Research Update: French Gas Utility ENGIE Affirmed At 'BBB+/A-2' Amid Transition, On Supportive Financial Policy; Outlook Stable

ENGIE's updated strategic plan envisages faster growth and more defensive business positioning, by focusing on renewables generation, regulated networks, and asset-backed client solutions, while reducing its geographic scope to improve operating efficiency. We believe ENGIE's ability to accelerate investments mainly depends on the success of its €9 billion-€10 billion asset disposal plan through 2022. In view of the execution risk involved, we regard management's focus on keeping a tight rein on financial leverage over this timeframe and commitment to the current rating as positive. We are therefore affirming our 'BBB+/A-2' ratings on ENGIE. The stable outlook indicates that we expect ENGIE's operating performance to recover in 2021 and the group to maintain S&P Global Ratings-adjusted funds from operations (FFO) to

...- ENGIE's updated strategic plan envisages faster growth and more defensive business positioning, by focusing on renewables generation, regulated networks, and asset-backed client solutions, while reducing its geographic scope to improve operating efficiency. - We believe ENGIE's ability to accelerate investments mainly depends on the success of its 9 billion-10 billion asset disposal plan through 2022. - In view of the execution risk involved, we regard management's focus on keeping a tight rein on financial leverage over this timeframe and commitment to the current rating as positive. - We are therefore affirming our '###+/A-2' ratings on ENGIE. - The stable outlook indicates that we expect ENGIE's operating performance to recover in 2021 and the group to maintain S&P Global Ratings-adjusted funds from operations (FFO) to net debt above 18% over 2021-2023 during the transition phase....

Research Update