Veolia Environnement : Financial review on December 31st 2021

OPERATING AND FINANCIAL REVIEW

Consolidated Financial Statements for the year

ended December 31, 2021

Draft version of March 17, 2022

(under audit)

	CONTENTS
1	SUEZ COMBINATION ............................................................................................................................	3
1.1	Suez combination ........................................................................................................................................	4
2	MAJOR EVENTS OF THE PERIOD ....................................................................................................	8
2.1	Business and income trends........................................................................................................................	9
2.2	Changes in Group structure - Strategic Program .....................................................................................	10
2.3	Group financing .........................................................................................................................................	13
2.4	Performance share plan and Group savings .............................................................................................	14
3	ACCOUNTING AND FINANCIAL INFORMATION .........................................................................	17
3.1	Key figures .................................................................................................................................................	18
3.2	Group revenue...........................................................................................................................................	19
3.3	Group EBITDA...........................................................................................................................................	24
3.4	Other income statement items...................................................................................................................	26
4	FINANCING ..............................................................................................................................................	32
4.1	Change in Free Cash Flow and Net Financial Debt ..................................................................................	33
4.2	Industrial and financial investments...........................................................................................................	35
4.3	Operating working capital ..........................................................................................................................	36
4.4	External Financing .....................................................................................................................................	37
5	OTHER ITEMS.......................................................................................................................................	39
5.1	Return on Capital Employed (ROCE)........................................................................................................	40
5.2	Statutory Auditors' fees..............................................................................................................................	41
5.3	Related-party transactions.........................................................................................................................	41
5.4	Subsequent events ....................................................................................................................................	41
5.5	Risk factors ................................................................................................................................................	42
5.6	Outlook.......................................................................................................................................................	42
6	APPENDICES.......................................................................................................................................	43
6.1	Reconciliation of data published in 2020 and 2019 with data re-presented in 2021 .................................	44
6.2	Reconciliation of GAAP indicators and the indicators used by the Group ................................................	45
6.3	Definitions ..................................................................................................................................................	47

VEOLIA ENVIRONNEMENT

OPERATING AND FINANCIAL REVIEW

Consolidated Financial Statements

for the year ended December 31, 2021

2021

Draft under review by the statutory auditors

VEOLIA ENVIRONNEMENT / OPERATING AND FINANCIAL REVIEW FOR THE YEAR ENDED DECEMBER 31,2021 1

Chairman's message

Antoine Frérot, Veolia's Chairman & CEO commented: « 2021 year ended on the same strong note as in the first nine month, achieving record results. Revenue growth remained strong throughout the year, both in terms of volumes (up 3%) and in value, thanks to the tariff indexation mechanisms in the majority of our contracts enabling to offset cost inflation. Moreover, the continued improvement of our efficiency has substantially amplified this increase of revenue. Our record results demonstrate the strength and the sound execution of our strategic program Impact 2023, particularly the new growth opportunities for international development and innovative offerings. It is these foundations that enable our Group to be resilient today in the face of the conflict in Eastern Europe, as in previous crises. Veolia therefore starts 2022 in good conditions, just as we begin to integrate the activities we bought from Suez through the tender offer. Close to 10 billion euros of revenue will complement our 2021 revenue of 28 billion €, an increase of more than 30% which will notably strengthen our international footprint, and accelerate innovation. This growth, in addition to the expected synergies, will enable our current net income to grow by more than 20% in 2022 and will enhance our earning per share by around 40% in 2024. The creation of the undisputed world champion of ecological transformation is underway and on track.»

2 VEOLIA ENVIRONNEMENT / OPERATING AND FINANCIAL REVIEW FOR THE YEAR ENDED DECEMBER 31,2021

1

1 1 SUEZ COMBINATION

VEOLIA ENVIRONNEMENT / OPERATING AND FINANCIAL REVIEW FOR THE YEAR ENDED DECEMBER 31,2021 3