Key Figures for the period ending June 30, st August 2018

Transcription

1 Key Figures for the period ending June 30, st August 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 1H 2018 key figures Highlights 3

4 New Steps to Pursue Business Transformation and Performance Enhancement François Bertreau Estelle Brachlianoff, COO Antoine Frérot, Chairman and CEO Philippe Capron Claude Laruelle, CFO 4

5 1H 2018 Key takeaways (1/2): Stronger than expected Sales - Accelerated EBITDA growth o Very solid Q Results Revenue:+5.1% at constant FX +5.3% excluding Energy prices and construction revenue, after +4.6% in Q1 7 th quarter in a row of underlying strong growth EBITDA : +6.4% at constant FX, after +5.3% in Q1 o Leading to a strong 1H 2018 o Revenue growth :+6.0% at constant FX (1) and +4.1% like for like to 12,565M and +5.0% excluding construction and energy prices o EBITDA growth : +5.8% at constant FX (2) to 1,673M o Current EBIT: +6.8% at constant FX to 792M o Current Net income of 329M, up 19.0% at constant FX and +13.3% excluding capital gains o Net Financial Debt of 10,609M post repayment of hybrid bond in April o FY 2018 Guidance fully Confirmed (1) Revenue up +4.6% at constant FX including the loss of Gabon (as if not discontinued) (2) EBITDA up +3.7% at constant FX including the loss of Gabon (as if not discontinued) 5

6 1H 2018 Key takeaways (2/2): Delivering on our Growth Ambitions & Acceleration of Efficiency actions Favorable macro environment, but with some contrasting evolutions for the Group Very high growth of Waste volumes : +4% ytd (+3% in Q1, +4.9% in Q2) partly offset by lower recycled paper prices (-0.5% on the Group s H1 revenue; -0.3% in Q1) Improvement in tariff indexations (+0.6% in French water) Adverse weather in Water and Energy in Europe in Q2 Robust commercial momentum but lower Construction activity France: satisfactory contract renegotiations in Water and Waste Continued Sustained growth in Europe & Double digit growth in Rest of World, mostly in Veolia new Growth areas Global Business : construction down on delayed projects and more selectivity offset by solid Hazardous waste growth Tuck-in acquisitions in key growth areas to complement organic growth, and asset rotation Accelerated pace of cost savings: 148M achieved in H1, +17% yoy, in line with annual targets o o 78M achieved in Q2, after 70M in Q1 Enhanced Procurement performance, Operational excellence and Support function efficiency 6

7 Strong growth in Veolia new businesses Key achievements in H1, 2018 More than 50% of new revenue have come from Veolia s new businesses Key achievements year to date Circular Economy & Energy Management : 45% 55% Du Pont, Virginia, USA : 18 year multi utility contract covering energy treatment : Backlog $600M Arcelor Mittal, Fos sur Mer: 20 year contract to renovate and manage the energy production facility of the site : Backlog 450M Difficult pollutions 1 new hazardous waste incinerator in China : 10 in operation and 4 under construction Acquisition of Grupo Sala, a leading municipal and hazardous waste Group in Columbia : 2017 Revenue 110M Acquisition of a leading hazardous waste Group in India : 2017 Revenue 25M Municipal activity Bordeaux Waste Water treatment won by Veolia from Suez for 7 years : Backlog 352M USA : take over of water & WW contracts from American Water Works : Annual Rev. $31M 7

8 Accelerated pace of cost savings and new incentive plan o Cost cutting : +17% yoy Procurement performance, Operational excellence, Support function efficiency Impact on EBITDA (in M) target 1H H 2018 Cost savings target 800 France 9% 26% 20% 29% Europe excluding France Rest of the World Global Businesses HQ 16% 23% 26% o New steps to align management, employees and shareholders interests : Initiation of a recurring Performance shares attribution scheme July 2018 : 0.3% of Veolia stock to be awarded to 700 managers 51% Purchasing Operations SG&A Shares to be attributed in 2021 if current net income per share CAGR reaches 10% over the 3-year period* New Employee Shareholding plan : more than 40,000 employees have invested in Veolia s shares** *If this average growth were to be of less than 5%, no performance share would be vested. A proportionality rule would apply between 5% and 10%. ** Closing expected in August

9 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) 9

10 1H 2018 key figures Key figures for the period ended June 30th,

11 In M Strong 1H 2018 performance driven by continued solid revenue growth and accelerated EBITDA growth Operations in Gabon discontinued from Jan (IFRS 5) 1H 2017 : Revenues 160M - EBITDA 32M Current EBIT 8M Current net income group share- 0.2M 1H 2017 published 1H2017 for IFRS 5 & IFRS9 (1) 1H 2018 Var. Y-Y vs. 1H2017 constant FX vs. 1H2017 constant FX vs. 1H2017 incl. Gabon Revenue 12,346 12,187 12, % +6.0% (2) +4.6% EBITDA 1,651 1,614 1, % +5.8% +3.7% EBITDA margin 13.4% 13.2% 13.3% Current EBIT (3) % +6.8% +5.7% Current Net Income Group share % +19.0% +19.0% Current Net Income Group share excluding capital gains % +13.3% +13.3% Net Income Group share % +21.4% Gross industrial Capex Net FCF (4) Net financial debt 8,561 8,553 10,609 Net financial debt before hybrid repayment 8,561 8,553 9,157 (1) See Appendix 1 (2) +4.1% at constant scope and forex (3) Including the share of current net income of joint ventures and associates of entities viewed as core Company activities (excluding Transdev which is no longer considered a core Group activity). (4) 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. Summary of FX impacts (vs. 1H2017) M % Revenue % EBITDA % Current EBIT % Current Net Income % Net debt vs. Dec % Net debt vs. June % 11

12 Continued very strong revenue growth in Q and accelerated EBITDA growth at constant FX Q1 Q2 Q3 Q4 Year Q1 Q2 France -1.5% -0.4% -0.3% +1.9% -0.1% +0.6% -1.1% Europe excl. France +7.2% +4.4% +8.1% +6.1% +6.4% +6.9% +6.7% Rest of the World +11.8% +10.8% +9.4% +14.2% +11.6% +14.7% +13.2% Global Businesses -3.2% +1.7% -2.7% +1.9% -0.4% +3.5% -0.6% TOTAL +4.5% +4.4% +4.3% +6.3% +4.9% +7.0% +5.1% Total excl. Construction & Energy prices +5.9% +4.1% +4.7% +5.0% +4.9% +4.6% +5.3% EBITDA growth +0.9% -0.2% +4.8% +5.2% +2.7% +5.3% +6.4% 12

13 Continued very strong revenue growth in 1H 2018: +6% at constant FX (and + 4.1% lfl) driven by International Revenue in m 12,187* 2,204 12,565* 2,185 Variations vs. June 2017 Variation At constant FX 3,068 3,192 France -0.3% -0.3% Europe excl. France +6.7% +6.8% Rest of the World +4.0% +14.0% 4,234 4,517 Global Businesses -0.9% +1.3% Total +3.1% +6.0% 2,663 2,656 June 2017 June 2018 * Including Other: 18M in H1,2017 and 15M in H1,

14 Strong Commerce & good volumes drive revenue growth in M Like-for-like growth : +4.1% FX - 357M: o/w -129M USD, - 48M Australian $, - 44M Argentinian peso, - 25M Sterling pound SCOPE : + 241M mostly 2017 tuck-ins (Recycling and Industrial Waste in Sweden and in Germany, Energy Services in Korea ) partly offset by the divestiture of industrial Services in the US closed in Feb (- 91M impact in 1H, 2018) HIGHER ENERGY PRICES BUT CONTINUED LOWER RECYCLED PAPER PRICES : + 37M : Recyclate impact :- 46M (- 20M in Q1) : o/w Paper Prices - 64M (- 26M in Q1): prices down 25 % in H1 with market prices down 39% in France and - 51% in Germany (see slide 41) partially offset by plastic, recycled lubricant and sulfuric acid prices Energy Prices : + 83M : mostly in Q1 (+ 70M) in the US notably Benefit of higher electricity prices in Poland in Q2 FAVORABLE VOLUMES & COMMERCE IMPACTS BUT LOWER CONSTRUCTION AND ADVERSE WEATHER IN Q2: + 307M Volumes + 177M : Continued growth of waste volumes in France, Europe and ROW, and strong Hazardous waste partly offset in Q2 by lower (-1.5%) Water volumes in France (- 13M, weather related) Construction : + 48M (vs. + 76M in Q1): reduction in Q2, particularly at VWT Commerce : + 104M mostly in the US, Latam, Asia, Toxic waste and multi utility industrial contracts (VIGS) Weather (energy) : - 22M vs. + 17M in Q1 due to a very mild Q2 in CEE: - 44M impact QoQ with -68% HDD in Poland and -79% in Czech Rep PRICE EFFECTS: + 109M : mostly Asia, Latam (waste), UK (waste) and CEE (increase in water tariffs) 14

15 Solid growth in Waste: +10.9% at constant FX (+5.2% like-for-like) : Very strong Volume & Commerce momentum partly offset by recycled paper prices France: Revenue down 0.7% to 1,223M: Very good volume trends notably in landfills and incineration Recycled paper impact: - 34M UK/Ireland: Revenue up 4.8% at constant FX to 897M VOLUME/ COMMERCE: contract wins, excellent PFI performance and main waste landfilled volumes strongly up Germany revenue up 9.8% to 544M thanks to 2017 tuck-ins o Recycled paper impact: - 24M 1H 2018 Recycled raw materials prices -1.1% Volumes / activity levels +4.0% Service price increases +1.6% Other +0.7% Growth at constant scope & exchange rates +5.2% Scope effect +5.7% Growth at constant exchange rates 10.9% Currency effect -3.8% North America : Revenue up 7.7% at constant scope and FX to 397M : good volumes and prices in regeneration services and Hazardous waste - IS divested since Feb Pacific revenue up 11.5% at constant FX to 385M: pursuit of recovery, with the benefit of the Woodlown MBT new facility and good volumes 15

16 EBITDA up 5.8% at constant FX : Continued improvement in our operational performance EBITDA in M 1,614* 1,673* Variations vs. June 2017 Variation At constant FX France -0.5% -0.5% Europe excl. France +3.5% +2.6% Rest of the World +8.6% +18.4% Global Businesses +1.5% +2.0% Total +3.7% +5.8% June 2017 June 2018 * Including Other: + 4M in H1,2017 and + 2M in H1,

17 EBITDA Growth of +5.8% at constant FX driven by Revenue Growth and Efficiency gains in M FX : - 34M, o/w : USD - 14M, Australian $ - 5, Argentinian Peso, - 4M Sterling pound SCOPE : + 35M mostly 2017 tuck-ins : Recycling and Industrial Waste in Sweden and in Germany etc. PROFITABLE ORGANIC GROWTH WITH A COMMERCE/VOLUME EBITDA IMPACT OF + 62M Growing solid Waste volumes in France, in the UK (with higher electric revenue), in Latam, Australia and very strong Toxic (France, US, China notably) Commerce : robust momentum ADVERSE WEATHER:- 24M: o/w - 13M impact in Energy (vs. + 3M in Q1) due to the very mild Q2 in CEE and - 11M in French Water ENERGY & RECYCLATE PRICES : - 42M : ENERGY :- 26M : temporary pinching in CEE due to higher coal prices (- 20M, in Q1) WASTE : recycled materials - 6M (- 12M impact of paper prices partly compensated by plastics and sulfuric acid price) and higher fuel costs - 10M (transitory pinching) PRICE COST SQUEEZE : - 63M : higher indexation of water & waste contracts but continued pressure on salary increases and other costs VERY FAVORABLE IMPACT FROM COST REDUCTIONS: + 148M 17

18 France : adverse weather and recycled paper prices but better underlying profitability, driven by enhanced operational efficiency In M Revenue EBITDA EBITDA margin 1H, H, 2018 (1) At constant FX 2,663 2, % -0.3% (2) % -0.5% 14.1% 13.9% WATER: adverse weather... but continued improvement of performance Stable Revenue: Excellent commercial momentum but lower volumes (-1.5% yoy) due to very humid Q2, notably in the South of France Price effects: better indices : +0.6% vs. -0.3% in 1H 2017 EBITDA up driven by accelerated efficiency gains (up +28% yoy, and 1.5% of sales) more than offsetting lower volumes (EBITDA impact - 11M) and continued price cost squeeze Voluntary departure plan almost completed with a full impact in 2019 WASTE : continued good volumes, offset by lower recycled paper prices Revenue down 0.7% Volumes-Commerce:+2.8%: good incineration and very strong landfill volumes Recycled paper price impact: -2.8%: - 34M EBITDA down due to lower recycled paper prices (- 7M impact) (1) Proforma IFRS 5 & 9 and including IFRIC12 (2) Like for like growth of -0.3% 18

19 Rest of Europe : Good performance in all regions In M Revenue EBITDA EBITDA margin 1H, H, 2018 (1) At constant FX 4,234 4, % +6.8% (2) % +2.6% 17.0% 16.5% UK- Ireland : excellent start of the year Revenue up +4.4% (3) to 1,085M due to excellent plant operational performance of PFIs (96% availability vs. 93% in June 2017), higher electricity prices, and continued solid commercial activity. Overall limited YTD impact of recycled paper prices, offset by other materials EBITDA strongly up : impact of new contracts, excellent operational efficiency Central & Eastern Europe : good performance, partly offset by adverse weather in Q2 Revenue up +4.1% (3) to 1,580M : good commercial momentum and favorable price effects (in water and energy), partly offset by very mild weather in Q2 : - 33M impact on revenue in H1 Small acquisitions in WASTE EBITDA down due to higher fuel cost (temporary pinching) and adverse weather in Q2 (- 13M impact in H1), partly offset by efficiency gains. Northern Europe : Benefit of 2017 asset turnover in Sweden Negative impact of lower recycled paper prices Revenue up +12.8% (3) to 1,343M : mostly impact of 2017 acquisitions in Nordics, Netherlands and Germany in recycling and industrial waste Germany +4.7% : negative impact of paper price decline (- 24M) partially offset by plastics; higher energy prices offset by mixed volumes (no weather impact) EBITDA : Double digit growth : revenue growth and continued efficiency gains (1) Proforma IFRS 5 & 9 and including IFRIC 12 (2) Like-for-like growth of +2.5% (3) At constant FX 19

20 Rest of the world : Solid growth in all geographies In M Revenue EBITDA EBITDA margin 1H, H, 2018 (1) At constant FX 3,068 3, % +14.0% (2) % +18.4% 13.3% 13.9% North America: good start of the year Revenue up 4.9% (3) to 979M and +14.5% organic (divestiture of IS closed on Feb 23) : strong growth in Energy (+25.3% (3) ) due to higher heat and electricity prices and volumes in Q1, and to new contracts in energy efficiency (e.g. : Du Pont, CHUM in Canada etc.); strong Water (both industrial and municipal) EBITDA up double digit, mostly driven by Energy outperformance and Efficiency gains Latin America: continued solid growth Revenue up 29.1% (3) to 387M & EBITDA up double digit (3) accordingly: tariff increases, new contracts, and benefit of Grupo Sala in Columbia since May 1 st Asia: continuation of strong growth Revenue up +21.8% (3) to 859M & EBITDA up double digit (3) : growing waste volumes (in China, Korea, Hong Kong) & pursuit of outstanding commercial momentum (numerous industrial contracts in Korea, municipal EPC in Japan, Toxic waste and municipal energy in China) Pacific: very good semester Revenue up 15.2% (3) to 517M & strong EBITDA growth : new assets (Woodlawn MBT) and tuck-ins in Waste (1) Proforma IFRS 5 & 9 and including IFRIC 12 (2) Like-for-like growth of +13.0% (3) At constant FX 20

21 Global Businesses: Strong hazardous waste offset by weak construction In M Revenue EBITDA EBITDA margin 1H, H, 2018 (1) At constant FX 2,204 2, % +1.3% (2) % +2.0% 4.7% 4.8% Construction: slow start of the year Revenue down 5.7% (3) to 1,299M and decrease in EBITDA VWT revenue down 10.1% (3) due to late bookings in 2017 and more selectivity, but backlog of 1,973M is 10.7% higher than at June 30, Oil& gas bookings are back and desalination projects are expected by year end. SADE : stable revenue: continued strong growth in France & in Telecom activity, but pursuit of restructuring international Hazardous waste : very good start of the year in all activities despite adverse weather in Q1 Revenue up +9.6% (3) to 552M : strong commercial momentum, higher volumes, solid lubricant recycling business EBITDA up double digit driven by revenue evolution and continued efficiency gains VIGS (multi utility industrial contracts in Europe) : Revenue up 11.6% (3) to 220M due to good volumes and new contracts (e.g. Arcelor Mittal in Fos) (1) Proforma IFRS 5 & 9 and including IFRIC 12 (2) Like-for-like growth of 0% (3) At constant FX 21

22 Current EBIT: +6.8% at constant FX Much lower impact from provision reversals In M 1H2017 published 1H2017 1H2018 Δ vs. 1H2017 Δ vs. 1H2017 at constant FX EBITDA 1,651 1,614 1, % +5.8% Renewal expenses Depreciation & Amortization (including principal payments on OFAs (1) ) Provisions (2), fair value adjustment & other (3) Share of current net income of joint ventures and associates Current EBIT % +6.8% (1) Repayment of OFA: - 72M in H1, 2018 vs. - 90M in H1, 2017 (2) Provisions : In 1H 2017 : net reversals of self insurance provisions and of pension provisions on top of landfill site remediation provisions reversals In 1H 2018 : landfill provisions reversals partly offset by a few asset depreciations (3) Other include industrial capital gains for 3.6M in 1H2018 vs. 7.5M in 1H

23 Current net income up 19% (+13.3% excl. capital gains) at constant FX vs. June 2017 In M 1H2017 published 1H2017 1H2018 Δ vs. 1H2017 at constant FX Current EBIT (1) % Cost of net financial debt Other financial income and expense Net capital gains on financial divestitures Income tax expense Non-controlling interests Current net income Group share % Current net income Group share % Excluding net financial capital gains (2) (1) Including the share of current net income of joint ventures and associates of entities viewed as core Company activities (2) Including related taxes and minorities o o o o Cost of net financial debt down 8M at constant FX to 199M : benefits from active debt management partly offset by non-euro denominated debt Cost of borrowing down from 4.99% to 4.42% (net) Other financial income and expense includes charges related to changes in discount rates (- 12M) and interest on concession liabilities of - 45M (stable Y-Y) Net financial capital gains of 19M: include Industrial Services capital gain in Q1 partly offset by a few fair value adjustments on pending sales Current tax rate of 26%, stable 23

24 Non current items include 42M in restructuring charges and 45M of charges related to Gabon 1H2017 published 1H2017 1H2018 Current net income Group share Non current items, net of tax Non current impairments Restructuring charges Net income from discontinued operations (Lithuania/Gabon) Share of net income of equity-accounted entities (Transdev) Other Net income Group share

25 Net FCF excluding WCR seasonality of + 469M in 1H2018 o Gross industrial capex up 20% (+26.8% at constant FX), in line with commercial development Maintenance capex: 285M vs. 278M Growth Contractual Capex up to 306M from 248M Discretionary capex sharply up to 121M mostly in Asia : new industrial contracts in Korea, toxic waste in Singapore and in China in M Gross Industrial Capex ( M) o Net FCF (1) of - 321M vs M in 1H2017: - 128M variance due to: Increased net capex vs. H1, 2017 : 692M vs. 568M (- 124M) Higher cash restructuring charges and others : - 119M (o/w - 53M for French water departure plan) vs. - 72M in H1,2017 Higher WCR (- 82M vs. June 2017) due to revenue evolution and increased coal inventory in CEE (price and volume related) Excluding seasonal WCR variation (- 790M), net FCF amounted to + 469M in 1H2018 in M 1H2017 repr. Maintenance and contractual capex Net Free Cash Flow ( M) 1H2018 Discretionary growth capex o Net financial debt of 9,157M, and 10,609M after hybrid repayment of 1,452M Up 604M vs June 2017 (including favorable FX of 117M) due to 610M net financial acquisitions from June 2017 to June 2018 In H1 2018: - 432M of acquisitions (o/w Grupo Sala and Indian hazardous waste) and + 129M of divestures (o/w IS in the US for + 94M) Up vs. December 2017 due to impact of WCR seasonality (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. 25

26 Net Financial Debt at June 30 includes - 1,452M of hybrid repayment and - 790M of negative seasonal WCR * Financial investments of - 432M net of financial divestitures of + 129M 26

27 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) 27

28 Appendix

29 Appendix 1: Main figures (1) for the half year ended June 30, 2017 IFRS 5 June 2017 In m Adjustment(3) published IFRS 9 Adjustment June 2017 Revenue 12, ,186.5 EBITDA 1, ,613.8 Current EBIT (2) Operating income Current net income - Group share Net income - Group share Gross industrial investments Net Free Cash Flow Net financial debt -8, ,553 (1) Non audited figures (2) Including the share of current net income of joint ventures and associates for the half year ended June 30, 2017 (3) In order to ensure the comparability of periods, the published accounts ending June 30, 2017 have been for the reclassification of the Group s activities in Gabon into Net income (loss) from discontinued operations in accordance with the application of the IFRS 5 standard. VEOLIA Main figures for the half year ended June 30,

30 Appendix 1: Main figures for the half year ended June 30, 2017 (1) - Revenue by segment (1) Non audited figures VEOLIA Main figures for the half year ended June 30,

31 Appendix 1: Main figures for the half year ended June 30, 2017 (1) - EBITDA by segment (1) Non audited figures VEOLIA Main figures for the half year ended June 30,

32 Appendix 1: Main figures for the half year ended June 30, 2017 (1) Current EBIT by segment (1) Non audited figures VEOLIA Main figures for the half year ended June 30,

33 Appendix 2: IFRS 9 Financial Instruments o As of January 1, 2018, the Group is applying the new IFRS 9 standard concerning financial instruments, replacing the application of former standards IAS 39. The new standard, IFRS 9, provides for a retroactive application of the classification and evaluation of financial assets and liabilities. Particularly for the Group, it also calls for new methodologies regarding the provisioning of trade receivables and a regularization of the amortized cost of bonds which have been re-negociated. o In the P & L, these restatements related to this new standard resulted in only insignificant impacts on EBITDA and current EBIT. VEOLIA Main figures for the quarter ended March 31,

34 Appendix 3: Currency movements Main currencies 1 = xxx foreign currency 1H H 2017 US dollar Average rate Closing rate UK pound sterling Average rate Closing rate Australian dollar Average rate Closing rate Chinese renminbi yuan Average rate Closing rate Czech crown Average rate Closing rate H2018 vs. 1H % +2.1% +2.2% +0.8% +8.6% +5.9% +3.6% -0.2% -5.1% -0.7% The average rate applies to the income statement and the cash flow statement The closing rate applies to the balance sheet 34

35 Appendix 4: Quarterly revenue by segment 1 st quarter nd quarter rd quarter 2017 In M at cst FX at cst scope & FX at cst FX at cst scope & FX at cst FX at cst scope & FX France 1,323 1, % +0.6% 1,365 1, % +2.2% 1,377 1, % +0.9% Europe excl. France 2,172 2, % +6.2% 1,911 1, % +2.4% 1,748 1, % +5.8% Rest of the World 1,426 1, % +6.0% 1,407 1, % +4.7% 1,514 1, % +5.0% Global Businesses 1,068 1, % -4.2% 1,151 1, % +3.4% 1,086 1, % -0.7% Other 6 7 Ns Ns 6 11 Ns Ns 8 7 Ns Ns Group 5,995 6, % +3.1% 5,840 6, % +3.2% 5,734 5, % +3.1% 4 th quarter st quarter nd quarter 2018 In M at cst FX at cst scope & FX at cst FX at cst scope & FX at cst FX at cst scope & FX France 1,352 1, % +3.3% 1,303 1, % +0.7% 1,361 1, % -1.3% Europe excl. France 2,252 2, % +1.6% 2,275 2, % +3.3% 1,959 2, % +1.6% Rest of the World 1,682 1, % +10.5% 1,569 1, % +14.4% 1,498 1, % +11.6% Global Businesses 1,322 1, % +3.3% 1,037 1, % +2.6% 1,167 1, % -2.3% Other 11 4 Ns Ns Group 6,618 6, % +4.4% 6,191 6, % +5.4% 5,995 6, % +2.6% 35

36 Appendix 5: Quarterly revenue by business 1 st quarter nd quarter rd quarter 2017 In M at cst FX at cst scope & FX at cst FX at cst scope & FX at cst FX at cst scope & FX Water 2,635 2, % -0.9% 2,701 2, % +3.2% 2,700 2, % +0.1% Waste 2,014 2, % +5.6% 2,160 2, % +2.1% 2,143 2, % +4.9% Energy 1,346 1, % +7.1% 979 1, % +5.6% % +8.0% Group 5,995 6, % +3.1% 5,840 6, % +3.2% 5,734 5, % +3.1% 4 th quarter st quarter nd quarter 2018 In M at cst FX at cst scope & FX at cst FX at cst scope & FX at cst FX at cst scope & FX Water 2,993 3, % +4.6% 2,554 2, % +3.8% 2,702 2, % -1.2% Waste 2,194 2, % +6.1% 2,155 2, % +4.3% 2,223 2, % +6.0% Energy 1,432 1, % +1.5% 1,483 1, % +9.9% 1,070 1, % +5.2% Group 6,618 6, % +4.4% 6,191 6, % +5.4% 5,995 6, % +2.6% 36

37 Appendix 6: Continued rebound in revenue: up 6% at constant FX to 12,565M : Analysis by business REVENUE IN M 12,565 12, H2017 1H2018 Water: +1.3% at constant FX, (+1.2% at constant scope & FX) Volumes/commerce: +0.3%** o France: volumes down 1.5%; Excellent commercial momentum o Central Europe: volumes up 0.7% o Continued robust commercial momentum in Rest of the World Price effects* (+1.1%) : Indexation of +0.6% in France & higher tariffs in Roumania, Bulgaria & Slovaquia; higher energy prices at BVAG in Germany Construction (+0.1%): Solid construction activity, in ROW mostly (Pacific, Middle East) but very slow start of the year at VWT Strong growth in Waste: +10.9% at constant FX (+5.2% at constant scope & FX) Scope: +5.7%: acquisitions in Germany, Sweden & Asia in 2017 partly offset in 2018 by the divestiture of Industrial Services in the US (- 91M) Strong Volumes & Commerce : +4.0%** o Continued growth in volumes: in France (+2.8%), Rest of World (USA, Asia, Amlat, Pacific), hazardous waste o Commerce: strong renewal rate and contract awards Price effects: +1.6% mainly in Latin America, Asia and the UK Decrease in recycled prices (-1.1%) Rebound in Energy Services: +7.5% at constant FX (+7.9% at constant scope & FX) Scope: (-0.4%): divestiture of FM activities in Sweden Negative weather impact: - 22M (-0.9%) in CEE in Q2 (partly offset by a cold Q1 in the US) Volumes / Commerce: (+3.7%**): higher volumes of energy sold in Central Europe and China, start of new energy contracts in Canada, new industrial energy efficiency contracts (VIGS) Price effects (+2.2%) : mostly heat and electricity prices strongly up in the US Variations vs. 1H2017 constant FX constant FX & scope * Including energy prices for BVAG ** Excluding Works Water -1.3% +1.3% +1.2% Waste +7.1% +10.9% +5.2% Energy +5.4% +7.5% +7.9% Total +3.1% +6.0% +4.1% 37

38 Appendix 7: Waste Breakdown of revenue by activity Overall waste revenue breakdown by activity stable compared to 1H17. 1H2017 revenue: 4.4bn 1H2018 revenue: 4.7bn 10% 15% Municipal Collection & Street Cleaning Commercial & Industrial Collection 8% 14% 20% 19% Sorting & Recycling MBT Energy Recovery (Incineration) 20% 19% 9% 10% 17% Landfill Hazardous & Liquid Waste Industrial Services / Waste 9% 11% 19% 38

39 Appendix 8: Quarterly waste revenue and volumes Quarterly revenue growth at constant scope & FX Y-Y Quarterly volume trends 39

40 Appendix 9: 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: OECD for USA & UK, INSEE for France, Eurostat for Germany - June: same index as May for all the countries but the US (June) 40

41 Appendix 10: Recycled paper prices : a limited, but continued negative impact Recycled paper account for less than 2% of the Group s Revenue and less of the Group s EBITDA* o Chinese ban: Sharp decline of Paper and cardboard prices due to a higher selection of paper grades since January Breakdown of Waste Revenues (2017, in M) o Temporary oversupply in Europe => pressure on prices o China has released new import quotas in April o Prices have stabilized since April o Limited Veolia exposure o Limited export volumes to China o Our recycled papers comply with Chinese criteria o/w Sorting & Recycling (Services) o/w Sale of Recycled Papers Other Recyclates 1, ,040 o Higher impact in Q2 vs. Q due to continued rising prices through Q3 in 2017 o Average market price decline of -39% in France (1) & -51% in Germany (2) o Average Veolia selling price decline of 25% o Revenue impact : - 64M (- 34M in France, - 24M in Germany) o EBITDA impact : - 12M (o/w - 7M in France) *In 2017 (1) Average French Copacel paper (ref 1.05) price of 78/T vs. 127 /T in 1H2017 (-39%) Average 2017 price of 126/T (2) Average German EUWID paper price of 37/T vs. 75 /T in 1H2017 (-51%) Average 2017 price of 75.7/T 41

42 Appendix 11: Recycled paper : market prices (1/2) France Germany 42

43 Appendix 11: Recycled paper : market prices (2/2) Long term evolution of paper and cardboard prices ( /T - France) 43

44 Appendix 12: Statement of cash flows In M 1H2017 1H2018 EBITDA (1) 1,614 1,673 Net industrial investments WCR variation Dividends received (2) Renewal expenses Restructuring and other non current charges Operating Free Cash Flow Taxes paid Interest paid Interest on concession liabilities Net Free Cash Flow Net before dividends, acquisitions & financial divestments Dividends paid (3) Financial investments, net of divestitures (4) Other Cash generation ,303 Impact of exchange rates Other +19-1,448 Variation of net financial debt ,776 Opening net financial debt 7,812 7,833 Closing net financial debt 8,553 10,609 (1) Including principal payments on operating financial assets (2) O/W Asia 42M (3) Dividends paid to shareholders (- 463M), non-controlling interests (- 88M) and to hybrid holders for - 66M in 1H2018 (4) Including acquisitions for - 432M and divestments for + 129M 44

45 Appendix 13: Net investments by segment 1H2018 (in M) Maintenance Contractual capex (1) Discretionary growth capex (1) (1) Of which New OFAs TOTAL GROSS CAPEX Industrial divestments France Europe excl. France Rest of the World Global Businesses Other TOTAL NET CAPEX TOTAL 1H H2017 (in M) Maintenance Contractual capex (1) Discretionary growth capex (1) (1) Of which New OFAs TOTAL GROSS CAPEX Industrial divestments France Europe hors France Reste du Monde Activités Mondiales Autres TOTAL NET CAPEX TOTAL 1H

46 Appendix 14: Cost of net financial debt Cost of net financial debt down 11M to 199M: benefits from active debt management and lower cost of carry In M 1H2017 Rate 1H2018 Rate Cost of net financial debt % % 46

47 Appendix 15: Financing rate Net financing rate down 57 bps as of 6/30/2018 to 4.42% relative to average net debt of 9,064M Gross cost of borrowing rate declined by 37 bps, from 3.17% to 2.80% Decrease in the interest rate on cash balances from 20 bps at 6/30/17 to 6/30/18 1 bp at In M June 30, 2017 June 30, 2018 Average gross debt (1) 13,349 14,032 Gross cost of borrowing 3.17% 2.80% Average cash balance 5,257 5,263 Interest rate 0.20% 0.01% Average bank overdrafts Average net financial debt (2) 8,379 9,064 Net financing rate 4.99% 4.42% Closing net financial debt (3) 8,553 10,609 Average cash balance net of commercial paper 2,189 1,832 (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, 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 capital. 47

48 Appendix 16: Debt management (1/2) o Repayment of hybrid bond in Euros and in Sterling issued in January 2013 for a nominal amount of 1,452m in April 2018 o Arrival at maturity of the euro-denominated bond for a nominal amount of 472 million in May 2018 o o Group liquidity: 6.2bn, including 4bn of undrawn confirmed credit lines (without disruptive covenants) Net Group liquidity: 2.4bn o Average maturity of bond debt: 8 years at June 30, 2018 vs. 8.1 years at the end of 2017 Net financial debt after hedges at June 30, 2018 Currency breakdown of gross debt (after hedges) at June 30, 2018 Fixe Rate : 87% Variable Rate : 13% 48

49 Appendix 16: Debt management (2/2) Veolia Bond Maturity Schedule RATING Moody s : P-2/ Baa1 stable outlook Standard & Poor s : A-2 / BBB stable outlook 49

50 Appendix 17: Net liquidity In M December 31, 2017 (1) June 30, 2018 Veolia Syndicated credit lines 3, ,000.0 Bilateral credit lines Lines of credit Cash and cash equivalents (1) 5, ,190.9 Total Veolia 9, ,182.5 Subsidiaries Cash and cash equivalents (1) 1, ,099.5 Total Subsidiaries 1, ,099.5 Total Group liquidity 10, ,282.0 Current liabilities and bank overdrafts 4, ,891.5 Total Group net liquidity 5, ,390.5 (1) Including liquid assets and financing related assets included in net financial debt 50

51 Appendix 18: Consolidated statement of financial position In M December 31, 2017 June 30, 2018 Intangible Assets 9,408 9,546 Property, Plant & Equipment 7,294 7,255 Other non-current assets 3,525 3,241 Operating financial assets (current and non-current) 1,614 1,496 Cash and cash equivalents 6,264 2,929 Other current assets 10,173 11,324 Total Assets 38,279 35,792 Capital (including non-controlling interests) 8,634 6,714 Financial debt (current and non-current) 14,431 14,062 Other non-current liabilities 4,193 4,099 Other current liabilities 11,021 10,918 Total Liabilities & Shareholders Equity 38,279 35,792 51

52 SUSTAINABLE DEVELOPMENT 2020 roadmap: 2017 results 52

53 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 53

54 Our commitments for sustainable development 2020 roadmap: 2017 results (1/3) RESOURCING THE PLANET SUSTAINABLY MANAGE NATURAL RESOURCES BY SUPPORTING CIRCULAR ECONOMY 2020 TARGET: Achieve 3.8 billion in circular economy related revenue PERFORMANCE: 4.4 billion. CONTRIBUTE TO COMBATING CLIMATE CHANGE 2020 TARGET:. Achieve 100 million metric tons CO 2 equivalent of reduced emissions and 50 million metric tons CO 2 equivalent of avoided emissions for the period spanning from 2015 to Capture over 60% of methane from the landfills we operate PERFORMANCE:. 44 million metric tons CO 2 equivalent reduced and 18 million metric tons CO 2 equivalent avoided, since % of methane captured. PROMOTE AN ECO-FRIENDLY APPROACH TO CONSERVE BIODIVERSITY 2020 TARGET: Carry out a diagnosis and deploy an action plan in 100% of sites with significant biodiversity issues PERFORMANCE: Diagnosis and action plan in 54% of the sites identified. 54

55 Our commitments for sustainable development 2020 roadmap: 2017 results (2/3) RESOURCING THE REGIONS BUILD NEW MODELS FOR RELATIONS AND VALUE CREATION WITH OUR STAKEHOLDERS CONTRIBUTE TO LOCAL DEVELOPMENT SUPPLY AND MAINTAIN SERVICES CRUCIAL TO HUMAN HEALTH AND DEVELOPMENT 2020 TARGET: Have entered into a major partnership based on value creation in each zone and each growth segment PERFORMANCE: Examples of major partnerships signed: Danone, IBM, Huawei, Livelihoods, CCSL, Swiss Re TARGET: Maintain above 80% the percentage of Veolia s spending reinvested locally PERFORMANCE: 85.4% (average calculated for the principal areas representing 71% of 2017 revenue) TARGET: Contribute to the United Nations sustainable development goals, as we did to the Millennium Development Goals PERFORMANCE: 7.9 million people connected to a drinking water supply and more than 3.54 million to a sanitation service (1) (1) Since the definition of the Millenium Development Goals in 2000, the Group has helped 7.9 million people (703,535 in the year 2017) in developing and emerging countries to obtain access to drinking water and connected 3.54 million (232,435 in 2017) to sanitation services 55

56 Our commitments for sustainable development 2020 roadmap: 2017 results (3/3) VEOLIA S PEOPLE GUARANTEE A HEALTHY AND SAFE WORKING ENVIRONMENT 2020 TARGET: Achieve an accident at work frequency rate of 6.5 or less PERFORMANCE: Frequency rate: 9.55 (Frequency rate was reduced from in 2011 to in 2015) ENCOURAGE THE PROFESSIONAL DEVELOPMENT AND COMMITMENT OF EACH EMPLOYEE 2020 TARGET:. Provide training to over 75% of employees every year.. Maintain management s commitment rate at over 80% PERFORMANCE:. 72% of employees have undergone training.. Manager commitment rate: 86%. GUARANTEE RESPECT FOR DIVERSITY AND HUMAN AND FUNDAMENTAL SOCIAL RIGHTS WITHIN THE COMPANY 2020 TARGET: Achieve 95% of employees with access to social dialogue devices PERFORMANCE: Over 89% of employees covered by social dialogue arrangements. 56

57 Contacts Analyst & Investor Relations Ronald Wasylec Senior Vice President, Investor Relations Telephone : ronald.wasylec@veolia.com Ariane de Lamaze Vice President, Investor Relations Telephone : ariane.de-lamaze@veolia.com 30, rue Madeleine Vionnet Aubervilliers, France Media Relations Laurent Obadia Telephone : laurent.obadia.@veolia.com Sandrine Guendoul Telephone : sandrine.guendoul@veolia.com 30, rue Madeleine Vionnet Aubervilliers, France