EDP, S.A. (EDP) Earnings Call Transcript & Summary

Good morning, and welcome to the EDP 1H '21 Results Presentation. My name is Charlie, and I'll be the coordinator for today's call. [Operator Instructions] I will now hand over to your host, Miguel Viana, Head of Investor Relations, to begin. Miguel, please go ahead.

Good morning, ladies and gentlemen. Thank you for attending EDP's First Half 2021 Results Conference Call. We have today with us our CEO, Miguel Stilwell de Andrade; and our CFO, Rui Teixeira, which will present to you the main highlights of first half 2021 financial performance and then update on strategic execution. We'll then move to the Q&A session, which we'll be taking to your questions, both by phone and the written questions that you can insert from now onwards on -- at our web page. This call should take close to 60 minutes. I will give now the floor to our CEO, Miguel Stilwell de Andrade.

Thank you, Miguel. Good morning, everyone, and thanks for attending the call today. I hope you're all well. Before I move into the results, I just wanted to highlight, I think it's really positive that we begin to see economic recovery and also the continued political support for the energy sector. So I think that's certainly a very good tailwind, and we're all very excited really about what lies ahead. In terms of the first half results, a couple of key numbers which I think are worth highlighting. First, we continue to accelerate the growth with gross investments increasing almost 30% year-on-year, so now around EUR 1.6 billion. So that's a clear indication of the ramp-up in growth. We've also ramped up the renewable developments in terms of megawatts. So we now have 3.6 gigawatts of capacity installed and under construction, around 700 megawatts added year-to-date and 2.9 gigawatts under construction as of June. We also have full visibility on our asset rotation strategy for this year, which continues to really highlight the value and the quality of our projects, both on wind and solar. As you know, we completed the asset rotation deal in the U.S. We had a capital gain of around EUR 250,000 per megawatt, which is above our business plan assumption of around EUR 200,000 per megawatt. We also recently announced an asset rotation deal in Portugal, which, combined with previous announcements, amounts to a total of EUR 1.9 billion of asset rotation proceeds at very attractive multiples. So all together, approximately 25% of the EUR 8 billion asset rotation target that we've given until 2025. Recurring EBITDA, excluding ForEx, decreased around 1%, so reaching EUR 1.7 billion, approximately. And just to give you some highlights on the impacts on this. So the semester, as you know, was penalized by below average wind resources, also lower asset rotation gains versus our -- versus last year in the renewables platform. But we also had a challenging quarter on the Energy Management division. And we'll give a little bit more information on that. And this was obviously impacted in the context of the strong increase in power prices in the wholesale market. So that translated into higher sourcing and production costs and had also some negative mark-to-market, mainly on gas contracts. Also worth noting, from an integrated risk management perspective, part of the negative performance is offset by the positive results in the hydro generation in Iberia as well as in the supply division. So our diversified portfolio allowed us to partially mitigate these effects with some positives and some negatives. We had a very positive performance in the electricity network, with recurring EBITDA increasing by 33%. And so bottom line, recurring net profit reached EUR 326 million and reported net profit of EUR 343 million, mainly impacted by a nonrecurring gain of EUR 21 million booked in the first quarter in the supply division in Spain relating to the sale of the assets last year. If we move on to Slide 4, so talking a little bit about growth. We can see we continued to accelerate the growth. We have 2.1 gigawatts of capacity added in the last 12 months, of which 700 megawatts added in the year to date. And as I've mentioned, 2.9 gigawatts under construction as of June. Secured capacity, we now have 6.7 gigawatts with the recent 200 megawatts we just signed this week, and also, visibility on additional 3.7 gigawatts of PPAs in advanced stages of negotiation. So overall, strong short-term visibility on additional PPAs. And of course, we'll be participating in several auctions over the next couple of months, which total over 30 gigawatts of capacity to be awarded until year-end in our European market. We also continue to expand our footprint into new markets with high-growth prospects. And we recently entered Hungary, Chile, Vietnam, U.K. onshore market and also offshore in Poland. So on track with our commitment to deliver 20 gigawatts by 2025. Move on to Slide 5. So the 6.7 gigawatts of capacity secured now almost 2/3 of our '21 to '23 target addition. As I mentioned in the EDPS conference call, we've been able to secure this capacity at attractive return, in line with our disciplined investment criteria, which you are all very familiar with. We secured capacity across all technologies and above our investment thresholds, both from a return and risk perspective. So all in all, spread of a WACC of -- for the 6.7 secured so far at 320 basis points. And from a risk perspective, we continue to focus the investments on long-term contracted assets and have a contracted NPV above 60% of the total NPV of the project. And we used this as the proxy for the risk, because we're basically locking in upfront already a big chunk of the value of the project. So obviously, having these type of projects is key to the success of our asset rotation strategy, given the quality of the portfolio and the type of assets that investors like to buy. Go on to Slide 6. So here, I'd just like to address some concerns that have been raised in the sector regarding the CapEx cost inflation. Now as you know, we've already talked about this, but I'd just like to reiterate that we are well protected from CapEx cost inflation. Our investment policy is to contract major equipment up front at fixed price, so that when we take the investment decisions, we're doing it based on real-time quotes requested from suppliers and then typically locking them in. So at every point in time, we're incorporating in our investment approvals the most updated CapEx estimates. We then reflect this in the PPA our auction bids, and are therefore passing through any CapEx cost inflation and keeping our returns stable. So we've covered this in detail on the EDPR call that bottom line, overall, our exposure is limited. Go on to Slide 7. So as I mentioned, asset rotation, 6 months into the business plan and we already have around EUR 1.9 billion, so 25% of the overall target for the 5 years. So very solid execution by our teams. As you know, we like to front end the business plan and really try to do most of this in the first couple of years. More importantly, I think it's a great performance and the multiples achieved, and as I said, with a strong appetite from investors. Overall, multiples achieved are at an average of EUR 1.6 million per megawatt, correspond roughly to EUR 1.7 million per megawatt for wind and EUR 1.25 million for solar. Obviously, there are CapEx differences in the cost per megawatt of wind and solar. We also recently completed an asset rotation deal of a wind portfolio in the U.S. of 405 megawatts, around EUR 500 million of asset rotation proceeds. We've had a capital gain of about EUR 100 million. You can see that there on the left-hand side of the slide. So summing up, we're on track to exceed our business plan targets and deliver capital gains north of the EUR 300 million in 2021 and really excited to see that the asset rotation execution has been very solid in these last couple of months. Moving on to Slide 8. We're talking about policy. So we see the policy environment is still very supportive of the energy transition. I mean, just since Wednesday, in the U.S., following Biden's Americans Job Plan, the Senate has now passed a key milestone in infrastructure build, and that includes additional support on investments in electricity grids of around $73 billion, which are critical for renewables growth. As you know, one of the key issues in the U.S. is having good transmission networks that we can connect renewable projects to. And so we think this is a very healthy sign, which will be good news for the renewable sector in the U.S. In late June, we also had positive news from the IRS decision to extend the PTCs and the ITCs by around 2 years. So taking into consideration some delays related with the COVID situation. This is clearly positive for our investments in the U.S. with the planned commissioning over the next couple of years. In Europe, as you know, the Fit for 55 legislative package enhances again the widespread political support on decarbonization. It increases the renewables growth targets and mechanisms for the sector, includes reforms to EU emissions trading scheme. And I think it's also worth highlighting, increased guidance and financial support for contracting of renewables PPAs by SMEs. So this is very much in line with the expectation of a growing PPA market in Europe. All of this, I think, calls for strong fundamentals and unprecedented growth in renewables. And I've referenced this in the past. But if you look at the IEA, International Energy Agency, net 0 road map, it's expected to represent around 90% of electricity generation by 2050, the renewables. So again, good news for the sector. Slide 9. So talking about networks. The networks have been extremely resilient. And I think we continue to deliver strong operational performance. I think the team has done great work here. Overall, distributed electricity increased 14%. There was a good economic recovery across all our geographies, but also, given the acquisition of Viesgo. In Portugal, we significantly ramped up the deployment of smart meters, and we've got a share of now almost 60% in June. And I think this is also important to note, the Networks platform has also been a very important driver of efficiency for cash recurring and OpEx decreasing 5% on a like-for-like basis. Viesgo integration on track. I mentioned this is a new collective labor agreement signed last month. This is the key milestone for the integration plan. It allows us to move forward with a significant part of the restructuring. So also an important milestone to highlight. And in Brazil, the Networks operations also show very solid growth. So we've talked about the acquisition of a transmission line in the state of Maranhão, where we were awarded the largest batch in the recent transmission auction. And that increases our overall transmission portfolio to 8 line. So 6 of them in operations or in advanced stage of construction. One point I wanted to highlight in relation to transmission in Brazil. Given that we see very interesting value creation in the development of this transmission line, we're now considering the implementation of an asset rotation business model transmission in Brazil, where we crystallize some of this value upfront and rotate the capital into new greenfield transmission projects that are in either permitting or preconstruction stage. So this is something that we're also working on and hope to give you some visibility in the next couple of months. So on Slide 10, and just a note about Client Solutions. And I think really some very interesting numbers. First, the penetration of value-added services continues to increase, so up 5% to around 30% in the first half. Focused very much on service quality and leveraging our customer portfolio to increase the share of wallet, so it proved to be a very successful strategy so far. And also, I think, really interesting to highlight is solar DG really taking off. It's almost doubled the installed capacity of distributed solar, now at around 190 megawatts peak versus the first half of last year, both transactional and also as a service. And also in terms of mobility, public mobility and private charging points, also a relevant increase. So I think also worth highlighting these 2 numbers. Finally, if we go to Slide 11. I want to address that EDP has been working hard to adjust its business portfolio towards the energy transition across all divisions. And I just wanted to highlight 3 business divisions that represent today the bulk of our Iberian operation. The first one is hydro in Iberia. We have around 5.5 gigawatts, of which more than 40% with pumping capacity. As you know, this is a flexible renewable technology that will be critical for -- to complement the growth of other variable renewable technologies, namely solar. And as you'll recall, in December 2019, we agreed to deal with the consortium led by Engie for the disposal of a 1.7 gigawatt of hydro capacity for a total of EUR 2.2 billion. But at that time, the forward power prices were significantly lower than today. I'll just highlight this point because I think that's important in terms of doing a read across for our existing portfolio. We've also reinforced our presence in electricity networks, so the second piece of the business. We now have a regulated asset base of EUR 4.6 billion in Iberia, now including the Viesgo acquisition, which I've mentioned, the integration is going very well. So I think we continue to believe that the electricity networks will play a key role in the energy transition. And finally, we have a portfolio of 4 million clients in Iberia. And the strategy is to continue to increase the share of wallet for clients with the new services, namely, distributed solar, where we see a very interesting growth opportunity. As you know, this business was more mature -- not more mature, but it's been growing in the past in Portugal. In Spain, it's more recent, and so there's a huge market opportunity really to explore there. And we are seeing that. And the teams are doing a fantastic job in building out the business in distributed solar in Spain. Overall, we believe the recent equity market performance of EDP, particularly if you consider the relative market value of EDPR and also the implicit value EDP's Iberian business, doesn't reflect the fundamental value of these operations, which I just talked about, and which are very well placed to benefit from the opportunities in the energy transition. So I'll just leave that comment there. And I'll turn it over to Rui Teixeira, and then come back for closing remarks. Thank you.

Thank you, Miguel, and good morning to you all. So on EDP's performance for the first half of 2021, I would like you to move on to Slide 13, please. The recurring EBITDA decreased 6% to around EUR 1.7 billion, so that's EUR 1,678 million by the first half 2021. If you were to exclude the ForEx impact, actually, the performance would be a relatively flat year versus year-on-year, so it would be a 1% drop. So recurring EBITDA from the renewables platform was penalized by weaker wind resources, particularly in U.S., which was 6% below average. Brazil and Europe was good as we presented in the results 2 days ago. [indiscernible] impacting the first quarter of '21 results, of course, a negative impact that was concentrated in the first quarter. Lower asset rotation gains when compared to last year, I think it's important here to note that we booked in the first half 2020 offshore capital gains of EUR 145 million versus what we are booking this year and the first half of EUR 118 million. This performance in wind and solar was partially offset by the good performance that we have in hydro. In the electricity networks, recurring EBITDA increased by 32%. And of course, this benefits from the integration of Viesgo, which had an EUR 86 million in EBITDA contribution, a strong demand across all regions and around improved financial -- sorry, operational performance. In Client Solutions and Energy Management platform, this was penalized by the sharp increase in the energy prices in the wholesale market, particularly in the second quarter 2021. This imply a higher production and sourcing costs, but also a negative mark-to-market impact on hedging contracts. Part of these results are mitigated by a stronger-than-expected performance in hydro in Iberia, with a realized price of EUR 57 per megawatt hour, that's above the hedge price of the baseload production for '21 of EUR 45 per megawatt hour. This also compares to an exceptional positive performance last year. If we move now to Page 14. EBITDA from EDPR declined 18% year-on-year to EUR 654 million or a 13% drop if we were to exclude the ForEx impact. Despite this, the 10% increase of installed capacity, supported naturally by the additions over the last 12 months. As I mentioned before, EBITDA was penalized by overall weak wind resources. So that's overall 5% below average, the negative impact from the polar vortex in February, EUR 35 million impact, and lower asset rotation gains when compared to last year, so that's a minus EUR 27 million. If we move now to Page 15 on the hydro. Adjusted by the change in consolidation perimeter, hydro recurring EBITDA increased 22% to EUR 353 million. In Iberia, our EBITDA increased by EUR 58 million year-on-year, impacted by a 10% year-on-year increase in hydro production. Also, as I said before, realized price benefited from the context of higher pool prices, even though our expected output is hedged at EUR 45 per megawatt hour. So I think it also reflects the quality and the flexibility of our hydro portfolio. Results were also positively impacted by the reversion of some hydro levies in Spain following the recent court decision, which amounted to EUR 47 million. In Brazil, the hydro EBITDA increased 9% year-on-year. Now we know that there is a hydro crisis in Brazil, but -- that we are experiencing, of course, but performance was well supported by the hedging strategy in place, with more energy allocated towards the second half of 2021, which protected the portfolio from the impact of the GSF and the consequent price volatility that we have witnessed in this period. We now move to Networks on Slide 16. The semester was marked by a strong performance of this business, with a recurring EBITDA increasing 33% year-on-year. In Iberia, EBITDA amounted to EUR 418 million. That's a 32% improvement comparing to the first half last year. And naturally, this is on the back of the Viesgo integration and also a EUR 22 million increase in Portugal due to OpEx savings and a result of also some gradual increase in digitalization, rollout of smart meters and also some lower headcount, so very focused on efficiency. In Brazil, EBITDA rose 38% to EUR 168 million. That's [ EUR 65 million ] in local currency. And this is mainly due to the increase of volumes distributed in electricity, which they are up by 10% year-on-year. The positive impact from inflation indexation on distribution annual tariff updates. I would just like to remind that the annual tariff updates were 8% in EDP [ distributed subs ] that was in August 2020, and 4.8% in EDP Sao Paulo that was in October 2020. EBITDA is also positively impacted by the partial commissioning of the 2 transmission lines and the evolution of construction works in the remaining lines. We move now to the platform, Client Solutions and Energy Management on Slide 17. Recurring EBITDA declined 71% year-on-year versus a very, I would say, exceptional strong performance in the first half, which included still a positive EBITDA contribution of EUR 42 million from Sines coal plant that was shut down at the end of 2020. The second quarter of this year was particularly challenging, with an EBITDA of minus EUR 4 million, in which the Energy Management activity in Iberia was penalized by the sharp increase in the energy prices to really at record high levels. These have increased energy sourcing costs and also implied some negative mark-to-market impact from hedging contracts for future periods. Part of these mark-to-market losses are also expected to be reverted in the near term and are mostly noncash item. I think it's also worthwhile mentioning that part of this negative performance is offset by the positive results achieved In Hydro Iberia as well as the strong performance in our Supply division as we kept the average price of energy sales to its customers on a stable basis. So assuming the maintenance of the current high energy prices in the current market environment for the second half of the year, we are expecting our Client Solutions and Energy Management segment to deliver an EBITDA in the region of EUR 0.2 billion. Through the third quarter, should still be penalized by this context of higher energy prices, but also people -- we are expecting it to be compensated during the fourth quarter of the year. For the next years, we see an improved level of our forward contracting. So for 2022, we have already hedged close to 100% of our expected base load generation at the wholesale price of EUR 57 per megawatt hour. And for 2023, we have now 30% of our expected generation volumes contracted at an implicit baseload price of EUR 50 per megawatt hour, which is above our business plan assumptions at roughly EUR 47 per megawatt hour. So now moving into efficiency on OpEx on Slide 18. Excluding growth for a like-for-like comparison, OpEx improved by 3% year-on-year. And of course, we continue driving efficiencies across the business. So although we have a higher headcount at EDPR to support growth, this was compensated by a leaner organization. Networks OpEx, excluding growth, declined by 5% year-on-year, as we continue to increase the digitalization and also due to a lower headcount. Our efficiency program has now over 330 initiatives identified, which has already captured EUR 24 million in savings in this first half of the year. That's mainly in human resources initiatives and the optimized procurement in Brazil. So I think very focused on driving efficiency and delivering this impact in terms of value to all shareholders. On Slide 19, a brief overview on the financing costs. So adjusting by EUR 57 million one-off costs, that is related to the repurchase of offsetting bonds in the first half of this year and the ForEx gains, net financial interest fell by 10% year-on-year to EUR 264 million. And this is mainly driven by approximately 20 basis points decline on the average cost of debt from 3.3% to 3.1%, a 4% year-on-year decline, that's the -- in the average debt. And also, in January 2021, we have 2 bonds maturing with coupons of 5.25% and 4.125%, which helped to lower the average cost of debt. I think it's also worth highlighting that in the beginning of July, we also concluded a cash tender offer for EUR 647 million of short-term outstanding bonds in the proactive liability management. That will attribute to lower recurring net financial costs over the next quarters. Net debt, on Slide 20, increased by EUR 1 billion to EUR 13.2 billion in this half of the year. So recurring organic cash flow of EUR 0.5 billion -- sorry, EUR 0.4 billion, that's penalized by an increase in working capital related to proactive management decision to anticipate payments to suppliers in order to optimize treasury management, and of course, in this context of high financial liquidity. EUR 0.75 billion related to the annual dividend, that was fully paid in April. EUR 1.8 billion of net expansion investments, all in acceleration to the build out activity to EUR 1.4 billion -- with EUR 1.4 billion of expansion investment, and the anticipation of build payments to fixed asset suppliers of around EUR 0.9 billion. So this was partly offset by EUR 0.5 billion proceeds from the asset rotation deal that was completed in the U.S. We also have a positive impacts from the EUR 1.5 billion proceeds from EDPR capital increase in April, and EUR 0.4 billion related to 50% of the EUR 750 million hybrid bond that we issued in January. Regulatory receivables increased by EUR 0.4 billion, mainly in Portugal, given that in the first half, there were no sales of the tariff deficit. However, in July, we had already -- we already announced the closing of a EUR 0.5 billion tariff deficit in Portugal. Just to finalize here on this slide. Effects of exchange rate fluctuations had a negative impact of EUR 0.2 billion in our net debt by the end of the period. Net profits on Slide 21. So overall, we reached EUR 343 million. So that's a 9% increase year-on-year. If we adjust by one-off impacts and the operations disposed in Iberia in 2020, recurring net profit decreased 15% year-on-year to EUR 336 million. I think it's important to highlight, income taxes amounted to EUR 164 million, representing an effective tax rate of 23%, and that's mainly due to the capital gains that are taxed in U.S. And non-controlling interest fell 11% year-on-year to EUR 154 million, mainly explained by the decrease in EDPR net profit. Just to finalize before I hand over to Miguel on Slide 22. I think it's important also to mention some achievements as we are continuing our delivery on the ESG excellence. So on the environmental front, I think we are all very pleased to share that the science-based target initiative recognized EDP's 98% target reduction of Scope 1 and 2 greenhouse gas emissions by 2030, that compares to 2015 level. And have also recognized 50% of absolute reduction of Scope 3 emissions over the same time frame. This means that the target in our '21-'25 business plan are in line with the climate science requirements towards limiting the global warming to 1.5 degrees and highlight the strength of our commitment to become coal-free by 2025 and carbon neutral by 2030. On the social commitments, in the first half 2021, women represented 26% of EDP's workforce. That's a 1% increase versus the comparable period. It's aligned with our strategy, as you know. Also, very committed to health and safety. We register a 1.11 total reportable injury rate at EDP. And I want to emphasize our committee with regard to make sure that safety is something present in the day-to-day of the entire people working with and for EDP. And we also invested EUR 6 million in social investment during the semester. So I think with this, we also highlight some of our -- how we are delivering our commitment in ESG excellence. So with that being said, we are very committed to what's ahead. And I also would like to take the opportunity to thank you all for your time today. And Miguel, I will pass the word to you now for closing remarks. Thank you.

Thank you. Thank you, Rui. So just before closing the call and then going over to Q&A, just a couple of comments on forecast. So many of the forecast by analysts have now been updated, with the EDPR capital increase now in approximately 90% of all analysts' estimates. And so we wanted to reiterate our guidance for 2021 of a recurring EBITDA of EUR 3.7 billion and recurring net profit above EUR 800 million. We have very positive prospects on the asset rotation gains at both EDPR level and eventually in transmission in Brazil. We have strong growth in electricity networks, and we will continue to ramp up renewable deployments in 2021. These positive trends should more than compensate a weaker year in Energy Management, penalized by the increase in energy prices in the short time -- period of time and implied negative mark-to-market on contracts, which would be unwound over the next couple of quarters. This guidance is based on stable ForEx and average wind and hydro resources for the second half of 2021. And all of this reinforces our commitment to deliver the business plan. We just move to the following slide, Slide 25. Just highlights, again, a couple of comments. But honestly, and I've mentioned this before, we're very enthusiastic about the growth on the several fronts where we're operating. We've been executing the growth plan with a focus on renewables and networks and with a total investment of EUR 1.6 billion in the first half of 2021. We secured already 6.7 gigawatts of renewable projects, with long-term contracts at attractive returns. So 1/3 of our 20 gigawatt target for 2025. And at the same time, we continue to successfully execute our asset rotation strategy given the strong demand and attractive multiples achieved, so reflecting the high quality of our portfolio. The acceleration of our growth that's supported by our sound balance sheet and competitive funding based on green financing just had a positive impact on our average cost of debt. We will continue highly focused on risk management, namely, regarding the current volatility, so -- and also CapEx cost inflation, in which, as you know, we maintain a conservative risk approach. And we will continue to grow the organization, entering into new markets and increasing renewable capacity annual growth. So that's all something that you can see also in the numbers in terms -- coming through in terms of megawatts under construction and in terms of megawatts secured. We will continue to accelerate the contribution to decarbonization. And you can see also the increase of the weight of renewables in our generation mix and also the execution of our coal phase-out plans, with the goal of becoming coal-free by 2025. So very exciting time to be in the energy sector and for the company as a whole. Thanks very much for this quarter's call results. And we can now move to Q&A. And I'll pass it over to the moderator. Thank you.

[Operator Instructions] Our first question comes from Harry Wyburd of Bank of America.

So 3 of them. First one is on hydro and Energy Management in Iberia. I just wanted to take stock of where we are this year versus what's a sensible projection for next year? And I guess just breaking it down into components. So hydro, obviously, it looks like you're hedging at higher prices for next year. So I just wonder whether you could give us any kind of flavor as to what that might be, what that might mean in terms of EBITDA? And then, also on Energy Management, I think you mentioned on one of the slides that you expect EUR 0.2 billion this year. Obviously, this year is a bad year. Last year was a good year. What's a normalized year? Or what should we be putting in for Energy Management next year? So that's the first one. Secondly, on this transmission -- Brazilian transmission rotation plan. I just wanted to confirm, is that in addition to the operation you are planning on hydro assets in Brazil? And is this something that you think could actually be meaningful from an earnings perspective? So could this be another sort of plan down games line that we have on a recurring annual basis in the same way as what we have for EDPR? And could it be meaningful for next year? And then finally, I apologize for the very open-ended question here. But you showed quite clearly on the slides, I can't remember which number it was, #11, that I guess the Iberian business implied share price obviously much lower. And I think given that you're now below EDPR in terms of market cap, and I think the combined Brazilian and Iberian business got a market capital of about EUR 3 billion, is incredibly low, and it implies an EBITDA multiple of sort of mid-single digit or lower. I just wonder, is there anything you can do or anything you're thinking of doing to try and correct that or exploit it? And you spoke more disposals in Iberia, I know I've asked you that in the past, and they don't appear to be on the agenda. But has the sort of share price move changed your view on that? Or maybe you consider something like a buyback, or even some of your peers are considering spinouts? It just seems an incredible valuation discount. And just interested to see if you feel there are any management actions you can use to take advantage of that?

Harry, it's Rui. So I'll address the first question in terms of the Energy Management. So again, maybe just going a step back. So again, first of all, I think that last year, we had an incredibly fantastic year. So that we'll be expecting some reduction vis-a-vis year-on-year. Secondly, what concerns what's happening this year, effectively, I mean, starting with the hydro, we do have a baseload hedging at EUR 45, but then the realized pricing, that has very much to do with the flexibility of the portfolio. And the realized price that we can get from that -- an active management is close to EUR 57 per megawatt hour. So definitely, this is something that is impacting positively on the hydro side. We then -- it has a reflection on the Energy Management, on the other hand. So basically, when we look to the Energy Management, I would say the following. I would say that we have a negative impact of around EUR 75 million, which is a positive impact on the hydro. Then we have approximately EUR 50 million of a mark-to-market contract. It's a gas contract. Basically, we hedge TTF against the Henry Hub. So it's a fixed spread because it's how we are dealing with the hedging of -- to our gas inputs. But then if TTF goes up, then on a mark-to-market basis, we have to book it on a negative -- as a negative result. This is something that we will be unwinding as we start using the gas. So we would expect this to unwind over the next quarters, into 2022 as well. And then this particular quarter, the second quarter, we also had a sort of a negative impact in terms of sourcing to our customer base. So that's a roughly also some EUR 50 million impact as well. So I would say that also to highlight what was the performance on the Energy Management side. I think that for next year, for 2022, what I would say is that we should see a recovery. As we shared, I mean, we have also increased the hedging on the base load to 100% at the EUR 57 per megawatt hour, which is well above what we were considering in the business plan. So I would expect a more normalized performance throughout the year 2022. Now I'll hand over to Miguel for the other questions.

So in relation to Brazilian transmission, so yes, it's in addition in the sense that we are considering doing some rotations of some of the transmission lines we have in Brazil. As you know, we've been building them up or constructing, developing and constructing them over the last couple of years. They've been a good value driver. Once they are built, essentially, they become almost bond-like. So we may -- we are seriously considering rotating some of these and redeploying that capital into new transmission projects. As you saw recently, we won one of the sort of big batches, as I mentioned, in the recent transmission auction. So that is something that we will be giving you an update probably over the next couple of months. Is it material? I mean, it's not very material in the overall context of EDP. So it's certainly nothing like, let's say, the renewable asset rotation program. So -- but it is something we will provide further visibility on probably post summer. In relation to the third question, I mean, it's obviously a great question, and very open ended, as you say. But all I can say is that we are aware, very aware that delta that's picking up. That's why we wanted to flag it explicitly in the presentation. And we will obviously look at any opportunity or any option that allows us to bridge that gap or to remove that delta in terms of share price. So I think, fundamentally, we don't think that the EDP share prices reflect in the sum of the parts. And that's something that we'll look at and see how best we can do that. It can be just -- sometimes, perhaps it's just providing more information. We continue to give visibility, as we are doing on the intrinsic value of the assets. But anyway, obviously, we will always consider all options, as we always have.

Our next question comes from Sara Piccinini of Mediobanca.

I have a first question regarding the political discussions in Iberia that might impact your business. So first in Spain, about the discussion on the law to revise the marginal pricing system. What is your expectation about the outcome of this regulatory proposal and also the level of output that you expect to be impacted for EDP? And the second is on Portugal. There are political discussions about the possibility to pay a stamp duty for the sale of the hydro assets. So do you expect to book any provision for the possible risk? So this was the first question. The second question was on Energy Management. So maybe just given that the expected higher CO2 prices that should be supported by the Fit for 55 package, would you expect to take the opportunity to increase merchant exposure in terms of generation or you stick to your strategy to be as much as possible long-term contracted? And the final question, you highlighted the significant level of investments expected in the U.S. also to improve the network. So would you consider to enter in this market as well?

Yes. In relation to Spain, I can then ask Rui to comment a little bit more on the marginal pricing system. But we certainly don't see anything on that front. I think the key issue that's really under discussion in Spain, which for us has a more residual impact, is on, let's say, the CO2 clawback value. And that's a specific proposal which is being discussed, and I think that's public. The impact for EDP itself is relatively limited. In terms of Portugal and the stamp duty, so this has had some media attention over the last couple of months. We don't intend to have a provision on this. So this was a very textbook, standard, plain vanilla transaction with a demerger and sale of the company to Engie, fully supported by all of the legal advisers and financial advisers. So it's something that was thoroughly scrutinized. We've been fully collaborative. And we'll continue to be fully collaborative on providing all information regarding this so that we can clarify this as quickly as possible. In relation to your second question on Energy Management and the higher CO2 prices, would we increase merchant exposure? Listen, I think we've always taken an approach that what we aim to do, and I think that's one of the fundamental values of EDP and utilities is have predictable, stable, long-term cash flows. And so what we look for is to lock in either through PPAs, feed-in tariffs, CfDs, these long-term cash flows. And it's what, I think, have given us the stability over time. So the same way we've seen the volatility in the market. We saw it last year. Prices crashing. We see them going up this year. I think what we like is this predictability, and so I wouldn't see us increasing merchant exposure. And I would expect us to keep the same philosophy in terms of contracting of new renewable projects sort of on these tariffs. I mean, obviously, we go on hedging for what -- we do have merchants. So whether it's hydro or any renewables, which does have merchant exposure, we typically forward hedge, and Rui's already spoken a little bit about that. But I wouldn't expect these prices to necessarily change philosophically our attitude to this. In relation to your third question, and it's a great question, U.S. investment. So we are investing heavily in the U.S. in general, mostly in renewables, wind, solar. Looking at storage, looking at hydrogen. Networks, I think the key issue for renewal -- or relating to renewables is on the transmission side. We've looked at this in the past. It's not something which we expect to go into in the short term. But we are certainly willing to work with partners who are developing these transmission lines, because, typically, there's a lot -- the U.S. has fantastic resources in both wind and solar. Sometimes, it's -- let's say that those projects are then not located close to load centers. And so it's important to have the networks to be able to connect, let's say, the demand and the supply in the U.S. And so I think this package is EUR 73 billion, which has been earmarked for investments in Networks. I think it's positive in that sense. Rui?

All right. So going back to your first question about Spain. I think, first of all, changes in the marginal market is something that -- or we're thinking the market architecture is something that EDP has pushed for many years now. We believe that the more you have these 0 marginal cost technologies as renewables penetrating the systems, the more it is important to rethink this market architecture. It has to be done at the European level. So I think it's going to be very hard that any country can progress alone in changing these -- the market rules without a consensus or a support from European Union. So I will not be very -- I'm not very, I would say, optimistic that we would see some structural changes in the market. And as Miguel said, I mean, what we are expecting now is for this CO2 pullback to see how it will ultimately unfold. From what we have heard, that could be these -- the changes that were incorporated after the report from the state regulators and CNMC, this potentially would impact EDP's net profit at low tens of millions. EPDR should be very low, very low single digits. So it would not be material. Nevertheless, it's something that from a conceptual perspective, we don't see it going in the same direction as the Fit for 55. So I would expect to still some discussions to go on in Spain about this project.

Our next question comes from Javier Garrido of JPMorgan.

Two blocks of questions, if I may. The first block is on guidance. I would like to understand, firstly, what you are including in your net debt guidance, if you are including any proceeds from any disposal outside the asset rotations in renewables. Specifically, if you're including any proceeds from asset rotations in transmission in Brazil or the sale of Brazilian generation assets? And then on the guidance on EBITDA and net income, if you are including any asset rotation gains from transmission in Brazil? That will be the first block. And then the second group of questions would be on renewables. You have delivered 320 basis points spread of the WACC in the 6.7 gigawatts that you have already secured. But that includes assets that you retain and assets that you are selling in your asset rotation strategy, if I am correct. Is there any meaningful discrepancy in that spread in -- between the assets you keep and the assets you have agreed to sell? And the second question on renewables is, how are you seeing your discussions on PPAs with regards to the passing through of incremental costs? Because you have been very clear about how protected you are for the portion of capacity that is already secure, but the new PPAs would need to include that pass-through. How are those conversations going on?

So it's Rui here. So let me address the guidance and then I'll hand over to Miguel for the other 2. So starting with the net debt. So for the net debt, what we are considering is bearing in mind that we will have already the asset rotation, which is already signed. In July, we closed, I think, this, what, 3, 4 days ago, USD 650 million from tax equity. So we -- that is closed in our accounts in July. Regulatory receivables, so we did a EUR 500 million sale of tariff deficit already in July. We may do some more by -- towards the end of the year. And we -- and naturally, we are expecting a normalization of working capital, because, as you know, we had, during the first half, particularly in the first quarter, we had some anticipation to suppliers just to manage the liquidity position. So that's -- we are seeing -- that's how we are seeing this evolving to around EUR 11 billion, EUR 11.5 billion by the year-end. And yes, I mean, in what concerns the -- our estimates for the year-end at the EBITDA level, we are considering that we will be closing asset rotation. And then that includes EDPR and also the Brazilian transmission. Although I have to say it's a very small contribution from the Brazilian transmission. And Miguel, you want to address the...

Yes. Yes. Okay. Thanks. So in relation to your questions on renewables. So it's roughly the same. I mean we are crystallizing the fair value of the assets upfront. And then we don't differentiate between what we retain versus what we sell. That decision is taken much more on the criteria in terms of, is there a sufficient critical mass and are there geographies that we think are interesting for investors to come in. So that's the key criteria and not so much whether there's a difference in terms of the returns from one to the other. So I would say it's the same between both. On the PPAs and the pass-through costs, I mean I think we flagged that in one of the -- I think in the presentation that the pass-through of these costs can translate into something like 1 to 2 euros or dollars per megawatt hour of delta. So it's not extremely -- it's not material at all in the context of the PPAs when you're discussing a 30, 40 euros or dollars per megawatt hour. So the discussions that I've witnessed have been fairly standard, because obviously, this is something that is sector-wide, so it's not company specific. And if it's a new process, then the bids just go in already reflecting these costs. If it's an ongoing process, typically, it's a revision upwards, but -- which is understandable given the overall context. So what I can say is it's not something that we see a lot of resistance because it ends up not being that material in the overall context.

Our next question comes from Alberto Gandolfi of Goldman Sachs.

I have 3, please. The 2 are clarifications. Can I just be clear about the Energy Management's EBITDA? I think, Rui, you said the EUR 75 million negative impact, which is offset at the hydro level. Then you talked about negative sourcing of EUR 50 million. Maybe I didn't get it. But was I mistaken, you didn't provide a mark-to-market impact? Now should we say that the total Energy Management is about EUR 200 million plus, partially offset by EUR 75 million in hydro? Or is the impact even bigger? And would you expect some of this to normalize by year-end? So you're going to use some gas in the second half. That's what I'm asking. Second question is, forgive me again, on guidance. You talked about market having adjusted EUR 3.7 billion EBITDA; recurring, above EUR 800 million. If you really put -- I mean if you're comfortable providing more than EUR 300 million gains or at EUR 300 million gains? Because at EUR 300 million gains, the underlying net income before gains would be about EUR 650 million. So I'm trying to figure that out. And sticking to guidance, so I guess that's question 2b. For 2022, we should have a bounce in volumes in renewables, in particular, new capacity load factors. You don't have losses in Texas, some power price tailwind, the Energy Management. So before any asset rotation gains or assuming constant gain, shouldn't 2022 be a particularly strong year for you, both operating and bottom line? And last, I promise. Yesterday, I asked a question about asset rotation. You're making like 2x invested capital. So I guess what I asked yesterday was, why don't you sell fewer gigawatts, get the same euro amount inflow and retain more assets? But thinking about it, why don't you actually sell the same gigawatt, make this above expectation gains, but at the same time, use that higher proceeds to upgrade capacity? So are we going to be here in February next year where you're just going to keep the same gigawatt disposals and then suddenly maybe achieve your 6 gigawatt growth sooner than expected or go even above that?

So I'll take the first one, the Energy Management, so just to be clear. So yes, we see a negative impact of EUR 75 million, but it's a positive impact on the hydro, and that has much -- part to do with the realized price. Then we have around EUR 50 million, which is a higher cost of sourcing to supply -- to our supply business. And therefore, the Energy Management takes a higher source of costing -- sorry, a higher cost of sourcing. But then this is not reflected in the price to the customers. And then there is a third one, which is a negative mark-to-market of EUR 50 million on a gas -- at some gas hedges that we have. Again, just because we hedge. And once we utilize the gas, we will benefit from that spread. But it was considered to be a speculative contract. And in that regard, it's mark-to-market against TTF increasing. So that's a negative impact that will be -- we will be unwinding it as we utilize this gas. But those were the 3 blocks that have, I would say, a significant impact in terms of the Energy Management.

Yes. so in terms of the guidance, if I understood your question, so would we guide towards more than EUR 300 million? I mean, the answer is yes. I think -- and this is something I would just like to make sure it's clear. So we have several transactions that have been signed and that we are working through the regulatory approvals. Some in the U.S., some in Europe. We've talked about the one in Portugal, but there's another one that's upcoming. And so it's essentially a question of managing also the timing of these and whether all of these crystallizes in 2021 or whether some of these also crystallize in 2022. In almost any scenario we look at, we are very comfortable with more than the EUR 300 million. The exact value will then depend on exactly which deals close in 2021 versus others that may close in 2022. So that's what I would say on this. In relation to the second part of your question, I think you are absolutely right. And we -- I mean, quite frankly, we had a poor first half on an operational basis in terms of the volumes of renewables, particularly in the U.S. Europe and Brazil was fine, but the U.S. was clearly low volume, not just because of Texas event, I mean that was a one-off, but we also had just generally low wins. So if we normalize that, we would expect certainly more volume on renewables overall. So operationally, we would expect that to bounce back in 2022, assuming an average year. In terms of asset rotations, and going to your third question. I think that, clearly, our stated goal was the EUR 8 billion of asset rotation. And so if we sell -- let's say, if we get those proceeds with less megawatts, then that's fine. I mean we'll have ticked that box in terms of who have met the criteria that we needed to in terms of our balance sheet. I think we'll then be in a position where we decide, as you said, do we sell additional megawatts and reinvest? Or do we keep it there and keep more megawatts on balance sheet? And I think that will depend very much on how we see the market in terms of our ability to continue to scale up, the type of projects, the returns we see on those projects. So we will come to that point, I'm sure, and we will have to take a decision on that. As of today, all I can say is, or what I would say is that the target is the EUR 8 billion. If we do it with less megawatts, that's great. And then we'll be in a position to decide whether we do more megawatts and keep them on balance sheet or not. But that's something that we will evaluate. Hopefully, that answers your question.

Our next question comes from Jorge Guimaraes of JB Capital.

I have 2 questions, please. The first one is a clarification on the guidance because I had a problem on my side on communications. I did not understand whether the guidance included asset rotation gains in Brazil. So a clarification on your previous answer to this. The second one, it's still on the Energy Management. You -- according to the guidance that -- the consensus that you circulate in the current -- currently, the market is expecting something below EUR 400 million per year over the next years. Are you comfortable with that value for the division? And then the final one is a bit more conceptual. When do you expect that we have cross-border PPAs in Europe that will allow for the export of cheap solar PV from Iberia to Europe? This will be my 3 questions.

So addressing maybe the first and second question. Yes, so the first, yes, we are including in the guidance some capital gains from the Brazil asset rotation. But again, I mean, those are relatively small. So I mean, not significant, really, not as compared to the ones that we have from EDPR. On the Energy Management, yes, I mean, we are not providing sort of guidance for that for the medium term. But I would say that for this year, we expect that by the year-end, we would have a contribution from this segment, Client Solutions and Energy Management, at around EUR 0.2 billion. So going forward, EUR 400 million, ballpark figure, should be relatively fair to say that it's -- although as I said, we are not commenting on specific guidance, but ballpark figure, yes.

Okay. Josh, if I understood your question, that the third one was, will we see PPAs in Iberia ramping up and Iberia exporting solar to the rest of Europe? Was that...

Yes, yes. When can we have cross-border PPAs that can -- to allow export of electricity to other European countries?

Yes. So in general, what I would say is that the PPA market that we've seen in Iberia has been picking up. So as you know, in the U.S., it's very mature. It's something we've been doing for many years. In Europe in general and Iberia in particular, it's been less so in the past, but we do see it picking up. And in fact, we've already signed a couple of corporate PPAs with European companies that aren't necessarily in Iberia. I think the Fit for 55 also shows support for growing PPA market in Europe. And so I think that's also something that's positive for the overall market. I think if in your question, if it was implicit that we would be exporting solar to the rest of Europe, like physically, that I think is very much dependent on interconnection, which, as you know, is something which between Iberia and the rest of Europe is still not great. In fact, we just recently had last weekend, as you know, incidence on the network. So it just shows us, I think, sometimes, the limited amount of interconnection between Iberia and France, which is expected to increase over this next decade. So I think with time, you could then start getting more physical or a higher percentage of physical exportation of solar through these PPAs. For the moment, these end up being the people who contract PPAs either in Iberia or then they hire -- they contract them, but they don't physically sort of, let's say, require the energy in the other European market.

Our next question comes from Fernando Garcia of RBC Capital Markets.

My -- I have 2 questions on gas. First one, I think that you are loaning customer versus gas contract after the expiration of 1.5 BCNs for gas contracts this year. So could you explain what is your strategy in gas? Have you hedged all your gas sales that you expect for the second half of the year? And second question, if you can provide some clarification on this EUR 50 million mark-to-market of a negative gas impact in H -- in Q2 actually? And taking into account that TTF gas prices went up still in the -- at least in July, taking into account the gas uses that you expect for H2, what could we expect regarding this figure in the second half of the year?

Fernando, it's Rui here. So just -- first of all, in terms of the hedging strategy for the gas contracts, we follow the same hedging strategies or risk policy that we have at EDP. So we always aim to have it balanced so that we don't have a very open positions. Again, it is small activity for EDP. Nevertheless, long-term contracts hedged for this year, I mean, they are hedged. 2/3 of the gas volumes are also hedged for 2022. And of course, I mean, we always -- and manage what is the best destiny for the gas, whether it is to the plant or to the customer base that we have in Iberia. In what concerns with the mark-to-market, so to be clear. So all -- in these contracts that we have that are going -- some of these contracts will be for supply or to be utilized or to consume the gas. In Q3, Q4, throughout 2022, we hedge it. So once we hedge it, we close the spread. And basically, this particular mark-to-market, so we lock in a spread TTF versus Henry Hub, because TTF is where we will -- the reference price upon which we then we sell the gas and the acquisition was Henry Hub indexed. So once it's locked in, that spread, it means that when I'm utilizing the gas, I know exactly what the price I will be utilizing it, or at what cost I will be utilizing that gas in TTF. What happened, as you said, is that TTF market went up. So it was considered that this -- the volumes that were hedged with this spread on a mark-to-market basis, so TTF went up, the TTF at which we locked in was lower. And therefore, that delta, we had to book it as a mark-to-market. So that's where the negative impact comes. So it's that mark-to-market. So it's not a cash out. It's the impact on the accounts. What will happen as we go forward? Can we utilize that cash in Q3, Q4 and in 2022? Basically, we'll be unwinding this mark-to-market. Or effectively, what we'll be using is that spread, I mean, that was already locked in from an economic perspective. But it's what -- this is what we have in the books in this quarter.

Our next question comes from Arthur Sitbon of Morgan Stanley.

I have 2. My first question is, I was wondering if you could please provide an update on the investigation into your fiscal obligations regarding the sale of the Portuguese hydrogen to Engie? If you could provide a sense of what's really at risk here, that would be helpful. And my second question is just if we could get an update on if there is any progress being made for the auction of municipal concession on Portuguese electricity distribution?

So in relation to the first one, there's not really any update. So there's an ongoing investigation in relation -- what's come out in the media in relation to the stamp tax, which has been led by a local movement to be of around EUR 100 million. And as I mentioned earlier on the call, so this is something which has been seen and reviewed many, many times by both legal financial tax advisers. And we're very comfortable with the position we have. So it's something that, as I said, we are collaborating fully and hope to clarify as quickly as possible. In relation to the auction on the low-voltage concessions, I think that's what you're referring to. So there's a working group that was put together a few months ago to come up with a proposal for how to run this process. We would expect that to -- that, let's say, proposal from the working group to come out probably over the next couple of weeks even. And then it'll probably be followed by public discussions. And essentially, it would only be following those public discussions that there would be actually a decision taken on what to do in relation to the low voltage. I think just -- it's also good to reiterate that, as you know, this represents around EUR 1.2 billion of RAB. And that in terms of -- let's say, we are continuing to manage it on an ongoing sort of business as usual basis. In any scenario, we would get either RAB back. So that's under the concession contracts. Or if we were to win this process, depending on what it is, we would be under the terms for another concession period. So that's essentially what would happen. The process itself, there's not much visibility on whether it's going to be one region or more than one region and exactly what terms. So I can't comment much more than that now.

Today's last question over the telephone lines is from Olly Jeffery of Deutsche Bank.

I have 2 questions, please. The first one is on the Viesgo integration. I just wanted to get a sense of how you saw the integration going in terms of the synergies you expect. And just specifically on, if you're getting more confident on the synergies since the Capital Markets Day in February, and you found more, for example, do you think you'll be able to exploit or be able to generate what you initially envisaged? That's the first question. And the second one is on the [indiscernible] gain. So you mentioned that the gains recorded on the transaction that's completed a EUR 250,000 a megawatt. That's an onshore wind asset, obviously, and you guided to EUR 200,000 a megawatt over the plan. I just wanted to get a sense of, is that EUR 250,000 the megawatt, although it's above EUR 200,000 guided, I presume the EUR 200,000 a megawatt that's guided is a mixture of wind and solar, with the wind assets probably having a higher euro thousand per megawatt gain expectation. So is the EUR 250,000 a megawatt in line with what you expect for onshore wind, or is it still higher than what you're expecting for onshore wind only?

Thanks, Olly, for the questions. So in relation to the first part, in relation to Viesgo, I think, quite frankly, we're positively surprised -- not surprised, but happy about the way that the integration is going. It's certainly on good track, even slightly exceeding the pre-closing assumptions. It's already -- we've defined already the new organizational model already back in March. We have several initiatives on track in terms to maximize the value creation. As I mentioned earlier, we got the collective labor agreement closed now in the second quarter of 2021, which was the important precondition to implementing, let's say, the restructuring. So 2021 is a transition period, where we are expecting to be implementing the bulk of the, let's say, the synergies and the initiatives, and that we would get like those benefits from integration in 2022 onwards. We haven't quantified the Viesgo synergies explicitly. But overall, what I would say is that they're in line with those estimated by analysts. So in terms of operational synergies, sort of around the EUR 20 million per year plus. And then also some tax synergies, which we've talked about, or over the channels, I've talked about, which could take the overall number up to EUR 40 million, EUR 50 million per year. On the second part of the question. So we expect higher gains. I mean, yes, wind does typically have higher gains per megawatt than for solar. And so that's built into the assumption. So when we talk about the EUR 200,000 per megawatt, that's essentially what -- it includes both wind and solar. However, this one, the EUR 250,000, it came above what we had in the business plan for wind specifically. So let's say, the comparison of the EUR 250,000 is still above what we had estimated in the business plan.

We are a little bit long in time, but we still have time for a couple of questions from the web. The first question will be on the drought in Brazil. So what do you expect the impact of the drought in Brazil on your second half 2021 results would be? From Mammadov from Bloomberg.

So I would just say that in terms of the current situation in Brazil, we are going through a worst rainy season over the last 90 years. Nevertheless, I think the hedging of EDP Brasil that was placed in the beginning of the year and the end of last year protect us from the current GSF levels that we see, in the region of 76%. And so we don't expect any material impacts in the results of 2021. Obviously, on a quarterly basis, there can be some inter-quarter volatility. And definitely, the third quarter is a more challenging quarter where we see GSF in the region of 50% to 60%, but -- at the end of the year. So we will be in line with what was our expectation at the beginning of the year.

You have another question also from the web from Stefano Bezzato. Is there any specific to the asset in the last farm down announced in Portugal in order to justify the higher than average multiple of EUR 2.4 million per megawatt? Can you give any indication on the capital gain?

Sorry, Stefano. So in relation to your question, I mean what I would say is we've definitely seen a lot of appetite for these assets overall. I mean, even last year in Spain, for example, the Spanish transaction, it was also a fantastic multiple. So these multiples are obviously influenced by its good quality of assets, #1; very low cost of capital in Europe with very low European interest rate environment, that's the second one; third, I'd say the average age of the portfolio. So these are fairly new assets. In fact, just finished being built, are being finished being building; and then they have 15 years of strong contracted cash yield, so that's the fourth one. So you put all of these together, and I think you come up with these type of multiples that people are willing to pay for. We haven't provided and we won't provide the exact capital gain at this stage. We always need to wait for the final exposing so that we can calculate exactly the capital gain. And then that's disclosed in the quarterly reporting following the close, the financial closing. So in any case, I think you guys have -- or somebody have done the math using CapEx estimates for the different projects. And I'm sure you'll be able to come up with a good estimate.

Okay. So we are a little bit long in time, so we'll finish here. And we'll follow up on some few other questions that we have still on the web. And I will leave now to Miguel Stilwell to do some closing remarks on the call.

So what I'd say is I think we had a quarter which was -- had some ups and downs. And clearly, we recognize that in terms of the downs in terms of Energy Management and the weaker volumes. But I think at the same time, also showing the value of some of the diversification, namely, on the network side, on the efficiency side. And so we feel comfortable with where we are. We feel comfortable with the guidance that's come out in the market. Thinking more medium, long term, we feel very excited and very comfortable with the overall growth perspective, certainly in the renewables business, but also the other parts, both Client Solutions and also the Networks. So I think that, generally, we feel positive about the sector and about the company. And that's something which we'll be working on now over the next couple of months to make sure we deliver the results this year, but also for future years. And I think that's it. I mean, on my side, just wish you all good holidays and 30th of July, and I'm sure many of you will be off probably for the next couple of weeks. So take care, stay safe, enjoy. And we'll, I guess, talk again early September. Thanks a lot.

Ladies and gentlemen, this concludes today's call. You may now disconnect.