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2009-08-06
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FIRST HALF 2009 RESULTS
2
Investor Relations – First Half 2009 Results – 06.08.09
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.
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.
3
Table of Contents
Key events
First half 2009 results
2009 objectives
Continued development of the Group
Investor Relations – First Half 2009 Results – 06.08.09
4
Key events
Contract awards and renewals
Strategic transaction: merger of Veolia Transport and
Transdev
We continue to develop
the Group
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
Net investments: €1,133m, 39% lower at June 30, 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
We maintain our
commitments in 2009
Group operating cash flow:
€1,978m
Operating cash flow, ex Waste: up 3.7% at constant FX rates
compared to H1 2008
Waste’s operating cash flow: down 22.4% at constant FX
rates compared to H1 2008
Investor Relations – First Half 2009 Results – 06.08.09
5
€m H1 2008
Restated (1) H1 2009 current
FX rates
constant
FX rates
Revenue 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
holders of the parent
497.9 276.5 -44.5% -
Net income attributable to equity holders of
the parent
500.5 220.3 -56.0% -
Net financial debt 16,332 16,827
First half 2009 key figures
(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
Investor Relations – First Half 2009 Results – 06.08.09
6
Improvement in the first half 2009 as compared with
the second half 2008
Operating cash flow margin
Net recurring income attributable to equity
holders of the parent
Operating cash flow(1) – Net Investments (2)
H2 2008 Restated(3)
H1 2009
€1,976m
10.8%
€1,978m
11.3%
€175m €276m
€303m €843m
+58.0%
Ns
+50bp
Var.
(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
Investor Relations – First Half 2009 Results – 06.08.09
7
First half 2009 results
2010 Efficiency Plan
Asset disposal program
2009 objectives
First half 2009 results and 2009 objectives
Investor Relations – First Half 2009 Results – 06.08.09
8
€m(180)17,566 (178) 219 17,427
-1.0% +1.2% -1.0% -0.8%
H1 2008
restated (1)
Internal
growth
External
growth
FX impact H1 2009
Revenue
(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
Investor Relations – First Half 2009 Results – 06.08.09
9
H1 2009
Breakdown of revenue by geographic zone
7,290
6,455
1,435
1,3001,086
6,966
6,211
1,611
1,3151,324
-4.4%
-3.8%
+12.3%
+1.8%
+21.1%
-1.0%
-4.4%
+1.8%
-1.8%
+2.5%
+21.8%
current
FX rates
constant
FX rates
VE Group
Exc. Scope
and FX
-5.3%
+0.7%
-3.2%
+0.1%
+19.0%
+0.2%-0.8%
■ France
■ Europe ex France
■ North America
■ Asia/Pacific
■ Rest of the world
H1 2008
restated (1)
€m17,566 17,427
(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
Investor Relations – First Half 2009 Results – 06.08.09
10
Breakdown of revenue by division
5,988
5,015
3,676
2,887
6,235
4,502
3,717
2,973
H1 2008
restated (1)
H1 2009
€m
+4.1%
-10.2%
+1.1%
+3.0%
-1.0%
current
FX rates
constant
FX rates
VE Group
Exc. Scope
and FX
+0.2%-0.8%
■ Water
■ Waste
■ Energy services
■ Transportation
+3.7%
-8.9%
+3.7%
+4.4%
+3.0%
-10.3%
+2.3%
+2.4%
17,566 17,427
(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
Investor Relations – First Half 2009 Results – 06.08.09
11
Revenue: Veolia Water
France: internal growth declined 0.2%
despite indexing, because of a small
contraction in volumes (-1%) and the
marked slowdown in engineering works
businesses
Outside France, strong internal growth of
4.8% at constant scope and exchange rates
— North America (+9.5% at constant scope and
exchange rates) due to the start-up of the new
Milwaukee contract and the engineering works
businesses
— Asia (+13.8% constant scope and exchange
rates) due in particular to industrial
operations in Korea
Veolia Water Solutions and Technologies:
internal growth of 12.7% in H1 despite a
flattening out in the second quarter of 2009
H1 08 H1 09
+6.2%
+3.0%
First half revenue (€m)
Works and
Engineering &
Construction
Operations3,895
2,093
5,988 6,235
4,013
2,222
+4.1%
Investor Relations – First Half 2009 Results – 06.08.09
12
Revenue: Veolia Environmental Services
(Waste management division)
Significant decline in second
quarter 2009 compared to second
quarter 2008 (-12.1%) due to:
— Second quarter 2008 historical high
raw material prices
— A marked decrease of industrial
services activities compared to 2008
First half 2009
— Decrease of recycled raw material
price: - 40% to -50%
— Decrease of volumes in industrial
waste: – 10%
Quarterly revenue (€m)
Q1 09 Q2 09
2,188 2,314+5.7%
H1 08 H1 09
First half revenue (€m)
5,0154,502
-10.2%
Investor Relations – First Half 2009 Results – 06.08.09
13
Veolia Environmental Services (Waste management
division): 10.2% decline in revenue in H1 2009 / H1 2008
Main 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%
Investor Relations – First Half 2009 Results – 06.08.09
14
Revenue: Veolia Energy
Negative €97m FX impact mainly due
to Eastern European currencies
Further rise in energy prices
(impact: + €57m), mainly during the
first quarter
More favorable weather conditions in
the first half of 2009, mainly in
France (impact: + €48m)
First half revenue (€m)
France
Outside France
H1 08 H1 09
3,676 3,717
+ 4.6%
+ 1.1%
-2.4%
1,866 1,951
1,810 1,766
Investor Relations – First Half 2009 Results – 06.08.09
15
Revenue: Veolia Transport
4% revenue growth in France
— Bordeaux contract ending on 5/1/2009
— New contracts won: Royan, Epernay,
Montceau-les-Mines
Strong growth in North America
(+4.1% at constant scope and FX
rates) supported by the
— Taxi business
— Transit business
Q1 09 Q2 09
1,447 1,526+5.5%
First half revenue (€m)
H1 08 H1 09
2,887 2,973+3.0%
Quarterly revenue (€m)
Investor Relations – First Half 2009 Results – 06.08.09
16
(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
Operating cash flow (1)
€m H1 2008
Restated (2) H1 2009 current
FX rates
constant
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%
Investor Relations – First Half 2009 Results – 06.08.09
17
Operating cash flow margin
€m
FY 2008
margin
restated (1)
H1 2008
margin
restated (1)
H1 2009
margin
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%
Operating cash flow margins
(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
Investor Relations – First Half 2009 Results – 06.08.09
18
Confirmation of 2010 Efficiency Plan
Objectives
— €180m in recurring savings in 2009
— €220m in recurring savings in 2010
Total: €400m in recurring savings
Achievements
— Gains on operating cash flow: €101m in the
first half of 2009
* excluding Veolia Waste’s plan to adapt to
the business environment
Purchases
Operations
Support
functions
Assets
Water
Energy
Waste
Transport
31
34
21
15
Savings in
H1 2009
37
21
25*
15
€101m €180m
45
65
50
20
2009
Objectives
60
41
49*
30
Other 3 -
€m
Investor Relations – First Half 2009 Results – 06.08.09
19
Veolia Environmental Services (Waste management
division): Impact of cost-cutting plans
2010 Efficiency Plan
Achievement in the first half of 2009
— Impact on operating cash flow: €25m
2009 objective maintained
— Impact on operating cash flow: €49m
2009 Plan to Adapt to the Business
Environment
Achievement in the first half of 2009
— Decline in net costs: €45m
2009 objective maintained
— Net costs to be lowered by €100m
Investor Relations – First Half 2009 Results – 06.08.09
20
€m H1 2008
restated (1) H1 2009 current
FX rates
constant
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%
Recurring operating income by division
(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
Investor Relations – First Half 2009 Results – 06.08.09
21
H1 2009H1 2008 restated (1)
From operating income to net income
€m Recurring Non-
recurring
Total Recurring Non-
recurring
Total
Operating income 1,287 5 1,292 1,001 - 1,001
Cost 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 - 6
Net income from discontinued
operations
- 1 1 - (56) (56)
Net income attributable to minority
interests(147) (3) (150) (126) - (126)
Net 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
Investor Relations – First Half 2009 Results – 06.08.09
22
Cost of borrowing
€mH1 2008
Restated (1) H1 2009H1 2009 /
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
Investor Relations – First Half 2009 Results – 06.08.09
23
Net debt
Net financial debt
Debt
— Bond debt
— Average maturity of net debt
Liquidity
— Gross liquidity
— Net liquidity
Objective
— Net debt / Operating cash flow plus repayment of
Operating financial assets
68%
9.3 years 9.5 years
€7.7bn €9.6bn
€4.0bn €6.0bn
79%
12/31/2008 06/30/2009
€16,528m €16,827m
between 3.5 and 4 x
Investor Relations – First Half 2009 Results – 06.08.09
24
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
(ex operating financial assets)
475 360
New operating financial assets 116 127
New projects 819 319
Gross 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
Investor Relations – First Half 2009 Results – 06.08.09
25
Asset disposal plan in line with forecasts
Disposals booked at June 30, 2009 €268m
Disposals underway (in enterprise value) €545m
— VPNM * €120m
— Montenay International * €330m ***
— Veolia Cargo ** €95m
Total divestments: booked and underway €813m
Reminder of 2009 objective €1,000m
* Signed agreement, closing in process
** Firm offer received
*** $450m
Valuation
multiple:
11 x 2008 EBITDA
Investor Relations – First Half 2009 Results – 06.08.09
26
Achievements are in line with commitments taken
Cost-cutting
— 2010 Efficiency Plan
— Plan to adapt to business
environment (Veolia Waste)
Net investments kept in check
Asset disposal program
— Achievement
— Price obtained
2009 commitments
45% decline
(i.e. - €1,600m)
€1,000m
Maximization
of value
Situation at June 30, 2009
€268mbooked
€545mcommitted
11 x 2008 EBITDA
39% decline
(i.e. - €724m)
€180m
€100m
€101m
€45m *
i.e. 56%
i.e. 45%
i.e. 81.3%
Ex divestments announced
but not yet finalized
* After implementation costs of around €10m
Investor Relations – First Half 2009 Results – 06.08.09
27
Operating cash flow – net investments(1)
Operating cash flow
–
net investments(1)
€843m(2)€294m
June 30,
2009
June 30,
2008
Disposals announced but not yet finalized €545m
(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
Operating cash flow – net investments(1)
2009 objective ~€2,000m(3)
Investor Relations – First Half 2009 Results – 06.08.09
28
2009 objectives confirmed
Positive free cash flow (1) after payment of the dividend
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
How?
Investor Relations – First Half 2009 Results – 06.08.09
CONTINUED DEVELOPMENT OF THE GROUP
30
Continued commercial success
Veolia Water
Contract to build & operate a wastewater
treatment plant in Chartres (France) (Cumulative revenue: €156m over 20 years)
Contract for the management of Spain’s
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 Environmental Services
Waste management and recycling contract
awarded by the Merseyside Waste Disposal
Authority (United Kingdom) (Cumulative
revenue: €719m over 20 years)
Veolia Energy
Mende (France) heating network
Contract to build and operate the energy
generation plant and district heating and
cooling system for Barcelona’s Zona Franca
(Spain) (Cumulative revenue: €600m over 30
years)
Veolia Transport
United States: Houston (light rail)
(Cumulative revenue: $1.5bn over 35 years),
New Orleans (multi-modal)
Management of public transit in Greater
Rabat (Morocco)
Investor Relations – First Half 2009 Results – 06.08.09
31
Strategic merger underway
Proposed merger
Investor Relations – First Half 2009 Results – 06.08.09
32
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
Proposed merger of Veolia Transport and Transdev
Key Guiding Principles
Investor Relations – First Half 2009 Results – 06.08.09
33
Proposed merger of Veolia Transport and Transdev
Strong Geographical presence in France
TRANSDEV
Saint-Brieuc
Nantes
Moulins
Limoges
Aurillac
Orléans
Auxerre
Sens
Vienne
Combining a portfolio of large cities in urban transportation
Very limited overlap in interurban transportation
> 200
150 to 200
100 to 150
50 to 100
< 50
1,200,000
600,000
120,000
Interurban
Number of vehicles
Urban
UTP Population
Ile-de-France
MartiniqueLa Réunion
VEOLIA TRANSPORT
Joint exploitation
Veolia-Keolis Source: UTP, Company (2007-2008-2009)
La Réunion
Ile-de-France
St-Fargeau Ponthierry
Nemours
FontainebleauMelun
SénartEvryRambouillet
ArgenteuilSt-GermainConflans
Les MureauxCarrières-ss-Poissy
Poissy Le VesinetLa Celle-st-Cloud
Mayotte Nouvelle Calédonie
Nouméa
DunkerqueCalais
Dieppe
Le Havre BeauvaisCompiègne
Soissons
Epernay
VerdunSaint-Avold
Lunéville
Bolbec
Saint-Lô
GranvilleFlers
BernayPont-Audemer
VernonMéru
Les Andélys
Saint-DiéEpinalRemiremont
Chaumont
Luxeuil-Lès-Bains
Thonon-les-Bains
Saint-Dizier
Bar-Le-Duc
Neuves-Maisons
Rouen
Nancy
Nogent-Le-Rotrou
Vendôme
Sablé-sur-Sarthe
Pontivy
Vannes
Fougères
St-Brévin
Saumur
Chinon
Amboise
Laval
Vierzon
BourgesIssoudun
Roanne Villefranche-sur-Saône
ChambérySaint-Etienne
Annonay
Valence
Tulle
Brives-la-Gaillarde
CognacRoyan
Arcachon
Libourne
Béziers
MentonNice
Grasse
CannesFréjus
Manosque
Vitrolles
Istres / Fos-sur-Mer
Salon-de-Provence Aix-en-
ProvenceGardanneAubagne
Gréoux-Lès-bains
> 200
150 to 200
100 to 150
50 to 100
< 50
1,200,000
600,000
120,000
Number of vehiclesUTP Population
InterurbanUrban
FoixToulonLa Ciotat
Perigueux
Amiens
Investor Relations – First Half 2009 Results – 06.08.09
34
Proposed merger of Veolia Transport and Transdev: Enlarged Global
Growth 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
Investor Relations – First Half 2009 Results – 06.08.09
35
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
Proposed merger of Veolia Transport and Transdev
Complementary expertise in modal offerings
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Key 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 negotiationsSources: Company Annual reports
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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
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Proposed merger of Veolia Transport and Transdev
Illustrative 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
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Conclusion
Results consistent with our objectives
Confirmation of our 2009 commitments
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APPENDICES
41
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
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Investor Relations – First Half 2009 Results – 06.08.09
Appendix 1: Cash flow statement
(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)
€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)
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Appendix 2: Recurring operating income margin
€mH1 2008
restated (1) H1 2009
H1 2008
margin
restated
H1 2009
margin
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%
Recurring operating income margins
(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
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Investor Relations – First Half 2009 Results – 06.08.09
Appendix 3: Investments by division
(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.
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
TotalNew operating
financial
assets
Maintenance€m
Growth
Financial incl.
change in
consolidation
scope
New
projects (1)
Industrial
investments
45
- 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
RoquebruneCap Martin (water) – Length: 20 years – Cumul. rev.: €50m
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
Gard district (transportation) (2) – Length: 10 years – Cumul. rev.: €16m
- Outsourcing / Privatization :
Nice (transportation) – Length: 15 years – Cumul. rev.: €45m
Touraine interurban bus network « Green line » for Indre et Loire district (transportation) – Length: 7 years – Cumul. rev.: €42m
Project SIM (creation of multi-modal information system Alsace Region) (transportation) - Length: 10 years – Cumul. rev.: €4m
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
Nevers area (construction & operating of professional landfill) (waste)– Length: 20 years – Cumul. rev.: €18m
- 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)
INTERNAL GROWTH
Outsourcing / Privatization
Company acquisition
Renewals
Engineering / Design & Build
Industry & services
Partnership with other company
Partnership with DCNS (multiservices), through creation of a JV:
Défense Environnement Services (51/49) – Cumul. Rev between 5 to 10 years: €150m
PARTNERSHIP
Appendix 4: Main contracts won or renewed since the
beginning of 2009
(1) Starting July 2009(2) Starting September 2009
Chartres Métropole
Indre et Loire
Défense Environnement
ServicesAlsace
Sauer Pechelbronn
Nevers
Moselle
VarNice
Le Creusot Montceau-les-Mines
Gard
Roquebrune Cap Martin
Lons-le-Saunier
La Roche-sur-Yon
Mende
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INTERNAL GROWTH
Outsourcing / Privatization
Partnership with other company
Renewals
Engineering / Design & Build
Industry & services
Appendix 4: Main contracts won or renewed since the
beginning of 2009
(1) Starting 2010(2) Starting September 2009
United-Kingdom
Germany
Poland
Spain
Sweden
Czech Republic
Merseyside
Madrid
Burg
Landskrona
Trelleborg
Barcelona
Grudziadz
Skanes
Görlitz
Hongry
Pécs
Slovakia
Trnava
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- Renewals:
Görlitz Stadtwerke (water) –Length: 20 years - Cumul. rev.: €310m
- Outsourcing / Privatization:
Merseyside Waste Disposal Authority (waste)– Length: 20 years – Cumul. rev.: €719m
City area of Madrid - station « South » (water)– Length: 4 years (2 years option) – Cumul. rev.: €16m (without option)
Burg water syndicat (Saxe-Anhalt) (water) - Length: 15 years – Cumul. rev.: €20m
Pécs (heating network with commitment to put in place biomass cogeneration unit) (energy) – Length: 22 years
Trnava region (energy) - Length: 10 years Skane county (transportation)
– Length: 5 years (2 years option) – Cumul. rev.: €94m Landskrona (Regional transportation system) (transportation)
– Length: 8 years (2 years option) – Cumul. rev.: €42m Trelleborg/Svedala (transportation)
– Length: 8 years (2 years option) – Cumul. rev.: €37m Grudziadz (transport on demand) (transportation)
– Length: 10 years – Cumul. rev.: €15m
- Engineering / Design & Build:
Barcelona (construction & operating the new heat and cold network) (energy)– Operating length: 30 years - Cumul. rev.: €600m
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INTERNAL GROWTH
Outsourcing / Privatization
Company acquisition
Renewals
Engineering / Design & Build
Industry & services
Appendix 4: Main contracts won or renewed since the
beginning of 2009
(1) Starting September 2010(2) Starting 2010
Canada
United States
Mexique New Orleans
Las Vegas
Houston
Tempe
Denver
- 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:
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
Houston (transportation) (Light rail - organization and construction)
– Length: 35 years – Cumul. rev.: €1,200m
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INTERNAL GROWTH
EXTERNAL GROWTH
Hong Kong light rail network (transportation) (JV)
PARTNERSHIP
Partnership with RATP Développement (transportation)
through the creation of a JV (50/50) in Asia – Cumul. Rev.: 2013: €500m€
Outsourcing / Privatization
Company acquisition
Renewals
Industry & services
Partnership with other company
Appendix 4: Main contracts won or renewed since the
beginning of 2009
(1) Starting 2010
Australia
Taïwan
India
China
JapanRATP Développement
Sydney
Hong Kong Lightrail
South Korea
New Zealand
Perth
Auckland
ChibaSaitama
& Hiroshima-
Investor Relations – First Half 2009 Results – 06.08.09
- Renewals:
Perth (transportation)- Length: 7 years – Cumul. rev.: €17m
Auckland(1) (transportation)- Length: 4 years – Cumul. rev.: €64m
Saitama & Hiroshima- Japan (water),
- Length: 3 years – Cumul. Rev. for both contracts: €21m
- Outsourcing / Privatization:
Sydney (networks maintenance) (water), in consortium with Bovis - Length: 4 years (3 years option ) - Cumul. rev.: €44m, without option and €77m with option
Chiba (Japon) (water)- Length: 3 years – Cumul. rev.:€38m
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INTERNAL GROWTH
Outsourcing / Privatization
Engineering / Design & Build
Industry & services
Partnership with other company
Appendix 4: Main contracts won or renewed since the
beginning of 2009
Saudi Arabia
United Arab
Emirates
Qatar
DohaSipchem
Morocco
Rabat
- Outsourcing / Privatization:
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
- Industry & services:
Saudi International Petrochemical (Sipchem) (operation contract) (water)– Length: 5 years – Cumul. rev.: €6m
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Investor Relations – First Half 2009 Results – 06.08.09
Appendix 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
USD
GBP
Other
Floating rate: 32%
Fixed rate: 68%
o/w euro: 91%
o/w U.S. dollar: 49%
o/w pound sterling: 49%
Euro
(1) Of which zloty: 2% CNY: 3% and HKD: 3%
Net financial debt after hedges Currencies (gross debt after hedges)
65%8%
8%
19% (1)
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Appendix 6: VE Group bonds maturity schedule at
June 30, 2009
€m
0
200
400
600
800
1000
1200
1400
1600
2009 2013 2017 2021 2025 2029 2033 2037
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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 [email protected]
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 [email protected]
Web site
http://www.veolia-finance.com
Investor Relations – First Half 2009 Results – 06.08.09