PARIS--(BUSINESS WIRE)--Regulatory News:
Veolia Environnement (Paris:VIE):
MEDIUM TERM OUTLOOK3
- 2017: 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: Continuation of revenue growth and the resumption of more sustained EBITDA growth, with an objective of more than €300 million in cost savings
- 2019: Continuation of revenue growth and full impact of cost savings. EBITDA expected between €3.3bn and €3.5bn4 (excluding IFRIC 12)
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% growth at constant exchange rates. These good results were achieved due to the efforts of each and every one of our Group’s employees, and I would like to thank them. At the end of 2015, we presented our 3-year development plan. It is based on controlled and profitable growth and accompanied by continued cost reduction efforts. Our ambition remains intact. 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.”
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At current consolidation scope and exchange rates, revenue declined
2.3% from €24,965 million in 2015 to €24,390 million in 2016.
At constant exchange rates, revenue in 2016 was nearly stable (-0.4%) compared to 2015, but increased 2.0% excluding the impact of lower energy prices (-€128 million) and excluding the impact of less construction revenue (-€484 million). The foreign exchange impact on revenue amounted to -€473 million, including -€276 million related to the decline in the U.K. pound sterling, -€91 million related to the Argentine peso, -€29 million related to the Chinese renminbi and -€39 million related to the Polish zloty.The fourth quarter posted a return to revenue growth, to +1.9% at constant exchange rates (following -2.1% in Q1, +0.1% in Q2 and -1.7% in Q3), and with a meaningful acceleration in growth excluding the impact of construction revenue and energy prices, to +3.4% at constant exchange rates in the fourth quarter (following +1.2% in Q1, +1.9% in Q2 and +1.6% in Q3).- In France, revenue declined by 1.0%. Water revenue was stable, given weak price indexation (+0.2%). In addition, the Lille contract award offset the impact of the lower water volumes (-1.5%). Waste revenue declined by 2.4%. Growth in incineration and landfill activities partially offset reduced municipal collection volumes (-10.3%) and the reduction in scrap metal revenue (Bartin divestment finalized at the end of November 2016).
- At constant exchange rates, Europe excluding France segment revenue was stable (+0.1%), but grew +1.5% 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%) which offset the impact of lower energy prices. Germany revenue improved 2.2%, with a reduction of 3.5% in Energy revenue, but a 6.1% increase in Waste revenue given good volumes. United Kingdom revenue was down 1.4% at constant exchange rates, but up 2.1% excluding construction revenue (completion of Leeds PFI).
- The Rest of the World segment revenue grew 3.7% at constant exchange rates, including +9.1% in the fourth quarter. At constant exchange rates, North America revenue was stable (+0.6%), as the integration of the sulfuric acid regeneration business from Chemours offset the impact of reduced industrial services activity and the negative impact of mild weather and lower energy prices. Latin America posted strong growth (+12.9%), as did Asia (+6.3%), driven by China (+14.8%) and Africa Middle East (+6.8%). Revenue in Australia was down by 3.1% due to reduced industrial services activity.
- Global Businesses revenue decreased by 4.1% at constant exchange rates, with growth in hazardous waste (+2.4%) and the continued downsizing of engineering activities (VWT) and civil engineering (SADE).
By business, and at constant exchange rates, Water revenue declined by 1.5% to €11,138 million due to lower construction revenue, while Waste revenue increased 0.5% to €8,401 million given a 0.6% increase in revenue due to higher volumes and service price increases of 0.8%. Energy revenue increased 0.4% 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%, +1.6% and +3.2%, respectively.The reinforcement of the percent of revenue generated by industrial clients continues, representing 45% of 2016 revenue compared with 44% in 2015.
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EBITDA improved 2.0% at current consolidation scope and exchange
rates (+4.3% at constant exchange rates) to €3,056 million
- Exchange rate movements negatively impacted EBITDA growth by -€71 million.
- EBITDA benefited from continued cost reduction efforts in the amount of €245 million in 2016, exceeding the initial objective of €200 million, and more than offsetting the net effect of price net of cost inflation of -€76 million, the negative impact of French Water renegotiations of -€31 million and diverse non-recurring items of -€46 million.
- By segment: France EBITDA amounted to €751 million, down 8.1%. French Water EBITDA was lower due to the combined impact of lower water volumes, very weak price indexation and the impact of contract renegotiations, while French Waste EBITDA also declined given an unfavorable comparison base in 2015 and the decline in scrap metal prices. At constant exchange rates, EBITDA in the Europe excluding France segment grew significantly (+9.1% to €1,160 million) due to improvement in all geographies. EBITDA in the Rest of the World segment also grew substantially (+10% at constant exchange rates) due to good performance in Asia, Latin America and the consolidation of the sulfuric acid regeneration activity in the United States. Global Businesses EBITDA also recorded strong improvement at constant exchange rates (+17.5%) due to the improvement in results in engineering businesses and good growth in hazardous waste.
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Current EBIT grew 5.2% at current consolidation scope and exchange
rates (+8.5% at constant exchange rates) from €1,315 million in 2015
to €1,384 million in 2016.
Exchange rate movements negatively impacted current EBIT by -€44 million.- Current EBIT mainly benefited from solid EBITDA growth
- The contribution of the share of net income of joint ventures and associates amounted to €94 million in 2016 compared with €99 million in 2015.
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Strong growth in current net income - Group share (+5.1% at current
consolidation scope and exchange rates, +10.8% at constant exchange
rates) to €610 million compared with €580 million in 2015.
Excluding net financial capital gains, current net income – Group share increased 19.3% at constant exchange rates.- The cost of net financial debt declined by €22 million to -€424 million
- Current income tax rate amounted to 25.7%
- Non-controlling interests (current) were stable at -€109 million.
- Net income – Group share amounted to €382 million in 2016 compared with €450 million in 2015. 2016 net income included restructuring charges amounting to -€163 million, non-current provisions and asset impairments, as well as the contribution from Transdev, which increased due to the divestment of 20% of Transdev by the Group.
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Record net free cash flow of €970 million and subsequent reduction
in net financial debt to €7,811 million at December 31, 2016, compared
with €8,170 million at December 31, 2015.
- Veolia generated net free cash flow of €970 million in 2016, following €856 million in 2015, due to higher EBITDA, continued capex discipline (industrial capex amounted to €1,485 million, stable compared to 2015), and another year of significantly reduced (by €270 million) operating working capital requirements.
- Net financial debt at December 31, 2016 amounted to €7,811 million, down €359 million compared with December 31, 2015. It benefited from a favorable foreign exchange impact of €279 million and includes the impact of €156 million in acquisitions, net of divestitures.
- The leverage ratio once again improved, dropping to 2.56x in 2016 compared with 2.73x in 2015.
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Proposal to pay a dividend of €0.80 per share, paid 100% in cash
relative to the 2016 fiscal year, compared with €0.73 per share for
the 2015 fiscal year.
- At the Annual General Shareholders Meeting to be held on April 20, 2017, Veolia’s Board of Directors will propose a dividend payment of €0.80 per share in relation to the 2016 fiscal year, payable in cash. The ex-dividend date will be April 24, 2017. The dividend payment is expected to commence on April 26, 2017.
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Outlook*
-
2017: A transition year
- Resumption of revenue growth
- Stable EBITDA, or moderate EBITDA growth
- Increased efforts to reduce costs: more than €250 million in cost savings
-
2018
- Continuation of revenue growth
- Resumption of more sustained EBITDA growth
- More than €300 million in cost savings
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2019
- Continuation of revenue growth and full impact of cost savings
- EBITDA between €3.3bn and €3.5bn** (excluding IFRIC 12)
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2017: A transition year
* At constant exchange rates
** Equivalent to €3.4bn to
€3.6bn (excluding IFRIC 12) and before taking into account the
unfavorable exchange rate impacts recorded in 2016
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Definitions of all financial indicators used in this press release can be found at the end of this document.
Veolia group is the global leader in optimized resource management. With over 174,000 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 2015, the group Veolia supplied 100 million people with drinking water and 63 million people with wastewater service, produced 63 million megawatt hours of energy and converted 42.9 million metric tons of waste into new materials and energy. Veolia Environnement (listed on Paris Euronext: VIE) recorded consolidated revenue of €25.0 billion in 2015. www.veolia.com
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 YEAR ENDING DECEMBER 31, 2016
A] PREFACE: CHANGE IN CONCESSION STANDARDS
Under concession contracts with local authorities, infrastructure is accounted, as appropriate, as an intangible asset, a financial receivable, or a combination of the two. Veolia may have a payment obligation vis-a-vis the grantor to utilize the associated assets.
In July 2016, IFRIC published a verdict regarding these payments and concluded that in the case of fixed payments required by the operator, an asset and a liability should be recorded (intangible model)
Veolia identified the contracts concerned and will apply the new IFRIC 12 measures retroactive to 1/1/2015. The most significant contracts concerned are our water concessions in the Czech Republic and Slovakia.
RECONCILIATION OF 2015 AND 2016 FIGURES EXCLUDING AND INCLUDING IMPACTS OF THE ADOPTION OF THE IFRIC 12 INTERPRETATION
(in € million) |
December 31, 2016, |
IFRIC 12 impacts |
December 31, 2016, |
||||
Revenue | 24,390.2 | - | 24,390.2 | ||||
EBITDA | 3,056.0 | 202.4 | 3,258.4 | ||||
Current EBIT | 1,383.9 | 92.6 | 1,476.5 | ||||
Current financial expenses | (453.6) | (90.3) | (543.9) | ||||
Net income – Group share | 382.2 | 0.9 | 383.1 | ||||
Current Net income – Group share | 609.8 | 0.9 | 610.7 | ||||
Industrial capex | 1,485 | 112 | 1,597 | ||||
Net Free cash flow | 970 | - | 970 | ||||
Net financial debt | 7,811 | - | 7,811 | ||||
Post-tax ROCE | 7.2% | 7.4% | |||||
(in € million) |
December 31, 2015, |
IFRIC 12 impacts |
December 31, 2015, |
||||
Revenue | 24,964.8 | - | 24,964.8 | ||||
EBITDA | 2,997.2 | 185.4 | 3,182.6 | ||||
Current EBIT | 1,315.2 | 78.1 | 1,393.3 | ||||
Current financial income and expenses | (418.0) | (94.1) | (512.1) | ||||
Net income – Group share | 450.2 | (12.5) | 437.7 | ||||
Current Net income – Group share | 580.1 | (12.5) | 567.6 | ||||
Industrial capex | 1,484 | 91 | 1,576 | ||||
Net Free cash flow | 856 | - | 856 | ||||
Net financial debt | 8,170 | - | 8,170 | ||||
Post-tax ROCE | 6.8% | 7.0% | |||||
Revenue, net free cash flow and net financial debt are not impacted by the adoption of the IFRIC 12 interpretation.
B] KEY FIGURES EXCLUDING THE IMPACT OF IFRIC 12
The data for the year ended December 31, 2016, presented in this press release do not include the impact of the re-presentations relating to the adoption of the IFRIC 12 interpretation.
(in € million) |
Year ended |
Year ended |
Δ |
Δ at constant |
|||||
Revenue | 24,964.8 | 24,390.2 | -2.3% | -0.4% | |||||
EBITDA | 2,997.2 | 3,056.0 | +2.0% | +4.3% | |||||
EBITDA margin | 12.0% | 12.5% | |||||||
Current EBIT (1) | 1,315.2 | 1,383.9 | +5.2% | +8.5% | |||||
Current Net income – Group share | 580.1 | 609.8 | +5.1% | +10.8% | |||||
Current net income – Group share, |
527.6 | 597.0 | +13.2% | +19.3% | |||||
Net income – Group share | 450.2 | 382.2 | |||||||
Current net income - Group share - per |
1.06 | 1.11 | |||||||
Current net income - Group share - per |
1.06 | 1.07 | |||||||
Dividend per share | 0.73 | 0.80 (3) | |||||||
Industrial capex | 1,484 | 1,485 | |||||||
Net Free cash flow (2) | 856 | 970 | |||||||
Net financial debt | 8,170 | 7,811 |
(1) Including the share of current net income of joint ventures and
associates viewed as core Company activitie
(2) See
definition in Appendix
(3) Subject to the approval of
General Shareholders’ Meeting of April 20, 2017
The main foreign exchange impacts were as follows:
Foreign exchange impacts as of December |
% | €M | |||
Revenue | -1.9% | (473) | |||
EBITDA | -2.4% | (71) | |||
Current EBIT | -3.3% | (44) | |||
Current net income | -5.7% | (33) | |||
Net financial debt | +3.4% | +279 | |||
C] INCOME STATEMENT EXCLUDING THE IMPACT OF IFRIC 12
1. Revenue
Group consolidated revenue stood at €24,390.2 million for the year ended December 31, 2016, compared to €24,964.8 million for the year ended December 31, 2015, a decrease of -0.4% at constant exchange rates. Excluding Construction revenue 5 and the impact of lower energy prices, revenue increased +2.0% at constant exchange rates.
Revenue posted an upturn of +1.9% at constant exchange rates in the 4th quarter (after -2.1% in the 1st quarter, +0.1% in the 2nd quarter, and -1.7% in the 3rd quarter at constant exchange rates), reflecting the Group’s return to growth. Excluding Construction and the impact of energy prices, 4th quarter revenue rose by +3.4% at constant exchange rates (compared to +1.2% in the 1st quarter, +1.9% in the 2nd quarter, and +1.6% in the 3rd quarter).
The municipal sector generated 55% of 2016 revenue (i.e. around €13 billion), and the industrial sector generated 45% (i.e. around €11 billion).
The change in revenue between 2015 and 2016 breaks down by main impact as follows:
The foreign exchange impact on revenue amounted to -€473.2 million (-1.9% of revenue) and mainly reflects fluctuations in the value of the euro against the U.K. pound sterling (-€275.8 million), the Argentine peso (-€90.6 million), the Japanese yen (+€43.9 million), the Polish zloty (-€38.9 million), the Mexican peso (-€27.3 million), and the Chinese renminbi (-€29.2 million).
The decrease in Construction revenue (-€484 million, representing -1.9% of Group revenue) essentially concerns Veolia Water Technologies and SADE for -€345 million, as well as the completion of construction work on the Leeds and Shropshire PFI incinerators in the United Kingdom (-€80 million).
Group revenue was affected by the decline in energy prices (-0.5%), primarily in the United States and in Central Europe.
The positive business momentum (Commerce/Volumes and scope impact) of +€423 million was due to:
- an increase in volumes, in line with the solid growth of the Waste business in the UK and Germany, as were as good performance in Energy in China, Africa and the Middle East, and Hazardous Waste. These positive effects were partially offset by a decrease in Water volumes in France (-€23 million) and a downturn in industrial services in North America and Australia;
- a favorable weather impact in Central Europe (+€61 million) , but a negative impact in the United States (-€23 million);
- solid commercial momentum with contract wins in Waste in Germany and the UK, and the integration of the water cycle optimization contract for a petrochemical complex in China (Sinopec, for +€56 million over 7 months), as well as the commissioning of new assets (particularly the Leeds incinerator in the UK);
- changes in consolidation scope (+€207 million), and in particular the integration of the assets of the Chemours Sulfur Products division in July 2016 (€109 million over 6 months), the CDR Pedreira landfill site in Brazil in May 2016, Kurion in the US, Prague Left Bank in the Czech Republic, and operations carried out in 2015 (particularly the acquisition of Altergis in Energy in France, and an entity specializing in plastics recycling in the Netherlands, AKG).
Favorable price effects were the result of tariff indexations that remain positive, although moderate, and the favorable price impact from recycled materials (+€15 million, particularly paper).
1.1 Revenue by segment
In M€
|
Year ended |
Year ended |
Δ |
Δ at constant |
Δ at constant exchange |
||||||
France | 5,471.5 | 5,417.7 | -1.0% | -1.0% | -0.9% | ||||||
Europe |
8,574.7 | 8,286.3 | -3.4% | +0.1% | +2.3% | ||||||
Rest of the |
5,926.1 | 6,028.4 | +1.7% | +3.7% | +5.0% | ||||||
Global |
4,881.0 | 4,626.2 | -5.2% | -4.1% | +3.0% (*) | ||||||
Other | 111.5 | 31.6 | - | - | - | ||||||
Group revenue | 24,964.8 | 24,390.2 | -2.3% | -0.4% | +2.0% |
(*) Global businesses include Hazardous waste activities, and Solutions and Technologies activities in Water (sensitive to fluctuations in construction contracts)
The revenue trend in the 4th quarter of 2016 was marked by a turnaround, driven by the growth of Europe excluding France and the Rest of the world:
Δ at constant exchange rates, excluding IFRIC 12 |
1st quarter |
2nd quarter |
3rd quarter |
4th quarter |
|||||
France | +0.2% | -0.7% | -1.3% | -2.1% | |||||
Europe excluding France | -0.9% | +0.3% | -0.6% | +1.5% | |||||
Rest of the World | -2.4% | +1.9% | +6.3% | +9.1% | |||||
Global Businesses | -2.9% | -0.9% | -11.4% | -1.1% | |||||
Group | -2.1% | +0.1% | -1.7% | +1.9% | |||||
Total Group excluding the |
+1.2% | +1.9% | +1.6% | +3.4% | |||||
FRANCE
Revenue in France for the year ended December 31, 2016 was €5,417.7 million, down by -1.0% compared with the prior year. Excluding the impact of Construction activities and energy prices, revenue decreased -0.9%.
- Water business revenue was up slightly by +0.3% compared to December 31, 2015. The positive commercial impact of new contracts (particularly the Ileo contract in Lille) was mitigated by unfavorable contractual renegotiations (renewal of the Greater Lyon and Cobas contracts and the transfer of the Montpellier contract to the municipality), reduced revenue related to Construction activity, low tariff indexation increases of +0.2% (compared to +0.3% in 2015), and a decrease in volumes sold of -1.5%.
- Waste business revenue declined -2.4% over the year. Despite the sound level of incineration activities and landfill volumes (+5.4%), and positive commercial impacts in the sorting and recovery of industrial waste and incineration, revenue was impacted by a drop in municipal and commercial collection volumes and a decrease in recycled material volumes and prices (plastics and ferrous scrap metals). The commercial portfolio nevertheless grew substantially in the 2nd half, with a strong contract renewal rate (Le Mans and Nancy incinerators), contract wins (Troyes incinerator, Cergy collection contract, etc.), and the acquisition of an entity specializing in the recovery of plastics in December 2016 (PMG).
EUROPE EXCLUDING FRANCE
Revenue in the Europe excluding France segment for the year ended December 31, 2016 amounted to €8,286.3 million, up +0.1% at constant exchange rates compared to the year ended December 31, 2015. Revenue posted an upturn of +1.5% at constant exchange rates in the 4th quarter, after virtual stability throughout the year: -0.9% in the 1st quarter, +0.3% in the 2nd quarter, and -0.6% in the 3rd quarter.
Excluding the impact of Construction activities and energy prices, revenue increased +2.3% at constant exchange rates for the year.
This increase breaks down as follows:
- In Central Europe, revenue was stable at constant exchange rates for the year ended December 31, 2016. Following a decline throughout the year, there was a clear turnaround in revenue in the 4th quarter (+3.7% at constant exchange rates), particularly in the Czech Republic thanks to a favorable weather impact and the start of the Prague Left Bank contract. Revenue for the year benefited from higher Water tariffs and volumes in the Czech Republic, the favorable weather impact in Lithuania, Poland, the Czech Republic and Hungary, and the start up of two co-generation plants in Hungary (Debrecen and Nyiregyhaza). These factors were offset by lower Energy tariffs and volumes (heat, electricity) in the Czech Republic and Lithuania in the first half.
- UK and Ireland: revenue was down -1.3% at constant exchange rates for the year ended December 31, 2016. Penalized by a first half that was down -3.4% at constant exchange rates, revenue for the UK and Ireland nevertheless rose by +0.8% in the 2nd half. Despite the decline for Construction, revenue was boosted by the development of the commercial collection activity (particularly the new Sainsbury contract and the new wood recycling activity in Bristol), new municipal Waste contracts (St Albans, Southend-on-Sea, and Hampshire), higher volumes and prices for recycled materials (paper, metals), the solid performance of the Energy businesses, and the commissioning of the Leeds incinerator at the end of 2015.
- Northern Europe: revenue momentum was confirmed throughout the year and rose +5.9% at constant exchange rates for the year ended December 31, 2016. While Germany benefited from the strong growth in Waste and the integration of new contracts (particularly the industrial parks purchased from Nuon), the other Northern Europe countries were driven by the integration of the plastics recycler AKG in the Netherlands and contract wins in Scandinavia.
- Italy: Energy business revenue fell -11.5%.
REST OF THE WORLD
Revenue in the Rest of the World segment for the year ended December 31, 2016 was €6,028.4 million, up +3.7% at constant exchange rates compared to the year ended December 31, 2015. After a decrease of -2.4% at constant exchange rates in the 1st quarter, revenue continuously improved throughout the year: +1.9% in the 2nd quarter, +6.3% in the 3rd quarter, and +9.1% in the 4th quarter.
Excluding the impact of Construction activities and energy prices, Rest of the World revenue increased +5.0% at constant exchange rates.
Rest of the World revenue reflects solid growth across the region, with the exception of Australia:
- In Latin America (+12.9% at constant exchange rates for the year ended December 31, 2016), where revenue growth throughout the year accelerated further in the 4th quarter in Argentina, Brazil and Mexico. Revenue for the year benefited from higher tariffs, essentially for Waste in Argentina (as well as Brazil, Mexico and Colombia), mitigated by the scheduled termination of the Avellaneda contract in January 2016. Activity growth in Mexico essentially stems from the increase in water volumes invoiced, while Brazil benefitted from the positive impact relating to the acquisition of the Pedreira landfill site and the win of a new Water contract.
- In North America, revenue rose +0.6% at constant exchange rates. Following a first half decline of -9.4% at constant exchange rates, penalized by a drop in gas prices in Energy, fall in heating volumes sold (due to a very mild winter), and a downturn in industrial services, there was a major upturn in revenue in the 2nd half with growth of +12.0% at constant exchange rates. This revenue momentum is primarily due to the integration of the Chemours Sulfur Products division’s assets.
- In Asia, revenue rose sharply by +6.3% at constant exchange rates. In China, revenue growth accelerated in the 4th quarter (+34.6% at constant exchange rates), the result of the Sinopec integration, the increase in volumes sold in Energy for the Harbin and Jiamusi heating networks and in industrial contracts (Hongda contract), despite a decrease in energy prices (heating and electricity). Revenue growth in Japan rose by +6.1% at constant exchange rates for the year ended December 31, 2016, in relation to the development of the customer service activity (launch of the Tokyo contract in 2015) and the O&M Water activity (Omuta contract).
- In Africa and the Middle East, sustained revenue growth (+6.8% at constant exchange rates for the year ended December 31, 2016) covered all the zone’s countries. The growth was mainly based on electricity sales in Gabon and business development in the Middle East.
The good growth in the Rest of the World segment was offset by lower revenue in Australia (-3.1% at constant exchange rates). In the Waste business, the increase in collection and treatment activities only partially offset the fall in industrial services.
GLOBAL BUSINESSES
The Global Businesses segment reported revenue of €4,626.2 million for year the ended December 31, 2016, down -4.1% at constant exchange rates compared to the year ended December 31, 2015. After a decrease of -5.2% at constant exchange rates for the nine months period ended September 30, 2016, the decline in 4th quarter revenue was less significant at -1.1% at constant exchange rates.
Excluding the impact of Construction activities and energy prices, revenue increased +3.0% at constant exchange rates.
The change in revenue was mainly due to:
- The solid growth of Hazardous Waste activities (+2.4% at constant exchange rates), tied particularly to treatment and recovery activities (launch of the Paris subway line 14 worksite), landfill activities, an increase in industrial clean-up services, and solid performance in industrial maintenance;
- The decline in Construction activities at SADE: the fall in international activities following the postponement of projects to the end of 2016 and the downturn in construction in France were slightly offset by solid Telecom performance; SADE revenue nevertheless improved in the 4th quarter (+11.4% at constant exchange rates) with an increase in the backlog for France and internationally;
- The gradual downsizing of Veolia Water Technologies activities was reflected by the end of major projects, particularly desalinization in the Middle East, and the decline in the Solutions activity. The Veolia Water Technologies backlog declined by 6% to €1.8 billion mainly due to fewer Oil & Gas orders in the US.
1.2 Revenue by business
In M€
|
Year ended |
Year ended |
Δ |
Δ at constant |
Δ at constant exchange |
||||||
Water | 11,356.1 | 11,137.7 | -1.9% | -1.5% | +1.8% | ||||||
Waste | 8,684.1 | 8,401.2 | -3.3% | +0.5% | +1.6% | ||||||
Energy | 4,924.6 | 4,851.3 | -1.5% | +0.4% | +3.2% | ||||||
Group | 24,964.8 | 24,390.2 | -2.3% | -0.4% | +2.0% | ||||||
WATER
Water revenue declined -1.5% at constant exchange rates year-on-year, and increased +1.8% at constant exchange rates excluding the impact of the Construction activity and energy prices. This decline can be explained as follows:
- Stable Operations activities. In France, the positive commercial impact of new contract wins (Lille) offset the -1.5% decrease in volumes and weak price indexations (+0.2%), while Central Europe benefited from sound volumes;
- The decrease in Veolia Water Technologies and SADE construction revenue (impact of -€345 million).
WASTE
Waste revenue rose +0.5% at constant exchange rates year-on-year, and +1.6% at constant exchange rates excluding the impact of the decrease in Construction activity, in relation, overall, to a positive volume impact of +0.6%, and a service price impact of +0.8%, and more specifically:
- a solid performance in the UK excluding Construction activities thanks to new contracts and the commissioning of the Leeds incinerator;
- clear growth in Germany, the result of solid commercial activity, and higher volumes and recycled paper prices of 11%;
- solid growth in hazardous waste (+2.4% at constant exchange rates);
- the integration of the Pedreira landfill site in Brazil;
- mitigated by a weak Industrial Services performance in the United States and Australia;
- and a slight decline in France, where commercial successes and the solid level of incineration activities and landfill volumes were offset by a drop in municipal collection volumes of -10.3%.
ENERGY
Energy revenue rose 0.4% at constant exchange rates year-on-year, and increased +3.2% at constant exchange rates excluding the decrease in energy prices (impact of -€115 million). This increase can be explained as follows:
- a favorable weather impact of +€35 million: positive in Central Europe (+€61 million), but negative in the United States (-€23 million);
- the progression in Energy activities in China, specifically heating networks and industrial contracts.
2. Other income statement items
2.1 EBITDA
Changes in EBITDA by segment were as follows:
2015 / 2016 change | |||||||||
(in € million) |
Year ended |
Year ended |
Δ |
Δ at constant |
|||||
France | 816.4 | 750.6 | -8.1% | -8.1% | |||||
Europe excluding France | 1,104.1 | 1,159.6 | +5.0% | +9.1% | |||||
Rest of the World | 805.0 | 861.5 | +7.0% | +10.0% | |||||
Global Businesses | 225.8 | 262.7 | +16.4% | +17.5% | |||||
Other | 45.9 | 21.6 | - | - | |||||
EBITDA | 2,997.2 | 3,056.0 | +2.0% | +4.3% | |||||
EBITDA margin | 12.0% | 12.5% | |||||||
In 2016, the Group’s consolidated EBITDA amounted to €3,056.0 million, an increase of 4.3% at constant exchange rates compared to 2015, generating an improvement in the EBITDA margin (12.5% in 2016, compared to 12.0% in 2015).
This improvement in EBITDA was primarily due to operational efficiency, with cost savings in the amount of €245 million.
Changes in EBITDA by segment between 2015 and 2016 were as follows:
-
EBITDA declined in France:
- in the Water business, despite cost savings, EBITDA was penalized by a -1.5% drop in volumes (impact of -€20 million), the negative impact of the price/cost squeeze (-€26 million), relating to very weak tariff indexations (+0.2%), and the negative effect of contractual renegotiations (-€31 million);
- in the Waste business, EBITDA was also down despite cost savings, due to negative price effects and non-recurring items in 2015.
-
in Europe excluding France, solid growth in EBITDA and
particularly:
- in Central and Eastern Europe, thanks to cost savings efforts and a favorable weather impact (+€23 million);
- In the UK, thanks to efficiency plans, PFI contracts, and the favorable impact of recycled materials (higher paper prices);
- In Germany, in line with solid activity in Waste, efficiency gains, and the payment of an insurance claim.
-
Ongoing growth in the Rest of the World segment:
- In the US, EBITDA rose by +8.7% at constant exchange rates. In the Industrial sector, the decline in the industrial services activity (specifically with Oil & Gas clients) was offset by the restructurings initiated in the 1st quarter and the consolidation of the Chemours Sulfur Products division’s assets (+€22 million over 6 months). In the Municipal sector, the weather-related fall in volumes, and the negative price impact in Energy, were offset by efficiency measures.
- In China, EBITDA rose 26.3% at constant exchange rates, driven by the substantial increase in industrial water (integration of Sinopec), hazardous waste (commissioning of the Changsha incinerator) and heating networks (Harbin), and ongoing cost-cutting.
- In the Global Businesses segment, EBITDA for Veolia Water Technologies doubled compared to 2015. The segment’s restructuring, in addition to the favorable resolution of a contract termination resulted in an improved margin (4% in 2016, compared to 1.7% in 2015). Hazardous waste posted a solid performance over the year.
The change in EBITDA between 2015 and 2016 breaks down by main impact as follows:
The foreign exchange impact on EBITDA was negative, amounting to -€71.4 million. It mainly reflects fluctuations of UK the pound sterling (-€38.2 million), South American currencies (-€14.7 million, essentially the Argentine peso), the Chinese renminbi (-€8.7 million) and the Polish zloty (-€8.3 million).
Prices effects, net of cost inflation, had a negative impact, notably in France, in line with the very low indexation of contracts.
The impact of French Water contract renegotiations amounted to -€31 million.
The volumes, commerce and scope impacts are favorable, in the amount of +€38 million:
- EBITDA was impacted by lower volumes in France for Water (-€20 million), Waste (decrease in municipal collection), and industrial services in the US and Australia. These items were offset by the commissioning of new assets, a solid performance for Hazardous Waste and a favorable weather impact (+€15 million);
- The commerce impacts were particularly driven by development in China (integration of Sinopec);
- Scope impacts for +€39.1 million mainly concern the integration of the Chemours Sulfur Products division’s assets in July 2016 (+€22 million), and the acquisition of the CDR Pedreira landfill site in Brazil in May 2016.
Cost-savings plans contributed €245 million. They mainly cover operational efficiency (for 42%) and purchasing (35%). They were achieved across all geographical zones: France (31%), Europe excluding France (26%), Rest of the World (26%), Global Businesses (12%) and Corporate (5%).
EBITDA impact |
2016 – 2018 cumulative |
2016 objective | 2016 achievement | ||||
Gross savings | 600 | 200 | 245 | ||||
Other changes mainly concern one-off items in the amount of -€46 million, particularly in France.
2.2 CURRENT EBIT
Changes in current EBIT by segment were as follows:
2015 / 2016 change | |||||||||
(in € million) |
Year ended |
Year ended |
Δ |
Δ at constant |
|||||
France | 197.1 | 129.5 | -34.3% | -34.3% | |||||
Europe, excluding France | 558.9 | 638.3 | +14.2% | +19.1% | |||||
Rest of the World | 465.9 | 463.1 | -0.6% | +2.5% | |||||
Global Businesses | 99.2 | 153.7 | +54.8% | +56.9% | |||||
Other | (5.9) | (0.7) | - | - | |||||
Current EBIT | 1,315.2 | 1,383.9 | +5.2% | +8.5% | |||||
The Group’s consolidated current EBIT for the year ended December 31, 2016 amounted to €1,383.9 million, up significantly by +8.5% at constant exchange rates compared to 2015.
This positive increase in Current EBIT was mainly due to:
- the improvement in Group EBITDA;
- the increase in depreciation and amortization charges at constant exchange rates by +3.1%, in line with scope impacts in France, the UK and the US;
- the favorable change in net operating provision reversals;
- the positive change in gains on disposals of industrial assets, relating to the continuous review of industrial asset portfolios;
- the moderately negative change in the contribution of equity-accounted entities relating to scope impacts in the UK, while the Chinese concessions posted growth at constant exchange rates.
The foreign exchange impact on Current EBIT was negative at -€43.8 million and mainly reflects fluctuations of the UK pound sterling (-€24.1 million), South American currencies (-€7.5 million, including the Argentine peso), and the Chinese renminbi (-€7.7 million).
The reconciling items between EBITDA and Current EBIT as of December 31, 2016 and 2015 are as follows:
In € million, excluding IFRIC 12 |
Year ended |
Year ended |
|||
EBITDA | 2,997.2 | 3,056.0 | |||
Renewal expenses | (278.4) | (272.4) | |||
Depreciation and amortization (*) | (1,549.4) | (1,566.3) | |||
Provisions, fair value adjustments & other: | 47.1 | 72.4 | |||
|
(28.3) | (26.4) | |||
|
75.4 | 98.8 | |||
Share of current net income of joint ventures and associates | 98.7 | 94.2 | |||
Current EBIT | 1,315.2 | 1,383.9 | |||
(*) Including principal payments on operating financial assets
(OFA) of -€201.2 million for the year ended December 31, 2016
(compared to -€173,1 million |
Depreciation and amortization charges (-€1,394.2 million for the year ended December 31, 2016) are up +3.1% at constant exchange rates, or -€42.7 million compared to depreciation and amortization charges for the year ended December 31, 2015 (-€1,380.6 million) mainly due to acquisitions and the commissioning of new assets.
Capital gains and losses on disposals of industrial assets for the year ended December 31, 2016 concern capital gains on the disposal of industrial assets in relation to the continuous review of industrial asset portfolios.
The share of current net income of joint ventures and associates comprises the UK entities (Water and Waste) for €9 million (versus €15.9 million for the year ended December 31, 2015, due to movements in scope), and Chinese Water and Waste entities for €44.3 million (compared to €44.8 million for the year ended December 31, 2015). The Chinese Water concessions nevertheless rose at constant exchange rates (€35.8 million in 2015, versus €36.2 million in 2016).
Net charges to operating provisions for the year ended December 31, 2016 include net provision reversals, particularly usual provision reversals related to landfill site remediation (mainly in France and the United Kingdom), and provision reversals in relation to the removal of certain risks in France and Italy. For the year ended December 31, 2015, this heading included a provision reversal for the “Olivet” contracts in the Water activities in France and the removal of certain risks in France and Australia.
2.3 Analysis of EBITDA and Current EBIT by segment
FRANCE
In € million |
Year ended |
Year ended |
Δ |
Δ at constant |
|||||
EBITDA | 816.4 | 750.6 | -8.1% | -8.1% | |||||
EBITDA margin | 14.9% | 13.9% | |||||||
Current EBIT | 197.1 | 129.5 | -34.3% | -34.3% | |||||
EBITDA in France fell -8.1% during the year.
In the Water business, cost savings only partially offset contractual erosion of -€31 million (margin degradation), lower volumes, and the negative impact of price effects net of inflation.
EBITDA also fell in the Waste business despite cost savings. The decline is due to a decrease in revenue, unfavorable price impacts net of inflation, and the absence of non-recurring items that benefited 2015.
Current EBIT fell in France due to the fall in EBITDA.
EUROPE, EXCLUDING FRANCE
In € million |
Year ended |
Year ended |
Δ |
Δ at constant |
|||||
EBITDA | 1,104.1 | 1,159.6 | +5.0% | +9.1% | |||||
EBITDA margin | 12.9% | 14.0% | |||||||
Current EBIT | 558.9 | 638.3 | +14.2% | +19.1% | |||||
The EBITDA of the Europe excluding France segment increased significantly in most countries and particularly:
- in the UK, in line with the excellent performance of facilities (commissioning of the PFI in Leeds) and the favorable impact of recycled materials;
- in Central Europe, the solid EBITDA performance was particularly marked in Poland and Hungary, and benefited from a favorable weather impact;
- In Northern Europe where Germany in particular was driven by Waste growth, and the payment of an insurance claim.
The rise in EBITDA in Europe excluding France also reflected cost savings efforts undertaken in all geographic areas.
Current EBIT in Europe excluding France increased due to the improvement in EBITDA and the positive change in operating provisions and in particular related to landfills in the UK.
REST OF THE WORLD
In € million |
Year ended |
Year ended |
Δ |
Δ at constant |
|||||
EBITDA | 805.0 | 861.5 | +7.0% | +10.0% | |||||
EBITDA margin | 13.6% | 14.3% | |||||||
Current EBIT | 465.9 | 463.1 | -0.6% | +2.5% | |||||
Rest of the World EBITDA grew significantly in Asia, as well as in Latin America and North America.
Asia EBITDA posted solid growth throughout the year, driven by cost reductions and the increase in revenue, particularly in China and Japan. In China, EBITDA benefited from the substantial increase in Industrial water (integration of the Sinopec contract), Hazardous Waste (commissioning of the Changsha incinerator) and heating networks, particularly Harbin.
EBITDA in Latin America was up sharply in the 2nd half, particularly in Argentina, in line with the change in revenue.
Following a decline in the first half, particularly regarding Energy, North America EBITDA rebounded in the 2nd half thanks to cost-cutting efforts and the integration of the Chemours Sulfur Products division’s assets, which offset the decline in revenue in industrial services and the lower gas price in Energy.
Rest of the World Current EBIT was up at constant exchange rates, but to a lesser extent than EBITDA growth, penalized by higher depreciation and amortization charges relating to the integration of the Chemours Sulfur Products division’s assets, the negative change in operating provisions in the US and Australia, and the early repayment of a receivable in Korea. Results of the Chinese Water concessions, recorded within the share of net income (loss) of joint ventures and associates rose at constant exchange rates.
GLOBAL BUSINESSES
In € million |
Year ended |
Year ended |
Δ |
Δ at constant |
|||||
EBITDA | 225.8 | 262.7 | +16.4% | +17.5% | |||||
EBITDA margin | 4.6% | 5.7% | |||||||
Current EBIT | 99.2 | 153.7 | +54.8% | +56.9% | |||||
EBITDA of the Global Businesses segment is up significantly:
- In Construction activities (VWT and Sade), EBITDA benefited from cost savings efforts, the improvement in margins and the favorable resolution of a contract termination.
- In Hazardous waste, the EBITDA increase arises from a strong performance and the pursuit of efficiency plans.
Current EBIT of Global Businesses also rose thanks to the increase in EBITDA and the favorable comparison effect in relation to asset impairments in Hazardous waste in 2015.
2.4 Net financial expense
In € million, excluding IFRIC 12 |
Year ended December 31, |
Year ended December |
|||
Cost of net financial debt (1) | (445.9) | (423.6) | |||
Gains (losses) on disposals of financial assets (*) | 59.5 | 12.8 | |||
Net gains / losses on loans and receivables | 25.5 | 9.0 | |||
Net income (loss) on available-for-sale assets | 4.0 | 5.0 | |||
Foreign exchange gains and losses | 6.4 | 5.3 | |||
Unwinding of the discount on provisions | (39.0) | (41.7) | |||
Other | (28.5) | (20.4) | |||
Other current financial income and expenses (2) | 27.9 | (30.0) | |||
Current net financial expenses (1)+(2) | (418.0) | (453.6) | |||
Other non-current financial income and expenses (**) | - | 25.7 | |||
NET FINANCIAL EXPENSES | (418.0) | (427.9) | |||
(*) Including costs of financial divestitures |
|||||
(**) Primarily related to the impact of the sale of 20% of Transdev |
|||||
COST OF NET FINANCIAL DEBT
The cost of net financial debt totaled -€423.6 million for the year ended December 31, 2016, versus -€445.9 million for the year ended December 31, 2015, representing a decrease of €22.3 million.
This decline in the cost of net financial debt mainly reflects the repayment of the inflation-indexed bond using available cash in June 2015, bond refinancing under better conditions, the Group’s active debt management, and a positive exchange rate impact of €6 million, offsetting the increase in the cost of foreign exchange derivatives.
The financing rate fell from 5.0% for the year ended December 31, 2015 to 4.95% for the year ended December 31, 2016.
OTHER FINANCIAL INCOME AND EXPENSES
Other current financial income and expenses totaled -€30.0 million for the year ended December 31, 2016, versus €27.9 million for the year ended December 31, 2015.
Other current financial income and expenses included the impacts of financial divestitures for €12.8 million, and notably impacts related to fair-value remeasurement of previously-held equity interests in France and China. For the year ended December 31, 2015, capital gains or losses on financial divestitures amounted to €59.5 million, including the capital gain on the disposal of the Group’s Israel activities.
Net gains/losses on loans and receivables for the year ended December 31, 2015 included the interest on the loan to Transdev, repaid in full in March 2016.
Other non-current financial income and expenses for the year ended December 31, 2016 primarily concern the Group’s sale of 20% of Transdev.
2.5 Income tax
The income tax expense for the year ended December 31, 2016 amounted to -€192.3 million, compared to -€199.5 million for the year ended December 31, 2015.
The tax rate for the year ended December 31, 2016 declined to 25.7% (versus 28.0% for the year ended December 31, 2015), after adjustment for the impact of financial divestitures, non-current items within net income of fully controlled entities, and the share of net income of equity-accounted companies.
In € million, excluding IFRIC 12 |
Year ended |
Year ended |
|||
Current income before tax (a) | 897 | 930 | |||
Of which share of net income of joint ventures & associates (b) | 99 | 94 | |||
Of which gains (losses) on disposals of financial assets (c) | 60 | 13 | |||
Re-presented current income before tax: d=a-b-c | 738 | 823 | |||
Re-presented tax expense (e) | (207) | (211) | |||
Re-presented tax rate on current income (e) / (d) | 28.0% | 25.7% | |||
2.6 Current net income (loss) / Net income (loss) attributable to owners of the Company
The share of net income attributable to non-controlling interests totaled €102.0 million for the year ended December 31, 2016, compared to €101.1 million for the year ended December 31, 2015.
Net income attributable to owners of the Company was €382.2 million for the year ended December 31, 2016, compared to €450.2 million for the year ended December 31, 2015.
Current net income attributable to owners of the Company was €609.8 million for the year ended December 31, 2016, compared to €580.1 million for the year ended December 31, 2015.
Based on a weighted average number of outstanding shares of 549.0 million (basic) and 568.5 million (diluted), compared with 548.5 million as of December 31, 2015 (basic and diluted), earnings per share attributable to owners of the Company for the year ended December 31, 2016 was €0.57 (basic) and €0.55 (diluted), compared to 0.69 (basic and diluted) for the year ended December 31, 2015. Current net income per share attributable to owners of the Company was €1.11 (basic) and €1.07 (diluted) for the year ended December 31, 2016, compared to €1.06 (basic and diluted) for the year ended December 31, 2015.
The dilutive effect taken into account in the above earnings per share calculation concerns the OCEANE bonds convertible into and/or exchangeable for new and/or existing shares issued in March 2016, as well as the shares attributed under the long-term incentive plan set up in 2015.
Net income (loss) attributable to owners of the Company for the year ended December 31, 2016 breaks down as follows:
In € million, excluding IFRIC 12 | Current | Non-current | Total | ||||
EBIT | 1,383.9 | -306.9 | 1,077.0 | ||||
Cost of net financial debt | (423.6) | - | (423.6) | ||||
Other financial income and expenses | (30.0) | 25.7 | (4.3) | ||||
Pre-tax income | 930.3 | (281.2) | 649.1 | ||||
Income tax expense | (211.3) | 19.0 | (192.3) | ||||
Net income (loss) of other equity-accounted entities | - | 27.4 | 27.4 | ||||
Net income (loss) from discontinued operations | - | - | |||||
Non-controlling interests | (109.2) | 7.2 | (102.0) | ||||
Net income (loss) attributable to owners of the Company | 609.8 | (227.6) | 382.2 | ||||
The reconciliation of Current EBIT with operating income, as shown in the income statement, is as follows:
In € million, excluding IFRIC 12 |
Year ended December |
Year ended |
|||
Current EBIT | 1,315.2 | 1,383.9 | |||
Impairment losses on goodwill and negative goodwill | (18.2) | 3.2 | |||
Restructuring charges (1) | (80.8) | (184.5) | |||
Non-current provisions and impairments (2), | (78.7) | (109.6) | |||
Other (3) | (14.7) | (16.0) | |||
Total non-current items | (192.4) | (306.9) | |||
Operating income after share of net income of equity- |
1,122.9 | 1,077.0 |
(1) |
Restructuring charges for the year ended December 31, 2016 mainly
related to Water activities in France in the amount of -€56.7
million (new departure
|
|
(2) | Non-current provisions and impairment of assets mainly related to coverage of Group risks in Europe. | |
(3) | Other non-current items concern personnel costs: share-based payments, and share acquisition costs, with or without acquisition of control. |
Net income (loss) attributable to owners of the Company for the year ended December 31, 2015, breaks down as follows:
In € million, excluding IFRIC 12 | Current | Non-current | Total | ||||
EBIT | 1,315.2 | -192.4 | 1,122.9 | ||||
Cost of net financial debt | (445.9) | - | (445.9) | ||||
Other financial income and expenses | 27.9 | - | 27.9 | ||||
Pre-tax income | 897.3 | (192.4) | 704.9 | ||||
Income tax expense | (207.1) | 7.6 | (199.5) | ||||
Net income (loss) of other equity-accounted entities | - | 45.9 | 45.9 | ||||
Net income (loss) from discontinued operations | - | - | - | ||||
Non-controlling interests | (110.1) | 9.0 | (101.1) | ||||
Net income (loss) attributable to owners of the Company | 580.1 | (129.9) | 450.2 | ||||
D] FINANCING EXCLUDING THE IMPACT OF IFRIC 12
The following table summarizes the change in Net Financial Debt and net Free Cash Flow:
In € million, excluding IFRIC 12 |
Year ended |
Year ended |
|||
EBITDA | 2,997.2 | 3,056.0 | |||
Net industrial investments | (1,378.6) | (1,398.7) | |||
Change in operating WCR | 203.3 | 270.4 | |||
Dividends received from equity-accounted entities and joint ventures | 90.1 | 93.2 | |||
Renewal expenses | (278.4) | (272.4) | |||
Other non-current expenses and restructuring costs | (150.1) | (133.5) | |||
Financial items (current cash financial expense, and operating cash |
(403.2) | (416.7) | |||
Taxes paid | (223.9) | (228.7) | |||
Net free cash flow before dividend payment, financial |
856.4 | 969.6 | |||
Dividends paid | (582.7) | (590.9) | |||
Net financial investments | 118.2 | (500.8) | |||
Change in receivables and other financial assets | 139.7 | 273.0 | |||
VE capital increase (excluding per share dividend distribution) | 12.2 | (22.0) | |||
Issue / repayment of deeply subordinated securities | - | 17.6 | |||
Free cash-flow | 543.8 | 146.5 | |||
Effect of foreign exchange rate movements and other | (402.4) | 212.1 (*) | |||
Change | 141.4 | 358.6 | |||
Net financial debt at the beginning of the period | (8,311.1) | (8,169.7) | |||
Net financial debt at the end of the period | (8,169.7) | (7,811.1) | |||
(*) The effect of foreign exchange rate and other movements as
of December 31, 2016 included the fluctuations in the pound
sterling in the amount of €307 |
Net free cash flow amounted to €970 million for the year ended December 31, 2016, versus €856 million for the year ended December 31, 2015.
The increase in net free cash flow compared to December 31, 2015 primarily reflects the improvement in EBITDA, the favorable change in operating working capital requirements, lower restructuring charges, partially offset by the increase in net industrial investments in line with fewer industrial divestitures in 2016.
1. Industrial and financial investments
1.1 Industrial investments
Total Group gross industrial investments, including new operating financial assets, amounted to €1,485 million in 2016, compared with €1,484 million in 2015.
Industrial investments, excluding discontinued operations, break down by segment as follows:
Year ended December |
Maintenance and |
Discretionary |
Total gross industrial |
Industrial |
Total net industrial |
||||||
France | 328 | 4 | 332 | (26) | 306 | ||||||
Europe excluding France | 504 | 74 | 578 | (28) | 550 | ||||||
Rest of the World | 311 | 127 | 438 | (17) | 421 | ||||||
Global Businesses | 114 | - | 114 | (14) | 100 | ||||||
Other | 23 | - | 23 | (1) | 22 | ||||||
Total industrial investments | 1,280 (1) | 205 | 1,485 (2) | (86) | 1,399 | ||||||
(1) Of which maintenance investments of €795 million, and contractual investments of €485 million |
|||||||||||
(2) Of which new OFA in the amount of €113 million |
|||||||||||
Year ended December |
Maintenance and |
Discretionary |
Total gross industrial |
Industrial |
Total net industrial |
||||||
France | 295 | 18 | 313 | (35) | 278 | ||||||
Europe excluding France | 469 | 163 | 632 | (38) | 594 | ||||||
Rest of the World | 307 | 81 | 388 | (25) | 363 | ||||||
Global Businesses | 124 | 4 | 128 | (6) | 122 | ||||||
Other | 22 | 1 | 23 | (1) | 22 | ||||||
Total industrial investments | 1,217 (3) | 267 | 1,484 (4) | (105) | 1,379 | ||||||
(3) Of which maintenance investments of €774 million, and contractual investments of €443 million |
|||||||||||
(4) Of which new OFA in the amount of €120 million |
|||||||||||
At constant exchange rates, gross industrial investments rose slightly compared to 2015 (+2.5%).
Gross industrial investments for maintenance and contractual requirements totaled €1,280 million in 2016 (vs. €1,217 million in 2015), representing 5.2% of revenue (stable compared to 2015).
Gross discretionary growth industrial investments mainly concerned:
- in 2016: projects in Australia in the Waste business (transfer station and mechanical biological treatment facility), various projects in China (for the Harbin heating network, in the Industrial Water business, and the construction of hazardous waste incinerators), and network extensions in the Water and Energy businesses in Poland;
- in 2015: the construction of the Leeds and Shropshire incinerators in the UK, network extensions in the Energy business in Poland, and work on the Harbin heating network in China.
1.2 Financial investments and divestitures
Financial investments amounted to -€881 million for the year ended December 31, 2016 (including the net financial debt of new entities and acquisition costs) and include the acquisition of Kurion in the US (-€296 million), the Chemours’ Sulfur Products division (-€290 million) the Pedreira landfill in Brazil (-€71 million), and the Prague Left Bank district heating network (-€70 million). For the year ended December 31, 2015, financial investments for -€270 million were mainly related to the purchase of minority stakes in the Water business in Central Europe.
Financial divestitures totaled €380 million for the year ended December 31, 2016 and include the sale of 20% of Transdev for €216 million (including disposal costs). For the year ended December 31, 2015, financial divestitures included the divestiture of Group activities in Israel.
Financial divestitures, including the reimbursement by Transdev Group of the shareholder loan in March 2016 for €345 million (recorded under “Change in receivables and other financial assets”), amounted to €725 million for the year ended December 31, 2016. This transaction therefore had a total impact of €565 million on Group net financial debt (excluding disposal costs).
2. Loans to joint ventures
Loans to joint ventures, recorded under “Change in receivables and other financial assets” totaled €165.6 million as of December 31, 2016 (versus €509.9 million as of December 31, 2015) and included loans to the Chinese concessions of €124.1 million (€116 million as of December 31, 2015). As of December 31, 2015, loans to equity-accounted entities also included loans to Transdev Group of €345.4 million repaid in full as of December 31, 2016.
3. Operating working capital
The change in operating working capital requirements (excluding discontinued operations) totaled +€270 million as of December 31, 2016, compared to +€203 million as of December 31, 2015.
This increase was attributable to the change in inventories (+€35 million), operating receivables (+€84 million) and operating payables (+€151 million).
4. External financing
4.1 Structure of net financial debt
(in € million) | As of December 31, 2015 | As of December 31, 2016 | |||
Non-current borrowings | 8,022.3 | 8,344.0 | |||
Current borrowings | 4,000.1 | 4,759.7 | |||
Bank overdrafts and other cash position items | 318.6 | 246.8 | |||
Sub-total borrowings | 12,341.0 | 13,350.5 | |||
Cash and cash equivalents | (4,176.3) | (5,521.4) | |||
Fair value gains (losses) on hedge derivatives | 5.0 | (5.0) | |||
Liquid assets and financing-related assets | - | (13.0) | |||
Net Financial Debt | 8,169.7 | 7,811.1 | |||
As of December 31, 2016, net financial debt after hedging6 was borrowed at 92% at fixed rates and 8% at variable rates.
The average maturity of net financial debt was 9.3 years as of December 31, 2016 vs. 8.8 years as of December 31, 2015.
The leverage ratio for the year ended December 31, 2016, i.e. the ratio of closing Net Financial Debt (NFD) to EBITDA, decreased compared to December 31, 2015:
December 31, 2015 | December 31, 2016 | ||||
Leverage ratio (Closing NFD / EBITDA) | 2.73 | 2.56 | |||
4.2 Group liquidity position
Liquid assets of the Group as of December 31, 2016 break down as follows:
(in € million) | December 31, 2015 | December 31, 2016 | |||
Veolia Environnement: | |||||
Undrawn syndicated loan facility | 3,000.0 | 3,000.0 | |||
Undrawn MT bilateral credit lines | 925.0 | 925.0 | |||
Undrawn ST bilateral credit lines | - | - | |||
Letter of credit facility | 49.3 | 8.2 | |||
Cash and cash equivalents | 3,297.6 | 4,648.4 | |||
Subsidiaries: | |||||
Cash and cash equivalents | 878.7 | 873.0 | |||
Total liquid assets | 8,150.6 | 9,454.6 | |||
Current debt, bank overdrafts and other cash |
|||||
Current debt | 4,000.1 | 4,759.7 | |||
Bank overdrafts and other cash position items | 318.6 | 246.8 | |||
Total current debt, bank overdrafts and other |
4,318.7 | 5,006.5 | |||
Total liquid assets net of current debt and bank |
3,831.9 | 4,448.1 | |||
The increase in net liquid assets mainly reflects the offering of bonds convertible into and/or exchangeable for new and/or existing shares (OCEANEs) for a nominal amount of €700 million, the issue of a renminbi-denominated bond on the Chinese domestic market in September 2016 for a nominal amount of €136 million equivalent and the issue of euro-denominated bonds for a nominal amount of €1.1 billion in October 2016, partially offset by upcoming bond maturities in 2017, including the euro-denominated bond maturing in January 2017 for a nominal amount of €606 million, the euro-denominated bond maturing in June 2017 for a nominal amount of €250 million, the renminbi-denominated bond maturing in June 2017 for a nominal amount of €68 million equivalent, and the floating-rate euro-denominated bond maturing in May 2017 for a nominal amount of €350 million.
Veolia Environnement may draw on the multi-currency syndicated credit facility and all credit lines at any time.
UNDRAWN MEDIUM-TERM SYNDICATED LOAN FACILITIES
On November 6, 2015, Veolia Environnement signed a new multi-currency syndicated loan facility in the amount of €3 billion initially maturing in 2020, extended to 2021 in October 2016 and extendable to 2022 with the possibility for drawdowns in Eastern European currencies and Chinese Renminbi.
This syndicated loan facility replaces the two syndicated loan facilities set up in 2011: a 5-year multi-currency loan facility of €2.5 billion, and a 3-year loan of €500 million for drawdowns in Polish zlotys, Czech crowns and Hungarian forints.
This syndicated loan facility was not drawn down as of December 31, 2016.
UNDRAWN ST AND MT BILATERAL CREDIT LINES
In 2015, Veolia Environnement renegotiated all its bilateral credit lines for a total undrawn amount of €925 million as of December 31, 2016.
LETTER OF CREDIT FACILITY:
As of December 31, 2016, the letter of credit facility was drawn by USD 176.3 million. The portion that may be drawn in cash amounted to USD 8.7 million (€8.2 million euro equivalent). It is undrawn and recorded in the liquidity table above.
The decrease in net liquid assets mainly reflects upcoming bond maturities before June 30, 2017, including the euro-denominated bond maturing in January 2017 for a nominal amount of €606 million, the euro-denominated bond maturing in June 2017 for a nominal amount of €250 million, and the renminbi denominated bond maturing in June 2017 for a nominal amount of €68 million equivalent, partially offset by an offering of bonds convertible into and/or exchangeable for new and/or existing shares (OCEANEs) for a nominal amount of €700 million
.E] RETURN ON CAPITAL EMPLOYED EXCLUDING THE IMPACT OF IFRIC 12
Veolia Environnement uses the ROCE indicator (return on capital employed) to track the Group's profitability. This indicator measures Veolia Environnement's ability to provide a return on the funds provided by shareholders and lenders. The Group distinguishes between:
- Post-tax ROCE, calculated at Group level, that include investments in joint ventures and associates;
- Pre-tax ROCE, broken down for the Group and its operating segments that exclude investments in joint ventures and associates.
The return on capital employed indicators are defined in the appendix. In both cases, the impacts of the Group’s investment in the Transdev Group joint venture, which is not viewed as a core Company activity and whose contribution is recognized as a share of net income of other equity-accounted entities, are excluded from the calculations.
POST-TAX ROCE
Current EBIT after tax is calculated as follows:
In € million, excluding IFRIC 12 | 2015 | 2016 | |||
Current EBIT(*) | 1,315.2 | 1,383.9 | |||
- Current income tax expense | (207.1) | (211.3) | |||
Current EBIT after tax | 1,108.1 | 1,172.6 |
(*) Including the share of net income (loss) of joint ventures and associates.
Average capital employed for the year was calculated as follows:
In € million, excluding IFRIC 12 |
Year ended |
Year ended |
|||
Intangible assets and property, plant and equipment, net | 10,519.4 | 10,855.3 | |||
Goodwill, net of impairment | 4,635.0 | 4,864.0 | |||
Investments in joint ventures and associates | 2,617.6 | 2,366.0 | |||
Operating financial assets | 1,896.5 | 1,735.8 | |||
Operating and non-operating working capital requirements, net | (447.1) | (730.3) | |||
Net derivative and other instruments (1) | (47.8) | (129.5) | |||
Provisions | (2,547.2) | (2,630.3) | |||
Capital employed | 16,626.4 | 16,331.0 | |||
Impact of discontinued operations and other restatements (2) | (310.3) | (232.2) | |||
Represented capital employed | 16,316.1 | 16,098.8 | |||
Average capital employed | 16,313.4 | 16,207.4 | |||
(1) Excluding derivatives hedging the fair value of debt in the
amount of €12.2 million for the year ended December 31, 2015, and
€0.3 million for the year |
|||||
(2) The restatements in 2015 and 2016 include the impact
arising from the capital employed of entities which are not viewed
as core to the Group’s businesses, |
|||||
The Group's post-tax return on capital employed (ROCE) is as follows:
In € million, excluding IFRIC 12 | Current EBIT after tax | Average capital employed | Post-tax ROCE | ||||
2015 | 1,108.1 | 16,313.4 | 6.8% | ||||
2016 | 1,172.6 | 16,207.4 | 7.2% | ||||
The Group's post-tax return on capital employed (ROCE) was 7.2% for the year ended December 31, 2016 versus 6.8% for the year ended December 31, 2015. The increase in the return on capital employed between 2016 and 2015 was primarily due to improved operating performance.
PRE-TAX ROCE
Unlike post-tax ROCE, the capital employed used for the pre-tax ROCE does not include investments in joint ventures and associates.
The Group’s pre-tax return on capital employed (ROCE) by segment is as follows:
In € million, excluding IFRIC 12 |
Current EBIT(*) |
Average capital |
Pre-tax ROCE | ||||
France | 196.6 | 1,890.8 | 10.4% | ||||
Europe excluding France | 538.9 | 7,536.9 | 7.1% | ||||
Rest of the World | 402.4 | 4,005.5 | 10.0% | ||||
Global Businesses | 84.7 | 995.1 | 8.5% | ||||
Other | (6.0) | (263.8) | N/A | ||||
Total Group 2015 | 1,216.6 | 14,164.5 | 8.6% | ||||
France | 129.7 | 1,796.7 | 7.2% | ||||
Europe excluding France | 626.9 | 7,231.7 | 8.7% | ||||
Rest of the World | 398.9 | 4,310.8 | 9.3% | ||||
Global Businesses | 134.9 | 1,087.6 | 12.4% | ||||
Other | (0.7) | (350.7) | N/A | ||||
Total Group 2016 | 1,289.7 | 14,076.1 | 9.2% | ||||
(*) Before share of net income or loss of equity-accounted entities. |
|||||||
APPENDICES (*)
1. DEFINITIONS
GAAP (IFRS) INDICATORS
Cost of net financial debt is equal to the cost of gross debt, including related gains and losses on interest rate and currency hedges, less income on cash and cash equivalents.
Operating cash flow before changes in working capital, as presented in the consolidated cash flow statement, is comprised of three components: operating cash flow from operating activities (referred to as “adjusted operating cash flow” and known in French as “capacité d'autofinancement opérationnelle”) consisting of operating income and expenses received and paid (“cash”), operating cash flow from financing activities including cash financial items relating to other financial income and expenses and operating cash flow from discontinued operations composed of cash operating and financial income and expense items classified in net income from discontinued operations pursuant to IFRS 5. Adjusted operating cash flow does not include the share of net income attributable to equity-accounted entities.
Net income (loss) from discontinued operations is the total of income and expenses, net of tax, related to businesses divested or in the course of divestiture, in accordance with IFRS 5.
NON-GAAP INDICATORS
The term “change at constant exchange rates” represents the change resulting from the application of exchange rates of the prior period to the current period, all other things being equal.
The municipal sector encompasses services in the Water, Waste and Energy business lines aimed at users, performed under contracts with municipal governments, groups of municipal governments, or regional or national governments.
The industrial sector covers Water, Waste and Energy management services, offered to industrial or service sector customers.
EBITDA comprises the sum of all operating income and expenses received and paid (excluding restructuring charges, non-current WCR impairments, renewal expenses and share acquisition and disposal costs) and principal payments on operating financial assets.
The EBITDA margin is defined as the ratio of EBITDA to revenue.
To calculate Current EBIT, the following items will be deducted from operating income:
- Goodwill impairments of fully controlled subsidiaries and equity-accounted entities,
- Restructuring charges,
- Non-current provisions and impairments,
- Non-current and/or significant impairment of non-current assets (PP&E, intangible assets and operating financial assets),
- Impacts relating to the application of IFRS 2 Share-based payment,
- Share acquisition costs.
(*) Correction of an erratum in the figures of the consolidated statement of financial position- equity and liabilities: page 35
Current net income is defined as the sum of the following items:
- Current EBIT,
- Current net finance expenses, that include current cost of net financial debt and other current financial income and expenses, including capital gains or losses on financial divestitures (including gains or losses included in the share of net income of equity-accounted entities),
- Current tax items, and
- Minority interests (excluding the portion of minority interests relative to non-current items in the income statement).
Current net income earnings per share is defined as the ratio of current net income (not restated for the cost of the coupon attributable to hybrid debt holders) by the weighted average number of outstanding shares during the year.
Net industrial investments, as presented in the statement of changes in net financial debt, include industrial investments (purchases of intangible assets and property, plant and equipment, and operating financial assets), net of industrial asset divestitures.
The Group considers discretionary growth investments, which generate additional cash flows, separately from maintenance-related investments, which reflect the replacement of equipment and installations used by the Group as well as investments relating to contractual obligations.
Net financial investments, as presented in the statement of changes in net financial debt, include financial investments, net of financial divestitures.
Financial investments include purchases of financial assets, including the net financial debt of companies entering the scope of consolidation, and partial purchases resulting from transactions with shareholders where there is no change in control.
Financial divestitures include net financial debt of companies leaving the scope of consolidation, and partial divestitures resulting from transactions with shareholders where there is no change in control, as well as issues of share capital by non-controlling interests.
Net free cash flow corresponds to free cash flow from continuing operations, and is calculated by: the sum of EBITDA, dividends received, changes in operating working capital and operating cash flow from financing activities, less net interest expense, net industrial investments, taxes paid, renewal expenses, restructuring charges and other non-current expenses.
Net financial debt (NFD) represents gross financial debt (non-current borrowings, current borrowings, bank overdrafts and other cash position items), net of cash and cash equivalents, liquid assets and financing-related assets, including fair value adjustments to derivatives hedging debt. Liquid assets are financial assets composed of funds or securities with an initial maturity of more than three months, easily convertible into cash, and managed with respect to a liquidity objective while maintaining a low capital risk.
The leverage ratio is the ratio of closing Net Financial Debt to EBITDA.
The financing rate is defined as the ratio of the cost of net financial debt (excluding fair value adjustments to instruments not qualifying for hedge accounting) to average monthly net financial debt for the period, including the cost of net financial debt of discontinued operations.
The pre-tax return on capital employed (ROCE) is defined as the ratio of:
- Current EBIT before share of net income or loss of equity-accounted entities;
- Average capital employed in the year, including operating financial assets and excluding investments in joint ventures and associates.
Capital employed used in the ROCE calculation is therefore equal to the sum of net intangible assets and property, plant and equipment, goodwill net of impairment, operating financial assets, net operating and non-operating working capital requirements and net derivative instruments less provisions. It also includes the capital employed of activities classified within assets and liabilities held for sale, excluding discontinued operations.
The post-tax return on capital employed (ROCE) is defined as the ratio of:
- Current EBIT including the share of net income or loss of equity-accounted entities, after tax. It is calculated by subtracting the current tax expense from Current EBIT including the share of net income or loss of equity-accounted entities. Current tax expense is the tax expense in the income statement represented for tax effects on non-current items.
- Average capital employed in the year, including operating financial assets and investments in joint ventures and associates.
Capital employed used in the post-tax ROCE calculation is therefore equal to the sum of net intangible assets and property, plant and equipment, goodwill net of impairment, investments in joint ventures and associates, operating financial assets, net operating and non-operating working capital requirements and net derivative instruments less provisions. It also includes the capital employed of activities classified within assets and liabilities held for sale, excluding discontinued operations.
For both pre-tax and post-tax ROCE, the impacts of the Group’s investment in the Transdev Group joint venture, which is not viewed as a core Company activity and whose contribution is recognized as a share of net income of other equity-accounted entities, are excluded from the calculations.
2. CONSOLIDATED INCOME STATEMENT
(€ million) |
2015 represented(1) | 2016(1) | |||
Revenue | 24,964.8 | 24,390.2 | |||
Cost of sales | -20,711.7 | -20,156.2 | |||
Selling costs | -579.3 | -593.7 | |||
General and administrative expenses | -2,389.9 | -2,255.8 | |||
Other operating revenue and expenses | -181.7 | -309.1 | |||
Operating income before share of net income (loss) of equity- |
1,102.2 | 1,075.4 | |||
Share of net income (loss) of equity-accounted entities | 98.7 | 94.2 | |||
o/w share of net income (loss) of joint ventures | 73.1 | 66.8 | |||
o/w share of net income (loss) of associates | 25.6 | 27.4 | |||
Operating income after share of net income (loss) of equity- |
1,200.9 | 1,169.6 | |||
Net finance costs | -445.9 | -423.6 | |||
Other financial income and expenses | -66.2 | -94.6 | |||
Pre-tax net income (loss) | 688.8 | 651.4 | |||
Income tax expense | -196.5 | -192.7 | |||
Share of net income (loss) of other equity-accounted entities | 45.9 | 27.4 | |||
Net income (loss) from continuing operations | 538.2 | 486.1 | |||
Net income (loss) from discontinued operations | - | - | |||
Net income (loss) for the period | 538.2 | 486.1 | |||
Attributable to owners of the Company | 437.7 | 383.1 | |||
Attributable to non-controlling interests | 100.5 | 103.0 | |||
NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE |
- | - | |||
Diluted | 0.67 | 0.55 | |||
Basic | 0.67 | 0.57 | |||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
- | - | |||
Diluted | 0.67 | 0.55 | |||
Basic | 0.67 | 0.57 | |||
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS |
- | - | |||
Diluted | - | - | |||
Basic | - | - | |||
(1) Including IFRIC 12 | |||||
3. CONSOLIDATED STATEMENT OF FINANCIAL POSITION – ASSETS
(€ million) |
As of December 31, |
As of December 31, |
||
Goodwill |
|
4,619.6 | 4,850.2 | |
Concession intangible assets | 3,919.3 | 3,775.6 | ||
Other intangible assets | 918.0 | 1,012.7 | ||
Property, plant and equipment | 6,820.3 | 7,177.2 | ||
Investments in joint ventures | 2,155.8 | 1,642.6 | ||
Investments in associates | 461.8 | 723.4 | ||
Non-consolidated investments | 52.9 | 88.0 | ||
Non-current operating financial assets | 1,734.2 | 1,554.1 | ||
Non-current derivative instruments - Assets | 58.9 | 43.2 | ||
Other non-current financial assets | 758.4 | 385.6 | ||
Deferred tax assets | 1,246.3 | 1,211.1 | ||
Non-current assets | 22,745.5 | 22,463.7 | ||
Inventories and work-in-progress | 757.7 | 719.6 | ||
Operating receivables | 8,797.2 | 8,686.0 | ||
Current operating financial assets | 162.3 | 141.6 | ||
Other current financial assets | 215.7 | 284.7 | ||
Current derivative instruments - Assets | 72.8 | 78.4 | ||
Cash and cash equivalents | 4,176.3 | 5,521.4 | ||
Assets classified as held for sale (*) | 175.8 | 53.8 | ||
Current assets | 14,357.8 | 15,485.5 | ||
TOTAL ASSETS | 37,103.3 | 37,949.2 | ||
(1) Including IFRIC 12 |
||||
3. CONSOLIDATED STATEMENT OF FINANCIAL POSITION – EQUITY & LIABILITIES
(€ million) |
As of December |
As of December |
|||
Share capital | 2,816.8 | 2,816.8 | |||
Additional paid-in capital | 7,165.6 | 7,161.2 | |||
Reserves and retained earnings attributable to |
-1,982.0 | -2,228.8 | |||
Total equity attributable to owners of the |
8,000.4 | 7,749.2 | |||
Total equity attributable to non-controlling interests |
1,129.9 | 1,127.3 | |||
Equity | 9,130.3 | 8,876.5 | |||
Non-current provisions | 2,068.1 | 2,123.7 | |||
Non-current borrowings | 8,022.3 | 8,344.0 | |||
Non-current derivative instruments - Liabilities | 114.7 | 122.4 | |||
Concession liabilities - non current | 1,475.7 | 1,399.2 | |||
Deferred tax liabilities | 1,117.1 | 1,079.8 | |||
Non-current liabilities | 12,797.9 | 13,069.1 | |||
Operating payables | 10,070.6 | 10,199.9 | |||
Concession liabilities - current | 112.0 | 119.8 | |||
Current provisions | 479.1 | 559.4 | |||
Current borrowings | 4,000.1 | 4,759.7 | |||
Current derivative instruments - Liabilities | 87.6 | 118.0 | |||
Bank overdrafts and other cash position items | 318.6 | 246.8 | |||
Liabilities directly associated with assets classified as |
107.1 | - | |||
Current liabilities | 15,175.1 | 16,003.6 | |||
TOTAL EQUITY AND LIABILITIES | 37,103.3 | 37,949.2 | |||
(1) Including IFRIC 124. |
|||||
CONSOLIDATED CASH FLOW STATEMENT
(€ million) | 2015 represented(1) | 2016(1) | |||
Net income (loss) for the period | 538.2 | 486.1 | |||
Net income (loss) from continuing operations | 538.2 | 486.1 | |||
Net income (loss) from discontinued operations | - | - | |||
Operating depreciation, amortization, provisions and impairment losses | 1,463.1 | 1,597.3 | |||
Financial amortization and impairment losses | -3.8 | 19.9 | |||
Gains (losses) on disposal of operating assets | -4.3 | -29.1 | |||
Gains (losses) on disposal of financial assets | -60.5 | -57.6 | |||
Share of net income (loss) of joint ventures | -119.0 | -94.2 | |||
Share of net income (loss) of associates | -25.6 | -27.4 | |||
Dividends received | -3.6 | -8.1 | |||
Net finance costs | 445.9 | 423.6 | |||
Income tax expense | 196.5 | 192.7 | |||
Other items | 148.8 | 135.8 | |||
Operating cash flow before changes in operating working capital | 2,575.7 | 2,639.0 | |||
Change in operating working capital requirements | 203.3 | 270.4 | |||
Change in concession working capital requirements | -91.3 | -112.0 | |||
Income taxes paid | -223.9 | -228.7 | |||
Net cash from operating activities of continuing operations | 2,463.8 | 2,568.7 | |||
Net cash from (used in) operating activities of discontinued |
- | -12.8 | |||
Net cash from operating activities | 2,463.8 | 2,555.9 | |||
Industrial investments, net of grants | -1,347.3 | -1,353.5 | |||
Proceeds on disposal of industrial assets | 105.9 | 85.8 | |||
Purchases of investments | -146.6 | -797.8 | |||
Proceeds on disposal of financial assets | 321.9 | 281.7 | |||
Operating financial assets | - | - | |||
New operating financial assets | -120.3 | -113.4 | |||
Principal payments on operating financial assets | 173.1 | 201.2 | |||
Dividends received (including dividends received from joint
ventures |
90.1 | 93.2 | |||
New non-current loans granted | -101.7 | -123.8 | |||
Principal payments on non-current loans | 220.2 | 67.8 | |||
Net decrease/increase in current loans | 21.1 | 329.0 | |||
Net cash used in investing activities of continuing operations | -783.6 | -1,329.8 | |||
Net cash used in investing activities of discontinued operations | - | - | |||
Net cash used in investing activities | -783.6 | -1,329.8 | |||
Net increase (decrease) in current borrowings | 170.3 | -547.1 | |||
(€ million) | 2015 represented(1) | 2016(1) | |||
New non-current borrowings and other debts | 467.1 | 2,049.9 | |||
Principal payments on non-current borrowings and other debts | -206.1 | -176.2 | |||
Change in liquid assets and financing financial assets | - | -9.0 | |||
Proceeds on issue of shares | 17.7 | 14.5 | |||
Share capital reduction | - | - | |||
Transactions with non-controlling interests: partial purchases | -106.3 | -5.3 | |||
Transactions with non-controlling interests: partial sales | - | 0.4 | |||
Proceeds on issue of deeply subordinated securities | - | - | |||
Coupons on deeply subordinated securities | -71.5 | -68.8 | |||
Purchases of/proceeds from treasury shares | 0.2 | -22.0 | |||
Dividends paid | -512.0 | -521.7 | |||
Interest paid | -519.3 | -521.3 | |||
Net cash from (used in) financing activities of continuing |
-759.9 | 193.4 | |||
Net cash from financing activities of discontinued operations | - | - | |||
Net cash from (used in) financing activities | -759.9 | 193.4 | |||
Effect of foreign exchange rate changes and other | 5.2 | -2.6 | |||
Increase (decrease) in external net cash of discontinued |
- | - | |||
Net cash at the beginning of the year | 2,932.2 | 3,857.7 | |||
Net cash at the end of the year | 3,857.7 | 5,274.6 | |||
Cash and cash equivalents | 4,176.3 | 5,521.4 | |||
Bank overdrafts and other cash position items | 318.6 | 246.8 | |||
Net cash at the end of the year | 3,857.7 | 5,274.6 | |||
(1) Including IFRIC 12 |
|||||
1 Excluding representation related to IFRIC 12 fixed payments
2
At constant exchange rates At current consolidation scope and
exchange rates: Revenue declined 2.3% and was stable (+0.1%) in the
4th quarter. EBITDA increased 2.0%, current EBIT increased 5.2% and
current net income-Group share increased 5.1%. Excluding net financial
capital gains current net income increased 13.2%.
3 At
constant exchange rates
4 Equivalent to €3.4bn to €3.6bn
(excluding IFRIC 12) and before taking into account the unfavorable
exchange rate impacts recorded in 2016
5 Construction
activities concern the Group’s engineering and construction businesses
(mainly Veolia Water Technologies and SADE), as well as construction
completed as part of operating contracts.
6 Including
the restatement of €1,067 million of the carry-over of cash related to
the pre-financing of future bond maturities in 2017.