Veolia Environnement SA (VIE), the biggest water company, will focus on “high growth” opportunities offered by China and the Middle East as part of a plan to scale back its geographic reach to 40 nations.
The utility confirmed a target to cut debt through 5 billion euros ($6.7 billion) of asset sales by the end of the year and cost cuts of 470 million euros by 2015.
“We can’t be everywhere and do everything,” Chief Executive Officer Antoine Frerot told a press conference today in Paris. He said he wanted to “build a new” utility.
Frerot is more than a year into what he pledged would be a two-year “profound transformation” of the Paris-based utility in an attempt to boost profitability after former CEO Henri Proglio extended Veolia’s reach to 77 nations. Frerot has also changed top management and shuffled the board after fending off a bid to oust him last year.
The shares rose 2.3 percent to 9.324 euros as of 10:43 a.m. in Paris, for the best performance in the Stoxx 600 Utilities Index.
Within five years, Veolia will earn half its revenue from industrial clients compared with 35 percent now, Frerot said.
Veolia is contending with economic stagnation in France, where it generated almost 40 percent of its revenue in 2011. The company said it completed about 10 “significant” asset sale agreements by the end of last year. Assets for sale have been valued at higher levels than expected, it said.
Frerot said he’s seeking to win shale energy contracts for water treatment and increase revenue from energy efficiency.
The utility is targeting annual sales growth of more than 3 percent from 2014 and an average increase in adjusted operating cash flow of more than 5 percent.
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