Veolia Environnement : Key figures for the nine months ended september 30, 2020

PRESS RELEASE

Paris, 5th of November 2020

KEY FIGURES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(UNAUDITED IFRS FIGURES)

Q3 RESULTS ABOVE EXPECTATIONS:

STRONG REBOUND IN ACTIVITY COMPARED TO Q2 2020,

AND RESULTS ABOVE Q3 2019

ACQUISITION OF 29.9% OF SUEZ'S CAPITAL ON OCTOBER 6th 1st STEP OF THE CREATION OF THE WORLD LEADER OF THE ECOLOGICAL TRANSFORMATION

• REVENUE : €18 705M and €6 293M IN Q3, FLAT 1
• EBITDA : €2 492M and €893M IN Q3, UP 2.5% 1
• GOOD OPERATING LEVERAGE THANKS TO THE COST SAVINGS PROGRAM AHEAD OF ANNUAL OBJECTIVE: €395M ACHIEVED AT 30 SEP TEMBER
• CURRENT EBIT : €771M and €333M IN Q3, UP 4.3% 1
• NET CURRENT INCOME GROUP SHARE : €149M and €142M IN Q3, UP 10.6%1
• NET FINANCIAL DEBT OF €11 745M DOWN €742M vs. SEPTE MBER 2019

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• OBJECTIVE FOR THE END OF THE YEAR: Q4 OPERATING PERFORMANCE EQUIVALENT TO Q4 20192

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• ACQUISITION ON OCTOBER 6th OF 29.9% OF SUEZ'S CAPITAL FROM ENGIE AT €18 PER SHARE FOR A TOTAL OF €3.4BN
• CONFIRMATION OF OUR INTENTION TO LAUNCH A VOLUNTARTY TENDER OFFER AT €18 PER SHARE ON SUEZ'S REMAINING CAPITAL (70.1%) AS SOON AS THE PROJECT IS ACCEPTED BY THE CURRENT SUEZ'S BOARD OF DIRECTORS OR BY A BOARD RENEWED BY ITS SHAREHOLDERS

1. At constant scope and FX
2. At constant FX (as of end 2019)

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Press Release

Paris, 5th of November 2020

Antoine Frérot, Veolia's Chairman and CEO stated: «In a global economic context heavily impacted by the sanitary crisis, Veolia has reacted swiftly to implement the safest working conditions for its employees and has once again demonstrated its capacity to absorb shocks, to recover quickly and strongly and to pursue ambitious plans for the future. The rebound that began in June and was amplified during the summer has resulted in a very good Q3: revenue was back at the level of 2019, while profits were above, thanks to the adaptation measures put in place at the beginning of the crisis. I am very proud of all the work accomplished and I would like to thank all our employees whose total commitment has enabled us to continue to deliver high quality services to our clients and to recover a positive momentum very quickly. This is par for the course for the benchmark environmental services company.

At the same time, we have initiated the most important project for Veolia in 30 years. On October 6th, we bought a 29.9% stake in Suez from Engie, with the goal of acquiring the remaining shares so as to create the world champion of the ecological transformation. Thanks to a unique complementarity, the new Group resulting from this industrial project will create value for all its stakeholders at a time when the priority given to environmental issues has never been greater.

• Revenue in Q3 was €6 293 million compared to €6 441 million in Q3 2019, stable at constant scope and exchange rates. Revenue for the 9 months reached €18 705 million compared to €19 765 million in 9M2019, -5.4% at current scope and exchange rates, and -3.8% at constant exchange rates

The Group had a good start of the year before the COVID crisis outbreak mid-March, then rebounded as soon as June, and continued this recovery throughout the 3rd quarter. .

At constant scope and exchange rates, Q1 was nearly flat at -0.5%. Q2 revenue was down by 10.8%, recovering since May, followed by a strong improvement in June. In Q3, the recovery continued and revenue was stable (-0.1%).

Exchange rate variations unfavorably impacted revenue growth by -€214 million (-1.1%) on the 9 month revenue.

Scope impact was negative too and stood at -€101M, mostly due to the divestiture at the end of 2019 of our municipal energy business in the US (TNAI), partially offset by new developments in Hong Kong, Chile and Spain mostly.

The volume/commerce impact was negative by -€862M on revenue, or -4.4%, due to the consequences of the sanitary crisis, but by only -€50M(-0.8%) in Q3..

Strict pricing discipline has resulted in a positive impact of +€206M on the Group's revenue (+1.0%) for the 9 months and of +€63M in Q3 (+1.0%).

Energy prices had a positive impact of +€32M on revenue, and recycled material prices weighed for -€120M, (of which -€74M due to recycled paper).

By geography and at constant exchange rates, the evolution for the 9 month sand in Q3 is as follows:

1. In France, activity rose by +0.8% in Q3. Water revenue increased by 1.0% due to volumes up 0.8% and tariffs up 1.5%. Summer was good, even compared to a 2019 which was already up in terms of volumes. Waste revenue was up by 0.6%, including volume increase of 1%, and prices up 2%. This good dynamics was slowed by decreasing recycling activities, mostly in paper. Over the 9 months, France revenue was down 3.9% in Water and -8.8% in waste.

1. Europe excluding France increased by +0.8% in Q3 thanks to the very good performance in Central and Eastern Europe, up +8.3% thanks to good performances both in Water and Energy. The UK (including Ireland) exhibited a slight revenue decline of -1.3% due an exit from lockdown delayed compared to other European countries. Northern Europe was down by 4.4%. Southern Europe (Italy, Spain, Portugal) was up by +0.3%. Over the 9 months, Europe excluding France is down by 1.5% with variances in the above mentioned zones of respectively +2.7%, -4.3%,-4.7% and +0.4%.

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Press Release

Paris, 5th of November 2020

1. Rest of the World exhibited diverse performances in Q3. Latin America was up +7.7%, thanks to tariff increases complemented by tuck-in acquisitions in Chile and Brazil, Africa Middle East grew by +1.6% with an activity rate back to 2019 level in Morocco, North America was down by -5.6% at constant scope and perimeter due to the slowdown in the refining activity, Asia decreased by -5.1% with notably the end of several construction works, low margin activities not harming the continued results growth, and Pacific was down by -2.4% following the lockdown in Melbourne. Over the 9 months, trends are more favorable, helped by the strong underlying dynamics of all the countries. Asia grew by +1.5%, Latin America by +6.4%, Africa Middle East was stable, North America was slightly down by 3% at constant scope and exchange rates and Pacific showed a slight decline of -1.1%

1. Global businesses were up by 3.1% in Q3. Hazardous waste activities were stable with good levels of activity in incineration and landfilling, and a continued strict pricing discipline. Construction rebounded sharply, after being halted in Q2, and are up +9.9%, of which +9.8% for Veolia Water Technologies and +10.1% for SADE. Over the 9 months, Global business revenue remains down due to Q2 lockdown, including -3.0% in Construction and -8.6% in Hazardous Waste..

In Q3, at constant exchange rates, revenue was stable and split by business was as follows: Water and Waste water revenue increased by +2.6%. Waste declined by -3.4%with volumes down -2.6%,tariffs up +1.6%, and an impact of recycled material prices of -0.9%.Energy was up by +0.8%. Over the 9 months, and at constant scope and exchange rates, Water was down by -1.9%,Waste by -6.1%,Energy by -2.2%and Technology and Networks by -3.8%.

• EBITDA increased by +2.5% at constant scope and forex in Q3, to €893M thanks to the additional cost cutting. EBITDA for the 9 months reached €2 492M vs . €2 894M at 30 September 2019.

1. Adaptation measures put in place to offset the negative impacts of the sanitary crisis have allowed the Group's results to rebound sharply in Q3 and to be even higher than Q3 2019, ahead of our plans

1. Over the 9 months, scope effect was negative by -€44M mainly due to the divestiture of the municipal energy business in the US. Forex effect was negative by -€33M mostly due to Latin America and Central and Eastern Europe.

• 1. At constant scope and forex, Q3 EBITDA grew by +2.5%, including a neutral volume effect thanks to the "Recover and Adapt" adaptation measures put in place for €80M , a price cost squeeze of -€34M and the strong contribution of the efficiency plan for +€64M. Over the 9 months, EBITDA stood at €2 492M vs. €2 894M at September 30 2019, including a cumulated volume/commerce impact of -€432M due to sanitary crisis.
• Current EBIT was up +4.3% at constant scope and forex in Q3 2020, to €333M. At September 30 2020, current EBIT reached €771M vs. 1 190M in 9M2019.
• 1. Forex effect of -€13M over the 9 months.

• 1. In Q3, Current EBIT reached €333M, up +4.3% at constant scope and forex, thanks to EBITDA improvement, lower depreciation and amortization (-€22M) offset by higher renewal expenses (+€22M). Provisions, Fair Value adjustments and capital gains on industrial divestments were up €7M. Share of current net income from Joint Ventures and associates was down by €4M to €33M.
• Current net income group share in Q3 was up +10.6% at constant scope and forex (+6.8% current) to €142M. Over the 9 months, current net income group share reached €149M vs. €486M in 9M 2019.

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Press Release

Paris, 5th of November 2020

1. Cost of financing was down to -€315M vs. -€333M in9M 2019 thanks to favorable refinancing conditions and lower net financial debt. Other financial income and expense reached -€127M vs. -€132M in 9M 2019.

1. Capital gain on financial divestments were down to +€9M vs. +€14M in 9M 2019.

1. Income tax expense is down to -€98M vs. -€151M in9M 2019.

• 1. Non-controllinginterests reached -€67M vs. -€89Min H1 2019
• Net financial debt was €11 745M at 30 September 202 0 vs. €12 487M at 30 September 2019, down by €742M vs. September 2019.
• 1. Net financial debt favorable evolution is due to controlled capital expenditures, down by €121M. This decrease is mostly attributable to maintenance investments. Growth projects have been maintained at €211M vs. €241M at 30 September 2019. Working capital requirement has continued to improve (+€79M) thanks to strict cash management.

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• Outlook 2020(1) : Q4 objectives confirmed

1. Taking into consideration the recovery of our activities since the end of the lockdown and our Q3 performances, we confirm our objective of an operational performance in Q4 2020 equivalent to Q4 2019

1. The strategic choices included in Impact 2023 remain relevant.

1. At constant exchange rates (as of December 2019)

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• Acquisition of a 29.9 % stake in Suez from Engie on 6th October 2020 in order to create the world champion of the ecological transformation

1. On 31 July 2020, as part of a strategic review, Engie announced to envisage the divestment of some of its businesses including its stake in Suez.

1. On 30 August 2020, Veolia proposed to acquire 29.9 % stake in Suez from Engie at €15.5 per share and then raised the price to €18 on September 30, for a total consideration of €3.4bn.

1. On 6 October Engie accepted Veolia's offer. After the acquisition of the 29.9% in Suez, Veolia intends to launch a voluntary tender offer on the remaining share capital of Suez at €18 per share (coupon attached) once our project is accepted by Suez's current Board of Directors or by a Board renewed by its shareholders.

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