Veolia Q1 2025 presentation: EBITDA rises 5.5%, full ownership of WTS announced

Introduction & Market Context

Veolia Environnement VE SA (EPA:VIE) presented its Q1 2025 results on May 7, 2025, reporting solid performance despite macroeconomic uncertainty. The environmental services giant highlighted its "resilience and growth" business model, which has enabled the company to maintain momentum and fully confirm its annual guidance.

The company’s stock closed at €32.46 on May 6, 2025, up 0.74% ahead of the results announcement, and has traded between €26.26 and €32.71 over the past 52 weeks.

Quarterly Performance Highlights

Veolia reported Q1 2025 revenue of €11,507 million, representing growth of 3.9% excluding energy prices (+1.5% at constant scope and forex). EBITDA increased to €1,695 million, up 5.5% at constant scope and forex, with margin expansion of 60 basis points to 14.7%.

As shown in the following financial results summary:

Current EBIT before Suez PPA reached €915 million, up 8.4% at constant scope and forex, demonstrating good operating leverage. Net debt decreased by €142 million year-over-year to €18.9 billion, with the leverage ratio improving to 2.75x from 2.88x in Q1 2024.

The company’s performance across business segments showed consistent growth:

• Water Operations: Revenue of €2,999 million, up 3.3% at constant scope and forex
• Solid Waste: Revenue of €2,739 million, up 3.0% at constant scope and forex
• District Heating and Cooling Networks: Revenue of €2,309 million, up 4.9% at constant scope and forex (excluding energy prices)
• "Boosters" (high-growth segments): Revenue up 7.2% in Q1 including targeted M&A

The following chart illustrates the evolution of Q1 2025 revenue compared to Q1 2024:

Similarly, EBITDA evolution shows strong organic growth of 5.5%, with positive contributions from commerce/volumes, efficiency gains, and synergies offsetting negative impacts from scope changes and energy prices:

Current EBIT increased by 8.4% at constant scope and forex, reaching €915 million, as shown in this breakdown:

Strategic Initiatives

The most significant strategic announcement was Veolia’s acquisition of CDPQ’s 30% minority stake in Veolia Water Technologies and Solutions (WTS) for $1.75 billion (approximately €1.5 billion). This transaction, expected to close by the end of June 2025, will give Veolia full ownership of WTS, enabling simplification and full integration of the business.

The acquisition is fully aligned with Veolia’s GreenUp strategic roadmap, with Water Technologies identified as a priority "booster" segment. The company expects to unlock approximately €90 million in annual run-rate synergies by 2027, with a post-synergies EV/EBITDA multiple of approximately 11x.

As illustrated in the following slide, the acquisition will strengthen Veolia’s position as the #1 worldwide leader in Water Technologies:

Veolia’s Water Technologies business generated €4,973 million in revenues and €612 million in EBITDA in 2024, with operations in 44 countries. The company has set ambitious growth targets for this segment, aiming for 6-10% CAGR in revenues and ≥10% CAGR in EBITDA with margin expansion through 2027.

The financial ambitions for Water Technologies are outlined below:

Efficiency gains and synergies continue to contribute significantly to Veolia’s performance. The company reported €91 million in efficiency gains in Q1 2025, in line with its annual target of over €350 million. Synergies from the Suez acquisition reached €25 million in Q1 (€460 million cumulated to date), on track to achieve the target of over €530 million by the end of 2025.

Forward-Looking Statements

Veolia fully confirmed its 2025 guidance, projecting:

• Continued solid organic revenue growth
• EBITDA organic growth of 5-6%
• Efficiency gains exceeding €350 million
• Cumulated synergies of €530 million, including €95 million in 2025
• Current net income group share growth of approximately 9%
• Leverage ratio below 3x
• Dividend growth in line with current EPS

The company also announced a share buyback plan to offset the impact of its employee shareholding program for 2025-2027.

As shown in the guidance confirmation slide:

Veolia’s GreenUp strategy continues to focus on value creation through a combination of resilience and growth. The strategy emphasizes three key pillars: growth (through boosters and strongholds), performance (efficiency and synergies), and capital allocation (€1 billion per year net investments with priority to boosters).

The company’s financial headroom remains strong, with net debt down €142 million year-over-year and a strong net cash position at the end of March 2025. This positions Veolia to finance the CDPQ stake acquisition while maintaining its leverage target below 3x:

In conclusion, Veolia’s Q1 2025 results demonstrate the company’s ability to deliver solid growth despite macroeconomic uncertainties, while advancing its strategic initiatives through the full acquisition of WTS. The confirmation of full-year guidance reflects management’s confidence in the resilience and growth potential of its business model.

Full presentation:

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