There are two years Engie had redefined its strategy. He wanted to be “ leader of the energy transition in Europe and the first independent power producer in developing countries .” Today, faced with the accelerated degradation of its traditional markets, it simplifies the proposal. “ We are accelerating the transformation of the group to become the leader of the energy transition in the world ,” said Gérard Mestrallet, CEO of the group, presenting the major strategic shift announced Thursday.
to abandon activities that emit CO2
the CEO left to Isabelle Kocher, who will become CEO of Engie in May, care specify the action plan that will achieve it. The group is active in electricity generation (nuclear, thermal, renewables), energy infrastructure (gas networks, LNG terminals …) exploration and production (E & amp; P), the marketing of natural gas liquefied (LNG) and energy services (heat or cold networks, helps energy efficiency).
As revealed this fall, he wants today disengage the most CO2 emitting activities and the most exposed to commodity prices variations (which are also the least profitable now). Objective: to focus on green energy and energy services. And more generally on the activities of the guaranteed income, such as infrastructure or the central subject of purchase contracts on the electricity produced. “ These activities must represent in three years 85% of gross operating income ,” said Gerard Mestrallet.
15 billion euros in disposals
Specifically, Engie announced a broad plan of disposals of € 15 billion over three years between 2016 and 2018. “ All our activities n ‘ fall outside these criteria are under review: coal plants, power plants exposed to the market, or the S & amp; P , “explained Isabelle Kocher. Of these 15 million, about one third has already been achieved and Thursday: the expected sale of thermal power plants in the United States (10 gigawatts to 4.1 billion euros), and coal plants in Indonesia and India (3 GW to 1.4 billion). The opening of the capital of the subsidiary Benelux (Electrabel) is also studied, but the decision will be “ within 12 to 18 months .”
Meanwhile, the group will reinvest 22 billion euros over the period, including 7 billion in maintenance and $ 15 billion in development. “ Of these 15 billion, 10.5 are engaged in projects already launched, power plants (30%), infrastructure (50%) and services (20% )” continued Isabelle Kocher.
the remaining 4.5 billion will be invested mainly in services (68%). In the longer term, the group is betting on the development of emerging technologies and the digital, on which it will invest an additional 1.5 billion in three years. He scored in his strategy the establishment of an ecosystem dedicated to start-ups.
Finally, Engie launch a new performance plan, which should enable it to achieve € 1 billion annual savings after the perform plan launched in late 2012, which involved 3.5 billion. Procurement, travel, overheads will be scrutinized. To the question of the impact of this plan on enrollment, Gérard Mestrallet has sought reassurance. “ We have a tradition in the group to manage the changes in a socially responsible manner ,” he said, acknowledging that with the developments planned, “ there will surely positions that will move from one activity to the other . “
shareholders should also make sacrifices. The group held its commitment to maintain its dividend at a euro for 2015 and 2016, despite the heavy losses last year (see box). But over the following two years, it will be reduced to 0.70.
A loss of 4.6 billion euros in 2015
If Engie managed to maintain last year’s recurring net income (2.6 billion euros) despite the unfavorable environment, the group has nevertheless completed the year in the red. Having already depreciated 15 billion euros of assets in 2013, he recorded new scale writedowns of 8.7 billion last year, which led it to announce a net loss of 4.6 mlliards. While in 2013, the group had largely depreciated European gas power plants, are both active in the exploration and production (E & amp; P) and liquefied natural gas which are most affected, totaling 4.3 billion . “They have had a strong impact on oil and gas prices” , explained Judith Hartmann CFO. Thermal power plants have also been affected: the US plants whose Engie announced the sale represented alone 1 billion.
The fall in oil prices, like that of the electricity market prices weighed heavily on the gross operating income, which fell overall 900 million. But this impact (-1.5 billion) was partly offset by a more favorable climate for foreign exchange effects, of new activations, as well as savings, thanks to Perform performance plan and the S & amp; P: these economies accounted for last year’s 500 million euros.