Special Presentation Germany, April 2003

Germany, April 2003 1


Important Important Legal DisclaimerLegal 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 risk that changes in energy prices and taxes may reduce Veolia Environnement's profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement's 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 Environnementmay 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.


Table of Contents Table of Contents

1/ 2002 : A decisive year

2/ A strong business model

3/ Improving credit profile


1/ 2002 : A 1/ 2002 : A decisive yeardecisive year

Successful finalisation of the spin off from VU :A new corporate governance will be subject to approval of

shareholder meeting of April 30, 2003

Solid results despite a difficult environment


“Shareholder”“Shareholder” : : the contagion risk has been removed by the the contagion risk has been removed by the completion of the “completion of the “spin off” spin off” from VUfrom VU

“Sector” “Sector” : : The Latin America risk and the crisis in the Energy sector The Latin America risk and the crisis in the Energy sector are 2 nonare 2 non--issues for the Group. As world leader in Environmental issues for the Group. As world leader in Environmental Services VE is able to generate FFO, even in a difficult economServices VE is able to generate FFO, even in a difficult economic ic climateclimate

“Liquidity” :“Liquidity” :CashCash--flow generation up significantlyflow generation up significantlyDecrease in net indebtedness : from 14.2 €Decrease in net indebtedness : from 14.2 €bnbn to 13.1 €to 13.1 €bnbnStrong improvement in [net debt / EBITDA] ratio from 4 to 3.4Strong improvement in [net debt / EBITDA] ratio from 4 to 3.4Strengthening of financial flexibility by better covenant levelsStrengthening of financial flexibility by better covenant levels, , elimination of all ratings triggers and improvement in liquidityelimination of all ratings triggers and improvement in liquiditypositionpositionPension schemes : no key issuePension schemes : no key issue

2002 : 2002 : thethe Group has Group has overcomeovercome 3 3 stress stress scenariosscenarios


Strong Shareholder structureStrong ShareholderStrong Shareholder structurestructure

Identified investorsIdentified investors: :

NB : EDF NB : EDF ownsowns 34% of 34% of DalkiaDalkia

Vivendi Vivendi Universal Universal 20.4%20.4%

FloatFloat 49.0%49.0%

Identified investors Identified investors 30.6%30.6%

State Owned Companies (12,8%) Insurance Companies and others (10,7%) Relationship Banks (7,1%)

CDC Groupama BNP Paribas

Eurazeo

Electricité de France (EDF)

Groupe AXA Société Générale

Wasserstein Family Trust

Caisse Nationale des Caisses d'Epargne Assurances Générales de France Crédit LyonnaisGroupe CNP

Médéric Prévoyance Crédit Agricole IndosuezGenerali Crédit Mutuel CIC

DexiaNatexis


2/ A 2/ A strong strong business model :business model :

Our Our strategy is clear and unchangedstrategy is clear and unchanged : VE : VE isis not a «not a « multimulti utilityutility » but » but remainsremains focussedfocussed on one business : on one business : environmentalenvironmental services. services.

VE is not only one of the largest VE is not only one of the largest but also the only “pure” playerbut also the only “pure” player


A key competitive advantage : 5 brands A key competitive advantage : 5 brands with a strong leadership on their marketswith a strong leadership on their markets

No.1 worldwide : No.1 worldwide : Municipal and industrial water and wastewater Municipal and industrial water and wastewater treatment and servicestreatment and servicesResidential and commercial treatment and servicesResidential and commercial treatment and services

Water

No. 1 in EuropeNo. 1 in EuropeNo. 3 worldwideNo. 3 worldwide

Collection and servicesCollection and servicesDisposal and treatment Disposal and treatment (solid, liquid, hazardous waste)(solid, liquid, hazardous waste)

Waste

No. 1 in Europe for heatingNo. 1 in Europe for heatingEnergy managementEnergy managementIndustrial utilitiesIndustrial utilitiesFacilities managementFacilities management

EnergyServices

No. 1 Private in EuropeNo. 1 Private in EuropePrivate and public passenger transportationPrivate and public passenger transportationRail, buses and othersRail, buses and others

Transport

Environmental services in Spain (FCC)Environmental services in Spain (FCC)Joint venture VE / FCC in Latin America Joint venture VE / FCC in Latin America ((ProactivaProactiva))

FCC


Continued execution Continued execution of of strategystrategyConfirmed business model

The pure player in environmental servicesThe pure player in environmental services4 4 complementarycomplementary divisionsdivisions

WaterWaterWasteWasteEnergy servicesEnergy servicesTransportationTransportation

Secure geographical coverageSecure geographical coverageOver 95% of revenue generated in developed countries with Over 95% of revenue generated in developed countries with stable political and monetary systemsstable political and monetary systemsGrowth ensured by a balanced customer mix (municipalities Growth ensured by a balanced customer mix (municipalities ~65% of revenue; manufacturing and s~65% of revenue; manufacturing and service ervice customers ~35%)customers ~35%)Positions in highPositions in high--potential markets such as waterpotential markets such as waterRecurring future cash flows and undergoing growth: Recurring future cash flows and undergoing growth: strengthened additional order backlog (€strengthened additional order backlog (€30 30 billion in 2002)billion in 2002)Organic growthOrganic growth, no major acquisition , no major acquisition requiredrequired


RevenueRevenueRevenue from core businessesRevenue from core businessesEBITDAEBITDAEBITDA from core businessesEBITDA from core businessesEBITEBITEBIT from core businessesEBIT from core businessesNet incomeNet incomeRecurring net incomeRecurring net incomeRecurring net income per share (in €)Recurring net income per share (in €)Dividend (in €) Dividend (in €) (1)(1)

Dividend pay out ratioDividend pay out ratioNet debt Net debt

In In €€ mm

2002 2002 keykey figuresfigures

Dec.31, 02Dec.31, 02 Dec. 31, 01Dec. 31, 01

(1)(1) excluding tax credit and subjectexcluding tax credit and subject to to thethe approvalapproval of of thethe ShareholdersShareholders Meeting on Meeting on AprilApril 3030

29,12729,12726,51326,513

3,7603,7603,4803,4802,0132,0131,8131,813

(2,251)(2,251)4204201.201.200.550.5546%46%

14,28314,283

30,07930,07928,07328,073

3,8873,8873,7273,7271,9711,9711,8471,847

3393394294291.161.160.550.5547%47%

13,06613,066

Number of shares: 405,070,459Number of shares: 405,070,459Average number of shares in 2002: 370,213,187Average number of shares in 2002: 370,213,187

+5.9%+5.9%

+7.1%+7.1%

+1.9%+1.9%

+7.2%+7.2%

+8.0%+8.0%

+3.2%+3.2%

2002/2001

Exchange rateCurrent Constant


55% of 55% of corecore revenue revenue outsideoutside France but France but low low exposure exposure to to emergingemerging countriescountries

AsiaAsia 2%

FranceFrance45%

Rest of Europe Rest of Europe 35%

North America North America 12%

≤ 10 % of revenue in countries rated ≤ A-

Latin America Latin America 2%

OtOtherher 2%AustraliAustraliaa 2%


2002 : A sharp improvement of cash flows in a secured low risk market

High predictability in cash flows

Secured by a total backlog of more than 10 years revenue

Low risk profile

Sensitivity to trade cycles further reduced through 2002 disposals

No exposure to electricity prices and power cycles

No energy trading activity

Low customer risk

Low country risk


In In €€mm

2002 : VE has self2002 : VE has self--financed its growthfinanced its growthCash Cash flow generationflow generation up up significantlysignificantly : +36%: +36%

2001200120022002

2,4552,455(1,382)(1,382)

1,0731,073(2,670)(2,670)

598598(460)(460)

437437

(1,022)(1,022)411411

(484)(484)

(1,095)(1,095)(13,187)(13,187)(14,283)(14,283)

Cash flow from operations (FFO)Cash flow from operations (FFO) +13%+13%Maintenance capital expenditureMaintenance capital expenditure

Cash flow available before growth Cash flow available before growth ((operoper. FCF). FCF) +36%+36%Capital expenditure for growthCapital expenditure for growthDisposal of assetsDisposal of assetsChange in scope of consolidationChange in scope of consolidationChange in working capital requirementChange in working capital requirement

Cash flow before financial transactionsCash flow before financial transactionsChange in capitalChange in capitalImpact of exchange rate, dividends and otherImpact of exchange rate, dividends and other

Cash flow for the year after capital increaseCash flow for the year after capital increaseNet debt at start of year 2002Net debt at start of year 2002Net debt at end of year 2002Net debt at end of year 2002

2,7802,780(1,323)(1,323)

1,457 1,457 (2,415)(2,415)

1,7711,771(525)(525)(464)(464)

(176)(176)1,5541,554(161)(161)

1,2171,217(14,283)(14,283)

(13,066)(13,066)

(2)(2)

(1)(1) IncludesIncludes €223m €223m increase relatedincrease related to to thethe reductionreduction in in thethe French French securitization programsecuritization program(2)(2) IncludesIncludes €815m €815m reduction relatedreduction related to to thethe introduction of introduction of thethe French French andand US US securitization programsecuritization program

(1)(1)


In €mIn €m

0

500

1000

1500

2000

2500

3000

20002000 20012001 20022002 20002000 20012001 20022002

Net debt / EBITDA (x)

+32%+92%

Profitable growth : FFO +32% in 2 years at 2.7 bn; Operating FCF (before growth) : 1.4 bnProfitable Profitable growth growth : FFO +32% in 2 : FFO +32% in 2 years at years at 2.7 bn; 2.7 bn; Operating FCF (Operating FCF (before growthbefore growth) : 1.4 bn) : 1.4 bn

FFO FFO Operating FCFOperating FCF

4

3.9

3.8

3.7

3.6

3.5

3.4

3.3

3.2

3.1

3.0

2002: 3.4 (x)2001: 3.8 (x)2000: 4.0 (x)2,1002,100

2,4552,455

2,7802,780

758758

1,0731,073

1,4571,457


5,0%

5,5%

6,0%

6,5%

7,0%

7,5%

8,0%

8,5%

23 000 25 000 27 000 29 000 31 000 33 000 35 000 37 000

2002

CA 2005 : +4% CAGR

CA 2005 : +8% CAGR

Key indicator: ROCEKey indicator: ROCE

2005 2005 targetstargets for for growth andgrowth and ROCEROCE

Core Core business revenuebusiness revenue

RO

CE

RO

CE

In In €€mm

ROCE is a key indicator to « fine tune » balance between growth and FCFROCE ROCE isis a a keykey indicatorindicator to «to « fine tunefine tune » » balance balance between growth andbetween growth and FCFFCF


Average revenue growth in core businesses of Average revenue growth in core businesses of 44––8% per year from 2002 to 20058% per year from 2002 to 2005

Improved profitability: increase in ROCE Improved profitability: increase in ROCE for for each each division, division, based on: based on:

Maturation of contracts signed since 1999Maturation of contracts signed since 1999Productivity improvement effortsProductivity improvement efforts

Implementation of synergiesImplementation of synergiesSelective investment policySelective investment policyActive management of asset portfolioActive management of asset portfolio

Industrial flexibility is strong : VE can afford to balance growth / FCF


3/ 3/ Improving creditImproving credit profileprofile

Success in 2002:Strengthening of financial flexibility

2003 Target:To extend debt maturityusing the bond markets


DecreaseDecrease of Gross of Gross Debt andDebt and Net Net DebtDebt

In €m

BondsOther LT debt

Short term debt

Gross Debt

LT financial assetsST financial assetsMarketable securities

Cash

Net Debt

2002

5 6347 2793 796

16 709

512488

2612 382

13 066

2001

5 1947 9405 576

18 710

342986

3242 776

14 287

Variation

440- 661

- 1 780

- 2 001

170- 497

- 63- 394

- 1 217

(1) Total : 2 643 €m(1) Total : 2 643 €m

(1)(1)

(1)(1)


20032003268268

268268

LT LT debt schedule debt schedule 31/12/200231/12/2002Average debt maturity ~ 4 years

0

500

1000

1500

2000

2500

3000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

> 2014

In € mIn € mBondsBonds 5.7 billion €5.7 billion €LT LT Bank Debt Bank Debt 7.4 billion €7.4 billion €

BondsBonds

Syndicated LoansSyndicated LoansBerlin Berlin ContractContractOthersOthersTotalTotal

200420041818

1 5201 520645645

3943942 5772 577

200520052 0352 035

227227

4184182 6792 679

20062006140140746746

4434431 3291 329

200820082 0002 000

3743742 3742 374

201220121 0001 000

3423421 3421 342


Financial flexibility improved :Financial flexibility improved :1- Ratios / Covenants

Strong improvement Strong improvement of of covercover ratiosratios

5.15.13.43.4

4.84.83.83.8

20012002

3.73.74.04.0

2000

EBITDA/EBITDA/financial expensefinancial expense (x)(x)Net Net debtdebt/EBITDA (x)/EBITDA (x)

Interest coverageInterest coverage ratio (x)ratio (x)Debt payoutDebt payout ratio (x)ratio (x)

5,7 (>4)5,7 (>4)3,5 (<4,25)3,5 (<4,25)

Successful renegotiations Successful renegotiations Same ratios in all the documentation (Bank loans and US PP) :Elimination of all ratings triggersHigher flexibilityNo spread increase at current level

Covenants (Bank Definition)Covenants (Covenants (Bank DefinitionBank Definition))


Financial flexibility improved: 2- Improvement of the liquidity position

Multi Purpose Facilities 1 750 1 750

Bank Facilities

Syndicated Loans 4 415 2 615

Cash immediately available 1 822

Total 6 420

Liquidity increaseLiquidity increase by 90% by 90% over the past two yearsover the past two years

December 2002

Total Available

1 300 1 300

423

4 415 2 149

1 681

5 553

March 2003

Total Available

233

1 200

4 564 0

1 541

2 941

December 2000

Total Available

200

1 200

Other cash/Marketable securities

Grand Total 7 382 6 515 3 424

962 962 483

In € m

(E)(E) (1)(1)

(1)(1)

(1) Total : 2 643 €m(1) Total : 2 643 €m


EUR 68%EUR 68%USD 22%USD 22%

OthersOthers 10%10%

Fixed Fixed rates 51%rates 51%FloatingFloating rates 49%rates 49%

Structure of Structure of the debtthe debt

Currency Type of rate(after hedging)

VE VE strategy strategy : To : To hedge hedge FX FX and interest risksand interest risks (FFO in (FFO in currenciescurrencies, , contracts indexed contracts indexed on inflation)on inflation)

Based Based on on gross debtgross debt


Diversification of Diversification of fundingfunding sourcessources

Syndicated loans24%

Océanes10%

Bonds3%

Commercial paper 4%

Bilateral facilities 52%

C/C VU7%

DecDec. 2000. 2000

Bank Debt : 76%All Bonds : 17%

Syndicated loans19%

Océanes9%

Commercial paper7%

Bilateral facilities 39%

Bonds26%

DecDec. 2002. 2002

Bank Debt : 58%All Bonds : 42%


Centralized debt Centralized debt management management

84%Vivendi Environnement 62%

Vivendi Environnement

Subsidiaries12%

Proportional consolidation (PC*) and Project Finance Structures

26%

Subsidiaries16%

Group VE (bn € 13,1)Group VE (bn € 13,1)Group VE (bn € 13,1) VE global (bn € 9.7)(excluding PC and PFS : non recourse debt)

VE global (bn € 9.7)VE global (bn € 9.7)((excluding excluding PC PC and and PFS : non PFS : non recourserecourse debtdebt))

Based Based on net on net debtdebt

* PC * PC include essentiallyinclude essentially FCC, FCC, Dakia Dakia International International and and Berlin Berlin WasserWasser


Benefit obligation (928)

Fair value of plan assets 903

Funded status of plan

(973)

766

(207) (25)

Pension plan and other cost retirement benefitsPension plan Pension plan and other cost and other cost retirement retirement benefitsbenefits

20012002

(*)(*)

In € m

(*) France : legal retirement obligation : ~ € 120 mUK : ~ € 60 mOthers : ~ € 27 m

~ € 207 m

US : all pension plans are based on defined contribution scheme

(*) France : (*) France : legal legal retirement obligation : retirement obligation : ~ € 120 m~ € 120 mUK : UK : ~ € 60 m~ € 60 mOthersOthers : : ~ € 27 m~ € 27 m

~ € 207 m~ € 207 m

US : all pension plans are US : all pension plans are basedbased on on defineddefined contribution contribution schemescheme


Under the terms of the option agreement, Ms. Koplowitz has a put option to sell to VE at any time before October 6, 2008, her 51% stake in B 1998 SL (…).

During the last analyst meeting, Henri Proglio has mentionned that for VE this put is less a risk than an opportunity. Esther Koplowitz reply is very clear :

“ Esther Koplowitz wishes to express her commitment to remain in the company…and to dispel any misunderstanding, she denies any intention to exercise her option to sell this interest “.

Off-balance SheetPut FCCOffOff--balance balance SheetSheetPut FCCPut FCC

Net Debt / Ebitda

Year 2002

3,4

After excercising the put

3,3

After public offer3,7

After selling non-core

3,3

If put exercised :

FCC Revenue 2002 : FCC Revenue 2002 : € 5 317 m€ 5 317 m SOP € 4 508 m (1)SOP € 4 508 m (1)ServiciosServicios 31%31% SOP € 1 703 m (1)SOP € 1 703 m (1)CementosCementos 39%39%ConstrucciónConstrucción 16%16%Servicios urbanosServicios urbanos 12%12%OtrosOtros 2%2% (1) (1) Schroder SalomonSmithBarney Schroder SalomonSmithBarney 25/02/0325/02/03

SOP € 2 805 m (1)SOP € 2 805 m (1)


LT Ratings : S&P LT Ratings : S&P BBB+ / O sBBB+ / O sMoody’sMoody’s Baa1 / O Baa1 / O --

ST Ratings confirmed A2 (S&P), P2 (M)

One success : withdrawal from S&P “credit cliff list ” in December 2002

Removal of all ratings triggersRemoval of all ratings triggers

Easing of covenant levelsEasing of covenant levels

Extension of the average debt maturityExtension of the average debt maturity

BBB+ rating stableBBB+ rating stable


LT Ratings : S&P LT Ratings : S&P BBB+ / O sBBB+ / O sMoody’sMoody’s Baa1 / O Baa1 / O --

One disappointment : Moody’s retains a negative outlook despite the elimination of the Shareholder risk

The negative outlook was the result of the The negative outlook was the result of the XdefaultXdefault of of VivendiVivendiUniversal, cleared up in August 2002Universal, cleared up in August 2002

The last press release on March 3rd states : “ The last press release on March 3rd states : “ VE has made VE has made significant progress in 2002 in improving the financial arrangemsignificant progress in 2002 in improving the financial arrangements of ents of facilities by removing all rating triggers that could lead to acfacilities by removing all rating triggers that could lead to acceleration celeration and by increasing headroom under its financial covenants.and by increasing headroom under its financial covenants.The negative outlook reflects The negative outlook reflects Moody’sMoody’s views regarding the needs for views regarding the needs for further strengthening in areas including liquidity, increasing tfurther strengthening in areas including liquidity, increasing the he availability and maturity profile of its financing arrangements,availability and maturity profile of its financing arrangements, and and reducing the growth trends in its underlying capital expenditurereducing the growth trends in its underlying capital expenditure levels.”levels.”


Our targets for 2003 - 2004

Further improvement of cover ratiosFurther improvement of cover ratios

2003 : positive free cash2003 : positive free cash--flows after disposals and flows after disposals and growth growth capexcapex≥≥ 2004 : 2004 : positive free cashpositive free cash--flowsflows

No Debt increase : No Debt increase :

Stabilization or even reductionStabilization or even reduction

Extension of duration by using bond marketsExtension of duration by using bond markets

Rating : Rating :

Maintain or even improve our LT and ST ratingsMaintain or even improve our LT and ST ratings


AppendixAppendix


History of Vivendi Universal’s stake in Vivendi Environnement’s equity capital

December 1999December 1999 Formation of Formation of Vivendi EnvironnementVivendi Environnement (VE), (VE), 100% owned by owned by VivendiVivendi Universal (VU)Universal (VU)

July 20, 2000July 20, 2000 IPOIPOVU owns VU owns 72.3%

December 17, 2001December 17, 2001 VU sells 9.3%VU sells 9.3%VU owns VU owns 63%

June 28, 2002June 28, 2002 VU sells 15.5%VU sells 15.5%VU owns VU owns 47.5%

August 2, 2002August 2, 2002 1.5 billion euro capital increase for VE1.5 billion euro capital increase for VEVU owns VU owns 40.8%

December 24, 2002December 24, 2002 VU sells 20.4%, +20.4% call option VU sells 20.4%, +20.4% call option exercisable at 26.5 euros per share at any exercisable at 26.5 euros per share at any time until December 2004. VU owns time until December 2004. VU owns 20.4%


Covenants (Covenants (Bank DefinitionBank Definition))

Interest coverageInterest coverage ratio (x)ratio (x)

Debt payoutDebt payout ratio (x)ratio (x)

5,7 (>4)5,7 (>4)

3,5 (<4,25)3,5 (<4,25)

EBITDA = + EBIT 1 971,3+ Operational amortization 1 699,3+ Valuations allowances relating to LT assets 0,0+ Profit sharing 39,0

3 709,6

Financial expense = + Net interest expenses 680,9+ Other financial profits - 32,1

648,8

In €mIn €m


Securitization ProgramsSecuritization Programs

In €m

1. SecuritizationWater France

USF

2. Facturing

3. Cogevolt (future receivables)

Total

2002

379379

0

767

739

1 885

2001

883713

170

656

859

2 398

Variation

- 504- 334

- 170

+ 111

- 120

- 513


A CEO and a new Board of Directors (14 members) :A CEO and a new Board of Directors (14 members) :

The Two Board committees should be maintained :The Two Board committees should be maintained :Audit, Transaction and Commitment CommitteeAudit, Transaction and Commitment CommitteeSelection and Compensation CommitteeSelection and Compensation Committee

An Ethical Chart has been approvedAn Ethical Chart has been approved(* subject to approval of shareholders meeting of April 30, 2003(* subject to approval of shareholders meeting of April 30, 2003))

2003 : A new governance and a new name as a 2003 : A new governance and a new name as a result of the new shareholder structure *result of the new shareholder structure *

Board of Directors

Arthur Laffer Francis Mayer Serge Michel Georges Ralli Baudouin Prot Louis Schweitzer Murray Stuart

Henri Proglio (Chairman of Board of Directors)Jean Azéma Daniel Bouton Jean-Marc Espalioux Jacques Espinasse Paul-Louis Girardot Philippe Kourilski


Significant Significant items by Divisionitems by Division

WaterWaterRevenue Revenue €€ 11 288 m11 288 mEBIT EBIT marginmargin 7.4%7.4%

WasteWasteRevenue Revenue €€ 6 139 m6 139 mEBIT EBIT marginmargin 6.4%6.4%

France Good trend for both revenue and earningsGood trend for both revenue and earningsIncrease in water distributionIncrease in water distributionReturn to profit for Return to profit for VivendiVivendi Water SystemsWater Systems

USA Stable performance for core businesses and continued Stable performance for core businesses and continued slowdown in sales of nonslowdown in sales of non-- core equipmentcore equipmentConsumer business stableConsumer business stable

RoW Increased contribution from Central Europe, and startIncreased contribution from Central Europe, and start--up ofup ofmajor contracts in Asia (major contracts in Asia (HynixHynix, , ChengduChengdu))

France Partial impact of restructuring measures in progressPartial impact of restructuring measures in progress

UK Revenue growth of 14% Revenue growth of 14% EBIT x 1.5 (positive impact of recovery plan, SheffieldEBIT x 1.5 (positive impact of recovery plan, Sheffieldand Bromley)and Bromley)

USA Weakness in "industrial services" and upturn for "toxicWeakness in "industrial services" and upturn for "toxicwastewaste”” activitiesactivities

Asia Excellent performance from PWM: 10% rise in revenueExcellent performance from PWM: 10% rise in revenueand further improvements in marginand further improvements in margin


EnergyEnergy servicesservicesRevenue Revenue €€ 4 571 m4 571 mEBIT EBIT marginmargin 7.1%7.1%

France Strong growth in cogeneration and service contractsStrong growth in cogeneration and service contractsImpact of business mix on marginImpact of business mix on margin

Europe Revenue growth in Southern and Central EuropeRevenue growth in Southern and Central EuropeEBIT x 4 in Italy due to integration of EBIT x 4 in Italy due to integration of SiramSiramGood contribution from Estonia and PolandGood contribution from Estonia and Poland

TransportationTransportationRevenue Revenue €€ 3 422 m3 422 mEBIT EBIT marginmargin 3.2%3.2%

France Contribution from Contribution from Verney Verney (acquisition)(acquisition)UK Difficult market, Difficult market, declinedecline in in passenger numbers passenger numbers Other(Europe/USA) Full impact of new contracts in Northern andFull impact of new contracts in Northern and

Central EuropeCentral EuropeStartStart--up of new contractsup of new contracts

FCCFCCRevenue Revenue €€ 2 653 m2 653 mEBIT EBIT marginmargin 9.3%9.3%

DoubleDouble--didigitgit increase:increase:-- in services: rise in demand for waste in services: rise in demand for waste

management servicesmanagement services-- in cement businessin cement business

Significant items by DivisionSignificantSignificant items by Divisionitems by Division


Strengthened financialStrengthened financial situation situation throughthrough an an active active financing policy financing policy in 2002in 2002

Active debt managementActive debt management

Total independence of financing (elimination of Total independence of financing (elimination of crosscross--default with default with Vivendi Vivendi Universal in August 2002)Universal in August 2002)Currency coverage of assetsCurrency coverage of assetsExtension of average debt maturityExtension of average debt maturityElimination of all ratings triggersElimination of all ratings triggers

Financial Financial flexibilityflexibility

Improvement in liquidityImprovement in liquidityEasing of covenant levelsEasing of covenant levelsNo ringNo ring--fencing fencing for for core core businessbusinessLow level Low level of of minority interests minority interests in in WaterWater & & WasteWaste (all major (all major subsidiaries subsidiaries are 100% are 100% controlledcontrolled))


Off-balance SheetPut Southern WaterOffOff--balance balance SheetSheetPut Put Southern WaterSouthern Water

Main features

-Sale to SWC (a subsidiary of Royal Bank of Scotland) of 80,1% of Southern Water-VE to retain a 19,9% equity interest for £10m and to invest £150m in preference shares

-Third party investor to invest £ 110m, in prefered shares, with a five year put option on VE at par

Advantages :

-Reduced exposure (existing put option of £ 374m)

-No execution risk :

-Clearance received from UK authorities,

-Completion expected by mid-may

-Refinancing risk transferred to Royal Bank of Scotland

-Consolidation under the equity method ensures limited impact on ratios


Structural Subordination Structural Subordination withinwithin VEVE

Net Net debtdebt / EBITDA (x)/ EBITDA (x)FFO / Net FFO / Net debt debt (x)(x)

3.403.400.220.22

3.363.360.210.21

VE globalGroup VE PC * + PFS

3.243.240.190.19

1) No impact on financial ratios : EBITDA generation and net debt well balanced

* PC * PC include essentiallyinclude essentially FCC, FCC, Dakia Dakia International International and and Berlin Berlin WasserWasser


Structural Subordination Structural Subordination withinwithin VEVE

(*) Net of loans and debt to subsidiaries(*) Net of (*) Net of loans and debt loans and debt to to subsidiariessubsidiaries

2) Balance of external debt of VE SA with downstream loans to subsidiaries

(**) External debt net of cash(**) (**) External debt External debt net of cashnet of cash

DownstreamLoans (*)

ExternalDebt (**)

Net

9 517 9 080 437In € m

In case of default of VE, creditors would step in VE’s position not only as a shareholder of the subsidiaries but also as a creditor fully supported and unforceable.

Documented and structured internal loans protect VE creditors against structural subordination.

Technology

Special Presentation Germany, April 2003