Earnings Release • May 3, 2010
Earnings Release
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May 3, 2010
1st quarter 2010
Revenues1
: EUR 23.8 billion EBITDA: EUR 5.2 billion Net debt: EUR 30.3 billion
| Unaudited data 1 In EUR billions |
March 31 2010 |
March 31 2009 |
Total change |
|---|---|---|---|
| Revenue | 23.8 | 25.6 | -6.8% |
| EBITDA | 5.2 | 5.3 | -2.1% |
The revenues of the first three months of 2010 are mainly due to:
EBITDA for the period came to EUR 5.2 billion, for a total variation of - 2.1% and a change in organic growth of - 4.1% compared with the March 31, 2009 figure. This slight drop, which was smaller than anticipated, is notably due to a basis of comparison in 2009 that benefited from positive non-recurrent items. Growth in the first quarter of 2009 was 15% compared with the same period the previous year. EBITDA growth amounted to + 11.13% over two years.
This performance allows the Group to confirm its target for higher EBITDA in 20102 than in 2009.
EBITDA for all business lines is up for the period, except for Global Gas & LNG, which suffered from the decline in natural gas spot prices and from a comparison with the first quarter of 2009, which benefited from unusual opportunities for arbitrage.
Net debt stood at EUR 30.3 billion at the end of March 2010, nearly stable in relation to the EUR 30 billion at the end of 2009 and down EUR 0.3 billion adjusted for exchange rate fluctuations.
Gearing at the end of March 2010 further improved to 43.7%, compared with 45.7% at the end of 2009.
1 Reported GDF SUEZ unaudited revenues, EBITDA and net debt for 2010 were reviewed by the Board of Directors on May 3, 2010.
2 This objective is based on scenarios that include average climate forecasts, no substantial changes to regulations or the macro-economic environment and the following 2010 assumptions: average Brent: \$ 74/barrel, average electricity baseload Belgium € 48/MWh, average Zeebrugge natural gas price € 15/MWh.
Gérard Mestrallet stated "The results for the 1st quarter of 2010 show that GDF SUEZ's business model is a strong one in a quickly-changing energy context. All of our business lines improved their results – signs of recovery can be seen – except for the Global Gas & LNG business line, which had to cope with a delinking of the prices of spot gas and the price of oil. In total, the Group improved its ratio EBITDA margin on turnover by one point over the quarter, particularly thanks to the cost reduction efforts in the Efficio plan. At the same time, the Group's financial structure was strengthened. We confirm our target of an annual EBITDA 2010 higher than 2009".
| In EUR millions | Revenues 1st qtr. 2010 |
Revenues 1st qtr. 2009 |
Total change |
Organic growth |
|---|---|---|---|---|
| Energy France (1) | 5,712 | 6,363 | -10.2% | -10.2% |
| Energy Europe & International | 8,643 | 8,951 | -3.4% | -6.1% |
| Benelux / Germany (1) | 4,198 | 4,199 | 0.0% | -1.6% |
| Europe | 2,324 | 2,676 | -13.2% | -15.5% |
| Latin America | 655 | 466 | 40.5% | 12.2% |
| North America | 1,038 | 1,199 | -13.5% | -12.3% |
| Middle East, Asia & Africa | 428 | 411 | 4.2% | 6.7% |
| Global Gas & LNG(2) | 2,480 | 3,439 | -27.9% | -28.0% |
| Infrastructures(2) | 315 | 260 | 21.3% | 21.3% |
| Energy Services | 3,606 | 3,728 | -3.3% | -2.4% |
| Environment | 3,073 | 2,823 | 8.9% | 6.2% |
| GDF SUEZ Group | 23,829 | 25,564 | -6.8% | -7.9% |
(1) Including reclassification of + EUR 9 million in Q1 2009 representing the transfer of Photovoltech from Benelux/Germany to Energy France
(2)Total revenues, including intra-Group services, amounted to EUR 6,794 million for the Global Gas & LNG business line and EUR 1,832 million for the Infrastructures business line.
The total change in revenues was -EUR 1,735 million:
| In EUR millions | 1st qtr. 2010 | 1st qtr. 2009 | Total change | Organic growth |
|---|---|---|---|---|
| Revenues | 5,712 | 6,363 | -10.2% | -10.2% |
At the end of March 2010, the Energy France Business Line generated EUR 5,712 million in revenues, down -10.2% as compared to the 1st quarter of 2009.
The decline in sales revenue based on average climate conditions for the period came to -13.2% and is primarily explained by the full effect of the -11.3% decrease in regulated tariffs on natural gas for public distribution, which came into effect on April 1, 2009.
Revenues and margins during the 1st quarter of 2010 were adversely impacted (-EUR 58 million) by the inability to pass on full costs (natural gas supply and other non-material costs) in the regulated tariffs in France.
In compliance with the new Public Service contract, these tariffs were adjusted on April 1, 2010 (+9.7% increase) to cover supply and non-material costs.
Natural gas sales volumes for the period remained stable at 132.4 TWh (- 0.3 TWh), with the impact of market openings offset by more severe climate conditions in the 1st quarter of 2010 (climate-related variation of + 4.7 TWh). GDF SUEZ market share for residential customers as at the end of March 2010 was 90.5% while for business customers it was approximately 75%, very close to the figures for the end of 2009.
Electricity sales volumes reached 10.4 TWh, up + 7% thanks to the dynamic for attracting new customers. At the end of March 2010, the portfolio of electricity customers for the business line surpassed one million customer sites for the first time, of which more than 800,000 were residential customers.
In addition, the business line's electricity production came to 9 TWh, up + 8.4% as compared with the 1st quarter of 2009, thanks to the increased thermal electricity generation and a return to more favorable hydroelectricity generation conditions.
| In EUR millions | 1st qtr. 2010 | 1st qtr. 2009 | Total change | Organic growth |
|---|---|---|---|---|
| Revenues | 8,643 | 8,951 | -3.4% | -6.0% |
As at March 31, 2010, the division's revenues were stable at EUR 4,198 million compared with the same period in 2008, with a decline in organic growth of - 1.6% (though a positive impact from changes in scope tied primarily to the proportional consolidation of Stadtwerke Wuppertal in Germany). This evolution is explained by unfavorable prices effects, given that electricity and gas sales volumes are still on the rise.
Electricity sales volumes grew by 7.1% to EUR 2,791 million as compared with the 1st quarter of 2009 and represent a sales volume of 33.7 TWh, an increase of 15% (+ 4.4 TWh).
Electricity production, at 24.1 TWh, was up by 1.3 TWh.
In Belgium and Luxembourg, sales volumes were up by 0.3 TWh (+ 1.4%) to 18.6 TWh thanks to a pickup in demand from major accounts in Belgium. Nonetheless, revenues from electricity remain stable because of declining prices to industrial customers and the wholesale markets.
Electricity sales volumes in the Netherlands increased by 0.7 TWh (+EUR 27 million), or + 7%.
In Germany, electricity sales volumes increased by 1.9 TWh, primarily in the wholesale market, to reach EUR 317 million (+ 46%).
Finally, electricity sales volumes for the division outside Benelux-Germany grew by 1.5 TWh for revenues of EUR 260 million, reflecting sales in the wholesale markets, primarily in Hungary, the United Kingdom and France.
Natural gas sales totaled EUR 1,204 million as at the end of March 2010, down 13% from the EUR 1,381 million at the end of March 2009 due to unfavorable prices effects (- EUR 8.3/MWh on average), while sales volumes increased by +3.0 TWh (+ 9%), of which 0.6 TWh related to favorable climate conditions.
As at March 31, 2010, the Energy Europe division revenues came to EUR 2,324 million, down by 13% compared to March 31, 2009 and by 15% in terms of organic growth (positive exchange rate fluctuations). This evolution reflects a substantial drop in prices across all markets, while overall sales volumes increased in the context of favorable climate conditions.
The organic change in revenues resulted primarily from:
Revenues for the Latin America division came to EUR 655 million, up 41%. Organic growth came to 12%. Revenues benefited from positive changes in scope (+ EUR 79 million) following the merger of the Chilean entities and their global integration, and from the appreciation of the Brazilian real during the period (+ EUR 59 million).
Electricity sales came to 12.1 TWh, up 2.2 TWh in relation to 2009, while natural gas sales totaled 1.1 TWh, up by 0.1 TWh. The division's organic performance is mainly explained by increased revenues in Brazil (EUR 377 million, + 10% organic growth) thanks to the volumes sold under bilateral agreements and by increased sales in Panama, mainly from the Bahia Las Minas power plant.
As at March 31, 2010, revenues of the North American division totaled EUR 1,038 million, down - 13% compared with the same period in 2009. This evolution takes into account positive changes in Group scope related to the global integration of Astoria I (+ EUR 41 million), while exchange rate fluctuations were negative on the dollar (- EUR 62 million).
While sales of electricity increased to 13.4 TWh (+ 1.4 TWh, + 12%), natural gas sales volumes dropped to 17.5 TWh (- 2.2 TWh, - 11%). Revenues were down on an organic basis (- 12%), with average prices down by some 35% (after hedging).
As at March 31, 2010, the revenues of the Middle East, Asia & Africa division were EUR 428 million, up + 4% in gross terms and + 7% in organic terms (negative exchange rate fluctuations).
Electricity sales were 6.2 TWh, an increase of + 8.5% compared with the first quarter of 2009 thanks to recovering demand in Thailand and Singapore while prices weakness adversely impacted revenues for Baymina in Turkey, despite stable volumes.
| In EUR millions | 1st qtr. 2010 | 1st qtr. 2009 | Total change | Organic growth |
|---|---|---|---|---|
| Revenues | 2,480 | 3,439 | -27.9% | -28.0% |
| Revenues including intra-Group |
6,794 | 8,410 | -19.2% |
As at the end of March 2010, total revenues of the Global Gas & LNG business line, including intra-Group services, came to EUR 6,794 million, down - 19.2% in comparison with the end of March 2009.
Global Gas & LNG breakdown of sales revenues came to EUR 2,480 million, a decline in organic terms of - 28% from the end of March 2009.
The change in breakdown of sales revenues business line is explained mainly by:
These negative impacts are partially offset by average oil prices rising by + EUR 21/boe (average Brent price up from EUR 34.1/boe in the 1st quarter of 2009 to EUR 55/boe in the 1st quarter of 2010).
The business line's revenues also benefited from an improvement in external LNG sales, totaling 7.0 TWh at the end of March 2010 (7.5 cargoes3 ) notably in Asia (4 cargoes during the 1st quarter of 2010, for a total of 3.8 TWh; no cargoes during the 1st quarter of 2009) in comparison with 4.7 TWh at the end of March 2009 (5 cargoes), as well as the favorable impact of the related financial hedging.
| In EUR millions | 1st qtr. 2010 | 1st qtr. 2009 | Total change | Organic growth |
|---|---|---|---|---|
| Revenues | 315 | 260 | 21.3% | 21.3% |
| Revenues including intra-Group |
1,832 | 1,770 | 3.5% |
As at the end of March 2010, total revenues of the Infrastructures business line, including intra-Group services, amounted to EUR 1,832 million, an increase of + 3.5% over the same period in 2009.
Growth in total revenues remains supported by:
For the period, breakdown of sales revenues for the Infrastructures business line came to EUR 315 million, up + 21.3% in comparison with the 1st quarter of 2009. This improvement was due mainly to the development in volumes distributed by GrDF on behalf of third parties as a result of the market opening. The total quantity was 19.9 TWh, a + 5.3 TWh increase over March 31, 2009.
| In EUR millions | 1st qtr. 2010 | 1st qtr. 2009 | Total change | Organic growth |
|---|---|---|---|---|
| Revenues | 3,606 | 3,728 | -3.3% | -2.4% |
As at March 31, 2010, revenues for the Energy Services business line totaled EUR 3,606 million, down 3.3% from the first quarter of 2009 (2.4% in organic variation).
In France, services activities (Cofely France) slowed by - 2.2% in organic terms (- EUR 25 million), suffering from lower prices and reduced volume of workloads on service contracts. Installation and maintenance activities were comparable to levels in the first quarter of 2009 thanks to an increase in billings for Inéo (+ 5.9%), which offset decreased sales for the HVAC sector (climate engineering and refrigeration, - 10%) and Endel (- 5.5%).
3 Including one cargo sold in Chile and consolidated in proportional integration at 50% to equal half of one externally sold cargo.
In Belgium, the organic variation was - 5.6% (- EUR 22.9 million). Economic conditions in the installation sector, combined with a lack of business in the energy and airport sectors, explain this decline.
Activity in Holland showed an organic decrease of - 4.9% (or - EUR 14.1 million). Governmental projects in the infrastructures sector did not compensate for the contraction of private customers demand in all regions.
Tractebel Engineering continues its sustained development in all areas, with organic growth of + 9.2% (or + EUR 10.0 million).
Outside France and Benelux, the business line's activities were down - 3.2% in organic terms in Northern Europe (or - EUR 9.6 million), decreasing in all countries except Switzerland, Hungary and the United Kingdom; business in the UK was supported by construction work for the London Olympic Games contract. In the countries of Southern Europe, the level of activity was down by - 5.4% (or - EUR 23.9 million). This drop occurred mainly in Spain, where the installation market remains depressed. Finally, revenues generated by International Overseas grew organically by + 3.5% (or + EUR 4.4 million) thanks to a favorable volume effect and growing production by the Prony Energies plant.
| In EUR millions | 1st qtr. 2010 | 1st qtr. 2009 | Total change | Organic growth |
|---|---|---|---|---|
| Revenues | 3,073 | 2,823 | 8.9% | 6.2% |
SUEZ ENVIRONNEMENT generated revenues of EUR 3.1 billion as at the end of March 2010.
SUEZ ENVIRONNEMENT detailed its revenue trend and operating performance in its April 29, 2010 publication.
- August 10, 2010: Publication of the GDF SUEZ 2010 half-year results
| REVENUES | Change 1st qtr. |
||||
|---|---|---|---|---|---|
| In EUR millions | 1st qtr. 2010 | % | 1st qtr. 2009 | % | 2010/2009 |
| France | 10,285 | 43.2% | 10,919 | 42.7% | -5.8% |
| Belgium | 4,032 | 16.9% | 3,776 | 14.8% | 6.8% |
| Subtotal France-Belgium | 14,317 | 60.1% | 14,695 | 57.5% | -2.6% |
| Other European Union | 6,189 | 26.0% | 7,618 | 29.8% | -18.8% |
| Other countries of Europe | 306 | 1.3% | 305 | 1.2% | 0.3% |
| Subtotal Europe | 20,811 | 87.3% | 22,618 | 88.5% | -8.0% |
| North America | 1,172 | 4.9% | 1,376 | 5.4% | -14.8% |
| Subtotal Europe and North | |||||
| America | 21,983 | 92.3% | 23,993 | 93.9% | -8.4% |
| Asia, Middle East and Oceania | 904 | 3.8% | 811 | 3.2% | 11.5% |
| South America | 753 | 3.2% | 553 | 2.2% | 36.3% |
| Africa | 188 | 0.8% | 207 | 0.8% | -9.2% |
| TOTAL REVENUES | 23,829 | 100.0% | 25,564 | 100.0% | -6.8% |
| In EUR million | 1st qtr. 2010 | 1st qtr. 2009 | Organic growth |
|---|---|---|---|
| Revenues | 23,829 | 25,564 | |
| Changes in Group structure Exchange rate fluctuations |
-308 | -119 94 |
|
| Comparable basis | 23,521 | 25,539 | -7.9% |
One of the leading energy providers in the world, GDF SUEZ is active across the entire energy value chain, in electricity and natural gas, upstream to downstream. It develops its businesses (energy, energy services and environment) around a responsible-growth model to take up the great challenges: responding to energy needs, ensuring the security of supply, combating climate change and optimizing the use of resources. GDF SUEZ relies on diversified supply sources as well as flexible and high-performance power generation in order to provide innovative energy solutions to individuals, cities and businesses. The Group employs 200,650 persons worldwide and achieved revenues of €79.9 billion in 2009. GDF SUEZ is listed on the Brussels, Luxembourg and Paris stock exchanges and is represented in the main international indices: CAC 40, BEL 20, DJ Stoxx 50, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100, MSCI Europe and ASPI Eurozone.
This communication contains forward-looking information and statements. These statements include financial projections, synergies, cost-savings and estimates, statements regarding plans, objectives, savings, expectations and benefits from the transactions and expectations with respect to future operations, products and services, and statements regarding future performance.
Although the management of GDF SUEZ believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of GDF SUEZ securities are cautioned that forward-looking information and statements are not guarantees of future performances and are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of GDF SUEZ, that could cause actual results, developments, synergies, savings and benefits to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.
These risks and uncertainties include those discussed or identified in the public filings made by GDF SUEZ with the Autorité des marchés financiers (AMF), including those listed under "Facteurs de Risques" (Risk factors) sections in the Document de Référence 2009 filed by GDF SUEZ with the AMF on 6, April 2010 (under no: D.10-218). Investors and holders of GDF SUEZ securities should consider that the occurrence of some or all of these risks may have a material adverse effect on GDF SUEZ.
Press contacts:
Tel France: +33 (0)1 5704 2435 Tel Belgium: +32 2 510 7670 E-Mail: [email protected] Investor Relations contact:
Tel: +33 (0)1 5704 6629 E-Mail: [email protected]
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