Veolia’s new market position and its dynamic teams allowed it to achieve continued growth in the first quarter of 2009. The company’s consolidated revenue was up 5% at constant exchange rates, including 3.4% internal growth, despite a difficult economic environment which led to a 7.7% decline in revenue at constant consolidation scope and exchange rates as compared with the first quarter of 2008 in the waste management business.

Due to the improvement of results in the Water, Energy and Transport divisions, the level of operating cash flow was generally resilient, amounting to EUR1,059.3 million. This represents a decrease of 4.1% at constant exchange rates as compared with the first quarter of 2008, which had not yet been impacted by the economic slowdown.

The measures implemented to adapt to the economic downturn in the waste management business, targeting a reduction in costs of EUR100 million in 2009, were launched during the first quarter. As expected, the effects of these programs will mostly eventuate during the second half of the year.

Furthermore, the Veolia 2010 efficiency plan aimed at generating EUR180 million in savings in 2009 and an additional EUR220 million in 2010, as well as efforts to reduce net investments by at least EUR1.6 billion to contain net investments at EUR2 billion, notably due to the already announced disposal program, are progressing in accordance with commitments.

The operating and financial performances in the first quarter are consistent with the objectives set for 2009: the generation of positive free cash flow after payment of the dividend and the generation of operating cash flow after deduction of net investments of about EUR2 billion at constant exchange rates.


Organic growth came in at 3.4%. The start-up of engineering and construction contracts, robust business activity in Europe (outside France) in the Water business as well as favorable weather conditions and an increase in energy prices at Veolia Energy offset to a large extent the contraction in business at the Environmental Services (waste management) division, mainly due to the deterioration in the economic environment (7.7% decline at constant consolidation scope and exchange rates in the waste management business).

External growth of 1.6%, (+EUR146.8 million), resulted from the acquisitions completed mainly in 2008 by Veolia Energy for EUR56.3 million, by Veolia Transport for EUR44.7 million, by Veolia Environmental Services for EUR30.3 million and by Veolia Water for EUR15.5 million.

The share of revenue posted outside France totaled EUR5,407.8 million, or 58.4% of the total versus 57.4% at March 31, 2008.

The negative EUR98.0 million impact from the translation of non-euro currencies into euros primarily reflected the depreciation against the euro of the pound sterling for EUR101.5 million and of Eastern European currencies (Czech Republic and Poland) for EUR57.4 million, partly offset by the appreciation of the US dollar (positive impact of EUR122.5 million) against the euro.


Operating cash flow totaled EUR1,059.3 million at March 31, 2009 as compared with EUR1,134.4 million at March 31, 2008, a decline of 6.6% at current exchange rates and 4.1% at constant exchange rates. This decrease resulted from the weaker performance of the Environmental Services division in all geographic locations due to the difficult economic environment, in particular lower volumes with its industrial clients, particularly in solid and liquid waste. At the Group level, this decline had a limited impact due to the good resilience of the other divisions.

Net financial debt amounted to EUR16.8 billion as compared with EUR16.5 billion at December 31, 2008. The net financial debt includes the impact of a EUR0.7 billion net investment program (primarily linked to organic growth and including operating financial assets) and increased in particular due to the seasonality of the working capital requirement.

At March 31, 2009, operating cash flow less net investments amounted to EUR383 million as compared with EUR214 million at March 31, 2008. Due to the improvement in the net amount of operating cash flow less net investments, the reduction in the working capital requirement and other diverse financial elements, the free cash flow in the first quarter of 2009 improved by more than EUR500 million, from -EUR739 million in the first quarter of 2008 to -EUR220 million in the first quarter of 2009.

In addition, within the framework of the refinancing of its existing debt and in order to maintain an average debt maturity of about nine years, the company launched a EUR2 billion bond issue on April 15, 2009.

Analysis by division:


In France, organic growth was 1% despite a slight decrease in volumes.

Outside France, excluding Veolia Water Solutions & Technologies, revenue grew 7.0% (up 5.5% at constant consolidation scope and exchange rates). In Europe, 8.6% revenue growth at constant consolidation scope and exchange rates takes into account the good level of business activity in Germany and the start of operations at the Brussels facility. At constant consolidation scope and exchange rates in Asia Pacific, revenue was relatively stable and as the increase of nearly 20% in revenue in China offset the completion of construction activities in the Gold Coast (desalination in Australia). In North America, revenue increased 16.7% at constant consolidation scope and exchange rates, mainly due to a larger volume of engineering works activity and the start of the new Milwaukee contract.

Veolia Water Solutions & Technologies posted revenue of EUR649.9 million, up 29.6% at constant consolidation scope and exchange rates, supported by “Design and Build” contracts mainly in the municipal sector, particularly in the Middle East.

At March 31, 2009, the Water division’s operating cash flow and operating income increased despite a decline in delivered volumes of water in Europe, a delay in certain tariff increases and a negative impact of foreign currency translated into euros. They included the positive effects of the start-up of operations at the Brussels facility and significant productivity improvement efforts.

Environmental Services:

The economic crisis affected volumes of solid waste collected from industrial clients and hazardous waste volumes. The decline in industrial waste volumes was about 10%, in line with the company’s expectations. The decrease in volume was marginally offset by a positive impact from pricing. The recycling activities, which represented around 9% of the Environmental Services’ division revenue in the first quarter of 2009 were in net decline (-46%), mainly due to the drop in prices.

In France, despite the full-year impact of the acquisition of Bartin Recycling Group, revenue decreased 6.9% due to the decline in volumes linked to the economic slowdown.

Outside France, organic growth declined 8.9%. Most geographical regions were impacted by the economic downturn. Accordingly, in Germany revenue fell EUR83 million (in the first quarter of 2009 as compared with the first quarter of 2008, notably due to lower volumes and the decline in prices in the paper business, as well as the slowdown in some activities such as industrial cleaning), as it did in North America (where the 14.5% appreciation in the dollar’s exchange rate offset the 7.8% decline in organic growth due in particular to the decline in treated volumes) and in Asia Pacific. Revenue in the UK remained flat at constant consolidation scope and exchange rates.