Engie unveils three-year transformation plan as profits drop

Engie has announced a three-year transformation plan that will see it embark on a multi-billion euro programme of disposals and site closures, cutting costs by €1bn across the business by 2018, as its 2015 results come in below expectations.

The French energy giant reported 2015 revenues of €69,9bn, down 6.4 per cent year-on-year (2014: €74.7bn). It has cut the dividend to €0.70 in 2017-18, from €1 in 2016. EBITDA was down 7.2 per cent to €11.3bn (2014: €12.1bn).

The transformation plan will refocus the company on ‘low carbon activities, integrated customer solutions and activities not exposed to commodity prices’, it said.

Engie will reduce its exposure to commodity prices with a programme of disposals, partnerships and/or site closures that will reduce its net debt by €15bn. It outlined a capex programme of €22bn over 2016-18, €7bn of which will be on maintenance and at least €500m on innovation.

Chairman and chief executive Gérard Mestrallet said: “In a deteriorated market context, Engie launches today an ambitious three-year transformation plan to become leader of the world energy transition. This plan aims at redesigning the portfolio of activities of the Group, thanks to a €22 billion capex program and a €15 billion portfolio rotation program, and at improving its risk profile by reducing its exposure to commodity prices. We want to focus on low carbon activities and on integrated customer solutions, while improving the efficiency of the group. Our agility and our new simplified organization, closer to clients and territories, will enable us to seize new market opportunities and to develop new businesses to become a provider of global energy and digital solutions.”

Engie outlined ambitions for the UK retail market earlier this year.