Revenues: EUR 10.3 billion
Organic growth: + 6.1%
Total growth: + 7%
At March 31, 2005, SUEZ revenues, prepared according to IFRS standards,
recorded organic growth rate of +6.1%,[1]. This confirms the Group's growth
dynamics, at the high end of the objectives set (average organic growth rate
for 2004-2006 between 4% and 7%). First-quarter revenues were EUR 10.3
billion (versus EUR 9.6 billion at March 31, 2004).[2]
Organic revenue growth was generated mainly by:
- SUEZ Energy International with EUR 227 million, benefiting from
continued electricity market deregulation in Brazil (Tractebel Energia) and
the United States (SERNA[3]) and from growth in US LNG business;
- growth at SUEZ Energy Services business resulting from improved sales
at Fabricom (+EUR 121 million) and Elyo/Axima Services (+EUR 96 million);
- increased wholesale electricity and natural gas sales in Europe (+EUR
105 million) achieved within the framework of the optimization of the
contract portfolio and production facilities, in addition to higher
electricity rates;
- the environment activities, particularly water in France (+EUR 14
million, or +3.8%).
Total revenues grew by 7%. The Group generates 89% of its revenues in
Europe and North America, with 80% from the European continent alone.
The growth in total revenues (+EUR 672 million) breaks down as follows:
- organic growth (+EUR 584 million),
- changes in Group structure (-EUR 51 million) which include Aguas
Andinas (-EUR 29 million) and changes within Fabricom (-EUR 27 million),
- moderate exchange rate fluctuations (-EUR 24 million), primarily due to
the US dollar (-EUR 45 million), and
- the impact of natural gas price increases (+EUR 163 million).
REVENUE CONTRIBUTION BY BUSINESS ACTIVITY
March 31, March 31, Gross change Organic
(in EUR millions) 2005 2004 growth
(2)
reported IFRS(1)
-IFRS
Suez Energy 3,736.6 3,489.1 7.1% 2.8%
Europe
Suez Energy 1,440.6 1,230.1 17.1% 18.7%
International
Suez Energy 2,613.6 2,413.9 8.3% 9.4%
Services
Suez Environment 2,509.2 2,494.7 0.6% 1.4%
TOTAL GROUP 10,300.1 9,627.8 7.0% 6.1%
(1) See page 6 for the 2004 reported revenues reconciliation to revenues
in the IFRS format. As a reminder, companies from the communications sector
sold in 2004 are recorded discontinued activities on an IFRS basis and
therefore no longer contribute to revenues.
(2) See page 5 for a breakdown of growth on a comparable basis.
- SUEZ ENERGY EUROPE
March 31, March 31, Gross change Organic
(in EUR millions) 2005 2004 growth
reported IFRS
Suez Energy 3,736.6 3,489.1 7.1% 2.8%
Europe
SUEZ Energy Europe business activities grew by +7.1% at the end of March
2005. On a comparable basis, and particularly excluding the gas price effect
(+EUR 124 million), revenues progressed by +EUR 101 million ie an organic
growth of +2.8%, impacted especially in terms of electricity, which benefited
from higher prices due to increased fuel prices.
- Electricity
Electricity sales increased by +EUR 192 million, or +9.9%, in terms of
organic growth. By the end of 1st-quarter 2005, electricity sales reached
36.4 TWh including 17.3 TWh in Belgium (down by 0.9 TWh),[4] 11 TWh outside
Belgium (up by 0.3 TWh) and 8.1 TWh from the European wholesale market (an
increase of 2.6 TWh).4
- In Belgium, total revenues decreased slightly (-1.4%). The impact of
the deregulated Flanders electricity market (and, to a lesser extent, the
impact of partial deregulation in Brussels and Wallonia since July 1, 2004)
was almost entirely offset by price increases.
- In the Netherlands, electricity sales in volume terms increased by
+9.1% in an environment of generalized price increases.
- In the rest of Europe, under the combined impact of newly signed
industrial contracts (Berlin, Ford, etc.) and of higher prices, sales in
Germany, France and Italy recorded organic increases of +27%, +16% and +22%
respectively. Sales by CNR are not included as this company is accounted for
under the equity method in SUEZ's financial statements.
- Wholesale sales, achieved thanks to optimization at the European level
of Electrabel production facilities and fuel contract portfolio, amounted to
EUR 336.9 million at March 31, 2005, as compared with EUR 213.5 million[5] at
March 31, 2004 (8,138 GWh at March 31, 2005 compared to 5,517 GWh for March
31, 2004).
- Natural gas
- Organic growth in non-Group sales by Distrigas increased +10.7% (+EUR
43 million) thanks to a dynamic commercial activity in France. Non-Group
sales of natural gas in Belgium and in Luxemburg were stable (+0.5 TWh).
- Electrabel natural gas sales declined (-9.8%, or -EUR 75 million), due
to the effects of deregulation in Flanders (effective in 2003) and partial
deregulation in Wallonia (from July 1, 2004), and to reduced wholesale sales,
-EUR 18 million.
- Other activities
Following electricity market deregulation in Belgium, the invoicing of
services to inter-municipal companies was down (-EUR 39.5 million).
- SUEZ ENERGY INTERNATIONAL
March 31, March 31, Gross change Organic
(in EUR millions) 2005 2004 growth
reported IFRS
Suez Energy 1,440.6 1,230.1 17.1% 18.7%
International
Revenues at SUEZ Energy International grew by +18.7% (or +EUR 227
million) on a comparable structural, exchange rate and natural gas price
basis.
This organic growth was particularly noticeable in Brazil and the United
States (increase in sales to unregulated customers and to LNG activity).
More specifically, this increase was due to:
- North America (+EUR 140 million) with:
- the growth in sales of SUEZ LNG North America (+EUR 43 million), i.e.
+14% in volume terms thanks in particular to sales at the Cove Point terminal
and to one-off, opportunistic sales to Spain;
- the commercial success of SERNA (SUEZ Energy Resources North
America[6]), via direct energy sales to industrial and commercial customers
(+ EUR 77 million).
- Asia (+EUR 50 million) with the February 2004 startup of the Baymina
power station (770 MW) in Turkey (+EUR 30 million), the increase in sales of
natural gas to South Korea (+EUR 13 million), and the fine operating
performance of Glow (Thailand). Glow's IPO (launched in April 2005) will have
no impact on the Group's revenues in 2005.
- Latin America (+EUR 47 million), particularly in Brazil where the
progressive replacement of initial contracts volumes by new bi-lateral
contracts with distributors and industrial customers contributed +EUR 30
million to organic growth. Chile, Peru, and Argentina continue to enjoy a
favorable environment, both in terms of volumes and prices.
- SUEZ ENERGY SERVICES
March 31, March 31, Gross change Organic
(in EUR millions) 2005 2004 growth
reported IFRS
Suez Energy 2,613.6 2,413.9 8.3% 9.4%
Services
Organic growth of SUEZ Energy Services was +EUR 222 million (+9.4%):
- Fabricom (+EUR 121 million) benefited from its commercial successes,
particularly at Ineo (+13.1%) through the ORRMA contract with the French
Defense Ministry, and through HVAC (+11.4%), as well as at GTI where activity
had been relatively weak in Q1 2004.
- Elyo/Axima Services businesses grew by 9.7% (+EUR 96 million), mainly
as a result of business development in Benelux (+EUR 10 million), France
(+EUR 23 million), and Italy (+EUR 11 million), where contracts were signed
with the hospitals of Rome, Verona and Palermo. France also benefited from
EUR 20 million in non-recurring revenues, due in particular to favorable
rigorous climatic conditions and to high fuel prices. During the first
quarter of 2005, the Group signed a contract to extend Barcelona's heating
and cooling network for total revenues of EUR 216 million over a 27-year
period.
- Project engineering expanded slightly (+3.5%).
- SUEZ ENVIRONMENT
March 31, March 31, Gross change Organic
(in EUR millions) 2005 2004 growth
reported IFRS
SUEZ ENVIRONMENT 2,509.2 2,494.7 0.6% 1.4%
Water Europe 783.9 730.0 7.4% 2.5%
Waste Services 1,081.6 1,110.2 -2.6% -1.9%
Europe
Degremont 178.5 181.4 -1.6% -3.9%
International 465.3 473.1 -1.6% 10.3%
SUEZ Environment generated EUR 2.5 billion in revenues during the first
quarter, similar to the figure for the same period in 2004 on a comparable
exchange rate and structural basis.
Organic growth came to +1.4%, or +EUR 34 million.
- Water Europe activities recorded a rise of +2.5% (+EUR 18 million),
mainly due to a strong increase in "sanitation and services" contracts in
France (+EUR 14 million, or +3.8%) with new signings at Valenton, Colombes,
and Saint Gaudens, for example, and renewed service contracts at Dole,
Savigny sur Orge and Tarbes.
- Waste Services are progressing in the United Kingdom and France (+EUR 6
million, i.e. +1.2%) thanks in particular to the 2004 startup of two new
incinerators. There was a decline in Germany (-EUR 17 million) which felt the
full effect of the renegotiation of waste collection and selective sorting
contract during the past 18 months.
- Degremont experienced mixed results, with an overall decline in organic
terms of -EUR 7 million, or -3.9%. Growth was generated in Latin America (San
Luis Potosi in Mexico, Minera la Escondida in Chile), and at I.D.I.[7] (USA),
which was offset, however, by a lower level of commercial activity in the
United Kingdom and the disposal of the Bogota B.O.T. (EUR 2.6 million in
revenues at March 31, 2004). During first quarter 2005, the Group signed a
EUR 380 million contract to design, build and operate a water desalination
plant in Perth (Australia).
- International activities recorded positive organic growth (+EUR 43
million, or +10.3%), resulting mainly from rate increases obtained after the
startup of the Farfana plant in Chile,[8] and continued expansion in Brazil,
Australia and China.
REVENUE BREAKDOWN BY GEOGRAPHIC ZONE
The majority of Group revenues (89%) were generated in Europe and North
America, with 80% from the European continent alone.
The revenue breakdown by geographic zone is as follows:
(in EUR millions) March % March % Change
31, 2005 contribution 31, 2004 contribution
2005/2004
France 2,422.8 23.5% 2,139.1 22.2% 13.3%
Belgium 2,981.3 28.9% 3,223.2 33.5% -7.5%
Subtotal, 5,404.1 52.5% 5,362.3 55.7% 0.8%
France-Belgium
Other European 2,571.3 25% 2,184.4 22.7% 17.7%
Union
Other European 208.6 2.0% 151.1 1.6% 38.0%
countries
Subtotal Europe 8,184.0 79.5% 7,697.7 80.0% 6.3%
North America 953.0 9.3% 857.7 8.9% 11.1%
Subtotal Europe and 9,137.0 88.7% 8,555.4 88.9% 6.8%
North America
South America 481.7 4.7% 428.7 4.5% 12.4%
Asia, Middle East 541.1 5.3% 503.7 5.2% 7.4%
and Oceania
Africa 140.3 1.4% 140.1 1.5% 0.1%
TOTAL 10,300.1 100.0% 9,627.8 100.0% 7.0%
Activity was stable in the France-Belgium region. It is worth noting that
in 2004, wholesale sales were exclusively recorded under the Belgium area and
totalled EUR 276 million. In 2005, this activity amounted to EUR 388 million
and was split between France (EUR 80 million), Belgium (EUR 113 million) and
other European countries (EUR 195 million). Excluding wholesale sales, growth
was respectively +9.5%, -2.7% and +8.8% for those countries.
BREAKDOWN 0F ORGANIC GROWTH ON A COMPARABLE BASIS Organic growth in
revenues on a comparable basis was as follows.
(in EUR millions) March 31, March 31, Organic
2005 2004 growth
Revenues 10,300.1 9,627.8
Changes in Group structure(1) (80.8) (131.6)
Exchange rate fluctuations (24.5)
Natural gas price variations 163.4
Comparable 10,219.3 9,635.2 6.1%
(1) Respectively, 2005 revenues from companies consolidated for the first
time, and 2004 revenues from deconsolidated companies.
MARCH 2004 REPORTED REVENUES restated under IFRS FORMAT
March 31, Netting Collections Other March
(in EUR millions) 2004 of for 3rd adjustments 31, 2004
trading parties(b)
reported sales(a) IFRS
Suez Energy 3,778.0 (280.1) (8.8) 3,489.1
Europe
Suez Energy 1,352.2 (70.5) (24.6) 1,230.1
International
Suez Energy 2,414.9 (1) 2,413.9
Services
Suez Environment 2,738.9 (3.0) (238.5) (2.7) 2,494.7
Others(c) 55.2 (55.2) 0.0
TOTAL GROUP 10,312.2 (353.6) (238.5) (92.3) 9,627.8
(a) In financial statements prepared under French accounting standards,
the contribution of activities of an operational nature tied to assets and to
optimizing the production base, the fuel contract portfolio or energy sales
is presented as a total amount in the Revenues and the Purchases and changes
in inventory entries. Pursuant to IAS 18, Income from ordinary activities,
the results produced in connection with certain of these operations are
reported as net amounts under Revenues when the sales contracts in question
can be settled through offsetting purchases or when the sales contracts are
part of swap strategies.
(b) Proceeds received on behalf of third-parties in the Environment
sector, presented under revenues and under a separate entry for operating
expenses are, according to the same principle, now presented as a net amount.
(c) Results from activities ceased in 2004 are reported as net amounts
under the income statement entry "Results from discontinued activities"; they
no longer have an impact on revenues.
These adjustments have no impact on Group margins.
SUEZ (http://www.suez.com) is a worldwide industrial and services Group, active
in sustainable development, providing companies, municipalities, and
individuals innovative solutions in Energy and the Environment. SUEZ is
listed on the Euronext Paris, Euronext Brussels, Luxembourg, Zurich and New
York Stock Exchanges and is an official sponsor of Paris 2012.
Disclaimer
This press release contains certain forward-looking statements,
particularly with respect to future events, trends, plans or objectives.
These statements are based on management's current views and assumptions and
involve a number of risks and uncertainties which may lead to a significant
difference between actual results and those suggested either explicitly or
implicitly in these statements (or suggested by past results). Additional
information about these risks and uncertainties appears in documents filed by
SUEZ with the U.S. Securities and Exchange Commission and the Autorite des
Marches Financiers (French securities regulator). The present forward-looking
statements are made as of the date of the present release, with no
undertaking by SUEZ to update or revise them, whether in connection with new
information, future events, or any other factor.
This release is also available on the Internet: http://www.suez.com
[1].See page 5 for a breakdown of organic revenue growth on a comparable
basis.
[2].Revenue trend comparison based on proforma IFRS revenue figures for
2004 proforma IFRS. The reconcilation to reported revenue figures at March
31, 2004 is shown on page 6.
[3] Suez Energy Resources North America (ex T.E.S.I.)
[4] after offsetting volume transfers between Belgian segments and
wholesale sales.
[5] Calculated according to IFRS.
[6] Ex T.E.S.I.
[7] Infilco DegrC)mont Inc.
[8] Since October 1, 2004, Aguas Andinas is consolidated at 60% by the
proportional method.
SOURCE Suez
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CONTACT:
Press contacts: Catherine Guillon:
+331-4006-6715 Antoine Lenoir: +331-4006-6650 Financial analysts'
contacts: Arnaud Erbin: +331-4006-6489 Bertrand Haas:
+331-4006-6609 Eleonore de Larboust: +331-4006-1753 Belgium, Guy
Dellicour: +322-370-34-05
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