SUEZ: Sustained Growth in First Half 2004 Revenue

During 2004's first half, French water, waste and energy conglomerate SUEZ achieved organic revenue growth of +5.2%, to EUR 19.9 billion as of June 30, 2004, vs. EUR 19.5 billion a year earlier (1 EUR = 1.20 US$). The 2003 figures are restated to exclude revenues for Nalco, which was sold in the fourth quarter of that year.

Jul 29th, 2004

PARIS, July 29, 2004 (PRNewswire-FirstCall) -- During the first half of 2004, French water, waste and energy conglomerate SUEZ achieved organic revenue growth of +5.2%, to EUR 19.9 billion as of June 30, 2004, vs. EUR 19.5 billion in the first half of 2003 (1 EUR = 1.20 US$). The 2003 figures are restated to exclude revenues for Nalco, which was sold in the fourth quarter of that year.

Organic growth stemmed principally from:


  • Electricity & Gas International (+ 37.7%, or + EUR 712 million) thanks to the continued expansion of LNG activities in the United States (+ EUR 143 million), the success of Tractebel Energy Services Inc (TESI) in its direct sales activity in the United States to industrial and commercial clients (+ EUR 153 million), and to the start-up of four new power plants in 2003 and early 2004 (+ EUR 309 million),
  • A rise in electricity sales in Europe (+ 5.6%, + EUR 180 million), and especially from wholesale transactions,
  • The water activity in Europe (+ 4.8%, + EUR 88 million), particularly in France and Spain and with industrial customers,
  • Overall, other Group activities recorded stable revenue reflecting solid positions.
    The increase in first half 2004 organic revenue growth follows strong revenues growth achieved in first half 2003, particularly for Electricity & Gas Europe (EGE), Electricity & Gas International (EGI) and Water activity in Europe.

Taking into account the impact of disposals, exchange rate fluctuations and the decline in natural gas prices, growth in revenues was 2.4%. Following the sale of the communications sector companies, revenues are now entirely generated by the Group's energy and environment businesses. The Group generates 89% of all revenues in Europe and North America, with Europe alone accounting for 80%.
Total revenue growth (+ EUR 467.9 million) breaks down as follows:


  • Organic growth (+ EUR 944 million)
  • Changes in Group structure (- EUR 120 million): including the sale of companies in the communications sector (- EUR 377 million) and of Cespa (- EUR 294 million) as well as the termination of the Puerto Rico contract (- EUR 226 million); these were partially offset by the consequences of deregulation in Belgium, tied in particular to the creation of Electrabel Customer Solutions (+ EUR 701 million).
  • Exchange rate fluctuations (- EUR 250 million), mainly due to the U.S. dollar (- EUR 177 million).
  • The impact of the fall in natural gas prices (- EUR 106 million).

Group business revenue trends

ENERGY
Energy revenues grew by 9.5% , with organic growth increasing 6.8%. The fall in natural gas prices (-EUR 106 million) and the unfavorable impact of foreign exchange fluctuations (- EUR 208 million) were largely offset by the positive impact of changes in Group structure (+ EUR 690 million).

ENVIRONMENT
SUEZ Environment generated revenues of EUR 5.6 billion (against EUR 6.0 billion during first-half 2003), under the impact of changes in Group structure (- EUR 433 million, mainly arising from the disposal of Cespa and the termination of the Puerto Rico contract) and exchange rate fluctuations (- EUR 42 million).
Organic growth stood at + 1.4%, or + EUR 76 million, resulting from:


  • The development of the activities of Water Europe (+ 4.8%, or + EUR 88 million) boosted by the activity of Ondeo Industrial Solutions (industrial contracts now consolidated into this entity), the sanitation and services activities in France and by Agbar (Spain), despite less favorable climatic conditions than in 2003.
  • The Waste Services activities in France progressed (+ EUR 20 million) thanks to the soil decontamination activities and industrial contracts. A fall was recorded in Germany and the Benelux following the termination of unprofitable contracts and the lack of a cyclical rebound in these markets mainly in terms of volumes. Overall, Waste Services Europe recorded a slight organic drop in revenues (- 1.2%).
  • On the international side, the Americas, Asia-Pacific, Central Europe, Africa and the Middle East registered positive organic growth despite the termination of some contracts.
  • The decline at Degremont was due mainly to the stoppage of the BOT at Bogota and the entry into the reception phase of major contracts (Fujairah and Valence). The recently signed major contracts (Halifax, Valenton, Moscow, Jordan) will generate significant revenues as of 2005.

      Revenue breakdown by geographic zone
      Europe and North America accounted for the bulk of revenues, representing 89% of the total, with the European continent alone accounting for 80%. Growth was sustained in France and Belgium mainly due to automatic adjustments resulting from deregulation in Belgium (ECS) and despite the impact of the communications sector disposals in France which had contributed EUR 359 million to first-half 2003 revenues. The contribution of the Other European Union fell as a result of the Cespa disposal. In North America, the termination of the Puerto Rico contract and the negative impact of foreign exchange fluctuations were offset by the growth of Tractebel North America.

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