Veolia to Offload U.S. Waste Business

07 December 2011

In an effort to reduce its debt by raising 5 billion Euros, French Waste and Water company Veolia Environnement, is considering off loading its U.S. waste business.

According to the company, for the period 2012 to 2013 it has an objective to divest 5 billion Euros in assets and reduce net financial debt below 12 billion Euros by the end of 2013.

The company recently laid out its three tiered transformation plan and financial outlook. In view of this plan, the company said that it will accelerate the restructuring of its activities.

In particular, the company intends to divest its regulated water operations in the UK and solid waste operations in the U.S., which had revenues of $822 million in 2010, as well as continue to rationalise its geographic footprint.

The company also said that it has commenced a significant organisational transformation, incorporating plans to standardise processes, reinforce management and operational control and streamline its organisational structure.

In addition Veolia said that it will initiate a program of increased targeted cost reductions, which, based on its new perimeter, it expects to contribute 120 million Euros (net of implementation costs) to operating income in 2013, 220 million Euros in 2014 and 420 million Euros in 2015.

After 2013, and assuming a mid-cycle economic environment, the company said that it is targeting annual organic revenue growth of more than 3% and to return to a dividend payout ratio in line with its historic average.

Antoine Frérot, chairman and chief executive officer at Veolia Environnement commented:

"The strategic plan that we are announcing today is going to drive a profound transformation of our Company in order to adapt to the current economic and financial environment and to quickly position Veolia Environnement to capture the most attractive growth opportunities. It is an ambitious, but realistic plan."


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