The ratings on France-based Veolia Environnement S.A. (VE) are underpinned by the group's top-tier global position in water-utility and waste-management activities, and its strong European presence in energy services. VE's above-average business profile is supported by diversified and recurring revenues under long-term municipal concessions, and by medium-term industrial outsourcing contracts. These strengths are tempered by a moderate financial profile. In addition, VE is exposed to a degree of price competition at renewal time and renewal risk at contract maturity as a result of its focus on operating service contracts rather than on owning assets. The group is now refocused on its four core businesses, water (46% of first-half 2005 EBITDA); waste (28%); energy services (18%); and transport (8%). VE's activities
