Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Q3 2022 Earnings Presentation
42 slides from Veolia Environnement Sa's earnings presentation, November 2022
Slide 1: Q3 2022 Results
Q3 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 Very strong Q3 and 9M 2022 results 2 Detailed 9M operational and financial performance 3 Appendices Q3 2022 3
Slide 4: Key Q3 2022 Highlights
KEY Q3 2022 HIGHLIGHTS Acceleration of revenue and profits growth in Q3 driven by pricing and synergies Execution of the merger with Suez ahead of plan Confirmation of the resilience and adaptability of our business models ✓ Record price and indexation increases ✓ Quick adaptation to the new energy
Slide 5: Key Q3 2022 Highlights: Acceleration of revenue and profit growth
KEY Q3 2022 HIGHLIGHTS ACCELERATION OF REVENUE AND PROFIT GROWTH IN Q3 In €M Q3 2021 Scope FX Q3 2022 Var. vs Q3 2021 combined combined combined(1) Revenue 9 178 -187 +273 10 517 +13.7% EBITDA 1 519 -30 +40 1 580 +3.4%/ +9.4%(2) Current EBIT 644 -36 +21 742 +17.6% Q3 Comments Acceleration of revenue
Slide 6: Key 9M 2022 Highlights
KEY 9M 2022 HIGHLIGHTS LEADING TO 9M RESULTS AT THE UPPER END OF THE EBITDA GUIDANCE RANGE In €M 9M 2021 Scope(1) FX 9M 2022(1) Var. vs 9M 2021 combined(1) combined combined(2) Revenue 26 951 -472 +681 30 713 +13.2% EBITDA 4 311 -92 +91 4 533 +5.2% Current EBIT 1 911 -101 +38 2 217 +19.4% 9M Comment
Slide 7: Record execution of the merger with Suez
RECORD EXECUTION OF THE MERGER WITH SUEZ ANTITRUST DIVESTITURES FULLY SECURED AND SYNERGY DELIVERY AHEAD OF SCHEDULE Execution of the antitrust divestitures 6 months after the closing of the Offer with significant value creation ✓ EU remedies: 3 divestitures signed in H1, at very high valuations: ha
Slide 8: Confirmation of the resilience of our business models
CONFIRMATION OF THE RESILIENCE OF OUR BUSINESS MODELS HIGHER INDEXATIONS AND RECORD PRICE INCREASES IN Q3 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 proactive price incre
Slide 9: 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 (€6.5bn€ revenue in 2021) ✓ 60% : Municipal energy : producti
Slide 10: A powerful growth platform: Depollution
A POWERFUL GROWTH PLATFORM : DEPOLLUTION NEW HAZARDOUS WASTE OPERATIONS IN ABU DHABI Veolia accelerates hazardous waste management activities in the Middle East with the Abu Dhabi National Oil Company (ADNOC) Merchant plant operation of 2 hazardous waste facilities in the Ruwais industrial complex ●
Slide 11: A powerful growth platform: Water Technologies
A POWERFUL GROWTH PLATFORM EXAMPLE: WATER TECHNOLOGIES Veolia Water Technologies is the World leader in process water and solutions for highly technical and sensitive industries Pharmaceutical Industry: Supply of process water and ultrapure Water ● Recent wins with global pharmaceuticals companies s
Slide 12: Merger accelerates transition towards sustainable growth
MERGER ACCELERATES TRANSITION TOWARDS SUSTAINABLE GROWTH A GLOBAL LEADER IN ECOLOGICAL TRANSFORMATION Complementary expertise to shape a Combined best-in class rankings sustainable environement From sustainability leadership to setting General ESG ● N° 1 in Waste & Water utilities industry by Moody’
Slide 13: A continued strong cost discipline
A CONTINUED STRONG COST DISCIPLINE Very strong discipline on all operational costs and enhanced operational efficiency €264M in efficiency gains delivered at Sept. 30th, fully in line with annual objective of €350M ✔ Complemented by €98M of synergies, ahead of schedule ✔ Confirmation of the €500M cu
Slide 14: Veolia very well positioned to deliver strong earnings growth
VEOLIA VERY WELL POSITIONED TO DELIVER STRONG EARNINGS GROWTH EVEN IN A MORE CHALLENGING ECONOMIC ENVIRONMENT Resilience: A very resilient set of business, 85% macro immune Efficiency: Outstanding efficiency delivery track record Suez merger: ● Enhanced growth potential ● 500M€ of cumulated synergie
Slide 15: Fully confirmed 2022 guidance
FULLY CONFIRMED 2022 GUIDANCE(1)(2) EBITDA GROWTH AT THE TOP END OF THE GUIDANCE RANGE Revenue: solid organic growth EBITDA: organic growth between +4% to +6% vs. combined 2021, driven by : ○ >€350M of efficiency gains ○ More than €100M of synergies Current net income around €1.1bn€ , an increase of
Slide 16: 9M 2022 Financial & Operational Performance
9M 2022 Financial & Operational Performance Claude Laruelle, CFO 16
Slide 17: 2022 9 Month Key Figures
2022 9 MONTH KEY FIGURES VERY STRONG 9M RESULTS 9M 2021 Var. vs. 9M 2021 9M 2021 9M 2022 In €M Reported combined at constant combined (1) combined(1) (standalone) scope and FX (1) Revenue 20 357 26 951 30 713 +13.2% EBITDA 3 140 4 311 4 533 +5.2% Current EBIT 1 258 1 911 2 217 +19.4% Net industrial
Slide 18: Acceleration of revenue growth in Q3 driven by pricing
ACCELERATION OF REVENUE GROWTH IN Q3 DRIVEN BY PRICING STRONG WATER AND ENERGY, RESILIENT WASTE Revenue growth at constant scope and FX Q1 Q2 Q3 Var 9M YTD vs. combined 2021 France & Hazardous Waste Europe +5.4% +2.6% +1.8% +3.2% Rest of Europe +26.8% +20.3% +23.0% +23.4% Rest of the World +7.8% +7.
Slide 19: 2022 9M revenue driven by pricing and solid volumes
2022 9M REVENUE DRIVEN BY PRICING AND SOLID VOLUMES VERY STRONG REVENUE GROWTH IN ALL REGIONS Revenue Evolution by Region vs 2021 +13.2% ORGANIC REVENUE GROWTH vs. 9M 2021 +7.1% excluding energy prices % at constant scope and FX +10.7% ❏ France and Special Waste Europe: +3.2% ✓ French Water driven b
Slide 20: 2022 9M revenue growth by activity
2022 9M REVENUE GROWTH BY ACTIVITY STRONG GROWTH IN ALL BUSINESSES +13.2% ORGANIC REVENUE GROWTH vs. 9M 2021 ❑ Municipal Water +6.7% : good volumes in France, Central Europe, Spain and the US due to hot weather and tourism recovery, combined with higher indexations ❑ Water Technologies and Works +8.
Slide 21: Solid growth of Water revenue up +8.2% YTD
SOLID GROWTH OF WATER REVENUE UP +8.2% YTD A VERY STRONG Q3 +8.2% M€ Variation vs. 9M 2021 combined 9M 2022 Key countries for Water Operations Volumes /Commerce/Works +3.8% France 25% Price effect +3.4% USA 15% Spain 15% Other +1.0% Czech Republic 5% Growth at constant scope & FX +8.2% Water Technol
Slide 22: Continued strong growth of Waste activities +8.2% YTD
CONTINUED STRONG GROWTH OF WASTE ACTIVITIES +8.2% YTD STRONG PRICING AND RESILIENT VOLUMES, UP +1.4% YTD M€ +8.1% Variation vs. 9M 2021 combined 9M 2022 Volumes Key countries for +1.4% Solid Waste Commerce/selectivity -1.3% UK 29% Price increases France 26% +4.3% Germany 14% Recycled materials price
Slide 23: Energy revenue of €5,943M, organic growth of +38.5%
ENERGY REVENUE OF €5 943M, AN ORGANIC GROWTH OF +38.5% DRIVEN BY PRICE INCREASES 38.5% M€ Variation vs. 9M 2021 combined 9M 2022 Key countries Volumes / commerce/works +7.9% District Heating Weather -1.7% Central & Eastern Europe : 90% Energy price increases +30.3% China : 5% Other (works) +2.0% Gro
Slide 24: Organic revenue growth of +13.2% vs. 9M 2021
ORGANIC REVENUE GROWTH OF +13.2% vs. 9M 2021 Underlying organic revenue growth of +7.1% excluding energy prices Evolution vs 9M 2021 ▪ FOREX: +€681M (UK, US, China) In M€ Organic revenue growth : +13.2% ▪ SCOPE: -€472M. At Veolia, Osis offset by Scandinavian assets and for Suez, divestiture of Austr
Slide 25: Organic EBITDA growth of +5.2% vs. 9M 2021
ORGANIC EBITDA GROWTH OF +5.2% vs. 9M 2021 Evolution vs 9M 2021 ▪ FOREX: +€91M (UK, US, China) In M€ Organic EBITDA growth : +5.2% ▪ SCOPE: -€92M. At Veolia, Osis offset by Scandinavian assets and for Suez, divestiture of Australian assets and EU antitrust ▪ COMMERCE/VOLUMES/WORKS: +€57M +2.1% -2.1%
Slide 26: Current EBIT of €2,217M up 19.4%
CURRENT EBIT OF €2 217M UP 19.4% AT CONSTANT SCOPE AND FOREX 9M 2021 9M 2021 9M 2022 Var. vs. 9M 2021 combined at In €M reported combined combined constant scope and FX EBITDA 3 140 4 311 4 533 +5.2% Renewal expenses -220 -216 -222 Amortization and provisions (including principal -1 648 -2 231 -2 25
Slide 27: Net FCF generation of €337M in Q3
NET FCF GENERATION OF €337M IN Q3 Evolution of Q3 NFD excl.FX Comments ❏ Q3: Net FCF of €337M thanks to controlled capex and stable WCR ✓ Controlled net industrial Capex : €815M ✓ Stable WCR variation of -€27M ✓ Lead to NFD down by €351M in Q3 excluding negative forex impact of -€616M ❏ 9M: Net fina
Slide 28: Evolution of net financial debt
EVOLUTION OF NET FINANCIAL DEBT In €M Q3 2022 28
Slide 29: Fully confirmed 2022 guidance
FULLY CONFIRMED 2022 GUIDANCE(1)(2) EBITDA GROWTH AT THE TOP END OF THE GUIDANCE RANGE Revenue: solid organic growth EBITDA: organic growth between +4% to +6% vs. combined 2021, driven by : ○ >€350M of efficiency gains ○ More than €100M of synergies Current net income around €1.1bn€ , an increase of
Slide 30: Appendices
Appendices 30
Slide 31: Appendix 1: Main represented figures for 9M 2021
APPENDIX 1: MAIN REPRESENTED FIGURES FOR THE 9 MONTHS ENDED SEPTEMBER 30, 2021 ❑ New segment classification (IFRS 8) ✔ In accordance with IFRS8, the Group has amended its segment classification to take into account the change of governance effective since early 2022 with the creation of the Zone Fra
Slide 32: Appendix 2: Forex
APPENDIX 2: FOREX FOCUS ON THE MAIN CURRENCIES Q3 2022 32
Slide 33: Appendix 3: Quarterly revenue by segment
APPENDIX 3: QUARTERLY REVENUE BY SEGMENT 1st quarter 2nd quarter 3rd quarter In €M Var Var Var 2021 2022 2021 2022 2021 2022 organic organic organic France Hazardous 2 150 2 298 +5.4% 2 426 2 457 +2.6% 2 394 2 380 +1.8% Waste Europe Rest of Europe 3 587 4 523 +26.8% 3 372 3 982 +20.3% 3 314 3 993 +2
Slide 34: Appendix 4: Quarterly revenue by business
APPENDIX 4: QUARTERLY REVENUE BY BUSINESS 1st quarter 2nd quarter 3rd quarter In €M Var Var Var 2021 2022 2021 2022 2021 2022 organic organic organic Water Services 2 721 2 898 +5.0% 2 782 3 070 +7.9% 3 104 3 508 +9.8% Water Technologies 1 085 1 181 +6.1% 1 285 1 408 +3.5% 951 1 243 +21.3% Waste 3 3
Slide 35: Appendix 5: France and Hazardous Waste Europe
APPENDIX 5: ANALYSIS BY GEOGRAPHY FRANCE AND HAZARDOUS WASTE EUROPE 9M 2021 9M 2021 9M 2022 Δ vs. 9M 2021 combined at In €M reported combined combined constant scope and FX Revenue of which 6 566 6 971 7 135 +3.2% Water France 2 178 2 178 2 196 +1.4% Waste France 2 142 2 142 2 193 +2.3% Hazardous Wa
Slide 36: Appendix 5: Rest of Europe
APPENDIX 5: ANALYSIS BY GEOGRAPHY REST OF EUROPE: REVENUE UP 23.4%(1), AND +8.1%(1) EXCLUDING ENERGY PRICES 9M 2021 9M 2021 9M 2022 Δ vs. 9M2021 combined In €M reported combined combined at constant scope and FX Revenue of which 7 656 10 273 12 498 +23.4% Central and Eastern Europe 4 289 4 630 6 185
Slide 37: Appendix 5: Rest of the World
APPENDIX 5: ANALYSIS BY GEOGRAPHY REST OF THE WORLD : SOLID GROWTH Δ vs.9M 2021 9M 2021 9M 2021 9M 2022 In €M combined at constant reported combined combined scope and FX Revenue of which 5 059 7 285 8 156 +8.5% Asia - Pacific 2 303 3 230 3 328 +3.7% o/w Asia 1 491 1 695 1 834 +2.2% o/w Pacific 812
Slide 38: Appendix 5: Water Technologies
APPENDIX 5: ANALYSIS BY GEOGRAPHY WATER TECHNOLOGIES : ACCELERATED REVENUE GROWTH IN Q3 9M 2021 9M 2021 9M 2022 Δ vs. 9M 2021 combined at In €M reported combined combined constant scope and FX Water Technologies 1 073 2 820 3 317 +10.7% o/w VWT 1 073 1 073 1 180 +6.8% o/w WTS - 1 747 2 138 +13.1% Co
Slide 39: Appendix 6: Waste breakdown of revenue by activity
APPENDIX 6: WASTE – BREAKDOWN OF REVENUE BY ACTIVITY 2021 PF 9M Revenue : €11 057M 2022 9M Revenue : €11 864M Q3 2022 39
Slide 40: 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 Q3 2022 40
Slide 41: Appendix 8: Evolution of paper & cardboard prices
APPENDIX 8: WASTE – EVOLUTION OF PAPER & CARDBOARD PRICES Q3 2022 41
Slide 42: 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