2014 First Half Results. August 28, 2014

Transcription

1 2014 First Half Results August 28, 2014

2 Disclaimer Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document contains "forwardlooking statements" within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 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 These "non-gaap financial measures" are being communicated and made public in accordance with the exemption provided by Rule 100(c) of Regulation G Unaudited figures 2

3 2014 first half results Highlights Antoine Frérot, CEO 3

4 Back to growth due to solid strategic execution Good revenue performance, up 3.0% at constant FX to 11,232M Water and Waste activities: up 6.5% at constant exchange rates and +3.6% at constant scope & FX Adjusted operating cash flow of 1,009M, up 9.9% at constant exchange rates Excluding headquarters cash restructuring costs (- 32M in 2Q2013 vs. - 22M in 2Q2014), adjusted operating cash flow increased 8.3% at constant FX Water and Waste activities: up 13.9% at constant FX (versus +9.6% in Q1) Good momentum in the UK, US and Australia (mainly Waste), as well as in Central Europe (Water) Rebound in France performance, mainly due to cost cutting Negative impact of weather in Dalkia, predominantly in Q1 4

5 Significant improvement in 2 nd quarter results o Revenue: up 3.1% at constant scope & FX in Q2, vs. -1.7% in Q1 o o o Water: Stable Operations revenue and strong rebound in Technologies and Networks (+20.1% à constant scope & FX in Q2) due to the ramp up of large projects, mainly in the Middle East Waste: confirmed return to more favorable dynamics (mainly UK and Australia) Energy Services: Negative weather impact mainly in Q1 o Adjusted operating cash flow: significant improvement in Q2, up 20.5% at constant exchange rates, vs. +2.3% in Q1, due to internal management efforts and ramp in cost savings o Water and Waste: up 13.9% in H1, (+9.6% in Q1, and +18.7% in Q2) mainly due to cost cutting in France o Dalkia France: negative weather impact predominantly in Q1, less in Q2 o Restructuring costs: - 32M in H and - 22M in H

6 Cost savings: continued execution of the plan o 104M in gross savings in H M in implementation costs 72M in net savings (1) Impact on Operating Income before IFRS 10 & 11 (in M) H H H H H Cumulative June-end 2014 Cumulative 2014-end Objective Gross savings Water Waste Energy Services Holding 17% 19% 25% 39% 8% 4% 5% 2% 14% 48% 19% Purchasing Organizational efficiency Addressing loss making contracts Technical optimization IT Reduction of external expenses Other (1) Contribution post IFRS 10 &11: 63M 6

7 A more focused Company with the majority of businesses now fully controlled Dalkia International now fully owned starting July 25, 2014 Operational integration of BUs in each country already done Higher expected synergies Positive impact on net financial debt Proactiva fully owned since November 2013 Buy back of minorities in Central Europe water operations Exit of joint ventures where Veolia didn t have full control Berlin water Marius Pedersen Next and final step Transdev / SNCM 7

8 Continuing organic growth (1/2) The company s traditional markets are changing: Most attractive concessions financed by the company Other interesting concessions financed by partners Pure operation or construction contracts - no investment by Veolia Brent Council UK Waste services ( 142M, 9 years) Grand Lyon: water services 660M, 8 years Nantes Metropole Drinking water plant ( 656M, group share) Basra, Iraq Desalination, $115M, 5 years Az Zour North, Kuwait Construction desalination plant 320M Japon, Hakone Water services ( 14M, 5 years) Singapore Urban waste ( 138M, 6 years) Santiago du Chili Waste collection ( 40M, 8 years) Buenos Aires, Argentina Waste collection ( 500M, 10 years) Hunter Water, Australia O&M, water treatment plants: 193M 8

9 Continuing organic growth (2/2) The company s key growth markets in environmental services: Oil & gas Creative solutions for cities Dismantling Circular economy Hazardous pollution Merrit & Ft Saint James Operation 2 biomass plants ( 1.1bn, 30 years) Ecopetrol America Oil & Gas ($73M) Shell Carmon Creek Water treatment plant DC Water Washington ($12M) UK Destruction of hazardous waste Dismantling (RER train cars, ships) Novartis Industrial Utilities ( 925M) BP, Oman Oil & Gas ($75M) FPCC Taïwan Oli & gas ( 15M) 2014 external growth limited to further building know how Net financial debt to stabilize around 8 billion at year end

10 Execution of the Company s strategy is driving commercial successes In revenue terms, 60% of wins from new contracts, while 40% from the renewal of existing contracts Growing markets and confirmed confidence from our clients 60% of wins in the industrial sector Veolia is already well positioned to benefit from growth in the industrial sector and is progressing toward the communicated portfolio rebalancing 40% of new revenue from awarded contracts have come from Veolia s key strategic growth areas Contract renewals 30% 40% Industrial Key growth areas H Revenue Gains 60%% 50% 40% 10% 60% 70% New 30% contracts 40% 18% 60% Municipal Traditional model 10

11 Oil and gas: a growth area where Veolia is a leading player A comprehensive portfolio from nonconventional upstream to downstream solutions Operations expertise: a differentiating factor and an element of reliability Technologies Injection water Produced water onshore & offshore Process water; Waste water Sludge management Hazardous waste Heating/ cooling systems Mobiles.etc More than 100 installations directly operated Global network Global presence Network of Global Account Managers dedicated to the Industrial sector Ability to rapidly deploy resources During the first half of 2014, significant wins throughout the entire Industrial value chain (non-exhaustive list) Ecopetrol Colombia Produced Water (Oil extraction) Shell Carmon Creek Produced water recycling for vapor injection Oil Sands Refap refinery Oily sludge recovery, start of operation Tangshan Tangsteel Gases (LNG) Waste water tretament and reuse, Cooling Water BP Khazzan (Oman) Water for gas production, Tight Gas Angola Drill cuttings from O&G extraction Shell Showa Japan Oily Sludge recovery FPCC Taiwan Waste water treatment and recycling for the largest petrochemical plant in Taiwan ExxonMobil Singapore White Oils Tank Cleaning 11

12 Oil and gas: focus on BP Khazzan The project: design, build and operation of a water treatment plant necessary to the development of the first phase of tight gas well development in Khazzan, in the Sultanate of Oman Capacity 6,000 m 3 /day Initial start up and operations for a period of up to 5 years Total contract revenue around $75 million Veolia brings unique technological expertise Our operational know how is a key differentiating factor Local municipal presence complements industrial sector development First step in a major scale project (300 wells expected to be developed, producing more than 28 million m 3 of gas per day) Positioning in non-conventional gas with one of the largest tight gas projects in an elevated stressed water environment 12

13 Reconfirmed 2014 objectives 2014 Objectives (1) Revenue growth Around 10% growth in adjusted operating cash flow at constant exchange rates Good operational performance to continue Cost savings impact : ongoing execution of the plan Significant growth in adjusted operating income Reduction in financial expense Significant growth in adjusted net income Continuing focus on capex management and growing cash generation (1) At constant exchange rates 13

14 Mid-term objectives : Transformation period Objectives achieved 5 billion in divestments (1) 2013 net financial debt under new accounting standards: o Net financial debt between 8bn and 9bn (2) o Adjusted net financial debt between 6bn and 7bn (2) Cost reductions: o in 2013: 170 M net cumulative impact (3) Extended dividend commitment of 0.70 (4) per share in 2013 (5) and 2014 (5) Beginning 2015 Average organic revenue growth> 3% per year (mid cycle) Average adjusted operating cash flow growth > 5% per year (mid cycle) Leverage ratio (6) of 3.0x (7) Mid term: payout ratio in line with historic level Cost reductions in 2015: 750M net cumulative impact (3) (1) Excluding debt reduction of 1.4 billion related to the exit of the Berlin contract (2) Before closing exchange rate impact (3) Net of implementation costs, of which, due to new accounting standards for joint ventures, ~80% will benefit adjusted operating income. (4) Subject to the approval of Veolia s Board of Directors and the Annual General Shareholders Meeting (5) In cash or shares (6) Adjusted net financial debt /(Operating cash flow before changes in working capital + OFA repayments) (7) +/ 5% 14

15 2014 first half results Results for the period ended June 30, 2014 Phillipe Capron, CFO 15

16 2014 first half key figures In M Results consistent with our annual guidance Significant improvement in adjusted operating cash flow margin H re-presented (1) H constant FX Revenue (2) 11,074 11, % Revenue excluding Dalkia France 9,250 9, % Adjusted operating cash flow 930 1, % Adj. op. cash flow excluding Dalkia France % Adj. op. cash flow margin (excl. Dalkia France) 8.6% 9.3% +0.7 pp Adjusted operating income (3) % Adjusted net income Group share % (4) Gross investments (5) Net FCF (6) Net financial debt 10,031 8,646 (1) 2013 re-presented for IFRS 5 (the representation associated with IFRS 5 only applies to the income statement: see Appendix 2) (2) + 0.6% at constant scope & FX (3) Including the share of adjusted net income of joint ventures and associates of entities viewed as core Company activities (excluding Transdev, which is not viewed as a core Company activity) (4) At current consolidation scope and exchange rates (5) Including 129M in financial investments (buyback of water minorities in the Czech Republic and Kendall purchase) versus 22M in H (6) Net Free Cash Flow: cash flow before net financial divestments and after payment of financial expense and taxes represents the sum of adjusted operating cash flow and operating cash flow from financing activities, dividends received from joint ventures, principal payments on operating financial assets, changes in working capital for operations and industrial investments and industrial divestitures, excluding net industrial investments of discontinued operations (and excluding the hybrid issuance in euros and pound sterling for 1,454M (including coupons paid) in January 2013.) 16

17 Good revenue performance: +3.6% at constant scope & FX excluding Dalkia France REVENUE IN M 11,074 11, ,824 1,552 2,000 2,102 1,884 2,162 Good resilience in France Water: Almost stable revenue (-1.2%) despite unfavorable contract evolution; stable volumes, but lower price indexation (+1.3% vs. +2.6%) Waste: Stable revenue despite lower volumes and scrap metal prices in sorting/recycling. Lower landfill volumes, but better mix. Continued growth in Europe excluding France: UK waste, Central & Eastern Europe Significant growth in Rest of the World mainly Australia and the US (waste, energy services) Strong growth in Global businesses, (+7.8% at constant scope & FX): hazardous waste growth (+6%), SADE (+7%, with higher backlog) and start up of large projects in VWS (Revenue +10% at constant scope & FX) 2,366 2,427 2,782 2,765 constant FX constant scope & FX France -0.6% -0.6% -0.6% Europe excl. France +2.6% +2.2% +2.4% Rest of the World +14.7% +22.0% +8.0% Global businesses +5.1% +7.2% +7.8% H re presented (1) H Dalkia France -14.9% -14.9% -14.6% Total +1.4% +3.0% +0.6% Total excl. Dalkia France +4.6% +6.5% +3.6% (1) See Appendix 2 17

18 Renewed growth in Water and Waste in the first half REVENUE IN M 11,074 11,232 5,000 5,113 Water: +3.1% at constant scope & FX Stability in Operations activities: in France, flat volumes and lower price indexation; in Central & Eastern Europe, higher prices offset lower volumes. Revenue decline in Germany (weather impact at BVAG) Strong rebound in Technologies & Networks in Q2 (Sade, VWS) Waste: +2.8% at constant scope & FX: encouraging first half, similar trend as Q1 Energy Services: Dalkia France revenue decline of 14.6% related to weather and end of gas cogeneration contracts 3,985 4,175 constant FX constant scope & FX 1,972 1, H re presented (1) (1) See Appendix 2 H Water +2.3% +4.3% +3.1% o/w Operations +1.0% +2.7% +0.4% o/w Technologies & Networks +5.0% +7.7% +8.9% Waste +4.8% +6.1% +2.8% Energy Services -7.0% -6.5% -10.1% Total +1.4% +3.0% +0.6% Total excluding Dalkia France +4.6% +6.5% +3.6% 18

19 Waste dynamics confirmed Revenue up 2.8% at constant scope & FX Continuous trend improvement H Prices and volumes of recycled materials -0.6% Volumes/ activity levels +1.7% Service price increases +0.8% Other (including construction revenue) +0.9% Currency effect -1.3% Scope +3.3% Raw material prices: paper prices stabilized, but continued decline in scrap metal prices and volumes France: Stable revenue; improvement in adjusted operating cash flow due to cost cutting, in an environment that remains challenged: weak price revisions and impact of lower scrap metal volumes and prices. UK: Revenue +11% due to ramp up and growth in PFIs (start up of Staffordshire, incinerator capacity utilization of 91.4%, higher volumes incinerated by 22%), and commercial successes Germany: Volumes declined, but adjusted operating cash flow improved significantly due to restructuring Hazardous waste: Continued growth (+6%) 19

20 Strong improvement in Q2 adjusted operating cash flow ADJUSTED OPERATING CASH FLOW IN M H re presented (1) 1,009 H (1) See Appendix 2 At constant FX, adjusted operating cash flow increased 9.9% and +13.9% excluding Dalkia France Rebound in France due to cost cutting Continued growth in Europe excluding France: primarily due to UK waste Significant growth in Rest of the World, mainly in Australia (waste) and the US (energy services), and benefit from Proactiva consolidation ( 40M) Growth in Global Businesses: mainly hazardous waste constant FX France +6.0% +6.0% Europe excl. France +2.3% +2.1% Rest of the World +37.5% +44.3% Global businesses +0.6% +1.7% Dalkia France -14.8% -14.8% Total +8.5% +9.9% Total excluding Dalkia France +12.3% +13.9% 20

21 Adjusted operating cash flow: improved performance in Water and Waste o o o Water: Strong adjusted operating cash flow growth in Operations activities due to efficiency gains in France and continued positive trends outside of France Waste: Stable volumes in Europe, operational improvement in France and Germany, and significant growth in the UK (PFIs) and Australia Energy Services: Expected decline in Dalkia France (end of gas cogeneration contracts) Weather negatively impacted France but was favorable in the US ADJUSTED OPERATING CASH FLOW IN M 930 1, Adjusted Operating Cash Flow constant FX Water +2.2% +3.8% Waste +14.8% +16.0% H re presented (1) H (1) See Appendix 2 Energy Services -5.4% -4.4% Total +8.5% +9.9% Total excluding Dalkia France +12.3% +13.9% 21

22 Adjusted operating cash flow: renewed growth dynamics Adjusted operating cash flow grew 8.5%, or +9.9% at constant exchange rates , H Adj. Op. Cash Flow FX Dalkia France (weather & end cogen contracts) Proactiva Volumes / construction Price, net of cost inflation Cost cutting & other H Adj. Op. Cash Flow Unfavorable volume impact, mainly in water (continued commercial erosion in French water), offset by the start up of waste assets Positive price impact, net of cost inflation Strong positive impact from cost cutting 22

23 Solid adjusted operating income growth despite the unfavorable weather impact on Dalkia International s results o Adjusted operating income of 564M, up 5.8% at constant FX compared to 541M at June 30, 2013 o Net charges to provisions: - 17M versus + 45M in H (pension provision reversal in 2013) o Share of net income of JVs and associates excluding capital gains down Y-Y due to significant negative weather impact in Dalkia International ops In M H H re-presented (1) constant FX Adjusted operating cash flow 930 1, % +9.9% Depreciation & amortization Net capital gains (2) Provisions, fair value adjustments and other (3)(4) Share of adjusted net income of joint ventures and associates (excluding capital gains on divestments) Adjusted operating income (5) % +5.8% (1) See Appendix 2 (2) Including 4M for fully consolidated companies and 53M in JVs (of which Marius Pedersen + 49M) (3) Including charges related to voluntary departure plans not included in adjusted operating income (- 32M in H and - 22M in H1 2014) (4) Including 2013/2014 net pension provision reversal impact of negative 32M (5) Including share of adjusted net income of joint ventures and associates 23

24 Reduced net financing costs In M H H Cost of net financial debt Cost of net financial debt re-presented to calculate borrowing rate (1) % % (5) In M H H Closing net financial debt (2) 10,031 8,646 Average net financial debt (3) 10,221 8,586 Average gross debt (4) 14,906 11,712 Gross cost of borrowing 3.73% 4.04% (5) Average cash balance 5,053 3,547 RATING Moody s : P 2/ Baa1 stable outlook Standard & Poor s : A 2 / BBB negative outlook Rate 0.68% 0.90% (1) Excluding financial costs of discontinued operations and excluding costs of bond buybacks (treated as a non-recurring item) (2) Net financial debt represents gross financial debt (non-current borrowings, current borrowings and bank overdrafts and other cash position items), net of cash and cash equivalents and excluding fair value adjustments of derivatives hedging debt. (3) Average net financial debt is the average of monthly net debt during the period (4) Excluding bank overdrafts (5) Excluding the impact of the integration of Proactiva debt, the borrowing rate of net financial debt is 5.03%, and is 3.94% for gross debt 24

25 Reduction in adjusted tax rate The company s adjusted tax rate was 35.3% at June 30, 2014 vs. re presented 42.2% at June 30, 2013 Income base Taxes In M before taxes Effective Restructuring Adjusted

26 Significant increase in adjusted net income In M H (1) H constant FX Adjusted operating income (2) % Net financial costs (3) Income tax expense Non-controlling interests Adjusted net income attributable to owners of the Company % (4) (1) See Appendix 2 (2) Including share of adjusted net income of joint ventures and associates considered as core Company activities (3) Including other financial income and expenses (4) At current consolidation scope and exchange rates 26

27 Reduced impact of non-recurring items H H re-presented (1) Adjusted net income attrib. to owners of the Co Non-recurring items Of which: Goodwill impairments Charges related to departure plans Net income from discontinued operations Others (2) Published net income attrib. to owners of the Co (1) See Appendix 2 (2) Includes - 43M cost of bond buybacks in H

28 Net FCF (1) improvement of roughly 400M in H1 o Continued capex discipline: Gross industrial investments down by 5% (mainly France, Dalkia, the US and Canada) o Net FCF (1 & 2) improvement of 400M Negative FCF in H1 (WCR seasonality) but significantly improved compared to H due to higher adjusted operating cash flow, capex discipline, improved WCR and lower financial expense Net financial debt ( M) o Net financial debt of 8.6 billion Slightly higher compared to Dec. 31, 2013 due to seasonality of operating working capital (1) Cash flow before net financial divestments and after payment of financial expense and taxes represents the sum of adjusted operating cash flow and operating cash flow from financing activities, dividends received from joint ventures, principal payments on operating financial assets, changes in working capital for operations and industrial investments and industrial divestitures, excluding net industrial investments of discontinued operations. (2) Excluding the hybrid issuance in euros and pound sterling of 1,454M (including coupons paid) in January ,031 8,177 8,646 June 30, 2013 Dec. 31, 2103 June 30,

29 Significant improvement in net FCF (1) Net FCF excluding divestments & acquisitions, before dividends: - 163M Net 1H13 FCF Op. Cash Flow Bef. WCR Net capex Oper. WCR Financial expense Taxes Dividends received 1.8 Net 1H14 FCF (1) Cash flow before net financial divestments and after payment of financial expense and taxes represents the sum of adjusted operating cash flow and operating cash flow from financing activities, dividends received from joint ventures, principal payments on operating financial assets, changes in working capital for operations and industrial investments and industrial divestitures, excluding net industrial investments of discontinued operations. 29

30 Change in net financial debt Net FCF excluding divestments & acquisitions, before dividends : - 163M ADJUSTED NET FINANCIAL DEBT: 5,873M ADJUSTED LEVERAGERATIO: 2.8X NFD 12/31/13 Op. Cash Flow Bef. WCR Net capex oper. WCR Interest Taxes Div received Finan capex Finan. divests Div paid (incl.minos & hybrid) FX Other NFD 6/30/ , , ,646 30

31 Asset arbitrage Continued asset divestments 311M divested in the first half of 2014 Marius Pedersen for 240M Divestments in process (enterprise value): Veolia Israel: 250M Poland waste: 19M Morocco water: proposed acquisition by municipalities Transdev / SNCM Acquisitions/ minority buybacks Buy the 9.5% stake owned by IFC in Veolia Voda (Water, Czech Republic) for 91M Acquisition of 51% of the Kendall cogeneration plant in the Boston region in the US for 19M (with the option to move up to 100% on the same basis) 31

32 Pro Forma group figures including Dalkia International at 100% & excluding Dalkia France In M H re-presented H constant FX in H1 constant FX in Q1 constant FX in Q2 Revenue 11,715 11, % +1.0% +3.4% Adjusted operating cash flow Gross industrial investments including new OFAs 1,113 1, % -1.5% +16.9% NA NA NA 32

33 Reconfirmed 2014 objectives Revenue growth 2014 Objectives (1) Around 10% growth in adjusted operating cash flow at constant exchange rates Significant growth in adjusted operating income Reduction in financial expense Significant growth in adjusted net income Continuing focus on capex management and growing cash generation (1) At constant exchange rates 33

34 Mid-term objectives : Transformation period Objectives achieved 5 billion in divestments (1) 2013 net financial debt under new accounting standards: o Net financial debt between 8bn and 9bn (2) o Adjusted net financial debt between 6bn and 7bn (2) Cost reductions: o in 2013: 170 M net cumulative impact (3) Extended dividend commitment of 0.70 (4) per share in 2013 (5) and 2014 (5) Beginning 2015 Average organic revenue growth> 3% per year (mid cycle) Average adjusted operating cash flow growth > 5% per year (mid cycle) Leverage ratio (6) of 3.0x (7) Mid term: payout ratio in line with historic level Cost reductions in 2015: 750M net cumulative impact (3) (1) Excluding debt reduction of 1.4 billion related to the exit of the Berlin contract (2) Before closing exchange rate impact (3) Net of implementation costs, of which, due to new accounting standards for joint ventures, ~80% will benefit adjusted operating income. (4) Subject to the approval of Veolia s Board of Directors and the Annual General Shareholders Meeting (5) In cash or shares (6) Adjusted net financial debt /(Operating cash flow before changes in working capital + OFA repayments) (7) +/ 5% 34

35 Appendices

36 Appendix 1: Currency movements Main currencies 1 = xxx of foreign currency US dollar Average rate Closing rate UK pound sterling Average rate Closing rate Australian dollar Average rate Closing rate Czech crown Average rate Closing rate H H Δ 2014 vs % +4.4% 3.5% 6.4% +15.7% +2.6% +6.8% +5.8% The average rate applies to the income statement and statement of cash flows The closing rate applies to the balance sheet 36

37 Appendix 2: Main 1H13 figures re-presented for IFRS (4) In M 6M ended June 30, 2013 Published IFRS5 Adjustment (1) 6M ended June, 2013 Re presented Revenue 11, ,073.8 Adjusted operating cash flow Operating income Operating income after share of net income of equity accounted entities (2) Adjusted operating income (3) Net income Group share Adjusted net income Group share Gross investments Free Cash Flow Net Financial Debt 10,031 10,031 Loans granted to joint ventures 3,302 3,302 Adjusted Net Financial Debt 6,729 6,729 (1) Reclassification of the Veolia Transdev joint venture contribution into Share of net income (loss) of other equity-accounted entities in continuing operations (2) Including the re-presented share of net income of joint ventures and associates for the six months ended June 30, 2013 (3) Including the re-presented share of adjusted net income of joint ventures and associates for the six months ended June 30, 2013 (4) Non audited figures 37

38 Appendix 3: Quarterly revenue by segment 1 st quarter 2 nd quarter 1st half In M 2013 Represented 2014 (1) constant scope & FX 2013 Represented 2014 (1) constant scope & FX 2013 Represented (1) 2014 constant scope & FX France 1,366 1, % 1,416 1, % 2,782 2, % Europe excl. France 1,171 1, % 1,195 1, % 2,366 2, % Rest of World 941 1, % 943 1, % 1,884 2, % Global Businesses % 1,014 1, % 2,000 2, % Dalkia 1, % % 1,824 1, % Other % % % Company 5,757 5, % 5,317 5, % 11,074 11, % (1) See Appendix 2 38

39 Appendix 3: Quarterly revenue by business 1 st quarter 2 nd quarter 1st half In M 2013 Represented 2014 (1) constant scope & FX 2013 Represented 2014 (1) constant scope & FX 2013 Represented 2014 (1) constant scope & FX Water 2,494 2, % 2,507 2, % 5,000 5, % Waste 1,932 2, % 2,052 2, % 3,985 4, % Energy Services 1,268 1, % % 1,972 1, % Other % % % Company 5,757 5, % 5,317 5, % 11,074 11, % (1) See Appendix 2 39

40 Appendix 4: Back to revenue growth 11, , H Revenue FX Dalkia France Proactiva Volumes / Construction Price impact Other H Revenue Good commercial momentum outside France (including start up of waste assets) Strong growth in Construction activities (VWS and Sade) Favorable price impact despite the decline in scrap metal prices Dalkia France: weather impacts and end of gas cogeneration contracts 40

41 Appendix 5: Waste revenue breakdown by activity 1st Half st Half

42 Appendix 6: Waste Revenue vs. Industrial Production Weighted average industrial production indices for 4 key countries including SARP/SARPI: France, U.K. (excl. PFIs), Germany, and North America (excl. US Solid Waste and WTE beginning 2012) Sources: Until March 2014 OECD 2Q 2014: Average for the last three months OECD data for the US, France, Germany and U.K. 42

43 Appendix 7 : Waste Evolution of raw materials prices (paper, cardboard, scrap metals) Evolution of raw materials prices ( /t) 43

44 Appendix 8: Efficiency plan 53M in gross savings in H % 25% 18% 6% 2% 25% 25% 15% 47% Water Waste Energy Services HQ 38% Purchasing Contract or entity modification Technical optimization Organizational efficiency Reduction of external expenses Insurance & Risk 44

45 Appendix 9: Gross investments by business Growth In M Maintenance New Operating Financial Assets Industrial Financial incl. in scope* Total Water Waste Energy Services Other** Total H Total H re-presented * Including partial acquisitions between shareholders with no change in control ** Including Proactiva 45

46 Appendix 10: Statement of cash flows En M H H Operating cash flow before changes in working capital (1) 989 1,049 Reimbursement of operating financial assets Total cash generation 1,084 1,141 Gross Investments Variation of working capital Taxes paid Interest expense Dividends (2) Dividends received from joint ventures and associates (3) Others (4) +1, Divestments Free cash flow Impact of exchange rates Others Change in net financial debt Net financial debt 10,031 8,646 Loans granted to joint ventures 3,302 2,773 Adjusted net financial debt 6,729 5,873 (1) Including financial cash flows and operating cash flow from discontinued operations (2) Dividends paid to shareholders and non controlling interests (3) Including dividends received: China 19M (4) Includes primarily the hybrid coupon payment for 68M in H

47 Appendix 11: Debt management (1/2) o Arrival at term on April 24, 2014 of the 2014 euro-denominated bond with nominal value of 575M o o o Group liquidity: 7.2 billion, including 4.4 billion in undrawn confirmed credit lines (without disruptive covenants) Net Group liquidity: 4.1 billion Average maturity of net financial debt: 9.1 years as of June 30, 2014 versus 10.1 years at the end of Average maturity of gross debt: 6.9 years as of June 30, 2014 vs. 6.8 years ad the end of Net financial debt after hedges at June 30, 2014 (*) Currency breakdown of gross debt (after hedges) at June 30, 2014 (*) Fixed rate : 82% Variable rate: 18 % (*) before non active caps at June 30, 2014 PLN 7% HKD 8% Others AUD 3% 10% RMB 3% EUR 44% GBP 18% USD 7% 47

48 Appendix 11: Debt management (2/2) 1000 EUR GBP USD CNY 2014 amortization

49 Appendix 12: Net liquidity December 31, 2013 June 30, 2014 Veolia Syndicated credit lines 3, ,962.5 Bilateral credit lines Lines of credit Cash and cash equivalents 3, ,317.0 Total Veolia 7, ,668.6 Subsidiaries Cash and cash equivalents Total Subsidiaries Total Group liquidity 8, ,226.4 Current liabilities and bank overdrafts 3, ,127.6 Total Group net liquidity 5, ,

50 Appendix 13: Consolidated statement of financial position December 31, 2013 June 30, 2014 Intangible assets 6,305 6,362 Property, Plant & equipment 4,161 4,021 Other non-current assets 6,940 5,983 Operating financial assets (current and non-current) 1,796 1,805 Cash and cash equivalents 4,274 2,875 Other current assets 12,766 13,719 Total Assets 36,242 34,765 Capital (including non-controlling interests) 9,683 9,578 Financial debt (current and non-current) 12,626 11,624 Other non-current liabilities 2,643 2,726 Other current liabilities 11,290 10,837 Total Liabilities 36,242 34,765 50

51 Investor Relations contact information Ronald Wasylec Senior Vice President, Investor Relations Telephone : e mail : ronald.wasylec@veolia.com Ariane de Lamaze Telephone : Fax : e mail : ariane.de lamaze@veolia.com 38, avenue Kléber Paris France Terri Anne Powers Director of North American Investor Relations 200 East Randolph Street, Suite 7900 Chicago, IL Tel : +1 (312) Fax : +1 (312) e mail : terri.powers@veolia.com 51