Strong growth confirmed in France
Recovery contrasted internationally
Contributed revenue1 at €170m up
+3.6%
Regulatory News:
Séché Environnement (Paris:SCHP):
In Q1 2021, the Group confirmed its return to a good level of
activity in its main regions, with a solid increase in revenues at
constant scope and exchange rates compared to the same period in
2020 that preceded the health crisis.
In particular, France posted strong growth (+8%), while
International, except Latin America, confirmed its activities were
returning to levels close to pre-crisis levels in most geographical
regions.
This good start to the year confirms the Group's expectations
for 2021.
With contributed revenue1 at constant scope of €170.0m, with an
increase of +2.6% (gross data) and +3.6% at constant exchange
rates, Séché Environnement confirmed in Q1 2021 the acceleration of
its organic growth since mid-2020.
This good performance does not include the contribution of Spill
Tech, a South African company that is being acquired2.
Q1 growth was driven by France, which benefited from strong
market trends with industrial companies and the high level of
industrial production as well as positive effects from the
implementation of the circular economy. International markets
posted still contrasted performances, with the return of activities
to normative levels in Europe and South Africa and still
significantly lower in Latin America, while Solarca showed a strong
rebound in its operations (Industrial Services) in the Rest of the
World.
The Group thus demonstrates its ability to fully benefit from
the economic recovery and the recovery of industrial markets in
France and around the world.
Séché Environnement is confident that growth will continue to
accelerate throughout the year and confirms its targets for
2021.
Commentary on business in the first quarter of 2021
As of March 31, 2021, Séché Environnement reports consolidated
revenue of €180.8m, compared to €172.9m one year earlier, before
consolidation of Spill Tech3.
Contributed revenue stood at €170.0m, compared to €165.7m
as of March 31, 2020, an increase of +2.6% for the period. At
constant exchange rates, growth reached +3.6%.
The contributed revenue4 restates, within reported revenue,
concession-related investments (“IFRIC 12 revenue”) and now, the
GTPA (General Tax on Pollutant Activities), whose expected growth
over the 2021-2025 period, which is both very significant and
highly differentiated according to the divisions and business
lines, has led to the creation of revenue that is not
representative of the economic performance of the activities to
which they apply, particularly within the NHW division in
France.
Growth over the period was driven by France, which posted a high
level of activity across all of its markets, while the
International sector continued to be mixed: however, this scope
confirms the recovery that began in H2 2020, particularly in Europe
and South Africa, while Solarca (Rest of the World) returned to
activity levels close to pre-crisis levels.
The contribution of business lines to the growth of the various
scopes remains uneven: the Non-Hazardous Waste (NHW) division
confirmed its dynamics across all regions, while the hazardous
waste (HW) division continued to suffer from the lower performance
of Latin America, which is still suffering the effects of the
health crisis.
Breakdown by geographic
scope
Consolidated data in €m
At March 31
2020 reported data
2020 restated
2021
Gross change
Organic change
France subsidiaries
127.1
120.0
129.9
+8.2%
+8.2%
International subsidiaries
45.7
45.7
40.1
-12.3%
-9.0%
Contributed revenue
172.8
165.7
170.0
+2.6%
+3.6%
Non-contributed revenue
0.1
7.2
10.8
-
-
Reported revenue
172.9
172.9
180.8
+4.5%
+5.5%
As of March 31, 2020, reported revenue at constant exchange
rates would have been €171.3m, reflecting a negative foreign
exchange effect of (€1.6m).
France confirmed the acceleration of its activity observed since
mid-2020, while International, excluding foreign exchange effects,
posted a better orientation of its activities in most geographical
regions:
- In France, contributed revenue reached €129.9m,
recording a sharp increase of +8.2% compared to March 31, 2020.
This performance reflects the strength of industrial markets
supported by the high level of industrial production. It also
posted favorable market trends with Local authorities, which are
benefiting from the positive effects of the implementation of
regulations related to the circular economy. Most activities
contributed to this strong growth, in particular treatment
activities and energy recovery activities.
- International posted revenue of €40.1m, down -12.3%
(reported data) and down -9.0% (at constant exchange rates) from
the first quarter of 2020. While the Q1 2020 base proved to be high
for this scope, which entered the health crisis later,
international activities continued to fall significantly in Latin
America (-47.1% at constant exchange rates), while other regions
confirmed the positive trends seen in mid-2020 and returned to
normative activity levels. Note the sharp rebound in Solarca's
activity (industrial maintenance in the Rest of the World), whose
revenue increased by +43.1% compared to Q1 2020 and which returned
to activity levels close to pre-crisis levels.
Analysis by division
Consolidated data in €m
At March 31
2020 reported data
2020 restated
2021
Gross change
Organic change
Haz. Waste
113.5
111.9
108.1
-3.5%
-2.5%
Non Haz. Waste
59.3
53.8
61.9
+15.1%
+16.4%
Contributed revenue
172.8
165.7
170.0
+2.6%
+3.6%
Non-contributed revenue
0.1
7.2
10.8
-
-
Reported revenue
172.9
172.9
180.8
+4.5%
+5.5%
Q1 2021 activity was supported by the NHW division, which
benefited from a favorable environment in France and around the
world, while the good performance of the HW division was hampered
by the more limited contribution from activities in Latin
America:
- The HW division posted revenues of €108.1m, marking a
decrease of -2.5% at constant exchange rates compared to March 31,
2020. Over the period, the division's trends tracked:
- In France (+6.4% at €81.8m), the dynamics of the industrial
markets in line with the Group's major customers, which are well
exposed to the economic recovery in France and around the
world;
- Internationally (-22.8% at constant exchange rates, at €26.3m),
the significant withdrawal of activities in Latin America in view
of a strong Q1 2020 that had not been affected by the health
crisis, while Solarca's activities around the world saw a strong
rebound with the rapid recovery of its projects, whose execution
had been suspended by the health crisis.
- The NHW division generated revenue of €61.9m, up sharply
both in France and Internationally:
- In France, with contributed revenue of €48.0m, an increase of
+11.4% compared to March 31, 2020, the sector benefited fully from
the positive effects of the implementation of the circular economy
and the rebound in industrial markets. It also recorded the
contribution of energy recovery over the period;
- Internationally, the growth of the division (€13.9m, up +37.7%
at constant exchange rates) mainly reflects Interwaste's sales
trends.
Analysis by
activity
Consolidated data in €m
At March 31
2020 reported data
2020 restated
2021
Gross change
Organic change
Treatment
87.3
80.4
79.8
-0.8%
-0.2%
Recovery
24.2
24.2
26.2
+8.1%
+6.3%
Services
61.3
61.1
64.0
+4.9%
+6.8%
Contributed revenue
172.8
165.7
170.0
+2.6%
+3.6%
Non-contributed revenue
0.1
7.2
10.8
-
-
Reported revenue
172.9
172.9
180.8
+4.5%
+5.5%
Most activities - excluding Latin America - contributed to the
good performance of Q1 2021:
- Treatment activities were driven by positive trends in
industrial markets, particularly in France (+10.4% to €67.2m),
where the Group benefits from a customer base of large companies
that are sensitive to the international economic recovery. The
virtually stable revenue from Treatments is mainly attributable to
Latin America, whose economies continue to suffer from the
pandemic;
- Recovery activities benefited from the strength of
activities in France (+14.0% to €20.8m), particularly from energy
recovery, in line with the return to normal operations of the
Strasbourg-Sénerval energy recovery plant, and from material
recovery with the good performance of Speichim's chemical
purification activities. International activity posted good
performance in the purification activities of Valls Quimica in
Spain but still posted a decline in PCB activities in Latin America
with respect to Q1 2020 (spot markets);
- Service activities were sustained in France (+2.4% to
€41.8m) by the Decontamination and Environmental Emergencies
business lines and internationally (+16.2% at constant exchange
rates, at €22.2m) thanks to the sharp rebound in Solarca's
industrial maintenance activities around the world and the good
level of activity of Interwaste in South Africa.
Positive outlook confirmed
This good start to the year confirms Séché Environnement's
growth prospects for the current year.
The Group plans to accelerate its organic growth rate throughout
the year, with a favorable base starting in Q2 2020.
On an actual basis, 2021 will also record the contribution of
Spill Tech, which is currently being acquired with expected revenue
of around €30m for its fiscal year ending February 28, 2022.
Séché Environnement also confirms its target EBITDA margin for
2021 of around 21% of revenue.
Conference call
A conference call to describe the business activity for the
first quarter of 2021 will be held (in French only) on April 27,
2021 at 6:00 p.m. Paris time.
To participate in the conference, dial +33 (0)1 70 71
01 59 – Code: 71 98 28 49 #
Material to accompany the presentation will be available from
5:45 p.m. on Séché Environnement's website:
https://www.groupe-seche.com/en/investors/home
The conference recording will be available at +33 (0)1 72 72
74 02 – Code: 42 50 05 325#
Upcoming events
Closed-door Combined General Meeting: April 30, 2021
Consolidated results as of June 30, 2021: September 13, 2021
after market
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, of which 2,000 in
France, Séché Environnement has revenue of about €700 million, of
which 25% is earned internationally, driven by internal and
external growth momentum via its many 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
Appendix 1
Definition of contributed revenue
New presentation of revenue as of March 31, 2021
In €m
2020 presentation
2021 presentation
At March 31
2020
2020
2021
Revenue (reported)
172.9
172.9
180.8
IFRIC 12 revenue
0.1
0.1
0.0
GTPA
7.1
7.1
10.8
Contributed revenue
172.8
165.7
170.0
Definitions
IFRIC 12 revenue: investments made for assets under
concession arrangements, rebilled to the Grantor and booked as
revenue in accordance with the IFRIC 12 interpretation.
GTPA: General Tax on Polluting Activities paid by the
waste producer and collected on behalf of the State by the
treatment operators. This tax is paid to the State with no impact
on operating margins.
Its projected change between 2021 and 2025, which is both very
significant and very differentiated depending on the business lines
and types of processing, will lead to the recognition, in reported
revenue, of:
- Non-economic revenue resulting from a significant increase in
the amount of tax collected, particularly within the NHW
division;
- Different changes between activities, which are not
representative of their economic changes, particularly in the
treatment business lines (incineration and storage of final waste
(see Appendix 2).
This change has no impact on operating margins, particularly
EBITDA.
Its restatement in contributed revenue is also neutral in terms
of operating margins.
Appendix 2
Change in GTPA
Enacted as part of the Circular Economy Roadmap in April 2018,
the reform of the General Tax on Pollutant Activities (GTPA) was
adopted by the legislator in the Finance Act for 2019 (Law
2018-1317 of December 29, 2019).
This reform mainly applies to non-hazardous waste and must lead
producers of “polluting” activities to reduce their environmental
footprint. In particular, the change in applicable rates aims to
reduce the economic balance in favor of prevention and sorting by
increasing the cost of incineration and storage.
Change in GTPA rates
In €/ton
2019
2020
2021
2022
2023
2024
From 2025
Incineration (1)
3
3
8
11
12
14
15
Storage (2)
17
18
30
40
51
58
65
(1) Licensed facilities meeting the following
criteria:
- ISO 50001 certified
- Whose NOx emission values are less than 80 mg/Nm3
- Achieving energy recovery with a return of 0.65 or more
These rates are likely to be reduced by half in the case of
facilities with an energy efficiency of greater than or equal to
70% and that are recovering high-calorific-value refuse from
efficient sorting operations.
(2) Licensed facilities meeting the following
criteria:
- ISO 14001 certified
- Generating energy recovery of more than 75% of biogas
captured
- Exploited using the bioreactor method
1 See Appendix 1: “Definition of contributed revenue” 2 See the
press release of January 18, 2021 3 Acquisition in the process of
being finalized 4 Appendix 1: Definition of contributed revenue
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210427005794/en/
SÉCHÉ ENVIRONNEMENT
Manuel ANDERSEN Head of Investor Relations
m.andersen@groupe-seche.com +33 (0)1 53 21 53 60
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