Electricité de France S.A. (ECIFF) Q4 2022 Earnings Call Transcript

Electricité de France S.A. (OTCPK:ECIFF) Q4 2022 Earnings Conference Call February 17, 2023 4:00 AM ET

Company Participants

Luc Remont - Chairman and Chief Executive Officer

Xavier Girre - Chief Financial Officer

Conference Call Participants

Luc Remont

Hello, everyone. Welcome you to EDF Headquarters for this Annual Presentation of our Groups capacity and peculiarly happy because this is my first clip arsenic CEO, that I get to invited you to EDF headquarters. And arsenic you will know, I joined nan group a mates of weeks agone and from time one, it was important to maine that I get successful touch pinch those who embody EDF for partners aliases customers and nan video should intelligibly each time, I was highly impressed by nan level of committedness of our teams and besides their consciousness of work what nan institution is providing successful position of a nationalist service.

And yes, we are up against a number of challenges, and we are addressing them. So erstwhile I joined nan company, nan short-term situation was getting done nan winter, and we still person a fewer much weeks of wintertime to spell through. And I must accent that from time one, I person seen a singular level of committedness among our teams. And this is why we are afloat assured successful our expertise to get done nan winter. And I would for illustration to return this opportunity to convey our teams for their regular efforts.

Today, we are introducing our yearly performance. And earlier our CFO, Xavier Girre presents our results successful item and reply your questions. I would for illustration to statesman by highlighting our main indicators that are nan ground for our capacity and besides look backmost astatine nan highlights for fiscal 2022.

In 2022, atomic procreation successful France came to 279-terawatt hour, that's 81.7-terawatt hr little than successful 2021. Obviously, this owed to little readiness of nan atomic fleet mainly, because of checks and repairs carried retired connected reactor circuits aft accent corrosion was discovered. Stress corrosion is simply a well-known phenomenon. And this intends that we've been capable to trim incidental events and besides optimize our powerfulness procreation schedule. So we made nan astir of that difficult situation. This was an unprecedented business problem, astatine slightest astatine that scale, some for EDF and for nan remainder of nan atomic manufacture sector.

Hydro procreation successful France amounted to 232.4-terawatt hours. This is simply a alteration of 9.4-terawatt hours, compared pinch 2021 owed to historically debased hydro conditions contempt outstanding availability. In nan U.K. atomic procreation amounted to 43.6-terawatt hours, up by 1.9-terawatt hour, compared pinch 2021 contempt nan shutdowns of Hunterston B successful January and Hinklent Point B successful August owed to bully readiness of nan fleet and besides a little engaged attraction programme than successful 2021.

Carbon strength for nan group came to 50 grams CO2 per kilowatt hour, a flimsy increase. So c strength is up 2 grams of CO2 per kilowatt hr from 2021, owed to little atomic and hydro procreation successful France. We tin besides opportunity that successful millions of tonnes our emissions are down. So there's a marginal and impermanent summation of our screen strength arsenic a result. So nan group's worldwide went successful star output was 24.6-terawatt hour, up 18% compared to 2021. Our portfolio of upwind and star projects worldwide reached 85-gigawatt maturation by nan extremity of 2022, compared pinch 76-gigawatt astatine nan extremity of 2021. This is simply a buoyant result, which encourages to proceed investing successful renewable energies.

Now our financial capacity successful 2022, nan EDF Group's EBITDA was antagonistic by minus EUR5 billion, contempt a beardown summation successful revenues supported by energy and state prices. EBITDA is heavy penalized by nan diminution successful atomic generation, arsenic good arsenic nan one-off regulatory measures put successful spot successful France for 2022. These events mentor nan group had to acquisition ample volumes of energy astatine very precocious prices. On nan different hand, EBITDA benefited from nan exceptional capacity of EDF trading, mid-high marketplace volatility and improved atomic procreation successful nan United Kingdom.

Net income earlier non-recurring items amounted to minus EUR12.7 billion, down by EUR17.4 billion. And this alteration chiefly reflects nan diminution successful EBITDA, partially constricted by nan existent financial results and an income taxation benefit. Net financial indebtedness amounted to EUR64.5 billion. The EUR21.5 cardinal summation successful nett financial indebtedness is chiefly owed to nan rate travel generated by operations. At nan extremity of 2022, we had EUR 14.8 cardinal successful nett cash. At nan extremity of 2022, we had EUR14.8 cardinal successful nett cash.

Let maine opportunity a fewer words astir our superior situation. As you know, nan French authorities has launched a simplified nationalist tender connection for nan shares of EDF. The Board of Directors person spoken successful 2022 and issued a favorable sentiment connected nan connection aft taking statement of nan activity and nan findings of nan independent master to deem nan connection to beryllium successful statement pinch nan liking of EDF of its shareholders, arsenic good arsenic OCM bondholders and nan employees.

As of today, nan simplified nationalist tender connection is provisionally closed pending nan determination astatine nan Paris Court of Appeal. On nan situation revenge by number shareholders seeking nan cancellation of nan clearance decisions. So nan French authorities held -- connected February 8, held 95.82% of nan capital, 96.53% of nan voting authorities and 99.96% of nan OCEANE bonds astatine nan closing of nan effort.

As I said before, location person been a number of challenges successful 2022, if you've been keeping up pinch nan group's latest developments, you must beryllium acquainted pinch nan full accent corrosion saga. This has kept america connected our toes for a twelvemonth now.

So I'm now going to reappraisal nan full story. I conscionable want to opportunity that for much than a year, nan institution has been faced pinch a awesome operational situation pursuing nan find of accent corrosion connected immoderate of our reactors. So assessments and analyses person been carried out, and they person enabled nan EDF to place nan reactors that are astir susceptible to nan improvement of SCC, truthful that's accent corrosion cracking. So these are nan [16] (ph) astir caller reactors nan 4 reactors of nan M4 Series and nan 12 reactors of nan 1,300 P4-series.

So nan industrialized curen process has enabled america to enactment connected schedule, and we person up to 43 reactors disposable for production. For 2023, we person decided to proceed pinch nan preventative replacement of pipes successful untreated reactors without carrying retired anterior inspections successful bid to power nan long of outages because our nonsubjective is to guarantee safe powerfulness generation. So preventative replacement is nan adjacent measurement for 2023 and is portion of our business plan, and we are focusing connected nan reactors concerned by accent corrosion cracking. And this will besides beryllium an opportunity to optimize nan readiness of our atomic fleet for nan wintertime of 2023, 2024.

I spent a batch of clip successful nan section successful caller months, and I person seen really overmuch power our teams and our manufacture partners bask erstwhile it comes to addressing that situation of SCC. So we person moved into nan business shape successful nan process of addressing that problem. And location was a very iconic infinitesimal erstwhile nan Sizewell 1 works was connected to nan grid astatine nan extremity of January, that was nan first reactor that was affected by accent corrosion cracking symbolically, that was an important clip for nan company. This was nan first reactor wherever corrosion problems were recovered and it was connected to nan grid erstwhile again.

So nan spot of nan institution is judged by its corporate consequence to specified challenges. And I americium convinced that we person recovered -- that EDF has recovered moving together pinch these partners, nan correct solution to this business hazard. Needless to say, exceptional and urgent efforts person been made and this did not lead america to postpone longer-term efforts to amended our performance. These efforts are continuing. They are ongoing, and they're perfectly cardinal successful bid to successfully meet nan challenges of atomic power, some successful France and abroad.

In particular, successful 2020, we launched nan XL plan, nan extremity being to reconstruct nan highest level of operational stringency and readiness successful nan atomic industry. We're continuing this work, nan XL scheme has achieved nan group goals to a very ample grade arsenic defined successful 2020, and we're going to proceed and widen this plan. So arsenic to further amended readiness of nan atomic fleet. We are besides continuing nan activity connected consolidating nan atomic assemblage generally.

And we've precocious reached a definitive exclusivity statement pinch GE for acquisition of General Electric steam powerfulness activities for accepted atomic powerfulness plants. This transaction intends that EDF tin person much exertion which are basal for nan sustainability of nan atomic fleet, some now and successful nan early successful nan U.K. We're delighted that nan British authorities has decided to subordinate nan superior investments successful nan Sizewell C task and besides nan truth that nan financing exemplary is -- comes distant nether nan regulated asset-based financing model. This confirms that Great Britain trusts nan atomic assemblage has been portion of its power mix, and this is very bully news.

In France, we precocious took a caller look astatine nan almanac and nan costs of building nan scheme connected build 3 powerfulness works shape of loading nan atomic substance is planned for nan first 4th of 2024, and costs of completion is presently estimated astatine EUR13.2 billion. And I would for illustration present to constituent retired that nan task squad and each of our teams and our workforce and partners are moving very difficult together arsenic accelerated arsenic imaginable base successful mind information issues truthful that Flamanville 3 tin beryllium connected to nan grid arsenic quickly arsenic possible.

2022 was besides nan twelvemonth of nan President's reside Belfort, arsenic we saw successful nan film, France is intending to motorboat a caller atomic program. Following connected from this speech, location was a nationalist statement astir [Indiscernible] and EPR2. This began successful October and will extremity connected nan 27th of February. Finally, atomic has been included successful nan European Taxonomy of Renewables. This intends that atomic will beryllium capable to play its domiciled successful achieving nan carbon-neutral goals that we person set.

I'd for illustration to now talk astir renewables. This is an activity that's processing very quickly successful France and besides connected different continents. Our task portfolio has accrued by 12%, arsenic compared to nan extremity of 2021 and now amounts to 85 gigawatts. We person awesome ventures specified arsenic nan upwind turbines offshore of Fécamp and Provence Grand Large, which is simply a floating upwind turbine task and nan first floating task successful France by EDF astatine Lazer. We're very proud for nan -- we've wholly commissioned now nan first offshore upwind turbine parkland successful France of Saint-Nazaire 480 megawatts and besides nan first megawatts person been produced successful nan largest star works successful nan world astatine Al Dhafrah astatine nan UAE.

I'd besides for illustration to opportunity that we've signed a business statement to develop, build and run a hydroelectric works successful Mpatamanga successful Malawi. The power discourse is unprecedented. I spot thing for illustration it complete nan past 40 years. This is existent of nan full of Europe. And successful this context, we person worked intimately pinch our clients, and galore clients person returned to EDF. Our customer statement portfolio worldwide has accrued by 3%. In France it has accrued by 700,000 clients, residential clients. So we person much and much contracts nether marketplace conditions, 2.4 cardinal clients astatine nan extremity of 2022.

However, we besides person clients who person returned who are nether statement pinch regulated income tariffs, and this has had a antagonistic effect connected EBITDA successful 2022, fixed nan very precocious prices connected nan market, we've had to bargain up. As nan businesses 2.5% summation successful marketplace stock astatine nan extremity of December 2022 connected nan guidelines of nan volumes sold to beryllium delivered successful 2023. So business clients trusting us. We are wished to thief our clients to header pinch expanding power prices. We put successful spot measures to support them. We provided them pinch forms to declare their authorities successful position of reimbursement and various measures. We've sent retired postal messages and e-mails to 400,000 very mini businesses, and we've put successful spot a dedicated page connected nan website and a dedicated telephone number to reply our clients' questions.

In services and peculiarly electrical mobility maturation has accelerated pinch 280,000 charging points that person been rolled retired and managed astatine nan extremity of 2022. Our independent subsidiary energies has helped a batch to guarantee amended penetration of electrical mobility successful France. And 2022, 3.8 gigawatt of renewable powerfulness person been connected to nan grid. That's an summation of 18% of connections arsenic compared to nan extremity of nan erstwhile year.

I'd now for illustration to talk astir wintertime and measures to guarantee sensible usage of energy. The authorities and nationalist authorities and each our partners person been very overmuch progressive successful these efforts. The existent business is critical. We person an power crisis. Electricity has go nan attraction of overmuch statement and discussion. And obviously, EDF has been retired connected nan beforehand statement to guarantee that our clients are supplied pinch energy passim nan winter.

I'd for illustration to statesman pinch ENEDIS, truthful which managed to prevention 2.4 gigawatts astatine nan greeting peak, highest depletion time, acknowledgment to a displacement successful nan heating of basking h2o tanks during nan night. This has saved 2.4 gigawatts astatine greeting peak. That's balanced to nan full depletion successful energy of a municipality for illustration Paris. In bid to guarantee amended readiness of accumulation fleet, we person worked connected each imaginable measures opening pinch wide attraction of each facilities, nuclear, hydroelectric, thermal, upwind and solar, which we predicted up of clip and scheduled earlier pinch nan winter. We thief clients amended programme nan energy and state consumption.

For instance, we person Tempo typical connection astatine nan regulated income tariffs, and we besides person consciousness cycling campaigns, which we launched arsenic of nan autumn and been very successful. We statement that depletion has fallen complete nan past month, of course, partially owed to prices. But really, I deliberation that our clients person shown sizeable consciousness of responsibility, arsenic person each French group and person really helped to trim backmost connected consumption, and we person accrued production. We've besides sewage an in-house power redeeming plan, which has meant that we've been capable to trim our power depletion for tertiary sites by 10% successful nan 4th quarter. So acknowledgment to each of these measures, we person managed to header very good pinch nan acold threat that occurred astatine nan opening of nan winter. We are continuing these efforts, but I did want to bespeak conscionable really difficult we person been moving and really successfully successful this area.

Then regarding environmental, societal and governance commitments of nan group. Our commitments are very clear. We person group them out. And this for a agelong clip already. The avoided emissions now is 30 cardinal tonnes of 2030 for our clients, acknowledgment to nan waste of caller innovative products and services and a alteration successful nan perimeter that is now extended to G4. In 2022, we've presented a ambiance solution to our shareholders. The solution was adopted to nan tune of 99.87% of nan shareholders.

Now different remark we made was to person much women successful apical guidance aliases guidance Board. And we person been very successful here, too. Regarding sustainable finance, truthful we issued EUR1.25 cardinal greenish enslaved rumor successful October 2022 to finance investments successful energy distribution. As of nan extremity of 2022, we've sewage EUR10 cardinal of greenish bonds issued, which strengthens our spot connected nan marketplace successful position of greenish bonds. So location you person nan accusation astir our results generally.

But I'm now going to manus complete to Xavier Girrehere, who's going to beryllium talking much astir nan financial results.

Xavier Girre

Thank you, Luc, and bully morning, everybody. I propose that, first of all, we travel backmost to immoderate cardinal figures for 2022. First of all, income 2022, EUR143.5 billion, an integrated summation of 69.4%, acknowledgment to nan marked summation successful energy and state prices, EBITDA minus EUR5 billion, down EUR23 cardinal arsenic compared to 2021, chiefly because nan buyback of ample volumes astatine very precocious prices, because of nan imbalance betwixt proviso and request successful 2022, which was caused by nan simplification successful output, peculiarly atomic because of accent corrosion and nan one-off summation successful nan allocation of 20 terawatt hours nether ARENH.

The nett income is minus EUR12.7 cardinal arsenic agelong pinch nan lines of EBITDA and nan stock of nan group astatine minus EUR17.9 billion. Net indebtedness has accrued from EUR43 cardinal astatine nan extremity of 2021 to EUR64.5 cardinal astatine nan extremity of 2022. Regarding EBITDA, why has location been this simplification betwixt 2021 and 2022?

First of all, atomic procreation has fallen successful France to nan tune of 82 terawatt hours. This is because chiefly of accent corrosion problems, which accounts for minus EUR29.1 cardinal because nan corresponding amounts that we couldn't nutrient had to beryllium bought backmost connected nan marketplace astatine very precocious prices. Then exceptional one-off regulatory measures to limit value increases, but consumers had a antagonistic effect of EUR8.2 billion. And finally, location were favorable value effects, because of nan summation successful prices connected nan market. This contributed to positive EUR8.7 cardinal for France.

If we look astatine nan different main headings, hydroelectric procreation was unusually debased successful 2022, some successful France and successful Italy, and nan effect is estimated astatine minus EUR2.7 billion. I would for illustration to constituent retired that nett procreation successful France was 25 terawatt hours, that shutdown 10.9 terawatt hours arsenic compared to 2021. A [Indiscernible] procreation benefited from a measurement and a affirmative value effect, truthful contributed to positive EUR1.3 billion.

And nan aforesaid is existent for atomic procreation successful nan U.K., wherever location was a affirmative measurement effect positive 1.9 terawatt hours and prices were high, whereas procreation levels were debased successful 2021, and that led to buying connected nan marketplace astatine precocious prices. Trading activities, this was an exceptional outstanding year. Markets are very volatile. And there, location was an betterment of EUR5.2 cardinal arsenic compared to 2021.

Regarding nan remaining results, first all, operating results. EBIT minus EUR19.4 billion, down EUR24.6 billion. This is on nan aforesaid lines arsenic nan driblet successful EBITDA that I've conscionable explained. So I don't deliberation I request to travel backmost to that.

Net results, truthful stock of nan group minus EUR17.9 billion, truthful I've mentioned a number of points regarding operating results, but I would for illustration to constituent retired that location was a driblet successful financial results EUR3.9 billion. This is owed to a worsening of financial markets successful 2022, and this had a antagonistic effect connected nan capacity of dedicated assets, minus EUR5.8 billion. Their capacity amounted to minus 8.5% successful 2022, arsenic compared to positive 11.9% successful 2021.

However, nan existent discount complaint for atomic provisions successful France accrued by 50 ground points successful 2022. And this had a affirmative effect arsenic compared to a driblet of 10 ground points successful 2021. The sum complaint of dedicated assets for atomic provisions amounted to 107.1% astatine nan extremity of 2022 arsenic compared to 109.3% a twelvemonth previously. For information, this complaint is adjacent to 110%, now fixed nan betterment of nan financial markets since nan opening of nan year.

Second important constituent to move retired present is nan taxation charge, well, which will summation to EUR3.9 cardinal successful 2022, a alteration of EUR5.3 billion. This is straight linked to nan antagonistic worth of nan profit earlier taxation of nan French taxation group. So erstwhile non-current items are neutralized, notably antagonistic changes successful nan adjacent worth of dedicated assets and impairment losses, nett existent income is EUR12.7 billion.

Let maine decorativeness pinch a fewer words connected changes successful rate travel and nett debt. The group's rate travel was minus EUR24.6 billion. This is chiefly owed to nan deterioration of rate EBITDA. So minus EUR12.8 billion, arsenic you tin spot connected this slide. So nan quality betwixt EBITDA minus EUR5 cardinal and rate EBITDA minus EUR12.8 cardinal is mostly owed to nan neutralization of nan EDF Trading positions that person yet to beryllium unwound by nan extremity of 2020, which is truthful recorded successful EBITDA without immoderate rate effect for this year.

Conversely, WCR has been reduced by EUR8.3 billion. And this magnitude includes a favorable effect for EDF Trading, which is mostly related to nan simplification successful separator costs successful nan discourse of measurement prices astatine nan extremity of nan twelvemonth and nan mounting up of letters a in installments to switch rate separator calls. There's different favorable facet pertaining to WCR, and that's nan summation successful nan CSPE indebtedness to nan government.

Amid marketplace prices that are higher than those of nan renewable power acquisition obligations, EDF benefited successful 2022 from compensation for nan CSPE, which it will person to salary backmost successful 2023. So nett investments amounted to EUR16.4 billion, up by EUR0.7 billion, compared pinch 2021. This fig includes an summation of EUR0.8 cardinal for EDF Renewables investments. Despite nan taxation income that I elaborate earlier, we're seeing present a rate outflow that was made successful respect of income tax, mostly owed to nan profits of EDF Trading and Edison excluding nan French taxation consolidation.

Lastly, nan superior summation successful April 2022 came to EUR3.2 billion, nett of nan rumor and redemption of hybrids represented a publication of EUR2.3 billion. So nett financial indebtedness came to EUR64.5 cardinal astatine nan extremity of 2022, compared to EUR43 cardinal astatine nan extremity of 2021.

Thank you, and now I'll springiness nan level backmost to Luc Remont.

Luc Remont

Thank you, Xavier. Now let's move to our 2023 objectives. As I'm judge you understand immoderate nan institution does seeks to move astir nan group's EBITDA by returning atomic procreation to nan discourse of continued precocious prices. So arsenic to execute an EBITDA level that is importantly higher than 2021. So we person group a nett financial debt-to-EBITDA ratio target of little than aliases adjacent to 3 times and an adjusted economical debt-to-EBITDA target of little than aliases adjacent to 4.5 times. Our privilege is to move EDF around. And I americium convinced that each of nan actions that are presently underway will carnivore fruit. And I tin already reference nan successes that we will execute successful 2023.

Firstly, atomic generation, acknowledgment to our full institution coming together, and nan activity of our business partners, this has enabled america to place and reside nan problem of accent corrosion connected a number of reactors. So we will proceed that activity successful 2023. And for 2023, we are confirming nan atomic procreation scope of 300-to-330-terawatt hour. And that's a gradual exit from nan accent corrosion cracking crisis.

In addition, we're besides seeing nan first results of nan STAR 2025 program, which intends to amended nan capacity of nan atomic fleet connected a semipermanent basis. What is our priority? Well, strengthening that privilege successful satisfies our customers complete nan semipermanent pinch nan astir broad scope of offers and services connected nan market. We are expanding our customers' expertise to devour little energy, amended power and besides do it astatine nan correct time. So amid nan power crisis, we're supporting our customers, beryllium it nan individuals, industrialists aliases craftsman pinch suitable solutions to optimize your energy bill. And this is successful statement pinch our tone of work and innovation, we will proceed to prosecute our plans to decarbonize industry, peculiarly done Dalkia.

From nan manufacture constituent of view, we will person awesome successes pinch nan renewable power projects that I mentioned earlier, specified arsenic nan Fécamp offshore upwind farm, nan Provence Grand Large floating upwind workplace and nan Lazer PV plant, which is nan first floating PV plant. We will beryllium making awesome advancement connected awesome world projects pinch nan impairment of nan Nachtigal reservoir successful Cameron. Similarly, successful nan atomic assemblage started arsenic for Flamanville 3 are expected astatine nan extremity of nan year, and we will soon beryllium capable to look guardant to nan integration of GE Steam Power's activities into nan EDF fold.

Finally, distribution web will much than ever play a cardinal domiciled successful nan integration of renewable energies and nan acceleration of electrical mobility pinch a continued acceleration successful connections. With a position to raising nan Group's financial trajectory person decided, together pinch nan Executive Committee to motorboat 4 operational excellence projects astatine nan opening of nan twelvemonth that I'd for illustration to stock pinch you.

Our first task is called metallic time. It's a well-known building that we use. We are referring to nan existent moving clip of nan instrumentality and everybody is affected, nan technicians, employees, engineers, we request that metallic clip to beryllium optimized. It's important for america for our partners. So we person an operational task nan extremity of which is to optimize intelligence clip for everybody. So we're trying to amended nan company's operational performance.

Second project, we activity to accelerate and industrialize integer technology. We person a batch of integer strength, and we request to ramp up. We request to return things up a notch. And truthful we person a 2nd task that will attraction connected integer transformation. And hopefully, successful a mates of years, of course, there's going to beryllium a low-lying fruit. But hopefully, successful a mates of years, we will execute industrialized and integrated integer capabilities truthful that we tin each activity together efficaciously and efficiently pinch our partners connected each of our operations.

Project number 3 has to do pinch skills. The extremity is to attraction connected nan sizeable requirements of our sector. In caller weeks, I person noticed that we person nan scope. We person nan expertise. The institution has beardown expertise, unsocial expertise successful a batch of ways, but we request more. We request to upscale nan full assemblage successful bid to meet our early challenges. And truthful nan 3rd task will activity to amended and upgrade our accomplishment set.

Finally, nan past project. Well, nan past task benignant of summarizes nan first three. And nan extremity is to negociate our operational performance. And Xavier successful complaint of that project, by nan way. And his extremity will beryllium to fortify nan group's performance, cultivate this performance-driven civilization and make a amended level of rate travel successful bid to guarantee nan group's financial sustainability. So 4 privilege projects that will support america engaged passim nan twelvemonth and beyond.

And successful 2023, we're hoping to spot results from that difficult work, and this will thief amended our operational capacity successful nan adjacent fewer years. We activity to reconstruct procreation capacities to a precocious level and amended our operational improvement. This will alteration america to prolong nan level of finance basal to grow. Our nonsubjective and our outlook for 2023, therefore, is to execute an operational turnaround truthful that we tin look nan early of nan group pinch confidence.

Thank you very overmuch for your attention. And Xavier and I and nan remainder of nan executive Board members are opinionated by to reply immoderate questions you whitethorn have. Thank you.

Question-and-Answer Session

Operator

[Operator Instructions]

Unidentified Participant

Hello. Thank you for your presentation. I correspond [Lizikou] (ph). I person a mates of questions actually. First of all, regarding your targets. You person introduced 2 different ratios. Two ratio targets for nan twelvemonth to come. So wherever do you guidelines coming comparative to those ratios, truthful we request to -- that we will understand amended really acold you request to -- really overmuch further you request to work. And also, what astir EBITDA, wherever do you guidelines there?

And could you springiness america your sentiment regarding nan measure to nationalize EDF, which was adopted by nan National Assembly and besides interest among NPEs regarding RTE, NRT's capital? A number of NPEs person expressed interest astir that?

And nan 3rd question, marketplace design. There's a full chat astatine nan infinitesimal regarding marketplace design. At EU level, nan consultation process conscionable came to an end. The French authorities advocates a batch of CFD peculiarly for EDF and EDF hydro. So what do you think?

Luc Remont

Thank you very much. Maybe Xavier tin return nan first question, and I will reply nan past two.

Xavier Girre

Regarding nan ratios. [Indiscernible] targets, nett financial debt-to-EBITDA ratio little aliases adjacent to 3 times. That's nan target for 2023. And nan latest connection was astir 3% aliases somewhat higher than 3%. So we activity to amended that ratio comparative to our first guidance for nan extremity of 2023. So it doesn't really make consciousness considering nan truth that EBITDA is antagonistic astatine nan extremity of 2020.

Regarding to nan adjusted economical debt-to-EBITDA ratio. Our target is to execute 4.5 times, somewhat little aliases adjacent to 4.5 times. And for nan extremity of 2023, our guidance was 5 times approximately. So we activity to amended our financial guidance comparative to nan guidance we issued astatine nan extremity of past twelvemonth regarding our target for nan extremity of 2023.

As Luc rightly said, we activity to amended our EBITDA. We expect EBITDA to importantly transcend our EBITDA successful 2021, which came to EUR18 billion. So we will execute importantly much than that successful 2023. And particularly, this will beryllium driven by a gradual return to atomic procreation standards successful France amid beardown and amid precocious marketplace prices. And for 2023, regulations do not see exceptional measures specified arsenic nan measures adopted successful 2022.

Luc Remont

Thank you, Xavier. Regarding nan remainder of your questions, [Indiscernible]. So French Parliament is responsible for nan legislative choices that they make, they already sovereign authority successful that regard. In bid to -- successful bid for nan authorities to go nan sole shareholder of EDF, they don't request to legislate nan authorities -- arsenic acold arsenic nan authorities is concerned, there's a simplified nationalist tender connection underway. They activity to summation their shareholding to 200%. They do not request parliament to legislate to execute that goal. And nan authorities does not scheme to alteration nan group scope of operations.

Of course, nan owners will beryllium connected parliament to find what they want to legislate connected aliases not. But nan government's plans are clear and nan narration betwixt nan institution and its governmental shareholder is clear arsenic good irrespective of nan legislative agenda. This is still early days, nan European Commission has started a consultation process. The answers were submitted only past week, of course.

In position of marketplace design, caller marketplace creation will request a statement astatine nan EU level. That's really marketplace rules activity connected European markets specified arsenic electricity. That's really things work. As a company, obviously, we activity to comply pinch nan authorities and beryllium portion of that EU energy market, because that's a bully point for nan French marketplace regarding this winter. The truth that it's imaginable and easy to waste and acquisition energy betwixt EU countries. There was a driblet successful airdrome successful France and different countries successful EU were affected by nan state crisis.

Now nan EU marketplace intends much elasticity and each EU national is benefiting, including French citizens, because we person nan action to spell fetch energy wherever we tin find it. We tin do it quickly, and we tin do it each nan time. So of course, we request to supplement that marketplace during parliamentary auditions, I had an opportunity to rumor an sentiment regarding nan regulatory system that applies successful France via nan RAEMH. Some group called it astatine nan extremity of its [Indiscernible]. But we request to find a measurement done those discussions, and we will beryllium portion of that effort, and we activity together pinch French authorities to find nan champion imaginable measurement forward.

So we want to springiness nan champion outlooks imaginable for nan French marketplace and French consumers, truthful they tin person entree to competitively priced electricity. Electricity markets person been very difficult deed by fluctuations successful state prices. And we want to person a amended semipermanent outlook. So that's our extremity successful nan people of these discussions.

Unidentified Participant

Thank you very much.

Unidentified Participant

Hello. I’m from Reuters. Could you springiness america immoderate thought astir your finance trajectory complete nan coming 2 to 3 years? And my 2nd mobility relates to nan [Indiscernible] task that's now being dropped, but which besides circumstantial curen for non-renewable energies, nan thought being to accelerate EDF's engagement successful renewable energies. Do you deliberation it's going to beryllium basal to return a caller look astatine this activity cluster to debar falling down EDF competitors for renewables?

Luc Remont

Thank you very overmuch indeed. I will statesman pinch nan 2nd question, perhaps. You said yourself that nan [Indiscernible] task has been dropped. This has been confirmed by respective members of nan authorities already. And we are now defining a roadworthy map, nan Prime Minister wrote to maine correct astatine nan opening of my appointment, asking maine to nutrient a draught roadworthy representation for nan first half of this year. We're engaged moving connected that. That roadworthy map's purpose is to create for each of nan business lines of EDF, which are basal for nan group's success. And I deliberation I made my constituent very clear earlier accepting nan job. The group has to person diversified production, a diversified distribution grid and meet clients' needs. We are going to proceed moving connected nan roadworthy representation pinch those goals successful mind.

I would conscionable for illustration to opportunity that regarding nan circumstantial mobility that you asked astir stepping up nan improvement of 1 different type of activity. This is thing that's already been taken connected committee successful our improvement exemplary their activities wherever we activity pinch partners. So we don't needfully request systematically to person 100% ownership of nan assets that we're developing. There are tons of activities wherever we person partnerships, and that's normal improvement modality for a group for illustration ours, and it besides makes a group for illustration ours flexible, its modular business practice.

And this is portion of nan decisions that we've taken erstwhile we're asked astir nan legislative aliases regulatory model that whitethorn use to our superior and to our assets elasticity is normal business believe everyplace and we're already applying it to a ample number of our activities.

Regarding nan finance trajectory, I don't know, possibly Xavier would for illustration to answer. We can't really springiness you circumstantial figures for nan coming years, because -- but this is going to beryllium portion and parcel of this roadworthy representation we're moving on, but you've heard nan government’s connection and nan connection made by nan French President, who said intelligibly that important finance is going to person to beryllium made, peculiarly nuclear, but not only successful nuclear. Xavier?

Xavier Girre

Yes. Perhaps I could conscionable travel successful to supplement what you've said, Luc. I'm not going to springiness a fig astir 2023, 2024 investments. But I deliberation we request to support successful mind that nan EDF is astatine a turning constituent successful its history, wherever important investments are going to person to beryllium made, peculiarly improvement investments. If you look astatine nan 2022 figures, nan existent figures, which I deliberation are important for coming years. We invested EUR6.4 cardinal without nan income plan, that's nett investment. Of those EUR7.5 cardinal were investments for attraction and EUR8.9 cardinal were improvement investments.

Aiming to make caller activities, caller capacities. This is renewable energy, for instance. So nan connections of caller renewable power producers done nan energy's grid, caller atomic capacities. So EUR7.5 billion, maintenance; EUR8.9 cardinal for existent improvement full EUR16.4 cardinal successful 2022. And this, I think, is telling for nan existent and early trends.

Unidentified Participant

Thank you, Xavier.

Unidentified Participant

[Natalie, AFP] (ph) My first question, could you put a fig connected nan costs of nan strikes successful nan autumn. And do you person immoderate estimate for nan effect of strikes against nan government's status plans astatine nan opening of nan year? What do you deliberation astir nan betterment of nan ISRN that's been suggested? And my 3rd question, what astir 2035, nan nonsubjective group for EPR 2, Mr. Remont said 2034 astatine 1 point, 2035 and 2034.

Luc Remont

Regarding nan costs of nan strikes successful nan autumn, I wasn't present then, and I don't person nan figure. Regarding since nan opening of nan twelvemonth and imaginable costs of strikes. I'd conscionable for illustration to opportunity that isolated from immoderate very circumstantial and constricted cases societal speech is continuing wrong nan institution and societal disruptions don't interest conscionable EDF and hasn't had a important effect connected our procreation capacity and has not negatively impacted our expertise to proviso nan state pinch electricity.

And I deliberation that each of our workforce person acted successful a responsible manner. They are entitled to strike, but astatine nan aforesaid time, they person borne successful mind nan truth that our institution has a nationalist work mission. And I cognize that they're very attached to ensuring that we tin fulfill that mission.

Regarding nan ISRN reform, I can't -- nan authorities wants to alteration nan building of an authority that monitors and controls EDF. But I can't really person an sentiment astir really nan authorities wishes to shape that activity. I understand what nan government's determination attraction is, but I can't, obviously, springiness an sentiment connected that for evident reason, almost by meaning -- sorry, EPRs 2035.

We person difficult astatine work. There's a batch to beryllium done. We request to activity connected this. There's a nationalist statement underway. That's of immoderate significance. And there's a batch of activity up of america to make judge that each of nan business atomic assemblage tin person a boost and beryllium shored up truthful that we tin meet that target. We've understood what nan target is, and we will do everything successful our powerfulness to make judge that we meet it.

Unidentified Participant

Could you springiness america a fig connected nan 2nd shape of nan [Indiscernible] operation?

Luc Remont

The first shape is over, but we've been waiting for nan 2nd one. We person told clip and clip again, it's going to happen. We're still waiting. I don't cognize if we person a fig for nan 2nd phase, do you person a fig for that?

Xavier Girre

We'll person a look. I can't springiness you a fig disconnected nan apical of my head. I'm sorry.

Unidentified Participant

[Indiscernible]. I'd for illustration to cognize whether you could show america whether nan -- erstwhile nan study connected nan 8 further EPRs feasibility will beryllium concluded? And tin you pass connected capacity nonsubjective that were for installed renewable power capacity for nan extremity of this year? And what astir nan backing for nan six EPRs?

Luc Remont

We were told astir nan leeway are savings account, a exemplary a spot for illustration nan 1 that's been utilized for Sizewell pinch nan guidelines plus -- regulatory plus model. I can't springiness you a fig connected nan feasibility study for nan 8 further EPR powerfulness plants. We've already sewage a batch of activity for nan 6 first ones, and that's evidently our priority. I don't deliberation that we person a fig regarding our installed capacity for renewable energies astatine nan extremity of 2023. But if we person a figure, we will pass it to you.

And your past mobility a batch of activity remains to beryllium done connected nan financing arsenic well, obviously. I'm judge you will understand that this is related straight to changes successful European marketplace design. It's nan full business exemplary of energy operators, including EDF that will beryllium affected aliases whitethorn beryllium redefined depending connected nan marketplace creation rules that are agreed. Obviously, each of that will person to beryllium taken into relationship erstwhile defining nan financing exemplary for coming -- upcoming EPR powerfulness plants.

Unidentified Participant

Could you travel backmost to nan [Indiscernible] operation?

Xavier Girre

Just to punctual you that nan costs estimate for nan programme is EUR50.2 cardinal for 2014, 2025 and nan 2nd shape of nan programme 2022, 2028 is estimated astatine astir EUR33 billion.

Unidentified Participant

I person 3 questions. I'd for illustration to cognize whether you see that your EUR64.5 cardinal indebtedness is sustainable? Or do you consciousness you person to standard it backmost successful nan mean term? If so, do you deliberation your activities successful Italy, Edison are portion of your halfway business? Or could they beryllium sold off?

And nan 3rd mobility relating to Sizewell. The thought of bringing successful different investors to thief finance this task is mentioned. Given nan costs overruns and besides schedule overruns, what benignant of finance investor would beryllium prepared to return connected that benignant of risk?

Luc Remont

Regarding sustainability of nan debt, I deliberation Xavier will beryllium capable to reply pinch much -- much specifically than I can. Clearly, nan 2022 indebtedness is simply a legacy. It's related to nan accent corrosion, business problem that we've been confronted with, and that bequest is simply a precocious level of debt. I deliberation our expertise to get to procreation backmost connected watercourse and to amended fleet readiness complete nan coming years will thief america to trim nan indebtedness level. Of course, nonsubjective complete nan semipermanent is to stabilize it and to gradually trim it truthful that we person much leeway for early investments. So that's nan first question.

The 2nd question, I noted that you mentioned Edison, but you could person mentioned others. Our world activities person contributed to a very ample grade successful 2022 to nan group's resilience. And I deliberation it will beryllium a correction to see that conscionable because successful 1 year, France was confronted pinch a awesome business problem, which has now gradually been overcome, but we should deprive ourselves of business activities successful different geographies, which took a agelong clip to group up. I've been pursuing Edison for immoderate 20-years already.

So aft a agelong time, these business activities jewels successful nan group's crown, I deliberation it would beryllium a strategical correction successful bid to header pinch a short-term problem related to an business problem that's gradually being sold that we should nary longer proceed to create nan group pinch high-level capacity activities elsewhere, and they've contributed to nan resilience of nan group successful 2022.

Regarding Sizewell, activity is underway. EDF is delighted that nan British authorities has taken nan determination it has to put successful nan project. And we are moving intimately pinch nan British government. Work is underway, arsenic I say, successful bid to specify nan finance and investor profiles that would thief america move towards nan last finance decisions for this project. But it's excessively early successful nan time to opportunity much astatine this stage.

Xavier Girre

Regarding our debt, needless to say, our indebtedness level is thing that we're taking very seriously, arsenic Luc Remont rightly said, from nan financial standpoint, that's our bequest beyond 2022. There are 3 things that I would for illustration to reference successful bid for america to control, stabilize and gradually deleverage. First of all, business performance, successful particular, our procreation level. Secondly, operational excellence is different awesome driver. Luc has already referenced nan task that he has initiated to thief nan group further amended its operational excellence. And thirdly, our activity model. Market creation issues are cardinal to helping EDF. Fund nan investments that are basal to clasp nan power transition.

A small spot astir crushed information. S&P reaffirmed nan BBB standing pinch a unchangeable outlook. And we -- it is really important for america that this standing is being maintained. It is accordant pinch nan group's activity, accordant pinch a batch of manufacture players, and we activity to make judge that this standing will stay unchanged. And also, nan ratios that we introduced, nett financial debt-to-EBITDA ratio and economical debt-to-EBITDA, we activity to amended those ratios further comparative to 2022.

Unidentified Participant

Thank you.

Operator

The mobility from personification successful nan room and past questions [Indiscernible]

Unidentified Participant

Hello, convey you. I spot my colleague's mobility regarding nan financing those, CFD aliases different types of contracts. And I person 2 different questions. The wide spectrum, EDF suggests replacing nan lid complete nan EPR vessel during nan adjacent 10-year sojourn astir 2035. The [Indiscernible] wants to push that backmost until nan extremity of nan first fewer cycle, truthful arsenic opposed to doing it astatine nan extremity of 2024. Do you person a penchant and why?

Second question. The wide inspector besides suggests reducing nan long of nan 4th 10-year inspection by removing a proration that are not information is information driven successful immoderate awesome way. So what are your expectations connected that front?

Xavier Girre

I'd for illustration to apologize your workfellow if I person grounded to reside her mobility specifically. I deliberation it's excessively early to person a definite sentiment regarding nan extent of instrumentality -- benignant of instruments that request to beryllium incorporated into nan caller marketplace design. There is simply a statement shaping up astatine nan EU level pinch regards to nan request for semipermanent instruments. PPAs, for example, of either CFDs, which travel successful different shapes and sizes, but discussions request to return spot astatine nan EU level earlier statement needs tin beryllium achieved.

As acold arsenic we're concerned, arsenic a company, what do we want? We activity to create our strategy and what we request is semipermanent visibility. Needless to say, we want to proceed to beryllium capable to service our customers and supply them pinch products and solutions that will thief them dampen marketplace volatility and semipermanent contracts make that possible. Now nan existent style that these contracts will return a to beryllium determined. When it comes to nan recommendations of nan Inspector General, which conscionable came astatine erstwhile it comes to nan lid supra nan tech activity is underway.

With respect to that alloy lead, it is against that backdrop that we will find nan due nan timetable erstwhile it comes to reducing nan long of 10-year inspections, obviously, that's nan goal. It's not what we do during those inspections that has aliases tin beryllium reduced. We request to look astatine nan database of things that request to beryllium done arsenic portion of that inspection and boiling it down to immoderate is perfectly basal to quality information and security. But this is portion of our STAR 2025 program. We will proceed to fortify that program.

We will proceed those -- we will proceed to make those 10-year inspections arsenic short arsenic imaginable truthful that we tin activity arsenic efficiently arsenic imaginable and make nan astir of our time. On those 2 fronts, replacing nan alloy lid aliases nan alloy head. Regarding nan timetable, if we look astatine our history, you whitethorn retrieve that nan determination was made to switch that caput successful 2025 to person astatine slightest 1 rhythm complete for nan Flamanville reactor. But arsenic you each know, since we will commencement Flamanville 2 successful 2024, it is important to person a fewer cycles and are built earlier we tin switch nan alloy caput and backmost it up against nan full inspection -- full first inspection, which is perfectly basal whenever you commencement up a caller reactor.

So arsenic nan -- arsenic our Chairman and CEO conscionable said, we're having a chat pinch nan ASM atomic information authority to find nan correct day truthful that Flamanville tin run a afloat rhythm first. And also, we want to backmost that up pinch a much wide inspection. When it comes to nan 2nd proposal from nan wide sector. That has overmuch to pinch nan truth that nan 4th 10-year inspection represents 5x much work, 5x much resources and committedness than nan erstwhile inspections, basal to jump from 30 years to 40 years.

The magnitude of activity to clear nan spread betwixt 40 years and 50 years is specified that nan General Inspector is wondering whether aliases not it's amended to disagreement things differently. So that we will person little activity to do successful truthful small clip considering nan accent that our assemblage is under. So we person started moving together pinch nan ASN authority, nan extremity being to simplify and streamline arsenic overmuch arsenic imaginable that periodic reappraisal and activity arsenic portion of nan tenure inspection. And we are moving for nan -- we're moving for nan sojourn for nan inspection that will thief america jump from 30 years to 40 years.

And of course, arsenic we do that, we will comply pinch each of nan post-Fukushima information and information improvements that we judge are basal without needfully overloading this sector, which is nether truthful overmuch accent already. So we request to look to nan Inspector General's study and besides our ain appraisal of nan situation. Thank you very much, [Indiscernible]

Operator

[Operator Instructions] The timepiece is ticking, truthful we person clip for 1 much question. Maybe a mobility from a subordinate online. [Indiscernible] Hello? what is nan estimated shortfall from nan power value headdress measures?

Xavier Girre

On that front, we person an appendix connected that topic. Maybe we tin show it. But I deliberation nan 2 aspects that we request to look at, first of all, nan existent mechanism, nan ARENH mechanism, positive 19.5%-megawatt hr nan further megawatt hours that were allocated to replacement power producers. And connected nan right-hand side, astatine December 30, you spot nan last effect of EUR8.1 billion. That's nan amount. There's a antagonistic effect connected nan group's EBITDA. Also, we person reference to frost connected profit separator to nan tune of EUR0.6 billion.

Now nan mobility that's been asked america to do pinch nan headdress connected power prices successful nan strict consciousness of nan word, capping it astatine 4%, capping nan IRR astatine 4%. This was estimated astatine EUR0.9 cardinal initially, arsenic you tin spot connected nan left-hand side. Then ultimately, a determination was made arsenic portion of nan 2023 Appropriations Act, which was adopted successful December 2022, that this would beryllium addressed via DC SBE mechanism.

And this meant that we accounted that arsenic EBITDA, but nan rate effect will beryllium seen successful 2023. And this is why from nan EBITDA standpoint, nan headdress connected power prices did not person an effect successful ‘22. But from a rate constituent of view, it did person an unfavorable effect. And arsenic we tin spot here, -- this came to EUR1.4 billion. So that's nan unfavorable rate effect successful 2022.

Luc Remont

Thank you, Xavier. How astir we telephone it a day? We person galore much opportunities to walk clip together. Thank you very overmuch for your attention. Thank you for caring astir our group. And needless to say, I'm looking guardant to gathering you again. For nan remainder of our story, looking astatine our operational capacity and besides really we're building nan early of our group, convey you very much.