Seche Environnement Sa · EURONEXT:SCHP
Seche Environnement Sa — FY2018 Earnings Presentation
48 slides from Seche Environnement Sa's earnings presentation, Mar 12, 2019
Slide 1: Consolidated results at December 31, 2018
Consolidated results at December 31, 2018 Meeting of March 12, 2019
Slide 2: 2018: good operational performance, main financial goals met
2018: good operational performance main financial goals met Contributed revenue +10% to €560m EBITDA +11% to €109m, i.e. 19.4% of contributed revenue COI +11% to €44m, i.e. 7.9% of contributed revenue Investments under control and financial debt reduced with financial leverage down to 2.9x EBITDA Co
Slide 3: Strong contribution from International to consolidated performance
Strong contribution from International to consolidated performance Change in contributed revenue per quarter Change in EBITDA by scope +34% 8,7 11,7 +15% 64,0 55,6 +9% 97,0 89,4 2017 2018 EBITDA - France International EBITDA +9% 496,5 Change in COI by scope 456,3 +60% 5,0 8,0 +4% 34,7 36,2 2017 2018
Slide 4: Strong growth, higher profitability, solid cash generation
Strong growth on promising markets Increase in current operating profitability Solid cash generation and decline in net debt Solid market environment in France and abroad • France: Promising industrial environment and solid contracts with Local Authorities • International: Robust sales in the new sc
Slide 5: 2019 outlook: Solid fundamentals across all scopes
2019 outlook Solid fundamentals across all scopes Internal growth driven by momentum of markets France: Markets supported by the development of the circular economy (regulations and client needs) Project Osiris International: Continued strong business in Salaise (France) treatment activities (Ch
Slide 6: Confidence in our ability to achieve or even exceed our 2020 targets
Confidence in our ability to achieve or even exceed our 2020 targets by 2019 2018: Economic and financial objectives Selective investments already met Contributed revenue > €550m Financial leverage < 3x EBITDA Excellence in industry Cash conversion ratio > 35% EBITDA Confidence in Internationa
Slide 7: Results and financial situation as at December 31, 2018
Baptiste Janiaud Administrative and Financial Manager RESULTS AND FINANCIAL SITUATION AS AT DECEMBER 31, 2018 Consolidated results at December 31, 2018 7
Slide 8: Key figures 2018
Key figures 2018 Contributed revenue 511.9 - 560.5 - +10% EBITDA 98.1 19.2% 108.7 19.4% +11% Current operating income 39.7 7.8% 44.2 7.9% +11% Operating income 37.3 7.3% 38.0 6.8% +2% Financial income (13.6) - (13.4) - Net income (Group share) 15.4 3.0% 15.6 2.8% +2.0% Recurring operating cash flow
Slide 9: Robust growth in 2018: +10%
Robust growth in 2018: +10% Balanced contributions from divisions Non-contributed revenue: +€24.8m 24.8 (vs. €22.5m at 12/31/2017) 22.5 Contributed revenue: €560.5m (vs. €511.9m at 12/31/2017) +9.5% at current exchange rates +9.8% at constant exchange rates HW division: Revenue of €349.7m 560.6 Chan
Slide 10: Strong growth maintained in H2 2018
Strong growth maintained in H2 2018 Change in HW revenue per quarter Change in contributed revenue per quarter (reported data) (reported data) In €m +4.8% In €m +4.5% +8.3% +12.1% +5.0% 2017 +10.7% 84,7 88,8 84,7 87,3 91,5 81,0 82,1 2018 75,5 +9.2% +13.6% Q1 Q2 Q3 Q4 2017 Change in NHW revenue per q
Slide 11: France and International revenue
France: Revenue +9% – Solid level of business confirmed internationally Revenue +15% - dynamic growth Change in contributed revenue International: Revenue of €64.0m per geographic scope in €m i.e. +15.1% (current exchange rates) +18.6% (constant exchange rates) 64,0 Treatment: +63.6% - Volume effe
Slide 12: Growth driven by Treatments and Services
Growth driven by Treatments and Services Storage Solarca Decontamination + Solarca Incineration Volume effects Decontamination Consolidated results at December 31, 2018 12
Slide 13: EBITDA: +10.9% to 19.4% of revenue
EBITDA: +10.9% to 19.4% of revenue (vs. 19.2% at 12/31/2017) EBITDA France: +8.8% to €97.0m, i.e. In €m 19.5% of contributed revenue (vs. 19.6% at 12/31/2017) Operational: +€9.8m - In connection with the activity's growth (+€40.2m) Other: €(2.2)m for structural expenses (support functions, etc.)
Slide 14: COI: +11.3% to 7.9% of revenue
COI: +11.3% to 7.9% of revenue (vs. 7.8% at 12/31/2017) Strong International contribution In €m COI France: +4.3% to €36.2m, i.e. 7.3% of contributed revenue (vs. 7.6% at 12/31/2017) Change in allocations to amortization: +€5.2m in connection with recent investments (permit renewals) and increase
Slide 15: From COI to Group net income
From COI to Group net income Tax dispute: €(1.8)m Performance plan: €(1.6)m Impairment of assets: €(1.7)m Current operating income 39.7 7.8% 44.2 7.9% +11.3% IWE acquisition costs: €(1.0)m Operating income 37.3 7.3% 38.0 6.8% +1.7% Financial income on the sale of Financial income (13.6) (13.4) finan
Slide 16: Keeping industrial investments at 10.2% of contributed revenue
Keeping industrial investments at 10.2% of contributed revenue (vs. 11.3% at 12/31/2017) Breakdown of recognized investments Changes in net investments paid out Storage Incineration and platforms In €m 57.1 Healthcare activities 12% 4,3 53.1 51.4 Energy 29% 4,1 6,2 Chemical purification 21,3 12,3 14
Slide 17: Free cash flow generation
Free cash flow generation Cash conversion ratio at the target of 35% EBITDA 98.1 108.7 Dividends received from affiliates 0.1 0.1 Foreign exchange gain (loss) (0.8) (0.5) Other operating income and expenses (3.3) (4.3) Costs of rehabilitation and maintenance on (10.7) (11.6) treatment sites and disp
Slide 18: Reduced net banking debt
Reduced net banking debt In €m Cash effects Non-cash effects Consolidated results at December 31, 2018 18
Slide 19: Good liquidity situation and 6-year debt maturity
Good liquidity situation and 6-year debt maturity Major decrease in financial leverage Structure of gross financial debt in €m Solid management of net financial debt in €m 412 398 417 31 29 (bank contract definition) 30 49 50 9 9 325,8 175 110 102 13 73 73 318,9 105 317,4 140 133 95 12/31/2017 6/30/
Slide 20: Outlook for 2019
OUTLOOK FOR 2019 Consolidated results at December 31, 2018 20
Slide 21: 2019: International growth dynamic, progress in operating income
2019: International growth dynamic progress in operating income Organic growth Increase in operating income at constant driven by International business scope France: Maintaining a good level of France: Stronger operational efficiency activity, but challenging 2018 baseline and cost reduction policy
Slide 22: 2019: A year of productivity investments in France and International growth
2019: A year of productivity investments in France and International growth Change in recognized industrial investments Change in CAPEX as a % of contributed revenue by type (excl. IFRIC 12) 11,8% 10,7% 11,3% 10,2% In €m 8,8% 8,2% 8,1% 7,3% 57.7 57.4 52.4 15,6 11,8 2015 2016 2017 2018 2019 E 42.9 11
Slide 23: Application of IFRS 16 on January 1, 2019
Application of IFRS 16 on January 1, 2019 The initial application of IFRS 16 in 2019 will mean: on the balance sheet, an increase in gross financial debt of €24-30m on the income statement, an increase in EBITDA of €7-10m with a small effect on COI. Consolidated results at December 31, 2018 23
Slide 24: Recent international developments
RECENT INTERNATIONAL DEVELOPMENTS Consolidated results at December 31, 2018 24
Slide 25: International: Multi-faceted external growth strategy
International: Multi-faceted external growth strategy 2015 Challenging • Peru: Took a minority stake in Kanay Emerging (medical waste treatment) markets with a environmental high potential regulations 2017 for industrial Public opinion • Peru: Acquisition of Taris (hazardous waste storage) developme
Slide 26: Peru: leading operator of hazardous waste
Peru Séché has become the leading operator of hazardous waste In €m at 12/31 2017 2018 Kanay: Taking majority control Revenues 8.2 13.6 2015: Acquired a minority interest EBITDA 0.9 1.8 January 2019: Acquired 7% of the capital, COI 0.6 1.3 for a total stake of 56% Net debt 8.2 9.3 During first
Slide 27: South Africa: Acquisition of Interwaste Holdings Ltd
South Africa Acquisition of Interwaste Holdings Ltd At 12/31 in €m 2017 2018 A leading operator for industrial waste Revenues 68.8 72.8 management in RSA EBITDA 14.2 13.3 A growing company: Family group created in 1989, which has become the second-largest Operating income 7.4 7.1 operator in RSA's
Slide 28: An operator specializing in industrial waste
An operator specializing in industrial waste Storage and facility Regulatory management compliance Technical Logistics support Integrated waste management solutions Commodity Outsourced trading services Source: Interwaste Liquid and solid Materials and waste management energy recovery Consolidated r
Slide 29: Regional reach in southern Africa
Regional reach in southern Africa Mozambique Resources to deliver solutions 38 sorting-grouping-transfer platforms South Africa 3 effluent treatment facilities 2 energy recovery facilities (SRF, WDF) + biogas recovery 2 chemical treatment and polluted soil facilities 9 storage centers, 2 of which ar
Slide 30: Strengthening Interwaste's leadership in RSA and southern Africa
Strengthening Interwaste's leadership in the waste markets of RSA and southern Africa Market growth in volume terms Demographic growth Economic development Macro economic Social changes (urbanization, etc.) changes Engaged public opinion Market growth in value terms Raising barriers to entry Disposa
Slide 31: Conclusion
Joël Séché, Chairman and Chief Executive Officer CONCLUSION Consolidated results at December 31, 2018 31
Slide 32: A Group in a strong position to achieve its profitable growth strategy
A Group in a strong position to achieve its profitable growth strategy in France and Internationally Financial solidity Lasting growth Value added from and abundant Positioning in driven by Technological business lines and liquidity for regulated markets environmental and expertise providing activit
Slide 33: Questions? Answers
Questions? Answers Contact: Manuel Andersen Head of Investor Relations m.andersen@groupe-seche.com
Slide 34: Appendices
APPENDIX 1: DEFINITION OF CONTRIBUTED REVENUE Appendices APPENDIX 2: BREAKDOWN OF CONTRIBUTED REVENUE BY GEOGRAPHIC AREA APPENDIX 3: STRICTER WASTE MANAGEMENT STANDARDS IN SOUTH AFRICA APPENDIX 4: CHANGE IN CONTRIBUTED REVENUE BY DIVISION APPENDIX 5: CHANGE IN CONTRIBUTED REVENUE BY ACTIVITY APPENDI
Slide 35: Appendix 1: Definition of contributed revenue
Appendix 1: Definition of contributed revenue Revenue (reported) 534.5 585.3 IFRIC 12 revenue 3.1 7.8 Compensation 19.4 17.0 Contributed revenue 511.9 560.5 IFRIC 12 revenue: investments made for disposed assets and booked as revenue in accordance with IFRIC 12. Damages: damages and compensation pai
Slide 36: Appendix 2: Revenue by geographic area
Appendix 2: Revenue by geographic area Breakdown of International revenue in contributed revenue Rest of the World Peru 4,4% 1,5% Chile France Autre 0,8% 88,6% 11,4% Mexico 0,6% Argentina 0,1% Germany 0,4% Spain 3,6% Consolidated results at December 31, 2018 36
Slide 37: Appendix 3: More stringent waste management regulations in South Africa
Appendix 3: More stringent waste management regulations in South Africa • Hazardous waste with a • POPs pesticides not listed calorific value of >10MJ/kg under Stockholm (2025) convention • Hazardous waste with >6% • Reclaimable or recyclable TOC (2028) used oil, as well as oil filters • Hazardous w
Slide 38: Appendix 4: Change in contributed revenue by division
Appendix 4: Change in contributed revenue by division NHW division: Contributed revenue of €210.8m (vs. €186.0m at 12/31/2017) i.e. +13.3% (negligible exchange rate effects) 210,8 Treatment: +5.2% - Storage on the right track 186,0 Recovery: +11.1% - Contribution from RCU Changé + La Gabarre (Guadel
Slide 39: Appendix 5: Change in contributed revenue by activity
Appendix 5: Change in contributed revenue by activity Breakdown of contributed revenue by activity Change in Services revenue by division (consolidated data at current exchange rates) (consolidated data at current exchange rates) 186,2 +14.3% 55,0 +39.4% Services 162,8 39,4 Treatment NHW 280,2 +8.6%
Slide 40: Appendix 6: Breakdown of revenue by business
Appendix 6: Breakdown of revenue by business Breakdown of contributed revenue at December 31, 2018 Recovery NHW storage 17% 6% 13% (vs.18%*) HW storage 11% NHW incineration 7% HW incineration 2% Treatment Other HW treatment 50% Global offers 9% 8% (vs. 51%*) Decontamination International services 4%
Slide 41: Appendix 7: Breakdown of contributed revenue by client
Appendix 7: Breakdown of contributed revenue by client Breakdown of contributed revenue in 2018 Breakdown of contributed revenue in 2018 by division and by client by sector of activity NHW revenue: 38% Other Industries: 53% Local authorities: 21% 23% Chemicals 1% 3% 3% Energy - comm. 4% Healthcare -
Slide 42: Appendix 8: Change in EBITDA by scope
Appendix 8: Change in EBITDA by scope At December 31 2017 2018 In €m Consolidated France Int’l. Consolidated France Int’l. Contributed revenue 511.9 456.3 55.6 560.5 496.5 64.0 EBITDA 98.1 89.4 8.7 108.7 97.0 11.7 As a % of contributed revenue 19.2% 19.6% 15.7% 19.4% 19.5% 18.3% EBITDA in France up
Slide 43: Appendix 9: Change in COI by scope
Appendix 9: Change in COI by scope At December 31 2017 2018 In €m Consolidated France Int’l. Consolidated France Int’l. Contributed revenue 511.9 456.3 55.6 560.5 496.5 64.0 COI 39.7 34.7 5.0 44.2 36.2 8.0 As a % of contributed revenue 7.8% 7.4% 9.0% 7.9% 7.3% 12.5% COI in France up 4.3% to €36.2m (
Slide 44: Appendix 10: Change in Operating Income
Appendix 10: Change in Operating Income At December 31 2017 2018 Gross change €m % of €m % of contributed contributed revenue revenue Contributed revenue 511.9 560.5 +9.5% EBITDA 98.1 19.2% 108.7 19.4% +10.9% COI 39.7 7.8% 44.2 7.9% +11.3% Operating income 37.3 7.3% 38.0 6.8% +1.7% Operating income
Slide 45: Appendix 11: Changes in Financial Income
Appendix 11: Changes in Financial Income At December 31 2017 2018 Gross financial borrowing costs (12.4) (14.0) Income from cash and cash equivalents 0.1 0.1 Other financial income and expenses (1.3) 0.6 Financial income (13.6) (13.4) Recognition of financial income on the sale of financial fixed as
Slide 46: Appendix 12: Industrial investments under control
Appendix 12: Industrial investments (excl. IFRIC 12) under control In €m Breakdown of recognized industrial investments 65.2 60.8 7,8 3,1 Non-recurring Capex 18,7 Treatment: €13.7m 20,7 Recovery: €2.2m Services: €2.8m Recurring Capex: 37,0 38,7 6.9% of contributed revenue (7.2% at 12/31/2017) 12/31/
Slide 47: Appendix 13: Shareholder structure and voting rights
Appendix 13: Shareholder structure and voting rights Breakdown of shares at 12/31/2018 Breakdown of voting rights at 12/31/2018 0,0% 0,0% 24,5% 29,8% 50,0% 7,9% 59,1% 10,0% 7,2% 9,0% 0,6% 0,7% 0,5% 0,7% Total: 7,857,732 shares Total: 9,917,876 voting rights J. Séché J. Séché Séché Group (family hold
Slide 48: Disclaimer
DISCLAIMER THIS DOCUMENT MAY CONTAIN INFORMATION OF A PROVISIONAL NATURE. THIS INFORMATION REPRESENTS EITHER TRENDS OR TARGETS AT THE DATE OF THIS DOCUMENT'S CREATION AND MAY NOT BE CONSIDERED AS RESULTS FORECASTS OR AS ANY OTHER TYPE OF PERFORMANCE INDICATORS. THIS INFORMATION IS BY NATURE SUBJECT