Veolia Environnement Sa · EURONEXT:VIE

Veolia Environnement Sa — H1 2022 Earnings Presentation

52 slides from Veolia Environnement Sa's earnings presentation, 2022

  1. Slide 1: Résultats semestriels 2022

    Résultats semestriels 2022 Estelle Brachlianoff CEO Claude Laruelle CFO

  2. Slide 2: Disclaimer

    DISCLAIMER Veolia Environnement est une société cotée à Euronext Paris et le présent document contient des «déclarations prospectives» (forward-looking statements) au sens des dispositions du U.S. Private Securities Litigation Reform Act de 1995. Ces déclarations ne sont pas des garanties quant à la

  3. Slide 3: Sommaire

    SOMMAIRE Veolia: un modèle Les leviers de création 1 De très bons résultats 2 économique solide, 3 semestriels de valeur liées à résilient et agile l’acquisition de Suez pleinement confirmés Performance 4 5 Annexes opérationnelle et financière détaillée du S1 2022 H1 2022 3

  4. Slide 4: Faits marquants

    Faits marquants 1. De très bons résultats semestriels 2. Un modèle économique solide, résilient et agile 3. L’environnement actuel renforce la pertinence de notre modèle économique 4. Confirmation des leviers de création de valeur liés à l’acquisition de Suez H1 2022 4

  5. Slide 5: De très bons résultats semestriels 2022 (1/2)

    1- DE TRES BONS RESULTATS SEMESTRIELS 2022 (1/2) PORTES PAR LES PRIX, LA DYNAMIQUE COMMERCIALE ET DE BONS VOLUMES ❑ Chiffre d’affaires de €20 196M, en croissance de 12,9%(1) par rapport au 30 juin 2021 combiné, et +6,7% corrigé de l’effet de la hausse des prix des énergies ✔ Bonne performance de l’E

  6. Slide 6: De très bons résultats semestriels 2022 (2/2)

    1- DE TRES BONS RESULTATS SEMESTRIELS 2022 (2/2) PORTES PAR LES PRIX, LA DYNAMIQUE COMMERCIALE ET DE BONS VOLUMES 12,9% DE CROISSANCE ORGANIQUE DU CHIFFRE D’AFFAIRES PAR RAPPORT 30 JUIN 2021 +6,7% corrigée de l’effet de la hausse des prix des énergies ❑ Eau municipale (chiffre d’affaires de €4 632M)

  7. Slide 7: Un modèle économique solide, résilient et agile

    2- UN MODELE ECONOMIQUE SOLIDE, RESILIENT ET AGILE PROTEGER ET CONTROLER : UNE PRESENCE RENFORCEE DANS LES ACTIVITES D’EAU MUNICIPALE, NOTAMMENT L’EAU REGULEE AUX ETATS-UNIS Confirmation d’un objectif de croissance organique de l’EBITDA 2022 entre +4 et +6% 85% du chiffre d’affaires de Veolia n’est

  8. Slide 8: Activités largement protégées contre l'inflation

    2- UN MODELE ECONOMIQUE SOLIDE, RESILIENT ET AGILE PROTEGER ET CONTROLER: DES ACTIVITES LARGEMENT PROTEGEES CONTRE L’INFLATION Inflation globalement neutre voire légèrement positive pour Veolia ❑ Indexation directe d’environ 70% de chiffre d’affaires : ✔ Eau France : indexation des contrats révisée

  9. Slide 9: Anticiper et s'adapter: une efficacité renforcée

    2- UN MODELE ECONOMIQUE SOLIDE, RESILIENT ET AGILE ANTICIPER ET S’ADAPTER : UNE EFFICACITE RENFORCEE ❑ Stricte discipline sur les coûts et renforcement de l’efficacité opérationnelle ✔ €178M d’économies de coûts réalisées au premier semestre 2022, en ligne avec l’objectif annuel de €350M ✔ €52M de s

  10. Slide 10: Déploiement du plan ReSource

    2- UN MODELE ECONOMIQUE SOLIDE, RESILIENT ET AGILE ANTICIPER ET ADAPTER: DEPLOIEMENT DU PLAN ReSOURCE ❑ Une politique de couverture sécurisant nos achats et ventes d’énergie ✔ Services essentiels à des clients prioritaires : services de chauffage municipaux aux clients résidentiels ✔ Pour 2022: 95%

  11. Slide 11: Pertinence de notre modèle économique renforcée

    3- PERTINENCE DE NOTRE MODELE ECONOMIQUE RENFORCEE ❑ L’organisation et les activités de Veolia en font un leader multi-local de la transition écologique ✔ Des services essentiels qui façonnent un environnement durable pour les communautés locales ✔ Chaînes d’approvisionnement locales ❑ Fournir des s

  12. Slide 12: Principaux projets innovants au 30 juin 2022

    3- PERTINENCE DE NOTRE MODELE ECONOMIQUE RENFORCEE PRINCIPAUX PROJETS INNOVANTS AU 30 JUIN 2022 Des technologies de l’eau afin d’améliorer la qualité Réutilisation de l’eau afin de se prémunir contre la des eaux traitées dans l’industrie pétrolière et gazière rareté de l’eau pour nos clients industr

  13. Slide 13: Leviers de création de valeur liés à l'acquisition de Suez: croissance et synergies

    3- CONFIRMATION DES LEVIERS DE CRÉATION DE VALEUR LIÉS À L’ACQUISITION DE SUEZ : CROISSANCE ET SYNERGIES ❑ Un choix stratégique dont la pertinence est confirmée par le contexte actuel ✔ Une présence renforcée aux Etats-Unis o En particulier sur le marché de l’eau régulée aux Etats-Unis:rendements él

  14. Slide 14: Création de valeur immédiate provenant des cessions antitrust

    3- CONFIRMATION DES LEVIERS DE CRÉATION DE VALEUR LIÉS À L’ACQUISITION DE SUEZ : CREATION DE VALEUR IMMEDIATE PROVENANT DES CESSIONS ANTITRUST ❑ Forte création de valeur provenant des cessions antitrust hautement valorisées ✔ Activités de déchets de Suez Australie cédées à Cleanaway(1) et Remondis ✔

  15. Slide 15: Perspectives 2022 pleinement confirmées

    PERSPECTIVES 2022 PLEINEMENT CONFIRMEES(1) RESULTAT NET COURANT EN HAUSSE DE PLUS DE 20% A ENVIRON 1,1Md€ ❑ Solide croissance organique du chiffre d’affaires ❑ EBITDA : croissance organique entre +4% and +6% par rapport au combiné 2021: o Economies de coûts > 350M€ o 100M€ de synergies confirmées ❑

  16. Slide 16: H1 2022 Financial & Operational Performance

    H1 2022 Financial & Operational Performance Claude Laruelle, CFO

  17. Slide 17: H1 2022 Key Figures

    H1, 2022 KEY FIGURES VERY STRONG H1 RESULTS H1 2021 Var. vs. H1 2021 Var. vs. H1 2021 H1 2021 H1 2022 reported at In €M Reported combined at constant combined (1) combined(1) constant FX (1) (standalone) scope and FX (1) Revenue 13 645 17 774 20 196 +46.2% +12.9% EBITDA 2 081 2 792 2 953 +40.4% +6.1

  18. Slide 18: Continued Growth in Q2

    CONTINUED GROWTH IN Q2 Var. Q1 2022 vs. Q1 Var. Q2 2022 vs. Q2 Var. H1 2022 vs. H1 Revenue growth at constant scope and FX 2021 combined 2021 combined 2021 combined France & Hazardous Waste Europe +5.4% +2.6% +3.9% Rest of Europe +26.8% +20.3% +23.7% Rest of the World +7.8% +7.8% +7.8% Water Technol

  19. Slide 19: Organic Revenue Growth of +12.9% vs. H1 2021

    ORGANIC REVENUE GROWTH OF +12.9% vs. H1 2021 Underlying organic revenue growth of +6.7% excluding energy prices  FOREX: +€408M (UK, US, China)  SCOPE: -€286M. At Veolia, Osis offset by Scandinavian assets and for Suez, 20 196 divestiture of Australian assets and 242 505 EU antitrust 17 774 1 107 9

  20. Slide 20: Organic EBITDA Growth of +6.1% vs. H1 2021

    ORGANIC EBITDA GROWTH OF +6.1% vs. H1 2021 At the top of the guidance range of +4% to +6%  FOREX: +€52M (UK, US, China) 2 953  SCOPE: -€61M. At Veolia, Osis 33 offset by Scandinavian assets and for Suez, divestiture of Australian 2 792 230 assets and EU antitrust 52 61 39 39 70 97  COMMERCE/VOLUM

  21. Slide 21: Waste Revenue of €7,845M, Organic Growth of +9.9%

    WASTE REVENUE OF €7 845M, ORGANIC GROWTH OF +9.9% Good volumes and pricing, continued increase in recyclate prices  Revenue of €7 845M vs. €7 175M, +9.9% at constant scope and forex o France : revenue of €1 479M, up 6%(1) due to pricing and recyclates  Price increases for both C&I clients and muni

  22. Slide 22: France and Hazardous Waste Europe: Strong 1st Half

    FRANCE AND HAZARDOUS WASTE EUROPE : STRONG 1ST HALF H1 2021 H1 2021 H1 2022  vs. H1 2021 combined at In €M reported combined combined constant scope and FX Revenue of which 4 316 4 577 4 754 +3.9% Water France 1 449 1 449 1 429 -0.8% Waste France 1 395 1 395 1 479 +6.0% Hazardous Waste Europe 709 9

  23. Slide 23: Rest of Europe: Growth Enhanced by Energy Prices

    REST OF EUROPE : GROWTH ENHANCED BY ENERGY PRICES H1 2021 H1 2021 H1 2022  vs. H1 2021 combined In €M reported combined combined at constant scope and FX Revenue of which 5 278 6 958 8 505 +23.7% Central and Eastern Europe 3 052 3 276 4 301 +31.4% Northern Europe 1 589 2 322 2 511 +12.3% Southern E

  24. Slide 24: Rest of the World: Good Start to the Year

    REST OF THE WORLD : GOOD START TO THE YEAR H1 2021 H1 2021 H1 2022  vs. H1 2021 combined In €M reported combined combined at constant scope and FX Revenue of which 3 310 4 767 5 256 +7.8% Asia - Pacific 1 549 2 152 2 217 +4.4% o/w Asia 1 013 1 147 1 250 +3.3% o/w Pacific 536 1 006 966 +5.7% Latin A

  25. Slide 25: Water Technologies: Continued Revenue Growth in H1

    WATER TECHNOLOGIES : CONTINUED REVENUE GROWTH IN H1 H1 2021 H1 2021 H1 2022  vs. H1 2021 combined at In €M reported combined combined constant scope and FX Water Technologies 739 1 869 2 075 +5.3% o/w VWT 739 739 740 -2.3% o/w WTS - 1 130 1 334 +10.3% EBITDA 44 213 212 -8.2% EBITDA margin 6.0% 11.4

  26. Slide 26: Current EBIT of €1,475M Up 20.2%

    CURRENT EBIT OF €1 475M UP 20.2% AT CONSTANT SCOPE AND FOREX H1 2021 H1 2021 H1 2022 Var. vs. H1 2021 In €M reported combined combined combined at constant scope and FX EBITDA 2 081 2 792 2 953 +6.1% Renewal expenses -143 -140 -147 Amortization and provisions (including principal -1 121 -1 488 -1 45

  27. Slide 27: Current Net Income of €528M

    CURRENT NET INCOME OF €528M UP +33.2% AT CONSTANT FX VS. REPORTED H1 2021 (EXCLUDING SUEZ DIVIDEND AND FINANCIAL CAPITAL GAINS) H1 2021 reported H1 2021 H1 2022 Var. vs. H1 2021 In €M Veolia Standalone combined combined reported at cst FX Current EBIT(1) 901 1 267 1 475 +63.0% Cost of net financial

  28. Slide 28: Net Income Group Share of €236M

    NET INCOME GROUP SHARE OF €236M UP +30% AT CONSTANT FX VS. REPORTED H1 2021 (EXCLUDING SUEZ DIVIDEND) Non current items mostly due to Suez acquisition and integration costs and Russia H1 2021 H1 2022 Var. vs. H1 2021 reported In €M reported combined at constant FX 394(1) 528 +33.1% Current net incom

  29. Slide 29: Net Financial Debt Impacted by Suez Operation and Seasonality

    NET FINANCIAL DEBT IMPACTED BY SUEZ OPERATION AND SEASONALITY Leverage ratio target of ~3 times confirmed before Suez UK divestment  Net financial debt of €22.4bn at 30 June 2022 impacted by Suez operation and seasonality  Controlled net industrial Capex : €1 310M vs. €1 277M in H1 2021 combined o

  30. Slide 30: Evolution of Net Financial Debt

    EVOLUTION OF NET FINANCIAL DEBT In €M 500 10 455 61 953 464 22 353 821 145 390 268 2 953 1 310 147 382 9 532 H1 2022 30

  31. Slide 31: 2022 Group Guidance Fully Confirmed

    2022 GROUP GUIDANCE FULLY CONFIRMED(1) CURRENT NET INCOME GROWTH OF MORE THAN 20% TO AROUND €1.1bn(2)  Solid organic revenue growth  EBITDA : organic growth between +4% and +6% vs. combined 2021 driven by : o >€350M of efficiency gains o Confirmed €100M of synergies  Current net income around €1.

  32. Slide 32: Appendices

    Appendices

  33. Slide 33: Appendix 1: Main Represented Figures H1 2021 (1/2)

    APPENDIX 1: MAIN REPRESENTED FIGURES FOR THE SIX MONTHS-ENDED JUNE 30, 2021 (1/2)  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

  34. Slide 34: Appendix 1: Main Represented Figures H1 2021 (2/2)

    APPENDIX 1: MAIN REPRESENTED FIGURES FOR THE SIX MONTHS-ENDED JUNE 30, 2021 (2/2)  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

  35. Slide 35: Appendix 2: Currency Movements

    APPENDIX 2 : CURRENCY MOVEMENTS For 1€ H1 2021 H1 2022 Δ 2022 vs. 2021 US dollar Average rate 1.205 1.094 9.2% Closing rate 1.188 1.039 12.6% UK pound sterling Average rate 0.868 0.842 3.0% Closing rate 0.858 0.858 0.0% Australian dollar Average rate 1.563 1.520 2.7% Closing rate 1.585 1.510 4.8% Ch

  36. Slide 36: Appendix 3: Quarterly Revenue by Segment

    APPENDIX 3 : QUARTERLY REVENUE BY SEGMENT 1st quarter 2021 1st quarter 2022 Var organic In €M Veolia New Veolia Combined Veolia New Veolia Combined Combined France Hazardous Waste Europe 2 033 117 2 150 2 217 81 2 298 +5.4% Rest of Europe 2 785 802 3 587 3 629 893 4 523 +26.8% Rest of the World 1 64

  37. Slide 37: Appendix 4: Quarterly Revenue by Business

    APPENDIX 4 : QUARTERLY REVENUE BY BUSINESS 1st quarter 2021 1st quarter 2022 Variation organic In €M Veolia New Veolia Combined Veolia New Veolia Combined Combined Water 1 963 758 2 721 2 100 798 2 898 +5.0% Water Technologies 540 545 1 085 574 607 1 181 +6.1% Waste 2 515 883 3 398 2 901 885 3 786 +

  38. Slide 38: Appendix 5: Water Revenue

    APPENDIX 5 WATER REVENUE (INCLUDING WATER TECHNOLOGIES) OF €8 556M, AN ORGANIC GROWTH OF +5.9%  WATER : Revenue of €8 556M vs. €7 873M, +5.9% at constant scope and FX Variation vs. H1 2021 combined H1 2022 o France : Water revenue -0.8%. Volumes +0.3% and higher indexation Volumes +0.5% (+3.4%) par

  39. Slide 39: Appendix 6: Energy Revenue

    APPENDIX 6 ENERGY REVENUE OF €4 194M, AN ORGANIC GROWTH OF +35.9%, DRIVEN BY PRICES  ENERGY : Revenue of €4 194M vs. €3 126M, +35.9% at Variation vs. H1 2021 combined H1 2022 constant scope and FX Volumes / commerce +7.1% o Central Europe: revenue of € 2 225M up 50.1% due to surge in energy prices

  40. Slide 40: Appendix 7: Waste Breakdown of Revenue by Activity

    APPENDIX 7 WASTE – BREAKDOWN OF REVENUE BY ACTIVITY 2022 H1 Revenue : €7 845M 2021 H1 (PF) Revenue : €7 175M 7% 12% 8% 13% 25% 18% 24% 18% 8% 8% 22% 20% 8% 9% Municipal collection C&I collection Sorting, Recycling Municipal collection C&I collection Sorting, Recycling Incineration Landfill Hazardous

  41. Slide 41: Appendix 8: Quarterly Waste Revenue and Volumes

    APPENDIX 8 QUARTERLY WASTE REVENUE AND VOLUMES Quarterly revenue growth at constant scope & FX 25,8% 14,4% +13,8% 11,5% 9,9% 5,6% 2,1% 4,9% 6,1% 4,3% 6,0% 4,1% 5,4% 4,9% 4,2% 4,9% 1,6% 4,0% 0,9% 0,2% -14,6%-3,4% Y-Y Quarterly volume trends 14,9% 3,2% +4,8% 1,7%0,9% 1,2% 0,0% 3,1% 3,0% 3,0% 4,9% 4,0%

  42. Slide 42: Appendix 9: Waste Revenue vs. Industrial Production

    APPENDIX 9 WASTE – REVENUE VS. INDUSTRIAL PRODUCTION Industrial Production and Waste Organic Growth 30% 20% 8,5% 10% 1,6% 0% -10% -20% -30% Groupe Croissance CA Propreté Indice Production Industrielle Weighted average industrial production indices for 4 key countries including SARP/SARPI: France, U.

  43. Slide 43: Appendix 10: Evolution of Paper & Cardboard Prices

    APPENDIX 10 WASTE – EVOLUTION OF PAPER & CARDBOARD PRICES 250 200 150 100 50 0 Cardboards (ref. 1.05) Paper (Ref. 1.11) H1 2022 43

  44. Slide 44: Appendix 11: Net Financing Rate

    APPENDIX 11 H1 2021 H1 2022 NET FINANCING RATE In €M Veolia combined standalone Average gross debt (1) 18 259 26 627 o Cost of net financial debt of €320M : impact of scope effect from Suez acquisition Gross cost of borrowing 1.65% 2.51% o In addition, a non recurring income (+€20M) generated by the

  45. Slide 45: Appendix 12: Debt Management

    APPENDIX 12 DEBT MANAGEMENT ✔ Repayment in March 2022 of €650M bearing a coupon of 0.672%. ✔ Repayment in May 2022 of €645M bearing a coupon of 5.125%. ✔ Repayment in June 2022 of €613M bearing a coupon of 4.125% coming from Suez acquisition. ✔ Repayment of the Suez hybrid bond in March 2022 (€500M

  46. Slide 46: Appendix 13: Combined Debt Profile

    APPENDIX 13 COMBINED DEBT PROFILE (AT JUNE 30, 2022) RATING • Moody’s : P-2/ Baa1 Cumulated bond repayment schedule au June 30, 2022 • stable outlook €3bn • Standard & Poor’s : A-2 / BBB stable outlook €2bn €1bn €0bn 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 203

  47. Slide 47: Appendix 14: Net Liquidity

    APPENDIX 14 NET LIQUIDITY June 2022 December 2021 Syndicated credit lines 3000,0 3000,0 Bilateral credit lines 1000,0 1000,0 Lines of credit 10,1 22,9 Cash and cash equivalents 4 235,1 10 333,8 Total Veolia 8 245,2 14 356,7 Subsidiaries Syndicated credit lines 2 500,0 - Cash and cash equivalents(1)

  48. Slide 48: Appendix 15: Net Industrial Investments by Segment

    APPENDIX 15 NET INDUSTRIAL INVESTMENTS BY SEGMENT Maintenance Contractual Discretionary Of which new TOTAL Gross Industrial TOTAL Net June 2021 Veolia standalone (in €M) including IFRS 16 Capex Growth Capex OFAs CAPEX Divestments CAPEX France and Hazardous Waste Europe 166 93 22 19 281 37 244 Europe

  49. Slide 49: Appendix 16: Statement of Cash Flows

    APPENDIX 16: STATEMENT OF CASH FLOWS In €M June 2021 June 2022 published EBITDA(1) 2 081 2 953 Net industrial investments -834 -1 310 WCR variation -381 -821 Dividends received 30 61 (1) Including principal payments on Renewal expenses -143 -147 operating financial assets Restructuring and other non

  50. Slide 50: Appendix 17: Consolidated Statement of Financial Position

    APPENDIX 17 CONSOLIDATED STATEMENT OF FINANCIAL POSITION June 2022 December 2021 Intangible Assets 21 452 11 236 Property, Plant & Equipment 15 898 8 702 Other non-current assets 6 866 8 504 Operating financial assets (current and non-current) 1 456 1 320 Cash and cash equivalents 7 175 10 519 Other

  51. Slide 51: Appendix 18: Continued Improvement of Our ESG Performance

    APPENDIX 18 CONTINUED IMPROVEMENT OF OUR ESG PERFORMANCE Highlights on 4 objectives (other than economic and financial) Clients Planet Employees Society Customer and Combating climate Employee commitment Access to essential services Objective consumer satisfaction change (water and sanitation) Progr

  52. Slide 52: 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

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