Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Italgas First Quarter 2024 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 Miss Anna Maria Scaglia, Head of Investor Relations of Italgas. Please go ahead, madam. Hi. Good morning, everyone. I'm Anna Maria. I'm here with our CEO, Mr. Paolo Gallo, and our CFO, Gianfranco Amoroso. As usual, we will have a Q&A session at the end of the presentation. Today is going to be a very busy call, I'm sure. I just run off, and I let Mr. Gallo start. Morning, this is Paolo Gallo speaking. Today we are here to discuss the first quarter and present with the first quarter 2024 results. I can imagine that you may have also other questions based on what we have announced just yesterday about 2i Rete Gas. Their shareholders gave us an exclusivity period to conduct the due diligence with the objective to present a binding offer for the acquisition of 100% of the share capital of the company. I'm expecting that you will have plenty of questions on the topic. So, I say in advance, please be patient and understanding because we, as of today, we are unable to delve into specific details on the offer, on the non-binding offer we submitted, for obvious reason because it's of course a confidential transaction. Of course, we remain committed from now on to full disclosure data and numbers once a positive agreement is agreed, is reached. That's also the reason why yesterday we decided at the Board level to postpone the strategic plan presentation that was originally set for June 12. If just to give you just a little bit of flavor about the transaction that I'm sure you will immediately understand, there are several strategic rationale for such a transaction. Let me at least point the two obvious one. The reinforcements of Italgas position as a leading DSO in Europe, also in the view to to fully support the energy transition and the potential of sharing of our best-in-class digitization capability, know-how, with the outcome of having a multiple synergies opportunity that will create value for our shareholders, for our stakeholder, for the community where we are going to operate. As we said in the press release, should we enter into a binding agreement, Italgas will finance the deal via bridge credit facility already underwritten by, fully underwritten by JP Morgan. The bridge facility then could be refinanced later through a combination of equity, debt, or equity-like instrument, with the objective to maintain the current rating profile of Italgas. We, of course, will this call, we will disclose final terms and conditions of the refinancing upon the finalization of the binding agreement. Let's now move to the first quarter results, and let me say that we are extremely happy about those results. Just to remind you, it's the 29th quarter of growth. I think the number and this morning I was thinking about and recounted the numbers, because 29 is becoming a huge number. I don't think there are so many companies that can have such performance. Except the revenues that we were expecting to have a significant drop in the revenues due to the closing of the Superbonus at the end of 2023, all the other metrics show a significant increase by a double-digit. And in fact, even though the revenues were low by more than, more about 10%, the gas distribution regulated revenues increased by 11%. And of course, as everybody knows, this increase is mainly driven by the update in the Italian regulation that we've delayed, as normal in the regulation, has incorporated high inflation and rates in the allowed return and tariff assumption. But that is not the only reason why gas distribution revenues have increased. Also, the RAB evolution has boosted such increase. I would underline that these numbers do not incorporate the updated deflator of 5.3%. We have considered only 3.8%, that was the previous number announced by the regulator. 5.3% was announced last Thursday, and of course, you can imagine, because it will affect the 2023 RAB will positively impact the 2024 tariff. Consider also the positive contribution of Acqua Campania, that has been fully consolidated because of our share percentage since February 1st. Finally, cost control will continue to remain in place, and that is the reason why we have seen such a significant increase in double-digit both the EBITDA and the EBIT. We will get into details in a moment. Net income finally grew by 13.5% in respect to 2023. If we look at the other, s o we move into page number five. If you look at the other elements, operating cash flow has come back to what we expect that the operating cash flow of a regulated company like us should be, 3 x last year. You remember that last year, our cash flow was affected by the VAT call relevant to the bonus gas, and also by the Superbonus. Both elements disappear in the first quarter of 2024, so we are back to the normal. CapEx are slightly below last year but it will be recovered throughout the year. A nd thanks to the operating cash flow, the net debt is reduced in respect to the end of 2023 by around EUR 100 million, particularly EUR 103 million less than the end of December 2023. If we take a look at the CapEx side, we are on page 6. We have invested EUR 161 million, slightly below last year. We expect that this amount will be recovered throughout the year. Development and repurposing represent always the majority of the CapEx. 175 km of new pipes were laid down during the quarter, out of 100 km only in Greece. So Greece will continue to drive new kilometers of pipe. The digitization effort continue. We will see in a moment significant effects either on the cost control and on the ESG components. If we look, if we take a look at the overall physical data, we are on page seven. As you can see, we manage more than 83,000 km. M ore than 8 million redelivery points, final customers. M ore than nearly 2,100 municipalities, if we sum up the Italian and the Greek presence. We wanted also to bring to you also some physical data of the water distribution sector. We manage throughout the three companies that we have acquired from Veolia and the existing small concession that we have in Caserta, around 9,000 km of network, and we serve directly and indirectly around 6.2 million final customers. So from now on, you will see also going on the numbers and the KPI of the water distribution. Let's get to some update on the regulatory side. We are on page eight. We have the new resolution that was just issued last week. If I'm not wrong, it was issued on Thursday. That this new resolution 173 sets updated deflator assumption for 2024 tariff. And in fact, the regulator acknowledged the significance of the review of the deflator time series made by ISTAT. So the new deflator that is going to be applicable to 2023 end-of-the-year RAB will be equal to 5.3%. In our numbers, it's only 3.8%. That was the previous resolution. I think that's why it's quite significant, important, because we'll increase the value of the RAB at the end of 2023 by a little bit more than EUR 100 million, and of course, that will drive also the new tariff and the new revenues. Today's number do not include, and I'm underlining that, do not include this number because we were closing the numbers few weeks ago, so we didn't change our number for this presentation. You will get the new number at the next quarter, at the end of June. Let me take a look at the ESG numbers. That again shows, and we are on page nine, significant movement in respect of last year. Not only we are on the trajectory of our target in 2028 and 2030, but we are doing even better. If you look at the energy consumption, we are down in respect to the same quarter of 2023, by nearly 15%. And that is coming from, let me say, all over the area. So we have less gas consumption for the preheating, less electricity consumption. A lso thanks to the out of production of the electricity, less use of gasoline and natural gas for our fleet vehicles. And let me say that, a nd I wanted to point out that this reduction relevant to our fleet vehicles is driven by our digital transformation. Because at the end of the day, we made less kilometers by that last year, significant less of kilometer of last year. That is mainly due by the fact that with the remote control that we implemented at DANA level, we are able to reduce on-field intervention, and therefore, we are able to reduce our number of kilometers. So that is one of the evidence of the progress that you can make in term of less energy consumption, less CO₂ emission, and finally, less cost, thanks to the digital transformation. Let's look at the CO₂ emission, Scope 1 and 2. Again, here we show - 4% in respect of last year, so we will continue to reduce our footprint. What is clearly evident is even though there has been a change in the standard, the so-called global warming potential, that convert the CH4 leaked with CO₂ emission, even though we were able to reduce our emissions. So you see that there is an increase in term of gas leaks because of the change of the standard. But we found that we would have seen a significant, still significant decrease in term of gas leaks. Now, understanding that, we made more kilometers in terms of network inspected than last year, as you see 16% more, we passed the 30,000 km inspected in the first quarter 2024. Remember, the number of kilometers that we manage is 83,000 km. S o we nearly reach, well, we are at 40%. S o our target this year is to pass significantly 100% to reach 150% of the kilometer inspected. And the good thing is that we have seen the KPI of gas leaked per kilometer survey significantly decrease in Italy and in Greece. 18% in Italy, 25% in Greece, respectively. So again, our approach to reduce our footprint, carbon footprint shows significant and impressive progress toward our targets that we have declared to the market. Let's go back to the numbers now, and let's go to the revenues. It's page 11. As we have already showed back in the, in this, in page four, we have a revenue decrease by 10%, and there are, let me say, the major driving factor is the reduction of revenues from our energy efficiency company by nearly EUR 100 million. That is the end of the Superbonus. So it's very clearly easy to explain. At the same time, we have an increase, either driven by the increase of WACC, that I should remind that is, there is a delay in time in which the regulator by the regulation itself will recognize such increase. A nd there are other regulated company that increased by EUR 20 million. Then there is the new contribution for two months of Acqua Campania that is EUR 12 million. So those are the main impact of, on our total revenues. If you look at the operating expenses, we are in page 12. As you can see, our effort to continue reduce our cost is significant. The cost dropped by 42%, but is of course driven by also the drop in Geoside cost, that is similar to the drop in the revenues. But what to me is extremely important is that we were able, on a like-for-like basis, to reduce by EUR 6 million our cost in the quarter t hat represent more than 3% in respect of last year. So our progress in being more efficient is continue quarter-after-quarter. And then, of course, we have the addition of the EUR 46 million of Acqua Campania, that of course, it is the specular element of the additional revenue for two months. If we look at the EBITDA result, we are on page 13. The EBITDA has significantly improved, nearly 10% more in respect of last year. Of course, there is a negative contribution by the energy efficiency end of the Superbonus, but the major driver of increase is, of course, the Italian distribution in Italian distribution that increased the EBITDA by EUR 42 million. B ut is the result of what I have already said, higher revenues and cost reduction. I will leave now the floor to Gianfranco to continue the. And then I will wait for your answer to come for your question to come at the end of the presentation. Thank you, Paolo. Let's start with the EBIT reported in the first quarter, that has reached under EUR 93 million, with an increase of almost 12%. In the period, excluding Acqua Campania, we have an increase of the EBITDA of around EUR 23 million. That is the result of the variance of revenues and OpEx that we have already commented. And higher D&A for EUR 4 million, that as usual, in this period of time, are mainly related to the carryover of the CapEx executed last year. To all this, we have to add the incremental EBIT contribution of Acqua Campania for two months of almost EUR 1.4 million. Moving now to slide 15. O n the net profit trend, which marked a significant increase of 13.5% compared to last year, same period, reaching, after minorities, a level of EUR 117.6 million. I will bring you through the different component of this trend and commenting the net financial expenses that reach the level of EUR 26 million, that is EUR 6.1 million higher than last year. This mainly due to the impact of the rising short-term interest rates and the new bonds that we have issued last June and this February. Income from associates increased by more than EUR 3 million, mainly due to the contribution of water sector affiliates, Sicilia and the Latina, consolidated at equity. Finally, we reported EUR 45.2 million of income taxes, marking an increase of approximately EUR 4 million due to the higher taxable income. Tax rate was at the normal level at 26.5%, in line with the level of last year, not considering the extraordinary impact of the Patent Box that we commented for the results of the full year of 2023. On page 16 is just a recap of the P&L elements that we have discussed in the previous slide, so I will step directly to the following page. That is a new one, since we promised you that we would have increased visibility on the water business. In the first column, you have the figures of the perimeter that is currently consolidated line by line, including Acqua Campania for two months, of course. While in the second column, we have added both Sicilia and Latina on a proportional basis, getting to an EBITDA of around EUR 14 million. Now, going to the following page, we have now the cash flow in the period that as commented already by Paolo, has recovered significantly to a more normalized level. We reported around EUR 342 million of cash flow from operations. This is a significant increase if we compare to this level to the level of past year first quarter, that was deeply affected by the net working capital, and the important absorption by the VAT and Superbonus receivable that in combination were around EUR 200 million, negative. This year, net working capital first quarter reflects the usual positive, billing seasonality of this period of the season for around a contribution, a positive contribution of EUR 60 million. Net CapEx generated cash outflow of around EUR 200 million, which was entirely covered by the operating cash flow that we generated in the period. All this net of financial investment related for the, let's say, M&A, related mainly to the Belluno tender completion, so the taking charge of the management of the item, resulted finally in a net debt decrease of approximately EUR 90 million compared to the level of the end of 2023. Now, let's make the usual update of our debt structure at the end of March. We are on slide 19. First, let me recap that, our latest debt transaction. We issued a new bond of EUR 650 million in February. A nd we have repaid, as a consequence, the bond of EUR 380 million expiring in March. We also signed a EUR 600 million sustainability-linked backup revolving credit facility for rating purposes. As a result of the new bond and the repayment, our liquidity was above EUR 600 million at the end of first quarter. Looking forward to our maturities profile, we have a bond expiring next year of around EUR 500 million. A nd some banking lines in the second half of this year that can easily roll it over in the banking market. Looking at the cost of debt, it was at a level of 1.4%, basically in line with the level that we reported for the full year of 2023. Nothing new about the current composition of our debt as it is almost unchanged with 92% fixed and 8% floating. Operator, it's the IR here. We are now ready to take questions from investors and analysts. Thank you. 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 John Campbell, Bank of America. Please go ahead. Yeah. Good morning, everybody. Thanks for taking my question. I've got three, if I can. My first one is related to basically the news of the day, and I wanted to know if you had a preference in terms of order for debt, equity or hybrids, when you go to hypothetically repay a bridge loan, and what's your hybrid capacity? Second question is, I'm interested in 2i Rete Gas's RAB value, so the gas distribution. And the last one would be, is it fair to say that if there is any hypothetical transaction, you would expect EPS accretion or dilution in the following years to come? Thank you. Regarding your question, I notice that you don't have any question on our results at all. I mean, actually, I told you when I opened the conference call that we have limited capability to respond, with close to zero. I would rather prefer at least one questions on the result but that's fine. Well, you know, regarding what we have said about debt equity and equity-like, so hybrid position, the objective is once that we will have the details of the of a potential transaction, we agree on the details, we will structure the ratio between debt equity and hybrid or hybrid in order to keep it the same and maintain the same credit rating profile. That's for us. It's of utmost importance to keep that. So we will do it, a combination that will be as efficient as possible in terms of capital allocation. We will do it in order to, as I said, to keep the credit rating profile. You also ask, which is our hybrid potential capacity? Honestly, we didn't have any hybrid instrument issues as of today, so that you, you can find yourself the answer. Second question, if I'm correct, you ask which is the RAB of the 2i asset? What I, I can tell you is what has been our estimation, based on which we submitted the non-binding offer to the shareholder of 2i Rete Gas. Our estimation is that at the end of 2023, 2i Rete Gas RAB is around EUR 4.9 billion. That is our best estimation that has been calculated on the tariff that, as you know, the regulator published. A nd recently the regulator published the tariff for final tariff for 2023 and provisional tariff for 2024. So based on that, we made our assumption. The third one question is to give you numbers, we are not in that situation. We have no doubts at all that EPS will be accreted for the company and for the shareholders. We have no doubts at all. Okay, that's clear. Thanks very much for taking those questions. Next question, please. The next question is from Javier Suárez, Mediobanca. Please go ahead. Hi. Good morning, all, many thanks for the presentation. Two additional questions on 2i Rete Gas, and then two questions on the numbers. On the transaction that you have announced, the intention to present a binding offer. T he question is much more philosophical than financial is how that compares with the options that you have within the company. So in recent business plan, the company present interest in CapEx planning in Greece diversification opportunities on the waste business in Italy. A nd also the tenders, while suffering a significant delay, were also there as an option. So how does compare this opportunity with other opportunities that Italgas has on the table? And if as a consequence of a successful presentation of a binding offer, you may reconsider those any of these option and even financing partially the operation with some disposals. That would be the first question. The second question is, you have been making a comment that for, for the company to maintain the credit rating is very important. So can you share with us, which is the key multiples that you are looking at, while, while making that, while considering the stability on the credit rating? So it is fair to say that the FFO versus net debt has to be between 13%-15%, and the net debt to RAB below 70%. Is that a fair assumption? Then the third question is on the numbers. It is really interesting to see the company continue seeing showing capacity to reduce the cost base. The question for you is, do you see any, a re you experiencing any benefits from the implementation of artificial intelligence into the company? Or how do you measure artificial intelligence impacting or even accelerating your capacity of making the company even more efficient? And the final question is on Greece. Can you share with us your latest thoughts on the capacity of Italgas to improve the profitability of your activities in Greece? And which are the, which is the level of profitability that Greece has, as we speak, and the potential that you see in the next two to three years? Thank you. You announced three questions, you did four questions. B ut that's fine. We will, we will pass that. At least you introduced two minor, let me say, second questions on the, on the results. First question, then the second will be answered by, by Gianfranco. First question is, as of today we don't see any impact, and honestly, we don't see any impact on the other opportunity that we have. Greece is a well-established plan for the next seven years. We know exactly the numbers of investment. We know what is needed in Greece, so there is no, let me say, change in our plan to change. There's no plan to change what we have already announced. That is the plan also linked to the question number four, that I will come back. Regarding the water, again, that's an important opportunity for us to become a network operator. We have already demonstrated that we can make synergies between gas distribution and water distribution. We have demonstrated in the area of Latina, where we have combined intervention by our gas DSO and by the water DSO. We have in front of us, in the water sector, a challenge that is the implementation of the funds that are coming from the National Resilience and Recovery Fund, so it's quite important that we accomplish that. We have the clear goal to reduce the leakages. So again, the plan has not and will not change. The acquisition of 2i Rete Gas is an incredible opportunity to consolidate the sector and to be efficient, and to introduce digital stuff that we have been introduced in our network. A nd that is going, let me say, in parallel with the third question. So I will anticipate third and fourth question, and I will let the credit rating evaluation to Gianfranco thereafter. What we think is that our ability to reduce cost is clear. We have reduced costs for 29 quarter, so it is evident how good we are in reducing cost, and that is thanks to the digital transformation we have significantly spread all over the company. And you are right, our next and very close frontier is the artificial intelligence. You can apply artificial intelligence to your business processes only if you have a significant number of data and digital processes. And that is our frontier that we are going to get in the next. I will not say years but in the next months. And we feel that a second wave of cost reduction will happen in the next years to come, as significant as the one that we have already demonstrated to you in these past seven years. So it's true. I mean, artificial intelligence has become. We are working on that. It's ready. We have already some implementation that are probably basic artificial intelligence, but still, that's a good example in which we can, thanks to the data, thanks to the digital stuff that we introduce, we are probably the only one in Europe, as a DSO, that is able to introduce massively the artificial intelligence in our processes. Regarding Greece, we told you last during the presentation of last strategic plan, that we have an ambition. A nd the ambition is to bring the profitability of Greece at the same level of the Italian company. We are on that trajectory. We are moving quite fast. I mean, all the experience that we have gained in Italy and we are moving to Greece is helping us to move faster than what we have done in Italy in the past years. We are not yet there, of course. It will take us another, let me say, 2024- 2025. If I have to set my target, is that by the end of 2025, Greece should be at the same level of the other Italian companies. We are confident that we will able to do that. Again, the artificial intelligence can boost also Greece in moving in that direction. So we are also happy about that, the result that Greece is bringing to us in a very short period of time. B ecause imagine it's a little bit more than one year that we are dealing, and we are managing fully the companies. We have already achieved significant milestone ahead of our expectation. So I think Greece will soon be at the same line of the Italian profitability, in terms of the Italian company, in terms of profitability. I leave the floor for credit rating comments to Gianfranco. Yeah. Thank you. Yes. Talking about credit rating, first, I would like to make a statement on the fact that for us is not just a matter to have, let's say, a single level of rating flag. B ut also to have a sustainability profile for the cash flow of the company in terms of cost and also flexibility to be able to be on the market in the upcoming years. So let me say that we have different rating agencies. We are rated, as you know, by two of them, Moody's and Fitch. The other company, the target is rated by two of them, Moody's and Standard & Poor's. So the target rating will be a combination of the, let's say, judgment made by these agencies based on a variety and multiple parameters. The priority between these parameters is that the main, let's say, driver and my statement is based on the fact it is common between the three agencies, are the ratio based on the Funds From Operations to net debt. As you know, we were, at the end of 2023, below, slightly below 15%, and the threshold to maintain the rating is 10%. So you see, we have plenty of space on this parameter that is common to Standard & Poor's, Moody's, and Fitch. There are also difference between the three agencies, and in particular, Fitch has also another parameter that is the leverage or the net debt over RAB. And the target level for Fitch is between around 63%. At the end of 2023, we were above 64%, with the trajectory in our business plan to go back to land back to a level below 63%. I have also to add that in a combination like the one that you mentioned, it is also important to analyze the composition of the cash flow. And in this situation, if everything will be completed, we will have a refocusing on the Italian regulation that is valued more by the rating agency. So we expect to get some headroom, some flexibility also on the parameter net debt over RAB, gaining some, let's say, points over the current 63%-65% or 66%. Next question. The next question is from Fernando Garcia, RBC. Please go ahead. Good morning. I have one question about the deflator. Could you please explain if the process of measuring by ISTAT has changed, and what are these changes? And also that you said in the presentation that ISTAT could do the same in 2025, and that ISTAT could revise the whole time series. What could, what do you think could be the implications i f ISTAT do that? Thank you. What happened is ISTAT changed the series of calculation that were not consistent with the previous one. And that's the reason why the regulator is intervening in order to align the calculation of the deflator for 2024 to be applied on RAB of 2023 in line with what was done before. So it may happen again? I would probably say yes, but that is the reason. So the two point that we raised over the regulator is that ISTAT changed the series and they were not consistent with the previous one, and that's led to the deflator to be calculated at 3.8%. Regulator understood the problem, intervened, and went back to the old series, and the deflator went back. The new deflator is 5.3%. That to me is also consistent with the fact that, because of the delay, we are getting now what somebody else has already got in the past for the situation of inflation that we recorded in 2022 and the initial part of 2023. Next- I think it's clear. Next question, please. The next question is from Stefano Gamberini, Equita. Please go ahead. Yes, good morning. It's Roberto Letizia, actually from Equita, because Stefano is not showing, so I will take the question. On the results, maybe very rapidly, what would be the positive impact of the higher deflator on results versus what you- Roberto, sorry, it's Anna Maria here. Yes. Can you, can you speak a little bit slower? Lower the volumes, please. Yeah, I take the phone. Thank you. It should be, should be better. Yeah, no worry. It's my fault. Sorry. So on the results, actually, very rapidly on the RAB deflator, which is higher than what you applied in the number, what's gonna be the benefits on results in the first quarter, just to have a comparison? Then, on the energy efficiency side, what would—what have been the change year-over-year from the expected lower contribution of the Superbonus activity? And regarding the Superbonus, is there any risk on your side that you envisioned from the extension of the validity of the fiscal credits from four years to 10 years? What kind of risk and impact do you see on that side? While on the potential deal, if you allow me a question on that, but would this operation and the revision of the financial structure, including potential equity, would eventually call for revision, for example, of the dividend policy of the group? Or do you see this dividend policy not being part of remaining 4% growth and 65% payout, or do you see anything on this? And perhaps if you can tell us if there is any potential antitrust issue on the concentration of the business from such a deal and potentially some remedies or in terms of disposal which would reduce the overall size of this deal. Thanks a lot. Okay. Regarding the first point, I think what we can tell you is an initial evaluation that we have made. I can give you the impact on the overall here is around between EUR 12 million-EUR 15 million overall on the year-end, on the full year. So that is. And it's going, I mean, if you want to get the quarter, just divide it by four. That's very simple. Superbonus, what we recorded in the first quarter of 2024 was a small Q coming from 2023. So something that was not closed by the end of 2024 has been converted into the 70/30 model. Very small amount of money. And so let me say, we expected just a drop to zero. It was a little bit higher, and that is mainly due by the, by some of the activities were, were not completed by 2023, and they was changed into the 70/30 model. And so I'm going to respond, and that is attached to the third question. Based on the information that we have today, the change from four years to 10 years depreciation, let me call it in that way, is-- should affect only the, im-- let me say, the cost that we, that anyone would, would account for 2024. So for us, it's going to be extremely minor effect on our, on our, profit and loss and financial, especially on financial side. Going to the two questions relevant to the potential transaction, we are not going to change the dividend policy at all. I mean, dividend policy will remain there, also because we have been able to demonstrate that 65% is the right balance between shareholder remuneration and the capability of the company to grow, and the fact that we have announced this potential deal, it's a clear demonstration that we have been throughout this year. We've been able to keep the possibility to grow. So I don't expect the dividend policy will be changed. I'm expecting the 65% will continue to be higher than 4% as a floor. So I'm expecting that shareholders will be more than happy to stay on the same dividend policy. Regarding the antitrust, as you know, if we will arrive to a binding agreement then we will submit this agreement to the necessary approval. Golden Power, one side, and on the other side, the antitrust, is the Italian antitrust, so there is no European antitrust evaluation, so only the Italian ones. We will see. I cannot tell you about what is going to happen. I mean, I'm not in the antitrust. So antitrust will make their own evaluation and will tell us what will tell us their outcome. So I cannot anticipate. There will be an antitrust evaluation? Sure, there is no doubt about that. All right. Thanks a lot. Next question, please. The next question is from Alberto De Antonio at BNP Exane. Please go ahead. Hi, good morning, and thank you for taking my questions. First, a couple of questions on results, and then regarding the transaction. On results, just to clearly understand the impact of the revaluation of the deflator, you have that in the first quarter, the impact is EUR 14.6 million. So if you update it to the new number, I guess it's going to be like between EUR 3 million and EUR 5 extra million this quarter, and I guess also in the following quarters. And also regarding the cost of debt, and this quarter has been 1.4%, but you have issued some debt. How do you see the cost of debt at the end of the year, if you can say so? And then regarding the transaction, do you have any visibility on the timing of the transaction and when the exclusivity period is going to end? And if then, target 2i has any change of control clauses on the debt, and if you have any visibility on the cost of debt of the target. Thank you so much. Actually when, [actually that contract welcome]. Sorry, what I did not fully understood is the first question. So can you repeat it so I can- Yes, yes. To make it, if you can make it simple, so I can... Yeah, just to understand the impact of the deflator. So, on your presentation is EUR 14.6 million in this quarter, and I guess that this is calculated with the 3.8% deflator. So, for this quarter, you have a potential upside of between EUR 3 million and EUR 5 million. Is that correct? Yes, correct. Yes. Okay. No, sorry. I mean, sorry that I missed your question. Regarding the cost of debt, at the year end, maybe Gianfranco, you can tell if there are any differences in respect of today. Let me say that we expect a slight increase, compared to the current 1.4%. Also, because we have two loans expiring in September that were at very extremely competitive rates and will be refinanced in the current market. So let's say 20 basis points- 30 basis points no more than that, in terms of average because the two loans, I'm talking about the marginal cost, so the average will be more or less slightly above the current level. 1.5%, yeah? Yeah. That it will be our best at the end of the year. So then you do the average, and of course, you will see that will be not very far from... On the target, there was the other question about- Yes. The cost of debt based on public data. We, we have calculated an average cost around 2%, mainly based on the bonds that are in the market. Going back to your, your question, first question about transaction timing exclusivity is going to be few months. I mean, we want to be as fast as possible, I mean, to go through the data. I mean, we know the business very well. I mean, we are industrial operators, so we know exactly the business, so we should be very quick in going through the due diligence. And therefore, I'm expecting that this exclusive period will be relatively short, let us putting together a nice binding offer. Okay, thank you. Next question, please. The next question is from Davide Candela, Intesa Sanpaolo. Please go ahead. Hi, good morning, gentlemen, and thank you for taking my questions. I have just two. The first one is a clarification on the energy efficiency business. Of course, there is a drop related to the expired incentives. I was wondering, you reported close to EUR 0 million EBITDA in the quarter, and I was wondering if it's just about operating leverage over some one-off costs, just about to understand the potential evolution throughout the year for this business. The second one is on water, it is more broad, and I was wondering if you can share maybe your view about the sector and if sooner or later there will be or not a consolidation. This maybe will be sensitive for Italgas in the sense that could be relevant to become a regulated operator, both exposed to gas distribution and water. Thank you. On the energy efficiency, as you can understand, I mean, you're right, there was a significant drop, close to 90% of the activities in the Superbonus. In the same time, our fixed cost more or less remain the same. So that's the reason why you saw a significant drop in the EBITDA. We expect that throughout the year, we should recover part of that marginality or profitability if you want, because we will have other activities or other revenues that will enter. I mean, we are focusing and we have been focused since the beginning of the year to move and get new contracts on the energy efficiency, e ither at industrial level or, let me say, public administration or large condominium level. I n order to replace, o f course, we will never able to replace the, the size of the, of the revenues, coming from the Superbonus. A nd and to recover part of the profitability. I think most of the operator will be, are in our condition where fixed costs are the ones that were, last year with the Superbonus. But I mean, we, we are very confident that with the, that are mainly, persons, so, mainly, let me say, our personnel. And, and we feel that our personnel will be the driver to bring the energy efficiency with the profitability and margin that we expect, so in the range of 18%-20% EBITDA. Our value are the person that are in the energy efficiency company, that are working very hard to bring new new activity inside the company. A nd I'm extremely confident that they will be successful. On the water side, we are. I mean, you talk about consolidation. I start my this conversation with the consolidation in the gas. We've been waiting 12 years, and we have seen no consolidation or very limited ones. And I mean, the water sector is very similar, and there is no, let me say, tenders that are on the horizon that will bring consolidation. Our view on the, like you asked me on the water sector, is that, with the acquisition of the Veolia asset, we will very soon demonstrate our ability to be a network operator, not only gas, but the water. We will soon be able to demonstrate that, we can reduce significantly the level of leakages that currently are in the, at least in the companies that we are operating, mainly Acqualatina that is the distribution. We will demonstrate that the digital application of all, the digital application that we will bring into the, into those company will make the difference. And of course, we are ready if there are any consolidation processes that is going to happen, and we will be ready to be there. But I think with the demonstration that we are changing the game in the operation of the water distribution through the digital first and the artificial intelligence second, as I said to Javier before. Many thanks. Next question, please. The next question is a follow-up from Javier Suárez, Mediobanca. Please go ahead. Hi again. I'm sorry, I forgot two additional questions. The first one is on the bridge credit facility that you have signed. Can you share with us how much time you have for the refinancing of these three bridge loans? Is that a year or it's a longer period of time? And the second question: during the presentation, you mentioned that the deal should be EPS accretive. So it is fair to say that doing the math, that EPS accretion could be at high single digits. Do you think that number is roughly correct? Obviously, that is depending on the price that you offer. But doing the math, I think that that should be leading to a number close to high single digits. Any comment is welcome. Thank you. Javier, you are trying, y ou have had you moved from four to six questions. You are the only one. I know you very well, so I, I don't have any problem to answer to you. Now, you are digging into details that we, we cannot share today. So for, for bridge facility, it will be enough... The time will be enough to, to, to get to the closing, if, of course, we will sign a binding agreement to get to the closing and to be fully refinanced with no issue at all. On the EPS accretion, I told you, it will be, there's no doubt it will be EPS accretion. The numbers we will give you when we will know the numbers, and we will be in the situation to disclose those numbers to the market. Sorry for that, but you ask too much. Okay, fair enough. Thank you. Next question, please. As a reminder, if you wish to register for a question, please press star and one on your telephone. Gentlemen, Ms. Scaglia, there are no more questions registered at this time. Okay, so thank you very much to everyone attending. As IR team, I'm available to take any follow-up questions that you might have. Thank you, and see you soon. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephone.