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SUEZ: 1st quarter 2008 - Sustained Growth in Revenues and Operating ResultsPARIS, May 6 /PRNewswire/ --
in EUR billions March 31, 2008 March 31, 2007 Total Growth Organic
Growth
Revenues
13.7 12.2 + 12.3% + 9.9%
EBITDA (new 2.3 2.1 + 11.4% + 12.7%
definition) (1)
Current Operating 1.7 1.5 + 9.9% + 11.3%
Income (1)
(1) See reconciliation tables, page 6. At March 31, 2008, revenues came to EUR 13.7 billion, representing total growth of + 12.3% and organic growth of + 9.9% compared with 1st quarter 2007. Organic growth stemmed mainly from: - increased electricity sales and continued development, in particular internationally (Latin America and North America) and in Europe (the Benelux countries, Italy and Spain), - additional gas arbitrage opportunities, - greater energy services activity in Europe (robust order book, harsher winter than 1stquarter 2007, and higher fuel prices), - progress in SUEZ Environment's water and waste services activities in Europe and internationally. At EUR 2.3 billion (+ 11.4%) EBITDA is in line with the expectations of the Group which confirms its EBITDA growth target for 2008 of approximately + 10%. At EUR 1.7 billion, Current Operating Income was up substantially, reflecting improved profitability in electricity, particularly from very strong performance in Brazil (spot electricity sales). Operations in the United States (electricity and LNG), France and Spain, also made significant contributions to this advance, as did Energy Services in Europe and Environment in Europe and internationally. Net debt at EUR 13.1 billion remained stable in relation to year-end 2007. Total revenues grew +EUR 1,503 million: - Organic growth (+EUR 1,213 million); - Effect of natural gas price increases (+EUR 358 million); - Changes in Group structure (+EUR 133 million), including: - first time consolidations (+EUR 243 million): SUEZ Environment +EUR 110 million (waste activity acquisitions mainly in the United Kingdom and France), SUEZ Energy Europe +EUR 90 million, SUEZ Energy International +EUR 32 million (acquisition in Panama), and SUEZ Energy Services +EUR 11 million (acquisition of Crespo y Blasco in Spain). - Disposals (-EUR 110 million): SUEZ Environment -EUR 89 million (sale of Applus by AGBAR), SUEZ Energy International -EUR 12 million, and SUEZ Energy Services -EUR 9 million; - Exchange rate fluctuations (-EUR 200 million), relatively limited, whose impact were felt mainly by SUEZ Environment (-EUR 52 million) and SUEZ Energy International (-EUR 140 million). The Group generated 90% of its revenues in Europe and North America, of which 82% in Europe.
Revenue breakdown by business activity
in EUR millions Revenues
March 31, 2008 March 31, 2007
SUEZ Energy Europe 5,890 5,013
(1)
SUEZ Energy 1,851 1,586
International (1)
SUEZ Energy Services 3,056 2,837
SUEZ Environment 2,909 2,768
SUEZ Group 13,707 12,204
Organic growth (2) + 9.9%
Total growth + 12.3%
(1) Total revenues in the natural gas and electricity segments (made up of SUEZ Energy Europe and SUEZ Energy International) amounted to EUR 7,741,6 million, with organic growth of + 12.4%. (2) See page 6 for a breakdown of organic growth on a comparable basis.
- SUEZ ENERGY EUROPE
in EUR millions March 31, March 31, Total Organic
2008 2007 change growth
Revenues 5,890 5,013 + 17.5% + 9.4%
Total revenues of SUEZ Energy Europe rose + 17.5% (+EUR 877 million) at March 31, 2008. On a comparable basis, in particular excluding the impact of changes in natural gas prices, organic growth in revenues was + 9.4% . Electricity Sales of electricity rose to EUR 3,506 million versus the end of March 2007 figure of EUR 3,075 million, with organic growth at + 13.8%. The increase in electricity sales is due both to the price dynamics experienced in Europe since mid-2005 and to increasing sales volumes outside the Benelux countries: - In the Benelux countries, the overall revenue trend reflects the increase in market prices for electricity (strongly influenced by higher fossil fuel prices). Sales in Belgium also benefited from higher transportation and distribution prices, with no impact on margins. Sales volumes were down slightly (-0.8 TWh, or - 3.2%) resulting mainly from a decline in sales to distributors in Belgium. - Electricity volumes sold outside the Benelux countries increased + 2.2%, and account for 42% of all electricity sales in Europe. This growth is due mainly to development of the Group's southern Europe activities, with a higher level of activity at the Castelnou power plant in Spain due to improved market conditions versus the same period the year before, increased power plant capacity at Leini and Tirreno Power in Italy, and to the 2007 wind farm acquisitions in Portugal. - Natural gas Sales of natural gas by Electrabel (+ 26%) were helped mainly by changes in natural gas prices (October 1, 2007 rate increase) and transportation and distribution rates without impact on margins. To a lesser degree, natural gas sales also benefited from more favorable weather conditions than in 2007. Distrigas revenues were up + 38.7% as a result of increased natural gas prices and a sharp increase in trade-offs due to more favorable market conditions. Other activities The drop in revenues from Other activities (-EUR 65 million) was due to trading activity levels and to energy sales related services.
- SUEZ ENERGY INTERNATIONAL
In EUR millions March 31, 2008 March 31, 2007 Total change Organic
growth
Revenues 1,851 1,586 + 16.8% + 23.4%
SUEZ Energy International revenues grew + 23.4% (+EUR 346 million) in organic terms, due to strong commercial dynamism across all geographic zones, in a context of strong energy demand and rising prices. Specifically, organic growth originated from: - Latin America (+EUR 149 million), thanks to increased spot electricity sales in Brazil (+EUR 100 million); the increase in sales in Peru (+EUR 19 million) and Chile (+EUR 29 million) were due mainly to higher prices. - Liquefied Natural Gas business (+EUR 82 million): continued optimization of London-based activity in the context of higher prices and seized arbitrage opportunities (5 cargos versus 1 during 1st quarter 2007). - North America (+EUR 73 million), mainly due to the commercial successes of SERNA (SUEZ Energy Resources North America, electricity supplier to commercial and industrial customers in the US) as well as to progress in the merchant power plant business. - Asia / Middle East (+EUR 42 million) thanks to expansion in the Gulf countries (+EUR 19 million, including the impact of the Sohar Power Company commissioning at the end of May 2007), and to positive price trends in Thailand (+EUR 8 million) and Turkey (+EUR 16 million).
- SUEZ ENERGY SERVICES
in EUR March 31, March 31, Total Organic
millions 2008 2007 change growth
Revenues 3,056 2,837 + 7.7% + 7.0%
Organic growth in SUEZ Energy Services revenues was + 7% (+EUR 198 million). - In France, installation and maintenance activities continued to record a strong development (+ 7.6%, or +EUR 59 million), based on contributions from all entities (Ineo, ENDEL, AXIMA, Seitha). Services activities (Elyo France) experienced sustained growth (+ 7.1%) due to more favorable weather conditions than for the same period in 2007 and to expanded commercial development. - In the Netherlands, business activity rose substantially (+ 14.6%, or +EUR 38 million), having fully profited from a strong order book at the end of 2007. In Belgium, activity remained stable under the combined effect of sustained Services activity and reduced Installation activity when compared the high level of activity during 1st quarter 2007 (Norway and the Netherlands). - Tractebel Engineering (+ 18.5%, or EUR 15 million) benefited from dynamism in all its divisions, particular in the nuclear area (+ 22%). - Outside France and Benelux, business activity reflected satisfying organic growth, particularly in Italy, Switzerland, and the countries of eastern Europe, but also in electricity and natural gas subsidiaries.
- SUEZ ENVIRONMENT
in EUR millions March 31, March 31, Total Organic
2008 2007 change growth
Revenues 2,909 2,768 + 5.1% + 6.6%
Water Europe 914 911 + 0.3% + 8.3%
Waste Europe 1,397 1,302 + 7.3% + 4.2%
International and 598 555 + 7.8% + 9.7%
others
SUEZ Environment reported organic growth of + 6.6% (+EUR 172 million). Total revenue growth was + 5.1%, affected mainly by exchange rate fluctuations and disposals (sale of Applus by AGBAR at year-end 2007). Water Europe announced sustained organic growth of + 8.3% (+EUR 68 million) thanks to AGBAR (+ 12.2%, +EUR 42 million) in Spain and internationally, and to Lyonnaise des Eaux (+ 5.4%, +EUR 23 million) based on commercial expansion of its water and wastewater activities. Waste Europe posted organic growth of + 4.2% (+EUR 53 million). In France (+ 3.9%, +EUR 26 million), its growth is fairly balanced between its services and treatment businesses. In the United Kingdom and in Scandinavia (+ 5.3%, +EUR 15 million), growth resulted in particular to Private Finance Initiative (PFI) contracts and commercial dynamism in industrial and commercial collection activities. In the Benelux countries and Germany (+ 3.7%, +EUR 13 million), growth is principally related to sorting and recycling activities and to the higher level of production of a new treatment plant. International recorded strong organic growth (+ 9.7%, +EUR 51 million), coming from Asia-Pacific (+ 13,5%) thanks to increased volumes and higher prices in water and waste services in China and to steady development of waste treatment and landfill disposal in Australia, water rate adjustments obtained in the regulated North American market (+ 9.9%) and expanded activities in the CEMME(1) Region (+ 10%). Degremont (+ 7%) benefited from a strong commercial activity level, with for instance contracts awarded in the Middle East now in execution phase (Doha West, Barka 2). SUPPLEMENTARY ANALYSIS - REVENUE BREAKDOWN BY GEOGRAPHIC ZONE 90% of Group revenues were generated in Europe and North America, with 82% in Europe alone. The revenue breakdown by geographic zone is as follows:
REVENUES March 31, % March 31, % Change
2008 2007 2008/2007
in EUR millions
France 3,359.3 24.5% 3,103.8 25.4% + 8.2%
Belgium 3,831.2 28.0% 3,346.3 27.4% + 14.5%
Subtotal France-Belgium 7,190.5 52.5% 6,450.0 52.9% + 11.5%
Other European Union 3,833.9 28.0% 3,338.9 27.4% + 14.8%
Others countries of Europe 175.8 1.3% 180.4 1.5% -2.5%
Subtotal Europe 11,200.3 81.7% 9,969.3 81.7% + 12.3%
North America 1,136.3 8.3% 1,089.2 8.9% + 4.3%
Subtotal Europe and
North America 12,336.6 90.0% 11,058.5 90.6% + 11.6%
Asia, Middle East & 630.3 4.6% 555.9 4.6% + 13.4%
Oceania
South America 557.9 4.1% 431.3 3.5% + 29.4%
Africa 182.1 1.3% 158.0 1.3% + 15.3%
TOTAL REVENUES 13,706.9 100.0% 12,203.7 100.0% + 12.3%
(Change in total revenues). NB: March 2007 data have been restated and now included in the Asia, Middle East & Oceania zone is the SUEZ Energy International subsidiary Baymina (Turkey), previously recorded under "Other countries of Europe." - BREAKDOWN OF ORGANIC GROWTH ON A COMPARABLE BASIS Organic growth in revenues and current operating income is analyzed on a comparable basis.
REVENUES March 31, March 31, Organic
in EUR millions 2008 2007 growth
Revenues 13,707 12,204
Changes in Group structure (1) -243 -110
Exchange rate fluctuations -200
Natural gas price variations 358
Comparable basis 13,464 12,251 + 9.9%
(1) Accounting respectively for 2008 revenues from newly consolidated companies and 2007 revenues from disposals.
CURRENT OPERATING INCOME March 31, March 31, Organic
in EUR millions 2008 2007 growth
Current operating income (1) 1,677 1,525
Changes in Group structure (2) -7 -7
Exchange rate fluctuations -19
Comparable basis 1,670 1,499 + 11.3 %
(1) Current operating income at March 31, 2007 is adjusted upward (EUR 1,525 million versus EUR 1,454 million) to take into account the classification of a recovery of provision for a nuclear cycle guarantee recorded in the 2007 six-month and annual financial statements. (2) Accounting respectively for 2008 current operating income from newly consolidated companies and 2007 current operating income from disposals.
- EBITDA RECONCILIATION
March 31, March 31,
2008 2007
EBITDA (previous definition) 2,335 2,131
Movements in provisions for pensions
and similar commitments 61 19
Dividends -34 -28
Share in income of associates -70 -65
EBITDA (new definition) 2,292 2,057
SUEZ, an international industrial and services Group, designs sustainable and innovative solutions in the management of public utilities as a partner of public authorities, businesses and individuals. The Group aims to answer essential needs in electricity, natural gas, energy services, water and waste management. SUEZ is listed on the Brussels, Luxembourg, Paris, Francfurt, Milano and Zurich stock exchanges and is represented in the major international indices: CAC 40, BEL 20, DJ STOXX 50, DJ EURO STOXX 50, Euronext 100, FTSE Eurotop 100, MSCI Europe and ASPI Eurozone. The Group employs 149,000 people worldwide and achieved revenues of EUR47.5 billion in 2007, 89% of which were generated in Europe and in North America. Disclaimer This press release contains certain non-historic information which constitutes statements of a prospective nature, and in particular forward-looking statements regarding events, trends, plans or future objectives. These statements are based on current opinions and hypotheses of management and are subject to risks and uncertainties which may imply a significant difference between the real results and those included either explicitly or implicitly in these statements (or previous results). Additional information concerning these risks and uncertainties are included in the documents filed by SUEZ March 18, 2008 with the Autorite des Marches Financiers. The forward-looking statements are presented at the date of the communication, and SUEZ does not undertake to update or to revise them, whether as a result of new information, future events or for any other reason.
Press contacts: Analyst
contacts:
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Belgium: +32-2-510-76-70
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