EDF recovery breathes life into upcoming IPO

5 April 2005 – A 56 per cent increase in net income returned in EDF’s financial results for 2004 has helped the group reverse its fortunes, putting it in better shape for the upcoming privatization process.

Also, an 11 per cent rise in group cash flow, to €9bn ($11.5bn), together with a decrease in financial investments and the disposal of non-core assets has helped reduce the group’s net debt by 18 per cent to €19.7bn.

Group sales, 95 per cent of which are generated within Europe, was up 4.5 per cent at €46.9bn, while earnings before interest, taxes, depreciation and amortization (EBITDA) reached €12.1bn, an increase of ten per cent. EDF said the rise in EBITDA was due to continued growth in productivity, particularly in France, Germany and the UK.

All of EDF’s European subsidiaries posted a profit last year, a first for the company. This recovery was particularly recognizable in Germany, where EnBW, 45 per cent owned by EDF, posted a profit of €43m, against losses of €612m in 2003.

However, despite an upturn in European operations, the South American subsidiaries remained heavily burdened by debt and asset depreciation charges. They posted net losses totalling €1.18bn.

Pierre Gadonneix, EDF chairman and CEO, said: “2005 will be a decisive year for the group, which must continue to improve profitability. This will largely involve restoring, as part of its industrial programme, the financial flexibility essential to controlled European expansion. The imminent Initial Public Offering (IPO) will be a key to this strategy, which is designed to make EDF one of Europe’s leading energy suppliers.”