Veolia Environnement SA · EURONEXT:VIE
Veolia Environnement SA — 9M 2021 Earnings Presentation
41 slides from Veolia Environnement SA's earnings presentation, Nov 4, 2021
Slide 1: Q3 and 9M 2021 Results
Q3 and 9M 2021 Results 4 November 2021
Slide 2: Disclaimer
Disclaimer Veolia Environnement is a corporation listed on the Euronext Paris. This document contains “forward-looking statements” within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performan
Slide 3: 9M 2021 Results Agenda
9M 2021 RESULTS AGENDA 01 Veolia-Suez : update on the combination 02 9M 2021 key highlights : Q3 and 9M delivery significantly above 2020 and 2019 03 9M 2021 Operational and Financial performance 04 Appendices 9M 2021 Results 3
Slide 4: Update on the Veolia-Suez combination
1- Update on the VEOLIA-SUEZ combination Antoine Frérot, CEO
Slide 5: Suez Transaction Update
SUEZ TRANSACTION UPDATE 6th Oct. : Completion of the rights issue of €2.5bn, as part of the financing of transaction o Very strong take-up rate of 175% o 110.4 million new shares issued 22 Oct: Official filing before the EU antitrust authorities o Expected clearance by mid December Tender Offer in D
Slide 6: Q3 and 9M 2021 key highlights
2- Q3 and 9M 2021 key highlights Q3 and 9M delivery significantly above 2020 and 2019 Antoine Frérot, CEO Estelle Brachlianoff, COO
Slide 7: 9M 2021 Key Highlights: Acceleration of Growth in Q3 (1/2)
9M 2021 KEY HIGHLIGHTS : ACCELERATION OF GROWTH IN Q3 (1/2) FUELED BY WASTE REBOUND, SUPPORTIVE PRICING AND EFFICIENCY GAINS ❑ Acceleration of both Revenue and EBITDA growth in Q3, after a very strong H1 rebound : In €M Q3 2019 Q3 2020 Q3 2021 Var. vs Q3 2020(1) Var vs Q3 2019(1) Var H1 2021 vs. H1
Slide 8: 9M 2021 Key Highlights: Acceleration of Growth in Q3 (2/2)
9M 2021 KEY HIGHLIGHTS : ACCELERATION OF GROWTH IN Q3 (2/2) FUELED BY WASTE REBOUND, SUPPORTIVE PRICING AND KEY GROWTH BUSINESSES …Leading to 9 month 2021 results above target and ahead of 2020 and of 2019 In €M 9M 2019 9M 2020 9M 2021 Var. vs 9M 2020 (1) Var vs 9M 2019(1) Revenue 19 765 18 705 20 3
Slide 9: Key Operational 9M 2021 Highlights: Significant Outperformance vs. 2019
KEY OPERATIONAL 9M2021 HIGHLIGHTS SIGNIFICANT OUTPERFORMANCE vs. 2019 PERFORMANCE BY BUSINESS vs. 2019 ❑ Municipal Water : low Q3 volumes in France due to rainy Revenue variation at constant scope and FX vs. 9M, 2019 summer . Normal levels outside France Water and WW 1,5% ❑ Water Technologies and ne
Slide 10: Veolia Favorably Impacted by Inflationary Pricing Environment
VEOLIA FAVORABLY IMPACTED BY INFLATIONARY PRICING ENVIRONMENT ….AND PROTECTED BY COST INDEXATION AND COMMODITY HEDGING Positive impact of inflation combined with strong discipline on pricing strategy o Indexation formulas on most contracts, reflecting inflation of cost of factors o Systematic implem
Slide 11: Fully Recovered Commercial Momentum and Project Pipeline Full (1/2)
FULLY RECOVERED COMMERCIAL MOMENTUM AND PROJECT PIPELINE FULL (1/2) Strong commercial momentum in municipal contracts o France Water: Gain of Cholet potable water, of Colmar waste water contract and renewal of Lens/Liévin and Montauban : total backlog of €306M - No significant contract renewal befor
Slide 12: Fully Recovered Commercial Momentum and Project Pipeline Full (2/2)
FULLY RECOVERED COMMERCIAL MOMENTUM AND PROJECT PIPELINE FULL (2/2) Water technologies (VWT) o 2 salt crystallizer contracts : petrochemical in Louisiana (backlog €86M) and Lithium battery production in Australia (backlog €40M) o Brazil : WWTP for a Pulp and Paper client (Suzanno) backlog €37M for V
Slide 13: Very Strong Efficiency Gains, Ahead of Objective
VERY STRONG EFFICIENCY GAINS, AHEAD OF OBJECTIVE Significant increase vs. pre-Covid 2021 annual objective of €350M o €250M normal run-rate o €100M additional effort in 2021 to offset remaining Covid effects 395 €M 299 299m€ achieved in the 9M , ahead of annual 200 Recover 87 & Adapt schedule Efficie
Slide 14: Very Strong Confidence in 2021 Guidance
VERY STRONG CONFIDENCE IN 2021 GUIDANCE(1) 2021 EBITDA OBJECTIVE FULLY CONFIRMED FY guidance was raised after H1 results above target and is fully confirmed after outstanding Q3 delivery and excellent business momentum Revenue above 2019 level 2021 EBITDA above €4.1bn o Fueled by very favorable pric
Slide 15: 2021 Financial & Operational Performance
3- 2021 Financial & Operational Performance 9M delivery significantly above 2020 and 2019 Claude Laruelle, CFO
Slide 16: 9M Key Figures
9M KEY FIGURES 9M REVENUE UP +9.4% AND 9M EBITDA UP +26.4% AT CONSTANT FX CURRENT NET INCOME OF €667M AND RECORD POSITIVE FCF GENERATION 9M, 2019 9M, 2020 Var. Y-Y vs. Var. at constant Var. at constant In €M 9M, 2021 Restated(1) Restated(1) 9M,2020 FX vs. 9M,2020 FX vs. 9M,2019 Revenue 19 765 18 705
Slide 17: Q3 Key Highlights: Very Solid Growth
Q3 KEY HIGHLIGHTS : VERY SOLID GROWTH 2019 2020 2021 Revenue growth at constant FX Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 France +2.0% -3.1% -16.1% +0.8% +2.5% +5.7% +23.5% +3.4% Europe excl. France +4.1% +1.1% -6.7% +0.8% +5.3% +9.0% +20.9% +13.0% Rest of the World +8.7% +2.1%(1) -4.4%(1) -3.0%(1) -1.5%(1) +0.6
Slide 18: Revenue Increase of +9.4% at Constant Forex
REVENUE INCREASE OF +9.4% AT CONSTANT FOREX DRIVEN BY VOLUME REBOUND AND STRONG PRICES In €M FX: -€111M : Latin America (-€51M), North America (-72M), Central & Eastern Europe (-€21M), partially offset by the UK (+€42M) and Australia (+€41M) 280 20 357 SCOPE: +€135M : acquisitions of energy assets i
Slide 19: Waste Revenue Up +17.4% in Q3 and +15.5% in 9M
WASTE REVENUE UP +17.4% in Q3 AND +15.5% IN 9M to €8 181M VOLUME REBOUND, SOLID PRICING AND HIGH RECYCLING PRICES Q1, 2020 Q2, 2020 Q3, 2020 9M, 2020 Q1, 2021 Q2, 2021 Q3, 2021 9M, 2021 Recycled raw materials prices -2.5% -1.4% -0.9% -1.6% +3.2% +5.7% +6.3% +5.1% Volumes / activity levels -1.8% -14.
Slide 20: EBITDA Increase of +26.4% at Constant Forex vs. 2020
EBITDA INCREASE OF +26.4% AT CONSTANT FOREX vs. 2020 VERY SUPPORTIVE BUSINESS TRENDS AND HIGH LEVEL OF EFFICIENCY 3 140 FOREX: -€10M. Latam -€8M, USA -€8M, Central and Eastern Europe -€3M 299 SCOPE : +€66M : mostly acquisitions in 98 155 Central Europe and Osis partially offset by 0 83 divestiture o
Slide 21: France – 9M Operational Review
FRANCE – 9M OPERATIONAL REVIEW CONTINUED STRONG WASTE OFFSET BY LOWER WATER REVENUE IN Q3 ∆ vs. ∆ at constant FX ∆ at constant FX 9M,2019 9M,2020 9M 2021 vs. 9M, 2019 In €M 9M 2020 vs. 9M, 2020 Revenue, of which 4 175 3 918 4 320 +10.3% +10.3% +3.5% Water 2 228 2 142 2 178 +1.7% +1.7% -2.2% Waste 1
Slide 22: Rest of Europe – 9M Operational Review
REST OF EUROPE – 9M OPERATIONAL REVIEW CONTINUED STRONG GROWTH IN Q3, SAME PACE AS IN H1 ∆ In €M ∆ vs. ∆ at constant FX 9M,2019 9M,2020 9M 2021 At constant FX 9M 2020 vs. 9M, 2019 vs. 9M, 2020 Revenue, of which 6 870 6 702 7 656 +14.2% +13.8% +12.1% Central & Eastern Europe 2 330 2 330 2 853 +22.4%
Slide 23: Rest of the World – 9M Operational Review
REST OF THE WORLD – 9M OPERATIONAL REVIEW RECOVERY CONFIRMED ∆ ∆ vs. ∆ at constant FX In €M 9M,2019 9M,2020 9M 2021 At constant FX 9M 2020 vs. 9M, 2019 vs. 9M, 2020 Revenue, of which 5 288 4 921 5 059 +2.8% +5.2% +2.5%(2) Asia 1 457 1 471 1 491 +1.3% +3.5% +4.8% Latin America (Latam) 621 571 606 +6.
Slide 24: Global Business – 9M Operational Review
GLOBAL BUSINESS – 9M OPERATIONAL REVIEW A VERY STRONG REBOUND ∆ ∆ ∆ at constant FX In €M 9M,2019 9M,2020 9M, 2021 At constant FX vs. 9M, 2020 vs. 9M, 2019 vs. 9M, 2020 Revenue, of which 3 427 3 160 3 319 +5.0% +5.7%/+9.0%(1) -2.1% Construction 2 016 1 936 1 801 -7.0% +6.1%(1) +1.1%(1) Hazardous & li
Slide 25: Current EBIT Up 68.7% to €1,258M
CURRENT EBIT UP 68.7% TO €1 258M 9M, 2019 9M, 2020 9M, 2021 Var. vs. 2020 Var. vs. 2019 at In €M Restated(1) Restated(1) at constant FX constant FX EBITDA 2 894 2 492 3 140 +26.4% +10.2% Renewal expenses -209 -225 -220 Depreciation & Amortization (including -1 597 -1 555 -1 648 principal payments on
Slide 26: Record Current Net Income of €667M
RECORD CURRENT NET INCOME OF €667M 9M, 2019(1) 9M, 2020(1) 9M, 2021 Var. vs. 2020 at Var. vs. 2019 at In €M constant FX constant FX Current EBIT 1 172 748 1 258 +68.7% +9.1% Cost of net financial debt -333 -315 -242 Other financial income and expense -132 -127 -125 Suez dividend - - +122 Net financi
Slide 27: Outstanding Improvement in FCF of €960M
OUTSTANDING IMPROVEMENT IN FCF OF €960M DUE TO EBITDA GROWTH, CONTROLLED CAPEX AND VERY STRICT CASH DISCIPLINE Net Capex 1 455 1 355 Discretionary 1 334 Controlled net industrial Capex : €1 355M vs. €1 334M 241 210 growth capex 211 o Optimization of maintenance 483 516 570 Contractual o Growth contr
Slide 28: Evolution of Net Financial Debt
EVOLUTION OF NET FINANCIAL DEBT In €M 203 49 521 258 212 209 360 351 3 140 1 355 220 146 13 445 13 217 9M 2021 Results 28
Slide 29: Very Strong Confidence in 2021 Guidance
VERY STRONG CONFIDENCE IN 2021 GUIDANCE(1) 2021 EBITDA OBJECTIVE FULLY CONFIRMED FY guidance was raised after H1 results above target and is fully confirmed after outstanding Q3 delivery and excellent business momentum Revenue above 2019 level 2021 EBITDA above €4.1bn o Fueled by very favorable pric
Slide 30: Appendices
9M, 2021 Key Figures Appendices
Slide 31: Appendix 1: Main Represented Figures for Nine Months to September 2019 & 2020
APPENDIX 1: MAIN REPRESENTED FIGURES FOR THE NINE MONTHS- ENDED SEPTEMBER 30, 2019 & SEPTEMBER 30, 2020 Impact of personnel costs share-based payments (IFRS2) reclassification as a current item Sept 2019 Sept 2019 incl Sept 2020 excl Sept 2020 incl (in € millions) excl IFRS 2 Impact IFRS 2 IFRS 2 IF
Slide 32: Appendix 2: Currency Movements
APPENDIX 2: CURRENCY MOVEMENTS For 1€ 9M, 2020 9M, 2021 ∆ 9M, 2021 vs. 9M, 2020 US dollar Average rate 1.124 1.196 -6.4% Closing rate 1.171 1.158 +1.1% UK pound sterling Average rate 0.884 0.864 +2.3% Closing rate 0.912 0.861 +5.7% Australian dollar Average rate 1.663 1.577 +5.2% Closing rate 1.644
Slide 33: Appendix 3: Revenue Analysis by Segment
APPENDIX 3: REVENUE OF €20 357M, +9.4% AT CONSTANT FX ANALYSIS BY SEGMENT 20 357 In €M 19 765 18 705 3 319 3 427 3 160 ∆ ∆ Variations vs. 9M, At constant scope 5 059 2020 Variation At constant 5 288 FX and FX 4 921 Global business +5.0% +5.7% +9.0% Rest of the World +2.8% +5.2% +4.8% Europe excl. Fr
Slide 34: Appendix 4: Quarterly Revenue by Segment
APPENDIX 4: QUARTERLY REVENUE BY SEGMENT 1st quarter 2020 2nd quarter 2020 3rd quarter 2020 In €M 2019 2020 ∆ at cst FX ∆ at cst 2019 2020 ∆ at cst ∆ at cst 2019 2020 ∆ at cst ∆ at cst scop & FX FX sco & FX FX sc & FX France 1 347 1 305 -3.1% -3.1% 1 412 1 185 -16.1% -16.1% 1 416 1 428 +0.8% +0.8% E
Slide 35: Appendix 5: Quarterly Revenue by Business
APPENDIX 5: QUARTERLY REVENUE BY BUSINESS 1st quarter 2020 2nd quarter 2020 3rd quarter 2020 In €M 2019 2020 ∆ at cst ∆ at cst 2019 2020 ∆ at cst ∆ at cst 2019 2020 ∆ at cst ∆ at cst FX scope & FX scope FX scope & FX & FX FX Water 2 637 2 645 +0.0% -0.4% 2 705 2 451 -8.8% -9.5% 2 752 2 794 +3.4% +2.
Slide 36: Appendix 6: Revenue Analysis by Business (1/2)
APPENDIX 6 : REVENUE OF €20 357M, +9.4% AT CONSTANT FX vs. 9M 2020 ANALYSIS BY BUSINESS (1/2) In 20 357 €M 19 765 18 705 4 103 4 366 3 725 ∆ ∆ Variations vs. 9M, 2020 Variation At constant At constant FX scope and FX Energy +17.2% +18.2% +10.6% 7 568 7 090 8 181 Waste +15.4% +15.5% +14.3% Water +0.9
Slide 37: Appendix 6: Revenue Analysis by Business (2/2)
APPENDIX 6 : REVENUE OF €20 357M, +9.4% AT CONSTANT FX vs. 9M 2020 ANALYSIS BY BUSINESS (2/2) WATER : Revenue +1.7% at constant scope and FX to €6 010M France : Revenue of €2 178M, up 1.7% . Volumes -1.9%. Tariff increases: +0.7%. Good commercial momentum and works recovery Central Europe : Revenue
Slide 38: Appendix 7: Quarterly Waste Revenue and Volumes
APPENDIX 7: QUARTERLY WASTE REVENUE AND VOLUMES Quarterly revenue growth at constant scope & FX 25,8% +14,4% 5,6% 2,1% 4,9% 6,1% 4,3% 6,0% 4,1% 5,4% 4,9% 4,2% 4,9% 1,6% 4,0% 0,9% 0,2% -14,6% -3,4% Y-Y Quarterly volume trends 14,9% 3,2% 1,2% 0,0% 3,1% 3,0% 3,0% 4,9% 4,0% 2,5% 2,6% 1,1% 4,1% 0,4% -1,8
Slide 39: Appendix 8: Waste – Evolution of Raw Materials Prices
APPENDIX 8: WASTE – EVOLUTION OF RAW MATERIALS PRICES (PAPER & CARDBOARD) 200 180 160 140 120 100 80 60 40 20 0 Cardboards (ref. 1.05) Paper (Ref. 1.11) 9M 2021 Results 39
Slide 40: Appendix 9: Waste – Breakdown of Revenue by Activity
APPENDIX 9 : WASTE – BREAKDOWN OF REVENUE BY ACTIVITY 2020 9M Revenue : €7 090M 2021 9M Revenue : €8 181M Municipal collection & Street cleaning 9% 13% 9% 13% Commercial & Industrial collection Sorting & Recycling & MBT 24% 18% 24% 18% Energy recovery (incineration) Landfill 9% 7% Hazardous and Liqu
Slide 41: Contacts
CONTACTS Analyst & Investor Relations Media Relations Ronald Wasylec Deputy CFO, Senior Vice President, Investor Relations Laurent Obadia Telephone : +33 1 85 57 84 76 Telephone : +33 1 85 57 89 43 e-mail : ronald.wasylec@veolia.com e-mail: laurent.obadia.@veolia.com Ariane de Lamaze Vice President,