Tear Sheet: Naturgy Energy Group, S.A.

We anticipate that Naturgy?s LNG and wholesale gas business will benefit from favorable hedging conditions in 2024, although we expect normalizing prices will start putting some downside pressure on EBITDA from this segment by 2025. In our view, some of this decline should be compensated by new renewable capacity entering operations (2.2-gigawatt capacity under construction), whereby we forecast Naturgy will benefit from its integrated position across the energy supply chain. Further, we believe the relative normalization of commodity-sensitive segments to result in the contribution of Naturgy?s regulated activities progressively increasing by up to about 60% of EBITDA. A revision by the CNMC of the investment cap on Spanish power distribution grids could further support this trend. We see the company's

...October 4, 2024 We expect Naturgy will post solid financial results in 2024 and 2025 despite the stabilizing power and gas prices. We anticipate that Naturgy's LNG and wholesale gas business will benefit from favorable hedging conditions in 2024, although we expect normalizing prices will start putting some downside pressure on EBITDA from this segment by 2025. In our view, some of this decline should be compensated by new renewable capacity entering operations (2.2- gigawatt capacity under construction), whereby we forecast Naturgy will benefit from its integrated position across the energy supply chain. Further, we believe the relative normalization of commodity-sensitive segments to result in the contribution of Naturgy's regulated activities progressively increasing by up to about 60% of EBITDA. A revision by the CNMC of the investment cap on Spanish power distribution grids could further support this trend. We expect Naturgy will update its strategic plan during 2025. We see the company's...

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