Regulatory News:
Séché Environnement (Paris:SCHP) achieves and even exceeds
its 2020 targets presented at its Investor Day held on June 26,
2018 and clarified on the publication of its H1 2020
results.
The Group has once again shown the resilience of its business
lines, operating margins and cash flow generation.
It has underlined its ability, in 2021, to pursue its
profitable growth strategy in France and internationally, and has
confirmed its 2022 roadmap.
Resilience of business activity
Contributed revenue: €673m
-2%
Resilience of operating margins
EBITDA: €137m, or 20.4% of revenue
COI: €48m, i.e. 7.1% of revenue
+1%
Stable
Resilience of the financial
situation
Free cash flow: €63m
Net financial debt:
€450m
Financial leverage at
3.1x
+30%
-1%
stable
Dividend proposed to the General
Meeting of April 30, 2021:
€0.95 per share
(unchanged)
Favorable 2021 outlook Assumption
that the impacts of the health crisis will gradually reduce
Continued solid growth in France and
return to pre-crisis activity levels in all international
regions
Continued increase in operating margins
targeting EBITDA/contributed revenue of 21%
Capex resumption after cautious FY
2020
Improved financial leverage target ratio:
approximately 2.9x at the end of 2021 (excluding
acquisitions)
Confirmation of the roadmap through to
2022 Contributed revenue of between €750m and €800m, of which
around 30% international revenue
EBITDA of between 21% and 22% of
contributed revenue
Financial leverage ratio below 3.0x
EBITDA
At the Board of Directors meeting held on March 5, 2021 to
approve the financial statements for the 2020 financial year, the
Chairman, Joël Séché, stated: “At the end of an unprecedented year,
Séché Environnement has once again demonstrated the resilience of
its business lines and its operational, financial and environmental
performance.
This resilience is primarily due to the unfailing commitment of
the men and women who work at this Company: on behalf of the Board,
I express our deepest gratitude.
We also owe this resilience to the agility of our structure and
to the appropriateness of our development strategy, which is
focused on the business lines that drive the Circular Economy,
Ecological Transition and Hazard Containment.
As such, the internal and external growth dynamic continued
uninterrupted.
We have improved our environmental performance and that of our
customers, particularly in combating climate change, for example,
through our revamped facilities in Salaise. The provision of green
energy from those facilities to the Osiris chemicals platform is a
leading project in the circular economy applied to hazardous and
industrial waste and is an example of our contribution to the
decarbonization of the economy.
We won significant contracts with local authorities, invariably
on the Circular Economy markets, such as the Solena project in
Aveyron and the Mo'Uve delegated management contract in
Montauban.
Internationally, we also successfully completed the acquisition
of Spill Tech in South Africa at the very beginning of the year.
This acquisition strengthens the Group's presence as a major
environmentally-focused business in South Africa.
Thanks to our capacity for technological innovation, our
environmental know-how and our operational and financial agility,
we can approach the future with confidence.
At the beginning of 2021, Séché Environnement returned, in
overall terms, to its pre-crisis activity levels. In France and
internationally, the Group is stronger; the scope of its activities
has increased, its operating margins have increased and, as
evidence of its financial flexibility, its ability to generate
recurring free cash has been demonstrated.
Uncertainty remains concerning the evolution of the pandemic and
its economic consequences: I am certain that we will be able to
overcome these issues and confident that we will achieve our 2022
objectives, while continuing on our profitable, sustainable and
value-creating growth trajectory focused on the Environment and
Sustainable Development.”
Summary of activity, income, and financial situation at
December 31, 2020
The 2020 financial year was characterized by a global pandemic
that affected Séché Environnement's organization and operations in
France and in the countries in which the Group operates to varying
degrees. Against this background, Séché Environnement confirmed the
resilience of its business activities, operating margins and cash
flow generation, thus confirming its profitable growth
strategy.
Organically, Séché Environnement was able to draw on a solid
customer base, a significant recovery in waste volumes and price
increases, which offset, over the year as a whole, the fall in the
level of certain business activities seen during the Q2 health
crisis in most regions.
Benefiting from an agile and responsive structure, the Group
posted operating margins in 2020 that were equal to or higher than
those of the previous year, while its financial position confirmed
its solidity with financial leverage unchanged from end-2019.
Drawing on its business momentum, particularly in the Circular
Economy business lines, and benefiting from continued financial
flexibility, Séché Environnement is confident that it will be able
to achieve the economic, operational and financial objectives set
for 20222.
Solid markets, business momentum confirmed High-quality
organic growth
Excluding the one-off impact of the health crisis, Séché
Environnement benefited from strong industrial and local authority
business in France and in most of its regions, which sustained its
organic growth over the period.
As expected, the Group's levels of activity in H2 2020 were
good, comparable to those of H2 2019, which helped smooth out, at
least partially, the commercial impacts of the Q1 health
crisis.
In addition, the Group registered some significant commercial
successes in France, which have allowed it to expand and
consolidate its presence, particularly with local authorities in
the Circular Economy business lines through the Solena project3 and
the Mo'Uve delegated management contract4.
With contributed revenue5 of €672.5m, down slightly by -2.2%
compared to 2019 (in reported data) and -2.8% (at constant scope
and exchange rates), in 2020 Séché Environnement confirmed the
resilience of its business activities in France, and for the most
part, internationally:
- In France (77% of contributed revenue), consolidated activity
was stable compared to last year (+0.1% to €517.4m), with the Group
benefiting, since the end of H1, from a sharp recovery in waste
volumes, particularly non-hazardous waste, and a dynamic recovery
in its services activities.
- Internationally, revenue (€155.1m, -9.4% in reported data)
included Mecomer's contribution over an additional quarter compared
to 2019 (+€13.6m) and suffered from a significantly negative
foreign exchange effect (-€10.2m). Following the lockdowns,
business activities recovered at an uneven pace based on
geographical region, with Europe and South Africa posting robust
activity, while the consequences of the health crisis on Latin
America and Services worldwide (Solarca) were more long-term.
Operating income also confirmed their resilience, with
performances equal to or greater than those of last year on the
most significant ratios:
- Earnings Before Interest, Tax, Depreciation and Amortization
(EBITDA) totaled €137.0m, up slightly by 1.2% compared with 2019
reflecting a significant increase in gross operating profitability,
which rose to 20.4% of contributed revenue (vs. 19.7% in 2019). The
second half of 2020 proved to be a major contributor, including
compared to the second half of 2019, as the period benefited from
full capacity at the facilities, the increased investment made last
year and the positive effects of the industrial efficiency policy
and the cost-saving plan. Séché Environnement thus exceeded its
initial gross operating profit target of 20% of contributed revenue
in 20206;
- Current operating income (COI) was virtually stable compared to
2019, at €47.5m (vs. €47.8m in 2019), reflecting a slight
improvement in current operating profitability to 7.1% of
contributed revenue (vs. 7.0% in 2019);
- Operating income included various expenses totaling €(3.3)m, in
particular associated with the Group's international structure
(amounts paid for the acquisition of targets, expenses related to
finding a B-BBEE partner in South Africa, etc.) and amounted to
€44.2m, or 6.6% of contributed revenue (vs. €46.8m at December 31,
2019, i.e. 6.8% of contributed revenue).
Financial income fell to €(20.4)m compared to €(17.5)m a year
earlier, reflecting in particular an increase in the cost of gross
debt linked to the increase in average financial debt compared to
2019 and the impact of negative foreign exchange income of
€(1.7)m.
After accounting for tax expense of €(8.4)m, net income (Group
share) came to €13.8m, or 2.1% of contributed revenue (vs. €18.9m
at December 31, 2019, or 2.8% of contributed revenue).
Industrial investments (excluding IFRIC 12) are under control,
at €63.0m vs. €72.4m a year earlier, or 9.4% of contributed revenue
(vs.10.5% in 2019), a level that compares favorably with the
Group's medium-term objectives (between 10% and 11%)7.
Out of this total, maintenance investments amounted to €43.2m
(vs. €48.4m in 2019), or 6.4% of contributed revenue (vs. 7.0% in
2019), which illustrates the effects of the industrial efficiency
policy.
Development investments (€19.8m vs. €24.1m a year earlier) were
the subject of increased selectivity in view of the economic
environment in certain geographical areas, which was made more
uncertain by the health crisis. They were therefore limited to
strategic investments and mainly related to the development of new
capacities for Mecomer (Italy) and the continued roll-out of the
new ERP.
At December 31, 2020, the Group had free operating cash flow of
€63.3m (vs. €48.8m in 2019, reflecting an increase of +30.0% for
the period). The ratio of free cash flow to EBITDA stood at 46%,
well above the target of 35% set by the Group for 20208.
Free cash totaled €105.2m at December 31, 2020 (vs. €92.3m one
year earlier) and helped to strengthen the group’s liquidity
position of €275.3m (vs. €287.3m at end-2019). Note that the
revolving credit facility drawn down in H1 2020 was fully repaid
during the second half of the year.
Net financial debt (IFRS) was down slightly, to €450.2m at
December 31, 2020 (vs. €456.2m one year earlier).
Financial leverage, calculated according to the definition
included in the banking contract9, was unchanged at 3.1x EBITDA
(vs. 3.1x the previous year), substantially below the 3.95x set out
in the financial covenant –which could be raised to 4.25x in the
event of any acquisitions.
Consolidated data in €m
At December 31
2019
2020
Gross change
Contributed revenue
687.8
672.5
-2.2%
EBITDA
135.4
137.0
+1.2%
% of revenue
19.7%
20.4%
-
Current operating income
47.8
47.5
-0.6%
% of revenue
7.0%
7.1%
-
Financial income
(17.5)
(20.4)
-
Share of profit of associates
ns
(1.5)
-
Net income (Group share)
17.8
13.8
-22.5%
Recurring operating cashflow10
113.2
110.9
-2.1%
Industrial CapEx paid (excl. IFRIC 12)
69.1
63.6
-8.0%
Free operating cashflow11
48.7
63.3
+30.0%
Net financial debt under IFRS
456.2
450.2
-1.3%
Recent events and outlook
Acquisition of Spill Tech in South Africa
On January 18, 2021, Séché Environnement announced plans to
acquire the South African company Spill Tech12.
Spill Tech specializes in hazardous waste management and offers
high value-added services for industrial cleaning, site
decontamination, marine decontamination and polluted soil
treatment.
A company with a strong culture of social responsibility, Spill
Tech also fully meets the requirements of Level 1 of the B-BBEE
government program aimed at reducing racial inequality in South
Africa.
Spill Tech is a fast-growing company (with average revenue
growth of +40% per year between 2018 and 2020) and in 2021 is
expected to generate revenue of approximately €29m, adjusted EBITDA
of approximately €7.9m and consolidated net income of approximately
€4.6m.
The acquisition will be financed by drawing on the existing bank
credit facility line.
Subject to the removal of the conditions precedent and in
particular the approval of the competent authorities, this
acquisition is expected to be finalized in March 2021.
Outlook
Séché Environnement assumes that the economic effects of the
health crisis will gradually ease in 2021, in France and in most of
the countries in which the Group operates.
In this scenario, and given the resilience of its business
activities and margins in 2020, Séché Environnement is confident in
its ability to return to revenue growth and continue to improve its
operating margins in 2021, thus confirming the sales, operational
and financial trajectory that the Group has set itself for
202213.
Favorable 2021 outlook
Drawing on its 2020 economic, operational, financial and
non-financial achievements, Séché Environnement has confidence in
the resilience and sustainability of its business activities in
France and internationally.
Resilience of business lines with regard to the economic risks
posed by the pandemic
The Group is in command of the hazards of waste, which is a
strategic concern for the continuity of economic and social life.
As such, it operates in business lines that are critical to public
sanitation, protection of human health, and remediation of
environmental risks.
In particular, its positioning on the hazardous waste markets
makes it essential to the continuity of its industrial customers'
output. The majority of these customers operate in the strategic
sectors of energy, chemicals, health care, or pharmaceuticals. This
also means Séché Environment is a committed partner to its Local
Authority and Hospital customers, enabling them to continue their
public service missions.
Moreover, its strong presence in the markets of the Circular
Economy, Ecological Transition and the fight against climate
change, which are major societal issues, gives its activities
long-term growth momentum, driven both in France and
internationally by increasingly demanding public opinion,
increasingly stringent environmental regulations and increasingly
complex demands for solutions from industrial and public
customers.
Strong performance in the markets
In 2021, Séché Environnement should continue to benefit from
industrial business that remains strong, with industrial production
expected to remain at high levels, particularly in its core
customer base.
Contracts with local authorities, which mainly relate to
non-hazardous waste, should continue to benefit from the positive
effects of the implementation of the Circular Economy.
In particular, the prospect of a gradual and significant
increase, to take place between 2021 and 2025, in the TGAP (tax on
polluting activities) paid by the waste producer, is likely to
strengthen the waste recovery business lines by establishing a
better economic balance between the waste business lines in favor
of recovery activities.
In addition, the bans on cross-border transfers of waste, both
within the European Union and to Asian countries (China in
particular) strengthened in 2021, thus contributing to the
deployment of sustainable local solutions.
Return to growth for contributed revenue
These positive trends, both in France and on its main
international markets, have allowed Séché Environnement to
anticipate a return, in 2021, to growth for its revenues in France
and abroad.
The current financial year will be compared to the weak
performance seen in the first half of the year, which was impacted
by the health crisis, while the Group is expected to benefit from
full capacity at its recovery and treatment facilities over the
entire financial year, as well as from the contribution of the
commercial successes seen in 2020, such as Mo'Uve in Montauban, and
the scope acquired at the beginning of 2021 (Spill Tech).
Continued improvement in operational performance
At the operational level, Séché Environnement will pursue its
industrial efficiency strategy, based on increased selectivity in
relation to its investments and a €10m cost-saving plan spread over
2020-2021.
The Group is also expected to continue to benefit, at least in
respect of part of the year, from savings in overheads linked to
the Group's organization during the health crisis (limited travel
expenses, trade fairs, etc.).
These factors should enable the Group to improve its gross
operating profitability (EBITDA/contributed revenue) over the level
reached in 2020 and target contributed revenue of 21%.
Investment policy appropriate to the profitable growth
strategy
In 2021, Séché Environnement is planning a sustained investment
program, in line with growth projects aimed at developing its
international capacities, particularly in Italy (finalization of
the investment programmer that begun in 2020 to double Mecomer's
capacity) and in France, investments in the capacity of the HW and
NHW incineration business lines, as well as investments associated
with regulatory changes.
The Group will also continue the three-year investment program
begun in 2020 in its new ERP solution, which, among other benefits,
will better structure oversight of its operations in line with the
Group’s operational optimization policy.
All of these development projects should total around €20m in
2021, in addition to the Group’s standard maintenance and
development investments (estimated at around 10% of contributed
revenue). Investments will be made in line with the objective of
free cash flow generation (35% of EBITDA) and financial
flexibility, with an improved financial leverage ratio at around
2.9x EBITDA at the end of 2021 (excluding acquisitions)14.
Confirmation of the roadmap through to 2022
In looking towards 2022, Séché Environnement reaffirms its
confidence in its main strategic objectives, presented on December
17, 2019, in terms of market positioning and development, and
industrial and organizational policy:
Development strategy:
- In France, Séché Environnement intends to continue expanding in
the high added value businesses of the circular economy, in
particular in the recovery of scarce resources from hazardous waste
and energy recovery from non-hazardous waste, as well as in added
value service activities.
- Internationally, the Group plans to take significant positions
in emerging economies offering solid growth prospects in terms of
volume and value, buoyed by the tightening of local environmental
standards and rising barriers to entry. To achieve this, the strong
organic growth expected on these markets could be enhanced by
small-scale acquisitions if opportunities arise.
Activity growth:
Séché Environnement expects contributed revenue to amount to
between €750m and €800m at the end of 2022, with around 30%
generated internationally (compared with 23% in 2020) – at constant
scope.
Operating profitability and cash flow generation:
Profitable growth, industrial efficiency and productivity gains
enable Séché Environnement to set a target EBITDA of between 21%
and 22% of contributed revenue.
The free cash flow generation target of 35% of 2022 EBITDA is
fully confirmed, with an improved financial leverage ratio (net
financial debt / EBITDA) of below 3.0x 2022 EBITDA – excluding
acquisitions –.
Results presentation webcast March 9, 2021 at 8:30 am
Connection to the home page of Séché
Environnement's website
In French:
https://www.groupe-seche.com/fr
In English:
https://www.groupe-seche.com/en
Next release
First-Quarter 2021 Revenue:
April 27, 2021 after market close
About Séché Environnement Séché Environnement is the
leader in the treatment and recovery of all types of waste,
including the most complex and hazardous waste, and
decontamination, protecting the environment and health. Séché
Environnement is a family-owned French industrial group that has
supported industrial and regional ecology for over 35 years with
innovative technology developed by its R&D team. It delivers
its unique expertise on the ground in local regions, with more than
100 sites around the world, including around 40 industrial sites in
France. With 4,600 employees, including 2,000 in France, Séché
Environnement generates €700m in revenue, 25% of which from its
international operations, and is expanding through both organic
growth and acquisitions. Thanks to its expertise in the circular
economy, the treatment of pollutants and greenhouse gases, and
hazard containment, the Group directly contributes to the
protection of the living world and biodiversity – an area it has
actively supported since its creation.
Séché Environnement has been listed on Eurolist by Euronext
(Compartment B) since November 27, 1997. It is eligible for equity
savings funds dedicated to investing in SMEs and is included in the
CAC Mid&Small, EnterNext Tech 40 and EnterNext PEA-PME 150
indexes. ISIN: FR 0000039139 – Bloomberg: SCHP.FP – Reuters:
CCHE.PA
FINANCIAL INFORMATION AT DECEMBER 31,
2020
Comments on activity and results at December 31, 2020
At December 31, 2020, Séché Environnement reported consolidated
revenue of €673.1m, (vs. €704.4m at December 31, 2019. Reported
consolidated revenue includes non-contributed revenue of €0.6m (vs.
€16.6m in 2019).
Net of non-contributed revenue, contributed revenue totaled
€672.5m as of December 31, 2020 (vs. €687.8m a year earlier),
marking a slight fall of -2.2% compared to 2019 in reported data,
and -2.8% at constant scope and exchange rates.
Breakdown of revenue by geographic region
At December 31
2019
2020
Gross change
In €m
As a %
In €m
As a %
As a %
Subsidiaries in France
(excl. IFRIC 12 revenue and
compensation)
516.7
75.1%
517.4
76.9%
+0.1%
o/w scope effect
-
-
-
-
International subsidiaries
171.1
24.9%
155.1
23.1%
-9.4%
o/w scope effect
102.5
-
13.6
-
Total contributed revenue
687.8
100.0%
672.5
100.0%
-2.2%
Consolidated data at current exchange
rates. At constant exchange rates, contributed revenue at December
31, 2019 was €677.6m, illustrating a negative foreign exchange
effect of €(10.2)m.
After a second quarter marked by the peak of the health crisis
in most regions in which the Group operates, the business
activities, in overall terms, confirmed their resilience, supported
in France by the strong performance of industrial business (82% of
contributed revenue in 2020) and by the implementation of
regulations on the Circular Economy, while internationally, the
situation in each geographic region was different:
- In France, contributed revenue was stable (+0.1%) compared to
2019, at €517.4m vs. €516.7m at December 31, 2019 After a good
start to the year interrupted by the health crisis, most business
lines recovered following the end of the first lockdown, with
business levels at or even higher than pre-crisis levels. In its
industrial business, Séché Environnement has a core client base of
large companies in strategic sectors that have maintained a solid
level of waste production, including during the lockdown periods,
which has helped the performance of the recovery and treatment
activities, particularly for hazardous waste. Services activities
(Decontamination services and especially Environmental Emergency
services) also enjoyed a strong second half of the year, which
offset delays to projects as a result of the first lockdown. The
Local Authorities business enjoyed strong momentum characterized by
the strong recovery in volumes of non-hazardous waste (especially
Waste from Economic Activity (WEA)) after the first lockdown and,
more generally, a good economic environment thanks to the
implementation by these customers of strategies in favor of the
Circular Economy. However, energy recovery activities fell
significantly in H1, and were particularly affected by the Sénerval
generator incident (negative impact of €9.3m). Revenue earned in
France accounted for 76.9% of contributed revenue in 2020 (vs.
75.1% in 2019);
- Internationally, revenue totaled €155.1m at December 31, 2020
vs. €171.1m one year earlier, a fall of -9.4% in reported data.
International revenue includes a scope effect of €13.6m, linked to
Mecomer's full-year contribution (vs. 9 months in 2019). It posted
a significantly negative foreign exchange effect of €(10.2)m,
mainly due to the fall in the value of the South African currency
over the period. At constant scope and exchange rates,
international revenue fell -12.1% over the period. While Europe and
South Africa showed their resilience, this fall mainly reflects the
small contribution made by Latin America and Solarca (Services in
the Rest of the World). Over the period, international activity was
mainly driven by the strength of activities in Europe (Mecomer in
Italy and Valls Quimica in Spain) and by the resilience of
Interwaste's activities in South Africa, the revenue from which
increased by 3.5% at constant exchange rates over the financial
year, after the marked fall in activity in Q2 (-23.8%). Activity in
Latin America fell substantially over the year (-36% at current
exchange rates), as the signs of recovery in Q4 were insufficient
to offset the effects of the health crisis in the second and third
quarters. Finally, Solarca's activity fell significantly (-38%), as
government restrictions on travel caused significant delays to
projects. Revenue earned by international subsidiaries accounted
for 23.1% of contributed revenue in 2020 (vs. 24.9% in 2019).
Breakdown of revenue by division
At December 31
2019
2020
Gross change
In €m
As a %
In €m
As a %
Hazardous Waste division
450.5
65.5%
411.5
61.2%
-8.7%
o/w scope effect
75.1
-
13.6
-
-
Non-Hazardous Waste division
(excl. IFRIC 12 revenue and compensation)
237.3
34.5%
261.0
38.8%
+10.0%
o/w scope effect
27.4
-
-
-
-
Total contributed revenue
687.8
100.0%
672.5
100.0%
-2.2%
Consolidated data at current exchange
rates
The waste recovery and treatment divisions generally
demonstrated the resilience of their activities, with the
Non-Hazardous Waste (NHW) division posting strong growth throughout
the year, while the hazardous waste (HW) division continued to
suffer from the late resumption of activities in Latin America.
The HW division (61.2% of consolidated contributed revenue)
recorded revenue of €411.5m, down -8.7% compared to 2019.
At constant scope and exchange rates, the division's activities
fell by -11.0%, with differing situations for France and Europe, on
the one hand, and Latin America and Solarca, on the other:
- In France, the division brought in €304.7m in revenue, slightly
down by -1.8% compared to last year. Over the period, the division
was supported in its recovery and treatment activities by
industrial business, which still showed robust volumes and pricing,
while decontamination services, strengthened by the growth in
environmental emergency interventions, substantially made up for
the delays to projects caused by the health crisis at the beginning
of the year;
- Internationally, the division's revenue totaled €106.8m at
December 31, 2020 vs. €140.1m one year earlier). This revenue
includes a scope effect of €13.6m, linked to Mecomer's full-year
contribution (vs. 9 months in 2019). At constant scope and exchange
rates, international revenue contracted by -30.0% compared to 2019.
This fall reflects the more pronounced consequences of the health
crisis, resulting from the cyclical lag between regions, with a
greater impact in Latin America and the Rest of the World
(Solarca), while Europe and South Africa demonstrated their
resilience.
The NHW division represented 38.8% of contributed revenue with
contributed revenue of €261.0m, up +10.0% compared to December 31,
2019 (€237.3m),
- In France, the division brought in €212.7m in revenue, up +3.1%
compared to last year.. After the first lockdown, the sector
benefited from a strong catch-up effect in a market environment
driven by the implementation of the circular economy and saw
sustained levels of activity, often higher than pre-crisis levels,
particularly in the storage and decontamination business lines,
while energy recovery activities suffered a loss of €(9.3)m, as a
result of the industrial incident that occurred at the beginning of
the year in Sénerval;
- Internationally, revenue totaled €48.3m at December 31, 2020
(vs. €31.0m a year earlier), posting a very strong increase of
+55.9% at current exchange rates and +73.4% at constant exchange
rates, mainly due to the contribution of Interwaste in South
Africa.
Breakdown of revenue by activity
At December 31
2019
2020
Gross change
In €m
As a %
In €m
As a %
Treatment
339.8
49.4%
335.0
49.8%
-1.4%
o/w scope effect
46.1
-
13.4
-
-
Recovery
102.4
14.9%
85.5
12.7%
-16.4%
o/w scope effect
2.5
-
0.1
-
-
Services
245.6
35.7%
252.0
37.5%
+2.6%
o/w scope effect
54.0
-
0.1
-
-
Total contributed revenue
687.8
100.0%
672.5
100.0%
-2.2%
Consolidated data at current exchange
rates
Treatment activities brought in €335.0m at December 31, 2020 vs.
€339.8m one year earlier).
This increase includes a scope effect of €13.4m, reflecting the
consolidation of Mecomer's business over 12 months (vs. 9 months in
2019) as well as a foreign exchange effect of €(3.2)m.
At constant scope and exchange rates, treatment activities fell
by -4.5%, with different fortunes for the French and International
activities, particularly non-European activities:
- In France, treatment activities grew by +1.8% to €281.2m. They
benefited from favorable price and volume effects, and good levels
of capacity at hazardous waste incineration and storage facilities,
while the non-hazardous waste treatment businesses continued to be
underpinned by a favorable market environment and the enactment of
regulations associated with the circular economy;
- Internationally, treatment activities contracted significantly
(to €53.8m, or -15.2% in reported data and -33.0% at constant scope
and exchange rates), mainly due to the fall in activities in Latin
America.
Treatment activities accounted for 49.8% of contributed revenue
in 2020 (vs. 49.4% in 2019).
Recovery activities recorded revenue of €85.6m at December 31,
2020 (vs. €102.4m in 2019), down -16.4% over the period in reported
data and -16.2% at constant scope and exchange rates - factoring in
a negligible scope effect of +€0.1m and a foreign exchange effect
of €(0.3)m.
This fall was mainly due to energy recovery activities in
France:
- In France, revenue from recovery activities totaled €65.5m (vs.
€78.7m in 2019, down -16.8%). This fall was linked to the small
contribution of energy recovery activities within the Non-hazardous
Waste division, which suffered a loss of €(9.6)m due to an
industrial incident in the first half of the year at the Sénerval
energy recovery unit. The material recovery and hazardous waste
energy recovery activities performed well, particularly with the
expansion of the new facilities at Salaise, following the 2019
revamping project, which enabled, among other things, increased the
production of green energy by these facilities by 30%;
- Internationally, revenue was down -15.3% in reported data and
-14.1% at constant exchange rates, to €20.0m vs. €23.6m one year
earlier. This fall was mainly attributable to the PCB activities in
Latin America, with Spain confirming the resilience of its
regeneration activities with a strong second half of the year.
Recovery activities accounted for 12.7% of contributed revenue
in 2020 (vs. 14.9% in 2019).
Service activities recorded contributed revenue of €252.0m at
December 31, 2020 (vs. €245.6m one year earlier, i.e. an increase
of +2.6% in reported data).
At constant scope and exchange rates, after taking account of a
negligible scope effect of €0.1m and a foreign exchange effect of
€(6.8)m, services activities were up significantly by +5.4%.
Service activities benefited from:
- In France, the resumption of decontamination activities, which
largely offset delays to projects caused as a result of the first
lockdown and confirmed the growth momentum in environmental
emergency services. Revenue increased significantly by +5.6% to
€170.7m;
- Internationally, revenue was €81.2m, showing a modest
contraction of -3.3% at current exchange rates, but growth of +5.1%
at constant scope and exchange rates, with the loss incurred by
Solarca more than offset by the strong organic growth posted by
Interwaste in South Africa.
Services activities accounted for 37.5% of contributed revenue
in 2020 (vs. 35.7% in 2019).
EBITDA
At December 31, 2020, Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA) was 1.2% higher than in
2019, at €137.0m, representing 20.4% of contributed revenue (vs.
€135.4m, i.e. 19.7% of contributed revenue in 2019).
This +€1.6m increase from 2019 includes a scope effect linked to
the consolidation of Mecomer over an additional quarter, for
+€2.6m, and a foreign exchange effect of €(1.2)m.
At constant scope and exchange rates, EBITDA margin would have
reached almost the same level, at 20.3% of contributed revenue.
This stability of EBITDA compared to 2019 shows:
- Negative volume effects (particularly internationally), of
€(33.5)m, offset by:
- Very positive price effects, of +€27.0m, in line with the high
level of saturation of treatment facilities in France;
- And for the balance, the significant fall in:
- Certain operating expenses, resulting from the effects of the
industrial efficiency policy and the cost-saving plan;
- Staff expenses following measures taken to adapt costs at
certain sites abroad;
- Certain overheads such as travel expenses or commercial
expenses - trade fairs, receptions, etc. - as a result of the
pandemic, partially non-recurring.
Breakdown of EBITDA by geographic scope
In €m
2019
2020
Consolidated
France
Internnal
Consolidated
France
Internnal
Contributed revenue
687.8
516.7
171.1
672.5
517.4
155.1
EBITDA
135.4
104.5
30.9
137.0
111.3
25.7
% of contributed revenue
19.7%
20.2%
18.1%
20.4%
21.5%
16.5%
Consolidated data at current exchange
rates
For each geographic scope, the main changes were:
In France, EBITDA reached €111.3m, or 21.5% of contributed
revenue, compared with €104.5m (20.2% of contributed revenue in
2019), representing a significant increase of +6.5%.
This +€6.8m increase for the period mainly reflects:
- Positive commercial effects, with volumes recovering from their
standard levels in most activities during the second half of the
year, while prices continued to grow in line with the high
utilization rate of treatment facilities;
- Control of operating expenses in line with the industrial
efficiency policy and the cost-saving plan;
- Non-recurring effects, such as those resulting from the
consequences of the industrial incident that occurred in the first
half of the year in Sénerval - an impact of around €(7.6)m - as
well as the (to an extent, one-off) reduction in certain operating
expenses due to restrictions linked to the pandemic (travel costs,
commercial expenses, etc.).
Internationally, EBITDA totaled €25.7m, or 16.5% of contributed
revenue (vs. €30.9m, i.e. 18.1% of contributed revenue in
2019).
This €(5.2)m contraction reflects:
- The scope effect (+€2.6m) associated with Mecomer's
contribution over an additional quarter compared to 2019;
- the currency effect of €(1.2)m;
- At constant scope and exchange rates: a fall of €(6.6)m due to
the fall in activity in certain geographical regions, despite the
measures put in place to reduce operating expenses.
Current operating income
At December 31, 2020, current operating income (COI) was €47.5m,
or 7.1% of contributed revenue (vs. €47.8m, i.e. 7.0% of
contributed revenue in 2019).
This virtual stability (-€0.3m, or -0.6% compared to December
31, 2019) includes:
- the scope effect of +€2.5m associated with the integration of
Mecomer over an additional quarter compared to 2019;
- the currency effect of €(0.3)m;
- At constant scope and exchange rates, a fall of €(2.5)m, with
the strong contribution from the French business being checked by
the decline in the contribution made by the international
businesses.
Breakdown of current operating income by geographic scope
In €m
2019
2020
Consolidated
France
Internnal
Consolidated
France
Internnal
Contributed revenue
687.8
516.7
171.1
672.5
517.4
155.1
Current operating income
47.8
32.2
15.6
47.5
41.0
6.5
% of contributed revenue
7.0%
6.2%
9.1%
7.1%
7.9%
4.2%
Consolidated data at current exchange
rates
For each geographic scope, the main changes were:
- In France, current operating income totaled €41.0m, or 7.9% of
contributed revenue (vs. €32.2m, i.e. 6.2% of contributed revenue
in 2019). This good performance reflects the increase in EBITDA
(+6.8m) and the stability of depreciation and provisions, in line
with the controlled management of investments and the industrial
efficiency policy. It should be noted that this scope recorded a
one-off fall in Sénerval's contribution of €(9.0)m due to the
industrial incident that occurred in the first half of the
year.
- Internationally, COI totaled €6.5m, or 4.2% of contributed
revenue (vs. €15.6m, i.e. 9.1% of contributed revenue in 2019).
This fall (-€9.1m) reflects:
- a scope effect of +€2.5m, related to Mecomer;
- a currency effect of €(0.3)m;
- At constant scope and exchange rates, the (€6.6)m fall in
EBITDA internationally, less the increase in depreciation and
provisions and other operating expenses of €(4.7)m.
Operating income
At December 31, 2020, operating income came to €44.2m, i.e. 6.6%
of contributed revenue (vs. €46.8m, or 6.8% of contributed revenue
one year earlier).
This increase essentially reflects the amounts incurred on
targeted acquisition projects, in the amount of €(1.1)m, and other
miscellaneous expenses for €(3.3)m, including amounts associated
with restructuring transactions in South Africa (€0.6m) and amounts
associated with the performance plan (€0.4m).
Financial income
At December 31, 2020, financial income was €(20.4)m compared to
€(17.5)m in 2019.
This change is attributable to:
- An increase in the cost of net debt, to €17m (vs. €15.7m last
year) linked to the increase in average net financial debt combined
with a fall in the cost of gross debt to 2.87% (vs. 3.04% in
2018);
- The balance of other financial income and expenses, which were
€(3.4)m vs. €(1.7)m in 2019), of which:
- The impact of currency fluctuations in the amount of
€(1.7)m.
- Various financial expenses in the amount of €(1.7)m including
(€0.9)m in bank fees and (€0.7)m related to the accretion of the
thirty-year provision for risk.
Income tax
In 2020, the Corporate Tax expense was €8.4m (vs. €10.4m in
2019). The effective tax rate was 35.3% (vs. 35.4% in 2019) due in
particular to the prudent utilization of loss carryforwards,
particularly the 2020 losses of certain subsidiaries within the
international scope.
Share of income of associates
The share of net income of affiliates primarily comprised the
Group’s share of the income of Gerep and Sogad and amounted to
€(1.5)m at December 31, 2020 (vs. an insignificant figure in
2019).
Consolidated net income
At December 31, 2020, consolidated net income was €13.9m (vs.
€18.9m in 2019), reflecting an increase of -26.5% compared to last
year and standing at 2.1% of contributed revenue (vs. 2.8% one year
ago).
After booking the minority interest share in that income,
comprising a loss of €(0.1)m vs. €(1.1)m in 2019, representing in
particular the minority interest shares in Solarca and Mecomer, net
income (Group share) was €13.8m, i.e. 2.1% of contributed revenue
(vs. €17.9m for the 2019 financial year, i.e. 2.6% of contributed
revenue).
Net earnings per share amounted to €1.77 vs. €2.27 for
2019).
Comments on cash flow and the financial situation as at
December 31, 2020
Cash flow
Cash flows relating to operating activities
Over the financial year, the Group generated €121.4m in cash
flows from operating activities (vs. €110.4m in 2019), i.e. an
increase of +€11.0m.
This change reflects the combined effect of:
- The stability of gross cash flow before tax and financial
expenses, at €121.3m (vs. €121.4m one year earlier).
- the fluctuation in WCR of +€11.3m over the year, an improvement
of +€16.3m compared to the 2019 fluctuation;
- €(11.2)m in taxes paid compared to €(5.9)m in 2019 (a cash flow
change of €(5.3)m);
Cash flows relating to investments
In €m, at December 31
2019
2020
Industrial investments
72.5
63.6
Financial investments
1.1
-
Investments recorded
73.6
63.6
Industrial investments
69.0
64.2
Financial investments
-
4.1
Acquisition of subsidiaries - Net cash
flow
69.8
9.0
Investments paid out
138.8
77.3
In 2020, recognized industrial investments amounted to €63.6m -
including €0.6m in “IFRIC 12” investments in concessions (vs.
€72.5m, including €0.1m in investments in concessions in 2019).
Excluding investments in concessions, they cover:
- Recurrent investments totaling €43.2m, representing 6.4% of
contributed revenue (vs. €48.4m in 2019, or 7.0% of contributed
revenue).
- Non-recurrent investments totaling €19.8m, or 2.9% of
contributed revenue (vs. €24.1m, or 3.5% of contributed revenue, in
2019).
Industrial investments can be broken down between facilities as
follows:
- €9.8m in category 2 expenses “public service delegation” (vs.
€8.1m in 2019);
- €18.7m for storage equipment (vs. €16.4m in 2019);
- €14.2m for thermal treatment systems, platforms and other
treatments (vs. €26.5m in 2019);
- €6.1m for materials and energy recovery facilities (vs. €2.8m
in 2019);
- €8.5m for eco-service systems (vs. €10.8m in 2019);
- €5.7m for holding company activities (mainly for information
systems (vs. €6.9m in 2019).
Cash flows relating to financing activities
Total net cash relating to financing activities amounted to
€(30.0)m in 2020, essentially reflecting:
- Flows from new borrowings: +€64.4m vs. €111.1m in 2019;
- Flows from loan repayments: €(67.3)m vs. €(45.9)m in 2019;
- Interest expense: €(15.1)m vs. €(13.8)m in 2019;
- Flows from dividends paid to shareholders and minority
interests: €(8.3)m vs. €(8.1)m in 2019;
- Cash flows without gain of control: €(4.1)m vs. €(1.6)m in
2019.
Debt and funding structure
Change in net debt
In €m, at December 31
2019
2020
Bank loans
203.7
241.5
Non-bank debt
32.2
29.6
Bonds
254.0
229.3
Lease liabilities
42.9
45.0
Miscellaneous financial debt
4.2
3.1
Short-term bank borrowings
11.5
7.1
Equity investments
-
-
Total financial debt (current and
non-current)
548.5
555.5
Cash balance
(92.3)
(105.3)
Net financial debt
456.2
450.2
of which due in less than one year (1)
(29.1)
(37.5)
o/w due in more than one year
427.1
412.7
Net bank debt (2)
399.4
395.2
- (1) The cash balance is
considered over less than one year
- (2) Calculated according to the
definition provided in the banking contract
At December 31, 2020, gross financial debt stood at €555.5m,
compared to €548.5m a year earlier.
This +€7.0m increase mainly reflects changes in:
- bank debt: +€35.3m;
- bond debt: €(24.7)m;
- financial leases: €+2.1m;
- various positions: (€5.6)m including current bank loans for
€(4.5)m.
At December 31, 2020, 80% of gross financial debt –including
financial leases and after recognizing hedging instruments- was
hedged at fixed rates (vs. 94% in 2019).
At December 31, 2020, the cash balance stood at €105.3m, up
+14.1% compared to the previous year, reflecting a further
improvement in cash and cash equivalents reported on the balance
sheet. Note that the facility drawn down in H1 2020 was fully
repaid during the second half of the year.
At that date, the Group's net financial debt fell slightly to
€450.2m (vs. €456.2m one year earlier).
Under the definition provided in the banking contract, which
excludes certain debts (including non-recourse debts and lease
liabilities), net debt was €395.2m at December 31, 2020 (vs.
€399.2m one year earlier), representing financial leverage at the
unchanged ratio of 3.1x EBITDA.
1 vs. an initial target of approximately 3.0x - see press
release from Tuesday, December 17, 2019- 2 See Investor Day,
Tuesday, December 17, 2019 3 See press release from Monday,
September 14, 2020 4 See press release from Tuesday,
December 15, 2020 5 Contributed revenue refers to reported
revenue minus IFRIC 12 revenue and diversion compensation collected
by Sénerval (net of variable cost savings on metric tons not
incinerated, collected to cover the costs laid out to ensure
continuity of public service). IFRIC 12 revenue corresponds to the
amount of investments in service concessions, which are booked as
both intangible fixed assets and as revenue in accordance with the
recommendations of IFRIC 12. 6 See Press Releases from,
December 17, 2019 and Tuesday, July 28, 2020. 7 See press
release from December 17, 2019 8 See press release from
December 17, 2019 9 The definition included in the banking
contract excludes certain debts from the calculation of net
financial debt, such as non-recourse debt and lease liabilities.
10 Earnings before interest, tax, depreciation and
amortization plus dividends received from subsidiaries and the
balance of other operating income and expenses and cash, less site
maintenance and restoration expenses, major maintenance expenses
under concession arrangements ("public service delegations") and
investments in concessions (IFRIC 12) 11 Free cash before
non-recurring industrial investments, financial investments,
dividends and debt repayments. 12 See press release from
Monday, January 18, 2021 13 See press release from Tuesday,
December 17, 2019 14 See press release from Tuesday,
December 17, 2019: “around 3.0x”.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210308005604/en/
SÉCHÉ ENVIRONNEMENT Analyst / Investor Relations
Manuel ANDERSEN Head of Investor Relations
m.andersen@groupe-seche.com +33 (0)1 53 21 53 60
Media Relations Constance DESCOTES Head of Communications
c.descotes@groupe-seche.com +33 (0)1 53 21 53 53
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