30 July 2020 by Robyn White

Suez reports ‘improving trends’ in half year results  

French-based waste and water group, Suez, has reported “improving trends” and a “solid commercial dynamic” in its 2020 half year results, published yesterday (29 July).

The results showed a decline of -4.5% in earnings compared to last year, however earnings before tax was “above expectations” at €76m (£69m), with a “solid June performance”.

The half year results were published on the 29 July

In its business highlights, Suez included a new 10-year household waste recycling and collection contract rollout in Somerset, which it said accounted for €243m (£219m) of its total revenue (see letsrecycle story).

Suez also reported that the implementation of the company’s ‘Shaping SUEZ 2030’ strategy is “progressing well”, with its performance plan on track to deliver at least 45-50% of the total targeted €1bn annual savings in 2021.

SUEZ CEO, Bertrand Camus, said: “First and foremost, in an unprecedented context SUEZ’s teams have worked throughout H1 to deliver safely our services and products with an unwavering commitment to continuity and quality.

“They can be proud of what they have achieved, making our values – passion for the environment, customer first, respect and team spirit – a reality, and I am particularly grateful for their engagement, which brings resilience and agility to our operations.”

Revenue

Suez said that, “as expected”, revenue was down -€489m (-£442m) compared with the first half of 2019, with an overall figure of €8,167m (£7,375m).

The company added that this was due to organic variation of -4.5% (-£354m), mainly driven by volume declines in the context of Covid-19.

Within the semester, revenue grew +0.5% in Q1 2020 and then decreased by -9.3% in Q2 2020, both in organic terms.

Mr Camus added: “Overall, our performance over the first half 2020 turned out better than expected for both revenue, with 4.5% organic decrease, and profitability.”

Covid-19

Suez said that in the first half of 2020, strict containment measures impacted trade, travel, and consumers’ confidence in multiple parts of the global economy.

The report showed that in most regions in which SUEZ operates, lockdown measures resulted in a decline in waste to be collected and treated, notably from industrial and commercial clients.

Suez said that it has set up the necessary measures to enable all of its teams and subcontractors to work without jeopardizing their safety or their clients’ safety.

Mr Camus added that despite the challenges posed by the pandemic, Suez continued to implement transformations for ‘Shaping Suez 2030.”

Targets

The group said that it predicts revenue to be down organically -4 to -2% versus last year in the second half year results.

The estimated EBIT (earnings before interest and taxes) for the second half of 2020 is to be around €600m (£541m) to €650m (£587m).

‘Essential services’

Mr Camus concluded: “In the midst of the pandemic, our teams smoothly took over the collection and recycling operations in Somerset, UK as part of a 10-year contract.

“Going forward, we cannot ignore the risks that the current context creates: our outlook assumes no return to the region-wide lockdowns we saw in Europe and Asia in H1, even if we expect for example a soft tourist season.

“Nonetheless, and with those caveats, we are able to give visibility to our shareholders on the remainder of the year and express confidence in the scale of the opportunities for SUEZ in the rebound. Our services are essential to protect and restore the environment as well as to enhance economic and social resilience.

“SUEZ’s purpose – to shape a sustainable environment now – responds directly to these challenges. We look forward with a reinforced commitment to deliver our innovative solutions with positive impact on health and quality of life.”

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