Engie Sa Ord

polite request, please, if you could limit your questions to one or two only. And with that, over to Catherine. Thank you.

Thank you, RTN. Good evening, everyone. I want to start today's presentation by highlighting the strong progress NG has made on the execution of our strategic plan that we announced in May. This was a plan designed to build a strong foundation for long-term earnings growth and a sustainable dividend, while maintaining a strong balance sheet for the group. As a reminder, under this plan, we are exiting non-core activities to build a simpler ENGIE. The disposal program is proceeding at pace, and the recent equants announcement is indeed a major milestone. enabling Engie to reallocate capital into core activities and capture the many investment opportunities we see, particularly in renewables. We are also working to enhance the efficiency of the group through a rigorous performance plan, and very importantly, we are ensuring that all our actions are driven by ENGIE's climate ambition of net zero by 2045 across all three scopes. I am very pleased to say that we have made strong progress across each of these areas, and crucially, this has been achieved alongside a very strong nine-month performance. In addition to executing on the strategic plan, We are taking actions to maximize operational availability of our generation assets to capture the commodity price tailwinds. We are optimizing performance across a mix of assets, all of which have exposure to the power price environment. And where possible, we have accelerated hedging for actual production for future years And we will give you a full update on this at the year-end results when we provide a three-year guidance to 2024. Turning now to the announcement that we made last week, where we entered into exclusive negotiations with BUIC for the sale of 100% of equants. Bouygues' proposal was indeed the most compelling offer, taking into account all criteria, including financial valuation. Thanks to the quality and strategic fit of the assets, Bouygues intends to create a world leader in multi-technical services anchored in France. And on the social front, Bouygues has agreed not to implement any forced redundancy plans in France and Europe for five years, and to create 10,000 additional jobs over five years. We truly believe that this operation will offer strong development opportunities for all Equance employees. With an enterprise value at 7.1 billion euros, this is among the largest caveats in Europe and a testament to our ability to deliver complex projects. The next steps include consultation with relevant employee representative bodies, and the transaction is subject to regulatory approvals and customary closing conditions. In line with the plan that we communicated, it is expected to close in the second half of next year. Alongside the other previously announced disposals, such as four countries exit year to date, we have made significant progress towards exiting non-core activities. The speed of execution has been facilitated by the tireless work and commitment of our teams, and whom I would like to sincerely thank for their contribution. Turning now to the nine-month results. I am very pleased to report another strong quarter for ENGIE, continuing the trend of solid performance from the start of this year. EBIT increased to 4.1 billion euros, up 57% on an organic basis. This strong performance was supported by measures that we put in place, enabling us to rebound rapidly from COVID, in line with the progressive recovery in economic activity levels, and by strong operational performance with high level of asset availability. In particular, in Belgium, when nuclear availability of 92% led to much higher levels of output. Our results benefited from temperature and price effects. Our performance plan continued to deliver results across the board, underpinned by proactive management actions on loss-making entities, procurement savings, and operational excellence. As a result, we have upgraded the 2021 guidance Engie now expects to deliver higher earnings in the full year than previously communicated. This reflects a very strong performance in the nine months and the continued improvement in market conditions throughout the year for nuclear and French hydro production, as well as a positive volume effect from the Belgian nuclear assets. Engie now expects net recurring income group share in the range of 3.0 to 3.2 billion in 2021, based on indicative EBIT range of 6.1 to 6.5 billion euros. Moving to operational progress across the four global business units, in renewables we have commissioned 3.7 gigawatts in the last 12 months, And I will cover ENGIE's progress in renewables in more detail shortly. Energy solutions benefited from a strong recovery from COVID and activity levels are in line with expectations. In our network GBU, we started commercial operation at the 1,000 kilometer Guala Azul power line in Brazil. And in termo, we progressed on coal exit with completion of the sale of Jorge Lacerda in Brazil. In supply, where the French government announced a tariff freeze for regulated customers from the 1st of November until the end of June next year, the government has proposed an amendment to the 2022 budget law with a view to compensating energy and other suppliers for loss in revenue due to the regulated gas tariff freeze. And this amendment, when voted through, is expected to keep ENGIE economically neutral while enabling the group to recognize revenues and margins. Tackling climate change is at the heart of our group strategy. ENGIE is committed to accelerating the transition to carbon neutrality with our target to be net zero by 2045 across all scopes, And in line with this strategy, I am proud to say that Engie is one of the founding members to join the First Movers Coalition, which was launched last week at COP26. By joining this coalition, Engie commits to buying low-carbon equipment to help develop decarbonized supply chains, which is crucial to reducing global emissions. In the last nine months, we have commissioned 1.8 gigawatts of renewables covering solar, onshore and offshore wind assets. And we are on track to commission 3 gigawatts in 2021. In France alone, we commissioned 27 projects in solar and wind totaling around 300 megawatts, reinforcing a leadership position in renewables with install capacity of nearly 8 gigawatts. In addition, we signed green corporate PPAs for a total volume of 1.9 gigawatts in nine months compared to 1.5 gigawatts for the full year 2020 to provide major industrial and technology companies with renewable power, supporting them on the path to decarbonize their own operations. So today, Engie has 33 gigawatts of renewables in operation with strong O&M capabilities underpinned by our expertise in commercializing renewables. We are accelerating investment in this area while bringing our industrial and energy management approach. And in line with our strategy, we will continue to invest in our key markets where we can develop complementary asset portfolios. In summary, Our objective is to reach 50 gigawatts by 2025 and 80 gigawatts by 2030. And importantly, we intend to achieve this while maintaining a consistently disciplined approach and a strong focus on returns.

And now, over to you, Judith. Thank you, Catherine, and good evening, everyone. It's great to be here with you. I would like to start by highlighting the importance of the equine announcement from a financial perspective. We are very pleased with the 7.1 billion euros enterprise value. This now clearly reflects the value of this great business with opportunities for both growth and margin improvement. These activities were less aligned to our business model but will greatly benefit from being part of the big group. On completion, this transaction will significantly simplify Engie. It will enable us to focus our management time and capital to core activities, notably to renewables, to drive long-term earnings growth and shareholder returns. I would like to thank the teams for their tremendous work on this important step. Turning now to our very strong results for the last nine months. EBITDA and EBIT have increased by 23% and 50% respectively. I'm particularly pleased with an organic EBIT growth of 57%. The negative foreign exchange impact of minus 106 million euros was mostly due to the BRL and USD depreciation versus the euro. The scope effect was limited at negative 25 million euros. We delivered strong cash flow generation, with CFFO increasing by 1 billion euros. Net financial debt increased, primarily driven by growth investments. Given the increase in earnings, this did not affect our credit metrics, which remain in line with our targeted rating. Let's now take a closer look at the last nine months' organic performance by Activity. Except for thermal, all activities grew organically. Before I discuss the operational drivers, let me go through the following key favorable external effects. Firstly, COVID restrictions were less stringent compared to last year, and our teams have worked tirelessly to adapt to this new environment. This led to a very good rebound, mainly in client solutions, other, and supply. Secondly, colder temperatures in 2021 supported the contribution of networks, supply, and others. In France alone, the total temperature effect was 283 million euros positive year on year. And thirdly, the price environment had mixed effects. On the positive side, higher power prices fueled higher contribution for nuclear and renewables. For example, outright power generation from nuclear and hydro in Belgium and France benefited from a price effect of over €300 million. million euros. On the flip side, thermal was impacted by a negative timing effect due to market conditions for gas power plants in Europe and by a drop in energy margins in Chile. In addition to these external effects, on the next slide, you will see how operational progress and other effects contributed to this organic growth. Renewables benefited from further positive GFOM rulings in the third quarter 2021 in Brazil, which allow us to recover past energy costs. These resulted from constructive exchanges with the regulator by our teams. Wind and solar assets delivered a good performance with overall higher volumes, in particular thanks to the commissioning of new capacity. These positive effects were partially offset by the impact of the Texas extreme weather event in the first quarter of 2021. In networks, results increased with higher contribution from power lines and from TAG in Brazil. This was partly offset by lower RAB remuneration rates in France. Client solutions showed strong commercial progress, both for energy solutions and for equines. but their EBIT contribution was also impacted by some loss-making activities as well as innovation businesses with higher development costs. Thermal benefited from positive one-offs mainly in 2021 and from higher ancillaries. Our teams also reduced internal unplanned unavailability by around 10%, which is a noteworthy operational achievement. Supply was impacted by the reversal of 2020 positive one-offs and by lower margins in Belgium. For nuclear, our Belgian assets reach an excellent availability of 92%, reflecting substantial operational improvements as well as lower maintenance works. DNA was lower following the 2020 impairment. In line with existing profit-sharing agreements in Belgium, nuclear contribution taxes increased. Activities reported in others were impacted by the reversal of 2020 positive one-offs for GEM and by the lower contribution of GTT after a particularly strong 2020. Finally, Our performance plan continues to deliver results across the board, allowing us to confirm our 2021 full-year target of 100 million euros EBIT contribution. Turning now to investments, year-to-date, we invested 2.9 billion euros in growth capex. This was focused investment in line with our net zero target by 2045 and with the framework we presented in May. 37% was allocated to renewables, 33% to networks, and 20% to energy solutions. More than 90% was invested organically. Turning to CFFO, which was 5.3 billion euros in the first nine months of 2021. CFFO was up 1 billion euros year on year, mainly driven by the following. First, operating cash flow was 1.2 billion euros higher, reflecting the EBITDA increase. Second, the overall change in working capital requirements was flat. There was a positive change from energy management activities, largely driven by rising gas prices, leading to a positive effect from margin calls. This was linked to gas net buyer positions and was partly offset by a negative impact from an increase in gas inventory. At the same time, the change in working capital requirements for other activities was negative. This was mainly because of margin calls in our French hydro affiliate CNR due to power selling positions with increasing power prices. Moving to our balance sheet, net financial debt increased with growth capex and dividends exceeding CFFO and disposals for the period. On disposals, I should mention that we still expect the 1.1 billion euros proceeds from the GRT gas partial disposal by the end of 2021, which are not included in this bridge. In addition, the reduction in net debt from equants is expected at closing in the second half of 2022. Regarding credit metrics, at the end of the third quarter, the net financial debt of EBITDA ratio was 2.4 times stable since year end 2020. The economic net debt to EBITDA ratio stood at 3.6 times lower than at year end 2020 and in line with our target ratio of below or equal to four times. To conclude, let me take a step back and remind you of the value creation framework we presented in May. Over the first nine months of 2021, we continued driving simplification, notably, of course, with the equines announcement, improving our business mix with focused growth investment on our key priorities, enhancing performance by confirming our 100 million euros net EBIT contribution target for 2021. We delivered a very strong nine-month 2021 financial performance. Lastly, we are, of course, very happy to upgrade our 2021 guidance given the very strong nine-month results and the tailwinds we are operationally able to capture. Before handing over to Catherine for the conclusion, again, I would like to take this opportunity to thank our teams for their tireless commitment in achieving this performance. Catherine, back over to you.