Press Release Paris, February 22, 2018

Transcription

1 2017 ANNUAL RESULTS (results in the curse f audit) SOLID REVENUE GROWTH AND RESULTS EXCEEDED OBJECTIVES REVENUE: +4.9% 1 AND +3.5% LIKE-FOR-LIKE GROWTH TO 25,125 MILLION ACCELERATION TO +6.3% 1 GROWTH IN THE FOURTH QUARTER DUE TO CONTINUED GOOD COMMERCIAL MOMENTUM EBITDA : GROWTH OF +2.7% 1 TO 3,284 MILLION +5.2% 1 IN THE FOURTH QUARTER 255 MILLION IN COST SAVINGS ACHIEVED IN 2017, IN LINE WITH THE GROUP S OBJECTIVE CURRENT EBIT: +5,3% 1 GROWTH TO 1,519 MILLION CURRENT NET INCOME GROUP SHARE: AN INCREASE OF +7,3% 1 EXCLUDING CAPITAL GAINS TO 623 MILLION FURTHER INCREASE IN POST-TAX ROCE TO 8.4% PROPOSAL TO INCREASE THE DIVIDEND BY 5% TO 0.84 PER SHARE OBJECTIVES ENTIRELY CONFIRMED Antine Frért, Velia s Chairman & CEO indicated: «2017 has been an intense and successful year fr Velia and was fully in line with the grwth trajectry we are aiming fr. Sales grwth accelerated thrughut the year due t actins implemented at the end f Results grwth was amplified quarter after quarter thanks t ur cmmercial successes, and cntinued discipline n ur part in terms f cst reductins. Over the last 4 years, EBITDA has risen by 20%, current EBIT by 75% and current net incme has mre than tripled. The sum ttal f these results allws me t apprach 2018 with cnfidence. Revenue and earnings shuld again pst gd grwth. Our 2018 and 2019 bjectives are entirely cnfirmed. 1 At cnstant exchange rates At current cnslidatin scpe and exchange rates : revenue +3.9%, EBITDA grwth f 2.0%, current EBIT grwth f 4.1%, and current net incme grup share up 4.4% (+5.5% excluding capital gains). 1

2 All 2017 results are cmpared t 2016 pr frma figures that incrprate IFRIC 12 and are represented fr the reclassificatin int Net incme frm discntinued peratins f the Grup s activities in Lithuania, in accrdance with the IFRS5 accunting standard. Revenue grew 3.9% (+4.9% at cnstant exchange rates) t 25,125 millin, cmpared with 24,187 millin in The unfavrable variatin in exchange rates negatively impacted 2017 revenue grwth by 1.1% (- 257 millin). At cnstant cnslidatin scpe and exchange rates (i.e. like-fr-like), revenue grwth was 3.5%. In France, revenue was stable (-0.1%) but increased 1.8% at cnstant cnslidatin scpe. Water revenue was up (+0.5%) and recrded prgressive imprvement thrughut the year due t vlume grwth f 1%, price indexatin f +0.2%, and cmmercial impacts f -0.5%. Waste revenue declined slightly (-0.7%) but was up 3.5% at cnstant cnslidatin scpe (divestment f Bartin recycling at the end f Nvember 2016). Waste vlumes grew 1.9% due t significant cntract awards, gd landfill vlumes, as well as gd trends in srting and recycling and cmmercial cllectin. Waste revenue in France als benefited frm higher paper prices (+10% y-y). Revenue in the Eurpe excluding France segment psted a 6.4% grwth at cnstant exchange rates. All regins recrded steady grwth with the exceptin f Italy (-1.6%). Germany increased 5.6% due t gd cmmercial perfrmance in Waste, higher services prices, and the psitive impact f higher paper prices. Revenue in the United Kingdm & Ireland cmbined was up 5.2% 2 with gd cmmercial mmentum and higher recycled raw materials prices. The Central and Eastern Eurpean regin increased 7.9% 2 due t higher heat and electricity vlumes sld, with a slightly favrable weather benefit, as well as strng water vlume grwth (+9.4%) given the Armenia cntract expansin. The Nrdic cuntries als recrded a strng perfrmance (+23.7% 2 ) as did the Iberian Peninsula (+12.2%). At cnstant exchange rates the Rest f the Wrld psted strng grwth (+11.6%). Nrth America revenue increased 10,3% 2 due mainly t the integratin f Chemurs sulfur prducts business, gd mmentum in hazardus waste (+5%) and higher prices and vlumes in Energy. Asia grew 21.2% 2 including 23.7% 2 grwth in China, driven by cmmercial successes. Latin America revenue psted strng grwth f 22.4% 2, due t psitive develpments in Argentina, Brazil and in Clumbia. The Pacific regin returned t grwth at +7.7% 2. Glbal Businesses revenue was stable (-0.4%) at cnstant exchange rates. Hazardus Waste activities prgressed significantly (+5.7% 2 ). Revenue frm Velia Water Technlgies cnstructin activities was dwn 6.4% 2 but bkings increased by 9% t 2 billin. SADE revenue was stable (+0.6% at cnstant cnslidatin scpe and exchange rates) driven by gd perfrmance in France, while internatinal activity cntinued t suffer. By business, Water revenue increased 1.6% at cnstant exchange rates. Waste activity psted very strng grwth (+8.1 % at cnstant exchange rates) with the vlume cntributin t revenue up 1.8%, service prices up 1.4% and a favrable impact f recycled raw materials prices (+1.2%), t which acquisitins, net f divestitures added 3.4%. Energy revenue als psted strng grwth (+7.1% at cnstant exchange rates), including the impact f cmmerce/vlumes f +4.2%, a scpe effect f 1.9% (Prague district heating netwrk and an energy services cmpany in the United States) and a negligible price effect. Cmmercial reinfrcement effrts launched a year ag drve the acceleratin f grwth: Cmmercial resurces were increased by 40M in At cnstant exchange rates 2

3 The missins f ur Innvatin and Markets grup were refcused n cmmercial develpment and winning new business, t mre systematically replicate ur key ffers within ur targeted gegraphies and t further develp business with ur 30 key industrial accunts, chsen frm leaders within Velia s pririty markets. This revitalizatin led t the signature f majr, prmising cntracts in 2017, including: In the municipal market: in Mexic, the Grup signed a cntract fr the design, build and O&M f the largest waste-t-energy (WTE) facility in Latin America (cumulative revenue f 886 millin fr 30 years); in England, a waste management and recycling cntract servicing fur brughs in suth Lndn (cumulative revenue f 209 millin fr 8 years); in France an peratins cntract fr the Lille WTE facility (cumulative revenue f 295 millin fr 12 years), as well as the Valentn wastewater treatment cntract in the Ile de France regin (cumulative revenue f 400 millin fr 12 years). In additin, after seeing its cntract renewed fr 5 years n March 1, 2017, the Gabn Energy and Water Cmpany (SEEG: Sciété d Energie et d Eau du Gabn), a 51% subsidiary f Velia, was the bject f an exprpriatin actin by the Gabnese gvernment n February 16, In the industrial market: the Grup was ntably awarded three energy services cntracts in China fr a ttal amunt f 864 millin; in Australia, a cntract t build and perate a new water treatment facility fr the Springvale mine and Munt Piper Pwer Statin fr 17 years (cumulative revenue f AUD$400 millin); and in the United States, a cntract fr the cllectin and treatment f cmplex waste generated by Anter Resurces (cumulative revenue f up t $70 millin fr 10 years). EBITDA imprved 2% (+2.7% at cnstant exchange rates) t 3,284 millin Freign currency mvements negatively impacted EBITDA by - 21 millin. EBITDA benefited frm cntinued cst reductin effrts, reaching 255 millin in 2017, slightly abve the 250 millin bjective, which allwed the Grup t absrb the impact f weak price indexatin in ur cntracts in France and Eurpe, the impact f cntractual renegtiatins and the startup f new activities, particularly in Energy in France, fr a ttal impact f millin, and the reinfrcement f ur cmmercial resurces by 40 millin, as well as the absence f favrable ne ffs elements that benefited 2016 results and higher insurance and maintenance csts ttaling millin. By segment: EBITDA in France imprved 3.3% t 788 millin. Water EBITDA in France increased 3.8% due t gd vlumes and cst reductin effrts. Price indexatin was weak, but verall was psitive at +0.2%. Waste EBITDA in France imprved 2.2% due t vlume grwth and a slid cntributin frm cst cutting. At cnstant exchange rates, Eurpe excluding France segment EBITDA was stable at +0.3% cmpared t the prir year due t the absence f favrable ne ff items in 2016 (reslutin f Aquiris litigatin in Belgium and an insurance claim reimbursement in Germany) and higher maintenance csts in the UK in 2017, which masked gd peratinal perfrmance. EBITDA in the Rest f the Wrld segment recrded very strng grwth (+10.1% at cnstant exchange rates) due t excellent perfrmance in China (+20.4% 3 ), in Latin America (+27.6% 3 ) and the Pacific regin (+20.1% 3 ) which mre than ffset lwer EBITDA in Nrth America (-1.5% 3 ) resulting frm the pr perfrmance f the industrial services business and the negative impact f Hurricane Harvey n the hazardus waste business. Glbal Businesses EBITDA was stable (-0.6% 3 ), as a result f the absence f a favrable ne ff that benefited 2016 (indemnity payment at the end f a cntract in Nrth America) which ffset the favrable impact f restructuring in the Velia Water Technlgies business and very gd Hazardus Waste perfrmance. Current EBIT increased 4.1% (+5.3% at cnstant exchange rates) t 1,519 millin cmpared with 1,460 millin in At cnstant exchange rates 3

4 Freign currency mvements negatively impacted current EBIT by - 18 millin. The imprvement in current EBIT at cnstant exchange rates reflects: EBITDA grwth higher depreciatin and amrtizatin charges at cnstant exchange rates (+5.5%) in line with the develpment f the Grup s activities, as well as scpe effects, and the increase in the cntributin frm equity-accunted jint ventures and assciates, which amunted t 98 millin in 2017 cmpared with 94 millin in 2016, due t gd perfrmance in China. Current net incme grup share increased 4.4% (+6.1% at cnstant exchange rates) t 623 millin, cmpared with 597 millin in Excluding net financial capital gains, current net incme grup share increased 7.3% at cnstant exchange rates. The cst f net financial debt declined by 12 millin t millin. An imprvement in results in lw tax cuntries and the repayment f the 3% tax previusly paid n dividends in France cntributed t a lwer tax rate f 24%, cmpared with 26% in The current prtin f nn-cntrlling interests increased t millin in 2017 cmpared with millin in 2016, primarily due t the perfrmance f businesses in Central and Eastern Eurpe. Net incme - Grup share amunted t 402 millin cmpared with 383 millin in Net free cash flw amunted t 655 millin fr the year ended December 31, 2017, cmpared with 940 millin fr the year ended December 31, Net financial debt amunted t 7,841 millin as f December 31, 2017, cmpared with 7,812 millin at December 31, The leverage rati was 2.4x at December 31, 2017, stable cmpared t the prir year. ********* Dividend f 0.84 per share, paid 100% in cash with respect t the 2017 fiscal year, cmpared with 0.80 per share in Velia s Bard f Directrs will prpse t sharehlders at the Annual General Sharehlders Meeting n April 19, 2018 the payment f a dividend f 0.84 per share with respect t the 2017 fiscal year, payable in cash. The ex-dividend date is fixed at May 14, The 2017 dividend will be paid starting n May 16, Outlk 2018 (at cnstant exchange rates): ********** Cntinuatin f sustained revenue grwth EBITDA grwth greater than that f 2017 Mre than 300 millin in cst savings 2019*: Cntinuatin f revenue grwth and full impact f cst savings EBITDA between 3.3 billin and 3.5 billin (excluding IFRIC 12), i.e. between 3.5 billin and 3.7 billin including IFRIC 12 Dividend grwth in line with that f current net incme 4

5 *at cnstant exchange rates (based n rates at the end f 2016) Velia grup is the glbal leader in ptimized resurce management. With ver 163,000 emplyees wrldwide, the Grup designs and prvides water, waste and energy management slutins that cntribute t the sustainable develpment f cmmunities and industries. Thrugh its three cmplementary business activities, Velia helps t develp access t resurces, preserve available resurces, and t replenish them. In 2016, the Velia grup supplied 100 millin peple with drinking water and 61 millin peple with wastewater service, prduced 54 millin megawatt hurs f energy and cnverted 30 millin metric tns f waste int new materials and energy. Velia Envirnnement (listed n Paris Eurnext: VIE) recrded cnslidated revenue f billin in Imprtant disclaimer Velia Envirnnement is a crpratin listed n the Eurnext Paris. This press release cntains frward-lking statements within the meaning f the prvisins f the U.S. Private Securities Litigatin Refrm Act f Such frward-lking statements are nt guarantees f future perfrmance. Actual results may differ materially frm the frward-lking statements as a result f a number f risks and uncertainties, many f which are utside ur cntrl, including but nt limited t: the risk f suffering reduced prfits r lsses as a result f intense cmpetitin, the risk that changes in energy prices and taxes may reduce Velia Envirnnement s prfits, the risk that gvernmental authrities culd terminate r mdify sme f Velia Envirnnement s cntracts, the risk that acquisitins may nt prvide the benefits that Velia Envirnnement hpes t achieve, the risks related t custmary prvisins f divesture transactins, the risk that Velia Envirnnement s cmpliance with envirnmental laws may becme mre cstly in the future, the risk that currency exchange rate fluctuatins may negatively affect Velia Envirnnement s financial results and the price f its shares, the risk that Velia Envirnnement may incur envirnmental liability in cnnectin with its past, present and future peratins, as well as the ther risks described in the dcuments Velia Envirnnement has filed with the Autrités des Marchés Financiers (French securities regulatr). Velia Envirnnement des nt undertake, nr des it have, any bligatin t prvide updates r t revise any frward lking statements. Investrs and security hlders may btain frm Velia Envirnnement a free cpy f dcuments it filed ( with the Autrités des Marchés Financiers. This dcument cntains "nn GAAP financial measures". These "nn GAAP financial measures" might be defined differently frm similar financial measures made public by ther grups and shuld nt replace GAAP financial measures prepared pursuant t IFRS standards. Cntacts Grup Media Relatins Laurent Obadia Sandrine Guendul Tel.: + 33 (0) sandrine.guendul@velia.cm Investr & Analyst Relatins Rnald Wasylec - Ariane de Lamaze Tel.: + 33 (0) / Terri Anne Pwers (United States) Tel.:

6 FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2017 A] PREFACE Lithuania As f December 31, 2017, the nging withdrawal frm Lithuania, mtivated by the end f a majr cntract and the sales prcess fr ther activities, led the Grup t transfer its Lithuanian activities t discntinued peratins in accrdance with IFRS 5. In rder t ensure the cmparability f perids, the accunts fr the year ended December 31, 2016 have been adjusted fr the reclassificatin f the Grup's activities in Lithuania t "Net incme (lss) frm discntinued peratins" pursuant t IFRS 5. B] KEY FIGURES Variatins 2016 / 2017 (in millin) December 31, 2016 published excluding I12 December 31, 2016 re-presented December 31, 2017 at cnstant exchange rates Revenue 24, , , % 4.9% EBITDA 3, , , % 2.7% EBITDA Margin 12.5% 13.3% 13.1% Current EBIT (1) 1, , , % 5.3% Current net incme - Grup share % 6.1% Current net incme - Grup share, excluding capital gains and lsses n financial divestitures net f tax % 7.3% Net Incme - Grup share % 7.5% Current net incme - Grup share earnings per share (basic) (2) Dividend per share (3) Industrial investments 1, , ,738.0 Net free cash flw (2) Net financial debt 7, , ,841.0 (1) Including the share f current net incme f jint ventures and assciates viewed as cre Cmpany activities. (2) The indicatrs are defined in the appendix f this press release. (3) Subject t the apprval at the General Sharehlders Meeting n April 19,

7 The main freign exchange impacts were as fllws: FX impact December 31, 2017 (vs December 31, 2016 re-presented) % (M ) Revenue -1.1% EBITDA -0.6% Current EBIT -1.2% Current net incme -1.8% Net financial debt -3.5% -271 C] INCOME STATEMENT 1. GROUP CONSOLIDATED REVENUE Grup cnslidated revenue fr the year ended December 31, 2017 increased 4.9% at cnstant exchange rates t 25,124.6 millin, cmpared with a re-presented 24,187.0 millin fr year ended December 31, Excluding Cnstructin 4 revenue and energy price effects, revenue als imprved by +4.9% cmpared with +2.0% in As in the first three quarters f 2017, revenue grwth was marked by favrable dynamics thrughut all f the znes. Variatins at cnstant exchange rates 1st quarter nd quarter rd quarter th quarter 2017 France -1.5% -0.4% -0.3% 1.9% Eurpe, excluding France 7.2% 4.4% 8.1% 6.1% Rest f the Wrld 11.8% 10.8% 9.4% 14.2% Glbal Businesses -3.2% 1.7% -2.7% 1.9% Grup 4.5% 4.4% 4.3% 6.3% 4 Cnstructin revenue encmpasses the Grup s engineering and cnstructin activities (mainly thrugh Velia Water Technlgies and SADE), as well as cnstructin cmpleted as part f perating cntracts. 7

8 By segment, the change in revenue cmpared with re-presented figures fr the year ended December 31, 2016 breaks dwn as fllws: (in millin) December 31, 2016 re-presented December 31, / 2017 change at cnstant exchange rates at cnstant scpe and exchange rates France (*) 5, , % -0.1% 1.8% Eurpe, excluding France 8, , % 6.4% 3.9% Rest f the Wrld 6, , % 11.6% 6.7% Glbal Businesses 4, , % -0.4% 0.6% Other Grup 24, , % 4.9% 3.5% (*) like fr like +1.8% versus -0.1% at cnstant fx (including the dispsal f Bartin) Revenue increased in France by +1.8% at cnstant scpe (-0.1% at current cnslidatin scpe) cmpared with re-presented figures fr the year ended December 31, 2016: Water revenue prgressed by +0.5%, while Waste revenue increased 3.5% at cnstant scpe (-0.7% at current cnslidatin scpe). Water revenue, at 2,945.6 millin, rse slightly by +0.5% cmpared with re-presented figures ending December 31, 2016, impacted by higher vlumes (+1.0%) and tariff indexatin (+0.2%), partially ffset by negative cmmercial impacts (- 16 millin); Waste revenue declined slightly by -0.7% cmpared with re-presented figures ending December 31, 2016, but excluding the impact f the sale f Bartin Recycling n Nvember 30, 2016, grew 3.5% at cnstant cnslidatin scpe t 2,468.9 millin. Cntinued cmmercial mmentum (14% prtfli increase with significant cntract wins, including the Nancy cntract) was accmpanied by increased landfill vlumes (+1.3%), gd trends in srting and recycling and cmmercial cllectin, as well as higher paper prices (+10%). Eurpe excluding France (excluding Lithuania which is classified in discntinued peratins) grew +6.4% at cnstant exchange rates cmpared t the re-presented prir-year perid, with slid mmentum in the majrity f regins: In the United Kingdm / Ireland, cmbined revenue increased by +5.2% at cnstant exchange rates t 2,124.5 millin, with a gd perfrmance in waste: revenue f 1,750 millin, up 5.1% at cnstant exchange rates, including an increase in vlumes (+1.6%, especially in cmmercial cllectin and landfill), slid PFI perfrmance (+6% rise in vlumes cmbined with a +1% price increase), and gd cmmercial mmentum - psitive impact f new Waste cntracts in 2016 and 2017 (St Albans, Suth West Lndn), increased Cnstructin activity, and higher recyclate prices (paper +20%); In Central and Eastern Eurpe, revenue std at 2,894.9 millin, up +7.9% at cnstant exchange rates cmpared t re-presented figures fr the year ended December 31, Grwth was driven by: - In Energy, an increase in heating and electricity vlumes sld in Pland (+ 68 millin), a weather impact that was negative in the furth quarter but slightly favrable fr the full year 8

9 in Pland, Rmania and Slvakia (+ 10 millin) and the impact f recent Grup develpments: Prague Left Bank (+ 20 millin); - In Water: a rise in water vlumes inviced (+1.8%) and particularly the new cntract in Armenia deplyed acrss the cuntry. - In Waste, thrugh minr acquisitins. In Nrthern Eurpe, revenue increased +7.2% at cnstant exchange rates cmpared with the represented prir year perid t 2,490.1 millin. Germany, the main cntributr ( 1,797.5 millin) benefited frm the strng grwth in Waste activities with revenue f 1,045 millin due t higher recyclate prices, (paper +12.3%; PET +11.2%), and the increase in vlumes (+ 12 millin). In additin, the cnslidatin f the Hans Anderssn activities and thse f the industrial cleaning Swedish firm Crvara in 2017 bsted revenue (+ 81 millin). The Rest f the Wrld segment psted quite strng revenue grwth f +11.6% at cnstant exchange rates cmpared t re-presented figures fr the year ended December 31, 2016, with a sharp imprvement in the furth quarter f +14.2% at cnstant exchange rates, versus + 9.4% fr the third quarter f 2017: Revenue rse +10.3% at cnstant exchange rates t 2,048.4 millin in Nrth America. The significant grwth in the Energy business (price and vlume increases) and the grwth in Hazardus Waste activity ffset lwer industrial services revenue (in the prcessus f divestiture). Revenue als benefited frm the integratin f Chemurs' Sulfur Prducts divisin assets (+ 107 millin) and the acquisitin f Envity which specializes in building energy services in January 2017 (+ 35 millin). Revenue grwth was rbust in Latin America (+22.4% at cnstant exchange rates) thanks t tariff increases in Argentina, the psitive impact f the acquisitin f the Pedreira landfill site in Brazil in May 2016, and the start-up f new Water cntracts (Punta Lara in Argentina and Santa Marta in Clmbia); Asia reprted significant revenue grwth f +21.2% at cnstant exchange rates. In China, strng revenue grwth (+23.7%) was due t new industrial cntracts (Sinpec, Hngda), and the grwth in prices and vlumes sld in the Municipal Energy and Waste sectrs. Revenue grwth in Japan was als driven by the develpment f Municipal Water activities and the full-year impact f new activities f the Renva grup (plastic recycling) acquired in August In Krea, the acquisitins f Uniken and Hanbul als cntributed t revenue grwth; The Pacific zne recrded +7.7% grwth at cnstant exchange rates fr the year ended December 31, 2017 due t the higher waste vlumes cllected, the cmmissining f new assets and the new Springvale cntract (cnstructin revenue); In Africa and the Middle East, revenue rse by +1% at cnstant exchange rates. Glbal Businesses: revenue was virtually stable at -0.4% at cnstant exchange rates versus the represented prir-year perid. Hazardus Waste activities increased by +5.7% at cnstant exchange rates, mainly due t an imprvement in the il recycling business, and an increase in vlumes prcessed at the year-end; The Design & Build activity cntinued t decline by -6.4% at cnstant exchange rates, in line with the cmpletin f majr prjects in 2016 (Sadara, Azur Nrth, and the Ichthys O&G cntract), but reprted a +9% increase in bkings cmpared with December 31, Mrever, SADE activity benefited frm a bst in business in France, partially ffset by the shift f internatinal cntracts t

10 The change in revenue between 2016 and 2017 breaks dwn by main impact as fllws: The freign exchange impact ttaled millin (-1.1% f revenue) and mainly reflects fluctuatins in the UK pund sterling ( millin), the U.S. Dllar ( millin), the Egyptian pund in Cnstructin activities ( millin) and the Argentine pes ( millin). The cnslidatin scpe impact f millin mainly cncerns develpments in 2016 : the integratin f Chemurs Sulfur Prducts divisin assets in the United States ( millin), Prague Left Bank in the Czech Republic ( 20.5 millin) and the Pedreira landfill site in Brazil ( 16.5 millin) as well as the sale f Bartin Recycling in the Waste business in France ( millin). transactins cmpleted in 2017, primarily in Asia (including Uniken fr millin and Hanbul fr millin in Krea) and in Eurpe (including Hans Anderssn fr millin in Sweden, Eurlgistik fr millin in Germany and Crvara s assets fr millin in Sweden). Cnstructin revenue rse by + 39 millin (cmpared t a substantial decline f millin in 2016), due t the increase in cnstructin assciated with public service delegatin cntracts in France in Water and Waste, SADE activity in France and the start f the cnstructin f the Springvale water treatment plant in Australia. Energy and recyclate prices had an impact f + 62 millin (versus millin in 2016), with a significant increase in recyclate prices (+ 102 millin, f which + 40 millin fr paper cmpared with + 15 millin in 2016) while energy prices declined by - 40 millin in Eurpe (PFI electricity prices in the UK, heating and electricity prices in Central Eurpe), but increased in the U.S. Cmmercial mmentum imprved significantly with the Cmmerce/Vlumes impact cntributing millin (cmpared with millin in 2016): Vlume increase f millin, in line with the rising vlumes sld in France: Water +1%, Waste +1.9%; in Central Eurpe: Water + 18 millin (including the impact f the Armenia cntract) and Energy (+ 75 millin); and in Nrthern Eurpe (higher vlumes in waste and energy in Germany); A cmmercial impact f millin thanks t numerus industrial cntract wins in Eurpe (in waste in Germany and in multi-utility industrial cntracts), a gd perfrmance in Asia (including the Sinpec cntract in China fr 60 millin), the start-up f the Mntréal hspital cntract in Nrth America, and new municipal cntracts in Latin America (Argentina and Clmbia). The favrable weather impact fr + 11 millin in Central Eurpe, despite milder weather in the furth quarter f 2017 cmpared t Favrable price effects (+ 204 millin) are tied t psitive tariff indexatin in Waste in Germany and the United Kingdm, in Water in Central Eurpe, in Electricity in Mrcc, and the significant impact f higher prices in Argentina. The change in revenue between 2016 and 2017 breaks dwn by business as fllws: 2016 / 2017 change (in millin) December 31, 2016 re-presented December 31, 2017 at cnstant exchange rates at cnstant scpe and exchange rates Water 11, , % 1.6% 1.8% Waste 8, , % 8.1% 4.7% Energy 4, , % 7.1% 5.2% Grup 24, , % 4.9% 3.5% 10

11 WATER Water revenue increased by +1.6% at cnstant exchange rates and +1.8% at cnstant cnslidatin scpe and exchange rates cmpared with re-presented figures fr the year ended December 31, This imprvement can be explained as fllws: Higher vlumes and a psitive cmmercial effect f +1.6%. The vlume increase in France (+1%) was hindered by a slightly negative cmmercial effect (- 16 millin). The rise in water vlumes inviced in Central and Eastern Eurpe (+9.4%) was primarily due t the start-up f the new cntract in Armenia. Revenue als benefited frm the impact f new industrial water develpments, ntably the Sinpec cntract in China (+ 60 millin); A slightly psitive +0.7% price impact, with increases in Central Eurpe (Czech Republic and Bulgaria) and Latin America and a minr increase in France beginning the secnd half f 2017 (+0.2% fr the full year); WASTE Cnstructin wrk which remained virtually stable (+0.1%). Waste revenue rse cnsiderably by +8.1% at cnstant exchange rates cmpared with re-presented figures fr the year ended December 31, 2016 (+4.7% at cnstant cnslidatin scpe and exchange rates), due t: Cmmercial and vlume effects f +1.8%: the decline in industrial services vlumes in the United States (divestiture annunced in January 2018) was ffset by an increase in vlumes in France, Germany and China as well as a high cntract renewal rate and numerus cntract awards, particularly in France, the UK and Germany and in Hazardus Waste; A psitive price effect f +1.4% (mainly in Latin America, Germany and the UK) The favrable impact f higher recyclate prices (+ 102 millin), particularly paper. A scpe impact f +3.4%: acquisitin f the Chemurs Sulfur Prducts divisin's assets in the United States ( millin), ffset by the sale f Bartin ( millin); ENERGY Energy revenue rse +7.1% at cnstant exchange rates cmpared with re-presented figures fr the year ended December 31, 2016 (+5.2% at cnstant cnslidatin scpe and exchange rates). This imprvement can be explained as fllws: The psitive vlumes and cmmerce effect f +4.2%, due t higher energy vlumes sld in Central Eurpe and China, the start-up f energy cntracts in Canada and energy efficiency cntract wins; A negligible weather impact (i.e. +0.2%) with a milder furth quarter in 2017; An immaterial price impact: heating and electricity prices which fell in Eurpe but rse in the U.S. A scpe impact f +1.9%, ntably related t the acquisitin f Prague Left Bank in 2016 and an energy efficiency business in the United States (Envity) in EBITDA Grup cnslidated EBITDA fr the year ended December 31, 2017 was 3,284.1 millin, up 2.7% at cnstant exchange rates cmpared t re-presented figures fr the prir year perid. The EBITDA margin decreased frm re-presented 13.3% in 2016 t 13.1% in

12 Changes in EBITDA by segment were as fllws: 2016 / 2017 change (in millin) December 31, 2016 re-presented December 31, 2017 at cnstant exchange rates France % 3.3% EBITDA margin 14.1% 14.6% Eurpe, excluding France 1, , % 0.3% EBITDA margin 16.2% 15.3% Rest f the Wrld % 10.1% EBITDA margin 14.3% 14.2% Glbal Businesses % -0.6% EBITDA margin 5.7% 5.7% Other Grup 3, , % 2.7% EBITDA margin 13.3% 13.1% In France, EBITDA recrded slid imprvement (+3.3% at cnstant exchange rates), driven by cst savings. In the Water business, EBITDA increased +3.8% in 2017, thanks t significant cst savings and higher vlumes (impact f +1.0%) which ffset the margin squeeze arising frm weak price indexatin and the impact f cntract renegtiatins. In Waste, the +2.2% increase in EBITDA was generated by a bst in revenue and cst savings. Stable EBITDA (+0.3% at cnstant exchange rates) in Eurpe excluding France as a result f several factrs: In Central and Eastern Eurpe, EBITDA rse by +1.2% due t efficiency gains and a favrable but immaterial weather impact; EBITDA declined in the United Kingdm (-1.8% at cnstant exchange rates), with the effect f plant utage and maintenance ne-ff csts ffsetting the favrable impact f recycled paper prices, peratinal efficiency and new cntracts; Lwer EBITDA in Nrthern Eurpe was mainly due t the absence f ne-ff items that benefited 2016 (litigatin payment in Belgium and insurance payment in Germany), while waste perfrmance in Germany cntinued t imprve. Cntinued strng EBITDA grwth in the Rest f the Wrld, +10,1% at cnstant exchange rates: EBITDA decreased in the United States (-0.6% at cnstant exchange rates), primarily due t the perfrmance in waste resulting frm the decline in industrial services, and maintenance utages and adverse weather cnditins (Hurricane Harvey) in Hazardus Waste, partly ffset by the gd perfrmance in Energy despite milder weather (favrable price impacts and new energy efficiency cntracts); 12

13 EBITDA rse sharply in Latin America (+27.6% at cnstant exchange rates) due t price hikes in Argentina, the start-up f new cntracts in Clmbia and the acquisitin f the Pedreira landfill site in Brazil; Sustained EBITDA grwth f +20.4% in China driven by all businesses: Municipal and Industrial Energy, Industrial Water (Sinpec) and Waste (landfill vlumes and grwth in Hazardus Waste). In the Glbal Businesses segment, the benefits f restructuring at Velia Water Technlgies and the slid perfrmance f Hazardus Waste activities (including the turnarund in the il recycling business) were ffset by the absence f favrable ne ff impacts in 2016 (indemnity payment at end f cntract). The increase in EBITDA between 2016 and 2017 breaks dwn by impact as fllws: The freign exchange impact n EBITDA was negative at - 21 millin. It mainly reflects the depreciatin f the UK pund sterling (- 20 millin), the Chinese renminbi (- 7 millin), the U.S. dllar (- 5 millin) and the Argentine pes (- 2 millin), ffset by the appreciatin f the Czech crwn (+ 9 millin) and the Plish zlty (+ 5 millin). The cnslidatin scpe impact f millin mainly reflects develpments in 2016: the integratin f Chemurs Sulfur Prducts divisin assets in the United States fr millin, Prague Left Bank in the Czech Republic fr + 8 millin and the Pedreira landfill site in Brazil fr millin. The transactins carried ut in 2017 accunted fr nearly 50% f the EBITDA scpe impacts, mainly in Asia fr millin and Eurpe fr millin (f which Hans Anderssn fr millin, Eurlgistik fr millin and the activities f Crvara fr millin). Cmmerce and vlumes impacts were psitive at + 42 millin thanks t strng cmmercial mmentum (new industrial cntracts in Eurpe and Asia, municipal cntracts in Latin America), and gd vlume grwth in Eurpe, in Waste, Water and Energy mitigating the decline in industrial services in the U.S. The weather impact was neutral fllwing a milder furth quarter in 2017 cmpared t Energy and recyclate prices psitively impacted EBITDA (+ 1 millin): heating and electricity prices changed in line with the purchase price f fuel used t prduce heat and electricity (decrease in Eurpe and increase in the U.S.). In 2017, the impact f energy prices n EBITDA was verall slightly negative, as the psitive impact f higher recyclate prices in the United Kingdm was ffset by increased fuel csts in Waste in France. The millin impact f price/cst squeeze and cntract renegtiatins mainly cncerned weak price indexatins in Water and Waste in France and the weight f cmmercial renegtiatins in France and Italy, as well as the start-up f new activities (dismantling f il platfrms in the UK, Water cntract in Armenia, etc.). Cst savings plans cntributed 255 millin, cnsistent with the annual bjective f 250 millin. They mainly cncern peratinal efficiency (45%) and purchasing (35%) and were achieved acrss all gegraphical znes: France (31%), Eurpe excluding France (24%), Rest f the Wrld (23%), Glbal Businesses (17%) and Crprate (5%). Transitry csts and ne ff items mainly cncern the nn-recurring favrable items recrded in the first half f 2016 (reslutin f a dispute in Belgium, insurance payments received in Germany and favrable cntract terminatin payment at Velia Water Technlgies), and additinal insurance and maintenance csts (particularly in the United Kingdm) which incurred in

14 3. CURRENT EBIT Grup cnslidated current EBIT fr the year ended December 31, 2017 was 1,519.4 millin, up +5.3% at cnstant exchange rates cmpared with the re-presented prir year perid. The recnciling items between EBITDA and Current EBIT fr the years ended December 31, 2017 and 2016 are as fllws: (in millin) December 31, 2016 re-presented December 31, 2017 EBITDA 3, ,284.1 Renewal expenses Depreciatin and amrtizatin (*) -1, ,703.2 Prvisins, fair value adjustments & ther: Current impairment f prperty, plant and equipment, intangible assets and perating financial assets Net charges t perating prvisins, fair value adjustments and ther Capital gains r lsses n industrials divestitures Share f current net incme f jint ventures and assciates Current EBIT 1, ,519.4 (*) Including principal payments n current perating financial assets (OFA) f millin fr the year ended December 31, 2017, cmpared with represented millin fr the year ended December 31, 2016 The imprvement in Current EBIT at cnstant exchange rates reflects: EBITDA grwth; the increase in depreciatin and amrtizatin charges at cnstant exchange rates (+5.5%), in line with the develpment f Grup activities and cnslidatin scpe impacts (primarily in the United States: Chemurs and Envity, as well as in Krea and Sweden). The decline in principal payments n perating financial assets in 2017 ( 53 millin) mainly relating t the exceptinal payments in 2016 (Dngbu in Krea, Pench IV in India and Béthune and Beauvais in France) als bears mentining; the favrable variatin in net perating prvisin reversals and net asset impairment lsses (impairment f prductin equipment in 2016 in Eastern Eurpe and prvisin reversal fr captive insurance amunting t 7 millin in 2017); a decline in capital gains r lsses n industrial divestitures fr the year ended December 31, 2017; the increase in the cntributin f equity-accunted entities, ntably in China. The freign exchange impact n Current EBIT was millin and mainly reflects fluctuatins in the UK pund sterling ( millin), and the Chinese renminbi (- 6.5 millin). 14

15 Changes in current EBIT by segment were as fllws: (in millin) December 31, 2016 re-presented December 31, / 2017 change at cnstant exchange rates France % 14.8% Eurpe, excluding France % -0.6% Rest f the Wrld % 21.6% Glbal Businesses % 2.3% Other n/a n/a Grup 1, , % 5.3% Selling, general and administrative expenses impacting Current EBIT rse frm re-presented 2,830.4 millin fr the year ended December 31, 2016 t 2,848.2 millin fr the year ended December 31, 2017, representing an increase f +0.6% (-0.3% at cnstant exchange rates). The rati f selling, general and administrative expenses t revenue imprved frm re-presented 11.7% fr the year ended December 31, 2016 t 11.3% fr the year ended December 31, This decline was attributable t the cst reductin prgram, partially ffset by the increase in cmmercial csts which helped bst cmmercial activities. 15

16 4. NÉT FINANCIAL EXPENSE (in millins) December 31, 2016 re-presented December 31, 2017 Cst f net financial debt (1) Net gains / lsses n lans and receivables Net incme (lss) n available-fr-sale assets Assets and liabilities at fair value thrugh prfit r lss Freign exchange gains and lsses Unwinding f the discunt n prvisins Interest n cncessin liabilities Other Other financial incme and expense (2) Gains (lsses) n dispsals f financial assets (*) Current net financial expenses (1)+(2) Other nn-current financial incme and expenses (**) Net financial expense (*) including csts f dispsal f financial assets (**) Essentially related t the impact f the divestment f 20% f Transdev Grup COST OF NET FINANCIAL DEBT The cst f net financial debt ttaled millin fr the year ended December 31, 2017, versus represented millin fr the year ended December 31, 2016, thanks t cntinued active debt management that ffset the higher cst f nn-eur denminated debt. The net financing rate als remains stable at 4.94% fr the year ended December 31, 2017, cmpared with 4.95% fr the year ended December 31, OTHER FINANCIAL INCOME AND EXPENSES Other current financial incme and expenses ttaled millin fr the year ended December 31, 2017, versus re-presented millin fr the year ended December 31, These expenses mainly include interest n cncessin liabilities (IFRIC 12) fr millin and the unwinding f discunts n prvisins fr millin. Fr the year ended December 31, 2017, ther current financial incme and expenses als included capital gains r lsses n financial divestitures in the amunt f 8 millin, cmpared with 12.8 millin fr the year ended December 31,

17 In additin, ther nn-current financial incme and expenses fr the year ended December 31, 2016 als included the capital gain n the divestiture f Velia Envirnnement s 20% stake in Transdev Grup in the amunt f 25.7 millin. 5. INCOME TAX EXPENSE The current tax rate fr the year ended December 31, 2017 declined t 23.9% (versus 25.9% fr the year ended December 31, 2016) after adjustment fr the impact f financial divestitures, and nn-recurring items within net incme f fully cntrlled entities and the share f net incme f equity-accunted cmpanies. This is primarily due t the imprved earnings in cuntries with lw tax rates and the repayment f the 3% tax previusly paid n dividends in France. The nn-current incme tax expense was impacted by an impairment f deferred tax assets f the US tax grup fllwing U.S. tax refrm and the crrespnding reductin in the U.S. crprate tax applicable beginning January 1 st In millin December 31, 2016 re-presented December 31, 2017 Current incme befre tax (a) Of which share f net incme f jint ventures & assciates (b) Of which gains (lsses) n dispsals f financial assets (c) Re-presented current incme befre tax : (d)=(a)-(b)-(c) Re-presented tax expense (e) Re-presented tax rate n current incme (e)/(d) 25.9% 23.9% 6. CURRENT NET INCOME / NET INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY The share f net incme attributable t nn-cntrlling interests ttaled millin fr the year ended December 31, 2017, cmpared with re-presented millin fr the year ended December 31, Net incme attributable t wners f the Cmpany was millin fr the year ended December 31, 2017, cmpared with re-presented millin fr the year ended December 31, Current net incme attributable t wners f the Cmpany was millin fr the year ended December 31, 2017, cmpared with re-presented millin fr the year ended December 31, Excluding capital gains and lsses n financial divestitures net f tax and minrity interests, current net incme attributable t wners f the Cmpany rse 7.3% at cnstant exchange rates t millin versus represented millin fr the year December 31,

18 Based n a weighted average number f utstanding shares f millin (basic), and millin (diluted), fr the year ended December 31, 2017, cmpared with millin (basic) and millin (diluted) fr the year ended December 31, 2016, net incme attributable t wners f the Cmpany per share fr the year ended December 31, 2017 was 0.61 (basic) and 0.58 (diluted) cmpared with re-presented 0.57 (basic) and 0.55 (diluted) fr the year ended December 31, Current net incme attributable t wners f the Cmpany per share was 1.13 (basic) and 1.08 (diluted) fr the year ended December 31, 2017, cmpared with re-presented 1.09 (basic) and 1.05 (diluted) fr the year ended December 31, The dilutive effect taken int accunt in the abve earnings per share calculatin cncerns the OCEANE bnds cnvertible int and/r exchangeable fr new and/r existing shares issued in March Fr the year ended December 31, 2017, net incme (lss) attributable t wners f the Cmpany breaks dwn as fllws: (In millin) Current Nn current Ttal EBIT 1, ,284.8 Cst f net financial debt Other financial incme and expenses Pre-tax incme (lss) Incme tax expense Net incme (lss) f ther equity-accunted entities Net incme (lss) frm discntinued peratins Nn-cntrlling interests Net incme (lss) attributable t wners f the Cmpany

19 Fr the re-presented year ended December 31, 2016, net incme (lss) attributable t wners f the Cmpany breaks dwn as fllws: (In millin) Current Nn current Ttal EBIT 1, ,193.3 Cst f net financial debt Other financial incme and expenses Pre-tax incme (lss) Incme tax expense Net incme (lss) f ther equity-accunted entities Net incme (lss) frm discntinued peratins Nn-cntrlling interests Net incme (lss) attributable t wners f the Cmpany The recnciliatin f Current EBIT with perating incme, as shwn in the incme statement, is as fllws: (In millin) December 31, 2016 re-presented December 31, 2017 Current EBIT 1, ,519.4 Impairment lsses n gdwill and negative gdwill Net charges t nn-current prvisins Restructuring charges Nn-current impairment lsses n WCR Persnnel csts: share-based payments Nn-current prvisins and impairment f prperty, plant and equipment, intangible assets, perating financial assets and thers Share acquisitin csts, with r withut acquisitin f cntrl Ttal nn-current items Operating incme after share f net incme f equityaccunted entities 1, ,284.8 Restructuring charges fr the year ended December 31, 2017 related t Water activities in France ( millin) and VWT ( millin). Nn-current prvisins and WCR impairment lsses mainly relate t the Industrial Multi-Services business. 19

20 D] FINANCING The fllwing table summarizes the change in net financial debt and net free cash flw: (in millin) December 31, 2016 re-presented December 31, 2017 EBITDA 3,219 3,284 Net industrial investments -1,511-1,649 Change in perating WCR Dividends received frm equity-accunted entities and jint ventures Renewal expenses Other nn-current expenses and restructuring charges Interest n cncessin liabilities Financial items (current cash financial expense, and perating cash flw frm financing activities) Taxes paid Net free cash flw befre dividend payment, financial investments and financial divestitures Dividends paid Net financial investments Change in receivables and ther financial assets Issue / repayment f deeply subrdinated securities 18 0 Prceeds n issue f shares Free cash flw Effect f freign exchange rate mvements and ther Change Net financial debt at the beginning f the perid -8,169-7,812 Net financial debt at the end f the perid -7,812-7,841 (*) The effect f freign exchange rate and ther mvements as f December 31, 2017 included the favrable impact f the U.S. dllar, the UK pund sterling, the Hng Kng dllar, the Chinese renminbi and the Brazilian real and the negative impact f the Plish zlty. Net free cash flw amunted t 655 millin fr the year ended December 31, 2017, versus re-presented 940 millin fr the year ended December 31, The decrease in net free cash flw cmpared with the year ended December 31, 2016 primarily reflects the increase in EBITDA, the increase in net industrial investments versus 2016 (- 138 millin), a change in 20

21 perating wrking capital requirements that was still psitive, but less favrable than in 2016 (- 156 millin) and an increase in tax expense f 7 millin. Overall, net financial debt amunted t 7,841 millin, cmpared with re-presented 7,812 millin at December 31, In additin t the reductin in net free cash flw cmpared t the prir year (including the variatin in perating WCR), net financial debt was impacted by net financial investments f millin, as well as favrable exchange rate fluctuatins ttaling 271 millin ver the year and dividends paid f 648 millin (including hybrid cupns f 68 millin). 1. INDUSTRIAL AND FINANCIAL INVESTMENTS 1.1 Industrial investments Ttal Grup grss industrial investments, including new perating financial assets, amunted t 1,738 millin fr the year ended December 31, 2017, cmpared with re-presented 1,597 millin fr the year ended December 31, Industrial investments, excluding discntinued peratins, break dwn by segment as fllws: December 31, 2017 (in millin) Maintenance and cntractual requirements (1) Discretinary grwth Ttal grss industrial investments (2) Industrial divestitures Ttal net industrial investments France Eurpe excluding France Rest f the Wrld Glbal Businesses Other Ttal industrial investments 1, , ,649 (1) Of which maintenance investments f 822 millin, and cntractual investments f 707 millin (2) Of which new OFA in the amunt f 112 millin 21

22 December 31, 2016 re-presented (in millin) Maintenance and cntractual requirements (1) Discretinary grwth Ttal grss industrial investments (2) Industrial divestitures Ttal net industrial investments France Eurpe excluding France Rest f the Wrld Glbal Businesses Other Ttal industrial investments 1, , ,511 (1) Of which maintenance investments f 797 millin, and cntractual investments f 594 millin (2) Of which new OFA in the amunt f 113 millin At cnstant exchange rates, grss industrial investments rse by 8.3%. Grss discretinary grwth industrial investments were stable cmpared t Financial investments and divestitures Financial investments amunted t millin fr the year ended December 31, 2017 (including acquisitin csts and net financial debt f new entities) and include the impacts arising frm the acquisitins f Crvara and Hans Anderssn (- 143 millin), Uniken (- 66 millin), the Dutch grup Van Scherpenzeel (- 56 millin), Eurlgistik -( 40 millin) and Envity (- 26 millin). Fr the re-presented year ended December 31, 2016, financial investments (- 881 millin, including the net financial debt f new entities) mainly cncerned the acquisitin f Kurin (- 296 millin), the Chemurs Sulfur Prducts divisin in the United States, the Pedreira landfill site in Brazil, and Prague Left Bank in the Czech Republic. Financial divestitures ttaled 147 millin fr the year ended December 31, 2017 (including dispsal csts) and include Affinity in the UK and Beiyuan in China. Fr the year ended December 31, 2016, financial divestitures ( 380 millin) included the sale f 20% f Transdev Grup fr 216 millin (including dispsal csts). 2. OPERATING WORKING CAPITAL The change in perating wrking capital requirements (excluding discntinued peratins) was millin fr the year ended December 31, 2017, cmpared with re-presented millin fr the year ended December 31, This decrease was attributable t the change in inventries (- 7 millin), perating receivables (+ 35 millin) and perating payables (+ 84 millin). The net WCR psitin n the balance sheet as f December 31, 2017 ttaled a resurce f 763 millin, an imprvement despite the increase in the Grup s revenue during the year. 22