Veolia Environnement SA (VIE) Earnings Call Transcript & Summary

[Interpreted] Hello, everyone. We thank you for joining us for Veolia's Capital Market Day. Now before we start, I'd like to point out that the event will be both in French and English because we wanted each speaker to feel free to speak whichever language they prefer. So the simultaneous translation is available if you need it. [Operator Instructions]. We're going to spend the next 2.5 hours together. We're going to have a first section where we'll give you an overview of what Veolia Group looks like today post-merger with Suez and the vast array of issues it addresses. Followed by a second section, more nuts and bolts devoted to the solutions offered by Veolia and why the group deserves its title as champion of ecological transformation. The final section will focus on how Veolia's solutions and the very structure of its business model make Veolia the benchmark company in terms of ESG. And of course, we'll end today's event with a Q&A session with those of you who are here today, whether here in the room or online. That's for the practical details. Let's get into the heart of the matter. [Presentation]

Let's talk solutions, it's the first segment of our meeting that we open right now, please help me to welcome the CEO of Veolia, Estelle Brachlianoff. Hello, Estelle, have a seat. We're together for a while. Perhaps a word of welcome for our audience today.

Yes, I'm very happy to see you all in person or digital today. As some of you may have heard of, half an hour or an hour ago, we've announced a great historic result for Veolia. And the CMD today, this morning is about presenting you how the new group looks like post the merger with Suez because we celebrate almost the anniversary year today of this merger.

And we're going to talk about it. Some elements of context for all of you listening. 4 years ago, Veolia launched its 2023 strategic program with the ambition of becoming a global champion of ecological transformation. And since then, you've said it, there's been a merger and you Estelle have taken over as the Group CEO. So can you please start by telling us how the group is doing post-merger and perhaps where you are on delivering on that ecological transformation ambition?

You're right, in a way, the anniversary date marks the birth of this ecological transformation champion. And that's probably what's most important about it. And it's fair to say ecological transformation has been a compass throughout those few years since we announced the Impact 2023 strategic plan because if I recap a few dates. We announced this plan in February 2020. And you may recall that in February 2020, just a few days after we announced this strategic plan, something happened. COVID came into Europe. So we had just a few weeks to adapt to something super new for everybody, and we adapted super successfully. [ Recover ] that plan, which was launched just a few weeks after the beginning of COVID has helped us to deliver the same result pre-COVID in less than 6 months. So back to pre-COVID in less than 6 months in terms of results, which is an amazing performance you would agree with me. And of course, then came the take over and the merger then. And I'm very happy that we've been able to go on delivering great results for Veolia at the same time as going through this adventure and successful one. And of course, 2022 was marked by the war in Ukraine and the -- back of inflation in many countries. And again, our ability to react and adapt has been super quick and strong because we've been launching the ReSource plan as early as March 2022. So ReSource plan, you may remember, plus 5% energy production, minus 5% energy consumption in 2 years and an investment plan associated with it. And that's thanks to this ReSource plan, which we've been able to announce super, super good results today. So a testimony through those 3 examples that it hasn't been exactly a smooth trajectory in terms of the global world. But nevertheless, we've been going on delivering great results. And demonstration that the group is both resilient and solid, but agile and adaptive as well. So super proud about that. And in a way, I wanted to say thank you to the teams of Veolia because they were the ones delivering that.

Absolutely. If I may, Estelle, please do not rush. I know that we have a big program, but you all agree that we're here to listen to each other. So do please take your time. I note that the 2023 program is still in progress. Perhaps you have some feedback at this point as CEO on how it's been going so far?

It's probably my passion, which translated into my energy. I guess it's not yet the time to draw the full conclusion of the Impact 2023, which is going to end at the end of this year. And we are in the year of preparing the next strategic plan. Nevertheless, we are monitoring the yearly results. And I can say that they are already either achieved or even overachieved a year in advance. So in a way, we can already draw some conclusion and they are very positive. And if I recap a little bit what we said in our Impact 2023, the first thing was clear choices in terms of priority of development, for instance. We said we wanted to develop in parity, hazardous waste and plastic recycling, just to give 2 examples. And we've been delivering high growth in hazardous waste and plastic recycling. So hazardous waste came from EUR 2.5 billion turnover to EUR 4.1 billion in just 3 years, which is a very good performance. And plastic recycling, we've basically have a plus 50% of the number of tons of plastic we recycle every year. And more than a dozen of new plants across the world, which is again very good. With these priorities, asset rotation was very key because, as you know, we want to maintain a very rigorous balance sheet in Veolia, and that is here to stay. So clear choices, we sold assets to be able to reinvest in stuff, which we're creating more value for everybody and fastest growing. And of course, continuous efficiency plan. We've been delivering again quarter-on-quarter and year-on-year, very successful efficiency plan and it's here to stay as well as obviously now the synergies. And I mentioned the word historic earlier on and historic here in Veolia for the result. We've reached the symbolic maybe EUR 1 billion of net result, actually, more than EUR 1.1 billion, which was our initial target. But I think it's more than just historic in terms of the numbers, it's historic because, of course, as I said, it marks the anniversary date of the merger with Suez. And we celebrate this successful merger in a way. And I must say that this same hall where we are today, brings back a lot of memories to me. Because a year ago, I was actually in this same hall, welcoming our new colleagues, 40,000 new colleagues, of course, just a few hundreds here at the HQ. But in many geographies and many countries, there was the same celebration and vibration of intense welcome-home type of moment. So this hall is quite symbolic as well.

40,000 new colleagues that we'll welcome through a global event that you named Day 1. Let's have a look. [Presentation]

There we have it, this snapshot of the Day 1 event, Isabelle Calvez has joined us. And I'm going to switch to French for a bit to get the feedback of HR on this integration process. [Interpreted] Hi, Isabelle. You're Human Resources Director. We know the integration of new talents is one of the most complicated aspects during a merger. What did you do for the recipe to work?

[Interpreted] Well, you're right in mergers, human aspects if neglected, can have a negative impact on operations. And so in this particular merger, it was difficult, 40,000 people to integrate in 40 countries, so it wasn't intuitively easy. Veolia invested early on, on all human aspects. And I can testify because I was the HR of Suez before becoming HR Director of Veolia. So I was at the very heart of these operations.

[Interpreted] What are the factors that made it a success?

[Interpreted] Well, initially, there was a strong commitment from Antoine Frérot on the fact that jobs would be maintained, social statuses also, and that was a very positive point. It's very reassuring to hear those sorts of things. Then there was the welcoming process, which you just saw in the short film, a very welcoming integration. Everything was ready, everything was organized, organizations were ready, working spaces, logistics, everything was ready. It might sound anecdotal, but when you already have an e-mail address, when everything is already sorted on a technical point of view, so that you can get ready to work straight away, that makes a huge difference. Lots of mentors as well to help people who are coming in. So that Suez employees felt welcome. That was a very important point. Another thing that I think was important was the justice in equity. It was equitable. In the managerial roles that were allocated that led to a mix within the teams that were a strong signal from the co-mix, the Executive Committee, the directing committee and et cetera. And final point, which isn't a detail, is the use of good practices and best practices from Suez. In other words, those who came into Veolia reused good practices wherever possible. And that was a huge sign of respect on the part of Veolia towards Suez. So these things put together made the recipe a success.

[Interpreted] You haven't talked about the cultural aspect? Because these are 2 different companies that got together. How did that work?

[Interpreted] In terms of culture, I'd say it was a major asset because both cultures were very close. We'd already looked at the cultural DNA of both companies, and it's very close, understandably actually, because we were direct competitors, same businesses, same types of clients, same working habits. So the cultural DNA was very similar. And the incoming teams recognize themselves in the Veolia, ecologicals, ideas, social aspects, all of that spoke to the incoming teams. So on the cultural side, things were very natural.

[Interpreted] So these are your words, and I believe you, but did you get any feedback on those teams? Were you able to measure that?

[Interpreted] Yes, of course, we did all throughout 2022. This isn't just intuition, we base this on facts. First, there has been no massive turnover. Turnover rates are the same between ex-Suez and Veolia teams. So turnover at all levels remains the same. So there have been no massive impression or need to leave. We also had pulse surveys throughout the year, a pulse in June showing that the integration was ongoing, that it was going well and that employees already saw the commercial asset that could be generated. And humanly speaking, people were happy. And in November 2022, we did a very large survey, 150,000 people surveyed, so huge survey. And the commitment rate is of 89%, which is an exceptional score at 2 points higher than the previous year, which was Veolia on its own. So 87% in 2021, 89% in 2022 after the arrival of Suez teams. So lots on pride, on trust in the future. So satisfaction rates of Suez teams were actually higher than those of Veolia. So people adhere to the project, and it's measurable.

[Interpreted] What's the next step?

[Interpreted] Next steps, I'd say that this integration happened in a very fluid way, in a year. I think we've done what we had to. So the next step is our new project, which is building the strategic plan -- the future strategic plan. And in that new project, I know Estelle is very pleased about this, there is no longer ex Suez, old Suez, new Veolia, et cetera, no. Now where 1 team determined to building the future together.

[Interpreted]Well, long live the team. Thank you, Isabelle. I'll let you get back to the room. Estelle, what was your perception as CEO of this integration phase?

Obviously, not very different, as I think it's already a success, which is amazing when you think it's been only a year. And -- but it's more the memories, which come to mind and anecdotes. And as you can imagine, 2022 was a very intense year for me. But I've given myself a priority to visit almost all the countries where we had changed dimension. Thanks to the merger with Suez. So in Chile, in the U.S., in the Middle East or Belgium. And each time I visited those locations and had the team. What were they talking to me about? They were talking to me about project, about decarbonization, about the pollution debts, about ecological transformation, about solutions, about customer, never about Suez or Veolia or asking question about that. Because they were all already embarked into the project about the future, about what we're trying to build. And it's fair to say I couldn't tell the difference between whom is whom and you know who came from ex this or whatever -- historical that. Because they were all Veolia and we [ own ] at Veolia 220,000 resources now. And that's probably the best sign in all this vibration embarked behind the project.

Estelle, you shared the positives, and so has Isabelle, we're also here to broach the more difficult topics. So I need to ask you this question. Let me tell you what I have in mind. I see that you had to put in place numerous antitrust remedies. I imagine that there's a quality of execution that's paramount in a merger like this. So tell us more about that?

It would be a lie to say going through 18 antitrust procedure was a real pleasure. And we have gone through those 18 times over and over again, but in a very successful way despite all the hard work it's been through. And successful, meaning getting the authorization and when we had remedies to go through, they've been delivered in a record timing and at a record price. And example which comes to mind is in the U.K., where we've sold at 17x EBITDA, some assets we had to sell. And I remind that we are still the #1 of the waste in the U.K. So I think that's quality of execution, is the word you pronounce and I would contribute to that. And it goes through a very top level to very down-to-earth things. So it's a series of small projects, which together combined makes, for instance, the synergies. And we're talking about -- in Australia about rerouting trucks and there in the Middle East about combining HQs location. So it can be very concrete at times, yes.

So how would you qualify the group today post-merger? Is it still a French champion. I know that some people still perceive it as very French. Is it a global leader? How would you describe it?

So we could maybe dispel this first myth. So Veolia has become the worldwide champion of ecological transformation. We've given birth to it a year ago. It's 220,000 employees in many countries and more than EUR 42 billion turnover. So that's why just to mention this figure, it's a new dimension. I must say that in all this morning, we'll talk figures plus the divestitures. So that's exactly the same as the accounting for 2022 because, of course, you have to substract what we've sold in the last part of the year. But it's the picture of what the group looks like now, which we're going to present. And if I start with this myth about being very French, I mean let me round the figures, although you have the very precise slide and the slide show. But if I round the figures, 20% in France, 40% in Europe outside France and 40% outside Europe. So it makes the group very much more international one, although it's fair to say our heart beats still in France and in Europe. We've changed size in the U.S., we've changed size in Chile, in Spain, in Australia, in the Middle East, where we will soon reach EUR 1 billion turnover. So it's just a few illustration of this very much more international group. And although we say it's a worldwide champion, it's a champion as well on a lot of the geography we operate and the various sector we operate. So if I give a few examples of that leadership in water, we're obviously worldwide leader. But as well -- and maybe it's less well known, top 3 in the U.S.A. In the water technologies world, we are #1 worldwide and in pretty much all the niche market, you can think of from a lithium extraction to all type of -- various type of treatments. In terms of the solid waste, we are the #1 player in Europe, but as well the #1 now in Australia. In hazardous waste. We're #1 in Europe, but as well in the top 3 in the U.S. again. And in the energy, even probably less well known, we are as well in the top 2 in Europe. So a few illustration of the leadership and the strongholds we've built over the last few months.

Understood. So what is the current portfolio of this worldwide champion? What do your activities look like today?

The good word will be balanced. Balanced with very strong pillars, balanced wastewater and energy and very strong pillars in each of those segments. So thanks to the merger, the water activities, the water operations have grown significantly, thanks to this acquisition. And notably, as I mentioned, in the U.S.A. and Chile. In waste as well, we have a gain in sight, and we are, as I said, #1 in Australia. And in the energy business, this is probably the fastest growing of the 3. It's fair to say. And we have already reached in 2022 more than EUR 10 billion of revenue in the energy alone, which is not thanks to the merger, but thanks to all the opportunities we've been able to seize in this sector.

And Estelle, leader is a word that you've used a lot since we started this meeting. As a leader in most of your markets, do you still have some potential for growth?

Huge potential for growth. And it's not only potential, actually, we are delivering growth as well. And I guess the potential for growth is not only within our segments, so the wastewater and energy, but at the interfaces of those segments as well. And we are combining usually a few bricks that we have to offer solutions to our customers in helping them decarbonizing, helping them depolluting or helping them regenerating resource or circular economies. So really, those 3 are the offers we typically offer to our customer. And those markets, you can imagine, the 3 I've just mentioned, are huge. Actually, there are hundreds of billions type of market, each and single of them, and this is fast growing, as you can imagine. And again, not only we have a huge potential, but we are already on our way of delivering good growth for a long time. And just a few illustration in the decarbonization, which is the first arm. At the end of 2022, we've just opened a new biogas plant in Braunschweig in Germany, which replaces a coal fire plant before. And obviously, that's why I talk about decarbonization. It is super good for the city and help them reach their own target of reducing emission. In recycling or regenerating resource still in Germany, we've changed size in the paper recycling as well as in the lightweight paging with some assets we've taken over recently. In the depollution sector, I've announced earlier -- or late 2022, a very major contract in the Middle East with the revised refinery, which is EUR 1.2 billion type of contract. It's a massive one, again, and a testimony of our offer in the depollution area.

And I believe that you have an offer that's called GreenPath, if I'm not confusing the word, is that the name of the offer?

Yes, that's it. I've mentioned a few elements and things we've won and a few solutions. But we've tried to recap the existing solution of Veolia to help our customers decarbonize their footprint, so cities or industries. And we've grouped them into something called GreenPath. So in a way, if you're a city, if you're in an industry and wonder how to decarbonize, go to GreenPath.

Let's have a look at what GreenPath looks like. [Presentation]

So In a nutshell, GreenPath is about the existing solution to decarbonize, but of course, we're not only working about expanding the existing but inventing the future and innovating on R&D. And that's why I thought best to talk you through the innovation project in Veolia -- as to ask Catherine, our Head of Innovation. So Catherine?

Hello, Catherine Ricou, Head of Innovation for the Group. Welcome. Can you tell us what innovation looks like in a group like Veolia?

So I've joined Veolia 1 year ago and Estelle was referring to that moment. So I've been part of the 40,000 Suez employees joining '22. And it was very interesting for me to dig into Veolia innovation portfolio and understand what has already been accomplished in the current 2023 strategic plan. So for example, talking about decarbonization. Decarbonization is and you just heard it, but a key pillar of the innovation strategy for Veolia. And Veolia Is 1 of the largest local and territorial provider of decarbonized energy. And now we have 15 biomethane production site delivering decarbonized energy to the gas distribution system. So this was a clear ambition of the 2023 impact plan, and it has already been delivered. So that's 1 example. Another example is plastic recycling. I think we already talked a lot about all the sites we have. But the yesterday, the innovation barrier was about producing high-grade food grade for the food and bev industry, for example. So now we have several sites producing this quality of food grade. And we already have a huge demand, and it's driven by the regulation and by all the food and bev industry, for example. And we will unlock other innovation in that domain. So as you can see, we've got several examples. But coming back to your question, I think in Veolia, we are focused, and we do prioritize the development of ecological solution that will create an impact on these pillars and also growth, of course, in different and several market and geographies.

I'm wondering how the merger has impacted the group on a topic like innovation?

So I think, first, we are joining our teams. We are merging our innovation and research portfolio. And indeed, our innovation capability have increased really tremendously. So I like -- when I talk about our capacity, I like to talk about key figures, very illustrative, for example, patent. We have doubled the number of patents that we have now in our portfolio. We have 4,800 patents spread across 800 families. So that's 1 key change. And of course, also the means allocated to innovation. We have more than EUR 165 million to really drive the development on ecological solutions and innovation priorities. But maybe more importantly, I would say that now it's really the diversity and range of expertise across all the geographies, diversity of background, even business model, and also the number of physical research and innovation centers that we have across all the geographies. They are starting to work as an ecosystem, developing new collaboration. And maybe 1 example of 1 addition to Veolia ecosystem for innovation is [indiscernible], [indiscernible] in Spain, in Chile. So [indiscernible] is a research engine center specialized in water and climate adaptation. And they are developing, for example, program on water scarcity. And now they start to work as an ecosystem with all the other 14 innovation and research centers, and this is key to really accelerate innovation.

So as you said, you're describing an ecosystem that seems to be built into the group to sort of accelerate innovation. How is it implemented? How does it work on the floor?

So I'm convinced that we cannot drive innovation only from the corporates. So the geographical players, the key role of the geography is really key to scale up and accelerate innovation. So of course, each geography has its own market condition, regulation, but they all can benefit from what has been developed, scaled and accelerated in other geographies, and they have a lot to share. They have the open innovation ecosystem. They have the partnership strategies, the resources and also they can contribute to the derisk, working together. So maybe 1 example of what it looks like. We decided to implement an operating model in all the geographies for Veolia, relying on innovation hubs where each geography will have a key priority to lead for the group and really contribute to scale and develop the acceleration in other geographies. And the example that I want to share is, for example, the role of France. So France has started several years ago on metal -- strategic metal recycling, like lithium or cobalt to develop the electrical battery recycling activity. Now they have already the first facility, recycling battery. And you will see a bit later during the live -- Pascal Muller on site sharing this experience and they can really contribute to share the lesson learned with other geographies and really help them to scale while derisking the innovation. So I think that's a key model that would help us to accelerate innovation. And another very emblematic example that I want to share that I think is really new and will really contribute to accelerate innovation is our water technology platform. So this water is providing innovative technologies to all the market facing all the water challenges. I think it's very unique. I don't see any water issues that cannot be solved using this technology. And I think all the geographies now are tapping into this platform, into this technology to develop their market. For example, of course, drinking water, micropollutant, of course, for use but also very strategic key technologies and solutions like ultrapure water, for example, for the microelectronic and pharmaceutical markets, but also zero liquid discharge for the lithium processing and recovery. And all these markets are really growing, and we are facing a very strong demand in every geography. So it's a key contribution to the group and to the acceleration of innovation.

It seems that you've had a milestone on water treatment, thanks to innovation. What would you say is the next big frontier for the group?

Key question, I think we've got a very good alignment and very positive momentum between the regulation going in the right direction. The market awareness, also very positive in many -- across most of the geographies, I would say. And of course, this view capabilities that we have, thanks to the merger. So what's coming next? Decarbonization. Decarbonization is and will be also in the next strategic plan, a key priority for innovation. So alternative fuel, alternative energy will continue to grow driven by the regulation. And then, of course, the high demand of key industries such as e-fuel for maritime and for aviation industry. So that's an example. But we do already produce, for example, hydrogen from biogas, and we are currently working on CO2 carbon capture project. But our ambition is really to find the best way to develop effective and sustainable way to decarbonize and really potentially using CO2 as a key strategic feedstock for e-fuel, for methanol and for all these key demand that we'll have from the market. And all our customers are working on the net-zero pathway. So we really need to accelerate innovation in that field. So that's an example. And maybe another example. I already talked about that, but it's -- in the resource regeneration, plastic, of course, but also strategic metal recycling. And in the electrical battery recycling, we are starting from France, but we are -- we've got a very strong ambition to develop this activity in Europe, Asia, in the United States. This market is growing very fast. And we want to have more than 10% of the market. So this is a clear ambition. And as you can see, we've got a high ambition, but most -- some of these projects are already in acceleration. So it means they will generate growth for the next strategic plan. But we are still looking at trends, ecosystem, key players, and of course, exploring new projects and also looking at the key changes that the regulation will drive into our business because these will be innovation opportunities.

Thank you so much, Catherine. Proof if you needed any that innovation is a key lever for the group. I'll let you head back to the audience. Estelle, I'd like to broach another topic, something that you bring up often, actually. And that is the importance of energy solutions, the energy solutions that Veolia provides. What exactly is energy by Veolia because my understanding is that you're not really an energy business.

Actually, we are already a very strong energy business, but not necessarily the one people have in mind. I mentioned a figure of EUR 10 billion already in Veolia in 2022 in the energy. And I'm guessing it may have been a surprise for some of you. And actually, maybe it's because I don't know, like we're not visualizing this sector and wrongly so, because we are already a leader in this sector, #2 in Europe in the local energy and energy efficiency. So already a very strong player. But what we are and what is our segment, what is our sector in the energy is local energy. And local energy either is decarbonized or is decarbonizing, so it's helping to decarbonize. That's really our stronghold. And what I mean by local energy, I'm not talking about B2C, which is obviously not our business, neither am I talking about the highly centralized production of energy. It's what in the middle, which is energy for cities or energy for large industrial customers. That's exactly this segment, which we are really already very, very strong. And decarbonizing, as I said, because as we've seen from this morning, a very strong pillar of our offers is to help our customers to decarbonize. And the energy part is a big important element of that. And I guess you might wonder how do we do that? How do we do local energy, which is decarbonizing? And we have a few pillars or a few elements of our offers. The first one is district heating, obviously. And district heating, shall I recall that it's a lot more energy efficient than individual heating. Hence, the higher the energy price, the more we have connection to our system, by the way. which is interesting. And of course, we are decarbonizing those district heatings. The second bit is helping our customers to save energy, what I call energy efficiency. And we're talking here about [ more ] in the Middle East or hospital in Italy or Spain or large industrial customer. And thanks to digital, to central monitoring and to all our know-how, we typically help them to reduce by 15%, 20% of their energy bill without a major rework of the building. Then we have, of course, the alternative fuel, we are able to produce in Veolia, thanks to waste -- of course, nonrecyclable waste or wastewater. And with waste and wastewater, we can produce electricity, we can produce biogas, we even can help the production of hydrogen and different type of fuels. So this is really an important element as well. And I won't forget to mention the electrification of the world, which you can see, you know is underway. And we are providing services to the flexibility of the market. So the -- avoiding the peaks in the production as well as the micro grids. So again, district heating, energy savings, alternative fuels and everything we do for the grid. So this is the example, which is local energy by Veolia, which is decarbonizing.

Right. So perhaps to go further on the how? You could give us some concrete examples.

So we started with -- first with ourselves, which is an obvious one. And in France, just to give you an illustration of that, we have a large business. We have a part of the business, the water business, which consumes a lot of energy because you need power to have the pumps pumping water all the way through the tap in your home. And on the other hand, we have a large waste business, which is already producing a lot of energy, and we wanted to produce even more. Our ultimate target is to be in 5 years self-sufficient in energy in France in our business. And how do we do that? We will enhance the production of biogas. We will enhance the production of power from nonrecyclable waste. We'll put solar panels in all [ our long ] fields. And all that combined together will make us self-sufficient energy wise in Veolia in France in 5 years. And of course, what we do for ourselves we are doing for our customers. If I take another example of that. So large industrial customers, which are large intensive energy players, in terms of their consumption. Two examples, again, Solvay and [indiscernible], which needed a big coal-fired plants to actually feed their own production factory. We replaced it by RDF or actually nonrecyclable waste. You divide by 2, the CO2 footprint by doing that. We've done the same with Borealis in Finland. Borealis, which is a [ plasturgiste ]. And actually, we've used not the nonrecyclable waste, but actually their by-products, their own waste, if you want, to transforming into a fuel, which replaces like fossil fuel. So again, 50% of CO2 reduced for those customers. So that's why the decarbonizing is important in the energy by Veolia.

Very clear examples. Thank you for that. So these are very ambitious goals. Let's see your ability to deliver on them as a group. And for that, I'm going to give the floor to Claude Laruelle, Deputy CEO in charge of Finance, Digital and Purchasing. There's a jingle Claude. Now you can come.

As you understand, Veolia is very well positioned to grow its business and its results. You have seen our excellent 2022 results, which have reached a record level. Just as a reminder, revenue is up by 14% and by 6.5%, if you exclude the effect of higher energy prices. EBITDA is up 7.2%. Current EBIT grew by 16% and current net income by 30%. As you can see on the slide, all our financial indicators over the last 6 years have shown a steady average annual growth, which has been further enhanced with the merger with Suez, transforming top line growth into bottom line growth. In terms of dividends, the group has maintained its distribution policy with a regular increase in dividends in line with the growth of the current net income. On the following slide, you can see that this excellent performance is, of course, driven by 2 main factors: the good momentum of our activities on 1 side and the remarkable execution of our efficiency plans year after year. Each year the group set itself the objective of generating savings representing 1% of our revenue. In total, over the last 6 years, we have generated savings of EUR 1.7 billion, while always working to improve the efficiency of our operations. These cost savings have enabled us to maintain a high renewal rate for existing contracts by sharing these gains with our client and also to win new customers. With a strict, on the next slide, discipline of capital allocation, both financial and nonfinancial, Veolia can expand its operation. We are not afraid of making choices and our priorities are clear. When we presented our Impact 2023 plan. We established a classification of our activities in which we wanted to accelerate such as hazardous waste, or plastic recycling, those to be optimized, mainly in our municipal clients like district heating or water, for example. And finally, those that are more mature, are not structurally profitable enough to be reduced, such as construction, facility management, waste collection because they do not have any real differentiating factors. All our investment projects, whether organic or acquisitions must meet the same criteria in order to produce profitable growth. An internal rate of return higher than WACC plus 4%, ROCE above WACC at the end of year 3 and payback below 7 years. In addition to these financial criterias, we must, of course, respect our ESG commitments and reduce our CO2 emissions. It is a respect of this financial and nonfinancial criteria to reach -- for each of our projects that as us to improve our ROCE each year and strengthen our extra financial profile. Veolia has been agile and well piloted to be able to go through the last 2 crisis, and has launched very quickly adaptation plans, as Estelle described. The last 1 is a ReSource plan to enhance energy production in our facilities by 5% and to reduce energy consumption by 5%. Veolia business profile has a very limited macro exposure as 85% of the business is not sensitive to macro and super resilient and also cost inflation is fully passed to our clients. This is what we have demonstrated in 2022, either with indexation in the municipal activity or voluntary price increases in the industrial [ wealth ] business. On the next slide, as Estelle mentioned, Veolia is a world leading player in depollution, decarbonization and resource regeneration. These environmental concerns have never been so strong and are really accelerating the demand. Veolia combines by far the broadest range of services with unique technologies. Government funding has never been so high. The market in which we operate is particularly buoyant. And regarding the needs to make the greener, it will last for a very long time. Our strategic choices have, of course, been made to make the most of our advantages and these choices have been successful. I will take 5 examples. The first 1 in plastic recycling, we have increased the recycled tonnage by 50% and between 2019 and 2022, and we have reached almost 500,000 tons of recycled plastic in our 37 plants around the world. In hazardous waste, our revenue has grown by 60% since '19 -- 2019. In the Middle East, our revenue will soon be at EUR 1 billion multiplied by 4 in 5 years. In energy, our offers to optimize our client heating networks and decarbonize the production units have enabled us to establish uncontested leadership in Central Europe. And the last one, in the markets of the future, Veolia is establishing itself as a partner of choice for players in the lithium industry from producers of lithium to the giga factories that produce and recycled batteries. As you can see, we are really taking advantage of a fast-growing market. Thank you.

Thank you, Claude. Please have a seat we'll call on you again in a few minutes. [Interpreted] But before I give the floor back, Claude, let me conclude the first 1/3 of our Capital Market Day that we've devoted to the group as it stands today, giving you the floor, Estelle. So you'll be talking about a notion that's dear to you and which well illustrates what you would like to do and all the value you would like to bring to the group. This is the ecology of solutions.

[Interpreted] Thank you Ele. It's quite a cliche to say that with big duties, come big responsibilities, but it's still true. Being the global champion of ecological transformation, urges us first of all to be the key player of ecological solutions. This ecology has no political view theme nor ideological view. It's about doing things instead of saying things about doing what's possible can create intangible. And it starts with us, of course. It is how could we offer solutions to other customers without applying them to ourselves. Veolia will then be energy self-sufficient in France within 5 years and carbon neutral by 2050. And that's the foundation which we're currently building our strategic plan for the next years to come. And we'll have the opportunity to introduce you to that plan by the beginning of next year. And it's no small task because you know that we don't want to ignore the problems that we face, here at Veolia, yet we have a handful of cool plans that we could have easily suit. Our cardon profile would have been drastic and immediately improved. But anyway they would have continued to produce and [ emits ] you to answer to [ a source ] of climate change. And so we didn't not want to do what was easy. We wanted to do what was responsible. That's why we've decided to tackle this topic starting with [indiscernible]. We decided to produce the plants and transform them step by step by using other fuels. And no less than EUR 1.5 billion we'll investing in 10 years, so it represents more than EUR 10 million each month for 10 years. And we've bore the fruits of this already. At the end of '22, we, for example, bought to service the biomass plant of Braunschweig and we'll be live from this site later on. It powers 50,000 households in heating and prevents the combustion of more than 100,000 tons of coal every year. This way, we can meet the ambitions of the city being carbon neutral by 2035. But unfortunately, carbon is not the only greenhouse gas and not even the worst one. So we're going to [ allocate ] resources to drastically reduce our methane emissions. And I'm very happy to announce the following. We are going to allocate EUR 70 million that we can increase our capture capacities in Latin America in the next years to come. But our responsibility as a leader for ecological solutions is also to offer that to other companies to make sure they have [ 10 ] key solutions that are necessary to their own decarbonation trajectories, depollution trajectories and resource generation trajectories and for these solutions to be adopted -- and to be efficient, they need to be adopted and to be based on their needs. And those needs are more acute than ever. For resources, everyone, all economical players, all public institutions throughout the world, want to recycle, reuse and become a major contributor of the more circular economy. This way we'll protect the supply chain, we'll improve our economical efficiency. It provides optimism to the citizens, and it protects the planet. So that's the magical recipe for Veolia. For pollution, the policy of burying one's hand in the sand is now a minority and it's abandoned year after year by a great number of the players. Companies know that we'll have to face their environmental liability, and they will not be blamed for having polluted the plant at a time where it was not a burning topic and at a time where [ attorneys ] are not available. They will be blamed for not having repaired or depolluted the planet when solutions did exist. For energy now and for environmental reasons as well as economic reasons, each company, each city wants to reduce their conception in the carbon emissions and when possible to be energy self-sufficient. Zero carbon and zero [ euro ] are 2 objectives that go hand in hand for a lot of our customers and clients. And I would like to insist on this burning point element, the more carbon our clients' activities emit, the greater our impact is when it comes to protecting the planet. It's just a matter of mathematics. If you cut by 5%, the emissions of the big carbon emitter is going to have a positive impact on climate change, a much bigger impact than the production of 5% of the emissions of the player that is on the right path to decarbonation. That's why, it's in the interest of big emitters to collaborate with Veolia. And it's also in the interest of the planet to see Veolia working for big emitters. Yet, this meaningful approach is not reflected in a lot of ESG scores. For it's [indiscernible] the ESG scores take obviously into account, the carbon emissions of our customers, our clients, but the emissions that we can avoid or reduce through our actions. To be even more clear, the more we reduce the carbon emissions of our clients, the lower our scores are which is the height of [indiscernible]. That's the reason why we are not leading the ESG scores today. And because our activity is not well take into account and the activities are [indiscernible], because we're not the only ones in that situation. And I want the situation to stop, and that's why I'll do my best for our positive impact to be considered fully. Avoided emissions, reduce emissions through our activities need to be taken into account in the same manner as reduced emissions in the [indiscernible] [ trajectory ] that we have implemented. The [indiscernible], depollution, decontamination, decarbonization these are the 3 structural objectives of our customers. And we are offering solutions to tackle those 3 challenges. And so the solutions need to be affordable for our public and private customers, and it should be reproducible and so they do not need to depend on this know-how of 1 [indiscernible] only and 1 [indiscernible] only. And it's even true that we have integrated the SUEZ teams and solutions, which should be able to create economies of scale. This is what we can do now with the size of the group, and it needs to be desirable for the end users, the citizens, the public bodies or the customers of our big industrial customers. So we have 4 conditions; affordability, reproducibility, scalability, desirability. And this is what make us the #1 leader in the world. And that's only the beginning, because we have a very long list of new solutions that haven't met those 4 criteria yet. And so we'll be able in the next years to come to implement new solutions in that field, for example, recycling batteries from electrical cars or biofuels or [ clients ] for example. And some solutions to be efficient, need to produce measurable effects to have the before and after picture. And we have a lot of examples of these solutions in a lot of territory throughout the world. I'm going to mention a few of them. First, plastic's recycling that enables us to save up to 75% of carbon. It's much more complicated than recycling metal or paper. And even more so, we want to reach this level of purity of the food grade. We developed this knowhow, and we have invested in 20 new factories in those last 4 years to be able to increase by 50%, the number of recycled tonnes by the group. So around 500,000 tonnes. The energy transition requires a lot of materials like lithium, cobalt, nickel that are traditionally imported from mines in China, Chile or Congo. The R&D department of group managed to find a solution to extract those materials from batteries of used electrical cars via hydro metrology strategies. So the factory that we are building in the East of France will be able to recycle between 10% and 15% of the batteries [indiscernible]. For example, we realized this summer -- in this winter that water is very well resource in [indiscernible], because of water scarcity, we needed to reduce that water. And so things to unique technologies [indiscernible] to anticipate the leakages before they even appear, we're able to reuse waste of water for agricultural purposes and for industrial sites as well like we [indiscernible] in California. And [indiscernible] water as well, drinking water is what we're doing in winter in Veolia. We were able also to increase the yields of our distribution networks in the 5 continents we're working in, and we were able to save more than 320 million cubic meters of water in 2022 compared to 2019. So it's the equivalent of a city of 4 million inhabitants. So another example, decarbonizing cities and industries, decarbonation is at the heart of our [ authors. ] Thanks to our activities, we were able to save 14 million tonnes of CO2. For example, [ we place to call within our nonrecyclable ] waste for Solvay in [indiscernible]. 50% reduction for the footprint of the industrial site, we were able also to use biogas in our wastewater treatment plans or our land fields. We were able to reduce the [indiscernible] of fossil fuels. We also have 15% of energy savings for the hospital in the north of Italy or the shopping malls in the Gulf. I could talk about our offer that ensures a good air quite inside the building, because according to WHO, air pollution causes more deaths than COVID-19. Also have the treatment of our hazardous waste in all countries where we are present. And we also have adapted legislations that we can avoid the diffusion of pollution our water tables or in the atmosphere. So we have adaptive solutions that will have a strong impact on the environment. That's the secret sauce of Veolia. Veolia is the global leader of the ecological transformation. And as you've understood, this is real.

Thank you, Estelle. Round of applause is deserved. So for those of you who following us, you've seen in the first part of our meeting that Veolia had changed dimensions after the merger with SUEZ, in terms of human, 40,000 new employees and also in terms of the geographies. Now a leader in all of the main countries in the group and a reference actor in energy, in local decarboning energy. It's also changed in dimension with the major opportunities for innovation and growth, covering the ecological transformation where Veolia is clearly the leader. And now let's see how this translates into figures and on a daily basis. For this, we have the second sequence of our Capital Market Day, the ecology of solutions in action. To open the sequence, we will begin with the mix of activities that the group -- Claude, if you could come with us again. [Presentation]

When most of the investors were asking for a Capital Market Day early 2022, we told you that once the scope of Veolia activities has been stabilized, we will come back to you to present the group new mix of activities and their different businesses. In the presentation that follows, I will review our different activities to explain the different bricks that basis on our service offering and give you the main figures for each of them. Those are pro forma figures, taking into account the disposal of the SUEZ U.K. business that occurred in December 2022. That will give you all the elements and all the numbers you need to build the sum of the parts of the group to obtain a more accurate valuation of Veolia. If you use market multiples for each of our business segments, you will see that some of the part is in the EUR 40 range, significantly above our current share price, keeping in mind that because we are creating value with a combination of our different businesses, the real value of the group goes beyond the [ sum ] of the part of each and every segment. And we start by the water business and more specifically, the municipal water activity. We are by far the world leader with EUR 10.3 billion of revenue. Our mission is to optimize the efficiency of the facilities, network, water production, wastewater treatment and digitalize the customer service. Thanks to those improvements, Veolia have saved 320 million cubic meters of water in 2022 in the various cities we operate. The key drivers for growth are demography, water quality improvement, water reuse and water to energy projects. The nonregulated water operation, which is the largest business with EUR 9 billion provides high visibility. It is based on long-term contracts, ranging from 10 to 30 years and moderate capital intensity, because we operate the infrastructure on behalf of our clients. Our business is protected against inflation through automatic indexation mechanisms with tariff revised 1 or 2 times a year. EBITDA for nonregulated water reached EUR 1.6 billion, representing an EBITDA margin of 18%. In the regulated water, we generated EUR 1.2 billion. In the U.S. and in Chile assets that we have acquired with SUEZ, the business model is very different. We own the infrastructure forever, so the contracts have no time limit. The operation of the infrastructure is done within a framework in agreement with the regulator. In exchange of our activities, we benefit from a guaranteed return, typically around 10% on the investment we make. Margins are very high, typically 50% of EBITDA and around 20% at the net margin level. On the next page, you have a second part of the water business. The water technology, which is a combination of our historical value water technology and the WTS we acquired from SUEZ. With revenue of EUR 4.5 billion, Veolia is a world leader in water treatment and mobile units. We are #1 in many markets, including filtration, evaporation/crystallization, [ desalination ] and water reuse. These activities are a mix of projects in which we provide different technologies and recurring revenues with a provision of services and the sales of chemicals to enhance water treatment. The U.S. is the main market and represents 38% of the revenue. The technologies that make up our portfolio are unique and gives us the ability to meet all the customer needs, regardless of their complexity. The key drivers for growth are: first, the push for industrialization in the U.S., especially in the microelectronic industry; second, the gigafactories worldwide; and third, the lithium production that requires a lot of water technologies. Water scarcity which is a main concern with global warming is also an important growth driver. The business model is not to take the construction risk but to design facilities with our own technologies and to provide the main equipments. For several years, Veolia has been focusing on value-added activities to maximize profitability while limiting risks. This is a low capital-intensive business with a very high ROCE. And let's move now to the Waste Management. You have the detail on the slide of our solid waste activities. Our 4 main countries accounting for more than 80% of the revenue are France, U.K., Germany and Australia, where we are #1 or 2. The key drivers for growth are the recycling business and the move to power and biogas from the fraction of waste that is not recyclable. The client mix is 50-50 between municipality on 1 side, and industrial and commercial customer on the other side. The municipal business is very stable and indexed. We continue to be very selective on new collection contracts and focus on value-added solution where our know-how can be translated into better prices. With our facilities, we are producing around 4 terawatt hours of green energy that is boosting our results. On the commercial and industrial side, we continue to increase our prices in order to maximize the value created. Despite the slowdown of the economy in Q4, in 2022, this business continued to perform well, thanks to strong pricing and resilient volumes. We have, therefore, achieved a record performance for the solid waste in 2022. In this business, Veolia has been also the precursor of the circular economy, which makes us the world leader in plastic recycling market, as Estelle mentioned, that is very efficient in terms of CO2 reduction. On the following page, you have the hazardous waste business, representing EUR 4.1 billion of revenue in 2022 and almost EUR 600 million of EBITDA. We're the world leader in hazardous waste, ahead of the American players, being the only company present in all 5 continents. The main platform is Europe, where we are the leader by far, and the second largest is the U.S., where we are #3. The growth drivers are, of course, the regulation in more and more countries around the world, we're the best standards of hazardous waste treatment are being imposed, but also the industrial production. We already see the effect of the reindustrialization of the U.S. We'll see -- we also see a strong push in the Middle East that is really getting greener. And if I take the example of the [ Ruwais ] refinery project in Abu Dhabi for ADNOC, it is really emblematic. The hazardous waste business model is merchant plants, meaning that we develop and fully owned assets with a very high barrier to entry because of the permits that are very difficult to obtain. This is what makes our network of facilities in Europe unique and impossible for our competitors to replicate, which gives us a strong pricing power. We have experienced a 15% growth per year on average from 2018 to 2022 to reach more than EUR 4 billion. And we continue to invest in Europe, in the U.S., in the Middle East to make our network of facilities even stronger, that gives us a strong reservoir of growth for the years to come. Let's move to the Energy business. As Estelle told you, the energy business represents EUR 10 billion of revenue in 2022. Veolia is already a major player in this market, and we start by the largest business segment, which is the local loops of energy. That's mostly our district heating business to supply very efficient heat and power to local authorities. Most of the activity is located in Central Europe with our 4 main countries; Poland, Hungary, Germany and Czech Republic. The main driver for growth is really the decarbonization of this activity using alternative fuel to exit the coal in Europe. That will generate for Veolia, a strong reduction in its CO2 emission. The second driver is the support to the grid, what we call ancillary services. It is more and more important as we have the development of the renewables in those geographies. In terms of business model, Veolia owns its heating networks and coal generation plant and invest in the coal transition. We have already invested around EUR 400 million as we speak of a EUR 1.5 billion plan to exit coal in Europe by 2030. Two facilities have already been commissioned in Germany and in the Czech Republic. In this regulated business model, we do not take any energy price risk, because prices are set at the beginning of a heating season with updated prices. And Veolia is implementing its hedging policy to secure its margin. This business is highly efficient, thanks to heat and power cogeneration but also highly efficient district networks driving new connection. The second Energy segment is a building energy service that represents EUR 2.8 billion of revenue. The main geographies are Italy, Spain, Belux and the Middle East. The key driver for growth are the energy savings and higher energy prices that are really pushing all our customers to reduce their energy bill. The business model is really a service one where we don't own the asset. And we supply heat and cold for tertiary buildings or hospitals. We operate assets with a few investments, and we perform upgrading works for our clients. For example, we operate a lot of shopping malls and airports in the Middle East with our Enova subsidiary. We have put a lot of digital into this business with real-time monitoring and central management with our upgrade service center. The business is low capital intensive with a high ROCE, which is typical of a service business. I finish with the last business segment. Before we move to the testimony of the 4 managers on the field who will describe what they do in their different activities. The on-site industrial service business represent EUR 2.9 billion of revenue. The portfolio of activities has been developed by our local managers, starting from their installed base. The key drivers for growth are really the decarbonization. And the Solvay project in Eastern France is a great example and the demand for long-term efficiency up to triple net 0 on water, waste and energy. This activity is multi-technical services for industrial companies where we again offer energy efficiency services but also management of their process water facilities such as cooling water that might be treated because it has been contaminated in the production process. We operate non-core industrial assets to provide cost efficiency and reliability in the meantime. This is a pure service, low intensive capital business with lower margin but high returns. That's it, I have given you a quick overview of our different activities, and we can move to the live station.

Absolutely. Thank you so much, Claude, please join us. Estelle, as Claude just said, we're going to move to the field. We're going to see how 4 of your business solutions are being implemented a world tour of sorts, correct?

A short world tour. But nevertheless, it's -- I thought it was more interesting to hear from them, the guys and ladies who on the field in [indiscernible] solution, implement them and deploy them rather than just hear from us here at HQ.

So let's welcome our speakers. They should be appearing shortly on the screen as I'm speaking, joining us live from the United States from Australia, from France and from Germany. First of all, thank you all so much for being with us. I know it's ridiculously early or ridiculously late for some of you. Can you all hear me correctly? Perfect.

My first question is going to be for all of you to bring the audience up to speed. Can you please tell us rapidly what site you're at since I can see that you're all live from emblematic Veolia sites and tell us the main solutions that you are developing? And perhaps we will start by the lady, Karine Rougé, CEO of Veolia North America, Municipal Water. Hello, Karine.

Hello, [ Ellie. ] And good morning, everyone. So yes, indeed, I'm talking right now from Haworth in New Jersey. This is our largest drinking water treatment plant in the U.S. Out of here, we are serving a little bit less than 1 million people in New Jersey. But that number, since the merger with SUEZ is actually quite small compared to the total population of Americans that we're serving. Now it's 1 in 12 Americans, while getting some sort of water or wastewater services provided by Veolia. And I said it, the merger has been a game changer in terms of scale, but not only. Here, this is we're operating as a regulated utility. But across the U.S., we are also a leaded like nonregulated business, providing O&M services to communities but also a leader in equipment technologies. And the combination of our scale and these unique services is going to be a clear differentiator to our ability to build up on the momentum of the U.S. market.

Thank you so much, Karine. Richard Kirkland is also the CEO of -- CEO and Managing Director of Veolia in Australia and New Zealand. Hello Richard, tell us what site you're at and the solution that you wish to share with the audience today.

Hello, [ Ellie. ] And hello, everyone, overseas. I'm in Sydney. And as you can see, it's dark outside. So we went and did some filming earlier live at the Woodlawn Eco Precinct. And we'd like to share that with you as a showcase of what we're doing in Australia. This is the Woodlawn Eco Precinct in the east of Australia, formerly a lead, zinc and copper mine from the 1970s. When that mine closed, it left contaminated land, acid-forming rock and pollution going into the local waterways. 15 years ago, Veolia stepped in to remediate this entire location, bringing in [indiscernible] via sustainable rail transport and producing energy, fertilizers and food. This is the best example of ecological transformation in Australia. In order to fully decarbonize the operations, we've installed 2,500 solar panels, which are providing all the electricity for the mechanical treatment and the site operations as well as 23 2-megawatt wind turbines around the perimeter of the site which are exporting to the grid, green energy. New policy is requiring cities all over Australia to collect their green and food waste. And here, we can process 100,000 tonnes into organic amendments and compounds. So that's how we're remediating the mine and also selling materials back out to market in what we call the circular economy. As well as remediating the land, the bioreactor is also a source of renewable energy. We collect all the waters and the biogas produced, and we run that by gas through 7 1-megawatt engines, producing green electricity. And the waste heat coming from those engines is used to power this fish farm, where we're growing barramundi, which go out to local restaurants. Veolia intends to expand what we're doing and also duplicate this activity on other sites. Australia has an ambition to become our renewable superpower due to the land and the sun and the wind that it has available, and Veolia is going to be a big part of that. We have further plans of this site to expand the solar farm and also install an advanced energy recovery facility. And as Australia turns its head to the Net Zero agenda, depollution and mitigating biodiversity loss, we're ideally placed to duplicate this kind of ecological transformation across Australia.

Thank you so much, Richard, for this very clear presentation. We back with you shortly for more. We also have Pascal [indiscernible]. So you're in charge of operations in the [ Northeast ] [indiscernible], Veolia. Hello. So which side are you at? And what solution would you like to share with our listeners today.

So here, we are down in the Southeast of France. And here, we operate processing facilities using chemical properties, mechanical heat systems to try and manage either industrial or municipal waste, so that we can try and reduce pollution -- the toxic pollution as much as possible, so that we can protect the environment. So our site, we process roughly 130,000 tonnes of pollution. And it's part of a way of tackling regulation requirements for local municipal partners. That's on the way of preserving natural resources.

Thank you, Pascal. [indiscernible], you are the CEO of BS Energy, of Veolia subsidiary, and you're the Managing Director of Veolia Energie Deutschland. Hello, tell us about your site and the solution that you are developing.

Hello, everybody. I'm live in the control center of our combined heat and power plant in the middle of Braunschweig, the [indiscernible] city in Germany. The location is a simple of the fact that we can directly see and monitor the energy transition. The important message is that we here in Braunschweig are moving away from energy production with a fossil fuel of coal. We are currently successfully commissioning 2 new power plants at this location. One is the biomass cogeneration plant with wastewater as the main fuel, which can no longer be recycled. So [indiscernible] use of what saves certain environmental large amounts of the carbon dioxide in the generation of electricity and heat. The biomass cogeneration plants covers the basic, heat load and meets the heating requirements of around 50,000 households in Braunschweig.

Thank you so much. So now that we know where you are and what you do. My second question to all of you is going to be, what drives your business today? Is it regulation? Is it public opinion? Is it a will to innovate and perhaps take your role, take some risks as a global leader? I'll let you tell us more. Perhaps we start again with you, Karine.

Thank you very much. I would say that in the U.S., it's a mix of all what you mentioned. And we're a little bit in the middle of what I would call the perfect storm. [indiscernible] on the 1 hand, there's extremely old infrastructure. One thing that's striking still to me is that the pipes that we dig here, just here in New Jersey, it's not rare that some of them are in wood and date back from the 19th century. But on top of its aging infrastructure, you also have a historical momentum in terms of drinking water regulations and especially touching PFAS which I'm sure we'll have an opportunity to talk a little bit afterwards. And on top of this, an additional layer of stress is the extreme climate change events that we are seeing more and more month after month across the U.S. territory. So you could easily see how all of this is compounding cost and risk for the communities here in the U.S. And that's where I think that we are uniquely positioned as Veolia. First, because we can bring global innovations to very local problems. I mentioned the pipes. It's not only about digging the pipes and replacing them, it's about being very smart, bringing drones and a casting sensors, AI-based technologies in order to really limit and be as efficient as we can on how and where we replaced with aging infrastructure. But it's also, and I think that's a very new and extremely important point, changing the dialogues that we have with our customers. It's turning something which is an additional cost, an additional risk into an opportunity of revenue and resilience for the communities we serve. When a community has an issue because they might be worried that they're not going to be able to invest, finance, build and operate a PFAS treatment system, our ability to bring in the discussion on to maybe we can build a biogas plant close to your wastewater treatment or really look at the energy efficiency of your overall water systems. Then we are providing solutions, which are making the whole world water and wastewater equation much less risky, revenue producing and ultimately much more resilient to climate change. And the last thing I would say is this is very aligned as well to the political momentum that we're having now in the U.S. Thanks to the Biden plan on infrastructure, we are now seeing 55 billion additional federal dollars every year for the next 5 years coming in, supporting the financing of water infrastructure. So it's a totally different conversations, which are happening, and it's extremely exciting to be right now with Veolia in the U.S.

Thank you so much, Karine. I'm going to pass over to you, [ Jens ]. I know that your model is different because you moved away from fossil fuel, but perhaps you can tell us what drove that change and what is driving the business today.

Yes. Our target is the decomposition of our Energie business as quickly as possible economically and affordable. That's why we have various innovation ways to generate electricity and heat permanently without coal or other fossil fuels. The first visible result of the successful implementation of our project will be a complete shutdown of the coal fire power plant in Braunschweig. The consequence will be a strong reduction in CO2 emission of around 15%. We expect to avoid around 270,000 tonnes of CO2 per year. I think it's a [indiscernible].

Okay. We understand so much better what you're trying to achieve here. Richard, the same question, what drives your business today?

There are 2 really powerful drivers, I think, that are propelling the business forward at the moment. The first comes really from consumers, citizens and voters who have changed the politics. And in the last 2 or 3 years, the federal land state governments have really cracked down some locked-in targets for emissions reduction, for depollution, for control of hazardous materials and for recycling circular materials in the circular economy and setting strong targets against that for 2030. This really plays to our hand. And it's cascaded down into the regulators, the environmental protection agencies who are enforcing that. It really plays to our expertise. The second part of this is we just come out the back end of a very exciting merger, and we're now 6,500 people in Australia, over 300 sites strategically placed. We have the full portfolio in nearly every state, we've got water treatment, recycling centers, transfer stations, energy production sites, organic materials back to [ composite ] fertilizers. And with all that, we're really able to capitalize on those structural changes to the market that are coming from the policy. I kind of think Australia's turn the light on to ecological transformation, and Veolia is really ready to shine.

And now for you, Pascal, what drives business for you today?

There are 2 main topics that I could mention. The first one we've already spoken about quite a bit. It's how can we reduce the impact of our own activities. So here, we're dealing with ways to -- produce waste that can have an impact on the environment. So that's a main [indiscernible]. And going carbon free, it's really important, especially for [indiscernible] over the past few years. We have been developing solutions and alternative technology to process waste in ways that produces less gas. 80% of our gas use on site is now covered by our own production. So that reduces our CO2 emissions by 8,000 tonnes a year. On top of that, we look for the future. We look to see what our customers and clients want. For that, there is very much a hot topic now a days and that people are talking about electric mobility. Going electric vehicles requires a lot of energy, but it's also going to generate waste. So for a number of years, we've been working on another site that is over in the East of France, [indiscernible] industry. And for the past few years, they've been developing solutions to help us tackle this [indiscernible]. How can we do with end-of-life batteries? So in EV battery, 300 to 500 kilograms. A lot of hazardous materials. So from a strategic point of view, we need to find ways of managing that waste. And that's why we've come up with various solutions that are highly safe, so that we can properly recycle those batteries. And what we do is we break it down and we end up with a black mass, it's a bit of a powder, which is roughly 30% of a battery's overall mass which is -- contains a lot of strategic elements; lithium, cobalt and nickel. So we need to look how we can reuse and reinject those materials into the production cycle. We're currently investing in the [indiscernible] plant for a hydrometallurgy unit. So it's a way of taking those strategic metals, so we can reinject them back in the production networks, and it should come online at the end of the year. And through that, we will reduce the impact coming from extracting those minerals from the roll commodities.

So you talked about solutions which are unprecedented solutions, and this is the case with all of your colleagues as well here with us today. So the question is as follows. What do you do for copy and adapt? How do you learn from each other? I know this is a very important value for the group today.

So even when we're working on processes such as battery recycling. Yes, I mean it's something that is being done elsewhere, where Veolia is present. It requires a lot of work and a lot of innovation. And we're really questioning ourselves about so many topics, the impact that we can have and the entire production line for these various metals. So really, this is a trajectory that the group is embarking upon across all of its industries. And now we need to pull it together with all parties. So we already have a good mastery of the first stages of the processing and recycling and it's already operational and it already fulfills a number of needs from our clients. And now we're working on the next steps, so that we can pull those skills together and roll them out in other areas, other geographies. Now for the chemistry side of the equation, we're looking to get feedback from experience by the end of this year, next year as we roll out more chemical processing. And that way, we will be able to find ways to roll this out, further a field within the group. Because obviously, there's no point in reinventing the wheel every time.

Thank you, Pascal. You've all spoken about unique solutions -- unique positionings in your activities. What are you doing to learn from each other to apply the copy and adapt method that I know is very important for Veolia?

Yes, it is indeed absolutely essential. And in the momentum, in the perfect storm that I was describing earlier, our ability to go fast and to scale is absolutely linked with our ability to copy and adapt. And for us in the U.S. on water, it's going to go both ways. I mentioned PFAS earlier. And the U.S. has been one of the countries and the developed countries over the past few years that has been the most advanced, both in terms of public awareness but also regulation in terms of PFAS treatment. And what we're currently seeing is that this level of awareness is also raising in Europe. So we will leverage the experience that we built here, where we already operate around 11 systems. And believe me, the regulation is still moving. So this is really going to be a long-term trend. So we stay extremely connected across the world around the PFAS topic. But then it also goes the other way. I mentioned a few things around water reuse and decarbonization. Here, I mean we have some examples. But at the scale of the U.S. territory, we need to go much bigger and much faster. And I'm really like -- we're working very closely on the one topic with our Spanish colleagues in the water reuse segments, both on the municipal side and industrial side, because Spain has a scale that we absolutely do not have yet in the U.S. And then on a topic like decarbonization, which is local energy production, biogas, lowering the energy efficient -- increasing the energy efficiencies of our water sites. Here, both, France and Central Europe, are very strong providers of solution, ideas, best practices to us. So in a nutshell, it's a nonnegotiable for us to be fast and to go at the scale that territory as large as the U.S. allows us to be ambitious for.

Thank you so much, Karine. I'm going to pass over to you, [ Jens. ] What copy and adapt opportunities do you identify today?

So I think we have all many potential to learn together. We can contribute our experience to the project planning and implementation of such a transformation project. We have learned a lot of cooperation with various national or international experts, companies and authorities. In addition to our experience, we are also looking for innovative ideas for further decomposition projects, especially in the race to energy sector, together with our [indiscernible] to share ideas and experience. For example, there are several projects in energy generation from proceed waste, biomass or solar. Biomass, in particular, is an interesting field of development in Germany as we have a lot of experience in biogas production, with biomass as an important part in our environmental transformation in the energy sector. It's an available strength of [ failure ] to combine its [ potential ] in water, energy and waste management to become more efficient and accelerate our goal of decompensation across sectors.

[indiscernible], [ Jens. ] And we're going to close this roundtable with you, Richard. What opportunities do you see to copy and adapt and perhaps leverage your experience for the rest of the group?

Well, look, one of the unique and really valuable things of working in a global group set up in the way we are is that when a customer asks me for something that I'm not doing, I can find a reference and an expertise from one of my colleagues, which is transferable, and our operational model facilitates the exchange of that information. And then I add my innovation to make it fit my local customer, and we're away, and we're going very quickly. We recently had an example where we needed to get a biomass facility running. We weren't operating any others, and I was able to get someone in from France and Singapore to come and get it up and running, quicker than we could have done that otherwise. And it's something that my competition is not really able to duplicate. I think you can see that in the Woodlawn Eco Precinct project where we're across the full value chain, and today, we're remediating a legacy site. We're also taking the waste and managing the waste materials from 8 million people across New South Wales. And also, we've got this development where we're going to be providing renewable energy and clean water to a new mine, and it will be one of the greenest mines in the world. And that's the way we're moving. We're already doing it, but we're transforming at the same time. And with Australia wanting to be a global superpower in renewables and our ability to copy and adapt to what we're doing elsewhere, we can be a really big part of that. It's genuinely exciting times.

Thank you so much, Richard, and a warm thank you to all of you for your time today. Have an excellent rest of your day or rest of your evening. Estelle, as we just saw, depollute the carbonate regenerate resources. We've seen the [ VLS ] solutions in action. What does it say about the group spirit?

Well, I think there's 2 words that come to your mind. When you see these examples, the first one is the scale, obviously, which means that we can replicate have and an impact and you can often say [indiscernible] is more impact. So this is a positive thing and also going faster-going faster. As Richard said, even in Australia, there was a moment when we went one step further, and we had -- we moved on with our solutions, and this is -- that are the 2 things that come to my mind when I listen to them.

Thank you, Estelle. Okay. So the next step is to convince everyone of this impact that you're talking about and federate the opinion of the public. So [ Laurent, ] in charge of stakeholders is going to come and talk about this and evoke this part.

[ Eli, ] thank you very much, and good morning, everyone. A few people ask me if I hurt my arm, out skiing that I'd just like to say, no. Because obviously, when you're working for Veolia and you've got a Capital Markets Day, there's no time for rest, for the wicked [ before hand ]. So obviously Obviously, we are here to talk a bit more serious matters. So let's get into it. As you heard in the introduction for Capital Markets Day that Estelle gave us, anything related to ecological transformation has really helped us change scale. But that very topic has moved up to a bigger scale when attending major international events, such as the COP summits, it's a main topic. It is one of the fundamental ways to fight against climate change. But for a long time, public authorities or people haven't really seen the main effect of that. And time and time again, coming out of the COP summits, we couldn't really see the concrete translation of that concern. And it was hard for us at the negotiation table to weigh in on the debate. But people became fundamentally aware of the situation. And that meant more pressure being put on politicians. So that politicians could be held accountable, and they would take responsibility for actions and lay down a number of rules and regulations. The media as well, they played their role by disseminating that news for our field, so that people would truly become aware of the ecological transformation transition that had to be put in place. But obviously, all of that depends upon regulation. We've seen regulation in our businesses. Regulation is the main driver. And we see regulation coming in at faster pace as well. Sometimes regulation is quite ambitious, sometimes it's binding. In some cases, it's a bit too binding, but we deal with it. To give you an example, the European Commission, 54 documents that were put to the analysis and have been put through either adopted or are up for adoption in just 6 months. Now to reflect that to support that regulation, there are great investment plans that are coming from government. The green deal, for example, at European level. But Karine Rougé just spoke about that, has also spoken about major investment plans coming through in the United States. So there are the 3 aspects; general awareness, regulation and funding. And the 3 of them together have enabled us to accelerate our change. And it is also a way of responding to expectations coming from general opinion. And what people are expecting is to see the local impact of ecological transformation, but they want to be able to see and feel that change. They want to be able to understand exactly what world we are heading to and what the future holds. So that shift which is happening locally gives us at Veolia even more opportunities, because, as you know, acting locally is part of our DNA. I mean, I'm not giving away any secrets here, and our employees have colleagues in Veolia. They are very local. It's not -- so when we send someone out to work in China, they don't work in China. They're work in Shanghai. And we need to work with people who have an intimate knowledge of their local environment. That too is part of our DNA. [indiscernible] this shift is going to happen very much locally. Ever since 2017, we have been surveying public opinion on a number of topics around acceptability of the solutions that we are providing. And people say that, yes, we're willing to act. And actually, we carried out an ecological transformation barometer survey with Elabe. And I'll talk about that in just a few moments. And historically speaking, people saw us as a B2B type company, that we operated only with industrial companies and local governments. But more and more, people are seeing us as a B2C2B where we work with the end user, when working with the end user and clients as we develop our businesses. And that is a way for us to champion the fast change that we drastically need. So when working with Elabe for the barometer, we surveyed global public opinion on ecological environmental matters. And what we see is that people are very keenly aware of it. And that came through the survey very markedly. And what people now see is that in action costs more than action. 6 people in 10 on our planet are willing to accept 90% of the change required for the ecological transformation. For that, there are a number of conditions that we have to uphold. First that the solutions provide no health risk. And obviously, following the recent health crisis in pandemic, we can understand why. Also, there needs to be a fair share between all stakeholders of that burden. There's a notion of climate justice, environmental justice, which is very much a hot topic for many people. And finally, the solutions have to be effective, efficient and long term. And that's why Veolia stands out of the ground as being a guarantor of that. Because we can come up with solutions, we can roll them out, and we can ensure that they are implemented effectively. But on top of that, we are seen as someone who is very much aware of public opinion in the local environment in which we operate. And something we see time and time again with Estelle with all the meetings that we have in Paris, Brussels, Washington; politicians, challenges, they want to accelerate. They want to know what solutions are available for them to do so. But at the same time, they ask another range of questions. Are these upheavals going to be acceptable for local populations, because they almost want to have a bumpy free ride. And they ask us, is this solution better than another one. Even when we're in Brussels when meeting with Fransimenman not too long ago. He spoke to us about public opinion straightaway. Just think about used water, used water use and recycled water. You may know that in France, we had drought water shortages or fires, water restrictions were put in place. And in March, the same questions are stilling raised, just open a paper. Politicians are making statements on it. And the question is how are we going to be able to pull through the upcoming summer to worked with public powers to come up with a number of solutions to almost sound the alarm, spoken media about this issue. To give you an example, I do my covered that our streets and our pavements are watched with drinking water. I don't know what public opinion would think of that. So it's by -- being part of public debate by raising [indiscernible] forming political figures and political actors to these issues that we can bring about change. And for example, in France, we still don't have the right regulation when it comes to using recycled or used water. So that's something we need to change. And that's why Veolia can play its role by speaking actively with policymakers public sector and bringing about that change. We also have the power to rally people together so that we can speak with a single voice. Never before in history has there been so much regulation. Never before in history have been such investment and never before has there been a global leader like Veolia, with the right size to be able to push forward. And looking over at [ Claude ], obviously, financially, VIA will benefit considerably from the current climate. The planet are perfectly aligned. And you can definitely count on Veolia to make sure that this environmental, ecological transformation will take place and that the world will be a better place in the future. Thank you all, and I wish you all the best for the CMD.

Thank you, Laurent. Thank you. So let's just summarize. Everywhere in the world, environmental transformation is already underway. And it's not just earlier that's changed. It's the world. We've talked about eco responsibility. We've talked about national investment plans that are increasingly massive, Laurent said, there seems to be an alignment of planets it's time to act. The consequence is opportunities for Veolia, but it's also responsibilities. Hence, the third part of this day, Veolia, the ESG benchmark. I'll turn to you [indiscernible] and get into the thick of things. Today, when it's about showing society that we're acting for the protection of the environment, it's something that all companies need to do today. With the risk of being accused of purpose watching, what makes Veolia an ESG benchmark history.

Each year we have too much purpose washing, green washing everywhere is very different from other companies, but there are a lot of kind of needs carrying their conventional business activities, and then they have the ESG activities on the site. We have 2 different separate things. In deli, it's something that we do every day. It's essential. Our work I would job what customers want is to get supported when we're generating resources when decarbonizing the activities, it's embedded is fully part of Fila. So we said that the purpose of Veolia is about leading the ecological transformation, but it's not a side line of business. It's something that we do every day on the field. It's our purpose. And to do that, we work on indicators because we always say that if you don't measure something that it doesn't exist. And so at Veolia, how would we know for a successful because that's a question that we may have. How can we measure our success. Well, we use 19 indicators, 19 indicators that we've used for our strategic plans that we use at all times. So we have financial indicators, 4 of them, but we have 15 nonfinancial indicators. And this is how we measure success. And to review that it is being taken seriously and that is at the heart of our business. There is a sponsor that is associated to those indicators at the group executive coming level, you see that it is done in practice, and the sponsor for the carbon trajectory is our Financial Director.

So it's not the Director of the sustainable development activities. It's the Director of finances. Claude, could you tell us more about these objectives we've just heard about, which are quantified and perhaps clarify where you are with these commitments?

Our plan in thinking about the balanced approach to our performance, and it's main dimension is economic and financial [indiscernible] side, commercial, environmental. In order to do that, we define the indicators and we defined ambitious targets over 4 years, and they published the results on these exclude that you followed us this morning. You know that beyond our exceptional financial results, we also have very good indicators or extra financial performance. I'd like to remind you of the 2 figures that [indiscernible] was mentioning earlier in terms of emission, emissions we avoided with our clients. 14 million tonnes of CO2 that [indiscernible] activities have allowed to avoid in our clients, and that's a very important element is the improvement of our network efficiency. And you know this is something very important, and we managed to save 320 million cubic meters of water.

I think you're resonating in this mic as well. Estelle, how is this rolled out as a management and steering tool what we've just heard about?

Well, as I said earlier, we really want these indicators to be rolled out, and we want all of our collaborators to go into that direction and meeting our objectives. And to do that, we decided to take into account those indicators in the variable compensation systems, [indiscernible] 16,000 employees at Veolia that have environmental indicators to comply with. And there are variable compensation systems and not only financial endpoints. We don't have 1 person on 10 people that could talk about these ESG indicators. We're talking here about 16,000 people that experience those indicators on this indication. And I think it was key to the success of the merger. We have common values on this purpose, too.

So I'm curious to find out how this approach is impacting the perception of the Veolia externally.

We have a lot of people who look at us from outside, so they are rating agencies but also investors in this. You know investors, they pay a lot of attention to our progress in terms of CSR, both are very mindful of the way we're steering our company with indicators. This allows us to measure progress, but also do it year after year ending extra financial rate mix, we have managed to progress progress year after year. So here a few indicators. For climate change CDP 2020 we were -- now we are A for water security, we've also gone up 1 notch. We are A as well in 2022. And if we take water and waste utilities by Moody's ESG, we are #1 now.

Yes, number one, but not on all indicators, and I have many more ambitions, and we share those ambitions with Claude. Because, yes, we've made progress, but I think we should be the leader. We should have the base rating possible on these indicators, given all of the evidence that we've shared and all things that we've shown to you this morning, but the problem is that sometimes the ratings are not adapted to our cities or the specific cities of our mission. We want to decarbonize activities of our customers and clients, for example. And to give you some examples and to show you that it's not adopted. Let's take decarbonizing activities. We've talked about Solvay earlier. When you take the asset that exists. And if you want to decarbonize this plant, for example, if you want to cut the emissions by 50%, it's good for the planet. It's good for the performance of the customers, but it has a bad impact on our performance in [indiscernible] planet. So you can see there is a disconnection on this topic. Another example, the water footprint, Claude mentioned it, 320 million tons of cubic mirrors or saved year after year. So it's the equivalent of the city of 6 million heavens. Some ratings are saying, okay, yes, the water footprint of Veolia is high. Yes. But thanks to our [indiscernible], we were able to save millions of tons of cubic meters. So that's why we need to adapt those ratings to better understand what's good for the planet.

Well, of course, and we understand this discrepancy. Now we see to what extent the ESG is embedded in your business models, we'll end this sequence with examples, starting with the from ESG, illustrating the positive impact of earlier for the environment.

So first of all, Veolia's activities completely linked to the protection of the environment and by diversity because we protect natural resources and defied solutions. If I take the example of the biodiversity has set a global framework to protect biodiversity. We integrated biodiversity in our strategy. We already meeting most of the expectations of this global framework that I'm going to give you precise examples. We operate in 44 countries, and we operate uncertain sensitive locations because these locations are sensitive for biodiversity. We always have a protection plan for biodiversity. There's never a very hands-on example. We've launched a large plant which is now deployed worldwide with 0 [indiscernible] clear on all of our operations.

Expecting the Financial Director talk about biodiversity. So that says it all. Okay. Moving to the S from ESG itself.

So once again, I think that we are a very specific company. We have 220,000 employees present around the world in all territories, and we give something back to the territory through our purchasing policy. 95% of our purchases are made on the territory we are working in 20,000 employees. So it's the heart of the company. The employees are our ambassadors for the ecological transition and we measure the level of engagement of our employees in Isabel mentioned earlier, 89% of engagement, that's exceptional. And I think that's something that can help us go even further. And because sale also have to give them something back for its global for printer decided to launch the care plan to ensure a minimum levels of social services, wherever you are in the world, in France, Europe, China, you at least have, for example, 10 weeks for maturity live, 1 week for coparent -- you can also have some support if you want to [indiscernible], either sake. We have a health insurance company as well, policy, and I could continue with all the things that we have implemented. Yes, in France, everything is already available because the regulated home services in France are very strong, but it can be a life changer in the 100 countries. But not only in the south, we've seen Karen in the U.S. And in the United States, the margin is not compensated. But if you are working with you, yes, you can.

Lastly, how does Veolia body the G of governance?

Of course, we have the Board meeting, the executive committee. We have a lot of people that are experienced and we have for the majority of them independent people. But what's more innovative than we have a dedicated committee on the purpose of a to make sure it is implemented in the company. And once again, something even more innovative. So we have a shareholding system. I mentioned it earlier. So shareholding system with employees so that we've been developing for years. It's been a huge success in 2022 once again, that's enabled you to reach a rate of 6.5%, which means that employees are the biggest shareholder of the Veolia group. And to me, it is a sign of confidence, confidence towards the project of the company, and they have a representative on the executive company.

That's unusual indeed. Thank you, and thanks to both of you, Claude. Hand over to you to share the group's financial forecast [indiscernible] to head to the end the stage to share the group's financial trajectory with us.

Marcel, thank you. Before reviewing the various financial elements of our forecast, I would like to come back to you on the different pillars on which our business model for value creation is based. Veolia success in delivering solid growth in revenue and earnings year after year is based on first positioning in growth businesses, driven by the underlying trends of decarbonization pollution control and resource regeneration. A regulatory environment that expands the size of our market every year. Global geographic footprint, and our unique portfolio of know-how and technologies. A contractual model that includes indexation of 70% of our contracts and our discipline in terms of pricing of our offers. In addition, the merger with Suez has given us a boost Veolia is now in a position to grow over the long term at a mid-single-digit pace, excluding the fluctuation of energy prices. This growth is reinforced in terms of results by the efficiency plan we implement every year, which enables us to offer our clients an even more efficient service and for our results to grow faster than our revenue. In 2023, our efficiency plan is expected to generate at least EUR 350 million of savings plus from the integration of SUEZ assets. The synergies will represent a cumulative of at least EUR 280 million over 2022, 2023. This growth will be achieved while maintaining a strict capital allocation with CapEx of around EUR 3.5 billion, allowing for a free cash flow of at least EUR 1 billion. On the following page, you have an illustration of this mechanism applied to our 2022 results. We talked about this earlier this morning. Our solid revenue growth of 6.5%, excluding energy prices, has translated into strong growth in current EBIT of 16% and very strong growth in current net income of 30%. All this, while restoring balance sheet discipline by the end of 2023 and increasing the dividend by 12%. We are thus perfectly positioned to achieve another year of growth in revenue and results in 2023. On the following page, you have a reminder of our 2023 guidance announced this morning with a solid revenue growth, EBITDA growing organically 5% to 10% and and current net income around EUR 1.3 billion. On the page -- on the following page, in response to a question that we very often receive, I wanted to show you the schedule of renegotiation of the most important contracts. As you can see, our portfolio is very diversified in time. And the largest contracts account for a very reasonable share of the group revenue. with only 12% for the first 34 contracts. And large contract renewal are limited in the next couple of years. It represents less than 2% of the group revenue to be renewed by 2025. In terms of capital allocation on the next slide, most of you know our criteria. As I said earlier, this strict discipline has been the key to Veolia's performance in recent years by fueling the revenue with profitable projects. that allowed Veolia to generate increasing free cash flow every year. And we will structurally deleverage the group with our strong increase in results that will allow us to seize opportunities as they arise while keeping a very robust balance sheet. Regarding CapEx and capital allocation, with a new perimeter, we are spending around EUR 3 billion of Embark CapEx in our operation, EUR 1.7 billion of maintenance CapEx, including EUR 600 million of IFRS 16, and EUR 1.3 billion of contractual CapEx. With the free cash flow generation and the annual asset arbitrage, we are spending EUR 500 million in discretionary CapEx and up to EUR 1 billion in teens every year, and we remain very opportunistic. And as you all understand, we have headroom in the balance sheet to do so. The policy of bringing space in the asset portfolio allows us to have a self-financing business model and to manage the group with a financial leverage around 3 times. On the following page, you have the financial debt schedule. Thanks to the antitrust disposal carried out in 2022 with remarkable multiples, Veolia has a significant amount of cash on its balance sheet, EUR 6.8 billion at the end of 2022. If you look at the debt maturities between 2023 and 2025, this means that we will not have to issue any debt very soon. The cost of financing should therefore, remain stable in 2023. On the following page, you have a reminder of the earned tax loss carryforwards available to optimize our tax rate. The envelope of $350 million in the U.S. is to be used by 2026 and will enable us to improve the rate in this zone. The same applies to the EUR 250 million for the French tax group with no limitation in time. In total, with a progressive tax optimization by creating a combined tax group in each country. We are targeting a normalized tax rate of around 25% for the next few years. All these elements allows us to fully confirm our objectives set at the beginning of the Stress acquisition, an accretion in earnings per share of around 40% in 2024 coming from top line growth to optimization of all the items of the P&L to further increase EBITDA, current EBIT and current net income. The combined pro forma ROSA in 2021 was 6.5%, which is a result of Veolia stand-alone at 8.2%. You can see that on the slide. And SES assets, at 4.6%. In 2022, ROE posttax stood at 7.6%, an increase by more than 100 basis points in 1 year, it's remarkable. We expect ROCE to be at 8% in 2023 and to continue to grow above 8% afterward, creating significant value against the WACC at 5.5%. Our dividend policy on the next slide will be maintained as it has been a success and a successful marker since 2013. So the dividend will continue to grow in line with EPS that will be fueled by top line growth or cost savings and our synergies. To conclude, the 2022 figures show that Veolia is solid, agile and a piloted group. And we are on track to continue to grow our results. Our growth will come from our priority development areas, the pollution, regeneration and decarbonization. Our unique range of offerings and geographical footprint gives us confidence in the group growth. In addition, our position in the top 3 in all the key countries where we are present is a clear advantage. Our business portfolio is very resilient with 85% not exposed to the economic cycle, which gives us a lot of visibility. We continue to generate a significant amount of savings each year, of which we keep between 1/3 depending on the year to fuel our earnings growth, plus the EUR 500 million synergies from the merger with which will ensure solid earnings growth for the years to come. Our balance sheet has already returned to a leverage ratio of less than 3x, which gives us the capacity to seize opportunities as they arise. All these elements allow us to forecast solid growth in our results and our dividend in the coming years.

Thank you so much, Claude. Please come and join us. So I hope that for you, chances to have a slightly more precise vision of our ambitions our convictions and our solutions at Veolia. Estelle, I will be giving you a floor in just a few instance to conclude our meeting. A meeting, which was structured around the company purpose of a which was actually the red thread that we followed over the past 2.5 hours. And now here are the print main principles and images. [Presentation]

You understood how proud I'm to be with you today. Very proud of the historical results. And this year was tough, but we made it. And I'm very happy as well the be working for a unique group in the world, unique due to its size due to its values and mainly due to its environmental efficiency. You saw it for yourselves or on loan with asset crisis and measure with [indiscernible] and with geopolitical context that is very uncertain. Our company is more agile and more efficient and creates more of an impact than ever. And going back to Shape's code, you should always say what you can see. This is why I have 2 hopes as we are reaching the end of this Capital Market Day. The first 1 is that I wish that you share my vision that of the gap there is between what we are and our value on the markets today. we are the nicest player on the nicest market in the world. As I said, our potential in terms of market is huge, EUR 2,500 billion today and is growing, growing very fast. And we are in an ideal position to get the best part of it. And also when we sometimes divest assets, we do it at a level of 17x EBITDA. However, our value is far lower than that. So Veolia today is worth more than that. The second hub that I have is that you are aware of the coherence, the areas between the ESG rating and the one that it should be. You should always say what you can see, and I would add, especially you should always, which is more difficult to see what you can see. Let me explain we could sell our polluting assets, starting with a few capital plans that we are currently transforming. You could -- we could decide to work with industries that are on the only emit low amounts of carbon, we could watch elsewhere, when we raise issues related to hazardous waste. So this would turn us into the world leader in terms of ESG, but it would really worsen the climate hazards, and some ones that there is on our planet on us and on our kids. And we do not want to lead an ESC washing policy. Our purpose that we mentioned means that we cannot do it and same for our values. But every member of basher in comment in all businesses in all areas, we are here to create the biggest positive impact as possible. And as I said, mobile means more impact. We bring solutions for the most difficult types of solution especially because they are the most difficult ones. And we bring solutions to the companies that emit the most carbon because -- there are the ones that we have to help the priority to reach the Harris agreement objectives. Our ambition -- our objective is more ambitious and more useful than just decarbonating our results. I mean we want to contribute to decarbonating the planet is not going to change strategy case, it's impossible to change our purpose but not our impact needs to be known as it should be. And even though it means that we have to have evolution in the criteria for the ESC rating in our fields because this gap cannot be anymore. As you know, the world has already started transforming. At Veolia, we take part in boosting this transformation because we are convinced that this -- there's no destiny. We are very optimistic, and we have always been. And this has been our motivation on a day-to-day basis. Ladies and gentlemen, I thank you all, and I suggest that we move on to a few Q&A.

So are there any questions? We have hostesses who will give you a microphone.

Do you make a link between the 2 points you just raised. So the fact that there's an undervaluation in financial terms and the fact that your ESG notation is also not adapted.

Well, not to this day. So I mean it's not that easy to be honest with you, it's not as simple. The value and the stock exchange unfortunately, is not as simple, but it's our ambition in the future related that is to say for me. I mean it might be a dream that I'd like to share with you. If we had a portfolio of activities with an investor and you want to be ESG, I mean, it's essential that you have the one, this would be my dream. And at some point, this is what I would like to achieve.

Maybe question here in the front.

I'm from Isobel Magazine. So the valuation of your Scope 3, has that been measured upstream and downstream to show the impact that you have on your clients. We didn't see any indicators on Scope 1 and 2 in your presentations. Are these -- have these been published?

Well, we published all this information I mean, the mission we did with our customers, the examples I gave earlier, do not count on Scope 3, if I may, otherwise, it would be I mean, how can I put it? I wouldn't go with what I said earlier. But as I said, it was the financial director that was the sponsor of this issue. I'll let Claude answer for Scope 3 at Veolia.

So concerning Scope 3, we have energies we purchased. So it's mainly energy and purchases of supplies. All of our CapEx is part of Scope 3. So we're working on Scope 3, just as we're working on Scope 1 and 2. And this is part of the preparation for the next strategic plan. We have several step plan. We've started setting a vision for ourselves internally here in the quarter. And we're working with the various business units to see how in a very pragmatic approach, they can reduce Scope 1, 2 and 3 within the next 10 years. This will allow us to build a plan, which won't be a greenwashing as we were saying earlier, an ambitious plan that will rest upon real actions in the business units, which will allow us to follow the reduction of Scope 1 within the activities. We work, and we started doing that with methane in Latin America. And with coal in Europe, we will go beyond. And now we will have a broad plan for Veolia, but for that, we have to wait for a few months because we're not building it here at the group headquarters, we're working on it with our people in the field.

Last about Scope 1, 2, 3. Just a few, how can I put it. Remind us by the commitments that we took. This is what's important for our scope, our emissions. We already took some very careful commitments, 0 up to 2050, and we'll have to share what we already do. We have a EUR 1.5 billion, as I said, in terms of investment to stop using a cabin in Europe, and we're very much ahead of the game. So we spent EUR 100 million to EUR 200 million every year on this plan. So it's not just up to 2050. It's also now that we reduce this. And also with our customers, what would be some kind of 4, if you wish, 14 million tonnes reduced in 2022. So I just wanted to give a bit of context. And let's try and maybe invest for that would be what we reduce with our customers.

Thank you, Estelle. A question here in the front. Sorry, there was another question over here.

I'm from -- I would like to know about your -- so your activities do have -- are impacted by variations in energy costs, that didn't come out very strongly in your presentation. And also for technical services for water and waste, which are highly exposed to the variation in energy costs. How -- have you passed on that variation in energy prices in your concession contracts? Those that are ongoing? And how will you manage this in the future contracts? I think that some of the networks have asked you that question as well.

Well, it's rather simple, in fact. And the prices of energy, but there's also the types of inflation reagents, chemical products. And so globally, gradually, as the prices increase, the cost increase on markets that are the ones that you mentioned. Well, obviously, the revenues followed the same trend. So basically, -- it's very transparent for Veolia. It's not a bolus, a search, but it's not a hindrance. And so with all efforts we made in terms of efficiency, you can reduce consumption of the regions and energy and so on and so reduce the increase. The potential increase that this would have in terms of prices. So we bring more efficiency to fight against inflation in terms -- due to the efficiency of our activities. So globally, this is what I can say about the energy prices cost.

I also had a question about energy, but maybe Mr. [indiscernible] could talk to me about short-term forecast. Have you already seen what the impact will be of the increase in energy prices on your turnover because it was quite high in the organic growth for 2022. And also, how is the beginning of the year going in terms of activities? Are there any breaks and trends in the markets and the activities and how about in China, indicators and in the manufacturing sector, which are quite good for February. So does this concern you for your activities?

Maybe I'll start with energy prices. Energy prices will continue to have a positive impact for below, however, what we saw in 2022. Why? Because we have a hedging policy. And our hedging policy means that we sell electricity and heat because our prices are indexed. We sell them with visibility over 3 years with almost 100% sold at the start of the year, and then 25%, which is sold the next year which means that the increase of energy prices is progressive in our turnover, which means it will continue to have an impact but below that, which we saw this year. So there's 2 trends, in fact, here regarding energy.

So in the short term, as I said, in English, I don't know how you said that the pass-through, so you buy at a higher price, you saw higher price. So that protects your margin. And so this is what Claude just explained. So this means that it's at the end of the day, for the group results, the energy prices don't make much of a difference with a higher law. Once the effects are adjusted and so However, what is really positive about the fact that the resources are more and more scarce is that people want to save them. And so as people want to say, well, people want to go carbon-free. When I say people, I mean, our customers, they want to avoid importing fuel and so the good tools or services in terms of energy efficiency and by against generation or electricity from waste. And so it's really -- it's a driver, in fact, for growth -- organic growth in our activities because we have more input from our customers, whether collectivities or industrial players that want to save energy. So in fact, these 2 effects that are -- I mean not only economic on the short term, but also the trends to launch energy at an affordable price and green at the same time. is there to stay whatever the bet you tack on the prices of the megawatt hours in the years to come, I think this is a deep trend that will remain for a while.

And in the start of the year, we can also say that we are seeing similar trends to the ones we saw in Q4. We have some good volumes on water. And if you followed, maybe you haven't followed our results, we've had Q3 and Q4, and we're waiting for Q1, which should be in line with those with volumes of waste, which are very resilient. We've also seen high volumes of water at the start of the year in Central Europe. So our business is very well positioned for the start of the year. And when you look at our hazardous waste activity, it's the same trend. So we continue to operate on trends, which you've seen over the last few quarters, which are buoyant for the group. Concerning in China, as I was saying during the publication of results, we had a good month of December. And then with COVID, the fact there was an evolution in the policy of the Chinese authorities, created a bit of movement in January. And January, February, have been in line with what we saw with what we saw during the previous were. We expect activity to pick up in China in March.

[indiscernible] I'm a journalist, and I've been following your company for the past 30 years, and those are claimed to be green. Having followed your conference this morning, I found that I hadn't worked for nothing that really these ideas are now embodied. And my question is for 2023, this will be the year of water. We know that there's a recurring drought Veolia has technology, which I believe are well advanced. And I would like to know whether those technologies around the world and not just in France, will enable us to increase revenues, but also to bring technologies to other countries.

So I mean I don't like '23 will be the water year. I think you're talking about the situation, depollution, decarbonization, I think have trends in all areas. Going back to water, I agree with you that there's -- before and after in France last summer. And especially, we've realized that water was a scarce resource, even in France. And so in other countries, it was the case for a while ago, but we discovered this in France. And so we gradually with lanes technologies and its world footprint, build a series of solutions, that means that we can contribute to this major challenge. It goes from the efficiency in the distribution of the water network that we mentioned with technology, with [indiscernible] that's technology, detect leaks, digital, AI, sensors and so on and also reusage. We're using wastewater in particular. And we have the technology and the know-how and the experience as well together in Spain and the Middle East, in the U.S. to be able to clean them more. And even in France. Now let me remind you the figures. So we have minus 1% that wastewater is reused in France, 15% in Spain and 85% in Israel, so we can do much more than that and very soon. And so obviously, I hope that it goes even faster on this, and we have what it takes. So we are ready. And this is one of the major challenges.

Thank you, Estelle. A question here in the front.

You -- twice, I believe you mentioned the PFAS, PFAS. What is the specificity of your technology in this domain given as well that there might be a potential prohibition. You talked about toxic waste, but maybe you could explain concretely about this. The permanent pollutants and how you can regenerate all of this?

Well, yes, you might not know what it is. You might not know what it is. So is parity residues as there was PCDs relos and PFAS that are produced. So this is what we call internal pollution. So I believe that we have quite a lot that exists already. And at the same time, we have innovations on which we are currently working to address this issue. And we also have experience in the United States because they are ahead of the game in terms of regulations and pollution in PSA. So -- and so these technologies starts with measuring up to treatment that is removing these pollutants in water, in the grounds and we this active carbon, there's resins, membranes, just to serve technical aspects of our technologies, and we innovate as well. We are currently investing in terms of research and development to improve the efficiency and finding right temperature, temperature for this type of pollution. But I won't go into too many technical details. So we can do quite a lot already. We have experienced in the United States, as I've just said. And innovation to come. I believe this is a great example. When I mentioned pollution, obviously, we talk a lot about decarbonation and scarcity, but pollution as well is a major challenge. And with this PFAS pollution is one example.

So the Market Day is also being followed online. And I've been told that there is a question for you by telephone. Go ahead.

First one is on the hazardous waste activity. Thank you for giving more detail concerning the revenue and EBITDA per business is very helpful. When I look at these numbers, I can see that the EBITDA margin on hazardous waste is quite similar to the 1 on solid waste. But you were talking about extra pricing power and extra barriers to entry on hazardous waste. I would have liked to know why the EBITDA margin is relatively similar. And my second question is concerning your goals for growth, you're talking about a 2-figure growth for years to come. Are you comfortable with the idea of being above EUR 3.5 billion in 2024. .

So I'm going to start with the last question, which is the simplest. Yes, we are comfortable because if you look at the results we have today, EUR 1.16 billion, and you keep climbing 10% by 10%, and you're looking for 40% crushing. It is EUR 1.5 million net result more in 2024, and we are comfortable with this trajectory. Now the second topic concerning EBITDA margin in our segment, hazardous and liquid waste. There are 2 primary activities. The first 1 is that has reduced waste. And we've indicated on the slide that our historic activity getting our activity in Europe where we have 14 treatment high temperature treatment lines on the European territory. And this is something that I explained has been very difficult or almost impossible for our competitors to reproduce that. Well, on that, our margin rate is much higher. It's almost 20% because we really have pricing power and our margin is very good there. We have a second activity, which is a liquid treatment. And if you remember, we purchased before the acquisition of SUEZ, the activities for liquid waste. So cleaning up of water treatment networks, which was called is to combine it with our activities and this activity structurally has less barriers to entry. And there, the margin ratio is more around 10%. So it's the combination of both that is in this segment. But our hazardous waste activity purely has a very high margin level, especially in Europe.

[indiscernible] that Claude just gave on 1 segment. It can be found as well in the other ones. So we have I was going to say the infrastructure and the bases that are very profitable and that cannot be replaced. So this is why we infrastructure in a certain number of countries, 3, 4 or 5, maybe per sector for type of activities, and also we have great levers for growth based on these pillars and these basis. And so regarding hazardous waste, for example, a very high growth in the United States that cannot be seen in the figures because we are currently building the plant in say East Asia, where we are building plants as well in Middle East as well. So I think it's rather significant in terms of our development model. So we have basis where we are the leaders with great profitability levels and great margins, but also leave us for growth based on this basis. To keep it simple, so hazardous waste, I mean, the progress you've seen in terms of turnover and margin, this is not the end of it. I was going to say it's the beginning and it's going to carry on for several years.

So we will have further questions from our online platform. Let me take a few of these. So these are questions [indiscernible] Let me sort through them. Just give me a second. So a question from Antoine the makeup of organic growth? How are you thinking about the different moving parts with talking pricing, volumes, recycling commerce, et cetera. And what about the breakdown of organic growth in the different activities where we see different growth trends in different segments?

I guess it's -- I can start, but I want Claude -- I guess it's really like I've tried to explain a combination of both. Usually, the the very strong foothold grow less rapidly, plus we have rapid growth in, say, other geographies or in adjacent to those strong core. And that's a very good example. So where have we grown our business in 2022? Pretty much everywhere in terms of segments. All our segments have seen growth as was shown by Claude, both in volume and in price or indexation. So I guess everywhere, when you look at the results, we've been announcing in 2022. So there is not a big plus and some minus somewhere. No, there is just plus everywhere across all of ours activities. And in terms of geographies, the -- and in terms of the -- what has been growing the fastest, probably energy has been the strong -- the fastest growing in 2022. And I have explained earlier on, now expected to be still the case in '23, '24, '25 onwards, I would say, irrespective of the ups and downs of the potential any price just because the demand for local decarbonizing energy is here to stay. And in terms of geographies, fastest growing in 2022 and probably again in '23 onwards, the Middle East and the U.S., really the 2 fastest-growing geographies in the group.

Another question that is coming remotely. Palo would like to know if plastic recycling will still be at the heart of your '24, '27 strategic program.

I was smiling because we've presented to hours today, but you want the plan from in a year's time that I explained in his introduction today, we had to present you the new group as it stands today. And in a year, we're going to be probably having the same type of meeting to present you the next strategic plan. But I'm smiling because it's fair to say that we've overachieved already our objective of existing strategic plan. So we are already thinking and you understood by the various like clues we gave you this morning. So there will probably be a lot of innovation and a lot of acceleration probably the key words in many respects, in some of our activities of development. And energy, local decomponizing energy will be probably in the mix quite strongly.

And what we can say about plastic, we continue to invest in plastic recycling. And we have -- we are under commissioning of one large facility in Japan because it's quite important topic in Japan those days. And we are also investing in a new one. So we'll be able to recycle PT and PhD in Japan and polypropylene as well. So we continue to invest in that field. And so you will see some new capacity of Veolia in the coming months.

And I guess to expand on this plastic example, so plastic will go on not for 10 years in 100 new plants, of course, but we still have like some activities which are under development, which will commissioned as Claude said. But progressively, some of the -- there will be as well new loops of circular things. And Catherine highlighted the recycling of electric car batteries. So probably, there will be some of it in the next plan. But I've mentioned many opportunities and investment and new plants and so on and so forth. I just wanted to reinforce one message, which is we still have a very big rigor on our balance sheet in Veolia. So the opportunities are many, but we're selecting them with the utmost rigor. Claude reiterated the criteria, the work plus 4% and the payback and all the rest of it. So it's time we're only picking the opportunities which creates the most value for the customer. And if less will leave all our ability to deleverage the group to just deleverage the group. And at time, we have choices, okay, do we do that or do we invest in a new fast-growing activity. That's typically the type of arbitrage we do regularly with close. So the utmost rigor is what underlines all this. But I would agree, we have a lot of opportunities.

I'm surprised you have so much to say about a question that is 1 year too early. Thank you so much.

No. I guess I was told by my British colleagues that French tend to have a very long answer to a very short question. So maybe it's maybe [indiscernible] as well.

Okay. We have time for one last question [indiscernible] get here in the room or one that was sent online. No person, very well. One question from the platform. Another question on PFAS. We've already answered that. One last question. I would like to know if your assets can be leveraged in the waste segment to support the transition to green hydrogen.

The answer is yes, but not only our waste assets, which produce energy, which is green energy, which can help produce green hydrogen, but is as well a wastewater treatment plants as well as our water technology activities because to produce hydrogen, you need usually electrolysis, you say that in English, where we have some technologies to help. So this is probably not super short term. So this is more in the innovation arm rather than things you will see in the figures very short term because as I said, we have to pick our battles to be able to be very, very rigorous in our balance sheet as well.

Thank you so much. Thank you very much for having been here with us today for the Capital Market Day at Veolia. For those of you who are here in person, you have a buffet waiting for you. And for those online, thank you very much, and see you soon.