- Finance

Transcription

- Finance

First half 2010
First
half 2010
results
Investor Relations, 2010 first half results ‐ 06/08/10
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
th iti could
ld terminate
t
i t or modify
dif some off Veolia
V li Environnement's
E i
t' contracts,
t t the
th risk
i k that
th t our long‐term
l
t
contracts
t t 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,
past present and future operations,
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
Table of contents
Table of contents
Highlights
2010 first half results
2010 objectives
3
Antoine Frérot
Chief Executive Officer
Overview of trends in activity (1)
First half of 2010
Water: declining revenue in Works activities
Water: declining revenue in Works activities
• Continued lower Works activity mainly due to the completion of 3 large contracts in the Middle East
• Good resilience of operations despite the end of the Paris contract
G d ili
f
ti
d it th
d f th P i
t t
Environmental Services: market improvement • Strong rebound in prices of recycled raw materials and services pricing remain g
p
y
p
g
at good levels
• Improvement in volumes is fragile and uneven
• Contract signature selectivity
g
y
Energy Services: first half stable
• Climate conditions more favorable at the beginning of the year / negative impact of energy prices
impact of energy prices Transportation: good dynamics masked by the end of 3 contracts
• Negative revenue impact of €350m related to the end of the Bordeaux, Melbourne and Stockholm contracts
Melbourne and Stockholm contracts
• Revenue growth of 8.8% excluding the impact of these contracts
5
Near and mid‐term
Reappearance of opportunities for organic growth in core targets
Reappearance of opportunities for organic growth in core targets
• For public collectivities
• In all our specialties
Interesting opportunities to exchange and optimize assets
• Water in Central Europe
Water in Central Europe
Portfolio of United Utilities contracts in Europe
Entry of IFC into the capital of Veolia Voda for 9.5%
• Energy efficiency in the Czech Republic
E
ffi i
i th C h R
bli
Divestment of 85% of Usti and 15% of Dalkia Ceska
NWR Energy (industrial platform in Ostrava and Poland)
Continued pursuit of asset portfolio redeployment
6
Significant commercial and strategic advances
Significant commercial and strategic advances
SEDIF contract win for 12 years
y
Important commercial successes bring profitable growth
• Water: La Réunion, Royan, Petrobras and Catalonia contracts
W t L Ré i
R
P t b
dC t l i
t t
• Environmental Services: High performance sorting and recycling in Nantes, Staffordshire, Angers’ biopôle, Waste‐to‐energy in Beauvais
• Dalkia: Cogeneration by biomass in Lodz, Poznan as well as in France (7 Dalkia: Cogeneration by biomass in Lodz Poznan as well as in France (7
projects) • Transportation: Saxony, Bavaria, Rhine Westphalia, Boston, Phoenix
• Multiple divisions: Renault in Tangier
p
g
Signature of agreement for the merger of Veolia Transport / Transdev on May 5, 2010
y ,
7
Improvement confirmed
Improvement confirmed
Slight decline in revenue: ‐1.2%
• Noticeable improvement in the second quarter in all divisions
p
q
Operating cash flow growth of 2.7%
Improvement in recurring operating income: +6.6% (operating income +11.2%)
• Improvement in associated margins
I
ti
i t d
i
Growth in recurring net income: +6.6%, (+69.9% growth in net income)
2010 Efficiency Plan: €132m in cost savings in H1
• Cost reductions proceeding in line with annual €250m target
Strong growth in operating cash flow – net investments to €1,533m vs €850m (+80%)
• Maintained discipline regarding gross investments: €1,333m (
Maintained discipline regarding gross investments: €1,333m (‐12%)
12%)
• Divestments: €766m vs. €268m
• Stable free cash flow vs. H1 2009 including the 86% cash dividend payment Net financial debt amounted to €16bn Net financial debt amounted to €16bn
• Unfavorable exchange rate effect: +€674m
• Extension of debt maturity after the debt exchange in July 2010
8
2010 objectives confirmed
• Recurring operating income improvement
• Positive free cash flow after dividend payment(1)
• €3bn of divestments over 2009 – 2010 – 2011
• €250m in cost reductions
• Maintain ratio objective: net debt / (cash flow from operations + repayment of Operating Financial Assets)
(1)
Excluding the planned merger of Veolia Transport/Transdev
9
Pierre‐François
Pierre‐François Riolacci
Chief Financial Officer
2010 First half key figures
2010 First half key figures
En €m
H1 2009
Adjusted (1)
Revenue
Operating Cash Flow(3)
Margin rate
Recurring operating income
Margin rate
Operating Income
Recurring net income attributable to equity holders of parent
Net income attributable to equity
Net income attributable to equity holders of parent
(1)
(2)
(3)
 current FX rates
 constant FX rates
‐1.2%
+2.7%
‐3.3%
+0.2%
17,389.3
1,835.2(2)
10.6 %
1,011.5
5.8 %
1,011.5
17,177.3
1,885.4
11.0%
1,078.2
6.3%
1,125.2
+6.6%
+3.5%
+11.2%
+7.9%
287.3
306.2
+6.6%
220.3
374.2
+69.9%
Dec 31 2009
Net financial debt
H1 2010
15,127
June 30 2010
16,027
FX Impact
p
+674
First half 2009 results have been adjusted in order to assure the comparability of periods for the reclassification into «net income from discontinued operations”
of UK operations in the Transportation division and the Eolfi activities in the Energy Services division;
As of January 1, 2010, due to the application of the new amendment to IAS 7, operating cash flow for H1 2009 has been adjusted for renewal expenses by an
amount of €148.3 m, of which €102.3m is within the Water division and €46.0m is within the Energy Services division.
For detailed definition refer to 2009 Form 20-F page 74
11
Impact of FX movements on H1 2010 accounts
Impact of FX movements on H1 2010 accounts
Euro depreciation H1 2010 / H1 2009
Average Rate
Average Rate Closing Rate
Closing Rate
• Australian dollar
• Czech koruna
• Pound sterling
• Polish zloty
• U.S. dollar
ll
+27%
+6%
+3%
+12%
0%
+21%
+1%
+4%
+7%
+15%
I
Impacts on Group’s main figures G
’
i fi
• Revenue
• Operating cash flow Operating cash flow
• Recurring operating income +€357m
+€47m
+€32m
• Higher net debt (at end of period rates)
+€674m
12
Breakdown of consolidated revenue
Breakdown of consolidated revenue
By division
Transportation
€2,847m
,
Water
,
€5,901m
17%
34%
Energy Services
22%
€3,721m By geographic region
Rest of the world
Asia / Pacific €1,008m
€1,271m
North America
€1 679m
€1,679m
7%
10%
6%
40%
27%
Environmental
Services €4,708m
37%
FFrance €6,903m
Europe ex. France Europe
ex. France
€6,316m
C
Consolidated H1 2010 Revenue of €17,177m
lid t d H1 2010 R
f €17 177
13
Revenue
In €m
(1)
17 389
17,389
+ 357
H1 2009
adjusted (1)
FX effect
+2.1%
- 384
- 185
17,177
External
growth
Internal
growth
H1 2010
-2.2%
-1.1%
-1.2%
of UK operations in the Transportation division and the Eolfi activities in the Energy Services division
14
Breakdown of revenue by division
Breakdown of revenue by division
In €m
17,389
17,177

6,235
4,502
(1)
3,713
3,721
2,939
2,847
H1 2009
adjusted (1)
H1 2010

Current FX rates
FX
rates
Constant FX rates
FX rates
Exc. Scope & FX
& FX
Water
‐5.4%
‐7.1%
‐5.7%
Environmental Services
4.6%
1.9%
6.6%
Energy Services
0.2%
‐1.6%
0.6%
Transportation
‐3.1%
‐5.2%
‐5.2%
VE Group
VE Group
‐1.2%
1 2%
‐3.3%
3 3%
‐1.1%
1 1%
5,901
4,708

15
An inflexion during second quarter in all divisions
An inflexion during second quarter in all divisions
Revenue in €m
1st Quarter
2009
2nd Quarter
2010
At constant
FX
2009
2010
Water
3,143
,
2,923
,
‐7.8%
3,092
,
2,978
,
Waste 2,188 2,204
‐0.7%
2,314
Energy services
2,398 2,312
‐4.9%
Transportation
1,431 1,356
Group
9,160 8,794
Variation at current FX 1st Half 2009
2010
‐6.4%
6,235
,
5,901
,
‐7.1%
2,504
4.3%
4,502
4,708
1,315
1,409
4.6%
3,713
3,721 ‐1.6%
‐6.2%
1,508
1,491
‐4.4%
2,939
2,847 ‐5.2%
‐5.1%
8,229
8,383
‐1.3%
17,389
17,177 ‐3.3%
‐4.0%
4 0%
At constant
FX
+1 9%
+1.9%
At constant
FX
1.9%
‐1.2%
1 2%
16
Breakdown of revenue by geographic area
Breakdown of revenue by geographic area
In €m
17,389
6,962
6,177
(1)
17,177
6,903
6,316
1,611
1,324
1 315
1,315
1,679
1,271
1 008
1,008
H1 2009
adjusted (1)
H1 2010



Exc. Scope & FX
Current FX rates
FX
rates
Constant FX rates
FX rates
France
‐0.8%
‐0.8%
1.4%
Europe ex. France
2.3%
‐0.4%
1.6%
North America
4.2%
2.9%
2.7%
Asia / Pacific
‐4.0%
‐14.4%
‐15.2%
Rest of world
Rest of world
‐23.3%
23 3%
‐25.9%
25 9%
‐17.1%
17 1%
Group VE
‐1.2%
‐3.3%
‐1.1%
17
Revenue : Veolia Water, down 5.4%
Revenue : Veolia Water, down 5.4%
Veolia Water Solutions & Technologies: ‐ 26.2% at constant scope and FX • Impact of the completion of large Design & Build contracts (Marafiq, Fujairah, Ras Laffan). Identical trend in first and second quarters
• Backlog for D&B activity has stabilized
Backlog for D&B activity has stabilized
• Good activity in the « Solutions » business
First half revenue
(€m)
6,235 -5.4%
5,901
France : Revenue decline of 2.4% at constant scope
• Decline
Decline in Works (‐6.3%)
in Works ( 6 3%)
• Slight increase in operations activity (+3.4%) excluding impact of the end of the Paris contract Outside France: +1.1% at constant scope and FX
Outside France: +1.1% at constant scope and FX • Europe (excl. France): +3.0% at constant scope and FX (United Kingdom, Northern Europe)
• Africa / Middle East: +3.3% at constant scope and FX due to increased volumes and tariffs in 2009
• Asia Pacific: ‐4.9% at constant scope and FX due to end of construction of the Gold Coast desalination plant (Australia)
4,013
-1.3%
3,960
2 222 -12.6%
2,222
12 6%
1 941
1,941
S1 09
S1 10
Operations
Works and E&C
18
Revenue: Veolia Environmental Services: +4.6%
Revenue: Veolia Environmental Services: 4.6%
First half revenue
(€m)
Variation in revenue H1 2010 / H1 2009 +5%
4,502 +4.6% 4,708
Waste volumes ± 0%
Price and volumes of recycled materials
+ 6%
Rise in service prices + 1%
FX effects
FX effects
+ 3%
+ 3%
Scope
‐ 5%
H1 09
Breakdown of revenue by activity
Breakdown of revenue by activity
2009
H1 2010
8%
8%
23%
8%
H1 10
22%
8%
Urban cleaning and collection Non hazardous industrial waste collection and services
6%
6%
Hazardous industrial waste collection and services
Sorting and recycling 13%
Hazardous waste treatment
Hazardous waste treatment 16%
24%
24%
18%
Waste‐to‐energy from non hazardous waste
Landfilling of non hazardous and inert waste 16%
19
Veolia Environmental Services: Breakdown of revenue by geographic area
revenue by geographic area
France
Germany
% of H1 Δ at 2010
2010 constant revenue scope & FX
34%
+7%
Higher recycled raw materials prices
Contract selectivity (municipal collection)
Contract selectivity (municipal collection)
Closure of 2 landfills Good activity for hazardous waste
12%
+12%
Competitive pressure on municipal, DSD contracts and industrial waste contracts
United United
Kingdom
16%
+4%
North America
14%
+5%
Rest of the Rest
of the
world
24%
+6%
Positive contribution of integrated contracts (PFI)
Positive
contribution of integrated contracts (PFI)
Decline in industrial waste volumes and landfilled volumes during the first half, with stabilization in the second quarter
Improvement in solid waste volumes in the second quarter
Improvement in Industrial Services
20
Revenue: Veolia Energy Services, stable, +0.2%
Revenue: Veolia Energy Services, stable, 0.2%
Lower energy prices
Lower energy prices
• impact of ‐€83m
Favorable climate in the first half of 2010 primarily in France and Central Europe
First half revenue
(€m)
3,713 +0.2% 3,721
• impact of +€65m
p
1 ,952
-1.9%
1,915
Stabilization in Works activities at constant scope
1,761
+2.6%
1,807
H1 09(1)
H1 10
Outside France
France
(1)
21
Revenue: Veolia Transportation, down 3.1%
Revenue: Veolia Transportation, down 3.1%
Revenue down 5.2% at constant scope and FX rates
• Non‐renewal in 2009 of the Bordeaux, Stockholm and Melbourne contracts (‐€350m)
• Good commercial development
Valenciennes, The Netherlands (Haaglanden), Germany, United‐States
First half revenue
(€m)
2,940
-3.1% 2,848
Revenue growth of 1.8% in France at constant scope
Revenue decline of 9.7% outside France at constant scope and FX rates (impact of Stockholm and Melbourne ‐€300m)
Stockholm and Melbourne ‐€300m)
(1)
H1 09(1)
H1 10
22
Operating cash flow Operating
cash flow (1)
In €m
H1 2009
adjusted(2)
Water
l
Energy Services
Transportation
Other
Total Group
(1)
(2)
808
540
374
160
‐47
1,835
H1 2010

current FX
FX rates
788
‐2.5%
627 +16.1%
386 +3.2%
159
‐0.6%
0.6%
‐75
‐
1,885 +2.7%
FX effect
16
15
11
5
‐
47

constant FX
FX rates
‐4.4%
+13.3%
+0.1%
‐3.8%
3.8%
+0.2%
Operating Cash Flow = cash flow from continuing operations before tax and interest expense
23
Operating cash flow margin improvement
Operating cash flow margin improvement
(1)
H1 2009 margin adjusted (1)
H1 2010 margin
Water
Energy Services
Transportation
Other
13.0%
12.0%
10.1%
5.4%
‐
13.4%
13.3%
10.4%
5.6%
‐
Total Group
10.6%
11.0%
of UK operations in the Transportation division and the Eolfi activities in the Energy Services division .
24
Efficiency Plan: Cost reduction progressing in line with annual €250m objective
line with annual €250m objective Efficiency Plan
€m
H1 2009 (Reminder)
H1 2010
37
25*
21
15
38
43
31
18
3
2
101
132
Water
Energy Services
Transportation
Other
Total Group
53 % of the annual objective realized during the first half
* Excluding the Environmental Services Division’s separate Plan of Adaptation
in 2009
25
Recurring operating income increased 6.6%
Recurring operating income increased 6.6%
In m€
H1 2009
adjustéd (1)
 Current H1 2010 FX rates
FX effect 
Constant FX rates
Water
Environmental services
596
134
590
251
‐1.0%
86.6%
13
8
‐3.3%
80.7%
Energy services
256
268
4.8%
8
+1.6%
Transportation
81
48
‐40.7%
3
‐43.8%
‐56
56
1,011
‐79
79
1,078
+6.6%
32
+3.5%
‐18
‐33
Holding
Of which change in fair value of provisions for landfill rehabilitation
p
f
f
(1)
First half 2009 results have been adjusted in order to assure the comparability of periods for the reclassification into «net income from discontinued
operations” of UK operations in the Transportation division and the Eolfi activities in the Energy Services division
26
Recurring operating income margin improvement
Recurring operating income margin improvement
Recurring
g operating
p
g
income margins
In €m
adjusted (1)
H1 2010
margin
i
Water
Environmental services
Energy services
9.6%
3.0%
6.9%
10.0%
5.3%
7.2%
Transportation
2 8%
2.8%
1 7%
1.7%
‐
‐
5.8%
6.3%
Holding
Total Group
Total Group
(1)
H1 2009 margin g
27
Net income increased 70%
Net income increased 70%
H1 2009 (1)
In €m
Recurring
Operating income
Non‐
recurring
H1 2010
Total
Recurring
Non‐
recurring
Total
1,011
‐
1,011
1,078
47
1,125
Cost of net financial debt Cost
of net financial debt (2)
‐406
406
‐
‐406
406
‐443
443
‐
‐443
443
Corporate Tax Expense
‐198
‐
‐198
‐188
‐
‐188
7
‐
7
9
‐
9
‐
‐68
‐68
‐
43
43
‐127
1
‐126
‐149
‐22
‐171
287
‐67
220
306
68
374
Share in net income of associates
N ti
Net income from discontinued f
di
ti
d
operations
Net income attributable to non‐
controlling interests
Net income attributable to equity holders of parent
(1)
(2)
Including «other financial income and expenses », of which -€37m in unwinding discounts on provisions in 1H 2010
28
Cost of borrowing
Cost of borrowing
In €m
H1 2009
Cost of net financial debt
‐379
H1 2010
Δ30/06/10
30/06/09
‐408
‐29
Impact of change in average debt
+15
Impact of change in interest rates
Impact of change in interest rates
‐38
38
Other
‐6
In €m
17 000
16 819 16 827
16 500
16 000
15 500
16 027
15 902
15 377
15 127
Average net financial debt:
€15,542m at June 30, 2010 versus
€16,888m at June 30, 2009
15 000
14 500
Cost of borrowing stood at
14 000
5.06% versus 4.76% in 2009
Marc. 31, June 30, Setp. 30, Dec. 31, Marc. 31, June 30,
09
09
09
09
09
09
(4.47% at H1 2009 and 5.07% at H2 2009)
29
Completed Divestments in H1 2010
Completed Divestments in H1 2010 In €m
Industrial and financial divestments H1 2010 Industrial
and financial divestments H1 2010 (1)
Mature assets
766
766 396
• Of which Montenay Of which Montenay ‐ Dade (Environmental Services), Dade (Environmental Services)
Usti nad Labem (Dalkia)
Non‐strategic assets
g
106
• Of which Mediterranea delle Acque (Water); Brazil, Ireland
Korea (Environmental Services)
Development partnerships
192
• Of which IFC in Veolia Voda, CEZ in Dalkia Ceska Republica
Industrial Divestments
(1)
72
Including capital increase subscribed by minority shareholders, net financial debt of divested companies and partial divestments between non-controlling
shareholders (with no change in consolidation scope)
30
Maintained discipline on net investments: €352m
Maintained discipline on net investments: €352m
In €m
H1 2009
H1 2010
710
458
4.1%
2.7%
Investments in growth/existing operations
(ex. operating financial assets)
316
392
Financial investments in growth (1)
248
324
New operating financial assets
242
159
1,516
1,333
‐183
Industrial and financial divestments (2)
‐268
‐766
+498
Repayment of operating financial assets
Repayment of operating financial assets
‐263
263
‐215
215
985
352
Maintenance capital expenditures As % of consolidated revenue
Gross investments
Net investments
(1)
(2)
‐633
Including partial acquisitions between non-controlling shareholders (with no change in consolidation scope) and net financial debt from acquired entities
Including capital increase subscribed by minority shareholders of €108m in H1 2010 and €57m in H1 2009, net financial debt of divested companies and partial
divestments between non-controlling shareholders (with no change in consolidation scope)
31
Strong cash generated from operations
Strong cash generated from operations
In €m
Cash Flow From Operations
h l
i (1)
Repayment of Operating Financial Assets
Total cash generation
Total cash generation
Gross investments
Divestments
Cash generated from operations
Variation WCR
Taxes paid
Taxes paid
Interest expense
Dividend (2)
Other (3)
Free Cash Flow
(1)
(2)
(3)
H1 2009
H1 2010
1,836
263
2,099
‐1,516
268
851
‐114
‐218
‐347
‐402
73
‐157
1,878
215
2,093
‐1,333
766
1,526
‐382
‐197
‐352
‐709
‐19
‐133
Of which financial cash flow and cash flow from discontinued operations ((€2m) in H1 2010 et (€6m) in H1 2009)
Dividend paid to shareholders and minority shareholders and other movements
Includes in particular changes in receivables and other financing assets totaling (€27m) in H1 2010 and €62m in H1 2009
32
Change in net financial debt
Change in net financial debt
In €m
Net financial debt at January 1st
Free cash flow
FX ff t
FX effects
Other
Net debt at June 30
Change in net debt
H1 2009
‐16,528
‐157
‐30
30
‐112
‐16,827
‐299
H1 2010
‐15,127
‐133
‐674
674
‐93
‐16,027
‐900
Strong liquidity position : €9.7bn at the end of June 2010
Pursuing active debt management
• Average maturity of net debt of 9.9 years following the debt swap in July 2010 related to bonds due in 2012 and 2013 (average maturity of 9.5 years at June 30, (
g
y
y
2010 and 10 years at the end of December 2009)
Ratings
• Moody
Moody’ss : P
: P‐2
2 / A3 negative outlook (confirmed on July 8, 2010)
/ A3 negative outlook (confirmed on July 8 2010)
• Standard & Poor’s : A‐2 / BBB+ Stable outlook (April 21, 2010: ratings confirmed & outlook revised from negative to stable)
33
• Recurring operating income improvement
• Positive free cash flow after dividend payment(1)
• €3bn of divestments over 2009 – 2010 – 2011
• €250m in cost reductions
• Maintain ratio objective: net debt / (cash flow from operations + repayment of Operating Financial Assets)
(1)
Excluding the planned merger of Veolia Transport/Transdev
34
First half 2010 First
half 2010
results
Sommaire
Appendices
Table of contents of appendices
Table of contents of appendices
Currency movements
Impact of FX rates on H1 2010 operating cash flow
p
p
g
Gross investments by division
Debt management I
Impact of foreign currency on net debt
t ff i
t d bt
VE SA bond redemption schedule Consolidated balance sheet
Main contracts won or renewed in 1H10
Accounting treatment for renewal expenditures (IAS 7) Veolia ‐ Transdev: calendar Veolia ‐
Transdev: calendar
Appendix 1
Appendix 2
pp
Appendix 3
Appendix 4
A
Appendix 5
di 5
Appendix 6
Appendix 7
Appendix 8
Appendix 9
Appendix 10
Appendix 10
37
Appendix 1: Currency movements
Appendix 1: Currency movements Main currencies
(1 unit of foreign currency = €…)
 H1 2010
H1 2009
H1 2010
U.S.
U
S dollar
Average rate
Closing rate
0.7507
0.7075
0.7528
0.8149
+0.3%
+15.2%
Pound sterling
Average rate
Closing rate
1.1187
1.1736
1.1494
1,2233
+2.7%
+4.2%
Korean won
Average rate
Closing rate
0.0006
0.0006
0.0007
0.0007
+17.2%
+20.2%
Australian dollar
Average rate
Closing rate
0.5322
0.5761
0.6730
0.6943
+26.5%
+20.5%
Czech koruna
Average rate
Closing rate
0.0368
0.0386
0.0389
0.0389
+5.5%
+0.7%
/ H1 2009
The average rate applies to the income statement and cash flow
The closing rate applies to the balance sheet
38
Appendix 2: Impact of FX rates on H1 2010 operating cash flow
operating cash flow
H1 2008 (1)
2008 Currency
H1 H1 2009
2010
Local currency (in millions)
Change Δ H1 €/X H1 2010/ 2010
H1 2009 U.S. dollar zone (USD)
209
Pound sterling zone (GBP)
209
1.328
174
164
+0.3%
0.870
‐6%
3,725
Korean won zone (KRW)
39,252
(1)
255
+28%
Czech koruna zone (CZK)
Australian dollar zone Australian
dollar zone
(AUD)
Polish zloty zone (PLN)
203
3,593
3,331
25.734
46,253
30
1,532.27
51
217
+4
+14.7%
1 486
1.486
+70%
211
+6
+5.2%
+31%
47
+5
+2.7%
‐7%
35,319
H1 2010/
H1 2009
264
+11
+20.9%
4.003
+22%
Impact on H1 2010 op. cash flow h fl
(€m)
+1
+7
+10.6%
2008 figures have not been restated for activities that are expected to be divested
39
Appendix 3: Gross investments by division
Appendix 3: Gross investments by division Growth
In €m
Water
Energy Services
Transportation
Other
Total H1 2010
Total H1 2009
Financial incl. Δ in Maintenance consolidation scope
116
107
189
33
40
181
103
2
10
1
458
324
710
248
Industrial capex
197
74
73
39
9
392
316
New operating financial assets
110
12
19
18
0
159
242
Total
530
308
313
162
20
1,333
1,516
40
Appendix 4: Debt management
Appendix 4: Debt management
Ratings
• Moody’s : • Standard & Poor’s : P‐2 / A3 negative outlook (confirmed July 8, 2010)
A‐2 / BBB+ stable outlook (April 21, 2010) Bond redemption: €23m in H1 2010
Average maturity of net debt : 9.5 years at June 30, 2010 vs. 10 years in 2009
Group liquidity: €9.7bn, including €4.6bn in undrawn confirmed credit lines( without any disruptive covenants)
Net Group liquidity: €6.3 bn
Net financial debt after hedges at June 30, 2010
Currencies (gross debt after hedges) at June 30, 2010
Other 19%
Fixed rate: 62%
(1)
o/w Euro: 80%
o/w USD: 52%
Euro 61%
GBP 10%
o/w GBP: 42%
USD 10%
Variable rate: 38%
Variable cap-rate: 6%
(1)
o/w RMB 4% and HKD 3%
41
Appendix 5: Impact of foreign currency on net debt
Appendix 5: Impact of foreign currency on net debt
Net debt at December 31, 2009
N
t d bt t D
b 31 2009
Net debt at June 30, 2010
€15,127m
€15
127
€16,027m
• Change Change
€900m
• Of which the impact of FX
Of which the impact of FX
€674m
US dollar
Pound sterling
Hong Kong dollar
Chinese renminbi yuan
€283m
€151m
€92m
€73m
42
Appendix 6: VE SA bond redemption schedule after the bond exchange completed July 1, 2010
the bond exchange completed July 1, 2010
1800
€0.02bn
CZK
€0.8bn
GBP
€1 8b
€1.8bn
USD
EURO €10.3bn
Average maturity of net debt moved from 9.5 years to 9.9 years after bond exchange completed July 1, 2010 y
g
p
y ,
1600
1400
Total €12.9bn
1200
1000
800
600
400
200
0
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
43
Appendix 7: Consolidated balance sheet
Appendix 7: Consolidated balance sheet
In €m
In
€m
Intangible assets (concessions)
Property, plant & equipment
Oth
Other non‐current assets
t
t
Operating financial assets (current and non‐current)
Cash & cash equivalents
Other current assets
Total Assets
p (including minorities)
Capital Financial debt (current and non‐current)
Other non‐current liabilities
Other current liabilities
Other current liabilities
Total Liabilities & Shareholders Equity
12/31/09
/ /
3,625 9,382 11 313
11,313 5,652 5,614 14,231 49,817 10,131 ,
21,086 4,381 14 219
14,219 49,817 06/30/10
/ /
4,114
9,903
12 306
12,306
5,723
5,058
13,744
50,848
10,739
,
21,715
4,868
13 526
13,526
50,848
44
Appendix 8: Main contracts won or renewed since the beginning of 2010
since the beginning of 2010
INTERNAL GROWTH
SMICTOM
‐ Renewals:
Flandres Morinie
 70 main contracts renewed in France during the 1st half 2010 in Water (o/w 36 in drinking water & 34 in wastewater), 108 in Waste (o/w 52 from local authorities & 56 from companies), 2 in Transportation & 85% of Lens
contracts due to expire during the 1st half 2010 renewed in Energy
contracts due to expire during the 1st half 2010 renewed in Energy
 SEDIF (Syndicat des Eaux d’Ile de France) (water) Public service concession based on the useful innovation on the following performances: Oise
‐ technological : single control center « ServO », water traceability,
Carré de Réunion
third‐generation remote meter reading ; GIMD
‐ environmental : « Zero carbon service » ; Caisse des
‐ social: social program called « Water for all » ; Dépôts
SEDIF
– Length: 12 years –
Length: 12 years – Cumul. rev.: €3bn Cumul rev : €3bn
Lanester
Rennes
‐ Outsourcing / Privatization:
Orléans
 « Biopôle » waste recovery center from the Angers Loire metropolitan area (1st VES mechanical Biopôle
biological treatment facility with composting & anaerobic digestion located in France) (waste)
– Length: 6 years – Cumul. rev.: €46m Ancenis
Angers Tours
 SMICTOM Flandres Morinie (waste) – Length: 8 years – Cumul. rev.: €40m
 Bayonne (transportation)
Bayonne (transportation) – Length: 7 years Length: 7 years – Cumul. rev.: €140m
Cumul. rev.: €140m
 Antibes (transportation) – Length: 5 years – Cumul. rev.: €55m
Montluçon
 Oise semipublic mass transit authority – Integrated services system for the Oise transit hub (transportation) – Length: 12 years – Cumul. rev.: €29m
Limoges
 Montluçon – Energy performance contract (energy) – Length: 10 years ‐ Engineering / Design & Build:
 The « Grand Prado » from the Reunion North Interdistrict Community (CINOR) (BOT) (water)
The « Grand Prado » from the Reunion North Interdistrict Community (CINOR) (BOT) (water)
– Length of contract: 20 years – Cumul. rev.: €270m incl. €75m 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, Orléans, Tours, Angers, Lens & Limoges) (energy)
Bayonne
 Town of Lanester (Morbihan) (DBO contract for a biomass heating network)
(energy) – Operating length: 24 years Antibes
Grand
Prado
PARTNERSHIPS
 Agreements between Veolia Environnement & Caisse des Dépôts relative to the Veolia Transport‐Transdev merger (1) (50/50 before the new group’s IPO) (transportation)
 Partnership between Veolia Environnement & the Groupe Industriel Marcel Dassault (GIMD) Partnership between Veolia Environnement & the Groupe Industriel Marcel Dassault (GIMD)
with the undertaking by GIMD to maintain its 5% holding of the stock & voting rights of Veolia Environnement for a period of 5 years
Strasbourg
 Renewals
 Outsourcing / Privatization
 Engineering / Design & Build
 Partnerships with other companies
(1) Signature of the definitive agreements announced on May 5, 2010
45
Vesteralen
INTERNAL GROWTH
‐ Renewals:
 Westminster (waste)
– Length: 7 years (7‐year option) – Cumul. rev.: €298m excl. option
 Medway Council Medway Council (1) (waste) – Length: 7 years Length: 7 years – Cumul. rev.: €125m Cumul. rev.: €125m
 Kristianstad/Skane County (transportation)
 E4 (interregional line) (transportation) – Length: 8 years – Cumul. rev.: €69m
 Frankfurt (transportation) – Length: 6 years – Cumul. rev.: €57m
 Lofoten (transportation) – Length: 7 years (3‐year option) – Cumul. rev.: €31m excl. option
 Vesteralen (transportation)
V t l (t
t ti ) – Length: 7 years (3‐year option) –
L th 7
(3
ti ) Cumul. rev.: €30m excl. option
C
l
€30
l
ti
 Staffordshire County Council (1) (waste) ‐ Length: 25 years – Cumul. rev. for the County Council : £1bn incl. third party waste & sale of electricity
‐ Engineering / Design & Build:
 Construction
Construction of 2 boilers wholly dedicated to biomass in Lodz & Poznan (energy)
of 2 boilers wholly dedicated to biomass in Lodz & Poznan (energy)
– Additional yearly rev. : €364m
 Construction & operation of a set of solar photovoltaic fields in the region of Pouilles (energy) – Operating length: 20 years – Cumul. rev.: €160 m for construction
Lofoten
Highlands
Moray
Tay
Scottish
Water
Solutions
Sweden
Norway
E4
Kristianstad
Tallinn
Poznan
United Kingdom
United Kingdom
Westminster
Medway
EXTERNAL GROWTH
 Acquisition
Acquisition (2) of several United Utilities activities in Europe (water): of several United Utilities activities in Europe (water):
‐ 58% stake in Sofiyska Voda (water & wastewater for the city of Sofia in Bulgaria) ‐ 26% stake in AS Tallinna Vesi (water & wastewater for the Tallinn in Estonia) ‐ 33% stake in Aqua SA (water & wastewater for the city of Bielsko Biala in Poland) ‐ portfolio of outsourcing, industrial engineering & infrastructure contracts in UK ‐ minority stakes in 3 PFI contracts in Scotland (Tay, Moray & Highlands) Germany
Francfurt
NWR Energy
CEZ
IFC
Czech Rep. Italy
Lodz
od
Bielsko Biala
Bulgaria
Sofia
 Acquisition
Acquisition of NWR Energy (leader in Czech Rep. In the mining & industrial sector) of NWR Energy (leader in Czech Rep. In the mining & industrial sector)
from the NWR group (energy)
 Renewals
Pouilles
 Interests acquisitions in others companies
Partnerships with other companies
PARTNERSHIPS
 Partnership between Veolia Energy‐Dalkia & CEZ (1er company in the Czech energy market) (energy): ‐ disposal by Dalkia International of its 15% stake in Dalkia Ceska Republica’s shares to CEZ ‐ disposal by Dalkia Ceska Republica of its 85% stake in Dalkia Usti Nad Labem to CEZ
 Partnership between CREED (Veolia’s Waste management & Energy Research Center),
P
hi b
CREED (V li ’ W
&E
R
hC
)
the company Dalkia & Lodz Technical University (energy)
 Partnership between Veolia Voda & the IFC (International Financial Corporation – World Bank) (water) ‐ 9.5% stake acquisition via a rights issue in Veolia Voda by IFC  Partnership between Veolia Water & Scottish Water with the new JV establishment « Scottish Water
Solutions » (backed notably by Veolia Water UK) dedicated to delivering the Scottish Water investment
program over the 2010‐2015 period, one of the largest in the UK water industry (water)
Estonia
Poland
Staffordshire
(1)
(2)
Signature announced on July 2010
Transaction subject notably, to the competition authorities & to the EBRD’s approval for Continental Europe (excl. Poland)
46
INTERNAL GROWTH
‐ Renewals:
 Boston (transportation) – Length: 2 years – Cumul. rev.: €486m  York (Bus Rapid Transit) (transportation)
‐ Length: 5 years – Cumul. rev.: €71m Canada
 Phoenix (transportation) – Length: 5 years – Cumul. rev.: €314m
 York (bus & transport of people with special needs) (transportation)
York
Cleantech
 Savannah (transportation)
Boston
United States
Group
Baltimore Phoenix
cooling network
 Boston (trigeneration for 6 hospitals) (energy)
( g
p
)(
gy)
– Length: 10 years – Cumul. rev.: $70m
$
Savannah
 Suburbio hospital under PPP (Public‐Private Partnership) in the State of Bahia (energy)
– Operating length: 20 years – Cumul. rev.: €107m
g
g/
g
(1)
 Petrobras P63 & Tupi (D&B) (water) – Cumul. rev.: €41m
Brazil
EXTERNAL GROWTH
S b rbio Hospital
Suburbio Hospital
 Acquisition of a cooling network in Baltimore (energy)
PARTNERSHIPS
 Partnership between Veolia Environnement & Cleantech Group (leading global innovation network of start‐ups
(leading global innovation network of start
ups & investors in & investors in
clean technologies) with the program « Veolia Innovation Accelerator » (VIA) with the objective to boost cleantech innovation by cooperating with the most innovative start‐ups
 Renewals
 Interests acquisitions in other companies
Interests acquisitions in other companies
(1) Announced on Aug. 2010
P63 & Tupi p
Petrobras
47
INTERNAL GROWTH
China
‐ Renewals:
l
 Rockingham – Manudrah (transportation)
– Length: 10 years – Cumul. rev.: €150m
Shenzhen Baoan
/
 Shenzhen Baoan Sludge (D&B) (water) – Cumul. rev.: €17m
Australia
Rockingham
 Renewals
48
INTERNAL GROWTH
 Khenifra (D&B) (water)
Khenifra (D&B) (water) – Cumul. rev.: €16m
Cumul. rev.: €16m
PARTNERSHIPS
Renault plant
 Partnership
Partnership between Veolia Environnement & the Qatari Diar between Veolia Environnement & the Qatari Diar
fund with the undertaking by the sovereign fund to maintain its 5% holding of the stock & voting rights of Veolia Environnement for a period of 3 years with a common ambition to work together on infrastructure & utilities projects in the Middle East & North Africa
f
 Partnership between Veolia Environnement, Renault & the Kingdom of Morocco to build the Renault’s Tangier plant
which emits zero carbon & zero industrial liquid discharges
(multiservices)
Khenifra
Morocco
Qatari Diar
Qatar
49
Appendix 9: Accounting treatment of renewal expenditures according to p y g
p
the new amendment specifying the implementation conditions of IAS7
Veolia Environnement is generally subject to the obligation of maintaining and repairing assets of facilities it manages under public service contracts. In accounting terms, this obligation is reflected by h bl
fl
db
renewal expenses (for assets covered by public‐private partnership service contracts in France).
In application of the new amendment specifying the li i
f h
d
if i
h
implementation conditions of IAS7 Statement of Cash Flow, renewal expenditures are booked as operating expenses as of January 1, 2010 whereas they were previously treated as maintenance
2010, whereas they were previously treated as maintenance expenditures. As a consequence, during reconciliation, in the cash flow statement between “Net
statement, between Net income attrib. to equity holders of income attrib to equity holders of
parent” and “Net cash flow from operating activities”, renewal expenses are no longer eliminated, as of January 1, 2010, in the “Depreciations, provisions and operating value impairments” item.
The deduction of renewal expenditures from the operating cash flow and maintenance costs, has no impact on the cash position, net income, or shareholders’ equity.
50
Appendix 9: Accounting treatment of renewal expenditures according to p y g
p
the new amendment specifying the implementation conditions of IAS7
€m
Revenue
4,105
2,275
Maintenance capex
1,860
€m
Revenue
(2)
Renewal expenditures 2008 adjusted (1) and adjusted for IAS 7 35,765
Operating cash flow
Operating cash flow(2) ‐ net investments
(1)
2008
adjusted (1)
35,765
‐ 390
2,275
‐ 390
601
2009
published
3,956
1,932
Maintenance capex
1,632
Operating cash flow(2) ‐ net investments
2,357
1,470
601
Renewal expenditures
34 551
34,551
Operating cash flow
3,715
2009 adjusted for IAS 7
34 551
34,551
‐ 361
3,595
1,932
‐ 361
1,271
2,357
To ensure the comparability of financial years, 2008 financial statements have been adjusted:
- by the divestment of Freight operations in the Transportation division in December 2009 and of Waste-to-Energy operations in the Waste Division in the United
States in August 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 the Eolfi activities in the Energy
Services division;
Including the operating cash flow from discontinued operations
51
Appendix 10: Veolia ‐ Transdev: Calendar Appendix 10: Veolia Transdev: Calendar
May 5, 2010: Signature of definitive agreement for merger of Veolia Transport with Transdev
g
p
Joint notification to competition authorities / oversight of economic concentration procedure
Closing: after closing unresolved conditions and notably after approval from competition authorities
h
h f l
k
d
IPO within 12 months of closing, market conditions permitting
Investor Relations contact information
Investor Relations contact information
Ronald Wasylec, Directeur des Relations avec les Investisseurs et Actionnaires individuels
Téléphone +33 1 71 75 12 23
e‐mail ronald.wasylec@veolia.com
Xavier d
Xavier
d’Ouince
Ouince
Téléphone +33 1 71 75 19 34
e‐mail xavier.d‐ouince@veolia.com
38 Avenue Kléber –
38
A
Kléb
75116 P i France
75116 Paris ‐
F
Fax +33 1 71 75 10 12
Terri Anne POWERS, Director of North American Investor Relations
200 East Randolph Street
Suite 7900
Chicago, IL 60601
Tel +1 (312) 552 2890
Tel +1 (312) 552 2890
Fax +1 (312) 552 2866
e‐mail terri.powers@veoliaes.com
http://www.veolia-finance.com
53

- Finance

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