Paris, France -– According to Veolia`s 2016 figures, at current consolidation scope and exchange rates revenue declined 2.3 percent from €24,965 million in 2015 to €24,390 million in 2016. At constant exchange rates, revenue in 2016 was nearly stable (-0.4 percent) compared to 2015, but increased 2.0 percent excluding the impact of lower energy prices (-€128 million) and excluding the impact of less construction revenue (-€484 million). Waste revenue rose +0.5 percent at constant exchange rates year-on-year, and +1.6 percent at constant exchange rates excluding the impact of the decrease in Construction activity, in relation, overall, to a positive volume impact of +0.6 percent, and a service price impact of +0.8 percent.
At constant exchange rates, Europe excluding France segment revenue was stable (+0.1 percent), but grew +1.5 percent in the fourth quarter. Central Europe revenue was stable due to a favorable weather impact, start of biomass cogeneration in Hungary and higher water volumes (+1.3 percent) which offset the impact of lower energy prices. Germany revenue improved 2.2 percent, with a reduction of 3.5 percent in Energy revenue, but a 6.1 percent increase in Waste revenue given good volumes. United Kingdom revenue was down 1.4 percent at constant exchange rates, but up 2.1 percent excluding construction revenue after completion of Leeds PFI. Global Businesses revenue decreased by 4.1 percent at constant exchange rates, with growth in hazardous waste (+2.4 percent) and the continued downsizing of engineering activities (VWT) and civil engineering (SADE).
Waste revenue increased 0.5 percent
By business, and at constant exchange rates, Water revenue declined by 1.5 percent to €11,138 million due to lower construction revenue, while Waste revenue increased 0.5 percent to €8,401 million given a 0.6 percent increase in revenue due to higher volumes and service price increases of 0.8 percent. Energy revenue increased 0.4 percent to €4,851 million, including the impact of lower energy prices, as well as a slightly favorable weather effect (+€35 million) and good volumes in China. Excluding the impact of lower energy prices and construction revenue, each business increased revenue at constant exchange rates by +1.8 percent, +1.6 percent and +3.2 percent, respectively.
Antoine Frérot, Veolia Environnement’s Chairman & CEO, commented: “2016 represents another year of strong results growth for Veolia. Our margins have continued to improve and we achieved net free cash flow of nearly €1 billion. Revenue also improved significantly in the fourth quarter, with 1.9 percent growth at constant exchange rates.“ And he added: „The last quarter of 2016 showed that Veolia has demonstrated the capacity to generate growth and I wish to further accelerate growth by committing additional resources. In addition, our business situation has toughened during recent months. In order to finance reinforced commercial efforts and address this new reality, we are intensifying our cost savings program to drive €800 million in savings over the 2016-2018 period compared with the previous expectation of €600 million. These additional efforts will enable Veolia to continue on the path of profitable growth.”
Medium term outlook
The medium term outlook expects 2017 to be a transition year, with a resumption of revenue growth, stable EBITDA or moderate EBITDA growth, and increased efforts to reduce costs by more than €250 million. 2018 will show continuation of revenue growth and the resumption of more sustained EBITDA growth, with an objective of more than €300 million in cost savings. And 2019 revenue growth and full impact of cost savings will continue. EBITDA expected between €3.3bn and €3.5bn.
The full annual report 2016 can be downloaded under veolia.com.