Thank you. Good morning one and all.

Welcome to this conference call to disclose the annual results of Veolia. There are three of us this morning to make this presentation.

I will start by explaining the key results for the group in 2018, take a look back at the financial performance of the past three years and present our 2019 objectives. Then Claude Laruelle, our CFO, will give you details on the financial results of 2018 as well as the impact of the new standard, IFRS 16, on the group’s accounts for the next years.

Then Estelle Brachlianoff, our COO, will give you details about 2019 road map with its two pillars: growth and efficiency. And then the three of us will take all your questions.

So let me start with the highlights of 2018. Financial performance for 2018 at Veolia is summarized on Slide 4.

This performance is marked by strong top line growth, which is ahead of our expectations at the beginning of the year. Revenues are up for the whole year by 6.5% at constant ForEx and by 4.7% on a like-for-like basis and a constant ForEx.

The fourth quarter was comparable to the third quarter. EBITDA, meanwhile, is up strongly year-on-year at plus 3 – 7.3% at constant ForEx and 5.4% at current exchange rates.

The last two quarters, Q3 and Q4, were even stronger than the first two. Cost reduction efforts amounted to EUR 302 million, reaching the ambitious objectives that we designed ourselves.

They allowed us to much more than offset the impact of lower recycled material prices as well as the price cost squeeze on energy costs and the adverse effect of weather conditions on our business last year. This strong EBITDA growth flows down to the bottom line and amplifies its progression.

Current EBIT is up by 9.7% at constant ForEx. Current net income at EUR 675 million was up 13.3% at constant ForEx and even 14.7% if you correct that for net financial capital gains.

Net financial debt is under control at EUR 9.7 billion, as I announced last November. This net financial debt is made up of EUR 8.3 billion in normal net financial debt for Veolia, plus EUR 1.45 billion for refinancing of the hybrid bond into classic bonds, which we did in April 2018, but does not include the proceeds of the divestment of the 30% stake in Transdev, which was finalized in January 2019.

These very solid 2018 results have led the board to propose to the next AGM another increase in the dividend for nearly 10% to reach EUR 0.92 per share. Now a few words about our business on Slide 5.

This growth is mostly organic at plus 4.7% compared to the previous year. This organic growth was complemented by a few tuck-in acquisitions, plus 1.8%, for our revenues, which pretty much offset the negative ForEx impact of minus 2.1% due to the appreciation of the euro versus all the other currencies in the countries where the group operates.

Geographically, this organic growth of 4.7% comes, first and foremost, from Asia, as in previous years, but also now clearly from Latin America. Moreover, Europe held up well, especially in Central and Eastern Europe and Southern Europe and even in the UK.

From a business standpoint, this organic – over half of this organic growth comes from our new businesses, which were development priorities and have been for several years, such as the processing of the difficult pollution, the circular economy and recycling, services on industrial sites as well as energy efficiency. And in terms of clients, our organic growth in 2018 has come a bit more, 60% from industrial clients than from our municipal clients, which made up 40% of business.

Now if you look in the rearview mirror over the last three years on Slide 6, you can see solid and steady profitable growth. On an annual average at constant ForEx, revenue growth of 4%; EBITDA growth of 5%; current EBIT growth of 8%; current net income growth, 10%; and dividend growth of 8%.

Good control over capital employed was almost constant over three years and had enabled a strong progression of return on capital employed after tax and steady generation of free cash flow, of which 80% was devoted to dividends and 20% to tuck-in acquisitions. This performance – all of this performance is fully in line with the goals of our current strategic plan that was announced at the end of 2015.

Veolia met its targets. On Slide 7 now.

You can see that our growth came from Europe, excluding France and the Rest of the World, especially Asia and Latin America, it was even stronger in 2018. This growth also came mostly from the development of our business with industrial clients much more so than with municipalities, which remained slightly positive in terms of growth, whereas business with industrial clients grew very strongly.

Slide 8 shows our good capital – or good control over capital employed at EUR 15.9 billion, almost stable over three years, which explains with the nice increase in EBIT; on the other side, the strong increase in ROCE now at 8.8% after tax. As for capital employed, it also shows our good control over the combined net debt plus hybrid financing.

On Slide 9 now. The increase in results and profitability have made systematic dividend growth possible, in line with that of current net income.

That was also a goal in the plan that we announced at the end of 2015. And for 2018, we shall have a 10% dividend increase proposed to the AGM.

Now let’s turn to 2019. I’m now on Slide 10.

For 2019, the economic environment where we operate seems to remain favorable to our operations. Waste volumes are still looking good, and the gradual pressure on stricter environmental regulation is helping driving waste and hazardous waste treatment solutions.

2019 tariff indexing directly linked to 2018 inflation will be better than in previous years. Energy prices should have less of an adverse effect than in 2018.

And recycled material prices, albeit low, have stopped declining in the last few months. Regarding our construction activity, backlog should increase, thanks to a few new desalination contracts.

However, we will continue with our refocusing policy for our subsidiary, VWT, around the sale of a technology called equipment rather than on new construction projects. That’s why on Slide 11, we expect that in 2019, which will be the last year of our current strategic plan, that performance in 2019 will be in line with that of the previous three years.

Revenue growth will remain strong. Cost savings will reach at least EUR 220 million.

And EBITDA will stand at the top of the range that we’ve been disclosing for two years, given the current foreign exchange developments, an EBITDA between EUR 3.5 billion and EUR 3.6 billion at the exchange rate at the end of 2018. Thus, the first two strategic plans of Veolia, 2012 to 2015 for the group’s transformation plan and 2016 to 2019 for the growth and efficiency plan, both plans were successful and all goals were met.

2019, thus, will also be used to mark a new strategic step for the next four years, for the years 2020 to 2023, and this new plan will be presented at the beginning of next year. The 2019 outlook is thus summarized on Slide 12 and outlines what I’ve just told you.

I will now hand over to Claude Laruelle, our CFO, who will give you details on the 2018 results and the expected impact of the IFRS 16 standard. Over to you, Claude.

Thank you.

Good morning. Okay, Page 14.

As Antoine Frérot just said, 2018 results are well above our expectations. All the figures are excellent.

Revenue grew by 6.5% at constant exchange rates. And thanks to good operating leverage, EBITDA grew faster than revenue, 7.3%.

This includes the impact of the exceptional bonus paid out in January to those of our employees that make less than EUR 25,000 a year, which total EUR 5 million. Current EBIT grew even faster than EBITDA, not only thanks to our investments, and depreciation was therefore well-controlled and our joint venture performance was equally good.

Our group share of adjusted net income grew by nearly 15% year-on-year. And as I indicated last November, CapEx stabilized in Q4 to reach EUR 1.8 billion for the year.

This reduced our debt after the downturn in our working capital requirement to EUR 9.7 billion. This is figures before the divestment of Transdev that was finalized in January 9 last and, therefore, doesn’t count for our debt last year.

On Page 15, you’ll see that Q4 was particularly strong with sustained revenue growth at 6.4% and EBITDA growth at 8.4%. Okay, what were the main drivers for this?

First of all, business in France, which has been the strongest in several quarters, driven by waste activities and related construction; and then from the Rest of the World, which has again had a very strong quarter, with Asia continuing to grow at a double-digit rate. Our Global Businesses are more of a mixed picture with a great business in hazardous waste and stabilization in construction after a strong recovery in Q3.

On Page 16, you have a breakdown by geographical zone where you see the, well, the Rest of the World is doing, up 11.9% at constant exchange rates. On Page 17, you can see the breakdown in the increase in revenue.

First, more than 70% of this increase proved to be organic, while less than 30% came from small acquisitions, tuck-in acquisitions from all our geographical zones. The primary source of organic growth was our commercial momentum, as emphasized by Antoine Frérot at the beginning of this presentation, especially concerning waste activities all over the world, but also because we had very good water volumes and price increase in Central Europe.

Finally, price impacts were significant at EUR 243 million, up by – with respect to 2017. This is an encouraging sign.

We had told you that we were considering price review formulas for water in France, and this is a trend we’re seeing in all of our businesses, and we can therefore pass a little bit more of our increased costs through to our clients. Now Page 18.

EBITDA is up by 7.3%, thanks to the remarkable performance of the Rest of the World segment, which is up by 15.1%. In Europe, 2018 was marked by unfavorable climate and by coal squeeze that reduced the increase in EBITDA, but apart from these two factors which particularly impacted our Energy business, performance remained very solid in Water and Waste.

On Page 19, you will see the usual EBITDA bridge with trends that are more or less the same as we had in Q3, thanks to the increase in revenue and good operating leverage and organic growth that contributed about two-thirds of the increase in EBITDA, one-third being provided by scope impacts. This increase in EBITDA was mainly obtained by – thanks to the very substantial cost savings that we made over the years, EUR 302 million.

We had an excellent year. And as these savings correspond to 1.2% of revenue, and Estelle will come back to the nature of the cost savings when she takes the floor in a while.

The second very significant impact had to do with business and volumes. This is an effect of our profitable growth, a very good commercial dynamic, which particularly contributed alongside volumes and environmental services.

Finally, the price of energy and recycled materials stabilized globally. In Q4, this meant that the negative impact did not impact EBITDA in Q4.

On Page 20, you see that we still have very strong growth for Waste dynamic at 9.3%, thanks to good price levels and good volume levels and thanks to scope impacts, in particular with the acquisition of Grupo Sala in Colombia. And as you can see, volumes remained strong in the second half at plus 3%.

But a few points worth emphasizing here, first of all, France with revenue up by 3% due to proper buoyancy and incineration landfill volumes. Then Asia, which has grown by nearly 45% in terms of revenue, which benefited from the continued dynamism of China’s economy, which continued in Q4, especially for hazardous waste.

Finally, hazardous waste in Europe retained its buoyancy at plus 10%. This was due not only to good operational performance, particularly in oil recycling, but also to very good commercial performance.

On Page 21, now we – you have a review of our operations broken down by geographical zone. Let’s start with France.

We had the variable growth in revenue with Water posting stable results but sharply improved profitability due to better price indexation, which offset volumes impact, plus 0.7% on the one hand and minus 0.7% on the other. And the productivity plan, Osons 20/20, which produced its first effects.

The organization of the French market at nine regions, 67 territories is now well-established and is producing very good results. As I was saying, the Waste business has increased revenue, but decreased EBITDA due to the negative impact of lower recycled materials price, especially paper, and the increased price of diesel fuel.

On Page 22, you have the Rest of Europe, very good performance in all regions. First of all, in Central Europe, revenue increased sharply not only due to good commercial performance but also due to the contribution of small acquisitions, waste in Hungary and heat networks in Slovakia.

As I was saying earlier, EBITDA was slightly down due to the coal squeeze caused by strong price increases during the heating season. In the UK, we had an excellent year and actually historic year, thanks to the PFI contracts.

We managed to decrease the maintenance stoppage from six then to 12 months and then to 18 months for certain assets, which made it possible to get record availability rates for the whole year. Finally, in Northern Europe, growth was driven by the tuck-in acquisitions and commercial gains, and EBITDA is sharply up.

Page 23, you have the Rest of the World where we have clear growth in all zones. First of all, in Asia, and particularly in China where growth was 13.3% in terms of revenue, there has been no slowdown whatsoever.

Growth remains very strong, thanks to our new projects and the new capacity that we are putting online. I would also like to mention Korea where revenue grew by 15% due to new contracts in Industrial Water.

Latin America developed strongly, as it did over the past three quarters, both organically with new contracts in Argentina, Colombia and Chile, and thanks to the integration of our new acquisition in Colombia. Finally, in the other zones, we experienced good growth of our business, which was also reflected in growth in EBITDA levels.

Page 24, Global Businesses. They continue to be driven by the dynamism of the hazardous waste business as opposed to our construction activities.

In construction, VWT is gradually refocusing on technology and services, which means that the construction component is going to decrease. This translates into reduced revenue, and this is going to be staying with us.

In order to improve the profitability of the subsidiary, we are refocusing its activity on its more profitable areas of business. And regarding SADE, we had 4.5% growth and well-structured growth in France.

And finally, hazardous waste had an excellent year with an increase in volumes and prices and a good mix of commercial performance, which allowed us to pass on price increases to our customer base and, at the same time, operational performance at this very good level. Okay, Page 25.

Our current EBIT was up strongly by 10.6% in constant exchange rates, clearly driven by the growth in business, good operating leverage and cost savings, but also by the fact that we have very well controlled our depreciation and amortizations, thanks to a proper control of our investments. I would also like to point out that net income of our joint ventures was up, particularly in China, to EUR 73 million, an increase of 19%, which is – but thanks to our hazardous waste plants, which contributed to strong growth in income in China.

Page 26, you see the current net income was also up strongly, 14.7%, excluding capital gains. As you can see, the cost of debt was stable in spite of the repayment of the hybrid in April and minority interests, which increased following the sale of BVAG in Germany and there was also something regarding China, but that should be stable next year.

Okay, Page 27. The published growth of net income is equivalent to that of current net income.

Charges associated with the restructuring plan are down as opposed to last year. And the income for discontinued operations, namely Gabon in Lithuania, that had a very major impact on our 2018 income as opposed to 2017, especially regarding Gabon where we’re actually posting an impairment loss of EUR 45 million.

Finally, in 2017, we had on our books a share of the net income of Transdev. But as Transdev was put under IFRS 5 as of January 1 last year, there is no share of Transdev in our 2018 accounts.

This accounts for most of the discrepancies in the accounts. Now Page 28, net free cash flow after growth CapEx amounted to EUR 568 million.

Finally, our net financial debt was EUR 9.7 billion, clearly below the EUR 10 billion as we had indicated in November. And this includes EUR 307 million worth of net financial investment, EUR 786 million worth of acquisitions and EUR 479 million worth of divestures.

Page 29 now, details of investment. Industrial CapEx was up 4.2%, first of all, because we have our maintenance CapEx under proper control, and they represent 3% of revenue.

Then we had some embedded growth CapEx, which was stable, and discretionary growth CapEx, new factories and capacity growing very strongly to nearly 50% with a particular focus on Asia. And in our priority businesses and geographical zones, I want to mention the Sinopec contract in Industrial Water north of Beijing and also the construction of six hazardous waste treatment plants in China and Singapore that will gradually enter into service between 2019 and 2020.

And finally, Page 30, which is the last page of the financial results presentation, you will see that our working capital requirement was down and reduced debt by EUR 62 million. And Page 31, you have the summary of our outlook, excellent results, very good commercial dynamics, plus new treatment plants about to come into service.

And all that means that we’re probably going to have EBITDA between EUR 3.5 billion and EUR 3.6 billion in terms of the – for next year – for this year, as Antoine just said. Okay, now IFRS 16 impacts.

As you know, as of January 1 this year, all companies have to apply new accounting standard, IFRS 16, which means the leasing contracts have to be entered differently in our accounts. What are the implications for Veolia?

First of all, we have to create on our balance sheet an asset that represents the right to use assets that are then leased and a debt liability representing the sum of discounted lease payments. And this will have an impact on our main financial aggregates, particularly on the P&L.

On Page 34, you have the main impact on our P&L based on our 2018 leasing contracts. No impact on 2018 revenue; an impact on EBITDA of about EUR 400 million; an impact on current EBIT of EUR 40 million to EUR 50 million; financial net income is negatively impacted by between EUR 40 million to EUR 50 million; and by consequence, there’s no significant impact on current net income.

On Page 35, you can see the implication for our other financial aggregates with the creation of a net asset worth about EUR 1.6 billion, a corresponding financial debt slightly in excess of EUR 1.7 billion and CapEx representing the new leases that are going to be signed during the year worth about EUR 300 million. The impact on our ratios is probably going to be most visible on ROCE because we have, therefore, having – we now have an asset and capital employed that has considerably increased.

And therefore, ROCE is going to be down by 60 basis points, going down from 8.8% to 8.2%. So what does this mean in terms of our 2019 goals?

Our EBITDA target for 2019, as we told you earlier, was supposed to be at a range between EUR 3.5 billion and EUR 3.6 billion. IFRS 16 is going to impact this figure by about EUR 400 million, with the end result of the adjusted target is going to be between EUR 3.9 billion and EUR 4 billion.

Now Estelle?

Thank you, Claude. As you know, 2019 is the last year of the plan, and the road map established by Antoine is very clear with a focus on the two pillars of the plan, growth and efficiency, growth and efficiency, which for 2019 are a continuation and deepening of the plan.

I’m on Page 38. I’m going to talk about these two pillars, efficiency, growth and digital also, which is a way to have more efficiency and growth at Veolia.

Regarding efficiency, of course, we’re always looking at cost reductions. But beyond that, we’re looking at a number of deeper levers that will be used on a large number of sites on the company.

In terms of growth, we are still are selective with our financial investment criteria, as Claude recalled a minute ago, but more generally, competition is fierce inside the company for projects. And so we have now more systematic post-investment reviews to make sure that the results of these various projects are there.

In general, our goal is to make sure that management is aligned around these two pillars and priorities using a common bonus system for all business units that cuts across the whole organization, but also we share best practices. Today, I also wanted to talk about digital, which is fairly essential for us and which will help fuel this growth and efficiency.

I’ll come back to it at the end of my presentation. I’m now on Slide 39.

2019 is a continuation of cost reductions and the efficiency plan with a target of at least EUR 220 million in cost savings. It’s totally in line with what was achieved – what has been achieved since 2012.

Although the shares are varied over time, as you know, fuel reductions and general expenses at the time of the restructuring, the main reorganizations in the group, and gradually a switch was made towards more operational efficiencies that have taken up the slack, and that’s what we’re expecting also in 2019. And I’ll give you more details about how these cost reductions will materialize.

I’m now on Slide 40. These EUR 220 million in minimum savings in 2019 have three components.

First of all, first also savings. SG&A, at least EUR 30 million – EUR 80 million – EUR 30 million, sorry, so we’re continuing, and then purchasing will continue – will reduce the SG&A and the share of the group as the group grows.

Second source of the savings in 2019, savings with at least EUR 80 million. And here, the local entities will gradually take over.

They represent 75% of our cost, whereas at the beginning, we had a much bigger contribution from central purchasing. Local taking over means that we work more and more on issues of subcontracting or the sourcing of chemicals.

Third source of savings, EUR 110 million at least in 2019, operational efficiency that I’d like to explain with more details. I’m now on Slide 41.

Operating efficiency, as I said, is not just about cost reductions, but it’s a broader logic, which also works on revenues, for instance, because what matters is what remains at the bottom of the P&L at the end of the day. So there are levers that are shown here on the left hand of the slide, various methods to reach that goal.

First of all, and this is something that I personally do, a systematic review of the least-performing sites or contracts. Then much more targeted actions on the largest assets, like sewage treatment plants, incineration plants or big assets, where we use an internal benchmark to identify those big assets that would underperform their peers inside the company.

By way of illustration, you’ve got a graph on the slide showing electricity consumption for wastewater treatment plants, that is a big cost for us, and there are potential efficiency gains for us. And for the smaller sites, as you know, we have thousands of sites, we have targeted the 2,200 biggest, the main ones in 45 countries.

And so each site has an action plan for continuous performance improvement called operators priorities. A lot of different and complementary logics in order to improve operating efficiency.

I’m now on Page 42. Moving on to the second pillar in the plan, which is growth.

2019 started with great harvest of contracts, in line with what we had in the previous years. Starting with the more traditional activities, like municipal water in France, there’s no major renewal to be expected in 2019.

And of course, we are really happy that the year is off to a good start with the gain of the Nîmes contract, and we just started on the Bordeaux contract which was won last year. And great prospects in Japan, a continuation of what we had in the last two years as well.

Regarding technology and networks, as Claude said, in January, we signed two major contracts for desalination after a few low years for desalination in the Middle East. It’s a sign not just that the market is picking up again but that we are also very competitive in this area and that we can make a difference so that we’re very happy with it.

More generally, in terms of technology and construction, as Claude said once again, there’s a strong focus on our part on all technology differentiators at the detriment of the construction parts to focus on performance and bottom line improvements. Regarding newer activities, less traditional activities, starting with just a few regarding solid recovered fuel, there are great projects in Europe on SRF.

This is solid recovered fuel. This means that we’re replacing fossil fuels with fuel produced from waste.

You’ll have understood that this is core to our know-how and our mission, and we have many such projects. Also, regarding plastics, we have projects for small acquisitions or organic growth for which we are very selective on a certain number of resins, not all, but also at a certain number of geographical areas.

For instance, let me point out here that we have started recycling plastic also in China after everything we’ve already done in Japan or in Europe. Regarding toxic waste, hazardous waste, new stations – new plants are being built up in China and Singapore, as was mentioned earlier, but also a new contract won in Sadara in the Middle East, there are two, so we can open up on new geographies.

So this is a first in hazardous waste in this part of the world. Energy efficiency of buildings, we have been doing a lot of that very successfully, especially in Southern Europe, in Italy and Spain, or in the Middle East.

And there, we stand out with our digital tools so that we can gain market share with double-digit growth. New innovative offers also, like the dismantling of ships in China, all that we are doing regarding power grid frequencies with the installation of batteries or issues of aggregation where we are a leader and we have strong hopes for it.

Third part of my presentation. I said in my introduction that digital is important for us and all its components.

That way, we can do more and better of everything that we’re doing at Veolia, and that is a strong lever for our strategy. We’ve defined a road map with everything that’s digital means for us with several pillars.

I’m on Slide 43 here. Digital for our employees to further collaboration and give access to the best of Veolia has to offer throughout the world.

Then digital for our customers to make life easier for them so that it’s easy to – as easy to do business with Veolia as to order something in their smartphone. Then digital for our operations, and that will fuel our operating efficiency plans with a number of real-time KPIs.

I’ll come back to it later. And then digital offerings, we’re selling something different with digital, with new business models, something more disruptive at the frontier of what we’re doing.

On Slide 44, I wanted to give you some illustrations of success of the use of digital as a performance tool, which is an improvement for our profitability. This is something major that we believe strongly in.

A few examples, four of them are already successes. Here, talking about Hubgrade, which is a concept so that you can monitor power consumption in real time with smart sensors, industrial IoT.

We are talking about artificial intelligence to predict power consumption before it’s put on the grid from our waste to energy plants. We can also minimize losses on our grids with a number of services and also with machine learning so that we can predict what can happen.

And also, the last component in these examples, solutions so that we can render services, but also provide data to our customers, which is very useful for them. And it’s a success factor and a differentiator in a number of our offers.

This is the case for energy efficiency but also for industrial and municipal waste collection. Now we want to streamline to mainstream all these initiatives to improve our efficiency.

As you can see, our focus is total in the last year of the plan in order to deliver growth and efficiency in the results. And at the end of the year, an EBITDA between EUR 3.5 billion and EUR 3.6 billion.

Thank you, Estelle. Ladies and gentlemen, we are now at your disposal for questions.

Good morning Mr. Frérot, Mr.

Brachlianoff and Mr. Laruelle.

I have three questions. The first one is on ROCE.

Although even if you take into account the impact of IFRS 16, we’re at 8.2% at the end of 2018, you always mentioned the target, the ROCE target around 9% in the midterm. We are close to it.

So should you revise this goal upwards for a trend that would be in the next three to five years? That was my first question.

Now more specifically for Mr. Laruelle.

In the consolidated accounts, you did not include a large chunk or almost all of the tax deficit for the French scope that was EUR 450 million at the end of 2017. Could we get the amount at the end of 2018?

And have you re-embedded some of these items in the deferred tax assets, which would be better visibility over your ability to, one, be profitable on the French tax scope, and also be profitable in a resilient manner? Last technical question.

Could we know, current EBIT growth on a like-for-like basis and at constant Forex, just you talked about constant Forex, you talked about EUR 41 million, but we’d like it on a like-for-like basis as well to revalidate our calculations.

Thank you, Mr. Ourpatian.

I’ll take the first question and Claude will address the other two. ROCE, our ROCE goal in the midterm was between 9% and 10%, as you remember, and has been for years now.

This is still our horizon, although IFRS 16 was not around at the time. We’re close to it.

We’ll go above 9% in a short time frame. For the years after 2019, you understand that we’re working on the new strategic plan and it’s not yet fully determined precisely.

We’ll wait for the new strategic plan and the introduction thereof to give you more details about our ROCE target for the next few years. Claude?

For the French tax deficits, all of the deferred tax assets – or the deferred tax that could be activated are EUR 398 given the forecast that we have for 2019, which will be impacted by the discontinuation of the CICE, a tax break that will turn into lower costs. Also, the improvement in our business in Water and Waste in France, but also the hybrid coupon, which will no longer be included in our cost, we expect, in 2018, we assetized over EUR 18 million in deferred tax that was in accounts in 2018.

And to answer your question regarding EBIT on a constant Forex like-for-like, now it’s 7% compared to close to 10% in total increase for the group.

[Foreign Language]

Hello. My first question has to do with the group’s capacity or ability to make sure that all geographical zones benefit equally from certain types of contracts.

You mentioned your great satisfaction with the PFI contracts in the UK. I’d like to know where you stand with concession-type contracts in other parts of the world with PPPs, whether you see scope for progress, are there constraints of a regulatory nature that have kept you from achieving the same sort of performance you achieved in the UK?

Do you have a feeling you can do as well in other areas? And second question, in terms of future progress, you said you wanted to double your EBIT in Water for France by 2018.

Is this a target that you are in a position to confirm? Where do you stand on that?

And now, as regards Slide 59, where you talk about environmental services, you see that industrial production is probably a weighted average and waste organic growth, your waste organic growth is outperforming your other indicator. Could you explain exactly how you computed all of this?

Is – did you factor in the price of power? Could you explain exactly how you arrived at these figures?

Yes. Thank you very much.

I’m going to ask Estelle to take the first question, and I’ll take the second and then we’ll ask Claude for the third. You’re perfectly right, as regards incinerators and for other major plants; we have different performance levels depending on the area.

What I showed you on Slide 41 gives you an indication of how well we monitor our results and our ideas precisely to bring those, who are underperforming currently up to the level of the better performers. We’re engaging in massive good practice sharing in order to improve everybody’s performance.

The fact that we have benchmarks with very specific PFIs is a very useful performance tool and management tool. Second point with respect to what you were asking, this does take time.

Why so? Because in a number of cases, we have to deal with third parties.

Sometimes their clients have other contracts with other players and these contracts have to be renegotiated before we can really bring to bear the type of progress that we want. As regards, Mr.

Turpin, your question on Water in France. A year and a half ago or a bit longer ago, we had doubled the EBIT levels for France that had gone down to EUR 50 million, and our goal is to hit about EUR 100 million by 2020.

And we’ve got more or less half the way there in 2018. In other words, we confirm the target we announced a few years ago.

This is the consequence of our productivity plan, Osons 20/20, and of our restructuring plan that has been completely deployed. And we are, therefore, going to do better in 2019 and 2020.

We’re probably going to hit our target and probably, even do better than that and probably soon. As regards to your third question, i.e., revenue in the waste sector, I’d like to draw your – go back to Slide 20 – 59.

This is also a reflection of our policy. What we’re trying to do is to make our activity less cycle dependent, less cyclical.

Very difficult pollution and hazardous waste requirements are on the rise. And we are witnessing the adoption of ever more stringent regulation, which is contributing to ever more supply for our plants.

Waste that used to be simply disposed is now showing up for treatment, and that’s one of the reasons why we’re really counting on more revenue from waste. Then the other explanation, the other underlying factor has to do with recovery of materials in waste.

This involves an additional step with respect to traditional waste treatment, and this means that we are going to witness additional revenue from the general waste business, and we hope to make this less cyclical with respect to industrial production.

Okay, I’ll pick up on the power figures. In environmental services, power generation is about EUR 200 million out of EUR 9 billion.

So, it only has a very marginal impact on the decoupling that Antoine Frérot was mentioning earlier. Any other questions?

Yes. Good morning.

A couple of questions here. First, would it be possible to do a bit of a recap of the different one-offs?

You had a number of headwinds. 2018 has been quite a strong year, we can see it.

But yet, you had a lower recycling price, oil squeeze in waste collection, coal price squeeze in the district heating, weather effects. And on top of that, if I look at it 2019 to 2018, you have higher power prices in EfWs last year, so a material power price increase in the year before as well.

So, I’d be interested in the quantification of that. Same for higher water tariff indexation, what is the type of indexation you expect for this year and what will be the impact on profitability?

So that would just be a recap of these key points, and if I’m missing any in terms of non-recurring and what to be expected from the better power price and indexation. Thank you.

Claude?

Good. So, I would recap the main, I would say, headwind that we had in 2018.

First of all, the first one is the climate that hit the group at the first semester. So, it’s minus EUR 16 million impact.

We were talking also about the cost of energy, especially the cost of coal, that was an impact of EUR 27 million. And also the gasoline impact that we had to compensate in Europe, it was EUR 26 million.

And last was the price of paper and cardboard, minus EUR 16 million. That was the main topic that we had to face in 2018.

And I could add that we don’t see today new headwinds in front of us. But you know that the headwinds are not calling before happening.

So for sure, we’ll have, during the next year, some of the headwinds in the future. We don’t see that today, but we will see for the rest of the year.

For water indexation?

Water indexation? So, water indexation, what we had was 0.7%.

We see with inflation increasing, we are forecasting around 1.5%, as we said in the Q3 release, around 1.5% in water indexation in France for 2019.

And then the missing meters then higher – the impact of higher power prices on your EfW, what do you expect given the power price we had out of 31st December and what’s been hedged?

Okay, yes. So, in terms of electricity pricing, from incineration, we are selling two terawatt hours, and 80% has been hedged already for 2019.

So, for this part, we don’t expect a major bump in 2019. We are forecasting around EUR 5 million plus in 2019 compared to 2018.

Okay. And I would have a follow-up question while we talked about the one-offs and everything that led to the delays to the headwinds, which Mr.

Frérot started to address saying that there is some buffer in the guidance as they are never called before they appear. So, I would still be interested in knowing what are your assumptions in terms of macro and basically waste volumes?

And among other things, if I drill down a bit more the Grand Paris, basically, waste volumes, what impact year-on-year should we have knowing that it has boosted waste volumes in 2018? Thank you.

So what we see for the Grand Paris, first of all, the Grand Paris remains active and dynamic. What we have seen in 2018 and we talked about this in November, and we see some increase of volume of polluted ground going to a brownfield.

What we are forecasting for 2019 is something, which is a different mix, maybe a little bit less construction, but more coming from the tunnels that the Grand Paris Express is under construction. And they are starting new tunnels every three, four months.

So, we expect more waste coming from this part of the construction and maybe less from housing construction. So, the mix will be maybe different, but the volumes will be – will continue to be good.

In terms of waste volumes, what we are forecasting is around 2% to 3%, 2% to 3% for 2019, which continues to be strong, helped of course, by the strong dynamic of the toxic waste.

Thank you.

[Foreign Language]

Before the answer, Mr. Vincent Gilles, you are in the English room.

So please, for everybody in the English room, please ask your question in English. Thank you.

Yes, I will answer the question of Mr. Gilles in French because he asked it in French.

On the cost-reduction plan, first, it’s too early to tell because, as I said, our new plan is being hatched now. It’s still earlier – recalled on a slide what happened over the last eight years in the cost reductions.

I’ll look at the slide now, it’s Slide 39. And you can see that year in, year out, cost savings were between EUR 200 million and EUR 300 million, never less than EUR 200 million, never more than EUR 300 million.

So EUR 200 million is a bit less than 20% of the cost base of the group. Some costs cannot be addressed because they are not dependent on us, like energy cost for instance.

But based on that schema, you can look at the foundation on which we can reasonably work for our new strategic plan, which is probably around EUR 200 million. Regarding the economic slowdown in Europe and the other question related to the French situation, the economic slowdown in Europe has been announced.

It’s probably has been measured for months now. As we said when we presented our results in Q4, we did not see any impact of this slowdown on our business.

We’re not – we haven’t seen that since the beginning of the year either, by the way, first of all, because there’s some part of the business that’s not in Europe and also because our business is fairly specific. As I said a few minutes ago, there are reasons why what we do in waste can be somewhat be correlated from industrial output.

So now, we’re not seeing any impact on our business. As you know, our business is a proxy for what is going on right now.

It doesn’t help us predict the future unlike other businesses. So what we’re seeing now may not last in the future, but in Waste, Water and Energy at Veolia now, we’re not yet seeing – or we’re not seeing any impact of any slowdown at all.

The yellow vests had an impact on Veolia’s business because when you’re own roundabouts rather than – well, even when you’re there, you’re still consuming water and generating waste. The only obstacle that could have been generated is that sometimes, travel was a bit limited around roundabouts or our clients had difficulties bringing their waste to waste recycling centers, but that didn’t really happen.

So there were no material consequences of the gilets jaunes activity on our business. Household consumption, by the way, shifted slightly because from purchases in stores, well, a lot of these purchases shifted to the Internet, which slightly changed the nature of the resulting waste.

And that generates a bit more packaging as well most likely.

I wanted to agree with what Antoine Frérot said about the efficiency plan for the next few years without naming any figures. But just to indicate that we have the ability to carry on generating savings over the next few years especially regarding the operating income – the operating aspects that I mentioned.

With digital, we can replicate all the already successful solutions from other geographies. That’s already a source of cost reductions in and of itself.

We can improve the availability rate of our incinerators. We can reduce power consumption in wastewater treatment plants.

All these examples that I have mentioned are sources of savings for the next few years. So we have the wherewithal to carry on generating cost reductions for some years.

[Foreign Language]

Hi, good morning. Two questions, please.

The first is on your growth CapEx, which you highlighted on Slide 29, had increased quite substantially from around EUR 200 million to around EUR 300 million and with the vast majority of that going into Asia. I was just wondering whether you could comment on the outlook there and the priorities going forward.

Is there scope for that number to strengthen and to rise further given the good position you’re in on the balance sheet? And is Asia already the key priority for you for growth CapEx?

And then the second question is on tax, which I appreciate that you’ve had one or two questions or comments on tax already. But the tax rate was very low for this year, as it was last years, around kind of 20%, 23%.

And I was just wondering whether you could comment on the outlook there, how do you expect that to evolve over the next couple of years, and what a normal level of tax rate in the medium term would we see? Thanks.

Okay. So I’ll start by the growth CapEx.

So in terms of growth CapEx, as you know, we remain very disciplined on CapEx. This is what you have seen in 2018.

So we will continue the discipline, strong discipline within the group in terms of CapEx. What we are doing for discretionary CapEx, we take opportunity because organic growth is the best growth of Veolia.

So – and it represents two-third of the growth. What we have seen, there is a market to be taken in China now in terms of toxic waste.

So we are investing in that market. And it’s best growth that we can imagine in China at the present time in toxic waste but also in industrial water.

So we will continue as we see those opportunities especially in China but mostly also in Asia, Korea and Japan to continue to invest for the – to continue to fuel the growth of the group. In terms of tax rate, tax rate, as you have seen, it’s 22% in 2018.

What we are forecasting for 2019 something below 25% would be a good proxy for the year to come.

Should we expect that to remain at that level for the next few years? Or would you expect it to kind of normalize a bit closer to the corporate tax rate at some point?

That will be difficult to speak about for the following years. It’s really depending on the mix and the profitability of the different countries.

That will be linked also to the – to me to the strategic plan that we are building.

Okay. Thanks Claude.

Hi, good morning. Just a few questions, if I may.

The first one is regarding the restructuring charges which were fairly high this year. I was wondering if you have a guidance going forward, what’s your expectations?

Should we stay around the EUR 100 million or do you expect them to be reduced going forward? The second question, since you spoke about trucking delivery exposed on CapEx, maybe if you can just elaborate a little bit there, please?

Can you please give us the guidance in terms of overall investments? Do you expect to stay around the EUR 1.8 billion as this year?

And the last, can you please confirm that you said you don’t expect to have any major water renewal in 2019, and what’s the next phase of big renewal you see, please? Thank you.

So in terms of restructuring cost, the main topic that has been for restructuring cost in 2018 was the big restructuring within VWT. Because we are decreasing the construction activity within VWT, we had to reduce the cost base, the fixed cost of VWT.

So that’s worth almost half of it. So we don’t expect this type of item to be recurring.

We will – we expect to have fewer items in terms of restructuring going forward, but we will continue to adapt as we have also to follow the adaptation of our clients as well and the activity. In terms of...

In terms of trucking, typically, the truckings are in various spectrums, of course, aligned with our strategy. We have issued truckings in the plastic business, relatively small in size but that we’re aggregating.

We have a few truckings in the solid waste business as well. So it’s typically a geography where we’re not present yet, and it’s really like plug and play within our existing team.

We have few truckings typically in the energy services business, so energy efficiency for buildings. All the ones I’ve mentioned are perfectly aligned with our strategy and are relatively small in size.

In terms of your last question on renewal, I can confirm we don’t have a big renewal to expect in 2019 in the Water business overall, not in France, but neither in other countries, and I’m talking about major objects. Of course, you have the overall – every year, we have a few, like, renewals everywhere, but nothing massive, nothing beyond, let’s say, EUR 10 million, EUR 20 million a year-over-year type of revenue.

So this is a year where we’re building our growth, and we don’t have that many objects different. I must add that on the Waste business, we are very happy to have extended our long-term PFI in Birmingham which we have seen in the press three weeks ago.

Hi, thank you for taking another question. I’m just going back on the question from Crédit Suisse here, talking about yellow jackets, saying that Veolia has not been impacted at all by that.

Just had a question regarding the Macron effect, so what has been your view or response to that? And potentially, what has been the cost for 2018 and over 2019?

Thank you.

Just, this is what I mentioned in terms of the bonus that we have paid for people owning in France, less than EUR 25,000 is embedded for EUR 5 million in the 2018 EBITDA and it will be the full cost.

Thank you.

So if there is no more questions, I thank you for your presence during this conference call. Of course, our IR department is at your service to get any information you will need during the day in the next days.

Thank you very much to all of you and have a good day. Bye-bye.