Engie S.a. · EURONEXT:ENGI
Engie — FY2023 Earnings Presentation
56 slides from Engie's earnings presentation, Feb 22, 2024
Slide 1: FY 2023 Financial Results
FY 2023 FINANCIAL RESULTS 22 February 2024
Slide 2: Agenda: Part 1 FY 2023 Performance
AGENDA PART 1 FY 2023 Performance 2 ENGIE FEBRUARY 2024
Slide 3: FY 2023 Financial Results - Catherine MacGregor, CEO
FY 2023 FINANCIAL RESULTS CATHERINE MACGREGOR CEO 3 ENGIE FEBRUARY 2024
Slide 4: FY 2023: Extending our track record of strong performance
FY 2023 FINANCIAL RESULTS FY 2023: EXTENDING OUR TRACK RECORD OF STRONG PERFORMANCE Another strong Further rapid roll-out Continued Fundamental financial of our strategy progress in our de-risking performance with expansion in Net Zero with final reaching renewables and pivotal trajectory agreement
Slide 5: Another year of strong earnings with proposed dividend of €1.43
FY 2023 FINANCIAL RESULTS ANOTHER YEAR OF STRONG EARNINGS WITH PROPOSED DIVIDEND OF €1.43 EBIT ex. Nuclear NRIgs €9.5bn €5.4bn Up 18% organically Up 3% organically CFF0 1 Dividend €13.1bn €1.43 Up €5.1bn per share 1 Cash Flow From Operations = Free Cash Flow before Maintenance Capex and nuclear prov
Slide 6: Continued progress in ESG
FY 2023 FINANCIAL RESULTS CONTINUED PROGRESS IN ESG Greenhouse gas emissions Renewables Gender diversity Net Zero 2045 GHG1 emissions Share of renewables % of women Transition plan assessment from energy production in total power generation in Group management Moody’s assessed ENGIE transition (Mt)
Slide 7: Continuous rapid roll-out of our strategic plan
FY 2023 FINANCIAL RESULTS CONTINUOUS RAPID ROLL-OUT OF OUR STRATEGIC PLAN RENEWABLES NETWORKS 1 • 41.4 GW of installed capacity • New tariffs for French networks • 3.9 GW 1 added capacity in 2023 • Brazil: partial sale of TAG (gas) stake; awarded a 30-year concession to build and operate • 6.3 GW1 u
Slide 8: Renewables: maintaining a fast pace in annual installed capacity
FY 2023 FINANCIAL RESULTS RENEWABLES: MAINTAINING A FAST PACE IN ANNUAL INSTALLED CAPACITY Significant additional High level of #1 worldwide1 capacity construction activity in green PPAs 3.9 GW 6.3 GW 2.7GW in 2023 commissioned in 2023 under construction of PPAs signed, o/w 1.9 GW in North America,
Slide 9: BESS: a pivotal year, boosting our flexible generation
FY 2023 FINANCIAL RESULTS BESS: A PIVOTAL YEAR, BOOSTING OUR FLEXIBLE GENERATION ENGIE BESS 1.3 GW 3.6 GW A successful year for At end-December 2023 In operation Secured1 BESS in 2023 1 USA Acquisition of Broad Reach Power 350 MW onstream with 3 880 MW under construction, opening 2024 Five Wells ENG
Slide 10: Nuclear: a fundamental de-risking of the group
FY 2023 FINANCIAL RESULTS NUCLEAR: A FUNDAMENTAL DE-RISKING OF THE GROUP Final agreement between ENGIE and Belgian State • 10-year extension of Doel 4 and Tihange 3 targeting a re-start as of November 2025 through Flex LTO • JV dedicated to the 2 units equally owned with the Belgian State with a Con
Slide 11: 2024 Financial Outlook
FY 2023 FINANCIAL RESULTS 2024 FINANCIAL OUTLOOK 1 2021 2022 2023 2024 NRIgs NRIgs NRIgs NRIgs NRIgs €2.9bn €5.2 €XX bnbn €5.4bn €4.2 to 4.8bn Dividend policy reaffirmed Credit Rating Payout: 65-75% based on NRIgs ‘Strong investment grade’ Floor of €0.65 Economic net debt/EBITDA ceiling at 4.0x 1. M
Slide 12: FY 2023 Financials - Pierre-François Riolacci, CFO
FY 2023 FINANCIALS PIERRE-FRANÇOIS RIOLACCI CFO 12 ENGIE FEBRUARY 2024
Slide 13: Financial performance highlights
FY 2023 FINANCIAL RESULTS FINANCIAL PERFORMANCE HIGHLIGHTS • EBIT (excl. Nuclear) up 18% FY 2023 RESULTS €bn, unaudited figures Actual ∆ Gross ∆ Organic1 • NRIgs at €5.4bn EBITDA (excl. Nuclear) 13.7 +13% +13% • Strong cash flow generation recovery, CFFO up EBIT (excl. Nuclear) 9.5 +18% +18% €5.1bn
Slide 14: EBIT (excl. Nuclear) up 18% organically
FY 2023 FINANCIAL RESULTS EBIT (EXCL. NUCLEAR) UP 18% ORGANICALLY Delivering our growth and performance ambitions 9,479 EBIT €+1,455m organic 2,741 (€m) incl. €+178 performance +1,004 9,479 (o/w o/w 933 3,551 OTHERS GEMS GEMS) -107 569 RETAIL Others +5 +312 Networks -138 +587 1,513 FLEX GEN Energy -
Slide 15: Renewables EBIT
FY 2023 RENEWABLES FINANCIAL RESULTS RENEWABLES EBIT Strong contribution from capex, higher volumes and prices ACHIEVED PRICES1 OUTRIGHT VOLUMES HYDRO TAX +19% HYDRO CNR FRANCE (€/MWh) HYDRO FRANCE (TWh) CNR FRANCE (€m - % tax rate2) organic growth +66% +1.8 TWh +€381m EBIT(€m) Commissioning -76 100
Slide 16: Networks EBIT
FY 2023 NETWORKS FINANCIAL RESULTS NETWORKS EBIT Lower distributed volumes and higher energy costs in France offset by storage and growing international activities TEMPERATURE EFFECT POWER TRANSMISSION BIOMETHANE PROD. -5% IN FRANCE (€m) NETWORK LENGTH (km) CAPACITY CONNECTED TO GRDF/GRTgaz organic
Slide 17: Energy Solutions EBIT
FY 2023 ENERGY SOLUTIONS FINANCIAL RESULTS ENERGY SOLUTIONS EBIT 10% organic growth excluding one-offs EBIT MARGIN1 EBIT MARGIN1 excl. €-138m (%) one-offs organic decrease (%) +63bps 4.6% EBIT(€m) +22 -107bps +32 Energy 4.6% 5.2% -4 +1 performance 3.5% 523 524 On-site & -188 Scope & Local energy man
Slide 18: Flex Gen EBIT
FY 2023 FLEX GEN FINANCIAL RESULTS FLEX GEN EBIT Good performance despite market normalization in Europe AVERAGE CAPTURED LOAD FACTOR INTERNAL UNPLANNED -12% SPARK SPREADS EUROPE EUROPE (%) UNAVAILABILITY (%) organic decrease (€/MWh) +40bps +30% 4.5% EBIT(€m) 37 32.3% 4.1% Others 28 1,768 -52 Volume
Slide 19: Retail EBIT
FY 2023 RETAIL FINANCIAL RESULTS RETAIL EBIT Better margins, profit on portfolio optimization and YoY positive timing effects # B2C B2C SUPPLY €+587m CONTRACTS (m) VOLUMES organic growth (TWh) 22.5 22.5 2.5 2.6 Services EBIT(€m) Prices 40 +687 9.1 Power 37 Power 9.3 127 Others 115 -97 +10 10.9 10.6
Slide 20: Nuclear EBIT
FY 2023 NUCLEAR FINANCIAL RESULTS NUCLEAR EBIT Increase in volume offset by plant shutdowns, and higher prices offset by higher taxes VOLUMES BE+FR CAPTURED -€421m @SHARE (TWh) PRICES1 (€/MWh) organic growth +15% 96 42.1 -24% EBIT(€m) 83 Volumes excl. plant 32.0 shutdowns Prices 970 0 -538 -338 +425
Slide 21: Others EBIT
FY 2023 OTHERS FINANCIAL RESULTS OTHERS EBIT Substantial contribution from GEMS €+1.0bn Key market drivers1 FY FY YoY organic growth (€/MWh - month ahead) 2022 2023 delta 3,551 GEMS Prices & Power Germany 286 105 -181 EBIT(€m) +71 Spreads Gas TTF 131 41 -90 Others 2,741 +933 France Clean Spark 138 -
Slide 22: GEMS
FY 2023 OTHERS FINANCIAL RESULTS GEMS BALANCED EBIT CONTRIBUTION & POSITIVE MOMENTUM Activity Geography Commodity • Unprecedented market conditions in (€bn) 2022 and 2023 with significant cross-year 2022 2022 2022 and intra-year effects, including provisions 1.0 61% building and release 1.5 64% 85%
Slide 23: Performance plan
FY 2023 FINANCIAL RESULTS PERFORMANCE PLAN 2021-2023 target exceeded FY 2023 YTD achievement Beating the 2021-23 performance plan €178m 6 • Operational excellence: procurement, improved industrial Period Achieved performance, contract renegotiations and structure optimization FY 2021 €85m • Support
Slide 24: Overview of P&L from EBITDA to net income
FY 2023 FINANCIAL RESULTS OVERVIEW OF P&L FROM EBITDA TO NET INCOME From EBITDA to NRIgs From NRIgs to NIgs Nuclear – Non-recurring P&L FY FY FY FY (€bn) 2023 2022 Delta (€bn) 2023 (€bn) 2023 EBITDA 15.0 13.7 +1.3 NRIgs (continuing activities) 5.4 Waste management liabilities (5.1) D&A and others (4
Slide 25: Cash flow from operations
FY 2023 FINANCIAL RESULTS CASH FLOW FROM OPERATIONS CFFO supported by reversal of unprecedently high working capital Change in WCR: +2.8 (excluding GEMS market reserve : +5.1) (€bn) +0.9 +1.3 -2.1 Supply -0.6 +0.3 GEMS Margin tariff Nuclear market shields Other Taxes & 13.1 +3.5 calls reserves chang
Slide 26: Strong credit ratios, rating maintained
FY 2023 FINANCIAL RESULTS STRONG CREDIT RATIOS, RATING MAINTAINED Net debt impacted by nuclear phase-out and growth investments Net Financial Debt Leverage ratios (€bn) +0.4 +4.1 29.5 CFFO Others 4.0x Capex 1 +3.4 24.1 Dividends 3.1x Nuclear 2.8x -13.1 phase-out 2 +10.6 Dec Dec 2.0x 1.8x 2022 2023 2
Slide 27: 2024 Outlook
FY 2023 FINANCIAL RESULTS 2024 OUTLOOK 1 2021 2022 2023 2024 EBITDA excl nuclear EBITDA excl nuclear EBITDA excl nuclear EBITDA excl nuclear Rating indication ‘Strong investment €9.2bn €12.2bn €13.7bn €12.2 to 13.2bn grade’ Economic Net Debt / EBITDA ≤ 4.0x over the long term EBIT excl nuclear EBIT
Slide 28: Medium-term outlook
AGENDA PART 2 Medium-term outlook 28 ENGIE FEBRUARY 2024
Slide 29: Unwavering commitment to our growth strategy
FY 2023 MEDIUM-TERM OUTLOOK UNWAVERING COMMITMENT TO OUR GROWTH STRATEGY Net Zero carbon by 2045 across 3 scopes following a well below 2°C trajectory, SBTI certified • Combining green molecules and electrons to ensure the resilience and affordability of the Renewables system ~50 GW by 2025 ~80 GW b
Slide 30: Renewables: visibility for faster growth with financial discipline
FY 2023 MEDIUM-TERM OUTLOOK RENEWABLES: VISIBILITY FOR FASTER GROWTH WITH NO COMPROMISE IN FINANCIAL DISCIPLINE A growing pipeline offering flexibility Returns1 to reach our 2030 targets Project IRR 2021-2023 Global Pipeline 10 Latin 16,0% (at 100%) 92 America 92 GW 80 Development 43 47 Solar 30 AME
Slide 31: Networks: regulatory resilience for gas France, expansion in power overseas
FY 2023 MEDIUM-TERM OUTLOOK NETWORKS: REGULATORY RESILIENCE FOR GAS FRANCE, EXPANSION IN POWER OVERSEAS Domestic gas networks: Power lines stability and visibility expanding internationally ‘000 km 6.7 • 2024-28 remuneration close to previous levels • 5,700 km in operation and 1,000 km under constru
Slide 32: How we maximise value of our flexible generation
FY 2023 MEDIUM-TERM OUTLOOK HOW WE MAXIMISE VALUE OF OUR FLEXIBLE GENERATION Move away from base-load generation creates short-term pricing BESS: half-way to our 2030 fluctuations that offer multiple opportunities for FlexGen target NL Epex Spot Hourly shape is distorted by the 10 GW Daily amplitude
Slide 33: GEMS: two core businesses delivering sustainable value
FY 2023 MEDIUM-TERM OUTLOOK GEMS: TWO CORE BUSINESSES DELIVERING SUSTAINABLE VALUE FOR ENGIE AND ITS CLIENTS • Leverage and extract value from the flexibility of ENGIE and clients’ power assets • Manage and monetize the flexibility of ENGIE’s gas assets Asset Management • Manage a large LNG and Biom
Slide 34: 2024-26 Financial Outlook
FY 2023 MEDIUM-TERM OUTLOOK 2024-26 FINANCIAL OUTLOOK 1 2024 2025 2026 NRIgs NRIgs NRIgs €4.2 to 4.8bn €3.9 to 4.5bn €3.7 to 4.3bn Dividend policy reaffirmed Credit Rating Payout: 65-75% based on NRIgs ‘Strong investment grade’ Floor of €0.65 Economic net debt/EBITDA ceiling at 4.0x 1. Main underlyi
Slide 35: Financial Outlook - Pierre-François Riolacci, CFO
FINANCIAL OUTLOOK PIERRE-FRANÇOIS RIOLACCI CFO 35 ENGIE FEBRUARY 2024
Slide 36: 2023-24 EBIT evolution (excluding Nuclear)
FY 2023 MEDIUM-TERM OUTLOOK 2023-24 EBIT EVOLUTION (excluding Nuclear) (€bn) -0.0 +0.0 FX Scope -1.9 Investment +0.2 -0.3 -0.0 +0.5 Performance Others Prices & volatility Volumes 9.5 8.0 FY 2023 FY 2024 36 ENGIE FEBRUARY 2024
Slide 37: 2023-26 EBIT evolution (excluding Nuclear)
FY 2023 MEDIUM-TERM OUTLOOK 2023-26 EBIT EVOLUTION (excluding Nuclear) EBIT evolution1 excluding Nuclear (€bn) Performance Others 9.5 9.5 -2.9 8.2 to 1.6 0.5 -0.1 8.2 7.9 -3.5 to 8.0 7.5 to to to to to 2.0 +0.1 9.2 to 9.2 0.7 8.9 8.5 Prices Investments & 5.2 5.2 volatility 10-12% CAGR 2021 2022 2023
Slide 38: Investments & value creation
FY 2023 MEDIUM-TERM OUTLOOK INVESTMENTS & VALUE CREATION Committed to deliver growth investments at a healthy and maintained spread Project IRRs at Final Investment Decision (2021-2023)1 18,0% 16,0% Energy Solutions Step-up in hurdle rate to reflect new 14,0% interest rate environment: Networks 12,0
Slide 39: GEMS: new normalized EBIT raised from €1.0bn to €1.5bn
FY 2023 MEDIUM-TERM OUTLOOK GEMS: “NEW” NORMALIZED EBIT RAISED FROM €1.0BN TO €1.5BN EBIT evolution Uncertainty related to Key long-term growth drivers energy markets environment • Geographical growth: Spain, US, UK, AMEA “New” Normalized • Increased market volatility EBIT €1.5bn • Flight to quality
Slide 40: Nuclear
FY 2023 MEDIUM-TERM OUTLOOK NUCLEAR Indication and key principles Payment: ~€12bn in 2024 & ~€4bn in 2025 Through: €8bn-€9bn asset funds & €7bn-€8bn cash EBIT evolution (€bn) 1.1 to 1.0 1.5 1.0 Capex for 10y lifetime extension: ~€1.6-2.0bn 0.2 0.6 0.5 to JV with Belgian government: creation end 2024
Slide 41: 2024–26 main EBIT drivers
FY 2023 MEDIUM-TERM OUTLOOK 2024–26 MAIN EBIT DRIVERS vs. vs. Activity Expectations for main EBIT evolution drivers 20211 20231 2021 2023 RENEWABLES Investments contribution, lower prices ++ + 2026 Regulated tariffs reflecting inflation, cost & revenue NETWORKS clawback from prev. period in France,
Slide 42: Strong cash generation to support growth and dividends
FY 2023 MEDIUM-TERM OUTLOOK STRONG CASH GENERATION TO SUPPORT GROWTH AND DIVIDENDS Credit ratio – financial headroom Sources and uses almost balanced over 2023-26 excluding nuclear phase-out (€bn) Economic net debt / EBITDA to increase Net financial but remaining below 4.0x debt variations Disposals
Slide 43: A simplified & de-risked platform poised for profitable growth
FY 2023 MEDIUM-TERM OUTLOOK A SIMPLIFIED & DE-RISKED PLATFORM POISED FOR PROFITABLE GROWTH €8.4bn to €9.6bn 3% NUCLEAR FLEX GEN +~50% 17% & RETAIL ENERGY €6.1bn 8% SOLUTIONS NUCLEAR 16% FLEX GEN 35% NETWORKS 23% & RETAIL ENERGY 8% SOLUTIONS NETWORKS 38% 27% RENEWABLES RENEWABLES 19% 18% GEMS GEMS 8%
Slide 44: 2024-26 Financial Outlook
FY 2023 MEDIUM-TERM OUTLOOK 2024-26 FINANCIAL OUTLOOK 1 2021 2022 2023 2024 2025 2026 EBIT excl nuclear EBIT excl nuclear EBIT excl nuclear EBIT excl nuclear EBIT excl nuclear EBIT excl nuclear indication indication indication €5.2bn €8.0bn €9.5bn €7.5 to 8.5bn €7.9 to 8.9bn €8.2 to 9.2bn NRIgs NRIg
Slide 45: 2026: Energy transition driving higher earnings power
FY 2023 MEDIUM-TERM OUTLOOK 2026: ENERGY TRANSITION DRIVING HIGHER EARNINGS POWER 2021 the old norm 2026 New ENGIE NRIgs: €2.9bn … • Last year of ‘normal’ energy markets … NRIgs €4.0bn • Last year of regional BU structure (mid guidance range) • Transformed earnings power for 2022-25 re-normalized en
Slide 46: Additional material
ADDITIONAL MATERIAL
Slide 47: Integrating nature in Group's strategy
FY 2023 ADDITIONAL MATERIAL INTEGRATING NATURE IN GROUP'S STRATEGY Biodiversity Fresh water & Ocean Biomass / Biomethane Engaged in the act4nature Signatory of the UN ocean principles 100% of sourced woody biomass international initiative Signatory of call to accelerate global traceable and certifie
Slide 48: FY 2023 EBIT change by activity
FY 2023 ADDITIONAL MATERIAL FY 2023 EBIT CHANGE BY ACTIVITY Y/Y change (€m) Gross FX / Scope Organic Key drivers for organic change Acquisitions in Europe Commissioning of new capacity RENEWABLES +377 and solar parks in Chile, +312 Higher prices in Europe (mainly benefitting hydro) Lower DBSO
Slide 49: EBIT breakdown
FY 2023 ADDITIONAL MATERIAL EBIT BREAKDOWN FY 2023 Rest of Latin Northern (€m) France Europe America America AMEA Others TOTAL RENEWABLES 574 282 925 216 34 (27) 2,005 NETWORKS 1,415 64 800 (5) (9) 2,265 ENERGY SOLUTIONS 343 190 (1) (142) 24 (27) 386 FLEX GEN 891 202 35 419 (34) 1,513 RETAIL 380 145
Slide 50: 2022-23 EBIT evolution (excluding Nuclear)
FY 2023 ADDITIONAL MATERIAL 2022-23 EBIT EVOLUTION (excluding Nuclear) (€bn) Performance -0.2 +0.3 +0.2 Others +0.7 Commissioning -0.0 +0.0 +0.5 Volumes FX Scope Prices 9.5 8.0 FY 2022 FY 2023 50 ENGIE FEBRUARY 2024
Slide 51: Outright power production in Europe
FY 2023 ADDITIONAL MATERIAL OUTRIGHT POWER PRODUCTION IN EUROPE Nuclear and Hydro Hedged positions and captured prices (% and €/MWh) 74 77 70 59 As at 31 December 2023 Belgium and France Captured prices are shown: • before specific Belgian nuclear and French CNR hydro tax contributions • before infr
Slide 52: 2024-26 Key assumptions
FY 2023 ADDITIONAL MATERIAL 2024-26 KEY ASSUMPTIONS Outright Power Nuclear FX & price Weather conditions Below EBIT Production1 assumptions indications (% and €/MWh) • Recurring net financial • Belgium nuclear • FX forward as of • Average temperature availability: December 29th 2023 in France costs:
Slide 53: Focus on 2024
FY 2023 ADDITIONAL MATERIAL FOCUS ON 2024 1 Expectations for main EBIT evolution drivers vs. Activity 20232 2023 2024 2023 11 Growth fueled by capacity commissioned, partly offset by RENEWABLES reduction of energy prices and positive one-offs in 2023 =+ EBIT Regulated tariffs reflecting inflation, c
Slide 54: 2024-26 Financial Outlook
FY 2023 ADDITIONAL MATERIAL 2024-26 FINANCIAL OUTLOOK 1 2021 2023 2024 2025 2026 EBITDA excl nuclear EBITDA excl nuclear EBITDA excl nuclear EBITDA excl nuclear EBITDA excl nuclear indication indication indication €9.2bn €13.7bn €12.2 to 13.2bn €12.9 to 13.9bn €13.5 to 14.5bn EBIT excl nuclear EBIT
Slide 55: 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 56: 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 FY 2023 RESULTS: https://www.engie.com/en/finance/results/2023 56 ENGIE FEBRUARY 2024