Welcome!

News Feed Item

SUEZ ENVIRONNEMENT: 2013 Results in Line With Guidance a Year of Major Commercial Successes Positive Outlook for 2014

PARIS, February 20, 2014 /PRNewswire/ --

Growth of 2013 operating performance

  • EBITDA : €2,520m, organic growth of +€122m; increase of the EBITDA margin from 16.2% to 17.2%
  • Net income Group share : €352m, strong increase by +40.2%
  • Free cash flow: €1 007m
  • Net financial debt (NFD): down to €7,245m, improved NFD/EBITDA to 2.9x
  • Dividend of €0.65 per share paid in cash for 2013[1]

Positive outlook for 2014[2]

  • EBITDA[3]: organic growth ≥ 2%
  • Additional growth with focused investments[4] while respecting the ratio NFD/EBITDA at around 3x  
  • Dividend ≥ €0.65 per share for 2014[1]

The Board of Directors, which met on 19 February 2014, approved the 2013 financial statements of SUEZ ENVIRONNEMENT which will be submitted for the approval of the Shareholders General Meeting on 22 May 2014. The consolidated financial statements were audited and certified by the Statutory Auditors.

Commenting on these results, Jean-Louis Chaussade, CEO, stated:

"SUEZ ENVIRONNEMENT has reported higher results, and is once again demonstrating the relevance and the soundness of its industrial model. The Group achieved all its targets despite adverse economic and climate environment in Europe.

SUEZ ENVIRONNEMENT remained highly proactive, and improved its operating margin. The Group focuses on innovation in its strategy, and relies on its strong positions in both businesses. It is successfully developing new services in the water market, and is strengthening its position in the waste recovery sector, through becoming a major producer of renewable energy and secondary raw materials. Internationally, the Group is opening up new markets, as shown by the new water service contracts signed in India, or the industrial facility management contracts gained in Brazil; it is continuing to expand its water and waste business in Mainland China, through the reinforcement of its partnerships.

Buoyed by its balanced positioning on profitable markets and businesses, and thanks to its strong balance sheet, SUEZ ENVIRONNEMENT is confident in the future and is ready to seize new development opportunities."

2013 Results

Despite unfavourable economic context in Europe, SUEZ ENVIRONNEMENT posted solid results in line with its targets.

  • Revenues

The Group generated revenues of €14,644m as at 31 December 2013, a gross decrease of -3.0%
(-€458m) compared with 31 December 2012, which breaks down as follows:

  • Organic decrease of -0.7%:
  • Water Europe: +2.0% (+€86m)
  • Waste Europe: -1.2% (-€83m)
  • International: -2.7% (-€108m)
  • Scope impact of -0.6% (-€91 m), which was primarily due to the disposal of facilities in the United Kingdom and of Altiservice in France, which were respectively completed in September 2013 and October 2012.
  • Adverse currency impact of -1.7% (-€262m), which was primarily due to the decrease of the following currencies against the euro: Australian dollar (-€111m), Pound Sterling (-€42m), Chilean peso (-€32m), and US dollar (-€27m).
  • Operating Performance: improvement of the ebitda margin from 16.2% to 17.2% in 2013

EBITDA amounted to €2,520m in 2013, a gross increase of +2.9% (+€70m). The organic increase was +5.0% (+€122m), primarily due to the growth of the International division of +31.4% (+€146m), which benefited from the dynamism of its business activities and from the end of the construction of the Melbourne desalination plant, which was completed in December 2012. The Water Europe division also contributed to growth with an organic EBITDA increase of +1.7% (+€20m), despite unfavourable climate conditions in France and Spain. The performance of the Waste Europe division, which was affected by an economic environment that remained difficult and by lower volumes, registered a -4.5% (-€38m) decrease.

The Compass Program enabled cost savings of €180m in 2013. The program was initially expected to generate cost savings of €150m, but was accelerated mid-year via additional measures aiming at offsetting a downturn in waste and water volumes in Europe.

The EBITDA margin improved sharply, from 16.2% in 2012 to 17.2% in 2013.

Current Operating Income (COI) amounted to €1,184m, a gross increase of +3.3% and +5.8% organically. In addition to the improvement in EBITDA, this increase was also the result of the positive resolution of the disagreement linked to the Melbourne plant, which resulted in the reversal of the provisions at the end of the year (€58m).

There was a sharp increase in Income from Operating Activities, which rose by +12.0% to €1,179m. As a reminder, the Group had recorded in 2012 an impairment charge of its interest in ACEA following the reevaluation at market value (-€60m), with no equivalent in 2013. The improvement of the income from Operating Activities is also due to lower restructuring expenses.

  • Net Income: +40%

Net financial expense amounted to -€402m in 2013 compared with -€419m in 2012. The cost of net debt fell to 4.88% compared with 5.08% in 2012, thanks to optimised financial management and to the decline in interest rates.

Tax amounted to -€205m in 2013 compared with -€186m in 2012. This increase was primarily due to higher tax expenses in France and Spain. However, the effective tax rate decreased, falling from 29.3% in 2012 to 26.5% in 2013.

Net result amounted to €602m, an increase of +28.2% compared with 2012.

Minority interests amounted to €250m, an increase of +€32m.

Net Income, Group share therefore amounted to €352m, a significant +40.2% increase compared with 2012. Earnings per share increased sharply, rising from €0.45 to €0.65.

  • Solid Free Cash Flow and Balance Sheet

Following a first semester 2013 characterised by particularly adverse seasonal effects, SUEZ ENVIRONNEMENT made huge efforts during the 2nd half of the year to improve its working capital requirement and cash generation.

Free cash flow therefore amounted to €1,007m. Free cash flow for 2012, which reached €1,358m, included the positive effect of a securitisation programme, which resulted in the deconsolidation of €317m of receivables. Restated for this item, Free Cash Flow for 2013 was therefore stable compared with the previous year.

Net investments amounted to €1,012m. SUEZ ENVIRONNEMENT reinforced its selective investment process to adapt to unfavourable climate conditions and macroeconomic environment.

Therefore, thanks to its tight financial discipline, SUEZ ENVIRONNEMENT managed to further strengthen its balance sheet. Net financial debt fell to €7,245m compared with €7,436m as of the end of December 2012. The net financial debt/EBITDA ratio improved and reached 2.9x. In May 2013, the financial rating agency Moody's reiterated the A3, stable outlook rating assigned to the Group.

The value created by the Group increased, with ROCE rising to 7.0% for a weighted average cost of capital of 6.3%.

  • Dividend

As a result of this sound performance and of its confidence in its future outlook, SUEZ ENVIRONNEMENT will propose a cash dividend of €0.65 per share in respect of the 2013 financial year at the Annual General Meeting of Shareholders on 22 May 2014.

2013 Highlights

SUEZ ENVIRONNEMENT continued to strengthen its positions in its traditional businesses in 2013, and extended the scope of its activities in the water and waste divisions in accordance with its four strategic priorities.

NUMEROUS COMMERCIAL SUCCESSES ACHIEVED

This year was characterised by a high level of performance and successful commercial activity.

In the Water Europe division, the Group was awarded important contracts like the sanitation water contract of Marseille in France (€1.2bn, 15 years) or the water supply and sanitation contract for the Barcelona Metropolitan Area in Spain (additional revenues of €3.5bn, 35 years).

In the Waste Europe division, SUEZ ENVIRONNEMENT pursued its strategy of development in recovery and was awarded important PPP[5] contracts in the UK, like Merseyside (€1.4bn, 30 years), West London (€1.7bn, 25 years) or in Poland with the Poznan contract (€850m, 25 years). In France, the Group also inaugurated the multi-process waste recovery facility in Clermont-Ferrand in January 2014; the facility includes a biological waste recovery unit, and a methanisation facility, as well as a waste-to-energy recovery unit (150,000 tonnes per year). The Group also signed a waste recovery contract for the Island of Mayotte (€65m, 12 years), and was awarded the waste collection and recycling contract for the District of Norrköping in Sweden (€33m, 5 years).

In the International division, 2013 was characterized by numerous commercial successes in all geographies: in the United States, with the contract of Bayonne (€195m, 40 years) ; in Asia, with the contract of collection of Macau (€200m, 10 years) or the management of waste water of Shuangliu County in China (€156m, 25 years); in Morocco, with the waste treatment contract in Meknes (€90m, 20 years); and in Degrémont with the start of the Prague contract (€62m), contracts of rehabilitation of the water treatment plant of Luanda (Angola, €28m) or the one aiming at improving water services in Bangalore and Pinpri-Chinwad (India, €20m, 8 years).

INNOVATE AND INVEST FOR THE FUTURE

Within a context of economic downturn and increasing scarcity of resources, SUEZ ENVIRONNEMENT's traditional markets are evolving. Its businesses have adjusted to customers' expectations, which are increasingly focused on technology, service optimisation, and performance. To make its customers leaders in the environmental performance, the Group has invested heavily in research and innovation. It enabled the Group to design a large number of technological solutions protecting water resources, managing and treating waste, as well as reducing the environmental footprint.

SUEZ ENVIRONNEMENT has also developed new services in water. The City of Mulhouse has selected the Group's remote metering offer as part of its "smart city" project, which aims to develop innovations that improve the living conditions of its residents and its drinking water network. Globally, one million eight hundred thousand smart water meters have been sold by the Group, reinforcing its leadership on the European market.

While maintaining a strong presence in its traditional waste disposal and collection activities, SUEZ ENVIRONNEMENT has been developing its waste activities towards recovery, and specifically energy production. The Group has positioned itself as a major producer of renewable energy and secondary raw materials. Via a first Public-Private Partnership in the waste management, SUEZ ENVIRONNEMENT has provided its expertise and know-how to polish local authorities, in order to produce around 2 million tons of alternative fuel from non-hazardous waste. In Sweden, the Group's cooperation with the City of Stockholm was renewed and expanded, so as to include the collection of food waste: 900 tons of food waste are turned into biogas and organic fertiliser every month.

TAILOR-MADE SERVICES FOR INDUSTRIAL WATER

SUEZ EVIRONNEMENT has made industrial water one of its strategic development priorities. It has been awarded new contracts, like in Chengdu in China, where it will build, manage and operate the Shuangliu Maojiawan waste water treatment plant. The Group also designed new service offers in 2013, which primarily focus on engineering, equipment, operation and maintenance, in order to expand its activities. This is how SUEZ ENVIRONNEMENT was awarded the engineering and supply contract for five water treatment units for Petrobras oil platforms, thereby reinforcing its presence in Brazil.

Performance by division[6]

Water Europe

                                           Gross   Organic     Scope
    in EUR m       31/12/2012 31/12/2013  change    change    change
    Revenues         4,379      4,437      +1.3%    +2.0%      +0.2%
    EBITDA           1,189      1,185      -0.4%    +1.7%      -0.5%


  • The Water Europe division reported revenues of €4,437m in 2013, an organic growth of +2.0%. Business was driven by favourable pricing effects relating to price indexation formulas in France (+1.9%), in Spain (+5.3%[7]) and in Chile (+2.7%). It also benefited from increased water volumes in Chile (+1.9%), and from the momentum of new services, which registered an 11% increase. However, it was affected by a decrease in the volumes of drinking water sold in France (-1.5%) and in Spain (-5.0%), which was partly due to particularly adverse climate conditions during the first half.

  • EBITDA amounted to €1,185m, an organic increase of +1.7%. The division's EBITDA remained stable at constant consolidation scope, and amounted to 26.7%. It benefited from the gradual improvement in the margin of new services, and from €52m in cost savings as a result of the Compass Programme.

Waste Europe

                                           Gross   Organic     Scope
    in EUR m       31/12/2012 31/12/2013  change    change    change
    Revenues         6,752      6,551      -3.0%    -1.2%      -1.1%
    EBITDA             834        797      -4.5%    -4.5%      +0.4%


  • The Waste Europe division reported revenues of €6,551m, an organic decrease of -1.2%. Due to the impact of a deterioration in European industrial output, the waste volumes processed decreased by -3.2% over the year; the division was also affected by the decline in secondary raw materials prices (on average -10% for metal and -9% for paper). The service activities also registered a downturn, especially industrial waste collection. However, the situation is different in each country: it improved in the United Kingdom and Nordic countries (organic growth of +5.4%), it was relatively stable in France (-1.9%), but experienced a more significant decrease in Central Europe (-2.6%) and in the Benelux/Germany area
    (-5.0%). The change in the mix of recovered/landfilled waste is positive, reaching 1.4/1, in accordance with the targets of the Group.
  • EBITDA was also affected by the fall in volumes and in the prices of secondary raw materials. It amounted to €797m, an organic decrease of -4.5% compared with 2012. Nonetheless, the EBITDA margin of the Waste Europe division remained almost unchanged at 12.2%, thanks to the positive €79m impact of the Compass Programme.

International

                                           Gross   Organic     Scope
    in EUR m       31/12/2012 31/12/2013  change    change    change
    Revenues         3,957      3,652      -7.7%     -2.7%      -0.3%
    EBITDA             463        581     +25.3%    +31.4%      -1.3%


  • The International division recorded revenues of €3,652m in 2013, an organic decrease of -2.7%, or +1.8% excluding the completion of construction on the Melbourne plant.

  • The Asia-Pacific Region continued to expand, with revenues up +6.0% on an organic basis (+€80m), thanks to volumes which remained on a very positive trend in China, and to growth in the waste activity in Australia.
  • The Africa, Middle East and India zone saw a +5.8% (+€36m) organic increase in revenues. The increase was mainly due to the good level of activity in Morocco.
  • The organic growth in the North America Region was +1.4% (+€9m), wirth price increases achieved in the regulated business, which were partly offset by a -1.4% decrease in volumes as a result of adverse climate conditions in the North East of the United States.
  • Degrémont's revenues were down -€233m (-16.6%) on an organic basis, or by -4.8% excluding the impact of the Melbourne plant construction. This fall was due to the completion of certain Design & Build contracts in Europe in 2012, for which there was no equivalent in 2013. The Design & Build order book amounted to €900m at the end of 2013 and the outlook for the Services and BOT activities is positive.
  • EBITDA amounted to €581m, an organic growth of +31.4% (+€146 m) or +7.0% (+€41 m) excluding the impact of Melbourne, with a strong rise in the EBITDA margin to 15.9%. The division's momentum explains this good performance, together with the extension of the BOT in Sydney, Australia, and the Compass performance gains (+€41 m).

Application of the New IFRS 10 & 11 Guidelines and Change of Definition

SUEZ ENVIRONNEMENT will apply the new IFRS 10 and 11 guidelines related to consolidated financial statements and partnerships as from 1 January 2014. In addition, the Group has decided to change the definition of EBITDA, which will, from now on, include income from equity affiliates considered as core business. Moreover, the income from equity affiliates considered as core business will be added to the COI resulting in a new indicator named EBIT.

The impact on the Group's indicators of the application of these two standards and of the change in definition is not material; 2013 restated amounts are set out below:

  • Revenues: €14,323m
  • EBITDA: €2,535m
  • EBIT: €1,223m
  • Free Cash Flow: €975m
  • Net debt: €7,186m

Positive outlook for 2014

Assuming a GDP growth of 1% for the euro zone in 2014, SUEZ ENVIRONNEMENT's targets[8] are as follows:

  • GROWTH OF 2014 OPERATIONNAL RESULTS
  • EBITDA[9]: organic growth ≥ 2%
  • Free Cash Flow: around €1 billion
  • ACCELERATION OF ITS DEVELOPMENT WHILE MAINTAINING FINANCIAL DISCIPLINE
  • Focused investments generating additional growth[10]
  • Net Financial Debt/EBITDA ratio at around 3 times
  • PURSUING AN ATTRACTIVE DIVIDEND POLICY
  • A dividend ≥ €0.65 per share based on the 2014 results[11]

Forthcoming communications:

  • 24 April 2014: Publication of the 2014 1st quarter results (conference call)
  • 22 May 2014: General Meeting of Shareholders
  • 30 July 2014: Publication of the 2014 1st half results (conference call)

Natural resources are not infinite. Every day, SUEZ ENVIRONNEMENT (Paris: SEV, Brussels: SEVB) and its subsidiaries deal with the challenge of protecting resources by providing innovative solutions to industries and to millions of people. SUEZ ENVIRONNEMENT supplies drinking water to 97 m people, provides waste water treatment services for 66 m people and collects the waste produced by 50 m people. SUEZ ENVIRONNEMENT has 79,549 employees and, with its presence on five continents, is a world leader exclusively dedicated to water and waste management services. SUEZ ENVIRONNEMENT generated total revenues of EUR 14.6 billion in 2013.

  • Disclaimer

"This communication includes forward-looking information and statements. This forward-looking data is based on assumptions, financial forecasts, estimates and statements regarding projects, targets and expectations for transactions, future products and services, or future performances. No guarantee can be given that these forecasts will be met. Investors and holder of SUEZ Environnement Company securities are informed that these forward-looking information items and statements are subject to a number of risks and uncertainties, which are hard to predict and are generally beyond SUEZ Environnement Company's control, and which could cause the results and outcomes expected to differ materially from those expressed, suggested or predicted in forward-looking statements and information. Such risks include, but are not limited to, those developed or identified in public documents filed with the French Financial Markets Authority (AMF). The attention of investors and holders of SUEZ Environnement Company securities is drawn to the fact that the materialisation of all or a portion of these risks is likely to have a material unfavourable impact on SUEZ Environnement Company. SUEZ Environnement Company is not under any obligation, and does not commit to publishing changes or updates on these information items and forward-looking statements under any circumstances. Additional detailed information on SUEZ Environnement Company is available on the website (http://www.suez-environnement.com). This document does not amount to an offer to sell or to a solicitation to buy SUEZ Environnement Company securities in any jurisdiction".

--------------------------------------------------

1. Subject to the approval of the Annual General Meeting.

2. Assuming a GDP growth of 1% for the euro zone in 2014, at unchanged accounting and tax norms as of Jan. 1st 2014 and at constant forex.

3. Objective estimated from restated 2013 EBITDA taking into account the change in EBITDA definition as defined by the Group and the application of the new IFRS 10 and 11 norms as defined in page 6 of this press release.

4. If market conditions allow it.

5. Public Private Partnerships

6. As a result of the new organisational structure, the Central European Waste and Water activities included in the International division have been reclassified under the Water Europe and Waste Europe divisions.

7. Excluding local tax increases and revenues gathered on behalf of third parties. The total tariff increase amounted to 11.5%.

8. At unchanged accounting and tax norms as of Jan. 1st 2014 and at constant forex.

9. Objective estimated from restated 2013 EBITDA taking into account the change in EBITDA definition as defined by the Group and the application of the new IFRS 10 and 11 norms.

10. If market conditions allow it

11. Subject to the approval of the 2015 annual General Meeting

--------------------------------------------------

This press release is available at http://www.suez-environnement.com.

SOURCE Suez Environment

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Enterprises have forever faced challenges surrounding the sharing of their intellectual property. Emerging cloud adoption has made it more compelling for enterprises to digitize their content, making them available over a wide variety of devices across the Internet. In his session at 19th Cloud Expo, Santosh Ahuja, Director of Architecture at Impiger Technologies, will introduce various mechanisms provided by cloud service providers today to manage and share digital content in a secure manner....
StarNet Communications Corp has announced the addition of three Secure Remote Desktop modules to its flagship X-Win32 PC X server. The new modules enable X-Win32 to safely tunnel the remote desktops from Linux and Unix servers to the user’s PC over encrypted SSH. Traditionally, users of PC X servers deploy the XDMCP protocol to display remote desktop environments such as the Gnome and KDE desktops on Linux servers and the CDE environment on Solaris Unix machines. XDMCP is used primarily on comp...
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, wil...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.