Under the Euro Medium Term Note Programme ... - Finance - EDF

Risk Factors
cause a decline in the EDF Group’s sales. Lastly, power failures may have a negative impact
on the EDF Group’s image with its customers, particularly if the blackouts are attributable to
the EDF Group.
Natural disasters, significant weather changes and any major event on a scale that is
difficult to predict may have a significant negative impact on the EDF Group’s
industrial and commercial activities
EDF and its subsidiaries have developed crisis management plans to deal with natural
disasters or major events. These crisis management plans are assessed and tested on a
regular basis.
As was the case with storms Klaus (2009) and Xynthia (2010) in France, natural disasters
(floods, landslides, earthquakes, etc.), other significant weather changes (droughts, etc.), or
any other event on a scale that is difficult to predict (large-scale epidemics, etc.) may affect
the EDF Group’s activities. Based on its experience with this type of events, the EDF Group
implements measures aimed at limiting the consequences should such events reoccur.
The measures may generate costs in addition to the costs of repairing the damage caused
by the natural disaster and the loss of earnings from the interruption to supply.
In August 2011, ERDF entered into a five-year contract covering ERDF’s aerial distribution
network against the consequences of major “storms” risks. In the event of a loss, this policy,
which provides cover in the amount of €150 million, provides compensation calculated using
a parametric index based on wind speed. Neither RTE’s aerial distribution networks nor the
Isolated Energy Systems are covered for property damage. Damage to these networks could
have a negative impact on the EDF Group’s financial position in the absence of insurance
cover or of inadequate cover. In addition, renewing or taking out specific cover may be
difficult or more costly due to the impact, frequency and magnitude of natural disasters
experienced in recent years by the alternative risk transfer markets.
To deal with a wide-spread health epidemic, EDF has created a plan intended to ensure the
continuity of electricity supply, depending on the intensity of the crisis, while guaranteeing the
safety of facilities and reducing the health risks to which employees are exposed.
Lastly, following the Fukushima accident in 2011, EDF supplemented its national crisis
teams with a National Rapid Action Force (FARN) capable of delivering, in less than 24
hours, teams with “operational/ maintenance” and “logistical” expertise to a nuclear power
generating centre in difficulty.
Despite the establishment of a crisis management structure in place that enables it to react
promptly to such events, the EDF Group cannot guarantee that the occurrence of a natural
disaster, a weather event or any other event on a scale that by its nature is difficult to predict
will not have significant negative consequences on its activities, income and financial
position.
Risks associated with weather conditions and seasonal variations in the business
Electricity consumption is seasonal and depends to a great extent on weather conditions.
Accordingly, in France, electricity consumption is generally higher during winter months.
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