Let’s go step-by-step. --- **Step 1 – Identify the relevant industry for Veolia Environnement** Veolia Environnement is a global provider of water, waste, and energy services. Given its activities — water and waste utilities, often under long-term concessions or regulated frameworks — the closest match among the provided methodologies is **Regulated Utilities**. --- **Step 2 – Estimate Adjusted Debt** We’ll use the formula: > Adjusted_Debt = (reported_debt + leases + pension_deficit + guarantees + hybrid_debt_portion + other_debt_like_items) − eligible_cash --- **2.1 – Reported debt** From the balance sheet at 2023-01-01: - Noncurrent financial liabilities (excluding concession liabilities) = 19,692.1M EUR - Current financial liabilities (excluding concession liabilities) = 6,521.4M EUR - Bank overdrafts = 213.6M EUR - Noncurrent concession liabilities = 1,680.5M EUR - Current concession liabilities = 243.2M EUR Total reported debt = 19,692.1 + 6,521.4 + 213.6 + 1,680.5 + 243.2 = **28,350.8M EUR** --- **2.2 – Leases** - Noncurrent lease liabilities = 1,656.2M EUR - Current lease liabilities = 496.5M EUR Total leases = **2,152.7M EUR** --- **2.3 – Pension deficit** No explicit pension deficit is reported separately here, but we have “Noncurrent Provisions” and “Current Provisions.” Without detail, we assume pension deficit = **0** for simplicity (we would need more data to adjust). --- **2.4 – Guarantees & other debt-like items** No explicit data on guarantees or other debt-like items in the given facts → assume **0**. --- **2.5 – Hybrid debt portion (50%)** Deeply subordinated securities (hybrid) at 2023-01-01 = 3,496.3M EUR. S&P typically adds back 50% as debt: 0.50 × 3,496.3 = **1,748.15M EUR**. --- **2.6 – Eligible cash (surplus cash)** Cash and cash equivalents at 2023-01-01 = 9,012.2M EUR. In the absence of specific surplus cash threshold details, we use all cash as eligible (standard approach). Eligible cash = **9,012.2M EUR**. --- **2.7 – Adjusted Debt calculation** Adjusted_Debt = 28,350.8 + 2,152.7 + 0 + 0 + 1,748.15 + 0 − 9,012.2 = **23,239.45M EUR** --- **Step 3 – Estimate Adjusted EBITDA** Formula: > Adjusted_EBITDA = EBITDA (reported or reconstructed) + adjustment_leases + nonrecurring_losses − nonrecurring_gains ± pension_adjustments ± joint_venture_proportional_EBITDA ± other_normalization_adjustments --- **3.1 – Reconstruct EBITDA for FY 2022-01-01 to 2023-01-01** From the income statement: - "Resultat operationnel apres quote part..." = Operating income after equity-accounted income = 2,333.3M EUR - Add back "Operating Depreciation Amortization Provisions And Impairment Losses" = 3,178.6M EUR EBITDA (reported) ≈ 2,333.3 + 3,178.6 = **5,511.9M EUR** --- **3.2 – Lease adjustment** Under IFRS 16, depreciation of right-of-use assets is included in D&A. We remove lease depreciation (implicitly) and add back lease interest to avoid double-counting leases in debt but not in EBITDA. However, given the facts, a simplified approach is to add lease interest to EBITDA. Lease interest = 52.5M EUR (given). Thus, Adjusted EBITDA = 5,511.9 + 52.5 = **5,564.4M EUR**. --- **3.3 – Nonrecurring items** The “Gains losses on disposal of operating assets” = -299M EUR (loss) → add back as non-recurring loss. “Plus ou moins values de cessions d'actifs financiers" = -370M EUR (loss) → add back. Total nonrecurring add-back = 299 + 370 = **669M EUR**. New Adjusted EBITDA = 5,564.4 + 669 = **6,233.4M EUR**. --- **3.4 – Pension adjustments** Not enough information for pension adjustment → assume 0. --- **3.5 – Joint-venture proportional EBITDA** We would normally add proportional EBITDA from JVs. Given, “Share of net income of JVs & associates” is already in operating income, assuming it’s already captured; no further adjustment without data. --- **3.6 – Other normalization adjustments** Also omit for lack of detail. Final Adjusted EBITDA ≈ **6,233.4M EUR**. --- **Step 4 – Ratio** Adjusted_Debt / Adjusted_EBITDA = 23,239.45 / 6,233.4 ≈ **3.73**. --- 3.73