Energia
Direct Energie : 2017 annual results
Paris, 14 March 2018
The 2017 financial year demonstrates again the Group's capacity to expand business momentum with a record number of nearly 1 million customer sites acquired. Supporting this performance, the movement of vertical integration, marked primarily by the purchase of the Quadran group at the year's end, provides improved visibility of the future margins whilst reducing exposure to variations in wholesale market price.
Customer portfolio up by at
Revenue up by at
Current operating income up by at
Operating production capacities
Today's Board of Directors has approved the 2017 annual consolidated accounts. The audit procedures on the consolidated accounts have been completed and the audit report for the certification of the financial statements is being issued.
Annual revenue 2017 posts an increase of 16.2% rising to €1,966.3 million. This performance is based on the contribution from the Commercial Trade segment, still dynamic at €1,900 million (up by 13.1%), on the thermal Production segment whose contribution has increased 4.5-fold to €54.9 million thanks in part to the integration of the Marcinelle power plant, and on the consolidation of the Quadran group over the final two months of the year (€10.9 million).
The ramp-up of both conventional and renewable production assets reflects the implementation of the vertical integration strategy lead by the Group since 2016. The objective of this strategy is to have diversified production capacities, adjusted to the flexible energy needs of the customer portfolio, and in line with the French energy mix.
With 949,000 acquisitions (gross) achieved over the year versus 782,000 in 2016 (up by 21.4%), the Group confirms its ability to expand its business momentum in France in an increasingly competitive environment. The customer portfolio sites is thus showing growth of 24% (a net increase of 495,000 sites) to reach 2,558 thousand sites at end of 2017.
At end of 2017, the Group's production capacities stand at 1.35 GW, 800 MW of which is thermal power and nearly 550 MW gross of renewable energy. Over the year, Quadran and its subsidiaries have generated 773 GWh of power, and commissioned nearly 187 MW of new projects.
Benefiting from the Marcinelle plant's consolidation in the Production segment, thermal energy production rises significantly from 1.4 TWh to 3 TWh.
In this setting of sustained acquisitions of customer sites and increase in the volumes of energy sold, the Group cleared a gross margin of €287.4 million, up by 22.9%.
The commercialisation of gas and electricity, the main contributor to gross margin, reports gross growth of 1.2% at €227.2 million, rising to 6.8% after restatement with regulatory positive impacts for 2016. The gross margin 2016 effectively benefited from net positive effects amounting to €11.9 million, stemming specifically from the contribution delivered by the services contract with Enedis, which ended in September 2016, and from tariff adjustments further to the publication of retroactive orders in the second half of 2016.
The contribution from the gas power plants was particularly high in 2017 (€49.7 million versus €9.2 million in 2016). It underscores the relevance of the vertical integration strategy, which allowed the flexible production assets to take advantage of stress situations on the wholesale market, and to offset the increase implied in supply costs downstream.
Note should be taken of the entry of the Quadran group into the consolidation scope as from 31 October, 2017 and whose contribution is €10.5 million.
Current operating income shows growth of 17.6% at €102.1 million, thus highlighting the Group's ability to control costs in a context of high growth. The main components underlying this performance are as follows:
The increase in the cost of net borrowings from €(10.8) million in 2016 to €(14.4) million in 2017 reflects the shift in the Group's financial structure further to the purchase of the Quadran Group at the end of October 2017, financed in particular by a dedicated acquisition loan of €230 million.
Furthermore, whereas the Group recognised deferred tax income of €40.9 million in 2016, a deferred tax expense of €(25.9) million was recorded in 2017. This variation of €(66.8) million, having no impact on cash-flow and which explains solely the fall in net income to €51.9 million versus €123.6 million at the end of 2016, is related primarily to:
Shareholders' equity amounted to €395.9 million, up by €178.4 million compared to 31 December 2016. This increase is explained for the most part by the capital increase carried out in July 2017 amounting to around €130 million in view of the acquisition of the Quadran group, and by the year's result of €51.9 million.
This external growth operation logically leads to a change in the financial structure of the new consolidated entity. Besides the acquisition debt, borrowings now also integrate the non-recourse project debts issued by the Quadran group to finance the development of its power production capacity. The consolidated net financial debt thus stands at:
At 31 December 2017, interest rates on 86% of the Group's financial debt are fix or hedged.
The implementation of the standard IFRS 15, mandatory as from 1 January 2018, has resulted in supply services, carried out by the grid operators and billed to end-users, no longer being recognised in revenue. This change has no impact on the Group's gross margin or its cash flow.
Restated with this change, 2017 revenue would have amounted to €1.141 million (a negative impact of €(825) million on published revenue).
Trusting in its ability to expand business momentum and to pursue the development of its production activities, specifically in the renewable segment, the Group has set itself 2018 objectives that again point to strong growth:
The Group has decided to provide information on a projected range of EBITDA following the Quadran acquisition. This indicator, now monitored by the Board of Directors of Direct Energie, is indeed relevant to measure the performance of the renewable assets, and thus becomes key to evaluate the consolidated financial profitability.
Furthermore, the group reaffirms its target of reaching a portfolio of four million customer sites by the year 2020.
The Board of Directors, at the next Shareholders' General Meeting to be held on 29 May 2018, has decided to propose a 2017 financial year dividend of €0.35 per share, an increase of 40%, with detachment scheduled for 1 June 2018 and payment on 4 June 2018.
The Board of Directors has also decided to the cancellation of 400,000 treasury shares, i.e. 0.88% of share capital, pursuant to the authorisation granted by the combined Shareholders' General Meeting of 30 May 2017 under the 21st resolution, as part of its share buy-back programme. Share capital now stands at €4,483,247.90 divided into 44 832 479 shares. The total number of theoretical voting rights is 70 019 021.
" " declares Xavier Caïtucoli, Chairman and CEO of Direct Energie.
Revenue for 1st quarter 2018 on 14 May 2018 after the markets close
: The Group's annual activity report, the financial statements and the presentation used for the analyst information meeting may be consulted on the Group's website (www.direct-energie.com).
As France's leading alternative energy player, Direct Energie positions itself as the energy operator of the 21st century by focusing its strategy on customer satisfaction, innovation and the development of the energies of the future. Operating in France (continental and overseas territories) and Belgium, the Group supplies electricity and gas to over 2.6 million residential and non-residential customer sites. Direct Energie also produces electricity through renewable production facilities (onshore wind, solar, hydraulic, and biogas) and conventional plants (natural gas combined cycle), located throughout the region.
In 2017, the Group achieved consolidated revenue of €1,966 million.
For more information, visit our website www.direct-energie.com
Grégoire Lucas - gregoire.lucas@image7.fr - Tel + 33 (0)1 53 70 74 94
Marie Artzner - martzner@image7.fr - Tel + 33 (0)1 53 70 74 31 or + 33 (0)6 75 74 31 73
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