Suez beats debt targets
- From: Vol 6, Issue 3 (March 2005)
- Category: Companies
- Region: Europe
- Related Companies: Ondeo/Suez
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The French water and power group is back on the growth trail.
French energy and water giant Suez launched its new Optimax corporate strategy on 10 March, at the same time unveiling an upbeat set of annual results. 2004 was the year in which Suez bounced back from the difficult years of 2002 and 2003 – earnings per share increased by 48% and the company’s debt was reduced by 25%, exceeding targets for the year.
The Optimax strategy is about profitable growth with cost reduction and increased efficiency of working capital. Within the Suez Environment division (which includes water, wastewater and solid waste), the group proposed the following roadmap for 2005:
* Pursuing organic growth-based development, mainly in key European markets
* Higher visibility leverage and commercial clout in European energy markets outside Belgium
* Strengthening technological leadership and know-how (sludge, desalination, sanitation)
* Outside Europe: selective development in China on a controlled capital employed basis; consolidation and development of the group’s position in eastern Europe; organic growth in the US
* Argentina: aiming for a solution in 2005
The only real point of interest is perhaps the commitment to “strengthening technological leadership and know-how”. Could this mean niche acquisitions (see Weir story, p8) for Degrémont?
Also at the results presentation, the group identified three distinct market categories: Benelux and France, which are categorised as domestic markets; continental Europe, categorised as a development market; and Brazil, China and North America, which are considered to be “key strongholds”. The new development here is that both Chile and Argentina have now dropped off the company’s map.
Despite the 84% improvement in net current income, Suez Environment continues to lag behind the rest of the group in the key return on capital employed measure. The water activities outside Europe are seen as particularly weak performers, although the company did achieve ROCE of 9.1% on its existing Chinese water investments in