slide presentation analyst meeting

2002, Annual Results 2002, Annual Results –– March 2003March 2003 11

Paris, 10th March 2003Paris, 10th March 2003


Important Important Legal DisclaimerLegal Disclaimer

Vivendi 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 Vivendi Environnement’s profits, the risk that governmental authorities could terminate or modify some of Vivendi Environnement’s contracts, the risk that Vivendi Environnement’s compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Vivendi Environnement’s financial results and the price of its shares, the risk that Vivendi Environnement may incur environmental liability in connection with its past, present and future operations, and the risks related to Vivendi Environnement’s relationship with Vivendi Universal, as well as the risks described in the documents Vivendi Environnement has filed with the U.S. Securities and Exchange Commission. Vivendi Environnement does not undertake, nor does it have, any obligation to provideupdates or to revise any forward-looking statements. Investors and security holders may obtain a free copy of documents filed by Vivendi Environnement with the U.S. Securities and Exchange Commission from Vivendi Environnement.


Contents :Contents :

2002 : 3 stress scenarios overcome

1. Which risk event ?2. Industrial Profile 3. Financial Profile

Target 2003 : to maintain or even improve our long and short term ratings


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

nn “Sector”“Sector” Stress scenario Stress scenario : : The Latin America risk and the crisis in The Latin America risk and the crisis in the Energy sector are 2 nonthe Energy sector are 2 non--issues for the Group. As world leader in issues for the Group. As world leader in Environmental ServicesEnvironmental Services VEVE is able to generateis able to generate FFOFFO, even in a , even in a difficult economic climatedifficult economic climate

nn “Liquidity”“Liquidity” Stress scenario :Stress scenario :èè CashCash--flow generation up significantlyflow generation up significantlyèè Decrease in net indebtedness : from € 14.2 to 13.1 Decrease in net indebtedness : from € 14.2 to 13.1 bnbnèè Strong improvement in [net debt /Strong improvement in [net debt / EBITDAEBITDA] ratio from 4 to 3.4] ratio from 4 to 3.4èè Strengthening 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 liquiditypositionposition

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


1. 1. WhichWhich event riskevent risk??

Past:The spin off with VU is over

Future:Our strategy is not “multi utilities”.

This significantly reduces the event risk


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

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

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

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

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

nn August 2, 2002August 2, 2002 1.5 billion euro capital increase for1.5 billion euro capital increase for VEVEVU owns VU owns 40.8%

nn 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%


Shareholder structure after capital stock restructuringShareholderShareholder structure structure afterafter capital stock capital stock restructuringrestructuring

(1)(1) New New investorsinvestors: :

CompaniesCompanies in in thethe followingfollowing groups: CDC, groups: CDC, GroupamaGroupama, Electricité de France,, Electricité de France,BNP Paribas, Société Générale, BNP Paribas, Société Générale, DexiaDexia, Groupe Axa, Assurances Générales de, Groupe Axa, Assurances Générales deFrance, France, EurazeoEurazeo, Caisse Nationale des Caisses d'Epargne, Crédit Lyonnais,, Caisse Nationale des Caisses d'Epargne, Crédit Lyonnais,Crédit Agricole Crédit Agricole Indosuez Indosuez ((SwitzerlandSwitzerland) on ) on behalfbehalf of of customercustomer, Crédit Mutuel , Crédit Mutuel CIC, CIC, GeneraliGenerali, Groupe CNP, Crédit Agricole , Groupe CNP, Crédit Agricole Indosuez Indosuez ((SwitzerlandSwitzerland) for ) for its own its own accountaccount, , MédéricMédéric Prévoyance, Prévoyance, Wasserstein Family Wasserstein Family TrustTrust

NB : EDF NB : EDF owns owns 34% of 34% of DalkiaDalkia

Vivendi Vivendi Universal Universal 20.4%20.4%

FloatingFloating 59.2%59.2%

New New investors investors 20.4% 20.4% (1) (1)


2. 2. IndustrialIndustrial ProfileProfile

2002 : The increase in year end results confirms the

soundness of our business model

2003 : A new indicator (ROCE) is put in place in order to

optimise growth versus FCF


nn RevenueRevenue

nn Revenue from core businessesRevenue from core businesses

nn EBITDAEBITDA

nn EBITDAEBITDA from core businessesfrom core businesses

nn EBITEBIT

nn EBITEBIT from core businessesfrom core businesses

nn Net incomeNet income

nn Recurring net incomeRecurring net income

nn Recurring net income per share (in €)Recurring net income per share (in €)

nn Dividend (in €) Dividend (in €) (1)(1)

nn Dividend pay out ratioDividend pay out ratio

nn Net debt Net debt

In In €€mm

2002 2002 keykey figuresfigures

(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

29,12729,127

26,51326,513

3,7603,760

3,4803,480

2,0132,013

1,8131,813

(2,251)(2,251)

420420

1.201.20

0.550.55

46%46%

14,28314,283

30,07930,079

28,07328,073

3,8873,887

3,7273,727

1,9711,971

1,8471,847

339339

429429

1.161.16

0.550.55

47%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%

2002/2001Exchange rate

Current ConstantDec. 31, 01Dec.31, 02


Unchanged strategy built aroundUnchanged strategy built around one one business: business: Environmental Environmental ServicesServices

nn The only pure player in Environmental ServicesThe only pure player in Environmental Services

nn 4 well4 well--matched divisionsmatched divisionsèè WaterWaterèè WasteWasteèè Energy servicesEnergy servicesèè TransportationTransportation

nn Positions in highPositions in high--potential markets such as Waterpotential markets such as Water

nn Growth ensured by a balanced customer mix (municipalities Growth ensured by a balanced customer mix (municipalities ~65% of revenue; manufacturing and service customers ~35%)~65% of revenue; manufacturing and service customers ~35%)

nn Secure geographical coverageSecure geographical coverageOver 95% of revenue generated in industrialized countries with Over 95% of revenue generated in industrialized countries with stable political and monetary systemsstable political and monetary systems

nn Future cash flows that are recurring and undergoing growth: Future cash flows that are recurring and undergoing growth: €30 billion additional backlog in 2002€30 billion additional backlog in 2002


nn PudongPudong 50 yrs50 yrs ChinaChina 10,00010,000nn RedalRedal (Rabat)(Rabat) 27 yrs27 yrs MoroccoMorocco 4,5004,500nn PraguePrague 15 yrs15 yrs Czech RepublicCzech Republic 2,7002,700nn IndianapolisIndianapolis 20 yrs20 yrs USAUSA 1,5001,500nn The HagueThe Hague 30 yrs30 yrs NetherlandsNetherlands 1,5001,500nn ZhuhaiZhuhai 30 yrs30 yrs ChinaChina 390390nn BaojiBaoji 23 yrs23 yrs ChinaChina 265265nn Atlanta Atlanta 20 yrs20 yrs USAUSA 200200nn GeraGera 10 yrs10 yrs GermanyGermany 100100nn AlonAlon 20 yrs20 yrs USAUSA 7575nn French industryFrench industry -- FranceFrance 6868nn RichmondRichmond 20 yrs20 yrs USAUSA 5959nn Oklahoma CityOklahoma City 5 yrs5 yrs USAUSA 3636nn FreymingFreyming –– MerlebackMerleback 12 yrs12 yrs FranceFrance 3535nn California California MicrofiltrationMicrofiltration 1 yr1 yr USAUSA 2525nn Lens Lens –– LiévinLiévin 13 yrs13 yrs FranceFrance 1717nn ToulouseToulouse 17.5 yrs17.5 yrs FranceFrance 1616nn NarbonneNarbonne 18 yrs18 yrs FranceFrance 1515

Main municipal and industrial contractsOrder backlog won in 2002: €30 billionMain municipal Main municipal and industrial contractsand industrial contractsOrder backlog won in 2002: €30 billion

In €mIn €m

nn WaterWater nn Waste Waste nn EnergyEnergy servicesservices nn TransportationTransportation

Backlog

nn East SussexEast Sussex 25 yrs25 yrs UKUK 1,0001,000nn WestminsterWestminster 7 yrs7 yrs UKUK 350350nn NouméaNouméa 30 yrs30 yrs NewNew--CaledoniaCaledonia 350350nn MarneMarne 20 yrs20 yrs FranceFrance 306306nn Borough of CamdenBorough of Camden 7 yrs7 yrs UKUK 190190nn Charleston (South Carolina)Charleston (South Carolina) 7 yrs7 yrs USAUSA 119119nn SingaporeSingapore 5 yrs5 yrs SingaporeSingapore 4545nn SNCFSNCF 6 yrs6 yrs FranceFrance 4343nn Savannah (Georgia)Savannah (Georgia) 6 yrs6 yrs USAUSA 4141nn PortsmouthPortsmouth 7 yrs7 yrs UKUK 3838nn FordFord 3 yrs3 yrs USAUSA 1010

2002, Annual Results 2002, Annual Results –– March 2003March 2003 1212nn WaterWater nn WasteWaste nn EnergyEnergy servicesservices nn TransportationTransportation

nn PoznanPoznan 25 25 yrsyrs PolandPoland 1,7001,700nn BP Lavera BP Lavera 12 12 yrsyrs FranceFrance 498498nn " "" " 11 11 yrsyrs FranceFrance 387387nn ResonorResonor 24 24 yrsyrs FranceFrance 437437nn AhlstromAhlstrom 10 10 yrsyrs UKUK 7272nn Manuli Manuli FilmsFilms 10 10 yrsyrs ItalyItaly 7070nn ArcelorArcelor 15 15 yrsyrs FranceFrance 6565nn ViryViry--ChâtillonChâtillon 24 24 yrsyrs FranceFrance 4848nn AulnayAulnay 12 12 yrsyrs FranceFrance 4242nn MajidMajid 10 10 yrsyrs United Arab EmiratesUnited Arab Emirates 4141nn ParmeParme 9 9 yrsyrs ItalyItaly 3434nn FortalezzaFortalezza 5 5 yrsyrs BrazilBrazil 3131nn SetuzaSetuza 15 15 yrsyrs MoraviaMoravia 2929nn FuturoscopeFuturoscope 3 3 yrsyrs FranceFrance 2626nn ATM MilanoATM Milano 5 5 yrsyrs ItalyItaly 2323nn RhodiaRhodia 15 15 yrsyrs FranceFrance 2121nn Prince Charles Prince Charles HospitalHospital, Wales, Wales 20 20 yrsyrs UKUK 1818

In €mIn €m Backlog

Main municipal and industrial contractsOrder backlog won in 2002: €30 billionMain municipal Main municipal and industrial contractsand industrial contractsOrder backlog won in 2002: €30 billion

nn BostonBoston 5 5 yrsyrs USAUSA 1,0001,000nn JerusalemJerusalem TramwayTramway 27 27 yrsyrs IsraelIsrael 459459nn RikstrafikenRikstrafiken 5 5 yrsyrs SwedenSweden 190190nn EmEm--SenneSenne--Weser Weser 10 10 yrsyrs GermanyGermany 180180nn CertusCertus 10 10 yrsyrs SloveniaSlovenia 170170nn DublinDublin 5 5 yrsyrs IrelandIreland 157157nn Bus Bus SleskaSleska 20 20 yrsyrs Czech RepublicCzech Republic 124124nn Washington D.C. Washington D.C. areaarea 5 5 yrsyrs USAUSA 8080nn EskilstunaEskilstuna 6 6 yrsyrs SwedenSweden 5656nn Los AngelesLos Angeles 5 5 yrsyrs USAUSA 5050


55% of revenue 55% of revenue earned outsideearned outside France but France but low low exposure exposure to to the emerging marketsthe emerging markets

Other Other 2%

FranceFrance45%

Rest of Europe Rest of Europe 35%

North America North America 12%

8% of revenue earned in countries rated ≤ A-

Latin America Latin America 2%

Asia Asia 4%


nnWaterWater

nnWasteWaste

nn EnergyEnergy servicesservices

nn TransportationTransportation

nn FCCFCC

In In €€mmDec. 31,

2001Dec. 31,

2001 2002/2001

Revenue by Division : Revenue by Division : growing despite growing despite a a weak weak economic climateeconomic climate

Dec. 31, 2002

Dec. 31, 2002

Organic growth Organic growth at constant at constant

exchange ratesexchange rates

11,28811,288

6,1396,139

4,5714,571

3,4223,422

2,6532,653

11,02711,027

5,9145,914

4,0174,017

3,0993,099

2,4552,455

+2.4%

+3.8%

+13.8%

+10.4%

+8.1%

+4.0%+4.0%

+5.0%+5.0%

+6.3%+6.3%

+4.5%+4.5%

+8.5%+8.5%

TOTALTOTAL 28,07328,073 26,51326,513 +5.9% +5.0%+5.0%


nnWaterWater

nnWasteWaste

nn EnergyEnergy servicesservices


nn FCCFCC

nn Holding Holding companycompany

nn Total Total core businessescore businesses

In In €€mm 2002 margin2002 margin

RecurrenceRecurrence of cash of cash flows flows : : Water and Waste Water and Waste generate generate 70% of70% of EBITDAEBITDA

Dec. 31, 2002Dec. 31, 2002 r 2002/2001rr 2002/2001

nn NonNon--core businessescore businesses 160160

nn TotalTotal 3,8873,887

1,6041,604

949949

576576

291291

354354

(47)(47)

3,7273,727

14.2%14.2%

15.5%15.5%

12.6%12.6%

8.5%8.5%

13.3%13.3%

13.3%13.3%

+6.8%+6.8%

+1.8%+1.8%

+20.8%+20.8%

+13.1%+13.1%

+8.7%+8.7%

+7.1%+7.1%


TheThe world leader position in world leader position in Water Water strengthens thestrengthens the VE VE industrial industrial profileprofile

250116

244385

900

875

391221

112229

1,813

0

200

400

600

800

1000

1200

1400

1600

1800

2000

WaterWater Waste Waste (1)(1) Energy Energy servicesservices

TransportationTransportation FCCFCC TotalTotal

+2.9%+2.9% --1.4%1.4% +10.7%+10.7% +3.1%+3.1% +9.1%+9.1% +1.9%+1.9%DecDec..31, 02/31, 02/DecDec. 31, 01. 31, 01

1,8471,847

nn DecDec. 31, 2002. 31, 2002nn DecDec. 31, 2001. 31, 2001

AtAt constant constant exchangeexchange raterate +3.2%+3.2%+ 2.4%+ 2.4% + 9.0%+ 9.0% +2.9%+2.9% + 9.4%+ 9.4%

(In €m)(In €m)

+ 4.2%+ 4.2%(1)(1) +5% +5% excludingexcluding Proactiva at Proactiva at constant constant exchange exchange rate (Onyx scope)rate (Onyx scope)


nnWaterWater

nnWasteWaste

nn EnergyEnergyservicesservices


nn FCCFCCand Proactivaand Proactiva

In In €€mm CommentsCommentsMaintenanceMaintenance

The “J curve”: in the short term, growth impacts onThe “J curve”: in the short term, growth impacts onROIROI

GrowthGrowth

PudongPudong,,Czech RepublicCzech Republic, , MoroccoMorocco,,USAUSA

1,3231,323 2,4152,415

584584

383383

9696

108108

152152

1,2421,242

461461

340340

159159

213213

Major Major projectsprojects in France, Sheffield, in France, Sheffield, HampshireHampshire

ContractContract in in EstoniaEstonia, , PoznanPoznan in in PolandPolandAcquisition of Acquisition of VerneyVerney, Stockholm , Stockholm metrometro

Capital expenditure and investment acquisitions : €3.7bn, against€4bn in 2001


One business : One business : Environmental Environmental ServicesServicesStrengtheningStrengthening of of the core the core business in 2002business in 2002

Bristol Bristol WaterworksWaterworks

Filtration & Filtration & SeparationSeparation

Plymouth Plymouth ProductsProducts

Philadelphia Suburban CorpPhiladelphia Suburban Corp. .

SouthSouth StaffordshireStaffordshire

DistributionDistribution

BonnaBonna SablaSabla

MiscellaneousMiscellaneous tangible tangible assetsassets

Other financial disposalsOther financial disposals

TOTALTOTAL

FebruaryFebruary 0202

AprilApril 0202

SeptemberSeptember 0202

SeptemberSeptember 0202

OctoberOctober 0202

NovemberNovember 0202

DecemberDecember 0202

3737

378378

126126

207207

131131

472472

9898

203203

119119

€1,771m€1,771m

In €mIn €m

Over €1.7 billion in completed disposals: beyond target


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)

èè Cash flow from operationsCash flow from operations +13%+13%èè Maintenance capital expenditureMaintenance capital expenditure

Cash flow available before growth Cash flow available before growth +36%+36%

èè Capital expenditure for growthCapital expenditure for growthèè Disposal of assetsDisposal of assetsèè Change in scope of consolidationChange in scope of consolidationèè Change in working capital requirementChange in working capital requirement

Cash flow before financial transactionsCash flow before financial transactions

èè Change in capitalChange in capitalèè Impact 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 increase

Net debt at start of year 2002Net debt at start of year 2002

Net 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

nn 20002000 nn 20012001 nn 20022002 nn 20002000 nn 20012001 nn 20022002

Net debt / EBITDA (x)

+32%+92%

Profitable growth : FFO +32% in 2 years at € 2.7G; potential FCF (before growth) : € 1.4 GProfitable Profitable growth growth :: FFOFFO +32% in 2 +32% in 2 years at years at € 2.7G; € 2.7G; potentialpotential FCFFCF ((before growthbefore growth) : € 1.4 G) : € 1.4 G

Cash Cash flow from operationsflow from operations Cash Cash flow available flow available before growthbefore growth

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


Industrial flexibility Industrial flexibility : VE : VE can affordcan afford to balance to balance growth growth // FCFFCF

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

nn PProfitabilityrofitability improvement: increase inimprovement: increase in ROCE ROCE for for each each division, division, based on:based on:

èèMaturing of contracts signed since 1999Maturing of contracts signed since 1999

èèProductivity improvement effortsProductivity improvement efforts

èè Implementation of synergiesImplementation of synergies

èèSelective investment policySelective investment policy

èèActive management of asset portfolioActive management of asset portfolio


Key Key indicatorindicator:: ROCEROCE

nn A suitable tool for growth/capital decisionsA suitable tool for growth/capital decisions

èè Strong potential growth and synergiesStrong potential growth and synergies

èè Context of scarce capitalContext of scarce capital

nn A consistent and A consistent and measurable measurable operating indicatoroperating indicator

nn 2002 group2002 group ROCEROCE: 6.: 6.44%% (including 2% impact from major (including 2% impact from major acquisitionsacquisitions

Capital employed = Capital employed = Gross goodwill Gross goodwill -- amortization+ fixed assetsamortization+ fixed assets+ working capital requirements+ working capital requirements+ equity method securities+ equity method securities–– provisions for risks and liabilities provisions for risks and liabilities –– other LT other LT liabilitiesliabilities

(EBIT (EBIT –– group tax + cogroup tax + companies accounted mpanies accounted for by for by equity methodequity method))ROCE ROCE (1)(1) = =

Average capital employed for the yearAverage capital employed for the year

(1)(1) These These figures are figures are calculated based calculated based on data for on data for the core businessesthe core businesses..


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

Permanent balance between growth and FCFPermanent balance Permanent balance between growth andbetween growth and FCFFCF

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


3. 3. Financial Financial ProfileProfile

Success in 2002:Strengthening of financial flexibility

2003 Target:To extend debt maturityusing the bond markets


Financial flexibility improved :Financial flexibility improved :1- Renegotiation of covenants

nn Extension of Extension of average debt maturityaverage debt maturity overover 4 years

nn Significantly stronger financialSignificantly stronger financial ratios: 40% ratios: 40% improvementimprovement in in

coverage coverage ratio in ratio in two yearstwo years

5.15.1

3.43.4

4.84.8

3.83.8

20012002

Financial ratiosFinancialFinancial ratiosratios

3.73.7

4.04.0

2000

nn EBITDAEBITDA//financial expensefinancial expense (x)(x)nn Net Net debtdebt//EBITDAEBITDA (x)(x)

CovenantsCovenantsCovenants

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

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

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


In In €€mm

FinancialFinancial resultresult : € 150 M : € 150 M improvement improvement in 2002in 2002

nn Cost of financingCost of financingnn Other financial income and expensesOther financial income and expenses

RecurringRecurring

èè AmortAmort. of premium (mainly . of premium (mainly OcéaneOcéane) ) èè OtherOther

NonNon--recurringrecurring

èè Capital gain from PSC disposalCapital gain from PSC disposalèè Depreciation of treasury stockDepreciation of treasury stockèè OtherOther

nn Net Net financial resultfinancial result

AverageAverage 2002 2002 interest interest rate rate 4.25% (2001 : 4.85%)

20012001

(764)(764)(34)(34)

(798)(798)

(33)(33)88

20022002

(681)(681)(25)(25)

(648)(648) 150150

rr8383

5858

110110(32)(32)(20)(20)


EUREUR 68%68%USD 22%USD 22%

OthersOthers 10%10%

Fixed Fixed rates 51%rates 51%

FloatingFloating rates 49%rates 49%

Structure of Structure of gross debtgross debt

Currency Type of rate(after hedging)


Syndicated loans19%

Océanes9%

Commercial paper7%

Bilateral facilities 39%

Bonds26%

Diversification of Diversification of fundingfunding sourcessources


62%Vivendi Environnement

Subsidiaries12%

Project Financingstructures

12%

Proportionalconsolidation14%

BorrowersBorrowers withinwithin VEVE

84%Vivendi Environnement

Subsidiaries16%


2003 Target : continue extension of 2003 Target : continue extension of average debt average debt maturitymaturity : ~ 4 : ~ 4 yearsyears atat thethe end of 2002end of 2002

0

500

1000

1500

2000

2500

3000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

> 201

4

In M€In M€

nn BondsBonds nn BanksBanks

Bonds 5.7 billion €Bonds 5.7 billion €

LTLT Banking Debt Banking Debt 7.4 billion €7.4 billion €

The bond market is a natural source of funds for the Group.


LTLT Ratings : S&P Ratings : S&P ààBBBBBB+ / O s+ / O sMoody’sMoody’s ààBaa1 / O Baa1 / O --

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

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

èè Removal of all ratings triggersRemoval of all ratings triggers

èè Easing of covenant levelsEasing of covenant levels

èè Extension of the average debt maturityExtension of the average debt maturity

èè BBB+ rating stableBBB+ rating stable


LTLT Ratings : S&P Ratings : S&P ààBBBBBB+ / O s+ / O sMoody’sMoody’s ààBaa1 / O Baa1 / O --

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

èèThe 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

èèThe last press release on March 3rd states : “The last press release on March 3rd states : “ VEVE has made 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.”


The 2002 financial results strengthen thesoundness of our business model

n Strong stability in cash flows secured by a total backlog of more than 10 years revenue

n Low sensitivity to economic position, especially in Water business

nLow customer risk

n Low country risk

The group became mature in 2002. This “emancipation” will be totally achieved with the change of corporate structure and the change of name (on the agenda of the next shareholder’s meeting).


Our 2003 targets

nn Ratios : improvement Ratios : improvement èè2003 : positive free cash2003 : positive free cash--flows after disposals and flows after disposals and

growth growth capexcapexèè≥≥ 2004 : 2004 : positive free cashpositive free cash--flowsflows

nn Debt : Debt : èèStabilization or even reductionStabilization or even reductionèèExtension of duration by using bond marketsExtension of duration by using bond markets

nn Rating : Rating : èèMaintain or even improve our LT and ST ratingsMaintain or even improve our LT and ST ratings


n Jérôme ContamineSenior Senior ExecutiveExecutive Vice Vice President and Chief Financial OfficerPresident and Chief Financial Officer

n Philippe MessagerSenior Vice Senior Vice President President –– Group Group TreasurerTreasurer

38 Avenue Kléber 38 Avenue Kléber –– 75116 Paris / France75116 Paris / FrancePhone Phone numbernumber:: +33 1 71 75 01 70+33 1 71 75 01 70Fax:Fax: +33 1 71 75 10 13+33 1 71 75 10 13

EE--mail: philippe.messager@mail: [email protected] Nathalie Pinon

Director Director of of Investor Investor RelationsRelations38 Avenue Kléber 38 Avenue Kléber –– 75116 Paris / France75116 Paris / FrancePhone Phone numbernumber:: +33 1 71 75 01 67+33 1 71 75 01 67Fax:Fax: +33 1 71 75 10 12+33 1 71 75 10 12

EE--mail: nathalie.mail: nathalie.pinonpinon@@groupvegroupve..comcom

Web Site: http//Web Site: http//wwwwww..vivendienvironnementvivendienvironnement--finance.finance.comcom

Vivendi Environnement representatives

slide presentation analyst meeting

Business

vivendi universal vu

annual results

n dividend

n ebit1

n ebitda3

n net income

n net debt13

vivendi environnements