Key figures for the period ending September 30, Conference call November 5, 2015 Philippe Capron, CFO

Transcription

1 Key figures for the period ending September 30, 2015 Conference call November 5, 2015 Philippe Capron, CFO

2 Disclaimer 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 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 ( 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 2

3 9M 2015 Highlights Continued strong commercial wins Marked improvement in revenue growth at constant scope and FX -1.4% in Q1, -1.2% in Q2 and +1.7% in Q3 Very strong 9M results, showing the benefits of continued significant cost cutting FY target of 750M gains already achieved Doubling of current net income to 410M Asset arbitrage: 363M of divestitures at Sept.30 Including the Q3 divestiture of our minority stake in one Chinese water concession in Changle for 46M ( 13M capital gain) Annual guidance confirmed 3

4 Zoom on selection of major successes as of Q Municipal Market Q2 Hampshire County Council, UK Extension of the Integrated Contract to 2030, solid waste Duration: 5 years Total new backlog: 743M Q3 City of San Diego, USA WWTP renewal Duration: 5 years Total new backlog: 40M Q2 New Orleans, USA WWTP renewal Duration: 10 years Total new backlog: 122M Q2 Southend on Sea Borough Council, UK Collection of household waste, Street cleaning, waste transfer station, and management of 2 HWRC sites Duration: 15.5 years Total new backlog: 211M Q3 BORÅS, Sweden WWTP D&B Water solutions Total new backlog: 21 M Q3 Cap Atlantique, France Waste water concession Duration: 8 years Total new backlog: 44M Q3 SIL Rochefort, France Syndicat intercommunautaire du littoral, waste to energy Duration: 12 years Total new backlog: 105M Q2 SIAAP, France Clichy Rain Water D&B Water solutions Total new backlog: 66M Q2 Lille Métropole, France Water Concession / Public Service Delegation Duration: 8years Total new backlog: 456M Q2 Montería Water Concession, Colombia Scope expansion, Duration: 10 years Total new backlog: 226M Q2 EDG, Guinea Management contract, energy efficiency Duration: 4 years Total new backlog: 11M Q2 SPC Bahwan, Oman SWRO Extension Water Solutions, D&B, networks Total new backlog: 69M Q3 NSROC, Australia Solid waste Traditional services Duration: 10 years Total new backlog: 69M 4

5 Zoom on selection of major successes as of Q Industrial & Commercial Market Q3 Bristol Myers Squibb, Europe O&M Bundled services Duration: 5 years Total new backlog: 85M Q1 Hydro Quebec, Canada Lease & Operation Agreement for data center Duration: 20 years Total new backlog: 66M Q2 Mayo Renewable Power, Ireland Biomass CHP Duration: 15 years Total new backlog: 450M Q2 Q2 Locum, Sweden Stockholm South hospital & Danderyds hospitals O&M and energy efficiency services Duration: 5 years Total cumulated new backlog: 43M Norilsk Nickel, Finland DBFO biofuel steam boiler Performance contract Duration: 10 years Total new backlog: 119M Q3 Antero Resources, USA Oil & Gas upstream Design & Build wastewater treatment + services Total new backlog: 214M (D&B) + 143M (O&M) Q3 Fibria Horizonte, Brazil Water Solutions, D&B, networks Total new backlog: 42M Q2 Modec International LLC, Brazil D&B, Water solutions Total new backlog: 22M Q3 BEE Power Ghent, Belux Biomass plant Performance contract Duration: 15 years Total new backlog: 150M Q1 LiuGuo Chemical, China Industrial WasteWater Contract expansion Complex issues solutions Duration: 20 years Total new backlog: 60M Q2 ConocoPhillips, Australia Provide recycling, liquid and Hazardous waste for onshore and offshore services renewal Duration: 4 years Total new backlog: 35M 5

6 Strong 9M results Revenue of 18,288M, up 6.1% (+2.4% at constant FX) Pro forma (1) : -0.3% at constant scope & FX (vs. a decrease of -1.3% at June 30) EBITDA of 2,148M, up 14.1% (+10.5% at constant FX) Pro forma (1) : Increase of 6.4% at constant scope & FX Current EBIT of 942M, up 32.3% (+26.2% at constant FX) Pro forma (1) : Increase of 23.5% at constant scope & FX Current net income doubled to 410M Strong improvement in net FCF vs. pro forma Sept. 2014: - 12M vs M Net financial debt of 8,977M, down 365M excluding exchange rate impacts vs. Sept ( 8,909M) FX impacts (vs. pro forma 9M 2014) % M Revenue +3.7% 649 EBITDA +4.0% 79 Current EBIT +6.8% 48 Net debt vs. GAAP Dec % -375 Net debt vs. GAAP Sept % -433 (1) Pro forma scope: excluding Dalkia France and with Dalkia International fully consolidated during the first half of

7 Very strong results, continued steady EBITDA growth In M 9M 2014 re-presented (1) 9M 2015 Var. yoy constant FX and scope Revenue 17,241 18, % +2.4% (2) Pro forma Revenue 17,763 18, % -0.3% EBITDA 1,882 2, % +10.5% (2) Pro forma EBITDA 1,952 2, % +6.4% Pro forma EBITDA margin 11.0% 11.7% +70bp +70bp Current EBIT (3) % +26.2% (2) Pro forma Current EBIT (3) % +23.5% Current Net Income X 2 Pro forma gross industrial Capex Net FCF (4) Net financial debt 8,909 8,977 (1) 2014 figures are re-presented for IFRS 5 (the representation associated with IFRS 5 only applies to the income statement: see Appendix 2) and IFRIC 21 (2) Variation at constant FX (3) Including the share of current net income of joint ventures and associates of entities viewed as core Company activities (excluding Transdev, which is not viewed as a core Company activity) (4) Net FCF before net financial divestments and after payment of financial expense and taxes corresponds to free cash flow from continuing operations, and is calculated by: the sum of EBITDA, dividends received from joint ventures, operating cash flow from financing activities, and changes in working capital for operations, less net industrial investments, current cash financial expense, cash taxes paid, renewal expenses and restructuring charges. 7

8 Revenue growth of 6.1% (1) : Good performance in emerging markets REVENUE IN M 17,763 18, Revenue of 18,288M, up 3.0% vs pro forma 9M 2014 Favorable FX impact of 649M Slight revenue decline in France Water: Revenue down 4.0% due to commercial impacts (- 98M) and very moderate tariff indexation (+0.3%); strong volumes due to warm Q3 (+1.4% ytd) Waste: Revenue up 0.7% : Contract wins offset lower landfill volumes and lower recyclate prices and volumes Europe excluding France: Revenue -1.7% at constant scope & FX : -0.4% in Q3, after - 0.7% in Q2 & -3.5% in Q1. UK revenue -3.6% at constant scope & FX (construction revenue - 58M). Germany -6.9% at constant scope & FX (lower C&I volumes in Waste & lower energy prices). Steady growth in Central & Eastern Europe : +2.4% constant scope & FX Rest of the World: continued good performance : +4.8% at constant scope & FX (+7.7% in Q3, after +4.5% in Q2 & +2.4% in Q1) - USA affected by lower energy prices; +16.6% organic growth in China and +17.1% in Latin America Global businesses: -2.2% at constant scope & FX (flat in Q3 after -7.9% in Q2) Hazardous waste : negative impact of the decline in oil prices. VWT : lower construction revenue (end of HKS) - Recovery in orders since April : bookings up 17% y-o-y, with the Antero contract in particular ( 214M, Oil & Gas /US) => backlog: 2.5bn at Sept. 30, 2015, vs. 2.4bn at Sept Pro forma 9M 2014 re-presented (2) 9M 2015 (1) At current consolidation scope and FX, vs 9M 2014 GAAP (2) See Appendix 2 Variations vs. pro forma 9M 2014 at constant scope & FX France -1.7% -1.9% Europe excl. France +1.3% -1.7% Rest of the World +13.5% +4.8% Global businesses +1.5% -2.2% Total +3.0% -0.3% 8

9 Revenue: Improved performance since Q2 1 st quarter 2 nd quarter 3 rd quarter Pro forma variations at constant scope & FX at constant scope & FX at constant scope & FX France -3.6% -1.6% -0.5% Europe excluding France -3.5% -0.7% -0.4% Rest of the World +2.4% +4.5% +7.7% Global businesses +2.1% -7.9% -0.1% Total Group -1.4% -1.2% +1.7% Group excluding Global Businesses -2.1% +0.5% +2.1% Improved performance in Q3 in all zones : Volumes : favorable volume evolution in water in Q3 (France, CEE) Commercial wins in Latam and Asia notably offset continued contractual erosion in French water Stabilization of construction revenue in Q3 Favorable price evolution (water in CEE, water in Morocco, LATAM etc.) Negative energy price impact in Q1 & Q2 stopped in Q3 9

10 Revenue bridge FX effects: +3.7%: mostly US $ and Good Volume / commerce impact (excluding French water contract renegotiation) : + 193M (+1.1%) Volumes : favorable volume evolution in water in Q3 (France, CEE), in energy volumes (USA, China, CEE, Africa Middle East) offset persistent difficult trends in solid waste (Germany, Australia) Strong commercial momentum outside France (Asia, Latam) Stabilization of construction revenue in Q3 Continued positive price indexation (excluding energy & recyclates) :+ 112M (+0.6%) Favorable price indexation in water in CEE, water in Morocco, LATAM Negative energy price impact in Q1 & Q2 stopped in Q3 10

11 Resilience in Waste: Revenue +2.3% 9M 2015 Raw materials volumes and prices -0.3% Volumes/ activity levels +0.6% Service price increases +0.6% Other (including construction revenue) -1.5% Currency effect +4.4% Scope effect -1.5% France: Stable revenue ( 1.9bn, +0.7% at constant scope) and EBITDA : contract wins, cost reductions and lower fuel costs offset lower landfill volumes and recyclate volumes and prices. Raw material prices: continued recovery in paper prices in Q3, but new sharp decline of scrap metal since July (-24% in Q3 YOY, and -15,6% over the 9-month period) United Kingdom: Stable revenue at constant scope and FX excluding construction revenue Good performance of Commercial and Municipal segments PFI: Leeds construction on track PFI: availability of facilities above target and prior year Germany: Revenue decline of 4.2% at constant scope: continued contract portfolio optimization, and pressure on recycled raw material prices : the positive trend reversal in Q2 has been partially reversed in Q3, with a new decrease expected in Q4 11

12 Steady EBITDA growth: EBITDA up 6.4% on PF 2014 vs. +6% at June end (1/2) EBITDA of 2,148M, up 6.4% at constant scope & FX vs. pro forma 9M 2014 Favorable impact of cost savings: + 164M (9 months) Stability in France: Water: stable EBITDA achieved through cost reductions, despite continued negative commercial effects o Very good Q3 volumes offset negative price effect (indexation down to +0.3%) o Contract renegotiations: - 60M to-date (Marseille, Lyon, Nice ) o Restructuring: voluntary departure plan completed Waste: stable EBITDA : contribution of cost saving plans, decrease in fuel prices and favorable impact of a litigation payment offset by the impact of lower landfill volumes and drop in scrap metal prices Continued growth in Europe particularly in Central and Eastern Europe (significant cost reductions) Strong growth in the Rest of the World : United States: good performance in the Municipal and Commercial segment (strong efficiency gains offset lower spark spreads of cogeneration facilities) In the Industrial segment, strong hazardous waste and cost cutting plans offset reduced Industrial Services activity Very strong growth in emerging markets (Latin America, China, Africa Middle East) Global businesses impacted by decline in oil prices Favorable FX impact of 79M 12

13 Continued steady EBITDA growth: EBITDA up 6.4% on PF 2014 vs. +6% at June end (2/2) Volume/commerce : continued commercial erosion in French water, low volumes in waste, partly offset by the EBITDA impact of new contracts in Latam and Asia Positive impact of good water volumes in Q3 Positive price impact, net of cost inflation despite lower indexation: lower fuel and energy costs, efficiency measures Strong positive impact from cost cutting : + 164M, with in particular an SG&A cost decrease of 2.5% YOY (at constant VEOLIA KEY scope, FIGURES AS FX OF SEPTEMBER and method), 30, 2015 or a 55M net gain 13

14 Cost savings ahead of objective: ~ 750M in savings already achieved as of Sept. 30, M in gross savings in 3Q, 2015 Impact on EBIT before IFRS 10 & 11 ( M) H H H H H H Cumul end 2014 H Q 2015 Cumul end Sept Objective Gross savings % 5% 12% 49% France Europe excl. France Corporate 9% 8% 1% 2% 4% Purchasing 25% Organizational Efficiency Adressing loss making contracts Technical optimization Rest of the world IT 19% Global business 51% Reduction of external expenses Other 14

15 Significant growth in Current EBIT : + 32% In M Pro forma 9M 2014 Represented (1) 9M 2015 vs. Pro forma 9M 2014 vs. Pro forma 9M 2014 at constant scope & FX EBITDA 1,952 2, % +6.4% Renewal expenses Reimbursement of OFAs Depreciation & Amortization* -1,035-1,022 Provisions, fair value adjustments & other Share of current net income of joint ventures and associates (2) Current EBIT (3) % +23.5% (1) See Appendix 2 (2) Excluding capital gains on financial divestments (3) Including share of current net income of joint ventures and associates, excluding capital gains on financial divestments *-4.2% at constant FX o Current EBIT of 942M vs. pro forma 713M in 9M 2014, +23.5% at constant scope & FX Net charges for provisions and other: reversal of + 53M vs 0 for pro forma 9M 2014 Reduced risks in France (Olivet, tax provisions, etc..) 15

16 Doubling of current net income to 410M Current Net Income ( M) X 2 Lower cost of net debt due to bond buy backs, despite adverse FX impact Tax rate at 30% Current Net Income of 410M includes + 74M of capital gains (sale of Israel activities and Singapore plant divestiture) vs. + 57M at Sept pro forma, and - 16M of IFRIC 21 impact 16

17 Net FCF (1) improvement of 200M at Sept. 30, on the trajectory of the company s 2015 objective o Continued capex discipline: At constant FX, 107M reduction in gross industrial capex (of which - 74M in the UK) o Net FCF (1) improvement of 195M 9M 2015 net FCF of - 12M (WCR seasonality) 195M improvement compared to 9M 2014 due to EBITDA growth, capex control and reduced financial costs o Net financial debt of 8,977M Down 365M excluding negative FX impact of 433M compared to Sept Increase vs. December 2014 related to WCR seasonality (- 660M) and negative FX impact (- 375M) Net financial debt ( M) juin 14 sept. 14 déc. 14 mars 15 juin 15 sept. 15 (1) Net FCF before net financial divestments and after payment of financial expense and taxes corresponds to free cash flow from continuing operations, and is calculated by: the sum of EBITDA, dividends received from joint ventures, operating cash flow from financing activities, and changes in working capital for operations, less net industrial investments, current cash financial expense, cash taxes paid, renewal expenses and cash restructuring charges. 17

18 Asset arbitrage Asset arbitrage: 363M of divestitures as of Sept.30, yielding 74M in capital gains Activities in Israel: 197M net debt reduction in 2015* & 40M net capital gain Singapore District Cooling: 47M proceeds & 16M net capital gain In Q3, divestiture of our 49% stake in the Changle water concession (China), operated by Veolia since M in proceeds, yielding a 13M capital gain and a yearly return of 9% SADE : ongoing divestiture process Limited acquisitions: Buyout of the remaining 8% minorities in CEE water activities for 86M Tactical acquisitions: Altergis (energy efficiency in France) AKG (plastic recycling in the Netherlands) * 226m total debt reduction of which 29m already booked end

19 2015 Guidance confirmed Revenue growth EBITDA and Current EBIT growth Continued strong operational performance Cost savings benefit: continued execution of the 750M cost savings plan Continued capex discipline 2015 objective confirmed: the dividend and hybrid coupon payment to be covered by Current Net Income and paid by Free Cash Flow excluding net financial divestments Net financial debt under control Investor Day on Monday, December 14,

20 Appendices

21 Appendix 1: Currency movements Main currencies 1 = xxx of foreign currency US Dollar Average rate Closing rate UK pound sterling Average rate Closing rate Australian dollar Average rate Closing rate Chinese renminbi yuan Average rate Closing rate Czech crown Average rate Closing rate 9M M M 2015 vs. 9M % +11.0% +10.4% +5.0% +0.9% -10.4% +16.6% +7.8% +0.5% +1.1% The average rate applies to the income statement and statement of cash flows The closing rate applies to the balance sheet 21

22 Appendix 2: Main re-presented (1) GAAP 9M 2014 figures In M Figures presented under published scope (2) September 30, 2014 published IFRS 5 IFRIC 21 adjustment (3) adjustment September 30, 2014 Re presented Revenue 16, ,240.8 Adjusted operating cash flow 1, ,495.4 Adjusted operating income (4) Gross industrial investments Free cash flow Net financial debt 8, ,909 EBITDA N/A N/A N/A 1,882.2 Current EBIT N/A N/A N/A Current net income Group share N/A N/A N/A (1) Non audited figures (2) Published scope: including Dalkia France fully consolidated and Dalkia International consolidated by equity method during the first semester of 2014 (3) Reclassification of Morocco water operations into continuing operations (4) Including the share of adjusted net income of joint ventures and associates as of September 30,

23 Appendix 2: Main re-presented (1) pro forma 9M 2014 figures In M Figures presented under pro forma scope (2) September 30, 2014 published IFRS 5 adjustment (3) IFRIC 21 and other adjustments September 30, 2014 Re presented Revenue 17, ,763.2 Adjusted operating cash flow 1, ,645.9 Gross industrial investments EBITDA N/A N/A N/A 1,951.8 Current EBIT (4) N/A N/A N/A Current net income Group share N/A N/A N/A (1) Non audited figures (2) Pro forma scope: excluding Dalkia France and with Dalkia International fully consolidated from January 1, (3) Reclassification of Morocco water operations into continuing operations (4) Including the re presented share of adjusted net income of joint ventures and associates as of September 30,

24 Appendix 3: Pro forma quarterly revenue by business 1 st quarter 2 nd quarter 3 rd quarter In M at constant scope & FX at constant scope & FX 2014 Represented Represented Represented 2015 at constant scope & FX Water 2,623 2, % 2,760 2, % 2,762 2, % Waste 2,021 2, % 2,149 2, % 2,132 2, % Energy 1,503 1, % 955 1, % % Group 6,147 6, % 5,863 6, % 5,754 5, % 24

25 Appendix 4 : Improved revenue trends since Q2 - Good resilience in Waste REVENUE IN M 17,763 18, Revenue of 18,288M, up 3.0% vs pro forma 9M 2014 Favorable FX impact of 649M Water: +2.5% (-0.4% at constant scope & FX) Improvement in Q3 : +2.4% at constant scope and FX, after -0.1% in Q1 and -3.3% in Q2 Good summer volumes in France in Central and Eastern Europe; continued negative impact of contractual erosion in France; strong growth in Asia (o/w industrial water in China) and Australia (Hunter water, QGC) VWT: lower construction revenue but start up of HKS operations and recovery in orders since April Waste: +2.3% (-0.6% at constant scope & FX): good resilience quarter after quarter Volumes +0.6% and price +0.6% Good resilience in France and in the UK excluding construction Continuation of lower C&I volumes in Germany Lower recycled raw material prices ( -19M impact) Energy: +5.3% (+0.1% at constant scope & FX) of which -2.1% related to lower energy prices (no margin impact), and partially offset by +0.4% favorable weather (Q2) and good volumes in China and Central Europe. Improvement since Q2 : +4.1% at constant scope and FX in Q3, after +3.7% in Q2 and -4.4% in Q1, due to colder temperatures in Q2, good volumes in China and CEE, and reduced impact of energy prices in Q3 Pro forma 9M 2014 re presented (1) (1) See Appendix 2 9M 2015 Variations vs. pro forma 9M 2014 at constant scope & FX Water +2.5% -0.4% Waste +2.3% -0.6% Energy +5.3% +0.1% Total +3.0% -0.3% 25

26 Appendix 5: Reconciliation of old financial indicators with new financial indicators for 9M 2015 (1/2) Reconciliation Adjusted operating cash flow - EBITDA In M Re-presented September 2014 Published scope (1) Re-presented September 2014 Pro forma Scope (2) 30 Sept Adjusted operating cash flow 1, , ,762.7 Exclusion Renewal expenses Restructuring charges Acquisition & disposal costs Inclusion Principal payments on OFAs EBITDA 1, , ,148.0 Reconciliation Adjusted operating income Current EBIT In M (2) Pro forma scope: excluding Dalkia France and with Dalkia International fully consolidated from January 1, Re-presented September 2014 Published scope (1) Re-presented September 2014 Pro forma Scope (2) 30 Sept Adjusted operating income ,014.4 Exclusion Capital gains on financial divestments and disposal costs Impairments of tangible and intangible assets and OFAs IFRS 2 impacts Current EBIT (1) Published scope: including Dalkia France fully consolidated and Dalkia International consolidated by equity method during the first semester of

27 Appendix 5 : Reconciliation of old financial indicators with new financial indicators for 9M 2015 (2/2) Reconciliation of Adjusted Net Income Group Share to Current Net Income Group Share In M Re-presented September 2014 Published scope (1) Re-presented September 2014 Pro forma Scope (2) 30 Sept Adjusted Net Income Group Share Exclusion Impairments of tangible and intangible assets and OFAs IFRS 2 impacts Current Net Income Group Share (1) Published scope: including Dalkia France fully consolidated and Dalkia International consolidated by equity method during the first semester of 2014 (2) Pro forma scope: excluding Dalkia France and with Dalkia International fully consolidated from January 1,

28 Appendix 6 : IFRIC 21 Impacts at Sept.30 th, 2015 IFRIC 21 Impacts in M 9M 2014 Pro Forma EBITDA -14 Current EBIT -14 Current net income -13 IFRIC 21 Impacts in M 9M 2015 EBITDA -18 Current EBIT -18 Current net income

29 Appendix 7: Quarterly waste trends Y-Y Quarterly Revenue Trends at Constant Scope & FX Y-Y Quarterly Volume Trends 29

30 Appendix 8: Waste Revenue vs. Industrial production Weighted average industrial production indices for 4 key countries including SARP/SARPI: France, U.K. (excl. PFIs), Germany, and North America (excl. US Solid Waste from 2012 Sources : Until August 2015: OECD for all countries September 2015: OECD for France, Germany, and the UK, Federal Reserve for the US 30

31 Appendix 9: Waste Evolution of raw materials prices (paper, cardboard, scrap metals) Evolution of raw materials prices ( /t) Paper, carboard Scrap metals Cardboard (ref. 1.05) Paper (Ref. 1.11) Scrap Metals (E40) 31

32 Investor Relations contact information Ronald Wasylec Senior Vice President, Investor Relations Téléphone : e mail : ronald.wasylec@veolia.com Ariane de Lamaze Téléphone : Fax : e mail : ariane.de lamaze@veolia.com 38, avenue Kléber Paris France Terri Anne Powers Director of North American Investor Relations 200 East Randolph Street, Suite 7900 Chicago, IL Tel : +1 (312) Fax : +1 (312) e mail : terri.powers@veolia.com 32