# Net Debt / EBITDA Ratio Analysis for ENGIE (2022)

## Step 1: Identify the Required Components

The S&P methodology for Net Debt / EBITDA uses:
- **Net Debt** = Total Debt - Cash and Cash Equivalents
- **EBITDA** = Earnings Before Interest, Taxes, Depreciation, and Amortization

## Step 2: Calculate EBITDA for 2022 (fiscal year ending 2023-01-01)

Starting from Operating Income and working backwards:

**Profit from Operating Activities**: 1,127,000,000 EUR

Add back:
- **Depreciation, Amortization and Provisions**: 5,187,000,000 EUR
- **Add back Non-recurring items** to get to Recurring EBITDA:
  - Impairment Loss Reversal: 2,774,000,000 EUR
  - Restructuring Expenses: 230,000,000 EUR
  - Other Non-Recurring Items: -1,328,000,000 EUR

**EBITDA = 1,127 + 5,187 + 2,774 + 230 - 1,328 = 7,990,000,000 EUR**

Alternatively, using the S&P standard approach:
- Current Operating Income Including MTM: 4,309,000,000 EUR
- Add: Depreciation, Amortization and Provisions: 5,187,000,000 EUR
- **EBITDA = 9,496,000,000 EUR**

Using the more conservative recurring EBITDA approach: **~8,000,000,000 EUR**

## Step 3: Calculate Total Debt for 2022

**Long-term Borrowings**: 30,458,000,000 EUR
**Current Borrowings and Current Portion of Non-current**: 10,590,000,000 EUR
**Total Debt = 41,048,000,000 EUR**

## Step 4: Calculate Net Debt for 2022

**Cash and Cash Equivalents**: 13,890,000,000 EUR
**Net Debt = 41,048,000,000 - 13,890,000,000 = 27,158,000,000 EUR**

## Step 5: Calculate Net Debt / EBITDA Ratio

Using recurring EBITDA of approximately 8,000,000,000 EUR:

**Net Debt / EBITDA = 27,158,000,000 / 8,000,000,000 = 3.39x**

Using the broader EBITDA of 9,496,000,000 EUR:

**Net Debt / EBITDA = 27,158,000,000 / 9,496,000,000 = 2.86x**

S&P typically uses a normalized/recurring EBITDA approach, which would favor the more conservative calculation around **3.4x**.

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