The document provides the half-year results for 2003 for Veolia Environnement. [1] It summarizes the company's refocusing of its North American water business on long-term contract work and the write-down of $2.5 billion related to USFilter assets. [2] Key figures for the first half of 2003 show revenue of €14.0 billion and EBIT of €884 million. [3] The company generated positive free cash flow of €201 million and reduced its net debt to €13.1 billion as of June 30, 2003 through continued debt reduction efforts.

1. Presentation
credit analysts
2003 half-year results
September 24, 2003
Comptes s emestriels 2003 – Septembr e 2003
1

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
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 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.
Comptes s emestriels 2003 – Septembr e 2003
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3. Summary
What we have achieved over the past 3 years…
A complete restructuring of the shareholder base
A historical success rate with international contract bids
Contract renewal rate > 90%
A well managed geographic exposure
A complete restructuring of our financial agreements
Increased financial security
A decrease in debt from €15.3 billion at 20/07/2000 to €13.1
billion at 30/06/2003
Our goals
A clearly defined strategy in Continued reduction in debt
Environmental services A revenue growth target of
Refocus on LT contract business between 4% and 8% per year
in Water in the U.S. An ROCE target of between 8%
An efficiency plan with a minimum and 9% by the end of 2005
savings of € 300 million in 2005
Comptes s emestriels 2003 – Septembr e 2003
3

4. I. INDUSTRIAL PROFILE
A. Refocus for North American Water Business
B. Half-Year Results
II. FINANCIAL PROFILE
A. Financial Strength
B. Profitability
Comptes s emestriels 2003 – Septembr e 2003
4

5. I. INDUSTRIAL PROFILE
Focus on long-term contract business for Water in
North America
Good operating performance from most divisions
(Water excluding the U.S., Waste, and Energy
services):
Revenue of €14,048 million (€13,902 million, excluding
assets sold in 2002 and 2003)
EBIT of €884 million; Cash flow from operations of
€1,346 million
Veolia Environnement generated positive free cash
flow of €201 million, allowing for the stabilization of
debt after dividends at €13.1 billion at June 30, 2003.
Comptes s emestriels 2003 – Septembr e 2003
5

6. A. REFOCUS FOR NORTH AMERICAN
WATER BUSINESS
Comptes s emestriels 2003 – Septembr e 2003
6

7. VE refocuses its US Water Activities on Long
Term Contract Business (1)
Assessment of market value for USFilter assets
Write-down of $2.5 billion (€2.2 billion)
Net book value of all of the businesses after the
write-down: €2.0 billion ($2.2 billion)
Comptes s emestriels 2003 – Septembr e 2003
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8. VE refocuses its US Water Activities on Long
Term Contract Business
Revenue of businesses sold or being sold
Culligan + Everpure 2003 (*) $760m
Equipment / Short term services 2003 (*) $1,300m
Total revenue for long-term contracts business :
2003 (*) $600m
Estimated average operating 5%
margin for restructured entity
(*) Estimated amonts
Comptes s emestriels 2003 – Septembr e 2003
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9. After its reorganization USFilter remains the
market leader in outsourcing services
Municipal market shares (*)
Provides water and wastewater VW/USFilter
VW/USFilter
services to 13 million people in over 29%
600 U.S. communities Other
(13 companies)
44%
Leader with 41% share of outsourcing
market*
29% in municipal outsourcing Suez/ United
Water
53% in industrial outsourcing OMI
12%
15 %
Contract renewal rate >90% in 2002
Industrial market shares (*)
Over $3.5B in total backlog
Other 47%
(12 companies)
80% Municipal contracts
20% Industrial contracts
VW/USFilter
VW/USFilter
53%
* 2002 figures Public Wor ks Financing
Comptes s emestriels 2003 – Septembr e 2003
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10. In total, the targeted 2004 revenue in North
America is nearly $2.4 billion
Waste - 2004 targeted revenue: $1.5bn
Onyx is present throughout the value chain for waste
with a strong regional presence (Midwest and East)
East)
Water - 2004 targeted revenue: $0.6bn
Long-
Long- term operating contracts with municipalities (80% of
revenue) and industrial customers (20% of revenue).
Market share of >40% in outsourcing services.
Transport - 2004 targeted revenue: $0.3bn
with a growing regional presence in bus and commuter
rail services as well as the increased impact of the
Boston contract ($200 m per year for 5 years).
years).
Comptes s emestriels 2003 – Septembr e 2003
10

11. B. HALF-YEAR RESULTS
Comptes s emestriels 2003 – Septembr e 2003
11

12. Key figures at June 30, 2003
June 30, 03 June 30, 02 ∆June 30, 02/June 30, 03
∆June 30, 02/June 30, 03
€M at exchange rate
at exchange rate
Current Constant
Reported revenue 14,048 14,971 -6.2% -1.2%
of which revenue (1) 13,902 13,858 +0.3% +5.4%
Excl. assets solds in 2002 and 2003
Reported EBITDA 1,824 1,951 -6.5% -1.8%
of which EBITDA (1) 1,820 1,864 -2.4% +2.5%
Excl. assets solds in 2002 and 2003
Reported EBIT 884 1,018 -13.1% -8.9%
of which EBIT (1) 883 947 -6.8% -2.3%
Excl. assets solds in 2002 and 2003
(1) Excluding assets sold in 2002 and 2003. Filtration and Separations Group, Plymouth, US
Distribution, as well as Bonna Sabla, sold in 2002, and Surface Prep.
Comptes s emestriels 2003 – Septembr e 2003
12

13. Key figures at June 30, 2003
€M June 30, 03 June 30, 02
Cash flow from operations 1,346 1,439
Capex and financial investments 1,260 1,741
Net income (2,100) 213
Non-recurring income (loss) (2,233) (3)
Recurring net income 133 216
(2)
Net debt 13,106 13,066
(2) At Dec. 31, 2002
Comptes s emestriels 2003 – Septembr e 2003
13

14. Revenue at June 30 (excluding assets sold
in 2002 and 2003)
2003 2002 13 901,8
13 857,8
14 000
Total reported revenue at June
12 000
30, 2003: €14,048m, of which
10 000 €5,497m from water
8 000
5 350,9
6 000 5 557,5
2 914,0
4 000
3 047,0 2 387,5
1 820,9
2 287,3 1 428,5
1 705,4
2 000 1 260,6
0
At constant Water Waste man. Energy serv. Transportation FCC Total
exchange rates
At current
+2.1% +4.4% +6.0% +10.2% +14.7% +5.4%
exchange rates -3.7% -4.4% +4.4% +6,8% +13,3% +0,3%
Comptes s emestriels 2003 – Septembr e 2003
14

15. The Water (excluding the US), Waste and Energy
Services businesses achieved a good half-year
∆ Exchange Rate Margin
EBITDA constant current June 30, 02
June 30, 03
in €m
Water 753 +2% - 3% 13.7% 13.2%
(*) (*)
Waste management 431 +3% - 6% 14.9% 15.4%
Energy services 357 +17% +16% 14.9% 13.4%
Transportation 139 -5% -6% 7.7% 8.7%
FCC 175 +7% +5% 12.3% 13.2%
TOTAL 1,820 +2.5% -2.4% 13.1% 13.4%
(*) excluding Proactiva
Comptes s emestriels 2003 – Septembr e 2003
15

16. Positive free cash flow at June 30, 2003
June 30, 03 June 30, 02 ∆ 2003/2002
Cash flow from operations 1,346 1,439
Maintenance capital expenditures (597) (603)
Free cash flow available before growth 749 836
Investments for growth (663) (1,137)
Change in consolidation scope 33 (64)
Change in WCR (57) (436)
Disposals 139 +573
Free cash flow 201 (228) +188%
Dividends (277) (243)
Exchange rate fluctuations and other 194 +340
Change in receivables (158) (365)
Net balance (40) (496)
Net debt at June 30th 13,106 14,779
Net debt at December 31st 13,066 14,283
Comptes s emestriels 2003 – Septembr e 2003
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17. II. FINANCIAL PROFILE
Change in outlook from 2 rating agencies :
Standard & Poor's Corporate: BBB+ / Positive / A2 (28/04/2003)
Issue: BBB / Positive / A2 (28/04/2003)
Moody's Baa1 / Stable / P2 (06/05/2003)
Reduction in net financial debt
Strengthened financial security
Extension of the average debt maturity from 3.8 to 5
years
Improvement in liquidity position: €8.1 billion
Comptes s emestriels 2003 – Septembr e 2003
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18. A. FINANCIAL STRENGTH
Comptes s emestriels 2003 – Septembr e 2003
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19. Reduction in net debt: - €1.6 billion in 1 year
In €m
30/06/03 30/06/02 Variation
Bonds 7 662 6 015 1 647
Other LT debt 5 324 7 472 - 2 148
Short term debt 4 687 3 797 890
Gross Debt (1)
17 673 17 284 389
LT financial assets 400 406 -6
ST financial assets 773 639 134
Marketable securities 196 428 -232
Cash 3 198 1 033 2 165
Net Debt (1)
13 106 14 779 - 1 673
(1) As at 31/12/2002 – Gross debt: 16 709 €m / Net Debt: 13 066 €m
debt: Debt:
Comptes s emestriels 2003 – Septembr e 2003
19

20. Diversification of funding sources: success of
bond issues
Bank Debt : 43% Bank Debt : 76%
CP / Bonds : 57% CP / Bonds : 17%
Commercial
Bonds paper 4%
Commercial
Bonds 35% 3%
paper 13%
Oceanes C/C VU
10% 7%
Bilateral facilities
35%
Syndicated loans
Bilateral facilities
24%
52%
Oceanes 9%
Syndicated loans
8%
June 2003
2003 Dec. 2000
Comptes s emestriels 2003 – Septembr e 2003
20

21. Average debt maturity extended from 3,8 to 5 years
LT debt schedule 30/06/03
In €m
Bonds 7.7 billion €
LT Bank Debt 5.3 billion €
3000
2500
2000
1500
1000
500
0
04
05
06
07
08
09
10
11
12
13
14
20
20
20
20
20
20
20
20
20
20
20
>
Comptes s emestriels 2003 – Septembr e 2003
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22. Liquidity Risk Assessment
VE can manage any “stress scenario”
June 2003 December 2002 December 2000
In € m Total Available Total Available Total Available
Multi Purpose Facilities 1 750 1 750 1 300 1 300 1 200 1 200
Bank Facilities 0 423 200
Syndicated Loans 4 415 3 781 4 415 2 149 4 564 0
Cash 3 198 2 382 1 541
Total 8 729 6 254 2 941
Comptes s emestriels 2003 – Septembr e 2003
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23. B. PROFITABILITY
Comptes s emestriels 2003 – Septembr e 2003
23

24. Confirmation of after tax ROCE objective of
between 8 and 9 % by the end of 2005
Implementation of an efficiency plan with a minimum savings of
€300 million to improve productivity between now and 2005
purchasing,
purchasing, economies of scale for insurance costs,
costs,
reduction in headqurters offices, improved labor
management…
Continued policy of selective growth investments
Less capitalistic operating contracts
Positive impact of maturing contracts (J curve)
curve)
Comptes s emestriels 2003 – Septembr e 2003
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25. "J curve” trending upward
Example 1: Shanghai Pudong
Euros (M) RCI (% )
500 35%
30%
400
25% Revenue
300
20%
EBIT
Net Op. Cash
200 15% Flows
RCI
10%
100
5%
0
Yea r 1 Yea r 5 Ye ar 10 Yea r 15 Yea r 25 0%
-100 -5%
50 year contract valued at approximately 10 billion euros
Initial investment of $245 million in joint-venture with Shanghai Water Assets
Operation and Development Co. Ltd.
Creates strong platform for future operating contract opportunities in China
Comptes s emestriels 2003 – Septembr e 2003
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26. “J curve” trending upward
Example 2: Czech Republic
Euros (M) RCI (% )
500 18%
450 16%
400 14%
350
12%
300
10%
250
8%
200
6%
150
100 4%
50 2%
0 0%
Year 1 Year 7 Year 8 Year 10 Year 20 Revenue
EBIT
Net Profit
RCI
Model of a group of operating contracts with limited investment (initial
entry, maintenance, other contractual investments)
Customer payments based on an adjusted cost + fee basis (adjusted for
increase in inflation with the ability to retain productivity gains)
Comptes s emestriels 2003 – Septembr e 2003
26

27. Strategy to refocus water business in the U.S.
continued reduction in debt
Refocus of US activities strengthens cash flow stability and
improves the risk profile: confirmation of targeted medium-term
medium-
revenue growth of between + 4 % and + 8 % per year.
Improvement in ROCE after tax which should reach between 8 %
et 9 % dby the end of 2005 :
maturity of contracts (J curve)
curve)
efficiency plan (minimum savings of €300 million end of
2005).
Debt reduction target to around €11 billion
Comptes s emestriels 2003 – Septembr e 2003
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28. APPENDIXES
Comptes s emestriels 2003 – Septembr e 2003
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29. Key municipal outsourcing projects in the U.S.
Indianapolis, IN Richmond, CA
Tampa Bay, FL Atlanta-
Atlanta-Fulton, GA
Atlanta, GA Moncton,
Moncton, Canada
Oklahoma City, OK Palm Springs, CA
Lynn, MA Plymouth, MA
Woonsocket, RI Springboro, OH
Great Falls, MT Danbury, CT
Cranston, RI Jupiter Island, FL
Petaluma, CA Wilmington, DE
Leominster, MA Arvin, CA
Honolulu, HI Burlingame, CA
Comptes s emestriels 2003 – Septembr e 2003
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30. Key industrial outsourcing projects in the U.S.
■ Chevron Alon USA
■ BP-Amoco Equistar
■ Air Products Westlake
■ Bethlehem Steel General Motors
■ Conoco IPSCO
■ Sunoco 3M
■ Exxon Mobil AK Steel
■ Occidental ALCOA
Chemical
Comptes s emestriels 2003 – Septembr e 2003
30

31. EBIT at June 30 excluding assets sold in
2002 and 2003
1 000 947,2
2003 2002 882,8
900
800
700
600
500 400,6 425,3
400
300
179,1 179,2
195,1 162,1
200 119,0
117,3
40,5
100 55,0
0
-100 Water Waste man. (1)
Energy serv. Transportation FCC Total
At constant Stable +4.8% +11.9% -27.0% +2.2% -2.3%
exchange rates
At current -5.8% -4.5% +10.5% -26.3% +1.5% -6.8%
exchange rates
(1)
Comptes s emestriels 2003 – Septembr e 2003 Only Onyx
31

32. The U.S. remains an area of growth for VE:
Onyx achieved €1.4 billion in revenues in 2002
Solid waste locations in 11 states
with more than 450 municipal solid Breakdown of 2002 North America
waste contracts and over 130,000 Revenues : €1.4 billion
commercial and industrial
customers Waste-to-Energy
12% Solid Waste
Second largest hazardous waste 45%
service provider in the U.S. Hazardous
Services
Industrial services (hydroblasting,
(hydroblasting, 24%
industrial cleaning, chemical
cleaning,
cleaning,
cleaning, etc.) to most major
industries
Industrial Services 19%
Operating 10 waste -to-energy
waste-to-
facilities with a capacity of over
10,000 tons per day
Comptes s emestriels 2003 – Septembr e 2003
32

33. Cash flow from operations at June 30, 2003
June 30, 03
June 30, 2002 €1,346m
€1,439m
1500
1100
700
Operating
performance
300 €74m
-100
(€50m) (€79m) (€38m)
Disposals Exchange Difference in
-500
rates interest rates
Comptes s emestriels 2003 – Septembr e 2003
33

34. Control of investments at June 30, 2003
Maintenance
Maintenance Growth
Growth Total
Total Total
Total
In €m June 30,03 June 30, 02
June 30,03 June 30, 02
Water 293 300 593 891
891 UK, Brussels, Asia
Brussels,
Waste management 143 136 279 333
333 Major projects France,
UK
Energy services 50 101 152 229
229 Czech Republic,
Republic,
Poland
Transportation 47 54 101 139
139 Norway,
Norway, Eastern
Europe
FCC + Proactiva 65 70 135 147
147
Total 597 663 1,260
Total at June 30, 2002 603 1,138 1,741
1,741 -28%
Comptes s emestriels 2003 – Septembr e 2003
34