A player in sustainable development - Dalkia

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OUR KEY FIGURES NET INCOME CONSOLIDATED NET INCOME in millions of euros 759 928 2006 2007 +22.3% at current exchange rates 3.3x The debt coverage ratio (1) at December 31, 2007 was 3.3x versus 3.4x at December 31, 2006 (1) Ratio: net fi nancial debt / (cash fl ow from operations + repayment of operating fi nancial assets) 14 2007 ANNUAL REPORT VEOLIA ENVIRONNEMENT Given the good operating performance, the fact that tax expenses were kept in check (tax cuts in Germany and the United Kingdom in particular), and stringent management of fi nancial expenses despite a more volatile external environment, net income rose to €928 million compared with €759 million in 2006. Excluding non-recurring items, consolidated net income climbed to €933 million from €762 million in 2006. CAPITAL EXPENDITURES AND FINANCING 2007 BREAKDOWN OF CAPITAL EXPENDITURES in millions of euros OPERATING FINANCIAL ASSETS GROWTH CAPITAL EXPENDITURES 4,974 334 1,590 MAINTENANCE CAPITAL EXPENDITURES AFTER-TAX RETURN ON CAPITAL EMPLOYED – TANGIBLE AND INTANGIBLE ASSETS (ROCE) in % 10.8 10.9 2006 2007 CASH FLOW FROM OPERATIONS in millions of euros 3,844 4,219 2006 2007 +9.8%
Enhanced fi nancial fl exibility To ensure lasting business growth of more than 40% over the past three years and improve its fi nancial fl exibility, Veolia Environnement successfully launched a €2.6 billion cash capital increase with preferential subscription rights in June 2007. Now that it has strengthened its capital position, Veolia Environnement can draw on an investment capacity of €15 billion to €20 billion between 2007 and 2009 to seize growth opportunities in its core business, while complying with its profi tability criteria and its balance sheet commitments (NFD/CFO + repayment of operating fi nancial assets ranging between 3.5x and 4x). Proactive and appropriate fi nancial management Thanks to the centralized and proactive management of Veolia Environnement’s cash and debt, implemented as early as 2000, the subprime crisis that turned into a global fi nancial crisis during summer 2007, had no impact on the company’s liquidity and credit. The maturity of the company’s net fi nancial debt (including short-term debt) increased by over one year to 9.2 years at the end of 2007 compared with 7.8 years at the end of 2006. Cash fl ow from operations, up 9.8%, refl ected the improvement in performance and growth in business. After taking into account the repayment of operating fi nancial assets, total cash generation amounted to €4,614 million in 2007 versus €4,282 million in 2006. In addition to its proactive asset management policy, with divestitures in 2007, the company also implemented a risk diversifi cation policy, by getting third parties, in particular multilateral organizations, to acquire stakes in some of its subsidiaries. The cash fl ow thereby generated covered all maintenance capital expenditures (€1,590 million), current growth and development capital expenditures of €1,001 million, new operating fi nancial assets (€334 million), and the change in working capital requirement resulting from growth in business in addition to fi nancial expenses and current tax. Accordingly, free cash fl ow before new projects came to €906 million. Investments in new projects and targeted acquisitions together amounted to €3,973 million. A signifi cant part was used as follows: in the Waste Management business, acquisition of Sulo in Germany & TMT in Italy; in Energy Services, acquisition of TNAI in the United States; in the Water business, the award of the Lanzhou, Haikou and Tianjin Shibei contracts in China and acquisition of some of the unregulated business activities of Thames Water in the United Kingdom; and in the Transportation business, acquisition of People Travel Group in Sweden. After these investments and taking into account the €2.6 billion capital increase in July 2007 and the payment of dividends, net fi nancial debt totaled €15.1 billion at December 31, 2007 versus €14.7 billion at December 31, 2006. The company thus was able to fi nance all its growth while improving its fi nancial structure: the ratio of net fi nancial debt to cash fl ow from operations + repayment of operating fi nancial assets improved and stood at 3.3x at December 31, 2007 versus 3.4x at December 31, 2006. Despite the dilutive eff ect of some of these new development and acquisition projects, due to the combined impact of the increased maturity of contracts, as well as continued eff orts to drive effi ciencies and control capital employed, the after-tax return on capital employed further increased from 10.8% to 10.9%. 15
Page 1 and 2: Annual report 2007
Page 3 and 4: The global benchmark in environment
Page 6 and 7: INTERVIEW WITH THE CHAIRMAN Intervi
Page 8 and 9: 6 2007 ANNUAL REPORT VEOLIA ENVIRON
Page 10 and 11: Veolia Environmental Services: oilr
Page 12 and 13: Canada United States UNITED STATES
Page 14 and 15: OUR KEY FIGURES 2007 economic perfo
Page 18 and 19: OUR KEY FIGURES 2007 social perform
Page 20 and 21: OUR KEY FIGURES 2007 environmental
Page 22 and 23: STOCK MARKET A growth stock off eri
Page 24 and 25: OUR SHAREHOLDERS Relations shaped b
Page 26 and 27: CORPORATE GOVERNANCE The Board of D
Page 28 and 29: 1 - Henri Proglio Chairman and Chie
Page 30 and 31: OUR EMPLOYEES Growth and the human
Page 32 and 33: OUR EMPLOYEES Apprentices at the Jo
Page 34 and 35: OUR EMPLOYEES In August 2007, torre
Page 36 and 37: OUR RESEARCH AND DEVELOPMENT The te
Page 38 and 39: OUR RESEARCH AND DEVELOPMENT 7 majo
Page 40 and 41: OUR RESEARCH AND DEVELOPMENT For ec
Page 42 and 43: VEOLIA OBSERVATORY OF URBAN LIFESTY
Page 44 and 45: OUR CLIENTS An integrated approach
Page 46 and 47: OUR CLIENTS Vestalia teams at Renau
Page 48 and 49: WATER “The challenges in water ma
Page 50 and 51: BUSINESS ACTIVITIES Water Veolia Wa
Page 52 and 53: BUSINESS ACTIVITIES Water 50 2007 A
Page 54 and 55: WASTE MANAGEMENT “We owe our perf
Page 56 and 57: BUSINESS ACTIVITIES Waste Managemen
Page 58 and 59: BUSINESS ACTIVITIES Waste Managemen
Page 60 and 61: ENERGY SERVICES “Dalkia’s busin
Page 62 and 63: BUSINESS ACTIVITIES Energy Services
Page 64 and 65: BUSINESS ACTIVITIES Energy Services
Page 66 and 67:
TRANSPORTATION “With its effi cie
Page 68 and 69:
BUSINESS ACTIVITIES Transportation
Page 70 and 71:
BUSINESS ACTIVITIES Transportation
Page 72 and 73:
BUSINESS ACTIVITIES Exploration of
Page 74 and 75:
CONSOLIDATED FINANCIAL STATEMENTS C
Page 76 and 77:
CONSOLIDATED FINANCIAL STATEMENTS C
Page 78 and 79:
FOR FURTHER INFORMATION FOR FURTHER
Page 80:
Veolia Environnement 36-38 avenue K
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A player in sustainable development - Dalkia

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