Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Veolia — H1 2024 Earnings Presentation
54 slides from Veolia Environnement Sa's earnings presentation, Aug 1, 2024
Slide 1: H1 2024 Results
H1, 2024 RESULTS August 1st, 2024 Estelle Brachlianoff, CEO Claude Laruelle, CFO
Slide 2: Agenda
AGENDA 1. H1, 2024 highlights 2. Detailed H1, 2024 financial performance 3. Appendices
Slide 3: Estelle Brachlianoff, CEO
Estelle Brachlianoff CEO
Slide 4: Strong H1 results reflect solidity of Veolia value creation model
Strong H1 results reflect the solidity of Veolia value creation model and the good start of GreenUp Strategic Program VERY STRONG H1 RESULTS GROWTH +4.4% (2) revenue excl energy prices 1 Strong commercial momentum +5.7% (2) EBITDA Boosters up +6.9% (1) +15.2% (3) current net income PERFORMANCE Conti
Slide 5: Very strong H1 2024 results, at the high end of guidance
Very strong H1 2024 results, at the high end of the year’s guidance Revenue €22,141M Fully confirmed +4.4%(1) 2024 guidance EBITDA €3,266m ➔ Solid organic revenue +5.7%(2) growth(1) ➔ +5% to +6% EBITDA Current EBIT €1,730M organic growth (2) +6.6%(2) ➔ Current Net income > €1.5bn(3) ➔ Leverage ratio
Slide 6: Overperformance in Water and Waste with organic growth above +6%
Overperformance in Water and Waste with organic growth above +6% Water Revenue of €8,798M, +6.4%(2) Revenue €22,141M Waste +4.4%(1) Revenue €7,728M, +6.4%(2) Energy Revenue €5,615M, +1.4%(1)(3) Strong increase in Water and Waste EBITDA Energy EBITDA maintained at a high level (1) at constant scope a
Slide 7: Veolia value creation: profitable long term growth
Veolia value creation : profitable long term growth Solid Fundamentals, Selective Growth & Performance Improvement GreenUp 24-27 1. Growth 2. Performance 3. Capital Allocation value creation objectives > Strongholds > Operational > Capex in new high value Water operations , Excellence creating proje
Slide 8: 1. Growth
14. Growth
Slide 9: Strong revenue growth in H1 boosted by Water technologies & Hazardous Waste
Strong revenue growth in H1 Boosted by Water technologies & Hazardous Waste (1)(2) Strongholds €15,468M, up +3.4% (Water operations , District heating & cooling networks , Solid waste ) (1)(2) Revenue Boosters €6,673M, up +6.9% €22,141M (Water Technologies , Bioenergy, Flexibility & Energy Efficienc
Slide 10: Solid growth of Strongholds activities, up +3.4%
(1)(2) Solid growth of Strongholds activities, up +3.4% Excellent contract renewal, good indexation Water Operations and targeted efficiency actions Revenues €6,400M ● Sedif renewal (€4bn backlog over 12 years) ● New Saint Fons contract (€100M, France) ● Extension of New Orleans O&M ($84M, US) Distr
Slide 11: Innovation and activities' combination supporting Strongholds growth
Innovation and activities’ combination supporting Strongholds growth New Saint Fons contract (France) : an innovative Water /Energy combination ● Innovation at the heart ○ Local green energy supply at secured price ○ Energy efficiency incl. sludge reuse ○ Micropollutant treatment (PFAS) ● €100M back
Slide 12: Superior Boosters growth fueled by Water Technologies
Superior Boosters growth, up +6.9% (1)(2) , fueled by Water Technologies High level of bookings at June 30 including Water Technologies major contract wins in Q1 Revenues €2,398M Growth driven by all activities and regions (notably North America and Middle-East) Bioenergy, Flexibility, Strong growth
Slide 13: Example with Water Technologies
Example with Water Technologies ➔ Very strong H1 driven by all activities and regions ○ Water Technologies revenue up +15.5% and EBITDA up +31.3% ○ High level of synergy delivery (VWT / VWTS) ➔ High level of bookings (€2.8bn) with: New ○ Major contracts such as Hassyan : €296M desalination facility
Slide 14: 2. Performance
2. Performance
Slide 15: Efficiency plan delivering well
Efficiency plan delivering well Efficiency €194M delivered in H1 2024 ahead of the €350M annual objective 10% > Operational efficiency: €132m of gains ● Digital and AI gains : customer service efficiency in water Spain (replicable) ● Process optimization, energy efficiency 22% ● Commercial efficienc
Slide 16: Synergies ahead of target
Synergies ahead of target Cost Synergies €71M in H1 2024 €386M accumulated since merger with Suez, ahead of the year’s target of €400M > Ramp-up of procurement savings (52% vs 20% 32% in H1, 2023) and Water Technologies 28% synergies > Continuation of initiatives in Australia (e.g. 52% internalisati
Slide 17: 3. Capital Allocation
3. Capital Allocation
Slide 18: Dynamic capital allocation policy boosting value creation
Dynamic capital allocation policy boosting value creation €700m acquisitions and €1bn+ divestments (1) Capex Acquisitions Divestitures ● Non strategic assets (construction) : SADE, sold to NGE for an EV of €260M. Annual ● Water Technology plant ● Strategic Booster : Uniper revenue of €1bn expansion
Slide 19: GreenUp Strategic Program
GreenUp Strategic Program
Slide 20: Strong H1 results confirming business model
Strong H1 results confirming business model Supporting our newly launched GreenUp strategic program Essential services, “infrastructure-like”: full asset ownership or with >90% of renewal contracts. Leadership wide position in environmental services TOP 3 of our businesses in all key countries. Supp
Slide 21: Veolia: the reference ESG company
Veolia : the reference ESG company New ambitious climate commitment approved by SBTi GreenUp accelerated Recognition decarbonization commitment -50% scope 1&2 by 2032 Climate commitment and Net +50% scope 4 by 2030 Zero approved (1) by SBTi, in line with 1.5°C trajectory NetZero by 2050 NZ-2 net zer
Slide 22: New ambitious climate commitment approved by SBTi
New ambitious climate commitment approved by SBTi To reach NetZero by 2050 in our scopes 1 and 2 2021 pro forma(1) Innovative solutions to test by 2030 & to deploy by 2050 35,4 Energy > Fuel switch MTons CO 2e (inc. coal exit) 2032 > Energy efficiency Waste -50% 2050 > Methane capture Water NetZero
Slide 23: Veolia's unique positioning on €2,500bn growing market
Veolia’s unique positioning on €2,500bn growing market of environmental services Market Resilience Expertise positioning & growth Footprint Combined & local Track Positioned in large Delivering essential An extensive Engagement businesses anchoring record growing markets of services & operating tech
Slide 24: 2024-2027 roadmap: sustainable growth with high impact
2 024-2027 roadmap : sustainable growth with high impact Decarbonization Solid and resilient 18 Mtons CO 2e erased in 2027 (scope growth (a) 4) inc. boosters : bioenergy, flexibility & emission trajectory reduction compatible & energy efficiency, water with 1,5°C (scope 1&2) technologies, hazardous
Slide 25: H1 2024 Financial & Operational Performance
H1 2024 Financial & Operational Performance Claude Laruelle CFO
Slide 26: Strong H1 2024 results
Strong H1 2024 results Solid businesses, agility and operational excellence drive profit growth Var. vs. H1 2023 at constant In €M H1 2023 H1 2024 scope and FX +0.4% Revenue 22,755 22,141 +4.4% excl. energy prices EBITDA 3,162 3,266 +5.7% EBITDA margin 13.9% 14.8% +90bp(4) Current EBIT(1) 1,674 1,73
Slide 27: H1 2024 Revenue: €22,141M up +4.4% excl. energy prices
(1) H1 2024 Revenue: €22,141M up +4.4% excl. energy prices Evolution vs H1 2023 In €M Intrinsic growth +5.1% ▪ Forex mostly Latam ▪ Scope of which Sade (-€368M) partially offset by acquisition in Germany (+ €84M) ▪ External factors o/w -€917M energy prices - Weather: continued negative -1.9% -1.1% -
Slide 28: H1 2024 Revenue up: solid growth in all geographies
H1 2024 Revenue up +4.4% (1) excl. energy prices : solid growth in all geographies Revenue Evolution by Region vs H1, 2023 In €M Growth at constant scope (1) Water Technologies +15.5% and forex Revenue growth driven by all activities and regions €22,755M €22,141M Rest of the World +6.5% (1) +15.5% S
Slide 29: H1 2024 Revenue up: solid growth in all activities
H1 2024 Revenue up +4.4% (1) excl. energy prices : solid growth in all activities Revenue Evolution by Activities In €M Growth at (1) Water +6.4% constant scope and forex ● Water operations : high indexations and strong commercial momentum €22,755M €22,141M ● Water Technologies : growth driven by al
Slide 30: Water revenue of €8,798M up +6.4%
(1) Water revenue of €8,798M up +6.4% Evolution vs H1 2023 Variation vs. H1, 2023 H1, 2024 ● Good volumes despite rainy weather in France and water Commerce/Volumes/Works +2.2% restrictions in Spain Price effect +4.2% ● Strong activity in Water Growth at constant scope & FX +6.4% Technologies Scope
Slide 31: Waste revenue of €7,728M up +6.4%
(1) Waste revenue of €7,728M up +6.4% Evolution vs H1 2023 Variation vs. H1, 2023 ● Strong commercial momentum in H1 2024 Europe (France, UK, Germany) Commerce/Volumes +1.4% ● Continued selectivity in municipal Price increases +5.0% collection and good commercial Recycled materials prices 0.0% momen
Slide 32: Energy revenue of €5,615M impacted by energy prices
Energy revenue of €5,615M impacted by energy prices, as anticipated, with limited impact on EBITDA sustained at a high level Evolution vs H1 2023 ● Strong commercial momentum in Variation vs. H1, 2023 H1 2024 Energy efficiency services Commerce/Volumes/Works +0.9% ● Revenue decrease due to lower ene
Slide 33: H1 2024 EBITDA up 5.7%: increase in all geographies
H1 2024 EBITDA up 5.7% (1) : Increase in all geographies EBITDA Evolution by Region vs H1, 2023 In €M (1) Growth at Water Technologies EBITDA up +31.3% to constant scope €279M and forex ● Strong performance in all activities: projects, chemicals, €3,266M services and synergy delivery €3,162M +31.3%
Slide 34: H1 2024 EBITDA of €3,266M, up +5.7%
(1) H1 2024 EBITDA of €3,266M, up +5.7% Evolution vs H1 2023 Forex ● Mostly Latam In €M Scope Intrinsic growth ● Inc. Sade (-€12M) partially offset by Hofman in Germany (+€14M) and few Energy prices -44 M€, other tuck-ins Recyclates +5 M€ External factors ● Weather : mildest winter in CEE in the las
Slide 35: Current net income - Group share of €731M, up +15.2%
Current net income - Group share (1) of €731M, up +15.2% (4) Perfectly on track to deliver annual target above €1.5bn Evolution vs H1 2023 In €M H1, 2023 H1, 2024 Variation EBITDA to Current EBIT ● Higher amortization due to the EBITDA 3,162 3,266 +5.7% (2) ramp-up of contracts, notably Tashkent Ren
Slide 36: Net income - Group share of €651M, up +24.6%
Net income - Group share (1) of €651M, up +24.6% (2) vs. June 2023 In €M H1, 2023 H1, 2024 Variation Current net income – Group share (1) 662 731 +15.2% (3) Suez acquisition and integration costs -55 -13 Restructuring charges -37 -33 Non current impairment (incl. GW), PPA and other -47 -34 Net incom
Slide 37: Well controlled capex and net financial debt
Well controlled capex and net financial debt Well-controlled capex Net capex of €1,722M vs. €1,695M in H1, 2023 Growth capex include €102M of decarbonization capex and €86M of Hazardous waste projects Net capex in €M WCR seasonal variation of -€998M vs. -€821M in H1 2023 due to high advance payments
Slide 38: Net financial debt at 30/06/2024 of €19,891M
(1) Net financial debt at 30/06/2024 of €19,891M In €M (1) excluding PPA 38 (2) including hybrid impact for €209M
Slide 39: Fully confirmed 2024 guidance
Fully confirmed 2024 guidance Revenue Continued organic solid growth(1)(2) EBITDA +5% to +6% organic growth(1) Deep dives 2024 Efficiency gains >€350M Energy Deep Dive: 11 January 2024 Cumulated synergies Veolia in the US Deep dive: 18-19 >€400M April 2024 2022-2024 Water Technologies and new Curren
Slide 40: Appendices
APPENDICES
Slide 41: Appendix 1: Forex
APPENDIX 1 : FOREX June 2023 June 2024 Variation 1€ = xxx foreign currency closing rate average rate closing rate average rate closing rate % average rate % US Dollar 1.09 1.08 1.07 1.08 -1% 0% Pound Sterling 0.86 0.88 0.85 0.85 -1% -3% Australian Dollar 1.64 1.60 1.61 1.64 -2% 3% Chinese Renminbi 7
Slide 42: Appendix 2: Detailed H1 2024
APPENDIX 2 : Detailed H1, 2024 Revenue by Strongholds & Boosters var at cst F/X & var at cst Revenues in €m H1, 2023 H1, 2024 scope, excl. F/X & scope energy prices Stronghold Water operations 6,651 6,400 +3.4% Water operations, non regulated 5,436 5,578 +3.5% Municipal regulated (US & Chile) 686 65
Slide 43: Appendix 3: Analysis by geography - France and Hazardous Waste Europe
APPENDIX 3 : Analysis by geography France and Hazardous Waste Europe : solid performance €M Δ at constant H1 2023 H1 2024 scope and FX Revenue of which 4,795 4,531 +2.9% Water France 1,432 1,492 +4.5% Waste France 1,459 1,482 +2.0% Hazardous Waste Europe 1,060 1 114 +7.1% Construction (SADE) & Other
Slide 44: Appendix 3: Analysis by geography - Rest of Europe
APPENDIX 3 : Analysis by geography Rest of Europe impacted by lower energy prices €M Δ at constant scope H1 2023 H1 2024 and FX Revenue of which 9,883 9,252 -7.7% Central and Eastern Europe 6,130 5,412 -13.3% Northern Europe 1,989 2,094 +3.5% Southern Europe 1,764 1,746 -1.1% EBITDA 1,341 1,361 +1.2
Slide 45: Appendix 3: Analysis by geography - Rest of the world
APPENDIX 3 : Analysis by geography Rest of the world: continued solid growth €M Δ at constant H1 2023 H1 2024 scope and FX Revenue of which 5,883 5,956 +6.5% Asia - Pacific 2,268 2,226 +2.1% o/w Asia 1,280 1,202 -1.3% o/w Pacific 988 1,025 +6.5% Latin America 955 945 +25.9% North America 1,631 1,683
Slide 46: Appendix 3: Analysis by geography - Water Technologies
APPENDIX 3 : Analysis by geography Water Technologies: continued very strong growth €M Δ at constant scope H1 2023 H1 2024 and FX Revenues o/w 2,182 2,398 +15.5% VWT 731 770 +9.7% WTS 1,452 1,628 +18.4% EBITDA 233 279 +31.3% EBITDA margin 10.7% 11.6% Comments ● Revenue and EBITDA growth driven by al
Slide 47: Appendix 4: Net financing rate
APPENDIX 4: Net financing rate In €M June 2023 June 2024 Average gross debt (1) 26,230 25,852 Gross cost of borrowing 3.13% 3.77% Average cash balance 9,496 8,859 Interest rate 3.17% 3.65% Average cash balance excluding 6,027 3,767 ● Cost of net financial debt of €331M vs. commercial paper €312M at
Slide 48: Appendix 5: Debt management
APPENDIX 5: Debt management ● Smooth debt repayment schedule: NFD after hedges at June 30, 2024 ○ Repayment in January 2024 of €750M bearing a coupon of 0.892% Currency breakdown of gross debt ○ €461M repaid in July 2024 (after hedges) at June 30, 2024 ● 87% of NFD at fixed rate (€3.2bn variable rat
Slide 49: Appendix 6: Combined debt profile
APPENDIX 6: Combined debt profile (at June 30, 2024) 49
Slide 50: Appendix 7: Net liquidity
APPENDIX 7 Net liquidity In €M June 2023 June 2024 Syndicated credit lines 4,500.0 4,500.0 Bilateral credit lines 801.4 719.8 Lines of credit - - Cash and cash equivalents 7,281.5 7,424.5 Total Veolia 12,582.9 12,644.3 Subsidiaries Bilateral credit lines 224.9 650.1 Cash and cash equivalents(1) 2,61
Slide 51: Appendix 8: Statement of cash flows
APPENDIX 8 In €M June 2023 June 2024 Statement of cash flows EBITDA(1) 3,162 3,266 Net industrial investments -1,695 - 1,722 WCR variation -821 -998 1. Including principal payments on operating Dividends received +115 +77 financial assets Renewal expenses -153 -154 2. In 2024: dividends paid to shar
Slide 52: Appendix 9: Consolidated statement of financial position
APPENDIX 9 Consolidated statement of financial position In €M June 2023 June 2024 Intangible Assets 20,148 19,803 Property, Plant & Equipment 16,958 17,160 Other non-current assets 6,342 6,137 Operating financial assets (current and 1,368 1,363 non-current) Cash and cash equivalents 7,900 7,527 Othe
Slide 53: Appendix 10: Leading ESG rankings
APPENDIX 10 Leading ESG rankings GENERAL ESG S&P Global: N°1 in the Multi Moody’s Analytics: Leader ISS-ESG: Prime and Water Utilities industry, in Waste & Water utilities and 1st decile selection in the DJSI World and Europe, industry with a score of 72 vs. (B rating) in the Multi Utilities “Top 1%
Slide 54: Contacts
CONTACTS Analyst & Investor Relations Media Relations Selma Bekhechi Laurent Obadia Head of Investor Relations Telephone: +33 1 85 57 89 43 Telephone: +33 1 85 57 84 76 e-mail: laurent.obadia.@veolia.com e-mail: selma.bekhechi@veolia.com Ariane de Lamaze Vice President, Investor Relations Evgeniya M