EDF_REGISTRATION_DOCUMENT_2017

PRESENTATION OF EDF GROUP Description of the Group's activities

Hydrocarbon business 1.4.5.2.3.2 For the implementation of its gas strategy, the EDF group, through Edison, benefits from experience developed along the entire value chain, from exploration-production through to the direct sale of natural gas. Edison’s gas supply portfolio in Italy is mainly based on long-term contracts and, in 2017, it included around 15.1Gm 3 of imports via gas pipelines and LNG, with 0.4Gm 3 of own production in Italy and 5.8Gm 3 purchased on the market. In 2017, sales of gas in Italy to end customers amounted to 21.3Gm 3 (compared with 21.9Gm 3 in 2016). Edison delivered 4.5Gm 3 of gas to the industrial sector, 2.4Gm 3 to the residential sector, 7.3Gm 3 to the thermoelectric sector (including Edison’s own internal needs), and 7.1Gm 3 to the wholesale market. In recent years, Edison has revised the long-term gas import contracts with its suppliers. This process resulted, in particular, in the revision of the price of the Libyan long-term gas contract, decided on at the end of 2015 by the International Court of Arbitration of the International Chamber of Commerce in favour of Edison, and in two other commercial agreements for price revisions concluded in 2016 concerning the contract for the supply of Qatari and Libyan gas, which aligned the purchase prices with market terms. In exploration and production, Edison possessed, at the end of 2017, 60 concessions and exploration permits in Italy and 45 abroad, and approximately 36.5 billion cubic metre equivalents in reserves. Abroad, Edison’s most significant asset is the Abu Qir gas field in Egypt; in early 2009, Edison purchased the exploration, production and development rights for this field for an initial period of 20 years, extendable by further 10 years. At the end of 2017, the consortium, in which Edison holds an 11,25% stake with Sonatrec, Repsol and DEA Deutsche Erdoel AG, commissioned the output of the Reggane Nord gas fields in Algeria in the Sahara desert. Lastly, Edison is also active in Croatia, the UK and Norway, where it has licences for the North Sea, Norwegian Sea and Barents Sea. Gas infrastructures Edison is involved in various gas import infrastructure projects (see section 1.4.6.2.2.2 “Infrastructures”), such as IGI Poseidon, 50%-owned by Edison, a company involved in the development of several projects that aim to connect Greece and Italy (ITGI-Poseidon), Greece and Bulgaria (IGB, in 50/50 partnership with Bulgaria), as well as Greece and Cyprus (EastMed). In 2017, Edison, Depa and Gazprom signed a cooperation agreement to work together in establishing a southern route for Russian gas supplies from the Black Sea, through the development of a gas pipeline project between Greece and Italy under the Ionian Sea. The project will be able to benefit from the activities already developed on the ITGI-Poseidon project. In order to streamline its non-strategic assets, provide financial support to the investment plan with the aim of becoming the market leader in the generation of renewable energies and increase its residential customer portfolio, in October 2017, Edison sold to Snam Spa sa its 7.3% stake in Adriatic LNG Terminal, which manages the Rovigo offshore regasification terminal (8Gm 3 per year). Edison has nonetheless maintained the use of 80% of the terminal's capacity, i.e. 6.4Gm 3 per year, intended for the regasification of gas imported from Qatar with Ras Laffan Liquified Natural Gas Company Limited II (RasGas II). At the same time, Edison also sold to Snam Spa its entire stake in Infrastrutture Transport Gas SpA (ITG), a company which owns and manages the Cavarzere-Minerbio gas pipelines (see also section 1.4.5.2.3.5 “Regulated activities”). Sales and supply activities 1.4.5.2.3.3 In 2017, Edison sold 73.7TWh of electricity in Italy (compared with 91.2TWh in 2016, i.e. down 19%), of which 19.7TWh generated and 54TWh purchased on the markets. Sales to end-customers amounted to 10.9TWh, down by 5.6% compared with 2016, due mainly to lower sales in the business market. At the end of 2017, Edison (excluding Gas Natural) was serving around 494,000 electricity customers and around 480,000 gas customers, both in the business and residential segments. In October 2017, Edison signed an binding agreement with Gas Natural Fenosa (Gas Natural) for the acquisition of Gas Natural Vendita Italia (GNVI), a company owned by Gaz Natural, which manages the sale of natural gas and electricity on the Italian market. With a portfolio of around 420,000 residential customers and

15,000 SMEs, with gas sales totalling 3.3TWh per year, and around 53,000 residential customers and SMEs in the electricity sector, GNVI enables Edison to increase its customer portfolio by 50%. GNVI's customer base is mainly made up of customers characterised by a very low attrition rate located in Central and Southern Italy, enabling Edison to extend its presence in the country. At the same time, Edison acquired Servigas, a company specialised in the maintenance of residential boilers with 90,000 contracts. The acquisition of Gas Natural Vendita Italia was completed on 22 February 2018. In addition, Servigas's operations present synergies with those of Assistenza Casa, in which Edison acquired a 51% stake in March 2017 (the remaining 49% is owned by the International group Home Serve). With a network of around 1,400 tradespeople and 300,000 customers, the Company provides innovative services for the installation and maintenance of household and “smart home” appliances, allowing Edison to broaden its electricity and gas offerings through value-added services. In sales and marketing, Edison continues to grow its electricity and gas sales to individuals and to the SME segment, aiming for excellence in customer relationships and focusing on selected loyal customers. In parallel, Edison intends to maintain its position as a leader in the business-customer market, by developing an advisory approach in energy. Improvement of the sales process continued in 2016 and resulted in better service to customers. Growing customer satisfaction, combined with the development of low-carbon offers and value-added services targeted by segment will strengthen ties with the end market and create the conditions for an expansion of the customer base. Activities on the market for energy services 1.4.5.2.3.4 Consistent with the strategic priorities of the Group, Edison’s organisation was enriched in 2016 thanks to the creation of the Market Division for Energy Services, with the objective of contributing to the expansion of Edison on the market for services, with the development, sales and management of energy and environmental services. The activities of Fenice as well as those of Edison Energy Solutions were integrated into this new Division. The proposed solutions are dedicated to the development of energy efficiency projects intended for major industrial clients, small and medium-sized enterprises and tertiary customers. With the “public administration” project, the Division aims to produce an offering for a sector that is in a growth phase in terms of the demand for energy services. The environmental activities complete the service offering. The business models are adapted to the requirements of the customers: the Division, via its companies, designs, builds and manages, on behalf of its customers, assets such as combined generating plants, photovoltaic installations, electricity substations, thermal power plants for industrial use, cold generation power plants, compressed air generating plants, fluid distribution systems (electricity, gas, hot or refrigerated air, compressed air, industrial gas, water) and industrial water treatment plants. The range of services is completed by a consulting activity in terms of energy, management of environmental securities and internal and external training for customers and partners. Contracts with the FCA group (formerly Fiat), which are currently being renewed, still account for over half of Fenice's business. The projects are developed in the form of industrial partnerships or performance contracts with customers; the financial model is also adapted to the requirements of the customer and may range from assistance to the customer with third-party financing as far as direct investment by Edison (Esco) in the projects. In order to bolster its growth strategy and promote penetration into this sector by providing an integrated service offering for all segments of the market, in March 2017 Edison acquired a 51% stake in Comat Energia with group Comat (which holds 49%). This company operates in the heating sector, including the use of wood biomass for urban heating in the Piémont region, with more than 100 thermal power plants making it possible to increase the energy efficiency of both public and private buildings. In addition, in December 2017, the business portfolio grew in size following the acquisition of Energy Facility Solutions, a company which handles heat supply and the management of facilities, managing more than 1,800 public buildings (schools, hospitals, social housing, etc.) and private buildings, mainly in the northeastern region of Italy.

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DF I Reference Document 2017