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INVESTOR DAY
October 22nd, 2008




                     1
Important 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 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.




                                                                INVESTOR DAY October 2008   2
Veolia Transport

Cyrille du Peloux




                    3
Veolia Transport's business

              Ground transportation services for passengers,
           regulated by local authorities within a regional territory
                 Urban public transit systems (bus, light rail, metro, taxis)
                   Regional public transportation systems (coaches, trains)



  Extensions:
   – Ferry services regulated by local authorities
   – Open-access transportation on demand
   – Rail freight and associated logistics
                                                                   2007 revenue: €5.6bn
  Key figures:
                                                                                  3% 6%
   –   2007 revenue: €5.6 billion
   –   82,000 employees
   –   40,000 vehicles operated
   –   2.5 billion passenger journeys                                          91%

   –   5,000 local authority clients                           Industrials
   –   30 countries                                            Customers / Non regulated
                                                               Public authorities
                                             INVESTOR DAY October 2008   4
Business breakdown by region and mode

         77% of business generated in Europe, 86% on the 6 key countries


2007 revenue by
                           BUS /        RAIL /
region & mode             COACH        METRO
                                                 TOD*    FERRIES        FREIGHT        OTHER      Total
in €m
France                      1,641          23       0          314                40    167    2,185      39%
Europe excl.
                            1,157         685     70            70                82     48    2,111      38%
France
           Germany             155        329       0             0               77      0      561      10%

            Sweden             237        273       2            10                0      0      521       9%

         Netherlands           175         48      68             7                5      1      304       5%

             Norway             84          2       0            54                0     40      181       3%

North America                 468         191     80              0                0      0     739       13%
Australia /
                               99         410       0             0                0      0     509       9%
New Zealand
Other                          46           5       0             0                0      0      51       1%
Total                       3,411       1,313    150           384               122     215   5,595

                                                 INVESTOR DAY October 2008   5
                       * Open access
The transportation markets


  A significant market: €460bn
   – Passenger road transportation: France €10bn / USA €12.3bn
   – Regional passenger rail transportation: Germany €8bn

  Fast-growing accessible markets: €70bn
   – Growth in the accessible market:
        • France + 5% in volume in bus and coach activity
        • USA    + 5% in the USA
   – Opening of new markets: rail in Europe and USA

  Sustainable market drivers not very
  dependant on economic cycles
   –   Urban concentration and ageing population
   –   Environmental awareness
   –   Constraints on public financing capacities
   –   Rising fossil energy prices
                                          INVESTOR DAY October 2008   6
Veolia Transport's market position


Leading player in key markets
  – France:       1st private operator in intercity transportation
                  2nd in urban transit
  –   Germany: 1st private operator in regional rail transportation
  –   Netherlands:2nd private operator in passenger transportation
  –   Sweden:     1st private operator in urban transit
  –   USA:        1st private operator in urban & suburban transit
                  1st operator in transportation on demand
  –   Australia:  1st private operator in ground public transit


References in every mode of transportation
  – Stockholm Metro
  – Commuter rail in Melbourne, Boston and Bremen
    (contract won in 2008)
  – Regional rail services in Germany
    (Marschbahn, NordHarz, etc.)
  – Urban systems in Nice, Rouen, Las Vegas
  – Multimodal contract in Limburg in the Netherlands
                                              INVESTOR DAY October 2008   7
Veolia Transport’s passenger public transit activity


 A solid contractual base
  – Average length 6 to 7 years
  – Renewal rate of 85% in 2007-08 (France, USA)
 Revenues:
  – Secured cash flow paid by public sector indexed with
    cost parameters
  – Development towards commercial and operational
    performance regime and incentives
 Low capital intensity
  – Assets already provided in 44% of cases
    (of the 25 leading contracts)
  – WCR < 0 (source)
 High free operating cash flow* on maturity
  – France 2007: €71m (4.2% of revenue)
  * Before tax

                                       INVESTOR DAY October 2008   8
Synergies with Veolia Environnement and its divisions


 Synergies in terms of business development
   –   Ireland
   –   Israel
   –   China
   –   India

 Synergies in terms of innovation and R&D
   – Biofuels and biogaz with Veolia Environmental Services
   – Recyclotm 3FM recycling unit of wash water with
     Veolia Water

 Synergies in terms of customer care
   – Pooling of call centers with Veolia Water
        • Nice
        • Ile-de-France

                                         INVESTOR DAY October 2008   9
Financial data


    €m                      2006          2007              H1 2007       H1 2008

    Revenue                 4,957         5,595                 2,726      2,972

    EBITDA                  286            280                   127        146

    EBITDA margin           5.8%          5.0%                  4.7%       5.0%

    EBIT                     14            130                       73     64

    Recurring EBIT          100            115                       48     63

    Recurring EBIT margin   2.0%          2.1%                  1.8%       2.1%

    Capital employed
                            1,405         1,634                 1,667      1,775
    (on closing)

    ROCE before tax         7.4%          7.6%                       ns     ns

                                    INVESTOR DAY October 2008   10
Our "Full Potential" plan


 Reinforce leadership positions in target countries
  – France, USA, Germany, Australia, Sweden and the Netherlands
 Important turn around on loss-making contracts
  – Achieved for the transit activity in the USA
  – Sustainable improvement in the “Marschbahn”
    contract in Germany
  – Under way for the Brabant and Limburg contracts
    (Netherlands), return to profitability expected end 2008
 Withdraw from unprofitable/non-core
 countries and activities
  – Denmark and Algeria in 2007
  – Lebanon in 2008
 Efficiency Plan:
  – Tighter organization: elimination of regional structures,
    target-based management
  – Reduction of SG&A, Purchasing Plan
    and Fleet Management                  INVESTOR DAY     11
                                                    October 2008
2008: key achievements


  Improvement in results in the first half of 2008
    – Improvement in profitability (recurring EBIT): 2.1% (H1 2007: 1.8%)
    – Significant improvement in EBITDA to €146m
    – Positive free operating cash flow before pre-financing


  Over the whole year, EBIT, EBITDA and FCF should be up on 2007
  despite tough conditions
    – Increase in fuel prices (annual impact estimated at €35m)
    – End of reduction in social security costs in France
      (impact of €15m over the full year)




                                       INVESTOR DAY October 2008   12
2011: targets


         €m                                                          2007                       2011 targets

                                                                                                  CAGR:
         Revenue                                                     5 595
                                                                                                 6% to 8%

                                                                                                > Growth in
         Recurring EBIT                                               115
                                                                                                  revenue

         ROCE before tax                                             7.6%                          11-12%



         Free operating cash flow                                    (46) *                     > 0 as of 2008




 * Before tax and excl. Nicoli (SNCM ship) and pre-financing
                                                               INVESTOR DAY October 2008   13
Our vision

              To be the reference in managing
               sustainable mobility solutions


  To become the long-term partner of local authorities, industrial
  clients and other government agencies that want to implement
  innovative, cost-effective and sustainable mobility solutions.


  To help our clients design, manage and operate integrated
  mobility solutions, in ways that measurably improve their
  economic and environmental performance.



                                 INVESTOR DAY October 2008   14
Key trends: integration of modes

    Optimized Multimodal System
                                                                        Veolia Transport Limburg
                                                                          Revenue : > 100 €M / yr
                                                                             1,125 employees
                                                                         Length of contract: 10 yrs
 235 buses          24 trains           250 taxis

      Integrated and intermodal


                                                                                NL

                 Mobility center


             Incentive model
                                                                           BE                     DE


                                                                                     Maastricht

             +20% of ridership (rail)               INVESTOR DAY October 2008   15
Key trends: towards sustainable mobility


 Our role in reducing greenhouse gas emissions
  – Increase attractiveness and ridership of transit systems
  – Continuously measure and control the environmental footprint of our
    activities through an Environmental Management System
  – Offer our clients clean and environmentally effective solutions
  – Raise our stakeholders' awareness of the
    environment and the positive impact of our activities


 Our solutions
  – Energy and the environment: biofuels, biogas,
    ANGO system, green depots, etc.
  – Intermodality solutions: mobility centers,
    information systems, ticketing, etc.



                                       INVESTOR DAY October 2008   16
Key trends: new partnership models


Growing transportation infrastructure requirements, in a context of rising
systems’ ridership and reduction in public financing

Veolia Transport is keen to develop long-term global contracts such as
PPP
  –   References: Leslys, Rouen, Barcelona
  –   Securing margins over the longer term through contracts for 30 years and over
  –   Command of infrastructure, key for local mobility
  –   Ideal model of participation:
       • Minority in global project
       • Majority in operating control and management




                                           INVESTOR DAY October 2008   17
Our future markets


  Regional rail lines                                           Veolia Transportation On Demand
                                                                          Performances
  –   Regional rail market in France: €2.9 billion                                 (North America)

  –   Gradual opening from 2010                                     EBIT* margin              EBITDA margin
  –   Advanced consultation with the Alsace Region                                                          19.8%
                                                                               17.9%
      concerning an invitation to tender in 2010                     14.5%                       14.6%


  Development of open-access transportation
  on demand in France and Europe
  –   Existing SuperShuttle model in the USA
                                                                         H1 2007                     H1 2008
  –   Start-up underway in the Paris Region                                  * excluding intangible amortization
  –   Capitalize on SuperShuttle clientele
      visiting France and Europe
  –   Top-notch development partners: Air France



                                        INVESTOR DAY October 2008   18
Our future markets



  High Speed Trains

    – Alliance Air France & Veolia Transport

    – High Speed rail transportation market in
      France and near European countries worth
      €10 billion (€6 billion in France), and
      undergoing steady growth

    – Opening of the market as of 2010 for open-
      access international links



                                   INVESTOR DAY October 2008   19
In conclusion

                       Veolia Transport:
    The reference in managing sustainable mobility solutions


   A growing market

   Contracts not very dependent on economic cycles

   Improvement in results under way

   A targeted development strategy


                                INVESTOR DAY October 2008   20
Appendix




           21
Veolia Transport’s open-access transportation on demand


  Contractual base developed in the USA
    –   Franchise contracts
    –   Single booking and itinerary management center
    –   Payment center
  Revenues: share of passenger revenues generated
  by franchised operations
    –   Built-in incentives to increase ridership
    –   Favorable context: higher fuel prices, greater demand for
        mass transit
    –   No collection risk
  Low capital intensity: vehicles owned
  by franchised operators
  Transfer of risk of cost variability:
  maintenance, insurance and fuel
  Structurally positive free operating cash flow
  before growth by acquisition
  Opportunities for growth by acquisition and
  consolidation of the market

                                                      INVESTOR DAY October 2008   22
Veolia Transport’s rail freight activity


 Contractual base: industrial clients, private-law contracts
  – Average length of contracts: 3 years
  – Very diversified client portfolio: 100 contracts
 Revenues:
  – Fixed component covering fixed costs provided for
    in the contract
  – Variable component linked to volumes transported
  – Indexation and revision formulas
    (wages, energy, time intervals)
 Challenges:
  – Covering fixed costs in start-up phase
  – Forecasting demand, given leadtimes for rolling out
    production means
  – Lease financing for rolling stock
 Increase in volumes over the last few years

                                           INVESTOR DAY October 2008   23
Investor Relations contact information


             Nathalie PINON, Head of Investor Relations
                  and Financial Communication
             38 Avenue Kléber – 75116 Paris - France
                  Telephone +33 1 71 75 01 67
                      Fax +33 1 71 75 10 12
               e-mail nathalie.pinon@veolia.com

        Brian SULLIVAN, Vice President, US Investor Relations
               200 East Randolph Drive, Suite 7900
                     Chicago, IL 60601 - USA
                  Telephone +1 (630) 371 2847
                      Fax +1 (630) 282 0423
               e-mail brian.sullivan@veoliaes.com

                             Web site
                    http://veolia-finance.com
                                 INVESTOR DAY October 2008   24

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Presentation and outlook of the Transportation Business

  • 2. Important 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 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. INVESTOR DAY October 2008 2
  • 4. Veolia Transport's business Ground transportation services for passengers, regulated by local authorities within a regional territory Urban public transit systems (bus, light rail, metro, taxis) Regional public transportation systems (coaches, trains) Extensions: – Ferry services regulated by local authorities – Open-access transportation on demand – Rail freight and associated logistics 2007 revenue: €5.6bn Key figures: 3% 6% – 2007 revenue: €5.6 billion – 82,000 employees – 40,000 vehicles operated – 2.5 billion passenger journeys 91% – 5,000 local authority clients Industrials – 30 countries Customers / Non regulated Public authorities INVESTOR DAY October 2008 4
  • 5. Business breakdown by region and mode 77% of business generated in Europe, 86% on the 6 key countries 2007 revenue by BUS / RAIL / region & mode COACH METRO TOD* FERRIES FREIGHT OTHER Total in €m France 1,641 23 0 314 40 167 2,185 39% Europe excl. 1,157 685 70 70 82 48 2,111 38% France Germany 155 329 0 0 77 0 561 10% Sweden 237 273 2 10 0 0 521 9% Netherlands 175 48 68 7 5 1 304 5% Norway 84 2 0 54 0 40 181 3% North America 468 191 80 0 0 0 739 13% Australia / 99 410 0 0 0 0 509 9% New Zealand Other 46 5 0 0 0 0 51 1% Total 3,411 1,313 150 384 122 215 5,595 INVESTOR DAY October 2008 5 * Open access
  • 6. The transportation markets A significant market: €460bn – Passenger road transportation: France €10bn / USA €12.3bn – Regional passenger rail transportation: Germany €8bn Fast-growing accessible markets: €70bn – Growth in the accessible market: • France + 5% in volume in bus and coach activity • USA + 5% in the USA – Opening of new markets: rail in Europe and USA Sustainable market drivers not very dependant on economic cycles – Urban concentration and ageing population – Environmental awareness – Constraints on public financing capacities – Rising fossil energy prices INVESTOR DAY October 2008 6
  • 7. Veolia Transport's market position Leading player in key markets – France: 1st private operator in intercity transportation 2nd in urban transit – Germany: 1st private operator in regional rail transportation – Netherlands:2nd private operator in passenger transportation – Sweden: 1st private operator in urban transit – USA: 1st private operator in urban & suburban transit 1st operator in transportation on demand – Australia: 1st private operator in ground public transit References in every mode of transportation – Stockholm Metro – Commuter rail in Melbourne, Boston and Bremen (contract won in 2008) – Regional rail services in Germany (Marschbahn, NordHarz, etc.) – Urban systems in Nice, Rouen, Las Vegas – Multimodal contract in Limburg in the Netherlands INVESTOR DAY October 2008 7
  • 8. Veolia Transport’s passenger public transit activity A solid contractual base – Average length 6 to 7 years – Renewal rate of 85% in 2007-08 (France, USA) Revenues: – Secured cash flow paid by public sector indexed with cost parameters – Development towards commercial and operational performance regime and incentives Low capital intensity – Assets already provided in 44% of cases (of the 25 leading contracts) – WCR < 0 (source) High free operating cash flow* on maturity – France 2007: €71m (4.2% of revenue) * Before tax INVESTOR DAY October 2008 8
  • 9. Synergies with Veolia Environnement and its divisions Synergies in terms of business development – Ireland – Israel – China – India Synergies in terms of innovation and R&D – Biofuels and biogaz with Veolia Environmental Services – Recyclotm 3FM recycling unit of wash water with Veolia Water Synergies in terms of customer care – Pooling of call centers with Veolia Water • Nice • Ile-de-France INVESTOR DAY October 2008 9
  • 10. Financial data €m 2006 2007 H1 2007 H1 2008 Revenue 4,957 5,595 2,726 2,972 EBITDA 286 280 127 146 EBITDA margin 5.8% 5.0% 4.7% 5.0% EBIT 14 130 73 64 Recurring EBIT 100 115 48 63 Recurring EBIT margin 2.0% 2.1% 1.8% 2.1% Capital employed 1,405 1,634 1,667 1,775 (on closing) ROCE before tax 7.4% 7.6% ns ns INVESTOR DAY October 2008 10
  • 11. Our "Full Potential" plan Reinforce leadership positions in target countries – France, USA, Germany, Australia, Sweden and the Netherlands Important turn around on loss-making contracts – Achieved for the transit activity in the USA – Sustainable improvement in the “Marschbahn” contract in Germany – Under way for the Brabant and Limburg contracts (Netherlands), return to profitability expected end 2008 Withdraw from unprofitable/non-core countries and activities – Denmark and Algeria in 2007 – Lebanon in 2008 Efficiency Plan: – Tighter organization: elimination of regional structures, target-based management – Reduction of SG&A, Purchasing Plan and Fleet Management INVESTOR DAY 11 October 2008
  • 12. 2008: key achievements Improvement in results in the first half of 2008 – Improvement in profitability (recurring EBIT): 2.1% (H1 2007: 1.8%) – Significant improvement in EBITDA to €146m – Positive free operating cash flow before pre-financing Over the whole year, EBIT, EBITDA and FCF should be up on 2007 despite tough conditions – Increase in fuel prices (annual impact estimated at €35m) – End of reduction in social security costs in France (impact of €15m over the full year) INVESTOR DAY October 2008 12
  • 13. 2011: targets €m 2007 2011 targets CAGR: Revenue 5 595 6% to 8% > Growth in Recurring EBIT 115 revenue ROCE before tax 7.6% 11-12% Free operating cash flow (46) * > 0 as of 2008 * Before tax and excl. Nicoli (SNCM ship) and pre-financing INVESTOR DAY October 2008 13
  • 14. Our vision To be the reference in managing sustainable mobility solutions To become the long-term partner of local authorities, industrial clients and other government agencies that want to implement innovative, cost-effective and sustainable mobility solutions. To help our clients design, manage and operate integrated mobility solutions, in ways that measurably improve their economic and environmental performance. INVESTOR DAY October 2008 14
  • 15. Key trends: integration of modes Optimized Multimodal System Veolia Transport Limburg Revenue : > 100 €M / yr 1,125 employees Length of contract: 10 yrs 235 buses 24 trains 250 taxis Integrated and intermodal NL Mobility center Incentive model BE DE Maastricht +20% of ridership (rail) INVESTOR DAY October 2008 15
  • 16. Key trends: towards sustainable mobility Our role in reducing greenhouse gas emissions – Increase attractiveness and ridership of transit systems – Continuously measure and control the environmental footprint of our activities through an Environmental Management System – Offer our clients clean and environmentally effective solutions – Raise our stakeholders' awareness of the environment and the positive impact of our activities Our solutions – Energy and the environment: biofuels, biogas, ANGO system, green depots, etc. – Intermodality solutions: mobility centers, information systems, ticketing, etc. INVESTOR DAY October 2008 16
  • 17. Key trends: new partnership models Growing transportation infrastructure requirements, in a context of rising systems’ ridership and reduction in public financing Veolia Transport is keen to develop long-term global contracts such as PPP – References: Leslys, Rouen, Barcelona – Securing margins over the longer term through contracts for 30 years and over – Command of infrastructure, key for local mobility – Ideal model of participation: • Minority in global project • Majority in operating control and management INVESTOR DAY October 2008 17
  • 18. Our future markets Regional rail lines Veolia Transportation On Demand Performances – Regional rail market in France: €2.9 billion (North America) – Gradual opening from 2010 EBIT* margin EBITDA margin – Advanced consultation with the Alsace Region 19.8% 17.9% concerning an invitation to tender in 2010 14.5% 14.6% Development of open-access transportation on demand in France and Europe – Existing SuperShuttle model in the USA H1 2007 H1 2008 – Start-up underway in the Paris Region * excluding intangible amortization – Capitalize on SuperShuttle clientele visiting France and Europe – Top-notch development partners: Air France INVESTOR DAY October 2008 18
  • 19. Our future markets High Speed Trains – Alliance Air France & Veolia Transport – High Speed rail transportation market in France and near European countries worth €10 billion (€6 billion in France), and undergoing steady growth – Opening of the market as of 2010 for open- access international links INVESTOR DAY October 2008 19
  • 20. In conclusion Veolia Transport: The reference in managing sustainable mobility solutions A growing market Contracts not very dependent on economic cycles Improvement in results under way A targeted development strategy INVESTOR DAY October 2008 20
  • 21. Appendix 21
  • 22. Veolia Transport’s open-access transportation on demand Contractual base developed in the USA – Franchise contracts – Single booking and itinerary management center – Payment center Revenues: share of passenger revenues generated by franchised operations – Built-in incentives to increase ridership – Favorable context: higher fuel prices, greater demand for mass transit – No collection risk Low capital intensity: vehicles owned by franchised operators Transfer of risk of cost variability: maintenance, insurance and fuel Structurally positive free operating cash flow before growth by acquisition Opportunities for growth by acquisition and consolidation of the market INVESTOR DAY October 2008 22
  • 23. Veolia Transport’s rail freight activity Contractual base: industrial clients, private-law contracts – Average length of contracts: 3 years – Very diversified client portfolio: 100 contracts Revenues: – Fixed component covering fixed costs provided for in the contract – Variable component linked to volumes transported – Indexation and revision formulas (wages, energy, time intervals) Challenges: – Covering fixed costs in start-up phase – Forecasting demand, given leadtimes for rolling out production means – Lease financing for rolling stock Increase in volumes over the last few years INVESTOR DAY October 2008 23
  • 24. Investor Relations contact information Nathalie PINON, Head of Investor Relations and Financial Communication 38 Avenue Kléber – 75116 Paris - France Telephone +33 1 71 75 01 67 Fax +33 1 71 75 10 12 e-mail nathalie.pinon@veolia.com Brian SULLIVAN, Vice President, US Investor Relations 200 East Randolph Drive, Suite 7900 Chicago, IL 60601 - USA Telephone +1 (630) 371 2847 Fax +1 (630) 282 0423 e-mail brian.sullivan@veoliaes.com Web site http://veolia-finance.com INVESTOR DAY October 2008 24