Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Veolia — Q1 2024 Earnings Presentation
43 slides from Veolia Environnement Sa's earnings presentation, May 14, 2024
Slide 1: Q1, 2024 Results
Q1, 2024 RESULTS May 14, 2024 Estelle Brachlianoff, CEO Claude Laruelle, CFO
Slide 2: Agenda
AGENDA 1. Q1, 2024 highlights 2. Detailed Q1, 2024 financial performance 3. Appendices
Slide 3: Estelle Brachlianoff, CEO
Estelle Brachlianoff CEO
Slide 4: Strong Q1 results fully confirm our 2024 guidance
Strong Q1 results fully confirm our 2024 guidance Revenue €11 556M Fully confirmed 2024 +3.9%(2) excl. energy prices guidance EBITDA ➔ Solid organic revenue growth(1) €1 624M ➔ +5% to +6% EBITDA organic growth (2) +5.7%(2) ➔ Current Net income > €1.5bn(3) Current EBIT ➔ Leverage ratio < 3.0x (3) €84
Slide 5: Overperformance in Water and Waste, organic growth above 5%
Overperformance in Water and Waste, organic growth above 5% Energy growth lowered by energy prices, essentially pass through for Veolia Water Revenue of € 4.3bn + 6.5%(1) Revenue €11 556M Waste Revenue €3.7bn +5.5%(1) +3.9%(1) excl. energy prices Energy revenue €3.5bn stable excl. energy prices(1) O
Slide 6: Veolia value creation: profitable long term growth
Veolia value creation : profitable long term growth Solid Fundamentals, Selective Growth & Performance Improvement Green Up 24-27 Growth Performance Capital Allocation value creation objectives > Strongholds > Operational > Capex in new high value Water operations, Excellence creating projects: new
Slide 7: Growth
Growth
Slide 8: Strong revenue growth in Q1
Strong revenue growth in Q1 Boosted by Water technologies & sustained strong foundations Strongholds activities (Water operations, District heating & cooling networks, Solid waste) Very solid performance : continued contract indexation and pricing strategy, high contract renewal, despite negative we
Slide 9: "Strongholds" activities in Q1 performed well
“Strongholds” activities in Q1 performed well Excellent contract renewal, good commercial momentum & continued pricing and indexation New SEDIF contract signed in Q1 Water operations €4bn water contract renewed with The Greater €3.2bn revenues in Q1 2024 Paris Water Authority - 12 years District Hea
Slide 10: Example with SEDIF contract renewal
Example with SEDIF contract renewal ● €4bn water contract with the Greater Paris Water Authority (SEDIF) ○ 4 million residents in 132 municipalities ○ 12 years from 2025-2036 ● Innovation at the heart ○ 150 innovations including 10 worldwide first ○ micropollutants treated (PFAS, pesticide residues
Slide 11: Boosters activities delivered enhanced growth in Q1 and beyond
Boosters activities delivered enhanced growth in Q1 and beyond Q1 fueled by Water Technologies Record bookings in Q1 of €1 757M, up Water Technologies €1.2bn revenues in Q1 2024 +50%, including Hassyan €296M desalination facility in Dubai Acquisition of Uniper flexibility assets in Hungary ● 430 MW
Slide 12: Example with Water technologies record bookings
Example with Water technologies record bookings Record bookings of €1 757M, up +50%(2) vs. Q1, 2023, including : ➔ Hassyan : €296M desalination facility in Dubai ○ Unprecedented energy efficient (2.9 kWh/m3) thanks to unique Veolia innovation in reverse Deep dive : Water osmosis Technologies and ○ W
Slide 13: Performance
Performance
Slide 14: Efficiency plan on target, and Synergies ahead of target
Efficiency plan on target, and Synergies ahead of target Cost Synergies Efficiency €88M delivered in Q1 2024 €42M in Q1 2024 €357M accumulated since merger with Suez, in line with the €350M annual objective ahead of the year’s target of €400M 13% 26% 27% 18% 69% 47% Operational efficiency Procuremen
Slide 15: Capital Allocation
Capital Allocation
Slide 16: Additional value created via constant portfolio review
Additional value created via constant portfolio review Q1 developments, creating long term value Capex Acquisitions Divestitures ● Strategic Booster : Hazardous ● Strategic Booster : Uniper in ● Non strategic : SADE, sale waste treatment capacity under Hungary, signed in Q1, to be completed to NGE o
Slide 17: GreenUp Strategic Program
GreenUp Strategic Program
Slide 18: Strong Q1 results confirming business model
Strong Q1 results confirming business model Supporting our newly launched Green Up strategic program Essential services, “infrastructure-like”: full asset ownership or with >90% of renewal contracts. Leadership wide position in environmental services TOP 3 of our businesses in all key countries. Sup
Slide 19: Veolia unique positioning illustrated with PFAS recent developments
Veolia unique positioning illustrated with PFAS recent developments USA: emerging PFAS regulations with $200bn estimated market ● Recent EPA regulations ○ April 10th, Water quality, 19th of April CERCLA ● Powerful drivers behind a $200b estimated market ○ Drinking water safety and pollutants removal
Slide 20: Veolia's unique positioning on €2500bn growing market
Veolia’s unique positioning on €2500bn growing market of environmental services Market Resilience Expertise positioning & growth Footprint Combined & local Track Positioned in large Delivering essential An extensive Engagement businesses anchoring record growing markets of services & operating techn
Slide 21: 2024-2027 roadmap: sustainable growth with high impact
2024-2027 roadmap : sustainable growth with high impact Decarbonization Solid and resilient growth(a) 18 Mtons CO2e erased in 2027 (scope 4) inc. boosters: bioenergy, flexibility & emission trajectory reduction compatible & energy efficiency, water with 1,5°C (scope 1&2) technologies, hazardous wast
Slide 22: Financial & Operational Performance - Claude Laruelle, CFO
2023 FINANCIAL & OPERATIONAL PERFORMANCE Claude Laruelle CFO
Slide 23: Strong Q1 2024 results
Strong Q1 2024 results Solid businesses, agility and operational excellence drive profit growth Var. vs. Q1 2023 at constant In €M Q1 2023 Q1 2024 scope and FX -1.7% Revenue 12 007 11 556 / +3.9% excl energy prices EBITDA 1 574 1 624 +5.7% Current EBIT(1) 788 843 +11.1% Net Financial Debt(1) 18 727
Slide 24: Q1 2024 Revenue of €11,556M up 3.9% excl energy prices
Q1 2024 Revenue of € 11 556M up 3.9%(1) excl energy prices Evolution vs Q1 2023 ▪ Forex mostly Latam Intrinsic growth ▪ Scope of which Sade 12 007 11 556 -€89M and bolt on in +355 Germany -228 -17 -702 +188 ▪ External factors -46 Commodities mainly Energy -1.9% -0.1% -5.8% -0.4% +1.6% +3.0% prices -
Slide 25: Q1 2024 Revenue: solid growth in all geographies
Q1 2024 Revenue : solid growth in all geographies Revenue Evolution by Region % at constant scope and FX Water Technologies +15.3% : good delivery and record commercial wins 1064 1160 +15.3% Bookings up 50% to € 1757M +6.2% Rest of the World +6.2% : solid growth in most geographies +1.0% Rest of Eur
Slide 26: Q1 2024 Revenue: solid growth in all activities
Q1 2024 Revenue : solid growth in all activities Revenue Evolution by Activities Water +6.5% % at constant ✓ Good volumes & tarif indexations in water operations scope and FX ✓ Strong Water Technologies delivery and bookings +50% Waste +5.5% +6.5% ✓ Solid waste stabilized volumes and recyclate price
Slide 27: Water revenue €4,343M up +6.5%
Water revenue €4 343M up +6.5% at constant scope and forex Revenue variation vs. 2023 Q1, 2024 Evolution vs Q1 2023 Volumes /Commerce/Works +3.0% ✓ Good volumes Weather -0.1% ✓ Good tariff indexations in all Price effect geographies including +4.6% in +3.6% France and high single digit increases in
Slide 28: Waste revenue of €3,746M up +5.5%
Waste revenue of €3 746M up +5.5% at constant scope and forex Evolution vs Q1 2023 ✓ Improved volumes in Europe Variation vs. 2023 ✓ Positive impact from energy sales : Q1 2024 strong performance of ERFs availability and Commerce/ volumes +1.2% electricity hedging Price increases +4.8% ✓ Continued p
Slide 29: Energy revenue €3,468M impacted by energy prices
Energy revenue €3 468M impacted by energy prices, as anticipated, with very limited impact on EBITDA sustained at high level Evolution vs Q1 2023 ✓ Revenue decrease due to lower energy prices, with nearly no impact on EBITDA Variation vs. 2023 Q1 2024 ✓ Continued heat price increase in 2024 Volumes
Slide 30: Q1 2024 EBITDA of €1,624M up 5.7%
Q1 2024 EBITDA of € 1 624M up 5.7%(1) Evolution vs Q1 2023 ▪ Forex mostly Latam Intrinsic growth ▪ Scope Sade disposal offset by consolidation of 1 624 +42 bolt-on assets in Germany 1 574 +38 +19 -19 +57 ▪ External factors -58 Commodities prices : energy -28 prices -€19M and recyclate -3.7% +1.2% -1
Slide 31: Current EBIT of €843m up 11.1%
Current EBIT(1) of €843m up 11.1% at constant scope and forex Variation at In €M Q1, 2023 Q1, 2024 constant scope and FX EBITDA 1 574 1 624 +5.7% Renewal expenses -68 -72 Amortization(1) including OFA repayment, provisions, -746 -731 asset impairments, net capital gains and other Share of current ne
Slide 32: Well controlled net financial debt
Well controlled net financial debt Increased Capex on fast growing activities with Return > WACC +4% 894 915 ➔ Net capex of €915M vs. €894M in Q1, 2023 In €M Growth capex include €94M of decarbonization capex and €43M of Hazardous waste projects ➔ Net financial debt of €19.0bn at 31/03/2024 includes
Slide 33: Fully confirmed 2024 guidance
Fully confirmed 2024 guidance Revenue Continued organic solid growth(1)(2) Deep dives 2024 Energy Day: 11 January 2024 EBITDA +5% to +6% organic growth(1) USA day: 18-19 April 2024 Efficiency gains >€350m Water Technology and Innovation : 17 October 2024 Cumulated synergies >€400m 2022-2024 Current
Slide 34: Appendices
APPENDICES
Slide 35: Appendix 1: Forex
APPENDIX 1 March 2024 March 2023 Variance 1€ = xxx foreign currency closing rate average rate closing rate average rate closing rate % | average rate % Us Dollar 1,08 1,09 1,09 1,07 -1% 1% Pound Sterling 0,86 0,86 0,88 0,88 -3% -3% Australian Dollar 1,66 1,65 1,63 1,57 2% 5% Chinese Renminbi 7,81 7,
Slide 36: Analysis by geography: France and Hazardous Waste Europe
APPENDIX 2: Analysis by geography France and Hazardous Waste Europe : solid performance €M Δ at constant Q1 2023 Q1 2024 scope and FX Revenue of which 2 354 2 317 +2.7% Water France 685 711 +4.4% Waste France 716 733 +3.4% Hazardous Waste Europe 541 556 +2.6% Construction (SADE) 250 165 +1.6% Other
Slide 37: Analysis by geography: Rest of Europe
APPENDIX 2: Analysis by geography Rest of Europe impacted by lower energy prices €M Δ at constant scope Q1 2023 Q1 2024 and FX Revenue of which 5 664 5 147 -10.8% Central and Eastern Europe 3 786 3 244 -16.2% Northern Europe 972 1 020 +2.8% Southern Europe 905 882 -2.7% Comments ➔ Central and Easter
Slide 38: Analysis by geography: Rest of the world
APPENDIX 2: Analysis by geography Rest of the world: continued solid growth €M Δ at constant Q1 2023 Q1 2024 scope and FX Revenue of which 2 924 2 932 +6.2% Asia - Pacific 1 185 1 133 +1.2% o/w Asia 706 638 -3.8% o/w Pacific 479 494 +8.5% Latin America 485 473 +24.0% North America 769 784 +3.8% Afri
Slide 39: Analysis by geography: Water Technologies
APPENDIX 2: Analysis by geography Water Technologies: continued very strong growth €M Δ at constant scope Q1 2023 Q1 2024 and FX Revenues o/w 1 060 1 156 +15.3% VWT 352 362 +7.1% WTS 708 794 +19.4% Comments Water Technologies: bookings up 50% to €1 757M - Very strong pipeline ➔ WTS up 19.4%, driven
Slide 40: Net financial debt at 31/03/2024 of €19bn
APPENDIX 3 Net financial debt at 31/03/2024 of €19bn(1) In €M (1) Excluding PPA 40 (2) including hybrid impact for €209M
Slide 41: Leading ESG rankings in 2023
APPENDIX 4 Leading ESG rankings in 2023 GENERAL ESG ✓ S&P Global: N°1 in the Multi ✓ Moody’s Analytics: ✓ ISS-ESG: Prime and Water Utilities industry, Leader in Waste & Water and 1st decile selection in the DJSI World and utilities industry with a (B rating) in the Multi Europe, “Top 1%” Utilities i
Slide 42: Net zero strategy
APPENDIX 5 Net zero strategy “With this Climate Report, I hope to be able to show all our stakeholders, in particular the economic players – companies and financial institutions alike – that a realistic and ambitious climate strategy is possible. We offer a simple equation: 50% fewer Scopes 1 and 2
Slide 43: Contacts
CONTACTS Analyst & Investor Relations Media Relations Ronald Wasylec Laurent Obadia Deputy CFO, Senior Vice President, Telephone: +33 1 85 57 89 43 Investor Relations e-mail: laurent.obadia.@veolia.com Telephone: +33 1 85 57 84 76 e-mail: ronald.wasylec@veolia.com Ariane de Lamaze Evgeniya Mazalova