Chairman and chief executive officer, Veolia Environnement
Born: June 29, 1949, in Antibes, France.
Education: Haute École de Commerce, 1971.
Family: Married (wife's name unknown); children: two.
Career: Compagnie Générale des Eaux, 1972–1990, various management positions; Compagnie Générale d'Entreprises Automobiles, 1990–1991, chairman and chief executive officer; Compagnie Générale des Eaux, 1991–1997, director; 1997–1999, deputy managing director; Vivendi Universal, 1999–2000, managing director delegate, chairman of Compagnie Générale des Eaux, director and executive managing director of Vivendi Water, chairman of Compagnie Générale d'Entreprises Automobiles; Vivendi Environnement, 2000–2003, chief executive officer; Veolia Environnement, 2003–, chairman and chief executive officer.
Awards: Chevalier de la Légion D'Honneur; Officer dans l'Ordre National du Mérite.
Address: Veolia Environnement, 52 rue d'Anjou, Paris F-75008, France; http://www.veoliaenvironnement.com.
■ Henri Proglio became chairman and chief executive officer of Vivendi Environnement after the parent company, Vivendi Universal, sold its controlling shares in the company. Proglio immediately changed the name to Veolia Environnement to distance the company from the troubled Vivendi Universal. As head of Veolia Environnement, Proglio oversaw the world's largest water company with interests in waste management, energy, and transportation. Analysts noted that Proglio was a respected business thinker, as well as part of France's "old school" network of businessmen.
After graduating from the prestigious French business school Haute École de Commerce in 1971, Proglio went to
work for the Compagnie Générale des Eaux (CGE), founded as a water utility company in France in 1853. Little information is available about Proglio's early career, but in 1990 he rose to become chief executive officer of the CGE subsidiary Compagnie Générale d'Entreprises Automobiles, the group's waste disposal and transport company. He became a director of CGE in 1991 and was named deputy managing director in 1997.
Vivendi Universal was the new name given to overall operations in 1998 by CGE's chairman and chief executive officer Jean-Marie Messier after he took over the French media company Vivendi. Meanwhile, the subsidiary specializing in water retained the name Compagnie Générale des Eaux. In 1999 Proglio was named managing director delegate of Vivendi, chairman of CGE, director and executive managing director of Vivendi Water, and chairman of Compagnie Générale d'Entreprises Automobiles. In 2000 he became chairman of Vivendi Environnement, which was created to encompass Vivendi Water, Onyx (waste management), Dalkia (energy services), and Connex (transportation).
As head of Vivendi Environnement, Proglio quickly faced some tough business decisions. Vivendi Environnement had taken on substantial debt from its parent company, Vivendi Universal, as part of a business plan that would allow the parent to focus on merging with the Canadian entertainment and beverage group, Seagram, creating a media and communications giant to rival AOL Time Warner. As a result, Proglio was left to deal with a net debt of 13.1 billion euros at the end of June 2000. Analysts were concerned about the company's high debt and the immediate drop in the company's stock price that resulted.
By September 2000 Proglio admitted that the company was making only modest progress in reducing debt. He pointed out, however, that the company's internal growth, acquisitions in the United States, and water and wastewater contracts abroad were paying off in other ways. Overall operating profits grew to 866.1 million euros ($767.1 million) from a projected 629.6 million euros in the first half of the year, and net profits rose to 104.7 million euros from a projected 38.5 million. Proglio told Water Industry News that he had to make investments to develop the business and noted that pursuing profitable growth was more important than "cutting debt for the sake of it" (September 28, 2000).
In September 2001 Proglio was upbeat about Vivendi Environnement being listed on the New York Stock Exchange. He believed the company was on the brink of significant U.S. development, particularly in the growing water services area. By mid-2001, the company owned several water and waste subsidiaries in the United States and posted a net profit of 275 million euros ($252 million), a 62 percent increase from the same period a year earlier. The company's earnings before interest and taxes had also grown 12.7 percent, based largely on growth in water and energy services.
Although Proglio was proud of Vivendi Environnement's performance, the parent company headed by Messier was in trouble. Since first taking over Compagnie Générale des Eaux, Messier had embarked on an extravagant acquisition spree in the United States. One of his cash acquisitions, U.S. Filter, was the biggest French acquisition of a U.S. company in history. Another big acquisition that came shortly afterward precipitated the near collapse of the group and would ultimately cost Messier his job. "I was always against the U.S. Filter acquisition," Proglio told the Financial Times . "It did not fit with the company's traditional multi-utility business model, and we were overpaying" (September 25, 2003).
Proglio had little reason to support Messier, who had essentially used Vivendi Environnement as a "cash cow" onto which he could load debt. Messier had built a U.S. group through a series of small-company acquisitions, some 240 in all. Proglio told the Financial Times that the company "paid a super goodwill to buy the lot" (September 25, 2003). In fact, barely six months after the acquisition, Vivendi Environnement was spun off from the parent company and, before its flotation in 2000, took a 2 billion euro ($2.3 billion) write-off on the recently acquired U.S. asset. More galling to Proglio was that the utility was loaded overall with about 20 billion euros in debt from its parent, which Messier had renamed Vivendi Universal.
When Messier stepped down and Jean-Rene Foutou took his place in July 2002, the new company chief announced that he would reduce Vivendi Universal's remaining 41 percent stake in Vivendi Environnement and focus on other areas. Proglio quickly moved to distance himself and Vivendi Environnement from Messier's legacy by announcing that he planned to change the company's name. He told the Wall Street Journal , "As a superstitious sailor, I say: 'You don't christen a ship with the name of a ship that sank.'" He added that the Vivendi name "doesn't have a particularly flattering track record" (September 25, 2002).
By December 2002 Vivendi Universal held only a 20 percent stake in Vivendi Environnement. In April 2003, Vivendi Environnement was renamed Veolia Environnement, drawing on the Greek name Aeolus for the god of the winds in Greek mythology. Analysts noted that perhaps the name was meant to blow fresh air through the company and represented Proglio's effort to break once and for all the link with the parent company. Many analysts remained cautious, however, noting that the company had to reduce the debt load it inherited from Vivendi. As Proglio sunk 4 million euros ($4.3 million) into rebranding the company, analysts commented that much more was needed than just a name change.
Proglio and his management team quietly began refocusing the group, getting rid of roughly 4.23 billion euros worth of U.S. Filter assets in nonwater activities. Several other measures also helped the group reduce its debt enough to raise analysts' confidence in the company. In response to the overall new direction, the stock market rose Veolia's shares nearly 8 percent following the announcement of the name change. Proglio told the Financial Times , "I suppose it is the end of the beginning. I've lived through all the catastrophes" (September 25, 2003).
Proglio stated that Veolia Environnement was a business strongly oriented toward the environment. He often attended international environmental meetings, such as the 2002 Earth Summit held in Johannesburg, South Africa. When asked by a correspondent for the French newspaper Le Figaro why he went, Proglio replied, "My teams and I didn't come here to meet customers. We came in order to exchange ideas, share experiences, learn and make a contribution on certain subjects, such as water, energy, and waste management, which are subjects without borders" (September 4, 2002).
Proglio admonished the United States for what he perceived to be its poor environmental record. He noted that in 2002, 3 percent of the U.S. water market was in the private sector and that the rest, as he told Le Figaro , "was in a sorry state" (September 4, 2002). He believed the U.S. weaknesses in terms of poor environmental management were obvious and that water services and wastewater management would eventually undergo a drastic change in the United States.
Because his company dealt with the finite resource of water, Proglio was a long-time advocate of sustainable development. For Proglio, sustainable development involved improving economic efficiency, protecting and restoring ecological systems and resources, and enhancing the well-being of his customers and the local communities where Veolia Environnement operated. When asked by Le Figaro about the cost burdens to companies and taxpayers, Proglio replied, "Yes, protecting the environment costs money, but you have to look at the productivity gains and savings in public health spending. If we neglect the environment, we are likely to see catastrophes that will cost much, much more" (September 4, 2002).
In December 2003 Proglio disposed of some of Veolia Environnement's U.S. holdings, including U.S. Filter. The company reported a full-year net loss of 2.05 billion euros ($2.5 billion) in 2003, largely due to the overall failure of its U.S. Filter business. Nevertheless, Proglio was not going to shy away from the right acquisition. In 2004 he started forming a deal to acquire Gelsenwasser, Germany's largest private water company. Setting his sites on other international expansion efforts, Proglio won two water management contracts in China, one in Beijing and the other in the southwestern province of Guizhou, in May 2004. Proglio was optimistic about the company's future in China and told the China Daily , "We are willing to conduct new cooperations with more local Chinese governments in the field of waste and water treatment, and we are always ready to provide quality services" (May 21, 2004). In addition to his duties at Veolia Environnement, Proglio was a director and member of the executive committee of Fomento de Construcciones y Contratas, one of Spain's largest construction groups.
Betts, Paul, "U.S. Nightmare Becomes Water Under the Bridge," Financial Times , September 25, 2003, p. 35.
Carreyrou, John, and Robert Frank, "Vivendi Environnement Is Close to Name Change, End of Links," Wall Street Journal , September 25, 2002.
Guillermard, Véronique, and Sixtine Léon-Dufour, "Henri Proglio Stresses Need to Help Developing Countries Get Over Their Complexes," Le Figaro , September 4, 2002, http://www.veoliawater.se/pdf/Henri%20Proglio-Figaro.PDF .
Handyside, Gillian, "Vivendi Environmental Moves to Cut Debt," Water Industry News , September 28, 2000, http://www.waterindustry.org/New%20Projects/vivendi-8.htm .
Zhiping, Ma, "Veolia Environnement to Increase China Presence," China Daily , May 21, 2004, http://www.chinadaily.com.cn/english/doc/2004-05/21/content_332582.htm .