2022 RESULTS AT AN ALL-TIME HIGH
VERY STRONG GROWTH IN ACTIVITY AND
RESULTS
ALL OBJECTIVES WERE EXCEEDED
SUCCESSFUL SUEZ INTEGRATION AND SYNERGY PLAN
IMPLEMENTED FASTER THAN EXPECTED
ANOTHER STRONG GROWTH IN ACTIVITY AND
RESULTS EXPECTED IN 2023
Regulatory News:
Veolia (Paris:VIE):
- VERY STRONG ORGANIC REVENUE GROWTH OF +14.1 %1 TO €42 885M,
AND +6.5 %1 EXCLUDING ENERGY PRICE IMPACT
- VOLUME GROWTH IN THE 3 BUSINESSES, WATER, WASTE,
ENERGY
- FAVORABLE IMPACT OF TARIFF INDEXATIONS AND OF OUR STRICT
PRICING POLICY
- STRONG EBITDA ORGANIC GROWTH OF +7.2 % TO €6 196 M, ABOVE
THE GUIDANCE RANGE OF +4 % TO +6 %, THANKS TO REVENUE GROWTH AND
SYNERGIES ABOVE ANNUAL TARGET :
- €371 M OF EFFICIENCY GAINS VS. AN ANNUAL TARGET OF €350
M
- €146 M OF SYNERGIES VS. AN ANNUAL TARGET OF €100 M
- CURRENT EBIT OF €3 062 M2 , A STRONG ORGANIC GROWTH OF
+16.3%1
- CURRENT NET INCOME OF €1 162 M2 UP +29.7%3 , ABOVE THE
ANNUAL TARGET OF €1.1BN
- NET FINANCIAL DEBT OF €18 138 M, WITH A LEVERAGE OF
2.9x
- PROPOSAL TO INCREASE THE DIVIDEND BY 12% TO €1.12 PER
SHARE
- 14 MT OF CO2 EMISSIONS REDUCED FOR OUR CLIENTS IN 2022 AND
320Mm3 OF WATER SAVED PER YEAR vs. 2019
- 2023 OBJECTIVES:
- SOLID ORGANIC REVENUE GROWTH
- ORGANIC GROWTH OF EBITDA BETWEEN +5% AND +7%
- CURRENT NET INCOME GROUP SHARE AROUND €1.3 BN
- LEVERAGE RATIO MAINTAINED AROUND 3x
1 at constant scope and forex 2 Excluding impact of Suez
Purchase Price Allocation. 3 At current FX
Estelle Brachlianoff, CEO of the Group, commented : “In
an exceptional year for Veolia, marked by the acquisition of Suez,
I am particularly proud of the performance we have achieved, both
in terms of activity and results. We have been able to adapt to the
many geopolitical, economic and energy challenges of 2022, to
deliver historic results for the group, while successfully bringing
together the 40,000 Suez colleagues who have joined us. We are
already seeing the first fruits of this, with synergies well ahead
of our plan, and beyond that, we are putting our vision into action
by building together the world champion of ecological
transformation.
The combination of our know-how and technologies, with a unique
geographical coverage, allows us to invent and deploy the most
relevant and efficient solutions to the challenges of
Decarbonation, Depollution and Regeneration of resources, which are
at the heart of concerns all over the world
Thanks to Veolia's activities, 14 M tons of CO2 were eliminated
in 2022 for our clients, and 320 million M3 of water were saved per
year vs. 2019, the equivalent of the annual consumption of a 6
million inhabitant city.
Our revenue and results in 2022 are a record for all our
indicators. Our revenue grew by 14%, driven by good volume
dynamics, but also thanks to our tariff indexation models with our
municipal customers, and our discipline in terms of pricing with
our industrial customers. These two elements demonstrate both our
low sensitivity to the economic cycle and our ability to pass on
cost increases in our prices.
The growth of our EBITDA of +7.2%, of our current EBIT of 16.3%,
and of our current net income of +29.7%, exceeded all our
objectives, in particular thanks to the very efficient
implementation of the synergies resulting from the merger with
Suez.
We are starting the 2023 financial year in very good conditions,
perfectly launched for another year of strong growth.”
******************
Detailed results at 31 December 2022
- Revenue for 2022 is €42,885 million, up 49.4% at constant
exchange rates compared to reported 2021 revenue. This very strong
growth is the result of the acquisition of Suez, which contributed
€9,722 million to total revenues, and organic growth of €4,565
million (+16%)
- Based on the combined revenue of Veolia and Suez, growth was
+14.1% on a like-for-like basis.
The evolution of revenue by effect is as follows:
The following analysis of the Group's activity is based on the
combined revenues of Veolia and Suez assets.
The exchange rate effect was €673 million (+1.8% on
combined revenue) and mainly reflects the change in the US,
Australian, UK, Chinese and Czech currencies, partially offset by a
deterioration in the Polish, Hungarian and Latin American
currencies1.
Scope effect was -€757 million (-2.0%) and mainly
includes the disposal of assets in Scandinavia in 2021 (-€266
million) and, at Suez level, the disposal of activities in
Australia in 2021 and the impact of the European Union's remedies
with the classification of part of the French hazardous waste
activities as assets available for sale. These negative effects are
partially offset by the impact of the entry into the scope of OSIS
on SARP (+€78 million) in 2021.
The Commerce / Volumes / Works effect was +€906 million
(+2.4%) thanks to good volumes in all activities, particularly in
energy, as well as growth in construction and technology
activities.
The climate effect (-0.3%). The Energy business in
Central and Eastern Europe was impacted by a milder winter than in
2021, and to a lesser extent Water in Chile with a cooler summer
impacting water volumes in the first quarter.
The impact of energy prices amounted to +2,851 million
euros (+7.6%), driven by the increase in heat and electricity
tariffs mainly in Central and Eastern Europe.
The impact of the price of recycled materials amounted to
+258 million euros, after 288 million euros at 30 September
2022. The main effect is the increase in the price of recycled
paper in France, Germany and the UK until July 2022.
Price effects were very favorable, at +€1,394 million
(+3.7%), mainly due to price indexation mechanisms and increases in
the price of the Group's services of +4.6% on average in Waste and
+3.2% in Water.
- Revenue at 31 December 2022 progressed across all operating
segments compared to 31 December 2021 combined:
- Revenue in France and Special waste Europe amounted to
€9,666 million and showed organic growth of +2.6% compared
to 31 December 2021 combined:
- Water France revenue increased by +1.6 %, thanks to
tariff indexations of +3.8% and à fin décembre and volumes up
+0.4%.
- The French waste business grew by 0.5%. It benefited
from continued high average prices for recycled materials sold,
despite the drop in the price of recycled paper since the summer,
and from the positive effect of price revisions, while volumes were
down moderately compared with last year.
- The hazardous waste business in Europe grew by +5.5%,
with higher volumes and prices, particularly in the oil and
lubricant treatment business, combined with the positive effect of
price revisions and good business development in the sanitation and
industrial maintenance business
- SADE revenue grew by 3.4 %, thanks to a good commercial
momentum in France.
- Revenue in Europe excluding France reached €17,850
million at 31 December 2022, with organic growth of +26.1%,
mainly due to higher energy prices and good tariff indexation
levels in Water in Central and Eastern Europe.
- In Central and Eastern Europe, revenue rose by 40.8% to
9,400 million euros. The region continued to enjoy sustained
activity driven by the favorable effect of tariff indexation in
energy (Poland, Hungary, Czech Republic, Slovakia, Romania and
Germany) and water (Czech Republic and Romania), and the +1.1%
increase in water volumes distributed (Poland and Czech Republic),
and despite an unfavorable Energy climate effect (-€100
million).
- In Northern Europe, revenue of €4,900 million
increased by 9.2%. This increase was mainly driven by the United
Kingdom, up 9.0% at constant scope and exchange rates due to the
favorable effect of recycled material prices (paper and plastic),
higher electricity prices, good tariff indexation in PFIs (+7% on
average) and good performance of incinerators (95% availability
rate of facilities). Belux achieved organic growth of +13.9%,
thanks to good operating performance in waste and energy
services
- In Italy, organic revenue growth reached +34% due to the
start of contracts won in 2021 and the very favorable effect of
energy prices.
- In Iberia, revenue grew by +14.4%, driven by the energy
business and a good level of activity in water in Spain (Agbar),
where volumes are up by +2.1%.
- Revenue in Rest of the World reached €11,196
million, with organic growth of +8.5% in all geographies,
including Asia, despite the slowdown in China due to the lockdown
policy :
- Revenue growth in Latin America of +20.2%, driven in
particular by Chile, which benefited from favorable tariff
indexations in the water business, and Argentina. Colombia and
Brazil showed a good level of activity in waste management.
- In Africa-Middle East, business grew by +10.6%, driven
mainly by growth in water contracts in Morocco, thanks to higher
volumes and the positive effect of tariff revisions, and the very
strong growth of Enova in the Middle East in energy efficiency
services.
- In North America, revenue was 3,386 million, an increase
of 9.7%. Growth was driven by continued strong activity in
hazardous waste, with volume growth and double-digit tariff
increases, and in water, by the favorable effect of tariff
indexation, particularly in the Regulated Water business, good
volumes during the summer and a good level of work activity
- Revenue in Asia increased by +2.7%. The slowdown in
growth in China due to the Covid restrictions continued to have an
unfavorable impact on the business with lower volumes of hazardous
waste and reduced activity in energy and industrial services. This
slowdown was offset by good growth in other countries, notably
Singapore (+57.9%), Taiwan (+19%), South Korea (+6.2%) and Japan
(+4.7%).
- In Pacific, revenue increased by 4.0%, again due to
higher volumes in the waste collection and landfill activities and
the price increases initiated in the second half.
- The Water Technologies business grew by 10.0%. Veolia
Water Technologies recorded growth of +4.4% and Water Technologies
Services accelerated sharply to +13.5%, thanks to a good level of
activity and price increases, particularly in the sale of water
treatment chemicals. VWT's order intake at 31 December 2022 amounts
to €1,496 million compared to €1,268 million at 31 December
2021.
- By business, at constant scope and exchange rates, the
evolution is as follows :
- Water operations revenue rose by 8.0% to €12,671
million, with good volumes in all geographies and higher tariff
indexation.
- Technology and Construction revenue grew by +8.6 %, to
€5 589 million.
- Revenue in the Waste business rose by 6.8% on a
like-for-like basis to €15,798 million. It benefited from
high average prices for recycled materials (+1.7% impact after
+3.4% in the first half of the year) for paper and plastics. The
upward trend in oil prices and a good level of activity had a
positive impact on the hazardous waste business in Europe and North
America. Electricity revenues from the incineration business were
up and favorable tariff revisions (+4.6% after +3.2% in the first
half of the year) were observed in the various geographies. The
commerce/volume effect was neutral (-0.2%). The Group is continuing
its policy of contract selectivity and strict pricing of its
offers
- Energy revenues rose by 44.7% on a like-for-like basis
to €9,227 million. The strong growth of the business is due
to a very strong energy price effect (+36.6% impact after +29.4% in
the first half of the year), particularly in Europe, the increase
in volumes distributed, tariff increases in Central and Eastern
Europe and good commercial development, particularly in Italy and
the Middle East. The weather effect was slightly unfavorable at
-1.5% due to a mild winter.
- Strong EBITDA growth, to €6 196 million vs. €5 823 million
at 31 Decembre 2021 combined, a growth of +7.2 % at constant scope
and exchange rates.
- Exchange rate fluctuations had a favorable impact of €91m
(+1.6%), offset by unfavorable scope effects of €139m (-2.4%).
- The strong EBITDA progression was driven by higher volume and
activity level for +€81m, by efficiency gains for +€371m (above the
€350m annual target) and by synergies from the Suez acquisition for
+€146m. The synergy programme is ahead of schedule as the annual
target was €100m. The effect of price increases net of cost
increases and contract renegotiations was -€220m. Climate had a
negative impact of -€58m. Recycled materials and energy prices had
a positive effect of +€217m on EBITDA growth. Other effects were
mainly due to items that positively impacted EBITDA at the end of
December 2021, due to the construction completion of an incinerator
in Troyes for €83 million, as well as non-recurring items for €32
million that occurred on the acquired Suez scope.
- Strong current EBIT growth of +16.3% at constant scope and
forex, to € 3 062 million.
Currency movements contributed €19m to current EBIT.
The increase in recurring EBIT on a like-for-like basis (€446m)
breaks down as follows :
- Strong EBITDA growth (+€421m at constant scope and forex).
- Stable depreciation and amortization (including repayments of
operating financial assets) excluding the 2021 one-off OFA
repayment of -€83m associated with the Troyes incinerator
project
- Industrial capital gains net of asset impairments included the
impact of an asset disposal completed in Australia in the first
quarter of 2022, as well as the disposal of the Industrial Water
business completed in November 2022.
- IFRS 2 impact of -€54m
- Share of current net income of JV and associates of €127m vs.
€148m in 2021.
- Current net income group share reached €1 162 million at 31
December 2022, vs. € 896 million at 31 December 2021 published
(+29.7% at current FX and +27.7% at constant FX)
- The cost of net financial debt was -€707m, of which -€226m due
to the consolidation of Suez's net financial debt. The Group's
financing rate returned to levels comparable to 2019 and 2020,
after an exceptionally low 2021. The Group's financing rate was
3.87% at 31 December 2022 compared with 2.98% at 31 December 2021
as published.
- Other financial income and expenses (including capital gains
and losses on financial disposals) amounted to -€316m compared to
-€39m at December 31, 2021 published. On 31 December 2021, this
item included at Veolia the dividends received from Suez for €122m
in respect of the 29.9% held at that time.
- Current tax charge reached €514m, reflecting the increase in
current profit before tax. The current tax rate was 26.9%.
- Minority interests amounted to €363m compared to €158m at 31
December 2021 published.
- Net income group share was €716 million vs. €404 million at
31 December 2021 published (+77%)
- The main non-current items consist of costs related to the
acquisition and integration of Suez for -€285m, the impairment of
the Group's activities in Russia for around €100m, restructuring
charges for -€115m and non-current capital gains on financial
disposals of +€322m in respect of antitrust divestitures (mobile
water services activities and part of the hazardous waste
activities in France). Finally, the impact of the Suez Purchase
Price Allocation amounted to -€52m.
- Net financial debt of €18 138m at 31 December 2022. Free
cash flow of €1 032m.
- Net financial debt amounted to €18,138 million (excluding PPA),
compared with €9,532 million at 31 December 2021. Compared to 31
December 2021, the change in net financial debt is mainly explained
by the following elements:
- Net free cash flow for the year of €1 032 million, including
the increase in EBITDA, net capital expenditure of €3 089 million,
an improvement in the variation of operating working capital
requirement of +€48m thanks to continued cash collection
efforts.
- Net impact of the acquisition of Suez for €8,664 million
including: the acquisition of the Suez Group on 18 January 2022,
the incoming net financial debt, the sale of part of the Suez Group
to the consortium of investors (Meridiam-GIP-CDC and CNP
Assurances) on 31 January 2022, and the antitrust remedies agreed
with the UK Competition and Markets Authority and with the European
Commission
- The payment of dividends approved at the General Meeting of 15
June 2022 (-€688m)
- Repayment of Suez hybrid debt for -€500m
- Net financial debt was also impacted by an unfavorable exchange
rate and fair value variation effect of -€232 million at 31
December 2022
- Increase of dividend to €1.12 per share, paid 100% in
cash.
The Board of Directors will propose to the General Meeting of 27
April 2023 the payment of a dividend of €1.12 per share for the
financial year 2022, payable in cash. The ex-dividend date is 9 May
2023. The 2022 dividends will be paid from 11 May 2023.
******************
- Solid organic growth of revenue
- Efficiency gains above €350m complemented by additional
synergies for a cumulated amount of €280m end-2023, in line with
the €500m cumulated objective .
- Organic growth of EBITDA between +5 % and +7 %
- Current net income group share around €1.3bn(2)
- Confirmation of the EPS accretion(3) of around 40 % in
2024
- Leverage ratio around 3x
- Dividend growth in line with current EPS growth
(1) At constant forex and without extension of the conflict
beyond the Ukrainian territory and without significant change in
the energy supply conditions in Europe (2) Before Suez PPA (3)
Current net income per share after hybrid costs and before PPA
About Veolia
Veolia Group aims to become the benchmark company for ecological
transformation. Present on five continents with nearly 220,000
employees, the Group designs and deploys useful, practical
solutions for the management of water, waste and energy that are
contributing to a radical turnaround of the current situation.
Through its three complementary activities, Veolia helps to develop
access to resources, to preserve available resources and to renew
them. In 2022, the Veolia group provided 111 million inhabitants
with drinking water and 97 million with sanitation, produced 44
terawatt hours of energy and recovered 61 million tonnes of waste.
Veolia Environnement (Paris Euronext: VIE) achieved consolidated
revenue of 42 885 million euros in 2022. www.veolia.com
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.
Veolia Environnement is a corporation listed on the Euronext
Paris. This press release 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 performance. Actual results may differ
materially from the forward-looking statements as a result of a
number of risks and uncertainties, many of which are outside our
control, including but not limited to: the risk of suffering
reduced profits or losses as a result of intense competition, the
risk that changes in energy prices and taxes may reduce Veolia
Environnement’s profits, the risk that governmental authorities
could terminate or modify some of Veolia Environnement’s contracts,
the risk that acquisitions may not provide the benefits that Veolia
Environnement hopes to achieve, the risks related to customary
provisions of divestiture transactions, the risk that Veolia
Environnement’s compliance with environmental laws may become more
costly in the future, the risk that currency exchange rate
fluctuations may negatively affect Veolia Environnement’s financial
results and the price of its shares, the risk that Veolia
Environnement may incur environmental liability in connection with
its past, present and future operations, as well as the other risks
described in the documents Veolia Environnement has filed with the
Autorité des Marchés Financiers (French securities regulator).
Veolia Environnement does not undertake, nor does it have, any
obligation to provide updates or to revise any forward looking
statements. Investors and security holders may obtain from Veolia
Environnement a free copy of documents it filed (www.veolia.com)
with the Autorités des Marchés Financiers.
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.
1 Main currency impacts: US dollar (+€546 million), Australian
dollar (+€73 million), British pound (+€17 million), Czech koruna
(+€78 million), Chinese yuan RenMinBi (+€83 million), Polish zloty
(-€55 million), Hungarian forint (-€133 million), Chilean peso
(-€16 million), Argentine peso (-€123 million)
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version on businesswire.com: https://www.businesswire.com/news/home/20230301006023/en/
Group Media Relations Laurent Obadia Evgeniya Mazalova Tél : +
33 (0)1 85 57 86 25 Investor Relations Ronald Wasylec - Ariane de
Lamaze Tél. : + 33 (0)1 85 57 84 76 / 84 80
Veolia Environnement (EU:VIE)
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