2009 Annual results

Investor Relations – 2009 Annual Results – 05.03.10

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.

This document contains certain information relating to the valuation of certain of Veolia Environnement’s recently
announced or completed acquisitions. In some cases, the valuation is expressed as a multiple of EBITDA of the acquired
business, based on the financial information provided to Veolia Environnement as part of the acquisition process. Such
multiples do not imply any prediction as to the actual levels of EBITDA that the acquired businesses are likely to achieve.
Actual EBITDA may be adversely affected by numerous factors, including those described under “Forward-Looking
Statements” above.

2

Antoine Frérot
Chief Executive Officer


Table of Contents

 2009 highlights

 2009 results

 Outlook

4


2009 highlights: commitments met

 Asset divestment program carried out
— 2009 divestments: €1,291m*, exceeding the €1,000m commitment

 Net financial debt
— Significant drop in net financial debt to €15.1bn from €16.5bn at December 31, 2008
— Improvement in credit ratio

 Sharp increase in free cash flow at €1,344m
— Positive free cash flow after dividend payment and before divestments

 Operating cash flow – net investments
— €2,357m versus €601m in 2008, exceeding the commitment of €2,000m

 Investments tightly controlled
— Down nearly 30% to €3,331m from €4,702m in 2008
— Stopped acquisitions
— Maintenance investments held at nearly 5% of revenue

* Including €138m in capital increase of minority shareholders

5


2009 highlights: rapid adaptation to the business
environment

 Cost reduction plans
— General efficiency Plan: contributed €255m in 2009, topping an initial objective of €180m
— Veolia Waste Adaptation Plan: €126m in cost savings compared to €100m objective

Total cost savings: €381m

 Revenue contracted 2.5% at constant FX rates to €34,551m with stabilization of the economic
environment in the second half
 Operating cash flow: Favorable trend in Q4 09
— €3,956m, generating a stable operating cash flow margin in 2009 of 11.5%
2008
Operating cash flow Operating cash flow margin
2009
(€m)

6


Dividend policy

€1.21 €1.21 €1.21 (1)
€1.05

€0.85
€0.68

€0.55 €0.55 €0.55

2009 dividend at €1.21 (1) per share
(1) Subject to approval by the Annual Shareholders' Meeting on May 7, 2010

7

Pierre-François Riolacci
Chief Financial Officer


2009 key figures

€m 2008
2009
adjusted (1)

Revenue 35,765 34,551
Operating cash flow 4,105 3,956
Recurring operating income 2,275 1,932
Operating income 1,961 2,020
Recurring net income attrib. to equity holders of parent 687 538
Net income attrib. to equity holders of parent 405 584

Net financial debt 16,528 15,127
Net financial debt / (Cash flow from operations + 3.64 X 3.44 X
repayment of operating financial assets)
Net earnings per share (€) 0.88 1.24
Recurring net earnings per share (€) 1.49 1.14
Dividend per share (€) 1.21 1.21 (2)

(1) To ensure the comparability of financial years, 2008 financial statements have been adjusted:
- by the divestment of Freight operations in the Transport division in December 2009 and of Waste-to-Energy operations in the Waste Division in the United States in August
2009; which are presented in the income statement in the line item “net income from discontinued operations” according to IFRS 5;
- by the reclassification into “net income from discontinued operations” of UK operations in the Transport division and of the Renewable Energies business; the balance of assets
and liabilities of these two cash-generating units was reclassified under the assets and liabilities held for sale lines.
(2) Subject to approval by the Annual Shareholders' Meeting on May 7, 2010
(3) Audit processes are ongoing by auditors

9


Breakdown of revenue by division

€m

35,765  current  constant Exc. scope
34,551 FX rates FX rates & FX
■ Water +0.0% +0.2% -0.4%
■ Environmental Services -9.2% -7.9% -7.8%
35% 12,558 12,556
36%
■ Energy services -4.9% -3.0% -2.2%
■ Transportation +1.3% +1.9% +0.4%

VE Group -3.4% -2.5% -2.7%
28% 9,973 26% 9,056

21% 7,446 21% 7,079

16% 5,788 17% 5,860

2008 adjusted (1) 2009

(1) To ensure the comparability of financial years, 2008 financial statements have been adjusted: Refer to footnote (1) slide 9 for details

10


Breakdown of revenue by geographic zone

€m

 current  constant Exc. scope
35,765 34,551 FX rates FX rates & FX
■ France -4.9% -4.9% -4.9%
■ Europe ex France -5.5% -1.3% -1.1%
40% 14,465 40% 13,756 ■ North America +2.4% -2.9% -3.7%
■ Asia/Pacific +3.4% +0.9% -1.0%
■ Rest of the world +1.4% +2.2% +0.8%

VE Group -3.4% -2.5% -2.7%
36%
12,964 35% 12,257

9% 3,072 9% 3,144
8% 2,708 8% 2,801
7% 2,556 8% 2,593
2008 adjusted (1) 2009


11


Operating cash flow (1)

€m 2008 2009  current  constant
FX effect
adjusted (2) FX rates FX rates

Water 1,821 1,837 0.8% (31) +2.6%
Environmental Services 1,331 1,194 -10.3% (19) -8.8%
Energy services 759 740 -2.5% (25) +0.8%
Transportation 287 327 +13.8% (3) +14.7%
Other (93) (142) -
Total Group 4,105 3,956 -3.6% (78) -1.7%

(1) Operating cash flow = cash flow from continuing operations before tax and interest expense

12


Stable operating cash flow margin

2008 margin
2009 margin
adjusted (1)

Water 14.5% 14.6%
Environmental Services 13.4% 13.2%
Energy services 10.2% 10.5%
Transportation 5.0% 5.6%
Other - -

Total Group 11.5% 11.5%

(1) 2008 operating cash flow margins were adjusted, in order ensure the comparability of financial years: Refer to footnote (1) slide 9 for details

13


Efficiency Plan: Initial 2009 objectives exceeded,
€255m versus €180m

€m

Achieved in 2010 Total
2009 objectives 2009 & 2010

Water 87 80 - 90 170

Environmental Services 72 (1) 60 - 70 140*

Energy services 56 50 - 60 110

Transportation 40 40 - 50 80

Efficiency Plan €255m €230 - 270m ~€500m

Veolia Environmental
€126m
Services Adaptation Plan

(1) excluding Veolia Environmental Service’s 2009 Plan to Adapt to the Business Environment

14


Veolia Water: Revenue stable at €12,556m (+0.2% at
constant FX)
Quarterly revenue
€m
 Veolia Water Solutions & Technologies
reported a slight decline in revenue, down to
€2,470m (-1.8% at constant consolidation
scope & FX rates)
— Several large contracts outside France near
completion
— Less sustained business in industrial markets
 In France, revenue inched down 0.3%,
excluding consolidation scope effects
— 0.2% decrease in volumes of water distributed
— 2% slowdown in Works businesses
Absolute change in Works and Engineering
€m & Construction revenue
 Outside France(1) , 0.4% growth (0.2% at
constant consolidation scope & FX rates)
— Stability in Europe (at constant consolidation
scope & FX rates), as the satisfactory
performance of business in Central Europe
offset less activity in the United Kingdom
— Robust growth in Asia (up 12% at constant
consolidation scope & FX rates) due to the
extension of certain chinese contracts

Q1 09/Q108 Q2 09/Q2 08 Q3 09/Q3 08 Q4 09/Q4 08
(1) excluding VWST

15


Veolia Water: Operating cash flow at €1,837m versus
€1,821m

 Resilient operating cash flow, up 2.6% at constant FX rates to €1,837m

 Stable operating cash flow in France
— Lower volumes of water distributed and changes in the Works business
— Contractual developments offset by productivity gains and the positive indexing effect

 Marked decline in operating cash flow at Veolia Water Solutions & Technologies
— Impact of the slowdown in the Works business
— Decrease in industrial services margins

 Outside France(1) , operating cash flow grew
— Substantial increase in Asia-Pacific (mainly in China)
— Virtually stable in Europe due to the satisfactory contribution of Germany, despite volume declines and the
tough economic conditions

 Negative €24m impact related to the extinction of the “Vivendi Universal compensation”

 Efficiency Plan: €87m in 2009

 Operating income stable at constant FX rates at €1,164m

(1) excluding VWST

16


Veolia Environmental Services : 9.2% revenue decline
to €9,056m (-7.9% at constant FX rates)
Quarterly revenue (€m) 2008
Change in 2009/2008 revenue -9% 2009

 Decline in waste volumes -5%
— I&C non-hazardous waste: –8%
— Municipal: -2.3%
 Price and volumes of recycled materials - 4 %
— Average prices fell by 40% in 2009
 Rise in service prices +1%
 FX effects -1%

Stable revenue at constant consolidation
Breakdown of revenue by activity
scope and FX rates in Q4 09
2008 2009
Urban cleaning and collection

Non hazardous industrial waste collection and services

Hazardous industrial waste collection and services

Sorting and recycling

Hazardous waste treatment

Waste-to-energy from non hazardous waste

Landfilling of non hazardous and inert waste

17


Veolia Environmental Services : Breakdown of revenue by
geographic zone

% of 2009  at constant
revenue scope & FX rates

France 37% -9% Decline in waste
volumes and price of recycled materials

Germany 11% -11% Decline in waste
volumes and price of paper

United Kingdom 15% -4% Decline in industrial
waste volumes partially offset by price increases
Positive contribution from integrated
PFI contracts

North America 14% -9% Decline in waste
volumes partly offset by price increases
Decline in industrial services

Rest of the world 23% -7%

18


Veolia Environmental Services: Recovery in profitability
during 2009

 Decline in operating cash flow to €1,194m
(-8.8% at constant FX rates) Operating cash flow (€m)
and margin (%)
 Stabilization of operating cash flow margin at
13.2% vs. 13.4%

 Substantial profitability improvement
throughout the year
— Efficiency Plan: €72m in 2009
— 2009 Waste Adaptation Plan: €126m
— In Germany, profitability improved since Q2
— Positive impact of lower fuel prices

 4th quarter of 2009
— Sharp increase in operating cash flow: +19.7%
— Operating cash flow margin rate: 14.7%

 Operating income of €454m (including €99m from 2008 2009
non-recurring capital gains on divestments)
— includes a negative impact of (€56m) in 2009
compared to a positive contribution of €21m in
2008, resulting from the fall in discount rates on
landfill site rehabilitation provisions
19


Veolia Energy: Revenue declined 4.9% to €7,079m (-3%
at constant FX rates)

 Revenue declined 2.2% at constant
consolidation scope and FX rates
Quarterly revenue (€m)
 Negative FX effect of €139m (-1.9%) mainly
due to movement of Eastern European
currencies and the pound sterling

 Energy prices
— Negative impact of €140m
— Declined in France and North America
— Increased in Central Europe and Baltic
countries

 Slowdown in Works business and in services
for industrial customers

 Weather conditions had no significant France Outside France
impact

20


Veolia Energy: Operating cash flow

 Operating cash flow declined 2.5% to €740m but grew 0.8% at constant
FX rates

 Slowdown in the Works business and in services for European industrial
customers, notably in Southern Europe

 Negative effect of CO2 and energy prices in France

 Efficiency Plan: €56m

 Operating income of €416m

21


Veolia Transport: Revenue increased 1.3% to €5,860m
(+1.9% at constant FX rates)

 In France, business resiliance and 0.5% Quarterly revenue (€m)
growth 2008 2009
— Contracts won in mid-sized cities and the
updating of indexed prices offset the loss of
the Bordeaux contract (May 2009)

 Outside France, 1.7% growth
— Bolstered by North America and Germany
— Loss of the Melbourne (December 2009) and
Stockholm (November 2009) contracts had a
limited impact of (€34 m) in 2009
— Development of the JV with RATP (Hong Kong
tramway)

 Slowdown in airport operations

22


Veolia Transport: Operating cash flow

 Strong growth in operating cash flow (+14.7% at constant FX rates) to
€327m from €287m in 2008

 Efforts to renegotiate contracts and boost productivity led to a significant
improvement in operating cash flow in Germany, the Netherlands and
North America

 Efficiency Plan contributed €40m to the improvement in operating cash
flow in 2009

 Positive impact of the decline in fuel prices

 Slowdown affecting airport operations

 Operating income of €153m

23


Recurring operating income

€m  At  At
2008 FX
2009 current constant
adjusted (1) effect
FX rates FX rates

Water 1,196 1,164 -2.7% (31) -0.1%
Environmental Services 620 360 -42.0% (12) -40.1%
Energy services 430 416 -3.0% (17) +1.0%
Transportation 137 158 15.6% (1) +16.2%
Holding (108) (166)
Recurring operating income 2,275 1,932 -15.1% (61) -12.4%
of which change in fair value of 21 (56)
provisions for landfill rehabilitation


24


From operating income to net income

2008 adjusted (1) 2009

€m Recurring Non- Total Recurring Non- Total
recurring recurring

Operating income 2,275 (314) 1,961 1,932 88 2,020

Cost of net financial debt (2) (948) (948) (894) (894)
Corporate tax expense (420) -42 (462) (242) (242)

Equity in net income of affiliates 19 19 1 1
Net income from discontinued - 139 139 - (43) (43)
operations
Net income attributable to minority
(239) (65) (304) (259) 1 (258)
interests
Net income attributable to equity holders of parent 687 (282) 405 538 46 584

(2) Including “other financial income and expenses”, of which €83m in accretion expenses on provisions in 2009

25


Cost of borrowing

12/31/09
€m 2008 2009
12/31/08

Cost of net financial debt (909) (784) 125
Impact of change in average debt (13)
Impact of changes in interest rates 140

Other (2)
€m

Average net financial debt
€16,466m versus €16,142m in 2008

Cost of borrowing stood at
4.76% as compared with 5.61%
at December 31, 2008

31-mar-09 30-june-09 30-sept-09 31-dec-09

26


Taxes

Mainly related to 2008 elements
%
46% -3%
-4%
-13%

25% -6%(2)
+2% 22%

(3) (1) (1)

The normalized rate was 31%

(1) Actual tax rate: relationship between tax expense and net income from continuing operations, adjusted by the same tax expense and income from affiliates
(2) Mainly related to 2009 items
(3) 2007 reported figure

27


Net Investments: €1,585m
Stop to acquisitions
Optimization of current investments

€m 2008 2009

Maintenance capital expenditures 1,860 1,632
As % of consolidated revenue 5.2% 4.7%

Investments in growth/existing operations 1,033 861
(ex. operating financial assets)
Financial investments in growth incl. change in 1,280 338
consolidation scope
New operating financial assets 529 500
Gross investments 4,702 3,331 -€1.4bn
Industrial and financial divestments(1) (789) (1,291) >€1bn
Repayment of operating financial assets (358) (455)
Net investments 3,555 1,585 <€2bn
(1) Including the capital increase subscribed to by minority interests of €138m in 2009 and €27m (excluding the capital reduction in Berlin) in 2008 and including the net
financial debt of divested companies

28


Completed divestments

€m 2008 2009

Industrial divestments 330 259
Financial divestments and change in consolidation scope 432 894
Capital increase subscribed to by minority interests 27 138
Total divestments 789 1,291

More than €2bn in divestments completed in two years

29


Completed divestments

2009 financial divestments (1) €1,032m

 Divest mature assets €230m
— o/w Montenay International (USA) €220m (2)

Valuation multiple,
 Non-strategic assets €420m
ex capital increases
— o/w VPNM (France) €111m subscribed to by
— o/w Veolia Cargo (France) €94m minority interests:
— o/w Dalkia Facility Management (UK) €90m 11 x EBITDA 2008
— Other €125m

 Development partnerships €382m
— o/w EBRD (Veolia Voda, Central Europe) €70m
— o/w JV with Mubadala (Africa – Middle East) €189m

(1) Including changes in consolidation scope and capital increases subscribed to by minority interests
(2) Includes only divestments completed in 2009. The divestment of the operating contract for the Miami-Dade County Waste-to-Energy plant, announced on February 2, 2010
will be included in 2010 divestitures

30


Operating cash flow – net investments (1)

€m 2008 2009

Operating cash flow (2) + repayment of operating
4,514 4,397
financial assets
Gross investments (4,702) (3,331)
Divestments 789 1,291
Operating cash flow (2) – net investments (1) 601 2,357

Reminder of 2009 objective 2,000

(1) Net investments = gross investments– (divestments + repayment of operating financial assets + capital increases subscribed to by minority interests)
(2) Operating cash flow including cash flow of discontinued operations

31


Cash flow statement

€m 2008 2009

Cash flow from operations (1) 4,178 3,939
Repayment of operating financial assets 358 455
Total cash generation 4,536 4,394
Gross Investments (4,702) (3,331)
Change in WCR (81) 432
Tax paid (348) (408)
Interest expenses paid (849) (802)
Dividend (2) (754) (434)
Other (3) (400) 202
Free cash flow (1,809) 1,344

(1) Of which financial cash flow and cash flow from discontinued operations (-€14 m in 2009 and €50 m in 2008)
(2) Dividend paid to shareholders and minority shareholders
(3) Includes in particular changes in receivables and other financial assets totalling (€312 m) in 2008 and €163 m in 2009

32


Changes in net financial debt

€m 2008 2009

Net financial debt at January 1st 15,125 16,528
Free cash flow before divestments and dividends (1,713) 487
Dividends paid (754) (434)
Free cash flow before divestments (2,467) 53
€1,291m
Capital increase reserved for minority shareholders (104) (1) 138
Free cash flow (1,809) 1,344
FX effects and other 406 57
Net financial debt at December 31st 16,528 15,127
Change in debt 1,403 (1,401)

(1) Of which the capital reduction associated with the Berlin contract in the Water division is €131m

33


Debt ratio

€bn
x
3.6x Net financial debt/(Cash
3.4x 3.4x(1) flow from operations +
3.3x Repayment of operating
3.6x financial assets)
As of 01/01/10,
application of IAS 7(2)
(related to renewal
charges), changes the
targeted range of the
Group ratio from
3.5x – 4x to 3.85x
– 4.35x

Net financial debt

 Average maturity of net debt: 10 years versus 9.3 years at December 31, 2008
 Ratings
— Moody’s: P-2/ A3 negative outlook (confirmed on March 26, 2009)
— Standard & Poor’s: A-2 / BBB+ negative outlook (confirmed on January 4, 2010)

(1) The 2009 ratio adjusted for IAS 7 changes from 3.44 x to 3.75x
(2) Refer to appendix 5

34


Veolia-Transdev

 Partnership project with Transdev
— A new combined entity with:
 Revenue ~ €8bn
 Operating cash flow ~ €500m
 Net debt ~ €1.8bn
— A 50-50 partnership before the IPO, with Veolia Environnement as the
industrial operator
— Negotiation and process on going
 Finalisation of conditions for RATP exit
 Consultation of the numerous employee representative bodies
 Approval by competition authorities
 IPO of a world leader in passenger transportation
— Evolution of the business toward increased complexity and sophistication
— In a strongly developing market
— Dedicated means to fuel growth
— Full valuation of Transportation assets

36


Collaboration with EDF

 A partnership since 2000 through Dalkia

 New and important challenges in….
— energy savings,
— CO2 emissions,
… now involving all of Veolia Environnement’s businesses

 New offers and services on the drawing board:
— Local energy production through CHP and biomass
— Electric motorization and mobility management
— Combined electricity production and seawater desalination
— Smart meters and value-added services
— Sustainable development offerings for residential buildings

An industrial partnership to enlarge

37


Review of last few years: Operating cash flow

Operating cash flow
€m
FX - €186m
(2)
Scope + €185m

Business cycle - €472m

Net productivity &
other + €265m

Δ 2009 / 2007 - €208m

(1) (1)

(1) Estimated
(2) 2007 figures have not been adjusted for 2009 discontinued operations

38


Review of last few years: ROCE

After-tax ROCE

(1)
FX - 0.5%

Business env. - 1.8%

Recent acquisitions - 1.1%

Slow-return assets - 1.2%

Net productivity & + 1.3%
other
Δ 2009 / 2007 - 3.3%

French GAAP
(1) 2007 figures have not been adjusted for 2009 discontinued operations

39


Veolia Environnement's strengths

 Structurally growing markets

 Significant competitive advantages

 A decentralized and responsive Group

 A broad asset base of about €25bn

RESTORE PROFITABILITY, so as to position the Group for
PROFITABLE ORGANIC GROWTH
WITHOUT INCREASING DEBT

40


Drive to restore profitability (1)

 Continue to reduce our cost base

 Turn around recent acquisitions in Waste

 Optimize our asset portfolio

41



Reduce our cost base

 Make cost reduction an ongoing pursuit

€250m every year

 Managed by the recently created Operations Department
— Rationalization of corporate resources
— Reduction of head office expenses
— Optimization of maintenance costs
— Focus innovation programs on continuing improvement of operational processes

42



Turn around recent Waste acquisitions

 Germany
— Reduce structure and number of employees (from 6 to 4 regions, decline of 600
FTE)
— Renegotiation of waste collection and removal prices
— Reduce exposure to recycled paper prices
— Renegotiation and/or exit of unprofitable contracts
— Improvement in Dual System business profitability and exit from DS licensing
activity
— Unification of management systems
— Capex and working capital reduction
 Italy
— Resume normalized operation of waste-to-energy facilities after a long shutdown
of several units which had to be brought in line with regulatory requirements
— Pursue contractual negotiation with our clients

43



Optimize our asset portfolio

 Pursue selective asset optimization:

An average of €1bn of assets divested every year

 By capturing value of mature assets

 By divesting non-core assets on the basis of following criteria:
— Business
— Geographic
— Financial

 By sharing with partners the ramping up of slow-return assets

44


Internal and profitable growth (1)

 Organic:
— Very few acquisitions

 With significant added value:
— Mobilisation of our unique capabilities:
 Technologies
 Established track record
 Management teams
 Capacity to manage risks
— Complex and global challenges
— Duration
— Significant contracts that have a strong base for development

45


Internal and profitable growth (2)

 Priority areas targeted:
— Urban density
— Stringent and enforced regulations
— Legal stability
— Financially sound clients

A focus on four regions
European Union
(Domestic market)

North America Northern Asia Middle East

 Rapidly profitable :
— IRR > WACC +3% for each project
— ROCE > WACC at the end of year 3
Each year, on average on the
— Payback < 7 years portfolio of new contracts
— Revenue / capital employed > 1.5 10% for the total group

46


Return + profitable growth: 3-5 years outlook

ROCE after tax
10%
10%

9%

8% 7.6%

6%

4%
2009 Recent Slow Productivity, Normalized 3-5 years 3-5 years
Acquisitions return Asset tax
assets optimization, Business
profitable growth environment

47


Return + profitable growth: 3-5 years outlook

Recurring Operating Income
€m

CAGR 3-5 years

6-8 % Normal business environment

Reduction of the cost base
4-5 %
Turn around recent acquisitions
1 932
Ramp up « slow-return assets »
Asset optimisation and profitable growth

2009 3-5 years

48


2010 objectives

Assumption: Economic stability in 2010 in comparison with H2 2009

Priority focus on cash flow generation maintained
Recurring operating income improvement

— Positive free cash flow after dividend payment(1)

— €3bn of divestments over 2009 – 2010 – 2011

— €250m in cost cutting

— Maintain ratio objective: net debt / (cash flow from operations
+ repayment of Operating Financial Assets)

(1) Excluding Veolia Transport/Transdev merger project

49


One ambition for Veolia Environnement (1)

- Today : economic crisis

- Tomorrow : density How to reconcile human development and
environmental quality?
scarcity
diversity

Veolia is at the core of the world’s major challenges and their solutions

The worldwide sustainable development reference

51


One ambition for Veolia Environnement (2)

 The reference exemplary model of performance

— Financial and economic performance

But also

— Innovation performance: keep one step ahead

— Social performance: employees satisfaction, employability, solidarity

— Societal performance : contribute to the common good

An exemplary company,
balanced and responsible in all its dimensions

52

Restore balance between growth and returns


Table of Contents of Appendices

 Currency movements Appendix 1
 Impact of FX rates on 2009 operating cash flow Appendix 2
 Veolia Water’s consolidated revenue Appendix 3
 Gross investments by division Appendix 4
 Renewal expenses in concession contracts (IAS 7) Appendix 5
 Main contracts renewed or won in 2009 Appendix 6
 Overview of operating financial assets Appendix 7
 Recurring operating income margin Appendix 8
 Debt management: main characteristics Appendix 9
 VE SA bond redemption schedule Appendix 10
 Net liquidity Appendix 11
 Definition of ROCE Appendix 12
 Pre-tax ROCE by division Appendix 13
 Composition of Board of Directors and of the Executive Committee Appendix 14
 Trends in prices of recycled materials Appendix 15
 Evolution of combined industrial production (France, Germany, UK, USA) Appendix 16
weighted by Veolia Waste revenue contribution

54


Appendix 1: Currency movements

Main currencies
2008 2009  2009 / 2008
(1 unit of foreign currency = €…)
U.S. dollar
Average rate 0.6782 0.7177 +5.9%
Closing rate 0.7185 0.6942 -3.4%

Pound sterling
Average rate 1.2433 1.1222 -9.7%
Closing rate 1.0499 1.1260 +7.2%

Korean won
Average rate 0.0006 0.0006 -6.0%
Closing rate 0.0005 0.0006 +20.0%

Australian dollar
Average rate 0, 5691 0.5634 -1.0%
Closing rate 0, 4932 0.6246 +26.6%

Czech koruna
Average rate 0.0399 0.0378 -5.3%
Closing rate 0.0372 0.0378 1.5%
The average rate applies to the income statement and cash flow
The closing rate applies to the balance sheet

55


Appendix 2: Impact of FX rates on 2009 operating cash
flow

2007 (1) 2008 (1) 2009

Currency Local currency 2009 €/X Impact on
2009/
(in millions) exchange 2009
2008
rate operating
2009/ chge.
2008 cash flow
chge. (m)
U.S. dollar zone (USD) 416 496 475 1.393 +19
-4% +5.5%

Pound sterling zone (GBP) 353 401 370 0.891 (44)
-8% -10.8%

Czech koruna zone (CZK) 6.315 6.193 6.551 26.457 (13)
+6% -5.5%

Korean won zone (KRW) 76.295 93.653 88.810 1.772.649 (4)
-5% -8.5%

Polish zloty zone (PLN) 287 331 387 4.33001 (20)
+17% -6%

(1) Fiscal years 2007 and 2008 were not adjusted for assets held for sale

56


Appendix 3: Veolia Water’s consolidated revenue

€m
+0.0%

12,558 12,556 Total Veolia Water
 Year-on-year change +0.0%
— Internal growth -0.4%
— External growth +0.6%
— FX effect -0.2%
+2.3%
Operations

-3.7% Works and E&C

57


Appendix 4: Gross investments by division

Growth

€m Financial
New operating
incl. Δ in Industrial
Maintenance financial Total
consolidation capex
assets
scope
Water 498 160 329 265 1,252
Environmental Services 485 6 128 74 693
Energy services 233 84 296 99 712
Transportation 377 62 68 26 533
Other 39 26 40 36 141
2009 total 1,632 332 861 500 3,331
2008 total 1,860 1,280 1,033 529 4,702

58


Appendix 5: Accounting treatment of renewal expenditures according to the new
amendment specifying the implementation conditions of IAS7

 Veolia Environnement is generally subject to the obligation of maintaining and repairing
assets of facilities it manages under public service contracts. In accounting terms, this
obligation is reflected by renewal expenses (for assets covered by public-private
partnership service contracts in France).

 In application of the new amendment specifying the implementation conditions of IAS7
Statement of Cash Flow, renewal expenditures are booked as operating expenses as of
January 1, 2010, whereas they were previously treated as maintenance expenditures.

 As a consequence, during reconciliation, in the cash flow statement, between “Net
income attrib. to equity holders of parent” and “Net cash flow from operating
activities”, renewal expenses will no longer be eliminated, as of January 1, 2010, in the
“Depreciations, provisions and operating value impairments” item.

 The deduction of renewal expenditures from the operating cash flow and maintenance
costs, has no impact on the cash position, net income, or shareholders’ equity.

59


Appendix 5: Accounting treatment of renewal expenditures according to the new
amendment specifying the implementation conditions of IAS7

2008 Renewal 2008 adjusted (1) and
adjusted (1) expenditures adjusted for IAS 7
€m
Revenue 35,765 35,765

Operating cash flow 4,105 - 390 3,715


Maintenance capex 1,860 - 390 1,470

Operating cash flow(2) - net investments 601 601

2009 Renewal 2009 adjusted for
€m published expenditures IAS 7

Revenue 34,551 34,551

Operating cash flow 3,956 - 361 3,595


Maintenance capex 1,632 - 361 1,271

Operating cash flow(2) - net investments 2,357 2,357

(2) Including the operating cash flow from discontinued operations

60

Appendice 6: Main contracts won or renewed in 2009

INTERNAL GROWTH
- Renewals: Roubaix
 223 main contracts renewed in France en 2009 in Water (o/w 126 in drinking water & Lens Valenciennes
97 in wastewater), 134 in Waste (o/w 85 from local authorities & 49 from companies),
17 in Transportation & 86% of contracts due to expire in 2009 renewed in Energy
 La Roche-sur-Yon (water) – Length: 12 years – Cumul. rev.: €66m
 Reg. Public Authority of Vallée de Chevreuse (waste) – Length: 8 years – Cumul. rev.: €72m
 Limoges Métropole, the city urban authority (waste) – Length: 6 years – Cumul. rev.: €37m Mont Saint Michel
 Roubaix (energy) – Length: 24 years – Cumul.rev.:€196m Moselle
Chartres Vallée de Strasbourg
 Poitiers (energy) – Length: 15 years – Cumul.rev.: €72m
Métropole Chevreuse
 Moselle Departmental Council (transportation) – Length: 10 years – Cumul. rev.: €177m Orléans
 Gard Departmental Council (transportation) – Length: 10 years – Cumul. rev.: €160m Rennes
DCNS Indre et Loire
 Var Departmental Council (transportation) – Length: 8 years – Cumul. rev.: €83m
- Outsourcing / Privatization:
Nevers
Angers
 Valenciennes (transportation) – Length: 8 years – Cumul. rev.: €405m Tours
 Joint Authority with responsability for the Bay of Mont Saint Michel (transportation)
– Length: 13 years (o/w 3 for construction) – Cumul. rev.: €91m La Roche-sur-Yon Poitiers Le Creusot
 Nice (self-service cycles) (transportation) – Length: 15 years – Cumul.rev: €45m Limoges
 Touraine interurban network « Green line » for Indre & Loire District (transportation)
– Length: 7 years – Cumul.rev: €45m Royan
 Le Creusot, Montceau-les-Mines (transportation) – Length: 6 years – Cumul.rev.: €26m
Embrunais
 Mende in Lozère (heating network from local biomass) (energy)
– Operating length: 24 years – Cumul.rev.: €41m in partnership with Engelvin TP réseaux Mende Alès
Roquebrune
 Alès (heating network) (energy) – Length: 20 years – Cumul.rev.: €30m Cap Martin
 Reg. Public Authority of Nevers (construction & operation of waste drop off center for Gard
professionnals) (waste) – Operating length: 20 years – Cumul.rev.: €18m Nice
 Reg. Public Authority of Embrunais (water) – Length: 30 years – Cumul.rev.: €62m
 Roquebrune Cap Martin (water) – Operating length: 20 years – Cumul.rev.: €50m
Var
 Royan (1) (water) – Length: 12 years – Cumul.rev.: €17m
- Engineering / Design & Build:
 Chartres Métropole, the Chartres urban authority (construction & operation of the
new wastewater treatment plant, environmentaly friendly) (water)  Renewals 1) Announced in January 2010
- Operating length: 20 years – Cumul.rev.: €156m (incl.€54m for construction)
 Outsourcing / Privatization
 Biomasse 3 (1) (construction & operation of 7 new biomass cogeneration plants
– Rennes, Strasbourg, Orléans, Tours, Angers, Lens & Limoges) (energy)  Engineering / Design & Build
 Partnership with other company
PARTNERSHIP
 Partnership with DCNS (multiservices), through creation of a JV
Défense Environnement Services (51/49) – Estimated yearly rev. by 5 to 10 years: €150m
61


INTERNAL GROWTH
- Renewal:
 Stadtwerke Görlitz (energy activity) (water)
– Length: 20 & 7 years – Cumul.rev.: €310m
- Outsourcing / Privatization:
 Water regional Authority of Burg (Saxony-Anhalt) (water)
- Length: 15 years – Cumul.rev.: €20m
 Madrid area - « South plant » (water) Sweden
– Length: 4 years (2 years option) – Cumul.rev.: €16m Finland
 Merseyside Waste Disposal Authority (MWDA) (waste)
– Length: 20 years – Cumul.rev.: €720m Göteborg
 Göteborg (1) (transportation) Boräs Helsinki
– Length: 8 years – Cumul.rev.: €240m Merseyside
Landskrona Trelleborg
 Helsinki (1) (transportation) United Kingdom
– Length: 4 years – Cumul.rev.: €80m Skäne
Grudziadz
 Boräs (transportation)
Poland
– Length: 8 years (2 years option) – Cumul.rev.: €68m
 Skäne / Trelleborg (transportation) Hamburg
– Length: 8 years – Cumul.rev.: €49m Burg
 Landskrona (bus regional network) (transportation) Slovakia
Görlitz
– Length: 8 years – Cumul.rev. : €45m Germany Trnava
 Grudziadz (transportation on demand) (transportation)
– Length: 10 years – Cumul.rev.: €15m Hungary
 Hamburg (energy) – Length: 25 years – Cumul.rev.: €83m
Barcelona
 Trnava area (energy) Madrid
Békéscsaba
- Length: 10 years – Cumul.rev.: €55m Spain
 Barcelona (construction & operation of a new heating &
cooling network) (energy)  Renewal
– Operating length: 30 years – Cumul.rev.: €492m  Outsourcing / Privatization
 Engineering / Design & Build
 Békéscsaba (works on networks) (water) – Cumul.rev.: €36m
(1) Contract whose Veolia is « preferred bidder »,
signature under way
62


INTERNAL GROWTH

- Renewals:

 Boston (1) (transportation) – Length: 2 years – Cumul.rev.: €428m
United States Wilmette
 Tempe (transportation) - Length: 4 years – Cumul.rev.: €93m
Boston
 Denver (2) (transportation) - Length: 3 years – Cumul.rev.: €43m Mapleton

 Wilmette (waste) – Length: 88 months – Cumul.rev.: €9m Denver
Tempe
Seminole
- Outsourcing / Privatization: New Orleans Lithia

 Seminole County (waste) – Length: 8 years – Cumul.rev.: €16m
 New Orleans (overall public transportation system)
(transportation)
– Operating length: 5 years (5 years option)
– Cumul. rev.: €202m
 Mapleton (water) – Length: 15 years – Cumul.rev.: $29m Brazil
Petrobras

 Petrobras (construction of a new water & reuse treatment plant)
(water) – Cumul.rev.: €123m
 Lithia (design & build) (water) – Cumul.rev.: $40m

 Renewals
 Engineering / Design & Build
(1) Announced in January 2010
(2) Contract whose Veolia is « preferred bidder », signature under way

63


INTERNAL GROWTH
- Renewals:
 Rockingham – Manudrah (1) (transportation)
– Length: 10 years – Cumul.rev.: €150m
 Perth (transportation)
- Length: 7 years – Cumul.rev.: €17m
China
 Hong Kong (hazardous waste treatment) (waste)
 Saitama & Hiroshima (water) RATP Développement
Japan
- Length: 3 years – Global cumul.rev.: €21m

- Outsourcing / Privatization: Saitama
Hong Kong
Chiba
 Chiba (water) - Length: 3 years – Cumul.rev.: €35m
Hiroshima
 National Environmental Agency in Singapore (waste)
– Length: 6 years – Cumul.rev.: €10m Singapore

 Sydney (networks maintenance) in consortium with Bovis (water)
- Length: 4 years (3 years option)
- Cumul.rev.: €28m (€51m with option)

EXTERNAL GROWTH
Australia
 Hong Kong tramway network (transportation)
with the partnership of RATP Développement
Perth
Rockingham
PARTNERSHIP
Sydney
 Partnership with RATP Développement company (transportation)
through the creation of a JV (50/50) in Asia  Renewals
(1) Contract whose Veolia is « preferred bidder », signature under way  Engineering / Design & Build
 Company acquisition
64


INTERNAL GROWTH Rabat
Nador

- Outsourcing / Privatization: Morocco
 Bus network for Grand Rabat area (commercial activity)
(transportation)
– Length: 15 years (7 years option) – Cumul.rev.: €1.1bn
 Nador district (waste)
 Doha – Ashghal (water)
– Length: 7 years (3 years option)
– Cumul.rev.: €44m (€61m with option) Qatar
Sipchem
- Industry & services: Doha

 Saudi International Petrochemical (Sipchem)
(operating contract) (water)
Saudi Arabia

 Industry & services

65


Appendix 7: Overview of operating financial assets

€m 12/31/2008 12/31/2009

Balance sheet: current and non-current operating financial assets are 5,751 5,652
recorded at amortized costs on the balance sheet with a corresponding
liability booked in Veolia’s consolidated net financial debt
Income statement: interest payments are a sub-line to the revenue 398 394
from ordinary activities “o/w revenue from operating financial assets”
and are included in operating cash flow before changes in working
capital
Cash flow statement (inflows): Principal repayments associated with 358 455
operating financial assets are not recognized in the income statement,
but recorded within ”cash flow from investing activities” on the cash
flow statement

Cash flow statement (outflows): “New operating financial assets” 507 483
which are the current year’s investments in operating financial assets
are also recorded within ”cash flow from investing activities” on the
cash flow statement

66
66


Appendix 7: Operating Financial Assets. In the case of long-term contracts,
Veolia Environnement may finance certain infrastructures for its clients

 Industrial outsourcing contracts (IFRIC4)
€bn Counterparty
and concession contracts comprising a
public services obligation/BOT Water-Berlin 2.7 Land of Berlin
(IFRIC12), with the transfer of volume
and price risks to the client CHP France 0.5 EDF

 Assets treated as financial receivables: Waste UK 0.3 Municipalities
Operating Financial Assets Water Belgium 0.2 City of Brussels
 The most significant give rise to
Other 2.0
dedicated external funding
Total 5.7

Average return at market conditions
(2009 average rate): 6.9%

Repayment of principal: €455m in 2009

67

2009 Annual results

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2009 Annual results