Research Update: EDF Outlook Revised To Positive On Recovering Domestic Nuclear Activity; Ratings Affirmed At 'BBB/A-2'

We think Electricite de France S.A.'s (EDF's) domestic nuclear activity continues to strengthen and is progressing toward a sustainable generation potential of 350 TWhpa (excluding the Flamanville-3 reactor). The recovery supports a consolidated annual EBITDA of €25 billion-€35 billion from 2024. We believe that this should cover finance interests and taxes, and most of EDF's capex, including heavy and partly unpredictable capex on nuclear newbuilds. We therefore anticipatefunds from operations to debt within 20%-30% with limited negative discretionary cash flow if any, assuming no or limited dividend. We therefore revised our outlook on EDF to positive from stable and affirmed the ratings on the group and its debt. We took the same actions on EDF Energy PLC, EDF Energy Customers

...- We think Electricite de France S.A.'s (EDF's) domestic nuclear activity continues to strengthen and is progressing toward a sustainable generation potential of 350 TWhpa (excluding the Flamanville-3 reactor). - The recovery supports a consolidated annual EBITDA of 25 billion-35 billion from 2024. We believe that this should cover finance interests and taxes, and most of EDF's capex, including heavy and partly unpredictable capex on nuclear newbuilds. - We therefore anticipatefunds from operations to debt within 20%-30% with limited negative discretionary cash flow if any, assuming no or limited dividend. - We therefore revised our outlook on EDF to positive from stable and affirmed the ratings on the group and its debt. We took the same actions on EDF Energy PLC, EDF Energy Customers PLC, and Edison SpA. - The positive outlook reflects that upside potential for EDF's stand-alone credit profile (SACP) could prompt us to revise our assessment to '##' over the next couple of years. This,...

Research Update