Welcome to the EDF full year 2024 results Q&A session conference call. Anyone who wishes to ask a question may press star and one on their touch tone telephone. At this time, I would like to turn the conference over to Mr. Xavier Girre, Group CFO of EDF. Please go ahead, sir. Thank you very much. Good afternoon, everybody. I am pleased to welcome you to this call, and together with my team, we'll be happy to answer your questions. Just a few words as an introduction. After an exceptional year in 2023, 2024 was again very strong, second best ever indeed, with an EBITDA at EUR 36.5 billion and stabilization of the net financial debt. The leverage ratio is still at a low level of 1.49 x. This is the result of an excellent operational performance with an increase by more than 41 terawatt-hours of the nuclear output in France, notably thanks to the implementation of the START 2025 program, reducing the length of the plant outages, and the great management of the stress corrosion. Hydraulic output has been exceptional, with an increase by more than 12 terawatt-hours year- on- year. We connected Flamanville 3 to the grid end of December. Thanks to 490 terawatt-hours of low carbon electricity output, EDF reached its lowest ever carbon intensity at 30 grams of CO2 per kWh. Change in EBITDA was mostly due to the increase in generation offset by the negative price effect. Net investment reached 22.4 billion euros, 3.3 billion euros more than in 2023, due notably to nuclear projects, including 2.3, and network development and reinforcement. In 2024, we managed the debt to increase its maturity to 13 years at end 2024 versus 11 years at end 2023. Controlling the level of the debt is a key target. We are rolling our ambition of a net financial debt to EBITDA ratio of less than 2.5 times and an adjusted economic debt to adjusted EBITDA ratio of less than 4x to end 2027. We are indeed very confident in the strength of the group to have a key role in the energy transition, and the Ambition 2035 strategic plan for the company's development, performance, and transformation will help EDF build the electricity system of the future. The floor is now yours, and we are all very happy to answer your questions. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one at this time. The first question is from Michael Charlton of Banco Santander. Please go ahead. Yeah, good afternoon. Thanks very much for taking my call, Mr. Girre. I've got a couple of questions. Has any decision been taken about the replacement for the ARENH mechanism? And have any exceptional taxes been imposed on EDF? That's sort of in the latest budget. That's my first question. And the other one is that there seem to be reports about a financing framework being completed for the construction of the new nuclear reactors. Can you give us any sense of how this might be structured? Thank you very much. Thank you. So as we get the ARENH mechanism, so as you know, this mechanism comes to an end at the end of this year, 2025. So we'll enter the new mechanism starting 1st of January 2026, on the basis of which there will be no more any ARENH. So EDF will be entitled to strike contracts with anybody, and we already started doing that. We've already signed 6,000 midterm contracts and nine letters of intent, including one firm contract as regards our industrial partnerships in order to deliver nuclear generation. As regards the price, so these contracts are negotiated, so it's not a regulated price at all, but it will be possible for the state to tax EDF if our nuclear revenues exceed a certain level. It has been set in the financial law that this level will be defined starting from the global cost of nuclear generation and adding different thresholds from EUR 5-EUR 25 per megawatt-hour for the first threshold, beyond which we'll be taxed at 50%, and beyond EUR 35 per megawatt-hour, beyond which we'll be taxed at 90%. As regards the price at which we intend to sell our electricity next year, of course, it's too early to tell. It will also depend on the market price, but definitely, this new framework gives, in fact, better visibility and alleviates the constraints set in the previous mechanisms since 15 years. As regards EPR2 financing, we are really working hard and very positively with the French State in order to finalize the scheme within which this very strategic industrial project will be financed for the years to come. It's too early to give any detail, but we can already say that we are considering, on the one hand, a pre-financing mechanism, and on the other hand, a contract for difference post COD. Many thanks. The next question is from Damien de Saint-Germain of Crédit Agricole. Please go ahead. Yes, good afternoon, Xavier. Good afternoon to your team, and congratulations for the very strong results. I would ask two follow-up questions on what has been asked and one additional one. First, on the CapEx and debt level for 2025, you did not provide guidance, but if you could guide us on what are the CapEx level net or gross you are expecting for 2025, and if I'm not factoring any increase in CapEx, but just considering the increase in taxes, exceptional dividends, and your guidance on EBITDA, which is around EUR 30 billion, I calculate your debt could reach around EUR 60 billion by year-end. Are you comfortable with that number? The second question is back on regulation and the post-ARENH era. As you said, we're going to split and profit-sharing above a certain threshold, which, as I understand, for the first year should be around EUR 78 per megawatt-hour. Costs and prices are currently at EUR 62 on the French market. Could you guide us on some kind of sensitivity on your EBITDA should actually poor prices in France remain at 62? Because I understand there is no flaw in the mechanism. And finally, again, back on the nuclear new build, just wondering whether in the framework you are planning to have the investments that are related to the nuclear new build sitting on your balance sheet, or actually you are targeting to have it aside from your balance sheet? Thank you. Thank you, Damien, for these questions. As regards to CapEx for 2025, we expect our CapEx to be around EUR 25 billion. So this is another increase compared with 2024. This is very consistent with the current strategy of the group, which is to develop new nuclear projects. So we have, of course, to finalize in 2020, and for the years to come, this will represent a significant amount, around EUR 6 billion for this year expected. We will also, of course, go on investing in the French nuclear project, and we will develop also significant CapExs in Grand Carénage on the existing fleet and on the networks. So around EUR 25 billion. As regards taxes, the financial law for 2025 has set some references, but there are still some rooms for adjustment by the regulatory power. As regards to taxes, first, there are some specific taxes on nuclear assets, Taxe INB, Installations Nucléaires de Base. This tax is supposed to be increased by a bit more than EUR 300 million this year, and potentially, because the range has been set by the law, it could be increased to EUR 895 million compared with last year. Last year, it was a bit more than EUR 700 million. It was 738 million euros. So, first point as regards taxes. Second point, the tax regime of Cigéo will be finalized this year. It's possible, not sure, but it's possible that it implies additional taxes. Third, it's possible so that there will be some additional taxes on water in order to finance REGAF de France and Agence de l'eau. And then, of course, we are, of course, in the global frame of the tax regime in France. We will have also to pay additional tax on the income tax because the rate will be for a short period of time for 2024 and 2025, increased to 36.13% versus 25.82% in the previous years. This may represent a bit more than EUR 400 million cash out for us in 2025. There is another tax, which is a cotisation sur la valeur ajoutée des entreprises, CVAE, which was supposed to reach an end, and the end of this tax has been postponed to 2030. This may have an impact more or less for this year, 2025, of EUR 30 million for EBITDA. Sorry, for EDF. I hope this helps you in order to finalize your math for our 2025 financial. When you refer to your estimate of potential net financial debt of EUR 60 billion, once more, we do not give any guidance about that, but nevertheless, we do not intend at all to reach this amount in 2025. We expect to be significantly, very significantly lower than that. Then, as regards post-ARENH mechanism, so I mean, you're right. I mean, it's a type of merchant mechanism. So, I mean, if prices are in the very long term, very low, of course, this may have a negative impact, obviously. But on the other hand, if prices go higher, this also gives room for development. And the most important point is that it creates a space for contractual negotiations between suppliers and consumers. So for 2026, I will not give, of course, the price at which we expect to sell our generated electricity because it is a sensitive piece of information. But nevertheless, I mean, as you know, we hedge and we sell progressively more or less two years ahead. And so we already have quite a significant visibility for '26. Then, as regards the French nuclear project, this will be on our balance sheet. But I mean, what's very important here is the fact that the French State considers contributing to pre-financing this massive project, which is, of course, very important in order to sustain the liquidity of EDF. So, I mean, discussions are going on positively. And, of course, when times come, we will be more accurate on this matter. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Ivan Pavlovic of Natixis. Please go ahead. Yes, good afternoon, and thank you very much for taking my question. Congratulations on this very solid set of results. I have two questions, please. The first one, going back to the state of the discussions with the government on new nuclear build financing, I was just wondering whether you could shed some light on some recent press reports stating that EDF could be exempted from the payment of interest during construction, so during the construction phase of the new reactors. Is it something that you think could substantially de-risk the structuring of these new nuclear projects and something that could be well taken by S&P in a potential rating upgrade? So that's my first question. My second question, going back to your answer and your statement that net debt at year-end 2025 should be significantly lower than EUR 60 billion, is there any case for decreasing your hybrid stock, which is currently around EUR 10 billion, with some substantial residual issuance capacity? Thank you very much. Thank you, Ivan. Once more, I will not be very specific about the financing of this future French nuclear fleet. We are working upon that. We are discussing with the French State upon that, and discussions are going ahead positively. So I will not be too specific. Maybe I can just remind you the different goals we are looking for. What's important is to set a financing scheme which contributes to the competitiveness of the electricity generated, which contributes also to sustain EDF liquidity and balance sheet, which has also, of course, to be a project which delivers reasonable rentability, of course, a reasonable return. Of course, we take into consideration the analysis by the rating agencies because it's absolutely key for us to maintain our rating. We consider also the potential analysis that could make the European Commission, which we have to approve the scheme once finalized. These goals are being considered in order to find the best way of financing these reactors. As regards the hybrids, the hybrids today, we have, as you know, a portfolio of more or less EUR 10 billion hybrids. We consider that this is consistent in our balance sheet structure and consistent also at the period of time when we have to invest really massively in the years to come, and so we need, in such a period, long-term stable resources. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from James Sparrow of BNP Paribas. Please go ahead. Yes, good afternoon, everyone, and thanks for the call. A couple of questions. First of all, I just wondered if you could sort of clarify the position around the sort of EUR 2 billion dividend. Is that confirmed when it will be paid, and is there kind of any dividend policy going forward, or will that really just be constrained by the balance sheet and the profitability? And then just I wanted to try and get a bit of clarification on the ARENH situation. I just wanted to confirm, is that all agreed and fully signed off by the government? And then really the third and last question was just a bit of a broader one, just around relations with the government. Obviously, the political situation in France is a little bit uncertain. Does that have any practical impact on your day-to-day discussions with the ministry, or is that really just carry on business as usual? Thank you. Thank you, James. Yes, as regards to these EUR 2 billion dividends, I mean, of course, it will be based on our 2024 results, which are very strong results. So it's very consistent to pay such a dividend, which is expected to be paid, of course, after the General Assembly, so somewhere in some months. Second, as regards the ARENH, yeah, now, I mean, the framework is set. I mean, the financial law has said so the rules that I've just described. So then it will have to be implemented. And so on this basis, it gives visibility to operate after the 1st of January 2026. Of course, it will depend then on the assessment by the CRE of the global cost of nuclear generation. And also, it will depend on the margin, the threshold that will be considered beyond these nuclear costs because, as I described, the law gives quite a range. For example, for the first threshold, it's cost plus EUR 5-EUR 25 per MWh. So there are still, of course, some rooms for adjustment, for appreciation, but the global framework is set. Then your question, I mean, about the political situation, I mean, I don't have anything to comment upon that. What I can tell you is that we have discussions, of course, on all these matters with the government, and that we are, and this is going on as it has to be. So no specific comment about that. The next question is from Alessandra Mac Donald of BlackRock. Please go ahead. Hi, good morning. Thank you for taking my question. So I've had two, and they're mainly on the hedging policy. So the first one is, you can just remind us, generally speaking, what's your hedging policy like? How much volume do you hedge ahead, one and two or three years? And then the second one is on the contracted volumes that you were talking about this morning. Can you just give us a bit more visibility on? I appreciate you don't share the price, but really just the volumes that we're talking about here. That would be great. Thank you so much. Thank you, Alessandra. So as regards our hedging policy, I mean, our goal is to be almost hedged before starting a year. And we start hedging more or less two years ahead of a year, a bit before a year. So which means that today, for example, we are already very significantly hedged for 2026, of course. So we have a very strong visibility for 2026. Of course, if our generation is consistent with our goal because we base, of course, our hedging on our generation targets. And I remind you that we have upgraded this nuclear generation goal to a range of 350-370 terawatt hours for 2025, 2026, and 2027, which has been enabled by the great job that has been done over the last years. Secondly, as regards the contracted volumes, I mean, the prices depend, of course, on the customers. To be more specific, so we've signed more or less 6,000 contracts. By heart, or roughly speaking, this represents more or less 25 TWh or 28 TW h for 2028, and 11 to 12 for 2029. By heart, or roughly speaking, 22 for 2028, sorry, 22 for 2028, and 12 for 2029. The volume contracted in this contract is 22 TW h for 2028 and 12 TW h for 2029. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from Andrew Moulder of CreditSights. Please go ahead. Yes, hi Xavier. Thank you for taking my question. I'm sorry to just come back on it, but I missed the thresholds you were talking about on the ARENH tariff or the post-ARENH tariff. You said that the state can tax EDF if prices are above a certain level. Could you just give me those numbers again? That's the first question, please. Also, I just wondered, going forward, obviously, EBITDA has been very good over the last couple of years, but do you have some kind of normalized figure that we could consider for, say, beyond 2025? I mean, it looks to me like it's probably going to be EUR 20-25 billion, but with EUR 25 billion plus of CapEx, we're looking at that increasing significantly, I would have thought, every year past 2025. So perhaps if you could just give me some indication of what sort of EBITDA numbers you're expecting going forward, that would be useful. And finally, I just wanted to check on something that I saw in your financials today. I was just looking through them, and in there, there's a cost of capital, Hinkley Point, a return on WACC of 6.8%. That seemed very high to me because you were talking about 7.1%, I think, in 2021. And now, in 2024, you obviously increased the investments, and you also pushed out the commissioning date. So I'm just wondering, what is that 6.8% that I'm seeing in your financial report today? Is that the return you're expecting to earn, or just the cost of capital? And actually, your return is way below that cost of capital. Those are my questions. Thank you. Thank you, Andrew, for your question. As regards the ARENH, what's been said in the financial law for 2025 is that the principle is that the cost of the nuclear generation will be defined by the CRE, and then formalized by the CRE. Potentially, there will be a tax if our revenues exceed the first threshold between EUR 5 and EUR 25 per MWh beyond this cost. Of course, this gives once more, as I highlighted, this gives some room for maneuver between 5 and 25. If this threshold is met, the potential windfall tax will be at the rate of 50%. The second threshold is beyond EUR 35 per MWh on top of the nuclear cost. I hope this helps. Sorry, can I just ask one thing there? So what happens between 2025 and 2035 then? Is that 75% tax or something? You remain at 50%. Oh, okay. Okay. And would it be fair to assume that the cost would be broadly in line with the ARENH tariff? No. No, no. I mean. Why not? Because the ARENH is totally disconnected from the cost. Yes, but I thought that the ARENH tariff was supposed to represent the cost of nuclear generation. So why wouldn't it be about the same level? First, it was set, I mean, in 2010, so 15 years ago. Second, it was not indexed. And third, as we highlighted on many occasions, it's significantly below the global cost of nuclear generation. So it will be, of course, higher than the current level of the ARENH. Okay. Okay. As regards the EBITDA, I will not give any guidance about our EBITDA for the next years. What I think is important for you to have in mind is first that we intend to go on developing very strong industrial performance. That's why we have reaffirmed and upgraded our nuclear guidance for 2025, 2026, and 2027, for example. That's why also we are absolutely committed in maintaining and increasing our competencies in order to be also top class as regards hydro generation, as regards all our businesses. So we are committed to improve our operational performance and to reduce our costs and to increase our agility. But in the same time, we will be facing decreasing prices. And I mean, in 2024, we saw the first effect of these decreasing prices, but we still benefit also from the very high prices of the past years. In 2025, we will also see more significantly the impact of this negative trend compared with 2024. And in 2026, we expect to be more or less as regards the prices that we can get, more or less in the same order of magnitude, maybe a bit higher thanks to the end of the ARENH mechanism. But I will not be more accurate because we do not want to give EBITDA guidance. What we've given is net financial debt and an adjusted debt to EBITDA guidance for 2027, which is very important because this is, for us, the key point to maintain our sustainability. And then. Sorry, could I just ask you one question? Sorry, I just don't want to be cut off before I get into something. You've mentioned a couple of times about the upgrade to nuclear output. But when I look at the numbers that you've upgraded, it kind of seems to me like the only reason there's an upgrade is because you're now incorporating the Flamanville terawatt hours. Is that true? And I mean, how much of the upgrade really comes from the existing fleet as opposed to the new generation that you're going to be getting from Flamanville? I mean, Flamanville is really still in its early days, so it's getting, I mean, it comes progressively to the grid, so we've reached already the 25% threshold. It has been approved by the ASN. It will be nominal somewhere later in 2025, so it will not deliver nominal generation in 2025, for example, and then when we'll have generated more or less 14 terawatt hours, we will have to stop it for the first visit complete, as we say in French, so I mean, for the first comprehensive checkup, which will last quite a while and which will occur mostly in 2026, so this is why, I mean, for this year's 2025, 2026, when we say our goal is a range between 350 to 370, including Flamanville, in fact, Flamanville will not be a massive add-on to our current fleet during this specific period of time. That's why this is the. All right. Yeah, that's why we. No, that makes sense, and on the cost of capital, yes. Sorry? Sorry, I just said that. And then on the cost of capital, so HPC. Absolutely. So as regards to our cost of capital, our WACC is considered 6.8% for the whole U.K. business. And of course, this takes into consideration for the contract for difference. And we do not consider that as being the IRR of HPC. So can I push you and ask you, I mean, I presume the IRR of HPC is below 6.8%? You're right. Okay. All right. Okay, that's good. I won't say any more. Thank you very much. Thank you very much, Andrew. Thank you. For any further or follow-up questions, please press star and one on your telephone. The next question is a follow-up from Alessandra Mac Donald of BlackRock. Please go ahead. Hi there. Sorry for the follow-up. I just wanted to clarify on the hedges. Can you just maybe give me a little bit more detail in terms of how much you hedge one year forward and two years forward? Is it more on the one year ahead or more two years ahead? Just to get an idea of which price we should be taking, that would be great. Thank you. As you know, we do not give accurate figures about that because it is very sensitive due to our size. But you can consider that we hedge more or less on a linear basis. So meaning you start two years ahead, and so after one year, you still have more or less 50% to be hedged. Thank you very much. For any further questions, please press star and one on your telephone. Mr. Girre, there are no more questions at this time. Back to you for any closing remarks you may have. Thank you very much. I want to thank you all for your presence, for your dedication to our company, for your questions today. I'm very happy with the whole team to have shared with you our very strong results for 2024 that are already delivered thanks to the strong operational and industrial performance of EDF in 2024. We are also committed to maintain a strong level of performance and to take appropriate steps in order to be able to finance sustainably our investments, even in the context of declining prices in this year. And this is clearly the message we've delivered via our extended guidance with these ratios, net financial debt and adjusted economic debt to EBITDA and adjusted EBITDA for 2027. So I thank you very much and see you in another occasion. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.