December 13th, 2017
WATER TECHNOLOGIES & SOLUTIONS: BOOSTING THE GROUP TRAJECTORY
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WATER TECHNOLOGIES & SOLUTIONS: BOOSTING THE GROUP TRAJECTORY December 13 th , 2017 Disclaimer This presentation contains estimates and/or forward-looking statements and information. These statements include financial projections,
December 13th, 2017
WATER TECHNOLOGIES & SOLUTIONS: BOOSTING THE GROUP TRAJECTORY
2017 Education Day - December 13th, 2017
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This presentation contains estimates and/or forward-looking statements and information. These statements include financial projections, synergies, estimates and their underlying assumptions, statements regarding plans, expectations and objectives with respect to future operations, products and services, and statements regarding future performance. Such statements do not constitute forecasts regarding SUEZ’s results or any other performance indicator, but rather trends or targets, as the case may be. No guarantee can be given as to the achievement of such forward-looking statements and information. Investors and holders of SUEZ securities are cautioned that forward-looking information and statements are subject to various risks and uncertainties, which are difficult to predict and generally beyond the control of SUEZ, and that such risks and uncertainties may entail results and developments that differ materially from those stated or implied in forward-looking information and statements. These risks and uncertainties include, but are not limited to, those discussed or identified in the public documents filed with the Autorité des marchés financiers (AMF). Investors and holders of SUEZ securities should consider that the occurrence of some or all of these risks may have a material adverse effect on SUEZ. SUEZ is under no obligation and does not undertake to provide updates
circumstances that arise after the date of this document. More comprehensive information about SUEZ may be obtained on its website (www.suez.com). This document does not constitute an offer to sell, or a solicitation of an offer to buy SUEZ securities in any jurisdiction.
Disclaimer
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1 Introduction: Boosting the Group trajectory
2 Water Technologies & Solutions: An unparalleled expertise in the fast growing industrial water market
& M. Heiner Markhoff, CEO of Water Technologies & Solutions 4 Conclusion: Accelerating our transformation
A leading digital platform underpinning growth strategy
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Water Technologies & Solutions: A game changer for SUEZ commercial development
Water Technologies & Solutions: An unparalleled expertise enhancing SUEZ’ value creation
Chemical & Monitoring Solutions: Delivering value through integrated solutions and services
Engineered Systems: Helping customers address their toughest water challenges
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JEAN-LOUIS CHAUSSADE CEO of SUEZ
BOOSTING THE GROUP TRAJECTORY
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A transformational move and a catalyst
for future growth for SUEZ
A huge step forward towards a leading position
in industrial water solutions & services
Becoming a unique integrated player
Creating a global leader in industrial water
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Water Technologies & Solutions business:
“the” brick missing to allow the Group to become an undisputed reference across all its businesses
Offer integrated solutions to address
all the resources challenges of our customers Enhancing the Group’s business profile
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Greater access to the large and fast-growing
Industrial water market driven by strong demand & regulatory trends
Group financial profile enhanced,
thanks to a high cash-generative activity A unique opportunity to boost our profitable
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growth profile Value creation for all our stakeholders, particularly our employees and shareholders
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A perfect fit to accelerate our strategy
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SUEZ revenue exposure to international in 2016(1)
Before 33% 67% International Europe After 40% 60% International Europe
SUEZ revenue exposure to industrial clients in 2016(1)
Before 34% 66% Industrial Municipal After 40% 60% Industrial Municipal
€15.3bn €15.3bn €17.3bn €17.3bn
(1) Based on unaudited pro forma, combining GE Water and SUEZ Industrial Solutions
MARIE-ANGE DEBON SUEZ Senior Executive Vice-President in charge of International
AN UNPARALLELED EXPERTISE IN THE FAST GROWING INDUSTRIAL WATER MARKET
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Water Technologies & Solutions:
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2016 Sales(1)
2016 EBITDA(1)
a key player in industrial water with high growth potential
clients
countries
employees
manufacturing and service centers Worldwide
(1) Based on unaudited pro forma, combining GE Water and SUEZ Industrial Solutions; including best estimates of US GAAP conversion into IFRS
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Leverage our know-how and global capabilities to solve our customers’ toughest water, wastewater and process challenges Utilize our deep domain expertise to help customers:
Drive productivity, efficiency and reliability Promote circular economy Reduce environmental footprint
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Solving the toughest water and process challenges of industrial customers…
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… in a still fragmented market
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3.8 2.8 2.7 2.5 2.1 2.0 1.8 1.2 1.1
Ecolab: Global Energy division; Xylem: Based on Industrial Water and Public Utilities portions of Water Infrastructure and Applied Water divisions; Danaher: Water Quality; Solenis: latest available; Evoqua: latest available; Pentair: Industrial water focused divisions of the Flow & filtration solutions and Water quality systems segments
Industrial water competitive landscape
Estimated revenue in $bn
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International team Experienced leadership Integrated team
An international and experienced leadership team composed
applications
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HEINER MARKHOFF CEO of Water Technologies & Solutions
STRONG MARKET DYNAMICS SUPPORTED BY SIGNIFICANT SECULAR DRIVERS
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~$0.3
~$5 ~$1.5 ~$3 ~$1 ~$3 ~$7 ~$3
~$11
~$13 ~$67 ~$17
A large addressable market leaving room
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for further penetration
Potential addressable market > $100bn Currently served market ~$24bn
Industrial process chemicals Membrane base equipment Non-membrane water equipment (engineering, filtration, floatation, …) Other equipment (sludge, oil water separation) Water outsourcing (mobiles, O&M) Industrial water chemicals Disinfection (ozone/UV) Served CapEx / Equipment market Served OpEx market (incl. chemicals) Other Equipment (e.g. traditional filtration, mixing, ...) Other OpEx Total Organic Carbon instruments
Source: Global Water Intelligence, internal analysis
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Non-membrane water equipment
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Relative growth rate
Water
Water treatment chemicals Industrial process chemicals Membrane Other equipment
Profitability
TOC
Market segments with attractive profiles
Source: internal analysis
Disinfection
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Water scarcity: more prevalent need for water reuse solutions
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Focus on energy efficiency driving the future of water and wastewater treatment Growing trends towards industrial water outsourcing Increasing regulatory requirements
Solid underlying market trends
Customers focus on productivity and efficiency gains
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Market is expected to grow
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2020 2016
Global market for industrial water treatment 2016–2020
Source: Global Water Intelligence, internal analysis
by an average c. 5% per annum between 2016 and 2020
In $bn
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Strong underlying drivers lead to increasing demand
Increased production Tightening discharge parameters Unconventional Oil & Gas Increase in produced water Environmental regulations Water scarcity Poor quality near-mine water sources Tightening water discharge regulations Water scarcity Environmental regulation Water scarcity Device demand Contamination prevention Environmental regulation
(1) Only industrial Opex figures available for chemicals Source: Global Water Intelligence, internal analysis
Oil & Gas Upstream Power Mining Oil & Gas downstream/ chemicals Micro Electronics Pharma & Cosmetics
Market dynamics
Global annual expenditures 2016 ($bn) Expected average annual growth 2016 - 2020
18 ++ Food & Beverage
Key drivers
15 ++ 13 + 7 +++ 6 ++ 1(1) +++ 1(1) +++
Water withdrawal regulation Water scarcity Environmental regulations Optimization of production costs Emerging markets growth High mineral prices Total cost of operation Crude variability Discharge limitations/costs Cost-driven market
HEINER MARKHOFF CEO of Water Technologies & Solutions
BUILDING A BUSINESS POISED FOR PROFITABLE GROWTH
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WT&S: delivering full-service across the value chain
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Expert services Engineering, procurement, construction Equipment and systems On site services, product and equipment supply Lifecycle replacement and services Data intelligence and analytics for asset performance Specialty chemicals
Technologies Delivery Models Solutions & Services
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Building on the best technology companies
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to grasp market opportunities
Portfolio build-up Making of GE Water as an integrated company Execute growth strategy Acquired and successfully integrated 5 key major water businesses Leverage integration experience to quickly and efficiently combine
with SUEZ industrial water activities
Exited low return/non-strategic businesses and strengthened technology
& services portfolio
Consolidated and strengthened manufacturing footprint, supply chain,
information systems and management
Investing in digital and analytical capabilities $2.7bn
in 2016
Industrial Solutions
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Chemical & monitoring solutions:
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delivering value through integrated solutions and services
Description Key applications Served segments
Boiler Hydrocarbon Processing Cooling Oil & Gas Production Refining & Chemical Processing Upstream Oil & Gas Power Commercial & Institutional Food & Beverage Primary Metals & Mining Integrated chemical treatment solutions for industrial water & process applications Wastewater
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Engineered systems: delivering solutions through technology
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to help customers solve their toughest water challenges
Description Key technologies Served segments
Membranes Water Outsourcing Zero Liquid Discharge Ozone Ultraviolet A leading equipment and technology solution provider for water and wastewater treatment, water reuse and outsourcing Refining & Chemical Processing Upstream Oil & Gas Power Commercial & Institutional Food & Beverage Primary Metals & Mining Municipal
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40% 60%
A balanced business mix
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Engineered Systems
2016 Pro-forma sales by solution type 2016 Pro-forma sales by segment
Balanced business mix Steady, recurring sales 56% 44% Recurring Non Recurring Chemical & Monitoring Solutions
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23% 16% 16% 14% 9% 8% 6% 6% 2% 19% 22% 7% 7% 45%
A balanced business mix
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Europe North America
2016 Pro-forma sales by major industries(1) 2016 Pro-forma sales by region
Asia-Pacific Latin America Middle-East Africa Power Middle Market Downstream Oil & Gas Food & Beverage Municipal Pulp & Paper Mining Microelectronics & Pharma Petrochemical
(1) Data relating to GE Water scope only
HEINER MARKHOFF CEO of Water Technologies & Solutions
A WINNING STRATEGY BASED ON FIVE DIFFERENTIATING FACTORS
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1/ Strong presence all around the world drawing from an unparalleled supply-chain footprint
Primary focus on global product manufacturing and fulfillment
Significant manufacturing process engineering domain expertise
Manages 45 manufacturing sites and all active facilities
Global operation business processes including customer care, production sales and inventory, asset and fleet management, logistics, lean six sigma and investment mgmt
Manages global product quality, responsible for Cost of Quality
Key
Chemical Monitoring Solutions (CMS) Engineered Systems (ES) Combined
from an unparalleled supply-chain footprint
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Industrial Water Solutions Chemical Water Treatment and Related Services Operations & Maintenance Engineering, Procurement and Construction Equipment & Systems Monitoring/ Analytics/ Digital Services Instrumentation
Present No/Limited Presence
2/ Leading presence across the entire value chain
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Diverse blue-chip customer base across key industry verticals Focused effort to expand strategic industrial Result-oriented value proposition for customers Strong experience and technical sales force 3,000 customer facing professionals
3/ Strong go-to-market capabilities across the globe
Highly recognized brands in the industry (ZeeWeed, GenGard, Sievers, Ozonia, InSight…)
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~400 scientists and engineers with strong domain expertise Global technology footprint with R&D centers across the world Large portfolio of c. 3,200 patents/applications Developing leading edge technologies: Green chemistry Next generation membrane technology Energy neutral water treatment Integrated solutions for Oil & Gas
4/ Strong R&D and innovation capabilities
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5/ A leading digital platform driving value creation
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Increased customer
collaboration
Faster proposal generation Elevated on-site service Streamlined fulfillment Utilize data and
advanced analytics
Optimize performance
Automate data collection
and reporting
24/7 digitized access Customized solutions eCommerce
Customer engagement Customer asset/plant management Workforce & supply chain
Workforce & supply chain
Asset performance management Customer engagement
Digital tools to enhance productivity and maximize value
HEINER MARKHOFF CEO of Water Technologies & Solutions
OUR AMBITION: STRENGTHEN OUR GLOBAL LEADERSHIP
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A clear roadmap for growth
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Field Services and Engineering
Being bolder in selected growth regions Leveraging key accounts and the SUEZ Group to drive business growth Driving portfolio differentiation and competitiveness with accelerated commercialization Creating new service models based on expanded offerings and data/analytics Digitalization of our core processes to gain internal productivity Operating with agility and speed
1 5 4 3 6 2
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Field Services and Engineering
Targeting more than $3 billion of revenue by 2020
Focus on execution will drive mid-single digit growth
2016
CMS ES Synergies
Sales c.$2.7bn 2020
> $3.1bn
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An unparalleled industrial water platform
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Field Services and Engineering
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Addressing a >$100bn market expected to grow by 5%
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Operating in key growing industrial verticals with large blue-chip client portfolio
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Global footprint - Global capabilities with regional execution to deliver
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Leading presence across the entire industrial water value chain Strengthen the global leadership position in the water technologies and solutions sector
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Solid business model built for profitable growth
CHEMICAL & MONITORING SOLUTIONS: DELIVERING VALUE THROUGH INTEGRATED SOLUTIONS AND SERVICES
AMY ERICSON Executive Vice-President Chemical & Monitoring Solutions
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Providing added value services through integrated solutions
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Key financials
2016 total sales: ~$1.1 billion % Recurring: ~95%
2016 Sales breakdown
By geography By end market
9% 20% 6% 3% 11% 51% 11% 18% 25% 13% 3% 9% 21%
Europe Asia-Pacific Greater China Middle-East Africa Latin America North America Chemical process industry Power Refining Commercial & instutitions Upstream Oil & gas Food & Beverage Other
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Providing added value services through integrated solutions
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Segment Key applications
Water treatment chemicals Oil & Gas process chemical treatment Industrial process chemical treatment
fouling and biological growth on operations
and finished product additives
performance, dependability, and business productivity
and production optimization challenges in onshore and offshore field applications Comprehensive portfolio of chemical treatments:
to tackle suppressing dust and reducing air emissions
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Significant opportunities to cross-sell the entire SUEZ portfolio through existing customers
Entrenched customer relationships drive sales
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across full portfolio
Driving growth Business development Maintaining and growing customer relationships with value-add solutions
Long lead sales process: ~6 to 24 months from initial contact to ramp up Daily customers interaction with commercial and field service teams
Digital and monitoring capabilities designed into customer processes driving efficiency, asset protection, and reliability Entrenched relationship with customers resulting in steady stream of business and
for growth Defend customer base, build pipeline, and drive cross-selling across portfolio Less than ~5% customer attrition per annum
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A sound profile enabling recurring activity
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A diversified portfolio of clients
Coveted blue-chip customer base across industry verticals No customer accounts for more than 5%
Result-oriented value proposition for customers
Long-lasting business relationship based on value delivery
Index based mulitple-year contractual agreements Pricing improvements through value creation and service excellence A partner in improving customers' operation
95% contract renewal rate, building the base for steady business baseline
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Water treatment chemicals:
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a leading provider of water treatment solutions
matter experts fully supporting commercial teams (execution at the ground level)
cooling water, for boiler treatment with simplified and best-in-class chemistry, membrane cleaning with lowest total cost of cleaning and restoration
applications with digital solutions for transparency and ease of operations Competitive advantages
Cooling - A leader in halogen resistant chemistry supported with differentiated GenGard technology Boiler – Differentiated film forming condensate and feedwater treatment Membrane chemicals – Cleaners and antiscalant endorsed and tested for SUEZ and competitive membranes Wastewater – Full portfolio of coagulants and flocculants differentiated with NOVUS technology
Key highlights
Service-based business model for specialty chemical applications; trusted provider of digital-based asset protection and process efficiency expertise
Primary industry verticals served
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matter experts fully supporting commercial teams (execution at the ground level)
specific industries: fuels and combustion for Power, scale and dust control for mining, increased output and quality of product for sugar, ethanol, corn milling and breweries for Food & Beverage
formulations, hardware and packaged software
Industrial process chemical treatment
Competitive advantages
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Dust control – Mine to Power plant dust control capabilities with patented oxidation inhibitors Scale control – Best-in-class industrial process antiscalants for mining, FGD, and steel centered around the Patented and differentiated STP dispersant Food process – Class leading technologies with GRAS and FDA approval for sugar and biofuels, corn milling, and brewing industries Fuel treatment – Best-in-class technologies and OEM approved for slagging control from the combustion of fuels. Also helps power plants meet regulatory emission targets
Primary industry verticals served
Key highlights
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Oil & Gas Process Chemical Treatment:
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cost-effective solutions to solve the sector challenges
matter experts fully supporting commercial teams (execution at the ground level)
programs, ethylene compressor, flow assurance to maximize the toughest of crude compositions
equipment and operational service offering for Oil & Gas Competitive advantages
Predictive capabilities – Identify crude issues before they occur and to process more low cost crudes Corrosion control – Maximize product yields while minimizing performance risk Fouling control – Leading edge technology provider for Ethylene market (e.g. high temperature furnace antifoulant) Polymerization control – Optimized program using multiple polymerization inhibitors, building on market leading styrene inhibitor technology Flow assurance – Modelling software database allows dose rate optimisation and up to 50% pipeline CAPEX reduction
Key highlights Primary industry verticals served
Finish product additives – Used to bring product to market and regulatory specification
CASE STUDY #1 PROTECTION OF ASSETS
AMY ERICSON Executive Vice-President Chemical & Monitoring Solutions
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Provide greater flexibility, lower overall cost and improve margins of a large refinery in India
Customer: a large refinery in India
A large refinery in India, operating multiple crude & vacuum unit complexes, wanted to systematically increase the TAN operating limits of their crude feed, as a way to provide greater flexibility in crude selection, lower overall cost of crude, and improve refinery margins Challenges The corrosion inhibition results achieved using Predator 61N while processing crudes in a TAN range
were controlled within acceptable limits. There was no measurable increase in the pressure drop in any
Outcome SUEZ recommended the use of Predator 61N for excellent corrosion inhibition performance, lowest level
and phosphonate salt that has the lowest potential to foul the vacuum column packed beds SUEZ solution
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Considerably improving environmental performance
Customer: a Scottish petrochemical plant
Water cooling system limited to four cycles due to calcium phosphate and calcium carbonate scaling Challenges Increased water cycles in the cooling tower to eight cycles, conserving approximately 400 million liters
Outcome Utilized data analytics on the information received from online monitoring of the plant’s cooling system Based on the intelligence from the analytics, provided integrated solution with GenGard chemistry, TrueSense cooling control and InSight asset performance management system SUEZ solution
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Aligning talent capabilities & coverage to execute faster on imperatives
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2 core products groups 2 key differentiators
Strategies to propel growth through innovation and differentiation
automation/analytics
Fortify and leverage key accounts for growth in priority industry verticals
Environmental stewardship
Drive growth in core
Expand in Oil & Gas Production
Expand geographically
Leverage digital
Grow inorganically
1 2 3 4 5
Driving 3 Key Outcomes for Our Customers Operational stability / reliability Productivity IP protected specialty chemicals
KEVIN CASSIDY Executive Vice-President Engineered Systems
ENGINEERED SYSTEMS: HELPING CUSTOMERS ADDRESS THEIR TOUGHEST WATER CHALLENGES
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Solving customers' toughest water challenges
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Key financials
2016 total sales: ~$1.6bn Large backlog:
2016 Breakdown by subsegment
34% 33% 33%
Products Projects Services 2016 Breakdown by region Europe Asia Middle-East Africa Latin America North America
45% 22% 11% 19% 3%
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Providing full lifecycle water treatment
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sales and build foundation for PROJECTS AND SERVICES
Products combined with process engineering expertise and work with partner EPCs or utilize our
complete solution and build an installed base
Products combined with engineering expertise, field service, and fulfillment to build a recurring revenue stream
a complete LIFECYCLE offering and provides ongoing aftermarket services to the installed base as well as expansion opportunities
Customer Lifecycle Lifecycle Projects Services Products
Opportunities to drive efficiency, reliability, and asset protection through digital monitoring and predictive analytics across all segments and product life cycles
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Products: providing first-class equipment
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Product portfolio Key product Product capabilities
Membranes
Standard equipment
and wastewater applications
glycerin desalting, fruit juice de-acid, ultrapure water, robust water / wastewater treatment; high recovery Analytical instruments
Purification & disinfection
micro-organisms and viruses. Ozone is an efficient treatment for removal
Competitive advantage
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Projects: a leading technology provider for integrated water projects
Key technology Technology capabilities
Membrane bioreactor (MBR)
Zero liquid discharge
and treat the toughest water to meet the most stringent regulations Anaerobic digestion
industry) bio-waste into methane and valuable by-products Oil water separation
and Downstream/refinery Oil & Gas
Competitive advantage
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Technology portfolio
CASE STUDY #2 MEMBRANE BIOREACTOR
KEVIN CASSIDY Executive Vice-President Engineered Systems
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Membranes, a key equipment in water systems
SUEZ is a world leader in membrane bioreactor (MBR) technology with
the entire globe.
Increased productivity Smaller footprint Simplified design Energy savings Guaranteed reliability
ZeeWeed membrane...
A key building block in Membrane Bioreactors
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Customer: a large petrochemical plant in Italy
Built in the late sixties, the plant became one of the most important facilities in Europe. Groundwater started to be contaminated by heavy metals (arsenic, iron and manganese) and hydrocarbons. With intervention from the authorities, the site was forced to reclaim the contaminated areas Challenge Customer was able to reliably treat its contaminated groundwater and reuse it as boiler make-up. In addition, the water reuse plan helped the plant establish a more positive environmental image in the local authority Outcome Providing a ZeeWeed membrane bioreactor system, which combines the proven activated sludge process with the absolute barrier charateristic of ultrafiltration membranes SUEZ solution
An example of application –
Allowing reuse of water in a large industrial site
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Services: a leading provider of water outsourcing
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Mobile
quantity and quality needed on a short-term, emergency, or commissioning basis Build-own-operate
and water reuse serving industries and municipalities Service deionization
in the microelectronics, commercial and light industrial segments Operating & Maintenance
Competitive advantage Key services Technology capabilities Service portfolio
CASE STUDY #3 Water outsourcing
KEVIN CASSIDY Executive Vice-President Engineered Systems
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Providing a mobile trailer for nearly any situation
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Delivering a wide range of water treatment solutions for planned and unplanned events, including:
Emergency outages or equipment failure Planned outages for equipment repair Seasonal demands and product expansion Plant start-ups Changes in raw water quality Sudden changes in effluent specifications Augmentation/expansion of existing water plant Regeneration and cleaning services Drought and hurricanes
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Rapid deployment of mobile assets Production continuity, productivity gains No capital investment to meet seasonal
demands
Reduced time and costs for repairs
and new plant or process startups
Guaranteed water quality and quantity Extended asset life with high-quality water
treatment
Safe operation and regulatory compliance
A mobile trailer can be transported and in service within hours Why choose SUEZ?
Pioneers in mobile water treament with the
largest fleet of more than 800 units in service
Water treatment can occur independent
from weather, limited resources and address restrictions on municipal supply or discharge
Cost of owning complex technology means
that flexibility from Mobile Water treatment can deliver tremendous value
Water purification outsourcing is growing
rapidly which reduces costs and improves reliability
One of the leading providers of water treatment outsourcing
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Customer: a 250 MW power plant in Western US
An example of application –
Allowing savings thanks to our mobile solutions
Contaminant levels: unexpected 80% increase in the amount of total dissolved solids Capacity: levels of wastewater productions much higher than anticipated, with ponds reaching maximum levels after 3 years, while they were planned for 15 years Challenges with their 3 evaporation ponds Shutting down operations or de-rating until the excess of water could be hauled away in trucks, which would be extremely costly Initial solutions Allowing the customer to save $20m Outcome Wastewater reuse and treatment to remove contaminants; entire system was delivered in just days and functioned as self-contained operation in containerized water treatment units SUEZ solution
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Growth trajectory clearly identified
Develop new products Enter into new markets Bring new economic models
Translate design/build capability; contract directly with end users - grow installed base and service opportunity Build and shape most attractive segments: energy neutral, tough-to-treat, Lithium, FGD Expand standardization to reduce design/engineering cost, improving competitiveness in the mid-market (Food & Beverage, Pharma, cosmetics)
1 2 3 1 2 4 3
Expand mobile fleet-based technology offerings: wastewater with membranes… Create funding capacity with external financing to accelerate BOO and O&M growth Extend BOO and O&M reach to include more industrial waste water
management Drive additional services enabled by digital
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Innovate, incubate & commercialize energy efficient technologies: Zeelung, Ozone M Series, Alt brine concentration Advance core membrane technologies: Next gen 500, High flow RO, Sulfate removal NF Expand instrument offering: new segments beyond TOC; Endotoxin Improve portfolio competitiveness; design to value
1 2 4 3
Products Projects Services
Lead with Technology Grow Installed Base Drive Outsourcing
Strengthen the core
Build on core membrane, water/wastewater & disinfection product technology expertise Focus on strength of core WTS technology & product portfolio with selective EP+C scope Improve utilization in mobile, drive recurring revenue streams (BOO, Industrial O&M)
RALPH EXTON Chief Marketing Officer
A LEADING DIGITAL PLATFORM UNDERPINNING GROWTH STRATEGY
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A leading digital platform driving value creation
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Increased customer
collaboration
Faster proposal generation Elevated on-site service Streamlined fulfillment Utilize data and
advanced analytics
Optimize performance
Automate data collection
and reporting
24/7 digitized access Customized solutions eCommerce
Customer engagement Customer asset/plant management Workforce & supply chain
Workforce & supply chain
Asset performance management Customer engagement
Digital tools to enhance productivity and maximize value
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Strong value proposition to customers enabling asset protection, predictive maintenance,
and improved overall system efficiency
Deepens customer relationships and increases retention Enhanced top and bottom-line growth through an integrated thread of digital platforms and initiatives
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Driving growth and profitability via digitalization InSight APM eCommerce Website
highest levels of reliability , efficiency and output
buying experience
to generate leads and drive revenue
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InSight APM
InSight is an Asset Performance Management solution that uses data and analytics to ensure assets operate at the highest levels of reliability, efficiency and output
A leading digital platform driving client retention
active assets under management
customers connected
4,000+
Industries served
20+
countries served
75+
Agnostic IoT connectivity
Visualize, trend, alert, report Cloud-based, analytics driven
CONNECT PREVENT PREDICT
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Delivering financial value and outcomes
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Lead with best-in-class digital innovations that enhance customer experiences, generate profitable business growth, and drive business productivity
Leadership & differentiation
Be recognized in the Water market as an innovative digital leader
Customer experience
Drive customer loyalty by enhancing quality and reliability with digital tools and initiatives
Top line growth & cash flow
Leverage digital to generate incremental revenue and improve cash position
Bottom line productivity
Deliver efficiencies through digitized self-service, advanced manufacturing, and digital engineering tools
for our customers
HEINER MARKHOFF CEO of Water Technologies & Solutions
POISED FOR GROWTH IN EMERGING MARKETS
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Growing emerging markets to more than $1.1bn by 2020
Key
Chemical Monitoring Solutions (CMS) Engineered Solutions (ES) Combined
Europe North America Asia Pacific
$1.2bn $0.6bn $0.5bn
MEA
LATAM
$0.2bn $0.2bn WT&S revenue split by region
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Example: India is increasingly a key growing market
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Rapid growth in population,
urbanization & industrialization leading to increase in water requirements
Twofold increase in industrial water
demand expected in the next 15 years (~50,000 million liters per day)
<50% of industrial wastewater
is currently treated Sound market drivers A market growing by more than 15% p.a.
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Long & recognized experience in India: >450 projects executed over more than 30 years Strong local capabilities: ~ 650 local team with 4 manufacturing facilities & R&D center Significant market share & strong presence in heavy industries
(Power, Refinery & Metals) and Food & Beverage sector
Comprehensive solution provider Driving the adoption of advanced technologies: localized membrane manufacturing
& technology based products and integrated zero-liquid discharge solutions
Leading Water & Process Chemicals solutions provider for Utilities
(Cooling, Boiler, wastewater) & Crude Oil processing
Center of excellence for Engineering and Digital technologies for global requirements
Longstanding presence in the country
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and deep knowledge of local dynamics
Driving strong double digit growth in India
AN UNPARALLELED EXPERTISE IN THE FAST GROWING INDUSTRIAL WATER MARKET
HEINER MARKHOFF CEO of Water Technologies & Solutions
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An unparalleled industrial water platform
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Field Services and Engineering
1 Addressing a >$100bn market expected to grow by 5% 2 Operating in key growing industrial verticals with large blue-chip client portfolio 3 Global footprint - Global capabilities with regional execution to deliver 4 Leading presence across the entire industrial water value chain
Strengthen the global leadership position in the water technologies and solutions sector
5 Solid business model built for profitable growth
MARIE-ANGE DEBON SUEZ Senior Executive Vice-President in charge of International
WATER TECHNOLOGIES & SOLUTIONS: A GAME CHANGER FOR SUEZ COMMERCIAL DEVELOPMENT
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Accelerating Group strategic priorities
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Industrial clients International development Accelerating the trajectory through two levers: top-line synergies & key account management
large industries revenues
Industrial water revenues
generated internationally
MARIE-ANGE DEBON SUEZ Senior Executive Vice-President in charge of International
DERIVING SIGNIFICANT TOP-LINE SYNERGIES
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Breakdown of synergies by initiative
Cross training of services
and product
Proper incentive mechanisms Key accounts and market drive Regional leadership
to develop synergies
Enhanced business offerings Marketing & communications
More than $750m of opportunities identified
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15 200 2019 300 2018 2017 250 2020 400 300 50 Forecasted
$m p.a. Orders funnel $m p.a.
Total of initiatives identified
Initiative description Combined offering
1
Cross-selling
2
Insourcing
3
>$750m of opportunities identified, spread over more than 300 projects
In $m >$750m >$750m
Target: achieve 200m euro p.a. in top line synergy by 2022 Total of opportunities identified Key enablers required to implement initiative
Support from:
Commercial operations Specialized sales SUEZ Group procurement Digital as a business
enabler
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By markets By nature Achieve 200m euro p.a. in top line synergies
51% 36% 4% 6% 3% 20% 13% 3% 11% 8% 5%
1%
12%
1%
26%
Products Projects Services Chemicals Digital O&G Chemical & Pharma EPC F&B Mining & Metals Microelectronic P&P Other Automotive Municipal
A well diversified portfolio of synergies opportunities
2017 Education Day - December 13th, 2017
Segment Amount
Insourcing Several areas of potential in SUEZ plants well underway Anticorrosion, antiscalant, digital monitoring in Energy-from-Waste in Europe & Asia CMS Membranes, membrane chemicals and wastewater treatment chemicals for desalination and wastewater treatment plants ES+CMS Combined offerings 3 dimensions: GE Water + SUEZ IS, WTS + R&R Europe, WTS + Municipal Municipal water client in America – Technologies for Anaerobic Digestion and O&M ES $7-15m Eurasia industrial water client – Ultrafiltration, reverse osmosis and Zero-liquid discharge ES $20m Power client in India – Zero-liquid discharge and pretreatment ES $30-40m Power clients in Europe – WTS newly referenced thanks to a broader range of capabilities in WTS CMS >$10m
Cross-selling:
3 dimensions: GE Water + SUEZ IS, WTS + R&R Europe, WTS + Municipal SUEZ municipal water client in China – Ozone and membranes ES $4-5m US oil & gas clients – Chemicals and BOO ES+CMS $3m
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Significant progress in extracting revenues synergies, with encouraging quick wins
KEY ACCOUNTS MANAGEMENT
MARIE-ANGE DEBON SUEZ Senior Executive Vice-President in charge of International
2017 Education Day - December 13th, 2017
Lower environmental footprint:
Lower CO² emission Lower energy consumption
Reduce water consumption Increase waste recovery Increasing client demand for integrated offers…
Common drivers
waste and water
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Success factors for key account approach
Create for each market, a more comprehensive
Strengthen
with key customers Foster water & waste cross-selling
Become trusted points of contacts at global level and throughout our BUs Better understand customers’ needs to develop tailored & differentiating solutions Global answers provided by capitalizing
Close internal coordination to guarantee level
Build innovative integrated solutions that can be scaled
Significant performance contribution and cross-selling
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… highlighting the need for an integrated KAM approach
2017 Education Day - December 13th, 2017
7 Regional KA led by R&R Europe 13 Regional KA led by WTS Local & National accounts led by BUs Experts support Marketing & Commercial Support
An enhanced global KAM structure to drive innovative offering
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Chemical & Pharma. Oil & Gas Food & Beverage Power Construction Pulp & Paper Mining & Metallurgy
EXECUTIVE SPONSORS REGIONAL KA Activity Level NATIONAL KA GLOBAL KA Group Level
22 Global Key Accounts
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Unlocking the potential of our presence in all key industrial markets
WATER ~ €2.0bn WASTE ~ €1.5bn WATER ~ €0.5bn WASTE ~ €1.5bn
Power Chemical & Pharmaceutical Construction Mining & Metallurgy Oil & Gas Food & Beverage Pulp & Paper
Total revenue
€1.9bn
Total revenue
€3.5bn
Chemical & Pharmaceutical Power Construction Mining & Metallurgy Oil & Gas Food & Beverage Pulp & Paper
Before integration After integration
2017 Education Day - December 13th, 2017
Supplying paper for recycling with adapted quality Recovering fiber along production process Minimizing waste production Full recycling of all valuable waste streams Securing the supply of high quality water and reuse water Securing water discharge with global effluent management Supplying green fuels Optimizing energy recovery from your effluent
Case study: seize new opportunities
90
A fully integrated company positioned
paper value chain, with activities in plastics packaging. 114 sites in 8 European countries, 8,064 employees Sustainable energy sufficiency Zero residual waste
100%
Fiber optimization
Water neutral plant
KEY ENVIRONMENTAL CHALLENGES
SUEZ solutions
with a large pulp & paper customer
CHRISTOPHE CROS SUEZ Chief Financial Officer
WATER TECHNOLOGIES & SOLUTIONS: AN UNPARALLELED EXPERTISE ENHANCING SUEZ’ VALUE CREATION
2017 Education Day - December 13th, 2017
A strategic acquisition financed via a well balanced structure which:
Preserves SUEZ strong investment grade profile (rating A3 confirmed Moody's)
Maintains the Group’s financial flexibility to support development ambitions
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WTS
70% 30%
Transaction structure Key financing terms
€680m equity provided by CDPQ €750m capital increase in May 2017 €600m hybrid bond in April 2017 at 2,875% €1,200m senior unsecured bond in March 2017:
WATER Industrial Solutions
Transaction structure set to preserve SUEZ financial flexibility
2017 Education Day - December 13th, 2017
2016 revenue(1) ($bn)
273 8 281
100 200 300
GE Water SUEZ IS WTS
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2.1 0.5 2.7
0,0 1,0 2,0 3,0
GE Water SUEZ IS WTS
Overview of 2016 pro-forma figures for WTS
2016 EBITDA(1) ($m)
3.0 2.0 1.0 0.0
(1) Based on unaudited pro forma, combining GE Water and SUEZ Industrial Solutions; including best estimates of US GAAP conversion into IFRS
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Key 2016 unaudited pro forma indicators(1)
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27% 35% 23% 14%
EBIT CAPEX
42% 25% 28% 9%
€2.90bn
39% 21% 39% 11% 30% 26% 32% 11%
Revenue EBITDA
International Water Europe Recycling & Recovery Europe Water Technologies & Solutions Others International Water Europe Recycling & Recovery Europe Water Technologies & Solutions Others International Water Europe Recycling & Recovery Europe Water Technologies & Solutions Others International Water Europe Recycling & Recovery Europe Water Technologies & Solutions Others
€17.3bn €1.44bn €0.80bn
1% 1%
(1) Based on unaudited pro forma, combining GE Water and SUEZ Industrial Solutions; including best estimates of US GAAP conversion into IFRS
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WTS: already fully integrated to the Group and ready to deliver synergies
Brand transition from GE Water to WT&S well ongoing Management teams already in place, leveraging on both GE and Suez talents Functional processes and systems integration
Joint go-to-market already in motion, leveraging GE Water expertise
GE WATER INTEGRATION MILESTONES ACHIEVED
2017 Education Day - December 13th, 2017
Confirmed revenue and cost synergies
96
Implementation costs €65m over 2017-19 Cost synergies
Manufacturing Engineering Service operations Purchasing SG&A
€65m of EBITDA p.a. by 2022
Run-rate identified Sources of synergies
Synergies to contribute €90m to EBITDA by 2022
€200m of revenues p.a., representing more than €25m EBITDA contribution by 2022 Revenue synergies
Significant revenue synergies from
cross-selling industrial water activities leveraging on SUEZ geographical footprint
Additional cross-selling opportunities
to be derived from waste activities(1)
(1) Not factored in synergy figures
2017 Education Day - December 13th, 2017
Full benefit of cost synergies by end 2022
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COST SYNERGIES DELIVERY TIMELINE COST SYNERGIES IMPLEMENTATION AREAS Q4 2017 2018 2020 2022
80% of target 100%
Purchasing SG&A Service operations Manufacturing Engineering
volume consolidation
management / Design to Costs initiatives & leverage across entire portfolio
function blueprint towards good practice
scale
mobile and field service
portfolio & supply chain
sites of CMS
manufacturing excellence
projects engineering network
Full benefit of costs & revenue synergies realized by 2022
2017 Education Day - December 13th, 2017
Key early wins support mid-term targets
98
Amount Status Sourcing Categories reviews ongoing $5m p.a. Achieved Supply chain Sites restructuring (e.g. joint offices in China and South East Asia)
Achieved Manufacturing - capacity sharing & insourcing opportunities (Canada)
Achieved Service operations Mobile assets managed as single pool, leading to increased utilization & optimized investments Achieved Optimize number of sites in ES
In-progress
2017 Education Day - December 13th, 2017
Confirmation of mid-term guidance for WTS
99
EBITDA to grow faster than revenue
EBITDA
EBITDA margin
to improve gradually
Expected mid-single digit revenue growth
Topline growth
Reach >$3.1bn revenue by 2020 Revenue synergies phasing included
in the top line growth
Attractive cash conversion profile (>70%)
Cash conversion
Low capital intensity
2017 Education Day - December 13th, 2017
Confirmation of value creation objectives for the Group
100
WTS ROCE above SUEZ WACC in 2020
ROCE
Double-digit accretion based on run-rate cost synergies EPS accretion in 2018(1)
EPS
Positive FCF as soon as 2018(1)
FCF
(1) Excluding integration costs
2017 Education Day - December 13th, 2017
21.9x 21.5x 18.1x 22.1x
5 10 15 20 25
Xylem Ecolab Kurita Evoqua
12.5x 10.0x
5 10 15 2016 EBITDA 2016 EBITDA + cost synergies
EV/EBITDA FY+1 (2016) Today (2017e) EV/Op Cash flow FY+1 (2016) Today (2017e)
Compelling valuation confirmed by peers multiples
101
Synergies
Acquisition multiples Peers multiples
17.0x 16.0x 9.0x 16.0x
5 10 15 20 Xylem Ecolab Kurita Evoqua
17.4x 12.8x
5 10 15 20 2016 Op CF 2016 Op CF + cost synergies
Synergies
2017 Education Day - December 13th, 2017
WTS contribution in Q4 2017:
Revenue: $550-600m EBIT: > $50m
Full-year 2017:
Transaction costs of €40m, below EBIT
WTS contribution in 2018:
Revenue: c. $2,800m (+3-4% gross variation), supported by 4% growth in orders in 2017 EBITDA: c. $290m, including $20m of transitory costs EBIT: c. $200m, including $20m of transitory costs(2) c. $80m of integration costs booked below EBIT
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2018: dedicated to the implementation
(1) Combination of GE Water and SUEZ Industrial Solutions, including best estimates of US GAAP conversion into IFRS (2) Excluding purchase price allocation, to be set by the end of H1 2018
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1
WTS, a new business unit to enhance growth and financial profile of the Group
2
Confirmation of attractive mid-term guidance (revenue, margin, cash)
3
WTS already fully integrated to the Group and ready to deliver
4
Significant revenue and cost synergies confirmed
5
Compelling valuation confirmed by further increase in sector multiples
6
Strong value creation for SUEZ shareholders at EPS, ROCE and FCF level
WTS: a unique platform to boost value creation
JEAN-LOUIS CHAUSSADE CEO of SUEZ
ACCELERATING OUR TRANSFORMATION
2017 Education Day - December 13th, 2017
Building a global leadership position in industrial water
105
WTS and SUEZ Group Commercial and cost synergies Meet financial targets Driving growth with key accounts
Value capture Leverage SUEZ Profitable growth Integration
2017 Education Day - December 13th, 2017
Growing the company around two strategic pillars
106
Delivering value-added services and solutions Leverage know-how to manage infrastructures
World-class portfolio of products, services and solutions Differentiating offers through our innovation capabilities Low capital intensity segment Large perimeter of expertise and complexity of projects
limits competition
Long-term and profitable contracts Opportunities to extend this business models to new
areas: irrigation networks and dams, BOO for industrials, large organic waste to energy facilities
2017 Education Day - December 13th, 2017
Sophie Lombard E-mail: sophie.lombard@suez.com Tel: + 33 (0)1 58 81 24 93 Julien Desmaretz E-mail: julien.desmaretz@suez.com Tel: + 33 (0)1 58 81 24 84 SUEZ Tour CB21 – 16, place de l'Iris 92040 Paris La Défense Cedex Contacts
109
Financial communication
2017 Education Day - December 13th, 2017
An international and experienced leadership team composed
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CEO Heiner MARKHOFF Chemical & Monitoring Solution (CMS) Amy ERICSON Engineered Systems (ES) Kevin CASSIDY
CMS Europe leader & Europe integration Julien ROJO CMS North America Nancy WHITE Global Products Thomas BUER Global Services Karine ROUGE Global Projects Gabriel TOFFANI Global Sales Chris JEFFERY
Business development through 4 regions Greater China Tim HUANG Latin America Eduardo PAVANI India, Asia, Pacific Hoshang SUBAWALLA Middle-East, Africa Pierre PAULIAC Myron VAN ERT
8 transversal functions
Finance: Mamta PATEL Value Capture: Stéphane BOYER HR: Brian DAVIES Sourcing: François BACALOU Marketing, Communication, Strategy, Business Development & Digital: Ralph EXTON Supply Chain/Manufacturing: Istvan ZSIRAI/Martin KOSTO Legal and Ethics: Deborah LLOYD Technology and Innovation: Tom STANLEY IT: John KOCHAVATR