SUEZ ENVIRONNEMENT (EPA:SEV) SUEZ 9M 2019 results
Transparency directive : regulatory news
30/10/2019 07:30
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press releaseParis, October 30th, 2019 - 7:30am
SUEZ 9M 2019: STRONG PERFORMANCE
FULL YEAR REVENUE TARGET UPGRADED TOWARDS THE UPPER END OF THE RANGE
* Revenue: EUR13,127m, organic growth of +3.2%, each division contributing
positively
* EBIT: EUR1,016m, organic growth of +4.2%, notably driven by Recycling &
Recovery and International divisions
* 2019 guidance:
- Upgrade of revenue expectations towards the upper end of our organic growth
target range
- Confirmation of all other 2019 objectives
* Net Debt down (on a constant accounting basis), to EUR10,600m
* Our strategic plan "Shaping SUEZ 2030" launched and under way
Bertrand Camus, SUEZ CEO, commented:
"In the first nine months of 2019, SUEZ posted a strong performance. In
particular, our solid organic revenue growth enables us to improve our full
year revenue expectations which we now expect towards the upper end of our
organic growth target range. We have improved profitability and lowered
leverage. All our divisions contributed positively to our expansion, allowing
us also to confirm all our other 2019 objectives.
On the 2nd of October, we presented "Shaping SUEZ 2030", the new strategic
roadmap for SUEZ designed to radically transform the Group. Driving selectivity
in growth, simplicity in our way of working and a renewed engagement grounded
on new values and culture, the plan enhances value creation for all
stakeholders over 4 years, with material results as soon as 2021."
RESULTS AT SEPTEMBER 30, 2019
The Board of Directors of SUEZ examined the consolidated financial statements
at September 30th, 2019 at its meeting held on October 29th, 2019. They were
subject to review by the Audit Committee at its meeting of October 25th, 2019.
September Excluding IFRS 16
30, 2018 Variation
In millions excl. September Gross Organic Gross at constant
of euros IFRS 16 30, 2019 variation variation variation FX
Revenue 12,697 13,127 +3.4% +3.2% +3.4% +2.7%
EBITDA 2,048 2,330 +13.8% +1.1% +1.8% +1.3%
EBITDA /
Revenue 16.1% 17.8%
EBIT 963 1,016 +5.6% +4.2% +4.5% +4.2%
EBIT /
Revenue 7.6% 7.7%
September 30, 2018 September Variation
In millions of euros excl. IFRS 16 30, 2019 excl. IFRS 16
Net Debt 9,335 10,600 -1.1%
Net Debt / EBITDA 3.4x 3.3x(1) -0.1x
(1) On a constant accounting basis (excl. IFRS 16)
PERFORMANCE BY DIVISION
WATER EUROPE
September September Gross Organic Variation at
In millions of euros 30, 2018 30, 2019 variation variation constant FX
Revenue 3,389 3,373 -0.5% +0.9% -0.1%
* The Water Europe division reported revenue of EUR3,373m, up +0.9% in organic
terms (+30mEUR).
- Revenue in France was down -1.7% (-EUR27m) on an organic basis. Water sales
volumes increased by +1.3%, driven by dry and hot weather during the summer.
Tariffs indexations were up +1.7%. Net commercial activity still weighted on
nine-months performance, notably with the end of contract in Bordeaux.
- Spain was up +1.2% (+EUR14m) on an organic basis. Water sales volumes were
up +1.7%. Tariffs were close to stable, at -0.4%, factoring in the 1.65%
decrease negotiated in Barcelona for 2018 which impacts 2019 from January to
May.
- Revenue in Latin America grew +6.4% (+43mEUR) on an organic basis. In
Chile, volumes of water sold were up +1.3% year-on-year, and tariffs up
+1.8%. The region also benefitted from a strong contribution from
construction in Panama and Ecuador.
* The Division's EBIT showed solid organic growth overall.
RECYCLING & RECOVERY EUROPE
September September Gross Organic Variation at
In millions of euros 30, 2018 30, 2019 variation variation constant FX
Revenue 4,637 4,805 +3.6% +4.6% +3.8%
* The Recycling and Recovery Europe division reported revenue of EUR4,805m, up
+4.6% (+EUR212m) on an organic basis. The volume of waste treated increased by
+1.2% at September 30, 2019.
- The Industrial Waste Specialties business posted a record high organic
growth of +14.2% (+EUR46m), notably driven by price increases and soil
remediation business in France and the Netherlands.
- Revenue in the Benelux/Germany region was up +8.8% (+EUR97m) on an organic
basis. Business benefitted from upward price revisions with Industrial and
Commercial customers.
- The United Kingdom/Scandinavia region recorded organic growth of +7.0%
(+EUR58m). The business benefitted from the start of the Greater Manchester
Area Waste Management contract on June 1st, 2019.
- Revenue in France was up +0.4% (+EUR10m) on an organic basis.
* The Division's EBIT showed substantial organic growth, with a strong
contribution from Industrial Waste Specialties.
INTERNATIONAL
September September Gross Organic Variation at
In millions of euros 30, 2018 30, 2019 variation variation constant FX
Revenue 2,882 3,031 +5.2% +2.9% +3.0%
* The International division reported revenue of EUR3,031m on September 30,
2019, up +2.9% (+EUR82 m) on an organic basis as a result of the following:
- Asia recorded organic growth of +17.9% (+EUR56m). The organic performance
of the area was positively impacted during first-half of the year by the
takeover of SCIP's water assets (Shanghai Chemical Industrial Park) on July
1st, 2018. This effect ended in the third quarter 2019.
- Revenue in Italy/Central and Eastern Europe increased by +4.1% (EUR+15m) on
an organic basis. Performance was notably driven by a strong contribution of
Poland, supported by contracts wins and renewals.
- Revenue in Australia was down -4.3% (-EUR34m) in organic terms, impacted in
particular by the completion of major and infrastructure works around Sydney
end 2018.
- North America recorded organic growth of +3.7% (+EUR25m)
- The Africa/Middle East/India region posted an organic growth of +2.7%
(+EUR20m). The business benefitted from the ramp-up of Coimbatore and
Davanagere contracts in India.
* The Division's EBIT showed solid organic growth and operational leverage.
WATER TECHNOLOGIES & SOLUTIONS
September September Gross Organic Variation at
In millions of euros 30, 2018 30, 2019 variation variation constant FX
Revenue 1,711 1,835 +7.3% +4.2% +4.3%
* The WTS division reported revenue of EUR1,835m, up +4.2% (+EUR72m) on an
organic basis.
- The Engineered Systems business achieved +5.4% growth.
- The Chemical Monitoring Solutions business reported organic volume growth
of +2.6% with good trends outside the US.
* Order volumes recorded a strong organic growth of +10.3% over the
nine-months.
* The Division's EBIT reflected a good performance in Engineered Systems and
internationally, offset by the low activity in Chemical Monitoring Solutions in
the US.
GROUP PERFORMANCE
Revenue September September Gross Organic Variation at
in millions of euros 30, 2018 30, 2019 variation variation constant FX
TOTAL 12,697 13,127 +3.4% +3.2% +2.7%
O/w:
Water Europe 3,389 3,373 -0.5% +0.9% -0.1%
Recycling &
Recovery Europe 4,637 4,805 +3.6% +4.6% +3.8%
International 2,882 3,031 +5.2% +2.9% +3.0%
Water Technologies &
Solutions 1,711 1,835 +7.3% +4.2% +4.3%
Others 78 83 +6.6% +6.6% +6.6%
* The gross revenue change of +3.4% (+EUR430m) versus September 30, 2018,
breaks down as follows:
- An organic change of +3.2% (+EUR401m)
- Currency effect of +0.7% (+EUR90m), resulting from the appreciation of the
US dollar (+EUR91m) and the Moroccan dirham (+EUR17m) against the euro,
partially offset by an appreciation of the euro against the Chilean peso
(-EUR14m) and the Australian dollar (-EUR15m).
- A scope effect of -0.5% (-EUR61m).
* EBITDA amounted to EUR2,330m at September 30, 2019, up +1.3% on a constant
accounting and FX basis and +1.1% organically. Currency effects were slightly
favorable, at +EUR10m.
* EBIT amounted to EUR1,016m, representing an increase of +4.2% on a constant
accounting and FX basis and +4.2% in organic terms. Currency effects amounted
to +EUR3m.
* Net debt stood at EUR10,600m at September 30th, 2019, including a +EUR1,367m
impact from the application of IFRS 16 at January 1st, 2019. On a constant
accounting basis i.e. excluding IFRS 16, net debt amounted to EUR9,233m vs.
EUR9,335m at September 30, 2018, representing a decrease of EUR102m or -1.1%.
On a constant accounting basis excluding IFRS 16, the debt ratio amounted to
3.3x EBITDA over 12 sliding months. Previously, the company indicated that the
estimated impact of IFRS 16 is c.0.1x-0.2x for the full- year 2019.
* The Group successfully performed liability management operations contributing
to optimize the Group's balance sheet structure while benefitting from
attractive rates:
- On September 12th, SUEZ issued EUR500m undated deeply subordinated hybrid
bonds, with 1.625% coupon (revised in 2026, then every five years) and
repurchased EUR352m of hybrid bonds issued in June 2014 (with 3.0% coupon).
- On October 14th, SUEZ issued a new 12-year EUR700m senior bond with 0.5%
coupon and repurchased EUR450m of bonds with a weighted average coupon of
3.85% and maturities between 2021 and 2024.
OUTLOOK FOR 2019 CONFIRMED
The Group revises upward its revenue expectations towards the upper end of our
organic growth target range (2 to 3%). All other objectives set for 2019(2) are
confirmed:
- Organic EBIT growth of 4% to 5%
- FCF growth of around 7% to 8%
- Leverage ratio (Net debt/EBITDA) of c.3x in 2019(3)
- Continued ambition to lower debt ratio in 2020
On this basis, and in accordance with the Board of Directors, the Group intends
to propose a dividend of EUR0.65 per share in respect of 2019 at the Annual
General Meeting in May 2020.
FINANCIAL CALENDAR (SUBJECT TO CHANGE):
* 26 February 2020 (before market): FY 2019 Results
* 30 April 2020 (before market): 1Q 2020 Results
* 12 May 2020: General Shareholders Meeting
* 30 July 2020 (before market): 1H 2020 Results
* 28 October 2020 (before market) : 9M 2020 Results
(2) Assuming water volumes sold remain in line with historic trends, volumes of
waste treated rise by +1.5% in Europe and raw materials prices are stable
relative to December 31, 2018.
(3) Excluding impact of application of IFRS 16 accounting standard
Disclaimer
This press release contains unaudited financial data. The aggregates presented
are those normally used and communicated on markets by SUEZ.
This press release 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), the French
Financial Markets Authority. 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 Internet
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.
About SUEZ
With 90 000 people on the five continents, SUEZ is a world leader in smart and
sustainable resource management. We provide water and waste management
solutions that enable cities and industries optimize their resource management
and strengthen their environmental and economic performances, in line with
regulatory standards. With the full potential of digital technologies and
innovative solutions, the Group treats over 45 million tons of waste a year,
produces 4.4 million tons of secondary raw materials and 7.7 TWh of local
renewable energy. It also secures water resources, delivering wastewater
treatment services to 66 million people and reusing 1.1 billion m3 of
wastewater. SUEZ generated total revenues of 17.3 billion euros in 2018.
SUEZ contacts
Press Analysts / Investors
Isabelle Herrier Naufle Mathilde Rodié / Cécile Combeau
isabelle.herrier.naufle@suez.com +33 (0) 1 58 81 24 05
+33 (0) 1 58 81 55 62
Julien Bachelet
julien.bachelet@suez.com
Retrouvez l'actualité du Groupe SUEZ sur le site Internet et les réseaux
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SUEZ
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.com
Limited Liability Company with a share capital of EUR2,485,450,316 - Siren
(French business administration number) 433 466 570 RCS Nanterre -
VAT FR 76433 466 570
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