Framatome’s EBITDA was €527 million (including the margin realised with other EDF group entities), corresponding to an organic growth of +3.0% between 2018 and 2019.
Framatome’s contribution to Group EBITDA for 2019 stood at €256 million, a year-on-year organic increase of +3.0%. This includes the effects of a non-recurring €42 million expense in 2018 related to the revaluation of inventories undertaken to determine Framatome’s acquisition balance sheet at 31 December 2017.
In a highly competitive market, Framatome’s “Installed base” and “Instrumentation & Control” businesses registered better performances in the United States and Germany (80% exports). “Installed base” business was affected by rising execution costs on certain French and export projects.
Profitability of the “Components manufacturing” business improved thanks to a step-up in production of equipment to replace steam generators, and equipment for new projects.
The “Fuel” business benefited from sustained production levels, and fuel assembly deliveries for the Taishan EPRs in China.
There was growth in the “Large projects” business as the Hinkley Point C EPR project in United Kingdom was ramping up (with no impact on Group EBITDA), compensating for the decline in business activity after the Taishan EPRs commissioning in China.
Framatome’s EBITDA also benefited from continuation of its overhead cost reduction plan.
The United Kingdom’s contribution to Group EBITDA for 2019 was €772 million, with an organic decline of 4.6% from 2018.
EBITDA in the United Kingdom was impacted by the downturn in nuclear power generation and the introduction at 1 January 2019 of a cap on residential tariffs for electricity and gas (the Standard Variable Tariff). These unfavourable factors were partly counterbalanced by an increase in capacity revenue (€309 million(1) recorded in 2019) following reinstatement of the capacity market in October 2019, and the higher realised prices for nuclear power (around +£4/MWh).
Nuclear generation output totalled 51TWh in 2019, down by 8.1TWh from 2018. The downturn is explained by the extensions of the Hunterston B and Dungeness B outages in 2019.
Despite intense competitive pressure, the residential customer portfolio increased slightly (+2% compared to 2018), thanks to the transfer of Toto Energy’s(2) customer base, with the business customer segment also performing well with increased margins.
Italy’s contribution to Group EBITDA for 2019 amounted to €578 million, corresponding to an organic growth of €88 million (+20.8%) compared to 2018.
EBITDA for the electricity activities was up, essentially due to the good performance of electricity ancillary services, hydropower generation and new wind farms generation (+165MW).
EBITDA for the gas activities was also up, mainly as a result of better optimisation of long-term contracts for gas supplies via pipeline in 2019. In 2018 this EBITDA was affected by tensions over supplies and purchases at high prices.
The contribution by the sales activities was lower than in 2018 due to smaller margins on the residential customer segment for both electricity and gas.
In the service activities, results were affected by a slight decline in margins on key account customers and by favourable non-recurring items in 2018.
EBITDA for the Other international segment stood at €339 million in 2019, with an organic increase of €87 million (+36.3%) compared to 2018.
In Belgium, EBITDA showed organic growth of €54 million (+38.6%). The principal factor in this growth was a higher nuclear plant availability, which had been very low in 2018, and the increase in wind power generation. Gross wind power capacities were up by +18.0% compared to the previous year, at 519MW. Retail activities remained resilient despite a strongly competitive environment.
EBITDA in Brazil also showed organic growth of +€48 million (+60.0%), largely due to the +16% adjustment to the Power Purchase Agreement (PPA) price in November 2018 relating to the Norte Fluminense plant. This growth also reflected a good operating performance with a record level of availability, a smaller maintenance programme than in 2018 and better gas supply conditions.
The Other activities segment contributed €505 million to Group EBITDA for 2019, with an organic decrease of €225 million (-26.2%) from 2018.
A capital gain on a real estate sale in 2018, for which there was no equivalent in 2019, also affected the evolution of this segment’s EBITDA.
Gas activity was impacted by a provision for onerous contracts, booked in view of the downward revision of medium-term and long-term spreads. However, there was a high level of gas activities in 2019 thanks to growing competitivity in European gas-fired generation, and better use of the Group’s capacities.
EBITDA at EDF Trading amounted to €733 million in 2019, with a year-on-year organic increase of €113 million (+17.9%). This rise follows the increase in the trading margin mentioned earlier in the discussion of sales (see section 5.1.4.1.2.9), which was driven by high volatility on the markets and favourable positions on the electricity and gas markets in Europe, together with a good level of business in the United States. Thanks to the joint venture formed on 2 April 2019 with JERA, LNG (liquefied natural gas) trading and optimisation at worldwide level and LPG (liquid petroleum gas) activities also contributed to this performance.
(1) Including revenue for the 4th quarter of 2018.
(2) This transfer was decided by Ofgem, the British regulator for gas and electricity markets, when Toto Energy lost its licence.
