Paris, Nvember 5, 2015 NINE MONTH KEY FIGURES ENDING SEPTEMBER 30, 2015 (UNAUDITED IFRS FIGURES) CONTINUED STRONG RESULTS GROWTH AND 2015 OBJECTIVES CONFIRMED MARKED IMPROVEMENT IN THIRD QUARTER REVENUE EBITDA GREW 14.1% (+10.5% AT CONSTANT EXCHANGE RATES) 1 TO 2,148 MILLION CURRENT EBIT INCREASED 32.3% (+26.2% AT CONSTANT EXCHANGE RATES) 2 TO 942 MILLION CURRENT NET INCOME DOUBLED TO 410 MILLION 2015 CUMULATIVE COST SAVINGS OBJECTIVE ALREADY ACHIEVED AT THE END OF SEPTEMBER CONFIRMATION OF 2015 OBJECTIVES Antine Frért, the Grup s Chairman and CEO indicated: Velia has nce again recrded strng results grwth during the third quarter, including a return t rganic revenue grwth due t encuraging cmmercial successes. The first nine mnths f the year cntinued sustained grwth in all f ur results, with in particular a dubling f current net incme. This excellent perfrmance, recrded nw fr the past tw years is the successful translatin int results f the significant transfrmatin undertaken by Velia. As a result, we cnfirm all f ur 2015 bjectives, ending a year which will clse the initial phase f returning t prfitable grwth. We will present ur bjectives fr the 2016-2018 perid during an Investr Day scheduled fr December 14, 2015. 1 On a pr frma basis (excluding Dalkia France and with Dalkia Internatinal fully cnslidated as f January 1, ): EBITDA grwth f 10.1%, and 6.4% grwth at cnstant cnslidatin scpe and exchange rates 2 On a pr frma basis: Current EBIT grwth f 32.0%, and 23.5% grwth at cnstant cnslidatin scpe and exchange rates 1
Paris, Nvember 5, 2015 Return f psitive rganic revenue grwth in the third quarter f 2015. Nine mnths revenue increased 6.1%, r +2.4% at cnstant exchange rates frm re-presented 17,241 millin t 18,288 millin fr the perid 2015. On a pr frma basis 3, revenue increased 3.0% frm 17,763 millin fr the nine mnths, and was stable (-0.3%) cmpared t the prir year perid at cnstant cnslidatin scpe and exchange rates. Imprvement was particularly strng in Q3 with grwth f +1.7% at cnstant cnslidatin scpe and exchange rates, after -1.2% in Q2 and -1.4% in Q1. The favrable impact f exchange rate mvements cntributed t 3.7% revenue grwth during the first nine mnths f 2015 ( 649 millin). All segments experienced a marked imprvement in revenue grwth during the third quarter. In France, nine mnths revenue declined by 1.9% at cnstant cnslidatin scpe, while revenue was quasi-stable in Q3 at cnstant cnslidatin scpe (-0.5%), after -1.6% in Q2 and - 3.6% in Q1. Fr the first nine mnths, Water cntinues t be negatively impacted by cntract renegtiatins (- 98 millin), partially ffset by gd vlumes (+1.4%) and mderate price indexatin (+0.3%). Waste revenue was stable in Q3, while grwth was mderate at +0.7% fr the first nine mnths f 2015. In the Eurpe excluding France segment, nine mnths revenue declined by 1.7% at cnstant cnslidatin scpe and exchange rates, while revenue was stable in Q3 after Q1 was dwn 3.5% and Q2 declined -0.7%. Germany revenue declined by 6.9% at cnstant cnslidatin scpe due t the decline in energy prices bserved during the first half f 2015 and cntinued restructuring f the cmmercial prtfli in Waste peratins. United Kingdm revenue declined by 3.6% at cnstant cnslidatin scpe and exchange rates, similar t the first half f 2015, but cntinued t benefit frm a favrable revenue mix given reduced revenue frm lw margin PFI cnstructin activity (- 58 millin). Excluding cnstructin revenue, revenue was stable. Central and Eastern Eurpe revenue cntinues t have sustained mmentum, with Q3 revenue grwth f 4.4% at cnstant cnslidatin scpe and exchange rates, fllwing 1.6% grwth in the first half f 2015. The Rest f the Wrld segment als recrded accelerated grwth, with +4.8% grwth fr the nine mnths at cnstant cnslidatin scpe and exchange rates after +3.4% in the first half f 2015, due t gd perfrmance in all gegraphic znes, particularly in Asia (China +16.6%), Latin America (+17.1%) and in Africa Middle East (+9.9%). Glbal Businesses revenue was dwn 2.2% at cnstant cnslidatin scpe and exchange rates fr the nine mnths perid, but was stable during Q3 given a return t grwth in hazardus waste, despite the negative impact f the decline in il prices, as well as in SADE activities. Revenue in the engineering business remains dwn (-3.9% fr the nine mnths) due t the end f cnstructin activity fr the Hng Kng sludge treatment plant. Hwever, bkings increased by 17% cmpared t the end f September. Cntinued strng grwth in EBITDA f 14.1% (+10.5% at cnstant exchange rates) t 2,148 millin. On a pr frma basis, cmpared t 1,952 millin fr the nine mnths, EBITDA increased 10.1% (+6.4% at cnstant cnslidatin scpe and exchange rates). 3 Pr frma figures exclude Dalkia France, and include Dalkia Internatinal n a fully cnslidated basis as f January 1,. 2
Paris, Nvember 5, 2015 The favrable impact f exchange rate mvements cntributed t 4.0% grwth in EBITDA (+ 79 millin) fr the nine mnths 2015. At cnstant cnslidatin scpe and exchange rates, the strng grwth in EBITDA was primarily driven by the impact f cntinued cst savings (benefit f 164 millin fr the first nine mnths f 2015), an increase in vlumes and gd cmmercial dynamics (net impact f 31 millin) as well as favrable price effects ( 37 millin). Cntract renegtiatins in the French Water business negatively impacted EBITDA by 60 millin. By segment, and at cnstant cnslidatin scpe and exchange rates: In France, EBITDA was stable. In the Water business, cst reductins and vlume grwth in Q3 helped ffset the impact f cntract renegtiatins at the EBITDA level. In the Waste business, cst savings and the decline in the price f fuel ffset the impact f the reductin in vlumes landfilled and lwer scrap metal prices. In the rest f Eurpe and rest f the Wrld, gd grwth mmentum cntinued, in particular in Latin America, Central and Eastern Eurpe, Nrth America and Asia. Perfrmance in the Glbal Businesses segment remained penalized by the impact f the decline in il prices. Current EBIT psted a significant increase f 32.3% (+26.2% at cnstant exchange rates) frm represented 712 millin fr the first nine mnths f t 942 millin. On a pr frma basis, cmpared t 713 millin fr the first nine mnths f, current EBIT increased 32.0%, r +23.5% at cnstant cnslidatin scpe and exchange rates. Current EBIT benefitted frm a favrable exchange rate impact f 48 millin. Excluding freign exchange effects, the strng grwth in current EBIT was primarily driven by the strng grwth in EBITDA. Depreciatin and amrtizatin expense was dwn slightly t 1,022 millin (vs. pr frma 1,035 millin fr the first nine mnths f ). The cntributin f the share f current net incme frm jint ventures and assciates increased 11% t 81 millin. Current net incme Grup share dubled t 410 millin cmpared t pr frma re-presented 203 millin fr the first nine mnths f. Current net incme benefitted frm the cntinued decline f net financing csts. It includes 74 millin in capital gains fr the first nine mnths f 2015, cmpared t 57 millin fr the prir year perid, as well as a negative impact f 16 millin related t implementatin f the IFRIC 21 standard. Net financial debt at 2015 amunted t 8,977 millin cmpared t 8,909 millin at. Net financial debt is up slightly cmpared t, amunting t 8,977 millin due t a negative currency impact f 433 millin. Excluding this impact, net financial debt wuld have declined by 365 millin. Imprvement in net Free Cash Flw f 195 millin 3
Paris, Nvember 5, 2015 Net Free Cash Flw generated during the first nine mnths f 2015 imprved by 195 millin t - 12 millin cmpared t pr frma - 207 millin fr the same perid in, due t strng grwth in EBITDA and gd capex discipline (industrial investments were 877 millin in the first nine mnths f 2015 cmpared t pr frma 950 millin fr first nine mnths f ). 2015 Objectives cnfirmed: Revenue grwth EBITDA and Current EBIT grwth Cntinued strng peratinal perfrmance Cst savings benefit: cntinued executin f the 750 millin cst savings plan Cntinued capex discipline The dividend and hybrid cupn payment t be cvered by current net incme and paid by Free Cash Flw excluding net financial divestments Net financial debt under cntrl ********* Investr Day scheduled fr December 14, 2015 Velia will present its strategic plan fr 2016-2018 during an Investr Day scheduled fr December 14, 2015. ********** Definitins f all key financial indicatrs mentined can be fund at the end f this press release. ********** 4
Paris, Nvember 5, 2015 Velia grup is the glbal leader in ptimized resurce management. With ver 179,000 emplyees* wrldwide, the Grup designs and prvides water, waste and energy management slutins that cntribute t the sustainable develpment f cmmunities and industries. Thrugh its three cmplementary business activities, Velia helps t develp access t resurces, preserve available resurces, and t replenish them. In, the grup Velia supplied 96 millin peple with drinking water and 60 millin peple with wastewater service, prduced 52 millin megawatt hurs f energy and cnverted 31 millin metric tns f waste int new materials and energy. Velia Envirnnement (listed n Paris Eurnext: VIE) recrded cnslidated revenue f 24.4 billin* in. www.velia.cm (*) pr-frma figures including Dalkia Internatinal (100%) and excluding Dalkia France Imprtant disclaimer Velia Envirnnement is a crpratin listed n the Eurnext Paris. This press release cntains frward-lking statements within the meaning f the prvisins f the U.S. Private Securities Litigatin Refrm Act f 1995. Such frward-lking statements are nt guarantees f future perfrmance. Actual results may differ materially frm the frward-lking statements as a result f a number f risks and uncertainties, many f which are utside ur cntrl, including but nt limited t: the risk f suffering reduced prfits r lsses as a result f intense cmpetitin, the risk that changes in energy prices and taxes may reduce Velia Envirnnement s prfits, the risk that gvernmental authrities culd terminate r mdify sme f Velia Envirnnement s cntracts, the risk that acquisitins may nt prvide the benefits that Velia Envirnnement hpes t achieve, the risks related t custmary prvisins f divesture transactins, the risk that Velia Envirnnement s cmpliance with envirnmental laws may becme mre cstly in the future, the risk that currency exchange rate fluctuatins may negatively affect Velia Envirnnement s financial results and the price f its shares, the risk that Velia Envirnnement may incur envirnmental liability in cnnectin with its past, present and future peratins, as well as the ther risks described in the dcuments Velia Envirnnement has filed with the Autrités des Marchés Financiers (French securities regulatr). Velia Envirnnement des nt undertake, nr des it have, any bligatin t prvide updates r t revise any frward lking statements. Investrs and security hlders may btain frm Velia Envirnnement a free cpy f dcuments it filed (www.velia.cm) with the Autrités des Marchés Financiers. This dcument cntains "nn GAAP financial measures". These "nn GAAP financial measures" might be defined differently frm similar financial measures made public by ther grups and shuld nt replace GAAP financial measures prepared pursuant t IFRS standards. Cntacts Grup Media Relatins Laurent Obadia Sandrine Guendul Tel : + 33 (0)1 71 75 12 52 sandrine.guendul@velia.cm Analyst & Investr Relatins Rnald Wasylec - Ariane de Lamaze Tel. : + 33 (0)1 71 75 12 23 / 06 00 Terri Anne Pwers (United States) Tel. : + 1 312 552 2890 5
Paris, Nvember 5, 2015 FINANCIAL INFORMATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 4 In this press release, the Grup refers t tw cmparative scpes related t the unwinding f the Dalkia jint venture: ne referred t as GAAP, with Dalkia France fully cnslidated and Dalkia Internatinal equity-accunted in the firsthalf f and then frm July, Dalkia Internatinal fully cnslidated and excluding Dalkia France, the ther referred t as Pr frma, with Dalkia Internatinal fully cnslidated as f January 1, and excluding Dalkia France. A] INCOME STATEMENT 1. Revenue 1.1 Revenue by segment Revenue ( millin) Nine mnths September 30, 2015 Nine mnths Pr frma Δ 2015/ Internal grwth External grwth Freign exchange impact France 4,090.2 4,160.5-1.7% -1.9% +0.2% - Eurpe, excluding France Rest f the Wrld Glbal Businesses 6,180.1 6,099.5 +1.3% -1.7% +0.1% +2.9% 4,387.5 3,866.9 +13.5% +4.8% -0.5% +9.2% 3,535.8 3,484.9 +1.5% -2.2% +0.4% +3.3% Other 94.2 151.4-37.8% +8.0% -46.0% +0.2% Grup 18,287.6 17,763.2 +3.0% -0.3% -0.4% +3.7% 4 A summary f re-presented figures fr the nine mnths are shwn in the appendix f this press release. 6
Paris, Nvember 5, 2015 Quarterly revenue trends break dwn as fllws: Q1 2015 Q2 2015 Q3 2015 Pr frma variatins At cnstant cnslidatin scpe and exchange rates France -3.6% -1.6% -0.5% Eurpe excluding France -3.5% -0.7% -0.4% Rest f the Wrld +2.4% +4.5% +7.7% Glbal Businesses +2.1% -7.9% -0.1% Grup -1.4% -1.2% +1.7% Grup excluding Glbal Businesses -2.1% +0.5% +2.1% France Revenue in the France segment fr the nine mnths 2015 decreased 1.7% (-1.9% at cnstant cnslidatin scpe) t 4,090.2 millin cmpared with pr frma figures fr the nine mnths. At cnstant cnslidatin scpe, third quarter revenue decreased 0.5% cmpared with -3.6% in the first quarter and -1.6% in the secnd quarter f 2015. - Revenue in the Water business declined 4.0% at bth current and cnstant cnslidatin scpes cmpared with pr frma figures fr the nine mnths. Water revenue in France remained almst stable in the third quarter f 2015 (-0.6% at cnstant cnslidatin scpe, cmpared with a decline in the first and secnd quarters) thanks t higher vlumes sld tied t favrable weather cnditins in the summer mnths which ffset the impact f cntractual ersin. - Revenue in the Waste business grew 0.7% at cnstant cnslidatin scpe (+1.2% at current cnslidatin scpe). The Waste business remained stable in the third quarter (after an imprvement f 3.8% in the secnd quarter and a decrease f 1.4% in the first quarter). Cmmercial wins, higher cmmercial cllectin tariffs and gd mmentum f incineratin activities were partially ffset by lwer landfill vlumes and cmmercial and municipal cllectin vlumes as well as the decrease in ferrus scrap metal vlumes. Eurpe, excluding France Revenue in the Eurpe excluding France segment fr the nine mnths 2015 increased 1.3% (-1.7% at cnstant cnslidatin scpe and exchange rates) t 6,180.1 millin cmpared with pr frma figures fr the nine mnths. Revenue remained almst stable in the third quarter f 2015 as in the secnd quarter, fllwing a 3.5% decrease at cnstant cnslidatin scpe and exchange rates in the first quarter f 2015. This change can be explained as fllws: - Central Eurpean cuntries: revenue increased 2.4% at cnstant cnslidatin scpe and exchange rates, thanks t generally favrable weather cnditins (in the secnd quarter) and higher tariffs cmbined with psitive vlume effects. Revenue grwth accelerated in the third quarter (+4.4% at cnstant cnslidatin scpe and exchange rates cmpared with +0.2% in the first quarter and +3.8% in the secnd quarter) driven by favrable vlume effects. - The United Kingdm and Ireland: 3.1% decline in revenue at cnstant cnslidatin scpe and exchange rates. As in the first and secnd quarters, third quarter revenue fell in line with the decrease in cnstructin revenue frm PFI cntracts, despite the increase in cmmercial cllectin vlumes and recycled raw material vlumes (paper, ferrus and nn-ferrus scrap metal) and grwth in the Water business. 7
Paris, Nvember 5, 2015 - Germany: revenue fell 6.9% at cnstant cnslidatin scpe and exchange rates, fllwing a decrease in gas and electricity vlumes sld, lwer energy prices and a decrease in the slid waste business. - Italy: Energy business revenue fell 7.5% at current and cnstant cnslidatin scpe in the nine mnths 2015 and declined 4.0% in the third quarter fllwing the restructuring f the cmmercial prtfli. - Other Eurpean cuntries: increase in revenue at cnstant cnslidatin scpe and exchange rates, driven by business grwth particularly in the Netherlands and Iberia. Rest f the Wrld Revenue in the Rest f the Wrld segment fr the nine mnths 2015 increased 13.5% (+4.8% at cnstant cnslidatin scpe and exchange rates) t 4,387.5 millin cmpared with pr frma figures fr the nine mnths. In the third quarter f 2015, revenue increased 7.7% at cnstant cnslidatin scpe and exchange rates cmpared with 2.4% in the first quarter and 4.5% in the secnd quarter. Revenue in the Rest f the Wrld segment reflects slid grwth in the fllwing regins: - In Latin America (+11.6% and +17.1% at cnstant cnslidatin scpe and exchange rates), in particular, in Argentina (Buens Aires cntract and tariff revisins) and Ecuadr; - Revenue in Asia imprved in all gegraphies, with the exceptin f Krea due t the end f an industrial cntract. In China, revenue increased 36.6% (+16.6% at cnstant cnslidatin scpe and exchange rates), primarily due t the cnstructin f hazardus waste incineratrs and the increase in vlumes sld in the Energy business. The industrial Water market in China als benefited frm new cntract wins; - In Africa and the Middle East, revenue grwth (+14.5% and +9.9% at cnstant cnslidatin scpe and exchange rates) was bsted by the prgressin f the Water business in Mrcc (vlumes and price) and Gabn and by the Cnstructin business in the Middle East. This substantial grwth was mitigated by a decline in revenue in Nrth America f 4.9% at cnstant cnslidatin scpe and exchange rates (+13.9% at current cnslidatin scpe and exchange rates), mainly tied t the impact f the decrease in energy prices in the first and secnd quarters which stabilized in the third quarter f 2015. Glbal Businesses Revenue in the Glbal Businesses segment fr the nine mnths 2015 increased 1.5% (-2.2% at cnstant cnslidatin scpe and exchange rates) t 3,535.8 millin cmpared with pr frma figures fr the nine mnths. This evlutin was mainly due t: - prject delays in the VWT business and cmpletin f the cnstructin f the Hng Kng Sludge plant: the backlg is nnetheless 2.5 billin cmpared with 2.4 billin as f ; - the negative impact f il prices in the hazardus waste business. 8
Paris, Nvember 5, 2015 1.2 Revenue by business Revenue ( millin) Nine mnths September 30, 2015 Nine mnths Pr frma 2015/ Internal grwth External grwth Freign exchange impact Water 8,345.2 8,144.2 +2.5% -0.4% -0.2% +3.1% Waste 6,448.6 6,301.5 +2.3% -0.6% -1.5% +4.4% Energy 3,493.8 3,317.4 +5.3% +0.1% +1.6% +3.6% Grup 18,287.6 17,763.2 +3.0% -0.3% -0.4% +3.7% Water Revenue in the Water business increased by 2.5% and was stable at cnstant cnslidatin scpe and exchange rates cmpared with pr frma figures fr the nine mnths. A marked imprvement in revenue was bserved in the third quarter (+2.4% at cnstant cnslidatin scpe and exchange rates) after a decrease f 0.1% and 3.3% in the first and secnd quarters respectively. This stability at cnstant cnslidatin scpe and exchange rates was due t a cmbinatin f several factrs: - Increased vlumes in France and Central Eurpe despite cntinued cntractual ersin in France, - Sustained grwth in Asia and Australia, - The decline in Cnstructin activity, with delays in industrial prjects at VWT, despite an imprvement in the backlg and the cmmissining f the Hng Kng plant. Waste Revenue in the Waste business increased by 2.3% and was stable (-0.6%) at cnstant cnslidatin scpe and exchange rates cmpared with pr frma figures fr the nine mnths. Quarter after quarter, the business has demnstrated resilience. The variatin in Waste revenue is due t: - An increase in vlumes (+0.6%) and higher services prices (+0.6%); - Gd resilience in France and the United Kingdm; - The decline in PFI cnstructin revenue in the United Kingdm; - The decrease in slid waste vlumes, particularly in Germany; - Lwer recycled raw material prices (impact f 19 millin). Energy Revenue in the Energy business increased by 5.3% and was stable at cnstant cnslidatin scpe and exchange rates cmpared with pr frma figures fr the nine mnths. Third quarter revenue fr 2015, in the same way as secnd quarter revenue, increased at cnstant cnslidatin scpe and exchange rates by 4.1%, after secnd quarter grwth f 3.7% and a decline in the first quarter (-4.4%). 9
Paris, Nvember 5, 2015 The increase in revenue since the secnd quarter is due t a mre favrable weather impact and gd vlumes sld in China and Central Eurpe, reduced by the unfavrable impact f the price f energy sld particularly in Nrth America, which decreased in the third quarter. 2. Other incme statement items 2.1 EBITDA EBITDA fr the nine mnths 2015 increased 14.1% (+10.5% at cnstant exchange rates), cmpared with GAAP figures fr the nine mnths. Fr the nine mnths 2015, Grup cnslidated EBITDA increased 10.1% (+6.4% at cnstant cnslidatin scpe and exchange rates) t 2,148.0 millin, cmpared with pr frma figures fr the nine mnths. This strng grwth in EBITDA is due t cst savings ttaling 164 millin in the first nine mnths f 2015. By segment: EBITDA was stable in France: in the Water business, EBITDA was stable due t cst reductins and despite cmmercial ersin: Gd vlumes f water sld in the third quarter ffset the negative impact f price changes (decrease in indexatin t +0.3%) Cntract renegtiatins (Marseille, Lyn, Nice, etc.) had an impact f - 60 millin in the nine mnths 2015 in the Waste business, EBITDA was stable due t cst savings plans, a decrease in fuel prices and the favrable impact f the litigatin settlement and despite lwer landfill vlumes and a decrease in the price f ferrus and nnferrus scrap metals. Cntinued gd mmentum in the Grup s activities in Eurpe excluding France, particularly in Central and Eastern Eurpe (mainly due t a significant decrease in csts); Strng grwth in the Rest f the Wrld: in the United States thanks t gd perfrmance in the Municipal and Cmmercial sectrs and grwth in hazardus Waste in the industrial sectr. Gd grwth in EBITDA in emerging markets (Latin America, China, and Africa Middle East); Finally, EBITDA decreased in the Glbal Businesses segment, penalized in particular by the impact f the fall in crude il prices. 2.2 Current EBIT Fr the nine mnths 2015, Grup cnslidated current EBIT increased 32.0% (+23.5% at cnstant cnslidatin scpe and exchange rates) t 941.5 millin, cmpared with pr frma figures fr the nine mnths. Current EBIT increased 32.3% (+26.2% at cnstant exchange rates), cmpared with GAAP figures fr the nine mnths. The significant increase in current EBIT was driven primarily by: - the significant imprvement in EBITDA; - a decrease in net charges t depreciatin and amrtizatin despite an unfavrable freign exchange impact f 30 millin; 10
Paris, Nvember 5, 2015 - the favrable change in net charges t prvisins, in particular in the Water business in France related t prvisin reversals fr cntractual risks related t Water cntracts where the Olivet principle applies and reversals f prvisins fr URSSAF scial-security risks; - an increase in the current net incme f jint ventures and assciates and particularly ur Water cncessins in China. The freign exchange impact n current EBIT amunted t + 48.1 millin, and mainly reflects fluctuatins in the value f the eur against the U.S. dllar (+ 18.3 millin), the U.K. pund sterling (+ 11.3 millin) and the Chinese yuan (+ 14.3 millin). The recnciling items between EBITDA and Current EBIT fr the nine mnths 2015 and are as fllws: ( millin) Nine mnths 2015 Nine mnths September 30, Pr frma Nine mnths GAAP EBITDA 2,148.0 1,951.8 1,882.2 Renewal expenses (206.4) (188.5) (243.9) Principal payments n perating financial assets (OFAs) (111.4) (88.1) (106.2) Net depreciatin and amrtizatin (1,022.1) (1,034.7) (915.5) Share f current net incme f jint ventures and assciates 80.8 72.7 95.7 Prvisins, fair value adjustments & ther: 52.6 - (0.6) - Current impairment f prperty, plant and equipment, intangible assets and perating financial assets (4.0) (47.9) (44.4) - Capital gains (lsses) n industrial divestitures 9.4 1.7 6.9 - Net charges t perating prvisins, fair value adjustments and ther 47.2 46.2 36.9 Current EBIT 941.5 713.2 711.7 2.3 Current net incme Current net incme attributable t wners f the Cmpany increased significantly frm pr frma 203.2 millin fr the nine mnths t 409.7 millin fr the nine mnths 2015, due t: - current EBIT grwth, - the reductin in net finance csts, as well as, - an imprvement in the tax rate (which was 30% at the end f September 2015). Capital gains (lsses) n financial divestitures fr the nine mnths 2015 ttaled + 73.6 millin and mainly cmprised f the 40.4 millin capital gain realized n the sale f Grup s activities in Israel. Pr frma capital gains n financial divestitures fr the nine mnths ttaled 57.4 millin. Current net incme als includes - 16 millin in respect f applicatin f IFRIC 21. 11
Paris, Nvember 5, 2015 B] FINANCING ( millin) Nine mnths 2015 Nine mnths Pr frma Nine mnths GAAP EBITDA 2,148.0 1,951.8 1,882.2 Net industrial investments (808.2) (906.0) (871.0) Change in perating WCR (659.5) (613.7) (573.9) Dividends received frm equity-accunted entities and jint ventures 71.4 66.3 62.7 Renewal expenses (206.5) (188.5) (244.0) Restructuring charges (64.5) (24.5) (24.5) Financial items (current cash financial expense, and perating cash flw frm financing activities) (310.6) (324.1) (280.7) Taxes paid (181.9) (168.5) (164.6) Net free cash flw befre dividend payment, financial investments and financial divestitures (11.6) (207.3) (213.6) Opening Net financial debt (8,311.1) (8,444.4) Clsing Net financial debt (8,977.1) (8,909.4) Changes in net free cash flw Net free cash flw amunted t - 11.6 millin fr the nine mnths 2015, versus pr frma - 207.3 millin fr the nine mnths. This imprvement was attributable t the imprvement in EBITDA, slid industrial investment discipline (decrease f 107 millin at cnstant exchange rates) and a reductin in finance csts, despite a deteriratin in the change in perating wrking capital requirements f - 45.8 millin and an increase in renewal expenses and restructuring charges. Net financial debt Overall, net financial debt amunted t 8,977 millin, cmpared with 8,909 millin in GAAP figures as f. At cnstant exchange rates (impact f - 433 millin) net financial debt wuld have been dwn 365 millin cmpared t. Net financial debt is 291.1 millin higher than at December 31,, excluding a freign exchange impact f 375 millin, due t seasnal factrs. 12
Paris, Nvember 5, 2015 APPENDICES 1. Recnciliatin f previusly published and re-presented data fr the nine mnths 1.1. Main GAAP re-presented figures fr the nine mnths (1) In M Figures presented under published scpe (2) 9M published IFRS 5 Adjustment (3) IFRIC 21Adjustment (4) 9M Represented Revenue 16,844.5 +396.3-17,240.8 Adjusted perating cash flw 1,450.9 +65.3-20.8 1,495.4 Adjusted perating incme (5) 711.2 +41.0-20.8 731.4 Grss industrial investments 936.9 - - 936.8 Free cash flw 280.0-63.7-216.3 Net financial debt 8,618 +291-8,909 EBITDA N/A N/A N/A 1,882.2 Current EBIT N/A N/A N/A 711.7 Current net incme Grup Share N/A N/A N/A 221.3 (1) Nn-audited figures (2) Published scpe: including fully cnslidated Dalkia France and equity-accunted Dalkia Internatinal in the first half f (3) Reclassificatin f Mrcc Water peratins t cntinuing peratins (4) See Appendix 1.3. (5) Including the share f adjusted net incme (lss) f jint ventures and assciates fr the nine mnths 13
Paris, Nvember 5, 2015 1.2. Main Pr frma re-presented figures fr the nine mnths (1) In M Figures presented under pr frma scpe (2) 9M published IFRS 5 Adjustment (3) IFRIC 21 Adjustment (4) 9M Re-presented Revenue 17,372.8 +396.3-5,9 17,763.2 Adjusted perating cash flw 1,594.9 +65.3-14,3 1,645.9 Grss industrial investments 949.8 - - 949.8 EBITDA N/A N/A N/A 1,951.8 Current EBIT N/A N/A N/A 713.2 Current net incme Grup Share N/A N/A N/A 203.2 (1) Nn-audited figures (2) Pr frma scpe : excluding Dalkia France and Dalkia Internatinal fully cnslidated in the first half f (3) Reclassificatin f Mrcc Water peratins t cntinuing peratins (4) See Appendix 1.3. 1.3. IFRIC 21 (Taxes) - An interpretatin that clarifies the accunting fr taxes, duties and ther levies falling within the scpe f IAS 37, Prvisins, Cntingent Liabilities and Cntingent Assets, and which are specifically excluded frm the scpe f IAS 12, Incme Taxes. - Recgnitin f the bligatin nw assciated with the bligating event, which requires payment f the tax by the cmpany. The timing f recgnitin f a liability fr the tax r levy is determined based n the exact wrding f the law gverning cllectin. The entire tax liability shall be recgnized when the bligating event giving rise t the tax as defined by the law ccurs. Thus, if a tax is payable when an entity perates a business as f January 1, Y, the liability representing the tax fr the year in its entirety must be recrded n such date. Thus, fr the majrity f impacted taxes cnsidered as perating incme : Befre applicatin f IFRIC 21: evenly expensed ver 12 mnths After applicatin f IFRIC 21: full amunt recrded at the time f the bligating event giving rise t the tax - Mandatry retrspective applicatin as f January 1, 2015 fr bth interim and annual financial statements. 14
Paris, Nvember 5, 2015 - The impact f the applicatin f IFRIC 21 essentially lies in a different allcatin f the expense at interim clsings. Accrdingly, the annual cnslidated financial statements will nt be significantly impacted by the applicatin f this interpretatin. IFRIC 21 impacts ( millin) Nine mnths 2015 Nine mnths GAAP Nine mnths Pr frma EBITDA -17.8-20.5-13.8 Current EBIT -17.8-20.5-13.8 Current Net Incme -16.1-17.4-13.0 2. Recnciliatin f prir and new financial indicatrs used by the Grup The recnciliatin f perating cash flw befre changes in wrking capital and adjusted perating cash flw with the new financial indicatr EBITDA is as fllws: ( millin) Nine mnths 2015 Nine mnths Pr frma Nine mnths GAAP Operating cash flw befre changes in wrking capital 1,764.0 1,661.3 1,542.4 Operating cash flw frm financing activities +1.3 15.4 47.0 Adjusted perating cash flw 1,762.7 1,645.9 1,495.4 Excluding: Renewal expenses +206.4 +188.5 +243.9 Restructuring charges (1) +64.5 +24.5 +24.5 Share acquisitin and dispsal csts +3.0 +4.8 +12.2 Including: Principal payments n perating financial assets +111.4 +88.1 +106.2 EBITDA 2,148.0 1,951.8 1,882.2 (1) Cash restructuring charges fr the nine mnths 2015 primarily related t the French Water vluntary departure prgram in the amunt f 37.7 millin. In the nine mnths, they cncerned the head ffice vluntary departure plan in the amunt f 22 millin. 15
Paris, Nvember 5, 2015 In additin, the recnciliatin f Current EBIT with Operating Incme is as fllws ( millin) 2015 Pr frma GAAP Current EBIT 941.5 713.2 711.7 Impairment lsses n gdwill and negative gdwill +0.3 +0.9 (608.6) Restructuring charges (6.6) (24.3) (24.3) Persnnel csts share-based payments (5.6) - - Nn-current impairment f prperty, plant and equipment, intangible assets and perating financial assets Share acquisitin csts, with r withut acquisitin f cntrl Operating incme after share f net incme f equityaccunted entities (0.3) (35.5) (35.5) (0.8) - - 928.5 654.3 43.3 3. Definitins GAAP (IFRS) indicatrs Net finance csts represent the cst f grss debt, including related gains and lsses n interest rate and currency hedges, less incme n cash and cash equivalents. Nn-GAAP indicatrs - The term internal grwth (r grwth at cnstant cnslidatin scpe and exchange rates ) includes grwth resulting frm: the expansin f an existing cntract, primarily resulting frm an increase in prices and/r vlumes distributed r prcessed, new cntracts, and, the acquisitin f perating assets allcated t a particular cntract r prject. - The term external grwth includes grwth thrugh acquisitins (perfrmed in the perid r which had nly partial effect in the prir perid), net f divestitures, f entities and/r assets deplyed in different markets and/r cntaining a prtfli f mre than ne cntract. - The term change at cnstant exchange rates represents the change resulting frm the applicatin f exchange rates f the prir perid t the current perid, all ther things being equal. - Net financial debt (NFD) represents grss financial debt (nn-current brrwings, current brrwings, bank verdrafts and ther cash psitin items), net f cash and cash equivalents and excluding fair value adjustments t derivatives hedging debt. - Net free cash flw crrespnds t free cash flw frm cntinuing peratins, i.e. the sum f EBITDA, dividends received, perating cash flw frm financing activities, and changes in perating wrking capital, less net industrial investments, current cash financial expense, cash taxes paid, restructuring charges and renewal expenses. New indicatrs used by the Grup as frm the 1 st quarter f 2015: - EBITDA, which replaces Adjusted perating cash flw, will cmprise the sum f all perating incme and expenses received and paid (excluding restructuring csts, renewal expenses and share acquisitin and dispsal csts) and principal payments n perating financial assets. 16
Paris, Nvember 5, 2015 - Current EBIT replaces Adjusted Operating Incme. T calculate Current EBIT, the fllwing items will be deducted frm perating incme: Gdwill impairments f fully cntrlled subsidiaries and equity-accunted entities, Restructuring charges, Capital gains n financial divestments, which will nw be cnsidered as an item within net finance csts, One-time and/r significant impairment f nn-current assets (PP&E, intangible assets and perating financial assets), Impacts relating t the applicatin f IFRS 2 Share-based payment, Share acquisitin and dispsal csts. - Current Net Incme, which will replace Adjusted Net Incme, will cmprise the sum f the fllwing items: Current EBIT, Current net finance cst items, Other current financial incme and expenses, including capital gains r lsses n financial divestitures (f which gains r lsses included in the share f net incme f equity-accunted entities), Current tax items, and Minrity interests (excluding the prtin f minrity interests relative t nn-current items in the incme statement). Frmer indicatrs used by the Grup until December 31, : - Adjusted perating cash flw includes perating incme and expenses received and paid ( cash ). - Adjusted perating incme is equal t perating incme after the share f adjusted net incme (lss) f equityaccunted entities, adjusted t exclude the impact f gdwill impairment, negative gdwill recgnized in net incme and certain special items. Special items are items that are nt expected t recur each year and that substantially change the ecnmics f ne r mre cash-generating units. 17