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First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
First Half 2009 Results
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First Half 2009 Results

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2009-08-06

2009-08-06

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  • 1. FIRST HALF 2009 RESULTS
  • 2. Investor Relations – First Half 2009 Results – 06.08.09Disclaimer 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 acquisitions may not provide the benefits that Veolia Environnement hopes to achieve, 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. 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
  • 3. Investor Relations – First Half 2009 Results – 06.08.09Table of Contents Key events First half 2009 results 2009 objectives Continued development of the Group 3
  • 4. Investor Relations – First Half 2009 Results – 06.08.09 Key events  Operating cash flow, ex Waste: up 3.7% at constant FX ratesGroup operating cash flow: compared to H1 2008 €1,978m  Waste’s operating cash flow: down 22.4% at constant FX rates compared to H1 2008  2010 Efficiency Plan and Waste’s plan to adapt to the business environment: (€146m) at June 30, 2009 versus an objective of €280m in full-year 2009 We maintain our  Net investments: €1,133m, 39% lower at June 30, 2009 commitments in 2009  Asset disposal plan: €268m booked at June 30, 2009 plus €545m committed  Operating cash flow – net investments = €843m vs. €294m at June 30, 2008  Contract awards and renewals We continue to develop  Strategic transaction: merger of Veolia Transport and the Group Transdev 4
  • 5. Investor Relations – First Half 2009 Results – 06.08.09 First half 2009 key figures€m H1 2008  current  constant H1 2009 Restated (1) FX rates FX ratesRevenue 17,565.7 17,426.9 -0.8% +0.2%Operating cash flow 2,127.8 1,977.5 -7.1% -4.9%Recurring operating income 1,287.2 1,000.8 -22.2% -19.1%Operating income 1,292.2 1,000.8 -22.5% -19.4%Net recurring income attributable to equity 497.9 276.5 -44.5% -holders of the parentNet income attributable to equity holders of 500.5 220.3 -56.0% -the parentNet financial debt 16,332 16,827 (1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 5
  • 6. Investor Relations – First Half 2009 Results – 06.08.09Improvement in the first half 2009 as compared withthe second half 2008 H2 2008 H1 2009 Var. Restated(3)Operating cash flow €1,976m €1,978m Ns margin 10.8% 11.3% +50bpNet recurring income attributable to equity €175m €276m +58.0%holders of the parentOperating cash flow(1) – Net Investments (2) €303m €843m (1) Including operating cash flow from discontinued operations (2) Net Investments = Gross Investments – (disposals + repayment of operating financial assets + capital increase subscribed by minorities) (3) To ensure the comparability of the periods, the second half 2008 accounts have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 6
  • 7. Investor Relations – First Half 2009 Results – 06.08.09First half 2009 results and 2009 objectives First half 2009 results 2010 Efficiency Plan Asset disposal program 2009 objectives 7
  • 8. Investor Relations – First Half 2009 Results – 06.08.09 Revenue€m 17,566 (178) 219 (180) 17,427 H1 2008 Internal External FX impact H1 2009 restated (1) growth growth -1.0% +1.2% -1.0% -0.8%(1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 8
  • 9. Investor Relations – First Half 2009 Results – 06.08.09 Breakdown of revenue by geographic zone€m  current  constant Exc. Scope 17,566 17,427 FX rates FX rates and FX ■ France -4.4% -4.4% -5.3% ■ Europe ex France -3.8% +1.8% +0.7% 7,290 6,966 ■ North America +12.3% -1.8% -3.2% ■ Asia/Pacific +1.8% +2.5% +0.1% ■ Rest of the world +21.1% +21.8% +19.0% VE Group -0.8% +0.2% -1.0% 6,455 6,211 1,435 1,611 1,300 1,324 1,086 1,315 H1 2008 H1 2009 restated (1)(1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 9
  • 10. Investor Relations – First Half 2009 Results – 06.08.09 Breakdown of revenue by division€m  current  constant Exc. Scope 17,566 17,427 FX rates FX rates and FX ■ Water +4.1% +3.7% +3.0% ■ Waste -10.2% -8.9% -10.3% 5,988 6,235 ■ Energy services +1.1% +3.7% +2.3% ■ Transportation +3.0% +4.4% +2.4% VE Group -0.8% +0.2% -1.0% 5,015 4,502 3,676 3,717 2,887 2,973 H1 2008 H1 2009 restated (1)(1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 10
  • 11. Investor Relations – First Half 2009 Results – 06.08.09Revenue: Veolia Water France: internal growth declined 0.2% despite indexing, because of a small contraction in volumes (-1%) and the First half revenue (€m) marked slowdown in engineering works businesses 5,988 +4.1% 6,235 Outside France, strong internal growth of 4.8% at constant scope and exchange rates 3,895 +3.0% 4,013 Operations — North America (+9.5% at constant scope and exchange rates) due to the start-up of the new Milwaukee contract and the engineering works Works and businesses 2,093 +6.2% 2,222 Engineering & Construction — Asia (+13.8% constant scope and exchange rates) due in particular to industrial operations in Korea H1 08 H1 09 Veolia Water Solutions and Technologies: internal growth of 12.7% in H1 despite a flattening out in the second quarter of 2009 11
  • 12. Investor Relations – First Half 2009 Results – 06.08.09Revenue: Veolia Environmental Services(Waste management division) Significant decline in second First half revenue (€m) quarter 2009 compared to second 5,015 -10.2% quarter 2008 (-12.1%) due to: 4,502 — Second quarter 2008 historical high raw material prices — A marked decrease of industrial services activities compared to 2008 H1 08 H1 09 First half 2009 Quarterly revenue (€m) — Decrease of recycled raw material 2,188 +5.7% 2,314 price: - 40% to -50% — Decrease of volumes in industrial waste: – 10% Q1 09 Q2 09 12
  • 13. Investor Relations – First Half 2009 Results – 06.08.09Veolia Environmental Services (Waste managementdivision): 10.2% decline in revenue in H1 2009 / H1 2008Main impacts of change in revenue Lower industrial and municipal volumes - 5.0% Pricing and volumes of recycled materials - 5.5% Price increase for services + 1.0% Other - 0.7% Total variation H1 2009 / H1 2008 -10.2% 13
  • 14. Investor Relations – First Half 2009 Results – 06.08.09Revenue: Veolia Energy Negative €97m FX impact mainly due to Eastern European currencies First half revenue (€m) Further rise in energy prices 3,676 + 1.1% 3,717 (impact: + €57m), mainly during the first quarter 1,866 + 4.6% 1,951 Outside France 1,810 -2.4% 1,766 France More favorable weather conditions in the first half of 2009, mainly in France (impact: + €48m) H1 08 H1 09 14
  • 15. Investor Relations – First Half 2009 Results – 06.08.09Revenue: Veolia Transport 4% revenue growth in France First half revenue (€m) — Bordeaux contract ending on 5/1/2009 2,887 +3.0% 2,973 — New contracts won: Royan, Epernay, Montceau-les-Mines Strong growth in North America (+4.1% at constant scope and FX rates) supported by the H1 08 H1 09 — Taxi business Quarterly revenue (€m) — Transit business 1,447 +5.5% 1,526 Q1 09 Q2 09 15
  • 16. Investor Relations – First Half 2009 Results – 06.08.09 Operating cash flow (1) €m H1 2008  current  constant H1 2009 Restated (2) FX rates FX rates Water 904 910 +0.7% +2.7% Waste 703 540 -23.2% -22.4% Energy services 424 414 -2.2% +2.4% Transportation 142 160 +12.4% +14.5% Other (45) (46) - Total Group 2,128 1,978 -7.1% -4.9%(1) Operating cash flow = cash flow from continued operations before tax and financial items(2) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 16
  • 17. Investor Relations – First Half 2009 Results – 06.08.09 Operating cash flow margin Operating cash flow margins FY 2008 H1 2008 H1 2009 €m margin margin margin restated (1) restated (1) Water 14.5% 15.1% 14.6% Waste 13.4% 14.0% 12.0% Energy services 10.1% 11.5% 11.1% Transportation 4.9% 4.9% 5.4% Others - - - Total Group 11.4% 12.1% 11.3%(1) To ensure the comparability of the periods, the accounts at June 30, 2008 and December 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 17
  • 18. Investor Relations – First Half 2009 Results – 06.08.09Confirmation of 2010 Efficiency Plan Savings in 2009 €m H1 2009 Objectives Purchases 31 45Objectives — €180m in recurring savings in 2009 Operations 34 65 — €220m in recurring savings in 2010 Support Total: €400m in recurring savings 21 50 functions Assets 15 20 Water 37 60Achievements — Gains on operating cash flow: €101m in the Waste 25* 49* first half of 2009 Energy 21 41 Transport 15 30 Other 3 -* excluding Veolia Waste’s plan to adapt tothe business environment €101m €180m 18
  • 19. Investor Relations – First Half 2009 Results – 06.08.09Veolia Environmental Services (Waste managementdivision): Impact of cost-cutting plans 2010 Efficiency Plan 2009 Plan to Adapt to the Business EnvironmentAchievement in the first half of 2009 Achievement in the first half of 2009 — Impact on operating cash flow: €25m — Decline in net costs: €45m2009 objective maintained 2009 objective maintained — Impact on operating cash flow: €49m — Net costs to be lowered by €100m 19
  • 20. Investor Relations – First Half 2009 Results – 06.08.09 Recurring operating income by division €m H1 2008  current  constant H1 2009 restated (1) FX rates FX rates Water 597 597 -0.1% +3.4% Waste 397 134 -66.2% -65.3% Energy services 284 248 -12.5% -7.2% Transportation 62 78 +25.0% +26.5% Other (53) (56) - - Recurring operating income 1,287 1,001 -22.2% -19.1% Non-recurring items 5 - Operating income 1,292 1,001 -22.5% -19.4%(1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 20
  • 21. Investor Relations – First Half 2009 Results – 06.08.09 From operating income to net income H1 2008 restated (1) H1 2009€m Recurring Non- Total Recurring Non- Total recurring recurringOperating income 1,287 5 1,292 1,001 - 1,001Cost of net financial debt (423) - (423) (379) - (379)Other financial income & expenses (6) - (6) (29) - (29)Corporate tax expense (222) - (222) (197) - (197)Equity in net income of affiliates 9 - 9 6 - 6Net income from discontinued - 1 1 - (56) (56)operationsNet income attributable to minority (147) (3) (150) (126) - (126)interestsNet income - attributable to equity holders of the parent 498 3 501 276 (56) 220 (1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 21
  • 22. Investor Relations – First Half 2009 Results – 06.08.09 Cost of borrowing H1 2008 H1 2009 / €m H1 2009 Restated (1) H1 2008 Cost of net financial debt 423 379 - 44 of which impact of changes in interest rates - 68 of which impact of change in average debt 26 Cost of borrowing (2) at 4.47% as compared with 5.41% at June 30, 2008(1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States(2) Adjusted for the impact of the expected unwinding of transactions on derivatives, the cost of borrowing stood at 4.47% at June 30, 2009 versus 5.68% at June 30, 2008 22
  • 23. Investor Relations – First Half 2009 Results – 06.08.09Net debt 12/31/2008 06/30/2009Net financial debt €16,528m €16,827mDebt — Bond debt 68% 79% — Average maturity of net debt 9.3 years 9.5 yearsLiquidity — Gross liquidity €7.7bn €9.6bn — Net liquidity €4.0bn €6.0bnObjective — Net debt / Operating cash flow plus repayment of between 3.5 and 4 x Operating financial assets 23
  • 24. Investor Relations – First Half 2009 Results – 06.08.09 Net investments: down by nearly 40%€m H1 2008 H1 2009 Maintenance capital expenditures 912 858 As % of consolidated revenue 5.2% 4.9% Investments in growth/existing operations 475 360 (ex operating financial assets) New operating financial assets 116 127 New projects 819 319Gross investments 2,322 1,664 - 28% Industrial and financial divestments * (271) (268) Repayment of operating financial assets (194) (263)Net investments 1,857 1,133 - 39% * Including the capital increase subscribed to by minority interests: €57m at June 30, 2009 and €5m at June 30, 2008 24
  • 25. Investor Relations – First Half 2009 Results – 06.08.09Asset disposal plan in line with forecastsDisposals booked at June 30, 2009 €268mDisposals underway (in enterprise value) €545m — VPNM * €120m Valuation multiple: — Montenay International * €330m *** 11 x 2008 EBITDA — Veolia Cargo ** €95mTotal divestments: booked and underway €813mReminder of 2009 objective €1,000m * Signed agreement, closing in process ** Firm offer received *** $450m 25
  • 26. Investor Relations – First Half 2009 Results – 06.08.09Achievements are in line with commitments taken 2009 commitments Situation at June 30, 2009Cost-cutting — 2010 Efficiency Plan €180m €101m i.e. 56% — Plan to adapt to business €100m €45m * i.e. 45% environment (Veolia Waste)Net investments kept in check 45% decline 39% decline (i.e. - €1,600m) (i.e. - €724m) Ex divestments announced but not yet finalizedAsset disposal program €268m booked — Achievement €1,000m i.e. 81.3% €545m committed Maximization — Price obtained 11 x 2008 EBITDA of value* After implementation costs of around €10m 26
  • 27. Investor Relations – First Half 2009 Results – 06.08.09Operating cash flow – net investments(1) June 30, June 30, 2008 2009 Operating cash flow – €294m €843m(2) net investments(1) Disposals announced but not yet finalized €545m Operating cash flow – net investments(1) 2009 objective ~€2,000m(3) (1) Net investments = Gross investments – (divestments + repayment of operating financial assets + capital increases subscribed by minorities) (2) Not corrected for a negative net €35m FX effect (3) At constant FX rates in comparison with 2008 27
  • 28. Investor Relations – First Half 2009 Results – 06.08.092009 objectives confirmed Positive free cash flow (1) after payment of the dividend How? Operating cash flow (2) – Net investments (3) = ~€2 billion (4) (1) Free cash flow corresponds to cash generated (sum of total cash flow and of the repayment of operating financial assets) net of the cash part of the following items : (i) change in operating WCR, (ii) transactions on equity (changes in capital, dividends paid and received), (iii) investments net of disposals (including the change in receivables and other financial assets), (iv) net interest expenses paid and (v) tax paid. (2) Operating cash flow including operating cash flow from discontinued operations (3) Net investments = Gross investments – (divestments + repayment of operating financial assets + capital increases subscribed by minorities) (4) At constant FX rates in comparison with 2008 28
  • 29. CONTINUED DEVELOPMENT OF THE GROUP
  • 30. Investor Relations – First Half 2009 Results – 06.08.09Continued commercial success Veolia Water Veolia Environmental Services Contract to build & operate a wastewater  Waste management and recycling contract treatment plant in Chartres (France) awarded by the Merseyside Waste Disposal (Cumulative revenue: €156m over 20 years) Authority (United Kingdom) (Cumulative Contract for the management of Spain’s revenue: €719m over 20 years) biggest wastewater treatment plant in Madrid (Cumulative revenue: €16m over 4 years) Operations and Maintenance of two wastewater treatment plants in Doha (Qatar) (Cumulative revenue: €44m over 7 years) Veolia Energy Veolia Transport Mende (France) heating network  United States: Houston (light rail) Contract to build and operate the energy (Cumulative revenue: $1.5bn over 35 years), generation plant and district heating and New Orleans (multi-modal) cooling system for Barcelona’s Zona Franca  Management of public transit in Greater (Spain) (Cumulative revenue: €600m over 30 Rabat (Morocco) years) 30
  • 31. Investor Relations – First Half 2009 Results – 06.08.09Strategic merger underway Proposed merger 31
  • 32. Investor Relations – First Half 2009 Results – 06.08.09 Proposed merger of Veolia Transport and Transdev Key Guiding Principles Ambitious industrial project — Global growth platform and a complete multi-modal offering 50/50 ownership structure — Pre-merger adjustment of financial structures to achieve a Caisse des Dépôts/Veolia Environnement 50/50 ownership Veolia Environnement as industrial operator and Caisse des Dépôts as long term strategic partner Management coming from both companies IPO of the new entity as soon as practicable to independently finance its strategic ambition 32
  • 33. Investor Relations – First Half 2009 Results – 06.08.09 Proposed merger of Veolia Transport and Transdev Strong Geographical presence in France  Combining a portfolio of large cities in urban transportation  Very limited overlap in interurban transportationVEOLIA TRANSPORT TRANSDEV Dunkerque Calais Dieppe Amiens Bolbec Le Havre Beauvais Compiègne Rouen Saint-Avold Les Andélys Soissons Verdun Pont-Audemer Méru Saint-Lô Bernay Vernon Epernay Granville Bar-Le-Duc Flers Nancy Lunéville Saint-Dizier Neuves- Maisons Saint-Brieuc Fougères Laval Saint-Dié Nogent-Le-Rotrou Chaumont Pontivy Epinal Sablé-sur-Sarthe Remiremont Orléans Sens Vannes Vendôme Luxeuil-Lès-Bains Saumur Nantes Auxerre Amboise St-Brévin Vierzon Chinon Bourges Issoudun Thonon-les-Bains Moulins Roanne Villefranche-sur-Saône Limoges Cognac Saint-Etienne Vienne Royan Chambéry Perigueux Tulle Annonay Brives-la-Gaillarde Libourne Valence Arcachon Aurillac Salon-de-ManosqueGréoux- Grasse Menton Provence Aix-en- Lès-bains Nice Istres / Provence Fos-sur-Mer Gardanne Cannes Béziers Vitrolles Aubagne Fréjus Foix La Ciotat Toulon Urban Interurban Urban InterurbanUTP Population Number of vehicles Conflans St-Germain La Réunion Mayotte Nouvelle Calédonie UTP Population Number of vehicles La Réunion Martinique Les Mureaux Argenteuil Carrières-ss-Poissy 1,200,000 > 200 Poissy LaLe Vesinet Celle-st-Cloud 1,200,000 > 200 150 to 200 Evry Sénart 150 to 200 600,000 Rambouillet Melun 600,000 100 to 150 St-Fargeau Fontainebleau 100 to 150 120,000 Ponthierry Nouméa 120,000 50 to 100 Nemours 50 to 100 < 50 < 50 Joint exploitation Ile-de-France Ile-de-France Veolia-Keolis Source: UTP, Company (2007-2008-2009)33
  • 34. Investor Relations – First Half 2009 Results – 06.08.09Proposed merger of Veolia Transport and Transdev: Enlarged GlobalGrowth Platform Addressing all Key Growth Markets Combined Revenues 2008 Contribution (%) France €2.9bn 35% Europe excl. France €3.7bn 44% North America €0.8bn 10% Asia/Pacific €0.7bn 8% Rest of the world (1) + others (2) €0.3bn 3% TOTAL (3) €8.3bn 100% Note : (1) Colombia, Chile, Israel and Morocco (2) Including discontinued activities (3) Before RATP negotiations 34
  • 35. Investor Relations – First Half 2009 Results – 06.08.09Proposed merger of Veolia Transport and TransdevComplementary expertise in modal offerings Transdev: — Established leadership across the full value chain in tramway activities Veolia Transport: — Specific know-how of Veolia Transport in metro and heavy railway activities Combined strengths bringing added value to its clients in: — Multi-modal offerings — Strong expertise in the transportation on demand sector — Ability to manage and finance complex transportation networks — Strengthen positioning within the context of markets opening to competition 35
  • 36. Investor Relations – First Half 2009 Results – 06.08.09Key figures: Veolia Transport and Transdev Veolia Transport Transdev Revenue 2008 €6,054m €2,266m EBITDA 2008 €292m €185m EBIT 2008 €130m €45m Employees 82,000 46,000 Vehicles 38,000 20,000 Note: Before RATP negotiations Sources: Company Annual reports 36
  • 37. Investor Relations – First Half 2009 Results – 06.08.09 Proposed merger of Veolia Transport and Transdev Significant Potential Synergies Strong commercial and development synergies due to important scale and portfolio effects — Strengthen base to respond to requests for tender — Enlarged geographic coverage — Expanded modal offering Usual cost synergies for such a merger — Procurement — Fleet optimization — SG&A Support of two leading shareholders, Veolia Environnement and Caisse des Dépôts — Veolia Environnement’s global presence — Caisse des Dépôts’ strong support to local authorities in France 37
  • 38. Investor Relations – First Half 2009 Results – 06.08.09Proposed merger of Veolia Transport and TransdevIllustrative Transaction Timetable  July 2009: Key principles agreed between VE and Caisse des Dépôts  Due diligence  Valuation  Negotiations with RATP  Binding agreement by end of November  Antitrust review & privatization process  Closing as soon as possible  IPO as soon as market conditions permit 38
  • 39. Investor Relations – First Half 2009 Results – 06.08.09Conclusion Results consistent with our objectives Confirmation of our 2009 commitments 39
  • 40. APPENDICES
  • 41. Investor Relations – First Half 2009 Results – 06.08.09 Table of Contents of Appendices Cash flow statement Appendix 1 Recurring operating income margin Appendix 2 Gross Investments by division Appendix 3 Main contracts won or renewed in the first half of 2009 Appendix 4 Debt characteristics at June 30, 2009 Appendix 5 Bond maturity schedule at June 30, 2009 Appendix 6 41
  • 42. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 1: Cash flow statement €m H1 2008 H1 2009 Net financial debt at opening (15,125) (16,528) Operating cash flow from continuing operations 2,128 1,977 Financial cash flow & operating cash flow from discontinued operations 35 7 Cash flow from operations 2,163 1,984 Tax paid (168) (218) Change in operating WCR (249) (114) Total cash flows generated from the businesses 1,746 1,652 Gross investments (1) (2,322) (1,664) Repayment of operating financial assets 194 263 Industrial and financial divestments, net of the debt of divested companies 266 211 Change in receivables & other financial assets (106) 62 Total net cash flows from investments (1,968) (1,128) Dividends paid (2) (726) (402) Net interest expenses paid (369) (347) Capital increase (VE & minority interests) (105) 59 Currency impact & other 215 (133) Change in net financial debt (1,207) (299) Net financial debt at closing (16,332) (16,827)(1) Including net financial debt from acquired companies(2) Of which for Veolia Environnement, €553m in 2008 and €232m in 2009 (net of the capital increase) 42
  • 43. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 2: Recurring operating income margin Recurring operating income margins H1 2008 H1 2008 H1 2009 €m H1 2009 margin restated (1) margin restated Water 597 597 10.0% 9.6% Waste 397 134 7.9% 3.0% Energy services 284 248 7.7% 6.7% Transportation 62 78 2.2% 2.6% Other (53) (56) - - Total Group 1,287 1,001 7.3% 5.7%(1) To ensure the comparability of the periods, the accounts at June 30, 2008 have been restated: • by the amount of income from the disposals of Clemessy and Crystal in the Energy division in December 2008, according to IFRS 5 which are presented in the income statement in the line item ―net income from discontinued operations‖; • by the reclassification into discontinued operations of the Freight operations in the Transport Division and of the Waste-to-Energy operations in the Waste Division in the United States 43
  • 44. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 3: Investments by division Growth €m Maintenance Financial incl. Industrial New New operating Total change in investments projects (1) financial consolidation assets scope Water 215 28 132 103 75 553 Waste 275 19 47 61 11 413 Energy services 92 11 56 93 35 287 Transportation 243 21 26 38 6 334 Other 33 18 2 24 - 77 Total H1 2009 858 97 263 319 127 1,664 Total H1 2008 912 108 367 819 116 2,322(1) Including the acquisition of water plants in Shenzhen in China in Water and other investments in the Middle East in Water, in the United Kingdom in Waste, in France and Central Europe in Energy Services. 44
  • 45. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 4: Main contracts won or renewed since the beginning of 2009 INTERNAL GROWTH- Renewals: 65 main contracts renewed in France during first half 2009 in Water (o/w 41 in drinking water & 24 in wastewater), 61 in Waste (o/w 33 from local authorities & 28 from companies), 14 in Transportation Roche-sur-Yon (1) (water) – Length: 12 years Roquebrune Cap Martin (water) – Length: 20 years – Cumul. rev.: €50m Moselle Moselle district (transportation) (2) – Length: 10 years – Cumul. rev.: €117m Var district (transportation) (2) – Length: 8 years – Cumul. rev.: €96m Le Creusot, Montceau-les-Mines (transportation) – Length: 6 years – Cumul. rev.: €26m Sauer Gard district (transportation) (2) – Length: 10 years – Cumul. rev.: €16m Défense Pechelbronn Environnement Chartres Alsace Services Métropole- Outsourcing / Privatization : Nice (transportation) – Length: 15 years – Cumul. rev.: €45m Le Creusot Touraine interurban bus network « Green line » for Indre et Loire district (transportation) Indre et Loire Montceau-les-Mines – Length: 7 years – Cumul. rev.: €42m Nevers Lons-le- Project SIM (creation of multi-modal information system Alsace Region) Saunier (transportation) - Length: 10 years – Cumul. rev.: €4m La Roche-sur-Yon Lons-le-Saunier (energy) – Length: 6 years Mende en Lozère (heating network from local biomass) (energy), in partnership with Engelvin TP réseaux – Operating length : 24 years Community of cities Sauer Pechelbronn (Bas-Rhin) (heating network from biomass) (energy) – Length: 20 years Roquebrune Cap Martin Nevers area (construction & operating of professional landfill) (waste) – Length: 20 years – Cumul. rev.: €18m Mende Var Nice Gard- Engineering / Design & Build: Chartres Métropole (construction & operating of the new STEP with commitment notably to reduce Green House Gas) (water) - Length (Operating): 20 years – Cumul. rev.: €156m (including construction for €54m)  Renewals PARTNERSHIP  Outsourcing / Privatization Partnership with DCNS (multiservices), through creation of a JV:  Engineering / Design & Build Défense Environnement Services (51/49) – Cumul. Rev between 5 to 10 years: €150m  Industry & services (1) Starting July 2009  Company acquisition (2) Starting September 2009  Partnership with other company 45
  • 46. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 4: Main contracts won or renewed since the beginning of 2009 INTERNAL GROWTH- Renewals: Görlitz Stadtwerke (water) –Length: 20 years - Cumul. rev.: €310m- Outsourcing / Privatization: Merseyside Waste Disposal Authority (waste) Sweden – Length: 20 years – Cumul. rev.: €719m City area of Madrid - station « South » (water) Grudziadz – Length: 4 years (2 years option) – Cumul. rev.: €16m (without option) Burg water syndicat (Saxe-Anhalt) (water) Poland - Length: 15 years – Cumul. rev.: €20m Landskrona Pécs (heating network with commitment to put in place biomass Skanes cogeneration unit) (energy) – Length: 22 years Burg Merseyside Trelleborg Trnava region (energy) - Length: 10 years Görlitz Germany Skane county (transportation) – Length: 5 years (2 years option) – Cumul. rev.: €94m United-Kingdom Czech Republic Landskrona (Regional transportation system) (transportation) – Length: 8 years (2 years option) – Cumul. rev.: €42m Trelleborg/Svedala (transportation) Slovakia – Length: 8 years (2 years option) – Cumul. rev.: €37m Grudziadz (transport on demand) (transportation) Trnava – Length: 10 years – Cumul. rev.: €15m Hongry- Engineering / Design & Build: Barcelona Barcelona (construction & operating the new heat and cold network) (energy) Pécs – Operating length: 30 years - Cumul. rev.: €600m Madrid Spain  Renewals  Outsourcing / Privatization (1) Starting 2010  Engineering / Design & Build (2) Starting September 2009  Industry & services  Partnership with other company 46
  • 47. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 4: Main contracts won or renewed since the beginning of 2009 INTERNAL GROWTH- Renewals: Tempe (transportation) - Length: 4 years – Cumul. rev.: €93m Las Vegas(1) (transportation) - Length: 1 year – Cumul. rev.: €69 m Denver(2) (transportation) - Length: 3 years (2 years option) – Cumul. rev.: €49m- Outsourcing / Privatization: Canada New Orleans (overall public transportation system) (transportation) – Length: 10 years (initial duration 5 years with 5 years renewal depending on achievement of performance objectives) – Cumul. rev.: €201m United States Houston (transportation) (Light rail - organization and construction) Denver – Length: 35 years – Cumul. rev.: €1,200m Las Vegas Tempe Houston Mexique New Orleans  Renewals  Outsourcing / Privatization (1) Starting September 2010  Engineering / Design & Build (2) Starting 2010  Industry & services  Company acquisition 47
  • 48. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 4: Main contracts won or renewed since the beginning of 2009 INTERNAL GROWTH- Renewals: China South Korea Perth (transportation) - Length: 7 years – Cumul. rev.: €17m RATP Développement Auckland(1) (transportation) Japan - Length: 4 years – Cumul. rev.: €64m Saitama & Hiroshima- Japan (water), Hong Kong Lightrail India - Length: 3 years – Cumul. Rev. for both contracts: €21m Chiba- Outsourcing / Privatization: Saitama & Hiroshima- Sydney (networks maintenance) (water), in consortium with Bovis - Length: 4 years (3 years option ) - Cumul. rev.: €44m, without option and €77m with option Taïwan Chiba (Japon) (water) - Length: 3 years – Cumul. rev.:€38m Auckland EXTERNAL GROWTH Hong Kong light rail network (transportation) (JV) New Zealand Australia Perth PARTNERSHIP Sydney  Renewals Partnership with RATP Développement (transportation)  Outsourcing / Privatization through the creation of a JV (50/50) in Asia – Cumul. Rev.: 2013: €500m€  Industry & services (1) Starting 2010  Company acquisition  Partnership with other company 48
  • 49. Investor Relations – First Half 2009 Results – 06.08.09 Appendix 4: Main contracts won or renewed since the beginning of 2009 INTERNAL GROWTH Rabat- Outsourcing / Privatization: Morocco Bus network for Grand Rabat area (in consortium with Bouzid & Hakam Groups) (transportation) – Length: 15 years – Cumul. rev.: €1,125m Doha – Ashghal (water) – Length: 7 years (additional 3 years option) – Cumul. rev.: €44m Qatar- Industry & services: Sipchem United Arab Doha Emirates Saudi International Petrochemical (Sipchem) (operation contract) (water) – Length: 5 years – Cumul. rev.: €6m Saudi Arabia  Outsourcing / Privatization  Engineering / Design & Build  Industry & services  Partnership with other company 49
  • 50. Investor Relations – First Half 2009 Results – 06.08.09Appendix 5: Debt characteristics at June 30, 2009 Ratings — Moody’s: A3/P-2 Negative (March 25, 2009) — Standard & Poor’s: BBB+/A-2 Negative (March 26, 2009) H1 2009 bond issues: — €2bn, maturities of 5 and 10 years (€1.25bn and €0.75bn) — €250m, maturity of 8 years H1 2009 bond redemption: €44m Average maturity of net debt: 9.5 years vs. 9.3 years at December 31, 2008 Group liquidity: €9.6bn o/w €4.7bn in undrawn credit lines Net Group liquidity: €6.0bn Net financial debt after hedges Currencies (gross debt after hedges) Fixed rate: 68% Other 19% (1) o/w euro: 91% GBP 8% Euro o/w U.S. dollar: 49% 65% o/w pound sterling: 49% 8% USD Floating rate: 32%(1) Of which zloty: 2% CNY: 3% and HKD: 3% 50
  • 51. Investor Relations – First Half 2009 Results – 06.08.09Appendix 6: VE Group bonds maturity schedule atJune 30, 2009 €m1600140012001000800600400200 0 2009 2013 2017 2021 2025 2029 2033 2037 51
  • 52. Investor Relations – First Half 2009 Results – 06.08.09Investor 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 & Treasurer (North America)  Terri Anne POWERS , Director, North American Investor Relations 200 East Randolph Street Suite 7900 Chicago, IL 60601 Tem +1 (312) 552 2847 Fax +1 (630) 282 0423 e-mail brian.sullivan@veoliaes.com Web site http://www.veolia-finance.com 52

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