Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ERG Second Quarter and First Half 2021 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo Merli, CEO of ERG. Please go ahead, sir. Good afternoon, everybody, and welcome to ERG's webcast. Here with me is Michele, our CFO. I describe here, I'm at page four, the performance of the group in a nutshell, focusing on the first half rather than the second quarter, which I think gives you a more comprehensive view of how things are going this year. I'll let Michele take you through the numbers in more detail for both the quarter and first half. First of all, let me start by expressing my satisfaction with this set of results, which are the highest ever recorded in a semester, at least since we became an independent power producer. EBITDA in first half was at EUR 281 million, up 7% year-on-year. Just a quick comment, segment by segment. Wind closed with an EBITDA of EUR 157 million, 5% down year-on-year, mainly as a result of much weaker productions abroad. Do not forget, last year was an extraordinary positive year. While we recorded better results in Italy, mainly driven by a much stronger price scenario, both for merchant and incentive price. Production, where in Italy is likely up year-on-year, but not very significantly. Solar did its job with EUR 34 million of EBITDA, basically in line year-on-year and very stable over time. Hydro was the real outperformer of the period, with an EBITDA of EUR 84 million, more than double compared to the same period last year. That can simply be explained by heavy rains in 2021 against a dry year in 2020. As simple as that. As far as our CCGT is concerned, here we had the opposite situation with EBITDA of EUR 15 million, which is half the result recorded in first half of 2020. This drop is mainly due to the end of the CAR period, which means no white certificates for 2021. This effect explains, actually, EUR 12 million out of EUR 15 million gap year on year. I shall also remind you that EBITDA of first half 2020 included a couple of positive one-off items, such as an insurance payout and a positive settlement related to captive contracts, which led to a very tough comparison. Let me say, in the end, we knew that 2021 was a year in the middle, between the end of last year of white certificates and we think the recovery of white certificates as of 2022. Let me remind you that there are important refurbishment investments undergoing, which are expected to bring the plant back to its normal profitability as of next year. Net profit. Net profit in first half 2021 is EUR 100 million. A quite big number, up 42% year-on-year, which is, I think, a really impressive performance, and is surely thanks to the EBITDA, but also the consequence on top of the operative results of all the work done over the last few years to minimize our debt cost and non-cash cost. Respectively, thanks to the huge liability programs we launched over the last few years, as well as the lifetime extension, which allow us to reduce the non-cash cost amount. In the end, let me comment on the net financial position, which was at the end of June, EUR 1 billion and EUR 692 million, which mainly reflects the dividend paid, the huge investments for development in the semester with CapEx in excess of EUR 300 million, which include the M&A in France and Sweden on top of the organic investments. We return to invest quite significantly. Net financial position is also, let me say, inflated by the negative mark to market of derivatives on energy prices. This effect, let me say, will have an opposite effect, going forward, when hedging will enter in delivery, given the settlement against the merchant prices. It's like an anticipation of cash flow. Now, I'm moving to page number five, commenting on recent developments. I'd like to give you sort of an update on the execution of the business plan, which was presented just a couple of months ago, or a little bit more than that. Although we presented it only fairly recently, we have made some important steps forward, and I say in the right direction. As such, I feel even more confident today about the solidity of the plan. Let me summarize these achievements. We completed, just a couple of weeks after the plan presentation, the acquisition of a portfolio of wind and solar assets, with a total installed capacity of 80 MW in France, 58 MW wind and 22 MW solar. We became the fifth wind onshore player in the country. The consideration paid for the acquisition, EUR 147 million, is already reflected in the net financial position at the end of the period, while its economic consolidation started as of July 1st. You will see the benefit economically in the second half of the year. There is some other very good news. We obtained the VIA, the environmental green light, for our proprietary greenfield wind projects of 47 MW located in Sicily, which you may consider an improvement on what we had in our business plan. We are now working to bring it forward to the next auctions. As far as repowering, we are moving forward as well. We took part in the auction for RES capacity held last June, with three projects for a total capacity of 143 MW, which means 77 on a differential basis. Results, I mean the outcome of the auction, are expected to be published by GSE at the end of September. Fingers crossed, we are optimistic about the outcome. In parallel, we are working on other projects of our pipeline. As far as construction, you know that we have roughly 400 MW under construction. All projects are moving forward as scheduled, and in particular, we are finalizing the construction of 77 MW, of which 70 MW in Northern Ireland, Craiggore and Evishagaran, and 7 MW in France, which is an extension of our already existing wind farm, Vallée de l'Aa, which we expect, I mean the 77 MW, to be up and running by the end of the year, which is in line with our main objective for 2021. Execution is well on track for the time being, and even, let me say, ahead of schedule. Now, over to Michele for his analysis of the first half and second quarter 2021 results. Thank you, Paolo. I'm on page seven. Power demand in Italy was up 14% year-on-year, mainly as a result of an easy comparison, as second quarter 2020 was negatively impacted by lockdown. You see here that the contribution to production from wind and hydro at national level were 0% and -6% year-on-year respectively. Looking at ERG, our wind production in Italy were down 2%, slightly worse than country average, while hydro was up 44%, as opposed to the negative trend at national level, due to its location in central Italy, which benefited from strong hydro volumes. Solar, almost flat year-on-year, in line with national level. As far as our CCGT plant is concerned, volumes were up 4% year-on-year, slightly worse than the national level. Electricity prices in Italy. In second quarter 2021, there was a strong rise in electricity prices, with the national price at EUR 75 MWh, strongly up year-on-year. The blended price from EUR 124- EUR 184 benefited from the rise of electricity prices, coupled with the rise of incentive. You know that incentive is calculated on the basis of last year's average national electricity price that recorded very low levels due to COVID-19 lockdown. Our CCGT clean spread was negative at -EUR 2 MWh, with rising gas and CO2 prices, only partially offset by a recovery of prices in CCGT. These numbers reflect the Sicilian premium versus the national price of EUR 6.4 versus EUR 2 last year. Abroad, you can see in the graph at the bottom right of the chart, the average reference selling price for our production country by country. Here, it's worth noting the generalized rising prices in the second quarter, in particular in countries where we have green certificate type mechanism, such as Romania and Poland. I'm on page eight now. Here, as usual, a picture of the main driver per business of the EBITDA evolutions in the first half of the year. As we have said before, wind in Italy was up EUR 8 million, due to mainly better electricity price at a higher value of incentives. Which, as you know, is inversely correlated with the last year very low electricity price. Wind abroad was down EUR 80 million, mainly due to a drop in production, -19%. That was exceptional in the first quarter 2020. Solar, almost in line year-on-year with slightly lower volumes, offset by better prices in the period. Hydro up EUR 43 million, thanks mainly to a strong rise in volume, +81%. Energy available in lakes is 124 GWh, +10 GWh versus the end of 2020, and even higher versus historical average due to the heavy rainfalls in the period. CCGT was down EUR 15 million, as already commented, due to mainly the white certificate phase out and the squeezing of spark spread in the period due to CO2 and gas price increases. Scenario effect for the CCGT, in particular, was mitigated by the hedging policy of the group. On page nine, I'm going to comment the wind results, focusing on the second quarter of the year. EBITDA in the second quarter was EUR 63 million, +11% year-on-year. EBITDA was up in Italy +10% and abroad +9%. Production were substantially in line year-on-year. As far as prices, in Italy, the average unitary revenues were EUR 129 MWh, higher than EUR 117 MWh. Abroad, it was EUR 90 on average, strongly up year-on-year. In the end, the rise here is correlated to a better scenario, both in Italy and abroad, coupled with a slight rise in production in France in the second quarter. No more to say here. Let's move on. On page 10, I'm going to speak about solar results. EBITDA was almost flat year-on-year at EUR 22 million for the following items: slightly lower production and higher unitary revenues at EUR 328 versus EUR 311 in the second quarter of 2020. Here again, as a result of the higher merchant price. Moving on, we are now at page 11. I'm going to comment the hydro results. EBITDA was EUR 30 million, 81% up year-on-year, mainly as a result of higher volumes, +44%, coupled with a better price scenario and a higher value of incentives. As such, unitary revenues were EUR 122 MWh, higher than EUR 115 MWh in the second quarter of 2020. The main takeaway here is still the same, strong hydro availability vis-à-vis a particularly dry season in the second quarter of 2020. Moving on. I'm now at page 12. I'm going to comment thermal results. EBITDA in the second quarter 2021 was EUR 9 million, down 37% year-on-year, which of course is a direct consequence of the end in 2020 of the first 10 years of validity of white certificates. Let me elaborate a bit more on this. There were three main effects. white certificate phase out that account roughly -EUR 6 million, a better performance in MSD, +EUR 5 million, and the comparison with the second quarter of 2020 benefit is affected negatively by EUR 5 million of a positive one-off recorded in the second quarter of 2020, related to the sale of steam to captive customers in the site. Now, I'm on page 13, and I'm commenting investments. Here is worth focusing on the first half of the year. We invested EUR 311 million, versus EUR 86 million over the same period last year. During the first half, CapEx are composed as follows: about EUR 188 million of M&A in wind and solar abroad. I am speaking for acquisition of a ready-to-build project in Sweden for EUR 41 million, and the recent acquisition of wind and solar installed capacity in France for EUR 147 million. I remind that the economic effect of this acquisition will start as second half of the year. We expect to perform a full year contribution to the EBITDA in the region of EUR 11 million. About EUR 109 million is related to organic CapEx in wind, referred to construction activities, mainly U.K., then France, Poland and Sweden. About EUR 4 million is related to the refurbishment of module one of the CCGT plant in order to renew its eligibility for another 10-year period of white certificate as of 2022. About EUR 10 million are maintenance CapEx spread across all our technologies. Moving to page 15. Let's now move on to finance, commenting on profit and loss on a recurring basis. I've already commented on EBITDA, so going down to the profit and loss and looking at the second quarter of the year in particular. We have lower depreciation, - EUR 8 million, that reflects the reduction in depreciation of some wind assets due to the end of amortization period, coupled with a review in depreciation plan of some intangible wind assets, and the reduction in depreciation in the consolidated accounts of the hydro assets due to an increase of the amortization period without any tax effect. Net financial expenses are at EUR 8 million versus EUR 12 million in the second quarter of 2020, thanks to a lower cost of gross debt, 1.7% versus 2.3%. Mainly following the issuance of our second green bond in September 2020, and all the liability management exercise done in past years. Taxes. Tax rate in the quarter was 23% against 12% in the second quarter of 2020. Taxation in the quarter benefited from ACE to the tune of EUR 4.5 million, but taxes were negatively impacted by a tough comparison to the tune of EUR 1.9 million related to a positive effect on IRAP in the second quarter of 2020. As a result of all of this, adjusted net profit amounted to EUR 35 million in the second quarter of 2021, versus EUR 16 million in the second quarter of 2020, and EUR 100 million for the first half of the year. Now on page 16, finally, let's take a look at the cash flow statement at the net financial position for the first half. Net financial debt closed at EUR 1,692 million, up by EUR 252 million from the end of 2020. Starting from the left, we have our EBITDA, EUR 281 million. The investment made over the period, EUR 311 million. Change in working capital, EUR 6 million. Financial charges, EUR 17 million. Dividends of EUR 113 million. Other item at - EUR 86 million. This item is negatively affected by over EUR 80 million of mark to market of hedging future derivatives. That reflects the strong increase of future commodity prices. Overall, the net financial position at the end of June accounts for a total amount of EUR 109 million, related to mark to market of derivatives. All these effects led to a net debt of EUR 1,692 million. I think I've touched on all the relevant items. Thank you for your attention. I will now hand over to Paolo for his final remarks. Thanks, Michele. Here is a comment on 2021 guidance. The good news here, things are going better than previously expected, we are in the position to revise upwards our guidance for the second time in a row. More specifically, EBITDA. We revise it upward by EUR 15 million, say midpoint, to take into account the better than expected results over the first half of the year, as well as the stronger price scenario we see now for the remaining months of the year. Coupled with the contribution, that's important, we expect from the newly acquired capacity in France, consolidated as of July 1st. All the benefits of this will be seen in the second half of the year. CapEx. Here again, we are revising it up by almost EUR 200 million to take into account the most recent M&A performed in late June for just under EUR 150 million. While the remainder, like almost EUR 50 million, is linked to an acceleration in the execution we are having on several organic projects, from repowering in Italy to some developments in Sweden, U.K., France and Poland. In the end, very positive news flow. net financial position, up by some EUR 160 million with respect to previous guidance, when looking at the midpoint, mainly as a consequence of the higher investments, partly mitigated by the higher cash flow. We are all very pleased with both results and execution. Thank you very much for listening, and we are now ready to take your questions. Excuse me. This is the Chorus Call 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. We kindly ask you to use handsets when asking questions. Anyone who has a question may press star and one at this time. The first question is from Sara Piccinini with Mediobanca. Please go ahead. Hi, good afternoon. Thanks for the presentation. I have three questions. The first question is on the guidance, if you can please provide a separate contribution from the higher prices for the upgrade in the guidance. How much is the higher prices contributing to the EUR 15 million midpoint guidance revised? Also if you can give an indication of the level of captured prices that you expect for the period 2022- 2023 for the part of the production that is exposed to power prices. That's the first question. The second question is on the CCGT. Can you remind us the contribution that you expect on the CCGT business from 2022 in terms of capacity market that should be the years 2022 and 2023, and from the white certificates and eventually from the MSD. Maybe can you provide a guidance of the normalized contribution in terms of EBITDA for this business? That would be helpful. The final question is on the repowering. Can you give an update in terms of authorizations in general, and if you have any color to provide more regarding the latest auction. Many thanks. Okay, Sara. Thank you for your questions. First of all, the guidance. Yes, we raised EUR 15 million, the EBITDA, let me say, more or less one third is due to the new installed capacity, has already entered on stream since 1st July, because that was the date we started consolidated the 80 MW we bought recently in France. Two-third mainly are due to the scenario, because, say, we have 70%, more or less, our production hedged in 2021, but there is still a part floating. The part floating over the second half is exposed in this sense in a positive way to this scenario, which is higher than the one predicted in the previous forecast. We maintained some buffers against the forwards because right now, the forwards, even for the second half of the year, are incredibly high. In our guidance as usual, we keep some conservative approach. That's the question about 2021. Yes, it's true. We have also some productions hedged for 2022 and 2023, which are basically in line with our hedging ratio. Maybe I can't remember exactly the figures, but say for 2022, we have more or less 70% already hedged at a price which is, let's say between EUR 50- EUR 60 per MWh. If you take the average, you can't be wrong, maybe even a little bit higher for 2023. No, say, I'm just looking at the numbers Emanuela is showing me. Okay, no, the price is just below EUR 60 for 2022 and 2023. Say, again, the scenario are proving to be much stronger than we expected before, even though today we just give you some indication for 2021. There is time to adjust estimates for 2022 and 2023, so we stick on the numbers we presented in our business plan for the time being. As far as the CCGT is concerned, especially regarding the white certificates and capacity market, you are right. The plant last year participated to the auction for capacity market and resulted winner. We had a part of the capacity in 2022 and 2023, which is subject to revenues from capacity markets, which are more or less in the region of EUR 10 million per year. You can take this as a proxy. On top of that, as you know, because it was already in our plan, we are going to finalize the investments for the module one for changing the steam system with a very new steam turbine in the next general shutdown, which is one of the longest in the history of the plant. We are going to start the works early September. They are going to last a couple of months, or maybe even more, 70 days, something like that. When you analyze the numbers of the CCGT in 2021, you should have very clearly in mind that this is a particular year. A year in the middle, between two periods of white certificates. Why not? You remember us before the stream of revenues coming from capacity market. I think should be seen 2021 for CCGT as the lowest year. The third question was about how it is going, if I understood well, our pipeline especially for powering. The answer is very good, in the sense that this was not a news. We had 143 MW already fully authorized, because they got the autorizzazione unica in April. As such, we arrange everything to make these assets participate the recent last auction, which was closed at the end of June. We analyzed the market, according to our understanding, we are very optimistic, because the capacity available in this auction was massive. If I remember well, 2,300 MW, because you know the mechanism of the decree, which tend to reallocate the undersubscribed portion of the previous auction to the next one. The outcome of the auction will be released by the GSE by the end of September. Let's wait, but finger crossed, we are very positive on the outcome. I have to underline, I don't know if it's worth, but you know that the repowering, and especially the projects which, like ours, didn't participate to the Spalma Incentivi program are, in my opinion, unfairly penalized in terms of tariffs, because according to the decree, our tariffs are subject to a further 5% discount compared to the base auction. Given the very high quality of the project, the economic return associated to these projects are very satisfactory anyway. We are trying to work with institution to explain them that there is no reason, there is no sense in maintaining this clause, because it's totally unfair, especially in a time where merchant prices are higher than the one awarded through auction. Sorry to have a little bit extended the question, but I took the chance to say this because I think it's very important. Apart from these 143 MW, which participated to the auction, we are moving forward even with other projects. I mentioned in this chart, and this should come as a surprise, we obtained the VIA green light for a greenfield project, which was not included in our pipeline when presented the plan, because that was a wind farm project we had been working, I don't know, for 10 years. I don't know, something like that. In the end, changing the layout, moving this and that, we obtained finally, the VIA, and we are now expecting for the resolution of the autorizzazione, the conferenza di servizi, so I mean the autorizzazione unica, and finger crossed, we expect to have the outcome of this in due time for, in case it's approved, to participate to the next auction in October. Also other projects for repowering are moving forward, are moving faster than previously expected. I think the new Ministry for energy transition is quite aware of the severe undersubscription, especially experienced in the last auction, they are trying to do their best to accelerate. So far, so good. I hope to have addressed your question. That's very clear. Many thanks, sorry, really just a clarification to be sure. Regarding the CCGT, the contribution from the energy efficiency certificates in 2022, can you give an indication of how much you expect? It's in the region of EUR 20 million. Perfect. Many thanks. Yeah. That's why I think, as of 2022, the profitability of the plan should normalize towards, say, the average of the last three years or something like that. Thanks a lot. You're welcome. The next question is from Roberto Letizia with Equita. Please go ahead. Thanks a lot for taking my questions. I would like to make a follow-up on Sara's question on the repowering by focusing very quickly, if you can, on the Sardinia Repowering project. I was wondering if the most recent regulatory indication are speeding up, in some way, the project you presented in the region. I would like you, if possible, to elaborate a little bit more on the very big improvement on the financial charges from the liability management program. What's the level of interest strategy should we expect on the full year, considering the advantages that you have obtained? I was wondering if there is space and conditions to do more, on additional, debt outstanding, and if we can assume that additional improvement will come in the next year. Would it be possible to have an update on the timing of the disposal process? Market's speculating you entering in exclusive talks with Enel. I was wondering if you can provide for a better timing on when you expect it to be closed, whether with Enel or with other player. You mentioned the Sicilian plant. I was asking myself, when do you expect is going to be the COD of that plant, considering you're going to participate, I guess. Maybe it's already 2022. Is that a possible correct assumption? If possible, a final general comment from you on the recent environment, taking into consideration both the Fit for 55 and Cingolani's indication, just repeated today from newspaper, about the new GSE decree on incentives, which will probably last five years, but today we saw also that will possibly include the agricultural unused lands, for solar assets that maybe can participate tenders, and if you feel this specific element is a positive for you. Thanks a lot. Okay. Thank you, Roberto, for your questions. I try to take note of them, and I follow the order. The first one was on repowering and especially on the impact that the Simplification Decree, just under approbation right now, is bringing to our pipeline. In reality, we are the least advantaged from this because we started up the process in due time, a few years ago. I think others can reap the benefits or most the benefits. Same, it's still positive. It's still positive for the country. It's still positive also for some of our projects, because according to the simplifications, for instance, in case of repowering. In our opinion, that's the lecture we gave to the decree. We still need the VIA green light, even though there are other operators that are a little bit more aggressive in interpreting, in reading this decree. We think we still need the VIA decree in order to go on. For sure, this simplification which allow you to construct the wind farm without having the autorizzazione unica in case the geometrical dimension of the plant is within certain thresholds compared to the existing one. That's positive, and that could accelerate some deployments of our projects as well. We are studying the application of this Simplification Decree to our projects in order to see if there is room to bring further megawatts in the next auction. It's a little bit too early to say, but we are working very much and very hard in order to see if we can bring another portfolio of assets to the next auction. Please consider that this would be totally ahead of the schedule of the plan, because even the participation of the 143 were already ahead of the timing we expected in the business plan. We are not changing the target, but I'm saying that those targets can be deployed maybe faster than expected. In terms of financial charges, yes, you are right. It's quite amazing to see that the financial charges are going down while the net financial position is a little bit higher on average than last year. This is the result of an amazing job done by our finance department. Beside me, there is Michele, who is the main actor of this. You know, we issued EUR 1.1 billion of green bonds over the last 24 months. The last one was in September, October last year. We are now reaping the benefits of all these moves. You ask also if there is still room to do something. Yes. I think you have read the press release today. The board has give us the power, say, to explore further opportunity from this point of view. For sure, yes, we have still a part of project financing, with a cost higher than the one expected to be raised in the debt capital market. Why not? Sorry for interrupting. Did you include these potential additional benefits already in the plan, or in case you get additional benefit, that will come on top? No, no. It's as we always did, we raise money in order to close down other loans, which are say, more expensive. The idea is always to associate to the issuance of a green bond, the closure or liability program call as you want, in order to take a settlement between the cost of the two instruments. It's not additional debt. I hope that was the question. No, I was asking actually if, did you imagined already those additional EMTN and issuance at the time of the plan, or in case the additional lower cost of debt will come on top of the strategic targets? In part, reduction can be used for reasons. First, to finance the capital that we have in our business plan, for sure. Second, we have the possibility to refinance some existing facility. Just to mention one, we have just acquired a project, a series of assets in France, and that has a project financing side. We can leverage on our financial capability to refinance this asset, this project facility with that capital market at better condition. That's just an example. We can use that capital market personal funding to fund our new asset in Sweden that is under construction right now. This is in line with our business plan, and it doesn't not mean any additional debt in comparison to what we have in our business plan, in line of principle. Okay. You ask for an update on the process. I can just say what is written in our press release. We are moving forward. We enter in the very last phase. There is no confidential agreement, so I can't say more than that, but confirming our willingness to proceed with this asset rotation, because the strategic idea behind all this is the repositioning of ERG as a pure player in the wind and solar, and maybe storage. I can tell you that we are going well, and we are again, positive that the final outcome will be very satisfactory for us. Let's see. You ask for maybe COD for powering. No, it was the COD for the new Sicilian recently authorized plant. The one you mentioned on top of the plan that you just got it when you described the COD. You are right. Depends, first of all, by the fact that, for instance, the park will be fully authorized in due time to participate to the next auction, because according to our business model, it's a precondition, the fact that the plant is awarded with a tariff, because we want to be quasi-regulated as we define the strategy. The idea is to first make the project fully authorized with autorizzazione unica, and then to bring it to the next auction. About pace, if I remember well, the planning 2023, the commercial operation date. Usually, but it's almost a rule, the bottleneck is the connection. For instance, even the largest project, Mineo- Militello- Vizzini in Sicily, 101 MW, which participated to the last auction, as occurred in 2023, because the length of the connection took lots of time. If not, the commercial operation would have been much earlier. Finally, you ask, a sign, just agriculture. I try to figure out the question is about the fact that the Ministry of Ecological Transition is pushing for solar on agricultural territory. For the time being, they gave some green light for the so-called vertical solar, which means that it's combined with agriculture. This, on one hand, will bring or should bring more megawatts to the next auctions, so they will increase the competition, even though according to our analysis, there is not very much of that kind. The game changer would be they would give the green light for normal solar, traditional photovoltaic, on agricultural soils. It's not the case, at least so far. On the other hand, I try to give to it a positive lecture in the sense that we, as well, are interested in understanding more about solar, because you know that out of our 1.5 GW of additional capacity we are targeting for 2025, one third will come or should come from solar. We are now studying the opportunities, even in Italy, for solar. We are monitoring also the regulatory evolution in order to be ready to seize any opportunity may rise. I think I completed the list of your- Yes, you did. Thanks a lot. Thanks to you, Roberto. Mr. Merli, there are no more questions registered at this time. Perfect. Thank you very much for the attention, and I wish you a very good holiday, and see you probably in September.