THESE VERY GOOD RESULTS CONFIRM THE
EFFECTIVENESS OF OUR VALUE-CREATION MODEL AND THE STRONG
CONTRIBUTION OF THE INTEGRATION OF SUEZ
2023 TARGETS FULLY CONFIRMED, WITH EBITDA
GROWTH NOW EXPECTED TO BE AT THE TOP END OF THE RANGE OF +5% to
+7%
- REVENUE OF €22 755 M , SHARPLY UP BY+14.2 %1 DRIVEN BY
COMMERCIAL MOMENTUM AND PRICE INCREASES
- GROWTH OF +5.2%1 EXCLUDING ENERGY PRICES
- EBITDA OF €3 162 M , A STRONG ORGANIC GROWTH OF +8.2 %1
- €84 M OF SYNERGIES (€230 M CUMULATED) , AHEAD OF THE ANNUAL
TARGET OF MORE THAN €280 M CUMULATED, AND CONTINUED EFFICIENCY
GAINS, WITH €187 M DELIVERED IN H1, AHEAD OF THE ANNUAL OBJECTIVE
OF €350 M
- CURRENT EBIT STRONGLY UP, BY +13.3 %1, TO €1 674 M2
- VERY STRONG GROWTH OF +18.7 %3 OF CURRENT NET INCOME, TO
€662 M2
- STRONG IMPROVEMENT OF NET FREE CASH FLOW AND NET FINANCIAL
DEBT UNDER CONTROL, AT €19.2 BN2
- 2023 TARGETS FULLY CONFIRMED, AND EBITDA ORGANIC GROWTH NOW
EXPECTED AT THE TOP END OF THE +5% TO +7% RANGE
1 at constant scope and forex 2 Excluding purchase price
allocation (PPA) of Suez. 3 At constant forex
Regulatory News:
Veolia Environnement (Paris:VIE):
Estelle Brachlianoff, CEO of the Group, commented : “I am
very pleased to announce another set of excellent results for
Veolia, with strong growth and a new all-time high, despite the
unfavorable macroeconomic context. This very good performance, with
revenue up 14.2% and current net income up 19%, reflects our
commercial dynamism and our operational excellence, and confirms
our low sensitivity to economic cycles. These results demonstrate
the relevance of our value-creation model and of our strategic
positioning, based on the complementary nature of our three
businesses (Water, Waste and Energy), our diversified global
footprint, with 40% of our activities outside Europe, and our
leadership position in strategic markets. They also reflect the
Group's new profile and the success of the merger with Suez. In
just under 18 months, we have already generated €230 million in
synergies and are ahead of schedule. 2023 has therefore got off to
a perfect start for Veolia, and the second half of the year should
also follow a favorable trend, which means that I can confirm our
objectives for the year as a whole and now aim for the top end of
the EBITDA growth range. Our ideal positioning as a leader in
ecological transformation, a growth market as illustrated, for
example, by the many contracts we have won since the beginning of
the year to help our clients cope with the scarcity of water
resources, puts Veolia on a sustainable growth trajectory.”
Detailed results at 30 June 2023
- Revenues for the first half of 2023 amounted to €22,755
million, compared with €20,196 million for the first half of 2022,
up 14.2% on a like-for-like basis, and up 5.2% excluding the impact
of energy prices.
Revenue growth by effect breaks down as follows:
The currency effect was a negative
€293 million (-1.4% of revenue), mainly reflecting the depreciation
of the Argentinean, British, Australian and Chinese currencies,
partially offset by the appreciation of the US dollar, the Czech
koruna and the Chilean peso.
The scope effect was almost neutral,
at -€20 million (-0.1% of revenues), and was due to the combination
of the anti-trust disposals linked to the acquisition of Suez and
the full-year consolidation of Suez assets (17 more days)
The Commerce/Volumes/Works effect
amounted to +564 million euros (+2.8% of revenue) thanks to the
good performance of the energy business and growth in the Water
Technology business.
The climate effect was slightly
negative, at -54 million euros (-0.3% of revenue), reflecting the
mild winter in Central and Eastern Europe.
The impact of energy prices, net of
recyclate prices, amounted to €1,584 million (7.8% on
revenues), reflecting the sharp rise in heat and electricity
tariffs for €1,821 million notably in Central and Eastern Europe,
partially offset by the effect of the fall in recycled materials
prices (-€237 million).
The price effect in Water and Waste
was a positive €779 million (+3.9% on revenue). This reflects price
indexation mechanisms and increases in the price of the Group's
services of +4.4% on average in Water and +4.9% in Waste.
- Revenue at 30 June 2023 progressed across all operating
segments compared to 30 June 2022.
- Revenue in France and Special Waste
Europe reached 4 795 million euros, an organic growth of +1.5 %
compared with 30 June 2022 :
- Water France revenue increased by +0.8 % This was mainly
due to tariff increases, which compensated for the return of the
Lyon contract to public service management. Billed volumes were
down by 2.8% due to generally unfavorable weather conditions in the
second quarter.
- Waste France revenue decreased by -0.6 % mainly as a
result of lower prices for recycled materials, partially offset by
higher prices for services and energy sold, commercial selectivity
and lower volumes.
- The Hazardous Waste business in Europe grew slightly,
with prices for waste treatment services continuing to trend
upwards, offset by a fall in the price of recycled oils.
- SADE grew by +4.0%, thanks to continued strong sales
activity.
- Revenues in Europe excluding France
grew to €9,883 million at 30 June 2023, up 23.2% organically,
thanks mainly to higher energy prices in Central and Eastern
Europe..
- In Central and Eastern Europe, revenue rose by a strong
+41.5% to €6,130 million. Business in the region was driven by the
favorable impact of price rises in heat and electricity. The Energy
climate effect was slightly unfavorable (-30 million euros).
- In Northern Europe, revenue rose by 5.2% to €1,989
million. In the United Kingdom, sales rose by 5.9% on a
like-for-like basis, thanks in particular to the good performance
of municipal waste collection activities, higher selling prices for
electricity generated by incinerators, and the start-up of
contracts linked to the UK government's decarbonisation plan.
Organic growth in Belux was +4.7%.
- In Italy, revenues were down 11.4% at €500 million, due
to the fall in energy prices, which had no impact on
profitability.
- In Spain and Portugal, revenue was up 10.8% at €1,263
million, both in Energy and Water, with water volumes up 1.3% and
tariff increases.
- Sales in the Rest of the World
reached €5,883 million, up 12.1% on a like-for-like basis..
- Revenue in Latin America rose by 28.1% to €955 million,
thanks to strong tariff indexation, particularly in Argentina,
where revenue more than doubled, and to strong Water in Chile.
- In Africa Middle East, business grew by +15.8% to €1,029
million thanks to new Water contracts and growth in energy services
in the Middle East.
- In North America, revenue totalled €1,631 million, up
+9% thanks to continued buoyant activity, a very favorable mix
effect and continued price rises for hazardous waste services, as
well as the effect of higher tariffs and volumes increases (+5.2%)
in Water.
- Revenues in Asia returned to a healthy growth path,
rising by +7.0% to €1,280 million. Sales in China rose by 2.8%,
while South Korea, Japan, Taiwan and Hong Kong continued to enjoy
sustained growth.
- In the Pacific region, revenue rose by 7.5% to €988
million, thanks to a good commercial performance in the Australian
waste business and the industrial maintenance business..
- Water Technologies recorded solid
growth of +9.0% to € 2,183 million. Veolia Water Technologies grew
by 4.6% to € 731 million thanks to services and technologies, and
WTS by 11.4% to €1,452 million, mainly in engineering systems and
chemical sales.
- Revenue growth by business. The 14.2% growth in revenue was
driven primarily by strong growth in Energy, due to the sharp rise
in the price of energy sold. Excluding the impact of energy prices,
organic growth was 5.2%.
- Water revenue rose by +8.4% to €8,834 million, with
volumes up +4.3% (+0.6% in Central and Eastern Europe, -2.8% in
France, +1.3% in Spain, +1.4% in Chile and +5.2% in the United
States), the full effect of tariff indexation in all geographies
(+4.4% overall) and good growth in the Water Technologies
business.
- Revenue from the Waste business showed the same trends
as in the first quarter. Like-for-like sales rose by 3.3% to €7,344
million. The volume effect was -0.2%, more than offset by the
commerce effect (+0.7%), and the effect of price increases was
+4.9%, partly offset by the fall in prices for recyclates (paper,
cardboard and plastics), which had a negative impact of -3.0% on
revenue growth.
- Energy revenues totalled €6,578 million, a very strong
increase (+41.3% on a like-for-like basis), mainly due to higher
prices for heat and electricity sold, reflecting the very sharp
rise in the cost of purchased energy (gas, coal, biomass). The
weather effect was slightly unfavorable at -0.7%, due to a mild
winter.
- Strong growth in EBITDA, to €3,162m from €2,953m at 30 June
2022, representing like-for-like growth of 8.2%.
- Exchange rate fluctuations had a negative impact of €21m, and
scope a negative impact of €12m.
- The strong growth in EBITDA breaks down into a volume effect of
+€56 million (+1.9%), a slightly negative climate effect of -€22
million (-0.8%), an energy and recyclates price effect of +€52
million (+1.8%), the impact of efficiency gains net of contract
renegotiations and of the gradual passing on of cost increases into
prices and indexes of +73 million euros (+2.5%) and the effect of
synergies of +84 million euros (+2.8%), ahead of the annual
target.
- Very strong growth in recurring EBIT(1) , up 13.3% on a
like-for-like basis, to €1,674 million from €1,515 million at 30
June 2022. Changes in exchange rates had a negative impact of
€11 million on current EBIT. The increase in current EBIT on a
like-for-like basis (+€202m) breaks down as follows:
- A sharp rise in EBITDA (up €243 million on a like-for-like
basis).
- Depreciation and amortization stable at €1,377 million,
compared with €1,386 million (excluding repayments of operating
financial assets).
- A significant drop of €46 million (and -€57 million at constant
scope and forex) in the positive balance of capital gains on
industrial disposals net of impairment, from €139 million in the
first half of 2022 to €93 million in the first half of 2023. In the
first half of 2022, the Group recorded capital gains on the
disposal of industrial assets in connection with the acquisition of
Suez (antitrust divestitures).
- Contribution from joint ventures and associates of €53 million,
up €5 million at constant scope and forex
- Net current income Group share (before PPA of -16 million
euros) reached 662 million euros at 30 June 2023, compared with 550
million euros at 30 June 2022 (+18.7% at constant exchange
rates).
- The cost of net financial debt was €312m. It fell by €8m thanks
to active management of financing costs. The Group's borrowing rate
was stable at 3.67%.
- Other financial income and expenses (including gains and losses
on disposals of financial assets) amounted to €123m, compared with
€207m at 30 June 2022, an improvement of €84m due to the lower
revaluation of Chilean inflation-linked debt and the non-recurrence
of negative one off effects linked to the Suez transaction.
- Tax totalled €332m, reflecting the increase in profit before
tax on ordinary activities. The tax rate was 28%, compared with
28.6% in the first half of 2022.
- Minority interests amounted to €245m, compared with €172m at 30
June 2022, mainly due to higher earnings in Chile and Central
Europe.
- Reported net profit Group share came to €523 million,
compared with €236 million at 30 June 2022, an increase of 117.9%
at constant forex.
- The very sharp improvement in reported net profit is due to the
strong growth in current net income and the sharp reduction in
costs relating to the acquisition and integration of Suez, which
amounted to €55m compared with €154m.
- Net financial debt under control (1), at €19,233 million at
30 June 2023, compared with €18,138 million at 31 December
2022.
- Compared with 31 December 2022, the change in net financial
debt is mainly due to the following factors: - Strong improvement
in net free cash flow for the year to -78 million euros compared
with -304 million euros in the first half of 2022, with gross
capital expenditure of 1,820 million euros compared with 1,624
million in the first half of 2022(2) due to the increase in
decarbonisation investments in Central and Eastern Europe and
investments in hazardous waste, and an improvement(2) in Working
Capital Requirement of 35 million euros despite the strong increase
in revenue. - Net financial debt was also impacted by an
unfavorable exchange rate effect and fair value adjustments of
€189m at 30 June 2023.
(1)
Excluding PPA Suez
(2)
Including the 17 days in 2022
**************
In view of the very good first-half performance, our 2023
targets have been fully confirmed, with organic EBITDA growth now
expected to be at the upper end of the +5% to +7% range.
- Objectives 2023 (1)(2)
- Solid organic growth of revenue
- Efficiency gains above €350m complemented by additional
synergies for a cumulated amount of €280m end-2023, in line with
the €500m cumulated objective.
- Organic growth of EBITDA between +5% and +7%
- Current net income group share around €1.3bn(2)
- Confirmation of the EPS accretion(3) of around 40% in 2024
- Leverage ratio around 3x
- Dividend growth in line with current EPS growth
(1)
At constant forex and without extension of
the conflict beyond the Ukrainian territory and without significant
change in the energy supply conditions in Europe
(2)
Before Suez PPA
(3)
Current net income per share after hybrid
costs and before PPA
ESG, at the heart of the multi-faceted performance of
Veolia
New Multifaceted performance progress Report 2023:
https://www.veolia.com/sites/g/files/dvc4206/files/document/2023/08/veolia-esg-multifaceted-performance-progress-report-2023.pdf
About Veolia
Veolia Group aims to become the benchmark company for ecological
transformation. Present on five continents with nearly 220,000
employees, the Group designs and deploys useful, practical
solutions for the management of water, waste and energy that are
contributing to a radical turnaround of the current situation.
Through its three complementary activities, Veolia helps to develop
access to resources, to preserve available resources and to renew
them. In 2022, the Veolia group provided 111 million inhabitants
with drinking water and 97 million with sanitation, produced 44
terawatt hours of energy and recovered 61 million tonnes of waste.
Veolia Environnement (Paris Euronext: VIE) achieved consolidated
revenue of 42 885 million euros in 2022. www.veolia.com
Important disclaimer
As the changes in the health crisis are difficult to estimate,
we draw your attention to the “forward-looking statements” that may
appear in this press release and relating to the consequences of
this crisis which may affect the future performance of the
Company.
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, 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 divestiture 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
Autorité des Marchés Financiers (French securities regulator).
Veolia Environnement does not undertake, nor does it have, any
obligation to provide updates or to revise any forward-looking
statements. Investors and security holders may obtain from Veolia
Environnement 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.
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Media Relations Laurent Obadia Evgeniya Mazalova Tél : +
33 (0)1 85 57 86 25
Investor Relations Ronald Wasylec - Ariane de Lamaze Tél.
: + 33 (0)1 85 57 84 76 / 84 80
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