Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Q1 2021 Earnings Presentation
42 slides from Veolia Environnement Sa's earnings presentation, May 5, 2021
Slide 1: Q1 2021 Results
Q1 2021 Results May 5th, 2021
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
Q1 2021 RESULTS AGENDA 01 Success of the Veolia-Suez combination 02 Q1 2021 key highlights : Q1 delivery significantly above 2020 and 2019 03 Q1 2021 Operational and Financial performance : a very strong start to the year 04 Appendices Q1 2021 Results 3
Slide 4: Success of the Veolia-Suez combination
1- Success of the VEOLIA-SUEZ combination VEOLIA and Suez have reached a historical agreement Antoine Frérot, CEO
Slide 5: Veolia and Suez have reached a historical agreement
SUCCESS OF THE VEOLIA-SUEZ COMBINATION VEOLIA AND SUEZ HAVE REACHED HISTORICAL AGREEMENT On April 11th, agreement between Veolia and Suez’s Boards enabling the creation of the world champion of the ecological transformation Veolia will launch a tender offer on the remaining 70.1% of Suez shares at a
Slide 6: Veolia to become the world champion of ecological transformation
SUCCESS OF THE VEOLIA-SUEZ COMBINATION VEOLIA TO BECOME THE WORLD CHAMPION OF THE ECOLOGICAL TRANSFORMATION Creation of the world champion of ecological transformation Veolia's revenues to increase to €37 billion with 230 000 employees International geographical footprint significantly enhanced, not
Slide 7: Expected profile of the new Veolia before synergies
SUCCESS OF THE VEOLIA-SUEZ COMBINATION EXPECTED PROFILE OF THE NEW VEOLIA BEFORE SYNERGIES Impact of Pro Forma Veolia(2) Suez (2) Synergies divestitures(3) before synergies Proforma 2019 ~€27bn ~€17bn ~(€7bn) ~€37bn Revenue(1) Proforma 2019 EBITDA(1) ~€4bn ~€3bn ~(€1bn) ~€6bn €500M Split by business
Slide 8: An improved global geographical footprint
SUCCESS OF THE VEOLIA-SUEZ COMBINATION AN IMPROVED GLOBAL GEOGRAPHICAL FOOTPRINT Latin America – €1.7bn Based on 2019 financials(1) (€bn) Suez Veolia Geographical presence of the combined entity Total Revenue 0.8 0.9 % Suez 48% France – €5.9bn % Veolia 52% (€bn) Suez Veolia Total 0 5.9 Asia – €2.4bn
Slide 9: Calendar
SUCCESS OF THE VEOLIA-SUEZ COMBINATION CALENDAR Timing accelerated and closing expected before year-end Next steps to the completion of the transaction Final Veolia-Suez agreement to be signed by May 14th Filing of a revised tender offer document Offer will be recommended by Suez’s Board Compliance
Slide 10: Q1 2021 key highlights
2- Q1 2021 key highlights Q1 delivery significantly above 2020 and 2019 Antoine Frérot, CEO Estelle Brachlianoff, COO
Slide 11: Q1 2021: a very good start to the year
Q1 2021: A VERY GOOD START TO THE YEAR VEOLIA BACK TO STRONG PROFITABLE GROWTH Q1 Results: recovery of a solid growth trajectory despite 3rd wave of COVID in Europe, thanks to our resilient business model, recovered growth momentum and enhanced efficiency actions Commercial dynamism and pricing disc
Slide 12: Q1 2021 performance by business
Q1 2021: A VERY STRONG START TO THE YEAR Q1 2021 PERFORMANCE BY BUSINESS ❑ Municipal Water : back to normal volumes in almost all Revenue variation at constant scope and FX vs. Q1, 2019 geographies Water and WW +0.7% ❑ Solid Waste : despite C&I volumes missing in Q1,2021 due Technology & networks -3
Slide 13: Q1 2021 main development projects
Q1 2021 MAIN DEVELOPMENT PROJECTS ❑ Fully recovered commercial momentum and project pipeline full Strong commercial momentum in French water ✔ Gain of Cholet potable water (€74M backlog , 11 years) ✔ Gain of Colmar waste water contract (€16M backlog, 4.5 years) ✔ Renewal of Lens/Liévin (€83M backlog
Slide 14: €92M in efficiency gains already achieved
Q1 2021: A VERY STRONG START TO THE YEAR €92M IN EFFICIENCY GAINS ALREADY ACHIEVED, AHEAD OF THE ANNUAL OBJECTIVE OF €350M €M A significant step-up in Efficiency gains Sustained extra efforts in 2021 linked to Covid with an 92 additional 100M€ recover and adapt plan on top of our annual 250m€ effici
Slide 15: 2021 guidance fully confirmed
2021 GUIDANCE(1)(2) FULLY CONFIRMED STRONG CONFIDENCE IN 2021 AFTER Q1 OUTSTANDING DELIVERY Despite continued impact of COVID beginning of 2021 VEOLIA will more than offset 2020 and deliver strong results growth in 2021 Revenue : above 2019 level Activity lost due to COVID almost recovered and compl
Slide 16: Q1 2021 Financial & Operational Performance
3- Q1 2021 Financial & Operational Performance A very strong start to the year Claude Laruelle, CFO
Slide 17: Solid growth momentum and record profitability
SOLID GROWTH MOMENTUM AND RECORD PROFITABILITY Q1 REVENUE UP +4% AND Q1 EBITDA UP +13.6% AT CONSTANT FX Var. Y-Y Var. at In €M Q1, 2020 Q1, 2021 vs. constant FX Q1,2020 vs. Q1,2020 Revenue 6 675 6 807 +2.0% +4.0% EBITDA 970 1 078 +11.2% +13.6% EBITDA margin 14.5% 15.8% Current EBIT 392 469 +19.6% +2
Slide 18: Veolia confirmed back to growth in Q1
VEOLIA CONFIRMED BACK TO GROWTH IN Q1 Q1 REVENUE UP 4% AND Q1 EBITDA UP 13.6% AT CONSTANT FX 2019 2020 2021 Revenue growth at constant FX Year Q1 Q2 Q3 Q4 Q1 France +2.0% -3.1% -16.1% +0.8% +2.5% +5.7% Europe excl. France +4.1% +1.1% -6.7% +0.8% +5.3% +9.0% Rest of the World +8.7% +2.1%(1) -4.4%(1)
Slide 19: Q1 revenue up 4.0% vs. Q1 2020
Q1 REVENUE UP 4.0%(1) vs. Q1 2020 AND UP +2.8%(1) vs. Q1 2019 ACTIVITY WELL ABOVE 2019 AND 2020 FX: -€132M : Latin America -€33M, US dollar In €M -€42M, Central & Eastern Europe for -€34M 61 6 807 SCOPE: +€65M : mostly acquisitions in Central 6 675 Europe partially offset by divestiture of Sade 109
Slide 20: Waste revenue up 3.4% in Q1
WASTE REVENUE UP +3.4% IN Q1 AT CONSTANT SCOPE AND FX CONTINUED UPTREND IN VOLUMES IN Q1, COMBINED WITH SOLID PRICING AND RECYCLING REBOUND Q1, 2020 Q2, 2020 Q3, 2020 Q4, 2020 Q1, 2021 Recycled raw materials prices -2.5% -1.4% -0.9% +0.5% +3.2% Volumes / activity levels -1.8% -14.7% -2.6% -1.8% -0.9
Slide 21: Q1 EBITDA up 13.6% vs. Q1 2020
Q1 EBITDA UP +13.6%(1) vs. Q1 2020 AND UP +7.5%(1) vs. Q1 2019 EBITDA WELL ABOVE 2019 & 2020 - FULL OPERATING LEVERAGE RECOVERY FOREX: -€23M. Latam -€6M, US$ -€3M, 1 078 Central and Eastern Europe -€10M SCOPE : +€48M : mostly acquisitions in 970 24 52 92 Central Europe partially offset by divestitur
Slide 22: France – Q1 operational review
FRANCE – Q1 OPERATIONAL REVIEW RESILIENT WATER –STRONG RECOVERY IN WASTE ∆ ∆ ∆ at constant In €M Q1, 2019 Q1, 2020 Q1, 2021 At constant FX vs. Q1, 2020 FX vs. Q1, 2019 vs. Q1, 2020 Revenue, of which 1 347 1 305 1 379 +5.7% +5.7% +2.4% Water 716 698 703 +0.8% +0.8% -1.8% Waste 631 608 676 +11.2% +11.
Slide 23: Rest of Europe – Q1 operational review
REST OF EUROPE – Q1 OPERATIONAL REVIEW A VERY STRONG START TO THE YEAR WITH AN OUTSTANDING EBITDA PERFORMANCE ∆ ∆ ∆ at constant FX vs. In €M Q1, 2019 Q1, 2020 Q1, 2021 At constant FX vs. Q1, 2020 Q1, 2019 vs. Q1, 2020 Revenue, of which 2 572 2 590 2 785 +7.5% +9.0% +10.4% Central & Eastern Europe 99
Slide 24: Rest of the World – Q1 operational review
REST OF THE WORLD – Q1 OPERATIONAL REVIEW RECOVERY IN ALL REGIONS - EXCELLENT OPERATING LEVERAGE ∆ ∆ ∆ at constant FX In €M Q1, 2019 Q1, 2020 Q1, 2021 At constant FX vs. Q1, 2020 vs. Q1, 2019 vs. Q1, 2020 Revenue, of which 1 764 1 715 1 648 -3.9% +0.6% +5.9%(2) Asia 505 545 544 -0.2% +3.4% +10.5% La
Slide 25: Global Business – Q1 operational review
GLOBAL BUSINESS – Q1 OPERATIONAL REVIEW A GOOD START TO THE YEAR ∆ ∆ ∆ at constant FX In €M Q1, 2019 Q1, 2020 Q1, 2021 At constant FX vs. Q1, 2020 vs. Q1, 2019 vs. Q1, 2020 Revenue, of which 1 102 1 064 995 -6.4% +1.7%(2) -2.4%(2) Construction 632 621 540 -13.1% +0.9%(2) -1.3%(2) Hazardous & liquid
Slide 26: Strong increase of current EBIT
STRONG INCREASE OF CURRENT EBIT, UP 22.7% AT CONSTANT FX Q1, 2020 Q1, 2021 Var. vs. Q1, In €M 2020 at constant FX EBITDA 970 1 078 +13.6% Renewal expenses -61 -65 Depreciation & Amortization (including -535 -528 principal payments on OFAs) Provisions, fair value adjustment & other(1) +3 -27 Share of
Slide 27: Sharp rebound of current net income
SHARP REBOUND OF CURRENT NET INCOME UP 60% AT CONSTANT FX Q1, 2020 Q1, 2021 Variation vs. In €M Q1, 2020 at constant FX Current EBIT(1) 392 469 +22.7% Cost of net financial debt -112 -86 Other financial income and expense -43 -35 Net financial capital gains(1) +4 +2 Income tax expense -62 -93 Non-co
Slide 28: Very strong improvement in FCF due to strict cash discipline
VERY STRONG IMPROVEMENT IN FCF OF +€468M DUE TO STRICT CASH DISCIPLINE €M Net Capex Controlled net industrial Capex : €426M, vs. €458M Discretionary 458 growth capex Optimization of maintenance 426 67 58 Growth contractual capex stable 180 Contractual 186 growth capex Discretionary growth capex of €
Slide 29: Evolution of net financial debt
EVOLUTION OF NET FINANCIAL DEBT 41 15 131 22 In €M 480 1 078 143 55 2 426 65 38 13 217 13 509 Q1 2021 Results 29
Slide 30: 2021 guidance fully confirmed
2021 GUIDANCE(1)(2) FULLY CONFIRMED STRONG CONFIDENCE IN 2021 AFTER Q1 OUTSTANDING DELIVERY Despite continued impact of COVID beginning of 2021 VEOLIA will more than offset 2020 and deliver strong results growth in 2021 Revenue : above 2019 level Activity lost due to COVID almost recovered and compl
Slide 31: Appendices
Q1, 2021 Key Figures Appendices
Slide 32: Appendix 1: Currency movements
APPENDIX 1: CURRENCY MOVEMENTS For 1€ Q1, 2020 Q1, 2021 ∆ 2021 vs. 2020 US dollar Average rate 1.102 1.205 -9.4% Closing rate 1.096 1.173 -7.0% UK pound sterling Average rate 0.861 0.875 -1.6% Closing rate 0.886 0.852 +3.9% Australian dollar Average rate 1.677 1.561 +6.9% Closing rate 1.797 1.541 +1
Slide 33: Appendix 2: Revenue analysis by segment
APPENDIX 2: REVENUE OF €6 807M, +4.0% AT CONSTANT FX ANALYSIS BY SEGMENT In €M 6 785 6 675 6 807 1 064 995 1 102 ∆ ∆ Variations vs. Q1, Variation At constant scope 2020 At constant 1 648 and FX 1 764 1 716 FX Global business -6.4% -5.0% +1.7% Rest of the World -3.9% +0.6% +0.0% Europe excl. France +
Slide 34: Appendix 3: Quarterly revenue by segment
APPENDIX 3: QUARTERLY REVENUE BY SEGMENT 1st quarter 2020 2nd quarter 2020 3rd quarter 2020 In €M 2019 2020 ∆ at cst FX ∆ at cst 2019 2020 ∆ at cst ∆ at cst 2019 2020 ∆ at cst ∆ at cst scope FX scope & FX scope & & FX FX FX France 1 347 1 305 -3.1% -3.1% 1 412 1 185 -16.1% -16.1% 1 416 1 428 +0.8% +
Slide 35: Appendix 4: Quarterly revenue by business
APPENDIX 4: QUARTERLY REVENUE BY BUSINESS 1st quarter 2020 2nd quarter 2020 3rd quarter 2020 In €M 2019 2020 ∆ at cst ∆ at cst 2019 2020 ∆ at cst ∆ at cst 2019 2020 ∆ at cst ∆ at cst FX scope & FX scope FX scope & FX & FX FX Water 2 637 2 645 +0.0% -0.4% 2 705 2 451 -8.8% -9.5% 2 752 2 794 +3.4% +2.
Slide 36: Appendix 5: Revenue analysis by business (1/2)
APPENDIX 5 : REVENUE OF €6 807M, +4.0% AT CONSTANT FX ANALYSIS BY BUSINESS (1/2) In €M 6 785 6 675 6 807 ∆ ∆ Variations vs. 2020 Variation At constant At constant 1 693 1 560 1 789 FX scope and FX Energy +14.8% +17.4% +7.7% Waste +1.8% +3.4% +3.4% 2 455 2 470 2 515 Water -3.0% -1.1% -0.5% Technology
Slide 37: Appendix 5: Revenue analysis by business (2/2)
APPENDIX 5 : REVENUE OF €6 807M, +4.0% AT CONSTANT FX ANALYSIS BY BUSINESS (2/2) WATER : Revenue -0.5% at constant scope and FX to €1 963M France : resilient. Volumes +1.2%. Tariff increases: +0.7%. Works recovering and a few commercial impacts on side activities associated with the lockdown period.
Slide 38: Appendix 6: Quarterly waste revenue and volumes
APPENDIX 6: QUARTERLY WASTE REVENUE AND VOLUMES Quarterly revenue growth at constant scope & FX 6,1% 4,3% 6,0% 4,1% 5,4% 4,9% 4,2% 4,9% +1,6% +3,4% 1,2% -0,8% 1,3% -1,0% 5,6% 2,1% 4,9% 0,9% 0,2% -3,4% -14,6% Y-Y Quarterly volume trends 1,6% 0,9% 0,3% 0,2% 1,2% 0,0% 3,1% 3,0% 3,0% 4,9% 4,1% 2,5% 2,6%
Slide 39: 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 Sources: Until February 2021 Data from OECD Q1 2021 Results 39
Slide 40: Appendix 8: Waste raw materials prices
APPENDIX 8: WASTE – EVOLUTION OF RAW MATERIALS PRICES (PAPER & CARDBOARD) Q1 2021 Results 40
Slide 41: Appendix 9: Debt profile
APPENDIX 9 : DEBT PROFILE (AT MARCH 31, 2021) RATING • Moody’s : P-2/ Baa1 • stable outlook • Standard & Poor’s : A-2 / BBB stable outlook Only one bond repayment in 2021 of €638M took place on Jan.6 2021 Q1 2021 Results 41
Slide 42: Contacts
CONTACTS Analyst & Investor Relations Media Relations Ronald Wasylec Deputy CFO, Senior Vice President, Investor Relations Laurent Obadia Telephone : +33 1 85 57 84 76 Telephone : +33 1 85 57 89 43 e-mail : ronald.wasylec@veolia.com e-mail: laurent.obadia.@veolia.com Ariane de Lamaze Vice President,