Engie S.a. · EURONEXT:ENGI
Engie — GDF Suez — Investor Day (December 2011)
147 slides from Engie's investor day presentation, Dec 9, 2011
Slide 1: Industrial Development & Large Projects Investor Day
INDUSTRIAL DEVELOPMENT & LARGE PROJECTS Investor December 9, 2011 Day INVESTOR DAY – December 2011 1
Slide 2: 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 3: Agenda
AGENDA INDUSTRIAL DEVELOPMENT Anne RAVIGNON-CHASSAGNETTE & LARGE PROJECTS Corporate Director in charge of Financial Communications Investor Day 3
Slide 4: Today's agenda
Today‟s agenda INTRODUCTION 8:30–9:00 a.m. G. Mestrallet POWER * 9:00–10:30 a.m. D. Beeuwsaert and H. Ducré 10:30–10:45 a.m. Break GAS * 10:45 a.m.–12:15 p.m. JM. Dauger and D.Holleaux, JC. Depail and JM. Leroy 12:15–1:30 p.m. Lunch A NEW MARKET: THE CITY OF TOMORROW * 1:30–2:30 p.m. J. Tolot and JL
Slide 5: Introduction
INTRODUCTION Estreito, Brazil INDUSTRIAL DEVELOPMENT Gérard MESTRALLET & LARGE PROJECTS Chairman and Chief Executive Officer Investor Day 5
Slide 6: Successful growth story since the merger
Successful growth story since the merger Sustained Capex program Generation capacity (in €bn) (GW at 100%) 15 11 12 11-12 9 +92% 115 11% ASIA PACIFIC MIDDLE EAST 2007 pro forma 2008 2009 2010 2011e 18% TURKEY AFRICA Maintenance Growth 10% LATIN AMERICA 60 x2.6 E&P production 12% NORTH AMERICA (Mboe)
Slide 7: Acceleration of industrial development
Acceleration of industrial development Dunamenti (Hungary) Astoria 2 (US) 405 MW 575 MW Cycofos (France) Baviro (The Netherlands) CTA/CTH (Chile) 489 MW 291,000 ton/yr 300 MW 275,000 MWh/yr Barka 2 (Oman) 678 MW ‒ Marafiq (Saudi Arabia) Nord Stream 2,740 MW 800,000 m3/day Estreito (Brazil) (Russia/
Slide 8: Strong leadership positions with a balanced business model
Strong leadership positions with a balanced business model POWER • #1 Independent Power Producer (IPP) Breakdown of Capital Employed As of 06/30/2011 in the world • #1 producer of non-nuclear energy in the world 2% 8% • #1 wind producer in France 13% • 114.5 GW of installed power-production capacity
Slide 9: Growth strategy: priority to value creative growth
Growth strategy: priority to value creative growth Organic growth is our philosophy to ensure the best remuneration of our assets Gross Capex by nature 100% Geographical profile: 90% - Accelerate Group‟s development 80% in fast growing countries 70% - Improve integration in Europe 60% Preserve a bal
Slide 10: Seizing growth opportunities at acceptable risk level
Seizing growth opportunities at acceptable risk level Integration Development Energy market Favorable political opportunities & legal environment • Growth & low reserve margins • Political stability • Availability of opportunities • Clear legal framework Sound • Open to foreign investors economic en
Slide 11: GDF SUEZ's positions tomorrow
GDF SUEZ's positions tomorrow POWER Breakdown of Capital Employed Estimated as of end 2017 • 150 GW by 2016 of which 90 GW outside Europe ~5% ~15% • Increase in renewable installed capacity of 50% by 2015 vs 2009 ~15% ~5% GAS • E&P production: ~65 Mboe in 2014–2015 ~20% • External LNG sales: ~x2 LNG
Slide 12: 16 major projects ongoing
16 major projects ongoing GUDRUN 2014 (E&P) > €500m 2013 COD WILHELMSHAVEN (coal plant) GDF SUEZ > €1bn Capex CYGNUS(1) 2015 (E&P) > €500m 2013 MAASVLAKTE 2013-18 > €1bn (coal plant) STUBLACH (gas storage) > €500m ERIDAN 2016 (gas transmission) > €250m 2012 2015 2013 UCH 2 GHECO 1 TOUAT (E&P) > €250
Slide 13: Group's key strengths for large projects
Group's key strengths for large projects Best-in-class engineering capacity Size effect Cutting-edge to create value technologies A blend of core competencies to achieve operational Group financial excellence Centralized strength approval process Effective Value-creative industrial risk partnerships
Slide 14: Best-in-class energy engineering capacity
Best-in-class energy engineering capacity Tractebel Engineering: a global player integrated to the Group and also working for external companies 3,750 people 60 projects More than 100 years operating in 20 countries under way in 60 countries of expertize in energy and infrastructure projects ENGINEE
Slide 15: Cutting-edge technologies
Cutting-edge technologies Fos Cavaou LNG terminal France • The Gjøa floating platform is fully • Best technologies from • World‟s largest combined powered by mainland electricity, inception and leverage inhouse power and desalination plant, reducing CO2 emissions by research on LNG value chain desig
Slide 16: Centralized approval process
Centralized approval process Strategy Finance Board FINAL APPROVAL of Directors > €500m Strategy and Investments OPINION Committee > €50m Group APPROVAL Commitment Committee “Second Look” Business Development Oversight PROJECT TEAM Environmental Legal Social Governance > €20bn of projects examined e
Slide 17: Effective industrial risk management
Effective industrial risk management Limited cost overrun Choosing the right suppliers EFFICIENT PROVEN PROJECT SKILLS MANAGEMENT Technology mastered Health & Safety INVESTOR DAY – December 2011 17
Slide 18: Value-creative partnerships
Value-creative partnerships Industrial partnerships Local partnerships Financial partnerships to reduce industrial risk to mitigate political / regulatory risk to boost development and limit capital intensity Pension Funds Global partnership STRICT GOVERNANCE RULES INVESTOR DAY – December 2011 18
Slide 19: Group financial strength
Group financial strength S&P Moody's Corporate LT ratings S&P Moody's Ratios FY10 FFO/Net Debt (%) RCF/Net Debt (%) EDF AA-/Stable Aa3/Stable RWE 26.4 21.0 GDF SUEZ A/Stable A1/Stable GDF SUEZ 25.3 17.6 E.ON A/Negative A3/Stable E.ON 25.3 17.3 Iberdrola A-/Stable A3/Stable EDF 18.0 19.3 Enel A-/Nega
Slide 20: Size effect to create value
Size effect to create value Diversification of projects in terms of market Development as a system player ENHANCE Best practices MITIGATE RETURNS RISKS Global procurement strategy Lobbying power Major player INVESTOR DAY – December 2011 20
Slide 21: Power
POWER Rodenhuize, Belgium Dirk BEEUWSAERT INDUSTRIAL Executive Vice President, in charge of the DEVELOPMENT & LARGE PROJECTS Energy Europe & International Business line Investor Day Henri DUCRÉ Executive Vice President, in charge of Energy France Business line 21
Slide 22: A leading generator with high quality assets
A leading generator with high quality assets Strong international reach across 34 countries 114.5 TOTAL 17.5 at 100% 55.7 2.0 14.3 EUROPE 0.8 9.6 ASIA 20.6 3.2 NORTH AMERICA 5.6 MIDDLE EAST TURKEY, AFRICA 3.5 10.8 LATIN AMERICA - 5.9 AUSTRALIA Installed Under construction Installed capacity in GW; f
Slide 23: A world leader in power generation projects
A world leader in power generation projects GDF SUEZ builds more new power generation capacities than any other European utility GW under construction 18 16 North America 14 Middle East Asia Africa 12 10 Latin America 8 6 Europe 4 2 - Figures at 100% Source: last public information available (at the
Slide 24: A strong competitive position
A strong competitive position Market's attractiveness GDF SUEZ' competitive skills • Substantial capacity needed in emerging • Gas and power integration markets: • Proven expertize across all key generation - To meet growing demand, replacement technologies capacity and electrification • Deep region
Slide 25: Presentation outline
Presentation outline 1 MIDDLE EAST BUSINESS MODEL Large hydro projects in Brazil Biomass Repowering Wind energy in France Hydro in France INVESTOR DAY – December 2011 25
Slide 26: Middle East
Middle East A success story for GDF SUEZ BAHRAIN Al Ezzel Al Hidd Al Dur Equity return: Ras Laffan B 13–25% Ras Laffan C QATAR Shuweihat 2 Shuweihat 1 Umm Al Nar BAHRAIN Al Taweelah Tihama QATAR Fujairah 2 Marafiq Sohar 1 Riyadh PP11 Al-Rusail UNITED ARAB Barka 2 SAUDI ARABIA EMIRATES Al Kamil Power
Slide 27: Attractive investment environment
Attractive investment environment Favorable regulatory regime and need for capacity • Significant need for additional generation and desalination capacity: 20 GW of visible requests for proposals • Stable regulatory framework encouraging long-term private sector involvement to ensure security of sup
Slide 28: Competitive advantages through experience and reputation
Competitive advantages through experience and reputation GDF SUEZ has been the most successful developer in the Gulf • Combination with IPR strengthened Bids won in the region 6,000 our position, in a market now dominated 5,000 UAE by 3 to 4 strong players 4,000 Saudi Arabia 3,000 Qatar • High GDF S
Slide 29: Various sources of value creation through investing, developing and operating
Various sources of value creation through investing, developing and operating Middle East business model EQUITY DEVELOPER PARTNERS EQUITY OWNER Development Fees(1) GOVERNMENT Dividends(2) CONTROLLED BANKS PROJECT ELECTRICITY ~75% of COMPANY WATER BUYER project cost(3) Operator Margin(2) FUEL EPC SUP
Slide 30: Marafiq, Saudi Arabia
Marafiq, Saudi Arabia World's largest combined power and desalination plant T I M E L I N E Studies Construction Operation Leading developer, operator and shareholder Design optimization resulted in winning bid • Competitors offered 4 identical power/water units • Our offer was 3 power/water units a
Slide 31: Al Dur, Bahrain
Al Dur, Bahrain One of the largest private industrial projects in Bahrain T I M E L I N E Studies Construction Operation Reverse Osmosis: use of highly flexible and efficient water desalination technology Financial close was achieved in challenging conditions Non-recourse debt from a syndicate of in
Slide 32: Presentation outline
Presentation outline Middle East business model 2 LARGE HYDRO PROJECTS IN BRAZIL Biomass Repowering Wind energy in France Hydro in France INVESTOR DAY – December 2011 32
Slide 33: Large hydro projects in Brazil
Large hydro projects in Brazil Estreito Jirau São Salvador BRAZIL Cana Brava Ponte de Pedra Salto Osorio Salto Santiago Hydro power capacity(1) Itá 6.4 GW in operation Machadinho 4.4 GW under construction Passo Fundo Installed Under construction (1) At 100% as of June 30, 2011 INVESTOR DAY – Decembe
Slide 34: Long-term presence providing competitive advantage
Long-term presence providing competitive advantage Market's attractiveness GDF SUEZ' competitive skills • Supportive regulatory framework • Long-term presence in the country - 1998: acquisition of Gerasul (installed capacity - Brazilian Government's "Growth Acceleration Program" of 3.7 GW), renamed
Slide 35: Estreito
Estreito Sale of early generation and long-term visibility T I M E L I N E Studies Construction Operation Construction started in June 2007 Generation capacity: 1,087 MW Strong commitment to sustainable development Long-term contract for 100% of Group stake, at R$156/MWh indexed to inflation COD of
Slide 36: Jirau
Jirau Among the biggest hydro plants in the world T I M E L I N E Studies Construction Operation 2nd biggest hydro plant in Brazil with 3,750 MW Project optimization through engineering innovation • New project location, 9.5 km downstream, in wider section of river resulted in significant reduction
Slide 37: Presentation outline
Presentation outline Middle East business model Large hydro projects in Brazil 3 BIOMASS Repowering Wind energy in France Hydro in France INVESTOR DAY – December 2011 37
Slide 38: #1 worldwide in biomass based generation
#1 worldwide in biomass based generation Ryegate Polaniec Bethlehem Zolling Gelderland Ruien Lincoln Rodenhuize McBain Awirs Tanworth Fitchburg Northumberland Glow Andrade Project IRR: 10–20% Lages Installed 740 MW in operation Under construction 370 MW under construction Figures at 100%, as of 30 J
Slide 39: Leveraging global sourcing and strong experience
Leveraging global sourcing and strong experience Market's attractiveness GDF SUEZ' competitive skills • Experience across - Conversion of existing installations to biomass • Steep increase in world biomass power - Construction of new biomass-fired power plants generation expected in the coming years
Slide 40: "Max Green" Rodenhuize, Belgium
"Max Green" Rodenhuize, Belgium Lifetime extension and benefit from green certificates T I M E L I N E Studies Construction Operation Conversion of Rodenhuize 4 from coal-fired to a 180 MW full biomass-fired power plant • Fuel supply: wood pellets (700,000 to 800,000 tons/year) • Non-emitted CO2: 1,
Slide 41: Polaniec, Poland
Polaniec, Poland World's largest biomass-fired power plant T I M E L I N E Studies Construction Operation Conversion from coal-fired to a 190 MW full biomass- fired power plant • Fuel: wood and agri-fuels from local sources (Poland and Ukraine) • Non-emitted CO2: 1,200,000 ton/year • Green certifica
Slide 42: Presentation outline
Presentation outline Middle East business model Large hydro projects in Brazil Biomass 4 REPOWERING Wind energy in France Hydro in France INVESTOR DAY – December 2011 42
Slide 43: Large repowering experience
Large repowering experience Capex savings up to 40% compared to greenfield projects Eems Bergum Vilvoorde Amercoeur Dunamenti Torrevaldaliga Vado Ligure Napoli Levante Bahia Las Minas Senoko Chilca uno Installed 4,884 MW in operation(1) Under construction 1,126 MW under construction(2) Figures at 10
Slide 44: Creating value by using existing facilities with low investment cost
Creating value by using existing facilities to implement projects with a low investment cost • Capex savings up to 40% compared to greenfield projects • Higher output and efficiency, reducing carbon footprint - More than 50% increase of output and efficiency achievable, while reducing CO2 emissions
Slide 45: Amercoeur, Belgium
Amercoeur, Belgium Tripling capacity and higher efficiency T I M E L I N E Studies Construction Operation Capacity increased from 135 MW to 420 MW Fuel switch: from coal to natural gas Efficiency increased from 38% to 58% 1967 Addition of a gas turbine, a heat recovery steam generator and replacemen
Slide 46: Chilca Uno, Peru
Chilca Uno, Peru Efficiency increased from 38% to 54% T I M E L I N E Studies Construction Operation Capacity increased from 541 to 807 MW Fuel: natural gas (unchanged by the project) Closing the 3 existing open cycles by addition of heat recovery boilers and a steam turbine Fully contracted Rationa
Slide 47: Presentation outline
Presentation outline Middle East business model Large hydro projects in Brazil Biomass Repowering 5 WIND ENERGY IN FRANCE Hydro in France INVESTOR DAY – December 2011 47
Slide 48: Developing global wind power positions
Developing global wind power positions 3.7 TOTAL 0.6 at 100% 3.2 0.3 EUROPE 0.3 0.2 NORTH AMERICA LATIN AMERICA 0.1 0.05 0.1 n.s. AUSTRALIA Project IRR: 9 to 16% Installed Under construction Installed capacity in GW; figures as of 30 June 2011 INVESTOR DAY – December 2011 48
Slide 49: Onshore wind
Onshore wind Ambition to double capacity to 2 GW by 2016 in France Market's attractiveness GDF SUEZ' competitive skills • Strong regulatory support to develop • Market leader in France renewables ("3x20" target) • Optimization of the wind portfolio: • Ambitious objective of 19,000 MW first operating
Slide 50: Onshore wind: Les Hauts-Pays
Onshore wind Les Hauts-Pays, one of the largest wind farms in France T I M E L I N E Studies Construction Operation • Wind generators: 39 • Generation capacity: 80 MW • Number of functioning hours: 2,500 hours(1) • Production: 200 GWh per year(1) • Availability rate guaranteed by constructor • Guara
Slide 51: Offshore wind
Offshore wind GDF SUEZ competing for the next French tender Market's attractiveness GDF SUEZ' competitive skills • Ambitious objective of 6,000 MW • Extensive studies on Les Deux Côtes by 2020 in France offshore wind farm project in Dieppe- Le Tréport (public debate in 2010) • 3,000 MW between 2015–
Slide 52: Offshore wind: first call for tenders spread over 5 zones
Offshore wind First call for tenders spread over 5 zones 500 MW 500 MW 750 MW Courseulles- sur-Mer Fécamp Le Tréport 500 MW St-Brieuc 750 MW St-Nazaire INVESTOR DAY – December 2011 52
Slide 53: Offshore wind: a structured approach to bid
Offshore wind A structured approach to bid 2012 2013 2014 2015–20 Risk assessment period Submission of Selection COD proposals by of candidates 3 criteria January 11, 2012 in H1 2012 Environment Price of 20% electricity 40% 40% Industrial Investors Agreement Specialized in design & construction Cons
Slide 54: Presentation outline
Presentation outline Middle East business model Large hydro projects in Brazil Biomass Repowering Wind energy in France 6 HYDRO IN FRANCE INVESTOR DAY – December 2011 54
Slide 55: Hydro: 2nd player in France
Hydro: 2nd player in France GDF SUEZ has: • 15% of the 25 GW 19 power stations hydro-electric 2.9 GW French portfolio • and 25% of the 54 power stations 0.8 GW French production Hydro installed INVESTOR DAY – December 2011 55
Slide 56: Objective to increase hydro capacity by at least 1,500 MW
Objective to increase hydro capacity by at least 1,500 MW T I M E L I N E Studies Construction Operation 5.3 GW in competition by 2015 GDF SUEZ' competitive skills • Call for tender announced by French • Remote control of facilities Government, not launched yet • Establishment of a model, modulation
Slide 57: Competitive perimeter and calendar
Competitive perimeter and calendar Dordogne Dordogne Lac Beaufortin Cantal, Cantal, Mort Savoie, Corrèze Corrèze Isère Haute-Savoie 1,218 MW 333 MW 10 MW 128 MW End of 2015 End of 2015 End of 2013 End of 2015 Competitor Truyere Bissorte Savoie Aveyron, Cantal 882 MW 2,014 MW Drac End of 2014 Mid 201
Slide 58: Conclusion
Conclusion • Our distinctive skills: - presence across all key generation technologies - wide international reach - proven track record in construction and operation - ability to attract best partners • Sizable, attractive projects: - 17.5 GW under construction - 84% in fast growing markets and 82%
Slide 59: Industrial Development & Large Projects
INDUSTRIAL DEVELOPMENT & LARGE PROJECTS Investor December 9, 2011 Day INVESTOR DAY – December 2011 59
Slide 60: Gas
GAS E&P - LNG Infrastructures Absheron, Azerbaijan INDUSTRIAL DEVELOPMENT Jean-Marie DAUGER Jean-Claude DEPAIL & LARGE PROJECTS Executive Vice President, Executive Vice President, in charge of the Global Gas & LNG Business line in charge of Infrastructures Business line Investor Day Didier HOLLEAUX
Slide 61: Trends in natural gas markets
Trends in natural gas markets Increasing challenges In which GDF SUEZ for the natural gas markets is well positioned • Strong growth in LNG demand • Group‟s presence along the LNG value chain: +3.9% CAGR from 2010–2030(1) from liquefaction to commercialization • Booming natural gas demand in Asia •
Slide 62: Gas: presentation outline
Gas: presentation outline 1 EXPLORATION & PRODUCTION - LNG 2 INFRASTRUCTURES INVESTOR DAY – December 2011 62
Slide 63: Strategic positions in the world
Strategic positions in the world Gjøa Römerberg Production & exploration assets Development & exploration assets G16a Assets area E&P assets or projects Amstel Participation in terminal with Absheron regasification capacities Cygnus Participation in terminal without regasification capacities Partici
Slide 64: Wide range of skills and expertize
Wide range of skills and expertize Use of innovative technology Over 40 years of field development in geoscience applications, drilling, and operations management production and operations experience in the Netherlands and Germany • 3D seismic interpretation with expertize • Largest owner of infrast
Slide 65: A balanced portfolio
A balanced portfolio Geography Maturity Risk/return profile • Mature countries close • Assets with different • Short time-to-market to infrastructures with time-to-market to smooth with high return assets established suppliers the rate of growth to complete the portfolio, e.g. UK, Netherlands, • Pro
Slide 66: Northern Europe: Dutch mature basin – Amstel
Northern Europe: Dutch mature basin Amstel: Leverage of existing infrastructures and exploration prospects OIL T I M E L I N E : Studies Construction Operation TAQA GDF SUEZ E&P Offshore block Q13 Energy 10% Nederland B.V. • Discovered in (operator) 50% 1962 by NAM but never developed EBN 40% • Main
Slide 67: Northern Europe: Dutch mature basin – G16a
Northern Europe: Dutch mature basin G16a: Leverage of existing infrastructures and exploration prospects GAS T I M E L I N E : Studies Construction Operation GDF SUEZ 60% (operator) • 2003 G16a license Total Capex ~€125m acquired from NAM • 2005 G16a-A field Project IRR above 20% EBN 40% developed w
Slide 68: Northern Europe: German mature basin – Römerberg
Northern Europe: German mature basin Römerberg: Early production financing development phase OIL T I M E L I N E : Studies Construction Operation GDF SUEZ (operator) • Drilled wells: 50% ROEB0 2003 ROEB1 2007 ROEB2 2009 Palatina 50% ROEB3 2010/11 ROEBH1 2011 ROEBH2 2011 • Preparation of field develo
Slide 69: Northern Europe: United Kingdom – Cygnus
Northern Europe: United Kingdom Cygnus: largest Southern North Sea undeveloped gas field GAS T I M E L I N E : Studies Construction Operation Bayerngas GDF SUEZ UK Ltd 12.5 38.8 E&P UK Ltd (operator) • Offshore, 2 reservoirs • 1988/1989: in % • Large license, 25 km x 12 km discovery by Marathon. Cen
Slide 70: Northern Europe: Gjøa, Norway
Northern Europe: Gjøa, Norway One of the largest E&P players behind the Majors OIL & GAS T I M E L I N E : Studies Construction Operation RWE-DEA GDF SUEZ 8% E&P Norge Shell • 1989 Discovered 12% 30% (operator) • Oil & gas fields offshore by Norsk Hydro Statoil 20% • Gross reserves: • 2003 GDF SUEZ
Slide 71: North Africa: Touat
North Africa: a major project for GDF SUEZ and Algeria Touat: GDF SUEZ‟ largest E&P project under construction GAS T I M E L I N E : Studies Construction Operation Sonatrach 35% 65% GDF SUEZ • 10 gas fields • 2001 agreement • Near Adrar, South West of Algeria between Gaz de France and Sonatrach to e
Slide 72: Bonaparte: the first GDF SUEZ operated E&P-LNG project
Bonaparte: the first GDF SUEZ operated E&P-LNG project GAS T I M E L I N E : Studies Construction Operation GDF SUEZ 60% Bonaparte • 2009: acquisition (operator) of 60% of the Petrel, • 3 stranded gas offshore fields Tern and Frigate gas Santos 40% • 250 km from Darwin fields from Santos, a major Au
Slide 73: Diversified exploration portfolio in over 16 countries
Diversified exploration portfolio in over 16 countries 40 31 2 56 (17) (25) (12) (2) GREENLAND UK NL NORWAY 202 2 (25) 10 (1) (8) FRANCE US GERMANY 2 8 (2) 5 (6) (1) M. East & AFRICA Central Asia FAR EAST Ivory Coast, Qatar, Australia, 362 Mauritania, 4 Azerbaijan Indonesia (101) Algeria, Libya (2)
Slide 74: Exploration: a strong track record with a high resource replacement rate
Exploration: a strong track record with a high resource replacement rate 2006-2010 exploration track record: resource replacement average of ~117%(1) Volume (Mboe) 181% Replacement rate (%) 150 135% 150% 100 103% 117% average(1) 97% 100% 66% 50 2P & 2C discovered 96 volumes and revision 50% 62 53 53
Slide 75: Caspian Sea, Absheron in Azerbaijan
Caspian Sea, Absheron in Azerbaijan Successful example of high risk, high reward exploration T I M E L I N E : Studies Construction Operation SOCAR GDF SUEZ 20% • Initially operated 40% by Chevron leading a consortium with SOCAR (50%) and 40% TOTAL (operator) TOTAL (20%): drilling in difficult condi
Slide 76: Indonesia: Muara Bakau (Jangkrik)
Indonesia: Muara Bakau (Jangkrik & Jangkrik North East) World class reservoir with extremely good productivity GAS T I M E L I N E : Studies Construction Operation GDF SUEZ 45% • Offshore gas fields • December 2002: • Acreage: 1,082 km² ENI PSC operated by (operator) Lasmo, then by ENI 55% • East Ka
Slide 77: Gas: presentation outline
Gas: presentation outline 1 EXPLORATION & PRODUCTION - LNG 2 INFRASTRUCTURES INVESTOR DAY – December 2011 77
Slide 78: GDF SUEZ, a leader in natural gas infrastructure
GDF SUEZ, a leader in natural gas infrastructure #1 transmission network • 32,200 km in France in Europe • 1,373 km in Germany and Austria #1 distribution network • 192,000 km in France connecting 9,423 municipalities in Europe • Providing gas to 11.1 million clients Largest storage • 22 facilities
Slide 79: Key positions at the heart of Europe
Key positions at the heart of Europe Nord Stream Harsefeld Lesum Reitbrook Stublach Peckensen Uelsen Dunkerque Taisnières Four types of assets, St-Clair Gournay mainly regulated Saint-Illiers Germigny Obergailbach Breitbrunn Fronhofen Beynes Trois- Cerville Fontaines Schmidhausen Soings Chémery Mont
Slide 80: Well positioned to meet growing gas infrastructure needs
Well positioned to meet growing gas infrastructure needs Europe Outside Europe Reinforce existing Increasing demand infrastructures Develop dedicated for electricity to supply gas-fired power plants infrastructure to feed gas-fired generation generation High growth in & Build new routes to bring gas
Slide 81: Stability, visibility and high value creation
Stability, visibility and high value creation Regulated activities(1) Storage Value creation model based on: • Balanced market risk exposure, with: • RAB rate of return - Higher rate of return than regulation • RAB development (transmission - 60% of commercial capacities sold in the medium-term and
Slide 82: Key metrics for gas infrastructure projects
Key metrics for gas infrastructure projects Project duration: 1 year 2 years 2–4 years 4–6 years 5–7 years Distribution Transmission Regional transmission Transmission pipeline, Storage and LNG pipeline delivery station pipeline compressor station facilities • Project duration: from several months (
Slide 83: ERIDAN project in France
ERIDAN project in France Important milestone toward a unique market zone T I M E L I N E Studies Construction Operation A new transmission pipeline, reinforcing the existing Rhône pipeline in southern France Total Capex €490m(2) Length: 220 km, diameter: 1.2 meter Expected end of commissioning 2016
Slide 84: Gas storage development in Germany
Gas storage development in Germany An operation making GDF SUEZ #1 in Europe T I M E L I N E GDF SUEZ POSITIONS IN STORAGE Studies Construction Operation BEFORE ACQUISITION AFTER ACQUISITION Harsefeld • Enterprise value: €930m Reitbrook (50%) Reitbrook Lesum • EBITDA on a full year basis: ~€110m Pec
Slide 85: Value creation is around 20% of Enterprise Value paid
Value creation is around 20% of Enterprise Value paid Increase in Working Gas Capacity and increase Short-term of withdrawal rate of existing assets Sales of unbundled capacities(1) Implementation of further O&M synergies Mid-term in Storengy Deutschland post-merger Development of new cavities
Slide 86: Gas storage development in the UK: Stublach
Gas storage development in the UK Stublach: a key asset for higher flexibility T I M E L I N E Studies Construction Operation • Stublach project: Total Capex €543m fast cycling salt caverns to supply Project IRR 8% flexibility matching GDF SUEZ shareholding 100% UK needs Stublach • 400 mcm capacity
Slide 87: Gas storage development in the UK
Gas storage development in the UK Stublach In the UK, the need for swing(1) and flexibility will increase sharply: • Domestic production is declining, hence seasonal swing • Domestic production being replaced by LNG and interconnector supplies, with less modulation • Gas demand: volatility is expect
Slide 88: A strong presence across the gas value chain to capture full value
A strong presence across the gas value chain to capture full value • Strong value creation revealed by recent strategic partnerships in E&P and GRTgaz • Distinctive skills: expertize, HSE management, reactivity and adaptation, good track record in project delivery • A growth story with a large numbe
Slide 89: Industrial Development & Large Projects
INDUSTRIAL DEVELOPMENT & LARGE PROJECTS Investor December 9, 2011 Day INVESTOR DAY – December 2011 89
Slide 90: A New Market: The City of Tomorrow
A NEW MARKET: THE CITY OF TOMORROW Fribourg-en-Brisgau, Eco District INDUSTRIAL DEVELOPMENT Jérôme TOLOT & LARGE PROJECTS Executive Vice President of GDF SUEZ, CEO of GDF SUEZ ENERGY SERVICES Jean-Louis CHAUSSADE Investor Day Executive Vice President of GDF SUEZ, CEO of SUEZ ENVIRONNEMENT 90
Slide 91: The city of tomorrow
The city of tomorrow A promising market for GDF SUEZ 2007 2025 2050 6bn 8bn 9bn 50% 58% 67% POPULATION % IN URBAN AREAS World population Less than 21 21 to 40 41 to 60 61 to 80 81 and over o/w urban population Doubling of urban population by 2050 with scarcity of resources and more stringent regulat
Slide 92: Sustainable development is becoming a key challenge for local authorities
Sustainable development is becoming a key challenge for local authorities Social concern(3) 33% of the urban population in developing regions lives in slums 24% of the world's urban Economic population doesn‟t have access to sanitation services attractiveness(1) 80% of global GDP Environment is gene
Slide 93: GDF SUEZ has a long history of partnering with local authorities
GDF SUEZ has a long history of partnering with local authorities and promoting sustainable development ECONOMIC SERVICES ENVIRONMENTAL SERVICES SOCIAL RESPONSIBILITY Gas distributed to 11 million people in France Transport 180 District Heating & Cooling infrastructures networks operated “Rassembleur
Slide 94: Urban growth will provide new markets for GDF SUEZ
Urban growth will provide new markets for GDF SUEZ Optimizing energy consumption Recovering Distributing waste efficient energy City of tomorrow: a vast range Monitoring of opportunities Connecting water resources the city Producing Developing green energy smart projects INVESTOR DAY – December 2011
Slide 95: Optimizing energy consumption
Optimizing energy consumption Building Energy Efficiency Market's attractiveness GDF SUEZ' competitive skills • Regulatory Framework: 3x20 European • Unique presence along the whole target value chain (engineering, installation and operation) • European target for 2020: ~4,000 TWh of energy savings
Slide 96: Optimizing energy consumption: some achievements
Optimizing energy consumption Some achievements 1st PPP "Energy performance contract" Heating & Cooling system in France Surface: 80,000 m² Surface: 300,000 m² Energy Savings: 35% Energy Savings: 40% Contract duration: 20 years Contract duration: 15 years Building energy efficiency total revenues(1)
Slide 97: Distributing efficient energy
Distributing efficient energy District Heating & Cooling Market's attractiveness GDF SUEZ' competitive skills • Expected growth in all European • GDF SUEZ is present in 180 European countries District Heating & Cooling networks representing 12 TWh (Paris, Barcelona, • Target to double the number of
Slide 98: Distributing efficient energy: some achievements
Distributing efficient energy Some achievements Cooling 65 MW(1) Cooling 325 MWth Heating 200 MW(1) Heating 3,700 MWth Energy Savings: 10% Energy Savings: Contract duration: 40 years ‒ Heating 10% ‒ Cooling 50% Contract duration: 20 years District Heating & Cooling total revenues(2): ~€1.3bn (1) Fin
Slide 99: Connecting the city
Connecting the city Data Centers Market's attractiveness GDF SUEZ' competitive skills • 2010 investment of €8bn in Western • GDF SUEZ operates 300,000 m² of Data Europe Centers in Europe • Forthcoming renewal of more than 60% • Ability to offer a global integrated solution: of the existing Data Cent
Slide 100: Connecting the city: some achievements
Connecting the city Some achievements Electricity savings: 20% Electricity savings: 25% Surface: 6,000 m² Surface: 1,000 m² Contract duration: 6 years Contract duration: 7 years Data Centers total revenues(1): ~€600m (1) 2011 estimated revenues for GDF SUEZ Energy Services INVESTOR DAY – December 20
Slide 101: Developing smart projects
Developing smart projects 40 "smart" projects have recently been launched by GDF SUEZ Implementing its own technology to: Monitor and manage energy and facilities Smart metering Diminish operational costs Enable innovative tariffs and new services Strongly implied in 2 “smart” R&D fields: Smart g
Slide 102: Producing green energy from water & waste
Producing green energy from water & waste Market's attractiveness GDF SUEZ' competitive skills • 48 urban energy from waste plants: Growth in green energy production from waste 1,800 MW capacity, 3.4 TWh energy produced in TWh • Landfill biogas, anaerobic digestion • Innovative wastewater biological
Slide 103: Producing green energy from water & waste: some achievements
Producing green energy from water & waste Some achievements - A large energy from waste plant - Amman‟s main wastewater • Waste collection of 1.2 million people,14 towns treatment plant • 730,000 tons household waste • Plant capacity: 267,000 m3/day - Sustainable reduction treated per year - Turbine
Slide 104: Preserving and recycling natural resources: waste
Preserving and recycling natural resources New waste services for the city of tomorrow Market's attractiveness GDF SUEZ' competitive skills • SUEZ ENVIRONNEMENT manages 350 sorting & recycling sites (6.7mt) • Multi-material offers - Metal, paper, cardboard, wood, plastic… - End of life product, work
Slide 105: Preserving and recycling natural resources: some achievements
Preserving and recycling natural resources Some achievements France Plastiques Recyclage: Renault contracts a worldwide benchmark • Long-term partnership to develop • 2010 target: process 40,000 tons end of life vehicles recycling of used bottles to generate 30,000 tons • 2015 target: 95% of recover
Slide 106: Preserving and recycling natural resources: water
Preserving and recycling natural resources New water services for the city of tomorrow Market's attractiveness GDF SUEZ' competitive skills • Water scarcity has become a global challenge • 1,200 drinking water production & 1,800 wastewater treatment facilities • Leak detection and reuse to preserve
Slide 107: Preserving and recycling natural resources: some achievements
Preserving and recycling natural resources Some achievements Largest desalination plant in Europe: Largest European automated meter - capacity of 200,000 m3/day reading contract - supply up to 2 million inhabitants - 400,000 inhabitants on the island of Malta First reverse osmosis seawater - 250,000
Slide 108: Being a strategic partner for cities
Being a strategic partner for cities Offering innovative solutions through partnerships Private Finance Initiative in the UK Strong track-record of PPP Chinese offers for energy services 14 schools Public lighting Response to large waste Tramway Water joint ventures with infrastructure needs New Wor
Slide 109: A unique positioning for value creation in services
A unique positioning for value creation in services Market trends – Urban population to double by 2050 – Growing demand for recovery and energy efficiency solutions – Increasing demand for information from consumers GDF SUEZ' positioning – Presence along the entire value chain in energy and environm
Slide 110: Sustainable Development
SUSTAINABLE DEVELOPMENT The Germinon-Vélye wind farm, France INDUSTRIAL DEVELOPMENT Bruno BENSASSON & LARGE PROJECTS Member of the Executive Committee in charge Investor Day of Strategy and Sustainable Development Division 110
Slide 111: Sustainable Development Policy Orientations
Sustainable Development Policy Orientations Specific added value in GDF SUEZ' business model Sustainable Business Identification and transformation Innovate to build on and anticipate of environmental and social issues changing conditions in the energy, into business opportunities water, and waste s
Slide 112: Full integration of Sustainable Development into Group's policy
Full integration of Sustainable Development into Group‟s policy Assessment of non-financial risks for project decision SD Investment Criteria: Embedded in the Commitment Committee's (CC) decision 10 Criteria: Ethics, CO2 eq emissions, CO2 price impact on IRR, Energy Efficiency, Environmental ecosyst
Slide 113: Sustainable Development Objectives
Sustainable Development Objectives RENEWABLE ENERGY BIODIVERSITY RECRUITMENT SAFETY 50% increase in renewable Action plan for each 100,000 new hires Frequency rate < 6(1) installed capacity sensitive site in the EU DIVERSITY PROFESSIONAL TRAINING EMPLOYEE SHAREHOLDERS Women: 35% of high- 2/3 Group e
Slide 114: Sustainable Business
Sustainable Business Renewable energy and energy efficiency Hydro projects Wind projects Brazil: Jirau (3,750 MW), Estreito (1,087 MW) France: Onshore: targeting 2,000 MW by 2016, France: objective to increase the installed (vs 998 MW installed capacity in June 2011) capacity by at least 1,500 MW by
Slide 115: Sustainable Business: Olympic Park Energy Center, London 2012
Sustainable Business Olympic Park Energy Center, London 2012 Issue: Climate change Business opportunities: Energy efficiency and renewables Olympic Park Energy Center, London 2012 • Cofely: 40 year contract • Requirements for the final decision (build, finance and operate) of Olympic Games Committee
Slide 116: Local Involvement: securing the acceptability
Local Involvement: securing the acceptability Hydropower plant project, Jirau, Brazil Comprehensive action plans to ensure the acceptability of the project • Integrated into the Growth Acceleration • Resettlement program of 525 families, Program in Brazil approved by IBAMA • Run of the river hydro p
Slide 117: Health & Safety management: very high level of requirement
Health & Safety management: very high level of requirement Group objective: achieve a Frequency Rate of less than 6 in 2015(1) Example of E&P: major industrial incident types that could occur: - Fire and explosion on a large manned platform - Leak in a pipeline including potential fire or explosion
Slide 118: Climate change
Climate change Commitment to reduce greenhouse gas emissions Objective: increase the installed capacity in renewable energy by 50% between 2009 and 2015 Well on track as of end of June: 15.6 GW installed, 5.6 GW under construction Polaniec project Rodenhuize project • The “Green Unit”: • Repowering
Slide 119: Preservation of biodiversity
Preservation of biodiversity Commitment to ensure the appropriate integration of installations into their environment Objective: Implement a biodiversity action plan at each sensitive site in the European Union by 2015 Eridan project: Natural gas transport in France • Public debate (2011) about the
Slide 120: Preservation of resources
Preservation of resources Re-energy project, Sita-Roosendaal, The Netherlands Industrial responses to the scarcity of natural resources and environmental issues Re-energy project, Sita-Roosendaal, Baviro EfW plant Among the most effective ones in Europe Environmental performance Waste: 291,000 tons/
Slide 121: Full integration of sustainable development into GDF SUEZ strategy
Full integration of sustainable development into GDF SUEZ strategy GDF SUEZ model - Sustainable business development - Benchmark utility providing industrial solutions for environmental and energy challenges, with a high level of H&S management and commitment to local acceptability Value creation -
Slide 122: Industrial Development & Large Projects
INDUSTRIAL DEVELOPMENT & LARGE PROJECTS Investor December 9, 2011 Day INVESTOR DAY – December 2011 122
Slide 123: Optimizing Value Creation
OPTIMIZING VALUE CREATION Marafiq, Saudi Arabia INDUSTRIAL DEVELOPMENT Isabelle KOCHER & LARGE PROJECTS Executive Vice President, in charge of Finance Investor Day 123
Slide 124: Strong cash generation and ability to invest
Strong cash generation and ability to invest Indicative gross Capex profile EBITDA H1 2011 (in €bn) (in €bn) 12 11 11–12 EDF Mid-term Enel(1) RWE E.ON Iberdrola 2009 2010 2011e Gas Natural Growth Financial Development Maintenance 0 2 4 6 8 10 (1) Reported EBITDA excluding non-recurring adjustment IN
Slide 125: Capex designed to generate profitable growth and shareholder remuneration
Capex designed to generate a profitable growth, an attractive shareholder remuneration with a solid financial structure Solid financial structure Attractive shareholder Net debt/EBITDA ≤ 2.5x remuneration over 2011–2013 “A-category” rating PROFITABLE GROWTH Sizeable Capex envelope INVESTOR DAY – Dec
Slide 126: Ability to be highly selective
Ability to be highly selective Experienced teams to select the best projects Local business Engineering teams development teams Price & market Finance & legal modeling analysts specialists INVESTOR DAY – December 2011 126
Slide 127: Strict investment criteria
Strict investment criteria A high number of investment options 1 Strategic criteria Balanced investment mix by activity and geography Increasing exposure to fast growing markets Focus 3 Financial criteria on value Risk criteria 2 Clear risk/return profile creation Diversified project portfolio to li
Slide 128: Strategic criteria
Strategic criteria Focus on fast growing markets Indicative Capex breakdown over 2012–2017 MAINTENANCE CAPEX GROWTH CAPEX France Power <5% <5% 5-10% Europe Power 10-15% ~10% International Power 25-30% 15-20% 5-10% E&P Infrastructures ~15% Services Environment 5-10% ~15% Others <5% ~15% 30-35% 25-30%
Slide 129: More than 30% of Growth Capex to be spent in fast growing countries
More than 30% of Growth Capex to be spent in fast growing countries over 2012-2017 % of total Growth Capex 10-15% 10-15% ~10% 10-15% ~10% % of total 9% 8% ~5% capital 2% employed(1) H1 2011 2017 H1 2011 2017 H1 2011 2017 LATIN MIDDLE EAST ASIA AMERICA TURKEY AFRICA PACIFIC (1) H1 2011: as of June 30
Slide 130: Risk criteria
Risk criteria Managing project risks POTENTIAL Global risks: MASTERING HEDGING SHARING COUNTRY Premium integrated into WACC Complementary policy at entity CURRENCY and corporate levels Project risks: Transferring risk, to a large extent, to global or regional suppliers through EPC(1) contracts t
Slide 131: Strict project monitoring
Strict project monitoring Following investment decisions • Project monitoring at Business line and unit level • Frequent updates for the Management Committee for large projects • Look-back process Project management risk as a key Group risk Indicators Levers • Quality • Project portfolio balance • C
Slide 132: Financial investment criteria
Financial investment criteria Minimal spread over project‟s WACC IRR > WACC + 200bps Focus on Positive contribution to: value creation Positive contribution to: Free cash flow Net income Group year 1 after COD share year 2 after COD “Bankability” Demonstration of the possibility and cost to access e
Slide 133: GDF SUEZ WACC assessment
GDF SUEZ WACC assessment Clear risk/return profile Current WACC range per project type in % Higher E&P MERCHANT ACTIVITIES 8.0–14.0 6.3–10 Business risk REGULATED & CONCESSIONS CONTRACTED ACTIVITIES 5.0–7.2 7.5–13.5 Lower Lower Higher Country risk INVESTOR DAY – December 2011 133
Slide 134: IRR overview on current portfolio of projects
IRR overview on current portfolio of projects Project IRR post-tax E&P and LNG 20% Biomass PPA projects Water & Waste in Waste in mature Infrastructures Service fast growing Power countries projects countries merchant 10% development (EU) Gas storage Water & Waste in mature Infrastructures CONTRACTE
Slide 135: Ability to build partnerships
Ability to build partnerships Selection of the best partners Partners who bear specific Partners who share with us Partners who contribute industrial risks risks and return to financing • Sharing industrial skills • Empowering relationship • Limitation of capital with local stakeholders intensity an
Slide 136: Flexible financing policy to deliver value creative projects
Flexible financing policy to deliver value creative projects Corporate finance & financing upsides • Attractive financing costs thanks to Group‟s strong financial structure • Expected financing synergies of €72m(1) at IPR level and €40m(1) at Group level following integration Partnerships Project fi
Slide 137: Predictable growth from projects portfolio
Predictable growth from projects portfolio Estimated EBITDA build-up from committed projects ~70% of committed growth Future projects generated by major projects to be committed (Capex > €250m(1)) • Jirau • Polaniec Balanced growth between • Dunamenti • Chilca Uno • Uch 2 > 1.4 activities • Gheco 1
Slide 138: Preservation of a balanced business mix
Preservation of a balanced business mix EBITDA breakdown by business line Energy France 7% 5-10% Energy Europe Environment 23% 10-15% 15-20% 15% Growth levers in Energy 6% 2010 5-10% Indicative 2017 each business line Services Energy International Global Gas ~15% 16% & LNG 14% 25-30% 21% Infrastruct
Slide 139: Creating value
Creating value • Experienced financial organization on project management and commitment to continuous improvement • Strict investment criteria • Highly diversified project portfolio to capture market value and limit risks • Ambitious development plan focused on: - Speeding up development in fast gr
Slide 140: Conclusion
CONCLUSION Gjøa, Norway INDUSTRIAL DEVELOPMENT Jean-François CIRELLI & LARGE PROJECTS Vice-Chairman and President Investor Day 140
Slide 141: Business model designed for sustainable value creation
Business model designed for sustainable value creation 16 major projects ongoing... ... to deliver high return rates As of 06/30/2011 COD CTA/CTH (coal plant) 0.3 GW Chile 2011 GLOW (gas/coal plant) 0.3 GW Thailand 2011 • More than €3.3bn additional ESTREITO (hydro plant) 1.1 GW Brazil 2011-12 EBITD
Slide 142: GDF SUEZ' key strengths
GDF SUEZ' key strengths Unique and experienced human capital • Strong engineering (~10,000 people) and project development teams (~300 people) • Unparalleled skills to develop, build and operate large projects Size as a competitive advantage • Generate cost savings through global sourcing with key s
Slide 143: Security and visibility at the heart of GDF SUEZ' business approach
Security and visibility at the heart of GDF SUEZ' business approach Highly diversified portfolio of projects around the world Business Geography Fuel mix Environment 10-15% 15-20% Europe Power Services 5-10% >30% of growth Gas and renewables Growth Capex Capex in fast represent more than Infrastruct
Slide 144: Industrial Development & Large Projects
INDUSTRIAL DEVELOPMENT & LARGE PROJECTS Investor December 9, 2011 Day INVESTOR DAY – December 2011 144
Slide 145: Appendices
APPENDICES INDUSTRIAL DEVELOPMENT & LARGE PROJECTS Investor Day 145
Slide 146: Diversified horizon on long-term projects
Diversified horizon on long-term projects 0 5 years 10 years 20 years 30 years 40 years 50 years X years Desalination plant 1-2 1-3 10-30 STUDY/PERMITTING X years CONSTRUCTION CCGT/Coal 2 2-4 ~ 25 X years EXPLOITATION Hydro 1-2 3-5 >100 Waste project (EfW) 2-5 2-3 20-25 Wind on-shore ~6 ~1.5 ~ 25 S
Slide 147: Glossary
GLOSSARY Committed Capex BCM IPP Development Capex on projects on which Billion Cubic Meters Independent Power Producer expenses have begun or on which irrevocable committments have been taken towards CC Mboe suppliers or clients Commitment Committee Million Barrels of Oil Equivalent CCGT Mtpa Devel