Veolia Environnement SA ($VIE)

Ladies and gentlemen, good morning or good afternoon. I am Francisco Silverio Marques, Chief of Staff to the CEO at Veolia and honored to be your host today for what will be not only the presentation of our multifaceted performance results, but actually how for Veolia, multifaceted performance is a natural lever for creation of value. To lead this discussion today, I'm very happy to welcome our CEO, Estelle Brachlianoff; and Emmanuelle Menning, our Deputy CEO in charge of Finance and purchases as well as a few other guests that we'll discover along the way. We will also have time to take your questions that you can ask by using the chat box on the platform. And now without further ado, Estelle, the floor is yours.

Thank you, Francisco, and good morning, everyone. Thanks for joining us. I must say I'm delighted to present our extra financial results today. And we're meeting at a particularly significant moment. The world is experiencing profound instability. War has returned to the Middle East where we operate essential services. Geopolitical tensions are reshaping global trade and uncertainty seems to be the new normal. In this context, some might question the relevance of ESG, and I think it's exactly the opposite. It's precisely in times like this that our strategy proves more essential. Because the environmental challenges we've been addressing haven't disappeared, they've become security imperatives, water scarcity, energy independence, supply chain resilience. These are now matters of national security and economic sovereignty. What's happening in the Middle East actually validates our strategy, reinforces our priorities and confirms the value of our local presence. We generate EUR 1 billion in revenue in the region with minimal capital employed. Our employee security is our absolute priority, and operations continue with enhanced measures, as you can imagine. As a multi-local group, we're not exposed to international trade disruption and the fundamental insight remains. In an unstable world, environmental security is economic security. Our 2025 results prove it. 2025 was the second year of our 4 years GreenUp plan. And whether you look at financial or extra financial performance, this first half of GreenUp is a real success. We are fully on track or even ahead. The numbers are historic. Revenue a bit more than EUR 44 billion, EBITDA up 6.3%, exceeding our guidance, profitability up 150 basis points in just 2 years, current net income up 11.8% on average per year in the same period. And we've achieved our ROCE target of 9.4%, 2 years ahead of plan. Despite EUR 2.3 billion in strategic acquisition, our leverage ratio stands at 2.79x, well below 3x. Financial strength with room to grow. What's driving this? In particular, international operations. EBITDA jumped 9.3% outside Europe and our booster activities in Hazardous waste and Water Technologies in particular. This is transformation in action. Veolia has become more international, more technology-driven with a stronger growth profile. Now to our environmental performance. And here, I'm particularly proud to share that once again, we're not just on track, we are ahead of schedule. 2 out of 3 GreenUp objectives already achieved 2 years early. Think about what this means. On regeneration, we saved almost 1.6 billion cubic meters of fresh water. That's enough to supply the city like London for a year. On depollution, 9.2 million tons of hazardous waste treated, protecting health, securing industrial operations, exceeding again our '25 -- '27, sorry, goal. On decarbonization, we've helped our clients raise nearly 24% more CO2 versus '23. We are accelerating the transition, not just for ourselves, but for the entire value chain. Now why are we achieving such strong financial results? Because impact drive results growth. Everything is really connected. When we save billions of cubic meters of water, we're not just hitting a target. We are securing supply for cities and industries, and that creates demand for our services. That's exactly why our booster revenue is up 8%, EBITDA up 12%. Same goes for CO2. When we achieve 88% employee engagement and improve safety by 17%, we are building the teams that deliver excellence for our customer on a daily basis. And that's why our Net Promoter Score scores at more than 57, which is great. When we reduce our own emission by 19% and deploy 80% of our biodiversity plans, we're proving our solution works. That's why clients trust us. And this is a little bit like a virtuous circle. Impact is a sign of our useful next, which drives prosperity. For our clients, our people, our shareholders, with real impact on quality of life for communities and economic health for all. Our leadership is recognized globally, A rating from MSCI, top tier across Sustainalytics, S&P, ISS and EcoVadis. CDP's highest A rating for both climate change and water security, one of only a handful of companies globally to achieve AA status. Three achievements I'm particularly proud of. First, that specific AA rating from CDP, proof we are delivering environmental leadership and not just talking about it. Second, our Future Generation Council. We brought together 30 young people under 30 from across the globe. And I had the chance to participate at the first 2 sessions. And what's remarkable is how they challenge us, they push our thinking with concrete actionable proposals that go directly to our Executive Committee. Third, our Sequoia employee shareholding plan, 9.35% employee shareholding. That creates powerful alignment and lasting trust. Now we are aiming for 10%. Veolia's value proposition is unique. We deliver environmental security that creates lasting shareholder value. Our clients face unprecedented challenge, water scarcity, pollution, supply chain disruption, the imperative for strategic independence. For cities to deliver services for industries to produce, for economies to grow, environmental security is nonnegotiable. We secure supply chain by mining waste and waste heat for local energy and critical minerals, reducing, therefore, dependence on imports. We protect health through hazardous waste management and depollution, ensuring drinking water meets the highest standard and securing the license to operate for strategic industries such as micro conductors and pharmaceuticals. In a world of instability, environmental security is long-term economic security.

Thank you very much, Estelle. Let's have now a more detailed look at some of these results, starting with decarbonization. Emmanuelle, the floor is yours.

Thank you, Francisco, and good morning, everyone. I am delighted to be among you today to present the progress of our decarbonization plan. What makes Veolia so specific is that our decarbonization strategy is fully embedded into our business model. It's not an additional layer that comes on top. At Veolia, business and decarbonization go along together as our clients need offers addressing both decarbonization and adaptation and our own decarbonization plan generates significant additional value. This alignment explains the fast decarbonization for Veolia. Scope 1 and 2 emissions are already down by 18.6% in 2025 compared to 2021, which is our starting point. This represents a yearly decarbonization pace of around 5% per year, so very significant. We are ahead of our trajectory, and we have already achieved our 2027 GreenUp target, minus 18%, so 2 years in advance. And we won't stop there. We'll keep on deploying our action plan because at Veolia, what is good for the business is good for the climate. And we mainly rely on 3 pillars. First, methane capture. In all geographies, we are increasing the methane capture for further valorization into heat, electricity or biomethane. So less emissions and more revenues. Second, more efficiency in all our businesses to reduce energy consumption and cost. And third, coal exit in Central Europe that I will detail in the next slide. Our coal exit plan is progressing well. In 2025, we went out of coal in Poznan, opening new facility combining gas-fired plant, heat storage and biomass. With EUR 786 million CapEx spend and 5 plant transitions out of 9, we are more than halfway to our coal exit plan. One figures illustrate this progress. Our share of coal-based activity has reduced from 3.8% of turnover in 2023 to 3.1% in 2024 and to 2.6% now in 2025, and we will be below 1% in 2030. And today, I am very proud to announce the upcoming transformation of our heating plant in Karvina, Czech Republic into a multi-energy facility. By 2029, we will eliminate coal and shift towards a diversified energy mix, combining locally sourced RDF, biomass and natural gas. Based on local and circular energy sources, the new system will significantly reduce annual CO2 emission by 200,000 tons. This plan benefits to our clients first. We will enjoy diversified, reliable and sustainable source of energy and also to the planet with a cumulated reduction of CO2 close to 4 million tons expected in 2032 and to our shareholders with project being IRR above 10% and we will benefit from brand new innovative and decarbonized assets. Beyond the IRR, we increase patrimonial value of our assets, increase our resilience with a multi-fuel approach and increase connection rates to our network, which are classified as efficient network under the European regulation. Our decarbonization plans benefit the planet, but also our clients. This is why it is so embedded in our business strategy because it is driven by our customers. So let's take example. We signed in 2022, a partnership with the city of Tashkent in order to operate a massive turnaround of their district heating network. It is a 30-year concession agreement mean to redesign the network and massively improve its operating performance. After only 3 years of operation, we raised the efficiency rate of the network from 53% to 72%. This translates into a massive 600,000 ton CO2 reduction. So major contribution to Scope 1 and 2, more sustainability for the client and reduction in Veolia Scope 3. In Hong Kong, the environmental commitment we took was decisive to win the contract to operate local municipal landfills. We deployed our solution on the ground, raising the capture rate from 46% in 2021 to 69% in 2025, and we will not stop there. And for our clients, it's a reduction of around 600,000 tons a reduction equivalent of taking 150,000 cars off the road for a year. With this example, you see the essential contribution of Veolia to the decarbonization of our clients. As you know, we follow this contribution under Scope 4, which has already increased by plus 23.6%. Since the beginning of GreenUp and is well on track to reach our 2027 objective of plus 30%.

Thank you very much, Emmanuelle. You brought us to Asia, so I suggest you stay in this continent. And let's have a look still on the decarbonization front at what is happening in Harbin, China, with Christophe Maquet, CEO, Asia Pacific zone.

So we are in Harbin in Heilongjiang province, Northeast of China, close to the Russian border, where Veolia owns and has operated the district heating system for nearly 20 years. Harbin is a ice city of China, hosting the famous Ice Culture Festival every year. In Harbin, the winter is quite harsh. The temperature can drop to minus 35 degrees with an average of minus 20 degrees over 6 months of winter. So for the 10 million inhabitants of Harbin, among them the 600,000 who are the customers of our district heating system, you can understand that heating their home is not a comfort. It is a necessity. And we are very proud at Veolia Harbin to deliver these essential services to our customers with very high quality. As in all major cities in Northern China, district heating is based on coal. As of today, there is no alternative fuel on a large enough scale to fuel district heating. Natural gas is not available in enough quantity. Biomass or other options are not sufficient. But it's not because there is no option today for coal exit that we are not doing anything to improve the situation, far from it. Let me present to you what has been already deployed and made Veolia Harbin District Heating the best-in-class in reducing CO2 emissions. We have increased the length of the network, connected more customers and shut down more than 300 inefficient independent coal boilers. We've replaced kilometers of pipes and improved the network efficiency to reach 94%, which make it one of the most efficient district heating network in the world, well above most European networks who are in an average at 75%. We've improved the efficiency of the heating plant by deploying the base standards of Veolia and by including the valorization of waste heat. And we've deployed some energy saving measures by installing some sensors of indoor temperature at the premises of our end users. What are the results? Between 2012 and 2024, we've reduced the carbon intensity of the network, meaning the CO2 emission divided by the square meter heated by more than 30%. And we do not stop here as we are preparing the future to further improve the carbon footprint of the network. We are conducting feasibility studies to introduce a share of biomass in the fuel mix with a potential deployment of the solution between 2028 and 2030. And the first tests are happening right now in Harbin. Furthermore, we will keep on optimizing energy efficiency at top levels using AI. AI will allow us to optimize the fuel consumption based on a very precise weather forecast parameters as well as the demand from the customer, thanks to [indiscernible] program that has been specifically developed by the Veolia teams for the Harbin project and is now being deployed in other project of Veolia. What are the expected results? Another 25% reduction of the carbon intensity of the network by 2032. Thanks to all those solutions already deployed and to be deployed in the very near future, Veolia is reducing tremendously the carbon footprint of heating system in Harbin.

Thank you very much, Christophe, and thank you, Emmanuelle. Our multifaceted performance is not only about decarbonization, but also about regeneration of resources and depollution. I'm very happy to welcome now Sebastien Daziano, SVP, Strategy, Innovation and Development for a heads-up on these 2 topics. Good morning, Sebastien.

Good morning, Francisco. At Veolia, sustainability is deeply embedded in our business model with our regeneration and depollution achievements. First, preserving the water resource is not just a sustainability commitment. It is a core offering and a powerful driver for value creation. Through our core business activities, Veolia actively works to combat this stress to offer a stable water supply and to guarantee the continuity of essential services and economic activities. First, we protect the resource. Veolia has deployed advanced tools to monitor and track water distribution from the natural resource to the end user, maximizing efficiency and drastically reducing network leaks to limit water extraction. But today, we need to go further than efficiency. To protect more resources, we have found new solutions for regeneration by deploying advanced solutions such as water reuse, zero liquid discharge for industries and sustainable desalination, we actively ensure long-term industrial and municipal resilience and avoid water shortages for both populations and businesses. In the Water Reclamation Station in Vitoria in Brazil, we free up the equivalent of 200,000 people's freshwater needs while securing industrial operation by transforming wastewater into a new resource. The group has made a concrete commitment to its GreenUp program to save 1.5 billion cubic meters of freshwater by 2027. And in 2025, we were already ahead of schedule, proving the massive impact of our regeneration solutions. Granting environmental security means as well actively protecting people's health against invisible threats like persistent pollutants. Veolia has an important historical activity dedicated to fighting pollution and treating hazardous waste, and we are consistently ahead of the curve, thanks to our capacity for innovation. Today, we are the first company to propose a true end-to-end solution offer for PFAS with our BeyondPFAS taking these forever chemicals out of the water and ensuring the final destruction. We know how to do this because it relies on the unique combination of our different business line from Water Technologies to Hazardous Waste Management. A clear example of this is our Port Arthur facility in the U.S., where we utilize high-temperature hazardous waste incinerators, where we achieved the world's first technological breakthrough. By providing these end-to-end solutions, we directly help our industrial and municipal clients to guarantee regulatory compliance and secure the license to operate. We had set an ambitious target to treat 9 million tons of hazardous waste and pollutants by 2027. And today, we have already reached 9.2 million tons, well ahead of schedule. Coming now to biodiversity, which is a major priority for Veolia. We are very confident we will reach our target as we aim to deploy biodiversity action plans on 85% of our sensitive sites by 2027. In 2025, we reached 80% deployment on our sensitive sites. But biodiversity goes beyond. It is deeply embedded in our business and our daily operation have a direct impact on biodiversity. Protecting biodiversity is for us an essential lever for value creation, and we are innovating with nature-based solutions. A perfect example of this preventive action is in [indiscernible] North of Colombia. Our goal is to leave a positive footprint wherever we operate. And by using nature-based solutions, we will restore the soil and protect groundwater recharge zones. We have planted more than 100,000 trees on specific geological outcrops. This action to protect the water resource directly enhances water quality and secures access to water for over 300,000 inhabitants.

Thank you very much, Sebastian. We have been talking a lot about resources, and rightly so. And at Veolia, there is a resource that is absolutely fundamental. It's our 220,000 colleagues across the world. I'm very happy to welcome now Isabelle Quainon, SVP, Human Resources, who will tell us everything about employee engagement. Good morning, Isabelle.

Good morning, Francisco. Good morning, everyone. Estelle reminded us of something fundamental, the strategic importance of our teams. And current events are proving just how true that is in the most powerful way possible. Here is the paradox we live with. When everything runs smoothly, we're invisible. Water flows from taps, waste disappears overnight, energy systems hum along quietly. Nobody notices. And yet we're essential. It takes a crisis to reveal that truth, a flood, a cyberattack, geopolitical tensions. Right now in the Middle East, in a highly complex environment, our operations continue without interruptions. Our teams are there. Our desalination plants providing a significant share of the region's drinking water are running because hospitals need water, families need water, life needs water. This is what operational resilience looks like, the ability to maintain critical infrastructure and protect our people even in the most volatile environments. And this resilience, it comes from our people, their commitment, their engagement. Because here's the reality. We are a manpower company. 85% of our employees are blue collars. Our performance lives and dies with the engagement of our teams. And that engagement is built on trust. 85% engagement rate, 14 points above the utilities benchmark, 5 consecutive year pretty much at this level. This is our competitive edge. Trust leads to engagement, engagement drives performance. And we are building that trust through 3 pillars. First, safety and security, nonnegotiable. Our people work in high-risk environments every day, at heights, in the traffic, in confined spaces with hazardous and flammable materials. And some operate in tense and sensitive areas, as we see today in the Middle East. This is where our strict safety framework and security protocols prove their value because when our people feel protected, truly protected, they can do their job even in the hardest context. They continue to operate critical infrastructure because they trust the system we've built to keep them safe. Crisis situation put this in sharp focus. There is no room for error. But the truth is, it is the same every single day. Whether it's a geopolitical crisis of a routine operation, the standard stays the same. Everyone goes home safe. And that discipline shows in our results. Workplace accidents down 75% in 15 years, down another 5% this year. But our culture is zero accident because every person who comes to work should go home safe to their family, whether they're in Barcelona, Sydney or the Middle East. We're building this through common safety standards, our 12 life-saving rules; fair culture, where people report near misses without fear; and stop work authority, giving everyone the right to stop unsafe activities. That's how you protect people, assets and performance continuity wherever we operate. Second, ownership and inclusion. Protection is fundamental but also means giving people a real stake in our future. We want our people to think like owners because when people own the company, they perform differently. So our ambition is to bring employee shareholding to 10%. And we are very close to make our people the #1 shareholder at Veolia. And ownership means everyone has a seat at the table. This year, we signed the European Diversity and Inclusion Agreement, 125,000 employees covered. Equal opportunities for all in action, close to 40% of external managers hired are women. Finally, trust means being there when it matters most. And that's Veolia Cares, launched by Estelle when she became CEO, supporting new parents, families who lost loved ones, showing people they matter beyond their work. Third, local impact, anchoring Veolia at the heart of society. Participation in volunteering has doubled in 2 years. Our team restored ecosystems in Italy, built infrastructure for vulnerable population in Ecuador, through our foundation, humanitarian missions in Ukraine and the Democratic Republic of Congo. When communities see Veolia as a genuine partner, not just a service provider, we build long-lasting trust. And when our people see their work making a real difference at the community level, they show up with heart and gut. This is how we become essential, not just operationally but socially. So here's the bottom line. Trust drives engagement. Engagement drives performance. We build that trust through safety because people need to feel protected, through ownership and inclusion because people need to feel values, through local impact because people need to see their work matters. This is how we deliver essential services in a consistent and reliable way, even in the toughest moments, even in the most challenging places. Because when the world needs us most, our people show up and our operations keep running.

Thank you very much, Isabelle. And we are now getting close to the questions. So just let me remind you that you can ask them by using the chat box on the platform. Estelle, maybe just before we move to the questions, a few words of conclusion.

Yes. What makes Veolia very unique is quite simple. Sustainability isn't a separate agenda for us. It is our business model. Environmental security is what we do. It's what we sell. It's how we create value for our clients and for our shareholders. Our 2025 results prove it. Historic financial performance, 2 out of 3 GreenUp environmental objectives achieved 2 years early. This is proof that our strategy is on track. And in a world of turbulence, our mission becomes more critical than ever, keeping vital resources available, reliable and affordable, enhancing strategic autonomy, meeting the sustained demand for our services and technologies. And that's what we do. So we are now ready to take with all the team your question. Thank you.

Thank you, Estelle. And I have a first question from [ Raj Singh ]. There is a lot of attention around the water and energy requirements from the AI data center boom. To what extent will Veolia's strategy benefit from such growth? Is Veolia involved in tech-related infrastructure discussions with local authority clients or directly with tech companies?

So I will start with suggesting you join our very, very soon Thema, a specific day on innovation and AI in digital, which is in London in a few weeks' time. All the details will be sent to you. And maybe, Emmanuelle, if you want to elaborate more than just inviting to this Thema.

Thank you very much for your question. AI, it's at the heart of our strategy. And on that one, we have a different approach regarding that. Before coming to business, just one word on efficiencies. Under the push of Estelle and Christophe also, we have a very clear strategy in terms of AI and digital. And you may have seen that in terms of efficiency, now 23% at the end of '25 of efficiency has been created or generated through AI and digital when it was 5% or 10% before. But that's one dimension. The second dimension, you're absolutely right. It's an opportunity for our business. We have an offer which is covering really important need of the data center in AI. It's on water consumption, on energy efficiency and on the treatment of hazardous waste. What we have seen so far with discussion along by Estelle even in advance or really in avail of the process is that we can really bring a differentiation on those ones and especially as we know how to deal with municipality, and that's a language that this type of clients does not manage or have under control. So we can bring for them cost efficiency to help them to keep their license to operate and also help them when they are building or implementing.

So it's acceptability as much as a technical know-how which we have a lot.

Thank you. I have further question from Mr. Philippe Ourpatian about Qatar. Following the recent strike in the Qatar LNG facilities of Ras Laffan, could you update us about your position in Qatar and more broadly in the Middle East by activities, EBITDA contribution by businesses and capital employed?

So, I guess, I will take this question. I've said a few words in my introduction exactly about that. First things first, our priority is to keep our employees safe in the Middle East. We have 9,000 of them and they operate a central service, which means that what we do is ensuring supply of water from desalination. You need treatment of hazardous waste and, therefore, removing pollutants and keeping licensing to operate as much as energy efficiency in large malls and airports. So we have various type of activity in the Middle East. When it comes to desalination in particular, as you can imagine, it's a very arid part of the world where desalination account from between, say, 70% in Saudi through to more than 90%, 95% of the water supply of the entire countries in the region. So it's absolutely critical needs. That's why I said essential services and critical needs is what Veolia does and does well. As you can imagine, those sites have been -- their security has been reinforced by actually the national like security forces. And we have as well plan Bs. Just to give you an idea, the various desalination unit we have are interconnected very, very often. So in addition of storage of water, if one were not to be able to operate, you can switch largely to a neighboring one. And of course, there is a little bit overcapacity there. So that's just to give you one hint. And as for the whole details, you can imagine, I won't share them with you today. In terms of figures, Emmanuel, so it's what, EUR 1 billion turnover roughly, but minimal capital employed.

Absolutely, So in terms of figures, just to complete on regarding the numbers. The Middle East, for Veolia, it's EUR 1 billion of revenue. It's a growing, but it's limited in terms of capital employed and EBITDA. It's 0.9% of the capital of the group and 1.2% of the EBITDA of the group. And the reason for that, regarding the limited capital employed, is that for our water operation and our energy efficiency, we don't put our own investment. It's services, it's procurement, it's engineering. Coming back to Qatar. Regarding Qatar, we don't have any capital employed as we are not putting our own money. Its partnership, we are operating. And in terms of revenue, it's limited. We are speaking roughly around EUR 50 million of revenue.

Thank you very much. I have now a question from [ Olivia Watson ]. What is the outlook for recycling activities with the pending changes in EU regulation?

So I guess there are a few elements about recycling. First things first, recycling is something on circular economy in general which is very well supported by the EU legislation and elsewhere in the world as well. It used to be an environmental agenda item, if you want. It's moved recently to, as well and in addition to be an environment item, to securing supply chain item. If you are able, like we do, to mine waste, to find back some strategic minerals, so cobalt, lithium, nickel used in wasted batteries, for instance instead of importing them from very far away, you can find them in the waste. Therefore, you reduce the supply chain distance and you reduce your dependency. Therefore, circular economy of recycling is becoming a security agenda as well as environmental agenda, if you wish. I think that's an important item for everybody, including in Europe, where you don't have that many strategic minerals under our feet. Or the same applies with wasted heat and local sources of energy, which can replace like importing fossil fuel. So I think that's a promotion de facto of what circular economy brings as a byproduct in addition to, of course, the CO2 reduction in footprint. So that's why I'm very hopeful that not only in Europe, but in places where you are dependent on imports, it's something which will go on growing in the next few years.

Okay. Thank you, Estelle. I have another question from Mr. [ Francois Umber ]. Thank you for this presentation, especially the focus on coal in CEE and Asia. Is the business case of coal closeout in Central Eastern Europe unique? Or are there other places in the world where this can be duplicated building on the expertise of the Veolia in district heating?

Emmanuelle, maybe?

Yes, with pleasure. Thank you for your question regarding coal exit. The first element, you know that we -- it was -- when we have launched that, it was in 2018 with the decision to completely transform our assets from coal to other energy fuel. And it was the uneasy decision instead of selling, we start to transform. And this transformation has gone really well. We now have a very differentiating expertise to be able to go from coal to multi-fuel approach. We have done that in Germany. We have done that in part of our facility in Czech Republic, and we have started in 2025 with -- in our facility of Poznan. These projects are really amazing because they have an ARR which are above 10%. It's coming from cost reduction from CO2, but also less maintenance cost. It's also from additional revenue as our new facilities are more efficient and generating more energy revenue. Just taking the example of Poznan, we have increased our ratio from 40% to 70%, and we have also a regulatory framework, which are giving us an upside. And on top of that, as we mentioned, we are increasing the patrimonial value of our assets as well as being more resilient because it's a multi-fuel approach. Where you're absolutely right is that it is scalable. We have started in some countries. We are deploying that in the rest of the country. We have announced this morning Karvina. And we will be able to continue to deploy that to our other country, but also to sell it to our clients. And this is a special offer that we have put in place and launched, which is the geothermal grid and which is working really well with already projects in the U.K.

So I guess and to elaborate, what about outside Europe? U.K. is outside Europe as in the EU sense of it. And the recipe for success, which you described are there in the U.K. There is a CO2 price. It's not exactly the ETS, which you have seen in Europe, but it's an equivalent of that and an ambition and a political ambition together with local sources of energy, which can replace like fossil fuel. And same, of course, in terms of efficiency and cost reduction as in Mainland Europe. Outside Europe and the U.K., I guess, Emmanuelle gave you the keys of recipes for success. So if you have no CO2 cost whatsoever, neither any local sources of energy as an alternative, it's going to be tough. But if you have those 2, it can work and it can create a business model, and we'll be very happy to expand in those geographies to give us -- to share our experience built in Europe.

Thank you. Actually, I have a few more questions about this decarbonization district heating that is really driving a lot of interest from Charles Swabey. For the European district heating decarbonization targets, what are the time lines for the additional EUR 250 million EBITDA? Will the sites be fully ramped up by 2030? Could you provide more color about what is driving the EUR 250 million EBITDA increase from the assets? Do you expect a margin increase. And I will couple that with a question from Peter Crampton that you have already partially answered because the first part of the question was how scalable is the Karvina multi-energy model across Veolia, broader district heating portfolio? But the second part, what are the key economic and regulatory hurdles to replicating this coal exit pathway ahead of the group's 2030 headline? That was a lot.

So like Emmanuelle, so it makes Monday in Europe. So are we on our way to make the plus EUR 250 million EBITDA, which we announced when we were on Poznan a few months ago.

With pleasure. And Estelle and Francisco, please, if I forgot something because there were 10 questions in the question, please tell me. So dear Peter, it's fully scalable. You may have seen it that our main message. It's a truly differentiating element we have to have the team. We know how to deliver this project, which are so complex on time, on budget, multifuel. It's a performance that almost no competitors is able to do in Europe, where we are #1 in district heating. Coming to the question of profitability. So we communicated to you EUR 250 million of EBITDA coming from this coal exit plan, which is absolutely by 2032. EUR 50 million have been generated before the start of GreenUp. During the start of GreenUp, it's EUR 50 million. And the rest will come afterwards. Coming to the part which was before GreenUp, it was mainly coming from Germany and a part of it from Prerov. Then during the GreenUp, we have the rest -- a part of Germany in Braunschweig, Kolin, but also Poznan and then has announced this morning, after the plan, we'll have the contribution of [ Lodz ] in Poland and of Karvina. So a very clear plan. We are doing what we say. And we say what we do, really disciplined with clear time line.

There was a question about the economic and regulatory hurdles replicating the coal exit path ahead of schedule.

Ahead of schedule?

Ahead of the 2030 deadline.

So basically, Emmanuelle, we are on schedule to beat the plus EUR 250 million EBITDA, by 2032, like you said. We are on schedule, right?

We are on schedule.

And we publish every year the result. And they are embedded in, of course, financial results. So we're on schedule. What about being ahead of schedule? Can we hope to get quicker, if I try and translate the question?

I think that's it.

So you are very greedy, but a fair question. Coming to that, I just -- regarding the hurdle, I just wanted to say in terms of people, we have amazing people. The main challenge we have, it's, of course, permitting, and it's also the operational challenge because you have to deploy a solution which makes sense locally in your geography. That's why we haven't deployed the same technology when we were, for instance, in Braunschweig, where we have biomass and gas. Then we are in Kolin and Prerov where we have deployed RDF and biomass. So we have to find the solution, which is fitting the geography. Taking the example of Braunschweig, it was making sense. We are #2 in the geography, the second player in terms of solid waste. So for the sourcing of biomass, it was something which was completely secured. And for -- in other geography, you have to find the solution which makes sense locally and which is the most financially viable. Can we go even faster than that? So the question, for us, it will be the permitting. Are we going to be able to get the permit even in advance? Estelle is really pushing for us to have a calendar which is progressive because we want the team who has the know to further deploy really properly one project and then go to the other one. If we can scale up, it can -- if we can go faster, we'll do it at the moment, focus is on delivery.

So when it takes a few years of permitting, having a design specific to the local sources of alternative fuel, you can find, plus what, 3 years of construction, something like that, a little bit of ramping up, that's why we already see -- we are talking about [indiscernible] which was opened, what, 3 years ago, something like that and which has ramped up now. And it will spill in the result. So I guess we are making one by one every year, which I think is already a very good achievements.

Excellent. Thank you very much. Changing topic now and talking about biodiversities. I have a question from [indiscernible]. You have just mentioned your objective to be nature-positive wherever you operate. It is a very difficult claim to achieve in a comprehensive manner. What metrics do you use to prove that your positive impacts are superior to the inherent negative impacts of any industrial activity? Your current percentage deployment of biodiversity action on sensitive sites is more an indicator of means than a real way to measure outcome.

So maybe, Sebastian?

Thank you, Estelle, and thank you for the question. So we are working on 2 main pillars about biodiversity. The first one is, of course, to diminish our impact for biodiversity. It is a KPI presented during the presentation. But the second pillar is, of course, about action and solutions because biodiversity is totally part of our solutions. And you can report for this question to your biodiversity report, which was published last year. And we want to publish before the next general assembly the TFND report, which will explain how biodiversity is totally part of our solutions, speaking about depollution, regeneration of resources and biodiversity beyond our solutions.

I guess in biodiversity, exactly as in CO2 and many other items, environmental speaking, you have the positive impact and the potentially negative impact we have to reduce. Overall, Veolia has a positive impact on biodiversity. Each time we treat wastewater, we have a positive impact on the local biodiversity sources. And we measure it. It's very clear. You have a before and after. You see fish coming back and a variety of them and same with other -- basically nature is coming back each time. And we have great examples in many places. Same applies with hazardous waste, as you said, Sebastian. The fact of treating hazardous waste and the pollutant as opposed to releasing them for all industries not only has a positive impact on human health, but on biodiversity health, if you want, nature health. And that's again, something we measure. So overall, Veolia have a positive impact on biodiversity. Nevertheless, we could, if we'll not be careful, have a negative impact, which would unfortunately have a little of a minus. That's why we have this initiative, which Sebastien said on specific critical sites, which you could, if we're not careful, have a negative impact. And it's -- I must say, it's not only obligation of means as opposed to result. We act on the action plan we've defined. But today, there is not 1 KPI in the world on biodiversity. We are working with Act4nature for instance, on all the initiatives to try to define something which will be measurable. But as you can imagine, you can count on this not only to define an action plan but to act on it. Although overall, we have a positive impact on biodiversity at Veolia.

Okay. Thank you. Getting now back to the Middle East. A question from Pierre-Alexandre Ramondenc from AlphaValue. So regarding your desalination operations in the Middle East and the resilience of these activities, could you elaborate on how rising energy costs are managed and their impact on the cost of desalinated water production? Specifically, are these costs hedged? Or are they passed through to customers? And is it the same strategy that is applied on the energy segment?

So globally, energy prices are pass-through for Veolia. Not only we said for a few years, but we've demonstrated in our figures over the last few years. Why do I say the last few years? Because, of course, we started to have this type of question in 2022 when the war in Ukraine started and we've seen the spike of energy price in Europe in particular. So it's globally pass-through for us overall in district heating, in all the activities we have. In the Middle East, in desalination, to answer specifically to your question, it is really pass-through. So we don't pay directly, if you want, the energy cost. Our customers do. We operate the plant with an incentivization of being more efficient in terms of our consumption of energy. But this will not impact in our P&L.

Thank you. And actually, I have a question from Olly Jefferey that is on the same line. Diesel costs are passed through but with a lag for Veolia. So this could be an H2 EBITDA headwind. However, the energy business should have offsets. How should I think about the net effect of this for 2026 earnings if commodity stays where they are?

Thanks, Olly, for your question. You know that fuel, for us, it's mainly diesel that we buy for our waste activity for the trucks. It's limited. We are speaking about EUR 270 million which are fully passed through. Just a personal comment. I started at Veolia working in the solid waste business, spent hours and hours on the potential upside of hedging diesel. But as we have fully pass-through formula to our clients, it doesn't make sense. You're right, we may have a small tag line, but it's limited. It's a question of months because you may have seen that in 2022, we were able to make for solid waste or hazardous waste sometimes in some geography, price increase 3x per year. We have communicated on the impact of the negative commodity energy price in 2026. It's roughly EUR 30 million, which has been communicated and all the assumptions and the calculation we did in the last few weeks with Estelle are confirming the numbers so far. But we'll see what will happen with the evolution on Middle East. But so far, as mentioned by Estelle, it is pass-through. And even as in 2022 and it's going slightly up, we may have some one-off opportunity as we have been able to demonstrate to you in 2022 and 2023.

On all these questions about risks, I would encourage you to look back at a slide we've published when we released our yearly results about the various factors where we have some proven resilience in our results, which have gone up in the last 5 years quarter after quarter after quarter irrespective of a lot of things that have happened in these years. And you can go through the full list. Like our business model is very protective because we are very global when it comes to innovation and scale of R&D but very local when it comes to delivery. Therefore, tariff, not a question for us. Inflation, we are well protected, and we've demonstrated it. As Emmanuelle said, commodities is exactly the same. We don't rely on specific 1 or 2 customers. It's very varied the portfolio of customers with long-term contracts. And I could go on with the list. So we'll be very happy to answer those questions, but have a look at the proof that we've demonstrated over the last few years.

Thank you. I have now a more general question from [ Lorian Gillet ]. Are you considering revising and increasing the objectives of GreenUp so that you can keep a continuous improvement dynamic considering that 2/3 of the initial objectives have already been achieved?

2/3 of the initial objective, you're talking about the 3 environmental one. But as you know, multifaceted performance is environment, it's HR, HR as in employees. You know we're talking about our customers and Net Promoter Scores and so on and so forth. So we are very happy we've achieved very great results on the nonfinancial as well as financial in '25. But I can tell you, we never rest on our laurels at Veolia. We have to keep on focusing the attention on delivery again in '26 and '27 as we've done in '24 and '25 for the first part of GreenUp. So priority is to delivering. And of course, if we can increase and keep on increasing, we will. Don't worry. And the specific targets of all the managers are very clear, and they all have a plus. Even if we overachieved in '25, it goes on with improving in '26 and '27. Maybe Isabelle, you want to elaborate on the nonfinancial, which are not necessarily only like environmental items and how in '26 and '27, you have specific things you want to achieve.

Yes. Well, we have specific goals on health and safety, of course, but the target is already very demanding. We're getting there, though. We have also a specific objective, for example, in diversity and inclusion. We have revised this one, by the way. And so, well, it's on the way, let's say, it's work in progress. But believe me, it takes a lot to get there for all of our executives but also for all our people within Veolia. It takes a lot. It does.

And I think when I say all our people in Veolia, you realize that we are only 5 presenting those results to you today. But there are 15,000 managers at Veolia who have part of their incentive yearly, which has to do with the result that you were presented today and objective in '26 and '27. So it has an impact on many, many people, and you can count on us to go on always trying to be better.

Thank you. I have now a question from Emira Sagaama from ODDO. How do you see prospects for services linked to the circular economy overall? And what are the fastest-growing segments? Do you expect positive drivers from new relations, such as the Circular Economy Act expected this year?

In a way, that's a question I've partially answered already. So circular economy is not only good, as I said, for the environment, but as well for securing supply chain because you can find into waste new sources of minerals, strategic elements or even heat. So the EU legislation is relatively ambitious there with a few layers. We can talk about the plastic regulation. There is a Critical Materials Act, which was launched by the EU last year if I remember well. And it's constantly evolving to have an even better ambition. What we know works well is incentive to make compulsory to have within the supply chain in a few years' time X percent of recycled content into it. So we know that's a tool which doesn't imply a lot of public money. Nevertheless, it's quite efficient. But then you have to keep moving this type of target in a very specific way. So regulation is nice. I'm always hoping for more pace in the implementation of the regulation in the various different countries. And at times, devil is in the detail. From a big ambition to, okay, how do you count this percentage, what counts in, what doesn't, what are the dates of these obligations? So in a way, the ambition is there. I think there is a big plus potentially in the EU. But we'll see if it translates into real things depending on the all details of the way it's implemented and the speed of implementation in every single country. So juries out for me.

Thank, you, Estelle. We still have many questions coming. But cautious of time, maybe what I'll do is, I'll take one last question. And then for all the other questions, please do not hesitate to refer to our Investor Relations team. They'll be very happy to provide you with all the answers. So the last question, still from Emira Sagaama. Biomass is one of the alternative energy sources in your decarbonization efforts. How do you ensure the sustainability of the sourcing?

Maybe, Sebastien.

Yes. Thank you, Estelle. So biomass is used for heat district production. And it is supported by the European Union and member states in Europe, of course. But it's not only the support from the states which is important, but of course, the origin of the biomass. And so we are working with the national forest offices in different countries in order to trust the biomass product. And today, 100% of our wood biomass is [ trusted ]. And 90% is certified sustainable. And the objective is to be 100% in 2027 for this quarter.

We as well mine a lot of biomass into wast stuff. So in addition to what Sebastien said, of course, it's used biomass, if you want, as opposed to virgin one. I don't know if you want to have your experience in Asia maybe on biomass. How do you source biomass?

So the biomass we are getting from Asia and in Harbin project, for which we are doing the study right now is coming -- it's a residue from the industry business. So we are not speaking about virgin wood biomass. We are speaking about residue, which is very important to be able to decarbonize the project. Important point.

Thank you very much. Thank you to all our speakers, and thank you for following us. I think we are more than 500 across almost 50 countries. It was a pleasure to be with you this morning. Thank you, and goodbye.