FY 2017 RESULTS. March 8 th, 2018

Transcription

1 FY 2017 RESULTS March 8 th, 2018

2 AGENDA Highlights 2017 performance 2018 outlook Additional material FY 2017 RESULTS 2

3 HIGHLIGHTS SUCCESSFUL STRATEGIC REPOSITIONING Our 3-year plan is now 90% completed after 2 years Strategic pivot is behind us ENGIE is ready for growth FY 2017 RESULTS 3

4 We help our clients improve their energy usage and we produce and distribute ever cleaner energy

5 HIGHLIGHTS STRATEGY PAYING OFF EBITDA % EBITDA yoy organic growth (1) -9% +5% Faster growing Contracted / regulated 70% 89% Less risky 75% 91% Low CO2 Cleaner ROCEp (2) 6.5% 7.2% More profitable (1) Organic growth 2015 vs 2014 and 2017 vs 2016 (2) Based on productive capital employed end of period (excluding assets under construction for 5.1bn) FY 2017 RESULTS 5

6 HIGHLIGHTS 2017 TARGETS ACHIEVED, SOLID 2018 EXPECTED In bn Actual EBITDA 9.3 Indication/ Guidance Low end of NRIgs (1) without IFRS 5 D&A uplift 2.6 Mid of range Net Debt (2) / EBITDA 2.2x 2.5x 2018 Strong organic growth expected Dividend increased to 0.75 (1) NRIgs excluding IFRS 5 accounting treatment for E&P (E&P classified as discontinued operations ), i.e. NRIgs excluding the D&A upside ( 0.1bn) but including E&P underlying contribution ( 0.2bn) (2) Net debt pro forma E&P interco debt FY 2017 RESULTS 6

7 HIGHLIGHTS PASSED THE TIPPING POINT EBITDA (1) In bn, % yoy Non-core ~ 13bn sold % +5% +6% % +18% Growth engines ~ 14bn growth Capex over % +0% % +3% Merchant optimized = 2018 Client solutions Networks Generation - Renewable & thermal contracted Generation - Merchant Non-core sold (1) Unaudited figures, excluding unallocated corporate costs FY 2017 RESULTS 7

8 HIGHLIGHTS STRONG DYNAMICS DRIVING GROWTH B2B & B2T services In bn / In % % 5.1% 5.4% 17 ~18 ~6% Global regulated assets (1) In bn ~ e e Revenues EBIT margin Capacity build out In GW, at 100% Power price In /MWh ~9 GW Under construction Secured ~5 GW additional ambition ~2-3 RES Belgium Baseload Y+1 (2) ~2-3 Thermal Contracted COD in 2018 COD in 2019 COD by 2022 COD by YTD (1) Regulated Asset Base or Capital employed (2) Yearly average of daily prices by quotation year FY 2017 RESULTS 8

9 HIGHLIGHTS A PROFOUNDLY CHANGED COMPANY PORTFOLIO REFOCUSED Net recurring income group share In bn EBITDA back to organic growth In %, yoy organic change % Growth 2.6 (0.4) (1) 2018e >+6% +0.1 Financial net debt reduced In bn reported FX & Scope out Scope in Organic 2018e 2018e <21 (1) Main assumptions: no E&P and LNG contributions, average weather in France, full pass through of supply costs in French regulated gas tariffs, no significant accounting treatment changes except for IFRS 9 and IFRS 15, no major regulatory and macro-economic changes, market commodity prices as of 12/31/2017, average forex for 2018: /$: 1.22; /BRL: 3.89, no significant impacts from disposals not already announced. FY 2017 RESULTS 9

10 AGENDA Highlights 2017 performance 2018 outlook Additional material FY 2017 RESULTS 10

11 2017 PERFORMANCE STRATEGY TRANSLATING INTO FINANCIALS Disposals key to repositioning & net debt reduction Re-investment program starting to pay off, with increasing contribution in LEAN 2018 leading to improved competitiveness Growth offsetting dilution FY 2017 RESULTS 11

12 2017 PERFORMANCE 2017: STRONG NET RECURRING INCOME GROWTH In bn, % yoy gross 2.7 NRIgs (0.1) E&P IFRS 5 D&A uplift 2.6 (1) NRIgs (0.2) E&P Underlying contribution 2.4 (2) NRIgs Reported March 2017 guidance EBITDA 2016 Continued operations +7% +3% -2% NRIgs reported IFRS 5 D&A uplift Point de passage E&P underlying contribution NRIgs continued operations (1) NRIgs excluding IFRS 5 accounting treatment for E&P (E&P classified as discontinued operations ), i.e. NRIgs excluding the D&A upside ( 0.1bn) but including E&P underlying contribution ( 0.2bn) (2) Excluding contribution from E&P classified as discontinued operations FY 2017 RESULTS 12

13 2017 PERFORMANCE SOLID ORGANIC GROWTH By main effect In bn +5.3% 9.5 (0.1) +0.0 (0.5) Nuclear tax FX Scope Organic EBITDA 2016 EBITDA 2016 Restated EBITDA 2017 Organic variation by reportable segment In bn NORTH AMERICA LATIN AMERICA AFRICA/ASIA BENELUX FRANCE EUROPE INFRASTRUCTURES GEM & LNG excl. France & Benelux EUROPE OTHER FY 2017 RESULTS 13

14 2017 PERFORMANCE CLIENT SOLUTIONS ACCELERATION IN CLIENT SOLUTIONS In bn, % yoy organic B2B B2C B2T % B2T % B2C Restated for FX & Scope French supply restructuring Services in Benelux Power in France Gas in France Temperatures French cogeneration % B2B EBITDA 2016 EBITDA 2017 FY 2017 RESULTS 14

15 FOCUS ON 2017 PERFORMANCE NETWORKS RESILIENT IN CHALLENGING CONDITIONS In bn, % yoy organic 3.8 (0.03) (0.03) Prices Volumes Lean Other % International Restated for FX & Scope France tariffs Latam tariffs Storage Assets commissioning Temperatures 3.4-2% Infrastructure Europe EBITDA 2016 EBITDA 2017 FY 2017 RESULTS 15

16 2017 PERFORMANCE GENERATION - RES & THERMAL CONTRACTED EBITDA INCREASE DESPITE ADVERSE CLIMATE EFFECTS In bn, % yoy organic (0.17) Prices Volumes Lean Other % Renewable Restated for FX & Scope Brazil spot prices France hydro Assets commissioning Brazil hydro One-offs 2017 in Middle East & Latam Brazil 2016 provision reversal % Thermal contracted EBITDA 2016 EBITDA 2017 FY 2017 RESULTS 16

17 2017 PERFORMANCE GENERATION - MERCHANT MERCHANT FLEET NOW OPTIMIZED TO CAPTURE POTENTIAL PRICE INCREASES In bn 0.8 (0.07) (0.26) (0.05) Prices 0.6 Nuclear prices & hedging In /MWh 100% 100% 92% 61% 21% Restated for FX, Scope & Nuclear tax Nuclear Spreads (EU, Australia) Midstream gas Volumes Nuclear outages Australia Lean Australia restructuring Generation Europe Achieved prices MtM (1) Hedged ratios & prices EBITDA 2016 EBITDA 2017 (1) Correspond to hedged prices for hedged positions and Mark to Market for open positions as of Dec 31st 2017 FY 2017 RESULTS 17

18 2017 PERFORMANCE LEAN 2018 AHEAD OF PLAN, NEW TARGET FOR 2018 Net EBITDA increase, in bn +8% ~ % ~ Lean ( ) FY 2017 RESULTS 18

19 2017 PERFORMANCE FROM EBITDA TO NET INCOME From EBITDA to NRIgs From NRIgs to NIgs (1) yoy EBITDA 9.3bn 9.5bn (0.2) D&A and others (4.0) (3.9) (0.2) COI (2) 5.3bn 5.6bn (0.4) Financial result (1.1) (1.2) +0.2 Income tax (3) (1.1) (1.3) +0.2 Minorities (0.8) (0.6) (0.1) NRIgs continued 2.4bn 2.5bn (0.1) NRIgs discontinued 0.3bn 0.0bn +0.2 NRIgs bn MtM below COI (0.3) Impairments (1.3) Restructuring costs (0.7) Capital gains +1.1 Others (4) +0.1 NIgs bn NRIgs bn 2.5bn +0.2 (1) 2016 figures restated for IFRS 5 (E&P accounted as discontinued operations) (2) After share in net income of associates (3) Income tax includes the nuclear contribution in 2016 for (117)m. In 2017, the nuclear contribution is included in EBITDA (4) o/w tax impacts for 1.6bn (3% dividend reimbursement, change of Corporate tax in France and US and tax effect on non-recurring element) notably compensated by onerous contracts and new accounting treatment for long-term gas supply contracts -1.2bn FY 2017 RESULTS 19

20 2017 PERFORMANCE STRONG FINANCIAL STRUCTURE Financial net debt & cost of gross debt In bn 4, ,9 3.14% 2.99% % % ,4 2,9 Dec 14 Dec 15 Dec 16 Dec 17 Pro forma (1) 2,4 Financial net debt/ebitda 2.5x Economic net debt/ebitda 2.4 (1) 4.0 (1) 3.9 (1) 2.2 (1) Dec 16 Dec 17 Dec 16 Dec 17 (1) Net debt pro forma E&P interco debt FY 2017 RESULTS 20

21 AGENDA Highlights 2017 performance 2018 outlook Additional material FY 2017 RESULTS 21

22 OUTLOOK 2018 OUTLOOK BY BUSINESS Impacts on EBITDA CLIENT SOLUTIONS Backlog conversion & 2017 acquisitions Margin expansion NETWORKS Storengy regulation (France) Tariffs in Latam GENERATION RES & THERMAL CONTRACTED Cemig hydro concessions (Brazil) Hydrology improvement (France, Brazil) Forex (BRL, USD) - GENERATION MERCHANT = Lean & contract renegotiations Outright achieved prices & thermal spreads - + FY 2017 RESULTS 22

23 2018 OUTLOOK 2018 GUIDANCE: SUSTAINED ORGANIC GROWTH Net recurring income group share In bn NRIgs bn without E&P and LNG contributions D&A uplift (1) (3) 2.36 (2) +8% Dividend: Final dividend 2017 to be paid in May New policy in reported 2017 excluding E&P and LNG 2018e Leverage & rating: A category rating Net debt / EBITDA 2.5x (1) Coming from IFRS 5 treatment of E&P (2) Without E&P and LNG contributions and without IFRS 9 and IFRS 15 treatments (3) Main assumptions: no E&P and LNG contributions, average weather in France, full pass through of supply costs in French regulated gas tariffs, no significant accounting treatment changes except for IFRS 9 and IFRS 15, no major regulatory and macro-economic changes, market commodity prices as of 12/31/2017, average forex for 2018: /$: 1.22; /BRL: 3.89, no significant impacts from disposals not already announced. FY 2017 RESULTS 23

24 2018 OUTLOOK STRONG CONFIDENCE LEADING TO HIGHER DIVIDEND Dividend Per Share (DPS) In per share Previous DPS policy Upgraded 2018 DPS % new Indicative 71% 66% 70% pay out ratio (1) (1) Based on NRIgs from continued operations; calculated on mid range guidance for 2018 FY 2017 RESULTS 24

25 AGENDA Highlights 2017 performance 2018 outlook Additional material Strategy execution Update on transformation plan 2017 financials 2018 outlook FY 2017 RESULTS 25

26 ADDITIONAL MATERIAL: STRATEGY EXECUTION DERISKED PORTFOLIO IMPROVING EARNINGS VISIBILITY EBITDA split (1) in % 70% regulated / contracted 28% 42% 36% 89% regulated / contracted Disposals mostly in merchant activities 30% 53% Growth Capex focused on growth engines (regulated/contracted) 11% Growth Capex split in % Regulated / contracted 61% Merchant 49% % 11% Further progress in 2018 with new storage regulation in France Regulated Contracted Merchant (1) Excluding unallocated corporate costs FY 2017 RESULTS 26

27 ADDITIONAL MATERIAL: STRATEGY EXECUTION MORE FOCUSED AND MORE PROFITABLE ROCEp (1) In % Client Solutions 10.6% 12.2% Capital employed (2) in bn 65bn (3) 13% 53bn 19% Infrastructures 7.4% 7.1% 34% 43% 12% RES & Thermal Contracted 10.5% 10.2% 13% 28% % 17% % Group 7.2% 6.5% Client solutions Networks Renewable & thermal contracted Merchant & other (1) Based on industrial capital employed end of year excluding assets under construction for ~ 5bn (2) End of period capital employed (3) Adjusted to include capital employed related to US merchant assets for ~ 4bn FY 2017 RESULTS 27

28 ADDITIONAL MATERIAL: STRATEGY EXECUTION ACCELERATING DECARBONIZATION CO 2 emissions scope 1 in Mt 149 Strong reduction in CO 2 emissions (2) % 89-85% (1) Ambitious carbon intensity (3) reduction target: -20% by 2020 vs 2012 (1) <20 Largest corporate issuer of green bonds In GW To date Long term strategy compliant with 2 C scenario Coal capacity % 6.1 (1) CO 2 emissions from electricity generation (2) Scope 1 (3) CO 2 emissions ratio FY 2017 RESULTS 28

29 ADDITIONAL MATERIAL: UPDATE ON TRANSFORMATION PLAN STAYING WELL AHEAD OF SCHEDULE target GROWTH Capex 97% 14.3bn (1) (o/w 1bn innovation/ digital) 10.2bn invested + 3.7bn committed Focus on growth engines & value creation PORTFOLIO ROTATION ~90% 15bn (2) (net debt reduction) 11.6bn closed + 1.6bn signed Reduce exposure to coal & merchant assets LEAN % UPGRADE 1.3bn (net EBITDA increase) 0.9bn achieved + 0.4bn identified Accelerate internal transformation (1) Excluding E&P and LNG Capex (2) Net debt impact (cash and scope) FY 2017 RESULTS 29

30 ADDITIONAL MATERIAL: UPDATE ON TRANSFORMATION PLAN SIGNIFICANT PROGRESS MADE ON PORTFOLIO ROTATION Net debt impact In bn 13.2bn of disposals executed Ahead of plan with already ~90% executed to date ~ 9bn closed in , mainly: US merchant & coal assets 8.7 3bn closed to date in 2018: E&P, Loy Yang B, Egaz-Degaz Booked as of Dec 2017 Closed 2018 YTD Signed (closing in progress) Process launched Total net debt reduction LNG disposal expected to close in 2018 (1) Full year impact FY 2017 RESULTS 30

31 ADDITIONAL MATERIAL: UPDATE ON TRANSFORMATION PLAN INVESTMENTS FOCUSED ON GROWTH BUSINESSES Growth Capex In bn Capex plan by geographies Thermal contracted Thermal merchant 7.1bn 50% B2B 4.6bn 32% France 36% Latam 33% RES bn (1) 1.8 B2T 1.2 Tuck-in acquisitions 0.5 Outside France 2.0 France 0.5 B2C Europe 15% Rest of the world 16% 2.6bn 18% (1) Net of DBSO proceeds; excl. E&P and LNG upstream/midstream Capex (including Touat and Cameron) for 0.3bn and corporate Capex for 0.2bn FY 2017 RESULTS 31

32 ADDITIONAL MATERIAL: UPDATE ON TRANSFORMATION PLAN VISIBLE RETURNS FROM GROWTH CAPEX Growth Capex In bn Annual EBITDA Contribution (3) In bn Capex Capex Capex Tabreed bn of contributive (2) Capex, with full impact expected in 2019: 1.5bn at EBITDA level 1.1bn at COI level 0.55bn at NRIgs level 1bn invested in digital & innovation with medium-term to long-term contribution Non contributive Capex at EBITDA level in period (2) Low CO 2 power generation Global networks Client solutions (1) Net of DBSO proceeds; excl. E&P and LNG Capex (Touat and Cameron) for 0.4bn and corporate Capex for 0.2bn (2) Excl. Capex related to Synatom (nuclear dismantling), Nordstream 2 (mezzanine loan), Jirau (residual Capex with no additional contribution) (3) Including share of net income of associates (notably Tabreed) FY 2017 RESULTS 32

33 ADDITIONAL MATERIAL: UPDATE ON TRANSFORMATION PLAN INVESTMENT PROGRAM PAYING OFF In bn Contribution in Contribution in ~ 14bn growth Capex NRIgs 2015 NRIgs bn NRIgs contribution by 2019 FX Prices (outright) Volumes & Other Scope out Lean 2018 Investments Investments Transformation plan FY 2017 RESULTS 33

34 ADDITIONAL MATERIAL: 2017 FINANCIALS 6.5BN GROWTH CAPEX IN 2017 ON CORE STRENGTHS Breakdown by nature In bn Growth Capex by metiers In bn Main projects Low CO Low CO 2 o/w 72% Renewable 44% Global Networks 19% Brazil Hydro concessions CEMIG ~1.0 Thermal Brazil & Latam ~0.7 Solar (Brazil, Latam, France, India..) ~0.4 Wind (LCV minority buy-out, Brazil) ~ Growth (1) Maintenance 2.5 FY 2016 FY % 6.5bn (1) Tuck-in acquisitions Client Solutions 17% Organic Capex Global Networks GRTgaz ~0.4 GRDF ~0.3 Nord Stream 2 ~0.3 Client Solutions Tuck-in acquisitions (Tabreed, Keepmoat, Icomera, EVBox) ~1.1 Suez Capital increase ~0.2 Ohio contract ~0.1 (1) Net of DBSO proceeds FY 2017 RESULTS 34

35 ADDITIONAL MATERIAL: 2017 FINANCIALS CASH EQUATION IN SURPLUS In bn 9.3 EBITDA 2017 (1.0) Restructuring & others 8.3 (0.9) Tax cash expenses (0.4) Net financial expenses 1.3 WCR Cash equation 8.3 CFFO bn Dividends 0.6bn Dividends to minorities 0.1bn Hybrids coupon 4.2bn Net Capex (1) Cash generated from operations before income tax and WCR (1) Net Capex = gross Capex disposals (cash and scope impact on net debt) FY 2017 RESULTS 35

36 ADDITIONAL MATERIAL: 2018 OUTLOOK 2018 EBITDA INDICATION (1) By growth engine In bn 9.3 (0.2) (0.4) FX Scope out (2) Scope in RES & Thermal Contracted Networks Client Solutions Merchant & other EBITDA 2017 EBITDA 2017 EBITDA 2018 Restated EBITDA 2017 FX scope out Point de passagescope in low co2 infrascustomer solutions merchant & other EBITDA 2018 By reportable segment (3) NORTH AMERICA LATIN AMERICA AFRICA/ASIA BENELUX FRANCE EUROPE excl. France & Benelux INFRASTRUCTURES EUROPE GEM & LNG OTHER (1) Main assumptions: no E&P and LNG contributions, average weather in France, full pass through of supply costs in French regulated gas tariffs, no significant accounting treatment changes except for IFRS 9 and IFRS 15, no major regulatory and macro-economic changes, market commodity prices as of 12/31/2017, average forex for 2018: /$: 1.22; /BRL: 3.89, no significant impacts from disposals not already announced. (2) Scope impact of disposals already announced (3) Gross variations FY 2017 RESULTS 36

37 DISCLAIMER Forward-Looking statements This communication contains forward-looking information and statements. These statements include financial projections, synergies, cost-savings and estimates, statements regarding plans, objectives, savings, expectations and benefits from the transactions and expectations with respect to future operations, products and services, and statements regarding future performance. Although the management of ENGIE believes that the expectations reflected in such forwardlooking statements are reasonable, investors and holders of ENGIE securities are cautioned that forward-looking information and statements are not guarantees of future performances and are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of ENGIE, that could cause actual results, developments, synergies, savings and benefits to differ materially from those expressed in, or implied or projected by, the forwardlooking information and statements. These risks and uncertainties include those discussed or identified in the public filings made by ENGIE with the Autorité des Marchés Financiers (AMF), including those listed under Facteurs de Risque (Risk factors) section in the Document de Référence filed by ENGIE (ex GDF SUEZ) with the AMF on March, (under no: D ). Investors and holders of ENGIE securities should consider that the occurrence of some or all of these risks may have a material adverse effect on ENGIE. FY 2017 RESULTS 37