Resilient Veolia chief looks to growth Exactly a year after surviving a boardroom putsch led by one of the most powerful figures in French business, Antoine Frérot can be forgiven for feeling a partial sense of vindication. The Veolia chief executive announced on Thursday that the world's biggest water and waste utility by sales returned to net profit in 2012 and was on target to cut its once crippling net debt to between €8bn and €9bn this year. In an interview with the Financial Times, Mr Frérot says: "At the end of 2013 the debt problem at Veolia will be fixed. And it is in fact pretty much fixed at the end of 2012. Mr Frérot still has an enormous challenge reversing the decline in Veolia's underlying profits. Its water, waste and energy divisions all suffered double-digit drops in operating income last year. But the fact that he has survived and started to restore the company to financial health is testament to his resilience. "It was a moment that provided some useful lessons about determination," he says of the failed coup. Even after he saw off the attempt by Henri Proglio, his one-time mentor at Veolia and current chief executive of EDF, there were still rumours of discontent among the company's powerful group of large shareholders, including Caisse des Dépôts, the French state's investment fund, and Dassault, the aerospace and newspaper group. Despite Mr Frérot's decision to tear up Mr Proglio's legacy of rapid global expansion, some investors pointed out that he was Veolia's number two while that costly strategy was being pursued. But a year on, Mr Proglio is no longer on Veolia's board and most of his allies have been replaced by Frérot appointees. "When I presented them the 2012 results, I felt that the board members found them truly encouraging," the Veolia chief executive says, highlighting his belief that the large shareholders are on board. But we need to see how the market reacts, because the market is the sole judge. The market was in fact rather underwhelmed. The shares rose 1.5 per cent by early Thursday afternoon in Paris, after initial excitement about the debt was damped by worries about underlying profits. For Mr Frérot, the debt reduction lays the groundwork for the second part of his strategy: cutting costs and moving Veolia into more profitable, less capital intensive, growth markets. "Veolia is too exposed in the developed economies," he says. We need more in Asia - China, Korea, India - but also the Middle East, Latin America and eastern and central Europe, which have great potential. The group makes 70 per cent of its sales in France, Germany, the UK and US, but Mr Frérot wants to cut this to 50 per cent in five years. He wants to develop higher margin activities such as toxic waste treatment and management of scarce natural resources. The decommissioning of nuclear plants, possibly worth €200bn in the next 20 years, is another target market. It also wants half of its revenues to come from industrial customers in five years, up from 30 per cent now, to lessen its reliance on austerity-hit municipal bodies. Veolia's French water utility business is having a particularly tough time. "There is a huge pressure on the price," Mr Frérot says, though he points out that the division only accounts for 10 per cent of group sales. Such concerns provided part of the logic for abandoned merger talks with Suez Environnement , Veolia's biggest rival. "For us it has already passed and we are at a new stage," Mr Frérot says of the possibility of revisiting a merger. Veolia doesn't need this to pursue its strategy. Another significant challenge is to cut jobs to help achieve the target of reducing costs by €500m by 2015. Like many French chief executives, Mr Frérot is coy about job cut numbers, but says: "With 70,000 employees in France you have natural departures, about 4,000 per year. That gives us a margin for manoeuvre.