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Suez reports first half 2020 results

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  • Suez reports first half 2020 results

About the entity

SUEZ
As an expert in water and waste for 150 years that is present on the 5 continents, SUEZ harnesses all its capacity for innovation to work for the efficient and sustainable management of resources.
Schneider Electric
Idrica
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Themes

SUEZ’s Board of Directors examined the consolidated financial statements at June 30, 2020 at its meeting held on July 29, 2020. They were also reviewed by the Audit Committee at its meeting of July 27, 2020. The consolidated financial statements have been reviewed by the statutory auditors. 

Water reported revenue of €3,221m at June 30th 2020, down -3.2% (-€108m) on an organic basis. Over the period, revenue grew +0.4% in Q1 2020 and then decreased by -6.6% in Q2 2020, both in organic terms.

  • In Europe revenue was down -3.5% (-€63m) organically. Containment measures implemented from the second half of March and progressively lifted in May/June have negatively impacted water consumption from Industrial & Commercial (I&C) customers, administrations, communities and in tourist areas. Tariffs were up +1.7% in France, and down -1.3% in Spain, factoring in the 4.95% decrease established by the metropolitan region of Barcelona effective since January 2020.
  • Americas revenue was down -3.0% (-€27m) on an organic basis. US regulated water business saw little impact from Covid-19 over the period with weather conditions being more impactful. In Chile, tariffs were up +2.5% and volumes were down -5.5%, reflecting both the effects of confinement and precautionary measures of water consumption restrictions implemented locally in face of the severe drought that affects the country.
  • Asia-Pacific revenue was down -7.6% (-€20m) in organic terms. In China, which was the first area hit by Covid-19 outbreak, volumes were impacted as soon as end of January and started to recover progressively from end-April. ▪ AMECA grew +0.6% (+€2m) organically.

The segment reported organic EBIT variation of -69.5% (-€300m) to €108m, of which an impact of -€176m from estimated costs and provisions associated with the business conditions in the first half including linked to the pandemic

Environmental Tech & Solutions

ENVIRONMENTAL TECH & SOLUTIONS reported revenue of €1,642m at June 30th 2020, down -3.3% (-€56m) on an organic basis. Over the period, revenue grew +3.1% in Q1 2020 and decreased by -8.9% in Q2 2020, both in organic terms.

WTS performance was resilient, with revenue up +0.6% organically to €1,193m. SES was down -8.8% organically to €196m revenue in H1, as a result of contrasting trends: digital activities were little impacted whereas on-site activities were practically stopped. Hazardous Waste activity was strongly impacted by the slowdown in volumes and then recovered progressively as lockdown measures were lifted. Revenue shows a decrease of -14.9% organically to €254m for H1.

  • Americas revenue increased by +5.5% (+€36m) organically, with WTS showing resilience.
  • Europe revenue was down -9.8% (-€71m) in organic terms, with volume significantly down in hazardous waste during the lockdown period as it significantly slowed down industrial activity. ▪ The Asia Pacific region was down -8.8% (-€22m) organically. Our Hazardous Waste business in China was strongly impacted by Industrial parks lockdown in February and March and recovered progressively in the second quarter.
  • AMECA was up +1.0% (+€0.7m) organically.

The segment reported organic EBIT variation of -111.4% (-€90m) to -€13m, of which an impact of -€37m from estimated costs and provisions associated with the business conditions in the first half including linked to the pandemic.

Business highlights

Commercial successes

In the first half 2020, SUEZ accelerated its development across all activities and geographic areas where the Group operates:

  • France: New partnership to finance projects in the water and waste industries. SUEZ joined forces with Vauban Infrastructure Partners to create « SUEZ Investissement Local », a new venture aiming to provide funding of €500m for projects by 2025, in water, wastewater and waste industries. SUEZ Investissement Local will be the main shareholder of the concession companies carrying out the projects. SUEZ will bear the industrial responsibility for the construction and operation of customers’ infrastructure and will thus remain the established local operator and the preferred interlocutor of local communities.
  • Uzbekistan - Municipal Water | Environmental Tech & Solutions: modernization and improvement of water services for the capital city of Uzbekistan. This 7-year contract worth a total of €142m revenue, of which €66m for Smart & Environmental Solutions, will allow real-time monitoring of the Tashkent water network and help reducing water losses thanks to advanced leak detection and repair techniques.
  • France - Municipal Water:
    • Water and wastewater management contract with Dijon Metropole. This 9-year contract starting April 1st, 2021 worth a total of €278m revenue. For the first time in France, drinking water and wastewater management are gathered within the same Joint Venture Company;
    • Wastewater network management for the agglomeration community of Roissy Pays de France. This 8-year contract starting July 1st, 2020 and worth a total of €20m revenue. Introducing advanced solutions, our services will help the community to meet its strong environmental commitments.
  • Angola - Municipal Water: Development, in partnership with Mota Engil and Soares da Costa, of Bita drinking water plant in Luanda, the capital city of Angola. The contract, worth €98m revenue for SUEZ, includes pumping of raw water from the Kwanza river, the development of a water treatment plant over a 39-month period and 9 months of operational support.
  • United States - Municipal Water:
    • Contract to operate the Edward C. Little Water Recycling Facility in Southern California. The 5-year renewal, worth a total of c. €67m revenue, began January 1, 2020. The facility produces about 150 000 m3 of water every day and contributes conserving water resources in one of the nation’s most drought-prone regions;
    • Operation & Maintenance contract for the wastewater network of Norwalk, Connecticut. This 10- year contract worth a total of US$78m revenue. The contract will help modernizing the system, enhance process control and effluent quality and therefore impact positively the environment. Introducing smart technologies, it will also allow the operation to run at a higher level of efficiency.

 

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