Veolia Environnement Adr

Good morning, ladies and gentlemen, and welcome to the Julia Nine Months Key Figures Conference Call and Webcast with Estelle Brashinoff, 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 the star zero for the operator. This call is being recorded today, November 6, 2025. I would now like to turn the conference over to Estelle Brachenault. Please go ahead.

Good morning, everyone, and thank you for joining us for this conference call to present Veolia's nine-month key figures, and I'm accompanied by Emmanuel Muning, our CFO. I'm on slide four for the key takeaways. Our nine-month results are, once again, very good, with strong underlying business trends and a favorable momentum going into the end of the year. Our nine-month performance in EBITDA terms was particularly strong internationally, where the group generates 80% of its revenue, as well as for our boosters, as I will explain in a few minutes. In a rather challenging environment, this sustained performance quarter after quarter is really a testimony to the choices we've made in Greenup, as well as the strength of our business model of resilience and growth. Veolia can rely on a successful combination of stronghold and booster activities added to a diversified portfolio, both by geography and customer, as well as a continued attention to performance. Moreover, we're constantly looking to create value by pruning our portfolio and have completed 2.3 billion of M&A since the beginning of the year in our boosters, water technology and hazardous waste in particular, and outside Europe. following, as you know, the disposal of non-strategic assets last year. I can therefore fully and strongly confirm our guidance for the year, and we should have a very strong Q4. I'm now on page 5, where you see that our nine-month key figures are once again very strong. Revenue reached €32 billion, up plus 3.2% excluding energy prices, which are essentially pass-through for us, as you know. EBITDA increased by a substantial plus 5.4% on the like-for-like basis, fully in line with our 5% to 6% guidance, and shows a margin improvement of 50 basis points. This is thanks to our strong international performance, as well as our recurring efficiency gains, complemented by the last synergies coming from the Suez acquisition more than three years ago. Current EBIT was up plus 7.9%, demonstrating strong operating leverage. Net financial debt remains well under control at 19.9 billion euros, even after 2.3 billion euros of net financial acquisition close in the nine months. We are perfectly on our trajectory to less than three times that you ran with the usual seasonality. Our solid nine-month performance and expectations for Q4 enable us to fully confirm our guidance. In these uncertain times, earlier results are sustainably progressing, quarter after quarter, as we have demonstrated over the last few years. And why is that so? I would like to highlight key features on slide six. And I will insist on our international exposure with 80% of our revenues growing faster than the rest of the group, and with very good EBITDA performance as well. Even in France, which accounts for 20% only, our results are not sensitive to the political context, and this is structural, as we hold no national contracts and no public money is involved. Moreover, Forex does not impact our businesses or margin, as we just saw in the last nine months with plus 50 basis point margin, We do not have forex transaction exposure, only translation. In a way, no business impact. We are a multi-local group with very limited international trade. On page seven, you see in figures our performance outside Europe, which really stands out and explains a great deal of our resilience and growth in the last nine months. Indeed, our rest of the world businesses are more profitable, with an EBITDA margin already at 17%, versus 15% on average for the group. And they are faster growing. In growth term, you can see the detailed performance in the nine months, which has been enhanced in Q3 compared to the first half. Plus 6.2% in North America, fueled by an accelerated growth of hazardous waste, plus 9%. In Africa and Middle East, plus 10.5%. In Latin America, plus 9.4%, and plus 5% in Asia. As you know, our value creation and EPS growth come from three pillars. Topline growth, performance, and capital allocation. And I'm going to go through them one by one, as always, to illustrate how they have each contributed to our performance in the nine months. Starting with growth of our stronghold activities on slide eight. We registered a very solid revenue growth of our strongholds. Let's start with water operations. Revenue increased by plus 3.9%. We continue to benefit from good indexations and have achieved successful tariff and negotiation in Spain, as well as rate cases approvals in our US regulated operations, which protects our future earnings. We just opened our first upgrade control center in North America to foster operational excellence and leveraging data. Solid waste revenue grew by plus 0.9% or 1.5% excluding the prices despite sluggish macro. As we have detailed in our deep dive last June, we managed to largely disconnect our waste activities from macro, thanks to a varied portfolio of customers, good pricing, and quality of service. And we favored bottom line over revenue as well. Revenue from distributed networks increased by plus 2.7% exudiancy price, thanks to sustained heat tariffs, as well as some network expansion, and a favorable weather impact in each one. Q3 is not a very significant quarter for this activity. On slide 9, one good example of the dynamism for water oppression in Q3 is certainly the signing of the first hybrid municipal and industrial desalination in Chile, in Valparaiso. As you know from our Oman event on desalination a few months ago, Veolia is the world leader in desalination technologies. with 18% of the world's desalination facilities having been designed and built with Veolia, and we have big ambitions. I'm very proud of this win in Valparaiso after a very intensive competitive process, as we will be able to provide the highest technical, environmental, and social standards to Aguas Pacifico. Let's move to our boosters performance on slide 10, which have performed well. Their 8-bit dive performance is even remarkable, confirming my choices in Greenup. Water technology, to start with, as you know, is a mix of various business models, as detailed in our deep dive last year. As you may remember, 70% of our water tech activities are still recurring, corresponding to products, mobile units, or chemicals. And I'm very happy to see this base having achieved a very good Q3 with 6.8% growth. and 4.8% since the beginning of the year, testimony to our technologies and commercial power. On the other hand, projects were impacted in the quarter by the timing milestone delivery and a strong comparison base last year. Quarters are always very different in this activity, and I expect a normalized Q4. Overall, and combining those different business times, water tech has been up only 2%. But EBITDA progressed with 10% organically, which is excellent. Has the Swiss revenue increased by plus 5.5% including tokens and 4.4% organically? I would like to highlight in particular the very strong growth in the U.S., up plus 9% year-to-date, and despite planned shutdown of OHA fairly early in the year. We have started our new operation in Saudi, in the Dubai complex. And only China is lagging behind in terms of price, but we start to see some rebound in volumes. In terms of EBITDA, nine months' performance was excellent, with above 10% organic growth. In bioenergy, revenue was up plus 21.3% ex-energy price, and including our new targeted acquisition. If I go to organic growth, it was still plus 8.2%, which is very good. So administration of the high-tech part of the OLEA on slide 11. You can see on this slide two good examples of the dynamism for boosters in Q3. First in water tech. After years in the making and technical design, we were awarded a $500 million project in Saudi Arabia for the Saudi Aramco Total Energy Consortium called Statoff. We'll design, build, and operate a new massive plant. We're talking 8.8 million cubic meters per annum. treating the super complex effluent of this petrochemical complex. We combine here our unique set of water technologies and have the Swiss know-how, not only to offer a solution to remove pollutants, but also to recycle water in this arid region. I'm also very proud to have signed a partnership with Total Energy to combine our expertise and technologies to develop innovative solutions for industries, methane measure and capture, low-carbon energy for desalination for CBTs, strategic metal recovery from waste, etc. Now let's dive into our second level of value creation after growth, which is performance and efficiency. I'm now on slide 13, which shows our nine-month performance. In terms of our yearly efficiency plan, we achieved €295 million in gains, in line with our annual target of €350 million. As you know, this is a recurring lever embedded in our operations, and therefore one we can count on for years to come, not to say forever. Efficiency gains are not discretionary cross-cutting programs of which you could question the continuity, but they come rather from a very diversified series of initiatives in our thousands of loans, which explain the recurring element of it. Worth noting, we have already registered 5 million euros of additional synergies coming from the combination of our two business units in water technologies after the CDPQ minority buyout closed on June 30. In terms of cost synergies derived from the sales merger, we have achieved 73 million euros in nine months, for a cumulative total of 508 million euros since day one. This is in line with our objective of 530 million euros by year-end which, as you know, we've raised a year ago. I'm now on slide 14, which details the third pillar of value creation, capital allocation and portfolio pruning. You will see a powerful nine months in that respect, with €2.3 billion of acquisition completed, almost entirely in WaterTech and has the Swiss, and outside Europe. This is fully consistent with our green-up priorities. I must say that the year-to-date enhanced growth outside Europe and plus 10% EBITDA increase in those two boosters, confirm that these are good investments to sustain future earning growth. Detailing those investments first in water technologies with CDBQ's 30% stake for 1.5 billion euro, Puccino is an operation which will be a creative and rosy enhancing, thanks to 90 million cost synergy by 2027. In hazardous waste, we've signed six Bolton acquisitions for a combined EV of €400 million and good multiples, notably in the US and Japan. Of course, we maintain our strict balance sheet discipline and our leverage will remain below three times at year-end, allowing the group to retain strategic flexibility. Our strong nine-month results, of course, allow me to fully confirm our guidance for 2025. which is reminded on slide 14. I wish to invite you as well to join us in Poland later in the month, where it will give some color about district heating and decarbonizing energy activities. Finally, and as a conclusion, I wanted to remind you of our long-term guidance, fueled by our three levers of value creation and greener priorities. It includes current net income growth of 10% per year on average over the period, with dividend growing in line with current UPS, and we'll see above 9% in 2027. As you remember from our yearly presentation, we decided to launch a share buyback plan from 2025 to 2027, sized to neutralize the impact of the employee shareholding program, so that going forward, current UPS will grow in line with current net income growth. I now hand over to Emmanuelle, who will detail our nine months' key figures. Emmanuelle, sorry, cheers.

Thank you, Estelle, and good morning, everyone. The U.S. results at the end of September are very solid, with strong underlying business trends and very favorable momentum, which I would like to detail. Indeed, if we look at our EBITDA performance, we see tailwinds. First, in our international operations, notably outside Europe, where the group generates 80% of its revenue, we see a double-digit EBITDA growth. and second for our boosters, with EBITDA increased by more than 10% in the diamonds. In Q4, we expect these trends to continue, and we also expect improved performance in France, as we will reap the benefits of our action plan, notably in French waste. Nine months' results are fully in line with our annual guidance and are also a testimony to the strength of our business models of resilience and growth, with a successful combination of stronghold and booster activities and a diversified international portfolio. With 32 billion euros in revenue, we experienced a solid growth of 3.2%. The operating leverage as the good delivery of efficiencies and synergies were excellent. A solid organic EBITDA growth of 5.4% at 5,018 million euros and a current EBIT growth of 7.9%. Net financial debt reached 19.9 billion euros at the end of September, up from December 24 due to the seasonality of working capital variation and M&A activity, down compared to the end of June 25 due to the temporarily favorable impact of the high rebound debt insurance of 850 million euros, which will be reversed at the end of the year. We expect the leverage ratio to be below three times at your end after full seasonal working capital reversal in Q4. You can also see on the slide the detailed Forex impacts, which increase in Q3 due to the weakening of the US and Australian dollars, as well as the Argentinian and Chilean pesos. A few things are important regarding the Forex impact for Veolia. First, our revenue is only about 40% generated in euros. But as a multi-local group with very limited international trade, Forex does not impact our businesses or margins. Our revenues and costs are always in the same currencies in each of our countries. The increase in currency impact in 2025 reflects the improved performance of our international activities. Our guidance at EBITDA level is at constant scope and forex. Finally, as you saw in previous years, the forex impact at EBITDA level is very much offset down the line to current net income. Forex impact was minus 68 million euros at EBITDA level and minus 44 million euros at current EBIT level at the end of September. Using the forex exchange rate at the end of September 25, the full year impact at EBITDA would be around 130 million euros minus. But it varies every day. Our full year guidance, which is at constant scope and flight, is fully confirmed at EBITDA and current net income level. Moving to slide 18, you can see the revenue evolution by geography. The main feature in Q3 was the enhancement of our growth outside Europe. I will detail it in a few minutes. I will start with water technologies. As Estelle recalls, 70% of our water tech activities are recurring, corresponding to products, mobile units, and chemicals. While 30% is volatile, these are the projects. In Q3, project revenue was impacted by the timing milestone delivery and a strong comparison base last year, while the three other business lines grew double-digit. Including projects, Q3 would take revenue with up 6.8% in Q3 and 4.8% in the nine months. This was reflected in the EBITDA level, which technology EBITDA increased by 10% in the nine months, benefiting also from the efficiency and synergy delivery. As Estelle mentioned, we have already generated 5 million euros of additional synergies coming from the buyout of WTS minority interest in Q2. The rest of the world performed very well in Q3, with revenue growth accelerating from 3.7% in H1 to plus 6.6% in Q3, driven by all geographies. Europe grew by 4.1% in the nine months, fueled by resilient waste activity, a solid Q3 in water operation, and excellent performance in Southern Europe, notably in Spain, up by 7%. Finally, France and hazardous waste Europe benefited from good hazardous waste performance, partially offset by low growth in solid waste and good water activity. Now let's take a look at our performance by business. Let's start with water, representing 40% of our revenues and 50% of the group EBITDA. Water revenue was up 3.4%, fueled by the stronghold water operation, up 3.9%, While water technology was up by 2%, water operations benefited from good indexation with continued price increases in Europe and in the US, while indexation was back to zero in France due to lower electricity prices. Volumes were on a very good trend, up close to 3% in Europe. As I just explained, the underlying growth of water technology, excluding the timing project delivery, remained quite strong. Moving to waste, representing 35% of our revenues, waste activities grew by 1.8%, a steady pace, despite an health problem. Waste growth was very comparable in Q3 to previous quarters, starting with solid waste. It's a very local, systematically adapted to the reality of the geography, with a well-balanced customer portfolio across countries, and it has been demonstrating its resilience through the quarters. In terms of volumes and commercial developments, performance was mixed. Resilient volumes in the U.K. and in Germany. U.K. incineration activity was impacted by plant outages, but still down in France, although better in history. Activity continued to progress in the rest of the world, notably in Latin America and in Hong Kong. Availability grew by plus 4.4% in the nine months, plus 5.5% including Turkey, thanks to continued good pricing and plant performance. with EBITDA up by more than 10% year-to-date, which is outstanding. Growth accelerated in the US, plus 9% year-to-3, fueled by excellent incineration volumes and pricing. A slower quarter in Europe due to facility outages and lower recycled oil prices. Finally, moving on to energy, and I am slide 21. As you know, energy revenue is sensitive to energy prices, which were down as expected again in 2025, but to a lesser extent than last year. Heat prices were on average almost stable compared to last year, and electricity prices were down as expected. Excluding the energy price impact, growth was quite good, plus 4.5%, thanks to good volumes, helped by a colder winter, and fueled by a strong activity in the booster energy efficiency and flexibility up 8.3%, with strong momentum in Beijing, southern Europe, and in the Middle East. The revenue bridge on slide 22 explains the driver of our growth in the nine months. Scope was negative at the end of September and reached minus 327 million euros, mainly due to the impact of last year's disposal, but as expected, it was not drawing close to it. The impact will turn positive in Q4 as 2024 divestiture were all closed in Q3 last year. Negative forex impact increased in Q3 as I mentioned earlier. The impact of energy prices was as expected divided by two compared to last year at minus 501 million euros. The psychic prices were neutral. The weather effect amounted to plus 169 million euros due to a colder winter at the beginning of the year in Europe. The contribution of commerce and volumes were comparable to last year, plus 1.3%, driven by self-momentum and resilience volumes. Finally, price effects were, as expected, lower than in 2024 due to lower inflation and contribute plus 1.4% to top-line growth. On page 23, you have the 8-bit DAB rich detail in our organic growth of 5.4% in line with the annual guidance between 5% and 6%. Scope was negative at the end of September and reached minus 56 million euros. Negative forex impact increased in Q3 versus Q2 as mentioned earlier. The impact of energy was minus 39 million euros, less than last year as expected, while recycled prices were slightly up, plus €13 million, unchanged in Q3. The commerce volumes works effect was positive, at plus €77 million, in line with revenue impact. Pricing and efficiency gains of €295 million generated plus 2.3% in additional EBITDA, hence a very good retention rate of 38%. Worth noting, we have already registered 5 million euros of additional synergies coming from the combination of our two business units in water technology after the CDPQ minority buyout closed on June 30th. The synergies amount to 73 million euros, notably in the water technology activities in the US and in other swathes, leading to a cumulated amount of 508 million euros Perfectly in line with our accumulated objective of €530 million, the symbolic threshold of €500 million has been exceeded. Going down to current EBIT, this slide illustrates perfectly the operating leverage of our business model. 3.2% revenue growth, 5.4% EBITDA growth, and 7.9% EBIT increase. Current EBIT grew to 2.7 billion euros at a faster pace than EBITDA. Renewal expenses of 231 million euros were comparable to 24. Amortization and offer were slightly lower than last year due to perimeter and slightly up at content scope and forex. Industrial capital gains, provision and order were down due to the high provision reversal in 24 with the ending of operational risk. John Venture are slightly decreasing. Before concluding, I remind you on this slide of our share buyback program, which has been launched to offset the division of the employee shareholding program. Our strong nine-month results allow me to fully confirm our guidance for 2025. Continued solid organic growth of revenue including energy prices. For EBITDA, organic growth between 5% and 6%. More than €350 million of efficiency gains. More than 530 million euros of accumulated synergy at the end of 2025. Current net income up 9% at Consent4X. Leverage ratio below three times. And as usual, our dividend will go in line with our EPS. Thank you for your attention. Thank you, Emmanuelle.

And now we're ready to answer your questions.

Thank you. We will now begin the question and answer session. If you do wish to ask an audio question, please press star 1 on your telephone keypad. If you wish to withdraw your question, please, you may do so by pressing star 2 to cancel. Once again, please press star 1 to register for a question. And your first question comes from the line with with Bernstein. Please go ahead.

Good morning and thank you very much for the presentation. If I may ask maybe three very short questions. First of all, on your FX, you gave a little bit of a guidance what could be the FX impact on EBITDA in 2025, assuming the currency rates stay where they were at the 30th of September. I just wonder what would be the impact of net income, because in FY24, in the first half, the impact on net income was zero, but in the past it used to be when the impact on EBITDA was negative. So I wonder what is your view on this one at the end of FY25. Second of all, about your share buybacks, I think there was a proposal to increase a taxation on share buybacks in France, an idea. And I wonder if this was applying to share buybacks on employee shares. What would you do if you had to pay additional taxes on share buybacks in France? Just a hypothetical example. And the last point would be on your hazardous waste margins, because I guess with 4.4% revenues increase and 10% EBITDA increase, we are looking at margins expansion. I just wonder whether this is a structural trend and you will see a margins expansion going forward from today's levels. Or do you think you have already reached levels which you find optimal in terms of EBITDA margins in hazardous waste? Thank you very much.

Thank you for your three questions. I will start and Emmanuel will be able to comment further, of course. Regarding guidance on forex and red results, just a few elements on that. First, I can fully confirm my guidance for the year, which means 5% to 6% EBITDA at constant forex. And it's fair to say you've understood from the tone of this presentation this morning that I expect to be on the upper range of this range. To fully confirm as well, the net result, which is 9% growth this year. I think this is a super important element. And as you know, I just wanted to highlight a few things on Forex. Forex for us is very different from in many different companies, I guess, because in a way it has no impact on our business, neither positive nor negative in a way. That's exactly why we guide at Constant Forex. It's because it's exactly what we have a look at. it's the direct consequence, of course, of our being super international with 80% of international business. Plus, it has no impact on margin, as we've demonstrated in the nine months with a plus 50 basis point. As Emmanuel said, you know, we are a multi-local company, so we have no transaction impacts of Forex. It's really like, you know, we are paid in dollars, we pay our cost in dollars, and the same applies to euros and so on and so forth. Just to want to highlight that before Emmanuel comments on the specifics of your question.

Yes, you're absolutely right, Estelle. Regarding FOREST, it's the direct translation of our world being 80% international and 40% outside Europe, which is growing faster. I will not come back on the fact that we are only translation impact and no transaction impact. We expect, as I mentioned, the impact at the end of 2025 at EBIT level to be around €130 million. EBITDA. EBITDA, taking into account the nine-month results and the closing rate at the end of September.

Although, it's sad to say it varies every day. As we've seen with political situation in the U.S., meant, you know, suddenly the dollars went up again. So, and that's what we expect. If we were to do that calculation with the same range as the end of September, which we know the fair comment, right?

Absolutely. And we haven't changed our range. You know that Forex Impact, that's a Current net income level is largely attenuated, usually 100 million euros at EBITDA level, translates into 20 million euros at CNI level.

Your second question on share buy back, even in the, I mean, as you have said and implied, you know, the fiscal debate is not over yet in France, like far from it. even if we were in what was imagined in the last few weeks were to be voted, which is, I must say, unlikely for the majority of it, but nevertheless, even if the share buyback that we have launched would not be concerned. Actually, there is an exception in this fiscal turmoil, which is share buyback associated with employee shareholders. So we would not be impacted in any way shape or form, even if that were to be voted. And just to re-highlight that French political situation does not have any impact on our result at Veolia. Not only because we're only 20% in France, but even in France, we are very local as opposed to national. We don't have national contracts. We don't have public debt is not involved. we are really multi-local as well. Just want to highlight that again. In terms of your third question on has this waste, the margin expansion is structural, and we've highlighted that in the deep dive we've done last June, I think it was, with the big ambition it has this waste to raise the margin, the EBIT, and the by plus 50% by the end of the plan, thanks to the progressive opening of the various facilities we have. we are on the way of building, which are good profitable margins. So, you know, apart from the ramping up of those, we could be, you know, temporary for a few months, just, you know, like not fully yet, you know, delivering the full speed. Yes, I don't expect any specific, you know, any specific thing. It's really structural. It's a mix of, you know, like... Availability of our plants, plus pricing, good pricing, plus good volume, and increase in the industrial base in some key sectors, such as micro-e, this is what is structurally behind this increase in margin. Just to give you a specific figure, which was highlighted by Emmanuel, but I want to emphasize this again on, in the U.S. alone, in the Swiss, we've grown our revenue plus 9%. in Q3, which is even at a higher rate than the first half. So it's really sustained. We don't see anything but a sustained, if not even better, Q3 than the first half. So that's why I'm very confident for a very good Q4 for Veolia and a very good year. That's why I mentioned the upper end for EBITDA at Constant Forex.

Thank you, and your next question comes from the line of Arthur Sorian with Bernstein Peace Go Ahead.

Hello, can you hear me?

Yes, yes.

Yeah, it's Arthur from Morgan Stanley. Sorry, thanks for taking my question. So the first one is actually on... On your EBIT, I've noticed that your industrial capital gains, I mean the line of capital gains, net of impairments, et cetera, is significantly lower than last year, which I suspect suggests the quality of your EBIT, the underlying quality of your earnings in nine months is relatively good. I was wondering, is it just a timing effect and we're going to end the year with a similar level of capital gains than last year, or should we expect basically you to deliver on your net income guidance with a bit less gains than last year, which could be a message on the underlying quality of earnings? That's the first question. The second question, you talked already a little bit about taxes in France. As you mentioned, we don't know what will be implemented at the end of the day, but I just wanted you, if possible, to give us some information on that potential tax that would change the way essentially that amendment that would change the way the corporate tax is calculated in France and would align it on your share of revenues generated in France, not PVT. I was wondering if there is a significant discrepancy between your exposure at revenue level and PVT level in France and if you could help us understand a bit that. Thank you very much.

So capital gains and the quality of earnings, Emmanuel.

Yes, thank you, Arthur, for your comment on the quality of results, which is really good at the end of the nine months, and that we are confirming. And to be short on your question, we confirm that at the end of the year, the amount will be decreasing compared to last year, confirming the quality of our results.

In terms of your second question on tax in France, The short answer is we don't expect any negative impact, not positive, on the potential corporate tax that you mentioned because there is an addendum which makes it that we would not be concerned. And we could go through the list of the various tax which we imagine in France, and for some the answer would be, again, conditional stance, no impact. For others it may be 5 million, 10 million, max. So we're really talking about things which are absolutely not significant at the LDS group level. And as I remind you, France is 20% of our revenue, but less of our earnings. So there is no big impact of all this in our group's results.

Thank you very much.

And the next question comes from the line of Olly Jack with Deutsche Bank. Please go ahead.

Thanks. So two questions for me, more kind of general beyond the results today. The first one is just on the efficiency program that you guys have and have every year. Is there some part of the efficiency program that happens every year that you might be able to consider to be almost an efficiency that could be considered as underlying growth? So it might be, for example, you're sharing in the benefits of efficiency targets on specific contracts. I know often this is seen as straight-out cost-cutting, but is there some elements of cost-cutting which actually perhaps people – view is that that you might consider internally as being more genuine growth. I'd be interested to hear your views on that. And then secondly, you know, there's been discussions from some investors recently about the opportunity you might have with regard to data centers, water cooling, et cetera, in the U.S. Is that something that you see as a potential opportunity growth opportunity out to this decade? And if so, what are the areas where you feel that you can operate within that and potentially might be able to see the most growth? Thank you.

Thank you. Do you want to take the first question, Manuel, on efficiency? With pleasure. So regarding efficiency program, you're absolutely right, Oli. It's fueling our underlying growth and it will continue to fuel our underlying growth. Very happy about what we have been able to achieve in terms of efficiency for the nine months. The element which is important also and that you have in mind is that in Q4 it will be also pushed by the results that will come, especially in France, as we will reach the benefits of all the measures that we have implemented in the nine months. So very sustainable trend, completely linked with our businesses and which will fuel the underlying growth.

So basically you can count on them forever with Veolia. For the reason I mentioned in my speech, which is it's not a big cost-cutting, as in one-off laying of people, typically. We're talking about thousands of plants, each of them having a constant way of having a look at how they could be more performing and efficient, which is very different. Therefore, you can count on them forever. In terms of data center, you're exactly right. We are building an offer on data center, which I think is very, very promising. We already have quite a few contracts, actually, across the globe, in Europe as well as in the U.S. so far, and in Australia as well. It's fair to say, and it's a way to have Veolia combining the data center needs and boom with still the access to resource and sustainable element of it. Meaning what we offer is not only reduce carbon footprint by recouping the heat, as well as, you know, being even water-positive, having replenishing resources. As you know, the centers consume a lot of water to be cooled down, and, you know, we have implemented a few offers there with a few customers already, and we aim at doing more of that. So, yes, you're right, a growth opportunity for Veolia, certainly, and I count on it to fuel not only the greener plant, but the next few years with a lot of S.S., It's going to be here, I think, for a very long time.

Thank you. And the next question comes from the line of Juan Rodriguez with Kepler Shibu. Please go ahead.

Hi. Good morning, everyone. Thank you for taking our question. I have one, if I may. It's kind of a follow-up. If I'm correct, you signaled that you expect to be on the upper part of the guidance for the year. Can you please give us more clarity on it? As we currently see, you're in the middle part of the range, so you expect probably a strong Q4 with cost efficiencies, volume recovery. Is it both? Can you give us a first look at what has been the operational performance so far in the quarter? We're already at the beginning of November. Thanks.

Emmanuel? Yes, with pleasure. So, as mentioned by Estelle, we expect a very strong Q4 and to be at the upper range. Regarding the revenue, we expect we have some moving parts regarding, of course, the weather, but we expect a growth which is similar to what we have seen in the nine months. And regarding EBITDA, it will be, of course, pushed by the generation of synergy from WaterTech, the performance that we will have in France, recovery thanks to the action plan which has been launched, which are the two main reasons. And as you may have seen, the October, in terms of eating generation, has been positive. So that's the main reason for us to be very optimistic regarding Q4.

Thank you.

And as we – I will comment on the Q3 was more on the plus side than the minus side in terms of trend compared to H1 as well. You know, in everything we've seen internationally, in the U.S. has this way, just to give a few examples, and we have figures in the slides. But Q3 was more on the up than the down compared to H1. So we are into a very good momentum, you know, into Q4.

All right, thank you. And the next question comes from the line of Mark Ape with Citi. Please go ahead.

Hi, thanks for taking my question. The first one I've got is on the water tech business. I think at the first half you gave a number of 2 billion euros of bookings. Can we get an updated figure of backlog at nine months as of now? And also remind me how that converts, how that backlog converts into revenue and if there's any sort of large projects with definitive timing that we can think about. And then just a second one quickly on the recycler pricing. I think at nine months you've seen it relatively flat, slightly positive. We saw in the U.S. waste management profit warns they're seeing lower recycler pricing. Can you just talk to us if there's any kind of read-across or impact for the earlier there, please? Thank you.

Okay, so on water tech, we always hesitate to give always the backlog, because backlog is only on the project bits of our activity, which is roughly 30% of it. You know, and the backlog was not very relevant in Q3, but we expect quite a few bookings in Q4. So, we'll give you the over-end. So, it doesn't translate directly because, you know, of the proportion of projects versus more recurring things. So, roughly, and you can have a look at our deep dive on WaterTech where I explain the full detail of that. Basically, we have 30%, which is project-based, which is very linked with backlog, say, and and 70%, which is more recurring. We're talking here about, you know, products, so typically membranes. We're talking about services, mobile units. We're talking about, you know, chemical products as well. And this 70%, which is more relevant to be compared quarter on quarter, has grown by 6.8% in Q3, year-to-date plus 4.8%, so we're very happy about this bit. And you have the ups and downs of the project, which is that plus the very high comparison base of last year. So we expect quite a few bookings in Q4, and it starts well, it's fair to say. In terms of the recycled pricing, I will have Emmanuel answering, but no read-across from American dry waste company. We are not in dry waste in the U.S. We are not concerned by it. recycling prices, which is a quite different logic from the European one, it's hard to say. But on recycled price trend, Emmanuelle?

Yes, on recycled price, you have seen the impact at the end of the nine months, which is plus 13 million at EBITDA level. We don't expect a significant impact at the end of the full year. You know that we have implemented with Estelle a huge transformation and deep transformation of our waste business, meaning that everywhere we can, we are in a back-to-back construct. So if you want a figure for the end of the year, it's non-material.

So we had a little bit of plus at one month, a little bit of minus the month following, so nothing very specific. And, you know, the geographies which are concerned mainly on dry waste, we're talking Germany, France, UK, Australia. With that, you have an 80-20 type of flow for our business.

Thank you. And the next question comes from the line of Philippe, our patient with OdoBHF. Please go ahead.

Yes, good morning. I have just one simple question. It's concerning your free cash flow. I mean, there is no mention about where you were at the end of nine months this year. And as you confirm, I would say, a very strong Q4 and your net debt to EBITDA below three. I do suppose that the reversal on Q4 will be maybe stronger than expected. Could you just give some figure concerning the end of nine months in order to help us to better understand how it will move concerning the working capital and some other, I would say, item, which could be your CapEx and some cash in coming from I don't know where. But please, that's going to be very helpful. Many thanks.

Bonjour, Philippe. With pleasure to speak on Fricasho. You are absolutely right. The amount of Fricasho at the end of the nine months is quite similar to what we had last year. We had a strong Q3. You remember that in Q1 we had some timing effect and specific effect to fling cash out to scope entries and adjusting scheme waterfront royalty payments. We fully confirm that we expect the usual reversal in Q4. You know that we are very committed to free cash flow generation, which is fueling our growth and to pay our dividends. We are mobilizing the organization to create to invoice faster, to collect faster. We have a few projects regarding ERP and ER also to have optimized processes. So fully confirming for the year-end the usual guidance and the debt below three times. We'll have the reversal in Q4 with strong EBITDA growth fueled by our international activities, French recovery and the boosters. Discipline on CapEx and working capital reversal.

So, the usual reasonality.

Many thanks.

Thank you. And I'm showing no further questions at this time. I would like to turn it back to Estelle Grashanov for closing remarks.

Thank you very much. You understood we're very confident, very happy about the nine-month result, very, very confident for the rest of the year, and very happy that, you know, the priority we've been given in Green Up has been being more technological-oriented, more international, are bearing fruit in our result as they support the growth of our earnings and will so in the next few years. Thank you very much.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Thank you.