INTERIMFINANCIAL. REPORT at 30 June

Transcription

1 INTERIMFINANCIAL REPORT at 30 June 2012

2 CONTENTS 1. CERTIFICATION OF THE PERSON 2 RESPONSIBLE FOR THE INTERIM FINANCIAL REPORT 2. INTERIM ACTIVITY REPORT 4 AT 30/06/ Highlights of the period Summary of results for the first half of Summary Activities EBITDA (Earnings before interest, tax, depreciation and amortization) Current operating income and operating income Net financial income Net income of consolidated companies Share of income of affiliates The HIME sub-group HIME balance sheet items HIME statement of cash flows Consolidated net income, Séché Group share Summary of the consolidated balance sheet at 30/06/ Non-current assets Current assets (excluding cash and cash equivalents) Shareholders equity Current and non-current liabilities Summary of the consolidated statement of cash flows Main transactions with related parties Outlook Risks and uncertainties Future prospects Ownership structure 16

3 3. INTERIM CONSOLIDATED FINANCIAL STATEMENTS 18 AT 30/06/ Consolidated balance sheet Consolidated income statement Statement of net income and gains and losses directly recognized in equity Statement of changes in consolidated shareholders equity Consolidated statement of cash flows Notes to the interim consolidated financial statements at 30/06/ Accounting principles and methods Presentation of the accounts and comparability Consolidation scope Parent company Consolidated subsidiaries Explanatory notes to the financial statements Notes to the balance sheet Notes to the income statement Financial risk management Joint ventures - proportional consolidation Earnings per share Key events since the closing of accounts STATUTORY AUDITORS LIMITED REVIEW REPORT 49 ON THE INTERIM FINANCIAL REPORT AT 30 JUNE 2012 Illustrations: Studio Version.com Creation: not-@-midnight - Caroline Férec 2012

4 CERTIFICATION OF THE PERSON RESPONSIBLE 1FOR THE INTERIM FINANCIAL REPORT 1. CERTIFICATION OF THE PERSON RESPONSIBLE FOR THE INTERIM FINANCIAL REPORT I hereby certify that, to the best of my knowledge, the summary accounts for the half-year reporting period have been drawn up in accordance with applicable accounting standards and provide a faithful and accurate image of the financial situation and income of the Company and all companies included in the consolidation scope, and that the attached interim activity report provides an accurate description of the major events that occurred during the first six months of the financial year, their impact on the accounts, the main transactions with affiliates and a description of the principal risks and uncertainties for the remaining six months of the year." The Chairman of the Board of Directors, Joël Séché Changé, 4 September

5 Interim financial report at 30 June

6 INTERIM ACTIVITY REPORT 2AT 30 JUNE INTERIM ACTIVITY REPORT AT 30/06/ HIGHLIGHTS OF THE PERIOD 4 The call option granted for four years from 27 May 2008 by Caisse des Dépôts et Consignations (CDC), and later by Fonds Stratégique d'investissement (FSI), which could have taken Séché Environnement's shareholding in HIME from 33% to 51%, expired on 26 May 2012 without having been exercised by Séché Environnement. Exercise of the option would have been uneconomical in a financial context which has changed substantially since Since 27 May 2012 Joël Séché has not been reappointed as Executive Chairman of HIME-Saur, as desired by FSI (which holds 20% of Séché Environnement) in its statement dated 27 April This situation leads the Séché Group to reconsider its strategic position in this regard. In terms of operations, the first half of 2012 was marked by an economic environment affected by a general downturn in industrial activity which results in a lack of clear visibility over the coming months. In addition, the Group was faced with the continuing worsening of PCB market prices, in contrast to the same period in 2011 when those markets were still buoyed by the effects of the regulatory measures intended to eliminate the most polluted transformers. Over the period, the Group was however able to maintain its level of activity by changing the mix of its activities, and posted an increase in revenues of 1.2% over the period. The dynamic of its sales strategy, in particular in the non-hazardous waste sector, enabled the Group to win the public service concession contract to manage an incinerator in Nantes for 12 years. The first effects of this will become perceptible in the 4 th quarter. However, the modified mix of activities penalized the profitability of the Group, which was also affected by technical problems related to unfavourable weather conditions at the beginning of the year. As a result, current operating income for the first half of 2012 came out at EUR 19.8 million (or 9.5% of revenues not including investments in concessions), compared with EUR 29.0 million (13.9% of revenues not including investments in concessions) in the first half of Net income of consolidated companies for the first half of 2012 amounted to EUR 15.6 million (7.5% of revenues not including investments in concessions), a reduction of EUR - 8 million. Séche Environnement's share in the HIME sub-group deteriorated over the period (EUR million for the first half of 2012, versus EUR million in 2011). Net income (Group share) came out at EUR 6.2 million (3.0% of revenues excluding investments in concessions), compared with net income (Group share) for the first half of 2011 of EUR 15.9 million. The Group continued to pursue a policy of targeted investments to ensure the availability of its treatment facilities and their ability to grow. In particular, the Group acquired and developed two new logistics platforms to improve its geographical coverage and technical network for the treatment of hazardous waste. The completion of its refinancing operation in April 2012 extended the maturity of its debt to 6 years and diversified the Group's borrowings by means of a bank credit line and corporate bond issue. These new arrangements provide the Group with the financial independence it needs to pursue its strategic development.

7 2.2. SUMMARY OF RESULTS FOR THE FIRST HALF OF Summary NB: percentages are calculated after restatement of revenues to exclude investments in concessions. OF WHICH OF WHICH (IN MILLIONS OF EUROS) GROUP FRANCE INTERNATIONAL 30/06/11 30/06/12 30/06/11 30/06/12 30/06/11 30/06/12 Revenues Of which revenues outside the scope of IFRIC EBITDA % 23.8% 20.0% 24.6% 20.7% 9.2% 8.9% Current operating income % 13.9% 9.5% 14.4% 9.9% 4.7% 3.8% Operating income % 13.8% 9.2% 14.3% 9.5% 4.7% 3.8% Financial income % 2.3% 1.5% Income from consolidated companies % 11.3% 7.5% Share of income of affiliates (7.8) (9.7) Net income (Group share) % 7.6% 3.0% Interim financial report at 30 June

8 INTERIM ACTIVITY REPORT 2AT 30 JUNE Activities Consolidated revenues amounted to EUR million at 30 June 2012, versus EUR million at 30 June 2011 in published data. The Group achieved growth in the first half of 2012 of + 1.2% in a deteriorating economic context, in contrast to the strong level of activity in the same period in Revenues by division The Group s activities break down by division as follows: (CONSOLIDATED, IN MILLIONS OF EUROS) ACTIVITY 30/06/11 CHANGE % 30/06/12 HW treatment % NHW treatment (outside the scope of IFRIC12) % 76.5 REVENUES OUTSIDE THE SCOPE OF IFRIC % REVENUES UNDER IFRIC NS 4.3 CONSOLIDATED REVENUES % Of which international % 12.0 Of which energy % The growth in activities of + 1.2% (or EUR 2.6 million) breaks down as follows: - 3,5% (EUR million) in the area of hazardous waste (HW) treatment, which suffered particularly from, on the one hand, the contraction of PCB markets in comparison to the level of activity in the corresponding period last year, and on the other hand the downturn in activities linked to industrial production (such as physico-chemical treatments and solvent regeneration). Logistics and incineration however were able to maintain good levels of activity; + 5,3% (EUR 3.8 million) in the non-hazardous waste (NHW) treatment area (not including investments in concessions), which benefited from the strength of the recovery and site rehabilitation activities. The results of this division also benefited from the strong performance of its incineration activities, where notable contributors were the Pau and Oléron incineration sites, but were affected by a fall in storage activities; Revenues of EUR million were booked under public service concession arrangements, in line with the building programme undertaken by Sénerval EBITDA (Earnings before interest, tax, depreciation and amortization) In the first half of 2011, the Group posted EBITDA of EUR 49.7 million, or 23.8% of revenues (not including investments in concessions). In the first half of 2012, EBITDA amounted to EUR 41.6 million, or 20.0% of revenues, a decrease of EUR million. This fall reflects: A reduction in margins related to the organic evolution of activities (not including revenues from investments in concessions, and not

9 including changes in the French tax on polluting activities concerning landfill sites (TGAP CL2): EUR million Changes in the mix of activities (1): EUR million One-time effects (2): EUR million (1) Activities mix effects result principally from a reduction in NHW storage volumes, the fall in prices on the PCB market, and the impact of the economic slowdown on regeneration and physico-chemical treatment. (2) Severe weather conditions in February 2012 caused undesired stoppages at several sites, giving rise to increased maintenance and energy costs (in a context of rising unit energy prices compared with the same period last year) Current operating income and operating income The Group achieved current operating income of EUR 19.8 million (9.5% of revenues not including investments in concessions) versus EUR 29.0 million at 30 June 2011 (13.9% of revenues). The decrease of EUR million is attributable to: The decrease in EBITDA: EUR million Changes in the maintenance costs of assets included in concessions (following takeover of the management of Béarn Environnement): EUR million The favourable resolution of several cases in litigation, which had earlier been provisioned: EUR million The Group s operating income at 30 June 2012 came out at EUR 19.2 million (9.2% of revenues not including investments in concessions), versus EUR 28.7 million (13.8% of revenues) at 30 June This change is in line with the change in current operating income Net financial income Net financial income for the Séché Group came out at 30 June 2011 at EUR million, compared with EUR 4.9 million at 30 June This variation of EUR million is mainly explained by: The increase in the cost of net financial debt (an impact of EUR million), by reason of the increase in the average cost of debt brought about by the refinancing arrangements of April 2012 (the annualized interest rate on the debt over the period having changed from 3.41% to 4.66%); The non-recurrence in 2012 of net write-backs of financial provisions brought about in 2011 by the completion of liquidation of several companies leaving the consolidation scope (EUR million in 2011); Conversely, the increase in income from HIME convertible bonds resulting from the capitalization of interest payments due on 30 April 2012 (an impact of EUR million) Net income of consolidated companies Net income of consolidated companies amounted at 30 June 2012 to EUR 15.6 million, a reduction compared with the net income of consolidated companies posted at 30 June 2011 of EUR - 8 million. This decrease is a direct result of unfavourable variances in operating income and net financial income, net of tax effects Share of income of affiliates This line consists almost entirely of Séché Group s share in income generated by the HIME sub-group. Interim financial report at 30 June

10 INTERIM ACTIVITY REPORT 2AT 30 JUNE 2012 In the first half of 2012, income from the HIME sub-group (Séché Group share) came out at EUR million. In the first half of 2011, the HIME sub-group posted a net loss (Séché Group share) of EUR million, hence the unfavourable variance between the two periods of EUR million The HIME sub-group The main items of the HIME sub-group s activities are presented by core business in the table below: HIME RESULTS 30/06/11 30/06/12 BY CORE BUSINESS (ACTUAL) (ACTUAL) WATER WASTE TOTAL WATER WASTE TOTAL REVENUES % change + 8.5% + 8.0% + 8.4% + 3.9% + 1.1% + 3.3% EBITDA % of revenues 11.0% 11.3% 11.0% 9.3% 10.7% 9.6% CURRENT OPERATING INCOME % of revenues 5.2% 3.7% 4.9% 2.4% 2.2% 2.4% OPERATING INCOME % of revenues 5.4% 3.8% 5.1% 4.3% 2.6% 3.9% Financial income (69.6) (69.0) Net income (Group share) (23.6) (29.1) SHARE HELD BY SÉCHÉ (7.8) (9.6) 8 Operating profitability The water activity posted revenues of EUR million, an increase of EUR million (+ 3.9%) in comparison with the same period of This increase includes a scope effect concerning ancillary businesses of EUR million. Disregarding changes in scope, the water activity generated an increase in revenues of + 2.4%, while achieving EBITDA of EUR 63.1 million, a decline of EUR million, principally due to negative sales effects and the under-performance of the works and engineering department. The waste management business achieved revenues of EUR million (an increase over the half year of EUR 1.8 million, or + 1.1%), EBITDA of EUR 18.2 million (10.7% of revenues), versus EUR 19.1 million in 2011, or 11.3% of revenues). This fall in EBITDA originated in changes in the market price of secondary raw materials. Given the variance in EBITDA for both businesses considered together (EUR million) and a significantly higher level in the first half of 2012 than in the first half of 2011 of net charges for provisions for endof-career payments, current operating income of the HIME sub-group decreased by EUR million, coming out at EUR 20.3 million, or 2.4% of revenue. Operating income, on the other hand, posted a decline of EUR - 8.6%, after recognition of an increase of capital gains on disposals of EUR million, and the one-time effect of a favourable tax audit (EUR million).

11 Financial income The HIME sub-group s financial income came out at EUR million, compared with EUR million in the first half of Net income In this context, the HIME subgroup posted net income of EUR million, a decline of EUR million. The recent change in the chairmanship of HIME, the trend of its profitability over the first half-year and the problems related to the financing of its debt have led to a need to reconsider that company's strategic orientation and refinancing. This process must lead to the drawing up of a new business plan during the second half of 2012, and to an acceptance of the consequences in terms of valuation of the company HIME balance sheet items The main items of the HIME sub-group s balance sheet at 30/06/12 can be summarized as follows: (IN MILLIONS OF EUROS) 31/12/11 30/06/12 Non-current assets Current assets net of cash and cash equivalents Cash and cash equivalents Shareholders equity (including minority interests) (61) (110) Non-current liabilities Current liabilities Non-current assets consist mainly of goodwill (EUR million), and tangible and intangible fixed assets (EUR million). Shareholders' equity of HIME was impacted by a change in the fair value of financial instruments. Current and non-current liabilities break down as follows: HIME statement of cash flows (IN MILLIONS OF EUROS) 31/12/11 30/06/11 30/06/12 Cash flow generated by activities Cash flow linked to investment operations (123.4) (79.3) (29.3) Cash flow linked to financing operations (74.1) (22.8) 7.1 NET CASH FLOW (34.2) (54.3) 12.4 Interim financial report at 30 June

12 INTERIM ACTIVITY REPORT 2AT 30 JUNE 2012 The HIME sub-group s net cash flows in the first half of 2012 resulted in a net surplus of EUR 12.4 million (in the same period in 2011, HIME posted net cash flow consumption of EUR 54.3 million). This net cash surplus is attributable to the cash flow generated in the period (EUR 74.2 million) and net drawings on the MOF line of EUR 69.7 million, which enabled the financing of: Payment of interest on debt (EUR 44.9 million) and scheduled repayments of debt (EUR 12.0 million); Investments net of income from disposals (including BRL, the company operating the Béziers platform) (EUR 29.3 million); Consumption of WCR (EUR 38.7 million); Dividends paid to minority shareholders (EUR 6.0 million) Consolidated net income, Séché Group share In this context, in the first half of 2012 the Séché Group posted net income (Group share) of EUR 6.2 million (2.9% of revenues), compared with EUR 15.9 million (7.6% of revenues) in the same period in SUMMARY OF THE CONSOLIDATED BALANCE SHEET AT 30/06/12 EXTRACT FROM CONSOLIDATED BALANCE SHEET 31/12/11 30/06/12 (IN MILLIONS OF EUROS) ACTUAL ACTUAL Non-current assets Current assets net of cash and cash equivalents Cash and cash equivalents Shareholders equity (including minority interests) Non-current liabilities Current liabilities

13 Non-current assets Non-current assets are primarily fixed assets (intangible, including goodwill, tangible and financial) and deferred tax assets. The change in non-current assets from 31 December 2011 to 30 June 2012 of EUR + 6 million is largely due to: a. A net increase in tangible and intangible fixed assets of EUR million (mainly the effect of investments for concessions); b. Recognition of interest for the period on HIME convertible bonds in the amount of EUR million; c. The change in deferred tax assets of EUR million (mainly due to the transfer to the income statement of fees in connection with the business combination project with HIME, and the restatement of the Effective Interest Rate on the Group's new financing arrangements) Current assets (excluding cash and cash equivalents) Current assets increased by EUR + 13 million, mainly because of an increase in customer receivables related to the irregular character of payments by certain local authorities (EUR million), and advance payments of corporation tax (EUR 4.8 million) Shareholders equity Changes in shareholders' equity (including minority interests) break down as follows: OF WHICH MINORITY (IN MILLIONS OF EUROS) GROUP HIME SHARE INTERESTS SHAREHOLDERS EQUITY AT 31/12/ (148.3) 0.8 Dividends paid (11.1) - - Net earnings (Group share) 6.2 (9.6) (0.2) Foreign currency differences NS (0.2) - Hedging instruments (4.5) (4.1) - Treasury stock (0.1) - - Actuarial variances (0.2) - - Other changes (0.1) - (0.1) SHAREHOLDERS EQUITY AT 30/06/ (162.2) 0.5 Interim financial report at 30 June

14 INTERIM ACTIVITY REPORT 2AT 30 JUNE Current and non-current liabilities 31/12/11 30/06/12 (IN MILLIONS OF EUROS) NC C TOTAL NC C TOTAL Financial debt Hedging instruments Provisions Other liabilities Tax due TOTAL The increase in current and non-current liabilities (EUR million) is principally due to: The change in the equity stake value (negative) of HIME shares under the effects of the net income for the period, and the variation in the fair value of hedging instruments, a total impact of EUR million; An increase in gross financial debt of EUR + 25 million. Changes in the Group s net financial debt break down as follows: (IN MILLIONS OF EUROS) 31/12/11 30/06/12 Bank loans Bonds Lease finance debt Miscellaneous financial debt Short-term bank borrowings Equity investment TOTAL FINANCIAL DEBT (CURRENT AND NON-CURRENT) Cash balance (24.7) (41.4) NET FINANCIAL DEBT Of which less than one year (19.3) 12 Of which more than one year

15 2.4. SUMMARY OF THE CONSOLIDATED STATEMENT OF CASH FLOWS (IN MILLIONS OF EUROS) 31/12/11 30/06/11 30/06/12 Cash flow from operating activities Cash flow from investment activities (50.5) (26.1) (20.3) Cash flow from financing activities (42.8) (28.5) 9.4 NET CASH FLOW (18.7) (18.3) 16.5 In the first half of 2012, Séché Group posted positive net cash flow of EUR million. Cash flow from operating activities Operating activities yielded cash flow amounting to EUR 27.4 million in the first half of 2012, a decrease of EUR million compared with the cash flow generated in the first half of The principal sources of variations in these cash flows are to be found in a reduction in cash generated by operations, in line with the contraction in EBITDA net of maintenance expenses for assets included in concessions (EUR million). Cash flow from investment activities Investment costs (net of gains realized on disposals) amounted to EUR 20.3 million, and almost entirely concern industrial investments. (IN MILLIONS OF EUROS) 30/06/10 30/06/11 30/06/12 Capital expenditure Financial investments INVESTMENTS BOOKED Capital expenditure Financial investments NET INVESTMENTS PAID Interim financial report at 30 June

16 INTERIM ACTIVITY REPORT 2AT 30 JUNE 2012 Industrial investments booked by the Group in the period amounted to EUR 21.1 million, stable over the period. Recurrent investments accounted for 57% of the total in the first half of 2012, against 49% in the same period in Development investments continue to represent a significant share of the Group's overall investments, in line with its strategy of adapting to changes in market conditions and ways of carrying out its businesses. Investments made in the first half-year principally concerned storage activities (EUR 9.4 million: storage cells, land), incineration (EUR 8.3 million, including investments included in concessions) and logistics platforms (EUR 2.4 million for the purchase and development of two platforms to reinforce the Group's geographical coverage). Cash flow from financing activities Cash flow from financing activities amounted to EUR million in the first half of 2012, corresponding principally to: Refinancing of the Group (EUR million); Implementation of new specific financings related to industrial investments (EUR million); Repayment of finance lease liabilities according to the agreed payment schedule (EUR million) and other financings (EUR million); Interest on debt paid in the first half of the year, including refinancing fees (EUR million); Payout of dividends in respect of 2011 (EUR million) MAIN TRANSACTIONS WITH RELATED PARTIES The Group s main transactions with related parties are presented in Note 2.4 in the notes to the present interim financial statements. 14

17 2.6. OUTLOOK Risks and uncertainties The Group s assessment of the main risks and uncertainties to which its businesses are exposed has not changed from that detailed on pages of the 2011 Registration Document filed with the French Financial Markets Authority under number D Future prospects Changes in the regulatory context in which Séché Environnement operates are in fact so many sales opportunities for the Group, since they bring into being "new" forms of waste, lower the threshold of acceptability of certain pollutants, and create new obligations on manufacturers and local authorities, leading them to outsource the management of these "problem" areas. In this way, the coming into force on 1 July 2012 of regulations to lower the threshold of acceptability of the use of clinker in road construction opens up a promising market for the recovery of clinker from incinerated household waste, in which the Group intends to take up a prominent position. Its acquisition of Tree (effective on 1 October 2012), a company operating a clinker recovery plant authorized to treat up to tonnes per year, and storage facilities similarly authorized for up to tonnes per year, is one example of this trend. Séché Environnement is thus committed to a strategy which aims to widen the mix of its activities to include new forms of activity, both to respond to the increasing needs of its customers, particularly in the areas of sorting and recovery, and also to extend its territorial coverage, by means for example of more logistics platforms. Changes of this kind in the activities mix produce shortterm effects on operating results, but also improve the visibility of future revenues, for example by securing waste flows over time, as in the case of logistics platforms, or by increasing the "contractualization" of the Group's activities, as in the case of global offerings to manufacturers, or public service concession contracts with local authorities. This accumulation of negative factors in the first half of 2012 (downturn in industrial markets, beginning of the public service concession in Strasbourg, decline in the PCB market, reduction in storage volumes, etc.) serves to accentuate temporarily the effects on the Group's operating profit margins of changes in its mix of activities, which should reach their low point in Taking account of these new elements, Séché Environnement has accordingly adjusted its original growth and profitability assumptions for the year The Group now forecasts annual growth of its revenues (outside the scope of IFRIC 12) of the order of 2%, including contributions from external growth. This should lead to a margin of current operating income of the order of 11% of revenues (outside the scope of IFRIC 12). In 2013 the Group should see an improvement in profitability thanks to the gradual attenuation of negative mix effects (reduced impact of investments in the Strasbourg concession, stabilization of the PCB activity, contributions from acquisitions, etc.) The capital leverage should be around 2.5 times EBITDA at the end of 2012, and between 2 and 2.5 times EBITDA at the end of In Strasbourg, further investments to be undertaken in 2013 to extend the heating network and to improve the energy efficiency of the incinerator, as provided for by a codicil to the agreement concluded with the Strasbourg urban community in July 2012, should contribute to an increase in the operating profitability of this unit from 2014 onwards. 15 Interim financial report at 30 June 2012

18 INTERIM ACTIVITY REPORT 2AT 30 JUNE OWNERSHIP STRUCTURE NUMBER % VOTING % SHARE OWNERSHIP AT 30/06/12 OF SHARES RIGHTS Joël Séché % % Amarosa family trust (1) % % SUB-TOTAL, JOËL SÉCHÉ FAMILY % % FSI % % Treasury stock (2) % % Free float % % TOTAL % % (1) The Amarosa family trust is majority controlled by Mr. Joël Séché (2) Treasury stock is stripped of voting rights. However, the table here presents the calculation of voting rights as recommended by the AMF for the disclosure of ownership threshold breaches. Since 1 January 2012 and until the date of this Board meeting, Séché Environnement has not been informed of any ownership threshold breaches in either direction. The Board of Directors 16

19 Interim financial report at 30 June

20 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT 30/06/ CONSOLIDATED BALANCE SHEET (IN THOUSANDS OF EUROS) 31/12/ /12/ /06/2012 NOTE Goodwill Intangible fixed assets included in concessions Other intangible fixed assets Tangible fixed assets Investments in affiliates Non-current financial assets Hedging instruments non-current assets Other non-current assets Deferred tax assets NON-CURRENT ASSETS Inventories Trade and other receivables Corporation tax receivables Current financial assets Hedging instruments current assets Other current assets Cash and cash equivalents CURRENT ASSETS TOTAL ASSETS Share capital Additional paid-in capital Reserves Net income (Group share) Shareholders equity (Group share) Minority interests TOTAL SHAREHOLDERS EQUITY Non-current financial debt Hedging instruments non-current liabilities Employee benefits Deferred tax liabilities Other non-current provisions Other non-current liabilities NON-CURRENT LIABILITIES Current financial debt Hedging instruments current liabilities Current provisions Taxes payable Other current liabilities CURRENT LIABILITIES TOTAL LIABILITIES

21 3.2. CONSOLIDATED INCOME STATEMENT (IN THOUSANDS OF EUROS) NOTE 30/06/10 30/06/11 30/06/12 REVENUE Other business income Transfers of expenses Purchases used for operational purposes (27 223) (31 939) (31 080) External expenses (63 838) (70 297) (76 118) Taxes other than on income (15 230) (15 738) (17 586) Employee benefits expenses (42 405) (46 603) (49 515) EBITDA Expenses for rehabilitation and/or maintenance of sites (523) (3 117) (4 647) Other net operating expenses (409) (79) (561) Net allocations to provisions (1 225) (936) (130) Net allocations to amortization (15 956) (16 548) (16 516) CURRENT OPERATING INCOME Income on sale of fixed assets Impairment of assets Consolidation scope variation effects (4 854) - (830) Other operating income and expenses (750) (271) (20) OPERATING INCOME Income from cash and cash equivalents Gross financial borrowing costs (5 231) (3 450) (4 605) COST OF NET FINANCIAL DEBT Other financial income Other financial expenses (1 324) (7 044) (219) FINANCIAL INCOME Corporation tax 11 (8 185) (10 007) (6 586) INCOME OF CONSOLIDATED COMPANIES Share of income of affiliates (9 360) (7 786) (9 655) Net income before net income from discontinued operations Discontinued operations NET INCOME BEFORE MINORITY INTERESTS Of which minority interests (275) (99) (240) Of which attributable to equity holders of the parent Net earnings per share Diluted earnings per share Interim financial report at 30 June

22 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE STATEMENT OF NET INCOME AND PROFITS AND LOSSES DIRECTLY RECOGNIZED IN EQUITY (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Foreign currency differences (408) 91 2 Change in fair value of financial hedging instruments (549) Change in fair value of available-for-sale financial assets (96) (57) (96) Share of profits and losses of affiliates booked directly under shareholders equity and accounted for by the equity method (17 086) (4 115) Actuarial variances - - (356) Tax effects (88) (678) 313 SUB-TOTAL OF GAINS AND LOSSES BOOKED DIRECTLY UNDER SHAREHOLDERS EQUITY (17 422) (4 800) NET INCOME FOR THE PERIOD NET INCOME AND PROFITS (LOSSES) BOOKED DIRECTLY UNDER SHAREHOLDERS' EQUITY (8 955) Attributable to equity holders of the parent company (8 680) Attributable to minority interests (275) (99) (240) 20

23 Interim financial report at 30 June

24 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY CAPITAL ADDITIONAL PAID-IN CAPITAL NUMBER OF SHARES HELD AS TREASURY STOCK (IN THOUSANDS OF EUROS) NOTE 8 NOTE 9 SHAREHOLDERS' EQUITY AT 31/12/ (3 407) Profits and losses booked directly in equity Net income at 30/06/10 Net income and profits and losses booked directly in equity Dividends paid Treasury stock 29 Other changes SHAREHOLDERS' EQUITY AT 30/06/ (3 378) SHAREHOLDERS' EQUITY AT 31/12/ (3 170) Profits and losses booked directly in equity Net income at 30/06/ Net income and profits and losses booked directly in equity Dividends paid Treasury stock - - (15) Other changes SHAREHOLDERS' EQUITY AT 30/06/ (3 185) SHAREHOLDERS' EQUITY AT 31/12/ (3 348) Profits and losses booked directly in equity Net income at 30/06/12 Net income and profits and losses booked directly in equity Dividends paid Treasury stock (100) Other changes SHAREHOLDERS' EQUITY AT 30/06/ (3 448) 22

25 CONSOLIDATED RESERVES AND NET INCOME PROFITS AND LOSSES BOOKED DIRECTLY IN EQUITY TOTAL ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT TOTAL ATTRIBUTABLE TO HOLDERS OF MINORITY INTERESTS TOTAL SHAREHOLDERS EQUITY NOTE (36 836) (17 422) (17 422) (17 422) (275) ( ) (8 680) (275) (8 955) (11 151) (11 151) (2) (11 153) (54 258) (43 232) (99) (99) (11 145) - (11 145) (1) (11 146) - - (15) - (15) (36 236) (61 190) (5 609) (4 800) (4 800) (240) (5 609) (240) (11 140) (11 140) (10) (11 150) (100) (100) (1) (66 799) Interim financial report at 30 June

26 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS OF EUROS) 31/12/11 30/06/11 30/06/12 INCOME OF CONSOLIDATED COMPANIES Elimination of income and expenses with no cash impact and/or not related to operating activities: Amortization and provisions Net capital gains on disposals (221) Deferred taxes Other income and expenses 434 (134) 197 CASH FLOW FROM OPERATING ACTIVITIES Corporation tax Cost of gross financial debt before long-term investments (7 289) (3 541) (3 254) CASH FLOW FROM OPERATING ACTIVITIES BEFORE TAXES AND FINANCING COSTS Changes in working capital requirement (2 163) Tax paid (23 584) (13 839) (5 656) NET CASH FLOW FROM OPERATING ACTIVITIES Cost of acquisition of fixed assets (51 754) (26 273) (19 740) Proceeds from disposals of fixed assets Outflows for acquisitions of financial investments (427) (184) (754) Inflows from disposals of financial investments Net cash outflows for acquisitions of subsidiaries (224) 2 - Net cash inflows from disposals of subsidiaries NET CASH FLOW FROM INVESTMENT ACTIVITIES (50 462) (26 053) (20 261) Dividends paid to equity holders of the parent (11 145) (11 146) (11 052) Dividends paid to minority shareholders of consolidated companies (1) (1) (10) Capital increases in cash Treasury stock movements (333) (10) (133) Changes in other shareholders equity Borrowings Repayments of borrowings (46 066) (22 643) ( ) Interest paid (6 891) (3 340) (9 138) NET CASH FLOW FROM FINANCING ACTIVITIES (42 793) (28 497) TOTAL CASH FLOW FOR THE PERIOD (18 725) (18 320) Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (1) Effect of changes in foreign exchange rates (118) (34) 47 (1) Of which: Cash and cash equivalents Short-term bank borrowings (current financial liabilities) (681) (726) (843)

27 3.6. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT 30/06/ Accounting principles and methods Since 1 January 2005, the Group s consolidated financial statements have been prepared in accordance with IFRS as adopted in the European Union through EU regulation 1606/2002 of 19 July 2002, which instituted the IFRS reporting framework. When drawing up the financial statements at 30 June 2012, no change was made in terms of the accounting principles and methods used for the annual financial statements for the year 2011, which are detailed in the Registration Document filed with the French Financial Markets Authority (AMF) under number D The interim consolidated financial statements for the period ended 30 June 2012 were prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of Séché Group for the year ended 31/12/11. The financial statements were approved by the Board of Directors of Séché Environnement on 28 August Financial data are presented in thousands of euros rounded to the nearest thousand. The financial statements have been prepared with reference to historical costs, except for derivative instruments, which are recognized at fair value. As at 30 June 2012, the Group has decided to anticipate application of the IAS 19 standard Staff benefits. The impact of this amendment is shown under point 6.2 below. In order to prepare consolidated financial statements in accordance with IFRS, management is required to exercise its judgment and make estimates and assumptions that impact the application of the Group s accounting policies and the amounts of assets and liabilities, and income and expenses. The estimates and underlying assumptions are based on past experience and other factors considered reasonable under the circumstances. They serve as the basis for any judgment required for determining the book value of assets and liabilities when such amounts cannot be obtained directly from other sources. The estimates made by the Group primarily concern the recoverable amount of tangible and intangible assets and the recognition of provisions, particularly those for employee benefits. Due to the inherent uncertainty of such valuation processes, estimates and underlying assumptions are continuously reviewed. Actual future results from these operations may differ from these estimates. The estimates made by the Group primarily concern the recoverable amount of tangible and intangible assets and the recognition of provisions (particularly, provisions for employee benefits) Presentation of the accounts and comparability The Group benefited over the half-year from the effects of the takeover (on 6 December 2011) of management of the Pau incinerator for a full six months. Moreover, on 1 January 2012 the Group anticipated application of the accounting standard IAS 19 "Staff benefits". Interim financial report at 30 June

28 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 The impact of this on the Group's financial statements concerns actuarial variances which hitherto were booked under income, but which are henceforth booked directly under shareholders' equity. Retrospective application of this standard would have required the Group's operating income for the first half of 2011 to be adjusted by EUR , and the Group's operating income for the first half of 2010 by EUR As this information is not significant to the financial statements presented, no restated income statements for 2010 and 2011 are presented Consolidation scope Parent company Séché Environnement, a French limited company (Société Anonyme) with share capital of EUR Les Hêtres - BP Changé Consolidated subsidiaries SIREN REGISTRATION % CONSOLIDATION COMPANY NAME NUMBER INTEREST METHOD 26 Alcéa Changé (France) Full Béarn Environnement Pau (France) Full Drimm Montech (France) Full Gerep Paris (France) Full Hungaropec Budapest (Hungary) Full IberTredi Medioambiental Barcelona (Spain) Full Opale Environnement Calais (France) Full SCI LCDL Changé (France) Full SCI Le Honry Changé (France) Full SCI Les Chênes Secs Changé (France) Full SCI Mézerolles Changé (France) Full Séché Alliance Changé (France) Full

29 SIREN REGISTRATION % CONSOLIDATION COMPANY NAME NUMBER INTEREST METHOD Séché Éco-services Changé (France) Full Séché Éco-industries Changé (France) Full Séché Transports Changé (France) Full Senergies Changé (France) Full Sénerval Strasbourg (France) Full Sem Tredi (Mexico) Full Sotrefi Étupes (France) Full Speichim Processing Saint Vulbas (France) Full SVO Éco-industries Le Vigeant (France) Full Tredi Argentina Buenos Aires (Argentina) Full Tredi SA Saint Vulbas (France) Full Triadis Services Étampes (France) Full UTM Lübeck (Germany) Full Valaudia Changé (France) Full Valls Quimica Valls (Spain) Full Sogad Le Passage (France) Proportionate Altergies Paris (France) Equity La Barre Thomas Rennes (France) Equity HIME Paris (France) Equity SCI Noiseraie La Pommeraye (France) Equity SAEM Transval St Georges les Baillargeaux (France) Equity Interim financial report at 30 June

30 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE Explanatory notes to the financial statements Notes to the balance sheet Note 1 - Goodwill, tangible and intangible fixed assets 28 INTANGIBLE OTHER ASSETS INTANGIBLE TANGIBLE SOFTWARE, INCLUDED IN FIXED FIXED GOODWILL PATENTS CONCESSIONS ASSETS ASSETS TOTAL GROSS VALUE 31/12/ Changes in consolidation scope Increases Decreases - (235) - (251) (4 624) (5 110) Other changes (93) (966) (629) 31/12/ Changes in consolidation scope Increases Decreases - (171) - (3 752) (2 102) (6 025) Other changes (101) /06/ AMORTIZATION 31/12/10 - (6 794) - (2 546) ( ) ( ) Changes in consolidation scope - / Allocations - (510) - (316) (31 212) (32 038) Write-backs Other changes /12/11 - (7 070) - (2 862) ( ) ( ) Changes in consolidation scope Allocations - (207) - (6) (16 303) (16 516) Write-backs Other changes - (31) - 31 (626) (626) 30/06/12 - (7 136) - (202) ( ) ( ) IMPAIRMENTS 31/12/10 (25 894) (4) - - (818) (26 716) Changes in consolidation scope Allocations Write-backs Other changes /12/11 (25 894) (4) - - (818) (26 716) Changes in consolidation scope Allocations Write-backs Other changes /06/12 (25 894) (4) - - (818) (26 716) NET VALUE 31/12/ Changes in consolidation scope Increases - (241) Decreases (251) (672) (923) Other changes (93) (434) (97) 31/12/ Changes in consolidation scope Increases (554) Decreases (1 117) (40) (1 158) Other changes (71) /06/ Goodwill: In the absence of indications of impairment losses, impairment tests are performed annually, on 31 December. There were no indications of impairment in the first half of 2012.

31 Note 2 - Investments in affiliates Note Summary of investments in affiliates The investments in affiliates held by the Group are as follows: (IN THOUSANDS OF EUROS) % HELD BY GROUP SHAREHOLDERS' EQUITY LATEST PROFIT OR LOSS NET BOOK VALUE OF INVESTMENTS Altergies 19.91% 302 (115) 243 La Barre Thomas 40% 417 (75) 167 HIME 33% ( ) (29 065) - SCI Noiseraie 20% 149 (40) 30 SAEM Transval 35% 141 (9) 49 TOTAL 489 Note Changes to investments in affiliates The changes in investments in affiliates held by the Group break down as follows: CHANGES IN (INTHOUSANDS OF EUROS) VALUE AT 31/12/10 VALUE AT 31/12/11 INCOME FAIR VALUE THROUGH EQUITY TRANSL. DIFF. CHANGES IN CONSOLIDATION SCOPE OTHER CHANGES VALUE AT 30/06/12 Altergies (22) La Barre Thomas (30) HIME (9 591) (4 115) (210) SCI Noiseraie (8) SAEM Transval - 53 (3) TOTAL (9 655) (4 115) (210) The change in fair value of the equity of HIME corresponds to the change in the fair value of its cash flow hedging instruments. Other changes refer to the reclassification of the equity value of HIME shares as provisions, this value being negative. The recent change in the chairmanship of HIME, the trend of its profitability over the first half-year and the problems related to the financing of its debt have led to a need to reconsider that company's strategic orientation and refinancing. This process must lead to the drawing up of a new business plan during the second half of 2012, and to an acceptance of the consequences in terms of valuation of the company. Interim financial report at 30 June

32 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 Note Financial information on affiliates A summary of financial information on affiliates is provided below: LA BARRE SCI SAEM (IN THOUSANDS OF EUROS) ALTERGIES THOMAS HIME NOISERAIE TRANSVAL DATE OF MOST RECENT FINANCIAL INFORMATION KNOWN 30/06/12 30/06/12 30/06/12 30/06/12 30/06/12 % HELD 19.91% 40% 33% 20% 35% Non-current assets Current assets Shareholders' equity ( ) Non-current liabilities Current liabilities Revenues EBITDA (112) (38) (9) Current operating income (112) (77) (12) (9) Operating income (112) (77) (12) (9) Net income (115) (75) (29 065) (40) (9) Note Transactions with affiliates The Group did not carry out any significant transactions with Altergies, La Barre Thomas, SCI Noiseraie or SAEM Transval. Significant transactions between Séché Group and HIME were as follows: The Group subscribed to 33% of HIME s issue of bonds convertible into shares, representing an initial investment of EUR million. In conformity with IAS 39, these bonds break down into: On the one hand, pure convertible bonds bearing a nominal interest rate of 9.89%. Interest accrued but not paid by 30 April of each year is capitalized; On the other, the value of the incorporated derivative component corresponding to the conversion option, booked under investments in affiliates in accordance with the underlying nature of the instrument As of 30 June 2012, no conversion rights have been exercised. Interest accrued at 30 April 2012 was capitalized. The amount of interest booked by the Group in the first half of 2012 was EUR 7.5 million. 30

33 31/12/10 31/12/11 30/06/12 (IN THOUSANDS OF EUROS) NC C TOTAL NC C TOTAL NC C TOTAL Bond portion (principal) Bond portion (capitalized interest) Bond portion (interest) TOTAL BOND PORTION (AFS) Pure derivative portion Tax effect (14 140) - (14 140) (14 140) - (14 140) (14 140) - (14 140) TOTAL DERIVATIVE PORTION (AFFILIATES) TOTAL Note 3 Financial instruments The financial instruments booked in the balance sheet break down as follows: 31/12/10 31/12/11 30/06/12 (IN THOUSANDS OF EUROS) NC C TOTAL NC C TOTAL NC C TOTAL Available-for-sale financial instruments Financial loans and receivables at amortized cost NON-CURRENT FINANCIAL ASSETS Trade and other receivables Other current assets (incl. corporation tax receivables) LOANS AND RECEIVABLES AT AMORTIZED COST HEDGING INSTRUMENTS ASSETS OTHER INSTRUMENTS AT FAIR VALUE BY THE INCOME STATEMENT FINANCIAL ASSETS AT FAIR VALUE BY THE INCOME STATEMENT Cash and cash equivalents TOTAL FINANCIAL ASSETS Financial debts Hedging instruments liabilities Other liabilities TOTAL FINANCIAL LIABILITIES Interim financial report at 30 June

34 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 Note 3.1- Financial assets Note Available-for-sale financial assets NET VALUE (INTHOUSANDS OF EUROS) CHANGES IN FAIR VALUE THROUGH OTHER DISPOSALS/ 31/12/10 31/12/11 EQUITY ACQUISITIONS CHANGES LIQUIDATIONS 30/06/12 Bonds (principal + capitalized interest) Bonds (non-capitalized interest) (14 542) TOTAL BONDS COMPONENT TOTAL NON-CONSOLIDATED INVESTMENTS TOTAL OTHER INVESTMENTS (96) TOTAL AVAILABLE-FOR-SALE FINANCIAL ASSETS (96) Note Loans and receivables at amortized cost 31/12/10 31/12/11 30/06/12 (IN THOUSANDS OF EUROS) NC C TOTAL NC C TOTAL NC C TOTAL Deposits and bonds of indemnity Loans FINANCIAL LOANS AND RECEIVABLES Trade receivables and other debtors Other current assets LOANS AND RECEIVABLES CONCERNING OPERATIONS LOANS AND RECEIVABLES AT AMORTIZED COST

35 Note Financial assets at fair value by the income statement NET VALUE 31/12/10 31/12/11 30/06/12 (IN THOUSANDS OF EUROS) NC C TOTAL NC C TOTAL NC C TOTAL Hedging instruments Call options for 18% FINANCIAL ASSETS AT FAIR VALUE BY THE INCOME STATEMENT The call option for 18% of HIME s share capital granted by Caisse des Dépôts to Séché Environnement expired on 26 May 2012 and was not exercised. Its fair value being zero, the fact of removing it from the Group balance sheet has no effect on the Group's financial statements. Note Cash and cash equivalents (IN THOUSANDS OF EUROS) 31/12/10 31/12/11 30/06/12 Mutual funds Cash TOTAL Interim financial report at 30 June

36 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 Note Financial liabilities Note Financial debt CHANGES IN DEBT 31/12/10 31/12/11 30/06/12 (IN THOUSANDS OF EUROS) NC C TOTAL NC C TOTAL NC C TOTAL Financial debt liabilities Effective interest rate impact (168) (524) (692) (13) (163) (176) (2 098) (683) (2 781) Borrowings/bank loans Bonds issued Effective interest rate impact (2 218) (264) (2 482) Bonds (264) Financial leases Other financial debt Short-term bank borrowing TOTAL Changes in debt over the period can be analysed as follows: (INTHOUSANDS OF EUROS) CHANGES AMORTIZED TRANS. OTHER 31/12/10 31/12/11 INCREASES REPAYMENTS IN SCOPE COST DIFF. CHANGES 30/06/12 Bank loans ( ) - (2 604) Bonds (2 482) Financial leases (2 235) Other financial debt (244) Short-term bank borrowing TOTAL ( ) - (5 086)

37 DEBT TABLE At 30 June 2012, Group net financial debt broke down as follows: TYPE OF RATE (IN THOUSANDS OF EUROS) (BEFORE HEDGING) AMOUNT MATURITY HEDGING OTHER BANK LOANS less than one year Variable from 1 to 5 years 646 more than 5 years less than one year Fixed between 0% and 4% from 1 to 5 years more than 5 years TOTAL Debt contracted at a variable interest rate Interest rate hedge of EUR M BONDS FINANCIAL LEASES OTHER MISCELLANEOUS FINANCIAL DEBT SHORT-TERM BANK BORROWINGS - less than one year Variable - from 1 to 5 years - more than 5 years (264) less than one year Fixed 11.1% (1 385) from 1 to 5 years more than 5 years TOTAL less than one year Variable from 1 to 5 years more than 5 years 872 less than one year Fixed between 4% and 13% from 1 to 5 years 152 more than 5 years TOTAL less than one year Variable 796 from 1 to 5 years - more than 5 years 589 less than one year Fixed 276 from 1 to 5 years - more than 5 years TOTAL Variable 843 less than one year TOTAL Interest rate hedge of EUR 10.4 M Of which current less than one year Of which non-current more than 1 year Interim financial report at 30 June

38 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 Note Financial liabilities at fair value by the income statement Financial liabilities at fair value by the income statement correspond to the derivative instruments used for hedging: 31/12/10 31/12/11 30/06/12 (IN THOUSANDS OF EUROS) NC C TOTAL NC C TOTAL NC C TOTAL Hedging instruments liabilities Hedging instruments break down by their nature (assets or liabilities) as follows: 31/12/10 31/12/11 30/06/12 NOMINAL FAIR NOMINAL FAIR NOMINAL FAIR (IN THOUSANDS OF EUROS) TRANSACTION VALUE TRANSACTION VALUE TRANSACTION VALUE Swaps (1 271) (3 119) (3 832) Collars (794) (542) (398) Hybrid instruments (528) (134) (148) TOTAL (2 593) (3 795) (4 378) At 30 June 2012, the maturity of the cash flow hedging instruments was as follows: LESS THAN FROM 1 MORE THAN ONE YEAR TO 5 YEARS 5 YEARS TOTAL Swaps Collars Hybrid instruments TOTAL

39 Note 4 - Current and non-current provisions (INTHOUSANDS OF EUROS) OTHER WRITE-BACKS WRITE-BACKS 31/12/10 31/12/11 CHANGES ALLOCATION USED UNUSED 30/06/12 Employee benefits (1) (13) Other non-current provisions (2) NON-CURRENT PROVISIONS (11) Provision for litigation (337) (468) 796 Provision for BEFS (sub-contractor) (4) 659 Provisions for other risks (170) Provision for waste to be treated (68) Provisions for site rehabilitation (220) Provisions for other costs (39) 188 (525) (84) CURRENT PROVISIONS (1 151) (726) TOTAL (1 151) (726) (1) Provisions for end-of-career payment commitments are calculated according to the method prescribed in the accounting principles and methods section of this report. (2) Provision for 30-year monitoring period. Note 5 - Off-balance sheet commitments Note Off-balance sheet commitments arising from normal operations (IN THOUSANDS OF EUROS) 31/12/10 31/12/11 30/06/12 Loans ceded before maturity (bills, Dailly Act) Sureties Financial guarantees (1) Other guarantees Secured guarantees Tangible and intangible assets pledged as collateral Securities pledged as collateral Commitment to purchase real estate TOTAL OFF-BALANCE SHEET COMMITMENTS RELATED TO CURRENT OPERATIONS (1) This concerns a EUR 22.5 million surety granted to a financial institution during the setting up of financial guarantees extended by it under the Ministerial Order of 1 February Interim financial report at 30 June

40 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 Note Off-balance sheet commitments given or received in connection with Group debt (IN THOUSANDS OF EUROS) 31/12/10 31/12/11 30/06/12 Business loans ceded Sureties and letters of intent Secured guarantees Tangible and intangible assets pledged as guarantees and collateral Securities pledged as guarantees and collateral Mortgages Borrowing commitments received TOTAL OFF-BALANCE SHEET COMMITMENTS RELATED TO DEBT As part of its asset financing, the company signed commitments not to sell its shareholdings in Sénergies, Séché-Éco-Industries and Mézerolles. The borrowing commitments at 30 June 2012 principally concern the financing of assets conceded in the framework of the Strasbourg public service concession contract for a loan of EUR 31.2 million, payable in amortizable tranches over the residual duration of the public service concession contract, beginning at the date of delivery, at a rate which has still to be set. All the above-mentioned offbalance sheet commitments cover balance sheet debt, with the exception of a EUR 0.8 million guarantee. Note 6 - Shareholders equity Note Breakdown of share capital SHARE CATEGORY NUMBER PAR VALUE 1- Shares comprising the share capital at the start of the year Capital increase - 2- Shares comprising the share capital at the end of the year Of which shares with single voting rights Of which shares with double voting rights

41 Note Additional paid-in capital This line is made up exclusively of additional paid-in capital from the different capital increases, net of charges: (IN THOUSANDS OF EUROS) Capital increase of 27/11/ Capital increase of 19/12/ Capital increase of 01/10/01 (to pay for Alcor shares) Capital increase of 05/07/02 (to pay for Tredi shares) Charges on additional paid-in capital (1 578) Issuance of share subscription warrants in favour of Caisse des Dépôts on 12/12/ Exercise of share subscription warrants by Caisse des Dépôts on 24/04/ TOTAL Note Breakdown of consolidated reserves (IN THOUSANDS OF EUROS) 31/12/10 31/12/11 INCREASE DECREASE 30/06/12 Legal reserve Regulatory reserves Retained earnings Other reserves SUB-TOTAL LEGAL AND REGULATORY RESERVES Consolidated reserves (excluding foreign currency translation differences) (83 596) ( ) (25 844) (4 802) ( ) TOTAL RESERVES (excluding foreign currency translation differences) (4 802) Foreign currency translation differences (1 204) (2 113) 2 - (2 110) TOTAL RESERVES (including foreign currency translation differences) (4 802) Note Dividends In the first half of 2012, Séché Environnement paid out EUR in dividends, or EUR 1.30 per share, regardless of the type of share. As a reminder, dividends concerning treasury stock, i.e. EUR were booked in retained earnings. Interim financial report at 30 June

42 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE Notes to the income statement Note 7 - Income from ordinary activities (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Revenue Of which sales of goods Of which sales of services Other business income Transfers of expenses INCOME FROM ORDINARY ACTIVITIES Note 8 - Current operating income (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 INCOME FROM ORDINARY ACTIVITIES Purchases used for operational purposes (27 223) (31 939) (31 080) External expenses (63 839) (70 297) (76 118) Of which subcontracting (36 412) (39 901) (46 673) Taxes other than on income (15 230) (15 738) (17 586) Employee benefit expenses (42 405) (46 603) (49 515) EBITDA Cost of renewing assets included in concessions (411) (1 984) (3 228) Cost of treatment site rehabilitation (112) (1 133) (1 419) Other operating income and expenses (408) (78) (561) Net allocations to provisions (1 224) (936) (130) Net allocations to amortization (15 956) (16 548) (16 516) CURRENT OPERATING INCOME

43 Note 9 - Operating income (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 CURRENT OPERATING INCOME Reassessment of fixed assets Income on sale of fixed assets Effect of changes in consolidation scope (1) (4 854) - (830) Other (750) (271) (20) OPERATING INCOME (1) In 2010, these correspond to the change of method imposed by amended IFRS 3 concerning the treatment of the cost of acquisition of shares in the framework of a business combination. In 2012, these correspond to expenses committed to during the period for constituting a business combination. Note 10 - Net financial income Note Breakdown of net financial income (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Income from cash and cash equivalents Gross financial borrowing costs (5 232) (3 450) (4 605) Other financial income and expenses (22) TOTAL The cost of gross financial debt changed as follows: (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Financial liabilities at amortized cost (2 163) (2 388) (3 483) Income on hedging instruments (3 068) (1 062) (1 122) COST OF GROSS FINANCIAL DEBT (5 232) (3 450) (4 605) The cost of net financial debt increased under the combined impact of the rise in average interest rate on debt, resulting from the refinancing undertaken in April However, the effects of this were partially compensated for by an increase in income from cash and cash equivalents resulting from the Group's purchase of HIME convertible bonds bearing capitalized interest of 8% (before the removal of the conversion rights) and 9.89% (after removal). Interim financial report at 30 June

44 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 Note Breakdown of other financial income and expenses (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Foreign exchange gain (loss) Net gain (loss) on the sale of financial fixed assets (13) Net impairment on financial assets 994 (106) (113) Other financial income and expenses (739) (187) (42) TOTAL (22) Note 11- Taxes (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 NET INCOME BEFORE TAXES Corporation tax payable Deferred tax TOTAL TAX EXPENSE Current statutory tax rate 31.47% 29.77% 29.63% The current statutory tax rate remains structurally below the actual rate of tax paid, by reason of the fact that part of the interest income from convertible bonds is not taxed. 42

45 Financial risk management Note 12 - Exposure to credit risk Credit risk is the risk of financial loss being incurred by the Group in the event that a client or counterparty to a given asset were to fail to meet its contractual obligations. This risk arises mainly from trade receivables and hybrid financial instruments (HIME convertible bonds). The book value of the financial assets represents the Group s maximum exposure to credit risk. At the close of the half-year, maximum credit risk exposure broke down as follows: 31/12/10 31/12/11 30/06/12 (IN THOUSANDS OF EUROS) NC C TOTAL NC C TOTAL NC C TOTAL Available-for-sale financial assets Financial loans and receivables at amortized cost NON-CURRENT FINANCIAL ASSETS Trade and other receivables Other current assets (incl. corporation tax receivables) LOANS AND RECEIVABLES AT AMORTIZED COST Hedging instruments - assets Other instruments at fair value by the income statement FINANCIAL ASSETS AT FAIR VALUE BY THE INCOME STATEMENT CASH AND CASH EQUIVALENTS TOTAL FINANCIAL ASSETS Derivative component of convertible bonds (1) TOTAL (1) Booked under investments in affiliates; this does not correspond to the definition of a financial asset under IAS 39. Revenue, expenses, income and impairments recognized in the financial statements for the first half of 2012 as financial assets were almost exclusively comprised of interest on convertible bonds totalling EUR 7.5 million. Interim financial report at 30 June

46 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 Note 13 - Exposure to counterparty risk Counterparty risk corresponds to the loss that the Group could suffer if one or more counterparties were to fail to fulfil their obligations. It concerns loans and receivables (financial or operational) at amortized cost, and short-term investments of excess cash. The aged balance of loans and receivables at amortized cost is as follows: (IN THOUSANDS OF EUROS) 30/06/12 NET VALUE (C AND NC) OF WHICH NOT DUE OF WHICH DUE 0-6 monhs 6 months - 1 year More than 1 year Financial loans and receivables at amortized cost Trade and other receivables Other assets TOTAL The aged balance of loans and receivables at amortized cost at the closing of the preceding two financial years was as follows: (IN THOUSANDS OF EUROS) 31/12/11 NET VALUE (C AND NC) OF WHICH NOT DUE OF WHICH DUE 0-6 monhs 6 months - 1 year More than 1 year Financial loans and receivables at amortized cost Trade and other receivables Other assets TOTAL (IN THOUSANDS OF EUROS) 31/12/10 NET VALUE (C AND NC) OF WHICH NOT DUE OF WHICH DUE 0-6 monhs 6 months - 1 year More than 1 year Financial loans and receivables at amortized cost Trade and other receivables Other assets TOTAL In the Group s opinion, it is not exposed to any significant counterparty risk.

47 Note 14 - Exposure to liquidity risk Liquidity risk is the risk that the Group may have difficulty honouring its debts at their maturity. At 30 June 2012, the residual contractual maturities of the Group s financial liabilities broke down as follows: CONTRACTUAL 30/06/12 BOOK CASH LESS THAN FROM 1 TO MORE THAN (IN THOUSANDS OF EUROS) VALUE FLOW 1 YEAR 5 YEARS 5 YEARS Bank loans Bonds Lease finance debt Other financial debt Short-term bank borrowings Trade and other payables (incl. corporation tax debts) Liabilities for restoration of assets TOTAL NON-DERIVATIVE FINANCIAL LIABILITIES Hedging instruments TOTAL DERIVATIVE FINANCIAL LIABILITIES For comparison purposes, the residual contractual maturities of the Group s financial liabilities at the closing of the preceding two financial years were as follows: CONTRACTUAL 31/12/11 BOOK CASH LESS THAN FROM 1 TO MORE THAN (IN THOUSANDS OF EUROS) VALUE FLOW 1 YEAR 5 YEARS 5 YEARS Bank loans Bonds Lease finance debt Other financial debt Short-term bank borrowings Trade and other payables (incl. corporation tax debts) Liabilities for restoration of assets TOTAL NON-DERIVATIVE FINANCIAL LIABILITIES Hedging instruments TOTAL DERIVATIVE FINANCIAL LIABILITIES Interim financial report at 30 June

48 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE 2012 CONTRACTUAL 31/12/10 BOOK CASH LESS THAN FROM 1 TO MORE THAN (IN THOUSANDS OF EUROS) VALUE FLOW 1 YEAR 5 YEARS 5 YEARS Bank loans Bonds Lease finance debt Other financial debt Short-term bank borrowings Trade and other payables (incl. corporation tax debts) Liabilities for restoration of assets TOTAL NON-DERIVATIVE FINANCIAL LIABILITIES Hedging instruments TOTAL DERIVATIVE FINANCIAL LIABILITIES The covenanted financial ratios to be complied with (under pain of default rendering all debt immediately payable) in connection with the Group s principal debt are as follows: RATIO COMMITMENT Net financial debt/equity <1,1 Net financial debt/ebitda <3 46 Note 15 - Exposure to interest rate risk Séché Environnement s corporate debt, before hedging, is subject to a variable rate of interest. The Group uses hedging instruments to cover itself against any rise in interest rates, and to optimize the cost of its debt. The Group s credit line requires a minimum of 50% hedging over a three-year period. The instruments used include swaps, caps, floors and collars. Their use is managed directly by the Group Finance Department. Interest-rate risk is analysed on the basis of projected trends in financial debt on the credit lines and maturities of interest-rate hedges: A 50 basis point decline in interest rates would have a negative impact of EUR 3.1 million on Group shareholders' equity; A 1% instant upward change in interest rates would have a negative impact of EUR 1.7 million on the Group s annual financial costs, on the basis of its indebtedness at 30 June 2012 and its reimbursement profile at that date.

49 Note 16 - Exposure to exchange rate risk The exchange rate risk to which the Group is exposed arises from: The conversion of contributions from foreign subsidiaries outside the euro zone to its balance sheet and income statement. However, this risk is increasingly limited thanks to the Group's ongoing efforts to refocus on its European activities in the euro zone; Bank debt financing, denominated almost exclusively in euros, of the investments of its foreign subsidiaries carried out in local currencies (for those subsidiaries not considered as long-term foreign investments). Changes in foreign exchange income break down as follows: (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Foreign exchange income, Europe Foreign exchange income, Americas (52) 6 28 TOTAL To date, this risk is not the subject of specific hedging at the Group level Joint ventures proportional consolidation Séché Group s sole joint venture is Sogad, in which it has a 50% holding. (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Group share of current assets Group share of non-current assets Group share of current liabilities Group share of non-current liabilities (IN THOUSANDS OF EUROS) 30/06/10 30/06/11 30/06/12 Group share of revenue Group share of EBITDA Group share of current operating income Group share of operating income Interim financial report at 30 June

50 INTERIM CONSOLIDATED FINANCIAL 3STATEMENTS AT 30 JUNE Earnings per share The earnings per share figure presented at the foot of the income statement is the ratio of the net income attributable to shareholders of the parent company, to the weighted average number of shares making up the share capital of the parent company which were in circulation over the period, i.e. EUR The Group has no dilutive instruments, therefore diluted EPS is equal to net EPS Key events since the closing of accounts We are aware of no significant event occurring after the closing of accounts likely to have a significant impact on the Group s assets, financial position or operating results. As far as the company is aware, there is no litigation, arbitration or exceptional event occurring after the closing likely to have, or to have had in the recent past, a significant effect on the financial position, earnings, business or assets of the Company or the Group. 48

51 Interim financial report at 30 June

52 4I STATUTORY AUDITORS LIMITED REVIEW REPORT 4- STATUTORY AUDITORS LIMITED REVIEW REPORT To the Shareholders, Following our appointment as statutory auditors by your Annual General Meeting and in accordance with article L III of the French Monetary and Financial Code ( Code monétaire et financier ), we have carried out: A limited review of the condensed half-yearly consolidated financial statements of Séché Environnement SA for the period from 1 January 2012 to 30 June 2012 which are attached to the present report; The verification of information contained in the half-yearly management report. These condensed half-yearly consolidated financial statements have been drawn up under the responsibility of your Board of Directors. Our role is to express our conclusion on these financial statements based on our limited review. I - Conclusion on the financial statements We conducted our limited review in accordance with professional standards applicable in France. A limited review of interim financial information essentially consists in making inquiries of persons responsible for financial and accounting matters, and applying analytical review procedures. A limited review is substantially less broad in scope than an audit conducted in accordance with professional standards applicable in France, and consequently does not enable us to obtain more than a moderate assurance, less than would be obtained in the case of an audit, that the financial statements do not contain significant anomalies. Based on our limited review, no significant anomaly has come to our attention that would cause us to doubt that the accompanying condensed half-yearly consolidated financial statements are prepared in all material respects in accordance with IAS 34, the IFRS standard as adopted by the European Union applicable to interim financial statements. Notwithstanding the conclusion expressed above, we draw your attention to the following elements: Note "6.2 Presentation of the accounts and comparability" which deals with the impact of anticipated application of the IAS 19 R standard "Staff benefits"; 50 Note "2 Investments in affiliates" which explains the situation relative to the Group's shareholding in the HIME sub-group.

53 II - Specific verification We also verified the information given in the half-yearly management report commenting on the condensed half-yearly consolidated financial statements submitted to our limited review. We have no observations to report as to its fair presentation and consistency with the condensed half-yearly consolidated financial statements. Rennes, 29 August 2012 Laval, 29 August 2012 KPMG Audit A Department of KPMG SA Vincent Broyé Partner Acorex Audit Jean-François Merlet Partner Interim financial report at 30 June