Engie S.a. · EURONEXT:ENGI
Engie — GDF Suez — Investor Day (December 2012)
155 slides from Engie's investor day presentation, Dec 6, 2012
Slide 1: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 1
Slide 2: Today's agenda
Today’s agenda Accelerating GDF SUEZ transformation 9:00–9:50 G. Mestrallet A distinctive business model tailored for value creation (part I, II & III) 9:50–10:40 I. Kocher 10:40–11:00 Break A distinctive business model tailored for value creation (part IV & V) 11:00–11:30 I. Kocher Q&A 11:30–12:30
Slide 3: Accelerating GDF SUEZ transformation
Provalys LNG carrier, Saint Nazaire, France Power generation, Umm Al Nar, Abu Dhabi Accelerating GDF SUEZ transformation Gérard MESTRALLET Energy Services, Chairman and Chief Executive Officer Districlima in Barcelona, Spain INVESTOR DAY December 6, 2012 INVESTOR DAY December 6, 2012
Slide 4: Accelerating GDF SUEZ transformation
Accelerating GDF SUEZ transformation Accelerating Group focus Implementation of an ambitious action plan adapted to current environment Focused growth for the future INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012 4
Slide 5: Quick and deep changes in global energy markets
Quick and deep changes in global energy markets European energy market in crisis • Low demand • Power prices decreasing • End of CO2 free allowances in 2013 US energy market transformed by shale gas revolution • U.S. to become self‐sufficient in terms of oil and gas use by 2025 Steady growth in ener
Slide 6: Clear strategy in a challenging and contrasted environment
Clear strategy in a challenging and contrasted environment 3 strategic orientations Management priorities • Accelerate development in fast growing • Flexible business model to protect markets value and seize opportunities • Balanced positions to mitigate risks: • Optimize and integrate in mature mar
Slide 7: Accelerated refocusing of the Group in 2012
Accelerated refocusing of the Group in 2012 Creation of Energy Europe business line • Consolidate within one single business line all the continental Europe activities • Covering electricity generation, portfolio management and sales of electricity & gas Full integration of International Power • Acc
Slide 8: Preserving long-term partnership with Suez Environnement
Preserving long-term partnership with Suez Environnement • Willingness to remain a reference shareholder of Suez Environnement in the long term • Common growth drivers (urban population growth, demand of efficient solutions for energy services, water treatment and waste management…) • Common client
Slide 9: Suez Environnement and GDF SUEZ will maintain strong commercial and industrial links
Suez Environnement and GDF SUEZ will maintain strong commercial and industrial links In strict compliance with competition laws: • Purchase / Supply agreement - Power purchase agreement on electricity • Cooperations between industrial activities - Waste energy production and commercialization - Cons
Slide 10: Group transformation in 2012 has been consistent with its strategic objectives
Group transformation in 2012 has been consistent with its ambitious strategic objectives Energy Europe business line creation • SIMPLIFY THE GROUP’S STRUCTURE January International Power full acquisition • REFOCUS ON ENERGY MARKETS April • STRENGTHEN POSITIONING IN FAST GROWING MARKETS Waiving
Slide 11: A more focused organization: energy business lines
A more focused organization: 5 energy business lines with clear objectives Energy International Focus on growth Energy Europe Focus on optimization Global Gas & LNG LNG growth and upstream hedge Infrastructures Strong cash flow generation and visibility Energy Services Energy efficiency gr
Slide 12: Accelerating GDF SUEZ transformation
Accelerating GDF SUEZ transformation Accelerating Group focus Implementation of an ambitious action plan adapted to current environment Focused growth for the future INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012 12
Slide 13: Reducing exposure to European merchant markets
Reducing exposure to European merchant markets Challenging environment Focus on performance in Europe of European asset base • Economic crisis and sluggish demand • Reduce costs, scope and streamline European positions • Downward pressure on commodity prices • Increased competition • Optimize electr
Slide 14: An ambitious roadmap to enhance value and preparing for growth
An ambitious roadmap to enhance value and preparing for growth • Reduce exposure to European merchant markets • Focus Capex allocation on development in fast growing markets • Improve performance in operations with Perform 2015 • Develop key competitive advantages: strong presence in fast growing ma
Slide 15: Setting management priorities to adapt the Group
Setting management priorities(1) to adapt the Group to the current environment • Reduction of net debt to ~€30bn by end 2014 • Enhanced asset optimization program: €11bn over 2013-2014 REDUCE SIGNIFICANTLY • Equity consolidation of Suez Environnement NET DEBT • Ambitious plan Perform 2015 • Net debt
Slide 16: Perform 2015: a significant ambition in P&L and cash flow optimization
Perform 2015: a significant ambition in P&L and cash flow optimization SIGNIFICANT AMBITION ~€3.5bn & ~€1bn Gross P&L contribution in 2015 Capex and working capital optimization in 2015 By lever By business By year In €bn ~ 0.2 1.5 ~ 0.6 ~ 1.6 4.5 ~ 3.5 3.5 3.0 2.3 ~0.5 ~1.1 ~1.0 ~0.5 0.8 G&A Other
Slide 17: A significant improvement in each of the Group's activities
A significant improvement in each of the Group's activities Energy Services • Strong influence of external factors on • Operational excellence is the key performance driver performance (commodity prices, regulation) (pricing, productivity, G&A) • Capital intensive • Revenue and costs are closely lin
Slide 18: A dedicated HR approach to support Perform 2015
A dedicated HR approach to support Perform 2015 Considerable leeway Approach on HR levers 2012 situation(1) • Adapt hiring policy according to regional and business dynamics • ~ 25,700 new hirings including 13,770 permanent contracts • Reinforce significantly internal mobility • ~ 6,500 internal mov
Slide 19: A project organization to ensure that targets will be met
A project organization to ensure that targets will be met Phase 1: completed by Phase 2: accelerate end of current year implementation (January 2013) • Acceleration of quick wins in 2012: • Additional projects kicked-off overachievement of 2012 target by €200m • Appointment of dedicated project mana
Slide 20: Accelerating GDF SUEZ transformation
Accelerating GDF SUEZ transformation Accelerating Group focus Implementation of an ambitious action plan adapted to current environment Focused growth for the future INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012 20
Slide 21: Accelerating the development in fast growing markets: power generation
Accelerating the development in fast growing markets: power generation Evolution of installed capacity Future projects to meet in fast growing markets increasing energy demand +21% ~55 GW Where the Group has built pioneering positions: Latin America, Middle East, Asia ~45 GW 11 ASIA 9 In new targete
Slide 22: Accelerating the development in fast growing markets: natural gas
Accelerating the development in fast growing markets: natural gas Develop along the gas value chain With a clear focus on natural gas Increase upstream positions to support Shifting from Atlantic basin to Asian the Group’s strategy premium markets Number of LNG cargoes from deals • Liquefaction proj
Slide 23: Energy Efficiency: leveraging on competitive advantage
Energy Efficiency: leveraging on competitive advantage Growing needs Leadership positions in energy efficiency and ambitious targets 2011 Revenue in services (in €bn) Meeting markets’ new expectations • Develop energy performance contracting 14.2 • Provide a global response to the urban challenges A
Slide 24: Financial strength as a competitive advantage
Financial strength as a competitive advantage Keep solid financial structure Generate strong cash flow before capex « A » category rating Based on FY 2011 results • Best in class access to markets with a low cost of financing Cash Flow before Capex in % of EBITDA • Contributing to business successes
Slide 25: Maintain our dividend policy
Maintain our dividend policy Strong track record DPS 2005–2011(1)(2) 300 250 GDF SUEZ 221 200 ENEL 152 EDF 150 146 Iberdrola 114 100 Gas Natural 50 43 E.ON 41 36 RWE 0 2005 2006 2007 2008 2009 2010 2011 (1) Regular dividend paid excluding exceptional dividend (source: Bloomberg) (2) Rebased 100 as o
Slide 26: Financial targets
Financial targets(1) 2012 • All targets confirmed • Net Recurring Income group share(2): €3.1–3.5bn - average weather, stable regulation - indicative EBITDA of €13-14bn, flat at constant scope vs 2012 2013 • Gross CAPEX: €7–8bn • Net debt/EBITDA ≤2.5x and “A” category rating Targets pro forma equity
Slide 27: Capturing & securing growth in the medium term
Capturing & securing growth in the medium term Increased exposure Combined with to fast growing markets a resilient business portfolio 23% ~40% 49% ~35% Medium Medium 2011 NRIgs 2011 NRIgs term NRIgs term NRIgs 77% 51% ~65% ~60% Mature markets Merchant activities Fast growing markets Regulated/contr
Slide 28: Strong confidence in ability to deliver profitable growth
Strong confidence in ability to deliver profitable growth Transform business model in mature markets • Strong action with Perform 2015 • Optimize generation asset base by mothballing or closing low-utilized assets • Commission an additional renewable capacity of 2 GW by 2017 in Europe + Benefit from
Slide 29: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 29
Slide 30: A distinctive business model tailored for value creation
Germinon-Vélye windfarm, France Ras Laffan C power plant, Qatar A distinctive business model ChilcaUno power plant, Chile tailored for value creation Isabelle KOCHER Executive Vice-President, Chief Financial Officer INVESTOR DAY December 6, 2012 INVESTOR DAY December 6, 2012
Slide 31: A distinctive business model tailored for value creation
A DISTINCTIVE BUSINESS MODEL TAILORED FOR VALUE CREATION 2013 financial targets A violent shock in energy in Europe and other mature markets Strong reaction to protect value creation Robust cash flow generation supported by powerful growth relays and INVESTOR DAY counter-cyclical activities
Slide 32: 2013 financial targets
2013 financial targets Crisis in mature energy markets accelerating in 2013, especially in Europe Capturing significant growth from our strategic priorities in fast growing markets Launching an ambitious action plan enhancing operational performance in each business line Deleveraging through an upgr
Slide 33: 2013 EBITDA: stable at constant scope
2013 EBITDA: stable at constant scope ~17 ~(2.5) Breakdown by main effect (in €bn) ~14.5 ~(0.7) ~0.8 ~(0.3) ~0.6 ~13.8 ~(0.2) ~(0.6) ~(0.3) 13–14(1) 2012 Suez 2012 Scope 2012 proforma 2012 non Commissioning Volume & price Volume & price Action Fixed cost drift in 2013 Environnement post-SE recurring
Slide 34: A €3.1–3.5bn guidance on 2013 NRIgs
A €3.1–3.5bn guidance on 2013 NRIgs In €bn 2013 EBITDA(1) 13–14 Depreciation, amortization and provisions & others ~(6.0) Current Operating Income 7–8 Financial result (recurring) (2.0–2.2) Income tax (recurring) (1.8–2.0) Share in net income of associates (recurring) ~0.5 Non controlling interests
Slide 35: A distinctive business model tailored for value creation
A DISTINCTIVE BUSINESS MODEL TAILORED FOR VALUE CREATION 2013 financial targets A violent shock in energy in Europe and other mature markets Strong reaction to protect value creation Robust cash flow generation supported by powerful growth relays and INVESTOR DAY counter-cyclical activities
Slide 36: Energy Europe: impacted by a violent shock
Energy Europe: impacted by a violent shock Energy Europe business profile • Strong presence in France, Benelux Differentiating factors • Diversified energy mix mostly based on gas-fired plants • Presence along the whole electricity value chain ; highly diversified energy mix ; among the lowest CO2 e
Slide 37: Energy Europe: sharp decrease in energy prices and spreads
Energy Europe: sharp decrease in energy prices and spreads Power demand in Europe Gas demand in Europe (TWh) bcm TWh 2900 400 160 2850 380 140 2800 360 14% decrease from 2010 to 2012e (all sectors) 2750 120 340 2700 100 320 25% decrease 2650 from 2010 to 2012e 300 80 2600 2008 2009 2010 2011 2012 20
Slide 38: Energy Europe: securing gas supply margin through renegotiations
Energy Europe: securing gas supply margin through intense renegotiations Severe competition in a context Securing gas supply margin of decreasing demand • Sharp decrease of gas sales to Giants • Play on all levers of negotiation in Europe (-24TWh in 2011) to achieve our goals • Strong competition le
Slide 39: Energy Europe: strong regulatory and fiscal pressure
Energy Europe: strong regulatory and fiscal pressure • Increase of tariffs for grid use in Belgium Pressure from • Tariff freeze (gas and electricity) in Belgium in 2012 local regulators • Tariff increase limited to 2% for Q3 and for Q4 for gas retail in France; positive ruling from Conseil d'Etat •
Slide 40: Mitigating the violent impact of the crisis before rebounding
Mitigating the violent impact of the crisis before rebounding • Prices, regulatory and fiscal pressure and more severe competition could have led to a decrease in 2013 EBITDA vs 2012 of ~€1bn • Perform 2015, increased volumes and other positive effects will limit the decrease to ~€(0.6)bn • Crisis i
Slide 41: A distinctive business model tailored for value creation
A DISTINCTIVE BUSINESS MODEL TAILORED FOR VALUE CREATION 2013 financial targets A violent shock in energy in Europe and other mature markets Strong reaction to protect value creation Robust cash flow generation supported by powerful growth relays and INVESTOR DAY counter-cyclical activities
Slide 42: Strong reaction to protect value creation
Strong reaction to protect value creation Reduce costs and increase revenues with Perform 2015 Costs Reduction of net debt to ~€30bn by end 2014 Acceleration of Group's transformation INVESTOR DAY – December 6, 2012 42
Slide 43: Reduce costs and increase revenues with Perform 2015
Reduce costs and increase revenues with Perform 2015 Costs Perform 2015 aims at improving performance in operations • Accelerate implementation of the Group’s strategy in a systematic and sustainable way over a three year period (2012-2015) • Enhance support through centrally-driven enablers (change
Slide 44: Perform 2015: a significant ambition in P&L and cash flow optimization
Perform 2015: a significant ambition in P&L and cash flow optimization SIGNIFICANT AMBITION ~€3.5bn & ~€1bn Gross P&L contribution in 2015 Capex and working capital optimization in 2015 By lever By business By year In €bn ~ 0.2 1.5 ~ 0.6 ~ 1.6 4.5 ~ 3.5 3.5 3.0 2.3 ~0.5 ~1.1 ~1.0 ~0.5 0.8 G&A Other
Slide 45: Perform 2015: cost reduction for Energy and Services business lines
Perform 2015: cost reduction for Energy and Services business lines Energy business lines Benchmark of 2011 cost base Cost reduction integrated utilities in €bn over 2012-2015 15% 13% • Energy Europe business line 4.5 15% 9% 11% • Other Energy business lines 5.0 11% Over Over Over Over 4 yrs 3 yrs 3
Slide 46: Examples of levers – G&A
Reduce costs and increase revenues with Perform 2015 Costs Examples of levers – G&A Benchmark of A 15% reduction objective: G&A costs as % of revenues €1.1bn in 2015(1) ▪ Optimize Corporate Center: - Review roles and responsibilities through a value-added activity based analysis - Reduce external ex
Slide 47: Examples of levers – Operational excellence
Reduce costs and increase revenues with Perform 2015 Costs Examples of levers - Operational excellence Operational excellence savings(1) Examples of levers 2012-2015 • Systematically review generation assets portfolio (Europe): in €bn - Low utilized assets: mothballing / closure (2) and maintenance
Slide 48: Examples of levers – Procurement
Reduce costs and increase revenues with Perform 2015 Costs Examples of levers – Procurement A well structured transformation program Gross savings objective • Steered at Group level in close coordination with Business Line operations of ~€1.7bn vs. 2011(1) -7% • Rolled out from December 2012 in ~10
Slide 49: Dynamic debt management to decrease cost of gross debt
Reduce costs and increase revenues with Perform 2015 Costs Dynamic debt management to decrease cost of gross debt Sharp decrease in cost of gross debt • Diversified access to bonds markets 4.93% with positive arbitrage versus Euro 4.58% 4.57% 4.57% markets 4.48% ≤4.25% • Successful debt optimization
Slide 50: Reduction of net debt to ~€30bn by end 2014
Reduction of net debt to ~€30bn by end 2014 ~45 –1/3 • Equity accounting of Suez Environnement ~30 • An enhanced asset optimization program: €11bn over 2013-2014 out of which usual asset rotation of around €1.5bn per year • Towards a more focused capex program June 2012 End 2014 INVESTOR DAY – Decem
Slide 51: Equity accounting of Suez Environnement
Reduction of net debt to ~€30bn by end 2014 Equity accounting of Suez Environnement Waiving control of Suez Environnement while maintaining long term partnership • Non-renewal of Suez Environnement shareholders’ agreement upon expiry in July 2013 • Change in Suez Environnement governance to become a
Slide 52: An enhanced asset optimization program: €11bn over 2013-2014
Reduction of net debt to ~€30bn by end 2014 An enhanced asset optimization program: €11bn over 2013-2014 Net debt impact in €bn 11 90% of the current €13bn optimization program achieved by the end of 2012 6.6 ~5 A value creative optimization program targeted on assets with: 2011 Expected 2013-2014 •
Slide 53: Towards a more focused capex program
Reduction of net debt to ~€30bn by end 2014 Towards a more focused capex program Reduced capex Flexibility Higher program maintained than peers in €bn Committed capex in €bn, 2013–2015 average Growth capex 11.9 Maintenance capex 12.8 10.7 10–11 7–8 7–8 7–8 7–8 5.6 5.2 4.4 3.4 Maintenance capex level
Slide 54: Acceleration of Group's transformation
Acceleration of Group's transformation Asset optimization program Growth capex allocation • Net debt impact 2011-2012: Mature over €10bn of assets in Mature markets Energy Services markets Energy International mature markets among ~10% ~35% 90% €11.6bn expected transactions Infrastructures Fast grow
Slide 55: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 55
Slide 56: A distinctive business model tailored for value creation
A DISTINCTIVE BUSINESS MODEL TAILORED FOR VALUE CREATION 2013 financial targets A violent shock in energy in Europe and other mature markets Strong reaction to protect value creation Robust cash flow generation supported by powerful growth relays and INVESTOR DAY counter-cyclical activities
Slide 57: Energy International in fast growing markets
Energy International in fast growing markets The long term growth engine, fueled by new projects and increasing prices Fast Growing Markets Differentiating factors business profile • Extensive experience in • Strong track record in key countries • Leading independent power producer raising capital f
Slide 58: Energy International in fast growing areas: pipeline of projects
Energy International in fast growing areas A strong pipeline of projects Opportunity Under Under landscape(1) development (2) construction(2) ACOI LATIN €1.3bn AMERICA ~80 GW 9.3 GW 5.2 GW 2011 2013 Medium term Long term €0.4bn MIDDLE EAST TURKEY AFRICA ~100 GW 8.9 GW 2.7 GW 2011 2013 Medium term Lo
Slide 59: Global Gas & LNG
Global Gas & LNG A highly valuable projects portfolio Global Gas & LNG business profile Differentiating factors • E&P strongholds (Norway, Netherlands, Germany, UK) • High level of experience & know-how in E&P strongholds • Diversified portfolio of E&P assets • High level of investments in explorati
Slide 60: Global Gas & LNG: projects portfolio
Global Gas & LNG A highly valuable projects portfolio Projects portfolio E&P production (mboe) 70 65 Despite a temporary decrease in 2013, 60 COD of major projects leads to 55 increase in level of production 50 • Gudrun (Norway) in 2014 45 • Cygnus (UK) in 2015 40 35 • Jangkrik (Indonesia) in 2016 3
Slide 61: Infrastructures
Infrastructures Long-term growth with strong visibility Infrastructures business profile EBITDA trends • Four main types of assets of which three are regulated • A clear and stable regulation framework: four years duration with a yearly update • Attractive RAB return rates up to 11.25% (incentives i
Slide 62: Energy Services
Energy Services Geared to an increasing need in energy efficiency Energy Services business profile EBITDA trends Services • Focused on energy efficiency and/or environmental for major facilities • For large industrial or tertiary customers, public or private • Located primarily in Europe Of two type
Slide 63: Rebalancing our portfolio towards fast growing markets
Rebalancing our portfolio towards fast growing markets and counter-cyclical activities EBITDA breakdown(1) ~8% ~25% Energy Services Infrastructures ~20% Global Gas & LNG Energy International- Fast growing markets ~19% Energy International- Mature markets Energy Europe ~28% 2011 2012 2013 2014 (1) Su
Slide 64: Robust cash flow generation supported by powerful growth relays
Robust cash flow generation supported by powerful growth relays CFFO(1)(2) trends • Powerful growth relays supported by: - Increasing energy demand in fast growing markets - Energy efficiency needs in mature markets • Positive momentum in E&P and LNG operations 2012 2013 2014 2015 Long term • Effici
Slide 65: A distinctive business model tailored for value creation
A DISTINCTIVE BUSINESS MODEL TAILORED FOR VALUE CREATION 2013 financial targets A violent shock in energy in Europe and other mature markets Strong reaction to protect value creation Robust cash flow generation supported by powerful growth relays and INVESTOR DAY counter-cyclical activities
Slide 66: A well-balanced financial equation
A well-balanced financial equation Attractive shareholder remuneration Robust cash flow generation Refocused capex Solid financial and upgraded asset structure optimization program INVESTOR DAY – December 6, 2012 66
Slide 67: Solid cash flow base to sustain shareholder remuneration and growth
Solid cash flow base to sustain both shareholder remuneration and growth ambition Usual asset rotation Gross • Seize growth opportunities • Capture growth in capex in fast growing markets International and regulated activites CFFO • Increase cash generation with Perform 2015 Dividends • Maintain div
Slide 68: Sustained dividend policy
Sustained dividend policy Solid balance sheet structure and strong rating Capital expenditure flexibility Robust cash flow generation covering dividend DPS 2012 = €1.50 to be proposed for approval by GDF SUEZ Annual General Meeting on April 23, 2013 INVESTOR DAY – December 6, 2012 68
Slide 69: Conclusion
CONCLUSION INVESTOR DAY December 6, 2012 INVESTOR DAY December 6, 2012
Slide 70: An attractive business model focused on value creation
An attractive business model focused on value creation A violent shock • Continuous pressure on power prices and clean spark spreads in energy in Europe • Fiscal / regulatory pressure and other mature markets • Severe competition Strong reaction • Reduce costs and increase revenues with Perform 2015
Slide 71: Q&A
INVESTOR DAY Q&A December 6, 2012 INVESTOR DAY – December 2012 71
Slide 72: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 72
Slide 73: Energy Europe transformation
GDF SUEZ Trading Energy Europe Wind farm, Germinon-Vélye, France transformation Moving forward in a challenging environment Jean François CIRELLI Vice-Chairman and President, . Polaniec, power plant, Poland in charge of the Energy Europe business line INVESTOR DAY December 6, 2012 INVESTOR DAY Decem
Slide 74: Fundamental trends reshaping the European market
Fundamental trends reshaping the European market A challenging environment affecting value creation Steep decline of clean spark spreads Gas assets particularly under pressure • A flat energy demand in an adverse economic context 15 German baseload spreads (€/MWh) 10 5 • A difficult regulatory conte
Slide 75: Our answers to face current challenges in the European market
Our answers to face current challenges in the European market 1 Keep a diversified energy mix Focus on operational excellence, reduce costs 2 and limit exposure 3 Pursue selective and capital-efficient development INVESTOR DAY – December 6, 2012 75
Slide 76: Keep a balanced energy mix in an uncertain environment
Keep a balanced energy mix in an uncertain environment A European balanced portfolio Installed capacity by fuel Installed Capacity 10% in GW(1) 15% 11% Gas 26.2 Coal 7.5 53 GW(1) Renewable 8.1 14% Nuclear 5.9 50% Other 5.2 TOTAL 53.0 Renewable Gas Coal Nuclear Other Ability to operate all technologi
Slide 77: Focus on operational excellence, reduce costs and limit exposure
Focus on operational excellence, reduce costs and limit exposure Ambitious contribution to Perform 2015 ~€1bn Ebitda contribution (2015 gross impact vs 2011) Average annual cost reduction effort(2) -excluding energy purchases- Reduction Reductionofofoperating operating (cost base 2011: €4.5 bn) cost
Slide 78: Perform 2015 implemented throughout the whole organization
Perform 2015 implemented throughout the whole organization Breakdown of ~ €1bn gross EBITDA contribution by 2015 Generation: Continuous improvement & adaptation of the fleet to reduce costs and increase efficiency, 33% availability & flexibility Energy Management Trading: Pan European & cross commod
Slide 79: Generation: optimize the fleet (1/2)
Generation: optimize the fleet (1/2) Need for efficiency, flexibility and availability • To deal with more renewable energy development, especially in CWE(1) • To benefit from higher load factors, to increase captured prices and to improve profitability Perform 2015 • Reduce operating costs • Optimi
Slide 80: Generation: optimize the fleet (2/2)
Generation: optimize the fleet (2/2) 2 levers to increase CCGT efficiency: reduce minimum load and increase ramp up Example 1 Example 2 Reduce minimum load (Pmin) Increase ramp up REALIZED REALIZED Initial Pmin (2010) 280 MW Initial ramp-up 10 MW/min Pmin reduced (2012) 160 MW OBJECTIVE OBJECTIVE Re
Slide 81: Generation: mothball or close low utilized assets (1/2)
Generation: mothball or close low utilized assets (1/2) Ongoing action for low utilization assets Assets concerned Plant Country Fuel Capacity Status MW • Load factor < 25 % Realized 2009-2011 • Peaking assets Teesside U.K. Gas 1,830 Capacity reduction • Lowest profitability assets Amercoeur 2 Belgi
Slide 82: Generation: mothball or close low utilized assets (2/2)
Generation: mothball or close low utilized assets (2/2) Additional measures 2012 new decisions • Reinforcement of the review process to • Mothball or close additional 2.1 GW react to deteriorating market conditions in coming month • To define an appropriate action plan: 2012-2013 Country Capacity Ac
Slide 83: Address nuclear fleet challenges (1/2)
Address nuclear fleet challenges (1/2) Objective Nuclear plants operated • Keep nuclear in the energy mix by GDF SUEZ in Belgium out of which 2 GW output dedicated to competition • Preserve very good availability Blue Sky of nuclear fleet E.On 0.2 ~89% in 2011 in average 0.8 Specific situation in 20
Slide 84: Address nuclear fleet challenges (2/2)
Address nuclear fleet challenges (2/2) Short term Challenges for Doel 3 & Tihange 2 Nuclear contribution • Finalization of the characteristics of the technical file • Contribution of €550m for 2012 expected by the Belgian government for the whole sector(1) • File to restart production safely submitt
Slide 85: Integration of Energy Management and Trading
Integration of Energy Management and Trading to create additional value Allowing for higher Integrated organization value creation • Benefit from power & gas convergence • Integrated pan-European management of portfolio (Gas, Power, Coal, • Maximize extrinsic value Downstream…) • Develop coal busine
Slide 86: Energy Management Trading: competitive gas supply contracts
Energy Management Trading: competitive gas supply contracts Gas supply business affected by crisis but profitable Confidence in this business to continue to be profitable in 2012 and beyond: • Dynamic gas contracts renegotiation (frequency adapted to fast evolving markets) • Active management of por
Slide 87: Pursue selective and capital-efficient development
Pursue selective and capital-efficient development Reduce Capex, increase capital efficiency and focus on attractive countries • Capex reduction - No development in merchant thermal on CWE in current condition • Focus on renewable energy Minimum return > WACC • Focus on selected countries +200 bps a
Slide 88: Renewable energy development within an appropriate regulatory framework
Pursue selective and capital-efficient development Renewable energy development within an appropriate regulatory framework • Priority to wind onshore and hydro (incl. French concession renewal) • Prudent development in solar (France) & wind offshore • 600 MW under construction(1) - 400 MW onshore wi
Slide 89: Moving forward in a challenging environment
Moving forward in a challenging environment • European energy context is and will remain difficult in the coming years • Strong response in order to contribute to value creation - Operational excellence and cost reduction - Limitation of exposure - Pursue selective and capital-efficient development
Slide 90: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 90
Slide 91: Power Generation in fast growing markets
Hydro plant, Estreito, Brazil Power Generation Power plant, Fujaïrah, UAE in fast growing markets Strongly positioned to capture multiple growth opportunities Dirk BEEUWSAERT Executive Vice-President Power plant, Glow Energy, Thailand in charge of Energy International business line INVESTOR DAY Dece
Slide 92: Energy International Business Line
Energy International Business Line Strong financial performance – solid platform for further growth Growing profitability Increasing capacity ACOI(1) €m GW 100% 3500 90 3000 80 70 2500 60 2000 50 1500 40 30 1000 20 500 10 0 0 2009 2010 2011 H1 2012 2009 2010 2011 H1 2012 North America UK-Europe Aust
Slide 93: Expanding in fast growing markets is part of GDF SUEZ' history
Expanding in fast growing markets is part of GDF SUEZ’ history Strong increase in contribution from fast growing markets Total installed capacity in fast growing markets in GW at 100% More than x2 45 End 2010 16% 30% 2011* 22 End 2008 End June 2012 NET RECURRING INCOME GROUP SHARE IN FAST GROWING MA
Slide 94: Fast growing markets, a key priority for the Group
Fast growing markets, a key priority for the Group • Strong and established long-term positions • Solid experience across multiple technologies and contract types • High quality local teams – recognized as local reference player • Significant generation capacity under construction • Multiple growth
Slide 95: Performance across the value chain: Development and financing
Performance across the value chain: Development and financing Greenfield Commercialization Development / Construction Operational Capital Asset Financing & Portfolio Execution Excellence optimization Recycling Acquisitions Greenfield development Financing • Developing projects across a range of fuel
Slide 96: Construction execution and operational excellence
Performance across the value chain: Construction execution and operational excellence Greenfield Commercialization Development / Construction Operational Capital Asset Financing & Portfolio Execution Excellence optimization Recycling Acquisitions Construction execution Operational excellence • Over
Slide 97: Commercialization and portfolio optimization
Performance across the value chain: Commercialization and portfolio optimization Greenfield Commercialization Development / Financing Construction Operational & Portfolio Capital Asset Execution Excellence Recycling Acquisitions optimization Commercialization Delivering value through scale & Portfol
Slide 98: Creating additional value on large projects
Creating additional value on large projects through financial and operational optimization Outperformance vs investment case MIDDLE EAST ASIA LATIN AMERICA Construction & Operations Commercial & Financing +3.0% +101 (32) +3.1% +30 +2.7% IRR IRR +45 +14 +38 IRR +68 +69 +59 100 NPV% NPV % NPV % NPV In
Slide 99: Significant drivers for demand growth
Significant drivers for demand growth Demographic Economic 300 (Total population, million) (Total GDP, US$bn) Indonesia 4500 250 4000 Brazil Brazil 3500 200 3000 Mexico 150 2500 Indonesia Mexico 2000 100 1500 Saudi 50 1000 Arabia Saudi 500 0 Arabia 0 2000 2003 2006 2009 2012 2015 2018 2000 2003 2006
Slide 100: Strong positions in key fast growing markets
Strong positions in key fast growing markets Asia Operational 9.4GW (gross) Latin America Middle East, Construction & Mexico Turkey & Africa 1.6GW (gross) Operational Operational 12.0GW (gross) 24.0GW (gross) Construction Construction 5.2GW (gross) 2.7GW (gross) Strong track record Attractiveness of
Slide 101: From foothold to stronghold
From foothold to stronghold Key success factors • Effective entry strategy • Long-term commitment to customers ‒ Greenfield development, participation in privatization, • Track record of delivery selective acquisition • Reputation as a local reference player • Leveraging on Group knowledge, relation
Slide 102: Continued growth in existing markets
Continued growth in existing markets Delivering value Delivering significant additional capacity 2011 ACOI (2)(3) GW GDF SUEZ capacity(1) 60 50 16% Latam & Mexico 40 META 18% €2.1bn 30 66% Asia 20 10 0 2008(4) 2009 2010 2011 2012 2013 2014 2015 Latam META Asia Priorities for existing markets • Signi
Slide 103: Capture opportunities in new markets
Capture opportunities in new markets Factors for assessing new markets Economic Growth Business Attractive Legal Access to New & Power & Political & Financial Opportunities Fundamentals Environment Environment MOROCCO Tarfaya – preferred MONGOLIA bidder, 300MW, CHP5 – preferred Wind bidder, 415MW, S
Slide 104: Power generation in fast growing markets
POWER GENERATION IN FAST GROWING MARKETS Middle East, Turkey & Africa (META) Asia Latin America & Mexico INVESTOR DAY 2012 December 6, 2012 INVESTOR DAY – December 6, 2012 104
Slide 105: Highly successful developer in META
Highly successful developer in META TURKEY • Over 20 projects awarded to IPR-GDF SUEZ since 1996 - 26.7GW gross capacity, 8.3GW net capacity - 4,800,000m3 water desalination capacity KUWAIT BAHRAIN QATAR • The most successful developer in the META region by gross capacity SAUDI ARABIA UAE - #1 Devel
Slide 106: Power demand driven by strong fundamentals
Power demand driven by strong fundamentals Significant capacity Multiple opportunities requirement throughout the region Potential new capacity needed by 2020 GW 35 Multiple opportunities – key drivers 30 25 • Power demand growth driven by strong 20 economic fundamentals in Gulf Cooperation 15 Counc
Slide 107: Multiple opportunities throughout the region
Multiple opportunities throughout the region • Exclusive negotiations - 2.9GW of projects where we have been announced as preferred bidder and received internal approval Kuwait • Final development phase South Africa EXCLUSIVE - 1.7GW of projects close to final bid stage NEGOTIATIONS South Africa • O
Slide 108: Power generation in fast growing markets
POWER GENERATION IN FAST GROWING MARKETS Middle East, Turkey & Africa (META) Asia Latin America & Mexico INVESTOR DAY 2012 December 6, 2012 INVESTOR DAY – December 6, 2012 108
Slide 109: Significant increase in capacity in the last 5 years
Significant increase in capacity in the last 5 years Gross capacity increased through greenfield and selective asset acquisition End of 2007: 6.8 GW PAKISTAN BAHRAIN LAOS • Singapore - Senoko THAILAND – Acquisition of 2.6GW CCGT (2008) SINGAPORE – Repowering of 0.3GW Operational asset • Indonesia -
Slide 110: Major capacity requirement driven by economic growth and demography
Major capacity requirement driven by economic growth and demography Multiple opportunities Significant capacity requirement throughout the region Multiple opportunities – key drivers: Potential new capacity needed by 2020 • High economic growth across majority of GW countries, resulting in rising el
Slide 111: Multiple opportunities across a wide range of fuel types
Multiple opportunities across a wide range of fuel types PPA secured • Geothermal Indonesia: 3 projects (680MW) under MW under development advanced development – first exploration and drilling ongoing 2500 Exclusive negotiations 2000 • CHP 5 Mongolia (415MW): preferred bidder status Further targeted
Slide 112: Power generation in fast growing markets
POWER GENERATION IN FAST GROWING MARKETS Middle East, Turkey & Africa (META) Asia Latin America & Mexico INVESTOR DAY 2012 December 6, 2012 INVESTOR DAY – December 6, 2012 112
Slide 113: A leading player in key Latin America markets
A leading player in key Latin America markets MEXICO Brazil • #1 private player in Brazil - 6% market share PUERTO RICO COSTA RICA • 88% capacity growth since 1998 • Hydro dominated portfolio complemented by thermal plant PANAMA • Diversified customer base PERU • Significant capacity under construct
Slide 114: Over 75GW of potential new capacity required
Over 75GW of potential new capacity required Significant capacity Multiple opportunities requirement throughout the region Potential new capacity needed by 2020 GW • Growing economically active 50 45 population driving increase 40 in consumption 35 30 25 • Demography and an intense social 20 15 mobi
Slide 115: Further growth opportunities in established region
Further growth opportunities in established region Current development opportunities Brazil • Actively developing hydro, wind and biomass projects MW under development • Assessing participation in upcoming auctions, including São Manoel (700MW), São Luiz do Tapajos (7,800MW) 1000 Chile 8 900 800 • P
Slide 116: Strongly positioned to capture growth
Strongly positioned to capture growth Opportunity Set Group focus on fast growing markets MW 25000 • Investments backed by long-term contracts, delivering attractive returns and cash flow 20000 • Strong established presence in key emerging markets • Evaluation of opportunities in new countries throu
Slide 117: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 117
Slide 118: Energy Efficiency
Eco-neighborhood, Fribourg-en-Brisgau, Germany Energy Efficiency A profitable growth story Jérôme TOLOT Executive Vice-President in charge of the Energy Services business line INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012
Slide 119: The energy transition calls for energy efficiency solutions
The energy transition calls for ENERGY EFFICIENCY SOLUTIONS Consume Consume LESS SMARTER Energy Performance Contract - Solar plant – Reunion, France CHP plants - Saipol, France District Network - London, UK Alsace, France INVESTOR DAY – December 6, 2012 119
Slide 120: Favorable context in Europe
Favorable context in Europe Key drivers European additional market valued up to ~€80bn/year by 2020 • Strong client expectations In €bn • Regulatory framework Industry ~20 • Acceleration in the development Housing estate 40-45 of renewables Tertiary ~15 • Energy production decentralization • Develop
Slide 121: Strong clients' expectations for energy savings
Strong clients’ expectations for energy savings and low carbon energy solutions Top priority for more than 70% of our clients Private tertiary Public tertiary Industry Leicester University,UK European Parliament, France Ariane V, French Guyana Source: Electrabel survey on B2B clients - 2010 Clients’
Slide 122: Strong competitive advantage for GDF SUEZ
Strong competitive advantage for GDF SUEZ Unique exposure 2011 revenues in Energy Services 14.2 (in €bn) 1.5 1.4 1.4 ns ns ns IBERDROLA GAS NATURAL EDF E.ON ENEL RWE FENOSA (Dalkia International) Source: GDF SUEZ estimates based on FY 2011 results European Leader Examples on our main markets Install
Slide 123: Well-balanced business model
Well-balanced business model Large offer of Presence on the Well-balanced complementary entire value chain client portfolio expertise Facility Management 5% 24% 37% 40% Networks & €14.2bn €14.2bn Engineering 41% Industrial Utilities revenues(1) revenues(1) 26% 13% 14% Multi-technical Maintenance Ins
Slide 124: Cutting edge offers
Cutting edge offers Public tertiary Private tertiary District Heating & Cooling Networks Green Data Centers City of Hamburg BNP Paribas Fortis – Haren, Belgium Solar heating system and biomass heat pumps 20% of Power Usage effectiveness Energy Performance Contract City of Bougival Energy Performan
Slide 125: Strong opportunities worldwide
Strong opportunities worldwide Strong leadership positions Objective to double in Europe international sales by 2018* 15% of the B2B energy services market TOP 5 #1 on networks #1 #1 TOP 10 Leadership position TOP 3 #1 TOP 3 Challenger position #1 TOP 5 Consolidate our leadership: France, Belgium, M
Slide 126: Solid and sustainable financial record
Solid and sustainable financial record Continuous increase of profitability 900 14,00% in €m 800 6.9% 12,00% 700 600 6.5% 10,00% 500 8,00% EBIT 4.8% 4.4% 400 6,00% 4.2% EBIT / revenues 300 4,00% 200 3.7% EBITDA / revenues 100 2,00% 0 0,00% 2006 2008 2011 2012 Mid Term Costs optimization Low capital
Slide 127: Key strategic priorities
Key strategic priorities Energy performance solutions Urban renovation Energy efficiency Green Data Centers District heating, cooling Public lighting in buidings and lighting networks 2011 revenues €7.1bn 2011 revenues €1.7bn Capital intensity + Capital intensity ++ Upstream energy restructuring Fac
Slide 128: Energy Efficiency: a competitive advantage for GDF SUEZ
Energy Efficiency: a competitive advantage for GDF SUEZ Expertise in the entire value chain Solid leadership positions in Energy Efficiency solutions Strong opportunities in Europe and substantial needs in fast growing markets Sustainable profitability with low capital intensity Synergies
Slide 129: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 129
Slide 130: LNG, a differentiating edge for GDF SUEZ
LNG terminal, Montoir-de-Bretagne, Francel Melkoya island,liquefaction plant, Norway LNG, a differentiating edge for GDF SUEZ Jean-Marie DAUGER Executive Vice-President LNG cargo unloading in Shanghai, China in charge of the Global Gas & LNG business line INVESTOR DAY December 6, 2012 INVESTOR DAY D
Slide 131: LNG, a differentiating edge for GDF SUEZ
LNG, A DIFFERENTIATING EDGE FOR GDF SUEZ LNG demand, a robust outlook GDF SUEZ differentiating position Integrated business model, optimizing value creation for GDF SUEZ GDF SUEZ ambitions in LNG INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012 131
Slide 132: LNG demand, a robust outlook
LNG demand, a robust outlook Steady growth in natural Strong LNG demand driven gas demand by Asia-Pacific Primary energy demand by fuel Forecasted LNG demand growth by region in mtpa in mtoe 450 400 4,000 4000 350 Gas 300 3000 3,000 250 200 2000 2,000 150 1000 1,000 100 50 0 0 1980 1990 2000 2010 20
Slide 133: LNG market undergoing profound changes from downstream to upstream
LNG market undergoing profound changes from downstream to upstream Globalizing market 2010 2020 18 24 Exporting countries Importing countries 23 39 Source: PFC, CERA, GDF SUEZ INVESTOR DAY – December 6, 2012 133
Slide 134: Gas pricing mechanisms should remain differentiated
Gas pricing mechanisms should remain differentiated over the medium-term 3 main markets, with specific pricing mechanisms $/MMBtu 25 Hub Based Hub Based 20 (Henry Hub) (NBP) 15 North Asia- 10 Europe America Pacific 5 Oil-Linked Oil-Linked 0 (Brent) (JCC) Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan
Slide 135: LNG, a differentiating edge for GDF SUEZ
LNG, A DIFFERENTIATING EDGE FOR GDF SUEZ LNG demand, a robust outlook GDF SUEZ differentiating position Integrated business model, optimizing value creation for GDF SUEZ GDF SUEZ ambitions in LNG INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012 135
Slide 136: LNG, a differentiating feature for GDF SUEZ
LNG, a differentiating feature for GDF SUEZ Leadership position for GDF SUEZ (4) (2) (3) (1) Liquefaction 0.5 0.1 2.1 capacity 1 1 2 Supply 16 6.6 4.8 2.6 9.2 portfolio 6 1 4 3 5 LNG 17 1 6 8 carriers Regasification 31.2 4.9 4.4 5 0.9 4.5 8.9 capacity 6 2 3 3 1 3 4 X mtpa countries Significant contr
Slide 137: A global LNG footprint
A global LNG footprint Snøhvit LNG Isle of Grain 17 LNG carriers (incl. 2 Shuttle & Regasification Vessels) Zeebrugge Everett Fos Tonkin Montoir Fos Cavaou Sabine Pass Neptune Dahej (3) Freeport Cameron LNG Arzew Bethioua Idku Skikda Penuelas (1) Atlantic LNG NLNG Yemen LNG Andhra Pradesh Kochi (2,3
Slide 138: LNG, a differentiating edge for GDF SUEZ
LNG, A DIFFERENTIATING EDGE FOR GDF SUEZ LNG demand, a robust outlook GDF SUEZ differentiating position Integrated business model, optimizing value creation for GDF SUEZ GDF SUEZ ambitions in LNG INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012 138
Slide 139: Integration along the LNG value chain creating additional value
Integration along the LNG value chain creating additional value Engineering, Liquefaction / Supply & sales Shipping Regasification research Production & innovation Additional Natural Portfolio Accessing Accessing Transversal value hedge optimization markets markets know-how from with pipeline gas in
Slide 140: Liquefaction: various options to access equity LNG
Liquefaction: Various options to access equity LNG with destination flexibility 3 business models for value creation Integrated project Liquefaction project Liquefaction capacity Monetization of stranded Securing infrastructure Tolling structure gas reserves recurrent margin • E&P and liquefaction •
Slide 141: Cameron LNG project: access to fully flexible US LNG
Cameron LNG project: Access to fully flexible US LNG Project description • 12mtpa brownfield liquefaction project GDF SUEZ committment: 4mtpa tolling agreement • DOE(1) authorization to export to FTA(2) countries • Pending authorization for non-FTA countries • FEED(3) study CAMEROON LNG, Louisiana •
Slide 142: Supply & sales: flexible portfolio to support new markets
Supply & sales: Flexible portfolio to support the development of new markets Diversified sales portfolio Arbitrage opportunities Breakdown of sales by type of contracts vs. supply portfolio $/MMBtu 100% 90% 80% 20 70% 60% 15 50% 40% 30% 10 20% 10% 0% 5 2011 2012 2013 LT LNG portfolio management 0 MT
Slide 143: Value creative commercial developments in Asia
Value creative commercial developments in Asia LNG sales agreements with major Asian players Up to 174 cargoes (~10.8mt) between 2010 and 2016 including: Kochi* LNG office 50 in Singapore Jangkrik 45% stake 29 in Muara Bakau offshore licence 2012 2013 Number of cargoes E&P office in Jakarta Bonapart
Slide 144: Shipping: ship management and fleet optimization
Shipping: Ship management and fleet optimization as support to supply & sales Financial & Economics Increasing charter rates $’000/day Estimated LT LNG Charter Rates 100 100000 Value creation 95000 90 90000 • Optimized fleet adapted in size 85000 - 17 ships required for current sales profile 80 8000
Slide 145: Regasification: recurrent revenues and access to new downstream markets
Regasification: Recurrent revenues and access to new downstream markets Value creation • Infrastructures - Europe: Regulated activity, secured recurrent margins - International: Long term contracted activity, integrated activity (Mejillones) • Regasification capacity - Access to new markets: India,
Slide 146: Engineering and Innovation: expertise in LNG
Engineering and Innovation: GDF SUEZ’ expertise in LNG to develop new solutions Mejillones: Fast-track Paving the way for LNG future usages floating storage Small scale LNG • LNG Solution: JV between Cofely and GDF SUEZ Energy NL • Global LNG solution for the transportation market in the Netherlands
Slide 147: LNG, a differentiating edge for GDF SUEZ
LNG, A DIFFERENTIATING EDGE FOR GDF SUEZ LNG demand, a robust outlook GDF SUEZ differentiating position Integrated business model, optimizing value creation for GDF SUEZ GDF SUEZ ambitions in LNG INVESTOR DAY December 6, 2012 INVESTOR DAY – December 6, 2012 147
Slide 148: GDF SUEZ strong ambition in LNG
GDF SUEZ strong ambition in LNG • Develop our own liquefaction / production projects to increase our presence along the LNG value chain • Increase portfolio to 20 mtpa by 2020 with new supply sources and equity LNG • x2 external LNG sales (from 2 to 4 mtpa) mainly in emerging markets by 2020 • Devel
Slide 149: LNG, a value creative ambition for GDF SUEZ
LNG, a value creative ambition for GDF SUEZ Market with a robust outlook Vector of growth to support GDF SUEZ development in premium markets Various and flexible upstream options to access LNG INVESTOR DAY – December 6, 2012 149
Slide 150: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 150
Slide 151: Wrap-up
Provalys LNG tanker, Saint Nazaire, France Power generation, Umm Al Nar, Abu Dhabi Wrap-up Gérard MESTRALLET Energy Services, Chairman and Chief Executive Officer Districlima in Barcelona, Spain INVESTOR DAY December 6, 2012 INVESTOR DAY December 6, 2012
Slide 152: Accelerating GDF SUEZ transformation
Accelerating GDF SUEZ transformation • Unique business profile with exposure to fast growing markets, LNG and Energy Efficiency • Ambitious Group Action Plan which responds to short-term challenges • Commitment to dividend and balance sheet • Ability to capture growth in the medium term INVESTOR DAY
Slide 153: A Global Energy Player
A Global Energy Player Protecting value in a Positioning to capture challenging environment medium-term growth Balanced and Leading IPP in diversified profile Fast growing markets Perform 2015 Global LNG player Operational efficiency Commitment to strong balance sheet Capturing full potential and at
Slide 154: 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
Slide 155: Investor Day
INVESTOR DAY December 6, 2012 INVESTOR DAY – December 2012 155