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Good morning. We welcome you to the Naturgy First Half ‘23 Results Presentation Conference Call. [Operator Instructions] If you are experiencing any difficulty in listening to the conference at any time, please make sure you have your headset fully plugged in or alternatively, please try calling from a different device. I’d now hand the conference over to Ignacio Jiménez [ph], Capital Markets. Please go ahead, sir.

Good afternoon, everyone. This is Ignacio Jiménez speaking from the Capital Markets team at Naturgy. Thank you for joining us today for the presentation of first half 2023 results. Next to me is our Executive Chairman, Mr. Francisco Reynes; our Head of Financial Markets, Mr. Steven Fernandez; our Head of Financial Planning & Control, Mr. Jon Ganuza; and our Secretary of the work, Manuel García Cobaleda.

You will understand our management has quite busy agenda today. So, we will need to stick to the scheduled time for this presentation, which is 1 hour. We will start going through the presentation and continue later on with a Q&A session. First, we will take questions on live and then we will finish in with those submitted through the webcast that have not already been answered.

With that, now I hand it over to Steve to start with the presentation.

Thank you, Ignacio and good morning everyone. We’d like to start off today’s presentation by focusing a little bit on what’s happened over the last 6 months beginning with the demand evolution in the main markets where we operate and where we can actually see mix demand across those markets, with declines mainly happening in Spain and in Brazil. It’s worth highlighting Spain, for example, that we have had a very mild winter and this also had a negative impact in terms of gas demand. But in the case of Brazil as well, it’s also worthwhile reminding you that last year at least H1 of ‘22 was a very wet period. And this year in particular actually was a very dry period and this year is very, very wet, which means that there is a lot less gas demanded for electricity generation that explains that decline.

If we move over to the main evolution of the energy markets, we can also see decline in most of the indices that we follow. Now you can see the Brent, the TTF, of course, the Spanish electricity market, this is a function of a number of elements. On the one hand, we do see weak demand across some of the key regions, for example, in Asia, that’s having an impact in terms of the commodity prices as well as, as I mentioned previously, in some of the markets where we operate mild weather conditions, which have also affected the overall prices. On top of that, it’s worthwhile reminding you that last – the first half of 2022 was also highly marked by the war in Ukraine. And what we are seeing right now is more of a normalization of prices or resumption of normalized trends.

If we move across to FX, what we have seen is basically all the currencies in which we operate have appreciated, albeit moderately. Now with the exception of Argentina, as a reminder in Argentina, this is a year end figure not an H1 figure as a result of the hyperinflationary economy that it is. Overall, the impact of FX on the results has not been particularly high, so we can say almost negligible.

So with that said, if we move on over to the consolidated results, first point that we have to remark is EBITDA growing by around 39% to shy of €2.9 billion with a net income of around €1 billion, up 88%. We have also spent quite a bit of effort investing in the company’s behalf. So our overall CapEx has grown to almost €850 million, up 16%. And on top of that, the net debt of the company has been reduced by 11% to a level of €10.7 billion. I think when we look at these results today, we can say that they are very solid and it’s been a very solid first half of the year.

Indeed, that net debt reduction that I mentioned previously supported by strong cash flow generation across the board and it puts the company in an enviable position to continue investing and looking to the future to continue deploying its cash for the ‘23-25 period. It’s true that these results have been marked, nonetheless, by a lower demand as we previously examined and a decrease in enterprises, which makes them more remarkable if we may.

Finally, a quick word on the dividend policy, we are announcing today a €0.50 dividend that is payable on the August 7 and this is part of the new revised ‘23 to ‘25 dividend policy of €1.4 per share, which we will detail a bit more in later slide. All-in-all, the markets businesses, so that will be markets contributed around 57% of the group’s EBITDA, networks and renewables, if we combine them together, contribute around to 85% of the CapEx that is a testament of the group’s great in effort to invest in the energy transition. And I think it comes through with these numbers. And as you will see later on in the presentation, this is going to be a trend that’s going to be sustained in time.

In terms of cash flow, the strong EBITDA results, coupled with a change in working capital of almost €1 billion as a result of the moving prices, have allowed us to significantly reduce the net debt level position as of the first half of the year. And in fact, when we look at it from a metrics perspective, I think it’s worthwhile understanding that net debt to EBITDA has moved from 2.4x as of the end of last year to around 1.9x today. We are still in a very good position with the gross cost of debt increasing to around 3.8%, which is roughly the level where we expect the year to close. And this does not fully recognize the strong remuneration that we are getting from our cash position, which hovers somewhere between depending on the instrument of 3.4% and 4%. Fixed rate levels are around 79%, so roughly unchanged relative to where we were at the end of the year. So the company again is in a good position to offset the increasing rate environment that we haven’t seen as of late.

So with this, I will hand over to Jon to go over the performance by business units. Thanks.

Okay. Thank you, Steven. Thank you, all of you. And first of all, starting with network Spain, so, the network Spain EBITDA has decreased by 9%. And basically there has been in the case of gas distribution of Spain due to lower demand. So now, I think it works. We had a small technical glitch. The things have been gone alive, but well, you appreciate that also going live has some advantages like the Q&A. So, you please have some level of understanding. And in gas distribution, it was mainly due to lower gas demand that we had on the one hand due to a milder weather and also industrial consumption was lowered due to the higher gas price environment. In the case of electricity distribution, although we also did have lower demand that did not impact on the level of EBITDA that we had. And basically, the lower EBITDA was due to the lower modulation on the incentives and on the O&M payments that we have.

In the case of networks LatAm, our EBITDA was 33% greater than it was last year. But here we always have to take into account first of all that last year, we had the negative effect of TGN, the provision that we got to do last year that it was almost €100 million on an EBITDA basis. Although on a net profit basis, it was almost €200 million. In all of the geographies, we have seen an improvement in the demand, except in the case of Brazil, as Steven has already explained, but since the lower demand that we had in Brazil, it was in generation, the impact that we have seen in margin, it’s much lesser than the one that it has on the overall demand. FX was relatively flat, except in the case of Argentina. But I think that the good news came on the regulatory front or in the case of Panama, we already settled for the regulatory period until 2026 though we still have pending the regulatory period for Mexico and Brazil.

In the case of energy management, I think that the first thing that we have to take into account is that we have changed how we reported. We have consolidated markets and procurements with the LNG business and from now on it’s going to be reported as LNG markets. As I think we already explained in previous results presentations, we think that both results were highly entangled and therefore showing them as different reporting business units. I think that it led to more confusion that actually it helped in order to understanding what was the underlying results of the – of the businesses.

And also the second thing that we have to take into account is that as we already explained on the result presentations of 2022, the results have been affected by the hedging efficiencies, which did have a negative effect in 2022, but are having an positive impact in this first semester Actually, if we take into account this positive effect, actually the results that we would have this year in LNG on market would be below the ones that we did have last year. In the case of thermal generation in Spain, basically what we had is lower production, which has been offset by higher margins. And in the case of a thermal generation LatAm results more or less have been in line with the ones that we saw last year.

In renewable generation, the results improvement has been really important. So we think that the EBITDA has increased by 34%, but also the CapEx has increased by 29%. And this means that our installed capacity has increased by 7%. In this case, it does not reflect yet earlier operation, because it has been closed after the closing of the semester. And in this sense, I think that we have good news to convey to all of you and is that this operation has been finally approved by the CMC. So, this operation has been completed. And in the case of the production has also severely increased also not only due to greater installed capacity, but also because the hydro production this year has been almost 100% greater than the one that we had last year.

And finally, moving to supply. In supply, I think that it’s good to remember that last year, we had really lackluster first semester, mainly due to the fact that in electricity generation, we had a long-sell fixed price position, which was – had generated losses in the environment where the electricity prices had increased and also in the case of gas because we have had fixed price contracts that did not accommodate to the increase of the gas prices that we did have in our gas procurement contracts. The situation has been improved, as we have been able to equilibrate our selling and procurement positions and also as we have been able to renegotiate and renew most of our sales and procurement contracts.

And with all this, I would hand it back to Steven.

Alright. Thank you, Jon. So as a brief summary and conclusion of the 2023 first half results, we start off with you may remember last February, when we announced the expectations for the year end figures in terms of EBITDA, they should be at a similar level to 2022. And as a reminder, those numbers last year were shy of €5 billion. So as a result of the performance thus far for the company, we now expect EBITDA to exceed €5 billion. Now we have to be mindful of the fact that we previously hinted the reality of the commodities market still being volatile. And we have seen it – you have it on one of these slides. There is quite a bit of movements. So that makes it very difficult to land the final number, but we can say with a high degree of confidence that EBITDA for the full year is going to exceed now €5 billion. So that’s an increase relative to what we initially expected at the beginning of the year.

This is on the back of what we expect when we have seen solid first half results for the year. Continued net reduction on the first half, this trend moving over to the second half of the year, should see – should be somewhat reverted as we ramp up on investments and we step up on our dividend. Also recognizing as Jon mentioned that the figures that we have presented for the first half do not include the €650 million payment for the wind assets that we recently bought. We expect to the company to continue focusing on the energy demand that we are going to be experiencing over the next few quarters and the next couple of quarters and we will see what the expectation there is going to be. But we expect it to pickup somewhat from what we have seen in the first half of the year.

Finally, we will continue delivering on the dividend that we announced of the €0.50 that we have announced payable today on the 7th, there is still going to be another €0.50 by November more or less and this Chairman is going to go into more detail about that. So all-in-all, good solid set of rough numbers for the first half of the year, which kickoff a good starting point for the delivery of the ‘23-25 plan, that is a continuation of the ‘21-25 plan that we announced in July of 2021, which the Chairman is now going to explain a little bit more in detail.

Thank you very much, Steven and thank you, Jon, for your explanations. I think that it makes sense after what we heard to, made a brief overview of what has been done by the company in the last 5 years and also updating our strategic and financial targets for the next coming 2.5 years. If you allow me first to go back to June 2018 when we established our figures for next 5 years at that time, I can tell you that the team has been working hard. The conditions under which we have been working were not the best. Remember that during the year 2020, we suffered the pandemic; during the year 2022 started the Ukraine war. But including within this environment, we can proudly said that the work of everyone has been conducted in the right direction in order to achieve even to increase the level of deliveries in the main targets that we setup in June 2018. We established four important measures: one was EBITDA; the second CapEx; the third efficiencies on annual operating OpEx savings; and finally, in terms of net debt, as you can see in the slideshow now, all these targets were exceeded confirming that the company is prepared to commit and also prepared to deliver.

If we move now on what happened since July ‘21 when we came to you and explained we were going to be our targets for the next 5 years. At that time, different conditions were having in the market compared to what we have today. No doubt that after the Ukraine war, many plans has been reoriented and some other key measures have been taken by both the European Union and the U.S. that Repower Europe and the IRR in the United States, we have changed completely the environment. Many regulations were incorporated during that period. Energy supply has become part of the key fundamentals of our industry and for the society in general.

Inflation has come back. And together with inflation, higher interest rates, which are changing the macroeconomic panorama for the next coming years. Clearly, the energy scenario has shown a level of volatility much higher than we were used to. And finally, trends towards self-consumption and swapping different sources of energy, has been incorporated today in an equation that didn’t exist before. I may list others on top of that, but we thought that we are enough to make a very clear review of our commitment with the Arizona 2025.

First, we have updated the scenario. The scenario on the energy, which is affecting us not only some of the businesses that are clearly impacted by the figures, but others that may have its consequences in increasing or reducing demand and in swapping from different sources of energy. Together with our regular sources of information we have adapted the newest scenario for the figures I am going to show. And in order to maintain our level of transparency with all of you, we have incorporated all these different figures in the slide that you have in the presentation.

Second, we have incorporated and wanted to highlight again, the role that the company is prepared to play in these newer scenarios. Our role – we based on three main pillars, we want to maintain security of supply as part of our cornerstone of our strategy. And that’s the reason why we continue maintaining a diversified portfolio of sources of energy, gas, and also for generation of energy between nuclear combined cycles, and our big bet on renewables, hydro, wind, and solar. We want to be more sustainable, which is the second part of our equation. We don’t see any future in our industry without reducing step by step, the footprint of our CO2 emissions. And that’s the reason though our plan incorporates a target that by 2025 at least 50% of our capacity will be produced without emissions.

And finally, we are also committed to make our services more affordable for all society. This is the reason that just 6 months before the [indiscernible] was introduced in the level of fixing prices in the market, we Naturgy let the market by incorporating a different type of tariffs [indiscernible] commitment tariffs that were clearly going ahead of the different trends within the industry in a demonstration that our business pretends to be long lasting, and therefore our clients and our customers should feel proud of being supplied by our energy.

The reality is that our vision remains quite wind intact, because within that Naturgy is well positioned to support the energy transition and to contribute imbalances solution for this energy trilemma. If I wanted to highlight the most important things that we are prepared to confirm in our strategy, I will say three pillars. Number one is be aligned with the energy transition respecting our past and thinking on our future. In the sense, one of the most important thing is that our investments will be mainly based in the renewables part of generation of energy, and the adaptation of our grids networks of gas grids of electricity.

The second part of the story is about operations. Operations requires being efficient, and also requires a certain level of technology, leadership, in the sense, efficiency and digitalization form part of the same equation. And we are clearly committed with our clients that they will take benefit of all these different action plans behind a name to be best in class.

And finally, sustainable capital allocation. Since day 1 in by during 2018, we have established as part of our strategy, our financial discipline, in investment policy, we continue having that. And that’s the reason why we have reviewed all the list of potential investments, and how have we clearly erased those, that we’re not mixing our targets of profitability. It is not that we try to reduce the level of investment just because we want to invest to create value. And this conclusion, it will be forming part of the figures I’m going to show now.

In terms of CapEx, we have a commitment to be for the next 3 years of around €10 billion of investment. As you can see, these €10 billion of investment are forming part of the 13.2 that were defined for the period of 5 years, and these €10 billion are belonging to a period of 3, main objectives of this investment planning is number one renewables, mainly generation, including renewable gases, second networks and the rest of the businesses and in particular, the maintenance of the rest of the business, as it could not be on a different way around.

EBITDA today compared to what we had in 2022 may have happened now. Clearly, the scenario is going to affect for the next 3 years as we – as has been described before, by Jon Ganuza, which I will give him the floor to explain more in detail this bridge, but as a consequence of two important things. Number one is the development of our regulatory agreements with regulators in Latin America. And second, the speed of investing in renewables, we are going to compensate these newer scenarios that we have in front of us more realistic, less aggressive, and more stable for the next coming years. I will probably give now the floor to Jon you can explain a little bit more detail. What’s the bridge we have in front of us, Jon?

Okay, thank you. So I think that one of the key things and one of the [Technical Difficulty]. So it looks like technology and me are not on a good footing, so – but well, okay, let’s see, if this works. I think that the figures are more consistent that our technology is so bad. And on the one side, I would say that how feasible and how challenging are the new or the revised figures that we’ve set for 2025. And I think that what we have tried to we hear is something that is sensible. And I want to try to explain how that one has been, so network spend, let’s remind that in the next 3 years, we still have to factor in almost €100 million of negative regulatory effects for the period 2021, 2026. So basically, what we’re doing is so activity, increased activity and increase efficiency, we are making up for the regulatory – to negative regulatory impacts that we have in gas distribution.

In networks LatAm, in 2022, we did have the negative TGN, affecting 2022. And they figure that we’re aiming for in 2025 is basically the same figure that we expect to have this year. And that is after having resolved all of the regulatory periods that are still pending in Mexico and Brazil. In the case of energy management, the decrease that we have almost €0.5 billion compared with 2022. That reflects basically the fact that some of our long-term gas procurement contracts are going to end that also factors in the energy scenario that determine has previously presented. And also in the case of CCGTs, we also see that the production is going to be reduced. As the renewables penetration in Spain is going to increase.

Renewable generation, we do see an increase of almost point €0.3 billion and that’s basically the reflection of the extra 10 gigawatts of installed capacity that we will see in the period. Renewable gases, we think that if there is no change in the current regulatory status, we will see a negligible impact in results by which see that much more is on the upside and anything else. And I think that, in that sense, what we’ve seen in the [indiscernible] that was published by the Spanish government these last few weeks, we do see that this goes in the right direction, though the ambition, we think that it should be greater than the one that there is. And in supply, more or less, we see that the results would be online – in - line with the ones that we’re seeing this year that we think that the contribution from PVB distributed generation, it will be one of the levers that will allow us to improve our results in 2025 compared with 2022.

Thank you, Jon. Hopefully, it has been enough for the attendees to understand but as you said, we may probably have other questions in the Q&Q part. If I follow with our capital allocation, I would like to highlight three important ideas first one is solid cash flow. It is going to be the main source of our uses, mainly driven by solid hypothesis non-aggressive and as Jon has said, clearly compensating upsides with downsides and with a still other upsides to incorporate if they come at all. The level of debt that has increased during the period is low enough to be clearly on the safety side regarding rating agencies level. Second message is clear compensation between CapEx and dividends. These form part of the same story. This is a clear remuneration for our shareholders with a long view, investment CapEx and with a short view, cash collection dividends. In the sense, you can see that two-thirds of our uses are clearly focused on increasing our CapEx, therefore, investing for the future and one-third on the dividend side. Point number three, review of the dividend policy. Back to July 21, we highlighted that by mid-’23, we will going to review the dividend policy for the period depending on the results we may have had in the last 2 years, now is the time and at that time, as well, we fix as an average 85% of payout ratio for dividends in the period. The 1.4 that we are announcing today is clearly based on these two commitments, the commitment of reviewing and the commitment of the 85% payout for the remaining period.

All in these are our best estimates for the year 2025 that are reviewed, compared to the originals that we presented in July 21. Growth in EBITDA, growth in net income, same level of CapEx just erasing those projects that were not performing or they are not achieving the minimum target of returns, high dividends, less debt, and maintaining FFO, net debt ratio that for the rating agencies is the security of remaining at the same level of rating as of today.

Thank you very much, Dan, for this first part of this presentation. And I will hand over to Steven to conduct the second part of this presentation.

Thank you very much. Mr. Chairman. I think we are ready to take live questions from the conference call. So we do ask please, that you identify yourself and the company for which you work. And as a reminder, the press should refer their questions to our communications team. Thank you.

Thank you. [Operator Instructions] Our first question comes from the line of Jose Ruiz from Barclays. Your line is open please go ahead.

Hey, good morning, everyone. And thanks for taking my questions. I just have two. First of all regarding the target of EBITDA above €5 billion, how much are you including of the reversal of the provision? Second question in terms of hedging 2024, how determined and is what gas prices do in the second half of this year in terms of commercial activity? Thank you very much.

So, thank you very much for the question. We are not disclosing the figure regarding the inefficiency of the hedging. So therefore, we are not going to give a exactly which is the figure that is included in the guidance that Steven has given regarding 2022. And regarding the hedging of 2024, I can say that for the – our LNG cash procurements, the level of procurement, they have hedging that we will have in next year is more or less in-line with the one that we have this year.

Next question, please.

Thank you. The next question comes from the line of Javier Suarez from Mediobanca. Please ask your question.

Hi, good morning and thank you for the presentation. The first question is on the capital on the CapEx guidance. During the presentation the company has mentioned €10 billion of CapEx in the next 3 years. That means a significant acceleration for the level of an oil CapEx that the company is implementing as we speak. So you can help us to understand how the company intends to accelerate so significantly CapEx versus Q3 versus recent delivery. That is the first question. The second question is on the bridge of EBITDA between 2022 to 2025 I think that the putting a long history short – we can the message is that the companies need to invest more on renewable energy and it’s going to extract more value and growth from that activity. And that is compensated by the decrease in the energy management business because of the normalization on energy prices. So, it is fair to say that you are considering that the profitability that you have seen on that energy management business in 2022 and probably 2023, you are assuming that is going to be sustained at least by two-thirds by 2025? Is that the thing that you are saying? I am referring to this because the profitability in last 2 years has been in excess significantly higher than what history is telling. And you can elaborate on why that assumption should be seen as conservative enough. And then the final question is on the cash flow statement, that is a question on the positive contribution from working capital that we have seen during the first half of the year, you can help us to understand the reason for that and what you are expecting by the year end? Thank you.

So, thank you very much Javier. The first question regarding the CapEx guidance, it’s true that we see a level of acceleration. But I think that’s one of the messages that we have tried to stress in the past is that what had happened with our renewables investment is not so much that we have canceled it, it was that we had a rebalance it that we had delayed it. We all know that this past 1.5 years, 2 years they have seen a substantial increase in the unitary CapEx of renewables. So, that means that in order to be compatible with the strict financial discipline that we have, what we have to do is we had to work with the existing projects that we had, be it either with a PPAs renegotiating them, or they renegotiated and already signing them. So, what we have seen is basically that a substantial part of our projects have been delayed. And we think that these projects will be – were already in built. And that’s why we think and we are confident that in these next 3 years, we will be able to deliver the level of CapEx that we have announced in the revised and rebuild a strategic plan for the next 3 years. Regarding the profitability of the gas business, I think that actually what we are seeing is that already this year, the profitability of the gas business is almost the same as last year, as we said, if we take outside the list in the first half of the year. And if you remember, in the page where we showed it was that the results were going to be almost €0.5 billion lower than the ones that we saw in 2022. So yes, we see that with a normalization of the gas prices, the margins would somehow decrease and also the volumes that we are going to have, they are going to be lower. But I would also like to point out that last year, when the prices started going up, we were not necessarily reaping all of the benefits that we should be reaping because part of our business, part of our sales contracts were indexed to gas prices that were much lower than the as podcast prices. So, I think that the overall picture is not so clear seeing that it has been a huge increase and it’s going to be a huge increase. I think that there was a bit of an increase last year and what we will see is that slowly we will see a reversal to a normal in the next few years. And regarding working capital, working capital this half of the year has been substantially lower than last year, and also is because the overall revenues that we had had been substantially lower. I think that by the end of the year, still remains to be seen. But we think that maybe will be not shown as positive as we have seen this half of the year, but it should be at any rate positive.

Is there any additional question online?

Thank you. The next question comes from the line of Manuel Palomo from BNP Paribas Exane. Please go ahead.

Hello. Good morning. Thanks for taking my questions. So, first of all, I would like to start with renewable. And in the new guidance that if I am not wrong is quite decent downgrade to 10 gigawatts. I wonder in what areas are you planning to reduce your installations? Also, you mentioned that there has been obviously an increase in installation costs. I wonder whether you could you give us a hint on what is your view? Where do you see them landing now at least for PV and onshore wind? And also I wanted to ask you something on CapEx, I mean the coming 3 years of ‘23, ‘25, you plan to deploy around €10 billion CapEx? I wonder whether this includes an additional inorganic opportunity other than the one that you have announced while a few weeks ago, I think I was in Spain. And lastly, I guess that deliberately. the word Gemini is not in the presentation. But I wanted to ask you about where we are on the Gemini project, whether this is still a valid option, and whether of course, there is any adjustment from yesterday’s election outcome on the potential success of that project? Thank you very much.

Thank you, Manuel. I will try to answer the last two questions and Jon will jump in details on the first two. On Gemini very, very simple and very clear. Again, as we have said, since we introduced the idea of Gemini project into the market is number one is makes industrial sense. It had made industrial sense since the beginning. If it wouldn’t be the other way around, we will never have introduced that. Number two is the figures you have seen for ‘23 to ‘25 confirms the feasibility of the project. Of course, the company has been continually working towards that, demonstration is the level of reporting that you have seen including with the organization that is in place demonstrates that in reality, we are already working as two companies within one group. Too early, still too early to fix exact dates, because we are analyzing all the implications that may interfere for all the different alternatives. And as soon as we have more clarity on that, of course we will disclose them. On the investments on non-CapEx, but M&A included in these figures, I can say very clearly zero M&A is included in any of the different businesses. We are as we were in 2021 including an hypothesis with this non-M&A will be introduced in our figures. We were just purely opportunistic, not obliged to achieve any figure and the figures that you have in your – in the slides are not included M&A. And the company is not working with any project in M&A for the time being.

Thank you, Manuel. And regarding where we expect to grow in renewables, I think that we do have a strong position in Spain, Australia and the USA. We have organic portfolio of projects. And that gives us enough visibility in order to get confident with the target that we set ourselves for the next 3 years and to achieve that increasing 10 gigawatts initial capacity. I think that, as the Chairman has said, there is no need for any inorganic or any acquisition, just with a current portfolio of organic projects and taking into account the level of development that we have in most of them. We do see ourselves that unless there is a substantial or disruptive change, we should be able to do that. Regarding the unitary CapEx, I think that it’s a bit more complicated to give up you what’s happening there, why because as some analysts analyze the evolution of the unitary CapEx in real terms, I think in real terms, we are seeing that for example, in PV, costs are already starting to go down. But in nominal taking into account that the inflation this past 2 years has been substantial, the figure has changed completely. So, I think that we are seeing no manifestation in real terms, but I think that inflation is also taking a toll in the nominal unitary CapEx. But I think that the most important thing is not so much, how much higher or lower the unitary CapEx have been. I think that the important thing is whether we have been able to adapt the existing portfolio of projects that we have, read on the revenue side or maybe on the cost side in order to make them be able, so that we are able to create value, and so that they meet our financial discipline guidelines. And I think that that’s what the team has been working really hard this past 2 years. And I think that although that has meant that some of the projects have been delayed, I think that we see that we were able to deploy those projects creating value for the company within the next 3 years.

Okay. I think we have some questions coming from the webcast, so Manuel?

Yes, most of them have already been answered. Nevertheless, we have some of them. First is what is not to discuss Porsche doesn’t take care for the Jamal LNG in terms of volume, that commitments of destination clauses. Is there any pressure from government or any ESG sensitive investors to cut volumes from Jamal?

As the government norms – well, our commitment with Jamal as an off-taker of LNG gas was signed many years before the Ukraine war started. We have just been performing our contract as per it is written. We haven’t taken any additional volume. And of course, we are obliged to continue being supplied by the Jamal until there will be other obligations, legal obligations or decisions by the responsible authorities to stop them.

Okay. Some other questions about the strategic plan, first is about international LNG, should we expect Naturgy to reassess the size of its international LNG portfolio. With higher LNG volumes coming into Europe in the new energy scenario, what should we expect from Naturgy?

Naturgy is a key player on LNG. We have quite a calibrated portfolio today. We are not planning to increase our exposure to LNG, but we maintain our contracts as flexibility considering that in the future, some of the contracts that today are in place are finishing between ‘25 and ‘27. Therefore, the position of Naturgy is quite safe in order to be self supplied for the coming years, but with no name to increase the exposure to this market.

Okay. Then we have two additional questions, one for LatAm, the other one for renewable gases. LatAm portfolio, do you see opportunities to this post some of your assets in generation or gas networks in LatAm. And in referring to renewable assets, can you elaborate on the business case for renewable assets and the internal rate of return target.

In terms of asset disposals, we have been also very clear, not in LatAm, but in general. We are industrial players that run our industrial assets and we are not close to consider any opportunistic opportunities, sorry for the redundancy, that it may arise. In between, we should continue be running our assets as we are and our commitment is as long as these assets or these concessions are alive. In this sense, biogases in particular biomethane, we consider is that’s a very important opportunity for the short-term future. Everyone speaks about hydrogen, which we consider that it will be for sure, but more the mean-term, but we have an opportunity next to our door in biogases where we want to be an important player. And we are targeting returns at the same level that other investment in our domestic market, in particular, in Spain, which are clearly double digit.

So, if I may build on to what the Chairman has just said, I think it’s worthwhile. When we think about renewable gases, we are thinking about both biomethane and hydrogen. And as the Chairman expressed, it’s true that we see a trend where everyone focuses on hydrogen, but the reality is when we look at the growth curves for biomethane, and compare them to hydrogen, at least until year 2030, there is a significantly faster growth from biomethane. And we like that idea because we think there is also going to lead to some regulatory push is going to be critical for the full development of this. What’s important when we think about biomethane is to remind you guys that we have the largest portfolio in Spain for development right now with more than 60 sites. We believe we have an enviable position and a natural position to commercialize this gas. And we also have the clear capabilities to build and operate not only plants, but also connect those plants to the network. And all-in-all, when we think about the returns, obviously subject to the size of the investments and the size of the plants, but we are thinking of in terms of project IRRs high-single digits, which makes them quite attractive.

Okay. Final question, you say annual dividend revised to €1.4 per share for 2023, ‘25 is subject to maintaining a BBB rating through the period. Does that mean that if your rating comes under pressure, will you reduce the dividend or will you reduce CapEx?

We have an industrial plan and I think that we have shown also the metrics that are clearly driven the rating BBB level on the Standard & Poor’s that we have fixed. For those which are not aware of these rating FFO net debt should be above 18%. As you can see, it is above 21%, which demonstrates that there is still room for certain turbulences and the rating is quite warranted. Having said that, review in the dividend policy based on an important change on the FFO or net debt, which may be the case if it arises. It will impact in a global revision, not only on CapEx or on dividend. I think that after what we have shown before regarding our level of delivery of our commitments, you know well that we also play with solid figures. And for the time being, we don’t see any reason to be worried of.

Again, to build on the Chairman’s comments, for us the rating is very important for the normal conduct of our businesses. It’s also very important in the context of Gemini, I think there was a question about Gemini before. So, rating in the context of Gemini is critical for us. And we target a BBB for both companies. As the Chairman mentioned, we expect and we have no reason to believe that we can maintain a BBB rating through the period to ‘25. But should that for some reason become compromised, then it’s a company’s commitment to do whatever it takes to make sure that we comply with that objective of BBB. So, that could be in the form as the Chairman mentioned of reducing the dividend, which would probably be one of the first things to look. We have to take a look at the CapEx as well, etcetera. So, there is a number of instruments that give us complete flexibility in terms of making sure that we maintain the BBB rating, which is absolutely important for us.

Okay. Well, that was the last question. So, we want to thank you again for joining today’s presentation. Just as a reminder, the Capital Markets team remains available to answer any further questions you might have and nothing more on our side. Thanks and have a good day.