2. Investor Relations March 4, 2011
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.
2
5. Investor Relations March 4, 2011
Financial objectives exceeded
Adjusted operating income increased 8.5%, or 5.3% at constant
exchange rates, to €2,056M
• Adjusted operating cash flow margin improved from 10.3% to 10.5%
• Adjusted operating income margin improved from 5.6% to 5.9%
€265M in cost reductions exceeded the €250M commitment
Positive free cash flow after payment of dividend: €409M
Net financial debt at year end of €15,218M vs. €15,127M at the end
of 2009, including unfavorable exchange rate effects (€465M)
Improvement of credit ratios
Stable net income at €581M. Adjusted net income +11.6% to €579M
Proposed dividend of €1.21 per share 5
7. Investor Relations March 4, 2011
The combination of Veolia Transport –Transdev
finalized
Evolution of governance
• Priority for operational efficiency with a unified chief executive
Consolidation by Proportional Integration
Profile of the new entity
Full year pro forma 2010 Veolia Transdev non audited figures, after recapitalization,
excluding synergies
In €M Veolia Transdev Veolia‐ Veolia ‐ Net Impact
Transport (excl. Assets Transdev Transdev
(IG) divested to at 100% in PI (50%)
RATP)
(A) (B) (A)‐(D)
(C)=(A)+(B) (D)=(C)x50%
Revenue 5,765 2,206 7,971 3,985 ‐1,780
Operating cash flow 329 169 498 249 ‐80
2010 net debt 1,431 616 1,847 923 ‐508
IPO as soon as market conditions permit:
• A common enterprise project
• After achievement of initial synergies
7
• To finance development of the entity’s activity
8. Investor Relations March 4, 2011
2011 : A year of growing results
GROWTH FINANCIAL DISCIPLINE
Continued organic growth A program of asset
divestments of at least €1.3
billion
Adjusted operating
income in the 4% to 8%
range* Efficiency Plan cost savings
of at least €250M in 2011
Net income improvement
Positive free cash flow after
dividend payment
* Excluding the impact of Veolia Transport‐Transdev combination
8
10. Investor Relations March 4, 2011
2010 key figures
2009
In € M re‐presented 2010(2) Variation
(1)
Revenue 33,952 34,787 +2.5%
Adjusted operating cash flow 3,514 (3) 3,654 +4%
Cash flow from operations 3 578 3 742 +4.6%
Operating income 1,982 2,120 +7%
Adjusted operating income 1,894 2,056 +8.5%
Adjusted net income attrib to owners of the 519 579 +11.6%
company
Net income attributable to owners of the 584 581 ~
company
Free Cash Flow 1,344 409
Net financial debt 15,127 15,218 ~
Net financial debt / (Cash flow from operations + 3.75 X 3.65X
repayment of operating financial assets)
(1) The financial statements of 2009 have been re‐presented, in order to insure the comparability of periods:
‐ For the reclassification into “net income from discontinued operations” of the German operations in the Energy Services division, the Norwegian operations in the Environmental Services
division and operations in Gabon and the Netherlands within the Water division; the assets and liabilities of these four cash generating units have been reclassified in the lines for assets and
liabilities held for sale;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
(2) Audit processes are ongoing by auditors
(3) As of January 1, 2010, due to the application of the new amendment to IAS 7, adjusted operating cash flow for the year 2009 has been re‐presented for renewal expenses by an amount of
€360.9M, of which €245.7m is within the Water division and €115.2m is within the Energy Services division.
10
11. Investor Relations March 4, 2011
Breakdown of revenue by division
2009*: € 33,952M 2010: € 34,787M
Transportation:
€5,861M Transportation:
Water: €12,318M €5,765M
17% 17% Water: €12,128M
36% 35%
21% Energy Services: 21%
Energy Services: €7,582M
€7,041M
26% 27%
Environmental Environmental
Services: €8,732M Services: €9,312M
current constant Excl. FX
FX rates FX rates & scope
Water -
-1.5% -4.1%
- -2.9%
Environmental Services +6.7% +3.3% +6,9%
+6.9%
Energy Services +7.7% +5.8% +6.2%
Transport
Transportation -
-1.6% -4.4%
- -4.3%
-
* 2009 financial statements
have been re-presented to
VE Group +2.5%
+2,5% -0.2%
-0,2% +1.3%
+1,3% ensure the comparability of
periods: Refer to Appendix 2
11
12. Investor Relations March 4, 2011
Breakdown of revenue by geographic zone
2009: €33,952M* 2010: €34,787M
Rest of World: €2,566M Rest of World: €2,187M
Asia‐Pacific: €2,801M Asia‐Pacific: €2,851M
8% 6% France:
8% North America: 8% €14,038M
€3,244M
North America: 9%
€2,962M 9% 40% 40%
France:
€13,765M
37%
35% Europe excl. France:
€12,467M
Europe excl. France:
€11,858M
Excl. FX
current constant
& scope
FX rates FX rates
France +2.0% +2.0% +3.4%
Europe excl. France +5.1% +2.8% +3.6%
North America +9.5% +4.3% +4.1%
Asia/Pacific +1.8% -10.4% -11.3%
* 2009 financial statements
Rest of World -14.8% -19.9% -10.8% have been re-presented to
ensure the comparability of
periods: Refer to Appendix 2
12
VE Group +2.5% -0.2% +1.3%
13. Investor Relations March 4, 2011
Continued improvement throughout the year
Revenue in €M, variations at constant scope and exchange rates
1st quarter 2nd quarter 3rd quarter 4th quarter
2009* 2010 At 2009* 2010 At 2009* 2010 At 2009* 2010 At
const. const. const. const.
Scope Scope Scope Scope
& FX & FX & FX & FX
Water 3,089 2,856 ‐6.7% 3,032 2,905 ‐5.6% 2,996 3,029 ‐0.6% 3,201 3,338 +1.3%
Environ. 2,111 2,113 +3.3% 2,237 2,401 +9.2% 2,193 2,392 +8.3% 2,191 2,406 +6.5%
Services
Energy 2,380 2,299 ‐2.8% 1,303 1,402 +7.8% 1,112 1,291 +11.3% 2,246 2,590 +12.1%
Services
Transport 1,431 1,356 ‐6.4% 1,508 1,492 ‐4.1% 1,466 1,439 ‐5.3% 1,456 1,478 ‐1.7%
Group 9,011 8,624 ‐3.3% 8,080 8,200 +0.9% 7,767 8,151 +2.7% 9,094 9,812 +4.7%
Variation ‐4.3% +1.5% +4.9% +7.9%
at current
FX
* 2009 financial statements have been re-presented to ensure the comparability of periods: Refer to Appendix 2 13
14. Investor Relations March 4, 2011
Adjusted operating cash flow (1)
In €M 2009 2010
current FX Constant
re‐presented
(2)
FX
Water 1,545 1,479 ‐4.3% ‐6.4%
Environmental services 1,175 1,297 +10.4% +6.4%
Energy services 609 690 +13.4% +10.6%
Transportation 327 329 +0.7% ‐3.0%
Other ‐142 ‐141
Total Group 3,514 3,654 +4.0% +0.9%
Adjusted operating cash 10.3% 10.5% ‐ ‐
flow margin
2009 re‐ 2010
presented
(2)
Adjusted operating 3,514 3,654
cash flow
Cash flow from 65 106
discontinued ops.
Financial cash flow ‐1 ‐18
Cash flow from 3,578 3,742
operations
(1) Adjusted operating cash flow = cash flow from continuing operations before tax and interest expense 14
(2) 2009 results have been re-presented in order to ensure comparability of periods: refer to appendix 2
15. Investor Relations March 4, 2011
Efficiency Plan: 2010 initial objectives exceeded,
€265M versus €250M
Cost savings realized in 2009 and 2010 Breakdown by area of optimization
In €M 2009 2010
Assets
Water 87 93 12%
Support 37% Purchasing
Env. Services 72(1) 61 19%
functions
Energy 56 68
32%
Transport 40 43
Operations
Efficiency Plan €255M €265M
VES
€126M
Adaptation Plan
(1) Excluding the Veolia Environmental services Adaptation Plan
15
16. Investor Relations March 4, 2011
Veolia Water : Revenue declined slightly to €12,128M
Revenue declined 1.5%, ‐4.1% at constant FX and ‐2.9% at constant
scope and FX
In France, slight revenue decline of 0.9%, excluding scope effects
• Diminution of volumes sold (‐1%)
• Major commercial events: end of the city of Paris contract on December 31,
2009
Outside France(1), increase of 2.4% (+1.8% at constant scope and exchange
rates)
• Improvement in Germany
• Progressive ramp and growth of Chinese contracts
Veolia Water Solutions & Technologies declined 13.1%, or ‐16.8% at
constant scope and exchange rates to €2,148M
• Completion of three large contracts in the Middle East
2,700
• Excluding these contracts, revenue was globally stable €2,659M
2,650
€2,593M
2,600
Backlog VWS
2,550
2,500
(1) excluding VWST 2009 2010
16
18. Investor Relations March 4, 2011
Veolia Water: Adjusted operating cash flow of
€1,479M
Adjusted operating cash flow declined 4.3%, ‐6.4% at constant FX
France
• Major commercial events
• Higher net replacement expenses, including the end of the Vivendi indemnity compensation
• Current contractual evolutions and decline in volume of water sold, compensated by
productivity gains
Outside France(1)
• UK : Decline in regulated water, development costs, higher infrastructure costs
• Slight diminution in Germany
• Good progression in Asia and United States
Good resilience within Works
• Margin pressure in France
• limited impact related to the end of Middle East contracts, compensated by the recovery of
industrial Design and Build opportunities and sales of equipment and solutions within VWST
(1) hors VWST 18
19. Veolia Environmental Services: Revenue increased to Investor Relations March 4, 2011
€9,312M
+6.7% , +3.3% at constant FX and +6.9% at constant scope and FX
Quarterly 2010 Environmental Services Revenue
2009 2010 Growth
VES Organic growth (%) ‐8 pts +7 pts 2500 9.2% 2 401 2 392 10,0%
8.3% 2 406
of which 2400 8,0%
6.5%
Recycled materials (price, volumes) ‐4 pts +5 pts 2300 2 237
2 193 2 191 6,0%
2200 3.3%
Industrial waste volumes (1) ‐4 pts +1 pt 2 111 2 113
4,0%
Municipal waste volumes ‐1 pt ‐1 pt 2100
2000 2,0%
Price increases +1 pt +1pt
Others +1pt 1900 0,0%
(1) Non‐hazardous industrial waste, and Q1 Q2 Q3 Q4
hazardous waste and asssociated services
2009 2010 Growth at const. scope & FX
Breakdown of revenue by activity
Urban cleaning and collection
2009 2010
8% 9% Non hazardous industrial
22% waste collection and services
8% 24% 8%
Hazardous industrial waste
collection and services
6% 7%
Sorting and recycling
12% Hazardous waste treatment
14%
24%
Waste-to-energy from non
24% hazardous waste
16% 16%
Landfilling of non hazardous
and inert waste
19
21. Investor Relations March 4, 2011
Veolia Energy Services : Revenue increased to
€7,582M
Revenue increased 7.7% , +5.8% at
constant FX and +6.2 % at constant
scope and FX Quarterly revenue (€M)
Very favorable climate effect:
• +€160M€, of which +€99M in
France and €37M in Central 1 244
1 123 1 100
Europe 1 063
Energy prices
790
794
• Increase in France (+€45M) related 616 783
to the average increase of 4.3% in 1 2571 199 1 1831 346
the fuel mix for the year 509 612 496 508
(particularly in Q4)
1Q09 1Q10 2Q09 2Q10 3Q09 3Q10 4Q09 4Q10
• Decline in Central Europe (‐€25M)
following the 30% decline in France Outside France
electricity prices in the Czech
Republic
Temporary peak in activity in solar
Works
21
23. Investor Relations March 4, 2011
Veolia Transportation: Revenue declined to
€5,765M
Revenue declined 1.6%, ‐4.4% at Quarterly revenue (€M)
constant FX and ‐4.3% at constant scope
and FX 2009 2010
In Q4, end of the significant negative 1,508 1,492
impact (‐€637M) from the loss of 3 1,478
1,431 1,466 1,439 1,456
4
contracts (Bordeaux, Melbourne and 1,356 171 122
Stockholm) in 2009 180 2 171
In France, good resilience, with a 2.1%
revenue increase driven by contract
+11.1%* +10.8%*
gains from mid‐sized cities. +11.3%*
+8.2%*
Outside France, revenue declined 4.1%,
(‐8.4% at constant scope and exchange
rates)
• Ongoing growth in Germany due to 3 Q1 Q2 Q3 Q4
passenger train contracts won in 2009 Part of revenue associated with the Melbourne,
Stockholm and Bordeaux contracts in 2009
(impact +€68M); in the Netherlands
(Haaglanden contract), and in the United Part of revenue associated with the Melbourne,
Stockholm and Bordeaux contracts in 2010
States (New Orleans, Phoenix, Savannah)
* Revenue growth excluding Melbourne,
Stockholm and Bordeaux
23
25. Investor Relations March 4, 2011
Reconciliation of adjusted operating cash flow to
adjusted operating income
In €M 2009
Re‐ Current Of which
presented 2010 FX FX
(1)
Adjusted operating cash flow 3,514 3,654 +140 +107
Amortization* ‐1,749 ‐1,717 +32 ‐
Net capital gains 115 138 +23 ‐
Depreciation and fair value +14 ‐19 ‐33 ‐
adjustment
Adjusted operating income 1,894 2,056 +162 +62
* Of which change in discount rates used for provisions for landfill site remediation (‐€56M in 2009 and
€26M in 2010)
(1) 2009 results have been re‐presented in order to ensure the comparability of periods: Refer to Appendix 2
25
26. Investor Relations March 4, 2011
Adjusted operating income increased 8.5% and
adjusted operating income margin improved
In €M 2009
Re‐ Change Change
presented 2010 courant constant
(1)
Water 1,145 1,020 ‐11.0% ‐12.6%
Environmental Services 355 609 +71.4% +63.6%
Energy Services 401 460 +14.6% +12.0%
Transportation 158 146 ‐7.9% ‐11.6%
Holding ‐165 ‐179
Adjusted operating income 1,894 2,056 +8.5% +5.3%
Adjusted operating income margin 5.6% 5.9% ‐ ‐
(1) 2009 results have been re-presented in order to ensure the comparability of periods: Refer to Appendix 2
26
27. Investor Relations March 4, 2011
Net finance costs
Variation
In M€ 2009 2010 in %
Cost of net financial debt ‐768 4,76%* ‐793 5.09% +0.33%
Impact of the change in average cash +0.32%
Impact of the change in interest rates ‐0.04%
Other +0.05%
Net Financial Debt (1) of €15,218M vs. €15,127M
Average net financial debt (2) of €15,566M
vs.€16,466M in 2009 Evolution of cost of borrowing since 2004
Gross debt: €20,238M vs. €20,287M
5.8%
• Cost of borrowing 4.1% vs. 4.03% 5.61%*
5.6% 5.49%*
Cash and cash equivalents of €5,407M : 1.11%
5.4%
5.2% 5.12%* 5.07%* 5.09%
5.04%*
5.0%
(1) Net financial debt represents gross financial
4.76%*
debt (non‐current borrowings, current 4.8%
borrowings, bank overdrafts and other cash 4.6%
position items), net of cash and cash
equivalents and excluding fair value 4.4%
adjustments to derivatives hedging debt 4.2%
(2) Average net debt is the average of monthly 2004 2005 2006 2007 2008 2009 2010
net debts of the period
27
* Previously published
29. Investor Relations March 4, 2011
Reconciliation of adjusted operating income to net
income
(1)
2009 re-presented 2010
Total
In €M Adjusted Adjustment Total Adjusted Adjustment
Operating income 1,894 88 1,982 2 056 64 2,120
(2)
Cost of net financial debt -873 -873 -907
- -907
-
Income tax expense -
-239 -239 -
-319 -17 -
-336
Share of net income of associates -1 -1 18 18
- -27 -27 - -24
- - 24
Net income from discontinued operations
Non controlling interests -
-262 4 -258 - 269 -21 -
-290
Net income attrib. to the owners of the company 519 65 584 579 2 581
(1) The financial statements of 2009 have been re‐presented, in order to insure the comparability of periods:
‐ For the reclassification into “net income from discontinued operations” of the German operations in the Energy Services division, the Norwegian operations in the Environmental
Services division and operations in Gabon and the Netherlands within the Water division; the assets and liabilities of these four cash generating units have been reclassified
in the lines for assets and liabilities held for sale;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
(2) Including «other financial income and expenses », of which €76M in unwinding discounts on provisions in 2010
29
30. Investor Relations March 4, 2011
Statement of cash flows: positive free cash flow of
€409M
En M€ 2009 2010
Cash flow from operations (1) 3,578 3,742
Repayments of operating financial assets 455 424
Total cash generation 4,033 4,166
Gross investments ‐2,970 ‐3,256
Variation working capital 432 83
Taxes paid ‐408 ‐368
Interest expense ‐802 ‐808
Dividend (2) ‐434 ‐735
Other (3) 202 86
Divestments 1,291 1,241
Free cash flow 1,344 409
Impact of exchange rates and other 57 ‐500
Net financial debt at December 31 15,127 15,218
Change in net financial debt ‐1,401 91
(1) Of which financial cash flows (€ -1M in 2009 and €-18M in 2010) and cash flow from discontinued operations (€65M in 2009 and €106M in 2010)
(2) Dividend paid to shareholders and non controlling shareholders 30
(3) Notably changes in receivables and other financial assets for €41M in 2010 and €163M in 2009
31. Investor Relations March 4, 2011
Controlled growth in investments
In €M 2009 2010
Maintenance capital expenditures 1,271 1,075
As a % of consolidated revenue 3.7% 3.1%
Industrial investments in growth 861 1,033
(excluding operating financial assets)
Financial investments (1) in growth 338 653
New operating financial assets 500 495
Gross investments 2,970 3,256 +9.6%
(1) Including partial acquisitions between non controlling shareholders (with no change of consolidation scope) and net financial debt from acquired entities
31
32. Investor Relations March 4, 2011
Divestments (1): €2.5bn completed in 2 years
2010: €1,241m 2009‐2010: €2,532m
Industrial Industrial
divestments divestments
€205m €464m
Mature
assets
€627m
Partnerships Mature assets
€282m €397m
Partnerships
€664m
Non strategic assets
€357m
Non strategic assets
€777m
(1) Industrial and financial divestments (including net financial debt of divested companies and partial
divestments between non‐controlling shareholders (with no change in consolidation scope), and capital
increases subscribed by minority shareholders)).
32
34. Investor Relations March 4, 2011
Impact of asset divestments on results
In €M 2008 2009 2010
Recurring capital gains
Water 66.0 25.1 65.5
Environmental Services 16.0 24.7 41.8
Energy Services 11.8 43.5 10.7
Transportation 18.6 21.2 20.2
Holdings 0.1 0 0
Total in adjusted operating income (1) 112.5 114.5 138.2
Total non recurring capital gains (2) 99.0 89.0
Total capital gains in operating income 112.5 213.5 227.2
Capital gains in discontinued operations (3) 176.5 92.4 57.4
Total income related to divestments (1) + (2) + (3) 289.0 305.9 284.6
Depreciation and goodwill impairments ‐303.0 ‐21.1 ‐115.5
(2) in 2009: capital gain on VPNM in Environmental Services, in 2010 capital gain on Usti in Energy Services
(3) In 2008: capital gain on Crystal & Clemessy in Energy Services, in 2009 capital gain on WTE in Environmental services and capital loss on freight in
Transportation, in 2010 capital gain on Miami‐Dade contract in Environmental Services 34
35. Investor Relations March 4, 2011
Free cash Flow
2009 2010
+432 ‐1,224
4000 4000
+83 ‐1,591
3,654
3,514
3500 3500
3000 3000
‐802
2500 2500
FCF before ‐808
‐408 dividend
2000 2000
+266 +€1,778M FCF before
dividend
1500 1,344 1500 ‐368 +€1,144M
‐434
+174
1000 1000
‐735
500 500 409
0 0
2009 Change in Net capex Interest Taxes Other Dividends FCF after 2010 Change in Net capex Interest Taxes Other Dividends FCF after
adjusted WCR expense DIV adjusted WCR expense DIV
operating operating
cash flow cash flow
(re-
presented)
35
36. Investor Relations March 4, 2011
Credit ratio improvement
In €bn
3.99
17 3.95 4
3.75 16.5 3.75
16.5 3.65
3.6 3.55 3.6
3.4 3.5
16 3.37
3.3
3.4
15.5 15.1 15.1 15.2 Net financial debt
3
15 14.7 Ratio net financial debt (prior def. of
EBITDA)
14.5 2.5
Ratio net financial debt (post IAS 7)
13.9
14
2
13.5
As of 01/01/10, application of IAS
13 7 (related to replacement costs)
1.5 changed the targeted range of
12.5 the Group ratio from 3.5X - 4X to
3.85X – 4.35X
12 1
31-Dec-31-Dec-31-Dec- 31-Dec-31-Dec-31-Dec-
05 06 07 08 09 10
Average maturity of net financial debt: 9.4 years vs. 10 years at the end of 2009
Ratings
• Moody’s : P‐2/ A3 negative outlook (confirmed July 8, 2010)
• Standard & Poor’s : A‐2 / BBB+ stable outlook (April 21, 2010)
36
37. Investor Relations March 4, 2011
Evolution of after‐tax ROCE 2010
ROCE -Evolution from 2009 to 2010
10.0%
9.5%
9.0%
8.5% +0.3%
- -0.3%
+0.6%
8.0% + 7.9%
+7.6% -0.2%
7.5%
7.0% ROCE Scope Improve recent Slow return Performance Tax rate ROCE
2009 and FX acquisitions assets evolution 2010
6.5% re-
presented
6.0%
Redressement
ROCE 2009
Performance
ROCE 2010
Allemagne et
(acquisition
Propreté
Italie
37
38. 2011‐2013 OUTLOOK
THE CHOICE
OF TARGETED GROWTH
INCREASED PROFITABILITY AND
FINANCIAL DISCIPLINE
40. Investor Relations March 4, 2011
A proactive and clear strategy (2)
GIVE THE MEANS TO GROW PROFITABLY
WITHOUT INCREASING DEBT
Be selective
• Target the sectors and regions which are fast growing and have the most
potential => priority sectors
• Protect profitability and productivity of activities and in regions with strong
positive cash flow => leading Group positions
• Build the leading positions of tomorrow starting with existing platforms
Be flexible
• Reinforce productivity efforts to make the Group more mobile => Efficiency
Plan
• Draw resources from non strategic sectors and regions => Divestments
40
41. Investor Relations March 4, 2011
Be flexible (1)
A PRODUCTIVITY PLAN WHICH REINFORCES GROUP FLEXIBILITY
€265M
€255M*
€129M
€102M €112M
* Excluding the Environmental
2006 2007 2008 2009 2010 services adaptation plan in
2009 for €126M
New ways to reinforce our competitiveness:
ERP: review processes and organization
360° performance review of principal Business Units
Objective: Increase annual productivity gains from €250M today 41
to €300M in 3 years
42. Investor Relations March 4, 2011
Be flexible (2)
A DIVESTMENT PROGRAM WELL UNDERWAY
Divestments completed in 2009‐2010 Global capital gains
€2,532M in €M
306
Industrial divestments
€464M Mature assets
€627M
289
285
Partnerships
€664M Non‐strategic
assets
€777M 2008 2009 2010
For 2011‐2013, a divestment program of €4 billion, which is ~15% of capital employed*
• Non‐priority sectors and geographies
• Which will drive greater geographic concentration
*including operating financial assets 42
43. Investor Relations March 4, 2011
Be selective (1)
IDENTIFIED AND PRIORITIZED SECTORS OF DEVELOPMENT
WATER
• Large municipal concession contracts in Europe and Asia
• Industrial Build Operate Transfer in BRIC countries
ENVIRONMENTAL SERVICES
• Treatment and recycling of industrial hazardous waste in Europe, the US and emerging countries
• PFI (Private Finance Initiative) and PPP (Public Private Partnership) for integrated waste management
in Europe
• Sorting and recycling of non‐hazardous waste in Europe and North America
ENERGY SERVICES
• Local solutions for energy (biomass, cogeneration, cooling networks, industrial platforms) in Eastern
Europe and North America
• Municipal concession contracts focused on energy optimization in Europe and North America
TRANSPORTATION
• Regional rail in Europe
• Tramways and metro in Europe, North America and BRIC countries
• Transport‐on‐demand and intermodality in Europe and North America
We will concentrate our organic growth efforts on these sectors. We will
target acquisitions with differentiating technologies in these sectors.
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44. Investor Relations March 4, 2011
Be selective (2)
LEADING POSITIONS TO REINFORCE
=> Current strong cash generating activities
WATER WASTE ENERGY TRANSPORT QUICK INVESTMENT PAY BACK
France France France France •Energy optimization existing operations
United United Germany •Waste (United States) : Asset swap
Kingdom Kingdom
Germany United States
MARKET DYNAMICS OF THE GROUP DEVELOPMENT IN PRIORITY SECTORS
FAVORABLE ELEMENTS CHALLENGES AND GEOGRAPHIES
•Non regulated water in the UK
‐ Public Finance constraints ‐ Slow erosion in volumes •CRE (Commission de Régulation de l’Energie)
drive the need for economic bids
‐ Public sector •PFI in the United Kingdom
efficiency
competition (historical •Regional rail in Germany
‐ More stringent monopolies)
environmental regulations
GROWTH EQUAL TO OR
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GREATER THAN GDP
45. Investor Relations March 4, 2011
Be selective (3)
EXISTING PLATFORMS: LEADING POSITIONS TO COME
Energy Services – Central and Eastern Europe
– Largest local energy producer – 2010
revenue of €1.1bn
•Market leader in heating networks, with competitive
Water– Central & Eastern Europe – 2010 heating prices and asset ownership
•A number of heating network opportunities: Prague,
Revenue €873M Warsaw, Gdansk, Bucharest, Sofia
•First contract in 1994 in Szeged (Hungary)
•9.5 million people serviced with drinking
water and 8.9 million in waste water
treatment.
•Strong positions in main countries: market
share in Czech Republic of 45%, 25% in Slovakia Water– China – 2010 revenue of €670M
and 40% in Hungary in waste water treatment. •First contract in 1997 in Chengdu
•40 million people serviced with drinking water
•Presence in the main Chinese megacities
•Very strong revenue growth through a
combination of volume increases, higher tariffs
and contract extensions.
DOUBLE DIGIT GROWTH
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46. Investor Relations March 4, 2011
Investment allocation 2011‐2013
In €bn Maintenance Consolidation investments Total
Leading positions 2.5 1.0 3.5
Maintenance Existing contracts New projects Total
Priority sectors 0.8 3.5 3.0 7.3
Other 0.7 0.5 ‐ 1.2
Divestments ‐4.0
Maintenance Growth Divestments Total
Total 4.0 8.0 ‐4.0 8.0
Cumulative free cash flow before investments and divestments
Cumulative free cash flow before investments and divestments €8.0 bn
€8.0 bn
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47. Investor Relations March 4, 2011
Investments in new projects
2010 breakdown of adjusted Breakdown of investments in new
operating cash flow projects 2011‐2013
Emerging
Emerging
countries
countries
12% 21%
Eastern
Europe 15% 62% Eastern
Western Europe Western
Europe 30% Europe
22%
North 11%
America
27%
North
America
50 % OF GROWTH INVESTMENTS CONCENTRATED IN EMERGING COUNTRIES
AND CENTRAL EUROPE
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48. Investor Relations March 4, 2011
Our 3 Year Objectives
Adjusted operating income improvement in the range*
of 4% to 8%
M€ With
+8 % economic
recovery
+6%
+4 % Without
economic
recovery
1,932 2,056
(+6%)
Average annual growth
2009 2010
ROCE after tax of 9% to 10% at the end of 2014
Positive free cash flow and stable net debt
* Excluding the impact of the Veolia Transport /Transdev combination
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50. Investor Relations March 4, 2011
Table of contents of appendices
A year affected by foreign currency movements Appendix 1
Principal 2009 adjusted figures Appendix 2
Main contracts won or renewed in 2010 Appendix 3
Evolution of revenue 2009‐2010 Appendix 4
Evolution of operating cash flow and margins Appendix 5
2010 efficiency gains by area of optimization Appendix 6
Environmental Services: Revenue vs. Industrial Production ,& raw materials prices Appendix 7
Gross investments by division Appendix 8
Completed divestments Appendix 9
Overview of operating financial assets Appendix 10
Debt characteristics Appendix 11
Net liquidity Appendix 12
Balance sheet Appendix 13
ROCE Appendix 14
Composition of Board of Directors and Executive Committee Appendix 15
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51. Investor Relations March 4, 2011
Appendix 1 : Currency movements
Main currencies 2010 /
(1€ = x unit of foreign currency) 2009 2010 2009
U.S. dollar
Average rate 1.393 1.327 +4.8%
Closing rate 1.441 1.336 +7.2%
U.K pound sterling
Average rate 0.891 0.858 +3.7%
Closing rate 0.888 0.861 +3.1%
Korean won
Average rate 1,772.65 1,532.51 +13.5%
Closing rate 1,666.97 1,499.06 +10.1%
Australian dollar
Average rate 1.775 1.444 +18.6%
Closing rate 1.601 1.314 +17.9%
Czech koruna
Average rate 26.457 25.294 +4.4%
Closing rate 26.473 25.061 +5.3%
The average rate applies to the income statement and cash flow
The closing rate applies to the balance sheet
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52. Investor Relations March 4, 2011
Appendix 1 :Impact of FX rates on 2010 annual results
Depreciation of the euro 2010 / 2009
Average rate Closing rate
• Australian dollar +18.6% +17.9%
• Czech koruna +4.4% +5.3%
• U.K. pound sterling +3.7% +3.1%
• U.S. dollar +4.8% +7.2%
Impact on the Group’s main figures
• Revenue +€912M
• Adjusted Operating cash flow +€107M
• Adjusted operating income +€62M
• Higher net debt (at end of period rates) +€465M
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53. Investor Relations March 4, 2011
Appendix 2: Key 2009 adjusted figures
En M€ 2009 2009
Re‐
published presented (1)
Revenue 34,551.0 33,951.8
Operating cash flow 3,955.8 3,513.6(2)
Adjusted operating income 1,932.4 1,894.1
Adjusted net income attrib. to equity of Parent 538.1 519.0
Net income attrib to equity of Parent 584.1 584.1
Free cash flow (3) 1,344 1,344
(1) The financial statements of 2009 have been re‐presented in order to ensure comparability of periods:
‐ For the reclassification into “net income from discontinued operations” of the German operations in the Energy Services division, the Norwegian
operations in the Environmental Services division and operations in Gabon and the Netherlands within the Water division; the assets and liabilities of these four
cash generating units have been reclassified in the lines for assets and liabilities held for sale;
‐ For the reclassification into “continuing operations” the Renewable Energies business within the Energy Services division.
(2) As of January 1, 2010, due to the application of the new amendment to IAS 7, operating cash flow for the year 2009 has been re‐presented for renewal expenses
by an amount of €360.9M, of which €245.7m is within the Water division and €115.2m is within the Energy Services division.
(3) Free cash flow represents cash generated (which is equal to the 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 from 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.
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54. Investor Relations March 4, 2011
Main contracts won or renewed since the
beginning of 2010
ORGANIC GROWTH
‐ Renewals:
202 main contracts renewed in France in 2010 in Water (public service concession contracts)
(o/w 112 in drinking water & 90 in wastewater), 191 in Waste (o/w 108 from local authorities SMFM Marquette‐lez‐Lille
& 83 from companies), 2 in Transportation & 80% of contracts due to expire in 2010 renewed in Energy
SEDIF (Water authority for the Ile de France area) (water) – Public service concession contract Lens
for water production & distribution service – Length: 12 years – Cumul. Rev.: €3.1bn SMITVAD
Béziers (transportation) – Length: 8 years – Cumul. Rev.: €87m SYMOVE
Public service concession contract for La Madeleine network in Evreux (energy) Oise
– Length: 20 years – Cumul. Rev.: €85m Carré de Réunion
Marseille Provence Métropole (1) (waste) – Length: 3 years – Cumul. Rev.: €29m
Evreux Strasbourg
GIMD
Mandelieu‐la‐Napoule (waste) – Length: 7 years – Cumul. Rev.: €17m Fort d’Issy Caisse des Dépôts
‐ Outsourcing / Privatization: Rennes SEDIF Disneyland
SYMOVE in Oise department (construction, finance & operation for a multi‐process SYTRADEM
recovery center) (waste) – Contract term: 23 years o/w 20 for operation – Cumul. Rev.: €347m
SMITVAD in Pays de Caux area (construction, finance & operation for Orléans
a waste treatment unit & 2 landfills) (waste) Biopôle
– Contract term: 23 years o/w 20 for operation – Cumul. Rev.: €110m Tours
SYTRADEM in Seine‐et‐Marne department (waste) – Length: 10 years – Cumul. Rev.: €47m Angers Dijon
« Biopôle » in Angers Loire metropolitan area (mechanical biological treatment facility
with composting & anaerobic digestion) (waste) – Length: 6 years – Cumul. Rev.: €44m
Grand Dijon Conurbation (waste) – Length: 5 years – Cumul. Rev.: €44m
SMFM in Flandre Morinie (waste) – Length: 8 years – Cumul. Rev.: €40m Michelin
Bayonne (transportation) – Length: 7 years – Cumul. Rev.: €140m
Antibes (transportation) – Length: 5 years – Cumul. Rev.: €55m Limoges
Oise semipublic mass transit authority (integrated services system for the Oise transit hub) (transportation)
– Length: 12 years – Cumul. Rev.: €29m
Michelin in La Combaude (energy) – Length: 12 years – Cumul. Rev.: €35m
CEA in Marcoule (energy) – Length: 10 years – Cumul. Rev.: €52m
‐ Engineering / Design & Build: Antibes
CEA Marseille
The « Grand Prado » from the Reunion North Interdistrict Community (CINOR) (water)
– Contract term: 20 years – Cumul. Rev.: €270m o/w €75m for construction
Marquette‐lez‐Lille from Lille metropolitan area (DBO) (water) Bayonne Mandelieu‐
– Operating length: 6 years – Cumul. Rev.: €103m o/w €75m for construction Béziers la‐Napoule
Disneyland in Paris (DBO) (water)
– Operating length: 12 years – Cumul. Rev.: €29m o/w €17m for construction
Carré de Réunion in Versailles (D&B) (water) – Cumul. Rev.: €48m
CRE 3 (construction & operation of 7 new biomass cogeneration plants in Rennes, Strasbourg, Grand
Orléans, Tours, Angers, Lens & Limoges) (energy) Prado
New Fort d’Issy‐les‐Moulineaux eco‐neighborhood (construction & operation of the 1st geothermal (1) Awarded in 2010, signature expected in 2011 Reunion Island
heating network for an eco‐neighborhood) (energy) – Operating length: 25 years ‐ Cumul. Rev.: €27m (2) Signature of the defintive agreements announced on May 5, 2010
PARTNERSHIPS Renewals
Agreement between Veolia Environnement & Caisse des Dépôts relative to the Outsourcing / Privatization
Veolia Transport‐Transdev merger (2) (50/50 before the new group’s IPO) (transportation) Engineering / Design & Build
Partnership between Veolia Environnement & the Groupe Industriel Marcel Dassault (GIMD) 54
with the undertaking by GIMD to maintain its 5% holding of the stock & voting rights of Partnerships with other companies
Veolia Environnement for a period of 5 years
