STRATEGY AND OUTLOOK

Size: px

Start display at page:

Download "STRATEGY AND OUTLOOK"

Marybeth Williamson
6 years ago
Views:

2 STRATEGY AND OUTLOOK

5 STRATEGY AND OUTLOOK

8 STRATEGY AND OUTLOOK

11 STRATEGY AND OUTLOOK

13 STRATEGY AND OUTLOOK

16 STRATEGY AND OUTLOOK

19 STRATEGY AND OUTLOOK

22 STRATEGY AND OUTLOOK

24 STRATEGY AND OUTLOOK

26 STRATEGY AND OUTLOOK

28 STRATEGY AND OUTLOOK

31 STRATEGY AND OUTLOOK

34 STRATEGY AND OUTLOOK

38 STRATEGY AND OUTLOOK

40 STRATEGY AND OUTLOOK

43 STRATEGY AND OUTLOOK

45 STRATÉGIE ET PERSPECTIVES

46 FINANCIAL STATEMENTS

47 2016 KEY FIGURES: REVISED TARGETS DELIVERED TARGETS ACTUAL France nuclear output: TWh 384TWh EBITDA (1) : 16.0bn 16.3bn 16.4bn Net financial debt/ebitda < 2.5x 2.3x Payout of Net income excluding non-recurring items (2) : 55% to 65% Proposed payout of 60% 0.90/share (1) Including EBITDA impact relating to the adjustment in regulated tariffs for the period from 1 August 2014 to 31 July 2015 following the French State Council s decision of 15 June 2016 (2) Adjusted for the remuneration of hybrid bonds accounted for in equity

48 OPERATING PERFORMANCE NUCLEAR GENERATION France: output at 384.0TWh Impact of the programme of additional controls, in particular on steam generators Unplanned outage rate at historical low Good management of planned outages United Kingdom: output at 65.1TWh, record high since 2003 RENEWABLES Commissioning by EDF EN of 1.2GW of wind and solar capacity 1.8GW of EDF EN projects under construction CUSTOMERS France: nearly 90% market shares in B2C and ~65% in B2B Europe: strong performance in B2C markets in UK, Italy and Belgium ENERGY SERVICES Significant expansion of heating network activities Strong increase of renewable energy sources in the fuel mix

49 PERFORMANCE PLAN IN LINE WITH ANNOUNCED TRAJECTORY OPEX Reduction in OPEX (1) in 2016: 0.3bn vs Reduction target 0.7bn in bn in 2019 CAPEX Net investments (2) in 2016: 11.8bn, - 0.6bn vs Target ~ 10.5bn in 2018 Working Capital Requirement Positive impact from optimisation plans in 2016: 0.7bn Target 1.8bn contribution over Disposal Plan ~ 6.7bn (3) of disposals signed or closed since 1 January 2015 Target At least 10bn between 2015 and 2020 Share capital increase ~ 4bn, realised in March 2017 Target 4bn before end of Q (1) Sum of personnel expenses and other external expenses. At 2016 scope and exchange rates. At constant pensions discount rate. Excluding change in operating expenses of service activities (2) Net investments excluding Linky, new developments and asset disposals. Linky is a project led by Enedis, independent subsidiary of EDF under the provisions of the French Energy Code (3) Impact on net financial debt

50 2016 KEY FIGURES In m % % org. (1) Sales 75,006 71, EBITDA 17,601 16, Net income excluding non-recurring items 4,822 4, Net income Group share 1,187 2,851 x2.4 31/12/ /12/2016 Net financial debt in bn Net financial debt/ebitda ratio (1) Organic change at constant scope and exchange rates

51 SALES (1) In bn Scope & change France Generation and supply France Regulated activities Organic change: -3.2% (2) UK Italy Other (3) Mainly forex in UK Mainly end of Yellow and Green tariffs, market prices decrease and intense competition (1) As of 2016, breakdown of sales across the segments, before inter-segment eliminations. The 2015 figures have been restated in this regard (2) Organic change at constant scope and exchange rates (3) Including inter-segments eliminations

52 EBITDA In m org. (1) % org. (1) EBITDA France Generation and supply activities France Generation and supply activities 6,936 6,156 (780) In bn France Regulated activities (2) 4,719 5, United Kingdom 2,242 1,713 (276) Italy 1, (681) Other international Other activities 1,750 2, tariff adjustment Generation (3) Purchases/ sales on markets (3) -1.2 Downstream market conditions (3) +1.2 Other 6.2 Including EDF EN Dalkia EDF Trading Group total 17,601 16,414 (840) (1) Organic change at constant scope and exchange rates (2) Regulated activities: Enedis, Électricité de Strasbourg and islands activities (3) Estimated figures

53 EBIT AND NET INCOME In m % EBITDA 17,601 16, IAS 39 Volatility 175 (262) na Amortisation/depreciation expenses (1) and provisions for renewal (9,111) (8,007) Impairments and other operating income and expenses (4,385) (631) EBIT 4,280 7, Financial result (2,588) (3,333) o/w impact of discount unwinding (2,812) (3,417) Income tax (483) (1,388) Share of net income from associates Deducting net income from minority interests (214) (160) Net income Group share 1,187 2, Excluding non-recurring items 3,635 1, Net income excluding non-recurring items 4,822 4, (1) Extension to 50 years of the accounting depreciation period of the PWR 900MW series excluding Fessenheim (please refer to the press release published by EDF on 29 July 2016)

54 CASH FLOW In m EBITDA 17,601 16,414 Non cash items and change in accrued trading income (1,610) (1,703) Net financial expenses disbursed (1,252) (1,137) Income tax paid (1,508) (838) Other items o/w dividends received from associates and joint-ventures Operating cash flow 13,502 13,059 WCR 132 (1,935) o/w impact of tariff adjustments (1), VAT included 775 (697) Net investments (12,672) (11,663) o/w Linky (2), new developments (3) and asset disposals (254) 153 Cash flow afternet investments 962 (539) European Commission decision on RAG (4) (906) - Dedicated assets Cash flow before dividends 273 (529) Dividends paid in cash (1,746) (454) Interest payments on hybrid issues (591) (582) Group cash flow (2,064) (1,565) (1) Tariff adjustment of 2012 (impacting 2015 and 2016) and of 2014 (impacting 2016) (2) Linky is a project led by Enedis, independant subsidiary of EDF under the provisions of the French Energy Code (3) New developments: in particular UK NNB, EPR New Models and offshore wind (4) Please refer to press releases published by EDF and the European Commission on 22 July 2015

55 NET FINANCIAL DEBT In bn (11.7) (1.0) +1.5 (37.4) (37.4) Dividends and hybrid bonds remuneration Other Operating cash flow (1.9) WCR Net investments (1) Mainly forex effect and partial disposal of CSPE receivable In particular weather effect (2), CSPE collection and tariff adjustments December 2015 December 2016 (1) Net investments including Linky, new developments and asset disposals. Linky is a project led by Enedis, independant subsidiary of EDF under the provisions of the French Energy Code (2) With no significant impact on Group cash flow

56 2017 AND 2018 GROUP EBITDA TARGETS bn bn 14.3bn Performance plan Capacity markets Gradual improvement of nuclear generation in France 2016 non-recurring positive impacts Wholesale purchases to balance unavailability of the fleet and ARENH demand Market conditions which remain challenging Performance plan Higher nuclear generation bn (1) Improved market conditions in France and United Kingdom Development of service activities Growth in renewable business (1) At 2016 exchange rate and assumption for 2018 power prices in France on volumes not hedged as of 31/12/2016: 36/MWh

57 2017 TARGETS NUCLEAR OUTPUT TWh 2017 EBITDA (1) NET FINANCIAL DEBT/EBITDA (2) 13.7bn 14.3bn 2,5x PAYOUT RATIO OF NET INCOME EXCLUDING NON-RECURRING ITEMS (3) 55% to 65% (1) At 2016 exchange rate (2) At 2016 exchange rate and at an assumed discount rate on nuclear provisions of 4.1% in 2017 (3) Adjusted for the remuneration of hybrid bonds accounted for in equity

58 2018 TARGETS 2018 OPEX (1) NET INVESTMENTS excluding Linky, new developments and asset disposals EBITDA (2) - 0.7bn vs ~ 10.5bn 15.2bn 2018 CASH FLOW (2)(3) NET FINANCIAL DEBT/EBITDA (2)(3) 0 2.5x PAYOUT RATIO OF NET INCOME EXCLUDING NON-RECURRING ITEMS (4) 50% (1) At constant scope, exchange and hypothesis of pensions discount rates. Excluding change in operating expenses of service activities (2) At 2016 exchange rate and assumption for 2018 power prices in France on volumes not hedged as of 31/12/2016: 36/MWh (3) At 2016 exchange rate. Cash flow excluding Linky, new developments and asset disposals, with an assumed discount rate on nuclear provisions of 4.1% in 2017 and 3.9% in 2018, excluding interim dividend for fiscal year 2018, which will be decided in H (4) Adjusted for the remuneration of hybrid bonds accounted for in equity

59 BEYOND 2018 OPEX REDUCTION (1) IN 2019 VS Md At least 1bn ASSET DISPOSALS OVER At least 10bn PAYOUT RATIO OF NET INCOME EXCLUDING 45 % à 50 % NON-RECURRING ITEMS (2) 45% to 50% 1) At constant scope, exchange and hypothesis of pensions discount rates. Excluding change in operating expenses of service activities (2) Adjusted for the remuneration of hybrid bonds accounted for in equity

60 STATUTORY AUDITORS

61 AUDITORS REPORTS Opinion on the statutory and consolidated financial statements for the year ended 31 December 2016 In our opinion, statutory and consolidated financial statements give a true and fair view of the financial position of the parent company and the Group and of the results of its operations for the year We justify our assessments and we draw attention on two matters: the impacts of the change of accounting estimate at 1 January 2016 and relating to the extension to 50 years of the accounting depreciation period of the PWR 900MW power plants in France the valuation of nuclear provisions, which is sensitive to long-term assumptions 1 st and 2 nd resolutions

62 AUDITORS REPORTS Report on regulated agreements and commitments (1/2) 5 th, 6 th, 7 th, 8 th, 9 th and 10 th resolutions The following agreements and commitments have been brought to our attention: Appointment of BNP Paribas and Société Générale by EDF as Global Coordinator in conjunction with a project of share capital increase (2 separate agreements) Acquisition by your Company of a majority equity stake conferring exclusive control of AREVA NP s activities Contemplated partial sale of the capital of RTE to the Caisse des Dépôts and CNP Assurances, including the signing of a loan agreement for the joint venture (C25), a share purchase agreement and a shareholders agreement Agreement signed between the French State, EDF, the Caisse des Dépôts, CNP Assurances and C25 in relation to the governance of the joint venture C25 and RTE

63 AUDITORS REPORTS Report on regulated agreements and commitments (2/2) 5 th, 6 th, 7 th, 8 th, 9 th and 10 th resolutions We have been informed that the following agreements and commitments, previously approved by your Shareholders Meetings, have remained in force during the year: Three other conventions with AREVA NP related to the furniture of components for the EPR nuclear reactors and the third 10-year inspection of the 900MW nuclear power plants

64 AUDITORS REPORTS Report on the proposed capital operations contemplated by the 16 th resolution of this Shareholders Meeting 16 th resolution No matter to report on the issuance price of the ordinary shares to be issued, subject to the analysis of the conditions of the capital increase to be decided In accordance with Article R of the French Commercial Code, we will prepare an additional report, if applicable, when the delegation will be utilised by your Board of Directors

65 AUDITORS REPORTS Other reports Report on internal control and risk management procedures relating to the preparation and processing of accounting and financial information No matter to report to your attention Report on the social, environmental and societal indicators and attestation on the information related to the allocation of funds raised for the Green Bond issued by EDF No matter to report to your attention The other resolutions subject to the approval of the Shareholders Meeting are not subject to Auditors report

66 GOVERNANCE

67 MEMBERSHIP AND ACTIVITY OF THE BOARD OF DIRECTORS IN 2016 Membership of the Board as of 31 December % 41.7% 18 Directors of women (without Directors elected by employees) +16.7% of independant Directors (without Directors elected by employees) +8.4% compared to 31/12/2015 compared to 31/12/2015 Activity of the Board of Directors in meetings Attendance rate: 92.8%

68 ACTIVITY OF THE COMMITTEES OF THE BOARD IN 2016 Number of meetings Attendance rate Audit Committee % Nuclear Committments Monitoring Committee % Strategy Committee % Ethics Committee % Appointments and Remunerations Committee %

69 PRESENTATION OF THE RESOLUTIONS

70 SYNTHETIC PRESENTATION OF THE RESOLUTIONS (1/5) Within the competence of the Ordinary Shareholders Meeting Resolutions 1 and 2 Approval of the accounts Financial statements and consolidated accounts for 2016 financial year Profit of 5.5 billion Resolution 3 Allocation of the net income and determination of the dividend amount Ordinary dividend proposed at 0.90 per share, loyalty dividend proposed at 0.99 per share Possibility to opt for the payment in shares Resolution A Resolution proposed by the Supervisory Board of FCPE Actions EDF No dividend payment Resolution was examined by the Board of Directors during the meeting held on 6 April 2017 and was not approved Resolution 4 Payment of interim dividends in shares Possibility to opt for the payment in shares for all or a portion of the interim dividends Resolutions 5 and 6 Related-party agreements Appointment by the Company of BNP PARIBAS and Société Générale as Joint Global Coordinators in connection with the share capital increase of the Company

71 SYNTHETIC PRESENTATION OF THE RESOLUTIONS (2/5) Within the competence of the Ordinary Shareholders Meeting Resolutions 7, 8 and 9 Related-party agreements Share sale agreement and shareholders agreement relating to the acquisition of AREVA NP s activities Investment agreement and shareholders agreement relating to the partial sale of the share capital of RTE Agreement entered into between the French State, the Company, the Caisse des Dépôts et Consignations, CNP and the Joint-venture in connection with the partial sale of the share capital of RTE and in relation with the governance of RTE Resolution 10 Approval of the Statutory Auditors report on related-party agreements Resolution 11 Opinion on the 2016 compensation of the Chairman and Chief Executive Officer Compensation owed to or granted to Mr Jean-Bernard Lévy ( 450,000 plus 2,868 of benefits in kind) Resolution compensation policy applicable to the Chairman and Chief Executive Officer Approval of principles and criteria for determination, distribution and allocation of the components of the compensation and benefits awarded to the Chairman and CEO, which were examined by the Appointments and Remunerations Committee on 13 January 2017 and approved by the Board of Directors on 24 January 2017

72 SYNTHETIC PRESENTATION OF THE RESOLUTIONS (3/5) Within the competence of the Ordinary Shareholders Meeting Resolution 13 Authorization for the Board of Directors to carry out transactions on the Company s shares Repurchase programme of shares of the Company for a maximum amount of 2 billion over an 18-month period Resolution 14 Ratification of the appointment of a Director Ratification of the appointment by the Board of Directors on 30 September 2016 of Ms Michèle Rousseau to replace a Director who resigned Resolution 15 Attendance fees of the Board of Directors Amount allocated to the members of the Board of Directors set at 500,000 (including the remuneration of the Fessenheim Work Group)

73 SYNTHETIC PRESENTATION OF THE RESOLUTIONS (4/5) Within the competence of the Extraordinary Shareholders Meeting Resolution 16 Delegation of authority granted to the Board of Directors to complete capital increases reserved for categories of beneficiaries, with no preferential subscription right for shareholders Authority granted to the Board of Directors to increase the share capital for a maximum nominal amount of 10 million Resolution 17 Amendment of Article 19 of the Company s bylaws Amendment in the Company s bylaws for the reference to Alternate Auditors in accordance with the Sapin II Law

74 SYNTHETIC PRESENTATION OF THE RESOLUTIONS (5/5) Within the competence of the Ordinary Shareholders Meeting Resolutions 18 and 19 Renewal of the mandate of Statutory Auditors Renewal of the mandate of Statutory Auditors of Deloitte et Associés and KPMG SA for a period of 6 financial years Within the competence of both Ordinary and Extraordinary Shareholders Meeting Resolution 20 Powers to carry out formalities Standard resolution to carry out all legal and administrative formalities

75 SHAREHOLDERS QUESTIONS

76 VOTE OF RESOLUTIONS

78 FIRST RESOLUTION Ordinary resolution Approval of the annual financial statements for the year ended on 31 December 2016.

79 SECOND RESOLUTION Ordinary resolution Approval of the consolidated financial statements for the year ended on 31 December 2016.

80 THIRD RESOLUTION Ordinary resolution Allocation of the net income for the financial year ended on 31 December 2016 and determination of the dividend amount.

81 RESOLUTION A Ordinary resolution Allocation of the net income for the financial year ended on 31 December 2016 and determination of the dividend amount. Resolution proposed by the Supervisory Board of the employee shareholding fund (FCPE) Actions EDF and reviewed by the Board of Directors during the meeting held on 6 April 2017 which did not approve it.

82 FOURTH RESOLUTION Ordinary resolution Payment of interim dividends in shares - Delegation of authority granted to the Board of Directors.

83 FIFTH RESOLUTION Ordinary resolution Approval of a related-party agreement - Share capital increase of the Company: authority granted by the Company to BNP PARIBAS as Joint Global Coordinator.

84 SIXTH RESOLUTION Ordinary resolution Approval of a related-party agreement - Share capital increase of the Company: authority granted by the Company to Société Générale as Joint Global Coordinator.

85 SEVENTH RESOLUTION Ordinary resolution Approval of related-party agreements - Acquisition by the Company of the sole control over AREVA NP s activities: share sale agreement and shareholders agreement relating to New NP s governance.

86 EIGHTH RESOLUTION Ordinary resolution Approval of related-party agreements - Partial sale of the share capital of RTE: share purchase agreement and shareholders agreement.

87 NINTH RESOLUTION Ordinary resolution Approval of a related-party agreement - Agreement entered into between the French State, the Company, the Caisse des Dépôts et Consignations, CNP and the Joint-venture in connection with the partial sale of the share capital held in RTE and in relation with the governance of RTE.

88 TENTH RESOLUTION Ordinary resolution Approval of the Statutory Auditors special report on related-party agreements and commitments.

89 ELEVENTH RESOLUTION Ordinary resolution Opinion on the elements of compensation owed to or granted to Mr Jean-Bernard Lévy, Chairman and Chief Executive Officer of the Company, for the 2016 financial year.

90 TWELFTH RESOLUTION Ordinary resolution 2017 compensation policy applicable to the Chairman and Chief Executive Officer of the Company.

91 THIRTEENTH RESOLUTION Ordinary resolution Authorization for the Board of Directors to carry out transactions on the Company s shares.

92 FOURTEENTH RESOLUTION Ordinary resolution Ratification of the appointment of a Director.

93 FIFTEENTH RESOLUTION Ordinary resolution Attendance fees allocated to the Board of Directors.

94 SIXTEENTH RESOLUTION Extraordinary resolution Delegation of authority granted to the Board of Directors to complete capital increases reserved for categories of beneficiaries, with no preferential subscription right for shareholders.

95 SEVENTEENTH RESOLUTION Extraordinary resolution Amendment of Article 19 of the Company s bylaws.

96 EIGHTEENTH RESOLUTION Ordinary resolution Renewal of the mandate of a Statutory Auditor.

97 NINETEENTH RESOLUTION Ordinary resolution Renewal of the mandate of a Statutory Auditor.

98 TWENTIETH RESOLUTION Ordinary and extraordinary resolution Powers to carry out formalities.

100 THE ON-DEMAND REPLAY WILL BE AVAILABLE SOON

101 THE SESSION IS TEMPORARILY INTERRUPTED

102

HALF-YEAR RESULTS 2017

HALF-YEAR RESULTS 2017 DISCLAIMER This presentation does not constitute an offer to sell securities in the United States or any other jurisdiction. No reliance should be placed on the accuracy, completeness