
By ENGIE - 05 May 2017 - 08:53
Revenues as of March 31, 2017 were EUR 19,513 million, up +3.2% on a gross basis and +3.1% on an organic basis. This growth is notably due to the increase of gas purchase/sale activities, to the commissioning of new assets in Latin America (Mexico and Peru) and to tariff revisions for gas infrastructures. It is also driven by the performance of thermal gas generation activities in Europe as well as by a slightly favorable temperature impact, temperatures in France being less warm over the first three months of 2017 compared to the same period last year. This increase is also due to favorable price effects that did not impact the margins.
EBITDA for the period was EUR 3,297 million, down -5.9% on a gross basis and -3.6% on an organic basis, impacted by unfavorable scope effects as well as by a decrease of hydro production in France, by hydrocarbon production and by the shutdown of the Tihange 1 nuclear power plant since September 2016. These effects are partially compensated by the sustained performance of the Group’s growth engines, by the activities of thermal gas generation activities in Europe and by a favorable foreign exchange effect.
Current Operating Income reached EUR 2,192 million, down -8.5% on a gross basis and -4.6% on an organic basis compared to the end of March 2016, for the same reasons as for EBITDA, depreciation remaining stable compared to the first quarter 2016.
As of March 31, 2017, net debt reached EUR 20.4 billion, down EUR -4.4 billion from year-end 2016, mainly due to the effects of the portfolio rotation program (EUR 3.4 billion) namely with the closing of the sale of thermal merchant activities in the United States in February 2017, which reduced net debt by EUR 3.1 billion.
The cash flow from operations (CFFO) stands at EUR 2.5 billion over the first quarter of 2017, increasing by 1.1 billion Euros compared to the end of March 2016. This year-on-year evolution reflects, on the one hand, a solid operational cash flow generation and, on the other hand, a favorable evolution of WCR variation of 1.5 billion Euros (mainly linked to margin calls and financial instruments derivatives), sharply improved regarding the situation at the end of March 2016.
At end March 2017, the net debt/EBITDA ratio at 1.95x is well below the target of ≤2.5x. The Group’s average cost of gross debt slightly decreased compared to end December at 2.74%.
- From 1st of January to 31st of March 2017:
- As from 1st of April 2017:
- From 1st of January to 31st of March 2017:
- As from 1st of April 2017:
- From 1st of January to 31st of March 2017:
- As from 1st of April 2017:
ENGIE continues its transformation, adapting its headquarters organization. After the implementation as of January 1, 2016 of an organization which led to the reinforcement of the geographical Business Units, ENGIE pursues its decentralization so as to become more agile and closer to its customers. The missions and location of the Group’s headquarters would be streamlined. This project could lead to the net job cut of 504 filled positions, including 312 in France, 116 in Belgium and 76 in the United Kingdom.
The Group’s transformation plan is very well advanced today on its three programs.
On the portfolio rotation program (EUR 15 billion net debt impact targeted over 2016-18), the Group has announced to date EUR 8.1 billion of disposals [6] (i.e. 54% of total program), of which EUR 7.6 billion already closed.
On the investments program (EUR 16 billion growth capex over 2016-18), EUR 5.5 billion are already invested, at end March 2017.
As regards to the “Lean 2018” performance plan, at end March 2017, EUR 0.6 billion of net gains at Ebitda were achieved. More than 80% actions are already identified to reach the target of EUR 1.2 billion savings at the end of 2018.
Revenues as of March 31, 2017 increased by +3.2% on a gross basis with –82 million Euros of perimeter effects (–147 million of scope out effects namely due to the sale of hydro and thermal power generation activities in the United States in June 2016 and February 2017, respectively and +65 million Euros of scope in effects and +98 million Euros of foreign exchange, mainly due to the Brazlian Real and the Dollar, partly compensated by the Pound Sterling. On an organic basis, revenues increase by +3.1%.
Revenues for the North America segment is down on a gross and organic basis due to lower performance of the generation activity partly compensated by an improved performance in retail and services activities.
Revenues for the Latin America segment is sharply up on a gross and organic basis, thanks to the impact of tariffs revisions in Mexico and in Argentina as well as to the commissioning of new assets in Mexico (the gas pipeline of Los Ramones and the cogeneration of Panuco in October 2016) and in Peru (Nodo Energetico and Chilca Plus thermal plants in October and December 2016, respectively).
Revenues for the segment Africa/Asia is slightly down due to lower availability of assets in Thailand and in Turkey related to planned maintenance, partly compensated by higher power sales in Australia following the increase of market prices.
Revenues for the segment Benelux is slightly down. This decrease is mainly explained by the impact of lower commodity prices.
Revenues for the segment France is slightly down on an organic basis due to lower power generation from renewables, mainly hydro. It should be noted that the gross revenues decrease of -19.5% is explained by the change in classification of gas and power commercialization activities from the segment France (Entreprises et Collectivités, E&C) into the segment Other as from January 1, 2017.
Revenues for the segment Europe excluding France and Benelux increase due to favorable weather conditions on gas distribution activities in Romania as well as by positive price effects on commercialization activities and on power generation (First Hydro) in the United Kingdom.
Revenues for the segment Infrastructures Europe increased by +10.7% on an organic basis. This growth mainly relates to the development of distribution and transport activities for third parties and to the favorable effect of tariff increases.
Revenues for the segment Global Energy Management and Global LNG increased by +19.1% on an organic basis. This evolution mainly relates to higher volumes of commodities sold in Europe compared to last year.
Revenues for the segment Exploration & Production is down due to lower hydrocarbon production, mainly driven by the shutdown for modernization of the Njørd platform in Norway and to natural fields depletion in the Netherlands and in Germany. This decrease in volumes is partly compensated by the increase in prices.
The organic growth of revenues for the segment Other is mainly explained by the performance of thermal gas generation activities in France and in Europe, which benefitted in the 1st quarter 2017 from higher prices end 2016. The non-organic effects come namely from the internal transfer of gas and power commercialization activities dedicated to professionals in France (Entreprises et Collectivités, E&C), as from January 1, 2017, which activity was until now located within segment France.
The March 31, 2017 financial information presentation used during the investor conference call is available from the Group’s website.
(1) The Belgian nuclear contribution now booked in EBITDA
(2) Excluding scope and forex effects
(3) Including share in net income of associates
(4) Cash Flow From Operations (CFFO) = Free Cash Flow before maintenance capex
(5) These targets and indications assume average weather conditions in France, full pass through of supply costs in French regulated gas tariffs, and unchanged Group accounting principles for supply and logistic gas contracts no significant regulatory and macro-economic changes, commodity price assumptions based on market conditions as of December 31st, 2016 for the non-hedged part of the production, and average foreign exchange rates as follows for 2017: €/$: 1.07; €/BRL: 3.54. These financial objectives include the impact of the Belgian nuclear contribution on Ebitda and do not consider significant impacts on disposals not already announced.
(6) Cumulated impact from January 1, 2016 to March 31, 2017
(7) Dividend submitted to shareholders’ approval at the General Assembly on May 12, 2017
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 as statements about projects, objectives and expectations regarding future operations, profits, or services, or future performance. Although ENGIE management believes that these forward-looking statements are reasonable, investors and ENGIE shareholders should be aware that such forward-looking information and statements are subject to many risks and uncertainties that are generally difficult to predict and beyond the control of ENGIE, and may cause results and developments to differ significantly from those expressed, implied or predicted in the forward-looking statements or information. Such risks include those explained or identified in the public documents filed by ENGIE with the French Financial Markets Authority (AMF), including those listed in the “Risk Factors” section of the ENGIE (ex GDF SUEZ) reference document filed with the AMF on March 23, 2017 (under number D.17-0220). Investors and ENGIE shareholders should note that if some or all of these risks are realized they may have a significant unfavorable impact on ENGIE;
About ENGIE
ENGIE develops its businesses (power, natural gas, energy services) around a model based on responsible growth to take on the major challenges of energy’s transition to a low-carbon economy: access to sustainable energy, climate-change mitigation and adaptation and the rational use of resources. The Group provides individuals, cities and businesses with highly efficient and innovative solutions largely based on its expertise in four key sectors: renewable energy, energy efficiency, liquefied natural gas and digital technology. ENGIE employs 153,090 people worldwide and achieved revenues of €66.6 billion in 2016. The Group is listed on the Paris and Brussels stock exchanges (ENGI) and is represented in the main international indices: CAC 40, BEL 20, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100, MSCI Europe, DJSI World, DJSI Europe and Euronext Vigeo (World 120, Eurozone 120, Europe 120 and France 20).