2005 - 2006 - Pinsent Masons Water Yearbook 2012

FRANCE PART 3 (i): COMPANY ANALYSIS: MAJOR PLAYERS
Veolia Environnement SA
Compagnie Générale des Eaux was renamed Vivendi in May 1998, while retaining its former name for
water and wastewater activities. In July 2000, Vivendi Universal sold 28% of its holding in Vivendi
Environnement (VE) via a listing on the Paris Bourse and a further 9% in 2001. Vivendi has in turn
been renamed Vivendi Universal (VU) and is concentrating upon the telecommunications and media
sectors. Following VU’s financial problems in 2002, the company sold a further 43% of VE’s equity to
a series of French institutions and as a result, VE’s results (and debt) are no longer consolidated into
VU’s. VE has been renamed Veolia Environnement (VE) so as to differentiate between the two
companies. Water activities were grouped under Veolia Water. After a further sale in December
2004, VU’s share of VE fell to 5.3%. In 2004, after a recapitalisation exercise, the Générale des Eaux
name was revived to become the holding company for Veolia Water’s activities.
Veolia Environnement, profit and loss account
Y/E 31/12 (€million) 2000 2001 2002 2003 2004
Turnover 26,393.7 29,126.7 30,078.7 28,063.0 24,673
Operating profit 1,289.3 -946.4 1,587.57 -766.9 1,616
Net profit 614.8 -2,251.2 339.2 -2,054.7 125.4
Earnings per share (€) 2.2 -6.6 0.93 -5.13 0.31
Water
Turnover 12,768 13,641 13,294 9,585* 9,805
Operating profit 1,021 1,122 1,024 743* 831
* 2003 figures are pro forma
Générale des Eaux (GDE) was founded in 1853, and started the privatisation of France’s water sector
by winning a concession for water supply to Lyon and gaining the first of a series of concessions
serving Paris in 1860. In 1884, GDE secured the first wastewater treatment concession, serving the
Reims municipality and pioneering the use of ozone to sterilise water at Nice in 1909. VE is also a
pioneer in the development of the international water market. Its subsidiary Compagnie des Eaux
pour l’Etranger (CEE), was set up in 1879 for international water contracts. CEE took over the water
supply concession for Venice in 1880 and further contracts were gained in Verona, Bergamo, La
Spezia and Naples. The company set up Compagnie des Eaux de Constantinople for water supply to
Istanbul in 1879, and in 1882, CEE gained the water supply concession for Lausanne in Switzerland
and Oporto in Portugal. After the First World War, VE decided to restrict its contracts to France. As a
result, contracts were either wound up or nationalised during the inter-war years.
VE developed its presence in water engineering through the acquisition of SADE in 1918 and Tuyaux
Bonna in 1924. Since the 1930s, the French water sector has gradually been privatised with VE being
the dominant player in the market. Since 1967, VE has diversified, first into waste management, then
energy and more recently into construction, property and media and telecommunications.
VE entered the Spanish water market in competition with FCC and Aguas de Barcelona. Professional
Services Group of the USA was acquired in 1981 to address the American market and General
Utilities Plc was set up in 1986 in anticipation of the privatisation of Britain’s water services. Since
1992, the company has been gaining water and sewerage concessions on a global basis. By 1995,
VE had 2,300 operating contracts serving 4,000 municipalities in France. VE reduced the number of
subsidiaries in France from 40 to one. The company’s domestic market strength has meant that until
recently, it could take a more relaxed attitude towards the international water markets than Suez.
Approximate breakdown of water revenues by region
€million 2001 2002 2003 2004
France 6,200 6,201 6,116 6,096
UK 700 655 454 410
Germany N/A 828 708 747
Rest of Europe N/A 842 900 834
Rest of Europe – Euro zone 1,200 1,100 1,100 N/A
Rest of Europe – Non-Euro zone 300 550 245 N/A
USA 3,980 3,378 1,893 466
Rest of Americas 220 400 315 105
Africa and Middle East N/A 500 621 713
Asia N/A 360 391 438
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Pinsent Masons Water Yearbook 2005 – 2006