Results of SUEZ 2030 strategic plan ahead of the objectives, confirming the Group’s unique value creation potential, to benefit all stakeholders
> Ordinary dividend at €0.65 paid in 2021 and growing to €0.70 in 2022
> Exceptional dividend or share buyback of at least €1bn as soon as possible and by no later than H1 2021
> Enhanced financial flexibility also deployed to boost growth
> A trajectory intended to double shareholder value by 2022
The implementation of Suez’ strategy announced in 2019, is delivering tangible results already this year on several workstreams, allowing the Group to bring the overall timeline forward. Through Suez 2030, the Group can use its agility to capture the multiple growth opportunities in our businesses, in line with its objective to become a leader in environmental services.
TANGIBLE RESULTS ALLOWING TO RAISE THE SUEZ 2030 OBJECTIVES
For each of SUEZ 2030’s value creation levers – selectivity, simplicity and team engagement – the tangible results delivered in less than a year justify an acceleration of the strategic plan:
- The asset rotation program is well advanced, with the first wave completed and the second wave in advanced discussions, and at stronger valuation levels than initially targeted as part of SUEZ 2030 plan.
- The performance program is now aiming for €1.2bn in annual savings by 2023, of which €900m to be achieved by 2022.
- Finally, SUEZ reaffirms its commitment to expanding employee shareholding over the next two years.
GROWTH PERSPECTIVES IN 2021 AND 20221
SUEZ is able to provide visibility on its financial trajectory for 2021 and 2022 as follows:
- Revenues seen above €16bn in 20211 and above €17bn in 20221;
- EBIT targeted between €1.35 and €1.50bn in 2021 and at around €1.7bn in 2022
- Recurring EPS targeted at between €0.75 and €0.80 in 2021 and €0.90 and €1.0 in 2022
The guidance previously communicated by the Group for 20201 is confirmed.
A BALANCED REDEPLOYMENT OF CAPITAL
Based on these tangible results, the Group will redeploy capital to fuel growth while returning cash to its shareholders, in a balanced way.
> Investing for growth for at least €4.5bn from June 2020 to December 2022:
- Strengthening the Group in priority and high-growth businesses (water, plastic recycling and hazardous waste, digital solutions and technologies, and international development) via selected inorganic growth for close to €1.5bn;
- Continued targeted capex to boost organic growth (€3bn);
> Sustained Group’s deleveraging for circa €1bn in order to achieve a leverage below 3x by 2022, while maintaining a Baa1 credit rating
> An acceleration of the return to shareholders that could reach at least €2bn by the end of 2022, of which:
- Ordinary dividends of €0.65 per share payable in 2021 increasing to €0.70 per share in 2022;
- A potential addition of at least €1bn extraordinary distribution in the course of 2021;
> Additionally, €1bn can be used for further investments in organic and inorganic growth, depending on opportunities and according to our strict financial discipline, or be the subject of an additional extraordinary return to shareholders.
A STRENGTHENED GROUP BY 2022, SUPPORTING AN AMBITIOUS VALUE CREATION PLAN FOR ALL ITS SHAREHOLDERS
SUEZ will benefit from a greatly enhanced financial profile by 2022, with:
- Faster organic growth based on selectivity and focus in line with our strategic priorities: organic growth expected to be above 4 - 5% per year from 2022;
- Higher profitability with our EBITDA margins expanding by +100 to 300 basis points benefiting from the performance plan and from a more favorable business mix;
- Substantial improvement in our return on capital employed (ROCE): increasing to 6.5% - 7% in 2022 from 4.9% in 2019 a year ahead of schedule
- Recurring Free Cash Flow generation greater than €500m per year
Philippe Varin, President of the Board of Directors of SUEZ Group, commented: “The Board of Directors welcomes the tangible results from the implementation of the SUEZ 2030 transformation plan. The Board supports the management in the reinforcement of the plan, which will significantly increase the value creation potential of an independent Suez group, for the benefit of all stakeholders.”
Bertrand Camus, CEO of SUEZ Group, added: “Less than a year after the presentation of our SUEZ 2030 plan, its results exceed our objectives thanks to the continuous commitment of our teams. Driven by the major issues arising from the climate emergency, our priorities are to invest in value-added services to fuel the Group’s ability to support our clients and therefore our growth, as the Ieader in environmental services. The steps announced today to reinforce our strategic plan offer a significant increase in value already in 2022 for all Suez’ shareholders.”
---------------1 Assuming pro forma all disposals impacts as of January 1st, 2021, assuming no return to a generalized, region-wide confinement situation, and constant FX and commodity prices