Interim Financial Report
For the period ended 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 2
TABLE OF CONTENTS
I. 2016 INTERIM MANAGEMENT REPORT ........................................................................................................... 3
1. REVIEW OF THE GROUP'S BUSINESS IN THE FIRST HALF-YEAR 2016 ..................................................................... 3
1.1. HIGHLIGHTS OF THE FIRST HALF-YEAR 2016 ....................................................................................................... 3 1.1.1. MARKET CONDITIONS .................................................................................................................................. 3 1.1.2. OTHER HIGHLIGHTS OF THE HALF-YEAR ..................................................................................................... 4
1.2. EVENTS AFTER THE 30 JUNE 2016 REPORTING DATE ......................................................................................... 7
2. GROUP INCOME IN THE FIRST HALF-YEAR 2016 ................................................................................................... 8
2.1. REVENUE FROM ORDINARY ACTIVITIES .............................................................................................................. 9 2.2. GROSS MARGIN .................................................................................................................................................. 10 2.3. CURRENT OPERATING INCOME ......................................................................................................................... 11 2.4. OPERATING INCOME .......................................................................................................................................... 13 2.5. NET INCOME AND EARNINGS PER SHARE ......................................................................................................... 13
3. REVIEW OF THE COMPANY'S CASH POSITION, CAPITAL AND FINANCIAL DEBT ................................................... 14
3.1. SIMPLIFIED CONSOLIDATED BALANCE SHEET ................................................................................................... 14 3.2. SHAREHOLDERS' EQUITY AND NET DEBT ...................................................................................................................... 14 3.3. GROUP CASH FLOW ................................................................................................................................................. 15
4. OUTLOOK FOR 2016 ........................................................................................................................................... 17
5. RISK FACTORS AND RELATED-PARTY TRANSACTIONS .......................................................................................... 18
5.1. RISK FACTORS ..................................................................................................................................................... 18 5.2. RELATED-PARTY TRANSACTIONS ....................................................................................................................... 18
II. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR 2016 ........................................ 19
III. AUDITORS' REPORT ON THE INTERIM FINANCIAL INFORMATION .................................................................. 66
IV. STATEMENT OF THE PERSON RESPONSIBLE ................................................................................................... 67
I. 2016 INTERIM MANAGEMENT REPORT
1. REVIEW OF THE GROUP'S BUSINESS IN THE FIRST HALF-YEAR 2016
1.1. HIGHLIGHTS OF THE FIRST HALF-YEAR 2016
1.1.1. MARKET CONDITIONS
Gas and electricity prices continued to decrease, this drop starting in 2014 and accelerating sharply in late 2015,
before recovering at the end of the half-year.
Forward electricity prices in France are thus fixed at nearly €33/MWh at the end of the half-year, after dropping
to lows of around €25/MWh in February and March 2016, well below the price of Arenh (Regulated Access to
Incumbent Nuclear Electricity), set at €42/MWh by the authorities.
Source: EEX
For their part, forward gas prices on the French market (GEP) are in turn set at levels slightly above €16/MWh at
the end of the half-year, a level close to that observed at the end of 2015, after dropping under €14/MWh in the
first quarter of 2016.
Source: Powernext - Peg Nord Prices (GEP North Price)
25
27
29
31
33
35
37
39
41
juin-15 juillet-15 août-15 septembre-15 octobre-15 novembre-15 décembre-15 janvier-16 février-16 mars-16 avril-16 mai-16 juin-16
Change in French Baseload Electricity Prices in €/ Mwh - July 2015 - June 2016
Cal 15 Cal 16 Cal 17 Cal 18 CAL 19
10
12
14
16
18
20
22
24
juin-15 juillet-15 août-15 septembre-15 octobre-15 novembre-15 décembre-15 janvier-16 février-16 mars-16 avril-16 mai-16 juin-16
Change in PEG North gas prices in €/ MwhJuly 2015 - June 2016
Cal 15 Cal 16 Cal 17
Direct Energie - Consolidated Financial Statements at 30 June 2016
4
This drop in prices observed in the first quarter, followed by a rebound in the second quarter, was particularly
correlated with changes in oil prices, which have experienced a broadly similar trend, and linked to the existence
of excess production capacities at the European level for electricity, and on a global level for gas. Concerning
electricity, the French government announced that it was planning to implement a price floor in the form of a
carbon tax, likely to affect thermal power generation capacities. While the scope of this price floor is still under
discussion, the proposal contributed to the significant rebound in electricity prices observed during the second
half of 2016.
The Group has been able to leverage this high price volatility and improve its supply terms according to its market
risk management policy.
1.1.2. OTHER HIGHLIGHTS OF THE HALF-YEAR
Continued sales spurred on by growth in France and Belgium
The Group maintained strong growth in its customer portfolio in the first half-year.
At 30 June 2016 the customer portfolio in France stood at nearly 1,433,000 customer sites in electricity and
393,000 customers sites in gas, representing increases of nearly 15% and 14% compared to customer portfolio
figures at 31 December 2015, and an average increase of nearly 15%.
This growth drive, after 2015 being marked by very high levels of acquisition, is propelled by a competitive and
innovative portfolio of product offerings in electricity and gas, the roll-out of several national advertising
campaigns, and the sponsorship contract with the SA Vendée Cycling, Jean-René Bernaudeau's cycling team. This
sponsorship became effective on 1 January 2016 and since this date the cycling team has competed as the "Direct
Energie Team".
Moreover, the cancellation of the regulated sales tariffs (TRVs) offered to business customers with a contracted
power in excess of 36 kVA in electricity (yellow and green tariffs) and natural gas consumption of at least 30
MWh/year at 31 December 2015, enabled the Group to significantly strengthen its customer portfolio in the
business and local community segments through targeted and customised product offerings and a strong sales
momentum.
At 30 June 2016, the Group therefore supplied more than 344,000 professional, business and community sites
compared to 254,000 at 31 December 2015.
This sales momentum was also sustained in Belgium, where the Group recorded more than 48,000 customer
sites at 30 June 2016 compared to more than 25,000 at 31 December 2015.
Extension of the ERDF services contract
During the second quarter of 2016, the Group and ErDF (now ENEDIS) signed a one-year extension of the services
contract which had ended on 30 September 2015. This extension, retroactively commencing on 1 October 2015,
led to recognising €21.7 million in income in the first half-year 2016.
Decision of the Conseil d’Etat (France's highest administrative court) on Regulated Tariffs for Electricity Sales
In June 2016 the Conseil d’Etat put an end to two tariffs decrees. The decree of 28 July 2014 was cancelled on
the grounds that the principle of legal certainty was not met in respect of blue tariffs for the period between 1
August 2014 and 31 October 2014. As concerns the decree of 30 October 2014, it was cancelled on the grounds
Direct Energie - Consolidated Financial Statements at 30 June 2016
5
that it did not take into account retroactive tariff adjustments that were necessary in the case of residential blue
and green tariffs for the period from 1 November 2014 to 31 July 2015. The Conseil d'Etat gave ministers a three-
month deadline to implement these amending decisions.
The Group will be impacted by such cancellations and corresponding amending decisions, which will trigger a
positive tariff adjustment, once these amending decisions have been published by the competent ministers.
Rider to the transmission contract with GRDF
By a decision of 2 June 2016, the Paris Court of Appeal upheld the decision handed down by the CoRDiS on 19
September 2014. This decision established the principle that the natural gas supplier was not responsible for the
unpaid share of past or future distribution costs of the distribution network operator (GRDF). In pursuance of
this decision of the CoRDiS (Comité de règlement des différends et des sanctions), a contractual agreement was
formalised between the Parties during the second quarter of 2016 under which, in late May 2016, GRDF repaid
Direct Energie the unpaid share of distribution costs incurred prior to 31 December 2015, amounting to nearly
€10 million.
The Court of Appeal also held that the supplier was to be paid for the services performed on behalf of GRDF
through which the end customer obtained access to the distribution networks. In pursuance of this decision,
GRDF must first offer Direct Energie, within a period of two months, an amendment to the Distribution Network
Access Agreement offering compensation that is "proportionate and equitable to the costs avoided" by GRDF,
and also to pay Direct Energie remuneration at a price fixed by the Parties for past periods (since the date of
signing of the distribution agreement in 2005). No agreement was reached between the Parties at the end of the
two-month period and as such, the Group has not yet recognised any related income in its accounts.
Provision for loss-making contracts on gas interconnection capacities
As part of its gas supply strategy, the Group concluded in 2009 several contracts with French (GRTgaz), Belgian
(Fluxys) and Dutch (GTS) gas transmission system operators for the reservation, from 2011, of gas import
capacities through Belgium, for periods extending through 2027. The purpose of these contracts was to ensure
security in the gas supply as part of the Group's activities over the long-term, according to the principles
governing the procurement of a licence to supply natural gas in France.
Beginning in 2013, the market environment brought to light the current system's inability to ensure security of
supply, resulting, in particular, in inadequate storage capacity subscriptions. The government therefore initiated
consultations to clarify the obligations incumbent on suppliers in the field, as well as the available instruments
and resources. The specific aim of these consultations was to reform the storage subscription obligations.
During these consultations, the Group maintained its consistent position, whereby, when defining supplier
obligations in terms of security of supply, due consideration should be given to all available modulation tools,
including those related to gas import capacities in France. However, pending the finalisation of this reform and
without jumping to conclusions on the final outcome, the authorities have asked the Group to subscribe for
annual storage capacities independently of its own gas interconnection capacities.
Based on these consultations, the public authorities drafted the reform, which was reviewed by the Conseil d’Etat
in the second quarter of 2016. The draft reform does not reflect the Group's proposals to explicitly consider the
Gas Import capacities of each supplier among the available instruments or resources in terms of supply security.
Furthermore, in April 2016 the Conseil d’Etat, called to rule in the dispute initiated in 2014 by Eni and Uprigaz,
upheld that the authorities were entitled to impose an obligation on gas suppliers to subscribe storage capacities
in order to ensure supply security, without considering the interconnection capacities specific to each supplier
Direct Energie - Consolidated Financial Statements at 30 June 2016
6
as an instrument allowing the latter to avoid the same. The Court of Justice of the European Union has been
called solely to resolve the issue concerning the geographical location of the storages included in meeting this
obligation.
In these circumstances and irrespective of implementation period of the draft reform, the contracts can no longer
be considered as participating directly in the obligations inherent to the Group's gas operations with respect to
security of supply, without there being any expectation of a favourable development in the regulations in the
short-term.
Accordingly, at the reporting date these contracts on access to gas interconnections were treated as onerous
contracts under IAS 37, since:
- it is clearly no longer possible to regard these as capable of meeting the Group's obligations in terms of
security of supply; and
- the costs associated with these contracts over their remaining life, with no prospect of early
termination, are much higher than their market value.
A provision for onerous contracts in the amount of €33.0 million has been recognised in the financial statements.
Strengthening of the Group's financial structure
During the first quarter of 2016, deposits paid in cash with the Group's counterparties to hedge changes in the
fair value of forward energy sales and purchases until such time as their physical delivery takes place, experienced
strong growth, directly related to the decline in wholesale electricity prices observed over the period.
The Group has secured new funding to offset this increase:
- shareholder loans for a total amount of €55 million on the closing date of the accounts;
- a short-term credit line with the Group’s regulated energy market clearing house, for a total amount of
€60 million;
- a €60 million increase in its bank revolving credit facility rising the usable amount to €120 million.
With a rebound in market prices in the second quarter, the Group had at 30 June 2016 nearly €177 million in
short-term financing sources in addition to available cash.
Direct Energie's shareholding structure
The Company was informed of the sale by Ecofin Ltd. of its entire shareholding in the Company's capital, totalling
1,684,656 shares representing 4.11% of Direct Energie's share capital, as a part of an accelerated bookbuilding,
executed on 15 June 2016 by Société Générale Corporate & Investment Banking and Gilbert Dupont.
As part of this investment transaction, Impala SAS, AMS Industries and Luxempart SA respectively acquired
60,000, 90,000 and 100,000 Company shares; the balance (1,434,656 Company shares) was reclassified on the
market.
Direct Energie has been informed that this investment has not raised any question as to the balances that existed
in the original understanding.
Direct Energie - Consolidated Financial Statements at 30 June 2016
7
The Company's share capital and voting rights were as follows at 30 June 2016:
* Calculated using the definition of the Euronext indexes (i.e. excluding: interests over 5% except mutual funds and
retirement funds and interests held by executives, managers, employees, shareholders bound by an agreement, the
treasury shares).
** Number of theoretical voting rights determined according to the status of the shareholders in the CACEIS books as
approved at 30 June 2016.
1.2. EVENTS AFTER THE 30 JUNE 2016 REPORTING DATE
Decision of the Conseil d’Etat on the Engie/CRE dispute
On 13 July 2016 the Conseil d’Etat issued a decision following Engie’s request to overturn, on the grounds of
excess power, the ruling handed down on 26 July 2012 by the French Energy Regulatory Commission (Commission
de Régulation de l’Energie) concerning communication of the services agreement concluded between Direct
Energie and ERDF (now ENEDIS) on the management of customers under a single contract, and the decision of
10 December 2014 rejecting the informal appeal filed by Engie against this decision.
While finding that the appeal filed by Engie was submitted too late for examination, the Conseil d'Etat recognised
that the decision of 26 July 2012 was unlawful on the grounds that it provided that the agreement between
Direct Energie and ERDF was concluded for a transitory period and provided a remuneration that was limited to
suppliers with less than 1,750,000 customers which subscribed a single contract for electricity or gas. The Conseil
d'Etat thus ultimately upheld the argument that these two limits of the contract between ERDF and Direct
Energie were contrary to the principle requiring that the suppliers should not have to bear the costs generated
by the services that they provide on behalf of the DSO’s (distribution system operators).
This decision expressly confirms the principle that the distribution system operator pays a supplier consideration
for management costs for customers that have a single contract.
Planned Acquisition of a combined cycle gas turbine power plant in Belgium
The Group announced the signing, on 28 September 2016, of a sale and purchase agreement with the Italian
group Enel to acquire 100% of the share capital in its subsidiary, Marcinelle Energie. The latter, dedicated to
IMPALA SAS
AMS INDUSTRIES
LOV GROUP INVEST
EBM TRIRHENA AG
CONTROLLING SHAREHOLDER GROUP
LUXEMPART
Management and others
Free float*
TOTAL 100% 41,220,566 56,031,012 100%
2,408,833 5.84% 4,103,168 7.32%
5,444,021 13.21% 5,948,616 10.62%
29,175,971 70.78% 41,787,487 74.58%
4,191,741 10.17% 4,191,741 7.48%
4,474,544 10.86% 4,474,544 7.99%
4,167,870 10.11% 4,167,870 7.44%
14,427,751 35.00% 26,739,758 47.72%
6,105,806 14.81% 6,405,315 11.43%
Cap Table Direct Energie - 30 June 2016
Shareholders Number of shares
held% share capital
Number of voting
rights**% voting rights
Direct Energie - Consolidated Financial Statements at 30 June 2016
8
electricity production, owns and operates a combined cycle gas turbine power plant located in Charleroi, Belgium
with around forty employees. Handed over in 2012 and equipped with Siemens-Ansaldo technology, very similar
to that held by the Group in Bayet (Allier), this plant has an installed capacity of about 400 MW.
The transaction amount, paid entirely in cash, is €36.5 million, and remains subject to the usual price
adjustments. It includes an earn out depending on the change in the electrical market structure in Belgium. The
transaction remains subject to the lifting of suspensory conditions (in particular, the authorisation from the
competent Belgian authorities), and should be completed at the earliest by the end of 2016.
After acquiring the power plant in Bayet at the end of 2015, this new transaction will bring the Group's installed
capacity to nearly 800 MW. Agreed on competitive terms, this transaction also confirms the implementation of
the planned vertical integration strategy with a stronger presence by the Group upstream and downstream, thus
ensuring better supply coverage of its customer portfolio.
2. GROUP INCOME IN THE FIRST HALF-YEAR 2016
The first half-year 2016 saw an increase of 70.8% in revenue from ordinary activities, including the Energy
Management Margin, compared to the first half-year 2015. Revenue reached €863.6 million mainly because of
a spike in electricity volumes sold.
Current operating income has also increased by 93% over the period to stand at €43.8 million in the first half-
year 2016.
This growth mainly reflects (i) the increase of the customer portfolio in France, particularly among major
accounts customers, contributing to sustained volume growth, (ii) optimized sourcing costs in a context of very
volatile market prices, (iii) the one-year extension of the service contract with Enedis, (iv) the reimbursement by
GrDF of unpaid gas distribution costs following the implementation of the decision handed down by the CoRDis,
and (iv) efforts implemented by the Group to control its structural costs. All these items more than offset the
effect of the Group's recognition of a provision for onerous contracts for long-term reserved transit capacity
among the Netherlands, Belgium and France. These items' impacts on accounting figures are set forth in section
1.1.2 Other highlights of the half-year.
Net profit was €52.4 million, or an increase of 126%. This growth, higher than the growth in current operating
income, was due primarily to the impact of deferred tax income of almost €34.5 million, linked in particular with
the recognition of deferred tax loss carryforwards applied by the Group given the incomes forecast for the years
2016 to 2018.
€ mH1 2016 H1 2015 Change in %
Revenue from ordinary activities 863,6 505,7 70,8%
Gross margin 107,1 78,4 36,6%
Current operating income 43,8 22,7 93,0%
Operating income 26,9 26,1 3,0%
Financial income/(loss) (5,4) (1,5) 258,0%
Net income from continuing operations 52,4 24,4 114,6%
Net income 52,4 23,2 126,0%
Direct Energie - Consolidated Financial Statements at 30 June 2016
9
2.1. REVENUE FROM ORDINARY ACTIVITIES
The Group's revenue, including the Energy Management Margin, totalled €863.6 million in the first half-year, up
€357.9 million compared to the first half-year 2015. This represents an increase of 70.8%. Each of the Group's
business areas contributed to this growth, and particularly the Commercial trade segment. This growth was
propelled by the spike in electricity and gas sales in France with business and local authorities’ customers, a direct
result of the cancellation of the electricity and gas regulated sales tariffs for these customers on 31 December
2015.
Commercial trade Segment
The commercial trade segment's contribution to revenue for the half-year totalled €858.4 million, up from €352.9
million compared to the first half-year 2015, or an increase of 69.8%.
This growth is overwhelmingly attributable to the sale of electricity and gas in France, whose revenue over the
period totalled €842.9 million, up 67.2% compared to the first half-year 2015.
The Group's sales drive has allowed it to further expand is customer portfolio via back to back acquisitions. At 30
June 2016, the customer portfolio stood at around 1.433 million customer sites in electricity and 393,000
customer sites in gas, or increases of 32% for these two energies compared to 30 June 2015. Regarding the
electricity customer portfolio, the Group has taken advantage of the end of "yellow" and "green" regulated tariffs
since 31 December 2015, which has resulted in a significant entry of "Major Account" customers (multi-site
industrial and commercial customers and public authorities) in the beginning of the half-year. The average
customer portfolio over the first half-year 2016 is thus an increase of almost 29% compared to the first half-year
2015.
This growth in the customer portfolio has contributed to the significant increase in volumes of electricity and gas
sold: they settled respectively at 7.1 TWh, an increase of nearly 93% compared to the first half-year 2015, and
2.9 TWh, up 30% over the same period. While temperatures were relatively close to seasonal averages, but
slightly higher than those observed during the first half-year 2015, volume growth delivered outstripped that of
the customer portfolio for electricity. This is primarily due to the spike in "Major Account" clients, especially
yellow and green clients, whose unit consumption is much higher than those of residential customers.
In addition to the very significant increase in volumes sold, revenue from the electricity supply business has also
benefited from the impact of the increase in regulated sales tariffs applied from 1 August 2015 on the only
segment of residential blue customers (revaluation of 2.5%).
Conversely, the decrease in average gas regulated sales tariffs of nearly 12.7% between the first-half year 2015
and the first-half year 2016 hindered the growth in gas supply revenue.
In the first half-year 2016, revenue from the electricity and gas supply in Belgium was €15.5 million, up €14.1
million. This significant increase is explained by the fact that the launch of the electricity and gas marketing offers
by Direct Energie Belgium on the entire Belgian territory did not occur until the second quarter of 2015. Being
able to span the entire Belgian market from this date has therefore boosted the customer portfolio, which stood
at more than 48,000 customer sites at the end of June 2016 compared to more than 7,000 at 30 June 2015.
Volumes sold increased correspondingly with 50 GWh sold in electricity and 190 GWh in gas in the first half-year.
€ m H1 2016 H1 2015 Change in value Change in %
Commercial Trade 858,4 505,4 352,9 69,8%
Of which France 842,9 504,0 338,9 67,2%
Of which Belgium 15,5 1,5 14,1 957,0%
Production 5,2 0,2 5,0 n.a.
Revenue from ordinary activities 863,6 505,7 357,9 70,8%
Direct Energie - Consolidated Financial Statements at 30 June 2016
10
Production Segment
Revenue for the Production segment increased robustly, reaching €5.2 million over the period on the back of the
acquisition on 30 December 2015 of the company 3CB SAS. 3CB SAS operates a Combined Cycle Gas turbine plant
(CCGT) with an installed capacity of 408 MW and its net contribution margin is recorded under Energy
Management margin.
As in 2015, other production asset projects under development have not had a material impact on the revenue
of the first half-year 2016.
2.2. GROSS MARGIN
The Group's gross margin for the first half-year 2016 amounted to €107.1 million, showing a strong increase of
€28.7 million (+36.6%). As for revenue, growth was mainly driven by the Commercial trade segment in France.
Commercial trade Segment
The commercial trade segment's contribution to the gross margin was €103.2 million for the first half-year 2016,
up €25.1 million compared to the first half-year 2015.
This growth is overwhelmingly attributable to the electricity and gas supply business in France, whose
contribution to the gross margin increased 29.3% to stand at €101.2 million over the period. This contribution
was a result of the combined effects of growth in the customer portfolio and sales volumes, particularly in major
accounts, in a climatic context that is close to seasonal norms.
Added to this are the combined effects for the electricity supply business:
- the 2.5% increase in the blue residential customer's regulated sales tariffs at 1 August 2015;
- the one-year extension, in the second half of 2016, of the service contract with ErDF, retroactive to 1
October 2015, which resulted in an additional contribution of €8.5 million to the gross margin compared
to the first half-year 2015;
- the decline in wholesale market prices in 2015 and the first quarter of 2016, which the Group leveraged
to optimise its supply terms. Purchases of electricity therefore increased at a slower rate than sales
volumes (+ 83% compared to + 93%): they amounted to €305.0 million in the first half-year 2016
compared to €166.5 million in the first half-year 2015.
Concerning the gas supply business, it benefited from the growth in the customer portfolio and sales volumes in
a context of lower market prices. However, its contribution to the gross margin was negatively impacted by the
recognition of a provision for onerous contracts amounting to €33.0 million on the gas interconnection capacity
reserved by the Group between Belgium, the Netherlands and France considering the current regulatory
environment and a bleak outlook for favourable developments in the short-term (see Section 1.1. Highlights of
the first half-year 2016).
€ m H1 2016 H1 2015 Change in value Change in %
Commercial Trade 103,2 78,2 25,1 32,1%
Of which France 101,2 78,2 22,9 29,3%
Of which Belgium 2,1 (0,1) 2,2 n.a.
Production 3,8 0,2 3,6 n.a.
Gross margin 107,1 78,4 28,7 36,6%
Direct Energie - Consolidated Financial Statements at 30 June 2016
11
The electricity and gas trading business in Belgium generated a gross margin of €2.1 million (compared to a loss
of €0.1 million during the first half-year 2015). The very significant increase in the customer portfolio has enabled
the Group to optimise its electricity and gas sourcing strategy, taking particular advantage of the effect of lower
market prices, thus ensuring profitable business growth.
Production Segment
The gross margin of the Production segment amounted to €3.8 million in the first half-year 2016, an increase of
€3.6 million compared to the first half-year 2015. This increase was a result of the acquisition of the company
3CB at year-end 2015 and the electricity production made during the first half-year in a context of favourable
seasonal market for gas thermal assets.
2.3. CURRENT OPERATING IN COME
The Group's current operating income amounted to €43.8 million for the first half-year 2016, up 93.0% from the
first half-year 2015. This growth was driven by the commercial trade segment, including electricity and gas sales
in France.
Commercial trade Segment
The commercial trade segment's contribution to current operating income was €47.7 million, up €24.7 million
compared to the first half-year 2015. This mainly reflects the sustained sales drive observed in the different
segments in which the Group operates, particularly in France, and the increase in major accounts since the
regulated sales tariffs on the yellow and green electricity segments were cancelled on 31 December 2015. This
growth was achieved while optimising procurement costs.
Current operating income for the commercial trade segment in France thus amounts to €50.4 million, up €25.3
million compared to the first half-year 2015.
Personnel expenses increased by €2.4 million. Excluding the impact associated with the stock option plans,
payroll expenses totalled €15.2 million compared to €12.9 million for the first half-year 2015. This increase,
excluding the impact of stock option plans, is directly linked to (i) expanding the sales teams in 2015 to effectively
respond to the scheduled end (31 December 2015) of the regulated sales tariffs for some corporate customers
and (ii) building out customer service to maintain a consistent quality of service in line with the Group's thriving
customer portfolio.
Other operating income and expenses decreased by €6.9 million. After signing in the second quarter of 2016 an
amendment to its distribution contract with GRDF including the implementation of the principle, established by
the decision of the CoRDiS of 19 September 2014, that the natural gas supplier should not assume outstanding
delivery costs incurred by the distribution network operator (GRDF), both for the future than the past, GRDF
reimbursed the Group almost €10 million for its unpaid distribution costs prior to 31 December 2015.
Excluding this non-recurring effect, other operating income and expenses totalled €31.8 million at 30 June 2016
compared to €28.9 million at 30 June 2015, an increase of €2.9 million. This is explained in large part by:
€ m H1 2016 H1 2015 Change in value Change in %
Commercial Trade 47,7 23,0 24,7 107,4%
Of which France 50,4 25,1 25,3 100,7%
Of which Belgium (2,7) (2,1) (0,6) 26,7%
Production (3,9) (0,3) (3,6) 1275,8%
Current operating income 43,8 22,7 21,1 93,0%
Direct Energie - Consolidated Financial Statements at 30 June 2016
12
- an increase in marketing expenses €4.8 million, a direct effect of the expansion of the Digital Group's
presence and launching the sponsorship of the SA Vendée Cycling team, now called Team Direct Energie,
on 1 January 2016;
- an increase of €3.4 million in external service provider expenses related both to the increased number
of acquisitions but also to the growth in customer portfolio assets over the period;
- impact of bad debt net of changes in provisions of €4.7 million over the period compared to €10.0 million
for the same period in 2015. This change is mainly explained by the Group's continued efforts in
managing its customer portfolio and its billing and collection terms;
- the increase in certain taxes of some €1.1 million related in particular to the marked improvement in
the Group's profitability.
The negative impact of depreciation on current operating income increased €2.1 million compared to the first
half-year 2015, in line with the continued acceleration of the sales momentum, which automatically translates
into higher customer and investment acquisition costs particularly in the Group's information systems.
Current operating income for the commercial trade segment in Belgium amounted to a loss of €2.7 million in the
first half-year 2016 compared to a loss of €2.1 million at the end of the first half-year 2015. This development is
directly related to the pursuit of securing a market share across the entire Belgian territory, requiring, despite a
significant pooling of support functions, direct investments, particularly in the marketing and sales areas, in order
to reach the size required for this activity.
Production Segment
The current operating income for the production activity amounted to a loss of €3.9 million for the first half-year
2016 compared to a loss of €0.3 million in the first half-year 2015. In addition to the recurring expenses related
to various development projects carried out by the Group, the current operating income is directly impacted by
3CB, which has operated the Bayet plant in the market since early 2016, whose contribution at 30 June was
impacted by:
- the seasonality of maintenance and upkeep expenses that took place mainly in the second quarter, a
less favourable period for production for gas thermal assets;
- the impact of recognising, on 1 January 2016, the entire annual expense associated with certain taxes,
in particular the IFER (flat-rate tax on installed capacity) in accordance with the principles established
by IFRIC (International Financial Reporting Interpretations Committee) standard 21.
Direct Energie - Consolidated Financial Statements at 30 June 2016
13
2.4. OPERATING INCOME
The change in fair value of Energy derivative financial instruments operational in nature represented, in the first
half-year 2016, an expense of €16.8 million compared to a profit of €7.3 million during the first half-year 2015.
This change, which had no impact on cash, is directly related to the marked decrease in the fair value of Gas
derivative financial instruments, especially associated with the unwinding of gas-oil hedging swaps during the
period, whose fair value was strongly positive at 31 December 2015. During the first half-year 2015, this change
had increased to €7.3 million and is explained primarily by the change in energy prices, particularly by the slight
increase in gas and oil prices observed over the period compared to those at 31 December 2014.
In the first half-year 2015, disposals of non-current assets corresponded mainly to the write-off of €3.1 million
of the assets for a combined cycle gas development project of the Group that had become obsolete, given the
delays that arose in the project. Impairment of non-current assets of €0.5 million exclusively related to equity
investments in unconsolidated companies, recognised as available-for-sale assets, for which indications of losses
of value materialised.
Given these factors, operating income at 30 June 2016 amounted to €26.9 million compared to operating income
of €26.1 million in the first half-year 2015.
2.5. NET INCOME AND EARNINGS PER SHARE
Financial result deteriorated, moving from an expense of €1.5 million in the first half-year 2015 to an expense of
€5.4 million for the same period in 2016. This is explained mainly by the completion of a second private
placement of bonds in November 2015 for a total amount of €60 million, with a coupon of 4.40% for the first
tranche (€15 million) and 4.8% for the second (€45 million). In a context of significantly increasing margin call
volumes over the period, the Group also secured a credit line with ABN, its market transaction clearing house, in
€ m H1 2016 H1 2015 Change in value Change in %
Current operating income 43,8 22,7 21,1 93,0%
Change in fair value of financial derivatives operational in
nature(16,8) 7,3 (24,1) -329,2%
Disposals of non-current assets (0,0) (3,4) 3,3 -99,7%
Impairment of non-current assets (0,1) (0,5) 0,4 -79,7%
Income and expenses related to changes in scope of
consolidation- - - n.a.
Operating income 26,9 26,1 0,8 3,0%
€ m H1 2016 H1 2015 Change in value Change in %
Operating income 26,9 26,1 0,8 3,0%
Cost of net debt (5,2) (1,5) (3,7) 248,3%
Other financial income and expenses (0,1) 0,0 (0,1) n.a.
Financial income/(loss) (5,4) (1,5) (3,9) 258,0%
Corporate income tax 30,5 (0,2) 30,7 n.a.
Share of net income from companies accounted for by the
equity method0,3 (0,0) 0,3 n.a.
Net income from continuing operations 52,4 24,4 28,0 114,6%
Net income from discontinued operations - (1,2) 1,2 n.a.
Net income 52,4 23,2 29,2 126,0%
of which Net income, Group share 52,4 23,2 29,2 126%
of which Net income, minority interests - - - n.a.
Direct Energie - Consolidated Financial Statements at 30 June 2016
14
the amount of €60 million and raised €55 million in shareholder loans. These two transactions substantially
increased the interest expense recognised.
The impact of current taxes for the period amounted to an expense of €4.0 million, directly linked with the
improvement in pre-tax income of the tax consolidation group, for which Direct Energie is the parent company,
and given the use of tax loss carryforwards. The impact of deferred taxes in the first half-year 2016 is €34.5
million in income due, on the one hand, to the additional use of tax loss carryforwards associated with the
Group's expected future earnings over the period extending from the second half-year 2016 until 2018 for an
amount of €14.0 million, and on the other hand, the net change in deferred taxes on temporary differences
recognised during the period for an amount of €20.5 million.
At 30 June 2016, the share of net income from companies accounted for under the equity method was €0.3
million.
Net income from discontinued operations of €(1.2) million in the first half-year 2015 corresponded mainly to the
adjustment to fair value of the interest held by the Group in the Direct Energie Distribution Company which itself
owned interests in the companies EBM Distribution Network and Gascogne Energie Service. This company had
been classified as discontinued operations according to the criteria of IFRS 5, given the progress of the sale
process initiated by the Group, and scheduled to be finalized in the fourth quarter of 2015.
Consolidated net income for the first half-year 2016 is a profit of €52.4 million compared to a profit of €23.2
million for the first half-year 2015.
Under the effects of the strong growth in the Group's income and slow growth in the average number of shares
outstanding and the average number of outstanding diluted shares, earnings per share and diluted earnings per
share at 30 June 2016 amounted to €1.28 per share and €1.21 respectively, both up more than 120% compared
to 30 June 2015.
3. REVIEW OF THE COMPANY' S CASH POSITION, CAP ITAL AND FINANCIAL D EBT
3.1. SIMPLIFIED CONSOLIDATED BALANCE SHEET
3.2. SHAREHOLDERS' EQUITY AND NET DEBT
At 30 June 2016, the Group's equity amounted to €41.4 million, an increase of €70.7 million compared to 31
December 2015. This is mainly as a result of the profits of €52.4 million for the first half-year and the positive
change in fair value of derivative hedging instruments, associated with the load profile of the Group's customers,
In eurosH1 2016 H1 2015
Earnings per share 1,28 0,57
Diluted earnings per share 1,21 0,55
€ m30-June-2016 31-Dec-2015 Change in %
Non-current assets 174,7 145,5 20%
Current assets 663,8 468,1 42%
Total Assets 838,5 613,6 37%
Shareholders' equity 41,4 (29,4) -241%
Non-current liabilities 222,5 224,5 -1%
Current liabilities 574,7 418,4 37%
Total Liabilities and shareholder's equity 838,5 613,6 37%
Direct Energie - Consolidated Financial Statements at 30 June 2016
15
amounting to €22.5 million, recorded directly in other comprehensive income in accordance with IFRS, and mainly
due to supplies of electricity volumes associated with these hedging instrument in the period.
Net debt is the difference between financial debt excluding the impact of margin calls and cash assets. At 30 June
2016 net debt amounted to €53.8 million compared to €147.9 million at year-end 2015.
This sharp reduction in net debt is due both to the decrease in cash deposits made with the Group's counterparties
as part of purchase and energy sales transactions, recorded as financial assets in the Group's accounts, a decline
that was consecutive, in particular, to changes in the market prices of commodities during the first half-year 2016
and to the Group's optimisation of its supply terms, as well as the increase in net cash flow generated by the
Group, taking into account the financing required to acquire new customers triggered by the strong growth in the
business observed in the half-year.
3.3. GROUP CASH FLOW
During the first half-year 2015 and 2016, changes in the Group's cash position was as follows:
Cash flow from operating activities
Between the first half-year 2015 and the first half-year 2016, cash flow from operating activities grew by some
€101.5 million to stand at €86.5 million at 30 June 2016.
This is due to the combination of an increase in income before taxes and financial expenses, relatively stable
working capital requirements, the change in the latter amounting to an expense of €4.2 million in the first half-
year 2016 compared to a negative impact of €50.9 million in the first half-year 2015, and the positive impact of
non-cash items amounting to €63.5 million in the first half-year 2016 compared to €11.1 million in the first half-
year 2015.
Non-cash items in 2016 mainly included the charge to a provision for a loss-making contracts of €33.0 million
relating to the transport capacity reserved by the Group between Belgium, the Netherlands and France and the
€ mH1 2016 H1 2015
Income before taxes and financial expenses 27,3 24,9
Non-cash items 63,5 11,1
Change in working capital requirement (4,2) (50,9)
Net cash flow from operating activities 86,5 (15,0)
Property plant and equipment (16,5) (12,2)
Fixed financial assets 39,0 (4,2)
Changes in consolidation scope - -
Net cash flows used in investment activities 22,5 (16,4)
Change in borrowings 56,6 24,6
Net financial expenses (2,3) (0,8)
Treasury shares 0,0 0,0
Other flows (5,1) (6,1)
Net cash flows used in financing activities 49,3 17,7
Net change in cash and cash equivalents 158,3 (13,7)
Cash and cash equivalents at beginning of year 32,0 31,3
Cash and cash equivalents at end of year 190,2 17,6
Direct Energie - Consolidated Financial Statements at 30 June 2016
16
impact of the negative change in fair value of financial instruments totalling €16.8 million. This is attributable to
the sharp decrease in fair value of Gas derivatives financial instruments related, in particular, to the unwinding
of the period of gas-oil hedging swaps, whose fair value was strongly positive at 31 December 2015.
Adjusted for non-cash items, income before taxes and financial expenses at 30 June 2016 increased by €54.8
million compared to the same income adjusted for non-cash items at 30 June 2015, reflecting an upswing in the
Group's activity, particularly in electricity and gas sales in France for individual customers and in particular "Major
Account" customers (industrial and multi-site customers and public authorities) with the end of the "yellow" and
"green" regulated sales tariffs effective from 31 December 2015.
The seasonal nature of the Group's business tends to increase the need for working capital in the first half-year.
Individual customers are predominantly annualised. The Group collects payments on a straight-line basis until
maturity of the balance invoice in line with their payment plan, while energy purchases (gas, oil and electricity)
are mostly settled within the month following delivery. However, since 1 January 2016, this rate differential
between the linear method for collecting customer receivables and the payment of energy purchases was
partially offset by a regulatory change. The domestic tax on the end consumption of electricity (TICFE), paid by
the Group on a quarterly basis on the 25th of the month following the end of each quarter, has replaced the
Contribution to the Public Electricity Service (Contribution au Service Public de l’Electricité (CSPE)) which, prior to
that date, was paid on a monthly basis. These two opposing impacts, added to the Group's efforts to optimize
the recovery of its customer receivables, explain the relative stability of working capital requirements for the
first half-year 2016.
Cash flows from investing activities
Cash flow from investing activities amounted to €22.5 million in the first half-year 2016 compared to a negative
impact of €16.4 million in the first half-year 2015.
This positive impact on the Group's cash position is mainly due to changes in commodity market prices during
the first half-year 2016 which, combined with energy deliveries and forward purchases made during the period,
allowed the Group to recover €35.6 million in deposits and guarantees, paid at year-end 2015 to the ABN clearing
house and other counterparties with whom the Group makes energy purchase and sales transactions to supply
its customer portfolio.
Conversely, investments have had an impact on the Group's cash position and increased to €16.5 million over
the half-year compared to €12.2 million over the same period in 2015. This increase in investments is primarily
related to increasing customer acquisition costs, reflecting the momentum and accelerated growth of the
business.
Cash flows from financing activities
Cash flows from financing activities reflect the continued strengthening of the Group's financial flexibility with
the aim, in particular, of improving its ability to absorb significant variations in gas and electricity market prices
as observed in late 2015 and early 2016, while pursuing its ongoing strategy for commercial success. The positive
impact of financing activities in the first half-year 2016 was primarily related to changes in borrowing due to:
- the creation of shareholder loans in the amount of €55 million;
- the negotiation of a short-term credit line with ABN, the Group’s regulated energy market clearing
house, for a total amount of €60 million;
- repayment of the RCF used at the end of 2015 totalling €60 million.
Other financing flows for the period corresponded to the payment of net financial interest of €2.3 million, an
increase of €1.5 million compared to the first half-year 2015, following, in particular, the issue of new bonds
during the second half of 2015, the arrangement of shareholders loans in early 2016, the payment of a €8.2
Direct Energie - Consolidated Financial Statements at 30 June 2016
17
million dividend, up €2.1 million compared to the amount paid in 2015, and the receipt of €3.2 million resulting
from exercise of the share subscription options.
4. OUTLOOK FOR 2016
The Company highlights the objectives that it has set for 2016, which are detailed in its 2015 registration
document filed on 28 April 2016 with the Financial Market Authority (Autorité des Marchés Financiers (AMF))
under the number R. 16-037 and available on the Company's website www.direct-energie.com (the "2015
Registration Document"):
I. revenue growth of more than 35%, at temperatures consistent with seasonal averages;
II. growth of more than 20% of its customer portfolio in terms of number of sites; and
III. growth in current operating income of more than 30%, at temperatures consistent with seasonal
averages.
Given the commercial success observed during the period, combined with the agreement finalised with ERDF on
the one-year extension of the service contract, the assumption by GrDF of unpaid distribution costs, the expected
impact of the two retroactive tariff orders made pursuant to the decision of the Conseil d’Etat in June 2016 and,
despite recording in the interim accounts a provision for onerous contracts for long-term transit capacity among
the Netherlands, the Belgium and France, the Company revises its annual targets for 2016 as follows:
I. revenue over €1.5 billion, at temperatures consistent with seasonal averages;
II. over 2 million customer sites in the portfolio;
III. current operating income of around €85 million at temperatures consistent with seasonal averages.
Given the expected commercial performances in 2016, the Group will update its customer portfolio growth
objectives by 2018, at the next annual results publication.
Direct Energie - Consolidated Financial Statements at 30 June 2016
18
5. RISK FACTORS AND REL ATED-PARTY TRANSACTIONS
5.1. RISK FACTORS
The risk factors that the Group faces are described in the 2015
Registration Document.
The nature of these risks has not changed significantly during the first half-year of the 2016 financial year. These
risks are likely to occur during the second half-year 2016 or in subsequent years.
5.2. RELATED-PARTY TRANSACTIONS
The main transactions carried out between related parties are disclosed in Note 27 to the consolidated interim
financial statements.
Direct Energie - Consolidated Financial Statements at 30 June 2016
19
II. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR 2016
INCOME STATEMENT ...................................................................................... Erreur ! Signet non défini.
STATEMENT OF COMPREHENSIVE INCOME .......................................................................................... 21
STATEMENT OF FINANCIAL POSITION ................................................................................................... 22
STATEMENT OF CHANGES IN EQUITY.................................................................................................... 23
STATEMENTS OF CASH FLOWS .............................................................................................................. 24
INFORMATION ON THE DIRECT ENERGIE GROUP ................................................................................. 25
Note 1. ACCOUNTING PRINCIPLES AND METHODS............................................................................... 25
Note 2. HIGHLIGHTS OF THE YEAR ........................................................................................................ 28
Note 3. MAIN CHANGES IN SCOPE OF CONSOLIDATION ...................................................................... 30
Note 4. REVENUE FROM ORDINARY ACTIVITIES ................................................................................... 31
Note 5. COST OF SALES .......................................................................................................................... 31
Note 6. PERSONNEL EXPENSES.............................................................................................................. 31
Note 7. OTHER OPERATIONAL INCOME AND EXPENSES ....................................................................... 32
Note 8. FINANCIAL INCOME/(LOSS) ...................................................................................................... 33
Note 9. INCOME TAX ....................................................................................... Erreur ! Signet non défini.
Note 10. EARNINGS PER SHARE ............................................................................................................ 35
Note 11. INTANGIBLE ASSETS ................................................................................................................ 36
Note 12. PROPERTY, PLANT AND EQUIPMENT ..................................................................................... 38
Note 13. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES ........................................................... 40
Note 14. INVENTORY ............................................................................................................................. 41
Note 15. TRADE RECEIVABLES ............................................................................................................... 42
Note 16. OTHER CURRENT AND NON-CURRENT ASSETS ...................................................................... 42
Note 17. CASH AND CASH EQUIVALENTS .............................................................................................. 43
Note 18. SHAREHOLDERS' EQUITY ........................................................................................................ 43
Note 19. SHARE-BASED PAYMENTS ...................................................................................................... 45
Note 20. PROVISIONS ............................................................................................................................ 45
Note 21. LEASE-FINANCE AGREEMENTS ............................................................................................... 47
Note 22. TRADE PAYABLES .................................................................................................................... 48
Note 23. OTHER CURRENT AND NON-CURRENT LIABILITIES ................................................................ 48
Note 24. FINANCIAL ASSETS AND LIABILITIES ...................................................................................... 48
Note 25. SEGMENT REPORTING ............................................................................................................ 60
Note 26. OFF-BALANCE SHEET COMMITMENTS ................................................................................... 62
Note 27. RELATED PARTIES ................................................................................................................... 63
Note 28. EXECUTIVE COMPENSATION .................................................................................................. 63
Note 29. POST-REPORTING EVENTS ...................................................................................................... 64
Note 30. SCOPE OF CONSOLIDATION .................................................................................................... 65
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 20
INCOME STATEMENT
In thousands of euros Note 30/06/2016 30/06/2015
Revenue from ordinary activities 4 863 565 505 653
Cost of sales 5 (756 490) (427 281)
Gross margin 107 075 78 373
Personnel expenses 6 (17 167) (13 631)
Other operating income and expenses 7 (31 506) (31 308)
Depreciation and amortisation (14 575) (10 721)
Current operating income 43 826 22 713
Changes in fair value of Energy financial derivative
instruments operational in nature(16 781) 7 322
Disposals of non-current assets 11-12 (11) (3 356)
Impairment of non-current assets (112) (550)
Operating income 26 923 26 129
Cost of net debt (5 237) (1 504)
Other financial income and expenses (138) 2
Financial income/(loss) 8 (5 375) (1 501)
Corporate income tax 9 30 533 (190)
Share of net income from companies accounted for by the
equity method13 332 (14)
Net income from continuing operations 52 414 24 424
Net income from discontinued operations - (1 236)
Net income 52 414 23 189
of which Net income, Group share 52 414 23 189
of which Net income, minority interests - -
Earnings per share 10 1,28 0,57
Diluted earnings per share 10 1,21 0,55
Earnings per share from continuing operations 10 1,28 0,60
Diluted earnings per share from continuing operations 10 1,21 0,58
Earnings per share from discontinued operations 10 - (0,03)
Diluted earnings per share from discontinued operations 10 - (0,03)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 21
STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
Total GroupNon-controlling
interestsTotal Group
Non-controlling
interests
Net income 52 414 52 414 - 23 189 23 189 -
Available-for-sale financial
assets - - - - - -
Deferred tax impact - - - - - -
Cash flow hedges 22 469 22 469 - 20 395 20 395 -
Deferred tax impact - - - - - -
Share in profit of associates- - - 8 8 -
Total recyclable items 22 469 22 469 - 20 403 20 403 -
Actuarial gains and losses - - - - - -
Deferred tax impact - - - - - -
Total non-recyclable items- - - - - -
Total Comprehensive income74 883 74 883 - 43 591 43 591 -
30/06/2016 30/06/2015
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 22
STATEMENT OF FINANCIAL POSITION
In thousands of euros Note 30/06/2016 31/12/2015
Intangible assets 11 44 182 40 949
Property, plant and equipment 12 46 345 47 661
Investments in associates 13 1 306 902
Non-current derivative financial instruments 24 7 918 8 494
Other non-current financial assets 24 1 146 1 458
Other non-current assets 16 5 759 5 279
Deferred tax assets 9 68 085 40 780
Non-current assets 174 741 145 522
Inventory 14 23 313 36 245
Trade receivables 15 321 604 220 596
Current derivative financial instruments 24 23 666 35 843
Other current financial assets 24 40 511 70 688
Other current assets 16 63 223 69 500
Cash and cash equivalents 17 191 436 35 230
Current assets 663 752 468 102
TOTAL ASSETS 838 492 613 624
Share capital and share premiums 12 193 9 003
Retained earnings and net income / (loss) 116 751 71 717
Treasury shares (52) (88)
Other comprehensive income (87 512) (109 981)
Shareholders' Equity - Group share 41 380 (29 350)
Non-controlling interests - -
TOTAL SHAREHOLDERS' EQUITY 18 41 380 (29 350)
Non-current provisions 20 33 041 5 051
Non-current derivative financial instruments 24 57 517 81 354
Other non-current financial liabilities 24 115 413 114 829
Other non-current liabilities 23 2 545 2 164
Deferred tax liabilities 9 13 941 21 130
Non-current liabilities 222 457 224 528
Current provisions 20 11 692 6 776
Trade payables 22 128 624 187 818
Current derivative financial instruments 24 89 246 83 851
Other current financial liabilities 24 134 951 69 113
Other current liabilities 23 210 143 70 887
Current liabilities 574 656 418 446
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 838 492 613 624
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 23
STATEMENT OF CHANGES IN EQUITY
* Changes in fair value of derivative financial hedging instruments, which, at 30 June 2016, corresponded
exclusively to energy purchases, are recorded net of tax in other comprehensive income for the effective portion
of the hedge and in income for the period for the ineffective portion. The change in fair value of €22,469
thousand on the first half-year 2016, on a temporary basis, is primarily related to deliveries recorded over the
first half-year 2016 for hedging instruments open at 31 December 2015. The balance as at 30 June 2016 will be
subsequently recycled to income, symmetrically to the hedged item when physical delivery of the corresponding
energy purchases takes places.
In thousands of euros
Changes in fair
valueOther
Shareholders' Equity
at 31/12/2014,
historical
4 079 4 923 48 534 (101) (21 590) (527) 35 319 - 35 319
Impacts of IFRIC 21 - - 704 - - - 704 - 704
Shareholders' Equity
at 01/01/2015,
restated
4 079 4 923 49 238 (101) (21 590) (527) 36 022 - 36 022
Net income - - 23 189 - - - 23 189 - 23 189
Other comprehensive
income- - - - 20 395 8 20 403 - 20 403
Comprehensive
income- - 23 189 - 20 395 8 43 591 - 43 591
Capital increase- - - - - - - - -
Options - - 559 - - - 559 - 559
Treasury shares
purchases/sales- - - 27 - - 27 - 27
Dividends paid - - (6 118) - - - (6 118) - (6 118)
Shareholders' Equity
at 30/06/2015
4 079 4 923 66 868 (74) (1 195) (519) 74 082 - 74 082
Shareholders' Equity
at 31/12/2015
4 079 4 923 71 717 (88) (109 981) 0 (29 350) - (29 350)
Net income - - 52 414 - - - 52 414 - 52 414
Other comprehensive
income18 - - - - 22 469 - 22 469 - 22 469
Comprehensive
income- - 52 414 - 22 469 - 74 883 - 74 883
Capital increase- - - - - - - - -
Options exercised 43 3 148 - - - - 3 190 - 3 190
Options 19 - - 862 - - - 862 - 862
Treasury shares
purchases/sales- - - 36 - - 36 - 36
Dividends paid - - (8 242) - - - (8 242) - (8 242)
Shareholders' Equity
at 30/06/20164 122 8 071 116 751 (52) (87 512) 0 41 380 - 41 380
Non-
controlling
interests
Total
Shareholders'
equity
Note
Other comprehensive
incomeShare
capital
Share
premiums
Retained
earnings
and net
income /
(loss)
Treasury
shares
Shareholders'
Equity
Group share
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 24
STATEMENT OF CASH FLOWS
In thousands of euros 30/06/2016 30/06/2015
Consolidated net income 52 414 23 189
Tax expenses/income (30 533) 190
Financial income/(loss) 5 375 1 501
Income before taxes and financial expenses 27 255 24 880
Depreciation and amortisation 14 575 10 721
Impairment 112 550
Provisions 31 446 3 168
Expenses related to share-based payments 862 559
Change in fair value of financial instruments 16 781 (8 848)
Other financial items with no cash impact 11 4 892
Share of income from associates (332) 14
Items with no cash impact 63 456 11 055
Change in working capital requirement (4 248) (50 934)
Net cash flow from operating activities 86 463 (14 999)
Acquisition of fixed assets (16 502) (12 175)
Disposals of fixed assets - 3
Change in deposits and guarantees 35 644 (3 457)
Change in financial assets - (164)
Net change in loans originated by the company 3 356 (604)
Net cash flows used in investment activities 22 497 (16 398)
Sums received from shareholders during capital increases 3 190 -
Treasury shares 36 27
Proceeds from borrowings 117 494 25 128
Repayment of borrowings (60 870) (533)
Interest paid (2 975) (1 139)
Interest received 657 355
Dividends paid (8 242) (6 118)
Net cash flows used in financing activities 49 291 17 721
Net change in cash and cash equivalents 158 250 (13 676)
Net change in cash and cash equivalents from discontinued operations - (28)
Cash and cash equivalents at beginning of year 31 993 31 308
Cash and cash equivalents at end of year 190 243 17 605
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 25
INFORMATION ON THE DIRECT ENERGIE GROUP
Direct Energie (the Company) is a société anonyme (public limited company) incorporated under French law,
registered in France. The Group's registered office is located at 2 bis rue Louis Armand Paris 75015, France, and
its shares are listed on the regulated Euronext Paris market.
Direct Energie covers all aspects of the energy value chain, operating in both the production and supply of
electricity and natural gas, thus ensuring a balanced and sustainable development for the Group. Direct Energie
is the leading alternative multi-energy supplier in France.
The consolidated financial statements published by Direct Energie and its subsidiaries (the Group) are presented
in euros and rounded to the nearest thousand, unless stated otherwise.
On 28 September 2016 the Board of Directors approved and authorised the publication of the Group's
consolidated financial statements at 30 June 2016.
Note 1. ACCOUNTING PRINCIPLES AND METHODS
1.1 Declaration of conformity
The interim consolidated financial statements published by Direct Energie SA and its subsidiaries ("the Group"),
which cover the six-month period ended 30 June 2016, are prepared in accordance with IAS 34 "Interim Financial
Reporting", which allows for the inclusion of a selection of explanatory notes. The interim consolidated financial
statements do not therefore include all notes and disclosures required by IFRS for annual financial statements
and should be read in conjunction with the consolidated financial statements for the 2015 financial year.
With the exception of the changes described below, the accounting methods and principles are identical to those
applied in the consolidated financial statements at 31 December 2015 and described in Note 1 "Accounting
Methods and Principles" in the consolidated financial statements at 31 December 2015.
Comparative data for 2015 figures have been prepared on the same basis.
1.2 Change in accounting standards
The accounting principles and methods applied to the consolidated financial statements at 30 June 2016 are
identical to those used in the consolidated financial statements at 31 December 2015, with the exception of
mandatory IFRS standards, amendments and interpretations for the financial year beginning on 1 January 2016
and which the Group did not adopt early.
1.2.1 Amendments which are mandatory as from 1 January 2016
The following amendments, adopted by the European Union, have become mandatory as of 1 January 2016:
- Amendments to IAS 19 "Employee Benefits";
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 26
- Amendments to IFRS 11 "Acquisition of an interest in a joint operation";
- The amendments to IAS 16 and IAS 38 "Acceptable methods of depreciation and amortisation";
- Amendments to IAS 1 "Disclosure Initiative";
- IFRS 2010 - 2012 Annual Improvements Cycle;
- IFRS 2012 - 2014 Annual Improvements Cycle.
Application of these amendments did not materially impact the Group's consolidated financial statements at 30
June 2016.
1.2.2 Texts not adopted by the European Union and not early adopted by the Group
- IFRS 9 "Financial Instruments";
- IFRS 15 "Revenue from Contracts with Customers";
- IFRS 16 "Leases";
- Amendments to IFRS 10 and IAS 28 "Sale or transfer of assets between an investor and its associate/joint
venture";
- Amendments to IFRS 10, IFRS 12 and IAS 28 "Investment entities: applying the consolidation exception";
- Amendments to IAS 12 "Recognition of Deferred Tax Assets for Unrealised Losses";
- Amendments to IAS 7 "Disclosure Initiative";
- Clarifications to IFRS 15 "Revenue with Contracts from Customers";
- Amendments to IFRS 2 "Clarifications of classification and measurement of share-based Payment
Transactions".
The potential impact of these standards and amendments on the Group accounts remains under review.
1.3 Use of estimates and judgements
The preparation of financial statements requires the use of judgements, estimates and assumptions in
determining the value of assets and liabilities, income and expenses for the year and for the evaluation of
contingent assets and liabilities existing at the reporting date. Depending on changes in these assumptions or
economic conditions that may differ from those existing at the reporting date, the amounts reported in the
Group's future financial statements may differ from current estimates.
The assumptions which the Group uses to make estimates and judgements are mainly the following:
- Measurement of the fair value of assets acquired and liabilities assumed in business combinations;
- measurement and impairment losses related to goodwill and other fixed assets;
- the measurement of provisions;
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 27
- energy un-metered (“Energy in the meter”) revenues;
- financial instrument valuations;
- measurement of recognized tax loss carry-forwards.
Any change in assumption in these areas could have a material impact on the Group's financial statements.
Further information on these estimates is presented in Note 1 to the annual consolidated financial statements
for the 2015 financial year.
1.4 Specific items relating to preparation of the interim financial statements
1.4.1 Seasonal nature of the business
By nature, the Group's activities are very sensitive to changes in climate. Indicators and results presented in the
interim consolidated financial statements at 30 June 2016 are not necessarily indicative of those that will be
presented in the financial statements at 31 December 2016.
1.4.2 Income tax
The income tax expense for the interim period is typically calculated by applying the last known estimated
effective tax rate on the net income of the consolidated companies for each entity or tax group.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 28
Note 2. HIGHLIGHTS OF THE YEAR
2.1 Extension of the ERDF services contract
During the second quarter of 2016, the Group and ErDF (now ENEDIS) signed a one-year extension of the services
contract which had ended on 30 September 2015. This extension, retroactively commencing on 1 October 2015,
led to recognising €21.7 million in income in the first half-year 2016.
2.2 Rider to the transmission contract with GRDF
By a decision of 2 June 2016, the Paris Court of Appeal upheld the decision handed down by the CoRDiS on 19
September 2014. This decision established the principle that the natural gas supplier was not responsible for the
unpaid share of past or future distribution costs of the distribution network operator (GRDF). In pursuance of
this decision of the CoRDiS (Comité de règlement des différends et des sanctions), a contractual agreement was
formalised between the Parties during the second quarter of 2016 under which, in late May 2016, GRDF repaid
Direct Energie the unpaid share of distribution costs incurred prior to 31 December 2015 amounting to nearly
€10 million.
The Court of Appeal also held that the supplier was to be paid for the services performed on behalf of GRDF
through which the end customer obtained access to the distribution networks. In pursuance of this decision,
GRDF must first offer Direct Energie, within a period of two months, an amendment to the Distribution Network
Access Agreement offering compensation that is "proportionate and equitable to the costs avoided" by GRDF,
and also to pay Direct Energie remuneration at a price fixed by the Parties for past periods (since the date of
signing of the distribution agreement in 2005). No agreement was reached between the Parties at the end of the
two-month period and as such, the Group has not yet recognised any related income in its accounts.
2.3 Decision of the Conseil d’Etat (France's highest administrative court) on Regulated Tariffs
for Electricity Sales
In June 2016 the Conseil d’Etat put an end to two tariffs decrees. The decree of 28 July 2014 was cancelled on
the grounds that the principle of legal certainty was not met in respect of blue tariffs for the period between 1
August 2014 and 31 October 2014. As concerns the decree of 30 October 2014, it was cancelled on the grounds
that it did not take into account retroactive tariff adjustments that were necessary in the case of residential blue
and green tariffs for the period 1 November 2014 and 31 July 2015. The Conseil d'Etat gave ministers a three-
month deadline to implement these amending decisions.
The Group will be impacted by such cancellations and corresponding amending decisions, which will trigger a
positive tariff adjustment, once these amending decisions have been published by the competent ministers.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 29
2.4 Provision for loss-making contracts on gas interconnection capacities
As part of its gas supply strategy, the Group concluded in 2009 several contracts with French (GRTgaz), Belgian
(Fluxys) and Dutch (GTS) gas transmission system operators for the reservation, from 2011, of gas import
capacities through Belgium, for periods extending through 2027. The purpose of these contracts was to ensure
security in the gas supply as part of the Group's activities over the long-term, according to the principles
governing the procurement of a licence to supply natural gas in France.
Beginning in 2013, the market environment brought to light the current system's inability to ensure security of
supply, resulting, in particular, in inadequate storage capacity subscriptions. The government therefore initiated
consultations to clarify the obligations incumbent on suppliers in the field, as well as the available instruments
and resources. The specific aim of these consultations was to reform the storage subscription obligations.
During these consultations, the Group maintained its consistent position, whereby, when defining supplier
obligations in terms of security of supply, due consideration should be given to all available modulation tools,
including those related to gas import capacities in France. However, pending the finalisation of this reform and
without jumping to conclusions on the final outcome, the authorities have asked the Group to subscribe for
annual storage capacities independently of its own gas interconnection capacities.
Based on these consultations, the public authorities drafted the reform, which was reviewed by the Conseil d’Etat
in the second quarter of 2016. The draft reform does not reflect the Group's proposals to explicitly consider the
Gas Import capacities of each supplier among the available instruments or resources in terms of supply security.
Furthermore, in April 2016 the Conseil d’Etat, called to rule in the dispute initiated in 2014 by Eni and Uprigaz,
upheld that the authorities were entitled to impose an obligation on gas suppliers to subscribe storage capacities
in order to ensure supply security, without considering the interconnection capacities specific to each supplier
as an instrument allowing the latter to avoid the same. The Court of Justice of the European Union has been
called solely to resolve the issue concerning the geographical location of the storages included in meeting this
obligation.
In these circumstances and irrespective of implementation period of the draft reform, the contracts can no longer
be considered as participating directly in the obligations inherent to the Group's gas operations with respect to
security of supply, without there being any expectation of a favourable development in the regulations in the
short-term.
Accordingly, at the reporting date these contracts on access to gas interconnections were treated as onerous
contracts under IAS 37, since:
- it is clearly no longer possible to regard these as capable of meeting the Group's obligations in terms of
security of supply; and
- the costs associated with these contracts over their remaining life, with no prospect of early
termination, are much higher than their market value.
A provision for onerous contracts in the amount of €33.0 million has been recognised in the financial statements.
2.5 Strengthening of the Group's financial structure
During the first quarter of 2016, deposits paid in cash by the Group's counterparties to hedge changes in the fair
value of forward energy sales and purchases until such time as their physical delivery takes place, experienced
strong growth, directly related to the decline in wholesale electricity prices observed over the period.
The Group has secured new funding to offset this increase:
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 30
- shareholder loans for a total amount of €55 million on the closing date of the accounts;
- an additional short-term credit line with the Group’s regulated energy market clearing house, for a total
amount of €60 million;
- a €60 million increase in its bank revolving credit facility rising the usable amount to €120 million.
With a rebound in market prices in the second quarter, the Group had at 30 June 2016 nearly €177 million in
short-term financing sources in addition to available cash.
Note 3. MAIN CHANGES IN SCOPE OF CONSOLIDATION
No significant change in scope of consolidation took place during the first half-year 2016.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 31
Note 4. REVENUE FROM ORDINARY ACTIVITIES
Note 5. COST OF SALES
Note 6. PERSONNEL EXPENSES
Share-based payments and expenses related to termination benefits are detailed in Note 19 "Share-based
payments" and Note 20.2 "Provisions for employee benefits" respectively.
In thousands of euros 30/06/2016 30/06/2015
Electricity sales 383 425 206 410
Gas sales 93 935 79 807
Service sales 368 451 210 480
Other income 13 198 9 823
Revenues excluding Energy Management 859 008 506 520
Energy Management Margin - Electricity (1 878) (939)
Energy Management Margin - Gas 1 240 73
Energy Management Margin - Production 5 195 -
Energy Management Margin 4 557 (867)
Revenue from ordinary activities 863 565 505 653
In thousands of euros 30/06/2016 30/06/2015
Energy purchases (335 315) (202 314)
Transmission and DNO services (400 952) (213 731)
Other costs (5 876) (5 297)
Change in inventories (14 348) (5 938)
Cost of sales (756 490) (427 281)
In thousands of euros 30/06/2016 30/06/2015
Salaries and employer contributions (16 049) (13 014)
Expenses related to termination benefits (256) (58)
Share-based payments (862) (559)
Personnel expenses (17 167) (13 631)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 32
Note 7. OTHER OPERATIONAL INCOME AND EXPENSES
Other operating income and expenses are as follows:
They consist mainly of:
- external costs specifically related to managing the customer relationship, legal services and advice, and
external communication;
- a positive impact recorded under "Bad debt" and associated with the repayment, during the first half-
year 2016, by the gas distribution network operator (GRDF) of the unpaid share of distribution costs
prior to 31 December 2015 (see Note 2.2 "Rider to the transmission contract with GRDF").
In thousands of euros 30/06/2016 30/06/2015
Capitalised production 1 280 1 439
Operating subsidies 7 106
Other income 4 548 4 004
Other operating income 5 835 5 549
External expenses (36 763) (22 829)
Taxes (5 133) (2 419)
Bad debt 2 843 (8 383)
Net increase in current asset provisions 1 460 (1 595)
Net increase in provisions for risks and charges 447 (1 513)
Other expenses (196) (117)
Other operating expenses (37 341) (36 856)
Other operating income and expenses (31 506) (31 308)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 33
Note 8. FINANCIAL INCOME/(LOSS)
8.1 Cost of net debt
This item primarily includes interest on bonds, interest on shareholder loans, interest expenses on guarantees,
interest expense on the future markets, interest on bank loans and draws on credit facilities, bank interest and
other bank charges, interest income on cash investments and shareholder loans with Group entities not
consolidated by the full consolidation method and the change in fair value of marketable securities and cash
equivalents.
Interest expense includes interest on bonds and bank loans, interest on shareholder loans set up in the first half-
year 2016, interest on drawings of credit facilities, interest on deposits granted at the Group's request by banks
to certain counterparties and interest paid on the future markets.
8.2 Other financial income and expenses
In thousands of euros 30/06/2016 30/06/2015
Cost of net debt (5 237) (1 504)
Other financial income and expenses (138) 2
Financial income/(loss) (5 375) (1 501)
In thousands of euros 30/06/2016 30/06/2015
Interest expense (5 894) (1 858)
Interest income 673 175
Net income from marketable securities and cash equivalents (15) 180
Cost of net debt (5 237) (1 504)
In thousands of euros 30/06/2016 30/06/2015
Other financial income 0 0
Total other financial income 0 0
Provision accretion (0) 3
Other financial expenses (138) (1)
Total other financial expenses (138) 2
Other financial income and expenses (138) 2
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 34
Note 9. INCOME TAX
9.1 Breakdown of income tax expenses
The tax income recognised in income for the period amounted to €30,533 thousand (compared to an expense of
€190 thousand at 30 June 2015). The breakdown of this tax income is as follows:
9.2 Effective tax income
The change in effective tax is mainly explained by the recognition by the Group of deferred tax income in the first
half-year 2016, amounting to €34,494 thousand (compared to €1,252 thousand for the first half-year 2015).
The €34.5 million impact of deferred taxes on the period reflects:
- firstly, the additional recognition of tax loss carryforwards associated with the Group's future earnings
forecasts for a total impact of €14.0 million (compared to the recognition of tax loss carryforwards of
€4.5 million at 30 June 2015). The expected timeline to recover the recognized loss carryforwards covers
the second half of 2016, and the years 2017 and 2018. It takes into account the regulatory environment
in which the Group operates, development opportunities for its customer portfolio and the forecasted
evolution of its supply costs, which are the three main items affecting the Group's profitability
prospects;
- secondly, the net change in deferred taxes on temporary differences recognised during the period for a
total amount of €20.5 million.
In thousands of euros 30/06/2016 30/06/2015
Tax payable (3 961) (1 442)
Deferred tax 34 494 1 252
Corporate income tax 30 533 (190)
In thousands of euros 30/06/2016 30/06/2015
Net income 52 414 23 189
Share in profit/(loss) of associates (332) 14
Corporate income tax (30 533) 190
Discontinued operations - 1 236
Pre-tax profit of consolidated companies 21 549 24 628
Actual tax (expense)/income 30 533 (190)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 35
Note 10. EARNINGS PER SHARE
At 30 June 2016, as in 2015, the weighted average number of shares outstanding is the average number of Direct
Energie shares outstanding over the period.
As in 2015, at 30 June 2016 the calculation of diluted net earnings per share did not take into account stock
option plans whose exercise price is higher than the average price of Direct Energie shares for the first half-year.
At 30 June 2016, seven stock option plans had a lower exercise price than the average price of Direct Energie
shares over the six-month period, which amounted to €22.18 in the first half-year 2016. These subscription plans
have thus been considered in calculating the diluted earnings per share.
At 30 June 2015, four stock option plans had a lower exercise price than the average price of Direct Energie
shares over the six-month period, which amounted to €10.91 in the first half-year 2015. These subscription plans
had thus been considered in calculating the diluted earnings per share.
30/06/2016 30/06/2015
In thousands of euros
Net income, Group share - Continuing operations 52 414 24 424
Net income, Group share - Discontinued operations - (1 236)
Net income, Group share 52 414 23 189
Impact of dilutive instruments - -
Diluted net income, Group share 52 414 23 189
In thousands of shares
Average number of shares outstanding 40 911 40 793
Impact of dilutive instruments 2 285 1 416
Diluted average number of shares outstanding 43 196 42 209
In euros
Earnings per share 1,28 0,57
Diluted earnings per share 1,21 0,55
Earnings per share from continuing operations 1,28 0,60
Diluted earnings per share from continuing operations 1,21 0,58
Earnings per share from discontinued operations - (0,03)
Diluted earnings per share from discontinued operations - (0,03)
NUMERATOR
DENOMINATOR
EARNINGS PER SHARE
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 36
Note 11. INTANGIBLE ASSETS
11.1 Change in intangible assets
In thousands of euros
Brands and
licences
Customer
acquisition
Other intangible
assets
Assets in
progressTotal
At 31 December 2014 8 806 138 968 30 276 3 402 181 452
Acquisitions 563 19 565 4 326 173 24 627
Disposals - - - -
Changes in scope 65 - - - 65
Other changes (543) (37) 366 (3 296) (3 509)
At 31 December 2015 8 891 158 497 34 968 279 202 635
Acquisitions 1 783 11 488 2 021 589 15 881
Disposals - - - - -
Changes in scope - - - - -
Other changes (10) - 93 (93) (10)
At 30 June 2016 10 664 169 985 37 082 775 218 505
At 31 December 2014 (6 589) (109 169) (24 293) (673) (140 724)
Depreciation and amortisation (1 366) (17 149) (3 660) - (22 175)
Disposals - - - - -
Changes in scope - - - - -
Other changes 540 - - 673 1 213
At 31 December 2015 (7 415) (126 318) (27 953) 0 (161 686)
Depreciation and amortisation (1 389) (9 258) (2 000) - (12 648)
Disposals - - - - -
Changes in scope - - - - -
Other changes 10 - - - 10
At 30 June 2016 (8 794) (135 576) (29 953) 0 (174 323)
At 31 December 2014 2 216 29 799 5 983 2 729 40 728
At 31 December 2015 1 476 32 179 7 015 279 40 949
At 30 June 2016 1 870 34 408 7 129 775 44 182
GROSS VALUES
DEPRECIATION AND AMORTISATION
NET VALUES
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 37
11.2 Customer acquisition costs
During the first half-year 2016, the Group capitalised €11,488 thousand of customer acquisition costs as part of
its sales drive (compared to €8,364 thousand in the first half-year 2015).
11.3 Other intangible assets
Other intangible assets consist mainly of IT developed by the company for its business and management
activities.
11.4 Intangible assets in progress
Intangible assets in progress at 30 June 2016 correspond mainly to the recognition of expenses incurred for the
acquisition of customers which have not been transferred into Direct Energie's supply perimeter and the costs
related to the installation and configuration of software for the part still under development.
At 31 December 2015, the decrease of €3,296 thousand of assets in progress mainly related to the write-off of
fixed assets for the Group's combined cycle gas turbine development projects, which had become obsolete given
the delays in the completion of these projects on the Hambach and Verberie sites. An impairment provision for
all the assets in progress for the Verberie project was booked prior to their write-off in 2015.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 38
Note 12. PROPERTY, PLANT AND EQUIPMENT
12.1 Change in property, plant and equipment
At 31 December 2015, changes in the scope of consolidation had a net impact of €45,549 thousand on tangible
assets. They result from the integration, at their fair value, of the assets of the company 3CB following the
acquisition carried out on 30 December 2015. These consist primarily of production assets, required for electricity
generation from the combined-cycle power plant, and land located in Bayet Allier.
In thousands of euros
Land and
buildings
Production
facilities
Other fixed
assets
Assets in
progressTotal
At 31 December 2014 6 - 3 064 6 349 9 418
Acquisitions - - 265 857 1 122
Disposals - - (13) - (13)
Changes in scope 4 727 38 041 251 2 529 45 549
Other changes - - 80 (7 168) (7 087)
At 31 December 2015 4 733 38 041 3 648 2 567 48 990
Acquisitions - 128 511 (17) 622
Disposals - - (3) - (3)
Changes in scope - - - - -
Other changes - - - (11) (11)
At 30 June 2016 4 733 38 169 4 155 2 540 49 598
At 31 December 2014 (6) - (1 644) (2 826) (4 476)
Depreciation and
amortisation- - (326) - (326)
Disposals - - 9 - 9
Changes in scope - - - - -
Other changes - - 676 2 788 3 464
At 31 December 2015 (6) - (1 284) (38) (1 329)
Depreciation and
amortisation(83) (1 539) (305) - (1 927)
Disposals - - 3 - 3
Changes in scope - - - - -
Other changes - - - - -
At 30 June 2016 (89) (1 539) (1 586) (38) (3 253)
At 31 December 2014 - - 1 420 3 523 4 943
At 31 December 2015 4 727 38 041 2 363 2 529 47 661
At 30 June 2016 4 644 36 630 2 570 2 501 46 345
GROSS VALUES
DEPRECIATION AND AMORTISATION
NET VALUES
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 39
12.2 Land and buildings
Land and buildings acquired for €4,727 thousand in 2015 correspond to the fair value of land and buildings owned
by 3CB.
12.3 Production facilities
Production facilities include the fair value of the generation assets of the combined cycle power plant located in
Bayet.
12.4 Property, plant and equipment in progress
Property, plant and equipment in progress mainly include current developments within the company 3CB.
At 31 December 2015, the €7,168 thousand decrease reported under "Other movements" in the item "Assets in
progress" included €6,105 thousand for the write-off of property, plant and equipment used in the development
of the Group's combined cycle gas turbine projects which had become obsolete as a result of delays in the
completion of these projects, located in Hambach (for €3,318 thousand) and Verberie (€2,788 thousand).
Moreover, an impairment provision for all the assets in progress for the Verberie project was booked prior to
their write-off in 2015 and therefore they did not impact income.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 40
Note 13. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
The companies Direct Energie EBM Entreprises, Compagnie Electrique de Bretagne and Sophye LacMort are
consolidated by the equity method and classified as joint ventures. The Ossau company was liquidated on 19
January 2016.
At 30 June 2016, the main features of the joint ventures were as follows:
At 30 June 2016, contributions from the joint ventures were:
Direct Energie
EBM Entreprises
Compagnie
Electrique de
Bretagne
SOPHYE LACMORT
Reporting date 30/06/2016 30/06/2016 30/06/2016
Relationship Joint venture Joint venture Joint venture
Country of main establishment France France France
Main activitySale of gas and
electricity
Construction and
operation of
thermal power
plant
Acquisition and
operation of
hydroelectric
concessions
Equity holding and voting rights 50% 60% 50%
Accounting method Equity method Equity method Equity method
In thousands of euros
Direct Energie
EBM Entreprises
Compagnie
Electrique de
Bretagne
SOPHYE LACMORT
Current assets 22 238 851 11
Non-current assets 210 12 456 -
Current liabilities 19 843 11 911 2
Of which current financial liabilities 168 11 706 -
Of which non-current financial liabilities 19 675 206 2
Non-current liabilities 2 - -
Net assets 2 603 1 396 9
Share of net assets 1 301 837 4
Other adjustments - (837) -
Carrying value of equity interests 1 301 (0) 4
Dividends received by the Group - - -
Revenue 28 690 - -
Net income 810 (121) (1)
Comprehensive income 810 (121) (1)
Share of net income 405 (72) (0)
Share of comprehensive income 405 (72) (0)
30/06/2016
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 41
At 31 December 2015, contributions from the joint ventures were:
The key indicators of the joint ventures presented in 2016 cover a six-month period.
At 30 June 2016, the impact of the joint ventures in contributing profits amounted to €332 thousand. The
percentage of the Group's holding in joint ventures Direct Energie EBM Companies, Compagnie Electrique de
Bretagne and Sophye Lacmort has not changed since 31 December 2015. At 30 June 2016, their carrying value
amounted to a total of €1,306 thousand. These carrying values include shares in income of €332 thousand.
Note 14. INVENTORY
The carrying value of inventory items by category is as follows:
At 30 June 2016, the Group's inventories are composed primarily of gas. A provision for depreciation of inventory
was recorded for €1,108 thousand, due to its net realisable value.
In thousands of euros
Direct Energie
EBM Entreprises
Compagnie
Electrique de
Bretagne
OSSAU SOPHYE LACMORT
Current assets 16 509 450 1 11
Non-current assets 416 11 938 - -
Current liabilities 15 131 10 871 - 2
Of which current financial liabilities 350 9 568 - -
Of which non-current financial liabilities 14 781 1 303 - 2
Non-current liabilities 1 - - -
Net assets 1 793 1 517 1 10
Share of net assets 896 910 0 5
Other adjustments - (910) - -
Carrying value of equity interests 896 - 0 5
Dividends received by the Group - - - -
Revenue 35 560 - - -
Net income 137 (211) (6) (2)
Comprehensive income 137 (211) (6) (2)
Share of net income 68 (126) (3) (1)
Share of comprehensive income 68 (126) (3) (1)
31/12/2015
In thousands of euros Gross value Provisions Net value Gross value Provisions Net value
Gas inventory 21 875 (1 108) 20 767 36 223 (2 502) 33 721
Spare parts inventory 2 546 - 2 546 2 523 - 2 523
Inventory 24 421 (1 108) 23 313 38 746 (2 502) 36 245
30/06/2016 31/12/2015
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 42
Note 15. TRADE RECEIVABLES
Net trade receivables comprise the following:
The trade receivables are all due within one year.
Note 16. OTHER CURRENT AND NON-CURRENT ASSETS
Other current and non-current assets include the following:
Current and non-current "prepaid expenses" are mainly related to early unwinding of forward purchases/sales
of energy carried out on the markets, which are recognised in the profit and loss account on the date of physical
delivery, as well as energy purchases for energy volumes delivered in the month following their billing, IT
maintenance costs, rent and expenses for communication and insurance.
"Tax and social security receivables" consist mainly of tax receivables on value added services.
"Other receivables" consist mainly of receivables relating to the implementation of the "Basic Need Tariff" (Tarif
de Première Nécessité) and "Special Gas Solidarity Tariff" (Tarif Spécial de Solidarité).
In thousands of euros 30/06/2016 31/12/2015
Trade receivables 341 698 240 757
Impairment (20 095) (20 161)
Trade receivables 321 604 220 596
In thousands of euros 30/06/2016 31/12/2015
Prepaid expenses 44 739 50 870
Tax and social security receivables 11 627 11 565
Other receivables 6 857 7 065
Other current assets 63 223 69 500
In thousands of euros 30/06/2016 31/12/2015
Prepaid expenses 5 312 3 097
Tax and social security receivables - 959
Other receivables 447 1 222
Other non-current assets 5 759 5 279
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 43
Note 17. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, bank balances and short term investments. Cash and cash
equivalents included in the cash flows statement include the following amounts recorded in the statement of
financial position:
Note 18. SHAREHOLDERS' EQUITY
18.1 Share capital
At 30 June 2016, Direct Energie's share capital amounted to €4,122,057 divided into 41,220,566 shares with a
nominal value of €0.1 each. The changes in the share capital in the first half-year 2016 is explained by the
recording, at 30 June 2016, of a capital increase of €42,760 resulting from the exercise of stock options.
18.2 Instruments granting holders access to new Direct Energie SA shares
At 30 June 2016, the instruments granting holders access to new Direct Energie SA shares consisted of stock
option plans that the Group has offered to certain Group employees, including executives. The characteristics of
these plans are presented in Note 19 "Share-based Payments".
The maximum number of new shares that can be created on exercise of these instruments is 2,517 thousand
shares at 30 June 2016.
18.3 Treasury shares
At 30 June 2016, a balance of €52 thousand corresponding in particular to 0.9 thousand treasury shares held
under a liquidity contract is recorded as a reduction to consolidated shareholders' equity.
18.4 Consolidated share premiums and reserves
Consolidated share premiums and reserves, including profit for the year, amounted to €124,822 thousand at 30
June 2016. They include share premiums paid as part of capital increases and the premium following the merger
In thousands of euros 30/06/2016 31/12/2015
Marketable securities and cash equivalents - -
Cash 191 436 35 230
Cash and cash equivalents - assets 191 436 35 230
Bank overdrafts (1 193) (3 237)
Net cash and cash equivalents 190 243 31 993
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 44
between Poweo and Direct Energie, reduced by the impact of the cancellation of treasury shares, and the
earnings retained by the Group.
18.5 Gains and losses recognised in shareholders' equity, Group share
Changes in fair value of derivative financial hedging instruments, which, at 30 June 2016, corresponded
exclusively to energy purchases, are recorded net of tax in other comprehensive income for the effective portion
of the hedge and in income for the period for the ineffective portion. The change in fair value of €22,469
thousand on the first half-year 2016, on a temporary basis, is primarily related to deliveries recorded over the
first half-year 2016 for hedging instruments open at 31 December 2015. The balance as at 30 June 2016 will be
subsequently recycled to income, symmetrically to the hedged item when physical delivery of the corresponding
energy purchases takes places.
18.6 Non-controlling interests
At 30 June 2016, no subsidiary in which the Group holds partial rights and obligations on the share capital is
consolidated by the full consolidation method.
18.7 Capital management
Direct Energie's main objective, in terms of managing its capital structure, is to maximise the profitability of
capital invested by its shareholders based on risks involved and control of financial resources required for its
short and medium-term development.
The Group assesses the adequacy of its acquisition or investment projects based on their strategic interest, but
also on their financial profile. It structures their financing after taking into account profitability factors and the
potential opportunities and drawbacks in the debt and capital markets.
Direct Energie is not subject to any external requirement on minimum equity, with the exception of legal
requirements.
In thousands of euros 30/06/2016 Change 31/12/2015 Change 31/12/2014
Available-for-sale financial assets - - - - -
Cash flow hedges (87 512) 22 469 (109 981) (88 392) (21 590)
Deferred tax impact - - - - -
Share in profit of associates - - - 527 (527)
Total recyclable items (87 512) 22 469 (109 981) (87 864) (22 117)
Actuarial gains and losses (92) - (92) - (92)
Deferred tax impact 31 - 31 - 31
Total non-recyclable items (61) - (61) - (61)
Gains and losses recognised in shareholders'
equity(87 573) 22 469 (110 042) (87 864) (22 178)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 45
Note 19. SHARE-BASED PAYMENTS
The amounts recognised for share-based payments are:
Note 20. PROVISIONS
20.1 Change in provisions
During the first half-year 2016, the Group recorded a provision for loss-making contracts for gas interconnection
capacity reservation contracts among the Netherlands, Belgium and France, for an amount of €33.0 million (see
Note 2.4 "Provisions for loss-making contracts on gas interconnection capacities"). This provision was calculated
taking into account the following parameters:
- capacity reservation costs until the contracts' expirations, determined in accordance with contractual
principles;
- the forecast for related revenues:
o firstly, the gas price differential between the entry and exit points of these capacities, based
on market prices for the observable time period (2016-2018) and projections based on historic
trends beyond that time period, and
o secondly, the establishment of a regulatory mechanism for the revaluation of these capacities
in order to encourage gas companies to subscribe them again after 2021 (the date on which
the long-term reservation contracts for current capacity begin to expire);
- a discount rate of 1.09%, corresponding to the 10-year yield on AA rated corporate bonds.
In thousands of euros 30/06/2016 30/06/2015
Stock options (862) (559)
Free shares - -
Other - -
Expenses related to share-based payments (862) (559)
In thousands of euros31/12/2015 Allowance Use Write-back Accretion
Change in
scopeOther 30/06/2016
Provisions for
employee benefits1 116 256 - - 0 - - 1 372
Provisions for risks and
charges10 711 35 386 (2 375) (361) - - - 43 361
Provisions 11 827 35 642 (2 375) (361) 0 - - 44 734
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 46
The flows of allowances, uses, writing back and accretion presented above are split as follows in the profit and
loss account:
20.2 Provisions for employee benefits
The key assumptions used to determine the existing commitment at 30 June 2016 are:
- a discount rate of 1.09%, corresponding to the 10-year yield on AA rated corporate bonds;
- a 2% salary increase rate;
- retirement at the initiative of the employee;
- mobility rates vary in accordance with age;
- 2011-2013 INSEE mortality table.
At 30 June 2016 the Group recognised an expense of €256 thousand for liabilities related to end-of-career
benefits. The provision for the Group's commitments in respect of end-of-career benefits amounted to €1,372
thousand. On the same date, cumulative actuarial gains and losses recognised in equity amounted to €61
thousand. No actuarial loss was recognised in shareholders' equity for the year.
20.3 Provisions for contingencies and charges
The provisions made at 30 June 2016 are primarily related to:
- loss-making contracts amounting to €32,960 thousand relating to gas transmission capacity reserved by
the Group among the Netherlands, Belgium and France. This provision was calculated taking into
account the costs of contractual capacity and revenues associated with the use of these capacities over
the remaining term of the contracts (see Note 2.4 "Provisions for loss-making contracts on gas
interconnection capacities");
- pending legal proceedings for €3,226 thousand (€3,171 thousand at 31 December 2015);
- the estimation of the Group's obligations in terms of energy efficiency certificates and guarantees of
origin relating to Law No. 2005-781 of 13 July 2005 for €2,199 thousand. This provision was recorded in
accordance with procedure set forth in Regulation 2012-04 of the ANC (the French Accounting
Standards Board) (€2,355 thousand at 31 December 2015);
- provisions for dismantling (€4,072 thousand compared to €3,935 thousand on 31 December 2015) and
for works (€211 thousand compared to €232 thousand at 31 December 2015) relating to the company
3CB;
- various risks for €693 thousand (€1,019 thousand in 2015).
In thousands of euros Net allowance
Cost of sales 32 960
Personnel expenses 256
Other operating income and expenses (447)
Other financial income and expenses 138
Total 32 906
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 47
20.4 Current and non-current share of provisions
The breakdown between current and non-current provisions is as follows:
Note 21. LEASE-FINANCE AGREEMENTS
The net book value of assets under finance leases is allocated between the different categories of assets based
on type. The Group's lease-finance agreements relate to a leaseback of its integrated information management
systems and leases on office and computer equipment.
The lease-finance agreements have a duration of 3 to 4 years and stipulate that the Group becomes the owner
of the property at the end of the financing period.
A breakdown of the future minimum lease payments under these agreements are as follows:
In thousands of euros Current Non-current Total Current Non-current Total
Provisions for employee benefits - 1 372 1 372 - 1 116 1 116
Provisions for risks and charges 11 692 31 669 43 361 6 776 3 935 10 711
Provisions 11 692 33 041 44 734 6 776 5 051 11 827
30/06/2016 31/12/2015
Total
In thousands of euros 30/06/2016 Less than 1 year 1 to 5 years Over 5 years
Minimum payments 545 249 296 -
Financial expenses (16) (11) (5) -
Present value of minimum payments 529 238 291 -
Term
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 48
Note 22. TRADE PAYABLES
Note 23. OTHER CURRENT AND NON-CURRENT LIABILITIES
The components of other current and non-current liabilities are as follows:
At 30 June 2016, the tax and social security liabilities consist mainly of VAT liabilities and the domestic tax on the
end consumption of electricity (TICFE), paid quarterly and which replaced, with effect from 1 January 2016, the
Contribution to the Public Electricity Service, which was paid monthly.
The current portion of deferred income results mainly from the service provision contract with ERDF.
Note 24. FINANCIAL ASSETS AND LIABILITIES
Trade receivables, cash and cash equivalents and accounts payable are included within the scope of IAS 39 and
are shown in these tables but appear on separate lines of the statement of financial position.
In thousands of euros 30/06/2016 31/12/2015
Supplier payables 65 645 68 606
Invoices not yet received 62 979 119 212
Trade payables 128 624 187 818
In thousands of euros 30/06/2016 31/12/2015
Tax and social security liabilities 201 555 68 130
Deferred income 7 992 2 409
Other liabilities 597 348
Other current liabilities 210 143 70 887
In thousands of euros 30/06/2016 31/12/2015
Tax and social security liabilities - -
Deferred income 2 545 2 164
Other liabilities - -
Other non-current liabilities 2 545 2 164
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 49
24.1 Financial assets excluding financial derivative instruments
24.1.1 Financial assets by categories
The various categories of financial assets (excluding financial derivative instruments) broken down into current
and non-current are as follows:
24.1.2 Available-for-sale financial assets
The Group's available-for-sale financial assets mainly consisted of equity investments in non-consolidated
companies amounting to €26 thousand. The change in fair value of available-for-sale assets are as follows:
At 30 June 2016, a review of the value of various available-for-sale securities has led the Group to recognise an
impairment loss of €112 thousand.
In thousands of euros Current Non-current Total Current Non-current Total
Available-for-sale financial assets - 26 26 - 138 138
Loans and receivables at amortised cost (excluding
trade receivables)40 511 1 120 41 631 70 688 1 320 72 008
Other financial assets 40 511 1 146 41 657 70 688 1 458 72 146
Trade receivables 321 604 - 321 604 220 596 - 220 596
Cash and cash equivalents 191 436 - 191 436 35 230 - 35 230
Financial assets 553 550 1 146 554 697 326 514 1 458 327 972
30/06/2016 31/12/2015
In thousands of euros Fair value
At 31 December 2014 661
Acquisitions 26
Disposals - carrying value excluding change in fair value recognised in shareholders' equity -
Disposals - change in fair value derecognised in shareholders' equity -
Change in fair value recognised in shareholders' equity -
Change in fair value recognised in net income (550)
Changes in scope -
Other -
At 31 December 2015 138
Acquisitions -
Disposals - carrying value excluding change in fair value recognised in shareholders' equity -
Disposals - change in fair value derecognised in shareholders' equity -
Change in fair value recognised in shareholders' equity -
Change in fair value recognised in net income (112)
Changes in scope -
Other -
At 30 June 2016 26
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 50
24.1.3 Loans and receivables at amortised cost (excluding trade receivables)
A breakdown of loans and receivables at their amortised cost is as follows:
Security deposits mainly relate to cash deposits with certain counterparties, including the regulated energy
market clearing house, used to cover changes in fair value of purchases and sales of energy futures.
No impairment loss was included in the amounts of loans and receivables at their amortised cost at 31 December
2015. The Group found no impairment of loans and receivables at their amortised cost at 30 June 2016. The net
carrying value of loans and receivables at their amortised cost is an appropriate measurement of their fair value.
Interest income recognised in "Cost of net debt" in the profit and loss account for the first half-year 2016
amounted to €550 thousand compared to €112 thousand in the first half-year 2015.
24.1.4 Trade receivables
Amortization and impairment losses included in trade receivables amounted to €20,095 thousand at 30 June
2016 (compared to €20,161 thousand at 31 December 2015). The carrying value of these financial assets is an
appropriate measurement of their fair value. Trade receivables and the impairment losses are presented in Note
15 "Trade receivables".
24.1.5 Cash and cash equivalents
Cash and cash equivalents amounted to €190,243 thousand at 30 June 2016 compared to €31,993 thousand at
31 December 2015. The income recorded on cash and cash equivalents in the first half-year 2016 amounted to
€108 thousand compared to €243 thousand in the first half-year 2015 and is recorded in "Cost of net debt" in
the profit and loss account.
In thousands of euros Current Non-current Total Current Non-current Total
Security deposits 33 128 1 120 34 249 64 322 1 320 65 642
Loans to non-consolidated companies 7 027 - 7 027 6 059 - 6 059
Other loans and receivables 355 - 355 307 - 307
Loans and receivables at amortised cost 40 511 1 120 41 631 70 688 1 320 72 008
30/06/2016 31/12/2015
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 51
24.2 Financial liabilities excluding financial derivative instruments
24.2.1 Financial liabilities by category
The different categories of financial liabilities broken down into current and non-current are as follows:
24.2.2 Financial liabilities measured at amortised cost (excluding suppliers)
The breakdown of financial liabilities measured at amortised cost is as follows:
Loans from credit institutions at 31 December 2015 included a draw of €60 million on the syndicated loan
arranged in the second quarter 2015.
Other borrowings consist primarily of bonds for €117.5 million, shareholders' advances on current accounts
issued for the purpose of securing the Group's financing structure for €55.7 million and a credit line with the
Group’s market clearing house to cover its liquidity needs primarily associated with margin call payments for
€60 million.
These loans are subject to covenants, tested at each balance sheet date, and which were met at 31 December
2015.
Drawings on credit facilities correspond to bank overdrafts at 30 June 2016. The net cash position is presented
in Note 17 "Cash and cash equivalents".
Interest expense on financial liabilities amounted to €5,894 thousand in the first half-year 2016 (compared to
€1,858 thousand in the first half-year 2015) and were recognised in the profit and loss account under "Cost of
net debt".
The fair value of financial liabilities measured at their amortised cost is as follows:
In thousands of euros Current Non-current Total Current Non-current Total
Financial liabilities measured at amortised cost 134 951 115 413 250 363 69 113 114 829 183 943
Financial liabilities at fair value through income- - - - - -
Other financial liabilities 134 951 115 413 250 363 69 113 114 829 183 943
Trade payables 128 624 - 128 624 187 818 - 187 818
Financial liabilities 263 575 115 413 378 987 256 932 114 829 371 761
30/06/2016 31/12/2015
In thousands of euros Current Non-current Total Current Non-current Total
Loans from credit institutions - - - 60 005 - 60 005
Loans related to finance leases 238 291 529 235 410 646
Bank overdrafts 1 193 - 1 193 3 237 - 3 237
Security deposits and margin calls 5 126 - 5 126 876 - 876
Other borrowings 128 394 115 122 243 515 4 760 114 419 119 179
Financial liabilities measured at amortised cost 134 951 115 413 250 363 69 113 114 829 183 943
30/06/2016 31/12/2015
In thousands of euros Fair value Carrying value Fair value Carrying value
Financial liabilities measured at amortised cost 254 750 250 363 185 802 183 943
30/06/2016 31/12/2015
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 52
The repayment table of financial liabilities measured at their amortised cost is as follows:
24.2.3 Trade payables
The trade payables are presented in Note 22 "Trade payables". The carrying value of these financial liabilities is
an appropriate measurement of their fair value.
24.3 Net debt
This change in net debt is due both to the decrease in cash deposits made with the Group's counterparties as
part of purchase and energy sales transactions recorded as financial assets in the Group's accounts. This decline
that was notably consecutive to changes in the market prices of raw materials during the first half-year 2016 and
to the Group's optimisation of its supply terms, as well as the increase in net cash by the Group, taking into
account the financing required to acquire new customers, triggered by the strong growth in the business
observed in the half-year.
In thousands of euros Less than 1 year 1 to 5 years Over 5 years Total Less than 1 year 1 to 5 years Over 5 years Total
Loans from credit institutions - - - - 60 005 - - 60 005
Loans related to finance leases 238 291 - 529 235 410 - 646
Bank overdrafts 1 193 - - 1 193 3 237 - - 3 237
Security deposits and margin calls 5 126 - - 5 126 876 - - 876
Other borrowings 128 394 44 263 70 858 243 515 4 760 43 604 70 815 119 179
Financial liabilities measured at amortised cost 134 951 44 554 70 858 250 363 69 113 44 015 70 815 183 943
30/06/2016 31/12/2015
In thousands of euros Current Non-current Total Current Non-current Total
Financial liabilities 134 951 115 413 250 363 69 113 114 829 183 943
Margin calls excluding debt hedges 5 100 - 5 100 850 - 850
Financial liabilities excluding margin calls 129 851 115 413 245 263 68 263 114 829 183 093
Financial assets at fair value through profit & loss - - - - - -
Cash and cash equivalents 191 436 - 191 436 35 230 - 35 230
Cash assets 191 436 - 191 436 35 230 - 35 230
Net debt* (61 586) 115 413 53 827 33 034 114 829 147 863
30/06/2016 31/12/2015
* Net debt is the difference between financial liabilities excluding the impact of margin calls and cash assets.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 53
24.4 Derivative financial instruments and hedge accounting
24.4.1 Derivative financial instruments by category
24.4.2 Derivative financial instruments not classified as hedges
The breakdown of the fair value of derivative financial instruments not classified as hedging instruments
recognised in the statement of financial position is as follows:
The Group's derivative financial instruments not classified as hedges include:
- derivative financial instruments concluded in the framework of economic hedges of operating flows on
underlying energy volumes (derivatives operational in nature);
- derivative financial instruments held for trading (trading derivatives).
Changes in fair value of non-hedging derivatives are recorded in the profit and loss account under "Energy
Management Margin" for trading derivatives. Changes in fair value of energy derivatives - operational in nature
are recorded under current operating income in the "Net changes in the fair value of Energy derivative financial
instruments - operational in nature".
In thousands of euros Current Non-current Total Current Non-current Total
Positive fair value of trading derivatives 10 - 10 16 - 16
Positive fair value of hedging derivatives 7 330 4 534 11 865 5 271 4 856 10 127
Positive fair value of Energy derivatives operational
in nature16 326 3 384 19 710 30 556 3 638 34 194
Positive fair value of derivatives 23 666 7 918 31 584 35 843 8 494 44 337
Negative fair value of trading derivatives (9) - (9) (15) - (15)
Negative fair value of hedging derivatives (59 895) (39 482) (99 377) (63 986) (56 123) (120 108)
Negative fair value of Energy derivatives
operational in nature(29 342) (18 036) (47 378) (19 850) (25 231) (45 081)
Negative fair value of derivatives (89 246) (57 517) (146 763) (83 851) (81 354) (165 204)
Net fair value of derivatives (65 580) (49 599) (115 180) (48 007) (72 860) (120 867)
30/06/2016 31/12/2015
In thousands of euros 30/06/2016 31/12/2015
Positive fair value of trading derivatives 10 16
Negative fair value of trading derivatives (9) (15)
Net fair value of trading derivatives 1 1
Positive fair value of Energy derivatives operational in nature 19 710 34 194
Negative fair value of Energy derivatives operational in nature (47 378) (45 081)
Net fair value of operational derivatives (27 668) (10 887)
Net fair value of derivatives not classified as hedges (27 667) (10 886)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 54
The maturities of the amounts and notional volumes of the derivative financial instruments not classified as
hedges are as follows:
Binding purchases and sales of CO2 recorded at 30 June 2016 related to the operation of the Bayet plant acquired
by the Group at year-end 2015.
24.4.3 Derivative financial instruments classified as hedging
The fair value of derivative financial instruments classified as hedging instruments recognised in the statement
of financial position is as follows:
Hedge accounting is applied in accordance with IAS 39 and relates to derivatives on commodities in future cash
flow hedges.
The impact of the changes in fair value recorded in the Group's shareholders' equity is as follows:
Notionals in GWh
Fair value in thousands of euros less than 1 year 1 to 5 years over 5 years less than 1 year 1 to 5 years over 5 years
Firm energy purchases (12 963) (4 636) - (249 888) (141 106) -
Firm energy sales 13 140 2 069 - 207 702 45 630 -
Optional energy purchases - - - - - -
Total energy 177 (2 568) - (42 187) (95 476) -
Notionals in tonnes
Fair value in thousands of euros less than 1 year 1 to 5 years over 5 years less than 1 year 1 to 5 years over 5 years
Firm purchases of CO2 (425 000) (165 000) - (3 172) (1 337) -
Firm sales of CO2 75 000 35 000 - 428 184 -
Total CO2 (350 000) (130 000) - (2 743) (1 152) -
(44 930) (96 628) -
Notionals in GWh
Amounts in thousands of euros less than 1 year 1 to 5 years over 5 years less than 1 year 1 to 5 years over 5 years
Firm energy purchases (14 260) (6 092) - (315 726) (194 288) -
Firm energy sales 13 362 1 365 - 280 234 39 660 -
Optional energy purchases - - - - - -
Total derivatives not classified as
hedges(898) (4 727) - (35 492) (154 628) -
30/06/2016
Amounts
31/12/2015
Notionals Amounts
Notionals
30/06/2016
Notionals Amounts
Total derivatives not classified as hedges
In thousands of euros 30/06/2016 31/12/2015
Positive fair value of hedging derivatives 11 865 10 127
Negative fair value of hedging derivatives (99 377) (120 108)
Net fair value of hedging derivatives (87 512) (109 981)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 55
Changes in fair value in shareholders' equity include changes in fair value of hedging derivatives, which were
valued at the previous reporting date and are not due at year-end and the fair value of hedging derivatives
subscribed during the year.
Fair value changes included in income for the recycled portion correspond to the fair value of hedging derivatives,
which were valued at the previous reporting date and which expired during the year. The total impact of hedging
derivatives on the profit and loss account, including derivatives subscribed and accrued during the same year, is
an expense of €292,172 thousand (compared to an expense of €93,031 thousand in the first half-year 2015),
associated with energy purchases recorded in cost of sales at the time of physical delivery.
Cash flow hedges by period were as follows:
In thousands of euros 30/06/2016 31/12/2015
Net fair value of hedging derivatives at beginning of period (109 981) (21 590)
Change in fair value recognised in shareholders' equity 11 667 (104 384)
Change in fair value recognised in net income - recycling 10 802 15 992
Change in fair value recognised in net income - ineffectiveness - -
Other changes - -
Net fair value of hedging derivatives at end of period (87 512) (109 981)
Notionals in GWh
Fair value in thousands of euros less than 1 year 1 to 5 years over 5 years less than 1 year 1 to 5 years over 5 years
Firm energy purchases (7 627) (5 616) - (308 941) (225 988) -
Firm energy sales 107 19 - 4 156 901 -
Optional energy purchases - - - - - -
Total hedging derivatives (7 520) (5 597) - (304 785) (225 087) -
Notionals in GWh
Amounts in thousands of euros less than 1 year 1 to 5 years over 5 years less than 1 year 1 to 5 years over 5 years
Firm energy purchases (10 556) (9 198) - (436 054) (370 339) -
Firm energy sales 1 240 298 - 49 472 12 116 -
Optional energy purchases - - - - - -
Total hedging derivatives (9 317) (8 899) - (386 582) (358 223) -
30/06/2016
Notionals Amounts
31/12/2015
Notionals Amounts
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 56
24.5 Fair value of financial assets and liabilities by level
24.5.1 Financial assets
Financial assets measured at fair value are divided as follows among the various levels of fair value:
The Group has classified the fair values of financial assets and liabilities among levels 1, 2 and 3 according to the
criteria outlined in Note 1.4.6.3.4 "Determining the fair value of financial derivatives" to the consolidated
financial statements at 31 December 2015.
Available-for-sale financial assets
Available-for-sale financial assets consist of unlisted securities whose assessment is based on recent comparable
market transactions observed and are considered to be level 3.
Financial assets at fair value through profit or loss / cash and cash equivalents
Financial assets at fair value through profit or loss and cash and cash equivalents are considered level 1 because
the Group has net asset values for these financial assets.
Derivative financial instruments
Financial instruments recognised in level 2 are determined using models commonly used in energy activities and
are based on directly or indirectly observable market inputs.
The derivative financial instruments classified as level 3 include unobservable inputs and their fair value, required
a use of internal assumptions.
The methods and assumptions used are theoretical by nature, and a significant amount of judgement was
involved in interpreting market data. The use of different assumptions and/or different valuation methods could
have a material effect on the estimated fair value of these financial instruments.
In thousands of euros Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Available-for-sale financial assets - - 26 26 - - 138 138
Financial assets at fair value through income - - - - - - - -
Cash and cash equivalents 191 436 - - 191 436 35 230 - - 35 230
Hedging derivatives - 11 865 - 11 865 - 10 127 - 10 127
Trading derivatives - 10 - 10 - 16 - 16
Energy derivatives operational in nature - 9 493 10 217 19 710 - 23 438 10 756 34 194
Financial assets at fair value 191 436 21 367 10 243 223 046 35 230 33 581 10 894 79 705
30/06/2016 31/12/2015
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 57
24.5.2 Financial liabilities
Financial liabilities measured at their fair value are divided as follows among the various levels of fair value:
The classification by level of derivative financial instruments is as specified above (Note 24.5.1).
24.5.3 Change in fair values of level 3
At 30 June 2016, the change over the period in the fair value of financial assets and liabilities considered as level
3 was as follows:
At 30 June 2016, level 3 financial assets primarily included a gas purchase contract, the fair value of which is
calculated on the basis of an internal model, with the following observable and estimated inputs:
- observable market inputs: forward gas market price-PEG north, forward market prices of gas and oil
products-TTF;
- inputs estimated internally: volatility of gas and oil prices, gas-oil correlation, bid-ask spread.
The valuation of this gas supply contract in these accounts amounted to €10.2 million at 30 June 2016 compared
to €10.8 million at 31 December 2015.
Level 3 financial liabilities primarily include an electricity purchase contract, the fair value of which is calculated
on the basis of an optional internal model, with the following observable and estimated inputs:
- observable market inputs: forward electricity market price at the market horizon, forward market price
of guarantees of origin at the market horizon;
- inputs estimated internally: forward electricity market prices beyond the market horizons, forward
market price of guarantees of origin beyond the market horizons, production factors (estimated using
historical data), production by plants, market price of the capacity, energy losses, indices of the cost of
production buyback and parameters related to the call option.
In thousands of euros Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial liabilities at fair value through income - - - - - - - -
Cash and cash equivalents - - - - - - - -
Hedging derivatives - 99 377 - 99 377 - 120 108 - 120 108
Trading derivatives - 9 - 9 - 15 - 15
Energy derivatives operational in nature - 42 240 5 138 47 378 - 39 203 5 878 45 081
Financial liabilities at fair value - 141 626 5 138 146 763 - 159 326 5 878 165 204
30/06/2016 31/12/2015
In thousands of euros
31/12/2015
Change
through
profit & loss
Change
through
shareholders'
equity
Acquisitions Disposals Transfers 30/06/2016
Available-for-sale financial assets 138 (112) - - - - 26
Hedging derivatives - - - - - - -
Trading derivatives - - - - - - -
Derivatives operational in nature 10 756 (539) - - - - 10 217
Financial assets at fair value, level 3 10 894 (651) - - - - 10 243
Hedging derivatives - - - - - - -
Trading derivatives - - - - - - -
Derivatives operational in nature 5 878 (741) - - - - 5 138
Financial liabilities at fair value, level 3 5 878 (741) - - - - 5 138
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 58
The valuation of this electricity supply contract as a financial liability amounts to €5.1 million at 30 June 2016
compared to €5.9 million on 31 December 2015.
24.6 Market risks and risk management
The main risk factors are:
24.6.1 Credit risk
The Group may conduct transactions (sales or purchases) with numerous counterparties for a significant amount.
Concerning the electricity and gas supply business, the Group monitors the outstanding customer receivables
and recognises any write-downs that may be necessary on those that would be deemed to be of a low probability
of collection. In particular, write-downs provisions cover the entire risk of the Group's loss in case of non-recovery
of trade receivables with a maturity exceeding one year. At 30 June 2016, the write-downs on trade receivables
amounted to €20,095 thousand (compared to €20,161 thousand at 31 December 2015).
Regarding its energy trading business, the Group trades with leading counterparties in the European market. The
Group judges the risk of default of such counterparties to be insignificant. The breakdown of the fair value by
counterparty type at 30 June 2016 is as follows:
24.6.2 Counterparty risk
It is defined as the total loss that would be suffered by the Group's operational activities and markets if one of
the counterparties were to default and breach its contractual obligations.
The Group is exposed to a counterparty risk when it uses derivative financial instruments.
In the case of financial instruments at fair value through profit and loss, this risk is the positive fair value. When
assessing derivatives, the counterparty risk factor is taken into account when determining the fair value of these
derivatives.
24.6.3 Liquidity risk
The Group conducts daily monitoring of its liquid assets in terms of liquidity and liquidity needs in the short and
medium terms to ensure that it has at its disposal, at all times, sufficient financial resources to finance operations
and investments for the Group's development.
The Group has two syndicated loans totalling €115 million; a bank credit facility, the amount of which was
increased to €120 million during the first half-year 2016; a short-term credit line with the Group’s regulated
energy market clearing house, for a total amount of €60 million; short-term credit facilities by its partner banks
In thousands of euros 30/06/2016 31/12/2015
Organised market with clearing house (95 906) (105 041)
Energy companies (12 618) (9 322)
Banking institutions (6 656) (6 504)
Net fair value of derivatives at end of period (115 180) (120 867)
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 59
(€16 million at 30 June 2016); and shareholder loans set up in the first quarter 2016 for a total amount of €55
million at the reporting date.
24.6.4 Market risk
Direct Energie enters into binding contracts for the purchase and sale of energy on the organised markets or
negotiated directly with counterparties.
These derivative financial instruments are included in the management and optimisation of supply to customers.
These instruments are sensitive to changes in the market prices of raw materials, which have a high volatility.
The Group reviews its derivatives portfolio on a weekly basis in order to carry out specific monitoring of market
risks. The effect on the profit and loss account and reserves of the Group's financial instruments in the event of
a uniform impact on all the forward rates is presented in the following table:
In thousands of euros Net income Reserves Net income Reserves
Forward purchases/sales of electricity - hedges - 65 715 - 91 088
Forward purchases/sales of electricity - not classified
as hedges17 754 - 21 565 -
Sensitivity of electricity purchases/sales 17 754 65 715 21 565 91 088
Forward purchases/sales of gas - hedges - - - -
Forward purchases/sales of gas - not classified as
hedges218 - (17 391) -
Sensitivity of gas purchases/sales 218 - (17 391) -
Sensitivity of electricity and gas purchases/sales 17 972 65 715 4 174 91 088
30/06/2016 31/12/2015Change in prices
+€5/MWh
-10% gas
+10% oil
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 60
Note 25. SEGMENT REPORTING
The segmented disclosure is presented in accordance with IFRS 8 "Operating Segments".
25.1 Operating segments
The operating segments used to present the segment reporting have been identified based on internal reports
used by the Group's Board of Directors to allow for the allocation of resources to different segments and to
assess their performance. The Board of Directors is the "chief operating decision maker" as defined by IFRS 8.
Comparative segment information for the year 2015 are presented in the same breakdown.
The segments defined by the Group are as follows:
- "Commercial trade", which corresponds to the business line of supplying energy to end consumers;
- "Production", which means the Group's subsidiaries in charge of power generation development
projects carried out at plants.
At 30 June 2015, the aggregate "Other segments" included the Group's other holdings, including local distribution
companies, which were sold on 1 October 2015, through the sale of the subsidiary Direct Energie Distribution
and the interests held by this subsidiary.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 61
25.2 Segment-specific indicators
Segment reporting is determined before inter-segment eliminations.
In thousands of euros Production Other Eliminations
France Belgium France France France France Belgium
Income statement items
Revenue from ordinary activities 860 202 15 519 27 585 - (39 741) 848 046 15 519 863 565
of which external revenue 842 850 15 519 5 196 - - 848 046 15 519 863 565
of which inter-segment revenue 17 352 - 22 389 - (39 741) - - -
Gross margin 101 156 2 089 3 829 - - 104 986 2 089 107 075
EBITDA 64 063 (2 656) (2 144) - - 61 919 (2 656) 59 264
Current operating income 50 353 (2 656) (3 871) - - 46 482 (2 656) 43 826
Other information
Depreciation and amortisation (12 848) - (1 727) - - (14 575) - (14 575)
Impairment (112) - 0 - - (112) - (112)
Segment assets, net 771 557 7 861 59 074 - - 830 631 7 861 838 492
Investments 16 159 - 343 - - 16 502 - 16 502
At 30/06/2016
Commercial Trade TotalTotal
In thousands of euros Production Other Eliminations
France Belgium France France France France Belgium
Income statement items
Revenue from ordinary activities 504 686 1 468 207 - (708) 504 185 1 468 505 653
of which external revenue 503 978 1 468 207 - - 504 185 1 468 505 653
of which inter-segment revenue 708 - - - (708) - - -
Gross margin 78 232 (66) 207 - - 78 439 (66) 78 373
EBITDA 36 370 (2 096) (281) - - 36 088 (2 096) 33 993
Current operating income 25 090 (2 096) (281) - - 24 809 (2 096) 22 713
Other information
Depreciation and amortisation (10 720) (1) - - - (10 720) (1) (10 721)
Impairment (550) - - - - (550) - (550)
Segment assets, net 426 847 (1 243) (5 742) 386 - 421 491 (1 243) 420 248
Investments 12 024 14 137 - - 12 161 14 12 175
Commercial Trade TotalTotal
At 30/06/2015
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 62
25.3 EBITDA reconciliation with the current operating income
EBITDA, as defined in the table above, is the primary indicator followed by the Group's Board of Directors to
measure the performance of the various segments. This corresponds to an EBITDA that excludes non-recurring
items not related to the Group's operating activities but does include some provisions inherent in these activities.
In particular, EBITDA monitored by the chief operating decision maker does not include the income and expenses
related to changes in scope of consolidation, but does include provisions for bad debts.
Note 26. OFF-BALANCE SHEET COMMITMENTS
As part of its business, the Group enters into binding or optional energy forward purchase and sale contracts in
order to adjust its supplies and cover the consumption of its customers. The analysis led to certain contracts
being excluded from the scope of application of IAS 39. The maturities of the amounts and notional volumes of
contracts excluded from the scope of IAS 39 are:
In thousands of euros 30/06/2016 30/06/2015
EBITDA 59 264 33 992
(+) Depreciation and amortisation (14 575) (10 721)
(+) Share-based payments (862) (559)
Current operating income 43 826 22 712
Notionals in GWh
Fair value in thousands of euros less than 1 year 1 to 5 years over 5 years less than 1 year 1 to 5 years over 5 years
Firm energy purchases (4 855) (7 463) - (135 455) (193 145) -
Firm energy sales 210 437 - 4 555 7 343 -
Total firm Energy commitments (4 645) (7 026) - (130 900) (185 802) -
Notionals in GWh
Amounts in thousands of euros less than 1 year 1 to 5 years over 5 years less than 1 year 1 to 5 years over 5 years
Firm energy purchases (1 798) (277) - (42 195) (7 157) -
Firm energy sales 899 4 - 18 875 117 -
Total firm energy commitments (899) (272) - (23 320) (7 040) -
30/06/2016
Notionals Amounts
31/12/2015
Notionals Amounts
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 63
Note 27. RELATED PARTIES
27.1 Transactions with companies included in the scope of consolidation
Transactions with companies included in the scope of consolidation relate to transactions with associates and
joint ventures. They mainly consist of purchases and sales of energy or services.
27.2 Transactions with other related parties
Transactions with other related parties at 30 June 2016 primarily consist of transactions with companies with a
shareholding in Direct Energie.
Note 28. EXECUTIVE COMPENSATION
The Group's senior executives are the Chairman and CEO, and Deputy CEOs.
In the first half-year 2016, total executive compensation amounted to €555 thousand, plus €6 thousand in
benefits in kind. In the first half-year 2015, total executive compensation amounted to €615 thousand, plus €7
thousand in benefits in kind.
During the first half-year 2016, the Group recorded expenses in its accounts relating to the stock option plans
held by its executives for €368 thousand. This amount was €182 thousand for the first half-year 2015.
An expense of €28 thousand in pension obligations was also recognised. This expense was €29 thousand for the
first half-year 2015.
At 30 June 2016, provisions for these pension obligations totalled €193 thousand (compared to €165 thousand
at 31 December 2015).
No loans or advances were made to members of the Board of Directors in 2015 and 2016.
In thousands of euros 30/06/2016 31/12/2015 30/06/2016 31/12/2015 30/06/2016 31/12/2015
Sales to related parties 22 018 22 492 70 85 22 088 22 577
Purchases from related parties (298) (600) (1 556) (296) (1 854) (895)
Receivables from related parties 17 950 17 678 - - 17 950 17 678
Liabilities to related parties (8 064) (4 115) (55 679) (1) (63 743) (4 116)
Other related partiesScope of consolidation Total
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 64
Note 29. POST-REPORTING EVENTS
29.1 Decision of the Conseil d’Etat on the Engie/CRE dispute
On 13 July 2016 the Conseil d’Etat issued a decision following the Engie’s request to overturn, on the grounds of
excess power, the ruling handed down on 26 July 2012 by the French Energy Regulatory Commission (Commission
de Régulation de l’Energie) concerning communication of the services agreement concluded between Direct
Energie and ERDF (now ENEDIS) on the management of customers under a single contract, and the decision of
10 December 2014 rejecting the informal appeal filed by Engie against this decision.
While finding that the appeal filed by Engie was submitted too late for examination, the Conseil d'Etat recognised
that the decision of 26 July 2012 was unlawful on the grounds that it provided that the agreement between
Direct Energie and ERDF was concluded for a transitory period and provided a remuneration that was limited to
suppliers with less than [1,750,000] customers which subscribed a single contract for electricity or gas. The
Conseil d’Etat thus ultimately upheld the argument that these two limits of the contract between ERDF and Direct
Energie were contrary to the principle requiring that the suppliers should not have to bear the costs generated
by the services that they provide on behalf of the DSO’s (distribution system operators).
This decision expressly confirms the principle that the distribution system operator pays a supplier consideration
for management costs for customers that have a single contract.
29.2 Planned Acquisition of a combined cycle gas turbine power plant in Belgium
The Group announced the signing, on 28 September 2016, of a sale and purchase agreement with the Italian
group Enel to acquire 100% of the share capital in its subsidiary, Marcinelle Energie. The latter, dedicated to
electricity production, owns and operates a combined cycle gas turbine power plant located in Charleroi, Belgium
with around forty employees. Handed over in 2012 and equipped with Siemens-Ansaldo technology, very similar
to that held by the Group in Bayet (Allier), this plant has an installed capacity of about 400 MW.
The transaction amount, paid entirely in cash, is €36.5 million, and remains subject to the usual price
adjustments. It includes an earn out depending on the change in the electrical market structure in Belgium. The
transaction remains subject to the lifting of suspensory conditions (in particular, the authorisation from the
competent Belgian authorities), and should be completed at the earliest by the end of 2016.
After acquiring the power plant in Bayet at the end of 2015, this new transaction will bring the Group's installed
capacity to nearly 800 MW. Agreed on competitive terms, it also confirms the implementation of the planned
vertical integration strategy with a stronger presence by the Group upstream and downstream, thus ensuring
better supply coverage of its customer portfolio.
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 65
Note 30. SCOPE OF CONSOLIDATION
Direct Energie2 bis rue Louis Armand
75015 Paris 100% 100% Parent company
Direct Energie Génération2 bis rue Louis Armand
75015 Paris 100% 100% FC
Yfrégie2 bis rue Louis Armand
75015 Paris 100% 100% FC
Hambrégie2 bis rue Louis Armand
75015 Paris 100% 100% FC
Compagnie Electrique de Bretagne2 bis rue Louis Armand
75015 Paris 60% 60% EM
Direct Energie Concessions2 bis rue Louis Armand
75015 Paris 100% 100% FC
SOPHYE LACMORTRoute du Moulin
38570 Tencin50% 50% EM
Direct Energie EBM Entreprises2 bis rue Louis Armand
75015 Paris 50% 50% EM
Direct Energie BelgiumAvenue Louise 149/24
1050 Bruxelles100% 100% FC
Direct Energie ServicesAvenue Louise 149/24
1050 Bruxelles100% 100% FC
3CB SAS2 bis rue Louis Armand
75015 Paris 100% 100% FC
Name of entity Registered office % interest % controlConsolidation
method
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 66
III. AUDITORS' REPORT ON THE INTERIM FINANCIAL INFORMATION
To the Shareholders,
In compliance with the assignment entrusted to us by your annual general meetings and in accordance with the
requirements of article L. 451-1-2-III of the French monetary and financial code ("Code monétaire et financier"),
we hereby report to you on:
the review of the accompanying condensed half-yearly consolidated financial statements of Direct Energie,
for the period from January 1 to June 30, 2016,
the verification of the information presented in the half-yearly management report.
These condensed half-yearly consolidated financial statements are the responsibility of the board of directors.
Our role is to express a conclusion on these financial statements based on our review.
1. Conclusion on the financial statements
We conducted our review in accordance with professional standards applicable in France. A review of interim
financial information consists of making inquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an
audit conducted in accordance with professional standards applicable in France and consequently does not
enable us to obtain assurance that we would become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
condensed half-yearly consolidated financial statements are not prepared, in all material respects, in
accordance with IAS 34 - standard of the IFRSs as adopted by the European Union applicable to interim financial
information.
2. Specific verification
We have also verified the information presented in the half-yearly management report on the condensed half-
yearly consolidated financial statements subject to our review.
We have no matters to report as to its fair presentation and consistency with the condensed half-yearly
consolidated financial statements.
Neuilly-sur-Seine and Paris-La Défense, September 28, 2016
The statutory auditors
French original signed by
DELOITTE & ASSOCIES ERNST & YOUNG et Autres
François-Xavier Ameye Philippe Diu
Direct Energie - Consolidated Financial Statements at 30 June 2016
Direct Energie - Interim Financial Report 2016 - Page 67
IV. STATEMENT OF THE PERSON RESPONSIBLE
We certify that, to our knowledge, the condensed financial statements for the half year were prepared in accordance with applicable accounting standards and present a fair view of the assets, financial position and results of Direct Energie and all the companies included in the consolidation, and that the attached interim management report presents a fair view of the significant events that occurred during the first six months of the financial year, their impact on the financial statements, the main transactions carried out between related parties and a description of the principal risks and uncertainties for the remaining six months of the year.
Paris, 28 September 2016.
The Chairman and CEO
Xavier Caïtucoli