2017 Annual Results. February 22, 2018

Transcription

1 2017 Annual Results February 22, 2018

2 Disclaimer Veolia Environnement is a corporation listed on the Euronext Paris. This document contains forward-looking statements within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risk that changes in energy prices and taxes may reduce Veolia Environnement s profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement s contracts, the risk that acquisitions may not provide the benefits that Veolia Environnement hopes to achieve, the risks related to customary provisions of divesture transactions, the risk that Veolia Environnement s compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnement s financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, as well as the other risks described in the documents Veolia Environnement has filed with the Autorités des Marchés Financiers (French securities regulator). Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward-looking statements. Investors and security holders may obtain from Veolia Environnement a free copy of documents it filed ( with the Autorités des Marchés Financiers. This document contains "non GAAP financial measures". These "non GAAP financial measures" might be defined differently from similar financial measures made public by other groups and should not replace GAAP financial measures prepared pursuant to IFRS standards. Unaudited key figures 2

3 2017 Annual Results Highlights Antoine Frérot, CEO 3

4 Overall 2017 performance better than expected, marked by strong revenue growth Strong revenue growth: +4.9% at constant FX (+3.5% like-for-like) to 25,125M Acceleration of revenue growth in Q4: 6.3% at constant FX (+4.4% lfl) Improvement in France Continued strong growth outside France, with an acceleration in the Rest of the World Stabilization in Global Businesses, with a strong increase in hazardous waste, while Construction activity improved o Results growth better than expectations, sharp acceleration in H2 o o o o EBITDA up 2.7% at constant FX to 3,284M, (+0.4% in H1 followed by +4.8% in Q3 and +5.2% in Q4) (+) Strong revenue growth (+) Cost savings of 255M in line with the annual objective (-) Weak price indexation (-) Higher transitory costs and non recurrence of 2016 favorable one offs Current EBIT improved 5.3% at constant FX to 1,519M Current net income up 6.1% at constant FX to 623M and +7.3% at constant FX excluding net financial capital gains Net FCF (after growth capex) of + 655M Stable net financial debt at 7,841M. 4

5 years of strong results and FCF growth EBITDA : +5% CAGR Current EBIT : +15% CAGR Current net income : +36% CAGR * 2017* * 2017* Cumulative Net Free Cash Flow after growth capex: 2.8bn ~ 80% dedicated to dividends ~20% allocated to net financial investments * excluding the impact of IFRIC 12 (i.e. figures are comparable) 5

6 : Strong improvement in the Group s returns Post-Tax ROCE of 8.4% in 2017 Current EBIT after taxes ( M) Average capital employed ( M) Post-Tax ROCE (%) ,180 1,250 1,314 15,859 15,781 15, % 7.9% 8.4% The Group s Euro area WACC is 5.8% 7.9% 7.4% IFRIC 12 6,8% 8.4% 5,0% 5,5% 2013* 2014* Post-Tax ROCE = Current EBIT including share of net income of equity-accounted entities current income tax expense / Average capital employed including operating financial assets and including investments in joint ventures and associates * Calculated according to the previous method based on net income from operations and before IFRIC 12 6

7 : Regular dividend increases Further dividend growth in 2017 Proposal to increase DIVIDENDES the dividend : by 5% to +5%/an 0.84 per share: +20% over 3 years +5% +10% per share +4% 0,80 0, ,70 0, * * Subject to the approval of shareholders at the Annual General Shareholders Meeting 7

8 Ambitious and sustainable cost savings plans Annual savings in M : 952M in savings : 952M in cumulative savings, including 255M achieved in (Transformation) 802M in savings 2017 savings: 255M France 17% 5% 31% 20% 35% Purchasing Europe excluding France Rest of the World Operations Global Businesses HQ 23% SG&A 45% 24% 8

9 Since the end of 2016, the resumption of revenue growth has strengthened results improvement o A stronger commercial organization o Revitalization of the commercial team o Commercial resources increased by 40M in 2017 o Mission of the Development, Innovation and Markets group refocused on winning new business o Structured approach for the deployment of high potential group offers: selection of 14 key successful offers with the potential for replication in targeted geographies o Strengthening of the industrial key accounts program launched in 2014: 30 key accounts chosen from leaders within Veolia s priority markets o Mobilization of internal groups dedicated to development (priority markets, key offers, key accounts, development, technical excellence) o sales development plan being deployed in each country o has driven a strong acceleration in revenue growth in 2017: +4.9% at constant FX and +3.5% like-for-like o The majority of which was attributable to our commercial efforts o which should continue in

10 2017: The main drivers of our organic growth Cities Industrial clients 2017 Examples 2017 Examples Lille (Halluin): O&M WTE facility: recovery of heat from household waste supplying 2 urban heating networks in Roubaix and Lille Revenue: 295M over 12 years Valenton (Ile de France): wastewater treatment, real time supervision of infrastructure in a centralized location, planning tools Revenue of 400M over 12 years Hamamatsu (Japan): wastewater treatment, improved monitoring & asset maintenance Revenue of 450M over 20 years South London: Collection of household and commercial waste, street cleaning, recycling and waste recovery Revenue of 238M over 8 years Mexico: Design, build and O&M of largest WTE facility in Latin America to treat nearly 1.6 million tons of household waste per year. =>1/3 of the city household waste will be transformed into green energy directly powering the metro system of Mexico City Revenue of 886M over 30 years Greater Matale (Sri Lanka): Construction of 5 new water treatment plants, reservoirs, pumping stations, distribution network providing drinking water access for 350,000 people Revenue: 156M Lille (Ovilléo) wastewater treatment and energy recovery from sludge. Station located downtown: maximum odor & noise limitation Revenue of 40M over 5 years Inclusive Smart Circular Livable Water Waste Energy Traditional offers: Operations/Services Construction New layers of added value Beijing Data Center: supply of chilled water and reduced site energy consumption in order to conform to new regulations implemented in Beijing regarding information systems energy efficiency Revenue of 188M over 20 years Dubai Financial Center : energy services Revenue of 30M over 5 years Hongda Chemicals (China): Energy services Steam and electricity supply via a new 25MW turbine Renovation and operation of the plant s boilers Revenue of 335M over 10 years Springvale Mine & Energy Australia: DBOOT of a new water treatment plant for the mine, including brine treatment, and construction of a pipe to supply treated water to the Mount Piper power plant Revenue of $AUD400M over 17 years Project financed in partnership with Infrastructure Capital Group Antero Resources (Oil & Gas upstream): produced water treatment, treatment & recycling of complex waste Revenue up to $70M over 10 years Danone: management of the water cycle and waste recycling and recovery Bookings: 106M 10

11 2017:... are complemented by small, targeted acquisitions Financial investments of 565M o Recycling (paper & plastic) Sweden: Hans Andersson: 2017 revenue: 176M EV: 101M o Industrial waste Sweden: Corvara: 2017 revenue: 50M EV: 42M o Sorting & recycling Germany: Eurologistik: 2017 revenue: 45M EV: 40M o Industrial waste Korea: Uniken: 2017 revenue: 28M EV: 66M o Energy services USA: Enovity: 2017 revenue: 33M EV: 26M Average acquisition multiple: 7.5x EBITDA Asset arbitrage 147M in assets divested in 2017 Facility Management activities in Sweden for 65M Affinity Water stake in the UK for 40M o Divestitures at the beginning of 2018 Agreement signed to sell the US Industrial Services business to Clean Harbors for $120M Closing expected in 1Q 2018 Average divestment multiple: 10x EBITDA 11

12 2018: Growth (1/2) Our actions Continuation of organic growth From a solid, perennial and growing base By geography: France+, Europe ++, Rest of the World +++ In the most dynamic sectors: Hazardous Waste, Circular Economy, Food & Beverage, Pharmaceuticals, Mining & Metals, Oil & Gas With continued deployment of our key offers, in different geographies and our structured approach to key industrial client accounts being able to deploy new economic models: Asset co / Op co model Sharing the value created with the client Mutualization of the utilization of an industrial asset taken over from a client Reinforced by creativity and innovation to prepare for tomorrow s challenges Organic fertilizers Endocrine disrupters Digitalization of operations Micro grids, etc Acquisitions / targeted tuck ins Plastics recycling Energy efficiency Hazardous waste treatment 12

13 2018: Growth (2/2) The business environment o Favorable macroeconomic environment, but with contrasting implications for the Group o Industrial Production: positive dynamics in the majority of geographies o Slightly positive inflation in Europe o Energy prices: up in Europe => higher fuel costs in Eastern Europe, while cost recovery through price indexation will only be felt in 2019 o Recycled raw material prices: down since 4Q 2017 o Construction business environment: improvement in 2017, to be confirmed in 2018 o Impact of contractual evolution o Gabon: expropriation actions taken by the Gabonese government on February 16, 2018 o Sheffield: resolution of the dispute with the municipality being finalized 13

14 2018: and efficiency o Higher level of cost savings: at least 300M, following 255M achieved in 2017 o Reinforcement of actions targeting operational efficiency Benchmarking operations Performance Standards developed by Centers of Excellence Internal platform to exchange best practices o Continued restructuring Ex.: Implementation of departure plan in French Water 20% 32% Purchasing Operations o Further reduction in purchasing costs IT Subcontracting 48% SG&A 14

15 outlook 2018 objectives (at constant exchange rates): Continuation of sustained revenue growth EBITDA growth greater than that of 2017 More than 300M in cost savings 2019 objectives (1) : Continuation of revenue growth and full impact of cost savings EBITDA between 3.3Bn and 3.5Bn (excluding IFRIC 12), i.e. between 3.5Bn and 3.7Bn including IFRIC 12 Dividend growth in line with that of current net income (1) At constant exchange rates (based on rates at the end of 2016) 15

16 2017 Annual Results Annual results ending December 31, 2017 Philippe Capron, CFO 16

17 Overall 2017 performance better than expected, marked by strong revenue growth In M 2016 excl. IFRIC Pro forma IFRS 5 & including 2017 IFRIC 12 (1) at constant FX Revenue 24,390 24,187 25, % +4.9% (2) EBITDA 3,056 3,219 3, % +2.7% EBITDA margin 12.5% 13.3% 13.1% Current EBIT (3) 1,384 1,460 1, % +5.3% Current net income Group share % +6.1% Current net income Group share excluding capital gains % +7.3% Net income Group share % +7.5% Current net income Group share EPS (4) Adjusted current net income Group share EPS (4) (5) Gross industrial capex 1,485 1,597 1,738 Net FCF (6) Net financial debt 7,811 7,812 7,841 Foreign currency impacts (vs. 2016) M % (1) See Appendix 1 (2) Like-for-like growth of +3.5% (3) Including the share of current net income of joint ventures and associates considered to be core Group activities (excluding Transdev which is no longer considered a core Group activity) Revenue % (4) Basic (5) Adjusted current net income includes the cost of the coupon attributable to holders of perpetual hybrid bonds (- 67.8M in 2017 and M in 2016) EBITDA % (6) Net free cash flow corresponds to the free cash flow of continuing operations, i.e. the sum of EBITDA, dividends received, operating cash flow from financing activities, and the variation of operating working capital, less net industrial investments, net interest expense, tax expense, restructuring Current EBIT % charges, other non current expenses and renewal expenses. Current net income % Net financial debt % 17

18 Acceleration of revenue growth in the 4 th quarter: +6.3% at constant FX (and +4.4% lfl) at constant FX Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year France +0.2% -0.7% -1.3% -2.1% -1.0% -1.5% -0.4% -0.3% +1.9% -0.1%* Europe excl. France -0.9% +0.3% -0.6% +1.5% +0.1% +7.2% +4.4% +8.1% +6.1% +6.4% Rest of the World -2.4% +1.9% +6.3% +9.1% +3.7% +11.8% +10.8% +9.4% +14.2% +11.6% Global Businesses -2.9% -0.9% -11.4% -1.1% -4.1% -3.2% +1.7% -2.7% +1.9% -0.4% TOTAL -2.1% +0.1% -1.7% +1.9% -0.4% +4.5% +4.4% +4.3% +6.3% +4.9% Total excl. Construction & Energy prices +1.2% +1.9% +1.6% +3.4% +2.0% +5.9% +4.1% +4.7% +5.0% +4.9% EBITDA growth +4.4% +6.8% +4.2% +2.3% +4.3% +0.9% -0.2% +4.8% +5.2% +2.7% o * Like-for-like growth was +1.8% (impact of Bartin divestiture) Dynamics remain favorable: Improvement in France Acceleration of growth outside of France, particularly in the Rest of the World Stabilization in Global Businesses, with a strong increase in hazardous waste and improvement in Construction activity o Excluding construction revenue and energy prices, growth was +4.9% at constant FX versus +2.0% in

19 Very strong revenue growth: up 4.9% at constant FX to 25,125M (1/2) REVENUE IN M 24,187* ,125* , represented 2017 France: -0.1% (+1.8% constant scope): WATER stable and good growth in WASTE at constant scope WATER: Revenue up 0.5%; volumes +1%, price indexation +0.2%; commercial effects - 16M and lower revenue in Guadeloupe (progressive exit and impact of hurricane Irma) WASTE: Revenue +3.5% at constant scope (divestment of Bartin in 4Q 2016): good volumes (+1.9%), paper prices up 10% and good commercial momentum (portfolio up 14%) Europe excluding France: Growth of 6.4% at constant FX: Good performance in majority of regions UK/IRELAND: Revenue +5.2% at constant FX to 2.1bn, WASTE: new contracts, good volumes (+1.6%), and higher recycled raw materials prices GERMANY: Revenue +5.6% to 1,798M, o/w 1,045M (+11.1%) in Waste: increase in treated volumes, service prices and recycled materials. Water & Energy -1% (decline in energy prices) CENTRAL & EASTERN EUROPE: Revenue +7.9% at constant FX to 2,895M: ENERGY: strong growth in volumes sold, negative weather impact in Q4, but overall favorable for the year (+ 10M) and benefit of new projects, including Prague ( 20M) - WATER: increased volumes and new Armenia contract Small acquisitions in WASTE. Rest of the World: Growth of 11.6% at constant FX: Strong growth in all geographies NORTH AMERICA: Revenue +10.3% at constant FX to 2,048M: WASTE: Hazardous Waste ($535M in revenue) up 5% and contribution from Chemours sulfuric acid regeneration business Industrial Services down (divestment agreement signed in January 2018) Strong growth in ENERGY (higher prices and volumes) Strong growth in LATIN AMERICA (Revenue +22.4% at constant FX to 732M): tariff increases & new contracts (Punta Lara in Argentina, Santa Marta in Colombia, Pedreira in Brazil), and in ASIA (Revenue +21.2% at constant FX to 1,568M), including CHINA +23.7% due to strong growth in all businesses: new industrial contracts, increases in Waste volumes and prices and in municipal Energy Return to growth in AUSTRALIA-NZ (+7.7% at constant FX to 1,043M): start up of new assets and good volumes (+2.6% in Waste) Global Businesses: -0.4% constant FX: Strong hazardous waste growth & Construction decline CONSTRUCTION: VWT revenue -6.4% at constant FX (end of large projects in 2016, Oil & Gas still weak) but bookings +9% to 2bn => backlog +11% to 1,980M SADE revenue +0.6% lfl: strong growth in France HAZARDOUS WASTE: +5.7% at constant FX Improvement in oil recycling activity & higher treated volumes Variations vs at constant FX France -0.1% -0.1% Europe excl. France +5.2% +6.4% Rest of the World +9.8% +11.6% * Including Other: 32M in 2016 et 29M in 2017 Global Businesses -1.5% -0.4% 19 Total +3.9% +4.9%

20 Very strong revenue growth: up 4.9% at constant FX to 25,125M (2/2) Like-for-like growth : +3.5% -1.1% +1.4% +0.2% +0.3% +2.2% +0.8% FX: - 257M of which GBP (- 150M), USD (- 48M) Scope: + 352M including Chemours sulfuric acid regen business 107M, Bartin - 132M, and diverse acquisitions having a scope impact of 20M to 60M Construction: + 39M vs - 484M in 2016 (- 74M in Q1, + 15M in Q2, - 8M in Q3, + 106M in Q4) : strong increase in construction revenue in Q4 particularly in France (water, waste & Sade), start of construction of Springvale water treatment facility in Australia Energy & recycled material prices: + 62M vs M in 2016: strong increase in recycled material prices (+ 102M, including paper + 40M) despite a decline in Q4 Energy prices - 40M: down in Europe (PFI electricity in the UK, heat and electricity in Central & Eastern Europe and Germany) and up in the US VOLUMES/COMMERCE dynamics quite favorable: + 540M (vs M in 2016) Volumes & Weather + 305M: modest weather benefit + 11M (mild Q4 in Central Europe) & strong volume growth in Europe: France (Water +1%, Waste +1.9%), in Central Europe (Water +9.4% including Armenia; Energy volumes + 75M) and Northern Europe (Waste & Energy in Germany) Commerce: + 235M : Strong growth in Waste in Europe, new industrial contracts in Asia (including impact of Sinopec + 60M) & start up of new energy contracts in Canada New municipal contracts Water and Waste in Latin America. Price VEOLIA effects: M: ANNUAL notably RESULTS in Latin America (particularly Waste in Argentina), in Germany and in the UK (Waste) and in Central Europe (Water) 20

21 Strong growth in Waste: +8.1% at constant FX (+4.7% like-for-like) 2017 Recycled raw materials prices +1.2% Volumes / activity levels +1.8% +3% in H2 Service price increases +1.4% Other +0.3% Scope effect +3.4% Growth at constant exchange rates +8.1% Currency effect -1.9% France: Revenue +3.5% at constant scope to 2,469M o GOOD COMMERCIAL MOMENTUM (portfolio up 14%) o INCREASE IN VOLUMES: +1.9% - increase in commercial collection (+2.4%) and landfill (+1.3%) o STABLE PAPER REVENUE ( 168M): volumes down, but prices up 10% for the year United Kingdom / Ireland: Revenue +5.1% at constant FX to 1,750M o o VOLUMES/ COMMERCE: Positive evolution of the contract portfolio, good PFI performance (93.3% availability rate); volumes up 1.6%, with landfill volumes up strongly (temporary shutdown of competitor incinerator) PAPER REVENUE ( 115M) increased 20%: stable volumes, while prices were up significantly Germany: Revenue +11.1% to 1,045M o HIGHER VOLUMES and service prices o PAPER REVENUE increased 10% to 212M: stable volumes, while average price up 12% North America: Revenue +7.6% at constant FX to 971M: benefited from the integration of the Chemours sulfuric acid regeneration business and growth in Hazardous waste, while Industrial Services was still down (divestiture agreement signed for U.S. business) Pacific: Revenue +7.1% at constant FX to 796M: good volumes (+2.6%) New Sydney transfer station & start up of Woodlawn MBT facility 21

22 865 EBITDA up 2.7% at constant FX to 3,284M (1/2) Continued improvement in our operational performance EBITDA IN M 3,219* 3,284* , represented 2017 * Including Other 21M in 2016 and - 7M in 2017 France: Strong performance improvement due to cost reductions WATER: EBITDA up 3.8%, due to cost cutting and higher volumes (+1%), which offset margin pinching related to weak price indexation and the impact of contract renegotiations WASTE: EBITDA up 2.2% given higher revenue (at constant scope) and efficiency efforts Rest of Europe: good operational performance offset by transitory costs and the absence of 2016 favorable one offs in 1H 2017 Central & Eastern Europe: EBITDA up 1.2% (1) : favorable, but insignificant weather impact and efficiency gains. UK: impact of new contracts, operational efficiency and recycled paper prices offset by higher maintenance costs and plant outages NORTHERN EUROPE: GERMANY: further performance improvement in Waste, but absence of 2016 favorable one off (insurance claim reimbursement) - BELGIUM: Aquiris litigation payment in 2016 Continued strong growth in the Rest of the World Strong growth in ASIA, particularly in CHINA (+20.4% (1) ) in all activities: municipal & industrial Energy, industrial Water (Sinopec), Waste (landfill volumes and hazardous waste growth) Increase of 27.6% (1) in LATIN AMERICA: impact of tariff increases and new contracts The PACIFIC region improved significantly: EBITDA up 20.1% (1) : opening of new Banksmeadow transfer station and start of new Woodlawn MBT facility, good volumes NORTH AMERICA: EBITDA down 1.5% (1) : WASTE: decline in industrial services and hazardous waste penalized by maintenance shutdowns and hurricane Harvey, partially offset by the integration of the Chemours sulfuric acid regeneration business Good performance in ENERGY despite overall mild weather: favorable price effects and new energy efficiency contracts Global Businesses: the benefit of VWT restructuring and good hazardous waste performance were offset by the absence of 2016 favorable one offs (indemnity payment at end of contract) (1) At constant FX Variations vs at constant FX France +3.3% +3.3% Europe excl. France -0.2% +0.3% Rest of the World +8.5% +10.1% Global Businesses -1.1% -0.6% Total +2.0% +2.7% 22

23 EBITDA up 2.7% at constant FX to 3,284M (2/2) Continued improvement in our operational performance Scope: + 69M (including Chemours sulfuric acid regeneration business 22M) / FX - 21M (mainly ) Commerce/Volumes + 42M: volume growth (Water, Energy, Waste) in Europe and commercial momentum (new industrial contracts in Europe and Asia, municipal contracts in Latin America) partially offset by lower industrial services volumes in the US Neutral weather impact following a mild 4Q vs Energy and recyclate prices: the evolution of energy tariffs (down in Europe, up in the US) follows that of the purchase price of fuel consumed to produce the heat and electricity Positive effect of higher recycled raw material prices (UK), offset by higher fuel costs (Waste in France) Price/cost squeeze and Contractual renegotiations: - 131M: price indexation too weak in France and Europe. Contractual renegotiations and start up of new activities. Favorable impact of cost reductions: + 255M Transitory costs and one offs: - 110M including - 94M in H1 (absence of 1H 2016 favorable one offs, higher insurance and maintenance costs ) 23

24 Current EBIT: +5.3% at constant FX In M 2016 excluding IFRIC represented 2017 vs. represented 2016 at constant FX EBITDA 3,056 3,219 3, % +2.7% Renewal expenses Depreciation & Amortization (including principal payments on OFAs) -1,595-1,684-1,703 Provisions, fair value adjustments & other Share of current net income of joint ventures and associates (1) Current EBIT 1,384 1,460 1, % +5.3% (1) Excluding capital gains on financial divestitures o Depreciation and amortization of 1,555M (versus represented 1,483M in 2016) o Provisions: mechanism for site remediation provisions structurally positive for Veolia; adjustment to provisions for retirement (mainly UK, France); settlement of old disputes o Share of net income from JVs and associates: 98M including strong increase in China contribution to 63M (growth in water concessions), offset by scope effects 24

25 Current net income - Group share: +6.1% at constant FX and +7.3% excluding capital gains In M 2016 excluding IFRIC represented (1) Including the share of current net income of joint ventures and associates viewed as core Company activities (2) Including related taxes and minorities 2017 vs. represented 2016 at constant FX Current EBIT (1) 1,384 1,460 1, % +5.3% Cost of net financial debt Other financial income and expense Income tax expense Non-controlling interests Current net income Group share % +6.1% Current net income Group share % +7.3% Excluding net financial capital gains (2) o Cost of net financial down by 12M to - 411M due to active debt management, which offset increased costs related to non-euro denominated debt (linked to the widening of the euro/foreign currency rate spread) Sharp reduction in the gross cost of borrowing to 3.03% (versus 3.59%), offset by the reduced rate of interest on cash balances => stable net financing rate at 4.94% o Other financial income and expense includes charges related to the unwinding of discounts on provisions (- 36M), interest on IFRIC 12 concession liabilities for - 94M (stable) and net financial capital gains ( 7M in 2017 vs. 13M in 2016) o Current tax rate of 24% 25

26 Continued focus on reducing the cost of debt o In 2017, continued active debt management through new bond issues at exceptionally low rates o Issuance in March 2017 of 1.3 billion of bonds in two tranches of 650M each, the first maturing in March 2022 (5 years) bearing a coupon of 0.672% and the second maturing in November 2026 (10 years short) bearing a coupon of 1.496% o Issuance in November 2017 of a 500M bond maturing in November 2021 with a yield of % o In 2018, significant cash savings relative to the cost of the hybrid: ~ 68M o Exercise the hybrid call in April 2018 o Hybrid: 1bn at 4.5% and 400M at 4.875% 26

27 Non current items 2016 published excluding IFRIC represented 2017 Current net income Group share Non current items, net of tax Non current impairments Restructuring charges Net income from discontinued operations (Lithuania) Share of net income of equity-accounted entities (Transdev) Other Net income Group share o o Net restructuring charges of - 143M include - 78M in French Water (charges and provision reversals related to plan in progress and provisions for the new 2018 plan), - 25M at VWT and - 9M in the US Other: Includes the impairment of deferred tax assets in the U.S. for 37M following the reduction in the U.S. corporate tax rate 27

28 Net FCF after growth capex of + 655M o Gross industrial capex up 9% to 1,738M, including 209M in discretionary capex o Net FCF (1) (after growth capex and cash restructuring charges) of + 655M: EBITDA increase of 86M at constant FX WCR reduction of 112M despite strong revenue growth Increase in net capex by 138M Cash restructuring & other charges of - 138M (- 123M in 2016) Discretionary capex (new projects) Maintenance & contractual capex 1,738 1, ,391 1, represented 2017 o Net financial debt of 7,841M Stable vs December 2016 (including + 271M favorable FX effect) Includes 418M in net financial investments (versus 156M in 2016), mainly in industrial waste (in Sweden, Germany & Korea) and energy services (US, Korea) Stable leverage ratio at Dec. 31, 2017: 2.4x Stable leverage ratio at Dec. 31, 2017 including hybrid: 2.8x (1) Net free cash flow corresponds to the free cash flow of continuing operations, i.e. the sum of EBITDA, dividends received, operating cash flow from financing activities, and the variation of operating working capital, less net industrial investments, net interest expense, tax expense, restructuring charges, other non current expenses and renewal expenses. 28

29 9% increase in gross industrial capex Maintenance capex of 822M, representing 3.3% of revenue, stable compared to 2016 Contractual capex on the existing portfolio of 707M compared with 594M in 2016, up significantly in the Rest of the World, particularly in Asia, in line with commercial development o Stable discretionary growth capex of 209M, mainly: o o o In France, in Waste, construction of the WTE facility in Troyes, modernization of a sorting and recycling center, etc. In Europe: capex associated with PFI contracts in the UK, new connections to water networks and district heating in Central Europe Rest of the World: Biomass plants in Canada, industrial developments in the US; Numerous new projects in China: in industrial water (Sinopec), energy (Hongda), and hazardous waste Waste in Australia 29

30 Net FCF: + 655M * Financial investments of - 565M, net of financial divestitures of + 147M ** mainly UK pound sterling 30

31 Moderate impact from Gabon Since 1997, Veolia has controlled 51% of SEEG, the company in charge of providing drinking water and electricity to Gabon. 20-year contract renewed for a duration of 5 years on March 1, 2017 Expropriation actions taken by the Gabonese government on February 16, 2018 In M 2017 Revenue 306 EBITDA 64 Current EBIT 19 Contribution to current net income Group share 2.6 (1) Capital employed 40 (1) For the 51% stake in SEEG held by Veolia 31

32 A contract portfolio with low concentration The Group s 35 largest contracts represent 4.1 billion in revenue, or 16% of total consolidated revenue o Average duration: 11 years 32

33 outlook 2018 objectives (at constant exchange rates): Continuation of sustained revenue growth EBITDA growth greater than that of 2017 More than 300M in cost savings 2019 objectives (1) : Continuation of revenue growth and full impact of cost savings EBITDA between 3.3Bn and 3.5Bn (excluding IFRIC 12), i.e. between 3.5Bn and 3.7Bn including IFRIC 12 Dividend growth in line with that of current net income (1) At constant exchange rates (based on rates at the end of 2016) 33

34 Appendices

35 Appendix 1: Main represented figures (1) for the full year ended December 31, 2016 IFRS 5 December 2016 In m Adjustment(4) published December 2016 represented Revenue ,2-203, ,0 EBITDA (a) 3 258,4-39, ,4 Current EBIT (2) 1 476,5-16, ,2 Operating income 1 169,6 23, ,3 Current net income - Group share 610,7-14,1 596,6 Net income - Group share 383,1 0,0 383,1 Gross industrial investments (b) Of which change in concession WCR Interest on operating assets - IFRIC 12 (c) -90,3 0,0-90,3 Net free cash flow (3) Net financial debt (1) Non audited figures (2) Including the represented share of current net income of joint ventures and associates for the year-ended September 30, 2016 (3) No impact related to IFRIC 12 adjustment on net Free Cash Flow ((a)+(b)+(c)=0) (4) In order to ensure the comparability of periods, the accounts ending December 31, 2016 have been represented for the reclassification of the Group s activities in Lithuania into Net income (loss) from discontinued operations in accordance with the application of the IFRS 5 standard. 35

36 Appendix 1: Main represented figures for the full year ended December 31, 2016 (1) - Revenue by segment In m December 2016 published IFRS 5 Adjustment December 2016 represented France 5 417,7 0, ,7 Europe excluding France 8 286,3-203, ,1 Rest of the World 6 028,4 0, ,4 Global businesses 4 626,2 0, ,2 Other 31,6 0,0 31,6 Revenue ,2-203, ,0 (1) Non audited figures 36

37 Appendix 1: Main represented figures for the full year ended December 31, 2016 (1) - EBITDA by segment In m December 2016 published IFRS 5 Adjustment December 2016 represented France 763,2 0,0 763,2 Europe excluding France 1 346,1-39, ,1 Rest of the World 864,6 0,0 864,6 Global businesses 262,7 0,0 262,7 Other 21,8 0,0 21,8 EBITDA 3 258,4-39, ,4 (1) Non audited figures 37

38 Appendix 1: Main represented figures for the full year ended December 31, 2016 (1) Current EBIT by segment In m December 2016 published IFRS 5 Adjustment December 2016 represented France 132,7 0,0 132,7 Europe excluding France 726,4-16,3 710,1 Rest of the World 464,5 0,0 464,5 Global businesses 153,7 0,0 153,7 Other -0,8 0,0-0,8 Current EBIT 1 476,5-16, ,2 (1) Non audited figures 38

39 Appendix 1: IFRIC 12 Service concession agreements o Under concession contracts with local authorities, infrastructure is accounted, as appropriate, as an intangible asset, a financial receivable, or a combination of the two. Veolia may have a payment obligation vis-à-vis the Grantor to utilize the associated assets. In July 2016, IFRIC published a verdict regarding these payments and concluded that in the case of fixed payments required by the operator, an intangible asset and a liability should be recorded. o Veolia identified the contracts concerned and will apply the new IFRIC 12 measures retroactive to 1/1/2015: the most significant contracts concerned are our water concessions in the Czech Republic and Slovakia. o In the income statement, representations related to this clarification drive an increase in EBITDA and Current EBIT. In effect, the concession fee formerly accounted for as a charge is eliminated and then reallocated between interest expense and repayment of the recognized debt. At the same time, an amortization charge for the asset is recognized and then deferred taxes are adjusted accordingly. o On the balance sheet, the liability related to the fixed payments is classified within concession liabilities and broken down by current and non current liabilities according to maturity. The balance of the liability related to the re-presentations is greater than the corresponding net asset value: in effect the asset depreciation rate is linear, while the reimbursement rate is progressive ( constant annuity formula, with reduction of the interest portion to the profit of the principal repayment). The increase in EBITDA related to the application of the clarification is offset by the liability repayment (classified in CAPEX) and interest payments. As a result, these representations have no impact on free cash flow or net financial debt. 39

40 Appendix 2: Currency movements Main currencies 1 = xxx foreign currency US dollar Average rate Closing rate UK pound sterling Average rate Closing rate Australian dollar Average rate Closing rate Chines renminbi yuan Average rate Closing rate Czech crown Average rate Closing rate , vs % 12.1% 6.6% 3.5% -1.1% 4.9% 3.5% 6.2% -2.7% -5.8% The average rate applies to the income statement and the cash flow statement The closing rate applies to the balance sheet 40

41 Appendix 3: Quarterly revenue by segment 1 st quarter 2 nd quarter 1st half In M 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX France 1,323 1, % +0.6% 1,365 1, % +2.2% 2,688 2, % +1.4% Europe excl. France 2,172 2, % +6.2% 1,911 1, % +2.4% 4,083 4, % +4.4% Rest of the World 1,426 1, % +6.0% 1,407 1, % +4.7% 2,833 3, % +5.4% Global Businesses 1,068 1, % -4.2% 1,151 1, % +3.4% 2,219 2, % -0.3% Other 6 7 Ns Ns 6 11 Ns Ns ns Ns Group 5,995 6, % +3.1% 5,840 6, % +3.2% 11,835 12, % +3.1% 3 rd quarter 4 th quarter Full year In M 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX France 1,377 1, % +0.9% 1,352 1, % +3.3% 5,418 5, % +1.8% Europe excl. France 1,748 1, % +5.8% 2,252 2, % +1.6% 8,083 8, % +3.9% Rest of the World 1,514 1, % +5.0% 1,682 1, % +10.5% 6,028 6, % +6.7% Global Businesses 1,086 1, % -0.7% 1,322 1, % +3.3% 4,626 4, % +0.6% Other 8 7 Ns Ns 11 4 Ns Ns % -8.8% Group 5,734 5, % +3.1% 6,618 6, % +4.4% 24,187 25, % +3.5% 41

42 Appendix 4: Quarterly revenue by business 1 st quarter 2 nd quarter 1st half In M 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX Water 2,635 2, % -0.9% 2,701 2, % +3.2% 5,336 5, % +1.2% Waste 2,014 2, % +5.6% 2,160 2, % +2.1% 4,174 4, % +3.8% Energy 1,346 1, % +7.1% 979 1, % +5.6% 2,325 2, % +6.5% Group 5,995 6, % +3.1% 5,840 6, % +3.2% 11,835 12, % +3.1% 3 rd quarter 4 th quarter Full year In M 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX 2016 represented 2017 at cst FX at cst scope & FX Water 2,700 2, % +0.1% 2,993 3, % +4.6% 11,029 11, % +1.8% Waste 2,143 2, % +4.9% 2,194 2, % +6.1% 8,510 9, % +4.7% Energy % +8.0% 1,432 1, % +1.5% 4,648 4, % +5.2% Group 5,734 5, % +3.1% 6,618 6, % +4.4% 24,187 25, % +3.5% 42

43 Appendix 5: Continued rebound in revenue Analysis by business REVENUE ( M) 24,187 11,029 25,125 11, % growth at constant FX Water: +1.6% at constant FX, (+1.8% at constant scope & FX) Volumes/commerce: +1.6% o France: volumes up by 1%; commerce effect slightly negative (- 16M) o Central Europe: higher volumes and start of Armenia contract o Strong growth in industrial water: e.g. : Sinopec in China (+ 60M), Price effects* (+0.7%) Increases in Central Europe (higher tariffs in the Czech Republic and Bulgaria) and in Latin America, small increase in France beginning in H2 (+0.2% for the full year) Construction (+0.1%): stabilization of the activity 8,510 9,040 Strong growth in Waste: +8.1% at constant FX (+4.7% at constant scope & FX) Scope: +3.4%: Chemours sulfuric acid business in the US (+ 107M) partially offset by Bartin sale (- 132M) Volumes/commerce: +1.8% o Higher volumes: mainly in France, Germany, Asia (landfill & haz waste); US: decline in industrial services but good trend in hazardous waste o Commerce: strong renewal rate and a number of contract awards (France, UK, Germany, Hazardous Waste) Price effects: +1.4% mainly in Latin America, Germany and the UK Increase in recycled raw materials prices: + 102M (+1.2%), mainly paper 4,648 4, represented 2017 * Excluding energy price effect (Germany, Africa & Middle East) Rebound in Energy Services: +7.1% at constant FX (+5.2% at constant scope & FX) Scope: 87M (+1.9%): Prague district heating; energy services in the US Negligible weather impact: + 11M (+0.2%) given a milder 4Q Volumes / Commerce: + 194M (+4.2%): higher volumes of energy sold in Central Europe and China, start of new energy contracts in Canada, new energy efficiency contracts Negligible price effects: heat and electricity prices down in Europe but up in the US Variations vs at constant FX at constant scope & FX Water +0.8% +1.6% +1.8% Waste +6.2% +8.1% +4.7% Energy +6.9% +7.1% +5.2% Total +3.9% +4.9% +3.5%

44 Appendix 6: 2017 main contract awards - Industrial market Q3 Saica, France Paper & cardboard recycling Duration: 5 years Backlog: 182M Q1 Q3 Q2 Reina Sofia Hospital, Spain Energy Services for 3 hospitals Duration : 15 years Backlog: 60M Antero, USA Sludge treatment, including TENORM Duration: up to 10 years Backlog: $70M Renewals New contracts Q4 Q3 SLOVEO, Slovakia Extension of multi-utility contract with carmaker PSA Trnava Duration: 3 years Total backlog: 18M SPRINGVALE, Australia DBO produced water treatment facility Duration: 15 years Backlog: AUD$400M Building a plastics recycling platform: - Europe (France, UK, Netherlands, Germany, Scandinavia) - Asia (Korea, Japan, ) Q1 Hongda Chemicals, China Energy Management contract (BOT) Boiler renovation & steam supply (CHP) Duration: 10 years Total backlog: 335M Q1 Q2 Q1 Q3 Sjotroll, Norway Design, construction & EPC contract (VWT) Duration 2.5 years Total backlog: 34M Q4 Q1 Wetherspoon, UK C&I waste Total revenue: 6M/year KleanNara, South Korea Wastewater treatment on an industrial site Duration: 10 years Total backlog: 71.5M Uniken, South Korea Industrial Waste Annual Revenue: ~ 20M Beijing Data Center, China BOT of a chilled water plant Duration: 20 years Total backlog: 188M Hejian CHP Biomass, China Steam Supply Concession contract Duration: 25 years Total backlog: 341M 44

45 Appendix 7: 2017 main contract awards - Municipal market Q2 Honolulu, USA Extension O&M wastewater treatment plant Duration: 15 years Backlog: 72M Q4 Ajaccio, France Drinking water & wastewater management Duration: 10 years Backlog: 131M Q2 Q3 Q3 Mexico City, Mexico D&B and O&M of WTE plant (1.6MT ton annual capacity) Duration: 30 years Backlog: 886M Manta Alianza, Ecuador Water distribution Duration: 10 years Total backlog: 56M Maipu, Chile Collection of household waste Duration: 6 years Backlog: 28M Renewals New contracts Q1 Q4 Punta Lara, Argentina Water treatment plant rehabilitation Duration: 3 years Backlog: 57M Le Creusot, France Drinking water & wastewater management Duration: 8 years Backlog: 100M Q2 PNSU, Peru Wastewater plant extension and improvement (SADE) Duration: 2 years Backlog: 27M Q3 Valenton, France O&M wastewater treatment Duration: 12 years Backlog: 400M Q4 Saint Pierre, France Drinking water & wastewater management Duration: 11 years Backlog: 123M Q2 Q4 HAMAMATSU, Japan Wastewater treatment concession Duration: 20 years Backlog: 450M Marquette, France O&M wastewater treatment plant Duration: 5 years Backlog: 40M Q1 Q1 Q1 Q3 Q3 Metropolis of Lille, France WTE facility in city of Halluin supplying 2 urban heating networks Duration: 12 years Backlog: 295M Q1 Le Mans, France O&M wastewater treatment Duration: 9 years Backlog : 44M South London, UK Waste collection, recycling & street cleaning Duration: 8 years Backlog: 209M Bali, Taïwan O&M wastewater treatment plant Duration: 3 years Backlog: 21M FUNABASHI, Japan Biogasto Energyproject, Municipal Water Duration: 22 years Total backlog: 34M Greater Matale, Sri Lanka D&B for 5 water treatment plants, 12 reservoirs, 5 pumping stations & 433km distribution network (VWT) Backlog: 156M 45

46 Appendix 8: Net investments by segment 2017 (in M) Maintenance Contractual capex (1) Discretionary growth capex (1) (1) Of which new OFAs TOTAL GROSS CAPEX Industrial divestments France Europe excluding France Rest of the World Global Businesses Other TOTAL NET CAPEX TOTAL , , represented (in M) Maintenance Contractual capex (1) Discretionary growth capex (1) (1) Of which new OFAs TOTAL GROSS CAPEX Industrial divestments France Europe excluding France Rest of the World Global Businesses Other TOTAL NET CAPEX TOTAL 2016 represented , ,511 46

47 Appendix 9: Continued Pre-tax ROCE improvement Average capital employed ( M) Pre-tax ROCE (%) France 1,824 1,790 1, % 7.4% 8.9% Europe excluding France 7,012 6,812 6, % 10.3% 10.0% Rest of the World 4,099 4,309 4, % 9.3% 10.8% Global Businesses 968 1,088 1, % 12.4% 12.6% TOTAL GROUP 13,677 13,649 13, % 10.0% 10.4% o o Asset portfolio optimization Continued ROCE improvement Pre-Tax ROCE = Current EBIT before share of net income of equity-accounted entities / Average capital employed, including operating financial assets and excluding investments in joint ventures and associates 47

48 Appendix 10: Quarterly waste revenue and volumes Quarterly revenue growth at constant scope & FX Y-Y Quarterly volume trends 48

49 Appendix 11: Waste Breakdown of revenue by activity Decline in Collection revenue Increase in Hazardous Waste from 16% to 19% of total revenue 2016 Revenue: 8,510M 2017 Revenue: 9,040M 10% 16% 10% 14% Municipal collection & Street cleaning Commercial & Industrial collection 16% 19% Sorting & Recycling & MBT 21% 19% Energy recovery (incineration) 8% 9% Landfill 10% 19% 10% 19% Hazardous and Liquid Waste Industrial Services / Waste 49

50 Appendix 12: Waste Revenue vs. Industrial Production Weighted average industrial production indices for 4 key countries including SARP & SARPI : France, UK (excluding PFI), Germany,North America (excluding US Solid Waste and WTE) Sources: October and November: OECD for France, Germany, USA & UK December 2017: OECD for the US and Germany, INSEE for France and ONS for the UK 50

51 Appendix 13: Waste Evolution of raw materials prices (paper & cardboard) Evolution of raw materials prices ( /t) 51

52 Appendix 14: Statement of cash flows In M 2016 represented 2017 EBITDA (1) 3,219 3,284 Net industrial investments -1,511-1,649 WCR variation Dividends received (2) Renewal expenses Restructuring and other non current charges Operating Free Cash Flow 1,674 1,407 Taxes paid Interest paid Interest on concession liabilities Net Free Cash Flow before dividends, acquisitions & financial divestments Dividends paid (3) Net financial investments (4) Other +269 (5) +119 Cash generation Impact of exchange rates Other Variation of net financial debt Opening net financial debt 8,170 7,812 Closing net financial debt 7,812 7,841 (1) Including principal payments on operating financial assets (2) Including Asia 49M in 2017 (3) Dividends paid to shareholders (- 440M), non-controlling interests (- 141M) and to hybrid holders for - 68M in 2017 (4) Including acquisitions (- 565M) and divestments (+147M) in 2017 (5) Including + 345M reimbursement of Transdev loan 52

53 Appendix 15: Net financing rate Cost of net financial debt down by 12M due to active debt management more than offsetting the increased costs of non-euro denominated debt Net financing rate stable as of 12/31/2017 at 4.94% relative to average net debt of 8,357M Gross cost of borrowing rate declined by 56 bps from 3.59% to 3.03% following recent refinancing of bonds due by new issuances in October 2016 and March and November 2017 at historically low rates. Decrease in the interest rate on cash balances from 45bps at 12/31/16 to 16 bps at 12/31/17 due to a rise in less remunerative euro investments. In M 2016 represented 2017 Average gross debt (1) 12,071 13,518 Gross cost of borrowing 3.59% 3.03% Average cash balance 3,888 5,476 Interest rate 0.45% 0.16% Average bank overdrafts Average net financial debt (2) 8,548 8,357 Cost of net financial debt Net financing rate 4.95% 4.94% Closing net financial debt (3) 7,812 7,841 Average cash balance excluding commercial paper 1,036 2,262 (1) Excluding bank overdrafts (2) Average net financial debt represents the average of monthly net financial debt figures over the period (3) Net financial debt represents gross financial debt (non current and current financial debt and bank overdrafts), net of cash and cash equivalents, liquid assets and assets related to financing and including the revaluation of debt hedging derivatives. Liquid assets are financial assets consisting of funds or securities with initial maturity of more than three months, easily convertible into cash, and managed as part of a liquidity objective, while maintaining a low risk of capital. 53

54 Appendix 16: Debt management (1/2) o o o o o Issuance in March 2017 of 1.3 billion of bonds in two tranches of 650 million each, the first maturing in March 2022 ( 5 years) bearing a coupon of 0.672% and the second maturing in November 2026 (10 years short) bearing a coupon of % Issuance in November 2017 of 500 million in bonds maturing in November 2020 (3 years) at a negative yield of %, which is a first for a BBB issuer Arrival at maturity of the euro-denominated bonds: nominal amount of 606 million in January 2017, 350 million in May 2017 and 250 million in June 2017 and the Dim Sum bond for a nominal amount of 500 million renminbi in June 2017 ( 65 million equivalent) Group liquidity: 10.4 billion, including 4 billion in undrawn confirmed credit lines (without disruptive covenants) Net Group liquidity: 5.6 billion o Average maturity of net financial debt: 9.2 years at December 31, 2017 versus 9.3 years at December 31, 2016 Net financial debt after hedges at December 31, 2017 (1) Currency breakdown of gross debt (after hedges) at December 31, 2017 Fixed rate: 89% Variable rate: 11% (1) Including the restatement of 1.8 billion of the carry over of cash related to the pre-financing of future bond maturities in

55 Appendix 16: Debt management (2/2) Veolia Bond Maturity Schedule Including Hybrid RATING Moody s : P-2/ Baa1 stable outlook Standard & Poor s : A-2 / BBB stable outlook 55

56 Appendix 17: Net liquidity In M Veolia December 31, 2016 represented December 31, 2017 Syndicated credit lines 3, ,000.0 Bilateral credit lines Lines of credit Cash and cash equivalents (1) 4, ,371.0 Total Veolia 8, ,351.1 Subsidiaries Cash and cash equivalents (1) ,067.9 Total Subsidiaries ,067.9 Total Group liquidity 9, ,419.0 Current liabilities and bank overdrafts 5, ,815.9 Total Group net liquidity 4, ,603.1 (1) Including liquid assets and financing related assets included in net financial debt 56

57 Appendix 18: Consolidated statement of financial position In M December 31, 2016 represented December 31, 2017 Intangible Assets 9,639 9,408 Property, Plant & Equipment 7,177 7,294 Other non-current assets 4,094 3,517 Operating financial assets (current and non-current) 1,696 1,614 Cash and cash equivalents 5,521 6,264 Other current assets 9,822 10,212 Total Assets 37,949 38,309 Capital (including non-controlling interests) 8,877 8,657 Financial debt (current and non-current) 13,591 14,438 Other non-current liabilities 4,602 4,193 Other current liabilities 10,879 11,021 Total Liabilities & Shareholders Equity 37,949 38,309 57

58 SUSTAINABLE DEVELOPMENT Climate Strategy Achievements 58

59 Our 9 commitments for sustainable development SUSTAINABLY MANAGE NATURAL RESOURCES BY SUPPORTING THE CIRCULAR ECONOMY 1 CONTRIBUTE TO COMBATING CLIMATE CHANGE 2 PROMOTE AN ECO-FRIENDLY APPROACH TO CONSERVE BIODIVERSITY 3 BUILD NEW MODELS FOR RELATIONS AND VALUE CREATION WITH OUR STAKEHOLDERS 4 CONTRIBUTE TO LOCAL DEVELOPMENT 5 SUPPLY AND MAINTAIN SERVICES CRUCIAL TO HUMAN HEALTH AND DEVELOPMENT 6 GUARANTEE A HEALTHY AND SAFE WORKING ENVIRONMENT 7 ENCOURAGE THE PROFESSIONAL DEVELOPMENT AND COMMITMENT OF EACH EMPLOYEE 8 GUARANTEE RESPECT FOR DIVERSITY AND HUMAN AND FUNDAMENTAL SOCIAL RIGHTS WITHIN THE COMPANY 9 59

60 Climate strategy: from advocacy to action M VEOLIA: a leader in the low carbon transition (Mitigation) Veolia joins DJSI World and Europe Indices 2018 A Offers deployed for municipal and industrial clients integrating climate issues VEOLIA: a resilience leader (Adaptation) 2015 Methane plea and carbon tax 2020 Commitments: - Circular economy - Climate change - Biodiversity Internal carbon price / Investment committee COMEX Task Force strategy & climate Supports the TCFD recommendations Commits to Science Based Targets Initiatives Complies with French legislation on climate strategy: Article 173 Internal web platform to evaluate the environmental footprint of our offers and contracts 60

61 VEOLIA: a leader in the low carbon transition Examples M Energy efficiency in commercial buildings : GHG savings Hubgrade Expertise UAE Spain Belgium Netherlands Mall of Emirates Dubaï Indra Madrid Tour du Midi Brussels University Twente 233,500 m 2 211,900 m 2 62,000 m 2 1,400,000 m² 10% Energy savings 15% Contractual savings 29% Reduced fuel oil consumption 10% Achieved savings* 24/7 Energy and Water monitoring 3% Overachievement in energy savings 65 Office buildings 2,350 Tons of CO 2 emissions avoided per year 37% Savings in electrical consumption 6,017 Tons of CO 2 emissions avoided per year 10 years Guarantee to avoid unexpected costs 50 Buildings *Performance contract based on NEN

62 VEOLIA: a leader in the low carbon transition Examples M GHG savings, renewables and energy mix switch Eco District Heating & Cooling Networks Combined Heat and Power China SPAIN Germany UK Harbin Municipal Client Barcelona Municipal Client Braunschweig Municipal Client Astra Zeneca Industrial Client Since 2007 Owned by Veolia 17M m² Supplied Dismantling of more than 500 small coal-fired-heat-only boilers 124,586 residential contracts, 9,916 non-residential contracts and 240 public buildings Cooling recovery through natural gas evaporators 28,000 tons biomass/year 13,400 tons CO 2 reduction Biomethane-fueled CHP DBOO of complete system 8,000 tons of CO 2 saved per year 15,600 MWh heat and 9,200 MWh electricity generated per year Gas-fueled CHP Design, installation and commission O&M of the cogeneration plant and other facilities 39,000 tons CO 2 reduction per year 62

63 VEOLIA: a leader in the low carbon transition Examples M Circular Economy: Focus on a new Plastics Economy Internal growth strategy : Circular Economy Leadership External growth strategy : Plastics Acquisition Strategy France France Netherlands France Innovation for plastics sorting High quality secondary raw materials High performance sorting centers High quality secondary raw materials Producing high quality recycled PP Veolia Polymers NL BV Flexible multi-resin recycling solution PMG Plastics D3E Offer Sorting & recycling of WEEE materials to recover plastic reutilized in manufacuting Offer Insure traceability, quality and accounting of the material with our client s specifications Acquired in 2015 Value Industrial clients Acquired end of 2016 Value Industrial & Municipal clients > 95% Purity rate > 80% Recycling capacity 1,297 tons CO 2 avoided per year SEB as main client 4 Centers operated in France (Nancy, Rouen, Nantes, Nice) 40% Collection & recovery of used furniture market share won in France 65% Plastic activities Innovation Polymer Science Park & The Ocean Cleanup 40,000 tons Recycling capacity +78% planned sales growth Innovation PP/PE/PS 55,000 tons Recycling capacity 54,000 tons Volume sold in

64 VEOLIA: a resilience leader Examples A Adaptation and resilience Partnership Resilient Offer Resilient Offer Biodiversity Offer 100 Resilient Cities & Swiss Re Grand Cycle Water Management Water Recycling & Water Stress Management Green Steam lowers carbon footprint New Orleans Copenhagen Durban Boston & Cambridge Resilience in response to climate change First Public-private worldwide partnership addressing resilience 200 Number of infrastructures analyzed 4 months Auditing Resilience in response to flooding - 90% Wastewater overflows - 10 to 15% Energy required to treat wastewater 1/3 Less pollution discharged into the sea - 10 to 12% greenhouse gas emissions Resilience in response to high water stress 98% of municipal wastewater recycled Additional 40,000 m 3 of drinking water produced each day 5 million euros of annual savings for industrial partners Resilience in response to environmental impact to the Charles River Eliminating the heated water entering the Charles River will: - Protect native fish populations including river herring - Help to restore the ecosystem and habitat in the lower Charles River 475,000 tons annual reduction of the region s GHG emissions 64