Isabelle Kocher, ENGIE CEO


“The word ‘transition’ falls short of the change that we are witnessing: we are facing a real revolution.”


On Thursday, September 29, Isabelle Kocher shared this conviction with the press at a working breakfast organized by Ajef (Association des journalistes économiques et financiers, the French association for business journalists). It is the starting point not only of the speech she made later in the morning, but also of the entire business strategy that ENGIE’s new CEO intends to apply for reshaping the group. Following on from the historic impetus given by the COP 21 and thanks to the inflow of public and private funding to speed up the maturation process for distinctive new technologies, “it is no longer a wild dream to imagine that one day the entire energy world will be carbon free,” including even natural gas, according to this member of the prestigious Corps des Mines [formed of State Engineers of the Mines] and graduate of Ecole Normale Supérieure [French institute for advanced studies].

Asset disposals and new investments

All the same, Isabelle Kocher is aware that this upheaval – which appears to be happening faster than expected – will not take place without major industrial changes, which she intends to anticipate: “We have decided to work with the revolution rather than be at the mercy of it.” So the strategy for rebuilding ENGIE involves three major focus areas that are moving forward together. Firstly, the group is refining its portfolio of business activities, getting rid of those that no longer appear to be “at the heart of the energy of tomorrow”, such as coal and oil. In particular, ENGIE has instigated an asset disposal plan worth 15 billion euros over three years, a third of which have already been carried out over a six month period.

At the same time, investments will be made in fields that are considered to be essential for the future of energy, where the group believes it has already demonstrated the power of its expertise: renewables, infrastructures that are more and more distributed, and storage technologies to offset the intermittence of solar and wind energy. Moreover, the group is already committed to following the path of clean energy sources, especially photovoltaic solar power, by purchasing Solairedirect in July 2015. In the field of storage, ENGIE has just acquired a 20% stake in Symbio FCell, which designs and manufactures systems integrating hydrogen fuel cells, and in Dunkirk is in charge of a pilot project for exploring possible applications for electrolysis. In May, the company also acquired an 80% holding in Green Charge Networks, a Californian company that is a leader in the field of battery storage.

Agility and resilience

The third essential focus area for surfing on the wave of change is digitalization. “An energy company’s basic expertise involves its ability to manage a complex equilibrium. Now, this task will be performed more and more by software,” explains Isabelle Kocher. In June, ENGIE launched its Digital Factory, a team of some hundred specialists whose mission is to integrate the 4,500 in-house business applications already developed, or indeed to develop new ones.

However, once the main trends have been detected and the guidelines have been laid down, the objective is certainly not to plan every single phase rigidly, Isabelle Kocher clarifies. “If there is a lesson to be learned from the sudden and unexpected collapse in oil prices, it is that these variations are impossible to foresee,” especially in an environment where the rapid development of renewables inevitably entails geopolitical upheavals, she underlines. Besides, no one can predict the timing and the stages involved in the ongoing revolution… So the CEO prefers to bank on an agile, resilient structure that ensures permanent adaptability – this view of the situation has required in particular an internal reorganization that is more decentralized and horizontal.

No fears concerning trade unions and investors

Isabelle Kocher knows that without any doubt the remodeling exercise will be confronted with obstacles, in terms of both the stock market and the social environment. But in her view no obstacle is insurmountable, as long as “we have a clear direction and we define the rules together.” For example, as the CEO explains, the plan to reorganize the company was able to obtain the necessary 88 employee representative approvals, thanks to the commitments made by the group in terms of training and the reallocation of employees affected by job cuts. 

Nor is Isabelle Kocher overly worried about possible sanctions from shareholders, despite the decision that was announced in February to reduce by a third the dividends paid as of 2017, in order to fund new investments. “I was pleasantly surprised to discover to what extent investors are more and more sensitive with regard to not only the quantity but also the quality of the company’s financial results,” she notes. This is why she considers that she is on the right track:

“Taking into account the long lifetime of four factories, short-term thinking would not make any sense, and our strategy – focused on new growth drivers with a three-year visibility – is the best one for creating value”.

Isabelle Kocher reminds us that, in order to reassure those who are concerned about the most immediate consequences of the asset disposals, ENGIE has decided to delink dividends from the company’s financial results, in favor of fixed remuneration. Furthermore, she insists that the drop in share prices observed since the start of the year is in line with that of utilities in general, where the old generation of infrastructures is more and more under pressure.