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KEY FIGURES FOR THE THREE MONTHS ENDED MARCH 31, 2013

05/3/13
Good resilience in a difficult environment
Adjusted operating income -1.5% to €405 million
New step in the group’s transformation
Launch of a new organizational structure project
Increasing the 2015 cost reduction objective to €750 million

 
Antoine Frérot, Veolia Environnement’s Chairman and CEO indicated: “First quarter results marked the Company’s resilience in a difficult economic environment due to the positive impact of the first phase of transformation decided in 2011. The new organizational structure project announced today should drive more ambitious costs reductions to €750 million in 2014, compared to the prior €470 million objective.”

Revenue for the three months ended March 31, 2013 was €5,757 million compared to re-presented €5,991 million for the prior year period

Water: revenue declined by 3.8% at constant consolidation scope and exchange rates to €2,494 million
  • Favorable indexation, but timing of the end of certain contracts resulted in a slowdown in construction activity, while contractual erosion continued in France. Good operational performance in Central and Eastern Europe and the United States.
  • Decline in Technologies and Networks revenue related to the phasing of Design and Build contracts.
Environmental Services: Revenue declined by 4.6% at constant consolidation scope and exchange rates to €1,932 million given the economic slowdown
  • Impact of lower volumes and activity levels on revenue growth was -3.5% due to the economic environment, while revenue was also negatively impacted by lower recycled raw material prices.
  • Decrease in France, Germany and the United States, while the United Kingdom and Asia Pacific grew.
Energy Services: Revenue increased 0.4% at constant consolidation scope and exchange rates to €1,268 million
  • Stability in France (-0.7% at constant scope) and significant growth in the United States.
Adjusted operating cash flow for the three months ended March 31, 2013 was €542 million compared to re-presented €581 million for prior year period
  • Down due to the impact of contractual erosion in France in the Water division and the decline in Environmental Services activity.
  • Satisfactory contribution from the Convergence Plan: €31 million, net of implementation costs.
  • Good performance in France in Energy Services, despite the end of gas cogeneration contracts.
Resilience of adjusted operating income, which amounted to €405 million for the three months ended March 31, 2013 compared to re-presented €411 million for the prior year period
  • Share of net income from joint ventures and associates increased by 4.8% to €113 million, mainly due to Dalkia International, which increased more than 20%.
  • Positive impact of the closure of the defined benefit plan for executive managers.
Net financial debt declined to €10.1 billion at March 31, 2013 versus re-presented €10.8 billion at December 31, 2012.
Adjusted net financial debt declined to €6.8 billion at March 31, 2013 versus re-presented €7.8 billion at December 31, 2012.

New step in Transformation: New organizational structure project and increase in cost reduction objective
The Company is launching a project which envisions the replacement of the current organization centered on Divisions with an integrated organization deployed by geography. This new, simpler, more reactive and nimble organization should allow the Company to:
  • adapt to new market characteristics and client demands;
  • have a more systemic approach to commercial development to drive increased growth;
  • to standardize and mutualize processes to drive greater efficiency; 
  • and generate additional cost savings.
The 2015 net cost reduction objective is being increased to €750 million5 versus the prior €470 million target, amounting to a €280 million increase, which breaks down as follows: € 70 million related to the reinforcement of mutualization and IT efforts, €100 million related to purchasing and €110 million associated with transverse efficiency projects in the businesses and headquarters.
 

Important 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 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.

Additional information is available on the company's IR web site: www.finance.veolia.com.