Good morning, ladies and gentlemen. I'd like to thank you for taking part in this presentation for the half yearly results of Séché Environnement. At my side, you'll recognize Maxime Séché, CEO, and Baptiste Janiaud, CFO. This is a meeting which is in an unusual format for us. Due to the health risks, we preferred to make this presentation only via video conference. In the first half, it was an unparalleled time, but it showed just how resilient we are, how agile our organization is, and how strong and sound our financial structure is. After the first few months of good growth, we then had, in the second quarter, to cope with the pandemic and lockdown measures, which impacted our organization as well as our clients' organizations. We quickly adapted.
Specifically, very early on, we set up the measures to protect employees and reorganized, such as remote working, and we also did team rotations systematically. I'm very pleased we were able to protect the health of our employees. That was the number one reason for these actions. Furthermore, we had a daily commitment, courageous commitment, on behalf of all of our teams to maintain business continuity, to be sure to continue serving our clients. I would personally like to thank them and tip my hat to them. They were faultless. Results of first half 2020 do feel the effects of this unusual time, but also show the fact that our financial situation is quite sound. In spite of the non-recurring drops in some of our activities, the group, at the end of the period, is displaying a strong position of liquidity, cash on hand, as well as controlled financial flexibility.
These results don't represent our expected performance for the full period, full year 2020. Nor are these representative of our medium-term outlook, which looks good in markets where there are lots of opportunities for further development. Our markets are particularly resilient. Our growth model is highly responsive, able to move as opportunities arise. We've got an agile organization to actually turn this into economic, financial, and environmental performance. Maxime Séché and Baptiste Janiaud will come in on all these points in greater detail. After this first half, which was highly unusual, we can confirm our annual objectives and beyond. Yes, Séché Environnement's markets are highly resilient markets. The crisis has shown by controlling hazardousness of waste, Séché Environnement is in essential business areas, i.e., of managing environment and health risk. We're talking about strategic activities important for the continuity of any country. 65% of our clients are in industry.
They're also involved in strategic activities in markets such as energy, health, pharmaceuticals, chemistry, and so forth. This customer base maintained their level of activity during the crisis, whereas other clients of ours, such as local governments, saw recurring contracts. We continued our activities, various business continuity plans, site by site. There was a drop in activity in some of the business lines. The business lines such as services in France and internationally, a couple of examples, such as decontamination, chemical cleanup, we saw some declining job sites here. Non-hazardous waste sorting from time to time and locally saw dips in volumes, especially in this half-yearly period. It's mainly our energy recovery activities that sometimes saw a negative due to the Strasbourg resumption of the incinerator.
As of June, we resumed our pre-crisis activity levels in France and in most countries internationally, with a very strong rebound in volumes in the activities I just alluded to. To date, the only exception is Latin America, where the health crisis began later than it did in Europe. All in all, we're seeing a moderate drop in activity in the first half, mainly impacted by the drop, which is non-recurring, in energy recovery. Ditto for operating margin, same point. We were responsive in this group as in the very beginning of the crisis. Thanks to the responsiveness, we were able to limit extra costs due to changes and a new way of organizing ourselves. The activity mix and the waste mix shifted, sometimes non-recurring, and changed as business resumed and things normalized in June.
Here as well. The main impact on these half-yearly results are a drop in contribution from energy recovery. Furthermore, our financial priorities have been further strengthened, inter earlier, to preserve the soundness of our balance sheet, the quality of our balance sheet, and level of liquidity. We've controlled spending, WCR, and costs, enabling us to generate cash flow at a very high level. If we look at our balance sheet, really things are unchanged compared to closing 2019. Financial debt even went down versus 31 December 2019. Thanks to this financial soundness and the recovery and activity we've seen as of June, I'm bullish. I'm very positive as to our ability to smooth out over the second half the effects of the health crisis. The second half of 2020, indeed, should see a resumption in activity levels and operating income in line with H2 of 2019.
This is in line with our objectives for results in 2020. I'll let Maxime and Baptiste go through these in greater detail. Furthermore, Séché Environnement is moving on to 2021, strengthened in its trajectory ranging up toward 2022. 2020 doesn't represent our medium-term outlook, which is good in markets where there are many opportunities for further development. The positive outlook is the result of our growth strategy as well as our sophisticated positioning in closed markets, where barriers to entry to circular environment and fighting climate change in France, internationally, where barriers to entry are high. In France, Séché Environnement's offers are well-received by local governments and industry, are very popular. Solena in Aveyron is an example. Solena is a new site we'll be opening in Viviez in Aveyron under a contract with the municipality with a 30-year timeframe. The site is at the département level.
It's for a full valorization recovery chain for household waste and other types of waste and business waste as well in Aveyron, making it possible to substantially reduce residual waste volumes. Aveyron previously had no local solution for waste produced on its territory and had to send it to neighboring départements for processing. With our local partner, the Sévigné group, we've been able now to propose a relevant, hard-hitting solution, very popular by local governments, making it possible to use in this [département] a circular economy, organize a circular economy, which respects the environment even more and limits greenhouse gas emissions. This is a real source of pride for us to help provide this type of installation for recovery of non-hazardous waste. This is essential for circular economy in France. Internationally, in Italy and in South Africa, inter alia, we've got projects for development which are very much intact.
In Italy, doubling capacity of processing Mecomer. This will come online in 2021 fully. Commercial and financial performance of Mecomer, we'll be looking at during our presentation later. In South Africa, due to the health crisis, we suspended in-capacity investments which we'd slated for the first half. Needs for local governments and industry remain intact and remain very big indeed. Objectives for development in the region and opportunities for development are intact as well. We will come back to you as we move on these and actually bring projects forward. You also know we've got projects for developing in Latin America, such as Chile, which will be implemented as soon as the situation normalizes. I hope that'll be as quickly as possible, and of course, even just, of course, speaking for the sake of the population.
I very much hope we'll meet our targets for 2022 for growth and profitability, which we outlined for you last December. The objectives target, among others, EUR 750 million-EUR 800 million in revenue with an EBITDA 21%-22% of revenue. This target for growth and profitability should also make it possible for us to reduce debt significantly, like- for- like scope, and strengthen shareholder value creation. This is the message of confidence that I wanted to deliver to you today. We're confident, and we're all committed to turn this into economic performance, financial and environmental performance. I'd now like to hand the floor to Maxime Séché.
Thank you very much. Good morning, everyone. Thank you for taking part in this meeting, in spite of the fact we had to organize it differently from how we do things usually.
To go back to the impact of the health crisis on our activity and our outlook. COVID-19 crisis was sudden and abrupt, but its impact is limited on our financials in the first half, both in terms of revenue and operating income. We can begin the fiscal 2021 on our 2022 trajectory, as we announced it during the Investor Day on 17th December 2019. The limited impact of COVID-19 is first and foremost, due to the features of our organization. We are highly responsive. Our decision-making process is not lengthy, it's short. We've got operationals on the field and support functions with a clear link. The way we're organized has helped us be highly responsive. From the very onset of the crisis, we defined priorities. Firstly, to maintain the health of our employees.
Secondly, business continuity, ensuring security all the while, and maintaining financial solidity in the face of uncertainties as to how long the crisis might last. Inter alia, we focused on preserving cash. Together with our teams, we also set up, before lockdown in France, business continuity plans with our business unit and subsidiary managers. We also started organizing remote work from home to protect our employees' health. We also organized employee rotation. We staggered working times. We cleaned locker rooms more, and so forth, for sake of health conditions on site. We organized our IT systems to be in line with this new organization, using new tools, enabling us to really boost communication among the various teams using technology.
With this responsiveness, we were able to manage the crisis and its consequences in real time, able to adapt the group to any and all new health requirements, industrial and other regulatory or commercial needs. All sites considered to be essential activities in France or internationally continued to operate normally. Therefore, we have an agile organization, as we can see on the chart. The maximum impact is focused in April and May. This was during the lockdown in France and most of our other locations. Latin America entered into the crisis period in June. We also were affected by a non-recurring event having to do with energy recovery impacted in the first half. Since June, this activity has rebounded very substantially, and the rebound continues. Joël just mentioned the resilience of our markets is indeed true.
Our organization and our tools are able to respond immediately to an uptick, a rebound in markets. We've also controlled operational impact. Cost-cutting measures were and will continue offsetting most of the additional costs relating to organizational changes. The effects of activity mix and waste mix are smooth and have been since resumption. We're expecting return to normal in the second half. We controlled financial impact, thanks to various things we were able to leverage. We redefined our investment priorities. Without reducing our ability to process and secure operations, we cut our investments in maintenance by 5.5% of revenue, reaching 5.5% of revenue instead of 6.1% of revenue previously. Investments in development were put on the back burner, suspended, except if there were commercial or strategic reasons to do so, such as Mecomer. The change in WCR, we kept a careful eye on and managed WCR.
We were very assertive in collections. We've got a sound balance sheet. We've got no significant debt to be paid back before 2023. This demonstrates our financial solidity. Baptiste will talk to us about the impact of business resumption on our financials in the first half. Good level of activity and results expected in the second half enable us to confirm our 2020 targets. Due to the dynamic recovery in terms of overall activity, second half of 2020 should be similar to 2019 in terms of revenue and operating income. In the second half of 2020, we're expecting good growth momentum, both in France and internationally, and continuation of positive commercial effects. Contributed revenue of 2020, we therefore confirm, as announced in July, bottom of the initial range of EUR 650 million-EUR 700 million, the lower end of the range, due to the impact of the first half.
Return to growth in most business lines enables us to target an EBITDA of between 19% and 20% of contributed revenue. Cash generation further strengthened. Financial leverage should remain stable at 3.3x EBITDA. Expecting a return to this of 3x as soon as 2021. Thanks to the group's efforts, particularly its organizational efforts as well as its overall positioning, we are confident in return to growth and profitability in the second half of 2020 and after that. Now I'd like to give the floor to Baptiste, who will go through in detail our results and add to our targets in 2021.
Thank you. Very much so. I suggest we move straight to the customary slide that presents the group economic and financial performance on the major performance indicators. Revenue, contributed revenue reach EUR 313 million in the first half, down 5%. That's a EUR 16 million drop. The negative impact focused in Q2, April, of course, and May, primarily. EBITDA, down EUR 9 million. That impact that is down the income statement for net income group share close to zero in the first half. Very prudent management of cash flow, as was said, both on the investment front and working capital requirement. Free cash flow of the group that is improved, allows a deleveraging, net deleveraging of EUR 9 million, both from a banking standpoint and IFRS.
As compared to the debt of December 31st, 2019, and accounts that were impacted, as we can see, during the Q2 as a result of lockdown, combined with a good Q1 and impacts which overall are limited in terms of the balance sheet. Very briefly on activity that was presented to you at the end of July on revenue of EUR 313.2 million. There's a slight decrease, 5.1% versus June 30th. That's a scope impact of 13.6% positive scope effect. That's the contribution of Mecomer in the Q1. It wasn't consolidated same time last year. Scope effect strong. Forex effect that we indicated, EUR 4.5 million. This is due to the depreciation of certain currencies. The South African rand down 18% versus the euro, the Chilean peso down 15% versus the euro, and the sol Peruvian, 8% depreciation versus the euro. Like- for- like, excluding Forex on a reported basis, EUR 9.1 million.
That's 10%. Of course, the situation varies depending on divisions and geographies on the subsidiaries. As we generally present, you have the development by division. Very dynamic Q1, + 10%, strong momentum of industrial markets and a low point of activity in Q2, EUR 140 million, down 19%. When we look by industry, there's a marked increase in the hazardous waste division, in Q2, - 25%, essentially internationally, due to a cycle lag in the health crisis, worksite business particularly hard hit and activities where lockdown was very strict. Latin America, far stronger resistance. Non-hazardous waste, Q2, - 7.3%, particularly true for France, with a rapid rebound in volume and service activity after lockdown was lifted. When we combine that with international versus France, in the French side, we obviously have revenue EUR 236.7 million. That's down 5.1%.
Strong industrial markets, local authority markets resilient, the stopping of pollution remediation sites. Of course, as of May, June, had a positive contribution with a contribution of 2.8% versus June 2019. On the international front, as I said, that was particularly impacted on this first half with a scope effect of EUR 13.6 million, as indicated, Forex negative currency effects to the tune of EUR 4.5 million, and situations that are contrasted with a decrease in spot markets. PCB in LATAM, as we indicated during the first quarter, worksite activity, chemical cleaning sites, Solarca down 48% revenue during the first half. A situation in Latin America, Chile, and Peru impacted during lockdown. We note the good performance of South African markets with Interwaste. First, EUR 28 million, down 3% excluding FX, which is a very commendable performance.
Turning to mix activity, mix waste, we see that overall we have solid performance from activities excluding recovery on treatment, slight lag versus storage, offset by a Mecomer scope effect on recovery. As indicated, we had a loss at Sénerval on the turbo alternator that prevented producing energy recovery for EUR 7.6 million, and for hazardous waste imports, lower imports of PCBs. Service, good resistance with negative activity, chemical cleanup, as I indicated, and all in all, a very positive contribution from emergency intervention services, as we already indicated in the second half of 2019. Overall, a neutral effect on the services activity. Moving to the operating income, starting with EBITDA, we see that by activity and by geography, a trend in France that shows a lag on the treatment side, -2.12%.
Recovery flat, decrease in energy recovery offset by very good performance of purification markets, not more revenue, but more EBITDA dynamic activity of emergency intervention services with good work site dynamics in Q1 and since the resumption in June. International, a scope effect EUR 2.6 million, Mecomer, Forex EUR -0.6 million, and services down in the Q1 for EUR 4.1 million. That's due to Solarca EBITDA going from EUR 63.6 million- EUR 53.8 million. When we move and review EBITDA with the scope and price volume effects, what's quite interesting, aside from the volume effects that we reviewed both for treatment and recovery, we have markets that are trading well with positive price effects, EUR 9.5 million, which is a key element that reflects our confidence in our ability to reach our targets in 2020.
Of course, faced with that, there are costs that were linked to the crisis, additional costs in terms of waste mix weighing on profitability, operational additional costs that allowed us to weather the crisis without problem. Moving to current operating income, I'll be very brief because the COI development is primarily due to EBITDA development over the period. We have a slight improvement to EUR 1 million appropriation due to our historic policy, and then other income and cost due to the write-backs on receivables and employment tribunal disputes. Good balance and good cash in performance over the period. Moving down the income statement, we have the non-current income to the tune of EUR 6 million because of the Black Empowerment legislation in South Africa.
Investment income impacted to the tune of EUR 2 million because of the interest expense of EUR 9 million because of the increase in the gross debt through 2019. Forex loss of EUR 9 million to the drop in the South African rands and investments of EUR 0.2 million investment down, and net income close to zero over the period. Containing industrial investment is a key factor in managing our cash flow. We had a very detailed management of CapEx over the first half. On two issues, we were very stringent on maintenance CapEx with the necessary CapEx to maintain our production facility, EUR 17.4 million, reflecting our flexibility on that item and heightened selectivity on development CapEx that weren't neglected during the period. Building the new Mecomer capabilities, et cetera, which will create value going forward. Cash flow generation, as indicated, was preserved.
A cash flow management that is up EUR 4.5 million in spite of the decrease in EBITDA and recurring cash flow, thanks to active management of receivables that obviously led to an improvement in WCR and also to a mechanical decrease in revenue. Tax payments increase linked to 2019, which was a good year in terms of earnings. This leads to a decrease in net financial debt. On this slide, you can see the same trend under IFRS. Net debt goes from EUR 399 million- EUR 390 million, a decrease of EUR 9 million due to the free cash flow generation that is impacted negatively by additional prices linked to the acquisition in 2019 and the 10% of Solarca, which will increase net income group share in target. Liquidity remains very strong. The group has liquidity of EUR 310 million as of June 30, 2020.
Treasury position EUR 215 million, artificially boosted by the drawing of EUR 100 million on our RCF, but that doesn't impact overall the improved liquidity position. A decrease in debt linked to positive cash flow and the leverage of 3.3x that is impacted one-off by the decrease in EBITDA in the first half of 2020. I know you'll like this one, the outlook confirmed for 2020. Second half that is looking good in terms of business. We expect, going into H2, a strong rebound in volumes. We're seeing this rebound since June. This rebound continued over the summer, a dynamic recovery of work sites. We're expecting an improved contribution of energy recovery as we go through H2. On the international front, a mixed bag. Overall, we're expecting to see a good contribution from Mecomer. We expect for South Africa a return to normal economic performance on par with 2019.
Latin America, we expect a return to growth. It suffered from strict, rigorous lockdown. We expect to see a return to growth towards the end of the year. Solarca is obviously returning to normal activity with lifting of border restrictions. We expect an improvement by the end of the year. We have operating results. We have a target for EBITDA between 19% and 20% of contributed revenue. We expect, of course, for France, a sharp increase in EBITDA in H2. International, a contribution that will remain positive in Europe, obviously will depend on how the business climate evolves in other geographies. Current operating income is set to track the EBITDA. We don't expect a change in depreciation amortization. In terms of the financial structure, we'll continue obviously to have a contained, controlled CapEx policy. Industrial CapEx between EUR 65 million and EUR 70 million. A liquidity target maintained.
Free cash flow target above 35% of EBITDA, leverage target stable at 3.3x with a target to return to around 3x once the penalizing impact of H1 will no longer impact the leverage. These are the group's targets, the economic performance. Let's now move to questions if there are any, Manuel.
Question, first off, from Jean-François Granjon from ODDO BHF. Six points. The first one on the Solena project. What's the expected CapEx? EUR 50 million. How do you break that out? Secondly, updating the CapEx budget for 2020. Estimates for the budget 2021. Point three, changes in the mix expected in the second half with a view to what happened in the first half. Will there be an improvement? What will the scale of the expected drop be in international revenue after the -17.4% in the first half organic? What are the expected price effects second half 2021 after the big contribution in the first half? The last item, what are the trends and targets for 2022? Are they confirmed? This would mean average sustained growth of 7.5% for the period. How do you justify this? What will your growth profile be for 2021?
First of all, the first question, Solena CapEx. Amount of CapEx mentioned has to do mainly with the recovery unit, sorting center, methane, CSR, and so forth. Of course, in due course, we'll give you this. There's no impact on CapEx for 2020. In due course, we'll give you the ways and means for financing and related CapEx when we present that project to you.
Regarding 2020 CapEx, I mentioned between EUR 65 million and EUR 70 million. Of course, this will all depend on changes in cash flow. Based on cash flow good second half, our target is EUR 65 million, EUR 70 million. We continue maintaining significant flexibility on CapEx. We will adjust it, fine-tune it, as cash flow requires. Regarding price effects. Yes, we had a positive price effect, very good thing in 2020. Currently, we're not observing any deterioration in the market situation. We're expecting to continue to feel the benefits of the positive price effect. Regarding the international point. Situations vary, as I mentioned. No doubt about it, we're expecting an improvement in performance and international positions, in S2 compared to S1. Regarding 2021 trends and targets. It is true, things seem sustained. Don't forget, we're talking about markets that are very buoyant.
When the effects of the crisis begin lessening, we can expect resumed performance and momentum for activities. That's what we're expecting, which means we'll see, once again, a normal usual situation as of 2021 and 2022, with a pace of growth consistent in line with our activities.
Question. We have a question from Myriam Chauvot, from Les Echos newspaper. Myriam asks about financial headroom for external growth and a possible interest in Veolia, if any divestments to make due to antitrust considerations with Veolia and Suez.
A couple of points I'd like to mention in terms of headroom. We've got margin for maneuver in various areas. Some more general points, for instance, regarding our ability to make an acquisition. Currently, we're showing a situation whereby we've exited the crisis with positive free cash flow, intact headroom, and ability to create value in our markets, and that's very substantial.
We're talking about waste markets, both in France and internationally, which are very buoyant, doing very well. That's the first item. In other words, our financial flexibility and capacity remain intact. Secondly, our liquidity position is very sound. We outlined it for you today. We have a bank pool, which is top ranking, which is at our side in the event of a possible acquisition. Thirdly, we continue delivering a financial policy which is robust. I believe all in all, we enjoy the trust of our investors because our financial policy has been strict. We make good on our promises and our commitments. We would be able to move in opportunities if there were to be opportunities in the waste marketplace. Would you like to answer the second portion of the question?
Concerning Suez Veolia, that deal, for the time being, Veolia is taking a stake in Suez, but as we understand it, Suez is working on a different project. To our mind, it would be complicated, even impossible, to make any comment on that deal at this juncture.
I'd like to add a point. At the Investor Day, we gave you our development strategy, which is based on enlarging our platforms of growth. We're not reacting to specific one-off deals, but those operations and deals may lead to some divestments in the waste industry. We will take a look-see at those situations, and we'll study them to see if they're a good fit with our existing activities and if there'd be a value creation for our shareholders.
We also have a question from Nicolas Royot from Portzamparc. Four questions from him. The first, what makes you confident regarding a return to growth in Latin America at the end of the year? Second question, an update on South Africa. Can we expect revenue in 2020 close to 2019? Are we too optimistic? Third point, following up on the M&A front, what are opportunities in the current context? Fourth point, the effort on WCR in H1, can it be maintained full year?
In response to your first question, it is primarily discussions we have with our local managers that lead us to believe that between now and the end of the year, there will be an improvement and a return to growth. Obviously, all that is subject to a great deal of uncertainty given the health issues. That's our best estimate.
On South Africa, that's our target to return to revenue close to that of 2019. I think it's consistent in H2. The question is, can we catch up the slight delay posted in H1? We're going to strive to do that. On M&A, I won't discuss current opportunities in the present context. In terms of working capital requirement, there's a point that's cyclical that is linked to the decrease in revenue. We expect to return to a revenue position that is more normative between now and the end of the year. There's a portion of that WCR improvement linked to the decrease in the receivables stock, which will disappear between now and the end of the year.
Yeah, we have a question from Victor Dergunov from Midcap Partners. Two questions. Factoring, deconsolidating, what is the amount of IFRS 16 in EBITDA?
The amount of factoring is stable, EUR 23 million. It's been flat since 2019. The amount of IFRS 16 is fully consistent with the 2019 number, also stable. You'll find that in the financial report.
Thank you. No further questions. We remain available if you have any later questions. We'll answer those. Thank you.