2.1 Basis of preparation

European Regulation (EC) No. 1606/2002 of 19 July 2002, introduced the obligation, beginning the financial year 2005, to apply the International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board ("IASB"), and adopted by the European Union ("EU IFRS" or "International Accounting Standards") for the preparation of the financial statements of companies with shares and/or bonds listed on one of the regulated markets of the European Community.

The Consolidated Financial Statements were drafted on an going concern basis and based on the conventional criterion of historical cost, except for some accounting items that were recognised at fair value, pursuant to the provisions set out in the International Accounting Standards.

These Consolidated Financial Statements were drawn up based on the best knowledge of EU IFRS and taking account of the best knowledge on the matters. Any future guidelines and interpretation updates will be reflected in the following years, according to the modalities envisaged from time to time by reference accounting standards. 

These Consolidated Financial Statements were approved by the Company's Board of Directors on 31 March 2026.

The Consolidated Financial Statements were prepared based on the accounts of both the Company and its subsidiaries, duly adjusted to make them comply with the accounting principles used by the Parent Company and the EU IFRS standards.

During 2025, the Group completed non-recurring transactions that involved the acquisition of controlling or significant shareholdings in a series of companies, as described below. 

IVPC

For a detailed description of this transaction, please refer to the Report on Operations. It involved the acquisition of control over several companies engaged in developing and managing wind and photovoltaic farms. Together with acquiring the companies that own the plants and their authorisations or authorisation processes, the Group also signed a series of service contracts with the seller. These contracts aim to ensure support and retain the business know-how considered critical for managing the acquired companies. In addition to these contracts, the transaction \lzo involved the acquisition of a 49% shareholding in the companies that will act as service providers (IVPC Eolica S.r.l. and IVPC Service S.r.l.).

With this transaction, investments in companies in which the Group obtained a majority stake were treated as business combinations pursuant to IFRS 3, while non-controlling investments were recognised as significant investments (the remaining share remaining wholly owned by the selling party), valued using the equity method and illustrated in note 7.5.

The business combinations are effective from 31 March 2025, and the following companies are consolidated on a line-by-line basis from that date:

• IVPC Power 6 srl (75% owned by Dolomiti Energia Rinnovabili srl);

• IVPC Power 8 spa (75% owned by Dolomiti Energia Rinnovabili srl);

• IVPC Power 10 srl (75% owned by Dolomiti Energia Rinnovabili srl);

• IVPC Power X srl (75% owned by Dolomiti Energia Rinnovabili srl);

• IVPC Minipower srl (75% owned by Dolomiti Energia Rinnovabili srl);

• Vigreen srl (75% owned by Dolomiti Energia Rinnovabili srl).

The following table shows the final allocation of the consideration paid, net of cash acquired:

The difference between the consideration paid and the companies' net book value, restated in accordance with the accounting standards applied by the Group, has been allocated to the net fair value of the identifiable assets, consisting mainly of the value of the permits relating to wind farms already in operation or to be constructed, for which the approval process had been completed as at the acquisition date, net of the related deferred tax effect, and, to the extent not accounted for by the above, to goodwill.

Hydrowatt SHP

In the first half of 2025, the Group also acquired full control over Hydrowatt SHP S.r.l., a company that owns several operational photovoltaic plants. Also in this case, please refer to the Report On Operations for more information on the transaction. The transaction was qualified, for the purposes of representation in the financial statements, as an acquisition of net assets and not as a business combination. 

The list of companies included in the consolidation scope as at 31 December 2025 is reported in Attachment A to these Interim Consolidated Financial Statements, alongside an indication of their share capital and the consolidation method used in the preparation of these Interim Consolidated Financial Statements.

2.4 Consolidation Principles

The criteria adopted by the Group to define the consolidation area and the related consolidation principles are described hereunder.

2.5 Measurement criteria

Rights of use (Leases)

The Group holds tangible assets used in carrying out its business activities, through long-term rental contracts.

At the contract start date, it is determined whether the contract is or contains a lease. The definition of a lease under IFRS 16 is applied when the contract transfers the right to control the use of an underlying asset for a period of time in exchange for consideration.

The Group recognises an asset consisting of the right to use the underlying asset and a lease liability on the effective date of the contract (i.e. the date on which the underlying asset is available for use). The right-of-use asset represents the lessee's right to use the asset for the term of the lease, and its initial measurement corresponds to the lease liability, which is initially calculated as the present value of the lease payments due under the contract, to be paid over its term. When calculating the present value of the lease payments due, the lessee's incremental borrowing rate at the commencement date of the lease is used. After the commencement date, the lease liability is measured at amortised cost using the effective interest method, to be recalculated upon the occurrence of certain events.

The Group applies the exception to the recognition of short-term leases to its contracts with a duration of 12 months or less from the effective date; it also applies the envisaged exception to the recognition of leases in which the underlying asset is of "low value" and the amount of which is estimated as not significant. Payments due on short-term leases and those where the underlying asset is of low value are recognised as an expense on a straight-line basis over the term of the contract.

In accordance with the provisions of the standard, the Group separately reports interest expense on lease liabilities and portions of depreciation for assets consisting of the right of use.

Rights relating to infrastructure under concession (IFRIC 12)

"Rights relating to infrastructure under concession" represent the Group's right to use the assets under concession for the operation of the electricity distribution service through its subsidiary SET Distribuzione S.p.A. and the gas and water distribution services through its subsidiary Novareti S.p.A. in the relevant municipalities in Trentino. The method adopted is the so-called 'intangible asset' method, under which infrastructure covered by a concession and subject to a requirement to be returned at the end of the concession period is not recognised as property, plant and equipment of the concessionaire, as the service concession agreement does not confer on the concessionaire the right to control the use of the infrastructure.

Under the intangible asset model, in return for providing design, construction, and improvement or extension services for the infrastructure, the concessionaire acquires the right to charge users who make use of that infrastructure.

The value of these assets corresponds to the fair value of the design, construction, and improvement or extension work, plus capitalised borrowing costs, in accordance with the requirements of IAS 23, during the construction phase. The fair value of construction services is determined on the basis of the costs actually incurred, plus a mark-up representing the best estimate of the internal costs for the project management and design work carried out by the Group, equal to the mark-up that a third-party general contractor would charge to perform the same work, as required by IFRIC 12. The rationale for determining fair value stems from the fact that the concessionaire must apply the provisions of IFRS 15; therefore, if the fair value of the services received (in this specific case, the right to use the asset) cannot be reliably determined, the revenue is calculated on the basis of the fair value of the construction services performed. Assets related to construction services underway at the reporting date are measured based on the actual progress of works, pursuant to IFRS 15 and this measurement will be disclosed in the income statement, under item "Revenue from works on assets under concession". 

Other intangible assets 

Other intangible assets include non-monetary elements and are identifiable assets lacking physical substance, controlled by the company and able to produce future economic benefits. Intangible assets are recognised at purchase and/or production cost, including directly attributable expenses incurred to prepare the asset for use, net of accumulated amortisation and possible impairment losses. 

Intangible assets are amortised from the time at which the asset becomes available for use. Their amortisation is apportioned systematically in relation to the residual possible use, i.e. based on their estimated useful life.

The useful life estimated by the Group for intangible assets is as follows:

Property, plant and equipment

Property, plant and equipment are measured at purchase or production cost, less accumulated depreciation and any impairment loss. The cost includes charges that are directly incurred to permit their use, as well as any possible costs of disassembly and removal that will be borne pursuant to contract obligations requiring to reinstate the original conditions of the asset.

Charges borne for ordinary and/or cyclical maintenance and repairs are directly charged to income statement, when incurred. The capitalisation of costs related to the expansion, modernisation or improvement of the structural elements whether owned or leased is made within the limits established to be separately classified as assets or part of an asset.

Improvements on third-party assets include costs borne for the set up and modernisation of real estate that is not owned.

Assets are depreciated on a straight-line basis, with rates that allow for depreciation of assets until the end of their useful life. 

Law No. 205 of 27 December 2017 provided for the valuation of hydroelectric facilities involving large-scale water diversions upon the expiry of their concessions, based on their undepreciated value, in accordance with the criteria set out in the Provincial Law. In particular, original so-called "wet works" (which can be transferred free of charge), where they can be clearly identified, are fully depreciated using the financial method. This method, which is also consistent with the provisions of Article 104 of the TUIR, provides for the allocation of the cost over the period during which the expected economic benefits are enjoyed, which coincides with the duration of the concession for large-scale water diversion for hydroelectric purposes. "Dry works" (also referred to as non-transferable free of charge, as they are subject to compensation at the end of the concession) are, on the other hand, depreciated using technical rates.

In light of the above, the Group's estimated useful lives for the individual categories of property, plant and equipment are set out below:

Impairment of non-financial assets

At each reporting date of the financial statements, the non-financial assets are tested for impairment. When events occur that indicate impairment of non-financial assets, their recoverability is assessed by comparing the book value with the related recoverable value, represented by the fair value, less disposal charges, and the value in use, whichever higher. The value in use is determined by discounting the expected cash flows arising from the use of the asset and, where significant and reasonably determinable, from its disposal at the end of its useful life, net of disposal costs. Expected cash flows are determined on the basis of reasonable and justifiable assumptions that represent the best estimate of the future economic conditions that will prevail over the remaining useful life of the asset, with greater weight given to external indicators. The expected future cash flows used to determine the value in use are based on the most recent financial forecast, which includes projections for revenue, operating costs and capital expenditure. As regards assets that do not generate widely independent cash flows, the recoverable value is determined in relation to the Cash Generating Unit (i.e. the smallest independent CGU resulting from the continuous use), to which they belong. Discounting is carried out at a rate that reflects current market measurements of the time value of money and the specific risks of the asset, which are not already included in the cash flow estimates. In particular, the discount rate used is the Weighted Average Cost of Capital (WACC). The value in use is determined net of the tax effect, as this method produces values that are substantially equivalent to those that can be obtained by discounting the cash flows, including taxes at a discount rate before taxes resulting from the post-tax measurement. The measurement is performed by each single asset or by Cash Generating Unit. When the reasons for impairment no longer exist, the value of assets is recovered and the adjustment is recognised in the income statement as write-up (value write-back). The write-back is carried out at the lower between recoverable value and book value, inclusive of prior write-downs and less amortisation instalments that would have been allocated if the asset were not impaired.

Equity investments

Equity investments in associates and joint ventures

Equity investments in joint ventures (in which the Group holds a 50% stake alongside a partner with an equal shareholding and shared governance rules such that neither party exercises control) and associates (in which the Group holds a stake of less than 50% but not less than 20%) are accounted for using the equity method, in accordance with IAS 28. 

Under this method, the investment is initially recognised at cost and subsequently adjusted to reflect the Group's share of the profit or loss and other changes in the equity of the investees, from the date of acquisition until the date on which significant influence or joint control ceases.

The Group's share of profit also reflects the effects of adjustments arising from the allocation of acquisition costs, including the depreciation, where applicable, of allocation differentials (gains) attributable to depreciable assets, determined in line with the useful lives of the underlying assets, as well as any impairment losses relating to those differentials. Dividends received reduce the carrying amount of the investment. If the share of losses in an associate exceeds the carrying amount of the investment, the carrying amount is written down to zero and any excess is recognised only to the extent that the Group has assumed legal or constructive obligations or has made payments on behalf of the associate. The carrying amount of equity-accounted investments is tested for impairment whenever there are indications of a possible impairment.

5.2 Commodity risk 

The price risk of commodities, relating to price volatility of energy commodities (gas, electricity, fuel oil, etc.), as well as of environment certificates (incentive tariffs, white certificates, etc.), consists in the negative effects that changes in market prices of one or more commodities could have on the Group's cash flow and income prospects. The "Finance and Risk Management" department is in charge of monitoring risks resulting from price fluctuations and, for this purpose, the Group uses derivative instruments, mainly peaks, with the aim of mitigating, at economically acceptable terms, the possible impact of price volatility on profits.

The main characteristics of derivatives subscribed by the Group and in place as at 31 December 2025 and 31 December 2024 to hedge commodity price risk, which for accounting purposes can be classified as hedging and non-hedging, are summarised as follows:

(*) European Energy Exchange, leading banks and electricity and gas wholesalers.

5.3 Credit risk

The credit risk represents the Group's exposure to possible losses resulting from the non-fulfilment of obligations undertaken by counterparties.

This type of risk is managed by the Group through special procedures and mitigation measures, aimed at both assessing the creditworthiness of the counterparty and constantly checking that the exposure thresholds are complied with, as well as through adequate guarantees.

Trade receivables are recognised in financial statements net of any impairment found to be present based on the default risk of the counterparties, taking into account the information available on the customer's solvency and historical data.

The overall exposure to credit risk as at 31 December 2025 and 31 December 2024 - specifically in relation to trade receivables - is represented by the sum of the financial assets recognised in the financial statements, summarised below:

5.4 Liquidity risk

Liquidity risk may be manifested by the inability to find, under economic conditions, the financial resources necessary for the Group to operate. The two main factors affecting the Group's liquidity are:

• financial resources generated or absorbed by operating or investing activities;

• maturity or renewal terms of financial debt.

Prudent management of the liquidity risk arising from ordinary operations involves maintaining an adequate level of cash, short-term securities and availability of funds that can be obtained through an adequate level of credit lines. The Group's liquidity needs are monitored by a central function with a view to ensuring an effective collection of financial resources and an adequate investment/return on cash.

The table below sets out the financial liabilities (including trade and other payables) that are expected to be redeemed within one year, between one and five years and after five years: