Annual Results 2019

February 28, 2020

DISCLAIMER

Veolia Environnement is a corporation listed on the Euronext Paris. This document contains "forward-looking statements"

within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risk that changes in energy prices and taxes may reduce Veolia Environnement's profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement's contracts, the risk that acquisitions may not provide the benefits that Veolia Environnement hopes to achieve, the risks related to customary provisions of divesture transactions, the risk that Veolia Environnement's compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnement's financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, as well as the other risks described in the documents Veolia Environnement has filed with the Autorités des Marchés Financiers (French securities regulator). Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward- looking statements. Investors and security holders may obtain from Veolia Environnement a free copy of documents it filed (www.veolia.com) with the Autorités des Marchés Financiers.

This document contains "nonGAAP financial measures". These "nonGAAP financial measures" might be defined differently from similar financial measures made public by other groups and should not replace GAAP financial measures prepared pursuant to IFRS standards.

Annual Results 2019

2

Annual Results December 2019

Highlights

Antoine Frérot, Chairman and CEO

2019 : SOLID REVENUE AND PROFIT GROWTH (1/2)

KEY FIGURES

  1. CONTINUED SOLID REVENUE GROWTH : +4.3%(1) TO €27 189M
  1. EBITDA ABOVE OUR GUIDANCE: €4 022M , +4.5%(1)
  1. CURRENT EBIT OF €1 730M, +5.0%(1)

Proposal to increase

the dividend by 8.7% to

€1 per share(2)

  1. CURRENT NET INCOME OF €760M, +13.5%(1)
  1. VERY STRONG NET FCF AFTER ALL INDUSTRIAL GROWTH CAPEX OF €868M
  1. NET FINANCIAL DEBT SIGNIFICANTLY DOWN(3) TO €10.7bn, DOWN €884M vs. 31/12/2018
      • Leverage of 2.66x
    • Excluding the disposal of TNAI, net debt flat at €11.7bn

Annual Results 2019

(1) At constant forex

(2) Subject to approval of the AGM of April 22, 2020 (3) Incl. financial investments and divestitures

4

2019 : SOLID REVENUE AND PROFIT GROWTH (2/2)

KEY FIGURES

o Revenue of €27 189M, +4.3%(1)

Strong organic growth of 3.2%, achieved despite

unsupportive weather, continued decrease of recycled paper prices and downsizing of VWT activities

Fueled by commercial dynamism, good waste volumes (+1.5%) and favorable pricing

  1. EBITDA of €4 022M, +4.5%(1) : cost cutting ahead of target
    1. Cost savings of €248M
    2. Approx. 40% retained in EBITDA
  1. Very strong revenue growth outside France and in fast growing businesses
    1. France +2%; Europe excluding France +4.1%(1), Rest of the World +8.7%(1)
    2. Double digit growth of Hazardous waste +14% to €2.5bn
    3. Plastic Recycling +26% to €319M

o Very strong net FCF of €868M thanks to strict capex and WCR discipline

Annual Results 2019

(1) At constant forex

5

2019 : ANOTHER YEAR OF STRONG COMMERCIAL MOMENTUM Strong growth of new businesses adressing key environmental issues

  1. France
    • Water : Nîmes, Valenton, Nancy, Toulouse
    • Waste : Renewal of all our waste to energy contracts + new WTE and sorting facility in Bordeaux
  1. Europe
    • Waste : new C&I contracts in the UK, impact of tuck-ins in Belgium
    • Energy : new DHN in Slovakia (Levice), Energy Service contracts in Italy(Bergame,Trieste hospital) and Spain
  1. Asia
    • Water : JAPAN: 100% water O&M contracts renewed and new industrial water contracts: Lithium recycling facility for Toyota; Water treatment for Coca Cola .

    CHINA : new industrial water contracts : Longmen and Hynix (WWTP BOT)

    • Waste : hazardous waste treatment plants under construction (China, Singapore) and new plastic recycling facilities in China, South Korea (Doksan), Indonesia (Danone)
    • Energy : BES : Kong Kong /Southa . DHN : Kedong heating in China
  1. Africa Middle East
    • Industrial water treatment: renewal of BP Khazzan WWTP and new WWTP of the refinery of KIPIC in Koweit (7 years)
    • Hazardous waste : construction of Sadara treatment facility in Saudi Arabia
    • Energy efficiency : O&M of the Cleveland clinic in Abu Dhabi (5 years)
  1. Global Business /Technology and construction :
    • Roll out of new cutting edge desalination technology (the Barrel)
    • 3 new desalination contracts in Saudi Arabia, Bahrein and the UAE (backlog €521m)

Annual Results 2019

6

SUSTAINED PACE OF COST SAVINGS: €248M ACHIEVED IN 2019 AHEAD OF ANNUAL OBJECTIVE OF €220M

Savings by geography

Savings by lever

11% 2%

28%

28%

30%

France

Europe excl.

14%

29%

France

Rest of World

57%

Global Businesses

Purchasing

Operations

SG&A

HQ

€ 1 050M cumulated cost savings achieved from 2016 to 2019

Annual Results 2019

7

2016-2019 : SIGNIFICANT VALUE CREATION

Strong increase in ROCE from 2016-2019

Capital employed in €bn

9.0%

8.8%

2019 after tax ROCE

ROCE after tax

8.3%

including IFRS 16

before IFRS 16

15.9

15.8

15.8

16.2

15.6

8.4%

7.8%

+370 bp

7.4%

6.3%

6.1%

5.8%

5.5%

5.3%

2015

2016

2017

2018

2019

Capital employed (€bn)

ROCE after tax

WACC Euro

Annual Results 2019

8

2016-2019: STABLE NET FINANCIAL DEBT AND LEVERAGE RATIO OF 2.66X AT 31/12/2019

In € million

1 816

1 731

Leverage ratio

After IFRS 16: 2.66

9 622

9 264

9 285

9 748

8 949

Dec 2015

Dec 2016

Dec 2017

Dec 2018

Dec 2019

Net Financial debt including hybrid

IFRS 16

Annual Results 2019

9

2016- 2019 : DIVIDEND UP 37% IN 4 YEARS

Proposed 2019 dividend of €1.00(1) , up 8.7%

+10%

+8.7%

+5%

+10%

€1.00

€0.92

€0.80

€0.84

€0.73

2015

2016

2017

2018

2019 (1)

Annual Results 2019

(1)

Subject to approval of the AGM of April 22, 2020

10

2020 OBJECTIVES(1)

Revenue

Solid organic growth

Efficiency

At least €250M of cost savings

EBITDA

~ €4.1bn

Dividend

Growth on the trajectory of the plan 2020-2023

Annual Results 2019

(1) At constant exchange rates as of December 2019

11

Annual Results ending December 31, 2019

Claude Laruelle, CFO

STRONG 2019 PERFORMANCE

DRIVEN BY CONTINUED SOLID REVENUE AND EBITDA GROWTH

2018

Var. at

Var. Y-Y vs.

constant FX

2018

represented

In €M

2019

2018

vs. 2018

published

for IFRS16

represented

represented

and IFRS5(1)

Revenue

25 911

25 951

27 189

+4.8%(2)

+4.3%(2)

EBITDA

3 392

3 843

4 022

+4.7%

+4.5%

EBITDA margin

13.1%

14.8%

14.8%

Current EBIT(3)

1 604

1 644

1 730

+5.3%

+5.0%

Current net income- Group share

675

672

760

+13.1%

+13.5%

Net Income Group share

439

441

625

+41.8%

Net industrial Capex

1 752

2 189

2 201

Summary of FX impacts

€M

%

Net Free Cash Flow after growth capex

568

536

868

(vs. 2018)

Revenue

122

0.5%

Net financial debt (including lease debt)

-

11 564

10 680

EBITDA

6

0.2%

NFD excluding lease debt

9 750

9 748

8 949

Current EBIT

5

0.3%

Current Net Income

-3

-0.4%

debt

-64

-0.6%

(1) See Appendix 1

Net financial

(2) Like-for-like growth of +3.2%

Annual Results 2019

(3) Including the share of current net income of joint ventures and associates considered to be core Group activities

13

CONTINUED SOLID REVENUE IN Q4, 2019

DRIVEN BY INTERNATIONAL

2018

2019

Revenue growth at constant FX

Q1

Q2

Q3

Q4

Year

Q1

Q2

Q3

Q4

Year

France

+0.6%

-1.1%

+2.6%

+4.1%

+1.6%

+2.8%

+5.0%

+0.5%

+0.1%

+2.0%

Europe excl. France

+6.9%

+6.7%

+7.4%

+7.9%

+7.2%

+4.7%

+7.2%

+4.1%

+1.1%

+4.1%

Rest of the World

+14.7%

+13.2%

+10.7%

+9.4%

+11.9%

+6.6%

+9.0%

+9.0%

+10.0%

+8.7%

Global Businesses

+3.5%

-0.6%

+11.4%

+1.6%

+3.7%

+4.7%

+2.6%

-0.2%

-2.6%

+0.9%

TOTAL

+7.0%

+5.1%

+7.8%

+6.4%

+6.5%

+4.8%

+6.3%

+3.8%

+2.6%

+4.3%

Excl. Const & Energy prices

+4.6%

+5.3%

+5.1%

+6.4%

+5.4%

+3.6%

+4.4%

+3.7%

+2.1%

+3.4%

EBITDA growth at constant FX

+5.3%

+6.4%

+9.4%

+8.4%

+7.3%

+3.8%1

+7.3%1

+4.3%1

+3.0%1

+4.5%1

  1. Variation including IFRS16
      • Strong momentum in ROW in Q4 - Slower growth in Europe due to mild weather and decrease of recycled paper prices
    • Good Q4 for French water : volumes up 0.7% , and prices up 1.4% as expected.
    • Slowdown in France in Q4 in WASTE : lower collection volumes (selectivity policy); recycled paper prices sharply down in Q4 .
    • Rest of Europe: good dynamics in the UK and in Southern Europe. Central and Eastern Europe : moderate growth due to unfavorable weather
      conditions in the energy business. Northern Europe : impact of lower paper prices and mild weather in Germany
    • Strong growth in Rest of the World (+10%) : notably in Asia (of which China +24% and Japan +12.4%). US : low Q4 in energy (weather related)

Global Businesses: Solid hazardous waste - Construction down due to VWT decided downsizing

14

REVENUE OF €27 189M, UP +4.3% AT CONSTANT FX AND +3.2% LIKE-FOR-LIKE - ANALYSIS BY SEGMENT

27 189*

25 951*

4 734

4 666

6 620

7 303

9 136

9 501

Variations vs. 2018

Variation

At constant

At constant scope

represented

and FX

FX

+1.5%

+0.9%

+0.8%

Global business

Rest of the World

+10.3%

+8.7%

+5.8%

Europe excl. France

+4.0%

+4.1%

+3.4%

France

+2.0%

+2.0%

+1.8%

Total

+4.8%

+4.3%

+3.2%

5 499

5 612

2018 represented

2019

Annual Results 2019

* Including other €30M in 2018 and €39M in 2019

15

REVENUE OF €27 189M, UP +4.3% AT CONSTANT FX AND +3.2% LIKE-FOR-LIKE - ANALYSIS BY EFFECT

FX : +€122M o/w : Argentinian Peso -€78M, USD +€127M

In €M

Like-for-like growth : +3.2%

+0.5% +1.1%

+0.2% -0.2% +1.8% +1.3% +0.1%

  • SCOPE : +€282M o/w : CHPs in Slovakia, plastic Recycling in China, BES in Hong Kong, waste assets in Portugal. Scope includes the 2018 SCVK disposal and contract evolution in water in Czech Republic (impact -€130M)
  • ENERGY & RECYCLATE PRICES: +€58M, o/w: €+134M
    energy prices (after +€177m in 2018) : Europe +€170M (Germany and Poland), partially offset in the US (-€50M). Recycled material prices : -€76M (after -€90M in 2018) : average recycled paper prices down 17% in 2019 partially offset by plastics ( +14%)
  • WEATHER (ENERGY): -€68M (-€28M in 2018) o/w -€20M in Northern Europe, -€29M in Central Europe, -€19M in the US
  • VOLUMES/COMMERCE/WORKS : +€481M : Volumes :
    +€269M : o/w Waste : +1.5%. Commerce : +€111M : mostly
    from Rest of World. Construction : +€101M (+€108M in 2018)
    : higher works in Waste in France (incinerators renewals) ; rebound of Sade in France and downsizing of EPC business at VWT (revenue down 7.6% at constant forex)
  • PRICE INCREASES : +€332M (+€243M in 2018) : WASTE
    +2.4% mainly in France, the UK, Germany, Latin America, & Toxic Waste.

Annual Results 2019

16

WASTE REVENUE OF €10 167M, UP +5.9% AT CONSTANT FX

2019

Recycled raw materials price

-0.8%

Volumes / activity levels

+1.5%

Price increases

+2.4%

Other

+0.6%

Including -1.1% impact

of recycled paper

Growth at constant scope & exchange rates

+3.7%

prices and volumes

Scope effect

+2.2%

Growth at constant exchange rates

+5.9%

Currency effect

0.0%

Continued strong year for the Waste business: +5.9% growth at constant FX

Strong year for hazardous waste, in Europe, Asia and the US =>Revenue up 14% to €2.5bn

Continued high speed development of plastic recycling : Revenue up 26% to €319M

Solid PFI performance in the UK : 94% utilization rate

… Partially offset by decided reduction of municipal collection contracts and by sharp decline of recycled paper prices

In Q4: organic growth of 3.4 % excluding the -2.5% impact of recycled paper prices and volumes

Average market paper price down 48% in Q4 => reduction of our exposure to recycled paper market (lower volumes)

Lower Q4 2019 price increases due to first adoption of hyperinflation standard in Argentina in Q4, 2018

Some waste treatment facilities reached their annual authorized capacity before year-end

Annual Results 2019

Scheduled maintenance outage on several sites in France and in the UK

17

EBITDA of €4 022M, up +4.5% at constant FX and +4.8% like-for-likeContinued improvement in operational performance

Forex: +€7M : o/w Arg Peso -€11M, USD +€14M

Scope : -€12M : impact of 2018 & 2019 tuck-ins net of

In €M

SCVK disposal and contract evolution in North Bohemia

(impact -€71M)

Commerce/Volumes/Works : +€91M : continued

growth in waste volumes (+1.5% YTD) and robust

commercial dynamism

Weather (Energy) : -€17M , o/w CEE -€10M,Northern

Like-for-like growth : +4.8%

Europe -€5M, USA -€5M, China +€3M

-0.1%

+2.4%

-0.4%

-1.4%

-2.2%

+6.4%

Energy, recycled materials prices : -€53M(vs. -€69Min 2018) . ENERGY: -€23M :in Europe, heat and electricity prices to progressively offset fuel and CO2 costs; lower energy prices in the US vs. winter 2018 cold peak. RECYCLED MATERIALS : -€30M (vs. -€16Min 2018) due to paper prices

Price effect, net of cost inflation : -€85M(vs. -€130Min 2018) : lower price cost squeeze thanks to higher indexation of water and waste contracts

Favorable impact from cost reductions: +€248M largely ahead of the annual objective of >€220M

Annual Results 2019

18

FRANCE

VOLUME GROWTH AND PRICE INCREASES IN WATER AND WASTE

In €M

2018

2019

represented(1)

At constant FX

Revenue, of which

5 499

5 612

+2.0%

+2.0%(2)

Water

2 942

3 004

+2.1%

+2.1%

Waste

2 558

2 608

+2.0%

+2.0%

EBITDA

900

900

+0.0%

+0.0%

EBITDA margin

16.4%

16.0%

  • WATER : good revenue growth, and enhanced profitability, as planned
    • Revenue up 2.1%

o Volumes : +0.7% (vs. -0.7% in 2018)

o Commerce : renewal of Toulouse potable water, of Nancy Waste Water; gain of Nimes and confirmation of the restart of the Valenton waste water treatment plant in September

o Tariff increases: +1.4% vs. +0.7% in 2018, limiting price cost squeeze

    • EBITDA up due to efficiency gains of the Plan «Osons 20/20»
  • WASTE : accelerated repositioning of traditional activities : lower municipal collection volumes and decline of paper recycling activity
    • Revenue up 2%

Volumes/Commerce flat (with a very high comparison basis : +5.3% in 2018). Municipal collection down 5% due to selectivity in contract renewal; solid C&I collection (+3%) and successful renewal of our incinerator concessions (Nantes, Lille, Rouen, Orléans, etc.)

Service price increases : +1.6% but continued lower recycled paper prices (average price down 19% : impact -€32M on revenue)

  • EBITDA down due to continued depressed recycled paper prices (-€13M impact on EBITDA), higher maintenance and insurance costs, partially offset by efficiency gains

Annual Results 2019

(1) Proforma IFRS 5 & IFRS 9

(2) Like-for-like growth of +1.8%

19

REST OF EUROPE

GOOD PERFORMANCE IN ALL REGIONS

2018

2019

At constant FX(2)

In €M

represented(1)

Revenue, of which

9 136

9 501

+4.0%

+4.1%

Central & Eastern Europe

3 172

3 296

+3.9%

+4.5%

UK - Ireland

2 193

2 298

+4.8%

+4.0%

Northern Europe

2 718

2 738

+0.7%

+1.1%

Italy- Iberia

1 053

1 169

+11.0%

+11.0%

EBITDA

1 472

1 501

+2.0%

+2.1%

EBITDA margin

16.1%

15.8%

+6.9%

excluding the SCVK one off

  • Central and Eastern Europe: good performance despite mild weather
    • Revenue up +4.5%(3) : ENERGY revenue of €2 126M up 9.7%(3) due to and heat and electricity price increases, despite unfavorable weather impact of -€29M(-€47M in Q1, +€39M in Q2 and -€22M in Q4). WATER revenue of €1 122M, up 6.5%(3) excluding the -€130M impact of the SCvK contract evolution, thanks to water tariff increases in Prague, Sofia and Bucarest , and water volume increase of +3.6%.
  • UK- Ireland : good performance
    • Revenue up 4.0% (3) o/w WASTE €1 896M, up 3.7%: good year for PFI (94% availability). Good landfills volume and pricing. Strong hazardous waste and Plastic businesses. Service price increases (+3.2%) offset by lower selling prices of paper (-27%)
  • Northern Europe : slow growth due to mild weather and decreased paper prices
    • Revenue up +1.1%(3) : WASTE revenue of €1 433M, up 4.6% : service price increases offset lower recycled volume and prices. ENERGY (GERMANY): lower volumes of energy sold and unfavorable weather partially offset by energy price increases (electricity +15%)
  • Italy- Iberia : double-digit growth and enhanced profitability
    • Revenue up +11.0%: resumption of strong revenue growth in Italy (+10.1%) and in Iberia (+12.5%), with a high contract renewal rate (mostly energy efficiency contracts). Integration of Renascimento waste assets in Portugal (annual revenue €23M)

Annual Results 2019

(1) Proforma IFRS 5 & IFRS 9

(2) Like-for-like growth of +3.4%

(3) At constant FX 20

REST OF THE WORLD: SOLID GROWTH IN ALL GEOGRAPHIES

CONTINUED EXCEPTIONAL DELIVERY IN ASIA

2018

2019

At constant FX(2)

In €M

represented(1)

6 620

7 303

+10.3%

+8.7%

Revenue, of which

Asia

1 790

2 135

+19.3%

+16.2%

795

853

+7.3%

+16.0%

Latin America (Latam)

2 036

2 168

+6.5%

+1.2%

EBITDA

North America

growth driven

Pacific

1 025

1 087

+6.1%

+7.9%

by Asia

Africa Middle East (AME)

974

1 060

+8.9%

+5.5%

(China +19%,

EBITDA

1 062

1 160

+9.2%

+8.2%

Japan +14%),

AME and

EBITDA margin

16.0%

15.9%

Latam

Asia: continuation of very strong Revenue and EBITDA growth

Revenue up +16.2%(3) o/w WASTE revenue of €632M up 18.9%(3) notably in China (hazardous waste revenue up 16% vs. LY ; integration of Huafei Plastics); numerous developments in Singapore, Hong Kong, Taïwan. ENERGY revenue of €481M, up 38.3% : Harbin (China) heating area extension and pursuit of growth in energy efficiency contracts . WATER revenue of €1 022M, up 6.5%: strong growth of industrial water in China and of municipal and industrial water in Japan:100% renewal rate of O&M contracts, new Hamamatsu concession, start up of the Lithium facility

Latin America : continued strong growth : Revenue +16%(3) driven mostly by Grupo Sala in Columbia and tariff increases in Argentina

North America : Revenue +1.2%(3) : ENERGY revenue down due to less severe winter vs. PY and lower energy prices. WASTE revenue up 6.6% thanks to hazardous

waste volume and price increases. WATER revenue up 3.1%

Pacific: Revenue +7.9%(3) : WATER : Restart of the Sydney desalination plant - WASTE (revenue of €808M, +7%) : lower waste collection volumes partially offset by

good treatment volumes and industrial services

Africa Middle East (+5.5%) growth driven by new contracts in Middle East and good volumes in Morocco

Annual Results 2019

21

(1) Proforma IFRS 5 & IFRS 9

(2) Like-for-like growth of +5.4%

(3) At constant FX

GLOBAL BUSINESS

STRONG HAZARDOUS WASTE

In €M

2018

2019

At constant FX(2)

represented(1)

Revenue, of which

4 666

4 734

+1.5%

+0.9%

Construction

2 841

2 823

-0.6%

-1.2%

Hazardous waste Europe

1 248

1 311

+5.0%

+4.6%

Other (of which VIGS)

577

600

+4.1%

+3.2%

EBITDA

361

396

+9.8%

+10.6%

EBITDA margin

7.7%

8.4%

  • Construction : VWT downsizing offset by good level of activity of SADE in France
    • VWT : €1 501M, -7.6%(3) :
      o Backlog of €2.1bn, up +12% vs. Dec. 2018, due to higher bookings (€2 149M in 2019 vs. €1 721M in 2018) with the 3 desalination facilities in Saudi Arabia and Bahrain and active French WWTP market
    • SADE : €1 322M, +7.1%(3) : good level of activity in France in works and in telecom services
  • Hazardous waste Europe : very strong revenue and EBITDA growth
    • Volume growth (+2.8%) and price increases (+5% in incineration)
    • Good commercial momentum

EBITDA up +10.6%(3) driven by repositioning actions in Construction and by the strong growth of Hazardous waste

Annual Results 2019

(2) Like-for-like growth of +0.8%

(3) At constant FX

22

(1) Proforma IFRS 5 & IFRS 9

CURRENT EBIT UP +5.0% AT CONSTANT FX TO €1 730M

2018

2018

2019

Variation vs.

Var. vs. 2018

In €M

published

represented(1)

2018

represented at

represented

constant FX

EBITDA

3 392

3 843

4 022

+4.7%

+4.5%

Renewal expenses

-280

-280

-280

Depreciation & Amortization (including principal

-1 704

-2 117

-2 192

payments on OFAs)

Provisions, fair value adjustment & other(1)

+80

+82

+52

Share of current net income of joint ventures and

+116

+116

+130

associates (2)

Current EBIT

1 604

1 644

1 730

+5.3%

+5.0%

  • D&A (excl. OFA reimbursements) of €2 057M include €440M of IFRS16 D&A (stable). D&A are up €69M at constant FX, mostly due to tuck ins and growth capex
  • Share on net income from JVs and associates: €130M of which China €76M
    • 2018 net income from JV included a €16M capital gain in the US

(1)

Including capital gains on industrial divestitures

Annual Results 2019

(2)

Excluding capital gains on financial divestitures

23

CURRENT NET INCOME UP +13.5% AT CONSTANT FX TO €760M

2018

2018

2019

Variation vs.

Var. vs. 2018

In €M

published

represented(1)

2018

represented at

represented

constant FX

Current EBIT(1)

1 604

1 644

1 730

+5.3%

+5.0%

Cost of net financial debt

-414

-414

-441

Other financial income and expense

-148

-192

-155

Income tax expense

-205

-204

-227

Non-controlling interests

-162

-162

-147

Current net income - Group share

675

672

760

+13.1%

+13.5%

Current net income - Group share

679

676

734

+8.5%

+8.8%

Excluding net financial capital gains (2)

    1. Including the share of current net income of joint ventures and associates of entities viewed as core Company activities
    2. Including related taxes and minorities
  • Cost of net financial debt of -€441M vs. -€414M in 2018:
    • Increased cost and volume of non-euro denominated debt combined with cost of carry of the bond issuances in anticipation of the April 2019 bond redemption partially offset by active debt management
    • Stable net financing rate : 4.19% at 31/12/2019 vs. 4.18% at 31/12/2018
  • Other financial income and expense of -€155M include : 1/ interest (cash) on IFRIC 12 concession liabilities of -€81M (vs. -€94M in 2018); 2/ IFRS 16 lease financial charges of -€41M (stable); 3/ non cash charges related to the unwinding of the discount of provisions of -€31M (stable); 4/ Net financial capital gains of +€24M (of which capital gain on the Foshan divestiture in China) vs. +€4M in 2018

Current tax rate of 23% vs. 22% in 2018 represented

Annual Results 2019

24

NET INCOME GROUP SHARE UP +42% TO €625M

2018

2018

2019

Variation vs.

Var. vs. 2018

In €M

published

represented(1)

2018

represented at

represented

constant FX

Current net income - Group share

675

672

760

+13.1%

+13.5%

Non current items, net of tax

Non current impairments

-38

-38

-67

Restructuring charges

-109

-113

-121

Net income from discontinued operations

-89

-81

-117

and other items

Capital gains

0

0

170

Net income - Group share

439

441

625

+41.8%

+36.8%

  • Net income from discontinued operations and other items : in 2019 the impact of discontinued operations in construction, resulting from VWT decided downsizing.
  • Non current capital gains include in 2019 the net capital gain on the divestiture of our municipal energy assets in the US

Annual Results 2019

25

VERY STRONG NET FCF(1) OF €868M THANKS TO STRICT CAPEX AND WCR DISCIPLINE

  • Net industrial Capex of €2 201M, vs. €2 189M, ~flat
  • Gross industrial capex of €2 364M vs. €2 268M
    • Maintenance capex : €1 273M (o/w €398M IFRS16) vs. €1 253M
    • Stable growth contractual capex : €729M
    • Discretionary growth capex sharply up from €309M to €362M
  • Very strong progression of Net Free Cash Flow(1) to €868M
    • Improvement of +€332M vs. 2018 due to EBITDA increase, strict capex control, and another significant WCR reduction of €209M
  • Net financial debt of €10 680M, down 884M vs. Dec. 2018
    • Down €884M vs. December 2018 thanks to net FCF generation and positive net financial acquisitions due to the closing of the divestiture of municipal energy in the US in December 2019
    • Excluding TNAI divestiture, NFD of 11.7bn and €10bn before IFRS 16, stable since 2015 (including hybrid)
    • Leverage ratio of 2.66x
      1. Net free cash flow corresponds to the free cash flow of continuing operations, i.e. the sum of EBITDA, dividends received, operating cash flow from financing activities, and the variation of operating working capital, less all net industrial investments, net interest expense, tax expense, restructuring charges, other non current expenses and renewal expenses

In €M

2 268

2 364

362

309

729

706

1 253

1 273

DEC 2018 (represented)

DEC 2019

In €M

868

536

DEC 2018 (represented)

DEC 2019

In €M

11 564

10 680

1816

1731

9 748

8 949

DEC 2018 (represented)

DEC 2019

Discretionary growth capex

Contractual growth capex

Maintenance capex incl. IFRS16

Lease Debt

NFD

26

EVOLUTION OF NET FINANCIAL DEBT

(1)

Financial acquisitions of -€619M net of divestments of +€1 490M

Annual Results 2019

(2)

o/w €509M to shareholders

27

2020 OBJECTIVES(1)

Revenue

Solid organic growth

Efficiency

At least €250M of cost savings

EBITDA

~ €4.1bn

Dividend

Growth on the trajectory of the plan 2020-2023

Annual Results 2019

(1) At constant exchange rates as of December 2019

28

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Veolia Environnement SA published this content on 28 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 February 2020 07:47:01 UTC