Antoine Frérot - Chairman and CEO Philippe Capron - CFO

Michel Debs - Citi Guy MacKenzie - Credit Suisse James Brand - Deutsche Bank Anna Maria Scaglia - Morgan Stanley Emmanuel Turpin - Societe Generale Olivier Doosselaere - Exane Pinaki Das - Bank of America Merrill Lynch Julie Arav - Kepler Cheuvreux

Thank you, good morning everyone and welcome to the presentation of Veolia’s Results for the Third Quarter and First Nine month of 2017. I’ll present the highlights of these results and then Philippe Capron will provide further details.

I’m on Slide 4. Third quarter results show that the group’s strategy which was designed two years ago is now running at full speed with its two pillar growth and efficiency without including the debt.

Revenue growth was stronger at plus 4.4% for the nine months and at 4.3% for the third quarter of both at constant exchange rates. It was derived from continued steady organic growth, like for like produced 3.1% for the nine months as well as for the third quarter alone.

And complimentary this by 15 focused on delivering these activities with high future potential in our businesses. Efficiency exceeds by the execution of our cost savings program perfectly in line with annual objective of 280 million, which has been raised at the beginning of the year.

These two pillar growth and efficiency drove an increase in EBITDA 1.7% at consolidated exchange rate for the nine months period. EBITDA growth during the third quarter alone was much stronger, just for the third quarter plus 4.8% at constant exchange rates plus 3.5% at constant exchange rates because the third quarter of 2016 comparison base was normal while the first half of 2016 conclusion base was impacted by positive one-off events.

On the other hand we expected at the beginning of the year is in the third quarter whether in relation to weak or negative interest in the Europe on our price or the political litigations of southern contracts. With an increase in EBITDA current EBIT improved [0.5%] at constant exchange rates for the nine months and again for the same reasons this calculation was more robust in the third quarter plus 6.9% at constant exchange rates.

Lease improvements even reflected in current net income which is roughly stable compared to last year but 4.3% if we exclude capital gains. And finally net financial debt remains under control since it is down significantly compared to the end of fiscal 2016.

Going to Slide 5, revenue growth is therefore clearly confirmed. Organic revenue growth that these life or lives was 3.1% for the nine months as well as for the third quarter.

it came first from a geographic standpoint mostly in the rest of the world and Europe and in terms of activity the worlds we have particularly in energy and west and notably in the EMEA segments we have win these businesses. Gross was also due to very high renewal rates of existing contracts especially in France, North America and also Gabon.

In France the pressure on contract renewals was less strong and pricing decreasing in our water services is no longer negative in the third quarter. Finally we benefited from good volumes in the third quarter for good volumes were related to [Technical Difficulty] and for waste good volumes were due to a multiple due to a more supportive macro economy relative to industry acquisition and prices.

External growth compliments this organic growth, it is based on small and medium size acquisitions less than €100 million for each completed since the beginning of the year. These acquisitions are intended mainly to reinforce our competencies in new future activities including our existing businesses, particularly energy efficacy, recycling of certain materially and treatment and recycling hazardous waste.

On Slide, energy efficacy treatments of the more difficult forms of pollution circular economy. These are the new frontiers of our businesses, which need industrials companies to outsource to Veolia and shown by most of the example of this slide.

The main driver of the decision of industrials are environmental regulations, which are we putting and most [everyway] around the world, the brand image and marketing policy of many companies and lot at least first feeling, we can achieve. Today the reduction of carbon emission and recycling of reflective particularly from it.

On Slide 7 for our Municipal players, all of the workers contributing to our development. Our team have been awarded significant new [complex] in France particularly in the water sector as it was reviewed by the French water conformation plan which was to include as the know the [means] and capabilities.

As you get in Ireland, as we rewarded a wide range of Municipal contracts both in water and waste. Latin America you know growing factor of that materials and literally the pipeline of new potential service contract have improved particularly Europe and in Asia.

On Slide 8, cost savings innovated over the past nine months were [trend] were perfectly in line with our annual objective 250. Our usual sources of cost [trading] have contributed but now they will have just portion service from operational efficiency.

And we still have room for improvement with regard to [both] particularly local purchasing. The contributions on each where they reflects our action plans and for the nine months we’ve seen that of that 2017.

Finally you will recall that our annual cost savings objectives of 2018 is $300 million higher than each of the two years of which 250 million of growth we confirm our 2018 objective. Slide nine, the unsatisfactory results for the first quarter allow us to easily confirm our full year 2017 objectives.

We also naturally leave us to confirm our objectives for the next two years. I will now turn the floor over to Philippe Capron who will provide further details regarding our results.

Philippe, over to you.

Thank you Antoine. Good morning ladies and gentlemen, I’m really glad to be able to present you with very strong set of results clearly above our expectations if I go back to the beginning of the year.

If we start with revenue, we are in line with H1 at 4.4% growth of constant currency and above 3% organic growth like-for-like. This is not just inline actually with H1, it’s actually better because in H1 we still benefited if you remember from a good harvest of new contract and new commercial developments which took effect in Q3, 2016 and therefore staff having an impact on the year-to-year comparison in Q3 of this year.

So, it means that the underlying growth – the underlying organic growth is even better than it was in H1. If you then move on to EBITDA, at 1.7% increase of constant currency we have a better than expected performance which is driven by a strong Q3.

In Q3, since we still have some headwinds, but we don’t have a negative comparison base so what we did at the beginning of the year and therefore our revenue growth of 4.4% translate into an even higher in EBITDA. This drive will get to the details later in the presentation, this drives the improvement in EBIT at 2.2% growth 6.9% actually for Q3 standalone as well as for current net income.

Worth of note is the fact that our CapEx is stable year-on-year, so it was stable by the way compared to 2016 as well, which brings that we are able to generate additional growth – additional topline growth without spending more on CapEx which is a change of the DNA of the company is changing. Free cash flow is negative this can be expected at this time over the year, we have no doubt that this will reverse in Q4 as the seasonal reversal of working capital requirement comes in.

And net financial debt is down by more than €400 million a further this impact is due to the currency impact that this is due to the 12 months cash generation above the dividend payments. If we move on to slide 12, you will use to this presentation which strips out the construction activities and the pass through impact of energy prices on our activities.

And use that in Q3 underlying growth at 4.7% it has been better than in Q2 at 4.1%. We could have feared that there were some deceleration which is Q1 and even better.

But as you can see Q3 marks a new improvement in the figure. Worthy of note is the fact that this overall improvement if you compare 2017 to 2016 is impacts all geographies of course the rest of the world becomes particularly strong, but even in France, if you strip out the Bartin disposal we actually are showing some top-line growth.

On page 13, you have further detail on the breakdown of our turnover. French Water has been doing better.

Thanks to favorable volumes, and marginally improving indices. We started the year with something like minus 0.4%, but those contracts which have been indexed again in Q3 are showing some marginally positive indices variations, which probably mean that we will continue to benefit from this impact for the few contract index in Q4, but more importantly for those which will be indexed in 2018.

And overall of course when we renew water contracts nowadays we have much less commercial pressures that we did a few years back when there was a big wave of renewals. French Waste is growing almost 3%, thanks to better volumes, recycled prices and good commercial momentum and of course leaving aside the impact of Bartin disposal.

The rest of Europe, UK, Germany, Eastern Europe are all doing well. The rest of the world is showing excellent momentum especially in Asia, where China is still growing very strong plus 30% growth year-on-year.

Even though the Sinopec contract impact is been diluted because it took effect at the middle of Q3 2016. For global businesses, haz waste still shows very good developments plus 4.5% sales, whereas increased backlog should lead to resumption of growth for EWT.

And whereas SADE is doing well even in France where there is some stronger demand that we have witnessed in the previous years. On page 14, you can see that the calculations stripping out foreign exchange and perimeter impact.

So like-for-like growth is 3.1%. again exactly in line with Q1 and Q2 driven mostly by commercial and volume growth.

Both contract gains and volume increases on existing contracts are with existing customers. On page 15, you can see that this is especially food and waste, actually in waste we’ve witnessed more than 3% volume increase in Q3.

Don’t necessarily extrapolate this impact. This is driven by the economy to some degree but more importantly by commercial gains, we probably estimate that two thirds of the increase is not derived from the economy but from our gains and new contracts.

A constant effort and perimeter for the nine months gross is 4.1% and both geographies contribute except the US where industrial cleaning is still showing signs of weakness but in the US this is of course offset by a successful integration of the sulphuric acid regeneration business which we both from -. On page 16, we give some color on EBITDA growth again 4.8% in constant currency in Q3.

EBITDA is growing again France as promised thanks to cost management and of course thanks to the better topline growth. For the rest of Europe, Q3 showed a marked improvement thanks to an easier comp and the rest of the world is showing a very strong momentum thanks to the successful integration of Chemos and especially thanks to strong growth in Asia particularly China.

Global businesses is down, that is mostly due to challenging comps in 2016 in Spain in spite of the good performance of hazardous waste as mentioned for the topline. On page 17, you will not experience initial price, cost cutting is of course and remains of course a main contributor to our EBITDA growth offsetting the price impact and the one-off cost and of course ongoing headwind which we have which is not typical to this year which is prior tariff decreases at the times of contract renews.

On page 18, you see how EBITDA growth translates into EBIT growth in a relatively straight forward manner. We had reversal of provisions is up mostly due to the reinsurance payment which was already mentioned in Q1 as you will remember as a weight of this impact is about 12 million.

But also to other operational impact, I mean the improvement of our commercial relationship with some customers has given way to provision reversal and we’ve also had to counter pass the fact that we had over provided for some retirement payment cost in France last year. So this drives a reversal this year.

Equity accounting contributed a bit less than the previous year because we continue to prove the parameter. For example we exited the last 10% stake we had in the – the regulated UK water business.

But the main contribution which is a contribution from our Chinese concessions continue to grow. On page 19, you can see that our current net income is up 4.3% at constant currency and excluding capital gains.

We’ve had less capital gains this year so far than we’ve had in the previous year and of course that this element is not linear, it cannot remain constant year-on-year. The cost of our net financial debt has been stable at €314 million for the nine months driven down by active debt management and the substitution of old cost debt by a newer less expense debt but offset by the rising cost of the non-Europe denominated debt because in some of the countries where we have debt and as the rates are actually going up.

The tax rate is at 25% which is I would say normally low compared to our average which has been driven by the fact that we have, we derive more revenues from geographies where the rate is lower, it does not yet include the reimbursement by the French state of 3% dividend tax which has been abolished by the French constitutional council. On page 20, you can see that CapEx remained once again with very, interesting to note that we’re able to with CapEx does not increase to generate top line growth.

Free cash as I mentioned that is negative that before the traditional seasonal reversal it should be more than adequate cover for dividend this year as the years before. Net financial debt continues to trend down which shows that we’re doing very healthy growth and it is down by €318 million year-over-year at constant FX meaning without the favorable impact of specially account and the dollar being weaker compared to it.

On page 21, we have the similar and discretion showing the debt evolution, since the beginning of the year and ahead of the working capital results was out taking capital into was actually generated €620 million of free cash flow so far this year. All these results make us extremely confident that we will be able to achieve our 2017 results and give us a good momentum as we will be entering 2018.

Thank you for your attention.

Thank you Philippe and now we could enter into the Q&A session. That is an implement [amount].

I have three questions please, the first one has to do with the pricing power, so we’ve seen the bridges, explained to us that you had [effect] is passing on all your cost because inflation and extensions were low. And in some of your businesses your revenue is driven by recycle prices or energy prices, all those things are volatile.

My question is on the more respected parameter, in those activities where you effectively extend the service and prices are the results of the negotiations between you and the customer, have you been able to increase prices faster than your cost or are you still struggling to get pricing power. That’s my first question.

Second question on taxes, there are two developments in France the first one that you touched upon Philippe, is that the French government will pay you back a sum of money for past payments on the dividend tax. Could you tell us roughly how much that this and whether this is a net one-off positive or negative once you take into account the corporate tax surcharge, which I think would be almost zero?

And secondly, if I read in between the lines, you have growth in EBITDA in France, you are continuing to expect to improve things there. Will you add some point have a taxable profit in France and will you then be able to use other tax assets that you have?

And my third and last question will be on FX. Could you please tell us sensitivities for FX at the EBITDA level for the euro dollar and euro pound rate?

Thank you very much.

So Michel, thank you. Philippe will begin by answering the question about taxes.

Okay. So the reimbursement, which we’re expecting probably split between this year and next year from the French state is €28 million plus €2 million of late-interest.

So translate into €30 million one-off on the tax line, which will probably take in Q4 this year. As we are still negative in terms of our integrated tax group in France, we will not pay any surcharge, so for the 30 million is net.

We are still trying to achieve situation of course where we stopping taxes in France using of course, our past NOLs to foot most of the bill. Burt we’re not there yet for variety of reasons if you wish, but the main reason being that over the previous years.

Now we started improving again, but over the previous years are taxable profit in France, especially in French Water has been going down and therefore we’ve now been able to get to situation where the overall tax group including of course the headquarters and most of the costs of the financing of the group would be positive.

About the third question, you could see Michel on slide 11. Globally, the price effect of EBITDA for the group is [indiscernible] for the Q3.

It was only one, if I remember well, during the first semester meaning that this is almost all due to the third quarter to split this statement between pounds, dollars and other, again just received a paper about that, but minimal for pounds is [indiscernible] for U.S., it’s [indiscernible] China minus 3 and Eastern Europe platform. It is, you could find there around the type of minus 9 for UK, plus 4 Eastern Europe, minus 3 on China and perhaps minus 1 or 2 for the dollar.

About your first question, concerning pricing power, Philippe what could you say that.

Well, in traditional businesses when we have many competitors, it’s fair to say we don’t have a lot of pricing power. I mean, as we know at renewal, we have a very strong renewal rate, 90 plus percent that more than enough any negotiation will stop with a price reduction.

Now the whole strategy as a group is to move to areas where supplying field is not as level where we have differentiating competencies where we have specific now how where we give customers guarantee that we will meet certain targets and in those cases we can have a one-on-one discussion instead of formal tender. In those cases we therefore rate some pricing power and the whole strategy of the group is to move the older REIT or those competitive fields which are less crowded and where we can make our prices to a certain extent and this is increasingly what we see new areas where we operate.

When we deal with ____ for example which is on the large wind of this quarter, this is a one-on-one. It’s not a tender.

It doesn’t mean we can price any amount, but it means we get some pricing power back.

Thank you very much. Just a follow-up quick down, what remain on pricing for effectively you don’t see and the dependency on cost cutting in the near future maybe medium term and also if we think about next year what that means is that your inflation and exception should do better, you continue to do cost cutting overall division.

So are you willing to tell us there is an improvement in margins in 2018 versus 2017 if you put all fair numbers together cost cutting and new differentiate with services and better inflation?

Within the process of examining budget so it’s early day, but clearly it is our assumption that in 2018 we will continue to see top-line growth. We’ll have to assess at that level and we will continue to see margin improvement meaning that EBITDA should out grow over the top-line.

For the reasons you indicated clearly and also because we have viewed from today less headwinds and a more favorable comparison base in 2018 that what we had in 2017. Of course headwinds don’t go ahead so we could always have back to prices but so far we don’t see it.

Thank you very much, gentleman.

Michelle, just to correct the answer about the flex impact. I told you -9 for UK on the EBIT level.

For EBITDA level is -18 in UK that is 2 for ____ -3 for China, +4 for New York and the rest is in Latin America to less -10.

Hi, good morning. Three questions from me as well.

The first one I mean just coming back to little bit maybe to be assure of pricing power and I’m wondering specifically on French waste. You mentioned your revenue was up about 3% and that EBITDA increased on cost cutting and commercial developments.

Just wondering if you can tell us whether your margins improves in French ways. And also on a more underlying basis whether you would seem margin improvement in French ways had it not been for the cost cutting that you did.

Just trying to get a better idea of the competitive dynamics and the mix effect you might be seeing there. Secondly, just on the balance sheet, looking out a couple of years and I realize about some of the question before, but I’m just wondering what your latest thoughts are equally have EBITDA target for 2019, but not explicit debt target.

And at this grade I think you’ll fall between 2 and 2.5 times net debt EBITDA in 2019. So, I’m just wondering how you’re looking at this right now i.e is there a level at which you’re comfortable are you considering to enter bigger deals is buyback of the hybrid still the top priority or how well it might you deploy your balance sheet over the coming years.

And thirdly, just the final question wondering if you can give us a very brief update just on the contingent liabilities specifically Nova and Michigan. Just wondering if you’re able to give us any kind of an update on timing of these cases that what you’ve provisioned and your indication of whether or not you’re expecting that these could be material at all?

Thanks very much.

Yeah. About the next question about the Michigan, there is nothing new we already disclosed and discussed with the community.

So, usually opposition we have – very reasonable and contract to do with the big public about the LAD. And then so we still have confident in the issue of this case.

About balance sheet, we are always today in the strategy with the finance announced is announced two years ago. So, growth efficiency with the debt labels table about between €8 million and €9 million we always said.

So, meaning that for our growth we will continue to use all our free cash flow, but we don’t intend today to increase the debt level with the increasing the EBITDA level year-after-year, the ratio compared to the debt will also be different year-after-year. So, there is no news about that in the continuing of our strategy that we already announced.

On French ways, obviously the fact that we have cutting cost and important drivers there as well as the fact that the market overall has been better and that we have registered a series of commercial wings that in our businesses all of them are fully reconcile to discussion, cost cutting is not just one of hedges side, it’s something we will continue to do as any process industry forever and ever. I mean you would not ask this question from somebody representing the steel industry, you should not ask this from us anymore either, I mean.

Especially in French ways, they have been working hard on the cost cutting this year in 2017 they will be reaching 2% of that top line which is roughly twice as much as the average Veolia business. So it’s no wonder that of course the results are improving.

Okay, thanks very much. So I should expect probably on the back of that the margins were up at least after cost cutting as of the nine month period?

But in many of our business if we stop cutting cost it would be very difficult to improve margins. It would take very large top-line increases to offset the natural headwind due to price erosions at renewal time.

And competition pressure.

Yes.

Good morning. I had three questions.

Well I have three short ones. The first is just going back to the waterfall on the EBITDA and kind of going on to the last point on price cost squeeze that you are seeing come through the 104 million.

You have referenced that French Water in particular where obviously you have very low price indexation, price cuts coming through. Is that bulk of that French Water or is that just the biggest component across a broad range of areas where you are seeing a price cost squeeze?

Second question is on the provision of reversals. You particularly highlighted the self-insurance provision reversals of 12 million as being something that would be kind of washing out of EBIT.

But in the past you’ve highlighted the landfill provision reversals also something that potentially washes through. So just wanted to get feel for of the 76 million of provision reversals and fair value changes, how much of that is actually providing a boost to EBIT?

And finally I just had a follow-up on the question around kind of balance sheet, but more in a context of CapEx. Do you think you can be in a position to increase your CapEx next year?

You helpfully gave a breakdown on slide 20 of how much is maintenance and contractual CapEx and how much is discretionary. So wondering whether scope for that discretionary CapEx to start to rise?

Thanks a lot.

Okay. I’ll begin with the question of provisions.

If you remember that we told you that for the first quarter, we suffered 12 million costs in EBITDA linked to a payment of insurance which was provisioned the year before. So we take that at the EBIT level so minus 12 million for EBITDA at Q1, plus 12 million in the provision reversal that was in EBIT because provision was -- the cost was provisioned last year.

So if we exclude this 12 million, you already know that EUR 76 million is EUR 64 million, not far of the EUR 58 million of last year. And you know that we have every year provision reversal linked to our landfill at the end of the life meaning that when we -- you know that during the life of landfilling -- of landfills, we make provision to repair them at the end of their life and after the end of provision we spend some money for [variation] we expect that these amounts at the EBITDA and we take back that as the provisionally all using if the provision we constituted during the [lactic].

So every year we will take back provision we constituted before the end of life of [fitting], so this is normal to have every year doubt to send the several amount to positive number from provision into the land fittings. If we compare the two years ‘17 and ‘16 between 64 million or 58 million this is about to save, that difference between the two years.

For the first [benefited]…

So the first question in the price cost squeeze, French water is a large component but its above, its spread on a number of geographies even because of insufficient intersession of contracts or because of price that at renewal time. I mean in terms of CapEx, which was your third question, you may have remember we have increased our CapEx envelop this year in our purchase or in the authorizations we gave our businesses and they are not so far taking [transitory] nine months into the year, we’re stable which again is a sign of maturity by our businesses they could spend more they know that we have the head room but they don’t.

They are waiting for large profitability enough projects and if they don’t find it they will find themselves through using other people’s money, using infrastructure fund money, which means of course we declare less CapEx. Next year it’s likely that we will spend more on discretionary items if only because there is a new PSY which will stop to build and this will be accounted on discretionary CapEx line.

But the reason of that our asset [accommodate] for the intensive contract in our working while, that is more and more infrastructure forms ready to partner with [other] to final there long-term big investment of these acquisition contract and we could just in that few parts in the [asset pool] and taking advantage of the full pool. So I don’t know if it will continue for long time with such good appetite from the infrastructure forms and we been able demand there [this forms] but if you just continuing like that, we continue to enjoy good growth without too may CapEx.

A couple of questions have already been asked, I would like to drill that a bit to [wish] you understand the waste in France and you been talking about commercial gains and would it be possible to give us some color on what do you think had been the market movement in some volumes, what have been your commercial gains and basically what did you get to start to state it up in three blocks. That will be a question number one.

The second would be you made a comment regarding CO2 early on the presentation. we’re in the middle of the COP 23, do you have any view on what to expect there?

Difficult to tell you what we could expect from the COP23, you know the position of Veolia about this important thing. Greenhouse gas emissions are pollution.

Today, it is costing nothing to pollute and we need to spend money to depollute. In the light of your [nine] months report you confirmed your full year guidance, which is for stable or slight growth in EBITDA.

And should we look at the Q3 increasing EBITDA on extrapolate for Q3? Is there anything we need to be aware of for Q3 that should make us a little bit more worried?

I can think maybe of weather, maybe in the energy services but apart from that -- perhaps some strict quota issues, it’s -- that could work directly, which is not the case today. So we wait for the international community could find a process which could enforce polluters to pay and de-polluters to be helped.

On the west end fronts it’s difficult to answer your question precisely one indication I can give you is that in front as in the rest of our least activities volumes are increasing significantly in Q3 we are at the 3.5% volume increase, which is about double what we have in the first half. So there is clearly a macro impact but there is also an impact of [indiscernible].

And good overall level of our activity including in lands fields which may come as a surprise that is driven probably by the activity around the company it works.

And let me complete the answer. On the appendix, page 33 of the slide show you see the link between our growth in the waste business and [indiscernible] and industrial [indiscernible].

we could think that in our growth of volume for the with business around half of that due to the commercial activities and the [indiscernible] of our teams. And [indiscernible] around the [indiscernible] is due to macro economy meaning [indiscernible] prices.

So that wouldn’t mean basically half of your three and half so 175 would be from macro.

Yes.

Quick follow-up on the question [indiscernible] polluter pay principle and then yet you’re not very exposed on this extra -- condition evolutions of the regulatory framework. Could you give us a little bit of color on maybe the personal exposure you have there to CO2 prices and whether it would be it can benefit area or what type of activity could develop it.

Thank you.

You issued at the time that any dimensional position with [Indiscernible] clearly impacted forward in the case of industry of this group. One of our mission is to de-pollute to help our customers to de-pollute so if the polluters are like today and if polluting is more expensive that they are polluting it will helped us clearly and loudly.

We already take into account is how our project and investment emitting to [Indiscernible] for Veolia after Q1 Euro by certain of CO2 there were lower of capitals and emit. So we feel structural as compared to that.

But in deodorant and or the [Indiscernible] we take profit of such inclusion and taxation, so it is being clearly and being quickly profitable for the group.

I mean this has been the very basis of our [Indiscernible] business which we have built over the years and regulation is always helping us. But regarding CO2 we are already taking a hard look at technologies to capture and to storage as you will too even though they are vacant at this stage.

Veolia is using motor producing waste water, producing waste so we have to take all this treatment of that, that we are taking niche volume to it all the rest of the pollution that we have to take our whole pollution.

My first question is about the impact of contract renewal in the French water business. You reported a relatively small negative impact at the H1 level I remember could you update us about the nine months is it the same run rate as the negative impact increase.

Number two and looking at EBITDA growth you communicate on EBITDA growth excluding FX. I would like to look at EBITDA growth excluding FX on scope and on I think you give all the data in the presentation but I wanted to check I guess we had you reported a decline at the H1 level but looking at Q3 only I calculated 3.7% increase in EBITDA ex-scope on FX and which I would like to confirmation from you.

And in the light of your nine months report you have confirm the full year guidance which is for stable and slight growth in EBITDA and should we and look at the Q3 increasing EBITDA on extra polluted Q4 is there anything we need to be aware on for Q4 that should make us a little bit more worry I can’t think maybe of whether maybe in the energy services but up from that I would love your view. And last question is on the restructuring initiatives you announced for your French water business, I think this was in Q2 and could you tell us what happened since you [big industry] in July and what are the main steps that can detect place or this restructuring to happen.

And when we can we legitimately expect to get may be some quantifications on this efforts and, the quantifications we have at the moment is provisions you took at H1, did you take any new provision in Q3. Thank you.

I will begin by the last question, so we engage the complex of that such that the plant in France as you know, any new position in Q3, we don’t expect to have take sort of one in Q4 also, so estimate we did, we made in June is [H1] today. So don’t impact to describe to give more provisions as the demand of the plan.

Right from the number [even] for the negative advise, but in the advise, so we’re going to next step, we’re negotiating, with the public authority of [in] France as it is rule and we expect to have the answer of this authority at the end of the year to it in place of the beginning of the next year and see probably and for next year, the [significant] to the plan. So nothing new and just the advise we needed before to negotiate with reasonable authority.

About your question on EBITDA during Q3, yes plus 4.8% that come from addition [rate] and plus 3.5% at the 3.2%, excuse me at [through] exchange rate. Excuse me, again plus 4.8% at [exchange rate] plus 3.5% at the current exchange rate plus 3.2% like for like meaning.

At constant perimeter and constant exchange rate.

Like for like, is it okay for you?

Thank you.

The third question was about…

Cost renewals in French water, so the cost we mentioned or as the price decline we mentioned in average for H1 still apply for Q3 since the beginning of the year, when we renew contracts now a days the average price decline is about 4% compared to something like 20% in the year 2010 to 2015. So it’s just spread its 4% and if you extrapolated which will not necessary is again that if you extrapolate this figure, knowing that the average contracts ratio is 10 years that translates into yearly headwind of 0.4% which is still significant but with something we can deal with, using our cost cutting exercise.

Regarding Q4, should we expect surprises? None that we see, I mean we’re only one month into the quarter of course but so far so good.

We don’t see any specific reason for which we couldn’t stay on the present growth path both for topline and EBITDA.

Yes, winters till begin so we’ll see what we will have in terms of whether for our energy activity for snow in Central Europe.

Good morning everyone and thank you the question are remaining. The first one is on topline in some specific areas in the world.

So that we’re seeing a strong performance notably in Central and Eastern Europe today and in North America today. Central and Eastern Europe seems to be held approximately by the priorities we’re keeping contract and whether.

So you have double digit in terms of revenues. Same thing that will be done in North America but I think helped also by – could you give us a saying of where you would expect the revenue growth of those areas to be able to stand on an organic sustainable basis for the coming years.

That’s my first question. Second one is that you’ve mentioned that you encouraged around 103 million of negative transitory and one-off cost.

You had flagged that you would be saying at this year or previously but do you see any of those kind of cost emerging also next year? And then the last question, one of the more technical, you have a 25% stack rates in the nine months of this year.

I wonder if you could give us an indication of what you expect in terms of tax rates for the full year and coming years. Thank you.

The first question I begin with Eastern Europe, that it is there in Eastern Europe an lot of organic growth to do for this area. That it is still a lot of water or energy activities in more than that ways activity which are still out chose to private companies of the selling companies like Veolia and then yes we continued to hope and to see strong potential of organic growth through privatization in lot of cities and even capital cities in these battles of –.

And about the waste management, today the waste treatment is mainly on a very large part through lens. It is and also in this part of the world we’re benefitting so we will certainly have some opportunities for the ins- but also recycling of – switch.

And last but not least, as – activities on the region and also in - we will continue to develop these activities because more and more the – is stronger and pushed the polluters to bring as of the west to special frequent plans. So we will still have this battle of the world.

So to me that the root organic growth. And this keep in mind that city like Bratislava but also cities in Croatia, in Serbia, other cities in Bulgaria, like Sofia, and in Romania, then Bucharest have also propose to have some good opportunities.

And in North America, through the waste recycling not only treatment but recycling as we are doing with Chemours in -- for other type of materials there is also large room for recycling. Just on few economical basis without waiting for any factories or subsidiaries.

And we have strong project in that way. So we also have opportunities in this country.

And as we have in terms of energy efficiency microwaves and -- in North America.

To be more specific. Since the beginning of the year, organic growth has been 6% in Eastern Europe.

It’s been driven partly but not only by a favorable climate in Q1. Sales have been slightly down on an organic basis in the U.S.

but in this case climate has not been favorable. So we had a very warm winter in Q1.

And also as I mentioned, we still suffer from, we still struggle with our industrial cleaning business, which anyway is not the, has never been very profitable. But top-line has struggled a bit.

In terms of tax rate, we will end up the year probably below 25% because of the €30 million reimbursement of the dividend tax which I mentioned. But that is slightly artificial and 20% 25% is not our long-term guidance.

long-term we should stabilize probably a below 30% around maybe 28%which is where we were the previous years.

For the second question the that €103 million of non-recurrent EBITDA profit we have last year and we have to compensate this year because we don’t have certain non-recurring EBITDA profit. At the end of September 2017, I think we have parts of no available issue such non-recurring EBITDA profit.

So not have that to compensate this year compared to 2018 with 2017.

And we will have much easier comp.

At the end of September.

Yes, hi, good morning everybody. Thanks for taking my questions.

I’ve got a couple of questions. Just a quick update on the sales effort that you have you had initiated at the beginning of the year €40 million of extra spend.

Could you give us an idea about where we stand on that? How does your pipeline look over the next 6 to 12 months?

And are you actually already starting to see some help from the recent contract wins. And secondly, just on the French labor reforms, it would be helpful if you could give us an update of where things stand now?

Thank you.

Okay. You remember that I decided to spend €40 million on an annual basis for reinforcing our commercial forces in the year; these forces are of course in place for the beginning of this year and already brought fruits for Veolia because the good comments successes for the big projects you could see on the slides, but also for a lot of much smaller projects we don’t put on the slide is clearly linked to this reinforcement.

We’ll continue with this force. We’ll increase this next year, so meaning that again the comparison between the ‘18 and ‘17 we don’t -- we’ll not have any change, but I’m very happy with this decision because offshore it helped us a lot to enjoy this good growth -- organic growth but not only because this force is also helping to set some good -- certain target and though we continue on the same speed.

These new commercial forces help us particularly to duplicate what we are calling our key offers in new geographies making a bridge between the acceptance in certain original geographies to the new ones which are indeed our key offer, we’ve around 22 of them which is -- which are developing in new geographies. The second question was about?

French labor reform.

French labor reform, now this reform is mainly done for small companies but it helped also the biggest one. One example is through our restructuring plan for the French Water business, I told you some minutes ago that we’re now to extend and discuss with labor authorities before the law, the labor authorities had taken into account the profit level of the company after the world level of profitability before to give its approval on such plan, now the law asked this authority just to take the profitability level at the French level early in that world level, meaning that if we have difficulties in French we have more facility to get the approval from the -- from the labor authority, it’s one example.

There is few other ones. So, this law is going in the right way for sure.

First for one year clauses like this one but also more globally with the -- I would say they moved out of the country and the way the global population is seeing economy and enterprises and the link between labor and capital.

Just a quick questions from me if I may the first one is relative to the French waste business I was looking at the revenue growth at constant scope, it was 4.1% at the first half, is 2.9% at 9 months, so I was wondering if you can just give us the sense why of this [acceleration] Q3 official in the light of the comments you made about volumes. The second question is regarding the shift and contracts, can you just give us an update where we stand and regarding CapEx you mentioned your criteria in interest offering for such a fund, can you confirm that you have no idea to change the [criteria] you have to adopt to this new world, you know as a example you asked for very high rate after returns there.

And last can you give us guidance in terms of the expected financial charges at the end of the year. Thank you.

So for your third question, as I [confirm] that we keep completely this area for the [interest] and for the group. I remind you that we have three area, one is on the globalize of the project, we target in IRR and it will at last for globalizing the project.

The second one is the pay back area, we want to get back initially in the strength in our cash flow of this less than seven years and then one is a shorter [area], we want to have all this evolve at the third year of operation of any project such to what [levels]. And this is same if we invest, all the contraction of this shared in business with an interest of that.

Regarding financial chargers, they are linear, so you should expect about fourth third of what we have for the first nine months, a bit above €400 million. In that field, we’ve not signed an agreement yet that we’re negotiating in a much better climate with the municipalities so we have no doubt that we will be able to announce an agreement perhaps early next year and regarding French waste there is no single reason, no single impact explaining why things are better obviously the economy must have, we don’t see French industrial output growing very significantly but still the climate being better, I guess it does help volume and also we been commercially active.

As we know waste in France in many, many countries is an extremely large number a very small contracts or even just not contract but commercial relationship and therefore it’s difficult to track precisely what drives as this improvement in volumes where, just [have] beneficiary reserve it and we can that this situation continues into the next quarter, of course.

Excuse me, sorry may be I was not clear, my impression is actually is the other way around because you, the 2.9% growth [scope] in December and it was the press release of the first half, you said 4.1% and constant consolidation scope, for waste in French.

I’m sorry, you’re right, my mistake. But the answer remains the same.

Okay.

Meaning, there is no possibility for us to track it precisely, but you’re right in France the deal around compared to what we have overall. Other questions.

Yes, good morning again. A very quick follow up on your hybrid debt.

Could you tell us if you have reach the decision on what you plan to do with that and if you counter us that. Can you remind us what the time-table is for the communication you’ll have to gave to the holders of that hybrid of debt.

Thank you very much.

For sure. So, we will reinforce this hybrid debt at the end of March towards the beginning of April.

April, so we’ll announce in March.

So, we will reinvested, how will take it is not decided today. We could that use the critical, we could launch new hybrid, we could use commercial paper.

So, we will see at that time what will be the most interesting thing for Veolia to do depending on the conditions we could get, depending upon the project at that time. So, and I had also we could reverse i.e one debt and decide how we’ll replace it, not at the same time we have time to that.

And today, the situation, the final situation of Veolia leave us -- for that case what I would say pricing poor meaning that we will see what this propose to us at that debt or during the bones after, we are trying to decide we are not in hurry to decide how finally in we will reinforce it. So, we don’t need to take a quick decision – for the group to wait for the different proposal where we get in support of this hybrid.

Few additional comments Michel. On one hand, we absolutely don’t need a hybrid to support the rating that’s very clear.

On the other hand, we’ve seen conditions improve very significantly to subordination premiums have come down to something like 1.2% in recent examples so that makes the hybrid less than it is to be. On the other hand of course our own signature has improved very significantly, we are – our CDS is now barely above 30 basis points.

So that would make an issue whether over hybrid or bond more attractive. And of course last but not least, we continue to have the possibility to finance our sales at the negative actually at present on 30 basis points rates on the commercial paper market which is also very attractive alternative, meaning not issuing anything either a hybrid or new – we keep our options open and of course we’ll see what we need to do, if and when, I mean, when the time comes.

And as Antoine said, not necessarily as early as April.

Thank you very much gentlemen.

Regarding Anna Maria’s question, there is one element which we need to keep in mind is the fact that in Q3 paper, recyclate, which is an important component of our French sales has going down and that’s probably the main driver into slowdown, which you have observed. Sorry for not being on that ball earlier.

I just have a quick question on your construction activity. Can you update us where do you stand in terms of margins in this activity and also where do you stand with the downsizing measures you implemented?

When do you expect the trough to be reached? Unless I’m wrong, I see a further decline in Q3, while in Q2.

You were having a more positive message on this activity? And second question, which is related, can we have also your opinion on what could be the outlook for the waterworks activity?

You mentioned an improvement in France, but deceleration again in, at the international. So can we have a bit more color on these two activities?

Thanks.

So construction activity, we’re done with the downsizing. I mean, we are fit right now.

At the level, we’ve been targeting and this is been true for the past nine months. Because most or the restructuring took place outside of France, and therefore, we’re very quick to achieve.

I would say that our underlying margins are starting to improve but this is being hidden this year by the fact that we have very favorable comp in 2016. We had the successful termination of some contracts and the result of earlier litigation, which benefited to 2016 earning.

So we expect that this year should probably be the trough, especially as activity seems to be picking up or at least our backdrop has started to improve, it’s 10% higher year-on-year. On what you call the waterworks remain the pipeline activities of SADE, I imagine, indeed the activity is better in France.

It’s a bit counterintuitive because you wouldn’t expect local authorities to spend more on works. But they actually do.

So we’ve been doing well in France. That has enabled us to more selective and going after international activities and the new management in SADE, which has been put in place a year ago now, is taking a hard look at some of our geographies where we had activities that clearly not enough margins and sometimes a level, a measure of risk.

So we’re not doing after sales per se, but taking advantage of the improvement in France to be more selective international.

So I think we could close our call. Thank you very much for, and for having [indiscernible].

And of course, the IR team is actual disposal for any explanation you will need. Thank you very much for your presence.

And have a good day.