Paris, France — Revenue in Veolia`s waste business sector increased 3.3 percent (down slightly by -0.8 percent at constant consolidation scope and exchange rates) compared with pro forma figures for the half-year ended June 30, 2014. The first half of 2015 was encouraging and the second quarter continued in the same manner as Q1. At the same time, Veolia`s total revenue increased 7.3 percent (i.e. +3.3 percent at constant exchange rates) to €12,318 million, compared to re-presented 11,482 million for the first half of 2014. On a pro forma basis, revenue increased 2.6 percent (i.e. -1.3 percent at constant consolidated scope and exchange rates) compared to €12,010 million for the first half of 2014.
Antoine Frérot, Veolia Environnement’s Chairman and Chief Executive Officer commented: “During the first half of 2015, Veolia has once again demonstrated its ability to significantly improve results. All of our financial indicators have increased, leading to a significant increase in margins. During the first half of 2015 alone, Veolia achieved 110 percent growth in current net income, which is equal to that of the entire 2014 fiscal year. As a result, our 2015 objectives are fully confirmed. Our strategy of restoring margins, balance sheet equilibrium and strong free cash flow generation allows us to approach the next stages of our development for the 2016-2018 period with great confidence.”
The favorable impact of exchange rates contributed €499 million (+4.2 percent growth) to first half 2015 revenue. Lower energy and recycled raw material prices weighed on revenue in the amount of €114 million (-1 percent impact on revenue). Year-over-year trends in the second quarter in all segments improved compared to the first quarter trend, with the exception of the Global Businesses segment, which was negatively impacted by delays in certain projects.
- In France, revenue declined 2.6 percent at constant consolidation scope (but -1.6 percent in Q2 vs. -3.6 percent in Q1). Water was penalized by large contract renewals (-€70 million), partially offset by the impact of higher volumes sold (+0.4 percent) and moderate tariff indexation (+0.4 percent). The Waste business improved, with 3.8 percent growth in Q2 versus a decline of 1.4 percent in Q1, due to contract wins, a 4.0 percent increase in volumes in Q2 (vs. +1.1 percent in Q1) and a less unfavorable impact of recycled raw material prices.
- Europe excluding France revenue was +0.6 percent (-2.3 percent at constant consolidation scope and exchange rates), with quasi stable performance in Q2 after a Q1 that declined 3.5 percent. Germany revenue declined due to the impact of lower energy prices and continued commercial portfolio restructuring in the Waste business. The UK benefited from a favorable revenue mix, with an increase in treated volumes and lower PFI construction revenue (-€52 million) at weak margins. Central and Eastern European revenue increased 1.6 percent at constant consolidation scope and exchange rates, with higher average prices in Water (+1.9 percent), and more favorable weather in Q2 in the Energy business.
- The Rest of the World segment continues to post good growth, up 14.3 percent (+3.4 percent at constant consolidation scope and exchange rates), with +4.5 percent growth in Q2, following +2.4 percent in Q1 driven by good performance in Asia (China and Japan), and in Latin America, which offset the decline in revenue in the United States associated with lower energy prices.
- Global Businesses revenue declined 3.3 percent at constant consolidation scope and exchange rates, with stability in Hazardous Waste (impact of lower oil prices) and a reduction in construction activity.
- By business and at constant consolidation scope and exchange rates, Water (-1.7 percent) was stable in Operations activities, but down in engineering and construction due to project delays. Waste revenue declined moderately (-0.8 percent), with volumes up 0.8 percent. Energy rebounded in Q2 (+3.7 percent after -4.4 percent in Q1 driven by the decline in energy prices).
Source: Veolia Environnement