Philippe Gaston Henri Capron - Chief Financial Officer

Michel Debs - Crédit Suisse AG, Research Division Martin C. Young - RBC Capital Markets, LLC, Research Division Patrick Hummel - UBS Investment Bank, Research Division Olivier Van Doosselaere - Exane BNP Paribas, Research Division Emmanuel Turpin - Morgan Stanley, Research Division Nathalie F.

Casali - JP Morgan Chase & Co, Research Division Vincent Ayral - Societe Generale Cross Asset Research Julie Arav Harry Wyburd - BofA Merrill Lynch, Research Division Xavier Caroen - Bryan Garnier & Co Ltd, Research Division Philippe Ourpatian - Natixis S.A., Research Division James Brand - Deutsche Bank AG, Research Division

Thank you. Good morning, ladies and gentlemen.

I'm very happy to present a strong set of results for Q3, which are actually in line with H1, thanks to our restructuring; thanks to the reorientation and reorganization of the company, which has gone on now for a few quarters. The return to growth is confirmed in 2014.

Revenue was up 5% at constant exchange rates for the whole group. This good revenue performance was achieved despite an unusually mild winter, which impacted Dalkia's activity in France during the first quarter, as you remember.

Growth was therefore particularly strong in our Water and Waste activities. Those are up 6% at constant exchange rates and even 3.4% at constant scope and exchange rates, i.e.

without the benefit of the Proactiva acquisition. And needless to dwell on the fact that this growth was fueled primarily by activities outside of France.

Adjusted operating cash flow, or measure of EBITDA, also grew strongly, with an increase of 12.8% at constant exchange rates over the 9 months. And here too, the growth was fueled by our Water and Waste activities, with adjusted operating cash flow growing by 13.1% at constant exchange rates.

The overall GAAP figure, of course, is more difficult to interpret at 12.8% because it includes 2 quarters of Dalkia France and 1 quarter of Dalkia International, which is -- which of course has a positive impact. More than revenue growth, as you may well imagine comparing these 2 figures of growth -- of top line growth and EBITDA growth, it was cost cutting which was largely responsible for this good performance.

If you turn to Page 4, you can see the set of figures which we are commenting. We already discussed revenue and EBITDA.

In terms of EBITDA, there is one figure we have not discussed actually, which is the pro forma one. Pro forma means reconstructed figures as if we had Dalkia International for the whole year or at least over the whole 9 months.

And this is growing by 7.7%, but you will remember that, in Q1, the figure was actually negative, so we are significantly growing as the impact of the winter becomes less and less as the year unfolds. Adjusted operating income is up 15.7% to EUR 711 million.

And even though we are not providing the figures for quarterlies, as you may well imagine, the net income, the recurring net income, is up by significantly more than this figure. Our industrial CapEx is stable, actually slightly declining at EUR 937 million, which means that our business units have sustained their capital discipline which has been enforced already last year and continues to be enforced this year.

Free cash flow is still negative at EUR 191 million, but this is, of course, a seasonal impact. It should reverse by year-end.

And it shows a EUR 250 million improvement versus last year. Our net debt at 800 -- at EUR 8.6 billion suffers from a EUR 300 million currency impact, mostly registered in Q3, but we still aim at maintaining the debt around EUR 8 billion by year-end, as the working capital requirement impacts will reverse.

On Page 5, you can see that the revenue was resilient despite a sluggish economic environment. I mean you're all aware of the macros, so I won't dwell on it, but what we can say is that, overall, we have stability in France, continued growth, and we'll get back to that for Water and Waste; continued growth in Europe, excluding France, this is mainly driven by the -- by U.K.

Waste, with the PFI ramp-up; significant growth in the Rest of the World, especially Australia and the U.S.; and a good performance of our Global Businesses, with especially the Veolia Water Technologies. And contracts are picking up, starting to be executed.

And good organic growth in our hazardous waste activities. If you turn to Page 6.

Water and Waste operations both grew by 3%, but in the case of Water, you have to distinguish between Water operations which are roughly stable, actually very slightly declining. And this is a combination of a revenue decline in France, which is offset by stability in other geographies and significant improvement outside of Europe, especially Australia where we have had some new contracts, and Asia which is also doing well for Water.

Energy Services are down because of Dalkia France. In the first half, this has been already aptly [ph] commented.

Regarding Waste, if we turn to Page 7. Dynamics in Waste activities continues to be satisfactory despite the sluggish economy.

Volumes are up 1.1% in Q1 -- in Q3. That means 1.5% over the 9 months.

If you look at the small peg -- at the right side of the slide, you see the sequence of quarterly earnings, and you see that, after a very bad 2013, 2014 is better. Again, this is not driven mostly by the macro but by the fact that we have a good positioning.

We've gained some share in some geographies, even in France where we have a 0.8% volume increase, which is probably better than the market as a whole. We are not present in Benelux, of course, which is a very distressed market, and this helps.

We enjoy the ramp-up of the PFI in the U.K.; a good evolution of hazardous waste, as I said. And Germany, in contrary, is negative in terms of volume and recyclates price, but there, as we will see, we enjoy the benefit of the restructuring which we are conducting there, so this softens it up on the bottom line.

On Page 8. As you know, we do not provide precise figures and breakdowns for EBITDA for quarterly earnings, but we can give you a bit of color on the overall very good performance, plus 13%, which we registered over the 9 months.

If we start with France. France is holding up.

I mean is -- it remains under pressure, of course, but it's holding up, mostly thanks to cost reductions. Water is basically stable.

And Waste is slightly down because of recyclates price, especially in our scrap metal activity. Europe.

Earning in Europe, earnings growth is driven by the U.K. PFI ramp-up and German Waste restructuring, as already mentioned.

Water in Central Europe remains flat but at a very high margin level. In the Rest of the World, significant growth is registered in the U.S.

and Australia. And of course, to -- we also enjoy the addition of Proactiva, which boosts earnings in the Rest of the World.

Global Businesses is more of a mixed bag: good hazardous waste performance, as already mentioned; ramp-up of our large contracts for Veolia Water Technologies. What -- the struggling part is more the sad part because, probably more than in the past, we are starting to feel the pressure on the budgets of local authorities, and that means less orders being placed with that.

On Page 9, we've tried to show the main drivers behind the CAFOP growth over the first 9 months. And clearly, the slide shows that we have 2 engines for growth.

One has been the perimeter extension to Proactiva. And the other is cost cutting, which has a very significant impact and explains 2/3 of the variation.

On Page 10, we give you some color on the cost cutting. We are very happy with the way the cost-savings plan is being executed.

It -- over the first 9 months, we stay on a rhythm of about EUR 50 million per quarter, i.e. EUR 200 million for full year.

You can see on the pie charts that all major businesses and all central functions have contributed to these cost savings. And therefore, we are able to confirm the trend.

And we are fully in line with our objective for this year at EUR 550 million. And we are very confident that we will achieve the EUR 750 million objective by the end of 2015.

If you look at the pie chart on the right side of the slide, you will notice that organizational efficiency, i.e. headcount reduction, takes the lion's share, whereas it's only 1/3 of our costs, whereas purchasing is only 19% of the savings for also 1/3 of our costs, so needless to say we are going to focus more and more on purchasing as a source of cost reduction, which it's more difficult to capture but we feel that there is further potential there.

On Page 11, we can see that, as mentioned, CapEx discipline holds firm. We can also see the seasonal impact on working capital requirement, which explains why we still have a negative free cash flow the first 9 months, which again is better than the previous year and should reverse for next year.

Our net debt at EUR 8.6 billion is significantly down versus the net debt at the same time last year, flat compared to June end, to the end of June. We've had -- but we've had 2 significant factors.

One is the Dalkia closing, which as expected had a EUR 350 million positive impact on the net debt. EUR 150 million had been captured already in the 2013 accounts, but we still have a further EUR 200 million, which was a positive for the quarter.

On the other hand, we had the EUR 200 million negative impact of foreign exchange, especially on our dollar- and sterling-denominated debt. If we move on to Page 12.

We are extremely confident in our ability to reach the 2014 objectives. They are not at risk.

They do not appear at risk in any way. And of course, that means that, beyond 2014, we'll remain committed to achieving our objectives, which are -- which you will remember and we just stated on Page 13.

Those 2 pages have been unchanged for quite a number of quarters now. So there it is.

And again, we are very happy with what we've achieved. It's not due to the economy, clearly.

It's due to hard work. And we'll remain committed to delivering such hard work in the future.

So now we are ready to take on your questions.

My first question is on Water. Could you help us get a sense of the sensitivity that your top line and your EBITDA have in regards to inflation?

And there is a lot of concern about low inflation next year. Is that something that would lead to lower revenues but also lower costs and, therefore, be offset?

Or does this have some kind of net impact on your cash generation and EBITDA? My second question is on Waste.

You mentioned market shares gain. Could you help us split your volume growth, which is indicated in the slide, between those market share gains and the new capacity coming online?

My third question is on cash generation. So we have your EBITDA in the bridge, and we see that it's thanks to your effort on cost cutting that you grew EBITDA.

Working capital, we don't see with the information we have, but could you help us comment the CapEx number and understand what's in there? And also, what share of that is maintenance?

And whether you expect the maintenance CapEx to go up or down in the coming quarters. And my last question is on the balance sheet.

We understand from the press release and the news flow over the past few days that the SNCM situation continues to be complicated. We still, I think, collectively expect you to be able to dispose of the asset.

How much money do you think you can ultimately raise from the disposal of SNCM? And what are the plans in terms of allocating that capital?

You're being very greedy, Michel. Leave some questions for your colleagues.

Water sensitivity to inflation, it's a good point, obviously. As you know, in most geographies, we have price indices which reflect more or less accurately our cost base.

Therefore, the theoretical answer to your question would be that we probably would be neutral or would be economical [ph] to a much lower inflation, which we're already witnessing, or even a deflation provided the indices we use adequately portray reality. For example, in a situation where prices would come down, we probably can't imagine that salaries would come down.

They would probably remain flat, but in that situation, we would not be penalized because this would also be reflected in the indices. So bottomline, we should be about neutral in most cases.

Actually, in some countries where we have difficulty convincing local authorities that we have to increase prices to reflect our cost inflation, this issue would actually disappear, so it could end up, in some geographies, to be a benefit. But so far, we are not worried, or we are not feeling any adverse pressure because of this lower inflation.

In terms of Waste, the 1.5% volume increase is -- corresponds to about 0.6% of the capacity increase, mostly the U.K. PFI, and the rest is higher activity in some geographies or market share gains in others.

CapEx is about half of the -- I mean half of it is about maintenance, a smaller half. As you know, distinguishing between maintenance and growth CapEx is a little bit the sex of angels type of question, but the way we account for it or the way we reflect it is about -- a small half is maintenance.

In terms of balance sheet, it's a bit early to draw conclusions from the recent events in -- which unfolded in for SNCM. Let me just say that what happened this year -- this week, with the company filing for both of the Chapter 11 and filing for overall responding share [ph], is -- for receivership, is in line with what we told all along that there was no way forward to try and save some activities of the companies without going into receivership and without having a discontinuity, preventing the company ever having to face the Brussels fines.

Now what we have ahead is a process whereby, first, the commerce tribunal in Marseille has to accept the placing the company into receivership; second, organize a beauty contest between potential investors in a new company with a probably much reduced scope; and third, have this newly formed company emerging from receivership authorized by Brussels to keep the DSP, the local transportation contract between Corsica and the continent, without having to face the fines which were threatened -- which threatened the old SNCM companies. So we still have a way ahead.

Meanwhile, of course, needless to say we are not -- we continue not to finance SNCM. We will not putting one penny more into SNCM this year.

When this process is done, we can hope -- of course, we will not get any proceeds from SNCM, I mean. And that's not -- I mean the value of the company, as you know, is already 0, I should say, less than 0, in our accounts, so we are not expecting any proceeds from that.

But once this is done, we expect to renew talks with Caisse des Dépôts to see under what conditions we would reduce our holding and, hopefully, reduce it down to 0 in Transdev. That means getting back the EUR 620 million of intercompany credit, intercompany loan that we have with Transdev; as well as, hopefully, most -- I mean, as quickly as possible, most of the equity which we have in Transdev with a nominal value of EUR 480 million.

We actually suspect it's worth more given the good development plan of Transdev and the way the company is improving, leaving aside SNCM, of course.

I'll tell you what. I'll limit it to 2 questions.

The first is on the cost-cutting plan. If I go back to mid-year of 2013, you had a target for the end of 2014 of net cost savings of EUR 400 million.

At the end of 2013, you had achieved EUR 178 million. Add in the EUR 109 million net savings achieved year-to-date, that takes us to EUR 287 million, very much suggesting that, in the final quarter the year, in order to hit those targets, you'll have to deliver EUR 113 million of net cost reduction.

How does that stack up versus the slide that you presented in the presentation today? Because that is quite clearly indicating a much lower number for the fourth quarter of this year.

And then the second question is around the Waste volumes. On an underlying basis, could you just give an indication of underlying volume movement in Europe and outside of Europe?

I appreciate that you gave a 0.9% for the business as a whole on an underlying basis, but how does that split between Europe and the Rest of the World?

Okay, on the first question, the cost cutting, I'm afraid, I mean, I have not been with the company that long, but -- and therefore, I don't recall 2013, but I'm afraid you're confusing gross and net restructuring costs. So I mean the -- as you see on the slide, we are at EUR 501 million, but this year so far, we incurred EUR 42 million of implementation costs.

So may I suggest that you liaise directly with Ronald or Ariane, and they will walk you through the figure, but I assure you there was no change of rhythm. We are roughly on a gross basis pre-implementation costs.

We are still roughly, year in, year out, on a EUR 50 million per-quarter rhythm, no change there. On the Waste volumes, I know you guys are enamored with Waste volumes and -- but it's always very difficult to add those carrots and those apples because the -- they have very different impacts on our P&L, according to whether it's tonnes landfilled in Australia or burnt in the U.K.

or sorted out in Germany. Be that as it may, what can I give you?

We have -- I mean, in Q3, for example, we have a 1.6% volume impact in France. It was 4.7% in Germany.

In -- I'm sorry, the U.K. It was also 4.7%, minus 4.7% in Germany.

It was slightly negative in the U.S. even though the figure had been positive in H1.

Also slightly negative in Australia, minus 0.5%, but with a good mix and more tonnes landfilled; and also slightly negative in Asia, minus 2.2%. But again, not all terms are equal in terms of what they bring us, and therefore, we tend to look at -- I mean, as the quarter unfolds, we tend to look at euros more than at the volumes themselves.

Okay. And were those figures for 9 months, or the third quarter alone?

The third quarter.

Okay. And the France one was 4.7%; and the U.K., 1.6%, or the other way around?

No. France was 1.6%, and U.K., 4.7%.

Three short questions, if I may. First one is a clarification on Slide 9.

In this waterfall chart, you show EUR 136 million positive EBITDA impact from cost cutting and other. On the slide after, you show that the net savings impact was EUR 109 million.

So there is still a delta between those 2 numbers, and I just wonder what that is, if you could be more specific on that. Second, I wonder: You have confirmed the EBITDA outlook at 10% -- roughly 10% growth year-over-year, before effects.

You have achieved almost 13% after 9 months. Is that just conservatism, or do you expect any negative momentum in the fourth quarter that you have taken into account here?

And the third question, you state in the press release that you're approaching the year 2015 with confidence. Do you want to elaborate a bit more on that, where that confidence comes from?

Is it just further cost cutting as a predominant earnings driver in 2015? Or are you also confident, as far as the overall activity levels are concerned, going into next year?

Thank you. On page -- I mean the difference between the figures on Page 9 and Page 10 is that, basically, they are built in completely different ways.

And on the Page 10, what we do is track the progress on the large cost-cutting operations and programs. And we track the progress achieved and its impact on the year, on the present year.

So that's one way to look at it. The Page 9 is more a verification.

We track everything else, and what we are left with is performance improvement. And that's why it says "cost cutting and other," because actually there are probably all -- other factors which have not been captured.

So this is a reconciliation with the previous slide. It's actually -- the EUR 136 million is actually better because it should be EUR 109 million in terms of net savings, EUR 151 million, minus the implementation costs, which should be there as well.

Another thing which is important on Slide 9 is that you may be surprised to see that we have a positive impact of prices, net of cost inflation. That's because we also captured in this figure not just the price pressures and the price renegotiations, which are negative; so price indices which is positive, so cost effect or increase which is negative but also all the favorable impacts of the run-of-the-mills programs which we do not track separately in terms of cost cutting but we do offset some of the effect of cost increase, as previously mentioned.

On the 10% versus 13%, you're absolutely right. We are ahead of our objectives.

Did -- we do maintain our target of around 10%, but first, 13% is also around 10%. And second, it would look a little bit silly to improve our guidance this late in the year.

So call it conservatism or call it the fact that we think it's -- it couldn't make a lot of sense to improve our guidance at this stage, but clearly, the fact that we maintain the guidance does not mean that we expect a much lower number for the end of the year. We are being cautious and -- but at this stage, suffice it to say that we feel we are -- we should have no problem reaching the guidance.

In terms of 2015, there, of course, it's more unknown. We are just in the process of examining and challenging the business -- the budgets of our various business units.

What does fuel confidence is, a, as you mentioned, further cost cutting; and b, lots of new contracts, which -- especially in the new commercial growth areas which we've pointed out and which we've outlined during the year. We have good success in getting those new contracts, especially in the oil and gas -- for the oil and gas industry or in dismantlement and recycling.

And therefore, we feel that those contracts will start making an impact and sustaining top line growth, which added to cost -- operations, cost reduction, very significant SG&A reduction. We are in process of going from 1,300 to soon, I hope, 700 people at the global headquarters of the company.

Added also to -- if you look at the net income, you have to add also the impact of the financial expenses reduction which is going on and a better tax efficiency. Adding all that, we are confident that we will be able to deliver on our 2015 objectives, but it's a bit too early to commit to it.

We'll do that when we show -- I mean, 3 months from now, when we show the full year earnings and we precise the 2015 guidance.

I've got three of them. First of all, we're not speaking too much about the Energy Services division.

And yes, there has been some pressure which is essentially water related, but so I was just wondering, taking all of that aside, could you give us then maybe an indication of where you expect Dalkia International to be? And then what kind of annual performance we can expect from it in the coming years, maybe in terms of EBITDA evolution?

And then secondly, actually on what you said in terms of sticking to your mid-terms objectives beyond 2014, so that's at least 3% top line growth and at least 5% growth in EBITDA, but then it's stated actually that's a mid-cycle projection. So I was wondering, is that something that you actually already expect from next year onwards?

Or could we argue that we are now in a subdued environment, not in mid-cycle, and therefore, in today's world, the performance might be a bit softer than that? And then just a final one, going from the EBITDA to the adjusted operating income, the press release talks about the Marius Pedersen gain, but I think that already was booked in H1, so I was wondering if there was any particular one-off that occurred in Q3 which may have led to an improvement in the operating income versus the reverse of the EBITDA.

That's all.

Thank you. For Energy Services, you're right.

We are not putting them to the forefront enough in the presentation. What can I say?

First, the integration of Dalkia International into the new Veolia structure went very smoothly. It's -- we had ample time to prepare, of course, but it was executed in the course of the summer in a swift way.

The new structures are up and running in all major geographies where we had simultaneously Energy and Waste or Energy and Water businesses. So this has been done.

The new people are in place. About 20% of the country heads of Veolia now are ex-Dalkia people, so which is about their share in sales.

So this has been done. Second, we've had some interesting new contracts energy related, especially the Merritt biomass plant, which is going to be, I think, the largest one in the country, perhaps the largest ones in North America, in Canada.

And we feel that, in terms of new investment opportunities, whether in North America, in the Middle East; possibly also further development in Central Europe and possibly in Asia, we are going to see energy and Energy Services grow as a percentage of our CapEx deployment even though most new large developments with either electricity production or heating networks will probably be financed with an OpCo, AssetCo type financing, using other people's money so as not to increase our own CapEx development. That's what we can say at this stage.

In terms of performance for next year, again it's a bit early days. We are still looking at the budget, but clearly, we will at least have a performance improvement driven by the fact that we can expect, we can never be sure, to have a better winter, a more -- a proper winter this year in Europe and therefore to recover the degrees days we had lost last year.

In terms of 2015 guidance, you're right. We say mid-cycle because, I mean, this obviously has an impact on our business.

And I agree with you that it's not sure whether 2015 will be mid-cycle, but again, let us work on our budget and we will come back with probably some more color on the guidance. And apart from the 3%, 5% which you mentioned, I -- as you'll remember, we also have a softer guidance, which was to say that the aim next year is to cover our dividends with cash generated from operations before any disposals and with our net income, the group share.

So this is -- those are also objectives which we are working. In terms of the adjusted operating income, there has been no significant one-off I can think of in Q3, so then nothing which we should mention at -- in this conjunction.

First question, on Slide 9, which is an excellent slide, I think. A couple of bars here.

Proactiva, first of all, you mentioned 50 -- EUR 51 million increase. I had in mind a full year impact closer to EUR 100 million.

Could you update us on what you expect from Proactiva? And then you mentioned also minus EUR 39 million next to that, which is called volume/construction.

Is that -- does that include the Waste volumes or maybe construction in the Water business? Could you just give us the underlying here?

And obviously, the world volume clashes with the idea that volumes would be up on the Waste side, as you explained in another slide. Second question, you give us an EBITDA 9-month new scope, so for EBITDA.

I haven't seen the same metric for adjusting operating income, so new scope, constant FX, 9 months, please. Finishing off with the guidance.

We've got the guidance of 10% -- at around or maybe at least now 10% growth in EBITDA in '14. And that was based on the old scope, I expect.

At least in order to clarify it in my mind, could you convert that into real-life new scope with or without FX and giving us maybe a range or a single data point for the full year? And last, you made a few comments on guidance for '15.

It's very clear that you will be reviewing your budget going into the new year. There was, so far, a very clear message from management that -- of around EUR 500 million of net earnings, free hybrid, for next year.

Do you stand by that guidance, or is it also under review?

Emmanuel, lots of questions. Proactiva, first.

The EUR 51 million contribution is a little bit on the light side, you are right, compared to what we expected just because the Mexican peso and all the other Latin American currencies are a little bit on the light side compared to what we had in mind when we bought Proactiva and when we did the budget. So you're right.

There is -- the impact over the whole year will be a bit less. Keep in mind also the fact that the transaction occurred at the end of October, and therefore, we had a EUR 10 million contribution in 2013 already.

In terms -- the EUR 39 million figure is includes lots of things itself. It includes construction volumes, which as you say are up, but it also includes Waste and Water volumes.

Keep in mind the fact that in many geographies, starting with France, but -- the same applies. It's even worse actually this year, in our large Central European activities.

The volume of the product sold itself is down by roughly minus 1%; in some cases, a bit less, in some cases, a bit more. So that's a significant impact as well.

And it also includes market share losses, so to speak. In France, as you know, some cities are going back to direct management of water, where we capture some of this because we keep some part of the contract, or some activities which we have on behalf of the newly created water authority, but overall, we have a slightly negative impact.

For example, this year, we are losing the Montpellier distribution contract, with the very good news, which is that we are keeping the wastewater treatment contract. But overall, the impact is slightly negative, as you see.

In terms of EBITDA in the new scope, obviously, the new scope is going to be better than the previous one because we are substituting 2 -- in GAAP figures, we'll be substituting 2 quarters of Dalkia International against 1 quarter of Dalkia France, so this should have roughly a EUR 100 million positive impact. So of course, that's not what the 10% guidance is about.

We would be comparing carrots and apples. So what we are going to provide you with is 2 things.

It's the Water and Waste without any Energy figure and the pro forma figure with Dalkia International full year. And on those 2, we are aiming to be around 10%, clearly above 10% now in Water and Waste and around 10% including Dalkia International, with the very tough start of the year in Q1 due to climate but the GAAP figure should be significantly above 10% because of this favorable perimeter impact.

You are not seeing the adjusted operating income on the new scope because we are not providing it. We'll see at year-end whether we want to provide something on this.

And regarding the EUR 500 million objective, I said it remains an objective. It's not a hard target as long as we don't have a budget backing it up, obviously, but it remains our intention to strive to achieve this, as we have said repeatedly to The Street.

Just 2 questions from me. Just to follow up on Emmanuel's question on the guidance, so just to confirm that what you're saying is you're still comfortable with the 10% EBITDA growth before the change in consolidation, which adds EUR 100 million.

So in absolute terms, what we're talking about is just under EUR 2.1 billion of EBITDA for the full year, and that is about 16% growth year-on-year. And you don't think that is challenging given the 12% for the 9 months.

And that's the first question. And the second question is to come back on maybe the medium-term levels of CapEx that you think you need to drive your medium-term growth targets on the new perimeter of the group.

So the short answer is yes, to the first part of your question, Nathalie. And on the second part, I guess we are comfortable with where we are.

Where we are is EUR 1.5 billion was the previous perimeter. Call it EUR 1.6 billion because Dalkia International needs a bit more investment than Dalkia France, but we feel that we can sustain our expected growth with these levels knowing that we are going to -- when we do large projects, we are going to increasingly work with other people's money, which is either our industrial customers or infrastructure France and such.

In today's financial markets, the expected yield by these people have gone down significantly, and therefore, it's easier to structure projects with us owning only the part of a significantly leveraged AssetCo, not consolidating the corresponding debt because typically we'll have only 20% of the AssetCo, and owning, of course, a large majority in the operations and maintenance.

And just to clarify on the EUR 1.6 billion. Is that including the new operating financial assets of about EUR 100 million a year?

Yes.

Yes.

Most question have been asked already, I see, so I will stick just to an additional one on SNCM. If SNCM goes ahead and the solution is basically sound, especially with the EU Commission, on the fine, how long do you expect this to take?

And then how long would it take for the Transdev transfer to take place after this? And finally, would we see any provisions write-back or anything like that on SNCM?

Okay, so it's difficult to answer your first question because, of course, timing is not in our hands. Timing is in the hands of the commerce tribunal, which now has a responsibility of placing SNCM into receivership, which is what Olivier Diehl, the CEO of SNCM, has asked; and then to organize an orderly continuation plan selecting new investors into the company, and this is entirely out of our hands.

It should not take inordinately long, for a very simple reason, which is that the company will soon run out of cash because there will be no outside injection of cash into the company, so the commerce tribunal does not have an infinite time to go ahead with this process. They have to move relatively swiftly, but they are not -- it's not only in their hands.

It is also in the hands of the EU Commission, which has to approve the process and determine that it's been a transparent process, that the DSP contract can be transferred to the newly recreated company without the fear for the new investors to see the, what was the, so-called Brussels fines come up again. And therefore, it's a relatively -- I mean it has to be raised because, if not, if there is no possibility to organize an orderly continuation, the company will then have to be liquidated.

In terms of financial consequences for Transdev or for Veolia, it's much too early to say whether we would be in a situation to do a write-back or whether they would have a -- or Transdev would have to do a final check in -- as part of the overall continuation plan. It's early days there.

And on the question number two, on the time it would take for Veolia and CDC to get the transfer...

Oh, I'm sorry. Oh, well, as you know, it takes two to tango.

And it's always difficult to predict how long the negotiation will take. We just check that there was still willingness to discuss on the Caisse des Dépôts side provided, of course, the SNCM issue was behind us, but I mean we know they will be willing to talk.

How quickly we can agree on something, I cannot tell you, but there is -- let's just say there is a goodwill on both sides.

A few question, if I may. First, on your cost of implementation of your cost-cutting program.

The run rate of costs have substantially declined this year compared to last year. And unless I'm wrong, the voluntary departure plans in France and Germany have already been totally provisioned.

And so my question is, does it mean that the net savings could finally be higher than your EUR 750 million guidance in 2015? Or should we expect another acceleration in your implementation costs in 2015?

When you announced your plan initially back in 2011, you were -- indicated a accumulating costs -- cumulative, sorry, cost of implementation of roughly EUR 400 million. As of today -- or over the period '13, '15, as of today, we are only at EUR 215 million, unless I'm wrong, so I was just wondering whether we should expect an acceleration in this cost next year or whether the run rate should continue to decline.

A second question, on your underlying Waste volumes outperformance compared to the one of Suez Environnement. They posted last week a growth of 1%, but excluding their new commissioning, they are mentioning that their volumes are flat.

What is the main differentiating factors, in your view? Do you think that this is mainly linked to the benefits of your restructurings in Germany?

And just a last question, on your return on -- on the Water targets. And where do we stand as of the 9 months?

And sorry, last question also, can we have an update on the PPA related to Dalkia deal?

Well, in terms of cost cutting, I agree with your calculations. The EUR 750 million is a gross objective, so it does not -- it did not include the implementation cost.

In terms of implementation costs, you're right. We are probably running a bit light compared to what was announced initially.

I don't know how much is left to do. I mean we are not sure what the nature of the cost cutting will be in 2015 and therefore what the implementation cost is going to look like.

You're right. We did most of the provisioning of the voluntary departure plans in France, and they're being executed, as I speak, both for French Water and the headquarters itself.

In terms of Waste volume, as I mentioned, I think the corresponding figure to Suez being flat is about 0.9% for us, leaving the capacity -- the favorable capacity impact aside. I'm not familiar enough with Suez operations to be able to say what drives the difference.

I suspect the fact that we are not in Benelux is an -- is part of the explanation. In the U.K., our share in landfills is lower than theirs, whereas our share in PFIs is higher, so both will benefit from a very favorable mix impact in this geography.

Then you'd have to look country by country and see what the respective positioning is. But I would not derive definitive conclusions from this observation over this year.

In terms of return on capital employed, we are creeping up from the 5% last year to 6% this year. Clearly, this is still not a favorable level.

We aim to get to a 9%, which is our stated objective, as quickly as we can. And in terms of the Dalkia International PPA, this is still work in progress.

We'll announce something at the end of this year. It will be included in the yearly accounts, but there is no reflection of that yet in the accounts you're shown today.

Most of my questions have already been answered, but a -- but 2 final ones. Firstly, on Dalkia International.

I think, at half year, you gave some detailed numbers into the weather impacts in Dalkia International. And if you adjusted for that, if you took out the weather impacts, the performance still wasn't that good.

So I just wondered if you could give us a bit of color as to what's driving the performance of Dalkia International, apart from the weather, at the moment. And then secondly, on Waste, so you've given us a good idea of what happens in the 9 months.

I just wondered if you could comment on what's happened since the end of September. I think Suez mentioned that scrap metal prices had fallen in October.

Could you just give us an idea of what you're seeing sort of on the ground right now in Waste?

On Waste, you're right. There is further decline in the scrap metal prices.

At the same time, we're significantly restructuring our background [ph] operations, so -- in France, so this is softening the blow somewhat. In terms of Dalkia International performance, it's a bit early to mention the -- to mention figures.

Let's just say again that the integration went well, that we see figures improving quarter-on-quarters, as is shown, even though we are still, of course, a bit light at 7.7% EBITDA increase on the pro forma figures. So that's what we can say.

We have -- then I mean, if you go country by country for Dalkia International, you have also some either regulatory or operations issues country by country, but I mean this is the -- this is all life, so to speak, given the wide variety of our geographical activities.

And just to be clear, that 7.7%, the pro forma EBITDA growth, you think you can hit 10% by year-end. Have I got that right?

We're saying we can get closer to 10%. Whether we will hit it or not, we'll see.

Again, we -- if -- I mean, if we have a better climate in the very last day -- in the very -- in the last 2 months of the year, especially in Central Europe, that clearly will help.

Sorry. My IR team is telling me I made a mistake regarding the EUR 750 million objectives, which is net of implementation cost and not growth.

Just have two. The first one will be on any indication you can give us on what you gave us in the first semester slides, basically on the sales growth you made there, with the new contracts, that was the renewal of contracts or either on the industrial growth coming an impact in the H1 revenues?

So I don't know if you have in mind the slide, but basically, it could be nice if you can give us some indication on the impact for the first 9 months. And the second question will be on the contract that you may, let's say, win with Water at Lille contract.

We know that Suez Environnement is still at -- is still waiting for an indication on whether or not they will be able to fight against you, but maybe you can give us some indication on what you can expect by 2016 on the EBITDA level given that Suez Environnement was communicating on a EUR 12 million to EUR 13 million impact of EBITDA coming from this contract every year. So it could be nice if you have any indication on that.

I'm sorry. I did not get either of your questions.

I mean you are apparently referring to a specific contract, but I did not get the name.

It was the contract of Lille.

Ah, Lille. I'm sorry, I'm sorry, I'm sorry.

Okay, on Lille, it's much too early days. I mean we -- I don't know what -- I cannot tell you what Suez offered.

I can only tell you that we are discussing with the Lille water authorities because we made an offer which was an admissible offer, unlike Suez. I can't tell you what the result of litigation is going to be.

And I can't tell you whether Lille will decide to work with us or will decide to go directly to direct management of its waterworks. So it's -- I cannot make any comment at this stage.

Of course, we are glad that our offer was admissible, but let's remain very cautious at this stage. And the first -- and I did not get your first question.

The first question is referring to the Slide #10 that you had in the first half semester. And it's basically 3, let's say, shots giving us the splits of the sales growth in the first semester between industrial and municipalities market and between growing growth regions and others and between renewables contracts and new contracts.

So I was asking if you have any indication on the first 9 months.

It's very close. I mean there is no significant change in the pattern.

Just one remaining question from my side. Most have been already asked and answered.

It's regarding the Water business. You mentioned in your press release and at then -- and in the presentation that the Marseille impact is only EUR 24 million for end of September.

When we can account that this final, I would say, renegotiation impact in terms of Water revenue will be close to 0 or might be, at the end of the game, positive regarding some commercial success you have had? Do we stand it's going to be for '15, or it's going to be for '16?

I mean, in -- as you know, we're still -- I mean, Marseille has an impact this year and will have a carry-on impact next year. We're -- we still have ahead of us 1 year of renegotiations, of contract renegotiations, roughly 300 per year, and that is 2015.

This will have a lingering effect in 2016 that's less and less as time goes by. And then we'll have a period in which we'll be down to about 50 contracts being renegotiated per year, starting in 2016, most -- or some of them having already been renegotiated, and therefore the margin reduction potential, let's call it this way, will be less.

Therefore, it's -- we have 1 more year of suffering. The good news is that most of the large contracts, especially Marseille and Lyon, are behind us now.

Montpellier was already expected. And the contracts to be renegotiated in 2015 are all small contracts.

So most of the negative impact is starting to be behind us, but of course, it's cumulative. I mean the Lyon, Marseille impacts, we'll still feel for all the years that are coming up.

And that's what we are hard at work offsetting through especially the voluntary departure plans and other cost-cutting activities within French Water.

I was going to ask a question on cost cutting. You obviously had quite a slow start towards the beginning of the turnaround and efficiency program in terms of delivering cost cutting, but it's got up to a much more attractive rate as of at the moment.

I was wondering how you think about that going forward. Is it more like a freight train where, once you get up a certain speed, you could keep it going?

Or alternatively, perhaps you'd identify the kind of low-hanging fruit and deliver on that and maybe it gets more difficult going forward. How do you think about it?

It's both at the same time, I would say. You're absolutely right.

It takes some time. I mean, for example, labor negotiations in France take time.

Therefore, cost cutting can only start after a round of necessary negotiations. And this is happening right now.

At the same time, you're also right that it's easier pickings at the beginning of such an exercise and there tends to be a decline in yields. But my experience of other industries suggests that there is always potentials for cost cutting and especially in a company like Veolia, which for a variety of reasons may not always have been under the maximum level of tension regarding attentiveness to costs.

So it's a bit of both. Again, early days to announce what we will do beyond 2015.

At present, we are hard at work making sure that our various businesses come up with the relevant plans for cost-cutting continuation within the existing program. At some stage in 2015, we'll be in a position to announce what will come next and what 2016 and beyond will be in terms of objectives.

But I -- so I'm not going to give you any figures, except to say that they're going to be significant figures as well. So thank you very much for attending this conference.

And I hope we'll be in a position to deliver more good news 3 months down the road.