Electricite de France is a state-owned electric utility company with a generating capacity of 127,100 MW. It provides power to 28 million customers in France and 10 million customers in other countries across Europe. Nuclear power plants provide 86% of EDF's generated power.  In 2009 EDF posted revenues of $95.1 billion, up 3.9% from 2008.  Its main competitors are E.on AG (OTC:EONGY), RWE AG (FRA:RWE), and GDF Suez (EPA:GSZ).
In 2010, EDF will be affected by the French government's pending decision on the NOME law which sets regulations and prices controls for energy companies. The government is set to force EDF to sell 25% of its nuclear power (EDF owns all 58 nuclear plants in France) to competitors. The selling price is yet to be determined price and could negatively impact EDF's business if the it is set too low. A proposed nuclear tax in Germany is negatively affecting EDF's subsidiary there and could affect the French governments new regulations.
EDF operates in four areas: generation and supply, distribution, transmission & others. Under generation and supply, the Group generates electricity and gas from sources like nuclear, fossil-fuel, hydroelectric and other renewable energies to businesses, local authorities, professionals and residents. Under distribution, the Group undertakes the management of transmission networks of electricity and gas to the end customers. Under transmission, the Group manages the flow and infrastructure of energy carrying high-tension wires. Under the others segment, the Group operates energy services like heating and thermal services and provides help to develop and produce electricity from cogeneration and renewable energy sources.
EDF's revenue in 2009 was €66.3 billion ($95,072), up 3.9% from 2008. Revenue from within France increased 5.4% and revenue from outside France increased 9.3%. Sales in France declined due to decreased demand and lower nuclear output in 2009. Sales in the UK benefited from the acquisition of British Energy by EDF during 2009. German sales fell due to low demand by the industrial sector. Italian sales also fell due to decreased electricity demand. A key positive were sales from International and Other Activities up 9.3% to €32.3 billion. This segment represented 48.7% of the Group's sales in 2009. Strong growth in Poland and continued profits by EDF Energies Nouvelles contributed to the strong performance there. 
EBITDA was €17.5 billion, up by 22.7%. Growth in EBITDA was driven by International businesses (+53.5%). This increase reflected the successful integration of British Energy, as well as organic growth (+18.8%). In France, because of the difficult market conditions in 2009, EBITDA declined 9% in organic terms. 
EDF invested a large amount in 2009 with €14.7 billion spent on acquisitions. Gross capital expenditure was €12.4 billion. EDF spent €486 million on research & development in 2009, up 8.2% from 2008. 
|Year (ended December)||Operating Revenue (millions)||Gross Margin||Operating Margin||Net Income (millions)||Net Profit Margin|
EDF operates 58 nuclear, 33 fossil-fired and 447 hydroelectric plants in France totaling 98.7GW of generating capacity. EDF has 27.7 million customers in France.  France posted a slight 0.8% decline in sales to €34 billion in 2009 due to decreased demand for electricity from end-customers (down 2% of overall demand, with major customers down 5%). One-off events affected generation leading to decreased sales (the decline in nuclear power output -28 TWh and storms that cost the company €160 million). 
EDF has a generation capacity of 12.8GW in the UK with 8 nuclear plants. Nuclear plants make up 69% of installed capacity and 76% of power generation in 2009. EDF has 5.6 million customers in the UK. In 2009 EDF acquired British Energy combining its businesses into EDF Energy. The merger creates UK's largest producer of electricity in terms of generation capacity. EDF also has large gas reserves in the North Sea estimated at 2.8 billion cubic meters.  In 2009 UK sales totalled €11 billion, up 33.9% from 2008, 3.6% of which was organic growth. This was due to the acquisition of British Energy which contributed €3.3 billion to sales.  In July 2010, Hutchison Whampoa offered 5.8 billion pounds ($9.1 billion) to purchase EDF's power networks in the UK.
EDF has 7.2 GW of generation capacity in Germany and 2.8 million customers making it the thrid largest utility company in the country behind E.ON and RWE. Fossil-fired plants make up 44% of installed capacity with nuclear (33%) and hydro (22%) making up the remainder. Renewables made 9% of power generated in 2009. EDF's Germany subsidiary is called EnBW, jointly operated with OEW. EDF owns a 46% holding in EnBW. In 2009 the German market experienced a 6% decline in gas and electricity demand largely due to the industrial sector.  As a result, sales were €7.2 billion in 2009, an organic decline of 4.3%. 
EDF has 6.4 GW of capacity in Italy with 0.2 million customers. Gas makes up 58% of installed capacity with fossil fuels (26%) and hydro (13%) making up the remainder. EDF jointly operates its Italian subsidiary Edison along with a group of italian companies headed by A2A. EDF owns 49% of capital and 50% of voting rights. Edison's sales in 2009 increased 24.6% due to the acquisition of AMG Palermo in March which doubled Edison's gas customers to 0.5 million. Edison plants to invest 1 billion euro between 2010 and 2014 to increase renewables principally in solar and wind. EDF also operates its smaller subsidiary Fenice in Italy.  In 2009, EDF's Italian sales totalled €4.9 billion, down 12.5% on an organic basis due to decreased demand and electricity prices. 
Other international includes other countries in Western Europe (Belgium and the Netherlands), Central Europe (Austria, Switzerland, Hungary, Poland, Slovakia) and the United States and Asia. EDF has 10.2 GW of capacity in these regions and 1.1 million customers. Fossil fueled plants constitute 71% of installed capacity with gas (21%) and nuclear (8%) make up the remainder. In November EDF acquired a controlling stake in Belgian company SPE for €1.3 billion. In 2009 EDF also acquired 50% of Constellation Energy Group (CEG) nuclear portfolio in the United States. It plans to construct new nuclear plants in conjunction with U.S. companies in the next five years. In Asia EDF is a shareholder in a number of power generation companies in China, Thailand, Laos and Vietnam. Its assets mostly consist of fossil-fired plants with hydro plants planned for construction. EDF's size allows it to make global acquisitions on a consistent basis and its international segment will grow in the future.  In 2009, the Other International segment posted revenues of €3.4 billion with an organic sales growth of 10.6% driven by the excellent performance in Poland. 
EDF operates EDF Energies Nouvelles with 2.65 GW of renewable capacity as of December 2009. EDF Energies Nouvelles develops new renewable energy sources for EDF across all their geographic regions principally focusing on wind and solar. It targets 4.2 GW of installed capacity by 2012 according to the EDF 2009 Annual Report. In 2009 wind capacity increased by 619 MW. EDF Trading operates in the wholesale markets for the Group buying and selling electricity, fossil fuels and CO2 quotas.  In 2009, this segment posted €5.8 billion in sales (9.9% organic growth) and an EBITDA of €2.3 billion (organic growth of 25.1%). 
EDF has outperformed its European rivals since January, 2010 by a small margin. Taking other risk factors listed in this section, the positive performance in share price may suggest to investors that those potential risks are neutralized depending on how heavily you weigh them.
The French parliament has been discussing its law regulating electric utilities called NOME in the first half of 2010. Two new elements have were added to the NOME law in April after being reviewed by the French Cabinet. First, for the next five years the french government will set electricity prices after being proposed by the CRE (Commission de Regulation de l'Energie), the body which overseas French electricity and gas markets. Second, EDF will have five additional years extension to the deadline of allocations to dedicated financial assets for nuclear decommissioning. EDF had €11.4 billion in its dedicated asset portfolio at the end of 2009 and the deadline target is €17 billion. This is a positive for EDF in that they do not have to dedicate as much cash per year towards the government deadline. It is estimated that they will save roughly €1.5 billion per year in cash as a result. 
The key unknown element of the law is the price at which EDF will have to sell 25% of its nuclear power generated to other suppliers. Other suppliers in France have limited access to baseload electricity output so the government is forcing EDF, whose nuclear plants supply 80% of France's power needs, to sell part of its power to other suppliers to foster competition. According to a Reuters report, EDF says it should not sell to its rivals below €42 per megawatt hours while the French energy regulator (CRE) says the price should be closer to €37 to ensure the other companies can compete. If the price is set below €42 per megawatt hours, it will negatively affect EDF's business. 
This new law was presented in January, 2010 and could be applied by the start of 2011. It would be voted into law under the normal process in October, 2010 and go into application January, 2011.  
On June 8th, 2010 the German government proposed a tax on nuclear power plants. It envisaged an additional €2.3 billion ($2.8 billion) per year 'windfall tax' on nuclear operators as part of the 2011 Federal Budget and its financial plan up to 2014. EDF would be affected given its 46% stake in EnBW which contributed 7% of the Groups total sales in 2009. If the tax were put into law it would have a €400-500 million impact on EnBW according to Deutsche Bank analysts. A final decision on changes to the phase-out and the related profit share is expected to be included in the National Energy Plan by October 2010, following the initial submissions in July. 
On April 9th 2010, British Energy announced an unplanned outage of its Sizewell B plant manually shutdown on March 17th. The plants last outage was over three and a half years ago. They were unable to fix higher than normal moisture levels within the containment building. This could suggest high deterioration within the plant due to lack of maintenance investment in recent years. EDF Energy has lost 2-3TWh of power so far equating to a €100 million loss in EBITDA. Sizewell B is yet to be fixed and the company says it will resume operations towards the end of summer with 4-6TWh of power lost during the outage. British Energy has also suffered boiler closure unit problems at two other sites last year in 2009 at their Hartlepool and Heysham 1 plants. Outages result in significant annual losses if prolonged and this particular outage raises questions over the condition of the British Energy fleet.  
All data is from 2009.
|Company||Revenue ($millions)||Operating Margin||Net income ($millions)||Generation Capacity (GW)|
|RWE AG||66,201||15.9%||5,490||50 |
|E.ON AG||117,260||11.8%||12,390||73 |
|GDF Suez||114,524||10.2%||7,496||68.4 |