Ladies and gentlemen, good morning. Thanks for joining us this morning for our consolidated results December 31, 2018, for this presentation. I'm accompanied by Batiste Chadeau, Administrative and Financial Director who will discuss the 2018 results and our outlook for 2019. Let me immediately say 2018 is a year of strong commercial financial operation performance, 2019 is off to a good start. I'm also accompanied by the ever present Manuel Andersson, Head of Investor Relations, who will provide a focus on our international development strategy.
It's more than ever in the news with the acquisition of InterWaste that we finalized last week. So I'm nursing a slight cold after this presentation. We'll be available to answer all your questions. By way of an introduction, let me stress the highlights of our achievements in 2018. First of all, the commercial operational and financial performance that confirms the relevance of the strategy of profitable growth in France and abroad reaching early some of our midterm targets.
The achievements of the past year strengthening our confidence in reaching the major commercial operational and financial goals that the group has set itself for the medium term. 2018 is a year that confirms the relevance of our market position. Revenue is up sharply 10%. It's the result of our growth the strategy in France and abroad in France. The position of the Sichai environment on its regulated markets, and entry barrier markets allowed it to benefit from sustained industrial demand and positive impacts linked to the introduction of the circular economy.
Internationally, the strong sales momentum within the subsidiaries recently integrated into our scope demonstrating the quality and potential of our operations in this commercial performance places the group in its target range of revenue for 2020, as we indicated to you at the Investor Day in June 2018. With an EBITDA and COI up. CICE Environment achieved high quality operational and commercial performance. Operating margin. Gross and current have grown internationally, which is a profitability growth driver, particularly in areas where we recently set up operations.
As announced, we maintained financial discipline that generated considerable free cash flow, reduced our net debt and a significant drop of the financial leverage above the initial objective. Let me underline the performance of our international scope that accounts for some 12% of contributive revenue at the end of 2018. It was at 5% 2 years ago. Of course, it's the result of active M and A policy since 2017. Emmanuel will return to that point later.
But it's also the result of significantly higher organic growth France that we've achieved, in particular in areas where we recently set up operations: Latin America, Peru, Chile in Hazardous Waste Treatment and in the World Service to Industry with Solarca, a Spanish company. This growth is also accretive for the group with an increase in EBITDA and COO internationally way above the increase operating earnings in France. In summary of our performance for 2018, in France, Cichai Environment benefited from buoyant markets. Firstly, in hazardous waste markets represent in 20 18, 62 cent of our contributive revenue benefited from the good trend in industrial output the boosted processing activities with significant volume effects. Industry accounts for over 60% of our business.
The nonhazardous waste markets we're buoyed by the initial effects of the introduction of the circular economy and through favorable market conditions, leading to the retention in France of nonhazardous waste streams and sending them to recovery facilities. This new market situation led to significant volume increases in the nonhazardous waste business. That situation is set to us, and the introduction of the circular economy in France in the coming years, will lead to a heightened momentum in recovery activities, both in volume and value terms, and midterm will contribute to raising entry barriers to the detriment of the least performing operators. And CECE will take advantage of these regulatory breakthroughs to strengthen its leadership in these markets. Internationally, as I stressed, companies acquired in 2017 are revealing their growth potential in their markets.
Thanks to their integration into Seche environment, strengthening their technical both these and by extending their commercial offering. These companies are becoming benchmark Players and Their Markets and increasingly attracting local and international players. The operating profit is up, thanks to international activities. Conversely, let me stress that in 2018, the French scope is bearing the restructuring costs linked to our change in scale. Lastly, we've reached the cash flow generation of 35% of EBITDA as we announced at the Investor Day last June.
That's a target we set ourselves for 2020. We reached it in 2018. It's the result of our financial discipline aimed at containing operating expenses and development Cees for project financing and, of course, financial investments. Our net debt is slightly down below our initial target of financial leverage for the end of 2018 by reaching 2.9 times EBITDA and 3.9 for the announced EBITDA. We're confident in our outlook for 2019, even if 2019 will compare with a demanding base set in 2018, both in France and internationally.
What's more, we plan like you to revise economic growth prospects in France and globally. Against this backdrop, Citi environment has some key strengths. It's positioned on the circular economy markets boosted by regulation. This is leading to lasting increase the volume and value of our markets. It's true for municipal clients who have regulatory targets to meet in terms of waste recovery.
It's also the case for industrial clients for whom the circular economy is an opportunity to achieve material cost savings or energy cost reductions. And the waste recovery process is for them an opportunity to improve their operational efficiency internationally. Commercial developments underway, notably in Latin America, allow us to anticipate continued sustained activity in these areas in terms of organic growth. Turning to M and A. The group will also benefit from positive scope effect in 2019, first of all, because we're going to strengthening our position in Peru.
Back in 2015, we took a minority stake in Canne, a company specialized in processing medical waste. Canet expanded rapidly into other markets of hazardous waste and also in service activities such as pollution reduction. We took a majority stake early 2019, Niro, to promote industrial synergies with our other facility in Peru called Terez, President. In waste, final hazardous waste storage systems, the main scope change results from the acquisition of InterWaste last week. The acquisition of InterWaste, the number 2 waste player in South Africa, confirms our first establishment in Africa and our leading position on this high potential market.
Interwaste has a profile comparable to that of Seche, growing company, family based company. We share the same development culture, the same human values and the same long term vision. We are therefore extremely confident in the successful integration of InterWaste. We're also very confident in the ability of this new subsidiary to expand rapidly on waste recovery markets supporting the regulatory changes in South Africa aimed at the circular economy as well as heightened environmental regulations in terms of waste processing. Our expertise is complementary and the tie up between Seche and Inter Waste is a mutually beneficial merger.
The achievements in 2018 already on a par with some of the targets that we set for 2020 at the Investor Day. Already, contributive revenue exceeds €550,000,000 The financial leverage is under the 3 times EBITDA Daa. Rate cash conversion rate reaches 35% of EBITDA and therefore confident in our ability to reach certain commercial and financial targets as of 2019, in particular internationally. Given our scope changes in 2019. International revenue will represent over 20 and of consolidated revenue.
The increased profitability of our international operations driven by volume increase combined with stringent development management should allow this scope to reach the gross operational profitability target of 20% of revenue in 2020. Against this favorable backdrop, Cauchy environment can set new midterm ambitions for the medium term. And that's why I wanted an Investor Day to be held at the end of 2019 in order to reformulate new midterm objectives. At this point, I'm going to hand over to Beatrice Desjardins, who's very keen to discuss the results and the financial situation of 2018.
Thank you very much, Joao. So for this is really one of the more pleasant moments that you can have as a Finance Director in order to present the results. What I suggest is that we quickly go through the usual table with the key figures for 2018 with contributive revenue at 500 and €60,500,000 up 10% as Joel said with real momentum here that we will go into in greater detail. EBITDA and current operating income at plus 11%, EBITDA up. Current operating income at with EBITDA 19.2 percent, current operating income 44,200,000 and operating margin up on 2017.
Net income up 2.8 percent at €15,600,000 and cash flow ARPU. Thanks to improved profitability, control over our investments, enabling reduction in our net financial debt and improvement in credit ratings. As Joel was saying at the end of 2018, with the financial leverage with which is our indicator for our financial policy, which we Foto and apply at 2.9% at the end of 2018. Now when we announced the activity regarding dangerous hazardous waste and nonhazardous waste, our traditional businesses. As you can see from the chart, both businesses contributed similarly in 20 '18 to the group's results with hazardous waste up 7.8 percent on constant exchange rates and non hazardous waste at 13.3% plus €24,800,000
These
results for hazardous waste driven by positive momentum both in terms of processing and services both in France and internationally. We will give you more detail on this. And on non hazardous waste with ramping up of the use of tools as indicated by Gerard with depollution contracts, which also increased our processing tools in 2018. When we look at the improvement quarter by quarter. We see a fairly logical trajectory in 20 '18.
We have the evolution of our business, a more stable progress in the results both in Hazardous and Nonhazardous Waste Business, and this should improve with the diversification of our business. And secondly, Q4, which is the new item here, which was robust with a strong base that we had in 2018, but be it in hazardous and nonhazardous waste, up plus 5% on average coming out in the Q4 with, as I indicated, hazardous waste with strong growth in Chemical Business and a strong increase in the Services business in non hazardous waste, which went which came through in all the way through Q4. Looking at France versus our international business. In France, we have revenue up 9% with very strong momentum for France internationally, up 15%. For our international business, we're talking about figures without any scope effect, without any change in the base reflecting the group strategy to find growth drivers in our international business and also very strong momentum in Services, in particular in Chemical Depollution, plus 19% with the processing tools up strongly in Peru.
As Joelle was saying, in 2018, international business accounted for 11% of the group's business, further to the acquisition of Inter Waste, which was completed last week and the consolidation of Cannae with the exercise of the option that gives us control. Overall, international business accounts were 23% of the group's business. And of course, these businesses are going to provide growth drivers for us from 2019. Looking at the next chart, which is a traditional chart breaking down our results per business to give you details on the evolution of our business in 2018. Across all we have contribution from all businesses with dominating +22,000,000 with volumes, services plus 23,300,000 and recovery €23,300,000 The main contributing factors to give you some figures between 2017 2018, volumes were up 7.4% and strong growth of the Depolution business in the Services sector.
Looking at the chart on the right, we're focusing on hazardous waste. We have strong activity in incineration and storage, plus 17,000,000 with positive volume, which contribute to the activity of our platform and a price effect which was positive. We also see very strong business in Services with chemical Depollution. And at the beginning of the year, we referred to this earlier, significant contracts in the U. K.
And also in Malaysia at the beginning of the year. And the access of Solarcao to the German market, which in the second half of the year stepped up its growth strongly with strong growth for this year. In Services, we have the Pyrotechnic business up strongly in 2018. We've referred to this during the Investor Day. This is part of the diversification of Services and which is a growth driver.
Looking at non hazardous waste, bottom right, you can see the improvement in processing from the availability level of some of our thermic processing tools and also signing of significant contracts in Depolution Services, plus 15,500,000 which has contributed to our processing tools and also recovery up with CSR tools as we have been telling you over the past few years. Moving on to profitability. EBITDA up 19,900,000, increase of the business with operating margin, which is up by €13,200,000 €9,800,000 in France and €3,400,000 overseas. We have strong volume effects. We've talked about this regarding processing.
And also in Services, we have a price effect which made a positive contribution €13,000,000 impacting all of our tools and which has an impact on processing of thermic tools. We have an increase we have maintenance costs and personnel costs, temporary staff accounting for €9,000,000 in 2018. And we have support costs for our development, up 2.6%, which include recurring and non recurring operating items. Geographically, we have EBITDA, EUR 17,400,000 and the operating margin, which is stable. And EBITDA, €11,700,000 with a margin of 18.3%, up strongly by 2.6%.
This step up in our performance and profitability overseas also reflect the relevance of our international development strategy. Now looking at operating current operating income, €44,200,000 up €4,500,000 And the evolution of current operating income is in line with that of EBITDA, with the impact of amortization to the tune of €5,200,000 due to the strong growth in this storage business and with provisions at €1,100,000 no particular comments on provisions, amortizations. The current operating income is up in line with that of EBITDA. So overall, the operating margin is up and is, in particular, up due to our strong international business. I will now focus I'll spend a little bit more time than usual on account operating income and group net income because there is an impact this year in 2018, a major impact on the results of operating income.
Operating income is €38,000,000 which is impacted by different items. A tax dispute that we talked about at the 30th June due to customs checks and with a tax charge arising from DGRP. This is something that we are challenging good that we have taken on board as a nonrecurring item. A performance plan results per plan, 1,600,000 euros. This is the departure of depreciation of assets is the 3rd item, which is an important item €1,700,000 which has an impact on equipment that is now obsolete and this mainly involves our different project sites with mainly the impact on interwaste.
Looking further down, looking at the financial results that we have a charge of 13 point €4,000,000 that we have booked. The financial result is basically stable but has been improved by €1,800,000 non recurring item. Corporate tax is up €8,800,000 up €1,100,000 further to the improvement of the taxable base and the the foreseeable decline of our corporate income tax by 2022 and overall an improvement the results of consolidated companies and net income coming out at €15,600,000 up slightly on last year. And this means that the recommended dividend will the recommendation will be to maintain our dividend payout. Looking at control over our investment.
We're in control of our industrial investment, €12,300,000 last year. This will generate EBITDA. This is investment in our production platforms, effluent platforms in Peru, for example, on our sites in Germany, creating new storage capacity for the future. And also, we have an evolution in our regular investments, up 6.9% of revenue in 2018 versus 7.2% in 2017. Looking at the cash free cash flow table.
Our recurring cash flow is up coming out €92,700,000 in line with that of EBITDA. Working capital requirement was impacting in 2017 by factoring an item of €23,000,000 which came out at the same amount in 2018. So no impact on working capital requirement in 2018. WCR. It's down slightly.
It's not a structural effect due to a client item which has been settled. Gross free cash flow €38,400,000 And this means that our cash conversion ratio comes out at 35% in 2018. We've reduced our net debt load. This is linked with the generation of gross cash flow. After non recurring CapEx and after IFRIC 12, these collective authorities, an €8,400,000 reduction in the net debt flow.
At the end of 2018. We have a strong cash generation. A strong balance sheet. The cash level at the end of 2018 came at €162,000,000 of 154 €1,000,000 in free cash flow in order for us to be able to pin that investment. 2.9 percent ratio financial leverage ratio slightly below our medium term target of 3% and of the covenant of 3 point 95%, but can go up to 4% 25% in the event of an acquisition.
We're into waste after the a step up in our share in CACI. On a pro form a basis, the financial leverage ratio would be 3%, which is the medium term objective for the group and leaves this financial strength of the company intact.
2019 looking at the outlook.
So
just a straightforward comment. We expect a continuation of what we saw in the 1st part of the year of good trading level, but we need to underscore, as Joel pointed out, that 2019 has a strong basis near the top of the cycle. And overall, there teasing. Europe 2019 is set to be favorable internationally with positive organic growth the momentum in Latin America and also in service activities. The priority is to integrate into waste against the backdrop in South Africa that's rather favorable.
The OECD growth forecast would indicate that growth momentum is rather favorable. But as you know, there are elections looming on the 8th May 2019, and we'll know more at that point. Leading overall to an improved earnings expected in 2019 within France, the beginnings of purchasing optimization operational efficiency. These items will be offset by impact specific to our business, our return to the investment to be undertaken on the Sellez II furnace that will lead to a stoppage of the activity for 10 weeks during August 2019. We also have the restart of Senebraal planned in 2019 that, depending on our operations, while these items can have an impact on business in 2019 internationally.
In terms of progression, we, of course, expect to further increase in the contribution of our growth platforms. 2019, as I indicated, is a year investment in productivity in France and growth investments internationally. These investments for industry will be higher than 2018 level investment that's significant on our heat treatment at Tradis, the Salers 2 furnace to replace churn and dust treatment systems to increase the availability, the processing capacity. Obviously, it's going to be down for 10 weeks. This facility, €10,000,000 of industrial investment additionally over the normative number that is pretty consistent with what we saw in 2018.
Historic investment in Inter Waste and Growth, a PPP partnership in South Africa between Port Elizabeth, Cape Town for nonhazardous waste facilities and hazardous starting in July 2019. This will impact CapEx for €11,000,000 in 2019 generating EBITDA as of 2020 and financial investments that we've always indicated. Interways, Cannae also have an impact on the amount of investments. Financial discipline 2019, we continue to have the same rationale. It's operating cash flow that World Fund Industrial Investments.
And debt increase, if it takes place, is aimed at funding acquisition investments whilst respecting midterm, the leverage of 3. A focus on IFRS 16. Knowledge tends to differ on IFRS 16 on leases entry into Forza 2019 to reflect leasing contracts in financial statements and to comparing more readily whatever the financing mode chosen, finance or leasing. This will de facto impact the 2019 financial statements because the asset side, the right to utilize the lead asset amortizable and liability of financial debt of discounted Lisa's P and L. Of course, there's an impact.
We have to cancel the leasing expense. We've done that. There are some uncertainties remaining regarding the level of leases that will take place in 2019. However, our estimate to date is a gross financial debt between €24,000,000 €30,000,000 and a cancellation of the leasing costs that has an impact on the bottom line of between €7,000,000 €10,000,000 on EBITDA. Of course, this overall is said to be neutral in terms of net income.
Over to Manuel now for a focus on International Development. So international is an important prong in the expansion of Sichuan, Varin Mar. That's confirmed 2019 with the acquisition of InterWaste and Cannae. International, 5% of revenue 2 years ago at Legacy, 20% 2019, and that's say, significant contribution to our operating earnings. It's the fruit of an acquisition strategy that is targeted on companies that offer high growth potential.
This strategy is primarily based on 4 criteria: identification. We will, of course, seek to identify emerging markets with strong economic and growth potential leading to volume growth of waste, but also geographies where environmental regulations are being implemented and where medium class is with aspirations in terms of better living conditions, health care, and we'll be vigilant to ensure those regulations complied with, leading to rising barriers to entry with heightened processing standards, also market consolidation for the best the offerors from a technological and environmental standpoint. So those are the markets that we will identify. And of course, more typically, we will verify the quality of the target in terms of customer synergies with our core business, primarily companies that will work with industrial clients. Our markets, our markets of excellence, of hazardous waste and also economic and financial performance criteria.
We thereby acquired over €80,000,000 in revenues over the past 2 years, about 20 million EBITDA with notably major acquisition as of 2017 continuing strengthening 2019 with the deal in South Africa and the transaction on Cannae. I'll start with that. Cannae, as we said, as a company where we took a minority stake in 2015 through a 49% holding, a company growing on the regulated market, growing in the of medical waste in Peru. We increased our stake in January 2019 to 56% with the aim of bringing it to 70%. The first half, it's a company that has grown rapidly, not just in its medical waste market, but also other hazardous waste markets in services as well as decontamination activities.
This is a company that we brought to international standards by contributing to putting in place and starting a hazardous waste incinerator that is the only one in Peru meeting international standards in terms of smoke processing. So we wish to gain majority control of Cannae bringing it closer to another company that we hold in, Peru, tariffs that is active in the storage of hazardous final ways with a logic of vertical integration that is perfectly obvious, a commercial strategy because clearly these two companies share industrial clients that are important, some in the mining sector, others in the Chemical or Pharma sectors. 2nd major transaction undertaken in early 2019 is the acquisition of Inter Waste in South Africa. Interwaste, Joel. Recall is a growth, a profitable company celebrating 30 years this year.
Number 2 for waste processing in South Africa, very close to the number one player way ahead of the 3rd player, vertically integrated in waste management. We'll undertake all businesses from Flow Management, Logistics, present in municipal waste, industrial Waste and also a family owned company, very similar to ours, managed with a long term perspective that is aiming sustainable development through quality of services and infrastructure. That's very important in our business area. It's also a transparent company, a company that was listed up until last week since 2,007, reporting and disclosing its financial statements. It's a company that is also socially responsible with international management standards, preserving safety at work, health to work environment and well rated by South African rating systems regarding the distribution of wealth to the various communities being not just compliant with the Kingfaud protocol, but also at the highest level of black economic empowerment.
The strategy with InterWaste is, of course, to strengthen its regional leadership by supplementing its skill set. Inter Waste manages flow, logistics of industrial waste is therefore very present upstream on certain types of recovery. And CECE it's, of course, expertise in processing of hazardous waste, also complementary on certain types of recovery, Energy Recovery. So the aim is to put in place an offer on a par with international standards in terms of waste management to support the major industrial clients in the region and the implementation of the circular economy in South Africa because environmental regulations and notably, waste regulations our expanding very rapidly in the region. And a third focus area to expand into neighbor ring countries in Southern Africa and Equatorial Countries.
InterWaste there's an integrated waste player across the value chain present in flow management tools. Thanks to considerable logistics platforms and vehicles close to the clients and capture the waste streams also a player present in terms of the technology through the characterization of ways through its labs because it's the player that guarantees to its client the regulatory compliance of waste processing that is collected present in Material and Energy Recovery and Nonhazardous Waste player present in sorting. The resale of secondary waste processing, solid combustible, Stobel and the into land fills. Does waste the derived fuel, WDF diesel produced from liquid waste stemming from Industry and also present in Processing the with 2 burial sites, full ownership that can receive both hazardous as well as nonhazardous waste and also managing centers as part of facilities management for major clients. Well, interwaste is particularly present in the industrial regions also with high density demographics close to Pretoria, Johannesburg, also in the west of the country where the mines are located close to its industrial clients and more locally in the coastal regions of Playa, who is also present for the oil companies in Mozambique.
So we see the clients that we know well at Sese, the mines, energy, petrochemicals and also some large municipalities. So with InterWaste, our objective is to accompany the expansion in value and volume terms of waste markets in South Africa. South Africa is benefiting from positive macro trends, be it in terms of GDP or having experiencing the crisis in the 1st part of the decade. The situation is now one of rapid COVRY since 2016, a population that is also growing, becoming more urban based and accessing modes of consumption that make environmental considerations of priority. And also in terms of waste management, regulation is changing FAST one Waste Act that comes out every year.
You'll see that in the annex to the hand down. What's happening in South Africa, put simply, is what happened a few decades ago in France and in Europe. That's to say we're doing things that seem to us obvious today, such as sorting waste by type, by chemical composition and putting in place differentiated sorting process. We can't bury liquid or explosive or flammable waste. They have to be separated with flows and appropriate streams for each type of waste.
We also define categories of waste that must be treated or resolved pesticides, PCBs, combustible waste or high energy value that must be recovered. It's also a country that has a result to put in place the circular economy very soon. 0 waste in 2022, that's an ambitious the target, but it clearly illustrates the determination today of the authorities in South Africa to develop a modern waste economy similar to that to be found in Europe in particular.
Strengthening the duties for the waste obligations for the waste producers. And this will lead to higher entry barriers, greater concentration of the market benefiting those producing the lowest costs in terms of recovery, and this is where we coming. We have the complementarity with Inter Waste, which has very good knowledge of the local customer base. And we can implement this since we will be a our intention is to become a regional leading players. So 2019 will be focused on integration.
We're very confident about this, about our success. The teams will accompany the whole project and will accompany the development plans of Seshir. As we have recalled, we will continue with the Eden project with projects that are underway. We have already sent teams to be on-site to work on building up or improving the standards, raising the standards and strengthening the competitiveness of interwaste on its market and visavis other markets and therefore we'll be intervening in these activities not only for waste processing but also decontamination environment related businesses, which as you can imagine are very important businesses in South Africa. So that's what I wanted to say about the South African business and in broader terms about our international business.
And I will hand back to Joelle. Thank you very much, Emmanuel. Sichuan Vivonema is in a strong position to see through its profitable growth strategy internationally. I have stated my confidence in improving our results and business in 2019 while maintaining a very strong financial situation. In the longer term, I think our group has strong fundamentals, which will enable it to see through its accretive growth strategy.
Number 1, its presence in France and internationally on markets that are sustained by regulation favoring sustainable development, the circular economy and combating global warning. These are long term markets with high entry barriers and which are strong growth markets. Number 2, the growth of Secheren Vivonements to extend its offering to respond to these challenges for industrial players and local and regional authorities, our capacity to innovate and anticipate the requirements of our customers' regulatory requirements to ensure that we have the appropriate authorizations to strengthen our presence in the market. Number 3, know how and the technologies that we implement, which enable us to have leadership in high entry barrier markets, enabling us to respond to the environmental requirements of the clients. On more technical waste markets.
Cichai is internationally recognized as a leading player with leading international players as well as regulatory bodies' ability to achieve strong profitability, reflecting our strong positioning on the waste processing market, which will continue to be improved through the strengthening of our industrial efficiency. And finally, the strength of our balance sheet and our strong cash position, which enable us to look forward to an accretive ambitious growth strategy based on strong financial discipline, which will enable us to focus our development targets, be they financial or industrial. The 2020 objectives that we have set out last year we think completely achievable because some of them will probably be met as early as this year. Therefore, I wanted us to redefine our growth plan to 2022, and we will be communicating on this the Q2 of 2019 the second half, I do beg your pardon, says Mr. Cixi.
The what are the key messages for this results presentation. Those were the main messages. And now Leroy has the mic if you have any questions. Please raise your hands if you have any questions. Just go for it.
Good morning. Financier Dadelle. I asked several questions regarding your South African acquisition. Could we have the breakdown between hazardous and nonhazardous waste for this business. And also, what is the raw materials valuation because I think that this business was not looking very strong because it was facing a challenging environment due to Chinese imports, which are now being restricted.
Also looking at the outlook for 2019, what do you expect in terms of revenue and EBITDA for this acquisition because I've seen that it's a listed company. As you've said, we've seen their press release. There was a problem in November on a site which lost its operating license, which had to close down. What is the outlook in the short term for 2019 for this company, which had a more difficult second half than first half, if I understand correctly. I can't see Sophie, but I will answer the questions.
Looking at the ranking in terms of hazardous and non hazardous waste Into waste, there's not operators we do simply because they don't have this type of business in South Africa. The they base themselves on municipal waste on the one hand and industrial waste on the other. What's municipal waste? Well, it comes from a municipality and an industrial waste is when you have an industrial company involved, it's very simple. And at present, in terms of the development, the growth of these businesses, the operator for decontamination.
Takes all the waste on this platform and channels them depending on the type of waste towards the processing plants or recovery plants. So you don't have this kind of statistics, kind of figures for InterWaste nor do we have the exact breakdown for the raw material recovery in the revenue. You're quite right in saying that contrary to Sichier, the interwaste is trades in this kind of waste and they they're seeing a decline in their margin on the materials trade due to the refusal of China henceforth to import waste and therefore this has duration. Mr. Smith, the market is saturated.
That was for 2019 outlook, I'll let Batista answer the question. Looking at the outlook for EBITDA and revenue growth. We have the results that we presented in terms of 20 seventeen-twenty 18 EBITDA. This was converted into euros. So we'll do it in a simple way looking at it in South African rand in the local currency in 2017, interwaced EBITDA was 212,000,000 South African Rand.
In 2018, it was R213,000,000. There's no decline in EBITDA. There's a foreign exchange impact between 2017 2018 since in 2017. No, I'll go back to your previous point, of course. And next we have the 2018 impact.
There's a currency impact between 2017 2018. This is an important point. And number 2, there is a second half impact, which is due to provisions that were made by Inter Waste in the second half of twenty eighteen to the tune of R13 1,000,000. These provisions are non recurring And they are due, of course, to expense arising from the acquisition, representing 50%. And this is to remunerate the advisers.
There are many advisers in this room. They know what I'm talking about. This can be very expensive. We do hope it's non recurring because we have no intention of reproducing now or renewing this particular provision. Number 2, we have a receivable, a client receivable where we've made a Prudential provision.
We hope to recover this provision in 2019, but the customer receivable has been booked. The non recurring items, €13,000,000 in S2 2018. And next, to respond to your question on 2019. What we have put in the PowerPoint. And indeed, our message is that we're going to focus on the integration of InterWaste in 2018 into the Sache Group.
Our objective is very simple. Our strategy is simple. As you've understood, we want to increase the waste the hazardous waste processing capacity of interwaste. And our international strategy is that we see there being a major potential here, but it requires time. In 2019, we're going to focus our efforts to ensure that InterWaste is able to process all types of hazardous waste and to work on areas such as decontamination in order to boost our processing tools.
So we're prudent in our guidance for InterWest. But to be a little more specific in answering your question, if we were to 2018 removing the nonrecurring items, the €13,000,000 with the current growth rate in Africa, which in South Africa, Which is 1.9% according to OECD forecast. That would give you basically our forecast for our business in 2019. We hope that the synergies that I've been referring to. We'll intervene before that as early as 2019.
We think that they will be fully by 2020. And this is why we wanted to hold an Investor Day in the second half of twenty nineteen in order to be able to provide you with some figures for potential synergies with interwaste over the medium term. Now what about the site that lost its license? Answering. Well, that doesn't contribute much.
We're going to work on this on all these issues, but that doesn't have any impact on our 2019 guidance.
A couple of questions. So 20 seventeentwenty 18 high organic growth, double digit, 11% 2017, almost 10% in 'eighteen. To return to the reasons, not normative growth to explain that good performance. Why such prudence on 2019, first question. 2nd question, you mentioned some nonrecurring items, the growth of 11% of EBITDA, CRI and just 2% for operating income.
So could we expect some one offs? But are we too expect some one offs in 2019? You mentioned asset impairments. Any further impairments in the offering to be factored in? That's my second question.
Could you maybe quantify industrial and financial CapEx total CapEx a number sizable in 2019. And final question on InterWaste, you provided us with some outlook, stability 2019 over 2018 in terms of contribution. What's your investment? You're going to undertake major investments. We'll be restructuring just under 2,000 personnel in the group.
It seems enormous giving the scale of the revenue, compare the ratios with other cesheres, the measures planned, what are you going to do? And that needs to be factored in so as not to be overly ambitious, optimist in terms of contribution of interwaste of earnings in 2019, 2020 to the group as a whole. Answer. To your first question, 17, 18, we've seen strong organic growth the levels. I agree with you versus the norm in France because international, we're expecting that type of growth rate, and that's what we were debating.
Overall, for France, indeed, we're on levels that higher than what is normative for us. That's why I detailed since the last results, what is the volume effect, what the price effect. Volumes are higher than expected. We saw this in 2018, continued to see it in the second half 2018. That's why I give you the number of 7.4%.
Clearly, we're on trends that, higher. That's why I say that we're at top of the cycle, higher than anticipated. I'll leave you that comment of prudence on 2019. I mean, I have to say that we're getting to understand that when we look trend wise across the broad trends that were pretty well correlated with industrial output indices. There's a lag clearly between the volumes that continue to be up and price effects that remain positive versus the industrial output forecast, the growth forecast that we have in France and in Europe.
I have no macro explanation to provide you. That's why I'm cautious on 2019 in the sense that normally long term, we should join reach those product those industrial output levels. That's my first answer. 2nd answer, non recurring items by definition don't recur every year. So I think it's important as part of our international expansion on our M and A to have a strong solid balance sheet and the asset impairments that you mentioned contribute in terms of risk management to have a stronger balance sheet that going forward, tomorrow will generate more earnings per share.
That's the objective. We have variances from time to time between amortization on equipment. Based on the life expectancy of the equipment and the actual obsolescence of the equipment, that's what we saw this year. It's important from a financial standpoint and also from a risk management standpoint to put that under a non recurring item, so as tomorrow being able to improve earnings per share. Thirdly, on industrial CapEx and financial.
Industrial CapEx, what you need to look at is, of course, 2018 that can service and normative year in terms of percentage of revenue. Next, as I indicated, that there are exceptional CapEx, €8,000,000 on Treddy, €11,000,000 on interwaste. Those are CapEx, the numbers that are exceptional. And so the operating cash flow is at finances, industrial CapEx brings us overall to breakeven free cash expected in 2019 as regards our estimates. On the financial side, we gave you the amount for the acquisition of InterWaste.
I can indicate the CannaI number that will help you for your model. It's €3,000,000 So you have the amount of financial CapEx undertaken at the start of the year. On your 4th point, what's very important in terms of message No. There's no restructuring plan expected into Waste. We acquired into Waste to grow into Waste.
We want to be a major player in South Africa. We use InterWaste as a platform today. InterWaste is a profitable company. It has 2,000 people. It's profitable.
You can't compare the ratio number of personnel revenue in France to South Africa. It's highly labor intensive, but it's a profitable company that we wish to see grow. Sale priority to interwaste. And that's why in this CapEx of PPPs on hidden storage of hazardous, non hazardous waste because that can be a key factor in our capability for developing service processing
water. Could you recall the CANAD figures, what it represents in terms of EBITDA? Because on a consolidated basis at the 1st January. I have a question regarding amortization in France. On the COI, you're saying there's a 5.2% increase in amortization due to recent investment due to this increase in the storage volumes, is this a new step forward which was required to accompany a growth market.
In other words, well, what I'm asking is looking at the does this mean every time the storage volume goes up, we're going to have an increase in amortization due to the investments that are being made because is this simply an incremental increase, which means that we can just look ahead to the next 3 years given the expected increase in volumes. Or does this mean that the expected increase in revenue will be eating up, as it were, every 3 years by the increase in investments. That's my question. Well, Manuel maybe Manuel can talk about the first Because Manuel, you talked about this in Slide 26. We have some figures on Cannae.
On Can I? This Page 20 6 of the document that you have over the past 2 years, a very strong increase in revenue and margin. This will is set to continue. Tariffs is a bit smaller. No, we're just talking about Cannae here.
The tariffs represents €4,000,000 approximately in revenue and approximately €1,000,000 in EBITDA. That's Taris I'm referring to. And then you just have to add the 2. Okay. So does that answer the question.
Well, what you have to bear in mind is looking at recent years, we didn't 2015 was when the company was set up that we were starting from scratch. So what you have to see is that looking at Cannae, we have a growth logic, which is very fast growth and increase in operating profitability. There would also be very fast synergies between Cannae and Paris. We'll contribute to improving the operating profitability with the commercial synergies. And this means that it will be an integrated Player quite unique in the Peruvian market on this hazardous waste processing market.
And also in Services, we've talked about decontamination. We've talked about tariffs. We've tariffs has been present in the Services business with a total waste management involvement, global offerings, for example, for the Lima Airport. So these companies that are developing in their business with major customers in a very Dynamic Wave because we provided them with the technological know how that lend greater credibility to their offering and reassure the key local players in terms of the processing technology that will be applied to their waste. And as we've seen from the slides, the what we want to do is to apply international standards.
So the Cannae Tarres Group will be the player in Peru that can provide these big mining companies or oil companies providing with energy, health. We'll be able to provide them with these services. The important point is that there are administrative synergies which are quite weak in terms of the momentum tariffs plus Cannae. If you add them together, the trend that we saw in 2018 is what we expect to see at the very least in 2019 to answering your question because it's a growth platform and a very important one for us. The other point referring to your second question regarding investment on storage in France, mainly in France because we're going to continue to invest in storage capacities overseas.
But in France, we expect continued stability in investment for storage in 2019 compared to 2018. Are there any other questions? Yes, over there.
Hello. We've spoken a lot about figures, about development. I've got a question. There are people behind all these figures engineers who have to support not just technological but also international development. You are 1st and foremost a French company.
When you expand internationally, you need obviously a management team that is open to international operations, but also engineers who are open, trained to meet with very different environments. Well, let me tell you one thing. They're delighted. They're very keen, very interested people. We have too much demand.
We have more demand than supply internally, all the young engineers. We needed to send immediately to dispatch 3 engineers to South Africa, and they were ready to go within a week. I mean, that's part of our corporate culture. Now there are going to be 3 further guys who are going to say 1 or 2 years there, no difficulty. Ditto in Peru, in Chile, no fear.
We've got pretty strong demand internally and now times are changing. There are video conferences. We're constantly in touch. We have all the daily processing figures and ongoing reporting systems. It's not what it used to be, this kind of an adventurous type.
We went to do pollution abatement in the middle of the Amazon. They went off with their mobile phone. They just forgot the raincoat for a couple of days. They were stuck in the Amazon. That was the high point.
I mean, they had nothing to keep the wind and rain out, and they had difficult the cold connection. So it makes the people in the company very keen to work abroad. It's an entrepreneurial mindset. You find the same thing in the company into waste that we just decouired. They're already present in Mozambique.
Several countries that they're considerate. We want to merge cultures in terms of quality, and then we'll dispatch them further across Africa, no doubt. I think the point to be mentioned here is that, as Manuel indicated, those who are supporting us in the countries. The country CEOs are locals. The CEO of InterWaste has been in the company for 25 years.
So we bring our knowledge, our know how of our engineers who have those skill sets. They come as supporting experts to the local teams. It's a specific mode of management. We send people to assist the local management team. We also had examples in the past where the company intervened for depollution in the Cote d'ivoire of Rocco a la.
The pollution occurred on the Tuesday, Wednesday, CECI was called in. On the Friday, we put 50 people aboard an Antonov with all the kit to go and the suits to de pollute. I had to refuse people at the drop of a hat. We're able to send I could send 100 people immediately, there's that mindset. That's what we like, and it's a growing company, constantly expanding and changing.
There are people with us who are very keen to go to South America and also South Africa. So a couple. Could you maybe just give us an update on Cinerval? When it's going to pick up again, is that going to have an impact on your accounts? And end of 2018, maybe if you could give the carryover deficits linked to that transaction.
On M and A, are we to understand that 2019 will be Karma because there are quite a few things to integrate. Or in the event of an opportunity, might there be further M and A activity? And on interwaste, is
First question, on Cinnaval. Well, the takeover of the sites its plan for early July 2019. At present, we are conducting trials at the sites cold tests which are underway. And this will be put back into service early July. And during July, this will apply to the turn alternators into the plants as a whole.
Potentially, during the ramp up period, there may well be a difference between what we saw in terms of results during the period when Cinnabar was not actually up and running. So an EBITDA and the there's a difference between the period during the ramp up between the nominal operating rate of the plant and its actual rate, of course, this will be provisional. This will be a temporary phenomenon. And No, I'm just looking for the specific amount here. The third your third question regarding M and A, a present.
After the acquisitions, we have a financial leverage ratio of 3, which is our medium term goal. Potentially, if opportunities arise in our core business, we might well be looking at further small acquisitions, but our view at present is that we have the capacity to absorb, as has been said. We're going to work in 2019 focusing mainly on investment in our growth platforms, but we're not ruling out acquisitions, further acquisitions if opportunities arise and if, of course, we can come back in terms of size and cash flow generation to a leverage ratio that will remain at 3% over the medium time. The acquisition was financed by drawing down our existing credit line. That's quite right.
And it was funded in euros. And your last question regarding the total amount of the loss carried over. We booked a deferred tax charge of €26,300,000 at the end of 2018. Are there any other questions? Well, thank you very much.
Let's go and have a cup of coffee. Thank you. And you can ask questions informally, of course.