field trip in chicago may 22 and 23, 2007
DESCRIPTION
2007-05-24TRANSCRIPT
NORTH AMERICA
www.VeoliaES.com
Veolia Environnement North America
Business Overview – Investor Site VisitMay 22nd - 23rd, 2007
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
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 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 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 Actof 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.
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Waste ManagementEnergy
Management
A market leader in North America
Water Transportation
• North American businesses: – 10% of global Veolia Environnement revenue or approximately $3.5
billion in revenue – Revenue increased 23.1% in 2006– Approximately 30,000 employees– Only company providing entire range of environmental services to
municipal, industrial and commercial customers
• No.1 in municipal partnerships and industrial outsourcing • +$850 million in 2006 revenue
Top 1- 4 in various categories of waste management
+$1.8 billion in 2006 revenue
• Recent launch and continued growth in North American market • +$15 million in 2006 revenue
No.1 in U.S. surface passenger transportation
+$850 million in 2006 revenue
Energy Management
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Veolia Water North AmericaNation’s leader in water services
• Market leader with 36% share in U.S., Canada and Caribbean*
• Approximately 600 communities served in 38 states
• Manage largest U.S. public-private partnership (Indianapolis achieved ISO 9001 and 14001 simultaneously – first major U.S. city to achieve this)
• Provide industrial/commercial water partnerships and operating services at 100+ facilities
• Largest U.S. industrial projects in market (customer base includes Fortune 500)
*Source: Public Works Financing, April 2006
Tampa Bay WaterSignficant DBO project
Highly trained specialists
Indianapolis – nation’slargest, most innovative partnership
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
North American Water Industry Leader
Industrial leadership
100+ industrial facilities managed for various Fortune 500 companies and manufacturers 300+ MGD daily flowAll facets of water and wastewater management for multiple industries
Municipal leadership
600 communities served 1.68 BGD daily flow299 facilities operated5,893 miles of water distribution lines and 4,426 miles of wastewater lines395,000 meters read30 effluent reuse facilities5 biosolids facilitiesHigh-security federal facilities
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Veolia Transportation in North America….
• A long history of partnerships with North American cities– Yellow Transportation began in 1909 in Baltimore, MD– ATC’s first contract began in 1930 in Escambia, FL
• Connex and ATC merged in 2005 to create Connex ATC• Shuttleport (which began in 1925) joined Connex ATC in January 2006
• Connex ATC became Veolia Transportation in April 2006. • Experienced growth of over 400% since 2001, by winning new business
• October 2006: launch of VTOD (VeoliaTransportation on Demand),and acquisition of SuperShuttle
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
… is now the largest North American operator in ground passenger transportation
• Over 16,000 employees
• 10,000 vehicles
• Over 130 contracts
• Approximately $850 million in annual revenue for 2006
• Operations in 22 States and 2 Canadian Provinces
• Services include bus, rail, paratransit, taxi, limo, call center and brokerage, shuttle services
• Operate the largest contracted fixed- route bus service in North America (Las Vegas) and largest contracted commuter rail system (Boston)
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
• Steam distribution network in Cambridge, Mass.
– Supplies process steam to global biotech and pharmaceuticals
• District heating network for Montreal
• Central plant utilities operations – NestléR&D Center (Ohio)
• Facilities management – Galleria shopping center in Houston– The Forum Shops / Caesar’s Palace in
Las Vegas
Dalkia / Veolia Energy North AmericaParticular focus on distribution networks and facilitiesmanagement
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Dalkia/Veolia Energy North AmericaManaging customers’ entire energy needs
Energy Markets
Natural GasElectricity Coal
Fuel OilGas Oil
Biomass
Central Utility Plant
BoilersChillers
CogenerationAir CompressorsCooling Towers
Energy Services
HVAC SystemsElectrical Systems
LightingProcess Equipment
Primary Energy Utilities Secondary Utility Distribution
Procurement Transformation Distribution Utilization
Steam, hot water, chilled water,
electricity
NORTH AMERICA
www.VeoliaES.com
Business Overview – Investor Site VisitMay 22nd – 23rd, 2007
Veolia Environmental Services North America: ONE COMPANY – FOUR EXPERTISES
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
VEOLIA ENVIRONMENTAL SERVICES2006 KEY FIGURES
Veolia Environmental Services is the No. 2 in the world for waste collection, recycling and treatment• 89,500 employees worldwide operating in 36 countries• Over 53 million people served• AAA corporate social responsibility rating• 465,000 industrial and tertiary sector customers• Approximately two thirds of its revenue from private companies• 58 million metric tons of waste treated at 698 waste treatment units
• Of 54.4 million tons of non-hazardous and 3.6 million tons of hazardous waste treated
• Strong emphasis on recycling and recovery• 7.4 million tons of solid waste received at 243 sorting and recycling units, of
which 4.6 million tons were recovered.• 146 landfills of which, 142 that accept biodegrable waste and 64 that have
recovery systems to transform biogas into alternative energies• 10.3 million tons of waste treated at 72 Waste-to-Energy facilities• In partnership with Veolia Water, 2 million tons of sludge waste recovered at
102 composting units
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Asia Pacific 8 %
Europe (Except France)25 %
France45 %
North America20 %
• 2006 revenue : EUR7.5 billion ($9.8 billion)
• Recurring Operating Income :EUR648 million ($854 million)
• 55% of sales generated outside France
Rest of the world2 %
• Breakdown of revenue by geographical area :
VEOLIA ENVIRONMENTAL SERVICESKEY FINANCIAL FIGURES
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
VEOLIA ENVIRONMENTAL SERVICESIN NORTH AMERICA
• # 1 in Industrial Cleaning• # 2 in Hazardous Waste• # 3 in Waste to Energy• # 4 in Solid Waste*• # 1 in Total Waste Management• $1.8 Billion in Revenue (2006)• 250 Locations• 10,900 Employees (USA: 9400 – Canada: 1500)• Established in US in 1984
* Includes solid waste collected for incineration.
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
1984 -1997
Veolia Environmental Services’ Developmentin North America
1998 -1999
•Cold start of Montenay in the late seventies (1978 first O + M contract won for Quebec city WTE facility)
•1985: First U.S. WTE contract in Miami-Dade
•1987: Vancouver, Canada WTE contract.
•1988–90: WTE contracts in California, Pennsylvania and NY
•1992: WTE ownership in Pennsylvania
•1998-99: Sani Mobile and Sani Gestion in Canada are acquired for the Industrial Services and Solid Waste, adding $60 million in revenue.
•1998-99: 3 WTE contracts acquired from Westinghouse
•1999: JV with Waste Management’s AETS (‘99), adding $150 million in revenue to the Industrial Services and Hazardous Waste operations.
•1999: Superior Services is acquired adding $395 million in revenue and a strongpresence in the Midwest for Solid Waste.
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Veolia Environmental Services’ Developmentin North America
2000 -2003
•Significant organic growth (Vancouver extension, Queens-NY, Freeport, Bahamas, Wyeth…).
•2000: Assets acquired from Allied in Solid Waste (approx. $125 million in revenue added).
•2000: Remaining stake of AETS is acquired from Waste Management.
• Industrial Cleaning business acquires Heist assets in the U.S. and Canada.
•The Charleston (2002) and Savannah (2003) contracts are acquired in WTE
2004 -Present
• Growth of 27% from 2004 – 2006 driven by organic growth
• Key benchmark contract awards in Solid Waste (Pontiac, MI); Hazardous (Pfizer); Waste-to-Energy (Miami-Dade renewal and Pinellas, FL award) and Industrial Cleaning (BP)
• Rapid development of Industrial Services business and development of new business opportunities in niche markets (e.g. marine services)
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
MIX of BUSINESS
2006 Revenue: $1.8 Billion
Solid Waste40%
Industrial Services30%
Hazardous Waste19%
WTE11%
By Division By Client
Industrial and Commercial
70%
Municipal30%
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
AN INTEGRATED OFFER
Solid Waste Services- Collection- Transfer- Recycling- Disposal- On-Site Management
127,00 commercial and industrial clients, 470 municipal contracts (11 states + Canada), 27 landfills
Industrial Services- Industrial Cleaning- Mechanical Services- Sewer Services- Dewatering- Precommissioning- Marine Services
70 service locations
Hazardous Waste Services- Incineration- Fuels Blending- Recycling and Recovery- Lab Packing- Emergency & Special Services
47 service locations, 13 TSDF’s, 2 incinerators
Waste-to-Energy- Waste combustion- Energy Recovery- Facility Operation- Facility Maintenance- Retrofitting
11 WTE Plants
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Veolia Environmental Services North America is the onlyintegrated waste service company with strong market positions across all segments
IndustrialServices
Solid Waste HazardousWaste
Waste-to-Energy
Company
Veolia Environmental Services #1#1
#3#3
#2#2
#4* #2#2 #3#3 (11 plants*; (11 plants*; largest U.S. plant)largest U.S. plant)
#2 (16 plants)#2 (16 plants)
#3#3
#1#1
#1 (31 plants)#1 (31 plants)
#1
#2
#3
#5
*Includes treatment of solid waste from Waste-to-Energy operations
Waste Management
Allied Waste
Republic Services
Waste ConnectionsAmer. Ref-Fuel/Covanta
PSC
Clean Harbors
Hydrochem
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
NORTH AMERICASOLID WASTE
www.VeoliaES.com
Veolia Environmental Services NA - Solid Waste
NORTH AMERICASOLID WASTE www.VeoliaES.com
SERVICECAPABILITIES
• Solid waste collection• Transfer• Recycling• Disposal• Liquid solidification• Biodegradable waste
composting• Waste evaluations• Industrial in-plant services• Landfill Operation
NORTH AMERICASOLID WASTE www.VeoliaES.com
KEY FIGURES
• Fourth largest waste services* firm in US
– 10.6 million tons processed– 3,600 employees– $740 M 2006 revenues
• Services provided to more than 1.7 million residential, commercial and industrial customers.
• Facilities:– 3,000+ vehicles in fleet– 64 collection operations– 37 transfer stations– 16 recycling stations– 27 solid waste landfills
* Includes solid waste collected for incineration.
NORTH AMERICASOLID WASTE www.VeoliaES.com
Mix of Business Collection Mix
MIX OF BUSINESS – COLLECTION MIX
2006 Revenue: $ 740 Million
Third Party Disposal19% Recycling Collection &
Resale10%
Collection, Transfer & Disposal
71%
Industrial28%
Comme39%
Residential /
rcial
Municipal
33%
NORTH AMERICASOLID WASTE www.VeoliaES.com
NORTH AMERICATECHNICAL SOLUTIONS
www.VeoliaES.com
Veolia ES Technical Solutions
NORTH AMERICA
www.VeoliaES.comNORTH AMERICATECHNICAL SOLUTIONS www.VeoliaES.com
SERVICE CAPABILITIES
• Electronics recycling• Emergency response• Fuels blending• Household hazardous waste• Incineration• Internet reporting services• Laboratory chemical services• Low-level radioactive waste• On-site services• Reactive chemicals management• Recycling and recovery• Remediation• Specialty services• Stabilization and landfill• Training and awareness programs• Transportation
NORTH AMERICA
www.VeoliaES.comNORTH AMERICATECHNICAL SOLUTIONS www.VeoliaES.com
• Regional and national service offering
– Serving US and Puerto Rico
– 1,600 employees
– $350M 2006 revenues
• Facilities:– 2 incineration facilities
– 13 company operated TSDF’s
– 36 (10) day in transit facilities
– 4 fuels blending facilities
– 5 electronics / metals recycling facilities
KEY FIGURES
NORTH AMERICA
www.VeoliaES.comNORTH AMERICATECHNICAL SOLUTIONS www.VeoliaES.com
MIX OF BUSINESS
2006 Revenue: $350 Million
Metal Recycling3%
Fuels/Reclaim12%
Electronic recycling9%
Incineration20%
Services56%
NORTH AMERICA
www.VeoliaES.comNORTH AMERICATECHNICAL SOLUTIONS www.VeoliaES.com
NORTH AMERICAINDUSTRIAL SERVICES
www.VeoliaES.com
Veolia ES Industrial Services
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAINDUSTRIAL SERVICES www.VeoliaES.com
SERVICE CAPABILITIES
• Hydroblasting• Ultra High Pressure Water • Wet/Dry Vacuuming• Chemical Cleaning• Precommissioning Services• Explosives/Deslaging• Tank Cleaning• Separation Technologies• Dredging• Waste Transportation• In Plant Services• Turnaround Management• Mechanical Services• Heat Exchanger Services• Abatement• Remediation• Surface Coating and Sandblasting• Industrial Diving with Saturation
Systems
• Marine/Offshore Services • Emergency Response• Biosolids• Sewer Inspection, Cleaning, Managed Service
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAINDUSTRIAL SERVICES www.VeoliaES.com
• Regional and national service offering
– 30 years specialized industry experience
– 4,900 employees in US and Canada
– $560 M 2006 revenues
• Facilities:– Over 70 service locations
in US and Canada
KEY FIGURES
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAINDUSTRIAL SERVICES www.VeoliaES.com
NORTH AMERICAWASTE-TO-ENERGY
www.VeoliaES.com
Veolia ES Waste-to-Energy
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAWASTE-TO-ENERGY www.VeoliaES.com
SERVICE CAPABILITIES
• Develop, design, construct and operate waste-to-energy incinerators
• Oversee full waste-to-energy plant operations including waste delivery, unloading, separation, feeding, combustion, energy recovery, residue management and pollution controls
• Assured destruction of non-regulated waste
NORTH AMERICAWASTE-TO-ENERGY
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAWASTE-TO-ENERGY www.VeoliaES.com
KEY FIGURES
• 670 employees• $190 M 2006 revenues • Facilities:
– 11 waste-to-energy plants operated in the US and Canada– 4.9 million tons of municipal waste disposed of annually– Electrical energy generated to meet the needs of 345,000 households
• Operating and safety excellence– OSHA VPP (5 plants)– ISO 14001 Environmental Certified (8 plants)
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAWASTE-TO-ENERGY www.VeoliaES.com
NORTH AMERICA
www.VeoliaES.com
Veolia ES North AmericaVESNA Financial Review
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Revenue ($ in millions)
1,317 1,3761,455
1,842
2002 2003 2004 2005 2006Note: 2002 & 2003 presented in Local GAAP, 2004 - 2006 presented in IFRS
+ 15.7%
1,591
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Contribution to growth from all areas of the business
0100200300400500600700800
Solid Waste IndustrialServices
TechnicalSolutions
WTE
20052006
2005 versus 2006 revenue (in $millions)
+8%
+39%
+10%
+5%
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
AMERICA AND GLOBAL WARMING
““HAVE WE TURNED UP EARTHHAVE WE TURNED UP EARTH’’S THERMOSTAT?S THERMOSTAT?””Chicago Tribune Jan. 10, 2007
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
AMERICA AND GLOBAL WARMING
““MORE COMPLEX THAN IT LOOKSMORE COMPLEX THAN IT LOOKS””
• Kyoto Protocol (signed) but never enforced by Congress
• USA (5% of world population) 27% of world CO2
• Per Capita American Carbon emission 20 Tons/year
(European 10 T, Chinese 4 T, Indian <2T)
• Former Chairman of Senate Environment Committee:
Global WarmingGlobal Warming…… The greatest hoax EverThe greatest hoax Ever
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
AMERICA AND GLOBAL WARMING (Cont…)
““MORE COMPLEX THAN IT LOOKSMORE COMPLEX THAN IT LOOKS””
• But
– Pittsburgh No. 400 City after LA, San Francisco, N.Y., Chicago to sign the US Mayors climate protection agreement
– California from “High Tech to Green Tech State”
– Regional Green house gas initiative signed in 7 states
– Mr. President himself in favor of alternative to “oil addiction”
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Ethanol: Good or Bad Idea?
Bad: Food vs. Fuel (corn, wheat, etc.)• Corn price per bushel x2 to $4.00• “Ay Tortilla” crisis in Mexico• Sugar cane Brazilian model not duplicable• Poor energy mass balance
Good: Cellulosic ethanol (wood/waste)• Biofuel from grease trap (France)• Secondary liquid fuel (UK, USA)• Biofuel from trash (Okeelanta, USA)• Trash to fuel (Oslo, Norway)
Timing• Tsunami (2004) Katrina/Rita (2005) Stern report (2006)• European commitment to cut Co2 emissions• 30% (2020) – 50% (2050) vs. 1990
Unique momentum for change in public behavior
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
TURNING WASTE INTO A RESOURCE
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Summary
• Fully integrated waste services company across the full value chain – Key market differentiation with competition
• Focused on profitable growth– Contract awards and renewals in more mature markets (solid waste,
waste-to-energy)– Strong growth opportunities and extension of business in new high-
value niche service markets (e.g. marine services)– Improved pricing environment (solid waste and hazardous waste)– Tuck-in acquisitions to complement core portfolio of business
• Continuation of efficiency efforts post Veolia Efficiency Plan
• Continued focus on driving improved ROCE and cash flow– Improved operating performance– Selective investments in core markets (All projects must meet IRR =
WACC + 3%)
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
Questions? Thank You.
Turning waste into a resource
NORTH AMERICA
www.VeoliaES.comNORTH AMERICAwww.VeoliaES.com
• Nathalie PINON, Head of Investor Relations38 Avenue Kléber – 75116 Paris - France
Telephone +33 1 71 75 01 67Fax +33 1 71 75 10 12
e-mail [email protected]
• Brian SULLIVAN, Vice President, US Investor Relations700 E. Butterfield Road -Suite 201
Lombard, IL 60148 - USATelephone +1 (630) 371 2749
Fax +1 (630) 282 0423e-mail [email protected]
Web sitehttp://www.veolia-finance.com
Investor Relations contact information