Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Q1 2017 Earnings Presentation
26 slides from Veolia Environnement Sa's earnings presentation, May 4, 2017
Slide 1: Key figures for the period ending March 31, 2017
Key figures for the period ending March 31, 2017 May, 4th 2017
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: 1Q2017 Highlights
1Q2017 Highlights Sales rebound confirmed : +4.5%1 o Good growth in Europe excluding France o Strong growth in the Rest of the world o Fast paced commercial activity in Q1 Continued profit growth1: EBITDA up 1% Sales growth Cost cutting Low tariff indexations Transitory headwinds o Current EBIT up 6
Slide 4: Robust cost savings: more than €60M achieved as of March 31, 2017
Robust cost savings: more than €60M achieved as of March 31, 2017 2016-2018 Impact on 2017 2016 1Q 2016 1Q 2017 Revised EBITDA target Target Cost savings 245 58 63 250 800 5% 30% France 23% 30% 14% Purchasing Europe excluding France Rest of the Operations World Global 29% businesses SG&A HQ 22% 47%
Slide 5: 1Q2017 Main contract wins Industrial Market
1Q2017 Main contract wins Industrial Market Q1 Q1 Q1 Q1 KNAUF, United Kingdom Munksjo, Spain EDF/SOCODEI, France Magnox, UK Construction and operation of a Wastewater treatment plant Improve performance of Design, build & installation of glass recycling facility expansion at Tolosa paper mill contam
Slide 6: 1Q2017 Main contract wins Municipal Market
1Q2017 Main contract wins Municipal Market Q1 Gloucestershire County, UK Q1 South London, UK Q1 Cambridge, UK D&B and O&M of a 520kWe Waste collection, recycling & Electricity & heat provided by new biogas-fired (from food waste) street cleaning CHP plant at Churchill College CHP energy plant Durati
Slide 7: 1Q2017 Results Highlights
1Q2017 Results Highlights Sales rebound confirmed Strong International EBITDA growth offset by transitory headwinds 1Q 2016 In €M represented (1) 1Q 2017 Var. yoy ∆ constant FX 1Q 2016 IFRIC 12 & IFRS5 Revenue 6,089 5,995 6,270 +4.6% +4.5% EBITDA 840 855 863 +0.9% +0.9% EBITDA margin 13.8% 14.3% 13.
Slide 8: Quarterly Revenue trend: Continued rebound, fueled by growth outside France
Quarterly Revenue trend: Continued rebound, fueled by growth outside France 2016 2017 ∆ at constant FX 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter France +0.2% -0.7% -1.3% -2.1% -1.5% Europe excluding France -0.9% +0.3% -0.6% +1.5% +7.2% Rest of the World -2.4% +1.9% +6.3% +9.1% +11.
Slide 9: Revenue rebound: up 4.5% at constant FX to €6,270M (1/2)
Revenue rebound: up 4.5% at constant FX to €6,270M (1/2) REVENUE IN €M Slight decline in France revenue, -1.5%, and +0.6% at constant scope (Bartin divestiture in Q4, 2016): Sluggish Water offset by improvement in Waste 6,270 Water: Rev. down 2.6%: volumes -0.4%, price indexation -0.3%, negative com
Slide 10: Revenue rebound: up 4.5% at constant FX to €6,270M (2/2)
Revenue rebound: up 4.5% at constant FX to €6,270M (2/2) Scope : Mostly 2016 developments partially offset by Bartin divestiture Construction: -€74M vs. -€117M in 1Q, 2016, with softer decline of VWT & Sade and end of the negative impact of completed PFI in the UK Favorable Energy & Recycled paper p
Slide 11: Pick up in Waste: +5.6% Revenue growth at constant scope and FX
Pick up in Waste : +5.6% Revenue growth at constant scope and FX 1Q2017 Raw materials volumes and prices +1.8% Volumes / activity levels +1.2% Service price increases +1.3% Other (including construction revenue) +1.3% Currency effect -1.1% Scope +2.5% Variation at constant FX and scope +5.6% o Franc
Slide 12: EBITDA: continued significant benefits from cost savings, partially offset by transitory headwinds
EBITDA: continued significant benefits from cost savings, partially offset by transitory headwinds Commerce & Volumes : favorable weather effect in Europe, good hazardous waste performance, good water and energy volumes in Central & Eastern Europe and strong activity in Asia, compensated the continu
Slide 13: Current EBIT: +6.1% at constant FX
Current EBIT: +6.1% at constant FX 1Q2016 represented ∆ vs. 1Q2016 ∆ at In €M IFRIC 12 & 1Q2017 1Q2016 constant FX IFRS 5 represented EBITDA 840 855 863 +0.9% +0.9% Renewal expenses -67 -67 -67 -379 -401 -416 Including principal repayment of Depreciation & Amortization(1) OFAs for €37M vs. €44M in 1
Slide 14: Current net income of €155M, up 3.7% at constant FX
Current net income of €155M, up 3.7% at constant FX In €M +3.7%* 148 155 3 +7.0%* 145 156 -1 1Q 2016 represented 1Q 2017 *at constant FX Current Net Income excl. Capital gains Net Cap. Gains Cost of financing: -€103M vs. -€105M in 1Q2016 Other financial charges include -€23M of IFRIC12 concession ch
Slide 15: Continued solid FCF generation: +€345M excluding seasonality of WCR
Continued solid FCF generation : +€345M excluding seasonality of WCR 246 274 271 33 29 o Continued capex discipline 33 Discretionary capex: few projects in Q1 (China, Australia, Central Europe) 213 241 242 1Q2016 1Q2016 repr. 1Q2017 Discretionary growth capex Maintenance and contractual capex o Net
Slide 16: Medium-term outlook
Medium-term outlook(1) 2017: A transition year Resumption of revenue growth Stable EBITDA, or moderate EBITDA growth Increased efforts to reduce costs: more than €250M in cost savings 2018: Continuation of revenue growth Resumption of more sustained EBITDA growth More than €300M in cost savings 2019
Slide 17: Appendices
@veouia Appendices
Slide 18: Appendix 1: Main represented figures for the quarter ended March 31, 2016
Appendix 1 : Main represented figures(1) for the quarter ended March 31, 2016 Quarter ended (2) (5) Quarter ended IFRIC 12 IFRS 5 In €M March 31, 2016 March 31, 2016 Adjustment Adjustment published Represented Revenue 6,088.8 0,0 (93,7) 5 995,1 EBITDA (a) 840.3 50.5 (35,5) 855,4 (3) Current EBIT 413
Slide 19: Appendix 1: IFRIC 12 – Service concession agreements
Appendix 1: IFRIC 12 – Service concession agreements o Under concession contracts with local authorities, infrastructure is accounted, as appropriate, as an intangible asset, a financial receivable, or a combination of the two. Veolia may have a payment obligation vis-à-vis the Grantor to utilize th
Slide 20: Appendix 2: Currency movements
Appendix 2: Currency movements Main currencies 1 € = xxx foreign currency ∆ 1Q2017 1Q2016 1Q2017 vs. 1Q2016 US Dollar Average rate 1.103 1.065 +3.4% Closing rate 1.139 1.069 +6.1% UK pound sterling Average rate 0.770 0.860 -11.7% Closing rate 0.792 0.856 -8.1% Australian dollar Average rate 1.528 1.
Slide 21: Appendix 3: Quarterly revenue by segment
Appendix 3: Quarterly revenue by segment 1st quarter 2016 2nd quarter 2016 3rd quarter 2016 In €M ∆ at ∆ at ∆ at 2015 2016 constant 2015 2016 constant 2015 2016 constant scope & FX scope & FX scope & FX France 1,320 1,323 -0.5% 1,374 1,365 -1.2% 1,396 1,377 -1.6% Europe excl. France 2,312 2,265 -0.7
Slide 22: Appendix 4: Quarterly revenue by business
Appendix 4: Quarterly revenue by business 1st quarter 2016 2nd quarter 2016 3rd quarter 2016 In €M ∆ at ∆ at ∆ at 2015 2016 constant 2015 2016 constant 2015 2016 constant scope & FX* scope & FX* scope & FX* Water 2,704 2,635 -2.1% 2,765 2,702 -0.3% 2,881 2,751 -5.7% Waste 2,079 2,014 +1.2% 2,232 2,1
Slide 23: Appendix 5: Revenue rebound: Revenue by business
Appendix 5: Revenue rebound: up 4.5% at constant FX to €6,270M Revenue by business REVENUE IN €M Revenue up 4.5% at constant FX • Water: -0.9% at constant FX , but +2.5% excluding Construction and energy prices 6,270 Volumes/commerce effect: +1.9% 5,995 o Good volumes in Central and Eastern Europe p
Slide 24: Appendix 6: Quarterly waste volumes
Appendix 6: Quarterly waste volumes Quarterly revenue growth at constant scope & FX Y-Y Quarterly Volume Trends VEOLIA KEY FIGURES MARCH 2017 24
Slide 25: 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, UK (excluding PFI), Germany, North America (excluding US Solid Waste and WTE) Sources January and February 2017: OECD for all countries March 2017
Slide 26: Investor Relations Contact Information
Investor Relations Contact Information Analyst & Investor Relations Ronald Wasylec Senior Vice President, Investor Relations Telephone : +33 1 85 57 84 76 Media Relations e-mail : ronald.wasylec@veolia.com Laurent Obadia Ariane de Lamaze Telephone : +33 1 85 57 89 43 Vice President, Investor Relatio