Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Q1 2022 Earnings Presentation
37 slides from Veolia Environnement Sa's earnings presentation, May 12, 2022
Slide 1: Q1 2022 Results
Q1 2022 Results 12 May 2022
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: Table of Contents
TABLE OF CONTENTS A strong start to the Veolia Suez merger Strong Q1 delivery of 1 2 3 year in a complex update : integration the new Group, ahead environment well underway of annual guidance 2022 guidance for the Detailed Q1 2022 4 6 Appendices merged Group fully 5 Operational and confirmed Financi
Slide 4: A Strong Start to the Year in a Complex Environment
A STRONG START TO THE YEAR IN A COMPLEX ENVIRONMENT Solid Q1 delivery of the new Group Suez merger progressing very well : integration well underway and first delivery of synergies Another revenue growth acceleration in Q1 driven by price increases notably energy Very strong EBITDA growth 2022 guida
Slide 5: 2022 Veolia Suez Merger Update: Integration Well Underway
2022 VEOLIA SUEZ MERGER UPDATE Integration well underway Day 1 : Suez employees have joined progressively Veolia since January 19th 2022 Antitrust process: 17 out of 18 green-lights obtained, the remaining from the CMA in the UK expected during the summer UK and Water Technology Services (WTS) conso
Slide 6: Q1 2022 Highlights: A Very Strong Start to the Year
Q1 2022 HIGHLIGHTS : A VERY STRONG START TO THE YEAR Solid Q1 delivery of the new Group Revenue of €9 935M, up 14.7%(1) , vs. combined Q1 2021, accelerated by price increases notably energy Underlying organic revenue growth of +7.1% excluding energy prices impact Solid growth coming from both Veolia
Slide 7: Innovative Development Projects
INNOVATIVE DEVELOPMENT PROJECTS…. …Will increase production of locally-sourced sustainable energy and materials in Europe Developing of local energy loops allowing Recycling electric car batteries decarbonization and energy sufficiency Veolia to provide its HPD Launch of an innovative industrial cry
Slide 8: Very Strong Organic Growth of +14.7% vs. Q1 2021 Combined
VERY STRONG ORGANIC GROWTH OF +14.7% vs. Q1 2021 COMBINED Accelerated by energy price increases ORGANIC REVENUE GROWTH vs. Q1 2021 ❑ Municipal Water (revenue of €2 258M) : slightly lower volumes in France Combined Revenue variation at constant scope and Central Europe offset by higher indexation. Go
Slide 9: Strong Efficiency Gains and 1st Synergies Delivery
STRONG EFFICIENCY GAINS AND 1ST SYNERGIES DELIVERY Annual objective of €350M efficiencies and €100M synergies confirmed €M 21 2022 annual objective: €350M of efficiency gains and €100M 24 Synergies of synergies Recover & 87 Adapt Q1 achievements 60 64 68 Efficiency €87M in efficiency gains, vs. €68M
Slide 10: Veolia Well Protected in the New Inflationary and Complex Environment (1/2)
VEOLIA WELL PROTECTED IN THE NEW INFLATIONARY AND COMPLEX ENVIRONMENT Thanks to our resilient activities and our proven adaptation capabilities (1/2) Minimal exposure in Russia and Ukraine (less than 0.5% of revenue and of capital employed ) War in Ukraine In Central and Eastern Europe, very limited
Slide 11: Veolia Well Protected in the New Inflationary and Complex Environment (2/2)
VEOLIA WELL PROTECTED IN THE NEW INFLATIONARY AND COMPLEX ENVIRONMENT Thanks to our resilient activities and our proven adaptation capabilities (2/2) Neutral or slightly positive impact for Veolia thanks to 70% of our revenues indexed, proactive pricing policy and strong discipline on our cost base
Slide 12: 2022 Group Guidance Confirmed
2022 GROUP GUIDANCE CONFIRMED(1) CURRENT NET INCOME GROWTH OF MORE THAN 20% TO AROUND €1.1BN€ Solid organic revenue growth o Driven by higher indexation, price increases and good commercial momentum EBITDA : organic growth between +4% and +6% vs. combined 2021 driven by : o >€350M of efficiency gain
Slide 13: Q1 2022 Financial & Operational Performance
Q1 2022 Financial & Operational Performance Claude Laruelle, CFO
Slide 14: Q1 2022 Key Figures
Q1, 2022 KEY FIGURES REVENUE UP +14.7% AND EBITDA UP +7.6% AT CONSTANT SCOPE AND FX Var. vs. Q1 2021 Var. vs. Q1 2021 Q1 2021 Q1 2021 Q1 2022 reported at combined at In €M reported combined (1) combined(1) constant FX (1) constant scope and FX (1) Revenue 6 807 8 593 9 935 +44.3% +14.7% EBITDA 1 078
Slide 15: Seasonality of Suez Acquired Businesses
SEASONALITY OF SUEZ ACQUIRED BUSINESSES In favor of the 2nd semester Suez assets seasonality coming from: US water Highest water volumes in the summer season Negative EBITDA impact of IFRIC 21 in Q1 (100% of yearly property taxes accounted for in Q1) progressively offset over the year Agbar : peak i
Slide 16: Q1 2022 Key Highlights by Segment
Q1 2022 KEY HIGHLIGHTS BY SEGMENT Q1 Veolia Q1 2021 Q1 2022 Var. vs. Q1 2021 Revenue growth at constant scope and FX reported combined combined combined France & Hazardous Waste Europe 2 034 2 150 2 298 +5.4% Rest of Europe 2 785 3 587 4 523 +26.8% Rest of the World 1 648 2 367 2 575 +7.8% Water Tec
Slide 17: Very Strong Organic Growth of +14.7% vs. Q1 2021 Combined
VERY STRONG ORGANIC GROWTH OF +14.7% vs. Q1 2021COMBINED Underlying organic revenue growth of +7.1% excluding energy prices FOREX: +€165M (UK, US, China) SCOPE: -€84M. At Veolia, Osis 10 335 offset by Scandinavian assets and 9 935 135 400 for Suez, divestiture of Australian 200 assets and EU antitru
Slide 18: Strong EBITDA Organic Growth of +7.6% vs. Q1 2021 Combined
STRONG EBITDA ORGANIC GROWTH OF +7.6% vs. Q1 2021 COMBINED Ahead of annual guidance 1 505 FOREX: +€19M (UK, US, China) 1 456 49 SCOPE: -€22M. At Veolia, Osis offset 21 by Scandinavian assets and for Suez, 1 356 divestiture of Australian assets and 36 87 EU antitrust 19 22 22 27 13 49 COMMERCE/VOLUME
Slide 19: Waste Revenue of €3,786M, Organic Growth of +11.5%
WASTE REVENUE OF €3 786M, ORGANIC GROWTH OF +11.5% Good volumes and pricing, continued increase in recyclate prices Revenue of €3 786M vs. €3 398M, +11.5% at constant scope and forex o France : revenue of €723M, up 7%(1) due to pricing Price increases for both C&I clients and municipal collection –
Slide 20: France and Hazardous Waste Europe Strong 1st Quarter
FRANCE AND HAZARDOUS WASTE EUROPE STRONG 1ST QUARTER Q1 2021 Q1 2021 Q1 2022 ∆ vs. Q1 2021 combined at In €M reported combined combined constant scope and FX Revenue of which 2 034 2 150 2 298 +5.4% Water France 703 703 683 -2.3% Waste France 676 676 723 +7.0% Hazardous Waste Europe 325 442 507 +6.8
Slide 21: Rest of Europe Very Strong Growth Enhanced by Energy Prices
REST OF EUROPE VERY STRONG GROWTH ENHANCED BY ENERGY PRICES Q1 2021 Q1 2021 Q1 2022 ∆ vs. Q1 2021 combined at In €M reported combined combined constant scope and FX Revenue of which 2 785 3 587 4 523 +26.8% Central and Eastern Europe 1 697 1 800 2 426 +34.2% Northern Europe 758 1 107 1 210 +12.5% So
Slide 22: Rest of the World Good Start to the Year
REST OF THE WORLD GOOD START TO THE YEAR Q1 2021 Q1 2021 Q1 2022 ∆ vs. Q1 2021 combined at In €M reported combined combined constant scope and FX Revenue of which 1 647 2 367 2 575 +7.8% Asia - Pacific 806 1 095 1 145 +6.6% o/w Asia 544 608 668 +4.4% o/w Pacific 263 487 477 +9.4% Latin America 192 3
Slide 23: Water Technologies
WATER TECHNOLOGIES Q1 2021 Q1 2021 Q1 2022 ∆ vs. Q1 2021 combined at In €M reported combined combined constant scope and FX Water Technologies 340 885 938 +2.6% o/w VWT 340 340 331 -4.5% o/w WTS - 545 607 +7.0% VWT : continued margin expansion due to refocusing on high-value solutions, and efficienc
Slide 24: Current EBIT of €692M Up 18% at Constant Scope and Forex
CURRENT EBIT OF €692M UP 18% AT CONSTANT SCOPE AND FOREX Q1 2021 Q1 2021 Q1 2022 Var. vs. Q1 2021 In €M reported combined combined combined at constant scope and FX EBITDA 1 078 1 356 1 456 +7.6% Renewal expenses -65 -65 -73 Depreciation & Amortization (including -528 -696 -734 principal payments on
Slide 25: Net Financial Debt Impacted by Suez Operation and Seasonality
NET FINANCIAL DEBT IMPACTED BY SUEZ OPERATION AND SEASONALITY Leverage ratio target of ~3 times confirmed for year-end Controlled net industrial Capex : €475M vs. €648M in Q1 2021 combined o Gross industrial capex of €723M vs. €693M in Q1 2021 combined o Industrial divestments of €248M including the
Slide 26: Evolution of Net Financial Debt
EVOLUTION OF NET FINANCIAL DEBT In €M 513 195 10 259 6 215 21 284 874 20 100 1 456 475 226 112 73 152 9 532 Q1 2022 26
Slide 27: 2022 Group Guidance Confirmed
2022 GROUP GUIDANCE CONFIRMED(1) CURRENT NET INCOME GROWTH OF MORE THAN 20% TO AROUND €1.1BN€ Solid organic revenue growth o Driven by higher indexation, price increases and good commercial momentum EBITDA : organic growth between +4% and +6% vs. combined 2021 driven by : o >€350M of efficiency gain
Slide 28: Appendices
Appendices
Slide 29: Appendix 1: Currency Movements
APPENDIX 1 : CURRENCY MOVEMENTS For 1€ Q1 2021 Q1 2022 ∆ 2022 vs. 2021 US dollar Average rate 1.205 1.122 +6.9% Closing rate 1.173 1.110 +5.3% UK pound sterling Average rate 0.875 0.836 +4.4% Closing rate 0.852 0.846 +0.7% Australian dollar Average rate 1.561 1.551 +0.6% Closing rate 1.541 1.483 +3.
Slide 30: Appendix 2: Quarterly Revenue by Segment
APPENDIX 2: QUARTERLY REVENUE BY SEGMENT 1st quarter 2021 1st quarter 2022 Variation at constant scope and forex New Combined New In €M Veolia Veolia Combined Combined Veolia Veolia France and Hazardous 2 033 117 2 150 2 217 81 2 298 +5.4% Waste Europe Rest of Europe 2 785 802 3 587 3 629 893 4 523
Slide 31: Appendix 3: Quarterly Revenue by Business
APPENDIX 3: QUARTERLY REVENUE BY BUSINESS 1st quarter 2021 1st quarter 2022 Variation at constant scope and forex In €M Veolia New Combined Veolia New Combined Combined Veolia Veolia Water 1 963 758 2 721 2 100 798 2 898 +5.0% Water Technologies 540 545 1 085 574 607 1 181 +6.1% Waste 2 515 883 3 39
Slide 32: Appendix 4: Water Revenue of €4,079M, Organic Growth of +5.3%
APPENDIX 4 WATER REVENUE (INCLUDING WATER TECHNOLOGIES) OF €4 079M, AN ORGANIC GROWTH OF +5.3% WATER : Revenue of €4 079M vs. €3 806M, +7.2% and +5.3% at constant scope and FX o France : Water revenue down 2.3%. Lower volumes (-1.0%) offset by Variation vs. Q1 2021 combined Q1 2022 higher indexation
Slide 33: Appendix 5: Energy Revenue of €2,470M, Organic Growth of +38.5%
APPENDIX 5 ENERGY REVENUE OF €2 470M, AN ORGANIC GROWTH OF +38.5%, DRIVEN BY PRICES ENERGY : Revenue of €2 470M vs. €1 790M, +38.5% at Variation vs. Q1 2021 combined Q1 2022 constant scope and FX Volumes / commerce +9.0% o Central Europe: revenue of € 1 403M up 50.9% due to surge in energy prices We
Slide 34: Appendix 6: Quarterly Waste Revenue and Volumes
APPENDIX 6: QUARTERLY WASTE REVENUE AND VOLUMES Quarterly revenue growth at constant scope & FX 25,8% 14,4%+13,8% 11,5% 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% +4,8% 1,7% 1,2% 0,0% 3,1% 3,0% 3,0% 4,9% 4,0% 2,5% 2,6
Slide 35: Appendix 7: Waste – Revenue vs. Industrial Production
APPENDIX 7: WASTE – REVENUE VS. INDUSTRIAL PRODUCTION Weighted average industrial production indices for 4 key countries including SARP/SARPI: France, U.K, Germany, and North America Source: OECD Q1 2022 35
Slide 36: Appendix 8: Waste – Evolution of Raw Materials Prices
APPENDIX 8: WASTE – EVOLUTION OF RAW MATERIALS PRICES (PAPER & CARDBOARD) 200 €/T 180 160 140 120 100 80 60 40 20 0 Cardboards (ref. 1.05) Paper (Ref. 1.11) Q1 2022 36
Slide 37: Contacts
CONTACTS Analyst & Investor Relations Media Relations Ronald Wasylec Deputy CFO, Senior Vice President, Investor Laurent Obadia 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 Mazalo