Q3 2025 Repsol SA Earnings Call

October 30, 2025

Speaker #1: Hello and welcome to the REPSOL SA third Quarter 2020 results conference call . Today's conference will be conducted by Mr. Yosuke Math , CEO and a brief introduction will be given by Mr. Pablo Bannatyne , Head of Investor Relations .

Operator: Hello, welcome to the Repsol's Q3 2025 Results Conference Call. Today's conference will be conducted by Mr. Josu Jon Imaz, CEO, and a brief introduction will be given by Mr. Pablo Bannatyne, Head of Investor Relations. I would now like to hand the call over to Mr. Bannatyne. Sir, you may begin.

Speaker #1: I would now like to hand the call over to Mr. Bannatyne . Sir , you may begin .

Speaker #2: Thank you . Operator , and good morning to all . Welcome to REPSOL SA third quarter 2020 results presentation . Today's conference call will be hosted by Jose , our chief Executive officer , with other members of the executive team joining us as well .

Pablo Bannatyne: Thank you, operator. Good morning to all. Welcome to the Repsol's Q3 2025 results presentation. Today's conference call will be hosted by Josu Jon Imaz, our Chief Executive Officer, with other members of the executive team joining us as well. At the end of the presentation, we will be available for a Q&A session. Before we start, let me draw your attention to our disclaimer. During this presentation, we may make forward-looking statements based on estimates. Actual results may differ materially depending on a number of factors, as indicated in the disclaimer. I will now hand the conference call over to Josu Jon.

Speaker #2: At the end of the presentation , we will be available for Q&A session . Before we start , let me draw your attention to our disclaimer .

Speaker #2: During this presentation, we may make forward-looking statements based on estimates. Actual results may differ materially depending on a number of factors.

Speaker #2: As indicated in the disclaimer . I will now hand the conference call to over to Josh . John .

Speaker #3: Thank you, Pablo. Good morning to you, and thank you for joining us. Repsol delivered a solid financial performance in the third quarter of 2025.

Josu Jon Imaz: Thank you, Pablo. Good morning to everyone, and thank you for joining us. Repsol delivered a solid operational and financial performance in Q3 2025, moving ahead on key projects, optimizing the asset portfolio, and reinforcing its commitment to shareholder value and capital discipline. The energy landscape continued to be shaped by geopolitical stability and concerns of oil oversupply. In the US, gas prices softened compared to the previous Q, yet fundamentals still point to a tighter market heading into next year. The refining business continued to build on a positive momentum in a market characterized by a diesel supply deficit. Operations at our industrial sites restore activity levels following the disruptions caused by the Iberian outage in Q2. On the commercial side, all business segments deliver a stronger year-over-year contributions. Retail fuel sale remain robust, well supported by seasonal trends.

Speaker #3: Moving ahead on key projects . Optimizing the asset portfolio and reinforcing its commitment to shareholder value and capital discipline . The energy landscape continued to be shaped by geopolitical instability and concerns of oil .

Speaker #3: Our supply in the U.S. gas prices softened compared to the previous quarter. Yet, fundamentals still point to a tighter market heading into next year.

Speaker #3: The refining business continued to build on a positive momentum in a market characterized by a decent supply deficit . Operations are industrial sites restored activity levels following the disruptions caused by the Iberian outage in the second quarter .

Speaker #3: On the commercial side , all business segments delivered stronger year over year contributions . Retail fuel sales remained robust . Well supported by seasonal trends .

Speaker #3: The income totaled €820 million , 17% of all the second quarter , and 47% higher than in the same period of 2020 . For all four divisions improved their results over the third quarter last year .

Josu Jon Imaz: The adjusted income total EUR 820 million, 17% over Q2 and 47% higher than the same period of 2024. All four divisions improved their result over Q3 that year. Cash flow from operations amounted to EUR 1.5 billion. The accumulated operating cash flow to September reached EUR 4.3 billion, 15% higher than the first nine months of 2024. Net CapEx was EUR 0.3 billion in the quarter, with a EUR 0.8 billion contribution from disposals, asset rotations, and the EUR 0.2 billion received from the sale of tax credits in the Outpost Solar project. The accumulated Net CapEx through September was EUR 2.5 billion, including EUR 1.3 billion in proceeds from disposals and rotations. By quarter end, all the transactions announced in 2025 have been fully collected.

Speaker #3: Cash flow from operations amounted to €1.5 billion . The accumulated operating cash flow to September reached €4.3 billion , 15% higher than in the first nine months of 2020 .

Speaker #3: For net CapEx was €0.3 billion in the quarter , with a 0.8 billion contribution from disposals . Asset rotations and the €0.2 billion received from the sale of tax credits in the outpost project .

Speaker #3: The accumulated net CapEx to September was €2.5 billion , including 1.3 billion in proceeds from disposals and rotations by quarter end . All the transactions announced in 2025 have been fully collected .

Speaker #3: Net debt stood at €6.9 billion by quarter and an increase of 1.2 billion compared to June , mainly due to the integration of the new joint venture established with Neo Energy in the UK .

Josu Jon Imaz: Net debt stood at EUR 6.9 billion by quarter end, an increase of EUR 1.2 billion compared to June, mainly due to integration of the new joint venture established with NEO Energy in the UK. As part of the agreement, Repsol has retained a funding commitment of the commission liabilities related to a portion of its legacy assets. This amount was previously recognized as a non-financial liability in our financial statements. It doesn't increase at all Repsol exposure, but it is now classified in a different way. It's classified as financial debt at the consolidated level. It's only, let me say, an accounting procedure, excluding the impact of UK integration, net debt would have been flat compared to June.

Speaker #3: As part of the agreement, Repsol has retained a funding commitment for the commissioning liabilities related to a portion of its legacy assets.

Speaker #3: This amount was previously recognized as a non-liability in our financial statements, so it doesn't increase at all. Repsol exposure. But it is now classified in a different way.

Speaker #3: It's classified as financial debt at the consolidated level . So it's only let me say an accounting procedure . And excluding the impact of UK integration .

Speaker #3: Net debt would have been flat compared to June . Gideon rose to 20.5% by quarter end and 10.4% excluding leases remaining . Aligned with our strategic objective of preserving our current credit rating .

Josu Jon Imaz: Giving rise to 20.5% by quarter end and 10.4% excluding, remaining aligned with our strategic objective of preserving our current trading rating. Looking at the evolution of the main macroeconomic indicators in the quarter. Brent crude averaged $69 per barrel, 2% higher than in Q2, and 14% lower than the same Q last year. The Henry Hub averaged $3.1 per million BTU, 9% lower quarter-over-quarter, and 41% above the same period in 2024. Driven by strong middle distillate differentials, the refining margin indicator stood at $8.8 per barrel, 49% higher than in Q2, and 120% higher than the same period in 2024.

Speaker #3: Looking at the evolution of the main macroeconomic indicators in the quarter , Brent crude averaged $69 per barrel , 2% higher than in the second quarter and 14% lower than in the same quarter last year .

Speaker #3: The Henry Hub averaged $3.1 per million BTU , 9% lower quarter over quarter , and 41% above the same period in 2020 . Four , driven by a strong middle distillates differentials .

Speaker #3: The refining margin indicator stood at $8.80 per barrel, 49% higher than in the second quarter and 120% higher than the same period in 2020.

Speaker #3: Finally , the dollar continued to weaken against the euro , with an average exchange rate of 1.17 , turning now to the upstream performance , this division continued to deliver efficient and competitive growth enhancing returns through new projects and portfolio management .

Josu Jon Imaz: Finally, the dollar continued to weaken against the EUR with an average exchange rate of 1.17. Turning now to the Upstream business performance. This division continued to deliver efficient and competitive growth, enhancing returns through new projects and portfolio management. We are improving the business and together with our partner, positioning the company for a potential liquidity event. Q3 adjusted income was EUR 317 million, 28% below Q2 and 11% higher year-over-year. Production averaged 551,000 barrels of oil equivalent per day, about 1% lower than the previous quarter, and broadly in line with a year ago. Compared to Q3 of last year, the impact of divestment and natural decline was offset by higher contributions from Libya and the UK. In the UK, the merger with NEO Energy was completed in July.

Speaker #3: We are improving the business, and together with our partners, positioning the company for a potential liquidity event. Third quarter adjusted income was €317 million.

Speaker #3: 28% below the second quarter and 11% higher year over year . Production averaged 551,000 barrels of oil equivalent per day . About 1% lower than in the previous quarter , and broadly in line with a year ago compared to the third quarter of last year .

Speaker #3: The impact of divestment and natural decline was offset by higher contributions from Libya and the UK . In the UK , the merger with Neo Energy was completed in July .

Speaker #3: The new inventories , projected to produce around 130,000 barrels per day in 2025 , increasing REPSOL SA net production in the country from around 30 to 59,000 barrels per day on an annual basis .

Josu Jon Imaz: The new joint venture is projected to produce around 130,000 barrels per day in 2025, increasing Repsol's net production in the country from around 30,000 to 59,000 barrels per day. On an annual basis, the JV is expected to contribute around $700 million of EBITDA to Repsol in 2026. In Indonesia, in September, we agreed the disposal of our stake in Sakakeman, completing our co-country exit after the disposal of our interest in Corridor announced in Q2. After this transaction, Repsol JMP is now present in 11 countries, 10 producing, plus an exploratory position in Mexico, consistent with its strategic objective of concentrating operations on geographies where we hold the strongest competitive advantage. In this regard, the US continues to strengthen its position as a strategic growth region within our upstream portfolio.

Speaker #3: The JV is expected to contribute around $700 million of EBITDA to Repsol in 2026 . In Indonesia , in September , we agreed the disposal of our stake in Sakar Cayman , a , completing our country exit after the disposal of our interest in corridor announced in the second quarter .

Speaker #3: After this transaction , Repsol is now present in 11 countries , ten producing plus and exploratory position in Mexico . Consistent with our strategic objective of concentrating operations on geographies where we hold the strongest competitive advantages in this regard , the US continues to strengthen its position as a strategic growth region within our upstream portfolio in the Gulf of America .

Josu Jon Imaz: In the Gulf of Mexico, the joint development of Leon and Castile fields reached first oil in September. In Alaska, the first phase of Pikka is expected to start up early 2026. These projects, together with the upcoming start-up of Lapa Southwest in Brazil, are expected to add around 50,000 barrels of oil equivalent per day of new low emissions, low breakeven production by 2027. In addition, these developments have accounted for a substantial share of the upstream investment effort outlined to 2027. Their completion will allow us to transition to more normalized CapEx levels in the division at around or even below EUR 2 billion per year.

Speaker #3: The joint development of the Leon and Castile fields rich in oil began in September, and in Alaska, the first phase of Pica is expected to start up in early 2026.

Speaker #3: These projects , together with the upcoming start up of Lapa Southwest Brazil , are expected to add around 50,000 barrels of oil equivalent per day of new low emissions , low breakeven production by 2027 .

Speaker #3: In addition, these developments have accounted for a substantial share of the upstream investment effort outlined up to 2027, and their completion will allow us to transition to more normalized CapEx levels in the division at around or even below €2 billion per year.

Speaker #3: Finally, as part of the preparation of our vehicle ahead of a potential liquidity event, Repsol completes the last quarter with a $2.5 billion bond offering, the largest in euros and US dollars in Repsol's history.

Josu Jon Imaz: Finally, as part of the preparation of our vehicle ahead of a potential liquidity event, Repsol JP Morgan complete Q2 a $2.5 billion bond offering, the largest in US dollars in Repsol's history. The offering, structured in three tranches, attracted a strong demand, underscoring the solid support for our Upstream strategy. Continuing with the industrial division, Q3 performance was driven by the consolidation of the refining upcycle and the solid contribution from the trading businesses. Following the impact of the Iberian outage on Q2, operations activity at our industrial complexes returned to normalized levels, enabling us to capture the positive refining scenario. The adjusted income total EUR 315 million, 218% higher than in Q2, and 70% above the same period a year ago.

Speaker #3: The offering , structured in three tranches , attracted strong demand , underscoring the solid support for our upstream strategy . Continuing with the industrial division .

Speaker #3: Third quarter performance was driven by the consolidation of the refining upcycle and the solid contribution from the trading businesses, following the impact of the Spanish outage on second quarter operations.

Speaker #3: Activity at our industrial complexes returned to normalized levels, enabling us to capture the positive refining scenario. The adjusted income totaled €315 million, 218% higher than in the second quarter.

Speaker #3: And 70% above the same period a year ago . In refining our margin indicator climbed to levels not seen since the first quarter of 2024 , supported by stronger product spreads , mainly in diesel , the premium over the indicator was $0.7 .

Josu Jon Imaz: In refining, our margin indicator climbed to levels not seen since Q1 2024. Supported by stronger product spreads, mainly in diesel. The premium over the indicator was $0.7, negatively impacted by the turnaround of Cartagena and plant maintenance at the C43 biofuels unit, and the absence of crude shipments from Venezuela. The C43 plant resumed full capacity operations in October. Distillation capacity utilization was 85%, while conversion units operated at 101% of nameplate capacity. Refining margins have remained robust in Q4, with the indicator averaging $9.8 in October and $7.1 year to date. The spot margin this morning was $13 per barrel. No major refinery turnarounds are planned this quarter, supporting healthy utilization rates.

Speaker #3: A negative impact was observed due to the turnaround of Cartagena and planned maintenance at the C43 Biofuels Unit, as well as the absence of crude shipments from Venezuela.

Speaker #3: The C43 plant resumed full capacity operations in October . Distillation capacity utilization was 85% , while conversion units operated at 101% of nameplate capacity .

Speaker #3: Refining margins have remained robust . In the fourth quarter , with the indicator averaging $9.8 . In October and $7.1 year to date .

Speaker #3: The export market this morning was $13 per barrel . No major refinery turnarounds are planned this quarter supporting healthy utilization rates , renewable fuels margins remain also at solid levels , driven by stricter regulatory mandates in Europe and lower imports in the chemical business .

Josu Jon Imaz: Renewable fuels margins remain also at solid levels, driven by stricter regulatory mandates in Europe and lower imports. In the chemical business, market conditions in Europe remain challenging, with flat demand and higher costs compared to other geographies. Repsol's petrochemical margin indicator declined by 22% over the previous quarter, driven by lower prices and higher energy costs. Our priority for this business remains lowering break evens and expanding margins through differentiation. The Sines expansion, scheduled to start in 2026, is expected to add around EUR 80 million of EBITDA at the current acid scenario, and in Puertollano, a new plant dedicated to highly specialized application is also planned to come on stream next year. In the wholesale and gas trade business, we received 5 cargos from Cadiz Repass last quarter.

Speaker #3: Market conditions in Europe remain challenging , with flat demand and higher costs compared to other geographies . REPSOL SA petrochemical margin indicator declined by 22% over the previous quarter , driven by lower prices and higher energy costs .

Speaker #3: Our priority for this business remains lowering break even and expanding margins through differentiation . The expansion is scheduled to start in 2026 . Is expected to add around €80 million of EBITDA at the current asset scenario , and in Porto and new plant dedicated to highly specialized applications is also planned to come on stream next year .

Speaker #3: In the wholesale gas trading business, we received five cargoes from Calcasieu last quarter. This is in line with our goal of reaching a total of 11 cargoes lifted in 2025, contributing around €100 million of incremental EBIT compared to the initial plan in our industrial transformation initiatives.

Josu Jon Imaz: This is in line with our goal of reaching a total of 11 cargos lifted in 2025, contributing around EUR 100 million of incremental EBIT compared to initial plan. In our industrial transformation initiatives, the project to retrofit a former gas oil hydrotreater in Puertollano is expected to begin operations in Q2 2026. An additional retrofitting project is currently under evaluation, which will become our third major advanced fuels facility in Spain. In Tarragona, the development of the Ecoplant is progressing according to plan. Last week, we signed our first offtake contract to supply renewable methanol to produce at this facility as part of our long-term agreement for the supply of renewable marine fuels. In hydrogen, during the quarter, we took the FID for our first large-scale electrolyzer.

Speaker #3: The project to retrofit a former gasoil hydrotreater in Puerto Llano is expected to begin operations in the second quarter of 2026. An additional retrofitting project is currently under evaluation, which will become our third major advanced fuels facility in Spain.

Speaker #3: In Tarragona , the development of the plant is progressing according to plan . Last week , we signed our first offtake contract to supply renewable methanol to produce at this facility as part of our long term agreement for the supply of renewable marine fuels in hydrogen .

Speaker #3: During the quarter, we took the FID for our first large-scale electrolyzer, which is going to be constructed in Cartagena, and we are finalizing the analysis for the approval of another two projects.

Josu Jon Imaz: It's going to be constructed in Cartagena. We are finalizing the analysis for the approval of another two projects. These electrolyzers will constitute the main part of our total capacity and operation by the end of this decade. Moving now to customer. This division delivered the highest quarterly result in the history of Repsol's commercial businesses, with all segments delivering higher contributions year-over-year. Q3 adjusted income reached EUR 241 million, 22% above Q2 and 34% higher than in the same period of 2024. EBITDA was EUR 434 million, a 25% increase year-over-year, bringing the accumulated figure through September to EUR 1.1 billion. This performance keep us on track to deliver in 2025 the EUR 1.4 billion EBITDA targeted for 2027 in our plan.

Speaker #3: This electrolysers will constitute the main part of our total capacity in operation by the end of this decade . Moving now to customer this division delivers the highest quarterly result in the history of REPSOL SA commercial businesses , with all segments delivering higher contributions year over year .

Speaker #3: Third quarter adjusted income reached €241 million , 22% above the second quarter , and 34% higher than in the same period of 2020 .

Speaker #3: For EBITDA was €434 million , a 25% increase year over year , bringing the accumulated figure through September to €1.1 billion . This performance keeps us on track to deliver in 2025 .

Speaker #3: The 1.4 billion EBITDA targeted for 2027 . In our plan . So this figure is going to be a achieved this year , 2025 and all that is supported by resilient demand .

Josu Jon Imaz: This figure is going to be achieved this year, 2025. All that is supported by resilient demand, efficiency gains, growth in power and gas retail in Spain and Portugal, and the growth of aviation fuel sales in Iberia. In mobility, sales of road transportation fuels grew 14% year-over-year, reaching pre-pandemic levels. The non-oil business delivered robust contribution margin growth in service stations, 10% above Q3 2024. As of today, 56% of our network in Spain offers multi-energy solutions. In October, the range of renewable fuels available at our service station has been expanded with the incorporation of 100% renewable gasoline after our Tarragona refinery achieved the first industrial scale production of this product, a real technological milestone.

Speaker #3: Efficiency gains , growth in power and gas , retail in Spain and Portugal , and the growth of aviation fuel sales in Iberia in mobility , sales of road transportation fuels grew 14% year over year , reaching pre-pandemic levels .

Speaker #3: The non-oil business delivered robust contribution margin growth in service stations, 10% above the third quarter of 2024. As of today, 56% of our network in Spain offers multi-energy solutions.

Speaker #3: In October , the range of renewable fuels available at our service station has been expanded with the incorporation of 100% renewable gasoline . After our Tarragona refinery achieved the first industrial scale production of this product , a real technological milestone .

Speaker #3: Finally, in power and gas retail, we had 157,000 new customers last quarter, bringing our total to 2.9 million clients by the end of September.

Josu Jon Imaz: Finally, in power and gas retail, we add 157,000 new customers Q3 for a total of 2.9 million clients by the end of September, on track to reach our 3 million target before year-end. Turning to low carbon generation, the adjusted income reached EUR 31 million, 24 million higher quarter-over-quarter, and 38 million increase year-over-year. These better results were driven by renewables, the main driver, and a higher contribution from combined cycles, whose activity increased to ensure system stability following the Spanish heatwave. Outage, the blackout we suffer in April. The average pool price in Spain was EUR 67 per megawatt hour, 71% above Q2 and 16% below the same quarter in 2024. The power generated by Repsol reached 3.3 terawatt hours, 39% higher year-over-year.

Speaker #3: On track to reach our 3 million target before year end . Turning to low carbon generation . The adjusted income reached €31 million , 24 million higher quarter over quarter and 38 million increase year over year .

Speaker #3: These better results were driven by renewables. The main drivers are higher contributions from combined cycles, whose activity increased to ensure system stability following the Spanish outage.

Speaker #3: The blackout will suffer . In April . The average full price in Spain was €67 per megawatt hour , 71% of all the previous quarter , and 16% below the same quarter in 2020 .

Speaker #3: For the power generated by Repsol reached 3.3 terawatt hours , 39% higher year over year . Repsol has reached five gigawatts of installed renewable capacity under operation , and we expect to add another 500MW before year end , mainly driven by the start up of solar in Texas .

Josu Jon Imaz: Repsol has reached 5 GW of installed renewable capacity under operation, and we expect to add another 500 MW before year end, mainly driven by the start-up of Pinnington Solar in Texas. We keep, sorry, executing our business model based on building our projects from scratch and divesting in early stages of production to optimize financial structure and maximize returns. In the US, the 629 MW Outpost Solar project achieved commercial operation in September, joining Frye and the Jicarilla that are already producing in the country. We are now in the process of closing the partial divestment of this development, with cash-in expected in 2025.

Speaker #3: We will keep executing our business model based on building our projects from scratch and divesting in the early stages of production to optimize our financial structure and maximize returns.

Speaker #3: In the US , the 629 megawatt Outpost Solar project achieved a commercial operation in September , joining fry and the carriers that are already producing in the country .

Speaker #3: We are now in the process of closing the partial divestment of this development with caching expected in 2025 . In Spain and additional asset rotation is also under negotiation for a 700 megawatt renewable portfolio , of which , and that is an important fact .

Josu Jon Imaz: In Spain, an additional asset rotation is also under negotiation for a 700 MW renewable portfolio, of which, and that is an important fact seeing the current market situation, more than 400 are wind. Finally, earlier this month, we acquired an 805 MW wind pipeline with the end of hybridizing production at our combined cycle plant in Escatrón in the Spanish region of Aragon, securing the power supply for the future data center to be built in the area by after parts. Moving now briefly to a summary of the financial results. In this slide, you may find an overview of the figures that we have covered today. For further details, I encourage you to refer to the complete set of documents released this morning. Regarding our update outlook to the end of 2025.

Speaker #3: Seeing the current market situation more than 400 are going . Finally , earlier this month , we acquired an 805 megawatt wind pipeline with the aim of hybridizing production as our combined cycle plant in Saskatchewan in the Spanish region of Aragon , securing the power supply for the future data center to be built in the area by a third party .

Speaker #3: Moving now briefly to a summary of the financial results in this slide , you may find an overview of the figures that we have covered today .

Speaker #3: For further details, I encourage you to refer to the complete set of documents released this morning regarding our update outlook to the end of 2025.

Speaker #3: The cash flow from operations guidance remains unchanged at around €6 billion , with the benefit of a higher refining margin indicator . As I explained before , and this effect is going to be partially compensated by the lower price and weaker dollar net .

Josu Jon Imaz: The cash flow from operations guidance remains unchanged at around EUR 6 billion, with the benefit of a higher refining margin indicator, as I explained before. This effect is going to be partially compensated by the lower current price and weaker dollar. Net CapEx is unchanged at around EUR 3.5 billion. I have the ambition to put this figure below EUR 3.5 billion by the end of the year, subject to the timing of the divestment processes under execution. Upstream production remains at an estimate of around 550,000 barrels per day. We will allocate EUR 1.8 billion to shareholder remuneration, EUR 1.1 billion to cash dividends, and EUR 700 million to share buybacks to reduce capital at the higher end of our strategic cash flow from operations distribution range.

Speaker #3: CapEx is unchanged at around €3.5 billion. I have the ambition to put this figure below €3.5 billion by the end of the year, subject to the timing of divestment processes.

Speaker #3: Under execution . Upstream production remains at an estimate of around 550,000 barrels per day . We will allocate €1.8 billion to shareholders remuneration , a 1.1 billion to cash dividends and €700 million to share buybacks to reduce capital at the higher end of our strategic cash flow from operations , distribution range following July's second dividend payment , the total distributed in 2025 has been €0.975 and 8.3% increase over 2024 , a first capital reduction was carried out in July through the redemption of shares acquired for an equivalent amount of €350 million and a second capital reduction for the same amount will be executed before year end .

Josu Jon Imaz: Following July's second dividend payment, the total DPS distributed in 2025 has been EUR 0.975, an 8.3% increase over 2024. Our first capital reduction was carried out in July through the redemption of shares acquired for an equivalent amount of EUR 350 million. Our second capital reduction for the same amount will be executed before year-end. For this, a new buyback program was launched in September for the acquisition of shares for the equivalent of EUR 300 million, with the remainder, EUR 50 million, coming from the settlement of the 16 derivatives. In conclusion, Repsol is delivering on its commitments and the strength of our business model position us well to manage the uncertainties of the current environment.

Speaker #3: For this annual buyback program, which was launched in September for the acquisition of shares for the equivalent of €300 million, the remainder of €50 million is coming from the settlement.

Speaker #3: Of the 16 derivatives, in conclusion, Repsol is delivering on its commitments, and the strength of our business model positions us well to manage.

Speaker #3: The uncertainties of the current environment in the upstream are notable. We are improving the margin of the barrels we produce, bringing forward our growth projects, and upgrading the portfolio in industrial. We are capturing the positive momentum in refining while progressing on the transformation of our sites, building resilience to ensure the long-term sustainability of the business. The customer keeps increasing its cash contribution to the group.

Josu Jon Imaz: In the upstream, we are improving the margin of the barrels we produce, bringing forward our growth projects and upgrading the portfolio. In industrial, we are capturing the positive momentum in refining while progressing on the transformation of our sites, building resilience to ensure the long-term sustainability of the business. Customer keeps increasing its cash contribution to the group, helped by a successful multi-energy story and a growing power retail business in Iberia. In low carbon generation, we continue to deliver along our strategic lines, targeting free cash flow neutrality after factoring the proceeds generated by asset rotation. Ensuring strong distributions to our shareholders remains a key priority in our story of value growth. Always, of course, maintaining a clear commitment to our robust balance sheet and our net CapEx objectives.

Speaker #3: Helped by the U.S. multi-energy story and a growing power retail business in Iberia, as well as in low carbon generation, we continue to deliver our loan.

Speaker #3: Our strategic lines targeting free cash flow neutrality, after factoring in the proceeds generated by asset rotation, ensuring strong distributions to our shareholders remains a key priority in our history of value growth.

Speaker #3: Always , of course , maintaining a clear commitment to our robust balance sheet and our net CapEx objectives next year , after the share capital reduction executed in 2025 , our ordinary dividend per share will be around €1.05 euro per share .

Josu Jon Imaz: Next year, after the share capital reduction executed in 2025, our ordinary dividend per share will be around 1.05 EUR per share. I said around because that is going to depend on the exact figure of the shares we are going to redeem at the end of the current share buyback program. In 2026, the same key strategic principles will guide our path. After the release of our full year results in February. In light of the changes in the macroeconomic, regulatory, and business landscape that our industry has gone through, our capital markets day will be held in March, where we will provide updated projections to 2028. With this, I will turn it over to Pablo as we move on to the Q&A session. Thank you very much.

Speaker #3: I said "around" because that is going to depend on the exact figure of the shares we are going to redeem at the end of the current share buyback program in 2026. The same key strategic principles will guide our path after the release of our full year results in February.

Speaker #3: And in light of the changes in the macroeconomic , regulatory and business landscape that are industry has gone through a capital Markets Day will be held in March , and where we will provide updated projections to 2028 with this , I will turn it over to Pablo as we move on to the Q&A session .

Speaker #3: Thank you very much .

Speaker #2: Thank you very much, Jesse. Before opening the Q&A, I would like to kindly ask participants to limit yourselves to a maximum of two questions.

Pablo Bannatyne: Thank you very much, Josu Jon. Before opening the Q&A, I would like, kindly ask participants to limit yourselves to a maximum of two questions. If time permits, we will try to cover more in a second round. Of course, the IR team will be happy to assist you for any follow-ups afterwards. As usual, I would like the operator to remind us of the process to ask a question. Please go ahead.

Speaker #2: If time permits , we will try to cover more in a second round . Of course , the IR team will be happy to assist you for any follow ups afterwards .

Speaker #2: As usual, I would like the operator to remind us of the process to ask a question. Please go ahead.

Speaker #1: Thank you . If you would like to ask a question , you will need to press star one and one on your telephone and wait for your name to be announced .

Operator: Thank you. If you would like to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again.

Speaker #1: And to withdraw your question, please press *1 and then 1 again.

Speaker #2: Thank you, Operator. Let's get started with our first question. It comes from Mikael de la Torre at Goldman Sachs.

Pablo Bannatyne: Thank you, operator. Let's get started with our first question, comes from Michele Della Vigna, at Goldman Sachs.

Speaker #4: Thank you very much . And congratulations on the strong results and looking forward to the Capital markets . Day . Two questions , if I may .

Michele Della Vigna: Thank you very much. Congratulations on the strong results and looking forward to the capital markets day. Two questions, if I may. First, I wanted to focus a bit on biofuels, an area that you're growing very fast, but also where we're seeing a tremendous improvement in margins. I was wondering if you could lay out what is the contribution at the moment from that business and how big that could get next year with potentially further tightening with the RED III and also higher volumes in the second half of the year. Secondly, wanted to come back to Venezuela. You're building up receivables. There are clearly difficult situations with the US sanctions. I was wondering if there is any ongoing dialogue that could resolve that situation and allow you to take more Venezuelan cargos. Thank you.

Speaker #4: First , I wanted to focus a bit on biofuels , an area that you are growing very fast , but also where we're seeing a tremendous improvement in margins .

Speaker #4: I was wondering if you could lay out what the current contribution from that business is and how big that could get next year. We are further tightening with Red Three and also expecting higher volumes in the second half of the year.

Speaker #4: And then secondly, I wanted to come back to Venezuela. You are building up receivables there. Clearly, there are difficult situations with the U.S. sanctions.

Speaker #4: I was wondering if there is any ongoing dialogue that could resolve the situation and allow you to take more Venezuelan cargoes. Thank you.

Josu Jon Imaz: Michele. Going to your first question. I mean, next year, in 2026, taking into account the production we have in the co-process of our industrial activity, plus the operation of the C43, plus the second half of the year, where we are going to have a production coming from the retrofitting of Puertollano, and adding the trading activity of this biofuels, plus the commercial side, because you know that we already have 40% of our service stations commercializing this product. I mean, to give you only a reference, not at the current levels of margins, but if we take, roughly speaking, $800, I mean, I not giving, let me say, a guidance of prices because I don't have a crystal ball.

Speaker #3: Michel , going to your first question , I mean , a next year in 2026 , taking into account the production we have in the process of of our industrial activity , plus the operation of the C43 plus a the second half of the year where we are going to have a production coming from the retrofitting of Puertollano and adding the trading activity of of this biofuels , plus the commercial side , because you know that we already have a 40% of our service stations commercialized in this product .

Speaker #3: I mean , to give you a only a reference , not at the current levels of margins , but if we take , roughly speaking , $800 .

Speaker #3: I mean , I'm not giving , let me say , a guidance of prices because I don't have a crystal ball . But if we take $800 per per tonne as HBO minus UCO , a margin a for 2026 .

Josu Jon Imaz: If we take $800 per ton as HVO minus UCO margin for 2026, with all these concepts, we will capture EUR 125 million of EBITDA. I mean, roughly speaking, because that is not exactly, it could be a thumb rule, but you could add, roughly speaking, EUR 30, 35 million per every $100 per ton of margin. You have to take into account, Michele, you perfectly know, that after investing in Puertollano, we will have a capital employed in this business of around EUR 400 million. My point is that the business is performing in the right way. That is it's positive.

Speaker #3: A with all this concept , we will capture €125 million of EBITDA . I mean , roughly speaking , because that is not exactly it could be some rule , but you could add , roughly speaking , 30 , €35 million per every $100 per tonne of margin .

Speaker #3: You have to take into account . Mikhail , you perfectly know that after investing in Puertollano , we will have a capital employed in this business of around €400 million .

Speaker #3: So, my point is that the business is performing in the right way, and that is positive. If you ask me if I see the current margins staying for the coming months.

Josu Jon Imaz: If you ask me if I see the current margins stay for coming months, I mean, the normal situation will be to see some kind of going down of the margins, because we have had a lot of capacity out in turn-arounds program and so on in Europe. That will be the most logical. I mean, there is room to have a pretty good situation in this business. Going to Venezuela, I mean, let me say that as always, we are always to comply, and we comply with all laws and regulations applicable to our operations in Venezuela. You know that we are still there. We maintain our presence and production in Venezuela.

Speaker #3: I mean , the normal , the normal situation would be to see some kind of of of of going down of the margins because , I mean , we have had the a lot of capacity out in turnarounds program and so on in Europe .

Speaker #3: So that would be the most logical . But I mean , there is room to have a pretty good situation in this business going to , to Venezuela .

Speaker #3: I mean, let me say that, as always, we are always to comply and will comply with all laws and regulations applicable to our operations in Venezuela.

Speaker #3: You know that we are still there . We maintain our presence and production in Venezuela . We are producing gas , gas for for the domestic market is a main activity in Venezuela .

Josu Jon Imaz: We are producing gas for the domestic market, is our main activity in Venezuela. I could confirm you that we maintain a constructive and fully transparent dialogue with the US administration at the moment to try to ensure an stable framework for our activities. I mean, when I say an stable framework for our activities, this framework of course include viable mechanisms for monetizing our production. I mean, I'm not going to say that situation is okay because you know the difficulties that in political terms the country is experiencing. Let me say that I could confirm that we maintain this constructive and transparent dialogue with all the authorities, of course, including the American authorities. Michele.

Speaker #3: And I could confirm you that we maintain and we are keeping going , maintaining a constructive and fully transparent dialogue with the US administration at the moment to to try to ensure unstable framework for our activities .

Speaker #3: I mean , and when I say unstable framework for our activities , this framework of course , includes variable mechanisms for monetizing our production .

Speaker #3: So , I mean , I'm not going to say that situation is okay because , you know , the difficulties that are in political terms , the country is experiencing .

Speaker #3: But let me say that I could confirm that we maintain this constructive and transparent dialogue with all the authorities . Of course , including the American authorities .

Speaker #2: Thank you very much, Michel. Our next question comes from Alejandro Vigil at Banco Santander.

Pablo Bannatyne: Thank you very much, Mike Elle. Our next question comes from Alejandro Viki, Vigil at Banco Santander.

Speaker #5: Hello . Thank you for for taking my questions . The first one I'm very curious about this strategic update in March . Probably I'll have to wait for March to have a more details , but if you can elaborate about the the reason for this update , and you know , I'm potential moving parts of this strategic update .

Alejandro Vigil: Hello. Thank you for taking my questions. The first one, I am very curious about this study update in March. Probably I will have to wait for March to have more details, but you can elaborate about the reason for this update and, you know, on potential moving parts of this study update. The second question is about distributions. I agree that, you know, you know that you are delivering these distributions in line with your range. Considering the strong cash flow this year, on potentially good expectations for next year, if there is a potential upside in your share buyback program of EUR 700 million. Thank you.

Speaker #5: And and the second question is about distributions . And I agree that , you know , the you know , that you are delivering this distributions in line with your range .

Speaker #5: But considering the strong cash flow this year and potentially good expectations for next year , if there is a potential upside in your share buyback program of €700 million .

Speaker #5: Thank you .

Speaker #3: Gracias . Alejandro . I mean , I could confirm that . I mean , this strategic update that is a terminology discussion is obviously is irrelevant .

Josu Jon Imaz: Gracias, Alejandro. I mean, I could confirm that this strategic update, that is a terminology discussion, as always, is irrelevant, Alejandro, what I'm going to say. I mean, I prefer to talk about the capital market day because the strategy is defined and the strategy is written on the stone. That means that the priority is going to be the shareholder distribution as we define in February 2024, plus the strong balance sheet for Repsol, because for us it's very important, and a prevalent CapEx transforming and pushing in the growth process of the company. That is going to be the priority of the strategy that is going to go on from next March on. What is going to be the target?

Speaker #3: Alejandro . What I'm going to say . But I mean , I prefer to talk about the capital market day because the strategy is defined and the strategy is written on a stone .

Speaker #3: And that means that the priority is going to be the shareholder distribution, as we defined in February 2024, plus the strong balance sheet for Repsol, because for us, it's very important.

Speaker #3: And a present CapEx transforming and pushing in the growth process of the company. But that is going to be the priority of the strategy that is going to go on from next March.

Speaker #3: On . So what is going to be the target ? So you can't expect , let me say , surprises , because these three principles are going to be defined and written on Stone saying that the capital market day is going to try to give you because I mean , things , are changing in two years .

Josu Jon Imaz: You can't expect, let me say, surprises, because these three principles are going to be defined and written on the stone. Saying that, I mean, things, metrics are changing in two years, and giving you a clarity about 2026, 2027 and 2028 years in terms of all kind of operational and financial metrics. That is the end of the capital market day we are going to call for March. But again, the strategic principles are written on the stone. First, distribution for our shareholders, strong balance sheet, and a prevalent net CapEx.

Speaker #3: And giving you a clarity about 26 , 27 and 28 years . In terms of all kinds of operational and financial metrics . That is the aim of the capital market day .

Speaker #3: We are going to to to call for a march . So but again , the strategic principles are written on Stone . First distribution for shareholders , strong balance sheet and a private net CapEx that I mean , if you allow me , Alejandro , probably and you were right , the consensus of the market six months ago would be that we had problems to deliver this product CapEx in net CapEx terms , because the perception after 2025 and the first , sorry , 2024 and the first month of 2025 for the market could be and you were right that the CapEx effort was very high at the beginning of this strategic plan .

Josu Jon Imaz: That's, I mean, if you allow me, Alejandro, probably and you were right, the consensus of the market, 6 months ago could be that we had problems to deliver this prevalent CapEx in net CapEx terms. The perception after 2024 and the first month of 2025 for the market could be, and you were right, that the CapEx effort was very high at the beginning of this strategic plan. That was right because we were, let me say, paving the way for the growth for the previous work we were investing in, and we were taking advantage of the negligible debt we had at the end of 2023 for launching this view.

Speaker #3: That was right , because we were let me say , paving the way for the growth for the projects where we were investing in .

Speaker #3: And we were taking advantage of of the negligible debt we had at the end of 2023 for launching this view . But as you could see , I mean , at the end of September , net CapEx is at a figure of €2.5 billion .

Josu Jon Imaz: As you could see, I mean, at the end of September, net CapEx is at a figure of EUR 2.5 billion. Again, the target we have is EUR 3.5 billion for the end, or by the end, better said, of 2025, but my ambition is to be below this figure this year. Next two years, if you take, and that is going to be, probably speaking, what I have in mind, a figure close to this EUR 3.5 billion in 2026 and 2027, you could see that we are going to be in the low, low range of the net CapEx we defined in the range for our strategic plan, EUR 16, 19 billion. Today, our view is that we are going to be at around EUR 16 billion in this period.

Speaker #3: And again , the target we have is €3.5 billion for the end . By the end . Of 2025 . But my ambition is to be below this figure this year and next two years .

Speaker #3: If you take and that is going to be , roughly speaking , what I have in mind , a figure close to this €3.5 billion in 2026 and 2027 , you could see that we are going to be in the low , low range of the net CapEx .

Speaker #3: We defined in the range for our strategic plan , €1,619 billion today . Our view is that we are going to be at around €16 billion in this period .

Speaker #3: So we are going . Let me say to elaborate a bit more , all these figures that you could see in the figures of this quarter that we are on track of going in this direction .

Josu Jon Imaz: So we are going, let me say, to elaborate a bit more all these figures that you could see in the figures of this quarter that we are on track of going in this direction. So, mm, what you could expect, I mean, in terms of, uh, of, uh, general framework of distribution, and I said priority, we are going to be, of course, uh, in the range of, uh, uh, what you said, and you could be sure, uh, Alejandro, that, uh, in, uh, the, the, the, the current program, in the current market conditions is going to be delivered also next year. So, uh, but of course, I prefer to wait, uh, uh, a-a-and talk about that in March in the capital market day, but we are going to be in the range defined.

Speaker #3: So what you could expect in terms of , of general framework of distribution , and I said priority , we are going to be , of course , in the range of what you said , and you could be sure , Alejandro , that in the , the current program , in the current market conditions is going to be delivered also next year .

Speaker #3: So but of course , I prefer to wait a a and talk about that in March in the capital market day . But we are going to be in the range defined .

Speaker #3: And if we see a higher cash flow from operations and that could happen in the current environment where you could expect , of course , is going to be in that is going to go better in that direction .

Josu Jon Imaz: If we see a higher cash flow from operation, and that could happen in the current environment, what you could expect, of course, is going to go, better said, in that direction. Gracias, Alejandro.

Speaker #3: Gracias . Alejandro .

Speaker #5: Thank you .

Alejandro Vigil: Thank you.

Speaker #3: Excuse me . Sorry . This year , share buyback . Alejandro I forgot it . I mean , if we take €6 billion of and we are in the in the higher range , 30 , 35 of of of this of of of the range .

Josu Jon Imaz: Excuse me, sorry. This year's share buyback, Alejandro, I forgot it. I mean, if we take EUR 6 billion and we are in the higher range, 30, 35 of the range, I mean, it's true that we are going to have probably, as I mentioned before, a higher refining margin. What I'm seeing for this Q4 in terms of Repsol refining margin is going to be probably in the double digit, is how I see the refining margin of Repsol in this Q4 at double digits. If you take this figure, I mean, we could add, let me say, probably speaking $200 million more to the expectations we had, the guidance we had before.

Speaker #3: I mean, it's true that we are probably going to have, as I mentioned before, a higher refining margin. What I'm seeing for this fourth quarter in terms of Repsol S.A. refining margin is that it's going to be probably in the double digits; it's how I see the refining margin of Repsol in this fourth quarter, a double digit.

Speaker #3: But if you take this figure , I mean , we could add , let me say , roughly speaking , $200 million more to the the expectations we had , the guidance we had before is true that the dollar euro exchange rate is showing us a weaker dollar .

Josu Jon Imaz: It's true that the dollar, euro exchange rate is showing us a weaker dollar. That is, I mean, reducing a bit also the cash flow from operations for our businesses and slightly weaker Henry Hub, comparing with the $4 million BTU of last guidance. I mean, all in all, it could be possible to be above these EUR 6 billion I mentioned before as guidance, but the figure is going to be negligible. I mean, you are going to understand that if we are EUR 140 million above this figure, I mean, we are not going to be open a program of EUR 40, 30 or 50 million.

Speaker #3: So that is I mean , reducing a bit . Also , the cash flow from operations for our businesses and slightly weaker Henry Hub , comparing with the $4 million of our last guidance .

Speaker #3: I mean, all in all, it could be possible to be a vote on this €6 billion I mentioned before as guidance.

Speaker #3: But the figure is going to be negligible . And I mean , you are going to understand that if we are a 100 , €140 million of evolve , this figure , I mean , we are not going to be to open a program of of 40 , 30 or €50 million .

Speaker #3: So , I mean , we prefer to say that is over the year 2025 and we talk about that in March , but always under the same principle .

Josu Jon Imaz: I mean, we prefer to say that is over, the year 2025, and we talk about that in March, but always under the same principle we are applying now. Thank you. Okay.

Speaker #3: We are applying now. Thank you.

Speaker #6: Yes .

Speaker #2: Thank you very much for your question . Our next question comes from Alejandro Pozzi at Mediobanca .

Pablo Bannatyne: Thank you very much for your question. Our next question comes from Alessandro Pozzi at Mediobanca.

Alessandro Pozzi: Yeah, good afternoon, all, and thank you for the questions. The first one is on the refining margin outlook. You mentioned the spot prices into the double digits. What is your view for the rest of the year and going into 2026? Do you think the current, let's say, strength is driven more by lack of products, or is it concerns around the availability of diesel maybe in 2026? More of a panic buying right now. The second question is on capital allocation. Clearly, customer is delivering a much better result.

Speaker #7: Yeah . Good afternoon all and thank you for the questions . The first one is on the refining margin outlook . You mentioned the spot prices into the double digits .

Speaker #7: What is your view for the rest of the year ? And going into 2026 , do you think the current say strength is driven more by lack of products ?

Speaker #7: Or is it a concerns around the availability of diesel ? Maybe in 2026 ? So more of a panic buying right now . And the the second question is on capital allocation .

Speaker #7: Clearly, the customer is delivering much better results. As you look at 2026 and 2027, where do you think are the areas of the business that can give you a better return, and where can you probably increase CapEx in the next couple of years?

Alessandro Pozzi: As you look at 2026 and 2027, where do you think are the areas of the business that can give you a better return and where you can probably increase CapEx in the next couple of years? Thank you.

Speaker #7: Thank you .

Speaker #3: Alesandro I mean , starting by your first question related to refining margin , of course . Let me underline that is evident , but I'm going to repeat that I don't have a crystal ball , but analyzing from our experience and the the facts and the indications , we are seeing in the market , I'm going to to jump a bit into the unexplored arena of sin .

Josu Jon Imaz: Grazie, Alessandro. I mean, starting by your first question related to refining margin, of course, let me underline that it's evident, but I'm going to repeat, that I don't have a crystal ball. Analyzing from our experience and the facts and the indications we are seeing in the market, I'm going to jump a bit into the unexplored arena of seeing what is going to happen with refining margins. First, current evidence. I mean, as of today, this year, we have $7.1 per barrel in our system. This month, in October, this figure is at around $9.8 per barrel. This week, I mean, what we have seen is something in between $12 and $14 per barrel. That's our facts. What is behind that?

Speaker #3: What is going to happen with refining margins ? So first , current evidence , I mean , as of today , this year we have $7.1 per barrel in our system .

Speaker #3: This month , in October , this figure is at around $9.8 per barrel . And this week , I mean , what we are seeing is something in between $1,214 per barrel .

Speaker #3: That's our facts . What is behind that ? My perception is that we have two drivers and both drivers pushing this direction . Demand and supply .

Josu Jon Imaz: My perception is that we have two drivers, and both drivers pushing in this direction, demand and supply. Supply is crystal clear. New refining projects in the Atlantic Basin, they continue facing delays and operational problems. You know, Olmeca in Mexico, my perception is the problem of Olmeca is not going to be solved in the short term, so that could go on next year. Dangote is having operational problems that is going to be probably solved by 2026. In the midst, we have seen everything we talked about that, remember, in February, when I said that we were seeing, probably speaking, 1 million barrels a day of discontinuing activities in the refining in the world.

Speaker #3: Supply is crystal clear . I mean , new refining projects in the Atlantic basin , they are gone . They . Continue facing delays and operational problems .

Speaker #3: And , you know , Omega in Mexico , my perception is that the problem is not going to be solved in the short term .

Speaker #3: So that could go on next year . Dangote is having operational problems . That is going to be probably solved by 2026 . In the midst we have seen , I mean , everything we talk about that remember in February when I said that we were seeing , roughly speaking , 1 million barrels a day of discontinuing activities in the refining in the world .

Speaker #3: I mean , in Europe , vessel in in Germany and Grangemouth in the UK . They are they are close on track in the case of of Lindsay Houston and Los Angeles , also in in the US Dalian in China , Osaka in Japan , Kwinana in Australia .

Josu Jon Imaz: I mean, in Europe, Wesseling in Germany, Lindsey and Grangemouth in the UK, they are close on track in the case of Lindsey. Houston and Los Angeles also in the US, Dalian in China, Osaka in Japan, Kwinana in Australia. I mean, all that is going to add more than 1 million barrels a day of less production. We said that new projects this year, they were going to be slightly above 1 million barrels a day. With the operational problems I mentioned before, in the case of Dangote and Olmeca, this figure is lower.

Speaker #3: I mean all that is going to add more than 1 million barrels a day of less production that we said that new projects this year , they were going to be slightly above 1 million barrels a day , but with the operational problems I mentioned before in the case of Dangote and Omega , this figure is lower .

Speaker #3: And I mean , there is a new , let me say , a new fact over the last 2 or 3 months that due to the attacks on Eastern European refineries , the best approach we could have today and again , that is not easy to be reported in an accurate way because I mean , in our situation , the truth is sometimes hidden , but probably a figure close to a 37 , 38% of the refining capacity in Russia has been attacked and probably a figure close to a 25% of the total capacity could be out of operation .

Josu Jon Imaz: I mean, there is a new, let me say, a new fact over the last two, three months that due to the attacks on Eastern European refineries, the best approach we could have today, and again, that is not easy to be reported in an accurate way because, I mean, in a war situation, truth is sometimes hidden. Probably a figure close to a 37%, 38% of the re-refining capacity in Russia has been attacked, and probably a figure close to a 25% of the total capacity could be out of operation. We are speaking about a very important figure. That is 1.5 million barrels a day, fully unexpected.

Speaker #3: So we are speaking about a very important figure . That is 1.5 million barrels a day , fully unexpected . On top of that , we are seeing that over the last two , three years in a very unfair way for competition refiners from China , India and so on .

Josu Jon Imaz: On top of that, we have seen that over the last 2, 3 years, in a very unfair way for competition, refiners from China, India and so on, they were taking advantage of not fulfilling the sanctions against the Russian oil. They were buying cheap Russian oil, refining this oil, and putting this product in a very unfair competition way in the European market. Thanks to the policies of the European Union and the Trump administration related to enforce sanctions against this unfair way, all that is going to have an impact in the market. I mean, if we go to the demand, I mean, demand is growing, that is also a fact. Will be EUR 0.6, EUR 0.7 million barrels a day this year.

Speaker #3: They were taking advantage of not fulfilling the sanctions against Russian oil. They were buying cheap Russian oil, refining this oil, and putting this product in a very unfair competitive way in the European market.

Speaker #3: Thanks to the policies of of the European Union and the the Trump administration . Related to enforce sanctions against this unfair way , all that is going to have an impact in the market .

Speaker #3: I mean , if we go to the to the demand , I mean , demand is growing . That is also a fact would be 0.6 , 0.7 million barrels a day this year in our markets .

Josu Jon Imaz: In our markets, we are experiencing a high demand, as you could see in our commercial businesses. We have to say that, I mean, we are still, we are not already in the European coal season. I mean, European coal season is going to increase pressure on diesel. If we add to that the new ECA regulation in the Mediterranean that are effective from 1 May, that are boosting marine gas oil demand. At the same time, we are seeing that gasoline is also strong because the new hybrids that they consume a lot of gasoline and so on. I mean, again, I don't have a crystal ball, but I'm comfortable.

Speaker #3: We are experiencing in a high demand , as you can see in in our commercial businesses . And we have to say that , I mean , we are still we are not already in the European Coal system .

Speaker #3: I mean , the European coal system is going to increase pressure on diesel if we are to that , the new ECA regulation in the Mediterranean that are effective from May 1st , that are boosting the margin , marine gas , oil demand .

Speaker #3: At the same time , we are seeing that the gasoline is also a strong because the new hybrids that they consume a lot of gasoline and so on .

Speaker #3: I mean, again, I don't have a crystal ball, but time is comfortable. It's not a commitment because it's not in my hands.

Josu Jon Imaz: It's not a commitment because it's not in my hands, of course, we are going to see an average of double digit in Repsol this quarter. I mean, a refining margin of, with a double digit. I mean, jumping into 2026 is more complex, I could say that the $6 per barrel we saw one year ago for 2026, I mean, we are going to be clearly above this figure. Probably the Q1, we are going to experience a similar situation, we are going to experience the Q4 of the year. We could see probably in the second half a more normal market in terms of supply.

Speaker #3: Of course . But we are going to see an average of double digit in , in in Repsol , this , this , this quarter .

Speaker #3: I mean , refining margin of with a double digit . I mean , jumping into the 2026 is more complex . But it I would say that the $6 per barrel , which we saw one year ago by for 2026 , I mean , we are going to be clearly above this figure , probably the first quarter .

Speaker #3: We are going to experience a similar situation . We are going to experience the fourth quarter of the year . We could see probably in the second half , a more normal market in terms of supply .

Speaker #3: But all in all , I think that I mean , seen margins of , I don't know , seven , $8 per barrel over 20 , 26 is not going to be a surprise for for me , going to the the capital allocation on the 2026 2027 .

Josu Jon Imaz: All in all, I think that's, I mean, seeing margins of $6, I don't know, $7, $8 per barrel over 2026 is not going to be a surprise for me. Going to the capital allocation on the 2026, 2027, we are going to see, I mean, good results and improvement, clearly speaking in Upstream, new barrels, Leon-Castile, already in operation. Alaska, that is going to start the operation at the end of, or the first part, better said, or the Q1. UK, where the improvement is going to be clear. Better margins, new barrels, more production, 570,000 barrels a day, roughly speaking.

Speaker #3: We are going to see , I mean , good results and improvement . Clearly speaking , in the upstream new borrowers , Leon-castile already in operation .

Speaker #3: Alaska . That is going to start the operation at the end of of of the first part . Of the first quarter . UK where the improvement is going to be clear .

Speaker #3: So better margins , new barrels , more production , 570,000 barrels a day , roughly speaking . We will clarify this figure in in the capital market day .

Josu Jon Imaz: We will clarify this figure in the capital market date, that we are going to be at around this figure. A clear improvement in the Upstream. Going to the industrial, as I mentioned before, a better bios margin. Puertollano, the retrofitting in operation, a higher refining margin. I mean, I know that there is, and I have a concern related to the chemical business because the performance and what we are suffering in the market is very negative. We have a competitiveness program that we are enforcing new margins, reduction of energy costs, cost reduction. On top of that, we are going to see Sines, so the derivative chemical, even in this acid margin, adding at around EUR 80 million of new EBITDA in a year.

Speaker #3: But we are going to be at around this figure and a clear improvement in the upstream going to the industrial , as I mentioned before , a better bias margin portolano the retrofitting in operation , a higher refining margin , and I mean , I know that there is and I have a concern related to the chemical business because the performance and what we are suffering in the market is very negative .

Speaker #3: We have a competitiveness program that we are enforcing: new margins, reduction of energy costs, and cost reductions on top of that. On top of that, we are going to see sinners.

Speaker #3: So the derivative chemicals, even in this asset margin, are adding around €80 million of new EBITDA in a year. We also have the ultra-high molecular weight polyethylene plant in Puerto Llano.

Josu Jon Imaz: We also have the ultra-high molecular weight polyethylene plant in Puertollano. All in all, the commitment I have with my board is that next year, in this ACID margin scenario, with no, let me say, tailwind, pushing margins, we could be EBITDA neutral in 2026, and we will have in 2027 a positive result in the chemical business. Again, at the current bad margins environment, of course, any tailwind coming from the point of view of margins is going to improve this figure. In the customer, growth is going to go on because... I mean, it's not because of market situation, it's structural, because we are entering new businesses. Retail, power and gas is a new business where we are growing.

Speaker #3: So all in all , the commitment I have with my board is that next year in this asset margin scenario . So with no let me say a tailwind pushing margins , we could be a bit neutral in 2026 .

Speaker #3: And we will have in 2027 a positive result in the chemical business . Again at the current bad margins environment , of course , any tailwind coming from the point of view of margins is going to improve this .

Speaker #3: This figure in the customer growth is going to go on because , I mean , it's not because some market situation , it's structural because we are entering new businesses , retail power and gas .

Speaker #3: It's a new business where we are growing. We already have €200 million in EBITDA and are gaining 3 million customers this year.

Josu Jon Imaz: We already have EUR 200 million of EBITDA and growing 3 million customers this year. Probably next year, we will be at around 3.5 million customers. That is, or we could be close to this figure, but we have a clear growth roadmap. We are growing in lubricants. In air aviation, I mean, if you check the figures in Iberia, we are in historical flights, overcoming year after year the figures we have. We are growing in the non-oil, as I mentioned before. This EUR 1.4 billion of this year is going to be a figure close to EUR 1.5 billion of EBITDA in this business by 2026.

Speaker #3: Probably next year we will be at around 3.5 million customers . That is , or we could be close to this figure that we have a clear growth roadmap .

Speaker #3: We are growing in lubricants in aviation . I mean , if you check the figures in Iberia , we are in historical flights , a overcoming year after year .

Speaker #3: The figures we have , we are growing in the non-oil . As I mentioned before . So this €1.4 billion of this year is going to be a figure close to €1.5 billion of EBITDA in this business by 2020 .

Speaker #3: Six , and I mean , you see in in low carbon businesses , I mean in power generation , you could see that we are improving the result .

Josu Jon Imaz: I mean, you're seeing in low carbon businesses, I mean, in power generation, you could see that we are improving the result. We will see ups and downs, but there is a clear structural trend. Why? Because we are reducing our costs, our unitary costs, because we have a business to operate more gigawatts, and month after month, we are adding new production. The unitary cost is going to be reduced in coming months and in coming years. On top of that, with difficulties at the beginning in the US, the rotation business, the rotation game is going to go in the right direction because the projects we have Outpost has a higher PPA than Frye. Pennington has a higher PPA than Outpost.

Speaker #3: We will see ups and downs . But there is a clear structural trend . Why ? Because we are reducing our cost , our unit cost because we have a business to operate more gigawatts and month after month we are adding new production .

Speaker #3: So the unit cost is going to be reduced in coming months . And in coming years . On top of that , with difficulties at the beginning in the US .

Speaker #3: But the rotation business , the rotation game is is going to go in the in the right direction because the projects we have outpost has a higher PPA than fry .

Speaker #3: Pennington has a higher PPA than the than than than outpost . That means that things are going the right direction . These nine months .

Josu Jon Imaz: That means that things are going in the right direction. These nine months, if you take the total concepts, you could see that this business is close to be neutral in cash terms. I mean, that is not going. It's not structural. We are going to have, in coming months, I mean, capital needs for this business. We are not going to be far in the period of a capital market day define to see that this business could be able to grow with a minimum capital commitment from Repsol, because it's starting to work, the model. My point is that this EUR 3.5 billion is going to be deployed in a pro-proven way in these businesses, reducing, let me say, a slightly effort in the EMP because the projects are already on track.

Speaker #3: If you take the the the total concepts , you could see that this business is close to be neutral in cash terms . I mean , that is not going it's not a structural we are going to have in coming months .

Speaker #3: I mean , capital needs for this business . But we are not going to be far in the period of a capital market day .

Speaker #3: Define to see that this business could be able to grow with a minimum capital commitment from Repsol , because it's a starting to work the model .

Speaker #3: So my point is that this €3.5 billion is going to be deployed in the way in this businesses reducing , let me say , a slightly different in the EMP because the projects are already on track in the industrial business .

Josu Jon Imaz: In the industrial business, we will put in track the projects I mentioned before. Customer business, I mean, is investing, but the investment level intensity is lower than in some other businesses. In the case of renewable power, this effort, let me say, has an asymptotic direction towards being neutral in cash terms. Are we going to achieve this target in 2026? Probably not. This time is not far. Thank you.

Speaker #3: We will put in track the projects . I mentioned before . Customer business . I mean , is investing , but the investment level in intensity is lower than in some other businesses .

Speaker #3: And in the case of renewable power , this effort , let me say , has an asymptotic direction towards being neutral in cash terms .

Speaker #3: I will going to achieve this target in 2026 . Probably not , but this this time is not far . So thank you .

Speaker #7: Thank you for the answer .

Alessandro Pozzi: Thank you for the answer.

Speaker #2: Thank you very much , Alessandro . Our next question comes from Biraj Borkhataria at RBC .

Pablo Bannatyne: Thank you very much, Alessandro. Our next question comes from Biraj Borkhataria, at RBC.

Speaker #8: Hi . Thanks for taking my questions . The first one just on refining . I might have missed this , but I understand you have no maintenance in Q4 , but you're able to give a bit more detail on the first half of 26 .

Biraj Borkhataria: Hi. Thanks for taking my questions. First one, just on refining, I might have missed this, but I understand you have no maintenance in Q4, but are you able to give a bit more detail on the first half of 2026? Just thinking about your ability to capture, you know, $13, $14 refining margins over the coming months if that was to persist. Second question is just on the financials. There is a very significant difference between P&L tax and the cash tax you pay, and the gap seems to be getting wider. Just trying to understand if there's any particular reason why those two numbers won't converge over time. Any color there would be helpful. Thank you.

Speaker #8: I'm just thinking about your ability to capture , you know , 13 , $14 refining margins over the coming months . If that was to persist , and then second question is just on the financials , there is a very significant difference between PNL tax and then the cash tax you pay and the gap seems to be getting wider .

Speaker #8: Just trying to understand if there's any particular reason why those two numbers won't converge over time . So any color there would be helpful .

Speaker #8: Thank you .

Speaker #3: Thank you . I mean , going to your first question , I mean , let me say that this quarter in 2025 , what I have in mind is that we are only to turn around the one crude unit in Puerto Llano and the breaker , I mean , breaker with my whole respect to this unit , because its fuel production is negligible in Tarragona .

Josu Jon Imaz: Thank you, Biraj. I mean, going to your first question, I mean, let me say that this quarter in 2025, what I have in mind is that we are only to turn around the one crude unit in Puertollano and the visbreaker. I mean, visbreaker, with my whole respect to this unit, because its fuel production is negligible in Tarragona. That is going to be the only turnaround campaign this quarter. If we go to 2026, what we have in the program, I mean, excepting some hydrodesulfurization units, some catalyst changes and so on that are negligible in days terms, the only large turnaround campaigns are Coruña, that is the smallest of our refinery, where we are going to have the conversion units maintenance.

Speaker #3: So that is going to be the only turnaround campaign this this quarter . If we go to 2026 , what we have in the program , I mean , accepting some hydrodesulfurization units , some catalysts , changes and so on that are negligible in , in , in days terms , the only a large turnaround campaigns are Corunna .

Speaker #3: That is the smallest of our refinery where we are going to have a the conversion units maintenance that is going to stay for something in between 4050 days in the in 2026 and in petronor .

Josu Jon Imaz: That is going to stay for something between 40, 50 days in 2026. In Petronor, we are going to maintain the cocker, and the cocker will stay out of service for 40 days more or less. I mean, that is the only any kind of a significant maintenance campaign, neither in Cartagena nor in Tarragona. As I said before, some, I mean, catalyst changes, a hydrodesulfurization unit, but I mean, nothing relevant. Let me say that if we see this historical, what is programmed, because that, yeah, a program could happen, I hope that we, and I expect we could cope with any incidents in this sense.

Speaker #3: We are going to maintain the Coker and the coker could stay out of service for a 40 days more or less . I mean , that is the only in any kind of significant maintenance campaign .

Speaker #3: Neither in Cartagena nor in Tarragona . As I said before . I mean , catalyst changes a hydrodesulfurization unit . I mean , nothing relevant .

Speaker #3: And let me say that if we see this historically, what is program, you know that the program could happen. I hope, I hope that and I expect we could cope with any incidents in this sense.

Speaker #3: But when we analyze the historical terms in historical terms , the turn around campaigns is going to be a quite soft year in terms of of of of maintenance campaign in coming 15 months .

Josu Jon Imaz: When we analyze the historical terms, in its historical terms, the turnaround campaigns, it's going to be a quite soft year in terms of maintenance campaign in coming 15 months. Going to your second question, of course, you will check the figure in a more accurate way with our IR team, but there is no anything relevant to report related to the PNL in tax and in cash. We are, of course, optimizing, as always, credit tax positions. You know that because we are investing hard, we have a lot of tax credits because the investment we are developing or in some jurisdictions, I don't know, the UK and some others, because the losses of the past.

Speaker #3: Going to your second question , of course , you will check the figure in a more accurate way with our with our IR team .

Speaker #3: But there is no anything relevant to report related to the PNL in tax and in cash . We are , of course , a optimizing , as always , credit tax positions .

Speaker #3: You know that because we are investing hard , we have a a lot of tax credits because the investment we are developing or in some jurisdictions , I the UK and some others because the the losses of the past and probably in the whole year 2025 , we will have a figure close to €800 million at the end of the year .

Josu Jon Imaz: Probably in the whole year, 2025, we could have a figure close to EUR 800 million at the end of the year. Again, we are trying to optimize these figures and, trying to use the credit tax positions, we have. That's clear.

Speaker #3: But , but again , we are trying to optimize these figures and trying to use the credit tax positions . We have solved .

Speaker #3: That's clear .

Speaker #2: Okay . Thank you . Thank thank you . Our next question comes from Guilherme Levy at Morgan Stanley .

Guilherme Levy: Okay. Thank you.

Biraj Borkhataria: Okay. Thank you.

Pablo Bannatyne: Thank you, Biraj. Our next question comes from Guilherme Levy at Morgan Stanley.

Speaker #9: Hi . Good morning . Two questions from me , please . The first one thinking about the next steps around the listing of the empty subsidiary in the US .

Guilherme Levy: Hi. Good morning. Two questions from me, please. The first one, thinking about the next steps around the listing of the young piece of video in the US. You of course, started to talk about a potential reverse takeover process. I was wondering if there are any particular features that you would like to see in a potential target to be taken over in the US, if exposure to either gas, oil, or to any particular basin would be preferred. Second one, also in the US, can you provide us some color in terms of the hedges that you currently have on gas prices over the coming quarters? Thank you.

Speaker #9: You, of course, started to talk about a potential reverse takeover process. So I was wondering if there are any particular features that you would like to see in a potential target to be taken over in the U.S.?

Speaker #9: If exposure to either gas , oil or to any particular basin would be preferred , and then a second one also in the US , can you provide us some color in terms of the hedges that you currently have on gas prices over the coming quarters ?

Speaker #9: Thank you .

Josu Jon Imaz: Thank you, Guilherme. I mean, we are preparing the company for being ready for a liquidity event in 2026. As I mentioned before, in July, liquidity event could mean, first, an IPO, a reverse merge with a company listed in the US, a new private investor entering in Repsol. I mean, that's the broad meaning of liquidity event. Again, for me here is more important the road and the journey than the end. That means that we are putting all the effort first in having a better Upstream business with better barrels. We are delivering in terms of improving the portfolio. We are in less countries, in better jurisdictions with better barrels.

Speaker #3: Thank u . Guillermo . I mean , we are preparing the company for being ready for a liquidity event in 2026 . As I mentioned before , in in July , liquidity event could mean a first on IPO , a a reverse merger with a company listed in the US , a new private investor entering in Repsol .

Speaker #3: So I mean , that's the broad meaning of liquidity event . And again , for me here is more important . The road and the journey at the end .

Speaker #3: That means that we are putting all the effort first in having a better upstream with better barrels. We are delivering in terms of improving the portfolio.

Speaker #3: We are in less countries , in better jurisdictions with better barrels . When I say better barrels in terms not only of of more sustainable barrels , but also in terms of higher cash flow from operations per barrel , we are putting on track the projects .

Josu Jon Imaz: When I say better barrels, in terms not only of more sustainable barrels, but also in terms of higher cash flow from operation per barrel. We are putting on track the projects. That is very important. In a period that has been complex in terms of inflation and so on in the market, we have been able to put projects on track. That happened in September with Leon-Castile, and it's going to happen in coming 3 months with Alaska. That is the full focus of the company in this sense. On top of that, we are working internally in all the requirements, I mean, reporting and so on, to be prepared for any event in this direction. Again, we are not in a hurry. We don't need any proceed coming from this liquidity event.

Speaker #3: That is very important in a period that has been complex in terms of inflation and so on. In the market, we have been able to put projects on track.

Speaker #3: That is happened , happened in September and is going to happen in coming three months with , with , with Alaska . So that is the full focus of the company in this sense .

Speaker #3: On top of that, we are working internally on all the requirements. I mean, reporting and so on, to be prepared for any event in this direction.

Speaker #3: But again , we are not in a hurry . We don't need any proceeds coming from this liquidity event . We are seeing that day after day .

Josu Jon Imaz: We are seeing that day after day, we are improving the quality of our upstream. That means that we will be prepared, alongside, 2026. We are fully aligned with our partner, EIG, in this strategy. Of course, we will be ready to take advantage of any opportunity in the market. Not being in a rush, not jumping any opportunity that could appear in the horizon, and having crystal clear that maintaining the control on the 51% of the stakes in this business. Consolidating this business is a baseline for Repsol. We are going to own in this way. Going to some color about the gas.

Speaker #3: We are improving the quality of our upstream . That means that we will be prepared alone . Side A 2026 . We are fully aligned with our partner in this strategy , and of course we will be ready to take advantage of any opportunity in the market .

Speaker #3: But not being in a rush , not jumping any opportunity that could appear in in the horizon and having crystal clear that maintaining the control and the 51% of the stake in this business .

Speaker #3: So consolidating this business is a redline for Repsol . So we are going to own in this in this , in this way going to some color about the the gas for I mean in 2025 we have 55% of the volumes a hedged already with a color with no cost , 36.1 so capturing all the value guaranteeing the $3 million and capturing all the value .

Josu Jon Imaz: I mean, in 2025, we have a 55% of the volumes hedged already with a caller with no cost, 3, 6.1. Capturing all the value, guaranteeing the $3 million BTU and capturing all the value up to 6.1. Next year, if we go to Q1, we have a 20% of the production in Q1 in a caller, 3.5, 12.3. That's just for pricing figure, but I mean, it was done with no cost. That means that we are guaranteeing the $3.5 million BTU and capturing all the price to $12 per million BTU.

Speaker #3: Up to 6.1 a next year . If we go to the first quarter , we have a 20% of the production in the first quarter in a color , a 3.5 , 12.3 , that is just surprising figure .

Speaker #3: But I mean , it was done with no cost . That means that we are guaranteeing the 3.5 million BTU a capture in all the the price to $12 per million BTU .

Speaker #3: On top of that , we have a color of over the whole production of 2026 , covering a 52% of the production with a floor of 3.2 and capturing the value up to 5.1 million BTU , and in 2027 , we have already hedged at 12% of of the production .

Josu Jon Imaz: On top of that, we have a caller over the whole production of 2026, covering a 52% of the production with a floor of 3.2 and capturing the value up to $5.1 million BTU. In 2027, we have already a hedge at 12% of the production. With a floor of 3 and capturing the price up to $5.8 per million of BTU. Let me say, as I summarize, we are comfortable because we are guaranteeing a minimum that is going to give us a return we expect in the gas production we have, and on top of that, we have plenty of room to capture any upside appearing in the market. Thank you, Guilherme. Thank you.

Speaker #3: That is , with with a floor of three and capturing the price up to $5.8 per million BTU . So let me say , as I summarize , we are comfortable because we are guaranteeing a minimum that is going to give us a return .

Speaker #3: We expect in the gas production we have . And on top of that , we have plenty of room to capture any upside appearing in the market .

Speaker #3: Thank you . Guilherme .

Speaker #9: Thank you .

Speaker #2: Thank you very much . Our next question comes from Ignacio Doménech at G capital . Please . Go ahead with your question .

Pablo Bannatyne: Thank you very much, Guilherme. Our next question comes from Ignacio Domenech at JB Capital Markets. Please, Ignacio, go ahead with your question.

Speaker #10: Hi . Yes , thank you for taking my questions . Just a question on asset rotation , both on upstream and on renewables .

Ignacio Domenech: Hi. Yes, thank you for taking my questions. just a question on asset rotation, both on upstream and on renewables. starting with upstream, there was news now regarding potential asset rotation in Pikka, in Alaska. I was wondering if you are comfortable with your stake there, or you are planning to dilute part of the exposure to the asset. in terms of asset rotation in Spain, just wondering if you've seen any change in appetite, just thinking about the 700 megawatt portfolio you are planning to rotate. Thank you.

Speaker #10: So starting with a upstream , there was some some news regarding potential asset rotation in in in Alaska . So I was wondering if you are comfortable with your stake there or you're planning to dilute part of the of the exposure to the asset .

Speaker #10: And then in terms of asset rotation in Spain , just wondering if you've changed any if you've seen any any change in in appetite , just thinking about the the 700 megawatt portfolio , you are planning to rotate .

Speaker #10: Thank you .

Speaker #3: Gracias , Ignacio . Thank you . So going to your first question , I don't have any appetite to divest in the upstream business .

Josu Jon Imaz: Gracias, Ignacio. Thank you. Going to your first question, I don't have any appetite to divest in the Upstream business. We are comfortable with the position we have in the Upstream business. We are an oil and gas company. We are adding barrels. We are adding new barrels. Probably let me say that Alaska is a company maker asset in terms not only of because the barrels we are going to start producing in 2026, but because the potential growth that this asset in Pikka Phase 2, in Kuparuk and so on, could have around the carbon production in lands and fields that are already in the hands of the JV we have with Santos.

Speaker #3: We are comfortable with the position we have in the upstream business . We are an oil and gas company . We are adding buffers .

Speaker #3: We are adding new buffers and probably let me say that Alaska is a company maker asset in terms not only of because the the barrels we are going to start producing in 2026 , but because the the potential growth that this asset in Pikachu in Cork and so on could have around the current production in lands and fields that are already in the hands of , of of the JB .

Speaker #3: We have with Santos . So , I mean , we have always to consider any option because I mean , the portfolio is has to be managed .

Josu Jon Imaz: I mean, we have always to consider any option because, I mean, the portfolio has to be managed. Today I don't have any appetite to dispose or divest Alaska. I mean, I need, let me say, a real, very high figure to consider any option for that because, I mean, we are very happy and we are very close to the first oil. We are going to start monetizing this asset in three months. We will consider, as always, any option in any asset. To date, we don't have any target and any appetite to divest any asset in the upstream of Repsol. Going to the renewable asset rotation in Spain, I mean, we have seen a positive appetite.

Speaker #3: But today I don't have any appetite to dispose of divest Alaska , I mean and I need let me say , a real .

Speaker #3: Very high figures to consider. Any option for that? Because, I mean, we are very happy, and we are very close to the first oil.

Speaker #3: So we are going to to start monetizing this asset in three months . So we will consider , as always , any option in any asset that to date we don't have any target and any appetite to divest any asset in the upstream or Repsol .

Speaker #3: A going to the renewable asset rotation in Spain . I mean , we have seen a positive appetite , but it's curious if you are analyzing nothing and you perfectly know the Spanish renewable business , we have been able to rotate in in a very successful way all the processes we have had over the last four years .

Josu Jon Imaz: It's curious because if you are analyzing nothing and you perfectly know the Spanish renewable business, we have been able to rotate in a very successful way all the processes we have had over the last 4 years. Remember that the last one happened 8 months ago, roughly speaking, with Green Coat in a basket of assets that what I have in mind was that they were at around 400 or 500 MW in Spain.

Speaker #3: And remember that the last one happened eight months ago , roughly speaking , a we are green coat in in in in a basket of assets that what I have in mind was that they were at around 400 , 500MW in Spain .

Speaker #3: And we are seeing a very high appetite for these assets because , I mean , you know , that today , 400 new operational production in green in Spain is acquired , scarce assets because you know , that green is able to capture the the prices over the whole day , capturing also high prices in some parts of the day .

Josu Jon Imaz: We are seeing a very high appetite for these assets because, I mean, you know that today 400 new operational production in wind in Spain is a quite scarce asset because, you know that wind is able to capture the prices over the whole day, capturing also high prices in some parts of the day. The advantage of the minority part of this basket of assets that is solar, is that the PPAs are already there and are very good PPAs because they were negotiated in the, I mean, 2 years ago, roughly speaking, in the high peak of the crisis, energy crisis in Spain, when there was Spain and Europe, when there was a strong appetite to negotiate PPAs.

Speaker #3: And the advantage of the minority minority part of this basket of assets , that is solar , is that the PPAs are already there and are very good PPAs because they were negotiated in the I mean , two years ago , roughly speaking , in the high peak of the crisis , energy crisis in Spain when there was Spain and Europe , when there was a strong appetite to negotiate PPA , very good asset with very good PPAs , with very good mix of wind , solar and I mean , for an investor is a real attractive asset .

Josu Jon Imaz: Very good asset with very good PPAs, with very good mix of wind, solar, and I mean, for an investor it's a real attractive asset. I'm probably, I, in the case of Outpost, I think that we are going to be able to monetize or to cash in, probably we are going to be there before the end of the year. In the case of these assets, we will close with a high probability the transaction this year in 2025. I prefer to be prudent because the authorization competition and so on, we need, in terms of permits, probably the cashing could enter in 2026. In any case, the expectations are very positive. Thank you.

Speaker #3: So, I'm probably— I mean, in the case of Outpost, I think that we are going to be able to monetize or to cash in.

Speaker #3: Probably we are going to be there before the end of the year in the case of these assets , a we will close with a high probability that transaction this year , in 2025 .

Speaker #3: And I prefer to be prudent because because the authorization , competition and so on , we need in terms of , of of permits , probably the caching could enter in 2026 .

Speaker #3: But in any case, the expectations are very positive. Thank you.

Speaker #10: Muchas gracias .

Ignacio Domenech: Muchas gracias.

Speaker #2: Thank you very much , Ignacio . Our next question comes from Irene Himona . At best , Societe Generale . Please , go ahead with your question .

Pablo Bannatyne: Thank you very much, Ignacio. Our next question comes from Irene Jimenez at Société Générale. Please, Irene, go ahead with your question.

Speaker #11: Thank you very much . Hello , John . Just one quick one for me . I understand some of your disposal proceeds are from selling tax credits , and I .

Irene Jimenez: Thank you very much. Hello, Josu Jon. Just, one quick one for me. I understand some of your disposal proceeds are from selling tax credits, and I'm not sure I understand myself how that works. How would it influence, for example, the future economics of those projects, if you can perhaps elaborate a little bit? Thank you.

Speaker #11: I'm not sure I understand myself how that works . How how would it influence , for example , the future economics of those projects ?

Speaker #11: If you can perhaps elaborate a little bit . Thank you .

Speaker #3: Thank you . Irene . I mean , you know that all all the , the the assets we have in the , in the US , they are covered by the IRA , not only the current one , but also the the rest of , of the , of the assets .

Josu Jon Imaz: Thank you, Irene. I mean, you know that all the assets we have in the US, they are covered by the IRA. Not only the current one, but also the rest of the assets we are going to develop because we have in safe harbor 3 GW more in the country. That means that we shape, let me say, the much more in terms of the support of the IRA. In the case of how it works, there are two ways to monetize this support, the PTC and the ITC. The ITC is some kind of upfront cash coming from the tax administration.

Speaker #3: We are going to develop because we have in a safe harbor three gigawatts more in the country . So that means that we saved , let me say the the much more in terms of , of the support of the IRA and in the case of , of how it works , there are a two ways to to monetize this support .

Speaker #3: The PTC and the ITC , the ITC is some kind of of a upfront cash coming from the tax administration . That is I mean , in the range of 3,040% of the CapEx , even 50 in some places , because it depends of the if they are industrial , declining areas and so on .

Josu Jon Imaz: This is, I mean, in the range of 30, 40% of the CapEx, even 50 in some places, because it depends of if there are industrial cleaning areas and so on, the support, the local support is higher. In some cases, you have what is called the PTC. The PTC is some kind of a continuous payment for 10 years in your operation. You could monetize up 50% in that upfront payment of this PTC. In the case of Outpost, this EUR 185 million, something like that appear, roughly speaking, are the parts fitting with this upfront payment coming from this PTC. It's quite complex, Irene, because some projects, they have the ITC, some others the PTC.

Speaker #3: The support the local support is higher . And in some cases you have what is called the PTC , the PTC is some kind of continuous payment for ten years in your operation .

Speaker #3: But you could monetize a up 50% in upfront payment of this PTC . And in the case of outpost , this €185 million , something like that , that appear roughly speaking , are the part fitting with this upfront payment coming from this PTC .

Speaker #3: So it's quite complex , Irene , because some projects they have the ITC , some others the PTC take the message that all of them , they are going to have a fiscal support in the range 30 to 50% .

Josu Jon Imaz: Take the message, like all of them, they are going to have a feature support in the range 30% to 50%. If you need more granularity about these products, of course, be sure that the team of IR will be ready to give you more clarity about that, Irene. Thank you.

Speaker #3: And if you need more granularity about these projects , of course , be sure that the team of IR will be will be ready to to to to give you more clarity about that .

Speaker #3: Irene . Thank you .

Speaker #2: Thank you , thank you . Erin . Our next question comes from Matt Loftin at JPMorgan . Please , Matt , go ahead with your question .

Pablo Bannatyne: Thank you. Thank you, Irene. Our next question comes from Matthew Lofting at J.P. Morgan. Please, Matt, go ahead with your question.

Speaker #12: The questions first. I wondered if you could add some thoughts and color on what you're seeing in the market on light and heavy spreads and the sort of cost-effectiveness of the feedstock basket in the refining business.

Matthew Lofting: The questions. First, I wondered if you could add some thoughts and color on what you're seeing in the market on light, heavy spreads and the sort of the cost effectively of the feedstock basket in the refining business. Just thinking about that in the context of the moving parts in the market at the moment, looks like some debits and credits, more barrels coming from the Middle East, on the other hand, some of the constraints around Venezuela, et cetera, that you talked about earlier and what all that means for the outlook on the premium over the benchmark. Then secondly, Josu Jon, I wanted to just pick up on the earlier points that you made around CapEx. You talked about the low end of the sort of the range on the 4-year plan.

Speaker #12: Just thinking about that in the context of the moving parts in the market at the moment, it looks like some debits and credits, with more barrels coming from the Middle East.

Speaker #12: On the other hand, some of the constraints around Venezuela, etc., that you talked about earlier and what all that means for the outlook on the premium over the benchmark.

Speaker #12: And then secondly , just I wanted to just pick up on the earlier points that you made around CapEx . You talked about the low end of the sort of the range on the four year plan .

Speaker #12: I just wonder whether there's a case and a sort of need to be more ambitious on medium-term CapEx reduction below that range rather than the low end.

Matthew Lofting: I just wonder whether there's a case and a sort of a need to be more ambitious on medium-term CapEx reduction below that range rather than the low end in the context of moderated upstream prices now versus early 2024, areas of the low carbon value chain and the economics of that being still more challenging, and probably greater geopolitical uncertainty in the macro backdrop than was the case when you did the CMD 18 months ago. Appreciate the thoughts there. Thank you.

Speaker #12: In the context of moderated upstream prices . Now versus early 2024 , areas of the low carbon value chain and the economics of that being still more challenging and probably greater geopolitical uncertainty in the macro backdrop than was the case when you did the CMD 18 months ago .

Speaker #12: Appreciate the thoughts there . Thank you .

Speaker #3: Thank you . Matt . I mean , going to the it's true that this third quarter and one of the the factors impacting a negative way in the in the premium of the refining margin , I mean , it was pretty good .

Josu Jon Imaz: Thank you, Matt. I mean, it's true that this Q3 and one of the factors impacting a negative way in the premium of the refining margin, that, I mean, it was pretty good, $0.7 per barrel, but we expect a bit more. Was the scarcity of heavy crude oil in the Atlantic Basin, and the main factor was the reduction of the exports of Maya crude oil from Mexico in this summer. The potential, let me say reasons or problems behind this decision, they were left behind. This quarter, we have seen more Maya in the market. Probably we are going to see higher discounts for the heavy crude oil.

Speaker #3: $0.7 per barrel , but we expect a bit more because the the scarcity of , of heavy crude oil in the Atlantic basin and the main factor was the reduction of the exports of Maya crude oil , from Mexico in this summer .

Speaker #3: The potential , let me say , reasons of problems or behind this decision , they were left behind . And this quarter we are seeing more Maya in the market .

Speaker #3: So probably we are going to see a higher discounts for the crude heavy crude oil on top of that . I mean , the rest of the crude oil , I in Colombia , Canada .

Josu Jon Imaz: On top of that, I mean, the rest of the crude oil, I mean, Colombia, Canada, what comes from Middle East, I mean, Basra and so on, they are entering in our system. Also, I mean, the small amounts coming from Italy, Albania, and so on. My perception is that this component of a refining diet is going to be better in Q4 than in Q3. In the case of Venezuela, it's clear because, I mean, you preferably know that the constraints in the market are higher.

Speaker #3: A coming what comes from Middle East , I mean , the Basra and so on . They are entering in our in our in , in , in our system also .

Speaker #3: I mean a small amount coming from Italy, Albania, and so on. So my perception is that this component of our refining diet is going to be better in the fourth quarter than in the third one.

Speaker #3: In the case of Venezuela , is is clear because , I mean , you perfectly know that the constraints in the market are higher , but what we could see could be a most a more favorable environment is for quarter comparing with the third one , mainly because the Maya oil could be the the driver that changed .

Josu Jon Imaz: What we could see could be a more favorable environment this Q4 comparing with the Q3, mainly because the Maya crude oil could be the drivers of change. I mean, we will talk about the capital market day about the CapEx effort and so on. Again, we are comfortable with the figures I mentioned before. If things are worse, there are plenty of room to reduce this figure. In the case of. I mean, if in case of seeing low oil and gas prices, that is not the case today, and we have not seen that. We have the unconventional buffer, as you know, the EMP could reduce effort, we are not now there.

Speaker #3: I mean , we will talk about the capital in the capital market day , about the the CapEx effort and so on . But again , we are comfortable with the figures I mentioned before .

Speaker #3: If things are worst , there are plenty of room to reduce this figure . In the case of of the I mean , in case of seeing low oil and gas prices , that is not the case today .

Speaker #3: And we have not seen that we have the unconventional buffer, as you know. So the MP could reduce default. But we are not now there.

Speaker #3: We don't want to reduce defaults now because we are seeing good prices and good returns. You see that we have been able to do this not because of a CapEx reduction mindset, but because we prefer to guarantee the returns in the carbonization of industrial assets.

Josu Jon Imaz: We don't want now to reduce effort because we are seeing good prices and good returns. You see that we have been able, not because of CapEx reduction mindset, but because we prefer to be prudent guaranteeing the returns in the decarbonization of industrial assets. We have reduced the hydrogen ambition in almost two-thirds by 2030 comparing with the figures we have two years ago in our ambition. We are also prudent about the future investments in renewable fuels in Spain. We are analyzing our third project, and probably that is going to be done. We want to guarantee that this project is going to have good returns, and we are analyzing this option.

Speaker #3: We have reduced the hydrogen ambition in in almost two thirds by 2030 , comparing with the figures we have two years ago in our ambition , we are also prudent about the future investments in in renewable fuels in Spain .

Speaker #3: We are analyzing a third project, and we believe that it is going to be completed, but we want to guarantee that this project is going to succeed.

Speaker #3: Have returns . And we are analyzing this option . You see that we are also being very prudent in the development of a guaranteed returns of the renewable power , a generation .

Josu Jon Imaz: You see that we are also being very prudent in the development of guaranteeing the returns of the renewable power generation. My point is that that situation is different. We have reduced our CapEx in a significant way because we want to guarantee returns, and in case of needed, we will be ready to do it. Today, we are comfortable in these figures because, as I mentioned before, the distribution to our shareholders we commit is guaranteed under this scenario. The balance sheet is strong, and we could modulate the CapEx in this effort. Thank you, Matt.

Speaker #3: So my point is that that situation is different. We have reduced our CapEx in a different way because we want to guarantee returns.

Speaker #3: And in case of need, we will be ready to do it. But today we are comfortable in these figures because, as I mentioned before, the distribution to our shareholders we commit to is guaranteed.

Speaker #3: And under this scenario , the balance sheet is strong and we could modulate the CapEx in this effort . Thank you . Matt .

Speaker #12: Thank you .

Naisheng Cui: Thank you.

Matthew Lofting: Thank you.

Speaker #2: Thank you very much, Matt. Our next question comes from Nissan at Barclays. Please go ahead with your question.

Pablo Bannatyne: Thank you very much, Matt. Our next question comes from Naisheng Cui at Barclays. Please, Nas, go ahead with your question.

Speaker #13: Thank you. Studies, Joseph. Two questions from me, if that's okay. The first one is on the data center in Spain.

Naisheng Cui: Thank you. Buenas tardes, José, Joan. Two questions from me, if that's okay. The first one is on data center in Spain. I understand you also do some data center things as part of your business. I wonder if you can add a bit of color on that. What's your view over there on the sector? The second question is just to clarify on the EUR 2 billion divestment target for the year. I understand you mentioned earlier there's no appetite to divest any Upstream asset, but can you get to the EUR 2 billion by just divesting the remaining US and Spanish asset, please, the renewable ones? Thank you.

Speaker #13: I understand you also do some data center things as part of your business. I wonder if you can add a bit of color on that.

Speaker #13: What's your view over there on the sector ? Then the second question is just to clarify on the two . Billion divestment target for the year .

Speaker #13: I understand you mentioned earlier there's no appetite to divest any upstream asset, but can you get to $2 billion by just divesting the remaining U.S. and Spanish asset base?

Speaker #13: The renewable ones. Thank you.

Speaker #3: Thank you . Nash I mean , first , I'm not an expert in data centers . My first disclaimer . Secondly , if I have to imagine a place in Europe where .

Josu Jon Imaz: Thank you, Nas. I mean, first, I'm not an expert in data centers, my first disclaimer. Secondly, if I have to imagine a place in Europe where you need to have data centers, computation capacity, and so on, and energy is an important driver, and renewable energy is an important driver, it seems to me that Spain is the right place to develop this data center. From this point of view, I'm quite positive about the possibility to develop this data center. We are not a data center operator, so we are not going to invest in this business. What we are doing is, because there is an appetite from investors to be in data centers in Spain, we have an asset that is Escatrón, a CCGT with 800 megawatts of power in operation.

Speaker #3: You need to have a data centers computation capacity and so on , and a energy is an important driver . And a renewable energy is an important driver .

Speaker #3: It seems to me that Spain is the right place to develop this data center. So, from this point of view, I'm quite positive about the possibility to develop this data center.

Speaker #3: We are not a data , a data center operator . So we are not going to invest in this business , but we are doing is because there is an appetite from investors to be in data centers in Spain .

Speaker #3: We have an asset that is Schatten , a with 800MW of of power in operation . And because the the current regulation , we could use the connection permits of this asset to promote around this asset a an equivalent figure in our case , 800MW of wind hybridization with this plan for that reason , we acquire an early pipeline of 800MW of wind assets in Aragon .

Josu Jon Imaz: Because the current regulation, we could use the connection permits of this asset to promote around this asset, an equivalent figure, in our case, 800 MW of wind hybridization with this CCGT plant. For that reason, we acquire an early pipeline of 800 MW of wind assets in Aragón, in this region, that is going to be developed something between 2028, 2029. That means that we have the unique opportunity to develop wind assets in Spain, that as I mentioned before, is a very valuable production. We could use half of this figure, 400 MW, to feed with renewable power, combining with the CCGT, a potential investor in the area. What we have is we have water in the area because you know that this kind of facilities, they need the refrigeration cooling processes.

Speaker #3: In this region that is going to be developed , something between 2829 . So that means that we have the unique opportunity to develop wind assets in Spain that , as I mentioned before , is a very valuable production .

Speaker #3: And we could use half of this figure, 400 MW, to be fed with renewable power, combined with the CCGT, a potential investor in the area.

Speaker #3: And what we have is we have water in the area because, you know, that this kind of cities, they need the refrigeration and cooling processes.

Speaker #3: We have land . We have a good connections , fiber in IT terms , a in in this area . So what we are going is to sell the right to develop a data center in the area to a potential promoter .

Josu Jon Imaz: We have land, we have good connections, fiber, in IT terms, in this area. What we are going is to sell the right to develop a data center in the area to a potential promoter. On top of that, we are going to provide this data center with PPAs, with self-consumption, combining the wind and the gas. We are seeing as an opportunity. I mean, we are going to monetize an option we have. What we are seeing is that there are a lot of people interested in this asset. It seems to me that today are a lot of people ready or interested in investing in Spain in this business. Again, Nash, I mean, if you need more clarity, of course, we have our team at your service.

Speaker #3: And on top of that, we are going to provide this data center with PPAs to sell, combining the green and the gas.

Speaker #3: So we are seeing this as an opportunity. I mean, we are going to monetize an option we have, and what we are seeing is that there are a lot of people interested in this asset.

Speaker #3: So it seems to me that today there are a lot of people ready or interested in investing in Spain, in this business.

Speaker #3: But again , I mean , if you need more clarity , of course , we have our team to at your service . My my comment related to your your your question .

Josu Jon Imaz: To my comment related to your question. I mean, when we go to the figures, as you could see in the 9 first months, we got the figure of EUR 1.3 billion by September. I mean, I'm taking EUR 1 billion of divestments, plus the EUR 0.3 additional coming from, I think that's EUR 100 million, probably speaking from Gallo project. Gallo project is the first rotation we did in Spain at the beginning of the year. Because we retained the 51%, it's not in our accounting as divestments, but you could see the cash in entering in our accounting. On top of that, we have the $200 million coming from the PTC I mentioned before of Outpost.

Speaker #3: I mean , when we go to the figures , as you could see in the first months , we got the figure of €1.3 billion by September , I mean , I think I'm taking 1 billion of divestments plus the 0.3 .

Speaker #3: Additional coming from, I think that $100 million, roughly speaking, from the Gaia project. The project is the first rotation we did in Spain at the beginning of the year.

Speaker #3: But because we retained the 51%, it is not in our accounting as a divestment. However, you could see the cash entering in accounting, and on top of that, we have the $200 million coming from the PTC.

Speaker #3: I mentioned before of outpost . All in all , 1.3 by September , we expect €300 million more coming from a rotation of the US .

Josu Jon Imaz: All in all, EUR 1.3 by September. We expect EUR 300 million more coming from the rotation of the US, I mentioned before, Outpost. The cash in is going to be, we have very high probability before the end of the year. All in all, EUR 1.6 billion, that is going to be enough to reach this EUR 3.5 billion net CapEx. As I mentioned before, what will be out in cash in terms of this year, 2025, is the rotation of these 700 MW in Spain that because the permit and authorization process and so on could be probably closed, but not monetized before the end of the year.

Speaker #3: I mentioned before, Outpost and the cash-in is going to be with a very high probability before the end of the year.

Speaker #3: All in all , 1.6 billion . That is going to be enough to reach this 3.5 billion net CapEx . And as I mentioned before , what could be out in in cash in terms of this year , 2025 is the rotation of this 700MW in Spain that because the permit and authorization process and so on , could be probably closed , but not monetized before before the end of the year .

Speaker #3: In any case, because we have been more prudent in gross CapEx terms, we are going to be below this 3.5. That is my ambition.

Josu Jon Imaz: In any case, because we have been more prevalent in gross CapEx terms, we are going to be below this 3.5, that is my ambition, before this EUR 3.5 billion of net CapEx by the end of the year. Thank you, Nash.

Speaker #3: Before this , €3.5 billion of net CapEx . By the end of the year . Thank you . Nash . Nash .

Speaker #2: Thank you very much .

Naisheng Cui: Thank you very much. Very clear. Thanks for the clarification.

Speaker #13: Very clear. Thanks for the clarification.

Speaker #3: Thank you . Nash .

Josu Jon Imaz: Thank you, Nash.

Speaker #2: Thank you . Nash . Our next question comes from Enrique Patrico at UBS . Please . Go ahead with your question .

Pablo Bannatyne: Thank you, Nash. Our next question comes from Henri Patricot at UBS. Please, Enrique, go ahead with your question.

Speaker #14: Yes . Hello , everyone . Two questions please . The first one , I want to come back to the comments you made on the the customer business you mentioned on track to reach the 1.4 billion EBITDA this year and maybe close to 1.5 in 2026 , but actually , you're already very close to to 1.5 over the past 12 months .

Henri Patricot: Yes, thank you. Hello, everyone. I have two questions, please. The first one, I want to come back to the comments you made, Jose, on the customer business. You mentioned on track to reach EUR 1.4 billion EBITDA this year and maybe close to EUR 1.5 billion in 2026. Actually, you're already very close to EUR 1.5 billion over the past 12 months. I was wondering if you're just being a bit conservative on the outlook for 2026, or if there was some, you know, exceptional performance over the past 12 months in Q3 in particular, that would explain why we should expect a slower growth in 2026.

Speaker #14: So it's wondering if you're just being a bit conservative on on the outlook for 2026 or if there was some exceptional performance over the past 12 months in the third quarter , in particular , that will explain why we should expect a slower growth in 26 .

Speaker #14: And then secondly, on the Puertollano Advanced Biofuels Plant, which you now plan to start up in the second quarter and have the first contribution in the second half of 2026.

Henri Patricot: Secondly, on the Puertollano advanced biofuels plant, which you now plan to start up in Q2 and have the 1st contribution in the 2nd half of 2026. If I'm not mistaken, you were previously flagging startup in early 2026. Wondering why it's taking a little bit longer, and if there's a risk of some further delay at this project. Thank you.

Speaker #14: If I'm not mistaken, you mentioned flagging a startup in early 2026. I'm wondering why it's taking a bit longer and if there is a risk of delay for this project.

Speaker #14: Thank you .

Speaker #3: Merci , Henri . Going to you first , a question . I mean , €1.4 billion of EBITDA . That is going to be the year cash flow from operations will be at around €1.2 billion , roughly speaking , this year .

Josu Jon Imaz: Merci, Henri. Going to your first question, I mean, EUR 1.4 billion of EBITDA, that is going to be the year. Cash flow from operations will be at around EUR 1.2 billion, probably speaking, this year. I mean, I think that I'm not conservative. I'm ambitious for 2026 when I say that EUR 1.5 billion of EBITDA is our target. Why I'm, let me say, ambitious? Because the target we are achieving now for customers in the retailer and power business in terms of EBITDA are the targets we had for 2027. We are anticipating to use the delivery of the strategic plan. I mean, I don't think so. I think that this is structural.

Speaker #3: I mean , I think that I am not conservative . I'm ambitious for 2026 . When I say that €1.5 billion of EBITDA is our target , why I'm , let me say , ambitious , because the target we are achieving now for customers in the retail and power business in terms of EBITDA , are the targets we have for 2027 .

Speaker #3: So we are anticipating to use the delivery of the strategic plan . Is this performance exceptional ? I mean , I don't think so .

Speaker #3: I think that this structure, I mean, if you take what has happened with customer business over the last ten years, from 2016 to 2017, we have doubled the EBITDA figures of this business, and we are developing this year after year.

Josu Jon Imaz: I mean, if you take what has happened with our customer business over the last 10 years, from 2016, 2017, we have doubled the EBITDA figures of this business. We are developing this effort year after year. That is not because ups and downs in the market, because we have had ups and downs over these 10 years. It's structural. The reason is, first, new businesses. I mean, an EBITDA that was not there, and now is there, and is growing. New businesses, mainly, I could talk about power and gas. I talk about lubricants, that you know that now we have an international footprint. We could talk about the CAE. I mean, this kind of business developed around the energy efficiency that is also new.

Speaker #3: That is not because ups and downs in the market , because we have had ups and downs over these ten years . It's structural and the reason is , first , new businesses , I mean , an EBITDA that was that was not there and now is there and it's growing .

Speaker #3: When I new businesses are mainly I mean , I could talk about a power and gas . I'll talk about lubricants that you know , that now we have an international footprint .

Speaker #3: We will talk about the the case . I mean , this this kind of business developed around the energy efficiency that is also new on top of that , I mean , we have a almost 10 million digital users of our app .

Josu Jon Imaz: On top of that, I mean, we have Almost 10 million digital users of our app wallet. That is a unique position, not only the energy sector in Spain, in the retail leadership in Spain. We are becoming a leading retailer in the country with more than 3.5, almost 4,000 sales point, with 24 million customers, including Spain and Portugal, with that digital leadership. It's structural. We are growing this business. Of course, we will have better and worse situation of the market. Let me say that with EUR 1.5 billion of EBITDA, I'm feeling quite comfortable. In this sense, I think that is ambitious.

Speaker #3: Violet . That is a unique position . Not only the energy sector in Spain in the retail leadership in Spain . So we have becoming a leading retailer in the country with more than 3.5 , almost 4000 sales points with 24 million customers , including Spain and Portugal , without digital leadership .

Speaker #3: So it's a structural we are growing this business . Of course , we will have better and worse situation of the market , but let me say that with €1.5 billion of EBITDA , I'm feeling quite comfortable .

Speaker #3: And in this sense , I think that it is ambitious . I mean , if you take the a bit of this business and taking into account the the , the investment level in this business , that I mean , it's also growing because we are growing in the , in the gas and power business and so on .

Josu Jon Imaz: I mean, if you take the EBITDA of this business and taking into account the investment level in this business, I mean, it's also growing because we are growing in the gas and power business and so on, that you could pay almost 60%, 70%, the two-thirds of the cash dividend of Repsol could be paid by the free cash flow of this customer business. That is always hidden because we are, in all forums, always talking about current price, Henry Hub price, refining margin. The reality of this business is the retrofitting of Puertollano. I mean, it's going to be in operation at the end of Q1.

Speaker #3: But you could pay a almost a 60 , 70% . The two thirds of the cash dividend of Repsol could be paid by the free cash flow of this customer business .

Speaker #3: That is always hidden because we are in all forums, always talking about price. We have price refining margin. But the reality of this business is there.

Speaker #3: The retrofitting of Puertollano . I mean , it's going to be in operation in the at the end of the first quarter . So there are some .

Josu Jon Imaz: There is, I mean, no material delay, perhaps some weeks of commissioning the project, but that is not, let me say, material in a complex industrial project like that. It is on budget. It's going to be finished at the end of Q1. In Q2 2026, it's going to be fully operational. Thank you. Merci, Henri. Thank you.

Speaker #3: I mean, there is no material delay; perhaps a delay of some weeks in commissioning the project. But that is not, let me say, material in a complex industrial project like that.

Speaker #3: It is on budget is going to be finished at the end of the first quarter and in the second quarter of 2026 is going to be fully operational .

Speaker #3: Thank you. Merci, Henry.

Speaker #14: Thank you .

Speaker #2: Thank you very much , Henry . Our next question comes from Paul Redmond at BNP Paribas . Please , go ahead with your question .

Pablo Bannatyne: Thank you very much, Henri. Our next question comes from Paul Redman at BNP Paribas. Please, Paul, go ahead with your question.

Speaker #15: Hi . Yeah , thank you very much for your time . Two , please . The first one is just on the €3.5 billion of CapEx you're talking about .

Paul Redman: Hi. Yeah, thank you very much for your time. Two, please. The first one is just on the EUR 3.5 billion of CapEx you're talking about. I think it's the next year. How much divestment is included in that? Will the cash-in from the Spanish sale be included in next year's or this year's divestment target? Secondly, you mentioned earlier, just Jon, about a possible EUR 1.05 dividends the next year. I see that's in between your EUR 1.03 and EUR 1.10 dividend guidance or range for 2026. I just want to understand how you get to that EUR 1.05, what we need to think about. Thank you.

Speaker #15: I think it's the next year . How much divestment is included in that ? And will the cash in from the Spanish sale be included in next year's or this year's divestment target ?

Speaker #15: And secondly , you mentioned earlier just John , about a possible €1 five dividend for next year . I see that's in between your €1 three and €1 €1.1 dividend guidance or range for 2026 .

Speaker #15: I just want to understand how you get to that €1.5. What do we need to think about? Thank you.

Speaker #3: Thank you Paul . I mean , going to your first question , that is net CapEx . The CapEx is going to be higher , but we are seeing , clearly speaking about rotation today are mainly this 700MW of Spanish assets .

Josu Jon Imaz: Thank you, Paul. I mean, going to your first question, that is net CapEx. The gross CapEx is going to be higher. What we are seeing, clearly speaking about rotation today, are mainly these 700 MW of Spanish assets I mentioned before that is going to be cashing in 2026, plus probably Pinnington in the US that is going to be partially in operation at the end of this year, 2025, but we are not yet in the process of rotation and so on because, you know, you have to prove, let me say, the operation of the asset.

Speaker #3: I mentioned before that there is going to be cash in 2026, plus probably in the U.S. that is going to be partially operational at the end of this year, 2025.

Speaker #3: But we are not we are not yet in the process of rotation and so on , because , you know , you have to , to , to , to prove , let me say , the operation of the asset .

Speaker #3: So that probably is going to be in 2026. And I don't have in mind any other disposal now that you know that we always are.

Josu Jon Imaz: That probably is going to be in 2026, and I don't have in mind any other disposal now, but you know that we always are analyzing our portfolio in a dynamic way. You are right. This figure is net. Gross is going to be higher, and we will give you more clarity about that in the capital market day of March. Going to the dividend, I mean, as I mentioned before, and sorry for not having the possibility to be more precise, but you are going to understand why. This year the dividend has been EUR 0.975. What we have in the strategic plan is that the total amount distributed in cash is going to increase in a 3%.

Speaker #3: Analyzing our portfolio in a dynamic way. But you are right, this figure is a net gross, and it is going to be higher.

Speaker #3: And we will give you more clarity about that in the capital market day of March . And going to the dividend , I mean , as I mentioned before and sorry for not having the possibility to be more precise , but you are going to understand why a this year the dividend has been 97.5 cents .

Speaker #3: What we have in the strategic plan is that the total amount distributed in cash is going to increase by 3%. So, there is a first effect of a 3% growth of this figure.

Josu Jon Imaz: There is a first effect of a 3% growing of this figure. On top of that, the absolute amount is growing, but we are going to have less shares in 2026 than the shares we had at the beginning of this year. Why? Because we are going to redeem, and here is where I can't be more precise because we are still in the process of acquiring the shares in the share buyback process. Probably, I mean, we take the prices and so on, we are going to cancel a figure that is going to be close, and again, disclaimer, is going to be close because this math effect to a 4.1%.

Speaker #3: But on top of that, the absolute amount is growing. However, we are going to have less shares in 2020 than the shares we had at the beginning of this year.

Speaker #3: Why ? Because we are going to redeem , and here is where I can't be more precise , because we are still in the process of acquiring a the shares in the share buy process .

Speaker #3: But probably I mean, we take the prices and so on. We are going to cancel a figure that is going to be close.

Speaker #3: And again, the disclaimer is going to be close because this Mass Effect is at 4.1%. When I take the 3% plus the 4.1%, we arrive at a figure that is going to be close to 1.05.

Josu Jon Imaz: When I take the 3% plus the 4.1%, we arrive to a figure that is going to be close to 1.05. We will have a full clarity about this figure at the end of the year, knowing exactly the number of shares redeemed, but we are going to deliver, and we are going to do what we commit in our strategic plan in terms of distribution. Again, that is a important target, and what we said on that is going to be delivered. Thank you, Paul.

Speaker #3: We will have a full clarity about this figure at the end of the year , knowing exactly the number of shares redeemed , but we are going to deliver , and we are going to to do what we commit in our strategic plan in terms of distribution .

Speaker #3: Again , that is up important target . And what we said on that is going to be delivered . Thank you . Paul .

Speaker #2: Thank you, Paul. That was our last question today. With this, we will bring our third-quarter conference call to an end.

Pablo Bannatyne: Thank you, Paul. That was our last question today. With this, we will bring our Q3 conference call to an end. Thank you very much for your attendance.

Speaker #2: Thank you very much for your attendance.

Speaker #1: Thank you . This concludes today's conference call . Thank you for participating . And you may now disconnect . Speakers , please stand by .

Operator: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect. Speakers, please stand by.

Q3 2025 Repsol SA Earnings Call

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