EDF : Prudent outlook for H2 after a solid performance in H1

Solid H1-25 results published yesterday evening by EDF . EBITDA came in at €15.5bn, down 17% YoY, but this was a slighter-than-expected decrease. The decline in EBITDA was mainly due to lower electricity prices in France, in a market context that has now returned to normal since the crisis of 2022. This price effect was itself partially offset by favourable tariff developments for distribution networks in France Net debt fell by €4.4bn over the period to €50bn at 30/06/25, due to positive net cash flow generation, despite the sharp rise in dividends paid (€2.5bn in H1-25 vs. €0.7bn in H1-24). Guidance unchanged for the full year, implying p rudent outlook for H2 . The 2025 guidance remains unchanged ( EBITDA implicitly in a range of €23.5bn-€31.5bn and nuclear production in France, including Flamanville 3, estimated at 350TWh-370TWh - same level expected for 2026 and 2027) . So are the objectives for 2027 (net financial debt/EBITDA ≤ 2.5x and adjusted economic debt/adjusted EBITDA ≤ 4x). During today’s investors call, new group CFO insisted that H1 performance may not be repeated in H2 due to i/ the importance in H1 of ‘cash EBITDA’ (€16.6bn ) and of trading activities’ contribution and ii/   maintenance works being concentrated during summer. On a clearly positive note was EDF giving reassuring elements regarding i/ the corrosion issue at Civaux 2, with repair works now done, and ii/ the reactor build at Hinkley Point C, with ‘no reason for further delay’ identified at this stage. U pward pressure mounting on the S&P rating. W ith these solid results and increased visibility on the French new nuclear build program (see Electricity and industrial competitiveness: how to bring about the EU’s reindustrialization? ), we see growing likelihood that the positive outlook attached to the BBB rating at S&P since June 2024 should eventually turn into a one-notch upgrade. Timing-wise, we would not expect S&P to take any action before i/ the finalization of the post-ARENH mechanism (due later this year?) and probably ii/ the announcement of FY25 results (Feb. 26). We reiterate our OW recommendation on both senior and hybrid debts.