some legislative developments which are going to come into force. Some of them, we've been waiting for them for some time. First of all, the abandonment of the average price, but a good piece of news is the single price for the balancing power. We believe that the year 2026 will be slightly better than 2025 will have been. There's one factor which will protect small generators. The feed-in price is changing. The feed-in price next year is going to be calculated quarterly and will be based on the market price ex post. Small generators will be protected with a minimum price for the feed-in price next year.
We will also have the new Canton of Vaud Energy Act. The texts are more or less final now, and for an enterprise like ours, they will bring opportunities in terms of building renovations and in terms of thermal heating in a decarbonized basis, which is going to be important for Romande Energie. But looking further ahead and more broadly at the European level, as you will know, at the end of last year, Switzerland signed agreements with the European Union, a whole package of measures. These objectives concern supply security, stability of the Swiss transmission grid, and involvement in industry-wide decision-making. These bilateral agreements have been transposed into Swiss legislation. They were published on June the 13th, and we have until the end of October to issue our position on these texts, of which there are 900 pages. So that will be finished by the end of October.
In the second half of next year, the Parliament will debate these adjusted texts, and we hope that there will be a referendum by February the 28th, 2028. So by February 2028, and then they will come into force in 2029 or 2030. A lot of adjustments are being made to organization, and they are preparing us for this legislative development. What did Romande Energie achieve in the first half of this year? We have achieved quite a number of stages which punctuated this first part of the year. In April, we refocused on our core business. What does this mean? For a number of years, we were exploring new markets and new products and new target customers. And now that exploration phase is over, we are now consolidating.
That will give us a much clearer view of the strategy that we want to pursue and which market segment we want to target. François Felley, our new CEO, who took up his post yesterday, has just introduced himself, and we have strengthened the management committee with new competences and new faces, in particular, Michel Rizzo, who is a human resources expert and who has worked both in Switzerland and internationally for large companies and who has a genuine vision of the development of human resources, then Thibault Vetsch, who has been appointed head of energy recently, and he brings us a frame of mind and a culture which is far more performance-targeted and based more on key performance indicators, KPI, so these two people will be supplementing the management, and we will continue our path with them.
We've also set up a new organization, a reconfiguration since 1 July 2025. As we mentioned to you in April, we have put in place an efficiency plan which is starting to bear fruit. As regards our organization, we said that we were setting up a structure with four business units: energy, grids, markets, and property. They are supported by people and talent, digital and innovation, and finance and services. The newest one, property, groups together services activities and building energy renovation activities, our aim being to make Western Switzerland the first region of Switzerland which will be zero carbon. We have taken a controlling interest in Centrale Électrique de la Barre en France, and we've also achieved the first in Western Switzerland, an agri-photovoltaic system on fruit trees and R&D designing solutions for dealing with the sharp rise in solar power.
We are continuing to accompany our customers on the path to the energy transition, including SMEs. We have achieved the connection of the first photovoltaic installations with feed-in adjustments, and we have made investments to improve user experience, and we are improving customer portals. We are continuing our deployment of smart meters. By the end of this year, we should have achieved the Swiss Confederation's objective of 80% smart meters. We have broken ground at Puidoux substation, and at Échallens, construction work has been initiated. We also accompany our customers with property in order we do total evaluations of their carbon output, and their buildings are using recycled concrete, and this enables them to have neutral gases. Romande Energie Services is continuing its excellent order intake, and building renovations are continuing to experience strong demand.
In terms of digitalization, this is going to be one of the bases which will enable us to make our customer flow more fluid. We are introducing analytical algorithms and AI in many areas in order to make flows more fluid. I will now hand over to Nicolas Conne, who is going to talk to you about the more financial aspects.
Thank you, Patrick. Hello, everybody. You've noted that our half-year results show higher profitability after a tougher 2024, and that is thanks to our solid foundations. Our foundations are more solid, as Patrick said just now. These are results that are actually in line with forecasts. As you can see on the screen, all three business units contributed positively to EBITDA, and that is thanks to a series of measures we put into place. For example, mitigation in the energy area or efficiency drives. We'll talk about that. Regarding energy supply margin, it was stable. There were fluctuations and mixed fluctuations because our own generation was down, but we were able to offset by recovering losses from the prior year. The operating cash flow doubled to CHF 52 million. Of course, there was strict monitoring of our working capital requirement.
Our net profit was solid thanks to our better performance, and including ancillary contribution was there as well, but this was significantly lower this year, though this half-year. The efforts will continue, but there is a seasonal swing in the second half of the year for us, so we can only confirm our forecast that adjusted EBITDA and adjusted EBIT will be in line with 2024. That's all we can confirm. So let's look to the presentation using a bottom-up approach, starting with energy supply margin, which you can see, and that shows the stability between 2024 and the first six months of 2025. This is a performance factor. This has been very important to us in the past, this energy margin, so we need to explain that. So in the first green rectangle, CHF 7.8 million. This is in the tariffs we're set for 2025.
The energy component was down 13%, but when we set these tariffs, we were able to recover prior-year losses. That's why we expected a higher energy supply margin. This was beneficial, of course, but on the other hand, there was a negative effect, and that was the drop of our own production, less 65 GWh. This was because of the Forces Motrices Hongrin-Léman that our plant has been at a standstill, and that explains why there was this drop in our generation, and plus, weather conditions were not as good, and we had a very mild month of June and dry with low rainfall, and that dragged down our energy supply margin. This will be taken into account when we set future tariffs. In addition to this, then there is the balancing power cost, which dragged down the margin by more than CHF 1 million.
So it's always difficult because we're having to deal with higher solar output, and we have to manage that as best as we can. This massive amount of energy we're taking on, as Patrick said, measures have already been put into place. We talked about the overflow product, which converts electricity into thermal energy, but also it seems to take in measures to adjust to forecast in generation and tie it to demand so we can cushion the effects of that on the group margin. So margin was stable, so we cannot commit to the second half of the year because of the seasonal swings. The first half is stronger than the second half, usually. As we can see on the screen, each business unit has contributed positively to EBITDA. There was a significant contribution from energy solutions.
So in terms of revenue or EBIT, this is down, but the profitability is higher, and EBIT has actually had a fourfold increase. This doesn't come from energy margin, but this is from benefits from the feed-in remuneration at cost, which lifts the EBIT. Also, a better result, a strong result from the Forces Motrices Hongrin-Léman pumped storage plant, which helped as well, and also the impact, also a positive spread between the peak load and the base load, and a higher spread, but also we had additional remuneration from balancing as well. So that offset an expected drop from French assets because it was planned that one of the wind farms would not be in use, and also energy prices were expected to be lower as well in France. Of course, there was the weather factor.
So if these margins are higher, there was also a refocusing on core business, and also the efficiency drive, which helped, and also stronger efforts with regard to trade receivables, so to do something about the provision for trade receivables and make it lower. The second business unit is grids. This is the foundation of operating performance. So we can see a small 3% rise in EBITDA and stable EBIT at CHF 21 million. There was a regulatory effect. The drop of the WACC had a negative effect. We also note a lower contribution from a non-profit business. At the same time, the regulatory system was actually positive, the average price method, which actually fixes the losses, and that actually helped. In addition to that, was depreciation and amortization. This is a direct line with our strong CapEx in recent years. I'll get back to that later.
The third business unit is Romande Energie Services, which had a small drop in revenue, but last year we sold Effitec SA with effect with the 1st of July 2024. On a like-for-like, it was higher, and also we saw higher profitability from EBITDA and EBIT, so we're at 3% operating margin. This is a very competitive margin. Everything is very competitive, including energy retrofits. In the second theme, which has been driving results higher, the energy retrofits, and we can also measure the improved results, better results from the accounts on the Fribourg, and there's also been better efforts with trade receivables, and that's been more accurate monitoring. We have a very strong order book at CHF 60 million for that business unit. Looking at the group, operating revenue was down. This is because of energy solutions mainly.
We can perhaps talk about the lower energy, the 30% cut in energy tariffs, and what we note here is all of the profitability margins are higher. Gross margin is up 5%, EBITDA 9% up, and EBIT up 10%. That shows the solid foundations that we've created and also the mitigation and efficiency measures that we have put in place and which will continue over the next coming months and years. On the right-hand side of the screen, you can see the contribution from Alpiq, which on 28th of August published very sharply low results, but is still a strong contribution for a group because you can see associates still representing 24 million CHF. That's 50% of last year's contribution from the prior year period, but it enables us to have 40 million CHF net profit, which we can call solid.
Higher profitability can also be seen at EBITDA level, but we can also see the fact that our cash flow from operations has doubled and also from dividends that we received, lower tax take than expected, and also the work to improve our collection of trade receivables, which lowered the working capital requirement. Operating cash flow is essential for the group. That's what we qualified it as essential for our group when we presented results in April this year, and it's a main contribution to our CapEx policy. It's showing our CapEx policy. So CapEx is higher compared to the earlier period. Normally, we have invested into energy, power generation, and grids, and these were quite stable. In grids, we reinforced low voltage and medium voltage.
We're still rolling out smart meters, and we expect to meet the target two years ahead of time by the end of the year. Also in energy, we have a positive effect due to high investments in district heating, but all other effects, which didn't happen. Also, for example, the commissioning of hydro and wind power plants last year, that hasn't happened this year. But we've gained 14 million megawatts have been installed. And I mentioned it usually. Our standard is 60. There's been scope effects as well, which is buying out the minority interests. One is Romande Energie Services, which has gone from 80%-100%, and Société de la Centrale Électrique de la Barre is at 30 gigawatt-hours per year, and we've gone from 60%-100% buying out the minority.
So we now have full control, and having full control means that we can tap the profitability in future years. And also, we acquired in the grids business. We bought SwissELIX, which specializes in overhead lines and supports our grid teams who are already on the ground, and also enables us to keep the skill in the French-speaking region, the skills in Switzerland. I've talked about cash flow from operations, the CapEx. On the other side is debt. Debt is part of the story as well. The net debt is CHF 205 million. I think we're fully in control of debt, helped by, supported by the group bond, which is now fully allotted, and the green loan is 50% allotted, and this helps avoiding emissions, which increased threefold between 2024 and 2025. So these different indicators show the healthy structure of the group with a debt-to-equity of 76%.
Let's wrap up. What we can say is that Romande Energie is in a new dynamic. It's in consolidating, refocusing core business in a regulatory environment, which is changing all the time. I think we need to take decisions. We have shown that we can adapt to new things like the new electricity act, but we can also get ahead of events, as Patrick showed just now, concerning, for example, if the EU electricity deal is accepted by referendum. We are getting ahead of it. We're acting as well as a group level with mitigation and efficiency measures, and also we are saving money. The efficiency measures that we announced in April set targets. We want to have an extra CHF 10 million in EBIT level in 2026 from these measures.
And at the same time, as was presented, the group has more solid bases concerning our new organization, which we can figure out at the 1 July this year, and also François Felley as new CEO that strengthens things as well, and other executives. I said it as I introduced the financial chapter. Profitability is up, and efforts will continue, and we can confirm that we believe we have stable full-year earnings related to 2024 with regard to adjusted EBITDA and adjusted EBIT. This is due to seasonal downswing in the second half of the year. And also, Alpiq also announced on the 22 August last year that one of their plants, which is offline, will stay offline until February next year. This will hit Alpiq at the revenue line.
They think it's going to drop, it's going to cut Alpiq's revenues by between CHF 140 million and CHF 160 million Alpiq level, and it will have an impact on us, which we can't quantify right now. Romande Energie is confident that it can regain a performance in line with its objectives through two indicators that we presented April last year through EBITDA and cash flow. So now we're ending our presentation. You can now see the upcoming investor dates for 2026, and Patrick and myself are here now to answer questions. François Felley just joined us, and he will answer your questions at the next presentation, not now. So it'll be Patrick and me.