Engie S.A.

Economic net debt remains under control at €38.5 billion, up by €0.2 billion compared to December 2021, with economic net debt to EBITDA significantly down at 3.0x versus 3.6x at year-end 2021, thanks to strong earnings growth. The lower leverage was supported by a working capital inflow of €0.6 billion, thanks to positive margin call effects, which more than offset a €1.6 billion cash absorption due to 10TWh of gas purchases at spot prices to enhance security of supply. In addition, ENGIE managed to significantly reduce both financial and physical exposure to Russian gas. Short-term price exposure is now down to 4TWh from 15TWh before, due to specific hedging actions and new contracts. Yearly contractual exposure has been reduced to

...Credit metrics should remain strong until 2024, with EBITDA growth fuelled by high commodity prices and growth in networks and renewables, even if we lack visibility on likely adverse regulatory measures and potential shut-down of Russian gas. EBITDA growth over 2022-2024, guided at 1.5%-3.5% per year, should be fueled primarily by the group's performance and efficiency plan (about 500 million of savings remaining), high commodity prices, and investment in renewables and networks. Together, this will mitigate the loss of earnings from disposed businesses and the progressive nuclear phase-out in Belgium. As of June 30, 2022, ENGIE is hedged 92% for 2022 at 74 per megawatt-hour (/MWh) for its outright merchant generation, compared with an average realized price of 59/MWh in 2021. For 2023, the group is hedged 69% at 70/MWh, leaving significant merchant exposure to capture higher...

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