KEY FIGURES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017

7 november 2017
(UNAUDITED IFRS FIGURES)
SUSTAINED REVENUE GROWTH AND ACCELERATED RESULTS PROGRESSION
  • REVENUE INCREASED 4.4%[1] (+3.1% LIKE-FOR-LIKE) TO €18,221 MILLION
    • IN THE THIRD QUARTER REVENUE INCREASED +4.3%1
  • GOOD COMMERCIAL MOMENTUM
  • WASTE VOLUMES UP BY +3.3%
  • EBITDA UP 1.7%1 TO  €2,359 MILLION FOR THE NINE MONTHS
    • IN THE THIRD QUARTER EBITDA INCREASED +4.8%1
  • €190 MILLION IN COST SAVINGS ACHIEVED DURING THE FIRST NINE MONTHS, IN LINE WITH THE €250 MILLION ANNUAL OBJECTIVE
  • CURRENT EBIT IMPROVED 2.2%1 TO €1,049 MILLION FOR THE NINE MONTHS
    •  THIRD QUARTER CURRENT EBIT IMPROVED +6.9%1
  • CURRENT NET INCOME- GROUP SHARE ALMOST STABLE AT €406 MILLION, UP 4.3%1 EXCLUDING CAPITAL GAINS
  • 2017 OBJECTIVES FULLY CONFIRMED

Antoine Frérot, Veolia Environnement’s Chairman and CEO commented: “Veolia’s 9-month results are satisfying, and support our strategy of growth and efficiency.  The solid development of our revenue is confirmed, as announced at the beginning of the year. Good commercial momentum and revitalized attractiveness of our offerings resulted in new contract awards across all our businesses and geographies.  For example, we have signed a new 10-year hazardous waste treatment contract with Antero Resources, an oil and gas producer in the United States, and renewed the contract to operate the Le Mans wastewater treatment plant for a period of 12 years.  In addition, the successful framework and execution of our efficiency programs allowed us to achieve cost savings in line with our objectives. All in all, the combination of profitable growth and cost savings translates into an overall acceleration of EBITDA and earnings, in line with our plan. These results allow me to fully confirm our objectives.”
 
  • Group consolidated revenue increased 3.7% (+4.4% at constant exchange rates) from represented €17,569 million for the nine months ended September 30, 2016 to €18,221 million for the nine months ended September 30, 2017.
The unfavorable movement in exchange rates negatively impacted revenue growth by 0.7% for the first nine months of 2017 (-€123 million).  At constant consolidation scope and exchange rates (i.e. like-for-like), revenue growth for the nine months amounted to 3.1%, as in the first half of 2017.

At constant exchange rates and excluding the impact of construction and energy prices, nine-month revenue increased 4.9%.
  • In France, revenue was almost stable for the nine months (-0.7%), but grew 1.2% at constant consolidation scope. Water was stable (+0.1%) but showed gradual improvement due to volume growth (+1%) and price indexation which improved to +0.4% in the third quarter after -0.3% in the first and second quarters. The Waste business recorded a decline of 1.6%, but at constant consolidation scope increased 2.9% due to good commercial momentum, volumes up by 2.1% (+3.5% in Q3) and the positive effect of higher recycled material prices. 
     
  • Europe excluding France revenue was up sharply, +6.5% at constant exchange rates for the nine-month period and up 8.1% during the third quarter. All regions recorded sustained growth, with the exception of Italy (-2.8%). Germany increased 4.9% due to good commercial performance in Waste and higher paper prices.  UK revenue improved 5.1% given continued strong PFI performance, good commercial momentum and higher recycled material prices.  Central and Eastern Europe revenue increased 10.3% due to good volumes in Energy given favorable weather in the first half of 2017 and the contribution of the Prague Left Bank district heating network, as well as good water volumes.  In addition, Nordic countries also posted good performance with revenue up 12.2%, while the Iberian Peninsula grew revenue 11.5%.
     
  • At constant exchange rates, the Rest of the World segment continued to record strong revenue growth for the nine-month period (+10.6%), with Q3 revenue up 9.4%. North America revenue increased 11.6% due to the integration of Chemours’ sulfuric acid regeneration business and the benefit from higher energy prices in the municipal business.  Industrial services revenue remains down. Revenue in Asia progressed 22%, with in particular, 30.3% growth in China, which continues to benefit from commercial successes.  Japan and South Korea also recorded revenue growth. Latin American revenue increased 22.4%, due to good development in Argentina, Brazil and Columbia. Australia revenue recovered, with third quarter revenue up 8.2%.
     
  • Global Businesses revenue declined by 1.3% at constant exchange rates.  Hazardous waste activities continue to grow at a good pace (+4.5%). Veolia Water Technologies construction revenue fell 8.7% during the nine-month period, however YTD bookings increased 10%. The SADE business recorded a good performance in France, but delays in the start-up of international projects resulted in an overall revenue decline (-2.9%).
 
  • Commercial reinforcement efforts launched a year ago continue to bear fruit.
After the good commercial performance recorded during the first half of 2017, including for example the award of several energy services contracts in China to generate more than €860 million in cumulative revenue, and the design, build and operation of the largest waste-to-energy plant in Latin America, in Mexico (cumulative revenue expected of €886 million), the Group has once again signed several significant contracts during the third quarter.
  • In Water in France, Veolia notably was awarded the operations contract for the Valenton wastewater treatment plant for a 12-year period and expected cumulative revenue of €400 million, as well as operations contracts for two wastewater treatment plants in Lille for 5 years and Le Mans for 9 years.
     
  • In the United States, in the oil and gas sector, Antero Resources awarded Veolia a contract to treat sludge generated from its West Virginia site for a period of up to 10 years and $70 million in cumulative revenue.
     
  • In recycling, Veolia has established a global industrial plastic recycling platform with a European presence in France, the United Kingdom, Germany, Benelux and Scandinavian countries, as well as an Asian presence in South Korea and Japan.
     
  • In addition, renewal rates for expiring contracts remained very satisfactory across all the Group’s businesses.
 
  • EBITDA increased 1.3% (+1.7% at constant exchange rates) to €2,359 million for the nine months ended September 30, 2017.
     
    • The variation in exchange rates negatively impacted EBITDA by 0.4% (-€10 million).
       
    • At constant exchange rates, EBITDA growth accelerated during the third quarter with 4.8% growth, after +0.4% growth in the first half of 2017.
       
    • This improvement was driven by continued solid revenue growth and cost savings which reached €190 million for the first nine months of 2017, in line with the €250 million annual objective. The weight from unfavorable transitory and one-off items amounted to -€103 million during the nine months, including only -€9 million for the third quarter, which made it possible to benefit from operating leverage generated from top line growth. The impact of movements in energy prices and recycled material prices was not significant, (only +€1 million for the nine-month period).      
 
  • Current EBIT rose 1.3% (+2.2% at constant exchange rates) to €1,049 million for the nine months ended September 30, 2017.
     
    • The foreign exchange impact on current EBIT amounted to -€9 million.
    • At constant exchange rates, current EBIT growth was driven mainly by the increase in EBITDA.  Depreciation and amortization, combined with principal payments on operating financial assets, increased 2.4% at constant exchange rates to €1,255 million (scope effect).  The contribution from the current net income of joint ventures and associates was €76 million, compared to €82 million for the prior year period due to the impact of divestitures that more than offset strong growth in China (€50 million for the first nine months of 2017 vs. represented €38 million for the first nine months of 2016).
 
  • Current net income – Group share declined 1.6% (-0.7% at constant exchange rates) to €406 million for the nine months ended September 30, 2017. Excluding capital gains, current net income – Group share increased 3.3% (+4.3% at constant exchange rates) for the same period.
     
    • The foreign exchange impact on current net income – Group share amounted to -€4 million.
    • The cost of net financial debt was stable at €314 million.
    • Current net income – Group share included €14 million in financial capital gains, compared with represented €33 million for the first nine months of 2016.
    • The current tax rate was 25%.
 
  • Net financial debt declined to €8,419 million at September 30, 2017, compared with €8,883 million at September 30, 2016.
 
**********
 
  • Medium-term outlook*.
            In view of the performance recorded during the first nine months of 2017, the Group’s medium-term outlook is fully confirmed:
 
  • 2017: a transition year
    • Resumption of revenue growth
    • Stable EBITDA, or moderate EBITDA growth
    • Increased efforts to reduce costs: more than €250 million in cost savings
  • 2018:
    • Continuation of revenue growth
    • Resumption of more sustained EBITDA growth
    • More than €300 million in cost savings
  • 2019:
    • Continuation of revenue growth and full impact of cost savings
    • EBITDA between €3.3bn and €3.5bn (excluding IFRIC 12)
 
*at constant exchange rates
[1] At constant exchange rates.
At current consolidation scope and exchange rates: revenue up 3.7%, EBITDA up 1.3%, current EBIT up 1.3%, and current net income-group share was down 1.6%, though up 3.3% excluding capital gains.



Veolia group is the global leader in optimized resource management. With over 163,000 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 2016, the Veolia group supplied 100 million people with drinking water and 61 million people with wastewater service, produced 54 million megawatt hours of energy and converted 30 million metric tons of waste into new materials and energy. Veolia Environnement (listed on Paris Euronext: VIE) recorded consolidated revenue of €24.39 billion in 2016. www.veolia.com
 
 
 
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.  
 
 

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