2015 Annual Results. February 25, 2016

Transcription

1 2015 Annual Results February 25, 2016

2 Disclaimer Veolia Environnement is a corporation listed on the 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 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 risk that changes in energy prices and taxes may reduce Veolia Environnement s profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement s contracts, the risk that acquisitions may not provide the benefits that Veolia Environnement hopes to achieve, the risks related to customary provisions of divesture transactions, 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 other risks described in the documents Veolia Environnement has filed with the Autorités des Marchés Financiers (French securities regulator). Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forwardlooking statements. Investors and security holders may obtain from Veolia Environnement a free copy of documents it filed ( with the Autorités des Marchés Financiers. This document contains "non GAAP financial measures". These "non GAAP financial measures" might be defined differently from similar financial measures made public by other groups and should not replace GAAP financial measures prepared pursuant to IFRS standards. Results are in process of being audited 2

3 A transformed Group, marching on a path toward profitable and sustainable growth 2015 Annual Results Antoine Frérot, CEO 3

4 2015 Highlights Excellent annual results, significantly above the objectives set Current net income of 580M (1) versus 333M (2) in 2014 Net Free Cash Flow of 856M versus 314M (3) in 2014, vs. an objective of 500M+, driven by strong Q4 working capital reduction Net financial debt of 8,170M, down 586M excluding exchange rate impacts vs Cumulative cost savings over 4 years: 802M in savings, versus the 750M target Good commercial momentum, both in traditional and priority growth markets (1) Including 59.5M in net capital gains (2) On a pro forma basis, 2014 current net income was 314M (3) On a pro forma basis as of December 31, 2014 (excluding Dalkia France and with Dalkia International fully consolidated since 1/1/2014) 4

5 Significant increase in 2015 results: current net income and net FCF above objectives Revenue increase of 4.5% (+1.4% at constant FX) to 24,965M Pro forma (1) : down 0.6% at constant scope & FX EBITDA improvement of 11.3% (+8.1% at constant FX) to 2,997M Pro forma (1) : Increase of 5.3% at constant scope & FX Current EBIT up 25.5% (+20.3% at constant FX) to 1,315M Pro forma (1) : Increase of 18.6% at constant scope & FX Current net income increased substantially to 580M (including 53M in net financial capital gains), vs. GAAP 333M in 2014 (including 44M in net financial capital gains) Net FCF (before financial divestments), of 856M, vs. pro forma 314M in 2014, way above the Group s objective due to strong year-end cash receipts Net financial debt of 8,170M, down 586M excluding exchange rate impacts vs. Dec ( 8,311M) Leverage ratio of 2.7x, versus 3.0x in 2014 (1) Pro forma scope : excluding Dalkia France and with Dalkia International fully consolidated since 1/1/2014 5

6 Cost savings exceeded the objective: more than 800M achieved by December-end 2015 o 220M in gross savings in 2015 Impact on EBIT Before IFRS 10 & 11 (in M) Cumul end 2014 H H2, 2015 Total 2015 Cumul end Objective Gross savings France Europe excluding France Rest of the World 16% 6% 44% 10% 9% 2% 6% 3% 24% Purchasing Organizational efficiency Addressing loss making contracts Technical optimization Global Businesses HQ 17% 17% 46% IT Reduction of external expenses Other 6

7 Highlights Recent developments Asset arbitrage completed in 2015 Divestment of Israel operations, a cooling network in Singapore and a Chinese water concession Buyback of Water minorities in Central Europe Targeted acquisitions in energy efficiency (Altergis) and plastics recycling (AKG) In total, financial divestments, net of acquisitions of + 118M SNCM taken over by a new operator Repayment of remaining Transdev intercompany loan of 345M expected during the first half of 2016 Divestment process of SADE continues Further development in complex hazardous waste treatment in February 2016, with the acquisition of Kurion*, leader in the treatment of low level radioactive waste * signed, but not yet completed 7

8 Veolia + Kurion, an integrated complete offering in nuclear facility cleanup and the treatment of low level radioactive waste Targeted Market : Treatment of low-level and medium-level radioactive waste and nuclear facility cleanup Market potential > $200bn between now and 2030, of which >$100bn in our targeted geographies: Japan/USA/France/United Kingdom Veolia s target: $350M-$400M in revenue per year by 2020 $250M/year in the treatment of low- and medium-level radioactive waste $100M-$150M/year in nuclear equipment cleanup o Kurion s unique technologies Robotic technologies to remotely access confined spaces Separation solutions to remove radioactive isotopes (cesium, strontium, tritium ) Stabilization solutions for radioactive material via vitrification Acquisition price: $350M Double digit revenue growth expected during the next 3 years 2016 estimated revenue: $130M 8

9 2015 Main contract wins Industrial Market Q3 Bristol Myers Squibb, Europe O&M bundled services Duration: 5 years Total new backlog: 85M Q1 Hydro Quebec, Canada Data center O&M Duration: 20 years Total new backlog: 66M Q3 Antero Resources, USA Oil & Gas / Upstream D&B wastewater treatment + O&M services Total new backlog: 214M (D&B) + 143M (O&M) Q3 Fibria Horizonte, Brazil Water Solutions, D&B, networks Total new backlog: 42M Q2 Mayo Renewable Power, Ireland Biomass cogeneration Duration: 15 years Total new backlog: 450M Q3 BEE Power Ghent, Belux Biomass plant Performance contract Duration: 15 years Total new backlog: 150M Q2 Locum, Sweden Stockholm South hospital & Danderyds hospitals O&M and energy efficiency services Duration: 5 years Total new backlog: 43 M Q4 Neste Oil & Borealis, Finland Oil & Gas Downstream DBO cogeneration plant Duration: 20 years Total new backlog: 350M Q2 Norilsk Nickel, Finland DBFO biofuel steam boiler Performance contract Duration: 10 years Total new backlog: 119M Q1 LiuGuo Chemical, China Industrial wastewater Contract expansion Complex issues solutions Duration: 20 years Total new backlog: 60M Q4 Danone Innovative strategic alliance for water cycle, waste management, sustainable agriculture and energy efficiency to meet the challenges of climate change Q4 Lazio Region, Italy Energy services Public Health Circular economy Duration: 9 years Total new backlog: 183M Q2 ConocoPhillips, Australia Provide recycling, liquid and hazardous waste services for onshore and offshore services renewal Duration: 4 years Total new backlog: 35M 9

10 2015 Main contract wins Municipal market Q2 Hampshire County Council, UK Extension of integrated contract to 2030, (solid waste) Duration: 5 years Total new backlog: 743M Q3 San Diego, USA WWTP renewal Duration: 5 years Total new backlog: 40M Q2 Southend on Sea Borough Council, UK Collection of household waste, street cleaning, waste transfer station, and management of 2 HWRC sites Duration: 15.5 years Total new backlog: 211 M Q3 BORÅS, Sweden WWTP D&B Water solutions Total new backlog: 21M Q4 COBAS, Arcachon, France Water Renewal Duration: 12 years Total new backlog: 72M Q3 Q4 SIL Rochefort, France Waste to energy Duration: 12 years Total new backlog: 105M SIEVD Rungis, France Incinerator Circular economy Duration: 6 years Total new backlog: 58M Q2 New Orleans, USA WWTP renewal Duration: 10 years Total new backlog: 122M Q2 Lille Métropole, France Concession / Public service delegation Duration: 8 years Total new backlog: 456M Q2 Monteria, Colombia Complete water management Contract renewal Duration: 10 years Total new backlog: 226M Q2 EDG, Guinea Management contract Energy efficiency Duration: 4 years Total new backlog: 11 M Q2 SPC Bahwan, Oman SWRO Extension Water Solutions, D&B, networks Total new backlog: 69M Q3 NSROC, Australia Solid waste traditional services Duration: 10 years Total new backlog: 69M Sydney Water, Q4 Australia O&M 2 WWTPs (extension) Duration: 15 years Total new backlog: 250M 10

11 The new Veolia: a re-equilibrated geographic footprint and client mix Global Businesses UK & Ireland Northern Europe Central Europe 4.9bn 2.4bn 2.2bn 2.9bn North America 1.9bn 2015 revenue: 25.0bn France Waste: 2.5bn Water: 2.9bn Italy & Iberia 1.1bn Asia 1.2bn 44% in Industrial sector % in Municipal sector Latin America 0.7bn Africa/ Middle East 1.2bn 174,000 employees in 11 zones Australia & New Zealand 1.0bn 11

12 Two main objectives for 2018: Current net income above 800M and 1bn net free cash flow Our transformation efforts and our renewed strategy allows Veolia to implement a new financial equation and enables us to set new 3-year financial targets Progressive revenue growth, supported by the acceleration of FCF generation and supported by development investments targets Revenue 25bn > 27bn EBITDA 2,997M ~ 3.5bn Current net income group share 580M > 800M Net Free Cash Flow 1 856M ~ 1bn 1 Before dividends, assuming capex of c bn p.a. and constant net debt 12

13 2016 objectives in line with the 2018 plan In 2016, in the context of a deflationary environment and weak economic growth, Veolia expects to achieve significant current net income growth Revenue* and EBITDA* growth Net Free Cash Flow before divestments and acquisitions* of at least 650M Current net income* of at least 600M * At constant exchange rates 13

14 Net free cash flow primarily dedicated to growth Dividend We want to share the benefits of our cash generation with our shareholders Free cash flow generation Supplemental all while maintaining the flexibility to fuel discretionary supplemental profitable growth capex opportunities. 14

15 Restored dividend growth starting in FY2015 Dividend increase in 2015 to per share in cash signaling the Board s confidence in the execution of our plan From 2016 to 2018, we expect to be able to provide around 10% annual dividend growth to our shareholders, while reducing our payout ratio 1 1 Payable in 2016, to be proposed for approval at the company s annual shareholder meeting 15

16 2015 Annual results Annual results ending December 31, 2015 Philippe Capron, CFO 16

17 An excellent year In M 2014 re-presented (1) 2015 Y-Y constant scope & FX Revenue 23,880 24, % +1.4% (2) Pro forma revenue 24,408 24, % -0.6% EBITDA 2,692 2, % +8.1% (2) Pro forma EBITDA 2,762 2, % +5.3% Pro forma EBITDA margin 11.3% 12.0% +70bps +70bps Current EBIT (3) 1,048 1, % +20.3% (2) Pro forma Current EBIT (3) 1,053 1, % +18.6% Current Net Income - Group share % Pro forma Current Net Income - Group share Current Net Income earnings per share ( ) Pro forma gross capex 1,568 1,484 Pro forma net Free Cash Flow (4) Net financial debt 8,311 8,170 (1) 2014 figures are re-presented for IFRIC 21( see Appendix 2) (2) Variation at constant FX (3) Including the share of current 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) Net Free Cash Flow corresponds to free cash flow from continuing operations, and is calculated by: the sum of EBITDA, dividends received from joint ventures, operating cash flow from financing activities, and changes in working capital for operations, less net industrial investments, current cash financial expense, cash taxes paid, cash restructuring charges and renewal expenses. 17

18 Revenue growth of 4.5% (1) : strong performance in emerging markets 24,408 REVENUE ( M) 4,867 4,881 5,305 5,926 8,475 8,575 5,553 5, pro forma re-presented (2) 24, (1) Variation at current scope & FX vs GAAP (2) See Appendix 2 Revenue: -0.6% at constant scope & FX (impact of + 836M) Slight revenue decline in France: -1.5% at constant scope & FX Water: Revenue down 3.5% due to commercial impacts (- 122M); good volumes (+1.2%), but lower tariff indexation (+0.3% vs. +1.2% in 2014) Waste: Revenue up 1% despite challenging volume trends (landfill -6%), due to strong commercial performance with contract portfolio growth of 4% (contracts > 1M). Europe excluding France: Revenue -1.2% at constant scope & FX UK: Revenue of 2,337M, -3.1% at constant scope & FX, but stable excluding decline in PFI construction revenue (- 59M). Good commercial collection and PFI performance. Germany: Revenue of 1,666M, -5.1% at constant scope & FX, volume declines and lower prices of energy sold; in Waste continued decline in C&I and Municipal volumes. Central & Eastern Europe: Revenue of 2,877M, +1.8% at constant scope & FX. Increase in Water volumes sold by 1.9%. In Energy, no significant Y-Y weather impact, lower price increases but good volumes of electricity sold on the spot market. Rest of the World: good progression: +3.5% at constant scope & FX North America: Revenue of 1,880M, -4.6% at constant scope & FX due to lower energy prices Strong growth in Asia (Revenue of 1,243M, +5.8% at constant scope & FX), driven by China (+7.9%): Energy revenue growth, new industrial Water contracts (e.g.tangshan) and hazardous waste incinerator construction. New water contracts in Japan also contributed. Global businesses: -3.3% at constant scope & FX VWT: Revenue of 2,253M (-5.3% at constant scope & FX): end of Hong Kong sludge facility construction, end of large D&B projects (Az Zour North and Sadara in 2014) and delays related to the decline in oil price. Hazardous waste: Revenue up 2.2% at constant scope & FX to 959M despite the negative impact of recycled oil prices Variations vs.2014 PF Δ Δ at constant scope & FX France -1.5% -1.5% Europe excl. France +1.2% -1.2% Rest of the World +11.7% +3.5% Global businesses +0.3% -3.3% Total pro forma +2.3% -0.6% 18

19 Quarterly revenue: Q4 slowdown due to weather and less construction activity Q1 Q2 Q3 Q4 Variations vs. pro forma 2014 at constant scope & FX at constant scope & FX at constant scope & FX at constant scope & FX France -3.6% -1.6% -0.5% -0.2% Europe excluding France -3.5% -0.7% -0.4% +0.2% Rest of the World +2.4% +4.5% +7.7% -0.2% Global businesses +2.1% -7.9% -0.1% -6.2% Total -1.4% -1.2% +1.7% -1.4% Group excluding Global Businesses -2.1% +0.5% +2.1% -0.1% Negative weather impact in Q4 Continued declines in energy and recycled raw material prices Lower growth in Asia (China) and Latin America (Ecuador) in Q4 due to the non recurrence of certain construction contracts Revenue decline in Global Businesses of 6.2% in Q4 Lower construction revenue at VWT (- 39M associated with the construction of AZ Zour North in 4Q14) at the SADE business for - 40M Strategy to improve profitability in process at VWT 19

20 Breakdown of revenue growth * Mainly pass through revenue Favorable commercial momentum (+ 311M) excluding the impact of French Water renegotiations (- 122M) Volumes: Good Water volumes (France, Central & Eastern Europe, Africa Middle East) No rebound in Waste but good resilience in France and the UK. Overall weather impact was neutral for the full year Commerce: Contract wins in Europe in Waste (France /UK) & Energy (Netherlands, Spain) Asia Pacific growth mainly in industrial water Construction: Lower PFI construction revenue in the UK (- 59M) and project delays at VWT and SADE Price effects: indexation remains favorable, but more moderate: weak in Europe in Water and Waste, stronger outside Europe Impact of lower energy prices of - 82M, of which - 70M in the USA and - 13M in Germany and lower recycled raw material prices (particularly scrap metals and used oil) for - 38M

21 Strong growth in EBITDA: +11.3% (1) +5.3% at constant scope & FX vs. pro forma , , , pro forma re-presented(2) EBITDA ( M) 2015 EBITDA up 5.3% at constant scope & FX to 2,997M Significant contribution from cost savings: + 223M France: good results in Waste Water: EBITDA down 6.1%, cost reductions partially offset commercial erosion (- 81M); benefit from volumes (+ 14M) erased by price squeezing/cost inflation. Initial impact of the Brottes Law. Waste: EBITDA increased 6.7% despite lower landfilled volumes (-6%): impact of cost reductions, lower fuel costs ( 10M) and favorable one-time elements (+ 20M) Continued growth in the rest of Europe: UK: EBITDA up 7.5% despite the decline in scrap metal and electricity prices: good commercial collection performance, impact of lower fuel costs ( 12M) and cost reductions Germany: stable EBITDA, cost reductions offset the volume declines in Waste and Energy Central & Eastern Europe: EBITDA up 10%, without any significant weather impact, due to cost reductions (coal, fuel, maintenance, SG&A ) Strong growth in the Rest of the World North America: EBITDA up 2.7% at constant scope & FX, due to efficiency gains which offset the decline in spark spreads at cogeneration facilities and lower industrial services activity China: EBITDA up 25.7% at constant scope & FX, driven by strong revenue growth and cost savings Global businesses slightly down VWT: EBITDA down 8.5%, due to revenue decline and despite G&A reductions ( 18M benefit) Hazardous waste: EBITDA down due to the decline in oil prices. Holding: Favorable variation related to corporate cost reductions (+ 30M) Variations vs PF Δ Δ constant scope & FX France -2.4% -2.4% Europe excl. France +11.7% +9.1% Rest of the World +13.8% +3.7% Global businesses -1.7% -3.7% Total Pro Forma +8.5% +5.3% (1) Variation at current scope & FX vs GAAP (2) See Appendix 2 21

22 Breakdown of EBITDA growth Favorable commercial dynamics excluding the impact of French Water contract renegotiations (- 81M) Price effect (net of cost inflation) was positive: less favorable contractual indexation offset by operational efficiency Significant contribution from cost reductions SG& A expense as a percent of revenue declined from pro forma 12.3% in 2014 to 11.9% in

23 Strong Current EBIT growth: +18.6% at constant scope & FX In M Pro forma 2014 re-presented (1) 2015 Δ vs. Pro forma 2014 Δ vs. Pro forma 2014 at constant scope & FX EBITDA 2,762 2, % +5.3% Depreciation & Amortization (2) -1,517-1,554 Renewal expenses Provisions, fair value adjustments & other Share of current net income of joint ventures and associates (3) EBIT courant (4) 1,053 1, % +18.6% (1) See Appendix 2 (2) Including repayment of OFAs (3) Excluding capital gains (4) Including share of current net income of joint ventures and associates, excluding capital gains on financial divestments o Current EBIT of 1,315M vs. pro forma 1,053M in 2014, +18.6% at constant scope & FX Decline in depreciation & amortization by 62M at constant FX, or -4.4% Variation in net charges for provisions: a reversal of + 49M related in particular to the Olivet decree for + 27M in 2015 and the elimination of certain risks in France in 2015 Strong growth in net income from JVs and Associates by 30M, including China for + 31M 23

24 Current net income increased 85% to 580M In M Pro forma 2014 re-presented (1) 2015 Δ Current EBIT (2) 1,053 1, % Cost of net financial debt Other financial income and expense Income tax expense Non-controlling interests Current net income attributable to owners of the Company % (1) See Appendix 2 (2) Including the share of current 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) o Cost of net financial debt down 48M, despite the negative foreign exchange impact of 13M o Decline in average financing rate from 5.45% to 5.0% o Other financial income and expenses includes net capital gains on financial divestments of + 60M (+ 53M net of taxes) in 2015 o Decline of current tax rate to 28.0% from 2014 pro forma rate of 35.6% o Increase in non-controlling interests related to improvement in results in Asia and Poland (Energy) 24

25 Non current items: strong improvement in Transdev results, offset by restructuring charges GAAP re-presented (1) Current net income attributable to owners of the Company Non current items, net of tax Of which: Non current impairments (2) Restructuring charges, primarily related to departure plans (3) Net income from discontinued operations Share of net income of equity-accounted entities (Transdev) Bond buyback Other Published net income attrib. to owners of the Company (1) See Appendix 2 (2) In 2015, in particular coverage of potential risks in Central and Eastern Europe (3) In 2015, restructuring, mainly in French Water 25

26 Net FCF (1) of 856M, significantly above the more than 500M objective o Continued capex discipline: Reduction in gross industrial investment of 9% at constant FX o Strong improvement in Net FCF (1) to 856M, due to the increase in EBITDA, significant reduction in WCR and the decline in capex o o Net financial debt of 8,170M Down 141M despite negative FX impact of 445M vs. GAAP Dec-end 2014 (decline of 586M at constant FX) Leverage ratio of 2.7x versus pro forma 3.0x in

27 CAPEX of 1,484M down 9% at constant FX 1,568 1, o Reduction in gross industrial investments of 9% at constant FX, or -141M o Maintenance and contractual capex of 1,217M in 2015 vs. 1,194M in ,194 1,217 o Discretionary growth capex down to 267M, related to the arrival at maturity of the PFI construction program in the UK Pro forma 2014 re presented (2) 2015 Maintenance and contractual capex Discretionary growth capex (2) See Appendix 2 27

28 WCR boosted in 2015 by non recurring cash receipts Net FCF (1) before divestments of 856M Change in WCR superior to 2014 Higher than expected cash receipts at the end of year Significant improvement at VWT and SADE due to cash advances not utilized in 2015 and reversal of 2014 unfavorable effects 28

29 Further Pre-tax ROCE improvement Average Capital Employed ( M) Pre-Tax ROCE (%) France 1,936 1, % 10.4% Europe excluding France 7,612 7, % 7.1% Rest of the World 3,910 4, % 10.0% Global Businesses 1, % 8.5% TOTAL GROUP 14,195 14, % 8.6% Pre-tax ROCE = Current EBIT excluding the share of equity-accounted entities / Average capital employed including operating financial assets and excluding investments in joint ventures and associates 29

30 Strong improvement in Post-Tax ROCE Current EBIT after taxes = Current EBIT (including Share of net income from JVs and associates) Current income tax expense Capital employed = Net property, plant & equipment and Intangible assets + Goodwill, net of impairments + Operating Financial Assets + Investments in JVs and associates + Operating and non-operating working capital + Net derivative instruments - Provisions + Capital employed from assets and liabilities held for sale, excluding discontinued operations Average capital employed during the year: average of opening and closing capital employed Current EBIT after taxes ( M) 4.4% Average capital employed ( M) Post-Tax ROCE 5.0% 5.5% 6.8% Post-Tax ROCE (%) (1) ,108 16,311 16, % 6.8% ROCE = Current EBIT after taxes / Average capital employed during the year 2012 published 2013 published Pro forma 2014 re-presented 2015 (1) As a result of the Dalkia transaction, pro forma 2014 capital employed is the closing capital employed, rather than average capital employed. 30

31 2016 Objectives in line with the 2018 plan In 2016, in the context of a deflationary environment and weak economic growth, Veolia expects to achieve significant current net income growth Revenue* and EBITDA* growth Net Free Cash Flow before divestments and acquisitions* of at least 650M Current net income* of at least 600M * At constant exchange rates 31

32 Appendices

33 Appendix 1: Currency movements Main currencies 1 = xxx foreign currency US dollar Average rate Closing rate UK pound sterling Average rate Closing rate Australian dollar Average rate Closing rate Chinese renminbi yuan Average rate Closing rate Czech crown Average rate Closing rate vs % 10.3% 9.9% 5.8% -0.3% -0.5% 14.8% 6.3% 0.9% 2.6% The average rate applies to the income statement and statement of cash flows The closing rate applies to the balance sheet 33

34 Appendix 2: Main 2014 re-presented figures (1) In M Figures presented under published 2014 scope (2) published IFRIC 21 and other adjustments 2014 Re presented Revenue 23, ,879.6 Adjusted operating cash flow 2, ,156.2 Adjusted operating income (3) 1, ,100.3 Net income Group share Adjusted net income Group share Gross industrial investments 1,533 1,533 Free cash flow (4) 309 Net financial debt 8,311 8,311 EBITDA N/A N/A 2,692.2 Current EBIT N/A N/A 1,047.7 Current net income Group share N/A N/A (1) Non audited figures (2) Published scope: including Dalkia France fully consolidated and Dalkia International consolidated by equity method during the first semester of 2014 (3) Including the re presented share of adjusted net income of joint ventures and associates as of December 31, 2014 (4) Including 24 M related to the Dalkia operation 34

35 Appendix 2: Main 2014 re-presented pro forma figures (1) In M Figures presented under pro forma 2014 scope (2) published IFRIC 21 and other adjustments 2014 Re presented Revenue 24, ,408.4 Adjusted operating cash flow 2, ,306.9 Adjusted operating income (3) 1, ,104.6 Net income Group share N/A N/A Adjusted net income Group share Gross industrial investments 1, ,568 Free cash Flow N/A N/A 314 EBITDA 2, ,761.9 Current EBIT 1, ,052.8 Current net income Group share (1) Non audited figures (2) Pro forma scope: excluding Dalkia France and with Dalkia International fully consolidated from January 1, (3) Including the re presented share of adjusted net income of joint ventures and associates as of December 31,

36 Appendix 3: Pro forma quarterly revenue by segment 1 st quarter 2 nd quarter 1 st half In M 2014 Pro forma Re-presented 2015 at constant scope & FX 2014 Pro forma Re-presented 2015 at constant scope & FX 2014 Pro forma Re-presented 2015 at constant scope & FX France 1,367 1, % 1,393 1, % 2,760 2, % Europe excl. France 2,346 2, % 1,932 1, % 4,278 4, % Rest of the World 1,331 1, % 1,256 1, % 2,588 2, % Global businesses 1,048 1, % 1,239 1, % 2,288 2, % Other % % % Group 6,147 6, % 5,863 6, % 12,010 12, % 3 rd quarter 4 th quarter Full year In M 2014 Pro forma Re-presented 2015 at constant scope & FX 2014 Pro forma Re-presented 2015 at constant scope & FX 2014 Pro forma Represented 2015 at constant scope & FX France 1,400 1, % 1,393 1, % 5,553 5, % Europe excl. France 1,821 1, % 2,375 2, % 8,475 8, % Rest of the World 1,279 1, % 1,438 1, % 5,305 5, % Global businesses 1,197 1, % 1,382 1, % 4,867 4, % Other % % % Group 5,754 5, % 6,645 6, % 24,408 24, % 36

37 Appendix 4: Pro forma quarterly revenue by business 1 st quarter 2 nd quarter 1 st half In M 2014 Pro forma Re-presented 2015 at constant scope & FX 2014 Pro forma Represented 2015 at constant scope & FX 2014 Pro forma Represented 2015 at constant scope & FX Water 2,623 2, % 2,760 2, % 5,383 5, % Waste 2,021 2, % 2,148 2, % 4,169 4, % Energy 1,503 1, % 955 1, % 2,458 2, % Group 6,147 6, % 5,863 6, % 12,010 12, % 3 rd quarter 4 th quarter Full year In M 2014 Pro forma Re-presented 2015 at constant scope & FX 2014 Pro forma Represented 2015 at constant scope & FX 2014 Pro forma Represented 2015 at constant scope & FX Water 2,762 2, % 3,091 3, % 11,235 11, % Waste 2,132 2, % 2,135 2, % 8,436 8, % Energy % 1,419 1, % 4,737 4, % Group 5,754 5, % 6,645 6, % 24,408 24, % 37

38 Appendix 5: Revenue by business decline in Water related to Construction activity REVENUE ( M) 24,408 24,965 11,235 11,348 8,436 8,692 4,737 4,925 Revenue down 0.6% at constant scope & FX to 24,965M Water: -1.7% at constant scope & FX: stability in municipal, good growth in industrial, decline in Construction activity (VWT & SADE) Municipal: in France, negative impact of contractual erosion; good volumes in o o France and Central & Eastern Europe (dry summer) Industrial: strong growth in Asia in particular Construction (VWT, SADE): revenue down 4.8% at constant scope & FX: VWT:end of Hong Kong Sludge construction, end of large D&B projects (Az Zour North and Sadara in 2014) and project delays related to decline in oil prices SADE: low activity in France related to the weak construction market Waste:+0.5% at constant scope & FX: good operational resilience in an volume context that remains weak Satisfying commercial development in France, the UK and Latin America China: hazardous waste incinerator construction continues Growth in hazardous waste despite the decline in used oil prices Energy: stable at constant scope & FX, including -1.5% related to lower energy prices (offset by margin) No favorable weather impact Good volumes in China and Central Europe Continued restructuring of the Italian contract portfolio Pro forma 2014 re presented(1) (1) See Appendix Variations vs. Pro forma 2014 Δ Δ at constant scope & FX Water +1.0% -1.7% Waste +3.0% +0.5% Energy +4.0% +0.1% Total +2.3% -0.6% 38

39 Appendix 6: Good resilience in Waste, revenue up 3% 2015 Quarterly revenue growth at constant scope & FX Raw materials volumes and prices -0.5% Volumes / activity levels +1.1% Service price increases +0.6% Other (including construction revenue) -0.7% Currency effect +3,9% Volumes Scope effect -1.4% Revenue rebound in Q4 driven by good performance in hazardous waste and higher prices, particularly in Latin America France revenue up 1% at constant scope & FX to 2,549M Good business development performance, but decline in volumes collected and landfilled. Recovery in EBITDA (+6.7% at constant scope & FX) due to cost reductions and lower fuel costs (as well as favorable one-time elements: litigation resolution, etc. for + 20M) in a pricing environment that remains difficult Rebound in paper prices since Q2 (+14.7% Y-Y), but decline in scrap metals in Q4 (-20.9% Y-Y) United Kingdom revenue down 3% at constant scope & FX to 2bn: excluding PFI construction, revenue was stable Good commercial collection performance (+5%) Good performance of incinerators (average availability of 94%) despite some unplanned technical shutdowns Extension of Staffordshire capacity from 300KT to 340KT Leeds: initial startup on December 15, 2015, full capacity expected by March 15, 2016 Germany revenue down 2.6% at constant scope & FX to 886M: contract portfolio restructuring continues 39

40 Appendix 7: Waste Breakdown of revenue by activity 2015 Revenue: 8.7bn 2014 Revenue: 8.4bn 10% 8% 18% 9% 8% 19% 10% 10% 14% 22% 15% 22% 18% 17% Urban cleaning and collection Hazardous industrial waste collection and services Hazardous waste treatment Non-hazardous industrial waste collection and services Sorting & recycling Waste to energy from non-hazardous waste Landfilling of non-hazardous and inert waste 40

41 Appendix 8: Waste- Revenue vs. Industrial production Weighted average industrial production indices for 4 key countries including SARP & SARPI : France, UK (excluding PFI), Germany, North America (excluding US Solid Waste from 2012) Sources : Until November 2015: OECD December 2015: Same index for all countries utilized for November

42 Appendix 9: Waste Evolution of raw materials prices (paper, cardboard, scrap metals) Evolution of raw materials prices ( /t) 42

43 Appendix 10: Gross investments by segment In M Maintenance and contractual capex Discretionary growth capex TOTAL Industrial investments (1) France Europe excluding France Rest of the World Global businesses Other Total gross investments , , Industrial divestments TOTAL net industrial investments 1,379 Pro forma 2014 Total gross industrial investments , Industrial divestments TOTAL net industrial investments 1,504 (1) Including partial acquisitions between shareholders with no change in control 43

44 Appendix 11: Statement of cash flows (1/2) In M EBITDA (1) 2,997 2,762 Net industrial investments -1,379-1,504 Variation WCR Dividends received (2) Renewal expenses Restructuring charges Operating Free Cash Flow 1,483 1,027 Taxes paid Interest paid Net Free Cash Flow before dividends, acquisitions and financial divestments GAAP net FCF 309 Dividends paid (3) Net financial divestments Other Cash generation Impact of exchange rates Other Variation of net financial debt Opening net financial debt 8,311 8,444 Closing net financial debt 8,170 8,311 (1) Including principal payments on operating financial assets (2) Including dividends received: China 35M (3) Dividends paid to shareholders (- 384M), non-controlling interests (- 128M) and to hybrid holders - 71M Pro forma 2014 figures GAAP 2014 figures 44

45 Appendix 11: Statement of cash flows (2/2) NET FCF (1) BEFORE DIVESTMENTS: + 856M Leverage ratio at Dec. 31, 2015: 2.7x 45

46 Appendix 12: Debt management (1/2) o Public tender offer on April 9, 2015: refinancing by bond buyback of 515M of a portion of bonds maturing in 2019, 2021 and 2022 via the issuance of a new 500M bond maturing in January 2028 with a 1.59% coupon o Arrival at term of the euro-denominated inflation indexed bond with nominal value of 1.0 billion in June 2015 o Issuance in November 2015 of a floating rate note (Euribor 3 months +0.25%) for 350M, maturing in May 2017 o Group liquidity: 8.2 billion, including 4.0 billion in undrawn confirmed credit lines that were renewed during the second half of 2015 (without disruptive covenants) o Group net liquidity: 3.8 billion o Average maturity of net financial debt: 8.8 years at December 31, 2015 versus 9.0 years at the end of 2014 Net financial debt after hedges at December 31, 2015 Currency breakdown of gross debt (after hedges) at December 31, 2015 Fixed rate: 95% Variable rate: 5 % 46

47 Appendix 12: Debt management (2/2) 47

48 Appendix 13: Gross debt and net financial debt Decline in net financial debt of 141M at 12/31/2015 despite the negative impact of exchange rates of 445M In M GAAP Closing net financial debt (1) 8,311 8,170 Average net financial debt (2) 8,818 8,950 Closing gross debt 11,242 12,027 Average gross debt (3) 11,937 11,575 Gross cost of borrowing 4.11% 3.99% RATING Moody s: P 2/ Baa1 stable outlook Standard & Poor s: A 2 / BBB stable outlook Closing cash balance 3,150 4,177 Average cash balance (4) 3,418 2,927 Rate (4) 0.94% 0.72% (1) Net financial debt represents gross financial debt (non current and current financial debt, bank overdrafts ), net of cash and cash equivalents, liquid assets and assets related to financing and including the revaluation of debt hedging derivatives. Liquid assets are financial assets consisting of funds or securities with initial maturity of more than three months, easily convertible into cash, and managed as part of a liquidity objective, while maintaining a low risk capital. (2) Average net financial debt represents the average of monthly net financial debt figures over the period (3) Excluding bank overdrafts 48

49 Appendix 14: Significant decrease in cost of net financial debt Cost of net financial debt down by 48M, due to active debt management (impact of bond buybacks in 2014 and 2015), and despite the unfavorable currency impact of 13M 45 bps decrease in average rate from 5.45% to 5.00% In M 2014 pro forma re-presented Rate 2015 Var. ( M) Cost of net financial debt (current) Rate Re-presented cost of net financial debt (1) % % (1) Excluding finance costs of discontinued operations and the variation in fair value adjustments of hedging derivatives 49

50 Appendix 15: Net liquidity In M December 2014 December 2015 Veolia Syndicated credit lines 2, ,000.0 Bilateral credit lines Lines of credit Cash and cash equivalents 2, ,297.6 Total Veolia 6, ,271.9 Subsidiaries Cash and cash equivalents Total Subsidiaries Total Group liquidity 7, ,150.6 Current liabilities and bank overdrafts 3, ,318.7 Total Group net liquidity 4, ,

51 Appendix 16: Consolidated statement of financial position In M December 31, 2014 December 31, 2015 Intangible assets 8,240 8,334 Property, Plant & Equipment 6,638 6,820 Other non-current assets 4,658 4,642 Operating financial assets (current and non-current) 2,010 1,897 Cash and cash equivalents 3,148 4,176 Other current assets 10,030 10,019 Total Assets 34,724 35,888 Capital (including non-controlling interests) 9,479 9,503 Financial debt (current and non-current) 11,785 12,543 Other non-current liabilities 3,094 3,185 Other current liabilities 10,366 10,657 Total Liabilities and Shareholders Equity 34,724 35,888 51

52 Veolia contact information Analyst & Investor Relations Ronald Wasylec Senior Vice President, Investor Relations Telephone : e mail : ronald.wasylec@veolia.com Ariane de Lamaze Vice President, Investor Relations 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 Media Relations Laurent Obadia Telephone : e mail: laurent.obadia.@veolia.com Sandrine Guendoul Telephone : e mail: sandrine.guendoul@veolia.com 38, avenue Kléber Paris France ANNUAL RESULTS 52