Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Italgas first half 2023 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, then they signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Miss Anna Maria Scaglia, Head of IR of Italgas. Please go ahead, madam. Hi. Good afternoon, ladies and gentlemen, and thank you for joining us. Today, we walk you through Italgas first half, 2023 results. I'm here with Mr. Paolo Gallo, our CEO, and Mr. Gianfranco Amoroso, our CFO. We will address any question you might have at the end of the presentation. I leave now the floor to our CEO, Mr. Gallo. Good afternoon to everybody, Paolo Gallo speaking. Let's start looking at the summary result presented in page number 2. In continuation of the result that we presented three months ago, on the first quarter, we achieved an impressive growth in the last six months, with double-digit increase in all the key operating drivers, income drivers. Revenue were up nearly to 32%, led by the strong growth of our ESCo and the consolidation of the Greek operations, proving, in fact, the benefits of the diversification that 2023 represent for Italgas. In the Italian distribution business, the main drivers were two: RAB growth and the positive impact of the deflator, that were unfortunately partially offset by the dilution from the disposal of the ATEM of Napoli. While total OPEX were up year-over-year, this is not surprising, considering the development of the ESCo and the consolidation of the Greek operation. If we look, and we will look in details in a moment, just the distribution business costs remain fully under control of understanding the inflation impact. Overall, considering our cost of debt, our adjusted net income grow by nearly 15% in respect of last year. Let's move to the following page number three, with a overview of the CapEx. We spent nearly EUR 400 million in the first six months, with an acceleration, if you remember, in respect of the first quarter. The mix was significantly different, if we look at this year and last year. I will explain in a moment. The first six months, the working capital was negatively impacted, by... The working capital, negatively impacted the operating cash flow and explain the change and the reduction of the operating cash flow in respect of last year. Two main drivers have created such impact, is the Superbonus activity, we have already talked about that in the first quarter, and the lower contribution from billing seasonality, that has been positive, but less positive than the previous year, due mainly to the milder weather and to the lower consumption created by all the action put in place by our government to reduce the gas consumption or the energy consumption in general. As a result, the cash flow, evolution, and the payment of the dividend, net debt increased by about EUR 300 million, just about EUR 6.2 billion. Let's take a look at the CapEx that is on page four. We invested, as I said, around EUR 400 million, 6.4% higher than last year. Out of these, EUR 50 million refer to Greece, and the remaining EUR 350 million to Italy, where there is still an increase in the digitization, remain very strong. We spend around EUR 125 million, with an increase of 12% in respect of previous year. Mainly concentrating on the digitization of the asset, because the contribution of the smart meter has been negligible. Development and repurposing of the network attracted the majority of the CapEx, nearly under EUR 90 million. That includes also EUR 24 million regarding Sardinia. As I said, we spend nearly EUR 40 million in CapEx in Greece. We'll give you, in a moment, more details about that. That represent 311 km of new network, new pipes in Greece only. If you look at the overall group, we added 478 km in new pipes. As I said, we would like to give you a more detailed analysis of the CapEx expenditure in Greece. I think that the result achieved in the first six months of this year, are here to demonstrate the change in the path, the change in the speed that the new shareholder, Italgas, has given to the three DSO. You can see that the value, if we compare what the three DSO have invested last year in the same period, is increased by 41%. If you look about the kilometers, the increase is even higher, it's 48%. If you look on the right part of the page, you can see that these new kilometers are well spread across most region in Greece, 7 out of the 10 in the mainland Greece. We are also working very hard on the DSOs integration. Following the strategic plan presentation we made in June in London, our teams have shared this project with the Greek regulator. Let's take a look where we are about the project integration. That is on page six. We have achieved, in this initial six months, significant progress. First of all, we have moved all the companies that are based in Athens, in one single building, it may look a little bit awkward to say that, but it's not so awkward because that is the first and major step to integrate the three DSO. The second step that we have done, always on the Athens-based operation, is that we have moved all their IT infrastructure to cloud, we have redesigned the IT infrastructure to upgrade network and user services. Regarding the all Greek operation, a significant effort was deployed on the IT system unification and transformation, leveraging our own capability, the capability that today are concentrated in our company called Bludigit. As few example, we have stepped up the cybersecurity, that in these days, is extremely important to reduce the risk of cyberattack. We've established a joint governance between our IT company, Bludigit and DEPA. We have started to set up the new EMMG platform for smart meter, to collect data from the smart meter, and the WOS platform that is used to remote control field activity. We are bringing to Greece all the technology that we have been using in the last few years in Italy. Let's go back now and take a look at the ESG results. As usual, we are looking back to underline the progress that we are making toward our targets that we set for 2028 to 2030. The first page seven, show the net energy consumption. Net energy consumption was down, if we look only at the Italy perimeter, by nearly 19% in respect of the previous year. If we include Greece, that was not consolidated, of course, in the first six months of 2022, the drop is reduced to slightly below 15%, but it's a remarkable drop. The main contribution came from industrial gas consumption, which was more than 22 TJ lower, thanks mainly to the action that we put in place to improve the performance of our pre-heating system. The remaining one-third reduction, 11 TJ, is coming from civil gas consumption. Thanks to the efficiency that we have achieved in optimizing the consumption of our building and the cost and monitoring of the performances of the building themselves. If we look at the electricity consumption, was also lower, mainly driven by the lower use by Italgas Acqua, thanks to the digital use of the data in Italgas Acqua, reducing, in the case, the consumption of electricity. That is very extremely important in the water sector. Thanks to the self-consumption of electricity produced in the city gate, that are equipped with turbo-expander, combined with cogeneration plants. Those equipment is used to pre-heat the gas, at the same time, they produce also electricity. Finally, if you look at the vehicles consumption, we again achieved a reduction in the net energy consumption, thanks to the fact that the kilometers that we travel in the first six months were significantly lower than the last year, due to the digitization of the business processes that has brought us to reduce the number of travels. If we move to page eight, we have the similar picture about the greenhouse gas emissions. In the period, we have seen an increase of 8.4%, driven by 2 factors. The major factor is that we included Greece, that was not present in 2022. The other is because we have, during the six months, concentrated ourself in inspecting, first of all, more kilometers than in 2022. We exceed the 51,000 km of our network in Italy, and we have focused ourselves in the areas that, where the emission were higher in 2022, with the objective to prioritize action where necessary. While this resulted in higher overall emission, the positive outcome of the choice is evident in the ratio, the KPI that we measure of gas leaked per kilometer survey, not only did not increase, but was slightly lower than last year. The reduction in the emission by the vehicle is driven by the less kilometer that we travel during the first six months. Let's look at the economic results. On page nine, you have the profit and loss account. In 2023, we don't have any adjustment, we compare the 2023 with the 2022 adjusted. Total revenues increase, as we have already shown before, by EUR 224 million, led by ESCo and by the Greek Greece consolidation. Expenses increase by EUR 131 million, driven by the same drivers. Depreciation and amortization was also up, due for two effect, higher CapEx in the scope of, and the consolidation of the infrastructure. Tax rate, Gianfranco will tell you later. The result is that we were able to increase the net profit by 15% in respect of last year, passing the EUR 213 million. Let's take a look in more details about the revenues and the difference between revenues achieved last year with the revenues we achieved this year. First step is the RAB growth. RAB growth and the effect of the deflator accounted for EUR 25 million in revenues. We have the combination of the inflation that is recognized at revenues level to cover our OpEx, that have been nearly completely offset by the negative X factor. The inflation recognized was about slightly less of 4%, while the X factor was 3.53%, as you know. The result is that only EUR 1.7 million is the effect of an increasing recognition for the inflation cost. A very, very, very small contribution. Other regulating items were negative for nearly EUR 5 million. I will explain in a moment. We have all the disposal, Naples, Napoli ATEM, and Gaxa disposal, net of Janagas positive contribution, resulted in EUR 35 million lower revenues. We have the two big part, DEPA contributed for EUR 87 million, and the majority increase comes from the ESCo, EUR 152 million in the first six months. Let's go and take a look from a different perspective on the revenues. That is on page 11. That is line by line. If you look at the Italian distribution regulated revenue, regulated revenue distribution, what is called regulated distribution revenue, gas in Italy, reported a slightly increase in 2022, notwithstanding the disposal of the Napoli ATEM. Other distribution revenue were down, as I said before, due to lower revenue for customer services and lower incentive for leak detection. I should say that this reduction is attributable to positive adjustment that we recorded in 2022, so were like a una tandem. Otherwise, the level of leak detection incentive is absolutely in line with 2022 results. Let's take a look at the cost. We are on page 12. As I said before, our operating expenses increased by EUR 131 million due to a combination of factor. Let's go one by one. You remember that every quarter we show what is the like-for-like cost difference. I'm very happy to say that in the second quarter, we were able to make this like-for-like cost equal to 0, offsetting completely the inflation impact. It's even more than that, because if we exclude the pass-through cost, so costs that are also recon. That is, have a similar recognition in the revenues, the overall costs were down more than EUR 3 million in respect of last year. We have the fact that Gaxa and the ATEM of Napoli are not anymore in our perimeter, and that represent about minor cost of EUR 12 million. We have what is adding, the DEPA cost, nearly EUR 26 million, and the ESCo. We have seen the increase in the revenues, of course, we see also an increase in the cost of EUR 117 million. The next page 13, just show this cost in different, let me say, in a different perspective. If we take a look at the result in term of the EBITDA. EBITDA grow in respect of last year by more than 18%, so it's a significant, very strong growth. Let's look at where it comes from. First of all, if we look at the Italian contribution, the Italian contribution, even though there has been a Naples disposal, is still positive. We need to thanks the RAB growth and the impact of the deflator. DEPA Infrastructure accounted for EUR 61 million, and the ESCo accounted for nearly EUR 30 million. What is on the right side of the chart is also very interesting, because it show you how the business of Italgas has been evolving over the last 12 months, with the Italian distribution moving from 90% of the total EBITDA to 84%. You can see the contribution of the Greek operation and the contribution of ESCo. You also need to consider that in the Italian gas distribution, there is the Naples, the Napoli disposal that has reduced the contribution of the gas network. You should remember also that the comparison has a different perimeter, because in the first six months, we did not have Greece, while, of course, during Greece, as we started to consolidate the Greece operation in September 1st, 2022. You can see the full impact in the first six months of the Greek contribution. I leave now the floor to Gianfranco for the remaining part of the presentation. Thank you, Paolo. We are now on slide 15. We see that in the first six months, 2023, EBIT reached almost EUR 360 million, marking increase of 21%. In the period, we saw an increased EBITDA of our Italian perimeter of more than EUR 32 million, as a result of the variance of revenues and OpEx already explained before by Paolo. Second, higher DNA for Italian assets of almost EUR 14 million, mainly related to the CapEx executed in the last six months, and the carryover of the CapEx executed last year, considering a neutral impact from Naples, discontinued as DNA as of first of January, 2022. Third, the first time EBIT contribution of DEPA of almost EUR 44 million, after DNA of EUR 17 million, that in addition to the EUR 13 million of the Italian perimeter, gives a total increase of EUR 30 million already commented by Paolo. Moving now to slide 16, where we have adjusted net profit after minorities that reached EUR 213 million, up almost 15%. We commented the net financial expenses were EUR 44.6 million, or EUR 18 million higher than last year same period, mainly due to the impact of the rising of short-term interest rates on our floating rate debt. In relation to the fixed rate portion, we have accounted the full impact of the EIB loan executed in December of 2022 for EUR 2.4 million, and the new bond issued in June for EUR 1 million. We also accounted for the cost linked to the factoring of the VAT receivable of the first quarter of around EUR 5 million. Contribution from associates decreased by EUR 0.8 million. Finally, we accounted for EUR 85 million of income taxes, marking an increase of EUR 10 million due to the higher taxable income, while the Tax rate was 27.1%. We now look at the evolution of the cash flow on slide 17. First, you can see that cash flow from operation was around EUR 320 million. This is a consequence of a negative evolution, as expected, of net working capital that brought a negative contribution of almost EUR 130 million. I would flag two items in particular. Geoside, our activity in the energy efficiency area, booked EUR 168 million of higher receivables for Superbonus and EUR 30 million of higher payables to our suppliers. A lower cash contribution from the billing seasonality, only EUR 85 million, if compared to last year, same semester, due to mild weather and to saving implemented by the final users to contrast high commodity costs. Net CapEx generated a cash outflow of almost EUR 400 million. Coupled with dividends and other payments for EUR 235 million, resulted in a net debt increase of approximately EUR 315 million. Make a quick update on our debt structure at the end of June. We are on slide 18. The new element is that in June, we issued a EUR 500 million new bond with a 10 or 9 years, to ensure an adequate liquidity in anticipation of next year funding needs. Our debt composition after that new issuance remains broadly unchanged, 8.5% floating, the remaining fixed. In light of the new bond and the new bank facilities carried out in the last 12 months, mainly since December, our average cost of debt increased to approximately 1.4%, reflecting the rise in the short-term market rates. Moving on to the balance sheet on slide 19, just to comment that net capital invested amount to almost EUR 8.7 billion, with an increase of more than EUR 270 million compared to the same period last year, mainly related to incremental CapEx and working capital. On the liability side, consolidated net debt was EUR 6.3 billion, including IFRS 16 impact of approximately EUR 84 million. I leave now back the floor to Paolo. Thank you, Gianfranco. I would like just to make few remarks before opening the Q&A session. Let me say that the second quarter has confirmed the trends of the first quarter, so strong growth in respect of last year. Gas distribution fundamental remains strong in Italy, led by the RAB growth and cost control, despite the negative impact of disposal and the negligible impact of the inflation recognition by the regulator. Diversification with Greece and the ESCo is a material growth driver. I should remind you that the regulator in Greece has recently approved the 2023 allow return for the 3 DSO, and it was set at 8.57%. Finally, we are still working with the DEPA to close the deal on the water asset. Our guidance for 2003 is confirmed, so I'm anticipating probably some of the question that is coming. Please, the floor is yours, and we are available to respond to your question. Thank you. 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. 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 Sarah Lester, from Morgan Stanley. Please go ahead. Thanks very much. I just have a high-level strategic question, please. I'm interested to hear management's view of the longer-term makeup of Italgas. In 5, 10 years' time, is it very much by then a multi-utility, or does the Italian gas networks remain very much the dominant core business? Obviously, just interested, given, you know, the recent backdrop with water and Greece last year. Thank you. It is the only question you have? Just one. Oh, very good. It's a new habit, you know? Normally, it's three questions. I mean, very interesting one. Thank you for your question. My answer is we are not going to be a multi-utility, full stop. That, that's very clear. Our gas distribution will remain core in the years to come because we feel, and there is clear evidence in the last couple of years, that the gas distribution infrastructure will play a central role in the energy transition, and we are here to play such a role. If you look at the water sector, or if you are talking about the energy efficiency, those are, let me say, industry-related sectors, strictly connected to our sector itself. What we are doing is that we are trying to take advantage of sectors that are very close to us, let me say, for operation, water distribution, for related to energy transition, energy efficiency, and therefore we have decided to invest because those businesses are very close to us for the two reasons that I mentioned to you before. That does not mean that we are going to be a multi-utility. We are not going to be a multi-utility. We are trying to leverage the knowledge and the competence to enter industries, like the one that I mentioned, or eventually to diversify ourselves, always in the core business, on a geography base. Greece is a clear demonstration that we can be a significant player also outside Italy, again, leveraging our competence and our knowledge in the gas distribution. 5 or 10 years from now, we will still be a significant, our core business will be gas distribution, maybe with some of the other two businesses, very interesting in term of results. Thanks very much. Next question, please. The next question is from Javier Suarez, from Mediobanca. Please go ahead. Hi, all. Several questions. The first one is on the slide number 17, on the working capital dynamics, what has to do with the growth on the ESCo activity. Can you remind us the assumption by the year end, by the year end? Should we assume that that number, that absorption working capital, is going to be at zero by the year end? Which are the managerial options that you can take to zero that number, again, by the year end? Another question is moving to the slide, 20, on the regulatory settlement in Greece for 2023. You can share with us how this settlement compares with the assumption in the recently presented business plan. You can share with us your assumption for in the business plan for that, and our return on RAB in Greece beyond 2023. During the presentation, you have make a lot of emphasis on the management effort to bring DEPA to the Italgas standard, to a digital transformation. In your industrial experience, which is the timing that a company like Italgas needs for the completion of that project and to bring the Greek operation to the Italgas standard? The very last question is on the water distribution activity, maybe a follow-up on previous question. After the closure of the deal with Veolia, how do you see the capacity of the company to become a relevant actor in water distribution through selected M&A, and the real options that you see on that market as we speak? Thank you. You have recorded some of the questions that were not banned by your colleague in Morgan Stanley, because you did four questions. On the networking capital by year end, maybe Gianfranco may give you also the. Well, there is a confirmation of guidance in the net debt, that what we have announced in June. Maybe you can elaborate a little bit more on the networking capital. Yes. For sure, the assumption was based on the working capital neutral, and the guidance for the net was EUR 6.4 billion, including IFRS 16. This means that, following to your question about the impact of the Superbonus, receivables and the activity of the ESCo, the neutrality will be also, let's say, positively affected by the reopening of the banking system in order to be able to buy this receivable. Otherwise, you have to remember that the normal evolution of this kind of receivable linked to the normal activity of the ESCo establish a period of four years in order to be recovered. Normally, there's a possibility to recover in installments, in four installments, the receivable that you have in one single year. This was also the case this year when we have utilized the first installment of the receivable 2022, against the tax paid in June. On the second question about if I well understood, the number approved by the regulator in Greece about the WACC, the 8.57% was, let me say, in line with our expectation and with the assumption that we made in the strategic plan when we presented the strategic plan in, back in London. Why it was in line? Because, let me say, we presented to the regulator different studies. The 3 DSOs have elaborated their own studies by a third party, and those studies were presented to the regulator, with slightly different outcome, one from the other, but very close one from the other. Therefore, we took numbers, we put numbers inside our plan. It was 8.5%, was very close to the result that we got from the regulator. The result has been in line. The reason is because our studies were extremely strong on that, very solid, very realistic, and we find on the other side, a regulator that has recognized the good of these studies, and they have translated into a number that was very close to our expectation. You mentioned something about the RAB, for which I did not get it. Let me see. The value of the RAB for Greece was the end of 2022, EUR 720 million, and it is expected to be EUR 800 million by 2023. These numbers are important, I mean, now I understand your question, is because the revenues recognized, so the WACC in Greece is multiplied by the RAB of the same year. It's slightly different from the Italian one, where the revenues are calculated based on the RAB of the end of the previous year. The revenues coming, just to make it sure, the revenues that should come for 2023 are the RAB of 2020, end of 2023, multiplied by the WACC plus all the other components. You mentioned about when and what is the time frame in which we will bring DEPA with the same profitability as the Italian one. You need to go back to the... There was a clear, page in our business plan presentation in London, where we indicated what was the assumption taken in the plan and the ambition that we had. The ambition was to bring at the same level of the Italian, or maybe slightly below, because you don't have the economy of scale that we have in Italy, in five years time. We are on that, on that trajectory, so we should be there in, hopefully, maybe in less than five years' time. Take a look at the chart. It was on chart 23 in our strategic plan presentation. There is the ambition line. We are on that line. Hopefully, by year-end, we can tell you that we are even better than that line. tags. <edited_transcript> On the water side, your question is, can we become a relevant player in the water distribution? Honestly, now we are focusing on closing the Veolia deal. We have also our strategy how to tackle the big leakages that there are in the water distribution. As we explained in London, during our strategic presentation, we said that we feel that the digital technologies that we have developed in the gas distribution apply to the water distribution, with limited investment, should be able to significantly reduce, we talk about 15%-20%, the current leakages. So moving, like, let's say, from 50% to 30%. Then based on the data collected, we should be able to prioritize investments and therefore to further reduce the leakages. We want to, after we will take over the Veolia asset, we want to demonstrate this theory that has been already demonstrated in the gas distribution, honestly. It should be relatively easy to demonstrate, and then I think after that, we may become a relevant player in the water sector. Next question, please. The next question is from Mark Freshney from Credit Suisse. Please go ahead. Hello, thank you for taking my questions. Firstly, I mean, I can't get away from this point on the EBITDA. I mean, it seems you've had a very strong start to the year. Presumably, we should be seeing the EUR 1.18 billion now as a floor. Secondly, just on the returns in Italy, I was just interested to see what your latest expectations are for those returns next year. Thank you. On the first one, let me say that I said before, we confirm the guidance. On the EBITDA guidance, we, well, we're probably at the very high point of the guidance. I share your view that we have been able to report a strongly result in the first semester. On the ESCo side, let me say that we will see a declining, little bit of declining of the revenues over the next six months, only because the Superbonus will end by year-end. There is normal, that there is a peak at July, at June, and then we will see some declining. Still, I feel that we will report on the higher part of our guidance of the EBITDA. Regarding the WACC, we are very close to the end of the of the period in which observation period. Based on they're still missing August and September. Two months out of 12, w e confirm that the WACC for the next year should be 6.4. 80 basis point higher than today WACC. That is our expectation. Is a very strong expectation. Perfect. Thank you. Next question, please. The next question is from Stefano Gamberini, from Equita. Please go ahead. Good afternoon, everybody. I have two questions. The first is regarding again the WACC in Greece. Just if you can give us the breakdown of the main components of this WACC, which was set for 2023, if I'm not wrong. What could happen for 2024 onwards, when we could expect a new decision from the regulator? The second, regarding your concession in Rome. If I'm not wrong, this will expire in 2024. The Rome municipality was the first to decide about the tender, or even if there was even an agreement between you and the municipality of Rome for the renewal of concession? If you already have some contacts with the municipality, because probably they will, on track, on the contrary of all the other actors, considering also the topic regarding the value of the assets, the RAB, and the value of the assets that could be recognized as a redemption value to you. Could you also remind about this topic, what is your best estimate right now regarding the RAB in this concession in 2024, at the end of concession, and the potential redemption value? Many thanks. Okay. We can provide to you the detailed number, but let me go through one by one regarding the WACC in Greece. Risk-free return market is set at 2.36%. Risk premium, 5.5%. Systematic risk factor, 32%. Country risk premium, 0.8%. After tax rate, 1.3%. Cost of equity pre-tax, 8.06%. Capital before tax, 22%. It's quite long, the list, at the end of the day, the result has been 8.57%. It's more probably for many analysts. We can provide to you all the data, but that is, those are the major data that are inside the evaluation of the WACC. For the years to come, that is something that will be discussed at the end of this year, beginning of 2024. Honestly, the result will mainly depend about the evolution of the factor that I have already told you. On the Rome side, I will pass the data to Gianfranco. Let me only say one thing, that it's true that the concession is going to expire next year. As you remember, in our plan, we have put as a date for the end of the tender process in 2027, so in 3 years. That should be quite a significant record, if you look at all the other tenders time, so that after 3 years, the concession will be awarded to a new or a new operator. For the data, Gianfranco will give you the numbers. Stefano. As far as the RAB is concerned, in 2024, the total figure of RAB is EUR 1.7 billion, of which the RAB already owned by the municipality is around EUR 700 million. The RAB, subject to, let's say, devolution for free at 50%, is around EUR 350 million. The remaining is the RAB that will be returned against cash. The 03 is divided. 50% is owned, will be owned by the comune- 50%. 50% will be owned by us. The comune will own about EUR 0.85 billion. Exactly. Okay. Yeah. In the concession agreement, there is a fixed amount for the redemption value, which is been fixed at EUR 300 million, the so-called una tantum, to be paid to the existing concessionaire in case it will not be awarded the tender. Just to summarize, the RAB, in fact, EUR 1.7 billion, is split at 50/50, more or less, between the ownership by the Comune di Roma and the ownership by us. Then there is the EUR 300 million as an una tantum to be paid at the end of the concession. If I? Please. EUR 1.7 billion, this means that you have more or less EUR 900 million, EUR 800 million, EUR 850 million of owned RAB out of this EUR 1.7 billion, and a redemption value of EUR 300 million. Am I wrong? Correct. You are correct. Okay. In your business plan, you are in continuity in 2027. May I ask you if in 2027, you also plug into your estimates the payment of the difference between this redemption value and your own RAB? I think the concept of continuity was that, as you know, the concession fee is the current concession fee is higher than the tender rules. We expect that the Comune di Roma will continue to own its own RAB, that will not value anymore EUR 0.85 billion, because it will be decreased over the years, and there will be a recognition in term of fees to this value. At the end of the day, the reduction in concession fee, because of the tender, and increase in concession fee because of the ownership of this amount of RAB, are more or less the same. That is the assumption of our business plan that we have explained in London, but I don't remember that. Honestly, it will depend what the Comune di Roma is intended to do about their own RAB. Should they cash in this amount, and therefore see quite a significant sum at the beginning of the concession, but with a significantly reduction in the concession fees? You know that the rules are setting at maximum of 10%, the value of the concessions fees, or they will prefer to keep all or portion of this amount in order that they can continue to receive, let me say, revenues from that, even though this amount will decline year after years. That is something for which we don't have the answer. We have assumed, yeah, continuity, in a sense that Rome will continue to own portion of the RAB of the network. Okay, thanks a lot. Next question, please. The next question is from John Campbell, from Bank of America. Please go ahead. Hi, good afternoon. Thanks for taking my questions. Coming back to your allowed WACC in Italy, I understand that you expect an 80 basis point increase for 2024. If I do mark to market, sort of applying ARERA's rules, it comes out at 90 basis points. Are you sort of applying some sort of conservatism? Do you expect the regulator basically to completely follow the stated mechanism, there's no ad hoc adjustments likely? Following on from that, do you expect that this trigger mechanism, which was enforced throughout 2022 and beyond, do you expect it to be sort of repeated again in 2026 or 2027? That's my first question. If it's going to be 90 basis points, will be more than FP. I'm with you. Honestly, in our evaluation, considering that 10 months have already passed and two months are remaining, we are closer to 80 than not to 90 basis points. If it's going to be 90, I will offer you a dinner. Keep in mind that. Regarding the future, 2026, 2027, this mechanism will continue to apply. I mean, we don't know because, you know that the regulation may change eventually. I can imagine that the regulator will not change again, the way in which they calculate the work. I'm expecting they will continue on that basis. Having shown that it's working quite well, is taking, let me say, is really able to capture the reality, even though last year we were not able to get by less than 1 basis point at trigger mechanism working. Having said so, it looks like this is predictable. It's something that, okay, we can have some discussion about 90 or 80, but still we are in that range. If I have to bet, I can imagine that the regulator will continue to use a mechanism like that, will continue to use the same mechanism also for in the future. Okay, that's very clear. Second quick question? I understand, of course, you're completing the deal to purchase the stakes in Veolia's water assets. I suppose as you think further ahead, would Italgas presumably be interested in trying to consolidate, those water assets, if possible? Do you have a figure in mind for sort of the equity contribution that you expect from those assets, once the deal is closed in, for full year 2023? If I well understood, you said that, once that we close the deal with Veolia, which is the contribution from the water asset to our profit and loss? That is the right ans? That's it. That is the right question. Why I've asked one thing, because if we look strictly at the situation, we can consolidate only Siciliacque, because we have 75%. The remaining we don't have, we don't have the possibility to consolidate, so you will see only a profit level. If you want, to have, like, a, let me say, a pro forma EBITDA, so the contribution considering the pro quota, the number is, let me see, because we have made such a calculation. Let me say that the three companies together are totaling EUR 350 million, around between EUR 300 million-EUR 350 million of RAB, so it's quite a significant number. Again, we cannot consolidate them, except the Sicilia one, and we don't have the number in mind today. We can go on with the questions, and we will get the number immediately, and we'll tell you right away. If you have any other questions, please raise. Yeah, very, very quick last one. Looking at your ESCo business, if you go back to the capital markets day presentation, you know, you flagged already that you expect to decline in earnings in that segment in 2024 versus 2023. Could you sort of clarify my understanding related to this Superbonus mechanism, which appears to be the driver? Is it being phased out entirely, or is it just being sort of progressively watered down in the coming years? If it's just being sort of phased out, perhaps the sort of estimates you came up with for earnings next year look a little bit extreme. Okay, regarding the ESCo business, as I said, the Superbonus in a way of 110%, is going to expire by the year-end. is going to be replaced in 2024, by another mechanism that is called 70/30. In other terms, the customer will pay 30% of the intervention, and the remaining 70% will be, let me say, deducted from a fiscal point of view. There will be the contribution over the years by the state. If you think about, which is 70/30, you should consider that is probably to be, if you, if you give the credit away, if you sell the credit, It's going to be probably 45/ 55, 40/60. If you're going to, in other terms, the customers, has to put the 30% of the intervention in term of cost immediately, and if they want to sell the remaining 70%, probably they will get like 60% of that. At the end of the day, they will put between 40%-45% in term of cash, and the remaining will be fiscally subsidized. That is going to create a big step down in term of revenue. Imagine that one person that today will get the intervention fully paid, and tomorrow he should pay between 40%-45% of the intervention. It's still a very nice incentive, but it's far from being zero. Very clear. Thank you. Next question, please. The next question is from Jose Ruiz, from Barclays. Please go ahead. Good afternoon. Thanks for taking my questions. I only have two. The first one is, you have set a very clear path of revenues regarding the Superbonus. I would like to understand what is going to be the evolution of the generation of receivables related. You're saying you have EUR 168 million. What would be the evolution in the second half of the year? Thank you. The second question is, I'm trying to calculate the dilution of Napoli atom at the EBITDA level, you're being very stable in terms of generating or the dilution being around EUR 11 million per quarter. Can I multiply that x4 for the second half of the year, or is there a component of seasonality? Thank you. Well, let's start from the second question. I lost it. The line was quite bad on the first question. Let's start from the second question. We said that Naples represented EUR 25 million in term of revenues. I'm underlying term of revenues, so it's going to be EUR 50 million. You just multiply by two over the S time. That is the contribution, less contribution of Naples. Can you repeat the first question because I lost it? I was wondering, what is going to be the generation of receivables related to the Superbonus in the second half of the year? Okay. Well, as I said, the overall revenues that we recorded in the first semester of 2023 has been nearly EUR 200 million in as a overall amount. We expected in the second half, between, let's say, EUR 100 million and EUR 150 million, representing a declining in the Superbonus. That is what you expect. What we are doing, Gianfranco was mentioning before, is thanks to the reopening of the banking system about selling the receivable, we should be able, I'm not saying to sell everything, also because we look at the cost of this transaction, but to sell a significant amount in the second half of the year, to make what Gianfranco was saying, the net working capital equal to zero or very close to zero as an impact. Thank you. Very clear. The next question is from Amish Moore from Credit Suisse. Please go ahead. Hi, thank you. One question from me, please. I'm afraid it's also on ESCo. I was wondering, can you please speak to ESCo revenues a bit more in the second half of the year? You said that you expect it to be weaker. I was wondering how. Excuse me. Can you. Your tone of voice is very low. I don't know, because of the connection, maybe. Can you restart again? Yeah, of course. Okay, much better. Is that any better? Okay. Much better. Perfect. The question is, can you speak to ESCo revenues a bit more in the second half of the year? You said that you expect they'll be weaker, but I'm wondering how quickly you see that decline based on how it's currently trading. Okay. As I told you, we said that EUR 200 million were recorded in the first six months. We expect within EUR 100 million and EUR 150 million in the second period, there will be, let me say, the quarter weaker should be the last one, because some of the activities will be already stopped by, will be already finished by the third quarter. The profitability will remain at 20%. If you want to make, let me say, a very rough calculation about the contribution of EBITDA in the second semester. In the second semester of 2023, I said between EUR 100 million and EUR 150 million. If you make the 20%, it's going to be between EUR 20 million-EUR 30 million, the EBITDA contribution of the ESCo to our profit and loss. Now I have the answer for the water. The three companies recorded an EBITDA of around EUR 60 million, the three companies together, 100% of them. I will let you know the calculation. Next questions, please. The next question is from James Brand, from Deutsche Bank. Please go ahead. Hi, I just had a couple of clarifications, please, on the discussion earlier on the Rome municipality and the minority there and the concession, renewal. Firstly, just to be clear, if you were to lose that contract, you would expect to only get the EUR 350 million redemption value? No. back as compensation? No. maybe it was. Okay, no. Okay. No. Well, it'd be great if you could just explain how that works. The second question on that topic is, when would you expect to have clarity on the position regarding that concession? Are there talks ongoing at the moment? When would you expect the talks to conclude? Difficult to answer, because, I mean, the line was extremely bad. Let me just go back through the Rome Concession another time. We made many numbers, at the end of the day, it's very simple, the way that the number. Today, RAB of the Rome Concession is EUR 1.7 billion. Okay? Let's say a round number. 50% is owned by the Comune di Roma, 50% is owned by us. If you divided EUR 1.7 billion by 2, EUR 850 million will be our, in case we are going to lose, what we are going to cash in. On top of that, we are going to cash in EUR 300 million that is due, according to the contract, by the Comune di Roma as una tantum. That's it. There are discussion going on with the Comune di Roma. Honestly, we are one year and a half from the end of the concession, we have not started any kind of discussion. I don't see why we should start a discussion, because if we follow the normal procedure to held up a tender, we expect that the Comune di Roma will start asking numbers to be put into the tender, as well as they have to ask also some other numbers, because the ATEM of Comune di Roma is larger than the Comune di Roma itself, so they need to get other data to be collected, put it together, and create the tender. It's not a matter of discussion, it's a matter to initiate a process that is, that start from the collection, from the different operator, mainly us, of course, that are operating on the ATEM of Roma, that I should remind you, that is not only the Comune di Roma, but is slightly larger than the Comune di Roma itself. I hope now. Thank you. You have a clear number in mind. Yeah. Thank you for that. That, those numbers you just gave actually are very much in line with my understanding previously of the economics. Okay. I was listening to your answer earlier and worrying that it might be a bit different. Thank you for clarifying. Yeah, probably the line was very bad, so I said no, because I understood the different numbers. That's the reason. Okay, great. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further question, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Thank you. Thank you very much for everyone attending, and if there is any follow-up questions, the IR team will be available. Thank you. Ladies and gentlemen, thank you for joining. The Conference is now over. You may disconnect your telephone.