Hello, everyone, dear analysts and investors. Welcome to our Q1 2023 financial results call. Thank you for taking the time to join us. Today, I'm here together with our CFO, Marc Spieker, who will give a brief update on our financials. As always, we will leave enough room for your questions after the presentation. With that, over to you, Marc. Thank you very much, Iris, and a warm welcome as well from my side. Looking at our Q1 results, let me highlight three messages. First, we have seen a strong financial and operational Q1 in both our business segments, Energy Networks and Customer Solutions. As you would expect, this performance was driven by investment-backed organic growth as well as solid business execution in volatile commodity markets. In addition, we have seen positive timing effects that I will elaborate on later. Second key message, we confirm our 2023 outlook. We still keep a cautious stance on our assumptions. For our investors, this means we will deliver financially independent from market volatility or even a resurgence of the energy crisis. Third message, the energy transition is accelerating. Our CapEx program is ramping up as planned. This fully underpins our five-year green growth program and all of our midterm pledges. Let's start with the details of our Q1 results. Our adjusted EBITDA came in at EUR 2.7 billion, roughly EUR 900 million above prior year's Q1 core EBITDA. In our Energy Networks business, growth came from CapEx-driven RAB expansion in all countries, as well as an accelerated recovery of network losses in our European business. Additionally, we are seeing temporary upside from significantly lower than assumed commodity prices. This commodity-related upside is specifically related to the so-called redispatch cost in our German networks business and is ultimately a passthrough item for our P&L. As usual, the passthrough comes with a time lag. Fundamentally, redispatch costs are driven by the need to curtail volatile renewables production in times of network congestion. In case of curtailment, DSOs provide financial compensation to affected producers based on actual market prices. The DSO's cost for this compensation is nevertheless ex ante covered by the network tariffs. Any mismatch in the tariff assumption versus the actual outturn will be balanced via the regulatory account with a time lag of T+3 and then spread over 3 years. Economically, all of these effects are neutral. The network tariffs for 2023 were, for obvious regulatory reasons, already calculated beginning of the Q4 in 2022. We assumed much higher wholesale costs than those materializing year to date. This has led to materially positive Q1 impact. Let me stress that the final impact for the full year 2023 will depend on the weather-driven outturn as well as the development of wholesale prices during the remainder of the year. It's gonna be a volatile effect. We will keep you posted as the year progresses. Moving to our Customer Solutions business, where we achieved an adjusted EBITDA of EUR 4.8 billion. This EUR 400 million year-over-year increase is largely driven by a normalization of our retail margins after a particularly weak Q1 2022. It is worth mentioning that we returned to the positive earnings territory also in Romania because regulatory conditions have normalized. On top, we achieved procurement optimization gains in Germany and the Netherlands in the low triple-digit million EUR area. As announced, we stopped reporting a non-core segment. The remaining contribution from our German nuclear operations in 2023 is being disclosed now as part of our non-operating earnings. The corporate functions and other segment slightly improved year-over-year, largely because the segment now includes the Turkish generation business, which formerly was reported under the non-core segment. Our adjusted net income, shown on page 4, shows an increase fully in line with our adjusted EBITDA. Notably, the economic interest result in the Q1 is still in line with prior year. Higher refinancing costs were still compensated during the Q1 by higher earnings from cash deposits. However, by year-end, we expect higher economic interest expense in comparison to last year. Now moving on to an update on our bad debt development. Despite further price increases since the beginning of the year, the payment behavior of our customers remains unchanged in all our markets. We continue to build earnings-effective bad debt provisions at the same relative ratios as for the full year 2022. With this, we stay fully prepared should a recessionary scenario materialize. Looking at the development of our economic net debt, I would like to highlight three points. First, the typical negative operating cashflow in Q1 should not come as a surprise for you. It reflects the usual seasonal pattern in our business model. We also highlighted, as part of our full-year call, reversals from spillovers from last year. Overall, we still expect a cash conversion rate below 100% for full year 2023, which will then swing back to 100% in subsequent years. Second point I would like to mention, we accelerated our investments into the energy transition. Our group investments have increased by more than 30% in the Q1 year-over-year. That provides us with full confidence to also achieve the significant ramp up for the full year. Third message, our successful energy procurement strategy has led to a very limited cash outflow from margining, even though energy wholesale prices dropped by around 30% in the Q1 alone. Overall, the increased economic net debt of EUR 35.1 billion is fully in line with our expectations. Let me now close today's presentation with our remaining year guidance and our midterm delivery plan. Even though we saw another significant improvement in our market environment during the Q1, we remain cautious when it comes to the remaining year guidance, which still assumes an energy crisis scenario. We will obviously revisit this assumption as the year unfolds. Despite our cautious remaining year outlook, our strong Q1 lifts our confidence regarding the 2023 full year outturn. Therefore, we now assume to end up towards the higher end of our earnings ranges for adjusted EBITDA, net income, and earnings per share. The pace on the investment side will be kept throughout the year and will lead to investments of around EUR 5.8 billion for the green energy transition. This means that we also confirm our growth targets for 2027 and beyond. Thank you very much. With that, back to you, Iris. Thank you, Marc. With that, we come to our Q&A session. The first question comes from Harry Wyburd from Exane. Harry? We can't hear you. You're on mute. I think we give you, Harry, a bit more time. Yep. Maybe we then go first with Wanda from Credit Suisse. Hi, good morning. Wanda Serwinowska, Credit Suisse. Two questions from me. The first one is on the 2023 guidance. You had a very strong start into Q1 this year. There are some positive one-offs embedded in your guidance, and you keep the guidance unchanged. My question would be, what are the key risks from today's point of view, because you seem to be very, very cautious? The second point is on the trends in Energy Infrastructure Solutions. Can you give us any numbers for solar panels or heat pump sales? Have you seen any improvement on the supply side? Thank you. Thank you, Wanda, very much for your questions. Let me start with the 23 guidance question. First of all, you know, commenting on what you mentioned on the NTS, we continue a cautious stance. That's what you should definitely take away that in our financial guidance for 23, we build on cautious assumptions, taking into account as well that market prices could go up significantly and also temporarily with significantly increased levels of volatility. That said, you should not get carried away totally from the good performance in Q1, yeah, as compared to last year. Last year was a very difficult year for our energy retail business, so a lot of that is recovery. If you actually look at kind of quarterly run rates, what we delivered now, in Q1 2023 is very much in line with the normal years, for example, 2021, 2020. If you look back further out, what we are now seeing in terms of momentum is pretty much in line with the usual build-up. Nevertheless, with the effects that we have seen in Q1, we now clearly guide to the upper end of our guidance range. In that sense, I think we get more positive also and definitive in our guidance. On PV heat pumps, I don't have now Q1 numbers with me, but I think that's something that we can dig out and provide to you then subsequent to the call. Yes. Okay. Can I just make a quick follow-up on the first comment on your 2023 guidance? Can you quantify how much headwind did you bake in into your 2023 guidance? You have, I don't know, EUR 200 million, EUR 300 million of one-offs, which I don't know if you incorporated in your 2023 guidance, which you raised in March. I'm trying to understand what is baked in. What headwind you baked in into your guidance? Look, if you look at the remaining run rate, we currently assume that we are more or less running on the margin levels that we had during the last two quarters of 2022, so when most of the price increases had been implemented, and so on. If I look at our success now in also managing the downturn in prices, and this is kind of the energy optimization gains. You may call them a one-off, but actually they are reflective of how well we are synchronizing end-to-end our procurement and then sales portfolio. During also now the market downturn in terms of prices, we've been extremely successful in managing that. If we are able to continue that performance throughout the remainder of the year, we would be talking for Customer Solutions, et cetera, is variable. If we should not see any change in price level of volatility compared to the Q1, that would mean a significant, i.e., low to definitely mid-3 digit million EUR upside. Yeah? Because kind of the low 3 digit which you saw in Q1, that you could easily then extrapolate for the remainder of the year. Again, we do believe that, you know, this blue sky scenario with which markets seem to price in, that's where we are a bit more cautious. Again, that for our investors should be a comfort that you do not need to worry depending on market price developments now where we will end up. We will definitely deliver our guidance. Thank you very much. We try again, maybe this time it works. Hi. Hopefully you can hear me now. Yes. Sorry about that. The my Teams took a good opportunity to crash. Thanks for taking my questions. I'm sorry if I overwrite some of Wanda's. Please tell me if I'm asking the same one twice. The first one I just wanted to ask you mentioned that the guidance assumes that the energy crisis is not over yet for the full year. I just wanted to get a sense of how much buffer you've got in there. Maybe you could quantify it or what would have to happen for there to be upside to the guidance for the full year. The second one was just on regulation. We talked a lot on previous conference calls about an update you're expecting in the late summer on returns and cost allowances and efficiencies, and I wondered if you could update us on what the current status is and whether there are any updates from the regulator on that. Thank you. Yeah, Harry, I have to say, as long as our machine doesn't break down, I think that's a better outcome. Sorry to hear that you had issues. No problems. I start with the regulation question. We already briefly touched on the guidance part, but I'm happy to repeat that message in brief. On regulation, essentially from our full year call, no further update, yeah? We are still seeing that things are progressing on the various parameters like cost audit. The cost question of allowed cost of debt, where we had the consultation proposal out from the German regulator. That's still not finalized in terms of put into law. That's still to come in the Q2. We continue to believe that we will have all variables and parameters together during the Q4. That will be the time when we will then also kind of draw a line and then assess what does the collective outcome then from the different parameters will mean. Whether that's gonna be then in time for our Q3 call or something for full year call next year needs to be seen. In any case, you should expect that we will then also make a comprehensive update of our full financial framework. Not only then kind of what would be an earnings impact, we would then also be looking at CapEx, dividend, a capital structure target, and so on. You should expect once we are ready with the outcome of the German regulation, then we will also make a comprehensive update of our framework. On the guidance part, let me just repeat in short. Kind of when we say we assume crisis assumptions, this cannot be operationalized in the sense it's price level of X. Yeah? This is an assumption about, yes, of course, higher prices than we currently see them in the wholesale markets, but more importantly, a much higher volatility. That's what we have seen last year, that in few weeks' time, depending on market dynamics, you can incur substantial losses. You can also incur substantial optimization gains depending on how well you're able to manage your procurement portfolio. Continued experience from Q1 is we are doing an extremely good job in that respect. That's why we had the low three-digit million EUR upside in Q1 alone, and that's what I said before. If you extrapolate that solid performance for the remainder of the year, then this would be an upside of a low to mid-three digit million EUR amount for the full year 2023. Again, I can't give you now a price level. This materializes at price level X. It's gonna depend on how market volatility will develop in our major markets. Thank you, Marc. Sorry for interrupting the question. The next question comes from Peter Bisztyga, Bank of America. Good morning. Thanks for taking my question. Just one clarification on the regulation, please. Have we got any visibility yet whether the increased cost of debt allowance is gonna be backdated to 2021, or whether you're just expecting to get that from the beginning of the next regulatory period? Just switching gears a bit, we've been hearing a lot about the very long lead times for high voltage network equipment. I'm just wondering whether you foresee any supply chain issues that could hamper your low and medium voltage network expansion plans, near term and also kind of medium term as you look out the next sort of two, three years? Hi, Peter. Thanks for your questions. Let me start with the first one. Short answer is no. Yeah? We're still on it. It's not brought over into a final legislative draft. We're still on it to move that date forward to 2022, which we think is the more appropriate start point for the cost of debt adjustment. When it comes to supply chain, generally what we have now seen during the last three months is that supply chains have significantly improved. We've also seen that key material or prices for material costs have come down, quite significant actually for some components, reflecting that the supply chain is easing. When it now comes to high voltage, indeed, this is something which traditionally during the last years has seen the longest lead times. They are up to 10 years, and partly longer. Here, obviously, it's extremely important whether and what kind of improvement we see in permitting. That's also where we expect during this year to see significant advancements. We expect political politicians to act on that front quite meaningfully. That also has to happen for us in order then to ramp up also our investment levels on high voltage levels. We're gonna learn much more, is my assumption, throughout this year in terms of, what political will there is and how it can be implemented then in concrete legislative changes. Great. Thanks very much. Thank you. Next question comes from Vincent Ayral from J.P. Morgan. Yes. Good morning. Apologies, the video's not working. At least we can get on Teams with the computer now, J.P., so I hope you hear me. Thank you for taking the questions. A couple of questions here. One is, basically you're saying you're gonna get more visibility on the regulation in Q4, and then should be in a position to update us on the CapEx dividend capital structure, if I quote you. One thing where I'm a tad surprised is, you've been saying that visibility on the Easter Package CapEx wave would take 12 to 18 months, so probably coming later indeed. What should we expect? Several waves of potential CapEx upgrades, one coming post Q4, and another one maybe in 2024 when you got visibility on Easter Package. That would be the question 1. The second, when we're looking at the cost of debt, I'd just like to get clarity on what the regulator is looking at. Is it looking at providing a rate reset with the cost of debt, which is the current one for the existing investments and then separate the view for new investment that need to be financed under current market terms? Or is it looking at somehow providing some windfall by putting current market terms on all basically the RAB returns? It makes quite a difference, so I'll be quite interested. Finally, I got a question here coming from a client. Just some color on the net debt evolution by your end would be very welcome as well. Vincent, you are breaking the 2 question rule. You leave me puzzled what I should be doing now, picking 2 or answer all of them. You get crisp answers on all of them. CapEx update, you should assume that we will not update now on a quarterly basis our CapEx plans, but that this will happen on an annual basis. From today's point of view, I would most likely refer you to our full year disclosure in March 2024. On cost of debt, that's straightforward. The consultation proposal is about new investments. Any investments that will be executed. The question tying back to Peter's question is then whether investments from beginning 2024 should be reflected or whether also investments for the years 2022, 2023 should be reflected. That's the open question. The existing historical regulated asset base has not been part of the consultation proposal at all. From today's point of view, that then would have to wait for a reset until 2028 for gas, 2029 for power. Anyhow, we believe also on the cost of equity that we do need to see a different cost of capital also for legacy assets, that's now pending with the courts, will not be settled this year anyhow. On the net debt, it stays with what we said. As of full year, we saw significant positive one-offs in 2022. That's why we are guiding for cash conversion of rather around 80% for this year. If you then take the numbers together, that will mean that our economic net debt CapEx and cash conversion underperformance this year will mean that our economic net debt will move up and will still stay well below the five times debt factor target that we set out. That's on those three. I gotta remind now everyone else to stick to the two. This was the exception from the rule, not that we get a avalanche now. Absolutely. The next question would come from Alberto, or the next 2 questions max. I will be highly compliant. Thank you for taking my questions, and good morning to you. My first question is on a piece of draft legislation that we saw published last week by the German government. It was clearly mostly on, you know, protecting energy bills for industrial clients, but it clearly put a huge emphasis on faster renewable development. I suspect that you run the second most important electrification infrastructure in the country, without which you can't deploy all these renewables. I was wondering if you had enough time to go through the draft. I know you're very involved with the government. What type of upside, even if you cannot quantify qualitatively, would you expect from all this, you know, I call it the German IRA, what upside do you see for your business in Energy Networks and in the Energy Infrastructure Solutions from all this policy that we're beginning to see? The second question is very plain on retail margins. Just on the retail business, should we assume something similar between 2019, 2021, and then we're going to put on top a little bit lower procurement cost and cost-cutting? What I'm trying to say is that should we continue to see retail margins growing in 2023 and 2024 in your portfolio? Thank you. Yeah, Alberto, thanks for being so compliant. On the retail margins, let me start with the second one. What should you expect from retail margins? First of all, during 2022, 'cause that was a bit now overshadowed by the whole energy crisis, we delivered around EUR 200 million of synergies from our retail business. In that sense, I think we're in very good state of cleaning up and keeping operations efficient. That just makes our margin outlook from that point of view, very robust. On top of it, I would expect the major driver actually to be that in times of absolutely higher wholesale prices, and with that sustainably higher end customer prices compared to where we were 2020, 2019 and 2020. I would expect that over time, relative margins, i.e., revenue margins, will move back and you know our 2%-4% range guidance. This is something which we, across the countries, expect to be a reasonable margin expectation to have. That we will see profits developing according to maneuvering back into this 2%-4% corridor, then actually on a higher revenue level, and then turning to a higher absolute profit level. That is already included in our guidance, which we have gave up. Yeah, remember that our energy retail performance was also gradually increasing in the mid-term. That's reflective of what we believe the market will bring about that normalization of margins. On upside for Energy Networks, no, I can't now translate that draft piece of draft legislation into now as an incremental specific upside. What you should just take away is that there is a lot of momentum, which is just reconfirming always the same direction, and this is that our CapEx plans and Energy Networks should only see upside. Our focus this year is about making sure that the economic incentive is there, that we also deploy all of that money, and that we are also able to grow our delivery engine, our capacity to invest in line with the needs which societies express. That's our focus for this year. Therefore also there I have to refer you then most likely to our full year results 2024. We will not now kind of upgrading our CapEx targets following every draft legislations. It's also not the way how we operate that business, yeah? Network development plans, you can imagine that are a complex endeavor and require time and diligence. We will not be now running that whole exercise on a quarterly basis. That would just not be realistic. Thank you, Marc. Next question comes from James Brand, Deutsche Bank. James, you're on mute still. Sorry. I was saying hello. Thank you for taking my questions. I'll stick to the two. Well done on the good results. Firstly, I just want to understand the bad debt provisions that you had in your balance sheet, the EUR 1.8 billion. The fact that your additions are 0.7% of revenues each quarter, is that consistent with the customer payment behavior that you're seeing at the moment, and therefore if there was a deterioration, you'd have to increase those provisions? There's already some headroom baked into those assumptions already for deteriorating payment behavior in the future? That's the first question. The second is that EIS saw fairly flat EBITDA in Q1, and you mentioned in the slide in the appendix non-recurring, aperiodic effects and FX. I was wondering whether you could just give a bit more detail there because EIS. You know, should be growing, you know, without one-offs growing very quickly at the moment. Maybe you could give us a flavor of what the one-offs are and help us understand the underlying growth rate. Thank you very much. Yes, James. Hello, and thank you very much for the questions. On bad debt, our bad debt provisions are a forecast exercise essentially. Where, you know, we apply an expected credit loss model in which we assess what future payment behavior may be. Therefore, my answer to your question should not surprise you now when I say, no, it's not consistent in the sense that we, as of today, don't see a material change in payment behavior. Yeah. When it comes to macroeconomic outlook, we still decided to keep a cautious stance in our expected credit loss assessment, as we may be heading into a recessionary scenario where in the past we had seen deterioration of payment behaviors. However, which we see with the precautionary provisioning that we do, well-covered from a financial point of view. That's what I would say on bad debt, yeah. No change in payment behavior. The increase in our bad debt provisioning is an anticipation of a possible recessionary scenario, and in that sense, cautious. Second, on the Energy Infrastructure Solutions business, first of all, I would like to stress what you also mentioned, that we will see and we have no fully confident and no change in view that also this year our Energy Infrastructure Solutions business will steeply grow. We are still on track for this year to deliver a 10% CAGR in terms of rising asset and earnings base. When it comes now to Q1 this year, we need to be cautious about a number or reflective of a number of things. On the one side, the development in Energy Infrastructure Solutions is a project business, so it depends on when projects are actually being commissioned and when they then become P&L effective. That's actually a bit of an anomaly that we have a number of projects that now actually were commissioned in the Q2 and very few in Q1. Q1 typically is a bit weaker quarter in terms of commissioning, but it's actually particularly weak. It's not reflective now of an underperforming pipeline. We more see it as slippages into the Q2, which will be soonly caught up. Secondly, we do see it's in during last quarter, Q1 already, where prices, you know, had already been steeply risen, even ahead of the outbreak of Ukraine War. We had seen a number of one-off optimization gains in that portfolio, which do not reoccur or have not reoccurred to the same magnitude as was in Q1 this year. Those, I would say, are the 2 main reasons I would mention. Yeah. FX effects kind of plays on top of that, as a larger part of that portfolio is in Sweden. If you look at how the Swedish krona has developed relative to euro, kind of that's a third element where we see a temporary weakness in the euro-denominated results. Those are the three things I would mention. Thank you very much. Thank you, Marc. The next question comes from Meike Becker from HSBC. Thank you very much for taking my call. Good morning to everyone. There is one question left at this point, and it's about the seasonality throughout the rest of the year. You mentioned that Q1 was roughly in line with 2020, 2021 results. What should we expect in terms of the general seasonality for Q2 to Q4? Are there any specific larger one-offs in either direction you're already aware of, and can go in more details on? Thank you. Yeah. Hi, Meike, welcome. Seasonality from today's point of view, we wouldn't expect anything abnormal. That means that you should be largely looking at the seasonality patterns that, for example, you could observe in 2021. Yeah? Again, 2022, if I look at our energy retail business, that only provided 15% versus in a normal year it's almost close to 40%. That was a massive underperformance last year against the backdrop of the market development back then. We will swing back to normal seasonality. The only thing I think which you then should take note of are two elements. On the Energy Networks and Energy Infrastructure Solutions side, our earnings are investment-driven, growing. Yeah. You will see further earnings momentum from investments in our Energy Networks business. Earnings will be growing relative to prior year. Same on Energy Infrastructure Solutions, there will be growth. On energy retail, it will be pretty much a question of how commodity markets will develop. Yeah. If it stays a bit like the blue sky scenario, which we see right now, there will also be a more upside in energy retail. That's again, something from a guidance point of view we wouldn't include at this stage. Thank you. Question comes from Anna Webb, UBS. Hi, thank you so much for taking my question. Congratulations on a strong set of results. I've got two questions. A clarification on the Romanian business. Can you just clarify whether the Q1 result involves a recovery from 2022, or whether we should think of this as a new run rate for that business? Secondly on prices, there's clearly been a big shift in wholesale prices. What do you kind of see as the impact on retail bills? Last year you put through some big price increases, but do you expect to be lowering retail bills this year? If so, how much and when? Thank you. Yeah. Thank you, Anna, for your questions. On Romania, which is from a prior year comparison sees steep performance improvement. The business is going up by almost EUR 80 million. Keep in mind, last year Q1 was significantly loss-making. That's where the Romanian business started to create a lot of headaches last year. That has been stabilized now, and that's why what you see in Q1 is now more or less with the seasonality pattern, again, where Q1 and Q4 are particularly strong quarters in any commodity retail business. We are back on profitability, on profitable level and on a level which I would say is more or less the usual run rate, which you should be expecting. On prices, there, as you can imagine, is no general answer to it. This now pretty much depends on which market we are looking at. In the Netherlands, we have seen prices already coming steeply down as the market hedging behavior is rather short term. Clearly, we're looking at the U.K. market, kind of the next one where the July SVT price cap update will certainly bring about a very meaningful reduction in SVT tariffs. We also expect then that the market will reopen in the sense of that we will see more competition of competitive tariffs versus SVT tariffs. In Germany, we are also in a, I would say, transition period. We're still seeing some price increases. We have been announcing price increases to be effective as of June. At current wholesale price levels, you know, everything else being equal, you know, you should also be expecting that at some stage, the German market, with the longest hedge period, will then offer the opportunity for lower tariffs for our customers. It's different market by market. I would say across the board with the shape of the commodity curve in place, we will be seeing now cost decreases in all of our markets. It's just a question of time. Thank you. With that, next question comes from Ingo Becker, Kepler. Yes. Thank you. I had a question, one, again, checking on your guidance, and the other one would be a quick one on working capital. On, on the guidance, I think we're having a lot of one-offs here for the, currently in the network business, which you explained very well at the full year stage. And I think the redispatch cost, if I get you right, is now just another one-off on top, which will reverse then later on. Just wondering, you had lots of network losses last year, which will reverse in the coming years. Given the sharp price decline, are you not expecting some gains on that front this year? And could that actually move your income there, not just maybe at the upper end of the range for networks, but maybe above? I hope this still consists of the same question, just understanding your guidance in Customer Solutions. Can we take your guidance of EUR 1.8 - 2 billion EBITDA as a kind of good proxy for your absolute underlying profitability in this business right now? Or is the gains or whatever the changes in optimization distorting that figure as well? I think that was in the previous question that was asked before. I would understand that you probably still have another cushion on top of that in your bad debt assumptions. The question here would be, if you reverse that, would you release that against EBITDA? Is it included in your declared economic net debt? I skipped the working capital one for you. Okay. Ingo, welcome. Let me start with the networks business. First of all, I mean, you pointed out the one-offs and redispatch costs, and I just wanna reiterate here that we're crystal clear about the nature of these effects and that they will flow back via the regulatory account. That's only just a matter of being entirely transparent so that you have a good track of how the underlying business is developing. Underlying, we see a very a solid growth from our from our investment program, and that's what we expect to continue. On network losses, indeed, there may be an opportunity that in some markets, again, the network loss topic is a matter only in select markets, that this may offer the opportunity for faster recovery. It's not something that we have entirely included yet. It's partly then depending on tariff settings. In a number of markets, tariffs have been set. It's something which we will also update. In principle, lower prices make it easier, so to say, and more likely, where we had a more extended period of network losses, recovery that these losses will be recovered faster. On Customer Solutions, in terms of what's the normal profit level. First of all, in the for our energy retail, so for our Energy Infrastructure Solutions business, yeah? Normality should be 10% CAGR, yeah? With upside as we see the heat transition accelerating. They're also kind of building up more and more investment opportunities on that end. When it comes to the energy retail, i.e., the commodity sales business, that's something where I would just remind you of a margin normalization in terms of these 2%-4%. We do expect over time at higher price levels that we should also see higher profit levels. In that sense, even the EUR 1.8 - 2 billion, if you tie that back to our midterm guidance, we still include there, that we will move up also in our commodity retail business a bit more, in absolute profit levels. That's what I would say is then the normal, the normal level. I just have a hard time to respond not to say an absolute profit level is normal. I think we need to be aware of the risks we are transforming for our customers from wholesale markets into fixed price, and more stable tariffs. That risk and the compensation for that is relative to the prices we see in the market. Just inquire, as you expect the price wave that we've seen over the last 12 months up massively and then massively down, currently that will result to temporary higher revenues and then apparently lower once again. Into that normalization of low ones, you would tend to see your absolute income level, at least on par with your guidance this year if we keep AIS flat for the time being. First of all, we haven't, in some of the markets like in Germany, we haven't even passed through any of the peak prices, yeah? with our hedging behavior- Sure. We have basically shielded our customers from the worst. Second, in the midst of the crisis last year, we did not immediately expand our margins. You have seen a significant relative margin compression last year. Why despite of the massive price increases last year, we only delivered the absolute profit target that we had announced for 2022 on much lower prices. That's something which you should not expect now is calibrating in within just a short period of time. This will require a time of 12-24 months, depending on market to market. It will also be a question of how competition then generally will be working and acting after the energy crisis. That's something which will swing in. Yes, we will see this normalization is our strong conviction in relative margins. Okay. Thank you. Next question comes from Piotr from Citi. Hi, yes. Thank you for good morning, and thanks for opportunity to ask questions. I have a first one will be on the Customer Solutions. I think what we've seen last year was a bit of a stop in the competitive landscape, non-competitive actions, and therefore the churn went down and your acquisition customer cost went down. I just wanted to ask you how much you are able to save on the acquisition costs and whether this is going to be a headwind going forward, I think kind of a absolute level in euro terms. a second question on this bad debt issue, which, you know, I guess in a couple of the markets you were helped by the political actions to provide support to the customers. Is this now a function that you don't see any bad debt because the customers, you know, essentially get help, you know, the prices are capped and they get subsidy from the state, therefore we have not seen a really a reflection of what that means for their wallets? Yeah, Piotr, good questions. Let me address the competitive question, CDA question first. We're not looking at it kind of in a, in an isolated way, what's kind of now the opportunity to save or not a cost to acquire. What is critical in this year will be what we call here internally, you know, we call it market opening, yeah? We have seen now in price cap, you know, when price caps were valid and were effectively shielding customers, that this had brought churn significantly down. That was an upside in terms of isolated cost to acquire last year. If you look at our results at the end, you know, we delivered the target profits that we had sold out, set out prior to the target. Our focus this year will not now be in driving down or up cost to acquire in an as an isolated variable. For us, it's about now very closely acting and optimizing our sales channels and interact with our procurement, how to now act in markets which are expected to be opening up. We have seen the Netherlands opening up. Churn rates have gone up shy of 20%, yeah, in the Q1. That's still below the levels of churn which we had in the Netherlands prior to the crisis. Then the big question is: What kind of products and tariffs can be offered and will be accepted by our customers? What's the lifetime value of such contracts? At the end, it's gonna be an NPV optimization, where we invest into acquiring customers, and not. That depends very much on what product tariffs fly in the market and how that corresponds to how we can procure in wholesale markets. That equation we're gonna optimize very dynamically, yeah, as we have done last year. That's why I can't give you now an answer on cost to acquire. It's gonna be what's gonna be. You can rest assured that we will optimize the value from our customer portfolio in the best way. On bad debt, yeah, will it impact? That's the big question. That's why we stay cautious in this respect. I think there is... What are the key uncertainties which we are basically looking at? I would name just two. There are more, but two of the most relevant are, we need to now see how will wages adjust to the inflationary environment. How will also the size of the wallet change relative to the changes we've seen in energy bills? That's point number one. Point number two, we will also have to see how a potential recessionary scenario will actually affect workforce. There are a number of people out who say this is gonna be the first recession or maybe a first recession without any impact on the labor markets. This also is then a consequence of on the average size of the wallet and what it then would mean for energy affordability. That's why we stay cautious because we just have to acknowledge that we are on pretty specific territory with very limited historical evidence what should happen in such a situation. Yeah. Okay. Thank you, Marc. Next question comes from Ahmed Saad, Jefferies. Yes. Hi, thank you for taking my questions. Just firstly, can I just clarify, Marc, your comment about the upside or the potential upside to the Customer Solutions guidance for the rest of the year? That is versus the top end. As I sort of understand, you've already given the first Q. You're already sort of looking towards the top end of the division guidance. The second question, similar to, you know, previous questions around how much is sort of underlying and how much are some of the one-off benefits, could you just qualitatively talk a little bit about the sort of the better than sort of expected performance or versus the budget? How much is quite specific to 2023, and how much do you think would impact your medium term outlook as well? Thank you. On Customer Solutions guidance, happy to repeat what I said there, which is that we stay cautious with our assumptions for the remainder of the year when it comes to not only market prices but also volatility. If, yeah, you were to assume, in contrast, a blue-sky scenario where you run through this, the remainder of the year with no further major volatility in the markets, everything is fine, then you should expect that we should be able to repeat some of the optimization successes that we have seen in Q1, and that would mean that further upside could materialize. That's not included in our financial guidance right now, yeah? Second, when it comes to one-offs, again, that's very transparent and I don't wanna get now this notion of, oh, this is a business full of one-offs, that this gets too much traction. We were very clear in our full year results that we will see a recovery this year from lower volumes and network losses from prior years, and said that this was gonna have a magnitude of a low to mid 3-digit million EUR amount. We also now see that due to the specific German topic of redispatch, that we also have seen in the Q1 a low 3-digit million EUR amount. That means overall, yeah, we are talking in terms of one-off effects on a full-year basis, at this stage about something between EUR 200 - 300 million. It's very transparent. We've been very outspoken about that. No further things which are happening. The rest is true underlying performance, and as I said, largely reflective of our steeply growing Regulated Asset Base. Okay. Thank you. With that, we come to the last question for today, from Bartek from SocGen. Hello. Thank you for taking my questions. 2 things I would like to discuss, please. One is a topic we haven't spoken about for quite some time, meaning the inflation. Basically, I guess from 2023, you should gradually start seeing the inflation indexation of your totex in Germany, given the fact that in 2021, inflation already slightly increased in the country. Consequently, my question would be what is the net impact on EBITDA from inflation indexation of your totex minus costs in index inflation in the Q1? What do you think it will be in the FY 2023 in Germany, meaning the impact from inflation in Germany on your EBITDA? Maybe you can somehow guide us for 2024, where the inflation indexation will be significantly higher, would be great as well. Second thing on Swedish regulation, I'm hearing that there are discussions that the regulatory framework could change in Sweden from a real one to a nominal one. Maybe you can update us what are the discussion points right now because if the regulator moves to the nominal one, it could mean a lower up, right? At least lower up growth, but also maybe consequently lower up if they want to convert the current drop into the book value of your assets. Maybe we can, if we can hear your f irst impressions on the regulatory discussions in Sweden ongoing for the next regulatory period. Thank you. Hi Bartek, thanks for your questions. On Sweden, it's right that the Swedish regulator has brought up ideas to significantly change in the current system. While at the same point in time actually preparing for the return conditions for the next regulatory period starting in 2024. I think content-wise there's no major news now, except for saying that it, the race is now getting quite tight. I have to say we need to be a bit realistic in how far you can actually really deliver a major overhaul of a network regulation scheme, you know, with so short time left. We talk just about 6 months' time, before then actually parameters need to be set so that they can be applied into tariffs, on time for 2024. I think we need to be a bit realistic, that's 1 point, about the timing. The 2nd point is that, changing from a real to a nominal system per se, you know, doesn't tell me anything about whether at the end the returns will be better, the same or worse. In fact, there are so many variables which then will have to be adjusted and changed, that from today's point of view, I can't tell you whether that is a downside, an upside, or whether we should just be looking at it indifferently. Yeah? That's what I would say on Swedish regulation. On inflation, for Germany specifically, I can't give you a number. What I can tell you is that anyhow the inflation indexation in Germany works with a time lag, T+2. Whatever you see this year is a reflection of inflation rates from 2 years ago, which had been at 2% below, so it's not gonna be a major impact. Generally, what you should assume is that on the OpEx side, we feel that there is no exposure in the sense that not only in Germany, across the markets, inflation indexation in them, which are built into the regulatory systems, are sufficient to also then cover rising wages and other rising costs in our P&L. In that sense it's for us no net exposure, but I can't give you now for Germany specific number for 2023 on what kind of a gross inflation impact is. Bottom line impact is de minimis in this year. With that, we come to an end for today. Thank you all very much for participating and your questions, and if there are any further questions left, we are happy from the IR side to also bilaterally clarify those with you. Don't be shy to give us a call. With that, we'll end our quarterly call today. Thank you all very much. Bye-bye. Thank you very much. Bye-bye.