2007 Annual results

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 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


2007: another year of profitable growth, in line with
objectives

Sustained business momentum: revenue up 14.9% (1)
Strong internal growth (+7.8%)
Strategy of targeted external growth (+ 7.1%)

Further improvement in recurring operating income (+11.9% (1))
Strong rise in net income (+22.3%) and net earnings per share (+13.7% (2) )
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

Free cash flow before new projects (€906 million in 2007)
After-tax ROCE: 10.9%

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) At constant exchange rates
(2) Non-diluted from options but diluted from the increase in capital completed on July 10, 2007
(3) Subject to approval by the Annual Shareholders’ Meeting on May 7, 2008 3


2007 Key Figures(€m)

35 000 32,628 4,219
28,620
30 000 25,570 4000 3,844
25 000 22,792
3,542
20 000 3500 3,336
15 000
10 000 3000

5 000
0 2500
2004 (1) 2005 (1) 2006 2007 2004 (1) 2005 (1) 2006 2007

Consolidated revenue +14.9% (2) Cash flow from operations +9.8%

2,469
2 500
2,222 1 000 933
1,904 762
2 000 800
1,629 630
1 500 600 477
1 000 400

500 200

0 0
2004 (1) 2005 (1) 2006 2007 2004 (1) 2005 (1) 2006 2007

Recurring operating income +11.9% (2) Recurring net income +22.5%
(1) 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

Consolidated revenue 28,620 32,628 +14.0%

Cash flow from operations 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%

Net financial debt 14,675 15,125 -

(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 By geographic zone
Transportation Asia-Pacific Rest of the world
Water 34%
17% 7% 5%

North
America
8%

Europe
Energy ex France France
Waste 28% 36% 44%
Services
21%

Consolidated revenue at December 31, 2007: €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%
9,214 Waste +25.5% +7.5%
7,463
Energy Services +12.5% +7.9%
Transportation +14.0% +8.1%
6,896
6,118
VE Group +14.9% +7.8%
4,951 5,590

12/31/2006 12/31/2007


8


Significant presence in growth markets

(€m)

Chg. at constant
14,256 exchange rates

13,403 France +6.4%
Europe ex France +22.6%
North America +7.6%
Asia-Pacific +34.8%
11,682
Rest of the world +38.5%
9,498
VE Group +14.9%
2,817 2,790
2,269
1,702
1,200 1,631
12/31/2006 12/31/2007


9


Solid growth in cash flow from operations (1)

(€m) Δ current FX CFO margin
12/31/06 12/31/07 (1) 12/31/07
rates

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) - -

-
Total from continuing operations 3,852 4,221 +9.6%

Discontinued operations (8) (2) - -

Total Group 3,844 4,219 +9.8% 12.9%

(1)
Cash flow from operations as defined by the Conseil National de Comptabilité’s (CNC) recommendation dated
October 27, 2004
(2)
Cash flow from operations 10


Double-digit growth in recurring operating income: up
11.9% (1)

(€m)
Recurring operating
income margin

Δ constant
12/31/06 12/31/07 12/31/06 12/31/07
FX rates

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) - - -

Total Group 2,222 2,469 +11.9% 7.8% 7.6%

(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
12/31/06 12/31/07 12/31/07
rates

Water 1,160 1,268 +9.2% 11.6%

Waste 648 803 +23.9% 8.7%

Energy Services 378 399 +5.6% 5.8%

Transportation 14 130 +858.1% 2.3%

Holding (67) (103) - -

Total Group 2,133 2,497 +17.1% 7.7%

(1)
At constant exchange rates
12


Overview of year-over-year growth at half-year periods

En M€

H1 2007 H2 2007 2007

Consolidated revenue 15,462 17,166 32,628
+10.9% +16.9% +14.0%

Cash flow from operations 2,009 2,210 4,219
+5.2% +14.2% +9.8%

Recurring operating income 1,236 1,233 2,469
+9.5% +12.8% +11.1%

13


Reconciliation of recurring operating income to operating
income

(€m)

Δ current FX
12/31/06 12/31/07
rates

Recurring operating income 2,222 2,469 +11.1%

Non-recurring items

Provisions & write-downs
booked in transportation in
Germany (86) -

Transportation - +15

Other (incl. Energy Poland in 2007) (3) +13

Operating income 2,133 2,497 +17.1%

14


Water: Recurring operating income: €1,266m, +8.8%
Operating income: €1,268m
+9.2%
1350 1,268
1250 1,160
(€m)
1150
1050 1,002
950
850
750
650
31/12/2005 31/12/2006 31/12/2007
Operating income
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
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

Good improvement in results in North America: expansion of the Tampa Bay contract
In Asia, continued growth: In China, expansion of the Shenzhen contract and full-year
effect of Kunming, Sinopec, Urumqi and Changzhou contracts)
In the Africa-Middle East region, strong results overall despite circumstantial difficulties in Gabon
Technological Solutions: further growth in operating income
15


Waste: Recurring operating income: €803m, +23.9%
Operating income: €803m
803
800 +23.9%
(€m)
700
648

600
544

500
31/12/2005 31/12/2006 31/12/2007

Operating income

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
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

In North America, double-digit growth in operating income (very favorable impact due to the
contributions from hazardous waste and industrial services )
In Asia-Pacific, robust performance particularly in Australia 16


Energy: Recurring operating income: €388m, up 2.8%
Operating income: €399m
+5.6%
(€m) 399
400 378

315
300

200
31/12/2005 31/12/2006 31/12/2007

Operating income

Impact of mild weather
Smaller contribution of sales of excess CO2 quotas
France:
Growth in contribution of specialized subsidiaries

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

130
(€m) 117 +858%
100

14

0
31/12/2005 31/12/2006 31/12/2007

Operating income

In France, satisfactory increase in business and results, effect of the full-year
consolidation of SNCM
In Europe:
Favorable progression in Marschbahn and upturn in the contribution from Germany
Impact of the start-up of new contracts in the Netherlands

In North America, improved contribution from transit and increased results in
transportation on demand
In Australia, further growth in business and results
18


€3,973m allocated to new projects & acquisitions

(€m)

Good control of maintenance capital spending
(4.9% of revenue) 1,590

Further growth in existing operations 1,335

Increase in new projects and acquisitions 3,973

Total capital expenditures 6,898

Asset disposals (366)
Minority interest impacts linked to new acquisitions (49)

Repayment of operating financial assets (395)
Net capital expenditures and investments 6,088

19


€3,973m allocated to new projects & acquisitions

(€m) Growth

Financial Operating
incl. Industrial New
Maintenance change in projects financial Total
consolidation assets
capex scope

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
Other 16 26 26 18 - 86

Total at 12/31/07 1,590 284 717 3,973 (1) 334 6,898
Total at 12/31/06 1,411 270 740 1,424 361 4,206

(1) Of which €954m linked to internal growth and €3,019m related to acquisitions.

20


4 significant acquisitions made in 2007

Germany
Veolia Umwelt Services (formerly Sulo), the n°2 waste treatment company
Consolidation date: July 2, 2007 – Contribution to Veolia’s 2007 revenue : €628m
Enterprise value: €1,310m (estimated amount after the disposal of Sulo Technology (a container
manufacturer) to Plastic Omnium)
Disposal on July 29, 2007 of Sulo Environmental Technology to Plastic Omnium (revenue of around
€200m)

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)
Consolidation date: October 3, 2007 – Contribution to Veolia’s 2007 revenue : €26m
Enterprise value: €338m

North America
TNAI, the largest portfolio of district heating and cooling networks in the United States
Consolidation date: December 31, 2007 – No contribution to Veolia’s 2007 revenue
Entreprise value: $788m

United Kingdom
Several unregulated businesses of Veolia Water Outsourcing Ltd (former Thames Water)
Consolidation date: November 28th, 2007 – Contribution to Veolia’s 2007 revenue: €15m
Enterprise value: €233m
21


More than €3.9bn allocated to new projects or acquisitions

By division By geographic zone
Transportation Rest of the World
6% (4) Water Asia-Pacific
24% (1) 2%
14%
Energy
Services
20% (3)

Waste Europe
North America 63%
50% (2)
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)
12/31/06 12/31/07 Δ12/31/07
12/31/06

Revenue 28,620 32,628 +14.0%
Operating income 2,133 2,497
Cost of net financial debt (701) (817)
Other financial income (expenses) (34) +1
Tax (410) (420)
Equity in net income of affiliates +6 +17

Net income from continuing operations 994 1,278 +28.5%
Net income attributable to minority interests (236) (327)

Net income from continuing operations 758 951
Net income 759 928 +22.3%
Recurring net income 762 933 +22.5%

23


Change in cost of borrowing

In €m

Δ12/31/07
12/31/06 12/31/07 12/31/06

Cost of net financial debt (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

Recurring net income 933

Non-recurring operating income impact +28

Disposal of discontinued operations (Transport in Denmark…) (23)

Non-recurring tax +11

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) 564
Interest VE S.A. (329)
Investments paid capital Currency
14,675 excl. new increases(2) effect 15,125
projects 786 (221) & other
Capital
increase
(3,635) (157) excl. VE
& other
14,675 Disposals 2,925 14 889
Cash flow (366)
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) Including the recovery by the municipality of the Orvade financing contract for €34m
(2) Including the €2.6 billion capital increase completed on July 10, 2007.
26


Debt ratio and ratings

4x

3.9 x
3.6 x

3.4 x 3.5x

(1)
3.3 x
Net financial debt/(cash flow from operations ex operations
+ Repayment of operating financial assets)

3x
12/31/2004 12/31/2005 12/31/2006 12/31/2007
Adjusted Adjusted

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

Moody’s A3/P-2 Stable (cf. October 2007 report)
Standard & Poor’s BBB+/A-2 Stable (cf. June 2007 report)

27


Further increase in after-tax ROCE

Strong improvement in after-tax ROCE since 2002
10.9%
10.8%
10.2%

9.1%

8.3% 8.3%

7.0%
6.4%

2002 2003 2004 2004 2005 2005 2006 2007

French GAAP IFRS standards before IFRS standards with
application of IFRIC 12 application of IFRIC 12
on concessions on concessions

28


STRATEGY & OUTLOOK


Veolia Environnement: A compelling business model

Leadership in integrated environmental services across all businesses
Complementary services with strong synergies among the four divisions
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

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
Outlook continues to point to robust and profitable growth

30

Veolia Environnement

France : revenue up 6.4% to €14,256m

FRANCE
Hydropale
Leslys (transportation) - Length: 30 years – Cumul. revenue: €459m Dunkirk Lille
Morbihan departmental council (transportation)
– Length: 7 years – Cumul. revenue: €143m
Lafarge Ciments (transportation) Abbeville Charleville-Mézières
- Freight train between Bordeaux & Toulouse
- Length: 4 years – Cumul. revenue: €10m
SNCM (transportation) - Length: 6.5 years – Cumul. revenue: €1bn Gonesse
Achères Renault
Tram in Nice (transportation) - Length: 7 years – Cumul. revenue: €595m
Bartin Recycling Group (1) (waste) – 2006 revenue: €249m SIOM Claye-Souilly
Dunkirk waste-to-energy plant (waste) Chevreuse
– Length: 11 years – Cumul. revenue: €50m Morbihan Valley
Hydropale (port of Dunkirk)
– Marpol waste treatment plant (waste) Grand Ouest
WEEE Bartin
Grand Ouest WEEE recovery plant (waste) Recycling Gp Mâcon
New equipment (additional 16 MW) of the « « Biomass Biogas » project in
Claye-Souilly (waste) – Length: 15 years – Cumul. revenue: €160m
Leslys
SIOM Chevreuse Valley (waste) – Length: 5 years – Cumul. revenue: €25m
Greater Mâcon region (water & wastewater) (water)
- Length: 10 years – Cumul. revenue: €59m ST Micro
Lafarge Ciments
Abbeville (water) – Length: 15 years – Cumul. revenue: €22m
Gonesse (water) – Length: 15 years – Cumul. revenue: €27m
Nice
Sainte-Maxime (water) – Length: 12 years – Cumul. revenue: €32m
Achères nitrogenous pollution treatment plant (water)
Ste- Maxime
Lille urban community –Organic recovey center – Séquedin (energy) Socata Cap d'Agde
SNCM
STMicroelectronics - Crolles (energy) - Length: 6 years – Cumul. revenue: €27m
Charleville-Mézières – DSP (energy) - Length: 20 years – Cumul. revenue: €41m Contract start-up
Cap d'Agde – DSP (energy) - Length: 18 years – Cumul. revenue: €41m Contract won or renewed
Socata (EADS)- Tarbes site (multi-services) Company acquisition
Renault – Ile-De-France sites (multi-services) (1) Finalized in Feb. 2008
– Length: 5 years – Cumul. Revenue: €600m


Europe (outside France): revenue up 22.6%(1) to €11,682m
Finnmark

UNITED KINGDOM
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 Norway
United Utilities (construction) (water) – Cumul. revenue: €62m
Thames Water’s unregulated business (water) – 2008 estimated revenue: €149m
BELGIUM
De Lijn (transportation) – Length: 5 years – Cumul. revenue: €165m
GERMANY
SULO (waste) – 2008 estimated revenue: €1.2bn Rogaland Netherlands SULO
Landkreis Bautzen (waste) – Length: 7 years – Cumul. revenue: €17m The Hague
Brabant Bautzen
NETHERLANDS De Lijn
The Hagues – Harnaschpolder plant (DBFO) (water) Thames Water’s United Utilities Germany
- Global operating period: 30 years – Global cumul. revenue: €1.2bn unregulated business Slovakia
Belgium Bratislava
Brabant (transportation) – Length: 8 years – Cumul. revenue: €480m Shropshire
Lucenec
SWITZERLAND United Kingdom
London Borough Hungary
Novartis (multi-services) – Length: 7 years – Annual revenue: €140m Southwark of Lambeth Pannon Power
Sinesco
NORWAY Novartis
Finnmark (transportation) – Length: 8 years – Cumul. revenue: €168m Switzerland
Rogaland (transportation) – Length: 5.5 years – Cumul. revenue: €226m
SLOVAKIA ST Micro
Espool - Lucenec & Rekotak – Bratislava (energy) TMT
- Espool : length of acquired contracts: 30 years – Cumul. revenue: €300m Bulgaria
- Rekotak : length of acquired contracts: 29 years – Cumul. revenue: €160m Varna

HUNGARY Spain Italy
Pannon Power - biomass (energy) – Rev. from acquired contracts: €600m
Sinesco (energy) – 2007 revenue: €31m
BULGARIA
Toplofikacja Varna EAD (energy) – Annual revenue: €8m
Campo de Dalias
ITALY
TMT (waste) – 2008 estimated revenue: €140m Contract start-up
STMicro – Agrate (energy) – Length: 6 years – Cumul. revenue: €20m Contract won or renewed
SPAIN Company acquisition
Campo de Dalias (DBO) (water)
– Operating period: 15 years – Cumul. revenue: €78m (incl. construction) (1) At constant exchange rates 32
(2) Announced in Feb. 2008


North America: revenue up 7.6%(1) to €2,790m

NORTH AMERICA

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

Las Vegas(2) (transportation) – Length: 2 years
Contract start-up
Contract won or renewed
Company acquisition
Partnership with other company

(2) Announced in Jan. 2008 33


Asia – Pacific: revenue up 34.8%(1) to €2,269m

CHINA
Tianjin-Shibei (water)
– Length: 30 years – Cumul. revenue: €2.5bn Jiamusi
Lanzhou (water) Seoul
- Length: 30 years – Cumul. revenue: €1.6bn Harbin
Soonchunhyang
Haikou (water)
- Length: 30 years – Cumul. revenue: €776m South Korea
Jiamusi (energy)
Tianjin
Harbin (energy) – 2007 revenue: €5m China
Jiujiang (BOT) (waste)
Lanzhou
Cleanaway Asia (waste)
– Length of acquired contracts: 22 years – Cumul. revenue: €200m Cleanaway Asia
Japan
TAIWAN Jiujiang
Bali – Taipei County (waste)
Bali Chiba
- Length: 15 years – Cumul. revenue in JV: €154m
Singapore Haikou Taiwan
SOUTH KOREA
Seoul (transportation) – Length: 10 years – Cumul. revenue: €460m Cleanaway Asia
Soonchunhyang teaching hospital (energy) National
– Length: 5 years – Cumul. revenue: €11m Environmental
Agency
SINGAPORE
Cleanaway Asia (waste)
– Length of acquired contracts: 22 years – Cumul. revenue: €715m Australia
National Environmental Agency (waste) – Length: 5 years – Cumul. revenue: €28m Brookers
AUSTRALIA
Sydney
Sydney (DBO) (water) Transit First
– Operating period: 20 years – Cumul. revenue: €540m (incl. construction)
Melbourne (transportation) – Length: 1 year – Cumul. revenue: €422m
Transit First & Brookers (transportation) – 2007 overall revenue: €11m Melbourne
JAPAN Company acquisition
Chiba (water)
– Length: 3 years – Cumul. revenue: €18m (1) At constant exchange rates 34


Middle East: a new source of growth in the medium term

SULTANATE OF OMAN Israel
Sûr (BOO) (water) Delek Group
– Length: 22 years
– Cumul. revenue: €434m (incl. construction) Kingdom of Bahrain
UNITED ARAB EMIRATES Arcapita
Fujairah (construction) (water)
– Cumul. revenue: €547m
Fujairah F2 O&M Company (water)
– Length: 12 years – Cumul revenue: €71m
Palm Jumeirah (1) (construction) (water) - Cumul. revenue: €12m
Burj Dubai Tower (1) (DBO)(water)
– Length: 3 years (excl. construction) – Cumul. revenue: €10m United Arab Emirates
Burj Dubai Tower Fujairah
SAUDI ARABIA
Palm Jumeirah Fujairah F2
Marafiq – Jubail & Yanbu (construction) (water) Marafiq
– Cumul. revenue: €647m O&M Cy

KINGDOM OF BAHRAIN Sûr
Partnership with Arcapita (energy) Saudi Arabia
ISRAEL
Delek Group – Cogeneration plant on the Ashkelon site (energy)
– Length: 23 years Sultanate of Oman
– Cumul. revenue: €83m

Contract start-up
(1) Announced in Jan. 2008
Partnership with other company

35


Water: global leadership position supported by…

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

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

Acceleration of development in major integrated contracts (PFI type,
Shropshire, Southwark, etc.)
Well-managed external growth strategy
Example: United Kingdom - Cleanaway: a successful integration (~15% market
share, etc.)
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)
Accelerated development in waste recovery (biogas, biofuels, recycling of
oily waste)
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

Leadership position in Europe and North America in energy services
An answer to environmental challenges based on the optimization of local energy
management and the diversification of energy sources, including renewables
An important complement to the Group’s range of global offerings
A balanced client mix:
municipal customers (58% of revenue)
industry and service sector customers (42% of revenue)
Geographic coherence: significant operations in France, Western, Southern and
Central Europe, North America and developing markets in China and Australia
Strong contribution to multi-service contracts

38


Transportation: a key player in a growing market

An answer to a crucial environmental challenge and to the needs
of large urban areas
Leading position in the global public transportation market
(€460bn (1)) that is still in the early stages of outsourcing (15%)
An offering of multi-modal and international services
Tailored delegated management contracts (transportation on
demand, etc.)
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

A development model primarily based on long-term contracts synonymous with
ongoing cash flow generation
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)
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)
Significant evolution of waste operations:
Accelerated geographic diversification:
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.):
Integrated contracts, biogas and waste-to-energy operations, recycling, with a strong position
in paper and metals
In the United States, diversification of the client base, with municipal customers, the oil
industry and the military/civil service.

40


2008 objectives

Confirmation of at least 10% revenue growth

Double-digit growth in cash flow from operations

Double-digit growth in net income

41


Medium-term objectives

Robust growth to be maintained

Average annual revenue growth of 8% to 10%
After-tax ROCE : 10% (ex potential effect related to timing of
acquisitions)
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
Dividend policy to be maintained : payout to range between 50%
& 60% of recurring net income

42


APPENDICES


FINANCIAL APPENDICES


Cash flow

(€m)
2006 2007

Cash flow from operations (1) 3,844 4,219
Repayment of operating financial assets +438 +395 (2)
Total cash generation 4,282 4,614
Investments ex. new projects (2,782) (2,925)
Change in WCR (112) (167)
Asset disposals +355 +366
Rights issue reserved for minority shareholders +82 +206
Tax paid (343) (417)
Interest paid (596) (786)
Other +15 +15
= Free cash flow before new projects = 901 = 906

(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


Changes in net financial debt

(€m)
2006 2007

Net financial debt at January 1st 13,871 14,675

Free cash flow (901) (906)
Investments in new projects +1,424 +3,973
Dividends paid +479 +564
Capital increase - VE (165) (2,852) (1)
Impact of exchange rates and other (33) (329)

Net financial debt at December 31 14,675 15,125

Change in debt +804 +450

(1) Including €2.6 bn capital increase completed as July 10, 2007
46


Debt management: the Group has further strengthened
its financial stability

Ratings
Moody’s: A3/P-2 Stable
Standard & Poor’s: BBB+/A-2 Stable
Elimination of the structural subordination status
2007 bond issues:
February: €200m maturity August 2008
May: €1bn maturity 2022 (15 years)
October: £500m maturity 2037 (30 years)
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]
74% of net debt is at a fixed rate or a capped floating rate
66% of gross debt (after swaps) is denominated in euros (10% in USD and 10% in GBP)
Group liquidity: €8.1bn including €5.0bn in undrawn credit lines
47


Structure of debt

By interest rate By currency

Other 14%
Floating rate
26%
GBP 10%

USD 10%

Euro 66%
Fixed rate 74%

(net financial debt after hedges) (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

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

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)
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

Australia, Kwinana :
Water Recycling : 16,700 m3/d
Membrane technologies

Singapore, Kranji plant : Membranes
Water Recycling : 40,000 m3/d
Membrane technologies

South Africa, Durban :
Industrial Reuse : 40.000 m3/d
Dedicated filtration steps

Actidisk®
Spain, Barcelona :
Water Reuse for irrigation and aquifer recharge : 302,400 m3/d
Dedicated filtration technology Actidisk®


Veolia Environnement North America
Providing leadership in environmental management

• Market leadership in Fully integrated waste • Leading energy services • Leading private
water services through management company company, including the transportation operator in
municipal Public-Private and a leader in industrial largest portfolio of heating North America, including
Partnerships, industrial waste services with key and cooling systems in the bus and rail commuter
outsourcing and design- market positions across US and comprehensive services, shuttle,
build solutions and the entire waste energy and facility paratransit and
technologies management chain management for buildings customized transportation
and industrial operations on demand
Revenue: $850 million Revenue: $2 billion Revenue: $400 million* Revenue: $1.1 billion

2007 Revenue: Approximately $4.4 billion*

Total Employees 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 Industrial leadership
Market leader with 34% share* of Public-Private Market leader in industrial outsourcing with 70%
Partnership (PPP) market market share*
Serving 600 communities in 38 states, including 100+ industrial facilities managed for various
management of largest PPP water distribution Fortune 500 companies and largest global
(Indianapolis) and wastewater (Milwaukee: start- manufacturers, including Air Products, BP-Amoco,
up in March ‘08) contracts Cargill, General Motors, IBM, Nestle, PepsiCo, US
Approximately 300 facilities operated Steel, Valero, Exxon Mobil, Marthon Oil etc.
Nearly 6,000 miles of water distribution lines and 300+ MGD daily flow
4.500 miles of wastewater lines All facets of water and wastewater management for
30 effluent reuse & 5 biosolids facilities multiple industries
High-security federal facilities

* Source: Public Works Financing, March 2007 54


Veolia Environmental Services North America - An Integrated
Offering 2007 Revenue: $2 billion
Solid Waste – 39% of Revenue Industrial Services – 31% of Revenue
Services: Services:
Collection, Transfer, Recycling, Disposal, On-Site Industrial Cleaning, Mechanical Services, Sewer
Management Cleaning and Inspection, Dredging and Dewatering, Tank
and Basin Cleaning, Emergency Response 24/7, Marine
Market: Services
3,730 Employees and Locations in 12 US states, Market:
the Bahamas and Quebec
US Market Leader for Industrial Services
32 Landfills
5,090 Employees and Over 100 Locations
511 municipal solid waste contracts and serving Serving most major industries, including clients such as
most major industries Bayer, Exxon Mobil and Innovene

Hazardous Waste - 19% of Revenue Waste-To-Energy – 11% of Revenue
Services: Services:
Hazardous Waste Disposal, Environmental Waste Combustion, Energy Recovery, Facility
Program Management, Incineration, Fuels Operation, Facility Maintenance, Design, Retrofit,
Blending and Solvent Recovery, Electronics Construct
Recycling, Lab Packing, Emergency and Special
Waste, Low Level Radioactive Waste Market:
630 Employees and 10 WTE Plants with a capacity
Market:
of over 14,000 tons per day
1,700 Employees
Operates Largest Refuse Derived Fuel (RDF) facility
45 Service Locations 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 55
into a resource


Veolia Energy North America - Providing leadership in Energy
Services 2007 Revenue (proforma*): Approx. $400 million

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
Facilities in 11 states, serving more than 1,200 customers in 31 States
and the District of Columbia
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
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
* Includes full-year 2007 contribution from
Recognized by the EPA and other agencies for greenhouse gas reduction and TNAI acquisition on a proforma basis.
energy efficiency

56


Veolia Transportation North America – Leading private
transportation provider in North America 2007 Revenue:
$1.1 billion

Operating over 10,000 vehicles across more
than 130 contracts
Operations in 22 States and 2 Canadian
provinces
Services include bus operations (fixed route and
express/commuter buses), BRT (bus rapid
transit), commuter rail, para-transit, airport
shuttle and taxi.
Operate the largest contracted fixed-route bus
service in North America (Las Vegas)
Operate the largest contracted commuter rail
system (Boston)
Operations include SuperShuttle, the largest
U.S. airport shuttle company (transportation-on-
demand), 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:
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

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 nathalie.pinon@veolia.com

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 brian.sullivan@veoliaes.com
Web site
http://www.veolia-finance.com

60

2007 Annual results

Recommended

Recommended

More Related Content

What's hot

What's hot (16)

Viewers also liked

Viewers also liked (20)

Similar to 2007 Annual results

Similar to 2007 Annual results (20)

More from ve-finance

More from ve-finance (20)

Recently uploaded

Recently uploaded (20)

2007 Annual results