Veolia yesterday (25 February) published its results for 2020, which chairman and CEO Antoine Frerot hailed as “very strong”, as well as proving Veolia’s “resilience” and “exceptional rebound” in confronting the Covid-19 pandemic.
He said that the company had “wiped out” the consequences of the pandemic in less than nine months with activity now higher than in 2019. Waste volumes had stabilised at around 95% although they had taken a knock in the UK from the November lockdown.
Veolia chairman and CEO, Antoine Frerot pointed to Veolia’s rebounding from the impacts of the pandemic
And, Mr Frerot gave an update for Veolia’s proposed acquisition of Suez (see below) which he claimed could be approved by European authorities within seven to 13 months.
PFI
A look at the UK in more details came from Claude Laruelle, chief financial officer, who was upbeat about UK performance, especially from PFI’s run for local authorities. He said: “Even though revenue was impacted by the November lockdown, UK delivered a strong EBITDA growth in Q4 plus 13.7% at constant forex, thanks to the great performance of our PFI and efficiency measures.”
It is thought likely that increased volumes of waste and recycling from the domestic waste stream during the pandemic will have contributed to the strength of Veolia’s PFI performance.
Looking at waste volumes more generally, Mr Laruelle spoke of price increases which the company had introduced and prices were also referenced by chairman Antoine Frerot, who said Veolia had been able to “keep up our prices”.
Landfill
Numbers for the UK in 2020 showed Veolia’s UK waste revenues in 2020 were 434 million Euros but down 4.7% in Q4; commercial volumes were back to around 90% of 2019 levels until the new lockdown of November, which led to a volume decline. Landfill volumes were up 17% in quarter one, due to the imposition of the import tax in the Netherlands for RDF; down 31% in Q2 because of Covid: up 8% in Q3 and down again in Q4 “due to higher gate fees and new lockdown measures”.
Veolia’s UK energy from waste plants performed ‘strongly’ in 2020
No detail is given in the results about the reasons for higher gate fees but this is thought to relate to pressure on the availability of cells at Veolia’s landfills when there was extra demand for landfilling from the energy from waste sector.
Energy from Waste in the UK “continued very strongly”, said Mr Laruelle, with 94.1% availability, YTD, yielding strong electricity revenues.
Waste prices
Looking at all Veolia’s activities – the company is strong in Europe but also operates globally – Mr Laruelle said: “Waste revenue is back to growth in Q4, driven by waste prices. You can see the yearly revenue sequence with a sharp drop in Q2, the rebound in Q3, but not yet at 100% and a very good Q4 performance, plus 1.6% at constant scope and forex… Q4 revenue growth is as you can see, strongly driven by price increases, plus 2.3%, more than compensating for the negative volume effects of minus 1.8% linked to commercial and industrial waste in the few geographies.
“PFI that have continued to run at full capacity, producing the last portion of the revenue”
“France did very well in Q4, plus 2.5% revenue growth with plus 3% price increase. We went by our strategies and higher recycled material prices. In the UK, you are not familiar with the situation of PFI that have continued to run at full capacity, producing the last portion of the revenue and reserves of the country.”
However, he said that a decline in C&I collection volumes because of the November lockdown had impacted the landfill volumes with lower margins. But, overall he said this is a resilient business model for the UK.
Digital
Estelle Brachlianoff, chief operating officer and who spent several years in charge of the UK business, praised the Veolia “team” during the pandemic, saying “their engagement and professionalism during the crisis has been exceptional.
“Veolia team: Their engagement and professionalism during the crisis has been exceptional”
Estelle Brachlianoff,
chief operating officer, Veolia
“At a time of borders reappearing pretty much everywhere, our decentralised organisation at country level for daily operation together with local partnerships around infrastructures has been key to our resilience and responsiveness.”
Mrs Brachlianoff referenced Veolia’s “digital transformation” and said this “has certainly been accelerated as well from its strong foundations. Continuing with our business model, it has proven very resilient, thanks to balanced portfolio in various geographies, as well as between municipal and industrial customers.”
And she described as a “smart move” the company’s decision to specialise in what types of industrial customers the company dealt with. “When it comes to industrial customers, we’re very pleased we’ve decided a few years ago to ensure willingness to expose just specific sectors such as oil and gas or automotive, for instance. This was certainly a smart move. 2020 performance of our hazardous waste activities, though serving exclusively industrial customers, is a testimony to our excellence and differentiation in this space.”
Suez
On Veolia’s desire to acquire France’s other large waste management company, Suez, Mr Frerot said: “As I have already had the opportunity to tell you, the very strong complementarity between Suez and Veolia… is obvious and guarantees successful integration of the two groups.”
He said the acquisition is progressing in line with Veolia’s plan and that on 8 February it had filed a tender offer for the remaining 70% of Suez shares at 18 Euros per share.
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Source: letsrecycle.com Waste Managment
