Solid business and favorable
environment
Significant increase in operating
profitability
Financial flexibility considerably
improved
Upward revision of 2021 targets, on track to
reach 2022 road map one year early
Planned acquisition of Osis-IDF
Commercial performance Contributed
revenue: €355m +18%
Operational performance EBITDA: €81m, or 22.9% of revenue
+51% COI: €33m, or 9.3% of revenue +152%
Financial performance Free operating cash flow: €45.1m
+14% 2.7x financial leverage ratio -0.6x
2021 targets revised upwards1
Contributed revenue* close to €750m, which is the minimum target
set for 2022
EBITDA between 21% and 22% of contributed revenue* (vs "aim for
EBITDA of 21% of contributed revenue")
Improved financial leverage ratio to 2.7x (vs "of around 2.9x at
the end of 2021")
* at constant scope including TGAP (tax on polluting
activities)
Regulatory News:
Séché Environnement (Paris:SCHP) posted solid growth momentum
in France and returned to a good level of international
activity.
The Group has increased its operating margins significantly
and, thanks to its strong cash generation, it considerably improved
its financial flexibility.
These results confirm the suitability of the Group's
profitable growth strategy and the lasting effects of its
industrial efficiency policy.
Séché revised its targets for 2021 and is expected to reach
most of the business and operating profitability goals initially
set for 2022.
New prospects for medium-term growth and increased operating
profitability will be presented at the end of the year as part of
an "Investor Day".
At the Board of Directors meeting held on Friday, September 10,
2021 to approve the financial statements drawn up on June 30, 2021,
the Chairman, Joël Séché, stated: "The first half of 2021
demonstrates Séché Environnement's ability to fully benefit from
the effects of the economic recovery after 2020, a year in which
the Group demonstrated the resilience of its activities and
margins.
Over the period, Séché achieved commercial, operational and
financial performance levels that were not only well above H1 2020,
but also higher than H1 2019.
With its array of solutions to meet the long-term challenges
faced by industrial and government clients in the establishment of
a circular and decarbonized economy, Séché is positioned in the
high value-added segment of waste recovery activities at the core
of business lines with high barriers to entry. Drawing on
innovations from its R&D work, which hews as closely as
possible to the needs of its customers, the Group is able to
capture the growth in its markets, in both volume and value, in
France and internationally.
In France, the Group enjoys strong growth momentum in terms of
volumes and prices. Internationally, most regions are returning to
pre-crisis activity levels. In addition, Séché continued to expand
and adapt its service offering through the continuation of a
targeted acquisition strategy. With Spill Tech in South Africa, it
complemented its existing recovery and treatment offering with high
value-added environmental emergency management services. Finally,
Séché recently announced its intention to acquire Osis-IDF from
Veolia. The company specializes in sanitation services ‒ recurring
activities in the heart of regions where the Group is not currently
operating performed for a replenished client portfolio.
Operating margins have risen sharply: the industrial efficiency
policy and cost control efforts laid out in the cost-cutting plan
have contributed significantly to the increase in profitability of
facilities and the entire organization. From a financial
perspective, the Group has managed its debt while maintaining a
dynamic growth investment policy, particularly at the international
level, and cash generation has contributed to a major improvement
in balance sheet flexibility.
These trends are sustainable. The excellent economic,
operational and financial performances of the past period led the
Group to revise its targets for 2021 upwards and it expects to be
one full year ahead of schedule in achieving goals that had been
set for 2022.
New targets for business growth and medium-term operating
profitability will be announced at the end of the year. I firmly
believe these will illustrate the relevance of Séché
Environnement's profitable growth strategy implemented at the heart
of the sustainable development markets in France and
internationally. "
Selected financial data
Consolidated data in €m
At June 30
2019 restated*
2020 restated*
2021
Gross change
Contributed revenue
314.4
299.7
354.7
+18.4%
EBITDA
63.6
53.8
81.1
+50.7%
% of revenue
20.2%
18.0%
22.9%
Current operating income
22.1
13.0
32.9
+152.1%
% of revenue
7.0%
4.3%
9.3%
Net financial income
(8.4)
(10.4)
(9.4)
-
Income tax expense
(5.0)
(2.3)
(7.2)
Share of profit of associates
(0.1)
(0.1)
(0.5)
Minority interests
(0.5)
(0.0)
(0.4)
Net income (Group share)
7.6
(0.9)
13.5
-
% of revenue
2.4%
(0.3%)
3.8%
Earnings per share (Group
share)
0.96
(€0.12)
€1.72
Recurring operating cash flow2
52.9
41.7
62.9
+50.8%
Industrial CapEx paid (excl. IFRIC 12)
30.2
35.4
34.7
-2.0%
Free operating cash flow3
35.0
39.4
45.1
+14.5%
Net financial debt under IFRS
445.9
445.5
465.5
+4.5%
Financial leverage ratio
3.2x
3.3x
2.7x
-0.5x
* Contributed revenue excluding TGAP (tax on polluting
activities)
Summary of activity, income, and financial situation at June
30, 2021
In H1 2021, Séché Environnement consolidated its profitable
growth momentum and confirmed the favorable outlook for its
business, operating profitability and financial position for the
entire current fiscal year and beyond.
In France, the Group benefited from robust markets, supported by
good volume and positive price trends, both in its industrial and
local authorities markets. This commercial momentum was driven by
the implementation of an industrial efficiency policy that promotes
the full availability of recovery and treatment tools and improves
the organization's performance.
On the whole, International business confirmed the return to
growth and, to varying degrees, posted more sustained levels of
activity after a financial year tarnished by the pandemic in 2020.
In South Africa, the Group acquired Spill Tech, a leading operator
in the environmental emergency sector, thus supplementing its
network in this promising region4.
On a like-for-like basis, in H1 2021, Séché Environnement
achieved commercial, operational and financial performance that not
only exceeded the same period in 2020 but also significantly
improved over the period ended on June 30, 2019.
On the finance front, the Group issued a bond of €50m with a
maturity of 8 years under improved interest rate conditions and
with ESG impact criteria. The bond issue is meant to finance the
acquisition of Spill Tech and other growth investments planned by
the Group in 20215.
Over the period, the Group managed its debt while maintaining an
active growth investment policy, particularly in international
markets. The Group's financial flexibility is improving
significantly.
Drawing on its sustained growth momentum at the heart of the
growing markets of the circular economy and the fight against
climate change, Séché is confident that its industrial efficiency
policy will continue to have a positive impact. For 2021 and
beyond, it anticipates a continued increase in its operating
margins, strong cash generation and continued improvement in its
financial flexibility.
The Group is reviewing its targets ‒ especially in terms of
operating results and financial position ‒ for 2021 and is expected
to achieve, one year in advance, most of the targets initially set
out in its 2022 road map6.
Finally, the Group recently announced its intention to acquire
from Veolia Group the eight operations centers of Osis IDF, a
sanitation specialist, subject to the approval of the competent
authorities7.
Strong markets and confirmed sales momentum
High-quality organic growth
At June 30, 2021, Séché Environnement posted contributed
revenue8 of €354.7m, a sharp increase of 18.4% compared to June 30,
2020. That figure includes €11.1 million in contributions from
Spill Tech, which has been consolidated as of March 1, 2021.
At constant scope, contributed revenue stood at €343.6m,
reflecting a sharp rise of 14.6% compared to contributed revenue at
June 30, 2020 (€299.7m) and of 15.0% at constant exchange rates.
The figure also compares quite favorably to contributed revenue at
June 30, 2019 (€314.4m).
In H1 2021, Séché Environnement confirmed the impressive
increase in its activities in France, and to varying degrees, the
return of international growth:
- In France (74% of contributed revenue), activity rose sharply
(+16.9% to €261.3m), with the Group benefiting from high volumes
and good prices in all its recovery and treatment markets, while
Services business lines also confirmed their momentum;
- Internationally, revenue (€93.5m or +22.5%, reported data)
recorded Spill Tech's contribution over four months at €11.1m. At
constant scope and exchange rates, growth in this scope was 9.4%.
Europe and South Africa posted significant growth, while Latin
America, which was slower to feel the effects of the public health
crisis, suffered in H1 2021 from an unfavorable basis of
comparison.
Operating results performed considerably better than in H1 2020
and above H1 2019:
- EBITDA was €81.1m, i.e. 22.9% of contributed revenue. It posted
an increase of 50.7% compared to June 30, 2020 (and was up 27.5%
over the same period in 2019) It includes a scope effect related to
the integration of Spill Tech as of March 1, 2021, for €3.4m (30.6%
of revenue). At constant scope, EBITDA increased by 44.4% versus
June 30, 2020. It came to 22.6% of contributed revenue (versus
18.0% at June 30, 2020, and 20.2% at June 30, 2019). In France, the
Group benefited from the availability of its facilities,
strengthened by the effects of its industrial efficiency policy,
which enabled it to process increased volumes and take advantage of
favorable price effects and mix effects. Internationally, the Group
benefited from more positive trends in its business compared to the
same period last year, as well as firm control of its operating
expenses, particularly in Latin America;
- Current Operating Income (COI) was €32.9m, i.e. 9.3% of
contributed revenue. It was up 152.1% compared to June 30, 2020
(and rose 48.4% compared to the same period in 2019). It includes
Spill Tech's contribution of €2.9m (26.1% of revenue). At constant
scope, COI rose sharply compared to June 30, 2020 (+130.0%).
Current operating profitability was 8.7% of contributed revenue
(4.4% in H1 2020 and 7.0% in H1 2019). This major improvement
mainly reflects the favorable trend in gross operating
profitability in a context of controlled depreciation expenses in
line with the selective investment policy;
- Operating income reached €30.8m, or 8.7% of contributed
revenue, marking an increase of 158.8% compared to 2020 (+42.6%
compared to 2019). Its change mainly reflects the increase in
COI.
Financial income improved to (€9.4m) versus (€10.4m) one year
ago, due to the slight decrease in the cost of gross debt (2.78%
versus 2.91% one year ago) and the improvement in the balance of
financial income and expenses (with a notable reduction in exchange
rate loss).
After recognition of a tax expense for (€7.2m) compared to
(€2.3m) in H1 2020, the share of income of associates – (€0.5m)
versus (€0.1m) – and non-controlling interests for (€0.4m) versus
(€0.0m), net income (Group share) amounted to €13.5m or 3.8% of
contributed revenue compared to a net loss of (€0.9m) at June 30,
2020 (and net profit of €7.6m at June 30, 2019).
Industrial investments (excluding IFRIC 12) were under control,
at €38.8m versus €25.8m one year earlier), i.e. 10.9% of
contributed revenue (8.6% at June 30, 2020). Their growth in H1
2021 mainly reflects the recovery in development investments, which
had been suspended at the same period last year.
Available operating cash flow stood at €45.1m (versus €39.4m at
June 30, 2020), an increase of 14.5% over the period). The ratio of
free cash flow to EBITDA stood at 56% well above the target of 35%
set by the Group9.
Available cash was €134.3m (versus €215.1m one year earlier,
including €100m in drawdowns on the credit facility) and helped
strengthen a liquidity position of €304.3m (versus €310.1m at June
30, 2020).
Net financial debt (IFRS) was under control at €445.5m (versus
€445.5m at June 30, 2020) and financial leverage, calculated in
accordance with the banking agreement10, was significantly reduced
to 2.7x EBITDA (versus 3.3x one year ago), illustrating a vast
improvement in the Group's balance sheet flexibility.
Recent events and outlook
Planned acquisition of eight operational centers from Osis
IDF11
On July 31, 2021, Séché Environnement entered into an agreement
with Veolia Group to acquire eight operational centers specializing
in the maintenance of sanitation networks and structures in
Ile-de-France owned by Osis-IDF, a subsidiary of Veolia.
For Séché, the acquisition of these eight centers, grouped under
the name "Agence Osis-IDF Collectivité", rounds out its range of
environmental services with new promising business lines and
expands its geographical coverage to Ile-de-France through a
leading company on its markets.
Agence Osis-IDF Collectivité is expected to generate revenue of
around €27m for the current financial year, with revenue growing
steadily at about 7% per year since 2017 (excluding 2020),
amounting to 10% growth compared to 2020. The expected EBITDA for
2021 is around €4m, with an EBIT along the same lines.
Séché Environnement made an irrevocable pledge to Osis-IDF to
acquire the Agence Collectivité subject, among other conditions, to
the approval of the French Competition Authority.
As a result, the acquisition is expected to be finalized in
early 2022. It will be funded from the Group's free cash flow, with
no significant impact on the liquidity position or financial
leverage.
Upward revision of 2021 targets
On the strength of its economic, operational and financial
achievements in H1 2021, Séché Environnement is confident in its
ongoing growth in France and internationally, in the long-term
expansion of its operating margins and the continued improvement in
its balance sheet strength and financial flexibility.
Good market trend in terms of volume and price
In H2 2021, Séché Environnement expects to continue to benefit
in France, from persistently strong industrial markets, with
industrial production holding steady at a high level, particularly
for its core clients, which should favor volume effects,
particularly in terms of hazardous waste recovery and treatment
facilities.
Contracts with local authorities, which mainly relate to
non-hazardous waste, should continue to benefit from the positive
effects of transitioning to a circular economy.
These trends should continue to benefit from favorable
commercial effects for the full year.
Internationally, most areas are expected to confirm their return
to growth, this period benefiting in addition from the favorable
comparison basis of H2 2020.
The contributed revenue12 expected for 2021 should therefore be
close to €750m, a minimum target initially set for 202213.
Accelerated improvement in operational performance
From an operational standpoint, Séché Environnement will
continue its industrial efficiency strategy, based on heightened
selectivity in its investments, improving the use conditions of its
facilities and optimizing its logistics structure. In addition, it
will maintain its productivity efforts through its cost-cutting
plan.
These factors should enable the Group to improve its gross
operating profitability (EBITDA/contributing revenue including
TGAP) and aim for a new gross operating margin target14ranging from
21% to 22% of contributed revenue, including TGAP.
Confirmation of significantly improved flexibility
Séché Environnement will maintain its selective investment
policy in addition to development projects worth around €20m for
the year as a whole. The industrial investments, which are expected
to total about €90m, will be committed to meeting the Group's
liquidity and flexibility objectives.
The Group confirmed the improvement in its financial flexibility
objective, and is now targeting a leverage ratio of around 2.7x
EBITDA at end-2021 (excluding external growth), after having
already lowered it to 2.9x from 3.0x in March 2021.15
Medium-term outlook
Séché Environnement expects to achieve most of the targets it
had set as the endpoint of its 2022 road map in 2021, one year
ahead of schedule16.
New prospects to grow the business and raise operating
profitability will be detailed as part of an "Investor Day"
scheduled for the end of 2021.
Results presentation webcast September 14, 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
Third-quarter 2021 revenue: October 26, 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 generated nearly €675m in revenue in
2020, 25% of which from its international operations, and is
expanding through both organic growth and acquisitions. Thanks to
its expertise in creating circular economy loops, 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 JUNE 30,
2021
(Excerpts from the Management
Report)
Comments on activity and results at June 30, 2021
At June 30, 2021, Séché Environnement reported consolidated
revenue of €382.5m, compared to €313.2m at June 30, 2020. Reported
consolidated revenue includes non-contributed revenue of €27.8m
(versus €13.5m at June 30, 2020).
Net of non-contributed revenue, contributed revenue totaled
€354.7m as of, June 30, 2021, amounting to an 18.4% increase
against June 30, 2020. It includes the contribution of Spill Tech,
consolidated as of March 1, 2021, for €11.1m.
At constant scope, contributed revenue came to €343.6m (versus
€299.7m a year earlier), marking a sharp rise of 14.6% compared to
June 30, 2020, in reported data, and of 15.0% at constant scope and
exchange rates.
Breakdown of revenue by geographic region
At June 30
2020
2021
Gross change
In €m
As a %
In €m
As a %
As a %
Subsidiaries in France (excl.
IFRIC 12 revenue and TGAP)
223.4
74.5%
261.2
73.6%
+16.9%
o/w scope effect
-
-
-
-
International subsidiaries
76.3
25.5%
93.5
26.4%
+22.5%
o/w scope effect
13.6
-
11.1
-
Total contributed revenue
299.7
100.0%
354.7
100.0%
+18.4%
Consolidated data at current exchange
rates.
At constant rates, contributed revenue at,
June 30, 2020 was €298.7m, illustrating a negative foreign exchange
effect of (€1.0m).
The first half of 2021 confirmed a high level of activity in
France and abroad in the main geographical regions:
- In France, contributed revenue was up considerably (+16.9%), to
€261.2m versus €223.4m at June 30, 2020. Séché Environnement
benefited from industrial markets supported by the high level of
industrial production and local authorities contracts driven by the
implementation of regulations related to the circular economy. This
robust market trend and sales momentum enabled the Group to benefit
from volume effects and favorable price effects. All activities
contributed to growth. Revenue earned in France accounted for 73.6%
of contributed revenue at June 30, 2021 (versus 74.5% one year
earlier);
- Internationally, revenue totaled €93.5m on June 30, 2021,
versus €76.3m one year earlier, a 22.5% surge in reported data.
International revenue includes a scope effect of €11.1m, linked to
the contribution of Spill Tech, which was integrated on March 1,
20221. It also had a significantly reduced negative exchange rate
effect compared to H1 2020: (€1.0m) versus (€10.2m). At constant
scope and exchange rates, international revenue growth was 9.4%
over the period, illustrating the return to growth in most
geographical regions:
-
Europe (revenue: €34.2m, up 4.0%): growth momentum in Europe
(good increase in Mecomer, hazardous waste platform activity in
Italy; Valls Quimica, chemicals recovery in Spain; and UTM,
industrial gas recovery in Germany) was hampered by the lackluster
performance of Iber-Trédi, waste trading in Spain.
-
South Africa (revenue: €33.8m, up 20.8%): Interwaste confirmed
its return to normative activity levels in markets driven by the
needs of major industrial clients in terms of environmental
solutions at the highest international standards;
-
Latin America (revenue: €6.4m, down 25.4%): Peru and Chile,
where the public health crisis started later, experienced the
extended effects of the pandemic because its point of comparison
was still strong in H1 2020;
-
Rest of World (revenue: €9.0m, up 23.4%): Solarca (industrial
services) is returning to better business levels, but they still
remain lower than in 2019, due to government restrictions on
international travel which interfere with its ability to quickly
execute projects.
Revenue earned by international subsidiaries accounted for 26.4%
of contributed revenue at June 30, 2021 (versus 25.5% one year
earlier).
Breakdown of revenue by division
At June 30
2020
2021
Gross change
In €m
As a %
In €m
As a %
Hazardous Waste division
195.5
65.3%
228.7
64.5%
+17.0%
o/w scope effect
13.6
-
11.1
-
-
Non-Hazardous Waste division
(excluding IFRIC 12 revenue and TGAP)
104.2
34.7%
126.0
35.5%
+20.6%
o/w scope effect
-
-
-
-
-
Total contributed revenue
299.7
100.0%
354.7
100.0%
+18.4%
Consolidated data at current exchange
rates.
The recovery and treatment sectors contributed significantly to
growth, with the NHW division being particularly buoyed by the
strength of Interwaste's activities, while the Hazardous Waste (HW)
division ‒ excluding scope effects ‒ continued to be weighed down
by the poor performance of activities in Latin America.
The HW division, which accounts for 64.5% of consolidated
contributed revenue (versus 65.3% a year ago), generated revenue of
€228.7m, up 17.0% compared to June 30, 2020. The figures include a
scope effect of €11.1m related to the integration of Spill
Tech.
At constant scope and exchange rates, the division's growth came
to 12.0%, with varying situations across the Group's different
geographical regions:
- In France, the division brought in €165.1m in revenue, up 16.5%
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, posted highly encouraging
growth levels;
- Internationally, the division's revenue totaled €52.5m at June
30, 2021 versus €53.7m one year earlier, showing stability compared
to June 30, 2020 (+0.1% at constant exchange rates). This stability
includes geographical disparities, with Europe and South Africa
returning to pre-crisis activity levels, while Latin America and
Solarca in the Rest of World were still adversely affected to
varying degrees as a result of the health crisis.
NHW, which accounted for 35.5% of contributed revenue (versus
34.7% a year ago), contributed revenue of €125.0m, an impressive
increase of 20.6% compared to last year.
- In France, the division brought in €96.1m in revenue, up 17.7%
compared to last year. The sector confirmed its good trend in
volumes and prices, supported by the implementation of regulations
related to the establishment of a circular economy and the
increasing restrictions on the export of non-hazardous waste;
- Internationally, revenue reached €29.9m, posting a very steep
increase of 32.3% at current exchange rates and of 30.7% at
constant exchange rates, mainly due to the contribution of
Interwaste in South Africa.
Breakdown of revenue by activity
At June 30
2020
2021
Gross change
In €m
As a %
In €m
As a %
Treatment
144.2
48.2%
164.0
46.2%
+13.7%
o/w scope effect
13.4
-
-
-
-
Recovery
44.5
14.8%
51.5
14.5%
+15.7%
o/w scope effect
0.1
-
-
-
-
Services
111.0
37.0%
139.2
39.3%
+25.4%
o/w scope effect
0.1
-
11.1
-
-
Total contributed revenue
299.7
100.0%
354.7
100.0%
+18.4%
Consolidated data at current exchange
rates
All activities contributed in a balanced manner to growth, with
services also benefiting from the contribution of the newly
consolidated Spill Tech.
Waste treatment activities totaled €164.0m at June 30, 2021, up
13,7% at current exchange rates and up 14.1% at constant exchange
rates.
This growth masks a contrasting situation between France and
International, particularly in Latin America:
- In France, treatment activities are growing very significantly:
+16.8% to €137.1m. They benefited from favorable volume and price
effects, as well as the availability of facilities reinforced by
the effects of the industrial efficiency policy;
- Internationally, treatment activities posted slight growth
compared to the same period in 2020 (to €26.9m, or +2.3% at
constant exchange rates): most geographical regions confirmed their
return to normative activity levels, but these activities are still
weighed down by the decreased business levels in Latin America,
where the public health crisis began later (elevated benchmark for
comparison).
Treatment activities accounted for 46.2% of contributed revenue
at June 30, 2021 (versus 48.2%one year earlier).
Recovery activities recorded revenue of €51.5m at June 30, 2021
(versus €44.5m one year earlier), a significant increase of 15.8%
in reported data and of 15.7% at constant exchange rates. This
increase reflects:
- In France (revenue: €41.2m, up 23.6%), the good trend in
material recovery activities ‒ particularly hazardous waste ‒
driven by the implementation of regulations related to the circular
economy, and energy recovery activities supported by customers'
needs for low-carbon energy.
- Internationally (revenue: €10.3m, down 7.7% on reported data
and -7.8% at constant exchange rates), the positive trend in the
activities of all subsidiaries, which was hampered by the negative
trend at Iber Trédi in Spain (-19.5%).
Recovery activities accounted for 14.5% of contributed revenue
at June 30, 2021 (versus 3.1x one year earlier).
Service activities recorded contributed revenue of €139.2m at
June 30, 2021 (versus €111.0m one year earlier, i.e. an increase of
25.4% in reported data). This strong increase includes Spill Tech's
contribution of €11.1m.
At constant scope and exchange rates, Services business rose
considerably: up 15.9%. They benefited from:
- In France (revenue: €82.9m, up 14.0%), the contribution of
"all-inclusive offers" that meet the growing needs of customers in
terms of outsourcing their sustainable development issues, and the
good performance of decontamination activities, strengthened by the
growth momentum of emergency response services;
- Internationally (revenue: €45.2m, up 18,2% at current exchange
rates and up 19.4% at constant exchange rates), strong growth in
Interwaste's services business in South Africa.
Service activities accounted for 39.3% of contributed revenue at
June 30, 2021 (versus 37.0% one year earlier).
EBITDA
At June 30, 2021, Earnings Before Interest, Tax, Depreciation
and Amortization (EBITDA) were 50.7% higher than at June 30, 2020,
at €81.1m, representing 22.9% of contributed revenue.
This increase includes a scope effect linked to the
consolidation of Spill Tech over four months for +€3.4m. It should
be noted that the exchange rate effect is negligible.
At constant scope, the EBITDA margin came to 22.6% of
contributed revenue (versus 18.0% one year earlier).
This significant increase in profitability of the historical
scope mainly reflects:
- Volume effects and positive mix effects for +€28.7m, mainly
benefiting from treatment activities related to commercial momentum
and the effects of the industrial efficiency policy;
- Very positive price effects of +€14.7m, in line with the high
level of saturation of treatment facilities in France;
Partially offset by increases in:
- Variable operating expenses (+€11.7m), in line with the
increase in activity;
- Personnel expenses (+€5.5 million) due in part to the return to
normal operating conditions for staff versus H1 2020 when there
were pandemic constraints, and in part to the resumption of
Interwaste's activities;
- Various charges (including property tax of €0.4m) amounting to
€2.3m.
Breakdown of EBITDA by geographic scope
At June 30
2020
2021
In €m
Consolidated
France
Internnal
Consolidated
France
Internnal
Contributed revenue
299.7
223.4
76.3
354.7
261.2
93.5
EBITDA
53.8
42.7
11.1
81.1
64.5
16.6
% of contributed revenue
18.0%
19.1%
14.5%
22.9%
24.7%
17.8%
Consolidated data at current exchange
rates.
For each geographic scope, the main changes were:
In France, EBITDA totaled €64.5m, or 24.7% of contributed
revenue (versus €42.7m and 19.1% of contributed revenue one year
ago).
This steep increase (up €21.8m) for the period mainly
reflects:
- Favorable commercial effects in terms of volumes, waste mix and
prices, in line with the good market trends in France and the
improvement in the utilization rate of facilities resulting from
the industrial efficiency policy;
- Controlled operating expenses, linked in particular to
optimization of the logistics organization and the cost-cutting
plan;
- The absence of H1 2020 non-recurring items, such as the
industrial incident in Sénerval, which had an impact on EBITDA
worth (€7.6m).
Internationally, EBITDA totaled €16.6m, or 17.8% of contributed
revenue. This includes a scope effect of €3.4m related to the four
months of Spill Tech consolidation. The exchange rate effect is
negligible.
At constant scope, EBITDA reached €13.2m, or 16.0% of
contributed revenue.
This 19.2% increase reflects:
- The improvement of business within this scope, especially in
South Africa,
- Partially offset by the increase in certain operating costs in
Europe and decreased business in Latin America (particularly Peru)
despite measures taken to reduce operating expenses.
Current operating income
At June 30, 2021, Current Operating Income (COI) was €32.9m, or
9.3% of contributed revenue.
It includes a scope effect related to Spill Tech's four months
of consolidation, for €2.9m. Note the negligible exchange rate
effect.
At constant scope, COI rose sharply (+130.8%) and stood at
€30.0m or 8.7% of contributed revenue (versus €13.0m, i.e. 4.4% of
contributed revenue one year ago).
This sharp improvement mainly reflects the increase in EBITDA
(+€23.9m), partially offset by the increase in the amortization of
storage cells and the start-up of installations in the treatment
businesses in France.
Breakdown of current operating income by geographic
scope
At June 30
2020
2021
In €m
Consolidated
France
Internnal
Consolidated
France
Internnal
Contributed revenue
299.7
223.4
76.3
354.7
261.2
93.5
COI
13.0
11.0
2.0
32.8
26.8
6.0
% of contributed revenue
4.3%
4.9%
2.6%
9.3%
10.3%
6.4%
Consolidated data at current exchange
rates.
For each geographic scope, the main changes were:
- In France, current operating income totaled €26.8m, or 10.3% of
contributed revenue (versus €11.0m, or 4.9% of contributed revenue
one year earlier). This good performance reflects the increase in
the contribution of EBITDA (+€21.9m) minus, in particular, the
increase in depreciation charges related to the final waste storage
business lines and the start of new facilities.
- Internationally, COI totaled €6.0m, or 6.4% of revenue. It
includes a scope effect of €2.9m relating to the integration of
Spill Tech as of March 1, 2021. The exchange rate effect is
negligible. At constant scope, COI reached €3.1m or 3.8% of revenue
(versus €2.0m, i.e. 2.7% of contributed revenue a year earlier).
This change mainly reflects the improvement in EBITDA (+€2.0m),
partially offset by the increase in amortization expenses and
provisions (€0.9m).
Operating income
Operating income reached €30.8m, or 8.7% of contributed revenue,
recording a 158.8% increase compared to June 30, 2020. This
positive trend mainly reflects the increase in COI. This balance
also included a goodwill loss of (€0.9m) in Peru, caused by the lag
in recovery from the public health crisis.
Net financial income
At June 30, 2021, financial income was (€9.4m) compared to
(€10.4m) in 2019.
This improvement reflects:
- An increase in the cost of net debt, to (€8.1m) versus (€8.7m)
last year, combined with a fall in the cost of gross debt to 2.78%
(versus 2.91% in H1 2020);
- Favorable changes in the balance of other financial income and
expenses, which were (€1.2m) versus (€1.7m) one year ago, due to
the improvement in foreign exchange income and, above all, the
absence of losses on disposals of financial assets, which had
adversely affected this total for (€1.0m) in H1 2020.
Income tax
At June 30, 2021, the corporate tax expense was (€7.2m) versus
(€2.3m) a year ago. It breaks down to (€5.6m) versus (€0.3m) one
year ago for France and to (€1.6m) versus (€2.0)m one year ago for
the International scope.
The effective tax rate was 34.1% (versus 35.3% at December 31,
2020.
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
(€0.5m) at June 30, 2021 versus (€0.0m) one year earlier.
Consolidated net income
At June 30, 2021, consolidated net income was €13.8m versus
(€0.9m) one year earlier.
After booking the minority interest share in that income,
comprising a loss of (€0.3m) versus (€0.0m) at June 30, 2020,
representing in particular the minority interest shares in Solarca
and Mecomer, net income (Group share) was €13.5m, i.e. 3.8% of
contributed revenue (versus a loss of €0.9m in H1 2020).
Net earnings per share amounted to €1.72 versus (€0.12) as at
June 30, 2020.
Comments on cash flow and the financial situation as at June
30, 2021
Cash flow
Summary of cash flows
In €m at June 30
2020
2021
Cash flow from operating
activities
71.4
76.1
Cash flows from investing
activities
(42.1)
(67.8)
Cash flows from financing
activities
94.1
25.1
Change in cash flow from
continuing operations
123.4
33.4
Change in cash flow from
discontinued operations
-
-
Change in cash flow
123.4
33.4
During the period, the change in cash flow increased from
+€123.4m in H1 2020 to €33.4m in H1 2021.
This variation of (€90.0m) reflects:
- The increase in flows generated by operating activities:
+€4.7m;
- Changes in flows related to investment transactions:
(€25.7m);
- A reduction in flows related to financing transactions:
(€69.0m)
Cash flows relating to operating activities
Over H1 2021, the Group generated €76.1m in cash flows from
operating activities (versus €71.4m one year earlier), i.e. an
increase of +4.7%.
This change reflects the combined effect of:
- The very positive developments in gross cash flow before tax
and financial expenses, at €73.8m (versus €46.0m one year
earlier);
- The change in WCR for +€4.6m, i.e. a reduction of (€26.9m)
compared to the change observed in H1 2020, as no assignments of
receivables were recorded during the period ‒ unlike last
year;
- Net taxes paid in the amount of (€2.4m) versus (€6.3m) at June
30, 2020.
Cash flows relating to investments
In €m at June 30
2020
2021
Industrial investments
26.0
43.7
Financial investments
0.1
0.0
Investments recorded
26.1
43.7
Industrial investments
35.6
39.6
Financial investments
0.0
0.0
Acquisition of subsidiaries - Net cash
flow
6.6
28.4
Investments paid out
42.2
68.0
During H1 2021, recorded industrial investments amounted to
€43.7m, of which €4.9m in IFRIC 12 concession investments (versus
€26.0m, including €0.2m in concession investments one year
earlier).
Excluding investments in concessions, they cover:
- Recurrent investments totaling €21.3m, representing 6.0% of
contributed revenue (versus €17.4m at June 30, 2020, i.e. 5.8% of
contributed revenue).
- Non-recurrent investments totaling €17.5m, or 4.9% of
contributed revenue (versus €8.4m at June 30, 2020, i.e. 2.8% of
contributed revenue). They mainly concern growth investments in
subsidiaries in Italy and South Africa.
Industrial investments can be broken down between facilities as
follows:
- €6.0m in category 2 “public service delegation” expenses
(versus €4.1m in H1 2020);
- €11.0m for energy storage and production facilities (versus
€6.4m in H1 2020);
- €3.2m for thermal treatment systems, platforms and other
treatments (versus €0.7m in H1 2020);
- €0.4m for materials recovery tools (versus €0.7m in H1
2020);
- €3.5m for eco-services tools, including the vehicle fleet
(versus €1.4m in H1 2020);
- €10.1m for holding activities relating to information systems,
regulatory investments and development investments in subsidiaries
(versus €8.0m in H1 2020)
- €4.6m in miscellaneous recurring investments (versus €4.4m in
H1 2020).
Cash flows relating to financing activities
Total net cash relating to financing activities amounted to
+€25.1m in H1 2021, essentially reflecting:
- Flows from new borrowings: +€64.5m versus €122.8m in H1 2020,
the last period recording a drawdown of €100m on the credit
facility line;
- Flows from loan repayments: (€21.9m) versus (€9.6m) in H1 2020,
this period having been subject to a moratorium on bank
maturities.
- Interest expense: (€6.8m) versus (€8.0m) in H1 2020;
- Flows from dividends paid to minority interests: (€0.7m) versus
(€0.5m) in H1 2020;
- Cash flows without gain of control: (€0.2m) versus (€2.9m) in
H1 2020;
- Repayment of lease liabilities (including interest on leases
for €0.9 million): (€10.0m) versus (€7.4m) in H1 2020.
Debt and funding structure
Change in net debt
In €m at June 30
2020
2021
Bank loans
217.4
239.5
Non-bank debt
32.0
28.3
Bonds
254.0
278.9
Lease liabilities
42.5
47.8
Miscellaneous financial debt
3.5
3.3
Short-term bank borrowings
112.2
2.1
Equity investments
-
-
Total financial debt (current and
non-current)
660.6
599.8
Cash balance
(215.1)
(134.3)
Net financial debt (IFRS)
445.5
465.5
of which due in less than one year (1)
(31.7)
(66.7)
o/w due in more than one year
477.2
532.2
Net bank debt (2)
390.1
410.8
(1) The cash balance is
considered over less than one year
(2) Calculated according to the
definition provided in the banking contract
Gross financial debt stood at €599.8m at June 30, 2021, compared
to €660.6m a year earlier. This (€60.8m) contraction mainly
reflects changes in:
- financial leases: +€5.3m;
- various positions: (€110.3m) including current bank loans for
(€110.1m) following the full repayment of the credit facility in H2
2020.
At June 30, 2021, active cash flow stood at €134.3m, down by
(€80.8m) compared to H1 2020, as a drawdown on credit facilities
was booked in the amount of €100m in the same period last year.
Net financial debt (IFRS) is under control at €464.5m
versus €445.5m one year earlier.
These are the changes recorded:
In €m
12/31/20
6/30/21
Net financial debt at
opening
456.2
450.3
Non-cash change in debt
13.4
11.9
Scope effect
-
3.7
Cash flows relating to
operating activities
(121.3)
(76.1)
Net industrial CAPEX paid
64.2
39.6
Net financial CAPEX paid
12.8
28.4
Dividends
8.3
0.7
Net interest payments
15.1
6.8
Changes in loans and financial
receivables
(0.2)
(0.6)
Interest paid on financial
leases
1.9
0.9
Net financial debt at
closing
450.3
465.5
Net financial investments paid include:
- €22.9m: the fair value of the consideration transferred from
Spill Tech Group, as the net acquired debt amounts to a non-cash
change in net debt for €3.7m (excluding lease liabilities);
- €5.5m: payment of the last earnout associated with the
acquisition of Mecomer.
According to the definition provided in the banking agreement,
which specifically excludes some categories of debt (including
non-recourse debt) and the effects of IFRS 16, net debt stood at
€410.8m at June 30, 2021 (€390.1m one year earlier).
On this basis, financial leverage came out at 2.7x EBITDA
(versus 3.3x a year earlier), illustrating significantly improved
financial flexibility.
APPENDIX 1
Consolidated balance sheet
(in thousands of euros)
6/30/2020
6/30/2021
Goodwill
307,115
326,577
Intangible fixed assets under concession
arrangements
43,052
39,101
Other intangible fixed assets
37,876
41,281
Property, plant and equipment
309,408
328,801
Investments in associates
370
-
Non-current financial assets
7,616
6,753
Non-current derivatives - assets
-
-
Non-current operating financial assets
41,096
31,528
Deferred tax assets
24,637
21,881
Non-current assets
771,170
795,922
Inventories
14,276
17,733
Trade and other receivables
155,944
205,044
Current financial assets
4,572
4,682
Current derivatives - assets
-
-
Current operating financial assets
32,457
28,572
Cash and cash equivalents
215,116
134,329
Current assets
422,365
390,360
Assets held for sale
-
-
TOTAL ASSETS
1,193,535
1,186,283
(in thousands of euros)
6/30/2020
6/30/2021
Share capital
1,572
1,572
Additional paid-in capital
74,001
74,061
Reserves
162,105
171,203
Net income
(926)
13,450
Shareholders’ equity (Group
share)
236,812
260,286
Minority interests
5,393
4,212
Total shareholders’
equity
242,205
264,497
Non-current financial debt
477,234
532,255
Non-current derivatives - liabilities
85
0
Employee benefits
15,213
17,200
Non-current provisions
19,374
24,575
Non-current operating financial
liabilities
330
3,366
Deferred tax liabilities
6,252
6,295
Non-current liabilities
518,699
583,690
Current financial debt
183,330
67,589
Current derivatives - liabilities
55
33
Current provisions
2,012
1,076
Tax liabilities
4,568
3,968
Current operating financial
liabilities
242,666
265,429
Current liabilities
412,630
338,096
Liabilities held for sale
-
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY
1,193,535
1,186,283
APPENDIX 2
Consolidated income statement
(In thousands of euros)
6/30/2020
6/30/2021
Revenue
313,246
382,477
Other business income
78
421
Income from ordinary activities
313,326
382,898
Purchases used for operational
purposes
(43,682)
(46,095)
External expenses
(109,071)
(132,251)
Taxes and duties
(23,461)
(32,726)
Employee expenses
(83,266)
(90,682)
EBITDA
53,635
81,144
Expenses for rehabilitation and/or
maintenance of sites under concession arrangements
(7,645)
(5,094)
Depreciation & amortization,
impairment, and provisions
(33,074)
(42,823)
Other operating items
(77)
(379)
Current operating income
13,039
32,848
Other non-current items
(1,151)
(2,063)
Operating income
11,888
30,785
Cost of net financial debt
(8,692)
(8,132)
Other financial income and expenses
(1,721)
(1,232)
Financial income
(10,413)
(9,365)
Income tax
(2,323)
(7,168)
Share of income of associates
(67)
(465)
Net income from continuing
operations
(916)
13,787
Income from discontinued operations
-
-
Net income
(916)
13,787
o/w attributable to minority interests
(10)
(337)
o/w Group share
(926)
13,450
Non-diluted earnings per share
(in euros)
(0.12)
1.72
Diluted earnings per share (in
euros)
(0.12)
1.72
APPENDIX 3
Consolidated statement of cash flows
(in thousands of euros)
6/30/2020
6/30/2021
Net income
(916)
13,787
Share of income of associates
67
465
Dividends from joint ventures and
associates
-
-
Depreciation & amortization,
impairment, and provisions
33,198
43,089
Income from disposals
986
101
Deferred taxes
(891)
1,444
Other income and expenses
1,761
1,246
Cash flows
32,204
60,132
Income tax
3,354
5,724
Cost of gross financial debt before
long-term investments
8,491
7,940
Cash flow before taxes and financial
expenses
46,049
73,795
Change in working capital requirement
31,679
4,753
Tax paid
(6,324)
(2,417)
Net cash flows from operating
activities
71,404
76,131
Investments in property, plant and
equipment and intangible assets
(36,485)
(41,002)
Disposals of property, plant and equipment
and intangible assets
904
1,403
Increase in loans and financial
receivables
(118)
(77)
Decrease in loans and financial
receivables
11
234
Takeover of subsidiaries net of cash and
cash equivalents
(6,482)
(28,380)
Loss of control over subsidiaries net of
cash and cash equivalents
55
(0)
Net cash flows from investing
activities
(42,115)
(67,821)
(in thousands of euros)
6/30/2020
6/30/2021
Dividends paid to equity holders of the
parent
-
-
Dividends paid to holders of minority
interests
(482)
(715)
Capital increase or decrease by
controlling company
-
-
Cash and cash equivalents without
loss/gain of control
(2,919)
(168)
Change in shareholders’ equity
(300)
24
New loans and financial debt
122,779
64,555
Repayment of loans and financial debt
(9,621)
(21,852)
Interest paid
(7,985)
(6,758)
Repayment of lease liabilities and
associated financial expenses
(7,399)
(10,011)
Net cash flows from financing
activities
94,074
25,075
Total cash flow for the period,
continuing operations
123,362
33,385
Net cash flows from discontinued
operations
-
-
TOTAL CASH FLOWS FOR THE
PERIOD
123,362
33,385
Cash and cash equivalents at beginning of
year
80,741
98,184
Cash and cash equivalents at end of
year
202,988
132,251
Effect of changes in foreign exchange
rates
(1,065)
(683)
(1) of which:
Cash and cash
equivalents
215,116
134,329
Short-term bank
borrowings (current financial debt)
(12,216)
(2,078)
APPENDIX 4
DEFINITION OF CONTRIBUTED REVENUE
New presentation of contributed revenue
In €m
2020 presentation
2021 presentation
At June 30
2020
2020
2021
Revenue (reported)
313.2
313.2
382.5
IFRIC 12 revenue
0.2
0.2
4.9
TGAP (tax on polluting
activities)
13.3
13.3
22.9
Contributed revenue
313.0
299.7
354.7
Definitions
IFRIC 12 revenue: investments made for disposed assets, billed
back to the Licenser and booked as revenue in accordance with IFRIC
12
TGAP: General Tax on Polluting Activities paid by the waste
producer and collected by waste management operators on behalf of
the State. This tax is paid to the government with no impact on
operating margins.
It is slated to change between 2021 and 2025, in both very
significant and very differentiated manners depending on the
business lines and type of treatment:
- Non-economic revenue resulting from the significant increase in
the amount of tax collected, particularly within the NHW
division;
- Widely varying changes across operations, not representative of
their economic developments, in particular in the treatment
businesses (incineration and storage of final waste).
1See press release from Monday, March 8, 2021 2Earnings 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) 3Free cash before non-recurring industrial investments,
financial investments, dividends and debt repayments. 4See press
release from January 13, 2021 5See press release from March 24,
2021 6See Investor Day of December 17, 2019 7See press release from
August 2, 2021 8Contributed revenue is reported revenue, less IFRIC
12 revenue (amount of investments in concessions, recognized as
intangible assets, as well as revenue pursuant to the
recommendations of IFRIC 12) and less the impact of the increase in
the General Tax on Polling Activities (TGAP). 9 See press release
from December 17, 2019 10The definition included in the banking
contract excludes certain debts from the calculation of net
financial debt, such as non-recourse debt and lease liabilities.
11See press release from Monday, August 2, 2021 12With a constant
2020 scope, including TGAP (tax on polluting activities) estimated
at around €45m for 2021 13See press release from December 17, 2019
14See press release from Monday, March 8, 2021: "aim for a target
of 21% of contributed revenue" 15See press release from Monday,
March 8, 2021 16See press release from, December 17, 2019
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210913005557/en/
SÉCHÉ ENVIRONNEMENT Analyst and Investor Relations
Manuel Andersen Head of Investor Relations
m.andersen@groupe-seche.com +33 (0)1 53 21 53 60
Press and media Constance Descotes Head of Communications
c.descotes@groupe-seche.com +33 (0)1 53 21 53 53
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