BKW (BKW) Investor update summary

Impairment and Financial Guidance

• A CHF 110 million value adjustment was made on the Wilhelmshaven Coal Power Plant, reflecting lower expected electricity production and declining revenues due to reduced price volatility.

• Revised 2025 EBIT guidance is CHF 540–560 million, down from the original CHF 650–750 million, mainly due to the impairment and negative quantity effects in hydropower and wind.

• Excluding the one-off impairment, 2025 EBIT is expected at CHF 650–670 million, within the original guidance.

• 2026 EBIT guidance is set at CHF 650–750 million, with expectations of normalized hydropower and wind volumes and higher hedged prices, offset by lower trading results and reduced power tariffs.

• The value adjustment is a non-cash item, recognized as an increase in provisions for onerous contracts, impacting EBITDA but not cash flow.

Strategic Transformation and Investments

• Plans are underway to build a hydrogen-capable gas power plant in Germany (Hamm), in partnership with Trianel, aiming for a 40% stake, pending the outcome of a government tender.

• The new gas plant aligns with the Solutions 2030 strategy to transition from coal to hydrogen-enabled gas, targeting a 50% reduction in Scope 1 and 2 CO2 intensity by 2030 and net zero by 2040.

• The gas plant is expected to operate with renewable hydrogen in the medium term, further reducing emissions.

• Technical feasibility for H2-ready turbines exists, but the main challenge is hydrogen production and logistics.

• Collaboration with Trianel and favorable site conditions support the new project.

Market and Regulatory Outlook

• Lower forward price volatility is expected to reduce trading earnings in 2026, while spot price volatility remains high, supporting flexibility optimization revenues.

• Minimum remuneration for solar feed-in and reduced basic electricity tariffs will negatively impact 2026 earnings by about CHF 10 million.

• Regulatory changes to grid WACC will not affect 2026 but are expected to have a negative impact of about CHF 10 million in 2027.

• Regulatory requirements in the grid area will negatively impact results, but higher hedged prices and improved margins in Infrastructure & Buildings are positive factors.

• Expansion of hydropower and wind in Switzerland is seen as necessary, but no immediate supply gaps are anticipated.