The ratings on Veolia Environnement S.A. (Veolia) reflect Standard&Poor's Ratings Services' assessment of the group's business risk profile as "strong" and its financial risk profile as "significant." The ratings are supported by Veolia's leading worldwide positions in water and waste, its recurrent revenues from long-term municipal contracts that bear little volume and performance risk, and high diversity in terms of business, contracts, and geography. They are underpinned by Veolia's ambitious debt and cost-reduction targets within its strategic plan, management's track record of financial discipline, and by the group's strong liquidity position. These strengths are offset by local authorities' tougher bargaining powers that have structurally impaired Veolia's historically high margins in core markets (notably French water), the waste business'
