NINE MONTH KEY FIGURES ENDING SEPTEMBER 30, 2015

(UNAUDITED IFRS FIGURES)
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Press release: NINE MONTH KEY FIGURES ENDING SEPTEMBER 30, 2015 (214.85 KB)

CONTINUED STRONG RESULTS GROWTH AND 2015 OBJECTIVES CONFIRMED
 

  • MARKED IMPROVEMENT IN THIRD QUARTER REVENUE 
  • EBITDA GREW 14.1% (+10.5% AT CONSTANT EXCHANGE RATES)[1] TO €2,148 MILLION
  • CURRENT EBIT INCREASED 32.3% (+26.2% AT CONSTANT EXCHANGE RATES)[2] TO €942 MILLION 
  • CURRENT NET INCOME DOUBLED TO €410 MILLION
  • 2015 CUMULATIVE COST SAVINGS OBJECTIVE ALREADY ACHIEVED AT THE END OF SEPTEMBER
  • CONFIRMATION OF 2015 OBJECTIVES

 
Antoine Frérot, the Group’s Chairman and CEO indicated: “Veolia has once again recorded strong results growth during the third quarter, including a return to organic revenue growth due to encouraging commercial successes. The first nine months of the year continued sustained growth in all of our results, with in particular a doubling of current net income.  This excellent performance, recorded now for the past two years is the successful translation into results of the significant transformation undertaken by Veolia. As a result, we confirm all of our 2015 objectives, ending a year which will close the initial phase of returning to profitable growth.  We will present our objectives for the 2016-2018 period during an Investor Day scheduled for December 14, 2015.”   

 
  • Return of positive organic revenue growth in the third quarter of 2015.

Nine months revenue increased 6.1%, or +2.4% at constant exchange rates from re-presented €17,241 million to €18,288 million for the period ended September 30, 2015.
On a pro forma basis[3], revenue increased 3.0% from €17,763 million for the nine months ended September 30, 2014, and was stable (-0.3%) compared to the prior year period at constant consolidation scope and exchange rates. Improvement was particularly strong in Q3 with growth of +1.7% at constant consolidation scope and exchange rates, after -1.2% in Q2 and -1.4% in Q1.
The favorable impact of exchange rate movements contributed to 3.7% revenue growth during the first nine months of 2015 (€649 million).
All segments experienced a marked improvement in revenue growth during the third quarter.

  • In France, nine months revenue declined by 1.9% at constant consolidation scope, while revenue was quasi-stable in Q3 at constant consolidation scope (-0.5%), after -1.6% in Q2 and -3.6% in Q1. For the first nine months, Water continues to be negatively impacted by contract renegotiations (-€98 million), partially offset by good volumes (+1.4%) and moderate price indexation (+0.3%). Waste revenue was stable in Q3, while growth was moderate at +0.7% for the first nine months of 2015. 
  • In the Europe excluding France segment, nine months revenue declined by 1.7% at constant consolidation scope and exchange rates, while revenue was stable in Q3 after Q1 was down 3.5% and Q2 declined -0.7%. Germany revenue declined by 6.9% at constant consolidation scope due to the decline in energy prices observed during the first half of 2015 and continued restructuring of the commercial portfolio in Waste operations. United Kingdom revenue declined by 3.6% at constant consolidation scope and exchange rates, similar to the first half of 2015, but continued to benefit from a favorable revenue mix given reduced revenue from low margin PFI construction activity (-€58 million). Excluding construction revenue, revenue was stable. Central and Eastern Europe revenue continues to have sustained momentum, with Q3 revenue growth of 4.4% at constant consolidation scope and exchange rates, following 1.6% growth in the first half of 2015.
  • The Rest of the World segment also recorded accelerated growth, with +4.8% growth for the nine months at constant consolidation scope and exchange rates after +3.4% in the first half of 2015, due to good performance in all geographic zones, particularly in Asia (China +16.6%), Latin America (+17.1%) and in Africa Middle East (+9.9%).
  • Global Businesses revenue was down 2.2% at constant consolidation scope and exchange rates for the nine months period, but was stable during Q3 given a return to growth in hazardous waste, despite the negative impact of the decline in oil prices, as well as in SADE activities. Revenue in the engineering business remains down (-3.9% for the nine months) due to the end of construction activity for the Hong Kong sludge treatment plant.  However, bookings increased by 17% compared to the end of September 2014.

 

  • Continued strong growth in EBITDA of 14.1% (+10.5% at constant exchange rates) to €2,148 million.

On a pro forma basis, compared to €1,952 million for the nine months ended September 30, 2014, EBITDA increased 10.1% (+6.4% at constant consolidation scope and exchange rates).

   
  • The favorable impact of exchange rate movements contributed to 4.0% growth in EBITDA (+€79 million) for the nine months ended September 30, 2015.
  • At constant consolidation scope and exchange rates, the strong growth in EBITDA was primarily driven by the impact of continued cost savings (benefit of €164 million for the first nine months of 2015), an increase in volumes and good commercial dynamics (net impact of €31 million) as well as favorable price effects (€37 million). Contract renegotiations in the French Water business negatively impacted EBITDA by €60 million.
  • By segment, and at constant consolidation scope and exchange rates: In France, EBITDA was stable.  In the Water business, cost reductions and volume growth in Q3 helped offset the impact of contract renegotiations at the EBITDA level. In the Waste business, cost savings and the decline in the price of fuel offset the impact of the reduction in volumes landfilled and lower scrap metal prices. In the rest of Europe and rest of the World, good growth momentum continued, in particular in Latin America, Central and Eastern Europe, North America and Asia. Performance in the Global Businesses segment remained penalized by the impact of the decline in oil prices.  

 

  • Current EBIT posted a significant increase of 32.3% (+26.2% at constant exchange rates) from re-presented €712 million for the first nine months of 2014 to €942 million.

On a pro forma basis, compared to €713 million for the first nine months of 2014, current EBIT increased 32.0%, or +23.5% at constant consolidation scope and exchange rates.

  • Current EBIT benefitted from a favorable exchange rate impact of €48 million.
  • Excluding foreign exchange effects, the strong growth in current EBIT was primarily driven by the strong growth in EBITDA. Depreciation and amortization expense was down slightly to €1,022 million (vs. pro forma €1,035 million for the first nine months of 2014). The contribution of the share of current net income from joint ventures and associates increased 11% to €81 million.

 

  • Current net income – Group share doubled to €410 million compared to pro forma re-presented €203 million for the first nine months of 2014.
    • Current net income benefitted from the continued decline of net financing costs.
    • It includes €74 million in capital gains for the first nine months of 2015, compared to €57 million for the prior year period, as well as a negative impact of €16 million related to implementation of the IFRIC 21 standard.

 

  • Net financial debt at September 30, 2015 amounted to €8,977 million compared to €8,909 million at September 30, 2014.
    • Net financial debt is up slightly compared to September 30, 2014, amounting to €8,977 million due to a negative currency impact of €433 million.  Excluding this impact, net financial debt would have declined by €365 million.

 

  • Improvement in net Free Cash Flow of €195 million
  • Net Free Cash Flow generated during the first nine months of 2015 improved by €195 million to -€12 million compared to pro forma -€207 million for the same period in 2014, due to strong growth in EBITDA and good capex discipline (industrial investments were €877 million in the first nine months of 2015 compared to pro forma €950 million for first nine months of 2014).

 
 

  • 2015 Objectives confirmed: 
    • Revenue growth
    • EBITDA and Current EBIT growth
      • Continued strong operational performance
      • Cost savings benefit: continued execution of the €750 million cost savings plan
    • Continued capex discipline
    • 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

 

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  • Investor Day scheduled for December 14, 2015
    • Veolia will present its strategic plan for 2016-2018 during an Investor Day scheduled for December 14, 2015.

 

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Definitions of all key financial indicators mentioned can be found at the end of this press release.
 
 

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Veolia group is the global leader in optimized resource management. With over 179,000 employees* worldwide, the Group designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries. Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and to replenish them. In 2014, the group Veolia supplied 96 million people with drinking water and 60 million people with wastewater service, produced 52 million megawatt hours of energy and converted 31 million metric tons of waste into new materials and energy. Veolia Environnement (listed on Paris Euronext: VIE) recorded consolidated revenue of €24.4 billion* in 2014. www.veolia.com
(*) 2014 pro-forma figures including Dalkia International (100%) and excluding Dalkia France
 
 
Important disclaimer
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 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.
 

CONTACTS

Group Media Relations
Laurent Obadia
Sandrine Guendoul
Tel : + 33 (0)1 71 75 12 52
[email protected]

Analyst & Investor Relations
Ronald Wasylec - Ariane de Lamaze 
Tel. : + 33 (0)1 71 75 12 23 / 06 00
Terri Anne Powers (United States) 
Tel. : + 1 312 552 2890

 


[1] On a pro forma basis (excluding Dalkia France and with Dalkia International fully consolidated as of January 1, 2014): EBITDA growth of 10.1%, and 6.4% growth at constant consolidation scope and exchange rates [2] On a pro forma basis: Current EBIT growth of 32.0%, and 23.5% growth at constant consolidation scope and exchange rates
[3] Pro forma figures exclude Dalkia France, and include Dalkia International on a fully consolidated basis as of January 1, 2014.