Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — FY2022 Earnings Presentation
62 slides from Veolia Environnement Sa's earnings presentation, 2023
Slide 1: FY 2022 Results
FY 2022 RESULTS Estelle Brachlianoff CEO Claude Laruelle CFO 1
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: Agenda
AGENDA 1 A historical year: Success of Suez integration and 2022 Results well above guidance 2 Detailed 2022 financial and operational performance 3 Appendices RESULTS 2022 3
Slide 4: Key 2022 Highlights: a historical year, well above guidance
KEY 2022 HIGHLIGHTS a historical year, well above guidance Record 2022 results, above guidance, A powerful growth platform with a very strong Q4 Successful merger with Suez An ambitious 2023 guidance, and benefits associated ahead of plan in line with 2024 accretion objectives Confirmation of the st
Slide 5: Veolia delivered outstanding 2022 performance at all levels
VEOLIA DELIVERED OUTSTANDING 2022 PERFORMANCE AT ALL LEVELS 2022 Results put the Group on a path of strong profits growth for 2023 and 2024 1 Revenue growth of +14.1%(1), 4 ● Net FCF of €1 032M +6.5%(1) excl. energy prices, to €42.9bn (€1.2bn excl. exceptional Suez integration costs) Growth accelera
Slide 6: Key Q4 2022 Highlights
KEY Q4 2022 HIGHLIGHTS Acceleration of revenue and profit growth in Q4 due to strong energy performance In €M Q4 2021 Scope FX Q4 2022 Var. vs Q4 2021 combined combined(1) Revenue 10 723 -285 -8 12 172 +16.2% EBITDA 1 513 -48 -1 1 663 +13.1% Current EBIT(2) 779 -40 -19 782 +7.9% Q4 Comments Accelera
Slide 7: Key 12M 2022 Results Highlights
KEY 12M 2022 RESULTS HIGHLIGHTS EBITDA growth and current net income above guidance In €M 12M 2021 Scope FX 12M 2022(1) Var. vs 12M 2021 combined(1) combined(3) Revenue 37 675 -757 +673 42 885 +14.1% EBITDA 5 823 -139 +91 6 196 +7.2% Current EBIT(2) 2 738 -141 +19 3 062 +16.3% Current net Income(2)
Slide 8: Record execution of the merger with Suez
RECORD EXECUTION OF THE MERGER WITH SUEZ Antitrust divestitures fully executed and synergy delivery ahead of schedule Execution of all the antitrust divestitures 12 months €146M of synergies delivered in Year 1, after the closing of the Offer with significant value above annual target creation and €
Slide 9: Confirmation of the resilience of our business models
CONFIRMATION OF THE RESILIENCE OF OUR BUSINESS MODELS Higher indexations and price increases in Q4 to be continued 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 Continued proa
Slide 10: Confirmation of the adaptability of our business models
CONFIRMATION OF THE ADAPTABILITY OF OUR BUSINESS MODELS Quick adaptation to the new energy context Energy crisis reinforced our positioning as a provider of alternative, renewable, locally sourced energy 2 main lines of business in Energy ✓ ~60% : Municipal energy : production/distribution of heat a
Slide 11: A powerful growth platform: Decarbonation
A POWERFUL GROWTH PLATFORM A year of significant innovative developments focused on Decarbonation 2022 Decarbonation projects won / completed New Biomass plant in Braunschweig (BVAG) Innovative management of the heating and cooling network of the Paris-Saclay facilities ● 800 GWh/yr of heat to ● Ene
Slide 12: A powerful growth platform: Regeneration
A POWERFUL GROWTH PLATFORM A year of significant innovative developments focused on circular economy / resource Regeneration 2022 Regeneration projects won or completed New recycling assets in Germany ● Revenue of €250M in waste collection and recycling facilities in Bavaria ● Synergies with our exi
Slide 13: A powerful growth platform: Depollution
A POWERFUL GROWTH PLATFORM A year of significant innovative developments focused on Depollution 2022 Depollution projects won or completed New hazardous waste contract in the Middle East New Hazardous waste treatment and renewable with the Abu Dhabi National Oil Company (ADNOC) energy production ass
Slide 14: A powerful growth platform: Innovation/technology
A POWERFUL GROWTH PLATFORM A year of significant developments focused on Innovation/technology 2022 Innovative & technology projects Helping cities meet the challenges Reducing the carbon and water footprint of climate change in the food and beverage industry ● Extension, upgrade and O&M of the ● Wa
Slide 15: Merger accelerates transition towards sustainable growth
MERGER ACCELERATES TRANSITION TOWARDS SUSTAINABLE GROWTH A global leader in ecological transformation Taxonomy Much improved ESG rankings 33% of our activities Taxonomy aligned General ESG ● N° 1 in Waste & Water utilities industry by Moody’s ESG solutions (2022) ● N°2 in the Multi and Water Utiliti
Slide 16: Continued improvement of our ESG achievements
MERGER ACCELERATES TRANSITION TOWARDS SUSTAINABLE GROWTH Continued improvement of our ESG achievements, in line with 2023 targets Dimension Objective KPI 2019 2022 2023 Target Customer and consumer satisfaction NPS 48 with 83%* >30 with 75% of the Net Promoter Score NA SDG 8 of revenue covered reven
Slide 17: Continued improvement of our ESG achievements
MERGER ACCELERATES TRANSITION TOWARDS SUSTAINABLE GROWTH Continued improvement of our ESG achievements, in line with 2023 targets Dimension Objective KPI 2019 2022 2023 Target Employee commitment Commitment rate of employees measured through 89% an independent survey 84 % Above 80 % SDG 8 (target 80
Slide 18: Very strong cost discipline: €371M efficiency gains
VERY STRONG COST DISCIPLINE €371M Efficiency gains, above annual target €371M IN EFFICIENCY GAINS DELIVERED IN 2022, ABOVE €350M ANNUAL OBJECTIVE 2022 Savings by Category 2022 Savings by Segment 371M€ 371M€ RESULTS 2022 18
Slide 19: €146M of synergies delivered in year 1
€146M OF SYNERGIES DELIVERED IN YEAR 1 well above 2022 target of €100M 2022 synergies split Confirmed €500M cumulated by cost category cost synergies ✔ Staff & Subcontracting ✔ HQ : IT, real Estate, staff ✔ Process & Production: internalisation of disposal waste volumes: Australia ✔ Purchasing savin
Slide 20: In a nutshell
IN A NUTSHELL A piloted and agile group ready to deliver strong growth Growth: Depollution, Regeneration, Decarbonization ● Growth enhanced by combination with Suez: complementary geographies, technologies, innovation and undisputable leading WW positions : in the TOP 3 of its businesses in all its
Slide 21: An ambitious 2023 guidance
AN AMBITIOUS 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 cu
Slide 22: 12M 2022 Financial & Operational Performance
12M 2022 Financial & Operational Performance Claude Laruelle, CFO RESULTS 2022 22
Slide 23: 2022 Key Figures
2022 KEY FIGURES Very strong 2022 results Var. vs. 12M 2021 12M 2021 12M 2021 In €M 12M 2022 (1) combined at constant Reported combined (1) scope and FX (1) Revenue 28 508 37 675 42 885 +14.1% EBITDA 4 234 5 823 6 196 +7.2% Current EBIT(2) 1 766 2 738 3 062 +16.3% Current net income group share(2) 8
Slide 24: Acceleration of revenue growth in Q4 driven by pricing
ACCELERATION OF REVENUE GROWTH IN Q4 DRIVEN BY PRICING Strong water and energy, resilient waste Revenue growth at constant scope and FX Q1 Q2 Q3 Q4 Var 12M YTD vs. combined 2021 France & Hazardous Waste Europe +5.4% +2.6% +1.8% +1.1% +2.6% Rest of Europe +26.8% +20.3% +23.0% +32.5% +26.1% Rest of th
Slide 25: 2022 revenue driven by pricing and solid volumes
2022 REVENUE DRIVEN BY PRICING AND SOLID VOLUMES Very strong revenue growth in all regions Revenue Evolution by Region vs 2021 +14.1% ORGANIC REVENUE GROWTH vs. 2021 +6.5% excluding energy prices % at constant scope and FX ❏ France and Special Waste Europe: +2.6% ✓ French Water driven by volumes (+0
Slide 26: 2022 revenue growth by activity
2022 REVENUE GROWTH BY ACTIVITY Strong growth in all businesses +14.1% ORGANIC REVENUE GROWTH vs. 2021 ● Access to Water +6.3% : growth driven by all geographies (specially France, Spain, Chile and US) ● Water Technologies and Works +8.1% : growth of both VWT (+4.4%) driven by Technology and Service
Slide 27: Water revenue of €18.3bn, up +8.2% YTD
M€ WATER REVENUE OF €18.3BN, UP +8.2% YTD Growth driven by tariff indexations and good volumes +8.2% Variation vs. PF 2021 combined 2022 Key countries for Water Operations Volumes /Commerce/Works +3.6% France 24% USA 14% Price effect +3.2% Spain 14% Latam 8% Other +1.4% Czech Republic 5% Growth at c
Slide 28: Waste revenue of €15.8bn, +6.8% YTD
WASTE REVENUE OF €15.8BN,+6.8% YTD M€ Strong pricing and resilient volumes, +1.2% ytd +6.8% Variation vs. PF 2021 combined 2022 Volumes +1.2% Key countries for Solid Waste Commerce/selectivity -1.4% UK 28% Price increases +4.6% France 27% Germany 14% Recycled materials prices +1.7% Australia 12% Ene
Slide 29: Energy revenue of €9.2bn, organic growth of +44.7%
ENERGY REVENUE OF €9.2BN, AN ORGANIC GROWTH OF +44.7% Driven by energy price increases +44.7%(1) M€ Variation vs. PF 2021 combined 2022 Key countries Volumes / commerce/works +6.4% District Heating Weather -1.5% Central Europe : 90% China : 7% Energy price increases +36.6% Other (works) +3.2% Key co
Slide 30: Organic revenue growth of +14.1% vs. 2021
ORGANIC REVENUE GROWTH OF +14.1% vs. 2021 Underlying organic revenue growth of +6.5% excluding energy prices Evolution vs 2021 Organic revenue growth : +14.1% In M€ ▪ FOREX: +€673M (UK, US, China) ▪ SCOPE: -€757M. At Veolia, Osis offset by Scandinavian assets and for Suez, divestiture of Australian
Slide 31: Organic EBITDA growth of +7.2% vs. 2021
ORGANIC EBITDA GROWTH OF +7.2% vs. 2021 Evolution vs 2021 ▪ FOREX: +€91M (UK, US, China) ▪ SCOPE: -€139M. At Veolia, Osis offset by Scandinavian assets and for Suez, In M€ Organic EBITDA growth : +7.2% divestiture of Australian assets and EU antitrust ▪ COMMERCE/VOLUMES/WORKS: +€81M ▪ WEATHER: -€58M
Slide 32: Current EBIT of €3,062M up 16.3%
CURRENT EBIT(1) OF €3 062M UP 16.3% AT CONSTANT SCOPE AND FOREX 2021 2021 2022 Var. vs. 2021 combined In €M reported combined at constant scope and FX EBITDA 4 234 5 823 6 196 +7.2% Renewal expenses -292 -287 -303 Amortizations(1) including OFA repayment -2 214 -2 961 -3 025 OFA repayment one off -8
Slide 33: Current net income of €1,162M up 29.7%
CURRENT NET INCOME(1) OF 1 162M UP +29.7%(2) VS. REPORTED 2021 2021 2021 2022 In €M reported combined Current EBIT (1) 1 766 2 738 3 062 Cost of net financial debt (1) -343 -707 Other financial income and expense -145 -386 Suez dividend +122 - Net financial capital gains(3) -16 +70 Income tax expens
Slide 34: Net income group share of €716M, up +77%
NET INCOME GROUP SHARE OF €716M, UP +77% VS. REPORTED 2021 Non current items mostly due to Suez acquisition and integration costs 2021 2021 2022 Var. vs. 2021 In €M reported combined reported Current net income – Group share 896 (1) 1 162(2) +29.7%(3) Suez acquisition and integration costs -218 -285
Slide 35: Net FCF generation of €1,032M
NET FCF GENERATION OF €1 032M Including €182M exceptional Suez integration charges Comments Capex evolution (€M) ❏ Gross industrial capex of €3 666M vs. €3 543M, stable at constant FX, of which 3 089 3 176 ✓ Maintenance capex up 9% at constant FX (incl. IFRS 16) ✓ Growth capex down 7.5% at constant
Slide 36: Net financial debt of €18.1bn
NET FINANCIAL DEBT OF €18.1BN In €M Leverage ratio of 2.9x *excl. PPA Suez RESULTS 2022 36
Slide 37: An ambitious 2023 guidance
AN AMBITIOUS 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 cu
Slide 38: Appendices
Appendices RESULTS 2022 38
Slide 39: Appendix 1: Evolution of financial indicators post Suez acquisition (1/2)
APPENDIX 1: EVOLUTION OF FINANCIAL INDICATORS POST SUEZ ACQUISITION (1/2) ● The 2022 accounts include the final impacts of the Purchase Price Allocation exercise, carried out within 12 months of the takeover of Suez (18 January 2022) and in accordance with IFRS 3. ● As the Group's financial targets
Slide 40: Appendix 1: Evolution of financial indicators post Suez acquisition (2/2)
APPENDIX 1: EVOLUTION OF FINANCIAL INDICATORS POST SUEZ ACQUISITION (2/2) The transition from the new financial indicators to the old definition financial indicators is detailed below: Impacts 2022 (€M) > Current EBIT ‘New definition’ 3 062 - Amortization of PPA tangible and intangible assets -226 =
Slide 41: Appendix 2: Impact of new segment classification - revenue
APPENDIX 2: IMPACT OF NEW SEGMENT CLASSIFICATION (IFRS 8) AND OF THE INTEGRATION OF ASSETS FROM SUEZ 31 december 2021 proforma revenue by segment New segment classification (IFRS 8) In accordance with IFRS8, the Group has amended its segment classification to take into account the change of governan
Slide 42: Appendix 2: Impact of new segment classification - EBITDA
APPENDIX 2: IMPACT OF NEW SEGMENT CLASSIFICATION (IFRS 8) AND OF THE INTEGRATION OF ASSETS FROM SUEZ 31 december 2021 proforma EBITDA by segment New segment classification (IFRS 8) In accordance with IFRS8, the Group has amended its segment classification to take into account the change of governanc
Slide 43: Appendix 2: Impact of new segment classification - capex
APPENDIX 2: IMPACT OF NEW SEGMENT CLASSIFICATION (IFRS 8) AND OF THE INTEGRATION OF ASSETS FROM SUEZ 31 december 2021 proforma CAPEX by segment New segment classification (IFRS 8) In accordance with IFRS8, the Group has amended its segment classification to take into account the change of governance
Slide 44: Appendix 3: Forex
APPENDIX 3: FOREX Focus on the main currencies RESULTS 2022 44
Slide 45: Appendix 4: Quarterly revenue by segment
APPENDIX 4: QUARTERLY REVENUE BY SEGMENT 1st quarter 2nd quarter 3rd quarter 4th quarter In €M Var Var Var Var 2021 2022 organi 2021 2022 2021 2022 2021 2022 organic organic organic c France Hazardous 2 150 2 298 +5.4% 2 426 2 457 +2.6% 2 394 2 380 +1.8% 2 571 2 532 +1.1% Waste Europe Rest of 3 587
Slide 46: Appendix 5: Quarterly revenue by business
APPENDIX 5: QUARTERLY REVENUE BY BUSINESS 1st quarter 2nd quarter 3rd quarter 4th quarter In €M Var Var Var Var 2021 2022 2021 2022 2021 2022 2021 2022 organic organic organic organic Water Services 2 721 2 898 +5.0% 2 782 3 070 +7.9% 3 104 3 508 +9.8% 3 133 3 438 +9.1% Water Technologies 1 085 1 18
Slide 47: Appendix 6: 2022 Veolia key figures by business and geography
APPENDIX 6: 2022 VEOLIA KEY FIGURES BY BUSINESS AND GEOGRAPHY €42.8bn €6.2bn €42.8bn €6.2bn RESULTS 2022 47
Slide 48: Appendix 7: France and Hazardous Waste Europe
APPENDIX 7: ANALYSIS BY GEOGRAPHY France and Hazardous Waste Europe 12M 2021 12M 2021 Δ vs. 12M 2021 combined In €M 12M 2022 reported combined at constant scope and FX Revenue of which 8 991 9 542 9 667 +2.6% Water France 2 971 2 971 3 000 +1.6% Waste France 2 897 2 897 2 916 +0.5% Hazardous Waste E
Slide 49: Appendix 7: Rest of Europe
APPENDIX 7: ANALYSIS BY GEOGRAPHY Rest of Europe: revenue up 26.1%(1), and +7.2%(1) excluding energy prices 12M 2021 12M 2021 Δ vs. 12M2021 combined In €M reported 12M 2022 combined at constant scope and FX Revenue of which 10 942 14 500 17 850 +26.1% Central and Eastern Europe 6 260 6 738 9 400 +40
Slide 50: Appendix 7: Rest of the world
APPENDIX 7: ANALYSIS BY GEOGRAPHY Rest of the world: solid growth Δ vs.12M 2021 12M 2021 12M 2021 In €M reported combined 12M 2022 combined at constant scope and FX Revenue of which 7 068 10 111 11 196 +8.5% Asia - Pacific 3 247 4 509 4 579 +3.3% o/w Asia 2 132 2 411 2 587 +2.7% o/w Pacific 1 115 2
Slide 51: Appendix 7: Water Technologies
APPENDIX 7: ANALYSIS BY GEOGRAPHY Water Technologies: a strong year 12M 2021 12M 2021 Δ vs. 12M 2021 combined In €M 12M 2022 reported combined at constant scope and FX Water Technologies 1 506 3 919 4 561 +10.0% o/w VWT 1 506 1 506 1 612 +4.4% o/w WTS - 2 413 2 948 +13.5% EBITDA 103 432 496 +4.1% EB
Slide 52: Appendix 8: Waste revenue by activity and geography
APPENDIX 8 Waste – Breakdown of revenue by activity and geography 1,1% 2,5% 4,4% RESULTS 2022 52
Slide 53: Appendix 9: Waste revenue vs. industrial production
APPENDIX 9 Waste – Revenue vs. industrial production Weighted average industrial production indices for 4 key countries including SARP/SARPI: France, U.K, Germany, and North America RESULTS 2022 53
Slide 54: Appendix 10: Evolution of paper & cardboard prices
APPENDIX 10 Waste - Evolution of paper & cardboard prices RESULTS 2022 54
Slide 55: Appendix 11: Net financing rate
APPENDIX 11 2021 2022 Net financing rate In €M Veolia standalone Average gross debt (1) 18 392 27 403 o Cost of net financial debt of €633M: impact of scope effect from Suez acquisition (+€226 M) Gross cost of borrowing 1.84% 2.47% Average cash balance 7 091 9 512 o In addition, a non recurring inco
Slide 56: Appendix 12: Debt management
APPENDIX 12 Debt management NFD after hedges at December 31st, 2022 ✔ Repayment in March 2022 of €650M bearing a coupon of 0.672%. Fixed rate : 83% ✔ Repayment in May 2022 of €645M bearing a coupon of 5.125%. Variabilized rate: 11% ✔ Repayment in June 2022 of €613M bearing a coupon of 4.125% Inflate
Slide 57: Appendix 13: Combined debt profile
APPENDIX 13 Combined debt profile (at December 31st, 2022) RATING • Moody’s : P-2/ Baa1 • stable outlook • Standard & Poor’s : A-2 / BBB stable outlook RESULTS 2022 57
Slide 58: Appendix 14: Net liquidity
APPENDIX 14 Net liquidity December 2021 December 2022 Syndicated credit lines 3000,0 5 500,0 Bilateral credit lines 1000,0 910,3 Lines of credit 22,9 - Cash and cash equivalents 10 333,8 8 072,3 Total Veolia 14 356,7 14 482,6 Subsidiaries Syndicated credit lines - - Cash and cash equivalents(1) 1 15
Slide 59: Appendix 15: Net industrial investments by segment
APPENDIX 15 Net industrial investments by segment RESULTS 2022 59
Slide 60: Appendix 16: Statement of cash flows
APPENDIX 16 Dec 2021 Statement of cash flows In €M published Dec 2022 EBITDA(1) 4 234 6 197 Net industrial investments -2 212 -3 089 (1) Including principal payments on operating financial assets WCR variation +382 +48 Dividends received 223 129 (2) In 2022: dividends paid to shareholders (-€688M) ,
Slide 61: Appendix 17: Consolidated statement of financial position
APPENDIX 17 Consolidated statement of financial position December December 2021 2022 Intangible Assets 11 236 20 071 Property, Plant & Equipment 8 702 16 569 Other non-current assets 8 504 6 756 Operating financial assets (current and non-current) 1 320 1 377 Cash and cash equivalents 10 519 9 012 O
Slide 62: 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