2019 Half-Year Results

2019 half-year results
Stable EBITDA
Confirmation of 2019 targets and 2019-2020 ambitions

Key figures of the 2019 half-year results ⁽¹⁾

EBITDA: €8.3bn, +0.1% org.⁽²⁾
Net income excluding non-recurring items ⁽³⁾: €1.4bn, -19.4%
Net income – Group share: €2.5bn, +44.7%

Electricity generation

• Nuclear France 203.7TWh, +0.5%
• Nuclear United Kingdom 24.5TWh, -18.8%
• Group Renewables 31.4TWh, -23.8%
  o/w Hydropower France: 20.1TWh, -31.6%

Strengthened financial structure

• Completion of the disposal of EDF's 25% stake in Alpiq valued at €434m
• Signing of a binding agreement to sell Edison's Exploration and Production activity for an amount up to c. US $1bn ⁽⁴⁾
• Signing of two new bilateral sustainable revolving credit facilities for €300 million each raising the total of sustainability-linked credit facilities to over €5 billion
• Balance of the 2018 dividend: 93.7% of rights were exercised in favour of a payment in shares
• Success of the employee shareholding operation with the subscription of more than 40,000 beneficiaries

OPEX reduction in line with the trajectory: €1,072m vs. 2015

Control of net financial debt

• €37.4bn under IFRS 16 (slight decline excluding IFRS 16): net financial debt/EBITDA ratio of 2.4x ⁽⁵⁾

Deployment of CAP 2030

Renewable energies

• Major new developments in offshore wind energy:
  - win of the Dunkirk offshore wind project (600MW)
  - definitive approval by the Council of State of administrative permits for Saint-Nazaire, Fécamp and Courseulles-sur-Mer offshore wind farms projects
• Solar
  - win of the first phase of a solar project in Morocco (800MW) with an innovative hybrid solar-storage technology
  - commissioning of the EDF group's first solar power plant in Mexico (119.6MWp)
  - signature of four electricity sale contracts for 716MWp of solar in India (50/50 JV with Total Eren)
• Record level of EDF Renewable’s portfolio under construction: 4GW gross capacity at the end of June 2019

Customer-focused innovation

• Launch of the "Mes Jours Zen" offer
• Acceleration of sales under market offers: 350,000 customers already signed up
• Linky: 20 millionth smart meter installed
• New concession contract model : signing (or favorable deliberation to conclude) by 103 conceding authorities with EDF and Enedis
• Dalkia
  - Signing of a multiservices contract with Safran
  - New public service delegation for urban heating on Grande Île in Vaulx-en-Velin and Villeurbanne (15.5 years)
• Launch of DREEV, a subsidiary dedicated to smart charging in Europe

International development

• Decentralised energy: Acquisition of energy2market (e2m), a major player in energy aggregation in Germany
• Extension of the partnership with JERA to LNG activities
• India (smart grid): Successfully completed test phase and launch of the general deployment phase of 500,000 smart meters to come (total programme of 5mln over 18 months).

New nuclear

• Hinkley Point C: J0 milestone (pouring of the nuclear safety concrete and completion of the common raft for Unit 1) reached on schedule
• Taishan 2 EPR in China: First grid connection on 23 June 2019 on track for commercial commissioning
• Flamanville 3: Following the French Nuclear Safety Authority's decision of 19 June 2019 on penetration welds, three scenarios are under investigation.

2019 targets ⁽⁶⁾ including IFRS 16 impact

• EBITDA ⁽⁷⁾: €16.0 – 16.7bn
• Decrease in OPEX ⁽⁸⁾: ~ €1.1bn vs 2015
• Cash flow excluding HPC and Linky: >€600m ⁽⁹⁾

2019-20 ambitions ⁽⁶⁾ including IFRS 16 impact

• Total net investments ⁽¹⁰⁾ excluding acquisitions and ‘2019-20 Group disposals’: ~ €15bn/year
• 2019-2020 Group disposals: €2 to 3bn
• Net financial debt/EBITDA ^{(7) (10)} : ≤ 2.7x
• Dividend: target payout ratio of Net income excluding non-recurring items ⁽¹¹⁾: 45 – 50%
  With the French state committed to scrip for the balance of the 2018 dividend and dividends relating to 2019 and 2020 full year

EDF’s Board of Directors meeting on 25 July 2019, under the chairmanship of Jean-Bernard Lévy, approved the condensed consolidated financial statements at 30 June 2019.
Jean-Bernard Lévy, EDF’s Chairman and CEO stated: “The first half-year results in 2019 are in line with our forecasts. Bolstered by a strengthened balance sheet, the Group is continuing its deployment of the CAP 2030 strategy and maintains its annual objectives. The professionalism of our teams has made possible to achieve major milestones in the Grand Carenage, HPC and Taishan projects, and to bring about some major successes in the solar and off-shore wind power sectors. At the same time, the Group is constantly innovating for energy transition, paving the way for new offers that are totally in step with our clients’ lifestyles.“

NB: see the whole press release in the PDF file opposite

Footnotes to the first and second pages

(1) The financial statements at 30 June 2019 have been prepared in accordance with IFRS 16 as from 1 January 2019 (use of the modified retrospective method). Comparative figures have not been restated in accordance with the transitional provisions of the standard.
(2) Organic change at comparable scope, standards and exchange rates.
(3) Net income excluding non-recurring items is not defined by IFRS and does not appear directly in the Group's consolidated income statement. It corresponds to net income excluding non-recurring items, excluding net changes in fair value on energy and raw materials derivatives, trading activities and net changes in the fair value of debt securities and shareholders' equity net of tax.
(4) Enterprise value of US$750m, with an additional consideration of US $100m contingent on the commissioning of the Cassiopea gas development project in Italy. Edison could also receive royalties associated with further potential developments in Egypt, which would bring the aggregate value to c. US $930m.
(5) Net financial debt increased by €4.5bn in connection with the implementation of IFRS 16 on 1 January 2019.
(6) With unchanged legal and regulatory environment in France.
(7) Based on the scope and exchange rates at 01/01/2019 and assumptions for nuclear generation in France of 395TWh.
(8) Sum of personnel expenses and other external consumption. At comparable scope, IFRS 16 and exchange rates. At constant pension discount rates. Excluding changes in operating expenses from service activities.
(9) The impact of IFRS 16 on cash-flow is derived from the increase in EBITDA, reduced by financial interests on the IFRS 16 net financial debt.
(10) For 2020: depending of the impact, currently under assessment, of the decision of the French Nuclear Authority of 19 June 2019 on the schedule and completion cost of the Flamanville 3 project.
(11) Adjusted for the remuneration of hybrid loans recognised in equity.
(12) The disposal of Edison's Exploration and Production (E&P) activity was classified as a discontinued operation within the meaning of IFRS 5 as of 1 January 2019. The data published for the 2018 financial year have been restated for the impact of the presentation of the E&P activity in the process of being sold.