- REVENUE : €12,565 MILLION, +
6.0%1, SEVEN CONSECUTIVE QUARTERS OF SUSTAINED
GROWTH
- EBITDA : €1,673 MILLION, +
5.8%2 (+6.4%2 IN Q2 BETTER THAN THE
+5.3%2 IN Q1)
- COST SAVINGS OF €148 MILLION IN LINE
WITH THE GROUP’S ANNUAL OBJECTIVE (€78 MILLION IN Q2 IN ADDITION TO
THE €70 MILLION FOR Q1)
- CURRENT EBIT: €792 MILLION,
+6.8%2
- CURRENT NET INCOME GROUP SHARE: €329
MILLION, UP +13.3%2 EXCLUDING NET CAPITAL GAINS.
PUBLISHED NET INCOME GROUP SHARE: €225 MILLION
Regulatory News:
Veolia Environnement (Paris:VIE):
2018 OBJECTIVES FULLY CONFIRMED
Antoine Frérot, Veolia’s Chairman and CEO indicated: “The
first half of 2018 finished once again in a rhythm of sustained
growth of both activity and results. The commercial momentum that
began two years ago continues. Revenue benefited from the
additional efforts we engaged in 2017, growing 6%, along with a
notable increase of 4% in waste volumes. Results also revealed
sustained growth, with EBITDA up 5.8% and current net income Group
share excluding capital gains up 13%, thanks to the revenue growth
and the cost savings achieved during the first semester. These
strong first half results demonstrate once again the relevance of
the two levers of our strategy, growth and operational efficiency,
and allow us to be confident in the achievement of our objectives
for the full year.”
1 Un-audited data – Audit in Process2 At constant exchange
rates. At current exchange rates: Revenue growth of 3.1%, EBITDA
growth of 3.7%, Current EBIT growth of 4.2% and current net income
Group share excluding capital gains up 9.7%.
- Group consolidated revenue was
€12,565 million during the first half of 2018 compared to
represented €12,187 million in H1 2017, up 6.0% at constant
exchange rates (+3.1% at current rates) and +4.1% at constant scope
and exchange rates.
Veolia once again registered solid revenue growth in the first
semester. At constant exchange rates, Q2 revenue is up +5.1%, after
+7.0% in Q1.
Exchange rate variations had an unfavorable impact of €357
million on revenue for the semester (notably -€130M due to the
weakness of the dollar, -€48M from the Australian dollar, -€44M
from the Argentinian peso, and -€25M from the British Pound).
The scope effect was positive for €241M, principally the effect
of small tuck in acquisitions completed in 2017. The divestiture of
the Industrial Services activity in the United Stated weighed in
for €91M.
The impact of energy prices (+€83M) and of recycled material
prices (-€46M of which -€64M due to paper prices) reached a total
of +€37M.
At constant exchange rates, the variations in revenue recorded
during the first half of 2018 were as follows:
- In France, activity was relatively stable (-0.3%) in the first
half. Water revenue was up 0.1% as a result of price indexation of
+0.6% and good contract wins, but also a reduction in volume of
-1.5% due to the rainy weather in April and May. The Waste business
declined by -0.7%, with the effect of lower recycled material
prices being only partially compensated by the increase in volumes
treated.
- Europe excluding France grew by 6.8%. All of the areas
exhibited growth. Central and Eastern Europe is up 4.1% in spite of
unfavorable weather conditions for Energy in Q2 (impact of -€33M),
thanks to good water volumes (+0.7%), price increases, and a
satisfactory commercial momentum. Northern Europe registered strong
growth (+12.8%). Germany progressed by 4.7% due to the strong
performance in Waste activity. Benelux was up 20.5% and Scandinavia
up 57.4%, with the impact of acquisitions completed in 2017.
UK/Ireland grew by 4.4% thanks to very good availability rates for
PFIs, good commercial wins with industrial customers, and the
increase in electricity prices.
- Rest of the World continued to drive the growth of the Group
with an increase of +14.0%. North America progressed by 4.9% due to
the good performance of the Energy activity in Q1, but also good
commercial development. Latin America rose 29.1% with price
increases, sales development, and the integration in May 2018 of
the activities of Grupo Sala, leader in toxic and municipal waste
in Colombia. Asia grew by 21.8%. China was up 10.9% with good toxic
waste volumes, benefiting from the opening of the Group’s tenth
incinerator at Cangzhou, and strong energy activity. Equally solid
performances came from South Korea in industrial water and from
Japan with the startup of the Hamamatsu concession. The Pacific
zone progressed by 15.2% thanks to good waste volumes, the
commissioning of new assets, and targeted small acquisitions.
Africa Middle East was up 8.9% with the notably good performance of
Energy Services in the Middle East.
- Global businesses increased by 1.3%. Toxic waste continued to
exhibit strong growth (+9.6%) thanks to good sales momentum, an
increase in treated volumes, and a good progression in oil
recycling. Veolia Water Technologies revenue declined by -10.1%,
due to the late start of contracts signed at the end of 2017. The
order backlog is up 10.7% annually, at €1,973M. Revenue is up 0.5%
at SADE, with a particularly good performance in France.
At constant exchange rates and excluding works and energy
prices, revenue is up 5.0% with an acceleration in Q2 to +5.3%
after growth of +4.6% in Q1.
By activity, at constant exchange rates, Water revenue increased
by 1.3%. Waste exhibited strong growth of 10.9% for the first half
with volumes up 4.9% in Q2 after a growth of +3% in Q1. Energy rose
7.5% with favorable volumes, a price effect of +2.2% with the
increase in heating and electricity prices in North America, and a
negative weather impact (-0.9%) in Central and Eastern Europe in
Q2.
- EBITDA improved by 5.8% at constant
exchange rates to €1,673M compared to represented €1,614M in H1
2017. (+3.7% at current exchange rates).
- Exchange rate variation had a negative
impact of -€34M on EBITDA, but was compensated by a scope effect of
+35 M€.
- At constant exchange rates, sustained
activity growth combined with stronger cost savings (€148M with
€78M in Q2 and €70M in Q1) resulted in EBITDA growth of 5.8% for
the semester. With the reintegration of Gabon, EBITDA growth would
have been +3.7% at constant exchange rates. Energy and recyclate
prices weighed in for -€42M in the growth of EBITDA, with a squeeze
effect on fuel of -€20M in Q1, a negative impact from paper prices
of -€12M and an increase in diesel prices of -€10M.
- EBITDA variances at constant exchange
rates break down as follows: In France, EBITDA was nearly stable
(-0.5%), in line with revenue evolution. Water EBITDA grew thanks
to sustained cost savings. Waste EBITDA decreased as a result of
lower recycled paper prices. In Europe outside of France, EBITDA
rose +2.6%, penalized by the fuel squeeze of €20M in Central and
Eastern Europe where EBITDA was down. All other geographies
registered sustained growth. Rest of the World posted strong EBITDA
growth, up +18.4% alongside solid revenue progression. In Global
Businesses, EBITDA was up 2.0% with double digit growth for
hazardous waste business but a decline in works (Veolia Water
Technologies and SADE).
- Current EBIT reached €791.7 million
compared to represented €759.9 million in H1 2017, up 6.8% at
constant exchange rates (and +4.2% at current exchange rates).
- Exchange rate variation had a negative
impact of -€20M on Current EBIT.
- Current EBIT growth is a result of
EBITDA growth and stable depreciation (including principal
repayment on operating financial assets) expense of €825M vs. €826M
in represented H1 2017 (D&A increased by +34 M€ at constant
exchange rates). Provision reversals are down, and the aggregate
provisions balance, fair value adjustments, and capital gains on
industrial disposals reached €20M vs. €54M in represented H1 2017.
The contribution of equity-accounted joint ventures and associates
to current net income increased by €10M to €58M.
- Current Net Income Group share was
€329 million compared to represented €290 million in H1 2017, an
increase of 19% at constant exchange rates (and +13.3% at constant
exchange rates and excluding net capital gains).
- Cost of net financial debt was down, at
-€199M. The gross cost of borrowing decreased by 37 basis points,
to 2.80%.
- Other current financial expenses and
income were -€65M vs. -€73.7M in H1 2017 represented.
- Capital gains on financial disposals
were €18.8M vs. €4.5M in H1 2017 represented.
- The current tax rate was stable at
26%.
- Non-controlling interests increased to
€87.6M vs. €79.9M in H1 2017 represented.
- The current net income Group Share
progressed by 13.6% to €328.9M and by +9.7% excluding net capital
gains.
- Published net income Group share was
€225M compared to represented €198M in H1 2017 (growth of
+13.5%).
- Net Financial Debt reached €10,609M
on June 30, 2018 (and €9,157M before repayment of hybrid debt), vs.
€8,553M for June 30, 2017 represented.
- Net financial Debt increased as a
result of :
- Higher industrial investments of €712M
vs. €593M in H1,2017
- Net financial investments of €303M,
and
- An unfavorable seasonal Working Capital
variation of €790M.
- Fully confirmed objectives
- 2018 (at constant exchange rates):
- Continuation of sustained revenue growth
- EBITDA growth greater than that of 2017
- Cost reductions of more than €300M
- 2019* :
- Continuation of revenue growth and full
effect of cost savings
- EBITDA between €3.3bn and €3.5bn
(excluding IFRIC 12), and between €3.5bn and €3.7bn including IFRIC
12
- Dividend growth in line with that of
current net income
* At constant exchange rates (based on rates at the end of
2016)
Veolia group is the global leader in optimized resource
management. Present on the five continents and with close to
169 000 employees, the Group designs and provides water,
waste, and energy management solutions that contribute to the
sustainable development of communities and industries. Through its
three complementary business activities, Veolia helps to develop
access to resources, to preserve available resources, and to
replenish them.In 2017, the Veolia group supplied 96 million people
with drinking water and 62 million people with wastewater service,
produced nearly 55 million megawatt hours of energy and converted
47 million metric tons of waste into new materials and energy.
Veolia Environnement (listed on Paris Euronext: VIE) recorded
consolidated revenue of €25.12 billion in 2017 (USD 30.1 billion).
www.veolia.com.
Important disclaimer
Veolia Environnement is a corporation listed on the Euronext
Paris. This press release contains “forward-looking statements”
within the meaning of the provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are
not guarantees of future performance. Actual results may differ
materially from the forward-looking statements as a result of a
number of risks and uncertainties, many of which are outside our
control, including but not limited to: the risk of suffering
reduced profits or losses as a result of intense competition
requiring significant financial and human resources, the risk that
changes in energy prices and taxes may reduce Veolia
Environnement’s profits, the risk that governmental authorities
could terminate or modify some of Veolia Environnement’s contracts,
the risk that acquisitions may not provide the benefits that Veolia
Environnement hopes to achieve, the risks related to customary
provisions of divesture transactions, the risk that Veolia
Environnement’s compliance with environmental laws may become more
costly in the future, the risk that currency exchange rate
fluctuations may negatively affect Veolia Environnement’s financial
results and the price of its shares, the risk that Veolia
Environnement may incur environmental liability in connection with
its past, present and future operations, as well as the other risks
described in the documents Veolia Environnement has filed with the
Autorités desMarchés Financiers (French securities regulator).
Veolia Environnement does not undertake, nor does it have any
obligationto provide updates or to revise any forward looking
statements. Investors and security holders may obtain from
VeoliaEnvironnement a free copy of documents it filed
(www.veolia.com) with the Autorités des Marchés Financiers.
This document contains “non-GAAP financial measures”. These
“non-GAAP financial measures” might be defined differently from
similar financial measures made public by other groups and should
not replace GAAP financial measures prepared pursuant to IFRS
standards.
FINANCIAL INFORMATION FOR THE HALF-YEAR ENDED JUNE 30,
2018
A] PREFACE
GABON
Veolia Africa, through its 51% subsidiary, SEEG, manages the
distribution of drinking water and electricity throughout all Gabon
under the terms of a concession agreement signed in 1997 and
extended for five years in March 2017.On February 16, 2018,
the Gabonese Republic unilaterally terminated the concession
agreement signed with the Group’s subsidiary, SEEG – Société
d’énergie et d’eau du Gabon, (Gabon Energy and Water Company),
alleging several different reasons including that of the general
interest. The same day, through Ministerial order, all material and
human resources were seized by the Gabonese Republic. A further
Ministerial order also appointed an executive body to implement
termination and seizure measures.Since March 31, 2018, the
cessation of activities in Gabon has led the Group to classify SEEG
in net income from discontinued operations in accordance with IFRS
5. The interim financial statements for the half-year ended June
30, 2017 were re-presented accordingly to ensure comparability,
following the reclassification of the Group’s activities in Gabon
in “Net income from discontinued operations” in accordance with
IFRS 5.
CHANGES IN ACCOUNTING STANDARDS
With effect from January 1, 2018, the Group applies IFRS 9, the
new financial instruments standard, which replaces IAS 39. The new
standard provides for the retroactive application of the
classification and measurement rules applicable to financial assets
and liabilities and, in particular for the Group, new impairment
methodologies for trade receivables and an adjustment to the
amortized cost of renegotiated bond issues. The impact in the
income statement on EBITDA and current EBIT of the restatements
resulting from the first-time application of this standard were not
material.The application of IFRS 15 as of January 1, 2018 does not
generate a significant cumulative impact on the Group's financial
statements as of June 30, 2018
B] KEY
FIGURES
Change 2017 / 2018 (in € million)
Half-year ended June 30, 2017
published
Half-year ended June 30, 2017
re-presented
Half-year ended June
30, 2018
∆ Current
∆ at constant exchange rates
Revenue 12,346.5 12,186.5 12,564.5 3.1%
6.0% EBITDA 1,651.4 1,613.8 1,672.8
3.7% 5.8% EBITDA margin 13.4% 13.2%
13.3% Current EBIT (1)
773.8 759.9 791.7 4.2% 6.8% Current net
income - Group share 295.2 289.6 328.9
13.6% 19.0% Current net income – Group share, excluding
capital gains and losses on financial divestitures net of tax
294,0 288.4 316.3 9.7% 13.3% Net
income (loss) – Group share 204.6 198.5 225.4
13.5% 21.4% Industrial investments 592.8
592.8 711.8 Net free cash flow (176.1)
(193.5) (321.2) Net financial debt (8,561.4)
(8,553.2) (10,609.0)
(1) Including the share of current net
income of joint ventures and associates viewed as core Company
activities.
The main foreign exchange impacts were as
follows:
FX impacts for the half-year ended June 30, 2018 %
(in M€) (vs June 30, 2017 re-presented)
Revenue -2.9% -357.3
EBITDA
-2.1% -34.4
Current EBIT
-2.6% -20.1
Current net income
-5.4% -15.5
Net financial debt
-1.4% -117
C] INCOME STATEMENT
1. GROUP
CONSOLIDATED REVENUE
Group consolidated revenue for the half-year ended June 30, 2018
increased 6.0% at constant exchange rates to
€12,564.5 million, compared to re-presented
€12,186.5 million for the half-year ended June 30, 2017.
Excluding Construction(1) revenue and energy price effects, revenue
improved by +5.0% in the first six months (+5.3% in Q2 2018
compared to +4.6% in Q1).
As in the first quarter, revenue growth was
marked by more favorable momentum across nearly all segments in the
second quarter of 2018:
∆ at constant exchange rates Q1 2018
Q2 2018
France 0.6% -1.1% Europe, excluding France
6.9% 6.7% Rest of the world 14.7% 13.2% Global
businesses 3.5% -0.6%
Group 7.0%
5.1%
The slowdown in France stems from a negative climate impact in
the second quarter in water and a drop of the selling price of
recycled materials (paperboard) in waste.
By segment, the change in revenue compared to
re-presented figures for the half-year ended June 30, 2017 breaks
down as follows:
Change 2017 / 2018 (in € million)
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
∆
∆ at constant exchange rates
∆ at constant scope and exchange rates
France 2,663.4 2,655.9 -0.3% -0.3%
-0.3% Europe, excluding France 4,233.6 4,516.6
6.7% 6.8% 2.5% Rest of the world
3,067.7 3,191.8 4.0% 14.0% 13.0% Global
businesses 2,204.0 2,185.2 -0.9% 1.3%
0.0% Other 17.8 15.0 -15.7%
-15.5% -15.5%
Group 12,186.5
12,564.5 3.1% 6.0%
4.1%
(3) Construction revenue encompasses the Group’s engineering and
construction activities (mainly through Veolia Water Technologies
and SADE), as well as construction completed as part of operating
contracts.
- Revenue decreased -0.3% in
France at constant scope compared to re-presented figures
for the half-year ended June 30, 2017: Water revenue increased
+0.1%, while Waste revenue fell -0.7% :
- Water revenue rose by +0.1% compared to
re-presented figures for the first-half of 2017, impacted by tariff
indexation of +0.6% compared to -0.3% in H1 2017 and an increase in
Construction activity, partially offset by lower volumes (-1.5%)
because of a negative impact of climate on the second quarter
2018;
- Waste revenue fell -0.7% at current
exchange rates and constant scope compared to re-presented figures
for the first-half of 2017: lower paper recycling prices (-2.8% or
-€34 million) were partially offset by incineration and landfill
volumes.
- Europe excluding France
(excluding Lithuania classified in discontinued operations) grew
+6.8% at constant exchange rates compared to re-presented figures
for the half-year ended June 30, 2017, with solid momentum in the
majority of regions:
- in the United Kingdom/Ireland zone,
revenue increased +4.4% at constant exchange rates to €1,084.9
million, due to good PFI availability, an increase in electricity
tariffs and industrial service contract wins;
- in Central and Eastern Europe, revenue
increased +4.1% at constant exchange rates compared to re-presented
figures for the half-year ended June 30, 2017 to
€1,580.2 million. Negative impact of climate on the second
quarter (-€33 million in Energy) is offset by:
- in Energy, higher volumes and tariffs
(+€10 million), and the impact of recent developments in Hungary
(Biomass);
- in Water, a slight increase in invoiced
water volumes (+0.7% i.e. approximately +€4 million) and higher
tariffs across all countries of the zone (+€14 million)
- in Waste, the impact of targeted
acquisitions made in 2017 (plastic recycling in Hungary and
Industrial Waste collection in the Czech Republic).
- in Northern Europe, revenue increased
+12.8% at constant exchange rates compared to the re-presented
prior year period to €1,342.1 million. Germany, the main
contributor (€926.6 million), benefited from strong Waste
activities, reporting revenue of €544.1 million, compared to €495.5
million for the half-year ended June 30, 2017. The favorable
revenue impact of 2017 tuck-ins in Recycling and Industrial Waste
businesses offset the fall in recycled paper prices (-€24 million)
and lower energy volumes (-€28 million).
- Strong growth in the Rest of the
world of 14.0% at constant exchange rates compared to
re-presented figures for the half-year ended June 30, 2017:
- Revenue rose +4.9% at constant exchange
rates to €979.0 million in North America i.e; an increase of
+14.5%, at constant exchange and scope, mainly due to strong growth
in Energy (+25.3% at constant exchange rates tied to price and s
volume increases following cold weather at the beginning of the
year), commercial wins in Energy (Dow Dupont contract in the United
States) and higher volumes in hazardous waste.
- Strong revenue growth in Latin America
(+29.1% at constant exchange rates) to €387.1 million, thanks in
part to commercial developments in Ecuador, Chile, Brazil and
Argentina and the integration from May, 2018 of Grupo Sala’s
activities in Columbia.
- Revenue in Asia increased by +21.8% at
constant exchange rates to €859.0 million. Strong revenue growth in
China (+10.9%) was due to increased volumes in Hazardous Waste
(start-up of the Cangzhou incineration plant), higher heating
network sales, partially offset by lower Water sales due to end of
Chengdu BOT contract. The rest of the zone is driven by a strong
commercial dynamism: start of operation on the Hamamatsu concession
in Japan and development of industrial water treatment activities
in Korea;
- the Pacific zone recorded +15.2%
revenue growth at constant exchange rates year-on-year, due to
higher waste volumes processed (+4.2%) volumes in work activity,
starting of new industrial assets in waste (including Wooddlawn
MBT) and targeted tuck-ins from 2017.
- in Africa/Middle East, revenue
increased +8.9% at constant exchange rates, with favorable volume
and work impacts in Morocco and strong commercial development in
the Middle East (energy services in the tertiary sector).
- Global businesses: revenue was
virtually stable at 1.3% at constant exchange rates versus the
re-presented prior-year period:
- Hazardous Waste activities increased by
+9.6% at constant exchange rates, mainly due to growth in oil
recycling activities and higher volumes processed, tied
particularly to Greater Paris construction work;
- Design & Build activities remained
down by -10.1% at constant exchange rates, with the slow start-up
of activities in North America, France and the rest of Europe
(Denmark and Italy). The backlog is up +10.7% compared to the
first-half of 2017 at €1,973 million.
The increase in revenue between 2017 and 2018 breaks down by
main impact as follows:
- The foreign exchange impact on
revenue was -€357.3 million (-2.9% of revenue) and mainly reflects
fluctuations in the U.S. dollar (-€129.5 million), the Australian
dollar (-€48.2 million), the Argentine peso (-€43.6 million), the
pound sterling (-€24.9 million).
- The consolidation scope impact
of +€241.5 million mainly relates to:
- developments in 2017: integration of
Corvara industrial assets and Hans Andersson in Scandinavia (+€107
million), of the recycling and waste businesses of Van Scherpenzeel
Grope B.V. in the Netherlands (+€29 million) and the acquisition in
July 2017 of Eurologistik in Germany (+€19 million) and Hanbul in
Korea (+€20 million);
- 2018 transactions, including the sale
of the Industrial Services division in the United States (-€91
million), the acquisition of Grupo Sala in Colombia (+€23
million).
- Energy and recyclate prices had
an impact of +€37 million, with an increase in energy prices of
+€83 million ( in the United States and Central Europe), following
a drop in recyclate prices (-€46 million, including -€64 million
for paper).
- Commercial momentum improved
significantly (Commerce/Volumes impact) to +€307 million:
- volumes increase of +€225 million, in
line with higher waste volumes (France, United Kingdom, Latin
America and Asia) and volume growth in hazardous waste, offsetting
lower France Water volumes (-1.5% i.e. -€13 million due to
unfavorable climate impact) and a slowdown in Veolia Water
Technologies’ construction activities which benefited in 2017 from
the completion of construction on major projects.
- a commercial effect of +€104 million,
due to numerous industrial contract wins in Europe (in Waste in
Germany and Iberia with new energy efficiency contracts), the
United States (contract wins in Industrial Water and Energy), Latin
America (contract wins in Water in Argentina and Columbia and in
Waste in Chile and Brazil) and in multi-industrial activities
(Arcelor contract).
- an unfavorable weather impact in Energy
of -€22 million in Central Europe in the second quarter.
- Favorable price effects
(+€109 million) are tied to positive tariffs indexations in
France and the United Kingdom in Waste, in Central Europe in Water,
in North America in Water and Hazardous Waste, in Morocco in
electricity, and the impact of higher prices in Waste and Water in
Latin America and Asia.
By business, the change in revenue
compared with represented June 30, 2017 breaks down as follows:
Change 2017 / 2018 (in € million)
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
∆ Current
∆ at constant exchange rates
∆ at constant scope and exchange rates
Water 5,255.7 5,187.6 -1.3% 1.3%
1.2% Waste 4,378.4 4,687.9 7.1% 10.9%
5.2% Energy 2,552.4 2,689.0 5.4%
7.5% 7.9%
Group 12,186.5
12,564.5 3.1% 6.0%
4.1%
WATER
Water revenue increased by +1.3% at constant exchange rates and
+1.2% at constant scope and exchange rates compared to re-presented
figures for the half-year ended June 30, 2017. This improvement can
be explained as follows:
- A positive commerce / volume
(impact of +0.3% excluding construction activity), with increasing
volumes in Central Europe (+0.7%), continued robust commercial
momentum in the Rest of the World (mainly in Latin America),
offsetting the reduced volumes in France (negative impact of the
climate on the second quarter);
- A positive price impact of
+1.1% with higher tariffs notably in Central Europe and Water
price index in France (+0.6%);
- Steady construction activity
(+0.1%) increase in the Rest of the World (particularly in Pacific
and Middle East), coupled with a slow start to the year for
construction activity in Veolia Water Technologies.
WASTE
Waste revenue rose considerably by +10.9% at constant exchange
rates compared to re-presented figures for the half-year June 30,
2017 (+5.2% at constant scope and exchange rates), due to:
- A scope impact of +5.7%:
acquisitions in Germany, in Sweden and Asia, offset by the sale of
the Industrial Services division in the United States (-€91
million);
- A commerce / volume impact of
+4.0% (excluding construction work), with higher waste collection
and treatment volumes in France (+2.8%) and in Rest of the World
(United States, Asia, Latin America and Australia) and a strong
increase of volumes in hazardous waste;
- A positive price effect of +1.6%
(mainly in Latin America, Asia and the UK);
- The negative impact of recyclate
prices (-1.1%, notably due to the fall in paper prices).
ENERGY
Energy revenue rose +7.5% at constant exchange rates compared
with re-presented figures for the half-year ended June 30, 2017
(+7.9% at constant consolidation scope and exchange rates). This
improvement can be explained by:
- A commercial and volume effect
of +3.7% (excluding Construction activity), notably in Central
Europe and due to the development of new contracts in Canada and in
multi-utility industrial activities.
- A positive price effect (+2.2%)
with a strong increase in heating and electricity prices in North
America;
- A negative weather impact
(-0.9%), particularly in Central Europe in the second quarter;
- A negative scope impact (-0.4%)
bound to the disposal of a branch of utilities in Sweden.
2. EBITDA
Change 2017 / 2018 (in € million)
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
∆
∆ at constant exchange rates
France 375.3 373.5 -0.5% -0.5% EBITDA
margin 14.1% 14.1%
Europe, excluding France 721.1 746.1 3.5%
2.6% EBITDA margin 17.0% 16.5%
Rest of the world 409.7 445.0
8.6% 18.4% EBITDA margin 13.4% 13.9%
Global businesses 104.1 105.7
1.5% 2.0% EBITDA margin 4.7% 4.8%
Other 3.6 2.5
Group 1,613.8
1,672.8 3.7% 5.8% EBITDA
margin 13.2% 13.3%
Group consolidated EBITDA for the half-year ended June 30, 2018
was €1,672.8 million, up 5.8% at constant exchange rates on the
prior-year period (re-presented). The EBITDA margin increased from
re-presented 13.2% in the half-year ended June 30, 2017 to 13.3% in
the same period to June 30, 2018.
Changes in EBITDA by segment were as follows:
- In France, EBITDA deteriorated
slightly (-0.5%):
- In Water, cost savings impacted
positively EBITDA and offset the negative impact of volumes
decrease (-€11 million) and price cost squeeze continuation.
- In Waste, EBITDA was down due to the
fall in paper recycling prices (-24% fall in the average selling
price of paper and cardboard compared to June 2017, representing
-€7 million).
- The slight improvement in EBITDA in
Europe excluding France at constant exchange rates (+2.6%)
was the result of several impacts:
- In Central and Eastern Europe, EBITDA
decreased due to higher fuel prices, negative transitory squeeze
prices in Energy in the Czech Republic, Poland and Romania and an
unfavorable weather effect (-€13 million); this decrease was
partially offset by a positive volume effect and operating
efficiency gains;
- Solid growth in EBITDA in the United
Kingdom, with an improved availability of incineration plants and
efficiency gains; lower recycled paper prices were offset by higher
non-ferrous metal prices;
- Increased EBITDA in Northern Europe,
due to scope transactions performed in 2017 in Scandinavia, the
Netherlands and Germany, and further operating efficiency gains in
Belgium and Germany.
- Continued strong EBITDA growth in the
Rest of the world:
- Improvement in the United States,
mainly due to favorable Q1 impacts in Energy (weather impact and
higher electricity prices).
- Higher EBITDA in Latin America, notably
due to new contacts in Water and Waste, tariff increases in Waste
and efficiency gains;
- Sustained EBITDA growth in Asia driven
by revenue growth, partially offset by negative weather impacts,
increasing purchasing prices of coal in China and end of the
Chengdu BOT contract.
- In the Global businesses
segment, very good hazardous waste performance (including the
improvement in the oil recycling business) was offset by the slow
start-up of construction activities in H1 2018 in Veolia Water
Technologies.
The increase in EBITDA between 2017 and 2018 breaks down by
impact as follows:
- The foreign exchange impact on
EBITDA was -€34.4 million and mainly reflects fluctuations in the
U.S. dollar (-€13.6 million), the Argentine peso (- €5.1 million),
the Australian dollar (-€4.8 million), the Brazilian real (-€3.7
million), the pound sterling (-€3.7 million) and the Chinese
renminbi (-€3.2 million).
- The consolidation scope impact
of +€35 million partially relates to developments in 2017 and
notably the integration of Corvara industrial assets and Hans
Andersson recycling assets in Scandinavia and acquisitions in
Germany (Eurologistik) and the Netherlands (Van Scherpenzeel Grope
B.V.), as well as the acquisition of Braunco in Argentina and Grupo
Sala in Colombia in 2018.
- Commerce and volume impacts
totaled +€62 million thanks to strong volume growth in Central
Europe in Water and Energy, solid increase in Waste business
(volume increase of + 4% over the first six months) and strong
commercial development in Asia (Waste and Energy) and in Latin
America (new contracts in Water and Waste).
- Weather impact on EBITDA was
-€24 million, with the impact of an extremely mild second quarter
in Central Europe (-€13 million for the semester) and significant
rain in France (drop of volume by -€11 million).
- Energy and recyclate prices had
a negative impact on EBITDA (-€42 million): the significant
increase in fuel prices and price cost squeeze in Central Europe
(-€20 million), increase of fuel prices in waste (-€10 million) and
negative impact of paper prices (-€12 million mainly in France and
Germany) partially offset by sulfuric acid recovery prices in the
United States.
- The -€63 million impact of the price
cost squeeze and contractual renegotiations mainly relates to
weak price indexation in Water and Waste which only partially
covers pressure on wage increases and other costs.
- Cost savings plans contributed
€148 million. These savings mainly concern operating efficiency
(51%) and purchasing (29%) and were achieved across all
geographical zones: France (26%), Europe excluding France (26%),
Rest of the world (23%), Global businesses (16%) and Corporate
(9%). The guidance of €300 million for fiscal year 2018 is
confirmed.
3. CURRENT
EBIT
Group consolidated current EBIT for the half-year ended June 30,
2018 was €791.7 million, up 6.8% at constant exchange rates on H1
2017 re-presented.
Reconciling items for H1 2017 re-presented
versus H1 2018 between EBITDA and Current EBIT are as follows:
(in € million)
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
EBITDA 1,613.8 1,672.8 Renewal
expenses (130.3) (135.0) Depreciation and
amortization (*) (825.7) (824.6) Provisions, fair
value adjustments & other: 54.0 20.3 • Current
impairment of property, plant and equipment, intangible assets and
operating financial assets 9.9 (5.1) • Net charges to
operating provisions, fair value adjustments and other 36.6
21.8 • Capital Gains or losses on industrial divestitures
7.5 3.6 Share of current net income of joint ventures
and associates 48.1 58.3
Current EBIT
759.9 791.7
(*) Including principal payments on operating financial assets
(OFA) of -€71.6 million for the half-year ended June 30, 2018
(compared to re-presented -€90.2 million for the half-year ended
June 30, 2017).
The improvement in current EBIT at constant exchange rates
reflects:
- EBITDA growth;
- the increase in amortization charges at
constant exchange rates (-€33.8 million or +4.6% compared to the
half-year ended June, 2017), in line with the development of the
Group’s activities and consolidation scope impacts;
- the decline in principal payments on
operating financial assets in 2018 (from -€90.2 million to -€71.6
million) mainly relating to contract completions , including
Chengdu in China in 2017 in Korea;
- the unfavorable change in provisions,
fair value adjustments and other, primarily due to:
- the unfavorable change in the net
reversal of the operating provisions and the net impairment losses
on assets (particularly the reversal of the provision for captive
insurance (+€6.7 million) in the first-half of 2017);
- industrial capital gains and losses
slightly below that of June 30, 2017 (+€3.6 million in H1 2018,
compared to +€7.5 million in H1 2017);
- partially offset by an improvement in
the contribution of equity-accounted entities;
The foreign exchange impact on Current EBIT was -€20.1
million and mainly reflects fluctuations in the U.S. dollar (-€9.2
million), the Chinese renminbi (-€3.0 million), the Argentine peso
(-€4.2 million), the Brazilian real (-€2.4 million), the Australian
dollar (-€1.3 million) and the pound sterling (-€2.2 million),
partially offset by favorable fluctuations in the Czech crown
(+€6.5 million).
Changes in current EBIT by segment were
as follows:
Change 2017 / 2018 (in € million)
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
∆
∆ at constant exchange rates
France 67.7 49.8 -26.5% -26.5% Europe,
excluding France 417.9 430.3 3.0% 1.8%
Rest of the world 232.9 270.9 16.3%
27.2% Global businesses 48.7 51.1 4.9%
4.2% Other (7.3) (10.3) n/a n/a
Group 759.9 791.7
4.2% 6.8%
4. NET FINANCIAL EXPENSE
(in € million )
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
Net finance costs (1) (210.3)
(199.5) Net gains / losses on loans and receivables
1.4 5.7 Net income (loss) on available-for-sale assets
2.3 1.6 Assets and liabilities at fair value through
the Consolidated Income Statement 0.1 (0.1) Foreign
exchange gains and losses (7.8) (3.0) Unwinding of
the discount on provisions (19.4) (12.1) Interest on
concession liabilities (44.5) (45.5) Other
(5.8) (11.6)
Other current financial income and expenses
(2) (73.7) (65.0) Gains (losses) on
disposals of financial assets (*) 4.5 18.8
Current
net financial expense (1)+(2) (279.5)
(245.7) Other non-current financial income and expenses
- -
Net financial expense
(279.5) (245.7) (*) including costs of
disposal of financial assets
COST OF NET FINANCIAL DEBT
The cost of net financial debt totaled -€199.5 million for the
half-year ended June 30, 2018, versus re-presented -€210.3 million
for the half-year ended June 30, 2017, thanks to continued active
debt management and the decrease of the treasury carrying-cost.
The financing rate also decreases at 4.42% for the half-year
ended June 30, 2018, compared to re-presented 4.99% for the
half-year ended June 30, 2017 (and 4.94% for the half-year ended
December 31, 2017).
OTHER FINANCIAL INCOME AND EXPENSES
Other financial income and expenses totaled -€65.0 million for
the half-year ended June 30, 2018, versus re-presented -€73.7
million for the half-year ended June 30, 2017.
These expenses include interest on concession liabilities
(IFRIC 12) of -€45.5 million and the unwinding of
discounts on provisions of -€12.1 million, in improvement
compared to June 30, 2017 re-presented.
Capital gains on financial divestitures recorded in the
first-half of 2018 of €18.8 million, include a capital gain of +
€36 million on the sale of the Industrials services activity in the
United-States and fair value adjustments of assets held for sale in
Europe excluding France. For the represented half-year ended June
30, 2017, (capital gains on financial divestitures totaled €4.5
million which included a capital gain of +€11 million on the sale
of Lanzhou in China and -€9 million in respect of the fair value
adjustment of Mehrum).
5. INCOME
TAX EXPENSE
The current income tax expense for the half-year ended June 30,
2018 is -€129.5 million (and €123.4 million excluding taxes on
capital gains), compared to -€110.8 million for the half-year ended
June 30, 2017 re-presented.
The current tax rate for the half-year ended
June 30, 2018 is stable to 26.3% (versus re-presented 25.9% for the
half-year ended June 30, 2017) after adjustment of the impact of
financial divestitures, and non-recurring items within net income
of fully controlled entities and the share of net income of
equity-accounted companies.
(In € million)
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
Current income before tax (a) 480.3
546.0 Of which share of net income of joint ventures &
associates (b) 48.1 58.3 Of which gains (losses) on
disposals of financial assets (c) 4.5 18.8
Re-presented current income before tax: (d)=(a)-(b)-(c)
427.7 468,9 Re-presented tax expense
(e) (110.8) (123.4) Re-presented
tax rate on current income (e)/(d) 25.9%
26.3%
The total tax expense, including the impact of non-recurring
items and including taxation of the capital gain on the disposal of
the Industrial Services division in the United States of USD 9
million, reaches €124.0 million, compared to €106.1 million for the
half-year ended June 30, 2017 re-presented.
6. CURRENT
NET INCOME / NET INCOME ATTRIBUTABLE TO OWNERS OF THE
COMPANY
The share of net income attributable to non-controlling
interests totaled -€87.3 million for the half-year ended June
30, 2018, compared to -€78.1 million for the half-year ended June
30, 2017 re-presented.
Net income attributable to owners of the Company was €225.4
million for the half-year ended June 30, 2018, compared to
€198.5 million for the half-year ended June 30, 2017
re-presented.
Current net income attributable to owners of the Company was
€328.9 million for the half-year ended June 30, 2018, compared
to €289.6 million for the half-year ended June 30, 2017
re-presented.
This improvement is attributable to the increase in current
EBIT, the decrease in the net finance cost and higher capital gains
on financial divestitures in H1 2018 (disposal of the Industrial
Services division in the United States) compared to H1 2017
re-presented. Excluding capital gains and losses on financial
divestitures net of tax and minority interests, current net income
attributable to owners of the Company rose 13.3% at constant
exchange rates to €316 million from re-presented €288 million for
the half-year ended June 30, 2017.
Based on a weighted average number of outstanding shares of
550,687 thousand (basic), and 574,478 thousand (diluted), for the
half-year ended June 30, 2018, compared to 550,713 thousand (basic)
and 574,505 thousand (diluted) for the half-year ended June 30,
2017, net income attributable to owners of the Company per share
for the half-year ended June 30, 2018 was €0.29 (basic) and €0.28
(diluted) compared to re-presented €0.24 (basic) and €0.23
(diluted), for the half-year ended June 30, 2017.
Current net income attributable to owners of the Company per
share was €0.60 (basic) and €0.57 (diluted) for the half-year ended
June 30, 2018, compared to re-presented €0.53 (basic) and €0.50
(diluted) for the half-year ended June 30, 2017.
The dilutive effect taken into account in the above earnings per
share calculation concerns the OCEANE bonds convertible into and/or
exchangeable for new and/or existing shares issued in March
2016.
Net income (loss) attributable to owners of the
Company for the half-year ended June 30, 2018 breaks down as
follows:
(In € million) Current Non-
current
Total EBIT 791.7 (62.7) 729.0
Cost of net financial debt (199.5)
(199,5) Other financial income and expenses (46.2)
(46.2)
Pre-tax net income (loss)
546.0 (62.7) 483.3 Income tax
expense (129.5) 5.5 (124.0) Net income (loss)
of other equity-accounted entities 0.0 0.0 0.0
Net income (loss) from discontinued operations 0.0
(46.6) (46.6) Attributable to non-controlling interests
(87.6) 0.3 (87.3)
Net income (loss)
attributable to owners of the Company 328.9
(103.5) 225.4
For the half-year ended June 30, 2018, the Net
income (loss) from discontinued operations is mainly due to the
classification of Gabon in discontinued operations for -€44.5
million.
For the re-presented half-year ended June
30, 2017, net income (loss) attributable to owners of the
Company breaks down as follows:
(In € million) Current Non-
current
Total EBIT 759.8 (125.7) 634.1
Cost of net financial debt (210.3)
(210.3) Other financial income and expenses (69.2)
(69.2)
Pre-tax net income (loss)
480.3 (125.7) 354.6 Income tax
expense (110.8) 4.7 (106.1) Net income (loss)
of other equity-accounted entities 0.0 13.5
13.5 Net income (loss) from discontinued operations 0.0
14.6 14.6 Attributable to non-controlling interests
(79.9) 1.8 (78.1)
Net income (loss)
attributable to owners of the Company 289.6
(91.1) 198.5
The reconciliation of Current EBIT with
operating income, as shown in the income statement, is as
follows:
(In € million)
Half-year ended June 30, 2017
re-presented
Half-year ended June 30,
2018
Current EBIT 759.9 791.7
Impairment losses on goodwill and negative goodwill 0
(0.1) Charges, amortization and non-current provisions
(27.5) (12.1) Restructuring costs (90.4)
(41.8) Personnel costs - share-based payments (4.9)
(6.2) Share acquisition costs, with or without acquisition of
control (2.9) (2.5)
Total non-current items
(125.7) (62.7) Operating income
after share of net income of equity-accounted entities
634.1 729.0
Restructuring charges for the half-year ended June 30, 2018 are
mainly due to restructuring costs in the United States (-€7.7
million) and Global Businesses (-€13.6 million). The impact of
restructuring on Water France is non-significant on operating
income, incurred costs offset by equivalent provisions
reversals.
D] FINANCING
The following table summarizes the change in
net financial debt and net free cash flow:
(in millions of euro)
Half-year ended June 30, 2017
re-presented
Half-year ended June30,
2018
EBITDA 1,613.8 1,672.8 Net
industrial investments (568.0) (691.8) Change in
operating WCR (707.8) (789.8) Dividends received from
equity-accounted entities and joint ventures 57.2
94.9 Renewal expenses (130.3) (135.0) Other
non-current expenses and restructuring charges (72.0)
(118.9) Interest on concession liabilities (44.5)
(45.5) Financial items (current cash financial expense, and
operating cash flow from financing activities) (211.0)
(203.6) Taxes paid (130.9) (104.4)
Net free
cash flow before dividend payment, financial investments and
financial divestitures (193.5)
(321.2) Dividends paid (594.4) (617.5) Net
financial investments (111.0) (302.7) Change in
receivables and other financial assets (13.7) (48.3)
Issue / repayment of deeply subordinated securities 0.0
0.0 Proceeds on issue of shares 23.5 (13.4)
Free cash flow (889.1) (1,303.1)
Effect of foreign exchange rate movements and other (*)
147.9 (1,472.7)
Change (741.1)
(2,775.8) Net financial debt at the beginning of the period
(7,812.1) (7,833.2)
Net financial debt at the end of the
period
(8,553.2) (10,609.0)
(*) The effect of foreign exchange rate and other movements as
of June 30, 2018 includes the redemption of the hybrid debt in the
amount of €1,452 million and the favorable impact of the Polish
zloty and the Brazilian real, offset by the unfavorable impact of
the Hong Kong dollar, the U.S. dollar and the Chinese renminbi.
Net free cash flow before dividend payments and net financial
investments was -€321 million for the half-year ended June 30,
2018 (versus re-presented -€194 million for the half-year ended
June 30, 2017).
The change in net free cash flow compared to the re-presented
figure for the year ended June 30, 2017 primarily reflects improved
EBITDA, offset by a less favorable change in operating working
capital requirements (-€82 million), in line with the development
of Group activities, greater net industrial investments (€124
million) driven by an increase in growth projects finalized
compared to the first-half of 2017, partially offset by an increase
in dividends received from associates.
Overall, net financial debt is -€10,609 million
(including the redemption of the hybrid debt in the amount of
€1,452 million in April 2018), compared to -€8,553 million as of
June 30, 2017 re-presented.
In addition to the change in net free cash flow, net financial
debt was impacted by unfavorable exchange rate fluctuations
totaling -€25 million in H1 2018.
1. INDUSTRIAL AND FINANCIAL
INVESTMENTS
1.1 Industrial investments
Total Group gross industrial investments, including new
operating financial assets, amounted to €712 million for the
half-year ended June 30, 2018, compared to re-presented €593
million for the half-year ended June 30, 2017.
Industrial investments, excluding discontinued
operations, break down by segment as
follows:
Half-year ended June 30, 2018 (in €
million)
Maintenance and contractual requirements
(1)
Discretionary growth
Total gross industrial
investments (2)
Industrial divestitures
Total net industrial
investments
France 154 9
163 (4)
159 Europe, excluding France 220 26
246 (8)
238 Rest of the world
165 79
244 (1)
244 Global
businesses 41 7
48 (7)
41 Other 11 0
11 0
11 Group 591 121
712 (20) 692
(1) Of which maintenance investments
of €285 million, and contractual investments of €306 million(2) Of
which new OFA in the amount of -€56 million
Half-year ended June 30, 2017 re-presented
(in € million)
Maintenance and contractual requirements
(1)
Discretionary growth
Total gross industrial
investments (2)
Industrial divestitures
Total net industrial
investments
France 142 2
144 (6)
138 Europe, excluding France 190 30
220 (12)
199 Rest of the world
137 35
172 (3)
169 Global
businesses 42 0
42 (4)
38 Other 15 0
15 0
15 Group 526 67
593 (25) 568
(1) Of which maintenance investments of €278
million, and contractual investments of €248 million(2) Of which
new OFA in the amount of -€27 million
At constant exchange rates, gross industrial investments
increased 23% on the first-half of 2017, due to the increase of
discretionary growth industrial investments by + 58% compared to
the half-year ended June 30, 2017 re-presented. These investments
concern, among others, the development projects in Asia in biomass,
the incineration of hazardous waste and energy services to
industrialists as well as the development of connections to heat
networks in Central Europe.
The ratio maintenance Investments over revenue remains steady
compared to 2017 (2.3%).
1.2 Financial investments and divestitures
Financial investments amounted to €432 million for the
half-year ended June 30, 2018 (including acquisition costs and net
financial debt of new entities) and notably include the impacts
arising from the acquisition of Grupo Sala in Colombia (€167
million), minority interests in Veolia Energie Ceska Republika a.s.
in the Czech Republic (€85 million) and ACPTCL in India (€43
million). For the half-year ended June 30, 2017 re-presented,
financial investments (re-presented -€177 million, including net
financial debt of new entities) mainly related to the acquisition
of Enovity in the United States (-€28 million) and Uniken in Korea
(-€66 million).
Financial divestitures totaled €129 million for the
half-year ended June 30, 2018 (including disposal costs) and mainly
include the sale of the Industrial Services division in the United
States (€94 million) and the payment of the receivable relating to
the sale of the Group’s activities in Israel in 2015 (€25 million).
For the half-year ended June 30, 2017, financial divestitures (€65
million) included the sale of Affinity in the United Kingdom and
Beiyuan in China.
2. OPERATING WORKING CAPITAL
REQUIREMENTS
The change in operating working capital requirements (excluding
discontinued operations) was -€790 million for the half-year ended
June 30, 2018, compared with re-presented -€708 million for the
half-year ended June 30, 2017.
This variation between the two periods was mainly due to a
marked rise in fuel stocks, and an increasing working capital in
line with increasing activity in the first six months of 2018 (+6%
at constant exchange).
The change in operating working capital requirements compared to
December 31, 2017, is mainly due to seasonal effects.
3. EXTERNAL FINANCING
3.1 Structure of net financial debt
(in millions of euro)
For the year ended June 30, 2017,
re-presented
As of June 30, 2018
Non-current borrowings 9,022.4 9,005.3 Current
borrowings 4,348.2 4,630.1 Bank overdrafts and other
cash position items 341.8 261.4
Sub-total
borrowings 13,712.4 13,896.8 Cash
and cash equivalents (4,825.6) (2,929.4) Fair value
gains (losses) on hedge derivatives (2.4) 2.6 Liquid
assets and financing-related assets (331.2) (361.0)
Net financial debt 8,553.2
10,609.0
As of June 30, 2018, net financial debt (1) after hedging is 87%
at fixed rates and 13% at floating rates.
The average bond issue maturity was 8 years as of June 30, 2018
compared to 8.9 years as of June 30, 2017.
3.2 Group liquidity position
Liquid assets of the Group as of June 30, 2018
break down as follows:
(in millions of euro)
June 30, 2017 re-presented
June 30, 2018
Veolia Environnement: Undrawn
syndicated loan facility 3,000.0 3,000.0 Undrawn MT
bilateral credit lines 925.0 925.0 Undrawn ST
bilateral credit lines - - Letters of credit facility
53.6 66.6 Cash and cash equivalents (1)
4,174.2 2,190.9
Subsidiaries:
Cash and cash equivalents (1) 982.6 1,099.5
Total liquid assets 9,135.4
7,282.0 Current debt, bank overdrafts and other cash
position items Current debt
4,348.2 4,630.1 Bank overdrafts and other cash position
items 341.8 261.4
Total current debt and bank
overdrafts 4,690.0 4,891.5 Total
liquid assets net of current debt and bank overdrafts and other
cash position items 4,445.4 2,390.5
(1) Including liquid assets and
financing-related assets included in net financial debt.
The decrease in net liquid assets mainly reflects the
reimbursement of Hybrid in April 2018 of €1,452 million. Veolia
Environnement may draw on the multi-currency syndicated loan
facility and all credit lines at any time. On November 6, 2015,
Veolia Environnement signed a new multi-currency syndicated loan
facility in the amount of €3 billion, initially maturing in 2020
and extended to 2022 in October 2017, with the possibility for
drawdowns in Eastern European currencies and Chinese renminbi.
This syndicated loan facility was not drawn down as of June 30,
2018. Veolia Environnement has bilateral credit lines for a total
undrawn amount of €925 million as of June 30, 2018.
As of June 30, 2018, the U.S. dollar bilateral letters of credit
facility was drawn by USD 107.3 million. The portion that may be
drawn in cash amounted to USD 77.7 million (€66.6 million
equivalent), undrawn and recorded in the liquidity table above.
APPENDIX
Reconciliation of 2017 published data for
the six months ended June 30, 2017 with represented data
(in €m)
June 2017
published
IFRS 5
Adjustement(2)
IFRS 9 Adjustment
June 2017 represented
Revenue 12,346.5 -160.0
0.0
12,186.5 EBITDA 1,651.4 -32.2 -5.4
1,613.8 Current EBIT(1) 773.8 -8.5 -5.4
759.9 Operating Income 648.1 -8.5 -5.4
634.2 Current net income – Group share 295.2
+0.4 -6.0
289.6 Current net income 204.6 0.0
-6.0
198.5 Gross industrial investments -593
0.0 0.0
-593 Net free cash-flow -176 -17.1
-0.3
-193 Net financial debt -8,561 0.0 8.1
-8,553
(1) Including the
re-presented share of current net income of joint ventures and
associates for the three months ended June 30,
2017.(2) Figures for the six months ended June, 2017
were re-presented accordingly to ensure comparability, following
the reclassification of the Group’s activities in Gabon in “Net
income from discontinued operations” in accordance with IFRS 5.
(in €m)
June 2017
published
IFRS 5 Adjustment
IFRS 9 Adjustment
June 2017 represented
France 2,663.4 0.0 0.0
2,663.4 Europe excluding France 4,233.6 0,0
0.0
4,233.6 Rest of the World 3,227.7 -160.0
0.0
3,067.7 Global businesses 2,204.0 0.0 0.0
2,204.0 Other 17.9 0.0 0.0
17.9
Total Revenue 12,346.5 -160.0 0.0
12,186.5 (in
€m)
June 2017
published
IFRS 5 Adjustment
IFRS 9 Adjustment
June 2017 represented
France 375.3 0.0 0.0
375.3 Europe excluding France 725.6 0,0 -4.4
721.1 Rest of the World 442.8 -32.2 -1.0
409.7 Global businesses 104.1 0.0 0.0
104.1 Other 3.6 0.0 0.0
3.6 Total
EBITDA 1,651.4 -32.2 -5.4
1,613.8 (in €m)
June
2017
published
IFRS 5 Adjustment
IFRS 9 Adjustment
June 2017 represented
France 67.7 0.0 0.0
67.7 Europe excluding France 422.4 0.0 -4.4
417.9 Rest of the World 242.4 -8.5 -1.0
232.9 Global businesses 48.7 0.0 0.0
48.7 Other -7.3 0.0 0.0
-7.3 Total
Current EBIT 773.8 -8.5 -5.4
759.9
Consolidated income statement
(€ million)
Half-year ended June 30,
2017 represented (1)
Half-year ended June 30,
2018
Revenue 12,186.5 12,564.5 Cost
of sales -10,072.9 -10,447.4 Selling costs
-307.6 -297.6 General and administrative expenses
-1,094.3 -1,086.1 Other operating revenue and expenses
-125.7 -62.7
Operating income before share of net
income (loss) of equity-accounted entities 586.0
670.7 Share of net income (loss) of
equity-accounted entities 48.1 58.3
o/w share of net income (loss) of joint ventures 35.2
30.1 o/w share of net income (loss) of associates 12.9
28.2
Operating income after share of net income (loss) of
equity-accounted entities 634.1
729.0 Net finance costs -210.3 -199.5 Other
financial income and expenses -69.2 -46.2
Pre-tax
net income (loss) 354.6 483.3
Income tax expense -106.1 -124.0 Share of net income
(loss) of other equity-accounted entities 13.5 -
Net income (loss) from continuing operations (1)
262.0 359.3 Net income (loss) from
discontinued operations (1) 14.6 -46.6
Net income
(loss) for the period 276.6 312.7
Attributable to owners of the Company 198.5
225.4 Attributable to non-controlling interests
78.1 87.3
NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS
OF THE COMPANY PER SHARE - -
Diluted 0.24 0.29 Basic 0.23 0.28
NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO
OWNERS OF THE COMPANY PER SHARE - - Diluted
0.21 0.37 Basic 0.20 0.36
NET INCOME
(LOSS) FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO OWNERS OF THE
COMPANY PER SHARE - - Diluted 0.03
-0.08 Basic 0.03 -0.08 (1) 2017
adjustments concern the reclassification of Gabon in discontinued
operations in accordance with IFRS 5 and the impact of IFRS 9
first-time application.
Consolidated statement of financial position
- assets
(€ million)
As of December 31, 2017
represented
As of June 30, 2018
Goodwill 4,915.7 5,051.9 Concession intangible assets
3,475.3 3,444.4 Other intangible assets
1,017.1 1,049.9 Property, plant and equipment 7,294.4
7,255.3 Investments in joint ventures 1,506.1
1,511.8 Investments in associates 607.8 279.3
Non-consolidated investments 70.6 59.7 Non-current
operating financial assets 1,416.8 1,402.2
Non-current derivative instruments - Assets 27.1 41.2
Other non-current financial assets 348.6 338.7
Deferred tax assets 965.1 1,010.3
Non-current
assets 21,644.6 21,444.7
Inventories and work-in-progress 721.6 753.0
Operating receivables 8,489.5 9,181.5 Current
operating financial assets 197.3 93.7 Other current
financial assets 404.6 631.9 Current derivative
instruments - Assets 69.9 89.9 Cash and cash
equivalents 6,263.9 2,929.4 Assets classified as held
for sale 487.3 668.1
Current assets
16,634.1 14,347.5 TOTAL ASSETS
38,278.7 35,792.2
Consolidated statement of financial position
- equity and liabilities
(€ million)
As of December 31, 2017
represented
As of June 30, 2018
Share capital 2,816.8 2,816.8 Additional paid-in
capital 7,161.2 7,161.2 Reserves and retained
earnings attributable to owners of the Company -2,497.8
-4,365.5
Total equity attributable to owners of the
Company 7,480.2 5,612.5 Total
equity attributable to non-controlling interests 1,153.7
1,101.3
Equity 8,633.9
6,713.8 Non-current provisions 1,941.6 1,796.4
Non-current borrowings 9,457.4 9,005.3 Non-current
derivative instruments - Liabilities 108.4 88.3
Concession liabilities - non current 1,281.2 1,272.0
Deferred tax liabilities 970.1 1,030.4
Non-current
liabilities 13,758.7 13,192.4
Operating payables 10,118.0 10,099.3 Concession
liabilities - current 85.8 103.7 Current provisions
577.0 527.4 Current borrowings 4,607.0
4,630.1 Current derivative instruments - Liabilities 49.1
76.5 Bank overdrafts and other cash position items
208.9 261.4 Liabilities directly associated with assets
classified as held for sale 240.3 187.6
Current
liabilities 15,886.1 15,886.0
TOTAL EQUITY AND LIABILITIES 38,278.7
35,792.2
Consolidated cash-flow statement
(€ million)
Half-year ended June 30,
2017 represented (1)
Half-year ended June 30,
2018
Net income (loss) for the period 276.6
312.7 Net income (loss) from continuing operations
262.0 359.3 Net income (loss) from
discontinued operations 14.6 -46.6
Operating depreciation, amortization, provisions and impairment
losses 745.2 678.9 Financial amortization and
impairment losses 1.0 1.2 Gains (losses) on disposal
of operating assets -7.5 -3.6 Gains (losses) on
disposal of financial assets -6.7 -25.3 Share of net
income (loss) of joint ventures -35.2 -30.1 Share of
net income (loss) of associates -26.4 -28.2 Dividends
received -2.2 -1.6 Net finance costs 210.3
199.5 Income tax expense 106.1 124.0 Other
items 72.6 53.2
Operating cash flow before changes
in operating working capital (2) 1,319.2
1,327.3 Change in operating working capital
requirements -707.8 -789.8 Change in concession
working capital requirements -62.5 -72.9 Income taxes
paid -130.9 -104.4
Net cash from operating
activities of continuing operations 418.0
360.2 Net cash from operating activities of discontinued
operations 42.3 2.4 Net cash
from operating activities 460.3
362.6 Industrial investments, net of grants -499.5
-575.8 Proceeds on disposal of industrial assets 24.8
20.0 Purchases of investments -122.3 -259.3
Proceeds on disposal of financial assets 89.2 132.4
Operating financial assets - - New operating
financial assets -26.9 -55.4 Principal payments on
operating financial assets 90.2 71.6 Dividends
received (including dividends received from joint ventures and
associates) 57.2 94.9 New non-current loans granted
-81.9 -66.7 Principal payments on non-current loans
63.7 58.9 Net decrease/increase in current loans
4.5 -40.5
Net cash used in investing activities of
continuing operations -401.0 -619.9
Net cash used in investing activities of discontinued
operations -7.8 0.2 Net cash
used in investing activities -408.8
-619.7 Net increase (decrease) in current borrowings
-915.3 -561.9 (€ million)
Half-year ended June 30,
2017 represented (1)
Half-year ended June 30,
2018
Repayment of hybrid debt - -1,452.1 New non-current
borrowings and other debts 1,343.0 133.9 Principal
payments on non-current borrowings and other debts -57.3
-77.0 Change in liquid assets and financing financial assets
-317.9 -185.8 Proceeds on issue of shares 13.4
2.1 Share capital reduction - - Transactions
with non-controlling interests: partial purchases -3.8
-86.3 Transactions with non-controlling interests: partial
sales 0.4 1.3 Proceeds on issue of deeply
subordinated securities - - Coupons on deeply
subordinated securities -67.8 -66.4 Purchases
of/proceeds from treasury shares 23.5 -13.4 Dividends
paid -526.5 -550.9 Interest paid -267.6
-217.9 Interest on operating assets - IFRIC 12 -44.5
-45.5
Net cash from (used in) financing activities of continuing
operations -820.4 -3,119.9 Net
cash from financing activities of discontinued operations
-1.1 -0.1 Net cash from (used in)
financing activities -821.5
-3,120.0 Effect of foreign exchange rate changes and other
-28.7 -10.2
Increase (decrease) in external net
cash of discontinued operations 9.0 0.3
Net
cash at the beginning of the year 5,273.5
6,055.0 Net cash at the end of the year
4,483.8 2,668.0 Cash and cash equivalents
4,825.6 2,929.4 Bank overdrafts and other cash
position items 341.8 261.4
Net cash at the end of
the year 4,483.8 2,668.0 (1) 2017
adjustments concern the reclassification of Gabon in discontinued
operations in accordance with IFRS 5.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180731006081/en/
Veolia Group Media RelationsLaurent ObadiaSandrine
GuendoulTél : + 33 (0)1 85 57 42
16sandrine.guendoul@veolia.comorInvestor & Analyst
RelationsRonald Wasylec - Ariane de LamazeTél. : + 33 (0)1 85
57 84 76 / 84 80
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