Engie S.a. · EURONEXT:ENGI
Engie — GDF Suez — Merger or Acquisition (October 2007)
45 slides from Engie's merger presentation, Oct 15, 2007
Slide 1: Creation of a World Leader in Energy
Creation of a World Leader in Energy 1 October 15, 2007
Slide 2: Disclaimer
Disclaimer Important Information wThis communication does not constitute an offer or the solicitation of an offer to purchase, sell, or exchange any securities of Suez, Suez Environment securities (or securities of any company holding the Suez Environment Shares) or Gaz de France, nor shall there be
Slide 3: Table of contents
Table of contents 1. Creation of a world leader in energy 2. Transaction terms and timetable 3. An ambitious and value-creating project 4. A corporate governance in line with best practices 5. Listing of SUEZ Environment, a reference player in water and waste management services 6. Conclusion 3
Slide 4: Creation of a world leader in energy
1 Creation of a world leader in energy 4
Slide 5: Creation of a world leader specialised in energy
Creation of a world leader specialised in energy 2006 revenue – € billion Leader in natural gas in Europe Main utilities in the world #1 purchaser & supplier #1 transmission & distribution network 71 68 #2 European storage operator 59 Leader in electricity 44 #5 power producer and supplier 39 37
Slide 6: An industrial player with powerful assets
An industrial player with powerful assets A unique combination of businesses Active in the entire energy value chain Multi-energy offering Strategic fit between the energy and services businesses Strong flexibility in energy generation and supply Diversified and efficient power generation mix St
Slide 7: Transaction terms and timetable
2 Transaction terms and timetable 7
Slide 8: Merger terms
Merger terms Terms based on an exchange ratio of Pro forma shareholding structure2 21 Gaz de France shares for 22 SUEZ shares 1.8% 1.2% Simultaneous distribution of 65% of the shares of 3.4% 1.5% SUEZ Environment to SUEZ shareholders 5.3% Shareholders' agreement between GDF SUEZ (35% of the shar
Slide 9: Remaining steps before completion of the merger
Remaining steps before completion of the merger SUEZ Consultation with SUEZ Environment employee Gaz de France (replacement of the employee representative bodies end of 2007, in representatives accordance with the law voted on 9th August 2004) Privatisation law implementation decree to be is
Slide 10: An ambitious and value-creating industrial project
3 An ambitious and value-creating industrial project 10
Slide 11: An ambitious development strategy
An ambitious development strategy Consolidate leadership positions in domestic markets: France Benelux Leverage complementarities to strengthen customer offerings: Dual gas / electricity offers Innovative energy services Boost its ambitious strategy of industrial development notably in: Upstre
Slide 12: Ambitious objectives in all businesses
Ambitious objectives in all businesses Energy France Energy Europe Infrastructures Energy Services Environment Global Gas & LNG & International Develop multi-energy Priority given to Target reserves of Increase regasification Leverage the strategic Growth strategy offerings development i
Slide 13: A sustained industrial capex programme
A sustained industrial capex programme Indicative split of annual capex¹, average between 2008-2010 In €bn 4.0-4.5 1.5-2.0 ~ 1.5 1.0-1.5 1.0-1.5 0.3-0.5 Energy Energie Energy Energie Global Gas Global Gaz Infrastructures Services Energy Environment Environnement France Europe and Europe & et GNL Inf
Slide 14: A strong financial profile
A strong financial profile Financial profile A financial structure that sustains the ambitious strategy of industrial growth 2006 combined pro forma unaudited data - in €bn GDF SUEZ2 Low gearing Strong potential for cash flow generation Revenues 70.9 A key stock in the energy sector EBITDA2 11.7
Slide 15: Operational synergies
Confirmed potential for operational synergies of approximately €1bn per year in the medium term Pre-tax annual impact post impact of remedies 2008-2010 Annual total 2013 Gas sourcing €100m €180m Operational synergies Scale effect Other procurement €120m €120m Operating costs €90m Supply and €320m co
Slide 16: Significant operational synergies due to scale effect and strategic fit
Significant operational synergies due to scale effect and strategic fit Reduction in supply costs Gas sourcing Further optimisation of sourcing portfolio Enhanced LNG arbitrage Joint procurement management and operational integration Scale effect Other procurement Bargaining power enhanced
Slide 17: Strong prospects for profitable growth
Strong prospects for profitable growth Profitable growth EBITDA growth of approximately 10%1 in 2008 EBITDA target of €17bn1 in 2010 A balanced mix of regulated and unregulated activities generating growth and recurring cash flows An optimized capex programme €10bn2 per year on average over 20
Slide 18: A strict financial policy
A strict financial policy Governance of investment committees in accordance with practices of the two Groups and ensuring a strict discipline Strict investment criteria in line with those currently enforced by the two Groups: In accordance with the Group strategy Value creation over the long run
Slide 19: An attractive stock for shareholders
An attractive stock for shareholders Dynamic dividend policy targeting an attractive yield compared to the sector average Target payout ratio: above 50% of recurring Group net income Average annual growth in dividend per share of 10% to 15% between dividend paid in 20071 and dividend paid in 2010
Slide 20: A corporate governance in line with best practices
4 A corporate governance in line with best practices 20
Slide 21: A balanced corporate governance structure
A balanced corporate governance structure Board of Directors including 24 members: At least 1/3 independent Directors1 10 Directors nominated by Suez 10 Directors nominated by Gaz de France including Chairman and Chief Executive Officer including Vice Chairman and President Gérard Mestrallet Jean-Fr
Slide 22: Listing of SUEZ Environment, a reference player in water and waste management services
5 Listing of SUEZ Environment, a reference player in water and waste management services
Slide 23: SUEZ Environment, a reference player in water and waste management services
SUEZ Environment, a reference player in water and waste management services A leader in Europe and the world Global management of the entire water and waste management cycles Leading positions 68 millions drinking water customers 44 millions sanitation services customers 47 millions waste serv
Slide 24: SUEZ Environment, attractive growth prospects
SUEZ Environment, attractive growth prospects Attractive growth opportunities in favourable market conditions Growing demand for environmental solutions in context of resources rarefaction (water resources management, waste recycling…) Increasingly stringent environmental norms Strong demand for
Slide 25: Conclusion
Conclusion \ Gaz de France swNvez
Slide 26: A project on track to deliver high value-creation for shareholders
A project on track to deliver high value-creation for shareholders Creation of a global leader in Energy with powerful assets Acceleration of growth and profitability prospects Clearly identified synergies Dynamic shareholder return Implementation of best practice corporate governance 26
Slide 27: Appendices
Appendices
Slide 28: Management structure
Management structure The management committee will include 6 members Chairman and chief executive officer Gérard Mestrallet Vice chairman and president Jean-François Cirelli Executive vice presidents Yves Colliou Jean-Marie Dauger Jean-Pierre Hansen Gérard Lamarche The executive committee Members of
Slide 29: Operational structure of the new Group
Operational structure of the new Group Chairman and chief executive officer – Gérard Mestrallet Energy Policy Vice chairman and president – Jean-François Cirelli Committee Energy France Henri Ducré Jean-Pierre Hansen Energy Europe & Dirk Beeuwsaert (deputy) International Energy Energy Energy Benelux
Slide 30: A clearly defined role for the French State
A clearly defined role for the French State The State will be a shareholder of the new group (c. 35% of the share capital) Representation of the State at the Board of Directors (7 representatives) Clear separation between the State as a shareholder and as a regulator Specific right of the St
Slide 31: The process is already well advanced
The process is already well advanced October 6, 2006 Approval of the proposed merger by the Belgian government November 8, 2006 Passing by the French Parliament of the law allowing for the privatisation of Gaz de France November 14, 2006 Authorisation of the transaction by the European Commiss
Slide 32: An organization dedicated to the success of this strategy
An organization dedicated to the success of this strategy Energy France Energy Europe Infrastructures Energy Services Global Gas and LNG Environment & International Gas and electricity Power production Exploration and Natural gas Closer ties between Management of the Supply in France in
Slide 33: Energy France
Energy France Leveraging the leadership position in natural gas supply and Gaz de France’s powerful brands in order to: Energy Develop multi-energy offers on the existing France portfolio of “retail” customers Wind 11 million Develop the retail electricity client base 130 MW end 2007 customers a
Slide 34: Energy Europe and International
Energy Europe and International Energy Europe & International Benelux – Germany 47 GW in installed Increased generation capacities capacity at the end of Consolidation of leadership in retail in Belgium 2006 Expansion in Germany and the Netherlands # 1 energy supplier in Belgium Europe # 1
Slide 35: Global Gas and LNG
Global Gas and LNG 16 LNG tankers 5 tankers under construction Development of the E&P business Increase in reserves Isle of Grain Achievement subject to market conditions Montoir Zeebrugge Neptune LNG Fos Everett Italy Huelva Carthagène Diversification and competitiveness Sabine Pass Floride Pet
Slide 36: Infrastructures
Infrastructures Terminals Commissioning of Fos Cavaou Infrastructures (8.25bcm beginning of 2008) # 1 transmission Expansion of capacities at Zeebrugge (4.5bcm in 2008) network in Europe and Montoir (2.5bcm in 2011) # 1 distribution network in Europe Storage # 2 gas storage Increase in cap
Slide 37: Energy services
Energy services A global offer from design to operation Unique European network Complementary service and installation Energy services businesses Complete multi-technology offer European leader in energy services Unique European Growth factors network Increased use of outsourcing 15 countr
Slide 38: SUEZ Environment
SUEZ Environment Leadership in the management of the entire water and waste cycles enhanced by Unique expertise of the entire value chain Portfolio of highly value-added technologies Ability to offer integrated solutions Environment Ongoing research for innovative products and segments Global le
Slide 39: EBITDA definition of the combined entity
EBITDA definition of the combined entity 2006 pro forma unaudited data (€m) EBIT (pro forma combined)1 7,318 + Depreciation and Amortisation1 + 3,823 + Non cash personnel related charges + 31 + Concessions renewal expenses + 508 EBITDA pro forma unaudited combined (2006 perimeter) 11,680 1 Post impa
Slide 40: From standalone numbers to combined group EBITDA
From standalone numbers to combined group EBITDA 2006 pro forma unaudited data (€m) 2006 Suez EBITDA - standalone definition 7,083 - Pensions and other similar provisions reversals / accruals1 + 132 - Financial income (excluding interests received) - 284 - Share of result from associated companies -
Slide 41: New Group pro forma summary P&L
New Group pro forma summary P&L 2006 pro forma unaudited data (€m) Revenues 70,858 Purchases (39,940) Personal costs (10,090) Depreciation and provisions (3,823) Other operating income (9,687) Current operating income 7,318 Mtt of operating financial instruments (67) Assets impairment (198) Restruct
Slide 42: Synergies related to gas sourcing: scale effect and optimisation
Synergies related to gas sourcing1: scale effect and optimisation Reduction in sourcing costs Sourcing synergies Enhanced bargaining power towards suppliers and diversification of supply sources Optimisation of price and risk profile Further optimisation of sourcing portfolio Establishment of an
Slide 43: Clear procurement savings (other than energy)
Clear procurement savings (other than energy) Procurement savings (other Joint procurement management and operational integration than energy) Bargaining power bolstered due to volume effects Use of master contracts Best practices implementation Establishment of a common platform Insurance purch
Slide 44: Operational costs synergies confirmed within the new group perimeter
Operational costs synergies confirmed within the new group perimeter Short term operational cost reductions Operational, supply and Streamlining of structure costs (volume effects on external costs: commercial costs synergies communication, consultancy, IT…) Pooling of expertise and decisions De
Slide 45: Medium term revenue synergies arising from the operational fit between SUEZ and Gaz de France
Medium term revenue synergies arising from the operational fit between SUEZ and Gaz de France Additional energy production capacity in Europe based on Revenue synergies partner’s existing assets Clients portfolio Sourcing and gas storage capacities Development of an integrated LNG chain based in