Veolia Environnement(US:VEOEY)2023-03-03 20:03Financial Data and Key Metrics Changes - Revenue reached EUR42.9 billion, a 14.1% increase at constant scope and exchange rates, driven by a 2.4% volume increase and a 3.7% price increase [8][9] - EBITDA increased to almost EUR6.2 billion, with organic growth of 7.2%, exceeding the guidance of 4% to 6% [10][46] - Current EBIT rose to EUR3.062 billion, a 16.3% increase, while current net income group share reached EUR1,162 million, up 29.7% [11][46] Business Line Data and Key Metrics Changes - Water operations generated EUR18.3 billion in revenue, with an organic growth of 8.2%, benefiting from tariff indexation [54][55] - Waste activities accounted for EUR15.8 billion, up 6.8% like-for-like, driven by strict pricing policy and resilient volumes [56][58] - Energy revenue was EUR9.2 billion, showing a 44.7% increase, primarily due to a sharp rise in energy prices [61] Market Data and Key Metrics Changes - In France, water revenue increased by 3.8%, while hazardous waste in Europe saw a 4.8% rise [49][22] - The US operations grew by 12%, with both hazardous waste and municipal water experiencing double-digit growth [51] - Central and Eastern Europe reported high revenue growth due to strong energy prices [50] Company Strategy and Development Direction - The merger with SUEZ has positioned the company as a leader in ecological transformation, with a focus on decarbonization and resource regeneration [6][20] - The company aims for 5% to 7% EBITDA growth in 2023 and a net income target of around EUR1.3 billion, with a commitment to maintain a leverage ratio around 3 times [6][42] - The company is focused on maintaining a strong balance sheet while exploring growth opportunities [100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to economic volatility, noting that 85% of revenue is immune to industrial growth [7][41] - The company anticipates continued strong performance in 2023, driven by pricing discipline and operational efficiencies [42][80] - Management highlighted the importance of maintaining a BBB rating and the rigorous balance sheet management as key drivers for future growth [99] Other Important Information - The company achieved EUR146 million in synergies from the SUEZ merger, exceeding the initial target of EUR100 million [10][39] - A dividend of EUR1.12 per share was proposed, reflecting a 12% increase [11] - The company saved 320 million cubic meters of water yearly through improved efficiency in distribution networks [12][86] Q&A Session Summary Question: Update on relationships with local governments and municipalities in water sector - Management noted strong relationships due to service quality and reliability during crises, achieving over 90% contract renewal rates globally [84][88] Question: Financial leverage target for 2023 - Management confirmed the target of maintaining leverage around 3 times EBITDA to ensure balance sheet sustainability and readiness for opportunities [90][99] Question: Working capital evolution in 2022 - Management highlighted a strong working capital contribution of EUR48 million, with expectations for similar trends in 2023 [91][92]