key figures as of march 31, 2012 - conference call on may 4, 2012

Key figures as of March 31, 2012

Conference call on May 4, 2012

Pierre‐François RiolacciChief Finance Officer

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Investor Relations Key figures as of March 31, 2012

DisclaimerVeolia 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

Highlights and key figures as of March 31, 2012

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1st quarter 2012 highlights

Convergence• Implementation of cost reduction program: €75M in savings identified to

date, relative to an annual objective of €100M

• Asset divestment process continuing

Good commercial dynamics

Good resilience of activity• Revenue increased 4.6%, including +3.4% at constant scope and FX

• Adjusted operating cash flow declined 3.1% (‐3.3% at constant FX)

• Adjusted operating income declined by 12.2% due to costs to implement the transformation plan and higher amortization expense in several priority regions

• Industrial investment increased, notably in Energy Services (biomass and in Central Europe)

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1st quarter 2012 key figures

15,02114,51114,511Net financial debt (3)

‐519539539Free Cash Flow

544.0618.8636.1Operating income

6.9%8.3%7.8%Adj. operating income margin

‐12.1%‐12.2%543.5618.8636.1Adjusted operating income

11.5%12,4%12.2%Adj. operating cash flow margin

‐3.3%‐3.1%900.4928.8996.8Adjusted operating cash flow

+3.8% (2)+4.6%7,825.57,478.68,159.4Revenue

Constant

FX

current

FX

Q1 2012Q1 2011 re‐presented (1)

Q1 2011 published

In €M

(1) To ensure the comparability of period, the 2011 financial statements have been re-presented to include:- the impact of the reclassification into “net income from discontinued operations” of Habitat Services (“Proxiserve”) activities in the Water and Energy Services division, Citelum activities in the Energy Services division, Solid waste activities in the United States in the Environmental Services division and the regulated activities in the United Kingdom in the Water division;- the impact of the reclassification into “net income from discontinued operations” of the Transportation Division as a whole;- the impact of the reclassification into ‘continuing operations’ of the “Pinellas” incineration activities within the Montenay International entities in the United States in the Environmental Services division.

(2) +3.4 % at constant consolidation scope and exchange rates(3) Net financial debt as of December 31, 2011: €14,730M

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Breakdown of revenue by division

2,342 2,540

2,230 2,236

2,907 3,050

Δcurrent

FX

Δconstant

FX

Δ excl. FX & scope

Water +4.9% +3.8% +5.3%

Environmental Services +0.3% ‐1.3% ‐0.9%

Energy Services +8.5% +8.8% +5.3%

Total Company +4.6% +3.8% +3.4%

(1) To ensure the comparability of period, the 2011 financial statements have been re-presented to include:- the impact of the reclassification into “net income from discontinued operations” of Habitat Services (“Proxiserve”) activities in the Water and Energy Services division, Citelum activities in the Energy Services division, Solid waste activities in the United States in the Environmental Services division and the regulated activities in the United Kingdom in the Water division;- the impact of the reclassification into “net income from discontinued operations” of the Transportation Division as a whole;- the impact of the reclassification into ‘continuing operations’ of the “Pinellas” incineration activities within the Montenay International entities in the United States in the Environmental Services division.

Q1 2011re‐presented (1)

Q1 2012

7,479

In €M

7,826

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Water: revenue increase of 4.9% to €3,050M

Operations: Revenue increased 2.0% (+3.6% at constant scope and FX)

• France : revenue increased 2.6% (+3.2% at constant scope and FX), given stable volumes and favorable indexation, and continued contract erosion

• Outside France: Revenue increased 1.7% (+3.8% at constant scope and FX) due to good performance in Central and Eastern Europe and in Asia

Technologies and Networks: Revenue increased 12.7% (+9.7% at constant scope and FX)

• Confirmed recovery in Industrial activity

• Favorable impact of the Hong Kong contract

• VWS backlog increased compared to the end of March 2011, primarily due to Industrial Design & Build projects

784 884

2,123 2,166

2011* 2012OperationsTechnologies & Networks

*The 2011 financial statements have been re‐presented to ensure the comparability of periods, for the U.K. regulated water activities and Proxiserve

2,907 3,050 +4.9%

+2.0%

+12.7%

Quarterly revenue as of March 31 (€M)

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Environmental Services: Stable revenue at €2,236M

France: Revenue growth of +3.8% at constant scope, despite the impact of lower raw material prices: improved volumes, notably in recycling, incineration and treatment of hazardous waste

UK: Revenue decline of 8.4% at constant scope and FX due to decline in PFI construction revenue, shutdowns due to incinerator maintenance, and strong decline in landfill volumes

Germany: Revenue decline at constant scope of 8.8% due to lower raw material prices and volumes

Italy: Procedure for voluntary liquidation presented on April 18 and applicable to all Veolia Environmental Services activities with the exception of the Technoborgo and Energonut incinerators

2012

Price and volumes of recycled materials ‐1.2%

Waste volumes ‐0.1%

Service price increases +1.1%

Other ‐0.7%

Consolidation scope & currency effect +1.2%

Revenue variation 2012 / 2011:+0.3% and ‐0.9% at constant scope and FX

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Energy Services: revenue increased 8.5% to €2,540M

Revenue increased 8.5% (+5.3% at constant scope and FX) to €2,540M• Higher energy prices: positive impact of €140M vs. 2011

• Marginal weather impact

In France, revenue increased 9.6% (+10.6% at constant scope)• Average fuel prices increased

Outside France, revenue increased 7.3%, and was stable at constant scope and FX• Central & Eastern Europe revenue increased 19.5% (+4.6% at constant scope and FX)

Unfavorable currency effect

Consolidation scope: essentially impact of the Warsaw heating network for €95M

Higher prices, but lower electricity sales in the Czech Republic and cogenerated electricity subsidies in Hungary

1,172 1,284

1,170 1,256

2011* 2012

France Outside France

* The 2011 financial statements have been re‐presented to ensure the comparability of periods, for the Citelum and Proxiserve activities.

2,342 2,540 +8.5%

+7.3%

+9.6%

Quarterly revenue as of March 31 (€M)

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Free Cash Flow

Asset divestments well advanced but no material divestments completed in Q1 2012 (versus €840M in Q1 2011)

Seasonal variation in WCR: ‐€679M (‐€570M as of March 31, 2011)

Gross investments of €656M compared to €528M in Q1 2011Repurchase of minority interest in Water division in Central Europe for €79M

Significant increase in growth investments in Energy Services, notably in France associated with biomass cogeneration projects

Free Cash Flow: ‐€519M

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Net financial debtIn €M

• Seasonal increase in net financial debt• Active net financial debt management: public exchange offer of euro issues with maturities in 2013, 2014, 2017 and 2018 versus a new €750M issue with maturity in 2027, as well as reimbursement of the U.S. private placement for €350M

15,02114,73015,045

14,76414,511

16,52816,820 16,827

15,909 15,76715,218

15,37715,127

16,027

10,000

12,000

14,000

16,000

18,000

31-Dec-08

31-Mar-09

30-Jun-09

30-Sep-09

31-dec-09

31-Mar-10

30-Jun-10

30-Sep-10

31-Dec-10

31-Mar-11

30-Jun-11

30-Sep-11

31-Dec-11

31-Mar-12

Convergence: Update on strategic plan

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Update on asset divestment program

U.K. Regulated Water & U.S. Solid Waste:• An ambitious timeline followed to‐date• Strong interest expressed by the market• Non‐binding offers received

Veolia Transdev:• Continued preparation of VTD as part of withdrawal• Negotiation in process on the basis of an offer received• Interest expressed from a new potential buyer

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Advancement of cost reduction program

6075

100

‐38 ‐52‐80

Feb. 17, 2012e Apr. 27, 2012e Dec. 31, 2012e

Implementation costs

Gross savings

22.0%

10.0%

11.0%

13.0%5.0%

14.0%

12.0%

13.0%

France

North America &Australia

Latin America &Southern Europe

Asia, Africa &Middle East

Central & EasternEurope

Northern Europe

Corporate HQ

Other

25.0%

66.0%

1.0% 0.0%6.0%

2.0%

Purchasing

OrganizationalEfficiency

IT costs

Externalexpenses

Insurance costs

Other

In €M

Breakdown of net savings by geographic zone Breakdown of net savings by lever

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(1) Before exchange rate impact (2) Net of implementation costs(3) Subject to approval of Veolia’s Board of Directors and shareholders(4) Net financial debt / (Operating cash flow before changes in working capital + principal repayments on operating financial assets) (5) ±5%

• Divestments of €5bn• Reduce net financial debt below €12bn(1)

• Cost reduction in 2013: gross impact of €220M and net(2) impact of €120M on Operating Income

• Commitment on dividend policy• €0.70(3) per share in 2012, paid in cash or shares

• €0.70(3) per share in 2013

2012‐2013Transition

period

2014 and beyond:

New Veolia

• Organic revenue growth > +3% CAGR (mid‐cycle)• Adjusted Operating Cash Flow > +5% CAGR (mid‐cycle)

• Leverage(4) of 3.0x(5)

• Mid‐term: historical payout ratio(3)

• Cost reduction in 2015: gross impact of €450M and net(2) impact of €420M on Operating Income

Outlook

Appendices

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618.8636.1Operating income/Adjusted operating income

539.0539.0Free Cash Flow (2)

996.8

8,159.4

2011published

7,478.6Revenue

(€M)2011Re‐

presented

Adjusted operating Cash Flow 928.8

(1) To ensure the comparability of period, the 2011 financial statements have been re‐presented to include:‐ the impact of the reclassification into “net income from discontinued operations” of Habitat Services (“Proxiserve”) activities in the Water and Energy Services division, Citelum activities in the Energy Services division, Solid waste activities in the United States in the Environmental Services division and the regulated activities in the United Kingdom in the Water division;‐ the impact of the reclassification into “net income from discontinued operations” of the Transportation Division as a whole;‐ the impact of the reclassification into ‘continuing operations’ of the “Pinellas” incineration activities within the Montenay International entities in the United States in the Environmental Services division.

(2) Free Cash Flow represents cash generated (sum of operating cash flow before changes in working capital and principal payments on operating financial assets) net of the cash component of the following items: (i) changes in working capital for operations, (ii) operations involving equity (share capital movements, dividends paid and received), (iii) investments net of disposals (including the change in receivables and other financial assets), (iv) net financial interest paid and (v) tax paid .

Appendix 1: Main at end March 2011 re‐presented figures (1)

(1)

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Appendix 2: Commercial dynamics since the beginning of 2012 (1/2)

In France :• Veolia Water chosen to renovate Europe’s largest wastewater treatment plant.

SIAAP (Syndicat Interdépartemental pour l’Assainissement de l’Agglomération Parisienne, the interdepartmental wastewater authority for the Greater Paris area) chose OTV, a subsidiary of Veolia Water Solutions & Technologies, to head the consortium that was awarded the contract to renovate the Seine Aval biological wastewater treatment plant in Achères, the 2nd largest wastewater treatment plant in the world after that of Chicago. The portion of revenue that will be attributable to OTV is expected to be roughly €196M.

• Greater Dijon chose Dalkia to design and operate its future heating network.

The Greater Dijon joint district authority appointed Dalkia, as part of a public service management contract, the design, build and operation of its new heating network for a period of 25 years. As much as 80% of the network’s energy needs will come from renewable resources. Cumulated revenue is estimated at more than €200M.

In Europe :• Veolia Environmental services selected by the city of Leeds for a waste management contract (United

Kingdom).

Veolia Environmental Services, through its subsidiary Veolia Environmental Services (UK) Plc, a leading UK recycling and waste management company, was selected as a preferred bidder by the Leeds City Council for a Private Finance Initiative (PFI) contract for the treatment and disposal of residual waste. This contract will have a duration of 25 years.

• Dalkia selected by the European Investment Bank to aid the Bank in its plan to reduce its carbon footprint (Luxembourg).

The European Investment Bank awarded Dalkia the contract for technical and energy systems management of more than 180,000m² of its office space in Luxembourg. The 4 year contract covers 4buildings and includes and ambitious target for reducing energy consumption and CO2 emissions.

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In Asia‐Oceania:• India: first «”full city ” public‐private partnership in the Water division.

Veolia Water India, a Veolia Water subsidiary, was awarded the drinking water service operation and maintenance contract by the city of Nagpur for 25 years (cumulated revenue of €387M). Veolia Water will take on the challenge of providing a continuous supply of drinking water to homes of the population of 2.7 million in Nagpur, including the portion of the population living in the city’s slums (a first in India).

Appendix 2: Commercial dynamics since the beginning of 2012 (2/2)

• Japan : Veolia Water won contracts for the operations and maintenance of three water and wastewater treatment plants which will service the needs of 1,215,000 people in Japan.

Veolia Water Japan, a Veolia Water subsidiary, successfully bid on the operations and maintenance contracts for two wastewater treatment plants in Hiroshima and Kyoto, and was also chosen by the city of Matsuyama (on the southern island of Shikoku) for the operations and maintenance of all facilities used to treat drinking water (cumulated revenue of €49M).

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Appendix 3: Impacts of variation in foreign exchange rates during the quarter

Depreciation of the euro 3M 2012 / 3M 2011

Average rate Closing rate

• Australian dollar +8.7% +6.6%

• Czech koruna ‐2.9% ‐0.8%

• U.K. pound sterling +2.2% +5.6%

• U.S. dollar +4.1% +6.0%

Impact on key Company figures

• Revenue +€60.1M

• Adjusted operating cash flow +€2.5M

• Adjusted operating income ns

• Decline in net financial debt ‐€12M

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Appendix 4: Evolution of recycled material prices€/T Q1, 2011 Q2, 2011 Q3, 2011 Q4, 2011 2011 avg Q1, 2012

Var Q1 2012 / Q1 2011

March 2012: 12 month var

March 2012 : 3 month var

March 2012 : 1 month var

Cardboard (1.05) 131.1 147.9 132.8 94.4 126.5 119.0 -9.2% -3.1% 70.4% 12.5%Paper (1.11) 112.2 124.3 121.5 93.5 119.3 92.8 -17.3% -6.1% 20.3% 13.9%Metals (E40) 342.6 320.0 318.7 296.1 327.1 325.4 -5.0% 0.4% 8.6% 3.6%

Evolution of raw materials prices (€/t)

0

20

40

60

80

100

120

140

160

180

jan 08

feb 08

mar 08

apr 0

8may

08jun

08jul

08au

g 08

sept

08oc

t 08

nov 0

8de

c 08

jan 09

feb 09

mar 09

apr 0

9may

09jun

09jul

09au

g 09

sept

09oc

t 09

nov 0

9de

c 09

jan 10

feb 10

mar 10

apr 1

0may

10jun

10jul

10au

g 10

sept

10oc

t 10

nov 1

0de

c 10

jan 11

feb 11

mar 11

apr 1

1may

11jun

11jul

11au

g 11

sept

11oc

t 11

nov 1

1de

c 11

janv 2

012

fev 20

12

mars 20

12ap

r 201

2

0

50

100

150

200

250

300

350

400

450

500

Cardboard Paper Metals

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Investor Relations Contact Information

Ronald Wasylec, Senior Vice President, Investor Relations

Tel +33 1 71 75 12 23

e‐mail [email protected]

Ariane de Lamaze

Tel +33 1 71 75 06 00

e‐mail ariane.de‐[email protected]

38 Avenue Kléber – 75116 Paris ‐ France

Fax +33 1 71 75 10 12

Terri Anne Powers, Director of North American Investor Relations

200 East Randolph Street

Suite 7900

Chicago, IL 60601

Tel +1 (312) 552 2890

Fax +1 (312) 552 2866

e‐mail [email protected]

http://www.finance.veolia.com

key figures as of march 31, 2012 - conference call on may 4, 2012

Economy & Finance