EDF / 2018 Reference document

TABLE OF CONTENT2
2018 KEY FIGURES4
1. PRESENTATION OF EDF GROUP7
1.1 HISTORY AND DEVELOPMENT OF THE COMPANY8
1.2 ORGANISATION OF THE GROUP10
1.2.1 EDF ORGANISATIONAL CHART10
1.2.2 INTRA-GROUP CONTRACTS12
1.3 GROUP STRATEGY12
1.3.1 ENVIRONMENT AND STRATEGIC CHALLENGES12
1.3.2 PRIORITIES OF THE CAP 2030 STRATEGY14
1.3.3 INVESTMENT POLICY17
1.4 DESCRIPTION OF THE GROUP'S ACTIVITIES18
1.4.1 ELECTRICITY GENERATION ACTIVITY18
1.4.2 SALES AND SUPPLY ACTIVITIES IN FRANCE46
1.4.3 OPTIMISATION ACTIVITIES FOR EDF IN FRANCE50
1.4.4 TRANSMISSION AND DISTRIBUTION ACTIVITIES IN FRANCE51
1.4.5 INTERNATIONAL ACTIVITIES59
1.4.6 ENERGY SERVICES AND OTHER ACTIVITIES78
1.5 LEGISLATIVE AND REGULATORY ENVIRONMENT85
1.5.1 EDF AS A PUBLIC UNDERTAKING85
1.5.2 PUBLIC SERVICE IN FRANCE85
1.5.3 ELECTRICITY MARKET LEGISLATION86
1.5.4 GAS MARKET LEGISLATION92
1.5.5 PUBLIC ELECTRICITY DISTRIBUTION CONCESSIONS IN FRANCE93
1.5.6 REGULATIONS APPLICABLE TO THE ENVIRONMENT, NUCLEAR POWER, HEALTH, HYGIENE AND SAFETY IN FRANCE93
1.5.7 REGULATIONS ON WHOLESALE ENERGY MARKETS101
1.6 RESEARCH & DEVELOPMENT, PATENTS AND LICENCES102
1.6.1 R&D ORGANISATION AND KEY FIGURES102
1.6.2 R&D PRIORITIES104
1.6.3 INTERNATIONAL BUSINESS AND PARTNERSHIPS107
1.6.4 INTELLECTUAL PROPERTY109
1.7 COMMERCIAL PROPERTIES109
1.7.1 SERVICE-SECTOR REAL ESTATE ASSETS – EDF AND ENEDIS IN FRANCE109
1.7.2 EMPLOYER PARTICIPATION IN THE CONSTRUCTION EFFORT109
1.7.3 SUBSIDISED LOANS FOR HOME OWNERSHIP109
2. RISK FACTORS AND CONTROL FRAMEWORK111
2.1 RISKS TO WHICH THE GROUP IS EXPOSED112
2.1.1 RISKS ASSOCIATED WITH THE REGULATION OF ENERGY MARKETS114
2.1.2 RISKS RELATED TO THE COMPETITIVE AND GENERAL CONTEXT116
2.1.3 RISKS RELATED TO THE TRANSFORMATION OF THE GROUP118
2.1.4 RISKS RELATED TO THE GROUP'S OPERATIONAL PERFORMANCE119
2.1.5 SPECIFIC RISKS RELATED TO THE GROUP'S NUCLEAR ACTIVITIES122
2.2 CONTROL OF GROUP RISKS AND ACTIVITIES128
2.2.1 CONTROL ENVIRONMENT128
2.2.2 IMPLEMENTATION OF SYSTEMS FOR THE CONTROL OF RISKS AND ACTIVITIES132
2.3 DEPENDENCY FACTORS136
2.3.1 NUCLEAR FUEL CYCLE136
2.3.2 POWER PLANT DEVELOPMENT AND MAINTENANCE136
2.4 LEGAL PROCEEDINGS AND ARBITRATION138
2.4.1 LEGAL PROCEEDINGS INVOLVING EDF138
2.4.2 LEGAL PROCEEDINGS CONCERNING EDF'S SUBSIDIARIES AND HOLDINGS143
2.4.3 LITIGATION ARISING AFTER THE CLOSING OF THE 2018 FINANCIAL YEAR145
2.5 INSURANCE145
2.5.1 INSURANCE ORGANISATION AND POLICY145
2.5.2 USE OF CAPTIVE INSURANCE COMPANIES AND MUTUAL INSURANCE COMPANIES145
2.5.3 CIVIL LIABILITY INSURANCE (NOT INCLUDING NUCLEAR CIVIL LIABILITY)146
2.5.4 CIVIL LIABILITY INSURANCE FOR CORPORATE OFFICERS AND DIRECTORS146
2.5.5 DAMAGE INSURANCE (EXCLUDING NUCLEAR ASSETS)146
2.5.6 SPECIFIC INSURANCE FOR NUCLEAR FACILITY OPERATIONS146
2.5.7 PREMIUMS147
3. ENVIRONMENTAL AND SOCIETAL INFORMATION – HUMAN RESOURCES149
3.1 EDF'S COMMITMENTS IN THE AREA OF SUSTAINABLE DEVELOPMENT150
3.1.1 UNDERSTANDING STAKEHOLDERS AND THE ENVIRONMENT150
3.1.2 COMMITTED TO SUSTAINABLE DEVELOPMENT152
3.1.3 GOVERNANCE OF SUSTAINABLE DEVELOPMENT153
3.2 EDF'S CORPORATE SOCIAL RESPONSIBILITY GOALS158
3.2.1 COMMITTED TO CLIMATE ACTION158
3.2.2 COMMITTED TO HUMAN DEVELOPMENT161
3.2.3 COMMITTED TO SUPPORTING FRAGILE POPULATIONS166
3.2.4 COMMITTED TO HELPING EACH CUSTOMER CONSUME BETTER168
3.2.5 COMMITTED TO CONSULTATION172
3.2.6 COMMITTED TO BIODIVERSITY174
3.3 OTHER AREAS OF THE SUSTAINABLE DEVELOPMENT POLICY180
3.3.1 ADAPTING TO CLIMATE CHANGE180
3.3.2 OPTIMISING THE USE OF NATURAL RESOURCES AND PRESERVING THE ENVIRONMENT181
3.3.3 PAYING CLOSE ATTENTION TO PEOPLE188
3.4 FURTHER HUMAN RESOURCES CONSIDERATIONS195
3.4.1 PROFESSIONAL EXCELLENCE, EMPLOYMENT AND SKILL DEVELOPMENT195
3.4.2 PROVIDING THE CONDITIONS FOR WELL-BEING: ORGANISATION AND QUALITY OF WORKING LIFE199
3.4.3 COMPENSATION AND SOCIAL WELFARE: AN ATTRACTIVE EMPLOYER199
3.4.4 AN EMPLOYER ENGAGED ALONGSIDE ITS STAKEHOLDERS201
3.5 ETHICS, COMPLIANCE, TAX TRANSPARENCY206
3.5.1 ETHICS AND COMPLIANCE206
3.5.2 TAX TRANSPARENCY211
3.6 SPONSORSHIP213
3.7 NON-FINANCIAL RATING214
3.8 APPENDICES AND CORRESPONDENCE TABLES215
3.8.1 VIGILANCE PLAN215
3.8.2 UN SUSTAINABLE DEVELOPMENT GOALS217
3.8.3 TCFD RECOMMENDATIONS219
3.8.4 MATERIALITY MATRIX221
3.9 REPORTING SYSTEM AND METHODOLOGY223
3.9.1 REPORTING SYSTEM223
3.9.2 METHODOLOGY FOR SOCIAL AND ENVIRONMENTAL DATA223
3.9.3 INDICATORS227
3.10 REPORT BY ONE OF THE STATUTORY AUDITORS, APPOINTED AS INDEPENDENT THIRD PARTY233
4. CORPORATE GOVERNANCE237
4.1 CORPORATE GOVERNANCE CODE238
4.2 MEMBERS AND FUNCTIONING OF THE BOARD OF DIRECTORS240
4.2.1 MEMBERS OF THE BOARD OF DIRECTORS240
4.2.2 FUNCTIONING OF THE BOARD OF DIRECTORS258
4.2.3 BOARD OF DIRECTORS' COMMITTEES262
4.3 BODIES CREATED BY EXECUTIVE MANAGEMENT269
4.3.1 MEMBERS OF THE EXECUTIVE COMMITTEE269
4.3.2 PERSONAL INFORMATION ON MEMBERS OF THE EXECUTIVE COMMITTEE269
4.4 CONFLICTS OF INTEREST, ABSENCE OF CONVICTIONS OF THE MEMBERS OF THE ADMINISTRATIVE BODIES AND EXECUTIVE MANAGEMENT, CONTRACTS FOR SERVICES271
4.4.1 CONFLICTS OF INTEREST271
4.4.2 ABSENCE OF CONVICTIONS271
4.4.3 CONTRACTS FOR SERVICES271
4.5 SHAREHOLDING BY DIRECTORS AND TRADING IN EDF SECURITIES BY CORPORATE OFFICERS AND EXECUTIVES272
4.5.1 SHAREHOLDING BY DIRECTORS272
4.5.2 TRADING IN COMPANY SECURITIES272
4.6 COMPENSATION AND BENEFITS273
4.6.1 COMPENSATION OF CORPORATE OFFICERS273
4.6.2 STOCK OPTIONS – BONUS SHARES276
4.7 REPORT BY THE STATUTORY AUDITORS, PREPARED IN ACCORDANCE WITH ARTICLE L. 225-235 OF THE FRENCH COMMERCIAL CODE, ON THE REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE276
5. THE GROUP’S PERFORMANCE IN 2018 AND FINANCIAL OUTLOOK277
5.1 OPERATING AND FINANCIAL REVIEW278
5.1.1 KEY FIGURES278
5.1.2 ECONOMIC ENVIRONMENT280
5.1.3 SIGNIFICANT EVENTS OF 2018286
5.1.4 ANALYSIS OF THE BUSINESS AND THE CONSOLIDATED INCOME STATEMENTS FOR 2017 AND 2018288
5.1.5 CASH FLOW AND NET INDEBTEDNESS295
5.1.6 MANAGEMENT AND CONTROL OF MARKET RISKS299
5.1.7 INFORMATIONS ON INVOICE SETTLEMENT TIMES (ACCOUNT PAYABLE AND RECEIVABLE REQUIRED BY ARTICLE L. 441-6-1 OF THE FRENCH COMMERCIAL CODE)309
5.1.8 INFORMATIONS ON EXISTING BRANCHES REQUIRED BY ARTICLE L. 232-1 OF THE COMMERCIAL CODE309
5.2 SUBSEQUENT EVENTS310
5.3 CHANGES IN MARKET PRICES IN JANUARY AND FEBRUARY 2019311
5.4 OUTLOOK312
6. FINANCIAL STATEMENTS313
6.1 CONSOLIDATED FINANCIAL STATEMENTS314
CONSOLIDATED INCOME STATEMENT314
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME315
CONSOLIDATED BALANCE SHEET316
CONSOLIDATED CASH FLOW STATEMENT317
CHANGE IN CONSOLIDATED EQUITY318
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS322
6.2 STATUTORY AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS430
6.3 FINANCIAL STATEMENTS433
INCOME STATEMENT433
BALANCE SHEET434
CASH FLOW STATEMENT436
NOTES TO THE FINANCIAL STATEMENTS437
6.4 STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS490
6.5 TABLE OF RESULTS FOR THE LAST FIVE FISCAL YEARS493
6.6 DIVIDEND POLICY494
6.6.1 DIVIDENDS AND INTERIM DIVIDENDS PAID IN THE LAST THREE FISCAL YEARS494
6.6.2 DISTRIBUTION POLICY, INCREASED DIVIDEND494
6.6.3 UNCLAIMED DIVIDENDS494
6.7 SIGNIFICANT CHANGE IN THE FINANCIAL OR TRADING POSITION495
6.8 INFORMATION RELATING TO THE ALLOCATION OF FUNDS RAISED THROUGH GREEN BONDS ISSUED BY EDF495
USE OF PROCEEDS495
EVALUATION AND SELECTION OF ELIGIBLE PROJECTS FINANCED495
MANAGEMENT OF PROCEEDS495
REPORTING495
7. GENERAL INFORMATION ABOUT THE COMPANY AND ITS CAPITAL501
7.1 GENERAL INFORMATION ABOUT THE COMPANY502
7.1.1 COMPANY NAME, ADDRESS AND TELEPHONE NUMBER OF THE REGISTERED OFFICE502
7.1.2 TRADE AND COMPANIES REGISTRY, APE CODE502
7.1.3 DATE OF INCORPORATION AND TERM OF THE COMPANY502
7.1.4 LEGAL FORM AND APPLICABLE LEGISLATION502
7.2 INCORPORATION DOCUMENTS AND ARTICLES OF ASSOCIATION502
7.2.1 CORPORATE PURPOSE502
7.2.2 FINANCIAL YEAR502
7.2.3 STATUTORY DISTRIBUTION OF PROFITS502
7.2.4 RIGHTS ATTACHED TO SHARES503
7.2.5 ASSIGNMENT AND TRANSFER OF SHARES503
7.2.6 CHANGES TO THE ARTICLES OF ASSOCIATION, THE CAPITAL AND VOTING RIGHTS503
7.2.7 MEMBERS AND FUNCTIONING OF THE BOARD OF DIRECTORS503
7.2.8 SHAREHOLDER'S MEETINGS503
7.2.9 STATUTORY OR LEGAL PROVISIONS DELAYING A TAKEOVER OF THE COMPANY504
7.2.10 THRESHOLD CROSSINGS504
7.3 INFORMATION REGARDING CAPITAL AND SHARE OWNERSHIP505
7.3.1 AMOUNT AND CHANGES IN SHARE CAPITAL505
7.3.2 TREASURY SHARES AND SHARE BUYBACK PROGRAMME506
7.3.3 AUTHORISED BUT NON-ISSUED CAPITAL507
7.3.4 OTHER EQUITY SECURITIES508
7.3.5 NON-EQUITY SECURITIES508
7.3.6 INFORMATION ON THE SHARE CAPITAL OF ANY MEMBER OF THE GROUP SUBJECT TO A CONDITIONAL OR UNCONDITIONAL AGREEMENT508
7.3.7 PLEDGE OF THE COMPANY'S SHARES508
7.3.8 OWNERSHIP OF THE COMPANY'S CAPITAL AND VOTING RIGHTS509
7.3.9 AGREEMENTS WHOSE IMPLEMENTATION COULD LEAD TO A CHANGE OF CONTROL510
7.4 MARKET FOR THE COMPANY’S SHARES511
7.5 RELATED-PARTY TRANSACTIONS512
7.5.1 RELATIONS WITH THE FRENCH STATE512
7.5.2 RELATIONS WITH ENGIE (EX-GDF SUEZ)512
7.5.3 RELATIONS WITH PUBLIC SECTOR COMPANIES512
7.5.4 AGREEMENTS WITH FRAMATOME512
7.5.5 STATUTORY AUDITOR'S SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS513
7.6 MATERIAL CONTRACTS515
7.6.1 MATERIAL CONTRACTS ENTERED INTO IN 2018515
7.6.1 MATERIAL CONTRACTS ENTERED INTO IN 2017515
7.6.1 MATERIAL CONTRACTS ENTERED INTO IN 2016515
8. ADDITIONAL INFORMATION517
8.1 PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT AND THE CERTIFICATION518
8.1.1 PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT518
8.1.2 CERTIFICATION FROM THE PERSON RESPONSIBLE FOR THE 2018 REFERENCE DOCUMENT CONTAINING THE ANNUAL FINANCIAL REPORT518
8.2 AUDITORS – STATUTORY AUDITORS519
DELOITTE ET ASSOCIÉS519
KPMG SA519
8.3 DOCUMENTS AVAILABLE TO THE PUBLIC - LEI519
8.4 FINANCIAL COMMUNICATION CALENDAR519
8.5 CONCORDANCE TABLES520
8.5.1 CONCORDANCE TABLE WITH APPENDIX I OF (EC) REGULATION NO. 809/2004520
8.5.2 CONCORDANCE TABLE WITH THE MANAGEMENT REPORT522
8.5.3 CONCORDANCE TABLE WITH THE ELEMENTS OF THE EDF BOARD OF DIRECTORS' REPORT ON CORPORATE GOVERNANCE525
8.5.4 CONCORDANCE TABLE WITH THE NON-FINANCIAL PERFORMANCE STATEMENT526
8.5.5 CONCORDANCE TABLE WITH THE ANNUAL FINANCIAL REPORT527
Glossary528

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