Status Update

Aug 31, 2020

Slides

Ladies and gentlemen, welcome to Veolia webcast. I now hand over the floor to Mr. Anton Firo, CEO Istel Baklinov, COO and Claude Marouel, CFO. Madam, gentlemen, please go ahead. Thank you, and good morning, ladies and gentlemen, and welcome to this conference call to which you were invited yesterday evening for news about Veolia. I am with Estelle Rakenov, our CEO Claude Laruelle, our CFO and Olivier Bruce, our Head of Strategy. And I am on Page three of the slideshow. Following ENGIE's announcement on July 31, that is why we're launching a strategic review of some of the assets, including Gaseke and SWED, I have decided with the unanimous approval of our Board of Directors to propose to acquire 29.9% of SWED's shares out of Engie's 32% stake at EUR 15.5 per share. As you can see on this slide, this all cash offer with a 49% premium on the unattended last three months average share price is the starting point of a great industrial project that addresses the global challenges facing our planet and societies. This project is to create the global super champion of ecological transformation. If ENGIE accepts our offer, Veolia will then launch a tender offer on SWED's remaining share capital. According to the stock market regulation, the characteristic of this tender offer will be fixed when it will be submitted. On Page four, we have here a unique opportunity to create the world champion of environmental transformation by bringing together the men and women of Veolia and Suez in a project that will benefit all of their stakeholders. The environmental priority is stronger than ever. The climate change emergency is before our eyes. Every new investment plan being decided by governments is built around this need to tackle the climate emergency and to take into account the impacts of human activity on the planet. The European Green Deal is of course the clearest example to date of this policy. The unique complementarity of assets, geographies, know how, technologies and clients between SWEZ and Veolia is a major advantage in addressing this global challenge. The combination between SWEZ and Veolia will accelerate the execution of the strategies of both groups by creating a stronger combined entity with a common corporate culture and shared values. For all these reasons, this is a strong value creating transaction for all stakeholders. Our clients will benefit from a broader offering and our employees complete job opportunities. Our shareholders will also benefit from a significant double digit EPS accretion. On Page five, all of our activities, Water, Waste and Energy benefit from highly favorable and accelerating mega trends. I have already mentioned the climate change emergency, but there are also the global issues of increasing water scarcity, the need for efficient food chain management to feed growing populations, faster urbanization and its consequences on water supply, waste management and energy needs. Faced with such trends, many governments have reacted and have launched significant investment programs to try to stop these harmful and remote impacts. Moreover, in our businesses, digitalization enhances the benefit to our clients and improves the management of our facilities. The markets that our two groups address are huge with more than 1,400,000,000 spent every year. The combination of Veolia and Swell will thus create the main player in a world market that is still very fragmented. As you can see on Slide six, the transaction we propose would take place at the time when both groups have launched their new strategic plans with similarities, more international, greater developments on initial client days and with a common objective to become the world leader in ecological transformation for Veolia and in environmental services for sale. The combination would establish this undisputed worldwide leadership immediately and would accelerate the achievement of both group's strategic objectives. On Slide seven, our geographical footprints are complementary and we would also be able to strengthen our positions in several priority countries. We are often among the top players in various countries, but sometimes with a relatively limited market share. By bringing together our asset base and portfolio of clients, we would become bigger in Europe, where our countries of operations are very complementary, Suez in Southern Europe, Veolia in Central And Eastern Europe, for example. And outside Europe, in the rest of the world, the group's revenue will increase by 50%. We will thus immediately meet our goal of reinforcing our international exposure. We will to we'll have to address a limited number of antitrust issues, mostly in France. As outside of France, there is very little overlap. Accordingly, and to ensure the success of our project, we have already found a partner, Meridian, that is very interested in Suez French Water assets. All of Suez French Water activities, including its Water R and D and engineering teams, would be acquired by this French long term investor, Meridian. Meridian is a world leader in infrastructure management and financing for municipalities so that fresh water would continue to grow and develop activities. There would also be some assets to divest in French waste and very few assets abroad. As you see, we have already worked extensively on these potential antitrust issues and on ways to resolve them so as to ensure the full success for our project. The map on Slide eight shows the combined geographical footprint of Suez and Veolia. And you can see clearly the benefits of the transaction in all our geographies, in particular, outside Europe, with a doubling of revenue in Australia, Africa, Middle East, Latin America and a revenue increase of 50% in The United States. On Slide nine, the combination of the two groups competencies would give our clients a unique and innovative range of services to initiate or accelerate their position towards greater environmental efficiency. The new group would thus become the leading player in the ecological transformation underway. We would be in a position to offer the full range of contractual models as well as to strengthen our leadership in hazardous waste in all those segments of the circular economy and in energy efficiency. Finally, bringing together the technologies of Veolia Water Technologies and of Swage Water Technology Solutions would create a unique and setting edge technological arm in water with the widest range of solutions to address the environmental needs of energy and municipal clients. On Slide 10, the transaction would also enable us to combine and enlarge our client portfolio. Our initial client base are wide and will continue to be reinforced. Today, Veolia is the lead of choice in terms of industrial and tertiary clients, which represent 47% of our revenue versus 40% of choice, enabling us to accelerate the rebalancing of the combined portfolio by bringing together both sales force and leveraging Veolia's experience. On Page 11, the European market is obviously of paramount importance to both SWED and Veolia, two French based groups with a worldwide presence. The new combined entity would become the main corporate player in the European Green Deal launched end twenty nineteen as it would be uniquely equipped to provide solutions in many areas targeted by the European Green Deal initiative. This is particularly true in the fields of lithium battery recycling, hazardous waste, energy efficiency, all circular economy projects and the development of alternative energies such as the fuel derived fuel. This operation is therefore an opportunity to transform the Green Deal ambitions into reality. On Page 12, our two groups are essentially service providers, which means that our main know how lies with our employees. This industrial project is about bringing together the 89,000 employees of Suez and the 179,000 employees of Beovia. The combined entity would have nearly 270,000 people with very similar corporate cultures and values. SRES and Veolia each have over one hundred years of experience. They both have very long histories of partnering with municipalities and industrial clients to provide them with water and waste solutions and in various scale with energy services as well. The boss developed their activities such in France and then internationally with the same commitment to excellence that has made them the best performing and rental service companies in the world. The transformation that SRES has initiated with its shipping 2030 plan is very comparable to the transformation journey Veolia has achieved to become a high performance company with a greater presence in fast growing markets. By becoming part of this new combined entity, we will share this with our experience and track record. The Slide 13 shows the financial profile of the combined entity once the asset divestments required by antitrust bodies mostly in France have been completed. The combined new group would have revenue of over EUR 40,000,000,000 with an EBITDA of EUR 7,000,000,000 and an EBITDA margin of 17%, providing solid financial headroom to finance new projects while preserving a strong balance sheet. The business mix would be approximately 45% in Water, 40% in Waste and 15% in Energy. These three pillars are all in fast growing markets and with each continue to grow at a certain pace. On Slide 14, you see that the operation will generate EUR 500,000,000 of synergies in four years. Most of the synergies would come from operational efficiency levels through sharing the best practices of each group as well as through purchasing savings from the volume effect. Veolia has proven over the past nine years its ability to continuously improve its operational efficiency. For instance, in the management of its incinerator, the optimization of waste flows and the inclusion of digital tools to better manage our facilities and our clients. A recent example is all these acquisitions we have entered into exclusive negotiations with SWEIG to buy their 300,000,000 subsidiary specializing in the maintenance of sanitation networks and on-site and fuel services, the competitor of our subsidiary SAP. The sharing of SAP's processes and standards with all this will allow for a significant increase in all this EBITDA. This is just one example of what we plan to do within the combined Schwez area. On Page 15 now, we can comfortably finance the acquisition of LG stake in Schwepp. We have a solid balance sheet. The leverage ratio stood at 2.66 times at year end 2019. At the June 2020, Veolia's liquidity position amounted to EUR 12,000,000,000, including EUR 8,000,000,000 of cash and more than EUR 4,000,000,000 in undrawn credit lines. We benefit from particularly attractive financing conditions. We issued EUR 1,700,000,000.0 of bonds in 2020 with interest rates between 0.71.25% for duration between eight and eleven point five years. This operation will be financed with the objective of maintaining a solid investment grade rating. On Page 16, this exciting industrial project would be accretive to EPS from year one and reach a high double digit capration level from year three after the integration. On Slide 17, you see the key steps of the proposed transaction. We have made an offer to LG to buy twenty nine point nine percent of SWED at EUR 15.5 per share. If ENGIE accepts our offer, ZOLIA will then launch a tender offer on SWEZ remaining share capital. According to the submarket regulation, the characteristic of this tender offer will be fixed when it will be submitted. We will inform the employee of our representative bodies and antitrust authorities to obtain the approval and proceed with the asset divestiture required to finalize our initial project. On Slide 18, yes, ladies and gentlemen, yes, this project is unique opportunity because of our two groups have always been complementary, but especially so since the launch of our respective strategic plans. And to finish on Slide 19, combining our strengths within a single group will considerably accelerate the execution of our strategic plans, enable us to go faster and further and to offer the best to our clients, employees and shareholders. This exciting project is a perfect fit with Veolia's purpose and would position the new entity to address the main challenges of this century, the ecological transformation. Thank you for your attention and we will now take your questions. Thank you. Our first question comes from Nusan Eyal, JPMorgan. Please go ahead. Good morning and congratulations for the move. Couple of questions there. Obviously, the first one that springs to mind is the indebtedness, the gearing. When we run numbers, basically, and if it was all debt payments, we'd get you above four times net debt to EBITDA. So that would imply some level of capital increase way or the other. So in this respect, I'd like to know can you hear me? That's why we you very badly. Could you repeat, please, slowly all your questions? Yes. All right. So first, congratulations. Second, running quick numbers with the debt financing of the transaction would put group above four times net debt to EBITDA. So that would imply some need for capital raising. So first question is what is for you the hybrid capacity that we have at this stage? Could they make use of that? Or would they need to go beyond hybrid capacity in terms of capital raising? Now when we do assume some capital raise, we got a EPS accretion of about 25%. It could be higher if the capital increase is lower, obviously, than our assumption. But do these numbers make sense for you? Third question is on The U. S. Tax assets. You have won the RSKs to use back for €460,000,000 dollars, which was to be used before 2026. So does this move, if it happened, basically solve the question of how to get a tax accrual base to to use these credits. And finally, on jobs, you say in your press release yesterday that Mary Jane made a commitment regarding acquisition of the the shares water French Water assets if a deal go through, and that's the whole transaction would basically protect jobs in France. Did Miregen make any specific commitment in this regard? That's pretty much it for the first round of questions. Thank you very much. Thank you, Vincent. I will take the last question and Claude will answer your several questions about finance. Yes, we told yesterday that this operation will have no negative impact on jobs in France because, as I just explained, this operation is to create a champion which will create new activities, new technologies, new businesses and new jobs, including France, not only outside of France. And globally, we will have no negative impact on the jobs in France. Antoine, Vincent. Concerning the financing, let's talk first about the current situation of the group. As you know, we have started our strategic plan with a lot of balance sheet headroom and with a leverage of 2.66 at the end of last year. On top of that, as Antoine said, this year, we have issued EUR 1,700,000,000.0 of midterm notes. So we have more than enough cash for the first phase of the operation, which is the acquisition of 29.9% of ENGIE's shares. Regarding the second phase, it's a little bit early to talk about it as it will happen in eighteen months from now. As we said, our main objective is to remain solid investment grade, and we will find the most efficient way to achieve these objectives, keeping in mind that there will be remedies and also that both companies have asset rotation plan. I can say that a bridge issue or right issues are possible options, But as I said, it's too early to talk about it in detail. As we said also, the deal will be accretive double digit on the EPS. On EPS? On EPS. Not net present. No. On EPS. Next question? And Our next question. We have the answer for The U. Asset, please? The last one, The which was not third question was regarding U. S. Tax assets. So on the tax credit, because we will be, first of all, sorry, bigger in The U. S. And that we will have the combination of both group in The U. S. The combination of the two groups will have a positive effect in The U. S. So we will be able by this operation to benefit from the tax credit that we have in The U. S. It will be same in France by combining the two groups that will help us also to take advantage of the tax credit that we have in France. Our Thank next question comes from Emmanuel Chopin, Societe Generale. Please go ahead. Good morning, everybody. I would like first to follow through on Vincent's questions about financing. You just said that you would consider what would be the best or the most efficient way to finance the second tranche of the deal when time comes. But as we stand now, could you share with us what would be what sort of net debt to EBITDA you would like to see for the combined entity on the first year after the transaction? Would you stick to the standard level of comfort on net debt to EBITDA at around three times? And therefore tailor your equity or quasi equity instruments to reach that number? Or would you accept to be higher than that 3.2, 3.5 times giving time for synergies to work their way through the cash flow? That's my first question. Second question on potential remedies, you highlight €4,000,000,000 of revenues as an estimate of the revenues attached to the assets you envisage you would have to sell. Could you please give us an estimate of the EBITDA related to those 4,000,000,000 And regarding the Meridian agreement, what visibility do you have through this agreement today about the transaction price for the French Water business of Suez. As you said, this transaction may take a while. Do you have a fixed price? Or how will you deal with it? I would say the fact that time passes. And my last question would be about synergies. You envisage around €500,000,000 of operational synergies for this transaction. This is a big number, but the merged or the new entity the combined entity would be even larger. So my first reaction is that €500,000,000 is actually not a lot if you step back and look at the combined size of the groups. And I would be interested to understand whether you believe there could be further synergies beyond those €500,000,000 I get that it's a bit early maybe to discuss figures. But do you believe that the €500,000,000 fully cover the potential of overall operational synergies, not only costs that you would gather from this transaction? I'm wondering if you've taken into account the likes of optimization of the waste assets, internalization rate, fleet, etcetera, etcetera? Thank you very much. Okay, Emmanuel. I will answer first about Meridian. Estelle will answer your questions about synergies, and Claude will come back on the financing structure. With Meridium, we have an agreement binding agreements, commitment from them to buy the Swiss Water business. And the price is with parameters each time uncertain indicator, we precisely described the indicators in the agreement and there is a multiple of this agreement. This price, I would say, is confidential, so I will not be in a position to give it to you. But because we need to have some a bit more information to precisely have the precise price we prefer with them to parameter the price they are committed to pay. Is it clear? Is there a time limit to this agreement? Yes, 2,500,000,000.0. Thank you. And could this indicator be EBITDA, for instance? Could tell you. Thank you. But it is, of course, an indicator which represents the value creation, as you could understand. About synergies, Estelle? Yes, hello. About the synergies, first things first, to say that the synergies we've put on this slide, the EUR 500,000,000 is only cost synergies here. We haven't included any revenue synergies, neither any CapEx that we could save by putting the two groups together. In terms of those €500,000,000 I would comment on the fact that it's a high number. We are very confident we can deliver. And it's very comparable to comparable transactions as well. And it's really operational synergies we're talking about here. So we have a full list here, a detailed full list, which includes some of the things you've mentioned. We have a real estate and optimization of footprint of our buyers, installation of the work. We have productivity synergies and improving of the yield of all of our assets. We have procurement, internalization of the waste flows, fleet optimization as well. And things that has digital and putting together the best of both worlds in terms of digital. I would say altogether, the whole mindset is about taking the best of both worlds in all those managements. As Antoine said, we really want to put the strength together of those two large groups. I can first answer the second question about the potential revenues. We were talking about EUR 4,000,000,000 of revenue. So in terms of EBITDA, if you understand the Slide 13 correctly, it means that the EBITDA of the disposal is matched by the synergies. So it's the same order of magnitude to answer your question, Emmanuel. And last, regarding the financing and the balance sheet, I would say, equilibrium of the future group. The midterm objective will be the same as what we have designed in our group today, which is net debt to EBITDA below three as a midterm objective. Too early to mention a year one in the debt to EBITDA. Would you consider being above three times? I guess that's the implication of your answer. Medium term could not be your what? Okay. So you're happy to be above three. Okay? Thank you. Thank you. Thank you. Our next question comes from Julien Raz, BMCA. Please go Yes. Good morning all. Thanks for taking my question. I have one. I was just wondering the scope of Suez which is of interest for you. As you mentioned and as we all know you are both engaged into a massive disposal program. Suez announced up to $4,000,000,000 I'm not sure whether The U. S. And the Chilean water regulated assets is core to you or not given that you already disposed this kind of assets in the past. So just wanted to get your view on what exact perimeter of Suez would be of interest and whether ACEA and Agbar would be also core in the future group in your opinion? Thanks. Julie, you know that we just began this long run for this operation. And of course, we are buying all the shares of SWEZ, meaning that we are buying all the activities of SWEZ, meaning that all these activities are interested as banking. So it is too early to give any proceeding about that. We are we will buy all of that. And we first, we have to divest for antitrust issues some businesses, and we will see for the rest. It is not time to discuss what is good and what is not good. In Sweden, all is good today. Thank you. Our next question comes from Olivier Van Dusler, Exane. Please go ahead. Yes. Good morning. Thank you very much for taking our questions on this important transaction. Good morning. I had three questions also, if I may. The first one is maybe a bit of color, if we can, on your perception of execution risk. And more in particular, I guess, even if there is an NG support for this transaction, how confident are you that actually the, as you called the, as you mentioned, the close cultural proximity would actually work in practice given also the long standing life of it between Sirius and Veolia. I wonder how you feel about the risk of potentially facing some hostility within the Sirius organization if this new happens on an unsolicited basis? And in parallel, then how you how what's your confidence is that SURES will on their side and will continue to execute their strategy plan today given the uncertainty that you are creating? Second one, we could just come back to clarify one point on the financing. So you mentioned the long term or the medium term ambition to be at around 3x net debt to EBITDA. Obviously, hybrids are not in that. And I just wonder if we could explicitly mention the fact that you had in the past hybrids yourself, although you chose to pay them back. Would you feel comfortable in issuing new hybrids again to potentially fund part of this transaction? And the third question was just what you felt this transaction would do on your returns on capital employed and your aspiration on that sense given the likely goodwill to be paid here? Thank you. Okay. I will begin Olivier to answer the first question, and I will leave my colleagues to answer the following ones. First of all, about the support of ENGIE, we just put our proposal yesterday. So of course, they are informed, but they did not comment. They will study it strongly. And I could not tell you what they are thinking about it. You understood certainly that we choose this scheme by proposing them to buy immediately without conditions, the 25 the 29%, to help them to put in place and accelerate their own strategic plan without waiting for eighteen months to get the money. So I think it could be attractive for them. But of course, they will decide if it is or not. About the execution risk, the main risk, of course, comes from antitrust issues, and it is why we so precisely studied it and proposed already proposed some strong and I think really good reviews with our agreement with Meridian. The biggest of this was issued, of course, is water in France. And I think Meridian is the best possible shareholder of this business to propose to it real good future. So for the rest of this is the risk. We don't have a lot of other big arbitrage issue. And so I am really confident to be able to make this operation. About the people and the culture of the two groups, it is true that Veolia and Svez has revolts from and retailers. But it is also true that these two companies somewhere built the professional vision of how to do this business of water management for City and Industrial or Waste Management. So they share the same statistical values and the same ways to make these businesses. And when we compare with other businesses or other companies around the world, we see that we have much more proximity with Sway's way of business than with others because we grew together with reality, commercial reality, but progressively with the same professional vision. And then there is not a of difference about G and A between the two companies. So I am really confident that there is no problem of mixing of the two cultures. And you know sometimes we lose some contracts in the water business in France, and they lose some contracts, we win them. And so we are used to welcome some teams from them as they are also used to welcome some teams of us, and there is no problem for that. And with all these transactions, we will see that it is there is a clear proximity of culture, DNA and values between the two teams. In terms of financing, to precise a little bit what we have said. Again, Olivier, our main objective is to remain solid investment grade. And we will design for the second phase, we will design the most efficient way to achieve this objective. And as I said, hybrid issue is a possible option, But today, it's too early to talk about it in detail. In terms of return on capital employed, the objective is to bring what we will acquire to a level which is comparable of what we have today, which is between 89% post tax once the integration is completed, and that will be done also through the synergies. So it will be a significant improvement compared to what we have today on the stress side, and that will increase significantly. It's roughly speaking, plus 400 basis points on their side. Thank you very much. Thank you. Our next question comes from Arcio Simone, Morgan Stanley. Please go ahead. No. Thank you very much for taking my questions. I have two. The first one, I was wondering if that transaction would have any impact on your current investment plan. For example, regarding the the external growth objectives that that you have included in the plan at the moment. That's that's the first one. The second one is, I was wondering if in terms of anti competition potential remedies, if there would be any deal breaker to you. What I mean by that is if you had to sell particular division that, let's say, would be very important to the achievement of the synergy budget, could you actually well, could that lead to to any change in the way you you see the transaction? Thank you very much. Okay. Obviously, I don't see any case where antitrust issues will cost us to sell something which will be key for us in the deal. So I don't see any deal breaker. We carefully studied with a lot of advisers what we have to do. We are now quite certain that out of France, the remedies are very few. But even if they are a bit more than the very few, there is no problem to reach an agreement for that. And in France, we are already ready to sell all the Water business and a part of the Waste business. So I don't see any deal breaker. So we are really confident we are able to solve any issue antitrust. About our current investment plan, you know that we launched beginning of the year launched beginning of the year a four year program, impact 2023 with rotation of our assets program. And during the four years, 3,000,000,000 of divestments and EUR 5,000,000,000 of investment new investment. We are just at the beginning of this program, nine months from the beginning and with the three months of the crisis, so just at the beginning. So of course, we will have to adapt our plan of investment and divestment, taking into account these big new projects we have now. And we will have to adapt it taking into account the actual activities of SWEZ, the projects of SWEZ and our own projects and to select the best opportunities to stay in the range of our guidance in terms of capital employed and in terms of ratio of debt. Thank you. Our next question comes from Thomas Peturich, Direct Life. Please go ahead. Hi, guys. Thanks for organizing the call in the morning. Obviously, not probably the best Monday considering the bank holiday in U. K, but, obviously, you're working hard in France. A quick question here. When you do the math, obviously, you're paying pretty heavy premium versus the underserved Suez environment price. When you look at the synergies you announced of $05,000,000,000 and they're going be obviously achieved over the next coming years before the deal completes, so it's probably five years before we get there. If you discount it back and put multiple on it, you're pretty much paying out those synergies to Suez and to basically Engie and Suez Environment shareholders. What's in it for me as a Veolia shareholder then? That's question number one. Two, can you not just accelerate your own growth without doing the deal? And three, do you considering you're going to be really involved in that deal now over the next coming twelve thirty six months trying to sort it out, would there not be a negative implication of the organic growth of the business? In terms of what we are seeing in terms of Veolia shareholder benefit is the accretion on EPS. And accretion on EPS will be double digit after on year three for the shareholders of Veolia. So it's on their side, it's a very significant accretion. So it takes into account the synergies and the combination of both group, but also the disposal on the remedy. All combined will be double digit significant accretion on EPS for Veolia's shareholder. On EPS, sure, but you're going to increase the leverage as well at the same time. You could achieve that by doing a buyback. You're trading on 15 times earnings next year. Suez is is you're buying Suez at 25 times earnings. Even with synergies, this doesn't strike me as a fantastic deal, and it's a complex deal. We had before this operation with Ipak 2023 a clear growth strategic plan. This operation accelerates our plan of growth. So of course, growth, if it is a good growth and we think we are able to do a good growth, will benefit of the shareholders of the new entity, meaning the actual shareholders of Veolia, first. Secondly, with the price we propose for the share of Suez, we take into account the part of the synergies value we can extract from this deal, but not all the parts. Of course, we share the benefits of these synergies or synergies values between the two types of shareholders, SRES one side, Zoya other side. And as Claude just mentioned, to increase a lot or more than double the EPS for our shareholders means that through first growth, secondly synergies, first synergies, we leave a good balance. I put the biggest parts of all the benefits of this transaction to Veolia shareholders. Right. Okay. Understood. Can you just maybe give me a bit of color as well? Obviously, you're talking about €500,000,000 synergies. There's obviously a bit of disposals there. How much of those what are the cost of cash outflow behind those synergies if you want to achieve them? And how would the cash flow profile of the group would look like over the next coming years during the process? So I guess, in terms of cost to extract those synergies, this is your underlying question. We assume there will be limited since as I explained to you earlier on, those synergies are really cost synergies driven by the Shell's practice and operational synergies. So I guess, I don't see big negative impact or whatever to extract those synergies in the first few years, if it's your underlying question. Right. Okay. Thank you very much. Thanks. Thank you very much. Thanks, guys. Thanks for taking the time. Thank you. Our next question comes from Amun Raiz, Kepler. Please go ahead. Hi. How are you? This is Juan Rodriguez Kepler. I have a quick question, if you may. If if in terms of the dividend on SWEST and the price paid, do actually SWEST shareholders will the price paid does include the dividend or not? Or the price will be adjusted for some of the dividend payment for Swiss? Thank you. In in terms you are talking about Swiss dividend? Or what what do you mean? Yes. On on the price on the price that you offer, $15.15.0.5. Does it include dividends on on on Swiss shareholders We'll receive the dividend. Yes. The 15.5 is including the coupon of Treadshirt to answer your question of the dividend on on 2020. Okay. Perfect. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you wish ask a question, please press zero one on your telephone keypad. Thank you for holding. Our next question comes from Fraser McLaren, Bank of America. Please go ahead. Good morning. Hope you're all well. Just a few questions, please. In the CBS 2030 plan, there are a number of actions that it is planning to implement below EBIT. Just wondering if there's any particular features of Veolia structure that you think could help in achieving those actual benefits. And then in terms of, the timescale, I mean, in the next eighteen months, Suez could be well down the road of its disposal program. What happens if this involves divisions that you like to keep? Is there a result that would alter your view of the value of the deal? Then lastly, what about a scenario where there is an insurmountable antitrust problem or Suez is hostile? Would you be happy being a long term investor in Suez if you couldn't complete the deal? About the question of the divestment of trade, all this case is a good case that they can sell some assets, which would be very interesting for us. And in other case, it will not be the case. So of course, we will try to buy some assets that we'll sell if we are willing to buy them. And we will find the money when we will arrive in at the end of our operation in the cash box of SWEIN. So yes, we can do that. But it will not be the case for all the assets because some of them are more interesting and some of them are less positive for us. About the issues and if we could be stuck with the 29%. First of all, even if Suez is Suez Management is completely hostile and we have difficulties to perform our divestment for the antitrust issues, you know that antitrust considerations are not done to block the any hostile bids. So if at the end of the day, strategy just on this say no position, I think the antitrust body, as it has been the case in the past, will allow us just to divest after the completion of the deal, the global deal, And then we will be able to divest, for example, the French Water business, some weeks after the completion of our deal. So we don't think that the arbitrage issues will block this deal because of the style position of the target. In terms of below EBIT improvement, today, SWEET is working hard to improve the tax rate. You know that their tax rate is quite high. And as we have stated a little bit earlier, of course, a combination of the two groups and the deferred tax assets that we have, both in The U. S. For more than $400,000,000 and in France for more than €400,000,000 will help streamline a lot the tax rate of the combined entity. So that's an obvious one, which will bring some value to the combined entity. And I come back a bit on the virtual hostility of the Suez management. You know, this project is so exciting that I think that the Suez management will also share with us this value of the project for all their teams. And my feeling is that they will join us in some few days of weeks to share it and to put it in force. So hostility is for us not a real option. It is clearly an inclusive proposal for both types of employees, Amelia and Consuelo, and it is also the case for the management. For the ecological transformation, the room is so large and there is so many things to do that there is a place, a good place, an enthusiastic place for everybody. So thank you very much. Is also one question, the last question perhaps, please. It will be the last one. Perfect. The last question comes from Thomas Petrovich. Please go ahead. Hi, guys. Just the last question, I'll let you go. What would happen in theoretical situation which we had already between Fortum and Uniper when you're going have an activist hedge fund on board that would prevent company takeover, you wouldn't be able to consolidate the assets. What's your strategy then? Excuse me. I'm not sure if I really understood your question. Could you repeat it slowly, please, because the line is Sure. Of course. So, obviously, you let's say, ENGIE agrees and sells you the 29.9%, and then you will launch a tender offer for SUEZ and SUEZ shares. If there are a few activist hedge funds that would, you know, build a stake in SUEZ and then prevent you from taking over the company or want to have a very high price for you to do it, like what happens in the situation when you cannot close the deal and extract all the synergies? Like what's your strategy then? Yes. So what so in terms of strategy, you're talking about the tender offer. For the tender offer, if we are above 66.7%, we will be able to merge the two companies and then to extract the synergies of the total of the combined entity. So that's real for us. It's not too much an issue. And because by combining the two entities, when we are above 66.7%, we'll be able to get all the synergies done. The question is about the split out, yes, yes. Okay, understood. Thank you very much. Thank you very much to everybody. Have a very good day. And of course, our IR team is ready for answering all other questions you could have. Good Thank you. Ladies and gentlemen, this concludes today's webcast. Thank you all for attending. You may now disconnect.