Veolia posted on Tuesday a forecast-beating 14 percent rise in 2007 sales, as acquisitions fuelled a surge in revenue in the French utility's waste management business, and maintained its earnings targets.
The world's biggest listed water supplier confirmed its target for a 12 percent rise in 2007 operating profit and sounded a bullish note for the medium term, saying its broad geographical mix and a need for its services should help it cushion the blow of slowing growth in Western economies.
"For the time being, we don't see any impact of a slowdown in our performance in 2007 and, as far as we know, since the beginning of this year," Senior Executive Vice President Jerome Contamine told a conference call in English.
"We are now present in more countries, so to the extent that not all countries follow the same cycle we are clearly much more balanced than we were some years ago.
"The need for water treatment and waste water treatment in some areas like Australia and the Middle East is such that these trends are much stronger than whatever impact comes from the economic variations," he added.
Veolia reported full-year sales of 32.63 billion euros ($48.33 billion), up from 28.62 billion in 2006, which beat both the company's target for a rise of more than 12 percent, and the average forecast of 32.19 billion euros in a Reuters poll.
Sales rose 7.8 percent when excluding the effect of acquisitions, disposals and exchange rates.
Veolia shares were up 0.6 percent at 56.16 euros in a mildly positive European utilities sector. The stock has lost more than 10 percent since the start of 2008, in line with losses in its sector and the wider stock market.
"These figures lend very strong support to our argument on Veolia's growth resilience and lower than sector average risk," said JPMorgan analyst Sofia Savvantidou in a research note.
Contamine said Veolia, which made a 2.6 billion-euro capital increase last year to finance a string of deals, would continue to be "opportunistic" when it comes to acquisitions.
"We are looking at opportunities. We are quite aware also that the financial environment is such that maybe we could end up with acquisitions at lower prices than what we could have expected a year ago," he said.
"We have less competition from financial investors and in particular from private equity investors."
Veolia's waste management business drove full-year 2007 revenue growth, fuelled by the acquisition of Cleanaway UK and Germany's Sulo, with sales up 23.5 percent at 9.21 billion euros. Like-for-like sales growth was 7.5 percent.
Sales in Veolia's core water business rose 8.3 percent to 10.93 billion euros, said the company, which started supplying water to Lyon and Paris in the 19th century.
Energy services revenue rose 12.7 percent to 6.9 billion euros, while transportation generated sales of 5.59 billion euros, up 12.9 percent year on year.
Asked about Veolia's energy unit Dalkia, and whether Veolia planned to buy EDF's 34 percent stake in the subsidiary as recently reported by the French press, Contamine said:
"We are comfortable with the present situation. We are the manager and operator of Dalkia as a whole. But as we have said recently, we consider Dalkia is a core part of the group and the rest depends upon what EDF wants to do."