Veolia Environnement Adr

Good morning, ladies and gentlemen, and welcome to the Veolia First Quarter 2025 Key Figures Conference Call with Estelle Brashilnov, CEO, and Emmanuel Manning, CFO. At this time, all lines are in a listen-only mode. Following the presentation, we 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 on May 7th, 2025. I would now like to turn a conference call over to Ms. Estelle Breschelamp. Please go ahead.

Thank you, and good morning, everyone. Thanks for joining this conference call to present Veolia Q1 Key Figures, and I'm accompanied by Emmanuel Mening, our CFO. First and foremost, Q1 2025 results are very strong, and I'm on slide four. And this is in spite of a rather challenging environment. They are perfectly in line with our new objective and enable us to start 2025 with great confidence and fully confirm our guidance for the year. This result illustrates, once again, the strength of Veolia's winning formula, resilience and growth. As you know, the Veolia value creation model is the combination of three levers, growth, performance and efficiency, and capital allocation. In 2024, which was the first year of our Green Hub plan, we were already very active in terms of capital allocation with 1 million depository of non-core assets and 0.6 billion Euro reinvested leading to a balance sheet headroom. In Q1 2025, we decided to accelerate value creation using part of this headroom with the acquisition of a 30% minority stake of CDPQ in our water technology business. thus achieving full ownership. This strategic move is fully aligned with GreenUp's strategic program and priorities. WaterTech, as you know, being identified as a growth booster and priority for investments, as well as North America. We will be able to deliver €90 million of additional synergy and unlock full potential for innovation and development. This buyout comes at a reasonable price with a 2025 EV EBITDA multiple of 11 time possibilities. This investment is a strategic and very international activity, allows us to secure future earning growth. I'm now on slide 5. Our Q1 key figures are once again very solid. Sales reach €11.5 billion, up 3.9% excluding energy price, which are essentially pass-through for us, as you know. EBITDA increased by a substantial 5.5% on the life-for-life basis to €1,695,000,000, fully in line with our 5% to 6% guidance, and show a margin improvement of 60 basis points. Current EBIT was up plus 8.4% to €915,000,000, demonstrating good operating leverage. Net financial debt is well under control and even down year on year to 18.8 billion euros. And our leverage ratio is also down from 2.88 last year to 2.75 this year at the end of the quarter, perfectly in line with our target of the leverage ratio below three times at year end. Our resilient and growth business model, as well as our solid human performance, enable us to fully confirm our guidance despite macro uncertainties. I'm now on slide six. Ultimately, Veolia stock is really a combination of resilience and growth, as demonstrated in the last few years. We managed to increase our results quarter after quarter, despite volatile energy price, difficult macro in Europe, political and geopolitical uncertainty, higher inflation and interest rates. This is thanks to our winning formula, based on four key features. And hence ROSE first, in particular with AgroBooster. Second, a worldwide footprint with France only 20% of the group and 38% outside Europe. Third, a continued value creation with EPS and ROSE, of course, growing very fast. And ROSE has been hit 8.8% post-tax at the end of 2024, which is 320 basis points above our weighted average cost of capital. Finally, Veolia as a world leader in environmental services is a unique combination of businesses, wastewater and energy. On slide seven, we remind you of the unique characteristics of Veolia's business model. We have no direct exposure to tariff or very minimal. Since our activities are multi-local, we do not import or export any goods or only insignificant amounts. We are protected against inflation with 70% indexed, solid pricing power for the remaining 30% as we've shown over the last few years. Our activities are very largely not dependent on GDP. This is clearly the case of our municipal activities, but also partially with the commercial and industrial activities, which are very spread over different type of customers from pharma to hospitals, microelectronics to retail, and all that on all continents. In terms of our municipal client base, we enjoy long-term contract with 11-year average, still remaining, and more than 90% renewal rate. You can see on this slide our largest contract expiry schedule. Altogether, we estimate that only about 15% of our revenue is exposed to macro, mostly in CNI waste. Last but not least, our resilience lies also in our proven agility and capacity to boost efficiency and cost cutting when needed. Of course, I will add to that list that we benefit from a diversified geographic footprint on all continents. In terms of political exposure, our contracts are always local contracts. We are never dependent on subsidies or national or federal contracts. Finally, our strength is reinforced by our ability to combine our different businesses. For instance, waste and energy or water and energy. which makes us quite unique to our customers. I'm now on slide eight. As you know, our value creation lies in three pillars. Top line growth, performance, and capital allocation. And I'm going to go through them one by one to illustrate Q1 results. Starting with growth on slide eight. We registered very solid revenue growth of our stronghold. This is plus 3.9% to the energy price. Fueled by our free activities. Starting with water operations, revenue increased by plus 3.3%. It continued to benefit from good indexation and have achieved successful tariff negotiation in Spain, as well as rate cases approval in our US regulated operations. We also enjoyed good commercial momentum in Europe. Solid waste revenue grew by plus 3%, despite sluggish macro. This is thanks to good pricing, A high renewal rate above 90%, as well as very successful offers. In particular, we signed into one a new high-tech material recovery facility in Canberra, Australia, totaling 850 million Australian dollars over 20 years. District heating and cooling networks revenue increased by plus 4.9% extraordinary price. This is faster than last year. Thanks in particular to a favorable weather impact, as well as contract extensions. We continue to invest to decarbonize our assets with double-digit RR, and expect to open a new cogeneration facility in Pozen by year-end, replacing the cold-fire facility. On slide 9, let's have a quick look at each of the boosters' performance in Q1 2025. Water technologies revenue was stable in Q1. This stability is temporary. It is due to a very high comparison basis in Q1 2024 and to the timing of contract delivery. In the last few weeks, we signed key contracts in WaterTech, which will fuel revenue growth in the coming quarters. Starting with a significant contract, we want to provide the technology to supply water in the semiconductor industry in the Midwest in the US, followed by 16 years of operation for a total backlog of $550 million. All that using a patented Z-WID technology. We were awarded as well a new contract to provide technology to help the San Francisco wastewater treatment plant to produce biogas and re-inject it into the gas grid. Thanks to our main gas technology. Again, patented. In both cases, we are in the priority offers as showcased in our deep dive on this activity last October. I'm very pleased as well to see our technologies removed sulfur from offshore oil and gas, that is FPSO, which was again super successful with $170 million additional orders in Q1, notably in Brazil and the Emirates. As the Swiss revenue increased by 5.6%, we are very satisfied with continued strong growth in Europe, up 5.1% despite the industrial macro. which is a good demonstration of our relative immunity to macro, as I explained earlier. We've delivered continued solid growth in the US, up plus 8.5%, with planned shutdowns early in the year, and started new operations in Saudi in the Dubai complex. In bioenergy, flexibility and energy efficiency, revenue was up 16.7% excluding energy price and including our new targeted acquisition, fully in line with our green up plant priorities, in particular flexibility asset in Hungary. Organic growth was still plus 6.1%, which is very good. Let's now deep dive on slide 10 in our second level of value creation, which is performance and efficiency. And this slide shows our first quarter performance in terms of both. On the left-hand side, you have efficiency, where we achieved €91 million in gains, in line with our annual target of €350 million. Efficiency gains at Veolia are not discretionary, the cost-cutting programs of which you could question the continuity. They are rather composed of a very operational and diversified series of initiatives in our thousands of plants. from process optimization, energy efficiency, to upselling of digital gains. Digital is a prime example to show how we constantly look for new efficiency levers. Digital gains already represent 15% of operational efficiency, but we are now moving quickly to Gen AI. And the new partnership with Mistral AI, a worldwide first, is a good illustration of this. In terms of cost synergies derived from the slave merger, we've achieved 25 million in Q1, for a cumulative total of 460 million since day one, in line with our objective of 530 by rent, which as you know, we raised last February. The third pillar, and I'm on slide 11, is capital allocation. And this morning, we announced the acquisition of CDPQ 30% stake in WTF, for 1.5 billion euros. translating into an EBITDA multiple of 11 transposed synergies. Its acquisition is fully aligned with the green-up strategic plan and with WETA Tech as a priority-based booster. It is indeed a very logical step, which will unlock more value for our shareholders by enabling full integration and enhancing proportional performance. We will be able to extract additional rebate cost synergies of €90 million by 2027. But there is more to it. After merging WTS and VVT, we will in fact maximize the operational control of the asset, unlock its full potential for development and innovation, fully control cash flow and capital allocation to pursue our growth trajectory in water tech. This strategic move should therefore enhance the value of our water tech activities. We fully maintain our balance sheet headroom and our leverage will remain below three times at your end, allowing the group to retain strategic flexibility. Finally, this operation will be accretive to our current EPS from 2026 and enhance our ROCE. On slide 12, you see the simplification of the group structure after the merger of VVT and WTF. The removal of minority interest will enhance our control of our water tech operations in terms of synergies, but also cash flow and tax optimization. We will be the sole decision maker, especially as far as strategic decisions such as capital allocation are concerned. This full integration will enable us to enhance operation performance and to unlock full potential for development and innovation. Slide 13. Transaction is very straightforward. We signed an agreement with CDPQ yesterday to buy up the 30% stake in WTS for $1.75 billion, a cash out secured at 1.5 billion euros, representing an EBITDA multiple of 11 times, including additional synergies of 90 million euros. A few words on those synergies. They all relate to operating costs impacting EBITDA and are derived from a simplified corporate structure with our WTO Tech activities. leading us, for instance, to remove SG&A costs, as we do not need to maintain a double government structure as today, both at WTS and VVT level. That being said, there are additional financial benefits to take into account, such as the potential for tax optimization as well as dividend leakage and cash optimization. What matters here is the very low level of eviction risk to deliver these additional oppression synergies. In light of our deep and intimate knowledge of the asset, as well as our strong track record in extracting synergies as highlighted by the Swiss merger. Overall, the transaction will be accretive from 2026 and contribute to group gross increase. We will finance this acquisition through our available net cash position at group level. For CDBQ, the divestment after eight years is part of their normal investment process. For us, it is the opportunity to invest in the merging of our two WaterTech subsidiaries, thus unlocking significant value. We expect to close the deal by the end of June. On slide 14, you will see this acquisition will further strengthen the group position in Water Technologies Activities, which is one of our three strategic boosters, as well as enhance our position in North America, which represents half of WTS business today. You remember from our deep dive last October that the combined VVT and VWTS as a fully merged and integrated entity is the world leader in water technologies with combined revenues of 5 billion euros in 24 and a global footprint, 40% in the US, 13 in Asia Pacific, 13% in Africa and Middle East and 8% in Latin America. We serve over 8,000 clients in 44 countries We hold more than 4,000 patents and have 11 dedicated resource centers. We are now the only player present all along the value chain in the complementary four business lines, which are projects, technologies and products, services, and chemicals, allowing us to select the correct go-to-market package, depending on country or client type. On top of that, as part of the ODIA, our water technology segment benefits from combination of opportunities with our other businesses and segments, as demonstrated in our PFAS unique offer, for instance. We have set ambitious growth targets for 2027, which, of course, are further enhanced by the acquisition of CDPQ minority stacks. So, all this for this activity. We aim to grow our water tech operation by 6 to 10% per year between 23 and 27 on average, and increase our EBITDA even further. Including the additional synergies I've described, the EBITDA CAGR for the period will be now above 10% per year, with growth day increasing gradually. Slide 16 summarizes our three levels of value creation, namely growth, performance, and capital allocations, which is the backbone of our Green Up plan. A very solid Q1 result. The strategic acquisition of CDPQ's minority stake in WTS combined with our unique positioning, a combination of resilience and growth, enables me to fully confirm our strategic plan green-up and associated objectives. They include current net income of growth of 10% per year on average over the period, with dividend growing in line with EPS and ROCE above 9% in 2027. As you remember from our yearly presentation a few weeks ago, we decided to launch a share buyback plan from 25 to 27, sized to neutralize the impact of the employee shareholding program, so that going forward, current EPS will grow in line with current net income growth. In a nutshell, the OIA is all about both resilience and growth. I now hand over to Emmanuelle who will detail our Q1 figures.

Thank you, Estelle, and good morning, everyone. The results for the first quarter are solid and allow us to be very confident for the rest of the year. We have demonstrated for many quarters now that even in a complex economic environment, Veolia is able to deliver growing results. With €11.5 billion in revenue, we experience a good solid growth of 3.9%, excluding energy prices. Taking into account the impact of lower energy prices, revenue was up 1.5%, which is quite ahead of Q1 2024. Thanks to the operating leverage and the good delivery of efficiencies and synergy, we enjoyed a solid organic EBITDA growth of 5.5% at 1,695,000,000 euros and a current EBIT growth of 8.4% at 915,000,000 euros. Net financial debt reached 18.9 billion, down compared to last year and lower than expected. As a result, our leverage ratio was 2.75 times below last year and well below our guidance of 103 times. Our balance sheet is accordingly very strong, which gives us a lot of flexibility in terms of capital allocation and allows us to easily maintain a leverage below 3 times after the financing of the acquisition of CDPQ minority interest in WTS. You can also see on the slide the detailed Forex impacts, which were positive in Q1. I also remind you that we operate in local currency, meaning that our exposure is linked only to translation and not to transaction impacts. As you saw in previous year, the Forex impact at EBITDA level was very much offset down the line, meaning at current net income. Moving to slide 19, you can see the revenue evolution by geographical segments. I will start with water technologies. Revenues were stable in Q1 due to high comparison basis and the timing of project delivery. Q1 2024 was particularly high as we recorded revenue from the delivery of big projects at WTS. for instance, projects for semiconductor industry in Texas, as Samsung in Austin, as well as identified one-off link to end-of-contracts. We are very confident for the rest of the year, and you saw this morning our very strong commercial momentum with the signing of new contracts to produce ultra-pure water for a large semiconductor client in the U.S. and to treat water in the energy sector to supply injection water treatment solution for offshore production units in Brazil. In the rest of the world, revenue was up 5% with all regions performing very well. North America continued to enjoy solid hazardous waste performance and good water activity. Hazardous waste revenue was up 8.5% in Q1. Asia had a solid growth of 4.1% thanks to some recovery in mainland China. Latin America grew double digit thanks to good waste volume centricing. Rest of Europe revenue was up 5.5% excluding energy prices. In Central Europe, the impact of lower energy prices in district heating activity was much lower than last year, minus €239 million compared to minus €628 million in Q1 2024. Electricity prices are down 9.4% on average, but heat prices are now almost stable. In Northern Europe, we registered again solid performance in the UK, in Belgium, in both energy and waste activities. In Southern Europe, the quarter was excellent and revenue was up double speed. Finally, France and hazardous waste, Europe was flat in Q1 with lower solid waste volumes and indexation, offset by a very strong hazardous waste activity. Now let's take a look at our performance by businesses. I will start with water. Water revenue was up 2.4%, fueled by the stronghold water operation, up 3.3%, while water technology was temporarily stable due to the timing of project delivery and high comparison basis, as mentioned earlier. Water operations benefited from good indexation, with continued price increases in Spain, Central Europe, and in the regulated US and Chilean water operations. while indexation was back to zero in France due to lower electricity prices. Volume were on a very good trend, France plus 0.5%, Spain plus 1.2% with the end of route situation in Andalusia and Catalonia, and Central and Eastern Europe increased its volume by plus 3%. Moving to waste. Activities grew by 3.7%, a solid pace, although lower than last year due, as expected, to lower indexation. Volumes were resilient, up on average by 1.2% like last year. Commodity impacts were non-significant and comparable year on year, with lower electricity prices in Q1, partially offset by increased recycled material prices. The strong all solid waste revenue was up 3% driven by tariff increases in all geographies. Regarding volumes and commercial development, Europe was mixed with good volume in Germany, resilient in the UK, slightly down in France, while volume was strong in the rest of the world. The booster hazardous waste had a very strong quarter in almost all geographies. In Europe, plus 5.1%, as well as in the U.S. revenue were up 8.5% thanks to favorable mixed effects and good commercial momentum. Finally, moving on to energy, I am on slide 22. Excluding the energy price impact, growth was faster than last year, up 5.3% thanks to good volumes, helped by a colder winter. Heat prices were on average almost stable compared to last year, and electricity prices lower as expected. Strong activity in energy efficiency, up 6.1% on a like-for-like basis, with strong safe momentum in Spain, Belgium, and in the Middle East. As I have just explained, energy revenue is sensitive to energy prices, which were down as expected again in Q1, but to a much lesser extent than last year. To illustrate the solid performance of the first quarter, we will go on slide 23. It shows our revenue bridge and explains our organic growth of plus 3.9%, excluding energy prices, which is stronger at EBITDA level thanks to our operating leverage. Forex impact was positive, plus 42 million euros, mainly due to the appreciation of the US, Polish, British currencies. Scope was negative by minus 271 million euros, mainly due to the impact of flattier disposals. We expect scope impact to turn positive in the second part of the year. The impact of energy and recycled prices were much lower than last year, as expected, minus 2.2 compared to minus 5.8% in Q1 2024, and include the impact of lower energy prices, slightly mitigated by the positive effect of recycled prices. The weather effect amounted to plus €110 million due to a harsher winter at the beginning of the year in Europe. Commerce and volume contribution was comparable to last year, plus 1.6%, driven by sales momentum and resilient volumes. And finally, price effects were, as expected, lower in 2024 than in 2024 due to lower inflation and continued to 1.5% to top-line growth. On page 24, you have the usual EBITDA bridge detailing our organic growth of 5.5% in line with the annual guidance between 5 and 6%. Essentially, EBITDA benefited from three sources, organic revenue growth of plus 3.9%, operational efficiency, and search synergies. The direct impact amounts to 11 million euros, scope was minus 30 million euros. Weather was favorable by plus 16 million euros due to a colder winter in the first quarter of 2025. Commerce volume works effect was favorable at plus 22 million euros plus 1.4% in line with revenue impact. Efficiency gain of 91 million euros generated plus 2.3% in additional EBITDA, hence a very good retention rate of 42%. Synergies amount to 25 million euros, especially thanks to optimization in purchasing and in the water technology activities, leading to accumulated amounts of 460 million euros, perfectly in line with our objective of 530 million euros by the end of 2025. Going down to current EBIT, this slide illustrates perfectly the operational leverage of our business model. Current EBIT grew by 8.4% in Q1 to 915 million euros at a higher pace than EBITDA. Renewal expense of 74 million euros were comparable to 2024. Amortization and offer were slightly lower than last year due to perimeter and slightly up at constant and forex. We had slightly lower industrial capital gains, provision of others. GVs were stable. Next financial debt reached €18.9 billion at the end of March, lower than expected and down €142 million compared to last year, thanks to strong free cash flow generation and dynamic asset arbitrage launched last year to quickly secure room of manoeuvre to achieve green-ups ambitions. As a result, our leverage ratio was 2.75 times below last year and well below our guidance of under 3 times. Our balance sheet is therefore very strong. Both rating agencies confirm strong investment rate rating after full year results. It enables us to finance the acquisition of CDPQ minority interest in WPS with our available cash position while maintaining a leverage below three times afterwards. As a conclusion, we are very confident for the rest of the year, which is based on solid foundations. We fully confirm our ambitious guidance for 2025, including WTS acquisition, continued solid growth of revenue excluding energy prices, for EBITDA, organic growth between plus 5 and 6%, more than €350 million of efficiency gains, more than €530 million of accumulated synergy at the end of 2024, current net income up 9% at ConsumForex, leverage ratio below sweet time. And as usual, our dividend will grow in line with our current TPS. Thank you for your attention.

Thank you, Emmanuelle, and we're now 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 the star followed by the one on your touchstone phone. Should you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Once again, that is star one should you wish to ask a question. Your first question is from Alex Rongier from Bank of America. Your line is now open.

Good morning and thanks for the question. I've got three, please. I mean, the first one is on the 30% acquisition from CDPQ. I'm just wondering if you could give us some background and color on why CDPQ was actually willing to sell their 30% stake. I remember in the past, and that's been something that is discussed heavily with investors over the years, It seems like the structure was a bit at a standstill with perhaps CDPQ expecting a buyout or even a listing of the water tech division overall. So any color on the process there would be super interesting. And then a second one still on M&A, I think if I'm not mistaken, you still have one billion net of M&A left in your greener plan, which I suppose you will still use depending on opportunities and be relatively fixable on that. But any area you would focus on specifically, and I'm saying that because I feel like the energy booster is actually the one performing the best at the moment. You already addressed water tech with CDPQ. So would that make sense to actually increase exposure there, especially given your ambition to become number one across your different segment by 2030 in your different energy verticals? And I'm wondering that as well, if you are already or expecting to see actually growing order on flexibility and some of the Local and backup generation, you mentioned you had for hospital and critical infrastructure in the wake of the recent blackout in Spain. And lastly, just one on numbers. On Mindful, the guidance is at current forex. and that Forex actually had a positive impact in Q1, but you also have in your guidance an absolute EBITDA guidance for 2027 of 8 billion and more, which arguably would include Forex. So, given the recent moving in currency and value predominantly being Euro-denominated, any color you would give us on FX impact expected for the rest of the year at current rate, and if any impact, would that mean you need to restate at some point the 8 billion absolute EBITDA guidance for 2027? Thank you.

So, three questions. We'll take the first two and then have Emmanuel answering the third one. I cannot answer on why CDPQ has sold now as opposed to other options. It's after... eight years of them having all this participation. So it looks like a normal cycle to them. That's what they've said very officially. I can tell you why it's the right moment for Veolia. That I can comment upon. Right moment because we've very set clearly for for a while now that water technologies were super important for us and an area where we wanted to invest and reinforce our presence. You may remember the deep dive in the water tech business where we invited a few people in Hungary last October. That's one of the key boosters in our Green Hub strategic plan. So it's very strategically aligned with what we've prepared the ground for. And I must add that in terms of timing the the euro versus dollar makes it so that the acquisition not only is good in terms of multiple, 11 times now compared to the American peers, for instance, is a very reasonable price, plus the dollar's relative weakness is good in terms of us paying in euros, as you know. So, the right time for the OLYAO together, very strategic move for us, and I cannot answer it on behalf of CDBQ. In terms of M&A or executive rights, we still have room for maneuver for additional M&As going forward to complete the green-up strategic plan. as Emmanuel highlighted. It didn't come by chance. As you know, we've anticipated on the Agile last year by selling non-strategic assets, and I always said that we had three pillars of value creation, top-line growth, performance, and balance sheets. You know, we've anticipated last year, we've been agile, which gives us room for maneuver, not only to do the CDBQ acquisition today, also CDBQ stakes, sorry, into WTS, plus potential other opportunities. So, any areas, yes, and we've been very clear in our green-up strategy, so it's a It boasts all the three boosters, so WaterTech has the space and the bioenergy flexibility, as well as outside Europe. So I may answer this again on the fact that its acquisition today not only enhances value in the WaterTech, but as well outside Europe, in particular in the U.S., but elsewhere as well. So I think it's an important one. So everything which creates value and is with one of the three boosters will be a good candidate for potential M&A. So it has to be both strategic and creating value. Are we done with the water tech? Not necessarily. We may have talking ideas going forward. Again, if they create value and are very complimentary in our portfolio of technologies, why not? Could be good candidates as well. As you know, we are leader as well in this industry. Creates value and we're very happy with this business. As well as, again, bioenergy and flexibility. Commenting on the blackout in Spain, you're right. It makes to the forefront and the headlines of the newspaper the importance of flexibility as a market, which I understand is quite a technical one, so not necessarily understood by the general public. Of course, it is by you. And we are already a big player in Europe, in France, in Northern Europe, in Italy, in Eastern Europe as well. Not yet specifically on this specific area in Spain, but we have quite a good series of activities in energy in Spain, so why not developing the flexibility in addition? That's something, as you can imagine, we have a look at. In terms of the forex, I will say I won't comment on anticipation because two months ago there was a consensus on one euro equals one dollar very soon. Now it's very different. So it's moving very fast. So I won't comment on the anticipation of at the end of the year, the anticipation at the end of 27. It's even more risky. I will confirm the 2027 guidance. And with regard to 25, Emmanuel? Yes.

As mentioned earlier, you know that Veolia has absolutely zero transaction exposure. When we operate in a country, all the costs and the revenue are in the same currency, so that we have only transaction exposure. Two elements, maybe, which are important to have in mind. So the first one, on top of local currency, so no transaction impact, is that our guidance at EBITDA level is at Content Scope and Forex. And finally, as you saw in the former year, the ethics impact at EBITDA level was very much offset down the line to current net income. At the end of Q1, you have noticed the impact. It was positive, plus 42 million at revenue level, and plus 11 million at EBITDA level. It's true that when you use the exchange rate of the last closing, so March 31st, we expect it would give an EBITDA impact which is really slightly negative. So as mentioned by Estelle, Forex is difficult to forecast. When you look at the EBITDA 2027, the 8 million, we fully confirm them. It includes organic growth, efficiencies, and M&A, and the purchase of CDPQ minority interest in WTS will contribute around 90 million in synergy.

And in addition to what you said, everything you said kind of partially vanishes anywhere at the net results level. So I think it's an important additional point.

Great. Merci, Esther. Merci, Manuel. Very clear.

Thank you. Your next question is from Arthur Sitmon from Morgan Stanley. Your line is now open.

Hello. Thanks for taking my question. One follow-up question on the acquisition so far in the green-up plan. I think to be precise, your initial acquisition budget was between 2 and 4 billion euro between 2024 and 2027. I was just wondering how much you've done, you've conducted so far, including WTS. I think I get not too far from the $2 billion, so the low end of that $2 to $4 billion range. I was wondering if your intention is to stop here. You seem to be running a bit ahead of track here, and so at the end of the day, what I'm wondering is, do you need to go further? Do you need to do more acquisitions to reach the the 10% CAGR net income guidance by 2027, or could you potentially stop here and just rely on what you have today to get there? That's the first question. The second question is because I think obviously there has been some uncertainty on the macro environment, and you seem to say that you've been very resilient so far, so I was wondering as well In the second quarter of the year, since especially the announcements on import tariffs early April, what have you noticed in how the business is performing, and specifically, I think, in industrial water and in waste activities? Thank you very much.

So we'll start with the global vision of GreenUp going forward, and Emmanuel will comment a bit further on the figures. and then on the macro as well. So globally, you know, today we've announced a major step in the green-up plan with the acquisition of the 30% stake of CDPDU in the water tech business. Do we need to do further acquisition? No, we don't. Do we have opportunities? Yes, we have. And do we have room for maneuver? Yes, we have for an extra one billion, as we said. So it's a little bit more the way I would think about it. Do I intend to stop there and to say, yes, that's it, GreenUp is delivered? No. I'm very happy that the acquisition we announced this morning secures some value creation for GreenUp going forward. In that way, you're right, it secures But, you know, we have plenty of opportunities to create value, and we have the room for maneuver, as we explained, to do that. So maybe on the figures, so the two billion I was mentioning was net of the disposal, right? So, Emmanuel, if you could go a little bit through those figures.

Yes, with pleasure. Bonjour, Arthur. design the Green Hub plan and the Green Hub strategy, as mentioned before, to achieve the 8 billion target in 2027, we have some M&A. The M&A, what we have communicated so far, was 2 billion M&A net. So it's acquisition minus disposal. We have been very agile after the launch of Green Hub, achieving already 1 billion disposal, And you have seen with the $1.5 billion acquisition of WTS plus what we have already bought, we are currently around $2 billion. So $2 billion minus $1 million, we still have $1 billion room of maneuver or target for Greenup in M&A. With the acquisition of WTS, it was clearly expected. It was part of Greenup. I think in terms of timing, it's ideal. and it helps us to simplify the group structure and unlock additional value.

In terms of the macro, Emmanuel will comment on how APRO looks like and basically no change in the trends as we've seen in Q1. Tariff. Tariff, we have a very minimal, if not exposure to tariff, as we are very local in terms of contract, as we said. And we are a service company, so both makes us very, very, I guess, resilient in these uncertain tariff times, which I'm very happy, as you can imagine. And in terms of macro, Altogether, I wanted to comment a bit further on what I said in the call, which is we are very largely immune to macro. We estimate it to 85%, and this is not by miracle. Half of our business is municipal, which is, of course, macroimmune, but even on the other half, we have around 20% altogether, which is more like retail and hospitals, so it's not municipal as such, but it still is very resilient. And for the 30%, which is real industry, if you want, we are super diversified in terms of industries and super diversified in terms of geographies. It helps us to say, okay, we have a lot of presence in the pharma and macroelectronics, which, as you can imagine, is not in the same mood, usually, as you would say, in other type of more, you know, like traditional industries. So that makes us quite confident, as well as our ability to react, as we've demonstrated in the past, and our track record. I just wanted to mention two figures we've highlighted, but to emphasize again on them. Hazardous waste, as you know, is 100% industrial customer base. In the first quarter, we've had a plus 5.1% revenue in hazardous waste in Europe, plus 8.5% in the USA. I won't go into circles to say, you know, there was not a GDP growth in Europe of 5.1 and in the US about 8.5. So it's a very big proof of the disconnect, largely, of macro versus the earliest performance.

But how do you see April on the spring, Emmanuel? Yes. Thank you Estelle. Regarding this question on macro and how APRIL is continuing, first element is that we don't see major change compared to the figures that you are seeing for the end of April. The main changes that we are seeing is in water technology where we are starting to see the rebound and you may have seen our this morning with commercial gain. The second main element where we see a change or a continuity of trend is regarding the recycled prices, which were again up in April, 20 euros in Copacel and OZID index, for instance. For the rest of the business, it is continuing. So what we see is, in other ways, continues to be strong, especially in the U.S. but also no change in volume regarding Europe, where you have seen we were able to have an increase of, for instance, in France, plus 12%. Volumes in UK and Australia are remaining very resilient. Volumes in Germany are strong, and we were also happy to see a good performance in Asia, especially in China, plus 4%, with good volume in other states. So no main change, continuing on trends. And maybe one last sentence on macro, on top of everything that Estelle has mentioned regarding our characteristic defining our defensiveness, one element which is interesting, it may be in the bridge, where you see that in terms of commerce and volumes, we are fully in line with where we were at the end of Q1 2024, so around 1.3%, 1.4%.

Thank you. Thank you very much.

Thank you. Your next question is from Ajay Patel from Goldman Sachs. Your line is now open.

Good morning, and firstly, thank you for the presentation and for taking my questions. I just really wanted to keep the picture really simple in the sense that you have a long-term guidance for 27, 10% growth in net income. which in broad terms is a broadly just over $600 million in net income growth from 2023. I wanted to understand this acquisition this morning, with this images included, how many millions of net income are you looking to add as a result of it? And then just to understand what the picture for you in the current market environment, that guidance of 10% net income growth was based on constant FX. Could you help us just understand at the net income level, what is the headwind that FX presents? Now, I know you have plenty of levers to offset, and this is a very resilient business, but just to understand that potential add in terms of the acquisition with the synergies included and the potential sort of headwind that the FX presents.

So we'll start by the first part of your question and hold over to Emmanuel for the second part. In terms of the 2027 guidance, you're right, we guided around 10% average over the period of net income growth. And this included some potential acquisition, including the 2 billion net of disposal of acquisition we've highlighted in a question we had earlier on. So it included already some acquisition. We use part of this acquisition room of Manoeuvre, if you want, today. So I can confirm the 2027 guidance. There is no further enhancements to it, but it's more a way to secure this guidance, if you want. Hence, securing the growth of our net results and performance over the next few years is what helps the acquisition of the 30% CDPQ that we have highlighted this morning. In terms of 2025, as we said, we confirm our guidance of 2025, including the acquisition of today, despite the Forex as it is today. That's the global picture. In more detail about the net results and Forex, Emmanuel.

Yes, with pleasure. Regarding your question, good morning AJ. The transaction that we are launching and on which we are communicating this morning is accretive. It will be accretive for our Rossi. It will be accretive also from 2026. When you look at net results, it takes into account the synergies, cost synergies that we will be able to deliver. In an asset from which we have deep and intimate knowledge, so very low level of execution, very low level of risk of execution, and you know our practical in terms of synergy delivery, it will take also into account tax optimization, no dividend leakage, as well as the cost of financing. Meaning that it will be accretive from 2026. accordingly to the synergy roundup. When you look at the Forex impact at Net Result level, as you have seen in 2023 and in 2024, Forex is offset at the level of Net Result. So we will have the positive effect contribution of the CDPQ transaction and we expect a neutral effect of Forex.

So altogether, the 10% net income growth on average over the period is with or without good or bad Forex in a way. That's irrespective of it. I think that's an important point for today.

Okay. Thank you very much for your answer.

Thank you. Your next question is from Zach Ho from Jefferies. Your line is now open.

Hi, good morning. This is Zach from Jefferies here. Thank you for your presentation. Just two quick follow-ups from me. Firstly, regarding kind of your credit metric headroom VX, I'm just wondering, is there a minimum level that you're looking to maintain? relative to your three-time target. Doing some quick math on the additional CDBQ acquisition, I think you get to quite close to the 3x target by June 2025 when you finish executing on the transaction. I'm wondering if this would be a concern at all from a credit or cash flow point of view over the next few courses, or is this not something that you are bothered or think that this would be a concern at all? And then the second question would be just a more general one on top-line growth. Based on your responses, I think, on the previous questions, it kind of sounds like, you know, your message is that most of Veolia is or most of the older, meaning that the existing business and future kind of, you know, booster and stronghold growth is mostly macroimmune. My question is, you know, on the booster top line level at least, how much of it is, you know, contracted or highly visible and how much of it depends on, you know, certain factors like, you know, waiting on further demand to come to in places like the US, et cetera. Yeah, any color on the above would be very helpful. Thank you.

Okay, so the line is a bit blurred, so I hope we will answer precisely to your question because it was a little bit difficult to understand. But, you know, leverage on the first one, Emmanuelle?

Yes. Good morning. So regarding the leverage, we fully confirm our leverage ratio, so below three times for the end of the year, including the acquisition of CZPQ minority interest. As you know, we had a very strong and we have a very strong balance sheet after the disposal of last year and including our strong free cash flow generation. So our expectation and what we fully confirm for the rest of the year is strong cash generation. We will have the free cash flow, strong free cash flow generation and we fully confirm the leverage ratio below three times after the acquisition.

fully investment grade, we don't need to have extra bonds or whatever financing, so that's what gives us a lot of comfort as you can imagine from this call this morning. I just, so I will take your second part of your question. So, we estimate altogether that on the business of Eolia, and you're right, there is no major difference between the booster and the stronghold activities. Altogether, we estimate we are around 85% microimmune. So, the 15% remaining will be a bit of the CNI dry waste business, typically, which can have a bit more an effect on the volumes of economy going up or down. And I'm asked a lot, how is that so? As we try to explain, this is what I call our winning formula, which is to be on all continents. We don't depend on the economy of one country or another. We are very spread over. We are very spread over various types of industries as well, from pharma to hospitals through to more traditional industries. Plus, we are very active. And again, we've proven that with a very good track record of the last few quarters where the macro was not great in Europe, typically, and we still have grown. our revenue, not only our bottom line, but our top line as well, quite consistently. The number I mentioned on the has in Europe at plus 5% and in the US at plus 8.5, where revenue, which is always going faster, as you know. So, you're right, we have a very good winning formula of resilience and growth, which makes us quite uniquely placed in today's world of uncertainty. That's why when we confirm not only our guidance for 2025 but even for 2027 it's a secured guidance thanks to the acquisition we said, thanks to our foundation, thanks to the strategic choices we made of around 10% gross of net results, whatever the forex, the inflation, the macro, the tariff, and everything we've just discussed. I think it's a good, again, you know, stronger foundational, you know, like secured growth of the results. Just wanted to take an example about the USA. I'm asked a lot about the USA, as you can imagine, over the last few months. We still have a big ambition in the USA. As we said, tariff is not a question for us. We have very local contracts, you know. And why is that so? What supports the oil and gas growth? If I take a bit of steps backwards. What supports the oil and gas growth is demands of the population. We're talking here about removing pollutants in drinking water. what the water tech business as well as the health business helps. We're talking here about supporting industries which are strategic, microelectronics or data center, to actually have a license to operate. Because without water, you just don't have a microelectronics or chips manufacturing plant. You just don't have it. It's a license to operate. It's not nice to have. So pollution, or just a license to operate, this is what drives the growth in the U.S. A good example was the PFAS. We've grown from zero to 205 million euro top line, again, in the PFAS removal. And I was asked a lot, okay, what about the new administration in the U.S.? Is it changing your ambitions? The answer is no. And it was demonstrated last week with the new EPA manager, Mr. Zeldin, confirmed that his intention was not to go slower, but actually to go quicker in the PFAS removal. So I think all that is a proof by example of what we said about macro.

All right. Thank you.

Thank you. Your next question is from Ollie Jeffrey from Deutsche Bank. Your line is now open.

Thanks very much. Good morning. Two questions, please, on the WTS minorities acquisition. The first is, can you please confirm, I think it would help clarify for everyone to think about in terms of the accretion and the PE paid here. When you look at your accounts, the minorities for the WTS global business was $19 million. in 2024, what was it, what were the minorities just to be the WTS part of the business that you've bought so we can have a sense of what the net income looks like? That would be very helpful. And the second question I have is just on the synergy guide you've given. You know, I presume, you know, historically, when you come to guiding the synergies, that you would see that as being a fairly conservative estimate, right? and, you know, the potential headroom to that figure, depending on how things go, just given how you've guided synergies before in the past. Is that reasonable to continue that that's a relatively conservative guide on the synergy front? Thank you.

So I will take the second question, leave Emmanuel for the first one. But the global picture on the first one is it's accretive at net income and wholesale level. That's the short version. But, of course, Emmanuel will elaborate a little bit. In 2027, it creates value, isn't it?

Yes. Hello, Oli. Good morning. Absolutely right. With this transaction, what we fully confirm is it's accretive. It will be accretive starting 2026 because due to the timing of the operation, of course, you will have the ramp-up of synergy This year we expect around 15 million synergies, then next year around 35 and then 39. So you know with this hump up that this year it will be very slightly dilutive, but the amount is not significant and we fully confirm the increase of our net income around 9%. Starting in 2026 and in 2027 and onward, it will be relative. taking into account several elements, of course the cost synergies, but also the tax optimization, the removal of minority interests, having a positive impact on all our financial indicators.

So I just would like to add that we've had a question earlier on on the guidance 2027. We commented and confirmed that secured a 10% CAGR net result. We also said that we'll be above 9% ROCE by 2027 or in 2027. Just want to confirm that again that we haven't highlighted yet. In terms of the synergies, I was smiling on the conservativeness of the synergies. It's the best estimate we have today. What I can say is we have an intimate knowledge of the targets. Therefore, it's a very detailed plan. I wouldn't qualify it as conservative. I would qualify it as more like secured. It's our best estimate today, but I don't see a risk of execution on achieving this target, as we've demonstrated as well in the delivery of the stress energy.

Thank you. And then just as a follow-up, could I take the 19 million in the account for the minority for WTS as being representative for the business that you've bought or not, because that's the global figure and is not representative?

I guess the 19 million figure is not, I mean, the net result today of our duplex activity is not optimized. That's what I've tried to say in the call, and in, you know, like, above, if you want, or in addition to the 19 million synergies, which are more EBITDA. We have a lot of work on tax optimization, in addition, for instance, and all the rest of it. which makes us so that, you know, like there will be value creation as well from EBITDA in addition to net results. I'm trying to be clear on that one.

I hope I'm clear. Okay, thank you. Yeah, that makes more sense. You've got more benefit coming through below the line. All right, thank you very much.

Yes, exactly, exactly, in addition to the €90 million. I mean, just to make sure everybody understands, you know, we had to run two different separate structures in parallel. Of course, you know, we were coordinating a lot of things. But in terms of cash flow, in terms of tax, of course, in terms of the business we run, we had still to run two separate structures. So as you can imagine, in addition to costs that we can take away, there is a lot of optimization which we will stop now.

Okay, thank you.

Thank you. Your next question is from Philippe from AutoBHF. Your line is now open.

Yes, good morning. I have some additional questions concerning CDPQ, as you can imagine. The first one is just to well understand the figure you have given in terms of sequential contribution. Could you just elaborate about the nature of this operational synergy impacting the ABTA? That's the first question, because as you say, you were running two companies, but the one you have had 70%, you were also well-knowing. Are these synergies coming from the merger of the two entities, or there is some, at the ABTA level first, some additional things to do you couldn't do before because of the structure of WTS? That's the first question. The second one is concerning tax because we are discussing about tax optimization. You have had previously some tax carry forward in the U.S. If I'm not wrong, those ones were terminating somewhere in 25. Are you going to optimize the remaining you have had for 25 because of this deal? You will be able to more optimize something starting 25 or are you also benefiting from some additional delays due to the steel, and is there any remaining tax carry forward beyond 25 on the U.S. perimeter? Because I do suppose that it's mainly the U.S. one and not impacting the French one. The third question is concerning U.S. business globally, but mainly I would say the water tech U.S. global business. The Trump administration has made a quite significant turnaround concerning oil and gas is mainly pushing this activity and renewable is suffering, as everyone noticed. Are you starting to see some positive impact from this reversal of going more to oil in terms of industrial water business and water tech, for example, for your mobile treatment units, which are based on refineries and so on? And the last one is concerning China. You mentioned in the press release a rebound of China, but just to be clear, are we discussing a rebound in terms of profitability, which is linked to, I would say, the efficiency plan you started, implemented some years ago in order to optimize the region, or are you also feeling some macro trend positive reversal, which are on top of your efficiencies, I would say, are fueling your growth? Because between end of Q4 and Q5-25, we have a quite strong, I would say, turnaround of the China's activity you mentioned. Many thanks.

Okay. So in terms of the tax, Emmanuelle?

Yes. Bonjour, Philippe. So you're absolutely right. The acquisition of the 30%, it's not only a strategic move, which is fully in line with Greenup and it is fully consistent, W is a great asset and we will be able to generate synergies after a fantastic track record with the merger with Suez and in an environment where we have deep and intimate knowledge securing the execution. But on top of that, we'll have, as I mentioned, also tax optimization potential. You're absolutely right. It will be mainly in France. as we will be able to put in the tax group, so to have a tax integration of the European entities. You know that in France we have a Texas Carry Forward which are above 150 million available forever. In the US we have more than 300 million Texas Carry Forward available, but only until the end of 2026. So the impact on that one will be more limited.

On the US business, You know, we have half of the water tech business, which is 40% all together, and half of the WTS, which is in the US. But as you know, we have as well a very big presence in the US in the hazardous waste, as well as in water activities, reg and non-reg. So it's a varied set of business. What I can say is, you know, as Emmanuel mentioned earlier on, you know, we've seen, I mean, has the Swiss is the best proxy of how industry is doing in the U.S. because it's 100% 100% industrial and we've seen a plus 8.5% revenue growth in Q1 and a very good April. So I cannot comment specifically on island gas, the bill baby drill effect if you want versus what we see so far is more down to the pharma as well as microelectronics. And on the water tech part of the business in the US, we've announced this morning very major contracts. And one was in the U.S. in the microelectronics business, water and water tech. So I would say so far we see what drives the growth in the U.S. would be more that than the effect of oil and gas. But we have such a varied exposure to the very top of industries that it's difficult to comment for me a lot further. In terms of China, it's not only a profitability rebound, it's a revenue rebound as well. I think we had a plus 4% in Q1. And it's really more Veolia rather than China altogether. Again, difficult for me to comment on is China's economy rebouncing or not. What we can say is the revenue has bounced back, which we are very happy about. And in terms of the synergies, sorry, there is a question earlier on which I haven't answered yet on the synergies of the WPS acquisition. What are they composed of? You're exactly right. We already have delivered with the two separate structure already some efficiencies and synergies which are including in our performance until now. The additional 90 million, because it's an additional, will be basically twofold. A big chunk of it will be just DNA, as in two different structures, you can just merge them. So we're talking here about real estate, we're talking here about IT, we're talking here about structural together, because we had to have the two separately. And an additional element is more like operational type of efficiencies because we can do directly a lot of things in terms of purchasing where we had to keep until now two different boxes, if you want, separate. And we can merge them and go and have extra efficiencies in terms of typically purchasing, to give you an idea. A big chunk is more G&A type. Not the majority, but always a little bit more than half.

Many thanks.

Thank you. Your next question is from Alex from Bank of America. Your line is now open.

Hi, thank you. Just one, actually not one follow-up, but one extra question, if I may. Just regarding your shareholder structure, You've had, obviously, two big announcements earlier this year, and I think Criteria Caixa has already announced that they've finalized the acquisition of their 5% stake. But I was wondering if you had any new information regarding the stake BPI was building, which was up to 3.5% as well, which seems to be taking a little bit longer than the Criteria Caixa build-up. Any call there would be super helpful. Thank you.

Oh, I can't remember the dates exactly, but both have already built their stake now for a few weeks. So, Caixa is at 5% and BPI is already at 3.5%, and they have been for a while. I can't remember the exact date. But, you know, they've built their stake. Yes, they have.

Okay, very good.

Thank you. You're right. I'm very happy to welcome those long-term shareholders in the group, in our shareholder base, which they said very clearly support fully the value creation model, the resilient and growth we've just described, and the green-up strategic plan. So they clearly said that the reason why they invested was exactly those two.

Great. Thank you.

Thank you. Your next question is from Ollie Jeffrey from Deutsche Bank. Your line is now open.

Can I please clarify, with the 11 times EV pro synergies, 25, in that 90 million sorry it was cut so if you could repeat because you were cut for a few seconds yes so the 11 times you want us to comment but the 11 times multiple full 90 million of synergies is 15 million see the pre synergies BTA multiple being for the transaction please

Yes, so to answer your question, we'll of course be with you after the call to give you the full detail of the calculation. So have in mind that for the calculation, we are taking into account the EBITDA 2025 and the full year and the full effect of the 90 million cost synergies. And just in the calculation, you have to take into account also the debt of the entities. The full detail will be sent to you.

And, of course, this compares super favorably with the typical multiple US peers, you know, which I won't give you the full list, but you have them. There are more between 15 and 20 times. So it crystallizes a lot of value for us.

Okay. Just on this topic, you spoke about the $90 million of cost synergies at the EBITDA level. further benefits below EBITDA which boost net income from bringing the minorities in. Can you put a figure on what you see that additional boost below EBITDA being from combining the minorities?

Yes, Emmanuel. So to complete maybe the answer that I've given before, you're right. So we'll have additional positive impact below the EBITDA line. The main one will be tax optimization. As mentioned earlier, on the French or the European Tax Integration Group will have a positive contribution of 10 million Euro for the US who will see because we have until 2026 to implement it. You will have, of course, the removal of the minority interest, which is going to be taken into account. So with this acquisition, you have full access full security on the synergy delivery. You have additional benefits at net result level. You have absolutely no risk of execution regarding synergies. It is financed without any bridge loan, without any station, thanks to our strong balance sheet after the disposal that we did last year. So a fully secured operation in an environment that we know deeply and intimately.

Thank you. Your next question is from Jenny Ping from Citi. Your line is now open.

Thank you very much. Two questions, please. Firstly, with regard to the transaction, obviously you've paid 11 times for an asset which has been absorbed into the company where it trades at six to seven times. Is there a and how Veolia could make some of this value that you have at the group more visible, i.e. maybe on the completion of the merger of the two water tech businesses, spin out a minority and listing it or something of that effect to show the value of the core business that sits within Veolia. So that's the first question. And then secondly, when we look at the EBITDA growth, the 5% to 6% in the median term, are you able to give us a sense of what is the underlying organic growth of the business, X-ing out all of the M&A that's coming through, but also synergies have historically been a big part of that driver. So when we look at the underlying business growth, Is it fair to say it's low single digits? Thank you.

So two different questions. So on the first question, I would see it quite differently. You know, I think the transaction today highlights precisely the value within the Veolia stock and the potential for growing our value further. as we explained with the various different multiples. Plus, it enhances not only the water tech business value, but the value of Veolia altogether. I will highlight again the word combination. When we talk about PFAS, we're talking about water tech and hazardous waste. When we talk about the CEDIF contract, we talk about another book in hazardous waste, sorry, in water tech which was helped by municipal water type of contract. So a lot of things are intertwined within Veolia. So I would argue that today's transaction highlight the value potential creation for Veolia even further that we've seen so far. In terms of the five to six percent, I would suggest you refer to the bridge because we give exactly the detail quarter after quarter of exactly your question, Jenny, on what comes from the top line growth, what comes from the efficiency and synergies, and what comes from NNA. So we have all the details quarter after quarter for 24, for 25, so far, and so on, so forth. But altogether, if you think of value creation as in EPS value creation, you have a big chunk which comes from top line, a big chunk which comes from efficiency and synergies, and a big chunk which comes from M&A, like what we've announced this morning. So, depending on the quarter, I won't say it's a third, a third, a third, because of course you have different quarters, but you would think of the three as really three important levers. I won't mention only one of those, and those are the three which help us to be able to confirm the 10% CAGR of net result, irrespective of all the different elements of the environment, the macro, the forex, or whatever, as we discussed this morning in detail, as well as the ROCE above 9%, which is well beyond our WAC, which at the end of 24, you remember, stood at 5.6%. So we are creating value, and we intend to go on exactly in the right direction. And of course, all that with being with a lever under three times.

Thank you very much.

It looks like we don't have any other questions, so we'll end now. And you've understood that we are very happy not only about the quarterly results, we are very confident for the rest of the year, and very happy about the value-creative transaction we've announced this morning, which is very strategic and value-creative. Thank you very much.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.