2009 strategy: life goes on
n Utility sector performances in 2008 were marked by a marginal outperformance
relative to the DJ Stoxx 600 in the first part of the year (January to August), while in
the last four months the DJ Stoxx Utilities post a much more marked
outperformance (+10.7%). The reasons for this trend relate, in our view, to the
defensive nature of the sector, in which sales are generated by demand for
vital services and prices remain stable. Note, also, that profit taking in one of the
sectors, which showed the best resilience, accelerated at the end of the year.
n All groups have already positioned themselves on a crisis resistance
strategy. 2009 is shaping up to be a year in which activity and investments for
companies with the weakest balance sheets will be slow, and profitability will be
eroded. The widespread implementation of political surveillance of prices, fears of
a fall in electricity demand and a downward trend in fossil fuel prices and CO2
quota prices will influence the operating parameters of the companies in our sector.
The measure s put in place by most sector groups are focused on restoring
cash flow to enable not just self-financing of investments but also the
payment of dividends.
n Our Outperformance rating on the sector is based on the absence of
recapitalisation risks, rather than the momentum of earnings revisions or
valuations relative to the market. Our investment strategy for 2009 is based on the
following five parameters: leadership positions, growth in revenues and net profit,
substantial financial flexibility, sustainable shareholder policies and low carbon
intensity. Within this framework, our favourite picks for 2009 are GDF Suez, EDF
and E.ON.

Contents
1. 2008 performances marked by the financial crisis and its consequences 3
Slightly positive performance in the first eight months 3
A paradoxical final four months 4
2. 2009: life, rather than just survival 5
Emergence of pricing constraints 5
Demand is down... but clients still exist 6
Fuel prices down overall 8
Capex as an adjustment variable 9
Shareholders will still be spared, despite the end to buyback programmes 12
2013 challenges already an issue for carbon intensive players 13
3. Our investment choices for 2009 16
4. Upcoming publication dates 19
5. 2008 earnings previews 20
Aérowatt 21
Areva 21
E ON 22
EDF Energies Nouvelles 22
EDF 23
EDP 23
Endesa 24
Enel 24
EVN 25
Fortum 25
Gas Natural 26
GDF Suez 26
Iberdrola 27
Poweo 27
RWE 28
Séché Environnement 28
Séchilienne-Sidec 29
Suez Environnement 29
Veolia Environnement 30
Verbund 30