2007, First Half Results

  • 218 views
Uploaded on

2007-08-30

2007-08-30

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
218
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
3
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Veolia Environnement Investor Relations – First Half 2007 Results - 30/08/2007 FIRST HALF 2007 RESULTS
  • 2. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 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 Environnements 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 Environnements 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 Veolia Environnements compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnements 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. 2
  • 3. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Disclaimer This document does not constitute an offer of securities in the United States or in any other jurisdiction. Securities may not be offered in the United States without registration under the United States Securities Act of 1933 or an exemption from registration. Veolia Environnement does not intend to register the offering described in this document or to conduct a public offering of securities in the United States. A French language prospectus relating to the French offering has been approved by the French Autorité des Marchés Financiers under number 07-180. Copies of the French prospectus are available in France from Veolia Environnement or from authorized financial intermediaries. The French prospectus contains a section that describes certain risk factors that investors should take into account before making any investment decision. The offer and sale of the securities described in this document may be restricted by law or regulation. No offer will be made in any jurisdiction or to any person except under circumstances in which such offer may lawfully be made. 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. 3
  • 4. Veolia Environnement Investor Relations – First Half 2007 Results - 30/08/2007 Further profitable growth in the first half of 2007
  • 5. First half of 2007Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Confirmation of profitable growth and of the growth model  Strong revenue growth  Further improvement in operating income  Significant increase in recurring net income  Strengthened balance sheet: launch of a €2.6 billion capital increase on June 12th (1) (1) Cash effect in the second half of 2007 5
  • 6. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Further growth (€ million) 16 000 15,462 1,272 13,941 1,129 14 000 12,245 12 000 1 000 966 10 000 +11.6% (1) (2) +13.0% (1) +15.6% (1) 8 000 6 000 +13.1% (1) 500 4 000 2 000 0 0 H1 2005 Adjusted H1 2006 Adjusted H1 2007 H1 2005 Adjusted H1 2006 Adjusted H1 2007 Consolidated revenue (3) Operating income 1,236 482 1,129 500 1 000 962 400 381 325 +9.8% (1) 300 +16.2% (1) +26.6% 500 200 +17.1% 100 0 0 H1 2005 Adjusted H1 2006 Adjusted H1 2007 H1 2005 Adjusted H1 2006 Adjusted H1 2007 Recurring operating income Recurring net income(1) At constant exchange rates(2) Excluding impact of weather conditions and decline in energy prices: +12.2% at current exchange rate.(3) Revenue from ordinary activities 6
  • 7. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Key figures at June 30, 2007 € million 06/30/06 06/30/07 Growth adjusted  Revenue (1) 13,941 15,462 +10.9%  Cash flow from operations (2) 1,910 2,012 +5.4%  Operating income 1,129 1,272 +12.7%  Recurring operating income 1,129 1,236 +9.5%  Recurring net income 381 482 +26.6%  Net income after minority interest 445 493 +10.9% (3)  Net financial debt 14,675 15,200 - (1) See definition page 6 (2) Operating cash flow: Cash flow from continuing operations before tax and financial expense. (3) At 12/31/2006 7
  • 8. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Breakdown of revenue(1) by division € million Current exchange Constant 5,221 rates exchange rates 4,801 Water +8.8% +9.4% Waste +18.3% +19.9% 4,196 3,548 Energy Services +2.3% (2) +2.1% Transportation +16.1% +17.1% 3,245 3,321 VE Group +10.9% +11.6% 2,347 2,724 06/30/2006 06/30/2007 Adjusted Consolidated revenue (1) in H1 2007: €15,462m (1) See definition page 6 (2) Excluding impact of variation of energy prices: +7.9% 8
  • 9. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Breakdown of revenue (1) by geographic region € million Current Constant 7,036 exchange rates exchange rates 6,677 France +5.4% +5.4% Europe ex France +17.8% +17.0% North America -0.5% +7.3% Asia/Pacific +31.5% +33.0% 5,379 Rest of the world +22.6% +25.6% 4,571 VE Group +10.9% +11.6% 1,392 1,385 762 1,002 539 660 06/30/2006 06/30/2007 Adjusted Consolidated revenue (1) in H1 2007: €15,462m (1) See definition page 6 9
  • 10. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 France: revenue up 5.4% to € 7,036m Lille FRANCE Le Touquet  Leslys (transportation) Abbeville Charleville-Mézières - Length: 30 years – Cumul. revenue: €459m  Lafarge Ciments (transportation) Gonesse - Freight train between Bordeaux & Toulouse - Length: 4 years – Cumul. revenue: €10m Avranches  SNCM (transportation) Renault - Length: 6.5 years – Cumul. revenue: €1bn  City of Cognac – Euro 4 standards, biofuels reduced noise during collection of bins (waste)  Greater Mâcon region (water & wastewater) (water) - Length: 10 years – Cumul. revenue: €57m Mâcon  Abbeville (water) – Length: 15 years – Cumul. revenue: €21m  Gonesse (water) – Length: 15 years – Cumul. revenue: €27m Leslys Samoëns  Sainte-Maxime (water) – Length: 12 years – Cumul. revenue: €32m  Samoëns (WWTP construction) (water) Cognac - Cumul. revenue: €9m ST Micro  Avranches (WWTP construction) (water) Lafarge Ciments - Cumul. revenue: €7m  Le Touquet (WWTP construction) (water) - Cumul. revenue: €6m Ste- Maxime  Lille urban community – Organic recovery center – Séquedin (energy) – Length: 11 years – Cumul. revenue: €7m Cap dAgde SNCM  STMicroelectronics - Crolles (energy) - Length: 6 years – Cumul. revenue: €27m  Charleville-Mézières – DSP (energy) - Length: 20 years – Cumul. revenue: €41m  Cap dAgde – DSP (energy)  Contract start-up - Length: 18 years – Cumul. revenue: €41m  Contract won or renewed  Renault - sites of Boulogne-Billancourt, Plessis-Robinson, Guyancourt & Rueil-Malmaison (multi-services)  Company acquisition - Length: 5 years – Cumul. revenue: €600m  Partnership with other companies 10
  • 11. Veolia Environnement Investor Relations – First– Résultats semestriels 2007 Relations Investisseurs Half 2007 Results – 30/08/07 Europe (outside France): revenue up +17% (1) to €5,379m Finnmark UNITED KINGDOM  London Borough of Lambeth (waste) – Length: 7 years – Cumul. revenue: €156m  Southwark Council - VES selected as « preferred bidder » (waste) – Length: 25 years IRELAND Norway  Limerick (DBO) (water) – Operating period: 20 years – Cumul. revenue: €71m (incl. construction) BELGIUM  Brussels North (BOOT) -  (water) – Operating period: 20 years – Cumul. revenue: €992m (excl. construction)  De Lijn (transportation) – Length: 5 years – Cumul. revenue: €165m Rogaland The Netherlands SULO GERMANY The Hague Ireland  SULO (waste) – 2006 revenue: €1.3bn Brabant De Lijn THE NETHERLANDS Limerick Germany Brussels  The Hague – Harnaschpolder plant (DBFO)(water) London Borough Slovakia - Global operating period: 30 years – Global cumul. revenue: €1.5bn Belgium Bratislava  Brabant (transportation) – Length: 8 years – Cumul. revenue: €480m United Kingdomof Lambeth Lucenec Hungaria NORWAY Pannon Power Southwark Sinesco  Finnmark (transportation) – Length: 8 years – Cumul. revenue: €168m  Rogaland (transportation) – Length: 5.5 years – Cumul. revenue: €226m SLOVAKIA  Espool - Lucenec & Rekotak – Bratislava (energy) - Espool: current length of contracts: 30 years – Cumul. revenue: €300m ST Micro - Rekotak: current length of contracts: 29 years – Cumul. revenue: €160m TMT Bulgaria HUNGARY Varna  Pannon Power - biomass (energy) – Cumul. revenue: €600m  Sinesco (energy) – 2007 estimated revenue: €29m Maresme Italy Spain BULGARIA  Toplofikacja Varna EAD (energy) – Annual revenue: €8m ITALY  TMT (waste) – 2006 revenue: €97m Campos de Dalias  STMicro – Agrate (energy) – Length: 6 years – Cumul. revenue: €20m  Contract start-up SPAIN  Contract won or renewed  Maresme (DBO) (waste) – Operating period: 15 years – Cumul. revenue for consortium: €440m  Company acquisition  Campos de Dalias (DBO) (water) – Operating period: 15 years – Cumul. revenue: €78m (incl. construction) (1) At constant exchange rate 11
  • 12. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 North America: revenue up 7.3% (1) to €1,385m NORTH AMERICA  Tampa Bay (DBO)(water) - Operating period: 13 years – Cumul. revenue: €119m (incl. construction)  Pinellas county (waste) - Length: 17 years – Cumul. revenue: €467m (incl. Canada construction)  US Army (waste) – Cumul. revenue: €37m  Thermal North America, Inc. (energy) Enpar Ecolocycle – 2007 estimated revenue: €319m United States TNAI  Marisol (waste) – 2006 revenue: €18m Marisol Beacon  Ecolocycle Inc. (waste) US Army  Partnership with Beacon Landfill Gas Hdgs LLC (waste)  Partnership with Enpar Technologies (water) Tampa Bay Pinellas  Contract start-up  Contract won or renewed  Company acquisition  Partnership with other companies (1) At constant exchange rate 12
  • 13. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Asia – Pacific: revenue up 33% (1) to €1,002m CHINA  Lanzhou (water) Jiamusi - Length: 30 years – Cumul. revenue: €1.6bn  Haikou (water) Harbin Seoul - Length: 30 years – Cumul. revenue: €780m Soonchunhyang  Jiamusi (energy) - Length: 25 years – Cumul. revenue: €650m  Harbin (energy) – 2007 estimated revenue: €19m South Korea  Cleanaway Asia (waste) – Current length of contract: 22 years – Cumul. revenue: €200m China TAIWAN Lanzhou  Bali – Taipei County (waste) Cleanaway Asia - Length: 15 years – Cumul. revenue in JV: €154m Japan SOUTH KOREA Bali Chiba  Seoul (transportation) – Length: 10 years – Cumul. revenue: €507m  Soonchunhyang teaching hospital (energy) Singapore Haikou Taiwan – Length: 5 years – Cumul. revenue: €11m Kranji Cleanaway Asia SINGAPORE  Kranji (construction) (water) – Cumul. revenue: €8m  Cleanaway Asia (waste) – Current length of contracts: 22 years – Cumul. revenue: €715m AUSTRALIA Australia  Sydney (DBO) (water) Brookers – Operating period: 20 years – Cumul. revenue: €570m (incl. construction) Gold Coast  Gold Coast (DBO) (water) Sydney – Operating period: 10 years – Cumul. revenue: €210m Transit First  Melbourne (transportation) – Length: 1 year – Cumul. revenue: €422m  Transit First & Brookers (transportation) – 2007 estimated revenue: €11m  Contract start-up Melbourne  Contract won or renewed JAPAN  Company acquisition  Chiba (water) – Length: 3 years – Cumul. revenue: €18m (1) At constant exchange rate 13
  • 14. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Middle East: a new source of growth in the medium term SULTANATE OF OMAN  Sûr (BOO) (water) – Length: 22 years – Cumul. revenue: €434m (incl. construction) Kingdom of Bahrain SAUDI ARABIA Arcapita  Marafiq – Jubail & Yanbu (construction) (water) – Cumul. revenue: €702m KINGDOM OF BAHRAIN  Partnership with Arcapita (energy) MAURITANIA Marafiq  Nouakchott (water) – Cumul. revenue: €200m Sûr Saudi Arabia Sultanate of Oman Mauritania Nouakchott  Contract start-up  Contract won or renewed  Company acquisition  Partnership with other companies 14
  • 15. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Operating income up 13% (1) € million Margin Operating income Operating income H1 2006 H1 2007 ∆ current H1 2006 H1 2007 adjusted exch. adjusted  Water 527 576 +9.4% 11.0% 11.0%  Waste 307 389 +26.6% 8.7% 9.3%  Energy services 267 260 -2.6% 8.2% 7.8%  Transportation 74 73 -0.9% 3.2% 2.7%  Holding (46) (26) - - -  Total Group 1,129 1,272 +12.7% 8.1% 8.2% (1) At constant exchange rates 15
  • 16. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Recurring operating income up 9.8% (1) € million Margin Recurring operating income Recurring operating income H1 2006 H1 2007 ∆ current H1 2006 H1 2007 adjusted exch. adjusted  Water 527 574 +9.1% 11.0% 11.0%  Waste 307 389 +26.6% 8.7% 9.3%  Energy services 267 251 -5.9% 8.2% 7.6%  Transportation 74 48 -35.4% 3.2% 1.8%  Holding (46) (26) - - -  Total Group 1,129 1,236 +9.5% 8.1% 8.0% (1) At constant exchange rates 16
  • 17. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Operating income: contribution by division Operating income: €576 million, up 9.4% at current exchange rates Recurring operating income €574 million, up 9.1% at current exchange rates  Satisfactory performance in operating results in France, in distribution (cost- cutting drive) and in Works.  In Europe, further improvement in results in the Czech Republic.  Good results in Asia and performance on recent contracts consistent with the original business plans (higher contribution from Shenzhen and increasing contribution of Kunming, Urumqi, Changzhou, etc.) and in Morocco.  One-off problems encountered in Gabon (power production disrupted by a lack of water (and thus low hydraulic capacity) in the last few months, while waiting for gas power production capacity).  Further improvement in operational profitability at Veolia Water Solutions & Technologies. 17
  • 18. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Operating income: contribution by division Operating income: €389 million, up 26.6% at current exchange rates Recurring operating income €389 million, up 26.6% at current exchange rates  In France: significant growth in operating income due to the combined impact of continual productivity improvements and of the rise in volumes treated (in both household waste and hazardous waste).  In Europe: sharp rise in operating income (full effect of the acquisition of Cleanaway and good performances of the Sheffield and Nottinghamshire integrated contracts) in the United Kingdom and satisfactory contribution of Scandinavian countries.  United States: improvement in profitability of hazardous waste operations and strong activity in industrial services businesses. Continued good level of profitability in solid waste.  Asia-Pacific: gradually increasing contribution of recent business development (Foshan, Likeng and Puxi) and increase in results at technical landfills in Australia. 18
  • 19. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Operating income: contribution by division Operating income: €260 million, down 2.6% at current exchange rates Recurring operating income €251 million, down 5.9% at current exchange rates Negative impact of €39 million on operating income due to variation in climate. Outside France: negative impact due to the weather in Central Europe offset by good business growth and by positive price effects (heating and electricity in the Czech Republic, Poland and Slovakia). Lower contribution from the sales of surplus CO2 emission rights than the year ago period. 19
  • 20. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Operating income: contribution by division Operating income: €73 million, down 0.9% at current exchange rates Recurring operating income €48 million, down 35.4% at current exchange rates (1)  In France: good profitability in inter-urban businesses and in the Greater Paris area and confirmation that the SNCM’s Public Service Delegation (DSP) had been granted. Positive impact on operating income.  Outside France:  profitability hurt by the start-up and renewal of two contracts in the Netherlands. Turnaround underway in the transit business in the United States;  improvement in Scandinavia and in Central Europe confirmed and turnaround in the business related to the Marschbahn rail contract (1) Operating income Germany. in at June 30, 2006 included the positive impact for the EBRD’s investment in the capital of VTCE for €18.7 million 20
  • 21. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Growth in cash flow from operations Cash flow from operations € million 06/30/06 06/30/07 ∆ current exch. adjusted H1 2007/H1 2006  Water 826 867 +5.0%  Waste 562 678 +20.6%  Energy services 393 359 -8.6%  Transportation 150 129 -14.0%  Other (21) (21) -  Total cash flow from operations 1,910 2,012 +5.4% 21
  • 22. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 From revenue (1) to net income € million 06/30/06 ∆06/30/07 06/30/07 adjusted 06/30/06  Revenue 13,941 15,462 +10.9%  Operating income 1,129 1,272 +12.7%  Cost of net financial debt (329) (392)  Other financial income and expenses (20) (11)  Income tax (254) (235)  Equity in net income of affiliates +4 +10  Net income attributable to minority interests (135) (143)  Net income from continuing activities after minority interests 395 501 +26.8%  Net income from discontinued operations 50 (8)  Net income 445 493 +10.9%  Recurring net income 381 482 +26.6% (1) See definition page 6 22
  • 23. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Borrowing costs € million 06/30/06 06/30/07 ∆06/30/07 Adjusted 06/30/06 Cost of net financial debt (329) (392) (63) of which variation of net debt - - (40) of which impact of rates - - (23) Cost of borrowing: 5.27% vs. 5.07% at December 31, 2006 23
  • 24. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 From recurring net income to net income € million 06/30/06 06/30/07 adjusted Recurring net income 381 482  Income from discontinued activities  Southern Water disposal 54 -  Disposal of Transportation division in Denmark (4) (8)  Taxes 14 -  Miscellaneous - 19 Net income 445 493 24
  • 25. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Targeted capital expenditures € million Mainte- Growth Comments Financial Total nance operating New major Financial Industrial New major assets projects including scope projects changes Water 230 3 160 54 Haikou (China) and BOT 94 541 Oman Waste 281 12 41 110 Various projects in North 8 452 America (Marine Services Equipment, Ecolocycle Inc., haz. waste) and Cleanaway Asia Energy 132 49 43 141 Pannon and Sinesco 11 376 services (Hungary), Kolin (Czech Republic) Transport 97 25 55 139 (SNCM, various 19 335 acquisitions, etc.) Other 2 4 5 - - 11 06/30/2007 742 93 304 444 132 1,715 06/30/2006 550 64 244 338 169 1,365 Adjusted 25
  • 26. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Strong attention to management of capital  Control of working capital requirement  Increase in maintenance capital expenditures linked to the growth in revenue (maintenance capex / revenue = 4.8%)  Continued active asset management (€181m in disposals) Over €400 m in free cash flow before new major projects 26
  • 27. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Cash flow statement € million H1 2006 H1 2007 Adjusted Cash flow from operations 1,913 2,009 Repayment of operating financial assets +243 +176 Investments (1,027) (1,271) Change in WCR (296) (246) Asset disposals +226 +181 Rights issue reserved for minority shareholders +60 +15 Tax paid (161) (140) Interest paid (313) (320) Other +10 +9 = Free cash flow before major new projects = 655 = 413 27
  • 28. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07Change in net financial debt at June 30, 2007 € million H1 2006 Adjusted H1 2007 Net financial debt at January 1st 13,871 14,675  Free cash flow (655) (413)  Investments in new major projects +338 +444  Dividends paid +414 +501  Impact of exchange rates and other (150) (7) Net financial debt at June 30th 13,818 15,200 Change in debt (53) +525 28
  • 29. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Debt ratios (1) 15.2 4 15 € billion 14.7 14,5 14 13.8 3.5 x 3.4 x 13,5 13 3.3x 12,5 12 3 June 30, 06 Dec. 31, 06 June 30, 07 Debt ratio target: between 3.5x and 4x  Net financial debt _ Net financial debt / (cash flow from operations + repayment of (1) 12-month moving average ratios operating financial assets) 29
  • 30. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Structure of the debt (1) By type of rate (Net By currency debt after (Gross debt hedging) after hedging) Floating rate 26% Others 14% GBP 9% US$ 8% Euro 69% Fixed rate 74% (1) After taking into account the €2.6 billion capital increase completed on July 10, 2007. 30
  • 31. Veolia Environnement Investor Relations – First Half 2007 Results - 30/08/2007 STRATEGY & OUTLOOK
  • 32. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Significant growth potential in fast-growing markets: in Europe In the Water sector  In France: new services related to heightened regulations and consumer concerns (pollutants, rain and bathing water, independent wastewater system, etc.);  In Europe  In the North (United-Kingdom), increase of non regulated services  In Central and Eastern Europe: commitments by new EU member countries to meet existing levels of quality (increasing use of contracting out in the Czech Republic, Hungary, etc.), upgrading of water management systems in large cities for future member countries.  In the South, acceleration of desalination activities in Spain. In the Waste sector  In France: new European recycling directive, development of renewable energies and curbing of greenhouse gases;  In the United Kingdom: consolidation of the sector (Cory and Waste Recycling Group were sold in 2006), growth in the UK market higher than 6% per year;  In Germany: market has stabilized and is open to competition, development platform for Central Europe;  In Italy: development of treatment infrastructure, optimization of green energy production. In the Energy sector  Development of renewable energies (biomass, solar and geothermal),  Privatization of urban heating networks in Central and Eastern Europe.  Services provided for our large industrial clients as they develop overseas. In the Transportation sector  Opening of the urban and interurban passenger transportation market in Europe;  Development of services for industrial clients and local communities:  in rail with the opening of the European rail freight market (CMA CGM partnership), boom in the market of Public-Private Partnerships;  in maritime, passengers transportation (SNCM). 32
  • 33. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Significant growth potential in fast-growing markets: in North America, Asia-Pacific and the Middle East In the Water sector  In North America: potential development in the medium-term in contracting out public services (including Tampa Bay in Florida in 2007);  In Asia-Pacific: in China due to the growth in the country’s cities, in South Korea due to robust industrial demand for the management of the process water and effluents cycle, in Australia due to desalination and wastewater recycling projects because of the drought and in Japan owing to the opening of the market to private operators;  In the Middle East: development in the construction of plants and in water management services related to population growth and water stress for municipalities and industrial clients. In the Waste sector  In Asia-Pacific: in China demand for infrastructure owing to the country’s economic growth;  In the Middle East: for infrastructure related to growing urbanization; In the Energy sector  In North America: energy and environmental optimization of urban heating and cooling networks in the United States and in Canada, participation in the implementation of the policy aimed at curbing greenhouse gas emissions;  In Asia-Pacific: in China, opportunities stemming from the government’s proactive stance aimed at lowering pollution and halving SO2 emissions before 2010. In the Transportation sector  In North America: transportation on demand, development of clean vehicles powered by gas or other alternative energies (biofuels or electric power);  In Australia: development in new value-added services. 33
  • 34. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Successful integration of Cleanaway UK Veolia Environmental Services clearly reinforces its leadership position in the UK waste management market:  Market share doubled (15%) in waste management in the UK with 2007 expected revenue in excess of €1.6 billion  Internal growth in H1 2007 topped 11%  Higher annual growth forecast than for the market  Improvement of the platform for the national management of household and industrial waste  The dry waste reclamation business has doubled  Increase in recycling capacity  Significant increase in high-temperature incineration treatment capacity  Substantial cost synergies achieved ahead of the budget at mid-year  Synergies achieved since the start of the year  Expected annual savings: €38 million before tax (in full year 2009) made in purchasing, logistic improvements and streamlining depots and overheads  Stronger position to win key PFI contracts in integrated waste management  Southwark County has awarded preferred bidder status to Veolia Environmental Services for the Southwark PFI contract (25-year contract to begin in October 2007) 34
  • 35. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 More than €3.2 billion in significant external growth opportunities since June 2006 in our priority development zones Geographic Division Amount in Market share after location enterprise value acquisition (€ million)  United Kingdom Waste 859 15% (versus 7%) Water 136 -  Germany Waste 1,310 (1) 11% (versus 0%)  North America Energy 584 (2) 10% (versus 0%) (3)  Italy Waste 338 28% (versus 6%) (4) Total €3,227 million(1) Amount estimated after disposal of stake in Sulo Technology (bins manufacturer) to Plastic Omnium(2) On the basis of the current price: €1 = $1.35(3) Of the heating and cooling network markets(4) Of the incineration market 35
  • 36. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 4 significant and value-creating acquisitions announced since the beginning of the year  Germany: press release dated April 27, 2007  Sulo, n°2 in waste treatment (€1.3 billion revenue)  Closing on July 2, 2007  Enterprise value: €1,310 million (estimated amount after Sulo Technology’s disposal (bin manufacturers) to Plastic Omnium)  Disposal on July 29, 2007 of Sulo Environmental Technology to Plastic Omnium (revenue close to €200 million)  Italy: press release dated May 31, 2007  TMT, the largest private operator in the thermal waste treatment market in Italy (estimated 2011 revenue: €200 million)  Closing scheduled for the fourth quarter of 2007  Enterprise value: €338 million  Acquisition will be earnings-enhancing in 2008  North America: press release dated June 12, 2007  TNAI, the largest portfolio of district heating and cooling networks in the U.S.  Closing scheduled for late 2007  Acquisition cost: $788 million  Acquisition will be earnings-enhancing as early as 2008  United Kingdom: press release dated August 9, 2007  Several non-regulated activities from Thames Water  Closing scheduled for end of 2007  Enterprise value: €136 million  2008 (e) revenue: €160 million 36
  • 37. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Objectives For 2007  Growth in total revenue to exceed 12%  Similar increase in operating income  Investments net of disposals expected to range between €6 billion and €6.5 billion Medium-term 2007-2009 objectives: robust growth  Average annual revenue growth in excess of 10%  Overall investment budget of €15-20 billion  Investment criteria to be maintained: IRR ≥ Wacc +3%  After-tax ROCE: 10% (excluding the potential effect related to the schedule of acquisitions)  Maintain commitment to a sound balance sheet: net financial debt/(cash flow from operations + repayment of operating financial assets) ranging between 3.5x and 4x  Beyond 2007, the Company will maintain its dividend payout policy: the payout ratio is to range between 50% & 60% of recurring net income 37
  • 38. Veolia Environnement Investor Relations – First Half 2007 Results - 30/08/2007 APPENDICES
  • 39. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Estimated proforma 2007 revenue (1) by geographic region: strategic reinforcement in fast-growing markets 2004 revenue (2) of Estimated proforma 2007 Veolia Environnement Proforma 2007 CAGR (1) revenue (1) of VE Group after Group 2004 acquisition of Sulo, TNAI & TMT Pacific 3%  France Pacific 3% Rest of the world 4% Rest of the world 4% Asia 2% +8% Asia 3%North America 9%  United Kingdom North America 10% +21% Rest of Europe  Germany 18% Rest of +37% Europe 18%  Rest of Europe Germany 6% France 51% France 43% +13% Germany 10% United Kingdom 7% United Kingdom 9%  North America +19%  (1) Assuming a full-yearAsia contribution from Sulo, Thermal North America, Inc. & TMT in proforma 2007 revenue +28%  Pacific(2) Under IFRS with application of IFRIC 12 on concessions 39 +18%
  • 40. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Estimated proforma 2007 revenue (1) in full year by division 2004 revenue (2) of Estimated proforma 2007 Veolia Environnement Group revenue (1) of VE Group after acquisition of Sulo, TNAI & TMT Transportation Transportation 15% 16% Water 35% Water 32%Energy services Energy services 22% 23% Waste 28% Waste 29% (1) Assuming a full-year contribution from Sulo, Thermal North America, Inc. & TMT in proforma 2007 revenue(2) Under IFRS with application of IFRIC 12 on concessions 40
  • 41. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Recurring operating income up 9.8% (1) € million Recurring operating income H1 2006 H1 2007 ∆ current ∆ constant adjusted exch. exch.  Water 527 574 +9.1% +9.1%  Waste 307 389 +26.6% +28.3%  Energy services 267 251 -5.9% -6.4%  Transportation 74 48 -35.4% -35.8%  Holding (46) (26) - - -  Total Group 1,129 1,236 +9.5% +9.8% (1) At constant exchange rates 41
  • 42. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Leading presence in robust desalination market  Extensive contract experience  Over 100 years of experience in desalination  Built and/or operate approximately 13% of the world’s desalination capacity (1,600 plants with a capacity of 5.3 million m3/d)*  Chosen to design and build the world’s largest MED desalination plant in Saudi Arabia’s Jubail Industrial City and Eastern Province (800,000 m3//d capacity)  Built and operate the largest reverse osmosis plant in the world in Ashkelon, Israel (320,000 m3/d capacity)  Estimated 80% market share in MED Ashkelon Desalination Facility  With technology leadership  Leading process technologies and solutions in both Thermal and Reverse Osmosis  Focus on process and application technology (e.g. ARAMIS – Veolia’s membrane expertise center determining appropriate application through performance testing, diagnostic aging properties, deposits identification and determination of pretreatment solutions)  And operating in a robust market  Expected growth rate for new capacity worldwide is expected to increase from 39.9 million m3 / day at start of 2006 to 97.5 million m3 / day by 2015*  The “Gulf” countries represent approximately 46% of existing capacity today  Saudi Arabia and UAE are the two largest markets today followed by USA, Spain and China  Continued trend towards larger scale plants in both membrane and thermal desalination  Main competitors: Doosan (Korea), Impreglio (Italy), GE, Suez and Abengoa/Befesa (Spain) 42*Global Water Intelligence “Desalination Markets 2007” estimate of global desalination capacity.
  • 43. Veolia Environnement Investor Relations – First Half 2007 Results – 30/08/07 Investor Relations contact information  Nathalie Pinon, Head of Investor Relations and Financial Communication 38 Avenue Kléber – 75116 Paris - France Telephone +33 1 71 75 01 67 Fax +33 1 71 75 10 12 e-mail nathalie.pinon@veolia.com  Brian Sullivan, Vice President, US Investor Relations 700 E. Butterfield Road -Suite 201 Lombard, IL 60148 - USA Telephone +1 (630) 371 2749 Fax +1 (630) 282 0423 e-mail brian.sullivan@veoliaes.com Web site : http://www.veolia-finance.com 43