Investor Relations August 2, August,

Transcription

1 August,

2 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 Such forwardlooking 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 2

3 Summary 1. Introduction - Convergence Plan advancement Antoine Frérot 2. First half 2012 results Pierre-François Riolacci 3. Action plans for the second half of 2012 Antoine Frérot 4. Appendices 3

4 Antoine Frérot Antoine Frérot 4

5 Transformation is even more necessary 1. Refocus and deleverage the company 2. Evolve our business models 3. Streamline our organization 4. Reduce our costs Improve financial flexibility Focus the company on our value-added solutions Capture highly profitable organic growth opportunities 5

6 Renewed governance Board of Directors 3 new members nominated at the Annual General Shareholders meeting: Maryse Aulagnon Nathalie Rachou Jacques Aschenbroich Executive Committee 4 new members in the last year: Sylvain Boucher Franck Lacroix Jean-Marie Lambert Jérôme Le Conte New momentum for the Convergence Plan since March 16th 6

7 Convergence Plan: results as of June 30, 2012 Asset divestments completed at good valuations UK Regulated Water : EV@100% of 1,236M 30% premium to March 31, 2012 RCV Net debt reduction of 1.5 billion Adjusted operating cash flow 2011: 105.5M; operating income 2011: 74.9M Capital gain of 234M (net of transaction costs) US Solid Waste: EV@100% : $1.9 billion Expected net debt reduction of 1.5 billion (at July 18 exchange rates) Adjusted operating cash flow 2011: $212M; operating income 2011: $110M Significant capital gain at closing Total: 3 billion, or 60% of the 5 billion divestment program completed or signed in the first 7 months of

8 Convergence: a significant deployment Structured implementation Dedicated resources Deployment across all operational entities Presentation to 3,000 managers in key countries 19 priority projects 325 projects approved in Convergence Phase APRIL- JULY 2011 SEPTEMBER DECEMBER Diagnostics and preliminary targets Design of the CONVERGENCE target Framework / Guiding Principles Project implementation structuring Implementation The NEW VEOLIA CONCEPTION ACTION 8

9 Convergence Plan: results as of June 30, 2012 Cost Reductions / Convergence 1 (1/2) In M Implementation costs Gross cost savings projects approved Impact in the accounts of June 30, 2012: 258 contributing projects M gross savings 34M net savings (OpCF) 2012 Objective Feb. 17, 2012e Apr. 27, 2012e July 20, 2012e Breakdown of net savings by geography at June 30, % 16% France North America & Australia Breakdown of net savings by lever at June 30, % Purchasing 32% 12% 8% 5% Latin America and Southern Europe Asia, Africa, Middle East Central & Eastern Europe Northern Europe Corporate HQ 1% 31% Organizational Efficiency IT costs External Expenses 13% 3% Other 60% 9

10 Convergence Plan: results as of June 30, 2012 Cost Reductions / Convergence 1 (2/2) Cost reductions / Convergence 1: In M As of June 30, Projection Adj. Op. Cash Flow Adj. Op. Income Adj. Op. Cash Flow Adj. Op. Income Gross savings Implementation costs Net savings

11 Convergence Plan: results as of June 30, 2012 Cost Reductions / Convergence 2 Divisions Water China ( Dragon ) Structure optimization Operational performance improvement of municipal concessions Deployment of best practices Energy Services Central Europe ( Dauphin ): Hungary, Poland, Czech Republic, Romania, Slovakia and Bulgaria Optimization of operations and assets (e.g.: production tool rationalization, maintenance process improvement) Fixed costs reduction (e.g.: staff costs, operations & structure, purchasing excluding combustibles, structure expenses) Transverse Mutualization of central function at the geographic level Reconfiguration of central HQ both at the VE and divisional levels Centralization of IT infrastructure Centralized purchasing 11

12 An environment with limited visibility Initial signs of economic slowdown Change in trends beginning Q2 perceptible in the majority of geographies Particularly difficult situation in Southern Europe In mature markets: Stricter regulatory conditions in Energy Services Constant pricing pressure during contract renewals in France Isolated cases of remunicipalization Good resilience of growth platforms 12

13 Pierre-François Riolacci 13

14 First half marked by charges related to transformation Investor Relations August 2, 2012 Continued restructuring of activities in Italy: Environmental Services: no additional costs Dalkia: degradation of financing conditions Impact of - 89M in adjusted operating cash flow and in adjusted operating income, (- 59M in adjusted net income) Fair value adjustments Veolia Transdev (excluding SNCM): adjustment based on lowest offer; - 83M in discontinued operations UK non-regulated water: - 56M non-recurring item included in operating income Other assets: - 16M in adjusted operating cash flow, - 37M in adjusted operating income and - 52M in goodwill impairments Capital gain on the divestment of UK Regulated Water of 234M (net of transaction costs) In M Adj. Op. Cash Flow Adj. Op. Income Operating Income Net Income Restructuring & write-downs Fair value adjustments Capital gains TOTAL

15 Italy action plan Dalkia Continued legal reorganization Continued restructuring of headquarters and regions Employee reductions: nearly 400 people since 2011 Environmental Services Extension on April 18 of the voluntary liquidation related to all activities acquired in 2007 (VSAT) Water Liquidation of Sorical (in Calabria) at the initiative of shareholders Improve collections in Sicily 15

16 Highlights Revenue growth of 1.6% at constant scope and FX to 14,781M Adjusted operating cash flow declined 9.7% (-10.6% at constant FX) to 1,383M 89M write-down of Dalkia Italy receivables Excluding the write-down of Dalkia Italy receivables, Group adjusted operating cash flow declined 4.8% at constant FX, rather than 10.6% Adjusted operating income declined 26.3% (-26.7% at constant FX) to 631M Excluding the write-down of Dalkia Italy receivables, Group adjusted operating income declined 16.3% at constant FX, rather than 26.7% Operating income of 523M versus re-presented 180M in H Net income of 153M Positive Free Cash Flow of 348M, versus 155M in H

17 Key figures In M H published H represented (1) H constant FX Revenue 16,287 14,304 14, % 1.8% (4) Adjusted operating cash flow 1,741 1,532 1, % -10.6% Adj. op. cash flow excl. Dalkia Italy write-downs 1,741 1,532 1, % -4.8% Adjusted operating income % -26.7% Adj. operating income excl. Dalkia Italy write-downs % -16.3% Operating income (2) % % Adjusted net income attrib. to owners of the company Net income attrib. to owners of the company Free Cash Flow (3) Net financial debt 14,764 14,764 14,693 (1) To ensure the comparability of period, the 2011 financial statements have been re-presented to include: - the impact of the reclassification into net income from discontinued operations of operations in the process of being sold such as the whole Veolia Transdev income (from March 3rd to June 30th 2011) except the activities of the group Société Nationale Maritime Corse Méditerranée (SNCM), excluded from the disposal process of Veolia Transdev during H1 2012, the Citelum activities in the Energy Services division and Solid waste activities in the United States in the Environmental Services division; - the impact of the reclassification into net income from discontinued operations of divested activities such as Habitat Services ( Proxiserve ) activities in the Water and Energy Services division and the regulated activities in the United Kingdom in the Water division; - the impact of the reclassification into continuing operations of the Pinellas incineration activities within the Montenay International entities in the United States in the Environmental Services division, whose divesture process was interrupted in the second semester of For the record, the Transportation Division as a whole (from January 1st to March 3rd, 2011) was reclassified into net income from discontinued operations since June 30th (2) Non recurring items include impairment losses on goodwill recorded in respect of Company subsidiaries as of June 30,2011 in Southern Europe and the United States and Impairment losses on non-current assets recorded in the respect of Company subsidiaries mainly in Italy. (3) Free Cash Flow represents cash generated (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 for 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 (4) +1.6% at constant consolidation scope and exchange rates 17

18 Revenue by geographic region in M 14,304 (1) 14,781 1,381 1,585 Δ Δ constant FX Δ excl. scope & FX 5,801 5,996 Central & Eastern Europe +14.8% +18.6% +8.9% France +3.3% +3.3% +3.6% Europe, excl. France and Central & Eastern Europe -4.1% -5.8% -4.5% United States +9.2% +1.2% +1.7% 3,933 3, ,367 1, ,032 Asia Pacific +9.5% +0.6% +2.7% Rest of the world +3.4% +2.6% +2.6% Total +3.3% +1.8% +1.6% H re-presented H (1) See note 1 on slide 17 18

19 Revenue by quarter in M 1 st quarter 2 nd quarter 1 st half 2011 re-presented (1) 2012 Δ constant scope & FX 2011 re-presented (1) 2012 Δ constant scope & FX 2011 re-presented (1) 2012 Δ constant scope & FX Water 2, , % 3, , % 5, , % Environmental Services 2, , % 2, , % 4, , % Energy Services 2, , % 1, , % 3, , % Other % % % Company 7, , % 6, , % 14, , % Variation at current scope & FX +4.9% +1.6% +3.3% (1) See note 1 on slide 17 regarding IFRS 5 and IFRS 8 re-presented figures detailed in section 2.1 operating segments of the company s Operating and Financial Review 19

20 Water: Revenue of 6,095M Operations: stable revenue (+0.2% at constant scope and FX) France: stable revenue in the context of contractual erosion and lower volumes (-2%), markedly more than Q1. International: largely stable revenue, good performance in Central and Eastern Europe (higher prices in Sofia and Prague) and Asia. Technologies and Networks: Revenue increased 11.1% (+7.7% at constant scope and FX) Adjusted operating cash flow declined 9.4% (-10.2% at constant FX) to 633M In France (- 61M), contractual erosion and lower water volumes sold (-2%) Difficulties in the non-regulated water business in the U.K. Net impact of Efficiency and Convergence Plans of 46M (including 17M for Convergence) Adjusted operating income declined 18.9% (-19.5% at constant FX) to 352M 5,927 First half revenue ( M) 4,243 1,684 H1 2011* 6,095 +% 4,223 +% 1,872 H % -0.5% +11.1% Operations Technologies and Networks * The 2011 financial statements have been re-presented to ensure the comparability of periods, for the U.K. regulated water activities and Proxiserve 20

21 Environmental Services: Revenue of 4,482M Δ Revenue H / H : -1.6% and -3.5% at constant scope & FX Revenue breakdown by activity H Q1 Q2 H H Price and volumes of recycled materials -1.8% -1.2% -2.2% Waste volumes -1.2% -0.1% -2.2% Service price increases +0.8% +1.1% +0.5% Other (incl. construction revenue) -1.3% Currency effect +2.4% Scope -0.5% Increase in the second quarter of the unfavorable difference in raw materials prices, particularly in France and Germany: impact of - 81M on H revenue Economic slowdown in Q2, particularly in France and the United Kingdom, which directly influence the level of activity derived from industrial collection, construction waste and industrial services Continued growth in hazardous waste Urban cleaning and collection Non-hazardous industrial waste collection and services Hazardous industrial waste collection and services Sorting, recycling and trading Hazardous waste treatment Waste-to-energy from non-hazardous waste Landfilling of non-hazardous and inert waste 21

22 Environmental Services: Adjusted operating cash flow of 505M Adjusted operating cash flow increased 1.5% (-1.1% at constant FX) to 505M Unfavorable impact of lower recycled raw materials prices Volume declines of 1.2% Difficulties passing on higher costs to clients, particularly industrial clients Offset by the reversal of operational difficulties experienced in 2011 (Italy, Marine Services, Egypt) Net impact of Efficiency and Convergence Plans of 23M (including 7M for Convergence) Adjusted operating income declined 15.8% (-18% at constant FX) to 181M Including fair value adjustments of assets in process of divestiture 22

23 Energy Services: Revenue of 3,921M Revenue increased 9.0% (+5.9% at constant scope and FX) to 3,921M Higher energy prices: positive impact + 154M vs. H Favorable weather effect, primarily in France and Central Europe: impact of + 46M vs. H Adjusted operating cash flow declined 20.5% (-19.7% at constant FX) to 288M Italy: Receivables write-down of - 89M Excluding these write-downs, adjusted operating cash flow would have increased by 3.9% Net impact of Efficiency and Convergence Plans of 26M (including 5M for Convergence) Adjusted operating income declined 33.0% (-31.8% at constant FX) to 173M Excluding Dalkia Italy write-downs, adjusted operating income would have increased 1.3% 3,598 1,908 1,690 First half revenue ( M) H1 2011* 3, % 2,064 1,857 H % +9.9% Outside France France * The 2011 financial statements have been represented to ensure the comparability of periods, for the Citelum and Proxiserve activities 23

24 Reconciliation of adjusted operating cash flow to adjusted operating income In M H re-presented (1) H Of which FX Adjusted operating cash flow 1,532 1, % +0.9% Depreciation & Amortization Net capital gains 5 4 Provisions, fair value adjustments & other 4-36 Adjusted operating income % +0.4% Excluding Dalkia Italy write-downs, adjusted operating cash flow would have declined by 4.8% and adjusted operating income would have declined by 16.3% at constant exchange rates (1) See note 1 on slide 17 24

25 Reconciliation of adjusted operating income and operating income In M H re-presented (1) H Adjusted operating income Goodwill and asset impairment Italy Goodwill impairment United States Goodwill impairment Morocco Goodwill impairment Spain Other write-downs and restructuring charges (Italy) Impairment non-regulated Water U.K Impairment Baltic states (Environmental Services & Energy Services) Other Operating income Non-recurring items (1) See note 1on slide 17 25

26 Net finance costs In M H H Variation % In M Cost of net financial debt published -376 (1) -362 Cost of net financial debt restated (2) % % -0.29% Impact of change in Euro short term rates -0.08% Impact of active debt management Currency impact -0.15% -0.08% Other +0.02% (1) 346M pro forma 30-Jun Jun-12 Closing net financial debt (3) 14,764 14,693 Average net financial debt (4) 14,756 15,072 Gross average debt 20,386 18,949 Gross cost of borrowing 4.08% 4,20% Average cash 6,142 4,161 Rate 1.38% 1.30% 6.00% 5.00% 4.00% 3.00% 5.61% 5.11% Evolution of cost of borrowing 4.76% 5.09% 4.03% 4.10% 5.39% 5.03% 4.32% 4.20% (2) Including financial costs of discontinued operations and excluding the anticipated costs of the early redemption of U.S. privately placed debt ( 17M in 2012) (3) Net financial debt represents gross financial debt (non-current borrowings, current borrowings, bank overdrafts and other cash position items), net of cash and cash equivalents and excluding fair value adjustments to derivatives hedging debt (4) Average net financial debt is the average of monthly net debt during the period 2.00% 1.00% 0.00% Dec.2008 Dec.2009 Dec.2010 Dec.2011 June 2012 net cost of borrowing gross cost of borrowing 26

27 Taxes After adjusting for one-time items, the company tax rate for the six months ending June 30, 2012 was 30.6%. The effective tax rate at June 30, 2012 is derived: In M Tax expense Income base before taxes Tax rate Adjusted for one-time items % Goodwill impairment and asset write-downs Dalkia Italy- receivables write-down Other items Effective % 27

28 Reconciliation of operating income to net income In M H re-presented (1) H Adjusted Adjustment Total Adjusted Adjustment Total Operating income (3) Cost of net financial debt (2) Income tax expense Share of net income of associates Net income from discontinued operations Non-controlling interests Net income attrib. to owners of Co Published net income attrib. to owners of Co (1) See note 1 on slide 17 (2) Including other financial revenue and expense (3) See details on slide 25 28

29 Statement of cash flows: positive free cash flow of 348M In M H H Operating cash flow before changes in working capital (1) 1,732 1,581 Repayments of operating financial assets Total cash generation 1,951 1,781 Gross investments -1,199-1,348 Variation in working capital Taxes paid Net Interest paid Dividend (2) Other (3) Divestments 1,048 1,626 Free cash flow Impact of exchange rates Other Net financial debt at June 30 14,764 14,693 Change in net financial debt (1) Of which financial cash flows (re-presented 8M in 2011 and 21M in 2012) and adjusted operating cash flow from discontinued operations (re-presented 191M in 2011 and 177M in 2012) (2) Dividend paid to shareholders and non-controlling interests (3) Notably changes in receivables and other financial assets for re-presented - 72M in 2011 and - 98M in

30 Antoine Frérot Antoine Frérot 30

31 Convergence Plan: Activities continuing in the second half VTD Final offer received from a financial investor on June 8 Indicative offer received on May 31 from a non-financial investor Discussions with the Caisse des Dépôts continue 31

32 Water: Berlin contract Sale of RWE s stake approved by the Council of Ministers of the Land of Berlin for 618M The sale would be effective once ratified by the Parliament of the Land Could result in a change in method of consolidation Discussions in process between Veolia and the Land of Berlin Decision of the Federal Cartel Office to lower drinking water tariffs in Berlin by 18% in 2012 and 17% during the period , with effect from January 1, 2012 Mode of application not definitive 32

33 Convergence Plan: Activities continuing in the second half Investor Relations August 2, 2012 Other asset divestments Excluding closures and cessation of activities 29 procedures are in process In 22 countries Relative to operations that had total 2011 revenue of roughly 2.5 billion 33

34 Additional measures 500M reduction of investments in Raise the objective for gross cost reductions (Convergence 1 and 2) from 220M to 270M in 2013 and from 450M to 500M in 2015 Net of implementation costs, the cost reduction objective is raised from 120M to 170M in 2013 and from 420M to 470M in

35 Objectives confirmed : Transition period Divestments of 5 billion Reduce net financial debt below 12bn (1) Cost reduction in 2013: gross impact of 270M and net (2) impact of 170M on operating income Commitment on dividend policy 0.70 (3) per share in 2012 paid in cash or in shares 0.70 (3) per share in and beyond: New Veolia Organic revenue growth > 3% CAGR (mid-cycle) Adjusted Operating Cash Flow > 5% CAGR (midcycle) Leverage (4) of 3.0x (5) Mid-term: historical payout ratio (3) Cost reduction in 2015: gross impact of 500M and net (2) impact of 470M on Operating Income (1) Before closing exchange rate impact (2) Net of implementation costs (3) Subject to approval of Veolia s Board of Directors and Shareholders (4) Net financial debt / (Operating cash flow before changes in working capital + principal payments on operating financial assets) (5) ±5% 35

36 Sommaire 36

37 Summary of appendices Currency movements Appendix 1 Main H re-presented figures Appendix 2 Main contracts won or renewed in 2012 Appendix 3 Evolution of H1 revenue by division Appendix 4 H1 Adj. op. cash flow & adj. op. income by division Appendix 5 Analysis of Environmental Services revenue by country Appendix 6 Environmental Services: Revenue vs. Industrial Production Appendix 7 Environmental Services: Evolution of raw materials prices Appendix 8 Gross investments by division Appendix 9 Completed divestments Appendix 10 Efficiency Plan Appendix 11 Debt management Appendix 12 Net liquidity Appendix 13 Balance sheet Appendix 14 37

38 Appendix 1: Currency movements Main currencies 1 unit foreign currency = ) H H Δ H vs. H U.S. dollar Average rate Closing rate % +14.8% U.K. pound sterling Average rate Closing rate % +11.8% Australian dollar Average rate Closing rate % +9.3% Czech koruna Average rate Closing rate % -5.1% The average rate applies to the income statement and cash flow statement The closing rate applies to the balance sheet 38

39 Appendix 2: Main H re-presented figures IFRS5 (1) In M H published H re-presented (1) IFRS 5 Revenue 16, ,303.9 Adjusted operating cash flow 1, ,532.4 Adjusted operating income Operating income (2) Adjusted net income, Group share Free Cash Flow (3) (1) To ensure the comparability of period, the 2011 financial statements have been re-presented to include: - the impact of the reclassification into net income from discontinued operations of operations in the process of being sold such as the whole Veolia Transdev income (from March 3rd to June 30th 2011) except the activities of the group Société Nationale Maritime Corse Méditerranée (SNCM), the Citelum activities in the Energy Services division and Solid waste activities in the United States in the Environmental Services division; - the impact of the reclassification into net income from discontinued operations of divested activities such as Habitat Services ( Proxiserve ) activities in the Water and Energy Services division and the regulated activities in the United Kingdom in the Water division; - the impact of the reclassification into continuing operations of the Pinellas incineration activities within the Montenay International entities in the United States in the Environmental Services division, whose divesture process was interrupted in the second semester of For the record, the Transportation Division as a whole (from January 1st to March 3rd, 2011) was reclassified into net income from discontinued operations since June 30th (2) Non recurring items include impairment losses on goodwill recorded in respect of Company subsidiaries as of June 30,2011 in Southern Europe and the United States and Impairment losses on non-current assets recorded in the respect of Company subsidiaries mainly in Italy. (3) Free Cash Flow represents cash generated (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 for 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. 39

40 Appendix 3 : Principal contracts won or renewed since the beginning of 2012 in France (1/4) ORGANIC GROWTH - Renewals: 62 main contracts renewed in France in 2012 in Water (o/w 33 in drinking water & 29 in wastewater), 57 in Waste (o/w 40 from local authorities & 17 from companies), & 65% of contracts due to expire in 2012 renewed in Energy Antibes Length: 10 years Cumul. Rev: 70M (Water) Lens-Liévin Length: 12 years Cumul. Rev: 84M (Water) Management of household waste Val de Bièvre Length: 6 years Cumul. Rev: 34M (Waste) Cleaning services for public spaces and streets for the Mont-Valérien community agglomeration Length: 5 years Cumul Rev: 33M (Waste) Household waste collection for the Est Ensemble community agglomeration (Ile de France) Length 5 years Cumul. Rev: 14M (Waste) Vannes Lens-Liévin Seine Aval (Achères) Centre Pompidou Propreté Ile de France Grand Dijon - Outsourcing / Privatization: Renovation of the air conditioning system for the Centre National d Art et de Culture Georges Pompidou Length: 3 years Cumul. Rev: 25M (Energy) Operation of the mechanical-biological treatment plant with the SYSEM in Vannes Length 6 years Cumul. Rev: 16M (Waste ) - Engineering / Design & Build: Renovation of the Seine Aval (Achères) biological wastewater treatment plant Cumul. Rev: 196M (Water) Design, build and management of the Grand Dijon district heating network (public service management contract) Length: 25 years Cumul. Rev: 200M (Energy) Antibes Renewals Outsourcing / Privatization Engineering / Design & Build 40

41 Appendix 3 : Principal contracts won or renewed since the beginning of 2012 in Europe (2/4) ORGANIC GROWTH - Outsourcing / Privatization : Management of technical and energy services of the European Investment Bank offices in Luxembourg Length: 4 years Cumul. Rev: 32M (Energy) Management of technical and energy services for European Parliament real estate assets in Strasbourg, Brussels and Luxembourg Length: 6 years Cumul. Rev: 120M (Energy) Public service management contract for operating the district heating network of the city of Iasi in Romania Length: 20 years Cumul. Rev: 600M ( Energy) - Engineering / Design & Build: Design and build of an evaporation and crystallization facility for the recuperation and purification of salts and potash starting with salt byproducts generated in the production of fertilizer Length: 2 years (Water) Luxembourg / Belgium European Parliament BEI Iasi Romania Outsourcing / Privatization Engineering / Design & Build Suria Spain 41

42 Appendix 3 : Principal contracts won or renewed since the beginning of 2012 in North America (3/4) ORGANIC GROWTH - Renewals: Contract for the treatment of medical waste for Stericycle (Phoenix) Length: 5 years Cumul. Rev: $250M (Waste) Canada - Outsourcing / Privatisation: Performance contract to support improved management of water services in the city of New York Length: 4 to 6 years Cumul. Rev: 36M (roughly 28M) (Water) Calgary - Engineering / Design & Build: Design and build of a produced water treatment system, including an evaporation system doe water utilized in the production of bitumen by CNRL in Calgary, Canada Length: 2 years (Water) United States (excl. AK & HI) New York Phoenix Renewals Outsourcing / Privatization Engineering / Design & Build 42

43 Appendix 3 : Principal contracts won or renewed since the beginning of 2012 in Asia Africa Middle East (4/4) ORGANIC GROWTH - Outsourcing / Privatization : 3 contracts for the operation and maintenance of drinking water and wastewater treatment in Japan Length: 3 to 5 years- Cumul. Rev: roughly 49M (Water) Operation and maintenance of the drinking water service in the city of Nagpur (India) Length: 25 years Cumul. Rev: 387M (Water) Extension of the Hynix contract, ultrapure water (Korea) Length 6 years Cumul. Rev: 41M (Water) New Delhi China Korea Changsha Japan - Engineering / Design & Build: Nagpur Design, build and operation of the hazardous waste treatment center in Changsha (Hunan province in China) Length: 25 years Cumul. Rev: more than 320M (Waste) India Design, build and operation of the new wastewater treatment plant in Nilothi, west of New Delhi, India Length: 13 years Cumul. Rev: 40 M (Water) Outsourcing / Privatization Engineering / Design & Build 43

44 Appendix 4: Breakdown of revenue by division Investor Relations August 2, ,304 In M 14,781 5,927 4,554 3,598 6, ,482 3,921 Δ Δ constant FX Δ excl. FX & scope Water +2.8% +1.1% +2.3% Environmental Services -1.6% -4.0% -3.5% Energy Services +9.0% +9.1% +5.9% Other +25.6% +24.0% +16.9% Total Company +3.3% +1.8% +1.6% 2010* H (1) H (1) See note 1 on slide 17 44

45 Appendix 5: Adjusted operating cash flow (1/2) In M H re-presented (1) H constant FX Water % -10.2% Environmental Services % -1.1% Energy Services % -19.6% Other % -57.1% Total Company 1,532 1, % -10.6% Margin % 10.7% 9.4% (1) See note 1 on slide 17 45

46 Appendix 5: Adjusted operating income (2/2) In M H re-presented (1) H constant FX Water % -19.5% Environmental Services % -18.0% Energy Services % -31.8% Other % -46.2% Total Company % -26.7% Margin % 6.0% 4.3% (1) See note 1 on slide 17 46

47 Appendix 6: Environmental Services Revenue in key countries % of H revenue Var. at constant scope & FX 2012/2011 France 39% +0.9% Lower recycled raw material prices (paper/cardboard/iron) Lower collected commercial volumes Good hazardous waste performance Improvement in incineration Germany 12% -12.6% Lower prices and volumes of recycled raw materials Commercial pressure on municipal and C&I contracts United Kingdom North America 18% -7.4% Unfavorable base effect in PFI construction revenue Increase in incinerated volumes Resilience in municipal collection Decline in landfill volumes Competitive pressure in C&I 9% +1.7% Solid waste : Divestment signature announced July 19, 2012 Resilience in hazardous waste Marine Services: increased fleet utilization rate Asia Pacific 11% +1,2% Asia: lower construction revenue and revenue from recycled materials (paper) Australia: revenue increase related to higher landfill tax 47

48 Appendix 7: Environmental Services Revenue vs. Industrial Production Industrial Production and Organic Growth of VES (Weighted average of the 4 countries : France, UK, US, Germany) Growth ( %) vs. previous year quarter Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q VES organic growth Industrial Production Sources : OCDE Extract Database (from January to April 2012 and historical); Source May 2012: ONS, INSEE & Bundesbank, BoG. ; June 2012: May 2012 report. 48

49 Appendix 8: Environmental Services Evolution of raw materials prices: paper, cardboard, metals Evolution of raw materials prices ( /t) jan 08 feb 08 mar 08 apr 08 may 08 jun 08 Cardboard Paper Metals jul 08 aug 08 sept 08 oct 08 nov 08 dec 08 jan 09 feb 09 mar 09 apr 09 may 09 jun 09 jul 09 aug 09 sept 09 oct 09 nov 09 dec 09 jan 10 feb 10 mar 10 apr 10 may 10 jun 10 jul 10 aug 10 sept 10 oct 10 nov 10 dec 10 jan 11 feb 11 mar 11 apr 11 may 11 jun 11 jul 11 aug 11 sept 11 oct 11 nov 11 dec 11 jan 12 feb 12 mar 12 apr 12 may 12 jun

50 Appendix 9: Gross investments by division Growth In M Maintenance Financial including Δ scope* Industrial New operating financial assets Total Water Environmental Services Energy Services Transport & Other Total H ,348 Total H ,199 * Including partial acquisitions between shareholders with no change in control 50

51 Appendix 10: Completed divestments In M H H Industrial divestments Financial divestments (1) 929 1,564 Increase in minority capital 39-4 Total divestments 1,048 1,626 (1) Including net financial debt of divested companies and partial divestments between non-controlling interests (with no change in consolidation scope) 51

52 Appendix 11: Efficiency Plan Objective of 225M in 2012 (net of implementation costs) 156M savings identified at July 20 for 514 projects 1% 6% 1% 3% 25% 37% 43% 19% 20% 22% 7% 16% Water Environmental Services Energy Services Purchasing Contract or entity modification Other revenue improvement Technical optimization Organizational efficiency IT productivity Reduction of external expenses Insurance and risk Other 52

53 Appendix 12: Debt management (1/2) Rating Moody s: P-2 / Baa1, stable outlook (February 7, 2012) Standard and Poor s: A-2/ BBB+, stable outlook (September 14, 2011) Arrival at term on February 1, 2012 of the 2012 bond with nominal value of 671M Early reimbursement of the U.S. private placement issued in January 2003 on February 9, 2012 for an equivalent 350.2M Refinancing by early reimbursement of a portion of bond issues maturing in 2013, 2014, 2017 and 2018 from March 19-27, 2012 for 750M, while issuing a new bond with maturity in 2027 for the same amount Issuance on June 26, 2012 of a new bond in the amount of RMB500M ( 63M equivalent) maturing in June 2017 Average maturity of net financial debt: 8.6 years vs. 8.7 years at the end of 2011 Gross debt maturity: 6.6 years versus 6.3 years at the end of 2011 Group liquidity: 8.6B, including 4.0B in undrawn confirmed credit lines (without disruptive covenants) Net Group liquidity: 4.1B Net financial debt after hedges June 30, 2012 Currency breakdown of gross debt after hedges at June 30, 2012 Fixed rate: 70% o/w Euro: 93% o/w USD: 58% o/w GBP: 120% Variable rate: 23% Variable rate capped: 7% Other 25% (1) GBP 7% USD 10% Euro 58% (1) Of which RMB 5%, HKD 4%, AUD 4% and PLN 3% 53

54 Appendix 12:VE SA bond redemption schedule (2/2) CNY 0.1bn USD 1.3bn Total 11.7 bn GBP 0.8bn EUR 9.5bn Nominal amounts converted at closing rates

55 Appendix 13: Net liquidity In M Veolia Environnement Syndicated loans 2, ,623.4 Bilateral credit lines 1, Lines of credit Cash and cash equivalents 4, ,214.4 Total Veolia Environnement 8, ,259.2 Subsidiaries December 31, 2011 June 30, 2012 Cash and cash equivalents 1, ,336.0 Total Subsidiaries 1, ,336.0 Total Group liquidity 9, ,595.2 Current liabilities and bank overdrafts 4, ,458.4 Total Group net liquidity 5, ,

56 Appendix 14: Consolidated statement of financial position In M December 31, 2011 June 30, 2012 Intangible assets (concessions) 4, ,722.9 Property, Plant & equipment 8, Other non-current assets 10, ,305.8 Operating financial assets (current and non-current) 5, ,423.1 Cash and cash equivalents 5, ,550.4 Other current assets 15, ,817.6 Total Assets 50, ,710.6 Capital (including non-controlling interests) 9, ,712.2 Financial debt (current and non-current) 21, ,822.6 Other non-current liabilities 4, ,764.1 Other current liabilities 15, ,411.7 Total Liabilities 50, ,

57 Investor Relations contact information Ronald Wasylec, Directeur des Relations avec les Investisseurs et Actionnaires individuels Téléphone ronald.wasylec@veolia.com Ariane de Lamaze Téléphone ariane.de-lamaze@veolia.com 38 Avenue Kléber Paris - France Fax Terri Anne Powers, Director of North American Investor Relations 200 East Randolph Street Suite 7900 Chicago, IL Tel +1 (312) Fax +1 (312) terri.powers@veoliaes.com 57