Veolia Environnement S.A.

The ordinary dividend for the year was reduced by 50%. €200 million of additional cost cutting for the year on top of the €250 million already planned (€64 million already achieved in first quarter). €500 million reduction in capital expenditure (capex). Veolia expects overall capex, including acquisitions, to decline to €2.0 billion from its previous expectation of €2.5 billion. The outlook reflects our anticipation that Veolia will use strong remedy measures to offset potential operational underperformance related to the COVID-19 lockdown in Europe and consequent recession, which is our current assumption based on a European lockdown of four-to-six weeks. We currently project that Veolia will post credit metrics commensurate with a 'BBB' rating on a sustainable basis, including adjusted FFO

...COVID-19 will have a severe impact on Veolia, which has taken remedy measures to maintain credit headroom. Veolia is exposed to the COVID-19 pandemic and associated economic downturn, which could lead to operating underperformance, notably in its waste (36% of 2019 EBITDA) division, and to a lesser extent its energy (20%) business. Following the spread of COVID-19 in Europe, Veolia suspended its EBITDA guidance for 2020, and then announced, among others, the following remedy measures, which we expect will allow the company to maintain adjusted FFO to debt close to 20% in 2020: + The ordinary dividend for the year was reduced by 50%. + 200 million of additional cost cutting for the year on top of the 250 million already planned (64 million already achieved in first quarter). + 500 million reduction in capital expenditure (capex). Veolia expects overall capex, including acquisitions, to decline to 2.0 billion from its previous expectation of 2.5 billion. Veolia's strong diversification in...

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