Annual Report 2011 - Analist.be

Overview of the activities - Suez EnvironnementFinancial reportIn a subdued economic environment,the group experienced sustained activitygrowth on each of its three operationalbusiness lines in 2011.Turnover rose by 6.9% in 2011 toEUR 14,830 million from its 2010 level(EUR 13,869 million). Excluding foreignexchange and group structure effects,activity expanded by 5.0%.• The Water Europe business line (grossexpansion of 2.0%, organic expansionof 2.9%) benefited from higher pricesand volumes at Agbar, while favourableprice evolutions at Lyonnaise des Eauxwere partially offset by a decline involumes invoiced.• The Waste Europe division registeredorganic growth of 9.0% (+ 9.4%gross) driven by the overall rise involumes and prices of secondary rawmaterials, which positively impactedthe Sorting/Recycling activity.• The International business line (grossgrowth of 8.5%, organic growth of1.6%) gained from a positive groupstructure effect (WSN EnvironmentalSolutions) and dynamic activity (pricesand volumes) in all units, particularlyin Asia, Australia and Morocco, withthe exception of Degrémont, impactedby the Melbourne contract.Earnings generated in Europe, NorthAmerica and Australia accountedfor more than 84% of total income,with more than 71% coming from theEuropean continent alone.This turnover increase was matchedwith improved operating performance.Gross operating income (EBITDA) for2011 grew by 7.4% to EUR 2,513 million(EUR 2,339 million in 2010), in particulardue to the effect of progress in costoptimisation (Compass 2), which resulted inEUR 130 million in net savings over the year,despite the additional construction costs forthe desalination plant in Melbourne.• The Water Europe business lineaccounted for 48% of this result withEUR 1,213 million, a gross increase of16.8% over 2010 (EUR 1,038 million).Its profit margin rose to 28.8% (25.2%in 2010), primarily reflecting thepositive impact of higher tariffs andcost control.• The Waste Europe business lineaccounted for 35% of this result withEUR 881 million, a 5.0% increase(EUR 839 million in 2010). Profitmargin declined slightly to 13.7%(14.2% in 2010) owing to the negativeimpact of higher secondary rawmaterials prices on margins.• The International business linecontributed EUR 471 million, a 15.2%decline from the previous year. Itsprofit margin also fell to 11.3% (14.4%in 2010) due to costs related to theMelbourne plant for an amount ofEUR 153 million in 2011.The group’s current operating income(EBIT) grew by 1.4% over 2010 toEUR 1,039 million (EUR 1,025 million).This positive evolution resulted fromfavourable group structure effects (Spainand Australia) which were offset to alarge extent by negative organic growth(impact of the Melbourne plant in theamount of EUR 262 million) and by slightlyunfavourable foreign exchange effects.Net result, group share, stood atEUR 323 million, a 42.8% decline from2010 (EUR 565 million), a year thatregistered net capital gains related to theAgbar transaction and to the unbundlingof joint interests. For 2011, operationalperformance improvements were largelyoffset by the impact of the additionalcosts in Melbourne (EUR 237 million).The group’s cash flow before financialexpenses and taxes (EUR 2,130 million)expanded (EUR 1,977 million in 2010).Free cash flow before disposals anddevelopment investments amountedto EUR 860 million, a 1% increase over2010 excluding non-recurring elements.This recurring improvement stemmedmainly from the favourable change intaxes paid. Net investments amountedto EUR 1,414 million.The group’s net financial debtat the end of 2011 amounted toEUR 7,557 million (EUR 7,526 million atend 2010). Average debt maturity wasextended to 6.4 years (6.2 years atend 2010).Return on capital employed (ROCE)stood at 7.1% in 2011 (7.2% in 2010),reflecting the impact of the constructionof the desalination plant in Melbournenot being compensated for by theimproved profitability of existing assets.Suez Environnement will propose,at the General Meeting of shareholderson 24 May 2012, to distribute a dividendof EUR 0.65 per share for 2011, a stablepayout compared to the previous year.Geographical breakdown of revenue (in %) Current operating margin by activities (in %) Return on capital employedby activities (ROCE) (in %)4030201004036.036.630201004036.036.630201010.111.5036.036.624.924.710.111.524.924.710.111.55.96.024.924.76.85.75.96.06.85.75.96.016.415.516.415.56.85.7FranceFranceSpainFranceOther European SpaincountriesOther European Spaincountries NorthOther America Europeancountries NorthAmerica AustraliaNorthAmerica AustraliaRest ofthe WorldAustraliaRest ofthe World16.415.5Rest ofthe World161412108642016 161412108642014.5141211.9108642014.511.914.511.96.06.06.06.06.06.03.18.33.18.33.18.3Water EuropeWater EuropeWater EuropeWaste EuropeWaste EuropeWaste EuropeInternationalInternationalInternational10 10 108086 64 42 209.78.0864209.78.09.78.06.76.26.76.26.72.8 6.27.22.87.22.87.2Water EuropeWater EuropeWater EuropeWaste EuropeWaste EuropeWaste EuropeInternational &otherInternational &otherInternational &other2011 201056 Annual Report 2011