• Revenue: Increased by 5% excluding energy prices to EUR44.7 billion.
• EBITDA: Grew by 5.8% to EUR6,788 million, with a margin increase of 80 basis points to 15.2%.
• Current Net Income: Rose by 14.6% to EUR1,530 million.
• Current EPS: Increased by 12.4% to EUR2.13.
• Free Cash Flow: Improved to EUR1,156 million.
• Net Financial Debt: Reached EUR17.8 billion with a leverage ratio of 2.63 times.
• Dividend: Proposed increase by 12% to EUR1.40.
• Water Technologies Revenue: Increased by 7% to EUR4,973 million.
• Hazardous Waste Revenue: Increased by 7.1% to EUR4,276 million.
• Water Operations Revenue: Increased by 5.1% to EUR13,060 million.
• Solid Waste Revenue: Increased by 6.2% to over EUR11 billion.
• ROCE: Reached 8.8%, a historical high for Veolia.
• Synergies: Achieved EUR120 million in 2024, with a new target of EUR530 million by the end of 2025.

• Warning! GuruFocus has detected 5 Warning Signs with VEOEF.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Veolia Environnement SA (VEOEF) achieved or exceeded all targets for 2024, demonstrating strong performance despite a challenging environment.
• Revenue grew by 5% excluding energy prices, with booster activities like water technologies, hazardous waste, and bioenergy growing by 6.6%.
• EBITDA increased by 5.8% to EUR 6,788 million, with a margin improvement of 80 basis points to 15.2%.
• Current net income grew by 14.6% to EUR 1,530 million, a record high for the group, and current EPS increased by 12.4% to EUR 2.13.
• The company ended the year with a lower debt than targeted and a comfortable leverage ratio of 2.63 times, better than expectations.

Negative Points

• The macroeconomic and political environment in 2024 was challenging, particularly in France and Europe, affecting operations.
• External factors such as commodity prices and weather had a negative impact, contributing to a minus 2% effect on EBITDA growth.
• Energy revenue decreased by 10.7% due to lower energy prices and mild weather, impacting overall revenue growth.
• The company faces potential challenges in maintaining efficiency gains due to expected lower inflation in 2025.
• There is uncertainty regarding the impact of geopolitical and macroeconomic factors on future performance, which could affect the company's ability to meet long-term targets.

Q & A Highlights

Q: Could the share buyback program indicate a shift towards more flexible capital allocation, potentially reallocating CapEx to buybacks beyond offsetting the employee share plan? A: Estelle Brachlianoff, CEO, explained that the share buyback is a first for the group, aimed at neutralizing the dilution from the employee shareholding program. The company remains flexible and agile with capital allocation, prioritizing growth investments and maintaining a leverage ratio below 3 times. The buyback reflects confidence in the company's value creation and financial solidity.

Q: Are the action plans in France, Spain, and China expected to generate efficiencies beyond the usual EUR350 million annual target? A: Estelle Brachlianoff, CEO, confirmed that these plans are part of the overall efficiency target for 2025. The specific plans in these regions will continue, contributing to the efficiency gains, although lower inflation may impact the retention of these gains. The company aims to retain 30% to 50% of efficiency gains in EBITDA.

Q: What is the expected impact of foreign exchange and energy prices on EBITDA in 2025? A: Emmanuelle Menning, Deputy CFO, stated that foreign exchange is expected to be neutral, with positive impacts from the USD offset by other currencies. Energy prices had a negative impact in 2024, but this is expected to decrease in 2025, with a forecasted impact of around EUR50 million.

Q: How does the current US administration impact Veolia's operations and growth prospects in the region? A: Estelle Brachlianoff, CEO, noted that the US administration's policies have no direct impact on Veolia's operations. The company operates at local and state levels, with growth driven by megatrends like health and environmental needs, and strategic industries requiring water solutions, irrespective of federal policies.

Q: With the strong cash performance and additional synergies, how does this align with the 2027 objectives? A: Estelle Brachlianoff, CEO, confirmed that the company is on track to meet its 2027 objectives. The strong 2024 performance and raised synergy targets support the 10% net income growth guidance, now translating to EPS growth due to the share buyback program.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.