- Parent Company Result Contraction: Declined by EUR 267 million, driven by EUR 166 million in adjustments and EUR 53 million from exchange rate effects.
- Construction Segment EBITDA Drop: Fell 49.9% to EUR 85.8 million due to project closures and provisions, despite revenue growth to EUR 3.02 billion.
- Environment Division Performance: Revenues rose 9.1% to EUR 4.74 billion with a 16.7% EBITDA margin, aided by organic growth and acquisitions.
- Net Financial Debt Reduction: Decreased 23% to EUR 2.3 billion despite EUR 1.2 billion in investments, with a debt-to-EBITDA ratio below 2x.
- Future Revenue Portfolio Growth: Expanded 11.4% to EUR 51 billion, highlighting strong visibility for sustained revenue momentum in 2026.
Segment-wise Performance
The Environment division reported a 9.1% growth in revenues to EUR 4.74 billion, driven by organic growth in France and Spain, and acquisitions in the US and UK. EBITDA increased similarly, with a gross margin of 16.7%. In contrast, the Construction division saw a 49.9% drop in EBITDA to EUR 85.8 million due to project closures and provisions. The Water division, led by Aqualia, reported a 6.9% increase in revenues to EUR 1.7 billion, with EBITDA growing to EUR 450 million, and a margin of 25%.
Financial Highlights
The company's net financial debt of EUR 2.3 billion and EBITDA of EUR 1.4 billion represent a debt-to-EBITDA ratio of less than 2x. The EV/EBITDA ratio stands at 6.75, indicating a relatively reasonable valuation. The P/E Ratio is 21.82, and the P/B Ratio is 1.86, suggesting that the stock may be slightly overvalued. The company's focus on growth, profitability, and safety is expected to drive future performance.
Outlook and Guidance
The company expects a significant recovery in 2026, with the Environment division anticipating a higher volume of endowments. The Construction division aims to return to a recurrent stable margin of around 5%. Analysts estimate next year's revenue growth at 2.7%. The company's guidance emphasizes growth, profitability, and safety, without providing a specific dividend payout.
Valuation and Metrics
The company's valuation metrics, including the P/E Ratio, P/B Ratio, and EV/EBITDA, suggest a relatively reasonable valuation. The Net Debt / EBITDA ratio stands at 2.58, indicating a manageable debt burden. The ROIC is 4.03%, and the ROE is 8.49%, indicating a relatively stable return on equity. The Free Cash Flow Yield is 7.89%, suggesting a decent cash return for investors.