Antoine Frérot - Chairman and CEO Claude Laruelle - CFO Estelle Brachlianoff - COO

Vincent Gilles - Credit Suisse Vincent Ayral - JP Morgan Emmanuel Turpin - Societe Generale Olivier Van Doosselaere - Exane Philippe Ourpatian - ODDO BHF Baptiste Cota - Goldman Sachs James Brand - Deutsche Bank Anna Scaglia - Morgan Stanley

Good morning and welcome to this presentation of Veolia Financial Results of Q3 Ended First Nine months of 2018. I am this morning with Estelle Brachlianoff our COO and with Claude Laruelle, our CFO.

I am on Slide 4 of the slide show. The nine months results are very satisfying and marked the continuation of sustained revenue growth and a clear acceleration in the progression of results.

The results for the third quarter are particularly solid. Revenue is up 7.8% at constant ForEx.

EBITDA is up 9.4% at constant ForEx. To obtain the results at current ForEx one can see clearly views then by 1% because the exchange rate impact was less in the third quarter results than in the first half of the year.

The revenue and the EBITDA growth achieved in this third quarter are the strongest since 2014. Concerning revenue.

Waste volumes continued to show strong growth. Let's talk on 1% of Q3 and plus 12% following the first nine months.

The weather was favorable for water volumes in Europe in Q3. Pricing decisions for Water in France again improved slightly, plus 4.8% in Q3 plus 4.6% in the third semester.

Construction activity rebounded strongly in Q3, plus 10.6% while it's had been week in the first half of the year minus 5.7% because of the late start of some projects. So this is the 8th consecutive quarter of strong revenue growth.

This is mainly due to organic growth which is up 6% at constant scope and ForEx like-for-like. Thanks to this growth, EBITDA accelerated its production during this third quarter.

At €745 million, it grew by 9.4% at constant ForEx. It is a clear acceleration even in comparison to the first semester, which was already up 6%.

This excellent performance is due to revenue growth, of course, but also to cost savings. With €80 million of savings of Q3, we are perfectly unpacked to reach our objective of 300 million for the full-year.

I move to Slide 5. These are very good results in Q3 and hence the performance for the first nine months of the year, while these nine months revenue grew by 6.6% at conference ForEx and 4.3% at current ForEx.

And EBITDA grew by 6.9% at constant ForEx and by 5.1% at current ForEx. 70% of this growth is the result of organic and 30% is due to small acquisitions, as a consequence EBIT increased by 9.8% for the first nine months of the year and current net income increased by 20%.

Gross CapEx which fuelled this strong growth over the past year slowed a bit in Q3. Financial debt at the end of September was €10.5 billion including the refinancing of the hybrid last April for €1.5 billion, but at the end of December the group’s financial debt will be significantly below €10 billion before the receipt of payment from the sale of Transdev.

This is thanks to the turnaround in working capital and good control of investments. In other words, excluding the reimbursement of the hybrid and including the payment of Transdev the financial debt of the group will be around €8 billion, an amount that is comparable with this year’s.

Moving now over to Slide 6, the third pillar of the current strategy of Veolia is growth. It is now developing at the full speed.

First, the rate of renewal of our contracts is still very steady. These renewals are taking place today essentially in France and the pricing for these new contracts are declining compared to the previous ones.

Secondly organic growth is the principle model of our projects; from our organizational customers it is happening in all geographies including France with for example the base effect in Bordeaux with the compact waste water management for 1 million. For our industrial customers it is mostly -- that it is mostly outside of Europe, which are riding the books.

The mining sector has been particularly dynamic since the beginning of the year and is turning to Veolia for the clearer extraction of raw materials. Furthermore, waste sector is still showing strong growth.

And finally the oil and gas sector is once again sturdy. This organic growth is complemented by small acquisitions which are reinforcing our geographic freedom in countries that we believe have good potential for our businesses.

These small size acquisitions have less expenses then larger targets. We pay them between 5 and 10 times EBITDA before synergies and they’re also easier with effect.

Moreover, let me remind you that we’ve signed an agreement with German group, Rethmann for the disposal of our remaining 30% stake in Transdev for €340 million, the drilling should take place as of in December or in January after a [Braunschweig] process. I move to Slide 7 now, the second pillar of our inherent strategy plan is cost savings with, €80 million up-selling in Q3 and therefore to handle 2018 year for the first nine months of the year, we are perfectly on track to reach our objective of 300 million by year-end.

In the current cost-saving plan, it is operational efficiency and especially continuous improvement in our industrial equipment and plants that are contributing the most. Because this continuous improvement relies on the creativity of our operational teams as well as the mobilization of the group for the diffusion and implementation of improvements in all of our geographies, it provides a deep reservoir of cost savings for the future.

Cost savings perhaps will therefore continue at Veolia in the coming years, and we will provide the details of our new multiyear objective for cost savings during the presentation of our annual results in February of next year. During each of the past 7 years these savings are never been less than €200 million per year.

There is no reason to think it will not be the segment in the coming years. And then Slide 8, this good very good third quarter and the communities performance during the first nine months of the year allow me to very easily confirm our objectives.

I now hand over to Claude Laruelle, our CFO, who will provide details of these results. Claude, the floor is yours.

Thank you, Antoine, and good morning ladies and gentlemen. Moving on to Slide 10, I will give you a more details on the figures.

As Antoine told you this quarter is eight quarter of consecutive growth, it has been a very strong quarter in terms of growth and results. You have the main figures on the slide, all very good and growing bigger as we go down to the P&L, as we have an acceleration of sales and EBITDA with the good operational leverage.

Focusing on growth in this full CapEx, as Antoine told you where the inflection of the CapEx increase in Q3 at the plus 8%, and as CapEx is filling the boat of the group in 2018 but also for 2019. We have a different seasonality than last year especially on the growth CapEx and we expect Q4 to be slightly down compared to last year we should end the year at slightly above €1.8 billion.

Regarding the net financial debt, we will continue the financial discipline that has been the mark of Veolia for at least last 5 years and I can confirm that we will keep that well below €10 billion at year end before Transdev disposal. Moving to Slide 11, you can see the dynamic of the quarter with the acceleration of the growth in Q3, which is we must be able with the 7% plus 8% increase in our revenue in Q3 and again a very good operational leverage leading to an EBITDA growing at 9.4%, whether it comes from it comes first of all from France with a rebound in Q3, the robust Europe and also a very strong rest of the world Asia and LatAm contributing very much to the double-digit growth regarding Q3.

Keeping in mind that Q2 was very strong due to the energy business in the U.S. You have on the slide the strong recovery of the global businesses, due on side to the rebounding construction activity and also on the other side to the strong Hazardous Waste business.

If you look at the increase in revenue, excluding construction and energy prices that are more volatile. On the slide you see seven quarters of very sustainable growth at 5%.

Moving on to Slide 12, you have this split by the main geographies of the nine months 2018 and you see the pickup in global businesses, the double-digit growth in the rest of the world and a strong Europe, so it’s a same trend, it’s a combined trend of the different quarter. Moving to Slide 13, you have the usual revenue reach which is pretty much the same trend has H1, with two third of organic and one third coming from tuck-ins.

The biggest effect is coming from the commercial and the commercial momentum of the group and good volume and good works. We have, as Antoine we had very good volumes of waste and also we’re the customers producing more volume in water activities.

We have also higher energy prices, leading to an increase of €130 and also major impact from recycling which is coming mostly from paper after the Chinese ban. Moving to Slide 14.You have the very strong growth on waste revenue which is like H1 roughly speaking 10% increase coming half from organic with very good commercial positioning and half from tuck-ins.

What is remarkable is a 4% increase in rates volumes constant scope coming from old geographies. I would touch on the few highlights starting by France.

France revenue is 1.7% with very good volumes coming from landfills and incineration. UK, we have excellent PFI performance leading to a strong increase in our revenue.

Latin America, revenue up 43% coming mostly from new contracts and the integration of Grupo Sala and on Hazardous Waste, we continue to have very stronger commercial momentum leading to 9.3% increase in revenue. Moving to Slide 15.

You have the usual EBITDA bridge with the same trends as H1with EBITDA increase coming from the increase in revenue and the good operational leverage and also coming from cost savings. EBITDA is going like revenue two-third organic and one-third from a small acquisition and tuck-ins.

We have the impact of very profitable organic growth plus 89 million. We have also an impact of recyclates impacting revenue and also impacting EBITDA and energy prices, altogether being negative €64 million.

But we have a very favorable impact from cost reduction as Antoine told you 228 million. As we said, we are now at full speed on the cost reduction, cost reduction remains very important topic for the group to offset most of, all the headwinds we have.

It’s part it will be part of the DNA of the group. And with the good results, we are this quarter -- we can confirm the 300 million targets that we have set for 2018.

Moving onto Slide 16 to 19, I will detail our main operation by geography starting by France. On the Water business, due to the hot summer we had improved revenue, improve the volumes.

We told you in H1 that volumes were down 1.5%, we are the recovery. So now we are only 0.7% negative.

On the price effect, we have a better indexation, so we see start of a pickup in the escalation formula 0.8% in Q3, total 0.7% that should lead us to a better inflation mixture. And EBITDA is up driven by the impact of the restructuring plan Osons 20/20 with more than 400 people were left the Company so far.

On the Waste side, revenue up 1.7%, but EBITDA is slightly down due to lower recycled paper price and higher fuel costs. Moving to Slide 17.

You have the picture of the Rest of Europe, which is a good performance in all region starting by Central and Eastern Europe, where the favorable price effects and a good summer on the Water business with a pickup in volumes. In UK, the excellent plant operational performance of PFI, we have 94% of liability, which is remarkable and its driving revenue, but also EBITDA a lot.

Northern Europe is benefiting from the tuck-ins in Sweden, Netherlands and Germany with EBITDA and revenue growing double-digits. Moving to Slide 18, you can see the solid growth in all geographies.

Starting with Asia with 3 main countries were contributors. China continued to be very dynamic plus 13.5% in revenue mostly coming from Waste.

Japan is also quite strong and I would like to highlight here the start of a new contract in Japan, the Hamamatsu water. It’s a new scheme that’s why implementing in Japan, which is close to the long-term contract that we have in Europe that should lead to more water development in Japan.

Latin America continues to be strong with new contracts and the integration of Grupo Sala. North America as you remember we divested our industrial cleaning business in Q1 so you asked to compare the performance of North America, we’ve to look at revenue like for like, here an increase of 13.1% with a strong energy business in Q1 and new facilities and good volumes leading to strong revenue growth and EBITDA growth as well; we’ve steady growth in Pacific and Africa Middle East as well.

Moving to Slide 19, you’ve the picture of global business -- global businesses, first of all with a rebound in construction, VWT being up 3.2% which with a backlog of close to 1.9 billion; as Antoine told you the oil and gas market is coming back, step by step, but we had new bookings on the oil and gas market and desalination market as you know is very active, we should be able to announce good news under desalination market pretty soon, now we’re -- as we’re well positioned on three major projects. Hazardous waste, we continue to experience solid growth due to a strong commercial momentum; one more comment on the multi utility industrial contracts in Europe which is up 13% thanks to good volume and new contracts with Arcelor Mittal in Southern France.

Moving on to Slide 20, you can see that EBITDA growth generates higher EBIT growth. Depreciation and amortization is stable; we’ve less provision reversal than last year as we told you in H1 and also we’re higher contribution from our JVs.

This translates into an increase of current EBIT of almost 10% at constant currency. On Slide 21 you can see the EBITDA translation into net income; the cost of the next financial debt is going down, despite higher debt due to a very dynamic management of our debt and anticipation of the hybrid repayment.

The next capital gains remains at low level and income tax expense is increasing like the earnings before tax with a rate of 24.3%; this leads to an increase of 20% of our current net income at constant currency. Moving to Slide 22, we’ve already talked about CapEx and here you’ve more details about CapEx, the maintenance CapEx are stable year-over-year; the growth contractual CapEx are increasing and is fuelling the growth of the top line and the discretionary CapEx are sharply up, mostly in Asia preparing the growth of the group in 2019 and 2020.

As we also have a seasonal working capital and excluding the seasonal working capital valuation net free cash flow is at €491 million after nine months which is in line with our objective. Looking at the debt you see a slight decrease in the debt compared to H1 including the 8 week repayment of roughly €1.5 billion again I can confirm that with working capital we were sold and the good management of our CapEx the debt will be significantly below 10 billion at year-end the pro forma basis follows.

Moving to Slide 23, you can see the generation of net free cash flow before the seasonal working capital and if deduct the working capital from the net financial debt you understand that the debt will be well below €10 billion at year-end before Transdev disposal. Moving to Slide 24, with the solid growth top line good operational leverage leading to a stronger EBITDA growth and good management of our CapEx and the debt is being under control we can fully confirm our objectives for 2018 and 2019.

Thank you for attention.

Thank you, Claude. So ladies and gentlemen, we could go now to the Q&A session.

So, please ask your questions.

I've got two questions. The first one is on the good momentum that you are showing in Q3, a clear acceleration of downturn this year metric.

How much can you carry into Q4 and maybe you are on the split between prices and volumes between the different divisions, but in general to trying to get to understand why you seem you have done better than sort of your direct competitors or peers? And my second question is on cost cutting, obviously, you give us a target for 2018 but you are also talking about there again some form of momentum going into 2019 and 2020.

Is it reasonable to assume that the number of 300 million maybe achieved as well in 2019?

About the growth of Q4 we are just one months of the 3.7 this last quarter of the year. So it is perhaps a bit clearly to review the full results of the fourth quarter, I think we would tell you is that as the fact of the it is exactly like the Q3, but we still have 2 months and it is a bit early to give you the result before the work will be done.

But we are to date on this impact. And about the cost cutting, I explain to you that you have this to probably that it will be at least 200 or more than €200 million cost cutting every year, not €300 was probably a maximum we pushed to compensate them advance in 2017 and so €200 will be too much and 200 to that, it is a good range volume I believe.

A couple of questions here and the first one is regarding Waste. We've seen higher power prices, and I wanted to understand basically what it was, the volume exposure you got to these higher power prices, giving you hedging, as I would expect potentially further benefits into 2019.

So if you could give some color on that that would be very useful. Similarly, talking this time about the margin squeeze you saw on higher coal price in the first part of the year, we would expect this to be better next year.

So understanding the quantum, the latest estimates on this margin squeeze you have been suffering. And finally, you made a comment on the E&P's back.

Basically, I mean, we and, I guess, you have been waiting for that for a while. Could you tell us a bit why it's now and then maybe some consideration on how sustainable it is?

On the electricity, as you know we’re not producing only electricity from waste. And I will give you two figures on electricity.

We’re filling 19 terawatt hours upcoming from the waste activities and 15 from the energy business. Part of the 16 is 6.5 which are cogenerated.

So the dynamic of electricity is different with other competitors. Out of the 19 terawatt hour only 8 are exposed to market prices, 2 terawatt hours from waste, 1.4 in the UK and 0.5 terawatt hour in France, the rest of it in France is sold to EDF with a feed-in tariff.

What we do in terms of electricity policy? We hedge part of it, we hedge it one third year and plus two.

One third in one year in advance and we keep roughly one third toward the years to come, to benefit from the market price. So what you have on the electricity market.

You see a gradual increase in our electricity revenue due to this hedging policy. We give you an example because we had a increase in the UK, we’re the biggest of roughly €5 million of electricity EBITDA.

Thanks to the hedging policy. I was talking about leading part of the electricity free in 2018.

So that should, so and if we look at the forward for electricity prices, because you have a strong effect of the coal price, you, we, and coal price remains high, what we see is continuous high electricity prices in, forward. The way, about the coal price, so the coal price, so regarding the coal as we told you, we had a coal price in Central Europe with squeeze in H1 of €20 million.

We restocked the heating season and we, as we have negotiated the prices for the year, we, and, but the heating season in Q4 much smaller than heating season in the start of the year. The impact will not be seeing very significantly will be roughly €5 million to €7 million in Q4.

On the other hand, we are renegotiating with the authorities, local authorities, the tariffs for the next year. So we will increase the tariffs taking into account, the coal, the increase in coal price, so the tariffs will be better next year.

And for your last question about the oil and gas sector, yes, it is coming back to that basic, of course the link to the price of oil, difficult to tell you. And probably, you are better placed than this would be to see differences certainly evolve or not what we feel by looking at the investment of the oil and gas company, we profit from them.

It is that we think the oil and gas companies are thinking it will be sustainable.

Thank you. I just wanted them to make sure I understood something proper on the power price.

So we’ve been saying, out of the 19, there are 8 terawatt hours exposed to power, and it’s hedged one-third, one-third, one-third, so we have basically about 2.7 terawatt hours, however, you’re hedging. And so if the fourth term move by 5 to 10, that means basically up to 26 million of EBITDA impact every year.

Are the full 8 exposed? That’s just for me to be sure I understand that properly.

I mean you have to look, first of all, at what we produce. So we were talking, first of all about the 8 terawatt hours that are exposed to market prices.

Is it correct? Yes.

So then we generate next year additional revenue. That’s correct.

Good morning everyone and few questions on my side. First of all looking at the operations on the waste business for start, you had a 4% growth in waste volume in Q3 year-over-year.

Could you tell us how much of that was held by volume linked to construction and demolition? Second your friends at Suez were kind enough to give us their view about what would the water tariff indexation look like early next year if all the component of the baskets were to stay at current levels and did you do the same calculation could you share your conclusions with us?

And third question, at the H1 stage on the net debt the conclusion regard towards that all in all we could see net debt below 9.5 billion, and your message here is that net debt could be strongly below significantly below 10 billion before Transdev so that’s about -- that’s basically mean significantly below 9.6 I wanted to see that there was trending message on net debt should be basically below 9.5 billion, 9.6 billion at the end of the year? And finally -- and just to make sure there’s no change in the message finally your guidance is confirmed for this year, but -- on your guidance at the EBITDA level, you got to question at the H1 stage I am trying to make you compare your expectations for the net earnings level with the current level of consensus, and the answer at the H1 stage was bit open ended, bit confusing for the market I wanted to reiterate that question to you and see how you feel with consensus level at the net earnings right now for full year ’18?

Okay, we will share the answer Claude. I will begin with indexation formula on Water in France.

Our formula we talked about the set back -- I tell you the theoretical formula will give us globally around bit more than 2% for the next year, but in the formula we’ve also the -- as a fixed box around 16% or fixed amount of productivity improvement we’ve to deal through the prices, through the customers and that is around I would say around 15% to 20% of the global theoretical formula and at this the contracts are -- the prices are not indexed all at the 1st January, that could be a split between the euro. So all in all with that, we think that for the average evolution of our tariff for all-our contract in the water in France it will be more around 1.5%.

About…

About the Waste, so regarding the Grand Paris, the Grand Paris is not only as you understand the method construction, which is leading to waste volume, but it’s also the construction of many, many different buildings in the Paris region. We have 220,000 tons of waste coming from the what we call the multiyear activity which is up 11% compared to last year that is increasing the waste volume in France by 0.7% and globally speaking the waste volume of Veolia by 0.2%, so the one side effect is in the 0.2 at the global level so for the nine months.

About the debt level at year-end, we say significantly below €10 billion. And if we got the €340 million from other it will be than significantly below €9.66 billion so what is significantly a bit too early to tell you precisely of course because it is dependent precisely the amount of production where it can get all and the waste of our new investment so it will be around I would say 9 point higher it is why, I told you that excluding the reimbursement of high grade it will be around 8 billion.

So, yes, if we got them a year past Dave then it will be and before the end of the year it will be around €9.5 billion and then coming to your last question about the consensus. First we understand that the market will consist of 2018 EBITDA is slightly below €3.4 billion there is strong first nine month of the year lead us of course that we are in the rest to achieve these consensus.

Is it clear for you?

Yes, it's very clear at the EBITDA level and I think there is a little down that you will reach your guidance on the consensus as well. My question was going down further down the P&L and we see that net earnings which can be much more volatile?

Yes, just on the net income just now we are 9 as we said with the EBITDA of later into net income we are in the same trend so that there is no doubt that we are still in the right for the net income as well.

So for us consensus is around €605 million for natural EBITDA that I gave I compare but we think we are still right to achieve that.

If I may I would have four. The first one I will ask to Slide 15 and a usual part of it the EBITDA bridge that we've been seeing in the last year is the negative price effect net of cost inflation on EBITDA so minus 93 at nine months '18.

I was just wondering if it would be reasonable to believe with better indexation and we seen for example, the evolution on French Water, if this number might actually come down in the years ahead. Second question is on Argentina.

So have some exposure to that we’ve seen other companies adjust their accounting for that for high penetration. I was wondering what’s your stance is there and what you’re doing.

Third one is coming back to what you mentioned on efficiency targets to be provided in February, I was wondering in line with the previous messaging that you been passing that the focus will now move on additional operational efficiency rather than headquarter cost savings -- for lack of a better word. I was thinking, as you're trying to improve the initial efficiencies could we hope that on top of cost cutting there could be a positive effect on top line as well, if you could come to a better yield of your industrial installations and then my last question, is coming back to what you mentioned on your sensitivity and exposure to power prices.

As you said you still have a significant chunk of your French incinerators on feed-in tariffs with EDF, I suspect that those one should mature in the coming years and you should drop back on that one on market prices, I was wondering what we can expect in terms of an effect of that.

Better if -- starting with the Page 15 question and the EBITDA bridge. As we told you the escalation formula is very -- may not pick up, so that we note have a significant impact at the end of Q4.

So it will not change the trend that we’re seeing from the price cost in the bridge at the end of the year. Regarding Argentina, we have a very limited capital implied only €40 million and we’ve not implemented yet the hyperinflation at the end of Q3, because it’s very complex process.

We will implement the process at the end of the year but we have made such accumulation. The impact is very limited, it will have maybe a bigger impact on the revenue side but EBITDA impact would be roughly €5 million to €6 million with hyperinflation calculation on the IFRS rules.

On efficiency Estelle will comment, we can complete in terms of operational efficiency.

In terms of efficiency -- Estelle Brachlianoff here. In terms already make sure of industrial efficiency and cost cutting.

So let’s not call it cost cutting. I think it's a wider thing.

It's roughly 3 bps of purchasing as well SG&A, as well as operational efficiency. So it's really the mix of the three which ends up with the global results and how we could compensate for our price cost.

So really cost cutting should be probably replaced by efficiency plan rather than purely cost cutting already.

In terms of sensitivity of the waste energy business in France, yes feed-in tariffs with EDS, so it’s a long-term objective to be at market price and we will come back to you with more, many more precise number on energy prices and the impact, the detailed impact on energy prices next year with Ronald.

Did we answer all the questions of Olivier?

Yes. Thank you very much.

Three questions from my side. One, could we just -- we have one figure, which is the organic growth of the EBIT when you mentioned it at constant ForEx and current ForEx, but just to have the real organic growth of the Q3 and the nine months at the EBIT -- joint EBIT level.

That's the first question. The second one is concerning the free cash flow.

You are quite confident in the way that debt will be down significantly at the end of the year. It means that you are quite pretty confident also in the way that you're going to manage your working capital requirement, which is partly affected by also the increase of your business.

What could be the main trigger to reverse, except the traditional seasonality, the part of this working capital which is linked to the increase of business? I mean, how are you going to manage this part in order to be by far lower than the figure in the nine months?

And last question concerning the operational efficiencies. We have well understood that there is a swing between pure costly -- I would say, cost cutting by layoff to something which could be more industrial efficiencies.

Could you just -- as you mentioned the figure of €200 million per year, could you just a little bit elaborate about how the process has already started? Because you mentioned in the formal presentation that 10,000 units has been benchmarked.

And how you're so pretty confident in the fact that it could be linear when we are discussing about operational efficiencies, which are mainly linked to industrial one?

Okay. About the last question, Mr.

Ourpatian, you know that you we manage globally around 10,000 industrial equipment or plants and among them 2,000 of big plants or big equipments. We ask all of them to build, to design an efficiency action plan using the best practices and the track record of the whole group.

And with these individual plans, the numerous individual plans, action plans, we could, first of all, check them and follow the execution of these plans. So by adding all these actions, which brought each of them a small amount of money, but multiplied by 2,000 and then by 10,000, we are pretty confident that we will be able to go up to €200 million of savings every year.

For the free cash and the reversal of working capital, the track record of Veolia on that fact is good because and you see that many years now during the Q4. We reversed in the year, the totality of the working capital.

Perhaps, if we don’t reverse the totality of it, but a major part of it and there is no reason, we had no reason that we’ll be able to divest the big major part of that with this difficulty below 10 billion.

As of the EBIT you asked the question about what is organic from the EBIT growth?

EBITDA?

EBIT, so it’s like EBITDA growth is two thirds, so 6.5% at constant parameter, constant scope 6.5% at the three quarters and 3.3% for the scope rates, so we’ve also good contribution from the M&A, the small takings that we’re doing at group level.

About you said that October which is 70% or two third, one third.

I’ve two questions. The first one is in this late cycle period the Suez has mentioned treatment facilities in Europe are reaching full utilization was to address pricing power.

Is this something you’re seeing as well and could you give us a sensitivity to an increased engagement in the region? And the second question is your balance sheet is gradually de-levering through EBITDA growth and you’re using it part of the growth comes from tuck in acquisitions.

Do you expect to continue with this strategy and could you decide to do bigger deals?

Could you please precise your first question?

My first question really is to European waste treatment facilities and I am assuming whether you could be pushing gate fees higher?

Estelle?

The answer is [indiscernible] Suez, yes, we’re already because there’s a full capacity pretty much everywhere. That’s why it’s critical which is in better availability like the 94% in the G4S in the UK, it's typical example because you can say that’s more volumes which you’ve a higher gate fees and there -- it is to have three years ago.

So, yes, the answer is exactly the same trends we’ve seen Veolia.

About your second question is it about -- we’ll continue the small size acquisitions of -- we’ll target bigger targets it is about the deleveraging of the tool.

Given the deleveraging are you going to keep doing small size or could you go a bit bigger, as you can still de-lever?

So you know what we’ve announced for the actual strategic step 2016, 2019 for the Veolia group meaning that we’ll use our free cash flow first to take the dividend, dividends increasing with the net results at the same rate about and the rates would be used to fuel our organic growth or external growth, meaning that we want to stay around at the same debt level during this period. I remind you that the debt -- the financial debt will -- at the end of 2015 for Veolia was 8.2 billion plus the algorithm.

As I explained, some minutes ago at the end of 2018 one-year before the end of the plan, we will be -- if we got -- what we will have got the money of Transdev around €8 billion plus we will be stay at the same level about of debt and awful debt. And during this day of 2016 until 2018, if you calculate the growth of that you will see that the turnover into these in average about a 3.5% every year in average and EBITDA increased around 4.6% in average in a year so it is exactly what we will propose to the markets three years ago for your plan.

We are completely and perhaps a bit in advance in our plan for growth of turnover, bigger growth of EBITDA and constant net virtual debt level.

Good morning. I have three questions please.

The first is, apologies, I didn’t quite hear us correctly but I think as you said toward the beginning of the call, down the French Water business that you were no longer seeing revenue reductions for the contract renewals, and if that's the case I was hoping you could give some details on whether that because you are starting to see a less competitive pressures and whether they are starting to moderate all because activity levels catch it and the contracts are increasing i.e. the scope of the new contracts and what you are being ask to do is slightly greater than the previous ones?

The second question is just on 2019 given that's attention is going to start shift to next year pretty soon wondering whether you could tell us whether they are any major contracts coming up for new next year I know that no contracts and also so that major in the context of the thousands that you have but if there's anything particular we should be aware for 2019? And thirdly listen so you've talked about 200 million cost cutting target again which is again 1% of your cost base just wondering whether you could tell us what you see as the natural rates of inflation in the cost base if its maybe 3% than I guess that would imply cost increases overtime of 2%, but just some detail on that would be really helpful.

So, we are being the major contract for renewal you can took about two major renewal and Toulouse contract avenues.

Yes, the major contractor up to Toulouse, renewal contract will enter in service 2020, but there was one project is DT engaged today, and we wait for decision of the client in the coming weeks or months so it is a biggest one to two contracts. So what our management compact and the waste water management contract for the Toulouse city or Toulouse suburb, for sure the biggest one renew during the next 12 months.

After that, we have other much smaller contracts.

And the natural inflation of the cost base, the question that you asked. If I take a rough number is 2%, but as you know and as you have seen in the presentation we are much stronger now on savings and we believe we have still room at local level by managing our expenses better, that we will have room to improve the purchasing settings.

So that will balance the natural inflation that we see in our cost base.

About the Water business -- the turnover of the Water business in France, yes, we say that during the renewal processes, we have to decrease much less our prices that we have to do. We have that to do in the past.

First because the cost cutting now for renewals. Contracts which have been renewed less than 10 years, so it has been already decreased, so there is much less to get from the very old complex.

And it is the reason why it also, why the prices are decreasing no more through the renewal processes. The competitive didn't change a lot.

There is still strong competition at least between the French actors, the French players. But the contracts which come to renewal are less rich I would say.

If we take example of the Toulouse contract, we already valued its probably one or two contracts, the water contracts in 2012. So it has been already decreased some years ago, so that much less to get.

So I think the turnover of the French Water business will increase a bit. Thank you.

Just three quick questions if I may. The first one if you can comment about recycling pricing and particularly pay-per-pricing expectations going forward.

The second question is for seven close I mean you've been in charge of cost for a very small period of time. But I was wondering whether there is any comment you can make in terms of changes you’re implementing or things you’re focusing that might be different than before for the Company and therefore give us give us a hit can change with your appointment going forward.

And last question about coming back to the question about acquisitions. Can I then take out from, you said that you’re ruling out bigger positions and you will continue with us, more of that acquisition that you did before.

Estelle, perhaps, Estelle and Claude about the..

The second one, so regarding prices, as far as your question about do you have a quick to know what the price will be in one month, three month, six months, we don’t. But you know our expectation is that we reach the bottom and it should be either no news or good news in the next few months.

That’s all our signals coming from all our business units tend to so that. So we think we reach the bottom and we can see a little bit improvement but as you know that’s not yet so clear picture, so no worsening to expect that picture from us.

That for the first question. And for the second, it concerned in terms of this is, at this stage, we are really on continuity growth and efficiency are the two pillars of we have been delivered in last few years and as far as that concerned exactly what we are on our way of going on delivering.

As you’ve seen in the efficiency plan on the third quarter, we are under way, and it’s exactly the plan.

I will keep the last one.

Okay. On any changes, what I’m bringing to the financial community is my operational experience.

And the way also we will select of CapEx, our industrial CapEx, the way we are going to implement and work with Estelle on the cost reduction plan. So we will be 2 at the group level to be able to prepare for the next plan for next year.

So bringing some operational experience with the finance team with a very strong finance team around me is a plus to the group.

And I will add that to know perfectly the operational activities of the group is addressed. First, to know exactly how the money is circulating in a group like Veolia and precisely, so it is helping a lot to control perfectly the accounts and the cash, but also to know better where operational efficiency could be done.

About your last question, I explain that the small acquisitions are cheaper and easier to integrate. It doesn’t mean that we will refuse all bigger acquisitions, but it will depend on two things.

It will depend first of the prices, of the price of such a target, excluding synergy, because we want to keep for the group the synergy we are able to bring to our new targets. And second one, about the importance for the strategy of the group.

So, if we pay more than our I would say around 6 times EBITDA before synergies that we pay, we are paying today, it will pay more, it should be linked to very strategic, strong strategic interest. And there is not so many cases with a very, very strong strategic interest.

That would come. But today, it’s not the case.

But I don’t refuse in principal that such opportunity would come. No more questions.

So, ladies and gentlemen, thank you very much for having followed our conference call. I know that there is another presentation at the same time.

So, thank you very much for following Veolia and being interested in our group. I wish you a very good day.

Thank you very much. Good bye.