SUEZ doubles investments to consolidate position in water and waste management
Sabrina Soussan, SUEZ Chair and CEO. [Photo provided to chinadaily.com.cn]
SUEZ doubles its investments to consolidate its position as a leading player in water and waste management
SUEZ has unveiled on Tuesday its strategic plan for 2027:
The Group will focus on its core businesses, including water and waste, and develop its international footprint;
The Group will create values for all its shareholders through innovation and investments alongside its clients;
The Group will target an annual average growth in revenue of between 4 percent and 5 percent as well as average annual growth in EBITDA in excess of that of its revenue;
Faced with new environmental and energy challenges, the Group will invest, alongside its clients, more than an additional 860 million euros ($821 million) compared to the previous period and will increase its research and development budget by more than 50 percent.
The acquisition of SUEZ R&R in the United Kingdom is a major strategic step forward for the Group, consolidating its position as a global player in the waste market;
Following this acquisition, SUEZ's revenues will reach 9 billion euros and the Group will have 44,000 employees;
The record contract announced on Tuesday for a new wastewater treatment plant in India, the largest ever signed by SUEZ in the country, illustrates the Group's ambition to grow in targeted, emerging geographies.
Since the start of 2022, the new SUEZ Group has successfully demonstrated its resilience and its ability to pursue its development. Bolstered by the support of its shareholders—Meridiam, GIP, Caisse des Dépôts and CNP Assurances—SUEZ has notably made several strategic acquisitions to strengthen its position in key markets and business lines: IWS in France (Industrial Waste Specialties, hazardous waste treatment), EnviroServ in South Africa (waste management) and SUEZ R&R in the United Kingdom (waste recycling and recovery activities).
On Tuesday, SUEZ presents its strategic plan for 2027 with the ambition of becoming the trusted partner for circular solutions in water and waste.
The strategic plan provides for development centered on value creation through the contribution of proven solutions, increased innovation and strengthened investment capabilities to help SUEZ's clients tackle growing environmental challenges.
The Group's strategic plan is based on three pillars:
1. Focus on the Group's key activities and markets
In terms of activities, the Group will focus its presence on the businesses of the water and waste markets.
In terms of geographies, the Group will pursue its development in certain markets that are particularly buoyant—United Kingdom, Italy, China, India, Australia, Middle East and Africa—thereby benefiting from a balanced exposure between mature markets focused on innovation and emerging markets with strong growth. By 2027, the Group aims at generating approximately 40 percent of its revenue in international markets.
The acquisition of the former SUEZ R&R activities in the United Kingdom, the third largest player in the waste market which has successfully positioned itself in recycling and energy recovery, will strengthen SUEZ's leadership in new methods of waste recovery and diversify its geographic footprint. This represents the Group's third acquisition in eight months and the largest in size.
2. Invest and innovate in solutions that differentiate the Group
SUEZ intends to differentiate through its unique expertise in infrastructure construction and recognized leadership in innovation, digital technology and customer experience.
Innovation and R&D will be strengthened to develop new solutions for preserving water resources, combating pollutants, recycling, producing green energy from waste and reducing our customers' carbon footprint. The Group will increase its dedicated research and development budget by 50 percent.
Lastly, on the strength of its leadership in connected solutions ("Aquadvanced" to manage plants and networks, smart meters, etc), the Group will continue to invest in digital technology and technologies that play a key role in preserving increasingly scarce resources (detecting leaks in water networks, advising users on energy sobriety, etc.) with the goal of doubling its revenue from these activities in five years.
Committed to its ambition to invest alongside its customers, in an effort to address new environmental and energy challenges, the Group will invest an additional 860 million euros compared to the previous period.
3. Create value for all of the Group's stakeholders
Through its strategy, SUEZ seeks to create value for all of its stakeholders:
- With respect to shareholders, the SUEZ strategy aims at achieving growth in profitability in excess of growth in revenue.
- With respect to the Group's employees, SUEZ conducts its activities as part of an affirmed shareholding policy. In line with the commitment made by the Group's shareholders to have 10 percent of the capital held by employees within the next five to seven years, SUEZ launches an employee shareholding plan. The Group has set a target of 3 percent of its capital to be held by employees from 2022. Where appropriate, three directors representing employees (one representing employee shareholders, two representing employees) would sit on the Group's Board of Directors.
- In addition, the Group is renewing its societal commitments. First, through its inclusion initiatives, notably implemented by its social inclusion subsidiary, Rebond: the SUEZ subsidiary celebrates its twentieth anniversary in 2022, with a total of 10,500 beneficiaries, 70 percent of whom have found a stable job or obtained a recognized qualification. Second, SUEZ is committing to invest in developing skills and competences. The Group has also reaffirmed its support for Fondation SUEZ: with its annual budget of nearly 3 million euros, the foundation supports projects for access to essential services (water, sanitation and waste) in emerging and developing countries as well as social inclusion projects in France. Lastly, the partnership with the FDJ-SUEZ women's cycling team testifies to the Group's commitment to promote diversity and equal opportunities.
As part of its strategy, the Group also aims at maintaining its leadership in sustainable development. By the end of 2022, SUEZ will publish its sustainable development roadmap, outlining its contribution, ambitions and quantified targets for climate, nature conservation and social matters. 20 percent of Group executive long-term compensation will be linked to the achievement of environmental, social and governance criteria.
Overall, in financial terms, the implementation of this strategy will result in annual growth in revenue between 4 percent and 5 percent and annual growth in EBITDA in excess of that of revenue.
A new, simplified, more agile and customer-focused organization will put this plan into action. It will be structured around the Group's two businesses, water and waste. This new organization will be based on a culture promoting entrepreneurship and team empowerment. It will also promote commercial and operational excellence.
The Group's strategic plan is firmly rooted in a vision of its contribution to society, enshrined in its purpose. SUEZ is convinced that through its water and waste activities, it can play a vital role everywhere it operates in improving people's quality of life on a day-to-day basis. Developed in collaboration with the Group's stakeholders, employees, customers and partners, the Group's purpose will be translated into concrete and quantified targets for all of its activities. Incorporation into the company bylaws will be subject to approval by the Annual General Meeting of Shareholders held in the first half of 2023.
Faced with growing environmental challenges, each day, for more than 160 years, we have been acting in support of our clients and partners to deliver essential services that protect and improve the quality of life wherever we operate.
United by passion for our work as well as inclusive culture and team spirit, we innovate to conserve water and create value from waste, in the form of energy and recycled materials. We promote and implement responsible behaviors, more efficient technologies and circular solutions to recycle and make the best possible of the finite resources of the Earth.
Deeply rooted in our communities, we are committed to providing people and the planet with the resources for a common future.
At the presentation of the strategic plan, Sabrina Soussan, SUEZ Chair and CEO, commented: "The water and waste markets face historic challenges, characterized by the environmental emergency and a paradigm shift in energy. My ambition is for SUEZ to become the trusted partner for circular solutions in water and waste. On Tuesday, SUEZ has set a clear direction to achieve this: an ambitious and sustainable growth strategy to generate an annual growth in revenue between 4 percent and 5 percent by 2027, based on unprecedented investment capabilities and an increase by 50 percent of our R&D efforts. The acquisition of SUEZ R&R in the United Kingdom is fully in line with this strategy. The award of the water treatment contract in India, which marks the largest signed to date by the Group in the country, also reflects our progress towards becoming a diversified and geographically balanced company. Strengthened by our history, the expertise and passion of our teams, and the unwavering support of our shareholders, we enter a new phase for SUEZ with confidence and determination".