Key Figures for the period ending September 30, 2018 · Veolia Environnement is a corporation...
Transcript of Key Figures for the period ending September 30, 2018 · Veolia Environnement is a corporation...
7 November 2018
Key Figures for the periodending September 30, 2018
Disclaimer
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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 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 divesture 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 Autorités 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.
Unaudited key figures
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Highlights
9M 2018 key figures
3VEOLIA KEY FIGURES SEPTEMBER 30, 2018
A significant acceleration in Q3 sales and EBITDA growth…
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o Very strong Q3 2018 :
Revenue up +6.8% and 7.8% at constant FXEBITDA up +8.4% and +9.4% at constant FX
o Enhanced Revenue growth fueled by continued robust commerc e, good volumes, andpick-up in construction
o Revenue up +7.8% (1) to €6,197M after +7.0% (1) in Q1 and +5.1% (1) in Q2� Continued strong Waste volumes : +4% ytd (+3% in Q1, +4.9% in Q2, +4.1% in Q3)
� … partly offset by lower recycled paper prices (-€119M on the Group’s 9M revenue)
� Confirmation of better tariff indexations (+0.8% in French water vs. +0.6% in June)
� Good weather in Water in Europe in Q3
� Construction rebound : VWT & Sade revenue up +10%(1) in Q3 vs. -5.7%(1) in June
o +6.0% at constant scope and forex (lfl)
o 8th quarter in a row of underlying strong growth
o Acceleration of EBITDA growth fueled by top-line and enhanc ed efficiencyo EBITDA up +9.4%(1) to €745M, after +5.3%(1) in Q1 and +6.4%(1) in Q2
o Good contribution of revenue growth into EBITDA
o Efficiency gains: €80M achieved in Q3, after €78M in Q2, and €70M in Q1
VEOLIA KEY FIGURES SEPTEMBER 30, 2018(1) At constant FX
o Very strong 9M2018 : Revenue +6.6% (1) & EBITDA up +6.9% (1)
o Revenue growth :+6.6%(1) and +4.7% lfl to €18,761Mo EBITDA growth : +6.9%(1) to €2,418M
o Current EBIT: +9.8% (1) to €1,100M vs. +6.8% (1) in June
o Current Net income of €457M, up 20.0% (1) at constant FX and +18.1%(1) excl. capitalgains
o Gross CAPEX of €1,134M (+8% in Q3, after +20% in H1)
o Signing with Rethman on Oct.2nd to divest our remaining 30% take in Transdev (€340M)
o Net Financial Debt of €10.5bn post repayment of hybrid bond in Aprilo Net Financial Debt expected significantly below €10bn at year end, before Transdev
divestiture
FY 2018 GUIDANCE FULLY CONFIRMED
…Leads to a very strong 9M 2018
5VEOLIA KEY FIGURES SEPTEMBER 30, 2018
(1) At constant FX
Renewal (~€2,000M backlog)o Average renewal rate: ~90%
o Mainly in France:
� Waste : Nantes, Rouen, Orléans, Rennes, Monthyion …
� Water : Deauville, Beaune, Troyes, Saint-Pierre, Ajaccio, Avignon…
o Organic growth (main contracts) :o Municipal
� Water : Oman, Emirates, Bangladesh, France (Bordeaux, Cannes, Angers…)
� Waste : Australia (Kwinana), UK (Southampton), Portugal (Aveiro)…
� Energy : USA (Georgia), Hungary (Dombovar)
o Industrial
� Mining : Australia (Victoria, Western Australia), Canada (Quebec)
� Steel : France (Arcelor Mittal)
� Chemicals : USA (DuPont)….
� Tertiary clients : UK (JD Wetherspoon, hospitals)
Tuck-in acquisitions and asset rotationo Waste in Columbia (Grupo Sala) (€167M)
o Energy in Slovaquia (€119M)
o Divestiture of a minority stake in Germany (Braunschweig) (€146M)
o Divestiture of industrial services in the US (€96M)
Delivering on our growth ambitions...
6VEOLIA KEY FIGURES SEPTEMBER 30, 2018
~€1,300M backlog
~€1,700M backlog
… and continued strong discipline on cost savings
7
27%
26%
24%
19%
4%France
Europe excludingFrance
Rest of the World
GlobalBusinesses
HQ
30%
50%
20%
PurchasingOperationsSG&A
Impact on EBITDA (in €M) 2016 20172018 target
9M 2017 9M 2018
Cost savings 245 255 300 190 228
2016-2018 target
800
o Cost cutting : +20% yoyEnhanced Procurement performance, Operational excel lence, Support function efficiency
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
2018-2019 outlook fully confirmed
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(1) At constant exchange rates (based on rates at the end of 2016)
� 2018 objectives (at constant exchange rates): �Continuation of sustained revenue growth�EBITDA growth greater than that of 2017�More than €300M in cost savings
� 2019 objectives (1): �Continuation of revenue growth and full impact of c ost savings�EBITDA between €3.3Bn and €3.5Bn (excluding IFRIC 1 2), i.e. between €3.5Bn
and €3.7Bn including IFRIC 12
� Dividend growth in line with that of current net in come
� 2018 objectives (at constant exchange rates): �Continuation of sustained revenue growth�EBITDA growth greater than that of 2017�More than €300M in cost savings
� 2019 objectives (1): �Continuation of revenue growth and full impact of c ost savings�EBITDA between €3.3Bn and €3.5Bn (excluding IFRIC 1 2), i.e. between €3.5Bn
and €3.7Bn including IFRIC 12
� Dividend growth in line with that of current net in come
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Key figures for the period ended September 30,
2018
9M 2018 key figures
9VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Very Strong 9M 2018 performance Accelerated Sales and EBITDA growth
In €M 9M 2017 published
9M2017 represented for IFRS 5 &
IFRS9(1)
9M 2018Var. Y-Y
vs. 9M2017 represented
∆ constant FX vs.
9M2017 represented
∆ constant FX vs. 9M 2017 incl.
Gabon
Revenue 18,221 17,991 18,761 +4.3% +6.6%(2) +5.3%
EBITDA 2,359 2,301 2,418 +5.1% +6.9% +4.7%
EBITDA margin 12.9% 12.8% 12.9%
Current EBIT (3) 1,049 1,024 1,100 +7.4% +9.8%
Current Net Income – Group share 406 396 457 +15.5% +20.0%
Current Net Income – Group shareexcluding capital gains
392 382 439 +14.7% +18.1%
Gross industrial Capex 982 982 1,134
Net financial debt 8,419 8,411 10,527
Net financial debt before hybrid repayment
8,419 8,411 9,075
Summary of FX impacts(vs. 9M2017)
€M %
Revenue -419 -2.3%
EBITDA -41 -1.8%
Current EBIT -25 -2.5%
Current Net Income -18 -4.5%
Net debt vs. Dec.2017 -11 -0.1%
Net debt vs. Sept. 2017 -61 -0.7%
Operations in Gabon discontinued from Jan. 2017 (IFRS 5)9M 2017 : Revenues €230M - EBITDA €47M – Current EBIT €15M
(1) See Appendix 1(2) +4.7% at constant scope and forex(3) Including the share of current net income of joint ventures and associates of entities viewed as core Company activities
(excluding Transdev which is no longer considered a core Group activity).
VEOLIA KEY FIGURES SEPTEMBER 30, 2018 10
Continued very strong revenue growth in Q3 2018 and accelerated EBITDA growth
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2017 2018
REVENUE
∆ at constant FXQ1 Q2 Q3 Q4 Year Q1 Q2 Q3
France -1.5% -0.4% -0.3% +1.9% -0.1% +0.6% -1.1% +2.6%
Europe excl. France +7.2% +4.4% +8.1% +6.1% +6.4% +6.9% +6.7% +7.4%
Rest of the World +11.8% +10.8% +9.4% +14.2% +11.6% +14.7% +13.2% +10.7%
Global Businesses -3.2% +1.7% -2.7% +1.9% -0.4% +3.5% -0.6% +11.4%
TOTAL +4.5% +4.4% +4.3% +6.3% +4.9% +7.0% +5.1% +7.8%
Total excl. Construction & Energy prices
+5.9% +4.1% +4.7% +5.0% +4.9% +4.6% +5.3% +5.1%
EBITDA growth +0.9% -0.2% +4.8% +5.2% +2.7% +5.3% +6.4% +9.4%
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
o Acceleration in sales and profit growth in Q3: � Higher growth in France due to continued hefty waste volumes (+4.3% ytd) partially offset by low paper prices, and
improved water prices and volumes� Continued strong growth outside of France, particularly in the Rest of the World� Sharp sales pick up in Global Businesses, due to construction rebound , and pursuit of strong hazardous waste
and multi utility industrial activity
Continued very strong revenue growth in 9M 2018: +6 .6% at constant FX (and +4.7% LFL) driven by International
Variations vs. September
2017 representedVariation
∆At constant
FX
Global Businesses +2.8% +4.6%
Rest of the World +5.2% +12.9%
Europe excl. France +6.8% +7.0%
France +0.7% +0.7%
Total +4.3% +6.6%
4,037 4,065
6,104 6,518
4,5864,825
3,2403,331
Sept. 2017represented
Sept. 2018
17,991*18,761*
Revenue in €m
* Including Other: €24M in 9M,2017 and €22M in 9M, 2018 VEOLIA KEY FIGURES SEPTEMBER 30, 2018 12
Robust commerce & good volumes drive revenue growth, up 6.6% at constant FX and +4.7% LFL
� FX : -€419M: o/w -120M€ USD, -€77M Argentinian peso , -€67M Australian $, -€21M Sterling pound
� SCOPE : +€345M : 2017 tuck-ins, Grupo Sala (€54M) partly offset by the divestiture of Industrial Services in the US closed in Feb. 2018 (-€130M impact)
� HIGHER ENERGY PRICES : +€130M (+€83M IN H1) mostly in the US (Q1) & higher electricity prices in Central Europe and Germany
� RECYCLED PAPER PRICES STABILIZED IN Q3, BUT PRICES STILL DOWN YOY : impact of -€96M o/w -€119M paper (respectively -€46M and -€64M in H1) partially offset
by plastic, recycled lubricant and sulfuric acid prices. Average market paper prices down 41% in France (to €78/T) and down 53% in Germany (to €37/T) (see slide 35)
� CONTINUED VERY FAVORABLE VOLUMES & COMMERCE + CONSTRUCTION UPTICK IN Q3 : +€596M
Volumes & weather : +€210M (vs. +€155M in H1) : WASTE : Continued good volumes in France, Europe and ROW, and strong Hazardous waste – WATER: lower Q2 volumes partly recuperated during the summer in France and Central Europe – WEATHER (ENERGY) : -€25M impact (mostly Q2)
Commerce : +€225M (vs. +€104M in H1) mostly in the US, Latam, Asia, Toxic waste and multi utility industrial contracts (VIGS)
Construction : +€161M (vs. +€48M in H1): mostly ROW construction works ; strong rebound of VWT/SADE in Q3
� PRICE EFFECTS: +€153M : mostly Asia, Latam (waste) , UK (waste) and CEE (increase in water tariffs)
Like-for-like growth : +4.7%
in €M
VEOLIA KEY FIGURES SEPTEMBER 30, 2018 13
Solid growth in Waste: +9.8% at constant FX (+4.8% like-for-like) : Very strong Volume & Commerce momentum partly offse t by recycled paper prices
France : Revenue up 1.7% to €1,869M :Very good volume trends (+4.3%) notably in landfills and incineration
UK/Ireland : Revenue up 4.1% (1) to €1,355MVOLUME/ COMMERCE: contract wins, excellent PFI performance and main waste landfilled volumes strongly up
Northern Europe : Revenue up 24.5% (1) to €1,018M thanks to 2017 tuck-ins
North America : Revenue up 7.5% at constant scope and FX to €61 3M : good volumes and prices in regeneration services and Hazardous
waste - IS divested since Feb. 2018
Latin America : Revenue up 43% (1) to €329M , and +17.6% at constant scope and FX, mostly new cont racts
Asia : Revenue up 53% (1) to €377M , and +32.1% at constant scope and FX : new assets and contracts: recycling facility of Hangzhou ,
toxic waste incinerator of Cangzhou…
Pacific revenue up 7.6% (1) to €576M: pursuit of recovery, with the benefit of the Woodlawn MBT new facility
Hazardous Waste (in Global business) : Revenue up +9.5% (1) to €827M
9M 2018
Recycled raw materials prices -1.4%
Volumes / activity levels +4.0%
Price increases +1.6%
Other +0.6%
Growth at constant scope & exchange rates +4.8%
Scope effect +5.0%
Growth at constant exchange rates +9.8%
Currency effect -3.0%
VEOLIA KEY FIGURES SEPTEMBER 30, 2018(1) At constant FX
14
EBITDA Growth of +6.9% at constant FX driven by Rev enue Growth and Efficiency gains
in €M
VEOLIA KEY FIGURES JUNE 30, 2018
� FX : -€41M (-€34M IN H1) , o/w : USD : -€13M; Argentinian Peso: -€8M; Australian $ : -€6M; Sterling pound: -€3M
� SCOPE : +€52M (+€35M IN H1) : 2017 tuck-ins for €27M (mostly impacted H1) and in 2018 notably Grupo Sala (€13M, consolidated since May)
� PROFITABLE ORGANIC GROWTH : +€89M (+€62M IN H1)
Continued good Waste volumes in France, UK (with higher electric revenue), Latam, Australia, and very strong Toxic (France, US, China notably)
Commerce : robust momentum
� ADVERSE WEATHER: -€23M:(like in H1) o/w -€16M in Energy (mild Q2 in CEE) and -€7M in Water (vs. -€11m in H1 due to improved volumes in Q3 in France)
� ENERGY & RECYCLATE PRICES : -€64M (-€42M IN H1) : ENERGY :-€29M (mostly H1: due to higher coal prices in CEE : -€20M pinching) – WASTE : recycled materials -€13M (of which paper -€18M) and higher fuel costs -€22M
� PRICE COST SQUEEZE : -€93M (-€63M IN H1) : higher indexation of water & waste contracts but continued pressure on salary increases and other costs
� VERY FAVORABLE IMPACT FROM COST REDUCTIONS : +€228M (+€148M IN H1) 15VEOLIA KEY FIGURES SEPTEMBER 30, 2018
France : Improved volumes and prices in water in Q3 and continued good volumes in waste offset by low recyc led paper prices
9M, 2017represented (1)
9M, 2018 ∆ ∆At constant FX
4,037 4,065 +0.7% +0.7%(2)
2,199 2,196 -0.1% -0.1%
1,838 1,869 +1.7% +1.7%
In €M
Revenue o/w
Water
Waste
(1) Proforma IFRS 5 & 9 and including IFRIC12(2) Like for like growth of +0.7%
� WATER: stable revenue but pursuit of EBITDA growth� Stable Revenue : volumes still down yoy despite warm summer, partially offset by price uptick� Improved volumes in Q3 (+0.7%), notably in the North of France but volumes YTD still down -0.7% (-1.5% June ytd)� Price effects: better indices : +0.7% (+0.6% in June 2018) vs. -0.2% in 9M 2017� Commerce : balance of contract renegotiation slightly negative
� EBITDA up driven by the impact of the restructuring plan (Osons 20/20) more than offsetting lower volumes and continued price costsqueeze
� WASTE : continued good volumes and commerce, partially offs et by lower recycled paper prices� Revenue up +1.7%� Volumes-Commerce:+4.3%: good incineration and strong landfill volumes� Recycled paper prices impact: -3.2% (-€55M)
� EBITDA down due to lower recycled paper prices (-€12M impact) and higher fuel cost (-€11M€ impact)
16VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Rest of Europe : Good performance in all regions
9M, 2017represented (1) 9M, 2018 ∆ ∆
At constant FX
6,104 6,518 +6.8% +7.0%(2)
2,050 2,188 +6.7% +5.7%
1,592 1,632 +2.6% +3.8%
1,764 1,967 +11.5% +12.0%
697 731 +4.8% +4.8%
In €M
Revenue o/w
Central & Eastern Europe
UK – Ireland
Northern Europe
Italy- Iberia
(1) Proforma IFRS 5 & 9 and including IFRIC 12(2) Like-for-like growth of +2.8% (3) At constant FX
� Central & Eastern Europe : good performance, despite advers e weather� Revenue : ENERGY : favorable price effects (mostly electricity), partly offset by adverse weather (-€37M impact) – WATER: tariff
increases (in Bulgaria and Romania mostly) & good summer volumes (+0.7%YTD) - Small acquisitions in WASTE
� EBITDA down due to higher energy cost and adverse weather in H1, partly offset by efficiency gains .
� UK- Ireland : Strong performance� Revenue : excellent plant operational performance of PFIs (94% availability vs. 92% in Sept. 2017), higher electricity prices, and
continued solid commercial activity. Overall limited YTD impact of recycled paper prices� EBITDA strongly up : impact of new contracts, excellent operational efficiency
� Northern Europe : Benefit of 2017 tuck ins in Sweden, Netherl ands and Germany in Waste partly offset by negativeimpact of lower recycled paper prices� Revenue : good integration of 2017 acquisitions, good waste volumes overall (+2.2%)� EBITDA up double digit despite lower paper prices, higher fuel costs, due to continued efficiency gains and very good operational
results of acquired companies
� Italy- Iberia : strong top-line growth and enhanced profita bility� Revenue growth driven by good commercial momentum in Spain and Italy, mostly in Energy efficiency� Profits are up , driven by the impact of restructuring plans in Italy and overall continued efficiency
17VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Rest of the world : Solid growth in all geographies
9M, 2017represented (1)
9M, 2018 ∆ ∆At constant FX
4,586 4,825 +5.2% +12.9%(2)
1,104 1,259 +14.1% +18.1%
538 590 +9.7% +30.2%
1,521 1,481 -2.6% +4.4% (+13.1% lfl)
750 782 +4.3% +13.2%
673 713 +5.9% +9.6%
In €M
Revenue , o/w
Asia
Latin America
North America
Pacific
Africa Middle East
� Asia: continuation of strong growth with Revenue and EBITDA up double digit (3)
� China : Revenue up 13.5% (3) mostly from Waste projects (Hangzhou recycling, Hazardous waste incinerators, and landfills) – Harbin DHNextension partly offset at EBITDA level by higher coal costs. Pursuit of industrial projects in energy (biomass) and water.
� Japan : Revenue up 8% (3) : strong performance in EPC, and municipal water (e.g. Hamamatsu)
� Korea : Revenue up 16.1% (3) thanks to new industrial water contracts and higher waste volumes (landfill and recycling)
� Latin America: continued solid growth� Revenue & EBITDA strongly up : tariff increases, new contracts in Argentina, Columbia, Chile, and benefit of Grupo Sala in Columbia since
May delivering above plan
� North America : very good 2018 year� Revenue up +13.1% lfl driven very strong growth in ENERGY (+27%(3)) due to excellent heating season in Q1, new contracts in energy
efficiency (notably Du Pont), and the running of the 3 biomass facilities in Canada; strong WASTE (+7.5% excl. the IS divestiture) driven bygood volumes and prices in regeneration services and toxic waste; WATER is up +8.5%(3) (both industrial and municipal)
� EBITDA growth mostly driven by energy outperformance and efficiency gains
� Pacific: strong revenue & EBITDA growth :� New assets (Woodlawn MBT) and tuck-ins in Waste
� Africa Middle East : solid growth fueled by new contracts in Middle East and good volumes in Morocco
18VEOLIA KEY FIGURES SEPTEMBER 30, 2018
(1) Proforma IFRS 5 & 9 and including IFRIC 12(2) Like-for-like growth of +11.9% (3) At constant FX
Global Businesses: Strong hazardous waste and improved construction
9M, 2017represented (1)
9M, 2018 ∆ ∆At constant FX
3,240 3,331 +2.8% +4.6%(2)
2,069 2,005 -3.1% -0.8%
757 827 +9.3% +9.5%
414 499 +20.6% +22.2%
In €M
Revenue o/w
Construction
Hazardous Waste
Other (o/w VIGS)
(1) Proforma IFRS 5 & 9 and including IFRIC 12(2) Like-for-like growth of +3.2% (3) At constant FX
� Construction : marked improvement in Q3 (+10% (3) vs. -5.7% (3) in H1)� Rebound of VWT , up +3.2% (3) in Q3 (after -10.1%(3) in H1), with a backlog of €1,884M (+4% vs. Sept. 2017) . Oil& gas bookings
are back and desalination projects are expected by year end.� SADE : strong growth of +20% in Q3 (flat in H1) mostly in France & in Telecom activity
� Hazardous waste : continued strong growth: +9.5% (3) ytd� Revenue driven by strong commercial momentum, higher volumes, solid lubricant recycling business
� EBITDA up double digit driven by revenue evolution and continued efficiency gains
� Other includes notably VIGS (multi utility industrial contracts in Europe), up 13% (3) ytd to €331M due to goodvolumes and new contracts (e.g. Arcelor Mittal in Fos)
19VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Current EBIT: +9.8% at constant FX Much lower impact from provision reversals
20
In €M9M2017
published
9M2017 represented
9M2018 Δ vs. 9M2017 represented
Δ vs. 9M2017 represented at
constant FX
EBITDA 2,359 2,301 2,418 +5.1% +6.9%
Renewal expenses -207 -201 -201
Depreciation & Amortization (including principal payments on OFAs(1))
-1,255 -1,227 -1,233
Provisions(2) , fair value adjustment & other(3) +76 +75 +27
Share of current net income of joint ventures and associates
+76 +76 +89
Current EBIT 1,049 1,024 1,100 +7.4% +9.8%
(1) Repayment of OFA: -€92M in 9M,2018 vs. -€120M in 9M,2017 represented(2) Provisions :• In 9M 2017 : net reversals of self insurance provisions and of pension provisions on top of landfill site remediation provisions
reversals• In 9M 2018 : landfill provisions reversals partly offset by a few asset depreciations(3) Other include industrial capital gains for €4.8M in 9M2018 vs. €9.4M in 9M2017 represented
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
o Cost of net financial debt down €11M to €301M : benefits from active debt management partly offset by non-euro denominated debt
� Cost of net borrowing down from 5.02% to 4.13%
o Other financial income and expense includes non cash charges related to the discounting back of provisions (-€20M) and interest (cash) on concession liabilities of -€71M (stable Y-Y)
o Net financial capital gains of €31M : include Industrial Services capital gain in Q1 partly offset by a few fair value adjustments on pending sales
o Current tax rate of 24.3%
Current net income up 20.0% (+18.1% excl. capital gains) at constant FX vs. September 2017
21
In €M9M2017
Published9M2017
represented9M2018 Δ vs. 9M2017
represented at constant FX
Current EBIT (1) 1,049 1,024 1,100 +9.8%
Cost of net financial debt -314 -312 -301
Other financial income and expense -117 -116 -111
Net capital gains on financial divestitures +15 +15 +31
Income tax expense -138 -127 -158
Non-controlling interests -89 -89 -103
Current net income – Group share 406 396 457 +20.0%
Current net income – Group shareExcluding net financial capital gains(2)
392 382 439 +18.1%
(1) Including the share of current net income of joint ventures and associates of entities viewed as core Company activities(2) Including related taxes and minorities
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Capex up 8% in Q3 to fuel top line growth
22
o Gross industrial capex up 15% , in line with commercial development
� Maintenance capex stable : €467M (2.5% of revenue) vs. €465M
� Growth Contractual Capex up to €465M from €390M
� Discretionary capex sharply up to €202M mostly in Asia : new industrial contracts in Korea, toxic waste in Singapore, DHN extension in China (Harbin), mobile water treatment units (VWT)…
o Net financial debt of €9,075M, and €10,527M after hybrid repayment
� Down vs June 2018 (including Q3 favorable FX of €36M) with -€283M in net financial acquisitions over the 9M vs. -€303M in H1
�9M 2018: -€678M of acquisitions (o/w Grupo Sala and Indian hazardous waste) and +€395M of divestures (o/w IS in the US for +€96M and 25% in BVAG for €146M)
� Up vs. December 2017 due to impact of WCR seasonality
(1) Net free cash flow corresponds to the free cash flow of continuing operations, i.e. the sum of EBITDA, dividends received, operating cash flow from financing activities, and the variation of operating working capital, less net industrial investments, net interest expense, tax expense, restructuring charges, other non current expenses and renewal expenses.
856 932
126202
9M2017 repr. 9M2018Maintenance and contractual capex Discretionary growth capex
9821,134in €M
in €M
Gross Industrial Capex (€M)
Net Free Cash Flow (€M)
o Net FCF(1) of -€298M
� -€321M in June 2018
� Compared to Sept. 2017 , higher net capex (€1,112M vs. €929M) , higher cash restructuring charges and others (due to French water departure plan) and higher WCR (-€789M vs. -€672M in Sept. 2017) due to revenue evolution and increased coal inventory in CEE (price and volume related)
� Excluding seasonal WCR variation, net FCF amounted to +€491M in 9M2018
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
10,609 10,527
Net Financial Debt at September includes -€1,452M o f hybrid repayment and -€789M of negative seasonal WCR
23* Financial investments of -€678M net of financial divestitures of +€395M
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Net FCF excl.WCR seasonal variation : +€ 491M
2018-2019 outlook fully confirmed
24
(1) At constant exchange rates (based on rates at the end of 2016)
� 2018 objectives (at constant exchange rates): �Continuation of sustained revenue growth�EBITDA growth greater than that of 2017�More than €300M in cost savings
� 2019 objectives (1): �Continuation of revenue growth and full impact of c ost savings�EBITDA between €3.3Bn and €3.5Bn (excluding IFRIC 1 2), i.e. between €3.5Bn
and €3.7Bn including IFRIC 12
� Dividend growth in line with that of current net in come
� 2018 objectives (at constant exchange rates): �Continuation of sustained revenue growth�EBITDA growth greater than that of 2017�More than €300M in cost savings
� 2019 objectives (1): �Continuation of revenue growth and full impact of c ost savings�EBITDA between €3.3Bn and €3.5Bn (excluding IFRIC 1 2), i.e. between €3.5Bn
and €3.7Bn including IFRIC 12
� Dividend growth in line with that of current net in come
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix
Appendix 1: Main represented figures (1) for the nine months-ended September 30, 2017
26
(1) Non audited figures
(2) Including the represented share of current net income of joint ventures and associates for the nine months-ended September 30, 2017
(3) In order to ensure the comparability of periods, the published accounts for the nine months-ended September have been represented for the reclassification of the Group’s activities in Gabon into “Net income (loss) from discontinued operations” in accordance with the application of the IFRS 5 standard.
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 1: Main represented figures for the nine mon ths-ended September 30, 2017 (1) - Revenue by segment
27
(1) Non audited figures
September
2017
IFRS 5
Adjustment
IFRS 9
Adjustment
September
2017
published represented
France 4,036.8 0.0 0.0 4,036.8
Europe excluding France 6,103.8 0.0 0.0 6,103.8
Rest of the World 4,815.5 -229.6 0.0 4,585.9
Global businesses 3,240.0 0.0 0.0 3,240.0
Other 24.8 0.0 0.0 24.8
Revenue 18,221.0 -229.6 0.0 17,991.4
In €m
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 2: Currency movements
28
Main currencies
1 € = xxx foreign currency 9M 2018 9M 2017 ∆ 9M2018 vs. 9M2017
US dollarAverage rateClosing rate
1.1951.158
1.1131.181
6.8%-2.0%
UK pound sterlingAverage rateClosing rate
0.8840.887
0.8730.882
1.3%0.6%
Australian dollarAverage rateClosing rate
1.5771.605
1.4531.508
7.8%6.1%
Chinese renminbi yuanAverage rateClosing rate
7.7777.983
7.5637.855
2.8%1.6%
Czech crownAverage rateClosing rate
25.57325.731
26.55425.981
-3.8%-1.0%
The average rate applies to the income statement and the cash flow statementThe closing rate applies to the balance sheet
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 3: Quarterly revenue by segment
29
1st quarter 2018 2 nd quarter 2018 3 rd quarter 2018
In €M
2017represented
2018
∆ at cst FX ∆ at cstscope &
FX2017
represented
2018
∆ at cstFX
∆ at cstscope &
FX 2017represented
2018
∆ at cstFX
∆ at cstscope &
FX
France 1,303 1,311 +0.6% +0.7% 1,361 1,345 -1.1% -1.3% 1,373 1,409 +2.6% +2.5%
Europe excl. France 2,275 2,443 +6.9% +3.3% 1,959 2,074 +6.7% +1.6% 1,870 2,001 +7.4% +3.5%
Rest of the World 1,569 1,612 +14.7% +14.4% 1,498 1,579 +13.2% +11.6% 1,518 1,634 +10.7% +9.7%
Global Businesses 1,037 1,045 +3.5% +2.6% 1,167 1,140 -0.6% -2.3% 1,036 1,146 +11.4% +10.1%
Other 7 8 - - 10 7 - - 7 7 - -
Group 6,191 6,419 +7.0% +5.4% 5,995 6,145 +5.1% +2.6% 5,805 6,197 +7.8% +6.0%
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 4: Quarterly revenue by business
30
1st quarter 2018 2 nd quarter 2018 3 rd quarter 2018
In €M2017
represented2018
∆ at cstFX
∆ at cstscope &
FX2017
represented2018
∆ at cstFX
∆ at cstscope &
FX2017
represented2018
∆ at cst FX ∆ at cstscope &
FX
Water 2,554 2,562 +3.5% +3.8% 2,702 2,625 -0.7% -1.2% 2,574 2,715 +6.0% +6.2%
Waste 2,155 2,268 +9.6% +4.3% 2,223 2,420 +12.0% +6.0% 2,263 2,407 +7.9% +4.1%
Energy 1,483 1,589 +9.0% +9.9% 1,070 1,100 +5.3% +5.2% 968 1,075 +12.4% +10.2%
Group 6,191 6,419 +7.0% +5.4% 5,995 6,145 +5.1% +2.6% 5,805 6,197 +7.8% +6.0%
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
3 520 3 763
6 642 7 095
7 8297 903
9M2017represented
9M2018
Appendix 5: Continued rebound in revenue: up 6.6% a t constant FX to €18,761M : Analysis by business
31
REVENUE IN €M
18,761
Variations vs. 9M2017 represented
∆∆ constant
FX∆ constant FX
& scope
Water +0.9% +2.9% +2.9%
Waste +6.8% +9.8% +4.8%
Energy +6.9% +8.8% +8.5%
Total +4.3% +6.6% +4.7%
17,991
* Including energy prices for BVAG** Excluding Works
•• Water : +2.9% at constant FX, ( +2.9% at constant scope & FX)� Volumes/commerce: +0.3%**o France: volumes down 0.7% ytd (vs. -1.5% at June end); good commercial momentum o Central Europe: volumes up 0.7% o Continued robust commercial momentum in Rest of the World
� Price effects* (+1.3%) : Indexation of +0.7% in France & higher tariffs in Roumania & Bulgaria; higher energy prices at BVAG in Germany
� Construction (+1.2%): Solid construction activity, in ROW mostly (Pacific, Middle East) and pick up of VWT and Sade in Q3
• Strong growth in Waste: +9.8% at constant FX (+4.8% at constant scope & FX) � Scope: +5.0%: acquisitions in Germany, Sweden & Asia in 2017 partly offset in 2018 by the divestiture of Industrial
Services in the US (-€130M)� Strong Volumes & Commerce : +4.0%** o Continued growth in volumes: in France (+4.3%), Rest of World (USA, Asia, Amlat, Pacific) and hazardous wasteo Commerce: strong renewal rate and contract awards
� Price effects: +1.6% mainly in Latin America, Asia and the UK� Decrease in recycled prices (-1.4%)
• Rebound in Energy Services : +8.8% at constant FX (+8.5% at constant scope & FX) � Scope: (+0.3%) : divestiture of FM activities in Sweden offset by tuck ins in Asia notably� Negative weather impact: -€25M (-0.7%) in CEE in Q2 (partly offset by a cold Q1 in the US)� Volumes / Commerce: (+4.8%**) : higher volumes of energy sold in Central Europe, start of new energy contracts
in the US, Canada, Spain etc… and new industrial energy efficiency contracts (VIGS)� Price effects (+1.9%) : mostly heat and electricity prices strongly up in the US in Q1 and higher electricity prices in
Poland
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 6: Waste – Breakdown of revenue by activity
32
Overall waste revenue breakdown by activity stable compared to 9M17.
9M2017 revenue: €6,641M 9M2018 revenue: €7,095M
14%
19%
19%11%
9%
20%
8%15%
19%
18%10%
8%
20%
10%Municipal Collection & StreetCleaning
Commercial & IndustrialCollection
Sorting & Recycling MBT
Energy Recovery(Incineration)
Landfill
Hazardous & Liquid Waste
Industrial Services / Waste
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 7: Quarterly waste revenue and volumes
33
Quarterly revenue growth at constant scope & FX
Y-Y Quarterly volume trends
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 8: Waste – Revenue vs. Industrial Productio n
34
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: Till August 2018 Data from OECD for all the countries - September 2018: same figures as August 2018 except for the US (OECD)
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 9: Recycled paper prices : a limited, but continued negative impact
o Chinese ban : Sharp decline of Paper and cardboard prices due to a higher selection of paper grades since January 2018.o Temporary oversupply in Europe => pressure on priceso China has released new import quotas in April o Prices have stabilized since April
o Limited Veolia exposureo Limited export volumes to Chinao Our recycled papers comply with Chinese criteria
o Continued negative impact in Q3 due to continued ri sing prices through Q3 in 2017o Average market price decline of -41% in France(1) & -53% in Germany(2)
o Average Veolia selling price decline of 28%o Revenue impact : -€119M (-€54M in France, -€41M in Germany, -€24M in the UK)o EBITDA impact : -€18M (o/w -€12M in France)
35
(1) Average French Copacel paper (ref 1.05) price of €78/T vs. 131€/T in 9M2017 (-41%) – Average 2017 price of €126/T(2) Average German EUWID paper price of €37/T vs. € 78€/T in 9M2017 (-53%) – Average 2017 price of €75.7/T
9,040
1,023495 200
Breakdown of Waste Revenues (2017, in €M)
o/w Sorting &Recycling(Services)o/w Sale ofRecycledPapersOtherRecyclates
… Recycled paper account for less than 2% of the Gro up’s Revenue and less of the Group’s EBITDA*
*In 2017
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 11: Recycled paper : market prices (1/2)
36
France
Germany
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Appendix 11: Recycled paper : market prices (2/2)
37
Long term evolution of paper and cardboard prices (€/T - France)
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
SUSTAINABLE DEVELOPMENT
2020 roadmap:2017 results
38
SUSTAINABLY MANAGE NATURAL RESOURCES BY SUPPORTING THE CIRCULAR ECONOMY
BUILD NEW MODELS FOR RELATIONS AND VALUE CREATION WITH OUR STAKEHOLDERS
GUARANTEE A HEALTHY AND SAFE WORKING ENVIRONMENT
CONTRIBUTE TO COMBATING CLIMATE CHANGE
CONTRIBUTE TO LOCAL DEVELOPMENT
ENCOURAGE THE PROFESSIONAL DEVELOPMENT AND COMMITMENT OF EACH EMPLOYEE
PROMOTE AN ECO-FRIENDLY APPROACH TO CONSERVE BIODIVERSITY
SUPPLY AND MAINTAIN SERVICES CRUCIAL TO HUMAN HEALTH AND DEVELOPMENT
GUARANTEE RESPECT FOR DIVERSITY AND HUMAN AND FUNDAMENTAL SOCIAL RIGHTS WITHIN THE COMPANY
Our 9 commitments for sustainable development
1
4
7
2
5
8
3
6
9
39VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Our commitments for sustainable development2020 roadmap: 2017 results (1/3)
40
SUSTAINABLY MANAGE NATURAL RESOURCES BY SUPPORTING CIRCULAR ECONOMY
2020 TARGET:
Achieve €3.8 billion in circular economy related revenue.
2017 PERFORMANCE:
€4.4 billion .
2020 TARGET:
. Achieve 100 million metric tons CO2 equivalent of reduced emissions and 50 million metric tons CO2equivalent of avoided emissions for the period spanning from 2015 to 2020.
. Capture over 60% of methane from the landfills we operate.
2017 PERFORMANCE:
. 44 million metric tons CO2equivalent reduced and 18 millionmetric tons CO2 equivalent avoided, since 2015.
. 51% of methane captured.
2020 TARGET:
Carry out a diagnosis and deploy an action plan in 100% of sites with significant biodiversity issues.
2017 PERFORMANCE:
Diagnosis and action planin 54% of the sites identified.
CONTRIBUTE TO COMBATING CLIMATE CHANGE
PROMOTE AN ECO-FRIENDLY APPROACH TO CONSERVE BIODIVERSITY
RESOURCING THE PLANET1 2 3
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Our commitments for sustainable development2020 roadmap: 2017 results (2/3)
41
2020 TARGET:
Have entered into a major partnership based on value creation in each zone and each growth segment.
2017 PERFORMANCE:
Examples of major partnerships signed: Danone, IBM, Huawei, Livelihoods, CCSL, Swiss Re .
2020 TARGET:
Maintain above 80% the percentage of Veolia’s spending reinvested locally.
2017 PERFORMANCE:
85.4% (average calculated for the principal areas representing 71% of 2017 revenue).
2020 TARGET:
Contribute to the United Nations sustainable development goals, as we did to the Millennium Development Goals.
2017 PERFORMANCE:
7.9 million people connected to a drinking water supply and more than 3.54million to a sanitation service(1)
BUILD NEW MODELS FOR RELATIONS AND VALUE CREATION WITH OUR STAKEHOLDERS
CONTRIBUTE TO LOCAL DEVELOPMENT
SUPPLY AND MAINTAIN SERVICES CRUCIAL TO HUMAN HEALTH AND DEVELOPMENT
RESOURCING THE REGIONS4 5 6
(1) Since the definition of the Millenium Development Goals in 2000, the Group has helped 7.9 million people (703,535 in the year 2017) in developing and emerging countries to obtain access to drinking water and connected 3.54 million (232,435 in 2017) to sanitation services VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Our commitments for sustainable development2020 roadmap: 2017 results (3/3)
42
2020 TARGET:
Achieve an accident at work frequency rate of 6.5 or less.
2017 PERFORMANCE:
Frequency rate: 9.55
(Frequency rate wasreduced from 15.02 in 2011 to 11.02 in 2015)
2020 TARGET:
. Provide training to over 75%of employees every year.
. Maintain management’s commitment rate at over 80%.
2017 PERFORMANCE:
. 72% of employees have undergone training.
. Manager commitment rate: 86%.
2020 TARGET:
Achieve 95% of employees with access to social dialogue devices.
2017 PERFORMANCE:
Over 89% of employees covered by social dialogue arrangements.
GUARANTEE A HEALTHY AND SAFE WORKING ENVIRONMENT
ENCOURAGE THE PROFESSIONAL DEVELOPMENT AND COMMITMENT OF EACH EMPLOYEE
GUARANTEE RESPECT FOR DIVERSITY AND HUMAN AND FUNDAMENTAL SOCIAL RIGHTS WITHIN THE COMPANY
VEOLIA’S PEOPLE7 8 9
VEOLIA KEY FIGURES SEPTEMBER 30, 2018
Contacts
43
http://www.finance.veolia.com http://www.veolia.com
Analyst & Investor Relations
Ronald Wasylec
Senior Vice President, Investor Relations
Telephone : +33 1 85 57 84 76
e-mail : [email protected]
Ariane de LamazeVice President, Investor Relations
Telephone : +33 1 85 57 84 80
e-mail : [email protected]
30, rue Madeleine Vionnet
93300 Aubervilliers, France
Media Relations
Laurent Obadia
Telephone : +33 1 85 57 89 43
e-mail: [email protected]
Sandrine Guendoul
Telephone : +33 1 85 57 42 16
e-mail: [email protected]
30, rue Madeleine Vionnet
93300 Aubervilliers, France
VEOLIA KEY FIGURES SEPTEMBER 30, 2018