Engie

Presentation of the company

Created in 1954, ENGIE is a leading global player in the energy market. The group, headed by Isabelle Kocher, has 155,000 employees and is based in Courbevoie (92).

ENGIE addresses major global challenges such as the fight against global warming, access to energy for all or mobility, and offers its customers – companies, individuals and professionals, cities and territories – energy production solutions and services that reconcile individual interests and collective issues.

With 24 million customers worldwide, including 80 key account customers and 350 heating networks in 20 countries, ENGIE is:

• The world’s leading independent electricity producer.
• The world’s leading provider of energy efficiency services.
• 1st distribution network in Europe.

Its shares are listed on the Paris, Brussels and Luxembourg stock exchanges.

Project Description

The group wishes to borrow €100,000 over 24 months as part of the Grow Together operation. For the ENGIE Group, this is a communication project that will be carried out as part of the operation.

Thanks to Grow Together, 11 major groups will lead the way in diversifying sources of financing for SMEs by borrowing on a lending platform.

Large groups are used to borrowing outside the banking system and diversifying their sources of funding. They have simple and easy access to credit.

In October 2014, a new regulation opening a breach in the banking monopoly allowed SMEs to borrow directly from individuals and institutions, in addition to their banks. Small and medium-sized companies can now do as big as large ones.

AccorHotels, The Adecco Group, Allianz France, Arkéa, Edenred, ENGIE, Iliad, JC Decaux, SUEZ, Unibail-Rodamco-Westfield and Webhelp are joining the transaction and showing their VSE/SME ecosystem that they can now finance themselves differently, thanks to lending platforms.

These 11 major sponsors, each borrowing €100,000 from October, give their VSE/SME partners the right to borrow up to €1,000,000 each, without any administrative costs.

This project, which is part of the Grow Together operation, is only available to individual investors on the platform. Unlike all the other projects presented on the platform, institutional investors and October’s management cannot lend on the projects of this campaign.

Analyst’s Opinion

The borrower is a holding company whose revenues are derived from services invoiced to its subsidiaries. The financial analysis was carried out on consolidated financial statements, which reflect the Group’s performance.

With a turnover of €65,029,000,000,000 in 2017 and an experienced team, the company has a good performance record and a double-digit operating margin.

In 2016 and 2017, the slight decline in revenue and profitability was due to: (i) a negative scope effect due to the sale of merchant hydroelectric and thermal power generation assets, and (ii) an unfavourable exchange rate effect, notably the depreciation of the pound sterling against the euro.

In 2017, EBITDA decreased by 1.8% to €9.3 billion. Excluding changes in the scope of consolidation and exchange rates, EBITDA increased by 5.3%.

In the first half of 2018, excluding changes in the scope of consolidation and exchange rates, organic revenue growth was 0.8%. EBITDA for the period amounted to €5.1 billion, up +1.3% on a gross basis and a strong organic growth of +6.2% compared to the first half of 2017.

The group has an excellent repayment capacity with a forecast Fixed Charge Cover Ratio (FCCR) of 2.29 and a solid financial structure, with a forecast net debt/EBITDA ratio of 1.89 and a net debt/equity ratio of 41%. The analysis of the project leads to an A+ rating and an annual rate of 2.5%.

*The multiple of CCRF at 2.29 means that the company has a margin of safety of 129% in relation to its ability to repay its credit maturities.

The expert opinion is given for information purposes on the basis of the information provided by the project leader and information from our databases (Scores & Decisions, Corporate Banking File). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong points:

• Good historical performance with 24 million customers in 70 countries
• Excellent repayment capacity with a projected CCRF of 2.29
• A leading global player in the energy market

Points of vigilance:

• Increased tax and regulatory pressure