Hello everyone and welcome on ČEZ Group presentation of results for 9/9/2024. It is my pleasure to welcome Martin Novák, Chief Financial Officer, and Pavel Cyrani, Chief Sales and Strategy Officer, who will walk you through the presentation, and then we will follow with a Q&A session. I'm handing over to Martin. Good afternoon, good morning everybody. So let's start with slide number three, with financial highlights of the first nine months of this year compared to last year. You can see that our operating revenue is 1% lower. EBITDA, which is an important number, is actually CZK 5 billion, or 5% higher, and we reached the level of CZK 100 billion. Operating income is slightly higher, 6%, basically copying EBITDA. Our net income and adjusted net income are 21% lower compared to 2023, adjusted net income reaching CZK 24.8 billion. Our CapEx is higher by almost CZK 7 billion, or 25%, with details provided actually in the backup. Operating cash flow is lower, mainly due to high inflow of funds from margining, where we were getting actually a lot of funds back from the power exchange as a result of delivering the power, the electricity, and getting margins back in 2023, which is not the case, of course, in 2024. Our financial outlook for the full year, we expect EBITDA to reach 126-130 billion CZK. Here we are actually significantly increasing our guidance, as you will see later, and net adjusted income should reach 26 billion-30 billion CZK. When we look at the next slide, slide number four, you actually see the main differences between EBITDA of 2023, first nine months, and 2024. In total, CZK 5 billion. By far the largest item is actually levy on revenues above price caps that was in place in 2023, and is not in place actually in 2024, which is CZK 8.5 billion, which is the vast majority of the generation segment, actually positive variance. Then trading negative 4.1. It's mainly by the lower income from prop trading compared to the previous year when volatility was significantly higher than this year. We are still actually above our expected or planned revenue, and so far the income has achieved CZK 4.4 billion on trading activities. And then we have revaluation of derivative transactions and hedging generation. So this gives us negative CZK 4.1 billion. Year-on-year mining activity is CZK 2.5 billion lower, mainly due to lower sales to external parties and also offtake from our own power plants, both due to warm winter at the beginning of this year and also lower demand for coal due to market conditions, then the distribution segment is positively benefiting from a few factors. One is actually inclusion of GasNet Group, which is gas distribution in most of the Czech Republic that we acquired as of the beginning of September. So there are numbers for one month only included, and this is CZK 700 million, then we had a high negative correction factor in our Czech distribution in 2023, which was CZK 1.5 billion negative, meaning if we don't have it now, it means it's a positive variance, and then we have other effects of CZK 700 million in distribution, mainly higher investments in distribution assets. Sales segment is 1.3 billion CZK lower, mainly due to lower margin from electricity sales to end customers due to higher purchase prices. Then on the next slide, we can see actually main changes in year-on-year net income. In the morning, we had a few questions actually on a change of net income of 21%. There are a few factors that are hard to predict or hard to model. One of them is the lower level of cash that we had actually in 2024, mainly due to managing cash that we received in 2023 from margin calls, and at that time, there were also much higher interest rates. So having free cash and high interest resulted in higher interest income. Now, for the same period of time, with lower level of cash and lower interest, we are 2 billion CZK below 2023. We have also some exchange rate and revaluation of financial derivative effects. And the important section is also relating to depreciation and amortization, negative CZK 1.3 billion coming from 500 million from depreciation of GasNet, which is again a September number. And then we have higher depreciation at CEZ distribution grid due to higher investments actually into connecting of our customers, and we have somewhat higher 200 million depreciation of nuclear assets. We have also a revaluation or higher deferred taxes in 2024. We actually decided to accelerate depreciation on coal assets, which you cannot see actually in those numbers because this is happening as of October 1. But we have to calculate deferred tax that will be a result of faster depreciation, basically copying both lifetime and also utilization of our lignite assets towards the end of between today and the end of 2030. And the effect of deferred tax is relatively higher because our tax rate for next year is at about 81% due to windfall taxes. And it will be significantly dramatically lower in 2026, going down to 21%, where all those charges might be actually somewhat reversed depending on accounting rules. And that's the main kind of change in the net income. On the next slide, you can see actually updated guidance. We listed our guidance from the range of 118-122 billion CZK to 126-130 on EBITDA, which is a relatively significant move, but we have a good reason. And it is for a big part, including inclusion of actually a GasNet Group in CEZ Group. And as of September 1, we expect about 4 billion CZK to flow into our numbers on EBITDA levels. We also had better trading results than originally planned, which is adding 1.5 billion CZK. And we also finally won the litigation with the Czech Railway Administration for electricity. They have ordered, but finally did not buy or take in 2022. So now they are actually, after 14 years, we are paying just 1.3 billion CZK as a lost profit plus interest of that time. That's the main driver. Then actually, adjusted net income is basically staying flat with moving actually the bottom side of the range from 25-26 billion CZK, mainly due to, as I said, higher depreciation and also higher deferred taxes. And those are basically the main drivers. You can also see some general assumption on the power prices and estimate of our windfall taxes of being 29-33 billion CZK for the full year 2024. On August 28, we actually finalized the acquisition of a 55.21% of stake in GasNet, which is the biggest Czech gas distributor. We actually fully consolidated the company starting September 1. You can see actually on the map what kind of area this company is covering. Very much the same area as we are covering in distribution of electricity, with the exception of South Moravia, where we don't have electricity distribution, but we do have gas distribution now. We have all the volumetric numbers about the size of the company and all the details actually on that slide. On slide number seven, what is important to notice actually, it is just to provide you rough guidance, the company is making on average around 10 billion CZK EBITDA as it is a regulated business and about 4 billion CZK on net income. So this is something we can, especially on EBITDA level, expect in our numbers going forward. Another important section is on slide eight. We actually became a strategic, or we will become a strategic shareholder of Rolls-Royce SMR company, which develops small and modular nuclear reactors. We are now waiting actually for the regulatory approvals. We would acquire a 20% stake in such a company, and it will allow us both not to be only a customer of the future Rolls-Royce SMR product, but also be on the side of somebody who will be able to integrate our know-how from our few nuclear businesses that we own that already are now very active in actually nuclear development for other companies. And we are also able to attract production of nuclear parts actually or modules for modular reactors. We own Škoda Jaderné Strojírenství, which is Škoda Nuclear Engineering in translation, that is already now actually a maker or producer of parts for the nuclear power plants. So we would expect to actually be included into the value chain of Rolls-Royce SMR team and supply team and benefit on both sides as a customer and also as a supplier or sub-supplier. Then another big news actually as of yesterday, we signed a deal with Polish to sell actually our Polish coal assets to a Czech company, ResInvest Group. We signed it yesterday evening, late evening. So fresh news. We were trying to sell our assets from 2019. Had a few, gave it a few tries. This time it was successful. And we actually started on March 26 of this year. Totally, we sold six companies, but mainly it's about two power plants or heat plants in Skawina and Chorzów in Poland. They are hard coal plants delivering heat to municipalities as well. We received there was quite a high interest actually. And then we boiled it down to seven binding offers, and four of them were actually moving to the final round. And then we chose the best offer. The transaction will be closed after we receive anti-monopoly approval from Polish monopoly office, anti-monopoly office, and do some technicalities on transfer of the ownership. We expect this to happen actually in the first quarter of next year. And at that time, of course, we will book any income that will arise from that transaction and also provide details on the valuation. So I think this can be treated as a success of our M&A team. We are on a good path with our decarbonization efforts actually. Other selected events of past quarter are listed actually on slide 10. Just very briefly, on September 13th to 16th, the Czech Republic was hit by severe flooding, especially in the northern and southern area of the country. We managed to take care of everything, and basically, with a few exceptions, all the electricity is connected. Actually, all electricity is connected back, and there are just a few customers without gas connection. We assume to make sure it all works by the end of the year. We also received or won the court against Czech Railway Administration, which I already commented on. There is a boom of connecting actually generating facilities, mainly photovoltaics. We connected for the first nine months actually 42,000 generating photovoltaics, 42 generating facilities, and 40 of which are actually photovoltaic power plants, mainly on the roofs actually, both of the companies and also households. That's basically those are the news. Now we will switch to the generation and mining segment and very briefly go through it. Our total generation and mining segment is up by CZK 2.2 billion. Zero emission generation is up by CZK 18.1 billion, mainly caused by the fact that there is no actually levy on revenues above price caps. That was only applicable in 2023 and not 2024. That's why you can actually see the big effect on nuclear assets. Emission-generating assets are down by CZK 2.9 billion, bringing CZK 10.7 billion into our earnings. Again, the same, there is a little effect of the levy. Then basically a few other factors. The biggest discrepancy or difference is actually about CZK 2 billion that relates to lower revenue from ancillary and regulatory energy services. Trading down by CZK 4.1 billion, as I already commented on. Generation segment in total then CZK 4.7 billion plus. Mining CZK 2.5 billion negative due to lower demand for coal. On the slide number 17, you can see actually a chart of the renewables and nuclear generation. We expect to be down by 3% on nuclear facilities, mainly due to lower availability of the Temelín power plant and somewhat higher on the renewables, mainly Germany and solar and also new photovoltaic plants to be operating. On electricity generation from coal and natural gas, the overall number is expected to be 3% below. Last year, 17 terawatt-hours decrease on coal assets by 3%. Then there is a decrease in Poland, 19%, mainly due to lower deployment of, which is reflecting market conditions. But understanding that those are mainly heat plants, they also had lower heat sales actually during the very warm winter of 2024. And there is an increase of 6% in gas generation. Important slide 15, it's actually hedging of the market risks. We are selling electricity, as you know, three years ahead. Now actually we sell 2025, now available even 2028. So we are 80% hedged for next year, almost 50% 2026, going down to 5% for 2028. And as we sell, as we hedge the power made from lignite plants, we actually hedge carbon credits, and they are actually shown on the right side of the chart. So I think that's all for generation mining, and now I will hand over to Pavel to guide us through distribution and sales segment. Well, thank you, Martin. The main highlights were already mentioned, but let me go through it in more detail. On the distribution, we see a year-on-year growth of CZK 3 billion. On the GasNet side, obviously, it's a new addition to the group. On the lower half of the page, you see what would be the year-to-year difference for the GasNet as if it was consolidated the whole year. The main two drivers behind this growth are the same. One is there is a quite significant investment going into both networks as a part of the transition of the Czech energy sector from coal to gas and renewables. So new connections of all kinds. And secondly, in both cases, the year 2023 was impacted by negative correction factors from 2021. So that's one of the things. In terms of consumption, we still see a slight decrease in consumption, but it's kind of leveling out. It seems that the savings on the customer-consumer side have been exhausted, and we actually expect to see more growth, again, in line with the transition from coal to electricity and gas in the coming years. In terms of the sales segment, although there is a drop on the Q1 through Q3 numbers between 2024 and 2023, in general, we see the business going well. In terms of the retail, these are kind of one of the things that are reflected in the fluctuation of purchasing and selling and pricing electricity, but they typically even out in the full year. In terms of the B2B segment, the energy services ESCO activities in general are growing. We see a drop in the commodity sales, but that was driven by more of an extraordinary profit on procuring renewable electricity in 2023. That was one-off window of opportunity. Again, I think 2024 is the year when kind of the one-off factors still spilling over from the energy crisis are kind of phasing out, and we are expecting basically a somewhat steady growth in the years to come. In terms of the volume of electricity and gas sold, I guess two factors. One is in line with the overall drop in electricity and gas consumed. There is a drop. On electricity, there is a one-off drop to be seen between 2023 and 2024. Again, as a part of the consumer behavior during the crisis, there was a segment of few consumers which are typically not retail, but they switched to our retail company during the crisis. They had three-year contracts which expired now, and they are moving to the B2B sectors or ESCO and other B2B suppliers. There is a more significant drop in the electricity and gas sold, not in line with the number of consumers. But again, this is a one-off thing, and we expect then the electricity and natural gas supply to go in line with the overall consumption in the country. Energy services in general going well. Obviously, companies still working on switching from coal and other more CO2-heavy technologies into electricity and gas, and in general, trying to save energy. So the energy services focused on providing renewable electricity on-site generation and efficiency in general are in high demand. And that's all. And obviously, I'm handing back to Bára. Yes. Now we are ready for your questions. Just raise your hand in the teams, and I will call your name out. Okay. We have the first question from Arthur Sitbon. You can unmute yourself and go ahead. Hello. Yes. Thank you for taking my questions. The first one is on the guidance for 2024, specifically at net income level. I'm trying to understand the moving parts for the fourth quarter of the year and if there is anything exceptional happening for the group in Q4, potential negative one-offs. Because I've noticed that to make the midpoint of the net income guidance, so CZK 28 billion, you need only CZK 3.2 billion of net income in Q4. Yeah. So I was wondering if there was anything negative. I understand the accelerated depreciation on coal, but isn't there a very high tax shield on that? Well, given you have a 60% windfall tax, any thought on that can help? And the second question was on your networks business. I was wondering if you could provide any thoughts around the upcoming regulatory review where you see the allowed return evolve in the coming review, and if that could also be an opportunity to accelerate CapEx there even further than what is planned at the moment for the business. Thank you very much. Okay. So I'll answer the first question, and it is actually related to net income. What you don't see is actually CZK 2 billion accelerated depreciation that will appear in last quarter of 2024. Sorry. So you only see the effect of the deferred taxes, but not the depreciation itself. So this is apart from many other parts what's there. And there will be also GasNet depreciation, which will be around in total about CZK 2 billion. So mainly depreciation area apart from what has been already disclosed actually today. And this is why all those items are actually hitting net income, but not EBITDA. This is why despite the significant increase of EBITDA, you don't see much actually happening in net income. And plus, there is another issue, and it is the windfall tax with taxation where it is CZK 1 billion made actually on ČEZ level does not fully translate to net income. So that's what it is. And now regulatory. Yeah. There's actually just right now a public consultation process running for the sixth regulatory period, which starts January 1st, 2026. So a year a little bit from now. Already in this public consultation, the proposal by the regulator is ultimately 7.9%, which is 6.9 plus 1% of bonus for reaching a certain level of investments of CapEx. But at the same time, we still make the claim with the regulator that this is not enough and that the overall WACC should be still increased in light of the situation on the market. And we hope we will succeed. At the same time, the decision of the regulator will be eventually made by 28th of February, 2025. So that's the time we have to negotiate with the regulator. Thank you. We have the next question from Anna Webb. Yes. Hi, Anna Webb from UBS. Thank you for taking my questions. Firstly, a question on sort of this year's guidance, but also going forward on GasNet. Obviously, you've given the guidance of roughly CZK 4 billion contribution expected to EBITDA level from GasNet. But can you talk a bit about the net income impact? I mean, I know there are some other effects that you've just spoken about for this year, but maybe you could talk about the overall impact on net income that you're expecting from GasNet. I think you gave some guidance on the standalone, but you also obviously have higher financials and minorities. So anything you can give us kind of this year and going forward on that. And then secondly, a question on the taxes. I think you have this deferred tax impact that you talked about, and I think I saw some headlines that that might swing back the other way. So if you can give any details on sort of the movement and timing there, and then the impact of GasNet also on taxes, because I assume particularly on the windfall tax, you'll have a higher reference base for the profit before tax. And so I wondered if that had a sort of impact on your windfall tax rate and if there's anything you can tell us about, for example, for next year, what you might expect about the overall effective tax rate you might see. Thank you. And also actually regarding GasNet EBITDA, as I said, so net income actually for 2024 should be positively impacted by about CZK 700 million from GasNet. EBITDA: CZK 4 billion. Overall, actually GasNet makes about CZK 10 billion EBITDA annually and about CZK 4 billion net income. And what will actually be flowing into our numbers on the consolidated numbers on consolidation level, it would be around CZK 2 billion as it is described on slide number seven. Actually, you can see that there is also expense for about CZK 2 billion a year due to depreciation of the value of GasNet at the consolidation level. The assets value is adjusted to market value in consolidation, whereas the book value of GasNet is historical numbers. So you can expect about CZK 2 billion net income annually and CZK 10 billion on EBITDA level from GasNet. Then you asked about the deferred tax. If I understood correctly, swinging back, deferred tax is a really complicated calculation. We have hundreds, thousands of asset items actually in our books. But very simply said, now actually we have to take this charge due to high so-called, I would call it tax shield, which is not really a tax shield because it only relates to the year 2025. In terms of 2026, it will go actually down back to 21%. So that this tax shield will be again one-fourth of what it is today for the newly added depreciation of the power plants. So that's basically, and the impact will be seen only probably in 2025 and later when the future tax rate will be only 21%. So this is temporary thing. And that's it, I think, right? I think we answered everything. The impact of GasNet on windfall tax in general? There might be some impact. We are now assessing it. They are now part of the group, and it might actually have an impact probably reducing the tax, but very little. So that's why we actually provide a range of 29-33 billion CZK, and this already includes possible effect of the GasNet. Okay. That's helpful. Thank you. We have the next question from Piotr Dzięciołowski from Citi. Hi. Good afternoon, Bára. I wanted to ask you a couple of things. So first one is about your 20% stake in the Rolls-Royce. Can you please tell us what is your financial commitment to this investment and what is the possible schedule of rollout of these reactors and how you will be involved in this project? So that's the first question. And second question, I wanted to ask you about the early shutdown of lignite. Do you think that's possible? And what is the current timeline and how that compares with the possible profitability that is still maybe in the black until this time? Probably, would you agree that in the next two, three years, these plants may have a problem economically to generate cash flow? Thank you. Regarding Rolls-Royce, actually, we just entered into the transaction. We still, I think, don't disclose the details until it is done, until the transaction is actually closed. We are waiting for all the regulatory approvals, and only then we will comment in more detail. Now, Pavel actually on Lignite. Right. Look, we are looking into how to best operate the Lignite stations. It is clear that they will be more and more operated and profitable in the winter and less so in the summer. We can probably expect the number of operating hours to go down. At the same time, whether this will be offset by the increased prices in the winter, this is to be seen because obviously, we all have been used to looking at the base load prices as some indication, which is in fact the indication. But at the same time, you have to see the base load price as an average of prices close to zero in the summer and then very high prices in the winter, which the Lignite stations can still operate in. We will also look at how to optimize the supply of the Lignite to the individual stations because the main fixed costs do not come from the stations as such, but rather from operating the mines. And this is something that we will look into over the next months to see how we can operate them profitably as long as possible. Okay. Thank you very much. It seems we do not have any questions, so I'll give another couple of seconds for people to ask. Okay. So we have a next question from Ali Abbas. Yeah. Hi. Just a follow-up on the previous question around the Rolls-Royce acquisition. I appreciate you haven't disclosed the details, but just can you remind me what the financial policies are when you think about M&A and what sort of leverage you want to keep within when generally you're thinking about M&A? And I presume this transaction would follow the same sort of guidance. You mean financial leverage or you mean managerial leverage over the company? Financial, please. Well, our financial leverage overall for the business is around 3.5x net debt to EBITDA, mainly due to ability to increase this from 2x because of acquisition of GasNet. But not sure whether this is what you are asking for, actually. And so that's it. So you're currently at 1.5 times EBITDA, which you're saying is your target is to stay below 3.5 times? Yes. But we have quite a lot of CapEx ahead of us, so. Yeah. The main CapEx outflows for the years to come is not from acquisition. This will be minority. Most of the CapEx ahead of us is basically in rebuilding our combined power fleet from coal to gas, investing into the grids, investing in the backup power, new renewables, storage, and so forth and so on. Okay. Thank you. So you have the. We have a follow-up question from Piotr Dzięciołowski. Yes. Thank you for the opportunity to ask a follow-up. I wanted to ask you, can you please remind us what is the asset lifetime for your nuclear reactors? Because one is old, the other one is new. And just wanted to understand whether you can extend it and for how long these assets can operate. Right now, we are looking at at least 60-year lifetime, but obviously, we'll be also examining ways even beyond 60. Right now, the way it is licensed, there is no time limit to the operation. The way it's done is that we have to undergo a review every 10 years, and as long as we are successful in this review, we can operate another 10 years, and this can continue as long as we can succeed in the review. Do you think there will be an elevated CapEx for the kind of to get a next 10-year extension? How do you think about the normalized CapEx level for your fleet? Well, there is obviously CapEx related to the maintenance of the fleet. I don't think we are ready at this moment to give you an outlook for a levelized CapEx over 10 years. But generally speaking, it is clear that whatever CapEx is to be spent actually on keeping the current plants running is probably the best investment you can make because of the profitability of the nuclear power plants. Yeah. True. Okay. Thank you very much. Yeah. We have the next question from Petr Bártek. Good afternoon. Thank you for taking my question, only one. If you can provide an update regarding the negotiation about the financing for the second nuclear unit in Dukovany or more in general, whether there is any development on the European Commission level and so on regarding the project. Thank you. There is a discussion going on. As you know, we have an approval from EU for the financing model of the fifth unit, but not the sixth unit. So this is in the hands of the Ministry of Industry. Basically, the assumption would be that this model would be similar or identical as to unit number five, but it needs to be notified with EU. There is basically and that's it. There is no news on that end. Thank you. Next question from Robert Maj. Yes. Hi. It's Robert Maj from Ipopema Securities. You mentioned that you want to undergo the significant CapEx of changing coal heating plants into CCGT, as far as I understand correctly. Can you provide us with any kind of estimates? What kind of CapEx, I don't know, per megawatt you can expect in this process? Or in bulk, what kind of numbers we are speaking about? Thank you. Look, when we look at the current extent of the plan, we are looking at somewhat around CZK 70 billion in terms of heating stations. Now, it's difficult to recalculate it to CapEx per megawatt because typically what we are going from is a large lignite station into a mixture of simple boilers without electricity production and gas, then combined heating power coming from biomass, also gas, sometimes even boilers fueled by electricity and heat pumps. So it's always a combination of these devices which are tailored to that specific location, specific needs of the customers on the site. We have a follow-up from Petr Bártek. Yeah. One more. Last time, on the last call, you discussed the preparations for some support for capacity payments or whatsoever for CCGTs, so not heating plants, but for new gas-fired power plants. Is there any progress or something that you could share with us? And maybe your plans for the gas power plants, not CCGTs, but power plants. Okay. Right now, what we observe is that currently the so-called Lex OZE III in Czech, which is like Lex Renewable Number Three, whatever, which is like a comprehensive update of some of the energy-related, electricity-related legislation. It contains newly the possibility for the Ministry of Industry to install a capacity market. Obviously, without the details of such capacity market, it just gives the right to the Ministry to do it. So we expect this to be after this package is approved, which I hope will happen either at the end of this year or beginning of next year. Then the next step is actually designing the actual capacity market and also notifying it with the European Commission. Now, when this is finished, we have projects ready, basically, at all our current lignite sites at around 1,600 megawatt worth of electrical output. Obviously, if we will do all of them, some of them, it will all depend on what the capacity market will be and also what the if there will be auctions, for example, what the demand, the requested capacity output, electrical output will be from the Ministry. Thank you. Okay. We do not have any further questions, so I will conclude this call here. But as always, investor relations is ready to continue the conversation right away. Okay. Thank you for the participation and goodbye. Goodbye.