SUEZ presented on Wednesday its 2018 results: worth noting are revenue growth of 11.9% and EBIT growth of 11.5%. Two divisions are behind this strong performance: Water Technologies and Solutions (WTS) and International. We show next 10 important facts on the present and future of the French group, based on the presentation provided by the company:
1.- Record organic revenue growth
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All divisions grow, reaching a record level of 3.6% for 2018, much higher than the growth in the past two years. The weakest link continues to be Water Europe, which stays at 0.9%.
2.- Municipalities, industry and emerging markets
SUEZ highlights the reinforced engagement with municipalities, particularly in France with the Toulouse contract that guarantees a revenue of €520 million over the next 12 years. On the other hand, concerning industry, the automotive sector becomes established as one of the main clients of the group. With regards to emerging markets, China and India are the most important countries, with contracts in Changshu and Coimbatore worth more than €800 million.
3.- Water Technologies & Solutions takes off
The revenue from the WTS division exceeded all expectations rising 6.7%.
4.- Key role of ultrafiltration and reverse osmosis
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In the area of Engineered Systems, ultrafiltration and reverse osmosis sales stood out. Furthermore, the area of Chemical and monitoring Solutions benefited from growth in China, Europe and the Middle East.
5.- A unique brand
SUEZ highlights that serving all markets with a unique brand was the right decision, increasing recognition as a pioneer in circular economy solutions.
6.- Cost savings at €210 million
SUEZ has accelerated its tight control of costs in 2018, reaching a record high cost savings of €210 million. They are targeting similar cost savings in 2019 again. The division most 'affected' by cost-cutting is Water Europe.
7.- Water Europe, lower volume but higher tariffs
The Water Europe division achieved 0.9% revenue growth, mainly due to tariff increases (+ 1.0% in France, +0.1% in Spain, +3.0% in Chile). Revenue in France decreased by 2.6%, affected by the end of the Valenton contract. In España, revenue increased by 0.5%, mainly due to the contribution of construction activities. The 1.2% decrease in the volume of water sold reflected adverse weather conditions and a decline in tourism. Moreover, Latin America showed outstanding revenue growth at 10.6%, with a larger water volume sold in Chile as well as a tariff increase.
8.- Spain and France, the only geographies where revenue decreases
Spain and France are the only geographies where SUEZ operates that report decreased revenues in 2018. In Spain, however, we can see that the water division did achieve modest growth.
9.- Average water price in Europe: 4.01 euros per cubic metre
SUEZ provides data on the average water price in Europe. The tariffs range from 1.43 euros per cubic metre in Italy to 6.61 in Denmark.
10.- Positive dynamics for 2019
SUEZ expects to continue its growth in 2019, with revenue increases of 2 to 3% and EBIT increases of 4 to 5%, essentially thanks to targeted cost savings.
