This is the conference operator. Welcome to the EDF Half Year 2026 Results Investor Call. Anyone who wishes to ask a question may press star and one on their touchtone telephone. At this time, I would like to turn the conference over to Mr. Claude Laruelle, Group CFO. Please go ahead, sir. Thank you very much. Good afternoon, everyone. I'm very pleased to welcome you to this call. Together with the IR team, we'll be happy to answer your questions. I will start with a few words on the financial results that we published this morning. As you have seen, H1 2026 was solid. EBITDA reached EUR 14.1 billion, and the operational performance was strong, with an increase by 8 TWh of the nuclear output in France. Notably, thanks to the availability of our reactors and well-managed scheduled outages. Cash flow generation amounted to EUR 1.1 billion, which allowed us to stabilize the net debt at EUR 51.5 billion. The net financial debt to EBITDA ratio was therefore at a very good level of 1.8x at the end of June. We also made significant progress this semester on three main topics. First, the hydroelectricity law that was passed at the French Parliament in June. It will allow us to resume investment to modernize and increase the hydropower plants and give us visibility for the next 70 years, 70 7-0. Second, the European Commission has started its formal approval process on the support package on the French state for the EPR II program. It started in April. It's going well. We expect a decision of the European Commission before year-end. Third, we signed an agreement for the sale of our renewable platform in North America at the end of June. It will represent $5.5 billion of debt reduction. The crisis in the Middle East encourages us to accelerate the electrification of users. We kept on deploying new offers to support our clients. We're investing also in that field around EUR 250 million. The heat waves remind us how important it is to adapt our generation assets and our distribution network to climate change. Our adaptation plan was announced for the generation for EUR 8.7 billion last February. On the distribution network side, the adaptation plan is EUR 15 billion. As for 2026, we expect EBITDA to decrease by around 10% compared to 2025 in a context of market price downturns and impact of the heat wave in France. The leverage ratio is a key target for us. We confirm our ambition of a net financial debt to EBITDA ratio of less than 2.5x and adjusted economic debt to adjusted EBITDA ratio of less than four times at the end of 2027. When we did the reforecast of the budget, and we discussed with the different firms, we have a vision of much better net financial debt at the end of the year than what we expected when we started the budget process. Thank you very much, and the floor is now yours, and we are happy to answer all 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 on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Andrew Moulder, Credit Suisse. Yes. Hi, Claude. Perhaps I can come back on the very last comment you made. You just said about net debt being lower than you had expected in the original planning process. Can you give us some indication of where you expect net debt to be at the end of the year? In that expectation, does that include the $5.5 billion that you're expecting to receive from the U.S. renewables? That's my first question. Second question, I just wanted to ask about kind of the heat wave, really, and the adaptation. Obviously, you have a lot of reactors which are not on the coast, but which are on the rivers. Is there any need there for additional cooling in order to make sure that if we have more of these heat waves as the climate changes, that you will need to keep the reactors operating for more of the time rather than the restrictions that we're seeing at the moment? My final question, I just wanted to ask on Nuward. There was quite a lot of questions on that earlier on the press call. I don't know if you can give any indication, but I wonder, what sort of valuation are you expecting for that company? Realistically, are we talking about EUR 1 billion? Are we talking about EUR 5 billion? Just some sort of feeling there. I just wonder, do you believe it's really sensible to progress that particular company? Because obviously you're quite a bit behind some of your competitors like Rolls-Royce and GE. I believe ČEZ and Vattenfall have already signed up with Rolls-Royce. Do you really think there's a lot of potential for Nuward to be a real competitor to those other companies that are already in the market? Finally, on Nuward, what sort of partners would you actually be expecting to get in there? Would you be looking for industrial companies, or would you perhaps be looking for AI and data center-related companies who might be looking to install some kind of generation facility behind the meter? Those are my three questions, although I appreciate the last one was quite a long one. Thanks, Claude. Yeah. Okay. Thank you. Thank you very much, Andrew. In terms of net debt, in fact, we have a lot of moving parts in the net debt, it's difficult to give you a precise number. We expected the net debt to grow, I would say, somewhat in 2026. What we have accomplished so far, we are in the better position to reduce this level of growth. One of the key items to give you a precise number would be the margin calls on our EDF Trading desk. It can vary a lot depending on the market prices. This is what we have seen since the start of the year. We have seen better power prices, especially in France. Of course, that has some impact on the margin calls. Difficult to give you a complete detailed view. When we did the reforecast, we expect net debt to be better than the plan. What I did not say, what we have delivered so far, EUR 14.1 billion of EBITDA, is really according to plan. We are slightly better on how we envision the debt at the end of the first semester. In terms of heat wave, yes, it's part of what we call AdapEx. Adaptation CapEx. I think that's an acronym that has been invented by our Impact team. Thank you for Impact. Impact is important at EDF, because we produce a very low carbon electricity. To answer your question is, yes, we can do much more on the cooling system. We can install cooling systems in order to discharge lower temperature water into those rivers. In some cases, it's possible. In some other cases, we cannot take if it's above a certain temperature. Depending on the situation and the locations, we will be able to have more if we can do more. Sometimes it's a matter of flow. If there is not enough flow, we cannot produce. Sometimes if it's temperature, for example, Golfech, we can do the same system as we implemented in Civaux, in order to be able to produce more when there is a heat wave. To give you another sense of what we are doing, it's already in the design of Bugey EPR2. In Bugey, we will have two new EPRs. We have designed a system with a cooling system for the discharge to the Rhone River. The last one on Nuward. We don't have a precise valuation yet. What we can say, we have a lot of interest and letter of intent from different partners. I would say that for the start, it's mostly industrial partners. They like the project, and some of them they know quite well the nuclear industry. What they like in Nuward, it's a proven technology because it's a technology that we are operating for the last 50 years. It's PWR. PWR is not a new technology that you have to reinvent, and we have a long track record on PWR. Second, when you look at the supply chain, it's also proven supply chain. Why I say proven supply chain, because you will find Framatome, Arabelle and existing suppliers from the nuclear fleet. Third, I would say that in terms of fuel, it will be also supplied by Framatome. You may have seen a lot of different SMR, but they are still looking for fuel. It's not easy to find fuel in this industry. When they look at the track record of EDF in terms of operator, the fuel and the supply chain, it's very reassuring, not only for investors but also for clients. We have already some clients very interested by Nuward. Now we are preparing a package in order to attract investors. As I told you, we have some interest from investors to be part of this adventure. I've spent one day with the Nuward team, and what they did, they want to build a European standard. Not only a French standard, but European standard. They have worked with the different nuclear regulator across Europe in order to design something that will fit most of the European nuclear regulators. On top of that, it's very modular. The idea is not to do a built-in, but to do really a modules by modules and to assemble modules on-site. It's a different kind of, I would say, process in order to build a nuclear reactor. Okay. Can I sneak in one more question, which I just wanted to ask? Obviously, the ARENH tariff ended at the end of 2025. Can you perhaps give us a figure or some sort of feel for how much you benefited from the ending of the ARENH tariff in 2025, from what we're seeing in 2026? If you look at it really depends on the market price. For 2026 and the market price that we have hedged, it is around EUR 5 billion. Right. Okay? EUR 5 billion extra benefit from the ending of the ARENH tariff. Yes, that's a. Yeah. Rough estimate. Great. That's just for the first half. It's the difference between the market price for 2026 and the EUR 42. Right. You multiply by the amount, and you should find roughly the figure. Good. Thanks very much, Claude. 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 Michael McCormack, BlackRock. Hi. Yeah. Thank you for taking my questions. I have a couple. Firstly, could you please clarify what you mean by the target generation potential of over 400 TWh? Is that EDF's long-term generation target? If so, over what timeframe do you expect to achieve it? Does that figure already take modulation into account, or would annual modulation around 15-20 TWh need to be deducted, implying a long-term production target closer to 380 TWh? That would be question one. Based on a previously guided CapEx of EUR 84 billion for period 2026-2028, can you confirm if the EUR 4 billion hydroelectric CapEx is included completely or partially, and over which period will that EUR 4 billion be spent? Thirdly, what EBITDA should we deconsolidate from the North American business from 2027, together with the $5.5 billion debt deconsolidation? If I could perhaps sneak in one more, what are your expectations for the long-term level of modulation required in France? Is a 15-20 TWh assumption reasonable? Thank you. Thank you. Thank you for your question. You will look at EBITDA. You will answer EBITDA in the U.S. You can find the precise number. I will start by the 400 TWh target for the nuclear output. To answer your question very briefly, it is before modulation. What we ask the nuclear fleet to do is to be available, and when there is demand, to be able to produce. As you have seen, modulation can vary. If there is some need on the market, they have to be able to produce. We are pushing, and when you look at the staff program that has been implemented by the nuclear fleet, it is quite significant because we are able to produce more and to be more, I would say, more available to produce. What we have seen during the heat wave, we have seen more demand, not only in France, but also more demand in the different countries of Europe. Export increased because we were available. The 400 TWh target is for 2026. Modulation, you have seen, has been 13 TWh. We had more demand, and also we started what we call here at EDF, Smart OA for Obligation d'achat. In order to have not only the nuclear fleet modulating, but also the renewable, the largest renewable parks were modulating as well. Everyone is taking its share in the modulation now in France. Gradually, we are increasing the renewable fleet that will be able to modulate. Before it was above 1 MW, and now it is below. We are increasing. It was below. No, sorry. Before it was above 10 MW, and now it is above 1 MW. We are putting a system in place in order to have modulation on the renewable fleet. In terms of U.S., EBITDA for the U.S., do you have the answer to the question? We are. For the EBITDA in the U.S., for the renewable, around 6 GW accounts for more or less one-third of the renewable capacity. We are not providing exactly the amount of EBITDA coming from the renewable there. If you look at the full year, we were a bit below EUR 1 billion. If you say it is one third, obviously it depends if it is equity accounted or fully consolidated, but you see you are around a few hundred million euros. Yeah. I would say it will not be very significant at EDF level because a large portion of the different production units are deconsolidated in the U.S. Next question was on CapEx. If I understand correctly, the EUR 85 billion CapEx over the next. For hydro. For hydro. Is it included in the 10 years? In the 10 years. We will start building on increasing hydro power. It's a long shot. We have already started, as our chairman just highlighted this morning, that we have started on Vouglans to increase slightly and the hydro power production with pumping station. We have a new one in the pipe. That will be less than EUR 1 billion investment in Montézic. That we will start after we have fully obtained all the authorization with the state. It will be normally commissioned in 2035. It's a long-term process. It's only a portion of the hydro that you have in the next couple of years. We will increase gradually to do more pumping station and more production from hydro with the plan we have highlighted. In terms of long-term modulation, we don't have a precise figure today. What we have seen, in fact, there is a plan of the existing, all the project that has been approved and that should be connected to the grid in the next two years to increase renewable capacity. We don't know if that will be fully implemented or not because we may have a new government. We have a visibility of increasing this year. This year, renewable should increase by 6 GW. That should increase modulation. As I said, on the other hand, we modulate now the new renewables. In between what we see, we shouldn't have a big increase of modulation in the next couple of years, but we don't have a long-term target. It's difficult to predict. What we've seen this year is very significant effect on the modulation of, as I said, Smart OA. What we got was also a peak demand, more demand, thanks to the heat waves and, of course, air conditioning in Europe. Okay. Thank you. Sorry, just to clarify, that EUR 4 billion of hydro CapEx, that is included in the EUR 84 billion, is that correct? Sorry, if I may, in the three years to come, you have a part of the EUR 4.5 billion. A small part. These one are for the 10 coming years. It's a very small part that is included in this target of CapEx for the three coming years. It's just a start. If you have preparation works in Montézic, and you have the full delivery of Vouglans, it's really a small portion of this number. Okay? Okay. Thank you. Okay. Just a small portion of it. The next question is from Ivan Pavlovic at Natixis. Yes. Good afternoon. Thanks for taking my question. I just wanted to go back to the EBITDA guidance adjustment. In your press release, you mentioned that the environment was notably marked by lower market prices and heat waves. I just wanted to understand in detail what actually led you to adjust your EBITDA guidance from the previous one, which was a moderate retreat from 2025 levels. Just to understand better what is really at stake, keeping in mind that you're maintaining your nuclear output target for the current year. Thank you very much. First of all, it is just to be cautious. As a CFO, I'm cautious. I'm not the only one around this table. What we have said during the call this morning is a precision on the guidance. It's also that we have six months already behind us, so we have a better visibility on what we have achieved and what we have to achieve. It's to be a little bit more precise for you, first. What we may see in August and what we have seen since the beginning of July is a little bit more restriction on the nuclear fleet. It's also a little bit of caution and a precision on the forecast. It's not a guidance per se, it's the forecast. Thank you very much. Thank you. As a reminder, if you wish to register for a question, please press star one on your telephone. For any further questions, please press star one on your telephone. Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks. Maybe we will wait a couple of, maybe one minute if there is one more question. One more question, sorry. For any further questions, please press star and one on your telephone. If we don't have any other. Oh, sorry. We do have a question f rom Vivi Touba-Frament, BNP Paribas. Okay. Yes. Hello, can you hear me? Yes, we can hear you. Okay. Hi. Thank you very much. Just one question, please, and correct me if I'm wrong. In the slides, you gave the net financial debt to EBITDA. There is no economic net debt description or ratio. Is it something that you have removed, or do you plan to communicate on that in the future? If you want to answer, Flo, on this. Yes. Hi, Vivi. In H1, we have a target on this net adjusted net EBITDA that is more or less four times. It is still our target up to 2027. At the end of June, we in general do not communicate on where we are, but it's only something that we communicate annually. Okay. Okay. Very clear. Thank you very much. Thank you, Vivi. Once again, if you wish to register for a question, please press star and one on your telephone. The next question is a follow-up from Andrew Moulder, Credit Suisse. Yes. Hi, sorry. Thanks for taking another question from me. I just really wanted to clarify some of the sort of conditions around the fires that we've seen in both the U.K. and in France. One of the things that was mentioned on the call earlier was sort of reinforcing the Enedis network. I just wonder how much of the Enedis network is actually underground. Is there a danger that a lot of the network could potentially be damaged by the fires that we've seen in France, which could entail a lot more costs for you in sort of at the end of the year or perhaps for 2027? I also just wanted to ask, on the U.K. news, they were talking about, I believe, fires in Suffolk, I think near Sizewell. Is that still an issue or is that something that is now under control? Thank you. In terms of Enedis network, if you look at where we had a wildfire, it's particularly in forested areas. When it's most of the lines, a very large majority of the lines in those areas are, of course, not underground, but above ground lines. What they intend to do to be easy to manage and to operate, it's mostly in the fields. I would say it's a priority for Enedis to keep those lines in the open field because it's easy to access and easy to fix when you have an issue on the lines. A very small fraction of the Enedis network is underground. Their aim is to do underground with the different local authorities, but it's mostly when they are in, I would say, local communities. Can I just follow up on that one? If the lines are overground and they're damaged by the fire, can you recover those sort of storm cost damages through the tariffs in the following year? Or is that a cost that EDF has to pay? That happened, for example, I think that was last year in the Pyrénées-Orientales, southern France, when a large area was damaged, and they had to rebuild the network. That will be part of the TURPE, of the regulated tariff. Okay. All the damages by, I would say, act of God, if I may say so, is recovered by the TURPE, the regulated tariff. Okay? Okay. In terms of fire near Sizewell, I don't have any precise information. To me, it's not a threat to the nuclear power plant. We have seen in France, it's a very large site. It's all in concrete. We don't expect any impact on the nuclear output in Sizewell from this fire. Okay. I think the press in the U.K. was reporting that the level of smoke in the area was actually going into the ventilation systems and making it unable for the workers at the plant to remain at their post, and therefore they might have to close down the nuclear output from Sizewell because the workers couldn't physically occupy the buildings. I just wondered if there was an update on that. Okay. No, I will check that point, and we can come back to you as soon as possible. Oh, great. Thank you. Okay. Gentlemen, there are no more questions registered at this time. Excuse me. We do have a question. I'm sorry. We do have a question from Michael McCormack, BlackRock. Please go ahead. Hi. Sorry, just one more from me. I'm conscious you've already touched on this a bit, but if you could perhaps just comment a bit more broadly on your SMR strategy, how that sits within the context of the already large CapEx program. Thank you. Yes. The strategy on the SMR is to find partners and to have the partners, the state and EDF, funding the program. We will fund only a portion of the program, the aim is to be able to deconsolidate this program. If we deconsolidate this program, we won't have, especially when we have new facilities. Any new facility, the aim is to deconsolidate the facility with financial partner and could be also the client as a partner. In order to keep the I told you it's European, we don't expect a lot in France, maybe a couple of them, but most of them, they are designed for, I would say, foreign countries. We want to keep our balance sheet as a priority for the investment in France to finish and to, I would say, to make progress on EPR2 program. We can do off balance sheet for the new facilities. That's the goal. Okay. Thank you. You're welcome. The next question is from Prithvi Vetsa, Bank of America. Yes. Can you hear me? Yes. Yes. Yes. Thank you for taking my question. I'm mainly wondering about the state-backed loans that EDF could get from the French government with respect to the construction of new projects, new nuclear plants. When can we get an update on this? The second part is, how is your conversation with the rating agencies? How are agencies looking about or thinking about the large CapEx to measure that you will have in two to three years' time? To answer your last question on agencies and rating agencies, we have a, I would say, a dialogue with them every other month, almost to give them an update, especially on progress we're making on EPR2, for example. It's because it's a critical program, and they understand that, because the program is backed by 60% of state-aided loan, it's critical for the profitability of the program and for the sustainability of the EDF balance sheet. It has been designed to keep the balance sheet of EDF under control. When we have a dialogue with Moody's, Fitch, or Standard & Poor's, they fully understand the way it's working. You know that we will start reimbursing the loan only when we will produce electricity. We will pay the interest when we have the startup of the plant, and we will start reimbursing the principal of the loan four years later. That gives us, I would say, a lot of accumulated cash flow before reimbursing the loan. That has been designed this way in order to keep, I would say, a strong financial capacity at EDF level, and it's well understood by our three rating agencies. In terms of update on the loan, it will be provided by the Caisse des Dépôts because it's coming from the savings plan of the French people. We had already a first term sheet agreed with the Caisse des Dépôts, now we are working on the long form. It's many agreements because there is an agreement with the state, an agreement with the Caisse des Dépôts between EDF. We are progressing, making good progress on writing all those long forms, but the principles are very well established. There is no more, I would say, negotiation ongoing. Okay. Thank you. That's very helpful. As a reminder, if you wish to register for a question, please press star and one on your telephone. If there is no further question, maybe I will finish by just a short closing remark. We are seeing the strong delivery of H1 with a good power production in France. That gives us a lot of confidence to finish the year very well. We are embarked, as I said, to be aligned with our budget. We are a little bit cautious, but we expect to strongly deliver 2026, and we continue to hedge 2027 with better prices. That should also help us for the next year. Thank you very much for being with us this afternoon, and we'll reconvene at the start of 2027 with a full set of 2026 numbers. Thank you very much. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.