Veolia Environnement Reports Strong International Growth

Veolia Environnement S.A. ((VEOEY)) has held its Q3 earnings call. Read on for the main highlights of the call.

Veolia Environnement S.A. has reported a robust performance for the first nine months of the fiscal year, showcasing significant international growth and successful mergers and acquisitions (M&A) activities. Despite facing challenges in France and negative foreign exchange impacts, the overall sentiment from the earnings call was positive, with a strong forecast for the fourth quarter.

Strong International Performance

Veolia’s international operations, which contribute to 80% of its revenue, demonstrated impressive growth with nearly double-digit EBITDA growth. This was particularly notable in North America, Africa and the Middle East, and Latin America, with growth rates of 6.2%, 10.5%, and 9.4%, respectively. This strong international performance underscores Veolia’s strategic focus on expanding its global footprint.

EBITDA and Margin Improvement

The company reported a 5.4% increase in EBITDA on a like-for-like basis, aligning with its guidance. This was accompanied by a margin improvement of 50 basis points and a 7.9% increase in current EBIT, reflecting Veolia’s effective cost management and operational efficiency.

M&A and Capital Allocation Success

Veolia completed EUR 2.3 billion in acquisitions within Water Technology and Hazardous Waste sectors. These strategic acquisitions have bolstered growth outside Europe, contributing to a 10% increase in EBITDA for these segments, highlighting the company’s successful capital allocation strategy.

Guidance Confirmation

Veolia confirmed its guidance for 2025, anticipating a strong performance in the fourth quarter. The company also announced a share buyback plan to mitigate the impact of its employee shareholding program, reinforcing its commitment to shareholder value.

Forex Impact

The company experienced a negative Forex impact, with a reduction of EUR 68 million in EBITDA and EUR 44 million in current EBIT, primarily due to the weakening of the U.S. dollar and Australian dollar. Despite this, Veolia’s overall performance remained strong.

France Performance Challenges

In France, Veolia faced low growth in the solid waste sector. However, this was offset by improvements in hazardous waste and water operations, demonstrating resilience in its domestic market.

Forward-Looking Guidance

Veolia’s guidance for the fiscal year remains strong, with expectations for a robust fourth quarter. The company reported a revenue of EUR 32 billion for the first nine months, up by 3.2% excluding energy prices, and a significant EBITDA increase of 5.4% on a like-for-like basis. Veolia aims to maintain a leverage ratio below 3x by year-end, with a focus on international growth and operational efficiency.

In conclusion, Veolia Environnement S.A.’s earnings call reflected a positive outlook, driven by strong international growth and strategic acquisitions. Despite challenges in France and Forex impacts, the company remains on track to achieve its financial goals, with a promising forecast for the remainder of the year.