Veolia Environnement SA (OTCPK:VEOEY) Q3 2024 Results Conference Call November 7, 2024 2:30 AM ET Company Participants Estelle Brachlianoff - Chief Executive Officer Emmanuelle Menning - Deputy Chief Financial Officer Conference Call Participants Arthur Sitbon - Morgan Stanley Olly Jeffery - Deutsche Bank. Juan Rodriguez - Kepler Ajay Patel - Goldman Sachs Davide Candela - Intesa Sanpaolo Thomas Martin - BNP Estelle Brachlianoff Thank you very much, and good morning, everyone, and thanks for joining this co ...

Financial Data and Key Metrics Changes - Revenue for H1 2024 reached €22.1 billion, reflecting a 4.4% organic growth excluding energy prices, driven by strong performance in Water and Waste businesses [24][6] - EBITDA increased by 5.7% to €3.266 billion, while current EBIT grew by 6.6% to €1.730 billion [5][24] - Current net income rose by 15.2% to €731 million, on track to exceed the €1.5 billion target for the full year [6][24] Business Line Data and Key Metrics Changes - Water and Waste activities grew by 6.4% each, contributing significantly to revenue and EBITDA growth [29][31] - Energy activities decreased by 14.5% due to lower energy prices and milder weather, but intrinsic energy growth was 1.4% when excluding these factors [32][31] - Water Technologies and Hazardous Waste saw strong growth, with Water Technologies achieving €2.5 billion in revenue and Hazardous Waste at €2.2 billion [12][13] Market Data and Key Metrics Changes - Australia, the Middle East, and the US were highlighted as strong geographical performers, each showing over 6% growth [10][28] - Latin America experienced double-digit growth, particularly in Brazil, Chile, and Colombia [28] - North America continued to show solid performance in both water and hazardous waste activities [28] Company Strategy and Development Direction - The company is focused on its GreenUp strategic plan, emphasizing top-line growth, efficiency, and capital allocation [7][8] - The strategic plan includes a target of 10% annual net income growth and a return on capital employed (ROCE) above 9% by 2027 [9][21] - The company aims to transform its portfolio by divesting non-strategic assets and focusing on high-value projects [17][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2024 guidance despite challenges such as unfavorable weather and lower energy prices [6][24] - The company is well-positioned to benefit from megatrends such as decarbonization and water scarcity, which are expected to drive future growth [20][21] - Management highlighted the importance of public-private partnerships in addressing water quality and treatment needs, particularly in light of recent events like the Olympics [44][45] Other Important Information - The company achieved €350 million in efficiency gains in H1, with synergies from the Suez merger totaling €386 million since its completion [9][15] - The company confirmed its commitment to maintaining a leverage ratio below three times by year-end [40][52] - A significant divestiture of non-strategic assets, including the sale of sulfuric acid recycling activities for $620 million, was completed [17][40] Q&A Session Summary Question: Impact of the Olympics on water quality and treatment - Management acknowledged the Olympics raised awareness about water quality and could lead to increased investment in water treatment projects in France and abroad [44][45] Question: Details on the sulfuric acid sale and other non-strategic assets - The sale was strategic, with no synergies with other activities, and management indicated ongoing reviews of the portfolio for potential divestitures [46][48] Question: Contribution of recyclates to performance - Management noted a marginally positive contribution from recyclates in H1 and discussed various factors influencing future performance, including regulation and market conditions [49]

H1, 2024 RESULTS August 1st, 2024 Estelle Brachlianoff, CEO Claude Laruelle, CFO AGENDA 1. H1, 2024 highlights 2. Detailed H1, 2024 financial performance 3. Appendices Estelle Brachlianoff CEO Strong H1 results reflect the solidity of Veolia value creation model and the good start of GreenUp Strategic Program 4 1 GROWTH Strong commercial momentum Boosters up +6.9% (1) PERFORMANCE Continued operational excellence €194m Accelerated synergy delivery €71m 2 3 DYNAMIC CAPITAL ALLOCATION POLICY BOOSTING VALUE CRE ...

Therefore, the Zacks rating upgrade for Veolia Environnement basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price. The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of + ...

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers. Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on ke ...

In regulated water, in particular, in the U.S., volumes were up 3% and we concluded several favorable rate case negotiations in New Jersey and Pennsylvania. And in Chile, for Aguas Sandinas, volumes were stable and we have continued favorable price indexation. Q1 was also marked by an outstanding Water Technology performance, in particular, the membrane business with increased sales of our AERO Products, the project business with the beginning of the Samsung contract and the St. Louis sludge project, both i ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on ...

On the 19 financial and nonfinancial targets circa 17 were achieved, including all the financial targets. You'll find details in the appendix to the document, but allow me to highlight a few of them. As a sign of our employee support, employee shareholding has risen even further, reaching 7.5% today, making employees the group's largest shareholder. The financial targets of Impact 2023 have all been exceeded. And I would like to point out that they would have been achieved even if we had not acquired Suez, ...

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value ...

Financial Data and Key Metrics Changes - Revenue increased by 10.7% to €33.2 billion, with a 4.6% increase excluding energy prices [3][7][32] - EBITDA grew by 7.7%, and current EBIT increased by 14.2% [4][27] - Free cash flow reached €435 million in Q3, significantly up from 2022 [4][51] - Net financial debt decreased to €18.9 billion, with expectations to reach around €18.5 billion by year-end [4][51] Business Line Data and Key Metrics Changes - Water revenue increased by 7.2%, driven by tariffs and commercial momentum, despite lower volumes due to adverse weather [8][34] - Waste activities grew by 3.1%, with a 6.1% increase excluding recycled prices [8][39] - Energy activities saw a significant increase of 30.4%, primarily due to energy price pass-through [9][41] Market Data and Key Metrics Changes - 40% of revenue is generated outside Europe, with $5 billion in the U.S. market [5][11] - Strong growth in Central and Eastern Europe, with revenue up 16.3% in the first nine months [32] - The U.K. market showed resilience with a 5.6% revenue growth [33] Company Strategy and Development Direction - The company aims to exceed its yearly synergy targets, having already achieved €131 million in synergies in the first nine months [21][25] - Focus on decarbonization and resource generation as key growth engines, with significant contracts awarded in these areas [5][13] - Resumed asset rotation policy to enhance value creation after two years of focusing on acquisitions and divestitures [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the upper range of EBITDA guidance for 2023, with no anticipated negative trends [6][56] - The company highlighted strong commercial momentum and resilience in its business model, which is 85% immune to macro trends [5][11] - Management noted that inflation has been neutral or slightly positive for margins, with no expected squeeze in the future [78] Other Important Information - The Veolia Cares initiative was launched, providing a common base level of social protection for all employees worldwide [24] - The company is committed to maintaining a solid investment-grade rating while managing its capital allocation strictly [19][52] Q&A Session Summary Question: Regarding strong results and guidance - Management confirmed confidence in reaching the upper range of EBITDA guidance, with no expected negative trends in Q4 [56][57] Question: On cost-cutting translation and working capital - Management indicated that 30% to 50% of cost-cutting translates into underlying EBITDA gains, with current translation at 35% [59][61] Question: On thematic events and core activities - Management selected energy, U.S. activities, and water technology for thematic events due to their core importance and potential underappreciation in the market [65][67] Question: On waste volumes and pricing dynamics - Management noted flat waste volumes but highlighted strong pricing power and no signs of a price war [73][75] Question: On synergies and inflation impact - Management provided examples of synergies from operational efficiencies and confirmed that inflation remains neutral or slightly positive for margins [77][78]