24
Key figures for the period ending March 31, 2014 Conference call May 7, 2014
Key figures for the period ending
March 31, 2014
Conference call May 7, 2014
Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document contains "forward-looking
statements" within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-
looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking
statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not
limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risks associated with
conducting business in some countries outside of Western Europe, the United States and Canada, the risk that changes in
energy prices and taxes may reduce Veolia Environnement's profits, the risk that we may make investments in projects
without being able to obtain the required approvals for the project, the risk that governmental authorities could terminate or
modify some of Veolia Environnement's contracts, the risk that our long-term contracts may limit our capacity to quickly and
effectively react to general economic changes affecting our performance under those contracts, the risk that acquisitions
may not provide the benefits that Veolia Environnement hopes to achieve, the risk that Veolia Environnement's compliance
with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may
negatively affect Veolia Environnement's financial results and the price of its shares, the risk that Veolia Environnement may
incur environmental liability in connection with its past, present and future operations, as well as the risks described in the
documents Veolia Environnement has filed with the U.S. Securities and Exchange Commission. Veolia Environnement does
not undertake, nor does it have, any obligation to provide updates or to revise any forward-looking statements. Investors
and security holders may obtain a free copy of documents filed by Veolia Environnement with the U.S. Securities and
Exchange Commission from Veolia Environnement.
This document contains "non-GAAP financial measures" within the meaning of Regulation G adopted by the U.S. Securities
and Exchange Commission under the U.S. Sarbanes-Oxley Act of 2002. These "non-GAAP financial measures" are being
communicated and made public in accordance with the exemption provided by Rule 100(c) of Regulation G
Quarterly results are unaudited
Disclaimer
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 2
Good revenue resilience
Adjusted operating cash flow for water and waste
activities grew 9.6% at constant exchange rates
Significant negative weather impact at Dalkia
Confirmation of the 2014 objective of around 10%
growth in adjusted operating cash flow at constant
exchange rates
Continued results improvement through the
successful execution of our strategy
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 3
1Q 2014 key figures
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 4
Results consistent with our annual guidance
• Adjusted operating cash flow of €547M
+0.9% at current FX
+2.3% at constant FX
+9.6% at constant FX excluding Dalkia France
• Revenue of €5,688M
-1.2% at current FX
+0.5% at constant FX
+3.1% at constant scope & FX excluding Dalkia France
Revenue was resilient
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 5
Excluding Dalkia France, revenue increased 3.1% at constant scope & FX
• Overall stability in France (both in water and waste) • Continued growth in Europe excluding France: UK waste, Central &
Eastern Europe • Significant growth in Rest of the World: Australia and USA • VWS: completion of the Hong Kong incinerator • Dalkia France revenue decline related to weather and end of gas
cogeneration contracts
At constant FX
constant scope & FX
France +0.3% +0.3% +0.3%
Europe excl. France +4.0% +4.0% +4.3%
Rest of the World +17.5% +26.1% +11.2%
Global businesses -3.0% -1.2% -0.7%
Dalkia France -20.7% -20.7% -20.5%
Total -1.2% +0.5% -1.7%
Total excl. Dalkia France +3.8% +6.0% +3.1%
Revenue in €M
(1) See Appendix 3
Good performance in Water and Waste
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 6
Excluding Dalkia France, revenue increased 3.1% at constant scope & FX
• Water (Operations): Confirmed organic growth • Waste: encouraging quarter, a continuation from Q4
• Volumes +2.8% and service prices +0.3% • Energy Services: Dalkia France revenue decline of 20.7% related to
weather and end of gas cogeneration contracts
Revenue in €M
5,688 5,757
At
constant FX constant scope & FX
Water -0.1% +2.1% +0.9%
o/w Operations +2.7% +4.8% +2.6%
o/w Technologies & Networks -6.1% -3.8% -2.6%
Waste +4.8% +6.7% +3.3%
Energy Services -11.9% -11.4% -14.2%
Total -1.2% +0.5% -1.7%
Total, excluding Dalkia France +3.8% +6.0% +3.1%
(1) See Appendix 3
Commercial successes continued in the 1st quarter
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 7
Shell Carmon Creek Oil & Gas Brent Council UK
Traditional model (£142M, 9 years)
Nantes Métropole Traditional Model €64.5M (group share)
Santiago de Chile Traditionnel model (€40M , 8 years)
Buenos Aires, Argentina Traditional model
(€500M, 10 years
Ecopetrol America Oil & Gas ($73M)
Basra, Iraq Desalination
($115M) FPCC, Taiwan
Oil & Gas (€15M)
Japan Traditional model
(€14M, 5 years)
Novartis (€925M, 5 years)
Examples of contracts won since the beginning of 2014
Annual adjusted operating cash flow objective in
sight following Q1 growth
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 8
• Adjusted operating cash flow of €547M increased 2.3% at constant FX and +9.6% excluding Dalkia France
• France: stability in water (despite price erosion and 1% reduction in volumes)
• Europe excluding France: progression mainly in the U.K. (waste) and in Central and Eastern Europe (water)
In Germany, the Braunchweig contract was negatively impacted by weather and lower margins on electricity tariffs, but waste operations improved due to restructuring
• Rest of the World: significant growth,
United States: good performance at TNAI and end of Marine Services losses
Impact of the Proactiva integration
China: improvement in waste (good volumes and lower structural costs)
• Global businesses: performing well, particularly hazardous waste
• Dalkia France: Adjusted operating cash flow declined 23% due to weather and end of gas cogeneration contracts
• Continued cost savings in the 1stfirst quarter: €62M gross savings and €54M net savings
Adjusted operating income impacted by weather in Energy
Services… but increase in adjusted net income due to lower
finance costs
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 9
• Adjusted operating income of €376M versus €406M in 1Q 2013 -6.5% at constant FX Stable excluding the impact of pension reversals in 2013(1)
• Excluding Dalkia France, and excluding variation of pension provisions, adjusted operating income grew 7% at constant FX Benefit of cost savings
And despite the significant negative weather impact at Dalkia International
(lower net income from JVs and associates from €114M in 1Q2013 to €81M in 1Q2014)
• Significant growth in adjusted net income compared to re-presented 1Q 2013 • Lower net finance costs given lower average gross debt
(1) Pension provision reversal of +€40M in 1Q 2013 and +€8M in 1Q 2014
Improvement in net FCF(1) in 1Q 2014
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 10
-564-432
1Q 2013(2) 1Q 2014
Net FCF (1)
• Continued capex discipline
• Negative net FCF (seasonality)
• … but improvement compared to 1Q 2013 (excluding hybrid issuance)
• Net financial debt of €8.6 billion, up slightly due to operating WCR seasonality
(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 of €1,470M in January 2013
10,106
8,177 8,556
Mar. 31, 2013 Dec. 31, 2013 Mar. 31, 2014
Net financial debt(€M)
SNCM
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 11
• No change in shareholder structure
• Funding of current activity now provided by the French government
• No new financing from Transdev or Veolia in 2014
Confirmation of our 2014 objectives
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 12
2014 Objectives (1)
• Revenue growth
• 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
Continued focus on capex management and growing cash generation
(1) At constant exchange rates
(1) Excluding debt reduction €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%
2012-2013 : 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 €6n 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)
Mid-term objectives
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 13
Appendices
Appendix 1: Key 1Q 2014 figures
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 15
In €M 1Q 2013
re-presented (1)
1Q 2014
Revenue 5,757 5,688
Adjusted operating cash flow 541 547
Adjusted operating income (2) 406 376
Gross investments 335 298
Free cash flow -876 (3) -407
Net financial debt 10,106 8,556
(1) 2013 re-presented for IFRS 5, 10 and 11 (the representation associated with IFRS 5 only applies to the income statement: see Appendix 3) (2) 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) (3) Excluding the hybrid issuance of €1,470M in January 2013
Key figures
Appendix 2: Currency movements
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 16
The average rate applies to the income statement and statement of cash flows The closing rate applies to the balance sheet
Main currencies
1 unit of foreign currency = …€
1Q 2014 1Q 2013 Δ 2014 vs. 2013
US dollar
Average rate
Closing rate
0.7301
0.7253
0.7574
0.7809
-3.6%
-7.1%
UK pound sterling
Average rate
Closing rate
1.2080
1.2074
1.1741
1.1826
+2.9%
+2.1%
Australian dollar
Average rate
Closing rate
0.6549
0.6693
0.7864
0.8125
-16.7%
-17.6%
Czech crown
Average rate
Closing rate
0.0364
0.0364
0.0391
0.0389
-6.9%
-6.4%
Appendix 3: Main 1Q 2013 figures re-presented for
IFRS(4)
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 17
In €M 1Q 2013 Published
IFRS 5 Adjustment(1)
1Q 2013 Re-presented
Revenue 5,756.6 - 5,756.6
Adjusted operating cash flow 541.5 - 541.5
Operating income 290.3 - 290.3
Operating income after share of net income of equity-accounted entities (2)
403.4 +1,2 404.6
Adjusted operating income (3) 404.9 +1,2 406.1
Gross investments 335 - 335
Free Cash Flow 594 - 594
Net financial debt 10,106 - 10,106
Loans granted to joint ventures 3,304 - 3,304
Adjusted net financial debt 6,802 - 6,802
(1) Reclassification into discontinued operations of the net income of the Eaux de Berlin associated sold in December 2013
(2) Including the re-presented share of net income of joint ventures and associates for the three months ended March 31, 2013
(3) Including the re-presented share of adjusted net income of joint ventures and associates for the three months ended March 31, 2013
(4) Non-audited figures
Appendix 4: Quarterly revenue
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 18
1st quarter 2nd quarter 3rd quarter
In €M 2012
Re-presented(1)
2013
Δ constant
scope & FX
2012
Re-presented(1)
2013
Δ constant
scope &
FX
2012
Re-
presented(1)
2013
Δ constant
scope & FX
Water 2,611 2,494 -3.7% 2,633 2,507 -3.8% 2,638 2,487 -2.6%
Waste 2,065 1,932 -4.6% 2,142 2,053 -1.4% 2,126 2,021 +1.0%
Energy Services 1,276 1,268 +0.4% 639 705 +12.5% 572 520 -6.2%
Other 39 63 +20,4% 44 53 -6.5% 41 53 -2.4%
Company 5,991 5,757 -3.0% 5,457 5,317 -1.0% 5,377 5,081 -1.5%
4 the quarter Full year ending Dec. 31, 2013 1st quarter 2014
In €M 2012
Re-presented(1)
2013
Δ constant
scope &
FX
2012
Re-
presented(1)
2013
Δ constant
scope & FX
2013
Re-presented(1)
2014
Δ constant
scope & FX
Water 2,814 2,734 +1.1% 10,696 10,222 -2.2% 2,494 2,492 +0.9%
Waste 2,179 2,070 -1.2% 8,512 8,076 -1.5% 1,932 2,024 +3.3%
Energy Services 1,366 1,264 -6.5% 3,852 3,756 -1.1% 1,268 1,116 -14.2%
Other 55 91 -21.2% 179 261 -4.2% 63 56 -10.7%
Company 6,414 6,160 -1.5% 23,239 22,315 -1.8% 5,757 5,688 -1.7%
(1) See Appendix 3
Appendix 5: Revenue by segment and by division
19
Quarter ended March 31,
2014 In €M
France Europe excl. France
Rest of the
World
Global
Businesses
Dalkia
France
Others Total
Water 745.9 548.0 460.4 733.5 - 3.9 2,491.7
Environmental Services 624.4 670.1 463,9 222.0 - 43.8 2,024.2
Energy Services - - 181.8 - 934.3 - 1,116.1
Other - - - - 56.4 56.4
Company 1,370.3 1,218.1 1,106.1 955.5 934.3 104.1 5,688.4
Quarter ended March 31,
2013 re-presented(1) In €M
France Europe excl. France
Rest of the
World
Global
Businesses
Dalkia
France
Others Total
Water 747.4 540.3 423.5 778.3 - 4.0 2,493.5
Environmental Services 618.6 630.3 428.9 207.4 - 47.2 1,932.4
Energy Services - - 88.9 - 1,178.6 - 1,267.5
Other - - - - - 63.2 63.2
Company 1,366.0 1,170.6 941.3 985.7 1,178.6 114.4 5,756.6
Total Company
Variation (%)
France Europe excl. France
Rest of the
World
Global
Businesses
Dalkia
France
Others Total
At Current scope & FX +0.3% +4.0% +17.5% -3.0% -20.7% -9.1% -1.2%
At Constant FX +0.3% +4.0% +26.1% -1.2% -20.7% -9.6% +0.5%
Constant scope & FX +0.3% +4.3% +11.2% -0.7% -20.5% -9.6% -1.7%
(1) See Appendix 3
Appendix 6: Focus Dalkia International
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 20
• Revenue declined 10.6% at constant scope and FX to €1,258M largely related to the significant negative impact of weather
• Primarily in Poland, Czech Republic, and Lithuania • Double effect derived from lower electricity production and therefore lower plant
efficiency • Impact of tighter regulatory environment in Lithuania on electricity sales
• Significant decline in adjusted operating cash flow, related to these exogenous items • Stability of cash flows given improved working capital management and capex control
Appendix 7: Waste – Revenue vs. Industrial
Production
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 21
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)
Industrial Production and Waste Organic Growth Quarterly Y-Y growth rate
Appendix 8: Waste– Evolution of raw materials
prices (paper, cardboard, scrap metals)
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 22
Evolution of raw materials prices (€/t)
0
50
100
150
200
250
300
350
400
450
500
0
20
40
60
80
100
120
140
160
180
Cardboard (ref. 1.05) Paper (Ref. 1.11) Metals (E40)
Appendix 9: 1Q Pro forma Company figures
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 23
Pro forma figures: Dalkia International at 100% & excluding Dalkia France
In €M 1Q 2013
re-presented
1Q 2014
constant FX
constant FX Excluding Dalkia
International
Revenue 6,087 6,029 -1.0% +1.0% +6.0%
Adjusted operating cash flow 697 675 -3.2% -1.5% +9.6%
Gross industrial investments including new OFAs
325 290 -10.8% na na
Investor Relations contact information
VEOLIA KEY FIGURES AS OF MARCH 31, 2014 24
http://www.finance.veolia.com
Terri Anne Powers Director of North American Investor Relations
200 East Randolph Street, Suite 7900 - Chicago, IL 60601 Tel : +1 (312) 552 2890 Fax : +1 (312) 552 2866
e-mail : [email protected]
Ariane de Lamaze Téléphone : +33 1 71 75 06 00
Fax : +33 1 71 75 10 12 e-mail : [email protected] 38, avenue Kléber - 75116 Paris - France
Ronald Wasylec Senior Vice President, Investor Relations
Téléphone : +33 1 71 75 12 23 e-mail : [email protected]
