Suez Accelerates Strategic Plan, Promises Higher Shareholder Returns Amid Takeover Interest -- Update
--Suez is accelerating its 2030 strategic plan, citing good
results, and it detailed financial targets for 2021, 2022
--Shareholder returns could reach at least EUR2 billion by the
end of 2022
--Suez rejected a 'hostile' approach from Veolia earlier this
By Olivia Bugault
Suez SA said Tuesday that it is accelerating its "SUEZ 2030"
strategic plan after good results and it promised an exceptional
dividend or share buyback of at least 1.0 billion euros ($1.17
billion) as it defends itself from takeover interest.
"The implementation of Suez' strategy announced in 2019, is
delivering tangible results already this year on several
workstreams, allowing the group to bring the overall timeline
forward," Suez said.
The French waste-management company said it would pay the
dividend or share buyback "as soon as possible" and by no later
than the first half of 2021. Including an ordinary dividend of
EUR0.65 per share to be paid in 2021 and of EUR0.70 per share for
the following year, shareholder returns could reach at least EUR2
billion by the end of 2022, Suez said. The plan intends to double
shareholder value by 2022, it added.
Suez rebuffed hostile interest from Veolia Environnement SA
earlier this month, saying that it undervalued the company and
raised concerns about the risk of job cuts. Suez's rejection
followed Veolia's offer to acquire a 29.9% stake in its peer Suez
from energy company Engie SA for EUR2.91 billion.
"The board supports the management in the reinforcement of the
plan, which will significantly increase the value creation
potential of an independent Suez group, for the benefit of all
stakeholders," Philippe Varin, president of the board of directors,
Suez raised the saving objective part of the plan and now aims
for EUR1.2 billion in annual savings by 2023, including EUR900
million that would be achieved by 2022, compared with a previous
annual savings objective of EUR1 billion by 2023, it said.
Suez also provided more details on its financial goals for the
years to come. Suez targets recurring earnings per share in 2021 of
between EUR0.75 and EUR0.80 and up to EUR1 in 2022. It sees revenue
above EUR16 billion for 2021 and above EUR17 billion for 2022. It
targets earnings before interest and taxes between EUR1.35 billion
and EUR1.5 billion for next year and of roughly EUR1.7 billion in
2022, it said.
Meanwhile, the company backed its guidance for this year.
The company expects organic growth, profitability, recurring
free cash flow and return on capital to improve by 2022, it said.
Organic growth is expected to be above 4%-5% per year from 2022,
while its earnings before interest, taxes, depreciation, and
amortization margin should expand by 100 basis points to 300 basis
points, it said.
Suez is redeploying its capital and therefore plans at least
EUR4.5 billion of growth investment from June 2020 to December
2022, including EUR3 billion of continued targeted capital
expenditure to boost its organic growth, it said.
Write to Olivia Bugault at firstname.lastname@example.org
(END) Dow Jones Newswires
September 22, 2020 05:16 ET (09:16 GMT)
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