PARIS (Agefi-Dow Jones)–Utilities group Veolia announced on Thursday that it expects further growth in its revenues and current net profit for 2022, after seeing its results rebound in 2021, a year marked by the acquisition of most of the activities of its competitor Suez.
For the current financial year, Veolia is counting on “solid growth” in its turnover at constant exchange rates, on an organic increase in its gross operating surplus (Ebitda) of between 4% and 6% as well as on a net current result of 1.1 billion euros, an increase of more than 20%.
The company also indicated that its dividend would record growth “in line” with that of the net current result per share. Veolia expects to achieve cost savings of 350 million euros in 2022, with, in addition, 100 million euros in synergies linked to the first year of the integration of Suez. Veolia also intends to achieve a net debt to Ebitda ratio of around 3.
These prospects include the group’s new scope, since January 18, following the acquisition of most of Suez’s assets. This operation enabled Veolia to change dimension, increasing its revenues by around 40%. The group has obtained the approval of all the competition authorities for this merger, with the exception of that of the Competition and Markets Authority (CMA) in the United Kingdom. The British procedure is ongoing and “should be completed in 2022”, according to the company.
Veolia’s annual objectives assume that the current conflict in Ukraine does not extend beyond Ukrainian territory and that there is no “significant change in the conditions of energy supply in Europe”, indicated the society.
The group assured that it is “well protected” against current inflation “thanks to the contractual model of tariff indexation which applies to nearly 70% of the group’s turnover and to the policy of covering energy purchases” .
Veolia has also indicated that it has low exposure to Ukraine and Russia, two countries which represent a turnover of approximately 120 million euros, or 0.3% of its revenues, as well as 130 million euros of capital employed, i.e. less than 0.5% of the total.
CEO Antoine Frérot said in a conference call with reporters that Veolia intended to keep its business in Russia. “These are essential services for the population: heating and waste collection,” he said. The leader added that Western sanctions dictated not to sell or buy anything from Russia while cutting off financial flows. “That’s good, we don’t sell anything, we don’t buy anything, we produce essential services on site with entirely local resources,” he continued. Antoine Frérot also indicated that Veolia had interrupted its financial flows with its Russian subsidiary.
Cost savings above targets
The group delivered these perspectives and these comments while its results recovered markedly last year. “We have achieved the best results of the group for nearly 15 years,” said CEO Antoine Frérot.
Net income group share reached 404 million euros, compared to 89 million euros in 2020. Current net income group share, which corresponds to net income restated for certain exceptional income or expenses, stood at 896 million euros, compared to 382 million euros in 2020.
EBITDA came to 4.2 billion euros, up 16.3% year-on-year on a current basis and 13.9% at constant scope and exchange rates. The Ebitda margin reached 14.9% against 14% a year earlier.
Current operating profit (Ebit) increased by 40.5% like-for-like, to 1.77 billion euros.
Veolia also reported annual revenue of 28.51 billion euros, up 9.6% year-on-year in published data and 8.7% in organic data.
Analysts polled by Factset were expecting a turnover of 27.9 billion euros and an Ebitda of 4.09 billion euros.
Veolia has also achieved cost savings of 382 million euros, exceeding its objective of “more than 350 million euros”.
On the strength of these results, Veolia announced that it would propose a dividend of 1 euro per share for 2021, up 43% compared to the coupon for the 2020 financial year.
-Julien Marion, Agefi-Dow Jones; +33 (0)1 41 27 47 94; [email protected] ed: VLV
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March 17, 2022 03:25 ET (07:25 GMT)