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Veolia Environnement
Investor Relations – 2007 Annual Accounts – March 2008
2007 ANNUAL ACCOUNTS
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 forwardlooking 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
2007: another year of profitable growth, in line with
objectives
Â Sustained business momentum: revenue up 14.9% (1)
Â Strong internal growth (+7.8%)
Â Strategy of targeted external growth (+ 7.1%)
Â Further improvement in recurring operating income (+11.9% (1))
Â Strong rise in net income (+22.3%) and net earnings per share (+13.7% (2) )
Â Capital position reinforced by a €2.6 billion capital increase in July 2007
[net financial debt/(cash flow from operations + repayment of operating financial
assets)] = 3.3x
Â Free cash flow before new projects (€906 million in 2007)
Â After-tax ROCE: 10.9%
Â Increase of 15.2% in the dividend from €1.05 per share to €1.21 per share (3)
To be paid on May 27, 2008
(1)
(2)
(3)
At constant exchange rates
Non-diluted from options but diluted from the increase in capital completed on July 10, 2007
Subject to approval by the Annual Shareholders’ Meeting on May 7, 2008
3
2007 Key Figures(€m)
35 000
30 000
25 000
22,792
25,570
28,620
4,219
32,628
3,844
4000
3,542
20 000
3500
3,336
15 000
3000
10 000
5 000
2500
0
2004 (1)
2005 (1)
2006
Consolidated revenue
2 000
+14.9% (2)
2,469
2 500
2004 (1)
2007
2,222
1,904
600
1 000
400
500
200
2005 (1)
2006
Recurring operating income
(2)
+9.8%
762
630
477
0
2004 (1)
(1)
2007
933
1 000
1 500
0
2006
Cash flow from operations
800
1,629
2005 (1)
2007
+11.9% (2)
2004 (1)
2005 (1)
2006
Recurring net income
2007
+22.5%
Accounts at December 31, 2005 & at December 31, 2004 were restated, to ensure comparability between accounting periods in the application
of the IFRIC12 interpretation relating to the accounting treatment of concessions and the results booked in 2006 under the IFRS5 standard and
shown in the income statement in the “Net income from discontinued operations” line.
4
Key figures at December 31, 2007
(€m)
12/31/06
12/31/07
Growth
28,620
32,628
+14.0%
3,844
4,219
+9.8%
Operating income
2,133
2,497
+17.1%
Net income
759
928
+22.3%
Net income per share (€) (1)
1.90
2.16
+13.7%
14,675
15,125
-
Net financial debt
(1)
Non-diluted from options but diluted from the increase in capital completed on July 10, 2007
5
Further increase in the dividend
2007 dividend (1)
€1.21 per share (+15.2%)
€1.21(1)
€1.05
€0.85
€0.68
€0.55
€0.55
€0.55
2001
2002
2003
2004
2005
2006
2007
2007 pay-out ratio = 59.5%
(1)
Subject to approval by the Annual Shareholders Meeting on May 7, 2008
(2)
After taking into account the dividend payment relative to the 2007 accounts.
6
Balanced contribution to growth from all 4 divisions
By division
Transportation
17%
By geographic zone
Water 34%
Asia-Pacific
7%
Rest of the world
5%
North
America
8%
Energy
Services
21%
Waste 28%
Europe
ex France
36%
Consolidated revenue at December 31, 2007:
France
44%
€32,628m
7
Balanced contribution to growth from all 4 divisions
(€m)
10,928
10,088
Chg. at constant Internal growth
exchange rates
Water
+9.0%
+7.9%
Waste
+25.5%
+7.5%
Energy Services
+12.5%
+7.9%
Transportation
+14.0%
+8.1%
VE Group
+14.9%
+7.8%
€32,628m
9,214
7,463
6,118
6,896
4,951
5,590
12/31/2006
12/31/2007
8
Significant presence in growth markets
(€m)
Chg. at constant
exchange rates
14,256
13,403
France
Europe ex France
North America
11,682
9,498
1,702
+22.6%
+7.6%
Asia-Pacific
+34.8%
Rest of the world
+38.5%
VE Group
2,817
+6.4%
+14.9%
2,790
2,269
1,200
1,631
12/31/2006
12/31/2007
€32,628m
9
Solid growth in cash flow from operations (1)
(€m)
12/31/06
12/31/07
Δ current FX
rates
CFO margin
(1) 12/31/07
Water (2)
1,814
1,851
+2.1%
16.9%
Waste (2)
1,190
1,461
+22.8%
15.9%
Energy Services (2)
611
657
+7.4%
9.5%
Transportation (2)
290
279
-3.8%
5.0%
Other
(53)
(27)
-
-
3,852
4,221
+9.6%
(8)
(2)
-
-
3,844
4,219
+9.8%
12.9%
Total from continuing operations
Discontinued operations
Total Group
(1)
(2)
-
Cash flow from operations as defined by the Conseil National de Comptabilité’s (CNC) recommendation dated
October 27, 2004
10
Double-digit growth in recurring operating income: up
11.9% (1)
(€m)
Recurring operating
income margin
12/31/06
12/31/07
Δ constant
FX rates
12/31/06
12/31/07
Water
1,163
1,266
+9.3%
11.5%
11.6%
Waste
648
803
+26.4%
8.7%
8.7%
Energy Services
378
388
+1.8%
6.2%
5.6%
Transportation
100
115
+13.9%
2.0%
2.1%
Holding
(67)
(103)
-
-
-
2,222
2,469
+11.9%
7.8%
7.6%
Total Group
(1)
At constant exchange rates. +11.1% at current change exchange rates
11
Operating income up 17.9% (1)
(€m)
Operating
Operating income
income margin
Δ current FX
rates
12/31/06
12/31/07
Water
1,160
1,268
+9.2%
11.6%
Waste
648
803
+23.9%
8.7%
Energy Services
378
399
+5.6%
5.8%
14
130
+858.1%
2.3%
(67)
(103)
-
-
2,133
2,497
+17.1%
7.7%
Transportation
Holding
Total Group
(1)
12/31/07
12
Overview of year-over-year growth at half-year periods
En M€
H2 2007
2007
15,462
17,166
32,628
+10.9%
+16.9%
+14.0%
2,009
2,210
4,219
+5.2%
+14.2%
+9.8%
1,236
1,233
2,469
+9.5%
+12.8%
+11.1%
H1 2007
13
Reconciliation of recurring operating income to operating
income
(€m)
12/31/06
12/31/07
Δ current FX
rates
2,222
2,469
+11.1%
(86)
-
-
+15
(3)
+13
2,133
2,497
Non-recurring items
Provisions & write-downs
booked in transportation in
Germany
Transportation
Other (incl. Energy Poland in 2007)
Operating income
+17.1%
14
Water: Recurring operating income: €1,266m, +8.8%
Operating income: €1,268m
+9.2%
1350
1,268
1250
(€m)
1,160
1150
1050
1,002
950
850
750
650
31/12/2005
31/12/2006
31/12/2007
Operating income
Â Satisfactory contribution of operations in France: decline in volumes due to the climate conditions during
summer offset by the good level of contribution from the works business, new services, and improved productivity
Â In Europe,

Very good operating performance in the Czech Republic and Romania

Positive outcome of a litigation in Berlin

Equity interest of the EBRD in Veolia Voda
Â Good improvement in results in North America: expansion of the Tampa Bay contract
Â In Asia, continued growth: In China, expansion of the Shenzhen contract and full-year
effect of Kunming, Sinopec, Urumqi and Changzhou contracts)
Â In the Africa-Middle East region, strong results overall despite circumstantial difficulties in Gabon
Â Technological Solutions: further growth in operating income
15
Waste: Recurring operating income: €803m, +23.9%
Operating income: €803m
+23.9%
800
803
(€m)
700
648
600
544
500
31/12/2005
31/12/2006
31/12/2007
Operating income
Â In France, very good performance (development of higher value added services, increase in
volumes treated in urban and industrial waste) and double-digit growth in operating income in
hazardous waste
Â In Europe (ex-France), very strong improvement in contribution to operating income (+55% increase
in operating income),

United Kingdom (+60%) thanks to internal growth and the full-year contribution from the acquisition of
Cleanaway

Germany, integration of Veolia Umwelt Services (formerly Sulo) in the 2nd half

Good contribution of operations in Scandinavia and Central Europe
Â In North America, double-digit growth in operating income (very favorable impact due to the
contributions from hazardous waste and industrial services )
Â In Asia-Pacific, robust performance particularly in Australia
16
Energy: Recurring operating income: €388m, up 2.8%
Operating income: €399m
+5.6%
399
(€m)
400
378
315
300
200
31/12/2005
31/12/2006
31/12/2007
Operating income
Â Impact of mild weather
Â Smaller contribution of sales of excess CO2 quotas
Â France:
Growth in contribution of specialized subsidiaries
Â Outside France: double digit growth in business and operating income
Very strong increase in the contribution of the Central European zone (Czech Republic,
Poland)
Continued good level of business activity in the Southern European zone
17
Transportation: Recurring operating income: €115m, up 15%
Operating income: €130m vs. €14m at December 31, 2006
(€m)
117
+858%
130
100
14
0
31/12/2005
31/12/2006
31/12/2007
Operating income
Â In France, satisfactory increase in business and results, effect of the full-year
consolidation of SNCM
Â In Europe:
Favorable progression in Marschbahn and upturn in the contribution from Germany
Impact of the start-up of new contracts in the Netherlands
Â In North America, improved contribution from transit and increased results in
transportation on demand
Â In Australia, further growth in business and results
18
€3,973m allocated to new projects & acquisitions
(€m)
Â Good control of maintenance capital spending
(4.9% of revenue)
1,590
Â Further growth in existing operations
1,335
Â Increase in new projects and acquisitions
3,973
Â Total capital expenditures
6,898
Asset disposals
¾ Minority interest impacts linked to new acquisitions
(366)
(49)
Repayment of operating financial assets
(395)
Â Net capital expenditures and investments
6,088
19
€3,973m allocated to new projects & acquisitions
Growth
(€m)
Financial
incl.
Industrial
Maintenance change in
consolidation
capex
scope
New
projects
Operating
financial
assets
Total
Water
531
58
335
939
207
2,070
Waste
554
84
128
1,974
18
2,758
Energy Services
263
81
131
819
73
1,367
Transportation
226
35
97
223
36
617
16
26
26
18
-
86
1,590
284
717
3,973 (1)
334
6,898
1,411
270
740
1,424
361
4,206
Other
Total at 12/31/07
Total at 12/31/06
(1) Of which €954m linked to internal growth and €3,019m related to acquisitions.
20
4 significant acquisitions made in 2007
Â Germany
Veolia Umwelt Services (formerly Sulo), the n°2 waste treatment company
¾ Consolidation date: July 2, 2007 – Contribution to Veolia’s 2007 revenue : €628m
¾ Enterprise value: €1,310m (estimated amount after the disposal of Sulo Technology (a container
manufacturer) to Plastic Omnium)
¾ Disposal on July 29, 2007 of Sulo Environmental Technology to Plastic Omnium (revenue of around
€200m)
Â Italy
VSA Tecnitalia (Veolia Servizi Ambientali Tecnitalia) (formerly TMT), the largest private
operator in the Italian thermal waste treatment market (estimated revenue in 2011: €200m)
¾ Consolidation date: October 3, 2007 – Contribution to Veolia’s 2007 revenue : €26m
¾ Enterprise value: €338m
Â North America
TNAI, the largest portfolio of district heating and cooling networks in the United States
¾ Consolidation date: December 31, 2007 – No contribution to Veolia’s 2007 revenue
¾ Entreprise value: $788m
Â United Kingdom
Several unregulated businesses of Veolia Water Outsourcing Ltd (former Thames Water)
¾ Consolidation date: November 28th, 2007 – Contribution to Veolia’s 2007 revenue: €15m
¾ Enterprise value: €233m
21
More than €3.9bn allocated to new projects or acquisitions
By division
Transportation
6% (4)
By geographic zone
Water
24% (1)
Asia-Pacific
14%
Rest of the World
2%
Energy
Services
20% (3)
Europe
Waste
50% (2)
North America
63%
21%
(1) Including Lanzhou, Haikou, Tianjin Shibei (China), Oman Sûr (Sultanate of Oman), Hynix (South Korea), non-regulated water businesses at Thames
Water (U-K)
(2) Including integrated contracts (United Kingdom), certain assets of Allied Waste Industries, Marisol (United States), Cleanaway Asia (China),
TMT (Italy) and Sulo (Germany)
(3) Including Pannon Power & Sinesco (Hungary), Kolin (Czech Rep.), Varna (Bulgaria), Harbin & Jiamusi (China), TNAI (North America),
22
(4) Including People Travel Group (Sweden), SNCM ship (France)
From revenue to net income
(€m)
Δ12/31/07
12/31/06
12/31/06
12/31/07
28,620
32,628
2,133
2,497
(701)
(34)
(410)
+6
(817)
+1
(420)
+17
994
1,278
(236)
(327)
Net income from continuing operations
758
951
Net income
759
928
+22.3%
762
933
+22.5%
Revenue
Operating income

Cost of net financial debt
Other financial income (expenses)
Tax
Equity in net income of affiliates
Net income from continuing operations
Net income attributable to minority interests
+14.0%
+28.5%
23
Change in cost of borrowing
In €m
12/31/06
Cost of net financial debt
Δ12/31/07
12/31/06
12/31/07
(701)
(817)
(116)
Impact from the variation in the
average debt
-
-
(35)
Impact from the variation in interest rates
-
-
(59)
Impact from the revaluation of
non-hedging derivative instruments
(22)
Cost of borrowing: 5.49% vs. 5.07% in 2006
24
From recurring net income to net income
(€m)
2007
933
Â Non-recurring operating income impact
+28
Â Disposal of discontinued operations (Transport in Denmark…)
(23)
Â Non-recurring tax
+11
Â Other (including minority interests on items above)
(21)
Net income
928
25
Change in net financial debt (NFD) at December 31, 2007
New
projects
3,973
(€m)
Dividends
paid
(2,852)
Investments
excl. new
projects
14,675
(3,635)
14,675
(157)
Disposals
2,925
Interest
paid
786
(221)
564
VE S.A.
capital
increases(2)
Capital
increase
excl. VE
& other
(329)
Currency
effect
& other
15,125
14 889
(366)
Cash flow
generated (395) (1)
by the Repayment of
operations operating
financial assets
NFD at Dec. 31, 2006
NFD at Dec. 31, 2007
Free cash flow before new projects = €906m
(1)
(2)
Including the recovery by the municipality of the Orvade financing contract for €34m
Including the €2.6 billion capital increase completed on July 10, 2007.
26
Debt ratio and ratings
4x
3.9 x
3.6 x
3.5x
3.4 x
(1)
Net financial debt/(cash flow from operations ex operations
+ Repayment of operating financial assets)
3.3 x
3x
12/31/2004
Adjusted
12/31/2005
Adjusted
12/31/2006
12/31/2007
Debt ratio target: between 3.5 x and 4 x
(1)
3.83 x before taking into account the capital increase announced on June 12, 2007
Â Moody’s
Â Standard & Poor’s
A3/P-2 Stable
(cf. October 2007 report)
BBB+/A-2 Stable (cf. June 2007 report)
27
Further increase in after-tax ROCE
Strong improvement in after-tax ROCE since 2002
10.8%
10.9%
10.2%
9.1%
8.3%
8.3%
2004
2004
7.0%
6.4%
2002
2003
French GAAP
2005
IFRS standards before
application of IFRIC 12
on concessions
2005
2006
2007
IFRS standards with
application of IFRIC 12
on concessions
28
STRATEGY & OUTLOOK
Veolia Environnement: A compelling business model
Â Leadership in integrated environmental services across all businesses
Â Complementary services with strong synergies among the four divisions
Â Commitment to sustainable development in all of our operations
Improved environmental and economic efficiency, conservation and reuse,
recycling and recovery, reduction of greenhouse gas emissions and other
harmful environmental impacts
Â Long-term contracts demonstrating long-term and secure visibility of cash
flows
Customer base = 67% municipal; 33% industrial and commercial
Geographic presence in regions which represent strong growth opportunities in
environmental services with limited or well managed risk: Europe, North
America and select countries in the Asia-Pacific region and the Middle East
Â Outlook continues to point to robust and profitable growth
30
France : revenue up 6.4% to €14,256m
FRANCE
Hydropale
Lille
Dunkirk
S Leslys (transportation) - Length: 30 years – Cumul. revenue: €459m
S Morbihan departmental council (transportation)
– Length: 7 years – Cumul. revenue: €143m
S Lafarge Ciments (transportation)
Abbeville
Charleville-Mézières
- Freight train between Bordeaux & Toulouse
- Length: 4 years – Cumul. revenue: €10m
Gonesse
SNCM (transportation) - Length: 6.5 years – Cumul. revenue: €1bn
Renault
Achères
Tram in Nice (transportation) - Length: 7 years – Cumul. revenue: €595m
z Bartin Recycling Group (1) (waste) – 2006 revenue: €249m
SIOM
Claye-Souilly
Chevreuse
Dunkirk waste-to-energy plant (waste)
Morbihan Valley
Hydropale (port of Dunkirk)
Grand Ouest
– Marpol waste treatment plant (waste)
Bartin
WEEE
Mâcon
Grand Ouest WEEE recovery plant (waste)
Recycling Gp
New equipment (additional 16 MW) of the « « Biomass Biogas » project in
Claye-Souilly (waste) – Length: 15 years – Cumul. revenue: €160m
Leslys
S SIOM Chevreuse Valley (waste) – Length: 5 years – Cumul. revenue: €25m
S Greater Mâcon region (water & wastewater) (water)
ST Micro
Lafarge Ciments
S Abbeville (water) – Length: 15 years – Cumul. revenue: €22m
S Gonesse (water) – Length: 15 years – Cumul. revenue: €27m
Nice
S Sainte-Maxime (water) – Length: 12 years – Cumul. revenue: €32m
Ste- Maxime
Achères nitrogenous pollution treatment plant (water)
Cap d'Agde
S Lille urban community –Organic recovey center – Séquedin (energy)
Socata
SNCM
S STMicroelectronics - Crolles (energy) - Length: 6 years – Cumul. revenue: €27m
S Charleville-Mézières – DSP (energy) - Length: 20 years – Cumul. revenue: €41m
Contract start-up
S Cap d'Agde – DSP (energy) - Length: 18 years – Cumul. revenue: €41m
S Contract won or renewed
Socata (EADS)- Tarbes site (multi-services)
z Company acquisition
(1) Finalized in Feb. 2008
Renault – Ile-De-France sites (multi-services)
– Length: 5 years – Cumul. Revenue: €600m
Europe (outside France): revenue up 22.6%(1) to €11,682m
Finnmark
UNITED KINGDOM
S
S
S
S
z
London Borough of Lambeth (waste) – Length: 7 years – Cumul. revenue: €156m
Southwark council (2) (waste) – Length: 25 years – Cumul. revenue: €900m
Shropshire (waste) – Length: 27 years – Cumul. revenue: €1bn
United Utilities (construction) (water) – Cumul. revenue: €62m
Thames Water’s unregulated business (water) – 2008 estimated revenue: €149m
Norway
BELGIUM
S De Lijn (transportation) – Length: 5 years – Cumul. revenue: €165m
GERMANY
z SULO (waste) – 2008 estimated revenue: €1.2bn
S Landkreis Bautzen (waste) – Length: 7 years – Cumul. revenue: €17m
Rogaland
NETHERLANDS
The Hagues – Harnaschpolder plant (DBFO) (water)
- Global operating period: 30 years – Global cumul. revenue: €1.2bn
S Brabant (transportation) – Length: 8 years – Cumul. revenue: €480m
SWITZERLAND
S Novartis (multi-services) – Length: 7 years – Annual revenue: €140m
Netherlands
SULO
The Hague
Brabant
Bautzen
De Lijn
Germany
Thames Water’s
United Utilities
unregulated business
Belgium
Shropshire
United Kingdom
London Borough
Southwark of Lambeth
NORWAY
Slovakia
Bratislava
Lucenec
Hungary
Pannon Power
Sinesco
Novartis
S Finnmark (transportation) – Length: 8 years – Cumul. revenue: €168m
S Rogaland (transportation) – Length: 5.5 years – Cumul. revenue: €226m
Switzerland
SLOVAKIA
ST Micro
z Espool - Lucenec & Rekotak – Bratislava (energy)
- Espool : length of acquired contracts: 30 years – Cumul. revenue: €300m
- Rekotak : length of acquired contracts: 29 years – Cumul. revenue: €160m
TMT
HUNGARY
Spain
z Pannon Power - biomass (energy) – Rev. from acquired contracts: €600m
z Sinesco (energy) – 2007 revenue: €31m
Bulgaria
z Varna
Italy
BULGARIA
z Toplofikacja Varna EAD (energy) – Annual revenue: €8m
ITALY
z TMT (waste) – 2008 estimated revenue: €140m
S STMicro – Agrate (energy) – Length: 6 years – Cumul. revenue: €20m
SPAIN
S Campo de Dalias (DBO) (water)
– Operating period: 15 years – Cumul. revenue: €78m (incl. construction)
Campo de Dalias

Contract start-up
(1)
(2)
Announced in Feb. 2008
32
North America: revenue up 7.6%(1) to €2,790m
NORTH AMERICA
S Milwaukee Metropolitan Sewerage District (water)
S Tampa Bay (DBO) (water)
- Operating period: 13 years
– Cumul. revenue: €108m (incl. construction)
Canada
Partnership with Enpar technologies (water)
S Pinellas county (waste)
- Length: 17 years – Cumul. revenue: €356m (incl. works)
Enpar
z Assets (solid waste) of Allied Waste
Industries, Inc. (waste)
Milwaukee
z Marisol (waste) – 2006 revenue: €18m
United States
Greentree landfill (Pennsylvania) – biogas collection &
treatment (waste)
Las Vegas
z Thermal North America, Inc. (energy)
– 2007 revenue: $368m
S Boston
(2)
TNAI
Boston
Marisol
Greentree
Assets
of Allied Waste Industries
Tampa Bay
Pinellas
(transportation) – Length: 3 years
S Las Vegas(2) (transportation) – Length: 2 years

Contract start-up
Partnership with other company
(1)
(2)
Announced in Jan. 2008
33
Asia – Pacific: revenue up 34.8%(1) to €2,269m
CHINA
S Tianjin-Shibei (water)
– Length: 30 years – Cumul. revenue: €2.5bn
S Lanzhou (water)
- Length: 30 years – Cumul. revenue: €1.6bn
S Haikou (water)
S Jiamusi (energy)
S Harbin (energy) – 2007 revenue: €5m
S Jiujiang (BOT) (waste)
z Cleanaway Asia (waste)
– Length of acquired contracts: 22 years – Cumul. revenue: €200m
Jiamusi
Seoul
Soonchunhyang
Harbin
South Korea
Tianjin
China
Lanzhou
Cleanaway Asia
TAIWAN
Japan
Jiujiang
Bali
S Bali – Taipei County (waste)
- Length: 15 years – Cumul. revenue in JV: €154m
Singapore
Haikou
Chiba
Taiwan
SOUTH KOREA
Cleanaway Asia
S Seoul (transportation) – Length: 10 years – Cumul. revenue: €460m
S Soonchunhyang teaching hospital (energy)
National
Environmental
Agency
SINGAPORE
z Cleanaway Asia (waste)
– Length of acquired contracts: 22 years – Cumul. revenue: €715m
S National Environmental Agency (waste) – Length: 5 years – Cumul. revenue: €28m
Australia
Brookers
AUSTRALIA
S Sydney (DBO) (water)
– Operating period: 20 years – Cumul. revenue: €540m (incl. construction)
S Melbourne (transportation) – Length: 1 year – Cumul. revenue: €422m
z Transit First & Brookers (transportation) – 2007 overall revenue: €11m
JAPAN
S Chiba (water)
Sydney
Transit First
Melbourne
(1)
34
Middle East: a new source of growth in the medium term
Israel
SULTANATE OF OMAN
S Sûr (BOO) (water)
– Length: 22 years
– Cumul. revenue: €434m (incl. construction)
Delek Group
Kingdom of Bahrain
UNITED ARAB EMIRATES
Arcapita
S Fujairah (construction) (water)
– Cumul. revenue: €547m
S Fujairah F2 O&M Company (water)
– Length: 12 years – Cumul revenue: €71m
S Palm Jumeirah (1) (construction) (water) - Cumul. revenue: €12m
S Burj Dubai Tower (1) (DBO)(water)
– Length: 3 years (excl. construction) – Cumul. revenue: €10m
United Arab Emirates
Burj Dubai Tower
Palm Jumeirah
SAUDI ARABIA
S Marafiq – Jubail & Yanbu (construction) (water)
Marafiq
KINGDOM OF BAHRAIN
Fujairah
Fujairah F2
O&M Cy
Sûr
Partnership with Arcapita (energy)
Saudi Arabia
ISRAEL
Delek Group – Cogeneration plant on the Ashkelon site (energy)
– Length: 23 years
Sultanate of Oman

(1)
Announced in Jan. 2008
Contract start-up
Partnership with other company
35
Water: global leadership position supported by…
Â Long-term Public-Private-Partnership (concession) type contracts
Continued trend toward outsourcing (less than 20% of the European market and
less than 10% of the US market are privatized while operations of private
companies are not yet significant given the size of markets in Asia and the Middle
East)
Increasingly stringent environmental standards
Concentration of the population in urban zones
Â Strong technological positioning
Veolia Water Solutions and Technologies: average revenue growth of around 20%
per year between 2003-2007
Wide range of technological offerings (re-use, scarcity of water as a resource)
Technological offerings to meet demand for (thermal & membrane) desalination
Technological offerings minimizing environmental impact (zero discharge: Z.L.D.)
Simultaneous development of D&B and Technological Solutions (breakdown:
60%/40%)
36
Waste: making waste into a resource
Leadership position across the full value chain
Â Acceleration of development in major integrated contracts (PFI type,
Shropshire, Southwark, etc.)
Â Well-managed external growth strategy
Example: United Kingdom - Cleanaway: a successful integration (~15% market
share, etc.)
Â Strengthened operations in the fast growing recycling business line
In France, in metals with the acquisition of Bartin Recycling Group
In Germany, in paper and plastics with the acquisition on July 2, 2007 of Veolia
Umwelt Services (formerly Sulo)
Â Accelerated development in waste recovery (biogas, biofuels, recycling of
oily waste)
Â Balanced contribution of operations, well managed risk profile
Example: in the United States: 40% of revenue in solid waste, 30% in industrial
services, 20% in toxic waste and 11% in Waste-to-Energy (incineration)
37
Energy: a development model based on energy & environmental
efficiency and an excellent fit with the global offering of solutions
Â Leadership position in Europe and North America in energy services
Â An answer to environmental challenges based on the optimization of local energy
management and the diversification of energy sources, including renewables
Â An important complement to the Group’s range of global offerings
Â A balanced client mix:
municipal customers (58% of revenue)
industry and service sector customers (42% of revenue)
Â Geographic coherence: significant operations in France, Western, Southern and
Central Europe, North America and developing markets in China and Australia
Â Strong contribution to multi-service contracts
38
Transportation: a key player in a growing market
Â An answer to a crucial environmental challenge and to the needs
of large urban areas
Â Leading position in the global public transportation market
(€460bn (1)) that is still in the early stages of outsourcing (15%)
Â An offering of multi-modal and international services
Â Tailored delegated management contracts (transportation on
demand, etc.)
Â Development of value added services for the client combined
with greater efficiency
(1)
2008 estimated ex Russia, Africa and Middle East
39
Solid fundamentals to meet the cyclical uncertainties
prevailing in 2008
Â A development model primarily based on long-term contracts synonymous with
ongoing cash flow generation
Â A positive evolution in the business and geographic mix in the last few years
(disposal of water equipment businesses in the United States in 2002 and 2003)
Â Balanced geographic exposure
44% of revenue in France, 36% in Europe outside France, nearly 10% in North
America (including the contribution from TNAI in 2007 proforma full-year revenue)
Growing importance of new development zones (Africa, Middle East, Asia-Pacific)
Â Significant evolution of waste operations:
Accelerated geographic diversification:
¾ Consolidation in the United Kingdom, acquisition in Germany
Significant development of new and stable value-creating business lines
Balance between the various business lines (examples: solid waste, industrial
services, etc.):
¾ Integrated contracts, biogas and waste-to-energy operations, recycling, with a strong position
in paper and metals
¾ In the United States, diversification of the client base, with municipal customers, the oil
industry and the military/civil service.
40
2008 objectives
Â Confirmation of at least 10% revenue growth
Â Double-digit growth in cash flow from operations
Â Double-digit growth in net income
41
Medium-term objectives
Robust growth to be maintained
Â Average annual revenue growth of 8% to 10%
Â After-tax ROCE : 10% (ex potential effect related to timing of
acquisitions)
Â Continued commitment to balance sheet objectives: net financial
debt/(cash flow from operations + repayment of operating financial
assets) to range between 3.5x and 4x
Â Dividend policy to be maintained : payout to range between 50%
& 60% of recurring net income
42
APPENDICES
FINANCIAL APPENDICES
Cash flow
(€m)
Cash flow from operations (1)
Repayment of operating financial assets
Total cash generation
Investments ex. new projects
Change in WCR
Asset disposals
Rights issue reserved for minority shareholders
Tax paid
Interest paid
Other
= Free cash flow before new projects
(1)
o/w cash flow from discontinued operations: (€2m) in 2007 & (€8m) in 2006
(2)
o/w the recovery by the municipality of the Orvade financing contracts for €34m
2006
2007
3,844
4,219
+438
+395 (2)
4,282
(2,782)
(112)
+355
+82
(343)
(596)
4,614
(2,925)
(167)
+366
+206
(417)
(786)
+15
= 901
+15
= 906
Changes in net financial debt
(€m)
2006
2007
13,871
14,675
(901)
(906)
+1,424
+3,973
Â Dividends paid
+479
+564
Â Capital increase - VE
(165)
(2,852) (1)
Â Impact of exchange rates and other
(33)
(329)
14,675
15,125
+804
+450
Net financial debt at January 1st
Â Free cash flow
Â Investments in new projects
Net financial debt at December 31
Change in debt
(1) Including €2.6 bn capital increase completed as July 10, 2007
46
Debt management: the Group has further strengthened
its financial stability
Â Ratings
Moody’s: A3/P-2 Stable
Standard & Poor’s: BBB+/A-2 Stable
Elimination of the structural subordination status
Â 2007 bond issues:
February: €200m maturity August 2008
May: €1bn maturity 2022 (15 years)
October: £500m maturity 2037 (30 years)
Â Further extension of average maturity:
gross debt (€18.2bn): 7.7 years [vs. 6.6 years in 2006]
net financial debt (€15.1bn): 9.2 years [vs. 7.8 years in 2006]
Â 74% of net debt is at a fixed rate or a capped floating rate
Â 66% of gross debt (after swaps) is denominated in euros (10% in USD and 10% in GBP)
Â Group liquidity: €8.1bn including €5.0bn in undrawn credit lines
47
Structure of debt
By currency
By interest rate
Other 14%
Floating rate
26%
GBP 10%
USD 10%
Fixed rate 74%
(net financial debt after hedges)
Euro 66%
(gross debt after hedges)
48
Pre-tax ROCE by division
Average capital employed (€m)
Pre-tax ROCE (%)
2006
2007
2006
2007
Water
4,905
5,688
18.6%
18.1%
Waste
4,729
5,890
12.4%
12.5%
Energy Services
2,395
3,013
14.1%
11.7%
Transportation
1,310
1,505
7.4%
7.6%
49
APPENDICES: OPERATIONAL
Significant operations in fast growing desalination market
Â New major desalination references

More than 100 years experience in desalination

Construction and/or operation of around 13% of the world’s seawater
desalination capacity (1,600 plants with 5.3 million m3/d) capacity *

Chosen to design & build one of the largest desalination plants that uses Multiple
Effect Distillation (MED) for the city of Jubail and the Eastern province of Saudi
Arabia (800,000 m3//d )

Construction and operation of the world’s largest seawater reverse osmosis
(SWRO) plant in Ashkelon, Israel (capacity of 320,000 m3/d)

An estimated 80% market share in Multiple Effect Distillation (MED)
Ashkelon desalination plant
Â Demonstrating technological leadership
Leader in thermal and reverse osmosis desalination processes
Focused on technological programs (e.g. ARAMIS –Veolia’s Membrane Center of. Expertise (choice of the appropriate
solution via the characterization of performances of the membranes in the market, identification of deposits and
proposition of solutions in terms of pretreatment)
Â And proactive in a growing market
Robust growth expected in global production capacity, up from 39.9 million m3/day in 2006 to 97.5 million m3 per day by
2015*
Gulf countries account for about 46% of today’s production capacity
Saudi Arabia and the United Arab Emirates are currently the 2 largest markets, followed by the United States, Spain and
China
Steady trend towards desalination plants with increasingly large production capacity, both in membrane and thermal
processes
Main competitors: Doosan (South Korea), Impreglio (Italy), GE, Suez and Abengoa/Befesa (Spain)
51
*Estimation of global desalination capacity: Global Water Intelligence “Desalination Markets 2007”
Water Recycling and Reuse
More than 3 million m3/day of total installed capacity
More than 140 references worldwide
MF/UF/RO membrane technologies/dedicated technologies
Â Australia, Kwinana :
Water Recycling : 16,700 m3/d
Membrane technologies
Â Singapore, Kranji plant :
Water Recycling : 40,000
Membrane technologies
Membranes
m3/d
Â South Africa, Durban :
Industrial Reuse : 40.000 m3/d
Dedicated filtration steps
Â Spain, Barcelona :
Water Reuse for irrigation and aquifer recharge : 302,400 m3/d
Dedicated filtration technology Actidisk®
Actidisk®
Veolia Environnement North America
Providing leadership in environmental management
• Market leadership in
water services through
municipal Public-Private
Partnerships, industrial
outsourcing and designbuild solutions and
technologies
Fully integrated waste
Revenue: $850 million
Revenue: $2 billion
management company
and a leader in industrial
waste services with key
market positions across
the entire waste
management chain
2007 Revenue:
Total Employees
• Leading energy services
company, including the
largest portfolio of heating
and cooling systems in the
US and comprehensive
energy and facility
management for buildings
and industrial operations
Revenue: $400 million*
• Leading private
transportation operator in
North America, including
bus and rail commuter
services, shuttle,
paratransit and
customized transportation
on demand
Revenue: $1.1 billion
Approximately $4.4 billion*
31,000
* Includes full-year 2007 contribution from TNAI acquisition on a proforma basis.
53
Veolia Water North America – North American Water
Industry Leader 2007 Revenue: $850 million
Municipal leadership
Â Market leader with 34% share* of Public-Private
Partnership (PPP) market
Â Serving 600 communities in 38 states, including
management of largest PPP water distribution
(Indianapolis) and wastewater (Milwaukee: startup in March ‘08) contracts
Â Approximately 300 facilities operated
Â Nearly 6,000 miles of water distribution lines and
4.500 miles of wastewater lines
Â 30 effluent reuse & 5 biosolids facilities
Â High-security federal facilities
Industrial leadership
Â Market leader in industrial outsourcing with 70%
market share*
Â 100+ industrial facilities managed for various
Fortune 500 companies and largest global
manufacturers, including Air Products, BP-Amoco,
Cargill, General Motors, IBM, Nestle, PepsiCo, US
Steel, Valero, Exxon Mobil, Marthon Oil etc.
Â 300+ MGD daily flow
Â All facets of water and wastewater management for
multiple industries
* Source: Public Works Financing, March 2007
54
Veolia Environmental Services North America - An Integrated
Offering 2007 Revenue: $2 billion
Solid Waste – 39% of Revenue
Â Services:
Collection, Transfer, Recycling, Disposal, On-Site
Management
Â Market:
3,730 Employees and Locations in 12 US states,
the Bahamas and Quebec
32 Landfills
511 municipal solid waste contracts and serving
most major industries
Hazardous Waste - 19% of Revenue
Â Services:
Hazardous Waste Disposal, Environmental
Program Management, Incineration, Fuels
Blending and Solvent Recovery, Electronics
Recycling, Lab Packing, Emergency and Special
Waste, Low Level Radioactive Waste
Â Market:
1,700 Employees
Industrial Services – 31% of Revenue
Â Services:
Industrial Cleaning, Mechanical Services, Sewer
Cleaning and Inspection, Dredging and Dewatering, Tank
and Basin Cleaning, Emergency Response 24/7, Marine
Services
Â Market:
US Market Leader for Industrial Services
5,090 Employees and Over 100 Locations
Serving most major industries, including clients such as
Bayer, Exxon Mobil and Innovene
Waste-To-Energy – 11% of Revenue
Â Services:
Waste Combustion, Energy Recovery, Facility
Operation, Facility Maintenance, Design, Retrofit,
Construct
Â Market:
630 Employees and 10 WTE Plants with a capacity
of over 14,000 tons per day
45 Service Locations
Operates Largest Refuse Derived Fuel (RDF) facility
in the world - Miami-Dade
15 Transfer, Storage, Disposal Facilities (TSDF’s)
Electrical Generation for 350,000 households
Bringing innovative services and technologies to
customers that turn over 200,000 tons of waste
into a resource
55
Veolia Energy North America - Providing leadership in Energy
Services 2007 Revenue (proforma*): Approx. $400 million
Â Owns and operates the largest portfolio of energy distribution networks
(steam, hot water, chilled water, electricity) in the USA

Steam capacity of 11 million pounds/hour

Chilled water capacity of 169,000 tons

Electric generating capacity of over 1,100 MW
Â Facilities in 11 states, serving more than 1,200 customers in 31 States
and the District of Columbia
Â Key Capabilities:

Operation of heating and cooling networks

Cogeneration

Central plant maintenance and operations

Multi-technical maintenance and services

Comprehensive building and facility management (Houston Galleria, Caesar’s
Palace, Copley Place Boston, Biogen-Idec in Cambridge)

Management of complex energy issues and planning in areas related to
power generation, transmission and distribution
Â Committed to Sustainable Development

In San Diego, CA, operate 25 MW biomass “wood” generating station

In Baltimore, 60% of steam is delivered from a Waste-to-Energy plant

Operate trigeneration (chilled water, steam and electrical power) in Oklahoma
City and Tulsa operations

Recognized by the EPA and other agencies for greenhouse gas reduction and TNAI acquisition on a proforma basis.
energy efficiency
* Includes full-year 2007 contribution from
56
Veolia Transportation North America – Leading private
transportation provider in North America 2007 Revenue:
$1.1 billion
Â Operating over 10,000 vehicles across more
than 130 contracts
Â Operations in 22 States and 2 Canadian
provinces
Â Services include bus operations (fixed route and
express/commuter buses), BRT (bus rapid
transit), commuter rail, para-transit, airport
shuttle and taxi.
Â Operate the largest contracted fixed-route bus
service in North America (Las Vegas)
Â Operate the largest contracted commuter rail
system (Boston)
Â Operations include SuperShuttle, the largest
U.S. airport shuttle company (transportation-ondemand), serving 27 leading airports and over
8 million passengers per year
57
Growth supported by the success of the company’s
offering to industrial clients
Backlog of signed contracts in 2007
with large industrial accounts: €3,160m
€109m
€251m
€1,264m
€612m
€924m
Water
Multi Services
Energy Services
Waste
Transportation
58
Industrial offering: business growth since 2001
€m
1800
1600
1400
1200
1000
800
600
400
200
0
2001
2002
2003
2004
2005
2006
2007
2001 – 2007:
Â Cumulative total of new contracts signed with large European industrial accounts:
€1,683m in annual revenue.
Average duration of contracts: 6.9 years, with a backlog of around €11.6bn.
One third of the contracts signed are multi-divisional contracts: €503m in annual revenue.
59
Investor Relations contact information
Â Nathalie Pinon, Head of Investor Relations
and Financial Communication
38 Avenue Kléber – 75116 Paris - France
Telephone +33 1 71 75 01 67
Fax +33 1 71 75 10 12
e-mail [email protected]
Â Brian Sullivan, Vice President, US Investor Relations
700 E. Butterfield Road -Suite 201
Lombard, IL 60148 - USA
Telephone +1 (630) 371 2749
Fax +1 (630) 282 0423
e-mail [email protected]
Web site
http://www.veolia-finance.com
60