key figures as of september 30, 2012

Key figures as ofSeptember 30, 2012

Conference call on November 7, 2012

Pierre‐François RiolacciChief Finance Officer

Investor Relations , key figures as of September 30, 2012

2

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 for the nine months ending September 30, 2012


4

Key figures for nine months ending September 30, 2012

Revenue 23,963 20,913 21,599 3.3% 1.3% (4)

Adjusted operating cash flow 2,391 2,077 1,946 ‐6.3% ‐8.0%

Adjusted operating cash flow excluding Dalkia Italy write‐downs

2,077 2,034 ‐2.0% ‐3.7%

Adjusted operating income 1,251 1,118 841 ‐24.8% ‐25.8%

Adjusted operating income excluding Dalkia Italy write‐downs

1,118 930 ‐16.9% ‐17.9%

Operating income (2) 568 446 718 +61.0% +59.4%

Free Cash Flow (3) +58 +58 ‐72

Net financial debt 15,045 15,045 15,176

Sept. 30, 2011

published

Sept. 30, 2011 re‐presented(1)

Sept. 30, 2012

ΔConstant

FXΔIn €M

(1) To ensure the comparability of periods, the first nine months 2011 financial statements have been re‐presented to include:‐ the impact of the reclassification into “net income from discontinued operations” of operations in the process of being sold such as the whole Veolia Transdev income (from March 3rd to September 30th 2011) except the activities of the group Société Nationale Maritime Corse Méditerranée (SNCM) the Solid waste activities in the United States in the Environmental Services division, and the public lighting activities (Citelum) in the Energy Services division;‐ the impact of the reclassification into “net income from discontinued operations” of divested activities such as the regulated activities in the United Kingdom in the Water division;‐ 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, whose divesture process was interrupted in the second semester of 2011.For the record, as of September 30,2011, the Transportation Division as a whole (from January 1st to March 3rd, 2011) was reclassified into “net income from discontinued operations”.

(2) Non recurring items include impairment losses on goodwill recorded in respect of Company subsidiaries as of September 30,2011 in Southern Europe and the United States and Impairment losses on non‐current assets recorded in the respect of Company subsidiaries mainly in Italy.

(3) 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.

(4) +1.0% at constant scope & FX


Water

• France: more than 100 contract renewals

• New industrial contracts in Asia :

Gain of the industrial water and energy optimization contract of Chengde Iron (China): €44M of cumulated revenue over 7 years

Environmental Services

• France : contract renewals at September‐end > €220M, and new contracts > €45M (cumulated revenue)

• USA : contract renewals at September‐end > $350M (cumulated revenue)

• China: New concession contract, in partnership with a Chinese company, for a hazardous waste treatment facility in Changsha (Hunan Province) : cumulated revenue of €320M over 25 years

Energy Services

• New contracts for more than €194M of annual revenue, of which 50% in France, the rest in Central Europe and China. Examples:

France: Industrial utilities for Ajinomoto Eurolysine in Amiens : Cumulated revenue of €23M over 12 years

Slovakia: First EPC contract of Energy services for 74 schools in Kosice : cumulated revenue of €80M over 18 years

Commercial Development

5


6

Water: Revenue stable at constant scope & FX in Q3, similar to Q2, with improvement in Operations activities and lower growth in Technologies & Networks

• Operations: flat revenue in Q3 at constant scope & FX, versus ‐2.9% in Q2 due mainly to France (+2.7% versus ‐1.5%)

Stabilized volumes and favorable indexations in the 3rd quarter

Environmental Services: revenue declined 3.4% at constant scope & FX in Q3, versus ‐5.7% in Q2:

• Geographic refocusing: cessation and restructuring of certain activities in North Africa and Italy

• Recycled raw material prices below 2011 historically high levels

Impact at Sept.30, 2012 of roughly ‐€143M on revenue

• Impact of lower volumes limited to ‐1% for the 9 months in a difficult environment, particularly in the UK and Germany for industrial customers

• Good resilience in France, particularly in hazardous waste and incineration

Energy Services: revenue increased 5.3% at constant scope & FX in the nine months, similar to H1 trend

• Higher energy prices: positive impact of €176M vs. 9M 2011

Good resilience of activities in a difficult environment (1/2)


7

Good resilience of activities in a difficult environment (2/2)

Improvement in 3rd quarter adjusted operating cash flow to €562M versus €544M in Q3 2011

• Favorable base effect (operational difficulties in Q3, 2011)

• Limited restructuring costs recorded in Q3

• 3rd quarter adjusted operating cash flow increased 3.3%, after a decline of 3.2% in Q1 and ‐19.6% in Q2 (including the receivables write‐down in Italy)

• At September 30, 2012: YTD adjusted operating cash flow declined 8% at constant exchange rates (‐3.7% excluding the receivables write‐downs in Italy) to €1,946M,versus ‐10.6% at constant exchange rates for the half year ended June 30, 2012

Adjusted operating income in Q3 followed the same trend as H1 2012

• At September 30, 2012: YTD adjusted operating income declined 25.8% at constant exchange rates (‐17.9% excluding the receivables write‐down in Italy) to €841M


8

Net financial debt of €15.2 billion

Seasonal movement in WCR: ‐ €648M (‐€542M at September 30, 2011)

YTD Gross investments of €2,244M, versus €1,846M at September 30, 2011

• Reinvestment of 10% in UK regulated water business (€44M): guaranteed return of 9%

• Buyback of minorities in our Water activities in Czech Republic for €79M, and in the Azaliya JV for €246M

• Increase in growth investments in Energy Services

Asset divestments and transactions in process

• Asset divestments of €1,660M in YTD September 30, 2012

• Closing of the U.S. solid waste divestment expected before end of November

• VTD Memorandum of Understanding signed with the Caisse des Dépôts

• Berlin: equity method accounting for our participation as of November 1, 2012 => net debt reduction of about €1.4 billion

In Q4, the Company should generate FCF of €2.5 to €3 billion

Net financial debt


9

Convergence Plan implementation (1/2)

Efficiency Plan: €105M in net savings for the YTD ending September 30, 2012 (impact on operating income)

Cost reductions/ Convergence 1 : €45M net savings for the YTD ending September 30, 2012 (impact on operating income)

As of June 30, 2012

Adj. Op. Income Projection 2012

Convergence 1 Adj. Op. Cash Flow

Adj. Op. Income

Adj. Op. Cash Flow

Adj. Op. Income

At June 30

At Sept. 30

Gross savings 59 59 94 94 109 117

Implementation costs

‐25 ‐32 ‐45 ‐49 ‐59 ‐63

Net savings 34 27 49 45 50 54

As of September 30, 2012


10

Breakdown of net savings by geography at Sept. 30, 2012

17%

7%

5%

11%

4%13%

33%

10%

France

North America &Australia

Latin America andSouthern Europe

Asia, Africa, MiddleEast

Central & EasternEurope

Northern Europe

Corporate HQ

Other

Breakdown of net savings by lever at Sept. 30, 2012

33%

59%

7%

1%

Purchasing

OrganizationalEfficiency

IT costs

ExternalExpenses

In €M

Impact at Sept. 30, 2012:

303 contributing projects

€94M gross savings

€45M net savings (Op.income)

325 projects approved

Convergence Plan implementation (2/2)

100

6075

109 117

‐80

‐38‐52 ‐59 ‐63

2012Objective

Feb. 172012e

Apr. 27 2012e

July 202012e

Oct. 31 2012e

Implementation costs

Gross cost savings


(1) Before closing 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 payments on

operating financial assets)(5) ±5%

2012‐2013:Transition period

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

• Cost reduction in 2013: gross impact of €270M and net(2)

impact of €170M on operating income

• Commitment on dividend policy

→ €0.70(3) per share in 2012 paid in cash or in

shares

→ €0.70(3) per share in 2013

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 €500M and net(2)

impact of €470M on operating income

Mid‐term objectives confirmed

11

Appendices


13

Summary of Appendices

Appendix 1 : Main 9M 2011 re‐presented figures IFRS 5

Appendix 2 : Impact of variations in foreign exchange rates during the 9 months

Appendix 3 : Revenue by quarter

Appendix 4 : Revenue by geographic region

Appendix 5 : Revenue by division

Appendix 6: Water

Appendix 7: Environmental Services

Appendix 8 : Energy Services

Appendix 9: Quarterly evolution of net financial debt

Appendix 10: Evolution of recycled raw material prices

Appendix 11 : Main impacts of French fiscal tax laws and proposals 2012 & 2013


(€M) 9M 2011published

9M 2011Re‐presented (1 )

Revenue 23,963.4 20,913.4Adjusted operating Cash Flow 2,391.2 2,076.9Adjusted operating income 1,250.9 1,118.1Operating income(2) 568.0 446.1Free Cash Flow (3) +58.0 +58.0

Appendix 1: Main 9M 2011 re‐presented figures IFRS5(1)

14

(1) To ensure the comparability of periods, the first nine months 2011 financial statements have been re‐presented to include:‐ the impact of the reclassification into “net income from discontinued operations” of operations in the process of being sold such as the whole Veolia Transdev income (from March 3rd to September 30th 2011) except the activities of the group Société Nationale Maritime Corse Méditerranée (SNCM), the Solid waste activities in the United States in the Environmental Services division and the public lighting activities (Citelum) in the Energy Services division;‐ the impact of the reclassification into “net income from discontinued operations” of divested activities such as the regulated activities in the United Kingdom in the Water division;‐ 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, whose divesture process was interrupted in the second semester of 2011.For the record, as of September 30,2011, the Transportation Division as a whole (from January 1st to March 3rd, 2011) was reclassified into “net income from discontinued operations”.

(2) Non recurring items include impairment losses on goodwill recorded in respect of Company subsidiaries as of September 30,2011 in Southern Europe and the United States and impairment losses on non‐current assets recorded in the respect of Company subsidiaries mainly in Italy.

(3) 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.


15

Appendix 2: Impact of variations in foreign exchange rates during the 9 months

Depreciation of the euro 9M 2012 / 9M 2011

Average rate Closing rate

• Australian dollar +8.5% +10.7%

• U.K. pound sterling +6.8% +7.9%

• U.S. dollar +8.9% +4.2%

• Chinese renminbi yuan +11.3% +5.7%

Impacts on key Company figures• Revenue +€408M

• Adjusted operating cash flow +€36M

• Adjusted operating income +€11M

• Increase in net financial debt €265M


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Appendix 3: Revenue by quarter

1st quarter 2nd quarter 3rd quarter

2011

Re‐presented(1)

2012 Δconstant

scope &

FX

2011

Re‐presented(1)

2012 Δconstant

scope &

FX

2011

Re‐presented(1)

2012 Δconstant

scope &

FX

Water 2,880.2 3,018.7 +5.2% 3,047.2 3,076.7 ‐0.3% 3,024.7 3,113.5 ‐

Environmental

Services

2,196.3 2,197.0 ‐1.1% 2,357.3 2,284.8 ‐5.7% 2,252.5 2,269.0 ‐3.4%

Energy Services 2,286.6 2,502.6 +6.2% 1,311.2 1,418.0 +5.6% 1,179.4 1,260.6 +3.4%

Other 120.5 132.9 ‐3.6% 104.6 150.0 +40.7% 152.9 175.3 +11.6%

Company 7,483.6 7,851.2 +3.5% 6,820.3 6,929.5 ‐0.4% 6,609.5 6,818.4 ‐0.3%

Variation at

current scope & FX

+4.9% +1.6% +3.2%

(1) See note 1 Appendix 1 (IFRS 5) and IFRS 8 reclassifications

In €M


17

Appendix 4: Revenue by geographic region

Δ Δ constant FX

Δ excl. FX & scope

Central & Eastern Europe +13.0% +16.3% +7.5%

France +3.1% +3.1% +3.4%

Europe excl. France and Central & Eastern Europe

‐4.1% ‐6.2% ‐4.9%

United States +8.4% ‐1.2% ‐0.7%

Asia Pacific +9.4% ‐0.4% +1.8%

Rest of the world +7.4% +5.9% +2.6%

Total +3.3% +1.3% +1.0%1,531 1,6432,089 2,2861,246 1,351

5,786 5,551

8,327 8,583

1,934 2,18520,913 21,599

In €M

(1) See note 1 Appendix 1

Nine months Sept. 30,

2012

Nine months Sept. 30, 2011 (1)


18

ΔΔ

constant FX

Δ excl. FX & scope

Water +2.9% +0.9% +1.6%

Environmental Services ‐0.8% ‐3.8% ‐3.4%

Energy Services +8.5% +8.2% +5.3%

Other +21.2% +19.0% +14.8%

Total +3.3% +1.3% +1.0%

(1) See note 1 Appendix 1

in €M

6,806

8,952

9 064

Nine months Sept. 30, 2011 (1)

20,91321,599

4,777

6,751

9,209

Nine months Sept. 30, 2012

5,181

378 458

Appendix 5: Revenue by division


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Appendix 6: Water:Revenue increased 2.9% to €9,209M

Operations: Revenue of €6,435M, stable at constant scope & FX compared to Sept. 30, 2011: improvement in Q3, with stable revenue compared to a decline of 2.9% in Q2

• France: revenue increased at constant scope by 2.7% in Q3 versus a decline of 1.5% in Q2: volumes stabilized in Q3 and favorable indexation despite continued contractual erosion

• Outside France: stable revenue +0.5% (‐0.6% at constant scope & FX); good performance in Central Europe and China, but lower revenue in Berlin (lower prices mandated by FCO), in Australia (end of Adelaide contract) and in the US (end of the Indianapolis contract)

Technologies & Networks: Revenue increased 8.5% (+5.1% at constant scope & FX)

• Slowdown in revenue growth in Q3

2,557 2,774

6,4356,395

2011* 2012

OperationsTechnologies & Networks

* The 2011 financial statements have been re‐presented in order to ensure comparability of periods for the U.K regulated Water activities

8,952 9,209 +2.9%

+0.6%

+8.5%

Nine months revenue at September 30 (€M)


20

Appendix 7: Environmental ServicesStable revenue at €6,751M

France (+0.4% at constant scope, comparable to June 30): stronger activity levels, notably in hazardous waste treatment and incineration, as well as higher recycled volumes and certain price increases offset the unfavorable effect of recycled raw material pricesUK (‐5.4% at constant scope & FX, versus ‐7.4% at constant scope & FX at June 30): decline in landfill volumes partially compensated by increased tonnage incinerated (New Haven)Germany (‐14.0% at constant scope) : impact of lower prices and volumes of recycled raw materialsUSA (+0.3% at constant scope & FX): primarily due to hazardous waste treatment

Price and volumes of recycled materials ‐2.2 %

Waste volumes & level of activity ‐1.0 %

Service price increases +0.7 %

Other ‐1.0 %

Foreign exchange +3.0%

Scope ‐0.4%

2011* 2012

6,806 6,751‐3.4%

constant scope &

FX

Revenue variation 9M2012 / 9M2011 : ‐0.8%

* The 2011 financial statements have been re‐presented in order to ensure the comparability of periods for the U.S. Solid Waste activities

In €M 2011 2012 Variation Δconstant scope &

FX

1st quarter 2,196 2,197 ‐ ‐1.1%

2nd quarter 2,357 2,285 ‐3.1% ‐5.7%

3rd quarter 2,253 2,269 +0.7% ‐3.4%

9 months 6,806 6,751 ‐0.8% ‐3.4%

Revenue growth by quarter



21

Appendix 8: Energy ServicesRevenue increased 8.5% to €5,181M

Revenue increased 8.5% (+5.3% at constant scope & FX) to €5,181M, versus +5.9% for the YTD at June 30 (Q3 was not significant in terms of trends)• Higher energy prices : positive impact of €176M vs. 2011 and favorable weather impact (+€48M)

In France, revenue increased 9.6% (+10.8% at constant scope)• Good contractual performance, favorable weather and price effects (increase in average fuel basket prices of 15.4%)

Outside France, revenue increased 7.5%, (and was stable at constant scope & FX)• Central & Eastern Europe* remains the primary geographic zone of growth (revenue increase of +20.7% and +5.6% at constant scope & FX) despite lower electricity sales in the Czech Republic and the end of cogenerated energy subsidies in Hungary

• Italy: continued restructuring of Siram, in light of planned divestment

2,3812,172

2,8002,605

2011** 2012

France Outside France

* Poland, Czech Republic, Slovakia, Hungary, Bulgaria, Romania, Baltic countries* * The 2011 financial statements have been re‐presented in order to ensure comparability of periods for the Citelum activities

4,7775,181 +8.5%

+7.5%

+9.6%



22

Appendix 9: Net financial debt

15,176

14,69315,021

14,73015,045

14,76414,511

16,528

16,82016,827

15,909 15,76715,21815,37715,127

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

30-Jun-12

30-Sep-12

In €M


23

Appendix 10: Evolution of recycled material prices

0

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60

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apr 0

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apr 1

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apr 1

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12au

g 12

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2012

0

50

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450

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Cardboard Paper Metals


24

Appendix 11: Main impacts of French fiscal tax laws and proposals in 2012 and 2013

Deductibility of financial interest expense paid in France limited to 85% in 2012, then 75% en 2013• As a result of the fiscal deficit situation of Veolia in France, this measure will not have a significant near term impact on income tax expense

Taxation of 3% on dividend distributions paid in cash• On the basis of a dividend of €0.70 per share, impact of roughly €11M

Increase in social charges on employee profit sharing plans and incentives on Group savings plans• Impact limited to roughly €5M

Tougher stance on utilization of tax loss carryforwards: 50% above €1M (instead of 60%)


Investor Relations contact information

Ronald Wasylec, Senior Vice President, Investor Relations

Telephone +33 1 71 75 12 23

e‐mail [email protected]

Ariane de Lamaze

Telephone +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.com25

key figures as of september 30, 2012

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