OREANDA-NEWS. Amidst particularly challenging market conditions for power generation in Europe and the outages at the Belgian nuclear plants Doel 3 and Tihange 2 until early June 2013, the half year results reflect good operational performance, growth in international activities and exceptional weather conditions.

GDF SUEZ reported revenues of EUR 42.6 billion for first half of 2013, a gross decrease of -1.5% but an increase of +1.9% organic growth. Ebitda reached EUR 7.6 billion, a gross decrease of -6.6% and an organic of -2.6%. The impact on Ebitda of favorable weather is estimated at EUR +369 million whereas the impact of the Belgian nuclear plants outage is estimated at EUR -318 million.

Recurring net income, Group share decreased by -1.7% to EUR 2.4 billion. Net income, Group share, amounts to EUR 1.7 billion, in decrease in comparison to June 30, 2012, mainly due to impairments taken on certain assets and goodwill mostly in Europe for a net amount of EUR 441 million.

The Group continued its developments during the first half with a gross capex of EUR 3.3 billion. 46% of the growth capex were directed towards fast growing countries.

In addition, the Perform 2015 action plan is on track as of end of June 2013 with a gross Ebitda contribution of EUR 380 million plus 100 million below Ebitda.

Progress achieved in the portfolio optimization program led to a decrease in net debt at the end of June of more than EUR 3 billion. The Group confirms the target of a cumulative impact of EUR 11 billion over 2013-2014.

Net debt was EUR 32.2 billion at June 30, lower by EUR 4.4 billion compared to the end of December 2012. The net debt/Ebitda ratio was 2.3x in line with the target (?2.5x). The average cost of gross debt decreased further to 3.66%.

In early July, GDF SUEZ successfully issued hybrid notes on the euro and sterling markets for an amount equivalent to EUR 1.7 billion accounted for as 100% equity under IFRS standards and bearing an average coupon of 4.4%, enabling the buy-back of a portfolio of debt bearing an average coupon of around 5%. With this operation, the Group is reinforcing its financial flexibility and nearing its end of 2014 net debt target of EUR 30 billion.

At the end of June, the Group has a high level of liquidity at EUR 16.8 billion, EUR 9.1 billion of which is held in cash and EUR 7.7 billion in available lines of credit.

These results pave the way for confirming the Group's 2013 targets4, assuming average weather conditions and a stable regulatory environment:

Net Recurring Income Group share between EUR 3.1 and EUR 3.5 billion. This target is based on an estimated Ebitda between EUR 13 and EUR 14 billion, with pro forma equity consolidation of SUEZ Environnement as of 01/01/2013

Gross capex between EUR 7 and EUR 8 billion

Net debt/Ebitda ratio ?2.5x and an “A” category rating

The Group maintains its policy of providing shareholders with an attractive return and will pay an interim dividend, on November 20, 2013, of EUR 0.83 per share for fiscal year 2013 (whose ex-dividend date is set for November 15, 2013), at the same level of the interim dividend paid for fiscal year 2012.

Consolidated IFRS figures with full consolidation of SUEZ Environnement, show the same trends as pro forma figures:

Reporting on first half results, Gerard Mestrallet, Chairman and Chief Executive Officer of GDF SUEZ, stated: “In a challenging environment, especially in Europe, the Group's strong operating performance demonstrates our resilience. GDF SUEZ rapidly implemented its Perform 2015 action plan to accelerate its transformation and better meet the energy sector's new challenges. The Group has made good progress in its asset optimization program while dynamically developing new operations mainly in high-growth markets, as identified in its strategic objectives. Finally, through numerous industrial partnerships with leading international players, the Group is reinforcing its capacity to undertake major, large-scale projects.”

The Group is evolving in a still uncertain and challenging economic environment, particularly in power generation in Europe where depressed market conditions do not yet offer any sign of improvement.

In this context, in order to achieve its short and medium-term objectives, the Group continues with resolve its strategy of fundamental transformation :

priority to investments in fast growing markets or to activities with recurring income

ambitious Perform 2015 action plan adapted to current challenges

development of new business models in Europe leveraging, among others on its energy services expertise.

CONTINUED GROWTH IN THE FIRST HALF

Commissioning of 2,600 MW

Saudi Arabia: commissioning of the Riyadh PP11 gas-fired power plant (1,729 MW)

Sultanate of Oman: commissioning of the Barka 3 and Sohar 2 gas-fired power plants (2 x 744 MW)

Brazil: commissioning of the last unit of the Estreito hydro plant (136 MW)

Peru: commissioning of the Ilo thermal power plant (564 MW)

Panama: start of commercial operation of the Dos Mares hydro plant (118 MW)

Romania : inauguration of the Gemenele wind farm (48 MW)

France : inauguration of the Bretelle and Echalot wind farms in Burgundy (46 MW)

At the end of June 2013, 7.1 GW of capacity was under construction, of which around 75% in fast growing markets.

Strengthening our existing positions

United Arab Emirates: GDF SUEZ has been shortlisted for the Mirfa gas-fired power plant (1,600 MW)

Indonesia: confirmation of heat sources in the geothermal exploration phase

Norway: award of nine new exploration licenses including two as operator

Mexico: extension of the Mayakan gas pipeline by 75 km to supply the Yucatan province

Malaysia: joint operation with local partner Cyberview of the district cooling network of Cyberjaya, Malaysia's first cyber city

Morocco: construction of Africa's largest wind farm in Tarfaya (300 MW)

World: Signing with Sanofi of an agreement to reduce energy consumption of all its industrial sites (5 years, 112 sites)

Entering into new markets

South Africa:

Signing of long term agreements for two greenfield open-cycle turbine power plants: Dedisa (335 MW) and Avon (670 MW).

Financial closing of the West Coast One wind farm project (94 MW) whose commercial operation is scheduled for mid-2015.

Development of a 600 MW coal-fired in the Northern Province.

Turkey: GDF SUEZ member of the Franco-Japanese consortium selected for future construction and operation of the Sinop nuclear power plant (up to 4,400 MW).

United States: acquisition of a 16.6% equity stake in the Cameron LNG natural gas liquefaction terminal and signature of a liquefaction contract for 4 Mtpa of LNG.

Uruguay: GDF SUEZ has been named recommended bidder for the del Plata floating regasification terminal project, 263,000 m3 and 10 MSm3 /day.

China: signing of a technical service agreement with China National Petroleum Corp. for the conversion of 6 depleted fields into underground natural gas storage facilities and signing of an agreement with CNOOC for the supply of a floating storage and regasification unit (FSRU).

France : establishment of a consortium with EDP for the offshore wind tender issued by the French government for the Treport and Noirmoutier zones.

ANALYSIS OF FINANCIAL DATA

Revenues at June 30, 2013 were EUR 42.6 billion corresponding to a -1.5% gross decrease versus first-half of 2012 (+1.9% organic growth). This decrease relates mostly to scope effects, negative exchange rate fluctuations and from outages at the Belgian nuclear plants Doel 3 and Tihange 2, only partly offset by increased natural gas and electricity sales in France due to exceptionally cold weather, and by rising LNG sales as a result of cargo diversions to Asia in early 2013.

The Group's Ebitda for the six months came to EUR 7.6 billion, a gross decrease of -6.6% (-2.6% organic). This decrease is mainly attributable to the unavailability of the nuclear plants mentioned above, the decrease in electricity prices in Europe, lower production in Exploration & Production and the Ebitda impact of the Group's asset optimization program. These negative elements are partly mitigated by the favourable effect of new assets commissioning, cold weather in France, the good operational performance and the efforts realized through the Perform 2015 action plan.

Ebitda for the Energy International business line grew by +0.6% compared to the first-half of 2012 to EUR 2,159 million, despite the adverse impact of changes in scope of consolidation and unfavorable exchange rate fluctuations. The business line benefitted from new asset commissioning and good underlying performance (+14.2%), in particular in Thailand, Brazil, Peru, US LNG and Australia.

Energy Europe business line, with an Ebitda of EUR 2,100 million, representing a decline of -15.5% despite more favorable weather conditions than during the first-half of 2012 (+22.2 TWh) and the benefit of the decision on gas tariffs in France. The business line's performance was adversely affected by a reduction in electricity prices, the outages at the Belgian nuclear plants Doel 3 and Tihange 2 until early June 2013 and the SPP disposal in Slovakia in early 2013.

Global Gas & LNG business line reported a decline in Ebitda of -23.9% to EUR 1,076 million. This variation was due to lower production in Exploration & Production activity, impacted in particular by a period of repair and maintenance work at the Snohvit and Njord field in Norway and, to a lesser extent, to adverse commodity price movements.

Infrastructures business line reported Ebitda growth of +12.8% to EUR 1,938 million, benefitting from exceptionally cold weather (+29.5 TWh), and from increased for transmission and distribution tariffs, despite lower sales of storage capacities in France.

Ebitda of the Energy Services business line increased by +2.1% to EUR 542 million.