Dalkia is a European leader in energy services with a presence in 24 countries. It provides energy services to industrial, public sector, and residential customers through long-term contracts where it guarantees energy outputs. Dalkia aims to grow its business and diversify its portfolio of services and customers, including expanding into cogeneration. It has a large energy purchasing portfolio across Europe and trading expertise to optimize energy costs for customers.

1. UBS EUROPEAN UTILITIES SEMINAR
Energy Services on a deregulating market
Olivier Barbaroux
Chief Executive Officer of Dalkia
Investor Presentation
Paris - October 12, 2004
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2. 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
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 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.
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3. Present in 35 countries in 2003
Europe :
European leader in Energy Services with a
presence in 24 countries
Rest of the World :
Present in 11 countries At 31/12/03
Managed
Staff
Geographic zone turnover
Managed
(Million €)
France 2,929 19,161
Northern Atlantic Zone 603 5,226
Central Europe Zone 435 4,898
Southern Zone 677 8,239
Northern Europe Zone 459 3,702
Others* 98 516
5,201 41,742
* Development Zone and specialisation companies with international activity
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4. Business Activities
The « guaranteed performance » contract
Dalkia’s Guaranteed results
core offer Long-term contract
Dalkia: a purchaser and transformer of energy
• Coal • Temperature
in pe rformance
Outputs listed
• Fuel oil Process of • Heat
Upstream
contract
Energy
• Gas oil Energy • Steam
• Gas Transformation • Compressed air
• Electricity • Lighting
• Biomass • ……etc…….
Dalkia purchases Dalkia ope rates and maintains its Dalkia sells the finished
energy upstream of customers’ energy-transforming product with a guarantee
customer site equipme nt (boile r, turbine, air of results (quantity,
conditioning system, compressor, quality, rate, availability)
lighting system, etc.)
Customers: Industry, Tertiary Sector, Public Sector
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5. 2003 turnover segmentation
Business Activity
Industrial Maintenance
8.0%
Heating & Cooling
Installation Networks
8.0% 24.0 %
Public Lighting
& Other
5.0% Customer Type
Ter tiary
(Public Sector)
17.5 %
Heating Systems &
Indu strial Utilities
Muti-technical
14.0%
Services
33.0% Facilities Man agement Ter tiary
8.0% (Private Sector)
Local Authorities
7.5%
28.0%
Residential Building
Industrials
Managers
29.0%
16.0%
Individual Housing
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5

6. Strategy & development
Vision for Dalkia France Turnover segmentation of the conventional
businesses of Dalkia France by activity and client
100%
Other
Cogeneration
Building
80 Mgt
Multi-technical
2004 60 Heating
40
Strategy : Heating Networks Air Con
20 Steam
• growth
• a more diversified
portfolio of services 0
Residential Local Authorities Tertiary Industry Works
and customers Other
100%
Cogeneration Building Mgt Mai ntenance (process)
80 Cogeneration
Multitechnical
Building
60 Heating Mgt
Air Con
Bui lding Mgt Other
Multitechnical
2010 40
P 1 e le ctric
Compressed Air
Air Con
Air Con
Clean Rooms Cold (process)
Heating Networks Steam
20
0
Local Authorities Tertiary Industry Works
Resi dential Other
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7. Strategy & development
The role of cogeneration
• A sizeable electricity generation solution : 7000 MW in France
• A good efficiency in terms of GHG emissions
• An answer to diversify electricity supply sources
• The interest of a decentralised generation source : RTE’s support in PACA
⇒ Cogeneration has an important role to play in the future.
Enhanced by increasing tension on the electricity market during next 20 years.
Cogenerators like DALKIA will have to manage the
equation gas/electricity/CO²/flexibility on the open market
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8. Strategy & development
Dalkia’s Value Chain
Electricity
Upstream
Energy Client Needs
Energies
Transformation (steam, hot water,
(gas, coal, HFO,
Process compressed air…)
electricity…)
Global outsourcing of engineering skills
Optimisation Technical Short term (P2) Process Energy &
Energy
of site energy energy Long term (P3) load environmental
purchasing
assets efficiency Maintenance delivery performance
Quota
Dalkia ’s Energy S ophisticated
Process monitoring,
Added Markets technical &
understanding forecasting &
Value Competence R&D skills
trading skills
Dalkia’s commitment : to attain excellence at each component of the value-chain
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9. Dalkia Energy Market Portfolio
An important & grow ing portfolio with an increasingly diversified range
of energy purchasing ………..… of energies and geographic origin
100 TWh (p ci) of energy consumed
Segmentation of 2004 Proforma volumes
87 100%
82 Growth
80
Growth
70 80
Others**
60 Romania
60 Slovakia
Estonia
40 Iberia
40 & Italy
Lithuania
Poland
20 Hungary
20
Czech R
UK
France
0 0
2002 2003 2004 Proforma* Gas Coal Others
* 2004 proforma : includes cogeneration at Ploiesti & Poznan
** Others include : petroleum products, renew ables, electricity, heat….
Other Key Dalkia figures
• 10.3 TWh’s of decentralised electricity produced from a park of 4800 MW
• Gas consumption represents ~1.2% of the total gas consumed in the EU25
• CO2 emissions caught within the EU Emissions Trading Scheme will be 1% - 2% of the total
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10. Dalkia Energy Market Example : French gas portfolio
Proficiency Dalkia has a faster switching rate (30%) than
the French market (25%) despite its
cogeneration position :
Strategy : A unique positioning to maximise
competitiveness : ⇒ globalisation of Take-or-Pay and Balancing risks
⇒ complete independence towards all energy suppliers ⇒ hedging & optimisation of market risks
⇒ capture the best opportunities when they arise ⇒ partnership agreements with key suppliers
⇒ leverage our portfolio (energies and countries) ⇒ customer benefits from switch, with limited risk
100%
⇒ optimise our positions and flexibility
30 %
Means : A highly skilled specialist team 80
⇒ centrally-based expertise plus network of regional
specialists
60
⇒ experience in all of the key EU25 countries
⇒ capabilities across all markets (gas, electricity, coal,
petroleum products, renewables, CO2) 40
Examples : 20
⇒ mutualisation of gas portfolio in France
based on experience gained in the UK
0
⇒ electricity network services in Eastern Europe 2002 2003 2004 Estimated
⇒ CO2 trading in the UK ETS Non Daily Metered Sites on historical tariff «No competition »
⇒ renewable re-powering in the Baltics Daily Metered (DM) Sites on historical tariff
DM Sites on « eligible » contract with incumbent supplier
DM Sites on « eligible » contract with new entrant
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11. Strategy & development
European Emissions Trading Scheme
Analysis of EU25 em issions in 2001 Estim ation of Baseline em issions & Quotas
Million tonnes Germany
5,000 Pola nd
UK
N on-CO2 Ita ly
Spain
4,000
France
Holland
Czech R
Ex cluded Gree ce
3,000 secto rs Belgium
Finla nd
Portugal
2,000 CO2
Other Austria
4 sect ors Slovak ia
Denma rk
Hungary
1,000 ETS 5 sectors
Ireland
Po wer & Heat Sweden
Estonia
Million tonnes Quota
Lithuania Baseline
0
All GHG's CO2 EU ETS 0 200 400 600
> Preliminary analysis of EU National Allocation Plans (NAP’s) suggests that :-
– historical emissions from facilities within the EU ETS are around 2 000 million tonnes
– the quota allocations will generate a system-w ide position w hich is either marginally short or long (+/- 1-2%)
– the quota supply-side will be heavily influenced by the pow er sector (fuel sw itching betw een coal & gas)
> Dalkia’s allocations will be heavily influenced by final NAP’s in France, Czech Republic, Poland and Lithuania -
none of which have yet been verified by the EU Commission
> Dalkia anticipates :
– a quota allocation of between 1% and 2% of the EU25 total for around 250 sites
– a net long position, thanks mostly to its cogeneration portfolio (note customer positions and heat regulator positions)
> Dalkia will leverage its UK experience & Centralised Energy Team to manage & optimise its important positions
across the EU25
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12. Dalkia - Key figures (1)
In €m 2001 2002 2003 Forecast 2009
Turnover 4,017 4,571 4,654 4 to 7% CAGR
EBIT (2) 224 244 274
EBIT margin 5.5% 5.4% 5.9%
Average Capital
Employed - 2,516 2,544
ROCE (3) - 7.3% 8.3% > 10%
(1) VE’s scope of consolidation
(2) EBIT corresponds to operating income as defined in French accounting regulations
committee rule 99-02
(3) See definition of ROCE in “The Veolia Environnement model: ROCE and valuation"
presentation of November 27, 2003
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