Test institut-montparnasse


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Test institut-montparnasse

  1. 1. Acquisition of Sulo,n°2 German waste company April 27, 2007
  2. 2. Investor Relations – April 2007 Disclaimer Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document contains "forward-looking statements" within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risks associated with conducting business in some countries outside of Western Europe, the United States and Canada, the risk that changes in energy prices and taxes may reduce Veolia Environnements profits, the risk that we may make investments in projects without being able to obtain the required approvals for the project, the risk that governmental authorities could terminate or modify some of Veolia Environnements contracts, the risk that our long-term contracts may limit our capacity to quickly and effectively react to general economic changes affecting our performance under those contracts, the risk that Veolia Environnements compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnements financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, as well as the risks described in the documents Veolia Environnement has filed with the U.S. Securities and Exchange Commission. Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward-looking statements. Investors and security holders may obtain a free copy of documents filed by Veolia Environnement with the U.S. Securities and Exchange Commission from Veolia Environnement. This document contains "non-GAAP financial measures" within the meaning of Regulation G adopted by the U.S. Securities and Exchange Commission under the U.S. Sarbanes-Oxley Act of 2002. These "non-GAAP financial measures" are being communicated and made public in accordance with the exemption provided by Rule 100(c) of Regulation G. 2Veolia Environnement
  3. 3. Investor Relations – April 2007 Strategic rationale Core business in a consolidating and fast-transforming market Complementary geographical footprint in Europe Veolia Environmental Services becomes undisputed No1 player in European waste management Strengthens Veolia Environnement’s European leadership in the recycling market First-class management team Accelerate opportunities of PPP development in Germany Unrivalled platform for further growth in Central and Eastern Europe 3Veolia Environnement
  4. 4. Investor Relations – April 2007 The German waste sector: why now? — Recent evolution makes it an attractive development market Major evolution due to changes in market structure and regulation Introduction of tender offers in Municipal segment. Opening of DS system resulting in the emergence of competitors to DSD TASi legislation inducing strong requirements for sorting/treatment capacities Attractive “new” German market Regulatory and contractual maturity and transparency Improved visibility of prices and margins Growing importance of sorting/recycling and valorisation processes Market consolidation underway 4Veolia Environnement
  5. 5. Investor Relations – April 2007 The German waste sector — Key value drivers New regulation Growing demand for (TASi, Dual System, sorting & recycling municipal tenders) facilities Valorisation of Demand for secondary raw integrated solutions materials and RDF German waste sector Requirements for value drivers Acceleration of PPP value-added initiatives services Requirements for Market scale and national consolidation footprint 5Veolia Environnement
  6. 6. Investor Relations – April 2007 Sulo – No2 operator in the German waste management sector €1.3 billion revenues in 2006 out of which €186 million in environmental technologies Environmental Services revenue breakdown Municipal and Industrial nationwide waste management activity Other 6% No1 player in Municipal segment Intl 5% No2 player in Commercial & Industrial Plastic 3% Commercial & segment Industrial 49% No1 operator in the Dual System market Dual System/ Recycling 18% Leadership on the Recovered Paper and Plastic markets Municipal Strategically located sorting/recycling 19% facilities 9 Public Private Partnerships Employs 7,700 employees 6Veolia Environnement
  7. 7. Investor Relations – April 2007 The German waste sector — Growth opportunities from a still fragmented and public-owned market “private” market structure Private market size of around €12 billion Remondis 18% A very fragmented market 11% SULO 9% Alba €15.1bn Room for further consolidation Top 4-8 A third of municipal market still managed by public-owned Others companies Top 3 = 38% market share 7Veolia Environnement
  8. 8. Investor Relations – April 2007 Sulo - A growing player in Central & Eastern European and Baltic markets More than €55 million revenues in 2006 Leading waste services provider in Central & Eastern Europe No4 in Poland Top 6 in Czech Republic Major operator in the Baltic countries No1 in Estonia No4 Lithuania Top 6 in Latvia Track record of successful profitable growth: CAGR 2002-2006: +15% per year Strong platform for further development 8Veolia Environnement
  9. 9. Investor Relations – April 2007 Strategic benefits - Combining Eastern European franchises to capture forthcoming growth Strong combined activities in Veolia Environmental Services/ Eastern Europe Sulo activities in Europe Combined revenues of around €200 million High development potential market Veolia Environmental Services + Sulo combined forces can sustain double digit growth in this area Veolia ES main activities Veolia ES/Sulo activities Sulo main activities 9Veolia Environnement
  10. 10. Investor Relations – April 2007 Strategic benefits – Integration of recycling and growth opportunities with German municipalities Recycling and secondary materials market is increasing globally Strong increase in demand for recovered materials in Asia Scale driving commercialisation opportunities and prices Identified opportunity on paper trade Double Veolia Environnement’s existing tonnage Deliver integrated services in France, Germany, UK and rest of Europe Expected strong development of Public Private Partnerships Increasing demand for efficiency and value-added services Additional growth opportunities with German municipalities Leverage Veolia Environnement ’s breadth of expertise on Stadtwerke Potential for comprehensive value proposition (water, energy services, waste management, public transport) 10Veolia Environnement
  11. 11. Investor Relations – April 2007 Key terms of the transaction Enterprise value of €1,450 million Including financial net debt and estimated after-tax liabilities of approximately €950 million 8.0x implied EV/2007 EBITDA including associates Subject to regulatory approval by EU competition authorities (1) Based on 2006 consolidated EBITDA adjusted for associates 11Veolia Environnement
  12. 12. Investor Relations – April 2007 Financial impact The transaction meets Veolia Environnement’s investment criteria: Significant value creation: IRR at more than 3% above WACC on base case scenario Earnings accretive from year 1 Potential upside above base case of €200/300 million additional value creation Limited impact on credit ratios 12Veolia Environnement
  13. 13. Investor Relations – April 2007 2007 estimated Veolia Environnemental Services’ revenue: a well balance geographic revenue breakdown 2007 estimated revenue (Waste 2007 proforma estimated revenue Management) before Sulo’s (Waste Management) after Sulo’s acquisition acquisition* ROW 1% ROW 1% Asia Pacific 6% Asia Pacific 7% America 17% America 20% France 39% France 33% Rest of Europe 9% Rest of Europe 10% Germany 2% Germany 16% United Kingdom 18% United Kingdom 21% (*) Sulo’s contribution in revenue taken into account for 12 months 13Veolia Environnement
  14. 14. Investor Relations – April 2007 Veolia Environnement: presence in Germany multiplied by 3 in 4 years Tra nsport 16% W a t er ( 1 ) Energy 39% Transport 24% 2% Energy 5% W at er 59% W ast e 12% W a st e 43% 2003 2007 proforma Total revenue: €1,193m Total revenue:€3,391m (1) Water, (including BVAG) 14Veolia Environnement
  15. 15. Investor Relations – April 2007 2007 estimated Veolia Environnement revenue by geographic region : a significant reinforcement in key strategic markets 2007 estimated VE Group revenue 2007 proforma estimated VE Group before Sulo’s acquisition revenue after Sulo’s acquisition* ROW 3% ROW 3% Asia Pacific 7% Asia Pacific 6% America 10% America 11% France 45% France 44%Rest of Europe 19% Rest of Europe 18% Germany 10% Germany 6% United Kingdom 9% United Kingdom 9% (*) Sulo’s contribution in revenue taken into account for 12 months 15Veolia Environnement
  16. 16. Investor Relations – April 2007 Glossary Term Definition C&I Commercial and Industrial DSD Duales System Deutschland: a corporation owned by KKR in which the licensees pay fees to the DSD to be in return exempted from having to provide a recycling system for their packaging waste MBT Mechanical-biological pre-treatment: a way of treating waste pre-disposal PET Polyethylene Terephthalate PPP Public Private Partnership: a business model where a municipality and a private company form a joint holding company, majority owned by the municipality but operationally controlled by the private partner RDF Refuse derived fuel TASi Technische Anleitung Siedlungsabfall: ordinance on the Environmentally Sound Landfilling of Municipal Waste and on Biological Treatment Plants, which states that no waste may be disposed of in landfill sites without adequate pre-treatment from 2005 Onward URRC United Resource Recovery Corporation, patented PET recycling process technology 16Veolia Environnement
  17. 17. Investor Relations – April 2007 Investor Relations contact information Nathalie PINON, Head of Investor Relations and Financial Communication 38 Avenue Kléber – 75116 Paris - France Telephone +33 1 71 75 01 67 Fax +33 1 71 75 10 12 e-mail nathalie.pinon@veolia.com Brian SULLIVAN, Vice President, US Investor Relations 700 E. Butterfield Road -Suite 201 Lombard, IL 60148 - USA Telephone +1 (630) 371 2749 Fax +1 (630) 282 0423 e-mail brian.sullivan@veoliaes.com Web site http://www.veolia-finance.com 17Veolia Environnement