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Presentation q3 11 us

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Presentation q3 11 us

  1. 1. Key figures at September 30, 2011 Conference call on November 10, 2011 Pierre-François Riolacci Vice President in charge of finance
  2. 2. Disclaimer <ul><li>Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document contains &quot;forward-looking statements&quot; 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. </li></ul><ul><li>This document contains &quot;non-GAAP financial measures&quot; 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 &quot;non-GAAP financial measures&quot; are being communicated and made public in accordance with the exemption provided by Rule 100(c) of Regulation G </li></ul><ul><li>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. </li></ul>23/11/11
  3. 3. Table of Contents <ul><li>Impact of foreign exchange variation </li></ul><ul><li>Key figures for the nine months ending September 30, 2011 </li></ul><ul><li>Breakdown of revenue by division </li></ul><ul><li>Operating trends by division </li></ul><ul><li>Operational performance </li></ul><ul><li>Free Cash Flow (FCF) </li></ul><ul><li>Net financial debt at September 30, 2011 </li></ul><ul><li>Appendices </li></ul>23/11/11
  4. 4. Impact of FX on first 9 months of 2011 accounts <ul><li>Evolution of the euro 9M 2011 / 9M 2010 </li></ul><ul><li> Average rate Closing rate </li></ul><ul><ul><li>Australian dollar +7.7% +1.4% </li></ul></ul><ul><ul><li>Czech koruna +4.3% -0.6% </li></ul></ul><ul><ul><li>U.K. pound sterling -1.6% -0.8% </li></ul></ul><ul><ul><li>U.S dollar -6.9% +1.1% </li></ul></ul><ul><li>Impact on the company’s main figures </li></ul><ul><ul><li>Revenue -€40M </li></ul></ul><ul><ul><li>Adjusted operating cash flow - €6M </li></ul></ul><ul><ul><li>Adjusted operating income +€5M </li></ul></ul><ul><ul><li>Decline in net debt (at end of period rates) - €97M </li></ul></ul>23/11/11
  5. 5. Key figures for nine months ending September 30, 2011 (1) The financial statements of 2010 have been re-presented, in order to insure the comparability of periods: - for the reclassification into “net income from discontinued operations” of Proxiserve activities in the Water and Energy Services divisions, Norway operation s in the Environmental Services division and the activities in Netherlands in the Water division; - for the reclassification into “net income from discontinued operations” of the Transportation division as a whole (for the accounts in the nine months ending September 30, 2010 of: €4,286.4 million in revenue, €239.4 million in adjusted operating cash flow and €89.1 million in adjusted operating income) - for the reclassification into “continued operations” of the Renewable Energies business within the Energy Services division. (2) +3.7 % at constant scope and exchange rates (3) Variations compared to previously published figures for the nine months ending September 30. 2010 excluding the contribution of Veolia Transport 23/11/11 In €M Sept. 30, 2010 published Sept. 30, 2010 re-presented (1) Sept. 30, 2011  Current exchange rates  Constant exchange rates Revenue 25,467.9 20,684.9 23,963.4 +15.8% + 16% (2) Revenue excluding VTD 21,181.5 - 21,688.3 +2.4% (3) +2.6% (3) Adjusted operating cash flow 2,665.6 2,368.6 2,391.2 +1.0% +1.2% Adjusted operating cash flow margin 10.5% 11.5% 10.0% Adjusted operating cash flow excluding VTD 2,426.2 - 2,266.3 -6.6% (3) -6.3% (3) Adjusted operating income 1,495.6 1,368.7 1,250.9 -8.6% -9.0% Adjusted operating income margin 5.9% 6.6% 5.2% Adjusted operating income excluding VTD 1,406.5 - 1,230.6 -12.5% (3) -12.9% (3) Operating income 1,566.4 1,459.9 568.0 Free Cash Flow (220) (220) +58.0 Net financial debt 15,767 15,767 15,045
  6. 6. Breakdown of revenue by division (1) The financial statements of 2010 have been re-presented, in order to ensure the comparability of periods: - for the reclassification into “net income from discontinued operations” of Proxiserve activities in the Water and Energy Services divisions, Norway operation s in the Environmental Services division and the activities in Netherlands in the Water division; - for the reclassification into “net income from discontinued operations” of the Transportation division as a whole (for the accounts in the nine months ending September 30, 2010 of: €4,286.4 million in revenue, €239.4 million in adjusted operating cash flow and €89.1 million in adjusted operating income) - for the reclassification into “continued operations” of the Renewable Energies business within the Energy Services division. (2) Veolia Transdev revenue for the period ending September 30, 2011 is accounted for as a scope effect Nine months 2010 re-presented (1) Nine months 2011 20,685 in €M 23,963 23/11/11  current FX rates  constant FX rates  excl. scope & FX Water +4.5% +4.7% +2.1% Environ. Services +6.1% +6.6% +7.0% Energy Services +3.7% +3.5% +2.1% Transport (2) 100% - - Total Company +15.8% +16.0% +3.7%
  7. 7. WATER <ul><li>Operations: Revenue increased 4.5% (+1.7% at constant scope and exchange rates) </li></ul><ul><ul><li>France: slight decline in revenue in the context of contractual erosion (notably the SEDIF), and lower volumes sold during the summer, and despite a favorable price effect </li></ul></ul><ul><ul><li>Outside France: Revenue grew 8.2%: good performance in Europe (Germany, Central and Eastern Europe due to contracts purchased from United Utilities) and in Asia (China and Japan) </li></ul></ul><ul><li>Technologies and Networks: Revenue increased 4.5% (+3.0% at constant scope and exchange rates) </li></ul><ul><ul><li>Continued declines in municipal (including the scheduled completion of the large Marafiq/ Fujairah / Ras Laffan contracts), offset by the rebound in D&B and Industrial Solutions, and the Hong Kong contract (€108M in revenue) </li></ul></ul>Revenue nine months ending September 30, 2011 (€M) * The financial statements of 2010 have been re-presented, in order to ensure the comparability of periods for the Netherlands and Proxiserve activities 8,885 9 , 284 23/11/11 +4.5% +4.5% +4.5%
  8. 8. ENVIRONMENTAL SERVICES <ul><li>France: organic growth of +6.7%: volumes increased, notably in the treatment of hazardous waste, continued high level of recycled raw materials prices </li></ul><ul><li>UK: organic growth of +9.9% due in particular to PFI contracts </li></ul><ul><li>Germany: Organic growth of +8.8% due to higher paper prices </li></ul><ul><li>USA: progression of solid and hazardous waste activity, offset by the negative impact of Marine Services </li></ul><ul><li>Recyled materials price and volumes +2.9 % </li></ul><ul><li>Waste volumes +1.6% </li></ul><ul><li>Price increases +0.9 % </li></ul><ul><li>Other +1.6% </li></ul><ul><li>Foreign exchange -0.5 % </li></ul><ul><li>Scope - 0.4 % </li></ul>* The financial statements of 2010 have been re-presented, in order to ensure the comparability of periods for the Norwegian activities 11/23/11 Revenue growth by quarter 6,906 7,328 +7.0% constant scope & FX Revenue nine months ending September 30, 2011 (€M) Revenue variation 9M2011 / 9M2010 : +6.1% In €M 2010 2011 Variation At constant scope and FX 1 st quarter 2,113 2,361 +11.8% +10.2% 2 nd quarter 2,401 2,533 +5.5% +7.3% 3 rd quarter 2,392 2,434 +1.7% +3.7% 9 months 6,906 7,328 +6.1% +7.0%
  9. 9. ENERGY SERVICES <ul><li>Revenue increased 3.7% (+2.1% at constant scope and exchange rates) to €5,076 M </li></ul><ul><li>Higher energy prices </li></ul><ul><ul><li>Impact of roughly €156 M vs. September 2010 </li></ul></ul><ul><li>Unfavorable climate effect, principally in France and in Central Europe </li></ul><ul><ul><li>Impact of roughly - €128 M vs. September 2010 </li></ul></ul><ul><li>Difficulties in Spain and Italy: </li></ul><ul><ul><li>Halt in solar, persistent difficulties in installation, challenging commercial renegotiations </li></ul></ul>Revenue nine months ending September 30, 2011 (€M) * The financial statements of 2010 have been re-presented, in order to ensure the comparability of periods for the Germany and Proxiserve activities 4,894 5,076 11/23/11
  10. 10. TRANSPORT <ul><li>Following the combination of Veolia Transport and Transdev, consolidation of the new entity, proportionally integrated at 50% since March 3, 2011 : </li></ul><ul><ul><li>€ 2,275M in revenue from March to September 2011 (of which Veolia Transport €1,629M and Transdev €646M) </li></ul></ul><ul><ul><li>Excluding the scope effect related to the VTD combination (- €1932M), revenue declined 1.9% </li></ul></ul><ul><li>On a pro forma basis* (9 months VTD 2010/2011), the new entity posted a revenue decline of 1.2%: </li></ul><ul><ul><li>Of which -4.3% primarily due to divestments (RATP) </li></ul></ul><ul><ul><li>Of which +3.4% due to organic growth primarily related to new contracts in France, Australia and the United States </li></ul></ul>11/23/11 * 9 months of Veolia Transdev at 100%
  11. 11. OPERATIONAL PERFORMANCE <ul><ul><li>Adjusted operating cash flow increased 1.2% at constant exchange rates to €2,391.2M versus re-presented €2,368.6M for the nine months ending September 30, 2010. Excluding Veolia Transdev, adjusted operating cash flow would have declined 6.3% at constant exchange rates compared to previously published figures at September 30, 2010. </li></ul></ul><ul><ul><li>Adjusted operating income declined 8.6% to €1,250.9M versus re-presented €1,368.7M for the nine months ending September 30, 2010. Excluding Transport activities, adjusted operating income would have declined 12.9% at constant exchange rates compared to previously published figures at September 30, 2010. </li></ul></ul>11/23/11
  12. 12. Positive Free Cash Flow: + €58M versus -€220M for the period ending September 30, 2010 <ul><ul><li>Adjusted operating cash flow of €2,391M increased 1.2% at constant exchange rates </li></ul></ul><ul><ul><ul><li>Of which €125M related to the new entity Veolia Transdev (presented as external growth ), and representing a variation of -6.3% at constant exchange rates excluding VTD vs. published Sept. 30, 2010 figures </li></ul></ul></ul><ul><ul><li>Favorable seasonal evolution of working capital in Q3 (+ €116M), but </li></ul></ul><ul><ul><li>-€542M cumulative at the end of September </li></ul></ul><ul><ul><li>Controlled gross investments : €1,846M </li></ul></ul><ul><ul><li>€ 1,169M of divestments , of which: </li></ul></ul><ul><ul><ul><li>Impact of Veolia Transdev combination: €540M </li></ul></ul></ul><ul><ul><ul><li>Divestment of Norway sorting and recycling activities </li></ul></ul></ul><ul><ul><ul><li>Divestment of Solid Waste activities in Belgium </li></ul></ul></ul>11/23/11
  13. 13. Net financial debt In €M 11/23/11
  14. 14. Appendix 1: Main 9M 2010 re-presented figures IFRS5 (1) <ul><li>(a) To ensure the comparability of period, the first nine months 2010 financial statements have been re-presented to include: </li></ul><ul><li>- the impact of the reclassification into “net income from discontinued operations” of “Proxiserve” activities in the Water and Energy Services division, Norway operations in the Environmental Services division and the activities in Netherlands in the Water division; </li></ul><ul><li>- the impact of the reclassification into ‘continuing operations’ of the renewable energies activities in the Energy Services division. </li></ul><ul><li>(b) To ensure the comparability of period, the 2010 financial statements have been re-presented to include the impact of the reclassification into “net income from discontinued operations” of the Transportation Division as a whole. </li></ul><ul><li>The financial statements for the first nine months of 2010 have not been re-presented to adjust for the fraud discovered during the second quarter of 2011 in the Marine Services business in the United States (a unit of the Environmental Services Division), as the impact during the period was not significant. </li></ul><ul><li>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 (including the change in receivables and other financial assets), (iv) net financial interest paid and (v) tax paid . </li></ul>23/11/11 (€M) 9M 2010 published IFRS5 Adjustment (a) IFRS5 Adjustment VTD (b) 9M 2010 Re-presented (1)(2) Revenue 25,467.9 (496.6) (4,286.4) 20,684.9 Adjusted operating cash flow 2,665.6 (57.6) (239.4) 2,368.6 Adjusted operating income 1,495.6 (37.8) (89.1) 1,368.7 Free Cash Flow (3) (220.0) (220.0)
  15. 15. Appendix 2: Quarterly revenue (1) (a) To ensure the comparability of period, the first nine months 2010 financial statements have been re-presented to include: - the impact of the reclassification into “net income from discontinued operations” of “Proxiserve” activities in the Water and Energy Services division, Norway operations in the Environmental Services division and the activities in Netherlands in the Water division; - the impact of the reclassification into ‘continuing operations’ of the renewable energies activities in the Energy Services division. (b) To ensure the comparability of period, the 2010 financial statements have been re-presented to include the impact of the reclassification into “net income from discontinued operations” of the Transportation Division as a whole. +3.7% 23,963 20,685 +2.3% 7,814 6,713 +5.5% 8,061 6,712 +3.4% 8,088 7,260 Company +16.4% na +2.0% +3.7% +1.2% Δ constant scope & FX 958 1,283 2,434 3,139 2011 - 1,260 2,392 3,061 2010 Re-presented (1) 3 rd quarter +15.8% +20.1% +11.4% Variation at current FX na 2,275 - na 983 - na 334 - Transport +2.1% 5,076 4,894 +0.2% 1,386 1,370 +3.3% 2,407 2,264 Energy Services +7.0% 7,328 6,906 +7.3% 2,533 2,401 +10.2% 2,361 2,113 Environmental Services +2.1% 9,284 8,885 +6.4% 3,159 2,941 -1.5% 2,986 2,883 Water Δ constant scope & FX 2011 2010 Re-presented (1) Δ constant scope & FX 2011 2010 Re-presented (1) Δ constant scope & FX 2011 2010 Re-presented (1) Nine months ending September 30 2 nd quarter 1 st quarter
  16. 16. Appendix 3: Evolution of recycled raw materials prices 23/11/11
  17. 17. Investor relations contact information <ul><li>Ronald Wasylec, Directeur des Relations avec les Investisseurs et Actionnaires individuels </li></ul><ul><li>Téléphone +33 1 71 75 12 23 </li></ul><ul><li>e-mail [email_address] </li></ul><ul><li>Ariane de Lamaze </li></ul><ul><li>Téléphone +33 1 71 75 06 00 </li></ul><ul><li>e-mail ar i ane.de-lamaze @veolia.com </li></ul><ul><li>38 Avenue Kléber – 75116 Paris - France </li></ul><ul><li>Fax +33 1 71 75 10 12 </li></ul><ul><li>Terri Anne Powers, Director of North American Investor Relations </li></ul><ul><li>200 East Randolph Street </li></ul><ul><li>Suite 7900 </li></ul><ul><li>Chicago, IL 60601 </li></ul><ul><li>Tel +1 (312) 552 2890 </li></ul><ul><li>Fax +1 (312) 552 2866 </li></ul><ul><li>e-mail [email_address] </li></ul>http://www.finance.veolia.com 23/11/11

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