2019 UNIVERSAL REGISTRATION DOCUMENT - Engie EPS

2019 UNIVERSAL REGISTRATION DOCUMENT ANNUAL FINANCIAL REPORT INTEGRATED DOCUMENT

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Dated 30 April 2020

ENGIE EPS S.A. French société anonyme with a Board of Directors and a share capital of € 2,553,372

Registered office : 28, rue de Londres, 75009 Paris, France

Paris Trade and Companies Register - 808 631 691

2019 UNIVERSAL REGISTRATION DOCUMENT

This Universal Registration Document has been filed on 30 April 2020 with the Autorité des Marchés Financiers (“AMF”), as competent authority under Regulation (EU) 2017/1129, without prior approval pursuant to Article 9 of the said regulation.

The Universal Registration Document may be used for the purposes of an offer to the public of securities or admission of securities to trading on a regulated market if completed by a security note and, if applicable, a summary and any amendments to the Universal Registration Document. The whole then formed is approved by the AMF in accordance with Regulation (EU) 2017/1129.

Copies of the present Universal Registration Document are available at the registered office of the Company, located at 28, rue de Londres, 75009 Paris, as well as at the premises of the controlled Italian entity (EPS Elvi Energy S.r.l.), located in Via Anton Francesco Grazzini, 14, 20158 Milan, Italy, and on ENGIE EPS’ website (www.engie-eps.com) and on the website of the AMF (www.amf-france.org/fr).

https://engie-eps.com/

https://www.amf-france.org/fr

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INDEX OF CONTENT 1 PERSONS RESPONSIBLE ................................................................................................... 14 1.1 Person responsible for the Universal Registration Document ........................................... 14 1.2 Statement of the person responsible for the Universal Registration Document and the

Annual Financial Report ..................................................................................................... 14

2 STATUTORY AUDITORS ...................................................................................................... 15 2.1 Principal Statutory Auditors ................................................................................................ 15 2.2 Alternate statutory auditors ................................................................................................ 15

3 RISK FACTORS ..................................................................................................................... 16 3.1 Risks related to the environment in which ENGIE EPS operates ...................................... 17 3.2 Risks related to the activities of the ENGIE EPS Group .................................................... 21 3.3 Financial Risks ................................................................................................................... 26 3.4 Risks related to the COVID-19 outbreak and related potential negative impact on cash .. 30

4 INFORMATION ABOUT THE ISSUER .................................................................................. 33 4.1 Corporate name of the Company ....................................................................................... 33 4.2 Place and registration number of the Company, SIRET number, VAT number and legal

entity identifier (‘LEI’) .......................................................................................................... 33 4.3 Date of incorporation and duration of the Company .......................................................... 33 4.4 Corporate seat of the Company, applicable legislation, address, telephone number and

website of the Company ..................................................................................................... 33

5 PRESENTATION OF THE ENGIE EPS GROUP ................................................................... 34 5.1 Introduction ......................................................................................................................... 34 5.2 Main updates from previous Registration Document ......................................................... 34 5.3 Principal activities and installed base ................................................................................. 37 5.4 Principal markets ................................................................................................................ 47 5.5 Business Strategy and objectives ...................................................................................... 57 5.6 Dependence on patents or licence, industrial, commercial or financial contracts or new

manufacturing processes ................................................................................................... 61 5.7 Investments ........................................................................................................................ 62 5.8 Relevant joint ventures and undertakings .......................................................................... 63 5.9 Relevant Environmental issues .......................................................................................... 64 5.10 General Data Protection Regulation, Cybersecurity and Information Systems ................. 64

6 ORGANISATIONAL STRUCTURE ........................................................................................ 67 6.1 Organisational Structure ..................................................................................................... 67 6.2 The ENGIE EPS Group ...................................................................................................... 67 6.3 List of existing branches ..................................................................................................... 71

7 OPERATING AND FINANCIAL REVIEW FOR THE FINANCIAL YEARS ENDED ON 31 DECEMBER 2017, 2018 AND 2019 ............................................................................................... 73 7.1 Financial condition .............................................................................................................. 73 7.2 The principal factors affecting performance of the ENGIE EPS Group during the period . 75 7.3 Post-closing events, December 2019 ................................................................................ 76 7.4 Presentation of the principal items of the consolidated income statement and comparison

of financial period ended 31 December 2019, 2018 and 2017 .......................................... 77 7.5 Results of the Company ..................................................................................................... 94

8 CASH FLOW AND SHARE CAPITAL OF THE ENGIE EPS GROUP .................................. 99 8.1 Financial sources of the ENGIE EPS Group ...................................................................... 99 8.2 Net financial position ........................................................................................................ 101 8.3 Cash flow for financials years 2019, 2018 and 2017 ....................................................... 102 8.4 Restrictions on the use of the capital ............................................................................... 107 8.1 Expected sources of financing ......................................................................................... 107

9 REGULATIONS APPLICABLE TO THE ENGIE EPS GROUP .......................................... 108 9.1 General Regulatory Environment applicable to ENGIE EPS Group ................................ 108 9.2 Regulation applicable to ENGIE EPS Group products and equipment............................ 108

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10 TREND INFORMATION ....................................................................................................... 112 10.1 Key trends having affected the production, sales and inventory ...................................... 112 10.2 Known trends, uncertainties, commitment requests and events reasonably likely to have a

material effect on the Company’s prospects .................................................................... 112 10.3 COVID-19 and 2020 revenues guidance ......................................................................... 115 10.4 Cash preservation measures ........................................................................................... 116

11 PROFIT FORECASTS ......................................................................................................... 118

12 ADMINISTRATIVE AND EXECUTIVE BODIES .................................................................. 119 12.1 Board of Directors and Managing Director ....................................................................... 119 12.2 Mission of the Board of Directors ..................................................................................... 126 12.3 Meetings of the Board of Directors ................................................................................... 127 12.4 Major accomplishment of the Board of Directors ............................................................. 128 12.5 Attendance and participation rate to the Board of Directors ............................................ 128 12.6 The Chairman and the Internal Rules of the Board of Directors ...................................... 129 12.7 Assessment of the operations of the Board of Directors .................................................. 130 12.8 Information provided to the Board of Directors ................................................................ 130 12.9 Independence Criteria and Committees ........................................................................... 130 12.10 Absence of conflicts of interests ....................................................................................... 131 12.11 Absence of convictions or official sanctions, or disqualification decision ......................... 131 12.12 Separation of the Managing Director from the Chairman role .......................................... 132 12.13 Executive Committee ........................................................................................................ 133 12.14 Information referred to under article L. 225-37-5 of the French Commercial Code ......... 134

13 REMUNERATION AND BENEFITS ..................................................................................... 136 13.1 Compensation policy applicable to the management: principles and criteria for

determining, allocating and granting compensation – Ex ante Votes .............................. 136 13.2 Components of the total compensation paid or awarded during the financial year 2019 –

Ex post Votes .................................................................................................................... 140

14 FUNCTIONING OF ADMINISTRATIVE AND EXECUTIVE BODIES .................................. 154 14.1 Management of the Company (members of the management and of the Board of

Directors) .......................................................................................................................... 154 14.2 Information on the agreements binding on the directors and the Company .................... 154 14.3 Specialised committees .................................................................................................... 154 14.4 Ad hoc Committees: the Independence Committee ......................................................... 159 14.5 Transactions by members of the Management or of the Board of Directors on the shares

of the Company (or persons related to them) ................................................................... 160 14.6 Corporate governance ...................................................................................................... 160 14.7 Potential material impacts on the corporate governance, including future changes in the

board and committees composition (in so far as this has been already decided by the board and/or Annual General Meeting). ........................................................................... 163

14.8 Information on Control and Risk Management Procedures ............................................. 163

15 EMPLOYEES........................................................................................................................ 166 15.1 Number and allocation of employees by position ............................................................. 166 15.2 Holdings and stock options held by ENGIE EPS executives and employees ................. 167 15.3 Profit sharing and participation agreements ..................................................................... 167

16 PRINCIPAL SHAREHOLDERS ........................................................................................... 168 16.1 Ownership of the share capital ......................................................................................... 168 16.2 Voting rights of the principal shareholders ....................................................................... 168 16.3 Control of the Company ................................................................................................... 168 16.4 Agreements likely to entail a change of control ................................................................ 168

17 RELATED PARTY TRANSACTIONS .................................................................................. 169 17.1 Intra-group Operations ..................................................................................................... 169 17.2 Significant agreements concluded with related parties .................................................... 169 17.3 Special report by the statutory auditors on regulated agreements and commitments ..... 173

18 FINANCIAL INFORMATION CONCERNING THE ISSUER’S ASSETS, FINANCIAL SITUATION AND RESULTS ........................................................................................................ 174

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18.1 Consolidated Financial Statements of the ENGIE EPS Group for the financial year ended 31 December 2019 ........................................................................................................... 174

18.2 Company’s accounts for the financial year ended 31 December 2019 ............................ 174 18.3 Date of the last financial information ................................................................................ 174 18.4 Dividend distribution policy ............................................................................................... 174 18.5 Judicial proceedings and arbitration ................................................................................. 175 18.6 Significant change in the financial or commercial situation .............................................. 175

19 SUPPLEMENTARY INFORMATION ................................................................................... 176 19.1 Share capital ..................................................................................................................... 176

20 MATERIAL AGREEMENTS ................................................................................................. 182 20.1 Summary of material agreements .................................................................................... 182 20.2 Summary of agreements concluded under extraordinary conditions ............................... 182

21 DOCUMENTS ACCESSIBLE TO THE PUBLIC .................................................................. 183

22 REFERENCE TABLES ........................................................................................................ 184

ANNEX 1 - Consolidated Financial Statements FY 2019 ......................................................... 188

ANNEX 2 - Report of the statutory auditors on FY 2019 ......................................................... 251

ANNEX 3 - Statutory Accounts FY 2019 .................................................................................... 313

ANNEX 4 - Report of the statutory auditors on Statutory FY 2019 ........................................ 338

ANNEX 5 - Special Report on Regulated Agreements ............................................................. 366

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The English version of the Universal Registration Document is a free translation of the original Universal Registration Document which was prepared in French and filed with the Autorité des Marchés Financiers on 30 April 2020.

All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein, the original language version in French takes precedence over this translation.

The only binding version is the French language version.

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GENERAL REMARKS

(1) DEFINITIONS

In this Universal Registration Document, unless specified otherwise the terms below have the following meanings:

• 2020 Strategic Plan means the plan announced in 2017 describing ENGIE EPS Group development strategy and the corresponding financial objectives until 2020.

• 2018 Incentive Plan means the new profit-sharing plan adopted by the Board of Directors on 6 March 2018, under the ENGIE SPA.

• AC means Alternate Current.

• A.I. means Artificial Intelligence

• Backlog or Project backlog means, as of a given date, the estimated revenues and other income attributable to (1) purchase orders received, contracts signed and projects awarded as of the date hereof, and (2) Project Development contracts associated with a Power Purchase Agreement, where the agreed value is a price per kWh of electricity and an amount of MW to be installed.

• Balance of System means the management and optimization technology platform composed of power and control electronics coupled with intelligent software.

• BESS means Battery Energy Storage Systems.

• BMS means Battery Management System.

• Board of Directors means the Conseil d’Administration of the Company, in place and as composed as at the date of publication of this Universal Registration Document.

• C&I means Commercial and Industrial.

• CO2 means Carbon Dioxide.

• Company or ENGIE EPS means the company ENGIE EPS S.A. (formerly Electro Powers Systems S.A.), a French limited liability corporation (société anonyme) with its registered office located at 28, rue de Londres, 75009 Paris, France, and registered with the Trade and Companies Register of Paris under number 808 631 691.

• Consolidated Financial Statements of the ENGIE EPS Group means the consolidated financial statements of the Company prepared in accordance with IFRS norms as adopted by the European Union on fiscal year 2017, 2018 and 2019. The Consolidated Financial Statements for the year ended 31 December 2017 and 31 December 2018 are incorporated by reference and the Consolidated Financial Statements for the year ended 31 December 2019 are contained in Annex 1 of this Universal Registration Document.

• DC means Continuous Current.

• Demand Response means an opportunity for consumers to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives. Demand Response programmes are being used by electricity system planners and operators as resource options for balancing supply and demand. Such programmes

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can lower the cost of electricity in wholesale markets, and in turn, lead to lower retail rates. Methods of engaging customers in Demand Response efforts include offering time-based rates such as time-of-use pricing, critical peak pricing, variable peak pricing, real time pricing, and critical peak rebates. It also includes direct load control programmes that give power companies the ability to cycle air conditioners and water heaters on and off during periods of peak demand, in exchange for a financial incentive and lower electricity bills.

• DER means Distributed Energy Resources.

• Distributed Solutions means Grid Support Solutions or Grid Connected Solutions and Off-Grid Power Generation Solutions or Microgrids and Off-Grid Solutions developed by the ENGIE EPS Group.

• DROOP Virtual Inertia Algorithm means the control algorithm present in the firmware of the ENGIE EPS Group’s PCS that allows the power electronic device to have the same inertial response of a rotating machine.

• DSO means Distribution System Operation.

• easyWallbox means a special residential EV charging station developed and patented by the ENGIE Eps Group.

• EIB means the European Investment Bank.

• EIB Financing means a €30 million unsecured facility made available to EPS Elvi to finance its growth, continuous research, development and innovation activities and the commercialisation of its products.

• EIB Warrants means the EIB 660,513 share warrants (bons de souscription d’actions) issued by the Company as remuneration for the first tranche of the Financing loan facility. Each warrant has been subscribed by the EIB for a price of €0.01 and, upon payment of an exercise price of €0.20, give the right to receive one ordinary share of the Company.

• Electric and Hybrid Vehicles means vehicles operating by battery and vehicles combining both electric vehicle transmission and an Internal Combustion Engine (“ICE”).

• ElectroSelfTM means the patented technological platform, entirely integrated into an open architecture and composed of three basic elements: power to gas module, a storage unit and a gas to power electricity supply system.

• EMS means Energy Management System.

• ENGIE means ENGIE S.A., a société anonyme incorporated under the laws of France, registered with the Registre du Commerce et des Sociétés of Nanterre under number 542 107 651 and having its registered office located at 1 place Samuel de Champlain, 92400 Courbevoie, France.

• ENGIE Acquisition: acquisition by ENGIE of a strategic ownership interest in ENGIE EPS of around 56.1% of the Company’s share capital and voting rights, which closed on 7 March 2018, followed on 29 March 2018 by the filing of a simplified mandatory tender offer which closed on 14 June 2018. As a result of the tender offer, ENGIE (through its subsidiary GDF International) held 60,5% of the share capital and voting

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rights of ENGIE EPS (post-exercise by ENGIE, through its subsidiary GDF International, of all of the instruments giving access to the capital subscribed in the offer).

• ENGIE EPS or Company means the company ENGIE EPS S.A. (formerly Electro Power Systems S.A.), a French limited liability corporation (société anonyme) with its registered office located at 28, rue de Londres, 75009 Paris, France, and registered with the Trade and Companies Register of Paris under number 808 631 691.

• ENGIE EPS Group means the Company and the ENGIE EPS Group Companies.

• ENGIE EPS Group Companies means as at the date of the present Registration Document, collectively or, when used in the singular form, each of them, EPS Elvi, EPS Manufacturing, EPS USA, MCM and Comores Energies Nouvelles S.a.r.l..

• ENGIE Group means ENGIE and its subsidiaries.

• ENGIE SPA means the sale and purchase agreement between the majority shareholders of ENGIE EPS and GDF International signed on 24 January 2018.

• Energy Density means quantity of energy which may be delivered with regard to the volume or to the mass of the source of energy considered.

• EPC means Engineering, procurement and construction contract.

• EPS Elvi means EPS Elvi Energy S.r.l. (formerly Elvi Energy S.r.l.), an Italian limited liability company with its registered office located at Via Anton Francesco Grazzini 14, 20158 Milan, Italy, and registered with the Trade and Companies Registry of Milano under the number MI 2082791.

• EPS Manufacturing means Electro Power Systems Manufacturing S.r.l. (formerly Electro Power Systems S.p.A.), an Italian limited liability company with its registered office located at Via Anton Francesco Grazzini, 14, 20158 Milan, Italy, and registered with the Trade and Companies Registry of Milano, Italy under the number MI – 2073745.

• EPS India means Electro Power Systems India Private Limited, a limited liability company with its registered office located K-61 Basement, Jangpura Extension, 110014, New Delhi (India).

• EPS USA means Electro Power Systems Inc., a limited liability company with its registered office located at 160 Greentree Drive, Suite 101, Dover, 19904 Kent County, Delaware, USA.

• Euronext Paris means the regulated market of Euronext Paris.

• EV means Electric Vehicle.

• e-Mobility means control techniques for the management of devices in full Electric and Hybrid Vehicles in collaboration with suppliers of electrical devices qualified as suppliers in the automotive sector.

• FCA means Fiat Chrysler Automobiles NV and its subsidiaries.

• Firmware means the PCS software. It consists in a set of instruction typically programmed on hardware device and stored in a ROM memory.

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• Frequency Regulation concerns the provision or absorption of brief variations in power, in order to maintain equilibrium between supply and demand and hence the frequency of the current. Frequency Regulation is often guaranteed by the grid operator.

• GDF International means GDF International, a société par actions simplifiée incorporated under the laws of France, with registered office in Courbevoie (92400), 1 place Samuel de Champlain (France) and number of registration with the Companies Register of Nanterre 622 048 965.

• Grid Support Solutions or Grid Connected Solutions means hybrid energy storage systems developed to stabilize electrical grid in developed countries, heavily penetrated by renewable sources.

• GW means Gigawatt.

• GWh means Gigawatt-hour.

• HyESS® or HyESS means the Hybrid Energy Storage Systems. The patent has been registered on 26 February 2016.

• Hydrogen Module is a hydrogen-based energy storage system comprising i) an electrolyser unit, that uses electricity to split water molecules into hydrogen and oxygen, ii) a storage unit to warehouse the resulting hydrogen in gaseous or other forms, and iii) a fuel cell unit to reconvert hydrogen and oxygen into electricity on demand, releasing water.

• IT means Information technology.

• kVA means Kilovolt Ampere.

• KW means Kilowatt.

• KWh means Kilowatt-hour.

• Li-ion means Lithium-ion.

• Long Term Strategic Plan means an internal and confidential document that describes the ongoing evolution of all the technological challenges facing the ENGIE EPS Group, its development strategy and the corresponding financial objectives until 2025.

• m2 means Square Meters.

• MCM means MCM Energy Lab S.r.l., an Italian limited liability company with its registered office located at Via Anton Francesco Grazzini 14, 20158 Milano and registered with the Trade and Companies Registry of Milano under the number MI 1829289. MCM is in liquidation since 8 January 2020.

• Mobility Solutions (Mobility) means control techniques for the management of rail mobility.

• ms means milliseconds.

• MW means Megawatt.

• MWh means Megawatt/hours.

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• Off-Grid Power Generation Solutions or Microgrids and Off-Grid Solutions means microgrids systems and support to power off-grid and weak-grid areas at a lower cost and more reliably than fossil fuels developed in emerging economies.

• Order Intake consists of the aggregate contract value in terms of MW or euros with reference to all purchase orders received, contracts signed, and projects awarded for a period.

• P2P means Power to Power.

• PCS means Power Conversion Systems.

• Pipeline means the estimate, to date, of the amount of potential projects, tenders and requests for proposal for which the ENGIE EPS Group has decided to participate or respond.

• POOL Algorithm means the control algorithm used within the EMS that allows to manage the power flow of the ENGIE EPS Group’s systems.

• PPA means Power Purchase Agreement, a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer).

• Project Development is when the ENGIE EPS Group acts directly, or with its partners, to develop, own and manage the electricity generation and storage system and conclude the associated PPA.

• Product Line means each of the three lines of solutions offered by the ENGIE EPS Group.

• PV means Photovoltaics.

• R&D means research and development.

• SARs means Stock Appreciation Rights, a “cash” instrument which replaced the existing stock options and Warrants, reproducing the economic profile of a stock options or a warrant.

• System Block means each of the products assembled or quality tested in ENGIE EPS Group’s facilities for inclusion in the ENGIE EPS Group’s solutions or off-the-shelf sale to final clients.

• Spinning Reserve means generation capacity that is on-line but unloaded and can respond quickly when needed for minutes (primary reserve) or hours (secondary reserve).

• Technology Family means each of the four families of System Blocks comprising ENGIE EPS Group’s Product Lines.

• Technology Partnership Agreement means an agreement between two or more parties that implies a technical cooperation in order to form and carry on a for-profit business. Among other things, it states (1) the nature of the technological project, (2) the capital contributed by each party, and (3) their rights and responsibilities.

• TSO means Transmission System Operators and refers to the operators of the electricity transmission networks.

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• V means Volt.

• V2G means Vehicle to the Grid.

• Virtual Inertia means the ability of PCS to instantly react to active power imbalances simulating the inertial behaviour of the rotating masses of conventional generators.

• W means Watt.

• Warrants refer to the warrants (bons de souscription d’actions) allowing, upon exercise, to subscribe shares of the Company, issued by the Board of Directors pursuant to an authorization granted by the extraordinary shareholders’ meeting of the Company held on 16 February 2015 (18th resolution) and 21 June 2016 (21st resolution), exercised by their beneficiaries, or replaced by SARs in the case of unexercised warrants.

• Wh means Watt-hour.

• μs: means Microseconds.

(2) DISCLAIMER

This Universal Registration Document contains information about the Company’s activities and the markets in which it operates. This information comes from studies carried out by internal or external sources (e.g.: industry publications, specialist studies, information published by market research firms, analysts’ reports). In the Company’s opinion, this information gives a fair and true picture of its reference markets and its competitive position in that market at the time of writing. However, this information has not been verified by an independent expert and the Company cannot guarantee that a third party using different methods to collate, analyse or calculate market data will obtain the same results.

This Universal Registration Document also contains forward looking statements about the Company’s objectives and development strategies. Such statements may be identified by the use of the future or conditional tense and by terms of a prospective nature such as “estimate”, “consider”, have as objective”, “expect to”, “intend”, “should”, “hope”, “could”, “may” and other variations and similar terminology. Readers’ attention is drawn to the fact that these objectives and development strategies are not historical data and should not be interpreted as a guarantee that the facts or data will occur, that the assumptions will be proven correct, or that the objectives will be achieved. By their very nature it is possible that the objectives will not be achieved and that the information in this Universal Registration Document may be proven incorrect without the Company being under any obligation to update them, subject to applicable regulations, in particular the General Regulations of the AMF.

Investors are advised to take into careful consideration the risk factors described in chapter 3 “Risk factors” of this Universal Registration Document before making an investment decision. Should any or all of these risks materialise, they may have a negative impact on the Company’s activity, financial position, profits or objectives. Furthermore, other risks, not yet identified or considered not significant by the Company, may have a similar negative impact and investors may lose all or part of their investment.

A glossary defining the main scientific and technical terms used here is provided at the beginning of this Universal Registration Document.

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Certain statistical data (including data expressed in thousands or millions) and percentages presented in this Universal Registration Document have been rounded. If applicable, the totals presented in this Universal Registration Document may present insignificant deviations from the totals that would have been arrived at by adding up the exact (non-rounded) values in the statistical data.

(3) INCORPORATION BY REFERENCE

In accordance with Article 19 of the Regulation (EU) No 2017/1129 of 14 June 2017, this Universal Registration Document incorporates by reference the following information:

• the Consolidated Financial Statements of ENGIE EPS Group and the Statutory Auditors’ report thereon for the year ended 31 December 2017, on pages 305 to 356 and on pages 298 to 304 of the Registration Document filed with the AMF on 13 July 2018 under number filing number R.18-057 (the “2017 Registration Document”);

• the annual financial statements and the Statutory Auditors’ report thereon for the year ended 31 December 2017 appearing on pages 358 to 379 and on pages 381 to 386 of the 2017 Registration Document:

• the Consolidated Financial Statements of ENGIE EPS Group and the Statutory Auditors’ report thereon for the year ended 31 December 2018, on pages 261 to 328 and on pages 329 to 335 of the Registration Document filed with the AMF on 30 April 2019 under number filing number R.19-020 (the “2018 Registration Document”);

• the annual financial statements and the Statutory Auditors’ report for the year ended 31 December 2018 appearing on pages 336 to 357 and on pages 358 to 364 of the 2018 Registration Document.

The information included in these two registration documents, other than that mentioned above, has been replaced and/or updated, as applicable, with the information contained in this Universal Registration Document.

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1 PERSONS RESPONSIBLE

1.1 Person responsible for the Universal Registration Document

Carlalberto Guglielminotti, Chief Executive Officer.

1.2 Statement of the person responsible for the Universal Registration Document and the Annual Financial Report

“I hereby certify that, having taken all reasonable measures to ensure that this is the case, to the best of my knowledge, the information contained in this Universal Registration Document is in accordance with the facts, and that it makes no omission likely to affect its scope.

I hereby certify that, to the best of my knowledge, the financial statements have been prepared in accordance with applicable accounting standards and provide a true and fair view of the assets and liabilities, financial position and profit or loss of the Company and of all the consolidated companies, and that the Management Report, in sections 3-5.2-7-8 and 10, gives an accurate picture of the changes in the business, profit or loss and financial position of the Company and of all the consolidated companies, as well as a description of the main risks and uncertainties to which they are subject.”

29 April 2020

Carlalberto Guglielminotti

Chief Executive Officer

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2 STATUTORY AUDITORS

2.1 Principal Statutory Auditors

BDO Paris Audit & Advisory, member of the Compagnie Régionale des Commissaires aux Comptes de Paris.

43-47, avenue de la Grande Armée, 75116 Paris

Represented by Eric Picarle

Date of appointment: 21 June 2016

Duration of mandate: 4 years

Date of expiration of the mandate: at the close of the Annual General Meeting called to approve the financial statements for the year ending 31 December 2019.

RBB BUSINESS ADVISORS, member of the Compagnie Régionale des Commissaires aux Comptes de Paris.

133 bis, rue de l’Université, 75007 Paris

Represented by Jean-Baptiste Bonnefoux

Date of appointment: 6 March 2015



2.2 Alternate statutory auditors

DYNA AUDIT, member of the Compagnie Régionale des Commissaires aux Comptes de Paris

35, rue de Rome 75008 Paris

Represented by Mr. Laurent Courquin

Date of nomination: 21 June 2016



GROUPE RBB, member of the Compagnie Régionale des Commissaires aux Comptes de Paris

133 bis, rue de l’Université, 75007 Paris

Represented by Philippe Rouer

Date of appointment: 6 March 2015



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3 RISK FACTORS

The ENGIE EPS Group, through its activities and the environment in which it operates, faces numerous risk factors that could negatively impact its operations, situation, financial performance and prospects, in particular the successful implementation of the Long Term strategic Plan (see paragraph 5.2 of this Universal Registration Statement).

The risk factors that are discussed below are those that, within the larger number of risk factors faced by the ENGIE EPS Group, meet the criteria of materiality and specificity set out by EU Regulation 2017/1129 of 14 June 2017 for inclusion in this Universal Registration Document. Other risk factors, identified by the ENGIE EPS Group but which do not meet these criteria, or not identified by the ENGIE EPS Group, could also have a negative material impact.

The risk described are grouped in three categories:

• Risks related to the environmental in which ENGIE EPS Group operates;

• Risks related to the activities of ENGIE EPS Group; and

• Financial Risks.

A specific risk factor relating to the COVID-19 outbreak has been added and constitutes a new category itself.

The risk factors are presented in the table below which also indicates, for each of them, the probability of their occurrence and the extent of their impact on ENGIE EPS Group’s operations, situation, financial performance and prospects, as of the date this Universal Registration Document, taking into account the remediation actions and control measures implemented by ENGIE EPS Group as of that date. The probability of occurrence is assessed on three levels ("low", "moderate" and "high") and the extent of their negative impact is assessed on four levels ("low", "moderate", "high" and "critical"). The risk factors are presented, within each category, first by decreasing order of probability of occurrence and then, for the same level of probability, by decreasing order of impact, so that the risk factor with the highest probability of occurrence and the highest impact is, within each category, presented first. The full description of these risk factors further below follows that order.

Risk Category Risk Factor Probability Impact

Risks related to the environment in which ENGIE EPS Group operates

Fast changing economic and competitive environment

HIGH MODERATE

Risks related to EPS Group operations in certain emerging markets

HIGH MODERATE

Regulatory environment MODERATE LOW

Risk related to the activities of ENGIE EPS Group

Risks related to human resources

MODERATE HIGH

Risks related to key suppliers MODERATE HIGH

Risks related to the development and sale of eMobility equipment

MODERATE MODERATE

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Risk Category Risk Factor Probability Impact

Risks related to industrial operations

MODERATE MODERATE

Risks related to the dependence on ENGIE

LOW CRITICAL

Financial Risks Risks related to potential volatility of ENGIE EPS Group financial performance linked to ENGIE EPS Group success in tender and request for proposal

MODERATE CRITICAL

Risks associated with the Euro-US Dollar exchange rate

MODERATE LOW

Liquidity risk LOW CRITICAL

Credit and/or counterparty risks LOW HIGH

3.1 Risks related to the environment in which ENGIE EPS operates

3.1.1 Fast changing economic and competitive environment

The ability of the ENGIE EPS Group to succeed in securing sales contracts is affected by the pace of affirmation and the geographical spread of storage technologies in the energy, industrial and mobility sectors.

In the medium term, in developed economies the continued drive towards “low carbon” (or even zero-carbon) electricity generation should reasonably result in fast paced growth of the energy storage sector, as a necessary complement to intermittent renewable generation sources. In developing economies, renewable generation sources are likely to be competitive with fossil fuel generation sources (especially diesel).

However, in the short term, there is a risk that ENGIE EPS’s market evolution expectations (both in developed and developing countries) could be disattended. In developed economies the pace of further renewable generation deployment might be affected (including severely) by both a generalized or global economic conjuncture and by regional or country-level economic slow-down or recession. In developing economies, the main short-term risks are of economic nature. Firstly, wholesale oil prices remain relatively low, thus making fuel oil or diesel generation competitive. Secondly, while renewable generation sources and energy storage systems are both relatively inexpensive to run (e.g. no fuel costs), they are also more capital intensive than conventional generation (e.g. diesel gensets). In developing economies, the cost of capital is normally high and its availability normally low. A global economic slowdown would exacerbate this risk.

In addition to the above, the energy storage sector is going through a process of concentration, with the emergence of highly credible and well capitalized competitors for the ENGIE EPS Group, which may affect its market share and profitability. ENGIE EPS benefited from this development when it became part of the ENGIE Group in

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2018, but this itself has drawbacks as, since the ENGIE Acquisition, ENGIE EPS has lost several potential and existing customers due to the fact that such existing or potential customers of ENGIE EPS also happen to be direct competitors of the ENGIE Group. ENGIE EPS expects this trend to continue for the foreseeable future, which will also result in a customer concentration risk. For solar-plus-storage projects, this concentration risk will be heightened by the business model that ENGIE EPS intends to pursue: working in close collaboration with ENGIE Solar (normally with ENGIE EPS working as a subcontractor of ENGIE Solar).

In the still nascent energy storage sector, the competitive environment poses heightened risks for ENGIE EPS Group. With relatively few experts on energy storage outside the specialised players, customers are in fact likely to be more demanding about (or attracted by) references and past experiences of storage solutions providers. Also, key suppliers such as battery manufacturers are likely to focus more on early winners in the storage race. In the Giga Storage product line ENGIE EPS Group currently competes with players which have more (and/or larger) project references. Thus, ENGIE EPS Group’s loss in the projects it is currently competing for is likely to have a compounded negative impact on its ability to compete for later opportunities. A similar risk also applies in the Industrial Solutions product line, albeit to a lesser extent given the customized nature of these systems.

In the Industrial Solutions and e-Mobility product lines ENGIE EPS Group relies on the technological competitiveness of its products and solutions, for instance the fast reaction of the technology embedded into its HyESS® platform, or its innovative and patented easyWallbox. Such reliance is very high in the Industrial Solutions product line, given the centricity of proprietary technology but only medium to low in the e-Mobility product line, given the make-or-buy approach adopted in the latter. ENGIE EPS Group operates in a fast growing and changing technological environment, in which nimble start-up companies compete with large incumbents with significant R&D budgets. Therefore, ENGIE EPS Group faces a clear risk of loosing its technological hedge to one or more competitors including in the short term.

The materialization of risks described in this section could materially affect the ability of ENGIE EPS Group to successfully implement its Long Term Strategic Plan, including financial targets therein.

3.1.2 Risks related to the ENGIE EPS Group’s operations in certain emerging markets

The ENGIE EPS Group operates and has clients and partners located around the world, including in emerging countries, such as Comoros and Somalia in Africa and several islands in the Pacific. In such countries the socio-political framework and macroeconomic outlook are less stable than in the OECD (Organisation for Economic Cooperation and Development) countries. In fact, adverse political, social and economic developments may negatively impair the ENGIE EPS Group’s ability to continue operating in an economic way, either temporarily or permanently.

ENGIE EPS Group is also exposed to increased risks to the security and/or health and/or safety of its employees. As an example, ENGIE EPS Group has sold systems in the province of Garowe in Somalia, whose country risk is ranked as high or extreme by the majority of European diplomacies. In these cases, particular and dedicated security measures must be put in place, such as the accommodation at the United

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Nation Development Program (“UNDP”) compound, the 24h armed escort team, the armed equipped vehicles, etc., and these have a cost. Further, the ENGIE EPS Group may be forced to evacuate personnel for security reasons, which would mean that the project is stopped or even abandoned.

Another aspect is risks associated with subcontractors. As it is standard practice for the construction and installation industry, ENGIE EPS Group necessarily needs to select local contractors to which it subcontracts certain works (civil, electrical, installation etc.) to be carried out on site. In emerging countries, ENGIE EPS Group cannot always rely on well established, reliable subcontractors, with whom it already has (or the ENGIE Group already has) existing relationships. Further, ENGIE EPS Group must closely monitor these subcontractors, in countries that are far away and hard to reach. This difficulty is compounded by the relatively small size and limited human resources of the ENGIE EPS Group. Vis-à-vis subcontractors in such emerging countries ENGIE EPS Group therefore faces risks that range from mere underperformance to serious contractual breaches relating to critical areas such as health, safety and environmental compliance or ethics and compliance.

Finally, in certain developing countries, there is also a risk of international sanctions. As such the ENGIE EPS Group must comply with international sanctions regimes relating to corruption, money laundering and terrorism financing, in the jurisdictions in which it operates. In particular, the ENGIE EPS Group must comply with the sanction’s regimes imposed by the United States of America, the European Union and the United Nations on certain countries, entities and individuals. These regimes are complex, frequently overlapping and frequently changing. There is no guarantee that the ENGIE EPS Group will not run afoul of these regimes, directly but also, and more likely, because of the ENGIE EPS Group’s relations with a third party that would itself violate them. Third party compliance is particularly difficult to monitor, and these sanctions regimes can assign liability to an innocent party because of such monitoring failures. As at the date of this Universal Registration Document, the ENGIE EPS Group is not subject to any sanction procedure and/or any international sanctions.

The materialization of any of the risks within this section could have negative (including material) financial consequences on ENGIE EPS Group as well as result in serious reputational damage.

3.1.3 Risk related to changes in regulatory environment

The international deployment of ENGIE EPS Group will expose it to different economic, fiscal, legal, regulatory and political frameworks which impact its activities. With respect to the environmental and social legislation, the ENGIE EPS Group is subject to numerous regulations, internationally and throughout Europe. The possible complexity of these and future rules and regulations could result in delays in project execution and/or significant costs in order to assure compliance with these rules and regulations.

The products and technologies used by ENGIE EPS Group are also governed by complex and specific, quality, health and safety regulations, which vary according to the activity being performed (production, transport or storage of electric components, hydrogen, oxygen and lithium) and on the type of application (stationary, mobility and portable). It is the ENGIE EPS Group’s responsibility to identify the regulations applicable to each product developed for its business and to meet the requirements.

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Monitoring and complying with this vast array of regulations and their development is costly and even though the ENGIE EPS Group has dedicated resources assigned to this task, there is no guarantee that it will comply with all applicable regulations. This task is made even more difficult in certain emerging countries in which ENGIE EPS Group operates and in which the regulatory environment is unclear or old and in adapted to recent technological evolutions. Any compliance failure could first of all result in severe disruptions of its industrial operations. Additionally, or alternatively, it could result in delays in the completion of the ENGIE EPS Group’s projects, either directly or as a consequence of the industrial operations’ disruptions. Furthermore, non-compliance with applicable regulations could lead to ENGIE EPS Group being excluded from tenders and requests for proposal, being barred from operating in the relevant jurisdiction, facing fines or be held liable for any resulting damages.

Applicable regulation is subject to change in any of the markets in which ENGIE EPS Group operates or intends to operate, including Italian and European regulations that relate to ENGIE EPS Group industrial operations. ENGIE EPS Group is therefore first and foremost exposed to changes in regulations that could affect its industrial operations. Any new regulation in this field could result in additional costs to comply and/or disruptions to operations.

Additionally, while ENGIE EPS Group has not assumed any material operations or financial results based on subsidized markets for energy storage, ENGIE EPS Group has assumed in its Long Term Strategic Plan that enabling regulation in selected markets would either evolve in a certain favourable direction or not evolve in a negative direction in order for ENGIE EPS Group to be able to successfully implement its financial and strategic targets. ENGIE EPS Group is therefore exposed to the risk of such assumptions not being realized.

Within the Giga Storage product line, ENGIE EPS Group’s expected development of utility-scale storage markets is in some cases dependent on the evolution of favourable enabling regulation – for example for the competitive participation of energy storage assets in ancillary services markets. Amongst ENGIE EPS Group’s target markets Italy deserves a special mention: here the enabling regulation for the first large scale tender process has not been yet finalized. Favourable or at least enabling regulation is also necessary for the further development of markets for solar-plus-storage storage, although at present ENGIE EPS Group is only targeting markets with existing enabling regulation, limiting therefore the risk to a negative evolution.

Within the Industrial Solutions product line, ENGIE EPS Group is only targeting markets with existing enabling regulation. However, a change in regulation is a key risk here because it compounds with the fact that often Industrial Solutions systems are used a “multi-revenue stream assets”, in other words exposed to more than one set of enabling regulations.

The regulatory risk is particularly acute in the e-Mobility product line, given the innovative nature of the segment within which it operates (i.e. the fast-evolving Electric Vehicle sector). ENGIE EPS Group might develop products or systems which either fail to meet newly issues regulation or for which enabling regulation is delayed or not passed at all. A specific regulatory risk could be identified with the easyWallbox product, patented and produced by ENGIE EPS Group, due to a fragmented and wide regulation to which it is exposed. Although the easyWallbox is fully compliant with the

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International Electrotechnical Commission - IEC product standards - concerning safety, electromagnetic compatibility, functional aspect, etc. - the product will be distributed in nineteen (19) different countries (some no-EU countries as Switzerland and UK), each one with additional national and specific internal regulation (as installation standards, fire fighters circulars, decrees, grid codes, etc.) whose provisions could impact on easyWallbox product. This may entail a risk for ENGIE EPS Group in terms of non-full compliance with all relevant countries’ regulations and product liability.

The materialization of any of the risks within this section could have material negative financial consequences on ENGIE EPS Group as well as impact negatively its ability to successfully implement its Long Term Strategic Plan.

3.2 Risks related to the activities of the ENGIE EPS Group

3.2.1 Risk associated with key suppliers

The ENGIE EPS Group relies heavily on certain key suppliers for its product offering. In particular key suppliers are related to batteries, easyWallbox subcontractors, containerization service providers and power assembly manufacturers.

With regards to batteries, the most significant component is storage system, while the number of potential suppliers and alternative products are available, for large scale energy storage projects, ENGIE EPS Group would prefer to sign strategic supply arrangement and/or pre-select one specific battery supplier. ENGIE EPS Group would aim at obtaining firm commitments on volumes, delivery time(s) and prices. However, it is highly unlikely that a major supplier commits to underwrite exclusive supply conditions, especially before a tender is awarded or a final offer is signed between ENGIE EPS and the final customer. Furthermore, even in the event of obtaining firm commitments from the supplier(s), ENGIE EPS Group remains however exposed to the risk of the chosen supplier(s) not honouring such commitments.

With respect to the easyWallbox, ENGIE EPS Group will subcontract the main mass production processes, adding new key suppliers’ risks. The financial or operational failure of one or more suppliers identified to produce easyWallbox, without an alternative solution, could pose a major risk for this product continuity.

Due to the fast-paced growth, the amount of containers to be realized could dramatically increase due to Giga Storage tender that could eventually be awarded. ENGIE EPS Group will need to quickly increase the number of providers for containerization as well as the level of service requested.

Finally, the power assembly manufacturer is another critical supplier for power converters, which pose specific risks. The design and the certification of the power converters are heavily dependent of the Insulated Gate Bipolar Transistor (IGBT), and so by the power assembly chosen. Therefore, the closure of the supplier’s production of power assembly, wouldn’t mean only the need to find a high quality alternative but also the re-design, re-engineering and re-certification of all the power converters produced by the ENGIE EPS Group. The only way to reduce this risk is to prototype and certify a twin-power converter with a custom power assembly provided by another supplier, but, considering the high cost and the time required for this activity, it should be implemented only above a certain number of power converters to be produced.

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The following table shows the amount of purchases from the 5 largest suppliers of the ENGIE EPS Group in 2019 and the percentage that this amount represents in relation to the total purchases in 2019. It is worth to note that notwithstanding the percentage on total purchases represented by “Supplier 1” this is a supplier of commodities and the risk of dependence is considered limited.

Main 5 suppliers

% on purchases

Supplier 1 66%

Supplier 2 8%

Supplier 3 5%

Supplier 4 2%

Supplier 5 2%

The materialization of risks described in this section could materially affect the ability of ENGIE EPS Group to successfully implement its Long Term Strategic Plan, including financial targets therein as well as result in serious reputational damage.

3.2.2 Risk related to human resources

The ENGIE EPS Group is undergoing a period of fast paced growth, which could risk stretching its human resources in critical operational areas.

The most immediate risk areas are currently engineering and project management. Additionally, certain support functions are likely to experience the same overstretching of resources, mainly: the procurement, legal and human resources departments. The risk of overstretching could in turn result in lowered quality and/or exposing ENGIE EPS’ processes to human errors. In addition, the risk of overstretching its resources in key areas might result in missing out on business opportunities.

Going forward, if the growth path also materializes in material growth of order Intake, the same overstretching risk would impact the production department. This would result in two main risks:

i. delays in production, thus missing delivery dates or commitments; and

ii. insufficient quality control, which could in turn result in defective products.

Both the above described risks would result in additional costs for the ENGIE EPS Group, which would be material, especially in the case of protracted delays (which in most contracts would give the customer the right to terminate the contract and/or seek damages from the ENGIE EPS Group) and serious quality issues (which in most contracts would require the ENGIE EPS Group to repair the defective products at its cost).

The above-mentioned fast paced growth is also likely to put stress on the existing personnel. When coupled with the relatively young average age the existing personnel and the fact that energy storage is a nascent growing market could result in a risk of ENGIE EPS Group loosing key people. This risk is compounded by the lack of a deep pool of energy storage specific competences.

In addition, ENGIE EPS Group’s success depends also on the performance and expertise of its top managers and its key scientific and industrial personnel, and in

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particular on the Chief Executive Officer of the ENGIE EPS Group, Carlalberto Guglielminotti. The materialization of the risks related to the dependence on ENGIE outlined in Section 3.2.5, and to the “indirect” participation to tenders described in Section 3.3.1, coupled with the substantial ineffectiveness of the Incentive Plan described in Section 7.4.8, could impact retention and result in a risk for ENGIE EPS Group of losing its top management.

The materialization of any of the risks described in this section could materially affect the ability of ENGIE EPS Group to successfully implement its Long Term Strategic Plan, including financial targets therein, as well as result in serious reputational damage.

3.2.3 Risks related to the development and sales and e-Mobility equipment

In 2019, the ENGIE EPS Group secured the first contracts for the sale of EV charging equipment.

The most important of the e-Mobility contracts is the easyWallbox whose operational launch was announced on 26 February 2020, and for which a supply agreement with FCA is being currently finalized pursuant to a binding letter of award received on 20 December 2019 (please also refer to 7.3 of this Universal Registration Document).

The easyWallbox will be the first mass-produced product for ENGIE EPS and entail significant investments and significant outsourcing arrangements to be put in place by the ENGIE EPS Group. In this context, ENGIE EPS has set up dedicated teams, including the recruitment of specialized personnel and selected reputable external partners to which it outsourced the production process and has mandated an internationally reputable product certification specialist to assist ENGIE EPS and its partners in every step of the industrialization process.

The risk involved are twofold:

• one the one hand, there is a risk relating to the timely and on budget industrialization and delivery of this product, in particular to the extent the ENGIE EPS Group relies on third parties’ subcontractors. Any delays could entail penalties to be paid to FCA or to other customers or commercial failure of the product

• on the other hand, since the agreement with FCA has not been finalized yet and in any case, it only includes a minimum volume commitments from FCA, there is a risk that ENGIE EPS Group incurs significant capex and opex with little sales.

Additionally, as with all newly launched products, there is a higher risk of defective products, which could result in extra costs for ENGIE EPS (e.g. replacement, remedial actions, potential law suits for damages, etc.) or commercial failure.

The materialization of any of the risks within this section could have negative (including material) financial consequences on ENGIE EPS Group as well as result in serious reputational damage.

3.2.4 Risks related to industrial operations

ENGIE EPS Group has two manufacturing plants, one in Cosio Valtellino and the other in Rivoli. The Rivoli Plant is mainly dedicated to the design, prototyping,

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assembly and testing of hydrogen storage solutions, which is subject to the high risk of explosion of hydrogen.

The battery energy storage industrial operations and production in Cosio Valtellino carry specific safety risks, mainly for employees involved with such operations and production, but also for the final users.

The main risks are:

i. Electrocution. Applicable both within ENGIE EPS Group facilities (in particular on test benches) and on site, when working on installations.

ii. Fire and/or explosion of ENGIE EPS Group products and systems, caused by batteries or hydrogen, both installed and commissioned on site or under test in Company’s premises.

iii. Chemical risk due to leakage of process fluids, such as the electrolyte.

The materialization of any of the risks within this section could have material negative financial consequences on ENGIE EPS Group as well as result in serious reputational damage.

3.2.5 Risks related to the dependence on ENGIE (through its subsidiary GDF International), majority shareholder of the Company

As of the date of this Universal Registration Document, ENGIE (through its subsidiary GDF International) holds 60.5% of the Company's share capital and voting rights. Further, out of the ten members of the Board of Directors, six (including the Chairman) are employees of the ENGIE Group.

ENGIE could have a significant influence on the ENGIE EPS Group's strategic decisions and, conversely, ENGIE EPS is vulnerable to changes in the ENGIE Group’s strategic orientation, procurement policies and financial policies.

During ordinary and extraordinary shareholder’s meetings, GDF International may adopt and/or reject all resolutions submitted to the shareholders of the Company for approval, including the nomination of members of the Board of Directors, the approval of the annual accounts and the distribution of dividends and the authorization to carry out capital increases or other issues of securities, mergers or contributions or any other decision requiring the approval of the shareholders of the Company under the conditions provided for by law. In these situations, ENGIE’s interest may not be always aligned with that of the other, minority, shareholders, who would therefore, in such a situation, have limited opportunities to make their views prevail.

Furthermore, the ENGIE group is both a client and a business partner and provider for the ENGIE EPS Group. The current Backlog includes 21% of projects for which ENGIE EPS will deliver for ENGIE group companies. In the Pipeline, this part amounts to 94%. In these situations, ENGIE group companies will contract the ENGIE EPS Group’s services and products, the final client being either a government owned or private “off-taker”. In other situations, the ENGIE EPS Group will directly contract with a third-party client, and subcontract certain execution activities to ENGIE group entities. The ENGIE EPS Group is therefore highly dependent on contractual terms negotiated with the ENGIE group.

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Indeed, as communicated to the market in the press release issued on 19 March 2020 and as described in paragraphs 7.3 and 10.3, it has to be taken into consideration that the successful implementation of the Long Term Strategic Plan is significantly predicated upon (i) ENGIE EPS Group and ENGIE prioritizing efforts and resource allocation on the markets where storage is most promising, e.g. with favourable regulation and already announced tenders for which both groups have a competitive hedge, (ii) ENGIE supporting ENGIE EPS Group in projects that make sense for both companies, and (iii) both partners being successful in winning and executing projects.

Within its Long Term Strategic Plan, ENGIE EPS Group has reiterated its reliance on collaboration with various ENGIE entities. First of all, ENGIE EPS Group has decided to focus its efforts on geographies and markets where not only storage is most promising (e.g. with favourable regulation and already announced tenders) but also where ENGIE has the ability to support the ENGIE EPS Group efforts. That means that for Giga Storage ENGIE EPS Group is concentrating its efforts at participating in tenders for projects through the participation of ENGIE. Additionally, for solar-plus-storage projects ENGIE EPS Group intends to work predominantly as a subcontractor to ENGIE Solar.

In Giga Storage ENGIE EPS Group is therefore exposed to a number of aspects of this risk factor:

- the relevant local ENGIE entity might decide not to participate in a tender. This risk is exacerbated by the lack of centrally imposed targets or specific capital allocation for storage;

- the relevant local ENGIE entity might chose not to work with ENGIE EPS Group. This risk is exacerbated by the strongly decentralized organization of ENGIE and its consequences are exacerbated by the fact that it is highly unlikely that a competitor of ENGIE would even select ENGIE EPS Group to compete against ENGIE;

- the relevant local ENGIE entity might not obtain approval from ENGIE management to pursue the selected contractual structure due to overexposure to the project (both as equity sponsor and EPC contractor or subcontractor). This risk materialized recently when a local ENGIE entity did not obtain approval by ENGIE management to utilize ENGIE Solar and ENGIE EPS Group respectively as EPC contractor and storage subcontractor for a yet to be launched solar-plus-storage tender;

- ENGIE management might not agree to support financially ENGIE EPS Group for a large sized project (working capital, bonding requirements, parent company guarantees for performance);

- the relevant local ENGIE entity might simply not be competitive. This risk recently materialized when ENGIE was not successful in a storage tender in its home market of France.

In Industrial Solutions, ENGIE EPS Group is developing opportunities which are not fully nor predominantly reliant on ENGIE support. ENGIE EPS Group intends to exploit ENGIE’s relationships with selected customers, while developing the majority of its opportunities in this product line independently from ENGIE.

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In the e-Mobility product line, ENGIE EPS Group has relied upon ENGIE support and structure to foster its pre-existing relationship with the FCA Group, its largest target customer in this product line. The collaboration has been mutually beneficial resulting in June 2019 in ENGIE being awarded by FCA Group the electrification of dealerships and B2C customers in 14 countries in Europe. ENGIE EPS Group has been selected as B2C delivery entity in 9 out of the 14 countries and thanks the participation in the project since inception and to its pre-dating technical collaboration with FCA Group. However, ENGIE EPS Group has its most important ambitions on the B2B segment yet to be awarded. However, while the FCA Group relationship and opportunity represents a very high priority for ENGIE EPS Group, this might not be necessarily the case for ENGIE, given the relatively sizes of the two.

A more direct aspect of this risk factor in the e-Mobility product line is the fact that ENGIE owns 100% of EVBOX, a company registered under the laws of The Netherlands, having its registered seat at Fred. Roeskestraat 115, 1076 EE Amsterdam, registered at the Dutch Chamber of Commerce under number 32165082., fully dedicated to production and commercialization of EV charging stations. While ENGIE EPS Group does not intend to enter the market of mass produced, standardized charging stations, it does intend to propose the development of special charging stations or products (like the easyWallbox) which could be competing with EVBOX’s products. In this respect, ENGIE EPS Group faces the risk of not being fully supported by ENGIE in the development of new e-Mobility products.

The materialization of any of the risks within this section could have material negative financial consequences on ENGIE EPS Group as well as result in serious reputational damage.

3.3 Financial Risks

3.3.1 Risk related to the potential volatility of ENGIE EPS’s financial performance linked to its “indirect” success in large tenders

As described in paragraph 3.2.5 above, the current Pipeline is dominated by Giga Storage product line opportunities (94% of the €686m reported Pipeline). As typical for utility-scale storage and solar-plus-storage applications, these opportunities are approached through structured public tender processes, in which ENGIE EPS Group participates only indirectly either as an EPC contractor to the bidding sponsor(s) or as storage solution subcontractor. Currently, in all cases the bidding sponsor is either ENGIE or a consortium including ENGIE. The Giga Storage Pipeline is comprised of a relatively small number of projects. Winning or losing any of the projects in such Pipeline would determine large volatility in ENGIE EPS Group’s performance.

In addition to the risk of losing projects at the tendering phase, pursuing Giga Storage projects means that ENGIE EPS Group is exposed to material volatility in the time that it might take for opportunities to develop from Pipeline to Backlog and eventually to revenues and gross margins. Finally, even once projects are secured (and therefore included in ENGIE EPS Group’s Backlog) material risks remain to the timing of delivery and even overarching risk of revenues not materializing. This is due to the nature of the Giga Storage projects which are large and complex infrastructure projects for which the tendering processes are lengthy, subject to several approval stages and the ability of various stakeholders to challenge them. The permitting and

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structuring of these projects is also complex, often involving project financing adding another layer of risk.

In 2019 ENGIE EPS Group experienced certain instances of the above-mentioned risks partly materializing and their brief description is of uttermost importance to appreciate the nature of this risk factor:

- Palau / Armonia: in 2018 ENGIE EPS Group was awarded a PPA by the Republic of Palau’s utility (“PPUC”) for the so-called “Armonia” project, promptly communicated to the market. Later that year, PPUC and the Government of Palau failed to obtain ratification of the PPA in the Senate. In early 2019 PPUC decided to re-tender the project and to date it has not yet been awarded. Note however that the Armonia project was never included in a Backlog communicated to the market;

- Sol de Insurgentes: ENGIE EPS Group’s first solar-plus-storage project. While the project was first secured by ENGIE as a solar only project and ENGIE EPS Group later started its involvement in the project as a storage supplier only, in early 2019 ENGIE EPS Group had matured ambitions about taking over the entire EPC scope and accordingly included the full scope of the project within the Backlog communicated to the market in March 20191. The final negotiations led to ENGIE EPS Group securing a contract for the turn-key supply of the power island (photovoltaic power plant plus storage plant) for the project, an important achievement for ENGIE EPS Group, which however led to revised Backlog to be communicated to the market on 21 June 2019;

- Guam: ENGIE EPS Group is the exclusive storage solution provider to the project bid and won by ENGIE. However, the final approval process has been marred by delays due to the Protest proceeding filed by an unsuccessful bidder, as allowed under the local regulations;

- Middle East: in November 2019 ENGIE EPS Group has been selected as storage solution subcontractors in a solar-plus-storage tender whose results were due in January 2020. Subsequently, the tendering authority decided to re-tender the solar portion only;

- France: ENGIE EPS Group was the exclusive storage EPC contractors for a utility-scale storage tender for which ENGIE was the bidding sponsor in December 2019. In February 2020 ENGIE EPS Group was informed that ENGIE had not been successful. Note however that this project was never included in any Pipeline, Backlog or other document communicated to the market.

In addition to the above specific cases, other opportunities have not materialized for ENGIE EPS Group, like the first tender for utility-scale storage in India, where ENGIE did not participate. Others are delayed or not likely to materialize for ENGIE EPS Group (e.g. North Africa).

As and when opportunity pools of Industrial Solutions and e-Mobility product lines mature into Pipeline projects, this risk factor could also apply to these product lines, as in both cases business might be secured by ENGIE EPS Group via participation in structured tenders or procurement processes. However, the Industrial Solutions

1 ENGIE EPS had however advised in the communication that the size of the project for inclusion in Backlog was however subject to final

agreement on the scope.

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product line will unlikely features tenders for very large projects, being rather characterized by many small to medium-sized projects. The e-Mobility product line will also very unlikely be reliant on very large projects. However, given the market structure and ENGIE EPS Group’s strategy of focusing on few key players, it will likely face a concentration risk: a very limited number of tenders or procurement processes for small to medium sized opportunity.

The materialization of risks described in this section especially with respect to Giga Storage product line could materially affect the ability of ENGIE EPS Group to successfully implement its Long Term Strategic Plan, including financial targets therein and is likely to determine significant volatility in financial results as well as in Backlog.

3.3.2 Risks associated with the euro-US dollar exchange rate

The ENGIE EPS Group expects to be increasingly exposed to the euro-US dollar exchange rate risk. The Consolidated Financial Statements of ENGIE EPS are prepared in Euros and, historically, the ENGIE EPS Group has conducted its business in Euros. However, a significant part of the ENGIE EPS Group’s business in 2019 was conducted in US dollar (64% of total revenues). In the future, the ENGIE EPS Group is likely to sign contracts whose main currency is the US dollar, and which might represent a significant part of its business. Also, a significant part of the ENGIE EPS Group’s purchases (61% on 2019) are made in US dollar (e.g. batteries). ENGIE EPS Group considers that this risk will increase as it expands internationally.

Therefore, the ENGIE EPS Group is exposed to the euro-US dollar exchange rate, conversion and transaction cost risks. The risk associated with currency fluctuations may materialise during the conversion into Euros of the value of assets and liabilities not denominated in Euros. To the extent that the exchange rates of these currencies are exposed to fluctuations, they are likely to affect the Consolidated Financial Statements of ENGIE EPS Group, which could also have a significant effect on ENGIE EPS Group’s financial position and its results, as represented in the ENGIE EPS Group’s accounts. The risk related to foreign exchange rate variations may occur due to the difference in exchange rates between the closing date of the commercial transaction and the date of settlement.

Currently, ENGIE EPS Group’s exposure to foreign currency risk is not financially hedged and the finance department monitors the foreign currency risk and manages it mainly through commercial and contractual arrangements.

In 2019, the ENGIE EPS Group registered costs for a total amount of $13,054 k corresponding to a total amount of €11,763 k and revenues for a total amount of $13.796 k corresponding to a total amount of €12,669 k. As specified in the previous paragraph, those amounts are significant compared to the total costs and revenues of the ENGIE EPS Group in 2019 (61% and 64% respectively).

3.3.3 Liquidity risk

ENGIE EPS Group’s capacity to obtain additional financings depends on a certain number of factors, in particular its operational performance and financial situation, the market conditions and other factors that are not with the control of the ENGIE EPS

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Group. Such factors can also make the financing’s terms and conditions uninteresting for ENGIE EPS Group. It might not be able to raise additional funds when needed and, consequently, its capacity to run its business as planned, to develop it and to progress may be affected.

Since its inception in 2005 (and this includes its predecessor company), ENGIE EPS has been a loss-making company. The revenue stream of the past three years did not allow the ENGIE EPS Group to finance its own cash needs and shareholders’ support has been material to finance its activities. Furthermore, the ENGIE EPS Group recorded a negative EBITDA of €5.7 million and a net loss of €14.6 million in 2019 and is not expected to be earning-positive in the short term. Further, and as indicated in the table below, as at 31 December 2019, ENGIE EPS Group had €14.5 million of net financial debt, of which €1.3 million was current and €13.2 million was non-current (94% of the long term debt having 4 year maturity, please also refer to paragraph 8.2 of this Registration Document). This debt is also subject to certain covenants (see note 4.28 of the Consolidated Financial Statements of the ENGIE EPS Group).

This means that ENGIE EPS will be very limited in its capacity to obtain debt financing, including to refinance its existing debt, even with the support of the ENGIE group, which itself will not necessarily be always forthcoming.

Furthermore, particular attention as to be paid to liquidity risk related to the impact of COVID-19 on ENGIE EPS Group cash generation and preservation. For a detailed description of this risk please refer to paragraph 3.4.

The materialization of risks described in this section could materially affect the ability of ENGIE EPS Group to successfully implement its Long Term Strategic Plan, including financial targets therein and is likely to determine the inability to sustain the working capital needs.

3.3.4 Credit and/or counterparty risks

ENGIE EPS is normally exposed to customer credit risk which can be at times concentrated on few customers given the large size of purchase orders or contracts. The maximum exposure to credit risk is represented by the carrying amounts of trade receivable in the Consolidated Financial Statements of the ENGIE EPS Group (approximately €19.1 million as at 31 December 2019). For certain contracts ENGIE EPS Group has extended “supplier credit” to the customer, thus increasing the credit or counterparty risks. The total amount of supplier credit as at 31 December 2019 was €5.4 million including work in progress. The credit risk is monitored and managed by the finance department, including through the inclusion of safeguards in the major contracts (mainly advanced payments).

Out of the total trade receivables as at 31 December 2019, €12.1 million were due by customers within the ENGIE Group.

NET FINANCIAL POSITION(amounts in Euro) 31/12/2019

Cash and cash equivalent 6,431,376

Cash at banks and petty cash 6,431,376

Net financial debts (14,532,179)

Current financial liabilities (1,277,274)

Non current financial liabilities (13,254,905)

NET FINANCIAL POSITION (8,100,803)

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The ENGIE EPS Group does not hold counterparty insurance.

The materialization of risks described in this section could materially affect the ability of ENGIE EPS Group to successfully generate positive cash flows from operative activities.

3.4 Risks related to the COVID-19 outbreak and related potential negative impact on cash

The COVID-19 outbreak is heavily impacting both the industrial operations of the ENGIE EPS Group and its short-term business prospects. ENGIE EPS Group’s operations and the majority of the supply chain are based in Italy, the country currently at the epicenter of the European outbreak. The Italian government imposed the most drastic steps yet by any country except China to contain surging numbers of COVID-19 cases, placing on 25 February 2020 the entire region of Lombardy (where ENGIE EPS Group has two industrial premises) under quarantine and then, on 8 March 2020, more than a dozen other provinces in neighbouring regions as well. Restrictions were extended to the entire country on March 9, and then turned into a lockdown. In addition, travel restrictions all over the world are limiting the ability to ENGIE EPS Group to materialize its project development effort, particularly in large tender processes.

Following the publication of the further measures by the Italian Government with effect from 23 March 2020 for the containment of the COVID-19 outbreak and in order to widely lockdown industrial and production activities in Italy, ENGIE EPS Group is allowed to continue its activities as it is deemed operating in sectors considered as “essential industries” such as Electrical Systems and Research & Development.

Since the first confinement measures in Italy on 24 February, the Company’s industrial premises have remained fully operational, but have limited their activities to the sole projects that are essential to ensure business continuity. ENGIE EPS Group is supporting its main Italian suppliers so that they can qualify as functional to the continuity of its industrial supply chain, in accordance with the latest regulations, in order to minimize potential interruptions.

The following table summarizes the list of projects or activities that have been directly impacted by COVID-19 at the time of writing, the impact as currently assessed, the further risks and the mitigating measures undertaken or to be undertaken by ENGIE EPS Group.

PROJECT OR ACTIVITY DIRECTLY AFFECTED

BY COVID-19

CURRENTLY ASSESSED IMPACT POTENTIAL CONSEQUENCES

Industrial operations

(Italy)

Restrictive measures impose smart-working plan and greatly limit movement of personnel. This has resulted in a generalized slow down or postponement of industrial operations. The impact is however not yet quantifiable in financial terms.

If the restrictions are extended or increased there is a risk of further delays or inefficiencies on all industrial operations.

Supply chain (mainly Italy)

ENGIE EPS Group’s operations and the majority of the supply chain are based in Italy, the country currently at the epicentre of the European outbreak.

There is a risk of further supply chain disruptions, especially after the Italian government decree entered into effectiveness on 23 March 2020 which imposes a temporary stop to all

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Two suppliers with activities based in Lombardy have informed ENGIE EPS Group that their activities are temporarily interrupted. This will cause delays for certain of the Leinì and the V2G car park pilot projects. The financial impact of such delays is not yet quantifiable.

productive activities except for those of “essential industries”.

Remote project (Greece) ENGIE EPS Group’s employees were due to travel to Greece to complete the commissioning of this project related to H2 (identified in 2019 as non-core activity), but they were requested to abstain from travelling by the local contractor due to the risk of COVID-19 contagion. Thereafter, travel restrictions have kicked in further delaying commissioning. The financial impact of such delays is not yet quantifiable

Risk of further delay

Comoros project

(Republic of Comoros)

ENGIE EPS Group’s personnel on site for commissioning of Phase 1 had to be evacuated in emergency before the borders were shut down. Commissioning of the first phase of the project is therefore delayed. The financial impact of such delays is not yet quantifiable

The delays in commissioning of the first phase have a direct impact on the timing of a second phase of the project, which was planned to be completed in 2020. In addition, the COVID-19 crisis adds material risks to the financing process of the second phase, which could lead to further delays of even cancellation of that.

Guam

(USA territory)

A non-successful bidder had filed a Protest with the relevant authorities in Guam as allowed by local regulations. The Protest hearing was due on 25 March 2020 but was cancelled without a new date being set due to COVID-19 cases on the island.

This will result in delays in the project schedule and for this project to enter the backlog. The financial impact of such delays is not yet quantifiable.

First of all, there is a risk of further delays since no date has been set for the hearing. Secondly, ENGIE EPS Group might not be allowed to send witnesses to the hearing, thus advantaging the protesting bidder. Additionally, should an outbreak of COVID-19 erupt on Guam (a relatively small island), this could lead to major delays or even the project being cancelled.

Al Dhafra project (UAE) ENGIE EPS Group is involved in a binding proposal for a solar storage project in the United Arab Emirates (UAE). The tendering authority recently announced the postponement of the bid envelopes opening due to COVID-19. This project is yet to be awarded so the delay would only impact the evolution of the ENGIE EPS Group’s Pipeline.

Risk of further delay

In addition to the above, ENGIE EPS Group foresees COVID-19 impacts on its construction sites worldwide (Italy, Mexico, California and Singapore, over the above-mentioned Comoros and Greece) and on its projects under development (Europe, South Africa, Middle East, US and Pacific Islands). As illustrated by the above-mentioned Al Dhafra project, the COVID-19 pandemic creates a material risk of several development activities being delayed, with a consequential risk to ENGIE

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EPS Group’s ability to convert opportunities from Pipeline to Backlog and from Backlog to revenues.

As the COVID-19 situation continues to unfold, ENGIE EPS Group is not currently in a position to quantify the adverse impact nor the scenarios for its projects under development.

In the next future probable decrease in the workload due to the impact of the latest lockdowns and global restrictions, as well on the overall Italian economic and industrial system, is expected, thus implying a limited visibility on revenues as well as not expected costs and ultimately impacting on cash generation for ENGIE EPS Group. COVID-19 might potentially impact the availability of previously available financial line, challenging working capital requirements. Predictability of cash flows being adversely impacted by the current situation, cash underperformance and possible unexpected funding requests have to be considered. At the same time, due to the impact that COVID-19 will have worldwide, an increasing counterparty risk could be expected, especially on cash collecting. For those reasons, ENGIE EPS implemented all measures of cash preservation mentioned in paragraph 10.4 of the Universal Registration Document.

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4 INFORMATION ABOUT THE ISSUER

4.1 Corporate name of the Company

The Company’s corporate name is ENGIE EPS S.A. and is commercially known as ENGIE EPS.

4.2 Place and registration number of the Company, SIRET number, VAT number and legal entity identifier (‘LEI’)

The Company is registered through the Registry of Commerce and the Companies of Paris under the identification number 808 631 691.

The SIRET number of the Company is 808 631 691 00041. Its NAF/APE code is 7490B.

The Company’s VAT number is FR66808631691.

The Company’s Legal Identify Number (“LEI”) is 969500NWCP1OQ4315C79.

4.3 Date of incorporation and duration of the Company

The Company was founded and registered on 26 December 2014 for a period of 99 years, with the expiration date of 25 December 2113, barring anticipated dissolution or extension.

4.4 Corporate seat of the Company, applicable legislation, address, telephone number and website of the Company

The registered office of the Company is located at:

28, rue de Londres, 75009 Paris, France

Phone : +33 (0)9 70 46 71 35

Email: [email protected]

Website: www.engie-eps.com.

The information on the website does not form part of the prospectus unless that information is incorporated by reference into the prospectus.

The Company has been incorporated under the form of a société anonyme with a Board of Directors governed under French law.


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5 PRESENTATION OF THE ENGIE EPS GROUP

5.1 Introduction

The ENGIE EPS Group operates in the sustainable energy sector, and specializes in storage solutions enabling the transformation of intermittent renewable energy sources into a stable power supply. Specifically, the mission of the ENGIE EPS Group is to foster the energy transition by mastering the intermittency of renewable energy sources. Through cutting-edge storage-based solutions to control the intermittency of renewable sources, ENGIE EPS Group’s technologies allow to power communities with renewable energies on a 24/7 basis, sustainably and affordably.

ENGIE EPS is a technology pioneer in this field: created in 2005 in Torino as a spin-off of the Politecnic University, to date the ENGIE EPS Group has deployed 61 systems worldwide, representing an aggregate installed capacity of 176 MW of power under management and 84 MWh of energy storage capacity (see paragraph 5.3.3 of this Universal Registration Document).

ENGIE EPS Group’s solutions are based on one main flexible technology platform developed over fifteen years of research, development and commercial deployments, suitable for the integration of any energy storage system, any renewable generation source, as well as conventional generators. This platform was named HyESS®.

The HyESS® platform comprises several modular components (see paragraphs 5.3.1 and 5.3.2 of this Universal Registration Document).

5.2 Main updates from previous Registration Document

Up until 2019, ENGIE EPS had described its addressable market as being comprised of two main segments: Microgrids and Grid Support.

In June 2019, ENGIE EPS announced a new strategic focus and during the course of 2019, ENGIE EPS’ management worked on further refining and re-focusing the strategy. This work was finally encapsulated in the Long Term Strategic Plan, which was first presented to the Board of Directors of ENGIE EPS in June 2019 and approved in its final form in December 2019. The key elements of the Long Term Strategic Plan are the following:

- Updated market analysis (see paragraph 5.4 of this Universal Registration Document);

- Updated and re-focused product offering (see paragraph 5.3.2 of this Universal Registration Document);

- Rationalization and new presentation of products (see paragraph 5.3.2 of this Universal Registration Document);

- The removal of hydrogen-based products or solutions from ENGIE EPS’ future product offering (see below and paragraph 5.3.1 of this Universal Registration Document);

- Revisited business models (see below and paragraph 5.5.1 of this Universal Registration Document);

- Revised organization: (see below and paragraph 6.1 of this Universal Registration Document).

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Starting from 2020, the ENGIE EPS Group is presenting its offering in a new way, namely grouping its products within three main lines as follows:

i. Giga Storage: utility-scale storage solutions designed to support the transmission and distribution grids in dealing with increasing penetration of intermittent renewable sources;

ii. Industrial Solutions: distributed storage solutions to address the sustainability, affordability and reliability needs of the industrial and power generation sectors;

iii. e-Mobility: Distributed Solutions to interface the rapidly-growing electric mobility fleets with the wider electrical system, in order to address the recharging needs of the vehicle fleet on one side, and the constraints and flexibility requirements of the grid on the other side.

These Product Lines represent an evolution of the previously presented range of applications, which closely reflect the market evolution (see paragraph 5.4.2 of this Universal Registration Document). The most important aspect of presentation by Product Lines is the intention to simplify communications to existing and potential customers on ENGIE EPS Group’s solutions and value propositions thereof.

Through the Long Term Strategic Plan, the ENGIE EPS Group also reviewed and refined its business models, as summarily described below for each of the three Product Lines.

For the Giga Storage product line, ENGIE EPS Group’s main value proposition to its customer is as a system integrator. ENGIE EPS Group will adopt a disciplined make-or-buy approach to the relevant technology components and it will only propose its own proprietary technology to extent that it represents both technically and economically the best value for its customers.

For standalone utility-scale storage projects the bulk of the value and complexities are managed directly by ENGIE EPS Group up to the “Factory Acceptance Test” milestone. ENGIE EPS Group will therefore offer full turn-key EPC solutions, with the site related activities subcontracted to qualified local contractors on a case by case basis. Here the limiting factor for ENGIE EPS Group’s ability to provide EPC solutions would normally be the absolute size of the project (on rare occasions the complexity of the site itself might also be a limiting factor).

When the storage systems are delivered in combination with utility-scale renewable (mainly solar-plus-storage projects) or conventional power generation plants (e.g. gas fired plants) the ENGIE EPS Group will normally propose itself as turn-key solution provider of the storage component only, i.e. abstain from taking the full EPC contractor role because of either the relative (storage vs. entire project) or absolute size and/or complexities of the combined project. For solar-plus-storage projects ENGIE EPS Group will continue to leverage on the collaboration with ENGIE Solar, with the envisaged standard contractual scheme being: ENGIE Solar as EPC contractor for the entire project and ENGIE EPS Group as turn-key subcontractor for the storage system. ENGIE EPS Group does not however have exclusivity arrangements with ENGIE Solar and is therefore free to work with other EPC contractors.

For the Industrial Solutions product line, ENGIE EPS Group’s main value proposition is combined technology provider and turn-key solution provider (therefore including, when commercially convenient, the EPC business model). Customers for this product

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line normally require highly specialized and customized solutions, which often need to be integrated with other existing assets of the customers. High specialization, customization and integration with existing assets calls naturally for ENGIE EPS Group to rely on its proprietary technology which it can adapt at the hardware, firmware or software lever as required in each case. On rare occasions ENGIE EPS Group would therefore adopt a make-or-buy approach on its key technology components for this product line. Similarly to the utility-scale storage projects, the bulk of the value and complexities are managed directly by ENGIE EPS Group up to the “Factory Acceptance Test” milestone. This warrants ENGIE EPS Group to offer solutions on full turn-key EPC basis. Neither the absolute size nor the complexities of projects within this product line are expected to be a limiting factor for ENGIE EPS Group’s ability to propose a full turn-key EPC solution. However, there could be cases when customers would only request storage solutions on a supply plus commissioning basis, which is another viable delivery model for ENGIE EPS Group.

For the e-Mobility product line, ENGIE EPS Group’s value propositions range from technology provider, to system integrator, to full turn-key solution provider. As a technology provider ENGIE EPS Group works with a selected number of car manufacturers to develop specialized charging systems and products, in collaboration with key suppliers of electrical devices. As a system integrator, ENGIE EPS Group develops bidirectional or other special centralized charging stations for car manufacturers, commercial or industrial customers. For all its charging systems and charging stations ENGIE EPS Group intends to offer installation options to enhance the value proposition to its customers. Leveraging on its extensive power electronics and power management know-how ENGIE EPS Group adopts a disciplined make-or-buy approach when selecting proprietary versus third-party technology. Given the innovative nature of this product line, ENGIE EPS Group could at times deliver its products or system through technology partnership or co-development arrangements.

In all the product lines ENGIE EPS Group offers service and maintenance contracts for its technology and systems, ranging from basic (mainly remote) supervision and maintenance on an annual or multi-annual basis to long-term all-inclusive service agreements.

As iconic references included into the Pipeline and the Project Backlog, as well as early results of the implementation of the Long Term Strategic Plan, it is worth highlighting:

• in the Giga Storage product line, ENGIE EPS Group is shortlisted in two bids worth in aggregate more than €300 million and 1.6 GWh, for projects expected to be online by 2023;

• in the Industrial Solutions product line, ENGIE EPS Group secured its first microgrid in the USA and is well positioned to secure a second project in New Caledonia; and

• in the e-Mobility product line, ENGIE EPS Group secured a framework for a broad European distribution of the easyWallbox, setting the production capacity up to 50,000 units in the next months and the largest V2G pilot project in the world, both announced on 26 February 2020.

The ENGIE EPS Group will no longer pursue Project Development and PPA-based activities as ordinary business models, although it might consider either of them in exceptional circumstances (see also paragraph 5.5.1 of this Universal Registration Document).

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5.3 Principal activities and installed base

5.3.1 Technology and historic product portfolio

The ENGIE EPS Group’s technology platform originated from an extended R&D effort on the integration of energy storage in the design of electrical systems, in order to master the intermittency of renewable energy sources. The platform was decisively tested, and commercially vetted, in the so-called Terna Storage Lab project, a pioneering large-scale deployment of energy storage systems in critical electrical sub-stations promoted by Terna, the Italian TSO. The project, approved by the Italian Ministry of Economic Development (MiSE) in the context of the 2012 Defence Plan, and overseen by the Italian regulatory authority for the energy sector, was designed to enhance the security of the electrical system in the country’s areas with higher penetration of renewable energy sources, by installing approximately 40 MW of energy storage capacity2.

The ENGIE EPS Group played a central role in the Terna project, acting as a system provider in partnership with Toshiba as battery manufacturer, and as a system provider for General Electric. Both partners successfully completed the commissioning and testing of their respective systems in 2016.

The outstanding results of the ENGIE EPS Group’s solutions in this project were published at the Environment and Electrical Engineering (EEEIC), 2015 IEEE 15th International Conference, “Commissioning and testing of the first Lithium– Titanate BESS for the Italian Transmission Grid”3.

The basis of such achievements is the ENGIE EPS Group’s intellectual property, covering its vertically-integrated technology platform and innovations with 83 patents and 83 patents applications in total, of which the ENGIE EPS Group is actively pursuing 28 in different key countries, as well as 597 trade and industrial secrets. It should be noted that the number of patents and trade and industrial secrets has decreased compared to 2018 since the ENGIE EPS Group decided not to renew a number of these as they are not considered commercially relevant (including due to the refocused strategy).

One of the most important patents, named “Conversion and control system for distributed generation”, is the basis of the distinguishing capabilities of the ENGIE EPS Group’s PCS and EMS, able to manage multiple renewable sources, energy storage systems and loads, both in on-grid and off-grid modes. More specifically:

2 Terna Storage Lab project: https://www.terna.it/en/electric-system/system-innovation/pilot-storage-projects 3 The IEEE paper deals with the commissioning and testing by Terna of the 1MW/1MWh Energy Storage System composed by Toshiba

batteries and PCS, controllers, transformer, and SCADA manufactured, containerized and commissioned by the ENGIE EPS Group. The system was commissioned in the Codrongianos substation, both in grid-connected and islanded operation. Test results show that round trip efficiency and power accuracy target values are met and that the BESS can effectively be used for black starting a MV grid. The field tests performed on Terna’s first LTO BESS showed that the target performance values are met or even exceeded. Most significantly the measured round-trip gross efficiency was 89.2%, and the net efficiency (also including auxiliary losses) was 86.5%. These excellent results were possible due to the reduced auxiliary loads power, namely of the HVAC system, thanks to the wide temperature operating range of LTO batteries. The BESS rated energy and power values (1MW/1MWh) have also been verified. Measured PCS power accuracy was about 0.5%, which was in line with the expected measurement error. BESS overload test showed a substantial overload capability of LTO batteries, whereas the PCS power output was limited to 1.3 p.u.; temperature measurements also evidenced that the thermal time constant of the PCS was about 200 s, significantly lower than the one of LTO batteries.

https://www.terna.it/en/electric-system/system-innovation/pilot-storage-projects

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• the PCS are able to operate an automatic and instant transition from maximum power point tracking mode to required power point tracking operation mode with respect to the renewable sources;

• the PCS and EMS are capable of managing multiple configurations including one or more renewable sources, any energy storage systems, the presence of a single local load and/or the interconnection with the grid; and

• the system is able to commute with a seamless transition in less than 20ms from on grid to off-grid operation.

This patent was registered in the context of a broader non-replicability strategy, also encompassing two main trade secrets: the DROOP Virtual Inertia Algorithm at the PCS level and the POOL Algorithm at the EMS level.

Such unique innovations form the basis of HyESS®, the ENGIE EPS Group’s main technology platform, that essentially enables renewable energy generation plants, coupled with HyESS®, to interface with the grid as if they were conventional power plants with a stable, predictable output, ensuring the management of renewables intermittency and the stability of the wider grid or local microgrids. Central to this capability are the provision of Spinning Reserve and full Virtual Inertia, as shown in the charts below4.

4 Yellow outlines the solar intermittency from 300 to 1200W/mq (75 to 300kW). Green shows the RPPT (Requested Power Point Tracking),

i.e. the solar power reduced due to the instant load demand requirement. IEE Paper published by Terna at the 15th Environmental and Electrical engineering Conference.

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Thanks to the DROOP Virtual Inertia Algorithm, the ENGIE EPS Group’s HyESS® technology provides inertia and Spinning Reserve to any grid or microgrid within 125µs like a rotating system, with no recourse to the EMS5.

The chart below provides a visual representation of the ability of the ENGIE EPS Group’s DROOP Virtual Inertia algorithm to react in less than 125µs, and to stabilize a drop in frequency in less than 20ms.

Such a fast reaction, achieving frequency stabilisation in less than 20ms, is particularly important in the Frequency Regulation process. Traditionally, grid stability has been preserved by the rotating masses of conventional power plants, which are synchronized with grid frequency, and react automatically to frequency deviations reducing the gradient of such deviations within the first seconds of a frequency dip. This Frequency Regulation mechanism based on rotating masses and their physical inertia has been the basis of grid stabilization until today.

With increasing penetration of renewable energy sources, the number of conventional power plants and their spinning masses in operation at each point in time is rapidly reducing, raising the challenge of how to replace physical inertia.

The power electronics of traditional battery storage can normally deliver full power within timeframes of 250ms following a frequency event. Thanks to the DROOP Virtual Inertia algorithm, the ENGIE EPS Group’s technology guarantees a 125µs reaction time, with full frequency stabilisation in less than 20ms. Such fast response has already proven the capability of properly-sized storage systems to stabilize island microgrids, where the stable and reliable operation of the microgrid imperatively requires a permanent balance between electricity generation and demand. The same logic, at utility scale, can ensure the stability of the wider grid also in absence of the rotating masses of conventional power plants.

In other terms, one of the biggest technological challenges in the energy transition, the loss of system inertia determined by the increasing penetration of intermittent renewable energy sources, is already addressed by the ENGIE EPS Group’s technology.

5 P-ref value still at “0” before, during and after the grid event.

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With its operational modes, the technology platform of the ENGIE EPS Group, reproduces in a modular and scalable system the exact functioning of a national grid, whereby:

• energy storage systems, through the power conversion technology, guarantee frequency stabilization without the need of the rotating masses of conventional power plants; and

• controllers, thanks to the POOL Algorithm, allocate the provision of Spinning Reserve to the different assets connected to the grid.

The following paragraphs outline the articulation of the HyESS®-based offering of the ENGIE EPS Group in the period covered by the historical financial information in this Universal Registration Document i.e. the 2017-2018-2019 period. Following the approval of the Long Term Strategic Plan, the offering of the ENGIE EPS Group based on the HyESS® technology platform has been profoundly reorganized (see paragraph 5.3.2 of this Universal Registration Document) but the technological building blocks remain essentially the same (but for the Hydrogen Module).

(i) Components of the Balance of System

Since its technology incubation phase, ENGIE EPS has focused its efforts on the system level, developing its Balance of System, i.e. power and control electronics able to manage, at the same time, all kind of storage systems and renewable generation sources, including hydrogen-based energy storage. Thanks to the acquisition of EPS Elvi at the end of 2015, and to the subsequent R&D investment carried out particularly in 2016, the ENGIE EPS Group further enhanced the System Blocks incorporated in HyESS®, in order to enable a real smart distributed power generation, suitable to operate both on-grid and off-grid. The resulting System Blocks are summarized below:

• PCS, i.e. bi-directional inverters with a scalable power range of 20, 35, 70, 125, 250, and 900 kVA, which, albeit in evolving configurations, remain the core technology of the HyESS® and the basis of the new PowerHouse System Block (see paragraph 5.3.2 of this Universal Registration Document).

• BMS, which monitors and governs any battery technology, including those integrated into HyESS®, now part of the EnergyHouse System Block (see paragraph 5.3.2 of this Universal Registration Document).

• Master controller, which is the hardware and software technology that manages the energy storage system, now part of the Control Technology Family (see paragraph 5.3.2 of this Universal Registration Document).

• Microgrid controller, a device particularly important in microgrids in order to remotely control and manage the whole combination of a renewable power plant with HyESS®, now part of the Control Technology Family (see paragraph 5.3.2 of this Universal Registration Document).

• EMS, which optimizes the energy flows in any on and off-grid condition, now part of the Control Technology Family (see paragraph 5.3.2 of this Universal Registration Document).

• Hydrogen Module, or ElectroSelfTM, which complements the battery storage to provide extended autonomy to microgrids and enabling in some instances

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a full diesel replacement. Following the approval of the Long Term Strategic Plan, and the recognition that the industry-wide cost digression curve of the hydrogen technology has not resulted yet in widespread commercial adoption, the ENGIE EPS Group has decided to discontinue the development and commercial promotion of the Hydrogen Module and focus research & development, commercial, engineering and manufacturing resources on battery-based storage solutions.

All the System Blocks listed above have been tested and certified by internationally recognized labs, and are in conformity with the applicable standards for electrical safety and grid code compliance:

• IEC 62109-1 and IEC 62109-2;

• IEC62477-1;

• CEI 0-21 and CEI 0-16, including all. N-bis.

(ii) PCS

The key link of any energy storage system with the surrounding environment, in both on-grid and off-grid contexts, is the bi-directional PCS, which interfaces the renewable source and/or the energy storage system with the grid, and governs the power flow between generators, users’ load, the grid and the storage systems.

New PCS must comply with the most recent standards (e.g. in Italy CEI 021 e CEI 016, in Germany VDE ARN 4105), which set more complex requirements on the electrical interfaces with the grid.

The inverters that are eligible for connection to the national grid must have excellent regulation capabilities, in order to comply with the grid codes imposed by DSO and TSO.

The inverters developed by the ENGIE EPS Group were the first to be tested and issued the conformity certificate to the new CEI 016 All. N-bis, regulation mandatory from 1 January 2016, which sets out the stricter requirements for the connection to the Italian network of battery storage systems and are expected to be the basis of future International Electrotechnical Commission (“IEC”) regulations.

(iii) Microgrids and Virtual inertia PCS

Microgrids can be seen as small power systems, composed of one or more smart distributed power generation units that can be operated independently from the main grid (public distribution network), where present. Microgrids include user loads and energy storage systems as well.

Essentially, microgrids are a smaller version of the large power grid, which is a collection of generation sources and loads kept in balance by a control system. Microgrids have the added feature of being able to operate in parallel with the main grid or in isolation from it. More specifically a microgrid can:

• be connected to the main grid (or bulk power system) and exchange active (P) and reactive (Q) power with it;

• work off-grid, either on a temporary basis (due to a fault on the main grid), or permanently.

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In an islanded microgrid the stability of frequency and voltage must be assured with regulation techniques similar to those applied to the main grid.

The PCS integrated in any HyESS® solution have an unique feature compared to traditional inverters: assuring microgrid power regulation techniques identical to those applied to the main grid. In other terms, the ENGIE EPS Group’s PCS ensure Virtual Inertia, Spinning Reserve and power quality to microgrids similarly to the logic implemented to stabilize the main grid. This feature, the DROOP Virtual Inertia Algorithm, is the output of years of applied research arising from the system engineers of the ENGIE EPS Group.

(iv) Hydrogen Module

The Hydrogen Module was, until 2019, an optional feature of microgrids developed by the ENGIE EPS Group.

Following the approval of the Long Term Strategic Plan, the ENGIE EPS Group has decided to discontinue the development and commercial promotion of the Hydrogen Module, that was described in detail in the 2018 Registration Document.

5.3.2 New technology portfolio and development status

Within the context of a fast evolving market for energy storage, during 2019 the ENGIE EPS Group has undertaken a profound re-articulation of its product offering and the underlying technology portfolio. The first step of such re-articulation was the creation of three Product Lines that would streamline the communication with existing and potential customers: Giga Storage, Industrial Solutions and e-Mobility.

Giga Storage: designed to best position the ENGIE EPS Group for the ongoing affirmation of utility-scale energy storage systems, both in combination with PV plants and on a stand-alone basis. This Product Line comprises utility-scale containerized energy storage systems, which directly or indirectly enable and control a greater penetration of renewable energy into the grid. The Product Line leverages the ENGIE EPS Group’s technology edge, superior engineering, strategic partnerships and global procurement, in order to tailor the most competitive solutions to address customers' needs.

It includes two sub-lines:

• Solar-plus-storage: large-scale energy storage systems transforming the intermittent generation of solar farms into a fully-dispatchable power supply. PV Systems are coupled with energy storage systems, designed for energy time shifting (energy intensive) or ramp management and capacity firming (power intensive). The primary source and storage capacity can be DC-coupled to maximize efficiency, or AC-coupled to increase design and operational flexibility.

• Utilities-scale storage: large-scale, modular, containerized energy storage systems located at sub-stations or stand-alone storage farms, providing the grid with frequency and voltage regulation, load shifting and peak shaving services, as well as capacity assurance and black-start capabilities. In order to match system size and envisaged applications, the solutions can be high-density (large power plants) or standard-density (medium power plants).

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Industrial Solutions: designed to serve the new and growing needs of the industrial and conventional energy sectors brought about by the massive penetration of renewable energy. The Product Line builds on the ENGIE EPS Group’s best-in-class technology, superior solution engineering, and strategic procurement, to secure, stabilize and/or green-up the customers’ power supply.


• Industrial microgrids: tailored power solutions combining distributed renewable energy sources and energy storage capacity to supplement or replace grid supply for a single user or a community of users.

• Industrial energy storage systems: addressing one or more of the industrial customers’ needs: (i) eliminate disturbances affecting users’ energy supply, such as supply interruptions, voltage fluctuations and harmonic distortions; (ii) extract value out of Demand Response or peak-shaving schemes; (iii) optimize thermal power plants’ operations, increasing plant flexibility and fast response capabilities to grid demands.

e-Mobility: comprises innovative solutions and technologies for EV charging and V2G, addressed to business and residential customers.


• Charging stations: advanced centralized charging stations transforming the batteries of parked car fleets into strategic, revenue-generating flexibility hubs for the grid.

• Special residential charging systems: hang-and-feed systems to charge EVs wherever needed, the only requirement being a switch. The easyWallbox guarantees grid stability and prevents the overloads and blackouts that usually occur when connecting an EV to a domestic plug.

The technology portfolio has been re-articulated into four technology families: (i) Store; (ii) Convert&Connect; (iii) Move; (iv) Control, offering a comprehensive range of System Blocks to package world-class large-scale energy storage systems, industrial and electric mobility solutions, featuring advanced EMS architectures based on machine learning algorithms and big data processing.

(i) Store: battery storage

• EnergyHouse is a range of containerized housings fulfilling world-class density, operational, safety and affordability requirements. The housings are easily transportable and can host different battery technologies to address power and energy needs. Versions based on second-life batteries coming from automotive applications are also available. Other than batteries, the EnergyHouse hosts safety and automation systems, as well as the ENGIE EPS Group’s sophisticated EMS. The EnergyHouse has been designed for both energy intensive applications and for power intensive applications.

(ii) Convert&Connect: power conversation and grid interconnection

• PowerHouse is a cutting-edge containerized offering for PCS, including automation and controls. Each PowerHouse embeds advanced features such as on-grid and off-grid operation with seamless transition management, Virtual Inertia and power quality capabilities. Our control system also allows the

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integration of third-party inverters for specific markets or applications. The PowerHouse System Block can be delivered in different versions, for either centralized and Distributed Solutions, microgrids, or utility-scale power plants.

• EVHouse is a containerized system specifically designed for large EVs parking areas and fleets. Through V2G systems, the batteries of EVs can exchange energy with the national grid upon demand, providing a decisive contribution to grid flexibility. EVHouse, our V2G systems, transform EV fleets into MW-scale storage systems ready to supply grid services. In addition, the system hosts A.I. algorithms to predict EV availability and operating parameters, as well as machine learning algorithms to optimize system operation.

• ComHouse is a range of containerized systems capable of managing any kind of grid interconnection, irrespective of grid frequency and voltage. The versions have been designed to host medium or low voltage grid interconnection gear, distribution feeders, protections, metering, and plant auxiliary supply system.

(iii) Move: smart charging systems for electric vehicles

The ENGIE EPS Group designs and markets pioneering systems to provide the best charging experience for EV users. This Technology Family includes the easyWallbox.

The easyWallBox is a residential charging system for EVs, featuring Dynamic Power Management (a controlled charging mode not to exceed the home power limit). The device is an AC charger that can be installed both with a temporary connection to the electric grid (Mode 2) and with a permanent connection to the electric grid (Mode 3). When permanently connected to the electric grid, the device can sustain a charging power up to 7.4kW. In the temporary configuration, the maximum power absorption is limited according to applicable regulations. The easyWallBox contains a control board that is in charge of enforcing the proper electrical operation of the device. The app developed according to these specifications is intended to serve as an enhanced HMI, in order to enable controlling and configuring the device over Bluetooth, as well as some basic data and status visualizations.

(iv) Control: energy management and remote monitoring

The ENGIE EPS Group developed a suite of cutting-edge complementary control systems:

• EMS is a portfolio of smart control cabinets specifically designed for utility-scale BESS. It handles the optimization, real-time control, monitoring, safe operation, automation and high resilience of a storage system or a microgrid. Designed via cutting-edge system engineering, it can coordinate operations of multiple energy storage systems, generation plants and load, regardless of network type and system size, thanks to a ground-breaking modular hardware and software architecture. All its hardware and software components are designed to best fit all advanced functions of the specific EMS version and can be complemented with an optional network of cyber-sensors designed to monitor critical parameters of the system under management, aimed to predict ageing and prevent failures;

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• K-WIZE is an end-to-end data solution for remote plant and asset monitoring. It acquires, collects, transfers, and post-processes data coming from connected plants via cybersecure communication channels. A web-based supervision dashboard provides insight on plants and assets in the portfolio for performance and revenue monitoring. In addition, it allows the management of all the systems, providing near real time data visualisation and schedulable performance reporting. Advanced analytics, along with robust data handling techniques, offer an in-depth analysis of the installations and their operation;

• e-WA is a software application for smartphones, turning e-Mobility technologies into powerful smart devices, providing an intuitive user interface and data visualization, and enabling easy servicing.

5.3.3 Installed base

The historical information (2017-2018-2019) presented below is based on the two segments through which ENGIE EPS addressed its market up to the adoption of the Long Term Strategic Plan, i.e. :

• Microgrids: off-grid microgrids and utility-scale solar plus storage,

• Grid Support: utility-scale storage, thermal power plan retrofitting, power quality and vehicle-to-the-grid.

As of the date of this Universal Registration Document, the ENGIE EPS Group has deployed 61 systems worldwide, representing an aggregate installed capacity of 176 MW of power under management and 84 MWh of energy storage capacity. The following chart breaks-down by geography the aggregated installed nominal power and energy storage capacity of the systems installed to date by the ENGIE EPS Group.

The ENGIE EPS Group has under short-term commissioning:

• the first phase of a 22.1 MW microgrid in the Comoros Islands, powering approximately 350,000 people;

• a 2.9 MW microgrid in Singapore (Semakau) in collaboration with ENGIE;

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• a 30.2 MW PV + storage system in Mexico (Sol de Insurgentes) in collaboration with ENGIE;

• a 7.2 MW utility-scale storage system in Italy (Leinì) being installed as a retrofit to an existing ENGIE conventional power station.

In aggregate over 500,000 people are powered by renewables supported by ENGIE EPS Group’s solutions every day.

In 2017, revenues amounted to €9.9 million with a total Order Intake of €16.6 million. In 2018, revenues amounted to €15.5 million with a total Order Intake of €10.9 million. In 2019 revenues amounted to €19.7 million with a total Order Intake of €30.3 million (see paragraphs 7.4.1 and 7.4.2).

The breakdown of the cumulative installed base is summarised in the following tables, representing for sake of clarity in a breakdown:

• the total additional installed base of the ENGIE EPS Group up to 2017 (including plants under commissioning);

• the total additional installed base of the ENGIE EPS Group in 2018 only (including plants under commissioning), therefore from 1 January 2018 to 31 December 2018;

• the total additional installed base of the ENGIE EPS Group in 2019 only (including plants under commissioning), therefore from 1 January 2019 to 31 December 2019.

In reading the tables above, the following definitions should be considered:

(1) In the breakdown by power/energy of systems installed by the ENGIE EPS Group until 31 December 2019:

• Power (MW): indicates the nominal power capacity of the energy storage system connected to the HyESS®;

• Energy (MWh): indicates the nominal energy storage capacity of the energy storage system connected to the HyESS®;

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• The ENGIE EPS Group system (MVA): the nominal power capacity of the PCS or distribution system integrated into the HyESS® or managed by the ENGIE EPS Group’s EMS (including solar, wind, distribution networks, backup applications, etc.).

(2) In the breakdown by application (Off-Grid Power Generation Solutions/Grid Support Solutions) of systems installed by the ENGIE EPS Group until 31 December2019:

• Off-Grid Power Generation Solutions: the total power output (MW) of the microgrid to which HyESS® is connected or installed by EPS. Such data includes, as outlined in the figure below) the power of any HyESS®, renewables and generator composing the microgrid.

• Grid Support Solutions: the nominal power capacity (MW) of the PCS connected to the grid to provide grid services or power quality to the respective customer. It includes utility scale and behind-the-meter solutions.

As of 31 December 2019, the ENGIE EPS Group’s total installed capacity reached 176 MW, of which 64 MW account for Grid Suport Solutions, and 112 MW account for Microgrids.

In terms of geographic breakdown of the ENGIE EPS Group’s installed base from 2017 through 2019, the majority of the systems are in European countries (67%), Asia Pacific (12%), Americas (16%), and Africa (6%).

Referring to the microgrid market only, from 2017 through 2019, the ENGIE EPS Group has installed and has under commissioning the majority of its systems in the Americas (40%), Africa (32%), APAC (24%), and Europe (3%).

5.4 Principal markets

5.4.1 Market for historic Product Lines

The ongoing transition in electrical power generation from fossil fuels and nuclear power to renewable energy sources has given rise to new challenges that have seen storage technology take centre stage.

In 2013, a seminal report by the McKinsey Global Institute6 on disruptive technologies pointed to energy storage at the network/grid level as one of the twelve breakthrough technologies that will contribute to transforming the global economy.

Indeed, energy demand and the global share of electricity in total energy demand have both practically doubled over the last 40 years, although a large part of electricity production is still provided by fossil resources with a large carbon footprint.

In this context, governments and the main national actors in the energy sector are led to favour and support technologies and energy production models which are more respectful of the environment, such as the production from renewable energy

6 McKinsey Global Institute, Disruptive Technologies; Advances that will transform life business, and the global economy, May 2013, pp

96-97.

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sources, entailing the deployment of storage solutions in order to manage intermittent production flows.

This vision also follows the position of the IEA, according to which energy policies should have the objective of producing 49% of electricity from renewable energy sources by 20307.

Developed economies

An energy storage device essentially consists of converting electricity into a form which may be stored and reconverted for subsequent use, thereby providing energy on demand. In this way, on the grid-scale, during periods of strong demand these systems allow producers and electricity suppliers to store excess electricity generated during periods of low demand, which the grid operator would otherwise be obliged to curtail, as may be the case during periods of excess production of renewable energies. Furthermore, since wind power and solar energy are resources dependent on weather conditions, their intermittent character poses a certain number of problems for grids in terms of the stabilisation, regulation and compensation mechanism.

The bottlenecks within the electricity supply system also translate into excess renewable electricity, which cannot be transferred to the wider grid and must therefore be curtailed by the network operators. Conversely, when renewable energy sources do not deliver the expected amount of electricity because weather conditions are not as initially expected, the network operators must turn to alternative power sources, normally gas turbines or, particularly in emerging markets, diesel generators, with a higher marginal cost.

Electricity storage solutions are also key enablers for the production of electricity close to the point of consumption, within the context of a smart grid. The concept of distributed generation, namely electricity produced close to points of use, rather than at a limited number of centralized production sites, is gaining ground, since it should permit the grid to manage the matching of supply and demand at all times in a more rational way.

Emerging Economies

Another factor playing in favour of the deployment of energy storage systems is the possibility for developing countries to better address their energy needs. Advanced energy storage systems indeed permit the supply of off-grid and weak-grid areas and may also be used to enhance current electrical grids, in order to increase their capacity until new infrastructure is implemented.

The combined effect of such drivers has seen stationary storage volumes to become significant on a global energy market scale. Based on Navigant Research’s most recent estimates, the non-residential stationary storage market is estimated to have totalled approximately 2.1 GW of installations globally in 2019, of which 1.6 GW (or 75%) for utility-scale systems and 0.5 GW (or 25%) for decentralized systems.

7 IEA, "Share of renewables in power generation in the Sustainable Development Scenario, 2000-2030", IEA, Paris

https://www.iea.org/data-and-statistics/charts/share-of-renewables-in-power-generation-in-the-sustainable-development-scenario-2000-2030. Data extracted on 17 February 2020.

https://www.iea.org/data-and-statistics/charts/share-of-renewables-in-power-generation-in-the-sustainable-development-scenario-2000-2030

https://www.iea.org/data-and-statistics/charts/share-of-renewables-in-power-generation-in-the-sustainable-development-scenario-2000-2030

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Such data have been calculated based on the following two reports: Navigant, Distributed Storage Overview, 4Q 2019, 12 Dec 2019; Navigant, Utility-Scale Energy Storage Overview, 3Q 2019, 18 September 2019.

Within such high-potential market scenario, since its IPO in April 2015, the business model of the ENGIE EPS Group had been focused on:

• Grid Support Solutions: as intermittent and unpredictable renewable energy progressively displaces traditional power plants, electricity grids increasingly need storage systems to stabilize the grid and smoothen the flow of electricity from intermittent renewables; and

• Off-Grid Power Generation Solutions: to serve the over one billion people and the business sector in entire regions around the world that are not currently served by a reliable electric power grid, replacing diesel-based generation and making better use of renewable energy sources.

Over such period, the ENGIE EPS Group had deployed storage systems for an aggregated 176 MW in installed power, and 84 MWh in energy storage capacity, split as follows between Grid Support Solutions and Off-Grid Power Generation Solutions (see paragraph 5.3.3 of this Universal Registration Document for explanation of the table).

5.4.2 Market Evolution

Over the last couple of years some key trends have become apparent. Such trends are particularly relevant for the business of the ENGIE EPS Group, and were the key drivers for the strategic positioning set forth in the Long Term Strategic Plan.

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The first and pre-eminent trend for the ENGIE EPS Group is the widespread adoption of utility-scale energy storage as a key grid-support and energy-management tool by integrated utilities and grid operators in developed markets, starting from the United States of America.

As recently documented by the major energy consultancy Wood Mackenzie8, in 2017 almost none of 43 US utilities surveyed expected to build any energy storage. The official outlook from that year suggested that storage would not play any meaningful role in grid operations through the 2020s. In 2018, six of those utilities decided to include some battery procurement in their integrated resource plans. In 2019, ten of those utilities were planning to install storage, their integrated resource plans calling for five times more capacity, on average, than the utilities including it in their 2018 plans.

As a result, the combined resource plans of the utilities surveyed by Wood Mackenzie now forecast over 5 GW of battery deployments from 2020 to 2029. The Tennessee Valley Authority, the Puerto Rico Electric Power Authority and PacifiCorp led in expected deployments during such decade.

Despite full market liberalization and sector unbundling preventing a similar integrated approach to the adoption of new technologies in Europe, following the early lead of the UK and Germany, the TSO of several countries are now considering or launching grid support schemes tailored on the performance characteristics of storage technologies. By way of example: i) in November 2019 RTE, the French TSO, launched an auction for 7-year capacity remuneration contracts whose technical specifications cater to energy storage systems; ii) also in November 2019, Terna, the Italian TSO, launched a consultation process concerning an imminent procurement program for 230 MW of fast-response reserve services, to be supplied by operators using energy storage systems.

Overall, according to BNEF’s 2H 2019 Energy Storage Market Outlook, plans for 7.7 GWh of new utility-scale deployments were announced globally in the first half of 2019, versus 6.9 GWh of announcements in the whole of 2018. Even though storage installation activity actually slowed down in the first part of 2019, due to fire accidents that raised safety concerns in South Korea, BNEF stresses how the

8 Wood Mackenzie, US utility battery storage deployments to surpass utility expectations in IRPs, 23 January 2020

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technology is becoming increasingly important in the key U.S. and China markets as an enabler of higher penetrations of wind and solar.

The second dominant trend for the ENGIE EPS Group is the exponential penetration of EVs in light road transportation. The automotive industry is facing major technical and economic changes, as governments all around the world support electric mobility by offering support and encouraging consumers to buy zero-carbon-emission cars. This trend represents a massive business opportunity for, among others, companies involved in the production of batteries and/or charging infrastructure: by way of example, in India the government envisages that 100% of cars sold in 2030 should be electric9. This implies thousands of public charging stations across the 29 states.

The rapid penetration of EVs is also expected to demand massive upgrades for the existing distribution infrastructure, as charging needs create new concentrated areas of high power demand, particularly in urban and peri-urban areas. On the other hand, with the appropriate smart charging infrastructure (for which the power electronics and integration know how of a player like the ENGIE EPS Group is highly relevant), the storage capacity of parked EVs can become a powerful tool for augmenting grid flexibility and stability. As evidenced in the recent Navigant Research’s report EV Charging Equipment Market Overview – Q2 2019, the market offers a wide array of opportunities for diversification and differentiation. Navigant Research projects, by 2030, 79 million charging ports to be installed globally.

Adapting to such emerging trends, with the Long Term Strategic Plan the ENGIE EPS Group has re-articulated its technology and product portfolio (see paragraph 5.3.2 of this Universal Registration Document).

5.4.3 Market of new Product Line

ENGIE EPS Group’s Giga Storage Product Line is mainly conceived to target the market for stand-alone utility-scale storage systems and utility-scale solar plus storage plants.

Utility-scale storage: the market for utility-scale standalone storage plants is mostly driven by grid support services as well as network capex avoidance opportunities, which represent some of the most common applications for energy storage located on the utility side of the meter10.

According to Navigant Research, this market is expected to reach 29,300 MW by 2027, as shown in the figure below. Navigant Research includes in its definition of the market the following services: generation capacity, transmission and distribution optimization, Frequency Regulation, Volt/Var support and renewables ramping/smoothing.

9https://economictimes.indiatimes.com/india-will-stick-to-plan-of-having-100-electric-mobility-by-2030-nitin-

gadkari/articleshow/60772337.cms?from=mdr 10 Market Data: Energy Storage for the Grid and Ancillary Services, Navigant Research Q1 2018

https://economictimes.indiatimes.com/india-will-stick-to-plan-of-having-100-electric-mobility-by-2030-nitin-gadkari/articleshow/60772337.cms?from=mdr

https://economictimes.indiatimes.com/india-will-stick-to-plan-of-having-100-electric-mobility-by-2030-nitin-gadkari/articleshow/60772337.cms?from=mdr

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BNEF, that includes in its definition four uses of storage (ancillary services, peaking capacity, energy shifting and transmission), expects the market to reach 20 GW of new installations in 2028 and exceed 140 GW cumulative in 203011.

Solar-plus-storage: the Giga Storage Product Line is also suitable to target the market for PV plants coupled with energy storage systems, designed for time-shifting (energy intensive) or ramp management and capacity firming (power intensive).

Combining utility-scale PV plants and energy storage systems as a single solar-plus-storage plant has been an increasing trend in the last few years. Combined, these technologies enable the capture of new revenue sources (i.e. ancillary

11 Long-Term Energy Storage Outlook 2018, BNEF, November 15th, 2018

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services, distribution and transmission investment deferrals, time-shift, etc.), while preserving the value of PV production.

Historically, the number of solar-plus-storage plants was negligible compared to the number of utility-scale PV systems or standalone utility-scale energy storage systems, yet an important growth in solar-plus-storage plants number and size has been noticed lately, driven by extensive deployment and falling costs of solar and storage.

As shown in the figure below, a large number of projects were announced all over the world lately, driven by the rapid reduction in overall system costs. The most significant volumes are emerging in Oceania and the United States, with Asia as a third market.

According to BNEF12, solar-plus-storage plants will become more and more competitive, on the back of a growing supply of equipment and rapid technology improvement. In an optimistic scenario, electricity generated by PV systems where 10% of the production can be stored, and later released on demand, could cost $38/MWh in 2021, just 10% higher than standard PV with no storage capability13.

With respect to installations in the US, by far the largest market globaly, projects have been favoured by government support in the form of the Investment Tax Credit (“ITC”) mechanism14.

Other initiatives implemented by single states offer additional support to create viable market conditions for solar-plus-storage: as an example, the Solar Massachusetts Renewable Target (SMART)15 program and the NY-Sun Program16 were announced. The following chart from Clean Horizon, Update from the Field 3/2019, provides an useful summary.

12 Solar-Storage Design Synergies Support Dispatchable PV, BNEF, 2018 13 Ibidem 14 Clean Horizon, Update From Field 3/2019 15 https://www.mass.gov/solar-massachusetts-renewable-target-smart 16 https://www.nyserda.ny.gov/All-Programs/Programs/Energy-Storage/Energy-Storage-for-Your-Business

https://www.mass.gov/solar-massachusetts-renewable-target-smart

https://www.nyserda.ny.gov/All-Programs/Programs/Energy-Storage/Energy-Storage-for-Your-Business

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ENGIE EPS Group’s Industrial Solutions Product Line targets the deployment of storage systems for industrial and energy-industry clients, aimed at increasing sustainability, affordability and security of supply, as well as flexibility for conventional power plants.

Industrial Microgrids: microgrids, where storage plays a fundamental role for stabilization and management of intermittent renewable sources, are emerging as a key technology tool to power emerging and frontier markets, both for rural electrification and for commercial and industrial projects. Microgrids are also increasingly seen as a tool for security of supply in developed markets, in case of supply disruptions deriving from natural events.

Indeed, Navigant Research forecasts the global microgrids market to exceed 10 GW of annual installations by 202517.

Developing microgrids in off-grid or weak grid environments has proven extremely challenging from a practical perspective, with significant scalability hurdles. Accordingly, within this market the ENGIE EPS Group is gradually focusing on industrial microgrids for C&I clients, a market than Navigant estimates at $1.3 billion annual by 2025.

17 Navigant, Distributed Storage Overview, 4Q 2019, 12 Dec 2019

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The Industrial Energy Storage Systems product sub-line is poised to benefit from the increasing role of power electronics and digital controls in industrial processes that, coupled with the local effects of intermittent renewable energy sources on grid stability, is driving up demand for power quality and reliability systems.

Power quality challenges have traditionally been addressed through an array of technologies (such as UPS, harmonic filters, surge protection devices, power conditioning units, static VAR compensators), rather than energy storage systems. However, cost reductions combined with sophisticated power electronics and energy management architectures such as the one developed by the ENGIE EPS Group, make energy storage systems an increasingly viable alternative to address power quality challenges – while at the same time allowing to capture other revenue streams, such as ancillary services remuneration.

As shown in the following chart, TechSci Research estimates the global power equipment market to reach $40.9 billion by 2024, with an annual growth rate of 6%18. To the extent a material portion of such incremental demand can be captured by storage systems, this segment represents a substantial revenue opportunity for the ENGIE EPS Group.

Similarly, the same product offering is suitable to optimize thermal power plants, increasing their flexibility and response capabilities to grid demands.

18 TechSci Research, Global Power Equipment Market, March 2018

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ENGIE EPS Group’s e-Mobility Product Line is positioned to capture the rapidly growing business opportunity at the interface between the EVs fleet and stationary infrastructure.

Charging Stations and Special Residential Charging Systems: the impact of EVs will be disruptive for the energy storage market. Battery demand from car manufacturers will force a fall in battery pricing, opening new business cases to stationary energy storage, and providing the market with a large stock of fatigued batteries suitable for a second life in stationary storage. Furthermore, the need of electrical infrastructure for the incremental energy requirements coming from EVs will open new market opportunities for sophisticated charging stations, also enabling new revenue streams linked to vehicle-to-grid applications.

BNEF foresees up to 5 million public recharging outlets to be installed by 2030 in a high growth scenario, and a cumulative market of up to $140 billion by 2020 for home charging systems19.

19 BNEF, Long-Term Electric Vehicle Outlook 2019, 15 May 2019

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5.5 Business Strategy and objectives

5.5.1 Business model

Up until 2019 the ENGIE EPS Group had been presenting its business model as a vertically-integrated approach to the value chain (see chart below): from technology provider, to project developer and general contractor (EPC & O&M).

When acting as a project developer, the ENGIE EPS Group intended to develop and build hybrid independent power plants (i.e. solar plus storage but also conventional generation plus solar plus storage), while also remaining (at least for a time) the owner and the operator of the asset. In this scheme, the ENGIE EPS Group would have normally signed a PPA with a customer who would then buy the electricity produced by the hybrid independent power plant, at a fixed price per kWh for a number of years determined in advance. ENGIE EPS would have provided the technology (proprietary for the storage, third-party for the remainder) and also arranged the required financing – by a mixture of its own funds, project financing and/or partners’ funds. The main drawbacks of this business model are the drain it imposes on the limited human and financial resources of the ENGIE EPS Group and the difficulty to find suitable customers and/or opportunities. The only example of such business model is the Comoros island project.

In the usual EPC approach, the ENGIE EPS Group delivers turn-key storage solutions (at times including the renewable energy plant) to its customer, who is the owner and manager of the renewable energy plant and the associated storage system (i.e. the owner-operator) and who is responsible for finding a buyer for the electricity produced.

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Following the strategic refocus announced in June 2019, the ENGIE EPS Group has been streamlining its business models as follows:

- Technology provider: ENGIE EPS Group will act as much as possible as technology provider of its own proprietary products, including such products to the maximum extent in any of its offers to customers. However, the pure sales of technology will remain an exception, given the complexity of the products developed by ENGIE EPS Group (i.e. cannot be normally be sold off the shelf);

- System integrator: the most natural role for the ENGIE EPS Group is expected to remain that of a system integrator. In this business model, ENGIE EPS Group combines its technology platform (or key components thereof) with third-party technology / products. For example, batteries, solar power plant components, and even PCS will be competitively procured from third parties and integrated into a full system or solution for ENGIE EPS Group’s customers. In this business model, the ENGIE EPS Group can count on its world class engineering capabilities and its modular and robust technological platform, which has been used over the past fifteen years, initially in experimental and later in commercial projects, to integrate several different types of batteries and non-battery storage technologies, and multiple generating sources, both renewable and conventional;

- EPC: at times, ENGIE EPS Group would then be able to deliver the solution or systems engineered and procured for a customer on a full turn-key basis. In the EPC business model scheme, ENGIE EPS Group would therefore also offer to its customers the in field installation and/or construction activities. Those would normally be entirely subcontracted to selected partners, with supervision and overall responsibility for project delivery remaining with the ENGIE EPS Group.

As mentioned in section 5.2 above, both the Project Developer and PPA business models will no longer be pursued by ENGIE EPS Group, except in special circumstances.

The three standard business models henceforth adopted by ENGIE EPS Group can also be matched with the three new prodcut lines as follows:

With regard to the Giga Storage Product Line, the ENGIE EPS Group will normally go to market by supporting Engie or another IPP, who would act as owner and operator of storage systems, in tenders for grid support service contracts or PPAs for time-profiled PV production. In case of award of the tender, the ENGIE EPS

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Group would deliver and guarantee the performance of the storage system to the IPP, on the basis of pre-agreed terms.

For the Industrial Solutions and e-Mobility Product Lines, the ENGIE EPS Group may contract directly with the final clients the sale of the systems, or deliver them as-a-service in partnership with an ENGIE Group geographic business unit acting as owner. In such case the direct client of the ENGIE EPS Group would be the ENGIE Group business unit.

5.5.2 Business strategy and objectives

Under the Long Term Strategic Plan, the ENGIE EPS Group aims at achieving annual revenues of €100 million by 2022, positioning it as a leading global supplier of storage and V2G solutions to utilities, IPPs and major industrial and automotive groups.

The broad strategic underpinnings of such ambitious targets are outlined below.

(i) Market strategy

From a market perspective, the ENGIE EPS Group will focus its commercial effort on those jurisdictions where i) the potential of energy storage is supported by a critical mass of tenders for either storage services or the direct purchase of storage systems by creditworthy counterparties, and ii) ideally, in which the ENGIE Group has an established presence, offering the opportunity for commercial, financial and stakeholders’ management synergies.

Within such framework, Europe, North America and the MENA region are currently expected to catalyse most of the ENGIE EPS Group’s resources through the horizon of the Long Term Strategic Plan.

The growing maturity of the energy storage sector in those regions implies that, particularly in the commercialization of its Giga Storage Product Line, the ENGIE EPS Group will be increasingly exposed to price-based competitive dynamics. Crucially, however, in service tenders where storage systems are purchased by utilities or IPPs to deliver energy or grid support services to an energy buyer or a TSO / DSO, the initial cost of the storage system is only one factor in determining the energy or service price that the owner of the storage system can offer to the final client. Indeed, such price is also determined by the degradation profile of the storage system over time, its performance parameters, its technical availability, etc. Such factors create fundamental elements of non-price competition that can be mobilized by the ENGIE EPS Group leveraging its know-how, in order to mitigate margin compression dynamics.

With that in mind, the ENGIE EPS Group is focused on a range of strategic actions to strengthen its core competences supporting non-price-based competition.

With respect to the Industrial Solutions Product Line, given the scalability challenges experienced in targeting island systems and weak grid environments, the ENGIE EPS Group intends to increase its focus on multinational industrial clients, with priority on those industrial verticals featuring a mix of sustainability, power quality and affordability requirements most conducive to the adoption of storage technologies. Furthermore, the ENGIE EPS Group intends to build on its experience in coupling storage systems to conventional power stations to work

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extensively with power plant owners in view of increasing the flexibility and endurance of their plants, via the retrofitting with energy storage systems.

The promotion of the ENGIE EPS Group’s offering for the e-Mobility Product Line will prioritize partnering with selected leading automotive groups, for the launch of charging and V2G solutions leveraging ENGIE EPS Group’s know-how in energy storage and grid stabilization.

(ii) Core competence strategy

In order to preserve and amplify its areas of sustainable competitive advantage, and mitigate the impact of price-based competition, through the horizon of the Long Term Strategic Plan the ENGIE EPS Group will continue developing:

• Superior system engineering capabilities: the extensive experience built in both off- and weak-grid environments, as well as across multiple technologies, provides a competitive edge in the optimal sizing and configuration of storage systems. The expansion and continuous professional development of the system engineering team is a strategic priority for the ENGIE EPS Group;

• Cutting-edge technology for power conversion and control and energy management: the capabilities of ENGIE EPS Group’s conversion and control technologies are a key distinguishing asset on the market. As suppliers introduce new generations of hardware components, enabling the design of denser configurations of ENGIE EPS Group’s System Blocks, the ENGIE EPS Group will preserve its technology edge via the constant improvement of its technology families;

• Strategic partnerships with key suppliers, particularly in the battery sector: as storage systems evolve toward increased capacity per unit of nominal power, procurement terms and service levels from battery suppliers will grow more and more relevant. The ENGIE EPS Group will continue developing its strategic dialogue with world-class battery manufacturers in view of securing preferential procurement terms;

• Strategic relationship with the ENGIE Group: the geographical business units of the ENGIE Group represent an obvious go to market route for the ENGIE EPS Group, across the three Product Lines. The arm’s-length coperation with the ENGIE Group represent a decisive accelerator for the affirmation of the ENGIE EPS Group as a market leader in an increasing number of geographies. In addition to being a go to market channel, some ENGIE Group business units have operational capabilities complementing the ones of the ENGIE EPS Group, with respect inter alia to civil and interconnection works required to deliver the storage systems to the end client. In this respect, as already proven in the Sol de Insurgentes solar+storage project, the ENGIE EPS Group has an obvious complementarity with ENGIE Solar, the ENGIE Group business unit acting as solar EPC contractors, that has the operating capability and balance sheet capacity to deliver and guarantee utility-scale PV systems embedding storage systems designed and built by the ENGIE EPSGroup;

• Implementation of best practices from field experience: as the ENGIE EPS Group’s installed fleet accumulates thousands of working hours, the collection and analysis of historical performance – also with the support of artificial intelligence and big data methodologies is a an operating and research & development priority;

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• Outstanding quality of execution and after-market service: delivering world-class service to clients, both during system and installation and operation is a requisite for repeat business generation and the establishment of strategic client relationships.

5.5.3 Competitive positioning

As shown in the table below, the ENGIE EPS Group faces four type of competitors in the market, with different positioning along the value chain:

(i) Battery and inverters manufacturers offering off-the-shelf standardized energy storage systems

Companies like Tesla and BYD, among battery manufacturers, and Sungrow among PCS manufacturers, compete with the Engie EPS Group by offering clients off-the-shelf standardized systems – benefiting from the economy of scale of high-volume production. However, in the Engie EPS Group’s experience, standardized systems only represent a succesful value proposition in specific circumstances, while the sizing optimization allowed by the open architecture of Engie EPS Group’s tecnology families allows to minimize the total cost of ownership of storage systems through their economic life.

(ii) Systems integrators with proprietary power electronics

Well-established system integrators like Fluence, Nidec, NEC and Wartsila represent the ENGIE EPS Group’s traditional peer universe. The ENGIE EPS Group’s lean operations, entrepreneurial attitude and agile operation represent important elements of cost and go-to-market advantage, compared to such players part of large conglomerates with a presence across multiple sectors.

(iii) Pure technology-neutral integrators

To date, unlike in the PV sector, pure-play integrators without proprietary technology for conversion and control have struggled to secure a consistent flow of business on pure price-based competition. As the sector matures, competences develop and proven conversion and control equipment is launched by leading power electronics groups, generalist integrators are likely to become a competitive threat – but also partnership candidates.

(iv) Utilities groups venturing into client solutions, particularly in the industial and electronic mobility sectors

The ENGIE Group, through among others the acquisition of a controlling share in the ENGIE EPS Group, has built a technology edge in storage based solutions against competitors, other utilities and energy companies are acquiring proprietary competences in system integration, increasing competition across the ENGIE EPS Group’s three Product Lines. The Enel group in particular, through its EnelX division, represent an obvious competitor for the ENGIE EPS Group, particularly for the Industrial Solutions and e-Mobility Product Lines.

5.6 Dependence on patents or licence, industrial, commercial or financial contracts or new manufacturing processes

ENGIE EPS’s results notably depend upon the effective protection of its industrial property rights, the performance of certain suppliers of raw materials or core

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components and certain sub-contractor as outlined in paragraph 3.2.1 of this Universal Registration Document and on the financial support granted by ENGIE as described in paragraph 3.2.5 of this Universal Registration Document.

5.7 Investments

5.7.1 Major Investments

The total volume of investments carried out by the ENGIE EPS Group in 2019 is equal to €3,565 k, compared to €3,917 k in 2018. In 2017 the total amount of investments was €2,729 k. The major investments (tangible assets and intangible assets) carried out over the last three years, were fully invested in Italy.

Specifically, within the total intangible assets amount, in 2019 the ENGIE EPS Group continued to invest in the develop of new and existing projects. The major investments can be summarized as follows:

• €718 k for the improvement of EMS (Energy Management System) and PMS (Power Management System): this project stems from the need to improve the present Energy and Power Management Systems for the operation of both isolated and grid connected storages, possibly in combination with other types of electrical assets. Moreover, newer and more stringent grid codes, efficiency and robustness requirements required an overhaul of the existing plant controller architecture;

• €516 k for the energy storage products development: the project includes standardization, optimization and development of energy storage solutions that will improve ENGIE EPS Group’s competitiveness in terms of performance and cost. This project provided ENGIE EPS Group with a set of products optimized for the rapidly evolving energy storage market, thanks to the rationalization, standardization and optimization of existing containerized solutions. It is also resulted in a cost reduction of the containerized solutions and a boost in their power and energy density. The maximum power in a 40ft container (PowerHouse) was increased from 3,6 MW to 14,4 MW, while the maximum energy in a 40ft container increased from about 2 MWh to more than 5 MWh;

• €421 k in E-mobility with BMS (Battery Management System) development: the project will exploit the value of EV batteries in providing energy and power services to the grid (V2G applications). To this end, a reliable ageing model and a real time battery model will be developed and integrated into a modular advanced battery system. Thanks to ENGIE EPS Group know-how, different innovative solutions were developed to break into the emerging e-mobility sector. First of all, an innovative centralized solution for EV parking recharging infrastructure (EVHouse) was designed and will be soon deployed into an FCA plant . Leveraging on EVHouse technology, ENGIE EPS Group will be able to bid in the Fast Reserve Unit (FRU) project, a frequency regulation project by TERNA S. p. A., using its unique vehicle-to-the-grid technology;

• €406 k in the H2 open innovation platform scale up project: the project aims to develop a solution that can cover not only the needs of the P2P market but also

INVESTMENTS (amounts in Euro)Tangible Assets 276,528 780,971 147,742Intangible Assets 3,288,488 3,135,602 2,581,110TOTAL INVESTMENTS 3,565,016 3,916,573 2,728,852

31/12/201831/12/2019 31/12/2017

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those of the H2 industrial production and the H2 refuelling station for green mobility application;

• €311 k for Power and Control Electronics Development: the project covers mainly the bottom level of ENGIE EPS Group vertical integration, providing the fundamental bricks for the whole system. The development of innovative technologies for power and control electronics is aimed at enabling the design of new products in the fast-growing sectors such as PCS, e-Mobility, predictive diagnostics, as well as energy storage systems, both stationary and distributed on EV;

• €310 k in computer science and artificial intelligence algorithms development: the most important goal is to further improve the techniques used for the development of the ENGIE EPS Group’s EMS, within the framework of Prophet project. The new EMS is based on mathematical optimization, predictors (as load and photovoltaic forecasters), adaptive functionalities and real time updating of the constraints. Another vital direction is to provide a software dashboard which will help supervise and monitor the plant and the assets in the portfolio;

• €167 k for the enterprise resource planning development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by the ENGIE EPS Group;

• €110 k for the development of power electronics, e-Mobility and standardized product solutions. In detail this development regards new 100kW - 1500 VDC inverter; and

• €57 k in the Prophet project. The main goal of this project is to develop and improve the control predictive algorithm for a multi-Distributed Energy Resources (“DER”) microgrid. The new optimized control will ensure secure microgrid operation and reduce the energy cost, making the best use of renewable generation and storage capability. Moreover, the project will investigate the impact on the grid given by the introduction of electric vehicles (“EV”), their optimal management in terms of charging, grid services they can offer and how they can create business cases in the microgrid context.

For the source of financing of these investments please refer to the paragraph 8.1 of this Universal registration Document.

5.7.2 Investments in progess and future ones

In 2019 the ENGIE EPS Group continued to invest in the development of existing and new projects.

At the date of this Universal Registration Document, ENGIE EPS Group does not anticipate major investments on which the managing bodies of the Company would hold firm commitments.

5.8 Relevant joint ventures and undertakings

The information concerning joint ventures and undertakings in which the Company holds a proportion of the share capital likely to have a significant effect on the assessment of its asset base and liabilities, financial situation or results appears in chapter 6 – “Organisational Structure” of this Universal Registration Document.

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5.9 Relevant Environmental issues

Although climate change is not directly affecting our business, one of the ENGIE EPS Group top priority is climate protection.

In fact, the ENGIE EPS Group aim is to tackle this issue by further expanding renewable energies, both in mature economies and in emerging countries, and to contribute to replacing older and polluting power plants, which generate high levels of emissions, with new and highly efficient plants.

ENGIE EPS Group is playing a key role in structuring the energy transition so as to solicit and enable a carbon-neutral electricity supply, while at the same time being in a position to make provision for future energy needs with a high quality of backup power supply over the long term.

In the public debate, climate protection also plays an important role. ENGIE EPS Group stakeholders, mainly customers, institutions and politicians expect it to support the accomplishment of ambitious targets and to deliver a consistent approach directed towards the reduction of greenhouse gas emissions.

The ENGIE EPS Group operations require energy which gives rise to the carbon dioxide emissions, directly or indirectly. To reduce greenhouse gas emissions, the ENGIE EPS Group has decided to introduce a hybrid corporate fleet and will also evaluate the introduction of electrical vehicles for urban business trips.

5.10 General Data Protection Regulation, Cybersecurity and Information Systems

The entry into force of Regulation (EU) 2016/679 on the European Parliament and the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data on the free movement of such data, and repealing Directive 95/46/EC (“GDPR Regulation”) resulted in important changes to the European regime that used to govern data protection since the adoption of the Data Protection Directive and requires a completely different approach to cybersecurity measures.

In 2018, ENGIE EPS Group began conducting a risk assessment (including in relation to domain names, DNS, SSL, and social media usernames) by evaluating risks that might occur during the processing of personal data and mitigate them by implementing technical and organisational measures. In 2019, the implementation process was completed. As a consequence, ENGIE EPS Group is now compliant with the GDPR.

From an organisational point of view, in compliance with the GDPR, ENGIE EPS Group implemented a Privacy Governance Model by adopting all privacy policies applicable and required by the GDPR. In accordance with article 30 of the GDPR, a Data Protection Register was implemented in order to record all processing activities led by ENGIE EPS Group, by including significant information about data processing, and to make them available for consultation when required by competent authorities.

From a technical point of view, during the course of 2019, ENGIE EPS Group, in compliance with the GDPR, further increased the security measures protecting personal accounts, such as Mailbox, Intranet, FileServer, Remote Desktop, etc.

In accordance with the ENGIE IT Ensemble Program, ENGIE EPS Group introduced Okta, a cloud-based Multi Factor Authentication (MFA) system. Okta is interconnected with the ENGIE EPS Goup corporate directory (Active Directory) and therefore the

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users’ accounts. In addition, Okta is interconnected with Office 365 and covers online services such as Mailboxes and all other Office 365 applications.

As for the applications in use, in 2019 ENGIE EPS Group completed the decommissioning of all those not compliant with the GDPR in terms of user / access management. The new passwords applications, as well as the Company Directory (Active Directory) are now compliant with the most common criteria of complexity and expiration.

In the course of 2019, ENGIE EPS Group achieved important milestones in the cybersecurity area. First of all, starting from April 2019, ENGIE EPS Group began adapting to the ENGIE IT Active Directory Security Joining Rules (“ADSJR”) program. The program was closed in December 2019 with the achievement of all objectives and the maximum achievable result in terms of compliance. A similar path and result was also achieved for the Active Directory Data Quality (ADDQ) program, for which activities began in February 2019 and ended in December 2019. ENGIE EPS Group reached all compliance objectives in this case as well.

YubiKey, hardware keys for double factor authentication for remote desktop connections of users with elevated privileges (System Administrator), was introduced. In addition, ENGIE EPS Group made encryption of hard drives for endpoint security mandatory through a centralized policy.

For the main network site, ENGIE EPS Group activated, with ISP Colt, a failover connectivity service that allows the routing of public IP addresses during the transition from the primary link to the secondary link and vice versa.

During August 2019, ENGIE EPS Group created a new cloud environment together with its partner VarGroup. This environment includes six Virtual Servers (Virtual Machines) dedicated exclusively to the use of the new SAP B1 management system that is under implementation and which is scheduled to go live in the course of 2020. This Cloud environment is connected to the ENGIE EPS Group network at an infrastructural level in full compliance with the policies and safety measures dictated by the ENGIE Group.

With reference to the improvement of business continuity and data protection, ENGIE EPS Group introduced Veeam, which allows the performance of scheduled backups of all ENGIE EPS Groups’ Virtual Servers.

During 2019, various Cybersecurity activities were formalised, such as:

− Weekly Operational Cybersecurity Call (WOCC): between ENGIE EPS and the Global Security Operation Center (GSOC) of ENGIE IT for alignment and weekly updates on new vulnerabilities, ongoing incidents, various critical issues, etc.;

− Weekly Update Ciso Cybersecurity (WUCC): between the IT Corporate Manager, the IT Plants Manager and ENGIE EPS CISO for alignment. General updates on any critical issues, progress of work, any incidents in progress, etc.

− Ensemble Days: Annual event held by ENGIE IT during which we discuss possible ongoing vulnerabilities, user training, current status, presentation of new projects, etc.

With reference to the Industrial Control System (ICS), and in order to improve ENGIE EPS Group’s cybersecurity posture in communication with power plants, the segregation from the corporate network of the network

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infrastructure enabling remote access for service purposes to our operators was improved.

In addition to the aforementioned technical solutions, the Company is also working on its organization, both protecting sensors data with ad hoc backup procedures, and improving internal processes in accordance with IEC 62443 standards, focused on cybersecurity of industrial automation and control systems.

Although ENGIE EPS Group implemented and adopted specific security measures and minimum technical standards in order to be compliant with the GDPR and to avoid to the maximum extent possible any cybersecurity breach or data leak, the measures implemented will have to be constantly monitored in order to guarantee an adequate level of security.

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6 ORGANISATIONAL STRUCTURE

6.1 Organisational Structure

The diagram here below presents ENGIE EPS as at 31 December 2019.

The percentages represent capital and voting rights.

For a further description of the consolidated perimeter please refer to paragraph 3.7 “Evolution of the consolidation area” of the Consolidated Financial Statements of the ENGIE EPS Group included in the Annex 1 of this Universal Registration Document.

6.2 The ENGIE EPS Group

6.2.1 ENGIE EPS S.A. (formerly Electro Power Systems S.A.), the parent company

ENGIE EPS S.A., a limited liability company governed by French law, was incorporated and registered on 26 December 2014, the shares of which have been admitted to trading on Euronext Paris on 21 April 2015, which is dedicated to the commercialization and holds all of the share capital of and voting rights in EPS Manufacturing, EPS Elvi, MCM, EPS USA and 49% of the share capital of Comores Energies Nouvelles. EPS India, which had not been operating since 2013, is not included in the consolidation perimeter.

On 24 January 2018, the main shareholders of the Company (360 Capital Partners, Ersel and Prima Industrie) entered into a sale and purchase agreement with GDF International, a company belong to ENGIE EPS, to acquire a majority stake of the Company slightly above 50% of its share capital and its voting rights. In order to achieve that threshold, the agreement also involved the members of the Board of Directors and the management team. The agreement aimed to build up a partnership to scale up globally and to be a strategical partner of ENGIE EPS as new leader of the energy transition towards decentralised energy solutions. The closing of the transaction – which occurred on 7 March 2018 - was subject to the condition precedent of the setting up of a new retention and long-term incentive plan to secure and strengthen the full commitment of the management team until 2021, linked to the development of the Company and an exercise price of at €9.5 per share. It was followed by the filing of a simplified mandatory tender offer at the

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same price on 29 March 2018, subject to the fairness opinion of Associé en Finance. Following the tender (which closed on 14 June 2018) ENGIE (through its subsidiary GDF International) holds 59.89% of the Company’s share capital and voting rights (post-exercise by ENGIE (through its subsidiary GDF International) of all of its Warrants tendered in the offer).

During the Extraordinary General Meeting of ENGIE EPS on 25 June 2019, it was approved the change of corporate name into ENGIE EPS S.A.

6.2.2 Electro Power Systems Manufacturing S.r.l.: EPS Manufacturing (formerly Electro Power Systems S.p.A.)

EPS Manufacturing is an Italian limited liability company, incorporated on 25 January 2005 in Turin, Italy. Its registered office is located in Via Anton Francesco Grazzini, 14 - 20158 Milan, Italy. Its R&D and manufacturing centre is located in Rivoli, Turin and an operational office is located in Aosta, both are dedicated to hydrogen R&D, production and commercialization.

Its share capital is €1,004,255.

The Turin production hub is a cutting-edge facility with 3,500 m2 of floor space, and a production capacity of 2MW per month of HyESS systems coupled with hydrogen, and 400MW per year of HyESS on a stand alone basis.

The facility, in addition to the administrative and logistics offices, hosts the final phase of development of the HyESS coupled with hydrogen.

The ENGIE EPS Group’s management team decided to terminate the lease agreements of the abovementioned facility in Aosta and move the centre of the operations to Rivoli, Turin for incremented business needs, to strengthen the link between R&D and production and centralize in a single location all R&D and hybrid-systems related operations.

The termination of Aosta lease agreement will enter into effect on 15 March 2020.

Nevertheless, EPS Manufacturing’s aim is to maintain a smallest research unit in the Valle d’Aosta Region, closest to the Piedmont confines, to strengthen the partnership with local companies and enter the network of companies and research centres operating in that area.

The transformation of EPS Manufacturing from a joint stock company (S.p.A.) to a limited liability company (S.r.l.) has been determined in order to obtain a cost reduction due to the simplified management system and, at the same time, to increase the flexibility connected to the governance of limited liability company type of company.

The Company holds 100% of the share capital of EPS Manufacturing.

6.2.3 Electro Power Systems Inc.: EPS USA

The registered office of EPS USA, which is dedicated to commercialization, is incorporated in the state of Delaware and its registration office is located at 160 Greentree Drive, Suite 101, Dover, 19904 Kent County, Delaware, United States of America.

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The premises of EPS USA are located at the Galvanize campus in San Francisco (http://www.galvanize.com/campuses/san-francisco-soma), a co-working space at 44 Tehama St, San Francisco CA 94105, USA.

The Company holds 100% of the share capital in EPS USA, through its wholly-owned subsidiary EPS Manufacturing.

6.2.4 EPS Elvi Energy S.r.l.: EPS Elvi (formerly Elvi Energy S.r.l.)

On 30 November 2015, a sale and purchase agreement (“SPA”) was entered into by and between Elvi Elettrotecnica Vitali S.p.A. (“Elvi Elettrotecnica Vitali”) and ENGIE EPS for the acquisition of a stake equal to the 100% of the share capital of a new company owned by Elvi Elettrotecnica Vitali called Elvi Energy S.r.l. (now EPS Elvi). Article 5.1 of the SPA provides that, subject to the satisfaction of the Conditions Precedent (as defined in the SPA), on the Closing Date, the Parties should execute the notarial deed and transfer the shares of EPS Elvi in front of the Notary Public by virtue of a notarial quota deed of transfer and ENGIE EPS should pay the price. The SPA expressly states that “the transfer of the shares of EPS Elvi shall be effective and in full force on from 1 January 2016” (article 5.1, II Paragraph). Therefore, from a legal perspective, the acquisitions came in full force on 1 January 2016 and from that date the ownership of EPS Elvi moved from Elvi Elettrotecnica Vitali to ENGIE EPS, as confirmed by the certificate of good standing issue by the Companies’ Register of Milan.

On 8 August 2017, the capital increase of the Company reserved to the management team was duly executed through the issuance of 196,932 shares with a par value of €0.20. The new shares have been issued at a unit price of €7.15, representing a par value of €0.20 and €6.95 issue premium, accounting for a total increase in capital, issue premium included, of €1,408,063.80. The following persons subscribed at most the number of shares indicated below:

During the Extraordinary General Meeting of EPS Elvi on 8 February 2017, the change of corporate name into EPS Elvi Energy S.r.l. was approved.

EPS Elvi is incorporated in Italy. The Company holds 100% of the share capital in EPS Elvi.

6.2.5 MCM Energy Lab S.r.l.: MCM

In the context of the EPS Elvi acquisition, the Company indirectly purchased the 30% of MCM’s share capital through its participation of 100% in EPS Elvi. On 18 January 2016, the Company acquired the remaining 70% of the share capital of MCM; in particular, the Company bought a stake representing 10% of the share capital of MCM previously held by Politecnico di Milano and the 60% of the quotas

Beneficiary

Number of shares Subscription amount

Elvi Elettrotecnica Vitali S.p.A 58,842 shares €420,720.30

Mr. Nicola Vaninetti 47,761 shares €341,491.15 Mr. Gabriele Marchegiani 29,820 shares €213,213.00

Mr. Gabriele Marchegiani 7,175 shares €51,301.25

Mr. Paolo Morandi 31,807 shares €227,420.05 Mr. Francesco Castelli Dezza 9,567 shares €68,404.05

Mr. Irino Mazzucco 4,784 shares €34,205.60 Mr. Daniele Rosati 4,784 shares €34,205.60 Ms. Luisa Frosio 2,392 shares €17,102.80 Total 196,932 shares €1,408,063.80

http://www.galvanize.com/campuses/san-francisco-soma

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held by the university researchers. The transition was concluded for €315,000. Around 76% of the proceeds will be reinvested in ENGIE EPS via a capital increase reserved to the EPS Elvi management team.

MCM is a spin-off of the Politecnico di Milano. MCM activity consists in the development, design and supply of digital control and static energy conversion systems which can be used as critical components in various applications, always with the aim of achieving energy savings. The main component of MCM technology is the Universal Digital Control System that provides an advanced interface to the public grid for Distributed Generation systems, suitable for all sources, such as wind, photovoltaic, gas micro cogeneration and mini hydroelectricity plants.

The Company holds 100% of the share capital in MCM, of which 70% is held directly and 30% indirectly through wholly-owned subsidiary EPS Elvi.

On 10 December 2019, the Extraordinary Assembly of MCM resolved to put MCM in liquidation according to article 2484 of the Italian Civil Code. The Extraordinary Assembly appointed a liquidator who was granted all the powers to carry out all the deeds useful for the liquidation of MCM.

MCM was incorporated in Italy. It was officially liquidated and deleted from the Trade and Companies Registry of Milan on 8 January 2020.

6.2.6 Electro Power Systems India Pvt Ldt: EPS India

EPS India is a representative office with no autonomous operations or assets of its own.

EPS India is incorporated in India and its registered office is in New Delhi (India), K-61 Basement, Jangpura Extension, 110 014, and is dedicated to commercialization.

Since 2013 EPS India has ceased its operational activities. As a consequence, starting from 2013 it has been excluded from the Consolidated Financial Statements of the ENGIE EPS Group, considering that it is not material in terms of impact on assets, liabilities, revenues and costs.

The ENGIE EPS Group’s management team decided to close EPS India considering the fact that it has ceased its operational activities since 2013. Closing operations are currently on going at the time of this Universal Registration Document.

The Company holds 100% of the share capital in EPS India through its wholly-owned subsidiary EPS Manufacturing.

6.2.7 Comores Énergie Nouvelles S.A.R.L.

On 15 August 2018, ENGIE EPS and Vigor International Limited ("Vigor") set up a jointly-held Comorian subsidiary, Comores Énergies Nouvelles S.A.R.L. ("Comores Énergies Nouvelles" or the "SPV"), a special purpose vehicle in charge of the construction, commissioning, ownership, operation and maintenance of the generation plants up to 10 MW nominal capacity in aggregate in the islands of Anjouan and Mohéli (Comoros Islands), and which will act as supplier under the PPAs with the local utilities.

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The SPV is a limited liability company governed by the Revised Uniform Act of OHADA on the law of commercial companies and the economic interest grouping adopted on 30 January 2014 in Ouagadougou (Burkina Faso), and all subsequent complementary or modifying laws with its registered office located at Ridjal Building, Moroni - Dar Saanda, PO 2223, Moroni, Comoros.

The Company holds 49% of the share capital in the SPV.

6.2.8 ENGIE EPS Group Companies operational focus

ENGIE EPS and EPS Elvi are operational entities focused in providing specific services. In particular:

(i) ENGIE EPS provides several services: Business Development, Internal Control and Business Intelligence, Administration and Finance, Legal and Compliance, Financial and General Management;

(ii) EPS Elvi is the operational and sales division. In addition, the company has leased both EPS Manufacturing and MCM and carries out also the operations of R&D and manufacturing of standardized modules and systems; and

(iii) EPS Manufacturing is focussed exclusively on the development and maintenance of intellectual property assets.

For a detailed description of operations between ENGIE EPS and its controlled companies please refer to paragraph 17.1.

6.3 List of existing branches

On 2 November 2017, the company acquired from its subsidiary EPS Elvi the business line "E- Mobility & Power Electronics Lab".

In this so-called e-Mobility sector, the ENGIE EPS Group is working with operators in the rail and automotive sector.

Its own technology is used to make electric mobility an asset in the transport network, and to improve vehicle safety (sophisticated control techniques developed in the Energy’s sector).

Main applications in the field of e-Mobility are:

• Systems enabling the provision of ancillary services to the transmission network (frequency and voltage adjustment);

• Optimization of storage systems for EVs and related battery systems;

• Electronic signalling management systems for complex railway networks (metropolitan and high-speed trains);

• Telemetry and electronic control systems for the preventive management of diagnostics for high-speed trains and EVs;

• Equipment control techniques for EVs, in collaboration with manufacturers of electrical appliances in the automotive sector.

The definitive purchase price amounted to €876,122.

Revenues of this branch in 2019 amounted to €828,381. A loss of €795,501 was reported in FY 2019.

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The main income items of this branch, included in the overall result of the company are as follows:

INCOME STATEMENT12 months 31/12/2019Revenues (net of taxes) 828,381

Stock and fixed assets 0

Cost of goods sold and other income 77,750

ADDED VALUE 750,631Personnel cost 781,689

Other operating expenses 88,090

GROSS OPERATING EXPENSES (119,148)Other products 21,483

Amortizations and provisions 698,326

Other expenses 0

EBIT (795,991)Financial result 3,483

Tax (3,973)

CURRENT RESULT (795,501)

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7 OPERATING AND FINANCIAL REVIEW FOR THE FINANCIAL YEARS ENDED ON 31 DECEMBER 2017, 2018 AND 2019

7.1 Financial condition

The reader is invited to read the following information on ENGIE EPS Group’s financial situation and results together with all of this Universal Registration Document, notably the consolidated accounts of ENGIE EPS Group and the attached notes, as well as the Statutory Accounts appearing in chapter 18 (Financial Information Concerning the Issuer’s assets, financial situation and results) of this Universal Registration Document.

The Consolidated Financial Statements of the ENGIE EPS Group shown in this Universal Registration Document reflect the accounting situation of the Company and the ENGIE EPS Group.

The selected financial information presented below is the Consolidated Financial Statements of the ENGIE EPS Group for the years ended on 31 December 2017, 31 December 2018 and 31 December 2019.

The ENGIE EPS Group consolidation perimeter underwent several amendments during the financial years ended 31 December 2017, 2018 and 2019.

Comores Énergies Nouvelles was incorporated on 20 July 2018. ENGIE EPS subscribed 60% of the share capital. The remaining 40% was subscribed by Vigor International Ltd. On 20 November 2018, ENGIE EPS exercised the put option granted by the shareholders agreement signed with Vigor International Ltd and sold 11% of the total issued capital. As at 31 December 2019 ENGIE EPS owns 49% of Comores Énergies Nouvelles. The entity is consolidated pursuant to the equity method in the 2018 and 2019 Consolidated Financial Statements.

During 2019, a project of reorganization and rationalization was launched with the aim to simplify Group structure and reduce General and Administrative costs. The first step of this project was the closing of MCM, approved in December 2019 and closed on 8 January 2020 (please also refer to paragraph 7.3).

The consolidation perimeter as of 31 December 2019 includes: Engie EPS S.A., EPS Manufacturing S.r.l., EPS Elvi Energy S.r.l., MCM Energy Lab S.r.l., EPS Inc., all fully consolidated, and Comores Énergies Nouvelles, consolidated pursuant to the equity method.

The financial year 2019 was mainly characterized by the following events.

Revenues and Other Income amount to €20.2 million as of 31 December 2019, up 29% compared to the previous year. This growth is mainly due to the early results under the Long Term Strategic Plan for Giga Storage with utility-scale storage and solar plus storage projects, and Industrial Solutions with microgrids and storage systems. Worth highlighting are, respectively, the successful deployment of the Sol De Insurgentes project in Mexico and the commissioning of the microgrid in Lifou, New Caledonia. In addition, during 2019 significant progress was made in the construction of the project in Comoros and for the storage solution for the Leini power plant, as well as the commissioning of the third stage of our microgrid in Somaliland.

On the other hand, as of 19 March 2020, Backlog amounts to €29.5 million, a decrease of 18% compared to revised Backlog communicated on 21 June 2019 (44% if compared to the initial one communicated on 14 March 2019). The decrease in Backlog is driven

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by the reduction in Order Intake due to several significant projects included in the Pipeline that eventually have been delayed or not awarded, and that, together with the COVID-19 outbreak, force the withdrawal of the 2020 revenue guidance, as described in paragraph 7.3 of this Universal Registration Document.

Pipeline increased by 127% in the same period, reaching €686 million. This Pipeline includes the project in Guam (US) where ENGIE EPS has been selected as successful bidder for the construction of two Solar-plus-Storage projects under a 20-year PPA by the Power Authority of Guam (GPA) and where ENGIE EPS is the exclusive storage solution provider. Review of the appeal lodged by another bidder, final approval and formal contract award by the relevant authorities (Consolidated Commission on Utilities, the Guam Public Utilities Commission and the GPA) are underway but, because of the COVID-19 disruption further delays can be expected for this project to enter the Backlog and, eventually, generating revenue.

Gross margin stands at 26.5% for 2019, compared to 30% in 2018, mainly due to the lower marginality of the project in Mexico, which however represents an iconic project brought by ENGIE and accounts for more than 60% of the financial year 2019 revenues.

Personnel costs increased by 53% reaching €6.7 million compared to €4.4 million in 2018. This is in line with the Long Term Strategic Plan, which envisaged that ENGIE EPS would strengthen its workforce in order to obtain the necessary foundation to execute the new plan over the long-term horizon. In this respect, today ENGIE EPS Group has 115 employees, from 15 nationalities, 1/3 of which with a PhD or an MBA.

R&D investments amounted to €3.1 million, including expenses and capitalized amounts, stable compared to last year (€3.2 million). These investments represent 15% of consolidated revenues confirming once more the strong commitment of ENGIE EPS to R&D and innovation.

Other Operating Expenses increased by 41% amounting to €2.3 million, compared to €1.6 million in 2018. This is mainly due to the growth of the ENGIE EPS structure necessary to support the growth of the business, as well as the need to enhance the process of its integration within ENGIE, in line with the Long Term Strategic Plan.

EBITDA represents a loss of €5.7 million in 2019 (€-5.3 million net of the impact of shutdown of non-core activities) compared to a €4.6 million loss in 2018, due to lower gross margins and the increase in operating expenses is more than offset by the increase in operating expenses.

Selectiveness and focus will be instrumental in the execution of the Long Term strategic Plan. In this respect, the new strategy outlines the necessity for (i) ENGIE EPS and ENGIE to prioritize efforts and resource allocation on the markets where storage is most promising, e.g. with favourable regulation and already announced tenders, (ii) ENGIE to support ENGIE EPS in projects that make sense for both groups, and (iii) the two partners being successful in winning and executing projects.

EBIT as at 31 December 2019 stands at €-15.1 million (€-11.6 million net of the shutdown of non-core activities) compared with €-11.9 million for the previous year. In line with the refocusing under the Long Term Strategic Plan, during 2019 a series of actions were carried out in order to discontinue all non-core activities – in particular the hydrogen business line and the related production capacity – which generated the impairment and the accelerated amortization of development costs, the write-off of

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inventory for €2.4 million and provisions for €1.1 million. Those costs were one-offs related to the implementation of the Long Term Strategic Plan.

Net Result as of 31 December 2019 decreased by 68% compared to 2018, from €-8.7 million to €-14.6 million (€-11.1 million net of the shutdown of non-core activities).

Net Financial Position at the end of 2019 decreased to €-8.1 million compared to €6.8 million on 31 December 2018. The Group obtained a €22.5 million facility from Société Générale, with the support of ENGIE, in order to fund its working capital needs, R&D and capex investments, of which €12.5 million were drawn down in 2019.

7.2 The principal factors affecting performance of the ENGIE EPS Group during the period

The main factors affecting the performance of the ENGIE EPS Group during the analysed period were:

• Investments and commitment of financial resources for R&D, namely the purchase of goods and technical services, and the hiring of qualified personnel both from inside and outside the company, aimed at the developing of several projects as EMS and PMS, project including standardization, optimization, optimization and development of energy storage solutions, e-Mobility with BMS, Power and Control Electronics Development, which required financial resources equal to approx. €3.3 million. In particular, at the end of 2019, €718 k were invested for the improvement of EMS and PMS for the operation of both isolated and grid connected storages, possibly in combination with other types of electrical assets; €516 k were invested for the standardization, optimization and development of energy storage solutions providing ENGIE EPS with a set of products optimized for the rapidly evolving energy storage market, thanks to an accurate work of rationalization, standardization and optimization of existing containerized solutions; €421 k were dedicated to e-Mobility with BMS development; €406 k were invested in the H2 open innovation platform scale up project to develop a solution that can cover not only the needs of the P2P market but also those of the H2 industrial production and the H2 refuelling station for green mobility application; €311 k for Power and Control Electronics Development; €310 k investment was dedicated to computer science and artificial intelligence algorithms development to further improve the techniques used for the development of the ENGIE EPS’ EMS, within the framework of PROPHET project

• Strengthening and enhancement of the human resources structure, resulting in increased personnel costs and the research and selection of highly qualified specialists, both in purely technical areas for both the operational management, administrative and corporate governance. The process started in the second half of 2015, and was still ongoing in 2019, absorbing a financial capacity of approximately €3.5 million in 2017, €4.4 million in 2018 and €6.7 million in 2019 (corresponding to Personnel costs).

• ENGIE EPS Group’s strategy is to secure framework and win long-term framework agreements where the sales cycle may be extended over several months. Some divergences may arise between the closing of these agreements and the record of the corresponding revenues. This could entail, in case of

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significant agreements, a possible volatility of ENGIE EPS Group revenues and cash flows.

• As at 31 December 2019, cash in hand was reported at €6,431 k, compared to €10,861 k as at 31 December 2018 and €4,238 k as at 31 December 2017.

7.3 Post-closing events, December 2019

Listed below are the significant events that occurred between the year end date and the date of this Universal Registration Document.

• FCA’s easy electric charging debuts with easyWallbox by ENGIE Eps: on 26 February 2020, the Company presented with FCA the easyWallbox, patented by ENGIE EPS, exclusively for FCA. The product is the only wallbox that up to 2.2 kW and operating at up to 7.4 kW does not need to be set up by an installer or electrician. Dating back to 2017, the partnership between ENGIE Eps and Fiat Chrysler Automobiles is aimed at managing the changes in the best possible way and at coordinating all work related to electric mobility.

• Microgrid in California: with the contract signed in January 2020, ENGIE EPS Group entered into an agreement as a contractor for the engineering, procurement supply and commissioning of the 2.0 MVA/4.0 MWh BESS to be integrated into Anza Microgrid (California), consisting of an existing 2.0 MWp PV plant and 1.35 MWp further extension. The commissioning and completion of the project is expected in Q4 2020.

• ENGIE EPS’ CEO named Young Global Leader by the World Economic Forum: on 12 March 2020 ENGIE EPS’ Chief Executive Officer, Carlalberto Guglielminotti, has been recognized as a Young Global Leader by the World Economic Forum for his ability to innovate and promote sustainable change. Carlalberto Guglielminotti was identified as one of the world’s most promising and compelling leaders under the age of 40 for his accomplishments in the industrial sector, commitment to the promotion of positive change through technology, and for his achievements in bolstering the use of renewable energy around the world.

• COVID-19: ENGIE EPS Group’s operations and the majority of the supply chain are based in Italy, the country currently at the epicentre of the European outbreak. ENGIE EPS is allowed to continue its activities as it is deemed operating in sectors considered as “essential industries” such as Electrical Systems and Research & Development. However, ENGIE EPS is not currently in a position to quantify the adverse impact, the related consequences for construction sites worldwide (Italy, Mexico, California, Singapore, Comoros, and Greece), nor the scenarios for projects under development (Europe, South Africa, Middle East, US and Pacific Islands). For a detailed description of the COVID-19 impact please also refer to paragraphs 3.4 and 10.3.

No other subsequent events were recorded at the time of publication of this document.

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7.4 Presentation of the principal items of the consolidated income statement and comparison of financial period ended 31 December 2019, 2018 and 2017

The following tables present the principal items of the consolidated income statement for the financial periods ended 31 December 2019, 2018 and 2017:

7.4.1 Revenues and Other Income

Revenues and Other Income amount to €20,205 k increasing by 29% compared to financial year 2018.

The Revenues and Other Income detail is as follow:

Revenues and Other Income for 2019 amount to €20,205 k and are composed of construction contracts for €18,484 k, services rendered to the customers for €1,200 k and Other Income of €521 k.

The following table shows the breakdown of revenues by Product Line:

CONSOLIDATED INCOME STATEMENT(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Revenues 19,684,041 15,540,960 9,898,994

Other Income 520,770 119,721 107,371

TOTAL REVENUES AND OTHER INCOME 20,204,810 15,660,681 10,006,365

Cost of goods sold (14,857,163) (10,983,399) (6,030,347)

GROSS MARGIN FROM SALES 5,347,646.92 4,677,282.29 3,976,018.00

% on Revenues 26.5% 29.9% 40.2%

Personnel costs (6,667,126) (4,352,366) (3,503,332)

Other operating expenses (2,316,539) (1,647,802) (2,102,364)

Other costs for R&D and industrial operations (2,094,303) (3,279,710) (115,026)

EBITDA excluding Stock Option and Incentive Plans expenses (1) (5,730,321) (4,602,596) (1,744,704)

Amortization and depreciation (2,985,304) (1,655,407) (1,276,156)

Impairment and write down (3,592,049) (289,038) (65,174)

Non recurring income and expenses and Integration costs (1,573,472) (2,627,433) (2,576,662)

Stock options and Incentive plans (1,206,490) (2,723,817) (331,539)

EBIT (15,087,635) (11,898,290) (5,994,235)

Net financial income and expenses (312,219) (692,014) (747,538)Revaluation of European Investment Bank warrants liabilities (IFRS 2) and other impacts of EIB loan prepayment 0 3,777,134 (3,086,219)

Income Taxes 755,570 78,532 818,482

NET INCOME (LOSS) (14,644,285) (8,734,637.72) (9,009,510.00)

Attributable to:

Equity holders of the parent company (14,644,285) (8,734,638) (9,009,510)

Non-controlling interests 0 0 0

Basic earnings per share (1.15) (0.83) (1.10)

Weighted average number of ordinary shares outstanding 12,766,860 10,525,521 8,155,295

Diluted earnings per share (1.15) (0.83) (1.10)(1) EBITDA excluding Stock Option and Incentive Plans expenses is not defined by IFRS. It is defined in notes 3.3 and 4.6 of Consolidated Financial Statement

REVENUES AND OTHER INCOME(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Construction contracts 18,484,496 13,600,234 7,863,216

Rendering of services 1,199,545 489,777 403,689

Sales of goods 0 1,450,950 1,632,089

REVENUES 19,684,041 15,540,960 9,898,994

Other Income 520,770 119,721 107,371


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The increase in revenues is the result of the new business model which sees ENGIE EPS moving away from smaller, one-off projects with long development timetables and uncertain outcomes towards larger projects with more predictable outcomes and/or small but replicable solutions for clients with a clear de-carbonization agenda.

The increase in Revenues related to construction contracts is affected by both the previous and current Business Models as they are based on the positive developments of grid support in developed economies and microgrids in islands and in emerging countries – in both cases partnering with ENGIE.

Most of the Revenues related to construction contracts refers to the successful deployment of Sol De Insurgentes in Mexico, a Solar-plus-Storage project in collaboration with ENGIE, as specified above. The project is located in Comondú, Baja California Sur, México with an installed capacity of 23 MWAC/31.2MWp PV plant coupled with 5.4 MW/3.17 MWh of BESS aimed to perform ramp smoothing and primary frequency control.

The remaining portion of Revenues coming from construction contracts are related to significant progress in the application consisting of microgrids such as the Comoros, Italy, Somaliland and New Caledonia.

As a reminder, revenues for 2018 amounted to €15,541 k and were composed of construction contracts for €13,600 k, sales of goods for €1,451 k and services rendered to the customers for €490 k. Main construction contracts in 2018 were related to Grid Support Solutions, Microgrids in Africa and Asia Pacific and Mobility Solutions in Europe.

Rendering of services were mainly related to maintenance and supply of services to telecom operators for which ENGIE EPS Group installed its solutions in the previous years.

Sales of Goods were represented by sales of products, where ENGIE EPS Group is not involved in the system integration or the construction phase.

In 2017 Revenues amounted to €9,899 k and were composed of construction contracts under IAS 11 for €7,863 k, sales of goods for €1,632 k and services rendered to the customers for €404 k.

REVENUES BY PRODUCT LINE(amounts in Euro) Total

Giga Storage 12,770,249

Industrial Solutions 5,489,848

eMobility and Others 479,892

Non-core activities 944,052

TOTAL REVENUES BY PRODUCT LINE 19,684,041

Other Income 520,770

TOTAL REVENUES AND OTHER INCOME 20,204,811

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Other Income increased overall by €401 k from €120 k for the financial year 2018 to €521 k in the financial year 2019 as a result of a collaboration with ENGIE entities as described below:

• Employee Secondment and Consultant agreements with ENGIE entities

• Service agreement - Hydrogen Consultants: ENGIE EPS provides services related to developing renewable hydrogen production assets to ENGIE

• Consultancies for ENGIE on R&D activities: the aim of the project is to test and validate the monitoring system developed by Laborelec on one of the icon plants built by ENGIE EPS last year in Spain for ENDESA.

As a reminder, Other Income amounted to €120 k in 2018 including mainly write-off of payables due to settlement agreements reached with old suppliers and other minor operational incomes and to €107 k in 2017 when it was mainly related to European subsidies for development and research projects.

During 2019, 2018 and 2017 allocation of Revenues and Other Income by single legal entity of the ENGIE EPS Group is:

In the context of the ENGIE EPS Group reorganisation and simplification launched in 2018:

• the majority of operations, including Pipeline of projects, sales and R&D activities have been moved to EPS Elvi;

• Mobility activities related to rail solutions have been moved to ENGIE EPS through its Italian branch;

• all Intellectual Property investments have been carried out by EPS Manufacturing while all other activities have been subject to the transfer of going concern to EPS Elvi; and

• the MCM going concern, mainly related to R&D for external customers, has been transferred to EPS Elvi.

In parallel to the operational activities of EPS Elvi, ENGIE EPS is carrying out its own business development activity for the most important customers, particularly where its status of company listed on the regulated market of Euronext in Paris may have importance. In this respect, ENGIE EPS signed the flagship Technology Partnership Agreement with ENEL Green Power for the construction of the first hydrogen enabled microgrid in Chile, the experimental phase of which was concluded in 2017 and for which maintenance began in 2018. Furthermore, ENGIE EPS is carrying out the activities related to e-Mobility Solutions, and particularly with FCA (please refer to paragraph 7.3).

REVENUES AND OTHER INCOME(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

EPS ELVI 19,306,661 13,906,695 8,755,607

ENGIE EPS 412,125 1,016,931 375,986

EPS Manufacturing 486,025 737,055 832,704

MCM 0 0 42,069

EPS USA 0 0 0


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As anticipated in paragraph 7.1, in 2019 a process of rationalization of ENGIE EPS Group was initiated in order to simplify the organization and reduce G&A costs. The first step of the project was the liquidation of MCM approved on 10 December 2019 and finalized in January 2020.

During 2019, 2018 and 2017, Revenues and Other Income by geographic areas of installation are as follows:

7.4.2 Order Intake, Backlog and Pipeline

Order Intake has reached 37.4 MW, representing approximately €30.3 million for the year ended 31 December 2019. This achievement confirms the effectiveness of ENGIE EPS Group business model in North America and in Europe which has enabled ENGIE EPS Group to accelerate its growth reaching a total of 57 customers in 23 countries across the globe.

Backlog corresponds to €29.5 million as of 19 March 2020, down 18% compared to the revised Backlog communicated on 21 June 2019 (44% if compared to revised Backlog communicated on 14 March 2019). The decrease in Project Backlog is driven by the reduction in order intake due to several significant projects that have been either delayed or not awarded.

Pipeline as of 19 March 2020 represents €686 million and increased by 127% compared to 14 March 2019. Pipeline includes “Guam” where ENGIE EPS has been selected as successful bidder for the construction of two Solar-plus-Storage projects under a 20-year power purchase agreement by the Power Authority of Guam (GPA) and where ENGIE EPS Group is the exclusive storage solution provider. Review of the appeal lodged by another bidder, final approval and formal contract award by the relevant authorities are underway. The appeal review process has however been put on hold due to COVID-19 cases in Guam. We therefore expect further delays for this project to enter the Backlog and we do not have sufficient visibility at present. The Pipeline features prominently other Giga Storage projects where ENGIE is the bidding entity and ENGIE EPS Group is the exclusive storage solution provider.

REVENUES AND OTHER INCOME BY INSTALLATIONS GEOGRAPHICAL AREAS(amounts in Euro)

31/12/2019 31/12/2018 31/12/2017

LATIN AMERICA 12,676,844 34,258 107,186

EUROPE 3,547,571 10,338,017 8,170,843

AFRICA 3,052,673 2,707,250 778,227

ASIA PACIFIC 927,722 2,537,228 750,109

USA 0 43,929 200,000


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The following chart defines Pipeline, Backlog and Order Intake:

The following table shows the Backlog breakdown by geographical areas of installation:

BACKLOG BY GEOGRAPHICAL AREAS OF INSTALLATION

The following table shows the Project Backlog breakdown by Product Line:

BACKLOG BY PRODUCT LINE

The following table shows the Project Backlog breakdown by customer:

BACKLOG BY CUSTOMER

as at 19 March 2020Europe 47%Africa 36%AMERICAS 16%APAC 0%

as at 19 March 2020Giga Storage 10%Industrial Solutions 48%eMobility and Others 39%Other non-core Activities 3%

as at 19 March 2020ENGIE 21%Others 79%

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7.4.3 Cost of goods sold

In 2019, cost of goods and services sold (COGS), which consists of purchases of raw materials and semi-finished and finished products, such as switchboards and electric materials, amounts to €14.857 k (€10,983 k in 2018 and €6,030 k in 2017), and significantly increased because of the growth of ENGIE EPS Group in terms size of the projects.

COGS increased more than proportionally than Revenues due to the transition of ENGIE EPS to a new business model. As a result, the Gross Margin reached 26,5% for the year ended 31 December 2019 while it was 29,9% for the year ended 31 December 2018.

The following table presents the details of the purchases of raw materials, consumables and finished products:

7.4.4 Personnel costs

Personnel costs correspond to the set of fixed and variable items of remuneration paid to employees (including executives), as well as travel and expenses costs, social security contributions and charges linked to pension and related commitments. This item also includes few redundancies and early retirement incentives. Since 2015, the ENGIE EPS Group has undertaken a significant hiring process which was still in progress in 2019, aimed to achieve a top-level and functionally adequate organizational structure, and to make sustainable targeted growth programs, given the Pipeline and company strategic objectives.

Total Personnel Costs increased by €2,315 k, from €4,352 k in financial year 2018 to €6,667 k in financial year 2019.

The overall increase is explained in the following break-down:

• The increase in the number of highly specialized employees where, the total employees as of 31 December 2019 were 110 compared to 100 as at 31 December 2018);

• The increase in social contributions, as a result of changing some Executive Committee Members contracts from Directorship Agreement to Employment Agreement which entails a higher contribution and of increasing in the number of employees;

• Overtime paid and travel hours paid for the activities related to tenders and bid for projects presented during the year. With the new business model, ENGIE EPS will continue to devote its efforts to market intelligence follow up and early origination efforts as well. For a vast majority of utility scale projects, the business development, structuring and preparation of bids will be done by ENGIE Bus;

COST OF GOODS SOLD(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Costs of goods/ Rendering of services (14,857,163) (9,824,158) (4,492,889)

Cost of technology partnership agreements 0 (1,159,241) (1,537,457)

TOTAL COST OF GOODS SOLD (14,857,163) (10,983,400) (6,030,347)

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• The increase in “Employee benefits” and “Other costs” (mainly related to personnel travel costs) by €184 k and €211 k respectively, compared to the financial year 2018 figures. The increase in personnel travel costs correspond to the growth of activities and projects developed by ENGIE EPS in 2019.

The following table details staff costs and their evolution over the relevant financial years:

The total workforce of the ENGIE EPS Group is described in the following table:

7.4.5 Other operating expenses

The details and evolution of the Other Operating Expenses are provided in Note 4.4 to the 2019 Consolidated Financial Statements, Note 4.4 to the 2018 Consolidated Financial Statements and Note 4.4 of the 2017 Consolidated Financial Statements.

2017, 2018 and 2019 have been significant years concerning both R&D efforts (product development and two brand new manufacturing plants) and staff and supportive function growth (new hired highly qualified staff recruiting and hiring). The item Other operating expenses has been focused only on recurring costs and expenses that will most probably occur in coming years. A specific line in the P&L has been added to properly allocate all costs and expenses related to non-recurring events occurred during the relevant periods.

The compensation of the CEO is not included in Other Operating Expenses, but it has been reclassified in the item Personnel costs, because of the business development and operative role he played and still plays.

The Other operating expenses amount to €2,317 k as of 31 December 2019.

The following table details the operating expenses over the relevant financial years:

PERSONNEL COSTS (amounts in Euro) 31/12/2019 31/12/2018* 31/12/2017

Salaries and wages (3,918,439) (2,653,217) (2,386,933)

Social contributions (979,946) (324,645) (348,556)

Employee benefits service costs (626,973) (443,411) (272,343)

Other Costs (1,141,768) (931,093) (495,500)

TOTAL PERSONNEL COSTS (6,667,126) (4,352,366) (3,503,332)

* In order to be clear and comprehensive, 143,682€ of Salaries and wages in FY 2018 has been reclassified in Social contributions

Number of FTE at period end 31/12/2019 31/12/2018 31/12/2017

ENGIE EPS 7 12 -

EPS Manufacturing 2 2 2

EPS Elvi 92 83 90

MCM - - -

EPS USA - - -

TOTAL FTE AT PERIOD END 101 97 92

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The increase in “Other Operating Expenses” is mainly due to the development of the ENGIE EPS structure necessary to support the growth of the business as well as the need to enhance the process of integration in ENGIE. Main increases are related to Communication and Travel expenses due to both, business opportunities and institutional events. The significative reduction in Rents is related to the application of the new IFRS 16 principle.

7.4.6 Other costs for research and development and industrial operations

ENGIE EPS Group uses a reclassification of operating costs that cannot be considered as structure costs as they are related to installation activities and R&D of new products that will be sold in future years. In order to be clear and comprehensive, Installation costs incurred in 2017 accounted under Other operating expenses have been reclassed to Other costs for R&D and industrial operations, amounting to €718 k.

The cost of R&D and industrial operations are as follows:

Industrial operations costs as at 31 December 2019 amount to €2,094 k while were €3,280 k as at 31 December 2018.

The decrease in Industrial operations is once again due to the new business model in which the EPC activities have been deeply reviewed and refocused.

Indeed, EPC activities will be done in collaboration with ENGIE and won’t continue to be a core-activity of ENGIE EPS.

The impact of Not capitalized R&D costs is €19 k during financial year 2019, while was equal to €208 k as at 31 December 2018. This item is related to cost of goods and services that given their nature, have not been classified to be capitalized in accordance with IFRS. They refer to costs whose economic and financial effectiveness had been limited, prudentially booked at cost during the relevant

OTHER OPERATING EXPENSES 31/12/2019 31/12/2018 31/12/2017

(amounts in Euro)

Communication & Travel (508,799) (221,000) 0

Legal and other consultancy costs (500,723) (203,816) (102,252)

Maintenance (297,767) (182,780) (137,472)

Miscellaneous (223,300) (80,138) (375,874)

Tax and administrative services (171,635) (129,861) (95,920)

Rents (155,950) (414,529) (324,542)

Audit services (134,107) (97,548) (99,000)

Safety (114,144) (18,204)

Board compensation (83,425) (113,772) (118,000)

Software licenses (55,509) (53,444) 0

Bank commissions (31,933) (26,984) (18,853)

Indirect taxes (24,637) (4,591) (23,218)

Insurance (14,612) (101,136) (126,785)

TOTAL OTHER OPERATING EXPENSES (2,316,539) (1,647,803) (1,421,915)

OTHER COSTS FOR R&D AND INDUSTRIAL OPERATIONS(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Industrial operations costs (2,075,598) (3,071,228) (115,026)

Not capitalized R&D costs (18,705) (208,482) (717,574)

TOTAL OTHER COSTS FOR R&D AND INDUSTRIAL OPERATIONS (2,094,303) (3,279,710) (832,600)

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periods, as from an economic and finance perspective they will not have any impact in subsequent years.

7.4.7 EBITDA (excluding Stock Option and 2018 Incentive Plans expenses)

Financial year 2019 Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is a non-IFRS defined metric which excludes non-recurring income-expenses and the accounting impact of stock options and incentive plans. The EBITDA (excluding Stock Option and Incentive Plans) amounts to €-5,730 k for the financial year 2019, €-4,603 k of the financial year 2018 and €-1,745 k of the financial year 2017.

This result, mainly driven by the major commitment in R&D, perfectly in line with the planned growth of the internal organizational structure and the execution of ENGIE EPS’ Long-Term Strategic Plan, is justified by the increase in Personnel costs and Other Operating Expenses. This effect is partially offset by the impact of IFRS 16 application under which the expense related to long term rents is eliminated and replaced by the depreciation of the right-of-use asset and financial interests.

EBITDA as at 31 December 2019 decreased by 25%. The Group also refers to the “EBITDA excluding shut-down” which excluded also the Inventory write-off linked to the shutdown and classified as extraordinary costs in financial year 2019 and that won’t be repeated in the following years as reported in the new ENGIE EPS Business Model.

The total impact of Inventory write-off in financial year 2019 amounts to €394 k and “EBITDA excluding shut-down” amounts to €-5,336 k, decreased by 16% compared to financial year 2018.

7.4.8 2018 Incentive Plans

The line refers to the accrual of 2018 Incentive Plans for employees and management. In accordance with the 2018 Incentive Plan adopted on 6 March 2018, stock options and Warrants plans have been replaced with Stock Appreciation Right, and, where applicable, Additional Stock Appreciation Rights (“Additional SARs”). On 28 September 2018, the Board of Director approved a new plan for a total number of 510,000 SARs of which 255,000 were allocated as at 31 December 2018 neither to Board Members nor mandataires sociaux.

Following this new plan:

• the previously vested stock options and Warrants have been exercised during the simplified tender by ENGIE (through its subsidiary GDF International) except for 200,000 vested stock options granted to the CEO which were replaced by SARs. The

EBITDA excluding shut-down 31/12/2019 31/12/2018 31/12/2017

EBITDA (5,730,321) (4,602,596) (1,744,704)

Inventory Write-off 394,032 0 0

Total EBITDA excluding shut-down (5,336,288) (4,602,596) (1,744,704)

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previously vested stock options and Warrants not exercised have been waived by their beneficiaries;

• the previously unvested stock options and Warrants were replaced by Transformed SARs on a one-to-one basis – different SARs matching the strike prices of the different previously existing stock options or Warrants are not subject to any performance conditions and are only linked to the condition of presence within the ENGIE EPS Group;

• in addition, Additional SARs with special characteristics, including performance conditions, linked to the achievement of revenue and EBITDA levels consistent with the 2020 Strategic Plan and the Company's retention rates for 2018 to 2020, were distributed to the CEO and other managers.

The SARs and the Additional SARs provide a new vesting period and benefit from a floor price of €9.50 adjusted to €8.87 as a result of the capital increase operation realized in August 2018.

In view of the granted SARs’ features and a settlement of the benefits that will be made in cash instead of equity instruments, this plan is qualified as “cash-settled” according to IFRS 2.

See note 4.10 to the 2019 Consolidated Financial Statements for a description of the accounting and the dilutive impact of the 2018 Incentive Plans.

7.4.9 Amortisation and depreciation

Amortisations correspond principally to the amortisation of technical installations, equipment and electronic materials and to items of Intellectual Property of ENGIE EPS Group. In 2017 the item amounted to €1,276 k, while it increased up to €1,655 k in 2018 and €2,985 k in 2019.

Compared to financial year 2018, this item increased by €1,330 k, from €1,655 k to €2,985 k.

The useful life of Intangible assets was recalculated so as to reflect the termination date of the related business project in Backlog which resulted in a need to accelerate the amortization process. Total impact of acceleration in amortization amounts to €646 k.

As these projects don’t play a part in the core-activities of the business, their absence will not affect the forecasted revenues over the next years.

Furthermore, the increase in “Amortization” costs reported at 31 December 2019 is mainly due to following main reasons:

• Investment for the improvement of EMS (Energy Management System) and PMS (Power Management System): this project stems from the need to improve the present Energy and Power

AMORTIZATION AND DEPRECIATION (amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Amortization (2,343,892) (1,415,677) (1,077,076)

Depreciation (641,412) (239,730) (199,080)

TOTAL AMORTIZATION AND DEPRECIATION (2,985,304) (1,655,407) (1,276,156)

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Management Systems for the operation of both isolated and grid connected storages, possibly in combination with other types of electrical assets. Moreover, newer and more stringent grid codes, efficiency and robustness requirements demand, to overhaul the present plant controller architecture;

• Investment for the energy storage products development: the project includes standardization, optimization and development of energy storage solutions that will guarantee ENGIE EPS to be more competitive in terms of performance and cost; This project provided ENGIE EPS with a set of products optimized for the rapidly evolving energy storage market, thanks to an accurate work of rationalization, standardization and optimization of existing containerized solutions. The result of this investment saw ENGIE EPS solutions become morecompetitive, thanks to a sensible cost reduction and a boost in power and Energy Density. The maximum power in a 40ft container (PowerHouse) was increased from 3,6 MW to 14,4 MW, while the maximum energy in a 40ft container increased from about 2 MWh to more than 5 MWh;

• Investment in e-Mobility with BMS development: the project will exploit the value of EV batteries in providing energy and power services to the grid (V2G applications). To this end, a reliable ageing model and a real time battery model will be developed and integrated into a modular advanced battery system. Thanks to ENGIE EPS’ know-how, different innovative solutions were developed which helped it to break into the emerging e-Mobility sector. In the endan innovative centralized solution for EV parking recharging infrastructure (EVHouse) was designed, which will be soon deployed into an FCA plant. Leveraging on EVHouse technology, ENGIE EPS will be able to bid in the Fast Reserve Unit (FRU) project, a Frequency Regulation project by TERNA S. p. A., using its unique vehicle-to-the-grid technology;

• Investment in the H2 open innovation platform scale up project: the project aims to develop a solution that can cover not only the needs of the P2P market but also those of the H2 industrial production and the H2 refuelling station for green mobility application;

• Investment for Power and Control Electronics Development: the project cover mainly the bottom level of ENGIE Eps vertical integration, providing the fundamental bricks for the whole system. The development of innovative technologies for power and control electronics is aimed at enabling the design of new products in the fast-growing sectors such as PCS, e-Mobility, predictive diagnostics, as well as energy storage systems, both stationary and distributed on EV;

• Investment in computer science and artificial intelligence algorithms development: the most important goal is to further improve the techniques used for the development of the ENGIE EPS’ EMS, within the framework of PROPHET project. The new EMS is based

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on mathematical optimization, predictors (as load and photovoltaic forecasters), adaptive functionalities and real time updating of the constraints. Another vital direction is to provide a software dashboard which will help supervise and monitor the plant and the assets in the portfolio;

• Investment for the enterprise resource planning development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by the ENGIE EPS;

• Investment for the development of power electronics, e-Mobility and standardized product solutions. In short, this development corresponds to the new 100kW - 1500 VDC inverter;

• Investment in the Prophet project. The main goal of this project is to develop and improve the control predictive algorithm for a multi-DER microgrid. The new optimized control will ensure secure microgrid operation and reduce the energy cost, making the best use of renewable generation and storage capability. Moreover, the project will investigate the impact on the grid given by the introduction of EVs, their optimal management in terms of charging, grid services they can offer and how they can create business cases in the microgrid context. The technical studies and the software developments already had a practical validation, since all the enhanced algorithms have been tested on a multi-good microgrid installed at the Energy Department of the Politecnico di Milano. The main activities under study have already been outlined in the ENGIE EPS technology roadmap:

− optimization algorithms and control predictive functions;

− distributed Smart Storage for behind-the-meter grid services;

− distributed Smart Generation for multi-services and multi-revenues optimization;

− Virtual Power Plant (“VPP”): transform a microgrid into a Power Plant;

− Vehicle-to-the-Grid (“V2G”) to transform a car into a revenue generating asset; and

− Electric and Hybrid Vehicles fast charging, to study the impact of future Electric and Hybrid Vehicles charging.

The increase in “Amortization” costs reported at 31 December 2018 was mainly due to following main reasons:

• investment in the Prophet project.

• investment for the improvement of HyESS® platform that will enable ENGIE EPS to face the DER evolution and support (i) the new role of the algorithms in light of data predictors, (ii) the machine learning and Artificial Intelligence, (iii) VPP and (iv) Electric and

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Hybrid Vehicles integration in smart grid. Development realised in 2018 mainly consists in the further development of the Hydrogen Module integrated in HyESS®;

• development on power electronics, e-Mobility and standardised product solutions. In detail this development regards new C-BESS-900, C PV-900 and 100kW - 1500 VDC inverter and the design of new standard containers suitable for applications of grid-scale storage and big-scale solar plant;

• ERP development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by ENGIE EPS; and

• new patents and licenses.

The Amortization and depreciation costs reported at 31 December 2017 was mainly related to:

• R&D investments for the improvement of HyESS®, in particular the design review of HyESS® platform, the development of Power Quality project to adapt firmware already used in PCS to HyESS® technology and have access to the market of application for big industrials, the development of a control system for a multi-DER microgrid supplying heat and electricity in order to ensure its secure and efficient operation in the presence of high penetration of renewable generations;

• R&D developing expenses capitalized on power electronics and e-Mobility solutions and in detail new CBESS-900, C PV-900 and 100kW - 1500 VDC inverter suitable for applications of grid-scale storage and big-scale solar plant;

• further development on Hydrogen Module integrated in HyESS®;

• capitalized expenses on Enterprise Resource Planning development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by the ENGIE EPS Group;

• new patents and licenses.

7.4.10 Impairment and write down

The depreciation (or appreciation) of assets corresponds principally to the loss/gain of value which may result from the value tests carried out on assets constituted by the equipment, inventories, intangible assets or debts held by ENGIE EPS.

During 2019, ENGIE EPS’ top management precisely defined the Product Lines on which the Company will develop the business in the coming years. For this reason, the management has deemed it appropriate to carry out action related to the 2015-2017 R&D Plan investments considering only the R&D projects that could affect the projects included in the forward-looking business strategy.

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For this reason, the new business model has brought about a strong increase of impairment mainly related to Hydrogen activities not included in the new restructuring.

In 2019 the items amount to €3,592 k while it was €289 k in 2018 and €65 k in 2017.

The chart below shows Impairment and write down as of 31 December 2019 compared with previous period

No impairment loss was identified by the Group as of 31 December 2019 on the goodwill (amounting to €1,569 k) emerging from the acquisitions of EPS Elvi and MCM in 2016.

In 2018 the write down was €289 k while in 2017 was €65 k. The write-down mainly corresponded to future completion costs on Telecom construction contract.

7.4.11 Non-recurring and income expenses

This item includes expenses considered as non-recurring as those mainly related to specific phases of company growth and setting up of the accounting, administration and business development departments. These operating income and expenses cannot be qualified as exceptional or extraordinary, but still they are linked to unusual and infrequent elements, for significant amounts, presented by ENGIE EPS Group on a separate line, in order to facilitate the understanding of the current operating activity.

In 2019 the items amount to €1,573 k while it was €2,627 k in 2018 and €2,577 k in 2017.

Compared to financial year 2018, this item decreased by €1,054 k, from €2,627 k to €1,573 k in financial year 2019.

IMPAIRMENT AND WRITE DOWN (amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Impairment of Hydrogen assets (1,386,700) 0 0

Business shut-down (1,084,380) 0 0

Bad debt provision (739,969) 0 0

Provison for risks on R&D projects completion (334,000) 0 0

Future completion cost on project (47,000) (289,038) (56,711)

Write down on assets 0 0 (8,463)

TOTAL IMPAIRMENT AND WRITE DOWN (3,592,049) (289,038) (65,174)

NON RECURRING INCOME AND EXPENSES(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Non recurring Legal Accounting & Certification (603,956) (247,025) (915,124)

M&A costs (312,216) (1,385,218) 0

Origination and Development Costs (297,576) 0 0

Non recurring integration expenses (220,202) (212,594) 0

Non recurring Distribution & Business dev. Expenses (75,284) (429,181) (1,021,707)

Non recurring expenses for R&D activities (35,000) (4,700) (99,388)

Other (29,238) (43,938) (75,917)

Non recurring Travel, Communication and Roadshow expenses 0 (256,709) (427,521)

Non recurring settlement / redundancy 0 (48,069) (37,006)

TOTAL NON RECURRING INCOME AND EXPENSES (1,573,472) (2,627,433) (2,576,662)

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As mentioned above, these costs are not representative of the Group’s ordinary activity although they may have occurred in the past year and they are likely to occur again in future years.

“Non-recurring expenses” decrease is connected to unusual and infrequent nature of the items here classified.

During the financial year 2018, ENGIE EPS, despite the effort dedicated to the M&A operations that distinguished that period (i.e. ENGIE Acquisition and subsequent capital increase), continued to stay focused on the growth of revenues both with the scale-up on project contracts (e.g. the first construction on a 20MW utility-scale storage system in Spain completed during the second half of 2017), and the startup of new projects such as in the Comoros, Somalia, New Caledonia and Singapore; achievements that have been reached thanks to the strong collaboration with ENGIE. More importantly, growth is also due to grid-connected solutions in Europe mainly driven by the 24 MW of storage systems that went online in Spain, Italy and Belgium.

In 2018, Non-recurring income and expenses are mainly characterized by non-recurring M&A costs linked to the ENGIE Acquisition and capital increase operation amounting to €1,385 k. External partners support for the set-up of the business development international platform decreased from €1,022 k in 2017 to €429 k in 2018. A strong reduction of non-recurring travel, communication and roadshow expenses, legal, accounting and certification expenses can also be highlighted in 2018 with respect to previous periods. As a consequence of the ENGIE Acquisition, non-recurring costs with a total value of €213 k related to the integration in the ENGIE Group have been recorded.

As mentioned above, these costs are not representative of the ENGIE EPS Group’s ordinary activity although they may have occurred in the past years and they are likely to occur again in future years.

2017 was characterized by a growth in the size of ENGIE EPS’ contracts (e.g. the first construction on a 20MW utility-scale storage system in Spain and the commissioning of a 12 MW microgrid powering an entire mining site in Australia), during which Order Intake rose to €16.6 million thanks to development of new business opportunities. Internal functions were restructured and the ENGIE EPS Group set up of a new certified Integrated Management System in parallel with an intense due diligence process in the context of the ENGIE Acquisition.

7.4.12 EBIT

Earnings Before Interest and Taxes (“EBIT”) is a loss of €15,088 k while was a loss of €11,898 k in 2018 and of €5,994 k in 2017.

This result is mainly due to a negative impact of:

• Impairment on Intangibles assets of €1,387 k

• Non-core activities shut-down of €1,084 k

• Non-recurring expenses of €1,564 k

• Fair value of Incentive Plans of €1,206 k

• Inventory write-off of €394 k

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• Provision for risks on R&D projects completion of €334 k

• Accelerated amortization of €311 k

EBIT as at 31 December 2019 decreased by 27%; however, the Group also refers to the EBIT excluding shut-down that doesn’t include the total negative impact of shut-down in financial year 2019, as they have been classified as extraordinary costs and won’t be repeated in the following years as reported in the new ENGIE EPS Business Model.

The total impact of shut-down in financial year 2019 amounts to €3,511 k and EBIT excluding shut-down amounts to €-11,577 k, increased by 3% compared to financial year 2018.

7.4.13 Net Financial Income and expenses

The item includes interests and charges on bank accounts and other financing, exchange rate differences on extra EU trades.

Financial interests linked to the other credit lines in place amount to €312 k, a decrease with respect to the financial year 2018 notwithstanding the impact of IFRS 16 application.

As a reminder, in 2018 the cost of interests were affected by EIB loan financial expenses (€328 k). The loan has been completely repaid during 2018.

EBIT excluding shut-down 31/12/2019 31/12/2018 31/12/2017

EBIT (15,087,635) (11,898,290) (5,994,235)

Impairment on Intangible Assets 1,386,700 0 0

Business Shut-down 1,084,380 0 0


Provison for risks on R&D projects completion 334,000 0 0

Accelerated Amortization 311,397 0 0

Total EBIT excluding shut-down (11,577,126) (11,898,290) (5,994,235)

NET FINANCIAL INCOME AND EXPENSES(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Financial interest (236,481) (345,127) (746,888)

Financial interest related to IFRS 16 (45,512) 0 0

Net exchange differences (40,126) (18,537) (886)

Financial income 9,900 357,655 4,465,859

Financial expenses EIB loan 0 (686,005) 0

Impairment on investment in other companies 0 0 0

Financial expenses EIB warrants 0 0 (4,465,623)

TOTAL NET FINANCIAL INCOME AND EXPENSES (312,219) (692,014) (747,538)

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7.4.14 Taxes

In 2019 the item includes income and deferred taxes for an amount of €756 k (€79 k for the financial year 2018). The increase is mainly due to tax assets registered in 2019 in light of the Decree 27.05.15 issued by the Ministry of Economics and Finance (Industria 4.0 National Plan) for €746 k.

The same effect was present in 2017, when the item was positive for €818 k and includes income and deferred taxes and the tax assets registered in the light of the Decree 27.05.15 issued by the Italian Ministry of Economics and Finance (Industria 4.0 National Plan) for an amount of €720 k.

Any Deferred Tax Asset (“DTA”) has been accounted for financial year 2019.

7.4.15 Net profit

The net loss amounted to €14,644 k at the end of 2019 while was €8,735 k at the end of 2018 and €9,010 k at the end of 2017.

Net loss as at 31 December 2019 decreased by 68%; however, the Group also refers to the Net Loss excluding shut-down that doesn’t include the total negative impact of shut-down as described in section 7.4.11, as they have been classed as extraordinary costs and won’t be repeated in the following years as reported in the new ENGIE EPS Business Model.

Looking back at the Adjusted Net Loss as at 31 December 2018 shows that it doesn’t include the positive effect of revaluation of EIB Warrants liabilities (IFRS 2) for €3,777 k and as result amounts to €12,512 k.

The Net Loss excluding shut-down in financial year 2019 amounts to €-11,134 k

TAXES(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Current taxes

IRES (1,586) (135) (1,402)

IRAP 0 (19,892) 484

Other income taxes 753,183 7,768 719,765

Deferred taxes

IRES 3,973 90,791 118,852

IRAP 0 0 (19,217)

TOTAL INCOME TAXES 755,569 78,532 818,482

NET LOSS excluding shut-down 31/12/2019 31/12/2018 31/12/2017

NET INCOME (LOSS) (14,644,285) (8,734,638) (9,009,510)

Impairment on Intangible Assets 1,386,700 0 0

Business Shut-down 1,084,380 0 0


Provison for risks on R&D projects completion 334,000 0 0

Accelerated Amortization 311,397 0 0 Revaluation of European Investment Bank warrants liabilities (IFRS 2) and other impacts of EIB loan prepayment 0 (3,777,134) 3,086,219

Total NET LOSS excluding shut-down (11,133,775) (12,511,771) (5,923,291)

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and increased by 11% compared to €-12,512 k in financial year 2018.

7.5 Results of the Company

The activity performed during the past financial year resulted in a turnover of €5,424 k compared to €3,187 k for the previous fiscal year, with an increase of 70%.

Total operating expenses in 2019 amounted to €7,275 k after provisions and depreciation for €350 k.

The total cost of personnel, including social security contributions, amounts to €659 k while it was €705 k in 2018. The decrease is mainly related to the lower amount of SARs paid during the year.

The operating result amounted to €-1,846 k compared to €-2,822 k for the previous financial year, marking an improvement of 35%.

The financial result, amounting to €-11,056 k, compared to €82 k for the previous financial year, shows a result before taxes amounting to €-12,902 k compared to €-2,740 k as of 31 December 2018.

The extraordinary result in 2019 amounts to €-929 k, compared with €353 k for the previous year.

No income tax was accounted for this year.

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7.5.1 Balance sheet

ASSETS Gross ValueAmortisation

and depreciation

31/12/2019 31/12/2018

Intangible assetsPatents 115,210 59,682 55,527 75,817 Goodwill 213,538 213,538 - 213,538 Other intangible assets 401,910 27,602 374,309 374,190 Financial assets - - - - Investment in other companies 59,891,379 13,480,457 46,410,922 57,637,996 Other non current financial assets 419 - 419 300 TOTAL NON CURRENT ASSETS 60,622,456 13,781,279 46,841,177 58,301,841 Inventories - - - - Work in progress 374,850 - 374,850 374,850 Receivables - - - - Trade receivables 9,275,278 288,210 8,987,068 4,827,192 Credit notes from suppliers 60 - 60 3,510 VAT receivables 180,405 - 180,405 254,502 Other current receivables 23,100,174 136,662 22,963,513 10,573,355 Other - - - - Cash and cash equivalents 3,134,575 - 3,134,575 8,061,370 Prepayments and accrued income - - - - Prepaid expenses 34,929 - 34,929 43,398 TOTAL CURRENT ASSETS 36,100,271 424,872 35,675,399 24,138,177 Translation differences 9,286 - 9,286 - TOTAL ASSETS 96,732,013 14,206,151 82,525,862 82,440,018

LIABILITIES 31/12/2019 31/12/2018Issued capital 2,553,372 2,553,372Share premium 83,811,019 83,811,019Retained earnings (10,352,826) (7,966,221)Profit (Loss) of the period (13,831,595) (2,386,604)NET EQUITY 62,179,970 76,011,565Risk provision 698,326 0Total risk provision 698,326 0Financial liabilities 0 0Loans and debts with credit institutions 12,500,000 0Financial liabilities with subsidiaries 15,000 113,772Current liabilities 0 0Trade liabilities 5,416,747 4,407,786Social security and tax debts 375,820 382,905Other debts 0 0Other debts 1,309,542 1,488,194Deferred revenue 30,458 34,953DEBT 19,647,566 6,427,609Translation differences 0 843TOTAL LIABILITIES 82,525,862 82,440,017

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7.5.2 Income statement

31/12/2019 31/12/2018Revenues France ExportationsVentes de marchandisesSales of goods 236,260 236,260 776,457Sales of services 5,187,996 5,187,996 2,410,695Total turnover - 5,424,256 5,424,256 3,187,152 Work in progress 374,850 Reversals of provisions (and depreciation), transfers of chargesOther products 4,773 719 Total operating income 5,429,029 3,562,721 Purchases of raw materials and other products 112,804 764,031 Other purchases and external charges 5,790,246 4,539,889 Taxes and other fees 3,759 713 Wages and salaries 453,439 528,990 Social contribution 205,716 176,194 Depretiation and amortization– Amortization on capitalized assets 349,687 12,933 Other expenses 359,407 361,517 Total operating expenses 7,275,058 6,384,267 TOTAL OPERATING RESULT - 1,846,029 - 2,821,546 Financial income from participation 276,942 85,600 Total financial income 276,942 85,600 Amortization and impairment losses 11,227,074 Expenses on exchange difference 4,059 Total financial expenses 11,333,269 4,059 FINANCIAL RESULT - 11,056,327 81,541 TOTAL CURRENT RESULT - 12,902,356 - 2,740,005 Reversals of provisions and depreciation and transfers of charges 358,000 Exceptional income - 358,000 On operating results 929,240 On capital transactions 224 Depreciation, amortization and provisions 4,376 Exceptional expenses 929,240 4,600 TOTAL EXEPTIONAL RESULT - 929,240 353,400 Total revenues 5,705,972 4,006,321 Total expenses 19,537,567 6,392,925 NET INCOME OR LOSS - 13,831,595 - 2,386,604

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7.5.3 Company’s results for each of the last five fiscal years

7.5.4 Activity of subsidiaries

The main subsidiary of ENGIE EPS is EPS Elvi Energy. 2019 turnover of EPS Elvi Energy (after elimination of group intercompany operations) amounts to €18,834 k.

7.5.5 Non deductible expenses

In 2019, ENGIE EPS did not supported any non-deductible expenses (article 223 of the French Tax Code)

2015 2016 2017 2018 2019

Share capital as of the end of the financial year

Share capital 1,576,361 1,576,361 1,687,926 2,553,372 2,553,372

Number of existing ordinary shares 7,881,807 7,881,807 8,439,629 12,766,860 12,766,860

Operations and results of the financial year

Turnover (excluding taxes) 1,874,887 1,417,044 3,187,152 5,424,256

Result before taxes, amortization and provisions (2,487,347) (1,763,130) (1,319,986) (2,369,296) (2,604,521)

Result after taxes, amortization and provisions (2,487,347) (1,966,591) (3,497,783) (2,386,604) (13,831,595)

Results per share

Result after taxes, before amortization and provisions (0.32) (0.22) (0.16) (0.19) (0.20)

Result after taxes, amortization and provisions (0.32) (0.25) (0.41) (0.19) (1.08)

Dividend per share 0 0 0 0 0

EMPLOYEES

Number of employees 0 0 0 9 7

Total payroll 528,990 453,439Amount of the sums paid as social benefits (social security, charity, etc.)

38,500 23,600 176,194 205,716

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7.5.6 Table payments delays clients/suppliers

Article D. 441-4 I. - 1° : Invoices received not paid on the closing date of the financial year which has expired

Article D. 441-4 I. - 2° : Invoices issued that have not been paid at the end of the financial year for which the term has

expired

Not Expired 1 to 30 31 to 60 61 to 90 91 et

plus Total

expired Not

Expired 1 to 30 31 to 60 61 to 90 91 et plus Total expired

(A) Tranches de retard de paiement

Number of invoices 22 25 3 4

Total amount excluding tax of the invoices concerned 199,276 28,417 44,665 194,494 18,679 286,255 125,604 0 0 0 2,321,168 2,321,168

Percentage of total amount of purchases excluding tax for the year

4,57% 0.65% 1.02% 4.46% 0.46% 6.59%

Percentage of turnover excluding tax for the year 2.75% 50.74% 50.74%

(B) Invoices excluded from (A) relating to disputed or unrecognized debts and receivables

Number of invoices excluded 1

Total amount of the invoices excluded 288,210

(C) Payment terms used (contractual or legal deadline - art L. 441-10 and L. 441-11 of the French commercial code)

Contractual or legal deadline - art L. 441-10 and L. 441-11 of the French commercial code)

X Legal X Legal

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8 CASH FLOW AND SHARE CAPITAL OF THE ENGIE EPS GROUP

The principal events affecting the cash flow and the capital structure of the ENGIE EPS Group’s balance sheet during the financial year 2019 are:

• Repayment of instalments of Intesa Sanpaolo, Unicredit and Sella medium-long term loans and Intesa short term working capital financing for an aggregate amount of €3,068 k (please refer to Note 4.28 of the Consolidated Financial Statements presented in the Annex 1 for further details);

• Other investments in tangible and intangible assets for €3,565 k (of which investments in projects of development for €3,288 k); and

• Change in working capital at 31 December 2019 is €6,363 k.

As a reminder, the principal events affecting the cash flow and the structure of the ENGIE EPS Group’s balance sheet during the financial year 2018 were:

• Repayment of instalments of Intesa Sanpaolo, Unicredit and Sella medium-long term loan and Intesa short term working capital financing for an amount of €2,304 k;

• Capital increase of €30,258 k, €28,931 k for the Right Issue (net of the related expenses) and €1,327 k for the exercise of Stock Options and Warrants;

• On 6 September 2018, in compliance with the prepayment agreement signed with the EIB, ENGIE EPS proceeded with the early repayment the EIB Financing for a total amount of €10 million;

• Other investment in tangible and intangible assets for €3,917 k (of which investments in projects of development for €3.2 million of which €2.9 million capitalized); and

• Change in working capital at 31 December 2018 for €4,049 k.

In 2017, the main events affecting the cash flow and the balance sheet structure of the ENGIE EPS Group were:

• Disbursement, on 29 June 2017, of the first tranche of €10 million of the equity-linked financing of up to €30 million with the EIB, guaranteed EFSI;

• signing of a 20MW Contract with Endesa, the Spanish utility part of the Enel group, for the supply of an Energy Storage System (ESS), with a power capacity of 20 MW and a lifetime of 8 years. The project financial structure required a significant investment in working capital (about €3 million);

• Investments in projects of development for €2.6 million; • other investment in tangible and intangible assets for €250 k; and • change in working capital at 31 December 2017 is €-5,821 k.

8.1 Financial sources of the ENGIE EPS Group

As of 31 December 2019, the ENGIE EPS Group equity amounts to €2,337 k. The decrease of €14,962 k compared with 2018 (when it was €17,298 k in 2018) is mainly attributable to:

• the losses recorded during the financial year 2019 for €14,644 k; • the reclassification of reserves for Stock Options and Warrants (€-182 k); • changes in other comprehensive income and other movements amounting to €-

128 k.

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Since its creation and until 31 December 2019 the ENGIE EPS Group has principally been financed by:

• financings from shareholders in the form of private cash capital increase; • access to public capital market in April (IPO 2015), December 2015 and August

2018; • conversion of convertible bonds into shares (before IPO); • current account advances (before IPO); • supplier credits (before IPO); • bank loans as further detailed (starting from H2 2016).

To further support Group’s growth, the ENGIE EPS Group has obtained the following bank financing in 2017, 2018 and 2019 (and which are still outstanding or available, as the case maybe, as of the date of this Universal Registration Document):

• In H2 2017 the short-term credit lines issued by Intesa Sanpaolo have been reduced to €1.3 million and new guarantee facilities for €1.7 million have been released by the same financial institution in order to ensure the issuance of performance bonds related to ENGIE EPS projects. Intesa Sanpaolo requested cash collaterals, for a total aggregate amount of €0.9 million.

• On 6 March 2018, Intesa Sanpaolo, approved an additional €3 million working capital facility to support the ENGIE EPS Group’s growth. This working capital facility, related to the 20MW Contract with Enel, was granted with a cash collateral for an amount of €1.5 million then reduced to €0.9 million. This amount has been completely repaid before the end of 2018 once the project has been completed.

• In February 2019, Intesa Sanpaolo approved, subject to customary condition precedents for ENGIE group companies, additional €7.5 million of additional facilities for R&D. This amount wasn’t actually erogated since a similar loan agreement was signed with Société Générale during 2019 (as specified in the following paragraphs).

• In March 2019, Unicredit approved a short-term credit line of €1.6 million to provide additional working capital for the project Lifou. This amount has been completely repaid during 2019.

In addition, ENGIE EPS Group benefits from the financial support of ENGIE :

• In 2019, ENGIE has confirmed its strong support for the new refocus strategy announced by the ENGIE EPS Group, including the ENGIE EPS Group in the scope of the Renewables Global Business Line and meeting the ENGIE EPS Group’ short term cash needs and working capital exposure in form of intercompany lending.

• On 28 May 2019, thanks to ENGIE support, the ENGIE EPS Group obtained €7.5 million credit line from Société Générale, in the form of a 4-year revolving credit facility in order to fund its working capital needs, R&D and capex investments. On 20 December 2019, ENGIE EPS Group entered in another identical agreement for an amount of €15 million. At the end of 2019, total outstanding debt under these Société Générale facilities was €12.5 million. It has to be noted that it wouldn’t be possible to ENGIE EPS Group obtain such credit lines relying on its own credit profile.

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8.2 Net financial position

Total cash and cash equivalents as at 31 December 2019 is €6.4 million compare to €10.9 million as at December 2018 and €4.2 million as at December 2017. A portion of the liquid assets serves as cash collateral to guarantee financings received by the ENGIE EPS Group or bond issued in favour of third parties. The ENGIE EPS Group considers that €1.3 million of this cash collateral is liquid to the extent that the release of the guarantees is under its control.

The decrease in the Net Financial Position during the last period reflects working capital needs generated by the growth in orders and revenues (as anticipated in paragraph 8.1, €-6.6 million in change in working capital) as well as the investments made by the ENGIE EPS Group to set up the current industrial footprint, product industrialization and business results. The cash needs have been mainly financed by the shareholders, Société Générale and Intesa Sanpaolo.

Net financial position as at 31 December 2019 is negative for €8.1 million; however, the ENGIE EPS Group also uses the Adjusted Net Financial Position that considers the VAT receivable outstanding for €1.5 million and the negative net outstanding amount of trade working capital for €3.1 million, resulting in total €-3.5 million

Net Financial position (amounts in €) 2019 2018 2017

Cash and cash equivalent 6,431,376 10,860,527 4,237,540

Cash at banks and petty cash 6,431,376 10,860,527 4,237,540

Net financial debts (14,532,179) (4,050,863) (16,557,841)

Current financial liabilities (1,277,274) (2,240,696) (3,154,739)

Non current financial liabilities (13,254,905) (1,810,167) (13,403,102)

Impact of EIB Warrants (IFRS 2) 0 0 (3,086,219)

Net financial position * (8,100,803) 6,809,664 (15,406,520)

* In 2017 "Net financial posicion after the impact of EIB Warrants (IFRS 2)"

ADJUSTED NET FINANCIAL POSITION (amounts in €) Full Year 2019 Full Year 2018 Full Year 2017

Net financial position before the impact of EIB Warrants (IFRS 2) (8,100,803) 6,809,664 (12,320,301)

VAT Receivable 1,495,389 1,462,940 1,723,841

Reserved Capital Increase 0 0 0

Trade WC 3,114,224 2,651,020 4,857,839

Adjusted net financial position (3,491,190) 10,923,624 (5,738,621)

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8.3 Cash flow for financial years 2019, 2018 and 2017

The following table presents the cash flow over the financial years considered:

Cash position at the end of the period is the amount held on bank balances both in Euro and in other currencies and cash deposits at leading credit institutions, including petty cash. The cash liquidity is held in Euro and US Dollar currency.

8.3.1 Cash flows deriving from operating activities

Cash flows used in operating activities represent a net amount of €12,322 k in 2019 (compared to €7,410 k in 2018 and €9,585 k in 2017).

CASH FLOW STATEMENT(amounts in Euro) 31/12/2019 31/12/2018 31/12/2017

Net Income or Loss (14,644,285) (8,734,638) (9,009,510)

Revaluation of European Investment Bank warrants liabilities (IFRS 2) 0 (3,777,134) 3,086,219

Non-cash adjustments 8,911,270 1,052,243 2,159,144

Amortisation and depreciation 2,985,304 1,655,407 1,276,156

Impairment and write down 3,592,049 289,038 65,173

Stock option and warrant plan accrual 1,206,489 (1,466,296) 331,539

Defined Benefit Plan 599,379 443,411 0

Non-cash variation in bank debts 528,048 488,338 486,276

Working capital adjustments (6,589,120) 4,048,686 (5,820,580)

Increase (decrease) in tax assets 221 719,544 (719,765)

Decrease (increase) in trade and other receivables and prepayments (13,689,123) (4,362,766) (4,684,855)

Decrease (increase) in inventories 66,905 1,780,617 146,800

Increase (decrease) in trade and other payables 6,925,288 3,224,791 (1,259,936)

Increase (decrease) in non current assets and liabilities 107,590 2,686,501 697,176

Net cash flows from operating activities (12,322,135) (7,410,842) (9,584,726)

Investments Net Decrease (Increase) in intangible assets 433,625 (3,137,602) (2,581,110)

Net Cash flow deriving from business combination 0 0 0

Net Decrease (Increase) in tangible assets (276,528) (780,971) (147,741)

Net Decrease (Increase) due to IFRS 16 FTA (2,175,922)

Net cash flows from investments activities (2,018,826) (3,918,573) (2,728,851)

Financing Reimbursement of Financial Loans 9,953,268 (12,304,402) 0

Increase (decrease) in bank debts 0 30,257,801 9,524,186

Investments in company accounted for using the equity method 0 (996)

Shareholders cash injection 0 0 1,480,243

Purchase of treasury shares 0 0 62,294

Warrants 0 0 6,605

Net Proceeds from increases of Capital 0 0 0

IFRS 16 (41,460) 0 0

Net cash flows from financing activities 9,911,808 17,952,403 11,073,328

Net cash and cash equivalent at the beginning of the period 10,860,527 4,237,539 5,477,790

NET CASH FLOW FOR THE PERIOD (4,429,153) 6,622,988 (1,240,249)

NET CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 6,431,375 10,860,527 4,237,540

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In 2019, in addition to EBITDA (excluding stock options and 2018 Incentive Plans expenses) and non-recurring charges, the net cash deficit of €12,322 k can be detailed as follows:

• Impairment for €3,592 k related to the shut-down of non core activities, following the refocusing strategy announced on June 2019 (please also refer to paragraph 7.4.10)

• trade receivables and prepayments are €23,901 k in 2019 versus €10,291 k in 2018;

• inventory is €2,986 k in 2019 versus €3,053 k in 2018; and

• trade & other payables are €20,498 k in 2019 versus €8,260 k in 2018

In 2018, in addition to EBITDA (excluding stock options and 2018 Incentive Plans expenses) and non-recurring charges, the net cash deficit of €7,410 k was detailed as follows:

• trade receivables and prepayments were €10,291 k in 2018 versus €11,189 k in 2017;

• inventory was €3,053 k in 2018 versus €997 k in 2017; and

• trade & other payables was €8,260 k in 2018 versus €4,746 k in 2017.

In 2017, in addition to EBITDA (excluding Stock Option and Warrant Plans expenses) and non-recurring charges, the net cash deficit of €9,585 k was detailed as follows:

• trade receivables and prepayments were €11,189 k in 2017 versus vs €6,504 k in 2016;

• inventory was €997 k in 2017 versus €1,144 k in 2016; and

• trade & other payables was €4,746 k in 2017 versus €6,006 k in 2016.

8.3.2 Cash flows derived from investments activities

Cash flows used in investment activities represent a net amount of €2,018 k in 2019 (compared to €3,918 k in 2018 and €2,729 k in 2017).

In 2019, ENGIE EPS Group, invested:

• €718 k for the improvement of EMS and PMS (Power Management System): this project stems from the need to improve the present Energy and Power Management Systems for the operation of both isolated and grid connected storages, possibly in combination with other types of electrical assets. Moreover, newer and more stringent grid codes, efficiency and robustness requirements required an overhaul of the existing plant controller architecture;

• €516 k for the energy storage products development: the project includes standardization, optimization and development of energy

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storage solutions that will improve ENGIE EPS Group’s competitiveness in terms of performance and cost.This project provided ENGIE EPS Group with a set of products optimized for the rapidly evolving energy storage market, thanks to the rationalization, standardization and optimization of existing containerized solutions. It is also resulted in a cost reduction of the containerized solutions and a boost in their power and Energy Density. The maximum power in a 40ft container (PowerHouse) was increased from 3,6 MW to 14,4 MW, while the maximum energy in a 40ft container increased from about 2 MWh to more than 5 MWh;

• €421 k in e-Mobility with BMS development: the project will exploit the value of EV batteries in providing energy and power services to the grid (V2G applications). To this end, a reliable ageing model and a real time battery model will be developed and integrated into a modular advanced battery system. Thanks to ENGIE EPS Group know-how, different innovative solutions were developed to break into the emerging e-Mobility sector. First of all, an innovative centralized solution for EV parking recharging infrastructure (EVHouse) was designed and will be soon deployed into an FCA plant . Leveraging on EVHouse technology, ENGIE EPS Group will be able to bid in the Fast Reserve Unit (FRU) project, a Frequency Regulation project by TERNA S. p. A., using its unique vehicle-to-the-grid technology;

• €406 k in the H2 open innovation platform scale up project: the project aims to develop a solution that can cover not only the needs of the P2P market but also those of the H2 industrial production and the H2 refuelling station for green mobility application;

• €311 k for Power and Control Electronics Development: the project covers mainly the bottom level of ENGIE EPS Group vertical integration, providing the fundamental bricks for the whole system. The development of innovative technologies for power and control electronics is aimed at enabling the design of new products in the fast-growing sectors such as PCS, e-Mobility, predictive diagnostics, as well as energy storage systems, both stationary and distributed on EV;

• €310 k in computer science and artificial intelligence algorithms development: the most important goal is to further improve the techniques used for the development of the ENGIE EPS Group’s EMS, within the framework of Prophet project. The new EMS is based on mathematical optimization, predictors (as load and photovoltaic forecasters), adaptive functionalities and real time updating of the constraints. Another vital direction is to provide a software dashboard which will help supervise and monitor the plant and the assets in the portfolio;

• €167 k for the enterprise resource planning development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by the ENGIE EPS Group;

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• €110 k for the development of power electronics, e-Mobility and standardized product solutions. In detail this development regards new 100kW - 1500 VDC inverter; and

• €57 k in the Prophet project. The main goal of this project is to develop and improve the control predictive algorithm for a multi-DER microgrid. The new optimized control will ensure secure microgrid operation and reduce the energy cost, making the best use of renewable generation and storage capability. Moreover, the project will investigate the impact on the grid given by the introduction of EVs, their optimal management in terms of charging, grid services they can offer and how they can create business cases in the microgrid context.

In 2018, ENGIE EPS Group, invested:

• €1,229 k in the Prophet project;

• €676 k for the improvement of HyESS® that will enable EPS to face the DER evolution and support (i) the new role of the algorithms in light of data predictors, (ii) the machine learning and Artificial Intelligence, (iii) VPP and (iv) Electric and Hybrid Vehicles integration in smart grid. Development realised in 2018 consist mainly in further development on Hydrogen Module integrated in HyESS®;

• €551 k for the development on power electronics, e-Mobility and standardised product solutions. In detail this development regards new C-BESS-900, C PV-900 and 100kW - 1500 VDC inverter and the design of new standard containers suitable for applications of grid-scale storage and big-scale solar plant;

• €135 k for the Enterprise Resource Planning development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by the ENGIE EPS; and

• €154 k related to new patents and licenses.

In 2017, ENGIE EPS Group invested:

• €937 k for the improvement of HyESS® that will enable EPS to face the DER evolution and support (i) the new role of the algorithms in light of data predictors, (ii) the machine learning and Artificial Intelligence, (iii) Virtual Power Plant and (iv) Electric and Hybrid Vehicles integration in smart grid. In detail the development projects realized during 2018 consist mainly in the design review of the HyESS® platform, the development of Power Quality project to adapt Firmware already used in PCS to HyESS® technology and have access to the market of application for big industrials, the development of a control system for a multi-DER microgrid supplying heat and electricity in order to ensure its secure and efficient operation in the presence of high penetration of renewable generations;

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• €707 k for the development on power electronics and e-Mobility solutions and in detail new C-BESS-900, C PV-900 and 100kW - 1500 VDC inverter suitable for applications of grid-scale storage and big-scale solar plant;

• €495 k for the further development on Hydrogen Module integrated in HyESS®;

• €307 k for the Enterprise Resource Planning development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by the ENGIE EPS Group; and

• €103 k related to new patents and licenses.

8.3.3 Cash flows derived from financing activities

Cash flows used in financing activities represent a net amount of €9,912 k in 2019 (compared to €17,952 k in 2018 and €11,073 k in 2017).

In 2019, net cash flow derived from financing activities was positive for €9,912 k due in particular to:

• Down dawn of the credit facilities received by Société Générale for a total amount of €12,5 million;

• Repayment of instalments of Intesa Sanpaolo, Unicredit and Sella medium-long term loan and net Intesa short term working capital financing for an amount of €3,068 k.

In 2018, net cash flow derived from financing activities was positive for €17,952 k due in particular to:

• Capital increase of €30,258 k, €28,931 k for the Right Issue (net of the related expenses) and €1,327 k for the exercise of Stock Options and Warrants;

• Repayment of instalments of Intesa Sanpaolo, Unicredit and Sella medium-long term loan and Intesa short term working capital financing for an amount of €1,905 k;

• Reimbursement for €10 million of EIB loan.

In 2017, the cash flow derived from financing activities represented a positive flow of €11,073 k principally due to:

• Drawing of on the first tranche of EIB Financing for €10 million;

• Repayment of instalments of Intesa Sanpaolo, Unicredit and Sella medium-long term loan for an amount of €476 k;

• Capital increase of €1,480 k reserved to the former management of EPS Elvi.

(i) Changes in working capital requirements

The following table indicates in detail the change in working capital requirements during the relevant periods:

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8.4 Restrictions on the use of the capital

The ENGIE EPS Group is not facing any restriction on the use of its capital having a significant direct or indirect effect on the ENGIE EPS Group’s financing, other than guaranties securing the financings.

8.5 Expected sources of financing

The ENGIE EPS Group believes that its funding needs will be covered by available cash and the possible use of its existing credit facilities, as well as those already approved (subject to customary conditions precedent for ENGIE group companies). However, it may call upon the capital markets on an ad hoc basis.

If necessary, dedicated financing could be established for very specific projects.

It is worth to note that COVID-19 outbreak could have material impact on ENGIE EPS sources of financing. For a detailed description of this effect please refer to paragraphs 3.4, 10.3 and 10.4.

Working capital adjustments(amounts in Euro) 31/12/2019 Var% 31/12/2018 Var% 31/12/2017

Increase (decrease) in tax assets 221 0% 719,544 0% (719,765)

Decrease (increase) in trade and other receivables and prepayments (13,689,123) -214% (4,362,766) 7% (4,684,855)

Decrease (increase) in inventories 66,905 96% 1,780,617 -1113% 146,800

Increase (decrease) in trade and other payables 6,925,288 -115% 3,224,791 356% (1,259,936)

Increase (decrease) in non current assets and liabilities 107,590 96% 2,686,501 -285% 697,176

Net cash flows from operating activities (12,322,135) -66% (7,410,842) 23% (9,584,726)

Working capital adjustments (6,589,120) -263% 4,048,686 -170% (5,820,580)

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9 REGULATIONS APPLICABLE TO THE ENGIE EPS GROUP

ENGIE EPS Group is subject to a host of laws and regulations which essentially impact (favourably or unfavourably) the activities of the Company and its development, even if ENGIE EPS Group is not directly subject to such laws and regulations. Due to the international nature of its activities, ENGIE EPS Group is also subject to specific regulatory regimes in each country in which it operates and to international sanctions’ regime.

9.1 General Regulatory Environment applicable to ENGIE EPS Group Concerning environmental and social legislation, internationally wise, ENGIE EPS Group may be impacted by the Paris Agreement, adopted in 2015, which sets out a global framework to avoid dangerous climate change by limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C.

In Europe, ENGIE EPS Group is subject to Europe’s 2030 climate and energy policy (“Energy Union”) framework which includes EU-wide targets and policy objectives for the period from 2021 to 2030 in order to lead to CO2 emission reduction, improvement on energy efficiency and an increase in the percentage of renewable energies.

In Europe and in other countries where ENGIE EPS Group operates, the energy sector is regulated by public authorities implementing a body of regulations and measures in the area of antitrust and competition issues. ENGIE EPS Group is subject to regulations such as the Clean Energy Package, launched in Europe by the Juncker Commission, which entails a series of legislation implementing the “Energy Union” project, as well as the Clean Mobility Package for sustainable mobility.

9.2 Regulation applicable to ENGIE EPS Group products and equipment Considering the portfolio of products developed by ENGIE EPS and more specifically, during their design and implementation phase, ENGIE EPS is obliged to apply the following European directives (the European directives listed under points (i) to (iv) more specifically govern the general framework to be observed for obtaining CE marking), which allows ENGIE EPS Group to sell its products freely in the European market:

– Directive 2006/42/CE, as amended (also termed the “Machinery Directive” or “MD Directive”) applies to machines as well as to interchangeable equipment, safety devices, lifting accessories, chains, cables and belts, and for removable mechanical transmission devices and hence to ENGIE EPS’s portfolio of products. Pursuant to its provisions, certain measures must be taken in order to ensure that the design of the equipment may be marketed and/or commissioned, on condition that it satisfies certain specific requirements, the aim of which is to not endanger the health and safety of individuals and as appropriate, of domestic animals or goods, when they are installed, maintained and used in accordance with their initial intended use or under reasonably foreseeable conditions. More specifically, the Directive imposes specific requirements on so-called potentially dangerous equipment and more specifically: (a) each item of equipment must comply with the requirements regarding health and safety; (b) each item of equipment must necessarily be accompanied by its own technical file; and (c) each item of equipment must be accompanied by certain items of supplementary information, such as practical instructions. Moreover, certain procedures are required in order to evaluate the

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achieved level of compliance required and to establish the CE declaration of compliance, which is obligatory for obtaining and affixing CE marking on the product.

– Directive 2014/30/EU (also termed the “Low Voltage Directive” or “LVD Directive”) is also applicable to ENGIE EPS’s portfolio of products since this refers to the electrical material intended for deployment within certain voltage limits. This directive principally provides for common objectives regarding safety rules, in order that any item of electrical equipment approved by an EU member state is judged to be fit for use in all the other EU countries. The “Low Voltage Directive” does not impose specific technical standards to be observed, but instead rests on the technical standards of the International Electrotechnical Commission for guiding industries in the production of safe equipment; consequently, all of the provisions provided by this Directive must necessarily be read in view of the standards decreed by the International Electrotechnical Commission. Pursuant to the provisions of the Directive, certain necessary and appropriate measures must be taken in order to ensure that the electrical material is only designed and marketed on the market if, having been manufactured pursuant to good engineering practices regarding safety in effect within the European Community, it does not endanger the safety of individuals, domestic animals or goods, when it is installed, maintained and used in the applications for which it was designed. The compliance of the products with the standards is a mandatory condition for obtaining the declaration of CE compliance.

– Directive 2014/35/EU (also termed “Electromagnetic Compatibility” or “EMC Directive”), applies to all electronic and electric products likely to be capable of disturbing the electromagnetic environment. Consequently, electronic or electrical industry manufacturers shall ensure and be able to demonstrate that their products are compliant with the requirements of the directive, in order to affix the CE marking necessary for marketing such products within the European Union. This directive demands that all products comply with the basic requirements regarding protection principally the following ones: (a) electromagnetic perturbations produced by the device shall not exceed a threshold set by harmonised regulations. This threshold is the one above which an item of radio, telecommunications or any other item of equipment will not be able to function as foreseen; and (b) the device must have a level of immunity to electromagnetic perturbations, in accordance with its intended use, which allows it to function without unacceptable degradation of its dedicated performance. This Directive also provides for the implementation of internal procedures, which must be correctly applied in terms of assessment of compliance, in order to achieve the technical requirements more effectively.

– Directive 2014/68/EU (also termed “Pressure Equipment Directive” or “PED Directive”) establishes standards for the design and manufacture of equipment under pressure (such as ships, storage reservoirs under pressure, heat exchangers, steam generators, boilers, industrial piping, security equipment and accessories under pressure). In reality, the equipment under pressure is extensively used in (high temperature) processing industries, in energy production, in the delivery of public services, heating, air conditioning, gas storage and transport. Moreover, this directive sets the requirements regarding

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administrative procedures for implementing the “assessment of compliance” for equipment under pressure. Within the context of the European Community regime the directive, the equipment under pressure, the assembly is mentioned above, shall maintain the pressure and volume safety thresholds, satisfy the essential security requirements regarding the design, manufacture and tests and lastly, must comply with the appropriate procedures in terms of assessment of compliance.

– Directive 2014/34/EU (also termed “Directive on equipment and protective systems for use in potentially explosive atmospheres” or “ATEX Directive”) the object of which is to harmonise the health and safety requirements for the manufacturer, the users, as well as individuals working with devices which may be exposed to a potentially explosive atmosphere. These essential health and safety requirements are specific regarding: the potential sources of ignition of the equipment intended to be used in potentially explosive environments, autonomous protection systems, intended to be operational following an explosion and with the principal objective of immediately ending the explosion and/or of limiting the effects of flares and pressure linked to the explosion, the safety devices intended to ensure the secure functioning of such an item of equipment regarding the source of ignition and the secure functioning of the autonomous protection systems and components with no autonomous function necessary for the secure functioning of such an item of equipment or of such autonomous protection systems. Directive 2014/34/EU, among other things: (i) provides for harmonised requirements for non-electrical equipment, for the equipment intended to be used in potentially explosive environments, due to risks linked to dangerous dusts and to protection systems, (ii) imposes obligations on individuals who place the products into circulation and/or into service, whether this is the manufacturer, its legal representative, the importer or any other responsible person.

– In parallel to this Directive, Directive 1999/92/CE on minimum requirements for improving the safety and health protection of workers potentially at risk from explosive atmospheres. This Directive identifies the zones at risk to be taken into account on installation of an item of equipment presenting the conditions for a potentially explosive atmosphere. Each zone must contain a minimum category of devices which must be used in order to limit any potentially dangerous situation. This directive obliges the end user to obtain a document evaluating the risks before installation.

– Directive 2010/35/EU (also termed the “Transportable Pressure Equipment Directive” or “TPED Directive”) governs all of the necessary safety and precautionary measures for the transport of the equipment under pressure within the EU. It regulates all equipment under pressure which may contain gas and that have to be moved. This directive applies to the design, manufacture, and assessment of compliance and to the periodic reassessment of transportable bottles, tubes, cryogenic containers and tankers for the transport of hydrogen cyanide gas, hydrogen fluoride and hydrofluoric acid. It also covers the associated valves and rechargeable and non-rechargeable bottles. The compliance of the equipment is verified by periodic assessments. It implements certain of the standards defined by the ADR (European Agreement concerning

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the International Carriage of Dangerous Goods by Road), regarding the design, manufacture, tests, transport and maintenance of all equipment under pressure.

– Directive 2011/65/EU, (also termed “Directive on the restriction of the use of certain hazardous substances in electrical or electronic equipment” or “RoHS Directive”). The RoHS Directive targeted six hazardous substances of concern. The maximum tolerated concentration is 0.1% by unit of weight of homogenous material for lead, mercury, hexavalent chromium, polybromobiphenyl (PBB), and polybromodiphenyl ether (PBDE) and 0.01% for cadmium. This directive has the object of eradicating certain dangerous substances from new electrical and electronic equipment (also termed “EEE”). The producers of electrical and electronic equipment falling within the field of the directive shall ensure that their products comply with the requirements of the directive. The requirements of the RoHS Directive apply exclusively to finished products which fall within its field of application. The RoHS Directive prohibits the introduction into circulation within the European Economic Area of all new electrical and electronic equipment containing lead, mercury, hexavalent chromium, polybromobiphenyls (PBB) and polybromodiphenyl ether (PBDE), with the exception of certain specific applications, at concentrations exceeding the values decided by the European Commission. These values were established at 0.01% by weight of homogeneous material for cadmium and 0.1% for the five other substances (consequently, the RoHS 2.0 Directive maintains these percentages unchanged).

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10 TREND INFORMATION

10.1 Key trends having affected the production, sales and inventory As indicated in paragraph 7.3 of this Universal Registration Document, on 19 March 2020, ENGIE EPS announced that it had decided not to confirm its 2020 revenue guidance announced in June 2019 and, given the current highly volatile circumstances, not to commit to an alternative 2020 target. As for the 2022 revenue target also announced in June 2019, ENGIE EPS will update, if necessary, the 2022 guidance once the COVID-19 situation has been overcome.

As detailed in paragraph 7.4.1, in 2019 revenues amounted to €20,205 k increasing by 29% from 2019.

The growth in revenues was mainly driven by successful partnerships that ENGIE EPS has been developing with various ENGIE Group Companies.

In particular, the construction of a microgrid in the Comoros Islands has continued to progress towards completion; the engineering, production and procurement of a solar plus storage project in Mexico in close collaboration with ENGIE Solar has started and progressed significantly; the engineering and production of an energy storage plant for an ENGIE power plant in Leinì has started, Lifou, Comoros and Somaliland plants were commissioned. ENGIE EPS’ refocused strategy (launched in June 2019) started bearing early fruits, with the important preliminary result of Guam and FCA.

Production and inventories closely followed the evolution of the above-mentioned projects. In particular, ENGIE EPS continues to book revenues on a “work in progress” basis (in accordance with IFRS 15) therefore revenue recognition closely follows the progress of production. In addition, ENGIE EPS keeps minimum inventories – purchasing production inputs “just in time” for incorporation into its products. The only exceptions are materials that require a wide lead time, typically batteries and PV modules.

The Backlog as of 19 March 2020 is €29.5 million. Coherently with its refocused strategy, there are no more significant project being developed under a PPA structure, except for €9.7 million. The Pipeline as of 19 March 2020 has increased to over €686 million. The vast majority of the opportunities in Pipeline are coherent with ENGIE EPS’ refocused strategy (as communicated to the market in June 2019).

For a detailed description of main events affecting the ENGIE EPS Group performance after 31 December 2019, please refer also to paragraph 7.2 of this Universal Registration Document.

10.2 Known trends, uncertainties, commitment requests and events reasonably likely to have a material effect on the Company’s prospects

The energy storage market is experiencing an increased pace of growth, which should represent an important trend affecting ENGIE EPS’s prospects. According to BNEF20: “The global energy storage market will grow to a cumulative 1,095GW/2,850GWh by 2040 from 9GW/17GWh in 2018, attracting $662 billion in investment over this period. Cheaper batteries are enabling usage in more applications, including for energy shifting and peaking in the bulk power system.” The vast majority of new investments in energy

20 “2019 Long-Term Energy Storage Outlook”, BloombergNEF

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storage is expected to be at “system-level”, which is the segment addressed by ENGIE EPS’s applications.

The number and the size of utility scale storage or solar-plus-storage has increased in all key geographies. In 2019 alone, ENGIE EPS has been involved in (mostly competitive) processes for the procurement of utility scale storage in USA territories, Europe and Middle East. This trend is expected to continue and ENGIE EPS should reasonably be expected to benefit from it.

A corollary effect of this trend is the significant increase in size and complexities of utility scale projects. Such increased size and complexities would have impacted the ability of ENGIE EPS to act as a full EPC provider, having to face the double challenge of financial resources and skills limitation. ENGIE EPS promptly responded to this trend by adjusting its strategy by limiting its scope for utility scale solar plus storage projects to the role of BESS subcontractor (as part of the refocused strategy communicated to the market in June 2019). In parallel, ENGIE EPS has sought closer ties and collaboration with ENGIE Solar, the solar EPC contractor of the ENGIE Group. This approach has allowed ENGIE EPS to be involved in projects which would have been unattainable under the full EPC business model.

Early successes of ENGIE EPS refocused strategy in this field include the “Solar-after-Sunset” project in Guam (USA).

An increased number of industrial players and utilities both in developed countries and weak-grid countries are showing interest in on-site energy storage solutions, including microgrids. In 2019, for example, ENGIE EPS has successfully commissioned a 4.8 MW storage plant in the island of Lifou (New Caledonia) and a further additional 2,000 kW capacity for the storage plant in Garowe (Somalia). This trend is expected to continue, although it is difficult to predict whether it will result in a material benefit for ENGIE EPS’ business prospects in the short term.

In particular, industrial players do not tend to consider long-term capital investment projects in non-core activities, such as energy storage. This trend is expected to continue and is expected to limit the market for energy storage solutions for industrial players.

In the e-Mobility sphere, the interest of car manufacturers in topics such as smart charging of EVs, bi-directional charging, second-life battery uses, battery-as-a-service

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business models has increased dramatically.

In this field, in 2019 ENGIE EPS sealed two important agreements: the exclusive supply of its easyWallbox to FCA and the agreement with ENGIE to deliver dealers’ electrification and B2C electrification again for FCA in respectively two and eight European countries. This trend is expected to continue and possibly accelerate. ENGIE EPS should reasonably be expected to benefit from this trend.

Growth in business prospects should lead to growth in sales which in turn should drive growth in production. However, ENGIE EPS’ production focuses solely on the high added value components and activities, therefore growth in in-house production would normally be less than proportional to the growth in sales volumes. Profitability is expected to be impacted positively thanks to various scalability effects embedded in ENGIE EPS’ business models. For example, the engineering, commercial and support function resource requirement for any utility scale storage or solar-plus-storage project are relatively independent from the size of the project. As the size of the projects increases there is an automatic scale effect. Additionally, most of ENGIE EPS’ solutions are comprised of modular elements which again allow for industrial and operational economies of scale.

The prices of batteries (especially Lithium-Ion ones) have continued to fall steadily, as correctly predicted by leading industry observers such as BNEF. This trend is expected to continue and could reasonably be expected to benefit ENGIE EPS’ business prospects. In fact, cheaper batteries have certainly underpinned the growth trends in the three market fields described above. To partially outweigh the benefits for ENGIE EPS, significantly lower prices for batteries could both increase competition and reduce volumes of sales and margins thereof.

In addition to batteries, the prices of other components of energy storage systems are also expected to decrease, as a combined result of improved technology and increased competition. ENGIE EPS will have to continue to invest in R&D to keep up with (or beat) competition.

At macro level, one clearly emerging trend is the greater attention of both policy makers

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and industry leaders for climate change and environmental matters. The necessity or desire to curb carbon emissions is expected to continue and is expected to benefit the prospects of ENGIE EPS, albeit indirectly. ENGIE EPS solutions are in fact a complement to renewable sources of energy generation.

A clearly negative trend is however the relatively low oil prices. Should the downwards or even stable oil price trend continue, diesel generation would continue to be competitive versus (for example) solar-plus-storage, denying a potential market to ENGIE EPS for diesel generation displacement.

While inventories should be expected to growth linearly with production volumes (or rather anticipating increases in production volumes), ENGIE EPS will continue to keep minimum inventories, normally only as inputs into production for secured orders.

10.3 COVID-19 and 2020 revenues guidance On 21 June 2019, ENGIE EPS announced a revised revenue guidance of €40 million for 2020 and €100 million for 2022. It also presented an indicative ambition for 2025 of €400 million of revenues in its Long Term Strategic Plan.

While the Pipeline is expected to generate revenues in 2021 onwards, the 2020 guidance rested mainly on projects moving from the opportunity pool to the Pipeline, then to the Backlog no later than 2019, and eventually generating revenues in 2020. Some projects were not awarded to ENGIE, like the tender for new capacity in France, certain others are being delayed (in the US and Pacific islands), others have not materialized for ENGIE EPS Group, like the tenders in India and North Africa or a role of turnkey provider for large industrial projects that ENGIE EPS Group had planned in the e-mobility sector.

In addition, the COVID-19 outbreak is heavily impacting both the industrial operations of ENGIE EPS Group and its short-term business prospects. ENGIE EPS Group’s operations and the majority of the supply chain are based in Italy, the country currently at the epicentre of the European outbreak. The Italian government imposed the most drastic steps yet by any country except China to contain surging numbers of COVID-19 cases, placing almost immediately the region of Lombardy (where ENGIE EPS Group

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has two industrial premises) and more than a dozen other provinces in neighbouring regions under quarantine on March 8. Restrictions were extended to the entire country on March 10, and then turned into a lockdown. In addition, travel restrictions all over the world are limiting the ability to ENGIE EPS Group to materialize its project development effort, particularly in large tender processes.

As the situation continues to unfold, ENGIE EPS Group is not currently in a position to quantify the adverse impact, the related consequences for construction sites worldwide (Italy, Mexico, California, Singapore, Comoros, and Greece), nor the scenarios for projects under development (Europe, South Africa, Middle East, US and Pacific Islands). Even if ENGIE EPS Group is supporting its main Italian suppliers so that they can qualify as functional to the continuity of industrial supply chain, in accordance with the latest regulations, in order to minimize potential interruptions, adverse impact on the supply chain could still be likely to happen. As a consequence, the different scenarios for 2020 revenue recognition, presented by the management and analysed by the Board of Directors held on 19 March 2020, are subject to significant volatility.

All of the above certainly impacts ENGIE EPS Group’s 2020 guidance and ripples through the timing of the implementation of the Long Term Strategic Plan beyond 2020.

In the longer run, ENGIE EPS Group, together with ENGIE as its majority shareholder and industrial partner, remains fully committed to the Long Term strategic Plan and its 2025 €400 million revenue indicative ambition, bearing in mind that delivering this plan will require an improvement of the current economic environment highly penalized by the global Coronavirus pandemic.

Further, the successful implementation of the Long Term Strategic Plan is significantly predicated upon (i) ENGIE EPS Group and ENGIE prioritizing efforts and resource allocation on the markets where storage is most promising, e.g. with favourable regulation and already announced tenders for which both groups have a competitive hedge, (ii) ENGIE supporting ENGIE EPS Group in projects that make sense for both companies, and (iii) both partners being successful in winning and executing projects.

In this context, and following a discussion at the Board of Directors on 19 March 2020, ENGIE EPS has decided not to confirm its 2020 revenue guidance and not to commit to an alternative target for 2020, as well as to update – if necessary – the 2022 guidance once the COVID-19 situation has been overcome.

10.4 Cash preservation measures In view of a probable decrease in the workload due to the impact of the latest lockdowns and global restrictions, as well on the overall Italian economic and industrial system, ENGIE EPS Group will assess the wider use of the extraordinary social safety nets and support measures announced by the Italian Government. In parallel, the ENGIE EPS Group deeply analysed the strongest measures to implement a solid cash preservation strategy in light of the COVID-19 dramatic consequences for ENGIE EPS Group’s business and, generally, the overall Italian economic and industrial system, resulting in the measures detailed below:

Redundancy Ordinary Fund

ENGIE EPS Group will activate such social safety nets, resorting to the State funded social programs and in particular the Redundancy Ordinary Fund (Cassa Integrazione Guadagni Ordinaria, “CIGO”). The decision to take this sever measure, that will

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immediately impact on ENGIE EPS Group employees’ salary, is aimed to preserve the ENGIE EPS Group cash and industrial value, allowing ENGIE EPS Group fast recovery once the COVID-19 emergency will be overcome.

Most of the industrial companies in Italy will place almost the majority of their employees under CIGO. In order to balance the ENGIE EPS Group’s needs and employees’ welfare, ENGIE EPS Group will implement the CIGO following six principles:

1. Universality: CIGO will apply to all employees, including top management. Every employee will make at least 1 day per week of CIGO (e.g. 20%). Even if the CIGO cannot be implemented for top management according to Italian laws, the whole management team, including the CEO, decided to cut their salaries by at least 20% until the end of the lockdown measures.

2. Proportionality: the employees will be placed under different levels of CIGO according to the Company’s needs and workload from time to time.

3. Essential Activities Preservation: employees involved in R&D, System Engineering and Crucial Projects will not be placed under a 100% CIGO regime.

4. Provisional Nature: for most of the employees CIGO is expected to be temporary and should end in principle when restrictive measures and lockdowns will be removed.

5. Flexibility: the percentage of CIGO of each employee will be reduced or extended on a weekly and case by case basis, according to the Company’s needs and workloads from time to time.

6. Integrability: ENGIE EPS Group – provided that this will be allowed by the Italian recent regulations – will integrate the CIGO for all employees under a 80-100% CIGO regime that (i) have a sensitive family situation, or (ii) will volunteer, during the CIGO time in which they cannot work, for selected associations in the context of the COVID-19 emergency.

Bank loans moratorium 2020

After the introduction of "Salva Italia" Decree (D.L. 201/11), the "Imprese in ripresa 2.0" measure is expected to be extended to loans outstanding at 31 January 2020. Companies damaged for Coronavirus-related causes can use it and there are two possible operations.

1) Suspension of payment of reimbursement of debt for up to one year, applicable to medium-long term loans;

2) Loan tenor extension up to 100% of the residual duration of the loan.

New financing and tax instruments

ENGIE EPS Group will use all instruments that Italian and French governments will make available in order to have access to new financing and manage temporary delay in cash generation and collection. At the same time, the Group will apply for any tax credit or any postponement on tax payments that Italian and French governments will announce in the coming weeks.

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11 PROFIT FORECASTS

Not applicable

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12 ADMINISTRATIVE AND EXECUTIVE BODIES

The Company is incorporated in the form of a joint stock company (société anonyme) with a Board of Directors.

The roles of Chairman of the Board of Directors and Chief Executive Officer are separated.

A descriptive summary of the principal stipulations of the articles of association of the Company and of the internal regulations relating to specialised committees, appears in chapter 14 “Functioning of Administrative and Executive Bodies” of this Universal Registration Document.

12.1 Board of Directors and Managing Director

In accordance with article L.225-37 of the French Commercial Code, this section includes the Board of Directors’ Corporate Governance Report. It provides information on (i) the composition of the Board of Directors (ii) the preparation and organization of the Board of Directors’ work and (iii) any restrictions placed by the Board of Directors on the Chief Executive Officer’s powers.

The Corporate Governance reference framework used by ENGIE EPS is the Corporate Governance Code for Small and Mid-cap companies published by MiddleNext in December 2009 and updated in September 2016 (hereafter the “MiddleNext Code”).

12.1.1 Composition of the Board of Directors

The rules and operating procedures of the Board of Directors are defined in the Company’s articles of association (“By-Laws”) and in the Internal Rules of the Board of Directors (“Internal Rules”) which has been adopted by the Company on 6 March 2015 and amended on 20 September 2018. In addition, two specialised Committees have been set up by the Board of Directors in order to enhance the Board of Directors’ effectiveness and the Company’s governance (see paragraphs 14.3.1 and 14.3.2).

The members of the Board of Directors are appointed by the ordinary shareholders’ meeting for three (3) years. Exceptionally, the ordinary meeting of shareholders may appoint some Directors for less than three years or, as the case may be, reduce the term of office of one or several Directors, to ensure a staggered renewal of office of the Board Members.

As at December 31, 2019, the Board of Directors is composed of ten (10) members, as follow:

– Thierry Kalfon, Chairman

– Carlalberto Guglielminotti, Managing Director

– Giuseppe Artizzu, Director

– Anne Harvengt, Director

– Cristina Tomassini, Director

– Masimo Prelz Oltramonti, Director

– Elise Collange, Director

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– Jean Rappe, Director

– Romualdo Cirillo, Director

– Csilla Khoalmi Monfils, Director

Independent Directors 20%

Average age of Directors

48

Female Directors 40%

12.1.2 Summary of changes in the composition of the Board of Directors in 2019

The following table describes the evolution of the composition of the Board of Directors:

The mandates of Board Members Giuseppe Artizzu, Massimo Prelz Oltramonti, Cristina Tomassini and Csilla Kohalmi-Monfils will expire at the Annual General Meeting convened in June 2020 to approve the financial statements for the year ending on 31 December 2019. The Board of Directors that will be held on April 2020 to convene the Annual General Meeting, will decide if the mandates of such Board Members will be renewed or not.

Massimo Prelz Oltramonti and Romualdo Cirillo are considered as “Independent” Directors, pursuant to the criteria defined by the Board of Directors and presented in paragraph 14.6 of this Universal Registration Document.

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12.1.3 Information on the members of the Board of Directors and of the Managing Director

Age: 51 Nationality: French Address: 1 place Samuel de Champlain,92930 Paris La Défense Cedex, France First Appointment: 25 June 2019 Expiry of term of office: General Meeting approving the 2021 financial statements

THIERRY KALFON Chairman of the Board of Directors

BIOGRAPHY – PROFESSIONAL EXPERIENCE

Thierry Kalfon is the Managing Director of ENGIE's Renewables Global Business Line since July 2019. Prior to this position, Mr. Kalfon held the positions of Group Controlling Director (FP&A) since 2014, then Deputy Chief Financial Officer of ENGIE. Between 2009 and 2014, he successively carried out the following missions at ENGIE: Financial and Legal Director of GRTgaz; Director of Strategy, Economy and Tariffs for France and Financial Director of the Renewable Energies Europe activity. From 2007 to 2009, Mr. Kalfon was an advisor to the Minister of Energy and Sustainable Development. Between 2001 and 2005, he was Senior Economist at the International Monetary Fund in Washington. He started his career at the Ministry of Economy and Finance.

MANDATES AND POSITIONS HELD AT DECEMBER 31, 2019

Within ENGIE EPS Group Companies: None

Outside ENGIE EPS Group Companies: • Managing Director of ENGIE's Renewables

Global Business Line

OTHER MANDATES AND POSITIONS HELD DURING THE LAST FIVE YEARS


Outside ENGIE EPS Group Companies: • Deputy Chief Financial Officer of ENGIE • Group Controlling Director (FP&A) at ENGIE

Age: 37 Nationality: Italian Address: Via Anton Francesco Grazzini 14, 20158 Milan (Italy) First Appointment: Co-opted on 7 March 2018 and ratified on 26 June 2018 Expiry of term of office: General Meeting approving the 2020 financial statements

CARLALBERTO GUGLIELMINOTTI Chief Executive Officer and Director


Carlalberto Guglielminotti is Chief Executive Officer of ENGIE EPS since 2013 and Young Global Leader of the World Economic Forum, 2020. He received an MBA with merit in Bocconi School of Management. He graduated magna cum laude in international law from Université Paris Descartes and he received a J.D. summa cum laude in law from the University of Turin. Mr. Guglielminotti has more than ten years’ experience in the high-technology, energy and digital sectors. He spent more than 3 years as Operating Partner at 360 Capital Partners, the leading venture capital investment fund in Italy and France, specialising in the selection of investments, technologies and management of the companies in the fund’s portfolio. He was co-founder of Blackshape Aircraft and Restopolis (now TheFork.it, Trip Advisor group) and has been a board member of various companies, notably Eataly Net and Musement. Prior to his MBA, he also worked as associate at Linklaters for four years focusing on structured finance, with a secondment at The Royal Bank of Scotland.

MANDATES AND POSITIONS HELD AT DECEMBER 31,2019

Within ENGIE EPS Group Companies: • Chief Executive Officer of EPS Manufacturing,

EPS Elvi and MCM Energy Lab S.r.l; • Director of Electro Power Systems Inc and

Electro Power Systems India Pvt. Ltd.

Outside ENGIE EPS Group Companies: • Chairman of the Advisory Company of 360 Capital

Partners Italia S.r.l.



Outside ENGIE EPS Group Companies: • Operating Partner of 360 Capital Partners • Member of the Board of Directors of Eataly Net

S.r.l. • Member of the Board of Directors of Musement

S.r.l.

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Age: 45 Nationality: Italian Address: Via Anton Francesco Grazzini 14, 20158 Milan (Italy) First Appointment: 26 June 2018 Expiry of term of office: General Meeting approving the 2021 financial statements

GIUSEPPE ARTIZZU Director


Giuseppe Artizzu is the Executive Director, in charge of Global Strategy. He received degree cum laude in economics and finance. He spent his entire career focusing on the global energy markets, of which ten years with Lehman Brothers in London, Milan and Rome, as an energy specialist. He was responsible for the utilities sector in Southern Europe and coordinated the bank’s corporate finance activities in the European renewable energy field. Thereafter, he focused on the development of greenfield renewable energy projects in Italy. Mr. Artizzu is a visiting professor at Politecnico di Milano, and a member of the board of the Ridef Master Course in renewable energy and energy efficiency. He also maintains a blog on energy-related questions for the Huffington Post and is an occasional contributor to the specialist reviews Qualenergia, Staffetta Quotidiana and Quotidiano Energia.

MANDATES AND POSITIONS HELD AT DECEMBER 31,2019

Within ENGIE EPS Group Companies: • Executive Director of ENGIE EPS • Director of EPS Elvi, Electro Power Systems Inc.

and Electro Power Systems India Pvt. Ltd.

Outside ENGIE EPS Group Companies: • Member of the Board of Directors of Cautha S.r.l.


Within ENGIE EPS Group Companies: • Director of EPS Manufacturing

Outside ENGIE EPS Group Companies: None

Age: 44 Nationality: Belgian Address: Boulevard Simon Bolivar 34-36, 1000 Brussels (Belgium) First Appointment: 25 June 2019 Expiry of term of office: General Meeting approving the 2021 financial statements

ANNE HARVENGT Director


Anne Harvengt is the Chief of Strategy, Merger & Acquisitions and Corporate Social Responsibility Officer at Tractebel ENGIE. Mrs. Harvengt joined the ENGIE group in 2004 and is currently part of Tractebel’s Executive Committee. Mrs. Harvengt gained broad international experience in Asia Pacific and India from 2009 until 2016 as CFO and CEO in several of ENGIE’S business units. Based in Brussels, she is now driving the change of Tractebel ENGIE’S activities towards a zero carbon future, by creating new business opportunities, adding new competences through external growth and co-building a new transformational leadership culture.

MANDATES AND POSITIONG HELD AT DECEMBER 31, 2019


Outside ENGIE EPS Group Companies: • Director of Tractebel Impact, part of Engie Impact

since April 2019 • Director of Tractebel Thailand since Juen 2019 • President of Commissioner of Tractebel Indonesia

since February 2019 • Director of Tractebel since March 2018




Age: 52 Nationality: Hungarian

CSILLA KOHALMI-MONFILS Director


Csilla Kohalmi-Monfils joined the ENGIE EPS Board of Directors as Board Member in June 2019, holding the position of Innovation Director at ENGIE Fab. Prior to this position she was EVP Strategy, New Business & Digital and member of the Executive Committee at ENGIE Asia Pacific, where she also held a number of Board positions (notably ENGIE powerplants Senoko and Glow, Megajana District Cooling company, and Unabiz -a startup for which she led the

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Address: 1 place Samuel de Champlain,92930 Paris La Défense Cedex, France First Appointment: 25 June 2019 Expiry of term of office: General Meeting approving the 2019 financial statements

ENGIE investment). Mrs. Kohalmi-Monfils joined ENGIE in 2011 as Strategic Projects Director and member of the Executive Committee of ENGIE in Hungary. She has been working in the energy industry since 2005, first as Chief of Staff at the MOL Group (oil & gas), then as Business Development director for alternative energy companies in Hungary. She started her career in Unilever where she held project management positions with increasing responsibilities in Hungary, the UK, Venezuela and Colombia. She later joined Boston Consulting Group as a strategic consultant then Project Leader covering various industries based in Paris, Budapest and Seoul.



Outside ENGIE EPS Group Companies: • Innovation Director at ENGIE Fab



Outside ENGIE EPS Group Companies: • EVP Strategy, New Business & Digital at ENGIE

Asia Pacific • Member of the Executive Committee at ENGIE

Asia Pacific

Age: 65 Nationality: Italian Address: 2 Rosslyn Hill NW3 1PH London, UK First Appointment: 7 March 2018 by co-optation & ratified on 26 June 2018 Expiry of term of office: General Meeting approving the 2019 financial statements

MASSIMO PRELZ OLTRAMONTI Independent Director Member of the Audit Committee, the Remuneration and Nomination Committee and the Independence Committee


Massimo Prelz Oltramonti began his career in management consulting with Boston Consulting Group in Paris, followed by a long period at Olivetti where he worked in the corporate development function (on acquisition and venture capital) both in the Unites States and Europe and then as managing director of their financial information services division (Radiocor). He returned to venture capital in London with Alta Berkley Associates and then private equity investment initially with Advent International and then with GMT Communication Partners. He has been Chairman of the Board of Jazztel Plc, Vice-Chairman of Primacom AG and member of the board of a number of listed companies including ESAT Telecom, SBS SA, Edap-Technomed SA, Esaote SpA, Cityfibre Holding Plc. Mr. Prelz Oltramonti is currently Chairman of the investment committee of DN Capital, a VC fund, of Zzoomm Group ltd, an UK telecom operator, and TechWald SpA, an Italian med-tech investment company.


Within ENGIE EPS Group Companies: • Director of Electro Power Systems Inc.

Outside ENGIE EPS Group Companies: • Advisory Board member of the risk capital fund

DN Capital • Chairman of Zzoom Group Ldt (UK) • Chairman TechWald Spa (IT) • Chairman of Leapwork A/S (Copenhagen) • Director of Flyin Jamon Ltd (UK)


Within ENGIE EPS Group Companies: • Director of EPS Manufacturing

Outside ENGIE EPS Group Companies: • Director of GMT Communication Partners • Board member of Bigpoint Gmbh • Board member of Asiakastieto AS • Managing director of Honei III Ltd (Malta), and

Honey IV Ltd (Malta) holding held by Melita Capital plc

• Advisory Board member of Docu group Gmbh • Chairman of Eyeka

Age: 45 Nationality:

ELISE COLLANGE Director Member of the Remuneration and Nomination Committee


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French Address: 1 place Samuel de Champlain,92930 Paris La Défense Cedex, France First Appointment: 25 June 2019 Expiry of term of office: General Meeting approving the 2020 financial statements

Elise Collange joined the ENGIE EPS Board of Directors as Board Member in June 2019, holding the position of Investor Relation Manager in ENGIE. Prior to this position she was senior financial risk advisor managing interest rate and foreign exchange risks for ENGIE Group. Elise has a strong financial background having led positions in various financial fields : she started as senior associate in Audit (Arthur Andersen) and then spent 10 years in Suez (previously Suez-Environnement) first in many FP&A positions (notably for Spain and Latam) and then as CFO for the Business Unit Eurasia for Suez EPC activities (Degremont).



Outside ENGIE EPS Group Companies: • Investor Relation Manager at ENGIE

OTHER MADATES AND POSITIONS HELD DURING THE LAST FIVE YEARS


Outside ENGIE EPS Group Companies: • Senior financial risk advisor managing interest

rate and foreign exchange risks for ENGIE Group

Age: 50 Nationality: Italian Address : Via Chiese 72 20126 Milano (Italy) First Appointment: 25 June 2019 Expiry of term of office: General Meeting approving the 2019 financial statements)

CRISTINA TOMASSINI Director Member of the Audit Committee


Cristina Tomassini is Head of Acquisition, Investment and Financial Advisory and Corporate Finance for Engie in Italy (€3 Billion Turnover, 3000 FTE in 2019). She has a deep knowledge of the energy sector (she has been working for ENGIE since 2003) and a strong financial background, due to the different responsibilities she had during her career: Senior Audit Manager in Mazars, Head of Controlling for the Italian Energy Services Company, Deputy Controlling Director in Engie Energy Services Business Unit, Financial Advisor within Engie Energy Services in Paris Headquarter and Head of Acquisition, Investment, Financial Advisory and Corporate Finance for ENGIE in Italy, after overseeing the merger of all the business unit in Italy. Mrs. Tomassini gained a strong knowledge of the energy sector working in transversal functions such as Innovation and Marketing Director, Chief of CEO Staff, Communication Director, Project Director for the ERP implementation. She has experienced working in Italy and France, within an international environment.



Outside ENGIE EPS Group Companies: Head of Acquisition, Investment and Financial Advisory and Corporate Finance for Engie in Italy



Outside ENGIE EPS Group Companies: • Head of Innovation and Strategic Marketing for

Engie In Italy • M&A and Financial Advisor at Engie Energy

Services

Age: 37 Nationality: Italian Address: Via Chiese 51 20126 Milano

ROMUALDO CIRILLO Independent Director Member of the Audit Committee, Remuneration and Nomination Committee and the Independence Committee


Romualdo Cirillo began his professional career in 2004 in Ernst & Young in Rome within the Corporate Finance Division. In 2005 he moved to the investment banking sector working for Lazard for more than 13 years. Mr. Cirillo has worked in all areas of corporate finance: M&A, IPOs, financing and debt restructuring, within numerous sectors (from real estate to private equity) and with a focus on energy and infrastructure. He successfully led more than 60

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(Italy) First Appointment: 25 June 2019 Expiry of term of office: General Meeting approving the 2021 financial statements

deals including numerous landmark transactions such as the mandatory tender offer on Pirelli and the disposals of A.C. Milan and F.C. Internazionale (Inter Milan) football clubs. In March 2019 he joined Camfin S.p.A. as CFO. He has been a Board Member at TPIH S.p.A., since April 2018



Outside ENGIE EPS Group Companies: • Director of TPIH SpA



Outside ENGIE EPS Group Companies: • Director of TPIH SpA

Age: 58 Nationality: Belgian Address: Rue de l’Epinette 4A, 4280 Hannut, Belgium First Appointment: 27 September 2018 Expiry of term of office: General Meeting approving the 2020 financial statements

JEAN RAPPE Director


Jean Rappe was CEO at ENGIE Solar. Mr. Rappe joined the ENGIE group 30 years ago at the very start of the privatizations in the utility sector. Most of his career has been oriented toward business development outside Europe. He worked and lived in New York, Singapore and Dubai. Mr. Rappe has been strongly associated with ENGIE EPS Group’s power generation activities in the Middle East, a region in which he has helped make ENGIE the leading IPP. He holds an engineering degree from the Catholic University of Louvain in Belgium where he also obtained a post-graduate management degree.




OTHER MANDATED AND POSITIONS HELD DURING THE LAST FIVE YEARS

Within ENGIE EPS Group Companies:

• Chairman at ENGIE EPS

Outside ENGIE EPS Group Companies: • CEO and Chairman at ENGIE Solar

12.1.4 Diversity and rationale behind the composition of the Board of Directors

The Board of Directors takes particular care in the selection of its members. Directors are chosen for their ability to act in the interests of all stakeholders and not only shareholders, as well as for their expertise, experience and understanding of the strategic challenges in markets where ENGIE EPS operates. The composition of the Board of Directors is intended to adhere closely to the principles of diversity and to reflect the geographic mix of the business verticals (insofar as possible), to provide a range of technical skills, and to include individuals with in-depth knowledge of ENGIE EPS’ activities.

On the date of this Universal Registration Document, the Board of Directors is composed of 6 (six) men and 4 (four) women. Among the 10 (ten) members of the Board of Directors, 8 (eight) are foreign nationals. The Company has the objective

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of ensuring that the choice of members of its Board of Directors provides for a diversity of skills, and has a balanced representation of men and women, in accordance with the applicable legal requirements. In accordance with article L. 225-18-1 of the French Commercial Code, the proportion of women within the Board of Directors has successfully reached the 40% threshold. At the date of this Universal Registration Document, the Board of Directors has 10 (ten) members, including 2 (two) independent directors (20%) and 4 (four) women (40%).

No independent Director has material business ties with the Company or any other ENGIE EPS Group entity.

As provided by article L.225-19 of the French Commercial Code and pursuant to article 14 of the By-Laws, the number of Directors over the age of 70 is limited to one Director.

12.2 Mission of the Board of Directors

The Board of Directors determines the scope of the Company’s business and shall ensure its implementation. Subject to the powers expressly granted to the shareholder’s general assembly and within the limits set by the Company’s By-Laws, the Board of Directors is vested with the powers to ensure the good functioning of the Company and shall address any matters and concerns related thereto.

The Board of Directors defines ENGIE EPS's strategy, long-term objectives and overall policies.

It regularly supervises the management of the business and in particular progress made on metrics it has identified. It appoints the Managing Director who in turns appoints corporate officers to implement ENGIE EPS Group policies.

It ensures the existence and effectiveness of risk management and internal control procedures and oversees the quality of information provided to shareholders and to the financial markets in the financial statements and in connection with major financial transactions.

As required by law, the Board of Directors approves the financial statements for publication, proposes dividends, and makes decisions on significant investments and financial policy.

At least three days ahead of Board of Directors meetings, each Board Member receives a pack of documents, so that he or she can review and/or investigate the issues to be discussed (except for exceptional circumstances).

The ENGIE EPS Group' senior executives make regular presentations to single Board Members who require further information, and in particular the Managing Director and the other operations executives in each area of responsibility discuss regularly the potential for growth, competitive positions, the ambition, the strategy for achieving it and the principal elements of their action plans.

In particular, Independent Board Members are kept regularly informed of questions, comments or critiques from shareholders, whether at meetings with shareholders or by mail, e-mail or telephone.

Upon joining the Board of Directors, all Directors receive training and sufficient information aligned with their specific needs and which relates to the specific area in which the ENGIE EPS Group operates and its organisation. They meet the Chairman

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of the Board of Directors, the Managing Director and the ENGIE EPS Group' senior executives. Meetings are also organized with certain executives and external advisors. Site visits are arranged to provide an overview of the ENGIE EPS Group' businesses and a better understanding of each one. Board Members continue to receive training for as long as they remain on the Board of Directors on a continuous basis.

12.3 Meetings of the Board of Directors

The Board of Directors meets as often as necessary in the Company’s interest and at least 4 times per year. The dates of the following year’s meetings are set no later than one month before the end of the year, except for extraordinary meetings. The independent directors meet at least once a year without the executive directors in attendance, to conduct the performance evaluation of the Managing Director and the executive director.

Convocations to Board of Directors meetings are sent to Directors by email at least five days before each meeting. The Statutory Auditors are invited to attend the Board Meetings called to review the interim and annual financial statements, as provided for in Article L.823-17 of the French Commercial Code.

In 2019, the Board of Directors held 9 meetings, 5 of which on the dates planned in 2019 (14 March, 14 May, 30 September, 14 November and 12 December) and 4 additional meetings not planned:

− On 14 March, in Paris, for the presentation of the results of the financial year ended on 31 December 2018, approval of the 2018 Consolidated and Statutory Financial Statement and Press Release. In addition, all the documents for the filing with the AMF of the draft response offer document were reviewed and industrial and strategic highlights were discussed;

− on 19 March, in Paris, for presentation and approval of all corporate documents to be published with the Annual Financial Report;

− on 14 May, in Paris, for the approval of the resolutions to be submitted to the annual ordinary and extraordinary general shareholder’s meeting, to approve the report of the Board of Directors to be submitted to the annual ordinary and extraordinary general shareholders’ meeting and the approval of the remuneration report. In addition, were discussed the principles about the remuneration of the Chief Executive Officer;

− on 21 June, in Paris, for the presentation of the Long Term Strategic Plan and for the discussion about ENGIE financial support to the Company;

− on 25 June, in Paris, for the appointment of the new Chairman of the Board of Directors and to define the new composition of the Specialised Committees;

− on 31 July, in Paris, to discuss the possibility to set up a partnership with Fiat Chrysler Automobilities N.V.;

− on 30 September, in Milan, for the approval of the 2019 Half Year results and related press release. It was presented and discussed the Long Term Strategic Plan and an update about the business of the Company was presented. The Independence Committee Charter was adopted;

− on 14 November, in Paris, for the discussion and approval of the dismissed of

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all non-core activities of the Company. The budget for the year 2020 and the Business Plan of the Company were also presented. An update about the contracts with FCA was presented and the Board of Directors acknowledged the non-renewal of the director mandate of Mrs. Fréderique Dufresnoy; and

− on 12 December, in Paris, to approve the Long Term Strategic Plan and the 2020 Budget. An update about some projects was presented and the allocation of the attendance fees to the Board Members was decided.

The meetings lasted on average 2,5 hours.

12.4 Major accomplishment of the Board of Directors

The matters discussed by the Board of Directors in fiscal year 2019 and the decisions taken covered a wide range of areas, including:

- business developments: during four meetings, the Managing Director and the executive directors presented the ENGIE EPS Group’s general position from the previous period: changes in key financial indicators, “key events” in commercial and technical fields, state of competition, growth opportunities, Pipeline of projects, update on Backlog, business opportunities, operational highlights;

- Long Term Strategic Plan: this was presented at the Board of Directors meetings held on 21 June and 30 September and approved on 12 December 2019;;

- 2020 Budget: this was discussed during two meetings held on 14 November and 12 December 2019;

- H1 2019 and yearly consolidated financial statements: they were approved by the Board of Directors after hearing the reports of the Audit Committee and the Statutory Auditors;

- compensation of Board Members: the Board of Directors allocated Directors’ fees to its members.

- committee reports: the Board of Directors heard, for the preparation of its deliberations above in the areas that concern them respectively, reports by the Audit Committee and the Remuneration and Nomination Committee.

12.5 Attendance and participation rate to the Board of Directors

The By-Laws and Internal Rules state that Directors may participate in certain meetings by videoconference or other telecommunications link, with the exception of those cases explicitly stipulated, such as the approval of the financial statements and preparation of the Management Report. Under the Internal Rules, Directors who participate in meetings in this way are included in the calculation of the quorum and voting majority for the meeting.

The Company’s Statutory Auditors attended all Board Meeting to which they were invited.

The table below shows the number of Board Meetings in 2019, as well as the members and the individual attendance at each of these meetings. The average attendance of Directors at Board Meetings was 62% (this rate has been calculated on the total number of meetings during the year).

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- Board of Directors before 25.06.2019

- Board of Directors after 25.06.2019

NUMBERS OF MEETINGS in 2019

4 5

Thierry Kalfon - 80%

Carlalberto Guglielminotti 100% 100%

Giuseppe Artizzu 100% 100%

Jean Rappe 100% 80%

Massimo Prelz Oltramonti 100% 100%

Romualdo Cirillo - 80%

Cristina Tomassini - 100%

Anne Harvengt 100% 80%

Elise Collange - 100%

Csilla Kohalmi-Monfils - 80%

Audrey Robat 75% -

Sophie Martin-Strobbaert 100% -

Alexander Katon 50% -

Sabrina Maggio 100% -

12.6 The Chairman and the Internal Rules of the Board of Directors

The Chairman of the Board of Directors represents the Board of Directors and organizes and directs its work, on which he reports to the shareholders at the Annual General Meeting. He also represents the Board of Directors in matters concerning third parties such as employee representatives, the external auditors and shareholders. The Chairman oversees the functioning of all the Company's corporate governance structures and, in particular, ensures that the Board Members are able to fulfil their mission. The Board of Directors may appoint a Vice Chairman to chair Board Meetings in the Chairman's absence, in accordance with Article 9 of the Internal Rules of the Board of Directors.

On 6 March 2015, the Board of Directors adopted its Internal Rules, which sets out the duties of the members of the Board of Directors, their missions and the functioning rules of the Board of Directors. It also sets out the respective duties and powers of the Chairman of the Board of Directors and of the Managing Director, and of the special committees set up by the Board of Directors. The Internal Rules have been amended on 20 September 2018.

The full text of the internal rules of the Board of Directors, in their version dated 20 September 2018, is available on the ENGIE EPS website (www.engie-eps.com).


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12.7 Assessment of the operations of the Board of Directors

The Board of Directors, in accordance with the Internal Rules, assesses and debates about its functioning.

Upon request of the Chairman and following the recommendation of the Audit Committee, a formal assessment of the effectiveness of the Board of Directors' operating procedures was entrusted to the General Counsel under the leadership of the Remuneration and Nomination Committee. The assessment was performed by the Remuneration and Nomination Committee in December 2018.

A new Board of Directors assessment will be performed in 2020.

12.8 Information provided to the Board of Directors

All necessary documents to inform the Board Members about the agenda and any matters to be discussed by the Board of Directors are enclosed with the notice of meeting or sent, handed to or otherwise made available to them before every meeting with a reasonable advance at least three (3) days before each meeting (except for exceptional circumstance when at the discretion of the Board of Directors documents might be received less than three days ahead of the Board Meeting and accepted for discussion in such meeting).

Each Board Member is required to ensure that he or she has all the information they deem essential for the Board of Directors and the Board of Directors special committees in order to properly perform their duties. If any information is not provided or if a Director believes that information may have been withheld, he or she should request it to be provided. Board Members’ requests are submitted to the Chairman of the Board of Directors or to the Managing Director since the two positions are separated, who ensure that Board Members are able to fulfil their duties.

Before any meeting, all Board Members receive a complete Board Pack, which contains all useful as well as business-critical information about all events or transactions that are material to the Company. In addition, they receive copies of all press releases published by the Company.

Board Members have been informed of the standard black-out periods for 2019, during which they may not trade in ENGIE EPS shares or any instruments that have ENGIE EPS shares as their underlying, either directly or through a third party. Pursuant to the Market Ethics Charted of the Company, the blackout period is set to 30 days preceding the publication both of the annual/half year results The Market Ethics Charter states also that Board Members are considered as permanent insiders because they regularly receive price-sensitive and other confidential information. The full text of the Market Ethics Charter is available at the ENGIE EPS website (www.engie-eps.com).

Directors may, if they deem it necessary, receive additional training in the specifics of the Company, its business and its industry. Upon their appointment, the members of the Audit Committee are provided with specific details about the Company’s accounting, financial and operational practices.

12.9 Independence Criteria and Committees

Under the terms of article 15 of the By-Laws, the Board of Directors may decide to create specialised committees responsible for assisting it with its works.

On 6 March 2015, pursuant to article 11 of the Internal Rules, two committees were


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established: an Audit Committee and a Remuneration and Nomination Committee. On September 30, 2019, the Board of Directors decided to establish an ad hoc committee: the Independence Committee. The composition, attributions and operating rules of such committees are described in paragraph 14.3 of this Universal Registration Document.

In accordance with article 2.1 of the Internal Rules, the Board of Directors ensures the presence of at least two Independent Directors among the Board Members (please refer to paragraph 14.6 of this Universal Registration Document)

12.10 Absence of conflicts of interests

To the best of the Company’s knowledge, except for the elements described below, as at the date of this Universal Registration Document, there is no potential conflict of interest between the duties regarding the Company of the members of the Board of Directors and the Managing Director and their private interest:

• certain members of the Board of Directors of the Company are direct or indirect shareholders of the Company and/or holders of SARs, as described in paragraph 13.2.7 of this Universal Registration Document;

• certain members of the Board of Directors of the Company are employees of the ENGIE Group, the majority shareholder of ENGIE EPS. For more information about the position and mandates held by each of the Board Members, please refers to paragraph 12.1.3 “Information on the members of the Board of Directors and of the Managing Director” of this Universal Registration Document;

• the regulated agreements concluded by the Company are described in chapter 17 “Related Party Transactions” of this Universal Registration Document;

• there was no arrangement or understanding concluded with major shareholders, customers, suppliers or others, pursuant to which, one of the members of the Board of Directors or member of senior management of the Company was selected as a member of the administrative or management bodies or member of senior management;

• no restriction has been accepted by the members of the Board of Directors or the Managing Director regarding the disposal within a certain period of time of their holding in the Company’s securities;

The Internal Rules provides under Article 18 that Directors have an obligation to inform the Board of Directors of any conflict of interest, even potential, and must refrain from participating in the deliberations related thereto.

Except for Mr. Carlalberto Guglielminotti, who signed an employment contract with EPS Elvi on 26 June 2018, no other member of the Board of Directors has entered into any employment contract with any member of the ENGIE EPS Group and granting any benefits as a result of such contract.

12.11 Absence of convictions or official sanctions, or disqualification decision

The members of the Board of Directors currently in office have indicated to the Company that:

• they have never been subject to any convictions in relation to fraudulent

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offences for at least the previous five (5) years;

• they have never been associated to any bankruptcies, receiverships or liquidations for at least the previous five (5) years; and

• they have never been subject to any official public incrimination and/or sanctions of such person by statutory or regulatory authorities and whether such person has never been disqualified by a court from acting as a member of the administrative, management or bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five (5) years.

12.12 Separation of the Managing Director from the Chairman role

Since 2015, the Company chose to separate the positions of Chairman of the Board of Directors and managing director. The members of the Board of Directors appointed, among themselves a Chairman of the Board of Directors and a managing director.

On 25 June 2019 Thierry Kalfon replaced Jean Rappe as Chairman of the Company. Carlalberto Guglielminotti is Managing Director.

This governance structure creates a clear separation between the strategic planning and oversight functions that are the responsibility of the Board of Directors, and the operational and executive functions that are the responsibility of senior management lead and chaired by the Managing Director and Chairman of the Board of Directors.

The Managing Director is also Managing Director of all the subsidiaries of the ENGIE EPS Group (following the relevant formal resolutions taken by the Board of Directors of any single ENGIE EPS Group company) and has the authority to manage the operations and functions of the ENGIE EPS Group. Limits are placed upon the powers of the Managing Director, and these limits are set by the Board of Directors, based on the recommendations of the Chairman of the Board. The Managing Director has to obtain the prior consent of the Board of Directors to take the following decisions:

• any acquisition or sale of an asset, activity, or any transaction with any entity, of whatever nature, which has not been taken into account in the annual budget and which represents an amount (on an individual basis or an accrued basis on a 12-month period) exceeding €500,000;

• any acquisition of a shareholding of another entity;

• any conclusion, amendment, or termination of agreements regarding intellectual property rights (namely, any right related to designs, models, inventions, projects, know-how, whether patentable or not) belonging to the ENGIE EPS Group, including the licence agreements, outside of the normal course of business;

• any conclusion, amendment, or termination of agreements whose amount represent an annual amount of €500,000 whose duration exceeds 12 months;

• any loan agreement entered into by the Company and any conclusion, amendment, waiver, renewal or extension of loans granted to the Company, which have not been taken into account in the annual budget and whose amount exceed €1,000,000;

• besides the provisions of article L. 225-35, al.4 of the French Commercial Code

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on the grant of security interests, endorsements and guaranties, the grant of any security interest or guarantee under French of foreign law, and any amendment or extension of any such security, for an amount or a value exceeding €500,000;

• the approval of the annual budget, business plan and their amendments or adjustments; and

• the introduction by the Company of any judicial or administrative proceedings, the conclusion of a settlement of any claim against the Company, when the claimed amount exceeds €500,000.

12.13 Executive Committee

The top management of the Company is organized in the form of an Executive Committee which meets on a fortnightly basis, to discuss decisions to be taken by the management of the Company. Its composition may evolve depending on the evolution of the structure of the Company’s top management and its functioning is not subject to the Internal Rules.

The ENGIE EPS new organizational structure has led to a realignment of responsibilities and a change in the composition of the Executive Committee. As at 31 December 2019, the Executive Committee was composed as follows:

− Carlalberto Guglielminotti, Managing Director;

− Giuseppe Artizzu, Executive Director;

− Stefano Terranova, General Manager;

− Andrea Rossi, Chief Financial Officer;

− Giovanni Ravina, Chief Innovation Officer;

− Daniele Rosati, Head of Engineering and R&D;

− Nicola Vaninetti, Head of Industrial Operations;

− Vincenzo Maugeri, Head of Project Management;

− Ludovica Solera, Head of Health Safety Environmental and Quality; and

− Roberta Romano, Head of Legal, Ethics and Compliance.

The Executive Committee membership coincides with the first direct report of both the Managing Director and the General Manager, except for clerical staff.

The Executive Committee meets on a fortnightly basis: at the beginning of the month the meeting is chaired by the General Manager without the Managing Director, and it is devoted to prepare for the Executive Committee meeting to be held also at the presence of the Managing Director at the end of every month. It is responsible not only for discussing and developing strategies to be recommended to the Board of Directors, but also for monitoring and aligning the implementation of these strategies once the Board of Directors has approved them. The Executive Committee tracks the implementation of action plans, monitors business unit performance, and assesses the potential benefits of growth opportunities and the risks inherent in its business operations. It implements the strategy developed by the Board of Directors and the Chief Executive Director. It helps to shape strategy, coordinate and share initiatives and track cross-functional

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projects to ensure the alignment of action plans deployed by ENGIE EPS Group companies.

12.14 Information referred to under article L. 225-37-5 of the French Commercial Code

Pursuant to article L. 225-37-5 of the French Commercial Code, the following elements may be potentially relevant in the event of a tender offer or an exchange offer:

• Structure of the Company’s share capital:

− the Company is controlled by ENGIE (through its subsidiary GDF International), which holds 60.5% of the Company's share capital and voting rights.

• Restrictions provided for under the bylaws related to the voting rights and share transfers – provisions of agreements brought to the Company’s knowledge pursuant to article L. 233-11 of the French Commercial Code:

− the By-Laws do not provide for any restriction related to the voting rights or the share transfers. No provision referred to under article L. 225-37-5, 2° of the French Commercial Code has been disclosed to the Company;

− The Company, pursuant to articles L. 233-7 and L. 233-12 of the French Commercial Code (crossing of thresholds and treasury shares) has knowledge of direct and indirect shareholdings.

• List of holders of shares to which are attached specific control rights:

− there are no specific control rights attached to the shares issued by the Company.

• Control mechanism provided for in employees’ shareholding system:

− the Company has not set up any participation agreement.

• Shareholders’ agreements brought to the Company’s knowledge and including restrictions on share transfers and the exercise of voting rights:

− to the Company’s knowledge, there are no shareholders’ agreements between the shareholders of the Company.

• Rules applicable to the appointment and replacement of the members of the Board of Directors and to the amendment of the bylaws:

− there are no specific rules in the By-Laws or in any other agreement entered into between the Company and another entity regarding the appointment and replacement of the members of the Board of Directors and the amendment of the By-Laws which will be relevant in the event of a public offer.

• Powers of the Board of Directors in the event of an issue or redemption of shares:

− the delegations granted by the shareholders’ meetings to the Board of Directors which are still ongoing are detailed in paragraph 19.1.5 of the Universal Registration Document.

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• Agreements entered into by the Company which may be amended or terminated in the event of a change of control, and agreements entered into by the Company which provide for specific indemnities to be granted to the members of the Board of Directors or to employees, if they resign or are dismissed without good cause, or if their position is terminated because of a tender offer:

– the employment agreement signed with Mr. Andrea Rossi and EPS Elvi Energy;

– the employment agreement signed with Ms. Michela Costa and EPS Elvi Energy;

– the directorship agreement signed with Mr. Giuseppe Artizzu and EPS Elvi Energy S.r.l.;

– the employment contract signed with Mr. Nicola Vaninetti and EPS Elvi Energy S.r.l.;

– the employment contract signed with Mr. Daniele Rosati and EPS Elvi Energy S.r.l.

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13 REMUNERATION AND BENEFITS

13.1 Compensation policy applicable to the management: principles and criteria for determining, allocating and granting compensation – Ex ante Votes

The information and tables in this chapter 13 have been prepared in accordance with Ordinance no. 2019-1234 dated 27 November 2019 on the compensation of corporate officers of listed companies, supplemented by Decree no. 2019-1235 dated 27 November 2019 transposing the Shareholders’ Rights Directive (“SRD 2”).

These principles and criteria will be submitted to the approval of the shareholders at the next Annual General Meeting ruling on the financial statements for the financial year ending 31 December 2019.

Compensation of the management is determined by the Board of Directors based on the recommendations of the Remuneration and Nomination Committee, taking into account the principles set out in the AFEP-MEDEF Code of Corporate Governance, which are as follows:

• Comprehensiveness: all the components of the compensation are taken into account when determining the overall compensation level;

• Balance between the compensation components: each component of the compensation is clearly substantiated and correspond to the general interest of the company;

• Comparability: the compensation is assessed within the context of the business sector and the reference market, also considering the nature of the tasks entrusted to the corporate officer or the specific situations;

• Consistency: the executive corporate officer’s compensation is determined in a manner consistent with that of the other officers and employees of the company;

• Understandability of the rules: the rules are simple, stable and transparent. The performance criteria used correspond to the company’s objectives, and are demanding, explicit, and long-lasting;

• Proportionality: the determination of the compensation components is balanced and simultaneously takes account of the company’s general interest, market practices, the performance of the senior managers, and the other stakeholders in the company.

The compensation policy is reviewed annually by the Remuneration and Nomination Committee. As better described in paragraph 14.4 the Remuneration and Nomination Committee members have been appointed in consideration of their independence and competences regarding selection and remuneration of listed companies’ representatives. In its recommendations to the Board of Directors, the Remuneration and Nomination Committee seeks to propose a compensation policy that is in line with the practices of comparable major international groups for similar positions.

Stringent quantifiable and qualitative performance criteria are set both for the variable portion of compensation and for long-term incentive plans, helping to maintain a link between the ENGIE EPS Group’s performance and the compensation of its corporate officers in the short, medium and long term.

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Compensation of the management includes:

• a fixed portion: this fixed amount remains unchanged unless the Board of Directors, up on the recommendation of the Remuneration and Nomination Committee decides otherwise;

• a variable portion, balanced relative to total compensation, the purpose of which is to reflect the executive’s personal contribution to the Group’s development and results; and

• a deferred and partially variable portion in the form of Stock Appreciation Rights or Stock Options, part of which are subject to performance conditions.

It should be noted that the compensation policy for the management (Chairman of the Board of Directors, Chief Executive Officer and members of the Board of Directors) for 2020 described herein is subject to an overall vote, which does not prejudge the outcome of individual votes on the manner in which this policy is applied to the Chairman of the Board of Directors, Chief Executive Officer and the members of the Board of Directors.

The compensation policy applicable to corporate officers in 2020 respects the social interest and contributes to ENGIE EPS’ business strategy and sustainability.

13.1.1 Compensation policy applicable to the Chairman of the Board of Directors

Mr. Thierry Kalfon was appointed as Chairman of the Board of Directors on 25 June 2019, succeeding Mr. Jean Rappe, Chairman of the Board of Directors since 7 March 2018.

Mr. Thierry Kalfon has no employment contract (contrat de travail) with the Company.

Fixed and variable compensation

For the financial year 2020, the Chairman of the Board of Directors will not receive any fixed or variable compensation.

Attendance fees (jetons de présence)

For the financial year 2020, the Chairman of the Board of Directors will not receive any attendance fees.

13.1.2 Compensation policy applicable to the members of the Board of Directors

The members of the Board of Directors are appointed for a three-year term.

The Board of Directors shall allocate attendance fees between the directors at the proposal of the Remuneration and Nomination Committee, on the basis of the global amount of the attendance fees allocated by the Annual General Meeting. This allocation takes into account the date of nomination or resignation as Board Member as well as the effective participation of the Directors to the Board of Directors’ meetings and Board committees’ meetings. The full compensation is due only if a Board member is appointed for the whole year and attends at least 80%

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of the meetings. When the Board Member is appointed for a portion of the year, the full applicable attendance fee is proportional to period he or she was actually member of the Board of Directors. When the attendance is less than 80% the applicable attendance fees are proportional to participation.

The performance of particular missions may entail a supplementary amount of attendance fees attribution or exceptional remuneration payment, subject to the regime of the regulated agreements.

A fixed compensation, proportionally to the effective period in which the Board Member is part of the Board of Directors during the year, is allocated for the participation to specialized committees.

The total compensation for the Board of Directors related to the financial year 2020 is set to €120,000. The allocation of the remuneration to each board member will be proposed by the Remuneration and Nomination Committee by the end of the financial year considering the following:

• Members of the Board of Directors appointed by ENGIE will not receive any fixed or variable compensation.

• The allocation will consider participation to dedicated committee (please refer to paragraphs 14.3 and 14.4).

The table below summarizes the amount of annual attendance fee as well as allocation rules allocated between each committee for the financial year 2020:

Board of directors Board Member

Audit committee member

Remuneration and

Nomination Committee

Member

Independence

Committee Member

Attendance fees (participation of 80% or more)

ENGIE representative on the Board of Directors - - - -

Independent Board Member 40,000

Fixed annual compensation


Independent Board Member 5,000 5,000 5,000

As a reminder, in addition to the above information, Mr. Giuseppe Artizzu, receives a compensation as board member in the controlled company EPS Elvi. The compensation that Mr. Artizzu will receive in 2020 is detailed as follows:

• Fixed compensation: €140,000

• Variable compensation: Mr Artizzu is eligible to a bonus based on qualitative and quantitative targets, as appreciated by the Board of Directors at the end of the financial year (or the beginning of the next financial year). For the financial year 2020, the variable compensation is settled to a maximum amount of 25% of his fixed compensation. The full details of the targets of each criteria and sub-criteria and the details of their assessment cannot be fully disclosed for reasons of confidentiality.

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13.1.3 Compensation policy applicable to the Chief Executive Officer (CEO)

Mr. Carlalberto Guglielminotti is the Chief Executive Officer of the Company since 22 December 2014 and of EPS Manufacturing since 14 November 2013. He also held operating and executive functions within all ENGIE EPS Group companies. His compensation is paid pursuant to a Directorship Agreement between him, ENGIE EPS and EPS Elvi Energy S.r.l. dated 26 June 2018 (and amended on 25 June 2019).

Fixed compensation

CEO fixed compensation for 2020 is settled to €195,000. This fixed compensation is paid in 13 monthly instalments.

The fixed compensation of the CEO may be reviewed on the long-term, outside of any overall salary review that could be applied to all the other Company's employees and except for exceptional events.

Variable compensation

The CEO is eligible to a bonus based on qualitative and quantitative targets, as appreciated by the Board of Directors at the end of the financial year (or the beginning of the next financial year). These criteria are aligned with the Company’s financial performance over the relevant financial year and, for the qualitative one, on the longer term operational and strategic performance achievements.

For the financial year 2020, the variable compensation of the CEO is settled to a maximum amount of 35% of his fixed compensation, corresponding to a maximum of €68,250.

The criteria for the allocation of the variable compensation consist:

• for 50%, of the variable compensation of quantitative criteria that are directly correlated with the Company’s performance indicators: revenues, EBITDA and Cash Flow generation. Those indicators weight respectively 50%, 25% and 25%; and

• for 50%, of qualitative criteria based on people retention, successful positioning in Giga Storage (successful achievement of bidding in major projects) and successful positioning in EV market. Those indicators weight respectively 50%, 25% and 25%.

The full details of the targets of each criteria and sub-criteria and the details of their assessment cannot be fully disclosed for reasons of confidentiality.

Benefits in kind

The CEO is entitled to the following benefits:

• a company car is allocated to the CEO (€16,391);

• a private medical, health & care insurance (€4,420);

• a key man insurance (€4,485);

• a private insurance policy for all the potential liabilities arising from and/or in connection to the office and to the exercise of the relating powers (D&O - Directors’&Officers’ Liability, €5,450). Details of the insurance policy are

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not available to the CEO. The insurance is related to the whole Board of Directors.

Attendance fees (jetons de présence)

For the financial year 2020, the CEO will not receive attendance fees.

Non-compete indemnity post-employment

Mr. Carlalberto Guglielminotti is entitled to an indemnity equal to 60% of the fixed compensation for the prohibition to perform any competitive activities during the two years following the termination of his employment agreement.

13.1.4 Allocation of Stock Appreciation Rights or Stock Options to the corporate officers

During 2020, after the approval of the shareholders at the upcoming Annual General Meeting called to approve the financial statements for the financial year ended on 31 December 2019, a new plan of Stock Appreciation Rights or Stock Options will be put in place. The purpose of this plan is to tie a part of the salary to the performance of the stock on the market. The Company believes that the performance of the share price is an adequate measure of how the beneficiaries of the plan will have contributed to the performance of ENGIE EPS and, therefore, that this is aligned with the objectives of the Company’s corporate officer’s compensation policy.

Beneficiaries of the plan will be employees and Directors of ENGIE EPS and its subsidiaries, including corporate officers.

The plan will have the following main conditions:

• Strike Price: pursuant to article L.225-177 para 4. of the French Commercial Code applicable to stock options (for new shares), the strike price of the stock options, but also of the SARs, will be at least equal to 80% of the average trading prices over the 20 trading days preceding the day on which the stock options or the SARs are granted.;

• Duration of the plan: 3 years;

• First exercise date: 18 months after the grant date;

• Exercise schedule: over the remaining 18 months of the plan.

The plan will grant 1 million of instruments (Stock Appreciation Rights or Stock Options) of which:

• 400,000 to be allocated in 2020;

• 600,000 for other allocations.

13.2 Components of the total compensation paid or awarded during the financial year 2019 – Ex post Votes

13.2.1 Components of the total compensation paid or awarded during the financial year 2019 (overall ex post vote)

The paragraphs below present the compensation policy implemented in 2019 as

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well as the fixed, variable or exceptional components making up the total compensation and benefits of any kind paid or awarded for the prior financial year to the members of the Board of Directors, the Chairman of the Board of Directors and the Chief Executive Officer.

The total compensation for 2019 described below complied with the compensation policy adopted by the Annual General Meeting on 25 June 2019.

The combination between fixed and variable remuneration (with the last being connected to Group results and specific target assigned to each beneficiary) contributes to the long-term performance of the company.

The compensation granted to the Chairman of the Board of Directors and the Chief Executive Officer for the 2018 financial year have been approved by the Annual General Meeting of June 2019 (fourteenth and fifteenth resolutions).

The table below shows the percentage of approval of the resolutions relating to the Say on Pay “ex post” vote at the 2018 and 2019 Annual General Meetings.

Shareholders’ approval % on Say on Pay “ex post” vote Chief Executive Officer Chairman of the Board

2018 (2017 ex post vote) 97,87% 100%

2019 (2018 ex post vote) 95.35% 100%

The Company’s principles and criteria for determining, allocating and granting the fixed, variable and extraordinary components of overall compensation and benefits of all kind that may be granted to the members of the Board of the Directors, the Chairman and the Chief Executive Officer for the financial year ending 31 December 2019 are regulated by the general rules and have been submitted to the vote of the shareholders at the Annual General Meeting called to rule on the financial statements for the financial year ended on 31 December 2019.

13.2.2 Remuneration Ratio under article L.225-37-3, n. 6, of the French Commercial Code

Ratios are illustrated in the chart below. Please consider that during the years ending on 31 December 2015, 31 December 2016 and 31 December 2017, ENGIE EPS had no employees:

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Remuneration Ratios 2015 2016 2017 2018 2019

ENGIE EPS Group payroll on FTE basis, excluding CEO and Chairman n.a. 2,687,281 3,839,359 4,604,336 5,615,079

Average compensation per FTE n.a. 40,109 47,399 48,467 53,477

Median compensation per FTE n.a. 31,488 38,139 38,687 45,239

ENGIE EPS Group payroll on FTE basis, excluding CEO and Chairman 0 0 0 429,974 511,252

Average compensation per FTE 0 0 0 47,775 46,477

Median compensation per FTE 0 0 0 43,320 39,039

CEO Compensation excl. LTI / Group Average compensation per FTE n.a. 4 4 4 5

CEO Compensation excl. LTI / Group Median compensation per FTE n.a. 5 5 5 5

CEO Total Compensation / ENGIE EPS Average compensation per FTE n.a. n.a. n.a. 31 5

CEO Total Compensation / ENGIE EPS Median compensation per FTE n.a. n.a. n.a. 34 6

Chairman1 Compensation excl. LTI / Group Average compensation per FTE n.a. 1 1 0 0

Chairman1 Compensation excl. LTI / Group Median compensation per FTE n.a. 2 1 0 0

Chairman1 Total Compensation / ENGIE EPS Average compensation per FTE n.a. n.a. n.a. 0 0

Chairman1 Total Compensation / ENGIE EPS Median compensation per FTE n.a. n.a. n.a. 0 0

(1) Mr. Thierry Kalfon was appointed as Chairman of the Board of Directors on 25 June 2019, succeeding Mr. Jean Rappe, Chairman of the Board of Directors between 7 March 2018 and 25 June 2019 who himself succeeded Mr. Massimo Prelz Oltramonti

The chart above outlines how the evolution of the CEO’s compensation is in line with company growth and the evolution of ENGIE EPS Group personnel’s compensation.

Ratios under L.225-37-3, n. 6, of the French Commercial Code are calculated considering the following elements:

- The representative perimeter has been considered taking into account all ENGIE EPS SA employees including the ENGIE EPS SA Italian permanent establishment, which was established in 2018. Before that, ENGIE EPS SA had no employees.

- In the numerator, the compensation and benefits of any kind for the Chief Executive Officer and the Chairman of the Board (when the Chairman of the Board has received compensation during the years considered) for the relevant period due (even if it is paid the following year) from companies included in the scope of consolidation within the meaning of article L.233-16. The remunerations are considered on a gross basis excluding employer charges and contributions based on these remunerations.

- In the denominator:

• the average compensation due to employees (other than the Chief

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Executive Officer and the Chairman of the Board), for each year under consideration, taking into account the annual fixed compensation and the allocated variable compensation (even if it is paid the following year) on a full year basis (i.e. considering the annual contractual compensation also for those employees employed for a part of the year ).

• the median compensation on the same bases of the previous point.

- The compensation includes:

• Fixed compensation related to each year;

• Variable compensation related to each year (paid or to be paid during the following year);

• Exceptional compensation (even if is paid the following year);

• Compensation as board member;

• LTI: long-term compensation instruments and multi-year variable compensation, allocated on each financial year, valued at IFRS value at the date of allocation. The valuation upon allocation is not necessarily representative of the value at the time of payment, in particular if the performance conditions aren’t met;

• Benefits in kind.

In order to be clear and comprehensive, ENGIE EPS Group also illustrates ratios related to the whole group perimeter, calculated considering the following elements:

- The representative perimeter has been considered taking into account all ENGIE EPS Group employees.

- In the numerator, the compensation and benefits of any kind for the Chief Executive Officer and the Chairman of the Board (when the Chairman of the Board has received compensation during the years considered) for the relevant period due (even if it is paid the following year) excluding the Long Term Incentives, from companies included in the scope of consolidation within the meaning of article L.233-16. The remunerations are considered on a gross basis excluding employer charges and contributions based on these remunerations.

- In the denominator:

• the average compensation due to employees (other than the Chief Executive Officer and the Chairman of the Board), for each year under consideration, taking into account the annual fixed compensation and the allocated variable compensation (even if it is paid the following year) on a full year basis (i.e. considering the annual contractual compensation also for those employees

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employed for a part of the year ).

• the median compensation on the same bases of the previous point.

- The compensation includes:

• Fixed compensation related to each year;

• Variable compensation related to each year (paid or to be paid during the following year);

• Exceptional compensation (even if is paid the following year);

• Compensation as board member;

• Benefits in kind.

Pursuant to Ordinance no. 2019-1234 of November 27, 2019, the ratios between the level of remuneration of the Chairman of the Board of Directors and the Chief Executive Officer and the average and median of ENGIE EPS’s employees are communicated below as well as their annual change, the change in ENGIE EPS’s performance and in the average remuneration of ENGIE EPS’s employees over the five most recent financial years.

Evolution of compensations and performances 2015 2016 2017 2018 2019

Statutory operations and results of the financial year

Turnover (excluding taxes) 0 1,874,887 1,417,044 3,187,152 5,424,256

Result before taxes, amortization and provisions (2,487,347) (1,763,130) (1,319,986) (2,369,296) (2,604,521)


Consolidated operations and results of the financial year

Turnover (excluding taxes) 381,521 7,087,993 9,898,994 15,540,960 19,684,041

Result after taxes, before amortization and provisions excluding Stock Option and Incentive Plans expenses (3,151,651) (3,976,389) (9,827,992) (8,813,169) (1,744,704)


Results per share (statutory)

Result after taxes, before amortization and provisions (0.32) (0.22) (0.16) (0.19) (0.20)



Results per share (Consolidated)

Result after taxes, before amortization and provisions excluding Stock Option and Incentive Plans expenses (0.40) (0.50) (1.16) (0.69) (0.14)



ENGIE EPS EMPLOYEES (*)

Number of employees 0 0 0 9 7

Average compensation per FTE 0 0 0 47,775 46,477

Median compensation per FTE 0 0 0 43,320 39,039

ENGIE EPS GROUP EMPLOYEES

Group FTE 57 86 92 97 101

Average compensation per FTE n.a. 40,109 47,399 48,467 53,477

Median compensation per FTE n.a. 31,488 38,139 38,687 45,239

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CEO and Chairman compensation

CEO Total Compensation 2,870,157 151,371 199,150 1,482,034 242,671

of which

Fixed compensation 130,000 130,000 130,000 180,000 185,000

Variable compensation 0 0 0 22,500 32,375

Exceptional remuneration 0 0 50,750 0 0

Compensation as board member 10,000 10,000 10,000 0 0

Benefits in kind 0 11,371 8,400 8,400 25,296 LTI (Valorisation at fair value of stock options/warrants/SARs

granted during the financial year, exercisable during the following 4 years)

2,730,157 0 0 1,271,134 0

Chairman Total Compensation 145,469 136,775 50,000 0 0

of which

Fixed compensation 30,000 50,000 50,000 0 0

LTI (Valorisation at fair value of stock options/warrants/SARs granted during the financial year) 115,469 86,775 0 0 0

Ratios CEO Compensation excl. LTI / Group Average compensation per FTE n.a. 4 4 4 5

CEO Compensation excl. LTI / Group Median compensation per FTE n.a. 5 5 5 5

CEO Total Compensation / ENGIE EPS Average compensation per FTE n.a. n.a. n.a. 31 5

CEO Total Compensation / ENGIE EPS Median compensation per FTE n.a. n.a. n.a. 34 6

Chairman Compensation excl. LTI / Group Average compensation per FTE n.a. 1 1 0 0

Chairman Compensation excl. LTI / Group Median compensation per FTE n.a. 2 1 0 0

Chairman Total Compensation / ENGIE EPS Average compensation per FTE n.a. n.a. n.a. 0 0

Chairman Total Compensation / ENGIE EPS Median compensation per FTE n.a. n.a. n.a. 0 0

(*)ENGIE EPS SA employees included in the ENGIE EPS SA Italian permanent establishment, which was established in 2018. Before that, ENGIE EPS SA had no employees.

13.2.3 Compensation for the members of the Board of Directors during the financial year 2019

The Board of Directors allocated 2019 attendance fees between the Directors at the proposal of the Remuneration and Nomination Committee, on the basis of the global amount of the attendance fees allocated by the 2019 Annual General Meeting. The allocation considered the effective participation of the Directors at the Board meetings and their participation to the specialised committees of the Board as well as the participation to dedicated committee (please refer to paragraphs 14.3 and 14.4).

For the financial year 2019, Mr. Carlalberto Guglielminotti, Chief Executive Officer and Mr. Thierry Kalfon, Chairman of the Board of Directors since 25 June 2019, have not received any attendance fees as members of the Board of Directors.

The shareholder’s General Meeting, by means of decisions dated 25 June 2019, set the global maximum amount of attendance fees to be allocated among the members of the Board of Directors for the financial year to be ended on 31 December 2019 at €120,000.

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The table below summarizes the amount of annual attendance fee as well as allocation rules allocated between each committee for the financial year 2019:


Audit committee member

Remuneration and

Nomination Committee

Member

Independence

Committee Member

Attendance fees (participation of 80% or more)


Independent Board Member 40,000

Fixed annual compensation


Independent Board Member 5,000 5,000 5,000

The table below summarizes the attendances fees allocated for the financial year 2019:


Audit Committee

member

Remuneration and Nomination

Committee Member Independence

Committee Member

Attendance fees

ENGIE representatives on the Board of Directors - - - -

Independent Board Members 60,822

Massimo Prelz Oltramonti 40,000

Romualdo Cirillo(1) 20,822

Fixed annual compensation ENGIE representatives on the Board of Directors - - - -

Independent Board Members 5,000 7,603 10,000

Massimo Prelz Oltramonti 5,000 5,000 5,000

Romualdo Cirillo (1) 2,603 5,000 (1) Fees for Mr Cirillo are recognized since the date of his appointment, as for policy described in paragraph 13.1.2. The Independence

committee was established on 30 September 2019, after the date of Mr. Cirillo appointment. The full annual attendance fee was recognized for 2019.

The Board of Directors, decided on 12 December 2019 to approve the Remuneration and Nomination Committee suggestion to allocate the global amount of €83,425 in such a way that (i) Mr. Massimo Prelz Oltramonti independent Board member received €55,000; (ii) Mr. Romualdo Cirillo independent Board member from 25 June 2019 received €28,425.

Name Title Compensation as ENGIE EPS board

member Compensation as EPS

Elvi board member

Thierry Kalfon Chairman - -

Carlalberto Guglielminotti CEO - -

Giuseppe Artizzu Board Member - 140,000

Anne Harvengt Board Member - -

Massimo Prelz Oltramonti Board Member 55,000 -

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Jean Rappe Board Member - -

Romualdo Cirillo Board Member 28,425 -

Cristina Tomassini Board Member - -

Elise Collange Board Member - -

Csilla Monfils Board Member - -

TOTAL 83,425 140,000

As a reminder, Mr. Giuseppe Artizzu, receives a compensation as board member in the controlled company EPS Elvi. The compensation received by Mr. Artizzu is detailed as follows:

- Fixed compensation: €140,000

- Variable compensation: €8,750 corresponding to 6.25% of his fixed compensation. The variable compensation allocated considers 25% of objectives met. Upon Remuneration and Nomination Committee proposal, the variable remuneration was allocated considering the performance assessment criteria used by the CEO in the assessment process of members of the executive committee, of which Mr. Artizzu is a member. Those criteria consider a set of performance criteria, in detail:

• Ambition and initiative (15%)

• Forward thinking and innovation (15%)

• Stress management (15%)

• Attitude and cooperation (5%)

• Good teamwork (5%)

• Technical knowledge (10%)

• Communication (5%)

• Reliability and go-to person (5%)

• Productivity and deadlines (3%)

• EPS and ENGIE orientation (10%)

• Integrity and respect (10%)

• Improvement (2%)

The table below summarizes the remuneration granted to each members of the Board in 2019:

Name Title Fixed compensation


Compensation as board member

LTI **

Benefits in kind

Thierry Kalfon* Chairman - - - - -

Carlalberto Guglielminotti CEO 185,000 32,375 - - 25,296

Giuseppe Artizzu

Board Member - 8,750 140,000 - 12,563

Anne Harvengt Board Member - - - - -

Massimo Prelz Oltramonti

Board Member - - 55,000 - -

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Name Title Fixed compensation


Compensation as board member

LTI **

Benefits in kind

Jean Rappe Board Member - - - - -

Romualdo Cirillo

Board Member - - 28,425 - -

Cristina Tomassini

Board Member - - - - -

Elise Collange Board Member - - - - -

Csilla Monfils Board Member - - - - -

TOTAL 185,000 41,125 223,425 0 37,859

* Chairman of the Board of Directors since 25 June 2019. ** considering only Long-Term Incentives granted during 2019. Please also refer to paragraph 13.2.7for details of the Incentive Plan granted in 2018.

13.2.4 Components of the compensation paid or awarded during financial year 2019 to the Chairman of the Board of Directors (individual ex post vote)

Mr. Thierry Kalfon has no employment contract (contrat de travail) with the Company.

For the financial year 2019, Mr. Thierry Kalfon, Chairman of the Board of Directors since 25 June 2019, has not received any fixed or variable compensation. Therefore, there will be no “ex post” resolution concerning him at the 2020 general meeting.

13.2.5 Components of the compensation paid or awarded during financial year 2019 to the Chief Executive Officer (individual ex post vote)

The elements of the CEO compensation were established in accordance with the compensation policy for the Chief Executive Officer approved by the shareholders at the Annual General Meeting of 25 June 2019 (sixtheenth resolution).

The details of compensation paid or awarded during the financial year 2019 to Carlalberto Guglielminotti, as Chief Executive Officer of ENGIE EPS, are given in the table below.

(€) 2019 2018 2017

Carlalberto Guglielminotti (Chief Executive Officer) Due Paid Due Paid Due Paid

Fixed remuneration 185,000 209,423 (3) 180,000 155,577 (3) 130,000 130,000

Variable remuneration 32,375 22,500 22,500 0 0 0

Multi-year variable remuneration 604,490 604,490 0 0 0 0

Exceptional remuneration(1) 0 0 0 50,750 (4) 50,750 (4) 0

Attendance fees 0 0 0 0 10,000 10,000

Benefits in kind(2) 25,296 25,296 8,400 8,400 8,400 8,400

TOTAL 847,161 861,709 210,900 214,727 199,150 148,400

1. Following the ENGIE Acquisition, on 24 March 2018 the Board of Directors has decided to allocate an exceptional compensation to Mr. Carlaberto Guglieminotti in consideration of its contribution to the success of the strategic alliance with ENGIE.

2. Car and insurance , in 2018 and 2017 the amount is only referred to car benefit 3. The CEO received a fixed compensation of €155,577 in 2018. The difference between this amount and the fixed annual compensation

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for 2018 as approved by the general meeting held on 26 June 2018 (i.e. €180,000) was paid out in one lumpsum in July 2019. 4. In the 2017 registration document (page 141) and in the 2017 corporate governance report (page 33), an amount of €38,750 was

mentionned in “Variable remuneration”, in addition to the “Exceptionnal remuneration” of €50,750. However, the €38,750 were already included in the “Exceptionnal remuneration” of €50,750.

Fixed compensation

For the financial year 2019, the CEO has received a fixed compensation of €185,000 as resolved upon by the Board of Directors on 14 May 2019 and approved by the Shareholders on 25 June 2019 by means of the sixteenth 2019 AGM Resolution.

As required by the Italian employment regulation, under the Directorship agreement, he also matures a retirement indemnity (“Trattamento di Fine Rapporto” or “TFR”). As of 31 December 2019, accrued TFR was €23 k.


For year 2019, the quantitative objectives were based on consolidated sales and EBITDA targets for the ENGIE EPS Group, in line with the decisions taken by the Board of Directors from time to time (counting each for 25%) and the qualitative objectives were based on the integration of ENGIE EPS into the ENGIE Group, including through the reshaping of certain existing activities, in line with the decisions taken by the Board of Directors from time to time.

The Board of Directors held on 1 April 2020 considered all qualitative objectives met while quantitative objectives were considered not met. Based on the compensation policy Mr Guglielminotti will receive a variable compensation of €32,375, equal to the 50% of the 35% of his fixed compensation, after the approval of the shareholders at the upcoming Annual General Meeting called to approve the accounts for the financial year ended on 31 December 2019 (vote ex post). The full details of the targets of each criteria and sub-criteria and the details of their assessment cannot be fully disclosed for reasons of confidentiality.

Non-compete indemnity post-employment

Mr. Carlalberto Guglielminotti is entitled to an indemnity equal to 60% of the fixed compensation for the prohibition to perform any competitive activities during the two years following the termination of his employment agreement.

Stock Appreciation Rights

No Stock Appreciation Rights were allocated in 2019.

13.2.6 Provisional amounts reported by the ENGIE EPS Group and its subsidiaries for the purposes of payment of pensions, retirement or other benefits

The ENGIE EPS Group has not provisioned amounts for the purposes of payment of pensions, retirement or other benefits for Company representatives. The ENGIE EPS Group did not pay any arrival or departure bonus to its directors.

13.2.7 Allocation of Stock Appreciation Rights to the corporate officers

As a reminder, on 6 March 2018,in the context of the ENGIE SPA, an incentive plan

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was adopted by the Board of Directors that replaced the existing Stock-Options (options de subscription d’actions) and warrants (bons de souscription d’actions) that have been granted to Directors, managers and employees since the IPO, by a “cash” instrument, i.e. SARs, which reproduces the economic profile of a stock option or a warrant.

Following this new plan:

– the existing vested stock options and warrants shall be exercised or waived by their beneficiaries, except for 200,000 vested stock options granted to the CEO and which were exercisable but which were replaced by SARs (107,970 of the stock options from Plan n.1 with an original strike price of €0.2/share and 92,030 vested stock-options from Plan n.2 with an original strike price of €5.11/share);

– the unvested stock options and warrants were replaced by SARs on a one-to-one basis – different SARs having strike prices matching the strike prices of the different existing stock options or warrants;

– the SARs are not subject to any performance conditions and are only linked to the condition of presence within ENGIE EPS Group;

– in addition, “Additional SARs” with special characteristics, including performance conditions, linked to the achievement of revenue and EBITDA levels consistent with the 2020 Strategic Plan and the Company's retention rates for 2018 to 2020 (the “Additional SARs”), were distributed to the CEO and other managers.

All beneficiaries have the right (but not the obligation) to exercise the SARs or Additional SARs after the vesting period associated to each plan. Additional SARs’ strike price has been set by the Board of Directors at €3.66. Following the exercise of a SAR, ENGIE EPS will recognise to the beneficiary the exercise value in a cash amount equal to the number of SARs exercised, multiplied by the difference between the strike price and the VWAP price of ENGIE EPS share published on the close of Euronext Paris Exchange the day of exercise.

The SARs and the Additional SARs benefit from a floor price of €9.50 adjusted to €8.87 as a result of the price adjustment following the capital increase occurred in August 2018.

On 28 September 2018, the Board of Directors resolved upon the adjustment of the strike price and of the floor price following the capital increase that have occurred on August 201821. The adjustment amounts to €0.63 with respect to the strike price and the original floor price.

The table below summarises the allocation of SARs decided by the Board of Directors on 6 March 2018 to the Chief Executive Officer, the Chairman of the Board of Directors and the other members of the Board of Directors, in replacement of the existing unvested stock-options or warrants.

21 If the VWAP price of ENGIE EPS share published on the close of Euronext Paris Exchange the day of exercise is lower than the floor

price, the exercise value of the SARs will be equal to the number of SARs exercised, multiplied by the difference between the strike price and the floor price.

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Allocation of Stock Appreciation Rights to Carlalberto Guglielminotti (CEO) N° of plan and strike price

Number of

allocated SO

Number of

vested SO

Number of

unvested SO

Number of SARs allocated

*

Number of SARs

exercised** Exercise terms

Plan n°1

319,476 319,476 0 107,970 64,999

30% of SARs from 6 December 2019, 70% of SARs per quarterly tranches

of 17,5% in the following two

financial years

March 2015

Initial strike price: € 0,20

Plan n°2

131,472 92,030 39,442 108,693 21-apr-

15

Initial strike price: € 5,11 TOTAL 450,948 411,506 39,442 216,663 64,999

Number of Additional SARs allocated: 291,096 Initial strike price: €3.66

Exercise terms: Subject to the completion of the condition of presence within ENGIE EPS Group, 100% from 7 September 2021

* In accordance with the Annex 10 of the SPA ENGIE, 22,779 SARs were transferred from Carlalberto Guglielminotti to Giuseppe Artizzu ** Pursuant to their terms 64,999 SARs (related to 6 March 2015 Plan) have been exercised by Carlalberto Guglielminotti during 2019. The number of SARs still held by Carlalberto Guglielminotti is now amounting to 442,760.

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Allocation of Stock Appreciation Rights to Massimo Prelz Oltramonti (Chairman of the Board of Directors at the date of allocation)

N° of plan and strike price

Number of

allocated BSA

Number of

vested BSA

Number of

unvested BSA


*

Number of SARs

exercised** Exercise

terms

Plan n°2

32,868 23,008 9,860 9,860 9,860

Same as for the original

BSA plans

21-apr-15

(i.e. quarterly tranches

of the 6,5%

starting from April 2018)


Plan n°5

40,000 0 40,000 40,000 33,200

Same as for the original

BSA plan

9 September 2016

(i.e. first tranche

of 37,5% as at

8/3/2018 and

quarterly tranches

of the 6,5%

starting from June 2018)


TOTAL 72,868 23,008 49,860 49,860 43,060

* Pursuant to their terms 43,060 SARs (9,860 related to Plan n°1 and 33,200 related to Plan n°2) have been exercised by Massimo Prelz Oltramonti during 2018 and 2019. The number of SARs still held by Massimo Prelz Oltramonti is now amounting to 6,800.

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Allocation of Stock Appreciation Rights to Giuseppe Artizzu (Member of the Board of Directors at the date of allocation)

N° of plan and strike price

Number of

allocated SO/BSA

Number of

vested SO/BSA

Number of

unvested SO/BSA


*

Number of SARs

exercised** Exercise

terms

Plan n°2

98,604 69,022 29,582 29,582

30% of SARs from 7 March 2020,

70% of SARs

per half yearly

tranches of 17,5%

in the following

two financial

years

21-apr-15 Initial strike price: € 5,11 Plan n°3

45,236 25,785 19,451 19,451

26 November 2015 Initial strike price: € 5,81 Plan n°6

30,000 0 30,000 30,000

20 December 2016 Initial strike price: € 4,56 Plan n°4

0 0 0 11,933 22-apr-16

Initial strike price: € 4,56 Plan n°2

0 0 0 22,779 21-apr-15

Initial strike price: € 5,11(*) TOTAL 173,840 94,807 79,033 113,745 0 (*) SARs transferred by Carlalberto Guglielminotti to Giuseppe Artizzu according to the Annex 10 of the SPA ENGIE.

Number of Additional SARs allocated: 42,808 Initial strike price: €3.66 Exercise terms: Subject to the completion of the condition of presence within ENGIE EPS Group, 20% from 7 March 2020, 30% of SARs per two tranches of 15% in the following financial year, 50% from 7 September 2021

13.2.8 Free shares

No free shares were assigned to any member of the management. Consequently, the table n° 6, 7 and 10 provided in the AMF recommendation n° 2014-14 are not applicable.

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14 FUNCTIONING OF ADMINISTRATIVE AND EXECUTIVE BODIES

14.1 Management of the Company (members of the management and of the Board of Directors)

The composition and information relating to the members of the Board of Directors are presented in Chapter 12 “Administrative and executive bodies” of this Universal Registration Document.

14.2 Information on the agreements binding on the directors and the Company

To the best of the Company’s knowledge, there are no agreements binding one of the members of the Board of Directors (including the managing director) and the Company or one of its subsidiaries.

14.3 Specialised committees

On 6 March 2015, pursuant to article 11 of the Internal Rules, the Board of Directors created two (2) committees: the Audit Committee and the Remuneration and Nomination Committee, the composition, attributions and operating rules of which are described below. According to the Internal Rules, each specialised committee is composed of at least two (2) members. The members of the specialised committees are appointed from among the members of the Board of Directors and at least one (1) member shall be an Independent Director.

14.3.1 Audit Committee

(i) Membership

The Audit Committee is chaired by Massimo Prelz Oltramonti and as of 31 December 2019 was composed of three members (two of which are independents), as follows:

• Massimo Prelz Oltramonti;

• Romualdo Cirillo; and

• Cristina Tomassini.

All members of the Audit Committee had remarkable expertise in financial and/or accounting matters necessary for carrying out their duties and at least one of them have specific expertise in financial or accounting matters.

The duration of the mandates of the members of the Audit Committee coincided with their mandate as member of the Board of Directors. Therefore, it may be renewed at the same time as this latter mandate.

The following table describes the evolution of the composition of the Audit Committee:

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(ii) Role and functioning

The Audit Committee assists the Board of Directors with its mission regarding the monitoring and preparation of the annual corporate and consolidated financial statements and of the information submitted to the shareholders. It is also responsible for ensuring the monitoring of issues relating to the preparation for auditing of the accounting and financial information, as well as of the legal audit of the accounts.

The Audit Committee shall notably carry out the following tasks:

(a) monitoring the elaboration process for financial information;

(b) monitoring the effectiveness of internal controls, internal audits and risk management systems relating to financial and accounting information;

(c) monitoring the legal control of the Company and consolidated accounts by the statutory auditors of the Company; and

(d) monitoring the independence of the Statutory Auditors.

In order to carry out its mission, the Audit Committee may consult the Statutory Auditors, the other Directors or the members of the finance department. The Audit Committee may also invite the Statutory Auditors to attend its meetings.

It may also consult the employees of ENGIE EPS Group responsible for drawing up the accounts and internal controls, notably the Administrative Director, ENGIE EPS Group Internal Controller and the Chief Financial Officer. The Audit Committee shall be able to consult external experts as required.

The Audit Committee, under the same conditions provided for the Board of Directors, may take valid decisions during its meetings, either physically or by means of teleconference or videoconference, provided that each meeting should be attended by at least half of the Committee’s members. Notices of calling shall include an agenda and may be transmitted either verbally or by any other means.

The Audit Committee shall take its decisions with a majority of members having voting rights and taking part in the meeting, with each member holding one vote.

The Audit Committee shall meet as often as it is deemed necessary and, in any event, at least twice a year on the occasion of the preparation of the Company’s annual and half-yearly accounts. As far as it is possible, these meetings shall be held before the meetings of the Board of Directors called to approve the accounts and at least two days before these Board of Directors meetings.

Committee Departures Appointments Renewal

Audit Committee

Sabrina Maggio (25/06/2019) Audrey Robat (25/06/2019)

Romualdo Cirillo (25/06/2019) Cristina Tomassini (25/06/2019)

Massimo Prelz Oltramonti (25/06/2019)

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The Audit Committee shall submit its conclusions, recommendations, proposals or opinions to the Board of Directors on a regular basis, in order to support the Board of Directors in taking its decisions.

In the event the Audit Committee, performing its duties, detects a significant risk, which have not been dealt with adequately, it shall alert the Board of Directors immediately.

(iii) Major accomplishment in 2019

The work of this committee is based on the recommendations of the AMF Audit Committee Working Group of June 14, 2010.

In 2019, the Audit Committee met three times (with a participation rate of 93,3%) and, in addition, single Audit Committee Members heard ENGIE EPS Group’s Managing Director, Chief Financial Officer, and the Statutory Auditors in dedicated meetings.

The following topics were discussed at these various meetings:

– financial statements: review of the financial statements and of the consolidated financial statements for the financial year ended on 31 December 2019 (this examination was performed with sufficient time before the relevant meetings of the Board of Directors) and review of the related press releases; and

– review of the financial statements for the 2019 first half and of the related press release.

14.3.2 Remuneration and Nomination Committee

(i) Membership

The Remuneration and Nomination Committee is chaired by Massimo Prelz Oltramonti and as of 31 December 2019 was composed of three members (two of which were independent), as follows:

• Massimo Prelz Oltramonti;

• Romualdo Cirillo; and

• Elise Collange.

The Remuneration and Nomination Committee members have been appointed in consideration of their independence and competences regarding selection and remuneration of listed companies’ representatives.

The mandate of the Remuneration and Nomination Committee members has the same duration of the mandate as Board of Directors members and may be renewed contextually.

The following table describes the evolution of the composition of the Remuneration and Nomination Committee:

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The Remuneration and Nomination Committee, in its capacity as “nomination committee” has the following mission: examination and proposal to the Board of Directors concerning candidates for the position of Directors, of Managing Director, of deputy Managing Director, of Chairman of the Board of Directors, of members and of chairman of the Audit Committee.

In that respect, the Remuneration and Nomination Committee shall assess that the candidates have the competence, knowledge and experience required to be appointed for each position, considering the interests of the shareholders. The Committee shall establish and update a succession plan for the members of the Board of Directors, the Managing Director and the principal Directors of ENGIE EPS Group, in order to propose a prompt succession solution to the Board of Directors in the event of an unforeseen vacancy.

With regard to the appointment of the Board of Directors members, the Remuneration and Nomination Committee shall notably consider the following criteria:

– desirable balance in the composition of the Board of Directors with a view to the composition and evolution of the shareholding structure of the Company; – desirable number of independent Directors; – proportion of men and women required by current regulations; – opportunity for renewing mandate; and – integrity, competence, experience and independence of each candidate.

The Remuneration and Nomination Committee shall also organise a meeting intended to select the future independent Directors and carry out its evaluation on the potential candidates before any selection.

When the Remuneration and Nomination Committee issues its recommendations, it shall insist on:

– the minimum number of independent Directors of the Board of Directors and of the specialised committees, in compliance with the principles of governance adopted by the Company; and – Annual assessment, on a case-by-case basis, of each Director situation with regard to the independence criteria listed in the internal regulations and submission of related opinions to the Board of Directors.

Committee Departures Appointments Renewal

Remuneration and Nomination Committee

Jean Rappe (25/06/2019) Alex Katon (25/06/2019)

Romualdo Cirillo (25/06/2019) Elise Collange (25/06/2019)

Massimo Prelz Oltramonti (25/06/2019)

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The Remuneration and Nomination Committee, in its capacity of “remuneration committee” shall notably carry out the missions summarised below:

(a) examination and proposal to the Board of Directors concerning the remuneration of the Directors, the Managing Director and deputy Managing Director of ENGIE EPS Group.

(b) Provision of recommendations on the remuneration of the Directors. These recommendations on remuneration shall include fixed and variable remuneration, but also, as appropriate, the share purchase or subscription of Warrants, the attributions of performance shares, the pension and social security regimes, severance benefits, benefits in kind or particular benefits and any other element of direct or indirect remuneration (also in the long term) which may constitute remuneration of the Directors. The Committee shall be informed of the principal ENGIE EPS Group executives’ remuneration and of the remuneration policies implemented within ENGIE EPS Group.

When the Remuneration and Nomination Committee issues its recommendations, it shall consider the principles of Middle Next Code to which ENGIE EPS Group adheres:

(a) Assessment of the amount of attendance fees and of their system of allocation among the Board Members, as well as the reimbursement conditions related to any costs in which they have incurred.

(b) Ensuring the observance by the Company of its obligations regarding the remuneration transparency. On this point, it shall prepare an annual report on the remuneration, to the attention of the Board of Directors, and shall review the Company’s draft annual report on the remuneration of the Directors.

The Remuneration and Nomination Committee, under the same conditions provided for the Board of Directors, may take valid decisions both during a meeting and by telephone or videoconference, provided that each meeting should be attended by at least half of the Remuneration and Committee’s members.

Notices of calling shall include an agenda and may be transmitted verbally or by any other means.

The Remuneration and Nomination Committee takes its decisions with a majority of members having voting rights and attending the meetings, which take place at least twice a year. These meetings are preferably held before the meetings of the Board of Directors convened to set the Directors’ remuneration and to allocate the attendance fees.

The Remuneration and Nomination Committee shall submit its conclusions, recommendations, proposals or opinions to the Board of Directors on a regular basis, in order to support the Board of Directors in taking its decisions.


In 2019 the Remuneration and Nomination Committee met three times (with a participation rate of 85%), and the single members had a series of individual meetings with the Managing Director and the General Manager.

The following topics were discussed at these various meetings:

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(a) review of the CEO’s compensation package and of the Say on Pay Report;

(b) review of the 2019 CEO bonus scheme;

(c) proposal of the amount of attendance fees and of their system of allocation among the Board Members;

14.4 Ad hoc Committees: the Independence Committee

On 30 September 2019, pursuant to article 12 of the Internal Rules, the Board of Directors creates an ad hoc committee: the Independence Committee, the composition, attributions and operating rules of which are described below. The Board of Directors, on 30 September 2019, also adopted the “Independence Committee Charter” in which are determined the composition, organization, role and powers of the Independence Committee.

(i) Membership

According to the Independence Committee Charter, the Independence Committee shall be composed of at least two (2) members and at most five (5) members. The members of the Independence Committee are exclusively designated from among the members of the Board of Directors and at least two-thirds of members shall be independent members of the Board of Directors.

The Independence Committee was chaired by Massimo Prelz Oltramonti and as of 31 December 2019 was composed of two members (both independent members of the Board of Directors), as follows:

• Massimo Prelz Oltramonti; and

• Romualdo Cirillo.

The Independence Committee may liaise, for the carrying of its duties, with the main executives of the Company and its Auditors. In particular, the General Manager of the Company shall be a permanent invitee (without voting right), although the Committee shall be able to deliberate without the General Manager being present.

The mandate of the Independence Committee members has the same duration of the mandate as Board Members and may be renewed contextually.


Considering that the multiple contractual relationships between the Company, its subsidiaries and entities of the ENGIE Group do not systematically fall within the procedures of articles L.225-38 et al. of the French Commercial Code on related-party transactions, and in order to provide for conflict of interest management procedures comparable to the ones entailed by the legal framework of articles L. 225-38 et al. of the French Commercial Code, the Independence Committee has been established to:

− review, before they are finalized, the allocation of work, responsibilities, revenue and potential margin, between the Company or one of its subsidiaries and an entity of the ENGIE Group when they are working, or intend to work, on a significant proposed project, tender or response to a request for proposal;

− review, before they are entered into, the significant agreements between the Company or one of its subsidiaries and an entity of the ENGIE Group, regardless of

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whether they fall within the purview of articles L.225-38 et al. of the French Commercial Code or within the purview of the provisions of the by-laws of the Company that provide for the approval of certain types of agreements by the Board of Directors; and

− every year, ahead of the Annual General Meeting, proceed with an overall review of the contractual, commercial, financial and industrial relationships between the Company and its subsidiaries and the ENGIE Group and present its conclusions to the Board of Directors.

The overall role of the Committee is to ensure that the contractual, commercial, financial and industrial relationships between the Company and its subsidiaries on the one hand and the ENGIE Group on the other hand, are conducted at arm’s length.

The Independence Committee can contact Board Members to request information about a relevant transaction or a potentially relevant transaction.

In order to allow the Independence Committee to have an overall view on a project, tender, response to a request of proposal, the Independence Committee shall be informed as early as possible.

To the extent practicable, the Independence Committee shall be informed and consulted before any final decisions which would have a bearing on the Independence Committee’s determination that a relevant transaction reflects an arms’ length relationship between the Company and ENGIE.

The Independence Committee’s determination shall be substantiated. The Chairman of the Independence Committee shall report to the Board of Directors on the determination and recommendation made by the Independence Committee with respect to each relevant transaction it examines.


In 2019, since the date of its establishment, the Independence Committee was called to review and give its determination about one relevant project of the Company. The Independence Committee analysed the project in detail and gave its determinations.

14.5 Transactions by members of the Management or of the Board of Directors on the shares of the Company (or persons related to them)

As required under article 223-26 of the French securities regulator’s (AMF) General Regulation, no material transactions on Company shares by corporate officers, directors and persons with personal ties to these officers and directors declared to the AMF pursuant to article L.621-18-2 of the French Monetary and Financial Code, were carried out during Fiscal Year 2019.

14.6 Corporate governance

In order to comply with the relevant governance and transparency principles applicable to a company whose shares are listed on a regulated market, and with the applicable obligations in terms of information to the public, the Company has decided to refer to and comply with the MiddleNext Code. Copies of such code have been made available

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to the members of the Board of Directors.

The Company complies with the recommendations set forth in the MiddleNext Code and the table below explains the way that the Company applies recommendations R 3 R 15 and R11:

MiddleNext Recommendations ENGIE EPS’ Practice and explanations

Recommendation R 3: Composition of the Board – Independent directors

According to recommendation R 3 of the Middlenext Code, the Directors’ independence criteria are:

- not to have been, during the five past years, and not to be an employee or corporate officer of the company or a subsidiary of it;

- not to have been, during the two past years, and not to be in a business relationship (customer, supplier, competitor, service provider, creditor, bank etc.) with the company or any of its subsidiaries;

- not to be a reference shareholder of the company or own a significant voting right percentage;

- not to have a personal or close familial family tie with a corporate officer or a reference shareholder;

- not to have been, during the six past years, an auditor for the company.

In footnote n°24, under the table of remuneration of corporate officers (Recommendation R 19), the Middlenext Code provides that the table should cover the Chairman of the Board of Directors, the CEO, executive officers (for Companies managed by a Board of Directors), members of the supervisory board (for Companies with an executive board appointed by the supervisory board) and the managers (for partnerships limited by shares).

According to this definition, the Chairman of the Board of Directors is a “managing corporate officer” (mandataire social dirigeant) and may not respect the first of the five criteria hereabove.

Meanwhile, recommendation R 3 of the Middlenext Code provides that:

“Independence is also a state of mind, which is embodied in a person who is fully capable of using his own freedom of judgment and, if necessary, to resisting or dismissing. Independence is a way to understand and approach responsibilities, so it is a question of personal ethics and a question of loyalty vis-à-vis the company and the other directors. That is why it falls to the board of directors to analyse, case per case, the situation of each of its members regarding the criteria hereabove. The independence is judged, at the first appointment of a director, and each year at the review and approval of the CEO’s report. If it justifies its position, the board can even consider that one of its members who does fit all the criteria is independent; on the contrary, the board can also consider that one of its members who does fit all the criteria is not independent.”

As mentioned in the Government Report of 2019 adopted by the Board of Directors, Mr. Prelz-Oltramonti has been considered as independent. He fits four of the five criteria hereabove stated. Regarding the first criteria – that he does not fit because from 8 April 2016 until 7 March 2018 he was CEO of the Company — the Board of Directors used the ad hoc judgment ability hereabove described to determine that he was nevertheless independent. This judgment is founded on the criteria below:

– experience and standing of Mr. Prelz-Oltramonti;

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– his age (65 years old – senior member of the Board of Directors) and the independence of his personal situation; and

– the way, since his appointment to the Board of Directors in 2015 and as Chairman of the Board of Directors from 8 April 2016 and until 7 March 2018, he accomplished his director’s duties – and in particular his freedom of speech.

Furthermore, the Board of Directors considered that Mr. Romualdo Cirillo, who has no business relationships with ENGIE EPS, meets the independence criteria.

Recommendation R 15: Concurrent terms of office between an employment agreement and a corporate office

According to Recommendation R 15 of the Middlenext Code, the Board of Directors, in accordance with the law, should review and authorize or not the concurrent terms of office of the employment agreements of the Chairman of the Board of Directors, the CEO, executive officers (for Companies managed by a Board of Directors), members of the Supervisory Board (for Companies with a managing body appointed by the Supervisory Board) and the managers (for partnerships limited by shares) and justify its decision in a detailed way.

In respect of the decision of the Board of Directors date on 24 April 2018, an employment agreement was signed on 26 June 2018 with EPS Elvi.

Carlalberto Guglielminotti, concurrently with his responsibilities as CEO, has some executive and operational functions in each of the subsidiaries of ENGIE EPS Group, in particular the Italian subsidiaries:

-chief executive officer of EPS Manufacturing – historical operational subsidiary of ENGIE EPS Group;

-chief executive officer of EPS Elvi;

-chief executive officer of MCM Energy Lab S.r.l;

-director of Electro Power Systems Inc.; and

-director of Electro Power Systems India Pvt Ltd.

Considering his operational functions, distinguished from his responsibilities as CEO of the Company, the Board of Directors judged that it was justified that he signed an employment agreement, concurrently with his corporate office.

This element has been approved by the shareholders at the general meeting held on 26 June 2018, through the “say-on-pay” vote.

With such new employment agreement, Carlalberto Guglielminotti shall be entitled to receive compensation equal to 60% of his fixed pay, justified by the prohibition in his contract of engaging in any competing activity during the two next years after the end of his employment agreement.

Recommendation R 11: Assessment on the operations of the Board

According to Recommendation R 11 of the Middlenext Code, once a year, the Chairman of the Board of Directors should call upon the directors to express themselves on the working of the Board and the preparation of its work.

According to Article 19 of the Internal Rules, the Board of Directors organises an annual discussion of its performance, mentioned in the minutes of the meeting. The Board of Directors also conducts a regular assessment of its own operations, which at the Chairman’s initiative is entrusted to the Nomination and Remunerations Committee.

This assessment was performed by the Remuneration and Nomination Committee in December 2018 through individual interviews of each of the non-executive Board Members covered the following objectives:

- review the operating procedures of the Board of Directors;

- ensure that important issues were suitably prepared and discussed;

- measure the contribution of each Director to the Board of Directors’s accomplishments.

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As a result of the 2018 assessment, the Remuneration and Nomination Committee outlined the overall positive feedback given by the Board Members who consider that the current functioning of the Board of Directors allows them to fulfil their mission under good conditions and the Board of Directors decided that no amendment of the Internal Rules of the Board of Directors was necessary.

Another assessment was planned for 2019, however, given the positive feedback of the 2018 one and because the Board of Directors was fully occupied by the discussions of the Long Term Strategic Plan, this assessment was not performed.

However, a new Board of Directors assessment will be performed in 2020.

14.7 Potential material impacts on the corporate governance, including future changes in the board and committees composition (in so far as this has been already decided by the board and/or Annual General Meeting).

The Board of Directors of ENGIE EPS, meeting on April 2020 under the chairmanship of Mr. Thierry Kalfon, and on the basis of the report of the Remuneration and Nomination Committee, will deliberate on the evolution of the composition of the Board of Directors to be submitted to the approval of the coming Annual General Meeting of 25 June 2020.

The Board of Directors will submit for Shareholders’ approval the ratification of the co-optation of Ms. Alice Tagger who was provisionally appointed as a director from 19 March 2020, by the Board of Directors on 19 March 2020, to serve the remainder of Ms. Elise Collange’s mandate. Her term of office will therefore expire in 2021 at the Annual General Meeting to be held to approve the 2020 statutory accounts.

14.8 Information on Control and Risk Management Procedures

14.8.1 Internal control organization

ENGIE EPS Group has implemented a number of internal control and risk management procedures. Considering that the major operational subsidiary of the ENGIE EPS Group, EPS Elvi, is based in Italy, internal control procedures are mainly based on Italian national regulation (Italian Legislative Decree No. 231 of 8th June 2001, as amended or “Decree 231”) as well as on regulation UNI ISO 37001:2016.

EPS Elvi adopted an Organizational, Management and Control Model (the “Model”), approved on 8 February 2017 by its Board of Directors.

The Model is currently subject to further updates and integrations considering the legislative and regulatory changes which have interested the Italian legislation and Company’s recent developments.

The Model is compliant with the guidelines drawn up by trade associations and with the corporate governance best practices, is composed by a “General Part”, including a comprehensive framework for the organization, management and control of the Company, and a “Special Part”, attaining to different kinds of breaches, violations and potential criminal offences and misbehaviours to be prevented.

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The purpose of the Model, in addition to the design of a comprehensive framework for the organization, management and control of EPS Elvi, is to prevent the commission – in the interest or to the benefit of the ENGIE EPS Group of certain offences, by individuals who are:

• representatives, Directors or managers or of one of its organizational units that have financial and functional independence, or by individuals who are responsible for managing or controlling EPS Elvi (individuals in top management positions or "apical");

• managed or supervised by an individual in an apical position (individuals under the management and control of others).

In addition, concerning the prevention of corruption, during the financial year 2019, pre-audit activities and technical audits on Company’s process have been carried out by a certifying body with the aim of obtaining the UNI ISO 37001:2016 certification.

The process for obtaining certification for the prevention of corruption’s management system, together with compliance with national regulations, have led to an update of the assessment of the main corporate processes in charge of risk management of corruption, carried out through the assessment of a preliminary level of risk, based on the appreciation of the probability of happening of the single event and on the potential impact of the same, the identification of mitigating factors and the tools available for prevention and control of the risk itself.

The Company’s aims are:

• To create and to preserve values, activities and reputation of the Company;

• To assure that the decision-making processes and the operational processes contribute to the achievement of the Company’s goals;

• To promote actions compliant with the Company’s values; and

• To engage employees with the main risks and raise them awareness of the specific risks of their activities.

Generally, internal control and risk management procedures contribute to the control of the Company’s business, the effectiveness of its operations and the efficient use of its resources.

14.8.2 Ethics and compliance framework

ENGIE EPS Group aims to act in compliance with national and international laws and regulations in force in countries were it operates in all circumstances.

For this purpose, ENGIE EPS has adopted the ENGIE EPS Code of Ethics and Practical Guide to Ethics which leads all decisions, management and professional practices of the ENGIE EPS Group.

ENGIE EPS expects its employees, corporate officers and ENGIE EPS Group entities to act in accordance with those principles, in all circumstances, and whatever their jobs, level responsibility and contacts. A healthy working

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environment contributes to the successful operation of the ENGIE EPS Group and to employee well-being.

In accordance with the regulations contained in the Code of Ethics, the principles and contents of the Model are brought to the attention of all those with whom ENGIE EPS Group maintains contractual relationships. The commitment to the observance of the law and principles of the Model by third parties that have a contractual relationship with the ENGIE EPS Group is provided by a standard clause in the relevant contract and it is subject to its acceptance by the third-party contractor.

Furthermore, communication and staff trainings are key elements for the ENGIE EPS Group internal control system and for the effectiveness both of ethical principles and of the content of the Model.

The Company undertakes to facilitate and promote the knowledge of those principles to the management and the employees, with trainings, which attendance is mandatory, shaped on the different positions and roles, encouraging the active participation in them for the diffusion of the ethics and Model principles and contents.

ENGIE EPS Group has developed a system of controls tools which aims at preventing the risk referred to in Decree 231 and supporting compliance with the Code of Ethics, and which is structured on two control levels:

• general standards of transparency of the activities, which must always be present in all sensitive activities illustrated in the Model; and

• specific control standards, which contain special provisions designed to regulate specific aspects of sensitive activities and that must be contained in the Company applicable regulatory instruments.

14.8.3 Internal control procedures relating to the preparation and processing of accounting and financial information

The accounting and financial function is managed in-house by a team of eight persons, including an administrative director. General and local accounting, along with consolidated accounting, is done in-house and reviewed by locally qualified chartered accountants. The tax review and payroll management are conducted by external qualified consultants in each jurisdiction.

The scope of consolidation comprises the French Company and its subsidiaries. The consolidation of the accounts is carried out by the Administrative Department on a monthly basis (excluding the first month of each quarter).

The aims of consolidation procedures are to:

• Guarantee compliance with applicable rules (group policies, AMF Risk Management Guidelines, etc.) through the implementation of general procedures and the issuance of specific consolidation instructions to the various entities;

• Provide assurance concerning the reliability of financial information, through the execution of controls provided for by the system;

• Guarantee data integrity through high level security systems.

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The budgeting process and consolidation procedures enable the Company to constantly monitor the performance of the various units and to swiftly identify any variances from the budget in order to carry out immediate corrective actions.

Notwithstanding the fact that the ENGIE EPS Group Companies’ accounting is currently done in-house with support of local consultants, each subsidiary can consider the opportunity to outsource some functions to optimize financial information flows.

The Auditors of the ENGIE EPS Group at the end of the first half of the fiscal year conduct a limited review of the interim financial statements and at the end of the fiscal year certify the reliability of the year financial statements. The accounts of EPS Elvi, EPS Manufacturing and MCM are audited by independent Auditors.

A review of the half and year end results is also conducted by the Audit Committee before their submittal to the Board of Directors for their approval.

15 EMPLOYEES

15.1 Number and allocation of employees by position

As of 31 December 2019, the ENGIE EPS Group has a total of 110 human resources, including 101 employees under an employment contract and 9 with an alternative employment status.

Most employees work in Italy. They have had multidisciplinary careers and have skills in the sectors targeted by ENGIE EPS.

The headcount of the ENGIE EPS Group’s employees by degree is presented in the table below:

Headcount by degree 31.12.2017 31.12.2018 31.12.2019

University Degree, of which: 73 80 91

- Engineers 45 54 61

- PHD or MBA 20 24 33

Technical Degree 19 20 19

TOTAL HEADCOUNT 92 100 110

The headcount of the ENGIE EPS Group’s employees by function is presented in the table below:

Headcount by function 31.12.2017 31.12.2018 31.12.2019 Management 13 7 10

Staff: Administration & Finance, IR, Legal and Communication

15 22 24

Business Development and International Projects

6 11 8

R&D 22 22 23

Innovation 1 3 2

Engineering 17 18 17

Production 9 10 19

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Project Management 8 6 4

Customer Value Management 1 1 3

Total 92 100 110

The Company’s key executives have major experience in their respective fields. These experiences are summarised in chapter 12 “Administrative and Executive Bodies” of this Universal Registration Document.

15.2 Holdings and stock options held by ENGIE EPS executives and employees

The Company's corporate officers, members of management and employees do not hold any shareholding in the Company's share capital.

As of the date of the Universal Registration Document, there are no outstanding securities entitling the holders of which to access the capital of the Company. In accordance with the 2018 Incentive Plan:

• the previously existing share options and Warrants were all exercised by their beneficiaries, with the exception of 200,000 stock options granted to the CEO, which were replaced by SARs;

• in addition, the CEO and other members of the ENGIE EPS Group’s management received Additional SARs.

The allocations of the SARs to the CEO, the Chairman of the Board of Directors and other members of ENGIE EPS’s management decided by the Board of Directors on 6 March 2018 to replace unvested stock is described in paragraph 13.2.7 of the Universal Registration Document.

15.2.1 Overview of the current shareholding of the ENGIE EPS Group executives, mandataires sociaux and officers

The following table indicates the number of shares held by ENGIE EPS Group executives, mandataires sociaux and officers as of 31 December 2019.

Names

31 December 2019 % of the

share capital Number of shares

held

Massimo Prelz Oltramonti (dirigeants mandataires sociaux) 32,425 0.000%

Total 32,425 0.000%

15.3 Profit sharing and participation agreements

The Company has no current profit sharing or participation agreements.

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16 PRINCIPAL SHAREHOLDERS

16.1 Ownership of the share capital

As at the date of the report, the main shareholders of the Company were:

To the Company’s knowledge, there is no other shareholder holding directly or indirectly, more than 5% of the share capital or the voting rights of the Company. No shareholder has declared to the stock-exchange authorities that they are acting in concert with another.

16.2 Voting rights of the principal shareholders

Each share confers a right to one voting right in the Company. Article n.11 of the Company’s Bylaws rejects the implementation of double voting rights. It was approved on 22 May 2015.

16.3 Control of the Company

ENGIE (through its subsidiary GDF International) holds 60.5% of the Company's share capital and voting rights. On September 2019 and pursuant to article 12 of the Internal Rules, the Board of Directors created an ad hoc committee, the Independence Committee to review the significant agreements between the Company or one of its subsidiaries and an entity of the ENGIE group. The members of the Independence Committee are exclusively designated from among the members of the Board of Directors and at least two-thirds of members shall be independent members of the Board of Directors. (See paragraph 14.4).

Furthermore, any agreement entered into directly between the Company and ENGIE or a controlled subsidiary of ENGIE is subject to the regulated agreements framework pursuant to articles L. 225-38 et seq. of the French Commercial Code.

Finally, ENGIE has a long successful track record in managing controlled listed entities (the largest ones being ENGIE Brazil, which is listed on the Brazilian stock exchange, ENGIE Energia Chile, which is listed in Chile, and ENGIE Energia Peru, which is listed in Peru).

16.4 Agreements likely to entail a change of control

To the best of the Company’s knowledge, as of the date of this Universal Registration Document, there is no agreement the implementation of which could entail a change of control of the Company.

31 December 2019 - Shareholder Shares % of share capital

Theoretical voting rights*

% of theoretical voting rights

Voting rights exercisable in shareholders’ meetings

% of voting rights exercisable in shareholders’ meetings

GDF International 7,721,453 60.48% 7,721,453 60.48% 7,721,453 60.48% Public & Institutional Investors 5,045,407 39.52% 5,045,407 39.52% 5,045,407 39.52% TOTAL 12,766,860 100% 12,766,860 100% 12,766,860 100%

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17 RELATED PARTY TRANSACTIONS

17.1 Intra-group Operations

ENGIE EPS, as parent company of the ENGIE EPS Group, may, as appropriate, enter info financial transaction with ENGIE EPS Group Companies.

On 10 December 2015, the Company granted a €1,000 k interest free line of credit facility to EPS Inc. in order to fund the start-up activities of the ENGIE EPS Group in the United States. Total draw down in 2019 has been €5 k in addition to €5 k in 2018, €10 k in 2017 and €105 k in the previous years.

On 4 January 2016 the Company granted a debt revolving loan facility to EPS Manufacturing for a maximum amount of €10,000 k. The revolving facility bore interest at Euribor 3 months plus 230 bps. As of 31 December 2019 the loan granted during the previous periods was completely reimbursed. EPS Manufacturing refunded €110 k in 2018 and €2,200 k in 2017.

On 4 January 2016 the Company granted a debt revolving loan facility to EPS Elvi. The revolving facility bore interest at Euribor 3 months plus 215 bps. Total draw down in 2019 has been €3,700 k.

A cash pooling agreement may be established within the ENGIE EPS Group.

In 2016, the ENGIE EPS Group companies entered into a cost sharing agreement based on a direct splitting of costs related to support functions. The reallocation of costs resulting from the transfer pricing policy was made in compliance with market conditions and French and Italian regulations. The corporate functions assigned to the benefit of the various ENGIE EPS Group companies (Business Development, Business Intelligence, Administration & Finance, Communication, Legal, Compliance and HR) are assigned to specific cost centres and can be supported by ENGIE EPS or by its subsidiaries. In the latter case, the share of the support functions supported by the subsidiaries is first billed back to EPS without any margin and allocated to the specific cost centres to be included in the total cost of the common functions.

The total cost of the shared functions is then distributed among ENGIE EPS Group companies according to consistent and homogeneous criteria, at market conditions. The allocation criteria chosen are objective and measurable. Allocation keys are applied consistently to all entities and allow correlation of allocated costs and revenues. In compliance with the French and Italian tax regulations, as well as the arm's length principle, ENGIE EPS re-invoices the expenses of the common functions to ENGIE EPS Group companies by applying a margin of 5%.

17.2 Significant agreements concluded with related parties

The ENGIE EPS Group associated parties to notably include the shareholders of the Company, its consolidated and unconsolidated subsidiaries, companies under joint control, associated companies and the entities over which the various directors of the ENGIE EPS Group exercise at least a notable influence.

Quantitative data specifying the relations with these related parties appear in paragraph 4.30 of the Consolidated Financial Statements of the ENGIE EPS Group, and are presented in chapter 18 “Financial information concerning the ENGIE EPS Group’s assets, financial situation and results” of this Universal Registration Document.

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The principal operations with associated parties are:

Agreement with ENGIE SOLAR S.a.S. (a company belonging to the ENGIE Group, the majority shareholder of the Company):

- ENGIE SOLAR S.a.S. has been selected to perform engineering, procurement, and installation services in relation to the delivery of a BESS (with stockage capacity of 5.4 MW/3.17 MWh) and of its associated facilities in the Municipality of Comadù (United State of Mexico) (“Sol de Insurgentes Project”). On 20 December 2019 ENGIE SOLAR S.a.S. entered into a Power Island Supply Agreement with EPS Elvi in order to subcontract part of the works. The contract price is USD $17,303 k.

- EPS Elvi concluded an agreement with ENGIE SOLAR S.a.S. for the provision of advisory services in order to deploy the smart integration program of EPS Elvi within the ENGIE Group. The duration of the agreement is 12 (twelve) months, from 1 January 2019 to 31 December 2019. The scope of this service agreement is to support ENGIE SOLAR S.a.S. by using EPS Elvi capabilities represented by Mrs. Michela Costa, who for the duration of the present agreement shall act as i) Legal Director for ENGIE SOLAR S.a.S.; ii) Head of PMO (including HSE, quality and contract management); iii) Ethics & Compliance Officer for ENGIE SOLAR S.a.S.; and iv) Risk Officer for ENGIE SOLAR S.a.S.. The Contract Price is equal to €290 k.

- On 14 December 2018, ENGIE EPS (formerly known as Electro Power Systems S.A.) entered into an agreement with ENGIE SOLAR S.a.S. for the sublease of its registered office at 115, rue Réaumur, 75002 Paris. The sublease agreement has a duration of two years, starting from 1 January 2019 and expiring on 31 December 2021. The annual rent (excluding taxes) is equal to €2,400. The sublease agreement was terminated by ENGIE SOLAR S.a.S., on 1 October 2019.

Agreement with SOLAIREDIRECT GLOBAL OPERATIONS S.A. (a company belonging to the ENGIE Group, the majority shareholder of the Company) In relation to the Sol De Insurgentes Projects described above, on 27 November 2019, EPS Elvi entered into a procurement contract with Solairedirect Global Operations S.A. for the purchase of some critical equipment and materials instrumental to the delivery of a battery energy storage system (with stockage capacity of 5.4 MW/3.17 MWh) and its associated facilities to be installed in the Municipality of Comadù (United State of Mexico). The contract price is equal to USD $13,547 k.

Agreement with Cautha S.r.l. (a company for which Giuseppe Artizzu, Executive Director of the ENGIE EPS Group as of 7 March 2018, is a director): on 10 July 2015, EPS Manufacturing, in order to sublease its registered office in Piazza del Tricolore 4, Milan (Italy), concluded a one-year sublease agreement with Cautha S.r.l. The agreement was renewed for an additional year and expired on 1 July 2018. The annual rent (excluding taxes) was equal to €18 k.

Agreement with ENGIE PRODUZIONE (a company belonging to the ENGIE Group, the majority shareholder of the Company): on 31 December 2019, EPS Elvi, acting as contractor for the engineering, supply and installation of an energy storage system with

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stockage capacity of 7.2 MW/5.08 MWh and related services entered into an agreement with ENGIE PRODUZIONE S.p.A. The contract price is €2,643 k.

Agreement with ENGIE Lab Singapore (a company belonging to the ENGIE group, the majority shareholder of the Company): on 21 September 2017, EPS Elvi entered into an agreement with ENGIE Lab Singapore for the supply of a P2P hydrogen system (its articles, materials, equipment, design and drawings, data and other materials) on the island of Semakau (Singapore). The value of the agreement is €663 k.

Agreement with Comores Energies Nouvelles S.A.R.L. (a company where 49% of its shares are owned by ENGIE EPS): on 16 November 2018, EPS Elvi entered as contractor into an EPC Agreement with Comores Energies Nouvelles S.A.R.L., for the development of a solar power plant and its BESS located on the island of njouan, in the municipality of Lingoni. EPS Elvi scope of work consisted, among others, in the performance of engineering and design services as well as the procurement of material and equipment.

Agreement with ENGIE EEC (a company belonging to the ENGIE group, the majority shareholder of the Company): Engie EEC, as electricity grid operator on Lifou island (New Caledonia), entered into agreements with local government to install and operate an Energy Storage System (ESS) in the framework of the Renewable Energy strategy “Lifou 100% in 2020”. On 5 December 2018, EPS Elvi entered into an agreement as a contractor for the engineering, procurement and construction of 4.8 MW / 5.06 MWh BESS. The contract price is €2,478 k.

Agreement with ENGIE Storage (a company belonging to the ENGIE group, the majority shareholder of the Company): ENGIE EPS (formerly known as Electro Power Systems S.A.) concluded on 17 December 2018 a sales agreement for the supply of 144 Samsung Mega E2 Battery modules, 16 Mega E2 Switchgear, Associated Accessories for usage of the assets. The contract price is $330 k.

Agreement with ENGIE Electrabel (a company belonging to the ENGIE group, the majority shareholder of the Company): EPS Elvi concluded on 9 October 2018 an engineering contract for ENGIE Electrabel. The contract price is €25 k.

Agreement with ENGIE ENERGIE SERVICES (a company belonging to the ENGIE group, the majority shareholder of the Company): ENGIE EPS (formerly known as Electro Power Systems S.A.) concluded on 1 January 2019 an engineering contract for ENGIE ENERGIE SERVICES. The contract price is approximately €200 k.

Agreement with ENGIE (a company belonging to the ENGIE group, the majority shareholder of the Company):

- ENGIE EPS concluded an agreement with ENGIE for the provision of advisory services in order to deploy the smart integration program of ENGIE EPS in the ENGIE group. The scope of this agreement is the provision of consultancy services which are to be rendered by Mr. Giorgio Crugnola (as senior engineer at ENGIE EPS). The duration of the agreement is of 7 (seven) months, starting from 1 June 2019 until 31 December 2019 with the possibility to extent such agreement to 18 (eighteen) months maximum. The annual cost of the agreement corresponds to a monthly fee of €11.436,25 calculated on an

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average of 15 working days per month of Mr. Giorgio Crugnola working on the assignment;

- ENGIE EPS concluded an agreement with ENGIE for the provision of advisory services in order to deploy the smart integration program of ENGIE EPS in the ENGIE group. The scope of this service agreement is the provision of consultancy services which are to be rendered by Mr. Juan Ceballos (a Business Developer Manager and engineers at ENGIE EPS). The duration of the agreement is of 7 (seven) months, starting from 1 June 2019 until 31 December 2019 with the possibility to extent such agreement to 18 (eight-teen) months maximum. The annual cost of the agreement corresponds to a monthly fee of Euro €7 k calculated on an average of 15 working days per month of Mr. Ceballos working on the assignment.

Principal operations with parties which currently are no longer associated parties:

Agreement with Elvi Fin S.p.A. (sole shareholder of Elvi Elettrotecnica Vitali, shareholder of the ENGIE EPS Group until 7 March 2018): EPS ELVI (formerly known as Elvi Energy S.r.l.) concluded a sublease agreement with Elvi Fin S.p.A. for the sublease of its Manufacturing & Systems R&D offices in Delebio, Sondrio (Italy) for a duration of 6 years (starting from 1 January 2016), to be tacitly renewed for another 6 years. In 2017 the amount referred to this agreement was €55 k. In 2018 the rent paid for the lease has been equal to €95 k. In 2018 the parties terminated the agreement as the production and manufacturing were moved to the Cosio plant.

Agreement with 360 Capital Partners (shareholder until 7 March 2018): on 1 January 2017 the Company renewed the sublease agreement with 360 Capital Partners for the sublease of its registered office in Paris, 13, avenue de l’Opéra, for a monthly rent of €1 k excluding taxes and for the duration of one year with the possibility to renew the agreement for the same additional period. The annual rent for 2017 was €12 k. Such agreement terminated on 28 May 2018, as per termination notice sent by the Company to 360 Capital Partners. On 28 May 2018, the agreement was renewed at the same terms and conditions, for the duration of 7 (seven) months, and consequently expired on 31 December 2018.

Agreement with Elvi Elettrotecnica Vitali (shareholder of the ENGIE EPS Group as part of the reserved capital increase of €1.4 million announced on 14 December 2015 and implemented on 4 August 2017, until 7 March 2018). By means of the agreement Elvi Elettrotecnica Vitali S.p.A and ENGIE EPS entrusted the management of certain services (including, but not limited to project management, engineering, warehouse management) to third parties. In 2018 the costs borne by ENGIE EPS Group in relation to the agreement was €564 k.

Agreements with Prima Electro S.p.A. (shareholder of the ENGIE EPS Group until 7 March 2018) ENGIE EPS entered into a strategic partnership agreement on 24 September 2015 (approved by the Board of Directors on July 2015) in order to set out the arrangements for the development, manufacturing and supply by Prima Electro of certain products. This agreement replaces and extends a previous supply and cooperation agreement in which ENGIE EPS had entered into on 16 October 2009.

This agreement shall be effective for an initial period of 7 years, excluding the possibility of an early termination during the first 7 years, unless otherwise mutually agreed upon the parties. The amount related to this agreement in 2017 was €104 k. The amount

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related to this agreement in 2018 was €65 k. The amount related to this agreement in 2019 was €26 k.

17.3 Special report by the statutory auditors on regulated agreements and commitments

Please refer to Annex 5 of this Universal Registration Document.

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18 FINANCIAL INFORMATION CONCERNING THE ISSUER’S ASSETS, FINANCIAL SITUATION AND RESULTS

18.1 Consolidated Financial Statements of the ENGIE EPS Group for the financial year ended 31 December 2019

18.1.1 Consolidated Financial Statements of the ENGIE EPS Group for the financial year ended 31 December 2019

Please refer to Annex 1 “Consolidated Financial Statements of the ENGIE EPS Group for the financial year 2019 ended 31 December 2019” of this Universal Registration Document.

18.1.2 Report of the statutory auditors of the ENGIE EPS Group on the Consolidated Financial Statements for the financial year ended 31 December 2019.

Please refer to Annex 2 “Report of the statutory auditors on the Consolidated Financial Statements of the ENGIE EPS Group for the financial year 2019 ended on 31 December 2019” of this Universal Registration Document.

18.1.3 Accounting standards

The financial information have been prepared according to International Financial Reporting Standards as endorsed in the Union based on Regulation (EC) No 1606/2002.

18.2 Company’s accounts for the financial year ended 31 December 2019

18.2.1 Company’s accounts for the financial year ended 31 December 2019

Please refer to Annex 3 “Company’s accounts for the financial year ended on 31 December 2019” of this Universal Registration Document.

18.2.2 Report to the Annex 4 “Report of the statutory auditors on the Company’s Account for the financial year ended 31 December 2019

Please refer to Annex 4 “Report of the statutory auditors on the Company’s Accounts for the financial year ended on 31 December 2019” of this Universal Registration Document.

18.3 Date of the last financial information

The date of the last financial information is 31 December 2019.

18.4 Dividend distribution policy

18.4.1 Dividends and reserves distributed by the Company over the last three financial years

No dividends or reserves have been distributed by the Company since its incorporation.

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18.4.2 Dividend distribution policy

There are no plans to initiate a policy of dividend payments in the short term in view of the Company’s stage of development.

18.5 Judicial proceedings and arbitration

The ENGIE EPS Group may be involved in judicial, administrative or arbitration proceedings during the normal course of its activities, and shall constitute a provision when there is a sufficient probability that such proceedings are likely to entail costs for the ENGIE EPS Group, which may be reliably estimated.

There are no governmental, judicial or arbitration proceedings, including any proceedings of which the Company is aware, suspended or threatened, likely to have or which, over the last three financial years, have had significant effects on the ENGIE EPS Group’s financial situation or profitability.

18.6 Significant change in the financial or commercial situation

To the Company’s knowledge, since 31 December 2019, there have been no significant changes in the financial situation of the ENGIE EPS Group, which have not been already described in this Universal Registration Document (please refer to paragraphs 7.2 and 7.3).

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19 SUPPLEMENTARY INFORMATION

19.1 Share capital

19.1.1 Amount of the share capital

As at 31 December 2019, the share capital of the Company amounted to €2,553,372 divided in 12,766,860 shares, with a nominal value of €0.20 each, entirely subscribed and paid up and in the same category.

No shares issued by the Company have been pledged.

19.1.2 Securities not representing the share capital

As of 31 December 2019, the Company had not issued any security not representing the share capital.

19.1.3 Control, treasury stock and acquisition by the Company of its own shares

As of 31 December 2019, the Company holds none of its own shares and no share of the Company is held by one of its subsidiaries or by a third party on its behalf.

The Annual General Meeting of 25 June 2019 renewed via the 17th resolution the authorization for the Board of Directors for the purchase by the Company of its own shares, in the context of a share buyback program. This resolution is valid for a period of 18 months starting on the date of the Annual General Meeting of 25 June 2019.

19.1.4 Securities granting access to the share capital

As of 31 December 2019, there is no security entitling the holder to access the capital of the Company (see paragraph 13.1.4 “Allocation of Stock Appreciation Rights to the corporate officers” of this Universal Registration Document).

19.1.5 Share capital authorised but not issued

The issuance resolutions approved by the Annual General Meeting of 25 June 2019, ruling in an extraordinary capacity, are summarised below:

Delegations granted by the General Meeting of 25 June 2019 to the Board of Directors

Duration of

validity / expiry

Ceiling in nominal value

terms

Use Price

determination procedures

Delegation of authority granted to the Board of Directors for the purchase by the Company of its own shares (resolution No. 17)

18 months

€ 1,500,000 - €15 per action

Delegation of authority to the Board of Directors for the purpose of reducing the share capital through share cancellation as part of the authorization to purchase its own shares (resolution No.

18 months

up to the limit of 10% of the existing share capital at the cancellation

decision date

- -

177


Duration of

validity / expiry


terms

Use Price


18)

Delegation of authority to the Board of Directors for the purpose of increasing the share capital by issuing ordinary shares and/or securities giving access to share capital with preferential subscription rights (Resolution No. 19)

26 months

€800,000 - -

Delegation of authority to the Board of Directors for the purpose of increasing the share capital by issuing ordinary shares or securities giving access to share capital without preferential subscription rights (Resolution No. 20)

26 months

€800,000

- (1)

Delegation of authority to the Board of Directors for the purpose of increasing the share capital by issuing ordinary shares or securities giving access to share capital, without preferential subscription, rights by a way of a private placement (Resolution No. 21)

26 months

€800,000 and up to the limit of 20% of the share capital

per year

- (1)

Delegation of authority to the Board of Directors in the event of an issuance of ordinary shares or securities giving access to share capital, without preferential subscription rights in order to set the subscription price, within the limit of 10% of the share capital per year (Resolution No. 22)

26 months

up to the limit of 10% of the share capital

per year

- (2)

Authorization to increase the number of securities to be issued by 15%, with or without preferential subscription rights (Resolution No. 23)

26 months

up to the limit of 15% of the

initial subscription

- Same price as the initial issue

178


Duration of

validity / expiry


terms

Use Price


Delegation of authority to the Board of Directors to increase the share capital by issuing ordinary shares or securities giving access to share capital, up to the limit of 10% of the share capital per year, in order to remunerate contributions in kind made to the Company outside of a public exchange offer (Resolution No. 24)

26 months

up to the limit of 10% of the share capital

per year

- -

Delegation of authority to the Board of Directors to increase the share capital by issuing ordinary shares or securities giving access to share capital, in the event of a public exchange offer initiated by the Company (Resolution No. 25)

26 months

€800,000

- -

Delegation of authority to the Board of Directors to increase the share capital by incorporation of reserves, profits or issuance premiums, merger or contributions premiums, or any other amount likely to be capitalised (Resolution No. 26)

26 months

€800,000

- -

Overall limitation of authorisations to increase the share capital (Resolution No. 27)

- €1,000,000

- -

Delegation of powers to the Board of Directors to increase the share capital reserved for employees who are members of a company savings plan, without preferential subscription rights (Resolution No. 28)

26 months €10,000 - (3)

(1) The issue price of the shares issued under this delegation shall be at least equal to the minimum authorized by the legislation (i.e. to the weighted average of listed prices over the last three stock exchange sessions preceding its fixing and, when appropriate, reduced by a maximum discount of 5%).

(2) The issue price shall be at least equal to the average weighted by volumes (in the central order book and excluding off-market blocks) of closing price of the Company’s share on Euronext Paris for the last three stock exchange sessions preceding its fixing and, when appropriate, adjusted to take into account enjoyment date differences and reduced by a maximum discount of 20% with the understanding that in any case it will not be inferior to the nominal value of the Company’s shares at the issue date of such issued shares

(3) The exercise price must be obtained from the weighted average of the last twenty days of stock price before the allocation date reduced by the discount authorized be the legislation (currently 20% when the period stipulated by the savings plan is less than 10 years, and 30% when this duration is equal to or greater than 10 years).

179

19.1.6 The share capital of any ENGIE EPS Group Company forming the object of an option or agreement providing for such options.

To the Company’s knowledge, there are no options or any conditional or unconditional agreements providing for the implementation of such an option on the share capital of the Company.

19.1.7 History of the share capital

19.2 Articles of incorporation and articles of association

The information provided below derives from the By-Laws, up to date on 1 October 2019.

19.2.1 Company object (article 2 of the By-Laws)

The Company has as its object, in and outside of France:

• the research, design, creation, realisation, development, production, integration, marketing and supply of products for generation of electrical energy, of hydrogen, storage technologies, sources of renewable energies, heating or cooling of all or part of these products;

• the research, design, creation, realisation, development, production, integration, marketing, granting of licences, freely or against payment, of new technologies and of applications in the fields of energy and the environment and in particular, concerning hydrogen generators, hydrogen fuel cells, natural gas, propane or any other type of liquid and/or gaseous fuels or renewable energy sources;

180

• the design, development and management of technological research projects in the fields of energy, energy storage, renewable sources of energy and the environment, independently or in collaboration with public or private institutions, energy sector companies, universities, foundations, local, national and international entities and in general, any other public or private person concerned by the development of new technologies and applications in the fields of energy, energy storage, renewable energy sources and the environment;

• the retail and wholesale sales, by post and electronically of technologies aiming at production and energy storage in general;

• the management of agreements signed with private and public entities and involving activities associated with domains of energy, energy storage, renewable energy sources and the environment;

• the installation, maintenance, modification and construction of the following civil, industrial and agricultural infrastructure:

o systems aiming at the production, treatment, transport, storage, distribution and use of electrical energy, protection systems against thunder, as well as the installations of automatic systems for any technology infrastructure for the communication of information, notably doors, gateways and barriers;

o storage and emergency supply infrastructure, notably, diffusion installations, antennas and electronic systems in general;

o storage and emergency supply infrastructure, including heating, air conditioning and refrigeration systems of any kind and type, and notably, evacuation systems relating to products for combustion, ventilation and aeration of the premises;

o infrastructure for natural gas networks, storage and emergency supply, notably, water installations and sanitary infrastructure of any nature and type;

o systems for the distribution and use of gas, of any kind and type, notably evacuation systems relating to products for combustion, ventilation and aeration of the premises;

o lifting devices for persons or objects by lifts, freight lifts, escalators and their equivalents;

o energy storage and safety systems, notably fire protection systems;

• any taking of a direct or indirect stake in any commercial, industrial, financial or other operation, in France or outside it, regardless of the legal nature or the object of such commitments, by all means, and particularly by the creation, contribution, subscription, exchange or purchase of shares or securities, or through a merger, undeclared partnership or group or by any other means, with regard to the above;

• the management of its participations;

181

• all services and advice to its subsidiaries and to the companies which it controls (the “Group”) regarding human resources, IT, management, communication, finance, legal, marketing, and sourcing;

• the acquisition of any trademarks belonging to the Group or to third parties, the development of the Group’s brands and more extensively, the management of the portfolio of trademarks of the Group and of the intellectual property rights of the Company, as well as those of its subsidiaries and Holdings and any services to the Group companies regarding these intellectual property rights;

• the activities of a Group financing company, and as such, the provision of any type of financial assistance to the companies forming part of the Group;

• and in general, all operations, whether financial, commercial, industrial, civil, property or securities operations, which may relate directly or indirectly to the above Company and to all similar or associated objects, as well as ones of a nature to favour directly or indirectly the objective pursued by the Company, its extension, its development and its asset base.

19.2.2 Rights and obligations attached to the shares (article 11 of the By-Laws)

Subject to the rights that would be granted to other categories of shares if established, each share entitles the holder to a share in profits and corporate assets proportional to the portion of the capital that it represents. In addition, it gives the right to vote and representation in general meetings, in accordance with law and the By-Laws. It does not carry a double voting right.

Shareholders will bear losses only up to the amount of their contributions.

The rights and obligations attached to each share follow the security with any holder. Ownership of a share automatically entails acceptance of the By-Laws and decisions of the Annual General Meeting of the Company.

Whenever it is necessary to have several shares to exercise a certain right, the isolated shares less than the amount required to exercise the right do not give any right to their owners against the Company. In such case, the affected shareholders are responsible for regrouping the required number of shares to exercise the right.

The extraordinary general meeting may decide to proceed with stock-splits and reverse stock-splits.

19.2.3 Clauses of the articles of association or internal regulations likely to have an impact on the occurrence of a change of control

No stipulation of the articles of association or of the internal regulations shall have the effect of delaying, deferring or presenting a change in the control of the Company.

182

20 MATERIAL AGREEMENTS

20.1 Summary of material agreements

None.

20.2 Summary of agreements concluded under extraordinary conditions

Framework Agreement with FCA Italy S.p.A.: on 14 May 2019, ENGIE and FCA Italy S.p.A. entered into a framework agreement in order to establish the terms and conditions governing the supply of e-Mobility products and related services. More specifically, ENGIE, directly and/or through its subsidiaries, among which ENGIE EPS, shall supply to FCA Italy S.p.A. and its subsidiaries EVs’ charging stations and related services in various European countries.

The Framework Agreement includes, among others, the execution between FCA Italy S.p.A. and its subsidiaries and ENGIE and its subsidiaries, among which ENGIE EPS, of a Dealers Supply and Service Agreement, as well as a B2C Supply and Service Agreement. The Framework Agreement with FCA Italy S.p.A., (including the Dealers Supply and Service Agreement and the B2C Supply and Service Agreement) will be valid for an initial period of 4 (four) years, from 14 May 2019 until 13 May 2023, with the possibility to evaluate a possible extension of such period.

Dealers Supply and Service Agreement with FCA Italy S.p.A.: ENGIE, directly and/or through its subsidiaries, among which ENGIE EPS, shall supply to FCA Italy S.p.A. and its subsidiaries, EV’s charging stations and additional related services dedicated to FCA Italy S.p.A. European Dealers located in different European countries. ENGIE EPS shall perform the obligations under the Dealers Supply and Service Agreement with regards to FCA European Dealers located in Sweden and Denmark.

B2C Supply and Service Agreement with FCA Italy S.p.A.: ENGIE, directly and/or through its subsidiaries, among which ENGIE EPS, shall supply to FCA and its subsidiaries wallbox charging stations and related services dedicated to FCA Italy S.p.A. final costumer in several European countries. ENGIE EPS shall undertake the performance of the obligations under the B2C Supply and Service Agreement in Denmark, Sweden, Austria, Czech Republic, Germany, Belgium, Slovakia, Switzerland and Poland.

183

21 DOCUMENTS ACCESSIBLE TO THE PUBLIC

Copies of this Universal Registration Document are available free of charge at Company’s registered office located at 28, rue de Londres, 75009 Paris, France, as well as at the premises of the controlled Italian entity (EPS Elvi Energy S.r.l.) located at Via Anton Francesco Grazzini, 14, 20158 Milan, Italy.

This Universal Registration Document may also be consulted on the Company’s website (www.engie-eps.com) and on the website of French Financial Markets Authority (Autorité des Marchés Financiers – AMF) (www.amf-france.org).

During the validity period of this Universal Registration Document, the following documents (or a copy of these documents) may be consulted at the Company’s registered office:

- the articles of association of the Company;

- all the minutes of Annual General Meetings, reports, letters and other documents, historical financial information, valuations and statements prepared by experts at the request of the Company, part of which is included or referred to in this Universal Registration Document; and

- historical financial information contained in this Universal Registration Document.

All of these legal and financial documents relating to the Company which must be made available to shareholders in accordance with the regulations in force may be consulted at the Company’s registered office or at the premises of the controlled Italian entity.

Since the Company’s shares were listed on the regulated market of Euronext Paris, regulated information within the meaning of the provisions of the AMF General Regulation is also available on the Company’s website.

Since 2019, ENGIE EPS has no longer published quarterly information. Nevertheless, the Company has continued to provide regular updates on its business and financial developments on an ad hoc basis, at the time of the Annual General Meeting and for the half-year and annual results.


https://www.amf-france.org/fr

184

22 REFERENCE TABLES

This reference table is based on the headings set out in Annex I (as referred to in Annex II) of Delegated Regulation (EU) 2019/980 of the Commission of 14 March 2019 and refers to the pages of this Universal Registration Document on which the relevant information can be found.

Headings and subheading as listed by Annexes 1 and 2 of

Commission Delegated Regulation (EU) No. 2019/980

Section numbers

1. Person responsible 1

1.1. Person responsible for the Universal Registration Document 1.1

1.2. Declaration by the person responsible 1.2

1.3. Statement or report attributed to a person as an expert n.a.

1.4. Information from a third party n.a.

1.5. Statement by the issuer n.a.

2. Statutory auditors 2

2.1. Information on statutory auditors 2.1

2.2. Details in case of resignation, removal on non-reappointment of the statutory auditors

n.a.

3. Risk factors 3

4. Information about the issuer 4

4.1. Legal and commercial name of the issuer 4.1

4.2. Place of registration, registration number and legal entity identifier (LEI) of the issuer

4.2

4.3. Date of incorporation and the length of life of the issuer 4.3

4.4. Domicile and legal form of the issuer, applicable legislation, country of incorporation, address and telephone number of its registered office and website

4.4

5. Business overview 5

5.1. Principal activities 5.3

5.2. Principal markets 5.4

5.3. Important events in the development of the business 5.1, 5.2

5.4. Strategy and objectives 5.5

5.5. Dependence on patents or licences, industrial, commercial or financial contracts or new manufacturing processes

5.6

5.6. Basis for any statements made by the issuer regarding its competitive position

5.5.3

5.7. Investments 5.7

6. Organisational structure 6

185

6.1. Brief description 6.1

6.2. List of significant subsidiaries 6.3

7. Operating and financial review 7

7.1. Financial situation 7.1, 7.2, 7.3

7.2. Operating results 7.4, 7.5

8. Capital resources 8

8.1. Issuer’s capital resources 8.1

8.2. Sources and amounts of the issuer’s cash flows 8.2, 8.3

8.3. Borrowing requirements and funding structure of the issuer 8.3.4

8.4. Information regarding any restrictions on the use of capital resources that have materially affected, or could materially affect, the issuer's operations

8.4

8.5. Anticipated sources of funds 8.5

9. Regulatory environment 9

10. Trend information 10

10.1. Most significant recent trends in production, sales and inventory, and costs and selling prices since the end of the last financial year. Any significant change in the financial performance of the Group or provide an appropriate negative statement.

10.1

10.2. Trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the issuer’s prospects for at least the current financial year

10.2

11. Profit forecast or estimates 11

12. Administrative, management, supervisory bodies and senior management

12

12.1. Administrative and management bodies 12.1

12.2. Conflicts of interest 12.10

13. Remuneration and benefits 13

13.1. Amount of remuneration paid and benefits in kind 13.2

13.2. Total amounts set aside or accrued by the issuer or its subsidiaries to provide pension, retirement, or seminal benefits

13.2

14. Board practices 14

14.1. Date of expiry of the current terms of office 14.1

14.2. Information about members of the administrative bodies’ service contracts with the issuer

14.2

14.3. Information about the audit committee and remuneration committee 14.3

14.4. Statement on the compliance of the current corporate governance regime

14.6

186

14.5. Potential material impacts on the corporate governance, including future changes in the board and committees composition

14.7

15. Employees 15

15.1. Number of employees 15.1

15.2. Shareholdings and stock options 15.2

15.3. Description of any arrangements for involving the employees in the capital of the issuer

15.2.1

16. Major Shareholders 16

16.1. Shareholders holding more than 5% of the issuer’s capital or voting rights

16.1

16.2. Existence of different voting rights 16.2

16.3. Control of the issuer 16.3

16.4. Description of any arrangements, known to the issuer, the operation of which may at a subsequent date result in a change of control of the issuer

16.4

17. Related party transactions 17

18. Financial information concerning the issuer’s assets and liabilities, financial position and profits and losses

18

18.1. Historical financial information 18.1

18.2. Interim and other financial information 18.1

18.3. Auditing of historical annual financial information 18.1

18.4. Pro forma financial information n.a.

18.5. Dividend policy 18.4

18.6. Legal and arbitration proceedings 18.5

18.7. Significant change in the issuer’s financial or trading position 18.6

19. Additional information 19

19.1. Share capital 19.1

19.2. Memorandum and articles of association 19.2

20. Material contracts 20

21. Documents available 21

187

INFORMATION RELATING TO THE ANNUAL FINANCIAL REPORT

This Universal Registration Document includes all items of the annual financial report required by applicable legal provisions and regulations (article L. 451-1-2 of the French monetary and financial code and Article 222-3 of the AMF’s General Regulations), as shown in the table below:

Items required Section(s)

Parent company financial statements 18.2

ENGIE EPS Group consolidated financial statements 18.1

Management report

• Information relating to business trends, results and financial situation of the Company and the ENGIE EPS Group (particularly debt situation)

7, 8

• Key indicators of financial and non-financial natures 7

• Description of the main risks and uncertainties and indications as to the use of financial instruments, for the Company and the ENGIE EPS Group

3

• Purchase and sale by the Company of its own shares 19.1.3

• Information on control and risk management procedures 14.8

• Financial risks related to the consequences of climate change and measures taken by the Company to control such risks by implementing a low-carbon strategy in every component of its activity

5.9

Declaration by the parties responsible for the Annual Financial Report 1.2

Statutory Auditors’ report on the parent company financial statements 18.2

Statutory Auditors’ report on the consolidated financial statements 18.1

Statutory Auditors’ fees Annex 1

Corporate Governance Report 12, 13, 14

Statutory Auditors’ report, prepared in accordance with Article L. 225-235 of the French Commercial Code, on the report prepared by ENGIE EPS’s Board of Directors

18.2

188

ANNEX 1

Consolidated Financial Statements FY 2019 Consolidated Financial Statements of the ENGIE EPS Group for the financial year 2019 ended 31 December 2019

2019 CONSOLIDATED FINANCIAL STATEMENTS

2

Index of Contents

2019 CONSOLIDATED FINANCIAL STATEMENT ............................................................................................. 5 1 CORPORATE INFORMATION .............................................................................................................. 5 1.1 Definitions............................................................................................................................................... 5 1.2 Corporate details .................................................................................................................................... 7 1.3 Shareholders .......................................................................................................................................... 7 1.4 Board of Directors .................................................................................................................................. 9 1.5 Auditors .................................................................................................................................................. 9 1.6 Main Risks and Uncertainties ................................................................................................................. 9 1.7 Transactions between Related Parties ................................................................................................... 9 1.8 Summary of 2019 Group’s Results ......................................................................................................... 9 1.9 Important events during the period ....................................................................................................... 11 1.10 Subsequent events ............................................................................................................................... 13 2 CONSOLIDATED FINANCIAL STATEMENTS ................................................................................... 15 2.1 Consolidated Income Statement .......................................................................................................... 15 2.2 Consolidated Statement of Other Comprehensive Income .................................................................. 16 2.3 Consolidated Balance Sheet ................................................................................................................ 17 2.4 Consolidated Statement of Changes in Equity ..................................................................................... 18 2.5 Consolidated Statement of Cash Flows ............................................................................................... 19 3 ACCOUNTING STANDARDS AND METHODS .................................................................................. 20 3.1 Accounting Principles and method evolution ........................................................................................ 20 3.1.1 New methods ....................................................................................................................................... 20 3.2 Format of the financial statements ....................................................................................................... 22 3.3 Key Performance Indicators ................................................................................................................. 22 3.4 Functional and presentation currency .................................................................................................. 22 3.5 Use of estimates ................................................................................................................................... 22 3.6 Segment information ............................................................................................................................ 24 3.7 Evolution of the consolidation area ....................................................................................................... 25 3.8 Key Performance Indicators ................................................................................................................. 25 3.9 Significant accounting policies .............................................................................................................. 26 3.9.1 Business combinations ......................................................................................................................... 26 3.9.2 Financial instruments ........................................................................................................................... 26 3.9.3 Share capital ........................................................................................................................................ 27 3.9.4 Property, plant and equipment ............................................................................................................. 27 3.9.5 Intangible assets .................................................................................................................................. 28 3.9.6 Impairment of assets ............................................................................................................................ 29 3.9.7 Inventories ............................................................................................................................................ 30 3.9.8 Employee benefits ................................................................................................................................ 30 3.9.9 Provisions ............................................................................................................................................. 31 3.9.10 Revenues recognition ...................................................................................................................... 32 3.9.11 Income taxes ................................................................................................................................... 32 3.9.12 Treasury stock and earnings per share ........................................................................................... 34

3

3.9.13 Other information ............................................................................................................................. 34 4 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ........................................................ 35 4.1 Revenues and Other Income................................................................................................................ 35 4.2 Cost of Goods Sold .............................................................................................................................. 36 4.3 Personnel costs .................................................................................................................................... 37 4.4 Other operating expenses .................................................................................................................... 37 4.5 Other costs for R&D and industrial operations ..................................................................................... 38 4.6 EBITDA (excluding Stock Option and Incentive Plans) (non-IFRS) ...................................................... 39 4.7 Amortization and depreciation .............................................................................................................. 39 4.8 Impairment and write up / down ........................................................................................................... 39 4.9 Non-recurring income and expenses .................................................................................................... 40 4.10 Incentive Plans ..................................................................................................................................... 40 4.11 EBIT ..................................................................................................................................................... 42 4.12 Net Financial Income and expenses .................................................................................................... 43 4.13 Income taxes ........................................................................................................................................ 43 4.14 Net income or loss ................................................................................................................................ 44 4.15 Property, plant and equipment ............................................................................................................. 44 4.16 Intangible Assets .................................................................................................................................. 45 4.17 Investments in entities accounted using the equity method ................................................................. 47 4.18 Other non-current financial assets ........................................................................................................ 47 4.19 Trade receivables ................................................................................................................................. 47 4.20 Inventories ............................................................................................................................................ 48 4.21 Other current assets and other current financial assets ....................................................................... 49 4.22 Cash and cash equivalent .................................................................................................................... 49 4.23 Net Equity ............................................................................................................................................. 49 4.24 Severance indemnity reserve and Employees’ incentive plan .............................................................. 50 4.25 Non-current deferred tax liabilities ........................................................................................................ 52 4.26 Trade payables ..................................................................................................................................... 52 4.27 Other Current and Non Current Liabilities ............................................................................................ 52 4.28 Financial liabilities ................................................................................................................................ 53 4.29 Net financial position ............................................................................................................................ 55 4.30 Related party disclosures ..................................................................................................................... 55 4.30.1 Intra-group Operations .................................................................................................................... 55 4.30.2 Significant agreements concluded with related parties .................................................................... 56 4.31 Board compensation ............................................................................................................................ 57 4.32 Statutory auditors’ compensation ......................................................................................................... 58 4.33 Loan commitments and guarantees and off-balance sheet commitments ............................................ 58 4.34 Financial Risk Management Objectives and Policies ........................................................................... 58 4.34.1 Risks associated with the euro-US dollar exchange rate .......................................................................................... 59 4.34.2 Liquidity Risk ............................................................................................................................................................. 59 4.34.3 Credit and/or counterparty risks ................................................................................................................................ 60 4.35 Subsequent events ............................................................................................................................... 60 4.36 Concordance table ............................................................................................................................... 62

5

2019 CONSOLIDATED FINANCIAL STATEMENT

The following statements have been examined by the Board of Directors of 19 March 2020 and have been audited by the Statutory Auditors.

This is a free translation into English of the ENGIE EPS Consolidated Financial Statement issued in the French language provided solely for the convenience of English-speaking readers. In case of discrepancy the French version prevails.

1 CORPORATE INFORMATION

1.1 Definitions

In this 2019 Consolidated Financial Statements unless specified otherwise the terms below have the following meanings:

2018 Registration Document: The Registration Document (Document de Référence) registered on 30 April 2019 with the French Market Authority (“AMF”), pursuant to its general regulations, and notably its article 212-3, under the number R.19-020 and updated on 3 June 2019 under number D.19-0294-A01.

2020-2025 Strategic Plan means the new ENGIE EPS’ plan that describes the refocusing on mainstream revenues and ongoing evolution of all the technological challenges facing the ENGIE EPS Group, its development strategy and the corresponding financial objectives until 2025. The 2020-2025 Strategic Plan has been approved in the board meeting of 12 December 2019.

Board of Directors means the Conseil d’Administration of the Company, in place and as composed as at the date of publication of this Consolidated Financial Statement.

Company or ENGIE EPS means the company ENGIE EPS S.A., a French limited liability corporation (société anonyme) with its registered headquarter located at 28, Rue de Londres, 75009, Paris, (France), and registered with the Trade and Companies Register of Paris under number 808 631 691. The former name of ENGIE EPS SA was Electro Power Systems SA until legal publication of 11 September 2019.

Consolidated Financial Statements of the ENGIE EPS Group means the consolidated financial statements of the Company prepared in accordance with IFRS norms as adopted by the European Union.

e-Mobility means distributed solutions to interface the rapidly-growing electric mobility fleets with the wider electrical system, in order to address the recharging needs of the vehicle fleet on one side, and the constraints and flexibility requirements of the grid on the other side.

ENGIE means ENGIE a société anonyme incorporated under the laws of France, with registered office in Courbevoie (92400), 1 place Samuel de Champlain (France) and number of registration with the Companies Register of Nanterre 542 107 651.

ENGIE EPS Group means the Company and its controlled companies.

ENGIE SPA means the sale and purchase agreement between the majority shareholders of EPS and GDF International signed on 24 January 2018.

ESOP means “Employee stock option plan”.

EPS Manufacturing means Electro Power Systems Manufacturing S.r.l. (formerly Electro Power Systems S.p.A.), an Italian limited liability company with its registered office located at Via Anton Francesco Grazzini, 14, Milan, Italy, and registered with the Trade and Companies Registry of

6

Milano, Italy under the number MI – 2073745 as well as in certain instances its subsidiaries. On 8 February 2017 EPS Manufacturing has been leased to EPS Elvi.

EPS Elvi means EPS Elvi Energy S.r.l. (formerly Elvi Energy S.r.l.), an Italian limited liability company with its registered office located at Via Anton Francesco Grazzini 14, Milan, Italy, and registered with the Trade and Companies Registry of Milano under the number MI 2082791.

EPS Mobility means the permanent establishment in Italy, following the spinoff of the e-Mobility and Power Electronics Lab going concern from EPS Elvi to EPS.

EPS USA means Electro Power Systems Inc., a limited liability company with its registered office located at 160 Greentree Drive, Suite 101, Dover, 19904 Kent County, USA.

GDF International means GDF International, a société par actions simplifiée incorporated under the laws of France,with registered office in Courbevoie (92400), 1 place Samuel de Champlain (France) and number of registration with the Companies Register of Nanterre 622 048 965.

Giga Storage means utility-scale storage solutions designed to support the transmission and distribution grids in dealing with increasing penetration of intermittent renewable sources;

Grid Support Solutions or Grid Connected Solutions means hybrid energy storage systems, developed to stabilize electical grids in developed countries, heavily penetrated by renewable sources.

GW means Gigawatt.

GWh means Gigawatt-hour.

IFRS means the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) and related interpretations (SIC/IFRIC) as adopted by the European Union.

Industrial Solutions means distributed storage solutions to address the sustainability, affordability and reliability needs of the industrial and power generation sectors;

IPP (“Independent Power Producer”) means an entity which is not a public utility, but which owns facilities to generate electric power for sale to utilities and end users.

KW means Kilowatt.

KWh means Kilowatt-hour.

MCM means MCM Energy Lab S.r.l., an Italian limited liability company with its registered office located at Via Anton Francesco Grazzini 14, Milano and registered with the Trade and Companies Registry of Milano under the number MI 1829289.

Mobility Solutions (or e-Mobility) means control techniques for the management of devices in full electric vehicles in collaboration with suppliers of electrical devices qualified as suppliers in the automotive sector.

MW means Megawatt.

MWh means Megawatt-hour.

New Profit-Sharing Plan or New Incentive Plan means the new profit-sharing plan adopted by the Board of Directors on 6 March 2018, under the ENGIE SPA.

Off-Grid Power Generation Solutions or Microgrids and Off-Grid Solutions means microgrids systems and support to power off-grid and weak-grid areas, at a lower cost and more realiably than fossil fuels developed in emerging economies.

Options refer to the options to subscribe shares of the Company, issued by the Board of Directors pursuant to an authorization granted by the extraordinary shareholders’ meeting of the Company held on 16 February 2015 (19th resolution), on 21 June 2016 (20th resolution) and 21 June 2017 (13th resolution), exercised by their beneficiaries, or replaced by SARs in the case of unexercised options.

Order Intake consists of the aggregate contract value in terms of MW or euros with reference to all purchase orders received, contracts signed and projects awarded for a period.

7

P2P means Power to Power.

PCS means Power Conversion Systems.

Pipeline means the estimate, to date, of the amount of potential projects, tenders and requests for proposals for which the ENGIE EPS Group has decided to participate or respond.

PPA (“Power Purchase Agreement”) means a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer).

Project Backlog means, as of the date of this presentation, the estimated revenues and other income attributable to

o purchase orders received, contracts signed and projects awarded as of the date hereof, and o projects secured on a Power Purchase Agreement basis, therefore where the agreed value is

a price per kWh of electricity and an amount of MW to be installed.

PV means Photovoltaic.

R&D means research and development.

SARs means Stock Appreciation Rights, a “cash” instrument which replaced the existing stock options and warrants, reproducing the economic profile of a stock options or a warrant.

1.2 Corporate details

The Company’s corporate name is ENGIE EPS S.A. and is commercially known as ENGIE EPS. The Company has been incorporated under the form of a Société Anonyme with a Board of Directors the rules of which are established under French laws and regulations.

The Company is registered under the:

Registry of Commerce and the Companies of Paris number 808 631 691.

SIRET number 808 631 691 00041.

NAF/APE code 7490B.

VAT number FR66808631691.

The Company was founded and registered on 26 December 2014 for a period of 99 years, with the expiration 26 December 2113.

1.3 Shareholders

The shareholding base of the Company as of 31 December 2019 was as follows:

9

1.4 Board of Directors

As of the date of this Consolidated Financial Statement, the Board of Directors is composed of ten members, as follows:

Thierry Kalfon, Chairman

Carlalberto Guglielminotti, Managing Director

Giuseppe Artizzu, Director

Anne Harvengt, Director

Cristina Tomassini, Director

Masimo Prelz Oltramonti, Director

Elise Collange, Director

Jean Rappe, Director

Romualdo Cirillo, Director

Csilla Khoalmi Monfils, Director

Independent Directors

Average age of Directors Female Directors

20% 48 40%

1.5 Auditors

BDO Paris Audit & Advisory,

RBB Business advisors.

1.6 Main Risks and Uncertainties

The main risks and uncertainties of the ENGIE EPS Group are detailed in note 4.344 of this Consolidated Financial Statements. As at 31 December 2019 there aren’t any risks connected to the diluting effect of incentive programs (please refer to note Errore. L'origine riferimento non è stata trovata.).

1.7 Transactions between Related Parties

Please refer to note 4.30 (Related party disclosures).

1.8 Summary of 2019 Group’s Results

Revenues and Other Income amount to €20.2 million as of 31 December 2019, up 29% compared to the previous year. This growth is mainly due to the early results under the Long Term Strategic Plan for “Giga Storage” with utility-scale storage and solar plus storage projects, and “Industrial Solutions” with microgrids and storage systems. Worth highlighting are, respectively, the successful deployment of the Sol De Insurgentes project in Mexico and the commissioning of the microgrid in Lifou, New Caledonia. In addition, during 2019, significant progress was made in the construction of the project in Comoros and for the storage solution for the Leini power plant, as well as for the commissioning of the third stage of our microgrid in Somaliland.

On the other hand, Project Backlog as of today amounts to €29.5 million, down 18% compared to the revised Project Backlog communicated on 21 June 2019 (44% if compared to the initial one communicated

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on 14 March 2019). The decrease in Project Backlog is driven by the reduction in order intake due to several significant projects that have been either delayed or not awarded.

Pipeline is up 127% over the same period, reaching €686 million. This Pipeline includes the project in Guam (US) where ENGIE has been selected as successful bidder for the construction of two Solar-plus-Storage projects under a 20-year power purchase agreement by the Power Authority of Guam (GPA) and where ENGIE EPS is the exclusive storage solution provider. Review of the appeal lodged by another bidder, final approval and formal contract award by the relevant authorities1 are underway. The appeal review process has however been put on hold due to COVID-19 cases in Guam. We therefore expect further delays for this project to enter the Backlog and we do not have sufficient visibility at present. The Pipeline features prominently other Giga Storage projects where ENGIE is the bidding entity and ENGIE EPS is the exclusive storage solution provider.

Gross margin stands at 26.5%, compared to 30% in 2018, mainly due to the lower margins of the project in Mexico, which however represents an iconic project brought by ENGIE and accounts for more than 60% of the FY2019 revenues.

Personnel costs increased by 53% reaching €6.7 million compared to €4.4 million in 2018. This is in line with the 2020-2025 Long Term Strategic Plan, which envisaged that ENGIE EPS would strengthen its workforce in order to obtain the necessary foundation to execute the new plan over the long-term horizon. In this respect, today ENGIE EPS has 115 employees, from 15 nationalities, 1/3 of which with a PhD or an MBA.

R&D investments amounted to €3.1 million, including expenses and capitalized amounts, stable compared to last year (€3.2 million). These investments represent 15% of consolidated revenues, confirming once more the strong commitment of ENGIE EPS to R&D and innovation.

Other Operating Expenses increased by 41% amounting to €2.3 million, compared to €1.6 million in 2018. This is mainly due to the growth of ENGIE EPS‘ structure, necessary to support business growth, in line with the Long Term Strategic Plan.

EBITDA represents a loss of €5.7 million in 2019 (€-5.3 million net of the impact of shutdown of non-core activities) compared to a €4.6 million loss in 2018, due to lower gross margins and the increase in operating expenses which more than offset the increase in revenues.

EBIT as at 31 December 2019 stands at -€15.1 million (-€11.6 million net of the shutdown of non-core activities) compared with -€11.9 million for the previous year. In line with the refocusing under the Long Term Strategic Plan, during 2019 a series of actions were carried out in order to discontinue all non-core activities – in particular the hydrogen business line and the related production capacity – which generated impairments for €2.4 million and provisions for €1.1 million. Those costs were one-offs related to the implementation of the Long Term Strategic Plan.

Net Result as of 31 December 2019 decreased by 68% compared to 2018, from €-8.7 million to €-14.6 million (€-11.1 million net of the shutdown of non-core activities).

Net Financial Position at the end of 2019 decreased to €-8.1 million compared to €6.8 million on 31 December 2018. The Group obtained a €22.5 million facility from Société Générale, with the support of ENGIE, in order to fund its working capital needs, R&D and capex investments, of which €12.5 million were drawn down in 2019.

BACKLOG AND PIPELINE HIGHLIGHTS

In the context of its 2020-2025 Long Term Strategic Plan, ENGIE EPS implemented a refocused strategy restructuring the organization around three product lines: (i) Giga Storage, with utility-scale storage and large solar plus storage projects, (ii) Industrial Solutions, with microgrids and storage systems, and (iii) e-Mobility, with innovative charging stations, typically Vehicle to Grid (V2G), and special charging devices leveraging on the ENGIE EPS intellectual property portfolio.

1 The Consolidated Commission on Utilities, the Guam Public Utilities Commission and the GPA.

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As iconic references included into the Pipeline and the Project Backlog, as well as early results of the implementation of the Long Term Strategic Plan, it is worth highlighting:

in the Giga Storage product line, ENGIE EPS is shortlisted in two bids worth in aggregate more than €300 million and 1.6 GWh, for projects expected to be online by 2023;

in the Industrial Solutions product line, ENGIE EPS secured its first microgrid in the USA and is well positioned to secure a second project in New Caledonia; and

in the eMobility product line, ENGIE EPS secured a framework for a broad European distribution of the Easy Wallbox, setting the production capacity up to 50,000 units in the next 18 months and the largest V2G pilot project in the world, both announced on 26 February 2019

1.9 Important events during the period

2018 Registration Document: on 30 April 2019, in accordance with its regulations, and notably article 212-3, the AMF financiers registered the 2018 Registration Document under number R.19-020, which has since been published on the EPS website engie-eps.com. The 2018 Registration Document was updated on 3 June 2019 under number D.19-0294-A01 and published on the EPS website engie-eps.com.

Capacity firming solar plus storage in Mexico: A deal, the Power Island Supply Contract, was signed with the ENGIE Solar SA for the engineering, procurement, supply and commissioning of 23 MWAC/31.055 MWp PV plant, located in Baja California Sur (Mexico) to be coupled with a 5.4 MW/3.17 MWh Battery Energy Storage System (“BESS”) power with ENGIE EPS Group cutting-edge technology, the first Limited Notice to proceed being signed in May 2019. In the framework of the project, the ENGIE EPS Group (i) successfully performed the Factory Acceptance Tests (FAT) of BESS in September 2019, (ii) designed, procured and supply the main PV plant equipment (PV modules, tracker, PV SCADA and PV inverter transformer stations). The commissioning and completion of the project is expected at the beginning of Q2 2020.

Comoros Microgrid - Phase I: With the contract signed on 16 November 2018, EPS Elvi entered into an agreement as a contractor for the Engineering, Procurement and Construction (EPC) of the first phase of the 21.1 MW microgrid in Comore Islands. In May 2019 the ENGIE EPS Group successfully performed the Factory Acceptance Test (FAT) of 2.7 MW / 2.85 MWh battery energy storage system to be coupled to a greenfield 3 MWp PV Plant. The construction of PV plant started in October 2019. The commissioning and completion of the project is expected at the beginning of Q2 2020.

Palau Update: in June 2019 ENGIE Eps was confirmed by PPUC as shortlisted after the technical proposal submissions. In September the shortlisted bidders where required to submit priced proposals. Based on those, a narrower shortlist of 4 bidders was prepared by PPUC and invited for a final bid submission in February 2020. ENGIE Eps submitted a final offer to PPUC and is now awaiting results. The February final bid submission request has been prepared by PPUC with the help of their recently appointed financial advisor: the Asian Development Bank (“ADB”), a positive development given ADB’s experience in this type of processes. It is however noteworthy that PPUC latest request for proposal had divided the original project in two phases – the first one of which will be approximately half of the original project’s size.

ENGIE EPS refocus strategy: on 21 June 2019, Engie EPS announced the new strategic focus underlying the 2020-2025 Long Term Strategic Plan. The new strategy strengthens the focus on mainstream business, but with a renewed and more streamlined approach. The new strategy outlined the necessity for ENGIE EPS to prioritize efforts and resource allocation. The refocusing and selectiveness approach implied the 2020 revenue guidance to be reduced to €40m and the outstanding €100m revenue target postponed to 2022. Results of the new strategy should materialize in the medium term, with a sustained strong revenue and margin growths. In the context of the refocusing strategy, ENGIE EPS started the shut-down of non-core business, namely H2 and Telecom projects as well as rail mobility.

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ENGIE EPS joins Renewables Global Business Line and ENGIE support: in the context of Engie EPS strategic focus, ENGIE has confirmed its strong support for the new strategy, through: including ENGIE EPS in the scope of the Renewables Global Business Line and meeting ENGIE EPS’ short term cash needs and working capital exposure in form of intercompany lending

ENGIE EPS SA: on 25 June 2019, the Annual General Meeting approved the amendment of the company name to ENGIE EPS SA.

Tax audit in France: on 8 August 2019 the Company received a notice by the French fiscal authorities (Direction Générale Des Finances Publiques) that an ordinary procedure of review related to tax compliance will be performed on ENGIE EPS. On 13 February 2020 the French fiscal authority communicated to Engie EPS that the tax audit was closed without any findings. Microgrid in Somalia: on 24 August 2019 the ENGIE EPS Group successfully performed the Site Acceptance Test (SAT) on the third phase of the most innovative power plant in Africa, upgrading the existing cutting-edge microgrid, designed, supplied and installed by ENGIE EPS Group, with further additional 2,000 kW and 616 kWh of installed capacity. The deal was signed with the National Energy Corporation of Somalia (NECSOM) to expand its microgrid.

Microgrid in New Caledonia: on 29 August 2019 the ENGIE EPS Group successfully performed the Site Acceptance Test (SAT) of 5.4 MW / 5.06 MWh BESS sired to 15 MW microgrid in Lifou island (New Caledonia). With the contract, signed on 5 December 2018, EPS Elvi entered into an agreement as a contractor for the Engineering, Procurement and Construction (EPC). Thanks to the cutting-edge off-grid capability the system will enable the achievement of the Renewable Energy strategy “Lifou 100% in 2020”.

Guam first ranked: on 7 October 2019 ENGIE EPS has been informed that the Power Authority of Guam, a U.S. territory in the Western Pacific, has selected ENGIE as successful bidder for the construction of two Solar-plus-Storage projects under a 20-year power purchase agreement, in the context of Phase III of the “Renewable Energy Resource” program. The Guam Power Authority (GPA) is now considering ENGIE, the lowest bidder amongst those qualified in the competitive tender process, for contract award. The two “Solar-after-Sunset” systems proposed by ENGIE integrate more than 50 MWp of solar PV with approx. 300 MWh of battery energy storage to render 100% of the daily solar production available for up to 7 hours after sunset. ENGIE EPS will supply the innovative battery storage design and act as full energy storage solution provider and system integrator, supported by its strategic partner Samsung SDI. The project is scheduled to be online in July 2022 to deliver over 85 GWh of clean dispatchable energy annually, in line with the island’s target of sourcing over 25% of energy from renewables.

Microgrid in Greece: in December 2019, within the framework of REMOTE EU project, the ENGIE EPS Group completed the manufacturing and internal factory tests of Power-to-Power integrated system (P2G 25kW, G2P 50 kW) to be incorporated in Agkistro Microgrid. The commissioning is expected in Q1 2020.

Terna UPI Pilot Project in Italy: In December 2019, within the framework of TERNA “Unità di Produzione Integrate” pilot project, the ENGIE EPS Group signed a contract with ENGIE Produzione S.p.A. for the Engineering Procurement and Construction of 7.2 MW/5.08 MWh BESS to support the existing power plant of Leinì in the provision of primary frequency regulation services to the grid in accordance with UPI requirements.

ENGIE EPS obtained €7.5m and 15m€ from Société Générale in June and December 2019 respectively in the form of two credit lines (to be paid back over a 4-year revolving credit facility) in order to fund its working capital needs, capitalized development costs and capex investments.

Rationalization of Group structure: in 2019 a process of rationalization of ENGIE EPS Group was initiated in order to simplify the organization and reduce G&A costs. The first step of the project was the liquidation of MCM approved on 10 December 2019 and closed in January 2020. Next steps will be the liquidation of EPS India as being part of ENGIE Group,as ENGIE EPS doesn’t require a local entity anymore in order to carry on business in Asia Pacific area.

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1.10 Subsequent events

FCA’s easy electric charging debuts with Easy Wallbox™ by ENGIE Eps: on 26 February 2020, presented with FCA the “Easy Wallbox™, patented by ENGIE Eps, exclusively for FCA. The product is the only wallbox that up to 2.2 kW and operating at up to 7.4 kW does not need to be set up by an installer or electrician. Dating back to 2017, the partnership between ENGIE Eps and Fiat Chrysler Automobiles is aimed at managing the changes in the best possible way and at coordinating all work related to electric mobility.

Microgrid in California: with the contract signed in January 2020, ENGIE EPS Group entered into an agreement as a contractor for the engineering, procurement supply and commissioning of the 2.0 MVA/4.0 MWh Battery Energy Storage System to be integrated into Anza Microgrid (California), consisting of existing 2.0 MWp PV plant and 1.35 MWp further extension. The commissioning and completion of the project is expected in Q4 2020.

ENGIE EPS’ CEO named Young Global Leader by the World Economic Forum: on 12 March 2020 ENGIE Eps’ Chief Executive Officer, Carlalberto Guglielminotti, has been recognized as a Young Global Leader by the World Economic Forum for his ability to innovate and promote sustainable change. Carlalberto Guglielminotti was identified as one of the world’s most promising and compelling leaders under the age of 40 for his accomplishments in the industrial sector, commitment to the promotion of positive change through technology, and for his achievements in bolstering the use of renewable energy around the world.

COVID -19 AND 2020 REVENUE GUIDANCE

On 21 June 2019, ENGIE EPS announced a revised revenue guidance of €40m for 2020 and €100m for 2022. It also presented an indicative ambition for 2025 of €400m of revenues in its Long Term Strategic Plan.

While the Pipeline is expected to generate revenues in 2021 onwards, the 2020 guidance rested mainly on projects moving from the opportunity pool to the Pipeline, then to the Backlog no later than 2019, and eventually generating revenues in 2020. As described above, some projects were not awarded to ENGIE, like the tender for new capacity in France, certain others are being delayed (in the US and Pacific islands), others have not materialized for ENGIE EPS, like the tenders in India and North Africa or a role of turnkey provider for large industrial projects that ENGIE EPS had planned in the e-mobility sector.

In addition, the COVID-19 outbreak is heavily impacting both the industrial operations of ENGIE EPS and its short-term business prospects. ENGIE EPS’ operations and the majority of the supply chain are based in Italy, the country currently at the epicenter of the European outbreak. The Italian government imposed the most drastic steps yet by any country except China to contain surging numbers of COVID-19 cases, placing almost immediately the region of Lombardy (where ENGIE EPS has two industrial premises) and more than a dozen other provinces in neighboring regions under quarantine on March 8. Restrictions were extended to the entire country on March 10, and then turned into a lockdown. In addition, travel restrictions all over the world are limiting the ability to ENGIE EPS to materialize its project development effort, particularly in large tender processes.

As the situation continues to unfold, ENGIE EPS is not currently in a position to quantify the adverse impact, the related consequences for our supply chain and construction sites worldwide (Italy, Mexico, California, Singapore, Comoros, and Greece), nor the scenarios for our projects under development (Europe, South Africa, Middle East, US and Pacific Islands). As a consequence, the different scenarios for 2020 revenue recognition, presented by the management and analyzed by the Board of Directors held on 19 March 2020, are subject to significant volatility.

All of the above certainly impacts ENGIE EPS’ 2020 guidance and ripples through the timing of the implementation of the Long Term Strategic Plan beyond 2020.

In the longer run, ENGIE EPS, together with ENGIE as its majority shareholder and industrial partner, remains fully committed to the Long Term strategic Plan and its 2025 €400 million revenue indicative ambition, bearing in mind that delivering this plan will require an improvement of the current economic environment highly penalized by the global Coronavirus pandemic.

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Further, the successful implementation of the 2020-2025 Long Term Strategic Plan is significantly predicated upon (i) ENGIE EPS and ENGIE prioritizing efforts and resource allocation on the markets where storage is most promising, e.g. with favourable regulation and already announced tenders for which both groups have a competitive hedge, (ii) ENGIE supporting ENGIE EPS in projects that make sense for both companies, and (iii) both partners being successful in winning and executing projects.


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2 CONSOLIDATED FINANCIAL STATEMENTS

2.1 Consolidated Income Statement

CONSOLIDATED INCOME STATEMENT(amounts in Euro)

NOTES 31/12/2019 31/12/2018

Revenues 19,684,041 15,540,960

Other Income 520,770 119,721

TOTAL REVENUES AND OTHER INCOME 4.1 20,204,810 15,660,681

Cost of goods sold 4.2 (14,857,163) (10,983,399)

GROSS MARGIN FROM SALES 5,347,646.92 4,677,282.29

% on Revenues 26.5% 29.9%

Personnel costs 4.3 (6,667,126) (4,352,366)

Other operating expenses 4.4 (2,316,539) (1,647,802)

Other costs for R&D and industrial operations 4.5 (2,094,303) (3,279,710)

EBITDA excluding Stock Option and Incentive Plans expenses (1) 4.6 (5,730,321) (4,602,596)

Amortization and depreciation 4.7 (2,985,304) (1,655,407)

Impairment and write down 4.8 (3,592,049) (289,038)

Non recurring income and expenses and Integration costs 4.9 (1,573,472) (2,627,433)

Stock options and Incentive plans 4.10 (1,206,490) (2,723,817)

EBIT 4.11 (15,087,635) (11,898,290)

Net financial income and expenses 4.12 (312,219) (692,014)

Revaluation of European Investment Bank warrants liabilities (IFRS 2) and other impacts of EIB loan prepayment 4.28 0 3,777,134

Income Taxes 4.13 755,570 78,532

NET INCOME (LOSS) 4.14 (14,644,285) (8,734,637.72)

Attributable to:

Equity holders of the parent company (14,644,285) (8,734,638)

Non-controlling interests 0 0

Basic earnings per share (1.15) (0.83)

Weighted average number of ordinary shares outstanding 12,766,860 10,525,521

Diluted earnings per share (1.15) (0.83)(1) EBITDA excluding Stock Option and Incentive Plans expenses is not defined by IFRS. It is defined in notes 3.8 and 4.6.

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2.2 Consolidated Statement of Other Comprehensive Income

OTHER COMPREHENSIVE INCOME(amounts in Euro)

31/12/2019 31/12/2018

NET INCOME (LOSS) (14,644,285) (8,734,638)

Exchange differences on translation of foreign operations and other differences (4,517) (156)

Actuarial gain and (losses) on employee benefits (123,021) (43,733)

Other comprehensive income (loss) for the year, net of tax (127,538) (43,889)

Total comprehensive income for the year, net of tax (14,771,823) (8,778,527)

Attributable to Equity holders of the parent company (14,771,823) (8,778,527)

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2.3 Consolidated Balance Sheet

ASSETS(amounts in Euro)

NOTES 31/12/2019 31/12/2018

Property, plant and equipment 4.15 3,097,589 1,294,653

Intangible assets 4.16 6,979,216 7,986,470

Investments in entities accounted using the equity method 4.17 996 996

Other non current financial assets 4.18 143,346 143,227

TOTAL NON CURRENT ASSETS 10,221,147 9,425,346

Trade and other receivables 4.19 19,077,189 8,164,968

Inventories 4.20 2,985,948 3,052,853

Other current assets 4.21 4,680,548 1,981,965

Current financial assets 4.21 428,201 350,000

Cash and cash equivalent 4.22 6,431,376 10,860,527

TOTAL CURRENT ASSETS 33,603,262 24,410,314

TOTAL ASSETS 43,824,409 33,835,660

EQUITY AND LIABILITIES(amounts in Euro)

NOTES 31/12/2019 31/12/2018

Issued capital 4.23 2,553,372 2,553,372

Share premium 4.23 48,147,696 48,843,750

Other Reserves 4.23 4,586,787 4,932,184

Retained Earnings 4.23 (38,306,765) (30,296,289)

Profit (Loss) for the period before Revaluation of European Investment Bank warrants liabilities (IFRS 2) 4.23 (14,644,285) (12,511,771)

Total Equity before European Investment Bank variation (IFRS 2) 4.23 2,336,804 13,521,244

Revaluation of European Investment Bank warrants liabilities (IFRS 2) - Impact on Net Profit 4.23 0 3,777,134

TOTAL EQUITY 4.23 2,336,804 17,298,378

Severance indemnity reserve and Employees' benefits 4.24 4,825,619 4,226,240

Non current financial liabilities 4.28 13,254,905 1,810,167

Other non current liabilities 4.27 1,631,591 0

Non current deferred tax liabilities 4.25 16,494 16,494

TOTAL NON CURRENT LIABILITIES 19,728,609 6,052,901

Trade payables 4.26 15,962,964 5,513,949

Other current liabilities 4.27 4,518,758 2,709,845

Current financial liabilities 4.28 1,277,274 2,240,696

Income tax payable 0 19,892

TOTAL CURRENT LIABILITIES 21,758,996 10,484,381

TOTAL EQUITY AND LIABILITIES 43,824,409 33,835,660

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2.4 Consolidated Statement of Changes in Equity

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(amounts in Euro)

NOTES

Sh

are

Cap

ital

Pre

miu

m

Res

erve

Sto

ck O

pti

on

an

d W

arra

nts

p

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res

erve

Oth

er R

eser

ves

Ret

ain

ed

Ear

nin

gs

(Lo

sses

)

Pro

fit

(Lo

ss)

for

the

per

iod

Tot

al E

quity

be

fore

Eur

opea

n In

vest

men

t B

ank

vari

atio

n (I

FR

S 2

)

Rev

alua

tion

of

Eur

opea

n In

vest

men

t B

ank

war

rant

s lia

bilit

ies

(IF

RS

2)

and

othe

r im

pact

s of

E

IB lo

an

prep

aym

ent

TO

TA

L E

QU

ITY

Net Equity as of 31 December 2017 4.23 1.687.925 19.451.395 6.604.909 (173.645) (20.198.389) (5.923.291) 1.448.905 (3.086.219) (1.637.314)

IFRS 15 first time adoption as at 1 January 2018

4.23 (1.074.563) (1.074.563) (1.074.563)

Previous year result allocation 4.23 - - - (9.009.510) 5.923.291 (3.086.219) 3.086.219 -

Stock option and warrants 4.23 - - (1.453.787) - - (1.453.787) (1.453.787)

Shareholder's capital increase 4.23 865.446 29.392.355 - - - 30.257.801 30.257.801

Other movements 4.23 (1.560) (13.671) (15.231) (15.231)

Loss for the period 4.23 - - - - (12.511.771) (12.511.771) 3.777.134 (8.734.638)

Total comprehensive income 4.23 - - - (43.733) (156) - (43.889) - (43.889)

Net Equity as of 31 December 2018 4.23 2.553.372 48.843.750 5.151.122 (218.938) (30.296.289) (12.511.771) 13.521.245 3.777.134 17.298.379

Previous year result allocation 4.23 (27.704) (8.706.934) 12.511.771 3.777.134 (3.777.134) -

Stock option and warrants 4.23 (181.831) (181.831) (181.831)

Shareholder's capital increase 4.23 - -

Other movements 4.23 (696.054) (12.828) 700.882 (8.000) (8.000)

Loss for the period 4.23 (14.644.285) (14.644.285) (14.644.285)

Total comprehensive income 4.23 - - (123.021) (4.517) - (127.538) - (127.538)

Net Equity as of 31 December 2019 4.23 2.553.372 48.147.696 4.969.291 (382.492) (38.306.857) (14.644.285) 2.336.725 - 2.336.725

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2.5 Consolidated Statement of Cash Flows

CASH FLOW STATEMENT(amounts in Euro)

NOTES 31/12/2019 31/12/2018

Net Income or Loss 4.14 (14,644,285) (8,734,638)

Non-cash adjustment to reconcile profit before tax to net cash flows (357,655)

Revaluation of European Investment Bank warrants liabilities (IFRS 2) and other impacts of EIB loan prepayment 4.28 0 (3,777,134)

Amortisation and depreciation 4.7 2,985,304 1,655,407

Impairment and write down 4.8 3,592,049 289,038

Stock option and incentive plans impact 4.10 1,206,489 (1,466,296)

Defined Benefit Plan 4.24 599,379 443,411

Non-cash variation in bank debts 4.28 528,048 488,338

Working capital adjustments

Decrease (increase) in tax assets 4.13 221 719,544

Decrease (increase) in trade and other receivables and prepayments 4.19 (13,689,123) (4,362,766)

Decrease (increase) in inventories 4.20 66,905 1,780,617

Increase (decrease) in trade and other payables 4.26 6,925,288 3,224,791

Increase (decrease) in SARs Liability 4.23 0 0

Increase (decrease) in non current assets and liabilities 4.24 107,590 2,686,501

Net cash flows from operating activities (12,322,135) (7,410,842)

Investments

Net Decrease (Increase) in intangible assets 4.16 433,625 (3,137,602)

Net Decrease (Increase) in tangible assets 4.15 (276,528) (780,971)

Net Decrease (Increase) due to IFRS 16 FTA 4.15 (2,175,922) 0

Net cash flows from investments activities (2,018,826) (3,918,573)

Financing

Increase (decrease) in bank debts 4.28 9,953,268 (12,304,402)

Shareholders cash injection 0 30,257,801

Investments in company accounted for using the equity method 0 (996)

IFRS 16 Impact (41,460)

Net cash flows from financing activities 9,911,808 17,952,403

EPS S.A. net cash and cash equivalent at Period Beginning

Net cash and cash equivalent at the beginning of the period 10,860,527 4,237,540

NET CASH FLOW FOR THE PERIOD (4,429,153) 6,622,988

NET CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 6,431,375 10,860,527

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3 ACCOUNTING STANDARDS AND METHODS

The Consolidated Financial Statements reflect the financial situation of ENGIE EPS S.A. (the “Company”, or “ENGIE EPS”) and its subsidiaries.

On 19 March 2020, the Board of Directors established and authorized the publication of the 2019 Consolidated Financial Statements that will be definitive after their approval at the General Meeting.

3.1 Accounting Principles and method evolution

The Group presented financial information concerning the assets, liabilities, financial position, and profit and loss for the last two reporting periods (ended 31 December 2018 and 2019). This information was prepared in accordance with European Regulation (EC) 1606/2002 “on the application of international accounting standards” dated July 19, 2002. The Group’s consolidated financial statements for the year ended 31 December 2019 have been prepared in accordance with IFRS Standards as published by the International Accounting Standards Board and endorsed by the European Union. The accounting standards applied in the consolidated financial statements for the year ended 31 December 2019 are consistent with the policies used to prepare the consolidated financial statements for the year ended 31 December 2018, except for those described in paragraph 3.1.1.

3.1.1 New methods

IFRS 16 - Leases

On 13 January 2016 IASB issued the standard IFRS 16 “Leases”, which will replace IAS 17 and the related IFRIC and SIC interpretations. IFRS 16 eliminated the difference between financial and operating leases. For contracts which can be qualified as leases according to IFRS 16 criteria, a lessee recognizes a right-of-use asset and a lease liability. As a consequence, the lease liability decreases by the present value of the lease payments payable over the lease term. In P&L, the lease charge is eliminated and replaced by the depreciation of the right-of-use asset and financial interests. Automatically, an improvement of EBITDA is recorded.

The Group adopted IFRS 16 - Leases from January 1, 2019, using the modified retrospective approach. Under this method, comparative information is not restated. As at January 1, 2019, a right-of-use asset and a lease liability are recognized on the balance sheet for the same amount, i.e. 2,051 k€. The first-time application of IFRS 16 does not impact equity on January 1, 2019.

On applying IFRS 16 for the first time, on January 1, 2019, the Group chose to use the following practical expedients permitted by the standard: to exclude leases for which the residual lease term ends within 12 months of the transition date.

Assessment of the lease term, including whether a renewal option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised, was made on a case-by-case basis. After transition, the assessment is reviewed if a significant event or a significant change in circumstances that is within the control of the lessee occurs and may affect the assessment made.

The Group uses the recognition exemptions allowed by the standard, and therefore does not recognize any right-of-use assets and liabilities for leases with a lease term of 12 months or less (“short-term leases”), and for leases for which the underlying asset is of a low value (“low-value asset”). Payments associated with these leases are recognized on a straight-line basis as expenses in profit and loss.

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Lease liabilities are represented by the rental of building and plant sites in Milan, Cosio Valtellina Rivoli and Point Saint Martin. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing. This rate was calculated based on the Group’s incremental borrowing rate adjusted in accordance with IFRS 16, taking into account the remaining duration of the contract at 1 January 2019. The methodology applied to determine the incremental borrowing rate reflects the profile of the lease payments (duration method). The weighted average incremental borrowing rate applied to the lease liabilities was 2.26%. No impact has been considered on deferred tax.

The chart below provides a summary of effects accounted on opening balances as at 1 January 2019:

IFRIC 23 - Uncertainty over Income Tax Treatments

ASSETS(amounts in Euro)

31/12/2018 IFRS 16 01/01/2019

Property, plant and equipment 1,294,653 2,051,318 3,345,971

Intangible assets 7,986,470 7,986,470

Investments in entities accounted using the equity method 996 996

Other non current financial assets 143,227 143,227

Other non current assets 0 0

TOTAL NON CURRENT ASSETS 9,425,346 2,051,318 11,476,664

Trade and other receivables 8,164,968 8,164,968

Inventories 3,052,853 3,052,853

Other current assets 1,981,965 1,981,965

Current financial assets 350,000 350,000

Cash and cash equivalent 10,860,527 10,860,527

TOTAL CURRENT ASSETS 24,410,314 0 24,410,314

TOTAL ASSETS 33,835,660 2,051,318 35,886,978

EQUITY AND LIABILITIES(amounts in Euro)

31/12/2018 IFRS 16 01/01/2019

Issued capital 2,553,372 2,553,372

Share premium 48,843,750 48,843,750

Other Reserves 4,932,184 4,932,184

Retained Earnings (30,296,289) (30,296,289)

Profit (Loss) for the period before Revaluation of European Investment Bank warrants liabilities (IFRS 2) (12,511,771) (12,511,771)

Total Equity before European Investment Bank variation (IFRS 2) 13,521,244 0 13,521,244

Revaluation of European Investment Bank warrants liabilities (IFRS 2) - Impact on Net Profit 3,777,134 3,777,134

TOTAL EQUITY 17,298,378 0 17,298,378

Severance indemnity reserve and Employees' benefits 4,226,240 4,226,240

Non current financial liabilities 1,810,167 1,810,167

Other non current liabilities 0 1,732,205 1,732,205

Non current deferred tax liabilities 16,494 16,494

TOTAL NON CURRENT LIABILITIES 6,052,901 1,732,205 7,785,106

Trade payables 5,513,949 319,113 5,833,062

Other current liabilities 2,709,845 2,709,845

Current financial liabilities 2,240,696 2,240,696

Income tax payable 19,891 19,891

TOTAL CURRENT LIABILITIES 10,484,380 319,113 10,803,493

TOTAL EQUITY AND LIABILITIES 33,835,660 2,051,318 35,886,978

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IFRIC 23 clarifies the accounting for uncertainties in income taxes. The interpretation is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. ENGIE EPS has not registered any material impact related to the application of IFRIC 23.

3.2 Format of the financial statements

ENGIE EPS Group presents an income statement using a classification based on the nature of expenses, rather than one based on their function, as this is believed to provide information that is more relevant. For the statement of financial position, a mixed format has been selected to present current and non-current assets and liabilities, as permitted by IAS 1. The statement of cash flows is presented using the indirect method.

3.3 Key Performance Indicators

ENGIE EPS Group adopts the following non-IFRS performance indicators:

EBITDA (excluding “Stock Option and Incentive Plans” expenses), calculated as Gross Margin from Sales minus “Personnel costs, Other operating expenses and Other costs for R&D and industrial operations”;

EBITDA adjusted excluding Shut-down (excluding “Stock Option and Incentive Plans” expenses) adjusted for R&D expenses not capitalized and for Inventory write-off since it is related to shut-down of non-core activities occurred in FY 2019;

EBIT adjusted, calculated by restating “Stock Option and Incentive Plans expenses”, “Non-recurring Items” from the EBIT and total negative impact of shut-down in FY 2019, as they have been classed as extraordinary costs and won’t be repeated in the following years as reported in the new ENGIE EPS Business Model;

R&D investments calculated as percentage of capitalized and not capitalized R&D costs on total revenues of the period.

KPI evolution is presented in note 3.7.

3.4 Functional and presentation currency

The Consolidated Financial Statements are prepared in Euro, which is ENGIE EPS Group’s functional and presentation currency. All financial information presented in Euro has been rounded to the nearest unit.

3.5 Use of estimates

The 2019 Consolidated Financial Statements, in accordance with IFRS principles, required the use of estimates, judgments and assumptions that affect the carrying amount of assets and liabilities, income and expense, as well as the disclosures in the notes relating to contingent assets and liabilities. The estimates and associated assumptions are based on elements that are known when the financial statements are prepared, on historical experience and on any other factors considered to be relevant. The estimates and

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underlying assumptions are reviewed periodically and if the items subject to estimates do not perform as assumed, then the actual results could differ from the estimates.

During the preparation of 2019 Consolidated Financial Statements, ENGIE EPS Group particularly focused on the following items:

Recoverable amount of non-current assets: specifically, non-current assets include property, plant and equipment, intangible assets with definite useful lives (development costs) and other financial assets. ENGIE EPS Group periodically reviews the carrying amount of non-current assets held and used when events and circumstances warrant such a review and at least annually the carrying amount of intangible assets with indefinite useful lives. The analysis of the recoverable amount of non-current assets is usually performed using estimates of future expected cash flows from the use or disposal of the asset and a suitable discount rate in order to calculate present value or fair value less cost to sell;

Post-retirement benefits are measured on an actuarial basis which takes into consideration parameters of a financial nature such as the discount rate, the rates of salary increase and the rates of health care cost increases and the likelihood of potential future events estimated by using demographic assumptions such as mortality rates, dismissal and retirement rates;

Allowance for doubtful accounts: the allowance for doubtful accounts reflects the management’s estimate of losses to be incurred, which derives from past experience with similar receivables, current and historical past due amounts, write-offs and collections, the careful monitoring of portfolio credit quality and current and projected economic and market conditions;

Allowance for obsolete and slow-moving inventory: it has been determined on the basis of past experience, as well as on historical and expected future trends;

Deferred tax assets are recorded if they are likely to be recovered according to the expected future taxable results;

The fair value of the financial assets and liabilities are included in the ENGIE EPS Group’s financial statements at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

For equity-settled share-based payment transactions, the Company measures the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received at the measurement date, based on market prices if available, taking into account the terms and conditions upon which those equity instruments were granted, unless that fair value cannot be estimated reliably.

For cash-settled share-based payment transactions, the Company measures the goods or services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the Company remeasures the fair value of the liability at each reporting date and at the date of settlement, with any changes in fair value recognized in profit or loss for the period.

Estimation of useful life of assets (depreciation)

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3.6 Segment information

The Group is not yet organized into business units and no segments have been identified and/or measured by management. Information about geographical areas and activities are provided for Revenues and Other Income in paragraph 4.1.

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3.7 Evolution of the consolidation area

No changes have occurred in the consolidation perimeter since 31 December 2018:

As a reminder, in December 2019 MCM liquidation was approved by the Board of Directors and the Shareholders meeting. The process has been closed in January 2020. Please also refer to paragraphs 1.9 and 4.35.

3.8 Key Performance Indicators

As at 31 December 2019 “Total revenues and other income” increased by 4.544 k€ compared to FY 2018.

The stated EBIT is impacted by the shut-down of non-core activities for a total amount of 3.510 k€; “Non-recurring income and expenses” for a total amount of 1,573 k€ and Stock options and incentive plans for an amount of 1,206 k€.

COMPANY PERCENTAGE OF CONSOLIDATION

31/12/2019

ENGIE EPS 100% Parent Company

EPS Manufacturing 100% Line by Line

EPS USA 100% Line by Line

EPS ELVI 100% Line by Line

MCM 100% Line by Line

COMORES ÉNERGIES NOUVELLES SARL 49% Equity method

KEY PERFORMANCE INDICATORS(amounts in Euro)

Stated Adjustments Adjusted Indicator

Stated Adjustments Adjusted Indicator

Total revenues and other income 20,204,810 0 20,204,810 15,660,681 0 15,660,681 Cost of goods sold (14,857,163) 394,032 (14,463,131) (10,983,399) 0 (10,983,399)Gross margin from sales 5,347,647 394,032 5,741,679 4,677,282 0 4,677,282

Personnel costs (6,667,126) 0 (6,667,126) (4,352,366) 0 (4,352,366) Other operating expenses (2,316,539) 0 (2,316,539) (1,647,802) 0 (1,647,802) Other costs for R&D and industrial operations (2,094,303) 18,705 (2,075,598) (3,279,710) 0 (3,279,710) EBITDA excluding Stock Option and Incentive Plans expenses (1) (5,730,321) 18,705 (5,711,616) (4,602,596) 0 (4,602,596)

EBITDA excluding Shut-down (5,730,321) 412,737 (5,317,583) (4,602,596) 0 (4,602,596) Amortization and depreciation (2,985,304) 311,397 (2,673,907) (1,655,407) (1,655,407) Impairment and write down (3,592,049) 2,805,081 (786,968) (289,038) (289,038) Non recurring income and expenses (1,573,472) 1,573,472 0 (2,627,433) 2,627,433 0 Stock options and Incentive plans (1,206,490) 1,206,490 0 (2,723,817) 2,723,817 0 EBIT Adjusted (15,087,635) 2,779,962 (12,307,674) (11,898,290) 5,351,250 (6,547,040)

EBIT excluding Shut-down (15,087,635) 6,309,176 (8,778,459) (11,898,290) 5,351,250 (6,547,040)

Net financial income and expenses (312,219) 0 (312,219) (692,014) (692,014) Revaluation of European Investment Bank warrants liabilities (IFRS 2) and other impacts of EIB loan prepayment

0 0 0 3,777,134 (3,777,134) 0

Income Taxes 755,570 0 755,570 78,532 0 78,532NET INCOME (LOSS) excluding Shut-down (14,644,285) 6,309,176 (8,335,109) (8,734,639) 1,574,116 (7,160,523)

Captalized R&D costs 3,081,375 0 3,081,375 2,940,361 0 2,940,361 Not capitalized R&D costs 18,705 0 18,705 212,182 0 212,182Total R&D costs of the period 3,100,080 0 3,100,080 3,152,543 0 3,152,543 Total revenues 20,204,810 0 20,204,810 15,660,681 0 15,660,681R&D investments % on Reveues 15% 15% 20% 20%(1) EBITDA excluding Stock Option and Incentive Plans expenses is not defined by IFRS. It is defined in notes 4.6

2019 2018

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R&D capitalized and not capitalized costs decreased from 3,193 k€ in 2018 to 3,100 k€ in 2019, representing 15% of Revenues, confirming the strong commitment of ENGIE EPS in investing in cutting edge technology.

3.9 Significant accounting policies

3.9.1 Business combinations

Business combinations are accounted for using the acquisition method under IFRS 3. The identifiable assets acquired, the liabilities and contingent liabilities assumed are recognized at their fair value at that date of the acquisition if they meet IFRS 3 accounting criteria. The goodwill represents the future cash flows deriving from the post-acquisition synergies exceeding the identifiable assets acquired and the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.

If the initial accounting for a business combination can be determined only provisionally by the end of the first reporting period, the business combination is accounted for using provisional amounts. Adjustments to provisional amounts, and the recognition of newly identified asset and liabilities, must be made within the 'measurement period' where they reflect new information obtained about facts and circumstances that were in existence at the acquisition date. The measurement period cannot exceed one year from the acquisition date and no adjustments are permitted after one year except to correct an error.

3.9.2 Financial instruments

Non-derivative financial assets

The ENGIE EPS Group initially recognized loans and receivables and deposits on the date they originated. All other financial assets (including assets designated at fair value through profit and loss) are recognized initially on the trade date at which the ENGIE EPS becomes a party to the contractual provisions of the instrument.

The ENGIE EPS Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the right to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of the ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the ENGIE EPS is recognized as a separate asset or liability.

Financial assets and liabilities are offset, and the net amount presented in the statement of financial position, when, and only when, the ENGIE EPS has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

The ENGIE EPS Group has the following non-derivative financial assets:

loans and receivables; and

cash and cash equivalents.

Loans and receivables

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Loans and receivables are financial assets with fixes or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. These financial assets are subject to a provision for expected losses as of their initial recognition, according to the so-called simplified method prescribed by IFRS 9 for trade receivables

Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less, without risk of changes in value.

Non-derivative financial liabilities

ENGIE EPS Group initially recognizes debt securities issued and subordinated liabilities on their date of origination. All other financial liabilities are recognized initially on the trade date, which is the date that ENGIE EPS becomes a party to the contractual provisions of the instrument.

ENGIE EPS Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

Financial asset and liabilities are offset and the net amount presented in the statement of financial position when, and only when, ENGIE EPS has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

The ENGIE EPS classifies non-derivate financial liabilities into the other financial liability’s category. Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

Other financial liabilities are comprised of loans and borrowings, other short-term financial liabilities, and trade and other payables.

Bank overdrafts that are repayable on demand and form an integral part of the ENGIE EPS Group’s cash management are included as a component of cash and cash equivalents.

3.9.3 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.

3.9.4 Property, plant and equipment

Costs

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Items of property, plant and equipment are measured at acquisition cost less accumulated depreciation and accumulated impairment losses.

Gain and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized in the profit and loss.

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the ENGIE EPS and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-by-day servicing of property, plant and equipment are recognized in profit and loss as incurred.

Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

Depreciation is recognized in the profit and loss on a straight-line basis over the estimated useful live of each component of an item of property, plant and equipment. Land is not depreciated.

The estimated useful lives for the current and comparative years are as follows:

Equipment and machinery – 6, 7 years

Electronic hardware – 5 years

Furniture – 6, 7 years

Vehicles – 5 years

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate for the future.

3.9.5 Intangible assets

Development costs and other intangible assets

Other intangible assets consist of internally generated items in the development phase which are recognized if, and only if, the ENGIE EPS Group can demonstrate all of the following:

the technical feasibility of completing the intangible asset so that it will be available for use or sale;

its intention to complete the intangible asset and use or sell it;

its ability to use or sell the intangible asset;

how the intangible asset will generate probable future economic benefits – among other things, the ENGIE EPS Group can demonstrate the existence of a market for the output of the intangible assets or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;

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the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Internally generated brands, customer lists and items similar in substance are not recognized as intangible assets.

The cost of the internally generated intangible asset is the sum of expenditure incurred from the date when the intangible asset first meets the recognition criteria and comprises all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit and loss as incurred.

Amortization

Amortization is based on the cost of an asset less its residual value. Amortization is recognized in profit and loss on a straight-line basis over the estimated useful lives of intangibles asset, other than goodwill, from the date that they are available for use.

The estimated useful lives for the current and comparative years are as follows:

development costs – from 3 to 5 years, depending on the specific project. During 2019 most of capitalized development costs amortization were accelerated from 5 to 3 years in order to be in line with R&D Plan timeline;

improvements to third party assets – 6 years

trademarks, patents and licenses with definite useful life – 10 years (anyway not longer than the patent or the license life).

Amortization method, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Non-current Assets Held for Sale and Discontinued Operations

Assets (or disposal groups) held for sale are not depreciated, are measured at the lower of carrying amount and fair value less costs to sell and specifically disclosed.

3.9.6 Impairment of assets

At the end of each reporting period, ENGIE EPS Group assesses if there is any indication that its intangible assets (including development costs) and its property, plant and equipment may need to be impaired.

An impairment loss is recognized if the carrying amount of an asset or its related cash-generating unit (“CGU”) exceed its estimated recoverable amount.

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The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest ENGIE EPS Group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU.

An impairment loss is recognized if the recoverable amount is lower than the carrying amount.

Impairment losses are recognized in profit and loss. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortization, if no impairment loss had been recognized. On the contrary, impairment loss on goodwill cannot be reversed. The reversal of an impairment loss is recognized in the income statement immediately.

Determination of cash generating units

ENGIE EPS Group has one unique business activity, i.e. the sale of a Balance of System and related components for Grid Support Solutions Off-Grid Power Generation Solutions and Mobility Solutions. The tangibles assets of the ENGIE EPS do not generate largely independent cash flows and therefore the impairment tests are performed on the ENGIE EPS as a whole.

All the tangible assets (i.e. the manufacturing plants and laboratory) are located in Italy and are dedicated to the activities pertaining to the Balance of System. Such Balance of System are manufactured or vertically integrated by EPS thanks to its vertically integrated technology platform and related know-how (patents, development and know-how). All intangible assets are dedicated to the sale of hybrid storage solutions. In particular, development costs, patents, EPS Elvi goodwill (mainly related to hybrid storage solutions know-how) and trademarks accounted in the consolidated Financial Statements are connected to the sale of hybrid storage solutions. As a consequence, it is not possible to identify any ENGIE EPS assets smaller than the whole ENGIE EPS Group’s assets, because these assets generate cash flows linked with the sale of hybrid storage solutions to clients worldwide.

3.9.7 Inventories

Inventories are measured at the lower between the cost and net realizable value. The cost of inventories is based on the weighted average method, and includes expenditure incurred in acquiring the inventories, conversion costs and other costs incurred in bringing them to their existing location and condition. Transfer from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchase of inventories may also be included as costs

Provisions are made for obsolete and slow-moving raw material, finished goods, spare parts and other supplies based on their expected recoverable amount and realizable value. Net realizable value is estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

3.9.8 Employee benefits

Defined contribution plans

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A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit and loss in the periods during which services are rendered by employees.

In Italy,EPS Elvi and ENGIE EPS Italian permanent establishment the most relevant operating entities, almost every employee benefits of a defined contribution plan is provided by law (so called “Trattamento di fine Rapporto” - TFR). Companies have to pay, on a monthly basis, a certain percentage of the employees’ payroll. These amounts are collected by INPS (Istituto Nazionale della Previdenza Sociale – National Social Insurance Agency) that will ensure a pension to the employee on retirement. Employees can also choose to address their TFR to pension funds different from INPS.

The accumulated TFR fund is then paid when a job separation occurs, regardless of its reason, or at retirement. Under specific circumstances, the employee working more than eight consecutive years with the same employer can obtain a partial withdrawal on the accumulate TFR. This benefit is unfunded.

The ENGIE EPS Group determines the net defined benefit liability for the period on the basis of an actuarial calculation. Actuarial gains and losses are recognized immediately in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit and loss in subsequent periods.

Short-term employee benefits

Short-term employee benefit obligations are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

Stock-option plans

According to IFRS 2, services paid through the issuance of shares, or rights to shares should be accounted for in personnel costs. These services are evaluated at fair value of the instruments granted and are recognized as costs in the period in which the rights are acquired. Since these plans are settled through ENGIE EPS Group’s shares, the entry corresponding to these costs is recognized directly in Equity.

3.9.9 Provisions

A provision is recognized if, as a result of a past event, the ENGIE EPS Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

A provision for restructuring is recognized when ENGIE EPS has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future operating costs are not provided for.

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3.9.10 Revenues recognition

Revenues are recognized to the extent that it is probable that the economic benefits will flow to the ENGIE EPS Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. ENGIE EPS has concluded that it is the Principal entity in all of its revenue arrangements since it is the primary obligor in all arrangements generating revenues, it has pricing latitude and it is also exposed to inventory.

Revenue from the sale of goods is recognized in accordance with IFRS 15 when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates. The ENGIE EPS Group provides normal warranty provisions for general repairs for two years on all its products sold, in line with the industry practice. Based on the historical warranty costs sustained and on the warranty obligations still pending, no provision has been considered necessary.

Rendering of services and construction contracts

Revenues deriving from rendering of services (installation and maintenance of installed machineries) are accounted according to IFRS 15, when transferring control to the customer, which in practice generates continuous recognition over the service period.

Revenues from construction contracts: Income on these contracts is recognized for completion only to the extent that the criteria set out in IFRS 15 are fulfilled. This includes demonstrating that an asset is built without alternative use and that the contract provides for securing payments up to the incurred costs incremented by a reasonable margin. For these contracts, the income is then recognized at the stage of progress according to the cost method incurred. When the contract outcome cannot be measured reliably, revenue is recognized only to the extent that the expenses incurred are eligible to be recovered.

If the conditions for a continuous income recognition are not met, the turnover is then recognized only at the end of the project, when the control is transferred to the customer.

Finally, each contract is broken down into several performance bonds, with a turnover allocated and recognized according to the criteria specific to each of them.

Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied by the ENGIE EPS Group. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it reduces the carrying amount of the asset. The grant is then recognized in profit and loss over the useful life of the depreciable asset by way of a reduced depreciation charge.

3.9.11 Income taxes

Current income tax

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Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the ENGIE EPS Group operates and generates taxable income.

Current income tax relating to items recognized directly in equity is recognized in equity and not in the statements of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretations and establishes provisions where appropriate.

Deferred taxes

Deferred taxes are accounted for by using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit and loss; and

in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit and loss; and

in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

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Deferred tax relating to items recognized outside profit and loss is recognized outside profit and loss. Deferred tax items are recognized in correlation to the underlying transaction either in profit and loss or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable rights exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognized subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognized in profit and loss.

3.9.12 Treasury stock and earnings per share

The cost of any treasury stock purchased and/or held, also through subsidiaries, as a result of specific shareholder resolutions are recognized as a deduction from equity. The proceeds from any subsequent sale are recognized in equity.

Basic earnings per share are calculated by dividing the profit (loss) attributable to owners of the parent entity by the weighted average number of shares outstanding during the year. For diluted earnings per share, the weighted average number of shares outstanding is adjusted assuming conversion of all shares having a potential dilutive effect.

3.9.13 Other information

The ENGIE EPS Group did not enter into any derivative financial instruments nor into any contractual agreements to transfer financial assets.

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4 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4.1 Revenues and Other Income

Revenues and Other Income amount to 20,205 k€ increasing by 29% compared to FY 2018.

The Revenues and Other Income detail is as follow:

The increase in revenues is the result of the New Business Model which sees ENGIE EPS moving away from smaller, one-off projects with long development timetables and uncertain outcomes towards larger projects with more predictable outcomes and/or small but replicable solutions for clients with a clear de-carbonization agenda.

The increase in revenues related to Construction contracts is affected by both the previous and current Business Models as they are based on the positive developments of grid support in developed economies and microgrids in islands and in emerging countries – in both cases partnering with ENGIE.

Most of the Construction contracts revenues refers to the successful deployment of Sol De Insurgentes project in Mexico, a Solar-plus-Storage project in collaboration with ENGIE, as specified above. The project is located in Comondú, Baja California Sur, México with an installed capacity of 23 MWAC/31.2MWp PV plant coupled with 5.4 MW/3.17 MWh of Battery Energy Storage System (“BESS”) aimed to perform ramp smoothing and primary frequency control.

The remaining portion of revenues coming from Construction contracts are related to significant progress in the application consisting of microgrids such as the Comoros, Italy, Somaliland and New Caledonia.

Other Income increased overall by 401 k€ from 120 k€ for the FY 2018 to 521 k€ in the FY 2019 as a result of a collaboration with ENGIE entities as described below:

Employee Secondment and Consultant agreements with ENGIE entities

Service agreement - Hydrogen Consultants: ENGIE EPS provides services related to developing renewable hydrogen production assets to ENGIE

Consultancies for ENGIE on R&D activities: the aim of the project is to test and validate the monitoring system developed by Laborelec on one of the icon plants built by ENGIE EPS last year in Spain for ENDESA

Allocation of revenues as per single legal entity is:

REVENUES AND OTHER INCOME(amounts in Euro)

31/12/2019 31/12/2018

Construction contracts 18,484,496 13,600,234

Rendering of services 1,199,545 489,777

Sales of goods 0 1,450,950

REVENUES 19,684,041 15,540,960

Other Income 520,770 119,721

TOTAL REVENUES AND OTHER INCOME 20,204,811 15,660,681

REVENUES AND OTHER INCOME(amounts in Euro)

31/12/2019 31/12/2018

EPS ELVI 19,306,661 13,906,695

ENGIE EPS 412,125 1,016,931

EPS Manufacturing 486,025 737,055

MCM 0 0

EPS USA 0 0


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Revenues and Other income given by geographical areas, categorized as per country of origin of the clients and the geographical area of the installation, are as follows:

The amount of revenues realized by the Group in foreign currency is approx. 12,669 k€ and is related to Sol De Insurgentes project currently being developed in Mexico.

The following table shows the breakdown of Revenues by Product Line and Other Income:

4.2 Cost of Goods Sold

The breakdown of Cost of Goods Sold (COGS) as of 31 December 2019 is as follow:

COGS relates to purchases of raw materials, consumables and finished products for 14,857 k€ (10,983 k€ in 2018) and increased due to the growth of ENGIE EPS in terms of size of the projects.

COGS increased more than proportionally than revenues due to the transition of ENGIE EPS to a new Business Model. As a result, the Gross Margin reached 26,5% as of 31 December 2019 while it was 29,9% as of 31 December 2018.

REVENUES AND OTHER INCOME BY CLIENT GEOGRAPHICAL AREAS(amounts in Euro)

31/12/2019 31/12/2018

LATIN AMERICA 12,669,649 0

EUROPE 3,571,036 12,882,540

AFRICA 3,052,673 2,681,774

ASIA PACIFIC 911,452 0

USA 0 96,368


REVENUES AND OTHER INCOME BY INSTALLATIONS GEOGRAPHICAL AREAS(amounts in Euro)

31/12/2019 31/12/2018

LATIN AMERICA 12,676,844 34,258

EUROPE 3,547,571 10,338,017

AFRICA 3,052,673 2,707,250

ASIA PACIFIC 927,722 2,537,228

USA 0 43,929


REVENUES BY PRODUCT LINE(amounts in Euro)

Total

Giga Storage 12,770,249

Industrial Solutions 5,489,848

eMobility and Others 479,892

Non-core activities 944,052

TOTAL REVENUES BY PRODUCT LINE 19,684,041

Other Income 520,770

TOTAL REVENUES AND OTHER INCOME 20,204,811

COST OF GOODS SOLD(amounts in Euro)

31/12/2019 31/12/2018

Costs of goods/ Rendering of services (14,857,163) (9,824,158)

Cost of technology partnership agreements 0 (1,159,241)

TOTAL COST OF GOODS SOLD (14,857,163) (10,983,400)

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4.3 Personnel costs

In order to be clear and comprehensive, 144 k€ of Salaries and wages in FY 2018 has been reclassified in Social contributions.

The following table details staff costs and their evolution over the relevant financial periods:

Total Personnel Costs increased by 2,315 k€, from 4,352 k€ in FY2018 to 6,667 k€ in FY2019.

The overall increase is explained in the following break-down:

The increase in the number of highly specialized employees. Where, the total employees as at 31 December 2019 were 110 compared to 100 as at 31 December 2018)

The increase in Social contributions, as a result of changing some Executive Committee Members contracts from Directorship Agreement to Employment Agreement which entails a higher contribution and of increasing in the number of employees

Overtime paid and travel hours paid for the activities related to tenders and bid for projects presented during the year. With the New Business Model, ENGIE EPS will continue to devote its efforts to market intelligence follow up and early origination efforts as well. For a vast majority of utility scale projects, the business development, structuring and preparation of bids will be done by ENGIE BUs

The increase in “Employee benefits” and “Other costs” (mainly related to personnel travel costs) by 184 k€ and 211 k€ respectively, compared to the 2018 FY figures. The increase in personnel travel costs correspond to the growth of activities and projects developed by ENGIE EPS in 2019

4.4 Other operating expenses

The Other operating expenses amount to 2,317 k€ as of 31 December 2019.

The chart below shows “Other operating expenses” as of 31 December 2019 compared with previous period.

PERSONNEL COSTS (amounts in Euro)

31/12/2019 31/12/2018

Salaries and wages (3,918,439) (2,365,853)

Social contributions (979,946) (612,009)

Employee benefits service costs (626,973) (443,411)

Other Costs (1,141,768) (931,093)

TOTAL PERSONNEL COSTS (6,667,126) (4,352,366)

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The increase in “Other Operating Expenses” is mainly due to the development of the ENGIE EPS structure necessary to support the growth of the business as well as the need to enhance the process of integration in ENGIE. Main increases are related to Legal and other cosultancy costs, Communication and Travel expenses due to both to business opportunity and institutional events as well as safety costs. The significative reduction in Rents is related to the application of the new IFRS 16 principle.

4.5 Other costs for R&D and industrial operations

The ENGIE EPS Group uses a reclassification of operating costs that can’t be considered as structure costs, as they are related to installation activities and research and development of new products that will be sold in future years.

The chart below shows “Other costs for R&D and industrial operations” as of 31 December 2019 compared with the previous period.

These costs have been identified on a separate line of the P&L in order to facilitate the understanding of ENGIE EPS’ efforts to invest in cutting-edge technology and undertake innovative projects in order to meet the requirements of its key clients.

Industrial operations costs as at 31 December 2019 amount to 2,094 k€ while were 3,280 k€ as at 31 December 2018.

The decrease in Industrial operations is once again due to the New Business Model in which the EPC (Engineering, Procurement and Construction) activities have been deeply reviewed and refocused.

Indeed, EPC activities will be done in collaboration with ENGIE and won’t continue to be a core-activity of ENGIE EPS.

The impact of Not capitalized R&D costs is 19 k€ during FY 2019, while was equal to 208 k€ as at 31 December 2018. This item is related to cost of goods and services that given their nature, have not been classified to be capitalized in accordance with IFRS. They refer to costs whose economic and financial effectiveness had been limited, prudentially booked at cost during the relevant periods, as from an economic and finance perspective they will not have any impact in subsequent years.

OTHER OPERATING EXPENSES 31/12/2019 31/12/2018

(amounts in Euro)

Communication & Travel (508,799) (221,000)

Legal and other consultancy costs (500,723) (203,816)

Maintenance (297,767) (182,780)

Miscellaneous (223,300) (80,138)

Tax and administrative services (171,635) (129,861)

Rents (155,950) (414,529)

Audit services (134,107) (97,548)

Safety (114,144) (18,204)

Board compensation (83,425) (113,772)

Software licenses (55,509) (53,444)

Bank commissions (31,933) (26,984)

Indirect taxes (24,637) (4,591)

Insurance (14,612) (101,136)

TOTAL OTHER OPERATING EXPENSES (2,316,539) (1,647,803)

OTHER COSTS FOR R&D AND INDUSTRIAL OPERATIONS(amounts in Euro)

31/12/2019 31/12/2018

Industrial operations costs (2,075,598) (3,071,228)

Not capitalized R&D costs (18,705) (208,482)

TOTAL OTHER COSTS FOR R&D AND INDUSTRIAL OPERATIONS (2,094,303) (3,279,710)

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4.6 EBITDA (excluding Stock Option and Incentive Plans) (non-IFRS)

FY 2019 Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is a non-IFRS defined metric which excludes non-recurring income-expenses and the accounting impact of stock options and incentive plans. The EBITDA (excluding Stock Option and Incentive Plans) amounts to -5,730 k€ for the FY 2019 compared with -4,603 k€ of the FY 2018.

This result, mainly driven by the major commitment in R&D, perfectly in line with the planned growth of the internal organizational structure and the execution of ENGIE EPS’ Long -Term Strategic Plan, is justified by the increase in Personnel costs and Other Operating Expenses. This effect is partially offset by the impact of IFRS 16 application under which the expense related to long term rents is eliminated and replaced by the depreciation of the right-of-use asset and financial interests.

EBITDA as at 31 December 2019 decreased by 25%. The Group also refers to the “EBITDA excluding shut-down” which excluded also the Inventory write-off linked to the shutdown and classified as extraordinary costs in FY 2019 and that won’t be repeated in the following years as reported in the new ENGIE EPS Business Model.

The total impact of Inventory write-off in FY 2019 amounts to 394 k€ and “EBITDA excluding shut-down” amounts to -5,336 k€, decreased by 16% compared to FY 2018.

4.7 Amortization and depreciation

In the FY 2019 the item amounts to 2,985 k€.

Compared to FY 2018, this item increased by 1,330 k€, from 1,655 k€ to 2,985 k€.

The useful life of Intangible assets was recalculated so as to reflect the termination date of the related business project in Backlog which resulted in a need to accelerate the amortization process. Total impact of acceleration in amortization amounts to 646 k€.

As these projects don’t play a part in the core-activities of the business, their absence will not affect the forecasted revenues over the next years.

4.8 Impairment and write up / down

During 2019 ENGIE EPS’ top management precisely defined the product lines on which the Company will develop the business in the coming years. For this reason, the management has deemed it appropriate to carry out action related to the 2015-2017 R&D Plan investments considering only the R&D projects that could affect the projects included in the forward-looking business strategy.

EBITDA excluding shut-down(amounts in Euro)

31/12/2019 31/12/2018

EBITDA (5,730,321) (4,602,596)

Inventory Write-off 394,032 0

Total EBITDA excluding shut‐down (5,336,288) (4,602,596)

AMORTIZATION AND DEPRECIATION (amounts in Euro)

31/12/2019 31/12/2018

Amortization (2,343,892) (1,415,677)

Depreciation (641,412) (239,730)

TOTAL AMORTIZATION AND DEPRECIATION (2,985,304) (1,655,407)

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For this reason, the new Business Model has brought about a strong increase of impairment mainly related to Hydrogen activities not included in the new restructuring.

In the FY 2019 the item amounts to 3,592 k€.

The chart below shows Impairment and write down as of 31 December 2019 compared with previous period.

No impairment loss was identified by the Group as of 31 December 2019 on the goodwill (amounting to 1.569 k€) emerging from the acquisitions of EPS Elvi and MCM in 2016.

4.9 Non-recurring income and expenses

This item includes expenses considered as non-recurring, such as those which are mainly related to specific phases of company growth and the setting up of accounting, administration and business development departments. These operating expenses cannot be qualified as exceptional or extraordinary, but still they are linked to unusual and infrequent elements, for significant amounts, therefore they are presented by ENGIE EPS on a separate line, in order to facilitate the understanding of the current operating activity.

Compared to FY 2018, this item decreased by 1,054 k€, from 2,627 k€ to 1,573 k€ in FY 2019.

As mentioned above, these costs are not representative of the Group’s ordinary activity although they may have occurred in the past year and they are likely to occur again in future years.

“Non-recurring expenses” decrease is connected to unusual and infrequent nature of the items here classified.

4.10 Incentive Plans

The line refers to the accrual of Incentive Plans for employees and management. In 2017 the amount was related to stock option and warrants plans described in paragraph 4.10 of 2017 Consolidated Financial Statements and was made against equity, in accordance with IFRS 2. In accordance with the new Profit Sharing Plan adopted on 6 March 2018, stock options and warrants plans have been replaced with Stock Appreciation Rights (“SARs”), and, where applicable, Additional Stock Appreciation Rights (“additional SARs”). Following this new plan:

IMPAIRMENT AND WRITE DOWN (amounts in Euro)

31/12/2019 31/12/2018

Impairment of Hydrogen assets (1,386,700) 0

Business shut-down (1,084,380) 0

Bad debt provision (739,969) 0

Provison for risks on R&D projects completion (334,000) 0

Future completion cost on project (47,000) (289,038)

Write down on assets 0 0

Inventories write up / down 0 0

Impairment on inventory and non current assets 0 0

TOTAL IMPAIRMENT AND WRITE DOWN (3,592,049) (289,038)

NON RECURRING INCOME AND EXPENSES(amounts in Euro)

31/12/2019 31/12/2018

Non recurring Legal Accounting & Certification (603,956) (247,025)

M&A costs (312,216) (1,385,218)

Origination and Development Costs (297,576) 0

Non recurring integration expenses (220,202) (212,594)

Non recurring Distribution & Business dev. Expenses (75,284) (429,181)

Non recurring expenses for R&D activities (35,000) (4,700)

Other (29,238) (43,938)

Non recurring Travel, Communication and Roadshow expenses 0 (256,709)

Non recurring settlement / redundancy 0 (48,069)

TOTAL NON RECURRING INCOME AND EXPENSES (1,573,472) (2,627,433)

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Vested stock options and warrants have been exercised during the simplified tender by ENGIE (through its subsidiary GDF International) except for 200,000 vested stock options granted to the CEO which were replaced by SARs. The vested stock options and warrants not exercised have been waived by their beneficiaries;

the unvested stock options and warrants were replaced by Transformed SARs on a one-to-one basis – different SARs matching the strike prices of the different existing stock options or warrants are not subject to any performance conditions and are only linked to the condition of presence within the Group;

in addition, “Additional SARs” with special characteristics, including performance conditions, linked to the achievement of revenue and EBITDA levels consistent with the 2020 Strategic Plan and the Company's retention rates for 2018 to 2020 (the “Additional SARs”), were distributed to the CEO and other managers.

The SARs and the Additional SARs provide a new vesting period and benefit from a floor price of €9.50. The allocation of stock appreciation rights (SARs) decided by the Board of Directors on 6 March 2018 to the benefit of the Chief Executive Officer, the Chairman of the Board of Directors and the other members of the Board of Directors, in replacement of the existing unvested stock-options or warrants is detailed in par. 15.5 of the 2017 Registration Document.

In view of the granted SARs’ features and a settlement of the benefits that will be made in cash instead of equity instruments, this plan is qualified as “cash-settled” according to IFRS 2.

IFRS 2 standards does not explicitly addresses the case of transformation of equity-settled plans into cash-settled plans, as in the situation of EPS; however, the IASB Board considered that this transaction could be treated by analogy with example IG9. By analogy EPS considered that:

- the constitution of (all or part) the original debt of cash settle plan should be done directly from equity;

- the recognition of a “floor” cost, if the conditions of the new plan are unfavorable and would lead to the accounting of a lower cost than the cost that would be accounted according to the old plan;

- the obligation to record a "cash-settled" debt at fair value on the modification date, all subsequent changes (positive or negative) impacting the income statement.

Once the equity-settled plan has been transformed into cash-settled, the new plan will be treated according to the principles applicable to cash-settled plans. The only exception to this principle, as in the example IG9, is the case where the new plan is unfavorable (by comparing the value of the shares and the vesting conditions at the date of modification to the same information at the grant date of the original equity-settled plan). In this case, there will be an additional charge (with a corresponding entry in equity) to maintain at least the cost of the rendered services to the level of the “old” cost. For EPS, on the contrary, the share prices are higher than they were at the grant date of the original equity-settled plan.

In accordance with the requirements for cash-settled share-based payment transactions (IFRS 2, par. 30-33), EPS accounted the liability to be settled in cash on the date of the plan’s modification, based on the fair value of the shares and on the services acquired at that time. Furthermore, until the liability is settled, EPS will remeasure the fair value of the liability at each reporting date and at the date of settlement, with any changes in fair value recognized in profit or loss for the period.

As of 31 December 2019, the fair value of the debt amounts to 3,647 k€ while it was 3,370 k€, as at 31 December 2018. The movements booked are the following:

182 k€ taken from equity: this amount corresponds to the IFRS 2 cost recorded face to the old “equity-settled” plan, which has been reclassified as “cash-settled” following to the decision taken on 6 March 2018. Costs previously recognized in P&L are not affected: the modification in the nature of the plan

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leads to the reclassification from equity to liability of the amounts already recognized (according to IFRS 2 IG9);

1,206 k€ recorded in P&L, mainly corresponding to SARs exercised during the period as well as the adjustment of the fair value of not exercised SARs;

1,117 k€ paid during the period, corresponding to SARs exercised and paid during the FY 2019.

In the next periods, this debt will be revaluated to consider:

the additional years of supplied services;

the evolution of the fair value of the SARs.

A summary of SARs details over the period is illustrated by the chart below:

Summary of dilutive instruments and dilution risk

As at 31 December 2019, no dilutive risk related to Stock Options and Warrant plans arise. The Company's corporate officers, members of management and employees do not hold any shareholding in the Company's share capital and there are no outstanding securities entitling the holders of which to access the capital of the Company.

The allocations of the SARs to the CEO, the Chairman of the Board of Directors and other members of the Group’s management decided by the Board of Directors on 6 March 2018 to replace unvested stock is described in chapter 15.2 of the Registration Document.

4.11 EBIT

In FY 2019 Earnings Before Interest and Taxes (“EBIT”) is -15,088 k€ compared with -11,898 k€ of FY 2018.

This result is mainly due to a negative impact of:

Impairment on Intangibles assets of 1,387 k€

Non-core activities shut-down of 1,084 k€

Non-recurring expenses of 1,564 k€

Fair value of Incentive Plans of 1,206 k€

Inventory write-off of 394 k€

SARs VALUE(amounts in Euro)

Additional SAR

Transformed SAR

TOTAL CFS

Closing 31.12.2018 1.292.237 2.083.523 3.375.760Increase (P&L) 352.969 853.520 1.206.489Increase (Equity) 0 181.831 181.831Exercised and paid 0 (1.117.565) (1.117.565)Closing 31.12.2019 1.645.207 2.001.309 3.646.516

SARs NUMBERAdditional / New SARs

Transformed SAR

TOTAL

Closing 31.12.2018 751.576 509.319 1.260.895Increase 0Exercised and paid (140.397) (140.397)Closing 31.12.2019 751.576 368.922 1.120.498

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Provision for risks on R&D projects completion of 334 k€

Accelerated amortization of non-core activities of 311 k€

EBIT as at 31 December 2019 decreased by 27%; however, the Group also refers to the EBIT excluding shut-down that doesn’t include the total negative impact of shut-down in FY 2019, as they have been classed as extraordinary costs and won’t be repeated in the following years as reported in the new ENGIE EPS Business Model.

The total impact of shut-down in FY 2019 amounts to 3,511 k€ and EBIT excluding shut-down amounts to -11,577 k€, increased by 3% compared to FY 2018.

4.12 Net Financial Income and expenses

The item includes interests and charges on bank accounts and other financing, exchange rate differences on extra EU trades.

Financial interests linked to the other credit lines in place amount to 312 k€, a decrease with respect to the FY 2018 notwithstanding the impact of IFRS 16 application.

As a reminder, in 2018 the cost of interests were affected by EIB loan financial expenses (328 k€). The loan has been completely repaid during 2018.

4.13 Income taxes

The item includes income and deferred taxes for an amount of 756 k€ (79 k€ for the FY 2018). The increase is mainly due to tax assets registered in 2019 in light of the Decree 27.05.15 issued by the Ministry of Economics and Finance (Industria 4.0 National Plan) for 746 k€.

EBIT excluding shut-down(amounts in Euro)

31/12/2019 31/12/2018

EBIT (15,087,635) (11,898,290)

Impairment on Intangible Assets 1,386,700 0

Business Shut-down 1,084,380 0


Provison for risks on R&D projects completion 334,000 0

Accelerated Amortization 311,397 0

Total EBIT excluding shut‐down (11,577,126) (11,898,290)

NET FINANCIAL INCOME AND EXPENSES(amounts in Euro)

31/12/2019 31/12/2018

Financial interest (236,481) (345,127)

Financial interest related to IFRS 16 (45,512) 0

Net exchange differences (40,126) (18,537)

Financial income 9,900 357,655

Financial expenses EIB loan 0 (686,005)

Impairment on investment in other companies 0 0

Financial expenses EIB warrants 0 0

TOTAL NET FINANCIAL INCOME AND EXPENSES (312,219) (692,014)

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Any Deferred Tax Asset (“DTA”) has been accounted for FY 2019.

However, the Management considers that the future results will produce sufficient taxable profits, allowing to recover in the future all or part of the deferred tax asset. DTA will be recorded in future years, when the Group demonstrates this capability to produce taxable income by showing taxable basis in its tax returns.

4.14 Net income or loss

In the FY 2019, the net loss amounts to 14,644 k€ (8,735 k€ in FY 2018).

Net loss as at 31 December 2019 decreased by 68%; however, the Group also refers to the Net Loss excluding shut-down that doesn’t include the total negative impact of shut-down as described in section 4.11, as they have been classed as extraordinary costs and won’t be repeated in the following years as reported in the new ENGIE EPS Business Model.

Looking back at the Adjusted Net Loss as at 31 December 2018 shows that it doesn’t include the positive effect of revaluation of EIB warrants liabilities (IFRS 2) for 3,777 k€ and as result amounts to 12,512 k€.

The Net Loss excluding shut-down in FY 2019 amounts to -11,134 and increased by 11% compared to -12,512 in FY 2018.

As of 31 December 2019, basic earnings per share is a loss equal to -1.15 €.

4.15 Property, plant and equipment

Property, plant and equipment in FY 2019 is equal to 3,098 k€, with an increase of 1,803 k€ from 1,295 k€ as of 31 December 2018. The increase in mainly due to the new IFRS 16 standard (please also refer to paragraph

TAXES(amounts in Euro)

31/12/2019 31/12/2018

Current taxes

IRES (1,586) (135)

IRAP (19,892)

Other income taxes 753,183 7,768

Deferred taxes

IRES 3,973 90,791

IRAP 0 0

TOTAL INCOME TAXES 755,569 78,532

NET LOSS excluding shut-down(amounts in Euro)

31/12/2019 31/12/2018

NET INCOME (LOSS) (14,644,285) (8,734,638)

Impairment on Intangible Assets 1,386,700 0

Business Shut-down 1,084,380 0


Provison for risks on R&D projects completion 334,000 0

Accelerated Amortization 311,397 0

Revaluation of European Investment Bank warrants liabilities (IFRS 2) and other impacts of EIB loan prepayment 0 (3,777,134)

Total NET LOSS excluding shut‐down (11,133,775) (12,511,771)

NET RESULT PER SHARE - PROFIT / (LOSS)(amounts in Euro)

31/12/2019 31/12/2018

Net loss (Group share) attributable to ordinary shareholders of the parent company (14,644,285) (8,734,638)

Weighted average number of ordinary shares outstanding 12,766,860 10,525,521

BASIC NET RESULT PER SHARE - PROFIT / (LOSS) (1.15) (0.83)

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3.1.1) which impacts “Property, plant and equipment” for a net amount of 1,874 k€. The amount represents the recognition of the right of use related to buildings located in Milan, Cosio Valtellino, Rivoli and Pont Saint Martin. This effect is partially offset by amortization cost accounted during the period.

All tangible assets are related to EPS Elvi.

The evolution of Property, plant and equipment between FY 2018 and FY 2019 by asset category is described in the next table:

4.16 Intangible Assets

Intangible assets as at 31 December 2019 amount to 6,979 k€, compared with 7,984 k€ as at 31 December 2018.

The following table illustrates the distribution of Intangible Assets among the legal entities of the Group:

The evolution of Intangible Assets between FY 2018 and FY 2019 by asset category is described in the table below:

PROPERTY, PLANT AND EQUIPMENT(amounts in Euro)

BuildingsPlant, machinery and technical equipement

Office and IT equipment Assets leased (IFRS16) Total

Book Value

At 31 December 2018 1,051,907 835,408 454,043 0 2,341,358

Adj. Opening 179,202 0 0 0 179,202

IFRS 16 effect 0 0 0 2,175,922 2,175,922

Additions 160,692 55,653 60,183 0 276,528

Disposal 0 0 (1,772) 0 (1,772)

At 31 December 2019 1,391,802 891,061 512,453 2,175,922 4,971,238

Depreciation and Impairment

At 31 December 2018 (215,373) (584,178) (247,154) 0 (1,046,705)

Adj. Opening (185,532) 0 0 0 (185,532)

IFRS 16 effect 0 0 0 (302,240) (302,240)

Depreciation and Impairment (219,183) (57,567) (62,422) 0 (339,172)

Disposal 0 0 0 0 0

At 31 December 2019 (620,088) (641,745) (309,576) (302,240) (1,873,649)

Net Book Value

At 31 December 2018 836,534 251,230 206,888 0 1,294,653

At 31 December 2019 771,714 249,316 202,877 1,873,682 3,097,589

INTANGIBLE ASSETS(amounts in Euro)

31/12/2019 31/12/2018

EPS Elvi 5,072,588 5,806,089

Purchase Price Allocation (PPA) 1,572,926 1,572,926

ENGIE EPS 193,654 450,007

EPS Manufacturing 140,048 155,448

MCM 0 0

Eps Inc. 0 0

TOTAL INTANGIBLE ASSETS 6,979,216 7,984,469

46

The increase of 3,288 k€ is mainly due to:

718 k€ investment for the improvement of EMS (Energy Management System) and PMS (Power Management System): this project stems from the need to improve the present Energy and Power Management Systems for the operation of both isolated and grid connected storages, possibly in combination with other types of electrical assets. Moreover, newer and more stringent grid codes, efficiency and robustness requirements demand, to overhaul the present plant controller architecture;

516 k€ investment for the energy storage products development: the project includes standardization, optimization and development of energy storage solutions that will guarantee ENGIE EPS to be more competitive in terms of performance and cost;

This project provided ENGIE EPS with a set of products optimized for the rapidly evolving energy storage market, thanks to an accurate work of rationalization, standardization and optimization of existing containerized solutions. The result of this investment saw ENGIE EPS solutions become morecompetitive, thanks to a sensible cost reduction and a boost in power and energy density. The maximum power in a 40ft container (PowerHouse) was increased from 3,6 MW to 14,4 MW, while the maximum energy in a 40ft container increased from about 2 MWh to more than 5 MWh;

421 k€ in E-mobility with BMS (Battery Management System) development: the project will exploit the value of EV batteries in providing energy and power services to the grid (V2G applications). To this end, a reliable ageing model and a real time battery model will be developed and integrated into a modular advanced battery system. Thanks to ENGIE EPS’ know-how, different innovative solutions were developed which helped it to break into the emerging e-mobility sector. In the endan innovative centralized solution for EV parking recharging infrastructure (EVHouse) was designed, which will be soon deployed into an FCA plant . Leveraging on EVHouse technology, ENGIE EPS will be able to bid in the Fast Reserve Unit (FRU) project, a frequency regulation project by TERNA S. p. A., using its unique vehicle-to-the-grid technology;

406 k€ investment in the H2 open innovation platform scale up project: the project aims to develop a solution that can cover not only the needs of the P2P market but also those of the H2 industrial production and the H2 refuelling station for green mobility application;

311 k€ for Power and Control Electronics Development: the project cover mainly the bottom level of ENGIE Eps vertical integration, providing the fundamental bricks for the whole system. The development of innovative technologies for power and control electronics is aimed at enabling the design of new products in the fast-growing sectors such as PCS, e-Mobility, predictive diagnostics, as well as energy storage systems, both stationary and distributed on EV;

310 k€ investment in computer science and artificial intelligence algorithms development: the most important goal is to further improve the techniques used for the development of the ENGIE EPS’ EMS, within the framework of PROPHET project. The new EMS is based on mathematical optimization, predictors (as load and photovoltaic forecasters), adaptive functionalities and real time

INTANGIBLE ASSETS Patent and Licenses with

definite useful lifeSoftware Development costs

Other intangible assets (to be amortised)

Goodwill Total

Book Value

At 31 December 2018 2.354.066 399.658 9.834.611 562.403 1.568.783 14.719.522

Additions 40.551 95.602 3.081.375 70.959 0 3.288.488

Reclass to Current Assets 0 0 (236.182) 0 0 (236.182)

Adjustments and Disposals 0 0 (1.961.368) 0 0 (1.961.368)

At 31 December 2019 2.394.618 495.260 10.718.437 633.362 1.568.783 15.810.460

Depreciation and Impairment

At 31 December 2018 (2.198.619) (253.516) (4.254.918) (28.000) 0 (6.735.053)

Amortisation (36.148) (88.455) (2.094.744) (124.546) 0 (2.343.892)

Impairment (6.218) 0 (1.714.482) 0 0 (1.720.700)

Adjustments and Disposals 0 0 1.968.402 0 0 1.968.402

At 31 December 2019 (2.240.984) (341.971) (6.095.742) (152.546) 0 (8.831.243)

Net Book Value

At 31 December 2018 155.448 146.143 5.579.693 534.403 1.568.783 7.984.469

At 31 December 2019 153.633 153.290 4.622.695 480.815 1.568.783 6.979.216

47

updating of the constraints. Another vital direction is to provide a software dashboard which will help supervise and monitor the plant and the assets in the portfolio;

167 k€ for the enterprise resource planning development to support efficient, reliable and lean actions and to enable the agile project management methodology implemented by the ENGIE EPS;

110 k€ for the development of power electronics, e-Mobility and standardized product solutions. In short, this development corresponds to the new 100kW - 1500 VDC inverter;

57 k€ investment in the Prophet project. The main goal of this project is to develop and improve the control predictive algorithm for a multi-Distributed Energy Resources (“DER”) microgrid. The new optimized control will ensure secure microgrid operation and reduce the energy cost, making the best use of renewable generation and storage capability. Moreover, the project will investigate the impact on the grid given by the introduction of electric vehicles (“EV”), their optimal management in terms of charging, grid services they can offer and how they can create business cases in the microgrid context.

The technical studies and the software developments already had a practical validation, since all the enhanced algorithms have been tested on a multi-good microgrid installed at the Energy Department of the Politecnico di Milano.

The internal development costs are 2,503 k€.

The Impairment of 1.721 k€ is mainly due to the Hydrogen Shut-down and is presented in note 4.8.

The 236 k€ reclassed to Current Assets is the result of the disposal of an asset in H1 2020.

The Disposals in Book Value of both the Intangible assets and Depreciation and Impairment are due to the elimination of assets with 0 net book value.

Goodwill of 1,569 k€ recognized in intangible assets is related to the acquisitions of EPS Elvi Energy and MCM in 2016.

4.17 Investments in entities accounted using the equity method

Investments in entities accounted using the equity method which amounts to 1 k€ consists of Comores Énergies Nouvelles.

4.18 Other non-current financial assets

The amount of 143 k€ mainly consists of:

115 k€ of refundable deposits as a guarantee to the lease contract signed for the plant in Rivoli (Turin, Italy) and Cosio Valtellino (Sondrio, Italy);

28 k€ of deposits for utilities supplies.

4.19 Trade receivables

Total trade receivables increased by 10,912 k€ from 31 December 2018 to 31 December 2019.

TRADE AND OTHER RECEIVABLES(amounts in Euro)

31/12/2019 31/12/2018

Trade and other receivables 19,897,104 8,244,916

Bad debt provision (819,916) (79,947)

TOTAL TRADE AND OTHER RECEIVABLES 19,077,188 8,164,968

48

The increase is mainly due to trade receivables and invoices to be issued for works performed during the last quarter of 2019 that will be paid during the first half of 2020.

Bad debt provision in FY2019 amount to 820 k€, compared to 80 k€ as at 31 December 2018.

The table below provides the analysis of Trade and other receivables aging as at 31 December 2019.

All trade receivables which involve a reasonable risk of non-collection have been provisioned during the period.

4.20 Inventories

As of 31 December 2019, the inventory amounts to 2,986 k€ compared to 3,053 k€ at the end of 2018. During the FY 2019 a provision amounting to 394 k€ was booked, mainly referred to hydrogen specific items whose value has been considered not recoverable while a minor amount is related to slow-moving items.

AGING ANALYSIS OF TRADE RECEIVABLES (amounts in Euro)

TOTAL

NEITHER PAST DUE

NOR IMPAIRED

<30 30-60 DAYS 61-90 DAYS 91-120 DAYS >120 DAYS

2019 19,077,188 16,329,006 1,032,662 21,887 0 (36) 1,693,669

2018 8,164,968 7,003,993 332,122 18,593 22,042 98 788,120

INVENTORIES (amounts in Euro)

31/12/2019 31/12/2018

Raw materials

Gross value 1,837,636 716,471

Obsolescence provision (417,852) (23,820)

Raw materials net book value 1,419,784 692,651

Work in progress

WIP for construction contracts whose respective revenues aren't recognized during the current period 755,539 755,539

Gross value 382,178 1,528,006

Obsolescence provision 0 0

Work in progress net book value 1,137,717 2,283,545

Finished goods

Gross value 428,446 76,657

Obsolescence provision 0 0

Finished goods net book value 428,446 76,657

Total inventories

Gross value 3,403,800 3,076,673

Obsolescence provision (417,852) (23,820)

Total inventories net book value 2,985,948 3,052,853

Obsolescence reserve

Beginning Value (23,820) (11,732)

Charge for the year (394,032) 0

Utilizations of the year 0 0

Cumulated obsolescence reserve (417,852) (11,732)

49

4.21 Other current assets and other current financial assets

The increase in “Other current assets” as at 31 December 2019 compared to 31 December 2018, amounting to 2,699 k€ can be explained by the increase in Prepaid expenses (1,295 k€) related to projects that will produce their economic benefits in the future periods and in advances to suppliers (997 k€).

The increase in Other receivables is due to an asset reclassification from Intangible Assets that will be sold in H1 2020.

VAT receivables reported in FY 2019, amounting to 1,495 k€, have been formally reported to Italian tax authorities within an official sworn declaration from an independent advisor and have been requested as a refund for a total amount of 717 k€. The remaining amount will be used as a tax credit to offset cash-taxes due on a monthly basis during 2020.

Other current financial assets are related to a loan granted by ENGIE EPS to Comores Énergies Nouvelles Sarl for an amount of 436 k€.

4.22 Cash and cash equivalent

Cash at banks and petty cash represent the amount held on bank balances both in Euro and in other currencies and cash deposits at leading credit institutions. The cash liquidity is mainly held in Euro currency.

The amount of cash and cash equivalent as at 31 December 2019 is 6,431 k€, compared to 10,861 k€ at the end of 2018. The decrease is mainly due to operating cash flows (as described in the Cash Flow Statement).

A portion of the liquid assets amounting to 1,328 k€ serve as cash collateral to guarantee financings received by the Group that are included in net debt. The Group considers this cash collateral s liquid to the extent that the release of the guarantee is under its control.

4.23 Net Equity

OTHER CURRENT ASSETS AND OTHER CURRENT FINANCIAL ASSETS(amounts in Euro)

31/12/2019 31/12/2018

Prepaid expenses 1,590,669 295,187

VAT receivables 1,495,389 1,462,940

Advances to suppliers 1,064,082 67,092

Current financial assets 428,201 350,000

Other receivables 383,841 0

Other tax assets 94,509 94,012

Social contributions receivables 23,922 34,378

Deferred tax asset 28,136 28,136

Tax asset "Industria 4.0" 0 221

Advance Payment Elvi Acquisition 0 0

TOTAL OTHER CURRENT ASSETS AND OTHER CURRENT FINANCIAL ASSETS 5,108,749 2,331,965

NET EQUITY (amounts in Euro)

31/12/2019 31/12/2018

Issued capital 2,553,372 2,553,372

Share premium 48,147,696 48,843,749

Other reserves (382,504) (218,938)

Consolidation reserve 0 0

Translation reserve 0 0

Stock Option and Warrants plan reserve 4,969,291 5,151,122

Retained earnings (38,306,765) (30,296,289)

Profit (Loss) for the period before Revaluation of European Investment Bank warrants liabilities (IFRS 2) (14,644,285) (12,511,771)

Total Equity before European Investment Bank variation (IFRS 2) 2,336,804 13,521,244

Revaluation of European Investment Bank warrants liabilities (IFRS 2) - Impact on Net Profit 0 3,777,134

TOTAL EQUITY 2,336,804 17,298,378

50

The total number of shares at the end of period is 12,766,860, as illustrated in the table below. The nominal value of each share is € 0.20 and the number of treasury shares at 31 December 2019 is nil.

4.24 Severance indemnity reserve and Employees’ incentive plan

The Italian Severance indemnity (TFR) as at 31 December 2019 amounts to 1,179 k€, while it was 856 k€ at the end of 2018. The remaining amounts of 3,647 k€ are related to the non-current portion of SAR benefits. For a detailed description of this item please refer to paragraph 4.10.

As detailed in paragraph 4.10, post-employment benefit at the end of 2019 amounts to 4,826 k€.

The Italian Severance indemnity (TFR) in 2019 amounts to 1.179 k€, while it was 856 k€ at the end of 2018.

Key assumptions

The following assumptions have been considered in performing the actuarial calculation:

the probability of death has been estimated according to the table RG48 of the “Ragioneria Generale dello Stato”;

the retirement age has been estimated considering the minimum requirements set by Italian laws;

the percentage of leave for reasons different from death and retirement has been estimated on an average annual basis equal to 2.85%;

the probability of advance payments has been fixed to 3% per year.

NUMBER OF SHARES 31/12/2019 31/12/2018

Beginning of the period 12,766,860 8,439,629

Net Rights Issue 0 3,191,715

EIB Warrants 0 660,513

Exercise of options and warrants reserved to management and emlpoyees 0 475,003

End of period 12,766,860 12,766,860

POST EMPLOYMENT BENEFIT(amounts in Euro)

31/12/2019 31/12/2018

Past Service Liability (at the end of the year) 1,179,104 856,283

Non current liability related to SARs plan 3,646,516 3,369,957

Total Share Premium 4,825,620 4,226,240

POST EMPLOYMENT BENEFIT - TFR(amounts in Euro)

31/12/2019 31/12/2018

Past Service Liability (at the beginning of the year) 856,283 688,822

Current Service Cost 285,148 159,630

Interest Expense 16,588 13,690

Actuarial (Gains)/Losses recognised 107,801 43,733

Payments (86,716) (49,591)

Total 1,179,104 856,283

DETAILS OF ACTUARIAL GAIN AND LOSSES IN OTHER COMPREHENSIVE INCOME(amounts in Euro)

31/12/2019 31/12/2018

Liability (gains) / losses of the period 47,540 43,958

Liability (gains) / losses due to change in financial assumptions 59,945 1,671

Liability (gains) / losses due to experience 316 (1,896)

Total 107,801 43,733

51

Sensitivity analysis

A sensitivity analysis has been performed based on the annual technical discount rate:

Expected cash flows

The following table reports the expected future yearly cash flows to settle the obligation as at December 31, 2019:

The Table below reports the number of total ENGIE EPS Group employees at year-end:

FINANCIAL ASSUMPTIONS 31/12/2019 31/12/2018

Annual technical discount rate 1.56% 1.95%

Annual inflation rate 1.50% 1.50%

Total annual growth in salaries and wager 2.00% 2.00%

Maximum % of TFR anticipation 70.00% 70.00%

TFR - SENSITIVITY ANALYSIS(amounts in Euro)

Annual technical discount rate

Annual technical discount rate

0.50% 0.50%

Past Service Liabilities 1,110,001 815,748

TFR - EXPECTED CASH FLOWS(amounts in Euro)

Distribution

Years

0 - 1 42.161

1 - 2 50.424

2 - 3 58.878

3 - 4 121.371

4 - 5 74.541

5 - 10 609.147

Total 956.521

Headcount by function 31/12/2019 31/12/2018

Management 10 7

Staff: Administrative & Finance, IR, Legal & Communication 24 22

Business Development and International Projects 8 11

Technology and R&D 23 22

Innovation 2 3

Engineering 17 18

Production 19 10

Project Management 4 6

Customer Value Management 3 1

Total 110 100

Distribution of employees by genderPercentage calculated based on active permanent Employees

31/12/2019 31/12/2018

Men 75% 76%

Women 25% 24%

52

4.25 Non-current deferred tax liabilities

Non-current deferred tax liabilities for 16 k€ in FY 2019 (16 k€ for 31 December 2018) includes deferred tax liabilities on assets recorded for EPS Elvi Purchase Price Allocation.

4.26 Trade payables

The item refers to invoices for goods, services and utilities received by suppliers during the year, and it amounts to 15,963 k€ (including 314 k€ related to the short term portion of lease liability booked under IFRS 16), with an increase of 10,449 k€ with respect to 5,514 k€ in 2018.

The table below provides the analysis of Trade payables aging as at 31 December 2019.

4.27 Other Current and Non Current Liabilities

“Other non-current liabilities” amount to 1,632 k€ and was zero in 2018. The amount is mainly related to the long-term portion of the lease liability booked under the new IFRS 16. For a detailed description of the IFRS 16 first time application impact please refer to paragraph 3.1.1.

Other current liabilities at the end of FY 2019 are 4,518 k€ (2,710 k€ for 31 December 2018).

Employees by age group Distribution

Less than age 21 0.00%

21 to 30 years 37.00%

31 to 40 years 30.00%

41 to 50 years 23.00%

51 to 60 years 8.00%

More than age 60 2.00%

TRADE PAYABLES(amounts in Euro)

31/12/2019 31/12/2018

Trade payables 15,258,926 4,248,256

Invoices to be received 704,038 1,265,693

TOTAL TRADE PAYABLES 15,962,964 5,513,949

AGING ANALYSIS OF TRADE PAYABLES (amounts in Euro)

TOTAL

NEITHER PAST DUE

NOR IMPAIRED

<30 30-60 DAYS 61-90 DAYS91-120 DAYS

>120 DAYS

2019 15,962,964 14,923,757 453,143 212,620 26,450 200,979 146,017

2018 5,513,949 3,435,740 1,215,141 583,128 12,102 1,011 266,827

53

Advances on government grants amount to 860 k€ as at 31 December 2019 while were 935 k€ as at 31 December 2018. The amount relates to advance payments received by public institutions linked to specific projects carried out in the context of the ordinary operating activity of the Group. Government grants are registered under revenues, given a reasonable assurance that the Group will comply with the conditions associated with the subsidy.

The increase in Provision for onerous contracts is mainly due to non-core business shut-down (please refer to paragraph 4.8).

Employees’ wages and salaries amount to 1,156 k€ against 681 k€ as at 31 December 2018. That amount includes vacation provisions.

Deferred income amount to 103 k€ against 115 k€ as at 31 December 2018. The amount includes advance payments that will produce economic benefits in future periods.

The item Withholding taxes and social contributions refers to the amounts which will be settled in the first quarter 2020 and to the accruals for deferred social charges to be paid for deferred employee benefits which has increased because of a higher headcount.

4.28 Financial liabilities

Financial liabilities at the end of 2019 are 14,532 k€, with an increase of 10,481 k€ compared with the year-end 2018. The amount is detailed as follows.

Variation on each item between 31 December 2018 and 31 December 2019 are detailed as follows:

ENGIE EPS obtained €7.5m and €15m from Société Générale in June and December 2019 respectively in the form of two credit lines (to be paid back over a 4-year revolving credit facility) in order to fund its working capital

OTHER LIABILITIES(amounts in Euro)

31/12/2019 31/12/2018

Exercised SAR's 0 0

Lease liabilities 1,603,866 0

Provision for onerous contract 1,332,104 209,475

Employee wages and salaries 1,156,213 681,441

Withholding taxes and social contributions 1,080,223 655,557

Advances on government grants 859,712 934,914

Deferred income 103,230 114,687

Board compensations 15,000 113,772

Advances from client 0 0

TOTAL OTHER LIABILITIES 6,150,348 2,709,845

Financial liabilities as of 31/12/2019(amounts in Euro)

Interest rate Current liability Non-current

liability Total

MLT credit line – SOGEN to ENGIE EPS Floating rate (euribor 3m + spread 0.85%) Fixed rate (0.35%) on the unused and uncancelled amount

0 12,441,211 12,441,211

MLT credit line – Mediocredito Italiano to EPS Manufacturing Floating rate (euribor 3m + spread 3.75%) 794,381 582,216 1,376,597

MLT credit line – Banca Sella to EPS Elvi Floating rate (euribor 3m + spread 3.5%) 227,412 231,479 458,891

ST working capital financing - Unicredit to EPS Elvi Fixed (3.50%) 175,000 0 175,000

ST working capital financing - Intesa Sanpaolo to EPS Elvi Fixed (3.75%) 80,480 0 80,480

MLT credit line – Unicredit to EPS Elvi Floating rate (euribor 3m + spread 3.5%) 0 0 0

TOTAL FINANCIAL LIABILITIES 1,277,273 13,254,905 14,532,179

Financial liabilities as of 31/12/2019(amounts in Euro)

Short Term 2018

Long Term 2018

Cash in Cash out Fair Value adjustment

Reclass form Long

term to Short term

Short Term Long Term TOTAL

MLT credit line – SOGEN to ENGIE EPS 0 0 12,500,000 (58,789) 0 12,441,211 12,441,211

MLT credit line – Mediocredito Italiano to EPS Manufacturing 770,917 1,376,597 (777,778) 6,862 794,381 794,381 582,216 1,376,597

MLT credit line – Banca Sella to EPS Elvi 220,279 457,368 (220,279) 1,523 227,412 231,479 458,891

ST working capital financing - Unicredit to EPS Elvi 0 0 1,100,000 (925,000) 175,000 0 175,000

ST working capital financing - Intesa Sanpaolo to EPS Elvi 739,382 0 (658,902) 80,480 0 80,480

MLT credit line – Unicredit to EPS Elvi 486,320 0 (486,320) 0 0 0

TOTAL 2,216,898 1,833,965 13,600,000 (3,068,279) (50,404) 794,381 1,277,273 13,254,905 14,532,179

54

needs, R&D and capex investments. Both credit lines accrue an interest equal to Euribor 3 months plus a margin of 85 basis points, with a commitment fee equal to 35% of the margin that is calculated on the unused and uncancelled amount of the revolving credit facility for the availability period. During 2019 ENGIE EPS drawdown €12.5m of the funds made available by Société Générale.

Covenants

Regarding the credit lines, only information covenants are set out in the respective Facility Agreements. The table below illustrates all Group obligations:

- FINANCIAL COVENANTS AND OBLIGATIONS

- INFORMATION

Mediocredito Negative pledge Pari passu

- Equity shown in the Consolidated Financial Statement equal to or higher than (6) six million (otherwise, the Company has to find a remedy within (30) thirty days since the communication date to the Bank)

insolvency proceeding about any Group’s entity;

dissolutions, mergers, acquisitions or founding one or more assets allocated to a particular business;

resolution or event that could create a shareholder’s right to withdraw;

shareholders’ exercising, if any, of their right to withdraw;

decrease of the share capital; transfer of activity or significant

modification, or transfer of the company or branch property / use;

defining act which by a third party acquires, in any way, the debt deriving from the Mediocredito loan;

changes of the end use of the goods referred to the project;

changes of the shareholders’ framework have to be transmitted within 10 days.

Before 2017 September 30th:

technical report about the completion of the project, using a form attached to the agreement.

Before July 31st of each year:

Legal Representative declaration attached with a copy of (i) Financial Statement with attachments and (ii) Consolidated Financial Statements with attachments, not drafted in short way.

Banca Sella Not Applicable substantial changes of the activity

scopechanges of the shareholders’ framework

Intesa Sanpaolo Not Applicable There isn’t a specific obligation on

working capital credit line facilities.

Société Générale Not Applicable There isn’t a specific obligation on

working capital credit line facilities.

55

4.29 Net financial position

Net Financial Position amounts to -8,101 k€ and reflects the investments made by the Group to set up the current industrial footprint, product industrialization and business results along with the support of the banking system, in particular Société Générale and Intesa Sanpaolo.

The cash position at 31 December 2019, represented by liquid assets, amounted to € 6.4 million compared to € 10.9 million at the end of 2018.

4.30 Related party disclosures

4.30.1 Intra-group Operations

ENGIE EPS, as parent company of the ENGIE EPS Group, may, as appropriate, enter info financial transaction with ENGIE EPS Group Companies.

On 10 December 2015, the Company granted a 1,000k€ interest free line of credit facility to EPS Inc. in order to fund the start-up activities of the ENGIE EPS Group in the United States. Total draw down in 2019 has been 5 K€ in addition to 5 k€ in 2018, 10 k€ in 2017 and 105 K€ in the previous years).

On 4 January 2016 the Company granted a debt revolving loan facility to EPS Manufacturing for a maximum amount of 10,000 K€. The revolving facility bore interest at Euribor 3 months plus 230 bps. As of 31 December 2019 the loan granted during the previous periods was completely reimbursed. EPS Manufacturing refunded 110 k€ in 2018 and 2,200 K€ in 2017.

On 4 January 2016 the Company granted a debt revolving loan facility to EPS Elvi. The revolving facility bore interest at Euribor 3 months plus 215 bps. Total draw down in 2019 has been 3,700 k€.

In 2016, the ENGIE EPS Group companies entered into a cost sharing agreement based on a direct splitting of costs related to support functions. The reallocation of costs resulting from the transfer pricing policy was made in compliance with market conditions and French and Italian regulations. The corporate functions assigned to the benefit of the various ENGIE EPS Group companies (Business Development, Business Intelligence, Administration & Finance, Communication, Legal, Compliance and HR) are assigned to specific cost centres and can be supported by ENGIE EPS or by its subsidiaries. In the latter case, the share of the support functions supported by the subsidiaries is first billed back to EPS without any margin and allocated to the specific cost centers to be included in the total cost of the common functions. The total cost of the shared functions is then distributed among ENGIE EPS Group companies according to consistent and homogeneous criteria, at market conditions. The allocation criteria chosen are objective and measurable. Allocation keys are applied consistently to all entities and allow correlation of allocated costs and revenues. In compliance with the French and Italian tax regulations, as well as the arm's length principle, ENGIE EPS re-invoices the expenses of the common functions to ENGIE EPS Group companies by applying a margin of 5%.

NET FINANCIAL POSITION(amounts in Euro)

31/12/2019 31/12/2018

Cash and cash equivalent 6.431.376 10.860.527

Cash at banks and petty cash 6.431.376 10.860.527

Net financial debts (14.532.179) (4.050.862)

Current financial liabilities (1.277.274) (2.240.696)

Non current financial liabilities (13.254.905) (1.810.167)

NET FINANCIAL POSITION (8.100.803) 6.809.665

56

4.30.2 Significant agreements concluded with related parties

The ENGIE EPS Group associated parties to notably include the shareholders of the Company, its consolidated and unconsolidated subsidiaries, companies under joint control, associated companies and the entities over which the various directors of the ENGIE EPS Group exercise at least a notable influence.

The principal operations with associated parties are:

Agreement with ENGIE SOLAR S.a.S. (a company belonging to the ENGIE Group, the majority shareholder of the Company):

- ENGIE SOLAR S.a.S. has been selected to perform engeneering, procurement, and installation services in relation to the delivery of a battery energy storage system (with stockage capacity of 5.4 MW/3.17 MWh) and of its associated facilities in the Municipality of Comadù (United State of Mexico). On 20 December 2019 ENGIE SOLAR S.a.S. entered into a Power Island Supply Agreement with EPS Elvi in order to subcontract part of the works. The contract price is USD 17,303 k$.

- EPS Elvi concluded an agreement with ENGIE SOLAR S.a.S. for the provision of advisory services in order to deploy the smart integration program of EPS Elvi within the ENGIE Group. The duration of the agreement is 12 (twelve) months, from 1 January 2019 to 31 December 2019. The scope of this service agreement is to support ENGIE SOLAR S.a.S. by using EPS Elvi capabilities represented by Mrs. Michela Costa, who for the duration of the present agreement shall act as i) Legal Director for ENGIE SOLAR S.a.S.; ii) Head of PMO (including HSE, quality and contract management); iii) Ethics & Compliance Officer for ENGIE SOLAR S.a.S.; and iv) Risk Officer for ENGIE SOLAR S.a.S.. The Contract Price is equal to 290 k€.

- On 14 December 2018, ENGIE EPS (formerly known as Electro Power Systems S.A.) entered into an agreement with ENGIE SOLAR S.a.S. for the sublease of its registered office at 115, rue Réaumur, 75002 Paris. The sublease agreement has a duration of two years, starting from 1 January 2019 and expiring on 31 December 2021. The annual rent (excluding taxes) is equal to Euro 2.400. The sublease agreement was terminated by ENGIE SOLAR S.a.S., on 1 October 2019.

Agreement with SOLAIREDIRECT GLOBAL OPERATIONS S.A. (a company belonging to the ENGIE Group, the majority shareholder of the Company) In relation to the Sol De Insurgentes Projects described above, on 27 November 2019, EPS Elvi entered into a procurement contract with Solairedirect Global Operations S.A. for the purchase of some critical equipment and materials instrumental to the delivery of a battery energy storage system (with stockage capacity of 5.4 MW/3.17 MWh) and its associated facilities to be installed in the Municipality of Comadù (United State of Mexico). The contract price is equal to USD 13,547 k$.

Agreement with ENGIE PRODUZIONE (a company belonging to the ENGIE Group, the majority shareholder of the Company): on 31 December 2019, EPS Elvi, acting as contractor for the engineering, supply and installation of an energy storage system with stockage capacity of 7.2 MW/5.08 MWh and related services entered into an agreement with ENGIE PRODUZIONE S.p.A. The contract price is 2,643 k€.

Agreement with ENGIE Lab Singapore (a company belonging to the ENGIE group, the majority shareholder of the Company): on 21 September 2017, EPS Elvi entered into an agreement with ENGIE Lab Singapore for the supply of a P2P hydrogen system (its articles, materials, equipment, design and drawings, data and other materials) on the island of Semakau (Singapore). The value of the agreement is 663 k€.

Agreement with Comores Energies Nouvelles S.A.R.L. (a company where 49% of its shares are owned by ENGIE EPS): on 16 November 2018, EPS Elvi entered as contractor into an EPC Agreement with Comores Energies Nouvelles S.A.R.L., for the development of a solar power plant and its battery energy storage system located on the island of Anjouan, in the municipality of Lingoni. EPS Elvi scope of work consisted, among others, in the performance of engineering and design services as well as the procurement of material and equipment.

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Agreement with ENGIE EEC (a company belonging to the ENGIE group, the majority shareholder of the Company): Engie EEC, as electricity grid operator on Lifou island (New Caledonia), entered into agreements with local government to install and operate an Energy Storage System (ESS) in the framework of the Renewable Energy strategy “Lifou 100% in 2020”. On 5 December 2018, EPS Elvi entered into an agreement as a contractor for the engineering, procurement and construction of 4.8 MW / 5.06 MWh battery energy storage system. The contract price is 2,478 k€.

Agreement with ENGIE ENERGIE SERVICES (a company belonging to the ENGIE group, the majority shareholder of the Company): ENGIE EPS (formerly known as Electro Power Systems S.A.) concluded on 1 January 2019 an engineering contract for ENGIE ENERGIE SERVICES. The contract price is approximately 200 k€.

Agreement with ENGIE S.A. (a company belonging to the ENGIE group, the majority shareholder of the Company):

- ENGIE EPS concluded an agreement with ENGIE S.A. for the provision of advisory services in order to deploy the smart integration program of ENGIE EPS in the ENGIE group. The scope of this service agreement is to hire Mr. Giorgio Crugnola as senior consultant within ENGIE EPS. The duration of the agreement is of 7 (seven) months, starting from 1 June 2019 until 31 December 2019 with the possibility to extent such agreement to 18 (eighteen) months maximum. The annual cost of the agreement corresponds to a monthly fee of Euro 11k€ calculated on an average of 15 working days per month as senior consultant;

- ENGIE EPS concluded an agreement with ENGIE S.A. for the provision of advisory services in order to deploy the smart integration program of ENGIE EPS in the ENGIE group. The scope of this service agreement is to hire Mr. Juan Ceballos as junior consultant within ENGIE EPS. The duration of the agreement is of 7 (seven) months, starting from 1 June 2019 untill 31 December 2019 with the possibility to extent such agreement to 18 (eight-teen) months maximum. The annual cost of the agreement corresponds to a monthly fee of Euro 7 k€ calculated on an average of 15 working days per month as junior consultant.

4.31 Board compensation

The board compensation is determined by the Annual General Shareholdings’ Meeting. It is paid on a current basis and no indemnity leave or share based compensations where agreed on the past.

As in previous years the Chief Executive Officer and the Executive Directors compensation is not included in Other Operating Expenses, but it has been reclassified in the item Personnel costs, because both Directors played a full operative role in the business and corporate strategy of the ENGIE EPS Group.

However, for sake of clarity, the board compensation outlined in this section includes the cost for the Board and the salary of the Chief Executive Officer and the Executive Directors.

The table below presents a summary of the remuneration paid by ENGIE EPS to the Board of Directors in charge on 2019 and the compensation paid by ENGIE EPS to the Executive Directors.

BoD AND EXECUTIVE DIRECTORS REMUNERATION AND BENEFITS(amounts in Euro)

31/12/2019

Fixed compensation 185,000

Variable compensation 49,875

Compensation as board member 223,425

Benefits in kind 37,859

TOTAL CURRENT FINANCIAL LIABILITIES 496,159

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4.32 Statutory auditors’ compensation

Pursuant to Article 222-8 of the General Regulations of the French Financial Markets Authority (AMF), the following table presents information on the fees paid by ENGIE EPS Group and its subsidiaries to each of the auditors in charge of auditing the annual and consolidated financial statements:

4.33 Loan commitments and guarantees and off-balance sheet commitments

The amount of off-balance sheet commitment concerning the Group is equal to 2,568 k€ and refers to guarantees emitted on behalf of customers.

In addition to that, it is worth noting that in the agreement with Enel / Endesa related to the project “Litoral” commissioned in 2018, there are 3 options related to dismantling and spare parts for which EPS could incur future costs, although it is believed that the benefits deriving from the reuse of such goods (second-life batteries) may be higher than potential costs.

4.34 Financial Risk Management Objectives and Policies

The ENGIE EPS Group’s business depends in particular on the success of a limited number of tenders and RFPs in which ENGIE EPS is competing either directly (i.e. to be selected as Battery-Energy-Storage-System (BESS) supplier by the final customer) or indirectly (as BESS supplier to a developer bidding to secure a project which includes BESS). This risk extends to the currently outstanding tenders and RFPs. Certain of these tenders

BDO Paris Audit & AdvisoryAmount (in €) taxes excluded

%

2019 2018 2019 2018

AuditAudit of the accounts, certification, review of the annual financial statements and annual consolidated financial statements EPS SA 123.500 130.000 55% 58% Integrated subsidiaries 0 0 0% 0%Other services directly related to the audit mission EPS SA 0 0 0% 0% Integrated subsidiaries 0 0 0% 0%Sub-total 123.500 130.000 55% 58%

Other services provided by the networks to the integrated subsidiaries Legal, tax, employment matters 0 0 0% 0% Audit 42.000 32.000 19% 14%

Others (1) 0 64.000 0% 28%Sub-total 42.000 96.000 19% 42%TOTAL 165.500 226.000 73% 100%(1) Audit fees related to the IPO and Right Issue process

RBB Business Advisors %2019 2018 2019 2018

AuditAudit of the accounts, certification, review of the annual financial statements and annual consolidated financial statements EPS SA 52.250 55.000 46% 48% Integrated subsidiaries 0 0 0% 0%Other services directly related to the audit mission EPS SA 0 0 0% 0% Integrated subsidiaries 0 0 0% 0%Sub-total 52.250 55.000 46% 48%

Other services provided by the networks to the integrated subsidiaries Legal, tax, employment matters 0 0 0% 0%

Others (1) 0 59.708 0% 52%Sub-total - 59.708 0% 52%TOTAL 52.250 114.708 46% 100%(1) Audit fees related to the IPO and Right Issue process

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or RFPs can individually represent a multiple of the revenue compared to the historical sales of the ENGIE EPS Group.

A specific feature of these tenders or RFPs is that the underlying processes are normally lengthy and can be protracted or delayed by the necessity for several approval layers and by the ability of bidders to contest or appeal the results (such as for the Guam project in late 2019).

Therefore, sales and the ENGIE EPS Group operating results may vary significantly and unexpectedly from one period to another.

4.34.1 Risks associated with the euro-US dollar exchange rate

The ENGIE EPS Group expects to be increasingly exposed to the euro-US dollar exchange rate risk. The Consolidated Financial Statements of ENGIE EPS are prepared in Euros and, historically, the ENGIE EPS Group has conducted its business in Euros. However, a significant part of the ENGIE EPS Group’s business in 2019 was conducted in US dollar (64% of total revenues). In the future, the ENGIE EPS Group is likely to sign contracts whose main currency is the US dollar and which might represent a significant part of its business. Also, a significant part of the ENGIE EPS Group’s purchases (61% on 2019) are made in US dollar (e.g. batteries). ENGIE EPS Group considers that this risk will increase as it expands internationally.

Therefore, the ENGIE EPS Group is exposed to the euro-US dollar exchange rate, conversion and transaction cost risks. The risk associated with currency fluctuations may materialise during the conversion into Euros of the value of assets and liabilities not denominated in Euros. To the extent that the exchange rates of these currencies are exposed to fluctuations, they are likely to affect the Consolidated Financial Statements of ENGIE EPS Group, which could also have a significant effect on ENGIE EPS Group’s financial position and its results, as represented in the ENGIE EPS Group’s accounts. The risk related to foreign exchange rate variations may occur due to the difference in exchange rates between the closing date of the commercial transaction and the date of settlement.

Currently, ENGIE EPS Group’s exposure to foreign currency risk is not financially hedged and the finance department monitors the foreign currency risk and manages it mainly through commercial and contractual arrangements.

In 2019, the ENGIE EPS Group registered costs for a total amount of 13,054 K$ corresponding to a total amount of 11,763 K€ and revenues for a total amount of 13.796 K$ corresponding to a total amount of 12,669 K€. As specified in the prevous paragraph, those amounts are significant compared to the total costs and revenues of the ENGIE EPS Group in 2019 (61% and 64% respectively).

4.34.2 Liquidity Risk

ENGIE EPS Group’s capacity to obtain additional financings depends on a certain number of factors, in particular its operational performance and financial situation, the market conditions and other factors that are not with the control of the ENGIE EPS Group. Such factors can also make the financing’s terms and conditions uninteresting for ENGIE EPS Group. It might not be able to raise additional funds when needed and, consequently, its capacity to run its business as planned, to develop it and to progress may be affected.

Since it inception in 2005 (and this includes its predecessor company), ENGIE EPS has been a loss-making company. The revenue stream of the past three years did not allow the ENGIE EPS Group to finance its own cash needs and shareholders’ support has been material to finance its activities. Furthermore, the ENGIE EPS Group recorded a negative EBITDA of € 5.7 million and a net loss of € 14.6 million in 2019 and is not expected to be earning-positive in the short term. Further, and as indicated in the table below, as at 31 December 2019, ENGIE EPS had €14.5 million of net financial debt, of which €1.3 million was current and €13.2 million was non-current (94% of the long term debt having 4 year maturity). This debt is also subject to certain covenants (see note 4.28 of the Consolidated Financial Statements of the ENGIE EPS Group).

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This means that ENGIE EPS will be very limited in its capacity to obtain debt financing, including to refinance its existing debt, even with the support of the ENGIE group, which itself will not necessarily be always forthcoming.

4.34.3 Credit and/or counterparty risks

ENGIE EPS is normally exposed to customer credit risk which can be at times concentrated on few customers given the large size of purchase orders or contracts. The maximum exposure to credit risk is represented by the carrying amounts of trade receivable in the Consolidated Financial Statements of the ENGIE EPS Group (approximately € 19.1 million as at 31 December 2019). For certain contracts ENGIE EPS has extended “supplier credit” to the customer, thus increasing the credit or counterparty risks. The total amount of supplier credit as at 31 December 2019 was € 5.4 million including work in progress. The credit risk is monitored and managed by the finance department, including through the inclusion of safeguards in the major contracts (mainly advanced payments).

Out of the total trade receivables as at 31 December 2019, € 12.1 million were due by customers within the ENGIE Group.

The ENGIE EPS Group does not hold counterparty insurance.

4.35 Subsequent events

FCA’s easy electric charging debuts with Easy Wallbox™ by ENGIE Eps: on 26 February 2020, presented with FCA the “Easy Wallbox™, patented by ENGIE Eps, exclusively for FCA. The product is the only wallbox that up to 2.2 kW and operating at up to 7.4 kW does not need to be set up by an installer or electrician. Dating back to 2017, the partnership between ENGIE Eps and Fiat Chrysler Automobiles is aimed at managing the changes in the best possible way and at coordinating all work related to electric mobility.

Microgrid in California: with the contract signed in January 2020, ENGIE EPS Group entered into an agreement as a contractor for the engineering, procurement supply and commissioning of the 2.0 MVA/4.0 MWh Battery Energy Storage System to be integrated into Anza Microgrid (California), consisting of existing 2.0 MWp PV plant and 1.35 MWp further extension. The commissioning and completion of the project is expected in Q4 2020.

ENGIE EPS’ CEO named Young Global Leader by the World Economic Forum: on 12 March 2020 ENGIE Eps’ Chief Executive Officer, Carlalberto Guglielminotti, has been recognized as a Young Global Leader by the World Economic Forum for his ability to innovate and promote sustainable change. Carlalberto Guglielminotti was identified as one of the world’s most promising and compelling leaders under the age of 40 for his accomplishments in the industrial sector, commitment to the promotion of positive change through technology, and for his achievements in bolstering the use of renewable energy around the world.

COVID -19 AND 2020 REVENUE GUIDANCE

On 21 June 2019, ENGIE EPS announced a revised revenue guidance of €40m for 2020 and €100m for 2022. It also presented an indicative ambition for 2025 of €400m of revenues in its Long Term Strategic Plan.

NET FINANCIAL POSITION(amounts in Euro)

31/12/2019 31/12/2018

Cash and cash equivalent 6,431,376 10,860,527

Cash at banks and petty cash 6,431,376 10,860,527

Net f inancial debts (14,532,178) (4,050,862)

Current financial liabilities (1,277,274) (2,240,696)

Non current financial liabilities (13,254,905) (1,810,167)

NET FINANCIAL POSITION (8,100,803) 6,809,665

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While the Pipeline is expected to generate revenues in 2021 onwards, the 2020 guidance rested mainly on projects moving from the opportunity pool to the Pipeline, then to the Backlog no later than 2019, and eventually generating revenues in 2020. As described above, some projects were not awarded to ENGIE, like the tender for new capacity in France, certain others are being delayed (in the US and Pacific islands), others have not materialized for ENGIE EPS, like the tenders in India and North Africa or a role of turnkey provider for large industrial projects that ENGIE EPS had planned in the e-mobility sector.

In addition, the COVID-19 outbreak is heavily impacting both the industrial operations of ENGIE EPS and its short-term business prospects. ENGIE EPS’ operations and the majority of the supply chain are based in Italy, the country currently at the epicenter of the European outbreak. The Italian government imposed the most drastic steps yet by any country except China to contain surging numbers of COVID-19 cases, placing almost immediately the region of Lombardy (where ENGIE EPS has two industrial premises) and more than a dozen other provinces in neighboring regions under quarantine on March 8. Restrictions were extended to the entire country on March 10, and then turned into a lockdown. In addition, travel restrictions all over the world are limiting the ability to ENGIE EPS to materialize its project development effort, particularly in large tender processes.

As the situation continues to unfold, ENGIE EPS is not currently in a position to quantify the adverse impact, the related consequences for our supply chain and construction sites worldwide (Italy, Mexico, California, Singapore, Comoros, and Greece), nor the scenarios for our projects under development (Europe, South Africa, Middle East, US and Pacific Islands). As a consequence, the different scenarios for 2020 revenue recognition, presented by the management and analyzed by the Board of Directors held on 19 March 2020, are subject to significant volatility.

All of the above certainly impacts ENGIE EPS’ 2020 guidance and ripples through the timing of the implementation of the Long Term Strategic Plan beyond 2020.

In the longer run, ENGIE EPS, together with ENGIE as its majority shareholder and industrial partner, remains fully committed to the Long Term strategic Plan and its 2025 €400 million revenue indicative ambition, bearing in mind that delivering this plan will require an improvement of the current economic environment highly penalized by the global Coronavirus pandemic.

Further, the successful implementation of the 2020-2025 Long Term Strategic Plan is significantly predicated upon (i) ENGIE EPS and ENGIE prioritizing efforts and resource allocation on the markets where storage is most promising, e.g. with favourable regulation and already announced tenders for which both groups have a competitive hedge, (ii) ENGIE supporting ENGIE EPS in projects that make sense for both companies, and (iii) both partners being successful in winning and executing projects.


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4.36 Concordance table

AMF requirements on the Full year financial report (art. 222-4 and 222-6 AMF General Regulation)

Chapter

Complete or condensed accounts for the FY 2019, in consolidated form where necessary, prepared either under IAS 34 or in accordance with Article 222-5 2

An interim management report which: - shall describe the material events that occurred in the first six months of the financial year and their impact on the interim accounts - shall describe the principal risks and uncertainties for the remaining six months of the year - shall disclose, as major related parties’ transactions (i) Related parties’ transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the issuer during that period; (ii) Any changes in the related parties’ transactions described in the last annual report that could have a material effect on the financial position or performance of the issuer in the first six months of the current financial year.

1-3

A statement made by the natural persons taking responsibility for the half-yearly financial report, whose names and functions are clearly indicated, to the effect that, to the best of their knowledge, the accounts are prepared in accordance with the applicable set of accounting standards and give a true and fair view of the assets, liabilities financial position and profit or loss of the issuer and the undertakings in the consolidation taken as a whole, and that the interim management report includes a fair review of the information referred to in Article 222-6

The statutory auditors' report on the limited review of the aforementioned accounts. Where the legal provisions applicable to the issuer do not require a report from the statutory or regulatory auditors on the interim accounts, the issuer shall mention this in its report

251

ANNEX 2 Report of the statutory auditors on FY 2019

Report of the statutory auditors on the Consolidated Financial Statements of the ENGIE EPS Group for the financial year ended on 31 December 2019

ENGIE EPS

RAPPORT DES COMMISSAIRES AUX COMPTES SUR LES COMPTES CONSOLIDES

Exercice clos le 31 décembre 2019

RBB Business advisors S.A. 133 bis, rue de l’Université

75007 Paris

Commissaire aux Comptes Membre de la compagnie

régionale de Paris

BDO Paris Audit & adviory S.A.R.L. 43-47, avenue de la Grande Armée

75116 Paris


régionale de Paris

ENGIE EPS

Rapport des commissaires aux comptes sur les comptes consolidés Exercice clos le 31 décembre 2019

A l’Assemblée Générale de la société ENGIE EPS,

Opinion

En exécution de la mission qui nous a été confiée par votre assemblé générale, nous avons effectué l’audit des comptes consolidés de la société ENGIE EPS relatifs à l’exercice clos le 31 décembre 2019, tels qu’ils sont joints au présent rapport.

Nous certifions que les comptes consolidés sont, au regard du référentiel IFRS tel qu’adopté dans l’Union européenne, réguliers et sincères et donnent une image fidèle du résultat des opérations de l’exercice écoulé ainsi que de la situation financière et du patrimoine, à la fin de l’exercice, de l'ensemble constitué par les personnes et entités comprises dans la consolidation.

L’opinion formulée ci-dessus est cohérente avec le contenu de notre rapport au comité d’audit.

Fondement de l’opinion

Référentiel d’audit

Nous avons effectué notre audit selon les normes d’exercice professionnel applicables en France. Nous estimons que les éléments que nous avons collectés sont suffisants et appropriés pour fonder notre opinion.

Les responsabilités qui nous incombent en vertu de ces normes sont indiquées dans la partie « Responsabilités des commissaires aux comptes relatives à l’audit des comptes consolidés » du présent rapport.

ENGIE EPS Rapport des commissaires aux comptes sur les comptes consolidés Exercice clos le 31 décembre 2019

ENGIE EPS 2

Indépendance

Nous avons réalisé notre mission d’audit dans le respect des règles d’indépendance qui nous sont applicables, sur la période du 1er janvier 2019 à la date d’émission de notre rapport, et notamment nous n’avons pas fourni de services interdits par l’article 5, paragraphe 1, du règlement (UE) n° 537/2014 ou par le code de déontologie de la profession de commissaire aux comptes.

Observation Sans remettre en cause l’opinion exprimée ci-dessus, nous attirons votre attention sur la note 3.1.1 « Nouvelles normes et interprétation » de l’annexe des comptes consolidés, qui expose le changement de méthode comptable induit par l’application des normes IFRS 16 « Contrats de location » et IFRIC 23 « Incertitude relative aux traitements fiscaux ».

Justification des appréciations - Points clés de l’audit

En application des dispositions des articles L.823-9 et R.823-7 du code de commerce relatives à la justification de nos appréciations, nous portons à votre connaissance les points clés de l’audit relatifs aux risques d'anomalies significatives qui, selon notre jugement professionnel, ont été les plus importants pour l’audit des comptes consolidés de l’exercice, ainsi que les réponses que nous avons apportées face à ces risques.

Les appréciations ainsi portées s’inscrivent dans le contexte de l’audit des comptes consolidés pris dans leur ensemble et de la formation de notre opinion exprimée ci-avant. Nous n’exprimons pas d’opinion sur des éléments de ces comptes consolidés pris isolément.

Reconnaissance du chiffre d’affaires

Risque identifié Une part significative du chiffre d’affaires provient de projets comptabilisés à l’avancement selon les critères de la norme IFRS 15. Une part du chiffre d’affaires reconnu correspond donc au degré d’avancement des coûts encourus. Un risque existe dans la correcte comptabilisation des coûts et produits attribuables au contrat sur la période.

Notre réponse

Notre approche d’audit a consisté à réaliser des tests substantifs sur les contrats de la période, notamment pour valider le pourcentage d’avancement.


ENGIE EPS 3

La note 3.9.10 « Comptabilisation du chiffre d’affaires » de l’annexe des comptes consolidés expose notamment les règles et méthodes comptables relative à la reconnaissance du revenu. Dans le cadre de notre appréciation des règles et principes comptables suivis par votre groupe, nous avons vérifié le caractère approprié des méthodes comptables visées ci-dessus et des informations fournies dans l’annexe des comptes consolidés et nous nous sommes assurés de leur correcte application.

Présentation et dépréciation des immobilisations incorporelles

Risque identifié Dans le contexte du repositionnement stratégique du Groupe présenté le 20 juin 2019, plusieurs lignes d’activité ont été abandonnées. D’autre part des coûts de développement ont été activés sur les projets stratégiques. Dans ce contexte, les immobilisations incorporelles relatives aux coûts de développement sont un point clé de l’audit.

Notre réponse

Notre approche d’audit a consisté à nous assurer de l’exhaustivité des dépréciations des immobilisations incorporelles au regard de la nouvelle stratégie du Groupe ainsi que de la correcte comptabilisation des coûts de développement sur l’exercice 2019. La note 3.9.5 « Immobilisations incorporelles » de l’annexe des comptes consolidés expose notamment les règles et méthodes comptables relative aux coûts de développement. Dans le cadre de notre appréciation des règles et principes comptables suivis par votre groupe, nous avons vérifié le caractère approprié des méthodes comptables visées ci-dessus et des informations fournies dans l’annexe des comptes consolidés et nous nous sommes assurés de leur correcte application.

Vérifications spécifiques Nous avons également procédé, conformément aux normes d'exercice professionnel applicables en France, aux vérifications spécifiques prévues par les textes légaux et réglementaires des informations relatives au groupe, données dans le rapport de gestion du conseil d’administration.

Nous n'avons pas d'observation à formuler sur leur sincérité et leur concordance avec les comptes consolidés.


ENGIE EPS 4

Informations résultant d'autres obligations légales et réglementaires Désignation des commissaires aux comptes

Nous avons été nommés commissaires aux comptes de la société ENGIE EPS par l’assemblée générale des actionnaires du 6 mars 2015 pour le cabinet RBB Business advisors et du 21 juin 2016 pour le cabinet BDO Paris Audit & advisory.

Au 31 décembre 2019, le cabinet BDO Paris Audit & advisory était dans la 4ème année de sa mission sans interruption et le cabinet RBB Business advisors dans la 5ème année, dont respectivement 4 et 5 années depuis que les titres de la société ont été admis aux négociations sur un marché réglementé.

Responsabilités de la direction et des personnes constituant le gouvernement d’entreprise relatives aux comptes consolidés

Il appartient à la direction d’établir des comptes consolidés présentant une image fidèle conformément au référentiel IFRS tel qu’adopté dans l’Union européenne ainsi que de mettre en place le contrôle interne qu'elle estime nécessaire à l'établissement de comptes consolidés ne comportant pas d'anomalies significatives, que celles-ci proviennent de fraudes ou résultent d'erreurs.

Lors de l’établissement des comptes consolidés, il incombe à la direction d’évaluer la capacité de la société à poursuivre son exploitation, de présenter dans ces comptes, le cas échéant, les informations nécessaires relatives à la continuité d’exploitation et d’appliquer la convention comptable de continuité d’exploitation, sauf s’il est prévu de liquider la société ou de cesser son activité.

Il incombe au comité d’audit de suivre le processus d’élaboration de l’information financière et de suivre l'efficacité des systèmes de contrôle interne et de gestion des risques, ainsi que le cas échéant de l'audit interne, en ce qui concerne les procédures relatives à l'élaboration et au traitement de l'information comptable et financière.

Les comptes consolidés ont été arrêtés par le conseil d’administration.

Responsabilités des commissaires aux comptes relatives à l’audit des comptes consolidés

Objectif et démarche d’audit

Il nous appartient d’établir un rapport sur les comptes consolidés. Notre objectif est d’obtenir l’assurance raisonnable que les comptes consolidés pris dans leur ensemble ne comportent pas d’anomalies significatives. L’assurance raisonnable correspond à un niveau élevé d’assurance, sans toutefois garantir qu’un audit réalisé conformément aux normes d’exercice professionnel permet de systématiquement détecter toute anomalie significative. Les anomalies peuvent provenir de fraudes ou résulter d’erreurs et sont considérées comme significatives lorsque l’on peut raisonnablement s’attendre à ce qu’elles puissent, prises individuellement ou en cumulé, influencer les décisions économiques que les utilisateurs des comptes prennent en se fondant sur ceux-ci.


ENGIE EPS 5

Comme précisé par l’article L.823-10-1 du code de commerce, notre mission de certification des comptes ne consiste pas à garantir la viabilité ou la qualité de la gestion de votre société.

Dans le cadre d’un audit réalisé conformément aux normes d’exercice professionnel applicables en France, le commissaire aux comptes exerce son jugement professionnel tout au long de cet audit. En outre :

• il identifie et évalue les risques que les comptes consolidés comportent des anomalies significatives, que celles-ci proviennent de fraudes ou résultent d’erreurs, définit et met en œuvre des procédures d’audit face à ces risques, et recueille des éléments qu’il estime suffisants et appropriés pour fonder son opinion. Le risque de non-détection d’une anomalie significative provenant d’une fraude est plus élevé que celui d’une anomalie significative résultant d’une erreur, car la fraude peut impliquer la collusion, la falsification, les omissions volontaires, les fausses déclarations ou le contournement du contrôle interne ;

• il prend connaissance du contrôle interne pertinent pour l’audit afin de définir des procédures d’audit appropriées en la circonstance, et non dans le but d’exprimer une opinion sur l’efficacité du contrôle interne ;

• il apprécie le caractère approprié des méthodes comptables retenues et le caractère raisonnable des estimations comptables faites par la direction, ainsi que les informations les concernant fournies dans les comptes consolidés ;

• il apprécie le caractère approprié de l’application par la direction de la convention comptable de continuité d’exploitation et, selon les éléments collectés, l’existence ou non d’une incertitude significative liée à des événements ou à des circonstances susceptibles de mettre en cause la capacité de la société à poursuivre son exploitation. Cette appréciation s’appuie sur les éléments collectés jusqu’à la date de son rapport, étant toutefois rappelé que des circonstances ou événements ultérieurs pourraient mettre en cause la continuité d’exploitation. S’il conclut à l’existence d’une incertitude significative, il attire l’attention des lecteurs de son rapport sur les informations fournies dans les comptes consolidés au sujet de cette incertitude ou, si ces informations ne sont pas fournies ou ne sont pas pertinentes, il formule une certification avec réserve ou un refus de certifier ;

• il apprécie la présentation d’ensemble des comptes consolidés et évalue si les comptes consolidés reflètent les opérations et événements sous-jacents de manière à en donner une image fidèle ;

• concernant l’information financière des personnes ou entités comprises dans le périmètre de consolidation, il collecte des éléments qu’il estime suffisants et appropriés pour exprimer une opinion sur les comptes consolidés. Il est responsable de la direction, de la supervision et de la réalisation de l’audit des comptes consolidés ainsi que de l’opinion exprimée sur ces comptes.


ENGIE EPS 6

Rapport au comité d’audit Nous remettons au comité d’audit un rapport qui présente notamment l’étendue des travaux d'audit et le programme de travail mis en œuvre, ainsi que les conclusions découlant de nos travaux. Nous portons également à sa connaissance, le cas échéant, les faiblesses significatives du contrôle interne que nous avons identifiées pour ce qui concerne les procédures relatives à l’élaboration et au traitement de l’information comptable et financière.

Parmi les éléments communiqués dans le rapport au comité d’audit figurent les risques d’anomalies significatives, que nous jugeons avoir été les plus importants pour l’audit des comptes consolidés de l’exercice et qui constituent de ce fait les points clés de l’audit, qu’il nous appartient de décrire dans le présent rapport.

Nous fournissons également au comité d’audit la déclaration prévue par l’article 6 du règlement (UE) n° 537-2014 confirmant notre indépendance, au sens des règles applicables en France telles qu’elles sont fixées notamment par les articles L.822-10 à L.822-14 du code de commerce et dans le code de déontologie de la profession de commissaire aux comptes. Le cas échéant, nous nous entretenons avec le comité d'audit des risques pesant sur notre indépendance et des mesures de sauvegarde appliquées.

Paris, le 28 avril 2020

Les Commissaires aux Comptes

RBB Business advisors BDO Paris Audit & advisory

Jean-Baptiste Bonnefoux Eric Picarle

erp

Note

Accepted définie par erp

erp

Tampon

Adjustments Adjustments

0 0

394.032 0

394.032 0

0 0

0 0

18.705 0

18.705 0

412.737

311.397

2.805.081

1.573.472 2.627.433

1.206.490 2.723.817

2.779.962 5.351.250

6.309.176

0

0 (3.777.134)

0 0

0 0

0 0

0 0

TFR

TFR

3.9.9

3.9.10

3.11.8

3.12.8

3.12.9

Avoirs en banque et en caisse 6.431.376 10.860.527

Dettes financières courantes (1.277.274) (2.240.696)

Dettes financières non courantes (13.254.905) (1.810.167)

(1) Frais d'audit liés à l'introduction en bourse et au processus d'émission de droits

Avoirs en banque et en caisse 6.431.376 10.860.527

Trésorerie liée à des avances sur subventions 0 0

Trésorerie sur subventions 0 0

Dettes financières courantes (1.277.274) (2.240.696)

Dettes financières non courantes (13.254.905) (1.810.167)

313

ANNEX 3 Statutory Accounts FY 2019

Company’s accounts for the financial year ended on 31 December 2019

bi

ENGIE EPS S.A. Comptes annuels au 31 décembre 2019

2

Sommaire

1. BILAN .................................................................................................................................................... 4 2. Compte de résultat ............................................................................................................................... 6 3. Annexe .................................................................................................................................................. 7 4. Faits caractéristiques de l’exercice .................................................................................................... 8 4.1. Politique de prix de transfert au sein du Groupe : .................................................................................. 8 4.2. Plan d’intéressement, modifications au sein du conseil d’administration, et financement du groupe : ... 8 4.3. Information sur les instruments dilutifs et le risque de dilution : .............................................................. 9 4.4. Evolution des filiales et participations : ................................................................................................... 9 4.5. Evolution de la succursale établie en Italie : ......................................................................................... 10 4.6. Engagements en matière de retraite : .................................................................................................. 11 4.7. Changement de dénomination sociale - Transfert de siège social : ..................................................... 11 4.8. Vérification de comptabilité : ................................................................................................................. 11 5. Evènements postérieurs à la clôture de l’exercice ......................................................................... 12 6. Autres informations ........................................................................................................................... 14 7. Règles et méthodes comptables ....................................................................................................... 15 7.1. Les principales méthodes utilisées ont été les suivantes : ................................................................... 15 8. Notes ................................................................................................................................................... 17 8.1. Immobilisations ..................................................................................................................................... 17 8.2. Amortissements .................................................................................................................................... 18 8.3. Provisions ............................................................................................................................................. 18 8.4. Créances .............................................................................................................................................. 19 8.5. Dettes ................................................................................................................................................... 20 8.6. Charges constatées d'avance .............................................................................................................. 20 8.7. Produits constatés d'avance ................................................................................................................. 20 8.8. Charges à payer ................................................................................................................................... 21 8.9. Produits a recevoir ............................................................................................................................... 21 8.10. Charges et produits exceptionnels ....................................................................................................... 21 8.11. Composition du capital social ............................................................................................................... 21 8.12. Effectif .................................................................................................................................................. 22 8.13. Variation des capitaux propres ............................................................................................................. 22 8.14. Répartition du chiffre d'affaires ............................................................................................................. 22 8.15. Filiales et participations ........................................................................................................................ 23 8.16. Situation fiscale différée et latente ........................................................................................................ 23 8.17. Engagements donnés .......................................................................................................................... 24 8.18. Engagements reçus ............................................................................................................................. 24

4

1. BILAN

ACTIF Brut Amortiss.Dépréciations 31/12/2019 31/12/2018

Immobilisations incorporelles Frais d'établissement Frais de recherche et de développement Concessions, brevets et droits assimilés 115 210 59 682 55 527 75 817 Fonds commercial 213 538 213 538 - 213 538 Autres immobilisations incorporelles 401 910 27 602 374 309 374 190 Immobilisations corporelles Terrains Constructions Installations techniques, matériel et outillage Autres immobilisations corporelles Immob. en cours / Avances & acomptes Immobilisations financières Participations et créances rattachées 59 891 379 13 480 457 46 410 922 57 637 996 Autres titres immobilisés Prêts Autres immobilisations financières 419 419 300 TOTAL ACTIF IMMOBILISE 60 622 456 13 781 279 46 841 177 58 301 841 Stocks et En–Cours Matières premières et autres approv. En cours de production de biens En cours de production de services Produits intermédiaires et finis 374 850 374 850 374 850 Marchandises Avances Avances et acomptes versés sur commandes Créances Clients et comptes rattachés 9 275 278 288 210 8 987 068 4 827 192 Fournisseurs débiteurs 60 60 3 510 Personnel Etat, Impôts sur les bénéfices Etat, Taxes sur le chiffre d'affaires 180 405 180 405 254 502 Autres créances 23 100 174 136 662 22 963 513 10 573 355 Divers Valeurs mobilières de placement Disponibilités 3 134 575 3 134 575 8 061 370 Comptes de Régularisation Charges constatées d'avance 34 929 34 929 43 398 ACTIF CIRCULANT 36 100 271 424 872 35 675 399 24 138 177 Charges à répartir sur plusieurs exercices Prime de remboursement des obligations Ecarts de conversion - Actif 9 286 9 286 TOTAL ACTIF 96 732 013 14 206 151 82 525 862 82 440 018

5

PASSIF 31/12/2019 31/12/2018 Capital social ou individuel 2 553 372 2 553 372 Primes d'émission, de fusion, d'apport, ... 83 811 019 83 811 019 Ecarts de réévaluation Réserve légale Réserves statutaires ou contractuelles Réserves réglementées Autres réserves Report à nouveau (10 352 826) (7 966 221) Résultat de l'exercice (13 831 595) (2 386 604) Subventions d'investissement Provisions réglementées TOTAL CAPITAUX PROPRES 62 179 970 76 011 565 Produits des émissions de titres participatifs Avances conditionnées AUTRES FONDS PROPRES Provisions pour risques 698 326 Provisions pour charges PROVISIONS POUR RISQUES ET CHARGES 698 326 Dettes Financières Emprunts obligataires convertibles Autres emprunts obligataires Emprunts/dettes auprès des établissements de crédits 12 500 000 Emprunts et dettes financières diverses Emprunts et dettes financières diverses - Associés 15 000 113 772 Avances et acomptes reçus sur commandes en cours Dettes d’exploitation Dettes fournisseurs et comptes rattachés 5 416 747 4 407 786 Dettes fiscales et sociales 375 820 382 905 Dettes diverses Dettes sur immobilisations et comptes rattachés Autres dettes 1 309 542 1 488 194 Compte de régularisation Produits constatés d'avance 30 458 34 953 DETTES 19 647 566 6 427 609 Ecarts de conversion - Passif 843 TOTAL PASSIF 82 525 862 82 440 017

6

2. Compte de résultat

31/12/2019 31/12/2018Produits d’exploitation France ExportationsVentes de marchandisesProduction vendue (biens) 236,260 236,260 776,457Production vendue (services) 5,187,996 5,187,996 2,410,695Chiffre d’affaires net - 5,424,256 5,424,256 3,187,152 Production stockée 374,850 Production immobiliséeSubventions d’exploitation

Autres produits 4,773 719 Total produits d’exploitation 5,429,029 3,562,721 Charges d’exploitation Achats de marchandisesVariations de stock

112,804 764,031 Variations de stockAutres achats et charges externes 5,790,246 4,539,889 Impôts, taxes et versements assimilés 3,759 713 Salaires et traitements 453,439 528,990 Charges sociales 205,716 176,194 Dotations aux amortissements et dépréciations :– Sur immobilisations : dotations aux amortissements 61,477 12,933 – Sur immobilisations : dotations aux dépréciations– Sur actif circulant : dotations aux dépréciations 288,210 – Pour risques et charges : dotations aux provisionsAutres charges 359,407 361,517 Total charges d’exploitation (II) 7,275,058 6,384,267 RESULTAT D’EXPLOITATION (I–II) - 1,846,029 - 2,821,546

Bénéfice attribué ou perte transférée (III)Perte supportée ou bénéfice transféré (IV)Produits financiersDe participation 276,942 85,600

Autres intérêts et produits assimilés

Différences positives de change

Total produits financiers (V) 276,942 85,600 Charges financières

11,227,074 Intérêts et charges assimilées (4) 106,195 Différences négatives de change 4,059

Total charges financières (VI) 11,333,269 4,059 RESULTAT FINANCIER (V–VI) - 11,056,327 81,541

- 12,902,356 - 2,740,005 Produits exceptionnelsSur opérations de gestion Sur opérations en capital

358,000 Total produits exceptionnels (VII) - 358,000 Charges exceptionnellesSur opérations de gestion 929,240 Sur opérations en capital 224

4,376 Total charges exceptionnelles (VIII) 929,240 4,600 RESULTAT EXCEPTIONNEL (VII–VIII) - 929,240 353,400 Total des produits (I+III+V+VII) 5,705,972 4,006,321 Total des charges (II+IV+VI+VIII+IX+X) 19,537,567 6,392,925 BENEFICE OU PERTE - 13,831,595 - 2,386,604

Dotations aux amortissements, aux dépréciations et aux provisions

Charges nettes sur cessions de valeurs mobilières de placement

RESULTAT COURANT avant impôts (I–II+III–IV+V–VI)

Reprises sur provisions et dépréciation et transferts de charges


Produits nets sur cessions de valeurs mobilières de placement

Reprises sur provisions (et amortissements), transferts de charges

Achats de matières premières et autres approvisionnements

Quotes–parts de résultat sur opérations faites en commun

D’autres valeurs mobilières et créances de l’actif immobilisé

Reprises sur provisions et dépréciations et transferts de charges

7

3. Annexe

Au bilan avant répartition de l'exercice clos le 31/12/2019, dont le total est de 82.525.862 € et au compte de résultat de l'exercice, présenté sous forme de liste, dont le total est de 19.537.567 € dégageant un résultat net comptable de –13.831.595 €.

L’exercice a une durée de 12 mois, recouvrant la période du 01/01/2019 au 31/12/2019. Les notes ou tableaux ci–après font partie intégrante des comptes annuels.

Ces comptes annuels ont été établis par le Conseil d’Administration.

Nous n'avons pas mentionné les notes ou les tableaux qui ne trouvent pas leur application ou ne sont pas significatifs pour notre entreprise.

Aucun changement de méthode n’a été relevé au cours de l’exercice.

8

4. Faits caractéristiques de l’exercice

4.1. Politique de prix de transfert au sein du Groupe :

Au cours de l'exercice, la société a poursuivi les modalités d'imputation des coûts liés aux fonctions de support définies en 2016 (fonctions, rôles et responsabilités affectés au personnel d'une ou plusieurs sociétés du Groupe en faveur de toutes les entités du périmètre). La réallocation des coûts découlant de la politique de prix de transfert a été opérée dans le respect des conditions de marché et de la réglementation française et italienne. Les fonctions d'entreprise affectées au bénéfice des différentes sociétés du Groupe (Business Development, Business Intelligence, Administration & Finance, Communication, Service juridique, compliance et RH) sont affectées à des centres de coûts spécifiques et peuvent être supportées par la société Mère ENGIE EPS SA ou par ses filiales. Dans ce dernier cas, la quote-part des charges de fonctions de support supportée par les filiales est en premier lieu refacturée sans marge à la société Mère ENGIE EPS SA et affectée au centre de coût spécifique pour être incorporée dans le coût total des fonctions communes. Le coût total des fonctions communes est ensuite réparti entre les sociétés du Groupe selon un critère cohérent et homogène, à des conditions de marché. Les critères d'allocation choisis sont objectifs et mesurables. Les clés de répartition sont appliquées de manière homogène à toutes les entités et permettent de mettre en corrélation les coûts alloués et les revenus. Dans le respect de la réglementation fiscale française et italienne, ainsi que du principe de pleine concurrence, la refacturation des charges des fonctions communes par la société Mère ENGIE EPS SA aux sociétés du Groupe s’est effectuée en appliquant une marge de 5%.

4.2. Plan d’intéressement, modifications au sein du conseil d’administration, et financement du groupe :

Conformément au Plan d’Intéressement qui avait été adopté le 6 mars 2018, les options de souscription d’actions ou les Bons de Souscription d’actions qui n’avaient pas été exercés ou levés à cette date avaient été remplacés par des SARs. Le Plan d’Intéressement 2018 c’est normalement poursuivi en 2019. Le 25 juin 2019, un nouveau conseil d’administration a été nommé : Thierry Kalfon (Président du conseil), Carlalberto Guglielminotti (Directeur Général), Massimo Prelz Oltramonti, Giuseppe Artizzu, Cristina Tomassini, Elise Collange, Romuald Cirillo, Anne Harvengt et Csilla Köhalmi-Monfils. À la date des présents états financiers, le conseil d’administration est composé des dix membres suivants :

• Thierry Kalfon, Président • Carlalberto Guglielminotti, Directeur Général

9

• Massimo Prelz Oltramonti, Directeur • Jean Rappe, Directeur • Anne Harvengt, Directrice • Giuseppe Artizzu, Directeur • Romualdo Cirillo, Directeur • Csilla Köhalmi-Monfils, Directrice • Cristina Tomassini, Directrice • Elise Collange, Directrice

En ce qui concerne le financement du groupe, le société a obtenu de la Société Générale un financement de 7,5 millions d'euros en juin 2019, puis 15 millions d'euros en décembre 2019, sous forme de lignes de crédit remboursables sur une période de 4 ans, afin de financer les besoins en fonds de roulement, les coûts de développement capitalisés et les investissements au niveau du Groupe.

4.3. Information sur les instruments dilutifs et le risque de dilution :

Les mandataires sociaux, les membres de la direction et les salariés de la Société ne détiennent aucune participation dans le capital de la Société et il n'existe aucun titre en circulation donnant droit à leurs détenteurs d'accéder au capital de la Société. L’allocation des SARs au Directeur Général, Président du Conseil d’Administration et aux membres du Conseil d’Administration remplaçant les options non levées était décrite au paragraphe 15.5 du Document de Référence 2017. En application du plan d’intéressement 2018, les stock-options et BSA alors non levés avaient été remplacés en 2018 par des SARs allouées individuellement et les membres du management du Groupe ont reçu des SARs additionnelles. Par ailleurs, suite à l’accord de remboursement par anticipation du financement intervenu en 2018, la BEI avait apporté les 660.513 bons de souscription d’actions liés à la première tranche, finalement étendue par ENGIE. En conséquence, à la clôture de l’exercice, il ne demeure plus aucun risque de dilution relatif aux options ou bons de souscription.

4.4. Evolution des filiales et participations :

Les participations dans les filiales existantes au 31 décembre 2018 demeurent sans modification à la clôture de l’exercice. Il convient cependant de signaler que la liquidation de la filiale MCM a été décidée en décembre 2019. La procédure de liquidation s’est achevée en janvier 2020. La société n’a acquis aucune filiale au cours de l’exercice. La valeur comptable brute des immobilisations financières correspond au coût historique d’acquisition ou à la valeur d’apport. A la fin de chaque exercice, la société détermine s’il existe un indice de perte de valeur de ses titres, et une dépréciation est comtabilisée si la valeur comptable est supérieure à la valeur d’utilité. Pour mesurer la valeur d’utilité, les flux de trésorerie futurs sont actualisés à la valeur actuelle en appliquant un taux d’escompte qui reflère les estimations actuellement en vigueur sur le marché de la valeur temps de l’argent et des risques spécifiques.

10

Les pertes de valeur sont comptabilisées dans le compte de résultat, ainsi des dotations aux provisions pour dépréciation ont été comptabilisée à la clôture de l’exercice pour les titres suivants : • 11.001.241 € pour les titres de la filiale Electro Power Manufacturing ;

• 225.833 € pour les titres de la filiale MCM.

Au 31 décembre 2019, les provisions pour dépréciation des titres s’élèvent en conséquence à : • 12.104.624 € en ce qui concerne la filiale Electro Power Manufacturing ;

• 1.150.000 € en ce qui concerne la filiale Elvi Energy ;

• 225.833 € en ce qui concerne la filiale MCM.

4.5. Evolution de la succursale établie en Italie :

Le 2 novembre 2017, la société avait acquis auprès de sa filiale ELVI ENERGY la branche d’activité « Mobility & Power Electronics Lab » dont l’établissement stable est basé en Italie, pour la somme de 814.600 €. Sur la base de la clause de révision de prix prévue à l’acte, un ajustement de prix avait été constaté pour 62.122 € en fonction de la situation nette au 31/10/2017, portant le prix d’acquisition définitif à 876.122 €. Le fonds de commerce de cette branche d’activité avait par conséquent été évalué à 213.538 €. Compte tenu de la cession du principal contrat intervenue début 2020 pour un montant total de 965.000 €, et dans la mesure où le fonds n’est pas valorisé dans le cadre de cette cession, une provision pour dépréciation a été comptabilisée à la clôture de l’exercice pour 213.538 €. Les principaux éléments de résultat de cette succursale, inclus dans le résultat global de la société, sont les suivants :

COMPTE DE RESULTAT 31/12/2019 31/12/2018

Durée 12 mois 12 mois

Chiffre d'affaires net (hors taxes) 849 261 467 016

Production stockée et immobilisée 374 850

Coût des achats et charges externes 194 639 643 679

VALEUR AJOUTEE 654 622 198 187

Charges de personnel 642 470 682 430

EXCEDENT BRUT D'EXPLOITATION 12 152 -484 243

Autres produits 4 670 61

Dotations aux amortissements et provisions 0 0

Autres charges 96 323 60

RESULTAT D'EXPLOITATION -79 502 -484 241

Résultat f inancier 0 0

Résultat exceptionnel -911 954

RESULTAT NET -991 456 -484 241

11

4.6. Engagements en matière de retraite :

Le montant des engagements de retraite relatifs au personnel salarié de la succursale italienne est de 161.486 € à la clôture de l’exercice.

4.7. Changement de dénomination sociale - Transfert de siège social :

Par assemblée en date du 25 juin 2019, il a été décidé de modifier la dénomination sociale de la société et d’adopter comme nouvelle dénomination sociale « ENGIE EPS ». En date du 30 septembre 2019, le Conseil d’administration a décidé de transférer le siège social de la société au 28 rue de Londres, 75009 PARIS, à effet du 1er octobre 2019.

4.8. Vérification de comptabilité :

La société a fait l’objet d’une vérification de comptabilité qui a débuté le 18 septembre 2019. Cette vérification s’est terminée le 13 février 2020. Aucune proposition de rectification n’a été émise par l’Administration fiscale.

12

5. Evènements postérieurs à la clôture de l’exercice

La recharge électrique facile de FCA fait ses débuts avec Easy Wallbox™ par ENGIE Eps : le 26 février 2020, a présenté avec FCA le "Easy Wallbox™, breveté par ENGIE Eps, exclusivement pour FCA. Ce produit est le seul coffret mural qui ne nécessite pas d'installation par un installateur ou un électricien pour fonctionner jusqu'à 2,2 kW et jusqu'à 7,4 kW. Datant de 2017, le partenariat entre ENGIE Eps et Fiat Chrysler Automobiles vise à gérer au mieux les changements et à coordonner tous les travaux liés à la mobilité électrique. Microgrid en Californie : avec le contrat signé en janvier 2020, le groupe ENGIE EPS a conclu un accord en tant que contractant pour l'ingénierie, la fourniture d'approvisionnement et la mise en service du système de stockage d'énergie par batterie de 2,0 MVA/4,0 MWh qui sera intégré à Anza Microgrid (Californie), composé d'une centrale PV existante de 2,0 MWp et d'une extension supplémentaire de 1,35 MWp. La mise en service et l'achèvement du projet sont prévus pour le quatrième trimestre 2020.

Le PDG d'ENGIE EPS nommé Jeune leader mondial par le Forum économique mondial : le 12 mars 2020, le PDG d'ENGIE Eps, Carlalberto Guglielminotti, a été reconnu comme Jeune leader mondial par le Forum économique mondial pour sa capacité à innover et à promouvoir un changement durable. Carlalberto Guglielminotti a été identifié comme l'un des dirigeants de moins de 40 ans les plus prometteurs et les plus convaincants du monde pour ses réalisations dans le secteur industriel, son engagement à promouvoir un changement positif par le biais de la technologie et pour ses succès dans le renforcement de l'utilisation des énergies renouvelables dans le monde entier. Depuis février 2020, l'Europe est l'un des continents les plus durement touchés par le Covid-19, et les gouvernements ont imposé les mesures les plus drastiques jamais prises par des états pour contenir l'augmentation du nombre de cas de coronavirus, plaçant les pays sous quarantaine. La direction d’ENGIE EPS essaie de minimiser l'impact sur les affaires et les opérations généré par les fortes restrictions imposées en Europe et en particulier en Italie et les conséquences qui en découlent pour ses sites, projets, clients et fournisseurs - en termes généraux de résultats financiers - en publiant et en mettant constamment à jour la politique COVID-19 (Business Continuity and Emergency Management Plan). Le 21 juin 2019, ENGIE EPS annonçait un objectif de chiffre d’affaires révisé de 40 millions d'euros pour 2020 et de 100 millions d'euros pour 2022. Était également annoncée une ambition indicative pour 2025 de 400 millions d'euros de chiffre d’affaires dans le cadre du Plan Stratégique à Long Terme. Alors qu’il est attendu que le Pipeline génère un chiffre d’affaires à compter de 2021, l'objectif pour 2020 reposait principalement sur des projets passant du pool d'opportunités au Pipeline, puis au Carnet de Commandes au plus tard en 2019, et générant, à terme, du chiffre d’affaires en 2020. Comme décrit ci-dessus, certains projets n'ont pas été attribués à ENGIE, comme l'appel d'offres pour de nouvelles capacités en France, certains autres sont retardés (aux États-Unis et dans les îles du Pacifique), d'autres ne se sont pas concrétisés pour ENGIE EPS, comme les appels d’offres en Inde et en Afrique du Nord ou le rôle de fournisseur clé en main pour de grands projets industriels qu’ENGIE EPS avait planifié dans le secteur de l'e-mobilité. En outre, l'épidémie de COVID-19 a un impact important sur les opérations industrielles d'ENGIE EPS et sur ses perspectives à court terme. Les opérations d'ENGIE EPS et la majorité de sa chaîne d'approvisionnement sont basées en Italie, pays qui se trouve actuellement à l'épicentre de l'épidémie européenne. Le 8 mars, le gouvernement italien a imposé les mesures les plus drastiques jamais prises par des pays, à l'exception de la Chine, pour contenir l'augmentation du nombre de cas de COVID-19, plaçant presque immédiatement en quarantaine la région de Lombardie (où ENGIE EPS possède deux installations industrielles) et plus d'une douzaine d'autres provinces des régions voisines. Les restrictions ont été étendues à l'ensemble du pays le 10 mars, et se sont ensuite traduites par un confinement généralisé. En outre, les restrictions de voyage dans le monde entier limitent la capacité d'ENGIE EPS à matérialiser son effort de développement de projets, en particulier pour les grandes procédures d'appel d'offres. Alors que la situation continue d’évoluer, ENGIE EPS n'est actuellement pas en mesure de quantifier l'impact négatif, les conséquences connexes pour sa chaîne d'approvisionnement et ses chantiers dans le monde entier (Italie, Mexique, Californie, Singapour, Comores et Grèce), ni les scénarios pour ses projets en cours de développement (Europe, Afrique du Sud, Moyen-Orient, États-Unis et îles du Pacifique). Par conséquent, les différents scénarios de reconnaissance en chiffre d’affaires en 2020, présentés par la

13

direction et analysés par le Conseil d'administration du 19 mars 2020, sont sujets à une volatilité importante. Tout ce qui précède a un impact certain sur les objectifs d'ENGIE EPS pour 2020 et se répercute sur le calendrier de mise en œuvre du Plan Stratégique à Long Terme au-delà de 2020. À plus long terme, ENGIE EPS, en collaboration avec ENGIE en tant qu’actionnaire majoritaire et partenaire industriel, reste totalement engagé dans la mise en oeuvre du Plan Stratégique à Long Terme et dans son ambition indicative de 400 millions d'euros de chiffre d’affaires pour 2025, étant entendu que la réalisation de ce plan nécessitera une amélioration de l'environnement économique actuel fortement pénalisé par la pandémie mondiale de coronavirus. De plus, la réussite de la mise en œuvre du Plan Stratégique à Long Terme dépend de manière critique de (i) la priorité accordée par ENGIE EPS et ENGIE aux efforts et à l'allocation des ressources sur les marchés où le stockage est le plus prometteur, par exemple avec une réglementation favorable et des appels d'offres déjà annoncés pour lesquels les deux groupes disposent d'un avantage compétitif, (ii) le soutien d'ENGIE à ENGIE EPS dans des projets qui ont du sens pour les deux entreprises, et (iii) la réussite des deux partenaires dans l'obtention et l'exécution de projets. Aucun autre événement ultérieur n'a été enregistré au moment de la publication de ce document.

14

6. Autres informations

Périmètre de consolidation : Aucun changement dans le périmètre de consolidation n’est intervenu au cours de l’exercice. La société ENGIE EPS consolide selon la méthode de l'intégration globale les comptes des filiales suivantes :

• Electro Power Systems Manufacturing Srl, société à responsabilité limitée au capital de 1.004.255 € détenue à 100% ;

• Elvi Energy Srl, société à responsabilité limitée au capital de 1.000.000 € détenue à 100% ;

• MCM Energy Lab Srl, société à responsabilité limitée au capital de 50.000 € détenue à 70% ;

• Electro Power Systems Inc, filiale américaine d’Electro Power Systems Manufacturing Srl à 100%.

Pour rappel, la liquidation de la filiale MCM a été décidée en décembre 2019. La procédure de liquidation s’est achevée en janvier 2020. La société consolide selon la méthode de la mise en équivalence les comptes de la filiale suivante :

• Comores Energies Nouvelles, société à responsabilité limitée au capital de 1.000.000 KMF, établie au sein de l’Union des Comores et détenue à 49%.

Une copie des comptes consolidés peut être obtenue au siège social, 28 rue de Londres, Paris 9ème. Jetons de présence, autres rémunérations : Le montant des jetons de présence alloués aux membres du Conseil d’Administration au titre de l’année 2019 est de 83.425 €. Le montant des Stocks Appreciation Rights allouées en 2019 par ENGIE EPS s’élève à 167.185 €.

15

7. Règles et méthodes comptables

(Code de Commerce - article L 123-12 et L 123-28 et règlement ANC) (Décret n° 2007- 431 du 25 mars 2007 -

article (V) du 27/03/2007) Les conventions générales comptables ont été appliquées, dans le respect du principe de prudence, conformément aux hypothèses de base :

• Continuité de l’exploitation,

• Permanence des méthodes comptables d’un exercice à l’autre,

• Indépendance des exercices,

Et conformément aux règles générales d’établissement et de présentation des comptes annuels. La méthode de base retenue pour l’évaluation des éléments inscrits en comptabilité est la méthode des coûts historiques.

7.1. Les principales méthodes utilisées ont été les suivantes :

Referentiel comptable La société applique le règlement ANC n°2016-07 du 4 novembre 2016. Contrats La comptabilisation d’un contrat en cours d’exécution par la succursale italienne a été effectuée selon la méthode de l’avancement. A la clôture de l’exercice, une provision pour risque de 698.326 € a été constatée sur la cession du principal contrat de la succursale Mobility, cession intervenue en janvier 2020. Créances Les créances sont valorisées à leur valeur nominale. Une provision pour dépréciation est pratiquée lorsque la valeur probable de réalisation est inférieure à la valeur comptable. A ce titre, une provision pour dépréciation avait été constituée de 2016 à 2018 à hauteur de 119.376 € pour la créance détenue sur la filiale EPS Inc. Cette provision a été maintenue, et complétée par une dotation complémentaire de 8.000 € en 2019, soit au total 127.376 € à la clôture de l’exercice (soit 100% de la créance). Ecarts de conversion sur dettes et créances libellées en monnaies étrangères Lorsque l’application du taux de conversion d’une monnaie étrangère a pour effet de modifier les montants en monnaie nationale précédemment comptabilisés, les écarts de conversion sont inscrits à des comptes transitoires.

16

A la clôture de l’exercice, un écart de conversion actif sur la créance détenue sur la filiale COMORES ENERGIES NOUVELLES a été comptabilisé à la clôture de l’exercice pour 9.286 € (diminution de la créance). Une provision pour dépréciation a parallèlement été constituée pour ce même montant .

Frais de recherche et développement Les frais de recherche et développement engagés par la succursale italienne se rapportent au projet REDI W0062 et avaient été activés en 2018. La fin de la phase de développement s’est achevée en 2019, les immobilisations en cours ont donc été transférées en immobilisations incorporelles – Développement projet REDI MOBILITY, pour 236.182 € à la clôture de l’exercice. Amortissements pour dépréciation des autres immobilisations incorporelles Les amortissements pour dépréciation sont calculés suivant la durée de vie prévue, selon le mode linéaire : Logiciels divers = sur 3ans, soit un taux de 33,33% ERP développé en interne = sur 5 ans, soit un taux de 20% Participations et autres titres À la fin de chaque exercice, la société détermine s’il existe un indice de perte de valeur de ses titres. Une dépréciation est comptabilisée si la valeur comptable dépasse sa valeur d’utilité. Pour mesurer la valeur d'utilité, les flux de trésorerie futurs sont actualisés à leur valeur actuelle en appliquant un taux d'escompte qui reflète les estimations actuellement en vigueur sur le marché de la valeur temps de l’argent et des risques spécifiques. Les pertes de valeur sont comptabilisées dans le compte de résultat. A ce titre, une provision complémentaire pour dépréciation des titres de la filiale Electro Power Systems Manufacturing de 11.001.241 € a été constatée à la clôture de l’exercice, ainsi qu’une proivision de 225.833 € sur les titres de la filiale MCM. En conséquence, à la clôture de l’exercice, le montant des provisions sont les suivants :

• 12.104.624 € en ce qui concerne la filiale Electro Power Systems Manufacturing ;


• 225.833 € en ce qui concerne la filiale MCM ENERGY LAB.

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8. Notes

8.1. Immobilisations

Valeur brute Début d'exercice

Augmentations : Réévaluations

Augmentations : Acquisitions

Immobilisations incorporelles

Autres postes d’immos incorporelles Logiciels licences brevets 101 625 13 585 Fonds de commerce EMobility 213 538 Développement Emobility 236 182 ERP 138 009 Immobilisat. incorporelles en cours 138 009 27 720 Dév.en cours projet REDI EMobility 236 182

689 354 415 496 Immobilisations f inancièresAutres participations Titres EPS MANUFACTURING 43 778 688 Titres ELVI ENERGY 3 875 901 Titres MCM Energy Lab 315 000 Titres COMORES ENERGIES NOUVELLES 996 Avances consolidables Elvi Energy 11 920 794

59 891 379 -

Dépôts et cautionnements 300 419

59 891 679 419

TOTAL GÉNÉRAL 60 581 033 415 915

Diminutions Par cession

Valeur brute f in d'exercice

Réévaluations Valeurs d'origine

Immobilisations incorporelles Logiciels licences brevets 115 210 Fonds de commerce EMobility 213 538 Développement Emobility 236 182 ERP 138 009 Immobilisat. incorporelles en cours 374 190 27 720

374 190 730 659 Immobilisations f inancièresAutres participationsTitres EPS MANUFACTURING 43 778 688 Titres ELVI ENERGY 3 875 901 Titres MCM Energy Lab 315 000 Titres COMORES ENERGIES NOUVELLES 996 Avances consolidables Elvi Energy 11 920 794

- 59 891 379


300 59 891 798

TOTAL GÉNÉRAL 374 490 60 622 457

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8.2. Amortissements

8.3. Provisions

Une provision pour dépréciation de la créance Princeton Power Systems a été constatée à la clôture de l’exercice pour 288.210 €. Des provisions pour dépréciation des titres ont été constatées pour 11.001.241 € en ce qui concerne les titres EPS Manufacturing, et pour 225.833 € en ce qui concerne les titres MCM ENERGY LAB. Des provisions pour dépréciation des avances faites aux filiales ont été constatées pour : EPS Inc 8.000 € Commores Energies Nouvelles 9.286 € Une provision pour risque a été constatée sur le principal contrat Mobility pour 698.326 €. Le fonds de commerce Mobility a fait l’objet d’une provision pour dépréciation de 213.538 €.

Au début de l'exercice Augmentations

A la f in de l'exercice

– Autres postes d’immobilisations incorporelles 25 808 61 477 87 285

Immobilisations incorporelles 25 808 61 477 87 285 – Installations générales, agencements et

– Installations techniques, matériel et outillage

– Installations générales, agencements

ACTIF IMMOBILISE 25 808 61 477 87 285

Provisions au début de l'exercice

Dotations de l'exercice

Reprises de l'exercice

Provisions à la f in de l'exercice

Provisions pour risques 698 326 698 326

Provisions pour dépréciation 2 372 759 11 746 107 14 118 866

Total 2 372 759 12 444 433 - 14 817 192

Exploitation 288 210

Financières 11 227 073

Exceptionnelles 929 150

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8.4. Créances

Les créances clients entre entreprises liées s'élèvent au total à 7.258.953 € :

• Elvi Energy : 6.757.218 €

• Eps Manufacturing : 376.131 €

• Comores Energies nouvelles : 125.604 €

Les autres créances entre entreprises liées s’élèvent au total à 22.495.579 € :

• Elvi Energy : 21.931.989 €

• Eps Inc : 127.376 €

• Comores Energies Nouvelles : 436.214 €

Montant brutEchéances à moins d'un an

Echéances à plus d'un an

Créances de l’actif immobilisé :

Créances rattachées à des participations 11 920 794 11 920 794

Autres 419 419

Créances de l’actif circulant :

Créances Clients et Comptes rattachés 9 275 278 9 275 278

Autres 23 280 637 23 280 637

Charges constatées d’avance 34 929 34 929

Total 44 512 057 32 590 844 11 921 213

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8.5. Dettes

Les dettes fournisseurs entre entreprises liées s'élèvent à 4.247.573 € (Elvi Energy) Les autres dettes entre entreprises liées s’élèvent à 1.309.542 € (Elvi Energy)

8.6. Charges constatées d'avance

8.7. Produits constatés d'avance



Echéances à plus de 5 ans

Emprunts obligataires convertibles (*)

Autres emprunts obligataires (*)

Emprunts (*) et dettes auprès des

établissements de crédit dont :

– à 1 an au maximum à l’origine

– à plus de 1 an à l’origine 12 500 000 12 500 000

Emprunts et dettes f inancières divers (*) (**)

Dettes fournisseurs et comptes

rattachés 5 416 747 5 416 747

Dettes f iscales et sociales 375 820 375 820

Dettes sur immobilisations et comptes

rattachés

Autres dettes (**) 1 324 542 1 324 542

Produits constatés d’avance 30 458 30 458

Total 19 647 567 7 147 567 12 500 000

(*) Emprunts souscrits en cours d’exercice 12 500 000

(*) Emprunts remboursés sur l’exercice

(**) Dont envers les associés

Charges d'exploitation

Charges Financières

Charges Exceptionnelles

Charges constatées d avance 34 929

Total 34 929

Produits d'exploitation

Produits Financiers

Produits Exceptionnels

Produits constatés d avance 30 458

Total 30 458

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8.8. Charges à payer

Les factures non parvenues groupe correspondent aux re-facturations liées à la ré-allocation des coûts écoulant de la politique de prix de transfert exposée plus avant au paragraphe 4.1.

8.9. Produits a recevoir

8.10. Charges et produits exceptionnels

8.11. Composition du capital social

Montant

Fournisseurs – fact. non parvenues 625 819

Fournisseur fact non parv Emobility 48 662

Frs factures non parv. Elvi Energy 3 526 872

Personnel autres ch. à payer Emobility 40 732

Etat – autres charges à payer 58 444

Total 4 300 529

Montant

Fact client EPS Man. à établir 316 066

Fact client Elvi Energy à établir 4 126 130

Fact à établir clients Emobility 1 100 957

Total 5 543 153

Charges Produits

Pénalités Emobility 89

Provisions pour risques et charges 929 150

TOTAL 929 239 -

Nombre Valeur nominale

Titres composant le capital social au début de l’exercice 12 766 860 0,20

Titres émis pendant l’exercice

Titres remboursés pendant l’exercice

Titres composant le capital social à la f in de l’exercice 12 766 860 0,20

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8.12. Effectif

8.13. Variation des capitaux propres

8.14. Répartition du chiffre d'affaires

En l'état du développement de la société, le chiffre d'affaires réalisé au cours de l'exercice résulte :

• de la facturation du projet au Chili, soit 7.195 €

• du chiffre d’affaires réalisé par la succursale italienne Mobility, soit 849.261 €

• de la re-facturation de prestations diverses au profit des filiales du groupe, soit 4.567.800 €

Personnel salarié

Personnel mis à disposition

Employés 7,00

Total 7,00

Solde au 01/01/2019 Augmentations Diminutions

Solde au 31/12/2019

Capital 2 553 372 2 553 372

Primes d’émission 83 811 019 83 811 019

Report à Nouveau (7 966 221) (2 386 605) (10 352 826)

Résultat de l’exercice 0 (13 831 595) (13 831 595)

Total Capitaux Propres 78 398 170 (16 218 200) 0 62 179 970

France Etranger Total

Ventes de produits f inis 236 260 236 260

Prestations de services 5 167 116 5 167 116

Produits des activités annexes 20 880 20 880

TOTAL - 5 424 256 5 424 256

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8.15. Filiales et participations

La filiale MCM ENERGY LAB est détenue à 70% par notre société, et à 30% par la filiale EPS ELVI ENERGY. Pour rappel, la liquidation de la filiale MCM ENERGY LAB a été décidée en décembre 2019 et la procédure de liquidation s’est achevée en janvier 2020.

8.16. Situation fiscale différée et latente

Capital social

Capitaux propres

Quote-part du capital

détenue en %

Valeur comptable brute des

titres

Valeur comptable nette des

titres

Chiffre d'affaires

Résultat du dernier exercice

clos

– Filiales (détenues à + 50 %)

EPS ELVI ENERGY 1 000 000 (11 909 770) 100 3 875 901 2 725 901 19 346 600 (12 698 062)

MCM ENERGY LAB 50 000 127 508 70 315 000 89 117 17 740 14 545

EPS MANUFACTURING 1 004 255 1 964 932 100 43 778 687 31 674 063 1 723 059 540 634

- Participations (détenues à + 10%)

COMORES ENERGIES NOUVELLES 2 033 NS 49 996 996 NS NS

Montant

Accroissements de la dette future d’impôt

Liés à d’autres éléments

Allègements de la dette future d’impôt

Liés aux provisions et charges à payer non déductibles de l’exercice 11 244 410


Ecart de conversion passif

Total des bases concourant à diminuer la dette future 11 244 410

Déficits reportables 9 852 008

Estimation du montant de la créance future 2 758 562

Base = Déficits reportablesImpôt valorisé au taux de 28 % pour les exercices ouverts à compter du 1/01/2020

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8.17. Engagements donnés

8.18. Engagements reçus

Par lettre en date du 20 juin 2019, l’actionnaire principal ENGIE a confirmé son soutien financier à la société : Financement industriel et fonds de roulement : ENGIE a confirmé sa volonté d’accorder un prêt pour un montant compris entre 10 et 15 millions d’euros (selon les prévisions de développement), pour couvrir les besoins des 18 mois à venir. Une seconde tranche qui ne pourrait excéder 25 millions d’euros pourrait être accordée d’ici fin 2020, en fonction des prévisions révisées. Support financier : ENGIE a confirmé sa volonté de soutien en crédit jusqu’à 20 millions d’euros, accordé au cas par cas, pour supporter la société dans l’établissement de lettres de facilités de crédit bancaire, ainsi que son soutien, en sa qualité de société mère, jusqu’à 20 millions d’euros à accorder au cas par cas selon les garanties de performance émises, afin de soutenir les contrats EPC. Les deux montants pourraient être révisés à la hausse jusqu’à 40 millions d’euros chacun, selon l’évolution effective des activités.

Montant en euros

Caution de la f iliale Elvi Energy au profit d’Intesa Sanpaolo 2 000 000


Caution de la f iliale Elvi Energy au profit d’Intesa Sanpaolo 100 000

Caution de la f iliale Elvi Energy au profit d’UniCredit 3 931 200

Caution de la f iliale Elvi Energy au profit de Banca Sella 1 000 000Caution de la f iliale Electro Pow er Systems Manufacturing au profit de Mediocredito It (Intesa Sanpaolo)

3 500 000

Avals et cautions 11 931 200

Total 11 931 200

Dont concernant :

Les f iliales 11 931 200

338

ANNEX 4 Report of the statutory auditors on Statutory FY 2019

Report of the statutory auditors on the Company’s Accounts for the financial year ended on 31 December 2019

ENGIE EPS S.A. Exercice clos le 31 décembre 2019

Rapport des commissaires aux comptes sur les comptes annuels


75007 Paris


régionale de Paris

BDO Paris Audit & advisory S.A.R.L. 43-47 avenue de la Grande Armée

75116 Paris


régionale de Paris


Rapport des commissaires aux comptes sur les comptes annuels

A l’Assemblée Générale des actionnaires de la société ENGIE EPS S.A.,

Opinion

En exécution de la mission qui nous a été confiée par votre assemblé générale, nous avons effectué l’audit des comptes annuels de la société ENGIE EPS S.A. relatifs à l’exercice clos le 31 décembre 2019, tels qu’ils sont joints au présent rapport.

Nous certifions que les comptes annuels sont, au regard des règles et principes comptables français, réguliers et sincères et donnent une image fidèle du résultat des opérations de l’exercice écoulé ainsi que de la situation financière et du patrimoine de la société à la fin de cet exercice.

L’opinion formulée ci-dessus est cohérente avec le contenu de notre rapport au comité d’audit.

Fondement de l’opinion

Référentiel d’audit

Nous avons effectué notre audit selon les normes d’exercice professionnel applicables en France. Nous estimons que les éléments que nous avons collectés sont suffisants et appropriés pour fonder notre opinion.

Les responsabilités qui nous incombent en vertu de ces normes sont indiquées dans la partie « Responsabilités des commissaires aux comptes relatives à l’audit des comptes annuels » du présent rapport.

ENGIE EPS S.A. Rapport des commissaires aux comptes sur les comptes annuels Exercice clos le 31 décembre 2019

ENGIE EPS S.A. 2

Indépendance

Nous avons réalisé notre mission d’audit dans le respect des règles d’indépendance qui nous sont applicables, sur la période du 1er janvier 2019 à la date d’émission de notre rapport, et notamment nous n’avons pas fourni de services interdits par l’article 5, paragraphe 1, du règlement (UE) n° 537/2014 ou par le code de déontologie de la profession de commissaire aux comptes.

Justification des appréciations – Points clés de l’audit

En application des dispositions des articles L. 823-9 et R. 823-7 du code de commerce relatives à la justification de nos appréciations, nous portons à votre connaissance les points clés de l’audit relatifs aux risques d'anomalies significatives qui, selon notre jugement professionnel, ont été les plus importants pour l’audit des comptes annuels de l’exercice, ainsi que les réponses que nous avons apportées face à ces risques.

Les appréciations ainsi portées s’inscrivent dans le contexte de l’audit des comptes annuels pris dans leur ensemble et de la formation de notre opinion exprimée ci-avant. Nous n’exprimons pas d’opinion sur des éléments de ces comptes annuels pris isolément.

Dépréciation des titres de participation

ENGIE EPS S.A. détient 100% des entités EPS ELVI, EPS Manufacturing ainsi qu’une participation dans MCM et COMOROS ENERGIES NOUVELLES représentant un total net de 34.5 Meuros au bilan. Suite à la refonte du business plan du groupe pour la période 2020-2025, la valeur de participation dans EPSM est un point clé de l’audit. Dans le cadre de notre examen des comptes sociaux d’ENGIE EPS S.A.au 31 décembre 2019, nous devons nous assurer que la valeur comptable de ces participations n’est pas supérieure à leur valeur d’utilité.

Notre réponse

Notre approche d’audit a consisté à réaliser des tests de dépréciation en vérifiant notamment les plans d’affaires de chaque entité ainsi que les hypothèses et méthodes retenues pour l’évaluation des participations.

La note 7.1 « Participations et autres titres » de l’annexe des comptes expose notamment les règles et méthodes comptables relatives à la valeur comptabilisée des titres de participation. Dans le cadre de notre appréciation des règles et principes comptables suivis par votre société, nous avons vérifié le caractère approprié des méthodes comptables visées ci-dessus et des informations fournies dans l’annexe des comptes et nous nous sommes assurés de leur correcte application.

Vérifications spécifiques

Nous avons également procédé, conformément aux normes d’exercice professionnel applicables en France, aux vérifications spécifiques prévues par les textes légaux et règlementaires.


ENGIE EPS S.A. 3

Informations données dans le rapport de gestion et dans les autres documents sur la situation financière et les comptes annuels adressés aux membres de l’Assemblée Générale.

Nous n'avons pas d'observation à formuler sur la sincérité et la concordance avec les comptes annuels des informations données dans le rapport de gestion du Conseil d’Administration et dans les autres documents sur la situation financière et les comptes annuels adressés aux membres de l’Assemblée Générale.

Nous attestons de la sincérité et de la concordance avec les comptes annuels des informations relatives aux délais de paiement mentionnées à l'article D.441-4 du code de commerce.

Rapport sur le gouvernement d’entreprise

Nous attestons de l’existence, dans le rapport du Conseil d’Administration sur le gouvernement d’entreprise, des informations requises par les articles L.225-37-3 et L.225-37-4 du code de commerce.

Concernant les informations fournies en application des dispositions de l’article L.225-37-3 du code de commerce sur les rémunérations et avantages versés aux mandataires sociaux ainsi que sur les engagements consentis en leur faveur, nous avons vérifié leur concordance avec les comptes ou avec les données ayant servi à l’établissement de ces comptes et, le cas échéant, avec les éléments recueillis par votre société auprès des entreprises contrôlées par elle qui sont comprises dans le périmètre de consolidation. Sur la base de ces travaux, nous attestons l’exactitude et la sincérité de ces informations.

Concernant les informations relatives aux éléments que votre société a considéré susceptibles d’avoir une incidence en cas d’offre publique d’achat ou d’échange, fournies en application des dispositions de l’article L.225-37-5 du code de commerce, nous avons vérifié leur conformité avec les documents dont elles sont issues et qui nous ont été communiqués. Sur la base de ces travaux, nous n'avons pas d'observation à formuler sur ces informations.

Informations résultant d'autres obligations légales et réglementaires

Désignation des commissaires aux comptes

Nous avons été nommés commissaires aux comptes de la société ENGIE EPS S.A. par l’assemblée générale des actionnaires du 6 mars 2015 pour le cabinet RBB Business advisors et du 21 juin 2016 pour le cabinet BDO Paris Audit & advisory. Au 31 décembre 2019, le cabinet BDO Paris Audit & advisory était dans la 4ème année de sa mission sans interruption et le cabinet RBB Business advisors dans la 5ème année, dont respectivement 4 et 5 années depuis que les titres de la société ont été admis aux négociations sur un marché réglementé.

Responsabilités de la direction et des personnes constituant le gouvernement d’entreprise relatives aux comptes annuels

Il appartient à la direction d’établir des comptes annuels présentant une image fidèle conformément aux règles et principes comptables français ainsi que de mettre en place le contrôle interne qu'elle estime nécessaire à l'établissement de comptes annuels ne comportant pas d'anomalies significatives, que celles-ci proviennent de fraudes ou résultent d'erreurs.


ENGIE EPS S.A. 4

Lors de l’établissement des comptes annuels, il incombe à la direction d’évaluer la capacité de la société à poursuivre son exploitation, de présenter dans ces comptes, le cas échéant, les informations nécessaires relatives à la continuité d’exploitation et d’appliquer la convention comptable de continuité d’exploitation, sauf s’il est prévu de liquider la société ou de cesser son activité.

Il incombe au comité d’audit de suivre le processus d’élaboration de l’information financière et de suivre l'efficacité des systèmes de contrôle interne et de gestion des risques, ainsi que le cas échéant de l'audit interne, en ce qui concerne les procédures relatives à l'élaboration et au traitement de l'information comptable et financière.

Les comptes annuels ont été arrêtés par le Conseil d’Administration.

Responsabilités des commissaires aux comptes relatives à l’audit des comptes annuels

Objectif et démarche d’audit

Il nous appartient d’établir un rapport sur les comptes annuels. Notre objectif est d’obtenir l’assurance raisonnable que les comptes annuels pris dans leur ensemble ne comportent pas d’anomalies significatives. L’assurance raisonnable correspond à un niveau élevé d’assurance, sans toutefois garantir qu’un audit réalisé conformément aux normes d’exercice professionnel permet de systématiquement détecter toute anomalie significative. Les anomalies peuvent provenir de fraudes ou résulter d’erreurs et sont considérées comme significatives lorsque l’on peut raisonnablement s’attendre à ce qu’elles puissent, prises individuellement ou en cumulé, influencer les décisions économiques que les utilisateurs des comptes prennent en se fondant sur ceux-ci.

Comme précisé par l’article L. 823-10-1 du code de commerce, notre mission de certification des comptes ne consiste pas à garantir la viabilité ou la qualité de la gestion de votre société.

Dans le cadre d’un audit réalisé conformément aux normes d’exercice professionnel applicables en France, le commissaire aux comptes exerce son jugement professionnel tout au long de cet audit.

En outre :

- il identifie et évalue les risques que les comptes annuels comportent des anomalies significatives, que celles-ci proviennent de fraudes ou résultent d’erreurs, définit et met en œuvre des procédures d’audit face à ces risques, et recueille des éléments qu’il estime suffisants et appropriés pour fonder son opinion. Le risque de non-détection d’une anomalie significative provenant d’une fraude est plus élevé que celui d’une anomalie significative résultant d’une erreur, car la fraude peut impliquer la collusion, la falsification, les omissions volontaires, les fausses déclarations ou le contournement du contrôle interne ;

- il prend connaissance du contrôle interne pertinent pour l’audit afin de définir des procédures d’audit appropriées en la circonstance, et non dans le but d’exprimer une opinion sur l’efficacité du contrôle interne ;

- il apprécie le caractère approprié des méthodes comptables retenues et le caractère raisonnable des estimations comptables faites par la direction, ainsi que les informations les concernant fournies dans les comptes annuels ;


ENGIE EPS S.A. 5

- il apprécie le caractère approprié de l’application par la direction de la convention comptable de continuité d’exploitation et, selon les éléments collectés, l’existence ou non d’une incertitude significative liée à des événements ou à des circonstances susceptibles de mettre en cause la capacité de la société à poursuivre son exploitation. Cette appréciation s’appuie sur les éléments collectés jusqu’à la date de son rapport, étant toutefois rappelé que des circonstances ou événements ultérieurs pourraient mettre en cause la continuité d’exploitation. S’il conclut à l’existence d’une incertitude significative, il attire l’attention des lecteurs de son rapport sur les informations fournies dans les comptes annuels au sujet de cette incertitude ou, si ces informations ne sont pas fournies ou ne sont pas pertinentes, il formule une certification avec réserve ou un refus de certifier ;

- il apprécie la présentation d’ensemble des comptes annuels et évalue si les comptes annuels reflètent les opérations et événements sous-jacents de manière à en donner une image fidèle.

Rapport au comité d’audit

Nous remettons au comité d’audit un rapport qui présente notamment l’étendue des travaux d'audit et le programme de travail mis en œuvre, ainsi que les conclusions découlant de nos travaux. Nous portons également à sa connaissance les faiblesses significatives du contrôle interne que nous avons identifiées pour ce qui concerne les procédures relatives à l’élaboration et au traitement de l’information comptable et financière.

Parmi les éléments communiqués dans le rapport au comité d’audit, figurent les risques d’anomalies significatives que nous jugeons avoir été les plus importants pour l’audit des comptes annuels de l’exercice et qui constituent de ce fait les points clés de l’audit, qu’il nous appartient de décrire dans le présent rapport.

Nous fournissons également au comité d’audit la déclaration prévue par l’article 6 du règlement (UE) n° 537-2014 confirmant notre indépendance, au sens des règles applicables en France telles qu’elles sont fixées notamment par les articles L. 822-10 à L. 822-14 du code de commerce et dans le code de déontologie de la profession de commissaire aux comptes. Le cas échéant, nous nous entretenons avec le comité d'audit des risques pesant sur notre indépendance et des mesures de sauvegarde appliquées.





erp

Tampon

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1. BILAN

ACTIF Brut Amortiss.Dépréciations 31/12/2019 31/12/2018

Immobilisations incorporelles Frais d'établissement Frais de recherche et de développement Concessions, brevets et droits assimilés 115 210 59 682 55 527 75 817 Fonds commercial 213 538 213 538 - 213 538 Autres immobilisations incorporelles 401 910 27 602 374 309 374 190 Immobilisations corporelles Terrains Constructions Installations techniques, matériel et outillage Autres immobilisations corporelles Immob. en cours / Avances & acomptes Immobilisations financières Participations et créances rattachées 59 891 379 13 480 457 46 410 922 57 637 996 Autres titres immobilisés Prêts Autres immobilisations financières 419 419 300 TOTAL ACTIF IMMOBILISE 60 622 456 13 781 279 46 841 177 58 301 841 Stocks et En–Cours Matières premières et autres approv. En cours de production de biens En cours de production de services Produits intermédiaires et finis 374 850 374 850 374 850 Marchandises Avances Avances et acomptes versés sur commandes Créances Clients et comptes rattachés 9 275 278 288 210 8 987 068 4 827 192 Fournisseurs débiteurs 60 60 3 510 Personnel Etat, Impôts sur les bénéfices Etat, Taxes sur le chiffre d'affaires 180 405 180 405 254 502 Autres créances 23 100 174 136 662 22 963 513 10 573 355 Divers Valeurs mobilières de placement Disponibilités 3 134 575 3 134 575 8 061 370 Comptes de Régularisation Charges constatées d'avance 34 929 34 929 43 398 ACTIF CIRCULANT 36 100 271 424 872 35 675 399 24 138 177 Charges à répartir sur plusieurs exercices Prime de remboursement des obligations Ecarts de conversion - Actif 9 286 9 286 TOTAL ACTIF 96 732 013 14 206 151 82 525 862 82 440 018

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PASSIF 31/12/2019 31/12/2018 Capital social ou individuel 2 553 372 2 553 372 Primes d'émission, de fusion, d'apport, ... 83 811 019 83 811 019 Ecarts de réévaluation Réserve légale Réserves statutaires ou contractuelles Réserves réglementées Autres réserves Report à nouveau (10 352 826) (7 966 221) Résultat de l'exercice (13 831 595) (2 386 604) Subventions d'investissement Provisions réglementées TOTAL CAPITAUX PROPRES 62 179 970 76 011 565 Produits des émissions de titres participatifs Avances conditionnées AUTRES FONDS PROPRES Provisions pour risques 698 326 Provisions pour charges PROVISIONS POUR RISQUES ET CHARGES 698 326 Dettes Financières Emprunts obligataires convertibles Autres emprunts obligataires Emprunts/dettes auprès des établissements de crédits 12 500 000 Emprunts et dettes financières diverses Emprunts et dettes financières diverses - Associés 15 000 113 772 Avances et acomptes reçus sur commandes en cours Dettes d’exploitation Dettes fournisseurs et comptes rattachés 5 416 747 4 407 786 Dettes fiscales et sociales 375 820 382 905 Dettes diverses Dettes sur immobilisations et comptes rattachés Autres dettes 1 309 542 1 488 194 Compte de régularisation Produits constatés d'avance 30 458 34 953 DETTES 19 647 566 6 427 609 Ecarts de conversion - Passif 843 TOTAL PASSIF 82 525 862 82 440 017

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2. Compte de résultat

31/12/2019 31/12/2018Produits d’exploitation France ExportationsVentes de marchandisesProduction vendue (biens) 236,260 236,260 776,457Production vendue (services) 5,187,996 5,187,996 2,410,695Chiffre d’affaires net - 5,424,256 5,424,256 3,187,152 Production stockée 374,850 Production immobiliséeSubventions d’exploitation

Autres produits 4,773 719 Total produits d’exploitation 5,429,029 3,562,721 Charges d’exploitation Achats de marchandisesVariations de stock

112,804 764,031 Variations de stockAutres achats et charges externes 5,790,246 4,539,889 Impôts, taxes et versements assimilés 3,759 713 Salaires et traitements 453,439 528,990 Charges sociales 205,716 176,194 Dotations aux amortissements et dépréciations :– Sur immobilisations : dotations aux amortissements 61,477 12,933 – Sur immobilisations : dotations aux dépréciations– Sur actif circulant : dotations aux dépréciations 288,210 – Pour risques et charges : dotations aux provisionsAutres charges 359,407 361,517 Total charges d’exploitation (II) 7,275,058 6,384,267 RESULTAT D’EXPLOITATION (I–II) - 1,846,029 - 2,821,546

Bénéfice attribué ou perte transférée (III)Perte supportée ou bénéfice transféré (IV)Produits financiersDe participation 276,942 85,600

Autres intérêts et produits assimilés

Différences positives de change

Total produits financiers (V) 276,942 85,600 Charges financières

11,227,074 Intérêts et charges assimilées (4) 106,195 Différences négatives de change 4,059

Total charges financières (VI) 11,333,269 4,059 RESULTAT FINANCIER (V–VI) - 11,056,327 81,541

- 12,902,356 - 2,740,005 Produits exceptionnelsSur opérations de gestion Sur opérations en capital

358,000 Total produits exceptionnels (VII) - 358,000 Charges exceptionnellesSur opérations de gestion 929,240 Sur opérations en capital 224

4,376 Total charges exceptionnelles (VIII) 929,240 4,600 RESULTAT EXCEPTIONNEL (VII–VIII) - 929,240 353,400 Total des produits (I+III+V+VII) 5,705,972 4,006,321 Total des charges (II+IV+VI+VIII+IX+X) 19,537,567 6,392,925 BENEFICE OU PERTE - 13,831,595 - 2,386,604


Charges nettes sur cessions de valeurs mobilières de placement

RESULTAT COURANT avant impôts (I–II+III–IV+V–VI)

Reprises sur provisions et dépréciation et transferts de charges


Produits nets sur cessions de valeurs mobilières de placement

Reprises sur provisions (et amortissements), transferts de charges

Achats de matières premières et autres approvisionnements

Quotes–parts de résultat sur opérations faites en commun

D’autres valeurs mobilières et créances de l’actif immobilisé

Reprises sur provisions et dépréciations et transferts de charges

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3. Annexe

Au bilan avant répartition de l'exercice clos le 31/12/2019, dont le total est de 82.525.862 € et au compte de résultat de l'exercice, présenté sous forme de liste, dont le total est de 19.537.567 € dégageant un résultat net comptable de –13.831.595 €.

L’exercice a une durée de 12 mois, recouvrant la période du 01/01/2019 au 31/12/2019. Les notes ou tableaux ci–après font partie intégrante des comptes annuels.

Ces comptes annuels ont été établis par le Conseil d’Administration.

Nous n'avons pas mentionné les notes ou les tableaux qui ne trouvent pas leur application ou ne sont pas significatifs pour notre entreprise.

Aucun changement de méthode n’a été relevé au cours de l’exercice.

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4. Faits caractéristiques de l’exercice

4.1. Politique de prix de transfert au sein du Groupe :

Au cours de l'exercice, la société a poursuivi les modalités d'imputation des coûts liés aux fonctions de support définies en 2016 (fonctions, rôles et responsabilités affectés au personnel d'une ou plusieurs sociétés du Groupe en faveur de toutes les entités du périmètre). La réallocation des coûts découlant de la politique de prix de transfert a été opérée dans le respect des conditions de marché et de la réglementation française et italienne. Les fonctions d'entreprise affectées au bénéfice des différentes sociétés du Groupe (Business Development, Business Intelligence, Administration & Finance, Communication, Service juridique, compliance et RH) sont affectées à des centres de coûts spécifiques et peuvent être supportées par la société Mère ENGIE EPS SA ou par ses filiales. Dans ce dernier cas, la quote-part des charges de fonctions de support supportée par les filiales est en premier lieu refacturée sans marge à la société Mère ENGIE EPS SA et affectée au centre de coût spécifique pour être incorporée dans le coût total des fonctions communes. Le coût total des fonctions communes est ensuite réparti entre les sociétés du Groupe selon un critère cohérent et homogène, à des conditions de marché. Les critères d'allocation choisis sont objectifs et mesurables. Les clés de répartition sont appliquées de manière homogène à toutes les entités et permettent de mettre en corrélation les coûts alloués et les revenus. Dans le respect de la réglementation fiscale française et italienne, ainsi que du principe de pleine concurrence, la refacturation des charges des fonctions communes par la société Mère ENGIE EPS SA aux sociétés du Groupe s’est effectuée en appliquant une marge de 5%.

4.2. Plan d’intéressement, modifications au sein du conseil d’administration, et financement du groupe :

Conformément au Plan d’Intéressement qui avait été adopté le 6 mars 2018, les options de souscription d’actions ou les Bons de Souscription d’actions qui n’avaient pas été exercés ou levés à cette date avaient été remplacés par des SARs. Le Plan d’Intéressement 2018 c’est normalement poursuivi en 2019. Le 25 juin 2019, un nouveau conseil d’administration a été nommé : Thierry Kalfon (Président du conseil), Carlalberto Guglielminotti (Directeur Général), Massimo Prelz Oltramonti, Giuseppe Artizzu, Cristina Tomassini, Elise Collange, Romuald Cirillo, Anne Harvengt et Csilla Köhalmi-Monfils. À la date des présents états financiers, le conseil d’administration est composé des dix membres suivants :

• Thierry Kalfon, Président • Carlalberto Guglielminotti, Directeur Général

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• Massimo Prelz Oltramonti, Directeur • Jean Rappe, Directeur • Anne Harvengt, Directrice • Giuseppe Artizzu, Directeur • Romualdo Cirillo, Directeur • Csilla Köhalmi-Monfils, Directrice • Cristina Tomassini, Directrice • Elise Collange, Directrice

En ce qui concerne le financement du groupe, le société a obtenu de la Société Générale un financement de 7,5 millions d'euros en juin 2019, puis 15 millions d'euros en décembre 2019, sous forme de lignes de crédit remboursables sur une période de 4 ans, afin de financer les besoins en fonds de roulement, les coûts de développement capitalisés et les investissements au niveau du Groupe.

4.3. Information sur les instruments dilutifs et le risque de dilution :

Les mandataires sociaux, les membres de la direction et les salariés de la Société ne détiennent aucune participation dans le capital de la Société et il n'existe aucun titre en circulation donnant droit à leurs détenteurs d'accéder au capital de la Société. L’allocation des SARs au Directeur Général, Président du Conseil d’Administration et aux membres du Conseil d’Administration remplaçant les options non levées était décrite au paragraphe 15.5 du Document de Référence 2017. En application du plan d’intéressement 2018, les stock-options et BSA alors non levés avaient été remplacés en 2018 par des SARs allouées individuellement et les membres du management du Groupe ont reçu des SARs additionnelles. Par ailleurs, suite à l’accord de remboursement par anticipation du financement intervenu en 2018, la BEI avait apporté les 660.513 bons de souscription d’actions liés à la première tranche, finalement étendue par ENGIE. En conséquence, à la clôture de l’exercice, il ne demeure plus aucun risque de dilution relatif aux options ou bons de souscription.

4.4. Evolution des filiales et participations :

Les participations dans les filiales existantes au 31 décembre 2018 demeurent sans modification à la clôture de l’exercice. Il convient cependant de signaler que la liquidation de la filiale MCM a été décidée en décembre 2019. La procédure de liquidation s’est achevée en janvier 2020. La société n’a acquis aucune filiale au cours de l’exercice. La valeur comptable brute des immobilisations financières correspond au coût historique d’acquisition ou à la valeur d’apport. A la fin de chaque exercice, la société détermine s’il existe un indice de perte de valeur de ses titres, et une dépréciation est comtabilisée si la valeur comptable est supérieure à la valeur d’utilité. Pour mesurer la valeur d’utilité, les flux de trésorerie futurs sont actualisés à la valeur actuelle en appliquant un taux d’escompte qui reflère les estimations actuellement en vigueur sur le marché de la valeur temps de l’argent et des risques spécifiques.

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Les pertes de valeur sont comptabilisées dans le compte de résultat, ainsi des dotations aux provisions pour dépréciation ont été comptabilisée à la clôture de l’exercice pour les titres suivants : • 11.001.241 € pour les titres de la filiale Electro Power Manufacturing ;

• 225.833 € pour les titres de la filiale MCM.

Au 31 décembre 2019, les provisions pour dépréciation des titres s’élèvent en conséquence à : • 12.104.624 € en ce qui concerne la filiale Electro Power Manufacturing ;


• 225.833 € en ce qui concerne la filiale MCM.

4.5. Evolution de la succursale établie en Italie :

Le 2 novembre 2017, la société avait acquis auprès de sa filiale ELVI ENERGY la branche d’activité « Mobility & Power Electronics Lab » dont l’établissement stable est basé en Italie, pour la somme de 814.600 €. Sur la base de la clause de révision de prix prévue à l’acte, un ajustement de prix avait été constaté pour 62.122 € en fonction de la situation nette au 31/10/2017, portant le prix d’acquisition définitif à 876.122 €. Le fonds de commerce de cette branche d’activité avait par conséquent été évalué à 213.538 €. Compte tenu de la cession du principal contrat intervenue début 2020 pour un montant total de 965.000 €, et dans la mesure où le fonds n’est pas valorisé dans le cadre de cette cession, une provision pour dépréciation a été comptabilisée à la clôture de l’exercice pour 213.538 €. Les principaux éléments de résultat de cette succursale, inclus dans le résultat global de la société, sont les suivants :

COMPTE DE RESULTAT 31/12/2019 31/12/2018

Durée 12 mois 12 moisChiffre d'affaires net (hors taxes) 849 261 467 016

Production stockée et immobilisée 374 850

Coût des achats et charges externes 194 639 643 679

VALEUR AJOUTEE 654 622 198 187

Charges de personnel 642 470 682 430

EXCEDENT BRUT D'EXPLOITATION 12 152 -484 243Autres produits 4 670 61

Dotations aux amortissements et provisions 0 0

Autres charges 96 323 60

RESULTAT D'EXPLOITATION -79 502 -484 241Résultat f inancier 0 0

Résultat exceptionnel -911 954

RESULTAT NET -991 456 -484 241

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4.6. Engagements en matière de retraite :

Le montant des engagements de retraite relatifs au personnel salarié de la succursale italienne est de 161.486 € à la clôture de l’exercice.

4.7. Changement de dénomination sociale - Transfert de siège social :

Par assemblée en date du 25 juin 2019, il a été décidé de modifier la dénomination sociale de la société et d’adopter comme nouvelle dénomination sociale « ENGIE EPS ». En date du 30 septembre 2019, le Conseil d’administration a décidé de transférer le siège social de la société au 28 rue de Londres, 75009 PARIS, à effet du 1er octobre 2019.

4.8. Vérification de comptabilité :

La société a fait l’objet d’une vérification de comptabilité qui a débuté le 18 septembre 2019. Cette vérification s’est terminée le 13 février 2020. Aucune proposition de rectification n’a été émise par l’Administration fiscale.

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5. Evènements postérieurs à la clôture de l’exercice

La recharge électrique facile de FCA fait ses débuts avec Easy Wallbox™ par ENGIE Eps : le 26 février 2020, a présenté avec FCA le "Easy Wallbox™, breveté par ENGIE Eps, exclusivement pour FCA. Ce produit est le seul coffret mural qui ne nécessite pas d'installation par un installateur ou un électricien pour fonctionner jusqu'à 2,2 kW et jusqu'à 7,4 kW. Datant de 2017, le partenariat entre ENGIE Eps et Fiat Chrysler Automobiles vise à gérer au mieux les changements et à coordonner tous les travaux liés à la mobilité électrique. Microgrid en Californie : avec le contrat signé en janvier 2020, le groupe ENGIE EPS a conclu un accord en tant que contractant pour l'ingénierie, la fourniture d'approvisionnement et la mise en service du système de stockage d'énergie par batterie de 2,0 MVA/4,0 MWh qui sera intégré à Anza Microgrid (Californie), composé d'une centrale PV existante de 2,0 MWp et d'une extension supplémentaire de 1,35 MWp. La mise en service et l'achèvement du projet sont prévus pour le quatrième trimestre 2020.

Le PDG d'ENGIE EPS nommé Jeune leader mondial par le Forum économique mondial : le 12 mars 2020, le PDG d'ENGIE Eps, Carlalberto Guglielminotti, a été reconnu comme Jeune leader mondial par le Forum économique mondial pour sa capacité à innover et à promouvoir un changement durable. Carlalberto Guglielminotti a été identifié comme l'un des dirigeants de moins de 40 ans les plus prometteurs et les plus convaincants du monde pour ses réalisations dans le secteur industriel, son engagement à promouvoir un changement positif par le biais de la technologie et pour ses succès dans le renforcement de l'utilisation des énergies renouvelables dans le monde entier. Depuis février 2020, l'Europe est l'un des continents les plus durement touchés par le Covid-19, et les gouvernements ont imposé les mesures les plus drastiques jamais prises par des états pour contenir l'augmentation du nombre de cas de coronavirus, plaçant les pays sous quarantaine. La direction d’ENGIE EPS essaie de minimiser l'impact sur les affaires et les opérations généré par les fortes restrictions imposées en Europe et en particulier en Italie et les conséquences qui en découlent pour ses sites, projets, clients et fournisseurs - en termes généraux de résultats financiers - en publiant et en mettant constamment à jour la politique COVID-19 (Business Continuity and Emergency Management Plan). Le 21 juin 2019, ENGIE EPS annonçait un objectif de chiffre d’affaires révisé de 40 millions d'euros pour 2020 et de 100 millions d'euros pour 2022. Était également annoncée une ambition indicative pour 2025 de 400 millions d'euros de chiffre d’affaires dans le cadre du Plan Stratégique à Long Terme. Alors qu’il est attendu que le Pipeline génère un chiffre d’affaires à compter de 2021, l'objectif pour 2020 reposait principalement sur des projets passant du pool d'opportunités au Pipeline, puis au Carnet de Commandes au plus tard en 2019, et générant, à terme, du chiffre d’affaires en 2020. Comme décrit ci-dessus, certains projets n'ont pas été attribués à ENGIE, comme l'appel d'offres pour de nouvelles capacités en France, certains autres sont retardés (aux États-Unis et dans les îles du Pacifique), d'autres ne se sont pas concrétisés pour ENGIE EPS, comme les appels d’offres en Inde et en Afrique du Nord ou le rôle de fournisseur clé en main pour de grands projets industriels qu’ENGIE EPS avait planifié dans le secteur de l'e-mobilité. En outre, l'épidémie de COVID-19 a un impact important sur les opérations industrielles d'ENGIE EPS et sur ses perspectives à court terme. Les opérations d'ENGIE EPS et la majorité de sa chaîne d'approvisionnement sont basées en Italie, pays qui se trouve actuellement à l'épicentre de l'épidémie européenne. Le 8 mars, le gouvernement italien a imposé les mesures les plus drastiques jamais prises par des pays, à l'exception de la Chine, pour contenir l'augmentation du nombre de cas de COVID-19, plaçant presque immédiatement en quarantaine la région de Lombardie (où ENGIE EPS possède deux installations industrielles) et plus d'une douzaine d'autres provinces des régions voisines. Les restrictions ont été étendues à l'ensemble du pays le 10 mars, et se sont ensuite traduites par un confinement généralisé. En outre, les restrictions de voyage dans le monde entier limitent la capacité d'ENGIE EPS à matérialiser son effort de développement de projets, en particulier pour les grandes procédures d'appel d'offres. Alors que la situation continue d’évoluer, ENGIE EPS n'est actuellement pas en mesure de quantifier l'impact négatif, les conséquences connexes pour sa chaîne d'approvisionnement et ses chantiers dans le monde entier (Italie, Mexique, Californie, Singapour, Comores et Grèce), ni les scénarios pour ses projets en cours de développement (Europe, Afrique du Sud, Moyen-Orient, États-Unis et îles du Pacifique). Par conséquent, les différents scénarios de reconnaissance en chiffre d’affaires en 2020, présentés par la

13

direction et analysés par le Conseil d'administration du 19 mars 2020, sont sujets à une volatilité importante. Tout ce qui précède a un impact certain sur les objectifs d'ENGIE EPS pour 2020 et se répercute sur le calendrier de mise en œuvre du Plan Stratégique à Long Terme au-delà de 2020. À plus long terme, ENGIE EPS, en collaboration avec ENGIE en tant qu’actionnaire majoritaire et partenaire industriel, reste totalement engagé dans la mise en oeuvre du Plan Stratégique à Long Terme et dans son ambition indicative de 400 millions d'euros de chiffre d’affaires pour 2025, étant entendu que la réalisation de ce plan nécessitera une amélioration de l'environnement économique actuel fortement pénalisé par la pandémie mondiale de coronavirus. De plus, la réussite de la mise en œuvre du Plan Stratégique à Long Terme dépend de manière critique de (i) la priorité accordée par ENGIE EPS et ENGIE aux efforts et à l'allocation des ressources sur les marchés où le stockage est le plus prometteur, par exemple avec une réglementation favorable et des appels d'offres déjà annoncés pour lesquels les deux groupes disposent d'un avantage compétitif, (ii) le soutien d'ENGIE à ENGIE EPS dans des projets qui ont du sens pour les deux entreprises, et (iii) la réussite des deux partenaires dans l'obtention et l'exécution de projets. Aucun autre événement ultérieur n'a été enregistré au moment de la publication de ce document.

14

6. Autres informations

Périmètre de consolidation : Aucun changement dans le périmètre de consolidation n’est intervenu au cours de l’exercice. La société ENGIE EPS consolide selon la méthode de l'intégration globale les comptes des filiales suivantes :

Electro Power Systems Manufacturing Srl, société à responsabilité limitée au capital de 1.004.255 € détenue à 100% ;

Elvi Energy Srl, société à responsabilité limitée au capital de 1.000.000 € détenue à 100% ;

MCM Energy Lab Srl, société à responsabilité limitée au capital de 50.000 € détenue à 70% ;

Electro Power Systems Inc, filiale américaine d’Electro Power Systems Manufacturing Srl à 100%.

Pour rappel, la liquidation de la filiale MCM a été décidée en décembre 2019. La procédure de liquidation s’est achevée en janvier 2020. La société consolide selon la méthode de la mise en équivalence les comptes de la filiale suivante :

Comores Energies Nouvelles, société à responsabilité limitée au capital de 1.000.000 KMF, établie au sein de l’Union des Comores et détenue à 49%.

Une copie des comptes consolidés peut être obtenue au siège social, 28 rue de Londres, Paris 9ème. Jetons de présence, autres rémunérations : Le montant des jetons de présence alloués aux membres du Conseil d’Administration au titre de l’année 2019 est de 83.425 €. Le montant des Stocks Appreciation Rights allouées en 2019 par ENGIE EPS s’élève à 167.185 €.

15

7. Règles et méthodes comptables

(Code de Commerce - article L 123-12 et L 123-28 et règlement ANC) (Décret n° 2007- 431 du 25 mars 2007 -

article (V) du 27/03/2007) Les conventions générales comptables ont été appliquées, dans le respect du principe de prudence, conformément aux hypothèses de base :

Continuité de l’exploitation,

Permanence des méthodes comptables d’un exercice à l’autre,

Indépendance des exercices,

Et conformément aux règles générales d’établissement et de présentation des comptes annuels. La méthode de base retenue pour l’évaluation des éléments inscrits en comptabilité est la méthode des coûts historiques.

7.1. Les principales méthodes utilisées ont été les suivantes :

Referentiel comptable La société applique le règlement ANC n°2016-07 du 4 novembre 2016. Contrats La comptabilisation d’un contrat en cours d’exécution par la succursale italienne a été effectuée selon la méthode de l’avancement. A la clôture de l’exercice, une provision pour risque de 698.326 € a été constatée sur la cession du principal contrat de la succursale Mobility, cession intervenue en janvier 2020. Créances Les créances sont valorisées à leur valeur nominale. Une provision pour dépréciation est pratiquée lorsque la valeur probable de réalisation est inférieure à la valeur comptable. A ce titre, une provision pour dépréciation avait été constituée de 2016 à 2018 à hauteur de 119.376 € pour la créance détenue sur la filiale EPS Inc. Cette provision a été maintenue, et complétée par une dotation complémentaire de 8.000 € en 2019, soit au total 127.376 € à la clôture de l’exercice (soit 100% de la créance). Ecarts de conversion sur dettes et créances libellées en monnaies étrangères Lorsque l’application du taux de conversion d’une monnaie étrangère a pour effet de modifier les montants en monnaie nationale précédemment comptabilisés, les écarts de conversion sont inscrits à des comptes transitoires.

16

A la clôture de l’exercice, un écart de conversion actif sur la créance détenue sur la filiale COMORES ENERGIES NOUVELLES a été comptabilisé à la clôture de l’exercice pour 9.286 € (diminution de la créance). Une provision pour dépréciation a parallèlement été constituée pour ce même montant .

Frais de recherche et développement Les frais de recherche et développement engagés par la succursale italienne se rapportent au projet REDI W0062 et avaient été activés en 2018. La fin de la phase de développement s’est achevée en 2019, les immobilisations en cours ont donc été transférées en immobilisations incorporelles – Développement projet REDI MOBILITY, pour 236.182 € à la clôture de l’exercice. Amortissements pour dépréciation des autres immobilisations incorporelles Les amortissements pour dépréciation sont calculés suivant la durée de vie prévue, selon le mode linéaire : Logiciels divers = sur 3ans, soit un taux de 33,33% ERP développé en interne = sur 5 ans, soit un taux de 20% Participations et autres titres À la fin de chaque exercice, la société détermine s’il existe un indice de perte de valeur de ses titres. Une dépréciation est comptabilisée si la valeur comptable dépasse sa valeur d’utilité. Pour mesurer la valeur d'utilité, les flux de trésorerie futurs sont actualisés à leur valeur actuelle en appliquant un taux d'escompte qui reflète les estimations actuellement en vigueur sur le marché de la valeur temps de l’argent et des risques spécifiques. Les pertes de valeur sont comptabilisées dans le compte de résultat. A ce titre, une provision complémentaire pour dépréciation des titres de la filiale Electro Power Systems Manufacturing de 11.001.241 € a été constatée à la clôture de l’exercice, ainsi qu’une proivision de 225.833 € sur les titres de la filiale MCM. En conséquence, à la clôture de l’exercice, le montant des provisions sont les suivants :

12.104.624 € en ce qui concerne la filiale Electro Power Systems Manufacturing ;

1.150.000 € en ce qui concerne la filiale Elvi Energy ;

225.833 € en ce qui concerne la filiale MCM ENERGY LAB.

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8. Notes

8.1. Immobilisations

Valeur brute Début d'exercice

Augmentations : Réévaluations

Augmentations : Acquisitions

Immobilisations incorporelles

Autres postes d’immos incorporelles Logiciels licences brevets 101 625 13 585 Fonds de commerce EMobility 213 538 Développement Emobility 236 182 ERP 138 009 Immobilisat. incorporelles en cours 138 009 27 720 Dév.en cours projet REDI EMobility 236 182

689 354 415 496 Immobilisations f inancièresAutres participations Titres EPS MANUFACTURING 43 778 688 Titres ELVI ENERGY 3 875 901 Titres MCM Energy Lab 315 000 Titres COMORES ENERGIES NOUVELLES 996 Avances consolidables Elvi Energy 11 920 794

59 891 379 -


59 891 679 419

TOTAL GÉNÉRAL 60 581 033 415 915

Diminutions Par cession

Valeur brute f in d'exercice

Réévaluations Valeurs d'origine

Immobilisations incorporelles Logiciels licences brevets 115 210 Fonds de commerce EMobility 213 538 Développement Emobility 236 182 ERP 138 009 Immobilisat. incorporelles en cours 374 190 27 720

374 190 730 659 Immobilisations f inancièresAutres participationsTitres EPS MANUFACTURING 43 778 688 Titres ELVI ENERGY 3 875 901 Titres MCM Energy Lab 315 000 Titres COMORES ENERGIES NOUVELLES 996 Avances consolidables Elvi Energy 11 920 794

- 59 891 379


300 59 891 798

TOTAL GÉNÉRAL 374 490 60 622 457

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8.2. Amortissements

8.3. Provisions

Une provision pour dépréciation de la créance Princeton Power Systems a été constatée à la clôture de l’exercice pour 288.210 €. Des provisions pour dépréciation des titres ont été constatées pour 11.001.241 € en ce qui concerne les titres EPS Manufacturing, et pour 225.833 € en ce qui concerne les titres MCM ENERGY LAB. Des provisions pour dépréciation des avances faites aux filiales ont été constatées pour : EPS Inc 8.000 € Commores Energies Nouvelles 9.286 € Une provision pour risque a été constatée sur le principal contrat Mobility pour 698.326 €. Le fonds de commerce Mobility a fait l’objet d’une provision pour dépréciation de 213.538 €.

Au début de l'exercice Augmentations

A la f in de l'exercice

– Autres postes d’immobilisations incorporelles 25 808 61 477 87 285

Immobilisations incorporelles 25 808 61 477 87 285 – Installations générales, agencements et

– Installations techniques, matériel et outillage

– Installations générales, agencements

ACTIF IMMOBILISE 25 808 61 477 87 285

Provisions au début de l'exercice

Dotations de l'exercice

Reprises de l'exercice

Provisions à la f in de l'exercice

Provisions pour risques 698 326 698 326

Provisions pour dépréciation 2 372 759 11 746 107 14 118 866

Total 2 372 759 12 444 433 - 14 817 192

Exploitation 288 210

Financières 11 227 073

Exceptionnelles 929 150

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8.4. Créances

Les créances clients entre entreprises liées s'élèvent au total à 7.258.953 € :

Elvi Energy : 6.757.218 €

Eps Manufacturing : 376.131 €

Comores Energies nouvelles : 125.604 €

Les autres créances entre entreprises liées s’élèvent au total à 22.495.579 € :

Elvi Energy : 21.931.989 €

Eps Inc : 127.376 €

Comores Energies Nouvelles : 436.214 €



Créances de l’actif immobilisé :

Créances rattachées à des participations 11 920 794 11 920 794

Autres 419 419

Créances de l’actif circulant :

Créances Clients et Comptes rattachés 9 275 278 9 275 278

Autres 23 280 637 23 280 637

Charges constatées d’avance 34 929 34 929

Total 44 512 057 32 590 844 11 921 213

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8.5. Dettes

Les dettes fournisseurs entre entreprises liées s'élèvent à 4.247.573 € (Elvi Energy) Les autres dettes entre entreprises liées s’élèvent à 1.309.542 € (Elvi Energy)

8.6. Charges constatées d'avance

8.7. Produits constatés d'avance



Echéances à plus de 5 ans

Emprunts obligataires convertibles (*)

Autres emprunts obligataires (*)

Emprunts (*) et dettes auprès des

établissements de crédit dont :

– à 1 an au maximum à l’origine

– à plus de 1 an à l’origine 12 500 000 12 500 000

Emprunts et dettes f inancières divers (*) (**)

Dettes fournisseurs et comptes

rattachés 5 416 747 5 416 747

Dettes f iscales et sociales 375 820 375 820

Dettes sur immobilisations et comptes

rattachés

Autres dettes (**) 1 324 542 1 324 542

Produits constatés d’avance 30 458 30 458

Total 19 647 567 7 147 567 12 500 000

(*) Emprunts souscrits en cours d’exercice 12 500 000

(*) Emprunts remboursés sur l’exercice

(**) Dont envers les associés

Charges d'exploitation

Charges Financières

Charges Exceptionnelles

Charges constatées d avance 34 929

Total 34 929

Produits d'exploitation

Produits Financiers

Produits Exceptionnels

Produits constatés d avance 30 458

Total 30 458

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8.8. Charges à payer

Les factures non parvenues groupe correspondent aux re-facturations liées à la ré-allocation des coûts écoulant de la politique de prix de transfert exposée plus avant au paragraphe 4.1.

8.9. Produits a recevoir

8.10. Charges et produits exceptionnels

8.11. Composition du capital social

Montant

Fournisseurs – fact. non parvenues 625 819

Fournisseur fact non parv Emobility 48 662

Frs factures non parv. Elvi Energy 3 526 872

Personnel autres ch. à payer Emobility 40 732

Etat – autres charges à payer 58 444

Total 4 300 529

Montant

Fact client EPS Man. à établir 316 066

Fact client Elvi Energy à établir 4 126 130

Fact à établir clients Emobility 1 100 957

Total 5 543 153

Charges Produits

Pénalités Emobility 89

Provisions pour risques et charges 929 150

TOTAL 929 239 -

Nombre Valeur nominale

Titres composant le capital social au début de l’exercice 12 766 860 0,20

Titres émis pendant l’exercice

Titres remboursés pendant l’exercice

Titres composant le capital social à la f in de l’exercice 12 766 860 0,20

22

8.12. Effectif

8.13. Variation des capitaux propres

8.14. Répartition du chiffre d'affaires

En l'état du développement de la société, le chiffre d'affaires réalisé au cours de l'exercice résulte :

de la facturation du projet au Chili, soit 7.195 €

du chiffre d’affaires réalisé par la succursale italienne Mobility, soit 849.261 €

de la re-facturation de prestations diverses au profit des filiales du groupe, soit 4.567.800 €

Personnel salarié

Personnel mis à disposition

Employés 7,00

Total 7,00

Solde au 01/01/2019 Augmentations Diminutions

Solde au 31/12/2019

Capital 2 553 372 2 553 372

Primes d’émission 83 811 019 83 811 019

Report à Nouveau (7 966 221) (2 386 605) (10 352 826)

Résultat de l’exercice 0 (13 831 595) (13 831 595)

Total Capitaux Propres 78 398 170 (16 218 200) 0 62 179 970

France Etranger Total

Ventes de produits f inis 236 260 236 260

Prestations de services 5 167 116 5 167 116

Produits des activités annexes 20 880 20 880

TOTAL - 5 424 256 5 424 256

23

8.15. Filiales et participations

La filiale MCM ENERGY LAB est détenue à 70% par notre société, et à 30% par la filiale EPS ELVI ENERGY. Pour rappel, la liquidation de la filiale MCM ENERGY LAB a été décidée en décembre 2019 et la procédure de liquidation s’est achevée en janvier 2020.

8.16. Situation fiscale différée et latente

Capital social

Capitaux propres

Quote-part du capital

détenue en %

Valeur comptable brute des

titres

Valeur comptable nette des

titres

Chiffre d'affaires

Résultat du dernier exercice

clos

– Filiales (détenues à + 50 %)

EPS ELVI ENERGY 1 000 000 (11 909 770) 100 3 875 901 2 725 901 19 346 600 (12 698 062)

MCM ENERGY LAB 50 000 127 508 70 315 000 89 117 17 740 14 545

EPS MANUFACTURING 1 004 255 1 964 932 100 43 778 687 31 674 063 1 723 059 540 634

- Participations (détenues à + 10%)

COMORES ENERGIES NOUVELLES 2 033 NS 49 996 996 NS NS

Montant

Accroissements de la dette future d’impôt


Allègements de la dette future d’impôt

Liés aux provisions et charges à payer non déductibles de l’exercice 11 244 410


Ecart de conversion passif

Total des bases concourant à diminuer la dette future 11 244 410

Déficits reportables 9 852 008

Estimation du montant de la créance future 2 758 562

Base = Déficits reportablesImpôt valorisé au taux de 28 % pour les exercices ouverts à compter du 1/01/2020

24

8.17. Engagements donnés

8.18. Engagements reçus

Par lettre en date du 20 juin 2019, l’actionnaire principal ENGIE a confirmé son soutien financier à la société : Financement industriel et fonds de roulement : ENGIE a confirmé sa volonté d’accorder un prêt pour un montant compris entre 10 et 15 millions d’euros (selon les prévisions de développement), pour couvrir les besoins des 18 mois à venir. Une seconde tranche qui ne pourrait excéder 25 millions d’euros pourrait être accordée d’ici fin 2020, en fonction des prévisions révisées. Support financier : ENGIE a confirmé sa volonté de soutien en crédit jusqu’à 20 millions d’euros, accordé au cas par cas, pour supporter la société dans l’établissement de lettres de facilités de crédit bancaire, ainsi que son soutien, en sa qualité de société mère, jusqu’à 20 millions d’euros à accorder au cas par cas selon les garanties de performance émises, afin de soutenir les contrats EPC. Les deux montants pourraient être révisés à la hausse jusqu’à 40 millions d’euros chacun, selon l’évolution effective des activités.

Montant en euros



Caution de la f iliale Elvi Energy au profit d’Intesa Sanpaolo 100 000

Caution de la f iliale Elvi Energy au profit d’UniCredit 3 931 200

Caution de la f iliale Elvi Energy au profit de Banca Sella 1 000 000Caution de la f iliale Electro Pow er Systems Manufacturing au profit de Mediocredito It (Intesa Sanpaolo)

3 500 000

Avals et cautions 11 931 200

Total 11 931 200

Dont concernant :

Les f iliales 11 931 200

366

ANNEX 5 Special Report on Regulated Agreements

Special report by the statutory auditors on regulated agreements and commitments for FY 2019


Rapport spécial des commissaires aux comptes sur les conventions et engagements réglementés

Assemblée générale d’approbation des comptes de l’exercice clos le 31 décembre 2019


75007 Paris


régionale de Paris

BDO Paris Audit & advisory S.A.R.L. 43-47 Avenue de la Grande-Armée,

75116 Paris


régionale de Paris


Rapport spécial des commissaires aux comptes sur les conventions et engagements réglementés

Assemblée générale d’approbation des comptes de l’exercice clos le 31 décembre 2019

À l’assemblée générale de la société ENGIE EPS S.A,

En notre qualité de commissaires aux comptes de votre société, nous vous présentons notre rapport sur les conventions et engagements réglementés.

Il nous appartient de vous communiquer, sur la base des informations qui nous ont été données, les caractéristiques et les modalités essentielles ainsi que les motifs justifiant de l’intérêt pour la société des conventions et engagements dont nous avons été avisés ou que nous aurions découverts à l’occasion de notre mission, sans avoir à nous prononcer sur leur utilité et leur bien-fondé ni à rechercher l'existence d’autres conventions et engagements. Il vous appartient, selon les termes de l’article R.225-31 du code du commerce, d'apprécier l'intérêt qui s'attachait à la conclusion de ces conventions et engagements en vue de leur approbation.

Par ailleurs, il nous appartient, le cas échéant, de vous communiquer les informations prévues à l’article R.225-31 du Code de commerce relatives à l’exécution, au cours de l’exercice écoulé, des conventions et engagements déjà approuvés par l’assemblée générale.

Nous avons mis en œuvre les diligences que nous avons estimé nécessaires au regard de la doctrine professionnelle de la Compagnie nationale des commissaires aux comptes relative à cette mission. Ces diligences ont consisté à vérifier la concordance des informations qui nous ont été données avec les documents de base dont elles sont issues. Conventions et engagements soumis à l’approbation de l’Assemblée Générale

Conventions et engagements autorisés et conclus au cours de l’exercice écoulé

En application de l’article L.225-40 du code de commerce, nous avons été avisés des conventions et engagements suivants conclus au cours de l’exercice écoulé qui ont fait l’objet de l’autorisation préalable de votre conseil d’administration.

ENGIE EPS SA Rapport spécial Exercice clos le 31 décembre 2019

ENGIE EPS S.A. 2

Avec ENGIE S.A, société appartenant au groupe ENGIE, l’actionnaire majoritaire de la société

Nature et objet

Prestations de services de conseil afin d’utiliser le programme d’intégration intelligente de ENGIE EPS au sein du groupe ENGIE. L’objet de ce contrat est d’embaucher M. Giorgio Crugnola comme senior consultant au sein de ENGIE EPS. La durée de l’accord est de 7 (sept) mois, à compter du 1er juin 2019 jusqu’au 31 décembre 2019, avec la possibilité d’étendre cet accord de 18 (dix-huit) mois au maximum.

Modalités

Conclusion d’un contrat à compter du 1er juin 2019 jusqu’au 31 décembre 2019 avec la possibilité d’étendre cet accord à 18 mois. Le coût annuel de l’accord correspond au coût mensuel de 11 436,25€ calculés sur une moyenne de 15 jour ouvrable par mois en tant que senior consultant.

Avec ENGIE S.A, société appartenant au groupe ENGIE, l’actionnaire majoritaire de la société

Nature et objet

Prestations de services de conseil afin d’utiliser le programme d’intégration intelligente de ENGIE EPS au sein du groupe ENGIE. L’objet de ce contrat est d’embaucher M. Juan Ceballos comme junior consultant au sein de ENGIE EPS. La durée de l’accord est de 7 (sept) mois, à compter du 1er juin 2019 jusqu’au 31 décembre 2019, avec la possibilité d’étendre cet accord de 18 (dix-huit) mois au maximum.

Modalités

Conclusion d’un contrat à compter du 1er juin 2019 jusqu’au 31 décembre 2019 avec la possibilité d’étendre cet accord à 18 mois. Le coût annuel de l’accord correspond au coût mensuel de 6 518,66€ calculés sur une moyenne de 15 jour ouvrable par mois en tant que junior consultant.

Conventions et engagements déjà approuvés par l’assemblée générale

Conventions et engagements approuvés au cours d’exercices antérieurs

En application de l’article R.225-30 du code de commerce, nous avons été informés que l’exécution des conventions et engagements suivants, déjà approuvés par l’assemblée générale au cours d’exercices antérieurs, s’est poursuivie au cours de l’exercice écoulé.

Avec Mr. Carlalberto Guglielminotti, Directeur Général de votre Société

Nature et objet

Le 26 juin 2018, M. Carlalberto Guglielminotti a signé un contrat de travail avec EPS Elvi, société membre du Groupe ENGIE EPS et contrôlée par votre Société incluant un engagement visé à l’article L.225-42-1 du code de commerce.

ENGIE EPS SA Rapport spécial Exercice clos le 31 décembre 2019

ENGIE EPS S.A. 3

Modalités

En vertu de ce contrat de travail, M. Carlalberto Guglielminotti a droit à une indemnité égale à 60 % de sa rémunération fixe du fait de l’interdiction qui lui est faite d’exercer toute activité concurrentielle au cours des deux années suivant la fin de son contrat de travail.

La rémunération due au titre de l’exercice 2019 s’élève à un total de 242 671 € dont 32 375 € de rémunération variable.

Avec ENGIE Solar S.a.S., société appartenant au Groupe ENGIE, actionnaire majoritaire de votre Société

Nature et objet

La société ENGIE Solar S.a.S. sous-louait à votre société des bureaux.

Modalités

Conclusion le 1er janvier 2019 d'un contrat de sous-location avec la société ENGIE Solar S.a.S. pour des locaux situés à Paris (2ème Arrondissement), 115 rue Réaumur moyennant un loyer mensuel de deux cents (200,00) euros hors taxes et pour une durée de deux ans.

Suite au transfert de siège social au 28 rue de Londres, Paris 9ème, le contrat a été résilié.

Avec Cautha S.r.l., société de développement, construction et exploitation de centrales d’énergie renouvelable, entité ayant un administrateur commun

Personne concernée

M. Giuseppe Artizzu, administrateur commun et actionnaire de Cautha S.r.l.

Nature et objet

Dans le cadre d’une convention signée le 10 juillet 2015, la société Cautha S.r.l. met à la disposition de votre filiale à 100% Electro Power Systems Manufacturing S.r.l un bureau dans le centre de Milan. La convention a une durée initiale d’un an, renouvelable pour un an supplémentaire et expirant en juillet 2018.

Modalités

Le loyer annuel s’élevait à 17 642,89 € hors taxes.





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Tampon

2019 UNIVERSAL REGISTRATION DOCUMENT - Engie EPS

Documents

Transcript of 2019 UNIVERSAL REGISTRATION DOCUMENT - Engie EPS