Engie S.a. · EURONEXT:ENGI
Engie — Investor Day (February 2019)
67 slides from Engie's investor day presentation, Feb 28, 2019
Slide 1: Delivering Competitive Products from Energy Markets to Customers
DELIVERING COMPETITIVE PRODUCTS FROM ENERGY MARKETS TO CUSTOMERS 28/02/2019 ENGIE 2019 118
Slide 2: Thermal, Gas Midstream, Energy Supply and Nuclear overview
Thermal Merchant Europe 21 GW capacity €0.3bn COI 2018 Gas Midstream Energy Supply B2B/B2C Management 3rd in Europe 304 TWh Gas 400 TWh gas portfolio 9,000 TWh Gas 124 TWh Power €0.3bn COI 2018 1,600 TWh Power 22M B2C contracts €0.5bn(2) COI 2018 Nuclear Merchant Generation 6.4 GW capacity(1) €(1.1)
Slide 3: After significant difficulties in 2018, we are stabilizing our operations
GENERATION & SUPPLY Zero Carbon Back to normal operations Transition for nuclear "as a service" Tailor-made AFTER SIGNIFICANT DIFFICULTIES IN 2018, WE ARE STABILIZING OUR OPERATIONS High-tech Financed RENEWABLES CLIENT NETWORKS SOLUTIONS GENERATION & SUPPLY LTO(1) works will finish by 2020 Availabil
Slide 4: Anticipating the next phases
ANTICIPATING THE NEXT PHASES 2022-23 2025 Beyond 2025 Doel 3 and Tihange 2 phased out Doel 1, Doel 2 and Tihange 1 Doel 4 and Tihange 3 phased out possibly extended Start D&D Future options for after 2025 will be defined by the Belgian authorities 28/02/2019 ENGIE 2019 121
Slide 5: Transformation of a merchant fleet from negative contribution to profitability
THE TRANSFORMATION OF A MERCHANT FLEET FROM A NEGATIVE CONTRIBUTION TO PROFITABILITY Capacity GW @ 100% Reduce carbon exposure Mt CO2 Operational performance Costs savings 2015-2018 -32% unplanned outages €-180m O&M costs 28 50 21 34 -41% trips -34% SG&A costs 2015 2018 2015 2018 COI 2015(1) €(0.05)
Slide 6: Opportunity to capture value on a regular basis
OPPORTUNITY TO CAPTURE VALUE ON A REGULAR BASIS 2015-18 evolution of CSS and CDS 70 Year-ahead forward price levels1 TIGHT SUPPLY DEMAND €/MWh HIGHER CO2 PRICES Power FR Power DE Clean Gas Cost Clean Coal Cost 0 2015 2016 2017 2018 Spot power prices 2015-2018 HIGHER VOLATILITY MULTIPLE EVENTS 2015 2
Slide 7: Delivering earnings stability and visibility, capturing optionality value
Gas and Energy Thermal Power Markets Contracted Networks Europe DELIVERING EARNINGS STABILITY AND VISIBILITY CAPTURING OPTIONALITY VALUE 28/02/2019 ENGIE 2019 124
Slide 8: Capital Markets Day
CAPITAL MARKETS DAY February 28, 2019
Slide 9: Gwenaelle Huet - Renewables: developer and operator of large-scale renewables
Gwenaelle HUET Chief Executive Officer, Business Unit France Renewables DEVELOPER AND OPERATOR OF LARGE-SCALE RENEWABLES
Slide 10: What we have achieved so far
WHAT WE HAVE ACHIEVED SO FAR 28/02/2019 ENGIE 2019 127
Slide 11: RES installed capacities @100% as end of 2018
RES installed capacities @100% as end of 2018 [GW] 24.4 GW(1) 0.5 2.0 EUROPE (exc. France) 2.1 GW 5.4 FRANCE NORAM 7.0 GW 0.8 GW MESCAT 0.4 GW ASIA BRAZIL 0.5 GW 12.7 GW 16.4 LATAM AFRICA (exc. Brazil) 0.4 GW 0.5 GW Hydro Wind Onshore #1 position Emerging and relevant position Solar PV Other(2) 28/0
Slide 12: Pipeline by expected COD
Expected COD (Commercial Operation Date) Early-Stage Development >2023 50 GW 2% 20% Advanced Development 50% 9-12 GW 2021-2023 Onshore wind 28% Solar Target 2021: ~9 GW Offshore wind 9% 3% Secured(2) Other(2) & Under 49% Construction 2019-2021 39% 6 GW 28/02/2019 ENGIE 2019 (1) Secured = awarded (2)
Slide 13: Average installed RES capacity: ENGIE vs. competitors
Average installed RES capacity [GW/yr] ENGIE vs. competitors (European and US RES developers) 3.5 3,5 3.0 3,0 2.5 2,5 2.0 2,0 1.5 1,5 1.0 1,0 0.5 0,5 0 0,0 2016 - 2018 2019 - 2021 28/02/2019 ENGIE 2019 130
Slide 14: Integrated value chain strengths
Development Project origination and development with local teams Engineering & Construction Strong engineering and business experience and expertise Partial Sell-Down Financial platforms to industrialize DBpSO model Operation & Operational excellence in O&M and strategic sourcing Maintenance (O&M) E
Slide 15: What the market tells us
WHAT THE MARKET TELLS US 28/02/2019 ENGIE 2019 132
Slide 16: Continuous investment across geographies
Continuous investment across geographies €250bn/yr 50% in Europe, Microgrid Market(2): worldwide(1) LATAM & US €15.2bn today, x2 by 2022, x3 by 2025 With more sophisticated technologies Short Term Middle Term Long Term 2021 2023 >2026 Biomethane Geothermal Microgrids Floating wind offshore Green hyd
Slide 17: Evolution of new contracts
New contracts in 2018 Middle-term evolution of new contracts State Subsidies State Subsidies RES assets RES assets Corporate Corporate & Cities & Cities Long-term evolution: more sophisticated contracts with clients Integrated RES through PPA(1) as produced PPA(1) as consumed (24/7) microgrids or gr
Slide 18: Our strategic intentions
OUR STRATEGIC INTENTIONS 28/02/2019 ENGIE 2019 135
Slide 19: Zero-Carbon Transition "as a service"
Zero-Carbon Transition "as a service" Tailor-made RENEWABLES High-tech 50% new RES projects dedicated to Financed specific clients by 2021 Commoditized renewables RENEWABLES NETWORKS CLIENT SOLUTIONS GENERATION & SUPPLY 28/02/2019 ENGIE 2019 136
Slide 20: Faster growth
FASTER GROWTH 28/02/2019 ENGIE 2019 137
Slide 21: RES installed capacities @100%
RES installed capacities(1) @100% [GW] 2018 2021 ~24 GW Mature Technologies Sophisticated & ~33 GW(2) Innovative Technologies 0.5 0.5 4 c. +2 GW c. +0.5 GW 50% with 2 0.5 sophisticated contracts 12 5 c. +6 GW c. +0.5 GW 16 ~9 GW added over 2019-21 16 Hydro Onshore wind Solar Offshore wind Other (1)
Slide 22: COI 8-11% CAGR
COI [€bn] 2018 8-11% CAGR 2021 3% 6% 28% €1.15bn €1.5 - 1.6bn 63% Hydro Wind Onshore Solar Other 28/02/2019 ENGIE 2019 139
Slide 23: Higher value
HIGHER VALUE 28/02/2019 ENGIE 2019 140
Slide 24: Very attractive vs. less attractive
Very Attractive Less Attractive • Companies & cities PPA • Only commoditized renewables • Development in countries not part of the Group’s • Innovative and sophisticated technologies geographical priorities 28/02/2019 ENGIE 2019 141
Slide 25: Upstream, midstream, downstream value chain
Engineering & Partial Sell- Operation & Energy Customer Development Construction Down Maintenance Management Relations 5,000 FTE 2,000 FTE 100,000 FTE Upstream Midstream Downstream 2019-2021: Almost 50% of ENGIE’s new RES projects will be dedicated to clients After 2026: 2/3 of new capacities will b
Slide 26: Fixed & floating offshore wind, green gas, microgrids
FIXED & FLOATING OFFSHORE WIND Fixed Floating Moray* (950 MW) Wind Float Atlantic* (25 MW) Seamade* (487 MW) Eoliennes Flottantes du Golfe du Lion (25 MW) Treport & Noirmoutier (2 X 496 MW) GREEN GAS Biomethane Large- and small-scale territorial (market share target of 15-20%) green H2 projects MICR
Slide 27: Geographic priorities by tier
Tier 1: Reinforce existing and acquire new leadership positions where the Group has density and strong links with clients • Western Europe, North America, Brazil, Chile, Peru, Mexico Tier 2: Other selected countries where the Group will invest both on client solutions and RES development • India, Ch
Slide 28: Win more projects, increase IRR, share risk
Engineering & Operation & Energy Customer Development Partial Sell Down Construction Maintenance Management Solutions Development Keep a stake & O&M, Energy management & asset optimization & construction risk monetize NPV (incl. repowering) Global W&S installed Delta cost of RES capacity capacity ca
Slide 29: Normative 10 MW wind onshore or solar project
NPV: 50-250 k€/MW CAPEX Debt Equity Sell Recurrent Normative 10 MW wind onshore or solar project financing injection down revenues: (competitive tender) dividend + O&M (margin: 8-15%) with 70%-80% gearing and 80% sell-down EBITDA [k€/MW] IRR Buy & Hold = CoE 50-250 100 Close to 80% of value creation
Slide 30: Installed W+S capacity
Installed W+S capacity [GW] 2018 2021 ~16 Average equity Average equity share share 7.4 ~7.5 4.3 ~ 40% 58% 58% ~ 50% 2018@100% 2018@equity share 2021@100% 2021@equity share Onshore wind Solar Onshore wind Solar Capex W+S 2016-18: €3.7 bn Capex W+S 2019-21: ~€1.7 bn GW W+S added: 2.8 GW GW W+S added:
Slide 31: Increase value creation, increase capex
2018 2021 Increase Value low single-digit Creation ROCEp 9.6% improvement 2019-2021 2019-2021 Increase Capex gross Capex Capex net DBpSO Optimization CAPEX €~9bn €2.3 - 2.8bn 28/02/2019 ENGIE 2019 148
Slide 32: Better impact
BETTER IMPACT 28/02/2019 ENGIE 2019 149
Slide 33: Corporate PPA example (USA)
Target (USA) Upstream Midstream Downstream + Distributed Solar: Other Customers ~ 50 MW 176 MW wind 100 MW wind 276 MW wind in Kansas 28/02/2019 ENGIE 2019 150
Slide 34: Goal to become a global leader in Corporate PPA
160 MW 49 MW 30 MW 208 MW 30 MW 15 y. 15 y. 15 y. 25 y. 12 y. 50 MW 100 MW 15 y. 15 y. Our goal is to become a global leader in Corporate PPA 28/02/2019 ENGIE 2019 151
Slide 35: Conclusion
CONCLUSION 28/02/2019 ENGIE 2019 152
Slide 36: Installed RES capacity @100% scenarios
Installed RES capacity @ 100% [GW] Short Term Middle Term Long Term 2026 64 GW High scenario 70 60 2023 50 52 GW Low scenario 42 GW 2021 40 ~ 33 GW 2018 40 GW 30 24.4 GW 20 2018 2019 2020 2021 2022 2023 2024 2025 2026 28/02/2019 ENGIE 2019 153
Slide 37: Faster growth, higher value, better impact
Faster Growth Higher Value Better Impact Goal of ~9 GW added over Corporate PPA Leader Integrated zero-carbon solutions 2019-21 delivered “as a service” • 2019-21: Almost 50% of new RES projects linked to client solutions Tier 1 position in terms of development • Become a leader in Corporate PPA Bet
Slide 38: Capital Markets Day
CAPITAL MARKETS DAY February 28, 2019
Slide 39: Franck Bruel - Client Solutions Provider
Franck BRUEL Executive Vice President, France BtoB and Hydrogen CLIENT SOLUTIONS PROVIDER
Slide 40: Top worldwide positions and countries
Top 26 worldwide in cooling # 1 5 countries worldwide in heating worldwide in UK technical installation GCC SWITZERLAND FRANCE SINGAPORE worldwide in EV BELGIUM CHILE charging stations ITALY MOROCCO NETHERLANDS SOUTH AFRICA 28/02/2019 ENGIE 2019 157
Slide 41: Energy performance, smart places, mobility
PROCESS ENERGY BUILDING EFFICIENCY PERFORMANCE SMART PLACES MOBILITY 28/02/2019 ENGIE 2019 158
Slide 42: Expertise and value chain
ELECTRICAL HEATING MECHANICS RESOURCE ENGINEERING & COOLING & ROBOTICS MANAGEMENT 100,000 experts DISTRIBUTED FACILITY DATA SCIENCE on site ENGINEERING ENERGY MANAGEMENT & SMART CITIES Design Operation & Energy Investments Installation & Engineering Maintenance Supply 28/02/2019 ENGIE 2019 159
Slide 43: 2018 revenue by market
Cities, Public Buildings Private Services Industries Collective Housing and Infrastructures Buildings €6.0bn €4.3bn €6.0bn €2.2bn 2018 REVENUE(1) 28/02/2019 ENGIE 2019 (1) Estimates excluding supply 160
Slide 44: Reliable and profitable business
Market Drivers Reliable & Profitable TECHNOLOGY SHARE IN BUILDING VALUE Remaining >8 >9 Revenue covered portfolio duration years months by backlog(1) >80% Contract Order intake > CARBON FOOTPRINT & renewals yearly revenue(1) ~110% SUSTAINABILITY AWARENESS CASH HIGH COMPLEXITY GENERATIVE SINGLE-DIGIT
Slide 45: Main challenges, needs, opportunities: cities and infrastructures
3 MAIN CHALLENGES NEEDS OPPORTUNITIES Public lighting • Design and optimization of urban spaces and ✚ URBANIZATION Security infrastructures Health & Education • Integrated offer ✚ FINANCIAL SQUEEZE • Energy performance Mobility solutions contracts District networks ✚ CITIZENS’ Digital Differentiator
Slide 46: Our offers
OUR OFFERS BUILDING PROCESS ENERGY EFFICIENCY PERFORMANCE SMART MOBILITY PLACES Design & Operation & Engineering Investments Installation Maintenance Energy Supply 28/02/2019 ENGIE 2019 163
Slide 47: Main challenges, needs, opportunities: buildings
3 MAIN CHALLENGES NEEDS OPPORTUNITIES Real-time asset management • Design and optimization & Predictive maintenance of buildings and spaces ✚ NEW BEHAVIORS for new usages • Design, financing Renovation and installation of equipment ✚ CONNECTIVITY (energy, connectivity, security, Competitive air...)
Slide 48: Main challenges, needs, opportunities: industries
3 MAIN CHALLENGES NEEDS OPPORTUNITIES Sustainable • Overall approach ✚ GREENING OF solutions of industrial processes PROCESSES performance & PRODUCTS Reliability • Accompany zero-carbon & Traceability agenda ✚ CARBON FOOTPRINT Predictive • Offer “as a service” solutions maintenance instead of physic
Slide 49: Our offers
OUR OFFERS BUILDING PROCESS ENERGY EFFICIENCY PERFORMANCE Attentes éléments – Ingrid SMART MOBILITY PLACES Design & Operation & Engineering Investments Installation Maintenance Energy Supply 28/02/2019 ENGIE 2019 166
Slide 50: Main challenges, needs, opportunities: housing
3 MAIN CHALLENGES NEEDS OPPORTUNITIES Energy performance • Energy audit and support on energy performance ✚ COST REDUCTION • Develop new usage of energy and services to improve Financing solutions quality of life ✚ SOCIAL TRENDS • Integrated offers with financing On-site renewable energy production
Slide 51: Developing "as a service" solutions
DEVELOPING “AS A SERVICE” SOLUTIONS 28/02/2019 ENGIE 2019 168
Slide 52: Zero-Carbon Transition "as a service"
Zero-Carbon Transition "as a service" CLIENT SOLUTIONS Tailor-made High-tech Asset-based solutions a rising Financed proportion of CS COI Commoditized service offer RENEWABLES NETWORKS CLIENT SOLUTIONS GENERATION & SUPPLY 28/02/2019 ENGIE 2019 169
Slide 53: The benefit of financing and equity syndication
THE BENEFIT OF FINANCING AND EQUITY SYNDICATION Case example CLIENT NEEDS Total investment cost of €100M • Requires enhanced supply of steam, power, air • Subject to challenging sustainability goals Project Co. Typical P&L(1) ENGIE Typical P&L(1) • Requires external financing (equity consolidated wi
Slide 54: Worldwide references thanks to a new focus
171 2016 2019 Several references, mainly in Europe Worldwide references thanks to a new focus 3 14 56 4 19 10 11 21 20 18 1 8 8 5 21 7 22 24 4 6 2 23 7 3 17 9 12 16 1 Smart City - North Tyneside, North East Lincolnshire, Chester 1 Lighting – Flashnet Acquisition 9 Mobility – Intelligent Transportati
Slide 55: Revenue 4-7% CAGR
2018 4 - 7% CAGR 2021 Rest of Europe 39% Rest €18.6bn of world x2 €21 - 23bn 12% France 49% 28/02/2019 ENGIE 2019 172
Slide 56: COI 11-14% CAGR
2018 11-14% CAGR 2021 HIGH ADDED 7% VALUE SOLUTIONS 25% LEADING TO HIGHER €1.0bn €1.3 - 1.4bn MARGINS 41% 26% Design & Engineering Investment Installation Operation & Maintenance 28/02/2019 ENGIE 2019 173
Slide 57: Our key differentiators
OUR KEY DIFFERENTIATORS 28/02/2019 ENGIE 2019 174
Slide 58: Financing syndication, strategy design, digital acceleration
FINANCING SYNDICATION Leverage financing for “as a service” developments • Leverage cheaper financing • Maximize our impact and assets portfolio STRATEGY DESIGN DIGITAL ACCELERATION Preferred and strategic relationships A best-in-class software library with C-suite, Fortune 500 and C40 cities • Abil
Slide 59: Growth capex 2019-2021 and ROCE
Growth CAPEX 2019 - 2021 ROCE 1% 30% HIGH SINGLE-DIGIT €4 - 5bn 52% STABLE 17% +12% vs 2016-18 CAPEX plan High value creation Design & Engineering Investment Installation Operation & Maintenance 28/02/2019 ENGIE 2019 176
Slide 60: Very attractive vs. less attractive
Very Attractive Less Attractive Customer intimacy enabling us to develop Simple offer with low-margin business tailor-made solutions (complex & innovative) Focus on activities leveraging ENGIE financing Short-term contracts capabilities and ultimately DBpSO model Long-term contracts, Non-secure offt
Slide 61: Towards a zero-carbon transition and better energy access
TOWARDS A ZERO-CARBON TRANSITION & BETTER ENERGY ACCESS 28/02/2019 ENGIE 2019 178
Slide 62: ENGIE 2019
28/02/2019 ENGIE 2019 179
Slide 63: Conclusion
CONCLUSION 28/02/2019 ENGIE 2019 180
Slide 64: Short, middle and long term offer evolution
Short Term Middle Term Long Term Asset as a On-site service DHC DHC generation On-site DHC generation Microgrids Microgrids Public lighting Clean rooms Clean rooms Mobility Data centers On-site Microgrids generation Public lighting Public Mobility Data centers lighting Data Mobility centers Business
Slide 65: Cost-efficient zero-carbon transition
Faster Growth Higher Value Better Impact Develop “as a service” 3 Boosters: solutions and DBpSO STRATEGY DESIGN DIGITAL ACCELERATION COI CAGR 2018-2021: 11 - 14% FINANCING SYNDICATION Cost-efficient zero-carbon Growth CAPEX 2019-2021: transition COI 2021: €1.3 - 1.4bn €4 - 5bn for our clients Increa
Slide 66: Forward-Looking statements
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
Slide 67: Investor relations contact
Ticker: ENGI +33 1 44 22 66 29 ir@engie.com http://www.engie.com/en/investors-area/ Download the new ENGIE Investor relations app! FOR MORE INFORMATION ABOUT FY 2018 RESULTS: http://www.engie.com/en/investors/results/results-2018/ 28/02/2019 ENGIE 2019 184