EDF_REGISTRATION_DOCUMENT_2017

PRESENTATION OF EDF GROUP Group strategy

an asset disposal plan of approximately €10 billion between 2015 and 2020 that ■ should be almost completed by the end of 2018. At end 2017, the completed transactions represented approximately €8.1 billion; a €1.8 billion working capital requirement optimisation plan from 2015 to 2018; ■ the target has been exceeded at end 2017, with a cumulative contribution of €1.9 billion over the period 2015-2017. The Group is also continuing its efforts to control net investments (excluding Linky, new developments and assets disposals), with a target of approximately €11 billion in 2018. On 28 March 2017, EDF announced that it had successfully completed its €4 billion capital increase, to which the French government has committed €3 billion, in line with its commitment, representing c.75% of the capital increase. The proceeds of the capital increase will be used mainly to finance the Group's development operation between 2017 and 2020, in accordance with the CAP 2030 strategy, as well as to strengthen the Group's financial flexibility. Moreover, in 2017, the Group also worked on its modus operandi around three focus points of its transformation programme: “accountability, simplification and innovation/digital technology”: structuring into 20 business units, and overhauling of management indicators; ■ professionalisation of project managers, with the setting up of an external ■ certification programme; simplification of some processes: purchasing, training, reporting, etc.; ■ development of innovation, with the creation of new services in start-up mode: ■ Sowee, EDF S&F, Zinium, Agregio, as well as support for participative innovation, with more than 30 innovation venues throughout the Group; deployment of a digital strategy: cultural transformation with a group of 30 ■ young people (“Y Project”), increasing use of collaborative tools and structuring to harness data at the service of customers, as well as the optimisation of maintenance and operating costs. Investments in 2017 1.3.3.1 The Group continued its programme of gross operating investments for a total amount of €14.7 billion in 2017, versus €14.4 billion in 2016. Some of these investments are considered as development investments that will generate cash flows in a longer term (see also section 5.1.5.1.2 “Net cash flow used in investing activities”). Total net investments excluding disposals amounted to €16.0 billion including Framatome, compared with €12.8 billion in 2016, representing a €3.2 billion increase. These net investments include the new developments items for €4 billion (mainly Linky for €0.6 billion, the British Nuclear New Build for €1.2 billion and the acquisition of a 75.5% stake in New NP, which has since become Framatome, for €1.9 billion). Aside from new developments, net investments excluding strategic disposals amounted to €12.0 billion in 2017, against €11.8 billion in 2016. They correspond mainly to nuclear maintenance for €4.7 billion, new nuclear (Flamanville 3, Taishan) for € 1.1 billion, regulated activities in France and island systems (excluding Linky) for €3.2 billion (connections, modernisation of the continental and island network), and lastly to renewables (€1.3 billion) and services (€0.5 billion). Asset disposals represented €6.2 billion in 2017 and included the disposal of a 49.9% stake in CTE for €4.1 billion and the assets of EDF Polska for €1.0 billion. Investment programme 1.3.3.2 In the short and medium term, the Group aims to: complete major industrial projects such as the Flamanville 3 EPR in France as well ■ as the smart meters in France (Linky), representing capital expenditure of respectively €10.5 billion (2) and €4.5 billion (3) (see respectively sections 1.4.1.2.2 “Update on the Flamanville EPR project” and 1.4.4.2.4 “Future challenges”); INVESTMENT POLICY 1.3.3

Performance improvement has always been a priority for the EDF group. The current economic and financial context further increases the urge for such improvement. The Group is strengthening control of its costs to bring them into line with its environment. The approach is adjusted depending on the scopes involved (cross-disciplinary functions, operating entities, etc.). Sustainable development 1.3.2.5 As part of its CAP 2030 strategic plan, EDF has made a commitment to corporate responsibility, in connection with the UN's new sustainable development programme (2015-2030), through six Corporate Responsibility Goals (see section 3.1.2 "Corporate social responsibility goals"). The Group has committed to presenting annual results that lay down a roadmap for the Group’s businesses and subsidiaries to serve a profitable and responsible development: climate change: going beyond the requirements of the +2°C goal set by COP 21 ■ by further reducing the Group’s CO 2 emissions, which are already at remarkably low levels compared to the Group’s main European counterparts; human development: incorporating the best practices of industrial groups in the ■ field of human development: health & safety, gender equality and internal promotions; energy poverty: offering all vulnerable populations information and solutions to ■ support them in their energy consumption and help them assert their rights; energy efficiency: innovating through digital energy efficiency solutions so that ■ customers can optimise their consumption; dialogue and consultation: organising systematically and worldwide an initiative ■ of dialogue and consultation which is transparent and open for each new project; biodiversity: launching a positive approach to biodiversity, not merely being ■ aware of or decreasing the impacts of our activities, in order to have a positive effect. Research & Development 1.3.2.6 to support the energy transition Research & Development (R&D) has a crucial role to play in developing low carbon solutions, all the while reinforcing the safe and economically efficient operation of existing and future facilities. See section 1.6 “Research and development, patents and licences”. CAP 2030 success factors 1.3.2.7 CAP 2030 enables the Group to develop a portfolio of assets focused on low carbon, renewable and nuclear energy: services for customers, decentralised energy solutions. The key success factors of CAP 2030 are: the expansion of the range of offers and exemplary customer relations; ■ the management of major projects, in particular the new models for nuclear ■ reactors, the “Grand Carénage” programme or the development of Nuclear New Build in the United Kingdom; the selectiveness of investments in projects, the transformation of the Group’s ■ modus operandi and the commitment of all; cost control. ■ In this context, the Group confirmed in 2017 the deployment of the performance plan announced on 22 April 2016 and updated the targets as shown below (see section 5.4 “Outlook”): a reduction in operating expenses (1) of €0.8 billion from 2015 to 2018; at end ■ 2017, the cumulative reduction amounted to €0.7 billion compared with 2015, which means the initial target has been reached a year ahead of schedule;

1.

At comparable scope and exchange rates. At constant pension discount rates. Excluding change in operating expenses of service activities. (1) 2015 euro cost of the construction of Flamanville 3, excluding interim interest. (2) Over the 2014-2021 deployment period. (3)

15

EDF I Reference Document 2017