SUEZ ENVIRONNEMENT - 2012 Annual Results

                   SUEZ ENVIRONNEMENT - 2012 Annual Results

PR Newswire

PARIS, February 14, 2013

PARIS, February 14, 2013 /PRNewswire/ --

- A solid performance in a challenging context in europe

- Dividend^[^1]of €0.65 per share for the 2012results

2012 results in line with objectives

  +Revenues: €15,102m, + 1.8% gross, growing in all divisions
  +EBITDA: €2,450m, -2.5% gross, stable at constant scope
  +EBIT: €1,146m, + 10.3% gross
  +Net Income Group share: €251m, affected by non-recurring charges during
    the first half of the year, the second semester's Net Income is €211m
  +Net financial debt (NFD): down to €7,436m, with a stable Net Debt to
    EBITDA ratio of 3.0x
  +Free Cash Flow: up +58% to €1,358m
  +Final take-over of the Melbourne desalination plant on December 17th, 2012

Positive outlook for 2013^[^2]

  +2013 EBITDA of ≥ €2,550m
  +Stable NFD/EBITDA ratio of around 3x
  +Dividend ≥ €0.65 per share for 2013^[^1^]

The Board of Directors, which met on February 13^th, 2013, approved the 2012
financial statements of SUEZ ENVIRONNEMENT which will be submitted for the
approval of the Shareholders General Meeting on May 23^rd, 2013. The
consolidated financial statements have been audited and certified by the
auditors.

Commenting on these results, Jean-Louis Chaussade, CEO, stated:

"In 2012, SUEZ ENVIRONNEMENT achieved a solid operational performance, notably
in water and internationally, in a challenging economic context in Europe.
These results confirm the relevance of its business model.

Throughout the year, SUEZ ENVIRONNEMENT implemented a double approach focusing
on continuous performance improvement while building its future growth.
Therefore, the Group continues its transition towards more new added value
services in the water sector, more waste recovery, more international growth
and more industrial water.

We have maintained a strong commercial dynamic and have also strengthened our
competitiveness efforts through COMPASS, our performance optimization program.
The combination of this cost optimization policy and satisfactory results of
our International & Water Europe divisions enabled us to offset the
difficulties of theWasteinEurope. These elements led to a sharp increase of
the operational performance in the second semester. These actions, combined
withSUEZENVIRONNEMENT's strong fundamentals, comfort us on the growth
prospects of theGroupas early as 2013, and this despite an uncertain
macroeconomic environment inEurope^[^2^].

SUEZ ENVIRONNEMENT adapts itself, indeed, with the evolutions in water and
waste markets to capture new growth opportunities. The group proceeded for
changes since years, in particular in the contract models including
progressive pricing or environmental performance.

SUEZ ENVIRONNEMENT looks therefore at the future with confidence and
ambition."

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2012 Results 

SUEZ ENVIRONNEMENT posted solid results in a challenging economic context in
Europe.

  +Revenues

The Group reported revenues of €15,102m as at 31 December 2012, up+1.8%
(€272m) on a gross basis compared with 31 December 2011; this growth breaks
down between:

  +Organic growth of 0.3%:
  +Water Europe: +3.3% (+€137m)
  +Waste Europe: +0.1% (+€8m)
  +International: -2.4% (-€100m)
  +Thescopeimpact was -0.6% (-€83m), and related mainly to the disposals of
    Bristol Water in the United Kingdom and Eurawasser in Germany, which were
    respectively completed in late 2011 and early 2012.
  +There was a favourable currency impact of+2.1% (+€306m) due primarily to
    the decrease of euro against the Australian dollar (+€87m), the US dollar
    (+€62m), the Pound Sterling (+€64m) and the Chilean peso (+€46m).

  +Operating performance

The Melbourne plant successfully passed all the performance and reliability
tests, and therefore obtained its final reception certificate on 17 December
2012. Versus June estimates, SUEZ ENVIRONNEMENT has released €20m of provision
and accounted an additional cash out of €29m, initially scheduled in 2013.

EBITDA amounted to €2,450min 2012, a grossvariationof-2.5% (-€63m), and
stable at a constant scope. The EBITDA of the Water Europe and International
divisions grew by +1.0% and +3.3% respectively, on an organic basis. The Waste
Europe division reported a decrease of -11.0%, due notably to the slowdown in
European industrial production.

The Compass program cost reductions amounted to €150m in 2012, and came mostly
from the Waste Europe division. The acceleration of this program contributed
to the increase in the EBITDA margin that rose from 15.5% in the 1^st half of
the year to 16.9% in the 2^nd.

The Group's EBITDA margin therefore amounted to 16.2% for the full year.

Current Operating Income amounted to €1,146m, a gross increase of+10.2% and
an organic increase of +12.7%. This increase was partly due to the
contribution improvement of the Melbourne plant.

Meanwhile, Income fromOperationalActivities decreased by €40m, as it
included firstly, less gains on disposals (€69m in 2012 compared with €166m in
2011), and secondly, an impairment due to the market value of the Group's
interest in ACEA (€60m).

  +Net Income

Net financial income amounted to -€419min 2012, compared with -€405m in 2011.
The cost of debt reached 5.08% versus 5.19% in 2011, despite the extension of
the debt's maturity to 6.5 years.

Tax amounted to -€186m in 2012 compared with -€174m in 2011. The effective tax
rate increased, rising from 25.4% in 2011 to 29.3% in 2012. This increase was
primarily explained by the non-deductibility of the impairment charged on the
ACEA shares in 2012.

Minority interests were down €9m to -€218m.

Net Income Group share therefore amounted to €251m.

  +Free Cash Flow and Balance Sheet

SUEZ ENVIRONNEMENT continued to pursue a policy of cash generation and
selective investments during the year.

Free Cash Flow was up sharply to €1,358m. It benefited from a reduction in the
working capital requirement, which was primarily due to a €317m
deconsolidating securitisation programme. Excluding this impact, Free Cash
Flow would have amounted to €1,041m compared with €860m in 2011. 

Net investments amounted to €1,177m, in line with the €1.2 billion envelop
planned for 2012. SUEZ ENVIRONNEMENT gave priority, in 2012, to the
development of its international activities and the construction of waste
recovery infrastructures in Europe.

SUEZENVIRONNEMENTmaintained thestrong profileof its balance sheet.Net
financial debtdecreasedto €7,436m compared with €7,557m^[3] as at the end of
December 2011. The net financial debt/EBITDA ratio remained unchanged during
the financial year and amounted to 3.0x. In December 2012, Moody's, the
financial rating agency, reiterated the A3, stable outlook rating assigned to
the Group.

The Group's ROCE was 6.9% for a weighted average cost of capital of 6.6%.

  +Dividend

As a result of these solid performances and because of its confidence in its
future outlook, SUEZ ENVIRONNEMENT will propose a dividend on 2012 results of
0.65 euros per share, paid in cash, at the General Meeting of Shareholders on
23 May 2013.

  +Governance

The shareholder agreement expiring on 22/07/2013 has not be renewed; the
governance of
SUEZ ENVIRONEMENT will be adapted accordingly. SUEZ ENVIRONEMENT and GDF SUEZ
have already signed a cooperation framework agreement aiming to continue their
industrial and commercial cooperation. Nonetheless, GDF SUEZ has indicated
that they will remain a strategic long term partner and the reference
shareholder of SUEZ ENVIRONNEMENT.

--------------------------------------------------

2012 Highlights

SUEZ ENVIRONNEMENT pursued a dual approach in 2012, which consisted, on one
hand, to reinforce its positions in its traditional businesses and abroad, and
on the other hand, to extend the scope of its activities in water and waste
towards four strategic priorities.

Strengthening the business Base in water and waste

SUEZ ENVIRONNEMENT pursued in 2012 its growth strategy of its positions, from
areas where the Group is already established and where the growth in its
businesses is the most significant.

InwaterinEurope, the Group was able to continue to rely on strong
commercial activity in France and Spain, and to benefit from price increases
and from the development of its new businesses. In France, Lyonnaise des Eaux
successfully renewed almost all of its contracts, like in Bordeaux, while the
term of AGBAR's contracts in Spain remained long, with an average of 19 years.

In WasteinEurope, despite the challenging economic context, SUEZ
ENVIRONNEMENT was able to take advantage of its positioning on the full waste
value chain, and specifically on the recovery market, where volumes increased
by over 3% during the year. The Group is benefiting from the development of
recovery units, which has been on-going since several years.

In the International division, the factoring of the water and waste sector
challenges, the infrastructure needs, and the adoption of demanding
environmental standards in many countries, all amount to opportunities for
growth. SUEZ ENVIRONNEMENT now generates 31% of its revenues outside Europe,
compared with 29% in 2011, which confirms the progression engaged since
several years.

Adapting its businesses permanently in order to make our clients leaders of
environmental performance

Against the backdrop of an economic downturn and the increasing scarcity of
resources, SUEZ ENVIRONNEMENT'S traditional markets have changed. Its
businesses have become more complex, and customers' expectations are
increasingly focused on technology and service optimisation, coupled with
increasing demand for performance-based contacts. After the "Contract for
Water Health", original value-based model, Lyonnaise des Eaux was once again a
pioneer in 2012, by offering in Dunkerque a progressive pricing contract with
an environmental component. Meanwhile, AGBAR has made its new offers a
strategic priority by setting up Aqualogy in 2011, a division dedicated to new
businesses in the water sector.

To make its customers leaders in environmental performance, SUEZ ENVIRONNEMENT
is pursuing an ambitious research and innovation policy, and is offering
technological solutions for managing and treating waste, protecting water
resources, and reducing customers' environmental footprint. 
Blue Orange, the SUEZENVIRONNEMENTinvestment fund, therefore supported a
start-up this year, in order to develop a solution that enables to monitor the
fill-rate of waste containers, and to optimise their management and collection
by waste collection services. In 2012, SUEZ ENVIRONNEMENT research centres'
expertise in terms of micropollutants allowed Lyonnaise des Eaux to quickly
propose a solution for the detection and treatment of perchlorates in Bordeaux
and Lille.

Four strategic priorities for conquering new growth territories 

In 2012, SUEZ ENVIRONNEMENT prioritised four major strategic priorities upon
which the Group firmly established a position.

Continuing to develop smart water services is one of the Group's strategic
priorities, and it has developed a range of higher value-added services, by
offering its customers solutions for preserving water resources, and for the
predictive and dynamic management of rain water, as well as services to
managers of real estate complexes, farmers and individuals. In particular,
SUEZ ENVIRONNEMENT is pursuing the development of its remote metering offer
with 1.5 million smart meters already sold.

SUEZ ENVIRONNEMENT has also continued to develop its waste activities towards
recovery businesses, while maintaining a strong presence in traditional
elimination and collection activities. SUEZ ENVIRONNEMENT has achieved a ratio
of 1.4 tonnes of recovered waste for 1 tonne of eliminated waste, in line with
its target of 2 tonnes recovered for every tonne eliminated by 2016.

Internationally, SUEZ ENVIRONNEMENT has established operations in new
high-growth territories via selective investments and the development of new
contract models. In fact, the Group has been awarded an operation and
maintenance contract in New Delhi to improve the water supply service in the
Malviya Nagar District, as well as a Public Private Partnership contract for
the construction and operation of an energy recovery plant in Poznan, Poland.

Finally, to meet the challenges of the industrial water sector, SUEZ
ENVIRONNEMENT has created a new dedicated entity, Degrémont Industry, which
signed contracts in 2012 with ENI in Italy and BP in the Netherlands. On this
market, SUEZ ENVIRONNEMENT is targeting an average annual growth of 10% by
2016, thanks to the development of new service offers that primarily focus on
engineering, equipment, operation and maintenance. In Brazil, the Group is
already one of Petrobras' major partners for the treatment of processing and
industrial wastewater at several of its refineries.

Performance by division

Water Europe

                                           Gross   Organic
                                                               Scope
    in EURm        31/12/2011 31/12/2012  change    change    change
    Revenues         4,206      4,325      +2.8%    +3.3%      -1.6%
    EBITDA           1,212      1,183      -2.5%    +1.0%      -5.7%

  +The Water Europe division reported revenues of €4,325m in 2012, growing
    organically by 3.3%. The activity was boosted by the impact of favourable
    prices effects due to the price indexation formulas in France (+3.3%),
    Spain (+5.7%), and Chile (+4.0%), and by drinking water volumes sold that
    increased in Chile (+0.8%), remained stable in France, and were slightly
    lower in Spain (-0.7%). The construction activity was up in France, and
    down sharply in Spain.

EBITDA amounted to €1,183m, growing organically by 1.0%. The division's EBITDA
margin is at 27.3%.

  +Commercial activity remained strong in both France and Spain: the Water
    Europe division won and renewed many contracts, like Riba-Roja de Turia
    (25 years, €65m) in Spain, and Bordeaux Assainissement (6 years, €243m),
    Grasse (20 years, €145m) or Auxerre (10 years, €36m) in France.

Waste Europe

                                           Gross   Organic
                                                               Scope
    in EURm        31/12/2011 31/12/2012  change    change    change
    Revenues         6,417      6,542      +2.0%    +0.1%      +0.8%
    EBITDA[4]          886        804      -9.2%   -11.0%      +1.0%

  +The Waste Europe division reported revenues of €6,542m, growing
    organically by +0.1%.
    The division was affected by an unfavourable economic environment. The
    tons eliminated were down
    (-9.5%), in line with the anticipated trend seen for several years and
    that will last. On another hand, the recovery revenues are increasing,
    thanks to strong volumes (+3.1%) and the construction of energy recovery
    units in the United Kingdom and France. The overall reduction in volumes
    treated was -2.5%, in line with the slowdown in European industrial
    production indices. Furthermore, the division benefited from a slightly
    positive price effect in a context where competition may be tough in the
    Netherlands and the United Kingdom.

EBITDA was affected by the decrease in volumes, as well as by decreasing and
volatile secondary raw material prices. EBITDA amounted to €804m, down 11.0%
on an organic basis compared with 2011. Nevertheless, the Waste Europe
division's EBITDA margin increased significantly, rising from 11.6% in the
1^st half to 13.0% in the 2^nd, notably thanks to the acceleration of the
Compass performance optimization program.

  +Commercial activity was dynamic in 2012: SUEZ ENVIRONNEMENT won or renewed
    contracts for the Vallée du Mont Blanc (15 years, €89m), Valenciennes (5.5
    years, €68m) and Grand Lyon (5 years, €53m) in France, the contract for
    Durham (8 years, €130m) in the United Kingdom, the contracts for the
    Ludwigsburg (7 years, €55m) and Neuwied (3years, €12m) regions in
    Germany, and the contract for Arnhem (6 years, €28 m) in the Netherlands.

--------------------------------------------------

International

                                           Gross   Organic
                                                               Scope
    in EURm        31/12/2011 31/12/2012  change    change    change
    Revenues         4,197      4,220      +0.5%    -2.4%      -1.6%
    EBITDA             471        504      +7.1%    +3.3%      -0.5%

  +The International division reported revenues of €4,220m as at 31 December
    2012, a decrease of
    -2.4% on an organic basis.

EBITDA amounted to €504m, growing organically by +3.3% (+€16m), while the
EBITDA margin was 11.9%.

  +During 2012, the International division won contracts including Poznan (25
    years, €850m) in Poland, Perth (10 years, €294m) in Australia, Bayonne (40
    years, €195m) in the United States, and As Samra (25 years, €150m) in
    Jordan.

Positive outlook for 2013

In a difficult macro-economic context, SUEZ ENVIRONNEMENT has the following
targets^[5]:

  +GROWING OPERATING RESULTS

       oGrowth of 2013 revenues compared with 2012
       oEBITDA equal to or higher than €2,550m
       oFree Cash Flow equal to or higher than €1bn

  +MAINTAINING A SOLID BALANCE SHEET

       oNet investment of €1.3bn
       oNet Financial Debt/EBITDA ratio of around 3 times

  +CONTINUE AN ATTRACTIVE DIVIDEND POLICY

       oA dividend related to 2013 results equal to or higher than €0.65 per
         share

Along with cost reductions from the Compass programequal to or higher than
€150min 2013.

Forthcoming communications:

  +22 April 2013: Publication of the 2013 1^st quarter results (conference
    call)
  +23 May 2013: General Meeting of Shareholders
  +31 July 2013: Publication of the 2013 1^st half results (conference call)

Natural resources are not infinite. Each day, SUEZ ENVIRONNEMENT (Paris: SEV,
Brussels: SEVB) and its subsidiaries deal with the challenge of protecting
resources by providing innovative solutions to industry and to millions of
people. SUEZ ENVIRONNEMENT supplies drinking water to 91 million people,
provides wastewater treatment services for 63 million people and collects the
waste produced by 57 million people. SUEZ ENVIRONNEMENT has 80,410 employees
and, with its presence on five continents, is a world leader exclusively
dedicated to water and waste management services. In 2012, SUEZ ENVIRONNEMENT,
a subsidiary in which GDF SUEZ has a 35.7% interest, generated revenues of EUR
15.1 billion.

Disclaimer

"This communication includes forward-looking information and statements. This
forward-looking data is based on assumptions, financial forecasts, estimates
and statements regarding projects, targets and expectations for transactions,
future products and services, or future performances. No guarantee can be
given that these forecasts will be met. Investors and shareholders of Suez
Environnement Company securities are informed that these forward-looking
information items and statements are subject to a number of risks and
uncertainties, which are hard to predict and are generally beyond Suez
Environnement Company's control, and which could cause the results and
outcomes expected to differ materially from those expressed, suggested or
predicted in forward-looking statements and information. Such risks include,
but are not limited to, those developed or identified in public documents
filed with the French Financial Markets Authority (AMF). The attention of
investors and shareholders of Suez Environnement Company securities is drawn
to the fact that the materialisation of all or a portion of these risks is
likely to have a material unfavourable impact on Suez Environnement Company.
Suez Environnement Company is not under any obligation, and does not commit to
publishing changes or updates on these information items and forward-looking
statements under any circumstances. Additional detailed information on Suez
Environnement Company is available on the website
(http://www.suez-environnement.com). This document does not amount to an offer
to sell or to a solicitation to buy Suez Environnement Company securities in
any jurisdiction".

This press release is available at http://www.suez-environnement.com.

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1. Subject to the approval of the General Meeting

2. Assuming GDP growth of 0% in Europe in 2013, within a stable accounting and
tax framework and at constant exchange rates

3. The change in debt includes a negative foreign exchange impact of €108
million; furthermore, the Group has reviewed the definition of net debt
excluding investment hedging instruments and the interest-rate component of
derivatives; the impact on the opening net debt position was -€109 million; on
a pro forma basis, net debt would have amounted to €7,449 million as at the
end of December 2011.

4. Following the reallocation of the positive impact of the gasoline hedges
(€5 million in 2011 and €4 million in 2012)

5. Assuming GDP growth of 0% in Europe in 2013, within a stable accounting and
tax framework and at constant exchange rates.



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