Séché Environnement: Half-yearly Results at June 30, 2019

Regulatory News:

Séché Environnement (Paris:SCHP):

At the Board of Directors’ meeting held on September 5, 2019 to approve the consolidated financial statements at June 30, 2019, Chairman & CEO Joël Séché stated:

“The first half of 2019 featured a steady pace of acquisitions Internationally, and good business volumes and solid operating income across the historical scope, all of which confirm the relevance of Séché Environnement’s sustainable-growth strategy.

Across its historical scope, Séché Environnement pursued quality growth in France and Internationally, driven by dynamic Circular Economy and Sustainable Development markets, specifically with Industrials, which are its core clientèle.

Internationally, Séché Environnement took a leading position in South Africa, gained strength in Peru, and began operating in Italy. These actions align, geographically and industrially, with our existing facilities in those areas of Latin America and Europe. In South Africa, Interwaste and the Séché South Africa holding company, recently created to accelerate the Group’s development in southern Africa, are aspiring to build growth platforms in those regions.

The trend in our operating income over the period demonstrates that our profitability is on target for the medium term, supported by our innovation capacity and our positioning on value-added business lines in waste recovery and treatment.

As such, the second half of 2019 should confirm the economic performance of the first half – Internationally, with the ramping up of the scope recently acquired in Peru and South Africa, and in France, with the return to high business volumes in services.

This favorable outlook boosts our confidence in Séché Environnement’s ability to improve its results across the board in 2019 compared to 2018 and, starting in 2019, to meet or even exceed some of the economic and financial targets set for 2020.

For this reason, I wanted the new strategic targets for 2022 to be presented in December 2019 in terms of operations and operating profitability, which will reaffirm our sustainable and value-creating growth.”

Comments on the Group’s activity, income, and financial situation as of June 30, 2019

During the first half of 2019, Séché Environnement deployed an active external growth strategy Internationally, taking control of Peruvian company Kanay and acquiring Interwaste in South Africa and Mecomer in Italy.

Across its historical scope, the Group has maintained quality organic growth on its main markets in France and Internationally. Against this backdrop, the improvement in operating income reflects the positive commercial impact (volume effect and favorable prices) as well as the increased tax burden (property tax) and one-time expenses related to the Group’s globalization.

The second half of 2019 is expected to bring continued high volumes and set the stage for further improvement in income in 2019 compared to 2018, at constant scope.

In addition, Séché Environnement, in favorable market conditions, carried out a €80m bond issue with French and European investors, with the aim of refinancing acquisitions made in the first half of 2019.

Main developments in activity, income, and financial situation in the first half of 2019

Solid organic growth - Scope effect – International

With consolidated growth up by +18.8% to €329.8m, the first half of 2019 confirmed the momentum of Séché Environnement’s organic growth on its main markets in France and Internationally, strengthened by the contribution of acquisitions during the period.

At constant scope and exchange rates, contributed revenue was €286.6m, an increase of +3.2%, in line with expectations.

In France, the Group benefited from a positive trend in its industrial markets and from the strength of its markets with Local Authorities, supported by the implementation of the circular economy. Across this scope, contributed revenue was €249.5m, an increase of +1.3% over the same period the previous year, with the strong growth seen in recovery and treatment being limited by the delay in service operations (Decontamination).

Internationally, revenue was up significantly: +156% to €80.3m, partly reflecting the contribution of the scope acquired over the period, or +€43.2m.

At constant scope and exchange rates, International revenue rose by +18.1%, illustrating the momentum of the international markets. Overall, the subsidiaries turned in a solid performance compared to the first half of 2018, with the exception of Kanay (Peru), which reported significant project delays, but which we expect will positively impact the second half of 2019.

Improved operating income

At June 30, 2019, EBITDA reached €63.6m, or 19.3% of contributed revenue, an increase of +22.8% over the previous year.

At constant scope, EBITDA came out to €57.0m, up +10.0%, bringing gross operating profitability up to 19.9% of contributed revenue (vs. 18.7% at June 30, 2018).

This improvement reflects good operating conditions in the core business line in France (specifically, positive price effects) and Internationally (market gains), and the effects of the first-time application of IFRS 16, for +€4.3m. It also includes one-time expenses of €(1.2m) related to the Group’s globalization and the effects of the change in the property tax calculation base. Note that EBITDA at June 30, 2018 had benefited from +€1.4m in non-recurring income after the Administration opted out of increasing the property tax bases for 2017 and 2018, while it was subject to a €(1.5)m additional expense at June 30, 2019.

COI stood at €22.1m, an increase of +6.8% compared to June 30, 2018, at 6.7% of contributed revenue (vs. 7.4% at June 30, 2018). It includes the impact of the first-time application of IFRS 16 in the amount of +€0.3m.

At constant scope, COI would have stood at €19.4m, i.e. current operating income of 6.8% of contributed revenue at June 30, 2019, with the increase in EBITDA partially absorbed by the rise in depreciation, amortization and provisions, specifically in France with the creation of new cells in the storage business lines and of operational lease amortization (application of IFRS 16).

Operating Income stood at €21.6m, or 6.6% of contributed revenue, marking a +15.5% increase in OI compared to June 30, 2018 (€18.7m or 6.7% one year earlier).

Change in Group net income

After financial income of €(8.4)m, vs. €(6.5)m, and recognition of the share of income of affiliates as well as minority interests, Group net income stood at €7.6m, or 2.3% of contributed revenue.

Excluding the €(0.2)m impact of the initial application of IFRS 16, it was €7.8m (vs. €9.2m at June 30, 2018).

Solid financial position showing preserved flexibility and a strong liquidity position

Net recognized industrial investments stood at €27.3m at June 30, 2019 (vs. €24.3m one year earlier). This change reflects, beyond the change in scope, the increase in development investments over the period (€9.6m vs. €1.7m at June 30, 2018). Recurring industrial investments were kept under control with regard to changes in scope, at 6.1% of contributed revenue (vs. 7.1% one year ago).

Free cash flow increased very rapidly compared to June 30, 2018, at €35.0m (vs. €11.6m), factoring in the effects of good operating performance, the favorable trend in WCR in connection with the improvement in the Clients line item and recent acquisitions, and the containment of recurring industrial investments.

The conversion rate of EBITDA into cash flow, at around 55%, came out ahead of the target of 35% in 20201.

Available cash amounted to €94.3m at June 30, 2019 (vs. €46.1m one year earlier) and contributed to the clear improvement in the Group’s liquidity position compared to June 30, 2018, at €289.1m (vs. €105.9m at June 30, 2018).

Net bank debt stood at €390.4m as of June 30, 2019 (vs. €318.9m one year earlier). This reflects +€68.7m in net financial investments made in the first half in connection with the acquisition policy, as well as non-cash scope effects of +€25.8m.

Financial leverage (NFD/EBITDA) was 3.2x, slightly worse than June 30, 2018 (3.0x), in light of the substantial acquisitions made during the first half of 2019 and their partial contribution to EBITDA for the period.

Following the various refinancing operations carried out over the past 12 months, the Group’s debt maturity increased from 3.8 years at June 30, 2018 to 6.0 years at June 30, 2019.

1 See the press release of June 26, 2018

Outlook confirmed

Séché Environnement is positioned in France and Internationally on the promising Circular Economy and Sustainable Development markets, where the increasing regulatory requirements and the growing needs of industrial and government clients are development opportunities for the Group, which specializes in material and energy recovery of waste and hazard containment.

In these markets, which are positively oriented over the medium term, the 2019 financial year will nonetheless be compared to an especially strong 2018 financial year, specifically in France, and is part of a more uncertain macroeconomic environment in France and Internationally.

However, the Group remains confident about the solidity of its markets, especially industrial markets, and, in the coming months, the continuation of positive trends from the first half of 2019, in France and Internationally.

In France, Séché Environnement should continue to benefit, in the second half, from solid and buoyant industrial markets, with business volumes in line with the first half.

In hazardous waste management, the renovation work on the Salaise 2 incinerator, which started up in 2019 for a three-month period, will result in its lesser contribution to the Group’s results in 2019. Fully operational in 2020, this treatment and energy recovery facility will be more available and its energy production capacity will be tripled to enable deployment of the Osiris project, an industrial ecology project aimed at the energy recovery of waste generated by businesses in the Osiris GIE Roussillon, the largest chemicals platform in France, in a circular economy approach.

In non-hazardous waste, the second half will be marked by the gradual ramp-up of the Sénerval incinerator, following its restart after a four-year shutdown for asbestos abatement and its return to normal operating conditions and profitability.

Internationally, the second half is expected to feature higher volumes within some subsidiaries that were hampered early in the year by operating delays, specifically:

• Kanay (Peru): the startup of significant decontamination sites means that economic and financial performance for the 2019 financial year should be comparable to that of 2018;
• Interwaste (South Africa): the 2019 financial year is a year of consolidation and strategic positioning. In the second half, Interwaste should benefit from the implementation of new waste management contracts with large industrial clients. For Interwaste, these positive factors confirm the outlook for a 2019 financial year that is comparable to the previous financial year, in terms of both operations and income; Because of the startup, in the second half of 2019, of the Eden Project, a public-private partnership for creating waste recovery and treatment infrastructure in the Mossel Bay region, as well as the strategic repositioning of this subsidiary, we anticipate that growth will resume in 2020;
• Mecomer (Italy): the second half of 2019 will be marked by continued commercial momentum on still-promising industrial markets.

With these excellent prospects, Séché Environnement can confirm its targets for 20192:

• Revenue at constant scope:
  • France: quality growth with respect to the particularly strong performance achieved in 2018;
  • International: steady organic growth, even though operations in certain subsidiaries (Solarca) will be compared to a demanding 2018 basis;
• Financial leverage (Net financial debt/EBITDA) of about 3x in mid-cycle;
• Capacity to achieve, or even exceed in 2019, the main financial targets set for 2020 at the Investor Day held on June 26, 2018.3

Séché Environnement is confident in its ability to improve all of its results in 2019 compared to 2018, at constant scope.

At its Investor Day on December 17, 2019, Séché Environnement will present its new strategic outlook for 2022 in terms of operations and earnings power.

Summary of activity and consolidated results at June 30, 2019

Summary financial statement

Note: Unless expressly stated, the percentages shown in the tables and mentioned in the commentaries below are calculated using contributed revenue4.

Comments on first-half 2019 activity

Published consolidated revenue - Consolidated contributed revenue - Scope effect

At June 30, 2019, Séché Environnement reported consolidated revenue of €342.3m. This includes diversion compensation and other compensation, amounting to €12.5m (vs. €7.4m one year earlier).

Contributed revenue totaled €329.8m at June 30, 2019 (vs. €277.6m one year earlier), reflecting a gross increase of +18.8% for the period.

Contributed revenue at June 30, 2019 includes a €43.2m scope effect resulting from the consolidation of subsidiaries acquired during the period: Kanay (Peru) and Interwaste (South Africa) as from January 1, 2019, as well as Mecomer (Italy) as from April 1, 2019.

At constant scope and exchange rates, the increase in contributed revenue at June 30, 2019 stood at +3.2% compared to contributed revenue at June 30, 2018, at €286.6m.

At constant exchange rates, contributed revenue at June 30, 2018 would have been €277.7m, illustrating a negligible foreign exchange effect of +€0.1m.

Breakdown of revenue by geographic region

Reported consolidated data

During the first half of 2019, activity was supported by the positive trend in most businesses in France and the strong internal and external growth Internationally:

• In France, contributed revenue totaled €249.5m at June 30, 2019 vs. €246.2m one year earlier, reflecting an increase of +1.3% for the period.

Within the recovery and treatment sectors, most businesses did well in terms of activity, driven by the solid showing of industrial markets and the stability of contracts with local authorities (see below: Analysis of revenue by sector and activity).

Services, particularly Decontamination, showed a substantial variance in project starts during the second half, which undermined consolidated performance.

Revenue earned in France accounted for 75.7% of contributed revenue (vs. 88.7% at June 30, 2018).

• Internationally, revenue totaled €80.3m at June 30, 2019 vs. €31.4m the previous year. This increase included a scope effect of €43.2m from the inclusion of the consolidation scope of subsidiaries acquired during the period:
  • Mecomer: with €10.0m in revenue in the second quarter of 2019, up +26.2% compared to the same period the previous year, the subsidiary confirmed its strong commercial momentum;
  • As expected, Interwaste had a weaker first quarter (-12.2% to €32.3m) compared to the equivalent period in 2018 that featured especially high business volumes. This base effect will be smoothed across the current financial year thanks to the brisk business anticipated in the second half.
  • With €0.9m in revenue, Kanay recorded a substantial delay in operations resulting from the “spot” nature of a portion of its operations (decontamination sites). This delay will be made up in the second half by the startup of large-volume decontamination contracts.

At constant scope and exchange rates, growth in International revenue stood at +18.1% compared to the previous year.

Across the historical scope, International subsidiaries recorded high business volumes, particularly SAN (hazardous waste storage in Chile) and SEM (treatment of PCBs in Mexico), which posted solid business momentum, while Solarca’s activity for the period was compared to a strong 2018 baseline.

Revenue earned by international subsidiaries accounted for 24.3% of contributed revenue (vs. 11.3% at June 30, 2018).

Breakdown of revenue by division

Reported consolidated data

During the first half of 2019, the waste recovery and treatment business lines benefited from a continued strong macroeconomic environment in France and solid market gains internationally, particularly across the historical scope.

For instance, the Hazardous Waste (HW) division was supported by a solid showing from industrial markets, which drove treatment in France and internationally.

The Non-Hazardous Waste (NHW) division continues to be supported in France by the implementation of regulations relating to the circular economy, and Internationally by the contribution from the new scope.

• The HW division (64.8% of contributed consolidated revenue) recorded revenue of €213.8m at June 30, 2019, up +23.2%. This strong increase reflects a scope effect (€32.5m) as well as healthy industrial markets in France and Internationally:
  • In France, the division brought in €146.4m in revenue, representing growth of +2.3% compared to the same period last year. Over the period, the division’s growth was driven by industrial markets, still robust in volumes and pricing, which benefited from treatment volumes, while there were some temporary project delays (Decontamination) in services;
  • Internationally, the division’s revenue totaled €67.5m at June 30, 2019 vs. €30.4m one year earlier.

This revenue included a scope effect of €32.5m.

At constant scope and exchange rates, International revenue came to €35.0m, up +14.7% on the first half of 2018. This jump reflects a dynamic market penetration strategy that supports strong growth in treatment volumes, specifically in Latin America (Chile, Mexico, etc.), while Solarca’s volumes (services) are weighed against the brisk business it did in the first half of 2018.

• The NHW division represented 35.2% of contributed consolidated revenue and recorded contributed revenue of €116.0m, up +11.4% compared to June 30, 2018 (€104.1m). The division’s revenue growth included a €10.7m contribution from subsidiaries acquired Internationally during the period. At constant scope and exchange rates, with contributed revenue of €105.3m, the division’s growth amounted to +1.2% compared to the first half of 2018.
  • In France, the division posted €103.1m in revenue, stable compared to the first half of 2018. While the division benefited fully from the implementation of regulations related to the circular economy, which support its recovery and treatment operations, this stability came from the delay in service operations, specifically Decontamination;
  • Internationally, revenue totaled €12.9m (vs. €1.0m at June 30, 2018). At constant scope and exchange rates, the division’s growth (about +120%) reflects, in particular, the major increase in the contribution from SAN in Chile.

Breakdown of revenue by activity

Reported consolidated data

During the first half of 2019, recovery and treatment operations were supported by an economy that was still strong on the industrial markets and by the implementation of regulations pertaining to the circular economy, while in services, Decontamination recorded significant project delays:

• Treatment: revenue from treatment activities totaled €158.0m at June 30, 2019 (vs. €137.3m one year earlier). This increase includes a scope effect of €15.1m. At constant scope and exchange rates, the increase in treatment volumes over the period amounted to +4.1%;
  • In France, these volumes were up by +1.2% to €134.3m. They benefited from favorable market conditions in terms of price and volume, consistent with the good health of the industrial markets;
  • Internationally, revenue totaled €23.7m (vs. €4.7m one year earlier). This strong growth reflects the scope effect (€15.1m) as well as the continued momentum in market gains, particularly in Latin America.

Treatment activities accounted for 47.9% of contributed revenue at June 30, 2019 (vs. 49.5% one year earlier).

• Recovery: with €60.6m in revenue as at June 30, 2019, recovery activities were up +23.4% from the first half of 2018 (€49.1m).

This strong increase includes a scope effect of €4.5m.

At constant scope and exchange rates, recovery activities were up +14.4% over the period, boosted by the sharp increase in energy recovery within the NHW division (incineration business lines).

Recovery activities accounted for 18.3% of contributed revenue at June 30, 2019 (vs. 17.6% one year earlier).

• Services: revenue totaled €111.2m at June 30, 2019 (vs. €91.3m one year earlier).

This strong increase includes a scope effect of €23.6m, tied to the consolidation of Interwaste’s (South Africa) logistics operations.

At constant scope and exchange rates, service revenue stood at €87.6m, a trend (-4.1%) which was attributable mainly to one-time lags in project startups (Decontamination) in France and Internationally.

Services activities accounted for 33.7% of contributed revenue at June 30, 2019 (vs. 32.9% one year earlier).

Comments on consolidated results at June 30, 2019

Change in EBITDA

At June 30, 2019, consolidated Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was up +22.8% from the first half of 2018, at €63.6m, representing 19.3% of contributed revenue.

EBITDA at June 30, 2019 included:

• a scope effect of +€6.6m related to the consolidation of subsidiaries acquired during the period.

At constant scope, EBITDA change tracks the following:

• an impact of the first-time application of IFRS 16 in the amount of +€4.3m;

• positive trade effects (volume and price effects), net of the change in variable expenses, at +€8.4m. The operating margin benefited from healthy business volumes, especially from treatment facilities, but it was compromised by the lesser contribution from service operations in France and Internationally alike;

• the impact of the change to the property tax calculation basis of €(2.9)m: in 2018, the Administration opted out of raising these calculation bases for the 2017 and 2018 financial years, which resulted in non-recurring income of +€1.4m in the first half of 2018, compared to an additional expense of €(1.5)m in the first half of 2019;

• the change in fixed expenses (+€4.4m), which supported the one-time impact of expenses in connection with acquisitions made in the first half, including €(1.2)m in non-recurring expenses.

Analysis of EBITDA by geographic scope

Reported consolidated data

For each geographic scope, the main changes were:

• In France, EBITDA totaled €49.4m, or 19.8% of contributed revenue (vs. €46.5m, or 18.9% of contributed revenue, one year earlier). This development primarily reflects:
  • an impact of the first-time application of IFRS 16 in the amount of +€3.3m;
  • the positive commercial effects (see above)
  • the effects of the new property tax calculation basis – a €(1.5)m additional expense vs. +€1.4m in non-recurring income;
  • an increase in holding charges, some of which were one-time expenses, for €(1.2)m, in connection with the Group’s globalization.

• Internationally, EBITDA totaled €14.2m, or 17.7% of contributed revenue (vs. €5.3m at June 30, 2018, i.e. 17.0% of contributed revenue). This increase was due to:
  • the scope effect of +€6.6m, reflecting consolidation of the subsidiaries acquired in the first half, for gross profit of 15.6% of revenue at June 30, 2019. Mecomer’s strong contribution was partially offset by the weaker performance by Kanay and, to a lesser extent, Interwaste, both of which were hampered by operating delays, but will benefit from this in the second half;
  • At constant scope,
    • the impact of the first-time application of IFRS 16 in the amount of +€1.0m;
    • the distinct improvement in the contribution by SAN (Chile) and SEM (Mexico).

Change in Current Operating Income

At June 30, 2019, current operating income stood at €22.1m, or 6.7% of contributed revenue.

This increase reflects:

• a scope effect of +€2.7m reflecting the contributions of Kanay, Interwaste and Mecomer.
• at constant scope:
  • a one-time impact of the first-time application of IFRS 16 in the amount of +€0.3m;
  • the rise in net depreciation, amortization and provisions in the amount of +€2.6m, in connection with the creation of new storage cells in France and operational lease amortization for +€4.0m (application of IFRS 16).

Analysis of COI by geographic scope

Reported consolidated data

For each geographic scope, the main changes were:

• In France, COI stood at €15.0m, 6.0% of contributed revenue (vs.7.0% of contributed revenue one year ago).

This balance includes the impact of the first-time application of IFRS 16 in the amount of +€0.2m. Excluding that impact, the change in current operating income reflects the increase in EBITDA in France (+€2.7m) offset by the increase in depreciation, amortization and provisions across this scope in connection with the creation of new storage cells in the first half (+€1.9m) and amortization of operational leases under IFRS 16.

• Internationally, COI totaled €7.1m, or 8.8% of revenue. This sharp increase (+€3.8m) mainly reflects the following:
  • The scope effect (+€2.7m), i.e. a current operating performance of 6.4% of revenue, which reflects the differentiated contribution over the period by the acquired subsidiaries;
  • At constant scope:
    • The impact of the first-time application of IFRS 16 in the amount of +€0.1m;
    • The strong performance supported by most of the subsidiaries, particularly SAN (Chile) and SEM Trédi (Mexico).

Change in Operating Income

At June 30, 2019, operating income came to €21.6m, i.e. 6.6% of contributed revenue (vs. €18.7 million, or 6.7% of contributed revenue, one year earlier).

This change mainly reflects:

• the increase in COI (+€1.4m);
• asset depreciations for tangible fixed assets, equal to €(0.7)m;
• the effects of business combinations, in the amount of €(0.7)m;
• the lack of significant expenses related to the performance plan, which had been assessed at €(1.7)m at June 30, 2018.

Change in Financial Income

At June 30, 2019, financial income came out to €(8.4)m compared to €(6.5)m one year earlier.

The change in financial income reflects, in part, the impact of the first-time application of IFRS 16 in the amount of €(0.5)m and, for the balance, the increase in average net financial debt for the period, along with the +0.21% increase in the average cost of gross debt compared to the first half of 2018, to 3.07%.

Note that the rise in the cost of debt comes with a significant extension of its maturity, stemming from the refinancing conducted over the past 12 months, from 3.8 years one year ago to 6.0 years at June 30, 2019.

Change in Corporate Tax

At June 30, 2019, the Corporate Tax expense was €5.0m (vs. €3.1m one year earlier). This increase reflects, in part, the impact of the consolidation of subsidiaries acquired in the first half that did not benefit from tax consolidation.

Change in the Share of Net Income of Affiliates

The share of net income of affiliates was primarily composed of the Group’s share in the income of GEREP and SOGAD.

At June 30, 2019, this totaled €(0.1)m (vs. +€0.3m the previous year). Note that at June 30, 2018, this balance included a contribution of +€0.5m from Kanay, which has been fully consolidated since January 1, 2019.

Change in Consolidated net income

At June 30, 2019, Consolidated net income was €8.1m (vs. €9.2m at June 30, 2018)

After booking the minority interest share in that income in the amount of €(0.5)m vs. +€0.3m in 2017, Group net income stood at €7.6m (vs. €9.2m in the first half of 2018).

This balance was €7.8m excluding the negative impact of the first-time application of IFRS 16 in the amount of €(0.2)m.

Comments on cash flow and the consolidated financial situation as of June 30, 2019

Consolidated statement of cash flows

Reported consolidated data

Net cash from operating activities

In the first half of 2019, the Group generated €64.8m in cash flows from operating activities (vs. €39.5m in H1 2018).

This change primarily reflects the combined effect:

• of the change in the cash flow from operating activities generated (+€12.3m), correlating to the change in EBITDA;
• of the +€8.2m change in WCR over the half-year, reflecting the improvement in the Clients line item and the scope effect;
• of €(0.8)m in taxes paid compared to €(1.7)m one year ago (a cash flow change of +€0.9m).

Cash from investments

Investment expenses (net of sales proceeds collected) amounted to €100.6m for the period and included the financial disbursements for external growth and industrial investments:

Reported consolidated data

Net cash from financing activities

Over the period, the Group subscribed for €65.7m in new borrowings (net of repayments), essentially to refinance acquisitions made in the first half of 2019.

Generation of cash and cash equivalents

Free cash flow increased very rapidly compared to June 30, 2018, at €35.0m (vs. €11.6m), factoring in the effects of good operating performance, the favorable trend in WCR in connection with the improvement in the Clients line item and the scope effect, and the containment of recurring industrial investments. The conversion rate of EBITDA into cash flow, at around 55%, came out ahead of the target of 35% in 20206.

Available cash amounted to €94.3m at June 30, 2019 (vs. €46.1m one year earlier) and contributed to the marked improvement in the Group’s liquidity position compared to June 30, 2018, at €289.1m (vs. €105.9m at June 30, 2018).

Change in net financial debt reflecting the financing of H1 acquisitions

Consolidated net financial debt evolved over the period, broken down as follows:

Reported consolidated data

Financial leverage (NFD/EBITDA) was 3.2x, slightly worse than June 30, 2018 (3.0x) in light of the substantial acquisitions made during the first half of 2019 and their partial contribution to EBITDA for the period.

Following the various refinancing operations carried out over the past 12 months, the Group’s debt maturity increased from 3.8 years at June 30, 2018 to 6.0 years at June 30, 2019.

About Séché Environnement
Séché Environnement is one of France’s leading players in the recovery and treatment of all types of waste, from both industry and local communities.
Séché Environnement is the leading independent operator in France. It is uniquely positioned as a specialist in highly complex waste, operating within regulated waste recovery and treatment markets with high barriers to entry and develops cutting edge hazardous and non-hazardous waste recovery and treatment solutions.
In fact, its facilities and expertise enable it to provide high value-added solutions to its industrial and public authority clients, targeting the challenges of the circular economy and sustainable development requirements, such as:

• the material and energy recovery of hazardous and non-hazardous waste;
• a comprehensive range of treatment solutions for solid, liquid and gaseous waste (thermal, physical-chemical and radiation treatment, etc.);
• the storage of final hazardous and non-hazardous waste;
• eco-services such as decontamination, decommissioning, asbestos removal and rehabilitation;
• the global management of environmental services under outsourcing agreements.

Leveraging its extensive expertise, Séché Environnement operates in 15 countries around the world and is developing rapidly internationally through organic growth and acquisitions. Already operating in Europe (Spain and Germany) Séché Environnement has recently taken a leading position in Latin America (Peru and Chile) and in South Africa.
To date, the Group employs 4,500 people worldwide (including about 2,000 in France).
Séché Environnement has been listed on Eurolist by Euronext (Compartment B) since November 27, 1997.
It is eligible for equity savings funds dedicated to investing in SMEs and is listed in the CAC Mid&Small and Enternext PEA-PME 150 indexes.

Appendix 1: Effects of the first-time application of IFRS 16

The first-time application of IFRS 16 had the following effects on the opening balance sheet:

This had the following effects on the main management balances at June 30, 2019:

Appendix 2: consolidated balance sheet

Appendix 3: Consolidated income statement

Appendix 4: Consolidated statement of cash flows

Important notice

This press release may contain information of a provisional nature. This information represents either trends or targets as of the date of publication of the press release and may not be considered as results forecasts or as any other type of performance indicator. This information is by nature subject to risks and uncertainties which are difficult to foresee and are usually beyond the Company’s control, which may imply that expected results and developments differ significantly from announced trends and targets. These risks notably include those described in the Company’s Registration Document, which is available at its website (www.groupe-seche.com). This information therefore does not reflect the Company’s future performance, which may differ considerably, and no guarantee can be given as to the achievement of these forward-looking figures. The Company makes no commitment on the updating of this information. More detailed information on the Company can be obtained on its website (www.groupe-seche.com), in the Regulated Information section. This press release does not constitute an offer of shares or a solicitation in view of an offer of shares in any country, including the United States. Distribution of this press release may be subject to the laws and regulations in force in France or other countries. Persons in possession of this press release must be aware of these restrictions and observe them.

2See March 12, 2019 press release
3See June 26, 2018 press release
4 Contributed revenue: consolidated revenue published net 1/ of IFRIC 12 revenue (investments made on disposed assets and booked as revenue pursuant to IFRIC 12) and 2/ benefits and compensation paid to Sénerval, net of variable cost savings, to cover costs incurred to maintain continuity of Services to Local Authorities during the asbestos removal work on the Euro Métropole Strasbourg incinerator.
5 Free cash flow: Available cash before development investments, financial investments, dividends, and financing
6 See the press release of June 26, 2018
7 The net debt definition in the banking contract excludes certain categories of debt, notably non-recourse debt, and the effects of the first time application of IFRS 16.

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