The ratings on France-based environmental services group Veolia Environnement S.A. (VE) are underpinned by its leading positions worldwide in water utility and waste management activities, and its strong European presence in energy services. VE benefits from diversified and recurring revenues under long-term municipal concessions, and medium-term industrial outsourcing contracts. These strengths are tempered by a moderate financial policy and a somewhat blurred strategy following the group's expression of interest in French concession and construction group VINCI S.A. (BBB+/Stable/A-2) and in the international environment assets of Suez S.A. (A-/Watch Pos/A-2). 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
