Download PDF

1. Company Snapshot

1.a. Company Description

Veolia Environnement S.A. designs and provides water, waste, and energy management solutions worldwide.The company is involved in the resource management, production, and delivery of drinking water and industrial process water; collection, treatment, and recycling of wastewater; and design and construction of treatment and network infrastructure.It also provides waste collection, waste material recovery, waste-to-energy, organic waste material recovery, hazardous waste treatment, dismantling and remediation, urban cleaning, and industrial maintenance and cleaning services.


In addition, the company engages in the operation and maintenance of heating and cooling networks; development of energy services to reduce the energy consumption and CO2 emissions of buildings; optimization of industrial utilities; and energy use related to processes and industrial buildings, as well as produces electricity from biomass.It offers drinking water to 95 million people.The company was formerly known as Vivendi Environnement and changed its name to Veolia Environnement S.A. in 2003.


Veolia Environnement S.A. was founded in 1853 and is based in Aubervilliers, France.

Show Full description

1.b. Last Insights on VIE

Veolia Environnement's recent performance was negatively impacted by the acquisition of Icetec, a digital and distributed energy management company, which may have led to integration challenges and potential disruptions to its existing business operations. Additionally, the company's recent bond issuance of 1.5 billion euros in two tranches may have increased its debt burden, potentially affecting its financial flexibility. Furthermore, the company's expansion into hazardous waste treatment through targeted tuck-in acquisitions may have led to increased costs and operational complexities.

1.c. Company Highlights

2. Veolia's 9-Month Results Exceed Expectations

Veolia's 9-month results show strong underlying business trends, with revenue reaching EUR 32 billion, up 3.2% excluding energy prices. EBITDA increased by 5.4% on a like-for-like basis, with a margin improvement of 50 basis points. The company's EPS came out at EUR 1.06, beating estimates of EUR 0.53. The strong performance was driven by international exposure, with 80% of revenues coming from outside France, and EBITDA performance exceeding expectations.

Publication Date: Nov -07

📋 Highlights

Segmental Performance

The company's Water Technology and Hazardous Waste segments drove growth, with EBITDA increasing by 10% and revenue up 5.5%, respectively. Bioenergy revenue was up 21.3%, excluding energy prices. The Rest of the world businesses are more profitable, with an EBITDA margin of 17% versus 15% on average for the group. Growth in North America was 6.2%, fueled by an accelerated growth of Hazardous Waste, while Africa and Middle East grew by 10.5%, and Latin America by 9.4%.

Efficiency Gains and Synergies

Efficiency gains reached EUR 295 million, in line with the annual target of EUR 350 million. The company has achieved EUR 508 million in cost synergies derived from the Suez merger, and expects to reach EUR 530 million by year-end. As Estelle Brachlianoff, Veolia's CEO, noted, "The 9-month trends are similar to what we've seen in the first 9 months, and we're optimistic about Q4."

Valuation and Outlook

Veolia's valuation metrics suggest a reasonable price for the stock. The P/E Ratio is 21.47, EV/EBITDA is 7.62, and Dividend Yield is 4.79%. The company's guidance for 2025 remains unchanged, with current net income growth of 10% per year on average over the period, and ROCE above 9% in 2027. Analysts estimate revenue growth of 4.0% next year. With a strong Q4 expected, Veolia is on track to meet its guidance, driven by cost efficiencies and volume recovery.

Cash Flow and Debt

The company's free cash flow at the end of 9 months is similar to last year, with a strong Q3. A reversal is expected in Q4, with strong EBITDA growth fueled by international activities, French recovery, and disciplined CapEx and working capital management. The net debt-to-EBITDA ratio is expected to remain below 3x at year-end, with net financial debt at EUR 19.9 billion.

3. NewsRoom

Card image cap

Veolia Environnement: Information Relating to the Total Number of Voting Rights Forming the Share Capital

Dec -03

Source:

Card image cap

Veolia Unveils a Major Project to Phase out Coal in Poland to Support European Decarbonization and Strengthen Energy Resilience in Poznań

Nov -25

Source:

Card image cap

Veolia Launches Low-Carbon Heat Network "Ecothermal Grid" Offer in the UK with £1bn Project Pipeline

Nov -25

Source:

Card image cap

Veolia Ambitions to Lead European District Heating by 2030 and Launches New Offer in Urban Energy

Nov -25

Source:

Card image cap

Is Veolia (ENXTPA:VIE) Undervalued? A Fresh Look at Long-Term Growth and Current Market Pricing

Nov -22

Source:

Card image cap

Veolia to Build a Major Hazardous Waste U.S. Player With the Acquisition of Clean Earth and Unlock Further International Growth

Nov -21

Source:

Card image cap

Veolia to Buy U.S. Hazardous-Waste Specialist Clean Earth in $3 Billion Deal

Nov -21

Source:

Card image cap

Enviri Corporation Announces Sale of Clean Earth to Veolia for $3.04 Billion and Taxable Spin-Off of Harsco Environmental and Rail Businesses (“New Enviri”) to Shareholders

Nov -21

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.30%)

6. Segments

Europe Excluding France

Expected Growth: 4.5%

Veolia Environnement's European segment, excluding France, is expected to grow driven by increasing demand for waste management services and water treatment solutions, as well as growing concerns over environmental sustainability.

Rest of The World

Expected Growth: 7.3%

Strong demand in Latin America and the Middle East for water, waste, and energy management services will drive growth, supported by increasing environmental regulations and Veolia Environnement S.A.’s expertise in providing sustainable solutions.

France and Special Waste Europe

Expected Growth: 4.3%

Veolia Environnement S.A. is expected to grow, driven by increasing demand for environmental services, urbanization, and government initiatives towards sustainability.

Water Technologies

Expected Growth: 5.3%

Growing demand for water treatment solutions, increasing industrial process water management, and wastewater treatment services drive Veolia's Water Technologies segment growth, driven by stringent environmental regulations and rising concern for water conservation.

Others

Expected Growth: 5.2%

Growing urbanization, increasing focus on sustainable development, and rising demand for waste-to-energy services are expected to drive the Others segment of Veolia Environnement S.A.

7. Detailed Products

Water Management

Veolia provides water management solutions to municipalities, industries, and commercial customers, including water treatment, wastewater treatment, and water reuse.

Waste Management

Veolia offers waste management services, including waste collection, recycling, and landfill management, to municipalities and industries.

Energy Services

Veolia provides energy services, including energy efficiency solutions, renewable energy, and energy management, to buildings, industries, and cities.

Industrial Process Water

Veolia offers industrial process water solutions, including water treatment, reuse, and recycling, to industries such as oil and gas, mining, and manufacturing.

Public-Private Partnerships

Veolia partners with municipalities and governments to deliver public services, including water, waste, and energy management, through public-private partnerships.

8. Veolia Environnement S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Veolia Environnement S.A. operates in a industry where substitutes are available, but they are not a significant threat to the company's operations. The company's focus on providing innovative and sustainable environmental solutions helps to differentiate it from substitutes.

Bargaining Power Of Customers

Veolia Environnement S.A. has a diverse customer base, which reduces the bargaining power of individual customers. The company's strong brand reputation and high-quality services also contribute to its ability to maintain pricing power.

Bargaining Power Of Suppliers

Veolia Environnement S.A. has a moderate level of dependence on its suppliers, particularly for raw materials and equipment. However, the company's scale and global presence help to mitigate the bargaining power of suppliers.

Threat Of New Entrants

The environmental services industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows Veolia Environnement S.A. to maintain its market position.

Intensity Of Rivalry

The environmental services industry is highly competitive, with several large players competing for market share. Veolia Environnement S.A. faces intense competition from rivals such as Suez and Waste Management, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 77.81%
Debt Cost 3.95%
Equity Weight 22.19%
Equity Cost 9.47%
WACC 5.17%
Leverage 350.74%

11. Quality Control: Veolia Environnement S.A. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Vinci

A-Score: 6.6/10

Value: 6.3

Growth: 6.2

Quality: 4.6

Yield: 6.9

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Mo-BRUK

A-Score: 6.3/10

Value: 3.0

Growth: 6.7

Quality: 7.0

Yield: 8.1

Momentum: 6.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Volvo

A-Score: 6.1/10

Value: 4.7

Growth: 6.4

Quality: 4.4

Yield: 9.4

Momentum: 5.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
BAE Systems

A-Score: 5.7/10

Value: 2.4

Growth: 6.9

Quality: 4.8

Yield: 4.4

Momentum: 9.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Veolia Environnement

A-Score: 5.7/10

Value: 5.7

Growth: 5.8

Quality: 2.5

Yield: 6.9

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Saint-Gobain

A-Score: 5.2/10

Value: 4.8

Growth: 5.8

Quality: 4.3

Yield: 4.4

Momentum: 6.5

Volatility: 5.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.32$

Current Price

29.32$

Potential

-0.00%

Expected Cash-Flows