DERICHEBOURG - Universal registration document 2018-2019

1

CSR report (serving as statement of extra-financial performance) Overview of businesses and business model

In this activity, the features that distinguish the Group from its competitors are: the density of geographical coverage; p the vertical integration made possible by this coverage: the Group’s p vast network allows it to cost-effectively install secondary processing lines (flotation, aluminum refinery, stainless steel waste mixture preparation, preparation of primary aluminum for extruders), which are supplied with flows from various sites, without the need for significant purchases outside the Group; the management of operations with a long-term perspective, which p is reflected in particular by a low-inventory policy: 15 days of activity for ferrous scrap metal, 15 to 25 days for non-ferrous metals. In a period when prices are rising, the Group benefits less from recovery than some of its competitors who hold more inventory. It generally weathers lower-price periods better than its competitors, which may put it in a position as a consolidating actor at the bottom of the cycle. 1.1.1.1.3.1 The Group processed 3.45 million tons during the year, down 8% by volume from the previous year. In France, the Group has the largest network in the sector (162 sites). Since transportation accounts for a large part of incoming waste costs, this proximity to waste production sites is strategic. Derichebourg Environnement prepares ferrous scrap metal, using 28 shredders and 64 shear balers to produce materials that comply with high-quality standards: elimination of impurities, compliance with specifications and calibration of batches. The recovered products are destined primarily for electric steel mills, foundries and converters in the long steel industry. In France, the Group estimates that it has a 16% to 17% share of the ferrous scrap metal collection market, and about 23% (Derichebourg estimate based on data from Federec) of the processing market (the difference between the two figures can be explained in particular by the tonnages purchased from waste collectors who do not have industrial facilities). The second-largest actor with a national presence is the Ecore Group, whose share of the ferrous scrap metal processing market is around 15%-20% (source Derichebourg). Boone Comenor (Suez Environnement Group) is very active in tenders for the removal of waste from automobile factories. In each region, the Group also competes with a large number of regional players that have a few sites. Once prepared and sorted, volumes are sold to domestic steelmakers, or major exporters (about 10% of volumes) if the Group is close to port areas. Ferrous metals

$18,000

$17,000

$16,000

$15,000

$14,000

$13,000

$12,000

$11,000

$10,000

$9,000

$8,000

jul.16

jul.17

jul.18

jan.16

jan.17

jan.18

jan.19

oct.15

oct.16

oct.17

oct.18

apr.16

apr.17

apr.18

apr.19

sept.19

Nickel LME Settlement

It should be noted that these graphs, and especially those for copper and nickel, imperfectly reflect the change in the Group's sale prices, which are based on the LME prices, but which also take into account a discount for the secondary metal. This discount changes according to market conditions. For the specific case of stainless steel (which contains on average 7% to 8% of nickel, comprising the main value of stainless steel), the discount grew in line with the growth in nickel prices, cancelling the effect of the increase. Business portfolio 1.1.1.1.3 The Group’s Recycling business is present in seven countries, with a predominant share of its business conducted physically in France. The table below breaks down the distribution of purchases by country (ferrous scrap metal + non-ferrous metals).

Italy 2% USA 9%

Mexico 3%

Spain

0%

France 74%

Belgium 6% Germany 6%

The Group operates in 200 recycling centers, of which 162 are in France. This business employs about 2,600 employees.

DERICHEBOURG p 2018/2019 Universal Registration Document 20