The chief executive at French waste and water management company Veolia on Thursday hinted at additional acquisitions in the corporate segment that encompasses its nuclear services business line.
“[A]s in 2017, growth in 2018 will be complemented by some targeted acquisitions, for example, in the following areas: plastics recycling, energy efficiency, or hazardous waste treatment,” Chairman and CEO Antoine Frérot said during a conference call on the company’s 2017 earnings report.
Veolia has moved aggressively into the nuclear sphere in recent years, buying California-based cleanup technology provider Kurion for $350 million in 2016 and then last year folding it into the new Veolia Nuclear Solutions, which provides the full scope of the company’s nuclear decommissioning and radioactive waste management services. With the recent acquisition of Department of Energy contractor Wastren Advantage, Veolia has established an even more specialized entity for doing business with the U.S. government: VNS Federal Services.
Those operations all fall within the hazardous waste activity line of Veolia’s global businesses segment.
“We’ll continue our targeted policy of tuck-ins, but we don’t expect any large-scale acquisition, not currently,” Frérot said, without discussing specific companies or corporate segments that might be targeted.
A Veolia spokesman on Thursday also declined to discuss details of upcoming buyouts.
In its earnings release this week, Veolia reported increases in revenue and earnings for 2017 across its geographic and business segments.
Company-wide revenue rose by 3.9 percent, or 4.9 percent at constant exchange rates, from €24.2 billion ($29.7 billion) in 2016 to €25.1 billion ($30.9 billion) last year, according to a Veolia press release.
Net income was up by 4.4 percent, or 6.1 percent at constant exchange rates, from €597 million ($734.2 million) in 2016 to €623 million ($766.1 million) last year.
Management also noted a 2.7 percent spike in earnings before interest, taxes, depreciation, and amortization, to €3.3 billion ($4.1 billion), and €255 ($313 million) in cost reductions through the year.
“2017 ended at an even faster pace of growth compared to each of the year’s first three quarters relative to all of our key financial indicators,” Frérot told financial analysts. “The difficulties anticipated at the beginning of the year were quickly addressed and were neutralized, demonstrating that Veolia is now a reactive and aligned group.”
Revenue for global businesses operations took a tiny step down, dropping 0.4 percent. Within that, though, hazardous waste revenue rose by 5.7 percent. The company did not provide direct earnings figures for Veolia Nuclear Solutions, which in 2017 won deals including a contract to install effluent management systems at four Magnox reactors in the United Kingdom.
Revenue in North America spiked by 10.3 percent, largely due to the 2016 acquisition of the sulfur products arm of U.S. chemical company Chemours and “good momentum in hazardous waste,” Veolia said.
For 2018, Veolia said it anticipates a further increase in revenue and earnings, along with €300 million ($369 million) in cost savings.
Also this week, Veolia’s Board of Directors voted in favor of renewing Frérot’s contract as chairman and CEO for another four years. Frérot has held the position since December 2010. Shareholders must approve the decision in their upcoming annual meeting.
Veolia, Canadian Companies Form Nuclear Partnership
Meanwhile, Veolia Nuclear Solutions has partnered with two Canadian companies to form a new entity that will provide “fresh innovation” for the nuclear industry.
The Nuclear Innovation Consortium is a collaboration of Veolia Nuclear Solutions; Hatch, an engineering firm based in Ontario; and Promation, an Ontario-headquartered producer of tooling, automation, and robotic technologies.
Its emphasis will be on providing remote access and robotic systems, automation, advanced engineering, and simulation and virtual reality “to speed innovation from concept to implementation,” a consortium spokesman said Thursday by email.
“Each company has been working with one of the others in some capacity for some time responding to client requests in the engineering and technology solution space,” the spokesman said. “During the mid-part of 2017, given each of their market, client program and technical knowledge, the companies decided to come together to proactively bring innovative solutions that could bring real schedule and cost improvements to the nuclear programs.”
The venture will focus on the Canadian nuclear market, including remediation and decommissioning at Canadian Nuclear Laboratories sites and refurbishment of CANDU reactors operated by Bruce Power and Ontario Power Generation. No contracts have been sealed so far.
