Sustained Growth in Revenues at September 30, 2004 Revenues: EUR
29.4 billion PARIS, November 3 /PRNewswire-FirstCall/ -- SUEZ
achieved organic revenue growth of +5.4% [1], to EUR 29.4 billion
as at September 30, 2004, (versus EUR 28.7 billion at September 30,
2003 [2]). Organic growth stemmed principally from: - Electricity
& Gas International, thanks to the continued expansion of U.S.
LNG activities (+ EUR 141 million), the success of Tractebel Energy
Services Inc (TESI) in its U.S. direct sales activity to industrial
and commercial clients (+ EUR 260 million), and to the start-up of
five new power plants in 2003 and 2004 (+ EUR 542 million), - A
rise in electricity sales in Europe (+ 5.6%, + EUR 270 million),
especially from wholesale transactions and sales outside Belgium, -
An increase in Distrigaz natural gas sales (+ 11.1%, + EUR 148
million), - Expanded commercial activity at Elyo (+ 4.2%, + EUR 96
million), - Water activity in Europe (+ 3.5%, + EUR 98 million),
particularly in France and Spain and with industrial customers. The
increase in organic revenue growth at September 30, 2004 (+ 5.4%)
was slightly better than the first-half 2004 figure (+ 5.2%).
Stronger organic growth between June 30 and September 30, 2004 was
due mainly to Distrigaz (+ EUR 148 million versus EUR 37 million at
June 30, 2004) and to SUEZ Environment (+ EUR 162 million compared
with EUR 76 million at June 30, 2004). Taking into account the
impact of disposals, exchange rate fluctuations and the decline in
natural gas prices,[3] total revenue growth was 2.5%.2 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 79%. [1] See Table
headed 'Organic Revenue Growth on a Comparable Basis', presenting
comparable data. [2] Restated to exclude Nalco revenues. Nalco was
sold during the 4th quarter of 2003 and was accounted for under the
equity method in the 2003 consolidated financial statements. The
company was still fully consolidated in reported revenues for
third-quarter 2003, with revenues of EUR 1,864.5 million. [3] The
strong increase in fossil fuel spot prices during the period has a
deferred impact on sales portfolio. Total revenue growth (+ EUR 710
million) breaks down as follows: - Organic growth (+ EUR 1,438
million) - Changes in Group structure (- EUR 306 million):
including the sale of companies in the communications sector (- EUR
540 million) and of Cespa (- EUR 439 million), as well as the
termination of the Puerto Rico contract (- EUR 344 million); these
were partially offset by the consequences of deregulation in
Belgium, tied in particular to the creation of Electrabel Customer
Solutions (+ EUR 792 million). - Exchange rate fluctuations (- EUR
350 million), mainly due to the U.S. dollar (- EUR 261 million). -
The impact of the fall in natural gas prices (- EUR 72 million).
REVENUE CONTRIBUTION BY BUSINESS ACTIVITY Sept. 30 Sept. 30, Sept.
Gross change Organic (in EUR millions) 2003 pro 30, 2003 (2) growth
2004 forma (1) reported (3) Energy 20,901.6 19,091.2 19,091.2 +9.5%
+6.8% Environment, 8,482.2 9.043.3 9.043.3 -6.2% +2.0% excl. Nalco
Nalco 1,864.5 - - Others(4) 0.0 539.6 539.6 - - TOTAL GROUP
29,383.7 28,674.1 30,538.6 +2.5% +5.4% (1) See Table headed
'Organic Revenue Growth on a Comparable Basis', presenting
comparable data. (2) Calculated on the basis of June 2003 pro forma
revenues. (3) See Table headed 'Organic Revenue Growth on a
Comparable Basis', presenting comparable data. (4) Communications
sector companies sold in early 2004 were eliminated from
consolidation at January 1, 2004. GROUP BUSINESS REVENUE TRENDS -
ENERGY Energy revenues grew by + 9.5%, with organic growth
increasing + 6.8%. The fall in natural gas prices (- EUR 72
million) and the unfavorable impact of foreign exchange
fluctuations (- EUR 282 million) were largely offset by the
positive impact of changes in Group structure (+ EUR 889 million).
(in EUR millions) Sept. 30 Sept. Gross Organic 30, 2003 change
growth 2004 Electricity & Gas Europe 9,896.8 9,046.7 9.4% 1.6%
Electricity & Gas 4.036.6 3,271.3 23.4% 36.1% International
Energy and Industrial 6,968.2 6,773.2 2.9% 1.0% Services ENERGY
20,901.6 19,091.2 9.5% 6.8% The revenues of Electricity & Gas
in Europe (EGE) rose by 9.4% as at end September 2004. On a
comparable basis, revenues increased by EUR 142 million reflecting
organic growth of + 1.6%. - Electricity Organic electricity sales
increased by EUR 270 million, or 5.6% (out of which 4.7% in
volumes). During the first nine months of the year, electricity
sales reached 106.7 TWh, of which 51.6 TWh from Belgium, 32.4 TWh
from outside Belgium, and 22.7 TWh from the wholesale market. In
2004, sales from the regulated market (Belgian inter-municipal
companies) represent 8.6% of volumes sold, versus 18.2% in 2003. -
Wholesale revenues realized within the framework of the
optimization of both generation facilities and Electrabel's
portfolio of contracts at a European level amounted to EUR 863
million as at September 30, 2004, compared with EUR 521 million as
at September 30, 2003. - In Belgium, revenues and sales volumes
held up thanks to the increase in sales to major industrial
customers, even though the deregulation of the electricity market
in Flanders has been in full force since July 1, 2003. - Outside
Belgium, electricity sales grew in Germany and France. Overall,
however, they posted a slight decline, with sales to Dutch
distributors henceforth accounted for under "wholesale" revenues
(see above). - Natural gas - Distrigas organic sales growth outside
the group was + 11.1% (+ EUR 148 million), principally due to LNG
sales and other trading activities, for a combined total of EUR 622
million. - Electrabel sales of natural gas were down (- 3.9%, or -
EUR 38 million), while deregulation occurred in Flanders (as of
July 1, 2003) and in Wallonia (partial deregulation as of January
4, 2004). - Fluxys outside group sales growth was + EUR 11 million.
- Other activities, mainly services invoiced to inter-municipal
companies, were down by EUR 245 million, mainly due to deregulation
of the Flanders market. Electricity & Gas International
revenues increased by 36.1% or + EUR 1,071 million on a comparable
structural, exchange rate, and natural gas price basis. This growth
is explained mainly by new electricity production capacity coming
on stream, continued development of LNG transport and
re-gasification, as well as the dynamism of commercial activities
leading to improved utilization of existing capacities, better
contracts, and increased sales to industrial and commercial
customers. More specifically, this growth in revenues was mainly
due: - In North America to: - increased sales by Tractebel LNG
North America (+ EUR 141 million) or + 20% in volume terms, thanks
to expansion of the Everett terminal's vaporization capacity, to
new supply contracts coming into force in April 2003, and to sales
to other LNG terminals. - the start-up of three new power plants (+
EUR 338 million): Monterrey, Mexico in April 2003 (245 MW) and
Chehalis, State of Washington, in October 2003 (520 MW), and Wise,
Texas in July 2004 (720 MW). - the commercial success of Tractebel
Energy Services, Inc.'s direct energy sales activity to industrial
and commercial sectors customers (+ EUR 260 million). - In Asia
with the progressive start-up in January 2003 of the Bowin power
plant (740 MW) in Thailand and, in February 2004, the Baymina power
plant (770 MW) in Turkey (+ EUR 204 million). - In Latin America
and particularly in Brazil where sales increased by EUR 118 million
as a result mainly of the gradual replacement of "initial
contracts" volumes by new bilateral contracts with distributors and
industrial customers, along with sales to Argentina. Chile and Peru
recorded growth (+ EUR 64 million) both in terms of volumes and
prices. The increase in Energy and Industrial Services activities
was + EUR 67 million (+ 1%): - Elyo's businesses registered growth
of + 4.2%, mainly due to commercial development in France (+ EUR 38
million), Benelux (+ EUR 26 million), and Italy (+ EUR 23 million).
- Ineo and Endel (Groupe Fabricom) increased by + 2.3% and + 5.9%
respectively, as well as HVAC activities: + 7.2%. Overall, Groupe
Fabricom's contribution increased slightly despite a depressed
operating environment in the Netherlands. - Engineering business
activities (Tractebel Engineering) were marked by the completion at
year-end 2004 of cogeneration plant construction contracts in
France. - ENVIRONMENT (in EUR millions) Sept. 30, 2004 Sept. 30,
Sept. 30, Gross Organic 2003 pro change growth forma 2003 reported
SELS Water Europe 3,039.9 2,717.0 2,717.0 11.9% 3.5% (1) SELS Waste
3,304.2 3,796.8 3,796.8 -13.0% -0.6% Services Europe Degremont
574.7 579.4 579.4 -0.8% -0.3% Others / 1,563.4 1,842.3 1,842.3
-15.1% 5.9% International SEIS (Nalco) - 107.8 1,972.3 ns
ENVIRONMENT 8,482.2 9,043.3 10,907.8 -6.2% 2.0% (1) Including
revenues of Ondeo Industrial Solutions included under SEIS in 2003
for EUR 107.8 million. SUEZ Environment generated revenues of EUR
8.5 billion (versus EUR 9 billion during the 3rd-quarter of 2003),
under the impact of changes in Group structure (- EUR 653 million,
mainly arising from the disposal of Cespa and the termination of
the Puerto Rico contract) and exchange rate fluctuations (- EUR 68
million). Organic growth stood at + 2%, or + EUR 162 million,
resulting from: - The development of the activities of Water Europe
(+ 3.5%, or + EUR 98 million) boosted by the activity of Ondeo
Industrial Solutions (industrial contracts now consolidated into
this entity), by Agbar (Spain), and sanitation and services
activities in France, despite less favorable climatic conditions
than in 2003 and lower taxes collected on behalf of third parties.
- The Waste Services activities in France progressed (+ EUR 37
million at September 30, compared with + EUR 19 million at June 30)
thanks to increased hazardous industrial waste disposal, soil
decontamination and incineration activities. A fall was recorded in
Germany and the Benelux due to unfavorable economic conditions, the
reduction of certain municipal contracts and pressure on prices in
DSD in Germany. Overall, revenues of Waste Services Europe were
stable (- 0.6%). - On the international side positive organic
growth was recorded, mainly thanks to South America (+ 10.7%),
mainly from rate increases obtained following startup of the
Farfana, Chile plant, and to Asia-Pacific (+ 14.2%), from water
activities in China and waste collection in Australia. - The slight
decline at Degremont was due mainly to termination of the BOT at
Bogota and to entry into the taking over phase of major contracts
(El Asfar, Fujairah, Valence, and others). These factors were
offset by fine performances in France, in Europe outside the U.K.,
and from service activities. Recently signed contracts (Halifax,
Valenton, Moscow, Jordan, etc.) 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 79%. The
geographic breakdown was as follows: (in EUR million) Sept. % Sept.
% Change 30, 2004 contribution 30, 2003 contribution 2004/2003 pro
forma France(1) 6,869.3 23.4% 6,876.4 24.0% -0.1% Belgium 8,826.2
30.0% 8,195.3 28.6% 7.7% Subtotal, 15,695.5 53.4% 15,071.7 52.6%
4.1% France-Belgium Other European Union 6,320.9 21.5% 6,722.7
23.4% - 6.0% Other European 1,215.8 4.1% 1,041.3 3.6% 16.8%
countries Subtotal, Europe 23,232.2 79.1% 22,835.7 79.6% 1.7% North
America 2,926.1 10.0% 2,893.2 10.1% 1.1% Subtotal Europe and
26,158.3 89.0% 25,729.0 89.7% 1.7% North America South America
1,457.9 5.0% 1,232.0 4.3% 18.3% Asia and Oceania 1,352.0 4.6%
1,304.2 4.5% 3.7% Africa 415.5 1.4% 409.0 1.4% 1.6% TOTAL 29,383.7
100.0% 28,674.1 100.0% 2.5% (1) The revenue change in France was +
7% excluding the impact of the disposal of the communication
sector. Growth was sustained in France and Belgium : + 7.7 % in
Belgium (due to deregulation in Belgium (ECS)) and 7 % in France
excluding the impact of the disposal of the communication sector
(which contributed EUR 530 million to 3rd quarter 2003 revenues in
that geographic area). 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. ORGANIC REVENUE GROWTH ON A COMPARABLE
BASIS Organic growth in revenues on a comparable basis was as
follows: Sept. 30, Sept. 30, Organic 2004 2003 growth Reported
revenues 29,383.70 30,538.60 Nalco revenues(1) - 1,864.50 Pro forma
29,383.70 28,674.10 revenues Changes in Group - 1,101.10 - 1,063.40
structure(2) Termination of - 343.7 the Puerto Rico contract
Exchange rate - 350.5 fluctuations Natural gas - 71.80 prices
Comparable 28,282.60 26,844.80 5.4% (1) Restated to exclude Nalco
revenues. Nalco was sold during the 4th quarter of 2003 and was
accounted for under the equity method in the 2003 consolidated
financial statements. The company was still fully consolidated in
published revenues for third-quarter 2003, with revenues of EUR
1,864.5 million. (2) Respectively 2004 revenues of newly
consolidated entities and 2003 revenues of deconsolidated entities.
QUARTERLY REVENUE BREAKDOWN (in EUR millions) 1st qtr 2nd qtr 3rd
qtr 4th qtr Cumulative 2003, including 10,756.5 9,927.5 9,854.6 n/a
n/a Nalco 2003, pro forma 10,136.6 9,316.3 9,221.2 10,947.7
39,621.8 excluding Nalco(1) 2004 10,312.2 9,608.6 9,462.9 29,383.7
Gross change in % 1.7% 3.1% 2.6% 1) Restated to eliminate Nalco
revenues. Nalco was sold during the 4th quarter of 2003 and was
accounted for under the equity method in the 2003 consolidated
financial statements. Notwithstanding, with revenues of EUR 1,864.5
million, Nalco was fully consolidated in published revenues for
third-quarter 2003. SUEZ (http://www.suez.com/) is an international
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 supports Paris as the site for the 2012 Olympic
Games. 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
offered as of the date of 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/ DATASOURCE: Suez CONTACT:
Press contacts: For France: Antoine Lenoir: +33-1-4006-6650,
Catherine Guillon: +33-1-4006-6715; For Belgium: Guy Dellicour:
+32-2-370-34-05; Financial analyst contacts: Arnaud Erbin:
+33-1-4006-6489, Bertrand Haas: +33-1-4006-6609, Eleonore de
Larboust: +33-1-4006-1753
Copyright