Veolia Environnement S.A.

Leading positions worldwide in water and waste management. Recurrent revenues from long-term contracts bearing little volume and low performance risk. Wide diversity in business, customers, contracts, and geography. Significant exposure to declining and less profitable core domestic market. Waste segment's exposure to dull economic conditions in Europe. Focus on deleveraging and improving profitability. High debt and stretched credit metrics. Sound liquidity. Standard&Poor's Ratings Services negative outlook on France-based Veolia Environnnement S.A. (Veolia) continues to reflect the one-in-three possibility of a downgrade of Veolia in the coming 12 months if it fails to restore its profitability and credit metrics to levels commensurate with its 'BBB' rating on a sustainable basis, such as an adjusted funds from operations (FFO)-to-debt ratio

...Outlook: Negative Standard & Poor's Ratings Services negative outlook on France-based Veolia Environnnement S.A. (Veolia) continues to reflect the one-in-three possibility of a downgrade of Veolia in the coming 12 months if it fails to restore its profitability and credit metrics to levels commensurate with its '###' rating on a sustainable basis, such as an adjusted funds from operations (FFO)-to-debt ratio above 18% over the forecast period for 2015-2016. Although the company has advanced its restructuring plan, and recent quarterly results reflect a decent recovering trend in a still very challenging operating environment, we continue to assess that there are significant downside risks to Veolia staying in line with our base-case assumptions....

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