Suez reports slight organic decline in the recycling & recovery Europe division

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Source: SUEZ

Paris — Publishing its first half year results, Suez reports that despite a sluggish macroeconimic environment in Europe and unfavorable weather conditions, revenue grew +2.2 percent. The operating profitability slightly decreased, but the net income improved. The recycling & recovery Europe division reported an organic decline of 1.1 percent. The 2016 targets maintained.

After the Board of Directors approved the first-half 2016 results at its July 27, 2016 meeting, Jean-Louis Chaussade, CEO, made the following statement: “In the first half of the year, Suez reported 2.2 percent revenue growth despite a still sluggish macroeconomic environment in Europe and the impact of particularly unfavorable weather conditions in France and Chile. This growth was driven by the sharp improvement in the International activities; the Recycling & Recovery Europe division stabilized despite the negative commodity price trend. Conversely, the Water Europe division was affected by non-recurring items and by low tariff increase due to the absence of inflation.“

And he continued: „Although we lost some ground in the first half of the year, we are reiterating our 2016 targets. As we are aware they will be difficult to meet, we have decided to increase the Compass cost reduction program by €30 million to €180 million this year and to more closely monitor investments and debt. At the same time, Suez is also speeding up its Group transformation plan with the aim of becoming a more integrated, agile and efficient group, one that is focused on commercial success and innovation.”

Affected by a sharply negative price effect on secondary raw materials

The Recycling & Recovery Europe division reported revenue of €3,129m, an organic decline of 1.1 percent. Performance continued to be affected by a sharply negative price effect on secondary raw materials (especially scrap metals down 23 percent year on year and PET -11 percent) and on energy, mainly affecting the first quarter; adjusted for this effect, revenue grew by 1.6 percent on an organic basis.

Treated volumes grew by 0.7 percent, benefiting mainly from additional tonnage in France in the second quarter. The decline in volumes sent to landfill was more than offset by increased recycling volumes in both France and the UK, as well as the improvement in hazardous waste volumes by +5.2 percent.

In terms of geographical regions, the organic change was +7.3 percent in the UK and Scandinavia, +1.7 percent in Central Europe, +0.8 percent in Benelux/Germany and -3.7 percent in France.

EBIT in the Recycling & Recovery Europe division was €136m; it was down by €11m on an organic basis due to the impact of falling electricity prices (-€16m), partially offset by the strong momentum of the UK business activities. The Recycling & recovery Europe division generated €32m in Compass savings over the six-month period.

The full press release can be downloaded under suez-environnement.fr.

Source: Suez