Good morning, ladies and gentlemen, welcome to the Encavis AG conference call regarding the interim report second quarter, 6 months, 2023. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Mr. Christoph Husmann. Good morning, ladies and gentlemen. A warm welcome to our Encavis Q2 conference call. I'm Christoph Husmann, I will host you in this call, together with my colleague, Mario Schirru, Joerg Peters, Head of Corporate Communications and Investor Relations, both of them will be available for your questions as well. Yesterday evening, we released our Q2 figures, which show stable revenues and stable earnings per share in the first half 2023, although there were some negative meteorological effects and the bigger price effects compared to the first half of 2022. This shows the resilience of the Encavis business model, that in these turbulent times can realize stable revenues and stable earnings per share. Ladies and gentlemen, before we go into the specifics of the figures, I would like to give you some highlights on what we have done in the meantime, since our last call for Q1 2023. Well, as you might know, we suggested to the annual shareholder meeting to waive the dividend to foster our planned growth. As you might know, we are seeing an outstanding growth of the renewables ahead of us, and this has to be financed, and the waiving of the dividend was therefore necessary for us for boosting our available cash and financial resources twice. Firstly, the not realized cash outflow enables us to invest, and by not paying out the dividend, we keep up our equity, and this, as an important covenant for the banks, helps us to raise more debt on corporate level. This suggestion with these arguments was supported by the annual general meeting, with the overwhelming majority of 99.3%. In the following supervisory board meeting after the AGM, the independent member, Dr. Rolf Martin Schmitz, was elected to be new chairman of the supervisory board. Dr. Manfred Krueper, our long-lasting chairman, stepped down and became deputy chairman of the supervisory board. The committees were elected a new composition. Now, both committees, the personal nominating committee, as well as the audit and EC committee, both headed by independent members of the supervisory board. It is Dr. Rolf Martin Schmitz, heading the personal nominating committee, and Isabella Faller heading the audit and EC committee. Both committees were either the majority or half by half now, independent members of the supervisory board. Recently, Scope Ratings reaffirmed Encavis AG investment grade issuer rating BBB-, the outlook was stated again to be positive. This reflects the sustained robust liquidity and the diversified exposure to external funding channels we have at Encavis. In the meantime, we, we implemented the first measures to realize our accelerated growth strategy, 2027. Recently, we announced our first cooperation, cooperation with equity partners, which we announced in March that we would go for that. Encavis and the Freiburg-based energy supply company, Badenova, create together as partners, a new entity, which is intending to buy 500 MW of electricity generation capacity in Germany from renewable energies. For that purpose, more than EUR 200 million should be invested by 2027. What is of importance to us here is that the common entity, the ENCAVIS Energieversorger I GmbH, is owned 51% by Encavis, and Encavis is in, the industrial lead of this entity, and 49% by Kommunale Energie vendor GMBH, which is a subsidiary of badenova AG & Co. KG. All local municipal utilities and regional energy suppliers and municipalities as well, as well, are invited to join badenova AG & Co. KG in this Kommunale Energie vendor GMBH, to increase the volume of cash to be invested, the volume of megawatts within that entity. This is of importance to Encavis. Firstly, it gives us the opportunity to have better direct access to these local municipalities, which is important for getting all these approvals and getting local contact to potential PPA off-takers. It is meaningful because in the past, these local utilities had usually close contact to the big utilities, and now they are intending to have better relationships to Encavis to realize their growth in the renewables. At Encavis, acquired 2 Italian solar parks already of 93 megawatts, Montalto di Castro and Montefiascone. Both of them increase now the total Italian portfolio, which we have by 260 megawatts, and they intend to have a generation capacity of around 154 gigawatt hours. In both cases, we want to sign long-term power purchase agreements with a pay-as-produced structure. In addition to that, we extended existing PPA with Allego, which is supplying electrical vehicle drivers with renewable energies via loading stations, and we have a 10-year space produced PPA with them, with goals Venus, 25 MW. This was extended to Borrentin, a 105 MW solar park in Mecklenburg-Vorpommern. As we pointed out, we are further revamping, or go further revamping and repowering our parks, and now we finalized the exchange of PV modules at our German solar park, Walch. By that, let me show you a photo of that, we could extend the capacity of that park by 41% from 12.6 MW to 17.8 MW. The asset management was active in the meantime as well, two solar parks, Saturn and Dagon, in the Encavis Infrastructure Fund II were connected to the grid, and that increases their portfolio by 45 MW. Ladies and gentlemen, now let's come to the details, to the figures. As I pointed already out, it was a meteorological-wise, pretty weak first half year. You see that here in the second line, the energy production in gigawatts of our existing portfolio. That means that portfolio, which we already owned in the first half of last year, dropped by 103 GWh from 1.7 TWh to 1.6 TWh. This is a drop by 6%. That was mostly driven by wind with -8%, supported by PV as well, with -5%. In total, we lost EUR 19 million of revenues due to that bad meteorological condition. Please have in mind that the first half of 2022 was a half year with extraordinarily good weather conditions. Compared to our plan, we just lose EUR 7.6 million of revenues, so we are not as far away from our plan regarding meteorological expectation. That total shortfall in our existing portfolio by 6% was more than overcompensated by our new additions to the portfolio. With our wind farm in Lithuania, our PV parks in the Netherlands, in Denmark, and these ones, which we acquired together with Stern, when we fully consolidated Stern, we could increase our production facilities in that way that in total, the energy output rose from 1.7 terawatt hours to 1.73, + 40 gigawatt hours. In total, it was more than 140 gigawatt hours, which we added to the portfolio. All of that led to stable revenues. The net revenues, after all the trimming mechanisms, which we have in some European countries, is after EUR 226.4 million in the first half of last year, EUR 226.3 million this year. What we lose on price and volume is compensated either by the new additions or by our full consolidation of Stern. That is good news. This, as we already announced with our guidance and with the first quarter, is that the EBITDA reacts with a drop by EUR 19 million, minus 11%. Here we have to take two things into consideration. Firstly, we have, compared to previous first half-year, EUR 19 million loss of revenues, metrological-wise. In addition to that, we compensate that shortfall in the revenues by the full consolidation of Stern, which like usual in the service business, has a lower EBITDA margin. Therefore, due to technical, these technical reasons, we have a drop in EBITDA from 75%, the first half 2022 to 67% in the first half of 2023. Please have in mind that the asset segments like PV and wind still have EBITDA margins at 75% or higher. The EBIT was reduced by EUR 16.3 million, -15%. Here we have the lack of volume, as I stated earlier. Now, what looks to be in the first and first glance surprising, is that the earnings per share is pretty stable at EUR 0.31 compared to EUR 0.33 last year. Although we had a shortfall of EUR 16.3 million in EBIT. On interest level, we see that the interest expenses are decreasing although we are growing, and although that current financing is more expensive than the past. Why is that? As you know, our business model is focused on mitigating risk. Therefore, we signed swap agreements with banks on securing interest against wide rising interest rates. They came in with a very positive development in this case, having in mind that we have such higher interest rates, and we had bigger cash payments, and regular will have, which compensate in higher interest expenses. This lowers the interest expenses, therefore, we have an improvement in the interest expenses that flattens the development of the EBT. Since to the low, high, very high profitability we have seen last year in the respective parks, which led to higher tax payments, now with the normalized income of the parks, tax payments are decreasing as well, and that compensates the formerly mentioned shortfall in other figures. Therefore, we have stable EPS. In the operating cash flow, we have a drop by EUR 46.8 million, which is 29% below previous year. There are two things we have to have in mind. Firstly, the first half of last year was an extraordinary successful cash-wise half year, because the fourth quarter of 2021 had already seen high energy prices, and therefore, all that cash came in, in the first quarter. Secondly, it is that in these days now, we have to pay out the taxes, which were accounted last year for the high profitability, having in mind the unusually high energy prices of last year. Tax now has to be paid out this year. This was fully reflected in our guidance, but compared now, half year to half year, it looks like a higher reduction, but that is temporary, as it is already reflected in the guidance. Ladies and gentlemen, if we then compare our Q2 figures and the half year figures with the consensus of our analysts, we see that we exceed the revenues, the EBIT expectation, as well as the earnings per share expectations. Only in EBITDA, we are pretty much on that level and only in our cash flow, due most likely due to these tax payments, which have to be done these days. There's some shortfall of EUR 6 million in the quarter. If we have a look then into the segmentation report, we see story-wise, pretty similar to what we have seen in the years 2021 and before. Only in the outstanding year, 2022, the figures looked somewhat different, and now we have to compare us with these extraordinary high figures of these days. We have revenues in the solar segment, which is reduced by EUR 9 million. The portion of the solar parks, the solar contribution on the revenues line, is dropping from 72%-68%. That reason is not the reduced power price, the level, but it is the full consolidation of Stern in the PV segment, boosting the revenues there by 10 times. The margins are in the solar and wind farm business now, going back from 79%-76% in solar, from 82%-75% in wind farms. Please have in mind that the operating EBITDA margin in previous year was driven by the high power prices. The EBITDA margin in the PV service business, which was, as we explained to you, due to accounting reasons, disappointing in the first quarter, now came back to the guided 18%. Now all these accounting issues from the first consolidation are cleaned up. In the asset management business, we have a drop in the EBITDA margin that is temporary. We will discuss that on a later page. Now, let's have a look into the solar segment. In the solar segment, we have new park additions contributing almost EUR 5 million. These are the PV parks in the Netherlands and Denmark. These ones, which we acquired together with Stern. We have EUR 14 million, a lot of revenues in the existing parks, 50% of that volume-wise, 50% of that price-wise. That is reflected in the EBITDA as well. In the wind business, we have a pretty similar situation like in solar. With the Lithuanian acquisitions, we have EUR 3.3 million additional revenues, and then a loss of almost EUR 12 million in price and volume. Here, the price effect is higher than the volume effect.... In Stern Energy, as you know, we have the first full consolidation of Stern in our figures, boosting our revenues here. Stern is a specialized operator, which offers technical services for the management, maintenance, and construction of PV systems, and they are currently managing 520 parks with a total capacity of 1.4 gigawatts, and this in Italy, Germany, UK, and the Netherlands, and now the newest branch in France. This company is very successfully realizing the strategy which we defined when we took them over. The reason, the point is that they started in Italy, and then we handed them over our capacities in Germany, providing them with a platform on which basis they started to grow and attract other customers. The same happened then in the UK, then in the Netherlands, and now we handed them over our French portfolio. They do it extremely well, and already they had numerous customers asking them, now, since they have a French subsidiary, to take over their portfolios as well. In total, two-third of their portfolio are not from ENGIE, but from other customers, the strategy works out well here. The 18% EBITDA margin, as forecasted, is now realized, they are contributing very well to our P&L and to the earnings per share. In the asset management business, we have a growth of almost EUR 1 million in the revenues, which is based on higher ongoing remuneration from significant increased assets under management. At the same time, they had two cost provisions. Usually, we should expect on a 14% EBITDA margin, EUR 1 million EBITDA. There's a shortfall of EUR 0.8 million, which has to be seen as temporary. The reason for that is that firstly, they had startup cost for the cooperation with badenova, which is managed by the asset management business of EUR 300,000. For their future growth, they do not need capital, but personnel. They had to hire additional personnel, and this created additional cost of EUR 500,000. This, with the ongoing growth this year, we are confident that they will reach their guidance as well. In the headquarters, we have growth of the negative revenues. Negative revenues mean this is the consolidation of the internal business of Stern with our company, which is approximately one third of their revenues, because they're one third of our, their portfolio is from us. So therefore, the same applies to the EBITDA. In the EBITDA of EUR 6.3 million, approximately EUR 2 million are negative consolidation from Stern, and EUR 4.7 million are cost from the headquarters, which is more or less on the same level, like the first half of last year. When we talk of figures, we want to give you an insight into the development of our Scope 1, 2, and 3 emissions. We calculated them for 2022. This is our most recent figure, the total corporate footprint was reduced. In the Scope 1, we have an increase of our emissions, that has more technical reason. The weak point is that in 2020 and 2021, we had COVID, therefore a very reduced use of our company vehicles. So could everyone please go mute? I hear noises. Thank you very much. We have an increase here, but these are just the company vehicles. In Scope 2, we have a decrease by 94% of our emissions. This is, for instance, the using of green electricity for our offices, and we have 99% of our emissions are Scope 3 emissions, which are the emissions of our supply chain and other indirect emissions of our partners. Here we have a reduction of 31%, but this is honestly said, only a technical reason. We didn't have too many construction sites last year, this was reduced by 31% due to the reduced number of construction sites. In total, we plan out until 2025 to have the Scope 1 and 2 emissions to be halved. Under 2030, we want to be carbon neutral. This shall be done by exchanging all company vehicles and to have only fully electrified vehicles under 2030, and that we want to use only green electricity to operate our offices, wind and solar power plants, and this will keep our emissions down. We want to be fully climate neutral by 2040 in Scope 3 as well, and for that, we have to cut our emissions here by 95%. In order to reduce these Scope 3 emissions, which currently amount for 99% of ENGIE's total emissions, we are working with suppliers and business partners along the entire value chain to find solutions that will help to achieve the goal of carbon neutrality by 2040. Measures include life cycle analysis to identify the main sources of emission, substitution of fossil fuels and production wherever possible, increased use of recycled materials from circular economy, and increased use of low emission transport. We will certainly review their effectiveness and target achievements throughout the time and will improve if necessary. Now, let's have a look into the guidance 2023. When we released our guidance in March, we told you that that is based on standard weather assumptions. Well, that was pretty weak in the first half. On current interest levels, that they should be unchanged. Honestly, it's an up and down on the long term and of 10 years interest rates, that the revenue skimming will be waived in Germany. This is the fact. In Spain and Italy will stay in place, which is the fact as well. That the power price curves will still stable at this level of 20th of March, 2023. Well, you might recall this chart from our March presentation. Honestly said, the red figures changed somewhat. In total, it is that the energy prices, which were from us, expected to decrease by 40% compared to previous year, in fact, dropped by 60% compared to previous year. The worst two examples or the, the worst example is Spain PV. Here we expected a drop in electricity prices by 21%. In fact, they dropped by 51%. The best country is Italy PV. Here we expected a drop of the electricity prices by 54%. In fact, they dropped by 64%. We see a very harsh drop in power prices. Please have in mind that the business model of Encavis is to have most of the revenues, long-term price fixed. As we pointed out with our guidance, that the planned, of our planned revenues, more than 91% of these planned revenues in March were fixed during the course of the year. This still applies, therefore, such a drop in electricity prices harms us, but only to a limited extent, only in these positions, which were merchant in March and were not in the meantime, locked in price wise. Although we have this price drop, we confirm our guidance of EUR 440 million of revenues, more than EUR 310 million of EBITDA, EUR 185 million of EBIT, EUR 280 million of cash flow, and EUR 0.60 earnings per share. This is still based on the assumption of stable interest rates and standard weather conditions for the second half of 2023. Said very bluntly, and you know that we are direct in the communication. We had some buffers in our guidance. They were somewhat eaten up by the metrological shortfall of the first half. As if the weather is on standard level in the second half, we are absolutely sure that we will reach our guidance. That dependence on the forecast, on the weather forecast, is typical for our business because we are renewables. If we have a look into the roadmap of our acquisitions in 2023, we, as I pointed out, already invested into 93 MW of parks, Montale, Montale, Casco and Montefiascone. We already have 175 MW of project, which will be announced soon. 268 MW in total are secured. That means we need approximately 330 MW to go to reach our 600 MW goal. Currently, we are in negotiation discussion of 400 MW, so much more than expected. We can allow us a shortfall on, of cancer projects of 85 MW, because we are planning to have 32 MW of battery acquisitions this year to reach our 600 MW goal. It is not only that we confirm our P&L guidance, but our growth target as well. Ladies and gentlemen, thank you very much for listening, and now we are available for your questions. Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press 9, followed by the star key on your telephone keypad. If you wish to withdraw your question, please press 9, followed by the star key again. Please press 9 star now to state your question. We have the first question. It comes from Martin Tessier, Stifel. Yes, sir. Good morning. Thank you for the presentation. One question on Lithuania. You indicate that it's 17% of the power production of the wind segment and also EUR 3.3 million of revenues, so 7%. This indicates a selling price of EUR 32 per MWh only. Could you provide us with more clarity on the expected selling price of the asset for the remaining of the year and also for the future years? Second question on badenova. Can we expect first acquisitions from this new structure to be realized in 2023? Thank you. Hello. Yes, this is Mario Schirru. I will answer the first question regarding to Lithuania. The point here is that we have sold the production of the power plant under a long-term PPA, with a stable and fixed price for the next years. The revenues that will be generated by this asset are more or less independent on the evolution of the power prices, given the price is fixed. We have to just look out or hope that the meteorological, meteorological conditions will be stable as they have been so far, and that they will be, they will stay this way also until the end of the year. Yeah, and Martin, regarding your questions on Badenova. Well, this was just implemented, that cooperation, and now we have to wait for the legal approval of the cartel, the rules that we are allowed to have that joint entity. Well, here again, there are usually some delays, or if you have to have something to do with the states, and as soon as that happens, we can start right off to acquire some entities. As a matter of fact, whether this will happen already this year or beginning of that next year, I don't know, but we are intending to have soon the first projects here. Okay, thank you. Thanks. The next question comes from Thomas Junghanns from Berenberg. Thanks. Good morning, gentlemen. I have 4 questions. Maybe we can go one by one. My first question with respect to the Italian solar parks, which were acquired by Encavis. So they are ready to build status, my question is: When do you expect the parks to be connected to the grid? The, the, we have, the, the, the plants will be operational. One will be operational in 2024, at the, in September, more or less. The other one, hopefully, a little bit earlier. Here we can, we have to still wait for Terna, which is the, high transmission network operator, operator, to confirm the construction of a substation that will be necessary to be fed in, to be, yes, to feed, feed in the power. We are not alone in that area, so we are working on a temporary solution with other, power producers. Again, this is something that we have to, to discuss with Terna. Anyway, both will be operational throughout the year, 2024. The first one, hopefully, a little bit earlier, the second one, in September, October. Okay, got it. Perfect. Thanks. Yeah, you mentioned that you plan to increase your capacities by 600 megawatt in 2023. I saw also in your presentation that you have 400 megawatt late stage projects, which will be realized in 2023. My question is with respect to 2023, how much of the capacities will be in total connected to the grid and are already connected to the grid so far? Yep. This also is important to highlight that when we, when we guide you through our acquisitions, we typically present the actually, we actually only present the projects that are ready to build, that can be built, which does not mean that they will be operational very shortly. As we have pointed out several times during the last year, we have seen that there is a much attract- but it is much more attractive to for us, to build our plants on our own, meaning that we then can negotiate the PPA, we can negotiate the financing agreement, of course, the whole procurement can be done with us. Long story short, the, out of the 400 megawatt that we are negotiating, a couple of them, I think 150, are currently being constructed, meaning that we could take them over as fully operational or close to fully operational. The other ones are still ready to build projects, meaning that we will then have to trigger the EPC tendering and manage the whole construction cycle. This will lead to the plants becoming operational in 2024. Okay, thanks. This helps a lot. My third question with respect to the current interest rates, what is the current cost of debt for newly started projects? It starts, honestly said, depending on which jurisdiction you are in. We have usually approximately 150 basis points or more margin, which we have to pay on the current long-term interest rate. It is sometime with a 4, sometimes with a 5 in front of the comma or the dot. Okay, perfect. My last question is, with respect to the electricity prices. You mentioned in your report, yeah, that you have calculated, or included, incorporated these drop in electricity prices. On the other hand, you also mentioned, at the end of your presentation, that you assumed a drop of 40%, but the electricity prices on average, dropped by 60%. Maybe this a little bit contradictional. I have misunderstood here something? ... First of all, in our guidance, we look into the future of the, of the power price development. Then we have a discount, usually for weather shortfalls as well as for price shortfalls in that part of the revenues, which are not price fixed. That in total turns out to be a fair adjustment so far, and that's the reason why we still can keep up to our guidance. Okay, thanks. I will go back in the queue. Thanks. Well, thank you very much. Right now we have no questions. If you want to state a question, please press 9 and followed by the star key. Mr. Husmann, there are no more questions. Ah, there come some questions right now. Okay, we will take them. Next question is from Teresa Schinwald, Raiffeisen Bank. Thank you. Good morning. Could you give us also an update on the current development of the EPC costs of new installations? What's been happening in the past 3 months? Yep. Happy to provide you a couple of insights. We have seen that the prices have stabilized again. We see actually a significant drop in module prices. They are cheaper than ever, and every time we get a new quote, we are surprised by how cheap they have gone. On the inverters, we do see a stable situation with supply becoming, I mean, staying at the, at a good level. What we continue to experience is long lead times in the delivery of high voltage components, and this is a painful, I mean, painful thing, because we, of course, need to have also a transforming station and transformers in place or available to construct the plants. We have, for the plants that we have already acquired and we have presented to you, the two in Italia, in Italy, we have already placed the orders. This couple of weeks ago, so we, we expect them to be available when we will need them. In general, this is something that we have to monitor very closely. In a nutshell, stable prices for all the components, very cheap prices, for modules. The only thing to look at carefully is the delivery, are the delivery times for high voltage components. Could you maybe also add a view on, on the wind, equipment, as there seems to have been some stabilization or even increases in prices as the manufacturers reported? Yes. On the wind space, we, as you might know, we are a little bit, sort of, more distant from the procurement exercise because we, buy the, the whole package, basically, the, the plants with the turbine, supply agreements already included and negotiated by the developer, when we acquire the project. We don't really handle that, that process. Our partners do, do complain a little bit about, about the, the tight situation. It is something that we factor in quite brutally when we place our orders, basically, when we, when we, when we place our, our, offers for the projects and, for the wind farm that we're going to acquire, we will have, the supply of the, of the turbines that we believe and the, and the developer believes more, suitable for that, for that site. So again, we don't really see a lot of these struggles. Awesome. Thank you very much. Next question comes from, Elisabeth Weisenhorn, Portikus Investment. Yes, hello, good morning. I would just like to know, what is the future return profile of the business? Could you elaborate a little bit more on the question? What do you mean by, future return profile? Actually, when the electricity prices go down, then interest rates go up. Okay, modules come down, but in wind energy, probably prices go up also. What's left for you? You know, yes, this is a good question, and, I, I understand where you're coming from. I think it's very important to highlight and to guide you a little bit through the value chain of the whole industry. We see that or we have seen in the last years that developers have made sense, I mean, important returns on their projects because there was a scarcity of products being offered to the market and a high demand of projects by investors like Encavis and competitors. Now, we are seeing that this is changing, and if you look at basically, at the structure of the cost of our project, you will see that the development fee, so what we pay out to the developer for the projects being brought to the finish line and being ready to build, is going down and is creating. Basically, we are reducing the inefficiency that we had over the last years in the industry. Meaning that through the calibration of the power price, we can accommodate for all the factors that you have just mentioned. When we look at our business models, we see returns that are increased or that are going up compared to the returns that we have seen in the last years. Although the, some, some components and some, some, just some prices really didn't play in the favor of, I would say, of, of, yeah, of the whole- of the industry somehow. This is very important. We, we don't really look into all the details. I mean, of course, we do manage them, but we overall define a price that we are willing to pay for a certain project and calibrate this price on the base of a return expectation. Our return expectation are going up, despite prices going down, despite interest rates going up, because the development fee, what is paid out for the projects being developed, is going down significantly. Thank you. Right now, we have no more questions. Okay. Thank you very much to all of you for listening. Thank you very much for supporting us, and we will stay in contact and see you next time. Thank you much, and please stay safe and healthy. Goodbye.