SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN
PRIVATE ISSUER
PURSUANT TO RULES 13a-16
OR 15d-16 OF
THE SECURITIES
EXCHANGE ACT OF 1934
March 4, 2003
VIVENDI ENVIRONNEMENT
(Exact name of
registrant as specified in its charter)
36-38, avenue
Kléber
75116 Paris, France
(Address of principal
executive offices)
|
(Indicate
by check mark whether the registrant files or will file annual reports under cover
Form 20-F or Form 40-F.) |
Form 20-F X Form 40-F
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):____ |
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):____ |
| (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. |
Yes No X
|
(If
“Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_______________. |
Explanatory Note
This Report on Form 6-K contains:
| • | a press release containing the Company's Annual Results for Fiscal Year 2002 and |
| • | a presentation made by the Company's management on March 4, 2003. |
Paris, March 4th, 2003
PRESS RELEASE
Solid results in a difficult environment
Cash flow from operations up 13%
Significant reduction in net debt
New contracts and continued execution of strategy
— Consolidated
revenue: +3.3% to €30.1 billion
— Revenue from core
businesses (1): +5.9% to €28.1 billion (+7.2% at constant exchange rates)
— Consolidated EBIT: €1,971 million
— EBIT from core
businesses: +1.9% to €1,847 million (+3.2% at constant exchange rates)
—
Recurring net income (2) increased to €429 million versus €420
million in 2001
— Net income of €339 million compared with net loss of
€2,251 million in 2001
— Cash flow from operations up 13% to €2,780
million — Net debt reduced to €13,066 million
— Net dividend
proposed at Shareholders Meeting: €0.55 per share, payable early May 2003
| (1) | Definition of non-core disposals already completed or planned for sale: US Filter’s non-core businesses: Filtration & Separation, Plymouth, Surface Prep, Distribution US; and Bonna Sabla. |
| (2) | The recurring net income corresponds to EBIT + net recurring financial income (expense) after notional taxes, companies accounted for by the equity method, recurring straight line goodwill amortization and minority interests |
The Supervisory Board met on March 3, 2003, to examine Vivendi Environnement’s financial statements for 2002.
CONTINUED GROWTH, CONFIRMED BY NEW CONTRACTS WON
Vivendi Environnement posted another year of steady business growth despite a particularly difficult international environment. Revenue from core businesses amounted to €28,073 million, up 5.9%, or an increase of 7.2% at constant exchange rates. Two-thirds of the negative impact of exchange rates of €350 million was due to the decline of the dollar. Internal growth from core businesses rose 5%. Due to the disposals completed over the course of the year, revenue from non-core businesses amounted to €2,006 million, compared with €2,614 million at December 31, 2001. Total consolidated revenue for Vivendi Environnement increased 3.3% to €30,079 million versus €29,127 million in 2001.
Vivendi Environnement also won new contracts for municipal and industrial outsourcing services, including several that combined the services of two or more divisions. This commercial performance confirms the success of the company’s strategy and the growth potential of its markets. The new municipal outsourcing contracts underline the company’s ability to capitalize on the international positions gained over recent years by all divisions: Water (Pudong, Indianapolis, Atlanta), Waste (Camden, Singapore), Energy Services (Poznan), and Transportation (Boston).
STRENGTHENED FINANCIAL
STRUCTURE
In line with the commitments made,
net debt was reduced from €14.3 billion at December 31, 2001, to less than €13.1
billion at December 31, 2002, as a result of:
| • | Continued steady growth in cash flow from operations (+13%) to €2.8 billion; after maintenance capital expenditures (stable at €1.3 billion), cash flow available before growth investments rose 36% to €1.5 billion; |
| • | The implementation of a program of non-core business disposals amounting to more than €1.7 billion, which is in excess of the announced target; |
| • | The €1.5 billion capital increase completed last August. |
The reduction in debt was achieved while simultaneously carrying out a significant program of growth investments of €2.4 billion compared with €2.7 billion in 2001.
SATISFACTORY OPERATING PERFORMANCE OF CORE BUSINESSES
EBITDA (1) for the company reached €3,887 million. EBITDA from core businesses posted satisfactory growth of 7.1% to €3,727 million, up 8.0% at constant exchange rates. This increase, which reflects the positive growth trend of new contracts, led to a 0.2% improvement in the EBITDA margin. EBIT from the core businesses rose 1.9% in 2002 to €1,847 million from €1,813 million last year, increasing 3.2% at constant exchange rates. The contribution from non-core businesses was down due to the disposals made during the year. Total EBIT therefore amounted to €1,971 million versus €2,013 million in 2001.
All of the divisions contributed to the growth in EBIT from core businesses. EBIT from Water rose 2.9% to €900 million (up 4.2% at constant exchange rates for core businesses). The good level of business activity in France, the gradually increasing impact of outsourcing contracts won outside of France, and the confirmed turnaround of Vivendi Water Systems offset the slowdown in the industrial equipment market in the United States and higher insurance costs. EBIT from Waste was €385 million (+5% excluding Latin America and at constant exchange rates), benefiting from the initial measures taken to improve profitability. In Energy Services, the 10.7% increase (9% at constant exchange rates) was attributable primarily to the integration of Italian company SIRAM and developments in Northern and Central Europe. EBIT from Transportation increased 3.1% (2.9% at constant exchange rates), with new contracts signed in Europe and the United States more than offsetting the cancellation of the South Central contract in the United Kingdom. EBIT from FCC rose 9.1% (9.4% at constant exchange rates), due principally to its service businesses.
IMPROVEMENT IN NET
FINANCIAL EXPENSE
Vivendi Environnement’s net
financial expense improved nearly 19%, moving from €798 million in 2001 to
€648 million in 2002, reflecting reductions in both net debt and the cost of
financing. The average interest rate was 4.25% in 2002 versus 4.85% in 2001.
(1) EBITDA = EBIT + depreciation + contract renewal expenses
NON-RECURRING ITEMS
Non-recurring items amount to
-€90 million, including restructuring costs of €57 million and €47 million
in provisions and write-downs taken in the first half of the year relating to the
company’s businesses in Latin America, partially offset by the net capital gains as a
result of disposals.
RECURRING NET INCOME
After taking into account the
non-recurring items, Vivendi Environnement’s consolidated net income amounted to
€339 million in 2002 compared with a net loss of €2,251 million last year.
Excluding non-recurring items, consolidated net income was €429 million in 2002 compared with €420 million in 2001 (1). Taking into account the average number of shares outstanding in 2002, recurring net income per share amounted to €1.16, compared with €1.21 in 2001.
The payment of a dividend of €0.55 per share will be proposed at the Shareholders Meeting on April 30, 2003.
Within the context of a difficult business climate, Vivendi Environnement demonstrated its ability to sustain growth and strengthen its market postions. The company will continue its growth strategy in 2003 in line with the priorities defined during previous years: focus on its four, well-matched divisions (Water, Waste, Energy services and Transportation), selective geographical expansion, and growth provided by customers in the municipal, industrial manufacturing and service sectors. The maturation of major contracts recently won and the continued enrichment of the services offered to its customers will contribute to improving the company’s return on capital employed. Growth in cash flow from operations, the continued selectivity of investments and active asset management should enable the company to further improve its financial situation.
Important disclaimer:
Vivendi Environnement is a
corporation listed on the NYSE and Euronext Paris. This press release contains
“forward-looking statements” within the meaning of the provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These statements are based on
management’s current expectations or beliefs and are subject to a number of factors
and uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements, including the risks described in the
documents Vivendi Environnement has filed with the U.S. Securities and Exchange
Commission. Vivendi Environnement does not undertake, nor does it have, any obligation to
provide updates or to revise any forward-looking statements. Investors and security
holders may obtain a free copy of documents filed by Vivendi Environnement with the U.S.
Securities and Exchange Commission from Vivendi Environnement.
Analyst and institutional investor contact: Nathalie Pinon +33 1 71 75 01 67
US investor contact: Brian Sullivan +(1) 401 737 4100
Press release also available on http://vivendienvironnement-finance.com
(1) The recurring net income corresponds to EBIT + net recurring financial income (expense) after notional taxes, companies accounted for by the equity method, recurring straight line goodwill amortization and minority interests.
FINANCIAL STATEMENTS
Consolidated income statement
| (in millions of euros) | 2002 | 2001 |
|---|---|---|
| Revenue | 30,078.7 | 29,126.7 |
| Revenue from core businesses | 28,073.0 | 26,513 |
| EBIT | 1,971.3 | 2,013,1 |
| EBIT from core businesses | 1,847.3 | 1,813.1 |
| Restructuring costs | (56.6) | (49.4) |
| Operating income before goodwill amortization | 1,914.7 | 1,963.7 |
| Goodwill amortization(1) | (327.2) | (2,910.1) |
| Operating income/(expense) after goodwill amortization | 1,587.5 | (946.4) |
| Cost of financing | (680.9) | (764.2) |
| Other financial income and expense | 32.8 | (33.8) |
| Net financial expense | (648.1) | (798.0) |
| Operating income/(expense) less net financial expense before equity and minority interests | 939.4 | (1,744.4) |
| Other income and expense | (59.7) | 38.9 |
| Income/(expense) before tax | 879.7 | (1,705.5) |
| Income tax | (437.3) | (462.3) |
| Net income/(expense) before equity and minority interest | 442.4 | (2,167.8) |
| Share in net earnings of companies accounted for by the equity method | 39.0 | 47.8 |
| Minority interests | (142.2) | (131.2) |
| Net income/(loss) | 339.2 | (2,251.2) |
| Net earnings per undiluted share (€) | 0.9 | (6.6) |
| Net earnings per diluted share (€) | 0.9 | (6.6) |
| Recurring net income | 429.0 | 420 |
| Recurring net income per share (€) | 1.16 | 1.21 |
| Average number of shares (millions) | 370,213 | 346,174 |
(1) Recurring and non-recurring.
BALANCE SHEET – ASSETS
| (in millions of euros) | 2002 | 2001 |
|---|---|---|
| Goodwill | 6,152.8 | 6,795.8 |
| Intangible assets | 3,904.9 | 4,477.0 |
| Tangible assets | 14,540.8 | 14,191.3 |
| Financial assets | 1,969.5 | 1,936.6 |
| Total fixed assets | 26,568.0 | 27,400.7 |
| Total current assets | 15,450.4 | 17,008.6 |
| Total assets | 42,018.4 | 44,409.3 |
BALANCE SHEET – LIABILITIES
| (in millions of euros) | 2002 | 2001 |
|---|---|---|
| Shareholders' equity (group's share) | 6,329.6 | 5,740.0 |
| Minority interests | 2,585.2 | 2,531.1 |
| Subsidies and deferred income | 1,413.4 | 1,483.1 |
| Provisions | 2,946.1 | 3,195.7 |
| Long-term debt | 12,913.0 | 13,134.0 |
| Other long-term liab | 427.5 | 496.6 |
| Long-term capital | 26,614.8 | 26,580.5 |
| Accounts payable | 11,607.7 | 12,939.3 |
| Short-term debt | 3,795.9 | 4,889.5 |
| Total current liabilities | 15,403.6 | 17,828.8 |
| Total shareholders' equity and liabilities | 42,018.4 | 44,409.3 |
CONSOLIDATED CASH FLOW STATEMENT
| (in millions of euros) | 2002 | 2001 | ||
|---|---|---|---|---|
| Cash flow from operations | 2,780 | 2,455 | ||
| Change in working capital requirement (1) | (463) | (1) | 437 | (2) |
| Net change from operating activities | 2,317 | 2,892 | ||
| Capital expenditures | (2,603) | (2,879) | ||
| Financial investments | (1,131) | (1,315) | ||
| Disposals | 1,771 | 598 | ||
| Change in financial receivables | (152) | 80 | ||
| Other | 6 | 124 | ||
| Net change from investment activities | (2,109) | (3,392) | ||
| Change in debt | (1,708) | 1,265 | ||
| Increase in capital | 1,554 | 411 | ||
| Dividends | (300) | (299) | ||
| Other | (116) | (138) | ||
| Net change from financing activities | (570) | 1,239 | ||
| Cash and cash equivalents at beginning of year | 2,090 | 1,528 | ||
| Impact of currency exchange and other | (92) | (177) | ||
| Cash and cash equivalents at end of year | 1,636 | 2,090 |
(1) Including reduction in securitization program in France amounting to €223
million
(2) Including securitization program in France and the United States
amounting to €815 million
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 4, 2003
| VIVENDI ENVIRONNEMENT | |
| By: /s/ Jérôme Contamine Name: Jérôme Contamine Title: Chief Financial Officer | |