Electricite de France SA

PAR:EDF

Earnings Call Transcript 2020-Q3

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the EDF Sales and Highlights 9 Months 2020 Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today, Friday, the 13th of November 2020.And I'd now like to turn the conference over to your speaker today, Xavier Girre. Please go ahead.

[Xavier Girre]

Thank you. Good morning, everybody. I'm very pleased to welcome you to this conference call. I will present you the end of September 2020 sales, starting with the key figures and the main highlights over the period. As usual, I will leave as much time as possible for the Q&A session. And this call is expected to end at 9:45.Sales amounted to EUR 48.8 billion at the end of September 2020. This represents an organic decrease of minus 4% compared to the same period of 2019. Excluding COVID-19 impact, estimated at circa minus EUR 2 billion, sales remained roughly stable. Negative gas price effects and lower nuclear generation were offset by favorable power prices effects. When comparing the evolution of sales quarter-by-quarter 2020 versus 2019, you can see that Q3 2020 experienced a more consistent outcome than Q2 2020.Let's first focus on the impact of the COVID-19 on group sales at end of September. It has been estimated at circa EUR 2 billion. Nuclear activities in France have been impacted by an estimated minus EUR 0.7 billion, additional modulation and extended outages related to the sanitary restrictions led to a reduced nuclear output estimated at circa 29 terawatt hours. Customers and services activities were impacted by consumption decrease and by the postponement during the lockdown of both on-site construction works and services and the impact on sales, mainly concentrated in Q2, has been estimated at around minus EUR 0.9 billion. Enedis and regulated activities in France were impacted by circa EUR 0.2 billion, mainly due to a decrease in distributed volumes and in the number of grid connections. The activity was well sustained since the end of the lockdown, partly due to compensation, which is the reason why you can see a positive impact for Q3.Let me now update you on the deployment of our strategic plan CAP 2030. EDF pursues its development in all renewable activities. In solar, EDF Renewables has been awarded 3 large projects for a total of 1,350 megawatts in India. EDF Renewables acquired the pipeline of Geenex in the U.S.A. comprising of 20 projects for a total of 4.5 gigawatts. And in France, following the last tender of the CRE, EDF has been awarded 12 solar projects, representing more than 100 megawatts.In wind, the construction of the Dumat Al Jandal wind farm in Saudi Arabia, a 400-megawatt project in partnership with Masdar has been launched. The construction of the first phase of the Taza wind farm has also started in Morocco. As for the storage, the group installed a 50-megawatt 4-hours battery system in California, coupled with a 100-megawatt solar project. Last, the Romanche-Gavet hydroelectric plant has been commissioned in October. This 10-year EUR 400 million construction work will allow the output of the plant to increase by 40%.Let's now move to nuclear. First, let me remind you that the 2020 nuclear output assumption for France has been upgraded mid-October to a range of 325 to 335-terawatt hours. The estimated cost of the Grand Carénage program for the period 2014 to 2025 has been revised to EUR 49.4 billion in current years to be compared to the previous estimate of EUR 48.2 billion. This adjustment was due to, mainly, the first findings and the works to be conducted related to the periodic safety review on the 400 -- sorry, so mainly the first findings on the works to be conducted related to the periodic safety review on the 900-megawatt reactors; second, the expected lengthening of planned maintenance outages based on the feedback from previous years and, to a lesser extent, the impact of the current health crisis on years '20 to '22.An update on the Excell plan was made mid-October with successful achievements of the commitments made last December. The second phase of the plan has been launched, focusing on 5 cornerstones.Let's move to customers and services activity. Commercial performance has been sustained in France. The number of customers' losses has slowed down compared to the same period of last year. The portfolio of residential electricity customers and their market-based offers has increased by 59% versus the end of 2019. It now represents 875,000 customers. As for electricity mobility, Izivia signed a significant contract with carmaker PSA, it will equip 31 of its sites across Europe with charging stations for electric vehicles. This represents a potential total of 750 charging stations. Pod Point installed around 30,000 charging points for residential customers since the beginning of the year. e2m has released a new aggregation offer to increase the flexibility of decentralized resources. And Dalkia reached several commercial achievements, including the signature with the museum Louvre and -- of a 5-year multi-technical contract. Enedis launched a '20 to '25 human and industrial corporate vision focused on performance, customer proximity and innovation. Regarding Linky, 80% of the installation program has been met, with 28.5 million smart meters already installed at end of October. There was a strong mobilization of Enedis teams to restore service for all customers following the damages caused by the Alex storm in October. As for tariffs, the French regulator has launched a public consultation on the next TURPE 6, the tariff regulating the public electricity transmission and distribution networks. It is expected to come into force on the 1st of August '21.Moving to international. Hynamics is involved in the construction of the 30-megawatt electrolyzer to produce hydrogen from offshore wind energy in Germany. The construction of the hydraulic dam of Nachtigal in Cameroon is well underway. Nearly 1/3 of the civil engineering work has now been carried out. As regards to financing, the group issued a green convertible bond in September for a nominal amount of EUR 2.4 billion and a negative annual gross yield to maturity of minus 1.68%. This landmark issuance was the largest green convertible bond ever issued. Its proceeds will finance eligible projects as defined in EDF's Green Bond framework. EDF issued also 2 new hybrid notes in September in order to strengthen its balance sheet for a total nominal amount of EUR 2.1 billion. It also signed a EUR 200 million revolving credit facility indexed to ESG criteria. These types of revolving credit facilities indexed to environmental, social and corporate governance criteria amount now to more than EUR 5.5 billion, representing approximately 52% of the group's credit lines. The French government presented beginning of September a stimulus package called France Relance of EUR 100 billion. Its purpose is to help the French economy recover in the context of the COVID crisis. Large amounts of this plan are allocated to areas of activities such as energy renovation of buildings for EUR 6.5 billion, industry decarbonization for EUR 1.2 billion, nuclear for EUR 470 million, hydrogen for EUR 7 billion, electric mobility for EUR 1.9 billion. EDF and its entities are well positioned to benefit from this plan, like Dalkia, for example, for energy renovation for -- or energy efficiency, Framatome for nuclear, Hynamics for hydrogen or Enedis and Izivia for electric mobility.Coming now to the figures. This slide shows the evolution of the group sales by segment. As you can see, the main declines relate to Dalkia and Italy, where sales were impacted by a decrease in gas prices. United Kingdom on the opposite benefited from significant positive prices effect. Nuclear output in France came to 241.1-terawatt hours at end of September 2020, down minus 47.1-terawatt hours compared to 2019. First, the COVID impact has been estimated at approximately 29-terawatt hours as a consequence of 2 elements. Around 40% of this decrease can be attributed to extensive modulation, in order to adapt to the drop in power consumption. Around 60% was related to extended outages caused by sanitary restrictions on sites, which are still implemented. Second, the extended outages of Flamanville 1 and 2 and Paluel 2 contributed to the decrease in nuclear output by an estimated amount of 23-terawatt hours. These reactors have been off-line over the first 9 months of 2020. Beyond those impacts, the closure of the 2 reactors of Fessenheim is the third building block representing a loss of around 6-terawatt hours. Finally, planning optimization performed across the fleet helped mitigate those effects by around 7-terawatt hours. These outages scheduling was implemented to preserve security of supply during winter. French hydro output was up by 24%. This was made possible, thanks to a high level of storage at the end of 2019 and to slightly better than normal hydro conditions for the first half of 2020 versus H1 2019. As a remainder, in 2019, hydro conditions were below average. Hydro conditions were very strong in October, much higher than last 10-year average. It's worth noting that the level of Lake France is currently close to record highs, up 18% compared to historical average. The sales of French generation and supply activities are nearly stable at EUR 20 billion, down by 0.5%. Retreated from the COVID-19 effect, the increase will have reached plus 4.4%. The negative impact of the COVID-19 was estimated at circa minus EUR 1 billion. It's linked to a decrease in electricity consumption and to a loss of circa 29-terawatt hours of nuclear output, as already explained before. By convention, the estimated COVID-19 impact does not include any price effect. Nuclear output was also down by an estimated 25-terawatt hours due to other non-COVID factors, partly counterbalanced by planning outages optimization worth 7-terawatt hours. Hydro output was up by 6.6-terawatt hours. The overall energy volume effect represents a decrease of minus EUR 865 million. The most available driver is the increase in energy prices, representing a positive EUR 1.152 billion. Around half of this amount is linked to the successive increases in the regulated tariff in June '19, February '20 and August '20. The other half is linked to the decrease of the purchases on wholesale markets in the first part of '20 in the context of lower prices. Sales to final customers recorded a EUR 491 million increase, thanks to higher energy saving certificates selling prices, which are passthrough and to the increase in capacity price. Customer losses represented a decrease of minus 9.4-terawatt hours. The other box includes a positive volume effect linked to the sale of capacity in wholesale market, while the resale of purchase obligations had a negative impact because of lower spot prices in H1 '20 compared to H1 '19. Regulated activities sales reached EUR 11.3 billion, a decrease of minus 1.1%. It reflects a contrasted evolution throughout the year. Q1 was a positive 1.6%. Q2 has been hit hard by the sanitary crisis with a negative minus 7.6%, while Q3 showed a recovery with a plus 1.3% growth compared to the same period of 2019. The COVID-19 impact was estimated at circa minus EUR 0.2 billion. It was mainly attributable to a slowdown in new grid connections and to lower distributed volumes. This negative will nevertheless be compensated over the next years through the regulatory catch-up mechanism. The price effect of EUR 238 million is a consequence of the revisions of the TURPE tariff in August 2019 and August 2020. The mild weather in '20, while '19 was a normal year, led to reduced distributed volumes of minus 7-terawatt hours, representing a negative impact estimated at minus EUR 226 million. EDF Renewables sales increased by 6.1% in organic terms to EUR 1.2 billion. COVID-19 impacts are nonmaterial on sales as revenue of broadly all projects are secured by long-term contracts. Electricity output was up by 6.2% at 11.2-terawatt hours. This is a consequence of new facilities commissioned at the end of '19 and to good wind and solar conditions in '20. At end of September '20, EDF Renewables had a record level of 6.7 gross gigawatts of projects under construction.Moving to renewable activities across the group. Sales were up by 2.7% to EUR 3 billion. Wind and solar contributed positively. Hydro had a slightly negative impact as a strong increase in hydro generation was offset by a negative effect of power spot prices. Indeed, I highlight this point, as per the convention used, hydro output was valued at market prices -- at spot market prices and not at hedged prices.Let's now move to energy services. Dalkia's sales decreased by 10.6% in organic terms to EUR 2.8 billion. The impact of COVID was estimated at circa minus EUR 0.2 billion due to less energy and services sold. Most construction works at customer sites were also postponed during the lockdown. The other significant impact on sales was related to the drop in gas prices with limited impact on margin and to a mild weather in Q1 '20.Focusing now on Q3. Sales were stable in organic terms as COVID particularly impacted Q2. At group level, sales and services activities were down by 7.8% in organic terms to EUR 3.7 billion, mainly as a consequence of the sanitary restrictions and the decrease in gas prices. As regards Framatome, sales were down by 6.3% in organic terms to EUR 2.2 billion. The impact of COVID was estimated at circa minus EUR 0.1 billion, it mainly affected the installed base and the projects and components manufacturing businesses while some industrial facilities had to close during the lockdown. Sales of the fuel assembly business were down due to unfavorable temporary effects.In the United Kingdom, sales amounted to EUR 6.7 billion, up 7.8% in organic terms. COVID impact was estimated at circa minus EUR 0.4 billion, mainly driven by lower B2B consumption. Generation benefited from higher realized prices for nuclear power and from the reinstatement of the capacity market, which was suspended during the first 9 months of 2019. Nuclear power output decreased by 4.2-terawatt hours to 32.6-terawatt hours. This was due to Hinkley Point B graphite inspection outages and Heysham 2 maintenance schedule. Generation remained hit by the outages of Dungeness B and by Hunterston B, which came back online in September. As for supply, residential customers' portfolio decreased by 0.7% in a highly competitive environment. In Italy, sales registered a decline of minus 26.2%, down to EUR 4.2 billion. The impact of COVID was limited and estimated at circa minus EUR 0.1 billion. The most significant reduction was attributable to the strong decrease in gas prices as gas is sold as a passthrough to end customers, it had ultimately a limited impact of margin. To a lesser extent, mild weather in Q1 '20 had also a negative volume effect. Electricity business sales were impacted negatively by a decrease in electricity prices, however, with limited impact on margin.As regards to the other international segment, sales were down organically by minus 5.2%. Belgium had a COVID impact estimated at circa minus EUR 0.1 billion, related to a decrease in energy consumption, more sale of energy on the wholesale market at lower prices and a decrease in energy services activities. Lower market prices and unfavorable volume effect in electricity and gas impacted both the B2C and the B2B segments. As for the renewables, Luminus registered strong performance, thanks to increased installed capacity and favorable wind conditions.In Brazil, sales were up by 5% in organic terms. The sales of other activities were down by minus 25.3% to EUR 1.6 billion. As already mentioned, gas prices were down in 2020 compared to 2019. This segment, focused on midstream gas, this price drop, combined with a negative volume effect has also a negative net EBITDA impact. EDF Trading registered a sustained performance. The decrease in revenue by 16.2% compares to 2019, which was an exceptional year. The impact of COVID was estimated at minus EUR 21 million.To conclude, we can summarize the main variations I have just presented as follows: first, 3 negative impacts, which were not anticipated at the beginning of the year. The impact of COVID estimated at circa minus EUR 2 billion. The lower generation in France for around minus EUR 0.9 billion, mainly due to extended outages. And third, a negative gas price effect of around minus EUR 1.4 billion in the context of depressed gas market. On the other hand, 2 positive effects, which were mostly expected. Favorable energy price effects in France and the U.K. and favorable effects related to downstream customers in France, worth circa plus EUR 0.5 billion. The so-called other elements were mainly attributable to weather effects on regulated activities.Let's move to Slide 23. We confirm the financial guidance and medium-term outlook for the group, excluding additional reinforced sanitary restrictions. EBITDA target for 2020 is in the range of EUR 15.2 billion to EUR 15.7 billion. This guidance takes into account both the upgraded nuclear estimates in the range of 325 to 335-terawatt hours for 2020, a negative impact related to gas activities. I am very comfortable with this target, and I hope we will reach the high end of the range. Medium-term target of reducing operating expenses of EUR 500 million in constant euros in 2022 compared to 2019. Disposal plan of approximately EUR 3 billion over the period 2020 to 2022 and net financial debt-to-EBITDA ratio of less than 3x for 2020, which is an improvement compared to our latest guidance and of approximately 3x for '21 and '22. This ends my presentation for 9 months 2020 sales and highlights.I now open the floor to your questions.

[Operator]

[Operator Instructions] We have had 4 questions come through. And your first question comes from the line of Rob Pulleyn from Morgan Stanley.

[Robert John Pulleyn, Equity Analyst & Commodity Strategist]

Two questions, if I may. So the first one, may we ask following the Ecology Minister's testimony to the national assembly, what do you see as the main issue remaining for the resolution of this nuclear reform to be approved by the EU? It sounded quite encouraging from the minister. And is before year-end still the expectation? That's the first question on the big topic, and then I have a follow-up, if that's okay.

[Xavier Girre]

Thank you for your question. In fact, as you know, the company is not part of these discussions between the French state and the European Commission. So I will not comment that.

[Robert John Pulleyn, Equity Analyst & Commodity Strategist]

Okay. That's very understandable. In which case, could I ask a different question and that is regarding, there was a media article last week in context regarding the potential for new EPRs in France. I was interested in EDF's perspective on the suggestion of the structure, where the state would take a direct stake in such projects, and also the implied free cash flow and net debt profile for EDF that was mentioned.

[Xavier Girre]

Yes. Thank you for this question. I mean, as you know, we are preparing a dossier for the government that has to be submitted mid '21. And we have been asked to do that. We are still working on that. And in fact, any intermediate document doesn't call for any specific comment.

[Operator]

Your next question comes from the line of Olivier Van Doosselaere from Exane BNP Paribas.

[Olivier Pascal Michel Van Doosselaere, Analyst of Utilities]

I had 3, if I may. First one is on capacity payments. So we have seen some clearing prices on auctions in France at quite high level this year for capacity payments for next year and the year after. I was hoping if you could help us to understand better what the impact of that might be. And if the incremental revenues would be taken on the year of delivery or actually on the year that the auction is actually carried out, which would be this year? Second one is, you mentioned the EUR 2.4 billion convertible, which you've issued in September. I think we've now surpassed the conversion price of 10 -- I think it's EUR 10.9 per share. So I was hoping you could help us understand a bit better how and when conversion of that bond into equity could occur. And then finally, I've heard what you just said on the regulatory reforms, so -- actually, what you can say. But I was wondering if on the details, are you still favorable of a corridor being built in the new regulation or actually would you prefer it to be a fixed price, a fixed CFD, and do you have any indication in terms of how discussions are going and what we might get as a final model?

[Xavier Girre]

Thank you very much for these questions. So as regards to the regulation, what's very important to us is define that the nuclear assets be remunerated at the proper level. Then being a corridor of price is a second question. But what's very important is the level of this remuneration in order to cover all the costs and to give a proper remuneration. And once more, I will not comment more about current discussions because we are not part directly to them. As regards to your second question concerning the convertible bond, to think about that, of course, you've noted that the current price of our share is higher than the conversion rate, which is EUR 10.93. You have noticed also that this convertible can be converted from the 14th of December 2020. And you have also certainly noted that yesterday, the green convertible bond itself was trading at EUR 14.34 yesterday night. As you know, it's a listed product, a listed bond, which was trading at EUR 14.34. As regards to your first question concerning capacity, June auction cleared at high prices, you're absolutely right, at EUR 47.4 for delivery in '21, whereas the previous auction was at EUR 19.2. And this was due because of tensions in the system due to lower nuclear output assumptions. Following the upgrades in the nuclear output assumptions, prices normalized in September and October at EUR 29.5 and EUR 32.7, respectively, for deliveries in '21. Market reference price for 2020 stood at around EUR 20 per kilowatt and current calculation of market price for '21 is around EUR 30 per kilowatt, knowing that there is still 1 auction to be held in '20 for '21. The price levels will represent a significant upside for EDF, all other things being equal.Just bear in mind that the implied increase doesn't translate directly into '21 EBITDA, and I'd like to develop 2 points. First, as regards to 2020, the positive impact of the increased capacity prices is mostly offset by the cost of capacity shortage as the availability of the nuclear fleet will be lower than what was anticipated at the beginning of the year. And second, regarding 2021, as already said, there is still one auction to be held, which could clear at a lower level than the current reference price. And a large portion of the EBITDA impact will be recognized only at the time of the energy delivery to the end customers. This means that the potential upside associated with recent price levels would be spread over 2 years.

[Operator]

Your next question comes from the line of Emmanuel Turpin from Societe Generale.

[Emmanuel Philippe Turpin, Equity Analyst]

My first question is about the COVID impact. You gave us an impact on revenues at EUR 2 billion, up from EUR 1.3 billion in H1. At the H1 level, the H1 stage, you had given us an impact on EBITDA directly. Would you mind giving us the EBITDA impact for 9 months, even though we understand that you typically communicate on your revenues for this quarter? And second question would be on the plan by the French authorities to cut solar tariffs for contracts predating 2011. This was now put in the finance law for next year. Although we don't have all the details, would you mind giving us your view about how much of your -- how much capacity you currently own in France that for which PPAs were signed or contracts were signed before 2011, i.e., contracts which are potentially at risk? And maybe an idea of how much EBITDA you currently derive from those assets? And lastly, still on renewables. You mentioned 6.7 gigawatt of gross capacity under construction. Would you have, as it stands, your group share of those 6.7 gigawatts? And those projects under construction are widespread, geographically speaking. I guess I would have loved to hear your view about how you see risk on average cost of capital differentials between, let's say, a low-risk geography like France and a higher-risk geography like India. Short of giving us your absolute work, how much more risky do you think India is versus France, for instance?

[Xavier Girre]

Thank you, Emmanuel. So as regards to your first question, sorry, but I will not give the impact on the EBITDA on 9 months. We'll comment on that, of course, at the end of the year. Second, as regards to your question about the photovoltaic tariffs, yes, you're right. The government confirmed its plan to dispute the conditions granted to some solar farms commissioned between 2006 and 2010. An amendment to the draft budget law has been presented a week ago, however, the details of the revisions are not known yet, and they will probably not be disclosed maybe before January next year, we'll see that. As regards EDF, EDF Renewables owns assets that are targeted by this potential revision, its potential exposure amounts to 150-megawatt net. However, we do not consider that we enjoyed any excessive remuneration. And we intend to defend our case with the French authorities when the detailed parameters are known. As regards to your question about the renewables, so yes, we have currently under construction 6.7-gigawatt gross capacity, which is a very significant increase in comparison with December 2019, at which date, we had only 5-gigawatt gross under capacity. This is spread between North America for 2.9-gigawatts. Europe, including Israel, 2-gigawatt. And the other part of the world for 1.7-gigawatts. And as regards the different technologies, it's a 3.5-gigawatt wind onshore, 1.6-gigawatt wind offshore, 1.3 solar and 0.2 storage.

[Emmanuel Philippe Turpin, Equity Analyst]

And your view about relative risk between, let's say, India and France. Maybe how do you, as a CFO, work on FID, how do you look at risk differential?

[Xavier Girre]

Well, India is really a very quick growing country in this business as for many other. And definitely, we consider it's a very significant country that we intend to develop -- in which we intend to develop our business for the renewables, in particular. Of course, we do not shoot for the same return on capital in India as compared with France. And we do that for any -- for all the countries we invest in. Of course, we adapt our demand as regards return on capital.

[Operator]

Your next question comes from the line of Peter Bisztyga from BofA Securities.

[Peter Andrew Bisztyga, Head of Pan]

So my first question is, when can we expect to hear an update on Hinkley Point C and Flamanville 3 because you indicated sort of several months ago that you could experience some further delays as a result of the coronavirus pandemic? And then my second question is just on your net debt guidance. You expect net debt below 3x this year, and then around 3x next year. So I'm a little confused how leverage could be higher next year unless you either don't expect any sort of EBITDA recovery in 2021, or you expect very significant negative cash outflow. So I was just hoping you could shed some light on the matter, please?

[Xavier Girre]

Thank you for these questions. As regards the net debt-to-EBITDA ratio, our point is that we have updated it for 2020, and we have improved it on the basis of our last forecast. As regards '21 and '22, our midterm plan is under preparation. And therefore, the time being, there is no specific update. So that's why we have confirmed what we have already announced to the market for '21 and '22 as regards net debt-to-EBITDA ratio. And the key point here is only that we consider that it is a key point to maintain the sustainability of our balance sheet and on our rating. And this is something we are very focused on. Of course, we'll update that in February. As regards to HPC, yes, as you know, strict measures were implemented on site, which enables, in fact, to keep the site constantly working even if workforce had been reduced by half during the lockdown. So a review on schedule and cost, taking into account the COVID-19 impact, is still ongoing. And it is expected to be finalized in December. So we'll be in a position to comment on that in December.

[Operator]

Your next question comes from the line of Sam Arie from UBS.

[Samuel James Hugo Arie, Managing Director and Research Analyst]

Just have one question, which is a follow-up, I think, to the answer you gave minutes ago to Olivier about the -- your view on the potential nuclear regimes that might be introduced in France. And you said, I think, you were more focused on the level of remuneration than the [ model ]. So can you comment, please, on what's your latest view on the level of remuneration that's needed for the nuclear fleet when you factor in the new numbers on the Grand Carénage and the fair remuneration that you expect to receive?

[Xavier Girre]

Thank you for your question. In fact, I will not give any specific figure. Once more, I think what's important to keep in mind is the gist of our case, which is that the nuclear assets are specific assets. They are very long-term assets. They have significant fixed costs. And it's very important that they get a proper regulation, a proper remuneration, which is not the case today because, as you know, their remuneration is capped by the ARENH mechanism. And the ARENH mechanism, having no flow, they have no protection against a downward volatility of the prices. Having said that, I will not comment more because as you know, discussions are going and once more, we are not direct part of these discussions.

[Samuel James Hugo Arie, Managing Director and Research Analyst]

Well, if I may ask a short follow-up question. But I understand you might not have a specific answer to my kind of question about price, but maybe if you give some kind of range. And I think that what I'm looking for is an EDF view, not any feedback from the government conversations. But I suppose that the EU is going to come out at some point with a view on what they approve, that includes some kind of comment on the level of pricing where -- which would be built in. And I suppose what we'd hope to be able to do is compare that to what you believe you need in order to cover the cost of the Grand Carénage and a fair return. And I don't know maybe if you thought prices were in the EUR 45 to EUR 50 range, you'd be happy. Maybe they need to be EUR 55 to EUR 60. It would be super helpful just to have the EDF company view of what would be the level of remuneration that meets the priorities you gave an answer to Olivier's question earlier.

[Xavier Girre]

Thank you for your questions. Well, I will not give a figure. It's very important that discussions are going on, and I will not give a figure from EDF's point of view. Two points to be corrected in the current regulation: one's the level, EUR 42 per megawatt hour is vastly too low; and second point, there is no floor. So these 2 points, we consider, have to be corrected in order once more to give a proper, reasonable, consistent regulation to these key assets.

[Operator]

Your next question comes from the line of Ahmed Farman from Jefferies.

[Ahmed Farman, Equity Analyst]

Just a couple of quick questions from my side. I'm just hoping if you would share with us the overall COVID impact assumed in your EBITDA guidance for the full year. Just to sort of give us -- so we have a sense of sort of -- and can understand how first half and compare it with the second half? And then secondly, I was just sort of interested in your thoughts on how if you could share any thoughts into how the Q4 trends have been impacted as we have some additional lockdown measures in some of the markets you operate in? And if you are seeing any significant effects there.

[Xavier Girre]

Well, as regards to the EBITDA, I will not give figures, forecast figures on COVID-19 impact. I gave a detailed analysis of our EBITDA impact on H1. Today, I comment sales. Of course, we will give detailed analysis of our EBITDA impact for the full year. As regards Q4 and our guidance, we take into consideration in our guidance and also in my comments about this guidance, the current state of the decisions that have been taken by the government. If there were very significant general constraints, new constraints to be implemented, of course, this may have an impact on our activity. But the current state of the decisions taken by the governments are embedded in our guidance.

[Operator]

We have another question from the line of Olivier Van Doosselaere from Exane BNP Paribas.

[Olivier Pascal Michel Van Doosselaere, Analyst of Utilities]

Just a quick follow-up question. I was wondering if you would expect, under the new regulation, to still be allowed to receive the capacity payments?

[Xavier Girre]

All these questions, which are very relevant questions, are and have to be dealt with in all detail. And so it's not the time to comment upon that. Once more, these days, they are -- the discussions are going on between the state and European Commission. And I will not comment on any point on the discussions we are not part of.

[Operator]

Thank you. There are no further questions at this time. Please continue. There are no further questions from the phone lines, please continue.

[Unknown Executive]

So I guess, time is up. We had 2 questions in writing on the EBITDA consensus, which I think Xavier already explained. So if no other question, I think we can close the call.

[Operator]

We have had one further question come through. Are you happy to take it?

[Unknown Executive]

Yes, please. The very last one, please.

[Operator]

The last question is from the line of Vincent Ayral from JPMorgan.

[Vincent Jean Michel Ayral, Analyst]

Yes, I understand that it is difficult to comment on the [indiscernible] projects and discussions ongoing between the government and the commission. However, I believe it may be possible to comment from an EDF point of view and the government have been asking for EDF to get prepared for the restructuring and implementation of this project once we have a green light. And I would be interested to know what is basically the time line for you to get an approval from the commission and agreement between the commission and the government in order to be able to implement [indiscernible] by early 2022, is the current deadline you're having. So would it be possible to give us a bit of visibility on how long can you still wait before putting things into work and get EDF restructuring ultimately done and dusted ahead of the elections? Is it by the end of this year, the end of Q1 or the end of H1?

[Xavier Girre]

Thank you, Vincent. What's key for us is to be in a position to invest in the long run in all the different dimensions of our strategy, CAP 2030, meaning low carbon generation, meaning services, meaning international business. And it's exactly what we are doing. We have quickly and appropriately reacted to the crisis by setting an action plan, cost cutting, disposal, refinancing with hybrids, with convertible. And definitely, we are focused on investing on our strategy and on maintaining our rating, which is a good one and appropriate one in order to be in good position to finance our strategy. As regards the regulation, it's also a key point in order to give an appropriate visibility on our remuneration for our existing assets. There are, of course, other key points that we are dealing with, and I just described some of them. But as regards the schedule of this regulation, I will not comment neither because, of course, it's dependent from the discussions that are currently going on and of which we are not part. But clearly, we are very well focused on our energy implementation, very well focused on the implementation of our action plans. And as you've seen, we continue to grow in our key businesses, in particular, in renewables. And definitely, we are on track in order to implement CAP 2030.

[Operator]

There are no further questions on the phone lines.

[Xavier Girre]

Perfect. So I think we can close the call. Thank you. Thank you very much, everybody.

[Unknown Executive]

Thank you very much. Have a nice day, and see you soon.

[Operator]

That does conclude our conference for today. Thank you for participating. You may all now disconnect.