EDF / 2018 Reference document

PRESENTATION OF EDF GROUP Group strategy

continue its “Grand Carénage” industrial programme for nuclear power in France ■ for an investment of about € 2013 45 billion over the period 2014-2025 (see section 1.4.1.1.2 “Operation and technical performance of the nuclear fleet”); intensify its investments in renewable energies in France and internationally, with ■ a gross investment in renewables above €2 billion per year over the 2017-2020 period, and develop its installed capacities in solar power; the Group announced the launch on 11 December 2017 of the Solar Plan, to be mainly financed through partnerships; continue with the turnover of Edison's assets, which started firstly with the ■ disposal of its Head Office in Milan and the disposal of a portfolio of gas assets in 2017, and secondly with the acquisition in 2018 of the customer portfolio of Gas Natural (GNVI) and the services company Zephyro; develop 10GW of new electricity storage facilities in the world by 2035, in ■ addition to the 5GW already operated by the Group, with the announcement on 27 March 2018 of the Electricity Storage Plan. EDF is also boosting its capacity for Research and Development and for innovation in this field in order to support the rapid development of storage technologies; become the leading electricity company in clean electric mobility from 2022 in ■ four large markets (France, United Kingdom, Italy and Belgium), with the launch on 10 October 2018 of the Electric Mobility Plan, which is based on an ecosystem of innovative players through strategic partnerships. With respect to the here above Flamanville 3, Linky, Hinkley Point C and “Grand Carénage” projects, as well as the investments in renewable energies, the firm commitments made by the Group on the acquisitions of tangible and intangible assets are set out in note 46.1.2.1 of the notes to the consolidated financial statements as at 31 December 2018. Lastly, as part of its CAP 2030 strategy, the Group will selectively target new development projects in addition to those already initiated, in line with its policy and financial constraints: EPR 2 projects, British Nuclear New Builds, new renewable energy projects, as well as international equity investments. Given its financial constraints, the Group will whenever possible, use partnerships to finance its new projects.

1.3.3 Investments in 2018 1.3.3.1

INVESTMENT POLICY

1.

The Group continued its programme of gross operating investments for a total amount of €16.2 billion in 2018, versus €14.7 billion in 2017. Some of these investments are considered as development investments that will generate cash flows in a longer term (see also section 5.1.5.1.2 “Net cash flow used in investing activities”). Total net investments excluding disposal plan were €14.0 billion in 2018. These include the new developments items for €3.1 billion in 2018 (mainly Linky ■ for €0.8 billion and the British Nuclear New Build for €1.6 billion). Aside from new developments, net investments excluding strategic disposals ■ amounted to €10.9 billion in 2018. They correspond mainly to nuclear maintenance for €3.9 billion, Flamanville 3 project for €0.8 billion, regulated activities in France and island systems (excluding Linky) for €3.3 billion (connections, modernisation of the mainland and island network), and lastly to renewables (€1.1 billion) and services (€0.4 billion). Asset disposals represent €1.9 billion in 2018 and include the disposal of the stake in the Dunkirk LNG terminal for €1.5 billion. The Group's disposal plan, which reached a cumulative total of €10 billion at end-2018, has consequently been completed. Investment programme 1.3.3.2 In the short and medium term, the Group aims to: complete major industrial projects such as the Flamanville 3 EPR in France as well ■ as the smart meters in France (Linky), representing capital expenditure of respectively €10.9 billion (1) and €4.0 billion (2) (see respectively sections 1.4.1.2.1 “Flamanville 3 EPR project” and 1.4.4.2.4 “Future challenges”); continue investing in Nuclear New Build in the UK in order to complete the ■ Hinkley Point C project for a total cost upon completion of £ 2015 19.6 billion (3) for 100% of the project (see section 1.4.5.1.2.5 “Nuclear New Build Division”). The Group is also continuing its studies of the Sizewell project;

2015 euro cost of the construction of Flamanville 3, excluding interim interest. (1) The programme completion costs were reviewed downward, from €4.5 to 4.0 billion for the period 2014-2021, after taking into account prices of the latest contracts signed for (2) equipment (meters and concentrators) and for installation services. Excluding interim interest and the currency effect compared with a benchmark project exchange rate of £1 = €1.23. (3)

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EDF I Reference Document 2018