DERICHEBOURG - Universal registration document 2018-2019

3

Group management report Earnings from businesses and financial position

The average unit price of NFM sold was 8% lower (€107/t) than the previous year. The drop was especially sharp for the aluminum family (-16% for aluminum ingots) and lead (-13%). Service provisions Services revenue was down 7.7%. This was mainly due to the disposal of household waste collection and waste processing activities in Italy and to the disposal of the Moroccan activities.

In France, the trends in the services businesses were as follows: Recycling services: +6%; p Services to local authorities: +5%. p

2019

2018

Change

REC

SCOL Total ENV

REC

SCOL Total ENV

REC SCOL Total ENV

In millions of euros

Trade margin Ferrous scrap metal & NFM

337.6

337.6

363.3

363.3 (25.7)

(25.7)

Trade margin Other Products

(1.0)

(1.0)

(4.6)

(4.6)

3.6 5.1

3.6

Service provisions

109.5 446.1 (309.2) 136.9

203.6 203.6 (178.3)

313.0 649.7 (487.6) 162.1

104.3 463.1 (313.3) 149.8

235.1 235.1 (211.8)

339.4

(31.5) (31.5)

(26.4) (48.5)

Net income

698.2 (17.0)

Costs

(525.1)

4,0

33.5

37.5

Recurring Ebitda

25.2

23.3

173.1 (12.9)

1,9 (11.0)

Depreciation and amortization

(58.2) 78.7

(15.8)

(74.0) 88.2

(50.1) 99.7

(20.1)

(70.2)

(8.1)

4.3

(3.8)

Recurring EBIT

9.5

3.2

102.9 (21.0)

6.3 (14.7)

REC: Recycling. SCOL: Public sector services.

Recurring Ebitda For Environmental Services, recurring Ebitda amounted to €162.1 million, down 6.4% compared to the previous fiscal year. It represented 8.8% of revenue, which was an improvement of 60 basis points over the previous year. This improvement demonstrates that unit margins were maintained against a background of lower prices. Recurring operating profit (loss) The division's depreciation amounted to €74 million, up €3.8 million compared to last year (including growth of €8 million for the recycling business). This increase is the result of more sustained investment during recent years. Investments made during the fiscal year are described in section 3.2.7. Recurring operating profit (loss) stood at €88.2 million, down €14.7 million (i.e. 14.3%) compared to last year. Operating profit (loss) There were few notable non-recurring items over the fiscal year. Recurring operating profit amounted to €87.5 million, down €11.1 million or 11.3%.

In the recycling business, consolidated net income was down €48.5 million, and costs (before depreciation) by €37.5 million. The change in the trade margin of the Recycling business was attributable mainly to a reduction in volumes of ferrous metals processed (€(14.9) million), a slight erosion of unit margins impacted by falling prices (€(5.4) million). With regard to non-ferrous metals, the volume effect was low, with unit margins eroded very slightly overall in the context of lower prices (€(3.4) million). The limited erosion of unit margins (traditional ferrous and non-ferrous metals), and the resilience of the induction flotation and aluminum refinery activities should be highlighted in an unfavorable climate. Given this lower activity, cost savings were made: semi-variable costs, such as energy (€(2.9) million) or maintenance p and repair costs; personnel charges: €(3.8) million p For services to local authorities, recurring Ebitda grew by €1.9 million to stand at €25.2 million, in particular thanks to improved results in France. It should be explained that this recurring Ebitda includes €9.8 million for businesses sold during the year (collection and processing of non-metallic wastes in Italy, all activities in Morocco).

DERICHEBOURG p 2018/2019 Universal Registration Document 93