2. DISCLAIMER
Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document contains "forward-looking
statements" within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a
result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering
reduced profits or losses as a result of intense competition, the risks associated with conducting business in some countries
outside of Western Europe, the United States and Canada, the risk that changes in energy prices and taxes may reduce Veolia
Environnement's profits, the risk that we may make investments in projects without being able to obtain the required approvals for
the project, the risk that governmental authorities could terminate or modify some of Veolia Environnement's contracts, the risk that
our long-term contracts may limit our capacity to quickly and effectively react to general economic changes affecting our
performance under those contracts, the risk that acquisitions may not provide the benefits that Veolia Environnement hopes to
achieve, the risk that Veolia Environnement's compliance with environmental laws may become more costly in the future, the risk
that currency exchange rate fluctuations may negatively affect Veolia Environnement's financial results and the price of its shares,
the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, as
well as the risks described in the documents Veolia Environnement has filed with the U.S. Securities and Exchange Commission.
Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward-looking
statements. Investors and security holders may obtain a free copy of documents filed by Veolia Environnement with the U.S.
Securities and Exchange Commission from Veolia Environnement..
This document contains "non-GAAP financial measures" within the meaning of Regulation G adopted by the U.S. Securities and
Exchange Commission under the U.S. Sarbanes-Oxley Act of 2002. These "non-GAAP financial measures" are being
communicated and made public in accordance with the exemption provided by Rule 100(c) of Regulation G
This document contains certain information relating to the valuation of certain of Veolia Environnement’s recently announced or
completed acquisitions. In some cases, the valuation is expressed as a multiple of EBITDA of the acquired business, based on the
financial information provided to Veolia Environnement as part of the acquisition process. Such multiples do not imply any
prediction as to the actual levels of EBITDA that the acquired businesses are likely to achieve. Actual EBITDA may be adversely
affected by numerous factors, including those described under “Forward-Looking Statements” above.
- 2
4. Where are we in the transformation?
Be more flexible
Reduce costs more than €250M per year
€265M in 2010
First restructuring initiated
Review the asset base (€4 billion in divestments in 3 years)
€1,241M in 2010 + €1,048M in H1 2011
Grow in a more selective way within the company’s leading positions
Return of organic revenue growth confirmed
Organic revenue growth improvement: H1 2010 was -1.1%*, H1 2011 was +4.4%
Increased concentration
Concentration within top 8 countries: 79% of revenue (excluding Veolia Transdev)
=> TO ACCELERATE TRANSFORMATION
4
* Published figures
5. Acceleration of the company’s transformation
Restructure business activities
Simplify the organization
Reduce costs
Modify the Executive Committee
5
6. Restructure business activities
The complete review of company assets is finished
Exit or immediate divestment of activities
Complete assessment of operations in certain geographies
=> Presence in less than 40 countries by the end of 2013
A more concentrated and reactive company
6
7. Company transformation: simplify the organization
Company project: “Convergence” Plan
Reduction of management layers from 2011
In light of restructuring, reorganization of business units
Review of operational processes and reinforcement of management control
Rationalization of headquarters functions
7
8. Company transformation: reinforce cost reductions
Annual Efficiency Plan cost savings of at least €250M is maintained
2013 objective: €300M
Additional cost savings plan
Impact on operating income of at least €150M on 2013 annual results
€250M to €300M in 2015
8
9. Modify the Executive Committee
A team dedicated to organizational structure, operational performance and cost
reductions => Denis Gasquet
A new Head of Environmental Services division => Jérôme Le Conte
A new Head of Energy Services division => Franck Lacroix
A new Director of Human Resources => Jean-Marie Lambert
=> Sharing the same vision for the company’s future
9
11. First half 2011
Continued revenue growth
Localized difficulties in Southern Europe, North Africa and the
United States
Action plan and acceleration of restructuring activities, resulting in
significant write-downs and provisions (€838M)
Positive free cash flow of €155M
11
12. Highlights- Southern Europe (1/5)
First half events
Italy: difficult context in three divisions
Energy Services:
–Increased competition
Adaptation plan related to structure and activities
Environmental Services:
–Persistent operational difficulties
Litigation payment
Water:
–Failure of the referendum on the privatization of services in Water
–Operational financing difficulties
Degradation of activity and financing conditions in Spain and Portugal
Decline in adjusted operating cash flow of €39M
Significant disengagements decided
Fair value adjustment: €494M (non-recurring)
Italy: write-downs of €476M
12
Other Southern Europe: write-downs of €18M
13. Highlights- North Africa (2/5)
First half events
Morocco (Water)
Contracts in Tanger-Tétouan and Rabat
Takes into account ongoing negotiations (conclusions of an Independent Commission)
Morocco (Bus in Rabat)
Modification of the conditions of operation of the contract
Exit, with client taking over operations
Egypt (Environmental Services)
Alexandria contract: non payment for services during the second quarter
Contract termination in progress
Decline in adjusted operating cash flow of €21M
Reduce/exit certain operations as part of restructuring in the zone
Fair value adjustment
€32M in write-downs in non-recurring items
€54M in write-downs and provisions accounted for within adjusted operating income
13
14. Highlights- United States (3/5)
Marine Services (offshore oil and gas industrial services in the Gulf of Mexico -
Environmental Services division)
Discovery of accounting fraud:
correction impacted the opening balance sheet in accordance with IAS 8
First half events:
Weak fleet utilization rates
Reduced adjusted operating cash flow by €37M in H1 2011
Decision to sell this non-core business
TNAI (Energy Services)
First half events:
Revision of expected growth projects
Modification of investment plan
Fair value adjustment
Goodwill write-down of €152M
14
15. Highlight - Veolia Transdev combination (4/5)
In accordance with IFRS 3 revised and IFRS 5, and following Veolia’s loss of control of the
Transport division (closure March 3, 2011):
The former Veolia Transport operations are reclassified to discontinued operations for the months of
January and February 2011 and during the first half of 2010.
The new entity Veolia Transdev (VTD) is consolidated by proportional integration at 50% beginning March
3, 2011.
Divestment, by Veolia Transport, and prior to the closing at March 3, 2011, of certain French and Swiss
transportation assets to RATP.
Initial assessment of opening balance sheet (PPA)
Impact on the accounts for the six months ending June 30, 2011
Scope effect (4 months)
Revenue €1,317M
Adjusted operating cash flow €75M
Operating income €10M
Capital gain of €430M (in discontinued operations)
Reduction of net financial debt of €540M
Full year negative impact on operating income of amortization related to initial assessment of 15
opening balance sheet of roughly €20M to €30M (at 100%)
16. Highlights - Overview (5/5)
Adj. Op cash flow impact Adj. Op. income impact
Operational losses, provisions (WCR) and In €M Impact adj. op
In €M Impact adj. op
income
intangible asset write-downs* cash flow
Southern Europe (18)
Southern Europe (39)
-€97M in adjusted operating cash flow North Africa (54)
North Africa (21)
-€109M in adjusted operating income Marine Services (37)
Marine Services (37)
TOTAL (109)
TOTAL (97)
Non-recurring write-downs
Non-recurring write-downs: €686M
In €M Water Environmental Energy Total
Of which -€500M goodwill impairments and Services Services
-€186M in write-downs of other assets
Southern Europe (77) (149) (268) (494)
North Africa (32) (32)
United States (152) (152)
Other 2 (10) (8)
TOTAL (107) (149) (430) (686)
Capital gain on Veolia Transdev in
discontinued operations of €430M
16
* Excluding Italy
17. Key figures at June 30, 2011
In €M H1 2010 H1 2010 H1 2011 Current Constant
published Re-presented (1) FX FX
Revenue 17,177 14,106 16,287 +15.5% +15.2% (2)
Revenue excl. VTD 14,330 - 14,970 +4.5% (3) +4.2% (3)
Adjusted operating cash flow 1,885 1,694 1,741 +2.8% +2.3%
Adjusted operating cash flow margin 11.0% 12.0% 10.7%
Adjusted operating cash flow excl. VTD 1,726 - 1,665 -3.5% (3) -3.9% (3)
Adjusted operating income 1,078 1,011 938 -7.2% -8.3%
Adjusted operating income margin 6.3% 7.2% 5.8%
Adjusted operating income excl. VTD 1,030 - 927 -10.0% (3) -11.0% (3)
Operating income 1,125 1,101 252 -77.1% -78.9%
Adjusted net income attrib to owners of the company 306 263 188 -28.5% -
Net income attrib to owners of the company 374 374 (67) na -
Free Cash Flow (133) (133) 155 - -
Net financial debt 16,027 16,027 14,764 - -
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods for the reclassification into « net income from discontinued operations » of the historical Veolia Transport
division, the German operations in the Energy Services division, the Norwegian operations in the Environmental Services division, and Water operations in the Netherlands.
For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division. 17
(2) +4.4 % at constant scope and exchange rates
(3) Change compared to June 30, 2011 published figures, excluding Veolia Transdev
18. Revenue by division
in €M 16,287
14,106
6,214 Current Constant Constant
FX FX scope & FX
5,891
Water +5.5% +5.2% +2.5%
Environmental Services +8.4% +8.2% +8.7%
4,894
Energy Services +4.3% +3.8% +2.1%
4,514
Transport +100% - -
3,862 Total +15.5% +15.2% +4.4%
3,701
1,317
H1 2010 (1) H1 2011
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the Environmental Services
division, and operations in the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
18
19. Veolia Water: Revenue increased 5.5%
Operations: Revenue increased 5.7% (+2.6% at constant scope
and exchange rates)
France: despite unfavorable contract changes (SEDIF), revenue First half revenue
stabilized due to price effects and good volumes in the month of May
(€M)
Outside France: Revenue increased 9.7% (+4.5% at constant scope & 6,214 +5.5%
5,891
exchange rates): good performance in Europe (Germany, United
Kingdom and Bulgaria due to contracts purchased from United Utilities)
and in Asia (higher prices in China)
4,530
4,285
Technologies and Networks: Revenue increased 4.9% (+2.5% at +5.7%
constant scope and exchange rates)
Effect of the end of large Design & Build contracts (Marafiq/ Fujairah /
Ras Laffan), offset by : 1,606 1,684 +4.9%
The Hong Kong contract (€67M)
Recovery in Solutions and industrial D&B H1 2010 (1) H1 2011
Good activity at Sade, despite the impact of SEDIF contract renewal
Tec h & Netw orks Operations
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods for the reclassification into « net income from 19
discontinued operations » of the operations in the Netherlands within the Water division
20. Veolia Environmental Services: Revenue increased 8.4%
First half revenue (€M)
Change in revenue H1 2011 / H1 2010 +8.4%
+8.7% at
Waste volumes +2.5% 4,514 constant 4,894
scope &
Price and volumes of recycled materials + 3.7% FX
Service price increases + 1.3%
Other +1.2%
Foreign currency + 0.2%
Consolidation scope - 0.5%
H1 2010 (1) H1 2011
Breakdown of revenue by activity (1) The financial statements of 2010 have been re‐presented to ensure
comparability of periods for the reclassification into « net income from
H1 2010 9%
H1 2011 discontinued operations » of the Norwegian operations
8%
20%
8% 22%
9%
Urban cleaning and collection
Non‐hazardous industrial waste collection and services
6%
6% Hazardous industrial waste collection and services
Sorting, recycling and trading
Hazardous waste treatment
16%
17% 24% Waste‐to‐energy from non‐hazardous waste
24%
Landfilling of non‐hazardous and inert waste 20
16% 15%
21. Veolia Environmental Services: Revenue by geography
% of H1 Δ at constant
2011 scope & FX
revenue
France 35% +8.6% Higher prices and volumes of recycled materials (impact €80M)
Volumes increased notably in hazardous waste, commercial collection and landfills
Germany 13% +11.7% Higher prices and volumes of recycled materials (impact €69M)
Higher industrial volumes
Competitive pressure on municipal contracts and DSD business
United Kingdom 17% +11% Positive contribution from integrated contracts (PFI): Construction revenue in East
Sussex and Hampshire and good waste-to-energy utilization
Municipal still in decline
Good improvement in landfill: higher volumes landfilled and higher prices, including
benefit of landfill tax
North America 14% +1.6% Solid waste: Revenue increased 4.9% at constant scope and FX
Improvement in industrial services, excluding Marine Services
Marine Services: weak fleet utilization (improvement throughout the first half) and
significant damages
21
22. Veolia Energy Services: Revenue increased 4.3%
First half revenue (€M)
Revenue of €3,862M increased 4.3% (+2.1% at
constant scope and exchange rates) +4.3% 3,862
3,701
Higher energy prices
impact of roughly €160M vs. H1 2010
1,890 2,002
Unfavorable climate effect in first half 2011, +5.9%
principally in France and Central Europe
impact of -€113M vs. H1 2010
1,811 +2.7% 1,860
Scope effect related to acquisitions completed in
2010, notably NWR and its subsidiaries
impact of +€45M vs. H1 2010 H1 2010 (1) H1 2011
Outside France
France
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division. 22
23. Veolia Transdev
Following the combination of Veolia Transport and Transdev, consolidation
of the new entity, by proportional integration at 50% since Mar 3, 2011:
Revenue of €1,317M from March to June 2011 (of which Veolia Transport €936M
and Transdev €381M):
For the first half of 2011 Veolia Transdev posted a pro forma* revenue decline of
1.6%:
–Of which -4.2% primarily due to divestments (RATP)
–Of which +2.5% due to organic growth primarily related to new contracts in
France, Germany and the United States
* 6 months Veolia Transdev at 100% 23
24. Adjusted operating cash flow
In €M H1 2010 H1 2010
H1 2011 current constant
published (1) re-presented (1) FX FX
Water 788 784 766 -2.2% -2.5%
Environmental Services 627 608 583 -4.1% -4.6%
Energy Services 386 377 362 -4.0% -4.7%
Transport 159 - 76 - -
Other -75 -75 -46 +38.6% +38.6%
Total adjusted operating cash flow 1,885 1,694 1,741 +2.8% +2.3%
Adjusted operating cash flow margin 11.0% 12.0% 10.7% - -
Adjusted Operating cash flow excl. VTD 1,726 - 1,665 -3.5% -3.9%
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the Environmental Services
division, and operations in the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
24
25. Performance analysis (1/2): Adjusted operating
cash flow
2 000
1,885 -159
1 900
1 800
1,726 +8 -39 1,741
-21 -37
1 700 1,637 +28 1,665
1 600
1 500
1 400
1 300
1 200
1 100
1 000
Adj. op cash Veolia Adj. op cash FX Southern North Africa Marine Total Operations Adj. op. Adj. op.
flow June Transport flow Europe Services cash flow cash flow
2010 June 2010 June 2011 June 2011
(published) excl. Veolia excl. VTD (published)
Transport
25
26. Adjusted operating income
In €M H1 2010 H1 2010 H1 2011 current constant
published (1) re-presented (1) FX FX
Water 590 586 484 -17.4% -18.0%
Environmental Services 251 240 253 +5.2% +3.1%
Energy Services 268 264 253 -4.0% -4.9%
Transport 48 - 10 - -
Other -79 -79 -62 +21.5% +21.5%
Adjusted operating income 1,078 1,011 938 -7.2% -8.3%
Adjusted operating income margin 6.3% 7.2% 5.8% - -
Adjusted operating income excl. VTD 1,030 - 927 -10.0% -11.0%
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the Environmental Services
division, and operations in the Netherlands within the Water division; 26
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
27. Performance analysis (2/2): Adjusted operating income
1 200
1 100 1,078 -48
1,030 +11 -18
-54
1 000
-37
932 -63 927 938
+29 +29
900
800
700
Adj. op Veolia Adj, op FX Southern North Africa Marine Total Capital Site Operations Adj. op Adj. op
income Transport income Europe Services gains provisions* income income
(published) June 2010 June 2011 June 2011
excl. Veolia excl. VTD (published)
Transport
27
* Impact of the change in discount rate utilized to calculate landfill site remediation provisions
28. Veolia Water: Adjusted operating cash flow
and adjusted operating income
Adjusted operating cash flow declined 2.2% (-2.5% at constant exchange rates) to
€766M: -€18M
Contribution from new contracts (Sofia and PFI in UK)
Good performance in Asia (China, Japan, Korea)
Contractual erosion in France (SEDIF)
Asset maintenance costs in the United Kingdom at the beginning of the year
Adjusted operating income declined 17.4% (-18.0% at constant exchange rates) to
€484M: -€102M
Of which €35M of asset write-downs in Southern Europe and North Africa
Decline in capital gains included within adjusted operating income (-€44M)
28
29. Veolia Environmental Services: Adjusted operating cash
flow and adjusted operating income
Adjusted operating cash flow declined 4.1% (-4.6% at constant exchange rates) to
€583M: -€25M
Marine services: -€37M
Egypt: -€21M
Italy: -€14M
Excluding these items, adjusted operating cash flow would have increased by €47M, or 7.7%
Adjusted operating income increased 5.2% (+3.1% at constant exchange rates) to
€253M: +€13M
Of which -€51M related to write-downs and operational impacts, and +€29M related to the
favorable impact of the change in discount rate utilized to calculate landfill site remediation
provisions
Excluding these items, adjusted operating income would have increased 14.6%
29
30. Veolia Energy Services: Adjusted operating cash flow
and adjusted operating income
Adjusted operating cash flow declined 4.0% (-4.7% at constant exchange rates), to €362M:
-€15M
Of which Southern Europe: -€25M
Excluding Southern Europe, adjusted operating cash flow increased 2.7%
Climate impact was more than offset by favorable energy prices
Adjusted operating income declined 4.0% (-4.9% at constant exchange rates) to €253M:
-€11M
Of which Southern Europe: -€23M
Excluding these items, adjusted operating income increased 4.5%
30
31. Veolia Transdev : Adjusted operating cash flow and
adjusted operating income
Following the combination of Veolia Transport and Transdev, and consolidation of the
new entity using proportional integration since March 3, 2011:
Adjusted operating cash flow of €75M and adjusted operating income of €10M
During the first half, the new entity (on a pro forma* basis) posted a decline in adjusted
operating cash flow due to:
Transaction costs for the new entity
Fuel prices
Contract renewals (notably in France) under strong competition
Employee strikes (SNCM & Germany)
* 6 months Veolia Transdev at 100% 31
32. Taxes and cost of net financial debt
The cost of net financial debt declined from €387M to €376M due to lower average net financial
debt. The financing rate increased from 5.06% to 5.32%, primarily due to higher cash position.
After adjusting for one-time items, the group tax rate at June 30, 2011 was 33.1% compared to 33.4%
at June 30, 2010.
The « Effective » tax rate at June 30, 2011 is derived:
Income Tax rate
Tax base
In €M expense before
taxes
Adjusted for one-time items -193 584 33.1%
Goodwill impairment and intangible asset write-downs 3 -686
Impairment of net deferred tax position of France tax group -115 -
Other non-deductible 1 -65
Effective -304 -167 -182.4%
32
33. Reconciliation of operating income to net income
In €M 2010 re-presented (1) 2011
Adjusted Adjustment Total Adjusted Adjustment Total
Operating income 1 011 90 1 101 938 -686 252
Cost of net financial debt -387 - -387 -376 - -376
Other financial revenue and expense -33 - -33 -43 - -43
Income tax expense -183 - -183 -183 -121 -304
Share of net income of associates 7 - 7 6 - 6
Net income from discontinued operations - 40 40 - 434 434
Non-controlling interests -152 -19 -171 -154 118 -36
Re-presented net income attrib. to owners of Co. 263 111 374 - - -
Published net income attrib. to owners of Co. 306 68 374 188 -255 -67
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the
Environmental Services division, and operations in the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
33
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
34. Statement of cash flows: free cash flow of €155M
In €M 2010 2011
Cash flow from operations (1) 1,878 1,732
Repayment of operating financial assets 215 219
Total cash generation 2,093 1,951
Gross investments -1,333 -1,199
Variation of working capital -382 -658
Taxes paid -197 -210
Interest expense -352 -327
Dividend (2) -709 -387
Other (3) -19 -63
Divestments 766 1,048
Free cash flow -133 155
Impact of exchange rates and other -767 299
Net financial debt at June 30 -16,027 -14,764
Change in net financial debt -900 + 454
(1) Of which financial cash flows (‐€6M in 2010 and +€8M in 2011) and cash flow from discontinued operations (€190M in 2010 and ‐€17M in 2011)
(2) Dividend paid to shareho9lders and non‐controlling shareholders
(3) Notably changes in receivables and other financial assets for ‐€27M in 2010 and ‐€72M in 2011
34
35. Net investments
In €M H1 2010 H1 2011
Maintenance investments 458 453
% of consolidated revenue 2.7% 2.8%
Industrial growth investments 392 473
(excl. Operating financial assets)
Financial growth investments (1) 324 102
New operating financial assets 159 171
Gross investments 1,333 1,199 -134
Industrial and financial divestments (2) -766 -1,048 -282
Reimbursement of operating financial assets -215 -219
Net investments 352 -68 -420
(1) Including partial acquisitions between shareholders where there is no change in control and net financial debt of companies entering control
(2) Including capital increases from minority shareholders of €39M versus €108M in H1 2010, net financial debt of divested companies and partial sales between
shareholders where there is no change in control (€32M versus €93M) 35
36. Evolution of net financial debt
In €M
H1 2010 H1 2011
Net financial debt at January 1 -15,127 -15,218
Free cash flow -133 +155
Foreign currency impact -674 +283
Other -93 +16
Net financial debt at June 30 -16,027 -14,764
Change in net financial debt -900 +454
Strong liquidity position: €10.1 billion at June 30, 2011 versus 9.7 billion at June 30, 2010
Continued active debt management
Average maturity of net financial debt of 9.1 years (vs. 9.5 years at June 30, 2010 and 9.4 years at December 31,
2010
Average maturity of gross financial debt of 6.5 years (vs. 7 years at December 31, 2010)
Ratings
Moody’s : P-2 / A3, outlook: stable (on April 18, 2011: rating confirmed and outlook revised from negative to stable)
Standard & Poor’s : A-2 / BBB+, outlook stable (on April 21, 2010: rating confirmed and outlook revised from 36
negative to stable)
38. A strategy focused on profitable growth
Veolia will concentrate its development in activities and regions that are
growing:
Water in Central Europe and China
Environmental Services : PFI in United Kingdom
Energy Services in Central Europe
Our financial discipline allows us to finance this development without
increasing debt
38
39. Recent development at the heart of our strategy
Warsaw heating network (SPEC)
Successful offer related to the privatization of the largest district heating network in
the European Union
Dalkia Polska invested €360M for 85% ownership stake
2010 Revenue: €360M
Veolia has already demonstrated its know-how in the operation and optimization of
heating networks in Central Europe
Possibility of coupling the network with cogeneration facilities
Hertfordshire PFI
350,000 tons of residual waste treated each year
25 year contract duration
Estimated cumulative revenue of £1.3 billion
39
40. Organization of an Investor Day
Beginning of December 2011
Details of the “Convergence” Plan
New scope of the company
Medium term objectives will be discussed
40
41. 2011 annual objectives
Continued organic revenue growth
Slight decline in adjusted operating income at constant exchange rates,
compared to previously published 2010 figures (excluding Veolia Transdev)
Divestments of at least €1.3 billion
Efficiency Plan cost savings of at least €250M
Positive free cash flow after dividend payment
41
44. Table of contents of appendices
Currency movements Appendix 1
Evolution of revenue Appendix 2
Revenue by geographic area Appendix 3
Quarterly revenue Appendix 4
Adjusted operating cash flow margins Appendix 5
Adjusted operating income margins Appendix 6
Adjusted operating income to operating income Appendix 7
Gross investments by division Appendix 8
Divestments completed during 1H11 Appendix 9
Financing costs Appendix 10
Debt management Appendix 11
Impact of foreign currency on net debt Appendix 12
VE SA bond redemption schedule Appendix 13
Consolidated statement of financial position Appendix 14
Evolution of quarterly Veolia Water revenue Appendix 15
Efficiency Plan Appendix 16
Commercial developments Appendix 17 44
45. Appendix 1: Currency movements
Main currencies
1 unit of foreign currency = …€) Δ H1 2011 vs.
H1 - 2010 H1 - 2011 H1 2010
U.S. dollar
Average rate 0.7528 0.7128 -5.3%
Closing rate 0.8149 0.6920 -15.1%
U.K. pound sterling
Average rate 1.1494 1.1521 +0.2%
Closing rate 1.2233 1.1079 -9.4%
Australian dollar
Average rate 0.6730 0.7364 +9.4%
Closing rate 0.6943 0.7416 +6.8%
Czech koruna
Average rate 0.0389 0.0411 +5.7%
Closing rate 0.0389 0.0411 +5.7%
The average rate applies to the income statement and cash flow statement
The closing rate applies to the balance sheet 45
46. Appendix 2: Evolution of revenue
+619 16,287
En €M +1,518
14,106 + 44
FX External Internal
H1 2010 growth growth
H1 2011
re-presented (1)
+0.3% +10.8% +4.4% +15.5%
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the
Environmental Services division, and operations in the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
46
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
47. Appendix 3: Revenue by geographic area
In €M
16,287
14,106 (1)
Δ current Δ constant Δ constant
6,494 FX FX scope & FX
5,734 France +13.3% +13.3% +4.1%
Europe excl. France +19.2% +18.0% +3.7%
6,038 United States +13.5% +19.1% +4.8%
5,067
Asia/Pacific +25.3% +20.9% +14.6%
1,106 1,255
1,138 1,426 Rest of the world +1.1% +1.4% -2.2%
1,061 1,074
H1 2010 re- H1 2011 Total 15.5% 15.2% 4.4%
presented
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the
Environmental Services division, and operations in the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
47
48. Appendix 4: Quarterly revenue
in €M
1st quarter 2nd quarter 1st half
Δ Δ Δ
2010 2011 2010 2011 2010 2011
constant constant constant
Re-presented (1) scope & Re-presented (1) scope & Re-presented (1) scope &
FX FX FX
Water 2,918 3,022 -1.4% 2,973 3,192 +6.3% 5,891 6,214 +2.5%
Environmental 2,113 2,361 +10.2% 2,401 2,533 +7.3% 4,514 4,894 +8.7%
Services
Energy Services 2,299 2,443 +3.3% 1,402 1,419 +0.3% 3,701 3,862 +2.1%
Transport - 334 na - 983 na - 1,317 na
Company 7,330 8,160 +3.4% 6,776 8,127 +5.4% 14,106 16,287 +4.4%
Variation at current FX +11.3% +19.9% +15.5%
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the
Environmental Services division, and operations in the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
48
49. Appendix 5: Adjusted operating cash flow margins
Margin Margin
H1 2010(1) H1 2011
Water 13.3% 12.3%
Environmental Services 13.5% 11.9%
Energy Services 10.2% 9.4%
Transport - 5.7%
Total Company 12.0% 10.7%
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the
Environmental Services division, and operations in the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division. 49
50. Appendix 6: Adjusted operating income margins
Margin Margin
H1 2010 (1) H1 2011
Water 9.9% 7.8%
Environmental Services 5.3% 5.2%
Energy Services 7.1% 6.6%
Transport - 0.8%
Total Company 7.2% 5.8%
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the Environmental Services division, and operations in
the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division. 50
51. Appendix 7: Adjusted operating income to
operating income
In €M H1 2010 H1 2011
re-presented (1)
Adjusted operating income 1,011 938
Goodwill and other asset impairments Italy - -448
Goodwill impairment United States - -152
Goodwill impairment Morocco - -32
Goodwill impairment Spain - -18
Other write-downs and restructuring charges (Italy) - -27
Capital gain on Usti 88 -
Other 2 -9
Operating income 1,101 252
Non-recurring items +90 -686
(1) The financial statements of 2010 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into « net income from discontinued operations » of the German operations in the Energy Services division, the Norwegian operations in the Environmental Services division, and operations in
the Netherlands within the Water division;
‐ For the reclassification into “net income from discontinued operations” of the historical Veolia Transport division;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division. 51
52. Appendix 8: Gross investments by division
Growth
In €M
Maintenance Financial, incl. Industrial New operating Total
Δ scope (1) financial assets
Water 70 6 224 100 400
Environmental Services 204 63 112 42 421
Energy Services 46 14 98 27 185
Transport 119 4 13 - 136
Other 14 15 26 2 57
Total H1 2011 453 102 473 171 1,199
Total H1 2010 458 324 392 159 1,333
(1) Including transactions between shareholders – partial acquisitions with no change in control 52
53. Appendix 9: Divestments completed during 1H11
In €M
H1 2011 industrial and financial divestments (1) 1,048
Of which: Operation Veolia Transdev 540
Of which: development partnerships 71
Divestment of 5% of Dalkia Ceska to J&T and EBRD investment
in Dalkia Eastern Europe
Of which: industrial divestments 80
(1) Including capital increases subscribed to by minorities, net financial debt of divested companies and partial divestments between non‐controlling interests (with no 53
change in consolidation scope).
54. Appendix 10: Net finance costs
In €M H1 2010 * H1 2011 Variation
Cost of net financial debt -408 -376 +32
Impact change in average debt +10
Impact change in interest rates +21
Impact foreign currency * Published figures +1
Gross debt: €20,337M vs. €20,629M Closing net financial debt (1) in €M
Cost of borrowing 4.08% vs. 4.13% 18 000
Cash & cash equivalents of €6,037M: 1.38% 16 820 16 827
16 027
15 909 15 767
16 000
Net debt of €14,764M€ vs. €16,027M 15 127
15 377 15 218
14 764
Cost of borrowing of 5.32% (vs. 5.06%) 14 511
Average net debt (2) of €14,756M versus €15,542M€ in H1 2010 14 000
12 000
(1) Net financial debt represents gross financial debt (non‐
current borrowings, current borrowings, bank overdrafts
and other cash position items), net of cash and cash
equivalents and excluding fair value adjustments to 10 000
31-Mar- 30-Jun- 30-Sep- 31-Dec- 31-Mar- 30-Jun- 30-Sep- 31-Dec- 31-Mar- 30-Jun-
derivatives hedging debt; 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011
(2) Average net financial debt is the average of monthly debt 54
during the period.
55. Appendix 11: Debt management
Ratings
Moody’s : P-2 / A3 stable outlook (April 18, 2011: rating confirmed and outlook revised from negative to stable)
Standard & Poor’s : A-2 / BBB+ stable outlook (April 21, 2010: rating confirmed and outlook revised from negative to stable)
Average net debt maturity: 9.1 years at June 30, 2011 vs. 9.5 years at June 30, 2010
Group liquidity : €10.1 billion, of which €4.1 billion in undrawn confirmed credit lines (without disruptive covenants)
Net group liquidity: €5.8 billion
Net financial debt after hedges Currency breakdown of gross debt
at June 30, 2011 after hedges at June 30, 2011
Fixed rate : 62%
Other 19% (1)
of which Euro : 76%
of which USD : 52%
GBP 9% Euro 61%
of which GBP : 41%
Variable rate: 38% USD 8%
Variable rate capped: 9%
55
(1) Of which RMB 4% and HKD 3%
56. Appendix 12: Impact of foreign currency on net debt
Net financial debt at December 31, 2010 €15,218 M
Net financial debt at June 30, 2011 €14,764 M
Variation -€454 M
Of which impact of FX -€283 M
US dollar -€151 M
U.K. pound sterling -€90 M
Hong Kong dollar -€51 M
56
58. Appendix 14: Consolidated statement of financial position
Year ended Six months
December 31, 2010 ending June
In €M re-presented (1) 30, 2011
Intangible assets (concessions) 4,164.6 4,279.6
Property, Plant & Equipment 9,703,3 8,814.5
Other non-current assets 11,932.2 11,048.1
Operating financial assets (current and non-current) 5,628.6 5,427.0
Cash and cash equivalents 5,406.8 6,037.2
Other current assets 14,591.8 13,480.7
Total Assets 51,427.3 49,087.1
Capital (including non-controlling interests) 10,804.4 10,262.4
Financial debt (current and non-current) 20,723.2 20,677.1
Other non-current liabilities 4,610.4 4,387.3
Other current liabilities 15,289.3 13,760.3
Total Liabilities 51 427,3 49,087.1
58
(1) The opening balance sheet has been re‐presented according to IAS 8 in order to take into account the accounting fraud during the years 2007‐2010 in the Marine Services business.
60. Appendix 16: Efficiency Plan in line with 2011 objective
En M€
H1 2009* H1 2010* H1 2011
Water 37 38 46
Environmental Services 25 43 30
Energy Services 21 31 32
Transport 15 18 7**
Other 3 2 -
TOTAL 101 132 115
*Published figures 60
** Included in the scope effect
61. Appendix 17: Main contracts won or renewed
since the beginning of 2011
ORGANIC GROWTH
‐ Renewals:
100 main contracts renewed in France during the 1st half 2011 in Water (o/w 50 in drinking water VTNI
& 50 in wastewater), 74 in Waste (o/w 48 from local authorities & 26 from companies),
5 in Transportation & 80% of contracts due to expire during the 1st half 2011 renewed in Energy La Manche
VTNI (Seine Maritime) (transportation) ‐ Length: 4 years ‐ Cumul. Rev.: €92m
Fontainebleau (water) ‐ Length: 10 years ‐ Cumul. Rev.: €34m
SICTOM Trenitalia
Nanterre Airefsol Energies
The Nanterre waste management authority (SICTOM) (waste) ‐ Length: 3 years ‐ Cumul. Rev.: €36m
Collection of household waste & recyclable materials in Hyères les Palmiers (waste) Lorient M2o Fontainebleau
‐ Length: 6 years ‐ Cumul. Rev.: €25m city
Operation of the biodegradable waste & household residual waste treatment unit for
the Pays de Lorient Conurbation (waste) ‐ Length: 6 years ‐ Cumul. Rev.: €25m
‐ Outsourcing / Privatization: Besançon
The «La Manche Conseil Général» (energy performance partnership contract) (energy)
‐ Length: 15 years ‐ Cumul. Rev.: €8m
Local bus services in Besançon(1) (transportation) ‐ Length: 7 years ‐ Cumul. Rev.: €217m
Management of Carcassonne airport infrastructure (transportation) ‐ Length: 7 years ‐ Cumul. Rev.: €56m
Management of Perpignan airport infrastructure (transportation) ‐ Length: 7 years ‐ Cumul. Rev.: €70m
Electric car‐sharing vehicles service in Nice, through VENAP (70% Veolia Transdev/30% EDF)
(transportation) ‐ Length: 12 years ‐ Cumul. Rev.: €42m
‐ Engineering / Design & Build: Verdon /
Hydraulic link Verdon/Saint‐Cassien (networks) (water) ‐ Cumul. Rev.: €12m Saint‐Cassien
Carcassonne Nice
PARTNERSHIPS Hyères
Partnership between Veolia Transport & Trenitalia(2) with the creation of a new rail Perpignan
operator (50/50) aiming at providing overnight international services between
France & Italy at the end of 2011 (transportation)
Partnership between Veolia Water & Orange with the creation of «m2o city», an operator Renewals
specialized in remote environmental data & water meter reading services (water)
Partnership between Eolfi (Veolia Environnement’s subsidiary) & Réseau Ferré de France (RFF)(3) (1) Operations start up on January 1st, 2011 Outsourcing / Privatization
with the creation of a common company (67/33) «Airefsol Energies » aiming at (2) Signature in January 2011 Engineering / Design & Build 61
developing clean energy sources (multi‐services) (3) Signature in 2010 Partnerships with other companies
62. Appendix 17: Main contracts won or renewed
since the beginning of 2011
ORGANIC GROWTH
‐ Renewals:
SAN C2013(1) (transportation) ‐ Length: 10 years ‐ Cumul. Rev.: €960m
OWL ‐ Dieselnetz (1) (transportation) ‐ Length: 12 years ‐ Cumul. Rev.: €494m EBRD
Linköping city (transportation) ‐ Length: 8 years ‐ Cumul. Rev.: €160m Sweden
‐ Outsourcing / Privatization: IFC
Management contract for Thames Water’s metering services through Vennsys Limited
(water) ‐ Length: 10 years ‐ Cumul. Rev.: €276m
Contract for street cleaning, waste collection & recycling for the Haringey district
of London (waste) ‐ Length: 14 years ‐ Cumul. Rev.: £200m United Kingdom
Contract for waste collection & recycling for the Hart county and the Basingstoke Russia
Linköping
& Deane county (waste) ‐ Length: 7 years ‐ Cumul. Rev.: £32m
Private Finance Initiative (PFI) contract for residual waste treatment for
the Hertfordshire county (waste) ‐ Length: 25 years ‐ Cumul. Rev.: £1.3bn Hertfordshire
«E‐Netz Rosenheim» (transportation) The Netherlands Dieselnetz
Haringey LNVG SPEC
‐ Length: 12 years (3‐year option) ‐ Cumul. Rev.: €1,092m (without option) Vennsys SAN
Dieselnetz LNVG (transportation) ‐ Length: 10 years ‐ Cumul. Rev.: €134m Basingstoke Ltd C2013 OWL
Poland
Vigo new hospital ‐ O&M contract (PPP) (energy) ‐ Length: 20 years ‐ Cumul. Rev.: €96m & Deane Dieselnetz
Nestlé (energy) ‐ Length: 15 years ‐ Cumul. Rev.: €96m
Campus of Bari (energy) ‐ Length: 12 years ‐ Cumul. Rev.: €40m Germany
Bonduelle (energy) ‐ Length: 5 years ‐ Cumul. Rev.: €4m Vigo Hungary
Rosenheim
‐ Engineering / Design & Build: ERD
Bonduelle
ERD (sewer system) (water) ‐ Cumul. Rev.: €11m Portugal Spain
Nagykanizsa
Nagykanizsa (sewer & rain water system) (water) ‐ Cumul. Rev.: €11m
Nestlé Italy
EXTERNAL GROWTH
Privatization of the district heating network of Warsaw(2) (energy)
‐ Disposal of 85% stake in SPEC Renewals
Bari Outsourcing / Privatization
PARTNERSHIPS Engineering / Design & Build
Partnerships (energy) between: Interests acquisition in other companies
‐ Dalkia & the International Finance Corporation (a member of World Bank Group) ; (1) Signature in July 2011 Partnerships with other companies
‐ Dalkia & EBRD with a 5.5% stake acquisition each in the capital of Dalkia Eastern Europe,
(2) Transaction subject notably by the Warsaw town council 62
the new subsidiary created to bring together its activities in Russia & the Baltic states
& the European Commission approvals
63. Appendix 17: Main contracts won or renewed
since the beginning of 2011
ORGANIC GROWTH
‐ Renewals:
Aberdeen Proving Ground ‐ Hazardous waste collection & treatment (waste)
‐ Cumul. Rev.: $75m
New York ‐ Waste Electrical & Electronic Equipment (WEEE) collection & treatment
(waste) ‐ Contract term: 10 years (2 options of 5 years)
Victor Valley Operations (transportation) ‐ Length: 7 years ‐ Cumul. Rev.: €46m
‐ Outsourcing / Privatization: Canada
Long Island Bus (LIB) «Management contract » (transportation)
Hazardous waste treatment for UPS Group’s sites in the United States
(waste) ‐ Cumul. Rev.: $50m
Hazardous waste treatment for BASF Group’s sites in the United States Montreal
(waste) ‐ Cumul. Rev.: $24m United States
Centre Hospitalier Universitaire de Montreal (CHUM) (energy) New York
West Virginia BASF
‐ Length: 30 years ‐ Cumul. Rev.: around €1.2bn California Long Island
Aberdeen
‐ Engineering / Design & Build: Victor Valley
UPS
Construction of a mine wastewater treatment
plant in West Virginia (D&B) (water)
Global cumul. Rev.:
Construction & operation a produced water $150m
facility for an oilfield in California (DBO) (water) (including Civil
‐ Operating length: 10 years
engineering)
Renewals
Outsourcing / Privatization
Engineering / Design & Build
63
