* Germany, Benelux waste volumes down 9.7 pct
* European waste still on downward trend at start of Q2
* Energy from waste business is growing (Adds detail, background)
PARIS, April 22 (Reuters) - Shrinking European industrial output hit revenue at Suez Environnement's waste business in the first quarter and the French group said there was no sign of an improvement so far in April.
The water and waste group said on Monday its first-quarter revenue fell 2.6 percent to 3.5 billion euros ($4.7 billion).
However, cost cuts lifted earnings before interest, tax, depreciation and amortisation 0.8 percent to 570 million euros.
"The European waste division has been affected by a decrease in treated volumes, a direct consequence of the decline of industrial production in Europe," chief executive Jean-Louis Chaussade said in a statement.
Revenue from the firm's European waste division fell 4.6 percent to 1.58 billion euros, but revenue from its European water business was up 3.3 percent to 1.04 billion euros.
Chief financial officer Jean-Marc Boursier said that at the start of the second quarter, the European waste business remained on the first-quarter downward trend.
"Looking at the first two weeks of April, we are still on a downward slope of about four percent," Boursier said.
Suez Environnement, the world's second-largest water and waste group after French peer Veolia, earns 69.7 percent of its revenue in Europe, with France accounting for 36.3 percent of total revenue and Spain 9.9 percent.
The European waste business was affected by negative volumes, adverse weather conditions, and negative commodities prices, Suez said.
The slowdown was the worst in the Benelux/Germany zone, where revenue was down 9.7 percent. Sorting and recycling was down due to negative price and volume effects, but the energy recovery business was up thanks to strong volumes.
The company said it was building energy from waste units in the UK and had signed a 25-year, 850-million-euro contract for an energy-to-waste plant in Poznan, Poland, which was the largest tender ever for a public-private partnership in Poland.
Suez maintained its financial forecasts for 2013, which are based on stagnant growth in Europe. The firm said in February it expects turnover and profit will grow this year. The company will cut costs by at least 150 million euros this year.
Suez shares have more than halved since 2008, but have been on an upward trend since the end of November, rising more than 25 percent to over 10 euros, from a low under 8 euros. The firm's market capitalisation now stands at 5.02 billion euros.
In 2012, Suez Environnement's profit fell 22 percent to 251 million euros.