2012 Annual Results

2012 Annual Results
February 28, 2013

Investor Relations – 2012 Annual Results

Disclaimer
Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document
contains "forward‐looking statements" within the meaning of the provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Such forward‐looking statements are not guarantees of
future performance. Actual results may differ materially from the forward‐looking statements as a
result of a number of risks and uncertainties, many of which are outside our control, including but
not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the
risks associated with conducting business in some countries outside of Western Europe, the United
States and Canada, the risk that changes in energy prices and taxes may reduce Veolia
Environnement's profits, the risk that we may make investments in projects without being able to
obtain the required approvals for the project, the risk that governmental authorities could terminate
or modify some of Veolia Environnement's contracts, the risk that our long‐term contracts may limit
our capacity to quickly and effectively react to general economic changes affecting our performance
under those contracts, the risk that acquisitions may not provide the benefits that Veolia
Environnement hopes to achieve, the risk that Veolia Environnement's compliance with
environmental laws may become more costly in the future, the risk that currency exchange rate
fluctuations may negatively affect Veolia Environnement's financial results and the price of its shares,
the risk that Veolia Environnement may incur environmental liability in connection with its past,
present and future operations, as well as the risks described in the documents Veolia Environnement
has filed with the U.S. Securities and Exchange Commission. Veolia Environnement does not
undertake, nor does it have, any obligation to provide updates or to revise any forward‐looking
statements. Investors and security holders may obtain a free copy of documents filed by Veolia
Environnement with the U.S. Securities and Exchange Commission from Veolia Environnement.

This document contains "non‐GAAP financial measures" within the meaning of Regulation G
adopted by the U.S. Securities and Exchange Commission under the U.S. Sarbanes‐Oxley Act of 2002.
These "non‐GAAP financial measures" are being communicated and made public in accordance with
the exemption provided by Rule 100(c) of Regulation G

2


Summary

1. 2012, 1st year of Transformation Antoine Frérot

2. 2012 annual results Pierre‐François Riolacci

3. Application of IFRS 10‐11‐12 standards Pierre‐François
Riolacci

4. 2013‐2015 objectives Antoine Frérot and François Bertreau

5. Appendices

3

1
2012 : 1st year of Transformation
ahead of objectives

Antoine Frérot


2012 : 1st year of Transformation ahead of objectives

Evolution of corporate governance and new organization

Asset divestments and restructuring

Reduction of net financial debt by €3.4bn to €11.3bn

Faster than expected cost reductions

Improvement in 2nd half adjusted operating cash flow

Commercial success

Veolia is on the right path
5


New Company organization

Board of Directors
• 4 new members appointed at the 2012 Annual General Shareholders
Meeting: Maryse Aulagnon, Nathalie Rachou, Jacques Aschenbroich and
Groupama SA (represented by Georges Ralli)
• During the last quarter of 2012, resignation of Henri Proglio and
cooptation of Marion Guillou

Implementation of new Company organization
• Nomination of a new Chief Operating Officer, responsible for
standardization throughout the Company and reducing costs

6


2012: Divestment program ahead of our objectives

In €bn

74% completed

3.7

* Following the change from proportionate
consolidation to equity method accounting since
Oct. 31st, 2012
7


Geographic and business refocusing: 48 countries at the end of
2012*

Zoom
Europe

Geographic refocusing
Objective: 40 countries
at the end of 2013* Exit of activities

Business refocusing
8
*capital employed > €5M


2012: Debt reduction ahead of our objectives
Reduction of net financial debt by €3.4bn in 1 year instead of 2 years
2012 leverage ratio of 3.26x(1)

Net financial debt amounted to €11.3bn at December 31, 2012, a reduction of
€3.4bn compared to the prior year
• €3.7bn in asset divestments
• Debt reduction of €1.4bn following the change in accounting for the Berlin
water contract to equity method as of October 31, 2012
• 68% of proceeds from asset divestments applied to debt reduction
• Good working capital management
• Control of industrial investments

Leverage of 3.26x (1) at December 31, 2012 versus 3.88x at December 31, 2011
• Favorable impact of timing of divestments

(1) Net financial debt/ (operating cash flow before changes in working capital + OFA repayments) = 11,283/ (3,085 + 371) = 3.26x
9


2012: Cost reductions in advance of the objective*

In €M

Impact on operating income

20

10
* Convergence 1


2012: Improvement in 2nd half adjusted operating cash flow
despite a deteriorated environment
Q4 2012: 2nd consecutive quarter of Y‐Y increase in adjusted operating cash flow*

Fourth quarter adjusted operating cash flow increased 2.9%*
Volume impact: Good resilience in waste operations
Impact of savings plans exceeded objectives
Good contribution from growth platforms

*Excluding the impact of the deconsolidation of Berlin water contract for 2 months of ‐€31M. Variation of
Q4 adjusted operating cash flow not restated was ‐1.1%
11
** Q2 variation corrected for Italian receivables write down and other accrued charges of ‐€89M


Continued commercial success
Water
• United States: performance and consulting contract award for optimization of New York city’s drinking
water and wastewater services‐ Cumulated revenue of $36M over 4 years
• United States: contract award for the management of water and wastewater systems in Rialto, California
– Cumulated revenue of $300M over 30 years
• India: contract award to upgrade drinking water network and operations in the city of Nagpur‐
Cumulated revenue of €387M over 25 years
• France: renewals /contract extensions >€850M (cumulated revenue, contracts > €10M)

Environmental Services
• United Kingdom: PFI contract award for the residual municipal waste treatment and recovery in the city
of Leeds – Cumulated revenue of £460M over 25 years
• China: concession contract awarded in partnership with a Chinese company, for a hazardous waste
treatment center in Changsha (Hunan province) ‐ Cumulated revenue of €320M over 25 years
• France: contract renewals at the end of December ~€200M (cumulated revenue)
• France: two new lines of recovery (used motor oil recycling and anaerobic digestion)

Energy Services
• Central & Eastern Europe: new contract signatures for €950M in cumulated revenue
• France: contract renewals at the end of December >€300M (cumulated revenue), within a more
challenging commercial context
12

2
2012 Annual Results

Pierre‐François Riolacci


2012: 1st year of Transformation ahead of our objectives
Good operational resilience in a difficult environment
Key Figures
2011 Δ
2011 constant
In €M re‐presented(1) 2012 (2) Δ FX
published

Revenue 29,647 28,576 29,439 +3.0% +1.2% (5)
Adjusted operating cash flow 3,152 2,853 2,723 ‐4.6% ‐6.2%
Adj. op. cash flow excluding Dalkia
2,853 2,804 ‐1.7% ‐3.3%
Italy write downs (6)
Adjusted operating income 1,700 1,558 1,194 ‐23.4% ‐24.5%
Adj. Op. income excluding Dalkia Italy
1,558 1,275 ‐18.1% ‐19.2%
write downs (6)
Operating income (3) 1,017 829 1,095 +32.1% +30.5%
Adjusted net income attributable to owners 290 195 60
of company

Net income attributable to owners of company ‐490 ‐490 394
Free Cash Flow (4) 438 438 3,673
Net financial debt 14,730 14,730 11,283
(1) See appendix 2
(2) The review of results by auditors is still in progress
(3) Non recurring items include impairment losses on goodwill recorded in respect of Company subsidiaries as of December 31, 2011 in Southern Europe and the United States and
impairment losses on non‐current assets recorded in the respect of Company subsidiaries mainly in Italy.
(4) Free Cash Flow represents cash generated (sum of operating cash flow before changes in working capital and principal payments on operating financial assets) net of the cash
component of the following items: (i) changes in working capital for operations, (ii) operations involving equity (share capital movements, dividends paid and received), (iii) investments
net of disposals, (iv) change in receivables and other financial assets), (v) net financial interest paid and (vi) tax paid .
(5) +1.5% at constant consolidation scope and exchange rates
(6) And accrued additional charges 14


Breakdown of revenue by division
in €M
29,439
28,576

Δ Δ excl. FX
Δ constant and scope
FX

Water +1.3% ‐0.5% +1.0%
Environmental +0.8% ‐2.2% ‐1.9%
Services
Energy Services +7.4% +7.0% +5.8%
Other +21.1% +19.2% +15.3%
Veolia +3.0% +1.2% +1.5%

*See appendix 2 15


Water: Revenue of €12,078M
Operations: Revenue stable (‐0.2% at constant scope
Revenue (in €M)
and FX)
• France: Revenue increased 1.3% at constant scope 11,921 12,078 +1.3%
Continued contractual erosion: ‐1.6%
Lower volumes: ‐1% +7.9%

Positive impact of price and construction activities:
+3.9%
• Outside France: Revenue declined 1.1% at 4 243 4 223
constant scope and FX
Negative price impact related to Berlin contract
Good performance in Central and Eastern Europe ‐1.5%
(higher prices)
China concessions: favorable price and volume effect

Technologies & Networks: Revenue increased
(+4.9% at constant scope and FX)
• Increase in industrial activity, particularly in the Oil & Gas Operations
sector
Technologies & Networks

* To ensure the compatibility of periods, the 2011 financial 16
statements have been re‐presented (see appendix 2)


Water: Adjusted operating cash flow of €1,172M

Adjusted operating cash flow declined 8.4% (‐9.4% at constant FX) to
€1,172M
• France: contractual erosion and lower volumes (‐1%). Difficulties in
Guadeloupe.
• Germany: lower price and only 10 months consolidation of Berlin Water by
proportional integration
• Good progression in Central and Eastern Europe, and Asia Pacific
• Net impact of Efficiency and Convergence Plans of €106M (including €40M
for Convergence)

Adjusted operating income declined 22.5% (‐23.3% at constant FX) to
€674M

17


Environmental Services: stable revenue despite difficult
economic environment
Variation Revenue 2012 / 2011: +0.8% Q4 2012: 1st quarter of positive organic revenue growth +3%
and ‐1.9% at constant scope & FX
2012 Quarterly Y-Y Revenue Growth
5.8%
2012
3.0%
Price and volume of recycled materials ‐1.9% 0.7%
0.0%
Waste volumes ‐
1st quarter 2nd quarter 3rd quarter 4th quarter
Service price increases +0.8%
‐1.1%
Other (including construction revenue) ‐0.8% ‐3.1% ‐3.4%

Currency effect +3.0%
‐5.7%
Consolidation scope ‐0.3%
Growth rate Growth rate at constant scope & FX

Difficult macro‐economic context with lower industrial production indices for the second
consecutive quarter in Europe and the United States.

Revenue remains supported by hazardous waste, which grew in all four quarters in 2012
(+6.6% organic growth for the year)

18


Environmental Services: Revenue of €9,083M (+0.8%) and
adjusted operating cash flow of €1,048M (+2.7%)
Revenue:
• Good resilience in France, revenue increased 1.4% at constant scope
• In the United Kingdom, revenue declined 2.1% at constant scope and FX with lower
landfill volumes and a slowdown in construction activity
• Significant revenue decline in Germany: ‐13.2% at constant scope, of which ‐8.8% related
to lower prices and volumes of raw materials. Competitive pressure within the industrial
and commercial sector
• Australia revenue grew 11.4% at constant scope and FX: increase in volumes, mainly in
Q4, as well as increased landfill tax and higher tariffs

Adjusted operating cash flow increased 2.7% (‐0.3% at constant FX) to €1,048M
• Unfavorable impact of raw material prices (‐€33M)
• Continued difficulty in recovering higher costs from clients
• Net impact of Efficiency and Convergence plans of €88M (including €28M from
Convergence)

Adjusted operating income declined 14.6% (‐17.1% at constant FX) to €356M

19


Energy Services: Revenue of €7,665M
Revenue (in €M)
Revenue increased 7.4% (+5.8% at constant scope & FX) to
€7,665M 7,665 +7.4%
• Higher energy prices: impact >€200M (mainly in France) 7,138
• Favorable weather effect, mainly in France: impact >€100M
• Increase in construction activities in France (CRE projects)

Adjusted operating cash flow declined 7.6% (‐7.7% at 2 064
+6.2%
1 908
constant FX) to €544M
• France: negative impact of regulation changes (heating price and
electricity tariff from gas cogeneration)
• Contribution of Warsaw heating network: €36M
• Italy: receivables write down and accrued expenses of ‐€82M
Excluding the write down and accrued expenses, adjusted operating cash 1 857 +8.6%
flow would have increased by 6.3% 1 690
• Net impact of Efficiency and Convergence plans of €66M
(including €8M for Convergence)

Adjusted operating income declined 22.9% (‐22.5% at
constant FX) to €298M
• Excluding the receivables write down and accrued expenses in
Outside France
Italy, adjusted operating income would have declined by 1.8%
France

* To ensure the compatibility of periods, the 2011 financial
statements have been re‐presented (see appendix 2) 20


Evolution of adjusted operating cash flow
In €M

21


Adjusted operating cash flow

2011
2012 Δ constant
In €M Re‐presented (1) Δ
FX

Water 1,279.4 1,172.2 ‐8.4% ‐9.4%
Environmental Services 1,020.8 1,048.2 +2.7% ‐0.3%
Energy Services 588.9 544.4 ‐7.6% ‐7.7%
Others ‐36.5 ‐42.0 ‐15.1% ‐21.6%
Total Company 2,852.6 2,722.8 ‐4.6% ‐6.2%

Margin 10.0% 9.2%

Excluding the Energy Services write down and charges in Italy,
adjusted operating cash flow declined 3.3% at constant FX

(1) See appendix 2

22


Reconciliation of adjusted operating cash flow to
adjusted operating income

Δ
2011
In €M 2012 Δ constant
re‐presented(1) FX

Adjusted operating cash flow 2,852.6 2,722.8 ‐4.6% ‐6.2%

Depreciation & amortization ‐1,388.9 ‐1,479.8
Net capital gains +77.1 +84.3
Provisions, fair value adjustment &
+17.0 ‐133.6
others
Adjusted operating income 1,557.8 1,193.7 ‐23.4% ‐24.5%

(1) See appendix 2

23


Adjusted operating income

2011 Δ constant
In €M 2012 Δ
re‐presented(1) FX

Water 869.2 673.9 ‐22.5% ‐23.3%
Environmental Services 417.0 356.0 ‐14.6% ‐17.1%
Energy Services 387.0 298.5 ‐22.9% ‐22.5%
Others ‐115.4 ‐134.7 ‐16.7% ‐17.8%
Total Company 1,557.8 1,193.7 ‐23.4% ‐24.5%

Margin 5.5% 4.1%

Excluding the Energy Services write down and charges in Italy,
adjusted operating income declined by 19.2% at constant FX

(1) See appendix 2
24


Reconciliation of adjusted operating income and operating
income
In €M 2011 2012
re‐presented (1)
Adjusted operating income 1,558 1,194
Goodwill and asset impairments Italy ‐446
Goodwill Impairment United States ‐153
Goodwill impairment Morocco ‐5
Goodwill impairment Spain ‐18
Other write downs and restructuring charges ‐29 ‐13
UK Non‐regulated Water impairment ‐57
Impairment SNCM ‐78
Goodwill impairment Baltic countries ‐26
Others ‐ ‐3
Total non‐recurring elements ‐729 ‐99
Operating income 829 1,095

(1) See appendix 2
25


Net finance costs
In €M 2011 2012 Δ%
Cost of net financial debt published ‐748 (1) ‐759
Cost of net financial debt restated (2) ‐787 5.39% ‐750 5.25% ‐0.14%
Impact of active debt management and debt amortization ‐0.17%
Impact of change in interest rates ‐0.03%
Currency impact +0.04%
Other +0.02%

In €M Dec. 31, 2011 Dec. 31, 2012
(3)
Closing net financial debt 14,730 11,283 Evolution of cost of borrowing
(4)
Average net financial debt 14,600 14,292
Average gross debt 19,868 18,361
Gross cost of borrowing 4.32% 4.27%
Average cash 5,742 4,403
Rate 1.48% 1.13%

(1) €710M pro forma IFRS 5
(2) Including financial costs of discontinued operations and
excluding cost of debt repurchases in December 2012 (€47M
in 2012)
(3) Net financial debt represents gross financial debt (non‐
current borrowings, current borrowings and bank overdrafts
and other cash position items), net of cash and cash
equivalents and excluding fair value adjustments of
derivatives hedging debt
(4) Average net financial debt is the average of monthly net debt
during the period 26


Debt management in 2012
Objective: Reduction of the cost of carrying cash, lengthening the average duration of debt
and management of required debt repayments
• Partial early redemption of bond issues in $ and in €: €649M and $560M
• Exchange offer with issuances offset by partial buybacks for €750M
• Amortization and repayments: €1,062M
Total repayments and buybacks net of issuances: €1,711M & $560M
• One time cost of €47M in 2012
Reduction of net financial debt by €3.4 billion, without further increase in liquidity
position
=> An optimized debt repayment schedule, without a peak repayment
1800

1600 € $ £ CNY 2010 buyback 2011 buyback 2012 buyback
1400

1200

1000

800

600

400

200

0

27


Hybrid
Objectives of the issuance
• Reinforce our financial strength and support the Company’s transformation
• Take advantage of favorable rates and spreads
• Diversification of financing currencies
January 2013: Issuance of perpetual debt callable at par beginning
April 2018 in 2 tranches
• €1 billion @ 4.5%
• £400M @ 4.875%
• 100% Equity under IFRS
• 50% Equity for ratings agencies: until reimbursement for Moody’s and until
April 2018 for S&P

Improvement in credit ratios
28


Taxes

After adjusting for one‐time items, the company tax rate at December 31, 2012
fiscal year was 39.2%.
The effective tax rate at December 31, 2012 is derived:
Income
Tax base Tax rate
In €M expense before
taxes

Adjusted for one‐time items ‐232 591 39.2%
Goodwill impairment and asset write downs 12 ‐191
Dalkia Italy‐ Receivables write down* 7 ‐82
Reintegration of TNAI flow 54 ‐
Provisions and expenses for tax risks ‐35 ‐
Rate and regulatory changes 21 ‐
Other elements 14 ‐45
Effective ‐159 273 58.3%

* And accrued expenses 29


Results from discontinued operations

In €M 2011 2012

UK Regulated Water 65 275

Of which net capital gain 233
US Solid Waste US 43 306
Of which net capital gain 208
Other contributions 13 ‐195
Of which Citelum* ‐11 ‐68

Of which Eolfi* ‐10 ‐60

Of which Morocco Water* ‐45 ‐38

Net income from discontinued operations 121 386

* Including fair value adjustments
30


Reconciliation of operating income to net income

2011 re‐presented (1) 2012

In €M Adjusted Adjustment Total Adjusted Adjustment Total

Operating income 1,558 ‐729 (3) 829 1,194 ‐99 (3) 1,095

Cost of net financial debt (2) ‐758 ‐ ‐758 ‐775 ‐47 ‐822

Income tax expense ‐337 ‐184 ‐521 ‐213 54 ‐159

Share of net income from
12 ‐ 12 30 ‐ 30
associates
Net income from discontinued
‐ 121 121 386 386
operations
Non‐controlling interests ‐280 107 ‐173 ‐176 40 ‐136
Net income attrib. to owners
195 ‐685 ‐490 60 334 394
of Co.
Net income attrib to owners of
290 ‐780 ‐490 60 334 394
Co. published

(1) See appendix 2
(2) Including other financial revenue and expense
(3) See details slide 25
31


Statement of cash flows
In €M 2011 2012
Operating cash flow before changes in working capital (1) 3,353 3,085
Reimbursement of operating financial assets 441 371
Total cash generation 3,794 3,456
Gross investments ‐3,134 ‐3,282
Variation working capital ‐41 103
Taxes paid ‐368 ‐336
Interest expense ‐771 ‐774
Dividend (2) ‐547 ‐547
Others (3) ‐39 ‐46
Divestments 1,544 5,099
Free cash flow 438 3,673
Impact of exchange rates ‐64 ‐148
Others 114 ‐78
Net financial debt 14,730 11,283
Change in net financial debt ‐488 ‐3,447

(1) Including financial cash flows and operating cash flow from discontinued operations
(2) Dividend paid to shareholders and non‐controlling interests
(3) Including mainly changes in receivables and other financial assets of re‐presented ‐€53M in 2011 and ‐€85M in 2012
32


2012 capex control
A year which included significant minority interest repurchases as well as control
of industrial investments

33


Review of asset divestments since 2009: €9bn in divestments
completed at high multiples
In a post financial crisis context

Multiples achieved by division and by geography since 2009 (1) (2)

By Geography By Division

(1) On transactions greater than €50m since January 2009 : 23 operations utilized, excluding Berlin Water, representing €6bn of EV, or 78% of the divestments
completed between 2009 and 2012
(2) Calculated EV/EBITDA multiples calculated as a weighted average: EBITDA of year n‐1 (of year n if the transaction was at the end of the year)
Multiples restated for divestments having the highest and lowest multiples

34


Cash Flows 80% allocated to debt
reduction

In €M

Positive cash
flow before
net
divestments
&
dividend(1)

(1) Cash flow before financial divestments and after payment of financial expense and taxes represents the sum of adjusted operating cash flow and operating cash flow from financing activities,
principal payments on operating financial assets, changes in working capital for operations and industrial investments and industrial divestitures, excluding net industrial investments of
discontinued operations
* Operating cash flow before changes in working capital minus capex of discontinued operations: Operating cash flow from discontinued operations: €337M. Net industrial investments: €576M
(Eolfi €186M, US Solid Waste €92M, UK Regulated Water €32M, Morocco Water €26M) 35
** Before changes in receivables and other financial assets

3
Application of new IFRS 10‐11‐
12 standards



Presentation of new IFRS standards
Today Tomorrow

IAS 27 – Consolidated and Separate IFRS 10 – Consolidated

IFRS 12 – Disclosure of Interests in Other
Financial Statements Financial Statements
SIC 12 – Consolidation – Special IAS 27 – Separate Financial
Purpose Entities Statements

Entities
IAS 28 – Investments in Associates IAS 28 – Investments in
Associates and Joint
Ventures

IAS 31 – Interests in Joint Ventures
SIC 13 – Jointly Controlled Entities –
Non‐monetary Contributions by
IFRS 11 – Joint Arrangements
Venturers

Retrospective application from January 1, 2013
37


Scope concerned (1/2)

All of the company’s partnerships including “Joint Ventures” according to
IFRS 11, of which the China Water entity, Dalkia International and Dalkia
Investment will now be accounted for by the equity method, in the
absence of any change in elements that assess control

Some exceptions concerning construction activities (Division T&N) with
consortia, Investments in joint venture companies in France and their
foreign equivalents for which “Joint Operations” will be accounted
(amount non significant)

38


Scope concerned (2/2)
Which treatment for each entity?

Dalkia International: joint venture owned 75% by Dalkia and 25% by EDF, with
an economic interest of 50% => change to equity method at 50%

VTD: change from proportionate consolidation at 50% to equity method at
50%

Proactiva Group: joint venture with FCC owned at 50% => change from
proportionate consolidation at 50% to equity method at 50%

Shenzhen: joint venture owned at 45%, with 25% economic interest => change
to equity method at 25%

Tianjin: joint venture owned at 49% => change from proportionate
consolidation at 49% to equity method at 49%

Recall BWB (Berlin water contract): RWE sold its stake to the Land of Berlin:
Veolia no longer has joint control => change to equity method at 25% from October
31, 2012
39


Accounts which will presented differently (1/2)
Joint ventures, currently consolidated by proportionate consolidation will
from now on be accounted for via the equity method:

• creation in the balance sheet, income statement and cash flow statement of two
lines which will allow one to distinguish the nature of entities accounted for by the
equity method

• in the income statement, integration of the results from equity accounted entities
in the Company’s adjusted operating income

• Interest received from loans granted to entities accounted for by the equity
method are included in financial income

40


Accounts which will presented differently (2/2)
Impact on net financial debt
• Inter‐company loans granted to joint ventures are not deducted from net
financial debt
• Adjusted Net Financial Debt, (AND) excludes debt from these financings
Veolia may be required to participate in the financing of partnerships, but accounting
under the equity method implies that inter‐company loans may no longer be eliminated.
A receivable is recognized in the amount of the loan, but is not deducted from net financial debt
The debt incurred by the Company for these financings remains a part of net financial debt
No modification of the actual definition of net financial debt
But, presentation of an additional new metric: Adjusted Net Financial Debt (AND), which
includes loans granted by the Company to joint ventures

Additional information to be provided within notes to financial statements
related to controlled subsidiaries, partnerships and investments in
associates

41


2011 adjusted operating cash flow bridge
2011 adjusted operating cash flow after IFRS 5 adjustments, excluding Berlin water contract
and post elimination of proportionate consolidation of €1.9bn
In €M
‐32%

42
* Including Other Europe and Middle East Water ‐€62M, Environmental Services Europe and China ‐ €47M, & Dalkia France ‐€24M Non‐audited figures

2/27/2013 Investor Relations – 2012 Annual Results

2011 net financial debt bridge
2011 re‐presented net financial debt of €12.7bn (versus €14.7bn published at 2011 end)
2011 Adjusted net financial debt excluding joint venture loan receivables would be €9.2bn

‐36% In €bn

* Net financial debt before the application of IFRS 10‐11‐12 and excluding debt loaned to joint ventures consolidated by proportionate 43
consolidation of €442M Non‐audited figures


2012 contributions of entities changing to equity method
accounting from Jan.1st, 2013 (1)

In €M 2012

Revenue 6,313
Adjusted operating cash flow 801
Operating income 394
Net income (Group share) 49
Gross capex (2) 866

Main companies concerned: Dalkia International , Berlin
Water (10 months), Tianjin, Shenzhen, Proactiva

(1) Following the 1st application of IFRS 10‐11‐12
(2) Industrial and financial investments and new operating financial assets

44

2/27/2013

Strong capex reduction related to Transformation
Increasing capex control
End of a long, heavy investment cycle
In €M
3,256 3,282
3,134

Buyback
minorities…

Net of industrial divestments and OFA repayments,
CAPEX of €1.4bn, or ~5.6% of revenue 45


Impact of elimination of proportionate consolidation (PI) on
2013 objectives
Divestments
In €bn

Cost reductions
• On the basis of the scope managed at a consistent consolidation rate
• 80% converted into operating income, exclusively in controlled activities

* Following the change from proportionate consolidation to equity
method accounting since Oct. 31st, 2012 46


Impact of elimination of proportionate consolidation (PI)
on 2013 objectives
In 2013, positive cash flow before financial divestments
2013 net financial debt (post PI and hybrid) between €8bn and €9bn*
2013 Adjusted net financial debt (post PI and hybrid) between €6bn and €7bn*

In €bn NFD entities PI (Investor Day)

* Before closing exchange rates impact 47


Summary of objectives communicated during the December
2011 Investor Day updated for new accounting framework
Before After
• Divestments: €6 billion(5)
• Divestments: €5 billion • 2013 Adjusted net financial debt:
• 2013 Net financial debt: <€12 bn(1) between €6bn and €7 bn(1)
• Cost reductions 2013: €120M (2) • Cost Reductions 2013: €170M (2),(6)
impact on operating income
• Cost reductions 2015: €420M (2)
• Cost Reductions 2015: €470M (2), (6)
• 2014 leverage (3): 3.0x (4) impact on operating income
• Mid‐cycle organic revenue growth: • 2014 adjusted leverage (7): 3.0x (4)
+3%
• Mid‐cycle organic revenue growth:
• Mid‐cycle adjusted operating cash +3%
flow growth: +5%
• Mid‐cycle adjusted operating cash
flow growth: +5%

(1) Before closing exchange rate impact
(2) Net of implementation costs
(3) Net financial debt/ (Operating cash flow before changes in working capital + OFA Repayments)
(4) 5%
(5) Including the debt reduction of €1.4 billion related to the change to equity method accounting for the Berlin Water contract and repayment of
loans to joint ventures
(6) Of which ~20% associated with joint ventures
(7) Adjusted net financial debt / (Operating cash flow before changes in working capital + OFA Repayments)
48

4
2013‐2015 Objectives
Antoine Frérot
François Bertreau


2013: 2nd year of Transformation: ambitious objectives in
order to harness strong potential

A significant source of productivity: Transformation and cost
reductions

A deleveraged and flexible Company

Growth: deployment of new business models

50


A company with strong potential
Presence in markets with strong growth

Size of the Company
Need to leverage the associated benefits

Leading technical know‐how
Need to standardize and disseminate

Global presence
An asset, but need to be more focused

But a sub‐optimal organization

51


Key areas of improvement

IT Human
Real Estate Resources

SIZE
Purchasing
Internalization Mutualization

R&D
GLOBAL
Process PRESENCE
TECHNICAL standardization
KNOW‐HOW Commercial Best practices
synergies
170

Capex management

52


Improve commercial performance

Create a Sales and Marketing Group
• Design modular offerings/ Standardization

Create Key Account Managers
• Systematic selling to large industrial clients

Empower Country Delegates
• Cross selling

Research and Development, a differentiating factor

53


Improve operational performance

Establish an Operations leadership for each division

Standardization of operating processes
• Definition of comparable business lines
• Benchmarks/ Best practices

Rationalization of R&D programs

A change in culture
170

54


Improve support function performance
Geographic mutualization
• Transactional activities: accounts payable, general accounting, payroll, IT infrastructure…
• Expertise activities: Treasury, Tax, Risk & Insurance, Purchasing, Communication, Real Estate,
Legal, HR (training…)
Establish global back office management
• Nomination of a Director of Veolia Global Support Services
“Quick Wins”: data centers, vehicle fleet, real estate management,
insurance, fees

Reference cost base: €1.3bn

Identified savings

2015 objective – Dec. 2011 Investor Day
€80M

€65M
80% already identified
55


Sources of productivity: IT
Phase 1: Short term actions
• 70% of savings announced at the Investor Day already identified
Hosting, servers
Reform the French network + international backbone
Optimization of support services
Google Apps
2nd portion of IT Plan: Infrastructure rationalization
• Mutualization at the country level Reference cost base: €550M
• Limited number of shared service centers
• Functional reorganization
• Internalization of key competencies
• Sourcing optimization
€60M
Global optimization plan: New IT 2.0
• Worldwide network optimization €43M
• Rationalization of legacy applications
Savings identified

2015 objective – Dec. 2011 Investor Day 56


Sources of productivity: Purchasing
€14bn(1) in purchases per year:
• €9bn(1) adressable
Today:
• Operations significantly decentralized
• 20% of purchases centralized

Action plans
• Systemizing purchasers’ utilization, with evaluation of requirements
• Centralized purchasing by country

Depending on categories,
170

potential gain of more than 5%

(1) Before elimination of proportionate consolidation
57


A net cost savings plan of €470M* in 2015

A €470M* NET COST SAVINGS PLAN IN 2015
Impact on
operating
income
In €M
470

270

170

New objectives will be presented on May 3, 2013

* Of which ~20% realized in joint ventures. Net of implementation costs 58


From €16.5bn net financial debt at the end of 2008 to
€6bn‐€7bn adjusted net financial debt(1) by the end of 2013
In €bn With €1.8 billion in dividends paid during the period

2014
Leverage
objective of
3.0x (3)

(1) Adjusted net financial debt excluding debt from JVs and post application of IFRS 10‐11‐12
(2) Net financial debt / (Operating cash flow before working capital + OFA Repayments) 59
(3) Adjusted net financial debt/ (Operating cash flow before working capital + OFA Repayments), 5%


A deleveraged Company with the ability to self‐finance
operations
Regained financial strength

Positive cash flow before net financial divestments(1)

Sustainable resources to appropriately invest in our growth platforms
while complying with an objective of positive cash flow before net
financial divestments

Dividend stable during the transformation period
• Dividend payable in 2014 in respect of the 2013 fiscal year: €0.70 per share

(1) Cash flow before financial divestments and after payment of financial expense and taxes represents the sum of adjusted operating cash flow and operating cash flow
from financing activities, principal payments on operating financial assets, changes in working capital for operations and industrial investments and industrial divestitures,
excluding net industrial investments of discontinued operations 60


Reliance on the Company’s growth platforms
Water: Central & Eastern Europe Energy Services: Central & Eastern
€M Variation
Europe Variation
2009 2012 2009/2012 €M 2009 2012 2009/2012
Revenue 875 1,115 +27.4% Revenue 1,241 1,631 +31.4%
Adj. Op. Adj. Op.
Cash Flow 141 195 +38.3% Cash Flow 289 307 +6.2%

Water: China Environmental Services: PFI in the
Variation United Kingdom Variation
€M 2009 2012 2009/2012 €M 2009 2012 2009/2012
Revenue 531 867 +63.3% Revenue 370 583 +57.6%
Adj. Op. Adj. Op.
Cash Flow 92 128 +39.1% Cash Flow 102 163 +59.8%

Environmental Services: Hazardous
waste Variation
€M 2009 2012 2009/ 2012
Revenue 603 782 +29.7%
Adj. Op.
Cash Flow 99 142 +42.6%

Adjusted operating cash flow improvement of roughly €210 M in 3 years
+29% in 3 years 61


Growth: deployment of new business models

Concentrate on large‐scale markets with significant environmental
issues...
... Where we can bring differentiated expertise, and be
compensated in a profitable manner

Increase our revenue from industrial clients
from ~35 % today to more than 50 %

Move toward the most dynamic geographies

Evolve our business models

62


Concentrate on large‐scale markets with significant
environmental issues‐ Ex.: Dismantling of nuclear plants
A market with strong potential… … in which Veolia has
a unique position

France is n 1 worldwide in the Veolia already has recognized
electronuclear cycle expertise
CEA ‐ AREVA – EDF •ANDRA : storage management of
weakly radioactive waste
•CEA Saclay : operation of the effluent
A market potential in France of ~ pre‐treatment facility
€32bn1 for the dismantling of •Fukushima : emergency
nuclear plants management with Areva and the CEA
Veolia has the expertise and the
necessary critical mass in order to
pursue development of this market

Veolia is committed to developing specialized solutions for the
dismantling and remediation of nuclear plants

1. Source Cour des Comptes 2012 63


Increase revenue with industrial clients
Ex.: Shale gas: initial contracts in the USA and Central Europe

8
5 8
4 7
8

1 6

2 8 8

3 8

1 Mobile water treatment (evaporation) → discharge / reuse 5 Water treatment for odor control
2 Water treatment (evaporation & crystallization) → discharge / reuse 6 Vacuum truck service for liquid waste
3 Water treatment (reverse osmosis) → discharge / reuse 7 Soil remediation
64
4 Mobile water treatment → reuse 8 Solidification


Evolve our business models

STRONG AXES OF CHANGE …TRANSLATES IN A CONCRETE MANNER
FOR OUR BUSIENESSES… FOR OUR CLIENTS

Collection incentive
Reinvent our historical businesses Biomass
Smart metering

To serve the operator, rather than be
Evolve our business models the operator
Profit sharing

Solutions compatible with municipal
Better serve our customers operations
Reduced costs for our customers

65


Mid‐term objectives confirmed
• €6 billion in divestments (1)
• 2013 net financial debt, under new IFRS standards:
2012‐2013: Net Financial Debt between €8bn and €9bn(2)
Transformation Adjusted Net Financial Debt between €6bn and €7bn(2)
Period • Cost reductions:
in 2013: €170M net impact(3) on operating income
• Extended dividend commitment of €0.70 (4) per share in 2013(5) and
2014

• Organic revenue growth > 3% per year (mid‐cycle)
Beginning in • Adjusted operating cash flow growth >5% per year (mid‐cycle)
2014: • Leverage ratio(6) of 3.0x(7) beginning in 2014
New • Mid‐term: Payout ratio in line with historic level
Veolia • Cost reductions in 2015: €470M net impact(3) on operating income

(1) Including the debt reduction of €1.4 billion related to the change to equity method accounting for the Berlin Water contract
and repayment of loans to joint ventures
(2) Before closing exchange rate impact
(3) Net of implementation costs, of which ~20% associated with joint ventures
(4) Subject to the approval of Veolia’s Board of Directors and the Annual General Shareholders Assembly
(5) In cash or shares
(6) Adjusted net financial debt/ (Operating cash flow before changes in working capital + OFA Repayments)
(7) 5% 66


5
Appendices

67


Summary of appendices
Currency movements Appendix 1
Principal 2011 re‐presented figures Appendix 2
Revenue by geography Appendix 3
Quarterly revenue Appendix 4
Main contracts won or renewed in 2012 Appendix 5
Environmental Services revenue by geography Appendix 6
Environmental Services revenue by activity Appendix 7
Environmental Services: Revenue vs. Industrial Production Appendix 8
Environmental Services: Raw materials prices Appendix 9
Gross investments by division Appendix 10
Completed divestments Appendix 11
Efficiency Plan and Convergence 1 Appendix 12
Debt characteristics Appendix 13
Net liquidity Appendix 14
Management of liquidity Appendix 15
Operating financial assets Appendix 16
Balance sheet Appendix 17
ROCE Appendix 18
Composition of Board of Directors and Executive Committee Appendix 19 68


Appendix 1: Currency movements

Main currencies
1 unit foreign currency = x€

2011 2012 Δ 2012 vs.
2011
U.S. dollar
Average rate 0.7184 0.7776 +8.2%
Closing rate 0.7728 0.7582 ‐1.9%
U.K. pound sterling
Average rate 1.1521 1.2330 +7.0%
Closing rate 1.1976 1.2255 +2.3%
Australian dollar
Average rate 0.7418 0.8058 +8.6%
Closing rate 0.7862 0.7868 +0.1%
Czech koruna
Average rate 0.0407 0.0398 ‐2.2%
Closing rate 0.0388 0.0398 +2.6%

The average rate applies to the income statement and cash flow statement
The closing rate applies to the balance sheet
69


Appendix 2: Main 2011 re‐presented figures for IFRS 5 (1)
2011
In €M 2011
published re‐presented
for IFRS5 (1)

Revenue 29,647 28,576

Adjusted operating cash flow 3,152 2,853

Adjusted operating income 1,700 1,558

Operating income (2) 1,017 829

Adjusted net income, Group share 290 195

Free cash flow (3) 438 438

(1) To ensure the comparability of period, the 2011 financial statements have been re‐presented to include:
‐ the impact of the reclassification into “net income from discontinued operations” of operations in the process of being sold such as the Moroccan activities in the Water
division and the Renewable energies activities partially sold as of December 31,2012;
‐ the impact of the reclassification into “net income from discontinued operations” of divested activities in 2012 such as the regulated activities in the United Kingdom in
the Water division and Solid waste activities in the United States in the Environmental Services division.
The 2011 financial statements have also been re‐presented for the reclassification into ‘continuing operations’ since March 3rd, 2011 of the activities of the group Société
Nationale Maritime Corse Méditerranée (SNCM) consolidated within the Transportation Division which was reclassified into “net income from discontinued operations”
as of December 31, 2011. The divesture process of the SNCM was interrupted during 2012 1st semester.

(2) Non recurring items include impairment losses on goodwill recorded in respect of Company subsidiaries as of December 31,2011 in Southern Europe and the United
States and Impairment losses on non‐current assets recorded in the respect of Company subsidiaries mainly in Italy.

(3) Free Cash Flow represents cash generated (sum of operating cash flow before changes in working capital and principal payments on operating financial assets) net of the
cash component of the following items: (i) changes in working capital for operations, (ii) operations involving equity (share capital movements, dividends paid and
received), (iii) investments net of disposals, (iv) change in receivables and other financial assets), (v) net financial interest paid and (vi) tax paid. 70


Appendix 3: Revenue by geography
in €M

29,439
28,576

Δ Δ excl.
Δ constant scope &
FX FX

Central & Eastern Europe +10.1% +12.1% +6.8%
France +3.5% +3.5% +3.8%
Europe, excl. France and ‐4.2% ‐6.3% ‐3.6%
Central & Eastern Europe
United States +7.4% ‐0.8% ‐0.4%

Asia Pacific +8.4% ‐0.2% ‐0.2%

Rest of the world +7.6% +6.4% +5.8%

Total +3.0% +1.2% +1.5%

(1) see Appendix 2
71


Appendix 4: Quarterly revenue
1st quarter 2nd quarter 1st half

2011 2012 Δ excl. 2011 2012 Δ excl. 2011 2012 Δ excl.
Re‐ scope & Re‐ scope Re‐ scope &
In €M FX & FX FX
presented(1) presented(1) presented(1)

Water 2,823.8 2,957.1 +5.1% 2,986.7 3,013.7 ‐0.3% 5,810.4 5,970.8 +2.3%
Environ. Services 2,196.3 2,197.0 ‐1.1% 2,357.3 2,284.9 ‐5.7% 4,553.6 4,481.9 ‐3.5%
Energy Services 2,286.6 2,502.6 +6.2% 1,311.2 1,418.0 +5.6% 3,597.8 3,920.6 +5.9%
Other 94.2 131.8 +21.4% 123.7 147.4 +16.0% 217.9 279.2 +18.3%
Company 7,400.9 7,788.5 +3.8% 6,778.9 6,864.0 ‐0.8% 14,179.7 14,652.5 +1.6%

Δ at current scope & +5.2% +1.3% +3.3%
FX
3rd quarter 4th quarter Full year ended December 31

In €M 2011 2012 Δ excl. 2011 2012 Δ excl. 2011 2012 Δ excl.
Re‐ scope & Re‐ scope & Re‐ scope &
presented(1) FX presented(1) FX presented(1) FX

Water 2,955.8 3,001.1 ‐ 3,155.1 3,106.3 ‐0.6% 11,921.3 12,078.2 +1.0%
Environ. Services 2,252.5 2,268.9 ‐3.4% 2,204.7 2,332.1 +3.0% 9,010.8 9,082.9 ‐1.9%
Energy Services 1,179.4 1,260.6 +3.4% 2,361.0 2,483.4 +6.8% 7,138.2 7,664.6 +5.8%
Others 149,8 173.4 +12.3% 138.5 160.2 +13.8% 506.2 612.8 +15.3%
Company 6,537.5 6,704.0 ‐0.3% 7,859.3 8,082.0 +2.9% 28,576.5 29,438.5 +1.5%
Δ at current scope & +2.5% +2.8% +3.0%
FX
(1) See Appendix 2 and IFRS 8 reclassifications detailed in section 2.1 “Operational Sectors” of the 2012 Operating & Financial Review 72


Appendix 5: Main contracts won or renewed since the
beginning of 2012 in France                                    (1/4)
ORGANIC GROWTH
Lens‐Liévin
‐ Renewals:
251 main contracts renewed in France in 2012 in Water (o/w 135 in drinking water
& 117 in wastewater) and more than 80 contracts with municipalities in Waste & Amiens
80% of contracts due to expire in 2012 renewed in Energy
Antibes (Drinking water) – Length 10 years – Cumul. Rev.€94M€ (Water)
Lens‐Liévin (Drinking water) – Length 12 years – Cumul. Rev. €114M (Water) Seine Aval (Achères)
Bassin de Thau Frontignan Sète – Energy recovery unit – Length 8 years – Cumul. Saint Germain en Laye
Rev. €39M (Waste)
Bassin d’Arcachon (waste water) – Length: 8 years – Cumul. Rev. €66M (Water) Propreté Ile
Management of household waste Val de Bièvre – Length: 6 years – Cumul. Rev.
de France
€34M (Waste) Vannes
Cleaning services for public  spaces and streets  for the Mont‐Valérien community
agglomeration– Length: 5 years – Cumul. Rev.€33M (Waste)
Household waste collection for the Est Ensemble community agglomeration (Ile de Descartes
France) – Length 5 years – Cumul. Rev.  €30M total, of which ~50% for Veolia
(Waste)
‐ Outsourcing / Privatization :
District heating network – renovation of the biomass heating cogenerations facility
in Saint Germain en Laye – Length: 20 years – Cumul. Rev.€90M (Energy)
Operation of a mechanical‐biological treatment plant with the SYSEM in Vannes –
Length 6 years – Cumul. Rev. €16M (Waste)
Industrial utilities – Contract for steam production, upgrade installations  Ajinomoto Bassin
Eurolysine in Amiens – Length: 12 years – Cumul. Rev.€279M (Energy) d’Arcachon
Industrial utilities – Steam production – Seyfert Paper SAS Descartes –Length: 12 Marcoule
years – Cumul. Rev.€93M€ (Energy)
Public service delegation for drinking water  in Salon de Provence (SEM Agglopole Salon Cadarache
Provence) – Length: 12 years – Cumul. Rev. €101M (Water) Provence Antibes
Thau‐
Frontignan‐
Sète
PARTNERSHIPS

Veolia Environnement and the CEA (French Alternative Energies and Atomic Energy
Commission) signed a general cooperation agreement on January 15, 2013 covering nuclear Renewals
facility dismantling and remediation, as well as a specific agreement concerning two facilities, Outsourcing / Privatization
one at the CEA center in Marcoule, the other at the CEA center in Cadarache. Engineering / Design & Construction
73
Partnerships with other companies


Appendix 5: Main contracts won or renewed since the beginning
of 2012 in Europe (2/4)
ORGANIC GROWTH
‐ Renewals :
Building energy services – renewal of European Commission offices in
Brussels, track energy consumption – Length: 10 years – Cumul Rev. €196M
(Energy)
Building energy service (local healthcare company in Trévise) – Operations
and maintenance of heating, air conditioning and non‐medical equipment–
Length: 9 years– Cumul. Rev.€137M (Energy)
Management of technical and energy services for European Parliament real
estate assets in Strasbourg, Brussels and Luxembourg – Length: 6 years –
Cumul. Rev. €126M (Energy)
Public service management contract for operating the district heating
network in the city of Iasi in Romania – Length: 20 years – Cumul. Rev.
€781M (Energy) United
Closed Loop Recycling contract in the United Kingdom to provide recycled Kingdom
plastic ‐ Length 5 years – Cumul. Rev. €32M (Waste) Leeds
Closed
‐ Engineering / Design & Construction : Loop Luxembourg
Design and construction of an evaporation and crystallization facility for the Recycling / Belgium
recuperation and purification of salts and potash starting with salt by‐ European
products generated in the production of fertilizer – Length: 2 years (Water) Parliament Iasi
PFI contract for residual municipal waste treatment and recovery with the
Romania
city of Leeds, United Kingdom – Cumul. Rev. £460M – Length: 25 years
(Waste)
Trévise

Renewals Suria Italy
Outsourcing / Privatization
Spain
Engineering / Design & Construction

74


Appendix 5: Main contracts won or renewed since the beginning of
2012 in North America (3/4)
ORGANIC GROWTH

‐ Renewals:
Contract to treat medical waste (Phoenix) – Length: 5 years
– Cumul. Rev. $50M (Waste)
Industrial services cleaning contract (United States) –
Length: 5 years‐ Cumul. Rev.€76M (Waste)
Hazardous waste management and treatment – (United
Canada
States) Length: 3 years‐ Cumul. Rev. $60M (Waste)

Orbite
‐ Outsourcing / Privatization : Aluminae Inc
Performance and consulting contract to support improved
management of water services in the city of New York–
Length: 4 to 6 years – Cumul. Rev. $36M (~€28M) (Water)
Management contract for water and wastewater systems in
Rialto, California– Length: 30 years– Cumul. Rev. $300M
(Water) United States
(excl. AK & HI)

‐ Engineering / Design & Construction :
New York
Construction of a facility to treat red mud generated by
industrial alumina production in partnership with the
Canadian company Orbite Aluminae, Inc (Waste) Rialto
Phoenix
Houston

Renewals
Engineering / Design & Construction
75


Appendix 5: Main contracts won or renewed since the beginning of 2012 in
Asia Pacific (4/4)
ORGANIC GROWTH
Operations and maintenance contract for
treated wastewater, Kyusetsu – Hiroshima
(Japan) – Length: 4 years  – Cumul. Rev.€26M
(Water)
Operations and management of the drinking
water service in the city of Nagpur (India) – Hebei
Iron & Korea
Length: 25 years – Cumul. Rev. €387M (Water) Steel
Contract extension with Hynix (Korea) – Length
6 years  – Ultrapure water – Cumul. Rev. €45M
China Japan
(Water) Changsha
Industrial contract – Water management and New Delhi
optimization of energy consumption at Hebei
Iron & Steel (China) – Length: 7 years – Cumul.
Rev. €43M (Water) Nagpur
Coles Supermarkets (Australia)– Collection,
disposal, treatment of non‐hazardous and India
organic waste streams – Length 3 years  –
Cumul. Rev. €47M (Waste)
‐ Engineering / Design & Construction :
Design, build and operation of a hazardous
waste treatment center in Changsha (Hunan
province in China) – Length: 25 years – Cumul.
Rev. more than €320M (Waste)
Design, build and operation of the new
wastewater treatment plant in Nilothi, west of
New Delhi – Length: 13 years – Cumul. Rev. Australia
€40M (Water)

Engineering / Design & Construction 76


Appendix 6: Environmental Services‐ Revenue in key countries
Var. at
% du CA constant
2012 scope & FX
2012/2011

France 38% +1.5% Lower recycled raw material prices (paper / cardboard /scrap metal)
Hazardous waste remains strong
Increase in waste‐to‐energy

Germany 12% ‐13.2% Lower recycled raw material prices and volumes
Competitive pressure on municipal and C&I contracts
United 19% ‐2.1% Unfavorable revenue base effect for PFI construction revenue
Kingdom Increase in incinerated volumes
Good performance in municipal collection
Reduction in landfill volumes
Competitive pressure in C&I
North 9% +1.1% US Solid waste divestment: closed November 20, 2012
America Good performance in hazardous waste
Asia 12% +8.0% Asia: lower revenue from recycled materials (paper) and impact of
Pacific contracts lost in 2011
Australia revenue increased by 11.4% due to increase in level of activity
and higher tariffs; increase in landfill tax

77


Appendix 7: Environmental Services revenue by activity
2011 2012

78


Appendix 8: Environmental Services revenue vs. Industrial Production

Industrial Production and Veolia Environmental Services Organic Growth
Y-Y Growth Rate (in %) vs. previous year's quarter

15%

10%

5%

0%

-5%

-10%

-15% Veolia Environmental Services Organic Growth
Industrial Production
-20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012

Weighted average industrial production indices for 4 key countries: France, U.K. (excl. PFIs), Germany, and North America
(excl. US solid waste and WTE); Includes SARP and SARPI
Sources : OECD Extract Database (up to November 2012); Q4 2012: recopied from November 2012 for France and Germany
in the absence of December 2012 figures 79


Appendix 9: Environmental Services – Evolution of raw
materials prices: paper, cardboard, metal

Evolution of raw materials prices (€/t)

180 500

160 450

400
140

350
120

300

100

250

80

200

60
150

40
100

20 50

0 0
jan apr jul 08 oct jan apr jul 09 oct jan apr jul 10 oct jan apr jul 11 oct jan apr jul 12 oct jan
08 08 08 09 09 09 10 10 10 11 11 11 12 12 2012 2013

Cardboard Paper Metals 80


Appendix 10: Gross investments by division

Growth
In €M Financial, New
Maintenance Industrial operating Total
including Δ financial
scope* assets
Water 192 412 415 162 1,181
Environmental Services 451 43 274 56 824
Energy Services 116 28 455 173 772
Others 153 26 305 21 505
Total 2012 912 509 1,449 412 3,282
Total 2011 1,094 466 1,207 367 3,134

* Including partial acquisitions between shareholders with no change in control

81


Appendix 11: Completed divestments

In €M

2011 2012

Industrial divestments 169 174
Financial divestments (1) 1,326 4,925

Increase in minority capital 49 ‐

Total divestments 1,544 5,099

(1) Including net financial debt of divested companies and partial divestments between non‐controlling interests with no
change in consolidation scope

82


Appendix 12‐1: Efficiency Plan

€208 M in gross savings in in 2012 from 669 projects*

* €191M net savings‐ breakdown on the basis of gross savings 83


Appendix 12‐2: Convergence 1
€142 M of gross cost savings in 2012 for 404 projects*

84
* Net impact of +€84M in adjusted operating cash flow and +€60M in operating income‐ Breakdown on the basis of gross savings


Appendix 13: Debt characteristics
Arrival at term on February 1, 2012 of the 2012 bond with nominal value of €671M
Early redemption of the U.S. private placement issued January 2003 on February 9, 2012 for an equivalent €350.2M
Refinancing by early redemption of a portion of bond issues maturing in 2013, 2014, 2017 and 2018 from March 19‐27,
2012 for €750M, while issuing a new bond with maturity in 2027 for the same amount
Issuance on June 26, 2012 of a new bond in the amount of RMB500M (€63M equivalent) maturing in June 2017
Early reversal of a portion of portfolio of euro‐denominated floating rate payer swaps (€3,075M notional amount and
€420M of final payments made by banks)
Early redemption of the entire USD bond maturing in 2015 for $50M in November 2012
Partial buyback in December 2012 of €341M of the euro‐denominated bond maturing in 2016, €256M of the euro‐
denominated bond maturing in 2017, $153M of the USD‐denominated bond maturing in 2018 (resulting in nominal bond
amounts of €559M, €744 M and $547M, respectively)
Group liquidity: €9.6B, including €4.0B in undrawn confirmed credit lines (without disruptive covenants)
Net Group liquidity: €5.6B

Net financial debt after hedges
Currency breakdown of gross debt after
at December 31, 2012 (*)
hedges at December 31, 2012
Others, 9%

Fixed rate: 98% AUD, 4%

PLN, 4%

Variable rate: 2 % HKD, 5%

RMB, 6%

EUR, 64%
GBP, 6%
(*) before non active caps at December 31, 2012
USD, 2%

85


Appendix 14: Net liquidity

In €M December December
31, 2011 31, 2012
Veolia Environnement
Syndicated loans 2,692.7 2,607.3
Bilateral credit lines 1,000.0 925.0
Lines of credit 483.0 473.7
Cash and cash equivalents 4,283.3 4,349.6
Total Veolia Environnement 8,459.0 8,355.6
Subsidiaries
Cash and cash equivalents 1,440.6 1,198.2
Total Subsidiaries 1,440.6 1,198,2

Total Group liquidity 9,899.6 9,553.8
Current liabilities and bank overdrafts 4,382.5 3,917.9
Total Group net liquidiity 5,517.1 5,635.9

86

2/27/2013

Appendix 15 : Management of liquidity
Stable liquidity between 2011 and 2012

Lines of liquidity refinanced

87


Appendix 16: Operating financial assets
In €M 2011 2012
published published

Balance sheet: current and non‐current operating financial assets 5,445 2,853
are recorded at amortized costs on the balance sheet with a
corresponding liability booked in Veolia’s consolidated net
financial debt
Income statement: interest payments are a sub‐line to the 384 329
revenue from ordinary activities “o/w revenue from operating
financial assets” and are included in operating cash flow before
changes in working capital
Cash flow statement (inflows): Principal repayments associated 441 371
with operating financial assets are not recognized in the income
statement, but recorded within ”cash flow from investing
activities” on the cash flow statement

Cash flow statement (outflows): “New operating financial assets” 364 412
which are the current year’s investments in operating financial
assets are also recorded within ”cash flow from investing
activities” on the cash flow statement

88


Appendix 17: Consolidated statement of financial position

In €M 2011 2012
Intangible assets (concessions) 4,629 4,519
Property, Plant & Equipment 8,488 6,838
Other non‐current assets 10,252 8,566
Operating financial assets (current and non‐current) 5,445 2,853
Cash & Cash equivalents 5,724 5,548
Other current assets 15,868 16,288
Total Assets 50,406 44,612
Capital (including minorities) 9,835 9,126
Financial debt (current and non‐current) 21,089 17,002
Other non‐current liabilities 4,184 3,720
Other current liabilities 15,298 14,764
Total Liabilities 50,406 44,612

89


Appendix 18: Definition du ROCE (1/3)
Net income from operations
ROCE =
Average capital employed during the
year
Net income from operations = Adjusted operating income + Share of net income of associates
– Adjusted income tax expense – Revenue from operating financial assets + Income tax expense allocated
to operating financial assets

Capital employed = Intangible assets and property, plant and equipment, net + Goodwill,
net of impairment + Investments in associates + Operating and non‐operating working capital
requirements, net + Net derivative instruments – Provisions + capital employed from assets and
liabilities held for sale, excluding discontinued operations

Average capital employed during the year: average of the opening and closing capital employed

Capital employed consists of capital “earning” a return:
equity capital, minority interests, net financial debt less
operating financial assets

90


Appendix 18: ROCE calculation (2/3)

In €M 2012

Adjusted operating income 1,194
Revenue from operating financial assets ‐329
Share of net income of associates 30
Adjusted income tax expense ‐213
Tax expense allocated to operating financial assets 69
Net income from operations 751
Average 2012 capital employed 14,780
Post‐tax ROCE 5.08%

91


Appendix 18: Evolution of pre‐tax ROCE by division (3/3)

Average capital Before tax ROCE
employed (in €M) (in %)

2011 * 2012 2011 * 2012

Water 5,594 5,620 10.6% 8.0%
Environmental Services 4,903 4,816 7.2% 6.5%
Energy Services 4,018 3,992 9.0% 6.9%

En M€
2011 * 2012

Capital employed published 14,935 14,625
at year end

* 2011 financial statements have been re‐presented in order to ensure the comparability of periods:
see Appendix 2
92


Appendix 19: Composition of Board of Directors (1/2)
Composition of Veolia Environnement’s Board of Directors
• Antoine Frérot, Chairman & CEO of Veolia Environnement
• Louis Schweitzer*, Senior Independent Director, Chairman of the Board of Astra Zeneca (UK)
• Jacques Aschenbroich*, CEO of Valéo
• Maryse Aulagnon*, Chairman and founder of Affine
• Daniel Bouton*, Chairman of DMJB Conseil, Senior Advisor of Rothschild & Cie Bank
• Caisse des dépôts et consignations, represented by Olivier Mareuse, CFO of Caisse des dépôts et consignations
• Pierre‐André de Chalendar*, Chairman and CEO of Saint‐Gobain
• Paul‐Louis Girardot*, Chairman of the Supervisory Board of Veolia Water
• Groupama SA*, represented by Georges Ralli, Chairman of Maison Lazard and Lazard Frères Gestion
• Groupe Industriel Marcel Dassault*, represented by Olivier Costa de Beauregard, Managing Director
• Marion Guillou*, Chairwoman of Agreenium
• Philippe Kourilsky, Professor at the Collège de France, member of the Academy of Sciences
• Serge Michel, Chairman of Soficot SAS
• Baudouin Prot*, Chairman of BNP Paribas
• Qatari Diar Real Estate Investment Company*, represented by Dr Mohd Alhamadi, Chief Corporate Improvement Officer
• Nathalie Rachou*, gérant de Topiary Finance Ltd
• Paolo Scaroni*, CEO de ENI (Italy)
• Censeur: Thierry Dassault, Chairman and Director of Keynectis SA, Deputy Chief Executive Officer and Member of the Supervisory Board of
Groupe Industriel Marcel Dassault SAS

Committees of the Board of Directors of Veolia Environnement
• Accounts and Audit Committee: D. Bouton (Chairman), J. Aschenbroich, P‐L. Girardot, O. Costa de Beauregard (for Groupe Industriel Marcel
Dassault), N. Rachou
• Nomination and Compensation Committee: S. Michel (Chairman), D. Bouton, L. Schweitzer, O. Costa de Beauregard (for Groupe Industriel
Marcel Dassault)
• Research, Innovation and Sustainable Development Committee: J. Aschenbroich (Chairman), P‐L. Girardot, P.‐A. de Chalendar, M. Guillou, T.
Dassault 93
* Independent Director


Appendix 19: Composition of Executive Committee (2/2)
Antoine Frérot
• Chairman & Chief Executive Officer

François Bertreau
• Senior Executive Vice‐President and Chief Operating Officer

Sylvain Boucher
• Country Delegate for France

Jean‐Michel Herrewyn
• Senior Executive Vice President in charge of the Water Division

Franck Lacroix
• Senior Executive Vice President in charge of the Energy Division

Jean‐Marie Lambert
• Senior Executive Vice‐President in charge of Human Resources

Jérôme Le Conte
• Senior Executive Vice President in charge of the Environmental Services Division

Helman le Pas de Sécheval
• Senior Executive Vice President, General Counsel

• Senior Executive Vice President and Chief Finance Officer
94


Investor Relations contact information
Ronald Wasylec, Senior Vice President, Investor Relations
Téléphone +33 1 71 75 12 23
e‐mail ronald.wasylec@veolia.com

Ariane de Lamaze
Téléphone +33 1 71 75 06 00
e‐mail ariane.de‐lamaze@veolia.com

38 Avenue Kléber – 75116 Paris ‐ France
Fax +33 1 71 75 10 12

Terri Anne Powers, Director of North American Investor Relations
200 East Randolph Street, Suite 7900
Chicago, IL 60601
Tel +1 (312) 552 2890
Fax +1 (312) 552 2866
e‐mail terri.powers@veoliaes.com

http://www.finance.veolia.com
95

2012 Annual Results

More Related Content

What's hot

Viewers also liked

Similar to 2012 Annual Results

More from ve-finance

2012 Annual Results