Universal Registration Document 2021

5.1.3.3 EBIT

The Group’s consolidated EBIT for 2021 amounted to €5,225 million, up by €1,350 million (+34.8%) from 2020, or an organic increase of €1,393 million (+35.9%).

(in millions of euros)	2021	2020	Variation	Variation (%)
EBITDA	EBITDA 2021 18,005	EBITDA202016,174	EBITDAVariation1,831	EBITDAVariation (%)11.3
Net changes in fair value on Energy and Commodity derivatives, excluding trading activities	Net changes in fair value on Energy and Commodity derivatives, excluding trading activities 2021 (215)	Net changes in fair value on Energy and Commodity derivatives, excluding trading activities 2020 (175)	Net changes in fair value on Energy and Commodity derivatives, excluding trading activities Variation (40)	Net changes in fair value on Energy and Commodity derivatives, excluding trading activities Variation (%) (22.9)
Net depreciation and amortisation*	Net depreciation and amortisation* 2021 (10,789)	Net depreciation and amortisation* 2020(10,838)	Net depreciation and amortisation* Variation 49	Net depreciation and amortisation* Variation (%) (0.5)
(Impairment)/reversals	(Impairment)/reversals 2021 (653)	(Impairment)/reversals 2020 (799)	(Impairment)/reversals Variation 146	(Impairment)/reversals Variation (%)(18.3)
Other income and expenses	Other income and expenses 2021 (1,123)	Other income and expenses 2020 (487)	Other income and expenses Variation (636)	Other income and expenses Variation (%) 130.6
EBIT	EBIT 2021 5,225	EBIT20203,875	EBITVariation1,350	EBITVariation (%)34.8

* Including net increases to provisions for replacement of concession assets.

5.1.3.3.1 Net changes in fair value on Energy and Commodity derivatives, excluding trading activities

The net changes in fair value on energy and commodity derivatives, excluding trading activities, decreased by €40 million compared to 2020, in line with EDF Trading’s operations for EDF entities.

5.1.3.3.2 Net depreciation and amortisation

Net depreciation and amortisation was down by €49 million from 2020. The decrease principally concerns the France – Generation and supply segment (€164 million) and essentially reflects the impact of extension of the depreciation period of 1,300MWe-series power plants, which more than compensated for the additional depreciation and amortisation resulting from the increase in investments.

5.1.3.3.3 (Impairment)/reversals

Impairment recognised in 2021 amounted to €653 million, and mainly related to impairment of nuclear assets in the United Kingdom in view of the decision to close down the Dungeness B plant early ⁽¹⁾. Smaller amounts of impairment were recognised in respect of EDF Renewables’ photovoltaic plants, in view of a decree that reduced purchase tariffs from October 2021 for electricity generated by plants of over 250kWp in France for which the contracts were signed between July 2006 and August 2010.

5.1.3.3.4 Other income and expenses

Other income and expenses amounted to -€1,123 million for 2021, comprising:

-€427 million for the France – Generation and supply segment, principally additional costs relating to repair work on penetration welds at the Flamanville 3 site, less the settlement indemnity from AREVA ⁽²⁾;
-€437 million for the Other international segment, notably as a result of the sale of the 99% investment in CENG;
-€212 million for the United Kingdom segment, mainly relating to the decision to shut down the Dungeness B plant early in 2021;
-€155 million for the Italy segment, principally relating to litigation concerning the former company Montedison.

5.1.3.4 Financial result

(in millions of euros)	2021	2020	Variation	Variation (%)
Cost of gross financial indebtedness	Cost of gross financial indebtedness 2021 (1,459)	Cost of gross financial indebtedness 2020 (1,610)	Cost of gross financial indebtedness Variation 151	Cost of gross financial indebtedness Variation (%) (9.4)
Discount effect	Discount effect 2021 (2,670)	Discount effect 2020(3,733)	Discount effect Variation 1,063	Discount effect Variation (%)(28.5)
Other financial income and expenses	Other financial income and expenses 2021 4,489	Other financial income and expenses 2020 2,761	Other financial income and expenses Variation 1,728	Other financial income and expenses Variation (%) 62.6
FINANCIAL RESULT	FINANCIAL RESULT 2021 360	FINANCIAL RESULT2020(2,582)	FINANCIAL RESULTVariation2,942	FINANCIAL RESULTVariation (%)N.A

n.a. : not applicable.

The financial result for 2021 is financial income of €360 million, an improvement of €2,942 million compared to This change is explained by:

a €1,728 million improvement in other financial income and expenses, driven mainly by the strong performance by the dedicated asset portfolio (+€1,521 million) (see section 5.1.5.1.6);
the €1,063 million decrease in the discount expense charges, largely owing to the lesser decline in the discount rate for nuclear provisions in France between 2020 and 2021 than between 2019 and 2020;

The discount rate used to calculate nuclear provisions at 31 December 2021 was 7%, assuming inflation of 1.7% (respectively 3.3% and 1.2% at 31 December 2020);

a €151 million decline in the cost of gross financial indebtedness, attributable to refinancing operations in an environment of low interest rates.

(1) On 7 June 2021 EDF decided to move the Dungeness B AGR nuclear power plant in south-east England into the defueling phase.

(2) Settlement agreement signed on 29 June 2021 for a payment by AREVA to EDF of €563 million by 31 December 2021, in settlement of all the disputes between EDF and AREVA regarding the acquisition contract for Framatome signed in 2017, and their commercial relations prior to the acquisition.