PARIS, August 26 /PRNewswire-FirstCall/ --
- Good operational resilience
- Strong free cash flow generation
- Performance in line with priorities
- Pursuit of cost reduction programme
- Revenues: 5,872 million euros, -1.2% at constant forex
- EBITDA: 951 million euros, -4.2% at constant forex,
with an EBITDA/revenues ratio of 16.2%
- Free cash flow: 428 million euros
- Net Result Group share: 175 million euros, -12.8%
- Net financial debt: 6,507 million euros
In the first half of 2009, SUEZ ENVIRONNEMENT achieved revenues of
EUR5,872m, representing a decrease of -1.2% at constant forex compared with
H1 2008. Growth continued in Water Europe and International divisions. The
economic slowdown is essentially affecting the waste business, and more
particularly the sorting and recycling activities.
EBITDA for H1 2009 was EUR951m, down -4.2% at constant forex compared
with H1 2008. The EBITDA/revenues ratio remains solid at 16.2%.
The COMPASS cost reduction programme is ahead of the mid-year objective,
and generated savings of EUR49m over the six-month period. The Net Result
Group share was EUR175m (-12.8%), representing 0.36 euros per share over 6
months. SUEZ ENVIRONNEMENT generated EUR428m of free cash flow, a sharp rise
compared with H1 2008. Net financial debt was EUR6,507m, a net financial
debt/EBITDA ratio[1] of 3.18 times.
With a strong capacity for generating free cash flow, a level of
profitability that remains high and cost savings of EUR104m since the
beginning of 2008 under the cost reduction programme, SUEZ ENVIRONNEMENT has
a solid financial profile in what continues to be a challenging economic
environment. Its first-half, results are in line with the announced
priorities of free cash flow generation and solid financial structure.
Commenting on these results, Jean-Louis Chaussade, CEO of SUEZ
ENVIRONNEMENT, made the following statement:
"During the first half of the year, SUEZ ENVIRONNEMENT proved that its
adaptability and financial solidity are allowing it to cope with a difficult
economic climate while continuing its development.
---------------------------------
[1] Over a rolling 12-month period
Constant innovation and the development of a circular economy are at the
heart of our long-term strategy. Expertise in areas such as seawater
desalination and waste recovery make it possible for the Group to strengthen
its leadership in strategic sectors. SUEZ ENVIRONNEMENT just won the contract
for the world's largest public-private desalination partnership in Melbourne,
Australia, and opened its first plastic recycling plant in France
(bottle-to-bottle).
For 2009 as a whole, SUEZ ENVIRONNEMENT objective is to achieve overall
stability of operational performance compared with 2008, at constant forex,
through dynamic sales and through the pursuit of the acceleration of its
COMPASS cost reduction programme.
Convinced that its know-how and the markets in which the Group is
positioned offer attractive prospects, SUEZ ENVIRONNEMENT confirms its
long-term strategy based on a balanced, flexible and profitable business
model."
Half-year results reflect the soundness of the measures taken to adapt
priorities
With revenues of EUR5,872m, slightly lower than in H1 2008 (-1.2%
excluding forex effects and -3.7% organic growth), SUEZ ENVIRONNEMENT is
showing a resilient level of activity in a deteriorated economic environment.
EBITDA was EUR951m (-4.2% excluding forex and -6.1% organic growth). The
EBITDA/revenues margin of 16.2% (compared with 16.7% in H1 2008) remains
high, including in waste activities (14.2%). Between Q1 and Q2 2009, the
margin rose sharply from 15.4% to 16.9%. The operational performances are
improving, notably thanks to the effectiveness of the COMPASS cost reduction
programme and the efforts made to optimize industrial tools.
These half-year results reflect the efforts made over the last few months
to adapt priorities to the current economic environment. With an increase in
free cash flow of 56%[1] compared with the same period in 2008 and a
sustained profitability throughout the period, SUEZ ENVIRONNEMENT proves its
ability to deal with a challenging economic climate.
Net result group share at 175 million euros
Current operating income was EUR393m, a decline of -22.5% compared with
June 30, 2008, as a result of the increase in depreciation, arising from
higher capital intensity of businesses from previous investments, and of a
slight rise in net provisions at EUR13m over the semester.
The Group recorded a net financial result of -EUR115m, representing an
improvement on the same period in the previous year thanks to a decline in
the cost of net debt from 5.6% to 4.6%, and a reduction in tax expense which
fell from -EUR146m to -EUR41m at June 30, 2009 benefiting from a
non-recurring deferred tax credit of EUR33m.
In total, the Net Result Group share amounts to EUR175m.
Preparing for the future by relying on dynamic commercial performance and
technological leadership
With a dynamic commercial activity in its two businesses, SUEZ
ENVIRONNEMENT confirms the effectiveness of its balanced and flexible
business model, in a difficult economic climate.
---------------------------------
[1] Reimbursement in 2009 of income tax prepayments made in 2008 for
EUR76m.
Water Europe division has increased revenues to EUR1,927m, up by +3.2% at
constant forex. Thanks to commercial dynamism and the new contracts won by
Lyonnaise des Eaux and Agbar, such as Le Havre in France (EUR19m over 4
years), Barcelona (desalination contract over 30 years) or Madrid (wastewater
contract, Canal Isabel II) in Spain, organic revenue growth is up by 3.0%
(+EUR55m), despite an average decline in volume of drinkable water sold of 1%
in Europe.
EBITDA is up by +10.4% at constant forex (EUR420m compared with EUR388m
for the first half of 2008), with a strong rise in the profitability of the
division with an EBITDA/revenues margin of 21.8% (compared with 20.6% for the
same period in 2008). The division has generated EUR155m of free cash flow.
Waste Europe division shows revenues of EUR2,599m, a fall of -7.3% at
constant forex and -10.3% in terms of organic growth (-EUR288m). It is
impacted by the economic environment, which particularly affects:
- sorting and recycling activities, which alone represent an
organic decline of -EUR165m and are impacted by the dual effect of
falling recycled raw material prices and volumes,
- the volumes treated in landfilling and incineration, that
decreased by -6%[1], mainly due to the slowdown in the activities of
industrial and commercial clients.
EBITDA at EUR368m, is down by -17.8% at constant forex. The EBITDA/
Revenues margin (14.2%[2]) and free cash flow generation (EUR157m) of Waste
Europe division are benefiting from the COMPASS cost optimization programme
and from the flexibility brought by SUEZ ENVIRONNEMENT's presence throughout
the full value chain of waste activities.
Buoyed by the evolution and strengthening of environmental regulations
and policies, recovery activities (material and energy) remain attractive in
the long term. SUEZ ENVIRONNEMENT has continued to develop advanced waste
recovery technologies and to forge long-term industrial partnerships. In
June, the first bottle-to-bottle recycling plant for r-PET plastic was opened
in Limay, while in the Netherlands the important EVI waste-to-energy plant
was put into service in April. The Group has also been selected as preferred
bidder to design, build and operate an energy- from-waste facility in
Guernsey in the United Kingdom (GBP194m).
---------------------------------
[1] Excluding hazardous waste
[2] 14.9% excluding fuel hedges impact
The International division shows strong improvement, with revenues of
EUR1,338m in the first half (+6.0% at constant forex and +1.0% in organic
growth), thanks to continued expansion in Asia Pacific, the Middle East and
the Mediterranean region.
EBITDA amounts to EUR197m (+4.6% at constant forex), an EBITDA/ Revenues
margin of 14.7%, broadly stable compared with the same period in 2008. The
growth prospects are substantial, particularly in the USA and for Degrémont
in the desalination and water reuse markets. With annual market growth of
around +10%, reverse-osmosis desalination offers SUEZ ENVIRONNEMENT long-term
development prospects.
With the high-profile contracts recently won, such as the largest
Public-Private Partnership desalination contract in the world in Melbourne,
for Victoria State (EUR1.2bn over 30 years) and the inauguration in Barcelona
of the largest desalination plant in Europe, SUEZ ENVIRONNEMENT confirms its
leadership in the reverse-osmosis desalination market.
International expansion is also marked by numerous major contracts such
as the Disi Amman water conveyance project in Jordan ($200m over 25 years),
the extension of the West Basin contract in California won by United Water
for water reuse, and the water concession contract of Yuelai in China ($800m
over 40 years).
In a deteriorated economic environement, SUEZ ENVIRONNEMENT maintains a
sound balance sheet
With a solid financial profile and strict financial discipline, SUEZ
ENVIRONNEMENT is tackling the difficult economic climate by optimizing its
maintenance investments (EUR285m), representing 4.9% of H1 revenues compared
with 5.3% for the same period in 2008, while preserving its capacity for long
term growth.
In total, net investments over the semester amounted to EUR603m, in line
with the 2009 objective of EUR1.3bn[2].
The bond issues made over the last few months have been successful. These
operations raised a total of EUR2.85bn at the end of July 2009 and have
strengthened the group's financial profile by extending the maturity of the
debt to 5.7 years[3] and diversifying the sources of financing. Net financial
debt was EUR6,507m at June 30, 2009, representing a Net financial
debt/EBITDA[4] ratio of 3.18 times. In addition, the available cash at June
30, 2009 was EUR4.5bn[5].
---------------------------------
[2] Net investments and excluding strategic investments
[3] Excluding GDF SUEZ
[4] EBITDA rolling 12 months
[5] Cash and undrawn credit lines
2009 outlook: Overall stable performance at constant forex
For full year 2009, SUEZ ENVIRONNEMENT objectives are:
- to achieve an overall stability of operational performance
at revenues and EBITDA levels compared to 2008 at constant forex,
through dynamic sales and through the pursuit of the acceleration of
its COMPASS cost reduction programme,
- to generate an increased free cash flow compared to 2008,
- to reduce net investments by 25% compared with 2008 to
EUR1.3bn[1],
- to maintain a Net financial debt/EBITDA[2] ratio at around 3
times.
In a still uncertain economic climate, SUEZ ENVIRONNEMENT maintains its
priority to generate free cash flow generation and maintain its profitability
in the second half. In the second semester, the Group will continue its
efforts to improve its operational performance.
Bolstered by its dynamic commercial performance and relying on its sound
financial profile, SUEZ ENVIRONNEMENT intends to continue its expansion based
on a balanced and flexible business model, to create value over the long term.
Next communication:
November 5, 2009: Q3 2009 Publication
The live webcast of the half-year results presentation will take place on
Wednesday, 26 August at 8.30 a.m. (Paris time) on the SUEZ ENVIRONNEMENT
website:
http://www.suez-environnement.com
The interim financial report, including the consolidated financial
statements for H1 2009, will be available online at the SUEZ ENVIRONNEMENT
website:
http://www.suez-environnement.com
---------------------------------
[1] Net investments and excluding strategic investments
[2] EBITDA rolling 12 months
SUEZ ENVIRONNEMENT
Natural resources are not infinite. Each day, SUEZ ENVIRONNEMENT (Paris:
SEV, Brussels: SEVB) and its subsidiaries deal with the challenge to protect
resources by providing innovative solutions to industry and to millions of
people. SUEZ ENVIRONNEMENT supplies drinking water to 76 million people,
provides wastewater treatment services for 44 million people, and collects
the waste produced by 51 million people. With 65,400 employees, SUEZ
ENVIRONNEMENT is the world's leading pure player in environmental services,
present on five continents. In 2008, SUEZ ENVIRONNEMENT reported revenues of
12.4 billion euros. SUEZ ENVIRONNEMENT is a 35%-owned subsidiary of GDF SUEZ.
Disclaimer
"The actual communication includes forward looking information and
statements. Those prospective elements are based upon hypothesis, financial
projections, estimations and statements regarding projects, objectives and
expectations concerning operations, future products or services or future
performances. No guarantee can be given on the realization of those
prospective elements. Investors and shareholders of SUEZ ENVIRONNEMENT
Company shares are informed that those forward looking information and
statements are subject to a number of risks and uncertainties, hardly
predictable and generally outside SUEZ ENVIRONNEMENT Company control and that
could cause actual results to differ materially from those expressed or
suggested by any such forward looking information and statements. Those risks
include, but are not limited to, those developed or identified in public
documents filed with the Autorité des Marchés Financiers (AMF). The attention
of investors and shareholders of SUEZ ENVIRONNEMENT Company shares is drawn
on the fact that the realization of all or part of those risks is susceptible
to have a significant unfavorable effect on SUEZ ENVIRONNEMENT Company. SUEZ
ENVIRONNEMENT Company disclaims any obligation or undertaking to release
publicly any updates or revisions to any of those forward-looking statements."
To learn more about SUEZ ENVIRONNEMENT, visit our website at
http://www.suez-environnement.com
