SUEZ ENVIRONNEMENT (EPA:SEV) Results 3rd Quarter 2016
Transparency directive : regulatory news
27/10/2016 07:30
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Press release
Paris, October 27, 2016
SEPTEMBER 30, 2016 RESULTS
GROUP'S TRAJECTORY ON TRACK WITH FULL-YEAR TARGETS
IMPLEMENTATION OF THE TRANSFORMATION PLAN OF THE COMPANY : 40 MILLION EUROS OF
SAVINGS IN SUPPORT FUNCTIONS AS SOON AS 2017
> Revenue: EUR11,225m, up 2.6% at constant exchange rates
> EBITDA(1): EUR1,957m, up 1.9% at constant exchange rates
> EBIT1: EUR932m, up 4.6% at constant exchange rates
> Net financial debt: EUR8,697m; net financial debt/EBITDA ratio(1): 3.2x
Change at Change at
constant constant
September September Gross exchange scope and
In EURm 30, 2015 30, 2016 change rates exchange rates
Revenue 11,093 11,225 +1.2% +2.6% +1.4%
EBITDA(1) 1,952 1,957 +0.3% +1.9% -0.6%
EBITDA(1)/Revenue 17.6% 17.4%
EBIT(1) 909 932 +2.5% +4.6% +0.4%
EBIT(1)/Revenue 8.2% 8.3%
* In the first nine months of the year, SUEZ achieved a revenue growth of 1.4%
on an organic basis and 2.6% at constant exchange rates, driven by the
International division, which generated 7.5% growth at constant exchange rates.
Revenue in the Recycling & Recovery Europe division was stable at 0.1% on an
organic basis, and decreased in the Water Europe division by 0.8% on an organic
basis.
* EBITDA at end-September 2016 stood at EUR1,957m, down 0.6% on an organic
basis. The EBITDA/revenue margin was 17.4%.
* EBIT was up 0.4% to EUR932m. The EBIT/revenue margin improved slightly to
8.3% from 8.2% last year.
(1) Excluding IFRIC 21
SUEZ - Group
Tel: +33 (0)1 58 81 20 00 - www.suez-environnement.fr
Head office - Tour CB21 - 16 place de l'iris, 92040 Paris La Défense, France
* In the first three quarters, the contribution from the Compass program was
EUR123m, in line with the annual target of EUR180m.
* The Group's net financial debt came out at EUR8.7bn versus EUR7.9bn at
end-September 2015. The NFD/EBITDA ratio was 3.2x.
* Commenting on the third-quarter 2016 results, Jean-Louis Chaussade, CEO,
stated: "Business growth remains sound, despite the persistently lackluster
macroeconomic environment in France. It continues to be fueled by our
performance outside Europe. The improvement in operational profitability in the
third quarter puts us on track to meet our 2016 targets. In particular, it
reflects the additional efforts we decided in order to offset the unfavorable
weather conditions during the first half of the year.
During the summer, we also continued to implement the transformation plan to
make the group more efficient, more agile, more transverse in order to meet the
environmental and climate challenges. As soon as 2017, this plan will generate
40 million euros of savings on a full-year basis. "
BREAKDOWN OF ACTIVITY AT END-SEPTEMBER 2016
Change at
constant
Exchange scope and
September September Gross rate exchange
In EURm 30, 2015 30, 2016 change change rates
TOTAL 11,093 11,225 +1.2% -1.4% +1.4%
Of which:
Water Europe 3,428 3,454 +0.8% -1.0% -0.8%
Recycling & Recovery Europe 4,738 4,671 -1.4% -1.7% +0.1%
International 2,854 3,029 +6.1% -1.4% +6.3%
SUEZ generated revenue of EUR11,225m at September 30, 2016, for a gross
increase of 1.2% (+EUR132m) compared with September 30, 2015. The total can be
broken down as follows:
* Organic change of 1.4% (+EUR156m):
- Revenue was down slightly by 0.8% (-EUR27m) in the Water Europe segment,
which is still suffering from the effects of the end of the Lille contract,
but was positively affected by the development of new services.
- Revenue in the Recycling & Recovery Europe segment was stable by +0.1%
(+EUR6m). It benefited from 0.5% growth in treated waste volumes, thanks to
the new capacities that have come on stream. It was adversely affected by a
drop in prices for secondary raw materials (mainly metals) and for energy.
- Revenue in the International segment was up by 6.3% (+EUR179m), thanks to
sustained growth in all regions in which the Group operates.
* Unfavorable forex effect of -1.4% (-EUR153m), mainly due to the appreciation
of the euro against the pound sterling (-EUR77m), Chilean peso (-EUR33m) and
Australian dollar (-EUR19m).
* Scope effect of +1.2% (+EUR129m), primarily from the acquisitions of Driplex
in India, Perth Waste in Australia and Nantaise des Eaux in France.
In the first three quarters of 2016, SUEZ generated 32% of its revenue outside
Europe compared with 30% last year.
Based on these results, SUEZ Group reiterates its targets for 2016.
PERFORMANCE BY DIVISION
WATER EUROPE
Change at
constant
Exchange scope and
September September Gross rate exchange
In EURm 30, 2015 30, 2016 change change rates
Revenue 3,428 3,454 +0.8% -1.0% -0.8%
* Revenue in France was down 4.4% (-EUR68m) on an organic basis.
The decrease in volumes sold (-2.0%) was below the medium-term trend due to
unfavorable weather conditions in the second quarter and the reversal of the
positive impact of exceptionally favorable weather conditions in the 2015
summer; the modest 0.2% tariff increases reflect the zero-inflation
environment. The end of the Lille contract also impacted the segment's revenue
performance (-EUR62 million).
* Spain and Chile generated organic growth of 2.1% (+EUR38m).
The segment continued to benefit from the strong tariff increases obtained last
year in Chile (+5.6%), while tariffs in Spain increased by 3.1%. The water
sales volume trend improved sharply relative to the first half of the year;
volumes were up by 0.8% in Spain and down by 0.9% in Chile, versus decreases of
0.3% and 2.5%, respectively, in the first six months of the year.
RECYCLING & RECOVERY EUROPE
Change at
constant
Exchange scope and
September September Gross rate exchange
In EURm 30, 2015 30, 2016 change change rates
Revenue 4,738 4,671 -1.4% -1.7% +0.1%
* The Recycling & Recovery Europe division reported revenue of EUR4,671m, flat
on an organic basis at 0.1% (+EUR6m). Performance continued to be affected by a
substantial negative price effect on secondary raw materials (notably ferrous
metals, down 20% year on year) and energy, mainly in the first semester.
Adjusted for this effect, revenue grew 1.1% on an organic basis.
Treated volumes rose by 0.5%, benefiting mainly from additional tonnage in
France in the second quarter and the first-time contribution of the three
waste-to-energy units that came into operation in the United Kingdom. In these
two countries, the decrease in landfilled volumes was more than offset by
growth in recycled volumes. By geographic region, the organic change was +5.7%
in the United Kingdom and Scandinavia, +3.1% in
Central Europe, +0.7% in the Benelux and Germany region, and -2.5% in France.
INTERNATIONAL
Change at
constant
Exchange scope and
September September Gross rate exchange
In EURm 30, 2015 30, 2016 change change rates
Revenue 2,854 3,029 +6.1% -1.4% +6.3%
* The International division reported revenue of EUR3,029m at September 30,
2016, up 6.3% at constant scope and exchange rates (+EUR179m).
- The Africa, Middle East and India region posted a strong increase of 12.3% at
constant scope and exchange rates (+EUR88m), mainly reflecting the
development of activities in the Middle East, where several construction
contracts are generating additional revenue, including Doha West (Qatar) and
Barka (Oman). The Group also strengthened its position in industrial water
in India through its acquisition of a majority stake in Driplex at the
beginning of the year.
- North America grew by 1.8% at constant scope and exchange rates (+EUR13m).
The Group recorded tariff increases, notably in New Jersey, Pennsylvania and
Idaho, as well as 0.4% growth in water sales volumes.
- Asia rose by a very sharp 24.9% at constant scope and exchange rates
(+EUR72m), on an organic basis, due mainly to the strong growth in treated
waste volumes in Hong Kong. This stemmed from significant market share gains
and the start of new equipment contracts in water and construction in China
in hazardous waste.
- The Europe/LatAm region posted negative growth of 6.9% at constant scope and
exchange rates (-EUR31m) due to the termination of several construction
mcontracts in Europe that were not replaced during this period.
- Revenue in Australia increased by 5.3% at constant scope and exchange rates
(+EUR38m). This performance was based on both sustained growth in treated
volumes (up 5.5%) and a positive price effect.
The backlog for construction activities is EUR1.2bn, up by 13% relative to
September 30, 2015.
FORTHCOMING COMMUNICATIONS:
March 1, 2017: Publication of 2016 annual results
This press release is available at www.suez.com and in the NEWSROOM.
APPENDICES
REVENUE BY REGION
In EURm 9M 2015 9M 2016 % in 9M 2016 Var.16/15
FRANCE 3 753 3 709 33% -1.2%
Spain 1 310 1 296 12% -1.1%
UK 826 821 7% -0.5%
Others Europe 1 836 1 799 16% -2.0%
EUROPE (excluding France) 3 971 3 916 35% -1.4%
North America 822 875 8% 6.4%
South America 643 643 6% 0.0%
Oceania 743 792 7% 6.6%
Asia 358 445 4% 24.4%
Others International 802 845 8% 5.3%
INTERNATIONAL (excluding Europe) 3 369 3 600 32% 6.9%
TOTAL 11 093 11 225 100% 1.2%
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 wastewater treatment services to 65 million, recovers 16 million tons
of waste each year and produces 7 TWh of local and renewable energy. With
82,536 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
+33 1 58 81 23 23 +33 1 58 81 24 05
Disclaimer
This document contains unaudited financial data. The aggregates shown are those
customarily used and disclosed to the markets by SUEZ.
"This presentation contains estimates and/or forward-looking statements and
information. These statements include financial projections, synergies,
estimates and their underlying assumptions, statements regarding plans,
expectations and objectives with respect to future operations, products and
services, and statements regarding future performance. Such statements do not
constitute forecasts regarding SUEZ's results or any other performance
indicator, but rather trends or targets, as the case may be. No guarantee can
be given as to the achievement of such forward-looking statements and
information.Investors and holders of SUEZ securities are cautioned that
forward-looking information and statements are subject to various risks and
uncertainties, which are difficult to predict and generally beyond the control
of SUEZ, and that such risks and uncertainties may entail results and
developments that differ materially from those stated or implied in
forward-looking information and statements. These risks and uncertainties
include, but are not limited to, those discussed or identified in the public
documents filed with the Autorité des marchés financiers (AMF). Investors and
holders of SUEZ securities should consider that the occurrence of some or all
of these risks may have a material adverse effect on SUEZ. SUEZ is under no
obligation and does not undertake to provide updates of these forward-looking
statements and information to reflect events that occur or circumstances that
arise after the date of this document. More comprehensive information about
SUEZ may be obtained on its website (www.suez.com). This document does not
constitute an offer to sell, or a solicitation of an offer to buy SUEZ
securities in any jurisdiction.".