Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Q1 2023 Earnings Presentation
31 slides from Veolia Environnement Sa's earnings presentation, May 4, 2023
Slide 1: Q1, 2023 Results
Q1, 2023 RESULTS Estelle Brachlianoff CEO Claude Laruelle CFO 1
Slide 2: Agenda
AGENDA 1 A very strong start to the year 2 Detailed Q1, 2023 financial and operational performance 3 Appendices Q1 2023 2
Slide 3: Key Q1 2023 Highlights: A very strong start to the year
KEY Q1 2023 HIGHLIGHTS A very strong start to the year Very strong Q1 results Confirmation of the strength of our business Organic EBITDA growth of +8% model, coping with higher inflation, highly resilient to macro context, and strong operating leverage Successful merger with Suez A powerful growth
Slide 4: Very strong Q1 2023 results
VERY STRONG Q1 2023 RESULTS Enabling us to fully confirm 2023 guidance 1 ● Revenue growth of +19.9%(1), +6.3%(1) excl. energy prices, to €12bn ● Increased indexations & continued price increases in addition to high energy prices ● EBITDA of €1 574M, up +8.0%(1) 2 ● Strong operating leverage ● Curren
Slide 5: Strong organic EBITDA growth of +8%
KEY Q1 2023 HIGHLIGHTS Strong organic EBITDA growth of +8% In €M Q1 2022 Scope FX Q1 2023 Var. vs Q1 2022(1) Revenue 9 935 +204 -106 12 007 +19.9% / +6.3% excl. energy prices EBITDA 1 456 +9 -7 1 574 +8.0% Current EBIT(2) 711 -12 -10 788 +14.0% Q1 Comments Strong revenue growth in our 3 businesses ✔
Slide 6: Confirmation of the resilience of our business model
CONFIRMATION OF THE RESILIENCE OF OUR BUSINESS MODEL Higher indexations & price increases, started in 2021, continue successfully in 2023 Veolia fully protected against cost inflation For our indexed revenue base (70% of total) For our 30% of revenue non indexed Indexation aligned with our cost base
Slide 7: A powerful growth platform: significant new contracts and assets won in Q1
A POWERFUL GROWTH PLATFORM Significant new contracts/new assets won in Q1 Decarbonisation Veolia to operate the largest Acceleration of biogas capture BVAG: ramping up of biomass Energy from Waste in Europe replacing coal (Turkey) ● Objective : decarbonizing and reducing ● 800 GWh/yr of heat to 68.0
Slide 8: A powerful growth platform: new contracts won in Q1
A POWERFUL GROWTH PLATFORM Significant new contracts/assets won in Q1 Depollution Resource Regeneration Renewal of Lille Water with an innovative contract New integrated waste management focused on water resource preservation contract in Gold Coast (Australia) ● 10 year contract. €700m backlog ● 7 y
Slide 9: Very strong cost discipline: €87M efficiency gains
VERY STRONG COST DISCIPLINE €87M Efficiency gains, in line with annual target €87M IN EFFICIENCY GAINS DELIVERED IN Q1, IN LINE WITH €350M ANNUAL OBJECTIVE Q1 2023 Savings by Category Q1 2023 Savings by Segment 87M€ 87 M€ Q1 2023 9
Slide 10: €43M of synergies delivered in Q1
€43M OF SYNERGIES DELIVERED IN Q1 €189M cumulated since day 1, in line with our objective of +€280M at end of 2023 Cumulated synergies split by geography Confirmed €500M cumulated cost synergies ✔ Main contributing areas: France, Australia, North America Q1 2023 cumulated Q1 2023 10
Slide 11: Veolia very well positioned to continue to deliver strong earnings growth
VEOLIA VERY WELL POSITIONED TO CONTINUE TO DELIVER STRONG EARNINGS GROWTH regardless of the macro context Unique positioning as worldwide leader in a €2 500bn growing market of Decarbonation, Depollution, Resource Regeneration, and in the TOP 3 of our businesses in all our key countries Resilience:
Slide 12: Fully confirmed 2023 guidance
FULLY CONFIRMED 2023 GUIDANCE In line with 2024 merger accretion targets(1)(2) Revenue: Net debt: solid organic growth leverage ratio ~3x EBITDA: organic growth between +5% Dividend policy: dividend to grow in line to +7% vs. 2022, driven by: with current EPS ○ €350M of efficiency gains ○ > €280M of
Slide 13: Q1 2023 Financial & Operational Performance
Q1 2023 Financial & Operational Performance Claude Laruelle, CFO Q1 2023 13
Slide 14: Q1 2023 key figures
Q1 2023 KEY FIGURES A very strong start to the year Var. vs. Q1 2022 at In €M Q1 2022 Q1 2023 constant scope and FX Revenue 9 935 12 007 +19.9% EBITDA 1 456 1 574 +8.0% Current EBIT(1) 711 788 +14.0% Net Financial Debt(1) 21 284 18 727 FX impacts €M % (vs. Q1 2022) Revenue -106 -1.1% EBITDA -7 -0.5%
Slide 15: Continued strong revenue growth in Q1, driven by pricing
CONTINUED STRONG REVENUE GROWTH IN Q1, DRIVEN BY PRICING Strong water and energy, resilient waste Q1 Var 12M Q1 Revenue growth at constant scope and FX Q2 2022 Q3 2022 Q4 2022 2022 2022 2023 France & Hazardous Waste Europe +5.4% +2.6% +1.8% +1.1% +2.6% +3.0% Rest of Europe +26.8% +20.3% +23.0% +32.5
Slide 16: Water revenue of €4,270M, up 9.9%
WATER REVENUE OF €4 270M, UP +9.9% AT CONSTANT SCOPE AND FX Growth driven by tariff indexations, good volumes and strong Water Technologies +9.9% Variation vs. Q1 2022 Q1, 2023 Key countries for Water Operations Volumes /Commerce/Works +5.1% France 28% USA 15% Price effect +4.5% Spain 17% M€ Latam 1
Slide 17: Waste revenue of €3,603M, up 3.2%
WASTE REVENUE OF €3 603M, UP +3.2% AT CONSTANT SCOPE AND FX Growth of +5.7% excl. recyclate prices, driven by strong pricing and resilient volumes +3.2% Variation vs. Q1 2022 Q1, 2023 M€ Key countries for Volumes +0.1% Solid Waste Commerce +0.5% France 30% UK 20% Price increases +4.1% Germany 14% Re
Slide 18: Energy revenue of €4,133M, organic growth of +54%
ENERGY REVENUE OF €4 133M, AN ORGANIC GROWTH OF +54% Driven by energy price increases +54%(1) M€ Key countries Variation vs. Q1 2022 Q1, 2023 District Heating Volumes / commerce / works +5.9% Central Europe : 90% China : 5% Weather -1.3% Energy price increases +48% Key countries B&I Other +1.4% Serv
Slide 19: Organic revenue growth of +19.9% vs. Q1 2022
ORGANIC REVENUE GROWTH OF +19.9% vs. Q1 2022 Underlying organic revenue growth of +6.3% excluding energy prices Evolution vs Q1 2022 Organic revenue growth : +19.9% ▪ FOREX: -€106M (Polish zloty, In M€ sterling pound, Argentinian peso) ▪ SCOPE: +€204M Divestment of Suez waste assets in the UK offset
Slide 20: Organic EBITDA growth of +8% vs. Q1 2022
ORGANIC EBITDA GROWTH OF +8% vs. Q1 2022 Fueled by efficiency and synergies Evolution vs Q1 2022 In M€ Organic EBITDA growth : +8% ▪ SCOPE: +€9M. Divestment of Suez waste assets in the UK offset by 17 more days of consolidation ▪ FOREX: -€7M ▪ COMMERCE/VOLUMES/WORKS: +€23M ▪ WEATHER: -€10M (mild Q1
Slide 21: Current EBIT of €788M up 14.0%
CURRENT EBIT(1) OF €788M UP 14.0% AT CONSTANT SCOPE AND FOREX Q1 2022 Q1 2023 Var. vs. Q1 2022 In €M at constant scope and FX EBITDA 1 456 1 574 +8.0% Renewal expenses -73 -68 Amortizations(1) including OFA repayment -715 -736 Industrial capital gains net of provisions and +28 -3 asset impairment Sh
Slide 22: Well controlled net financial debt
WELL CONTROLLED NET FINANCIAL DEBT Despite usual WCR seasonality Gross capex evolution Comments (€M) 942 ■ Gross industrial capex of €942M include accelerated decarbonization capex 762(3) ✓ Maintenance capex of €431M, including renewal of HQ leasing (IFRS 16) ✓ Contractual capex of €351M: phasing of
Slide 23: Net financial debt of €18.7bn
NET FINANCIAL DEBT OF €18.7bn* In €M *excl. PPA Suez Q1 2023 23
Slide 24: Fully confirmed 2023 guidance
FULLY CONFIRMED 2023 GUIDANCE In line with 2024 merger accretion targets(1)(2) Revenue: Net debt: solid organic growth leverage ratio ~3x EBITDA: organic growth between +5% Dividend policy: dividend to grow in line to +7% vs. 2022, driven by: with current EPS ○ €350M of efficiency gains ○ > €280M of
Slide 25: Appendices
Appendices Q1 2023 25
Slide 26: Appendix 1: Forex
APPENDIX 1: FOREX Focus on the main currencies Q1 2023 26
Slide 27: Appendix 2: Quarterly revenue by segment and business
APPENDIX 2: QUARTERLY REVENUE BY SEGMENT AND BUSINESS 1st quarter 1st quarter In €M In €M 2022 2023 Var organic Var 2022 2023 organic France Hazardous 2 298 2 354 +3.0% Waste Europe Water Services 2 639 2 961 8.8% Rest of Europe 4 523 5 664 +32.6% Water Technologies 1 181 1 310 12.6% and Works Rest
Slide 28: Appendix 3: Waste revenue by activity
APPENDIX 3 Waste – Breakdown of Q1 2023 Waste revenue by activity Q1 2023 Waste Revenue €3 603M Q1 2023 28
Slide 29: Appendix 4: Waste revenue vs. industrial production
APPENDIX 4 Waste – Revenue vs. industrial production Weighted average industrial production indices for 4 key countries including SARP/SARPI: France, U.K, Germany, and North America Q1 2023 29
Slide 30: Appendix 5: Evolution of paper and cardboard prices
APPENDIX 5 Waste - Evolution of paper & cardboard prices Q1 2023 30
Slide 31: Contacts
CONTACTS Analyst & Investor Relations Media Relations Ronald Wasylec Laurent Obadia Deputy CFO, Senior Vice President, Investor Relations Telephone: +33 1 85 57 89 43 Telephone: +33 1 85 57 84 76 e-mail: laurent.obadia.@veolia.com e-mail: ronald.wasylec@veolia.com Ariane de Lamaze Evgeniya Mazalova