Paris, France — According to Suez Environnement`s 2014 final year results, the Waste Europe division reported revenues of €6,324m, an organic decrease of -1.0 percent. Despite a sluggish economic environment in Europe, the volumes processed grew by +0.7 percent thanks to the commissioning of new treatment capacity. However, the division was affected by falls in prices for secondary raw materials (on average -6 percent for metal and -9 percent for paper), electricity (-7 percent on average across the division) and services, such as municipal collection in Poland and industrial and commercial collection in the Netherlands.
The situation varies in each geographical zone: it improved in the United Kingdom and Nordic countries (organic growth of +2.2 percent), it was relatively stable in Benelux/Germany (-0.8 percent) and Central Europe (-0.3 percent) but it fell more markedly in France (-2.2 percent).
EBITDA decrease of 5.7 percent
The division’s EBITDA amounted to €743m, an organic decrease of 5.7 percent. It was affected by the fall in prices for electricity and, to a lesser extent, secondary raw materials. The intensified competitive environment also put pressure on prices for services. The effects of the Compass programme, amounting to €64m, did not fully compensate for all these impacts. The Waste Europe division posted an EBITDA margin of 11.8 percent, down 47 bps compared with 2013. Breaking this down geographically, the margin rose slightly in the UK and the Nordic countries, remained stable in Central Europe and fell back in Benelux/Germany and France, where the effect of the distortion of the treatment mix is negative in the short term.
International revenues show growth of +2.7 percent
The International division reported revenues of €3,422m in 2014, representing organic growth of +2.7 percent.
- The Africa, Middle East and India zone saw a +10.3 percent (+€67m) organic increase in revenues. This was mainly due to the good level of water and waste activity in Morocco and continued development in India.
- The Asia-Pacific zone continued to expand, with revenues up +4.4 percent on an organic basis (+€44m), thanks to treated volumes which grew strongly in China and satisfactory growth in the waste activity in Australia.
- The organic growth in the North America zone was +2.2 percent (+€13m), with price increases achieved in the regulated business in the USA (2.4 percent), partly offset by a -0.5 percent decrease in volumes.
- After a first half-year down 13.5 percent, Degrémont was able to take advantage of a recovery in the Design & Build market. Its activity began growing again with +3.4 percent in the third quarter, accelerating to +12.0 percent in the fourth. Over the year as a whole, Degrémont reported revenues that had fallen organically by 2.7 percent (-€31m). The Design & Build order book amounted to €1,021m at the end of 2014, a rise of +17 percent, suggesting growth in the DB activity next year.
The International division’s EBITDA amounted to €728m, an organic increase of +11.9 percent (+€66m). This includes a positive scope effect of €129m associated with the capital gain on the disposal of CEM. The EBITDA margin, adjusted for this capital gain, rose strongly to 17.6 percent. The division’s positive momentum explains this good performance, together with the Compass performance gains (+€40m).
The full report can be downloaded from suez-environnement.com.
Source: Suez Environnement