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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Veolia Environnement SA | EU:VIE | Euronext | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.18 | 0.62% | 29.39 | 29.34 | 29.46 | 29.98 | 29.29 | 29.38 | 1,828,167 | 16:40:00 |
CURRENT NET INCOME MORE THAN DOUBLED TO €321 MILLION
2015 OBJECTIVES FULLY CONFIRMED
ON DECEMBER 14, THE GROUP WILL HOLD AN INVESTOR DAY TO PRESENT ITS 2016-2018 STRATEGIC PLAN.
Regulatory News:
Veolia Environnement (Paris:VIE):
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% 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% growth) to first half 2015 revenue. Lower energy and recycled raw material prices weighed on revenue in the amount of €114 million (-1% 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.
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Definitions of all key financial indicators mentioned can be found at the end of this press release.
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Veolia group is the global leader in optimized resource management. With over 179,000 employees* worldwide, the Group designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries. Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and to replenish them. In 2014, the group Veolia supplied 96 million people with drinking water and 60 million people with wastewater service, produced 52 million megawatt hours of energy and converted 31 million metric tons of waste into new materials and energy. Veolia Environnement (listed on Paris Euronext: VIE) recorded consolidated revenue of €24.4 billion* in 2014. www.veolia.com
(*) 2014 pro-forma figures including Dalkia International (100%) and excluding Dalkia France
Important disclaimer
Veolia Environnement is a corporation listed on the Euronext Paris. This press release contains “forward-looking statements” within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risk that changes in energy prices and taxes may reduce Veolia Environnement’s profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement’s contracts, the risk that acquisitions may not provide the benefits that Veolia Environnement hopes to achieve, the risks related to customary provisions of divesture transactions, the risk that Veolia Environnement’s compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnement’s financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, as well as the other risks described in the documents Veolia Environnement has filed with the Autorités des Marchés Financiers (French securities regulator). Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward looking statements. Investors and security holders may obtain from Veolia Environnement a free copy of documents it filed (www.veolia.com) with the Autorités des Marchés Financiers.
This document contains "non‐GAAP financial measures". These "non‐GAAP financial measures" might be defined differently from similar financial measures made public by other groups and should not replace GAAP financial measures prepared pursuant to IFRS standards.FINANCIAL INFORMATION FOR THE HALF YEAR ENDED JUNE 30, 2015
In this press release, the Group refers to two comparative scopes related to the unwinding of the Dalkia joint venture. At June 30, 2014, Dalkia France was still fully consolidated and Dalkia International was equity-accounted. Two comparative scopes are presented throughout this document: one referred to as “GAAP”, with Dalkia France fully consolidated and Dalkia International equity-accounted, and the other referred to as “pro forma”, with Dalkia International fully consolidated and excluding Dalkia France.
A] INCOME STATEMENT
1. Revenue
1.1 Revenue by segment
Revenue (€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 pro forma 2015/2014 variation Internal growth External growth Foreign exchange impact France 2,694.6 2,760.2 -2.4% -2.6% +0.2% - Europe excluding France 4,305.5 4,278.0 +0.6% -2.3% +0.1% +2.8% Rest of the world 2,956.6 2,587.6 +14.3% +3.4% -0.5% +11.4% Global Businesses 2,296.2 2,288.0 +0.4% -3.3% - +3.7% Other 64.7 95.8 -32.5% -1.6% -31.1% +0.2% Group 12,317.6 12,009.6 +2.6% -1.3% -0.3% +4.2%The Y-Y trend in the second quarter of 2015 was marked by more favorable momentum, in all segments, with the exception of the Global Businesses segment due to the impact of delayed projects in the VWT business and the impact of the decline in oil prices:
REVENUE 1ST QUARTER 2ND QUARTER PRO FORMA VARIATIONS Δ AT CONSTANT SCOPE & FX Δ AT CONSTANT SCOPE & FX FRANCE -3.6% -1.6% EUROPE, EXCLUDING FRANCE -3.5% -0.7% REST OF THE WORLD +2.4% +4.5% GLOBAL BUSINESS +2.1% -7.9% GROUP -1.4% -1.2%Revenue in the France segment for the half-year ended June 30, 2015 decreased 2.4% (-2.6% at constant consolidation scope) to €2,694.6 million compared with pro forma figures for the half-year ended June 30, 2014. At constant consolidation scope, second quarter revenue decreased 1.6% vs -3.6% in the first quarter of 2015.
Revenue in the Europe excluding France segment for the half-year ended June 30, 2015 increased 0.6% at current consolidation scope and exchange rates (-2.3% at constant consolidation scope and exchange rates) to €4,305.5 million compared with pro forma figures for the half-year ended June 30, 2014. Revenue was quasi stable in the second quarter of 2015, compared with -3.5% at constant consolidation scope and exchange rates in the first quarter of 2015.
This variation mainly concerns:
Revenue in the Rest of the World segment for the half-year ended June 30, 2015 increased 14.3% (+3.4% at constant consolidation scope and exchange rates) to €2,956.6 million compared with pro forma figures for the half-year ended June 30, 2014. In the second quarter of 2015, revenue increased 4.5% at constant consolidation scope and exchange rates versus 2.4% growth in the first quarter of 2015.
Revenue in the Rest of the World segment reflects solid growth in the following regions:
This substantial growth was mitigated by a decline in revenue in the United States by -7.6% at constant consolidation scope and exchange rates (+14.6% at current consolidation scope and exchange rates), primarily due to the lower price of energy sold in the main facilities, partially offset by the rise in volumes sold in the Energy business.
Revenue in the Global Businesses segment for the first half of 2015 remained stable at €2,296.2 million, up 0.4% at current consolidation scope and exchange rates (-3.3% at constant consolidation scope and exchange rates), compared with pro forma figures for the half-year ended June 30, 2014. In the second quarter of 2015, revenue declined 7.9% at constant consolidation scope and exchange rates versus +2.1% in the first quarter of 2015.
This variation was due to:
1.2 Revenue by business
Revenue (€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 pro forma 2015/2014 variation Internal growth External growth Foreign exchange impact Water 5,462.7 5,382.7 +1.5% -1.7% -0.3% +3.5% Waste 4,307.7 4,169.4 +3.3% -0.8% -1.1% +5.2% Energy 2,547.2 2,457.5 +3.7% -1.2% +1.1% +3.8% Group 12,317.6 12,009.6 +2.6% -1.3% -0.3% +4.2%The quarterly variation of revenue by business compared to pro forma figures:
REVENUE 1ST QUARTER 2ND QUARTER PRO FORMA VARIATIONS Δ AT CONSTANT SCOPE & FX Δ AT CONSTANT SCOPE & FX WATER -0.1% -3.3% WASTE -0.8% -0.7% ENERGY -4.4% +3.7% GROUP -1.4% -1.2%Revenue in the Water business increased by 1.5% (-1.7% at constant consolidation scope and exchange rates) compared with pro forma figures for the half-year ended June 30, 2014.
This decline was due to a combination of several factors:
Revenue in the Waste business increased 3.3% (down slightly by -0.8% 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.
This variation reflects:
Revenue in the Energy business decreased by -1.2% at constant consolidation scope and exchange rates compared with pro forma figures for the half-year ended June 30, 2014, of which -3.3% related to lower energy prices and are partially offset by 0.7% favorable weather effect. In the second quarter of 2015, revenue increased 3.7% at constant consolidation scope and exchange rates versus -4.4% in the first quarter of 2015.
The second quarter of 2015 recorded a net improvement in revenue due to a more favorable weather impact and commercial development, reduced by the unfavorable impact of the price of energy sold in North America.
2. Other income statement items
As of the second half of 2014, and in connection with the reorganization and takeover of Dalkia International, the Group decided to review and standardize its chargeback policy for centralized corporate costs to subsidiaries in France and outside of France on a retroactive basis as of January 1, 2014. These impacts are neutral across the Group financial indicators presented below. In order to make operational performance comparable, they were neutralized on the comparative period of June 30, 2014 in the analysis by segment of EBITDA and Current EBIT.
2.1 EBITDA
Changes in EBITDA by segment were as follows:
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 pro forma Half-year ended June 30, 2014 GAAP Pro forma 2015 / 2014 variation Pro forma 2015 / 2014 variationat constant scope & exchange rates
France 395.5 395.1 401.7 +0.1% +0.1% Europe, excluding France 610.3 543.9 299.5 +12.2% +9.1% Rest of the world 406.1 333.7 312.3 +21.7% +7.5% Global businesses 84.5 92.7 91.4 -8.8% -12.9% Other (*) 34.7 18.9 209.4 - - EBITDA 1,531.1 1,384.3 1,314.3 +10.6% +6.0% EBITDA margin 12.4% 11.5% 11.4%* The Other segment in the half-year ended June 30, 2014 GAAP scope essentially comprises the activities of Dalkia in France up to the date of unwinding on July 25, 2014.
2.2 Current EBIT
Changes in current EBIT by segment were as follows:
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 pro forma Half-year ended June 30, 2014 GAAP Pro forma 2015 / 2014 variation Pro forma 2015 / 2014 variationat constant scope & exchange rates
France 107.0 78.2 77.9 +36.9% +36.6% Europe, excluding France 340.0 236.4 114.3 +43.8% +31.2% Rest of the world 216.1 161.9 151.7 +33.5% +15.6% Global businesses 33.1 43.5 43.3 -23.9% -29.0% Other (*) 15.9 6.6 133.6 - - Current EBIT 712.1 526.6 520.8 +35.2% +24.6%* The Other segment in the half-year ended June 30, 2014 GAAP scope essentially comprises the activities of Dalkia in France up to the date of unwinding on July 25, 2014.
The reconciling items between EBITDA and Current EBIT for the half-year ended June 30, 2015 and 2014 are as follows:
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 pro forma Half-year ended June 30, 2014 GAAP EBITDA 1,531.1 1,384.3 1,314.3 Renewal expenses (141.1) (124.9) (180.3) Repayment of operating financial assets (OFAs) (82.3) (70.4) (88.5) Net depreciation and amortization (686.4) (690.7) (571.2) Share of current net income from joint ventures and associates 52.8 47.2 69.1 Provisions, fair value adjustments & other 38.0 (18.9) (22.6) Current impairment of property, plant and equipment, intangible assets and operating financial assets 4.0 (41.2) (37.6) Gains or losses on industrial divestitures 9.8 1.7 3.7 Net charges to operating provisions, fair value adjustments and other 24.2 20.6 11.3 Current EBIT 712.1 526.6 520.8Net depreciation and amortization charges declined nearly 4% at constant exchange rates over the period (versus June 30, 2014 pro forma).
The share of current net income from joint ventures and associates was derived from the Chinese entities in the Water and Waste businesses in the amount of €19 million, versus €14 million for the half-year ended June 30, 2014, and UK entities (Water and Waste) in the amount of €9 million (€3 million for the half-year ended June 30, 2014). For the half-year ended June 30, 2014 on a GAAP basis, this line item also included the results of Israel activities sold on March 30, 2015, as well as income from Dalkia International.
The current impairment of property, plant and equipment, intangible assets and operating financial assets in GAAP and pro forma figures for the half-year ended June 30, 2014 was related to Waste activities in process of divestiture in Poland. For the half-year ended June 30, 2015, this line item does not warrant any specific comments.
Gains or losses on industrial divestitures for the half-year ended June 30, 2015 mainly involved transactions carried out by Water France and the sale of a site in Germany.
Net charges to operating provisions for the half-year ended June 30, 2015 included a provision reversal for the “Olivet” contracts in the Water activities in France. For the half-year ended June 30, 2014, they included an exceptional reversal of the pension provision recognized by VE S.A. for senior executives in the amount of €15 million.
2.3 Analysis by segment of EBITDA and Current EBIT
Variation
Pro forma Variation at constant scope & exchange rates EBITDA 395.5 395.1 401.7 +0.1% +0.1% EBITDA margin 14.7% 14.3% 14.5% Current EBIT 107.0 78.2 77.9 +36.9% +36.6%EBITDA in the France segment was relatively stable during the period.
EBITDA in the Water business was quasi stable despite the impact of contractual erosion of -€50 million (loss of Nice and Rennes contracts, and renewal of the Lyon contract) due to the favorable impact of cost cutting plans. At the end of June 2015, the voluntary departure plan in French Water was finalized, and is in line with objectives, with 783 departures overall and a reduction in employees by 12% since 2012.
In the Waste business, EBITDA improved in line with revenue growth, the contribution of cost saving plans, the decrease in fuel prices and the favorable impact of a litigation payment, partially offset by the impact of lower landfill volumes.
Current EBIT in France increased strongly due to the stability of EBITDA and depreciation and amortization, and the reversal of provisions for “Olivet” contractual risks following ongoing negotiations and discussions.
Variation
Pro forma Variation at constant scope & exchange rates EBITDA 610.3 543.9 299.5 +12.2% +9.1% EBITDA margin 14.2% 12.7% 12.3% Current EBIT 340.0 236.4 114.3 +43.8% +31.2%The EBITDA of the Europe, excluding France segment increased significantly in most countries, particularly:
The Current EBIT of the Europe, excluding France segment improved, in line with EBITDA growth and the positive variation in operating provisions due to the asset write downs recognized in 2014 in Waste activities in Poland (divested January 30, 2015). Net depreciation and amortization remained stable during the period.
Variation
Pro forma Variation at constant scope & exchange rates EBITDA 406.1 333.7 312.3 +21.7% +7.5% EBITDA margin 13.7% 12.9% 12.9% Current EBIT 216.1 161.9 151.7 +33.5% +15.6%The substantial increase in EBITDA and current EBIT in the Rest of the world segment mainly involved:
Variation
Pro forma Variation at constant scope & exchange rates EBITDA 84.5 92.7 91.4 -8.8% -12.9% EBITDA margin 3.7% 4.1% 4.1% Current EBIT 33.1 43.5 43.3 -23.9% -29.0%The EBITDA and current EBIT of Global businesses were impacted by the following items:
2.4 Net finance costs
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 GAAP re-presented Net finance costs (230.8) (234.8) Gains (losses) on disposals of financial assets 65.6 52.9 Costs of financial divestitures (2.6) (9.4) Net gains / losses on loans and receivables 9.6 40.8 Net income (loss) on available-for-sale assets 1.8 2.1 Assets and liabilities at fair value through the consolidated income statement 0.2 (0.1) Unwinding of the discount on provisions (22.0) (23.6) Foreign exchange gains and losses 4.0 0.1 Other (9.8) (3.4) Other financial income and expenses 46.8 59.6Net finance costs totaled €230.8 million for the half-year ended June 30, 2015, versus GAAP €234.8 million and pro forma €240.7 million for the half-year ended June 30, 2014. Net finance costs were down €10 million despite the negative foreign exchange impact of €8 million. The reduction in net finance costs reflects the Group’s efforts to manage debt.
For the half-year ended June 30, 2014, on a GAAP basis, other financial income and expenses included €35.6 million in income from loans to Dalkia International, which is now fully consolidated.
For the half-year ended June 30, 2015, disposal gains or losses included the capital gain on the disposal of the Group’s Israel activities for €43.6 million.
As a reminder, for the half-year ended June 30, 2014, disposal gains or losses included the capital gain on the sale of Marius Pedersen for €48.9 million.
2.5 Income Tax Expense
The income tax expense for the half-year ended June 30, 2015 amounted to -€124.2 million, compared with -€101.0 million on a GAAP basis for the half-year ended June 30, 2014.
The re-presented tax rate declined from a year ago, and amounted to 30% after adjustment for non-recurring items within net income of entities fully controlled by the Group, the share of income of equity-accounted entities, and the impact of financial divestitures.
In €M H1 2015 Current income before tax (a) 528 Of which share of net income of Joint Ventures & Associates (b) 53 Of which capital gains or losses on financial divestitures (c ) 66 Re-presented current income before tax: a-b-c=d 410 Tax expense -124 Adjustment to tax expense 1 Tax expense on current income (e ) -125 Of which tax expense on divestitures (f) -2 Re-presented tax expense: e-f=g -123 Re-presented tax rate on current income: -(g)/(d) 30.0%This decline is due mainly to the increase in pre-tax results of the French tax group, still loss-making from a tax standpoint (with no impact on tax expense taking into account that losses are not recognized within the French tax group) as well as by the full consolidation of international activities in the Energy business in 2015 (impact mainly related to entities based in Central Europe where corporate tax rates are lower than that of the Group as a whole).
2.6 Net income (loss) of other equity-accounted entities
Net income of other equity-accounted entities (Transdev Group) totaled €25.5 million for the half-year ended June 30, 2015, compared with pro forma €4.4 million for the half-year ended June 30, 2014.
2.7 Net income (loss) attributable to non-controlling interests
The net loss attributable to non-controlling interests was €82.0 million for the half-year ended June 30, 2015, compared with €55.8 million for the half-year ended June 30, 2014.
This variation is related to the impact of the unwinding of the Dalkia joint venture in 2014, as well as the improvement in Energy profits in Poland.
2.8 Net income (loss) attributable to owners of the company
Net income attributable to owners of the Company was €352.7 million for the half-year ended June 30, 2015, compared with GAAP €131.1 million for the half-year ended June 30, 2014. Current net income attributable to owners of the Company was €321.2 million for the half-year ended June 30, 2015, compared with GAAP €178.0 million for the half-year ended June 30, 2014.
Given the weighted average number of outstanding shares totaling 548.5 million for the half-year ended June 30, 2015 (basic and diluted) and 536.2 million for the half-year ended June 30, 2014 (basic and diluted), earnings per share attributable to owners of the Company (basic and diluted) amounted to €0.51 for the half-year ended June 30, 2015, compared with GAAP €0.12 for the half-year ended June 30, 2014. Current net income per share attributable to owners of the Company (basic and diluted) was €0.59 for the half-year ended June 30, 2015, compared with GAAP €0.33 for the half-year ended June 30, 2014.
Net income (loss) for the half-year ended June 30, 2015 breaks down as follows:
For the half-year ended June 30, 2015 (€ million) Current Non-recurring Total EBIT * 712.1 5.3 717.4 Net finance costs (230.8) - (230.8) Other financial income and expenses 46.8 - 46.8 Pre-tax income 528.1 5.3 533.4 Income tax expense (124.9) 0.7 (124.2) Net income (loss) of other equity-accounted entities - 25.5 25.5 Net income (loss) of discontinued operations - - - Non-controlling interests (82.0) - (82.0) Net income (loss) attributable to owners of the company 321.2 31.5 352.7* Non-recurring EBIT items are presented in the appendix of the press release, in paragraph 2 “Reconciliation of prior and new financial indicators used by the Group”
For the half-year ended June 30, 2014 on a GAAP basis, net income breaks down as follows:
For the half-year ended June 30, 2014 GAAP (€ million) Current Non-recurring Total EBIT * 520.8 (39.0) 481.8 Net finance costs (234.8) - (234.8) Other financial income and expenses 59.6 - 59,6 Pre-tax income 345.6 (39.0) 306.6 Income tax expense (101.4) 0.4 (101.0) Net income (loss) of other equity-accounted entities - 4.4 4.4 Net income (loss) of discontinued operations - (23.1) (23.1) Non-controlling interests (66.2) 10.4 (55.8) Net income (loss) attributable to owners of the company 178.0 (46.9) 131.1* Non-recurring EBIT items are presented in the appendix of the press release, in paragraph 2 “Reconciliation of prior and new financial indicators used by the Group”
B] FINANCING
1. Changes in net free cash flow
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014GAAP (*)
Half-year ended June 30, 2014 Pro forma EBITDA 1,531 1,314 1,384 Net industrial investments (521) (529) (562) Change in operating WCR (628) (586) (595) Dividends received from equity-accounted entities and joint ventures 54 49 54 Renewal expenses (141) (180) (125) Restructuring charges (52) (25) (25) Financial items (current cash financial expense, and operating cash flow from financing activities) (199) (160) (202) Taxes paid (120) (82) (98) Net free cash flow before dividend payment, financial investments and financial divestitures (76) (199) (169) Dividends paid (558) (314) Net financial investments 169 144 Change in receivables and other financial assets 34 (29) VE capital increase (excluding per share dividend distribution) - - Issue / repayment of deeply subordinated securities - - Operating cash flow of discontinued operations - - Free cash flow (431) (398) Effect of foreign exchange rate movements and other (481) (94) Change (912) (492) Net financial debt at the beginning of the period 8,311 (8,444) Net financial debt at the end of the period (9,223) (8,936)(*): including fully consolidated Dalkia France and equity-accounted Dalkia International in the first half of 2014
Net free cash flow for the half-year ended June 30, 2015 was -€76 million, compared with a GAAP figure of -€199 million for the half-year ended June 30, 2014.
The improvement in net free cash flow compared with the GAAP figure for the half-year ended June 30, 2014 mainly reflects the improvement in EBITDA, good industrial capex discipline, and despite a slight degradation in the change in working capital requirements for operations related to seasonality.
2. Industrial investments
Industrial investments, excluding discontinued operations, break down by segment as follows:
In €MH1 2015 Maintenance New OFA Growth Total gross industrial investments Industrial divestitures Total net industrial investments France 61 - 65 126 (15) 111 Europe excluding France 137 32 90 259 (22) 237 Rest of World 56 13 53 122 (3) 119 Global Businesses 32 3 8 43 (3) 40 Other 10 2 3 15 (1) 14 TOTAL 296 50 219 565 (44) 521 In €MH1 2014 GAAP Maintenance New OFA Growth Total gross industrial investments Industrial divestitures Total net industrial investments France 67 6 49 122 (9) 113 Europe excluding France 40 33 133 206 (13) 193 Rest of World 36 12 54 102 (2) 100 Global Businesses 29 0 6 35 (3) 32 Other 24 12 56 92 (1) 91 TOTAL 196 63 298 557 (28) 529 In €MH1 2014 Pro forma Maintenance New OFA Growth Total gross industrial investments Industrial divestitures Total net industrial investments France 67 6 49 122 (9) 113 Europe excluding France 88 49 161 298 (13) 285 Rest of World 37 12 66 115 (2) 113 Global Businesses 29 0 6 35 (4) 31 Other 13 0 9 22 (2) 20 TOTAL 234 67 291 592 (30) 562At constant exchange rates, gross industrial investments are down €50 million compared to pro forma figures for the half-year ended June 30, 2014
3. Financial investments and divestitures
Financial investments and divestitures for the half-years ended June 30, 2015 and June 30, 2014 break down as follows:
In € millions H1 2015 H1 2014 GAAP Financial investments (142) (129) Purchase of minorities in Water in Central & Eastern Europe (86) (91) Acquisition of Kendall in the United States (cogeneration) (19) Acquisition of Altergis in France (21) Others (35) (19) Financial divestitures including divestment expenses 311 273 Divestiture of Marius Pedersen 240 Divestiture of the Group’s activities in Israel 232 Divestiture of stake in Singapore in Energy 47 Other 32 33 Net financial investments 169 1444. External financing
4.1 Net financial debt and adjusted net financial debt
(€ million) Half-year ended June 30, 2015 Year ended December 31, 2014 Non-current borrowings 7,803.7 8,324.5 Current borrowings 2,914.8 3,003.1 Bank overdrafts and other cash position items 246.9 216.4 Sub-total borrowings 10,965.4 11,544.0 Cash and cash equivalents (1,732.9) (3,148.6) Fair value gains (losses) on hedge derivatives (9.9) (84.3) Net financial debt 9,222.6 8,311.1 Loans to equity-accounted entities 585.1 619.3 Adjusted net financial debt (1) 8,637.5 7,691.8(1) See Appendix 3 for the definition
Loans granted to equity-accounted entities mainly comprised the loans to Transdev Group for €405.4 million for the half-year ended June 30, 2015.
At June 30, 2015, net financial debt after hedging is borrowed at 72% fixed rates and 28% variable rates.
The average maturity of net financial debt was 8.2 years at June 30, 2015 compared with 9.0 years at the end of December 2014.
4.2 Group liquidity position
Liquid assets of the Group as of June 30, 2015 break down as follows:
(€ million) As of June 30, 2015 As of December 31, 2014 Veolia Environnement: Undrawn syndicated loan facility 2,962.5 2,962.5 Undrawn MT bilateral credit lines 400.0 350.0 Undrawn ST bilateral credit lines 500.0 625.0 Letter of credit facility 195.9 190.7 Cash and cash equivalents 918.0 2,302.0 Subsidiaries: Cash and cash equivalents 814.9 846.6 Total liquid assets 5,791.3 7,276.8 Current debts and bank overdrafts and other cash position items Current debt 2,914.8 3,003.1 Bank overdrafts and other cash position items 246.9 216.4 Total current debt and bank overdrafts and other cash position items 3,161.7 3,219.5 Total liquid assets net of current debt and bank overdrafts and other cash position items 2,629.6 4,057.3The decrease in liquid assets was mainly due to the redemption of the inflation-indexed bond in June 2015 for a nominal amount of €1.0 billion.
Veolia Environnement may draw on the multi-currency syndicated credit facility and all credit lines at any time.
Undrawn medium-term syndicated loan facilities
The two syndicated loan facilities comprising a €2.5 billion multi-currency credit facility and a €0.5 billion credit facility available for drawdown in Polish zloty, Czech crown and Hungarian forint were not drawn as of June 30, 2015.
Letter of credit facility:
In the first half of 2015, Veolia Environnement reduced the US dollar letter of credit facility signed on November 22, 2010 by USD 150 million.
As of June 30, 2015, the facility was drawn USD 130.8 million in the form of letters of credit. The portion that may be drawn in cash is USD 219.2 million (€195.9 million euro equivalent). It is undrawn and recorded in the liquidity table above.
4.3 Bank covenants
Based on due diligence performed within its subsidiaries, the Company considers that the covenants included in the material financing agreements were satisfied (or had been waived by lenders) as of June 30, 2015.
APPENDICES
1. Reconciliation of previously published and re-presented data for the half-year ended June 30, 2014
1.1. Main “GAAP” re-presented figures for the half-year ended June 30, 2014 (1)
In €M – Figures presented under published scope (2) H1 2014published
IFRS 5 adjustment (3) IFRIC 21 adjustment (4) H1 2014Re-presented
Revenue 11,231.5 +250.9 - 11,482.4 Adjusted operating cash flow 1,008.7 +38.1 -35.2 1,011.6 Adjusted operating income (5) 564.3 +21.8 -35.2 550.9 Net income – Group share 151.1 +9.7 -29.7 131.1 Adjusted net income – Group share 187.5 +6.7 -29.7 164.5 Gross industrial investments 579 - - 579 Free cash flow -163 -36 - -199 Net financial debt 8,646 +291 - 8,936 EBITDA N/A N/A N/A 1,314.3 Current EBIT N/A N/A N/A 520.8 Current net income – Group share N/A N/A N/A 178.0(1) Non-audited figures
(2) Published scope: including fully consolidated Dalkia France and equity-accounted Dalkia International in the first half of 2014
(3) Reclassification of Morocco Water operations to continuing operations
(4) See Appendix 1.3.
(5) Including the share of adjusted net income (loss) of joint ventures and associates for the half-year ended June 30, 2014
1.2. Main “Pro forma” re-presented figures for the half-year ended June 30, 2014 (1)
In €M – Figures presented under pro forma scope (2) H1 2014published
IFRS 5 adjustment (3) IFRIC 21 & other adjustments (4) H1 2014Re-presented
Revenue 11,764.1 +250.9 -5.4 12,009.6 Adjusted operating cash flow 1,153.2 +38.1 -30.6 1,160.7 Adjusted operating income(5) N/A N/A N/A 561.0 Net income – Group share N/A N/A N/A 126.9 Adjusted net income – Group share N/A N/A N/A 139.7 Gross industrial investments 592 - - 592 EBITDA N/A N/A N/A 1,384.3 Current EBIT N/A N/A N/A 526.6 Current net income – Group share N/A N/A N/A 153.2(1) Non-audited figures
(2) Pro forma scope : excluding Dalkia France and Dalkia International fully consolidated in the first half of 2014
(3) Reclassification of Morocco Water operations to continuing operations
(4) See Appendix 1.3.
(5) Including the re-presented share of adjusted net income (loss) of joint ventures and associates for the half-year ended June 30, 2014
1.3. IFRIC 21 Taxes
■Thus, for the majority of impacted taxes considered as “operating income”:
Before application of IFRIC 21: evenly expensed over 12 months
After application of IFRIC 21: full amount recorded at the time of the obligating event giving rise to the tax
-- A mandatory retrospective application to January 1, 2015 for both interim and annual financial statements.
-- The impact of the application of IFRIC 21 essentially lies in a different allocation of the expense at interim closings. Accordingly, the annual consolidated financial statements will not be significantly impacted by the application of this interpretation.
IFRIC 21 impacts (€ million)
Half-year ended June 30, 2015 Half-year ended June 30, 2014 GAAP Half-year ended June 30, 2014 Pro forma EBITDA (29.0) (35.2) (28.9) Current EBIT (29.0) (35.2) (28.9) Current net income (26.8) (31.2) (27.1)2. Reconciliation of prior and new financial indicators used by the Group
The reconciliation of operating cash flow before changes in working capital and adjusted operating cash flow with the new financial indicator EBITDA is as follows:
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 Pro forma Half-year ended June 30, 2014 GAAP Operating cash flow before changes in working capital 1,256.2 1,164.7 1,054.3Share acquisition and disposal costs
+52.2+2.6
+24.6+3.8
+24.6+9.4
Inclusion: Repayments of operating financial assets +82.3 +70.4 +88.5 EBITDA 1,531.1 1,384.3 1,314.3(1) Cash restructuring charges for the half-year ended June 30, 2015 primarily related to the French Water voluntary departure program in the amount of €36.4 million. For the half-year ended June 30, 2014, they concerned the head office voluntary departure plan in the amount of €22 million.
The reconciliation of adjusted operating income with current EBIT is as follows:
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 Pro forma Half-year ended June 30, 2014 GAAP Adjusted operating income 772.7 561.0 550.9 Exclusion(*) Excluding disposal costs
In addition, the reconciliation of Current EBIT with Operating Income is as follows:
(€ million) H1 2015 H1 2014 Pro forma H1 2014 GAAP Current EBIT 712.1 526.6 520,8 Impairment losses on goodwill and negative goodwill 0.1 - (1,5) Restructuring charges 7.6 (24.0) (24.0) Employee costs – share-based payments (2.4) - - Non-current impairment of property, plant and equipment, intangible assets and operating financial assets - (13.5) (13.5) Share acquisition costs, with or without takeover - - - Operating income after share of net income of equity-accounted entities 717.4 489.1 481.83. Definitions
Net finance costs represent the cost of gross debt, including related gains and losses on interest rate and currency hedges, less income on cash and cash equivalents.
New indicators used by the Group as from the 1st quarter of 2015:
Former indicators used by the Group until December 31, 2014:
CONSOLIDATED INCOME STATEMENT
(€ million) Half-year ended June 30, 2015 Half-year ended June 30, 2014 Represented(1) Revenue 12,317.6 11,482.4 o/w Revenue from operating financial assets 84.1 87.8 Cost of sales (10,167.8) (9,589.8) Selling costs (276.5) (258.2) General and administrative expenses (1,218.0) (1,145.1) Other operating revenue and expenses 9.3 (76.6) Operating income before share of net income (loss) of equity-accounted entities 664.6 412.7 Share of net income (loss) of equity-accounted entities 52.8 69.1 o/w share of net income (loss) of joint ventures 39.7 56.2 o/w share of net income (loss) of associates 13.1 12.9 Operating income after share of net income (loss) of equity-accounted entities 717.4 481.8 Net finance costs (230.8) (234.8) Other financial income and expenses 46.8 59.6 Pre-tax net income (loss) 533.4 306.6 Income tax expense (124.2) (101.0) Share of net income (loss) of other equity-accounted entities 25.5 4.4 Net income (loss) from continuing operations 434.7 210.0 Net income (loss) from discontinued operations - (23.1) Net income (loss) for the period 434.7 186.9 Attributable to owners of the Company 352.7 131.1 Attributable to non-controlling interests 82.0 55.8 (in euros) NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE COMPANY PER SHARE (2) Diluted 0.51 0.12 Basic 0.51 0.12 NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO OWNERS OF THE COMPANY PER SHARE (2) Diluted 0.51 0.14 Basic 0.51 0.14 NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO OWNERS OF THE COMPANY PER SHARE (2) Diluted - (0.02) Basic - (0.02)(1) Pursuant to IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations, the contribution of Water activities in Morocco is no longer recognized in Assets classified as held for sale and Liabilities directly associated with assets classified as held for sale. Comparative figures for fiscal year 2014 have been reclassified accordingly.
Furthermore, IFRIC 21 is applicable on a retrospective basis on first-time application and the consolidated financial statements for the half-year ended June 30, 2014 have been represented accordingly.
(2) Basic earnings per share is calculated by dividing adjusted net income attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period. Pursuant to IAS 33.9 and IAS 12, net income attributable to owners of the Company has been adjusted to take into account the cost of the coupon payable to holders of deeply subordinated securities issued by Veolia Environnement. As of June 30, 2015, the weighted average number of shares outstanding is 548,503,826 (basic and diluted)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION: ASSETS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - ASSETS(€ million)
As of June 30,2015
As of December 31, 2014 (1) Goodwill 4,643.3 4,499.4 Concession intangible assets 2,837.8 2,750.5 Other intangible assets 970.6 990.1 Property, plant and equipment 6,717.1 6,637.5 Investments in joint ventures 2,218.3 2,043.2 Investments in associates 424.8 454.9 Non-consolidated investments 70.0 54.7 Non-current operating financial assets 1,926.1 1,882.5 Non-current derivative instruments - Assets 93.6 101.9 Other non-current financial assets 444.3 866.7 Deferred tax assets 1,161.9 1,137.3 Non-current assets 21,507.8 21,418.7 Inventories and work-in-progress 734.8 729.9 Operating receivables 9,246.2 8,650.4 Current operating financial assets 135.1 127.2 Other current financial assets 623.3 203.1 Current derivative instruments - Assets 78.7 103.0 Cash and cash equivalents 1,732.9 3,148.6 Assets classified as held for sale 60.0 343.6 Current assets 12,611.0 13,305.8 TOTAL ASSETS 34,118.8 34,724.5(1) IFRIC 21 is applicable on a retrospective basis on first-time application and the consolidated financial statements for the year ended December 31, 2014 have been represented accordingly.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION : EQUITY AND LIABILITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - EQUITY AND LIABILITIES(€ million)
As of June 30, 2015 As of December 31, 2014 (1) Share capital 2,811.5 2,811.5 Additional paid-in capital 7,165.6 7,165.6 Reserves and retained earnings attributable to owners of the Company (1,616.3) (1,664.9) Total equity attributable to owners of the Company 8,360.8 8,312.2 Total equity attributable to non-controlling interests 1,186.5 1,167.2 Equity 9,547.3 9,479.4 Non-current provisions 2,035.3 1,958.8 Non-current borrowings 7,803.7 8,324.5 Non-current derivative instruments - Liabilities 115.4 112.5 Deferred tax liabilities 1,141.4 1,135.3 Non-current liabilities 11,095.8 11,531.1 Operating payables 9,640.7 9,677.3 Current provisions 521.9 552.9 Current borrowings 2,914.8 3,003.1 Current derivative instruments - Liabilities 128.4 128.5 Bank overdrafts and other cash position items 246.9 216.4 Liabilities directly associated with assets classified as held for sale 23.0 135.8 Current liabilities 13,475.7 13,714.0 TOTAL EQUITY AND LIABILITIES 34,118.8 34,724.5(1) IFRIC 21 is applicable on a retrospective basis on first-time application and the consolidated financial statements for the year ended December 31, 2014 have been represented accordingly.
CONSOLIDATED CASH FLOW STATEMENT
(€ million) Half-year ended June 30, 2015Half-year ended June 30, 2014
Represented(1)
Net income (loss) for the period 434.7 186.9 Net income (loss) from continuing operations 434.7 210.0 Net income (loss) from discontinued operations - (23.1) Operating depreciation, amortization, provisions and impairment losses 604.1 615.7 Financial amortization and impairment losses 4.1 7.5 Gains (losses) on disposal of operating assets (9.8) (3.7) Gains (losses) on disposal of financial assets (65.6) (53.0) Share of net income (loss) of joint ventures (65.2) (60.6) Share of net income (loss) of associates (13.1) (12.9) Dividends received (1.3) (1.8) Net finance costs 230.8 234.8 Income tax expense 124.2 101.0 Other items 13.3 17.3 Operating cash flow before changes in operating working capital 1,256.2 1,054.3 Change in operating working capital requirements (628.0) (586.8) Income taxes paid (119.5) (82.2) Net cash from operating activities of continuing operations 508.7 385.3 Net cash from (used in) operating activities of discontinued operations - (5.7) Net cash from operating activities 508.7 379.6 Industrial investments, net of grants (510.4) (491.7) Proceeds on disposal of intangible assets and property, plant and equipment 44.6 28.1 Purchases of investments (42.1) (36.4) Proceeds on disposal of financial assets 250.8 278.9 Operating financial assets New operating financial assets (49.9) (61.4) Principal payments on operating financial assets 82.3 88.5 Dividends received (including dividends received from joint ventures and associates) 54.4 49.1 New non-current loans granted (59.4) (240.9) Principal payments on non-current loans 101.7 194.1 Net decrease/increase in current loans (8.6) 16.9 Net cash used in investing activities of continuing operations (136.6) (174.8) Net cash used in investing activities of discontinued operations - (17.0) Net cash used in investing activities (136.6) (191.8) Net increase (decrease) in current borrowings (763.6) (887.1) New non-current borrowings and other debts 42.7 106.2 Principal payments on non-current borrowings and other debts (175.9) (27.0) Proceeds on issue of shares - - Share capital reduction - - Transactions with non-controlling interests: partial purchases (105.5) (91.6) Transactions with non-controlling interests: partial sales - 2.1 Proceeds on issue of deeply subordinated securities - - Coupons on deeply subordinated securities (71.5) (68.0) Purchases of/proceeds from treasury shares 0.1 - Dividends paid (486.7) (245.6) Interest paid (273.9) (303.3) Net cash from (used in) financing activities of continuing operations (1,834.3) (1,514.3) Net cash from financing activities of discontinued operations - 0.4 Net cash from (used in) financing activities (1,834.3) (1,513.9) Effect of foreign exchange rate changes and other 16.0 (50.6) Increase (decrease) in external net cash of discontinued operations - 19.1 Net cash at the beginning of the year 2,932.2 4,061.3 Net cash at the end of the year 1,486.0 2,703.7 Cash and cash equivalents 1,732.9 2,874.8 Bank overdrafts and other cash position items 246.9 171.1 Net cash at the end of the year 1,486.0 2,703.7(1) Pursuant to IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations, the contribution of Water activities in Morocco is no longer recognized in Assets classified as held for sale and Liabilities directly associated with assets classified as held for sale. Comparative figures for fiscal year 2014 have been reclassified accordingly.
Furthermore, IFRIC 21 is applicable on a retrospective basis on first-time application and the consolidated financial statements for the half-year ended June 30, 2014 have been represented accordingly.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150803005523/en/
Veolia EnvironnementMedia RelationsLaurent ObadiaorSandrine GuendoulTel: + 33 (0)1 71 75 12 52sandrine.guendoul@veolia.comorAnalyst & Investor RelationsRonald Wasylec - Ariane de LamazeTel.: + 33 (0)1 71 75 12 23 / 06 00orTerri Anne Powers (United States)Tel.: + 1 312 552 2890
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