SUEZ ENVIRONNEMENT (EPA:SEV) SUEZ Q1 2021: Excellent results, with strong organic growth compared to 2019 and 2020, illustrating the success of SUEZ 2030 plan

Transparency directive : regulatory news

29/04/2021 07:30

Press release

Paris, 29 April 2021 - 07:30 am

SUEZ Q1 2021: Excellent results, with strong organic growth compared to 2019
              and 2020, illustrating the success of SUEZ 2030 plan

* The Group's commercial dynamism is reflected in robust organic revenue growth
  (+5.9% vs. Q1 2020 / +6.2% vs. Q1 2019), with positive contributions from all
  business segments
* The acceleration of the performance plan drove an increase in EBITDA to
  EUR768 M (organic growth of +17.0% vs. Q1 2020 / +14.6% vs. Q1 2019). EBIT
  stands at EUR340 M (organic growth of +39.0% vs. Q1 2020 / +16.3% vs. Q1
  2019)
* Strong operational execution: resilient Water activities and strong
  performance in Recycling and Recovery (especially in France) and
  Environmental Tech & Solutions (especially SES and WTS)
* Solid cash generation, supported by tight control of working capital
* 2021 objectives and outlook confirmed
* An ordinary dividend only, of EUR0.65 per share, will be proposed to
  shareholders at the Annual General Meeting to be held on 22 June 2021
* Work is underway to complete the final merger agreements between SUEZ and
  Veolia by 14 May

Bertrand Camus, SUEZ CEO, commented:

"The first quarter results have been excellent, not just in comparison to 2020
but also compared to 2019. The Group recorded solid organic growth, strong
improvement in profitability, and very good cash generation, all of which are
at historically high levels for a first quarter. All of our business segments
are growing. Our Recycling & Recovery activities in particular are reaping the
benefits of a solid price dynamic and an increase in the volume of waste
processed in Europe; our Environmental Tech & Solutions activities are
returning to a more sustained growth path. Operational profitability is driven
by this growth and also, notably, the acceleration of our performance plan.

In a still volatile environment, due to the persistence of the pandemic and
Veolia's current tender offer, the Group is increasing its operational
efficiency thanks to the actions of the SUEZ 2030 plan implemented by our
teams, whom I would like to thank for their commitment and determination. The
solutions we provide to our clients are in demand everywhere, and we have
signed a number of major contracts this quarter.

This excellent first quarter is further proof that SUEZ is well positioned to
achieve its objectives for 2021."

RESULTS AS AT 31 MARCH 2021

The SUEZ Board of Directors examined the consolidated results as at 31 March
2021 at its meeting on 28 April 2021. These results were reviewed by the Audit
Committee at its meeting on 26 April 2021.

In million euros

              31 March 31 March 31 March Change  Change   Change    Change
                2019     2020     2021   gross  excluding organic   organic
                                        vs 2020    FX     vs 2020   vs 2019
                                                 vs 2020
Revenue         4,210    4,198   4,311    +2.7%    +4.2%     +5.9%     +6.2%
EBITDA            709      676     768   +13.5%   +14.3%    +17.0%    +14.6%
EBITDA / Revenue 16.9%    16.1%   17.8%
EBIT              293      231     340   +47.0%   +46.9%    +39.0%    +16.3%
EBIT / Revenue    7.0%     5.5%    7.9%

In million euros 31 March 2019 31 March 2020 31 March 2021 Change Gross
                                                              vs 2020
Net debt              10,367       10,402        9,783         -6.0%
Net debt / EBITDA      3.3x         3.3x          3.4x         +0.1x

GROUP PERFORMANCE

Revenue
in million euros  31 March  31 March  Change  Change     Change
                     2020      2021    gross  organic  excluding FX
TOTAL                4,198     4,311   +2.7%   +5.9%     +4.2%
Of which:
Water                1,609     1,581   -1.8%   +0.3%     -0.4%
Recycling and
Recovery             1,838     1,993   +8.4%  +11.8%     +8.4%
Environmental Tech
& Solutions            827       805   -2.6%   +2.2%     +2.2%
Inter-company          -76       -68  -10.6%  -10.6%    -10.6%

* The change in gross revenue of +2.7% (+EUR113 M) compared to 31 March 2020
  breaks down into:
- Organic change of +5.9% (+EUR248 M).
- A currency effect of -1.5% (-EUR62 M), resulting from the appreciation of
   the euro against the US dollar (-EUR41 M) and the Brazilian real (-EUR7 M),
   partially offset by the appreciation of the Australian dollar (+EUR19 M) and
   the Chilean peso (+EUR3 M) against the euro.
- A scope effect of -1.7% (-EUR73 M).

* EBITDA amounted to EUR768 M as at 31 March 2021, with organic growth of
+17.0% and +14.3% in constant currencies vs. Q1 2020. The impact of exchange
rates was unfavorable in the amount of -EUR5 M. The strong organic growth in
EBITDA is the result of Revenue growth, with the deployment of the Group's
selective growth strategy, the successful implementation of its performance
plan, and the ongoing mitigation measures put in place in response to the
Covid-19 pandemic. This resulted in an increase in the EBITDA margin compared
to Q1 2020 (+1.7 points) and Q1 2019 (+0.9 points).

* These elements are also reflected in EBIT, with organic growth of +39.0% to
EUR340 M. This amount takes into account the accounting impact of IFRS 5 for
c.EUR26 M. Growth in constant currencies was +46.9%, and currency effects
amounted to +EUR0.3 M for the quarter. It should be noted that the Group
recorded an estimated impact of Covid-19 on EBITDA and EBIT of -EUR60 M in the
first quarter of 2020.

* Net debt stood at EUR9,783 M as at 31 March 2021, down by EUR619 M compared
with 31 March 2020. This change includes both the decision to terminate the
securitization program (EUR291m) and the capital increase linked to the
employee shareholding plan (-EUR160m). The debt ratio was 3.37x EBITDA over a
rolling 12-month period, below the level as at 31 December 2020 and in line
with the level as at 31 March 2020.

OUTLOOK AND DIVIDEND POLICY

* 2021 objectives and outlook confirmed(1):
- Revenues of more than EUR16 bn with a return to organic growth
- EBIT of EUR1.4 to 1.6 bn
- Recurring EPS of EUR0.80 to EUR0.85
- Recurring Free Cash Flow of more than EUR500 M

(1) Assuming constant exchange rates as at FY 2020 and raw material prices and
no recurrence of widespread regional lockdowns

* Dividend policy

The Group has decided to maintain the proposal for an ordinary dividend as
originally intended at 0.65EUR per share. This will subject to approval by the
Annual Shareholders Meeting to be held on June 22nd.
In the light of the agreement in principle reached on 11th April with Veolia,
the Board has decided not to proceed at this stage with an additional
extraordinary distribution.

PERFORMANCE BY SEGMENT

WATER

In million euros  31 March   31 March  Change gross Change organic  Change
                    2020        2021                              excluding FX
Revenue            1,609       1,581       -1.8%         +0.3%       -0.4%

* The Water segment recorded revenues of EUR1,581 M in the first quarter of
2021, with organic growth of +0.3% (+EUR4 M).

* Europe posted organic revenue growth of +1.2% (+EUR10 M). The volume of water
  sold in France was up slightly, at +0.3%. It fell by -1.6% in Spain, where
  tourist activity continues to be impacted by pandemic-related restrictions.
  Tariff indexation for the quarter rose in average by +1.0% in France, and
  fell by -0.8% in Spain.

* The Americas region recorded an organic decline in revenues of -3.4% (-EUR15
  M), notably in Chile where sales volumes of water were down by -4.8% due to
  the pandemic-related restrictions in place in this country. Tariffs are up by
  +0.5%. In the regulated water sector in the United States, sales volumes of
  water fell -1.2 vs. Q1 2020, largely due to less favorable weather
  conditions.

* The Asia-Pacific region posted strong organic revenue growth of +13.8%
(+EUR12 M). The performance reflects, in particular, the increase in the
  volume sold in mainland China, even if the weak tourist sector continues to
  negatively impact the volume of water sold in Macao.

* The AMECAI region recorded a slight organic decline in revenues of -1.4%
  (-EUR3 M).

RECYCLING AND RECOVERY

In million euros  31 March   31 March  Change gross Change organic  Change
                    2020       2021                               excluding FX
Revenue            1,838      1,993        +8.4%       +11.8%       +8.4%

* The Recycling and Recovery segment recorded revenues of EUR1,993 M, with
organic growth of +11.8% (+EUR217 M). The volume of waste processed rose by
+1%.

* Europe recorded organic revenue growth of +13.7% (+EUR211 M). In France and
  continental Europe, performance was driven by solid pricing dynamics, an
  increase in the volume of waste processed and the positive trend in recycled
  raw material prices. In the United Kingdom, optimization of the availability
  and saturation of treatment capacities offset the impact of lower volumes for
  industrial and commercial customers caused by public health restrictions.

* The Asia-Pacific region recorded organic growth of +1.4% (+EUR4 M), largely
  driven by the increase in the volume of waste processed in Asia compared to
  the first quarter of 2020 and a favorable trend in price indices.

* The AMECAI region experienced an organic decline of -11.1% (-EUR3 M), while
  organic growth in the Americas region rose +45.9% (+EUR5 M).

ENVIRONMENTAL TECH & SOLUTIONS

In million euros  31 March   31 March  Change gross Change organic  Change
                    2020       2021                               excluding FX
Revenue              827        805          -2.6%        +2.2%       +2.2%

* The Environmental Tech & Solutions segment recorded, as at 31 March 2021,
revenues of EUR805 M, with organic growth of +2.2% (+EUR18 M). This reflects
the solid performance of Smart & Environmental Solutions (+7.0% in organic
growth to EUR115 M), led, in particular, by the digital and decentralized
activities in France, the environmental quality monitoring activity in Asia,
and of Hazardous Waste (+4.0% in organic growth, to EUR139 M).
The Water Technologies & Solutions division also returned to Revenue growth
(+0.9% in organic growth to EUR551 M), supported by the excellent performance
of the products activity.

* The Americas region recorded organic growth of +1.1% (+EUR4 M), supported by
  a dynamic quarter for WTS.

* Europe posted organic growth of +1.4% (+EUR5 M). This performance reflects
  both a favorable trend in the volume of hazardous waste processed and the
  dynamism of the digital and decentralized activities sector within SES in
  France.

* The Asia-Pacific region posted strong organic growth of +16.8% (+EUR18 M).
  This increase reflects the healthy dynamics of the environmental quality
  monitoring activity within SES, as well as a strong increase in the volume
  processed within the hazardous waste activity, compared to a Q1 2020 that was
  impacted by industrial park closures.

* The AMECAI region recorded an organic decline of -22.1% (-EUR9 M).

FINANCIAL CALENDAR (SUBJECT TO CHANGE):

* Annual General Meeting: 22 June 2021
* Detachment of the dividend(2): 28 June 2021
* Payment of the dividend(2): 30 June 2021
* H1 2021 results: 29 July 2021
* 9M 2021 results: 28 October 2021

The definition and calculation of the alternative performance measures (APMs)
presented in this press release are published in full in the Group's Universal
Registration Document and can be found on the Group's website:
https://www.suez.com/en/finance/financial-information

CONTACTS

Media
Isabelle Herrier Naufle
isabelle.herrier.naufle@suez.com
+33 6 83 54 89 62

Analysts / Investors
Cécile Combeau / Baptiste Fournier / Julien Minot
+33 1 58 81 55 71 / 54 85 / 37 09

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 o r 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:
Since the end of the 19th century, SUEZ has built expertise aimed at helping
people to constantly improve their quality of life by protecting their health
and supporting economic growth. With an active presence on five continents,
SUEZ and its 90,000 employees strive to preserve our environment's natural
capital: water, soil, and air. SUEZ provides innovative and resilient solutions
in water management, waste recovery, site remediation and air treatment,
optimizing municipalities' and industries' resource management through "smart"
cities and improving their environmental and economic performance. The Group
delivers sanitation services to 64 million people and produces 7.1 billion m3
of drinking water. SUEZ is also a contributor to economic growth, with more
than 200,000 jobs created directly and indirectly on an annual basis, and a
provider of new resources, with 4.2 million tons of secondary raw materials
produced. By 2030, the Group is targeting 100% sustainable solutions, with a
positive impact on our environment, health and climate. SUEZ generated total
revenue of EUR17.2 billion in 2020.

   Find out more about the SUEZ Group on our website and social media

                   Twitter, Linkedin, YouTube, Instagram

(2) Subject to approval by the Annual General Meeting of Shareholders

SUEZ
Head office: Tour CB21 ? 16, Place de l'Iris, 92040 Paris La Défense Cedex,
France ? Tel.: +33 1 58 81 20 00 ? www.suez.com
Limited company with capital of 2,557,356,896 euros ? SIREN (French business
administration number): 433 466 570 RCS NANTERRE ? VAT No.: FR76433 466 570

SUEZ ENVIRONNEMENT's latest news

01/02/2022 08:00

SUEZ ENVIRONNEMENT (EPA:SEV) SUEZ Q1 2021: Excellent results, with strong organic growth compared to 2019 and 2020, illustrating the success of SUEZ 2030 plan

Transparency directive : regulatory news

SUEZ ENVIRONNEMENT's latest news

Other stories