SUEZ ENVIRONNEMENT (EPA:SEV) FIRST-QUARTER 2016 : BUSINESS TREND IN LINE WITH OUR OBJECTIVES CONFIRMATION OF POSITIVE MOMENTUM IN INTERNATIONAL

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28/04/2016 07:27

press release

Paris, 28 April 2016

                                FIRST-QUARTER 2016

BUSINESS TREND IN LINE WITH OUR OBJECTIVES CONFIRMATION OF POSITIVE MOMENTUM IN
                                   INTERNATIONAL

Results in first-quarter 2016(1):
>  Revenue: EUR3,555m, organic growth of +1.5%
>  EBIT: EUR253m, organic growth of +0.6%
>  Net financial debt: EUR8,363m, net financial debt / EBITDA(2) ratio of 3.1x

                                              Change at
                                              constant
                31 March   31 March  Organic  exchange    Exchange    Gross
In EUR million    2015       2016    change     rate    rate change   change

Revenue          3,536      3,555     +1.5%    +1.8%       -1.2%      +0.5%
EBITDA             597        574     -0.1%    -1.6%       -2.2%      -3.9%
EBITDA / Rev.    16.9%      16.1%
EBIT               266        253     +0.6%    -0.8%       -3.8%      -4.6%
EBIT / Rev.       7.5%       7.1%

* In first-quarter 2016, SUEZ increased revenue by +0.5% to EUR3,555m, out of
which +1.5% on an organic basis. The "International" division posted strong
growth in revenue, up +9.5% on an organic basis; the "Water Europe" division was
stable, with a +0.3% organic increase. The "Recycling & Recovery Europe"
division posted negative organic growth of -1.9%, mainly due to the continued
decrease in raw materials prices.

* EBITDA at end of March 2016 stood at EUR574m, stable on an organic basis
(-0.1%), with an EBITDA/revenue margin of 16.1%. EBIT increased +0.6% on an
organic basis to EUR253m; the EBIT/revenue margin came out at 7.1%.

(1) Excluding IFRIC 21
(2) Calculated on a 12-month rolling basis

> Group net financial debt was EUR8.4bn compared with EUR8.1bn at end 2015, or
3.1 times EBITDA. The variation reflects the trend in the working capital
requirement, traditionally unfavorable in the first quarter.

Commenting on the first-quarter 2016 results, Chief Executive Officer Jean-Louis
Chaussade said: "The trend in business of the Group in the first quarter was
consistent with our expectations, with the European environment - and in France
in particular - remaining lackluster. Our momentum was reflected by a number of
commercial successes in all our regions. The "International" division continued
to post strong growth and, as expected, reported a positive turnaround in
profitability. Despite the absence of inflation and following the termination of
the Lille contract, "Water Europe" division revenue was practically stable.
However, the "Recycling & Recovery Europe" division was impacted by the
continued decrease in the price of raw materials, including electricity.
Overall, these trends enable the Group to remain on track to meet its annual
objectives."

                      BREAKDOWN OF ACTIVITY AT END-MARCH 2016

                                              Change at
                                              constant           Exchange
Revenue         31 March   31 March  Organic  exchange   Gross     rate
In EUR million    2015       2016    change     rate     change   change

TOTAL            3,536      3,555     +1.5%     +1.8%    +0.5%     -1.2%
o/w:
Water Europe     1,120      1,110     +0.3%     +0.5%    -0.9%     -1.5%
Recycling &
Recovery Europe  1,539      1,501     -1.9%     -1.8%    -2.4%     -0.7%
International      851        920     +9.5%    +10.1%    +8.1%     -2.0%

SUEZ reported revenue of EUR3,555m on 31 March 2016, of which 31% generated
outside Europe, for a gross increase of +0.5% (+EUR19m) compared with 31 March
2015. The total can be broken down as follows:

* Organic change of +1.5% (EUR54m):
- Water Europe revenue rose slightly (+EUR4m, +0.3%), benefiting from positive
  tariff indexations in Chile, which were offset by unfavorable volume effects
  in France, consistent with the medium-term trend, and in Chile, as a result of
  unfavorable summer weather conditions.
- Revenues for the Recycling & Recovery Europe division were down -1.9%
(-EUR29m). This performance primarily reflected the sharp drop in the prices of
  secondary raw materials and energy. Adjusted for this impact, revenue rose
  slightly, by +0.8%.
- The International division posted a strong increase in revenue (+EUR81m,
  +9.5%) with developments in all geographical regions.

* A forex effect of -1.2% (-EUR43m), mainly owing to the depreciation of the
Chilean peso (-EUR18m), Australian dollar (-EUR15m) and Pound sterling (-EUR9m)
against the euro.

* A scope effect of +0.2% (+EUR8m).

                                  PERFORMANCE BY DIVISION

WATER EUROPE

                                              Change at
                                              constant
                31 March   31 March  Organic  exchange    Exchange    Gross
In EUR million    2015       2016    change     rate    rate change   change

Revenue          1,120      1,110     +0.3%     +0.5%      -1.5%      -0.9%

The Water Europe division recorded organic growth of +0.3% (+EUR4m).

* Revenue in France was down 1.0% (-EUR6m) on an organic basis.
The decrease in sales volumes (-1.2%) was in line with the medium-term trend,
while the modest tariff indexations (+0.4%) corresponded to the absence of
inflation. In first-quarter 2016 the Group won public service management
contracts for drinking water for Valenciennes (EUR256m, 16 years), the Issoire
inter- municipal syndicate (EUR79m, 12 years) and Poissy (EUR25m, 10 years).

* Spain and Chile generated organic growth of +1.7% (+EUR10m).
The segment was boosted by the strong tariff increases obtained last year in
Chile (+6.7%), while tariffs in Spain increased by +1.0%. Water sales volumes
were stable in Spain (+0.1%) and decreased in Chile due to highly unfavorable
weather conditions in the summer period.

RECYCLING & RECOVERY EUROPE

                                              Change at
                                              constant
                31 March   31 March  Organic  exchange    Exchange    Gross
In EUR million    2015       2016    change     rate    rate change   change

Revenue          1,539      1,501     -1.9%    -1.8%       -0.7%      -2.4%

The Recycling & Recovery Europe division posted a -1.9% (-EUR29m) decline in
revenue in first-quarter 2016 on an organic basis. Performance was notably
impacted by a substantial negative price effect on secondary raw materials
(notably ferrous metals, down 34% on 2015) and energy. Treated volumes fell
slightly by -0.4%, in-line with the gloomy industrial production.

* Revenue in France was down -5.4% (-EUR45m) on an organic basis.
The trend mainly reflected the decrease in secondary raw materials prices, only
partly offset by an increase in processed volumes and positive price effects.

The Group signed a waste collection and sorting contract with the Grand Dijon
urban community (EUR52m, 5 years) and a collection contract with the Orléans
agglomeration (EUR18m, 7 years). SUEZ continued to develop business with large
manufacturing groups, notably winning a contract to optimize and recover waste
flows at 23 Groupe Safran production sites (EUR10m, 3 years). The Group was also
awarded a contract with EDF Dalkia (EUR5m, 3 years).

* The United Kingdom/Scandinavia region posted organic growth of +4.7%
(+EUR15m).
Treatment activities rose sharply through a substantial increase in the volume
of recovered waste in the form of alternative fuel, while the sorting and
recycling business trended favorably. Meanwhile, all the new energy- from-waste
units under construction are in line with the initial plans.

* The Benelux/Germany region reported stable revenue, up +0.4% (+EUR1m) on an
organic basis. Industrial collection in the Netherlands increased, while the
positive trend in services prices was offset in part by the unfavorable trend in
electricity prices. The Group signed contracts with manufacturers, including in
Belgium with the transport and treatment of liquid waste for INEOS (EUR14m, 3
years), and with municipalities, including in Germany with the transport and
treatment of waste for Landkreis Rastatt (EUR11m, 7 years).

INTERNATIONAL

                                              Change at
                                              constant
                31 March   31 March  Organic  exchange    Exchange    Gross
In EUR million    2015       2016    change     rate    rate change   change

Revenue            851        920     +9.5%     10.1%      -2.0%       +8.1%

The International division put in a strong performance overall across all
regions. The Design & Build backlog stood at EUR1.2bn, up 16% year on year.

* The Africa/Middle East/India region achieved strong organic growth of +11.4%
(+EUR24m).
The increase was mainly driven by the development of activities in the Middle
East, where several construction contracts are generating additional revenue,
including Doha West and Mirfa. In Oman, the Group was awarded the BOT contract
of Barka desalination plant (EUR276m, 20 years).
The Group further reinforced its positions in the region by winning nine water
management contracts in Africa for a total EUR56m. SUEZ is also stepping up
development in India, winning six new contracts in water and sanitation for a
total EUR67m and acquiring a majority share in Driplex, one of the country's
leading industrial water companies.

* Asia posted organic growth of +30.1% (+EUR23m) primarily on the strength of
substantial increases in the volume of waste treated in Hong Kong, following
significant market share gains.
The Group pursued its development with manufacturing customers in China, winning
three new water treatment contracts with major players in the oil, gas and
petrochemical sectors (EUR19m) and a contract on the treatment of effluents with
the Changshu Advanced Materials Industrial Park (EUR354m, 30 years).

* Revenue in Australia grew +5.3% (+EUR13m) on an organic basis thanks to an
increase in waste treatment volumes and rises in contractual prices in the
various segments.
After taking a 100% stake in its Recycling and Recovery business in Australia
and acquiring Pro Skips, a construction waste recovery operator in Queensland,
SUEZ signed a further agreement to acquire Perthwaste, one of the main service
providers in waste treatment in Western Australia, for a total 87 million
Australian dollars (around EUR58 million).

* Europe/Latam revenue increased by +7.9% (+EUR10m) on an organic basis. The
result was driven by strong operational performances in most countries in the
region, both with industrial and municipal customers. The region's strong
business momentum was illustrated in the gain of a new contract to operate the
sanitation networks and the waste water treatment stations of the umperk
region in the Czech Republic (EUR25m, 5 years).

* North America reported organic growth of +3.7% (+EUR7m).
The Group recorded tariff increases allowing it to offset the decrease in water
sold volumes in line with medium- term trends. SUEZ recently won a contract to
manage and operate the water supply and sanitation networks of the town of
Putnam in Connecticut (EUR27m, 10 years).

                                   OUTLOOK

In a still uncertain macroeconomic environment in Europe, our targets are to:

* Improve profitable growth in 2016
  - Organic revenue growth greater than or equal to 2%(3)
  - Organic EBIT growth greater than organic revenue growth(3)
  - Free cash flow of around EUR1bn
  - Net financial debt/EBITDA of around 3x
* Continue an attractive dividend policy
  - 2016 dividend ≥ EUR0.65 per share(4)
* We also reiterate our ambition to reach EUR3bn in EBITDA in 2017(5)

                           FORTHCOMING COMMUNICATIONS

* 12 May 2016: Payment of the dividend of EUR0.65 per share(6)
* 28 July 2016: Publication of 2016 first-half results

(3) Excluding the impact of the exceptional summer volume effect in Water Europe
for EUR20m; based on stable industrial production in Europe in 2016 and stable
commodity prices relative to the budget assumptions
(4) Subject to the approval of the 2017 Annual General Meeting
(5) Based on improved macro-economic recovery in Europe in 2017, at mid-February
2015 exchange rate and unchanged accounting & tax norms as of Jan. 1st 2015
(6) Subject to approval by the Annual General Meeting on 28 April 2016.

                                 APPENDICES

REVENUE BY GEOGRAPHICAL REGION
                                                        % in Q1
In EURm                          Q1 2015     Q1 2016      2016     Var. 16/15

FRANCE                             1,250       1,194      33.6%      -4.4%
Spain                                403         399      11.2%      -1.0%
UK                                   252         263       7.4%      +4.4%
Others Europe                        587         589      16.6%      +0.4%
EUROPE (excluding France)          1,242       1,252      35.2%      +0.8%
North America                        227         246       6.9%      +8.2%
South America                        231         231       6.5%      -0.3%
Oceania                              252         253       7.1%      +0.4%
Asia                                  97         120       3.4%     +24.2%
Others International                 238         260       7.3%      +9.5%
INTERNATIONAL (excluding Europe)   1,044       1,109      31.2%      +6.2%
TOTAL                              3,536       3,555     100.0%      +0.5%

SUEZ
We are at the dawn of the resource revolution. In a world facing high
demographic growth, runaway urbanisation and the shortage of natural resources,
securing, optimising and renewing resources is essential to our future. SUEZ
(Paris: SEV, Brussels: SEVB) supplies drinking water to 92 million people,
delivers wasterwater treatment services    to 65 million, collects waste
produced by almost 50 million, recovers 14 million tons of waste each year and
produces 5,138 GWh of local and renewable energy. With 80,990 employees, SUEZ,
which is present on all five continents, is   a key player in the sustainable
management of resources. SUEZ generated total revenues of EUR15.1 billion in
2015.

CONTACTS
Press                                     Analysts/Investors
Ophélie Godard                            Tel: +33 1 58 81 24 05
Tel: +33 1 58 81 54 73
Email: ophelie.godard@suez-env.com

This press release is also available on our website www.suez-environnement.com
and in the NEWSROOM

Disclaimer
This document contains unaudited financial data. The aggregates shown are those
customarily used and communicated to the markets by SUEZ.
"This communication contains forward-looking information and statements. These
forward-looking items include the assumptions on which they are based, as well
as financial projections, estimates, and statements regarding plans, objectives,
and expectations pertaining to future operations, products, or services or
future performance. No guarantees can be given that these forward-looking items
will become a reality. Investors and holders of shares of SUEZ ENVIRONNEMENT
Company are cautioned that such forward-looking information and statements are
subject to numerous risks or uncertainties that are difficult to predict and
generally outside the control of SUEZ ENVIRONNEMENT Company, which may mean that
the expected results and developments will differ significantly from those
expressed, implied, or projected in the forward-looking statements and
information. In particular, these risks include those explained or identified in
the public documents filed with the French Financial Markets Authority (AMF).
Investors and holders of shares of SUEZ ENVIRONNEMENT Company should be aware
that if all or some of these risks come about, this would likely have a
significant adverse effect on SUEZ ENVIRONNEMENT Company. SUEZ ENVIRONNEMENT
Company has no obligation and makes no promise at all to publish changes or
updates to such forward-looking information and statements. More detailed
information about SUEZ ENVIRONNEMENT COMPANY is available on the website
(www.suez-environnement.com). This document does not constitute an offer to sell
or a solicitation of an offer to acquire shares of SUEZ ENVIRONNEMENT COMPANY in
any jurisdiction."

SUEZ ENVIRONNEMENT COMPANY
Head office - Tour CB21 - 16 place de l'iris, 92040 Paris La Défense
Cedex, France - Tel : +33 (0)1 58 81 20 00 - www.suez-environnement.com
Capital EUR 2 170 573 872 - Siren 433 466 570 RCS NANTERRE -
TVA FR 76433 466 570

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