Veolia Environnement Sa · EURONEXT:VIE
Veolia Environnement Sa — Investor Day (December 2003)
45 slides from Veolia Environnement Sa's investor day presentation, Dec 2, 2003
Slide 1: Connex - Veolia Environnement Investor Day
\Veolla Emitonnement — Investor Day- November27th, 2003 Pais 4
Slide 2: Olivier Barbaroux, Veolia Environnement Investor Day
Olivier Barbaroux Veolia Environnement Investor Day, November 27th, 2003 ent Investor Day. November 27h, 2003 — Pais 2 Dak
Slide 3: Disclaimer
Disclaimer Veolia Environnement is a comoration 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 p
Slide 4: Contents
Contents @ Our business ® Our clients and markets ® Our strategy ® Our competitors ® Our contracts @ Key financial indicators \Veolla Emitonnement — Investor Day- November27th, 2003 Pais 4
Slide 5: Business Activities: Guaranteed performance contract
Business Activities The « guaranteed performance.» contract 5 Guaranteed results Dalkia’s core offer a Long-term contract Dalkia: A purchaser and transformer of energy + Coal 98 — - Temperature Be cfueloil —— > Process of ——>|# Bg Heat Se) fede | fe Bectncty ——> Transformation ——»| 888‘ chting «Biom
Slide 6: Business Activities: Types of service
Business Activities Types of service Upstreamenergy | Transformation process | +Coal E *Temperature +Fuel oilGas Oil —> Eneray ————> | +Heat +Gas —» transformation plant ———___» + Steam +Electricity —» (production process) ________, «Compressed air *Biomass *Lighting Energy provision Technical servi
Slide 7: Heating and cooling networks
Business Activities Heating and cooling networks ; ee Customer Dalkia’s activities Contract types references “Energy purchase ee ee “ence oulsourn “te = generating plants g oi =netwarks + Contract duration of pene = distribution stations 10-80 years ee «Sale of heat and electricity to ae end custome
Slide 8: Heating Systems and Multi-Technical services
Business Activities Heating Systems and Multi-Technical services won Dalkia key figures Dalkia’s activities Contract types +Heating sin general, +46 million apartments + Air conditioning guaranteed Se ee = Technical systems performance 8 contracts + 2,320 hospitals production (cageneration SCRUM Gle
Slide 9: Industrial Service
Industrial Service Veolia's integrated offering + Dalka (utes, themal, Fi industial maintenance jleion and Steam, hat water, compressed air, | | O&M of technical industrial water, ' systems, cogeneration, a —" general outsourcing electricity, etc. i services Industrial ainable development jaintenanc
Slide 10: Facilities management
Business Activities Facilities management But rather...... Dalkia’s multi-disciplinary know-how /~-_ © Response to customer demand for integrated outsourcing A business centred on Property > Capacity to optimise complex, multidisciplinary services ® Capacity for work force integration (personnel reh
Slide 11: Complementary businesses
Business Activities Complementary businesses Dalkia : +Revenue managed in 2002: €1.2 billion HVAC — Electrical engineering Installation Technical systems maintenance for small custorners Public lighting \Veolla Emitonnement — Investor Day- November27th, 2003 Pais Crystal Clemessy Proxiserve (50% wit
Slide 12: Revenue and employees managed by region
France Northern Europe Central Europe Southern Europe aa Envi Revenue managed (€ bn) 3.0 08 0.6 0.7 5.1 Employees managed 18 990 5 974 7 169 7 967 40 100
Slide 13: 2002 segmentation by Business and Customer type
2002 segmentation by Business and Customer type Industrials 29% Customer type Tertiary (private sect. ve Tertiary (public sector) 2% Public lighting & other Heating & cooling 5% Installation megyerie 3% industrial laintenance a ‘i " dustrial utilities 14% Heating systems & multi-technical services i
Slide 14: The strategic context
Strategy & development The strategic context The context Energy becoming generally more expensive Energy markets being liberalised More outsourcing ~ acceleration = services becoming more bundled = newmechanisms : PPP. Customers more demanding = professionalism = personalisation = reporting Sustaina
Slide 15: Strategic analysis of core businesses
Strategy & development Strategic analysis of core businesses Heating and Cooling Networks Heating Systemse Mulit-Technica Services Industrial Utilities Facilities Management Potential —eceesibie Capital Market Growth Rate Intensity LARGE STRONG HIGH +E Europe- ibn inthe Excelent Asia: China targeted
Slide 16: Major opportunities for expansion
Strategy & development Major opportunities for expansion 1, Major heating network infrastructure in Central & Eastem Europe - A substantial opportunity for the next five years - Considerable potential: in excess of €2 billion far Dalkia = The competition is currently nat very active ~ In five years,
Slide 17: The competitive environment
Strategy & development The competitive environment © Four major competitors in the energy services businesses (defined as : industrial Utilities, thermal & mult technical services, heating and cooling networks, and facilities management) © The other players = Regional players (municipalities in Genn
Slide 18: EDF partnership
Strategy & development EDF partnership @ Active international ee-aperation — joint offers in the UK and Germany, = synergies in Central & Eastern Europe = value added for Dalkia arising from EDF's commercial presence in countries So far, limited co-operation in France — limited to eligible customers
Slide 19: Example: Vilnius heating network
Example: Vilnius (Lithuania) heating network = \Veolla Emitonnement — Investor Day- November27th, 2003 Pais Revenue (6) 2500 — Revenue Gg seicle 1800 so00 + Revenue CGAR= 6.4% son. + ROCE CGAR= 28.4% on: 2000 2008 2000 19 ROCE 00% 00% 00% 200% 100% 0.0% 40,0% Dalkia
Slide 20: Example: Growth in Central and Eastern Europe
Example : Growth in Central and Eastern Europe 2010 vision: Central and Eastern European region Strong growth: ®@ Growth of existing networks and peripheral densification @ Acquisition of new networks nem ROCE 2500 sa 10% Revenue “a 1000 Gee : "2s = 2002 2010 (e) ‘Veo Environnement— Investor Day- No
Slide 21: Profitability profile
Profitability profile Industrial cogeneration project in France: 44 MW of installed capacity (12 year Customer Contract) with the benefit ofa French Cogeneration Feed-In Taritt Revers (£m) ROE 2000 eopo% 1900} — Revenue é so00% 4800 ROCE 0 700 eS 400% emote 5001 22222 evs tina Dna busras plan mt. EE
Slide 22: Key figures
Key figures () |enme 2002 Forecast 2009 Turnover 4571 4 to 7% CAGR EBIT (2) 244 EBIT margin 5.3% Capital employed 2516 ROCE ®) 7.3% > 10% VE's scope of consolidation ® EBIT corresponds to operating income as defined in French accounting regulations committee rule 99-02 © See definition of ROCE in "T
Slide 23: Financial Communication
Financial Communication Nathalie PINON, Head of Investor Relations 38 Avenue Kléber — 75116 Paris - France Telephone +33 1 71 75 01 67 Fax +33 171 75 10 12 e-mail nathalie.pinon@groupve.com Brian SULLIVAN, Vice President, US Investor Relations 1605 Main Street, Suite 710, Sarasota, FL 34236- USA Tel
Slide 24: Slide 24
Slide 25: Connex - Stéphane Richard
S connex Stéphane Richard Veolia Environnement — Investor Day November 27th, 2003 — Paris rt — Investor Day— November27th, 2003 — Pais 2
Slide 26: Disclaimer
Disclaimer Veolia Environnement is a corporation listed on the NYSE ahd 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 quarantees of future
Slide 27: Contents
Contents @ Our business ® Our positions and contracts @ Market trends ® Our competitors ® Our strategy @ Key financial indicators ‘Veolia Environnement —Investor Day November27%, 2003 —Pats 4
Slide 28: Connex, a public service operator
Connex, a public service operator @ 2002 revenue: €3,422m of which 37% in France @ Public transportation is an essential public service in industrialized countries and urban areas @ Two management methods for public transportation: - public management: state controlled companies, semi-public compani
Slide 29: Connex, a global player in local markets
Connex, a global player in local markets @ Connex’s business: operating public passenger transportation networks on an outsourcing basis and in partnerships with local transportation authorities @ Urban networks —- buses: Bordeaux, Nice, Paris region, Stockholm, Frankfurt, Maastricht, Washington, et
Slide 30: Connex in new markets
Connex in new markets @ On-demand services — transportation on demand: 12 networks in France — taxis: Netherlands, USA — paratransit: USA — call centers: France, Netherlands, USA ® Services for industrial companies — freight rail lines: France, Germany — industrial branch lines and associated logist
Slide 31: Connex's international presence
Connex’s international presence Denmark EY 3 El sreten eae “ae fated Belgium * stat iretnd EY VS E) Potna 2 eo a Unites Stes“ ance Cane Ceoch Republo ‘ a a os Soe BT EXtre, Elleb=nan “® “BD vate Colombia EY 2003(e) revenue France 37% Australia EY Rest of Europe 53% USA 5% NB: 2004 figures will not i
Slide 32: Public transportation service contracts
Public transportation service contracts @ Medium and long-term contracts: 5 to 12 years ®@ Passenger revenue risk limited or nonexistent, replaced by systems to encourage better quality and increase passenger numbers @ Investments: two contract types — Contracts with no investment: the assets (vehic
Slide 33: Examples of contracts
Examples of contracts ® Boston ® Czech Republic ® Regional transport in France ‘Veolia Environnement —Investor Day November27%, 2003 —Pats 10
Slide 34: The Boston commuter rail contract
The Boston commuter rail contract @ 13 lines/582 km/125 stations/500 rail vehicles ®@ 133,000 passengers per day/37 million per year @ The contract: — former public operator (Amtrak) — length: five years, renewable five years — operation taken over by Connex on July 1, 2003 — revenue: $200 million/y
Slide 35: The Boston commuter rail contract (cont.)
The Boston commuter rail contract (cont.) €m 250 6.06% om Revenue EBIT | —EBIT rrargin 8.60% 00 856% 18 6.50% an 8.45% 6.40% 50 6.26% ot . 6.30% 2004 (e) 2008 (e) 2006 (e) ‘Veolia Environnement —Investor Day November27%, 2003 —Pats 2
Slide 36: Connex in the Czech Republic
Connex in the Czech Republic @ Connex is the No. 1 private operator of public transportation in the Czech Republic, with 101 million passengers carried per year. ®@ 2,100 employees @ Annual revenue: €53 million @ Operations: - 11 urban networks (Prague, Chrudim, Kutna Hora, etc.) — 700 regional bus
Slide 37: Connex in the Czech Republic (cont.)
Connex in the Czech Republic (cont.) €000 ROCE % 60000 14% @ Revenue EBT a RE 50000 Ma 10% 40000 o% 30000 o% 20000 1% 40000 & 0 o% 2000 2001 2002 2003 (e ‘Veolia Environnement —Investor Day November27%, 2003 —Pats 14
Slide 38: Regional transportation in France
Regional transportation in France ® Activity under contract with French districts: — Regular bus routes — School buses — Bus station management ® Average contract length: 7 to 12 years ® 6,700 motorcoaches belonging to the companies ® Geographic reach of the companies synergistic with our urban netw
Slide 39: Regional transportation in France (cont.)
Regional transportation in France (cont.) én ROCE % 70 14% om Revenue - EBIT —ROCE eon 12% son 10% aon on oon ox 200 4% 1m 2% ot + 0% 2001 2002 2003 (e) 2008 (2) ‘Veolia Environnement —Investor Day November27%, 2003 —Pats 16
Slide 40: Outlook for Connex
Outlook for Connex @ Liberalized markets ®@ Connex's competitors ® Strategy ‘Veolia Environnement —Investor Day November27%, 2003 —Pats a
Slide 41: Strong Market Potential
Strong Market Potential €m Liberalized To be Liberalized France 4000 16 000 UK 412.000 2000 Germany 2000 24 000 Northern Europe 3000 8000 Southern Europe 4000 20.000 Eastern Europe 1000 20000 North America 8000 46 000 South America 4000 30.000 Asia Pacific 12 000 90 000 ‘Veolia Environnement —Invest
Slide 42: Connex competitors
Connex competitors Revenue EBITDA Company Nat. Geographic reach em) (em) UK 68% + USA 24% + HK 7% + Stagecoach UK ‘i 386 FirsiGroup UK UK 75% + USA 25% 483 National Express UK UK 76% + USA 16% + Australiag% 2938 310 Arriva UK UK 76% + Europe 24% Go-Ahead UK UK Us: US + Canada HongKong HongKong +Chin
Slide 43: Strategy
Strategy @ Apriority: improve our profitability, in particular for our recent international operations — review our commitments and contracts — action plan for underperforming contracts (bus in the United Kingdom and Denmark) — absorption of cash drains (combined transport, Lebanon) — selective appr
Slide 44: Key figures
Key figures Jem 2002 Targets 2009 Revenue 3 422 4 to 6% CAGR EBIT () 116 EBIT margin 3.4% Capital employed 4 257 ROCE ) 7.3% > 10% EBIT corresponds to the operating result as defined under Requlation 99-02 of the CRC, the French accounting regulations authority ® ROCE definition in November 27th, 20
Slide 45: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: December 1, 2003 VEOLIA ENVIRONNEMENT By: /s/ Jérôme Contamine Name: Jérôme Contamine Title: Chi