Engie S.a. · EURONEXT:ENGI
Engie — H1 2022 Earnings Presentation
37 slides from Engie's earnings presentation, Jul 29, 2022
Slide 1: H1 2022 Results
H1 2022 Results 29 JULY 2022
Slide 2: Catherine Macgregor, CEO
CATHERINE MACGREGOR CEO ENGIE H1 2022 JULY 2022 2
Slide 3: ENGIE continues to perform strongly underpinned by strength of its integrated model
ENGIE CONTINUES TO PERFORM STRONGLY UNDERPINNED BY STRENGTH OF ITS INTEGRATED MODEL H1 performance Exposure to Milestone in Belgium Maintaining sharp positions us well Russian gas with negotiations focus on strategic for strong results significantly commenced under a plan with strong in 2022 reduced
Slide 4: Playing a key role in supporting energy security of supply
PLAYING A KEY ROLE IN SUPPORTING ENERGY SECURITY OF SUPPLY Diversification of French networks delivering robust operational Supporting growth of gas sourcing performance and contributing to security of supply Renewable gases Continuing efforts to GRTgaz: high level of Elengy: Record ships Storengy:
Slide 5: Actions and commitments supporting energy affordability
ACTIONS AND COMMITMENTS SUPPORTING ENERGY AFFORDABILITY Energy bill, Demand Working Capital Well-established profit Management & Energy support sharing mechanisms efficiency support EXAMPLE EXAMPLE EXAMPLE Proactive contribution in France Supply: €1.1bn 1 €467m shared in H1 2022 in Top up energy vou
Slide 6: Assessing the potential feasibility of extending 2 nuclear units in Belgium
ASSESSING THE POTENTIAL FEASIBILITY OF EXTENDING 2 NUCLEAR UNITS IN BELGIUM Signed Letter of Intent with the Belgian State • Focus on ensuring a fair balance of risk and reward • Letter of Intent comprises number of inseparable conditions • This is the start of negotiations with a binding deal targe
Slide 7: H1 Financial and Strategic Progress
H1 Financial and Strategic Progress ENGIE H1 2022 JULY 2022 7
Slide 8: H1 performance in unprecedented market conditions
H1 PERFORMANCE IN UNPRECEDENTED MARKET CONDITIONS • Significant growth in EBIT • Robust balance sheet EBIT NRIgs • Strong liquidity: €23.1bn, incl. €14.5bn of cash • FY 2022 guidance unchanged €5.3bn €3.2bn Up 73% organically, yoy Up €1.9bn organically, yoy • NRIgs expected in the range of €3.8-4.4b
Slide 9: Execution of strategic plan continues with momentum (1/2)
EXECUTION OF STRATEGIC PLAN CONTINUES WITH MOMENTUM (1/2) Simplify, refocus Progress TARGET and improve €9.9bn disposals at least €11bn business mix signed or completed since the start of 2021 disposals between 2021-23 Footprint: 351 countries (vs. 70 in 2018) < 30 countries by 2023 2.7% of coal in
Slide 10: Execution of strategic plan continues with momentum (2/2)
EXECUTION OF STRATEGIC PLAN CONTINUES WITH MOMENTUM (2/2) Increase efficiency Progress TARGET & capital allocation €2.2bn €15-16bn discipline growth Capex1 in H1 22 growth Capex1 2021-23 60% growth Capex1 40-45% growth Capex1 in Renewables in H1 22 in Renewables over 2021-23 3.0x Balance sheet Econo
Slide 11: A strong renewables platform for long-term growth
A STRONG RENEWABLES PLATFORM FOR LONG-TERM GROWTH • 2.2 GW capacity added in the last 6 months Continuously reinforcing the pipeline (GW at 100%) • Renewables output in GBU increased to 57.9 TWh1 in H1 66 GW 71 GW 33 GW 10 AMEA • Further progress at Ocean Winds 28 GW Development Development 25 Solar
Slide 12: H1 2022 Financials, Pierre-François Riolacci
H1 2022 FINANCIALS PIERRE-FRANÇOIS RIOLACCI CFO ENGIE H1 2022 JULY 2022 12
Slide 13: Continued positive momentum with strong earnings, high cash flow generation
CONTINUED POSITIVE MOMENTUM WITH STRONG EARNINGS, HIGH CASH FLOW GENERATION WITH WORKING CAPITAL RECOVERY • EBIT up 75% on a gross basis and 73% organically H1 RESULTS €bn, unaudited figures Actual ∆ Gross ∆ Organic1 • NRIgs up 143% on a gross basis and 144% organically EBITDA 7.5 +44% +43% • Cash f
Slide 14: EBIT up +73% organically
EBIT UP +73% ORGANICALLY In unprecedented market conditions EBIT €+2,208m organic 5,253 (€m) incl. €+163m performance 846 5,253 (o/w 1,062 Others +1,007 GEMS) (o/w +853 from 858 Nuclear GEMS) Nuclear 424 Supply Others +680 667 Thermal 160 Energy Supply Energy Solutions Renewables Networks Thermal +2
Slide 15: Renewables EBIT
RENEWABLES RENEWABLES EBIT Strong growth with contribution of newly commissioned assets and price tailwinds ACHIEVED PRICES1 OUTRIGHT VOLUMES HYDRO TAX +54% HYDRO CNR FRANCE (€/MWh) HYDRO FRANCE (TWh) CNR FRANCE (€m - % tax rate2) organic growth +46% +€65m 72 8.6 -1.6 TWh 155 7.1 35% EBIT H1 2021 vs
Slide 16: Networks EBIT
NETWORKS NETWORKS EBIT Contribution impacted by mild temperature in Europe Strong performance outside France TEMPERATURE EFFECT POWER TRANSMISSION BIOMETHANE PROD. -4% IN FRANCE (€m) NETWORK LENGTH (km) CAPACITY CONNECTED TO GRDF/GRTgaz organic decrease (TWh/y) +3% +18% 45 5,546 5,688 7.2 6.1 EBIT H
Slide 17: Energy Solutions EBIT
ENERGY SOLUTIONS ENERGY SOLUTIONS EBIT Impacted by warm temperature, despite strong commercial and operational performance Focus on improving EVBox performance continues EBIT MARGIN EBIT MARGIN €-15m (%) EXCL. EVBOX (%) organic decrease -60bps 3.5% -60bps 4.7% 2.9% 4.1% EBIT H1 2021 vs H1 2022 Energ
Slide 18: Thermal EBIT
THERMAL THERMAL EBIT Higher spreads and ancillaries captured by flexible assets in Europe Headwinds in Italy, Chile and Australia AVERAGE CAPTURED INTERNAL UNPLANNED +17% SPARK SPREADS EUROPE UNAVAILABILITY (%) organic growth (€/MWh) +109% -70bps 27 4.7% 4.0% EBIT H1 2021 vs H1 2022 (€m) Ancillaries
Slide 19: Supply EBIT
SUPPLY SUPPLY EBIT Long gas position due to warm temperature sold at high prices in Q1 and positive timing effects in France # B2C B2C SUPPLY CONTRACTS €+0.2bn (m) VOLUMES (TWh) organic growth +0.2m 22.4 22.6 2.6 2.5 Services 22 21 Power 94 EBIT H1 2021 vs H1 2022 8.9 9.2 Power 80 Gas (€m) +20 10.9
Slide 20: Nuclear EBIT
NUCLEAR NUCLEAR EBIT Exceptional performance driven by higher prices, leading to higher profit sharing through specific Belgian nuclear tax VOLUMES PRICES1 CAPTURED €+0.7bn BE+FR @SHARE (TWh) (€/MWh) organic growth +103% -6% 23.5 96 22.2 EBIT H1 2021 vs H1 2022 (€m) Prices -101 47 -135 Volumes -47 -
Slide 21: Others EBIT
OTHERS OTHERS EBIT Unprecedented contribution from GEMS Internal reclassification: Bulk of Supply B2B moved from ‘Supply’ to ‘Others’ in a context of extreme market conditions BASE POWER PRICE FR GAS TTF GAS SPREAD TTF-THE €+1.0bn MONTH AHEAD (€/MWh) MONTH AHEAD (€/MWh) (NL-GE) (€/MWh) organic growt
Slide 22: Reduction of direct Gazprom and Russian exposures
REDUCTION OF DIRECT GAZPROM AND RUSSIAN EXPOSURES Gas portfolio massively derisked in case of full disruption of Gazprom deliveries More resilient physical gas balance • Yearly contractual exposure reduced to a residual exposure of about 4% of our European gas demand, mainly through portfolio length
Slide 23: Performance plan
PERFORMANCE PLAN Ramping up with a strong H1 2022 net contribution in an inflationary context H1 2022 YTD progress Ramp-up within the 2021-23 performance plan €163m • Operational excellence: procurement, industrial actions Period Achieved 13% and structure optimizations FY 2021 €85m 38% • Support fu
Slide 24: Cash flow from operations
CASH FLOW FROM OPERATIONS Higher CFFO supported by strong operating cash flow, positive margin calls effect and monetization of French gas tariff shield deficit Reduced impact through €0.7bn monetization of Nov. 2021 – March 2022 French gas tariff shield deficit Change in WCR: +0.6 (€bn) -0.1 +0.5 -
Slide 25: Net debt up in H1 2022, strong liquidity and rating maintained
NET DEBT UP IN H1 2022, STRONG LIQUIDITY AND RATING MAINTAINED Liquidity of €23.1bn as at 30 June 2022, incl. €14.5bn of cash Net Financial Debt Leverage ratios (€bn) Nuclear +1.2 4.0x +1.0 26.3 25.3 phase-out 2 Scope 3 Others 5 +2.3 New +1.0 -0.9 -6.8 leases 4 3.6x Dividends +3.3 3.0x Dec CFFO Cape
Slide 26: FY 2022 guidance unchanged
FY 2022 GUIDANCE UNCHANGED In the current environment that continues to face uncertainties EBITDA indication Rating Key assumptions1 €11.7-12.7bn “Strong investment grade” FX: Economic Net Debt / EBITDA ≤ 4.0x over the long term • €/USD: 1.07 EBIT indication • €/BRL: 5.58 Dividend €7.0-8.0bn Market
Slide 27: Summary
SUMMARY H1 performance Exposure to Milestone in Belgium Maintaining sharp positions us well Russian gas with negotiations focus on strategic for strong results significantly commenced under a plan with strong in 2022 reduced balanced framework commitment to the energy transition ENGIE H1 2022 JULY 2
Slide 28: Additional material
ADDITIONAL MATERIAL
Slide 29: H1 2022 EBIT change by activity
H1 2022 EBIT CHANGE BY ACTIVITY Y/Y change (€m) Gross FX / Scope Organic Key drivers for organic change Higher prices in Europe (mainly benefitting hydro) BRL appreciation Hydro buybacks (Portugal and France) RENEWABLES +339 +282 Commissioning of new capacity Lower hydro volumes in Europe Eo
Slide 30: EBIT breakdown
EBIT BREAKDOWN H1 2022 Rest of Latin Northern (€m) France Europe America America AMEA Others TOTAL RENEWABLES 205 166 421 58 9 (30) 828 NETWORKS 1,059 69 351 (2) (5) 1,471 ENERGY SOLUTIONS 170 47 (1) 5 22 (84) 160 THERMAL 447 (2) 21 217 (16) 667 SUPPLY 434 (8) 3 2 (8) 424 NUCLEAR 858 858 1 OTHERS (4
Slide 31: Overview of P&L from EBITDA to net income
OVERVIEW OF P&L FROM EBITDA TO NET INCOME NRIgs and NIgs growth From EBITDA to NRIgs From NRIgs to NIgs H1 H1 H1 (€bn) Delta (€bn) 2022 2021 2022 EBITDA 7.5 5.2 +2.3 NRIgs (continuing activities) 3.2 D&A and others (2.2) (2.2) -0.0 Impairment (0.0) EBIT 5.3 3.0 +2.3 Restructuring costs (0.0) Recurri
Slide 32: Capex
CAPEX On track €2.2bn growth Capex1 invested in H1 2022 5% H1 2022 Capex1 21% (€bn) 12% Growth Capex1 2.2 95% in energy 60% c. 80% Maintenance Capex 1.0 23% transition organic Total 3.3 activities 79% Renewables Networks Organic Energy Solutions Other activities External 1. Net of DBSO and US tax eq
Slide 33: Guidance: 2022 updated commodity forward prices assumptions
GUIDANCE: 2022 UPDATED COMMODITY FORWARD PRICES ASSUMPTIONS Main commodity forward prices1 Main commodity forward prices1 (average M12 2021 – M05 2022) (as at June 30, 2022) Basis for the confirmed 2022 Basis for the sensitivity indications and guidance (€/MWh - €/t) 20221 (€/MWh - €/t) 20221 Power
Slide 34: Direct exposure to increasing inflation and interest rates: overall neutral for ENGIE
DIRECT EXPOSURE TO INCREASING INFLATION AND INTEREST RATES: OVERALL NEUTRAL FOR ENGIE Various direct effects at different levels of the P&L and balance sheet from increasing inflation and Most of the current interest rates expected to be overall neutral to slightly beneficial, with following main ef
Slide 35: Outright power production in Europe
OUTRIGHT POWER PRODUCTION IN EUROPE NUCLEAR AND HYDRO Hedged positions and captured prices (% and €/MWh) 100% 92% 69% 37% 7% 121 74 77 70 59 As at 30 June 2022 Belgium and France 2021 2022 2023 2024 2025 Captured prices are shown • before specific Belgian nuclear and French CNR hydro tax contributio
Slide 36: Disclaimer
DISCLAIMER Important Notice The figures presented here are those customarily used and communicated to the markets by ENGIE. This message includes forward- looking information and statements. Such statements include financial projections and estimates, the assumptions on which they are based, as well
Slide 37: For more information about ENGIE
FOR MORE INFORMATION ABOUT ENGIE +33 1 44 22 66 29 ir@engie.com https://www.engie.com/en/financial-results FOR MORE INFORMATION ABOUT H1 2022 RESULTS: https://www.engie.com/en/finance/results/2022 ENGIE H1 2022 JULY 2022 37