2011 Annual Sharholders’Meeting

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2011 Annual Sharholders’Meeting

  1. 1. 2011 AnnualSharhold rs’Meeting h de
  2. 2. 2011 Annual Sharhold rs’Meeting h de Pierre-François Pierre François RIOLACCIChief Finance Officer
  3. 3. DISCLAIMERVeolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document contains "forward-lookingstatements" 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-lookingstatements 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 insome countries outside of Western Europe the United States and Canada the risk that changes in energy prices and taxes may Europe, Canada,reduce Veolia Environnements profits, the risk that we may make investments in projects without being able to obtain therequired approvals for the project, the risk that governmental authorities could terminate or modify some of VeoliaEnvironnements contracts, the risk that our long-term contracts may limit our capacity to quickly and effectively react to generaleconomic changes affecting our performance under those contracts, the risk that acquisitions may not provide the benefits thatVeolia Environnement hopes to achieve, the risk that Veolia Environnements compliance with environmental laws may becomemore costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnements financialresults and the price of its shares the risk that Veolia Environnement may incur environmental liability in connection with its past shares, 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 provideupdates or to revise any forward-looking statements. Investors and security holders may obtain a free copy of documents filed byVeolia 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 g g p yExchange Commission under the U.S. Sarbanes-Oxley Act of 2002. These "non-GAAP financial measures" are beingcommunicated and made public in accordance with the exemption provided by Rule 100(c) of Regulation GThis document contains certain information relating to the valuation of certain of Veolia Environnement’s recently announced orcompleted acquisitions. In some cases, the valuation is expressed as a multiple of EBITDA of the acquired business, based onthe financial information provided to Veolia Environnement as part of the acquisition process. Such multiples do not imply anyprediction as to the actual levels of EBITDA that the acquired businesses are likely to achieve Actual EBITDA may be adversely achieve.affected by numerous factors, including those described under “Forward-Looking Statements” above. -
  4. 4. 2010 AnnualResultS
  5. 5. 2010 KEY FIGURES In € M 2009 2010 Variation re-presented(1) Revenue 33,952 33 952 34,787 34 787 +2.5% +2 5% Adjusted operating cash flow 3,514(2) 3,654 +4% Cash flow from operations 3,578 3,742 +4.6% Operating income 1,982 2,120 +7% Adjusted operating income 1,894 2,056 +8.5% Adjusted net income attrib to owners of the company 519 579 +11.6% Net income attributable to owners of the company 584 581 ~ Free Cash Flow 1,344 409 Net financial debt 15,127 15,218 ~ Net financial debt / (Cash flow from operations + repayment of 3.75 X 3.65 X operating financial assets)(1) The financial statements of 2009 have been represented, in order to ensure the comparability of periods.(2) As of January 1, 2010, due to the application of the new amendment to IAS 7, adjusted operating cash flow for the year 2009 has been re-presented for renewal expenses by an amount of €360.9M, of which €245.7m is within the Waterdivision and €115.2m is within the Energy Services division.
  6. 6. BREAKDOWN OF REVENUE BY DIVISION 2009(1): €33,952M 2010: €34,787M €5,861M , €5,765M 17% 17% 36% €12,318M 35% €12,128M 21% 21% €7,041M €7,582M 26% 27% €8,732M €9,312M  current  constant  Excl. FX FX rates FX rates & scope Water -1.5% -4.1% -2.9% Environmental Services +6.7% +3.3% +6.9% Energy Services +7.7% +5.8% +6.2% Transportation -1.6% -1 6% -4.4% -4 4% -4.3% -4 3% VE GROUP +2.5% -0.2% +1.3%(1) The financial statements of 2009 have been represented, in order to ensure the comparability of periods.
  7. 7. CONTINUED IMPROVEMENT THROUGHOUT THE YEAR Revenue in €M, variations at constant scope and exchange rates 1st quarter 2nd quarter 3rd quarter 4th quarter At const. At const. At const. At const. 2009(1) 2010 Scope & FX 2009(1) 2010 Scope & FX 2009(1) 2010 Scope & FX 2009(1) 2010 Scope & FX Water 3,089 2,856 -6.7% 3,032 2,905 -5.6% 2,996 3,029 -0.6% 3,201 3,338 +1.3% Environ. 2,111 2,113 +3.3% 2,237 2,401 +9.2% 2,193 2,392 +8.3% 2,191 2,406 +6.5% Services Energy 2,380 2,299 -2.8% 1,303 1,402 +7.8% 1,112 1,291 +11.3% 2,246 2,590 +12.1% Services Transport T 1,431 1 431 1,356 13 6 -6.4% 6 4% 1,508 1 08 1,492 1 492 -4.1% 4 1% 1,466 1 466 1,439 1 439 -5.3% 3% 1,456 14 6 1,478 14 8 -1.7% 1 % Group 9,011 8,624 -3.3% 8,080 8,200 +0.9% 7,767 8,151 +2.7% 9,094 9,812 +4.7% Variation at -4.3% 4.3% +1.5% 1.5% +4.9% 4.9% +7.9% 7.9% current FX(1) The financial statements of 2009 have been represented, in order to ensure the comparability of periods.
  8. 8. WATER: Return of favorable dynamics confirmed M/F/R In € M Works excl. M/F/R Operations 4 000 3 500 108 102 189 135 114 45 61 14 3 000 880 925 799 792 793 737 790 2 500 725 2 000 1 500 2,101 2,070 2,105 2,098 2,145 2,194 2,219 2,305 1 000 500 0 2009 2010 2009 2010 2009 2010 2009 2010 Q1 Q2 Q3 Q4*Marafiq / Fujairah / Ras Laffan
  9. 9. VEOLIA ENVIRONMENTAL SERVICES: Revenue increased to €9,312M  +6.7% , +3.3% at constant FX and +6.9% at constant scope and FX Quarterly 2010 Environmental Services Revenues Growth 2,450 10.0% 2009 2010 2,401 2,392 2,406 2,400 9.0% VES Organic growth (%) g g ( ) -8 pts p +7 pts p 2,350 2 350 8.0% 8 0% of which 2,300 7.0% Recycled materials (price, volumes) -4 pts +5 pts 2,250 2,237 6.0% 2,200 2,193 2,191 5.0% Industrial waste volumes(1) -4 pts +1 pt 2,150 2 150 2,111 2,113 2 111 2 113 4.0% 4 0% Municipal waste volumes -1 pt -1 pt 2,100 3.0% Price increases +1 pt +1pt 2,050 2.0% Others +1pt 2,000 1.0% 1,950 0.0% Q1 Q2 Q3 Q4 2009 2010(1) Non-hazardous industrial waste, and hazardous waste and asssociated services
  10. 10. VEOLIA ENERGY SERVICES: Revenue increased to €7,582M Outside France France Revenue increased +7.7% , +5.8% at constant FX and +6.2 % at constant scope and FX 6.2 Quarterly revenue (€M) Very favorable climate effect: ● +€160M€, of which +€99M in France and +€37M in Central Europe 1,123 Energy prices 1,100 1,063 1,244 ● Increase in France (+€45M) related to the average increase of 4.3% in the fuel mix for the year (particularly in Q4) y ( y ) 790 794 783 ● Decline in Central Europe (-€25M) following 616 the 30% decline in electricity prices in 1,257 1,199 1,183 1,346 the Czech Republic 612 509 496 508 Temporary peak in activity in solar Works 1Q 09 1Q 10 Q2 09 Q2 10 Q3 09 Q3 10 Q4 09 Q4 10
  11. 11. VEOLIA TRANSPORTATION: Revenue declined to €5,765M 2009 Revenue declined -1.6%, 2010 -4.4% at constant FX and Part of revenue associated with the Melbourne,Stockholm and Bordeaux contracts in 2009 -4.3% at constant scope and FX Part of revenue associated with the Melbourne, Stockholm and Bordeaux contracts in 2010 In Q4, end of the significant negative impact 1,508 (-€637M) from the loss of 3 contracts 1,431 1,492 1,466 1,439 1,456 1,478 (Bordeaux, Melbourne and Stockholm) in 2009. 1,356 171 4 171 122 180 2 In France, good resilience, with a 2.1% revenue increase driven by contract gains from mid-sized cities Outside France revenue declined 4 1% France, 4.1%, +11.3%* +11.1%* +10.8%* +8.2%* +8 2%* (-8.4% at constant scope and exchange rates) ● Ongoing growth in Germany due to 3 passenger train contracts won in 2009 (impact +€68M); in the Netherlands (Haaglanden contract), and in the United States (New Orleans, Phoenix, ( Q1 09 Q1 10 Q2 09 Q2 10 Q3 09 Q3 10 Q4 09 Q4 10 Savannah) * Revenue growth excluding Melbourne, Stockholm and Bordeaux
  12. 12. EFFICIENCY PLAN: 2010 initial objectives exceeded, €265M versus €250M Cost savings realized in 2009 and 2010 Breakdown by area of optimization In €M 2009 2010 Assets Water 87 93 12% Purchasing Env. Services 72(1) 61 Support functions 19% 37% Energy 56 68 Transport 40 43 32% Efficiency Plan €255M €265M VES Operations Adaptation Plan €126M(1) Excluding the Veolia Environmental services Adaptation Plan
  13. 13. ADJUSTED OPERATING CASH FLOW In €M 2009 2010  Current  Constant re-presented(1) FX FX Water 1,545 1,479 -4.3% -6.4% Environmental services 1,175 1,297 +10.4% +6.4% Energy services 609 690 +13.4% +10.6% Transportation 327 329 +0.7% -3.0% Others -142 -141 Total Group 3,514 3,654 +4.0% +0.9% Adjusted operating cash flow margin j p g g 10.3% 10.5% - - Adjusted operating cash flow 3,514 3,654 Cash flow from discontinued ops. 65 106 Financial cash flow -1 -18 Cash flow from operations 3,578 3,742(1) The financial statements of 2009 have been represented, in order to ensure the comparability of periods.
  14. 14. ADJUSTED OPERATING INCOME INCREASED 8.5% AND ADJUSTED OPERATING INCOME MARGIN IMPROVED In €M 2009  Current  Constant Re presented (1) Re-presented 2010 FX FX Water 1,145 1,020 -11.0% -12.6% Environmental Services 355 609 +71.4% +63.6% Energy Services 401 460 +14.6% +12.0% Transportation 158 146 -7.9% -11.6% Holding H ldi -165 -179 Adjusted operating income 1,894 2,056 +8.5% +5.3% Adjusted Adj t d operating income margin ti i i 5.6% 5 6% 5.9% 5 9% - -(1) The financial statements of 2009 have been represented, in order to ensure the comparability of periods.
  15. 15. NET FINANCE COSTS Variation In M€ 2009 2010 in % Cost of net financial debt -768 4.76% -793 5.09% +0.33% Impact of the change in average cash I t f th h i h +0.32% 0 32% Impact of the change in interest rates -0.04% Others +0.05% Evolution of cost of borrowing since 2004  Net Financial Debt(1) of €15,218M vs. €15,127M 5.8% 5.61% 5.6% 5.49%  Average net financial debt(2) of €15,566M 5.4% vs.€16,466M vs €16 466M in 2009 5.2% 5.12% 5.09% 5.04% 5.07% 5.0%  Gross debt: €20,238M vs. €20,287M 4.8% 4.76% ● Cost of borrowing 4.1% vs. 4.03% 4.6% 4.4%  Cash and cash equivalents of €5,407M : 1.11% 4.2% 2004 2005 2006 2007 2008 2009 2010(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 derivatives hedging debt(2) Average net debt is the average of monthly net debts of the period
  16. 16. RECONCILIATION OF ADJUSTED OPERATING INCOME TO NET INCOME In €M 2009 re-presented (1) 2010 Adjusted Adjustment Total Adjusted Adjustment Total Operating income 1,894 88 1,982 2,056 64 2,120 Cost of net financial debt (2) ( ) -873 -873 -907 -907 Income tax expense -239 -239 -319 -17 -336 Share of net income of associates -1 -1 18 18 Net income from discontinued operations - -27 27 -27 27 - -24 24 -24 24 Non controlling interests -262 4 -258 -269 -21 -290 Net income attrib. to the owners of the company 519 65 584 579 2 581(1) The financial statements of 2009 have been represented, in order to ensure the comparability of periods.(2) Including «other financial income and expenses », of which €76M in unwinding discounts on provisions in 2010
  17. 17. STATEMENT OF CASH FLOWS: Positive free cash flow of €409M In M€ 2009 2010 Adjusted operating cash flow (1) 3,578 3,742 Repayments of operating financial assets 455 424 Total cash generation 4,033 4,166 Gross investments -2,970 -3,256 Variation working capital 432 83 Taxes paid -408 -368 Interest expense -802 -808 Dividend (2) -434 -735 Others (3) 202 86 Divestments 1,291 1,241 Free cash flow 1,344 409 Impact of exchange rates and other 57 -500 Net financial debt at December 31 15,127 15,218 Change in net financial debt -1,401 91(1) Of which financial cash flows (€ -1M in 2009 and €-18M in 2010) and adjusted operating cash flow from discontinued operations (€65M in 2009 and €106M in 2010)(2) Dividend paid to shareholders and non controlling shareholders(3) Notably changes in receivables and other financial assets for €41M in 2010 and €163M in 2009
  18. 18. CONTROLLED GROWTH IN INVESTMENTS In M€ 2009 2010 Maintenance capital expenditures 1,271 1,075 As a % of consolidated revenue 3.7% 3.1% Industrial investments in growth g 861 1,033 1 033 (excluding operating financial assets) Financial investments (1) in growth 338 653 New operating financial assets p g 500 495 Gross investments 2,970 3,256 +9.6%(1) Including partial acquisitions between non controlling shareholders (with no change of consolidation scope) and net financial debt from acquired entities
  19. 19. DIVESTMENTS: €2.5bn completed in 2 years (1) 2010: €1,241M 2009-2010: €2,532M €205M €464M €397M €627M €282M €664M €357M €777M Mature assets Partnerships Non strategic assets Industrial divestments(1) Industrial and financial divestments (including net financial debt of divested companies and partial divestments between non-controlling shareholders (with no change in consolidation scope), and capital increases subscribed by minority shareholders)
  20. 20. IMPACT OF ASSET DIVESTMENTS ON RESULTS In M€ 2008 2009 2010 Recurring capital gains Water 66.0 25.1 65.5 Environmental Services 16.0 24.7 41.8 Energy Services 11.8 43.5 10.7 Transportation p 18.6 21.2 20.2 Holdings 0.1 0 0 Total in adjusted operating income (1) 112.5 114.5 138.2 Total non recurring capital gains (2) 99.0 89.0 Total capital gains in operating income 112.5 213.5 227.2 Capital gains in discontinued operations (3) 176.5 92.4 57.4 Total income related to divestments (1) + (2) + (3) 289.0 305.9 284.6(2) in 2009: capital gain on VPNM in Environmental Services, in 2010 capital gain on Usti in Energy Services(3) In 2008: capital gain on Crystal & Clemessy in Energy Services, in 2009 capital gain on WTE in Environmental services and capital loss on freight in Transportation, in 2010 capital gain on Miami-Dade contract in Environmental Services
  21. 21. FREE CASH FLOW 2009 20104,000 +432 -1,224 4,000 3,654 +83 -1,591 3,5143,500 3,5003,000 3,000 -8022,500 FCF before 2,500 dividend -8082,000 -408 +€1,778M 2,000 +266 FCF before -434 dividend1,500 1,344 1,500 -368 368 +€1,144M +€1 144M +1741,000 1,000 -735 500 500 409 0 0 2009 Change in Net Interest Taxes Other Dividends FCF 2010 Change in Net Interest Taxes Other Dividends FCF adjusted WCR capex expense after adjusted WCR capex expense after operating DIV operating DIV cash flow cash flow (re-presented)
  22. 22. CREDIT RATIO IMPROVEMENTIn €bn Net financial debt Ratio net financial debt (post IAS 7)  Average maturity of net financial debt: 9.4 years vs. 10 years at the end of 2009  Ratings ● Moodys: P-2/A3 stable outlook since April 2011 ● Standard & Poor’s: A 2 / BBB+ stable outlook Poor s: A-2 BBB (April 21, 2010)
  23. 23. EVOLUTION OF ROCE 2010 ROCE – Evolution from 2009 to 201010.00%10 00%9.50%9.00%8.50% +0.3% -0.3% +0.6% - +7.9%8.00% +7.6% -0.2%7.50%7.00% ROCE ROCE 2009 Score Improve recent Slow return Taxe rate 2010 Performance re- and FX acquisitions assets evolution6.50% presented6.00%
  24. 24. 2011 AnnualSharhold rs’ Meeting h deKEY FIGURES AT MARCH 31 2011 31,
  25. 25. KEY FIGURES FOR 1st QUARTER 2011 In M€ Q1 2010  Current  Constant Q1 2010 re re- Q1 2011 exchange exchange published bli h d presented(1) rates rates Revenue 8,794.2 7,329.7 8,159.4 +11.3% +9.6% (2) Adjusted operating cash flow 1,035.0 961.4 996.8 +3.7% +2.0% Adjusted operating cash flow margin 11.8% 13.1% 12.2% Adjusted operating income 659.3 643.2 636.1 -1.1% -2.6% Adjusted operating income margin 7.5% 8.8% 7.8% Operating i O i income 659.3 6 93 643.2 643 2 636.1 636 1 -1.1% 1 1% Free Cash Flow 45 45 539 Net financial debt 15,218 (3) 15,218 (3) 14.511(1) The financial statements of 2010 have been represented, in order to ensure the comparability of periods (2) At constant scope and exchange rates: +3.4% (3) Net financial debt at December 31, 2010

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