Derichebourg // 2020-2021 Universal Registration Document

1

Presentation of the Group and its activities Environmental Services business

Property, plant and equipment, significant non-current assets 1.2.3 The Group’s Environmental Services activity is a heavy consumer of equipment: shredders, shears, inductors, collection and sorting machines, as well as their related infrastructures, namely land, concrete slabs, and electricity supplies. The Group’s strategy is to be the owner or economic beneficiary of all long-term assets that it uses frequently. The table below details the main families of assets and equipment used in the Recycling business:

Family

Number and comments

Land

465 hectares owned and operated

Shredders

28 shredders in use

Shears

70 shears in use

Stationary cranes

64 stationary cranes, almost all electric

Trucks

574 trucks, with a policy for renewal to meet the latest environmental standards

The table below breaks down the carrying value of these assets:

09-30-21

09-30-20

In millions of euros

Gross value

1,762

1,412

Accumulated depreciation

(1,102)

(934)

Net value

660

478

NB: The above figures also include the value of assets belonging to Holding companies, who own the land used by Environmental Services. The above figures also include rights-of-use assets.

Acquisition project of the Ecore Group 1.2.5 Ecore is one of the main players in the French metal recycling market, covering the whole process from waste collection to the sale of recycled materials. As of March 31, 2021, Ecore operated on 83 sites (including 68 collection sites) worldwide, mainly in France where Ecore holds a market share of around 10-15%. Ecore mainly sells ferrous metals such as ferrous scrap metals (81% of volumes sold at March 31, 2021), non-ferrous metals such as aluminum, stainless steel, copper and brass (6% of volumes sold at March 31, 2021), other materials, such as paper, plastic and cardboard (12% of volumes sold at March 31, 2021) and lead for batteries (1% of volumes sold at March 31, 2021). Ecore’s main activities are: (i) waste collection through its local networks; (ii) the use of its industrial facilities to sort and process the waste it collects and to supply its customers with large volumes of high-quality recycled materials; and (iii) leveraging its logistics capabilities and access to deepwater ports to respond quickly to market conditions in the areas in which it operates. As of September 30, 2020, an average of 22% of Ecore’s revenue was generated in France, while the rest was generated in other European countries and outside Europe. During the fiscal year ended September 30, 2020, the Ecore group generated €881 million in revenue and a published Ebitda (after applying IFRS 16) of €53 million. It employs 1,300 people and develops its metal waste recycling activities (92% of revenue) at 83 sites in France, Belgium, Switzerland, Romania and Hungary.

Wherever possible, the Derichebourg Group prefers to purchase the land on which it operates its Environmental Services provision. The Group owns, via Derichebourg Immobilier and its subsidiaries, over 465 hectares of land used by the Environmental Services business. In view of its long-standing ownership of certain land, there may be unrealized capital gains between their value and their historical cost. During the transition to IFRS standards, the market value of land at January 1, 2004 was considered to be the cost in certain cases. A variance (net of deferred taxes) of €41 million was recognized in shareholders’ equity and in tangible assets. Research and development business 1.2.4 Environmental Services is continuing its efforts to increase its returns on the processing of end-of-life consumer goods. One of the aims is to succeed in recovering all or part of the shredding residues either in the form of materials or energy. The objective is to reduce the volumes sent to landfill by 20% by 2022 (for equal volume treated by shredders). Durable businesses have been developed to deal with used tires, certain types of plastic and part of the shredding residues, which are turned into alternative fuels. Derichebourg Environnement now produces approximately 30,000 metric tons per year of alternative fuels for cement plants. The volume for 2021 is lower (15,000 metric tons) due to the closure of an outlet for part of the year.

DERICHEBOURG 2020/2021 Universal Registration Document 22