Document 3

Transformation Plan
for Energy Transition
Didier HOLLEAUX, Executive Vice President
Profile
 ENGIE ID
A global and diversified footprint* card

€66.6 billion ACTIVITIES IN 153,090 EMPLOYEES 112.7 GW

OF REVENUES IN 2016 70 COUNTRIES ACCROSS THE WORLD
OF INSTALLED POWER
PRODUCTION CAPACITY
133,770 emp.
4,350 emp. 2016 rev.: €52.7 billion 3,130 emp.
2016 rev.: €4.7 billion 44.7 GW installed** 2016 rev.: €2.9 billion
11.7 GW installed** 7.5 GW installed**
Europe*** 1,380 emp.
North America 2016 rev.: €0.5 billion Asia
26.3 GW installed**
Middle East

6,235 emp.
2016 rev.: €3.9 billion 400 emp.
3,825 emp.
17.2 GW installed** 2016 rev.: €0.3 billion
2016 rev.: €1.6 billion
1.4 GW installed**
Latin America 3.9 GW installed**
Africa Oceania
¨* Figures as of 31 December 2016
** Installed capacity at 100%
*** Including Turkey
**** Including Mexico

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 ENGIE
An organization close to customers and territories ID card

24 Business Units
UK

Benelux

France (8 BUs)
Northern Europe
19 géographical BUs GRDF France B2B Central & Southern
GRTgaz France B2C
Elengy France Renewable Energy
They gather the Group’s
activities on a dedicated North America Storengy France Networks
China
territory
Generation Europe
Midlle East, Southern &
Central Asia, Turkey
Latin America
Africa
Asia Pacific
5 global BUs Brazil

Global Energy GTT Tractebel Exploration & Global LNG

Management Production

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Strategy
An energy revolution is ongoing

The new energy world is characterized by decarbonization, decentralization

and digitalization (the 3 “D”).

DECARBONIZATION DECENTRALIZATION DIGITALIZATION

Worldwide renewable Decentralized solutions Digital disrupts energy

energies: annual to more than double by systems and improves
additional capacity to 2030 customer offers
grow by +70% in 2030
vs 2015

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A strategy in line with our environnement’s evolution

ambition To be a world leader in energy transition

GAS CHAIN

EBITDA COI
REDUCE EXPOSURE TO CONTRACTED / REGULATED BUSINESS(1) 3,5 GEUR 2 GEUR
COMMODITY PRICES EBITDA > 85%

CUSTOMER SOLUTIONS
DEVELOP CUSTOMER
objectives 2018 SOLUTIONS
EBITDA growth > 50% EBITDA COI

2 GEUR 1,5 GEUR

FOCUS ON LOW CO2 ACTIVITIES(2) EBITDA > 90% CENTRAL GENERATION

EBITDA COI

4 GEUR 2,5 GEUR

pilars for RE-SHAPING PREPARING

THE PORTFOLIO THE FUTURE
transformation
plan 2016-2018
IMPROVING ADAPTING
PERFORMANCE THE GROUP
(1) Exclude merchant power generation, E&P and LNG supply and sales
(2) Low CO2 : renewables, gas, services

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Transformation plan
Re-shaping the portfolio Re-shaping the
portfolio

REPOSITIONING AIMS LOOKING AHEAD

AROUND THE 3 TO2018
GROWTH DRIVERS

LOWERING EXPOSURE TO COMMODITIES PRICES.

LOW CO2 POWER GENERATION
To be in control of our destiny. Divest coal, oil, merchant activity. Focus
(MOSTLY CONTRACTED)
nuclear activity on services.

DEVELOPING CUSTOMER SOLUTIONS

CUSTOMER SOLUTIONS
Mostly BtoB and BtoT(1)

DEVELOPING SOLUTIONS WITH THE LOWEST CO2 LEVELS

GLOBAL INFRASTRUCTURES Both in gas and Power, tomorrow in Hydrogen

PORTFOLIO ROTATION PROGRAMME TIGHTLY-FOCUSED INVESTMENTS

• Non recourse project finance used
Target G€15 reduction in net debt Target G€22 in investments, including G€14(2) in growth(3) when available for major asset
investment.
• All other financing is done and
2016-2018 2016-2018 managed centraly (except when
G€15 G€14 prohibited by tax or regulation).
• Allows ENGIE to optimize the cost of
financing and the use of green bonds.
(1) BtoT or “Business to Territories” : offers dedicated to authorities and investors in city and land planning and construction
(2) Including G€1 in investments in innovation and digital
(3) Net of DBSO and excluding E&P

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Low CO2 power generation (1/2) Re-shaping the

Installed ENGIE capacity

portfolio

by energy source*

Other
• 112.7 GW of total non-renewable
installed Coal 4.5%
9.4%
power-production
Nuclear 5.7%
capacity Solar 0.7%
Biomass & biogas 0.9% Natural gas
• Renewable energy : Wind 4% 112.7 57.9%
more than 20% of GW
Group’s generation Hydro
capacity 16.9%

High CO2 capacity has been reduced to less than 10% in 2017.

* Including 100% of capacity of assets held by the Group at December 31, 2016, regardless of the actual holding rate.

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Low CO 2 power generation (2/2) : nuclear Re-shaping the
portfolio

ENGIE owns and operates 6 GW in Belgium

Life extension post 2025 would require a change in law.

ENGIE’s opinion is that investing in new nuclear plants is no longer easy for private companies alone.

ENGIE provides all services to the nuclear industry (engineering, construction, maintenance, commissioning,
fuel management, dismantling,…), including ITER

ENGIE develops partnerships with strong partners

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Heating & Cooling (1/2) : Ohio State University Re-shaping the
portfolio

CLIENT’S CHALLENGE
Position OSU as international leader
in sustainability

ENGIE’S SOLUTION
Innovative 50-year public-private partnership deal to
 District energy operation of a university campus with over operate and manage OSU’s Columbus campus utility
410 buildings system comprising electric, steam, heating, natural gas and
 Selected over a 2-year period as the top bidder amongst 40 chilled water facilities
participants in the RFI(1) phase

CONTRACT PERIOD
CLIENT’S BENEFITS
50 years 25% committed energy consumption reduction in 10 years
INVESTMENT
1.2 B$

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Heating & Cooling (2/2) : Middle East Re-shaping the
portfolio

Qatar (44% stake in Qatar Cool):

Bahrain (90% stake):
1 power plant
3 power plants (West Bay x2, Pearl) 71 District Cooling plants
0.1 GWc(1) 0.6 GWc(1) ~3.5 GWc installed capacity

UAE:
90% EBITDA
63 power plants
(Abu Dhabi – 39 ; Dubai – 18 capacity-indexed
North UAE – 6)
2.6 GWc(1)
Solid off-takers
Saudi Arabia (25% stake 60% of revenues from
in Saudi Tabreed): Oman (60% stake in government bodies
2 power plants (Aramco, Tabreed Oman):
Jabal Omar) 2 power plants (KOM,
0.2 GWc(1) Oman military college) 25 years
0.1 GWc(1) contract lifetime

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Improving performance Improving
performance

The LEAN 2018 programme aligns the cost base with strategy
and catalyses internal change

90% OF THE ENERGY-SAVINGS TARGET

SOME ACHIEVEMENTS IN 2017
(G€ 1.2) IDENTIFIED

NORAM BU
The BU's head office
was restructured to
adjust once again to
the business portfolio
€G 1.1 identified
€G 1.2
(net increase in €G 0.7 of which has
EBITDA)
been achieved MESCAT BU UK BU
Change in supplier Services and Power
to maintain thermal operations integrated
plants into a single
management
structure

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Preparing the future Preparing
the future

AIMS

Creating the activities of the future : Key Programs Innovation and digitalisation
Demand • Detect and explore emerging technologies INNOVATION
Green gas
management
• Deploy new business models AND DIGITALISATION
Decentralised
Hydrogen • Build closer ties with start-ups
energies
• Encourage the internal innovation culture
1,5G€
Green
mobility
Low-cost
storage • Digitise to enrich the customer experience and optimise the Investments over the
business processes plan’s duration
Smart Energy
Buildings communities
• Create “digital-native” business models

KEY POINTS CORPORATE & CAPITAL SIZE

Key Programs Incubation As competitive advantage in global market
Green hydrogen 30 projects hosted to date
Offshore wind • Many several markets ; no one size fits all.

ENGIE New Ventures • Size allows to pay for R&D and Innovation costs, and to gain a
ENGIE Fab competitive advantage on global markets where the same
Study of additional sources of Stakes owned in 14 start-ups solutions can be replicated everywhere. For instance in heating
growth over a 5-10 year period and 9 funds as at end-June 2017 & cooling our leadership position allow ENGIE to keep expertise
and technological advance.
ENGIE Digital (examples) Acquisitions
Focused on high-potential businesses • But some markets are fragmental. For instance in services,
Darwin renewable infrastructures management platform
advantage is more through agility, local teams and capacity to
Delta predictive maintenance project EV-Box, Icomera, etc.
chose where to be present.

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Adapting the Group Adapting
the Group

A complete set of initiatives and solutions to support, advise,

train and assist, to foster the transformation process
AIMS
Simple and collaborative Shared Talent Decentralised
Tightly-connected organisation TARGETS
environment objectives attraction capacity leadership

KEY POINTS PERSONNEL FOSTERING AND ACQUISITION

Managers committed to the Group's
- Leadership Model & Co.Leaders ~ 22 000 recruitments in 2018
transformation

Providing support to employees and

attracting talents - ENGIE Mobility Significant needs in growing activities
• Maintenance technicians in BtoB and BtoC,
Listening to stakeholders to continually
- ENGIE & Me
• Renewable energy operation and maintenance technicians
improve • Facility management managers
• Business developers
Strategic dialogue run to steer the - Executive Leadership Sessions
transformation by BU Smaller volumes but critical new skills to develop
• Renewable energy experts (wind, biomass, solar ...)
NewCorp • Nuclear dismantling specialists
adapted to Group’s new challenges - Reshaping the Head Office of the Group
• Energy managers
• Digital experts (data scientist, analyst, security, BIM
Mobilising top management - ENGIE 50 community modeler)

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Prospect of gas business
A growing world gas demand

IEA (2017)
Gas demand (Gm3)

Emerging countries
Rest of the world

Many expert studies (including the IEA) confirm that gas will account for a quarter in the energy mix
in 2040, all uses combined.

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A major role for gas in energy transition

Replace coal with gas to

A lever to fight against
produce electricity reduces CO2
climate change emissions by 60%

CCGT reach their full capacity in

An ideal « partner » for Hour one hour, unlike several hours or
renewable energies days for nuclear or coal power
plants.

Replace diesel with gas allows to

A solution to improve reduce :
air quality • 100% SOx emissions
• 90% NOx emissions
• 99% fine particles

A key role in the energy transition, replacing coal and oil, and essential in the
future renewable energy mix.

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Biogaz – biomethane : significant potential for development

A favourable global context

In 10 years :
• Increase in world population 9%
• Increased in waste production 70%

Biogaz and biomethane,

a solution

To the need of clean energy production and storage

To the major problem of waste incineration and energy recovery
To the development of sustainable agriculture
ENGIE sees strong development potential in 1st and 2nd generation Biogaz and Power-to-Gas + Methanation

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Hydrogen : a huge and promising market

Global market outlook for 2050

In a +2°C scenario, hydrogen could represent :

18% 6 billion tons 2 500 billon $ 30 million

energy
CO2 annual decrease turnover jobs creation
demand

Important steps by 2030

1 out of every 10 vehicles sold uses hydrogen in the precursor states
(California, Japan, Deutschland, South Korea)

14 million tons of hydrogen to produce heat for industrial use

Huge potential to replace grey hydrogen in industry, mobility and energy

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Hydrogen : projects under development

JUPITER 1000

• First industrial demonstrator of Power to Gas with a power

rating of 1 MWe for electrolysis and a methanation process
with carbon capture.
• Green hydrogen will be produced using two electrolysers
involving different technologies, from 100% renewable
energy.
• The installation will be based on an innovative mathanation
technology and the CO2 will be captured on a nearby
industrial site.

OTHER PROJECTS

• Zero Emission Valley, France : developing a network of hydrogen refueling stations over a territory, supported notably by the deployment of
H2 range extenders kits from Symbio Cell.
• Several prospects of large scale renewable hydrogen production to serve industrial players’ needs.
• Hyport : production, distribution and storage of green hydrogen for Toulouse and Tarbes airports, France
• Several prospects globally to develop zero emission mobility solutions integrated with renewable supply.
• Launch of hydrogen bus line in the city of Pau, France

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ENGIE’s priorities for gas in energy transition

Replace coal with gas in power plants

(1 900 GW capacity in the world)

Supplement renewables to provide flexibility to the electrical system

(manage peaks)

Focus on gas infrastructures and customer solutions

(divest LNG and EPI)

And make the gas green !

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Questions & answers