3. 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
5. Breakdown of revenue
By division By geographic area
Rest of the world
8%
Transportation Asia / Pacific
17% Water 36% 8% France
North 40%
America
9%
Energy
services
21%
Waste 26% Europe excl. France
35%
2009 consolidated revenue: €34,551m
5
6. Change in consolidated revenue by division in 2009
In €m
Water Waste
12,558 12,556 +0.0%
9,973 9,056
+0.2% (9.2%)
(7.9%)
Energy services Transportation
7,446 7,079 (4.9%) 5,860 +1.3%
5,788
(3.0%) +1.9%
2008 (1) % Variation at current FX rates
2009 % Variation at constant FX rates
(1) The 2008 financial statements have been adjusted, to ensure the comparability of financial years:
‐ by the divestment of Freight operations in the Transport division (December 2009) and by the Waste to Energy operations in the Waste division in the United States (Aug. 2009)
which are presented in the income statement in the line item « Net income from discontinued operations » according to IFRS 5;
‐ by the reclassification into « Net income from discontinued operations » of UK operations in the Transport division and of Renewable Energies business in the Energy division.
6
7. Veolia Environmental Services: 9.2% revenue decline
to €9,056m (‐7.9% at constant FX rates)
Quarterly revenue (€m) 2008
2009
Change in 2009/2008 revenue ‐ 9%
2,633 2,590
Decline in waste volumes ‐ 5% 2,382
2,314
2,368
2,274 2,280
2,188
• I&C non‐hazardous waste ‐ 8%
• Municipal ‐2.3%
Price and volumes of recycled materials ‐ 4%
• Average prices fell by 40% in 2009
Rise in service prices + 1%
FX effects ‐ 1% Q1 Q2 Q3 Q4
Stable revenue at constant consolidation scope
and FX rates in Q4 09
7
8. 2009 breakdown of revenue by geographic area
In €bn Europe excl. France
13.0 12.3
(5.5%)
(1.3%)
France
14.5 13.8 (4.9%)
North America 2008(1) 2009
3.0 3.1 +2.4%
(2.9%)
2008(1) 2009
Rest of the world
2008(1) 2009
2.6 2.6 +1.4%
+2.2%
2008(1) 2009 Asia / Pacific
2.7 2.8 +3.4%
+0.9%
2008(1) 2009
% Variation at current FX rates
% Variation at constant FX rates
(1) The 2008 financial statements have been adjusted, to ensure the comparability of financial years:
‐ by the divestment of Freight operations in the Transport division (December 2009) and by the Waste to Energy operations in the Waste division in the United States (Aug. 2009)
which are presented in the income statement in the line item « Net income from discontinued operations » according to IFRS 5;
‐ by the reclassification into « Net income from discontinued operations » of UK operations in the Transport division and of Renewable Energies business in the Energy division.
8
9. Rapid adaptation to the economic downturn
General Efficiency Plan over 2009‐2010 period:
In €m
600 Initial objective
500 Revised objective
400 500 Actual
300 255 400
200
220
100 180
0
Cumul 31/12/09 Cumul 31/12/10
2009 Veolia Environmental Services’ Adaptation Plan (Waste):
In €m
600
500
400 Initial objective
300 Actual
200 126
100
100
0
Cumul 31/12/09
9
10. Veolia Environmental Services (Waste):
recovery in profitability in 2009
Operating cash flow (€m)
and margin (%)
14.7%
14.3% 13.7% 14.1%
Substantial profitability improvement 13.5%
throughout the year 12.6% 334
362
350 11.8% 320
341 11.4%
• Efficiency Plan: €72m in 2009
291
• 2009 Waste Adaptation Plan: €126m 278
• In Germany, progressive improvement in 249
profitability since Q2
• Positive impact of lower fuel prices
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 (1) 2009
(1) The 2008 financial statements have been adjusted, to ensure the comparability of financial years:
‐ by the divestment of Freight operations in the Transport division (December 2009) and by the Waste to Energy operations in the Waste division in the United States (Aug. 2009)
which are presented in the income statement in the line item « Net income from discontinued operations » according to IFRS 5;
‐ by the reclassification into « Net income from discontinued operations » of UK operations in the Transport division and of Renewable Energies business in the Energy division.
10
11. Good resilience in Operating Cash Flow (1) margin
In €m constant 2008 (2) 2009
2008 (2) 2009 FX rates margin margin
Water 1,821 1,837 +2.6% 14.5% 14.6%
Waste 1,331 1,194 (8.8%) 13.4% 13.2%
Energy services 759 740 +0.8% 10.2% 10.5%
Transportation 287 327 +14.7% 5.0% 5.6%
Other (93) (142) ‐ ‐ ‐
Total Group 4,105 3,956 (1.7%) 11.5% 11.5%
(1) Operating cash flow: Cash flow from continuing operations before tax and interest expense
(2) The 2008 financial statements have been adjusted, to ensure the comparability of financial years:
‐ by the divestment of Freight operations in the Transport division (December 2009) and by the Waste to Energy operations in the Waste division in the United States (Aug. 2009)
which are presented in the income statement in the line item « Net income from discontinued operations » according to IFRS 5;
‐ by the reclassification into « Net income from discontinued operations » of UK operations in the Transport division and of Renewable Energies business in the Energy division.
11
12. Decrease in Recurring operating income
In €m At At
FX constant
2008 (1) current
2009 effect FX rates
FX rates
Water 1,196 1,164 (2.7%) (31) (0.1%)
Waste 620 360 (42.0%) (12) (40.1%)
Energy services 430 416 (3.0%) (17) +1.0%
Transportation 137 158 +15.6% (1) +16.2%
Holding (108) (166) ‐ ‐ ‐
Recurring operating income 2,275 1,932 (15.1%) (61) (12.4%)
Of which change in fair value of 21 (56)
provisions for landfill
rehabilitation
(1) The 2008 financial statements have been adjusted, to ensure the comparability of financial years:
‐ by the divestment of Freight operations in the Transport division (December 2009) and by the Waste to Energy operations in the Waste division in the United States (Aug. 2009)
which are presented in the income statement in the line item « Net income from discontinued operations » according to IFRS 5;
‐ by the reclassification into « Net income from discontinued operations » of UK operations in the Transport division and of Renewable Energies business in the Energy division.
12
13. Sharp increase in Net income, Group’s share
2008 (1) 2009
In €m Recurring Non‐ Total Recurring Non‐ Total
recurring recurring
Operating income 2,275 (314) 1,961 1,932 88 2,020
Cost of net financial debt (2) (948) ‐ (948) (894) ‐ (894)
Corporate tax expense (420) (42) (462) (242) ‐ (242)
Equity in net income of affiliates 19 ‐ 19 1 ‐ 1
Net income from discontinued ‐ 139 139 ‐ (43) (43)
operations
Net income attributable to (239) (65) (304) (259) 1 (258)
minority interests
Net income attributable to 687 (282) 405 538 46 584
equity holders of parent
(1) The 2008 financial statements have been adjusted, to ensure the comparability of financial years:
‐ by the divestment of Freight operations in the Transport division (December 2009) and by the Waste to Energy operations in the Waste division in the United States (Aug. 2009)
which are presented in the income statement in the line item « Net income from discontinued operations » according to IFRS 5;
‐ by the reclassification into « Net income from discontinued operations » of UK operations in the Transport division and of Renewable Energies business in the Energy division.
(2) Including an expense of €83m in 2009 related to the unwinding of the discount on provisions & of €73m in 2008
13
14. Stringent discipline in terms of Net Investments:
€1,585m
End of acquisitions
Optimization of current investments
In €m 2008 2009
Maintenance capital expenditure 1,860 1,632
As % of consolidated revenue 5.2% 4.7%
Investments in growth/existing operations 1,033 861
(excl. operating financial assets)
Financial investments in growth 1,280 338
(incl. change in consolidation scope)
New operating financial assets 529 500
Gross investments 4,702 3,331 ‐€1.4bn
Industrial and financial divestments(1) (789) (1,291) >€1bn
Repayment of operating financial assets (358) (455)
Net investments 3,555 1,585 <€2bn
(1) Including the capital increase subscribed by minority interests of €138m in 2009 and €27m (excl. the capital reduction in Berlin) in 2008 & including the net financial debt of divested
companies
14
15. Divestments carried out at a good price
In €m
2009 financial divestments (1) 1,032
Divest mature assets 230
• O/w Montenay International (USA) 220 (2)
Valuation multiple
Non‐strategic assets 420 excl. capital increase
subscribed by the
• O/w VPNM (France) 111 non‐controlling interests:
• O/w Veolia Cargo (France) 94 11x EBITDA 2008
• O/w Dalkia Facility Management (UK) 90
• Other 125
Development partnerships 382
• O/w EBRD (Veolia Voda, Central Europe) 70
• O/w JV with Mubadala (Africa – Middle East) 189
(1) Including capital increase subscribed by the non‐controlling interests & change in consolidation scope
(2) Related to divestments completed in 2009 only. The divestment of the operating contract for the Miami‐Dade County Waste‐to‐Energy plant, announced on February 2, 2010
will be included in 2010 divestitures
15
16. Indicator “Operating cash flow(1) – net
investments(2)”, exceeding the initial objective
In €m 2008 2009
Operating cash flow (1) 4,514 4,397
+ repayment of operating financial assets
Gross investments (4,702) (3,331)
Divestments 789 1,291
Operating cash flow (1) – net investments (2) 601 2,357
Reminder of 2009 objective 2,000
(1) Operating cash flow including cash flow from discontinued operations
(2) Net investments: Gross investments – (divestments + repayment of operating financial assets + capital increase subscribed by minority interests)
16
17. 2009 positive Free Cash Flow after dividend payment
& before postive contribution of divestments
In €m Repayment
WCR Gross
investments
Financial cash
4500
4,500 flow & OCF
of OFA +432
from
+455 (3,331)
discontinued
operations
4,000
4000
3,956 (17)
3,500
3500
3,000
3000
2,500
2500
2,000
2000
Capital increase
reserved for
Tax paid
1,500 minority
1500 shareholders
(408) Divestments
+138
Interests paid 1,344
1,000
1000 +1,153
(802) Dividend
Other (1) paid (2)
500
+202
(434)
0
Operating Free
Cash Flow Cash Flow
‐500
(1) Including change in receivables & other financial assets of +€163m in 2009 Positive free cash flow after dividend
(2) Including dividend paid to VE SA & minorities shareholders & net of scrip dividend
& before disposals: +€53m
17
18. Sharp improvement in net financial debt
In €bn x
17 4
16.5
16.5
16,5
3.6x Net financial debt / (Cash
3.4x 3.4x (1) 3.5
from operations +
16 3.3x 3,6x
3,5 Repayment of operating
financial assets)
15.5
15,5 15.1 15.1 3
As of 01/01/10, application of
15 14.7 IAS 7 (related to renewal
14.5
14,5 2.5
2,5 charges), changes the targeted
13.9 range of the Group ratio from
14 3.5x – 4.0x to 3.85x – 4.35x
2
13.5
13,5
13
1.5
1,5
12.5
12,5 Net financial debt
12 1
31 December 31 December 31 December 31 December 31 December
2005 2006 2007 2008 2009
Average maturity of net debt: 10 years versus 9.3 years as at 31/12/08
Ratings
• Moody’s: P‐2/ A3 negative outlook (confirmed on March 26, 2009)
• Standard & Poor’s: A‐2 / BBB+ stable outlook (On April 21, 2010: ratings
confirmed & outlook revised from negative to stable)
(1) The 2009 ratio adjusted for IAS 7 changes from 3.44x to 3.75x
18
19. Consolidated statement of financial position:
simplified balance sheet
In €m
31/12/08 31/12/09
Concession intangible assets 3,638 3,625
Property, plant and equipment 9,427 9,382
Other non‐current assets 11,678 11,313
Operating financial assets (current & non‐current) 5,751 5,652
Cash and cash equivalents 3,850 5,614
Other current assets 14,782 14,231
Total Assets 49,126 49,817
Equity 9,532 10,131
(incl. attribuable to non‐controlling interests)
Financial debt (current & non‐current) 20,757 21,094
Other non‐current liabilities 4,256 4,381
Other current liabilities 14,581 14,211
Total Equity and liabilities 49,126 49,817
19
