Veolia Environnement: Very Strong Start of the Year Enables to Fully Confirm Our 2024 Full Year Objectives
KEY FIGURES AT
(
NON AUDITED IFRS DATA)
- Solid underlying revenue growth and strong commercial momentum in both our activities identified as boosters in our Greenup Strategic plan (Water Technologies, Hazardous Waste, Bioenergies and Energy Efficiency) and in our strongholds businesses.
- Confirmation of the strength of our value-creation model, with EBITDA up sharply by +5.7% organic, driven by business growth, operational efficiency and synergies ahead of annual target
Revenue of €11 556 M with solid growth of +3.9%(1) excluding energy prices
- Strong growth in Water and in Waste
- Energy stable excluding the impact of energy prices
- Overall, and after taking into account the effect of lower energy prices, revenue was down slightly by 1.7%(1) , with no impact on results.
EBITDA of €1 624 M, a strong organic growth of +5.7 %(1), within the guidance range of +5 % to +6 %(1) :
- € 88 M in efficiency gains, in line with our annual target of €350 M
- €42 M in synergies, ahead of annual target
Current EBIT sharply up by +11.1%(1), to €843 M
Objectives 2024 fully confirmed
We have continued to demonstrate our technological leadership and innovative approach to providing our customers with the water service of the future, notably through the renewal of the flagship contract with Syndicat des Eaux de l'Île-de-
This commercial momentum, combined with strict financial discipline, has enabled us to increase our EBITDA by 5.7% and our current EBIT by 11.1%. These are very good results, in line with the strategic priorities of the GreenUP plan, enabling us to fully confirm our objectives for the full year.”
Detailed
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The Group's consolidated sales amounted to
11,556 million euros atMarch 31, 2024 , compared with12,007 million euros atMarch 31, 2023 . They varied by -1.7% on a like-for-like basis, and by +3.9% excluding the impact of energy prices, which mainly affectedEurope excludingFrance .
Revenue evolution by effect breaks down as follows
- The currency effect was a negative €228 million (-1.9%), mainly reflecting fluctuations in Argentinean, Chilean, Czech and Australian currencies, partly offset by an improvement in Polish and British currencies1.
-
The perimeter effect of -
17 million euros (-0.1%) mainly includes the impact of the disposal of SADE onFebruary 29, 2024 , partially offset by the acquisition ofHofmann (Germany) in the first quarter of 2024, and by the entry into the perimeter of Lydec (Morocco ) onJanuary 25, 2023 . -
The impact of commodities (corresponding to changes in energy and recyclate prices) amounted to
-702 million euros (-5.8%), due to lower energy prices (-679 million euros ), mainly in Central andEastern Europe , and lower recyclate prices (-24 million euros ), mainly for plastics. -
The climate effect amounted to
-46 million euros (-0.4%), mainly in Central andEastern Europe , where energy sales were impacted by a milder winter than in 2023. -
Intrinsic growth is driven by positive commercial and price effects. The Commerce / Volumes / Works effect amounted to
+188 million euros (+1.6%), driven by a good commercial momentum, healthy water volumes, the increase in works carried out, as well as strong growth in Water Technologies activities. Favorable price effects amounted to+355 million euros (+3.0%), mainly due to tariff indexations and price increases of +4.6% in waste and +3.6% in water.
Revenue at
Compared with
Revenue in
-
Water
France sales of711 million euros were up +4.4%, mainly due to the positive effect of tariff indexations of +4.6% and volumes up +0.5%. -
Sales for the Waste
France business totaled733 million euros , up +3.4% due to the positive effect of tariff indexations and price increases, and despite still low volumes. -
Sales in the
Europe special waste business totaled556 million euros , up +2.6%, impacted mainly by price increases, which offset the effect of lower oil prices. First-quarter volumes were broadly resilient compared with 2023.
Revenue in
-
In Central and
Eastern Europe , sales totaled3,244 million euros , down -16.2%, heavily impacted by lower energy prices, and to a lesser extent by an unfavorable climate effect (-40 million euros ) due to a milder winter than last year. -
In
Northern Europe , revenues of1,020 million euros rose by +2.8%. This increase was mainly due to sales in theUnited Kingdom , up +5.6% on a like-for-like basis, mainly in the waste business, which benefited from price increases and higher volumes processed, particularly in incineration, thanks to very good availability of our facilities. -
In Iberia, sales totaled
613 million euros , down slightly by -0.6%. It was negatively impacted by lower energy prices, offset by tariff increases and an increase in work on water activities. -
Italy generated revenues of270 million euros , down -7.1%, mainly due to lower energy prices, with no impact on margins due to the parallel fall in energy purchase costs.
Revenue in Rest of the World reached 2
-
Sales in
Latin America totaled473 million euros , up +24.0%, driven in particular by good waste volumes, notably inBrazil andColombia , the effect of tariff revisions on water activities inChile , and the impact of price increases inArgentina (offset by the devaluation of the Argentine peso). -
In
Africa-Middle East , sales totaled385 million euros , up +4.1%, driven mainly by growth in energy services in theMiddle East , as well as increased activity inMorocco . -
In
North America , revenues came to784 million euros , up +3.8%. The Hazardous Waste business showed good momentum, with rising prices and volumes. The Water business benefited from rate increases, as well as 3% higher volumes in the "regulated water" business. -
Sales in
Asia totaled €638 million, down -3.8%, mainly due to lower activity at hazardous waste treatment plants inChina andIndia . These effects were partially offset by strong sales momentum in energy efficiency inHong Kong (+10.0%), energy inChina and water inJapan (+4.7%). -
In the Pacific region, sales of
494 million euros were up +8.5%, mainly due to the effect of tariff revisions and higher volumes of waste processed, as well as strong momentum in industrial maintenance.
The WaterTechnologies business generated sales of
By business, at constant scope and exchange rates, the evolution of revenue is as follows:
-
Sales in the Water division rose by +6.5% to €4,343 million, driven by an increase in Water operations (+3.8%) and growth in Technology and Construction (+12.7%);
Water Operations revenue rose by +3.8% to €3,021 million, with tariff increases in all regions, a good level of construction activity, and buoyant volumes mainly in Central and
Eastern Europe (+4.2%),the United States (+3%) andMorocco (+2.4%). Volumes were stable inFrance andSpain .Technology and Construction sales rose by 12.7% to €1,322 million, driven mainly by Water Technologies.
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Sales for the Waste business rose by +5.5% on a like-for-like basis to €3,746 million. Sales benefited from favorable price revisions (+4.6%), offsetting the impact of lower recycled materials prices (-0.7% on sales), mainly in
Northern Europe . The commerce/volume/work effect was positive (+1.2%), marked by rising volumes, particularly in theUK andAustralia , and an increase in hazardous waste business outsideAsia .
-
Revenue of Energy activities totaled €3,468 million, down -16.5% due to lower energy prices. The climate effect, which was unfavorable in the first quarter of 2024, had a -1.0% impact on sales due to a milder winter. Energy Services revenues were boosted by strong commercial momentum in
Europe (Italy ,Belgium ), theMiddle East andHong Kong .
Strong EBITDA growth, to €1 624 M vs. €1 574 M at
The currency impact on EBITDA came to
The scope of consolidation effect of
External factors negatively impact EBITDA :
-
Changes in commodity prices (energy and recycled materials) had a net unfavorable impact on EBITDA of -
28 million euros (-1.8%), mainly due to lower energy prices net of lower energy purchasing costs (-19 million euros ), and lower recycled materials prices (-9 million euros ), mainly inNorthern Europe . -
The climate impact was -
19 million euros (-1.2%), mainly in Central andEastern Europe , affected by a milder winter than in 2023.
Organic growth was driven by favorable Commerce/Volume/Work effects, and by efficiency gains generated by the Group, of which it retained 43% in Q1.
-
The Commerce / Volumes / Work effect was favorable, at
+57 million euros (+3.6%), and resulted from its positive effect on sales. -
The net efficiency gains, net of gains shared with customers, contract renegotiations and time-lag effects on the passing-on of costs generated an additional
38 million euros (+2.4%) in EBITDA in Q1, 2024. This represents a retention rate of 43% of the €88M gains generated by the Group under the efficiency plan.
The gains generated by the efficiency plan contributed
Synergies generated by the integration of Suez amounted to
Strong Current EBIT growth to €843 M, an organic growth of +11.1% at constant scope and forex.
The increase in Current EBIT compared with
-
strong growth in EBITDA (
+89 million euros on a like-for-like basis) ; -
a rise in depreciation and amortization4 , including the repayment of operating financial assets, mainly related to Central and
Eastern Europe (notablyUzbekistan ) offset by the positive impact of provisions and capital gains on industrial disposals; -
a decrease in the share of net income from joint ventures of -
6 million euros at constant scope and exchange rates, due to a non recurring item in Q1, 2023.
The currency effect on current EBIT was negative by -
Evolution of net free cash flow net Financial Debt
Net free cash flow before financial investments and dividends stood at -
The change in net free cash flow compared with
- EBITDA growth driven by organic revenue growth and efficiency gains, as well as synergies ;
-
Net capital expenditure of -
915 million euros compared with -894 million euros atMarch 31, 2023 . This increase is due to a €16 million rise in gross capital expenditure, mainly as a result of decarbonization projects underway in Central andEastern Europe . -
The change in operating working capital, which deteriorated by -
149 million euros compared withMarch 31, 2023 , impacted in particular by unfavorable timing effects and higher disbursements than in the first quarter of 2023 in respect of water royalties paid to local authorities and purchases of CO2 quotas. -
The change in financial expenses of -
60 million euros compared withMarch 31, 2023 , which stems mainly from a non-recurring income in Q1 2023 and the change in the balance of variable financial expenses and interest income on cash balances.
Net financial debt stood at
-
Net free cash flow for the quarter of -
673 million euros impacted in particular by the seasonality of Working Capital Requirement down in the first quarter (-978 million euros ). -
Net financial investments of -
129 million euros following the acquisition ofGroupe Hofmann GmbH and the disposal of subsidiary SADE. -
Repayment of hybrid debt including coupons for -
209 million euros .
Net financial debt is also impacted by a favorable foreign exchange and fair value variation effect of
2024 Guidance fully confirmed In view of the excellent results achieved in Q1 2024, guidance 2024 is fully confirmed:
(1) at constant scope and forex / (2) excluding energy prices / (3) excluding Suez PPA |
• Solid organic revenue growth 5 • €350M savings per year • Over €8bn of EBITDA in 2027 • ~ 10% annual growth6 in current net income over 2023-2027 • Leverage ratio ≤ 3x • Dividend growth in line with current EPS |
• €4 bn of growth investments, of which €2 bn are prioritized on 3 growth boosters • Decarbonization: 18m tons of CO2 erased in 2027 (scope 4) & emission reduction trajectory compatible with 1.5°C warming (scope 1&2) • Regeneration: 1.5 bn m3 of fresh water saved in 2027 • Depollution: 10m tons of hazardous waste and pollutants treated in 2027 |
GreenUp 2024-2027 targets fully confirmed
Agenda
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ABOUT
IMPORTANT DISCLAIMER
As the changes in the health crisis are difficult to estimate, we draw your attention to the “forward-looking statements” that may appear in this press release and relating to the consequences of this crisis which may affect the future performance of the Company.
This document contains "non‐GAAP financial measures". These "non‐GAAP financial measures" might be defined differently from similar financial measures made public by other groups and should not replace GAAP financial measures prepared pursuant to IFRS standards.
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(1) At constant scope and forex |
1 Main currency impacts: Argentine peso (-159 million euros), Chilean peso (-40 million euros), Czech koruna (-33 million euros) and Australian dollar (-26 million euros), offset by Polish zloty (+84 million euros) and British pound (+23 million euros). |
2
For Projects and Products. Total order intake of €1,757 million, up 50% on |
3 Main currency impacts: Argentine peso (-29 million euros), Chilean peso (-20 million euros), Czech koruna (-10 million euros), offset by Polish zloty (+12 million euros). |
4 Excluding Suez PPA |
5 Excluding energy prices |
6 At constant exchange rates |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240513952572/en/
GROUP MEDIA RELATIONS
Anna Beaubatie - Aurélien Sarrosquy
Tel.+ 33 (0) 1 85 57 86 25
presse.groupe@veolia.com
INVESTOR RELATIONS
Ronald Wasylec -
Tél. + 33 (0) 1 85 57 84 76 / 84 80
investor-relations@veolia.com
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