Press Release Paris, May 3, 2018

Transcription

1 KEY FIGURES AS OF MARCH 31, 2018 (UNAUDITED DATA AUDIT IN PROCESS) SOLID GROWTH OF REVENUE AND RESULTS IN Q1, 2018 STRONG REVENUE GROWTH OF 7.0% 1 TO 6,419 MILLION AND +5.4% LIKE FOR LIKE EBITDA ROSE 5.3% 1, TO 876 MILLION COST SAVINGS OF 70 MILLION IN LINE WITH THE GROUP S ANNUAL OBJECTIVE CURRENT EBIT GROWTH OF 6.9% 1, TO 448 MILLION CURRENT NET INCOME - GROUP SHARE OF 193 MILLION UP 31.8% 1 AND +8% 1 EXCLUDING CAPITAL GAINS ANNUAL OUTLOOK CONFIRMED Antine Frért, Velia s Chairman and CEO indicated: We have accmplished a very gd start f the year, cnfirming the pertinence and the gd executin f ur strategic plan. Sales grwth was amplified quarter after quarter, with this sixth cnsecutive quarter f sustained prgressin f activity, supprted by gd cmmercial mmentum, particularly utside f France. Results als prgressed at a very gd rhythm, driven by sales grwth and by the acceleratin f cst reductin effrts in line with the annual bjective f 300 millin. The perfrmance accmplished in the first quarter allws us t be very cnfident in the achievement f ur full year bjectives. Grup cnslidated revenue increased by +7.0% at cnstant exchange rates (+3.7% at current exchange rates) t 6,419 millin, vs. 6,191 millin in Q1, 2017 restated. 1 After IFRS 5 adjustments and at cnstant exchange rates. Published data (at current exchange rates): Revenues grwth f 3.7%, EBITDA grwth f 3.4%, Current EBIT grwth f 4.8%, Current net prfit attributable t grup up 25.7%, and up 5.7% excluding capital gains 1

2 Exchange rate variatins had an unfavrable impact f 204 millin. The decline in recycled material prices had a mderate impact f - 20 millin (- 26 millin just fr paper), mre than ffset by the increase in energy prices (+ 70 millin). At cnstant scpe and exchange rates, grwth std at 5.4%. Excluding the IFRS 5 restatement f Gabn activities, revenue prgressin was 5.6% at cnstant exchange rates. The strng revenue grwth f 432 millin at cnstant exchange rates was the result f increases in each f the gegraphic znes with the fllwing breakdwn: In France, activity was stable (+0.6%) at 1,311 millin. Water returned t grwth (+2.2%) thanks t better price indexatins (+0.6% vs. -0.3% in Q1 2017) and cntract wins in spite f a reductin in vlumes f -0.8%. In Waste, activity was dwn by 0.9% at cnstant scpe, but up 2% excluding the impact f the reductin in recycled material prices which weighed 3.5% n revenue, thanks t vlume increases (+2.3%), particularly in cmmercial cllectin and landfills. Eurpe excluding France grew by +6.9% 2 t 2,443 millin. The UK was up 4.0% 2 thanks t gd availability f PFIs (98% vs. 95% in Q1 2017), increases in the price f electricity sld, and a cntinued gd cmmercial dynamic. Central Eurpe prgressed by 6.3% 2, bsted by a cld winter and higher energy prices. Nrthern Eurpe grew by 11.8% 2 due t favrable scpe effect in Scandinavia and gd mmentum in Germany in Waste. Rest f the Wrld nce again psted the strngest grwth in revenues, +14.7% 2 t 1,612 millin. All cuntries shwed strng grwth. Nrth America was up 10.1% 2 with strng sales develpment acrss all activities, and thanks t the cld winter. Latin America grew by 22.5% 2 due t cntract wins and significant price increases. Asia grew by 21.1% 2 supprted by strng mmentum in Waste, the extensin f district heating at Harbin and Industrial cntract gains. The Pacific zne shwed an increase f 13.1% 2, while Africa Middle East als recrded a slid prgressin f +9.9% 2. Glbal Businesses were up 3.5% 2 t 1,046 millin. The cntinuatin f slid grwth in Hazardus Waste (+7.6% 2 ) and at Velia Industrial Glbal Services (+8.5% 2 ) was limited by cntinued weak cnstructin (Velia Water Technlgies revenue was dwn 9.2% 2, partially ffset by the 6.7% 2 grwth f SADE still perfrming well in France). By activity, at cnstant exchange rates, Water was up 3.5%, Waste by 9.6% with a 3% verall vlume increase, and Energy by 9.0%. EBITDA imprved by +3.4% at current exchange rates and +5.3% at cnstant exchange rates t 876 millin vs. 847 millin in Q1, 2017 restated EBITDA grwth benefited frm: Sustained revenue grwth Cst savings f 70 millin. A reduced price cst squeeze thanks t imprved price indexatin (- 28 millin vs millin in Q ) A small negative impact f lwer recycled materials prices (- 1 millin) and the temprary pinching effect (- 12 millin) due ntably t the increase in energy prices in Central Eurpe. The negative exchange rate effect (- 16 millin) was ffset by the scpe effect (+ 17 millin). Excluding the IFRS 5 restatement in Gabn, EBITDA grwth was +3.3% at cnstant exchange rates. 2 At cnstant exchange rates 2

3 Current EBIT increased by +4.8% at current exchange rates, and +6.9% at cnstant exchange rates t 448 millin vs. 428 millin in Q restated. Current EBIT grwth is the result f the increase in EBITDA and in the cntributin frm equityaccunted jint ventures and assciates. The impact f prvisins during the first quarter was nt significant. Excluding the IFRS 5 restatement fr Gabn, current EBIT increased by 6.4%. Current net incme Grup share was 193 millin vs. 154 millin in Q restated, exhibiting strng grwth at current exchange rates (+25.7%), and +31.8% at cnstant exchange rates. Excluding capital gains and at cnstant exchange rates, the grwth rate was +8%. Net Financial Debt amunted t 8,213 millin, dwn vs. 8,418 millin in March 31, 2017 restated. It included an increase in industrial investments f 17% t 307 millin and net financial acquisitins f 280 millin since March After cnsideratin f the reimbursement f the hybrid debt in April 2018, Net Financial debt std at 9,665 millin. ****************** In light f the gd start f 2018, the grup cnfirms it utlk (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 *at cnstant exchange rates (based n rates at the end f 2016) Velia grup is the glbal leader in ptimized resurce management. With nearly 169,000 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, t preserve available resurces, and t replenish them. 3

4 In 2017, the Velia grup supplied 96 millin peple with drinking water and 62 millin peple with wastewater service, prduced nearly 55 millin megawatt hurs f energy and cnverted 47 millin metric tns f waste int new materials and energy. Velia Envirnnement (listed n Paris Eurnext: VIE) recrded cnslidated revenue f billin in 2017 (USD 30.1 billin). 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 requiring significant financial and human resurces, 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 Tél : + 33 (0) sandrine.guendul@velia.cm Investr & Analyst Relatins Rnald Wasylec - Ariane de Lamaze Tél. : + 33 (0) / QUARTERLY FINANCIAL INFORMATION FOR THE THREE MONTHS ENDED MARCH 31,

5 A] PREFACE GABON Velia, thrugh its 51% subsidiary, SEEG, manages the distributin f drinking water and electricity thrughut all Gabn under the terms f a cncessin agreement signed in 1997 and extended fr five years in March On February 16, 2018, the Gabnese Republic unilaterally terminated the cncessin agreement signed with the Grup s subsidiary, SEEG Sciété d énergie et d eau du Gabn, (Gabn Energy and Water Cmpany), alleging reasns f general interest. The same day, thrugh Ministerial rder, all material and human resurces were seized by the Gabnese Republic. A further Ministerial rder als appinted an executive bdy t implement terminatin and seizure measures. As f March 31, 2018, the cessatin f activities in Gabn led the Grup t classify SEEG in net incme frm discntinued peratins in accrdance with IFRS 5. Figures fr the three mnths ended March 31, 2017 were represented accrdingly t ensure cmparability, fllwing the reclassificatin f the Grup s activities in Gabn in Net incme frm discntinued peratins in accrdance with IFRS 5. NORMATIVE EVOLUTIONS With effect frm January 1, 2018, the Grup applies IFRS 9, the new financial instruments standard, which replaces IAS 39 (see chapter 4 nte f the 2017 registratin dcument). The new standard prvides fr the retractive applicatin f the classificatin and measurement rules applicable t financial assets and liabilities and, in particular fr the Grup, new impairment methdlgies fr trade receivables and an adjustment t the amrtized cst f renegtiated bnd issues. The impact in the incme statement n EBITDA and current EBIT f the restatements resulting frm the first-time applicatin f this standard were nt material (see Appendix Prfrma impact Q1 2017). The applicatin f IFRS 15 as f January 1, 2018 (see Chapter 4, Nte f the 2017 Registratin Dcument relating t the single revenue recgnitin mdel applicable t all types f cntracts cncluded with custmers and all business segments), des nt generate a significant impact n the Grup's financial statements as at March 31, Wrk t adapt the ntes in preparatin will enable the Grup t meet the publicatin requirements f this new standard fr the publicatin f the first half f B] KEY FIGURES Variatins 2017 / 2018 (in millin) Three mnth Three mnth Three at cnstant 5

6 ended March 31,2017 published ended March 31, 2017 represented (3) mnth ended March 31, 2018 exchange rates Revenue 6,270 6,191 6, % 7.0% EBITDA % 5.3% EBITDA Margin 13.8% 13.7% 13.6% Current EBIT (1) % 6.9% Current Net incme - Grup share % 31.8% Current net incme - Grup share, excluding capital gains and lsses n financial divestitures net f tax % 8.0% Industrial capex Net free cash-flw (2) Net financial debt -8,430-8,418-9,665 (1) Including the share f current net incme f jint ventures and assciates viewed as cre Cmpany activities. (2) Net free cash flw crrespnds t free cash flw frm cntinuing peratins, and is calculated by: the sum f EBITDA, dividends received, changes in perating wrking capital and perating cash flw frm financing activities, less net interest expense, net industrial investments, taxes paid, renewal expenses, restructuring charges and ther nn-current expenses. (3) In rder t ensure the cmparability f perids, the three mnth perid ended March 31, 2017 has been adjusted fr the reclassificatin f the Grup's activities in Gabn t "Net incme (lss) frm discntinued peratins" pursuant t IFRS 5 The main freign exchange impacts were as fllws: FX impacts fr the three mnths ended March 31, 2018 (vs March 31, 2017 re-presented) % (in millin) Revenue -3.3% -204 EBITDA -1.8% -16 Current EBIT -2.2% -9 Current net incme -6.0% -9 Net financial debt -4.6% -386 C] INCOME STATEMENT 1. GROUP CONSOLIDATED REVENUE 6

7 Grup cnslidated revenue fr the three mnths ended March 31, 2018 increased 7.0% at cnstant exchange rates t 6,419.4 millin, cmpared t a re-presented 6,191.2 millin fr the three mnths ended March 31, Excluding Cnstructin (3) revenue and energy price effects, revenue imprved by +4.6% cmpared t +5.9% in Q By segment, the change in revenue cmpared with represented figures fr the three mnths ended March 31, 2017 breaks dwn as fllws: Change 2017 / 2018 at Three mnths at cnstant cnstant ended March Three mnths exchange scpe and 31, 2017 ended March rates exchange (in millin) re-presented 31, 2018 rates France 1, , % 0.6% 0.7% Eurpe, excluding France 2, , % 6.9% 3.3% Rest f the wrld 1, , % 14.7% 14.4% Glbal Businesses 1, , % 3.5% 2.6% Other % - - Grup 6, , % 7.0% 5.4% Revenue increased +0.6% in France and +0.7% at cnstant scpe cmpared t re-presented figures fr the three mnths ended March 31, 2017: Water revenue increased +2.2%, while Waste revenue fell -1.3% at current scpe: Water revenue rse by +2.2% cmpared t re-presented figures fr the three mnths ended March 31, 2017, impacted by tariff indexatin (+0.6%), and partially ffset by lwer vlumes sld (-0.8%); Waste revenue fell -1.3% (and -0.9% at cnstant scpe) cmpared t re-presented figures fr the three mnths ended March 31, 2017, with lwer recyclate prices (-3.5%) ffset by higher vlumes (+2.3%). Eurpe excluding France grew 6.9% at cnstant exchange rates cmpared t re-presented figures fr the three mnths ended March 31, 2017, with slid mmentum in the majrity f regins: In the United Kingdm/Ireland zne, revenue increased 4.0% at cnstant exchange rates t millin, due t an increase in electricity tariffs, gd PFI availability and industrial service cntract wins; In Central and Eastern Eurpe, revenue increased 6.3% at cnstant exchange rates t millin. Grwth was driven by: in Energy, a favrable weather impact (+ 12 millin), an increase in heating and electricity vlumes sld, and the impact f recent develpments in Hungary; in Water, a slight increase in vlumes sld and higher tariffs acrss all cuntries (Bulgaria, Czech Republic, Rmania and Slvakia); (3) 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 in Waste, small acquisitins (in Hungary and Czech Republic). In Nrthern Eurpe, revenue increased +11.8% at cnstant exchange rates t millin. Germany, the main cntributr ( millin), benefited frm strng Waste activities reprting revenue f millin (cmpared t millin fr the three mnths ended March 31, 2017). The revenue impact f the 2017 tuck-ins ffset the fall in recyclate paper prices and lwer energy vlumes. Strng grwth in the Rest f the Wrld, +14.7% at cnstant exchange rates cmpared t re-presented figures fr the three mnths ended March 31, 2017 : Revenue rse 10.1% at cnstant exchange rates t millin in Nrth America, mainly due t strng grwth in Energy (price and vlume increases due t cld weather), cmmercial wins in Energy and Industrial Water, and higher vlumes in hazardus waste. Strng revenue grwth in Latin America (+22.5% at cnstant exchange rates) t millin thanks t tariff increases in Argentina and cmmercial develpment in Clmbia and Ecuadr; Revenue in Asia increased by 21.1% at cnstant exchange rates t millin. Strng revenue grwth in China (+14.7%) was due t increased vlumes in Hazardus Waste, increased sales f heating netwrks (Harbin), partially ffset by lwer Water sales (end f Chengdu BOT cntract). Revenue grwth in Japan was driven by an increase in Engineering wrks in Municipal Water. In Krea, the increase in revenue was due t higher tariffs in Water and Waste and increased cnstructin wrks in Water; the Pacific zne recrded 13.1% revenue grwth at cnstant exchange rates fr the three mnths ended March 31, 2018, due t higher waste vlumes prcessed (+ 8 millin) and the start-up f the new Springvale cntract in Water; In Africa/Middle East, revenue increased 9.9% at cnstant exchange rates, with a favrable vlume impact in Mrcc (weather effect and increase in number f custmers) and cnstructin wrk fr the Redal cntract. Glbal businesses: revenue increased by 3.5% at cnstant exchange rates versus the re-presented prir-year perid: Hazardus Waste activities increased by 7.6% at cnstant exchange rates, mainly due t strng il recycling activities and an increase in vlumes prcessed; Design & Build activities remained dwn by -9.2% at cnstant exchange rates, with the slw startup f activities in Nrth America, France and the rest f Eurpe. The delivery f majr prjects in Latin America was ffset by the develpment f majr prjects in the Middle East and China. Backlg increased by +10% cmpared t March 31, The increase in revenue between 2017 and 2018 breaks dwn by main impact as fllws: The freign exchange impact n revenue was millin (-3% f revenue) and mainly reflects fluctuatins in the U.S. dllar ( millin), the Australian dllar ( millin), the Argentine pes (- 17 millin), the pund sterling ( millin), the Chinese renminbi ( millin) and the Japanese yen ( millin). The cnslidatin scpe impact f millin mainly relates t: 2017 develpments : integratin f Crvara industrial assets and Hans Anderssn in Scandinavia (+ 44 millin), Van Scherpenzeel Grpe B.V. in the Netherlands (+ 14 millin) and the acquisitin f Eurlgistik in Germany in July 2017 (+ 8 millin); 8

9 2018 transactins, which include the sale f the Industrial Services Divisin in the United States (- 41 millin). Energy and recyclate prices had an impact f + 50 millin, fllwing a significant drp in recyclate prices (- 18 millin, including - 26 millin fr paper) and an increase in energy prices f + 70 millin especially in the United States. Cmmercial mmentum imprved significantly (Cmmerce/Vlumes impact) t millin: vlume increase f millin, in line with higher vlumes (France, United Kingdm, Latin America and Asia), vlume develpment in hazardus waste and slid cnstructin activity especially at Sade in France, in water business in Australia (Springvale prject) and in Mrcc; a cmmercial effect f + 47 millin, due t numerus industrial cntract wins in Eurpe (in Waste in Germany and Iberia with new energy efficiency cntracts), the United States (cntract wins in Industrial Water and Energy) and Latin America (cntract wins in Water in Argentina and Clmbia and in Waste in Chile and Brazil); a favrable weather impact f + 17 millin in Central Eurpe and the United States. Favrable price effects (+ 47 millin) are tied t psitive tariff indexatin in France, in the United Kingdm in Waste, in Central Eurpe in Water, in Nrth America in Water and Hazardus Waste, in Mrcc in electricity, and the significant impact f higher prices in Latin America. By business, the increase in revenue breaks dwn as fllws: (in millin) Three mnths ended March 31, 2017 re-presented Three mnths ended March 31, 2018 Change 2017 / 2018 at cnstant exchange rates at cnstant scpe and exchange rates Water 2,554 2, % 3.5% 3.8% Waste 2,154 2, % 9.6% 4.3% Energy 1,483 1, % 9.0% 9.9% Grup 6,191 6, % 7.0% 5.4% WATER Water revenue increased by +3.5% at cnstant exchange rates and +3.8% at cnstant scpe and exchange rates cmpared t re-presented figures fr the three mnths ended March 31, This imprvement can be explained as fllws: - A psitive vlume / cmmercial effect f +0.5% with cntinued rbust cmmercial mmentum in Rest f the Wrld (mainly in Latin America), which ffsets the reduced vlumes in France; - A psitive price impact f +1.7% with higher tariffs in Central Eurpe, Nrthern Eurpe and in the Water activity in France (+0.6%); 9

10 - Slid cnstructin activity (+1.6%) in Australia (Springvale facility) and in Mrcc; slw start f the year fr VWT but gd activity at Sade in France. WASTE Waste revenue rse cnsiderably by +9.6% at cnstant exchange rates cmpared t re-presented figures fr the three mnths ended March 31, 2017 (+4.3% at cnstant scpe and exchange rates) due t: - A scpe impact f +5.3%: acquisitins in Germany and in Nrthern Eurpe, ffset by the sale f the industrial services activity in the United States f America. - Cmmercial and vlume effects f +3.0% with increasing vlume, waste cllectin, and waste treatment in France, Asia and Germany, an increase f vlumes in Hazardus waste and als a gd renewal rate f cntracts in France, United Kingdm and in Germany; - A psitive price effect f +1.1% (mainly in Latin America, Asia and the UK); - The negative impact f higher recyclate prices (-0.8%, partly due t the reductin f paper prices). ENERGY Energy revenue rse +9.0% at cnstant exchange rates cmpared t the March 31, 2017 re-presented figures (+9.9% at cnstant scpe and exchange rates). This imprvement can be explained by: - A psitive price effect (+3.5%) with a strng increase f heat and electricity prices in the United States f America; - A psitive weather impact (i.e. +1.1%) particularly in Central Eurpe and Nrth America; - Cmmercial and vlume effect f +2.5% in Central Eurpe in relatin with weather, and due t the develpment f new energy activities (energy efficiency and bimass) in Asia and Nrth America and f multi utility industrial activities. 2. EBITDA Grup cnslidated EBITDA fr the three mnths ended March 31, 2018 is millin, up 5.3% at cnstant exchange rates frm Q re-presented. The EBITDA margin decreased frm 13.7% in Q represented t 13.6% in Q Changes in EBITDA by segment were as fllws: In France, EBITDA slightly decreased: In Water, EBITDA was up, driven by revenue grwth and cst savings; In Waste, EBITDA was dwn due t the fall in recyclate prices (-27% fall in the average selling price f paper and cardbard cmpared t Q1 2017). 10

11 The slight imprvement in EBITDA in Eurpe excluding France at cnstant exchange rates was the result f several impacts: In Central and Eastern Eurpe, EBITDA decreased due t higher fuel prices in Energy in the Czech Republic and Pland; this decrease was partially ffset by perating efficiency gains and a favrable weather effect; Slid grwth f EBITDA in the United Kingdm, with an imprved availability f incineratin plants, impact f new cntracts, partially ffset by lwer paper prices; EBITDA strngly up in Nrthern Eurpe, due t scpe transactins perfrmed in 2017 in Scandinavia, Netherlands and Germany, and perating efficiency gains. Cntinued strng EBITDA grwth in the Rest f the wrld: Sharp imprvement in the United States: favrable weather in Energy driving energy prices, spark spreads and vlumes. Higher EBITDA in Latin America due t new cntracts in Water and Waste, tariff increases in Waste, and efficiency gains; Sustained EBITDA grwth in Asia driven by revenue grwth in Energy and Waste, partially ffset by negative weather impacts and cmpletin f the Chengdu BOT cntract in China (municipal water). In the Glbal Businesses segment, gd hazardus waste perfrmance (including the imprvement in the il recycling business) was ffset by the slw start f cnstructin activities in Q in Velia Water Technlgies. The evlutin f EBITDA between 2017 and 2018 breaks dwn by impact as fllws: The freign exchange impact n EBITDA was - 16 millin and mainly reflects fluctuatins in the U.S. dllar (- 9.4 millin), the Chinese renminbi (- 3.6 millin), the pund sterling (- 2.0 millin) and the Argentine pes (- 1.6 millin). The cnslidatin scpe impact f + 17 millin partially relates t develpments in 2017, f which the integratin f Crvara industrial assets and Hans Anderssn in Scandinavia and acquisitins in Germany (Eurlgistik) and in the Netherlands (Van Scherpenzeel Grpe B.V.). Cmmerce and vlume impacts ttaled + 19 millin thanks t strng vlume grwth in Central Eurpe in Water and Energy, vlumes f waste in France ffsetting lwer Water vlumes, strng cmmercial develpment in Asia (waste and energy) and in Latin America (new cntracts in Water and Waste). The weather impact n EBITDA was favrable verall, with strng disparities between Central Eurpe (favrable effect in Pland and the Czech Republic) and Asia (negative effect). Energy and recyclate prices had a negative impact n EBITDA (- 13 millin): the significant increase in fuel prices in Central Eurpe and the negative impact f paper prices (- 5 millin fr France, Germany and the United Kingdm) are partially ffset by the increase f heating and electricity tariffs in the United States and Nrthern Eurpe. 11

12 The - 28 millin impact frm the price squeeze and cntractual renegtiatins mainly relates t weak price indexatin in Water and Waste in France which nly partially cver pressure n wages increase and ther csts. Cst-savings plans cntributed 70 millin. These savings mainly cncern peratinal efficiency (47%) and purchasing (33%) and were achieved acrss all gegraphical znes: France (25%), Eurpe excluding France (28%), Rest f the wrld (20%), Glbal businesses (15%), and Crprate (12%). The guidance f 300 millin fr year 2018 is cnfirmed. 3. CURRENT EBIT Grup cnslidated current EBIT fr the three mnths ended March 31, 2018 was millin, up 6.9% at cnstant exchange rates frm Q re-presented. Recnciling items between EBITDA and Current EBIT are as fllws: (in millin) Three mnths ended March 31, 2017 re-presented Three mnths ended March 31, 2018 EBITDA Renewal expenses Depreciatin and amrtizatin (1) Prvisins, fair value adjustments & ther (2) : Current EBIT (1) Including principal payments n perating financial assets (OFA) f - 31 millin fr the three mnths ended March 31, 2018 (cmpared t - 37 millin fr the three mnths ended March 31, 2017 re-presented.) (2) Including prvisin, assets depreciatins, industrial capital gains and share f current net incme f jint ventures and assciates The imprvement in current EBIT at cnstant exchange rates reflects: EBITDA grwth; The increase in depreciatin and amrtizatin charges at cnstant exchange rates (- 9.8 millin r +2.6% cmpared t the three mnths ended March 31, 2017), in line with the develpment f the Grup s activities and cnslidatin scpe impacts. The decline in principal payments n perating financial assets in 2018 (frm - 37 millin t - 31 millin) mainly relating t cntract cmpletins in 2017 (including Chengdu in China) is als f nte; The unfavrable change in net perating prvisins and net impairment lsses n assets: Reversal f the prvisin fr captive insurance ( 12 millin) in March 2017 Industrial capital gains slightly belw that f March 2017 (+ 2.3 millin as f March 31, 2018 cmpared t millin in March 2017). Partly ffset by an imprvement f the cntributin frm equity jint-ventures and assciates 12

13 The freign exchange impact n Current EBIT was millin and mainly reflects fluctuatins in the U.S. dllar (- 8.1 millin), the Chinese renminbi (- 3.0 millin), the Argentine pes (- 1.3 millin) and the pund sterling (- 1.1 millin), partially ffset by favrable fluctuatins in the Czech crwn (+ 6.0 millin). 4. NET FINANCIAL EXPENSE Net finance csts fell t millin fr the three mnths ended March 31, 2018, cmpared t a re-presented millin fr the three mnths ended March 31, This decrease is mainly due t the benefits f active debt management. Other financial incme and expenses ttaled - 7 millin fr the three mnths ended March 31, 2018, cmpared t a re-presented millin fr the three mnths ended March 31, These expenses mainly include interest n cncessin liabilities (IFRIC 12) f millin and the unwinding f discunts n prvisins f millin, steady cmpared t March 31, Fr the three mnths ended March 31, 2018, ther financial incme and expenses included capital gains r lsses n financial divestitures f 36.9 millin (capital gain n financial dispsal f Industrial Services in Nrth America), cmpared t 1.4 millin fr the three mnths ended March 31, 2017, re-presented. 5. INCOME TAX EXPENSE The incme tax expense is 86.9 millin. This amunt includes taxatin f capital gains n the dispsal f Industrial Services in the United States fr $9 millin. The current incme tax expense n March 31, 2018 is 27.9% excluding capital gains tax. 6. CURRENT NET INCOME Current net incme attributable t wners f the Cmpany was millin fr the three mnths ended March 31, 2018, cmpared t millin fr the three mnths ended March 31, 2017 re-presented. This imprvement is attributable t the increase in current EBIT, the decrease in the net finance cst and higher capital gains n financial divestitures in Q (dispsal f the Industrial Services Divisin in the United States) cmpared t Q re-presented. Excluding capital gains and lsses n financial divestitures net f tax and minrity interests, current net incme attributable t wners f the Cmpany rse 8.0% at cnstant exchange rates t millin frm millin fr the three mnths ended March 31, 2017 re-presented. D] FINANCING (in millin) Three mnth ended March 31, 2017 re-presented Three mnth ended March 31, 2018 EBITDA Net industrial investments Change in perating WCR

14 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 Opening net financial debt -7,813-7,837 Clsing net financial debt -8,418-9,665 Net free cash flw was millin fr the three mnths ended March 31, 2018, cmpared t millin in Q re-presented. The year-n-year change in net free cash flw mainly reflects the increase in net industrial investments cmpared t Q (- 47 millin) and the wrking capital evlutin f - 75 millin (in line with the develpment f Grup activities), partially ffset by an increase in dividends received frm assciates. Overall, net financial debt is 9,665 millin (i.e. 8,213 millin excluding the redemptin f the hybrid debt in the amunt f 1,452 millin in April 2018), cmpared t 8,418 millin as f March 31, 2017 re-presented. In additin t the change in net free cash flw, net financial debt was impacted by favrable exchange rate fluctuatins ttaling 45 millin in Q

15 APPENDIX Recnciliatin f 2017 published data fr the three mnths ended March 31, 2017 with represented data (1) (in m) March 2017 published IFRS 9 IFRS 5 Adjustment Adjustement (3) March 2017 represented Revenue 6, ,191.2 EBITDA Current EBIT (2) Operating Incme Current net incme Grup share Grss industrial investments Net free cash-flw Net financial debt -8, ,418 (1) Unaudited figures (2) Including the re-presented share f current net incme f jint ventures and assciates fr the three mnths ended March 31, (3) Figures fr the three mnths ended March 31, 2017 were re-presented accrdingly t ensure cmparability, fllwing the reclassificatin f the Grup s activities in Gabn in Net incme frm discntinued peratins in accrdance with IFRS 5. (in m) March 2017 published IFRS 5 Adjustment IFRS 9 Adjustment March 2017 represented France 1, ,0 0,0 1,302.9 Eurpe excluding France 2, ,0 0,0 2,274.6 Rest f the Wrld 1, ,0 1,569.4 Glbal businesses 1, ,0 0,0 1,036.6 Other 7.7 0,0 0,0 7.7 Ttal Revenue 6, ,0 6,