Veolia Environnement Adr

Good morning, ladies and gentlemen, and welcome to the Veolia H1 2024 results conference call with Estelle Brashinov, CEO, Claude Laruelle, CFO, and Emmanuel Manning, Deputy CFO. At this time, all lines are in a listen-only mode. Following the presentation, you will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded August 1st, 2024. I now would like to turn the conference over to Ms. Estelle Brashinoff. Please go ahead.

Thank you very much, and good morning, everyone. Thank you for joining us for this conference call to present the audience results for the first half of 2024. And before starting, I would like to sincerely thank Claude Laruelle, who has been our CFO for six years and within the group for 24 years. and has greatly contributed to the group's transformation. I also want to warmly welcome Emmanuelle Meining, who has been in the group for 10 years and deputy CFO for the past four years. She knows the group very well, and I'm sure she will continue close work with you with lots of passion and great professionalism. Both of them are with me this morning. Our first half-year results, and I'm on slide four, are once again excellent. and perfectly aligned with our annual targets. It is an excellent start for our green-up strategic plan, as those figures match our ambition and three value creation pillars. First, growth, with revenue increased by 4.4%, excluding energy price, enhancing our three booster activities, which are up plus 6.9%, as well as our three booster geographies, up plus 7.6%. Second, efficiency and synergies in line or ahead of our targets in H1. Third, capital allocation. I'm also proud that Veolia has become the first company to ever achieve double validation for its climate ambition and action plan from both SBCI 1.5 degrees and Moody's. I can fully confirm our 2024 as well as our long-term guidance. I'm now on slide five with a few more details on our first half financials, which are once again excellent and in line with our annual objectives. Sales in H1 are up plus 4.4% excluding energy price, which are essentially pass-through for us, and this is despite continued unfavorable weather conditions. This is thanks to the very strong performance of our water and waste businesses in particular, and I will come back to this shortly. EBITDA increased by a substantial plus 5.7% on a life-for-life basis, in line with our annual guidance of plus 5 to 6%, to 3,266,000,000. And current EBITDA by plus 6.6% to 1,730,000,000 in euros, of course. Current net income reached 731 million euros at plus 15.2% and well on track to achieve a 1.5 billion euro objective for the full year. Net financial debt is well under control and in line with our target of leverage ratio below three times at year end. These results allow me to fully confirm with confidence our 2024 guidance in all its components. Slide six, we registered very solid revenue growth of plus 4.4%, excluding energy price, fueled in particular by water and waste, which grew by 6.4% each. Regarding energy, as anticipated, lower energy prices have weighted on our top line, but in fact, our energy revenue has been flat even if we exclude the effect of energy price, and has even grown by plus 1.4% if we exclude negative weather effects. As you know, Our energy margin is well protected from the ups and downs of energy prices due to our unique positioning in local decarbonizing energy. We expect 2024 energy EBITDA to remain at the high level we reached last year, despite lower energy prices, as we've demonstrated in the first half. And as I said, we anticipated this. This is the reason why we've published our revenue growth to the energy price each quarter since 2022. as they do not impact our performance. On slide seven, this slide reminds you of the three pillars of value creation in our greener plan. Topline growth, efficiency, and capital allocation. Those are three engines supporting the group's strategy and performance. I will detail in the next few slides how each of these value creation pillars has contributed to our performance in H1. Starting with revenue growth, we combine, you know, stronghold activities, which are very resilient, social services and infrastructure-like, and they grow in line or slightly higher than inflation, as well as growth boosters whose yearly growth is expected in the range of six to 10%, so much higher than the group average. These growth boosters consist of three activities and offers. This is water technology, hazardous waste and local energy. as well as three geographical boosters, which are North America, the Middle East, and Australia. The second pillar of value creation is our operational excellence and cost efficiency. Each year, we deliver €350 million of efficiency gains, which have been topped up by cost synergies of the slave merger, an additional €500 million over four years. The third pillar is our capital location and transformation of our asset base. We target high value creating projects, either capex or token acquisition with synergies and in our stronghold activities, or to support our booster priorities. Our internal rule is IRR above WACC plus 4% and ROCE above WACC after year three for these investments. Meanwhile, we constantly review our portfolio of assets to check against strategic priorities and value creation ahead. This value creation model is the backbone of our green-up plan, which targets current net income growth of 10% per annum, dividend growth in line with EPS, and a ROCE post-actuables 9% in 2027. Let me detail now how each of the three pillars of value creation have translated into H1 results. I'm on slide 9, and I'm starting with top-line growth. In H1, we delivered solid revenue growth of plus 4.4% excluding energy price, thanks to very solid performance in our strongholds, which grew by plus 3.4% excluding energy price. Districating and cooling networks were impacted by lower energy prices as expected, but with protected margin, while water pressure and solid weight enjoyed solid revenue growth. Our booster activities have grown by plus 6.9%, driven by water technologies and hazardous waste activities. In terms of geographies, Australia, the Middle East, and the U.S. perform particularly well at plus 7.6% growth, and each above 6%, aligned with the high ambition laid out in our green uptime for those booster geographies. On page 10, you have a focus on the performance of our strongholds. which did very well in H1, with plus 3.4% revenue growth, excluding energy price. Municipal water operation and solid waste revenue progressed very well, with a good commercial momentum, as well as favorable indexation and continued pricing power for the 30% of our contracts, which are not indexed. Districating networks were flat, excluding energy price, due to mild weather in central and eastern Europe, but would have progressed otherwise. All our strongholds registered strong commercial wins, among which after the major renewal of the CEDIF contract in Q1, I would like to highlight two contracts in water. They both illustrate perfectly the synergies between our know-how and businesses. In this case, a combination of water and energy. I'm now on page 11. The new Saint-François wastewater treatment plant is located in the Lyon urban area in France. The municipality has chosen us to upgrade and run this very innovative wastewater treatment plant for six years, representing a backlog of 100 million euros. As you know, wastewater treatment plants are energy consuming. A different factor in this win was the ability to reduce by more than 15% energy consumption, as well as to provide locally sourced green energy for the plants at a secured price. as well as our PFS end-to-end treatment, which is quite unique, combining water technologies and hazardous waste treatment. Another illustration comes from New Orleans in the USA, where we have successfully extended our wastewater contract thanks to our energy efficiency tool, which is called Upgrade. On page 12, the performance of our greener booster activities in H1, which have grown by 6.9%, perfectly in line with the average mid-to-high single digit aimed at in our strategic plan. Water technologies, with €2.5 billion revenue in the first half, continue to perform exceptionally well in terms of sales, earnings and backlog. As the Swiss, at €2.2 billion, has enjoyed strong growth in Europe and in the US. We continue to invest in new facilities in the US, Saudi and Germany, which will be commissioned from 2025. In local decarbonizing energy, we notably registered strong growth in energy services in the Middle East in the first half and a very significant new energy efficiency contract in Hong Kong for a backlog of 185 million euros. On slide 13, you can see a detailed summary of our H1 achievements in water technology in terms of growth and bookings, which have reached 2.8 billion euros. As you remember, We have enjoyed a big success in dissemination in Dubai at ASEAN in Q1. We have also signed in the first half a series of 10 to 15 million euros projects in core markets for us, such as microelectronics and oil and gas, with the likes of Micron, Intel, Lionel Basil, Qatar Gas, et cetera. We keep a very strong pipeline with those core markets for us. I would deeply encourage you to join our deep dive on the 17th of October in Hungary to learn more about our water technologies and the solutions. Now, let's deep dive into our second level of value creation, which is performance and efficiency. I'm now on slide 15, which shows our first half performance in terms of operating efficiency and synergies. In terms of efficiency, we achieved 194 million euros in savings. in line with our annual target of 350 million euros. I am pleased to see the specific action plan launched in France last year bear its first fruit in H1. Our operation efficiency includes digital initiatives, and we are testing GenAI to get us to the next level. For example, in Spain, where we accelerated e-bill implementation, and we've optimized the call center system through AI. Slide 16, in terms of cost synergies derived from the Suez merger, we are ahead of schedule and have achieved 71 million euros in H1 for a cumulative total of 386 million euros since the start of the merger with Suez. After the first benefits that typically came from HQ mergers, followed by operational efficiencies, more than 50% now comes from the massification of our procurement in our key countries. In addition to 30%, that still comes from operational efficiencies, particularly within water tech. That's to say that we have progressed faster than expected in the delivery of the synergies. The last driver of value creation is capital allocation, where we were partly active in H1, and I'm on slide 18. As you can see, we are progressively transforming the group's portfolio to enhance value creation while staying in our three times leverage ratio. Our CAPEX program continues at a sustained pace with ongoing projects to build new hazardous waste treatment capacities to start from 2025, and we continue the conversion plant of our coal-fired facilities with double-digit RRs. Our growth capex also includes regulated water in the U.S., where return on equity is guaranteed at 10% on average. We have been quite active in terms of bolt-on acquisition as well, which deliver rapid synergies from flexibility assets in Hungary to recycling activities in Germany and a few other tokens in Brazil and Portugal. Finally, we signed more than 1 billion euros of non-strategic asset divestitures in H1, starting with STAAD, a construction company mainly operating in France, and Diluti for margins, and more recently with Lidec in Morocco, an antitrust divestiture linked to the Swiss acquisition, which had been delayed, as you know. We just announced the sale of our sulfuric acid recycling activities for refineries in the U.S. to AIP for $620 million, which will be closed today, an activity not core for us. which doesn't present any opportunity for duplication elsewhere. As you know, we make choices and prioritize investments in order to maintain a strict balance sheet discipline and average below three times. Finally, we continue to reduce our stake in our Chinese water concession and sold our minority stake in Haiku. These very good results in H1 confirm the strength of our business model, which is summarized on slide 20. Over the last few years, We've been able to grow our results quarter-after-quarter despite high inflation and interest rates, volatile commodity, energy price, and slower European industrial production. I remind you that 85% of our revenue is immune from macro trends, and we've proven that over the last two years, where we've had almost zero waste-borne growth, but still delivered mid-to-high single-digit EBITDA growth. On top of that, 70% of our revenue benefits from automatic indexation and is therefore fully protected from the cost of factory increase. For the other 30%, we are very good in price increase thanks to our pricing power, which is thanks to our top three position in key countries. I'm very happy about our balanced geographical footprint as well with 30% outside Europe. and our unique combination of wastewater and energy activities, which demonstrates its power for winning new contracts, just as I highlighted in the example a minute ago. Of course, Veolia is the leader of ecological transformation and benefits from many supportive megatrends, such as environment-related health concerns, decarbonization, of course, as well as reshoring of strategic industries and the shortening of supply chain, which supports a more circular economy. Worth noting that the latest ELAB barometer confirms that public opinion demands environmental action. 66% of the world's inhabitants believe that taking action will be less costly than inaction. Public opinion does support environmental efforts that depollute, decarbonize, and regenerate resources. There are banks thereby protecting their health and that of their loved ones at an optimized price. Water quality, water scarcity, pollutant, decontamination are here to stay, and we are the key to enable growth whilst protecting human health and quality of life. I'm on slide 21. And, you know, decarbonization is a powerful lever and source of value creation for Veolia and its customers over the long term. As you remember, we've announced with our green-up strategic plan an acceleration of our own decarbonization agenda, with the target enhanced to minus 50%, scope 1 and 2 by 2032, and net zero by 2050, a trajectory compatible with the 1.5 degree agenda. These targets have just been validated by the Science-Based Targets Initiative, SPTI, the international reference organization in the field. In particular, SBTI spreads Veolia for its ambitious net zero target, recognized as the most ambitious in the current SBTI process. Slide 22, you will see that this trade directory is based on a series of projects and investments, including existing coal in Europe, which carries a good IRR, or methane capture for non-fields in Latin America. To sum up on the slide 23, Veolia is a unique global leader in ecological transformation. Ideally positioned to address fast growing demand trends across the globe from water scarcity to decarbonization and decontamination to protecting human health. Slide 24, the very strong H1 results allow me to fully confirm our target for 2024. And we are very much in line with our green up objectives. The financial and non-financial objectives of our strategy plan are summarized in slide 24, and they include current net income growth of 10% per year on average, which is even going in line with EPS. And now I'll hand over to Claude, who will detail the H1 2024 results before we get to the questions.

Thank you, Estelle, and good morning, ladies and gentlemen. I'm very pleased to be with you this morning for my last Veolia earnings presentation. And you will see that the results are once again very strong. Emmanuelle, our Deputy CFO, will take on the full role on September 1st, is with me. And most of you already know her, as she was in our road shows for the past two years. You are in good hands. And moving back to the numbers, as Estelle already highlighted, our H1 2024 results are once again remarkable and allow us to be very confident for the rest of the year. With €22.1 billion revenue, we experienced a good organic revenue growth of 4.4%, excluding energy prices. It is a result, first, of our three strongholds, growing by 3.4% and driven by good commercial momentum, improved water and waste volumes, continued favorable indexation on our long-term contracts, and price increases on non-indexed businesses. And second are three boosters, which are growing much faster, as Estep said, at 6.9%, with high demand for water technologies, hazardous waste, and decarbonized energy. Taking into account the impact of lower energy prices that has almost no impact on EBITDA, H1 revenue was up by 0.4% despite unfavorable weather. Thanks to the operating leverage and the good delivery of synergies, we enjoyed a solid organic EBITDA growth of 5.7% at 3,266,000,000 and a current EBIT growth of 6.6% at 1,730,000,000. Our current net income increased even faster to 731,000,000, up 15.2%. Net income group share rose by a remarkable 24.5% thanks to strong decrease of non-recurring charges. We once again demonstrated that even in a rather complex economic context, Veolia is able to deliver fast-growing results. This is due to the strength of our businesses, largely immune to macro for about 85% of our revenue. Net financial debt remained well under control at 99 billion euros after the dividend payment in May. You can also see on the slide the detailed forex impact, which were negative in H1, minus 442 million at revenue level and minus 95 million at EBITDA level. Assuming the exchange rates remained at today's level, The full year impact at EBITDA level would be between 80 and 90 million, minus 80 and minus 90 million, as we expect a slightly positive forex impact in H2. The small negative forex impact at the current net income level should be offset by the capital gain on the SAT disposal, and we confirm our annual guidance of current net income above 1.5 billion, whatever the forex. As a reminder, as we operate in local currency, price impacts are only translation and not transaction impacts. I'm on slide 27, where you have our usual revenue bridge detailing the different effects and showing our top line increasing growth of 5.1%, composed of commercial wins and pricing, the two green boxes on the right-hand side of the bridge. Looking at the full bridge in more detail, what do we see? First, forex had a negative impact of minus 1.9%, mostly in Latin America. Scope impact is limited at minus 1.1%, with a sad disposal for more than $300 million and a few tokens. For organic growth, we continue to enjoy solid growth of 4.4%, excluding energy prices, which is fueled by good commercial momentum, volume growth, strong works activities, price and indexation increase in water and waste. The main item on the bridge is, of course, the lower energy prices for minus 970 million. Recycled prices are stabilized and the impact is insignificant in H1 at revenue and EBITDA levels. The weather impact was unfavorable, minus 0.6%, compared to 2023, which was already mild. As I said, in Q1, we experienced, in fact, the warmest winter in the past 30 years in Central Europe. And the heating season this year stopped two weeks earlier than last year. I'm moving to slide 28, where you can see the revenue evolution by geographical segment. And I start with water technology, which is one of our three boosters. It delivers another very strong Q2, both in terms of revenue and bookings. Revenue are up 15.5% with sustained growth in all our various lines of business. In terms of booking, we registered a record high level of $2.8 billion in H1 with big wins in desalination, microelectronics, and oil and gas. In the rest of the world, all regions performed very well. Notably, Australia had a very strong growth of 6.5% thanks to good waste performance, several contract wins, strict pricing discipline, and good landfill volumes. Latin America grew double digits. Underlying activity was well-oriented in Brazil, Chile, and Colombia with several new contracts. For example, Las Salinas in Chile for solar remediation or Braskem Biomass in Brazil. Africa Middle East revenue is up 4.6% thanks to strong business in Morocco and new energy efficiency contracts in the Middle East, in Dubai, and Abu Dhabi. North America continues to enjoy solid hazardous waste performance and good water activity. In hazardous waste, we managed to improve the mix and average prices are up 6%. In Asia, we have a solid growth in Hong Kong, plus 8% thanks to the very strong performance of our waste activity and our energy efficiency business. Japan was up 8.9% with strong performance of water. The rest of Europe's revenue was up 1.4%, excluding energy prices. In Central Europe, we had strong water activities with good volumes. In Northern Europe, we registered, I would say again, an outstanding UK performance, good indexations and strong PFI activity with a record availability of 94.6%. Southern Europe enjoyed strong activity and improved tariff indexation in water in Spain. Finally, in France, after a difficult 2023, we continued turning the tide after a good Q1. Revenue grew by 2.9%, an improvement after only 1.4% in 2023, thanks to good performance in water and waste. Water activity is well-oriented, with indexation at 4.6%. We enjoyed good commercial momentum and good pricing in waste in France. And now on slide 29, you can see the main train by activity that I will detail in the next slide. As we expected, water and waste businesses enjoyed a very good growth in H1, plus 6.4% each, which is remarkable in the context of lower inflation. They are fueling the revenue and the EBITDA growth of the group. As usual, we review our activities one by one, and I start with water, our largest activity representing 40% of our revenue. Water business grew by 6.4%, driven by volume, commerce for 2.2%, and pricing for 4.2%. Thanks to good volume in Central Europe, France was slightly down on volume, minus 0.5%, due to rainy weather during the spring, as well as Spain, minus 0.6%. We had continued favorable tariff indexation in France, in Central Europe, and in the U.S., with double-digit increase after the recent rate cases in New York and New Jersey. The semester was, of course, marked by the signing of the new CEDIF contract for 12 years, as well as the new Saint-François wastewater treatment plant contract near Lyon, which is still detailed. H1 was also marked by an outstanding water technology performance, In particular, our main brand business is a project business with a continuation of a contract in the U.S. and the start of the desalination project in the Middle East. We have also the chemical products well-oriented with good volumes and price increases. I'm moving to waste on slide 31. Waste activities grew at a faster pace than in previous quarter by 6.4%, compared to 3.4% last year and 5.5% in Q1, thanks to continued pricing power, improved volumes in Europe, and good commercial momentum in Australia and Latin America. To take a few examples, in Europe, the UK had a very good start to the year with very strong PFI and also CNI performance. In Germany, we had a strong commercial activity, and volumes slightly increased after a difficult 2023. France was better than last year in terms of volumes and also in terms of profitability. As Arduce Waste, we remain well-oriented in almost all our geographies, and we continue to expand good pricing power in the U.S. We cited prices, as I said, at a neutral impact as price increases in Q2. We manage our electricity from waste cells well, thanks to our hedging policy, with almost no impact. Finally, energy activity decreased by 14.5% due to energy prices and milder weather. Intrinsic energy growth was 1.4%, excluding weather and energy price impact. Thanks to our business model, with indexed tariff and energy prices essentially passed through, and thanks to our hedging policy, we have been able to protect our results. Energy pricing pact had almost no impact on EBITDA, and energy EBITDA will remain at a very high level in 2024, as we anticipated and as we are demonstrating. Weather was again unfavorable due to the very mild winter in Central Europe, with an impact of minus 2.2%. We also ramped up our very large district heating contract in Tashkent. On the electricity side, we were protected by a hedging policy which enabled us to mitigate the market price evolution. As a reminder, and as part of our Colexit program, we started new high-efficiency cogeneration with higher EBITDA, such as Braunschweig in Germany and Freyhof in Czech Republic. And we have more to come with Poznan in Poland in 2025. Finally, we signed significant new energy efficiency contracts in Belgium, Italy, Middle East, and Hong Kong. I'm on slide 33, and you have the EBITDA evolution by segment. Water technology registered an outstanding EBITDA growth of 31% thanks to very high revenue growth, operational efficiency, and synergies. Rest of the world, EBITDA is up 11.5%, notably North America, Africa, Middle East, and Pacific. In the rest of Europe, EBITDA was up 1.2%. Good water and waste performance was partly offset by an adverse weather impact. We also initiated profitability enhancement action in France with a strong commercial focus and very specific efficiency targets with quick returns. As a result, France EBITDA is up 5.1% in H1. I'm on page 34, and you have our usual EBITDA bridge. We deliver the strong EBITDA growth of 5.7% life-for-life, fueled by the combination of the solid underlying revenue growth, strong efficiency, and synergies ahead of schedule. In detail, Forex negative impact reach minus 95 million, as I said, mainly in Latin America. Scope included the disposal of SAD from March 1st and the integration of Bolton's assets in Germany. Energy and recycling impact was slightly negative, minus 1.2%. And as we expected, EBITDA for energy business is almost not impacted by the energy prices. Weather had an impact of minus 1.3% or minus 42 million euros with a mild winter in Central Europe. EBITDA intrinsic growth was therefore fueled by the two following effects. A more robust commerce and volume impact for 3.3%, continuous strong net efficiency and synergies for 4.9%. The synergy delivery continues to be a head of target, reaching 71 million euros in H1 and 386 million accumulated since the closing of the acquisition of Suez, which is remarkable. I'm moving now to slide 35. And let's see how the EBITDA increase is fueling the current EBIT and the current net income. Current EBIT grew by 6.6% to 1,730,000,000 euros. Renewal expense of 154,000,000 are comparable with H1 last year. Amortization and OFA repayment at 1,528,000,000 is up 3%. more than last year due to the ramp-up of our contract in Uzbekistan. Industrial capital gains, net of provision at 98 million are stable. JVs amount to 49 million, almost stable compared to last year. Our current net income increased faster to 731 million, up 15.2%. Cost of net financial debt increased by 19 million euros to $331 million due to a favorable one-off last year. Excluding this one-off, net cost of financing is stable at 3.83% in H1. Other financial income and expense increased from $120 million to $177 million. The full year number last year was $340 million with a very low H1 and a much higher H2 due to a favorable one-off in H1 2023, which was reversed in H2. This year is more steady and we expect around $350 million for the full year. We registered net financial capital gains of $53 million, mostly due to the sad disposal. Current tax rates stood at 26% compared to 28% in H1 last year, and we expect a 27% tax rate for the full year. Minority interest slightly decreased in H1 due to slightly less contribution for BU's in Chile and in Central Europe where we have minorities. For the full year, we expect around 400 million of minority interest. After a strong H1, we are well on track to meet our objective of current net income above 1.5 billion. I'm on stage 36, and let's see how the current net income translates into net income group share. Net income increased by 24.6% to 651 million compared to 523 last year. Non-recurring items, which is a sum of the three lines, decreased from minus $139 million last year to minus $80 million this year due to much lower integration costs. And now on slide 37, you see that CAPEX remained quite stable in this year and included $102 million of decarbonization CAPEX with good progress on our Poznan project. and 86 million of hazardous waste new projects, particularly in the U.S., in the Middle East, and in Germany. Seasonal reversal of working capital was slightly higher than last year at minus 998 million euros compared to minus 821 euros last year due to unfavorable calendar effects, which will not impact the free cash flow delivery of the year. We had higher payments in H1 2024 for CO2 quotas in Central Europe for 100 million. And we received high advance payments in water technology last year for around 50 million. Free cash flow improved strongly in Q2 by 289 million to minus 284 million in the first half. Net financial debt reached $99.9 billion, including the final repayment of the hybrid debt for $200 million after the renewal of our $600 million hybrid debt in November last year. Our solid investment grade rating has been confirmed by S&P and Moody's with a stable outlook. Taking into account the usual working capital reversal and the free cash flow generation in H2O, and the next cash proceeds from disposal and a few acquisitions, we expect the leverage ratio at year-end to be in the same range of last year, that was 2.74. I'm now on slide 38, and you have the details of the net financial debt variation, where you can see the different effects I have just highlighted. To conclude, we of course confirm our ambitious guidance for 2024, Revenue continued solid organic growth, excluding energy prices. EBITDA organic growth between 5% to 6%. More than 350 million of efficiency gains. More than 400 million accumulated synergies at the end of 2024. Current net income above 1.5 billion euros, which means a double-digit growth compared to 2023. leverage ratio below three times. And as usual, our dividend will go in line with our current EPS. Thank you for your attention.

Thank you, Claude. And now we are ready to take your questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number 2. If you are using a speakerphone, please lift the handset before pressing any key. Again, should you have a question, please press star followed by the number 1. One moment, please, for your first question. Our first question comes from the line of Alex Rontier from Bank of America. Go ahead, please.

Good morning, and thanks for taking my question. And I think I should first and foremost, and on behalf of the analyst community, thanks Claude for his work with us, and wish him the best for what's next, as well as congratulate Emmanuel on her appointment. Now just about question, I've got a lot, but I'm going to limit myself with three, if I may. The first one, I think topical on the Olympics. We've seen a lot of news flow about the quality of the River Seine. It's been quite a few problems for the start of the triathlon. Do you think that could raise the profile of how much water quality and water treatment should be taken carefully into consideration by public authorities? Could we see actually a change in the Paris operation and perhaps a reprivatization of there, or could that, in more general terms, drive more investment, you think, for water treatment in France and abroad? The second one about the recently announced acid sulfuric cell, I think you did mention in the press release that it wasn't strategic. What other assets do you currently have in the portfolio that you would not consider as such, given that the acid sulfuric one was quite a big chunk, I would say, at $650 million cell? Is that because really of the lack of synergies with the rest of the group? Or do you think there's also some consideration on an ESG angle as well? And last, about recyclers, I think it's going relatively well. We even had a marginally positive contribution in H1 already. How much do you think that has to do with volume? How much do you think that has to do with price? But perhaps, you know, maybe a little bit more far-fetched is how much does that have to do with regulation? We've had new export restrictions in Europe and in the U.K. Or even macro, you know, China is always a big delta. We've also seen Indorama Ventures announcing a pet plant closure in Europe. more recently. So any commentary about that and how you expect this 2 to 5 million contribution in H1 to grow into H2 would be very interesting. Thank you.

Thanks for your question. I guess starting with the Olympics was a nice one.

It's beautiful weather outside today, but it's sad to say that it was quite a few days of nervousness for the organization team. which will not help us. Actually, good question. I think you're right, the fact of being able to see in the world that now you can swim in the River Seine yesterday, because it was the case of the triathlon yesterday, is a key testament to what we can do. We, as in, I guess, multiple actors involved, you know, from local authorities to people who bring back technology, like Veolia, if you really want it. And symbolically, that was a very important move, you know, really above the Friatland one. So, what to expect from that? I guess, you know, First thing is, I remember when we were able to swim back in Copenhagen, where Veolia was very much involved a decade ago, to be able to depolute the Bay of Copenhagen, which had been passable for years, or centuries actually, and hadn't been for decades, and is back to that. It was a very important move for the entire country, also taking back control of their own destiny in a way. symbolically. So it has given a lot of projects following that and maybe Paris is another one. What's next? Yes, it could be investments but I guess more generally public and private partnerships to deliver this type of massive project is really something which is at the forefront of a lot of people's mind because you need what? You need a political will for certain. You need investments but you need as well the right technologies, know-how, and people who already have done that, and Veolia is actually a leader of this type of technology. In terms of the acid sulfuric cells, It's a strategic sell, in a way, more so than a purely financial one, if I may summarize it this way. It was a business we were okay with, you know, making a reasonable amount of money. The question is not that one. The question is to make choices. And the choices, you know, are set up in the green-up strategic plan with three growth boosters and three growth boosters in terms of geographies. where we want to put priority in our investments. And sulfuric acid regeneration was not one of those. Plus, you're exactly right, there was no synergies with the rest of activities, neither in the US nor elsewhere. And no ability to duplicate because it's always something we try to have a look. Can we duplicate somewhere else in the world? happens that the refund rates in the U.S. are very different from that elsewhere, so we have no real ability to duplicate, hence the sell. We're happy about the price, and it enables us to reallocate this money into either debt reduction or new projects if we have good projects, like we've demonstrated in the past. Again, the overall constraint is a three times EBITDA level. We have more projects than that, We're happy about this type of leverage, which even should be below at your end. But in a way, transforming progressively our portfolio to focusing on what creates the most value is a global trend, and I would say it's only the beginning, but it's one translation, but we know we have a lot of ambition to transformation of the portfolio and value creation that way. What's next to be sold? I won't tell you. That won't be a surprise to you. The non-strategic, which you can read from what's strategic in our greener plan, is a good proxy for that. But again, the idea, I'm more interested in the growth of Veolia. And in H1, I'm very happy that one of the important drivers of very good performance in this one, but the top line growth in particular with our boosters, both in activities and in geographies. So I think that we haven't seen only the traditional, I guess, engine growth of cross-cutting, but now we have a very powerful one as well in terms of the growth of our top line. In terms of, and there was no ESG specific concern here because As you know, what we measure in ESG in Veolia is our ability or not to depollute, rather than an absolute value, it's more the trajectory. And here, you know, we had the ability to have the trajectory go down, so it was not really the main concern. It was really the strategic lack of synergies. On terms of recyclers, nothing massive so far. So I think we have it on the grid, which is page 34. Basically, we've had a little plus in the cardboard, but a little bit minus in plastics. Only no major difference. What to expect, so it's a plus two million in EBITDA, plus five, sorry. Thank you, Manuel. Plus five million in EBITDA in the first half, which is not significant at all. What to expect in the second half, All the pieces of the digital you mentioned have an influence on commodities from China to export and all the rest. But you always have factors in all directions. So I'm usually not even trying to anticipate. I'm trying just to protect various results as opposed to anticipate commodity price. Because as you know, we are very much hedged in many ways. So that's more my priority.

Great. Thank you.

Thank you. Our next question comes from the line of Jenny Ping from Citi. Go ahead, please.

Thank you very much. I've got three questions, please. Just following from Alex's question with regards to tax allocation, obviously, you're not going to tell us, you know, deal by deal what you've got planned, but can you give us a sense of the scale of assets that's being considered for asset rotation at the moment because many of us didn't actually know that you had a sulfuric asset in the U.S. So just trying to get a sense of what you've got tucked away in the portfolio that could potentially lose the group that doesn't take all the boxes. So that would be my first question. The second one is with regards to the capital gains of the U.S. disposals. Can you give us a sense of the likely size of that and where that books because I note the Fed's capital gains was much bigger than the market has anticipated. So some sort of guidance on that would be helpful. And then very lastly, a detailed question with regards to the 98 million of provision and fair value adjustment. Can you give us a sense of what is repeatable in there, what is not going to be repeatable, and what's just generally the sense of the comparison part, please? Thank you.

Okay. So, starting with the capital allocation and the size, of course, it depends on the opportunity. So, asset rotation doesn't mean only sell, it means acquiring and selling whilst maintaining three times or this year below three times EBITDA leverage. If you look at our strategic plan called Green Up, we've given an order of magnitude over the duration, the four years duration of our plan and said it's around two billion altogether. So we've already done a bit more than half of that just signed in this half year alone. And again, we have an ability, depending on what creates the most value, we're always constantly reviewing our portfolio. So there is not, I guess, a fixed list. There is more an agility in our way of thinking, which is we have the potential list and we are ready to activate and to speed up, in particular when we have good opportunities which could create more value. But the order of magnitude that we set in our strategic plan is €2 billion over the four-year plan. In terms of leverage, if I understood well your second question, because mine is a bit blurred, you know, we anticipate to be below three times by year-end, and Claude, in his speech, was even more precise, and that said below three times, if you think of last year and end of the year leverage, which would be around the same order, which was 2.74 or 2.75 times. So if you think of this type of range, you have a good proxy for where we expect this data to range.

Emmanuelle, for the capital gain? Yes. Good morning, everyone. I am delighted to be with you this morning for the publication of this excellent H1 results. Thank you, Estelle, Claude, and to you for your warm welcome words. Regarding the region disposal, the capital gain that we will see is limited. It will be around $10 million after real allocation. Regarding your question on intradisposal capital gain, net provision, asset impairment, and other, it's very similar to what we had last year.

So I guess capital gains, we always have every year a little bit of capital gains. Would you refresh our memory about the last few years? So in a way, and the seasonality is such that we shouldn't anticipate another 50 or something in the second half, so that's pretty much it for the year, roughly. That's what was just said by Emmanuel. And all together, it's very comparable for the last few years. So there is no big plus this year. Can you refresh our memory on the last few years' capital gains?

Yes. For example, in 2022, we had 70 million of financial capital gains. And in 2023, we had the addition of 30 million industrial capital gains and 11 million financial capital gain. So in total, as Estelle said, is always few dozens of millions of capital gain every year at Veolia. This is normal and this is in line with the last two years.

So really, really nothing specific this year and I must say that we had the negative forex this year on an order of magnitude which was larger than last year and nevertheless we maintain our 1.5 billion or above 1.5 billion next results in a way, whatever the forex, which I think is an important one.

Thank you very much. Thank you. Our next question comes from the line of Arthur Sittman from Morgan Stanley. Go ahead, please.

Hello. Thank you for taking my question. The first one is on disposals. I mean, as you were saying, you've been quite active this year with the SAD, LIDEC, and now the activities in the U.S. Should we interpret that as a signal that you're willing to accelerate the shift of your business mix from the 70% stronghold activity, 30% booster, to something potentially more balanced between the two. That's the first question. The second one is on your net income target for 2024 of more than 1.5 billion euros. I was wondering if you could walk us through the moving parts since the start of the year when the target was formulated. I think on the positive side, there is the recycled prices, the capital gains, synergies seem ahead as well. On the other hand, there is FX and weather. Am I forgetting anything? Net-net, has it been a modest positive or a modest negative evolution? And last question would be, In your targets, generally speaking, to 2027 on net income, do you assume you'll have every year at least a bit of capital gains, or these targets are assuming zero capital gain in every year to 2027? Thank you very much.

So, you're right, we've signed for more than 1 billion for the first half of the year of sales. We've actually signed for 700 million of acquisitions as well. So there is pluses and minuses and it's exactly right that the intention behind that is exactly to transform the mix progressively towards more value creation and in particular value creation in the boosters activities and geographies. That's exactly the Green Hub strategic plan which is in action in the first half as we've seen. So transforming the portfolio is a key element and that's why when I said we have three value creation levers, revenue growth, cost cutting and balance sheet usage and rotation and transforming of our portfolio. So that's exactly the three together. In terms of the 1.5 billion euro target net results, you're right, it's a fixed fix. I would say, I just said, whatever the forex. And if you list the plus and the minuses, you know, on the plus side, recycling is almost nothing. So I would put it in really on the plus side. It's on the neutral side. On the plus side, you had capital gain, but again, same range as last year and the years before, so I'm not so sure I could put it in the plus side as it's exactly in line with the years before, so it doesn't bring any evolution compared to last year's net results. On the plus plus side, and that's the real plus here, that's the commerce, that's exactly the growth I talked about. The plus 6.9% in our booster activities, the plus 7.6% in our geographical activities boosters, For instance, everything we said about water tech, this is the real plus in the 1.5 billion target. And of course, the second big plus is the continued cascading and synergies as well. On the minus side, we had a big minus in Forex, which we suspect the second part won't be the same. It should be a bit of a plus, but altogether, by year end we expect something so more around with a minus 80 or something like that million at EBITDA level of course you know so it should be the same at net income level so that's a big minus again you know second half should be a big plus but we have the big minus in the first half as well as the weather, which was a big minus, as we've seen, you know, 40 something million negative in the first half. So the way to have a look at it is really on the bridge of EBITDA, which is page 29, on which I would not add again the capital gain, which of course is not at EBITDA level, since it's quite comparable with the years before. So that's really the way to look at it. So big plus in commerce and growth as well as the cost cutting and efficiency. And in terms of the, yes, I think we've answered the capital gain question as well. What do we expect in the next year? Again, every year we have a few dozens of millions of capital gains regularly. So it should be the same. We don't expect a big plus compared to the trend we've seen in the last few years in our strategic plan.

Regarding the H2 that you were mentioning, Arthur, as you know, we always have a current income which is higher in H1 than in H2. Higher in H2 than in H1 due to our seasonality. So we are able to fully confirm our guidance at 1.5 million euros for the end of the year. We have the intrinsic growth of EBITDA, which is at 8%. We expect, so for the second part of the year, to have a net result which is at least at the amount of H1, taking into account that we will have lower financial charges compared to last year in the second semester.

So don't multiply by 2. H2 is always higher than H1. So we fully confirm the above 1.5 billion euro net result, whatever the forex. Thank you very much.

Thank you. Our next question comes from the line of Juan Rodriguez from Kepler. Go ahead, please.

Good morning. Thank you for taking our questions. First, I would like to say to Claude, all the best on your projects and work with Manuel. So three questions on my side, if I may. The first one is on that level. What level of working capital are you expected by year-end after use or reversal? Probably slightly neutral or negative capital? You signaled, if I'm correct, something around the 2.75 leverage level. So we should be looking at something, looking at concerns with numbers, looking at something within the 18.6 billion net debt by year end. So that will be the first question. The second one is on the M&A. On the U.S., you signaled around 220 million revenues for those assets. Any call on what EBITDA contribution or average margins of these assets were? And what are the tuck-in acquisitions that you signal in Portugal and Brazil? So this will be at the M&A. And the third one, if I may, is on the guidance and the target. You signal that you're ahead on cost efficiencies and on synergies. What is slightly weaker than you expected from the beginning of the year that you confirmed your guidance for rebels? Is it maybe the rest of EU with a 1.2 percentage growth or what else can we think on that sense? Thanks.

So maybe, Claude, on the working capital by your end.

So on working capital by your end, this is what you have seen always. One is the reversal of the working capital in the second part of the year. So nothing else to expect from Veolia. We always have some negative working capital and positive in the second part. And as I said, we have calendar effects on water tech and CO2 that will have a positive impact on free cash flow in H2. M&A contribution of tokens.

So I guess in terms of Regen, you know, we are happy about the sale because, you know, the EBITDA was very volatile from one year to the next, you know, given the type of activities in quiz refineries. So it's difficult to give you, you know, we had ups and downs. But if you think of it around the, what, nine times EBITDA, you're not far from the reality of an average, something like that. In terms of tucking in Portugal and Brazil, maybe a comment on those?

Tucking in Portugal and Brazil. So we have some additional waste activities in those two countries that we bought with a discipline that you know. And because we have higher demand on IRR in Brazil, the multiple on EBITDA will be lower. So it's a good acquisition with a low multiple in EBITDA. in Brazil and in Portugal it's in the range of seven times. So good acquisition that we will fuel our activities where we have also synergies in those different businesses in Brazil and Portugal.

So typically the two types of acquisitions we make are one, in the boosters, either activities or geographical boosters. And if we do a few in the strongholds, which happens, it's usually because it's high synergy, quick to realize and create a value quickly because it's adjacent to an activity where they have. So those are the two type of theories. And in terms of Portugal and Brazil, that's exactly the second case I've just highlighted. In terms of the, you know, our guidance for the year and how do we see the rest of the year with our head, with the synergies and the and the cost cutting. I would say a few things. You're right, very good results for H1, exactly in line with our 5% to 6% EBITDA range. We don't expect anything different in H2, so there is no bad news we expect or no signal at all that the trend would be reversing or doing anything but in line with what we've seen in H1. The only nuance I would make is, as usual, weather. because I can do a lot of things in piloting the group, but the thing I really have no impact on is the weather, which you know at your end could have a little bit of an impact. So that's the only caveat in terms of that, but irrespective of whatever the weather will be and the forex and all the rest, we will maintain and we will do our guidance.

Thank you very much.

Thank you. Our next question comes from the line of AJ Patel from Goldman Sachs. Go ahead, please.

Good morning, and thank you very much for the presentation today, and I wish Cloud all the best. I guess my question is just one issue, really, which is the synergies, right? It's a sizable proportion of growth going forward and has been historically, and and you've been running, you've been doing a great job and you're outperforming the targets that you set. I wonder whether you could just unpack how that has progressed from its announcement to what you have delivered so far. What's been easy? What's been hard? It feels to me that this number has scope for upside. When will you kind of update the market

on how this looks or at least give us a bit of a feel for if there is further to extract her so thanks for your comment that it's been running well we put a lot of effort to be able to do that I guess it was not just by miracle it was a lot of piloting preparation and attention to the delivery every single bit of it in every single country concerned by it If you think of a few years ago when you said from the announcement, the announcement of the 500 million synergies dates back from August 2020. At that time, we had in mind a scope of the acquisition which was larger than the scope we eventually have been acquiring, considering the very sensitive to that in particular. And nevertheless, we've confirmed about 500 million. So in a way, we've already raised de facto our targets when we had the final scope of what would be the Suez acquisition a year after the initial announcement. From this day, it's fair to say I was absolutely focused and I still am absolutely focused on delivering on our commitment. you could see synergies as reservoir, and at one point there won't be anything in the reservoir anymore. But the good news is we have an infinite, almost, source of efficiency and cross-cutting with our efficiency program, and this one is not. as not the vocation to come to end at all. And we've seen, you know, we've been delivering 300 million and then 350, which we've raised in our green up plans. So, and I'm very happy to see next one, that in particular, the efficiency plan has been, you know, above of target with a good 44% retention rate. So I guess this one, if you think the synergy as at one point we were quick in delivering the reservoir as an end, the efficiency plan is an infinite forever almost type of one. In terms of what's been tough and hard and all the rest, again, nothing has been neither easy nor hard. It's been a lot of preparation and attention to detail and delivery. Originally, we were very much into HQ stuff in the synergies, HQ meaning a lot of, say, real estate merging, HQs in various countries and things like that, so renegotiating the real estate costs. Then we moved to very operational things, typically Typically in Australia, where we had one billion of waste in Veolia, one billion of waste in Suez, and we put them together, so we're talking route optimization, the depot merging, and the optimization of the fleet of trucks and stuff like that. Now we've moved to a third phase, which is a lot about procurement, as you see, almost of the sources of synergies in H1, as well as, you know, taking off quite reverently of the operational synergies in water tech business. So, you know, it's more sources of reservoir which we are tapping into one by one and constantly. In terms of the cost-cutting programs, so the infinite one, we've launched specific programs in addition to the to the classical running ones. One in France and one in China, just to give you an idea. One in France which is starting to bear fruit, as you can see in the result in H1, and I'm very happy with that. And another one in China because we were in a self-help measure, not waiting for the economy to go up, but actually we've adapted already to the level of activity we're seeing. So this is quite typical. So I wouldn't say it's hard or difficult. It's more we're agile, so we're adapting quickly. So two years ago, maybe I wouldn't have mentioned France or China, but we've designed and delivered, and we are starting to see the results in our actually grouped results. So agility and adaptation for me is absolutely key. And again, cost-cutting is in our DNA.

Do you mind if I just have a follow-up? Is there anything in the second half of the year that would prevent you moving as fast as you have over H1 in your synergy benefits?

I guess it's a reservoir. Once you've done it, if we've done it in H1 as opposed to we anticipated in H2, at what point it's done. Do you know what I mean? of it's not running for everyone. So the question is not, it's very different from the efficiency plan, which again, is a series of things which have a running rate for years to come. You must think of synergies as when you've achieved one, this is done. It's in the bag if you want, in terms of results, but it's done. But again, The efficiency plan in H1 has more than been overperforming as well with a good retention rate.

Okay. Thank you very much.

Thank you. Our next question comes from the line of Ali Jeffrey from Dank. Go ahead, please.

Thanks, Inga. Good morning. The first question I have is on, you commented that one of the things that's out of your control for the second half of the year is weather. It was a minus 42 million EBITDA impact in the first half year on year. At the margin, how has that changed since the end of the year? Has it been a wetter summer than expected so far? So we should expect that to be a larger negative number in the second half. And then just on your confidence around being able to get to the 1.5 billion come what may, is that because with synergies, you describe it as a reservoir. Is that because if the weather impact is slightly more negative than you'd anticipated, you can bring forward more synergies into this year to help you get to that 1.5 billion? And then my last question, please, is the industrial gains line item of 98 million for H1. provisions and asset impairments. What was that in Q1, please? Because I think you gave it in Q1. Thank you. In Q1.

So in terms of whether H2 versus H1, I guess H2 you have the district heating season which starts in October, so it's more Q4 usually than anything. And in water, it's more a summer one. So I guess the weather is a mix of basically for the first 40 million negative for the first half was half in energy and half in water, roughly, to give an idea. So do I anticipate it to be the same second half? The answer is I don't know, again. So that's why I maintain this plus five to six percent EBITDA range in terms of growth. which is exactly where we are in H1, and there is no reason why. Again, the trends are exactly the same in H2. So again, I won't be able to anticipate the weather for you. In terms of the 1.5 billion comatose mails, you have a lot of positives and negatives, as I said, and we managed to fulfill our commitment to be able to 1.5. I'm not so sure I understood your way of thinking about the 1.5. if you could reset that because I haven't followed your thinking.

So the question was you have confidence around the one and a half billion. So I was wondering if the weather impact, you know, let's say it's a very wet summer in France, for example, and therefore your water weather impact is more negative than you might think at the moment in the second half of the year. My question is, might you be able to offset that by bringing forward more synergy into this year from next year? The way you describe it as a reservoir, it sounds like it's something that's potentially within your control to bring into your P&L potentially as you need to, or is that not the right way to think of the synergies and how that can offset, mitigate and negative?

Now I understand it. So I would say it's It's not exactly the way I would have a look at it. If your question is when things go wrong, say in the weather, what do I do to reformulate your question? What do I do? It would be more to accelerate the efficiency plan rather than the synergies. Synergies, as I said, is underway and they deliver it. Efficiency is more something we are able to adapt and that's exactly what we've done with the France and Chinese specific plan. That's exactly what we've been doing able to do, for instance, during COVID, where we've put a specific adaptation plan, which made us able to come back to our results pre-COVID in less than six months. So I guess the lever and the turning a little bit small in the screw would be more on the efficiency plan rather than on the synergies plan, the way I look at it.

In terms of the industrial gain, the 98 million, Emmanuel? Yes, regarding your question on the capital gain, so part of it was of course in Q1 and part of it was in Q2, so we had around 30-35 in Q1 and 60-65 in Q2. Please keep in mind that regarding the EBIT evolution, we had a calendar effect linked to our employee share plan, Without this impact, which is purely calendar, usually you have this impact, which is in Q3, you would have an increase compared to last year, which is of plus 7.5%, a run rate that we will expect in the second part of the year.

So because our employee shareholder plan, we've launched it earlier than last year in Q2 rather than Q3, just to have it aligned with the launch of our strategic plan. It's really just a calendar effect. But I guess seasonality has always been, you know, like being an H2 higher than H1 in many ways.

Thank you. And if I might just follow up on that, how should we see that figure for the full year in total? Yeah, please.

I guess it's comparable from one year to another one. There is nothing significant here to take into account when comparing with the overall work result of last year.

Got it. Thank you.

Thank you. Our next question comes from the line of Sancrede Fulop from Morningstar. Go ahead, please.

Hi. Good morning. Thank you for taking my question. Yeah, we have two. Regarding plastic, you mentioned small negative effects on recyclables, and the backdrop is challenging with virgin plastic being cheaper than recyclables. So if you could elaborate more on your exposure, maybe current utilization rate of your capacity and your view of the future, and maybe some tailwind from regulation. So this will be my first question. And second question, if you could guide us regarding the annual increase in the number of shares through 2027 and related to that, so every year there is a bit of dilution from new shares from remuneration schemes. So why don't you buy back those new shares? Thank you.

So, on plastic, we have a very, very different type of plastic recycling facilities. We have 35 across the globe. Some of them are in PP. Some of them are in PET. The reason why I mention that is some of them are boats. I mean, they're recycled by, say, butlers. Others by automakers to make bumpers. So it's very different from one product to the next. What have we seen? You know, a vast majority of our plants are not impacted by the virgin price and by oil therefore, up or down because we have protected with a kind of transformation margin if you wish. So our customers and customers buy at a higher price when it's higher price of the input and vice versa. So it's more a tolling model, if you wish, or a transformation margin which is fixed, rather than linked on commodities. We have a few which are less, which are more linked with commodities, and that's the one which has a little bit of a negative impact, but it's not massive. And the plants which won't be at full capacity for a few quarters, we usually tend to mow them, and we've done that in the past, so nothing specifically. Tellwin or the opposite from regulation. Actually, you might see in Europe, it looks to me like we would be more at the bottom rather than anything in plastic, because there is an obligation for all bottlers in Europe to have a certain content. I never remember, I think it's 20% or 25% of PET recycled content within their bottle. Otherwise, I'm not supposed to be able to distribute anything in Europe anymore. So we have an incoming calls, you know, I guess the ability to anticipate is neither, it's not exactly the one I would expect, but so far there is more an excitement on we need that, otherwise we won't be able to be compliant next year. So I would see more a plus from the regulation rather than a minus going forward. In terms of dilution, I guess the amounts we cannot tell you before we have the full results of our shareholders plan success, and you know the maximum, which is set by the AGM, so we'll see that in a few weeks' time. What I would say is that we've never been buying back shares in Veolia, as you know, in the past. The question we are always asking ourselves is how to allocate the money we earn. Of course, you mentioned one of the options, but we have a good project which will be fueling the growth of the group for the next few years. All that's within the boundaries of our three times a bid leverage, so it's always an arbitrage of priority, which I have to do, exactly in the way I've set it in the green-up strategic plan.

Okay, thanks for that.

Thank you. Our next question comes from the line of Wanda Serwinowska from UBS. Go ahead, please.

Hi, Wanda Serwinowska, UBS. Just one question from me. I think PFAS in the U.S. is one of the drivers the other has been pretty loud about. Can you please share your thoughts about the Supreme Court's Chevron decision, which potentially weakens federal regulatory power which puts the recent PFAS regulation at risk. What are your thoughts? Do you see it as potentially a limitation of your growth in the U.S.? Thank you.

Yes, and you may have seen the Irene Brokovich article in the New York Times yesterday exactly on that one. Actually, on PFAS, whatever the Supreme Court decides, we already have business starting. because we're not only subject to waiting for the regulation concerning water in the US, we already have customers who are actually acting on it, irrespective of what the decision would be. Plus, we have customers with all the air base, airports, military side, they all have PFAS. So actually, and plus, it's not only a U.S. thing. We already have started to have business and actually to sign contracts in the U.S., in Australia, and in Europe the same, France in particular. So in those three geographies, we see some first contracts happening now. And of course, decisions in the U.S. could be speeding up but they wouldn't be actually stopping any of this business at all.

If I can follow up, so basically you don't see any risk of customers basically not signing the contracts with you in the future?

No, no, that's not what we've seen so far. Again, lots of reasons for that, and if your question relates to the US. First is the Supreme Court decision is, as far as I do understand, or actually, waiting for the decision is actually focusing only on the water companies, as far as I know. And we have other types of companies which are ordering PFAS treatment of us. Military base, airports, fanries even, and they're not concerned by the Supreme Court's potential case. And why do they do that? It's usually why do they ask us to depollute, basically, or to decontaminate their site. It could be reputation. It could be legally binding for them. It could be because, you know, they don't want to be deemed polluting with a nearby residence. So all sorts of reasons which are independent on the legal obligation which you are referring to. And again, we're not only doing PFAS in the US. Australia actually was the first location in the group where I've heard for the first time the word PFAS and that was years and years ago. And that was with the military actually in Australia.

Brilliant. And have you ever discussed or would you be able to disclose any numbers about the PFAS business in the US? What is the earnings contribution? What is the capex? Any numbers that you will be willing to disclose?

I would encourage you to come and join our, is it 17th, 19th?

Oh, I already signed up.

17th of October, WaterTech Deep Dive in Hungary.

Okay, I will be there. You will hear about PFAS on that day. Thank you.

I'm feeling a bit of teasing. Thank you. Our next question comes from the line of Philippe Orpatin from AutoBHS. Go ahead, please.

Yes, good morning. Thanks for taking the question. Just one follow-up. Could you just elaborate a little bit? How was the trend in July? We know that you are receiving regular feedback from your business units on a monthly basis. And what are the beginning of, let's say, the July trend you have already recorded, mainly regarding water and waste? Please.

No change in trends altogether in the group. We haven't seen. We've seen plus and minuses everywhere, like every month, but no change in trends altogether. So nothing specific to say about that. I could comment on the weather here and the positive and plus and minuses here, but again, nothing significant. You can think of July as exactly in the same trend of the first half.

including good weight in Germany, as we said, good waste volume.

It was a plus waste in Germany, a bit of a minus weather-related in France in water, but a plus in Spain because tourists are there and the reservoirs have been filled. So that's why I could comment country by country. But altogether, exactly the same trend would be my global comments.

Many thanks.

Thank you. I think we're going to close this Q&A session for today. Thank you for your attendance. And again, very happy about this first half of the year's results, which are very much in line with our targets and the good start of Green Hub plan. Fully confident that we'll deliver for the full year exactly like we committed to. And see you in a quarter.

Thank you, ma'am. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.