Revenues: EUR 90.7 billion
EBITDA: EUR 16.5 billion
Net income, Group share: EUR 4.0 billion
Net recurring income, Group share1: EUR 3.5 billion
Net debt2: EUR 37.6 billion
Net debt/EBITDA: 2.3x
Gearing Ratio: 46.8%
Dividend: EUR 1.50 per share3
GDF SUEZ continued to report solid results for 2011, with EUR 90.7 billion in revenues, up +7.3% despite highly unfavorable weather conditions and the gas tariff freeze in France.
EBITDA grew by +9.5% thanks to the contribution of International Power from February 2011, the commissioning of new assets in all business lines, very good performances from international activities in particular in Asia, Latin and North America, as well as from exploration & production and LNG activities and the contribution of the Efficio performance plan. This performance has been achieved in a tough economic environment on top of exceptional mild weather in Europe and gas tariff freeze in France.
Strict financial discipline and early advancement of the 3 year EUR 10bn asset optimization program led to a strengthened financial structure with a net debt down to EUR 37.6bn.
This solid performance allows GDF SUEZ to reaffirm its ambitious operational targets across all businesses :
Gérard Mestrallet, Chairman and Chief Executive Officer of GDF SUEZ commented : “Thanks to a balanced business model, GDF SUEZ achieved all its industrial and financial targets for 2011 in a very challenging environment. This solid performance demonstrates that we have the right long term strategy. We are confident that the strengths and flexibility of GDF SUEZ will enable the Group to address the coming challenges of the world economy successfully and to deliver sustained growth with focus on profitability in the coming years.”
The Group benefits from a balanced business mix with strong leadership positions in all businesses :
The Group also benefits from its global presence with very strong positions in its domestic European markets and growing positions in fast growing markets, this was reinforced in 2011 by the successful integration of International Power and the strategic partnership signed with CIC.
For the Group, the year 2011 was also marked by some clarification on different topics :
Energy France business line recorded a 50.7% fall in EBITDA, due to the combined effect of exceptional weather (-30 TWh in gas sales in 2011 vs average weather conditions and -56 TWh compared to 2010) and the gas tariff freeze in France. The total impact of these two items amounted to EUR -0.9 billion compared to 2010 whereas the EBITDA decrease is limited to EUR -0.5 billion thanks to full year contribution of new power assets.
EBITDA for the Energy Europe & International business line grew strongly by +27.8% after the integration of International Power.
EBITDA of International Power grew even more strongly by +66.7% with a large scope effect but also as a result of a strong increase in North America, which benefited from higher profitability in the LNG business, and Latin America, which experienced strong growth in Brazil, Chile and Peru together with first contributions from new projects coming on line in Brazil and Chile.
In Benelux and Germany, EBITDA was down by -2.5% impacted by both pressure on margins and a one-off positive effect in 2010 whereas EBITDA for the rest of Europe was stable, with contrasting situations from one country to another. Poland, Hungary and Romania faced some difficulties. Slovakia and Greece grew thanks to improvement in margins and contribution of new assets, while Italy’s performance was stable despite difficult economic conditions. The Iberian Peninsula declined mainly due to a one-off positive effect in 2010 and to lower volumes.
The Global Gas & LNG business line posted a strong increase in EBITDA at +14.7%, with good performances in exploration-production activities in particular with the impact of the Gjøa and Vega new fields and better performance in LNG activities, especially to Asia (+60% vs 2010 with 25 cargoes), offsetting the unfavorable effects of the oil/gas spread impact as well as a contraction in sales to major European customers.
The Infrastructures business line recorded a -7.2% drop in EBITDA, with the positive effects of the commissioning of the Fos Cavaou LNG terminal only partly offsetting unfavorable weather conditions (-34 TWh in gas volumes distributed in 2011 vs average weather conditions, -63 TWh compared to 2010 or EUR -314 million) and reduced sales of underground storage capacities.
The Energy Services business line delivered a +8.9% growth in EBITDA sustained by acquisitions at the end of 2010 and demonstrating its resilience capacity to face difficult economic conditions.
Finally, SUEZ ENVIRONNEMENT recorded a +7.4% increase in EBITDA, thanks to the increase in volumes and profitability in Europe, integration on a full year basis of Agbar, acquisition in 2011 of WSN in Australia, despite difficulties with the Melbourne contract.
Excluding the weather impact and the gas tariff shortfall in France, EBITDA reached EUR 17.4 billion meeting the Group’s EUR 17 to 17.5 billion target, with all business lines contributing to EBITDA growth. Under the same conditions, net earnings per share also met the Group’s target, being equal to the 2010 level. The Group confirms its strong commitment to provide shareholders with sustainable and competitive return and will pay for 2011 a EUR 1.5 per share dividend6 equal to 2010.
As of December 31, 2011, net debt amounted to EUR 37.6 billion decreasing by EUR 4 billion compared with pro forma net debt7 at the end of 2010 and further improving the net debt/EBITDA ratio to 2.3x, below the Group’s target of 2.5x. This improvement in financial structure was achieved combining strong industrial development with gross capex of EUR 10.7 billion, high free cash flow generation amounting to EUR 8.8 billion as well as contribution of the portfolio optimization program. Announced in March 2011, with a target of EUR 10 billion over the 2011-2013 period, it is very well advanced with 2/3 already closed at the end of 2011.
Gearing stood at 46.8% equal to the reported gearing at the end of 2010 before the integration of International Power.
Once again, GDF SUEZ was very active in 2011 in the bank and bonds markets, extending the average maturity of the Group’s net debt by more than two years beyond 11 years, further strengthening the Group’s level of liquidity to EUR 27.3 billion (EUR 15.9 billion in cash and EUR 11.4 billion in undrawn credit lines) while maintaining the average cost of gross debt at 4.57%.
In a context of economic crisis, the Group is focusing on four priorities : to increase financial flexibility, to optimize assets base, to concentrate on net recurring income and to anticipate new markets trends.
2012 financial objectives8 assuming average weather and stable regulation are the following :
GDF SUEZ is also strongly committed in delivering on sustainable development objectives for 2015
By 2015, GDF SUEZ expects a net recurring income group share10 around EUR 5 billion, with average weather and stable regulation, with gross capex between EUR 9 and 11 billion per year11 , a strong financial structure (net debt/EBITDA ratio less than or equal to 2.5x and “A” category rating) allowing a stable or growing dividend over 2013-2015.
The presentation of 2011 results and the annual financial report, including the management report, consolidated financial statements and notes are available on ENGIE Website.
The Group’s consolidated accounts and the corporate accounts for GDF SUEZ SA as of December 31, 2011 were approved by the Board of Directors on February 8, 2012. The Group’s statutory auditors have performed their audit of these accounts. The relevant audit reports certifying them will be issued after completion of the specific verification required by French law.
(1) Net income excluding restructuring costs, MtM, impairment, disposals, other non recurring items and nuclear contribution in Belgium
(2) Net debt new definition (refer to page 8)
(3) Dividend to be submitted for shareholder approval at the Shareholders’ General Meeting on April 23, 2012. Balance dividend of €0.67/share to be paid on 30 April 2012
(4) At 100%
(5) Assuming continuity of legal qualification and of contractual arrangements
(6) Dividend to be submitted for shareholder approval at the Shareholders’ General Meeting on April 23, 2012
(7) Net debt new definition (refer to page 8) and pro forma IPR
(8) Targets assume average weather conditions, full pass trough of supply costs in French regulated gas tariffs, no other significant regulatory and macro economic changes. The underlying assumptions are as follow: average brent $/bbl 98 in 2012; average electricity baseload Belgium €/MWh 55 in 2012 ; average gas NBP €/MWh 27 in 2012. Indicative 2012 Ebitda of EUR 17 billion
(9) Vs target of EPS 2012≥ EPS 2011 announced on March 3, 2011
(10) Assuming average weather conditions, full pass trough of supply costs in French regulated gas tariffs, no other significant regulatory changes. Assuming no change in accounting principles compared to 2011. Indicative 2015 Ebitda of EUR 21 billion. Vs target of EBITDA 2013 > EUR 20 billion and vs target of 2013≥ EPS 2012 announced on March 3, 2011
(11) Vs EUR 11 billion over 2011-2013 announced on March 3, 2011
The variation of equity, group share and non controlling interests includes notably the scope effect related to the entry of International Power for 6.5 billion euros, to the entry of a 25% non controlling shareholder in GRTgaz for 1.1 billion euros and to the entry of a 30% non controlling shareholder in E&P for 2.3 billion euros. As allowed by IFRS3, the Group decided to apply the full goodwill option for the accounting of the acquisition of International Power.
As previously disclosed in our Condensed interim consolidated financial statements for the six months ended June 30, 2011, the statement of financial position as of December 31, 2010 was restated under IAS 8 due to an error in the computation of “gas in the meter” receivable accounted for in the Energy- France business line. This restatement is due to the use of an incomplete model and certain incorrect calculation parameters. As the major part of the cumulated impact of this correction is originated before July 22, 2008 (date of the merger of Gaz de France and Suez) the fair value of assets acquired in this transaction has been restated resulting in the correction of the goodwill ,the cost of business combination being unchanged. Accordingly, the comparative amounts for the year ended December 31, 2010 related to Goodwill, Trade and other receivables, Deferred Tax Assets, Other liabilities and Equity have been respectively restated for +366 million euros, -833 million euros, + 240 million euros, -137 million euros and -91 million euros. The comparative income statement information related to the twelve months ended December 31, 2010 and the Energy – France Business line key indicators have not been restated as this correction has not material impact. Thus, basic and diluted earnings per share were not restated for presented periods. The 2009’s and 2008’s income have not been materially impacted either. Appropriate measures were implemented during the six months ended June 30, 2011, to strengthen reliability of the “gas in the meter” computation model in the Energy – France segment and to reinforce internal control accordingly. This correction did by no means modify amounts billed to the 10.1 million customers in France. The detail of these restatements is available within the Notes to the 2011 consolidated financial statements in our website.
Changes on net debt definition:
- Net Investment Hedge (NIH) derivatives (currency hedge for investment in foreign currencies)
- Interest rate effect (mark-to-market) on derivatives on future interest cash flows, whether classified in Cash Flow Hedge (CFH) or not qualifying for hedge accounting
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