Engie S.a. · EURONEXT:ENGI
Engie — GDF Suez — FY2013 Earnings Presentation
27 slides from Engie's earnings presentation, Feb 27, 2014
Slide 1: 2013 Annual Results
Mejillones, Chile Chilca uno, Peru 2013 ANNUAL RESULTS February 27th, 2014
Slide 2: Key messages
Key messages REINFORCING FOCUS 2013 HIGHLIGHTS ON GROWTH • 2014 Net Recurring Income group share • All targets achieved guidance increased: €3.3-3.7bn • Multiple successful developments • Large pipeline of attractive projects • Robust operational performance • New dividend policy 2014-2016(1): and s
Slide 3: 2013: All targets achieved
2013: All targets achieved Figures pro forma equity consolidation of Suez Environnement(1) KEY FIGURES ALL TARGETS ACHIEVED 2013 2013 In €bn 2013 In €bn ACTUAL TARGETS(4) NET RECURRING REVENUES 81.3 INCOME 3.4 €3.1-3.5bn GROUP SHARE(5) NET INCOME GROUP Indicative EBITDA SHARE -9.7 EBITDA 13.4 of €13
Slide 4: Clear strategy roadmap with two overarching ambitions
Clear strategy roadmap with two overarching ambitions • Leverage on strong positions in IPP Be the benchmark • Develop our presence around the gas value energy player in fast chain growing markets • Globalize energy services leadership positions • Be the Energy Partner of choice for our Be leader cu
Slide 5: 2013: wide range of successful developments
2013: wide range of successful developments Acquisition of district heating networks Gazpar Smart metering Global agreement with Sanofi LNGeneration innovative offer on energy efficiency E&P licenses Tender for offshore wind Partnership in onshore wind Contract for ITER project Power
Slide 6: Multiple value levers in Europe
Multiple value levers in Europe TOWARDS A STRUCTURAL PURSUE DEVELOPMENT CHANGE IN GENERATION OF ENERGY EFFICIENCY FOR B2B • Nuclear and hydro expertise • Wide range of energy efficiency offers • Continuous review of thermal fleet • Favorable regulatory framework • Strong position in renewable • Posi
Slide 7: Strong reaction to offset weak market environment
Strong reaction to offset weak market environment 57 55 Outright achieved 52 ∼49 (1) DIFFICULT • Continued weak demand price (€/MWh) CONTEXT IN 2013 45% • End of CO2 free allocations CCGT 34% load factor 25% ∼20% • Prices and spreads decreased Energy Europe perimeter 2011 2012 2013 2014e STRONG • Co
Slide 8: Medium term prospects for Energy Europe
Medium term prospects for Energy Europe • Increase operational efficiency • Re-engineer marketing & sales in generation on strongholds Maintain best in class nuclear availability: Launch new offers through leveraging ENERGY 91%(1) in 2013 excluding D3/T2 outages on services and new businesses EU
Slide 9: Adverse European energy markets
Adverse European energy markets HEADWINDS ON GAS SALES HEADWINDS ON THERMAL GENERATION AND STORAGE • Long-lasting low outright prices: weak demand, increase of renewable capacity • Gas sales Market prices are now the reference, permanent • High, stable gas prices delinking oil/gas Increasing com
Slide 10: Significant impact due to change in long term view & high balance sheet values
Significant impact due to change in long term view & high balance sheet values • Long lasting paradigm change: Thermal assets: expect return to better conditions but not reaching historical levels Gas storage assets: expect slight improvement if progress in regulation First to alarm since 2012
Slide 11: Drawing the consequences in terms of accounting values
Drawing the consequences in terms of accounting values 2013 • No impact on cash or liquidity 2013 impairments (€bn) Goodwill Assets Europe 5.7 8.1 • No impact on Net Recurring Income Energy Europe 4.4 5.7 • No impact on employment Gas storage 1.3 1.9 Other 0.5 Medium term Outside Europe 0.1 1.0 • D&
Slide 12: 2013: Resilient operational performance and strong cash generation
2013: Resilient operational performance and strong cash generation Figures pro forma equity consolidation of Suez Environnement(1) 2013 In €bn 2012 2013 targets(4) NET RECURRING INCOME 3.8 3.4 3.1-3.5 GROUP SHARE(2) EBITDA 14.6 13.4 13-14 with new definition and IFRS 10-11 13.0 CURRENT OPERATIN
Slide 13: EBITDA evolution
EBITDA evolution Figures pro forma equity consolidation of Suez Environnement(1) -8.1% gross / -2.7% organic By business line -5.7% organic without weather and gas tariff impacts (in €bn) (0.4) organic 14.6 +4.2% -26% (0.3) +0.2 -8.2% +6.6% +3.8% 13.4 (0.5) +0.4 FX +0.04 (0.9) +0.2 (0.2) SCOPE 2012
Slide 14: Net Income and cash flow
Net Income and cash flow Figures pro forma equity consolidation of Suez Environnement(1) (In €bn) -10% NRIgs 2013 €3.4bn 3.8 (1.2) +0.2 3.4 +0.4 +0.2 Net impairments -12.8 ns NRIgs Δ EBITDA Δ D&A, Δ FINANCIAL Δ INCOME Δ MINORITY NRIgs 2012 OTHERS RESULT TAX INTERESTS 2013 Others(2) -0.4 • Weather •
Slide 15: Sharp decrease in net debt and financial cost
Sharp decrease in net debt and financial cost 2014 TARGET REACHED ONE YEAR EARLIER BALANCE SHEET OPTIMIZATION 45 In €bn 36.6 • Portfolio optimization with €4.7bn impact 32.2 29.8 < 30 on net debt + €0.3bn received in January 2014 (Jirau) • Buy back of €1.7bn debt portfolio bearing an average coupon
Slide 16: Upgrading Perform 2015 targets following strong performance
Upgrading Perform 2015 targets following strong performance 2013 CONTRIBUTION CUMULATIVE IMPACT ON NET with SEV equity consolidated RECURRING INCOME GROUP SHARE In €bn Strong acceleration in 2013 Gross EBITDA Contribution 1.0 +€0.4bn vs +€0.2bn expected Fixed cost drift in energy businesses (0.4) ~€
Slide 17: 2014 EBITDA: growth levers mitigating further decrease in Energy Europe
2014 EBITDA(1): growth levers mitigating further decrease in Energy Europe Growth levers 13.0(3) 12.3-13.3 FX SCOPE(4) ENERGY ENERGY GLOBAL INFRA- ENERGY 2013(2) EUROPE INTERNATIONAL GAS & LNG STRUCTURES SERVICES 2014 EBITDA (0.3) (0.2) (0.4)-(0.2) 0.1-0.3 0.3-0.5 (0.1)-0.1 0-0.1 EBITDA
Slide 18: An increased 2014 NRIgs guidance: €3.3–3.7bn
An increased 2014 NRIgs(1) guidance: €3.3–3.7bn In €bn 2014(2) EBITDA(3) 12.3-13.3 DEPRECIATION & AMORTIZATION (5.0-5.2) CURRENT OPERATING INCOME(3) including share in Net Income of associates 7.2-8.2 FINANCIAL RESULT (recurring) (1.6-1.8) INCOME TAX (recurring) (1.7-1.9) NON CONTROLLING INTERESTS (
Slide 19: Reinforcing focus on growth
Reinforcing focus on growth BOOSTING CAPEX PROGRAM 2013 2014-2016 Maintenance Growth In €bn Yearly average In €bn Additional growth Gross Capex Gross Capex Gross Capex 9-10 Capex Disposals 7.5 Disposals pipeline Net Capex 7 2-3 2-3 6-8 4.9 (4.7) Net Capex(1) 3 4.5 Reduce exposure to mature/merchant
Slide 20: Capex program designed to seize growth opportunities
Capex program designed to seize growth opportunities ENERGY SERVICES ENERGY INTERNATIONAL ∼€2bn Strict and selective approach ∼€4.5bn • Energy efficiency Project IRR > project WACC + 200bps • Tarfaya (Morocco) projects • Tihama (Saudi Arabia) • … • Peakers (South Africa) • Jirau (Brazil) ~15% • Quit
Slide 21: Strong industrial ambition supported by growth Capex pipeline
Strong industrial ambition supported by growth Capex pipeline ENERGY SERVICES ENERGY INTERNATIONAL Expected commissioning of additional capacity (in GW at 100%) • Revenues organic growth = GDP growth +2% ∼13 • Reach EBIT/Revenues ≥ 5% in 2016 8.4 • Selective acquisitions in targeted markets 4.8 2.9
Slide 22: Growth platforms boosted by additional Capex
Growth platforms boosted by additional Capex Energy merchant Regulated French Growth platforms(3) activities in Europe gas infrastructures(2) LANDING IN 2015-2016 STEADY & PREDICTABLE ROBUST GROWTH PERSPECTIVES CASH FLOWS 3.8 2.1 1.8 ~ 8-10% CAGR ~ 3-4% CAGR 2012 2013 2014 2015 2016 + 2013 2014 2015
Slide 23: Environmental and social targets well on-track
Environmental and social targets well on-track Delivering on objectives Highlights 2013 2013 level 2015 targets • New CO2 objective: to reduce the CO2 specific CO2 SPECIFIC EMISSIONS -10% emission ratio of power and associated heat (emission ratio per power and energy production) New (2020) generati
Slide 24: 2014 targets increased
2014 targets increased 2014 FINANCIAL TARGETS(1) Net Recurring Income group share(2) Net Capex(3) In €bn In €bn 3.3-3.7 9-10 3.4 (gross) 7.5 (gross) 6-8 3.1(4) 3 2013 2014 2013 2014 65-75% payout ratio(5) Net debt/EBITDA ≤2.5x Dividend €1 per share minimum “A” category rating (1) Targets assume aver
Slide 25: Conclusion
Conclusion All 2013 targets achieved and 2014 guidance increased Clear strategic roadmap • Be the benchmark energy player in fast growing markets • Be leader in the energy transition in Europe Accelerate the Group’s transformation strategy • Pursue accelerated Perform 2015 plan • Implement new busin
Slide 26: 2013 Annual Results
Mejillones, Chile Chilca uno, Peru 2013 ANNUAL RESULTS February 27th, 2014
Slide 27: Disclaimer
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 ex