Engie boosts asset sales as it targets ‘doing less stuff’
France’s Engie will boost asset sales and investment in renewables as its new chief executive promises to ensure the utility is “doing less stuff”.
In her first big strategic announcement since taking the helm this year, Catherine MacGregor said she was going to sell €9bn-€10bn worth of assets by 2023, against previous guidance of “at least” €8bn, and plough the proceeds into investments including renewable energy.
“We want to reposition Engie so we are doing less stuff, so we are simpler as we try and add value as an industrial,” MacGregor, a former executive at oilfield services group Schlumberger and now the only female boss in France’s CAC 40 benchmark stock index, told the Financial Times.
Engie shares were up 3.6 per cent by mid-morning trading in Paris.
The group, which boasts €60bn in annual revenue and employs 170,000 people worldwide, had a tumultuous 2020.
Along with being affected by the pandemic, Engie replaced its chief executive, dramatically shifted strategy and sold off its 32 per cent stake in French water and waste group Suez — kicking off one of the most vicious takeover battles ever seen in France.
MacGregor’s predecessor, Isabelle Kocher, had wanted to reinvent the former state-owned gas monopoly by making it a green energy champion, with an emphasis on services. However, critics had accused the group of become too complex and unwieldy under her watch.
MacGregor must now follow through on the change in strategy, moving Engie away from services to focus on energy infrastructure and renewable power.
The group, whose biggest shareholder is the French state, said on Tuesday it planned €15bn-€16bn of growth investment by 2023, with a concentration on renewables.
It will accelerate average annual renewables growth from 3GW currently to 4GW from 2022 to 2025, and then to 6GW from 2026 to 2030. That will lead to total installed capacity of 50GW by 2025 and 80GW by 2030.
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Engie also plans to stop selling off stakes in renewables projects at an early stage. “What we want to do now is to stick with assets as an operator,” MacGregor said.
In her efforts to “simplify” Engie, MacGregor is moving from 25 business units to 4 globally, and from 70 countries in 2018 to less than 30 countries.
The complexity of the organisation, MacGregor said, had “meant that expertise had been diluted”.
Engie also confirmed its dividend policy and its 2021 financial guidance of net recurring income group share, the company’s measure of core profit, between €2.3bn and €2.5bn.
Revenues in the first quarter of the year were up 2.3 per cent over the same period in 2020 to €16.9bn, as earnings before interest and tax rose 8.3 per cent to €2.1bn.