Good morning, ladies and gentlemen. I'd like to thank you for taking part in this presentation for the half yearly results of Seche Environment. At my side, you'll recognize Machine Seche, CEO and Baptiste Genio, CFO. This is a meeting which is in an unusual format for us. Due to the health risks, we prefer to make this presentation only via video conference.
Now 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 1st few months of good growth, we then had in the second quarter, we had 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 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 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 twenty twenty I do feel the effects of this unusual time, but also show the fact that our financial situation is quite sound. In spite of the nonrecurring 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 Sechet and Baptiste Jeanneau will comment on all these points in greater detail.
After this first half, which was highly unusual, we can confirm our annual objectives and beyond. Yes, Seche environments markets are highly resilient markets. The crisis has shown by controlling hazardous of waste, Societe Environment 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 Nevertheless, 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.
Also, nonhazardous 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 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, which 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 nonrecurring in Energy Recovery.
Ditto for operating margins, 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 nonrecurring and changed as business resumed and things normalized in June. Here as well, the main impact on this half year on these half year results are a drop in contribution from Energy Recovery.
Furthermore, our financial priorities have been further strengthened. I'm inter alia 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 in 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 twenty twenty 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, Seche Environmental 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 entry are high. In France, Seche environments offers are well received by local governments and industry, very popular. So Serenade and Aviron is an example.
Serenade is a new site. We'll be opening in Vivier in Avirons under a working contact with the municipality with a 30 year time frame. The site is at the department level. It's for a full valorization recovery chain for household waste and other types of waste and business waste as well in Avioron, making it possible to substantially reduce residual waste volumes. Avioron previously had no local solution for waste produced on its territory and had to send it to neighboring departements for processing.
With our local partner, the Sylvainier Group, we were we've been able now to propose a relevant hard hitting solution, very popular by local governments, making it possible to use in this particular economy, a circular economy, which respects the environment even more and limits greenhouse gas emissions. Clearly, this is a real source of pride for us to help provide this type of installation for recovery of nonhazardous 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 Micomera, This will come online in 2021 fully.
Commercial and financial performance of Bank O'Meir, we'll be looking at during our presentation later. In South Africa, due to the health crisis, we suspended in capacity investments, which we've 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 will be as quickly as possible. And of course, even just of course speaking for the sake of the population. So I very much hope we'll meet our targets for 2022 for growth and profitability, which we outlined for you last December. The objective's target among us is €750,000,000 to €800,000,000 in revenue with an EBITDA 21% to 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 a 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 Sechet. 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 it usually. To go back to the impact of the health crisis on our activity and our outlook, COVID-nineteen 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. That way we can begin the fiscal 2021 On our 2022 trajectory as we announced it during the Investor Day on 17 December 2019. So the limited impact of COVID-nineteen is 1st 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. So the way we're organized has helped us be highly responsive. After 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 how long the crisis might last. In our area, 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. And also, we organized employee rotation.
We staggered working times, we cleaned locker rooms more and so forth for health conditions 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. These are this was during the lockdown in France and most of other locations. Latin America entered into the crisis period in June. We also were affected by non recurring event having to do with energy recovery impacted in the first half. But since June, this activity has rebounded very substantially and the rebound continues.
Joel just mentioned the resilience of our markets is indeed true. Our organization and their tools are able to respond immediately to an uptick or 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 a back burner, suspended, except if there were commercial strategic reasons to do so, such as Make O Mer. The change in WCR, we kept a careful eye on and managed WCR.
We're 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 enables us to confirm our 2020 targets. Due to the dynamic recovery in terms of overall activity, second half of twenty 2020 should be similar to 2019 in terms of revenue and operating income. In the second half of twenty twenty, 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 650,000,000 to EUR 700,000,000, the lower end of the range due to the impact of the first half.
But return to growth in most business lines enables us to target an EBITDA of between 19% 20% of contributed revenue. Cash generation further strengthened. Financial leverage should remain stable at 3.3x EBITDA, expecting 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 twenty twenty and after that. Now I'd like to give the floor to Baptiste, who will go through us 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 reached €313,000,000 And the first half, down 5%. That's €16,000,000 drop, the negative impact focused in Q2, April, of course, and May, primarily EBITDA down €9,000,000 and that impact that is Down the income statement for net income group share close to 0 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 €9,000,000 both from a banking standpoint and IFRS as compared to the debt of December 31, 2019, and accounts that were impacted, as we can see, during the Q2 by 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 €313,200,000 There's a slight decrease, 5 0.1% versus June 30. That's a scope impact of 13.6 Positive scope effect.
That's the contribution of Micomera in the Q1. It wasn't consolidated. Same time last year, scope effects, strong ForEx effect that we indicated, €4,500,000 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, €9,200,000 That's 10%.
Of course, the €1,000,000 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 percent, strong momentum of Industrial Markets and a low point in Q2, EUR140,000,000 down 19%. When we look By industry, there's a market increase in the hazardous waste division in Q2, minus 25 percent 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, nonhazardous waste, Q2, minus 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, EUR236,700,000,000 That's Down 5.1 Percent Strong Industrial markets, solid industrial markets, local authority markets, resilient and the stopping of pollution remediation sites and 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 this first half with the scope effect of 13,600,000 As indicated, ForEx currency negative currency effects to the tune of €4,500,000 and situations that are contrasted With a decrease in spot markets, PCB in LatAm, as we indicated During the Q1, worksite activity, chemical cleaning sites, Solarca down 48% revenue during the first half and the situation in Latin America, Chile and Peru Impacted during lockdown, we note the good performance of South African markets with interwaste, first, euros 28,000,000 down 3% excluding FX, which is a very commendable performance. Turning to mix activity mix, waste mix, we see that overall, we have solid performance from activities excluding recovery On treatment, slight lag versus storage, offset by a Macomerc scope effect. On recovery, As indicated, we had a loss at Cinerval on the turbo alternator that prevented producing energy recovery for €7,600,000 and for hazardous waste imports, lower imports of PCB 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 'nineteen. So 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 by minus 2 point 12%, recovery flat, decrease in energy recovery offset by very good performance of For purification markets, not more revenue but more EBITDA, dynamic activity of The emergency intervention services with good worksite dynamics in Q1 and since the resumption in June. International, A scope effect, €2,600,000 Mikomay ForEx, minus €0.6,000,000 and services Down in the Q1 for €4,100,000 that's due to Solarca EBITDA going from 60 €3,600,000 to €53,800,000 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, €9,500,000 which is a key element that reflects our confidence in our ability to reach our targets in 2020 now. Of course, faced with that, there are costs that were linked to the crisis, additional costs in terms of waste mix, So 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 €1,000,000 appropriation to depreciation during Historic policy and then other income and costs during to the write backs on receivables and Employment tribunal disputes, good balance and good cash in performance over the period.
Moving Down the income state, we have the non current income to tune of €6,000,000 because of To the tune of €2,000,000 because of the interest expense of €9,000,000 because of the increase in the gross debt Through 2019, ForEx loss of €9,000,000 to the drop in The South African rand and investments of €200,000 investment down And net income close to 0 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 Last half on two issues. We were very stringent on maintenance CapEx With the necessary CapEx to maintain our production facility, EUR 17,400,000 reflecting stability on that item and heightened selectivity on development CapEx that weren't neglected during the period, building the new Micom Air capabilities, etcetera, which will create value going forward. Cash flow generation, as indicated, was preserved. The cash flow management that is up €4,500,000 in spite of The decrease in EBITDA and recurring cash flow, thanks to active management management of receivables that obviously led to an improvement in WCR and also to a mechanical decrease In revenue, tax payments increased 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. So net debt goes from €399,000,000 to €390,000,000 a decrease of €9,000,000 due to the free cash flow generation that is impacted negatively by additional prices linked to the acquisition in 20 19% of Solarca, which will increase net income. Group Share in target. Liquidity remains very strong.
The group has liquidity €310,000,000 at June 30, 2020. Treasury position, €215,000,000 artificially boosted by the drawing of €100,000,000 on RCF, but that doesn't impact overall the improved liquidity position, Decrease in debt linked to positive cash flow and the leverage of 3.3% that is impacted one off By the decrease in EBITDA in the first half of twenty twenty, I know you'll like this one, the outlook confirmed 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 worksites.
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 Micomera. We expect for South Africa a return To normal economic performance on a 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. And for Solarca, it's 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% 20% of contributed revenue. We Expect, of course, for France, a sharp increase in EBITDA in H2 and international, a contribution that will remain positive In Europe, but 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 change in depreciation and amortization in terms of the financial structure will continue, obviously, to have a contained controlled CapEx policy, industrial CapEx between €65,000,000 €70,000,000 €570,000,000 liquidity target maintained, free cash flow target above 35% of EBITDA And leverage target stable at 3.3x with a target to return to around 3 Once the penalizing impact of H1 will no longer impact the leverage, So these are the group's targets, the economic performance. Let's now Move to questions of Florentine, Manuel.
Question first off from Jean Francois Grange from ODDO BHF. Six points. The first one on the Solenar project, what's the expected CapEx, EUR 50,000,000, how do you break that out? Secondly, Updating the CapEx budget for 2020, estimates for the budget 2021, 0.3, changes in the mix Backed 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 minus 17.4% in the first half organic?
What are the expected price speeds in the second half 2021 after the big contribution in the first half. And then 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? And what will your growth profile be for 2021?
First of all, the first question, so in our CapEx, Amount of CapEx mentioned has to do mainly with the recovery unit, sorting center, Methane, CSR and so forth. Now of course, in due course, we'll give you this. There's no impact on CapEx for 2020. And in due course, we'll give you the ways and means for financing and related CapEx when we present the project to you. Regarding 2020 CapEx, I mentioned between €65,000,000 €70,000,000 Of course, this will all depend on changes in cash flow.
Now based on cash flow good second half, our target is €65,000,000 €70,000,000 We continue maintaining significant flexibility on CapEx. We will adjust it, fine tune it as cash flow requires. Now regarding price effects, yes, we had a positive price effect, very good thing in 20 20. Currently, we're not observing any deterioration in the market situation. So 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, but Remember, we're talking about markets that are very, 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 normal usual situation as of 2021 2022 with the pace of growth consistent in line with Miriam Chavot from Les Decaux Newspaper.
Miriam asks about financial headroom for external growth and a possible interest in Veolia. If any divestments to make due to antitrust considerations with Fero Land Suez. Okay. 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, I. E. 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. So 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? Well, concerning Suez Veolia, that deal, for the time being, The idea is taking a stake, we're only 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 Royo from Porte Jean Pierre. Four questions from him. The first, What makes you confidence regarding a return to growth in Latin America at the end of the year? 2nd question, an update on South Africa. Can we Expect revenue in 2020, close to 2019.
Are we too optimistic? 3rd point, Following up on the M and A front, what are opportunities in the current context? 4th point, the effort On WCR in H1, can it be maintained full year? In response to your first question, this 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, but 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 So 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 and A. I won't discuss current opportunities in the present context. And 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. So there's a portion of that WCR improvement linked to The decrease in the receivables stock, which will disappear between now the end of the year. Yes. We have a question from Victor Dorotni from MainFirst. Two questions.
Factoring, deconsolidating, what is The amount of IFRS 16 in EBITDA, the amount of factoring It's stable, €23,000,000 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.