Ladies and gentlemen, welcome to the conference call on the quarters 1 to 3, 2025, results of VERBUND AG. I am Sandra, the Chorus Call operator. I would like to remind you that all participants have been listened to on remote, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Peter Kollmann. Please go ahead, sir.
Good morning, ladies and gentlemen. I'm here with Andreas Wollein. Welcome to the presentation of VERBUND for the first three quarters, 2025. Thank you for joining today's conference call. Let me start by saying that the challenges we faced in the first three quarters of 2025 were both on the macro side. We saw ongoing geopolitical uncertainties, risks related to the consequences of the tariff policies triggered by the U.S. government, and, of course, the potential impact on the European economy. On the operating side, we were confronted with a volatile electricity pricing environment, very low hydropower production, and regulatory uncertainties with regard to the Austrian profit tax system, extended until 2030. In these volatile markets, VERBUND presents declining but, I think, still solid results for the first three quarters of 2025. Let me highlight the most important influencing factors for the results development.
The hydro coefficient determining the generation from our run-of-river hydropower plants was significantly lower compared to last year and also well below the long-term average. At a historic low level of 0.79, it was 21 percentage points below the long-term average and 28 percentage points below the first three quarters of last year. The reason for the decline was a very low snow level in winter and, as a consequence, a low hydro availability in the melting season. Furthermore, low precipitation levels during summer and fall. In addition, the average achieved contract price in the first three quarters decreased slightly by EUR 0.3- EUR 113.5 per MWh compared to the first three quarters of 2024. Luckily, we had some offsetting factors, and we were able to partially compensate the reduction in results. First. We had a higher result contribution from our high-voltage grid.
Second, we had a better income from flexibility products, especially resulting from intraday trading, as well as the optimization of the use of our storage power plants. Third, earnings from the sales segment improved strongly. To finalize the list of influencing factors, let me add another two, having a negative effect. First, the lower generation levels from wind and PV, and second, the negative impact from the extension of the Austrian profit tax system. Now, let me go into more details with regard to these main influencing factors. Let me start with the hedging volumes. I'm on the next page now, and the hedging prices. These are highly relevant for VERBUND results. As you know, a one EUR± higher average achieved price has a sensitivity of approximately EUR 25 million on our EBITDA line.
As I highlighted before, we have achieved an average contract price for the first three quarters of 2025 of EUR 113.5 compared to EUR 113.8 for the first three quarters of 2024. For the full year 2025, we have sold 95% of our own generation volumes as of the 30th of September at a price of EUR 115.7. For 2026, we have sold 57% of the generation volumes at a price of EUR 81.5. For 2027, we have now sold approximately 7% at a price of EUR 81.8 per megawatt hour. On a mark-to-market basis, with prices as of the 15th of October, the average achieved contract price for 2025 is EUR 115. For 2026, it is EUR 85.7. For 2027, it is exactly EUR 87. On the next page, a rather disappointing topic. The levy on excess profits in Austria. The final impact for 2025.
Depends on the average contract price on a monthly basis, the relevant generation volumes to be taxed, and, of course, the deductible renewable CapEx. The cornerstones of the tax are. The tax has started on the 1st of April 2025. It is divided into yearly periods lasting until the 31st of March 2030 for the time being. The revenues are capped at EUR 90 per MWh for existing installations and at EUR 100 for new installations, which were commissioned after the 1st of April 2025. There are exemptions for, example, pump storage, controlled power, and congestion management. The exemptions are basically everything that is needed for the safety of the energy system. 95% of the surplus revenues will be taxed. It is possible to offset investments amounting to 75% of eligible investments. Please note that the respective invest regulation.
With all the details, is still not published yet, meaning that there are certain legal uncertainties. The levy in the first three quarters of 2025 amounted to EUR 112 million in Austria, EUR 5.9 million in Spain, and EUR 1.3 million in Romania. On an EBITDA level. For the full year 2025, we currently expect an impact between EUR 75 million and EUR 125 million on the group profit. This is, of course, higher than the EUR 50 million-EUR 100 million communicated during the half-year conference call. Because at the time, we expected a different offsetting amount of investments. Those offsetting amounts are now worse than we had expected. As a result of that, the impact on the profit is higher. Next page on the flexibility products. In the first three quarters of 2025, flexibility products amounted to approximately EUR 234 million. That is more than the EUR 220 million last year. For the full year 2025.
We expect now approximately EUR 300 million. That is higher than what I had originally guided for. The old number was EUR 280 million. We saw a positive development, particularly in the pumping, reserve operations, and in intraday trading. This is demonstrating that the price volatility and the price spreads are increasing because of the massive build-out of intermittent renewables generation, clearly underpinning our strategy to build more flexible generation. Next page on the hydro segment. At 0.79, the hydro coefficient, you all know that is an index quantifying the hydropower generation of the run-of-river power plants, was 21 percentage points below the long-term average and 28 percentage points below the level of the first three quarters of 2024. The production from our annual storage power plants decreased by 4%. Own production from hydropower, therefore, overall decreased by 6 TWh or 23.1% to 20 TWh compared to the first three quarters of 2024.
In addition to the decreased volumes, we also had slightly lower average achieved contract prices. However, very strong contributions from flexibility products. Therefore, the EBITDA in the hydro segment decreased by 30% to EUR 1.585 billion. Now, regarding CapEx, the 14 MW Stegenwald run-of-river hydropower plant went into operation in the third quarter. The 480 MW Limberg 3 pumped storage power plant was opened in September 2025, and the commissioning is still ongoing. The new renewable segment, there, the coefficient, similar to the hydro coefficient—it is an index quantifying the generation from wind power and PV—was also significantly below the average and below the 2024 level. It amounted to 0.81 in the first three quarters compared to 0.92 in the first three quarters of 2024. The generation from wind power decreased by almost 10% or 128 GWh and amounted to 1,195 GWh in the first.
Three quarters of 2025. Less favorable wind conditions in all countries were the reason for this development. In Spain, the decline was offset by the commissioning of a new wind farm. Generation from PV fell slightly by approximately 1 GWh- 357 GWh , despite new installations. Now, taking a look at the EBITDA development in the new renewable segment, we see a more or less unchanged situation with a small decline of 0.5% to an EBITDA amounting to EUR 123 million. VERBUND operates currently 1.2 GW of new renewables in Spain, Austria, Germany, Romania, and a small amount in Italy. Activities in the target markets continued, as described on the chart under current information. With that, I will hand over to Andreas. Please, Andreas.
Yes. Thank you, Peter. Let me continue with the sales segment. Quick remark. If we look at the EBITDA development in the sales segment, we see that EBITDA has strongly increased to EUR 114.2 million because we were able to improve the earnings development in the end customer business. The EBITDA in the retail business improved from minus EUR 76 million in the first three quarters of 2024 to a level of minus EUR 2 million in 2025. The improvement in the end customer business is basically a result of the implementation of several measures to increase profitability, like an optimized electricity procurement strategy and cost-cutting measures. The EBITDA in the trading business improved from EUR 75 million to EUR 116 million. The improvement is primarily attributable to the absence of negative valuation effects from the previous year. Our trading subsidiary is very focused on implementing storage capacities, primarily in Germany and Austria, in order to benefit from the increasingly volatile pricing environment.
Currently, we have approximately 110 MW of battery storage in operation, four large-scale battery storage projects, with approximately 200 MW in total in the implementation phase, and more than 300 MW of projects in development. Moving on to the grid segment. Yeah, the EBITDA in the grid segment. From the electricity grid in the first three quarters of 2025 was approximately EUR 256 million, an increase of approximately EUR 17 million. This increase is mainly due to the higher contributions from auctions. Let me add, however, that this additional income is only temporary because we are only allowed to earn RUP multiplied with WEC. As a consequence, based on the regulatory system, we have to give the surplus back with a time delay. However, we have raised the EBITDA guidance for the electricity grid for this year by EUR 40 million to a level of approximately EUR 370 million.
The planned amount of the regulatory account, reflecting the surplus profits of the past at the end of 2025, will be approximately EUR 640 million. With regard to the results contribution of Gas Connect Austria, we report an EBITDA of around EUR 49 million for the first three quarters. The EBITDA guidance for 2025 is unchanged at approximately EUR 50 million under IFRS. Regarding CapEx, 2025 will be marked by the implementation of the National Grid Development Plan, which foresees CapEx of approximately EUR 9 billion within the next 10 years. In 2025, Austrian Power Grid plans to invest approximately EUR 550 million, which increases the regulatory asset base, the basis for the return calculation. Moving on to the last segment, so all other segments. The generation from thermal power plants was up by 532 GWh , which was driven by a higher market-driven production.
At the end of the third quarter of 2025, the results of the tender for the grid reserve were available. The Melk District Heating Power Plant was contracted for the period from 1st of October 2025- 30th September 2026. Line 10 of the CCGT Mellach was contracted for the period from 1st of April 2026 to 30th of September 2026 by Austrian Power Grid to avoid grid bottlenecks. With regard to the EBITDA development, I would like to mention positive effects from the valuation of energy derivatives and slightly higher contributions from flexibility products. The contribution from KELAG, the provincial utility of Carinthia, decreased from EUR 80 million to EUR 68 million. The decline compared to the previous year is mainly due to lower wholesale prices and worse weather conditions. Moving on to the next two slides. We present the development of our key financial figures. On slide 11.
Yeah, you see that because of the aforementioned developments, EBITDA decreased by 19.6% to EUR 2.111 billion. Depreciation increased by 6% to EUR 452 million due to the increased investment volume of Austrian Power Grid and in the hydro segment. The financial result improved from EUR 46 million to EUR 56 million. Taxes on income decreased by EUR 145 million to EUR 335 million in the first three quarters of 2025. Income taxes include a positive one-off effect of EUR 46 million. This effect results from the remeasurement of deferred taxes following the investment action program approved by the German Bundesrat. The group result, therefore, decreased by 12% to EUR 1.212 billion. The adjusted group result decreased by 22% to EUR 1.156 billion.
Finally, I would like to mention the slight increase in additions to tangible assets in total from EUR 720 million to EUR 719.7 million in the first three quarters of 2024 to EUR 720 million in 2025. Major investments mainly related to the hydropower plant Limberg 3 and various electricity grid investments. Yeah, on slide 12, we show the development of the operating cash flow in the first three quarters. The operating cash flow decreased to EUR 1.654 billion, mainly due to lower contribution margins from the hydropower segment. As a result of significantly lower hydro availability and the change in margin in payments for hedging transactions, which were deposited as collateral for open position with the exchange clearinghouse. The free cash flow after dividends showed a negative development from -EUR 392 million in the first three quarters of 2024 to a level of -EUR 574 million. The lower operating cash flow and higher investments in property, plant, and equipment, as well as lower dividend payments, were the reasons for this development.
Net debt increased from EUR 1.976 billion at the end of 2024 to EUR 2.477 billion at the end of the first three quarters of 2025 due to the negative free cash flow. Gearing correspondingly increased to a level of 22.4% compared to 17.9% at the year end of 2024. Yeah, now let me hand over again to Peter to present the outlook for 2025.
Thank you, Andreas. Yeah, before we come to the Q&A. The outlook, as always, at this point, we highlight sensitivities. As of the 30th of September, a deviation of ± 1% in the generation from hydropower has an impact of ±EUR 3.7 million for our year-end results. A deviation of ± 1% in the generation from wind and PV has a small impact of EUR 0.5 million, and a deviation of + EUR 1 in the wholesale price has an impact of EUR 0.8 million in the group result for 2025.
Our updated guidance for 2025 is as follows. We expect the reported and adjusted EBITDA of approximately between EUR 2.75 billion and EUR 2.9 billion, and the reported group result of approximately between EUR 1.5 billion and EUR 1.6 billion, under the assumption of average hydro, wind, and PV generation for the fourth quarter of 2025, as well as the actual chances and risk situation of the group. The earnings forecast is contingent upon the group not being impacted by any further legal or regulatory changes. For the financial year 2025, we are planning to pay out between 45% and 55% of the group results after adjustment for non-recurring effects of approximately between EUR 1.45 billion and EUR 1.55 billion. With that, I invite you for your questions. I am looking forward to our discussion.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to disable the loudspeaker mode while asking a question. Anyone with a question may press star and one at this time. The first question comes from Wanda Serwinowska from UBS. Please go ahead.
Hi, good morning, Peter and Andreas. Three questions from me, if you do not mind. The first one is on your 2027 hedging. 2027 hedging is very low. It is something around 7%. Historically, you were more above 25%. What prevents you from locking more of the 2027 forward curve? The second question is on the windfall profit tax. Peter, you mentioned the new guidance is between EUR 75-EUR 125 on the net income level. Should we expect the similar number from 2026 onwards? Is it as simple as just adding the tax back to get to the EBITDA level? Did you include a higher forward curve that we have seen recently in your updated guidance for the windfall profit tax? The last one, I promise, as always, if you could give us the latest hedging without mark-to-market and the hydro levels year to date, that would be appreciated. Thank you.
Yeah, sure. I will start with the latest hedging levels and prices. For today, we have hedged 96% for 2025 at a price of EUR 114. For 2026, we have hedged 56% at a price of EUR 88. For 2027, exactly the same price, EUR 88, and we have hedged there 8%. I will already here mention. Why 8%? That is a result of the way we look at the forward curve. We do not really change our hedging strategy, but within our hedging strategy, we obviously have a bandwidth. The result of that bandwidth, our traders have decided to hedge for 2027 around 8% and not 6% and not 10%. On the tax, yeah. That was a situation where I want to take a step back. When we started to give the guidance of between EUR 50 million and EUR 100 million, as you can imagine, we had a long internal discussion around this guidance, and we had to make assumptions. Our assumption at the time was that we would be able, given our experience of the last few years, that we would be able to offset investments against the actual number.
As a result of that, making an assumption on the offsetting mechanism, we have basically come up with the EUR 50 million-EUR 100 million guidance. In our last conference call, I have already mentioned that we are moving towards the higher end. We had no specific information, but we got the tonality and the atmosphere of the conversations with the Ministry of Finance. We realized that it would take a more conservative view on the offsetting mechanism, i.e., a stricter interpretation of the offsetting, different from the way it was before. Now, we have basically seen that we will have probably very, very low offsetting, i.e., only areas of system stability and some very specific Austrian investments. Those very specific Austrian investments are lower. As a result of that, we have come up with a range of EUR 75 million-EUR 125 million.
We have increased the range by EUR 25 million. You have seen the number which we have reserved for the provision. That is EUR 112 million for the first three quarters. When you look at the final number, it could well be around EUR 125 million, maybe EUR 130 million. Yeah? It is more than we had originally expected. That would be the impact on the net income. You asked, "Okay, now this is the situation for 2025. What do we have to think about the ongoing years?" That question is absolutely justified. I totally understand it. I will give you exactly the kind of information which we have ourselves. At the moment, we assume that the levy will not go down. As a result of that, we have decided that we are going to use for our own planning, for our budgeting.
A number of somewhere between EUR 120 million and EUR 130 million. For the next years. If the Ministry of Finance comes up with a new methodology, there could be upside. At the moment, if we take all the information which we have, we think it would not be appropriate to come up with a lower number. As a result of that, you have to basically take into consideration that we're going to have this kind of levy until 2030.
Thank you, Peter. And the hydro, year to date?
Yes, the hydro. On the hydro, we are currently at EUR 0.79. If we basically take the average for the rest of the year, we would be somewhere between EUIR 0.82 and EUR 0.83 for the full year.
Thank you very much.
You're welcome.
The next question comes from Julius Nicholson from Bank of America. Please go ahead.
Great. Thank you. And hello from me. Two questions from me. The first one on the flexibility product. I think at the last call, you said that in the next few years, the EUR 280 million would be a good level going forward. Now you updated it to EUR 300 million. I just wanted to check if for the next years, we should still be at EUR 280 million or if you see more opportunity going forward. One on the regulatory account. I think you already mentioned that this will be reduced in the next years. Could you give us any sense already where the discussions are on what kind of impact that could be for the next year? That would be really helpful. Thank you.
Yeah, yeah. Both areas are very important and, quite frankly, not easy to answer. On the flexibility products, yes, we have increased our guidance. Basically, as a result of. Pumping and turbining. Which has been better. The reason is basically we still have a relatively high level of electricity prices. At the same time, a lot of intermittent production. The result is a very high spread, and there we can fully profit from that. To anticipate what a normalized pricing level could be on prices and what a normalized spread could be, and how the volatility is going to develop over the next few years. That is a discussion we've had many times. It's a difficult one. I would definitely not go above the EUR 280. I would rather see the EUR 280 almost as a maximum because we think that we will probably have some sort of normalization over the next few years. That is certainly something we're going to discuss today in terms of gas price development, CO2 prices, etc., etc.
The flexibility products are certainly a very, very important cornerstone of both our production technology, but also our ability to provide different types of flexibility products in a highly volatile market. Okay. Now, the next one on the regulatory account. The regulatory account, as you know, has gone up over the last few years steadily, despite the fact that we had conversations with the regulator about decreasing the regulatory account. The one area which I have mentioned last time, and I want to mention it again, is what we call the special account. The special account is around EUR 380 million. That special account is provided for by Austrian Power Grid. It is a technical factor. It has something to do with changes in the accounting of balancing energy. When the regulation is completed on balancing energy, there might be an impact of that specific amount.
Which will not have any impact on the P&L. I'm just mentioning it for completeness purposes because I already talked about it in our last conference call three months ago. The regulatory account, however, is much, much more important for you. Because changes in the regulatory account in the IFRS have a direct impact on our profits. Whenever we reduce the regulatory account, that goes one-to-one into our IFRS results. What we are currently planning, and please be aware that that can change because there are a number of factors completely outside our influence. For example, auction results. Auction results are extremely difficult to predict. Auction results go directly into the regulatory account. Even if we reduce the regulatory account by a large number, we could, at the same time, have auction results that are higher than we expected, and the regulatory account would go up.
I know it sounds complex. It is relatively complex. For the time being, the number I would like to give you would be around EUR 60 million reduction between 2025 and 2026. We think that we are going to have a regulatory account by the end of the year of around EUR 640 million. We are currently anticipating and budgeting that the regulatory account will go down to EUR 580 million, so a delta of EUR 60 million. As a result of that, the results contribution of Austrian Power Grid will come down next year. Next year, you can probably assume that it is going to decrease by the number EUR 60 million which I have just given you. That is the very detailed response to your two questions.
Great. Very clear. Thank you.
The next question comes from Louis Boujard from ODDO BHF. Please go ahead.
Yes. Hi. Good morning. Maybe a question regarding the flexibility and your investment plan going forward. I think that you are going to commission Limberg 3 in the relatively short term. Could you elaborate if you have, at this point in time, already cashed in some potential returns from this investment, or is it going to come in the next few quarters? If yes, what could be the magnitude that could be expected here? Maybe more broadly also, regarding these investments, notably in battery storage and additional flexibility. Do you think that going forward, it makes more sense to keep on investing in renewables, in new renewables, or do you plan eventually to increase a little bit the share of battery and flexible assets considering the current market situation and the expectations that you may have regarding the flexibility and the volatility of the power markets? That would be the first question.
The second one, much faster, regarding notably the tax situation. If you could elaborate, I think that you mentioned that there are some legal uncertainties regarding the Austrian situation. If you could give a little bit more details on what uncertainties it is, and also what would be the implication and what could be expected regarding the levy in Spain and Romania? Is it expected to remain that way, or do you see eventually some potential capacity to remove this levy going forward? Thank you very much.
Yeah. Andreas will cover Spain and Romania. In the meantime, I will talk about the legal uncertainty. I obviously know that you guys hate uncertainty. By the way, we do as well. The uncertainty is that power prices are coming down. As a result of that, the cap would be an empty threshold. It would not lead to the number the Ministry of Finance is looking for. As a result of that, we think that there will be other ways. They are going to tax us, other methodologies. We do not exactly know what those are, but I am pretty sure that they will amount to something that is similar to the number which we are going to have for 2025. The number which I have mentioned is anything between EUR 120-EUR 130 going forward. That would be a fair assumption.
Look, we do everything we can to get this number lower. We are negotiating. We are doing everything to create understanding that an uncertainty for five years is something that is obviously bad in the capital markets because capital markets rather know a very specific number, rather have a situation for one year. They know exactly what to calculate with, and then going forward, you know exactly.
What the numbers will be. In that case, we have it for the next five years, and we're going to have a different kind of methodology. This is all we can say currently. Before I go into the flexibility products, Andreas is going to mention
With regard to Spain, Louis, as you know, they have this revenue-dependent energy tax of 7%. Yeah. We currently do not have any indication why this tax should be canceled. For the time being, we assume it will further be applied. In Romania, we have a relatively comparable system with Austria. They have implemented a cap system of EUR 80 per MWh . This tax is applied until the middle of 2025, and it will not be extended. There is no further tax or, let's say, windfall tax in Romania now expected. 2025 is the last year.
Thank you, Andreas. Yeah. Now on the flexibility products. Look. When we decide on our capital allocation, obviously, we try to first invest, i.e., put our priority on developments which we think have a high probability of profitability. With the Limberg 3, the actual anticipated results will be higher than we had originally thought when we made the investment decision. As a result of higher spreads, more volatility than we had originally anticipated. We do not give specific numbers on hydropower stations. We only give sort of like the sum of our storage and of our run-of-river hydropower plants, but not specifically plant by plant. The contribution of Limberg 3 is going to be very good. Limberg 3, with the newest technology that is being used on pumping and turbining, also has, among all our hydropower stations, the highest efficiency.
The next question which follows logically from your first one is, if that is a good investment, why do not you do more of a good thing? The building of pump storage in the Austrian Alps requires a very, very long and very complex approval process. It is not at all straightforward. It takes a long time, and it is very cumbersome. Limberg 3, we had already started a very long time with the planning. Believe us, we are planning a number of other things, but we cannot say, will it come through in four years, in seven years, in ten years. That is something we are constantly working on because we think that pump storage flexibility products, particularly close to Austria, is a very, very important factor, is a cornerstone in our production, but also in our flexibility.
In terms of batteries, yes, battery is flexibility in storage as well. However, it is obviously completely different from our pumped storage. It is totally different from Limberg. Limberg gives us the—first of all, it gives us scale. It is huge. Not comparable to batteries, which is relatively small scale. At the same time, we even have the ability for seasonal storage. We have the entire bandwidth of creating immediate flexibility products, and at the same time, we can also do seasonal storage. Those facilities give us an amazing bandwidth, which no other technology today can master. We are looking at batteries, of course. We think that we understand storage quite well. We invest into batteries. The battery investment, for example, we do in Germany, are basically taking advantage of intraday volatility.
The other type of batteries we're looking at, like everybody else, is how can we improve solar revenues by combining solar with batteries. Wind with batteries as well to a certain extent, but mainly solar with batteries. There we're looking particularly at Spain. There will be a subsidy, an auction in Spain for battery storage next year. That is something that could be interesting in combination with existing solar plants.
Okay. Thank you very much.
As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Olly Jeffery from Deutsche Bank. Please go ahead.
Thanks. The first one, just on flex products, given that you're going to EUR 300 million for this year, why do you now see EUR 280 million as the ceiling going forward? The next question is on just thinking about. Q4 and next year with APG. For Q4, the hydro coefficient on October looks weak and potentially could be weak going forward. There is obviously the potential to see upside in APG beyond where you've guided to. When thinking about that, the last auction you had, for example, was that above where you planned and therefore was a positive effect on the regulatory account? Is there any reason fundamentally, when you have future auctions, why that should be in line with what you've budgeted for the regulatory account? Or is there a good reason to think that should be higher and therefore the regulatory account could continue to be higher as a result?
Yeah. If I knew, I wouldn't be working for Foggland. I would have a nice house and a nice car, and a lot of other things. I totally understand why you are asking, and I would probably ask exactly the same question. However, I really do not know. We have experts in Austrian Power Grid, and they look at auctions and they look at all the numbers and all the parameters. It is really complex technically. It has a lot to do with European production. It has a lot to do with net transfer capacity, with the congestions, with the price zones. It is really hard to say. I am not trying to avoid the question because I think it is an interesting one, but it is really hard to say. Could it be higher next year? Yes, but we have already anticipated higher auction results for next year. We have already taken the experience of the last two years with auction prices higher than we thought, and we have basically projected that into 2026.
As a result of that, I do not think that there is a lot of upside in there. So the number which I have given is the best number I can give you today, and that is the number I am using in my budgeting as well. There was an Austrian Power Grid on the flexibility. Look, everybody is going to write down max 280, and then I am going to give you the guidance for the full year in March next year. That number is going to be different, and then you will say, "Yeah, Peter, why did you not tell us?" Look, we had the highest. When I look at the last 10 years, in pumping and turbining, we have had the highest number. Yeah? I mean, you might remember because you have looked at that for a long time.
Some of you have looked at that stuff for a very long time. In pumping and turbining, in the year 2020, we hit a number that was below EUR 20 million. Yeah? We have gone up. In 2022, we had EUR 130 million. In 2023, we had EUR 140 million, and now we have EUR 155 million. That is a tremendous development. You could obviously say it is almost like a hockey stick. It is going to go up further. What are the key influencing factors on that number? It is going to be how many hours we can pump at very low prices, how many hours we can sell at very high prices, how well we can optimize, i.e., we need to anticipate when to pump and when to sell. This is not something where we look at it and we say, it is great now.
Next 15 minutes, and we're going to sell. It's a day-ahead market, so we need to look at what we think the number is going to be and then calculate the volume and try to optimize. As a result of that, there is a lot of uncertainty. Of course, when we look at the flexibility products, we look at congestion management as well. Congestion management has come down, for example. That was unexpected. Then we have control energy, and all that— influencing factors which are very, very hard to judge. That is why I've basically said, "Look, we have a very high number in flexibility products. EUR 300 million is the highest number we've ever had." As a result of that, I felt more comfortable to basically give you the EUR 280 million rather as a cap and not a number which we.
Expect going forward, almost like as a constant.
That makes sense. If I could just follow up on APG, the EUR 60 million figure that you mentioned is how far you plan for how much the regulatory account will be reduced in 2026. Could that figure end up being higher if the regulator were to intervene, or should we see it as that's as large as it's going to be, and that's fixed for 2026? I'm just trying to yeah. Can you?
Yeah. Yeah. No, I think. Taking a step back. The regulator has changed his attitude towards the decrease of the regulatory account, i.e. both the Minister for Energy and the regulator have finally, because that's something we have said for many, many years, finally decided that reducing the regulatory account would be a good thing because it is a way to reduce the tariffs as well.
The big discussion all over Europe is that there are huge investments that have to go into infrastructure for various reasons. In Austria, the 10-year number is what you know is EUR 9 billion. Obviously, if you invest EUR 9 billion, you have a sharp increase in the regulatory asset base. In the case of Austrian Power Grid in 2030, we are going to have a regulatory asset base of around EUR 6.5 billion, which basically means that there is a tremendous implied growth in the regulatory business. That also means that all these investments are going to lead to higher tariffs. As we have an overall electricity price discussion, when you look at what Germany wants to introduce, like the industrial price of around EUR 50 per MWh that is going to be covered by the budget. Germany can afford it.
At the same time, it also means that it is a strain for the system. On top, infrastructure and tariffs have a big effect as well. When you take the average consumer in Germany and in Austria, around 30%-35% in your electricity bill is basically coming from the grid, from the distribution grid and from the transmission grid. As a result of that, the decrease of the regulatory account gives a little bit of a compensation for the tariff increases. As a result of that, we think that over the next few years, there will be a will by the government, but also by the regulator, to decrease the regulatory account. To be precise, at the same time, there could be, and you're right, when you have very good auction results.
When you have less expenses for control energy, for example, and other factors, the regulatory account could go up. When you then reduce the regulatory account, the net figure would be less than the actual reduction. The actual reduction for 2026 is higher than the EUR 60 million which I've given you because the EUR 60 million is a net figure that basically takes into consideration how the regulatory account goes up and how much we're going to reduce it. The EUR 60 million is the net figure. I know it sounds complicated, and I would hate to listen to myself. I can't change it. That's the way it is, unfortunately.
Okay. All right. Thank you very much.
The next question comes from Thibault Dujardin from Bernstein Société Générale . Please go ahead.
Good morning. Thank you very much for taking my question.
My first question would be regarding the supply activity, if you could share some guidance for this year and the coming years. My second question would be going back on grid and the investment, the EUR 9 billion investment, if you could share more details maybe on the timeline of investment, when will be the main part of the investment. Thank you very much.
Okay. If I understood you correctly on the supply, you're talking about the retail or sales business or sales segment? Probably, right?
Yes. Yes. Yes. Guidance.
Yes. Okay. Andreas will give you sort of an update on the sales segment. In the meantime, the EUR 9 billion investment over the next 10 years is going to be, the heavy load of the CapEx will be towards the last four to five years because we obviously have to run approvals and permits, etc., etc. As a result of that, the heavy CapEx will be rather towards the end of the 10 years. Andreas?
Yeah. Yeah. With regard to sales segment, as we highlighted this year, we have this increase which can be mainly explained by the fact that we have eliminated the losses of last year in the retail business. Retail is currently expected to be more or less at 0 EBITDA level after the big loss last year. We also expect for the coming years in retail and EBITDA a slight improvement, but nothing spectacular. We will be between, let's say, EUR 0-EUR 10 million of EBITDA. With regard to the trading part of the sales segment, this year we expect around EUR 150 million in total of EBITDA contribution. Going forward, as, let's say, the build-out of the battery business, improving or complementing our trading business.
Is part of the trading business, we expect a constant increase of the results development in line with the build-out of the batteries. A steady increase. For the next years, I would say between EUR 150 million and EUR 200 million of EBITDA development.
Thank you very much.
Okay. I think we are coming towards the end. Maybe one final question if there is one.
Yes. We have a question from Piotr from Citi. Please go ahead.
Okay.
Hi. Good afternoon. It's Piotr. I have two and a half questions going this way. On the flex channel, can you say, because you said, "Okay, how much you made a couple of years ago, how much you might make now," but how much the asset has actually increased utilization, how much you were rotating power in gigawatt hours or kind of a couple of years ago versus now? Just thinking about it, should we think about this as an exposure to a spread and therefore the exposure to a gas price to some extent? Within the flex channel, is it purely on the spread, or is there also kind of a fixed component on the auxiliary services, services to the TSO, and so on? These were the two questions. The half question was a little bit more technical. On the regulatory account, to what extent, where goes the interest on this amount? You are liable the money to the TSO, but the money sits on your account. It is completely put aside, and then you will have to do it accruing with the interest on it, or how does it work? Thank you.
Okay. We are going to share that. Andreas, would you like to. Cover the regulatory account because I have already spoken so much about the regulatory account? I will do the flexibility products? Yeah? Okay. Andreas is going to talk about the regulatory account, and I am going to give you the answer. I will try to give you the answer on the flexibility products. Andreas?
Yeah. As far as I understood, Piotr wanted to know if there is some kind of interest on the regulatory account, which is not, of course. It is basically an account which acts basically as a financing, so interest-free financing internally. Based on the fact that we have currently this EUR 640 million, we can assume here avoided interest of, let's say, between EUR 20 million and EUR 30 million per year. As I said, there is no interest on that. Does this answer your question?
Yes. Exactly. Thank you.
Okay. Okay. Okay.
Thank you, Andreas. Yeah. On the flexibility products. Look. Let me take a step back. First of all. Everybody might have a slightly different definition of flexibility products. In our case, flexibility products are control energy, congestion management, pumping, and turbining, and intraday trading. Yeah? So those four components are the flexibility products which are being used by VERBUND to stabilize the system, like congestion management and control energy, and at the same time, obviously, to optimize volatility in the market. Now, if I understood you correctly, you were basically asking me on the flexibility products, which are the key factors which could have an influence on the level of flexibility products. So first of all, the higher the energy prices, the more expensive flexibility products. So when energy prices should normalize over the next few years as a result of, for example, lower gas prices, then the.
Value of flexibility products should come down as well. Right? Point number one. Point number two. It's not just the price; it's the volume as well. If you would be able, for example, to take congestion management to sell more congestion management products, then, of course, you have higher revenues. It's basically price times the volume which you can do. In the case of pumping and turbining, of course, with Limberg 3 , we have more capacity. We have more modern machines, i.e., not just more modern; we have state-of-the-art machines, cutting-edge, that increases the effectiveness and the efficiency of our pumping and turbining. There we can produce more volume. At the same time, we obviously hope that we are going to have a volatile environment over the next.
Years, and at the same time, a good volume so that we can take advantage of those two factors in order to optimize and maximize the contribution from pumping and turbining. Would that answer your question?
I was actually hoping that you give us a bit of numbers behind it so that you rotated one terawatt hour of power and you made an average 100 spread and that's half of the flex channel revenue. Then we could have a view on how much you will be able to rotate going forward of the power up and down and the spread as well. That's what I was hoping. I mean, that explains the mechanics.
Okay. Great. Good. As always. Very interesting questions, good discussion. Thank you very much. A lot of people participated today. We really appreciate that. If you have any follow-up questions, Andreas and his team at your disposal. I wish you a wonderful day. Thanks again.
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