Earnings call transcript: Verbund AG Q4 2024 shows EBITDA decline amid market volatility

Verbund AG reported a significant decline in its financial performance for Q4 2024, with EBITDA dropping by 22.5% to €3.48 billion. Despite the downturn, the company maintained a strong presence in the renewable energy sector, advancing several projects. According to InvestingPro data, the company maintains a GOOD overall Financial Health Score of 3.0, with impressive revenue growth of 32.77% in the last twelve months. The energy market’s volatility and geopolitical uncertainties were highlighted as major challenges, though the company’s beta of 0.83 suggests lower volatility compared to the broader market.

Key Takeaways

• EBITDA decreased by 22.5% to €3.48 billion in 2024.
• Operating cash flow fell to €3.25 billion.
• Hydropower generation increased by 9.6% to 33,448 GWh.
• Verbund plans to invest €5.9 billion over the next three years.

Company Performance

Verbund AG’s financial results for 2024 reflected a challenging year, with a 17% decrease in group results to €1.87 billion. Based on InvestingPro analysis, the stock appears undervalued at current levels, trading at an EV/EBITDA multiple of 11.57x and maintaining a healthy free cash flow yield of 21%. The energy market’s volatility and geopolitical uncertainties contributed to the decline, although the company continued to expand its renewable energy portfolio, particularly in Spain. The net debt/EBITDA ratio slightly increased to 0.6, indicating a stable financial structure despite the downturn. For deeper insights into Verbund’s valuation and financial health, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• EBITDA: €3.48 billion, down 22.5% from 2023.
• Group result: €1.87 billion, a decrease of 17%.
• Operating cash flow: €3.25 billion, down from previous levels.
• Free cash flow after dividends: €145 million, significantly lower than €2.1 billion in 2023.

Outlook & Guidance

Verbund AG provided guidance for 2025, projecting EBITDA between €2.7 billion and €3.3 billion and a group result between €1.35 billion and €1.75 billion. InvestingPro analysts maintain a consensus recommendation of 1.75 (Buy), with price targets ranging from $3.85 to $5.85, suggesting potential upside. The company plans to invest €1.9 billion in 2025, focusing on growth and maintenance projects. By 2030, Verbund aims to generate 25% of its energy from new renewable sources.

Executive Commentary

Peter Kollmann, a management representative, emphasized the company’s resilience despite the challenging year. "In 2024, the Verbund results were down compared to 2023, but still high in a historic context," he noted. He also highlighted the importance of the baseload gap: "The baseload gap is an absolute prerequisite."

Risks and Challenges

• Geopolitical uncertainties affecting energy markets.
• High volatility in electricity contract prices.
• Regulatory challenges in the European energy sector.
• Potential impact of an Austrian windfall tax, estimated at €50-100 million.
• Challenges in forecasting revenues from pumped storage plants.

Q&A

During the earnings call, analysts inquired about the potential impact of the Austrian windfall tax and the company’s strategies in the Spanish renewable market. Verbund’s management discussed the challenges of predicting revenues from pumped storage plants and detailed regulatory account adjustments.

Full transcript - Vereit Inc (VER) Q4 2024:

Conference Operator: Ladies and gentlemen, welcome to the Verbund Dragay Full Year twenty twenty four Conference Call. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a Q and A session. You can register for questions at any time, press and one on your telephone. For operator assistance, please press and 0.

At this time, it’s my pleasure to hand over to Peter Kollmann. Please go ahead.

Peter Kollmann, Management Representative, Verbund AG: Thank you very much. I’m here with Andreas Walllein, Head of Investor Relations and Finance. We will do this presentation together. Ladies and gentlemen, welcome to the presentation of our twenty twenty four results. And let me thank you for joining today’s conference call.

Before we move into the analysis of our business development, let me make a few general comments. In 2024, the Faboon results were down compared to 2023, but still high in a historic context due to normalizing conditions in the energy industry following the gas price shock after the outbreak of the Russia Ukraine conflict. As you know, the past financial years proved to be challenging for the entire energy industry with very little predictability and high volatility, in particular geopolitical events, but also the weakening economy in Europe. In addition, the landmark elections in the EU, in many EU member states and of course in The U. S.

Gave rise to intensive discussions about the future shape of the regulatory and political framework conditions within the energy sector. These developments made it very clear that tensions between security of supply, climate protection and competitiveness will remain intense over the next years. Now let’s move on to the details of our ’24 results. Average achieved contract prices decreased compared to ’23. The hydro coefficient determining the generation from our run of river hydropower plants was significantly better compared to last year.

The generation from the annual storage power plants rose due to higher inflow and reduced reservoir levels outweighing the lower generation from Turbanym. Generation from wind and PV was also up. The increase in new renewables was mainly a result of the commissioning of new renewable power plants in Spain, but also in Austria and Germany. However, the overall result contribution declined due to lower achieved prices, higher other operating expenses and valuation effects of energy derivatives. Generation from thermal power also rose due to the increased use of our CCGT in Mela.

The results contribution from the sales segment improved and was slightly positive. However, the contribution from retail was still negative. Lower contributions from Gasconnex Austria and Austrian Power Grid were recorded in the regulated grid segments. And finally, contributions from flexibility products decreased mainly due to lower contributions from concession management. Now, let me go into more details and let me start with the hedging volumes.

Higher relevant highly relevant for Verbund results, as you know, per megawatt hour plus or minus has a sensitivity of approximately €25,000,000 in our EBITDA line. As of December 2124, we reached an average achieved contract price for hydro generation of EUR 118, dramatically below EUR 23. As of the thirty one December twenty twenty four, we had sold 66% of our own generation volumes for EUR 25 at a price of EUR 117.5 and for ’26 we had sold 38% of the generation volumes at a price of 79.3. On a mark to market basis with prices as of the 03/17/2025, the average achieved contract price for ’25 is at 108.9 and for ’26 at 81.8 megawatt hour. On the next page, we talk about the hydro segment At 109, the hydro coefficients, an index quantifying the hydropower generation of the run of river power plants was nine percentage points above the long term average and 11 percentage points above the level of 23%.

The production from annual storage power plants increased by 4.2%. Own production from hydropower therefore overall increased by 2,940 gigawatt hours or 9.6% to 33,448 gigawatt hours compared to 23. The increased volume however could not compensate for the lower achieved contract prices. Therefore, the EBITDA in the hydro segment decreased by 23 to €3,000,000,000 Regarding CapEx, ’24 marked the completion of very important projects, the 45 megawatt RISEQ2 pump storage power plant as well as the 11 megawatt Gartcon run of river power plant project. Activities on the four eighty megawatt Lindbergh Three pump storage power plant project as well as the 14 megawatts Stegenweid Run Of River Power plant project are progressing very well and we are expecting them to open in ’25.

Now on the new renewable segments, the new renewable coefficients which similar to hydro is an index quantifying the generation from wind power and PV amounted to 0.91 in 2024 compared to 1.06 in 2023. So lower coefficient here as well. The generation from wind power increased by 30.2% or four twenty two gigawatt hours and amounted to 1,800 gigawatt hours in ’24. More favorable wind conditions in Austria in addition to new installations in Austria, Germany and Spain were the reasons for this development. Generation from PV amounted to four forty six gigawatt hours or plus 23% in the reporting period stemming from PV installations in Austria that is seven gigawatt hours and Spain Four Thirty Nine gigawatt hours.

In both countries, new solar farms went online. Now taking a look at the EBITDA development in the new Renewal segment, we see that the EBITDA decreased by 25% to an EBITDA amounting to million. Lower achieved prices were offset by increased generation volumes as I mentioned before. However, higher other operating expenses and a lower effect from the valuation of energy derivatives in connection with future energy deliveries had an additional negative effect. The chart also provides an update on our activities in the renewable sector.

The main focus is on the development of our large renewable portfolio in Spain for which we got the approval to start construction of approximately 1.6 gigawatts. On the next slide, you see an update on our renewable activities. The chart outlines our new renewable assets in operation and in construction in our markets. It is split by technology as well as our target for 02/1930. In addition, we are providing the EBITDA contribution in 2024 and all the relevant CapEx figures.

Now on the next page, talking about the sales segments, taking a look at the EBITDA development here, we see that it strongly increased to a slightly positive value of million. The EBITDA in the retail business improved from minus million in 2023 to a level of minus 70 7 million dollars so that is a big increase. EBITDA in the trading business amounted to plus $84,000,000 however this figure includes negative valuation effects of $94,000,000 So the improvement in EBITDA was mainly due to lower procurement costs for both electricity and gas in the end customer business, which was offset primarily by lower results from devaluation of energy derivatives in connection with future energy deliveries. In the grid segments, as you know, the grid segment consists of our regulated business Austrian Power Grid and our regulated business Gas Connect Austria. The EBITDA for $24,000,000 from the electricity grid business according to IFRS was approximately $284,000,000 which is a decrease of $89,000,000 The main effect for this decrease was the reduced contribution from earnings of our auctions.

The EBITDA guidance for the electricity grid for ’25 is at approximately million and can be characterized by two different effects. Number one, the regulatory compensation is rising because of higher WACC numbers compared to last year and because of the increase of the regulatory asset base reflecting the National Grid Development Plan. The company’s strong growth, however, is leading to cost increases, which will be reimbursed by the regulator two years later. This time lag generally has a negative effect. As you can imagine.

In addition, the movements in the regulatory account will have a significant negative impact on earnings of EUR76 million. The planned amount of the regulatory account at the end of twenty twenty five will be approximately million. I would also like to give you an update on the WACC development. APG received a WACC of 4.2% for old assets with a commissioning date up to 22% and a WACC of 6.3% for new assets with a commissioning date in twenty twenty four percent and now most relevant a WACC of 6.24% for new assets with a commissioning date in 25%. So, when you take it together, the total WACC for twenty five percent is approximately 4.8%.

As you might know, there will be a yearly update of the WACC for new assets for each tariff setting process until the end of the regulatory period, which is in 2028. Now with regard to the results contribution of Gasconect Austria, we report an EBITDA of approximately $86,000,000 for $2,024,000,000 dollars The strong decrease compared to the very high results in 2023 is mainly due to the elimination of the so called commodity tariffs and lower auction revenues in the gas network. The EBITDA guidance for ’25 is much lower. It’s approximately $30,000,000 under IFRS. What’s the explanation?

Well, it’s the cessation of Russian natural gas transport through the Ukraine. As a consequence, we have a shortfall of approximately $40,000,000 which will directly reduce the $25,000,000 results. But as we are in a new regulatory system, we’ll be compensated with T plus two starting from ’27. I will now hand over to Andreas Voilaen who is going to take us through the next few pages. Please Andreas.

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: Yes. Thank you, Peter. So let me continue with the old other segments. So generation from thermal power plants was up by six twenty two gigawatt hours. We had lower revenues.

The reason was mainly due to lower average prices achieved, which could not be offset by the higher production volumes. In addition, negative effects from the valuation of future energy deliveries were the main reasons for the decline in EBITDA. The contribution from flexibility products also decreased by around €15,000,000 The contribution from Cadillac, the provincial utility at Carinthia, increased from €78,000,000 to about €100,000,000 This year on year increase in earnings is mainly due to the improved hydro availability, the higher trading result and the efficient use and optimization of storage capacities. Now let me come on Page 10 to the non recurring FX. We recognized impairments in 2024 amounting to minus two ninety one million euros and we had reversal of impairments of positive €114,300,000 The main reasons for the impairment losses concerning Melach are lower case spark spreads achievable in the medium term.

The reason for impairment losses concerning Gasconic Austria are adjustments of the long term business plan with respect to the new cost notice for the upcoming transmission regulatory period from 2025 onwards. The main reasons for impairment losses concerning the Spanish renewable assets are lower electricity prices for non tariff projects and updated operating expenditures. The reversal of impairment losses are among others due to lower capital costs. The total effect of impairments in the EBIT line is minus EUR177 million. The non recurring FX in the financial side amounted to minus €26,000,000 in total and are mainly related to reversal of impairments related to TAC.

The measurement of an obligation to return an interest in Donut Graf Jak and Jokulsen and the PPR in TAC. The effect on taxes amounted to SEK47 million, the effect on minorities SEK55 million. Million. The overall impact of the non recurring effects on the group cycle level amounted to approximately SEK 100,000,000. Now moving on to page 11, we show the development of the most important key figures of the bond.

So first, I think we mentioned that because of the aforementioned developments, EBITDA decreased by 22.5% to SEK3.48 billion. Depreciation increased by about 8% to $578,000,000 due to the increased investment volume, especially in Austrian power grid and the depreciation on the plants acquired in Spain in previous years. The financial results slightly deteriorated from EUR55 million to EUR52 million, on the one hand an increase from Kellogg, but also an increase in interest income from Manni market transaction. In addition, interest expenses declined. This decline resulted in particular from the repayment of €500,000,000 Schuchard in Dalian in November 2023 and from lower interest expenses from money market transactions.

On the other hand, the issuance of a green bond in May 2024 had an offsetting effect. The other financial result also had a negative effect. This resulted mainly from the measurement of an obligation to return an interest in Dohmer Kraft Jokenstein power plant. Taxes on income amounted to $639,000,000. The group result therefore decreased by 17% to 1,870,000.00.

The group result after adjustment for non recurring effects was down by 24.5% and amounted to SEK1.96 billion. Dollars Finally, I would like to mention the decrease in additions to tangible assets in total from $1,450,000,000 to $1,160,000,000 major investments mainly related to the hydropower plants Lindbergh 3, various electricity grid investments as well as investments into new renewables in Spain, Austria, Germany and Italy. On Page 12, you see a further development of key figures. First of all, the operating cash flow decreased in line with the decrease in EBITDA to EUR 3,250,000,000.00. The change was mainly due to the significantly lower prices for electricity, lower inflows from margining payments for hedging transactions and higher income tax payment.

The free cash flow after dividends showed a negative development from BRL2.1 billion in 2023 to a level of BRL145 million in 2024. The lower operating cash flow as well as higher dividend payments were the most important influencing factors. Net debt EBITDA, an important key figure was at 0.6 as of December 31, the slight increase primarily due to the lower EBITDA. Based on the results presented, we propose an ordinary dividend of per share for 2024 at the Annual General Meeting on 04/29/2025. The payout ratio in relation to reported group result is 51.949.2% in relation to the group result adjusted for non recurring effects.

So let me hand on pass on to Pete again for elaborating the CapEx plan and the outlook.

Peter Kollmann, Management Representative, Verbund AG: Thank you, Andreas. Yes, very important CapEx plan for the next three years. You can see that we have increased our previous three year plan, which has been $5,500,000,000 to $5,900,000,000 Let me go into a little bit more detail here. We are going to invest around $4,000,000,000 into growth investments and around $1,900,000,000 for maintenance investments. The majority of our investments will go into the expansion and maintenance of the regulated Austrian electricity grid that is around $2,000,000,000 Furthermore, we will invest in renewable generation projects primarily in Spain around $1,700,000,000 and in hydropower plant projects in Austria, around $1,250,000,000 The investments overall relate to Verbund’s home markets, primarily to Verbund’s home markets of Austria and Germany around billion and the Spanish market with around million.

Verbund plans to invest a total of around $1,900,000,000 in the financial year $2,025,000,000 dollars of which around $1,340,000,000 will be invested in growth and around $600,000,000 in maintenance. Now on the last page of our results presentation, as always, our outlook. Before I go into our guidance, I would like to highlight our sensitivities, which we have in our generation, a deviation of plusminus 1% in the generation from our hydropower plants has an impact of plusminus million in the group results for million, a deviation of plusminus 1% in the generation of wind and PV has an impact of 2,000,000 and a deviation of plusminus €1 in the wholesale price has an impact of approximately million in the group result for 2025. Our guidance for 2025 is as follows. We expect the reported and adjusted EBITDA of approximately between $2,700,000,000 and $3,300,000,000 and a group result of between $1,350,000,000 and $1,750,000,000 as always under the assumption of average hydro, average wins and average PV generation as well as the actual chances and risk situation of the group.

The earnings forecast is contingent on the group not being impacted by any further legal or regulatory changes for the financial year 2025. We plan to payout between 4555% of the group results after the adjustments for non recurring effects. With that, we have come to the end of our presentation and we open for Q and A.

Conference Operator: We now begin the question and answer session. The first question is from Wanda Srivinoska with UBS. Please go ahead.

Wanda Srivinoska, Analyst, UBS: Hi, good morning. Wanda Servinovska, UBS. Two and a half questions for me. The first question is on the new tax in Austria. Your guidance is anything between EUR 50,000,000 to EUR 100,000,000 in this fiscal year, but should we assume anything in Q1 next year?

Or do you expect anything beyond December 2025? Because if I look at your achieved power price on the mark to market, you will be below the threshold. So do you see a further risk that the government may come and basically lower the threshold from EUR 90,000,000 to EUR 70,000,000 because it doesn’t seem very likely that you will pay anything next year? The second question is on your guidance. If you could have us to bridge your 2025 guidance because if I just look on the ’24 versus ’25, hydro has been weak, so maybe you’re losing a bit of maybe half of terawatt hour.

Power price is down by €9 per megawatt hour. So all in, this is like $5.50 maybe headwind at the EBITDA level. Networks are going down by 130. There’s a tax, let’s say, 75. So if I sum it up, I’m ending at SEK 2,700,000,000.0 of EBITDA and your guidance is SEK 2,700,000,000.0 to SEK 3,300,000,000.0.

So what I’m missing, are there any other moving parts that are basically that are missing? And the usual item, Peter, if you could disclose the latest hydro and the hedging price, not mark to market but the volumes and the achieved fire price so far. That will be appreciated. Thank you.

Peter Kollmann, Management Representative, Verbund AG: Sure, Van der. Thank you. I will start with the third one and it also explains part of your question on the guidance. We have hedged for 25 around for today around 74% at a price of $117 The remainder which is not hedged we currently mark to market it at 109. So the unhedged prices which we’re currently using is So obviously that could go up, it could go down.

So there is some uncertainty here on the unhedged level for 25%. For 26%, we have hedged per day 42%. There the mark to market is 82%. And when you compare what we have already hedged, it is around 80% and the unhedged level is also slightly above 80%. So the mark to market is 82.

And for ’27, we have literally just started with the hedging. So there we see a ’27 forward price of around 76. That already leads me into your important question on the tax and on the price cap. And you have rightly said that when you look at the 26 levels, we are currently as I’ve just said we are around 82, we are below the threshold. You’re right.

As a result of that, as we have a program until 02/1930, there is the possibility that next year the cap will be changed. Why? The government has said that until 02/1930, they would like to get payments of around $200,000,000 per today. That can change as well from the energy sector from the Austrian energy sector as we are by far the largest player in the Austrian energy sector. Obviously, we make a high contribution to that level.

And when as a result of lower power prices that $200,000,000 or whatever the number is going to be next year is not met, then of course the cap could be reduced. Those are all things we don’t know, but that is something when you look at the law, there is currently a lot of leeway and a lot of flexibility for the government to be very flexible in terms of how they are going to design the tax within the next few years. And in terms of the guidance, the guidance at the beginning of the year, Vanda, is not a perfect science. We have a lot of uncertainty. We have uncertainty in terms of what kind of hydro coefficient, which we’re going to have and I’m going to answer on the hydro coefficient in a second.

We have uncertainty on the power prices. As always with the IFRS results, we have uncertainty on the Austrian power grid. Gasconnex Austria, we’re pretty sure that we’re going to come up with around the 40. And as you remember from the last few years, it is very difficult to predict the flexibility products. Sometimes we are surprised how much concession management is required by the market because of volatility also cross border and sometimes those numbers are much lower than we predicted.

That is very much an external factor where we do our best to give a guidance, but it’s very hard to really predict. Now coming to the last point, the hydro coefficient, We had a very dry beginning to the year. We have year to date 0.86, percent, which is 14% below the long term average. That means that we really have to look at and I know that would have been one of the next questions, so I’m anticipating it, the snow caps in the mountains. And at this point in time, we don’t have a lot of snow.

Weather is unpredictable and we could still have snowfall in the next few weeks. We’ve seen it before. But as it stands today, there is not a lot of snow in the mountains. And as a result of that, the usual effect which we get from the melting of snow, which is obviously when you look at the topology of Austria is very significant, is not huge at the moment. The hydro coefficient currently, I mean, when you just look at yesterday is 0.6%.

So at this point in time, the dryness continues. I always have to say at this point that very often we have been surprised. So we had a very dry beginning of the year and then come summer and come fall, we see a lot of rainfall and the numbers can even change dramatically even sort of like twelve weeks before year end as we have seen two years ago. So that would be the summary of my responses to your three questions, Rhonda.

Wanda Srivinoska, Analyst, UBS: Can I just two clarifications? One is on the guidance. What are your assumptions on the sales? Because on hydro and on power grid, we can work it out. But on sales, do you assume any reversal or something?

Or is there anything unusual that is baked into the guidance? And then on the tax, because it’s a twelve month period, right, for the windfall profit tax, but you included 50 to 100 for nine months effectively, so there will be something in Q1 next year?

Peter Kollmann, Management Representative, Verbund AG: Yes. Well, it doesn’t run-in a calendar year. It basically runs until the March. So that would be the impact, the $50,000,000 to $100,000,000 and I have to make a comment on that in a second. It is the impact for $25,000,000 And now I have to give a big caveat on that number.

We have been discussing internally if we should give a number or not give a number, as you can imagine. We have decided that we are going to give you the best estimate which we currently have. And this is a number, a range where we see the highest probability of the impact on our 25 results and that is something that is included in our guidance. That number means that we did not have to change our guidance. It can be absorbed.

However, we don’t exactly know what the Ministry of Finance is going to decide vis a vis the possibility of using investments, offshore investments against this windfall tax? Can we use more than we expect? Is it going to be less? And that makes a huge difference as you can imagine. We think that we can use offsetting investments and this is how we come up with the number.

But could it be higher? Yes, it could be higher. If the offsetting mechanism of investments is worse than we’re currently predicting and it is a wide range because there are many ways to design those investment offsets. It remains to be seen. However, as soon as we have more clarity how the legislation is going to be implemented and the implementation is the key, the specific design is the key, as soon as we have it, we’ll let you know.

Wanda Srivinoska, Analyst, UBS: And the sales EBITDA guidance, sorry, for the

Peter Kollmann, Management Representative, Verbund AG: Sorry, on the sales, we are predicting that we are going to end up when you look at the entire sales segment with a number that is significantly higher than what we had in 2024 as a result of a complete change in procurement. So it’s mainly the retail business which is doing much better.

Wanda Srivinoska, Analyst, UBS: Thank you very much, Peter.

Conference Operator: The next question is from Harrison Williams with Morgan Stanley. Please go ahead.

Harrison Williams, Analyst, Morgan Stanley: Hi, morning. Thanks for taking my questions. A couple for me. But firstly, I appreciate the color you’ve managed to provide on the windfall tax. Can I just ask when would you expect to get full clarity on those CapEx offsets?

And then maybe an extension of that question taking a wider view of the new government in Austria. Do you see any other changes that have implications for your business? I mean, we’ve seen, let’s say, more pragmatism being adopted or is talked about in other countries in Europe without addressing the energy transition. So we can get your view on that. And then the second question was on your renewal investments.

Piotr Jaskowalski, Analyst, Citi: I noticed

Harrison Williams, Analyst, Morgan Stanley: in your slides versus Q3, you have kind of a 25% increase in solar capacity targets in Spain by 02/1930.

Piotr Jaskowalski, Analyst, Citi: That still seems somewhat of

Harrison Williams, Analyst, Morgan Stanley: a challenging market given the cannibalization risk. So just hoping to get an updated view on what your return expectations are here. And you previously talked about pairing that with pumped storage. Is that still an ambition? Yes, further color would again be appreciated.

Thanks.

Peter Kollmann, Management Representative, Verbund AG: Yes, sure. I’m going to start with the discussion around the tax, the windfall tax and Andreas will take up your renewal question. I would like to take a step back because I think more of an explanation is required in terms of where Austria is coming from, where the Austrian government is coming from. The key issue here in Austria is the very large deficit. And as a result of that, because we had two years of negative growth and we will probably in Austria go into yet another year of negative growth.

That is a first. That is something we haven’t seen for one hundred year plus and therefore it is of great concern in terms of deindustrialization, in terms of the weakness of the industry and industrial production overall. That has been the catalyst for the government to look at a number of measures to repair the deficit situation. The EU has also started very detailed discussions with Austria, what Austria is going to do about the deficit situation. As a result of that, they have basically come up with a plan that the energy sector needs to make a contribution as well.

So that is the background. That will not go away because the government has been pretty transparent in basically saying this is something this is a plan for the next five years because we’re not going to repair the budget deficit in one year. It is a medium term project to basically do it at the same time, more money as in Germany needs to go into infrastructure. So there is on the one hand money is required, on the other hand there is not enough. The reason why I’m saying that is U.

S. Could there be other measures? And at this point in time, I cannot exclude other measures. Personally, at this point in time, I don’t think there will be other measures, but I cannot exclude it. Do I think that as I mentioned to Wanda before, do I think that there will be an adjustment in 2026?

Yes, I think there will be an adjustment because when the finance minister goes through his calculations and realizes that he will not get anything, he will probably make an adjustment. So that’s where we stand. You asked me when do we expect any news? I would say within the next four to six weeks. However, the government is still in the formation process.

The government has only just decided on the new coalition. It has taken a very long time after the elections. Various coalition structures were discussed. We now ended up with a tri party government consisting of the conservative party, the socialist party and the party called the Neos. You could call them the Liberal Party.

And they have negotiated, they all come from different perspectives, they have different priorities, so they all had to compromise on something. And as a result of that, it might take a few weeks before we have more clarity on the design of the energy tax, particularly the offsetting mechanism for investments, which are very relevant to us. Andreas, could you give us some comments on the renewable question?

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: Yes. Harrison, to start the answer a little bit more generally, I mean, you know we have a pretty balanced CapEx program going forward. We’re around a third of our capital expenditures will be allocated to the regulated grid business, about 30% goes into hydro, about 25% into new renewables and the rest goes into batteries. With regard to so what I want to say first is we have a very balanced CapEx program. With regard to new renewables, you know we have a target to reach about 25% of our total generation in newer renewables by 02/1930.

It corresponds with a capacity of around 5.5 giga. We have currently about 1.2 gigawatts, 1.3 gigawatts in operation, more than half of that in Spain. More, let’s say, what we currently have in operation in Spain is majority wind and to a lower extent PV and most of the production is secured through a PPA or a tariff. I think we only have a 15% or so merchant exposure. We have acquired a portfolio, a project portfolio, say two years ago from Q Energy, the so called Labrador portfolio.

It consists of around one point currently about 1.6 gigawatts, 1.7 gigawatts of renewable capacity. Majority is of the projects is PV, to some extent wind. And we are now coming into, let’s say, the time period where we do the FIDs. So we recently have given FID to start construction of the first three portfolios in Spain, which is about a little bit more than 600 megawatts. And I think the plan is to do some additional FIDs in Q2, Q3 this year in order to step by step realize within the next two, three years this 1.7 gigawatt of projects.

I think you know the current situation in Spain. I mean, I think everybody is trying to optimize profitability of the projects through different measures, so do we. So we also have now, let’s say, done the approval for or given the approval to do co location or hybridization for existing assets. So in order to increase the profitability, we combine PV with batteries and we also, let’s say, try to do some colocation in order to increase the efficiency of the grid access. So these are the main targets.

I mean, currently I think when we talk about returns, I think we can achieve WEC plus something. It’s maybe currently not the hurdle rate which we targeted, but things are also moving and developing in Spain. And let’s say, on a medium term basis, we would expect prices in Spain to go up. So this is the current situation for Spain. Does that answer your question?

Harrison Williams, Analyst, Morgan Stanley: Yes. That’s very useful color. Thank you.

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: Okay.

Conference Operator: The next question is from Oli Jeffrey with Deutsche Bank. Please go ahead.

Oli Jeffrey, Analyst, Deutsche Bank: Coming back to the Windfall Act, a couple of questions on that. First, the GBP 50,000,000 low end and GBP 100,000,000 low end, what was the assumption you’ve made on the CapEx offset that you’d be allowed? And then also maybe just taking a step back, if CHF200 million is being targeted from industry overall, what do you think is a reasonable amount to be assumed given the bund size is contributed by the bund? And then lastly, could you please just say what the guide is for the new renewables division in 2025? Thank you.

Peter Kollmann, Management Representative, Verbund AG: Yes, sure. I can’t really give you the exact assumptions because we have looked at five different scenarios and we have given probabilities to those five different scenarios. We have not run a Monte Carlo simulation, but we could have done. But we have tried to make a sound judgment on everything we know so far. And this is why we have come up with that range.

We could have said $50,000,000 to $120,000,000 would have been just as correct because we don’t know at this point in time. But at the same time, we think it would not have been fair towards you if we had basically not said anything in terms of what our estimate is. In terms of could you help me with your second question? What did you say again?

Oli Jeffrey, Analyst, Deutsche Bank: Well, the other question was that if you look at the windfall tax in another way, the Austrian authorities are looking to generate $200,000,000 a year given the size of the bunds the size of its hydro business overall in the context of Austria. Is something around £100,000,000 probably kind of the ongoing basis type of figure that you think they might be looking to target from the bunds given its size relative to others? Is that reasonable?

Peter Kollmann, Management Representative, Verbund AG: Yes. That’s it’s an important question. It’s extremely difficult to answer. It seems to us to be a movable feast. There are so many factors that go into it.

There is the remainder of the energy sector, I mean, as much as for Bond, thank God. There are many other companies as well. There are renewable players that have a tariff. So I think that the finance minister will probably look at sort of like an estimate of the contribution from the entire sector. Then he’s going to look into where is it coming from and why is it changing.

And then, of course, he will make adjustments. But how he’s going to make those adjustments, I don’t know. The only very clear statement which we have received from the government, which is public, has been this is a long term project. Well, maybe not long term. This is a medium term project, which the government has, and it is $200,000,000 per annum.

So we are also in a position of uncertainty, uncertainty short term because we don’t know what exactly it’s going to be for ’25 with the explanation on the offset I’ve given before. And of course, we have some uncertainty for the years ’26 onwards because we don’t know if the price cap, which is currently at 90 is going to be altered obviously to a lower figure. And the EBITDA contribution which we expect for ’25 would be between 120,000,000 and 140,000,000 EBITDA.

Oli Jeffrey, Analyst, Deutsche Bank: Thank you. And may I ask one follow-up. If you allowed to use the CapEx offset for hydro from 2025 alone, what order of magnitude would that offset be just for one year?

Peter Kollmann, Management Representative, Verbund AG: I know you’re getting it. You’re trying to get to our assumption through the back door. That is totally fair. I would do exactly the same. However, no, I can’t really give it to you.

Yes, fair.

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: I think we’ve gone out of

Peter Kollmann, Management Representative, Verbund AG: our way to really give you our best judgment.

Piotr Jaskowalski, Analyst, Citi: I see. Yes, certainly. But thank you very much.

Conference Operator: The next question is from Piotr Jaskowalski with Citi. Please go ahead.

Piotr Jaskowalski, Analyst, Citi: Hi, good morning everybody. So I have two remaining questions really. So first one, I wanted to ask about your Lindbergh plant that you will have a COD in 2025. What is the annual contribution? And can you a little bit say how much the plant will kind of load power and offload the power?

So any operational metrics, if you can, on the traffic provider? And then second question on the GCA ACG new guidance for 2025, you provided the new numbers today. How much of a negative one offs you included in them in terms of this reimbursement of old payment from the past year? Just to get a feel for the sustainable run rate of these businesses at current fab level?

Peter Kollmann, Management Representative, Verbund AG: Okay. Now the Lindbergh three question which you asked from both from a technical point of view, but also from an economic point of view is an interesting one. However, extremely hard to predict and I’m going to explain why it is hard to predict. The pump the pumping is obviously done when power prices are cheap and the turbining is done when power prices is high. As we have been doing this for decades, we’re pretty good in making estimates sort of like what hour should we be pumping and when should we be turbining.

But it is not just a question of the spread and that spread is dependent on the overall pricing levels. So the pumping spread obviously has been extremely high in 2023 when power prices were very high because the entire base went up. And as a result of that, the difference between the low price and the high price increased as well. The pumping spread increased. And now with lower power prices or a normalization of the power prices, the pumping spread goes down as well.

But that is only part of it. The second part is the volume. And the volume basically depends on when is the spread high enough to justify the pumping and the turbining, yes? And that is an estimate as well. So as a result of that, it is very, very difficult to give you an exact estimate on sort of like the revenues which we produce on pumping and turbining.

That is almost impossible because it depends on too many variables, too many external variables. It’s not as straightforward as the run of river power plants because with the run of river power plants, its base load, the hydro coefficient obviously changes. That is something we report to you on a regular basis. And then of course it is the power price which we achieve. The pumping, turbining, the pump spreads, the volume of the pump spreads is much more complex.

So that is an explanation on Lindbergh. And what was the second one again?

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: Run rates for GCA results and APG.

Peter Kollmann, Management Representative, Verbund AG: Yes. Do you want to do that Andreas?

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: Yes. Piotr Thi, with regard to Gas Connect Austria, you know that this year we have a little special situation because the Russia ship I think ended the gas deliveries from the beginning of the year. So we have here a temporary negative effect on GCA results. That’s why we guided about EUR 30,000,000. The negative effect is about EUR 40,000,000.

So based on that, I would say the normalized EBITDA in Gas Connect Austria business would have been around between €70,000,000 and €80,000,000 for this year. As I said, it’s a temporary effect because that’s starting from the beginning of the year, we have negotiated with the regulator to move into a risk free system. Risk free system means that we get compensated for the volume risk, which is here the case and this compensation will happen or will take place with T plus two, so starting from 2027. In 2026, we are not going to have this negative effect because the regulator according to the tariff system has to amend the transport volumes and as a consequence the tariffs will increase for 2026. And so as a consequence we are not going to have a negative effect in 2026.

So on a normalized basis in this regulatory period in GCA we see between €70,000,000 and €80,000,000 of EBITDA contribution. In APG, it’s a little bit different in Austrian Power Grid. We have for this year, I would say, a normalized EBITDA of around I think a good indicator is always the local GAAP EBITDA, which is around $280,000,000. There are some amendments, so I would say around €300,000,000 eliminating all the, let’s say, the various effects on the regulatory account coming from balancing energy and from congestion management services and from the auctions. So for this year, we predicted a little bit of lower result.

The reason in APG, the reason for that is because we assume a reduction of the regulatory account of around €75,000,000 I think which makes sense that the regulatory account currently stands at a level of around 500. So on a normalized basis, for this year, I would say something around €300,000,000 EBITDA for APG would be a good assumption.

Piotr Jaskowalski, Analyst, Citi: Okay. Thank you very much. Can I please follow-up on this Lindbergh because you explained the logic behind this asset, but you haven’t provided any figures? So can you say based on the I understand these are all estimated in body, but can you roughly say, based on the previous years, let’s not take the energy crisis, but when you were building the plant, your assumption was, I don’t know, three hours of daily pumping and offloading and then on the spread of EUR 50, EUR 60 a day or on every single hour or like just large brackets would be enough anyway or and on what is there, some contribution for example for 25% commission date this year?

Peter Kollmann, Management Representative, Verbund AG: Okay. I give you a little bit more detail.

Piotr Jaskowalski, Analyst, Citi: Thank you.

Peter Kollmann, Management Representative, Verbund AG: But that’s it, right? When we go through our investment decisions, despite the fact that Lindbergh 3 is a project right up our alley. This is something we do best. This is so we can combine it with our other assets. So this is something where a third party would say, well, that’s a must do for somebody like for Bond.

But we still go through very detailed calculations. So we look at the IRR of the project, and I can tell you that on this project, Lindbergh three, we have an IRR that is more than 200 basis points above our WACC. So this is on the project specific profitability. And I give you even more of a feeling. Our you know that our flexibility products, which consist of control energy, congestion management, pumping and turbining and intraday in 2024 were $275,000,000 And we have never really given the detail in terms of how much is coming from control energy and how much from congestion management because it always changes and we don’t want to give you the false feeling of stability in a business that is very much dependent on external factors.

But overall, we had $275,000,000 The year before, we had $350,000,000 coming from Flexibility Products in 2023. For 2025, following the logic which I explained before that the pump spreads basically go down with the overall level of power prices, we think that what we are going to make from pumping and turbining is below the level of ’24. And as a result of that, we think that in ’25, what we are going to get from flexibility products is somewhere between 190 and $2.10. Per today, you might remember over the last few years, things change, yes, because there are, as I said before, a lot of variables. But this is with everything we know today, this is our estimate for ’25, between $190,000,000 and $210,000,000.

When we look into sort of like our medium term planning, we think that flexibility products over the next few years will provide us with a level of around, yes, I would say between 190 and $2.40, somewhere within that range. That is about as much information I can give you and that is actually more than I wanted to give.

Piotr Jaskowalski, Analyst, Citi: Thank you very much. Thank you. Very helpful.

Conference Operator: The next question is from Thibaut de Jourdan with Bernstein Societe Generale. Please go ahead.

Thibaut de Jourdan, Analyst, Bernstein Societe Generale: Good morning. Thank you very much. My first question is regarding the development in Spain. Do you when you develop the new projects, do you already have PPAs? What are your assumption in terms of prices?

Or do you go merchant? My second point is regarding the root factor of hydro. Do you see any risk of having to buyback power this year due to the lower levels?

Peter Kollmann, Management Representative, Verbund AG: Yes. On the sort of like the buyback, that is something we have experienced before. And at the time on the conference call, we had an interesting discussion around that. Again, when you have a very dry year, it can happen that you have to buy back. But we are now purely mathematically, we are in a good place.

Why? Because we basically say that we only hedge 80% of the production. So it really has to go below 80%. The probability of a dry year below 80% is not very high. It can happen and it has happened before within the last one hundred years, but it is a low probability event.

So we are relatively safe on that one. On the renewables, Yes, in Spain, obviously, we try to do PPAs. The PPA level has come down. At the moment, there is discussion around nuclear energy going out in Spain. Some people argue that could be a boost for energy prices in Spain.

I’m not sure. I don’t know. This is difficult to say. We also see that there is a move from pays produced to baseload PPAs. There is demand from data centers, of course, but data centers are looking for baseload as well.

That’s what they need. They need very stable energy flows. As a result of that, yes, whenever we do a project, we try to do PPAs. But we, like the rest of the market, we also go merchant.

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: But for the projects we have currently, let’s say, under development or where we have given the FID, we don’t have PPEs yet. We have started discussions and negotiations with various counterparts. In Spain. Basically you have three different types of off takers, of PPA off takers. First one is the classically utilities and traders.

Second is the industry and third, you have now this big demand from data centers. So this is, let’s say, a reasonable cluster where PPAs are already contracted. So the market is there. As Peter said, I think we are targeting to our target is to enter into longer term PPAs currently I think five to seven years or doable in Spain. It’s always of course a benchmark.

It’s always a comparison with our internal price curves and forecasts. But our target is to enter into longer term PPAs in order to mitigate risk. If it’s doable, we will do that, but there will always be a certain amount of merchant exposure for us as well in order to optimize our own generation, let’s say, in the markets.

Thibaut de Jourdan, Analyst, Bernstein Societe Generale: Thank you very much. If I may ask you a follow-up question. Considering that you also have thermal assets in Austria, do you believe that a lower load factor of hydro could you could compensate with higher load factor of fired of gas plants?

Peter Kollmann, Management Representative, Verbund AG: Sorry, acoustically, I couldn’t hear the last

Thibaut de Jourdan, Analyst, Bernstein Societe Generale: question. Could the low load factor of hydro be compensated by higher load factor of gas plants?

Peter Kollmann, Management Representative, Verbund AG: Okay. Yes. That’s an important question, not just for Austria, but for Germany as well and for some other markets. The entire discussion around the energy transformation is much too late in my view focusing on baseloads. And last year, and this shouldn’t have come as a surprise, that could have been planned already ten years ago.

The more renewables you have and the more basals you take out of the market in Germany, for example, nuclear and coal, the more demand you have for predictable energy. And the only predictable energy, of course, is or planable energy is fossil fuels. Gas is the fossil fuel of choice. And as a result of that, Germany has already decided last year in order to stabilize the system and not be totally dependent on nuclear energy from France, they need to build gas fired power plants. In Austria, we also have a discussion.

We have a grid reserve, but the grid reserve, which basically consists of gas fired power plants, serves mainly to stabilize the system. It is not necessarily a capacity market when you don’t produce enough energy through your existing generation. And we had a situation in January where we because it was very dry and there wasn’t a lot of wind, obviously, not a lot of sun. And we talked about the dryness of the beginning of the year, not a lot of hydro production. So the gas fired power plants had to run at full capacity, but we had to import as well, which basically shows that the entire discussion around the energy transformation, and this is also important for all of you, The baseload gap, as I like to call it, because the stability of the energy system is an absolute prerequisite.

As a result of that, in terms of the entities design, one needs to think very carefully what the backup system will be, how potential capacity markets will be designed and at what price the capacity markets will enter the merit order. And that will basically have an impact on power price and will have an impact on the effectiveness, but also the efficiency of the energy transformation. I hope that wasn’t true.

Thibaut de Jourdan, Analyst, Bernstein Societe Generale: No, thank you very much. And could you invest in new gas plant in this environment?

Peter Kollmann, Management Representative, Verbund AG: We have our CCGT in Mela, which is very efficient, which is a modern CCGT, but we will not make any further investments into gas as we see ourselves as a renewable generator. Thank you.

Conference Operator: The next question is from Alberto D’Antonio with Texan Paribas. Please go ahead.

Alberto D’Antonio, Analyst, Texan Paribas: Hi, good morning and thank you so much for taking my questions. The first one will be related to gas networks and the new regulation which is hedged from the risk of volumes. But I will be interested to know if there is any potential upside if we see new flows coming from Russia. And also regarding your guidance on the normalized level of EBITDA contribution that you mentioned, it was around million to million. And given that in this year, we there is a negative effect in Can we assume that this is going to be reverted in 2027 and therefore the contribution should be in the region of 110 or 120?

This will be my first question. The second one will be regarding the guidance of other sectors and Killac. If you can give us what is your expectations for 2025? And finally, if you could repeat the hedging price without the mark to market that you have answered to one and the first question, I would really appreciate it. Thank you so much.

Peter Kollmann, Management Representative, Verbund AG: Yes, sure, Alberto. I will start with Gasconc Austria. We anticipated that we could see geopolitical issues and problems, which would have a direct impact on our regulated business Gasconcrest Austria. So in the previous regulation, we had a volume risk, but that volume risk obviously never ever could have foreseen the kind of volume changes as a result of a war. Therefore, we entered negotiations with the Austrian Control Authority, Energy Control Austria, And we basically talked about a new regulatory system, which similar to Austrian Power Grid is a cost plus system.

As a result of that, the if Russia came back and if Russia let’s just assume there is a peace agreement, which is something that is being discussed every day today. So if there is a peace agreement and there will be flows coming through the Brotherhood pipeline, which is a very large pipeline going into Austria, that would not change anything because our system, our regulatory system is basically agnostic towards the volumes coming through the pipes. It is a cost plus system. And when Andreas talked about sort of like a normalist level, which is an estimate, we don’t exactly know what the normalist level is going to be, but that’s an estimate, sort of like the $40,000,000 which we’re making less now in T plus two being compensated is already part of the $70,000,000 to $80,000,000 normalized levels. So that would not necessarily come on top of the $80,000,000 which we mentioned.

But that is something that remains to be seen as we are also in negotiations with the regulator on a number of other things. In terms of the hedging, I can give you the numbers again. So you were asking for the numbers which we have already hedged and not the mark to market, if I understood you correctly, Alberto.

Alberto D’Antonio, Analyst, Texan Paribas: Right? Both of them. So the numbers that you have hedged and the price we have hedged.

Peter Kollmann, Management Representative, Verbund AG: Okay. Both. Okay. Good. So for 25% we have hedged approximately 74% at 117.

The unhedged level we currently and the change is almost like every day, but we currently see at For the mark to market for would be For we have hedged 42% at around The unhedged levels we see at around 83. So the mark to market would be 82. And for ’27, we haven’t really hedged anything, I mean, a very, very small amount. But they are just taking into consideration the forward prices. We see them at around 76, so that would be under hedging.

And address do you have the guidance for you said the other?

Alberto D’Antonio, Analyst, Texan Paribas: Yes, the other sector and Kila, what’s the expectation contributions in order to have more or less like the full bridge on the guidance you have provided?

Peter Kollmann, Management Representative, Verbund AG: Andreas is going to look it up and we take another question in the meantime.

Alberto D’Antonio, Analyst, Texan Paribas: Okay. Maybe if I ask this another one on apologies for monopolizing the conversation. But coming back to the question regarding the fee and the discussions with the outtakers, what will be the level especially in the Spanish market that I guess is going to be the most relevant for you going into the future at which you will kind of feel comfortable of seeing in our PPAs and the duration of them?

Peter Kollmann, Management Representative, Verbund AG: Yes. I mean, obviously, the more constructive the PPA market, the better. It’s always a bit of a negotiation, right? It depends on what offtakers are willing to pay and for how long. We, like all the other producers of energy, we would like to see PPAs for as long as possible if the prices make sense.

I know that’s not the answer you want to hear. You would like to get a more specific level, but that’s impossible because PPA prices change a lot and there we can only talk about trends and the trend currently is towards shorter PPAs. Whenever somebody wants to enter shorter agreements, the catalyst for that is usually because people expect that they might pay less if and when they enter a PPA two years down the road. So that is why they are pending to get shorter. I think for Spain, for the energy market in Spain, it’s also important not to completely rely on the PPAs.

Mr. Draghi, again sort of like I think it was yesterday or before yesterday made a comment on the energy transformation, on competitiveness and the need for Europe to be more competitive on the in terms of energy prices. He suggested CFDs. The CFDs by definition would be longer term. They are sort of like it’s around twenty years.

And the CFDs would be given out in auctions. And in those auctions, the most competitive generators are obviously winning or if the auctions provide a high volume, then of course it would be the average price. And as a result of that, for everybody in the renewable market, not only in Spain, but in other markets as well, the challenge is to be to have LCOEs that are as competitive as possible. And Andreas is going to give you the other response. The

Andreas Walllein, Head of Investor Relations and Finance, Verbund AG: contribution from Kellogg this year is expected to be at around 60,000,000 and I think all others for this year expect it to be at about 10,000,000 plus.

Alberto D’Antonio, Analyst, Texan Paribas: Perfect. Thank you so much.

Peter Kollmann, Management Representative, Verbund AG: You’re welcome. Okay. We have a lot of questions today.

Conference Operator: Yes. We have a follow-up question from Ollie Jeffrey with Deutsche Bank. Please go ahead.

Oli Jeffrey, Analyst, Deutsche Bank: Just on the regulatory account, I’m just trying to get a sense for the guide for the grids for ’25, how conservative they are. So on the regulatory account, has that been approved from the regulator or is it your working assumption that it will be? And then the other follow-up question I have was, just on where you see the current level of snowfall in The Alps versus what that would typically be for this time of year, are you able to say how much lower volume relative to the P50 you’d expect that to generate new hydro assets or is that not possible? Thank you.

Peter Kollmann, Management Representative, Verbund AG: Okay. I will start with the regulatory accounts. I go back to 2023 because I remember that we had this discussion on the regulatory count in sort of like when we discussed the ’23 numbers. At that time, the regulatory count was $500,000,000 already in 2023. We talked to the regulator because we wanted to decrease the regulatory account step by step.

The regulator did not agree. I don’t know why, but it did not agree. So actually in 2024, the regulatory account went up to $550,000,000 and now we will be able to decrease it by around $70,000,000 to what we think would be $480,000,000 in twenty twenty five million dollars And then in 2026, hopefully, we can take sort of like we can step it down again, hopefully in a regular way and not too jumpy. In terms of the snowfall, that is close to impossible. What I can tell you is that in comparison to previous years, we had less snowfall in the Alps and the weather was warmer.

As a result of that, you didn’t have the classic formation of bound snow up in the mountains. And that snow cap is usually a good source for springtime hydro through the little rivers in the Alps going into the larger rivers and finally going into the Danube and increasing the hydro coefficient. However, I need to be careful here because that is only looking at one side of the picture. It could well be that what we would usually see as snow melting and therefore hydro flowing from the mountains into the rivers, we could see more normal rainfall. And if we see normal rainfall, that could compensate for the melting of the snow.

So predictions are very difficult, but that is certainly something we are going to observe over the next few months and something we are going to discuss in our next conference call in three months.

Oli Jeffrey, Analyst, Deutsche Bank: Thank you. And to confirm, the regulator did agree to the 70,000,000 decrease in 25,000,000 and what you hope in ’26 for the APG. Is that right? Or is that still to be determined?

Peter Kollmann, Management Representative, Verbund AG: Has agreed to the trends and has agreed on the specific number for ’25 has not yet agreed on the ’26 number.

Oli Jeffrey, Analyst, Deutsche Bank: Great. Thank you.

Conference Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Coleman for any closing remarks.

Peter Kollmann, Management Representative, Verbund AG: Yes. As always at this point, I would like to thank you for your participation and for your many, many questions, which shows your interest. And I look forward to hearing or seeing you again on our next conference call, possibly in the meantime, at the various conferences and roadshows. I wish you a wonderful day, and thanks again. Bye bye.

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