Veolia Environnement SA (VIE) Earnings Call Transcript & Summary

[Interpreted] Ladies and gentlemen, good morning, and thank you for being here, whether it be here at our Aubervilliers head office or if you're joining us by video conference. This morning's presentation is an important one for Veolia because it relates to its new strategic 4-year plan for 2020 to 2023. For this reason, we anticipate being here together until 12:45 before we break for a buffet lunch for those of you who are present with us in the building. Having regard to the subject we're dealing with, we have proposed that our company's various stakeholders follow this conference simultaneously. The financial audience, investors, analysts, the press and, in particular, journalists who follow Veolia more closely, and finally, the group's employees, who will be the main players, the implementation of the strategic plan, I'd like to welcome you all. Presentations that will be given to will be in French with a good quality simultaneous translation into English. And with the management team around me, we will take turns to set out the principles, action plans and objectives of this new strategic program. Ample time has been set aside at the end of the morning for you to ask any questions that you may wish to put to us. However, before we present this plan and for the first 45 minutes, we, together with Claude Laruelle, our Chief Financial Officer, will present to you the economic and financial results for fiscal year 2019, which was the final fiscal year, the previous strategic plan of 4 years between 2016 and '19, 20-minute presentation, followed by a first 25-minute Q&A session, which I suggest that for these purposes, you focus solely on the 2019 results. And after this first part, followed by a short break, be around 9:30, we will then come to the new strategic plan for 2020-2023. I will, therefore, begin by summarizing the highlights for fiscal year 2019, and I'm on Slide 4. Veolia's figures for 2019, a very sound revenue growth of 4.3%; an increase in EBITDA of 4.5%, slightly higher than the range given in our guidance; and increase in EBIT of 5%; and current net income of 13.5%; strong generation of free cash flow; and financial debt of EUR 10.7 billion, well below EUR 11 billion. This debt includes the proceeds of sale of our heating networks business in the United States for EUR 1.1 billion. Excluding this disposal, which gave us a bit of a head start in our strategic plan, as I'll explain later, Veolia's debt would be more or less stable at the end of 2019 as compared to the end of 2018. So these good results led the Board of Directors to propose to an increase in the dividend at the shareholders' meeting of 8% to take the dividend to EUR 1 per share. Slide 5. 70% of our revenue growth is organic, while 30% was supplied by small acquisitions. It was sound despite an unfavorable climate at the end of the year for our heating activities and despite a very depressed context for paper recycling. It was mainly driven by our activities outside Europe and followed by the strong progress in hazardous waste and by plastics recycling taking off. Together with the major reduction of our costs, it resulted in a very satisfactory increase in EBITDA. Slide 6. The commercial successes of 2019 concern all our geographies and all our business sectors. The rate of renewal of our contracts that have expired remains very high. A new contracts are still being won, not only in our traditional businesses, but also especially in businesses that have been developed in the past few years and which meet the key challenges facing the planet environment. This slide shows the main contracts won in 2019. Turning to Slide 7. The efficiency plan was particularly effective with cost savings of EUR 248 million in 2019, above our target of EUR 220 million. At the end of the 4 years of the 2016-2019 plan, the cumulative savings exceed EUR 1 billion. These very sound results, Slide 8, resulted in a further improvement in our ROCE, and this graph shows you the group's value creation that has increased strongly over the past 4 years. This increase in ROCE, Slide 9, is the result of a significant increase in EBIT and the stability of our capital employed. This stability is reflected in the stability of debt, which you can see on this graph, has remained more or less stable since the end of 2015, including when corrected for the proceeds of the U.S. sale received at the end of 2019. And this was the main objective of our 2016-2019 plan. Solid increase in revenue and results with the same level of debt throughout the period, this objective was achieved in full. On Slide 10, the strong increase in our results and, particularly, in our current net income allowed the dividend to increase significantly, shown on this slide. The average increase over the 4 years was 8% per year with the dividend reaching EUR 1 per share at the end of the plan. This was also a major objective of our 2016-2019 profitable growth plan. On Slide 11, as you can see, 2019 was a very good year for Veolia, and puts us in an excellent position to embark upon our new strategic phase. The trend in 2020 should be close to that of the last few years. The main initiatives of the new plan will still only have limited impact in this first fiscal year, with the exception of the sale of our heating business. United States completed at the end of last December, ahead of schedule. Under the new program, this business represented 1.5% of the group's revenue and 2% of its EBITDA. At constant scope, therefore, our revenue should again show solid organic growth in 2020. Efficiency efforts should produce the same level of cost savings as last year, namely about EUR 250 million, and EBITDA should come in at about EUR 4.1 billion. The dividend -- this, of course, takes into account the impact of coronavirus on our operations, less than 1% of the group's EBITDA The dividend policy will remain unchanged, tracking the increase in current net income with our new plan. I will now hand over to Claude Laruelle, who will provide more details about the 2019 results. Claude, over to you.

[Interpreted] Thank you, Antoine. Good morning, ladies and gentlemen. In order to leave time for questions before our strategic presentation, I will only explain the salient points of these results. We're on Page 13. As Antoine has told you, after a sound final quarter 2019, the last year of the plan, ended with revenue growth of 4.3% at constant exchange rates; an EBITDA of more than EUR 4 billion, the high point of our guidance at EUR 4.022 billion, representing an increase of 4.5% at constant exchange rates. Current net income at -- up very strongly by 13.5%, reaching EUR 760 million. CapEx was virtually stable at EUR 2.2 billion, and free cash flow after growth CapEx was up strongly at EUR 868 million. This reduced the debt to EUR 10.680 billion after the sale of our urban heating networks in the United States for USD 1.250 billion, which took place on December 30, 2019. On to Page 14 now. The group business was again driven by international growth, international growth of 10% in Q4 and 8.7% over the full year. There was strong growth in Japan in Q4, plus 12.4%, particularly buoyant, thanks to its municipal water business, where 100% of contracts were renewed, but also by new developments, such as Hamamatsu waste water concession. Europe was marked by a mild start of the winter, which had a negative impact of EUR 29 million on revenue in Q4 and by a very sharp decline in recycled paper prices with an impact of EUR 43 million in the fourth quarter alone. As regards global businesses, the hazardous waste activity was still going in the right direction. The decline in revenue of 2.6% in Q4 resulted from the withdrawal from construction at VWT. On to Page 15. On this page, you will find the same annual figures presented in a different way by geography. So let's move on right away to Page 16. The revenue bridge shows trends that are similar to those of previous quarters, a slightly positive ForEx effect, 0.5% over the whole year, slightly positive; mainly organic growth in 3 out of 4 quarters; external growth from small acquisitions contributing an increase of 1.1% in revenue. The 2 main effects that boost our organic growth are still the price effect and commercial gains, which remain very significant. Finally, you can see the negative climate effect, which virtually doubled compared to the end of Q3 at minus EUR 68 million due to the particularly mild start of the winter in Europe. On to Page 17. For the first time, the waste business exceeded the EUR 10 billion mark, growing by nearly 6% at constant exchange rates. Two activities continued to drive this growth: hazardous waste, up 14% over the year; and plastics recycling, up 26%. Volumes and prices for all waste went in the right direction during the year, increasing by 1.5% and 2.4%, respectively. In the fourth quarter, the 48% fall in paper prices weighed on our business and caused us to become more selective regarding the volumes of paper recycled. Volumes and recycled materials prices had a combined negative effect of minus 2.5% on organic growth in Q4 and minus 1.1% over the whole year. Excluding that effect of paper prices and volumes, organic growth remained solid at plus 3.4% in Q4. Page 18. We ended the year above the top of the range that we had set ourselves, in spite of the unfavorable impact of the climate and the price of recyclates, which demonstrates the resilience of our growth model. The growth of EBITDA continues to be driven by the cost reductions of EUR 248 million, well above our target of EUR 220 million and also by the trade volumes effect of EUR 91 million. It is worth noting the impact of the mild climate in Europe, which had an additional negative effect of minus [ EUR 11 ] in Q4 and the price of recycled raw materials, which had an impact of minus EUR 30 million over the full year, a sharp increase compared to 2018, mainly due to the fall in the price of paper. Now we're going to review our activities by geographical zones, starting with France on Page 19. Water France continued to have very satisfactory momentum, thanks to its transformation plan and has had further commercial successes, such as in Nîmes and, more recently, in Quiberon where the reinvention of our offers and the contribution by our innovations are recognized. With regard to the waste recycling and recovery business, as we indicated in Q3, we continue to be very selective regarding municipal waste collection contracts. We have reviewed all of our incineration contracts, and we've also benefited from price increases. The fall in the price of paper had a negative impact on EBITDA of 6 -- of EUR 13 million over the full year period. For France as a whole, EBITDA was stable year-on-year, and the progress made by Water France offset the waste business. Page 20. In Europe, the business trend was very similar to Q3 in the various countries. EBITDA was especially affected by contractual changes concerning water in the Czech Republic. Without that effect, EBITDA growth for the year period was 6.9% in spite of the effects of a mild climate and paper prices and sharp decline. The United Kingdom again turned in a very sound performance in all its environmental services businesses. On to Page 21. As I was saying, the Rest of the World segment continued to be the most dynamic, with China continuing to grow strongly in 2019, both in terms of revenue, plus 19.3% at constant exchange rates; and EBITDA, plus 19%. All of its businesses contributed to this growth. In line with previous quarters. Latin America also experienced double-digit growth of plus 16% over the year period at constant exchange rates. With regard to global businesses, on Page 22, the trend is still the same. Hazardous waste is driving the business and the results. The repositioning of VWT and the withdrawal from construction, that we'll explain to you in the second part of the morning, resulted in a decline in revenue associated with its new business model focusing on technology. However, the segment, as a whole, grew its EBITDA satisfactorily by plus 10.6%. Page 23. In a way that was identical to previous quarters, the growth in EBITDA was reflected by slightly higher growth in current EBIT of plus 5% over the whole year period at constant exchange rates. It's worth noting the very satisfactory performance of our joint enterprises, which contributed an amount of EUR 130 million in 2019 compared to EUR 116 million in 2018, a year which included EUR 16 million in capital gains from disposals in the United States. Page 24. In the same way, the growth in current EBIT resulted in a significant increase in net income, 13.5% at constant exchange rates and 8.8% excluding capital gains on disposals. Financial charges remained flat in Q4 after the increase that we experienced at the end of the year -- at the start of the year, sorry. And the tax rate remained low at 23% compared to 22% in 2018, taking tax losses into account. On to Page 25. One very satisfying point is that net income group share increased very considerably by 42% to EUR 625 million. The main highlights are, of course, the capital gain on our sale of energy activities in the United States, but also, the impact of the restructuring of VWT's activities associated with the ending of construction. 2019 was the last year of our plan, and we've put Veolia in an optimal position to launch the new strategic plan with remarkable generation of free cash flow of EUR 868 million due to successful control of CapEx, and an improvement in working capital requirements of EUR 209 million. Thanks to the sale of our heating networks in the United States, our debt-to-EBITDA leverage is 2.66, allowing us to embark upon this new strategic phase with significant financial headroom. Page 27. The bridge -- the deficit bridge reflects the various effects that I've just mentioned. Page 28. Thanks to the good momentum generated in 2019, we remain confident for 2020. And you have a reminder of the guidance presented by Antoine: solid organic growth; cost savings of at least EUR 250 million; EBITDA of about EUR 4.1 billion; dividend growth in line with the growth of current net income, the 2023 plan. Thank you for your attention. I now propose that we take some questions. We will focus on the 2019 accounts. We'll also have a further Q&A session after the strategic presentation.

[Interpreted] Who would like to ask the first question? Emmanuel? Mr. Turpin?

[Interpreted] Mr. Turpin from SocGen. I'll follow your recommendations and limit myself to the 2019-2020 financials, some detailed points. Could you explain the methodology that you followed to quantify and anticipate the impact of the coronavirus on your 2020 guidance? You've given an indication for EBITDA. I'm sure there is some minorities and tax interplay that will reduce the impact on net income. Could you help us quantify that? Secondly, more generally, could you assist us on the guidance metrics for 2020? Typically, you use energy prices and ForEx at the start of the year. If you could explain, that would clarify things for us. And lastly, you mentioned a very strong increase in earnings from associates and JVs coming in at EUR 130 million. Are there volatile or one-off nonrecurring items in that figure that we need to factor in, in order to foresee 2020 capital gains or the write-backs on provisions?

[Interpreted] Well, I'll answer your first question on the virus, and Claude, if you could answer the 2 other questions. So on the coronavirus, to start off with a few important points for us, we have 15,000 employees in China. Today, not one of them is sick, and none of them have been sick during the earlier weeks, and that's the best news for us. It also means that we have no activity that's really in the eye of the cyclone of the epidemic, and we have no business in the Hubei province. Furthermore, Veolia's activities are service activities that are delivered locally. So the consequences in a service business linked to a -- this business are local. We don't have any supply chain impact. And so the consequences today, we believe that they will only occur in China. Before setting out the methodology, let me just give you an update on state of operations. All our facilities are in service. Not one has closed over the past few weeks. Operational staff are at work on site. Most of them are housed on-site locally in order to avoid home-to-work travel. Functional staff, for the most part, are working from home remotely. So all our facilities have remained open and in an operation. No consequences of the virus in the north of the country on our district heating. It's very cold in north country, so the virus doesn't resist. No major consequences on the water and sanitation networks because people, even if they stay at home, continue to drink water. Our waste treatment plant -- hazardous waste treatment, that we have 8 or 9 plants opened to-date, remained open and received tons of waste to process, slightly less tonnage than expected. Volumes treated in February is just above the 75% expected volumes. Slightly less volume, but we had sufficient significant quantities of volume. Final consequence, we also have 7 plants currently under construction for hazardous waste in China. There the work is running late. We'll probably lose out 1 or 2 months but would probably catch that up towards the end of the year when things get right again. So that's why the consequences are pretty limited. We -- as estimate being less than 1% of the group's EBITDA. China for Veolia, let me remind you, is 4% of its revenue, 6% of its EBITDA. So the consequence today assessed at less than 1% of the group's EBITDA.

[Interpreted] Now our assumptions for that is a gradual return to normal, as of the end of April, to return to a normal period at the end of Q2, with an impact essentially on February and March. That's what we can say today, and that explains our forecast at the beginning of the year that takes into account those developments, thus, far. Now regarding the guidance metrics, the only metric is ForEx. ForEx at the end of 2019. And to answer your point, regarding energy prices, when -- but we have a hedging policy, and we have a forward selling policy. 90% of our electricity sales are already sold. So given our policy, at the end of September, we systematically sell more than 70% of the energy for the following year. So this hedging policy for energy was not actually --we don't anticipate any impact. We have no impact in our guidance on energy prices. So it's just the ForEx impact that we took as a benchmark the end of 2019. As regards the volatile items that you've referred to, the volatile items, what was consolidated at equity, we had a few items in 2019. So there, again, items to explain that, essentially, focused on 2 countries, Germany and Mexico, with net income. We have significant minorities on the Braunschweig -- mild climate in Braunschweig led to a reduction in net income. We'll see at the end of the year how those items will impact. There may well be a fluctuation of those minority holdings, but it's too soon to say at this stage.

[Interpreted] [ Miriam ] [indiscernible] from [indiscernible]. A question on coronavirus. Someone had calculated the impact because there's -- there were 6 or 7 sites in the industrial parks that had stopped their activity since the Chinese parks had been closed. And all of them were closed except for SCIP in Shanghai. How come you had no shutdowns? Are you not present in industrial parks? How do you explain this difference?

[Interpreted] Well, I don't explain it. I mean, our plants remain -- we own our hazardous waste plants in China. They're industrial areas, parks or not. And we've taken precautions so that our employees are present and the plant remain open with the treatment activities. We haven't closed any plants in February. We had less tonnage because the industrial activity had dropped a little, but we have no shutdown of any toxic hazardous waste plant.

[Interpreted] I have 2 questions. Could you return to the reasons which explain the low operational lever for 2019? Growth -- organic growth is about 4%, same for the EBITDA. Could you explain why there has been no more acceleration on the operational side? And for the tariff indexation of water, you benefited from the 1.4% increase -- 1.4% increase. What can you expect for 2020? And what is reflected in your guidance?

[Interpreted] What was your second question?

[indiscernible]

[Interpreted] Let's begin by talking about price indexation in France. Currently, in water, in France, we're seeing renewed inflation. You saw in 2019, some speeding up, plus 1.4%. We're expecting a similar increase according to our initial estimates, currently, we would say, 1.5% for 2020. So in other words, a continuation of these price increases for water 1 year to the next.

[Interpreted] Your first question had to do with operational leverage. As you saw, in the points we explained to you, climate, weather had a significant impact on 2019. In 2019, degree days were lower than even in the case in previous years. In addition to that, recycled materials, especially recycled paper prices, explain the relative decline in some operating units, and that has an impact on our operational leverage, to answer your question. Let me add a last point, we changed one important contractual point in the Czech Republic when we renewed and extended it for a long term. The contract was a concession contract previously and became an [indiscernible] contract, which means we no longer have the expense of the assets, we have operations. EBITDA, therefore, has gone down quite a bit because it's not the charge of your asset. We have basically the same revenue. We still run the network. Under EBITDA, the compensation for asset goes directly to owner of asset -- the asset, which is a client, so the EBITDA margin is much lower. That had a significant impact to the tune of around EUR 50 million. Questions on the telephone?

Yes. We have a first question by phone from James Brand from Deutsche Bank.

Two questions, please. First is just on the hazardous waste plants that you're building out in China. Could you just tell us what the capital employed is going to be in those 7 plants? And then also, do you see any risk of overcapacity of hazardous waste? It seems like everyone is building out lots of plants at the moment. And then my second question, just on the collapse in recycled prices that we saw in Q4. I think it's got even worse in Q1 given the selloff that we've seen globally in commodity prices. Could you -- but just in terms of what happened in Q4, I was wondering whether you could give some more details around what's driving that because it seems pretty dramatic.

I'm going to start with maybe the first question on the hazardous waste in China. You're right. We already have 8 plants in China in hazardous waste, China and Hong Kong, and we are building 7 new ones. We anticipate, and that's going to be presented to you in a few minutes, that we're going to have 15% market share in the end of our 2023 plan. So yes, there are many plants in China, but I can tell you there are even a bigger potential than the plants we already have. So the price are well-oriented, and I don't see anything but a big potential here going forward. In terms of the Q4 volume for waste, I can say we still are on the more or less same type of volume and trend we've seen in the last few years, with one big specific event, which was very much commented by Claude and Antoine earlier on, which is the paper price, which has had a consequence as well on the paper volume because we are being extremely selective, I know, to favor the quality of those paper and what value it can create for us, and in the detriment of the volumes potentially of the bad quality of paper. So that's exactly what we see in that. In terms of the start of the year 2020, what I can say is January was very satisfactory. And so far, we don't see any major trend being very different from the average one we've seen in 2019. Meaning, we will have to factor in the going on this repositioning in the paper of our activity, and of course, the coronavirus effect, which Antoine has very well commented.

And in terms of capital employed of hazardous waste in China, I don't have the exact number on top of my mind. We can get back to you a little bit later. I would say, with 8 plants [Audio Gap] [Foreign Language]

[Interpreted] Someone else from the telephone had a question.

Question by phone from Vincent Ayral from JPMorgan.

Good results. Congratulations. I'm still getting my head around the coronavirus. Obviously, there've been some parks that have closed, so you are in the initial parts of a -- how do you see a bit of volume being down? Why isn't it a bit more material? So that's one. The second, we've had, I mean, a resurgent here. So I don't know if you already answered that, but the tax assets you have in U.S. and in France, could you give us a bit more color on your tax outlook? What type of a resulting effective tax rate are you betting on from now to 2023? How much tax asset would be used? That would be very useful for us. And last question, I can see you have -- you're having in your press release a very green type of presentation, which is absolutely fair, it's your core business. We know you have still some coal-fired distribution asset -- district heating assets in Eastern Europe. So are you looking at disposing, converting? What are the plans on the -- this specific one, knowing that you already sold, for example, the U.S. district heating asset, which you deemed mature?

[Interpreted] Thank you, Vincent. I'll answer the first question, my colleagues will answer the others. Let me remind you that the weight of China in Veolia's EBITDA is 6%, about EUR 250 million. In China, we have many activities, we have heating networks, we have water concessions, and we have hazardous waste processing plants. The first 2 represent the bulk of those EUR 250 million, so hazardous waste represents a small part. When I say on our estimate 1% of EBITDA, so 1/6 of China's EBITDA for a small part. If I exclude energy, at least heat and water, that represents a quite significant quantity as a proportion of that hazardous waste activity. That was why it represents a figure of that order, which is fully in line with the figures regarding hazardous waste in China, so not much surprise there.

Turning now to taxes. I'll say a brief word, Vincent, a bit more detail, giving you a bit more color during the strategic present -- explaining why we expect a tax rate that will be below 25% across the period of the plan. Two brief words on 2019. So 2019, we haven't activated any deferred tax assets on the French tax scope. Given the profitability of our U.S. business, we activated just over EUR 70 million on the U.S. tax scope.

[Interpreted] Concerning your third question and your appreciation that our presentation is very green, thank you for that, indeed. You will be seeing in the presentation of the strategic plan that we have high ambitions for ourselves and our clients in the context of the impact of 2023 plan. Concerning your specific question on coal assets, details will be given later on by Antoine Frérot. What I can say is that we have chosen to not dispose off these assets to anyone who would not undertake to transform them. But we have decided to transform them and organize the transition of coal assets ourselves.

[Interpreted] A question in the room.

[Interpreted] I'm from Morningstar. On coal, before you transform those plants will be a beneficial impact of declining coal prices on your margins in Eastern Europe. The heating business and commodities, you're expecting a positive impact on margins, the drop in the price of fuel of oil on your fuel cost.

[Interpreted] Let's start with fuel. We have positive impact, but that, today, is very limited in time. It's not an impact today that we can view as material at group level. We'll see full year, but if full year, the price of oil remained as low as it is today, there will be a bigger impact on the cost of fuel for our various operations and, notably, for waste collection, essentially, France, the U.K. and Germany. Price of coal, again, as I said, we have a long-term policy. The long-term policy goes for electricity, for CO2 and also, in part, in the price of coal. So the decline in price in coal will only be partial in the expected effects in 2020. And if it continues, of course, it will continue into the out years because, of course, we're hedged on the energy prices. For online question. Well, we can't hear that. Question from the room perhaps? No further questions on the 2019 results and the start of the year. Questions over the phone? No further questions. Well, thank you for this quick session on the 2019 because, of course, the big chunk will arrive with our plan. We'll have a short break for coffee and resume at 9:30 sharp here. [Break]

[Interpreted] As you just saw our plan at -- is at its historical moment at our contemporary societies. We have never been so aware of the environmental and climate emergency, which is creating anxiety and huge expectations. However, I think that we can really remain optimistic because I know that at Veolia, we have the skills and the solutions to take concrete action. In this context, Veolia's purpose becomes ever more relevant and powerful. We formulated this purpose at the beginning of last year and presented it to the last shareholders' meeting. It states -- this purpose states why it is important for our company to exist and develop, and explains for which of the world's great challenges, it seeks to be useful and provide solutions. It's because our company is useful that it is prosperous. And because it will be even more useful in the future that it will continue to be more prosperous. For this reason, our purpose guided us in the preparation of our new strategic program for the next 4 years. It was also devised following extensive consultations and multiple exchanges with our principal shareholders, stakeholders. This program identifies the group's know-how and the activities which may be the most useful and have the most impact on the challenges that we have chosen to solve. For this reason, we have called this new strategic program IMPACT 2023. We are going to give you the details and the main features of this. But our purpose also explains how we intend to demonstrate its concrete execution, and I will, therefore, present you with all of the indicators that we will publish regularly over the next 4 years to report on our performance as it concerns our principal stakeholders. Before going on to this new program, we're on Slide 7 now. I would like to briefly review the phases that preceded it. The first between 2012 and 2015 was intended to turn the business around and transform it. There were 4 main objectives, which are summarized on the left of this slide: debt reduction, refocusing and reorganizing the group, cost savings, repositioning and modernization of our offers. The second, between 2016 and 2019, aim to prove that once it had been turned around, our business could achieve profitable growth without increasing the capital employed by the group. There were 2 main aspects, which are summarized on the right-hand side of this slide: growth, mainly organic and completed with small acquisitions; and the continuation of vigorous efficiency and cost savings efforts. Both these phases achieved their objectives. And frequently, even exceeded them. Slide 8. This slide briefly summarizes the numerical results of the first transformation plan between 2012 and 2015. It shows the success of Veolia's recovery and transformation: debt divided by 2; cost savings of EUR 800 million over 4 years; a market increase in EBITDA, EBIT and net income, free cash flow covering the dividend. However, what the figures do not directly show us: we have a Veolia unified with a new geographical organization; a single Veolia per country refocused on about 50 countries; a repositioning of its offers in promising and often new activities; the new frontiers of environmental services; and lastly, the development of a new clientele that of industrial companies. The next slide. In a similar way, this summarizes the numerical results of the second plan. The growth plan between 2016 and 2019. It shows how year after year, all the indicators continue to improve. Slide 10. If you look at this in more detail, you can see that all the targets set were achieved. When we launched this plan, you may recall, we set ourselves the following objectives. Average, mainly organic, annual revenue growth of 2% to 3%, mainly organic. Higher average growth in EBITDA between 4% and 5% per year due both to revenue growth and also due to the efficiency plan, an increase in current net income of nearly 10% per year and a debt -- a dividend, sorry, increasing at more or less the same rate. And all of the above, with capital employed and thus, debt remaining more or less constant. This meant the surplus free cash flow after payment of the dividend was reinvested to sustain and finance growth. The results obtained after 4 years are very satisfactory. On the right of this slide, you can see that. During the 4-year period, revenue increased a little faster than anticipated by an average of 3.6% each year, in spite of the slow start in the first year, some of you will recall, which was easily offset thereafter. EBITDA grew by 4.6% each year. Current net income grew by nearly 10%, 9.7% to be precise, every year on average. And debt remained more or less constant at equivalent standard. During the 4-year period, revenue growth was mainly organic, 70% organic, 30% growth through small acquisitions. The majority of growth came from the new activities in the environmental businesses that we had identified and prepared during the previous plan. 80% of the growth was provided by our industrial clientele and 20% by our municipal clientele, thus gradually rebalancing our customer mix so that now there is a virtual balance between the 2 types of customers. On the next Slide 11, stable capital employed and strong growth in results, thus resulted in a marked increase in profitability reflected on this slide by the increase in ROCE. Following the increase in current net income and in accordance with our targets announced at the start of the plan, the dividend paid to shareholders has increased at a steady rate by an average of 8% per year over the 4-year period, namely by cumulative 37% over the 4 years. Slide 12. Veolia's share price has also increased strongly during the period. When you add in the increase in the dividend, the total return for our shareholders -- the total shareholder return has outperformed the market very substantially. An average of plus 17% per year on average for Veolia compared to plus 8.5% for the CAC 40 and plus 6% for the utilities sector. On this chart, our -- we see that our share price has only gradually ceased to be correlated to that of utility companies due to the regularity of our performance. Our development and our investments, therefore, require a certain period of time to take full effect. And there is some delay before they are taken into account in the share price. I'm on Slide 13 now. Buoyed by the successes, Veolia is now ideally placed to embark upon a new phase of its development. In fact, thanks to the repositioning efforts made in the course of the 2 previous plans, our business is the worldwide leader in combining all types -- in combating, sorry, all types of pollution, particularly the types of pollution that are most dangerous for the planet and the most difficult to process, hazardous waste and carbon emissions. I do not think that anybody has such a historically or technically sophisticated and economically accessible solution set. We have planned well ahead and are, therefore, well prepared for a new phase of development. More focused growth to respond to the world's main environmental challenges and to target increased profitability. This is our new IMPACT 2023 program, a 4-year program between 2020 and 2023, the principles and broad outline of which are as follows. Today -- we saw this in the film a moment ago. Today, throughout the world, there are major concerns about the environment. At every level of society, in the political, associative social media and economic fields, there seem to be huge needs and expectations are high concerning carbon emissions and, of course, their consequences for the climate. But also water pollution and better waste -- water management, the future of waste and its treatment or recycling, cleaner industries and healthier cities. New programs are also emerging with increasing regularity, which urgently demand new solutions. The excessive consumption of raw materials and the plundering of the planet. The quality of the air we breathe and its effects on health. The issue of food supplies and our ability soon to properly feed 10 billion people while consuming less water, less energy and less earth. The general awareness of all these challenges has resulted in the mobilization of young people and consumers, fellow citizens, exerting increasing pressure on politicians' decisions and actions of businesses. Veolia has key advantages in meeting all these challenges in terms of the skills, technologies and know-how, vital for the rapid provision of solutions, some of which are particularly rare. These include the treatment of hazardous waste, of course, and now recycling of certain industrial products or rare materials; the recycling and recovery of a large proportion of plastics; energy efficiency for industries and also buildings capable of very significantly reducing energy consumption and even recycling lost energy; replacement of fossil fuels with renewable energy sources; the ability to guarantee good air quality in all buildings; solutions to free agriculture from the use of chemical products and allow it to consume less energy, less water and less earth. Many of these solutions make an active contribution to mitigating climate change. The businesses in which Veolia excels could represent up to 30% of the reduction of greenhouse gas emissions necessary to reach the targets set by the Paris Agreement at COP 21. Slide 15. On this basis, if I wanted to summarize the main thrust of Veolia's new strategic plan, I would say, one, it takes place in a particular context and environmental priorities have never been as strong; two, it demonstrates this plan. It demonstrates a high ambition to make Veolia the benchmark company and the world's leading contributor for ecological transformation. So it sets a priority. The research for maximum impact for each of our activities, whether the impact is environmental for performance but also societal and financial; four, it has a consequence, particularly significant priorities and choices among our activities with a major acceleration of activities, which have the biggest impact for the benefit of the planet and with a rotation of 20% of our capital employed; five, this plan also invents the future increased human and financial resources. First of all, to reinvent and strengthen our traditional businesses and to create the solutions that are still required for the world's new environmental challenges of today and tomorrow; six, its execution requires great discipline, a cost savings plan of EUR 250 million each year, and debt that never exceeds 3x EBITDA throughout the period of the plan; seven, lastly, this plan proves its commitments, a range of costed criteria, measuring performance for the benefit of all of our stakeholders, which will be used as the basis for compensating the group's senior executives. Slide 16 now. More specifically, IMPACT 2023, therefore, shows significant priorities and choices. For this new plan, the group's activities are divided into 3 categories, depending on the type of policy to be applied. First of all, activities to be accelerated strongly. Next, activities to be optimized while pursuing reasonable development. Lastly, activities to be reduced or sold. First of all, the activities that we want to accelerate. In particular, these are: the management of hazardous waste, the recycling of plastics, the recovery of materials from organic waste, refuse-derived fuel, RDF, the energy efficiency of buildings, the management of water from industrial processes, the ecological management of industrial parks. These activities are fundamental to protect nature from the most hazardous types of pollution and to significantly reduce carbon emissions right now without waiting for many years. If they are deployed on a massive scale, they will have a major impact on the preservation of the planet and on the quality of life of its population. We know that the technologies exist. Veolia excels in these technologies and is already the world's leader in this area. Finally, solvent demand is increasing, thanks to the regulations being put in place and an ever-increasing number -- in an ever-increasing number of geographical areas. The time has, therefore, now come to greatly accelerate the deployment of these technologies, and that is our plan. The second category consists of activities that we want to optimize and also continue to develop reasonably. These are traditional businesses such as municipal water, the treatment of ordinary waste and heating and cooling networks, where our current customers very regularly renew their trust in us. But also, where on a scale that has not been seen for 10 years, our services are sought by large cities and regions looking for innovative and complex solutions. These activities are more traditional among the range of services provided by environmental businesses. Veolia has been engaged in these activities for a long time and is also the world leader in these areas. However, for a number of years, we've been developing innovations in these areas to increase performance and impact, as Estelle will explain in detail later. Also while growth opportunities in new regions of significant size have been few in number for about 10 years, we're now starting to see demand increasing there. I think this resurgence of interest can clearly be attributed to the steps Veolia embarked upon a few years ago to modernize and reinvent its businesses, particularly in order to satisfy the increasing role and requirements of the end consumer in our municipal activities. There is, therefore, still room to make further improvements in the performance of these activities and to ensure reasonable growth while taking advantage of the most attractive opportunities that they offer, and that's what we propose to do. Lastly, third categories, the activities to be slowed or sold. These activities have one or more of the following characteristics. They have either reached maturity in their context of Veolia's know-how, as such it is difficult to add value in terms of business and wealth creation, but also the level of performance already achieved could interest other businesses, for example as for the case of our heating networks in the United States that were sold at the end of 2019, slightly in advance of our new program so as to give us some momentum. And it will be the case of other assets over the next 4 years, or other possibility, the skills that these activities require have become widespread among many players around the world with the result that they have become much too common place and heavily competitive. The impact that Veolia can make in these areas is therefore reduced. For example, this case of the construction of water treatment plants where the civil engineering component exceeds the treatment technologies component -- proper that is our only specialty for these purposes. Also the case of waste collection activities without associated treatment or recycling services and facility management activities where the proportion of sophisticated techniques is low and where duty of care obligation is preferred to an obligation to produce results. That's why, for these 2 types of activities, those have become mature or those that have become too competitive, we prefer to benefit from the fruits of their sale or to reduce our investments in them in order to finance the activities that we want to accelerate. Slide 17. Globally and cumulatively, over the 4 years of the IMPACT '23 program, we will see industrial or financial investments of EUR 5 billion devoted to the creation of new activities in the 2 categories to be accelerated or optimized, but also divestments of EUR 3 billion in the category to be reduced or sold. And these EUR 3 billion will allow us to finance new investments. So there will, therefore, be significant rotation of our capital employed, about 20% of the EUR 16 billion in capital currently employed by the group. In 2019, we've taken some early steps and anticipated the implementation of this new program by selling our heating networks business in the United States for just over EUR 1 billion, a sale that was included in the divestment program of EUR 3 billion and demonstrates that this program is entirely achievable. Over and above this first step that has already been taken, you'll understand, I'm sure, that to avoid impeding any divestments, we cannot give you details about the assets that we plan to sell. But the global amount is entirely achievable and will be reached when the program is complete. As to the investment of EUR 5 billion in new developments, it is anticipated that they will be devoted 40% to Europe, including France, and 60% to the Rest of the World. And 65% to our industrial customer base and 35% to municipal customers. 40% devoted to organic growth and 60% to external growth. The balance between the EUR 5 billion of investments for new activities, the divestments of EUR 3 billion, a cumulative amount of EUR 2 billion over 4 years or, on average, EUR 500 million per year, these amounts will allow financial balances to be strictly observed and will mean that the group can adapt at any time to the hazards and uncertainty of today's world. In terms of our debt, our intention is never to exceed a level of 3x EBITDA over the 4 years of the plan. And even to end up with a significantly lower level at the end of the plan. So to achieve this, we cannot invest everything before having divested, but the 2 must be done simultaneously. Hence, the advantage of starting to divest in 2019. The whole of this program is ambitious and it is entirely realistic. In any event, it is entirely within Veolia's grasps, which is certainly one of the few businesses in the world that can aim to maximize its usefulness and impact on the environment, while increasing its profitability and its return. Slide 18. Our IMPACT '23 plan will naturally pay particular attention to climate change. On the one hand, as regards our own CO2 emissions, and on the other, because it is our business as regards emissions that we manage to avoid amongst our customers. Amongst the various actions that we take with regard to our own emissions, those relating to the heating networks that we operate in Central and Eastern Europe, which are powered by coal-fired plants that are most significant, even though they're not the only ones, the businesses that use coal are located in Germany, Poland and the Czech Republic and represent some 3% of the group's revenue. First of all, as Estelle recalled earlier, we will not sell these cold-fired (sic) [coal-fired] activities to purchasers who has no intention of cleaning them up. This would not take the planet any further forward and would further distance the hope of progress being made. To do so would therefore be hypocritical and irresponsible. We'll, therefore, transform these plants ourselves by replacing all the coal with other less polluting, and in most cases, renewable sources of energy between now and 2030. A specific plan has been drawn up to this end. This plan has already underway several years ago and it will be in Germany and Czech Republic, and in the years '20 to '23, we will devote investments of EUR 400 million to this plan, whilst observing the group's usual profitability criterion. Estelle will give details in a moment of the German example in her presentation. Furthermore, as regards the emissions that we plan to prevent among our customers, they will be reduced by the implementation of various solutions. For example, recycling of plastics, which avoids 70% of carbon emissions associated with [ roll of plastic ]. The recycling of organic waste into biological fertilizer, which removes an even greater percentage of emissions, or the manufacture of RDF from nonrecyclable waste, which is a renewable and storable energy source, or energy efficiency of buildings, also industrial sites that reduces the consumption of primary energy and thus, emissions and costs in the same proportion by between 20% -- 10% and 20%, not to mention solutions to adapt and no longer simply mitigate climate change, for example, recycling wastewater for all kinds of uses, including the most noble of uses. All in all, our ambition by the end of '23 is to have enabled our customers to avoid the emission of 15 million tonnes of CO2. Veolia can thus provide immediate solutions on a large scale for regions and industries in their fight against climate change. In this respect, we are also a major player in the world's ecological transformation. Next slide. Impact 2023 is also intended to focus and accelerate innovation to help us carry out our mission even more effectively. Six major challenges facing the world of today and tomorrow have been chosen where the group's creativity can be deployed. These challenges have been chosen not only on the basis of their importance for the future of the planet and its inhabitants but also on the basis of the more differentiating and powerful skills and imagination that Veolia's employees can bring to bear to provide concrete and operational solutions to these problems. Here again, priority has been given to the maximum real impact that we can provide. New offers of services will be put on the market for each of these challenges, and we hope to see the first revenue streams before 2023. Of course, they will serve above all to prepare the future. These 6 major challenges with examples of the associated new offers and services are as follows, shown on the screen. Firstly, health and new pollutants with, for example, solutions for air quality or micro pollutants in water. Secondly, adaptation to climate change, including solutions for reuse of wastewater, but also flood prevention, crisis management with notably the implementation of mobile solutions. Third area, new material loops, including, for example, recycling of batteries from electric vehicles or solar panels, but also the capture and use of CO2. Fourth area, food and the environment with bioconversion of organic waste, either into biological fertilizers or even into animal protein or ecological aquaculture or, lastly, urban agriculture. Fifth area, new energy services, including, for example, electrical flexibility, demand management, development of microgrids and a new digital offers, artificial intelligence for the sorting of waste or management of waste water plants and networks, waste management Internet platforms. Olivier, who's just joined us to manage the group's strategy and to further accelerate the creation of solutions of the future will later talk about the prospects he sees in those areas. Thanks to this program to which we intend to devote EUR 300 million during the 4 years of the plan. Veolia will continue to set the pace in its business and fully intends to become the benchmark company at the global level. Being the benchmark company means more than being the leader. Being the benchmark company means being the company that prepares for the future, the company that imagines and develops the businesses' future solution and standards. It means being the company against which others compare and assess themselves. This is our ambition, of course. Slide 20. We cannot achieve such an ambition without being in a perfect economic state of health and without considerable discipline in executing the plan. The efficiency and cost-saving approach that we've taken for the last 8 years will, therefore, still be on the agenda for IMPACT '23. It's essential to support the growth of the business and to enable results to grow even more. In each of the next 4 years, the target will be EUR 250 million per year of efficiency gains or EUR 1 billion over 4 years. As in previous years, part of these will be passed on to our customers when competitive tenders take place and our contracts are renewed. The remainder will be retained by the company to increase its result. Estelle will provide you with full details of that in a moment. And then Claude will explain in more detail what we expect from this program in terms of financial performance. I will, therefore, confine myself to summarizing the main objectives. In terms of revenue, as you will have understood, we're targeting impact rather than size. Nevertheless, Veolia will continue to show solid revenue growth, which will be associated year after year with the phasing of industrial growths, investments, acquisitions and divestments. In terms of EBITDA against a global macroeconomic background that is more or less the same as we have today, we're targeting EBITDA between EUR 4.7 billion and EUR 4.9 billion in 2023 at constant exchange rate. So the 4 years of the program, the rate of growth of EBITDA will also follow the phasing of investments and divestments, will not necessarily be linear over the 4 years, but certainly, end up in 2023, at least in the range indicated. And it will even provide necessary momentum for further major growth capacity beyond 2023. Again, such a macroeconomic context. Our current net income will also continue to grow, and our target for 2023 is to achieve EUR 1 billion. In that case, we will propose a dividend of up to EUR 1.30 per share by that time. At the same time, we'll continue to pursue an improvement in the ROCE. These are the ambitious financial performance prospects provided by our IMPACT 2023 program. But, Slide 21, IMPACT 2023 also represents ambitious performance prospects for our other stakeholders. Our purpose confirms that each of them will be given, and I quote, "the same high standards." For this reason, we have defined a range of multifaceted performance indicators intended for our 5 main types of principal stakeholders; shareholders, of course, with financial performance, but also our own employees, our customers, the planet with its current inhabitants and its future generations and, finally, society as a whole. In order to report to each of these stakeholders on the actions taken by the group, we've defined 3 or 4 indicators for each of them. In total, there are 18 performance indicators that we will take care to achieve. Each of them, these indicators, will be measured against a baseline of 0 in 2019 with a progress target for 2023. For some, where there is no 0 point in 2019, the figures will be established in 2020. Each of these indicators will be measured and published regularly every year over the course of the program, so that progress can be monitored. And these measurements will be validated by an independent body from the company. On the chart on this slide, the outer ring shows the 5 types of stakeholders. And the inner ring, even if it's small, you'll have those on the slides given to you. The inner ring shows the name of the 18 indicators. The 2 intermediate ring shows the group's commitments and the sustainable development targets set by the United Nations to which our indicators correspond. I would remind you that UN sustainable development goals are quoted as a reference in the first paragraph of our purpose. At today's meeting, we'll not have time to detail the definition of each of these 18 indicators or their target value for 2023, but you will find them in an attachment to the slide show from today's presentation, so you'll be able to consult them at your leisure. You would also find Slide 22 at the shareholders meeting every year because from now on this set of multifaceted performance indicator for these 5 types of stakeholders will be used to determine the variable portion of the compensation of the group's senior executives, including that of its Chairman and Chief Executive Officer, members of the Executive Committee. In fact, since we wish to assess the quality of Veolia's work and its impact with regard to all these different stakeholders on the basis of this system of costed indicators will naturally reward the successes or penalize the shortcomings of management in the same way that we propose to monitor the concrete application of our purpose and to prove that the management of this company is committed, involved and particularly concerned in its actual implementation. Specifically, the various portion of the annual compensation of senior executives will now be determined up to 50% using financial indicators and 30% using nonfinancial indicators from the range that I've just described. 20% will be reserved for the qualitative assessment. The same will apply to the performance conditions of the long-term incentive plan, which concerns 500 group employees every year. 50% of the conditions will relate to financial targets. The remaining 50% will relate to the nonfinancial indicators of our purpose. Bonuses will, therefore, be justified on the basis of proper implementation of the purpose in all its various dimensions. Finally, every year, a Veolia employee equity savings plan will be offered to a large proportion of the group's employees. We expect a subscription rate of over 30% among eligible employees and thus regular increase in the number of shares owned by all the employees. This is a broad outline of this new strategic plan, IMPACT 2023, which will mobilize all Veolia staff over the next 4 years. This last slide, I've included a few sentences that summarize what the plan is all about that I discussed earlier. I'll now hand over to Estelle Brachlianoff, our COO, who will give you more details of the operational aspects. Estelle, over to you.

[Interpreted] Thank you, Antoine. As Antoine has emphasized, our strategic plan, IMPACT 2023, is based on clear and distinct choices. How do we make these choices? By concentrating on areas where Veolia can make a difference and have the maximum impact. We, therefore, carried out a full and detailed portfolio review, country by country, with operational staff on the ground. This enabled us to distinguish 3 categories of activities, as described to you by Antoine. Activities to be accelerated as a priority and conversely, activities that we wish to reduce or stop because they have become commonplace and no longer deserve our know-how. And between the 2, activities that we still believe in, but that we must reinvent, particularly using digital technologies. I now propose to give you details of these 3 categories, starting with the one in green on the slide, activities to be accelerated, to which we plan to allocate 2/3 of our investments. I'm now on Slide 26. What do these activities have in common? Three things: Very good results today, major potential for development and unique positioning for Veolia. Typically, in these activities, we aim to be nothing less than one of the top 3. Here, we see not only hazardous waste management, the recycling of plastics and the production of fuel from waste, but also activities such as the energy efficiency of buildings and industrial ecology. And also, in this first category, I do not forget offers that currently have more modest revenue, but that are very innovative and allow us to prepare for the future. Olivier will talk to you about this later. As you can see, all these activities perfectly match our purpose and our ambition to become the leader of the ecological transition. Managing hazardous waste avoids the pollution of water tables and waste recovery or saving energy saves carbon. Slide 27 now. And I'll begin with the hazardous waste, which will be an important source of growth for Veolia in the next 2 years. To start with, here is a short film that will give you a better understanding of what this business really involves. [Presentation] As you've seen, Veolia's know-how is unique. First of all, because we can provide practically all types of treatment; for each type of waste, its own treatment. High temperature incineration at 1,150 degrees for organic components, biological treatment for oil and water and physical chemical treatments for acids and base elements, like in carbon atom so that they do not burn. Not to mention, radioactive waste and polluted soil. Slide 28 now. You see here that we are also established worldwide with a presence on all continents, making us the leader in this business. We are very proud of this network of assets that we have built over the years in Europe and in the United States, 2 wonderful platforms, where we make about EUR 1 billion in revenue in each of these platforms. And this platform, which is growing in China, which has grown by 35% per year in the last 2 years. We are also positioning ourselves in other countries where potential exists. That is to say where there are industries and where legislation is applied because pollution is always more expensive to treat than to release into the environment. I will give you more details as to these countries in a moment. Why do I talk about a network of assets rather than contracts when talking about this activity? Because in hazardous waste, the value is to be found in the treatment sites. Combined with their burdensome administrative authorizations, these sites belong to us, and they are very difficult to duplicate. This business segment on Slide 21 -- 29 produces excellent results, and we have major ambitions because we plan to almost double our revenue to EUR 4 billion, while maintaining our profitability. How will we achieve that? By continuing to invest in places where we already have a presence in the United States, Europe and China. We said earlier, in China and Hong Kong, we already have 8 plants, but 7 others are under construction, and we anticipate that we will have a market share of 15% at the end of the plan. But also by transferring our know-how to new geographical zones. This year, we're going to open a new plant in Singapore, launched construction of our plant in Jubail in the Middle East and establish ourselves in South Africa and in Ecuador. To a large extent, our development will be organic. And when we come to buy assets or sites, we will do so to increase capacity, contribute our know-how and modernize them. This development model is very virtuous and creative of value. It involves investments that will develop -- deliver their results over the years of the plan. As we are always the owner of all of these key assets, we anticipate delivering results of this kind for very, very many years, and these are wonderful results. I'm now on Slide 30. A recent example in the United States is the purchase of Alcoa's assets in Arkansas. In the United States, we're #3 on the American market, but we collect more tonnage than we can manage, which means that we have to divert some to competitors. So to create more value, to increase our rate of internalization and thus create more value, we wish to increase our treatment capacities, particularly in terms of storage where we do not have a presence. This is where the Alcoa site comes into play. It includes a landfill site for hazardous waste and an incinerator until now used exclusively to treat its own residues from aluminum production. We're going to invest to increase the capacity of the site to make it possible to treat new types of waste and at our know-how and accept new customers. We anticipate that we will generate income of about $300 million per year on this site. I'm now on Slide 31. Another example in Europe where hazardous waste incinerators are fully utilized. Our project with Evonik on the Marl industrial site will provide us with new treatment capacity in 2023 in a country where previously we had little presence. What will we be doing? Again, we will invest to increase the capacity of the existing incinerator, which treated the Evonik waste. We will build a new one next to it and attract new flows of waste in addition to those of Evonik, which we will also supply with thermal energy to replace the coal-fired furnace and add that to our network. So as I said, the coal-fired furnace will be replaced by our incinerator for hazardous waste and that will reduce the carbon footprint of this client. Now Slide 32. Another source of growth for Veolia over the next few years will be plastic recycling. There are, in fact, 3 types of plastic recycling. Mechanical recycling, which is the one we think about first, where plastic waste is -- which is collected elsewhere is sorted, washed, purified and extruded to produce granules, which are then sold on to plastic specialists for PET bottles, or in the case of PE or PP, to industrial companies to produce car bumpers. In the case of complex mixed or lower quality plastics, there are 2 possible alternatives. The first, which functions today already, the production of fuel from waste, also known as RDF, for refuse-derived fuel, which can be a good alternative to fossil fuels such as coal, which means that it is now very much in demand in many European countries. And third possibility, chemical recycling, which involves depolymerizing the plastic to put it back into the oil refining process. This is not yet a technically and economically proven model. Slide 33 now. Veolia, as you know, has had a presence on this plastic market 4 or 5 years now. But in the last year or 2, things have seriously accelerated. Why? Legislation has helped, but the acceleration has mainly been caused by consumers and pressure from the general public. Public who? Like all of us have seen films like the Blue Planet, showing the pollution of our oceans and turtles choked by plastic drinking straws. That has resulted in major brands making a commitment to include a certain level of recycled content in their packaging. And Veolia is uniquely positioned to respond to this booming demand, not only due to our technical know-how but also because we have access to reserves of raw material, namely waste. This means that we have been able to sign strategic partnerships with big names such as Danone, Unilever and Nestle. Our ambition for the IMPACT 2023 plan is to more than double our revenue for these activities, while maintaining our profitability at the current satisfactory level of just over 10%. I'm now on Slide 34. An illustration of the strong demand for recycled plastic is our recycled PET plant in Indonesia, which is due to open this year. At the start of the project, Danone came to see us to meet its commitments to use recycled plastic in water bottles distributed in that part of the world. They came to see us to meet this commitment and -- so that we could help them find a solution. We built a plant, and we're going to open it soon. A sign that times have changed. Our remuneration does not refer to the price of virgin plastic, but guarantees us a transformation margin. Right now, recycled plastic is more expensive than raw plastic because of the low price of oil. Slide 35. Another method of recovering waste after recycling is RDF, or refuse-derived fuel, which is made from nonrecyclable waste. We have about 10 projects in Europe where we use RDF as an alternative to fossil fuels such as coal, particularly on industrial sites. One typical example is our project in France on the Solvay's site in Lorraine where Solvay produces sodium bicarbonate, and the process requires a substantial quantity of steam. Up until now, the steam was produced by 3 coal-fired boilers. In the next 3 years, they will be replaced by a new 180-megawatt boiler fueled by 350,000 tonnes of RDF. In Poland and the Czech Republic, RDF will be part of the energy mix that will replace coal in our own heating networks. Still in the field of energy, on Slide 36, we have major ambitions concerning the energy efficiency of buildings. Thanks to Veolia, our clients can save between 10% and 20% on their energy bills, and the same amount of CO2 emissions. Typically, our clients are hospitals, shopping centers and large industrial companies. And the keyword here is data and digital. Real-time sensors measure the temperature or use of the building, making it possible to manage consumption and production in real-time or to anticipate breakdowns rather than repair them. This is all done at our smart centers, which we call Hubgrades. And you see a picture of the one we have in our subsidiary, Enova, in the Middle East. Slide 37. Finishing off the section on the activities that we wish to develop. I will say a few words about our on-site services to industrial companies, and in particular, about industrial ecology. This offer is unique to Veolia and combines energy waste and water activities. We are in a unique position. There is a very good illustration of this model at the Kilpilahti site. This is a very large site and there are a lot of industrial companies; the plastic specialist, Borealis; Ashland operate alongside each other. And up until now, the steam that was necessary, the vapor was produced from highly polluting heavy oil. And we have found a solution to replace it with asphaltene, which is a residue from the production of the refinery. We soon will have a 450-megawatt thermal generator which is due to enter service soon. And it will be shared by all the industrial companies, and it will use asphaltene, a refinery production residue, instead of heavy oil. For the 20-year period of the contract, there will, therefore, be less pollutants, less CO2 and lower cost for our clients. I will now move on to the second category of activities on Slide 38. The group's historical activities which still have potential but which must be reinvented. Three keywords when it comes to transforming these activities are efficiency, innovation and client, and digital is involved at every stage. This category includes municipal water, the sale of water treatment technologies and services, while on the other hand, our construction activity will cease, as I will explain later; industrial and commercial waste collection and treatment; and urban heating networks. I'm now on Slide 39. I will say, first, a few words about our municipal water activity. This is a business that still has potential not only in Europe but also in Japan and Australia. We are in the process of reinventing this historical activity of the group. When one asks the mayors of Hamamatsu or Bordeaux what made them choose Veolia, the same subjects come up first: trust, transparency, local roots and the consumer. Trust in the fact that we will supply quality water at the best price. To guarantee this, we're always looking for productivity gains and digital technologies help us. For example, with real-time consumption data and artificial intelligence, we have reduced water losses from the networks by 8 points -- 8% in Shanghai and by 6% in Prague. Transparency. We have nothing to hide, as is proved by the fact that, if they wish, local authorities can access real-time data from our Hubgrade management centers on the same basis as our own staff. Local roots. The general public is very sensitive to short supply chains. And they can visit the water treatment plant, which is right next door and which employs local people. Finally, the consumer has become key even though our clients are the local authorities, we therefore do work on the taste of the water, on limescale and on the ease of paying one's bill. In China, nearly half of Veolia's water invoices are paid using a smartphone and Alipay. On Slide 40. A perfect illustration of this is given in France with our different levers and our Osons 20/20 plan. I'm proud of our staff who are well on the way to winning their bet and doubling the margin to EUR 100 million in 2020. The efforts made to increase efficiency and digitize our operations have resulted in a 4% saving of electricity consumption at our wastewater treatment plants. When you consider that we spend about EUR 150 million on electricity in France every year, you can see how this can begin to represent substantial sums. Our efforts to renegotiate unprofitable contracts that have expired are also starting to bear fruit. A very full program has been deployed among our customers -- or the consumer staff, focusing on the customer experience. Finally, in the recent tender procedures that we have won, such as in Valenton, for example, we have found that the new types of contract or governance that we have offered really make a difference. Slide 41. The same ingredients can be found in our transformation plan for the traditional activities of solid waste, namely non-hazardous waste, ordinary waste. In the collection of the commercial waste, digitalization is key. Our clients can receive real-time data on their recycling rates for each site. In Germany, we are even testing the Uber of site waste collection, which is a system which puts site managers in touch with truck drivers. This is a key activity for us, the core of the reactor in solid waste, because it gives us access to flows of waste that can then be directed to recycling or to the manufacturer of alternative fuel, the RDF that I was mentioning earlier. In the treatment of solid waste, namely incineration or landfill centers, there are a few opportunities that we can seize in Eastern Europe and in Latin America. We continue to aim at excellency and improve the energy efficiency of our incineration plants and also the capture of biogases at our landfill centers to reduce our emissions. Slide 42. Finally, in this category, there are the local energy loops and heating networks. There is still much to be done in this segment. In this business, we have identified some development opportunities in Europe. Typically, the takeover of heating networks powered by gas boilers, where we think that there are substantial productivity gains to be made. There is also much to be done with our existing networks. In Warsaw, connecting to the collective network rather than using an individual boiler means making savings and reducing air pollution. Our plants can also produce not only heat but also electricity by cogeneration. And here again, there are a number of new services that can be offered: reduction of peak demand, electricity storage and additional capacity, which can be called upon as required by the electricity network. These services already represent several tens of millions of euros in revenue for Veolia. In parallel, as Antoine Frérot has told you, the group has committed to the transition to replace coal with less pollution fuels -- less-polluting fuels that emit less CO2. Slide 43. We have already embarked upon this coal transition in Braunschweig in Germany. Work will start this year. In 2022, we will therefore have replaced coal with biomass and gas and will have the benefit of enhanced tariffs for cogenerated electricity. This is a substantial project, representing an investment of more than EUR 200 million, accompanied by a new 20-year contract for Veolia. And mostly, 270,000 tonnes of CO2 emissions will be avoided every year. Slide 44. The last category consists of activities that we wish to stop or reduce. First of all, this list shows the result of our portfolio review by country, which enabled us to identify the targeted disposals. The sale of our urban heating networks in the United States is a perfect illustration of this -- the specific American context, that is to think that Veolia's value-creation prospects were behind us there. However, we are still interested in the urban heating business, which has different prospects in Europe. The list also includes activities that we wish to reduce everywhere. There are construction activities for water treatment plants; the collection of waste for local authorities except when it is linked to treatment; coal businesses and all the services for buildings or industries which are akin to facility management. I'm now on Slide 45. I would now like to give you some details of our new positioning in water treatment works and technologies, which are covered by the entity Veolia Water Technologies. What we are talking about here is, on the one hand, major water treatment plant projects for industry or local authorities. Until now, for such projects, we often signed turnkey construction contracts with associated cost or deadline risks. In the future, for such projects, we will still sell our technology, but we will concentrate on the sale of technologies as co-contractors or subcontractors with civil engineering companies. On the other hand, prepackaged technologies, off-the-shelf technologies, which are sold off the shelf. This is a growth business, and our technologies are meeting with considerable success. The ELGA range is now a must-have in water treatment for laboratories throughout Europe and beyond. Finally, the services associated with these technologies. Aftersales services and also mobile units available in emergencies for -- to industrial companies as well as our AQUAVISTA digital offer. Globally, this represents a major transformation for Veolia Water Technologies which involves an overhaul of its organization, including, on the one hand, the development of more packaged technologies; on the other, distribution in countries; and globally, a reduction in fixed costs. In figures, this transformation will be reflected in substantially reduced revenue of about EUR 400 million but with a significantly improved margin. The graphic on the right of the slide perfectly illustrates the evolution of the revenue mix over the period of the plan, shown in the different colors, with more quality revenue in services, technologies and desalination projects and fewer projects with high technological content. Slide 47. To finish up, there are activities that we are not going to stop but are going to reduce significantly, saving our efforts for areas we can make a difference and be paid accordingly. To give you an idea, this selectivity will affect our municipal waste collection activities if the waste collection can lead to waste treatment. It's yes. When the contract pays us according to results or performance, it's yes, not when it pays us solely on the basis of the resources and labor deployed. So this gives you an idea of the criteria that we will apply. Slide 48 now. To recap on our strategic orientations from the point of view of the segments that you're familiar with, Water, Energy, Waste. Water first, the prospects differ according to whether one is talking about our offer of services for local authorities, which should continue to develop reasonably well, or about our productivity activities, where we will be selling more technology and less construction. In the case of Waste, there are pluses just about everywhere, with hazardous waste primarily but also with plastics recycling and alternative fuel production. There are minuses with municipal waste collection without treatment. And finally, there is a substantial transformation of our commercial waste collection activities or incineration or landfill. In the case of Energy, there is a plus of our energy efficiency offer and a substantial transformation to be organized for heating networks, in particular, with the coal transition. Finally, where all these activities meet, there is our industrial ecology offer, which should continue to grow very satisfactorily. Slide 49 now. As you can see during the forthcoming IMPACT 2023 plan, our development priorities are clearly defined, the road map has been shared, and it is well known. In order for this ambition to be reflected in the figures that Claude will provide you with within a few minutes, the road map is clear. We must successfully grow and continue our efficiency efforts. In order to grow, what is first required is to invest well. This means continuing to be selective and to ensure that the results are up to the mark. The second major pillar of our IMPACT 2023 plan is our cost-saving and efficiency efforts, of which I will now give you details. Globally, we anticipate making EUR 1 billion in savings over the duration of the plan. Slide 50. EUR 1 billion -- or EUR 250 million a year will put us at a level comparable to what we have delivered over the past last few years. We are, therefore, not letting up in this area. In fact, we're going even further with new areas to challenge our staff because we know this is part of our DNA. While a few years ago we made big savings on general expenses with the geographical reorganization, there are fewer savings to be made in this area, but the slack has been taken up by purchasing and above with our operational efficiency efforts. Slide 51. The first pillar of this new savings plan is therefore operational efficiency, where we have identified 5 main sources of saving for the next years. So we no longer have countries where we have problems with the savings. And if you analyze, you find graphs which look like what you see here with things that are below the minimum level and those that are above. And this graph looks like a whale. And ideally, we would like the whale's body to get thinner so that we can increase profitability. How can we achieve that? With a series of action plans which may involve improving industrial output, renegotiating contracts with clients, seeking additional sources of income or sometimes closing sites or terminating the contracts. The second lever is to benchmark the technical performance of our industrial assets. We have decided to concentrate our efforts where they have the most impact, namely, on the 6 indicators relating to the performance of the group's main big assets summarized on the slide and we compare with what we see around the world. For example, the graph on the right represents the availability of hazardous waste incineration plants. This shows the availability of our plants. And we have identified that there was a plant in the United States that was underperforming, and we sent experts from Europe to help our American friends. And the result is there because, in 2019, we were able to improve the EBITDA on that plant by $9 million. The third efficiency lever is digitalization, of which I've given you a number of illustrations in this presentation. We now have more than 50 management centers of this type, which we have called Hubgrades. They cover all the group's main types of assets and enable us to manage both water networks and incineration and cogeneration plants. The savings are real, direct and measurable. For example, the 4 Hubgrades that we installed in Italy in 2019 have already enabled us to make energy savings of 5% in just 6 months in the hospitals for which we're responsible. Of course, I'm not forgetting the efforts made in relation to purchasing and general expenses seen on Slide 53. Starting with purchasing, we have made major progress on purchases managed centrally and signed excellent framework agreements live now. Also required arrangements to be followed at local level, for example, working on subcontracts or rationalizing the supplier base. In conclusion, with general expenses, the target is clear, to ensure the group grows with practically unchanged general expenses which will enable us to reduce their percentage impact. I must say that the global context does not always help, while expenditure on cybersecurity or lawyer's fees are not an entirely downward trend. So this requires efforts on a daily basis on IT expenses, property costs, et cetera, and certain administrative tasks. As you have seen in this presentation, digital technologies are a recurring theme of our IMPACT 2023 plan in the form of a main -- many initiatives to deliver the 4 pillars of our digital road map: digital employees, which promotes collaboration and allows people to access the best of Veolia throughout the world; digital customers, which helps them simplify their lives and gives them total transparency regarding our services in real time; digital operations using sensors placed on all of our assets, which provide real-time data that can be monitored at our Hubgrade management center; digital offers, adding groundbreaking innovation to our traditional models. All these are tools to provide more growth and more efficiency, tools that we will use to measure success based on the various indicators of our IMPACT 2023 plan that Antoine Frérot has presented to you. In conclusion, our development priorities are clear, as is our commitment to continue with our efficiency efforts in line with our good 2019 results. And before handing over to Olivier, here is a short film on digital technologies at Veolia today. [Presentation]

[Interpreted] Hello. Firstly, let me introduce myself as I'm about to join the company. I will talk to you about my task here. I know Veolia. I know it well because I spent 14 years there until 2008 in France -- firstly, in France, then in the United Kingdom and then in the United States. Since 2008, I've followed the company from the outside, first, as a competitor in water and waste, then as an investor in infrastructure projects in several regions of the world. And what I could see for myself was that Veolia is the best-known and most respected company in the environmental field internationally. The expertise, credibility and reputation of the company and the Veolia brand are valuable and at times unique advantages when it comes to discussing environmental issues with policymakers at city, regional or national levels and with major economic -- international economic players. Over that period, the problems of the planet have continued to worsen as a result of population growth and climate change. But I strongly believe that technological solutions to these challenges already exist or can be developed and that the necessary finance is available. And thanks to my infrastructure investment experience, I can safely say that there is a real shortage of quality projects in which to invest. It is not solutions or finance that the planet lacks but rather what's lacking is the mobilization and commitment of state players and of companies in support of ecological transformation. This involvement and commitment are central, as Antoine said, to Veolia's purpose and are given effect in the IMPACT 2023 plan. This is why I'm excited by my future mission serving Veolia. Antoine reminded us at the start that the company's purpose is to contribute to human progress sustainably and inclusively, sustainably and inclusively. This human progress is under attack on several fronts: climate events, population growth, rapid urbanization, resource scarcity, soaring energy and food demand, increasing pollution, even the place and role of companies in society. So there are numerous and significant challenges. But the businesses and men and women of Veolia can provide solutions. Some of these solutions already exist. Others have yet to be invented. These solutions are not only technical but also social and contractual. Of course, they have to be economically sustainable and acceptable to people. Through its various activities, as we've seen in Water, Waste, Energy, Veolia already has a positive impact on the planet and the life of its inhabitants. Its innovations should enable it to have an even greater impact with this program. Antoine mentioned earlier 6 major challenges faced by the world today and tomorrow, giving each one -- giving, for each one, examples of innovative offerings and solutions, still at the idea of experimental stages within the group and has ambition of seeing them grow and want to be turned into businesses, to actually turn them into specific new businesses. Estelle talked to you about the Veolia you can see now, and now we'll talk about the Veolia that you might not yet see. I'd like to give you 3 examples of this. Let's take the first example. Air quality, a major challenge, as you well know. According to the WHO, 9 out of 10 people in the world breathe polluted air. And the estimate is 7 million die from this polluted air each year. This is not only a challenge regarding outdoor air quality we see in our cities but also indoor air quality. At Veolia, we can provide solutions, thanks to our experience in monitoring and filtration. Also thanks to Veolia's long-standing and trusting relationship with local communities and public authorities, we can provide solutions, such as the pilot underway at Le Raincy which measures, predicts and filters air quality breathed by 600 students in 2 test schools. Poor quality air has a significant impact on the brain's cognitive abilities, our ability to learn. Now of course, the business model for air processing has yet to be invented and discussed with government authorities. Nobody today knows what the value of breathable air is. And yet, as we can see on the slide, in some cities, such as in India, you already have to pay to have the privilege of breathing good quality air, EUR 4 per 15 minutes. That's probably not the business equation for the future. But one thing is sure, the quality of air we breathe poses a challenge, and it will be necessary to invent technical solutions, invent a business model to deal with this at a global level. Some think it will never be a profitable business. But who would have thought in the 19th century, at the height of the Industrial Revolution, who would have thought a company could be created to guarantee and supply drinking water. That was how the company's adventure began in 1853. So distributing drinking water during the Industrial Revolution. Why don't also we go to distribute and guarantee breathable air, air quality in the 21st century? That's one of our visions. Let's talk about food now. Food is another example. With the world's population set to grow by 1.5 billion in the next 20 years and most being city dwellers, 1.5 billion in a 20-year period, what does this mean? This means that between now and this evening, the world's population will have increased by the size of the -- a city the size of Rennes in France. And we can say that by the end of the year, the population will have risen by the equivalent of the population of Turkey, more and more humans to feed with a limited amount of natural resources, water and soil, and burgeoning energy needs. So here again, Veolia can provide solutions. For example, from bioconversion of the organic waste it collects, that it can trace it, understands and can be used to produce natural fertilizers, or even animal proteins from insects, animal proteins to be used in sectors such as aquaculture. There are already promising pilots and even operations underway, in Asia and in France and in other places, that could probably become industries with attractive business models. Another example is urban farming. By combining its expertise in water, waste and energy, Veolia's ideally positioned to offer aquaponic or micromarket garden projects around its waste treatment centers or sewage treatment plants with 2 objectives: rehabilitate urban space to create natural spaces for city dwellers and educating our children. Secondly, as Estelle recalled for us, responding to new consumer demands for specific sectors, fruit, vegetable, fish, which combine proximity, quality and traceability. And in addition, these new sectors can create new jobs. Food supply is an increasingly complex equation to solve. Global food corporations know this only too well. They're already asking Veolia to assist them. Here again, we are there for them. Third subject I wanted to briefly touch upon with you this morning, climate change. Of course, this is a very important topic. Each year now brings its share of natural disasters: millenary floods such as the ones in Louisiana or Texas recently; large-scale wild fires affecting vast areas, measured in country equivalents instead of square kilometers; hurricanes; droughts. Before we can even hope to control the effects of climate change, we urgently need to adapt our cities and territories to recurring climate events. An example, as a reminder, remember Hurricane Sandy which hit the East Coast of the U.S. in 2012, especially in New York City, caused damage put at -- in a city that wasn't designed or had defenses to withstand and disperse such volumes of water, let alone treat it, and damage being assumed at approximately $65 billion. Then in South Africa, 2018, drought threatened to leave the city of Cape Town completely without water. The worst was narrowly averted, but since then, people have been fleeing the city. And in some cases, in some neighborhoods, property prices have fallen sharply by 30%. The recent wildfires in Australia affected the equivalent size of a country the size of Belgium 3x over. And 3 out of 4 Australians were impacted by this either because their house was destroyed or because they had to be evacuated. Or 15 million Australians had to end up breathing toxic fumes, bad air. I was in Australia myself at that time. After 5 long months of fires, which unfortunately could start again, then with the clearing up period for -- of forest waste, over 1 billion animals believed to have perished, they had to be removed. And then, of course, there were further inevitable impacts such as on groundwater in a country which already has some problems with water insufficiency. The cost of the 5 months of fires, now even before the cleanup, is put at over AUD 110 billion. Here as well, Veolia, which manages and operates several infrastructure facilities around the world and has real crisis-management expertise, waste management, water management, Veolia is well positioned to devise and offer adaptation solutions for its municipal and industrial clients, reducing the risk exposure, being proactive, helping them recover more quickly from a disaster while limiting the economic impacts for them. So we develop solutions to prevent flooding and safeguard installations, such as with the energy supply of New York City, for example, provide mobile water supply and wastewater treatment solutions for -- think of hurricanes, for emergency use after major climate events. By providing water recycling, water reuse solutions, we can respond to growing problems of water stress. For sure, it's hard to place a value on these new markets today. It is also difficult to know whether and when government authorities and people are ready to pay, to adapt and who will pay. What's sure is that insurance companies, for some years, have been covering record costs, and they're trying, first and foremost, to cover those costs; and secondly, to curb any cost increases. So the climate change adaptation market is unfortunately growing rapidly, and no one is spared. And the financial impact has already put hundreds of billions of dollars. Here again, Veolia can provide solutions. In conclusion, each of these seeds that Antoine mentioned, the Veolia that you may not yet see but that already exists within our group, within the countries, we've got pilot projects, we got employees that have identified customer needs and devised solutions. And where solutions didn't already exist, as I said, we believe we can create them. Our aim at Veolia is, what, to identify these solutions, to help them to grow, to create profitable and scalable technical business models that can then be industrialized worldwide. Because if we succeed in perfecting these new solutions, then the group's size, its presence in some 50 countries, its reputation, its unique customer base, community and industrial base will provide the perfect breeding ground for these seeds to grow. Of course, out of all these seeds we would plant, not all of them will necessarily take root and thrive, but each of these seeds we are sowing can potentially transform the group. Each of these seeds has the potential to have a worldwide impact on the planet. That is the ambition of this plan. And when your name is Veolia, that's your responsibility. Thank you very much. I will give the floor to Claude, who will conclude this morning's session.

[Interpreted] Thank you, Olivier. So before I explain to you how the items mentioned by Antoine, Estelle and Olivier are reflected in the figures, let's look in the next 4 slides how the group has developed these past few years following its restructuring so as to strengthen its position as a world leader. As you can see on Slide 62, the group is now much more balanced in its geographical zones, particularly internationally outside Europe, where growth has been strongest, with now 2 EUR 2 billion platforms in Asia and North America and with 3 platforms of about EUR 1 billion in Australia, Africa/Middle East and Latin America. These platforms in particular will continue to drive Veolia's growth in the coming years, as we'll see in a moment. During the previous plan, France's contribution continued to decline to 21% of the group in 2019 due to its lower growth associated with the restructuring of our 2 businesses. Europe grew at an average annual rate of 3.2%, thanks to solid growth in Central Europe and the return of momentum to Southern Europe. As I was saying, the Rest of the World is really the group's most dynamic segment, with growth of nearly 7%, particularly owing to 2 geographical platforms: Asia, which grew by 72% during the period 2016-2019; and Latin America, which grew by 30%. As regards the business mix, we continue to develop our activities with industrial companies much more quickly at 5% per year. There's still high demand amongst these customers for optimized solutions to process their waste, recycle their wastewater or manage complex energy systems. On this Page 64, we've shown revenue and EBITDA by geographic zone. Europe, excluding France, in purple is the leading contributor to the group's EBITDA, increasing from 36% to 38% between 2014 and 2019. You can also see the strong growth in the Rest of the world in yellow on the slide, which increased its contribution to the group's revenue from 22% to 27% between 2014 and '19. It's profitable and also makes a bigger contribution to the group's EBITDA in 2019, 29%, than it does to its revenue, 27%. We know how to choose growth opportunities in our various countries internationally and remain very selective in order to preserve profitable growth while putting emphasis on our strength, such as hazardous waste, industrial water, energy efficiency that have supplied growth in these zones. Finally, in spite of the decline in the revenue of the global businesses, their contribution to EBITDA increased from 8% to 10% due to the impact of the dynamism of hazardous waste and the restructuring of our construction activities. Turning now to the group's businesses. The main change in terms of revenue occurred in hazardous waste, in dark green on the slide, where revenue tripled between 2011 and 2019, growing from 3% to 9%. Hazardous waste also made a bigger contribution to EBITDA in 2019, 12% as compared to 9% in terms of revenue due to its margin rates that are higher than the group's average. Water operations, in dark blue, are the group's biggest contributor in terms of EBITDA, representing 40% with a margin rate there that is also higher than the group's average. The contribution of other businesses to EBITDA is quite stable, except for the construction activity, which is less profitable. We now come to our plan's financial trajectory. As Antoine emphasized, demand remains high in our businesses. And Estelle has also presented some concrete examples of the way in which we are boosting our growth. We therefore anticipate solid growth over the period of the plan due to the rate of renewal of our contracts remaining very high, over 90%; continuing commercial gains whether as a result of winning competitive tenders or opening additional treatment capacity following investments in our various geographical platforms. As in the past, this solid organic growth will be accompanied by small- and medium-sized acquisitions, where we remain very disciplined. To give you an example, during the period 2016 to 2019, the EBITDA multiple of our acquisitions before the synergies that we create was 7.6x, well below the multiple of our disposals, which is over 10x EBITDA. We're therefore creating value by rotating our assets. Page 67, here are the main trends that we anticipate for the next 4 years. In terms of client mix, continuation of the group's development driven by strong demand from our industrial clients. Industry will represent the majority of our business by 2023. In terms of geography, growth in Europe excluding France, in purple. Having regard to the potential in that geographic zone records internationally, in yellow amber. On the other hand, our withdrawal from the construction business at VWT, presented by Estelle, will weigh on the Global Business, in pink. In terms of businesses, growth will be driven strongly by hazardous waste, which represents 50% of the plan's discretionary industrial investments; but also by energy, thanks to services for buildings and energy efficiency; but also by solid waste, thanks to the recycling of plastics and refuse devised -- derived fuel for which demand is high because it's an interesting alternative to fossil fuels such as coal. With regard to the renewal of our main contracts, you can see that the average residual duration of our big contracts is 10 years. This is illustrated in the graph showing expiry dates extending until 2041, which represents a huge backlog of business. The large bar on the right for 2040 represents the Braunschweig contract which we just renewed and which Estelle talked to you about, to illustrate the energy transition in Europe. You can also see that the first 2 years of the plan are very calm with very few contracts coming up for expiry. The peak in 2022 is mainly due to Water France with 2 substantial contracts in the Paris region and in Lyon, set to expire at the end of 2022. Growth of EBITDA over the plan will continue to be provided by our cost reductions. These will represent EUR 1 billion over 4 years. And we anticipate a retention rate of 40%. Half of the increase in EBITDA during the period will therefore be provided by cost savings. The other half will be provided by our growth and our investments, of course, after deducting the EBITDA provided by our disposals, which represents about EUR 300 million. We now come to the active management of our debt. As you can see on the slide, over the 4 years of the plan, there will be very substantial bond refinancing of EUR 3.5 billion over the 4 years of the plan or 40% of our bond debt denominated in euros. We'll have 2 significant bond renewals, a bond of EUR 638 million, which matures in January 2021 at a rate of 5.28%, and a bond of EUR 645 million, which matures in May 2022 at a rate of 3.66%. Thanks to the refinancing and active management of our debt, we therefore anticipate a reduction of 65 basis points in the cost of the bond debt in euros by the end of the plan, taking the low level of interest rates into account. As you know, we took advantage of the very low rates at the beginning of the year with a bond issue at 0.66% with a maturity of 11 years. And as far as possible, we'll continue to extend the maturity of our debt, which currently stands at nearly 7 years, taking advantage of the windows of opportunity provided by very low long-term interest rates even if it means paying a few months cost of carry. The savings made on our cost of financing, the debt denominated in euros, will be partly offset by the increase in the cost of conversion of our debt into currencies when we invest outside the eurozone. Balance of these 2 effects will remain clearly positive and have net effect as from 2021, having regard to the calendar of bond maturity dates. With regard to tax, we'll continue to benefit from deferred taxes in France and the United States to keep our tax rate below 25% throughout the period of the plan. We'll be able to continue to benefit from these low tax rates, having regard to the recovery of our French businesses but also due to the profitability of our American activities and their active development mainly focusing on hazardous waste. The growth of the group's current net income will be provided by the effects that I mentioned a few minutes ago: increase in EBITDA, the reduction of financial charges and the retention of low tax rates during the period. These 3 effects mean that we can target a net income of about EUR 1 billion by the end of the plan, representing an increase of more than 30% compared to 2019. In terms of capital allocation, we anticipate industrial and financial investments of EUR 5 billion for new businesses which will be financed by disposals of EUR 3 billion on our activities to be reduced by the generation of free cash flow associated with our growth and by a small amount of debt, always keeping our leverage below 3x during the plan and well below 3x at the end of the plan. 60% of the new investments will be made outside Europe, where demand is strongest and where Veolia continues to develop fastest. In order to make the most significant impact, we also anticipate devoting 70% of our industrial and financial investments to priority businesses in order to accelerate them. We've summarized here the strict criteria applying to our investments, whether financial or industrial, I'll summarize these again. IRR, WACC plus 4%, where the WACC is out of the project country, ROC above the WACC of the country at the end of year 3 and a payback less than 7 years. And of course, alignment with the group's priorities and our ESG commitments for the next 4 years, as mentioned by Antoine. With regard to our leverage of 2.66x at the end of 2019, this gives us financial headroom which we intend to use at the start of the plan in order to derive the benefit of our investments and their synergies before the end of the plan. For this reason, leverage increases at the start of the plan before going down again afterwards. When we build a new plant, as presented in Estelle's practical examples, the construction time is between 18 and 24 months, followed by a ramping-up period of a few months. Clearly, therefore, we will get the full return from these CapEx before the end of the plan if we invest at the start of the plan. As regards to the amount of our CapEx, we anticipate that our investments in the group's existing scope will be stable, that we will devote more CapEx to our organic growth between 50% and 100% more than over the past 2 years and that we will reserve a budget of EUR 100 million per year on average for the energy transition of our heating networks in Europe. As has already been emphasized, the contribution of hazardous waste will be very substantial, having regard to high worldwide demand and the economic model of this activity, which combines value creation with final waste treatment capacity. We must therefore own our hazardous waste treatment plants to create more value. We anticipate that we will devote 50% of our investments to all our geographical zones, taking into account the high demand from emerging countries and the lack of capacity in Europe. As you've seen in 2019, we continue our active management of our working capital, which is a net cash resource for Veolia. We will launch new initiatives in all our countries of operations with closely monitored cash management and receivable monitoring and a more detailed level of operational management. And for that, we have new digital tools available on smartphones, on tablets, and which will help local managers control unpaid bills and improve cash collection. We've also launched a comprehensive review of our invoicing and cash collection processes to reduce DSO, and that will bear fruit progressively. Over the duration of the plan, we plan a free cash flow generation before discretionary CapEx of over EUR 4 billion and of over EUR 2 billion after discretionary CapEx. Given the effort of industrial investment before the plan for the reasons I outlined earlier, we expect more intense free cash flow generation at the end of the plan, thanks to the entry into service of the plants built at the beginning of the plan. As you can see on this slide, our ongoing efforts have enabled us to make a very significant improvement in the ROCE before tax, which went from 5% in 2013 to 9% in 2019. The application of IFRS 16 results in an additional EUR 1.6 billion of capital employed without significant impact on the EBIT, reduces the ROCE after tax by 60 basis points. So over the period, that gives us a figure of 8.6% restated for IFRS in 2016. Over the duration of the IMPACT '23 program, we plan to continue our efforts to improve ROCE. We anticipate a rate of more than 9% at the end of the plan, thanks to EBIT rising faster than capital employed and tax rates remaining low. As Antoine mentioned, we anticipate an increase in the dividend of 30% over the period of the plan to an amount of EUR 1.30 in 2023. That's an increase of 80% between 2015 and 2023. This demonstrates our confidence in our profitable development model and as a generator of free cash flow. Shown here is a reminder of our long-term guidance that I repeat briefly: solid growth of our revenue; cost savings of EUR 1 billion; EBITDA 2023 between EUR 4.7 billion and EUR 4.9 billion; current net income group share of about EUR 1 billion in 2023; debt-to-EBITDA ratio always below 3x and well below 3x at the end of the plan; dividend growth to EUR 1.30 in 2023. Thanks for your attention, and I'll now hand you back to Antoine for some concluding remarks.

[Interpreted] We've presented to you our new program. We've talked to you about all of its aspects, the business lines, technology, the ambitions and intentions for all stakeholders and also the economic and financial considerations and divisions. It is a comprehensive plan we are proposing to you. It's a true company program designed to mobilize everyone who commits at our side, the stakeholders. We are serving all the stakeholders. Again, Veolia will become even more beneficial to all of our stakeholders. We will prosper even more in the future, and it will be sustainable. I'd like to suggest now that we begin a Q&A session with the 4 speakers we've heard from this morning. And we'll fill you in on any points you're wondering about regarding this program. We can also field questions on last year's financial results.

[Interpreted] We'll start over here, and we'll hear questions from the room, then from the telephone and so on.

[Interpreted] This is [indiscernible]. I'm from Smart City Mag. I've got 2 questions for you, sir, Mr. Chairman. The first round of municipal elections will be held in the very near future. Do you have a positive view? What do you think -- if there is a new generation of elected officials, do you think there will be more interested in some -- in the ecology? Might this be a plus for you? I'd also say, recently, you talked about how much importance you attach to the Paris Accord and targets of COP21. Do you still feel it's important to -- and we'll be able to adhere to the reduction of the temperature -- humid temperature rise by -- down by 1.5 degrees?

[Interpreted] Well, that, I think, is well beyond Veolia's impact. But to comment on how we intend to do our part, first of all, on the local elections, the municipal elections upcoming in France. Let me mention the 80% of mayors changed in the last 2 elections. We've already seen a major renewal of local officials in recent elections. Next, I think environmental concerns don't depend on who the elected officials are as such because we can say that the environment concerns are very much impacting everyone worldwide in all cities, in all municipalities, regardless of which side of the political aisle you're on. Environmental considerations, quality of life, we'll consider sustainable development in urban areas, that's going to be at the heart of all policies. So I believe it's not really about the outcome of the elections as it's about the deeply held concern of populations that are going to have an impact. Your second question having to do with the Paris Accords objectives. I believe, yes, absolutely. The objectives can be met. It's doable, as it's been said several times. Many solutions already exist, we said earlier. Veolia already masters many solutions, and we provide these in many locations. If they were used on a very large scale, we're talking about 30%, just existing Veolia solutions, if they were used, could cut greenhouse calculations by 30%. There are many other business lines as well. So yes, absolutely, it's doable. It's feasible to reach the target.

[Interpreted] [indiscernible] I wanted to go back to the chemical recycling of plastics. Madam, you said earlier that in the solutions for plastics, chemical recycling has not yet proven its economic model. What do you envisage for the future, considering the recycling of plastic?

[Interpreted] Well, first of all, what are our doubts -- not our doubts, specifically those of Veolia, but it's the doubts of the technological and economic world. The depolymerization leads to the production of something that goes back into the refinery process. And it has to be so pure that it doesn't pollute the refining process down the line. So the question is, if you need to treat it so much that it becomes pure, is it really worthwhile? Does it not consume more energy than it reduces during the recycling cycle, which doesn't necessarily mean that the answer will be no. But at this stage, that is the question. So what does this mean? It means testing, testing to convince ourselves that, yes, it can work, or no, it's not worthwhile. There are a number of pilot tests going on in Europe, in particular, Northern Europe, but also a pilot test going on in France, which was announced some time ago. And so we are associating ourselves in these pilot tests. We will say we're going to have a look at that. We have doubts, but maybe they'll be able to demonstrate that a balance can be achieved.

I'm just thinking about Veolia in the sort of 10-year context rather than 5-year context. And it seems to me that what you've achieved over the last decade is to reposition the company from being based on long-term contracts, where politics was the main source of competitive advantage, to being based -- a company based on long-term trends where technology and branding are the main source of competitive advantage. But I wonder, in this new Veolia, what the position of water is and whether it isn't time to spin off the Water business. It seems to be the slowest-growing unit. It seems to be the biggest -- most political unit. And nobody seems that excited about it. I mean, personally, the thing which I'm most excited about in Veolia is the barrel, and we haven't heard anything about the barrel. And the only thing which you did say was exciting was the industrial waste side, which was also the biggest catastrophe last year with the Antero contract in the Pennsylvania shale. So why don't you just spin off the Water?

[Interpreted] Yes. To begin the answer, but others can come in on this as well. First of all, let me reassure you, Christopher, as to the position of Water within our overall mix at Veolia. We have recalled earlier a few figures on the percentage of Water revenues within the group and the percentage in our EBITDA. EBITDA has grown a great deal over the last 8 years from Water and a portion of Water has also grown. So throughout these years, throughout these years of repositioning of Water business, of building a new type of industrial clientele, the proportion of Water hasn't dwindled. Precisely the opposite. It's not gone down in municipal water either, as Estelle recalled. We've been reinventing our business lines. We've been changing our types of contracts, shared governance with clients. She also recalled our efforts for the final users under the municipal contracts such as water, lime and so forth. And so more and more developments. And then lastly, to the beginning of the session this morning, I recalled that it was the first in 10 years, municipal business at Veolia grew a great deal in -- up to 2010. Then it was flat since then, more or less, since there have been no major new opportunities for development. However, we could feel clearly an uptick, strong demand in many large-scale territories. Of course, I'm not going to list them for you here to not wet kind of his appetite but we're already working on this. So we're continuing this development and growth in municipal water. The last point on technology in barrel. Could you comment on this briefly?

[Interpreted] Well, that you should be excited about the barrel? Well, so are we. I'm happy that you noted that. Jean-François Nogrette can tell you about this following this presentation and he could speak at length. What's the barrel? It's the seawater desalination unit. And you can take it and sell it and sit it on a shelf very quickly, which means saving in time, a lot of time and cost. There's less civil engineering in the end. So it's very useful for our clients. We have great hopes. And we've put sensors just about all over, which means that we will be optimizing. Once the barrel is installed, we will measure the energy, electricity consumption, which is necessary to desalinate seawater. So this is very typical of what we want to do with the water and construction technology. Less civil engineering and focus on the technology. The barrel is one example. There are others. I mentioned ELGA, [ HPD ]. We have a long list of technologies, which we -- for which we have great hopes.

[Interpreted] And they're more and more standardized off the shelf, also less space-consuming, less engineering. Further questions on the telephone?

Yes. We have a question by phone from Olivier Van Doosselaere from Exane.

I actually had 3 questions. The first one is actually a direct follow-up on the question that we just had right now. Industrial water is seen by some of your peers, but also other industry participants as actually being an area where there is some potential scope for sizable growth with maybe the regulatory type of constraints that you talk about in hazardous waste maybe applying as well. So I wonder why you are not aiming to do a more aggressive push there. Is it just that you don't see the same opportunities? Or is it that you feel you don't have the scale to actually push there right now and that you prefer to allocate your capital elsewhere? Second one is on return on capital employed and capital intensity. I see that you -- it's interesting that you haven't actually provided a specific target for the evolution of your return on capital employed. I think, in the past, you had made that quite a big objective, and you had also spoken about the fact that you expected the capital intensity of your business to reduce going forward. Is that still something that you would anticipate given the new areas that you go in or not? And do you think that that's not an issue because, in any case, the investment that you do will be value creative and interesting areas? And so how should we think about the flow-through then from EBITDA down to EBIT relating to that evolution? And then a final question that I had was on M&A, where you're talking about effectively looking to reinvest the EUR 3 billion of disposals into new M&A activity, if I understand correctly. That's a sizable number. I understand it's all more in small to mid-sized activities, but where are you right now in terms of the identification of the potential targets? Have you already done a long way? Could this come relatively quickly? Or will this be more back-end loaded in your plan?

[Interpreted] Thank you. I'll answer that last question, and then the speakers will come in on further questions. First of all, your calculation is a good. 60% extra growth, 40% organic growth, times EUR 5 billion, that equals EUR 3 billion, yes, external growth. Industrial investments and also new activities created. Think of the EUR 3 billion in divestments as well. Let me confirm though, firstly. Divestments have been identified. And of course, you saw the investments have been identified and they're going to be staggered over the 4-year period of the plan. By the same token, regarding acquisitions, we've got a list, very precise list, which is more than the EUR 3 billion ranked by decreasing priorities and advantage. And of course, these are staggered as well over the 4-year period -- distributed over that period. So we've got an extra bit available if we were not to make an acquisition or divestment. We've got headroom. We've gotten extra space. We can contend that we've got the headroom. Furthermore, we've got more projects than the resources we earmarked for them, we intend to use for them, which is as it should be in this line of business. So we can select, we've got the choice. We can choose the ones that we think would have the highest comprehensive impact. This is well distributed. It's clearly on paper in our plan, covering the entire 4-year period. Since we don't intend to go beyond a certain limit in financial equations, 3x EBITDA, you heard this earlier. All this will be carefully paced and sequenced. We're ahead of schedule. That's great. The EUR 1 billion already received from U.S. divestments mean that we can move forward fairly quickly and also did some things toward the beginning of the year. And all this, again, staggers out over time. We have a very precise idea. And we have more ideas than necessary to execute this plan.

First question maybe. Then go to the second one. So on the first question, yes, we have big ambition in industrial water. It materializes in the presentation in a few different places, in the on-site services for the industrial customer. And when we talk about ecology -- industrial ecology, we really have the heart of it. But as well in the sale of the technology, which are with the industrial customers. So if you look at the Slide 46, which describes Veolia with the technology profile after the transformation plan, you have a lot of the categories of activity, which we plan to grow. And within those, a lot of very nice industrial projects. Our only criteria is where we can have the most value, where we can sell our technology as opposed to just having a big revenue and a small margin because there is a lot of civil within it. And we have a lot of projects. I just mentioned [ HPD ], which is a very nice technology we've had. We've won a lot of great project based on this technology last year, typically in the lithium recovery in Japan, in the manufacturing side, just to mention one example, but we have many. So yes, we have a big ambition in the industrial water, but we're focusing on where we can make the most difference and focusing our technology.

[Interpreted] I'll answer regarding ROCE. I'll repeat the thing I said earlier. Today, our ROCE after taxes and after IFRS 16 2019 was 8.4%. Our projection is to go beyond 9% by the end of the plan. We spoke a lot about hazardous waste. That's true, explaining that we had to take positions in geographies at identified sites and how at these locations we would make investments, but that's not our only model for growth. Another example, the example of energy efficiency and particularly building -- energy efficiency of buildings. These are mainly service contracts that don't require a great deal of capital employed, and that will continue to fuel our model for growth within this group. So it's true we talk to you a lot about sites, plants, merchant sites as we -- in our phraseology. This was to explain the why's and wherefore's how we create value in the area of hazardous waste. Now in terms of EBITDA flow to EBIT, considering what I said, there won't be much of a deformation, nothing differs much from what we've seen in the past. In other words, about half of EBIT versus growth of EBITDA. That's the development model of this group conventionally.

[Interpreted] Mr. Turpin, Cheuvreux (sic) [ Societe Generale ], and there's one from the telephone.