2007, First Half Results

Veolia Environnement Investor Relations – First Half 2007 Results - 30/08/2007

FIRST HALF 2007 RESULTS

Veolia Environnement

2

Investor Relations – First Half 2007 Results – 30/08/07

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 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.


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Disclaimer

This document does not constitute an offer of securities in the United States or in any other jurisdiction. Securities may not be offered in the United States without registration under the United States Securities Act of 1933 or an exemption from registration. Veolia Environnement does not intend to register the offering described in this document or to conduct a public offering of securities in the United States.

A French language prospectus relating to the French offering has been approved by the French Autorité des Marchés Financiers under number 07-180. Copies of the French prospectus are available in France from Veolia Environnement or from authorized financial intermediaries. The French prospectus contains a section that describes certain risk factors that investors should take into account before making any investment decision.

The offer and sale of the securities described in this document may be restricted by law or regulation. No offer will be made in any jurisdiction or to any person except under circumstances in which such offer may lawfully be made.

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.


Further profitable growth in the first half of 2007


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First half of 2007Confirmation of profitable growth and of the growth model

Strong revenue growth

Further improvement in operating income

Significant increase in recurring net income

Strengthened balance sheet: launch of a €2.6 billion capital increase on June 12th (1)

(1) Cash effect in the second half of 2007


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0

100

200

300

400

500

H1 2005 Adjusted H1 2006 Adjusted H1 2007

Further growth (€ million)

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000


0

500

1 000


Consolidated revenue (3) Operating income

13,94115,462 1,272

1,129

(1) At constant exchange rates (2) Excluding impact of weather conditions and decline in energy prices: +12.2% at current exchange rate.(3) Revenue from ordinary activities

12,245966

+13.0% (1)

+13.1% (1)

+11.6% (1) (2)

+15.6% (1)

Recurring net income

482

381325

+17.1%

+26.6%

0

500

1 000

H1 2005 Adjusted H1 2006 Adjusted H1 2007Recurring operating income

1,236 1,129

962

+9.8% (1)

+16.2% (1)


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Revenue (1) 13,941 15,462 +10.9%

Cash flow from operations (2) 1,910 2,012 +5.4%

Operating income 1,129 1,272 +12.7%

Recurring operating income 1,129 1,236 +9.5%

Recurring net income 381 482 +26.6%

Net income after minority interest 445 493 +10.9%

Net financial debt 14,675 15,200 -

Key figures at June 30, 2007

06/30/06 adjusted

06/30/07€ million Growth

(1) See definition page 6(2) Operating cash flow: Cash flow from continuing operations before tax and financial expense.(3) At 12/31/2006

(3)


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2,7242,347

3,3213,245

4,1963,548

5,2214,801

WaterWasteEnergy ServicesTransportation

06/30/2006Adjusted

06/30/2007

Consolidated revenue (1) in H1 2007: €15,462m(1) See definition page 6(2) Excluding impact of variation of energy prices: +7.9%

Breakdown of revenue(1) by division

€ million

Current exchangerates

VE Group +10.9%

+9.4%

+19.9% +2.1%

+17.1%

Constantexchange rates

+11.6%

+8.8%

+18.3% +2.3%

+16.1%

(2)


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+5.4%+17.0%

+7.3%+33.0%+25.6%

1,385

7,036

1,392

5,3794,571

6,677France Europe ex FranceNorth AmericaAsia/PacificRest of the world

06/30/2006Adjusted

06/30/2007

Consolidated revenue (1) in H1 2007: €15,462m(1) See definition page 6

Breakdown of revenue (1) by geographic region

€ millionConstant

exchange rates

VE Group +10.9% +11.6%

762539

1,002660

Currentexchange rates

+5.4%+17.8%

-0.5%+31.5%+22.6%


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France: revenue up 5.4% to € 7,036m

FRANCE

Leslys (transportation) - Length: 30 years – Cumul. revenue: €459m

Lafarge Ciments (transportation)- Freight train between Bordeaux & Toulouse - Length: 4 years – Cumul. revenue: €10m

SNCM (transportation) - Length: 6.5 years – Cumul. revenue: €1bn

City of Cognac – Euro 4 standards, biofuels reduced noise during collection of bins (waste)

Greater Mâcon region (water & wastewater) (water) - Length: 10 years – Cumul. revenue: €57m

Abbeville (water) – Length: 15 years – Cumul. revenue: €21m Gonesse (water) – Length: 15 years – Cumul. revenue: €27m Sainte-Maxime (water) – Length: 12 years – Cumul. revenue: €32m Samoëns (WWTP construction) (water)

- Cumul. revenue: €9m Avranches (WWTP construction) (water)

- Cumul. revenue: €7m Le Touquet (WWTP construction) (water)

- Cumul. revenue: €6m Lille urban community – Organic recovery center – Séquedin (energy) –

Length: 11 years – Cumul. revenue: €7m STMicroelectronics - Crolles (energy)

- Length: 6 years – Cumul. revenue: €27m Charleville-Mézières – DSP (energy)

- Length: 20 years – Cumul. revenue: €41m Cap d'Agde – DSP (energy)

- Length: 18 years – Cumul. revenue: €41m Renault - sites of Boulogne-Billancourt, Plessis-Robinson,

Guyancourt & Rueil-Malmaison (multi-services) - Length: 5 years – Cumul. revenue: €600m

Contract start-up Contract won or renewed Company acquisition Partnership with other companies

Lafarge Ciments

SNCM

Leslys

Renault

Cognac

Mâcon

Abbeville

Ste- Maxime

Samoëns

Avranches

Le Touquet

Gonesse

Lille

Charleville-Mézières

ST Micro

Cap d'Agde


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SinescoPannon Power

HungariaHungaria

Brussels North (BOOT) - (water) – Operating period: 20 years – Cumul. revenue: €992m (excl. construction)

De Lijn (transportation) – Length: 5 years – Cumul. revenue: €165m

GERMANY

Finnmark (transportation) – Length: 8 years – Cumul. revenue: €168m Rogaland (transportation) – Length: 5.5 years – Cumul. revenue: €226m

NORWAY

SLOVAKIA

TMT (waste) – 2006 revenue: €97m STMicro – Agrate (energy) – Length: 6 years – Cumul. revenue: €20m

SULO (waste) – 2006 revenue: €1.3bn

(1) At constant exchange rate

BELGIUM

THE NETHERLANDS The Hague – Harnaschpolder plant (DBFO)(water)

- Global operating period: 30 years – Global cumul. revenue: €1.5bn Brabant (transportation) – Length: 8 years – Cumul. revenue: €480m

Contract start-up Contract won or renewed Company acquisition

HUNGARY Pannon Power - biomass (energy) – Cumul. revenue: €600m Sinesco (energy) – 2007 estimated revenue: €29m

Espool - Lucenec & Rekotak – Bratislava (energy) - Espool: current length of contracts: 30 years – Cumul. revenue: €300m- Rekotak: current length of contracts: 29 years – Cumul. revenue: €160m

United KingdomUnited KingdomLondon Borough of Lambeth

Southwark

IRELAND Limerick (DBO) (water)

– Operating period: 20 years – Cumul. revenue: €71m (incl. construction)

GermanyGermany

SULO

BULGARIA Toplofikacja Varna EAD (energy) – Annual revenue: €8m

SPAIN Maresme (DBO) (waste)

– Operating period: 15 years – Cumul. revenue for consortium: €440m Campos de Dalias (DBO) (water)

– Operating period: 15 years – Cumul. revenue: €78m (incl. construction)

Limerick

IrelandIreland

Europe (outside France): revenue up +17% (1) to €5,379m

London Borough of Lambeth (waste) – Length: 7 years – Cumul. revenue: €156m Southwark Council - VES selected as « preferred bidder » (waste) – Length: 25 years

UNITED KINGDOM

The NetherlandsThe Netherlands

BrabantThe Hague

LucenecBratislava

SlovakiaSlovakia

Maresme

Campos de Dalias

SpainSpain

ITALY


TMT

ItalyItaly

ST Micro

Relations Investisseurs – Résultats semestriels 2007

NorwayNorway

Finnmark

Rogaland

BelgiumBelgiumBrussels

De Lijn

VarnaBulgariaBulgaria


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NORTH AMERICA

Tampa Bay (DBO)(water)- Operating period: 13 years – Cumul. revenue: €119m (incl. construction)

Pinellas county (waste)- Length: 17 years – Cumul. revenue: €467m (incl. construction)

US Army (waste) – Cumul. revenue: €37m

Thermal North America, Inc. (energy) – 2007 estimated revenue: €319m

Marisol (waste) – 2006 revenue: €18m Ecolocycle Inc. (waste) Partnership with Beacon Landfill Gas Hdgs LLC (waste)Partnership with Enpar Technologies (water)

North America: revenue up 7.3% (1) to €1,385m

CanadaCanada

United StatesUnited StatesEcolocycle

Pinellas

Tampa Bay

US Army

Marisol

Enpar

Beacon

TNAI


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Contract start-up Contract won or renewed Company acquisition

Lanzhou (water) - Length: 30 years – Cumul. revenue: €1.6bn

Haikou (water)- Length: 30 years – Cumul. revenue: €780m

Jiamusi (energy) - Length: 25 years – Cumul. revenue: €650m Harbin (energy) – 2007 estimated revenue: €19m Cleanaway Asia (waste)

– Current length of contract: 22 years – Cumul. revenue: €200m

JapanJapan

Chiba

CHINA

Bali – Taipei County (waste) - Length: 15 years – Cumul. revenue in JV: €154m

TAIWAN

Seoul (transportation) – Length: 10 years – Cumul. revenue: €507m Soonchunhyang teaching hospital (energy)

– Length: 5 years – Cumul. revenue: €11m

SOUTH KOREA

Sydney (DBO) (water) – Operating period: 20 years – Cumul. revenue: €570m (incl. construction)

Gold Coast (DBO) (water) – Operating period: 10 years – Cumul. revenue: €210m

Melbourne (transportation) – Length: 1 year – Cumul. revenue: €422m Transit First & Brookers (transportation) – 2007 estimated revenue: €11m

AUSTRALIA

Chiba (water)– Length: 3 years – Cumul. revenue: €18m

JAPAN

Kranji (construction) (water) – Cumul. revenue: €8m Cleanaway Asia (waste)

– Current length of contracts: 22 years – Cumul. revenue: €715m

SINGAPORE

Asia – Pacific: revenue up 33% (1) to €1,002m

Taiwan

Bali

KranjiSingaporeSingapore

Cleanaway Asia

South KoreaSouth Korea

SeoulSoonchunhyang

Haikou

ChinaChina

Jiamusi

Harbin

Lanzhou

Cleanaway Asia

AustraliaAustralia

Transit First

Brookers

SydneyGold Coast

Melbourne


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Sûr (BOO) (water) – Length: 22 years – Cumul. revenue: €434m (incl. construction)

SULTANATE OF OMAN

SAUDI ARABIA

Partnership with Arcapita (energy)

KINGDOM OF BAHRAIN

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

Marafiq – Jubail & Yanbu (construction) (water) – Cumul. revenue: €702m

Saudi ArabiaSaudi Arabia

Marafiq

Kingdom of BahrainKingdom of Bahrain

Arcapita

Sultanate of OmanSultanate of Oman

Sûr


MAURITANIA

Nouakchott (water) – Cumul. revenue: €200m

MauritaniaMauritania

Nouakchott


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H1 2007 H1 2007

Operating income up 13% (1)

Margin Operating income

∆ current exch.

H1 2006 adjusted

H1 2006 adjusted

(1) At constant exchange rates

€ million

Water 527 576 +9.4% 11.0% 11.0% Waste 307 389 +26.6% 8.7% 9.3% Energy services 267 260 -2.6% 8.2% 7.8% Transportation 74 73 -0.9% 3.2% 2.7% Holding (46) (26) - - -

Total Group 1,129 1,272 +12.7% 8.1% 8.2%

Operating income


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H1 2007 H1 2007

Recurring operating income up 9.8% (1)

Margin Recurring operating income

∆ current exch.

H1 2006 adjusted

H1 2006 adjusted


€ million

Water 527 574 +9.1% 11.0% 11.0% Waste 307 389 +26.6% 8.7% 9.3% Energy services 267 251 -5.9% 8.2% 7.6% Transportation 74 48 -35.4% 3.2% 1.8% Holding (46) (26) - - -

Total Group 1,129 1,236 +9.5% 8.1% 8.0%

Recurring operating income


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Operating income: contribution by division

Operating income: €576 million, up 9.4% at current exchange rates Recurring operating income €574 million, up 9.1% at current exchange rates

Satisfactory performance in operating results in France, in distribution (cost-cutting drive) and in Works.

In Europe, further improvement in results in the Czech Republic. Good results in Asia and performance on recent contracts consistent with the

original business plans (higher contribution from Shenzhen and increasing contribution of Kunming, Urumqi, Changzhou, etc.) and in Morocco.

One-off problems encountered in Gabon (power production disrupted by a lack of water (and thus low hydraulic capacity) in the last few months, while waiting for gas power production capacity).

Further improvement in operational profitability at Veolia Water Solutions & Technologies.


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Operating income: €389 million, up 26.6% at current exchange ratesRecurring operating income €389 million, up 26.6% at current exchange rates

In France: significant growth in operating income due to the combined impact of continual productivity improvements and of the rise in volumes treated (in both household waste and hazardous waste).

In Europe: sharp rise in operating income (full effect of the acquisition of Cleanaway and good performances of the Sheffield and Nottinghamshire integrated contracts) in the United Kingdom and satisfactory contribution of Scandinavian countries.

United States: improvement in profitability of hazardous waste operations and strong activity in industrial services businesses. Continued good level of profitability in solid waste.

Asia-Pacific: gradually increasing contribution of recent business development (Foshan, Likeng and Puxi) and increase in results at technical landfills in Australia.


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Operating income: €260 million, down 2.6% at current exchange ratesRecurring operating income €251 million, down 5.9% at current exchange rates

Negative impact of €39 million on operating income due to variation in climate.

Outside France: negative impact due to the weather in Central Europe offset by good business growth and by positive price effects (heating and electricity in the Czech Republic, Poland and Slovakia).

Lower contribution from the sales of surplus CO2 emission rights than the year ago period.



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Operating income: €73 million, down 0.9% at current exchange ratesRecurring operating income €48 million, down 35.4% at current exchange rates (1)


In France: good profitability in inter-urban businesses and in the Greater Paris area and confirmation that the SNCM’s Public Service Delegation (DSP) had been granted. Positive impact on operating income.

Outside France: profitability hurt by the start-up and renewal of two contracts in the

Netherlands. Turnaround underway in the transit business in the United States;

improvement in Scandinavia and in Central Europe confirmed and turnaround in the business related to the Marschbahn rail contract in Germany.(1) Operating income at June 30, 2006 included the positive impact for the EBRD’s investment in the capital of VTCE for €18.7 million


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Water 826 867 +5.0% Waste 562 678 +20.6% Energy services 393 359 -8.6% Transportation 150 129 -14.0% Other (21) (21) -

Total cash flow from operations 1,910 2,012 +5.4%

06/30/06 adjusted

06/30/07

€ million

Growth in cash flow from operations

∆ current exch. H1 2007/H1 2006

Cash flow from operations


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Revenue 13,941 15,462 +10.9% Operating income 1,129 1,272 +12.7%

Cost of net financial debt (329) (392) Other financial income and expenses (20) (11) Income tax (254) (235) Equity in net income of affiliates +4 +10 Net income attributable to minority interests (135) (143)

Net income from continuing activities after minority interests 395 501 +26.8%

Net income from discontinued operations 50 (8)

Net income 445 493 +10.9% Recurring net income 381 482 +26.6%

From revenue (1) to net income

∆06/30/0706/30/06

06/30/06 adjusted

06/30/07

€ million

(1) See definition page 6


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Borrowing costs

Cost of net financial debt (329) (392) (63)

of which variation of net debt - - (40)

of which impact of rates - - (23)

€ million

Cost of borrowing: 5.27% vs. 5.07% at December 31, 2006

06/30/06Adjusted

06/30/07 ∆06/30/0706/30/06


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From recurring net income to net income

Recurring net income 381 482

Income from discontinued activities Southern Water disposal 54 - Disposal of Transportation division in Denmark (4) (8)

Taxes 14 - Miscellaneous - 19

Net income 445 493

€ million 06/30/06 adjusted

06/30/07


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Targeted capital expenditures

€ million Mainte-nance

Growth Comments

New major

projects

Financial operating

assets

Total

Financial including

scope changes

Industrial New major

projects

Water 230 3 160 54 Haikou (China) and BOT Oman

94 541

Waste 281 12 41 110 Various projects in North America (Marine Services Equipment, Ecolocycle Inc., haz. waste) and Cleanaway Asia

8 452

Energy services

132 49 43 141 Pannon and Sinesco (Hungary), Kolin (Czech Republic)

11 376

Transport 97 25 55 139 (SNCM, various acquisitions, etc.)

19 335

Other 2 4 5 - - 11

06/30/2007 742 93 304 444 132 1,71506/30/2006

Adjusted

550 64 244 338 169 1,365


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Strong attention to management of capital

Control of working capital requirement

Increase in maintenance capital expenditures linked to the growth in revenue (maintenance capex / revenue = 4.8%)

Continued active asset management (€181m in disposals)

Over €400 m in free cash flow before new major projects


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Cash flow from operations 1,913 2,009

Repayment of operating financial assets +243 +176

Investments (1,027) (1,271)Change in WCR (296) (246)Asset disposals +226 +181Rights issue reserved for minority shareholders +60 +15Tax paid (161) (140)Interest paid (313) (320)Other +10 +9

= Free cash flow before major new projects = 655 = 413

Cash flow statement

€ million H1 2006Adjusted

H1 2007


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

Free cash flow (655) (413) Investments in new major projects +338 +444 Dividends paid +414 +501 Impact of exchange rates and other (150) (7)

Net financial debt at June 30th 13,818 15,200

Change in debt (53) +525

Change in net financial debt at June 30, 2007

€ million

H1 2007H1 2006Adjusted


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Debt ratios (1)

(1) 12-month moving average ratios

€ billion

Net financial debt_ Net financial debt / (cash flow from operations + repayment of

operating financial assets)

Debt ratio target: between 3.5x and 4x

12

12,5

13

13,5

14

14,5

15

June 30, 06 Dec. 31, 06 June 30, 073

4

3.3x

3.4 x3.5 x

13.8

14.7

15.2


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Structure of the debt (1)

By currency (Gross debt

after hedging)

Floating rate 26%

Fixed rate 74%

(1) After taking into account the €2.6 billion capital increase completed on July 10, 2007.

Euro 69%

US$ 8%

GBP 9%

Others 14%

By type of rate (Net debt after hedging)


STRATEGY & OUTLOOK


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In the Water sector In France: new services related to heightened regulations and consumer concerns (pollutants, rain and bathing water,

independent wastewater system, etc.); In Europe

In the North (United-Kingdom), increase of non regulated services In Central and Eastern Europe: commitments by new EU member countries to meet existing levels of quality (increasing use of contracting

out in the Czech Republic, Hungary, etc.), upgrading of water management systems in large cities for future member countries. In the South, acceleration of desalination activities in Spain.

In the Waste sector In France: new European recycling directive, development of renewable energies and curbing of greenhouse gases; In the United Kingdom: consolidation of the sector (Cory and Waste Recycling Group were sold in 2006), growth in the

UK market higher than 6% per year; In Germany: market has stabilized and is open to competition, development platform for Central Europe; In Italy: development of treatment infrastructure, optimization of green energy production.

In the Energy sector Development of renewable energies (biomass, solar and geothermal), Privatization of urban heating networks in Central and Eastern Europe. Services provided for our large industrial clients as they develop overseas.

In the Transportation sector Opening of the urban and interurban passenger transportation market in Europe; Development of services for industrial clients and local communities:

in rail with the opening of the European rail freight market (CMA CGM partnership), boom in the market of Public-Private Partnerships; in maritime, passengers transportation (SNCM).

Significant growth potential in fast-growing markets: in Europe


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Significant growth potential in fast-growing markets: in North America, Asia-Pacific and the Middle East

In the Water sector In North America: potential development in the medium-term in contracting out public services (including Tampa Bay in

Florida in 2007);

In Asia-Pacific: in China due to the growth in the country’s cities, in South Korea due to robust industrial demand for the management of the process water and effluents cycle, in Australia due to desalination and wastewater recycling projects because of the drought and in Japan owing to the opening of the market to private operators;

In the Middle East: development in the construction of plants and in water management services related to population growth and water stress for municipalities and industrial clients.

In the Waste sector In Asia-Pacific: in China demand for infrastructure owing to the country’s economic growth;

In the Middle East: for infrastructure related to growing urbanization;

In the Energy sector In North America: energy and environmental optimization of urban heating and cooling networks in the United States

and in Canada, participation in the implementation of the policy aimed at curbing greenhouse gas emissions;

In Asia-Pacific: in China, opportunities stemming from the government’s proactive stance aimed at lowering pollution and halving SO2 emissions before 2010.

In the Transportation sector In North America: transportation on demand, development of clean vehicles powered by gas or other alternative

energies (biofuels or electric power);

In Australia: development in new value-added services.


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Successful integration of Cleanaway UK

Veolia Environmental Services clearly reinforces its leadership position in the UK waste management market:

Market share doubled (15%) in waste management in the UK with 2007 expected revenue in excess of €1.6 billion Internal growth in H1 2007 topped 11% Higher annual growth forecast than for the market

Improvement of the platform for the national management of household and industrial waste

The dry waste reclamation business has doubled Increase in recycling capacity Significant increase in high-temperature incineration treatment capacity

Substantial cost synergies achieved ahead of the budget at mid-year Synergies achieved since the start of the year Expected annual savings: €38 million before tax (in full year 2009) made in purchasing, logistic

improvements and streamlining depots and overheads

Stronger position to win key PFI contracts in integrated waste management Southwark County has awarded preferred bidder status to Veolia Environmental Services for the

Southwark PFI contract (25-year contract to begin in October 2007)


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Amount in enterprise value

(€ million)

Market share after acquisition

More than €3.2 billion in significant external growth opportunities since June 2006 in our priority development zones

DivisionGeographic location

(1) Amount estimated after disposal of stake in Sulo Technology (bins manufacturer) to Plastic Omnium(2) On the basis of the current price: €1 = $1.35(3) Of the heating and cooling network markets(4) Of the incineration market

Total €3,227 million

United Kingdom Waste 859 15% (versus 7%) Water 136 -

Germany Waste 1,310 11% (versus 0%)

North America Energy 584 10% (versus 0%) (3)

Italy Waste 338 28% (versus 6%) (4)

(1)

(2)


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4 significant and value-creating acquisitions announced since the beginning of the year

Germany: press release dated April 27, 2007 Sulo, n°2 in waste treatment (€1.3 billion revenue)

Closing on July 2, 2007 Enterprise value: €1,310 million (estimated amount after Sulo Technology’s disposal (bin

manufacturers) to Plastic Omnium) Disposal on July 29, 2007 of Sulo Environmental Technology to Plastic Omnium (revenue close to

€200 million)

Italy: press release dated May 31, 2007 TMT, the largest private operator in the thermal waste treatment market in Italy (estimated

2011 revenue: €200 million) Closing scheduled for the fourth quarter of 2007 Enterprise value: €338 million Acquisition will be earnings-enhancing in 2008

North America: press release dated June 12, 2007 TNAI, the largest portfolio of district heating and cooling networks in the U.S.

Closing scheduled for late 2007 Acquisition cost: $788 million Acquisition will be earnings-enhancing as early as 2008

United Kingdom: press release dated August 9, 2007 Several non-regulated activities from Thames Water

Closing scheduled for end of 2007 Enterprise value: €136 million 2008 (e) revenue: €160 million


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Objectives

For 2007 Growth in total revenue to exceed 12% Similar increase in operating income Investments net of disposals expected to range between €6 billion and €6.5 billion

Medium-term 2007-2009 objectives: robust growth Average annual revenue growth in excess of 10% Overall investment budget of €15-20 billion Investment criteria to be maintained: IRR ≥ Wacc +3% After-tax ROCE: 10% (excluding the potential effect related to the schedule of

acquisitions) Maintain commitment to a sound balance sheet: net financial debt/(cash flow from

operations + repayment of operating financial assets) ranging between 3.5x and 4x Beyond 2007, the Company will maintain its dividend payout policy: the payout ratio is to

range between 50% & 60% of recurring net income


APPENDICES


39


Estimated proforma 2007 revenue (1) by geographic region:strategic reinforcement in fast-growing markets

2004 revenue (2) of Veolia Environnement

Group

France 51%Germany 6%

North America 9%

Asia 2%Rest of the world 4%

United Kingdom 7%

Rest of Europe 18%

Pacific 3%

Estimated proforma 2007 revenue (1) of VE Group after acquisition of Sulo, TNAI & TMT

Asia 3%

France 43%

North America 10%

Rest of the world 4%

United Kingdom 9%Germany 10%

Rest of

Europe 18%

Pacific 3%

(2) Under IFRS with application of IFRIC 12 on concessions

Proforma 2007 CAGR (1)

2004

France

+8%

United Kingdom

+21%

Germany

+37%

Rest of Europe

+13%

North America

+19%

Asia

+28%

Pacific

+18%

Rest of the world

+13%

(1) Assuming a full-year contribution from Sulo, Thermal North America, Inc. & TMT in proforma 2007 revenue


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Estimated proforma 2007 revenue (1) in full year by division

2004 revenue (2) of Veolia Environnement Group

Water 35%

Estimated proforma 2007 revenue (1) of VE Group after acquisition

of Sulo, TNAI & TMT

Waste 28%

Energy services 22%

Transportation 15%

Water 32%

Waste 29%

Energy services 23%

Transportation 16%

(2) Under IFRS with application of IFRIC 12 on concessions

(1) Assuming a full-year contribution from Sulo, Thermal North America, Inc. & TMT in proforma 2007 revenue


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H1 2007

Recurring operating income up 9.8% (1)

∆ current exch.

H1 2006 adjusted


€ million

Water 527 574 +9.1% +9.1% Waste 307 389 +26.6% +28.3% Energy services 267 251 -5.9% -6.4% Transportation 74 48 -35.4% -35.8% Holding (46) (26) - - -

Total Group 1,129 1,236 +9.5% +9.8%

Recurring operating income

∆ constant exch.


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Leading presence in robust desalination market

Extensive contract experience Over 100 years of experience in desalination Built and/or operate approximately 13% of the world’s

desalination capacity (1,600 plants with a capacity of5.3 million m3/d)*

Chosen to design and build the world’s largest MED desalination plant in Saudi Arabia’s Jubail Industrial City and Eastern Province (800,000 m3//d capacity)

Built and operate the largest reverse osmosis plant in the world in Ashkelon, Israel (320,000 m3/d capacity)

Estimated 80% market share in MED

*Global Water Intelligence “Desalination Markets 2007” estimate of global desalination capacity.

With technology leadership Leading process technologies and solutions in both Thermal and Reverse Osmosis Focus on process and application technology (e.g. ARAMIS – Veolia’s membrane expertise center

determining appropriate application through performance testing, diagnostic aging properties, deposits identification and determination of pretreatment solutions)

And operating in a robust market Expected growth rate for new capacity worldwide is expected to increase from 39.9 million m3 / day at start

of 2006 to 97.5 million m3 / day by 2015* The “Gulf” countries represent approximately 46% of existing capacity today Saudi Arabia and UAE are the two largest markets today followed by USA, Spain and China Continued trend towards larger scale plants in both membrane and thermal desalination Main competitors: Doosan (Korea), Impreglio (Italy), GE, Suez and Abengoa/Befesa (Spain)

Ashkelon Desalination Facility


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Nathalie Pinon, Head of Investor Relationsand Financial Communication

38 Avenue Kléber – 75116 Paris - FranceTelephone +33 1 71 75 01 67

Fax +33 1 71 75 10 12e-mail [email protected]

Brian Sullivan, Vice President, US Investor Relations700 E. Butterfield Road -Suite 201

Lombard, IL 60148 - USATelephone +1 (630) 371 2749

Fax +1 (630) 282 0423e-mail [email protected]

Web site : http://www.veolia-finance.com

Investor Relations contact information

mailto:[email protected]

mailto:[email protected]

Business

2007, First Half Results