EDF / 2019 Universal registration document

5. The Group’s financial performance and outlook Operating and financial review in 2019

Operating profit (EBIT) 5.1.4.3 EBIT was up by 23.9% from 2018.

2019  (1)

2018  (2)

Variation

Variation (%)

(in millions of euros)

EBITDA

16,708

14,898

1,810

+12.1

Net changes in fair value on Energy and Commodity derivatives, excluding trading activities

642

(224)

866

n.a.

Net depreciation and amortisation

(9,994)

(8,775)

(1,219)

+13.9

Net increases in provisions for renewal of property, plant and equipment operated under concessions

(8)

(50)

42

-84.0 +39.0 +76.2 +23.9

(Impairment)/reversals

(403) (185) 6,760

(290) (105) 5,454

(113)

Other income and expenses

(80)

EBIT

1,306

not applicable. n.a.: The financial statements at 31 December 2019 apply IFRS 16 from 1 January 2019. In accordance with the new standard’s transition provisions, the comparative (1) figures have not been restated. The published figures for 2018 have been restated due to the impact of presenting the E&P operations as discontinued operations. (2)

The Group’s consolidated EBIT amounted to €6,760 million in 2019, up by +€1,306 million from 2018. This development is essentially explained by the growth in EBITDA and the favourable impact of net changes in fair value on energy and commodity derivatives, excluding trading activities. It was partly offset by a rise in net depreciation and amortisation. Net changes in fair value on Energy and 5.1.4.3.1 Commodity derivatives, excluding trading activities The net changes in fair value on Energy and Commodity derivatives, excluding trading activities, increased from -€224 million in 2018 to +€642 million in 2019, principally reflecting the higher price volatility on commodity transactions, particularly concerning Edison’s gas positions. Net depreciation and amortisation 5.1.4.3.2 Net depreciation and amortisation was €1,219 million higher than in 2018. Excluding the effects of application of IFRS 16 (-€634 million), foreign exchange effects (-€25 million) and changes in the scope of consolidation (+€27 million), net depreciation and amortisation was up by €587 million. The France – Generation and supply activities segment registered a €740 million increase in net depreciation and amortisation. After adjustment for the effect of application of IFRS 16, the increase in net depreciation and amortisation was €450 million. This rise is essentially explained by a volume effect related to newly-commissioned facilities in the nuclear fleet, and to a lesser degree accelerated depreciation of the coal-fired fleet from 1 June 2019.

The France – Regulated activities segment registered a €250 million increase in net depreciation and amortisation. After adjustment for the effect of application of IFRS 16, the increase in net depreciation and amortisation was €92 million, principally attributable to the step-up in the Linky  (1) project and investments in connections and network reinforcements. Net increases in provisions for renewal of 5.1.4.3.3 property, plant and equipment operated under concessions The €42 million decrease between 2018 and 2019 in net increases in provisions for renewal of property, plant and equipment operated under concessions is attributable to the France – Regulated activities segment. Impairment/reversals 5.1.4.3.4 In 2019, impairment amounted to €403 million (see note 14 to the 2019 consolidated financial statements). In 2018, impairment amounted to €290  (2) million. Other income and expenses 5.1.4.3.5 In 2019, other income and expenses amounted to -€185 million. This particularly includes the expense for the preferential employee reserved offer which took place during the first half of 2019 (see note 15 to the 2019 consolidated financial

statements), and restructuring provisions in certain Group entities. In 2018, other income and expenses amounted to -€105 million.

Financial result 5.1.4.4

2019  (1)

2018  (2)

Variation

Variation (%)

(in millions of euros)

Cost of gross financial indebtedness

(1,806) (3,161)

(1,712) (3,464)

(94) 303

+5.5 -8.7

Discount effect

Other financial income and expenses

4,606 (361)

378

4,228 4,437

n.a.

FINANCIAL RESULT

(4,798)

-92.5

n.a.: not applicable. (1) The financial statements at 31 December 2019 apply IFRS 16 from 1 January 2019. In accordance with the new standard’s transition provisions, the comparative figures have not been restated. (2) The published figures for 2018 have been restated due to the impact of presenting the E&P operations as discontinued operations.

(1) Linky is a project led by Enedis, an independent EDF subsidiary as defined in the French Energy Code. (2) The published figures for 2018 have been restated due to the impact of presenting the E&P operations as discontinued operations.

260

EDF | Universal registration document 2019

www.edf.fr