Veolia Environnement SA (VIE) Earnings Call Transcript & Summary

[Presentation]

Good morning, ladies and gentlemen. Welcome to this Veolia Deep Dive. Thank you for joining us here live in New York. This event is designed to give you a better understanding of Veolia's unique positioning, both globally and also here in the U.S. where the Group has a long-standing presence in the regulated water and hazardous waste business. A quick look at this morning's program. I don't know if it's going to appear on screen. We are going to start with a Group overview, then a breakdown of Veolia's market presence in the U.S. A business overview of the 3 -- the Group's 3 main activities in the U.S. That's Municipal Water, Water Technologies and Hazardous Waste Management. And finally, we're going to have a focus specifically on PFAS and PFAS that are currently the subject of specific regulation here in the U.S. Again, welcome whether you be here in person or remotely, it's a pleasure to have you with us. Please join me in giving a warm welcome to Veolia's Chief Executive Officer, Estelle Brachlianoff.

Hello, and welcome to this event, whether you're physically here in this room or you're remotely. So warm welcome and very happy to see so many faces here today. It's our second deep dive after the one we've done in London about local energy a few weeks ago. Those deep dives are aimed at taking a little bit more time in what matters for us in our strategic program, GreenUp. So the growth boosters and the pillar of our strategy. So we started with local energy and we are in the U.S. today. So why the U.S. why New York? I'm here to share with the team of Veolia in the U.S. to share conviction and ambition. Conviction is clear, Veolia has a big role to play in this country, an enormous role. I would say the country is asking for more Veolia in a way. And I will explain that, of course, this morning. The second one is a large ambition for us in this country. You will see, but in a nutshell, we want to double our size by 2030, and we already are very significant and very good with more than 5 billion today. So we've already more than doubled our size in the last 5 years. I think that's quite impressive, but you've understood that we won't stop here. And why is that so? Why is the U.S. part of the core element of our growth in Veolia for the years to come? I guess I can tell you and we will tell you about the megatrends, which support this growth, will tell you about legislation. But I guess, as importantly and, more importantly, the needs, the needs of the population and the needs of the industry or customers alike for all our services. Why do I say all our services? Because Veolia is about solutions. It's about the ecology of solutions. We are a solutions provider to help our customers, be it city or industries, to tackle health issues linked with the environment or to help them deal with environmental sustainability and growth of the industry, but combining the 2 together. We are a world leader of environmental services. We are already very strong in the U.S. So you understand we have all the magic recipes to make that even more success and to go from good to great. And I must say on a personal basis, it's probably the country, apart from the -- where we execute, where I spend the most time and you've understood that I won't stop here and I'm here to see some of you many, many times in the future. I will start with a few words of Veolia, globally, Veolia in the U.S., and then I will let the floor to various heads of the various businesses here in this country. I think it's better that they speak about those business rather than I do. So first things first, Veolia globally. Some of you in this room know that by heart, others maybe not so much. So I've taken the opportunity to, in a snapshot, give you some elements about Veolia. So Veolia is a leader of environmental services active in wastewater and energy across the globe. Turnover around $50 billion now. I said across the globe, 44 countries on the 5 continents. But in each country, we are always in the top 3 of our industry in that country. So we're not only global, we are very good in the place we operate. This global reach helps us to be very good at innovation. We have 14 R&D centers across the globe. And we've just gone through a $28 billion successful merger with Suez, which was our traditional historical competitor. 218,000 employees. They are the first shareholder of our Group, and a very engaged, skilled and proud, I must say, workforce. So what is our market in a nutshell? That's a $2.7 trillion market which is about decarbonization, decontamination and resource regeneration. And the megatrends supporting that, of course, already you would think about mitigation of climate change, yes. But adaptation as well. In the probably less, I guess, natural which comes to mind, health. I've mentioned it already, health and the environment, and they have a lot of links. As well as water scarcity, which, as you know, is one of the first consequence of global warming and climate change. This is water. This is where it happens. And obviously, some megatrend risk probably was more recent in happening and rising, strategic independence or reshoring. And of course, it goes with all the geopolitical tension. I won't elaborate too much, but I'm sure you've understood what I'm thinking about. So when we see a customer of Veolia, municipal customer, an industrial customer, what are the typical question they ask us? For municipal customer is to have affordable, efficient essential services. How do you make me ensure that it's affordable, that we have the best value from them and we have security of supply whatever happens? For an industrial customer, it's usually more a license to operate. They want to be able to build their plants, to secure their supply chain. And what Veolia does is to bring all the different elements of the jigsaw, the wastewater and energy part of the business we have, to put them together to offer a unique solution in a holistic approach to those customers. You've understood that I really do believe, and show that with the other 13,000 employees of Veolia, that we are quite unique. Unique positioning and key differentiators for success. Global reach in this industry, it's very, very specific. We have scale. But at the same time, we have a local hunkering. We are embedded in the communities we serve across the globe. And that makes us very powerful and sustainable. Second one will be the combination. And as I said, the ability to put all the pieces of the jigsaw together to offer a solution to a customer in a holistic approach. Innovation, which goes with the scale. As well as operational excellence. We are very good at what we do in the best, and we have an excellent track record of delivering. As well as, and I must insist on that, very skilled and engaged team. Now a few words about our strategic program, GreenUp, which we've presented to you a few weeks ago. GreenUp, starting with -- why the word GreenUp. It's because the strategy here is not to do green. It's to be greening, if you want. To have the trajectories go down, the CO2 trajectory go down, the water consumption go down, the pollutants go down, and to help our customer to have those trajectories improve. That's why we've called the strategic program Green Up. So it's about standing up and speeding up the solutions across the globe that we already have. In numbers, it means that we measure success amongst basically 2 sets of KPIs [indiscernible] ones for customers. So it's -- I'm talking here about CO2 erased, about cubic meter or gallons of water that we save, about pollutant that we remove from the rivers or from the seas. And you can see the figure here. As well as, of course, financial results. Financial results, meaning typically the headline will be 10% CAGR of net results in the next few years. And for those of you who wonder what on hell considers 10 million tons or 18 million tons of -- sorry, 10 million tons of pollutant erased, what is it? It seems big, but how big? Allow me to have just a little bit of a comparison. This is the equivalent of 15x the BP Deepwater Horizon spillage that we suppressed, but annually. I think it gives you an idea of the scale of what's behind the number you see on that screen. That was for Veolia globally. Now of course, I just told you as an introduction, we are already big in the U.S. with a large ambition. So let's come to the U.S. Veolia is already very, very present in the U.S., and it's already a key market for us. It's 11% of our turnover with $5.4 billion in revenue. And the equivalent proportion in EBITDA roughly. Mainly in water technologies, water operation and hazardous waste. As I just said a minute ago, although we are global, we are very much embedded at the same time, anchored in this country, and to serve the community we operate in. Just to give you -- so it's a map -- it's a simplified map. It's only where you have kind of HQ people in this country or R&D centers. We have 4 R&D centers, research and development, sorry, in the U.S. But of course, if you look at the plants, you will have a map covered with little dots, we have 100 industrial sites with people we employ and we create jobs all across the country, West Coast to East Coast really. And I'm very proud to say that we employ in this country 12,000 employees, in the U.S. And we've been awarded the top ranked on [ environmental ] company by the Engineering News Record recently in the U.S. So I talked a few minutes ago about track record. First things first, size, because size matters. We've more than doubled our size in the last 5 years in the U.S. Actually, it's times 2.6, almost triple our size. And you've understood that the arrow doesn't stop in 2023 we are really accelerating this growth. And the first date on the left of the slide is because, actually, we found a few contracts started in this country 150 years ago. So we've been here for a long time. We are committed to this country, hunkered in this country, with a big ambition. To go into the various business we have and we enjoy, I must say, in the U.S. 4 type of activities, which are summarized on this slide, the water operations, so either regulated or nonregulated and more municipal. Water technologies, hazardous waste, and an emerging business for us, which is the local decarbonizing energy as well. Each time, we are in the top 3 in the U.S., apart from being, of course, globally the leader. Even in the U.S., we are in the top players of this industry. And although I've just presented on this slide, the 4 business as if they were totally separate, you will have understood from this morning that they are not. We really do a lot of things at the construction of those various businesses and combining those various businesses to offer solutions to our customers. Megatrends, how do they apply specifically to the U.S.? I would speak specifically 3 of them. So I said, the market globally is a $2.7 trillion market. The U.S. will be 25% of that basically, of which it's supported and is growing very fast, thanks to 3 very, very powerful trends. The first one will be more reshoring and strategic independence. The second one would be more pollution driven and health and the environment. And the third one would be more water supply and water scarcity. Those are the 3 megatrends I want to explore a little bit more in detail now. Starting with reshoring or strategic autonomy. I don't have to make a long story about, how do you say, geopolitical tension is usually the traditional word used to speak about that. It means that across the globe and in the U.S. in particular, there is a big ambition in this country of actually be independent for strategic industries. And therefore, all the trend of reshoring some strategic industries, or friend-shoring at some times. And I'm thinking here of the major investments which are underway linked with the CHIPS Act of course, the IRA but many other like the Infrastructure Plan and so on and so forth. All combined, it's a massive amount of money. And when you travel in this country, you see, I would say, plants, I was about to say, popping up pretty much everywhere when you drive. And that's exactly because of this trend here. I'm talking about -- so what are the strategic industries I'm thinking of? Semiconductor, that's the CHIPS Act. Gigafactories, linked, of course, with the IRA as I said. Pharmaceutical as well. We discovered -- or we rediscovered during COVID that we don't want to be dependent on importing some very important component from across the globe. As well as, say, lithium, for instance, lithium mining or refining, which is so critical for the energy transition, together with cobalt and nickel. And the good news is all the industries I've just mentioned, they need us. They need Veolia services. I would say they desperately need those type of services. And not because they would like to, sorry, to save the planet, just because it's a license to operate for them. Without those, they just cannot operate their plants. I'm thinking here about ultrapure water, about water supply, wastewater treatment. I'm thinking about hazardous waste, Ultrapure water, a chips factory desperately needs ultrapure water because it's so, so uniquely, it's at the size of a micron or even a nano or something that you cannot afford to have a micro pollutant in the water you use. So that's exactly why you need ultrapure water, and even more ultra every single year, just to give you an example. Hazardous waste goes with pharma a lot. The pharmaceutical companies, when we were in the middle of the COVID, they called us and said, "I hope you don't intend to shut down your plant of hazardous waste because otherwise I would have to shut down mine." That's how intertwined we are with those guys. So license to operate, I said. And just to mention a figure again, and I have it in gallon, so that's why I have to look at my little paper here because it's fair to say that I know my numbers more in liters than in gallon usually. To extract 1 million tons of lithium from the mine, you need 300,000 gallons of water. This is the equivalent of the consumption of 500 people, something like that in the U.S. So just for 1 ton of lithium. So you can imagine how important our services are for all the people I've just mentioned or all the industries I've just mentioned. Second big trend supporting our growth in the U.S., I would say this is the water scarcity in a way and the water need. You have here the map of the water scarcity in the U.S. I don't have to do that in much detail. Dark red is not exactly a great news. But you can see that it goes a lot more like across the country than you and I think maybe if I had told you a minute ago to draw the same map. And if you take this map and put it together with the map I've just shown you on the industries, which are reshoring or the population growth, unfortunately, you have some places where they match, which means that, at times, if you're not careful, you can have almost a competition on water between population and the industry. Again, good news is we have some solutions to avoid this type of competition. I'm thinking here about water reuse and recycling -- wastewater reuse and recycling, which we do a lot in the West Coast and in many other places we have developed; about leakage reduction in the distribution of the water network where we have still a great, great, great amount of progress that we can make in this country. Third trend, health. I guess we're talking here about what we call emerging pollutants, although they're not really emerging. It's just that science advance every single year. And we discovered in some of those pollutants may have a harmful impact on everybody's health. I'm thinking here typically about PFAS, which is one of those pollutants, exactly in the same way as decades ago, we've had the discussion, and the good news is we've managed to treat it, about PCB, we've had the one about dioxin. Now it's PFAS. And we're going to do exactly the same as we've done for the others, we're going to solve the problem. So you may have seen that PFAS, the EPA last week announced some vision and actually some regulation or target, sorry, for the water, the drinking water and PFAS. But there is not only something about the drinking water in PFAS. You have PFAS in every single pretty much airport or air base or a lot of the refineries. They have some PFAS which are in the soil kind of combined here. And why is that so? Because when you use the fire retardant in the foam when you're extinguishing a fire, there is PFAS in it. So when you've trained for decades to be able to extinguish fire, it kind of accumulates in those types of sites. Again, here, the solution, how does it look like? It looks like laboratory analysis, then treatments as in, first things first, to combine them and to have a more -- sorry -- so filtration, say, through membrane or through resins typically or activated carbon, and then something which looks like a real treatment, typically a high-temperature incinerator. So the good news is Veolia has the end-to-end solution from every single of the steps of the way I've just mentioned combining our different business. An estimation which is on the market is that it could be a $200 billion market in the U.S. alone. So it gives you an idea of the size. Last driver for growth, and not the least, I must say, the population. And we've done a polling survey in 26 countries. And of course, we've done it in the U.S. in the same way. I said we actually [indiscernible] a well-known third party has done it for us on the general public and the population. And what this survey shows is very interesting, it says that the American people are ready for change. The majority is ready for change. Ready for change, ready to pay a little bit more to get access to non-polluted drinking water, for instance, ready to take action and change eventually a little bit of their lifestyle if it's efficient, not for the words, I guess, but for a real positive effect. And I think that's a very impactful and important supporting trends for all of us. The population is asking for the solution we are developing and deploying at Veolia. As said, like Veolia is uniquely placed. I've pronounced the word combination quite a few times already because we are -- again, we have a holistic approach oriented to find solution for our customers. Using the worldwide expertise PFAS, we are in advance in a way, regulation-wise, in the U.S., and we are, as we speak, exporting these competencies to Europe. When I talked a minute ago water -- wastewater reuse, it's the opposite way around. And we're importing here in this country, everything we've developed across the globe, including in Europe or in other geographies, including the Middle East. So I think that's an important part of the jigsaw. Scale and innovation, we have more than 4000 patents in Veolia, a wonderful portfolio of customer, which helps us cross-sell a customer which already trusts us for some type of business, we are selling another type of business because they usually have a various type of needs and combination, of course, of the various types of business wastewater and energy. And the example of PFAS that was very clear a minute ago. All that leading to profitable growth. So how do we create value for our shareholders? Three main levers really, which are summarized on this slide. The first one is really like organic growth, then we have efficiencies, and then like capital allocation and balance sheet. So starting with organic growth, top line growth. Top line growth, of course, in the U.S., and all the figures on this slide are U.S. specific, so it's not worldwide, globally, it's really for the U.S. And you will see the translation of what I've just said. So top line growth in the U.S. will be a lot about what we do in water, water technologies, water operation, we'll see that in a minute, as well as new pollutants and hazardous waste. So that's what feeds the top line growth in the U.S. on top of a very happy set of customers because, of course, winning new customers, if you lose the one you already have, is no worse. So I'm super proud of the performance we have in the Net Promoter Score, which is at 49%, which for a B2B company is considered outstanding, and it is our customers are happy with us, happy to stay with us and even to expand the services we do for them, which leads to more than 90% of renewal rate of our contracts, which are up for renewal regularly, as you would expect, but they good tenants because they like us. All that leading to, on average for the next few years, of course, irrespective of inflation, 6% organic revenue per year on average. Second pillar would be operational excellence and efficiency to help provide our customers the best value for money. And we do that with a lever we have for the last years with [indiscernible], I must say, which is the efficiency plan. In the U.S., we're talking about $40 million a year of cost cutting, basically. And in addition to that, we have the benefit of the Suez merger with cost synergies. We've delivered already kind of a third. We have 2/3 in the U.S., I mean, to deliver. So an extra $70 million on top of the $40 million we've already delivered on cost synergies. That's the second pillar. Capital allocation is the third. And I think it's super important. We have the ability, and we are constantly reviewing our portfolio. What is best in Veolia whether what would be best elsewhere or what is elsewhere and should be best in Veolia. And we are constantly reviewing that. With always nonnegotiable, which is the type of IRR, of course, that we expect from our investment, and that's a key set of criteria on the WACC and ROCE. I would be ready to explain to that in a minute. But of course, it has to be value creative for us. So we sell and we buy regularly everywhere. So just to give you an idea of the type of things we are doing an acquisition in the U.S. We have a set of M&A in hazardous waste tuck-ins and regulated water tuck-ins. We've done one in the fall, Bob, who is U.S. IT, for instance, and we have others in the pipe, and same applies, [ Karine ], to the water regulated business, just to give you an idea. On the disposal front, advanced disposal -- Advanced Solutions, sorry, which we disposed a year ago, it was the maintenance of water tank. It had better value elsewhere than in Veolia. It's not core and strategic for us. So that's a typical good example. We dispose of strategic or mature assets when there is no value creation anymore because we've achieved pretty much everything we could. All this leading to top line growth, as I said, as well as a 10% CAGR of net results and 200 basis points improvement in ROCE in the next strategic plan, or actually the existing strategic plan, GreenUp. So high ambition in the U.S. I think you've understood that. Based on strong local foundations and already a very successful and powerful business and a powerful engine for growth. Ambition, we want to double our size by 2030 and to do basically half of that by 2027, which is the end date of our existing strategic plan GreenUp. Value creation for our shareholders, obviously, as I mentioned, in terms of ROCE and CAGR for net results. But we measure success as well on, as I said, like the number of tons of pollutants we destroy as well as the CO2 we erase or the cubic meters of water we save. And the figure you have on this slide show exactly that for the U.S. alone. And again, 32 billion gallons of water saved in the U.S. For those who wonder how big this is, this is the equivalent of the total consumption of San Francisco, gives you an idea, per annum that we'll save, thanks to our services in the U.S. So large ambition. And as I said, GreenUp is about scaling up and speeding up the solution as well, as a very methodological approach. We pick our battle. We cannot be good everywhere in the world. But the U.S. is a core one for us, as I just said. We're choosing our battle where they are the most transformative. And I really truly believe that in the U.S., we can be transformative for this country. And why is that so? Because industries and population like, they need Veolia services in the U.S. Thank you. And I'm going to let the floor now to the 3 colleagues.

Thank you so much, Estelle. Absolutely. Please come join me, let's give a round of applause. I'm going to pass over to your regional heads to come and give us a breakdown of each of your 3 main activities here in the U.S. And we are going to start with Karine Rouge, your Head of Water Operations.

Hello, everyone. Good morning. And I have to say I'm particularly happy to be with you this morning because I have been in the water industry now in this country for close to 10 years, and there is something truly unique happening. There's a momentum which we haven't known for the past 10, maybe 20 years. And Veolia is -- if you just retain one thing out of my part of the presentation, it really should be that we are uniquely positioned. We've been at the heart of that once-in-a-generation momentum. So Estelle went through this. You know that we are a global water operations leader. And if I'm very honest, I do not think that just a few years ago that would have mattered so much for the U.S. But today, all the conversations that we are having daily with the communities we serve are real global themes. These are the ones that you just heard about. It's about micropollutants, it's what are we use to drive and to provide solutions for water scarcity. It's also a very renewed lens and need on operational efficiencies to drive affordability within the communities we serve. And so our ability to connect the dots between the various geographies in which we operate, that's a real acceleration factor for our growth here in the U.S. So just to give you a sense of our scale, we serve 27 million Americans. That's through water services, wastewater, but also biosolids management. That means we are the largest private water player by population served. We are present from coast to coast and north to south in over 40 states. And that gives us a very unique lens on the overall water equation in this country. But in addition to our scale, we're also kind of a unique player because we have very different touch points in these communities. We are both an owner of assets when we are a regulated utility. We are also a service provider to municipalities. So we are able to bring them our expertise as an owner when we give them services. We are also benefiting from the largest installed base of technologies and equipments across the country for water treatment. And then last, and that's really a new conversation that we are driving, but also our customers are really asking, because we've got energy expertise and now haz waste, which wasn't so much part of the water conversations until micropollutants became a big focus, that ability to really look at things holistically is a true differentiator. So now if I go a little bit deeper around how we operate, the type of business models in which we operate, there are really 2 of them. The first one is when we provide services to municipalities. These are long-term contracts that can be water, wastewater or biosolids management. Here, we are a player of scale clearly in the market. But what I think is interesting is a bit tied to what I was describing earlier in terms of momentum, is this market is deeply changing. We are benefiting from a portfolio of long-term, kind of highly -- with high renewal rates, I mean, historical relationships. But the conversations we're having right now with the same customers we've been serving for years are radically different. And the best example of that is we'll be announcing very shortly the renewal of our contract in New Orleans. We've been serving New Orleans now for close to 30 years. And what I can tell you is that this is not a renewal as is. This is a totally different partnership where we are bringing themes like decarbonization, energy, community building within a wastewater service contract. Our second way of operating as a municipal water business is as a regulated utility. For those of you who are less familiar with the regulated model in the U.S., we're basically owner of assets. And then we are regulated, especially when we set water rates by an economic regulator at the state level. Because we own assets, we invest in them. And there's really something which is not exactly totally new over the past kind of couple of years but which is radically increasing, is we are at the moment where regulations here in the country are driving a phenomenal high wave of investment. And that means that we are growing our investments in our assets. But interestingly, that's why the global lens kind of gives us a slightly different view on that question. We are acutely aware that when a country goes for such a wave of investment, being very proactive around the impact that, that will have around the durability of water rates is absolutely essential. So not only we need to grow our investments, but we also need to do it in a way where we lower as much as we can the impact on the final customer. In financial terms, we have a regulated asset base of $3.4 billion on which we've been earning a consistent return of equity, over 10%. And I can say that we are finalizing a wave of rate cases, which is when we set and negotiate water rates with our economic regulators on all our major states. And I'm proud to say that, because of the trust and the credibility we built, we've been in line with both historical performance but also expectations. So now if we look forward, you -- and look at the growth drivers. You heard a lot about water quality and water scarcity. I just have to add that the 2 -- a lot of the times, the 2 actually interconnect. And that's driving very -- much more complex discussions with our customers. I will add one theme that I think is really important and that because that's one that a lot of us in the water industry for years have been waiting for and talking about, but not really seeing it. You might know that the water business or the water kind of equation in the U.S. is highly fragmented. We are talking thousands of water and wastewater systems across the country. And it's also highly publicly managed, meaning managed by municipalities directly. But what's happening right now is, because of new regulations, and also infrastructure, frankly, getting older across the country, the need for sophistication in the type of solutions and discussions is really increasing. And that's happening at a time where we literally are seeing a whole generation of water workforce going into retirement. And when I say workforce, I mean both people in the plants and in the field, but also utility leadership. And that's really important because the ability to think forward, think long-term, think climate resilience for your communities, I mean, the people who have, right now, the deep knowledge of their assets are literally leaving and won't be able to be in these discussions. And that's driving a totally different intensity and [indiscernible] around consolidation and outsourcing discussions. So now to finish, I want to give you 3 illustrations of a few themes that we've been discussing. The first one is the value of operational efficiency. The second is an example of what are we talking about when we talk about water reuse in the U.S. And then we'll finish by a global theme that we are really importing in a way in the U.S. around the change in paradigm on wastewater. So the first one, around operational efficiencies. This example here that's in New Jersey, for those of you who will join us at the site visits, you'll be at the heart of our municipal water operations. We are a regulated utility. We serve also a lot of municipalities. Last year, we installed 3,000 sensors in our network. These sensors were able to detect over 200 leaks, which was a perfect guidance for us on the places where we needed to deploy capital and change in priority the network. Why does that matter? That matters because when we enter into a rate case or a negotiated discussion with our economic regulator to set water rates going forward, with examples like that, we are able to demonstrate that we are taking affordability as a priority and to ensure that not only we're investing and we are improving the network, but we are doing it in a way that as efficient as possible. And we are doing that because all of our digital sensors based expertise is things that we've deployed in all the other geographies where we're doing municipal water operations. I'm also proud to say that this is the type of things that have earned us the trust of the State of New Jersey, 2 years in a row, we won the Governor's Award for Environmental Stewardship. This is a state we've been present in for 150 years. So it's really at the core of who we are. The second example, I'm going to be short because we have a short video to show you that's going to talk better than I would ever will. But the only thing I'm going to ask you when you watch that movie is to think that, that facility, here, we're totally moving on the western side of the U.S., so West Basin in California. It is state of the heart. It's very complex. But the same thinking that led to the creation of West Basin is something that we can take at scale across every single community in the U.S. [Presentation]

Sort of thing is going to happen. Not exactly the right video that we were aiming for. Let's queue it again, and let's do it right this time. [Presentation]

Second time is a charm. Just let me know when you're ready. Here we go. [Presentation]

I couldn't have done it as good as the images. Perfect. My last example is around wastewater. All over the world, in France, in Spain, in Chile and Hungary, we've been shifting the dialogue around wastewater from a linear treatment. You take polluted water, you've got a plant, and then the clean water at the end, to a circular discussion, where wastewater plants become places where you can produce energy, produce fertilizers. They can be like biodiversity islands. I mean, really resources for communities. On Monday will be Earth Day. I will be in Milwaukee, and we will jointly announce, the Mayor of Milwaukee and myself, at the Great Lakes, the fact that we are taking a historical partnership, another one, with the city of Milwaukee, and turning this into an eco-factory. We have many more discussions ongoing, and this is a typical example of the conjunction of all our businesses as well as the value of our global footprint. So thank you very much, and I look forward to your questions. Thanks.

Thank you so much, Karine. And I'll now pass over to the Head of Water Technologies, Tim Huang.

Thank you. Good morning, everybody. It is my pleasure today to introduce to you our Water Technology business. So first of all, I joined the Water Technology team about almost 20 years ago. I'm very proud to be able to share with you what we do as a team, especially focusing on our U.S. markets today. First of all, we are a global business, #1 in the world. We have the world's most comprehensive, most broad products and technology. Just to name a few. We have our chemical treatment program. We have our analytical instruments. We have our membranes. We have filter technology. We have 0 liquid discharge technology. Whole spectrum, #1 in the world. This is backed up by our innovation. I should run the slides. This is backed up by our innovation. We have 4,400 patents, which speaks for itself. We have advanced manufacturing, our own advanced digital smart factories, around the globe and here in the United States. For example, we have our analytical instrument factory in Boulder, Colorado. We make RO membranes, NF membranes in Minnetonka. We have our chemical programs that's made in Texas as well. We have a super strong team, very passionate, just like me. Very capable with broad spectrum of expertise. Across industries, across different applications, we're able to deliver to our customers to solve our customers' water and process challenges. This is who we are as a global business. But here, I'm really to talk about the U.S. business today, but I want to really brag a little bit about our global business as well. So for our U.S. business, we are a significant part of the Veolia Water Technologies. It represents 32% of our revenue in 2023. And by coincidence, we are also 32% of the Veolia North America revenue profile. So this map, you can see our customers are largely industrial-based. They are throughout the country. This map really shows you our presence in this country. We're coast to coast, with our manufacturing facilities, our R&D facilities, as well as our service centers. The key is for us to be close to our customers, to understand their needs, to continue to innovate, to be able to deliver our products, our solutions to them in a speedy manner. We are a trusted partner for our customers in the U.S. In 2023, we were able to achieve a record bookings in 2023. That really helps our continued success. Let me talk a little bit about what we do in the U.S. with our business model. We really have 4 major business activities that we do in the U.S. This is a reflection of our delivery model. It's also a reflection of our agility in this market because, as I mentioned before, we service many different industries. And in each industry, there's many different needs, whether it's processed water, whether it's wastewater, whether utility treatment. So these delivery models and our business activity really give us the agility and flexibility for us to be able to deliver what our customer needs. Let me go in deeper on that. Firstly, I'd like to introduce a little bit of our chemical solutions and monitoring. So this is one of our critical business that we have. It's a recurring revenue business, long-term recurring revenue business that we have. We work very closely with our customers in their sites. We leverage our expertise using our chemical programs as well as our digital platform with analytics. What we do in our customer sites is there to protect their assets, to drive efficiency, and help them to save resources. Let me give you an example. In many heavy industries in refining, in petrochemical, in steel factories, there's many cooling systems. We have an expert team, along with our digital solution and our chemical program, we're able to provide the services to our customers on their sites to provide protection for their asset against corrosion, against scaling. And at the same time, we're able to help them to reduce the water usage. This is what we do with our chemical solutions and monitoring, and we are very close to our customer at their sites. The other offering that I'd like to share with you is our technology and products. As I said before, we have the world's biggest portfolio. We have the most innovative products and technology. There's many needs from our customers. For this business activity, I really want to use the word to describe is we provide the engines or the CPU, for example, for the solution, okay, for our customers to develop their own solution. Just to give you an example, we have our analytical instruments where it monitors the water quality for our microelectronics industry customers. It monitors the water quality for our pharmaceutical industry customers. We provide the product to those customers, as well as our membrane that's made in our Minnetonka plant we supply the RO membranes, nanofiltration membranes to our customers so they can use it in their solution, in processed water or wastewater reuse. This is what we do in the technology and products. With this business activity, we're able to focus on our core and continue to invest in our innovation, drive that technology advancement with this activity. Of course, our customer has many different needs. Some of our customers would like to have a trusted partner to provide the whole solution. This is where our engineering procurement business comes in -- the projects business comes in. We have a dedicated, we have a very super capable engineering team with a lot of expertise. We're able to integrate all the technology that Veolia Water Technology has, as well as other technologies, to integrate it together for our customers to deliver a complete solution to them. So in this model, we only do the engineering. We will engineer the system for our customer and supply the equipment to them. What are the benefits? I think our customer gets one-stop shop. They're able to get the solution that they want. For us, we're able to demonstrate our abilities. And with this business, it also help us with our recurring business in the future because it creates installed base for us for aftermarket services. It also creates installed base for replacement for our components, for our membranes, for filters. So it's a super nice business, and it's a growth engine for us, help us to grow our top line in this market. And lastly, as we service our customer, our customer always have different needs. In some situations, our customers will need solutions very quickly. They need -- they might have a situation where we need to deploy our technology, deploy our services very quickly, very efficiently so they can get up to speed and run. We have the largest mobile fleet assets in the U.S., with over 1,200 assets. And these assets are with different types of technology, with resin exchange, filters, membranes, wastewater treatment. So we're able to put all this together very quickly. Let me just give you an example. For example, if one of our customers is building a brand-new facility for their operations. And part of their operation, they will definitely need the processed water as well as the wastewater to help them to run. But sometimes doing construction, they might run into issues on starting up their processed water or starting up their wastewater. And sometimes, actually, for wastewater treatment, you need to actually run your factory first before you have wastewater, to start your wastewater treatment. So this is where our service -- integrated service business comes in. We're able to bridge that. We're able to deploy our mobile assets very, very quickly, to help them to start their operations efficiently, right away, and we're able to bridge that, until their system fully gets onboard. And of course, with this capability, we're also able to leverage these assets to actually deploy at speed to help our customers to be able to build their operations very efficiently. And of course, part of this is for Veolia Water Technologies is a long recurring revenue. We provide the technical service afterwards. So as you can see, we have a very balanced, robust portfolio, okay? It's a mixture of long-term recurring revenue, along with some revenue booster with our engineering procurement projects business. Our business is a very low capital-intensive business. We invest on high-value assets like our mobile assets and our manufacturing capacity. So we're able to deliver double-digit EBITDA margin for our stakeholders. And lastly, I do want to say, with all this, we are the only one in this market, the only player in this market that has all these tools in the toolbox. We're the only one that are able to deliver the whole integrated solution throughout the value chain for our customer. So for the future, what's the future? I think our CEO Estelle already talked about the growth trend and the booster here. So we are -- we have also developed 4 priorities. And it's illustrated with recent success. All these are very aligned to what Estelle has mentioned about the growth in the U.S. First one, it's micropollutant removal from drinking water. I think the regulation is here. We are very uniquely positioned with our proprietary membrane technology, with our mobile assets. Of course, along working with our colleagues, as Karine has already presented in water operations, we're able to solve this problem. This is also demonstrated with the case that we have in New Jersey where we deploy one of our mobile assets to remove PFAS. Second one, water scarcity. The video talks about that, the previous video talks about that. Wastewater advanced biological treatment and reuse is going to be a key driver in the market. For Veolia Water Technologies, we're the world leader in membrane bioreactor technology using our leading ultrafiltration membranes. We have many, many references in this country, as we illustrated here in this page, references in California leveraging our LEAP MBR technology for advanced wastewater treatment as well as reuse. Lithium, recovery of strategic metals and salts. Estelle also mentioned, to produce lithium, there's a lot of requirement on water. This is also where we also can come in. We have great technology in the space. Our HPD thermal evaporation and crystallization technology is a world leader in the space, on lithium extraction, we have world-leading nanofiltration membrane to help with the efficiencies of this extraction to reduce the water usage. Lastly, industrial process and ultrapure water. There's a lot of onshoring that's going on with microelectronic industry. We have a spectrum offering in this industry with our analytical instruments we're monitoring. We have capability delivering ultrapure water systems as well as wastewater treatment systems in the space. And of course, we service other industries like food and beverage, as highlighted here with Buffalo Trace Distillery providing wastewater treatment, and also pharmaceutical industry as well. So we fully believe with these priorities, we are very well positioned -- very well uniquely positioned in the U.S. for continued growth. So lastly, I just want to share our ambition a little bit. The drivers are all there with water scarcity, regulation with all the industrial growth that's happening here. We're very confident that we're able to build upon what we have already done, with $1.7 billion revenue in 2023, we're confident that we can build upon that and continue to grow at a high single-digit CAGR over the next few years. So I want to thank you so much for your time for listening to me. Just a little bit of plug about Veolia Water Technologies. We're a global company of $5.3 billion. We will be highlighting this business in the coming fall, and stay tuned. Thank you very much.

Thank you, Tim. Yes. And finally, we're going to hear from the Head of Hazardous Waste, Bob Cappadona.

Thank you very much all. I like the trailer on the Arkansas video. We'll get to that in a moment. More importantly, my mom would be proud that I'm on stage with JFK, Neil Armstrong. My family would be proud of me that I'm on stage with Leonardo DiCaprio. So with that, a lot of exciting things to speak about environmental business, and we'll get started. Greatly appreciate everybody being here. Obviously, a lot of activity in the Hazardous Waste Management business in the last couple of years. And certainly, on a global basis, we've seen that growth, and we've seen excellent growth here in the U.S. global nature of the business within Veolia within the last week, we had 25, 30 environmental professionals from Veolia in the Houston market. In Houston, had an opportunity to visit Tim's lab in Tomball, a facility that I'm a little bit proud of in Port Arthur, Texas, got to be with the University of Texas, also visit some of the cultural assets in Texas, which [ Astros ] was one, another that I'll tell you about later, but they had good activity to enjoy the culture of Texas. But excellent sharing by having, frankly, things that I'm very proud of, things we talk about every single day, maybe a little bit of those chemical geeky things that we talk about, opportunities to improve, things that we can share across our network. Chemical additives that we're able to add to our kilns that enable us to extend the reliability of our facility. A proprietary refractory brick that Veolia has developed, again, to extend the refractory life time in our incinerators, more uptime, more throughput, frankly, better financial performance. And as some of you -- I see a few that asked me questions before we even got started, relative to throughput and the volume of material that we're managing. Certainly, in the network today, high volume of material, the improvements that we make by leveraging that global network, 5%, 10% material difference on our ability to support industry. So great opportunity to leverage the assets that we have across the network. And again, we'll talk a little bit more about that. Within the U.S., I'm very proud of the growth of our business. 25% of the revenue done in North America comes from the Environmental Solutions and Services business. If you look at our customers, Estelle touched on the work that we did with Pfizer relative to the development of the vaccine. I often tell a story that I -- from one of our field team said, "Bob, we got to go. We got to go to our refrigeration meeting." I had no idea what that meant. I think we all come to find out later on what that meant in the development and manufacture of the vaccine. Our frontline people, 50 frontline people in the Pfizer network supporting the critical work that Pfizer does. As Estelle touched on, they needed us in support of that. Truly essential support and the work that we were doing. And many of the semiconductor manufacturing facilities, as Tim mentioned. Tremendous support from our team in the development under the CHIPS Act now that we're seeing within the U.S. at some of those facilities. We've got 70 employees embedded in the facility working in support of the manufacturing environment. Those will continue to grow. Other technical type nature, you see the type of work that we do very much in the customer environment. We manage facilities to support our business, but we work very much in the customer environment. Key thing is our facility network. We've got critical assets in terms of 6 incinerators, 4 what I'll call platforms. And that's, I think, a little bit of a European word, which I've adopted. It is where our fuel blending and recycling is done. But we use that for a platform of doing other things, become environmental campuses where we can bring other technology to those permitted facilities. They may have historically been permitted for a different technology, but now we're bringing things like battery recycling. As some of you may have seen, we're recycling windmill blades, an interesting development in the last few years. But we can use the platform that we have to bring those new technologies to market. Also large network at ten-day. Ten-day is a transportation network and a consolidation network where our skilled team is able to take the materials that we get from a customer, safely handle them and prepare them for management and treatment at our ultimate facilities. I mentioned our business model. One that I think is always intriguing for people here, probably 80% of our work is done at the customer location, With the complexity of chemical technology, regulatory network, our field teams are working at the customer site in order to support their chemical characterization, support all the regulatory and administrative work that they need to do. And today, part of our discussion are some of the emerging pollutants, new chemicals that we may see. That's an everyday occurrence for our team. When we're out in front of our research and development group, they may experience chemistries that they've never experienced before. But we've got tools in place, and frankly, 30 years of experience. Some have been along for the ride the entire time. 30 years of experience to take the lessons that we learn on a customer-by-customer basis and applying it to the new materials that we may see in the environment. But a key part, 80% in the field, 20% in the facility, that also plays into our value. We're not commoditized. The work that we do is very specialized, and we work hand-in-hand with our customer in support of that. In terms of growth, manufacturing, reshoring. Oftentimes, I think we hear that, and get kicked around a lot, but I noticed that Estelle mentioned, as you travel the roads, travel the roads in the U.S., you see an awful lot of that. Look left and right, you see that little manufacturing site that's being developed. All of that, what that results in is maybe a site that we went to in the past, and we got 20 containers from, 40 containers from. Now we're getting 40 or 60 containers [ from ]. Frankly, the second item, capacity within our network. That is something that we've seen in the last couple of years, that, frankly, we haven't seen in the last 10, where customers call us out, typically, the way we operate. It's a little bit light, I'll say, going to the doctor instead of the dentist, because maybe we don't want to go to the dentist. But we set up -- give an appointment, if you want to be there Thursday at 2:00, that would have been our typical interaction with our customer. In the last few years, maybe in 3 weeks, maybe in 4 weeks. We'll keep you updated. Because that's how we've had to manage the balance of the volume inbound and the capacity we have within our facilities. I mentioned that global network. We're using that global network in order to increase capacity, increase throughput, continue to serve our market. That's the key thing that is supporting the growth projects that we have in place. Things like Gum Springs, which we'll touch on in a bit in order to increase the capacity at more material that we can manage within our network. Also, the increased regulations, the impact of what we will see on PFAS, other emerging pollutants, and how we use that network in order to support it. This one I'm quite proud of, the work that we've done at Gum Springs. Since the acquisition in 2020, we've taken that facility. And as you can see, very large construction projects underway. A few people, I'm sure, have a question or 2 about what's going on at Gum Springs. But in the meantime, since 2020, we've developed the on-site assets, which includes the largest landfill in the United States. We've developed 3 stabilization facilities at that location so that we can take difficult-to-handle, more challenging type materials, and manage them through those stabilization processes to the on-site landfill in the distance. I refer to it as the prettiest landfill in the United States. Nice and clean, no flying papers, no seagulls. That facility, we're able to utilize to handle more difficult type material. And at this point, over the 3 years, real nice development to manage that facility. Same time, we've been using the existing on-site incinerators to support that high demand, the high capacity challenge within the network. Same time, as you see on the left, large construction project to develop the best and biggest hazardous waste incinerator in the U.S., one very, very different from anything else that exists in the current market. That facility will manage 100,000 tons of material, the wide spectrum of material, 14 different ports for direct inject type materials, more hard-to-handle materials. It will also, which there seems to be an awful lot of industry interest in, generate electricity and will also support itself via a solar project on site. And one of the most interesting things I think we're currently under development, we'll have a reforestation project at the facility. So in order to sequester the carbon that we utilize in air travel as a corporate entity, we will plant trees at Gum Springs, which on the surface may seem, hey, that's a green story. Through that, we've already done it, we've initiated it. The wood that's been harvested is being utilized for the manufacture of furniture versus being burned and just being a green story. Truly a nice development at the Gum Springs facility. With that, we'll touch on a quick video. [Presentation]

Very proud of the work that's being done at Gum Springs. And I think at times we say industry changing. I truly believe what we're doing at Gum Springs is industry changing. Not only we will support demand for capacity within the network. Look at the other things that we're doing at that facility that will make it truly an environmental campus, environmental campus for development of other technologies in support of other things that we do in the future. I think some of you will be joining us tomorrow as we visited the Port Arthur facility. A little bit different story at Port Arthur. Port Arthur facility developed in 1990 to address soil remediation projects around the country. Today, we use it as the largest container processor within our network because, frankly, that's the high demand within the network today, is small containers. And you will certainly see that on site. We manage thousands and thousands and thousands of small containers every day. And as someone mentioned earlier, if you ask us where one is, by the technology that we have in place, we'll tell you exactly where it is within our inventory at any point in time. We collect so much data. One of the things we're doing at Port Arthur is an AI process, MasterChef interesting name for working in that incinerator. But a key part at the incinerator is maximizing what we manage through the incinerator. When I said earlier that we're managing thousands and thousands and thousands of containers, it's different materials all the time. How do we make sure that we're managing the right recipe through the incinerator to maximize what we can manage through the incinerator while meeting the environmental requirements that support that facility? Today, MasterChef is a couple of individuals in Port Arthur. In the future, MasterChef will be an automated process that again facilitates optimization and material through our network. Some of what we do with Port Arthur, some of what we do within the global network, is the technology that we incorporate into Gum Springs to maximize on the opportunities that we have within our network. Thank you very much. Appreciate the opportunity. And as I said earlier, I look forward to any questions you may have. And I hope to see you tomorrow.

Thank you so much, Bob. We'll be hearing from you again shortly because we're going to have a focus on PFAS. As an introduction -- well, you all know what PFAS are, right? We're talking about this array of harmful chemicals that we are unfortunately finding everywhere, from the soil, to the food, to the water. So as an introduction to this roundtable, because there is encouraging news, and that encouraging news is that regulation is underway globally and notably here in the U.S. So as an introduction to this future roundtable, and to understand what is its play, what to expect, we're very happy to welcome the Senior VP of Policy at the U.S. Chamber of Commerce, Mr. Marty Durbin. Would you please come on stage?

Well, thank you, and good morning, everyone. And Fred, Estelle, thank you for the invitation to be here. And on behalf of the U.S. Chamber of Commerce, we couldn't be more thrilled at the investments that Veolia is making here in the U.S. and will continue to make. Really struck by what I've learned this morning, what I've heard, over the last several years, I've been working with my colleagues at the U.S. Chamber and our member companies, to really highlight the role the private sector can and must play to drive solutions, whether it's on climate, sustainability, energy. In fact, as we went to COP 28 in Dubai last December, the theme we took with us was business delivers solutions. And that's climate solutions, water solutions, health solutions, you name it. And I think Veolia is just showing us and providing a model for what the business community is doing to lean into that. Now I'll be quick to say that we are delivering those solutions, but we've also got to be able to do that in a way that is reliable, affordable and, frankly, profitable. And again, I think Veolia is showing a way to do that. I've struck with -- as Estelle was highlighting some of the public opinion, and I will say, more broadly in the U.S., let me take a step back for a moment. But companies throughout our membership, if you look over the last 5 to 10 years, there's been an enormous shift and pivot in the way companies of all types are viewing issues of sustainability, climate and what have you. The pressures that are coming from investors, shareholders, your own workforce, the public and, of course, public officials as well, are driving the conversation. Again, that doesn't mean though, however, that you still don't have to provide a reliable, affordable and profitable product to do that. But as far as the public expectations, those are clearly changing. And as Estelle pointed out, when you see the public in the U.S. and elsewhere are saying that they're to -- they're willing to pay more for some of these things. Now I've been in this game for 30 years, representing highly regulated industries, plastics, chemicals, oil and natural gas and now everything. Early with plastics, we did polling and focus groups on recycling, and would ask the question, are you willing to pay x dollars per month for a recycling program? And the answer was always yes, or at least a high percentage. But the follow-up was, do you think your neighbors are willing to pay more? Nope. Nope. I don't say that to disagree. I say that to amplify the need that when you're doing this, you've got to show the public that what you're doing is affordable, is going to be reliable. And again, let's not walk away from the fact that, for businesses, these have to be profitable ventures that we're getting into. For everything you've been hearing this morning, there's huge opportunity here in the U.S. for Veolia and many other companies. As I said, 30 years of experience with the highly regulated industries, and no doubt that politics in the U.S. is messy, it's gotten messier. Some of our policy is messy as well, it's driven a polarization over this time. However, and I want to address some of those perceptions, I would say more broadly, though, what we've seen is there are still, throughout all of that evolution and the polarization, we've continued to see, no matter who's in the White House, very strict regulations. It may snap back here and there on exactly what one administration wants to do versus another, but there's a through line here that I think the business community has been able to help maintain because of the commitment to doing it right. Will we disagree with regulations at times? Absolutely. And I can get into some of that in a little bit. But it's not about a lack of the need for regulation. So let me get to some of the perceptions or maybe even misconception sometimes about the U.S., I think more in terms of U.S. versus Europe, is a way that we address both the environment, regulation and what have you. The perception in the U.S. is that, boy, Europe is so far ahead of the United States when it comes to the environment. And I'm not an expert, but the Europeans look at the U.S., especially from the business community, we are a bunch of cowboys. We just want to -- get out of our way and we can do all of this. Neither one is right, right? I think in the EU, from my perspective, it's great to have a lot of things on paper. Do we see -- do they always get implemented throughout all of the member states? We'll see. In the U.S., even though we do have, by design, a very confrontational relationship with our government, don't hesitate to, in our advocacy, to go tell the government that we think they're wrong. And that has various results here in there. However, once the law is in place, it's now being implemented throughout the nation. And I think companies know that they may fight on what the regulation is going to be, but once it's in place, now we're going to comply. Because that's what we've got to do to keep the business going. Again, it comes down to the huge opportunities. We've now seen historic investments in the U.S. from our bipartisan infrastructure law, the IRA, CHIPS and Science Act, all of these things were mentioned earlier. This is a country that not only on the -- let me just talk about the infrastructure for a moment. Passing that law was the highest priority for the U.S. Chamber of Commerce for years, and we leaned as hard as we could into that one to get it over the line because there's just such an enormous backlog of need throughout the country on just modernizing infrastructure. Now add on to that the need to establish a resilient, smart, sustainable, reducing emissions, all of those things that we know are now values that our public has and that we have as a business community as well, the market signals are finally being set by the government that this is where we want you to go. And the business community is stepping up to that. Veolia is certainly demonstrating that here. But again, as I said, sometimes things get a little messy. And we've seen, for example, let me just address a few of the perceptions that are out there that we sometimes bring on ourselves. But the whole conversation around ESG and this conflict. We've got those in the U.S. that are -- you're just a bunch of woke capitalists and this doesn't really mean anything. Frankly, it's an argument out there that while it may be misplaced, you can't ignore it. I mean this is -- it is in the political conversation now. So what do you need to do to address that? The reasons that Veolia or any other company has been making commitments, investments and taking actions in realms you call ESG, I know, were all driven by strategic business strategic business decisions, right, and implications there. I do think though somehow, we allow the conversation to get too much into, well, we're -- whether it's saving the planet, doing the right thing, or just responding to the loudest voice over here. We allowed it to get too close to that, which then fed into the polarization that we have between the parties in our country. And so now this becomes are you for or against ESG? I won't tell Veolia what to do about that other than to say, I generally tell companies, don't stop doing what you're doing or pulling back from the commitments. You may want to talk about it a little differently, or making sure that every time you do talk about it, you're being very clear about the business reasons you're doing it, right? So you're achieving all of the commitments you've made from a sustainability standpoint, but you're also doing it, because it's good business, you're creating jobs, you're serving the communities where you operate. You just -- it's a matter of how do you talk about that. Because I'm one that believes that -- there's a big debate right now, we'll -- if we have a political change this fall, what will happen to all of those IRA provisions, the investments in techs, what have you. You may see some of them go away. But I think broadly, they're going to stay in place because, again, there's been such a -- they were good market signals. Companies took advantage of them. Communities are seeing jobs and facilities, as we've heard about. And even those members of Congress who voted against the law, they're showing up to the ribbon cuttings for these facilities. And so it's just going to be a little bit harder. Now again, there will be provisions in the IRA that I think, if there are changes, we'll see go by the wayside. But think back to the Affordable Care Act or Obamacare, we saw 12 years of promises to repeal and replace, and that didn't happen. There are good reasons why these provisions are being supported by the business community and taking them up on that. So I would also just say, this conversation between the parties on environment. There's some like, gee, why is it the Republicans hate the environment? Frankly, they don't. I work with them quite a lot. By the way, I'm a fully out of the closet democrat, but I've been working with Republicans and the business community my entire career. Frankly, I think it's been bad messaging on their part. I won't say that there are members on both sides that are difficult to work with. But I think that the Republicans, if you can meet them where they are, they're looking to see, well, how are we doing this effectively, how are we doing it efficiently, affordably, providing all that. So I think those are things you can work right. We certainly are at the chamber, and building the support for the types of programs that we need. And finally, as we were talking about, the -- what's come out of these recent laws is now regulation that is forcing even more, how do we now manage these -- the different challenges that are out there? Again, this is an area where I would say that, from the U.S. Chamber, we've been -- we were out early saying, yes, for PFOS, PFOA, we've got to find ways to accelerate the cleanup of those contaminants. And we're in a really close conversation with EPA, the Department of Defense and others. Now with the announcement last week, we're expecting another maybe even this week on CERCLA designation for those, superfund with what CERCLA is. I will tell you, we will have real differences with how the agency wants to implement these or even whether it's a good idea to use super fun. Again, we're all about let's find the solution, figure out the best way to make sure we're accelerating those opportunities. So in closing, I'll just say that we've really appreciated the partnership with Veolia on sustainability, on the industrial reuse -- industrial water reuse awards, and we have a sustainability and circular economy summit coming up in June, and I hope to see you all there. So thank you very much.

Thank you so much, Mr. Durbin. Thank you for being with us today. I'm going to ask you just a few minutes of patience as we set the stage for the final discussion of this morning, our focus on PFAS. It's an occasion to ask you if you've all gotten your booklets with all the slides. We still have some available in French and in English if you haven't received yours or taken yours, you can just raise your hand, and we'll bring one to you. Yes. Right here. French or English? English. We need an English booklet for the gentleman right here. Thank you so much. And as you can see, we have welcomed back on stage Karine Rouge, Bob Cappadona and Tim Huang. So PFAS, my understanding on PFAS is that they are being tackled right now all around the globe, which basically each region sort of approaching it from a different angle, right? The U.S. is choosing drinking water as its entry point, with the EPA publishing its standards last week. How well is Veolia prepared for that, Karine?

Thank you, Ele, for the question. So if I may, I'll come back just a couple of minutes on what the EPA, which is the U.S. environmental agency, announced last week in terms of regulation, because it's a major, huge regulatory shock, even if we knew it was coming, back to the water industry. So the EPA set regulatory standard for the presence of 6 types of PFAS in drinking water. And most -- 4 of them, like around 4 PPT, which is basically, without getting into details, it's a drop of water worth of PFAS in an Olympic size pool, okay? So it's very low detection level basically level of PFAS in drinking water. And that's massive because the extent of the PFAS contamination across the country basically tells us that most drinking water systems will have to install treatments. This is not totally new, and you asked me about how well we were prepared. It's something that we've been extensively working on for the past 5 years here. You had already some states in the Northeast, which had some regulations with slightly higher levels. So as a result of that, we currently have 30 operating systems where we actually treat PFAS for population right now, in New York and New Jersey. We have like 50 more, which are in between stages, between design and actual construction. They all look very different, and maybe we'll have an opportunity to come back to that. So there's a lot of know-how detailed understanding on what type of technologies you put where, how do you actually build those sites. How do you communicate the population we serve? And that's really something that over the past 5 years has been front and center to our regulated and drinking water operations.

Thank you so much, Karine. Tim, what would you say are the leading technologies that Veolia can provide to address the PFAS problem?

Yes. Thank you. Very good question. So we definitely have a lot of tools in our toolbox, that's the way I want to put it. For us, we have proprietary membrane technology. We have our know-how in active carbon, in resin exchange. All these technologies can be deployed to remove PFAS. But I think the strength of Veolia is really 3 of us sitting here. We are able to -- we know the water side, we know the technology, and then we have the destruction side. So I think this is the power that we have as a group, that we can -- we are able to tackle these challenges from all fronts.

Thank you so much, Tim. Bob, what do we do with the residual waste? What solutions does Veolia have at hand or in development for this?

I think in line with what Tim and Karine said, this isn't new for Veolia. This is something that we've been looking at for 4 or 5 years and looking at the treatment assets that we have within our network as well as the solutions that we have from a water perspective. From that, we've been working on a global level on how we would manage PFAS through those different treatment technologies. And at this point, we -- preliminary results are very, very good on, again, some opportunities for throughput enhancement within our group that we have patents pending on those processes today, and look forward to continue to be part of the solution moving forward.

Thank you. A final question, perhaps, all 3 of you. Since the global trend seems to be addressing the PFAS problem, since you are right now best-in-class, how are you planning on staying best-in-class in, say, 5 years, 10 years, further down the road? Karine perhaps.

It's a very good question, because what's interesting right now, and it's totally normal, is everybody is focusing on, from a U.S. perspective, on how on earth are we going to build all those things within the 5 years that the EPA said is the compliance guidelines. So everybody is focused on technologies, building, construction, getting like enough supply chain for things like the media that you actually need to treat PFAS. But I think our general conviction is that the real differentiation is going to be, in the long term, the life cycle of all these assets. And when I take -- when I talk about know-how and expertise of the past 5 years, for me, the real value, and that's going to show and demonstrate in 10, 15, 20 years from now, is a very granular understanding of, when you put treatment in place, you really have to think on what's going to happen, how often are you going to change it. Like, does it affect your day-to-day operations at the plant. So that when we build these things, we ensure that, especially from a cost point of view for the final customer, they remain sustainable, affordable and we don't create another crisis in a few years from now. So that's where I believe that the understanding of the technologies, and if you're visiting the pilot this afternoon for PFAS treatment, you will see that we are piloting a very complex, I mean, several lines of treatment. It's not because -- all of them treat PFAS. But the big question is how like -- what is the perfect mix so that we can maintain a very affordable equation and sustainable as well for all the population we serve in that plant for the next kind of 20 years plus? So that deep understanding of technologies with like long-term kind of operations angle on which the destruction side comes later around like what is the affordable, most sustainable destruction that we're going to be able to do around like the polluted media. So that kind of granular without kind of taking you too much into the weeds, I mean that we are really doing something, which is building the next phase of water treatment around the country. And we need to ensure when we build that new layer of infrastructure, it's one that's going to stay for the generations to come. And I think that's really our true differentiation.

Thank you, Karine. Tim?

Yes. So for Water Technologies' point of view, I think a few points, right? We will continue to leverage our expertise that we have in water treatment, throughout the globe, actually, we're a global company, we'll leverage our knowledge. We'll continue to invest in innovation to continue to develop our -- come up with new technologies on dealing with these situations, and working with our colleagues here, continue to pilot different solutions. I think the key one thing is finding the solution and also finding affordable solution where that -- where we can be successful. So I think those are the 3 -- few things that we will continue to do and stay ahead of the game.

Thank you, Tim. Bob?

I think sometimes in business we say what got us here won't get us there. I think in this case, the work that we've done in the last 5 years is the work that will continue to keep us in the forefront that we do want to be the leader in terms of technology, in the research work that we have, the capabilities they have within our network, none of our competitors have anything close to the research capabilities that we have in our network. And frankly, the interlink between the businesses that we have keep us looking at opportunities for treatment, whether it's low concentration, high concentration, regardless of the type of media that the materials, and it's enabled us to develop things that will keep us in the forefront.

Thank you so much to all 3 of you. This marks the end of our presentations this morning. I'm going to ask Estelle to please join us for the conclusion. And then we'll hand over to your questions.

Thank you very much. I guess you've seen through this morning that the Veolia market is huge and growing and growing every single day, even more and, I guess, accelerating. You have the trends underlying not only about carbon, but it goes well beyond. We are talking health, we're talking reshoring. We're talking water scarcity and resilience. Those are trends on which we have some solutions. The idea is to speed up the deployment of the solution in a holistic way, as we've just seen with the illustration on PFAS. So in a way, Veolia would be I think kind of the perfect mix of a sustainable long-term gross stock, which looks like a production in term as in sustainable and long term, as well as a growth stock, but we are actually matching the 2 and putting them together. So long-term growth, this is exactly what we aim for Veolia as a company, and we think we have a lot we can bring to this country. Already very, very much embedded and very powerful here. And you've understood that the ambition is high. We want to double the size and even more. So I guess we are uniquely placed, and now it's time to GreenUp. Thank you.

Thank you, Estelle. Please come and join me with Claude Laruelle, Group CFO, and we're going to hand over to you if you have any questions. Questions here in the room or online, you can use the question tab online. Right.

So can I ask a couple of questions, if I would? Bob, very specifically, in your business, a bunch of new capacity is coming online. You're adding capacity, one of your competitors is. You've enjoyed some pretty good unit pricing, not just because of inflation, because of the scarcity issues. What do you think happens in your market once Clean Harbors opens Kimball, you open Gum Springs, what happens to that market from a unit pricing standpoint?

Michael, thanks for the question, and certainly, something that we've been looking at since the day that we launched the effort at Gum Springs. And frankly, as we've seen, the supply and demand of capacity at this point has remained unchanged. I'll be very candid, in January of last year, that was something that we were very focused on. What is that supply/demand going to look like? It hasn't changed. And with the reshoring, onshoring of manufacturing, that demand remains in place. Frankly, how we've managed that supply/demand, I think, has been part of the key to the success of Veolia within the last couple of years. We've managed that maybe a little bit differently than our competitors have, and aligning with what are the growth plans of our customers to ensure that they have capacity. And looking at that on -- looking at, one, the demand, and then also looking at what other emerging pollutants may impact the market, I think the supply/demand that has impacted the pricing over the last couple of years, I think, will remain in place in the years to come. And I think it's a combination of the demand that's there already from reshoring and the demand that comes from some of the new changing things within the market.

Absolutely acknowledge your competitive advantage and your market position. EPA has put out the drinking water rule, made an estimate of what the capital spending and, therefore, the long-term operating expense would be. Many of us would say they've woefully underestimated it. You run and own operating assets. What's your view about what that capital spend is going to look like and therefore that ongoing maintenance side? If you use the State of Wisconsin's data, basically, EPA has underestimated the capital spending by almost 100-fold, and it's about a 10x difference in annual operating expense.

Maybe it's not a question for Bob, it's more for Karine. But I think as Karine just said -- sorry, because from here, I thought you were talking to Bob. Sorry about that. No, I just -- I guess, as Karine just explained, every single situation is going to be very different. And we're not even talking state-by-state different. We're talking almost community-by-community different. But Karine, you may want to elaborate on that.

No, I mean Estelle is absolutely right. So I will reserve my opinion on the EPA number, if you allow me, okay? But the truth is like that granularity of design and all of that. I mean, that's really -- that's impacting maybe not so much the smaller systems, which I think overall, as an industry, we have a pretty good sense of what they would cost. But the bigger ones, I mean, in all honesty, we all have to go through a lot of preliminary steps before we understand what's going to be the cost for the bigger systems, the big surface water plants. And there's quite a few in the country which are impacted. And then the big thing is the operational cost. And I don't think, until we have really a few good years of O&M around those systems, as a whole, for the industry, public, private, we will have a good answer and a good judgment on the EPA numbers.

All right. Thank you so much. Let's take another question from the room. Go ahead, sir.

All right. [indiscernible] with Oppenheimer. I'll try another slice of where I think Michael was going for as well, which is you've got a $200 billion market opportunity in PFAS on the slide that you presented earlier. We'd love to hear how each of you in your own business units think about the TAM within that, right? So there's revenue opportunities, for each of your groups, what is that TAM? How do you see it developing?

I'll go first. And I'll go first because I think they're probably the most unknowns in terms of regulatory development at this point, that's to come. But as a result, the work that we've been doing in preparation and support of our other businesses provide us with what we believe is a long-term opportunity for the waste management business, ensuring that we have the technology in place that aligns with what are now recommendations from the EPA, but likely will become regulations in the future, much like what we've done with PCBs, dioxins or any other newly listed or newly managed material. That volume of material is there to be treated. There will be various technologies to treat it. I think we're very well-positioned to take advantage of that market.

On the Municipal Water side, I mean, first, it's compliance with the control, clearly, on our drinking water operations. That's first and foremost a priority. But in parallel to that, as we're serving municipal customers, it's bringing that expertise we have as an owner to them, and with that lens of operators, I mean we're not here to replace engineers and people who are going to be in all those plants, but our ability to demonstrate and all the technologies we tested, kind of give best practices around how to think of this type of projects, is really something that's helping us on the service to municipality side. And then we're talking drinking water, but the reality is there's also a lot of discussions around the wastewater regulation, which is the other thing that we are starting to absolutely prep for.

But I guess, in a way, that's more a generic answer. When you have a market in Veolia, what you need to make from a market to business, which is -- if I understand well your question, you need regulation, which is enforced, you need money. So you need that it is affordable in some way, either via subsidies to perform whatever or via some customers paying for it. And you need kind of a vibe of action, if I may add this, the last one to it, as in like a movement. So if I listen to the judgment we've heard first, you're very good at that in the U.S., better than Europe. So I think the question is how to translate this opportunity into real action. How long will it take? We're going to see. But we have a very big ambition we can take a good market share of that, you've understood as well, I think, from this morning.

Thank you. Thank you for the question. I'm going to take one question that's coming from those who are following this live online. It's a question from [ Nicola Guber ] from AFP. How do you intend to achieve your goal of doubling your size in the U.S.? Will you achieve this through acquisitions or new assets?

Everything, I guess, is on the table, with a few nonnegotiables, I guess. So it's going to be probably partially M&A, partially organic. And the proportion by 2030, I would be crazy to give you a precise split, but it's really both. In the strategic plan we are in, so GreenUp, we've estimated roughly, and we've put that on the slide, something like half of the investment. And I guess there is a 30% comes from M&A, but M&A being tuck-in, as we've explained, in hazardous waste or in water typically. And what I said the nonnegotiables, what are they? When we invest, either CapEx or M&A, we have to have a good return. And you've seen figures on the slide, [indiscernible] more than 11%, ROCE above WACC after year 3, at least, it can even be better. So all the projects which were described this morning met those criterias. So we are here to see the opportunities, opportunities have to be opportunities, and they have, of course, to bring value to Veolia.

Thank you so much, Estelle. Here, we have another online question from -- oh, it just disappeared from my screen. So no, we do not have that online question from X. Any other question from the room? We'll come to you in just a moment. Let's listen to you, sir. Just go ahead, start talking and then the sound will come, no worries.

Jacob Wallace with Industry Dive. I just wanted to know how the U.S. market compares to other countries when it comes to PFAS regulations, the opportunity there? Is the U.S. ahead of other countries when it comes to the ability to address this and build out infrastructure? Or is it lagging behind the EU? Yes, just sort of comparing that.

On PFAS only or on everything? Because otherwise, do you have 2 hours? So I can go through one by one the difference in legislation and execution which goes with it. I doubt it was your question. I guess the beauty, and that's why the -- your question is interesting, the beauty of running a company like Veolia is we have a footprint across the globe, in EU, in the U.S., in Asia, in Australia, where we are #1, and so on and so forth. So I guess we could, you're right, compare, and actually, it's fair to say that we even have sometimes discussion with regulators across the globe, but what does work, Estelle, and what doesn't, as in regulatory and policy perspective? Because we've seen the -- you have the character, you have the stick, you have both, you have the subsidies, and like -- and you have various ways of making things happening. To your question -- back to your question on PFAS. The U.S. is ahead to put it bluntly. Ahead in terms of time. Not in terms of, I guess, level of, as Karine mentioned, level of PPT or whatever, it's kind of similar, although the definitions are a little bit different. But when you look about it, the stringent nets, I don't know if that works in English, is kind of similar. But in terms of timing, the PFAS subject went into the U.S. first. That's why everything Karine said about we already have 30 units, we have 50 more, which are under study under deployment, you won't have some numbers, the same number in Europe, which is a few years behind. But that's why when I have the type of discussion we're having today, in Europe, they ask me, okay, what do you do in the U.S.? Can you copy it and adapt it to Europe? On water reuse and recycling, which is what Karine presented with the West Basin example, it's exactly the opposite around. We've developed in Spain, in particular, why Spain, because Spain is a very dry part of the country -- of country in Europe, with lots of typically agriculture. There is more than 15% of the wastewater in the whole country, which is reused and recycled. And the number in the U.S. will be very, very small compared to that one. Like California being ahead within the U.S. So I guess, on reuse of wastewater and the technologies, which goes with it and the regulation and all the rest, the opposite were around, Europe will be ahead. And then to your point, sir, I guess, regulation is something, acting is nice as well, isn't it? So I could comment on something else, which is the -- how fast do you go from a regulation to actually something happening. And I would say the U.S. wins this battle.

Thank you, Estelle. A question from Olly Jeffery from Deutsche Bank. Veolia said that U.S. revenue will grow 50% from 2023 to 2027, which implies 10% to 11% CAGR. Veolia also said organic revenue will grow 6% CAGR. How much of the delta is due to CapEx and how much is due to tuck-ins?

Claude?

So yes, so you know the ambition. And you know also what Estelle has described, the strong discipline of Veolia. But there are a lot of needs. Needs are organic, because we see a lot of movement on the market. We have described this long. And on top of that, we will invest and we will do M&A with a strict discipline on M&A. It will not be very different from what we have highlighted in the GreenUp program, because what we're describing today is what is the GreenUp applied to the U.S. So roughly speaking, it's going to be half and half. That's what we have in GreenUp, EUR 2 billion for the whole company on new facilities across the world, and EUR 2 billion on M&A. And on top of that, we keep some headroom on the balance sheet side so we can even accelerate our growth globally and especially in the U.S.

And the figures, Claude mentioned, the EUR 2 billion and the EUR 2 billion, are just the growth investments, of course, on top of the maintenance, one just to maintain our existing base, which is like a separate pockets, if I may, in the presentation.

Thank you, Claude. Thank you, Estelle. Would you like to ask a question? Can we bring right here a microphone? Go ahead.

Tancrède Fulop from Morningstar. I have a question on the water operations. The growth of the nonregulated municipal water was quite impressive at 14% CAGR. And yet you guide for CAGR -- mid-single-digit turnover CAGR by 2027. So why this slowdown? Is it because you prioritize CapEx in other businesses?

I guess I will start, and Karine will answer. Because in Veolia, we want to create value for our shareholders. So Karine knows that very well. We have a few contracts where maybe we'd rather win profitable contract than win contracts altogether. So I guess revenue is less important, in my opinion, than the margin which goes with it. Hence, we are super selective. Hence, the answer [indiscernible]. So it's not a slowing in the needs, it's neither a slowing in the market itself. It's us being super selective when we renew the contract. But Karine?

Absolutely. There's a bit of inflation impact as well, because it's indexed to inflation in the historical numbers, which should cool down. But then the truth is exactly what Estelle said. And the kind of the first comments I made around the fact that we're changing the conversations with these customers, that means also that we are selecting customers with whom we are sure that we can bring the value that we think we can bring. And not everybody will be interested in things like energy efficiency or kind of a decarbonized type of -- and that's totally okay.

Thank you. Did you have another question?

One quickly because I have the opportunity. For the mobile unit in Water Technology and Solutions, is it possible to have some data about the utilization rate or maybe average downtime per unit and how the business is protected from a slowdown, which would drive a lower utilization rate of these 12,000 of mobile units.

So our utilization rates are very, very high, without getting into the specific numbers, if you don't mind. But it's very, very high. We are -- actually the demand is beyond what we have. So we're continuing to invest in this space.

And in terms of profitability and return and all the rest, I guess, when Tim and [indiscernible] ask that we invest closing myself in mobile units, it's fair to say it's fairly often, say, 99% of the time, yes, please, and quicker because it's super [indiscernible] not that expensive compared to the money you make. So it's a very, very successful business that we want to develop, and very, very good, because of the utilization rate, which is super high, and the demand is higher than the offer we can make.

Here's the question asked online by Alexandre Roncier from Bank of America. How comfortable are you with litigation risk on the back of the new PFAS rules? Do you expect Congress to put in exemptions for your water operations? And how do you mitigate the risk on your Water Tech product line?

I guess I will start by answering from my point of view, but I gather, I think it will be that better than American goes and explain, because the Congress and stuff. I'm not so sure I will be totally fully aware with the vocabulary and everything. So Brian, if you can like complement what I will say. But I guess first things first, on PFAS, like on the pollutant, we are part of the solution, we're not the problem. I just would like to start with setting the facts and the basics here. Like the pollution doesn't come from Veolia. The pollutions come from like historical site and chemicals and so on and so forth. Then the next -- the standard in terms of the health is not defined by Veolia. It's defined by the EPA and the various health authorities. The trajectory of investments, as in when -- how do you meet those standards, is defined by, let's say, our regulators, so the public utility commissions like Karine explained. And then we come with the, okay, this is the type of the solutions. We can bring you an offer meeting the standard at the best cost possible CapEx and OpEx wise. So just want to replace a part of that. So I'm very proud about everything we've done with PFAS. But Brian, maybe.

So I would say that, first of all, I've often said to Estelle, it's a great country, anyone can sue. And so litigation risk can never be completely eliminated. But frankly, the way you manage litigation risk is by doing the right thing. And what you've heard from Karine and Tim, and Bob as well, Bob mentioned that the waste side will come along a little later. Our technologies, our solutions essentially will assure compliance with the law. That's our base level standard. If you do that, your litigation risk is minimized. One never eliminates it, because people can take actions as they choose, but it certainly puts us in a very solid, defensible place. So having the technologies, having the know-how, deploying it, executing it consistently, is frankly the way we manage litigation risk across the board. PFAS really will be no different. So congressional action, yes, it's going to come. Marty mentioned the CERCLA exemption. All of that, frankly, just fits into a very long pattern in the United States. And the way we manage it now is by doing the right thing and by executing day to day and meeting the standard.

Thank you. Thank you so much for your answer. Just one last question on PFAS. I'm just going to grab on to a question that was sent online. I think it's important to stress the answer to this. In terms of competitive landscape in the new PFAS opportunities, are you the only player mastering all the value chain from treating to destroying the polyenes.

I haven't checked in every single country in the world, but my answer, I tend to -- we would say, yes. The end-to-end solution, the answer would be yes. Do we have competitors in every single pieces of the jigsaw? Of course, we do. But being able to not only combine the solution, but as you know, we said, to design the solution, to fit the purpose depending on the exact location, the exact needs, the situation, to minimize the costs in investment and in operating, yes, I think we are unique.

Thank you. A question?

I'm [ Tom DeRosa ] with The Deal. Just a question on the PFAS technology, the water technologies and water treatment. You said you're piloting a few different technologies as you go through trying to identify the best solution. Do you have any idea at this point for smaller versus larger systems, which technologies that you're piloting might be best depending on the size of the system in terms of cost effectiveness? And then on kind of a second part of that would be, are there any thoughts at this point -- I don't know the technologies that well, so I apologize, this is like kind of a ridiculous question, but are you concerned as systems decide to put millions of dollars into investing in putting these technologies in place to eliminate the PFAS, that do any of these technologies potentially eliminate their needs to use other typical water treatment systems, reducing their bleach, for example, their bleach purchases and things like that? They'd want to obviously, as they spend that money, look ways to reduce their costs first. So I'm just curious in terms of those 2.

I guess, first things first, it looks like you are a good candidate to visit this afternoon, because you will have the full discussion and it's not going to be a few minutes answer, it's going to be the full one. Because it's not only about size of the system, it's location. It's even type of grounds. When you visit this country, when you visit any country, you discover [indiscernible]. We have places in the U.S. where it's not close to the sea, but the water is naturally, it's not exactly natural, salted because you have so many of the salt that you put to remove the snow in the winter that you end up to having lakes which are salted. Imagine that the question then is not just the size, it's just not this location. Salt is as much a question of PFAS. How do you do when you have both and so on and so forth. So it's much more than just the size. It's the location, it's the type of pollutant, or other stuff you can find. So -- but I guess your question is a credit, I think, to what Karine just said, which is you cannot just have a one fits all. You need a diagnosis, you need to design a solution. And either you do, okay, I purify everything, but that it's super expensive just for this. And it will cost every single year to the population a lot of money, or your design, if you have something that you designed to protect just like that, you don't go for too much, you don't go for too little, you go for exactly what's right. And I think that's exactly what we're trying to do at Veolia in everything we see on PFAS. But come and visit the Haywood plant this afternoon, please.

We'll be happy to have you with us. Thank you so much, Estelle. Any other question in the room? Yes. Please. We're going to bring you a microphone. And then we will come to...

Arnaud Palliez, CIC Market Solutions. I have one question about regulated water. I would like to know if -- what kind of increase can we expect in the RAB in the coming years? And also, can we expect some change in the return on equity from this RAB?

Do you want to address it first or -- I can. Yes. So I mean, there's 2 things, right? And we mentioned, there's one of the fact that we are investing in our assets. We are investing because we are maintaining them. But also we're investing because we talked about PFAS, but there are also other regulations in the U.S., which are boosted up by the EPA such as lead and copper, which is driving an increase in the network replacement, okay? So big regulatory wave. So that means we're investing and the RAB will increase with that. The second thing, Estelle mentioned it, is tuck-ins. So it's -- I talked about the consolidation trends. We've done a few. If I'm very honest, in the past, it was more opportunistic. And right now, we are fully staffed and completely geared up to have a real growth strategy around tuck-ins around the states where we're already present, and that's very important, I think, from a water to reef harmonization point of view. But that was -- it's a core part of the strategy. And around the return on equity, it's been remarkably stable for us over the past few years. As I mentioned briefly, we are finishing up a wave of rate cases. So that's the water rates negotiation with the states. And we're very pleased with the results, totally in line with expectations. So that's in the hands of our economic regulator, but we are extremely confident that we're going to be able to maintain such returns.

I guess, Karine is pleased, I think Claude is pleased as well, if I may. Therefore, me, on the return we get from our regulated market related business in the U.S. So we're okay with it. We have growth embedded on top of a very interesting business model for us. A quick transfer from CapEx to net results. Thanks to all the system which goes quick, which is a big benefit of the U.S. system, specifically in the geographies we are with a strong track record.

Thank you for your question. Ma'am, I'm going to come to you in just a second. I'm taking a question from online. Here is the question from Arthur Sitbon from Morgan Stanley. Will you be able to fully use your U.S. tax assets by 2026? Could you consider new growth opportunities in the U.S. to leverage these?

Okay. So first of all, we structured the U.S. in order to have one single headquarter, tax group in the U.S. And that brought us more than $80 million of tax synergies. It's on top of the EUR 500 million of EBITDA synergies that we have highlighted for [indiscernible] is significant. And because we had the profit, including the profit of the regulated water, just combined with what we have at the former Veolia. So by combining Veolia and SUEZ, we are able to use part of the deferred tax asset that we have in the U.S. We have a plan. We will continue to use them. But as we speak, the reserve, if I may say so, is around $350 million. So with the plan we have, we will not be able to use all of them, but still a fraction of them on top of that. But we don't do M&A just because of tax reasons. If we do M&A, and we were talking about this accelerating M&A, including on water and on hazardous waste, we will be able to use them even further. So -- but we don't do M&A. We are strictly disciplined on M&A that will help a little bit M&A and returns. But that's not the purpose of doing M&A just because we have deferred tax assets in the U.S. We do M&A because there are needs, there are growth, there are potential, there are synergies with our existing business. This is the main driver for us to do M&A in the U.S.

I guess your answer, Claude, reminds me of the fact that we barely talked this morning about the merger with SUEZ, which was just 2 years ago. And in a way, if you have a look at the value of the people in front of you, we haven't all -- we all have a long history in the industry in our companies, but it was not exactly the same sources in a way originally. And that's -- everything we presented this morning is a wonderful translation in the fact of how powerful is the combination of the 2, with the combination of the technologies, with the combination of the various business in water, and the growth engine that this merger creates. And as Claude said, what we've committed to was the cost synergies, EUR 500 million. But we have tax synergies on top and revenue synergies in a way, which is what we've seen this morning.

Thank you both for your answer. Ma'am, I believe you had a question for us.

Yes. My name is Amanda Chu with the FT. I wanted to follow up on -- I think, Estelle, you mentioned something about subsidies. I was wondering if you could walk me through what you think like additional measures the U.S. government should take to address PFAS in water supply? And then a second question I had is on the part about the U.S. and timing, do you think the EPA is acting fast enough? Is it arriving at this issue a little too late?

So I guess I won't dare telling any government in the world, not the American one, wouldn't be an exception, about what they should do or what they should not do, and how fast and if it's too fast. This is political reason, political decision, based on science in the case of EPA, and that's exactly the way it should be. We're here to provide solution to say what's possible and how we can scale up and speed up the deployment. I think that's an important one. In terms of subsidies, subsidy is very, very largely applied to our customer or -- so in a way, on PFAS, the question this country is, I would say, debating in a way is who's going to pay for the decontamination. And you have 3 typical, I guess, stakeholders which could be involved in the answer. One being the people who initially put the pollution on the ground, so the big chemical companies. The other one would be more the taxpayers' money, say, with federal subsidies typically. The third one would be actually the population itself via their water bills. And it's probably a mix of all that. In what proportion, again, that's really an important, in a way, decision as a country, and I won't replace this decision-making process. In terms of is it going -- is it fast enough? It's moving fast, I would say. And it's evolving in a way as science is. And as we said, 5 years to comply with the standard, there was already a huge amount of work because, like in design solution, depending on the places, it will be different, except if you want to have a kind of a unique solution, which will be super expensive for decades to come, which wouldn't be affordable. So I think it looks like it's already very ambitious, to me, to comply with those 5 years.

Okay. We are almost half an hour late on what we had in mind in terms of timing. So my suggestion is, if you are in agreement, to perhaps take one last question from the room and then we can wrap it up. And if you have any more questions, do come with us and do the field trip, so you can ask all your questions on the way. Any other question in the room? Yes. sir. Can we bring a microphone here?

[ Jeff Rea ] from RBC Capital Markets. It's on PFAS destruction. I guess there's a lot of emerging technology in on-site destruction, electrochemical oxidation, supercritical water. I'm curious what you're doing in that space, how you're looking at it, is it internal investments? Are you looking at acquiring? Just any commentary there.

So I guess the answer is we are always monitoring everything emerging in terms of technology on PFAS as is on anything else. And Tim and [ Ann ] are constantly monitoring from start-ups to what emerges from universities, across the globe, and we have partnerships, we have [indiscernible] centers. So we are monitoring. I have no idea myself of the 2 you mentioned. I'm sure people in the room will be more confident than I am. The thing is already for the water drinking, for soil as we discussed on airport and air base and this type of stuff, with all the solution we have, we already have the solution. So maybe the one which would be new will be to be a bit more cost effective for some. So that may have an interest. But it doesn't mean that we don't have already everything we need, if you want. So more efficient one, that would be great. But we already have, with everything which was described today, everything we need to treat that. But I'm sure in 5 years' time, we'll have like things evolving. And this is the beauty of Veolia, the solution we have, we consider that, globally, when you think of like water scarcity, global warming, scarcity of natural resource as in solids and pollutant, we have a bit more than half of the solutions already. My priority is deploy them as quickly as possible to protect human health, to enable sustainability of the industry. The other half, we have to invent them, hence, the 14 [indiscernible] centers across the globe. And things advance as they go, and that's good for everybody, for the population, for the industries and for the planet in the end.

All right. I'd like to thank you very much for your attention. And for all of you, who joined us remotely, I'm going to close the live here, and hope that next time you will be with us physically in the room. Thank you so much.

Thank you.