Good morning, ladies and gentlemen, or good afternoon. This is the conference operator. Welcome. Thank you for joining the EDF half year 2023 results Q&A session. Anyone who wishes to ask a question may press star 1 on their touch-tone telephone. To remove yourself from the question queue, please press star 2. Please pick up your receiver when asking questions. At this time, I would like to turn the conference over to Xavier Girre. Please go ahead. Thank you very much. Good morning or good afternoon, everybody. I'm very pleased to welcome you to this call, together with my whole team, we will be happy to answer your questions. We have 45 minutes. Just a few words as an introduction. H1 2023 saw strong growth of the group's results, thanks to good operational performance, with a gradual return to better nuclear fleet availability in a context of favorable price environment and no exceptional regulation. EBITDA reached EUR 16.1 billion. Net income excluding non-recurring items, EUR 6.3 billion, net financial debt stabilized at EUR 64.8 billion at end June 2023. The credit ratings were confirmed with a stable outlook by the three agencies. It underlines the support for the French state and the key role of EDF in the energy transition. These results make me very confident to reach our upgraded targets, which are now set at less or equal to 2.5 times for less than the TPD ratio, and at less or equal to 4 times for the adjusted net debt to adjusted EBITDA. Indeed, the expected level of EBITDA for the year should allow the net financial debt to stabilize in 2023, even with an unfavorable one-off working capital due to reversals from last year. The floor is yours, and we are very happy to answer all your questions. Hello, this is still the operator. Just a quick reminder for participants connected. If you want to ask questions, you can press star and one on your telephone. We pause for a moment as callers join the queue. The first question is from Andrew Mulder with Credit Suisse. Please go ahead. Yes, hi, everyone, and thanks, Xavier, for organizing this Q&A session. I just had a couple of questions. One thing you said on the conference call earlier with relates to what simultaneous translation that you said, was that the favorable income impact of higher nuclear generation should be more substantial in the second half. I just wonder what that means in terms of your EBITDA. I mean, you deliver EUR 16.1 billion in the first half, and if you're going to see more of an effect from higher nuclear generation in the second half, does that potentially mean you're going to deliver another EUR 16 billion in EBITDA in the second half, or is that far too optimistic? That's my first question. The second thing I would just like to clarify, exactly where are you in terms of the stress corrosion on the nuclear plant? I heard what you said this morning, you've already finished the 11, you've got 2 more that are ongoing, you've got 2 that will get done through the rest of this year. What about all the other reactors? Are we still talking the end of 2025 before you actually expected all of the other reactors? Maybe 2 more questions, if I could. I just want to ask you about working capital. You just mentioned it, and I just wonder, do you have any expectations of where working capital might be at the end of the year? Do you expect the negative effect we saw in the first half to reverse? Finally, I just need to ask you probably won't answer, but I just need to ask you about the hybrid bond. I mean, obviously, you've got the remainder of the dollar bond, which you've got tender for them for that 30% outstanding, and then you have the euro hybrid next year. Could you maybe give us a little bit of an idea what your intentions are for those, which is, and I know you intend to call, but are you intending to issue new hybrids, or are you going to use the proceeds of the OCEANE conversion in order to call them up as that first hybrid? Thank you. Thank you very much for your questions. First, as regards the nuclear generation for this year and its consequences on our EBITDA. First point, indeed, we've confirmed our goal as regards the nuclear generation in France between 200 and 230 terawatt hours. As it was highlighted this morning, we have generated during the first half of the year, 158 terawatt hours, but with a slow start during Q1, which urged us to buy back some volumes at quite a high price. That's why during the first half of the year, despite the fact that, as a whole, we've generated 4 terawatt hours more than during first half of 2022, there is very limited impact on our global EBITDA trend between first half 2022 and first half 2023. Having taken that into consideration, if we consider that we go on around the same path as regards the nuclear generation and if we reach to our goal in this range, 300 to 230, this should have a more significant impact, yes, on our EBITDA and EBITDA growth compared with last year. Of course, then you have to take into consideration all the potential plus and minus, of course, during the rest of the year. Yeah, we are in a positive trend, and we are very confident as regard the trend of our EBITDA for this year. I just add one word for the first question. As you know, we do not give any guidance on EBITDA. We've given our guidance on the ratios, financial ratios, and debt to EBITDA, and economic debt to adjusted EBITDA. We have improved the goals, which takes also into consideration the improvement of the nuclear generation and the improvement of EBITDA also expected during second half of the year. As we get the stress corrosion, first point, and to be very, very specific, very purely in answering your questions, where are we today? Among the 16 most sensitive reactors, we have already put back on the grid the 4, 1,400 megawatt reactors. So after replacement of section of pipes, this is done. They are back on the grid. Then as we have replacement of impacted lines, for the 1,300 megawatt, 7 of them are finalized and are ongoing for 2 of them. And 2 reactors will be treated by the end of the year, and the last reactor will be treated during its first ten-year inspection, starting at the end of this year. To be precise, 7 are finalized, 2 are ongoing, 2 will be treated by the end of the year, and 1 during its ten-year inspection starting December 2023. For the rest of the fleet, meaning, the 32 reactors of the 900 megawatt fleet, and the eight, what we call P4 type reactors of the 1,300 megawatts, which are said as less sensitive to stress corrosion. The inspection will be carried out during scheduled maintenance shutdown in the beginning of 2025. That's exactly, to be very accurate, the current status of our stress corrosion treatment. Of course, it doesn't mean that this is over. It doesn't mean that we have finished with the stress corrosion phenomenon. That's why we have confirmed progressive improvement of our nuclear generation, starting this year, clearly, going on in 2024, with a new range between 315 and 345, and in 2015, between 335 and 365. As we got the working capital at the end of the year, of course, I want to be very, very cautious about that, because we all know that there are plenty of moving parts in the working capital. What I explained this morning, and I tell you, and of course, I can refocus on that. What I explained is the fact that during the first half of the year, there has been swing in the working capital between EUR 22 and EUR 23. We had already highlighted at the end of 2022, that we had a very positive trend in 2022. It's absolutely normal that there is this swing during the first half of the year. What are the two key parts on what could happen in the rest of the year? First, as regards the trading business as a whole, on rough figures, the working capital has been increased by EUR 4 billion during the first half of the year, due to the fact that if trading had bought some electricity, in particular, in the market in 2022, in particular, at the end of the year, for a year. This has been paid during the first half of this year, 2023. First point. Second point is the fact that in the context of a relative decline of the price, the net modelling cost have been reduced. The sum of these two elements gives an increase of EUR 4 billion for the working capital of trading during the first half of the year. What will be the rest of the year? Difficult to know. Of course, it will depend on the volatility, it will depend on the trades that will be done, implemented by this trading. Nevertheless, and to be qualitative, as a qualitative comment, you see that there is a very significant swing due to the fact that in the context of very high pricing in 2022, these margin calls and interventions in the market has been done in 2022 and has been reduced or paid early in 2023. It's a quality difficult. Second, point, the CSPE, as you know, this is a mechanism, core mechanism, which is used in order to compensate for the cost of the public service, and in particular, for the cost of acquiring the energy renewable generation. When the market price is higher than the price of the, what could be on the half, so the price at which we have to buy these renewables electricity. When the price is higher, it means that EDF has a debt towards the mechanism. This happened last year in particular, which reduced our working capital. During this beginning of the year, the price is going down, so it means that our debt to the system has been reduced, and even we have a kind of receivable, so which contributes to increasing our working capital as regards the CSP. As explained also, this is left on the tariff sheet, which is organized via the CSP. Last year, you remember, it was increase of 4%, this year, 15% in February and 10% in August. The first rate has to pay, to compensate EDF for this tariff shield. On the basis of the current laws, this has to be reimbursed before the end of January 2024. You understand that it will be different, of course, from the trading situation. Here we have our text, but the trend of the working capital linked to the CSP will depend on the pace of this reimbursement by the state to EDF, linked to this tariff shield. I cannot be more specific, but you understand, nevertheless, that the increase of the working capital was particularly high during this first half of the year, due to the swing, between 2022 and 2023. You have, of course, the usual, working capital linked to the operation, receivables and payables. I don't want to forecast about that. It was increased during the first half of the year. Usually, there is a seasonality, which give an increase during the second half of the year, because we enter during Q4, of course, in the wintertime, so which increases the operational, receivables. We see also got this part of the working capital. This is what I can answer building block to building block about our working capital trend for this year. As regards the hybrid, I will give the phone to Bernard Bricout, the Head of our financing department. Good afternoon, everybody. hello, Andrew. Nice to meet you again. Mm-hmm. On hybrid, yes, it's true that given the fact that we can use complete conversion of the OCEANE, we could not issue on the incoming calls of the new hybrid in October 2024 and January 2025, provided that the level of the value of hybrid remains nearly EUR 10 billion, which is what has been stated by S&P. As you know, we will remain opportunistic, we will keep a close dialogue with investor. This doesn't mean that we will not issue any hybrid in the meantime. We will remain open to the opportunities in the market. We will hear what the investors are expecting in the different currencies. That's, what I can say at this stage. I'd like to add that, the hybrid remains a key point of our financing strategy. Important also for you to know. Thank you. The next question is from James Sparrow with BNP Paribas. Please go ahead. I'm sorry, the question has been withdrawn. I go ahead with the next one, that is from Damien de Saint-Germain with Crédit Agricole. Please go ahead. Yes, good afternoon, everybody. I have a couple of questions. First, regarding the regulation in France. We are getting closer to the end of the NOME and the ARENH mechanism. I would like to know if you can share anything in regarding your progress, you know, how with your European Commission on that front. If we are in a situation where we can't reach an agreement, do you consider extending, I mean, you and the French state, extending the current framework beyond 2025? That would be my first question. The second is on the nuclear output. I hear you well and read through the progression, that the nice trend in the recovery in the nuclear output. could you share with us, in your view, what could be a normative year, once you have been through all the stress corrosion division, and factoring the ten-year inspection, as well as the upcoming, let's say, start of Flamanville, where you think it could be, let's say, a normative year for the nuclear output going forward? Final question would be, regarding your strategic plan. What you suppose initially to be announced before the summer, I understand there may be some delays, especially on the back of missing information on the regulatory front. If we put aside regulation, is there anything you could share with us when it comes to your strategic target in terms of geographies, technologies, or businesses, or if you are in a situation where you would confirm any of the strategic development you had in the past? Thank you. Thank you, Daniel. As I got your three questions, first, starting by the second one, I mean, if you just take the middle of the ranges that we give for the next years, you see that the middle of the range for 25, it's 350, excluding Flamanville. I am not saying this is a normative target, but if you link that with the first question about the pace of repairing the stress corrosion phenomenon, you see that this would be, this could be, I mean, of course, a significant step for us to come back to this level, excluding Flamanville. Clement highlighted that this morning also, we want in the long run, well, I will talk exactly, but in the long run, we want to be in a position to come back to 400 terawatt hours, including Flamanville, and including the increase of capacity that has been also detailed this morning. That we consider might be in the range of 20 terawatt hours, which would be included. At the global mid to long-term target, in the range of 400 terawatt hours. I am not telling you neither that this is a normative goal, but this gives you very, two very precise references for it. You see that for 25, we should, in the range, in the region of 350, and in the mid to long term, all the caveats that I have highlighted, we want to shoot in the, in the region of 400 terawatt hours. As we got, so which is, of course, a very significant improvement, and we are totally dedicated to that, and all the teams are clearly dedicated to the operational improvement in order to maximize our generation. This makes the link with your question about our strategic plan. I mean, in our strategic plan, I think it's important to consider that there is not one plan with one document or one date. What's very important for us, and this is what we are all working on, is to improve our efficiency, internal efficiency. I think I also, I pick it up this morning, among other things, the four working groups that we have set in order to improve our efficiency and safety, in order to increase our competitiveness, our productivity. Second, we are working on our business model, also in order to optimize our capital allocations, in order to be more efficient, also not only in the operational field, but also in the financial field, in the equity injections, the capital allocations, in order to optimize, of course, the efficiency of our balance sheet. Third, and this makes of course the link, with your first question, we consider also that a consensus can be reached as regards the market design, as regards the fact that it's absolutely necessary to make consistent, the fact to have prices that are absolutely sustainable, for the customers, for all the customers, and prices that make France as a very competitive platform for all the investors, on the one hand. On the other hand, which a level of pricing and market design, which would enable EDF to contribute government to the financing of all the CapEx that are needed in this period, of energy transition. This is third major element of the work that we are working on these days and weeks. Today, there is no announcement about that, it's how we see the future, and in order to enable EDF to be at the heart of this energy transition in a sustainable way for all the stakeholders. Thank you, Gilles. I don't know if you, if you want to add on that. The next question is from Jonathan Crossett with GLG General. Please go ahead. Hello. I'm just wondering if you might be able to provide the market with some guidance around the potential issuance plans in the second half of this year, and maybe help us understand a bit better the sensitivity to the cash generation that you've seen in H2. Thanks. Thank you for your questions. First, as we get our issuance program, as you've seen, I mean, we have made plenty of efficiency during the first half of the year, at the whole, in the range of EUR 8 billion in different currencies, different forms, senior, hybrid, and we consider that we've been very successful in doing that. Yeah, this was absolutely a very positive message that we got from the market, and also a very significant encouragement about the consistency about what we are doing. Where are we today? First, roughly speaking, we have already made our yearly program, so we do not intend to double our issuance here during the second half of the year compared with the first half of the year. However, as you know, we are always very forward-looking, very opportunistic. Obviously, we continue to analyzing that day after day, the market, in order to seize any opportunity to issue in good conditions, to diversify our financing, in order to finance our investments, and also to be ahead of the future of the future financing needs that we have in 2024. Exactly how we see the second half of the year. As regard the cash generation for H2, I mean, 我 看, I think that you have the building blocks. As we have the beginning with generated EUR 16 billion during the first half, EUR 16.5 in the first half of the year, and you understand that we consider that we are in a good place to go on. As regard the working cap, I have given you also the building blocks and the potential positive movement for the second half of the year. I have also highlighted that it's very important to be very cautious, due to the fact that you can have very significant movements in our working cap. As regard the CapEx, we have invested EUR 9.1 billion during the first half of this year, which is consistent with our CapEx program, which we intend to be between EUR 19.5 billion, okay, that round EUR 19.5 billion. We see that it should be the same order of magnitude during the second half of the year. This should help you building your cash flow forecast for EDF for the whole year. Just one additional point as regards the CapEx. Within this EUR 9.1 billion CapEx, during the first half of the year, EUR 5.2 billion are development CapEx, and EUR 3.9 billion are maintenance CapEx. What we call development CapEx are CapEx, which will bring additional capacities for the group. In particular, new nuclear projects, renewable, connection of renewable, so projectors to the grid, for example. I think it's very important because this shows you that we have really a positive strategic movement in order to be where we want to be and play a key role in the energy transition. Thank you very much. The next question is from James Farrell with Bank of Baroda. Please go ahead. Yes, good afternoon, everyone, and apologies earlier, I accidentally turned myself off. Just a couple of questions really following up on the previous ones. Just on the working capital, I appreciate you've given us as much color as you can, but it's still really not clear to me whether you're actually signaling kind of a reversal during the second half of the year or potentially sort of more negative outflows. And certainly if it, if we get a reversal, sort of, my simple modeling this stage would suggest that we'll get cash generation and a reduction in debt. And I'm sort of struggling to square the circle, you know, based on the guidance that you've given for kind of debt to the end of the year. So long, yeah, long question short, is working capital going to reverse or be stable or increase again in the second half of the year? Then the second question is more about the strategy side and the longer term strategy. Again, I appreciate it's a bit of a moving picture. Can you give any sort of guidance on when you might be in a position to take a decision on new nuclear and, you know, when you might, you know, that you might actually have to start investing on that side of things? Thank you. Sorry, your second question is about new nuclear in France? Yes, in France. Yeah. Okay. Okay. As regards your second question, I mean this semester was an important one because now we know the site, the three sites on which the first six future reactors will be built. It of course, important step. We have currently also work that is being done in the assessment on of the cost on the on the project. We have also, of course, also work which is currently being done on the technical maturity. They are on these two elements, cost and technical maturity reviews, that are being organized in order to be to affirm all the hypotheses on the basis of which a decision will be taken. This is currently being done and to be finalized before the end of this year. You have also a work, which is also currently being done about the financing of the future EPR2 program. We do not have any specific deadline, but let's say it's also currently being worked. Of course, there is a link between the financing of the future EPR2 program and the future also market design, because it's important that EDF be in a position not only to finance the current Grand Carénage, but also to contribute to the financing of these future new reactors. We see, I mean, a final decision is of course, not expected this year. It's something that will be considered next year. I do not want to be too specific on this period, but these are exactly the points that are currently being worked on, affirming the cost, affirming the technical maturity, performing the financial model. As we have a working cap, what I want to highlight, and what I already highlighted, is the fact that H1 has been really significantly impacted by the reversal of positions and market trends that were key in 2022. All these reversal that we can identify have already been taken into consideration. Now as we look at the trends for H2, and I can just repeat what I already said, as regards trading, we could consider that there is no reason for as significant change as it was the case in the very first half. I want to be very cautious because it will depend on the volatility of the market and on the trading program that will be implemented by EDF Trading. As regard the market, as regard the we have today, I mean, there is no reason for such a move as we experienced in the first half of this year. It was an increase of EUR 4 billion during this first half of this year. Once more, I want to be very cautious about that, depending on the volatility of the market in particular. As we got the second key building block, which is the CFP, I already explained that this is dependent on the pace at which this will be repaid by the state to EDF. By the law, by the regulation, the repayment has to be done before the 31st of January, 2024. I do not know today what will be exactly the date between now, today, and the 31st of January, 2024. You see that the cutoff on the 31st of December will also depend on the pace on this reimbursement. This is something important. As regard the third point, operational working cap, I mean, this is of course, depending on the business and also on the seasonality. Usually there is a slight increase during the winter period. This is absolutely nominal. Nothing specific about that. You see that you have two significant building blocks that have impacted first half of the year, and we do not expect similar building blocks in H2, but I do not want to be too specific about how they will reverse, because it's important to be also quite cautious about these two trends. That's very clear. Thank you. The next question is from Berkeley, that's with Bank of America. Please go ahead. Hello. Thank you. Can you please explain on the plans to increase the capacity of your nuclear plant? Which plants are the likely candidates for this exercise? Well, this is much too early to give details about that. I mean, our nuclear experts consider that there are some opportunities they have to work on. We have also to, of course, to see what would be the cost of the capacity that would be necessary to improve the capacity. We will come back to that. I mean, this is a mid to long-term goal. Clearly, we want to go and decide. That's why we are proud to tell that and to share that with you, but it's too early to give any detail. Thank you. Also, if I may, also, you were planning to extend some of the 900 megawatt, nuclear plants beyond 50-year operating life. What's your view on that? Our goal is to extend the lifespan, the life duration of all the generators. Starting from 50 years, from 40 to 50, and then beyond, of course. As you know, a law has been passed during this first half of 2022, which has deleted any constraint on the nuclear generation capacity. The 63 gigawatt that had been set in 2012 has been deleted, canceled, and the 50% by 2035 has also been deleted. I mean, from now on, the our generation capacity, nuclear generation capacity, will be depending on technical safety questions. We have, of course, to be sure that we are able to generate nuclear electricity in economical conditions, safe conditions, et cetera, et cetera, et cetera. We have no legal, cap, no more legal cap. Okay, thank you. As a reminder, if you wish to register for a question, please press star and 1 on your telephone. We've got a follow-up question from Andrew Mulder with Credit Suisse. Please go ahead. Yes, hi. Thanks for taking my question. I thought I just heard you say, Benjamin, when you were talking about the French state, you said equity injection. Could you just clarify there exactly what you were talking about? I mean, I'm not really convinced the French state could actually inject equity into EDF, given the sort of state-owned rules, but perhaps you could just comment on that. The second thing I just wanted to know, was perhaps an update on Hinkley Point. You know, is there anything new there in terms of the commercial operating date of the plant? And I also wonder about the financing Hinkley Point. There was some speculation, you know, a few months back, that the Chinese were not going to put any more money in and that you might be needed to as EDF. Could you just update us on the state of Hinkley Point and the financing timing there? Thank you. Just a follow-up question on my side. About what did I refer to in equity injection? I think it was... Sorry? No, sorry. I just didn't understand your equity injection. No, because, I mean, I didn't speak at all about any equity injection by the French state. I do not, because exactly to what you are referring to. No, I didn't refer to anything of that kind, so I do not understand. Sorry, I didn't understand. I cannot answer our question because I do not understand to what you are referring. Okay. Sorry, I didn't understand. Capital injection or equity injection by the French state. I mean, if you can specify your question, I'm very happy to answer to it. If not, I can't answer a question that I do not understand. No, sorry. I think I heard you very clearly. I must have misunderstood. Perhaps just move on to the Hinkley Point. Yeah. Okay. As regard HPC, I mean, as we have indicated, I mean, we are reaching a point at which the investors, the partner will reach the end of their committed equity and entering a new phase, which will be called the voluntary equity. When this point will be reached, and it's expected during Q4, the partner, meaning CGN and EDF, will be entitled to not to go on financing. Of course, entitled to go on, but also entitled not to go on, if they would like to. In order for you to understand how it works, you have cash calls on a monthly basis, and then at each cash call, each partner can decide to inject equity if they want to or not. We do not know yet what will be the CGN intentions. We have a right to decide that we are joining this period. Of course, as far as we are concerned, we intend to go on the project. We won't be guilty about that. We'll be in a better position, I mean, when we have reached this position to tell you more, because we will know better the intentions of CGN. Once more, it's not necessarily an intention which would be one for most, because it's a decision that has to be taken at each cash call. How often does cash call, would you say? It's a once a month. Mm-hmm. You know, it's a usual process. Different process. I understand there is no more questions. If this is the case, I would like to thank each of you. Thank you very much for your questions. To tell you one more that, we are all very happy to discuss with you and to help you understand our company. Of course, we intend to go on with the discussions and explanations and to wish you the best. Thank you very much. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.