Veolia Environnement SA (VIE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Veolia H1 2024 Results Conference Call with Estelle Brachlianoff, CEO; Claude Laruelle, CFO; and Emmanuelle Menning, Deputy CFO. [Operator Instructions] This call is being recorded August 1, 2024. I now would like to turn the conference over to Ms. Estelle Brachlianoff. Please go ahead.

Thank you very much, and good morning, everyone. Thank you for joining us for this conference call to present Veolia's results for the first half of 2024. And before starting, I would like to sincerely thank Claude Laruelle, who has been our CFO for 6 years and within the group, for 24 years and has greatly contributed to the group's transformation. I also want to warmly welcome Emmanuelle Menning, who has been in the group for 10 years and Deputy CFO for the past 4 years. She knows the group very well, and I'm sure she will continue close work with you with lots of passion and great professionalism. Both of them are with me this morning. Our first half year results, and I'm on Slide 4, are once again excellent and perfectly aligned with our annual targets. It is an excellent start for our GreenUp strategic plan as those figures match our ambition and 3 value-creation pillars. First, growth, with revenue increased by 4.4%, excluding energy price, enhancing our 3 booster activities, which are up plus 6.9% as well as our 3 booster geographies, up plus 7.6%. Second, efficiency and synergies in line or ahead of our targets in H1. Third, capital allocation. I'm also proud that Veolia has become the first company to ever achieve double validation for its climate ambition and action plan from both SBTi 1.5 degrees and Moody's. I can fully confirm our 2024 as well as our long-term guidance. I'm now on Slide 5 with a few more details on our first half financials, which are once again excellent and in line with our annual objectives. Sales in H1 are up plus 4.4%, excluding energy price, which are essentially pass-through for us, and this is despite continued unfavorable weather conditions. This is thanks to the very strong performance of our Water and Waste businesses in particular, and I will come back to this shortly. EBITDA increased by a substantial plus 5.7% on a like-for-like basis, in line with our annual guidance of plus 5% to 6% to EUR 3.266 billion and current EBIT by plus 6.6% to EUR 1.730 billion, in euros, of course. Current net income reached EUR 731 million, up plus 15.2% and well on track to achieve our EUR 1.5 billion objective for the full year. Net financial debt is well under control and in line with our target of a leverage ratio below 3x at year-end. These results allow me to fully confirm with confidence our 2024 guidance in all its components. Slide 6. We registered a very solid revenue growth of plus 4.4%, excluding energy price, fueled in particular by Water and Waste, which grew by 6.4%. Regarding Energy, as anticipated, lower energy prices have weighted on our top line. But in fact, our Energy revenue has been flat even if we exclude the effect of energy price and has even grown by plus 1.4%, if we exclude negative weather effects. As you know, our Energy margin is well protected from the ups and downs of energy prices due to our unique positioning in local decarbonizing energy. We expect 2024 Energy EBITDA to remain at the high level we reached last year despite lower energy prices as we've demonstrated in the first half. And as I said, we anticipated this. This is the reason why we've published our revenue growth, excluding energy price, each quarter since 2022 as they do not impact our performance. On Slide 7, this slide reminds you of the 3 pillars of value creation in our GreenUp plan, top line growth, efficiency and capital allocation. Those are 3 engines supporting the group's strategy and performance. I will detail in the next few slides how each of these value creation pillars have contributed to our performance in H1. Starting with revenue growth. We combined stronghold activities, which are very resilient in social services and infrastructure like, and they grow in line or slightly higher than inflation, as well as growth boosters, whose yearly growth is expected in the range of 6% to 10%. So much higher than the group average. These growth boosters consists of 3 activities and offers. This is water technologies, hazardous waste and local energy as well as 3 geographical boosters, which are North America, the Middle East and Australia. The second pillar of value creation is our operational excellence and cost efficiency. Each year we deliver EUR 350 million of efficiency gains, which have been topped up by cost synergies of the Suez merger, an additional EUR 500 million over 4 years. The third pillar is our capital allocation and transformation of our asset base. We target high value-creating projects, either CapEx or tuck-in acquisition with synergies and in our stronghold activities or to support our booster priorities. Our internal rule is IRR above WACC plus 4%, and ROCE above WACC after year 3 for these investments. Meanwhile, we constantly review our portfolio of assets to track against strategic priorities and value creation ahead. This value-creation model is the backbone of our GreenUp plan which targets current net income growth of 10% per annum, dividend growth in line with EPS and a ROCE perspective above 9% in 2027. Let me detail now how each of the 3 pillars of value creation have translated into H1 results. I'm on Slide 9, and I'm starting with top line growth. In H1, we delivered solid revenue growth of plus 4.4%, excluding energy price, thanks to very solid performance in our strongholds, which grew by plus 3.4% excluding energy price. District heating and cooling networks are impacted by lower energy prices as expected but with protected margin, while water pressure and solid waste [indiscernible] solid revenue growth. Our booster activities have grown by plus 6.9% driven by Water Technologies and hazardous waste activities. In terms of geographies, Australia and the Middle East and the U.S. performed particularly well at plus 7.6% growth and each above 6%, in line with the high ambition laid out in our GreenUp plan for these booster geographies. On Tashkent, you have a focus on the performance of our strongholds, which did very well in H1, with plus 3.4% revenue growth, excluding energy price. Municipal water operation and solid waste revenue progressed very well with a good commercial momentum as well as favorable indexation and continued pricing power for 30% of our contracts, which are not indexed. District heating networks were flat, excluding energy price due to mild weather in Central and Eastern Europe but would have progressed otherwise. All our strongholds registered strong commercial wins. Among which after the major renewal of the SEDIF contract in Q1, I would like to highlight 2 contracts in the quarter. They both illustrate perfectly the synergies between our know-how and businesses. In this case, a combination of water and energy. I'm now on Page 11. The new Saint-Fons wastewater treatment plant is located in the Lyon urban area in France. The municipality has chosen us to upgrade and run this very innovative wastewater treatment plant for 6 years, representing a backlog of EUR 100 million. As you know, wastewater treatment plants are energy consuming. A differentiating factor in this win was our ability to reduce by more than 15% energy consumption as well as to provide locally-sourced green energy for the plant at a secured price, as well as our PFAS end-to-end treatment, which is quite unique, combining water technologies and help this waste treatment. Another illustration comes from New Orleans in the U.S.A., where we have successfully expanded our wastewater contract, thanks to our energy efficiency tool, which is called Hubgrade. On Page 12, on the performance of our GreenUp booster activities in H1, which have grown by 6.9%, basically in line with the average mid- to high single digit aimed at in our strategic plan. Water Technologies with EUR 2.5 billion revenue in the first half continued to perform exceptionally well in terms of sales, earnings and backlog. Hazardous waste at EUR 2.2 billion has enjoyed strong growth in Europe and in the U.S. We continue to invest in new facilities in the U.S., Saudi and Germany, which will be commissioned from 2025. In local decarbonizing energy, we notably registered strong growth in Energy Services in the Middle East in the first half and a very significant new energy efficiency contract in Hong Kong for a backlog of EUR 185 million. On Slide 13, you can see a detailed summary of our H1 achievements in Water Technologies in terms of growth and bookings, which have reached EUR 2.8 billion. As you remember, we have enjoyed a big success in desalination in Dubai at Hassyan in Q1. We have also signed in the first half a series of EUR 10 million to EUR 50 million project in core markets for us, such as microelectronics and oil and gas with the likes of Micron, Intel, LyondellBasell, Qatar Gas, et cetera. We keep a very strong pipeline with those core markets for us. I would deeply encourage you to join our deep dive on the 17th of October in Hungary to learn more about our Water Technologies and New Solutions. Now let's deep dive into our second driver of value creation, which is performance and efficiency. I'm now on Slide 15, which shows our first half performance in terms of operating efficiency and synergies. In terms of efficiency, we achieved EUR 194 million in savings, in line with our annual target of EUR 350 million. I am pleased to see the specific action plan launched in France late last year, bearing first fruit in H1. Our operational efficiency includes digital initiatives, and we are testing GenAI to get us to the next level. For example, in Spain, we -- where we accelerated e-bill implementation, and we've optimized the call center system through AI. Slide 16. In terms of cost synergies derived from the Suez merger, we are ahead of schedule and have achieved EUR 71 million in H1 for accumulated total of EUR 386 million since the start of the merger with Suez. After the first benefit that typically came from HQ mergers, followed by operational efficiencies, more than 50% now comes from the massification of our procurement in our key countries. In addition to 30% still comes from operational efficiencies, particularly within water tech. It's fair to say that we have progressed faster than expected in the delivery of the synergies. The last driver of value creation is capital allocation where we were partly active in H1, and I'm on Slide 18. As you can see, we are progressively transforming the group's portfolio to enhance value creation while staying in our 3x leverage ratio. Our CapEx program continued at a sustained pace with ongoing projects to build new hazardous waste treatment capacity to start from 2025, and we continue the conversion plan of our coal-fired facilities with double-digit IRR. Our growth CapEx also includes regulated water in the U.S., where return on equity is guaranteed at 10% on average. We have been quite active in terms of bolt-on acquisition as well, which delivered rapid synergies from flexibility assets in Hungary to recycling activities in Germany and a few other tuck-ins in Brazil and Portugal. Finally, we signed more than EUR 1 billion of nonstrategic asset divestitures in H1. Starting with SADE, a construction company, mainly operating in France and dilutive for margins and more recently, with Lydec in Morocco, an antitrust divestiture linked to the Suez acquisition, which had been delayed, as you know. We just announced the sale of our sulfuric acid recycling activities for recoveries in the U.S. to AIP for $620 million, which will be closed today, an activity is now core for us which doesn't present any opportunity for duplication elsewhere. As you know, we make choices and prioritize investments in order to maintain a strict balance sheet discipline on average below 3x. Sadly, we continue to reduce our stake in our Chinese water concession and sold our minority stake in Haikou. These very good results in H1 confirms the strength of our business model, which is summarized on Slide 20. Over the last few years, we've been able to grow our results quarter-after-quarter despite high inflation and interest rates, volatile commodity, energy price and slower European industrial production. I remind you that 85% of our revenue is immense for macro trends, and we've proven that over the last 2 years, where we've had almost 0 waste volume growth but still delivered mid- to high single-digit EBITDA growth. On top of that, 70% of our revenue benefits from automatic indexation and is, therefore, fully protected from the cost of factory increase. For the other 30%, we are very good in price increase, thanks to our pricing power, which is thanks to our top 3 position in key countries. I'm very happy about the balanced geographical footprint as well with 30% outside Europe, and our unique combination of wastewater and energy activities, which demonstrated power for winning new contract just as I highlighted in the Saint-Fons example a minute ago. Of course, Veolia is a leader of ecological transformation and benefits from many supportive megatrends, such as environment-related health concerns, decarbonization of course, as well as reshoring of strategic industries and the shortening of supply chain, which supports most of my economy. Worth noting that the latest Elabe barometer confirms that public opinion demands environmental action. 66% of the world inhabitants believe that taking action will be less costly than inaction. Public opinion does support environmental efforts that depollute, decarbonize and regenerate resource, thereby protecting their health and that of their loved one at an optimized price. Water quality, water scarcity, pollution, decontamination are here to stay, and we are the key to enable growth whilst protecting human health and quality of life. I'm on Slide 21. And decarbonization is a powerful lever and source of value creation for Veolia and its customers over the long term. As you remember, we've announced with our GreenUp strategic plan an acceleration of our own decarbonization agenda, with a target enhanced to minus 50%, Scope 1 and 2 by 2032, and net zero by 2050, a trajectory compatible with the 1.5 degree agenda. These targets have just been validated by the Science-Based Targets initiative, SBTi, the international reference organization in the field. In particular, SBTi has praised Veolia for its ambitious net zero target recognized as the most ambitious in the current SBTi process. Slide 22, you will see that this trajectory is based on the series of projects and investment, including exiting coal in Europe, which carries a good IRR or methane capture from nonfields in Latin America. To sum up on the Slide 23, Veolia is a unique global leader in ecological transformation, ideally positioned to address fast-growing demand trends across the globe from water scarcity to decarbonization and decontamination to protecting human health. Slide 24. The very strong H1 results allow me to fully confirm our target for 2024, and we are very much in line with our GreenUp objective. The financial and non-financial objective of our strategic plan are summarized on Slide 24, and they include current net income growth of 10% per year on average, with dividends going in line with EPS. I now over to Claude, who will detail the H1 2024 results before we go for questions.

Thank you, Estelle, and good morning, ladies and gentlemen. I'm very pleased to be with you this morning for my last Veolia earnings presentation. And you will see that the results are once again very strong. Emmanuelle, our Deputy CFO, will take on the full role on September 1 here with me. And most of you already know her as she was in our workforce for the past 2 years. You are in good hands. And moving back to the numbers, as Estelle already highlighted, our H1 2024 results are once again remarkable and allow us to be very confident for the rest of the year. With EUR 22.1 billion revenue, we experienced a good organic revenue growth of 4.4%, excluding energy prices. It is a result first of our 3 strongholds growing by 3.4% and driven by good commercial momentum, improved water and waste volumes, continued favorable indexation on our long-term contracts and price increases on nonindexed businesses. And second of 3 boosters, which are growing much faster, as Estelle said, that's 6.9% with high-demand water technologies, hazardous waste and decarbonized energy. Taking into account the impact of the lower energy prices, that has almost no impact on EBITDA, H1 revenue was up by 0.4% despite unfavorable weather. Thanks to the operating leverage and the good delivery of synergies, we enjoyed a solid organic EBITDA growth of 5.7% at EUR 3.266 billion and a current EBIT growth of 6.6% at EUR 1.730 billion. Our current net income increased faster to EUR 731 million, up 15.2%. Net income I would say arose by a remarkable 24.5%, thanks to a strong decrease of nonrecurring charges. We've once again demonstrated that even in a rather complex economic context, Veolia is able to deliver fast-growing results. This is due to the strength of our businesses, largely immune to macro for about 85% of our revenue. Net financial debt remained well under control at EUR 99 billion after the dividend payment in May. You can also see on the slide the detailed ForEx impact, which were negative H1 minus EUR 442 million at revenue level and minus EUR 95 million at EBITDA level. Assuming the exchange rates remain at today's level, the full year impact at EBITDA level would be between EUR 80 million and EUR 90 million -- minus EUR 80 million and minus EUR 90 million as we expect a slightly positive ForEx impact in H2. The small negative ForEx impact at the current net income level should be offset by the capital gain on the SADE disposal, and we confirm our annual guidance of current net income above EUR 1.5 billion, whatever the ForEx. As a reminder, as we operate in local currency, price impact are only translation and not transaction impacts. I'm on Slide 27, where you have our usual revenue bridge detailing the different FX, ensuring our top line increasing growth of 5.1% composed of commercial wins and pricing, the 2 green boxes on the right-hand side of the bridge. Looking at the full bridge in more detail, what do we see? First, ForEx had a negative impact of minus 1.9%, mostly in Latin America. Scope impact is limited at minus 1.1% with the SADE disposal for more than EUR 300 million and a few tuck-ins. For organic growth, we continue to enjoy solid growth of 4.4%, excluding energy prices, which is fueled by good commercial momentum, volume growth, strong work activities, price and indexation increase in water and waste. The main item on the bridge is, of course, the lower energy prices for minus EUR 917 million. Recycled prices has stabilized and the impact is insignificant in H1 at revenue and EBITDA levels. The weather impact was unfavorable, minus 0.6% compared to 2023, which was already mild. As I said in Q1, we experienced, in fact, the warmest winter in the past 30 years in Central Europe, and the heating season this year stopped 2 weeks earlier than last year. I'm moving to Slide 28, where you can see the revenue evolution by geographical segment, and I start with Water Technology, which is 1 of our 3 boosters. It delivered another very strong Q2, both in terms of revenue and bookings. Revenue are up 15.5% with sustained growth in all our various lines of business. In terms of booking, we registered a record high level of EUR 2.8 billion in H1 with big wins in desalination, microelectronics and oil and gas. In the rest of the world, all regions performed very well. Notably, Australia had a very strong growth of 6.5%, thanks to good waste performance, several contract wins, strict pricing discipline and good landfill volumes. Latin America grew double-digit. Underlying activity was well oriented in Brazil, Chile and Colombia with several new contracts. For example, Las Salinas in Chile for solar mediation or Braskem biomass in Brazil. Africa, Middle East, revenue is up 4.6%, thanks to strong business in Morocco and new energy efficiency contracts in the Middle East in Dubai and Abu Dhabi. North America continued to enjoy solid organic -- solid booster performance and good water activity. In hazardous waste, we managed to improve the mix and average prices are up 6%. In Asia, we have a solid growth in Hong Kong, plus 8%, thanks to the very strong performance of our waste activity and our energy efficiency business. Japan was up 8.9% with strong performance of water. Rest of Europe revenue was up 1.4%, excluding energy prices. In Central Europe, we had a strong water activities with good volumes. In Northern Europe, we registered, I would say, again, an outstanding U.K. performance, good indexations and strong PFI activity with a record availability of 94.6%. Southern Europe enjoyed strong activity and improved tariff indexation in water in Spain. Finally, in France, after a difficult 2023, we continue turning the tide after a good Q1. Revenue grew by 2.9%, an improvement after only 1.4% in 2023, thanks to good performance in Water and Waste. Water activity is well oriented with indexation at 4.6%. We enjoyed good commercial momentum and good pricing in waste in France. I'm now on Slide 29, you can see the main frame by activity that I will detail in the next slide. As we expected, Water and Waste businesses enjoyed very good growth in H1, plus 6.4% each, which is remarkable in the context of lower inflation. We are fueling the revenue and the EBITDA growth of the group. As usual, we review our activities one by one, and I start with Water, our largest activity, representing 40% of our revenue. Water business grew by 6.4%, driven by Volumes/Commerce/Works for 2.2% and pricing for 4.2%. Thanks to good volume in Central Europe, France was slightly down on volume, minus 0.5% due to rainy weather during the spring as well as Spain, minus 0.6%. We have continued favorable tariff indexation in France, in Central Europe and in the U.S. with double-digit increase after the recent rate cases in New York and New Jersey. The semester was, of course, marked by the signing of the new SEDIF contract for 12 years as well as the new Saint-Fons wastewater treatment on contract near Lyon, which is fairly built. H1 was also marked by an outstanding water technology performance, in particular, our main brand businesses, the project business with a continuation of contracts in the U.S. and the start of the desalination project in the Middle East. We have also the chemical products, well oriented with good volumes and price increases. I'm moving to waste on Slide 31. Waste activities grew at a faster pace than in previous quarter by 6.4% compared to 3.4% last year and 5.5% in Q1, thanks to continued pricing power, improved volumes in Europe and good commercial momentum in Australia and Latin America. To take a few examples, in Europe, the U.K. had a very good start to the year with very strong PFI and also C&I performance. In Germany, we had a strong commercial activity and volumes slightly increased after a difficult 2023. France was better than last year in terms of volumes and also in terms of profitability. Hazardous waste remains well oriented in almost all our geographies, and we continue to experience good pricing power in the U.S. Recycled prices, as I said, had a neutral impact as price increases in Q2. We manage our electricity from waste sales well, thanks to our hedging policy with almost no impact. Finally, energy activities decreased by 14.5% due to energy prices and milder weather. Intrinsic energy growth was 1.4%, excluding weather and energy price impact. Thanks to our business model with indexed tariffs and energy prices essentially pass-through, and thanks to our hedging policy, we have been able to protect our results. Energy price impact had almost no impact on EBITDA. And Energy EBITDA will remain at a very high level in 2024 as we anticipated and as we are demonstrating. Weather was again unfavorable due to the very mild winter in Central Europe with an impact of minus 2.2%. We also ramped up our very large district heating contracts in Tashkent. On the electricity side, we are protected by a hedging policy will enable us to mitigate the market price evolution. As a reminder, and as part of our call exit program, we started with new high-efficiency cogeneration with higher EBITDA such as Braunschweig in Germany and Prerov in Czech Republic, and we have more to come with Poznan in Poland in 2025. Finally, we signed significant new energy efficiency contracts in Belgium, Italy, Middle East and Hong Kong. I'm on Slide 33, and you have the EBITDA evolution by segment. Water Technologies registered an outstanding EBITDA growth of 31%, thanks to very high revenue growth, operational efficiency and synergies. Rest of the World EBITDA is up 11.5%, notably in North America, Africa, Middle East and Pacific. In Rest of Europe, EBITDA was up 1.2%. Good Water and Waste performance was partly offset by an adverse weather impact. We also initiated profitability enhancement action in France with a strong commercial focus and very specific efficiency targets with quick returns. As a result, France EBITDA is up 5.1% in H1. I'm on Page 34, and you have our usual EBITDA bridge. We delivered a strong EBITDA growth of 5.7% like-for-like fueled by the combination of the solid underlying revenue growth, strong efficiency and synergy ahead of schedule. In detail, ForEx negative impact reached minus EUR 95 million, as I said, mainly in Latin America, scope included the disposal of SADE from March 1 and the integration of bolt-on assets in Germany. Energy and recyclates impact was slightly negative, minus 1.2%. And as we expected, our EBITDA for Energy business is almost not impacted by the energy prices. Weather had an impact of minus 1.3% or minus EUR 42 million with a mild winter in Central Europe. EBITDA intrinsic growth was, therefore, fueled by the 2 following effects, a more robust commerce and revenue impact for 3.3%, continued strong net efficiency and synergies for 4.9%. The synergy delivery continued to be ahead of target, reaching EUR 71 million in H1 and EUR 386 million cumulated since the closing of the acquisition of Suez, which is remarkable. I'm moving now to Slide 35. And let's see, the EBITDA increase, excluding the current EBIT and the current net income. Current EBIT grew by 6.6% to EUR 1.730 billion. Renewal expense of EUR 154 million are comparable with H1 last year. Amortization and OFA repayment at EUR 1.528 billion is up 3% more than last year due to the ramp-up of our contract in Uzbekistan. Industrial capital gains, net of provision at EUR 98 million are stable. JVs amount to EUR 49 million, almost stable compared to last year. Our current net income increased faster to EUR 731 million, up 15.2%. Cost of net financial debt increased by EUR 19 million to EUR 331 million due to a favorable one-off last year. Excluding this one-off, net cost of financing is stable at 3.83% in H1. Other financial income and expense increased from EUR 120 million to EUR 177 million. The full year number last year was EUR 340 million with a very low H1 and a much higher H2 due to a favorable one-off in H1 2023, which was reversed in H2. This year is more steady, and we expect around EUR 350 million for the full year. We registered net financial capital gains of EUR 53 million mostly due to the SADE disposal. Current tax rate stood at 26% compared to 28% in H1 last year, and we expect a 27% tax rate for the full year. Minority interest slightly decreased in H1 due to slightly less contribution from our BUs in Chile and in Central Europe, where we have minorities. For the full year, we expect around EUR 400 million of minority interest. After a strong H1, we are well on track to meet our objective of current net income above EUR 1.5 billion. I'm on Page 36 and let's see how the current net income translates into net income group share. Net income increased by 24.6% to EUR 651 million compared to EUR 523 million last year. Nonrecurring items, which is a sum of the 3 lines decreased from minus EUR 139 million last year to minus EUR 80 million this year due to much lower integration costs. I'm now on Slide 37. You see that CapEx remained quite stable, in this year and included a EUR 102 million of decarbonization CapEx with good progress on our Poznan project and EUR 86 million of Hazardous Waste new projects, particularly in the U.S., in the Middle East and in Germany. Seasonal reversal of working capital was slightly higher than last year at minus EUR 998 million compared to minus EUR 821 million last year due to unfavorable calendar effect, which will not impact the free cash flow delivery of the year. We had higher payments in H1 2024 for CO2 quotas in Central Europe for EUR 100 million. And we received high advanced payments in Water Technologies last year for around EUR 50 million. Free cash flow improved strongly in Q2 by EUR 389 million to minus EUR 284 million in the first half. Net financial debt reached EUR 9.9 billion, including the final repayment of the hybrid debt for EUR 200 million after the renewal of our EUR 600 million hybrid debt in November last year. Our solid investment grade rating has been confirmed by S&P and Moody's with a stable outlook. Taking into account the usual working capital reversal and the free cash flow generation in H2 and the net cash proceeds from disposal and a few acquisitions, we expect the leverage ratio at year-end to be in the same range of last year that was 2.74. I'm now on Slide 38, and you have the details of the net financial debt variation where you can see the different effects I have just highlighted. To conclude, we, of course, confirm our ambitious guidance for 2024. Revenue continued solid organic growth, excluding energy prices, EBITDA organic growth between 5% to 6%, more than EUR 350 million of efficiency gains, more than EUR 400 million cumulated synergies at the end of 2024, current net income above EUR 1.5 billion, which means a double-digit growth compared to 2023, leverage ratio below 3x. And as usual, our dividend will grow in line with our current EPS. Thank you for your attention.

Thank you, Claude. And now we are ready to take your questions.

[Operator Instructions] Our first question comes from the line of Alex Roncier from Bank of America.

And I think I should first and foremost and on behalf of the analyst community, thank Claude for his work with us and wish him the best for what's next as well as congratulate Emmanuelle on her appointment. Now just about question. I've got a lot, but I'm going to limit myself with 3, if I may. The first one, a topic on the Olympics. We've seen like a lot of news flow about the quality of the River Seine, it's been quite a few problem for the start of the triathlon. Do you think that could raise the profile of how much water quality and water treatment should be taken carefully into consideration by public authorities? Could we see actually a change in the Paris operation and perhaps a reprivatization there? Or could that in more general terms drive more investment you think for water treatment in France and abroad? The second one about the recently announced acid sulfur excel. I think you did mention in the press release that it wasn't strategic. What other assets you currently have in the portfolio that you would not consider as such, given that the acid sulfur one was quite a big chunk, I would say, at EUR 650 million sale. Is that because really of the lack of synergies with the rest of the group? Or do you think there's also some consideration on an ESG angle as well? And last, about recyclates. I think it's going relatively well. We even had a marginally positive contribution in H1 already. How much do you think that has to do with volume? How much do you think that has to do with price, but perhaps maybe a little bit more far fetched is how much does that to do with regulation? We've had new export restrictions in Europe and in the U.K. or even macro. China is always a big delta. We've also seen Indorama Ventures announcing a pet plant closure in Europe more recently. So any commentary about that and how you expect this EUR 2 million to EUR 5 million contribution in H1 to grow into H2 would be very interesting.

Thanks for your question. I guess starting with the Olympics was a nice one. It's a beautiful weather outside today, but it's fair to say that it was quite a few days of nervousness for the organization team, which will not happy us. Actually good question. I think you're right, the fact of being able to see in the world that now you can swim in the River Seine yesterday because it was the case of the triathlon yesterday, is a key testament to what we can do. We, as in, I guess, multiple actors involved from local authorities to people who bring their technology like Veolia, if you really want it. And symbolically, that was a very important move really above the triathlon one. So what to expect from that? I guess first thing is, I remember when we were able to swim back in Copenhagen, where Veolia was very much involved a decade ago to be able to depollute the bay of Copenhagen, which had been impossible for years or for centuries actually and wasn't -- hasn't been for decades and is back to that. It was a very important move of the entire country of taking back control of their own destiny in a way, symbolically. So it has given a lot of projects following that. And maybe Paris is another one. What's next? Yes, it could be investments. But I guess more generally, public and private partnerships to deliver this type of massive project is really something which is at the forefront of a lot of people's mind because you need what? You need a political will for certain. You need investments. But you need as well the right technologies, know-how and people who already have done that, and Veolia is actually a leader of this type of technology. In terms of the assets of Rexel is a strategic sale in a way more so than a purely financial one, if I may summarize it this way. It was a business we were okay with, that was making a reasonable amount of money. The question is not that one. The question is to make choices. And the choices are set up in the GreenUp strategic plan with 3 growth boosters and 3 growth boosters in terms of geographies, where we want to put priority in our investments. And sulfuric acid regeneration was not one of those, plus you're exactly right, there was no synergies with the rest of activities, neither in the U.S. nor elsewhere. And no ability to duplicate because it's always something we're trying to have a look, can we duplicate somewhere else in the world. Happens that the refineries in the U.S. are very different from that's elsewhere. So we had availability to duplicate, hence, the sale. We're happy about the price, and it enables us to reallocate this money, into either debt reduction or new projects if we have good projects like we've demonstrated in the past. Again, the overall constraint is a 3x EBITDA level. We have more projects than that. We're happy about this type of leverage, which even should be below at year end, but in a way, transforming progressively our portfolio to focusing on what creates the most value is a global plan. And I would say it's only the -- I would say it's the beginning, but it's one translation, but we know we have a lot of ambition to transformation of the portfolio and value creation in that way. What's next to be sold? I won't tell you. That would be a surprise to you. The nonstrategic, which you can read from what's strategic in our GreenUp plan is a good proxy for that. But again, the idea -- I'm more interested in the growth of Veolia. And in H1, I'm very happy that one of the important drivers of very good performance in H1, but the top line growth, in particular, with our boosters, boosting activities and in geographies. So I think that's a -- we haven't seen only the traditional, I guess, engine growth of cost cutting, but now we have a very powerful one as well in terms of the growth of our top line. In terms of -- and there was no ESG-specific concern here because as you know, what we measure in ESG and Veolia is our ability or not to depollute rather than an absolute value, it's more the trajectory. And here, we had the ability to have the trajectory go down, so it was not really the main concern. It was really the strategic and lack of synergies. In terms of recyclates, nothing massive so far. So I think we have it on the grid, which is Page 34. Basically, we've had a little plus in cardboard, a little bit minus in plastics. All in all, no major difference. What we expect, so it's plus EUR 2 million in -- plus EUR 5 million, sorry. Thank you, Emmanuelle, plus EUR 5 million in EBITDA in the first half, which is not significant at all. What to extend in the second half? All the pieces of the jigsaw you mentioned have an influence on commodities from China to export and all the rest, but you always have factors in all directions. So I'm usually not even trying to anticipate. I'm trying just to protect various results as opposed to anticipate commodity price because, as you know, we are very much hedged in many ways. So that's not my priority.

Our next question comes from the line of Jenny Ping from Citi.

I've got 3 questions, please. Just following from Alex questions with regard to capital allocation. Obviously, you're not going to tell us deal by deal what you've got planned. But can you give us a sense of the scale of assets that's being considered for asset rotation at the moment because many of us didn't actually know that you had a sulfuric acid asset in the U.S. So just trying to get a sense of what you've got tucked away in the portfolio that could potentially leave the group that doesn't tick all the boxes. So that would be my first question. The second one is with regards to the capital gains of the U.S. disposal. Can you give us a sense of the likely size of that and where that's booked? Because I note the SADE capital gains was much bigger than the market has anticipated. So some sort of guidance on that would be helpful. And then very lastly, a detailed question with regards to the EUR 98 million of provision and fair value adjustments line. Can you give us a sense of what is repeatable in there? What is not going to be repeatable? And what's just generally the sense of the [indiscernible], please?

Okay. So starting with the capital allocation and the size, of course, it depends on the opportunities. So asset rotation doesn't mean only sell. It means acquiring and selling whilst maintaining the 3x -- this year 3x EBITDA leverage. If you look at our strategic plan called GreenUp, we've given an order of magnitude over the duration, the 4-year duration of our plan and said it's around EUR 2 billion altogether. So we've already done a bit more than half of that just in the signed -- in this half year alone. And again, we have an ability, depending on what creates the best value. We're always constantly reviewing our portfolio. So there is not, I guess, a fixed list. There is more an agility in our way of thinking, which is we have the potential list and we are ready to activate and to speed up, in particular when we have good opportunities, which could create more value. So the order of magnitude that we set in our strategic plan is EUR 2 billion over the 4 years plan. In terms of leverage, if I understood well the second question because the line is a little bit bad. We anticipate to be below 3x by year-end. And Claude, in his speech was even more precise and that said, below 3x, if you think of last year and the year leverage, which should be around the same order, which was 2.74, 2.75x. So if you think of this type of range, you have a good proxy for where we expect the debt at year-end. Emmanuelle, for the capital gain?

Yes. Good morning, everyone. I am delighted to be with you this morning for the publication of this excellent H1 results. Thank you, Estelle, Claude and to you for your warm welcome words. Regarding the recent disposal, the capital gain that we will see is limited. It will be around EUR 10 million after reallocation. Regarding your question on [indiscernible] capital gain that provision, asset impairment and other, it's very similar to what we had last year.

So I guess capital gains, we always have every year a little bit of capital gains. Would you refresh our memory about the last few years? So in a way, and the seasonality is such that we don't -- we shouldn't anticipate another EUR 50 million or something in the second half. So that's pretty much it for the year. That's what was just said by Emmanuelle. And altogether, it's very comparable for the last few years. So there is no big plus this year. Can you refresh our memory on the last few years' capital gain?

Yes. For example, in 2022, we had EUR 70 million of financial capital gains. And in 2023, we had the addition of EUR 30 million industrial capital gains and EUR 11 million financial capital gain. So in total, as Estelle said, is always a few dozens of millions of capital gain every year at Veolia. This is normal, and this is in line with the last 2 years.

So really, really nothing specific this year. And I must say that we had a negative ForEx this year on an order of magnitude which was larger than last year. Nevertheless, we maintain our EUR 1.5 billion -- or above EUR 1.5 billion net result in whatever the ForEx, which I think is an important one.

Our next question comes from the line of Arthur Sitbon from Morgan Stanley.

The first one is on disposals. I mean as you were saying you've been quite active this year with a SADE, Lydec and now the activities in the U.S. Should we interpret that as a signal that you're willing to accelerate the shift of your business mix from the 70% stronghold activity, 30% booster to something potentially more balanced between the two? That's the first question. The second one is on your net income target for 2024 of more than EUR 1.5 billion. I was wondering if you could walk us through the moving parts since the start of the year when the target was formulated. I think on the positive side, there is the recyclate prices, the capital gains, synergies seen ahead as well. On the other hand, there is FX and weather. Am I forgetting anything? Net-net, has it been a modest positive or a modest negative evolution? And last question would be in your targets, generally speaking to 2027 on net income, do you assume you'll have every year at least a bit of capital gains or these targets are assuming 0 capital gain in every year to 2027?

So you're right, we signed for more than EUR 1 billion for the first half of the year of sales. We've actually signed for EUR 700 million of acquisitions as well. So there is pluses and minuses. And it's exactly right that the intention behind that is exactly to transform the mix progressively towards more value creation. And in particular, value creation in the booster activities and geographies. That's exactly the GreenUp strategic plan, which is in action in the first half as we've seen. So transforming the portfolio is a key element. And that's why when I said we have 3 value creation levers, revenue growth, cost cutting and balance sheet usage and rotation and transforming of our portfolio. So that's exactly the 3 together. In terms of the EUR 1.5 billion target net results, you're right, it's 6.6% I would say, I just said whatever the ForEx. And if you list the plus and the minuses. On the plus side, recyclate it's almost nothing. So we put it in really on the plus side. It's on the neutral side. On the plus side, you have capital gain. But again, same range as last year and the years before. So I'm not so sure I could put it in the plus side as it's exactly in line with the years before. So it doesn't bring any evolution compared to last year's net results. On the plus side, and that's the real plus here, that's the commerce. That's exactly the growth I've talked about, the plus 6.9% in our booster activities, the plus 7.6% in our geographic activities boosters. For instance, everything we said about water tech, this is the real plus in the EUR 1.5 billion target. And of course, the second big plus is the continued cost-cutting and synergies as well. On the minus side, we had a big minus in ForEx, which was to expect the second part -- I mean it won't be the same, should be at bit of a plus. But altogether, by year-end, we expect something so more around with a minus EUR 80 million or something like that at EBITDA level, of course.

Which should be the same as net income level.

So that's a big minus. Again, second half should be a little bit plus, but we have the big minus in the first half as well as the weather, which was a big minus. As we've seen, EUR 40-something million negative in the first half. So the way to have look at it is really on the bridge of EBITDA, which is Page 29, on which I add, again, the capital gain, which, of course, is not at EBITDA level since it's quite comparable with the years before. So that's really the way to look at it. So big plus in e-commerce and growth as well as cost-cutting and efficiency. And in terms of the -- yes, I think you answered the capital gain question as well. What do we anticipate in the next years? Again, every year, we have a few dozens of millions of capital gains regularly. So should be the same. We don't expect a big plus compared to the trend we've seen in the last few years in our strategic plan.

Regarding the H2 that you were mentioning Arthur, as you know, we have the current income, which is higher in H1 than is issue due to our...

And in H2.

H2 than in H1 due to our seasonality. So we are able to fully confirm our guidance at EUR 1.5 million for the end of the year. We have the intrinsic growth of EBITDA, which is at 8%. We expect for the second part of the year to have a net result, which is at least at the amount of H1, taking into account that we will have lower financial charges compared to last year in the second semester.

So don't multiply by 2. H2 is always higher than H1. So we fully confirm the above EUR 1.5 billion net result, whatever the ForEx.

Our next question comes from the line of Juan Rodriguez from Kepler.

First, I would like to Claude all the best on new projects and welcome Emmanuelle. So 3 questions on my side, if I may. The first one is on the net debt level. What level of working capital are you expected by year-end after use for reversal probably slightly neutral or negative? You signaled if I'm correct, something around the 2.75 leverage level. So we should be looking at something -- we're looking at consensus numbers, looking at something within the EUR 18.6 billion net debt by year-end. So that will be the first question. The second one is on the M&A. On the U.S., you're seeing around EUR 320 million revenues for those assets. Any color on what EBITDA contribution or average margins of these assets were? And what are the tuck-in acquisitions that you signaled in Portugal and Brazil? So this will be at the M&A. And the third one, if I may, is on the guidance on the target. You signaled that you're ahead on cost efficiencies and on synergies. What is slightly weaker than you expected from the beginning of the year that you confirmed your guidance [indiscernible]? Is it mainly the rest of EU with a 1.2 percentage growth? Or what else can we think in that sense?

So maybe Claude on the working cap by year end.

So on working capital by year-end, this is what you have seen as on is the reversal of the working capital in the second part of the year. So nothing else to expect from Veolia. We will have some negative working capital and positive in the second half. And as I said, we have calendar effects on the water tech and CO2 that will be -- that will have a positive impact on free cash flow in H2. M&A contribution of tuck-ins?

So I guess in terms of region, we are happy about the sale because the EBITDA was very volatile from 1 year to the next, given the type of activities linked with refineries. So it's difficult to give you we had ups and downs. But if you think of it around, what, 9x EBITDA, you're not far from the reality of an average, something like that. In terms of tuck-in in Portugal and Brazil, maybe a comment on those?

Tuck-in in Portugal and Brazil. So we have some additional waste activities in those 2 countries that we bought with the discipline that you know and because we have a higher demand on IRR in Brazil, the multiple on EBITDA will be lower. So it's a good acquisition with a low multiple in Brazil. And in Portugal, it's in the range of 7x. So good acquisition that we will fuel our activities, where we have in those different businesses in Brazil and Portugal.

So typically, the two type of acquisitions we make are one in the boosters, other activities or geographical boosters. And if we do a few in the strongholds, which happens, it's usually because it's high synergy, quick to realize and create the value quickly because it's adjacent to an activity where we have. So those are the two type of areas. And in terms of Portugal and Brazil, that's exactly the second case I've just highlighted. In terms of the -- our guidance for the year and how do we see the rest of the year, we have with the synergies and the cost cutting. I would say a few things. You're right, very good results for H1, exactly in line with our 5% to 6% EBITDA range. We don't expect anything different in H2. So there is no bad news we expect or no signal at all that the trend would be reversing or doing anything but like in line with what we've seen in H1. The only nuance I would make is, as usual, weather because I can do a lot of things in piloting the group, but the thing I really have no impact on is the weather, which you know at year-end could have a little bit of an impact. So that's the only the unique caveat in terms of that. But irrespective of whatever the weather will be and the ForEx and all the rest, we will maintain and we will do our guidance.

Our next question comes from the line of Ajay Patel from Goldman Sachs.

I wish Claude all the best. I guess my question is just one issue really, which is the synergies, right? It's a sizable proportion of growth going forward and has been historically. And you've been running -- you've been doing a great job and you're outperforming the targets that you set. I wonder whether you could just unpack how that has progressed from its announcement to what you have delivered so far? What's been easy? What's been hard? It feels to me that this number has scope for upside. When will you kind of update the market on how this looks or at least give us a bit of a feel for if there is further to extract it?

So thanks for your comments that it's been running well. We put a lot of report to be able to do that. I guess it was not just by miracle. It was a lot of piloting, preparation and attention to the delivery every single bit of it in every single country concerned by it. If you think of a few years ago, when you said from the announcement, the announcement of the EUR 500 million synergies, date back from August 2020. At that time, we had in line a scope of the acquisition, which was larger than the scope we recently have been acquiring considering the various [ anti-trust ] divestiture in particular. And nevertheless, we've confirmed by EUR 500 million. So in a way, we've already raised the fact our targets when we had the final scope of what would be the Suez acquisition a year after the initial announcement. From this day, it's safe to say I was absolutely focused and I still am absolutely focused on delivering on our commitment. You could see synergies as reservoir, and at one point, there won't be anything in the reservoir anymore. But the good news is we have an infinite, almost, a source of efficiency and cost cutting with our efficiency program. And this one is not as not the vacation to come to end at all. And we've seen -- we've been delivering EUR 300 million and then EUR 350 million which we've raised in our GreenUp plan. So I'm very happy to see in H1 that, in particular, the efficiency plan has been above target with a good 44% retention rate. So I guess, this one, if you think the synergy at one point, we were quick in delivering, but the reservoir as an end, the efficiency plan is an infinite forever almost type of one. In terms of what's been tough and hard and all the best, again, nothing has been neither easy nor hard. It's been a lot of preparation and attention to detail and delivery. Originally, we were leveraging to HQ staff in the synergies, HQ, meaning a lot of real estate merging HQs in those countries and things like that or renegotiating the real estate cost. Then we move to very operational things typically in Australia, where we had EUR 1 billion of waste in Veolia, EUR 1 billion of [ commitment ] and we put them together. So we're talking good optimization, depot, merging and the optimization of the fleet of trucks and stuff like that. Now we've moved to a third phase, which is about procurement, as you see, almost 50% of the sources of synergies in H1 as well, as you know, taking off quite vibrantly of the operational synergies in water tech business. So small sources of reservoir, which we are tapping into one by one constantly. In terms of the cost-cutting program, so the infinite one, we've launched specific programs in addition to the classical branding ones. One in France and one in China, just to give you an idea. One in France, which is starting to bear fruit, as you can see in the results in H1, and I'm very happy with that. And another one in China because we were in a self-help measure, not waiting for the economy to go up, but actually, we tested already to the level of activity we're seeing. So this is quite typical. So I wouldn't say it's hard or difficult. It's more agile. So we're adapting quickly. So 2 years ago, maybe I won't have mentioned France or China but we've designed and delivered, and we are starting to see the results in our actually group results. So agility and adaptation for me is absolutely key. And again, cost cutting is in our DNA.

Do you mind if I just have a follow-up? Is there anything in the second half of the year that would prevent you moving as fast as you have over H1 in your synergy benefits?

I guess it's a reservoir. So once you've done it, if we've done it in H1 as opposed to be anticipated in H2 as when it's done. You know what I mean. There is an element of it not a branding for everyone. So the question is not -- it's very different from the efficiency plan, which again is a series of things, which has a running rate for years to come. You must think of synergies that when you've achieved one, this is done. It's in the bag, if you want, in terms of results, but it's done. But again, the efficiency plan in H1 has more than been overperforming as well with a good retention rate.

Our next question comes from the line of Olly Jeffery from Deutsche Bank.

The first question I have is on, you comment that the -- one of the things that's out of your control for the second half of the year is weather. And it was a minus EUR 42 million EBITDA impact in the first half year-on-year. At the margin, how has that changed since the end of the year? And is it been lesser some than expected so far so we should expect that to be a large negative number in the second half? And then just on your confidence around being able to get to the EUR 1.5 billion in come what may, is that because with synergies, you describe it as a reservoir, is that because if you're the weather impact is slightly more negative than you'd anticipated, you can bring forward more synergies into this year to help you get to that EUR 1.5 billion. And then my last question, please, is the industrial gains line items of EUR 98 million for H1 net provisions and asset impairments. What was that in Q1, please, I don't think you gave it in Q1.

In Q1.

So in terms whether H2 versus H1 in -- I guess H2, you have the district heating season, which starts in October. So it's more Q4 usually than anything. And in water, it's more a summer one. So I guess the weather is a mix of basically for the first EUR 40 million negative for the first half was half in energy and half in water, roughly to give an idea. So do I anticipate it to be the same in second half? The answer is I don't know, again. So that's why I maintaining this plus 5% to 6% EBITDA range in terms of growth, which is exactly where we are in H1. And there is no reason why, again, the trends are exactly the same in H2. So again, I want to anticipate the weather for you. In terms of the EUR 1.5 billion commitment, you have a lot of positives and negatives, as I said, and we managed to fulfill our commitment to be above the EUR 1.5 billion. I'm not so sure I understood your way of thinking the EUR 1.5 billion. If you could resay that because I haven't followed your thinking.

So the question was you have confidence around the EUR 1.5 billion. So I was wondering if the weather impact, let's say, a very wet summer in France, for example, and therefore, your water weather impact is more negative than you might think at the moment in the second half of the year, my question is, might you be able to offset that by bringing forward more synergies into this year from next year? The way you describe it as a reservoir, it sounds like it's something that's potentially within your control to bring into your P&L potentially kind of as you need to? Or is that not the right way to think of the synergies? How about the offset and mitigate and...

Now I understand it. So I would say not exactly the way I would have a look at it. If your question is when things go wrong, say, in the weather, what do I do, to reformulate your question? What do I do is it would be more to accelerate the efficiency plan rather than the synergies. Synergies, as I said, is under way and they deliver it. Efficiency, it's more something we are able to adapt. And that's exactly what we've done with the France and Chinese specific plan. That's exactly what we've been able to do, for instance, during COVID, where we've put a specific adaptation plan, which made us able to come back to our results pre-COVID in less than 6 months. So I guess, the lever and turning a little bit more in the screw would be more on the efficiency plan than on the synergies plan, the way I look at it. In terms of the industrial gain, the EUR 98 million, Emmanuelle?

Yes. Regarding your question on the capital gains. So a part of it was, of course, in Q1 and part of it was in Q2. So we had around EUR 30 million, EUR 35 million in Q1 and EUR 60 million to EUR 65 million in Q2. Please keep in mind that regarding the EBIT evolution, we had a calendar effect linked to our share plan. We know this impact, which is purely calendar. Usually, you have this impact which is in Q3, you would have an increase compared to last year, which is of plus 7.5%. The run rate that we will expect in the second part of the year.

So because the employee shareholder plan, we launched it earlier than last year in Q2 rather than Q3, just to have it aligned with the launch of our strategic plan. So it's really just a calendar effect. But I guess, seasonality has always been like being S2 -- sorry, H2 higher than H1 in many ways.

I just a follow-up on that. How should we see that figure for the full year in total?

I guess it's comparable from 1 year to another one. There is nothing significant here to take into account when comparing with the overall result of last year.

Our next question comes from the line of Tancrède Fulop from Morningstar.

I have two. Regarding plastic, you mentioned a small negative effect from recyclates, and the backdrop is challenging with virgin plastic being cheaper than recyclates. So if you could elaborate more on your exposure, maybe current utilization rate of your capacity and your view of the future and maybe some tailwind from regulation. So it will be my first question. And second question, if you could guide us regarding the annual increase in your -- the number of shares through 2027 and related to that, so every year, there is a bit of dilution from new shares from remuneration scheme. So why don't you buyback those new shares?

So on plastic. Plastic we have a very, very different type of plastic recycling facilities. We have 35 across the globe. Some of them are in PP, some of them are in PET. The reason why I mentioned that is some of them are booked, I mean, the recycled by say bottlers. Others by automakers to make bumpers. So it's very different from one project to the next. What have we seen? A vast majority of our plants are not impacted by the virgin price and by oil, therefore, up or down because we have protected with a kind of transformation margin, if you wish, to our customers and customers buy at a higher price when it's higher price of the input and vice versa. So it's more a tolling model, if you wish. So our transformation margin, which is fixed, rather than linked on committees. We have a few which are left, which are more linked with commodities, and that's the one which has leave to the negative impact, but it's not massive. And the plants which won't be at full capacity for a few quarters, we usually tend to mothball them. And we've done that in the past nothing specifically. Tailwind or the opposite from regulation. Actually, you might see in Europe, it looks to me like we would be more at the bottom rather than anything in plastics because there is an obligation for all bottlers in Europe to have a certain content. I never remember. I think it's 20% or 35% of PET recycled content within their bottle, otherwise, are not supposed to be able to distribute anything in Europe anymore. So we have an incoming calls. I guess the ability to anticipate is neither -- it's not exactly the one I would expect. But so far, there is more an excitement on we need that, otherwise, we won't be able to be compliant next year. So I would see more a plus from the regulation rather than a minus going forward. In terms of dilution, I guess the amount we cannot tell you before we have the full results of our shareholders' plan success. And you know the maximum, which is said by the AGM, so we'll see that in a few weeks' time. What I would say is that we always -- we have never been buying back shares in Veolia, as you know in the past. And I guess the question we're always asking ourselves is how to allocate the money we earn. Of course, you mentioned one of the options, but we have a good project, which will be fueling the growth of the group for the next few years, all that within the boundaries of our 3x EBITDA leverage. So it's always an arbitrage of priority, which I have to do exactly in the way I've said it in the GreenUp strategic plan.

Our next question comes from the line of Wanda Serwinowska from UBS.

Just one question from me. Can you please, I think PFAS in the U.S. is one of the drivers we other has been pretty loud about. Can you please share your thoughts about the Supreme Court's Chevron decision, which potentially we can see the regulatory power, which puts the recent PFS regulation risk? What are your thoughts? Do you see it as a potentially a limitation of your growth in the U.S.?

Yes. And you may have seen the Erin Brokovich article in the New York Times yesterday exactly on that one. Actually, on PFAS, whatever the Supreme Court decides we already have business starting because we're not only subject to waiting for the regulation concerning water in the U.S. We already have customers who are actually acting on it, irrespective of what the decision would be. Plus, we already -- we have customers with all the airbase, airports, military side, they all have PFAS. So actually it's not only a U.S. thing. We already have started to have business and actually to sign contracts in the U.S., in Australia, and in Europe, the same front in particular. So in those 3 geographies, we see some first contracts happening now. And of course, decision in the U.S. could be speeding up, but they wouldn't be actually stopping any of this business at all.

If I can follow up. So basically, or not -- you don't see any risk of customers basically not signing the contracts with you in the future.

No. No, that's not what we've seen so far. Again, lots of reasons for that. And if your question relates to the U.S. First is the Supreme Court decision is as far as I do understand or actually waiting for this decision is actually focusing only on the water companies as far as I know. And we have other type of companies, which are ordering PFAS treatment of us, military-based airports and foundries even, and they are not concerned by the Supreme Court like case. And why do they do that? It's usually, why do they ask us to the leach basically, or to decontaminate their site. It could be reputation. It could be legally binding for them. It could be because they don't want to be depolluting with the nearby residents, so all sorts of reasons, which are independent on the legal obligation, which you are referring to. And again, we're not only doing this in the U.S. Australia actually was the first location in the group, what I've heard for the first time the work PFAS an that was years and years ago. And that was with the military actually in Australia.

And, have you ever discussed or would you be able to disclose any numbers about the PFAS business in the U.S.? What is the earnings contribution? What is the CapEx? Any numbers that you will be willing to disclose?

I would encourage you to come and join, in our is it 17th, 19th.

You just find out.

17th of October, water tech deep dive in Hungary.

Okay. I will be there.

You will hear about PFAS on that date. We're doing bit of teasing.

Our next question comes from the line of Philippe Ourpatian from ODDO BHF.

Just one follow-up. Could you just elaborate a little bit how was the trend in July? We know that you are receiving regular feedback from your business units on a monthly basis. And what are the beginning of -- let's say, the July trend you have already recorded mainly regarding water and waste, please?

No change in trends altogether in the group. We haven't seen pluses and minuses everywhere, like every month, but no change in trend altogether. So nothing specific to say about that. I could comment on the weather here and the positive and plus and minuses. But again, nothing significant. You think of July is exactly in the same trend of the first half.

Including good waste in Germany. As we said, good waste volumes, contractual volumes in Germany as far as waste is concerned.

Plus waste in Germany and this is a minus weather related in France in water but more plus in Spain because tourist are there and the reservoir has been filled. So that's why I could come country by country. But altogether, exactly the same trend would be my global comments. Thank you. We're going to close this Q&A session for today. Thank you for your attendance. And again, very happy about this first half of the year's results, which are very much in line with our target and a good start of GreenUp plan. Fully confident that we'll deliver for the full year exactly like we committed to and see you in the quarter.

Thank you, ma'am. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.