Veolia shares: Price analysis before buying or selling

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Yes

ISIN code: FR0000124141

Ticker: EPA: VIE

Index or market: CAC 40

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Elements to consider before selling or buying Veolia shares

Analysis N°1

First of all, we will monitor Veolia's market shares in its areas of activity and the maintenance of its leading position in the face of competition.

Analysis N°2

We will also closely monitor the development of the group's activities, aimed at the private sector, which could become increasingly important in the coming years.

Analysis N°3

Naturally, all the news in this sector will be closely followed, including important information and publications from Veolia's main competitors, namely Suez, SAUR, RWE and Agbar.

Analysis N°4

Local competition abroad and in emerging countries in particular represents a threat to the development of Veolia's activities. These elements will therefore be monitored.

Analysis N°5

Of course, water as a natural resource and the quantities available are increasingly influential elements in the activities of this group.

Analysis N°6

Finally, the work carried out by Veolia to improve the quality of the water distribution network in Europe will also be verified, particularly in France where it is becoming increasingly obsolete.

Analysis before buying or selling Veolia shares

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General presentation of Veolia

The Veolia Group is a French group that is currently the world leader in environmental services. Its activities can be broken down in this way according to their share in the group's turnover :

Water-related services account for 42.1% of the group's revenue. The group is the international leader in this segment, providing sanitation and drinking water distribution services and engineering, design and construction of water treatment facilities.
Cleaning services generate 37% of the group's revenue. The group is also the leader in this segment, with the upkeep of public spaces, cleaning and maintenance of industrial sites, soil decontamination, ri and recycling of materials, treatment and recovery of waste through composting, incineration and storage.
Energy services, which account for 20.9% of sales and for which Veolia is the European leader, with delegated management of district heating and air conditioning networks, management of thermal, multi-technical and industrial services, and global management of buildings and public lighting.

Veolia generates 21.2% of its turnover in France, 35.1% in Europe and 43.7% in the rest of the world.

Photo credits: ©Robson309/123RF.COM

The major competitors of Veolia

Knowing the Véolia group's competition is essential before embarking on the analysis of this value. You should fully know the main adversaries in this segment and in this market, here are the main ones:

Engie

Another major competitor of Véolia is the French company Engie, which is the third largest group in the world in the non-oil energy sector. The French State is still the main shareholder of this company with nearly a quarter of the capital. Engie was created by the merger in 2008 between GDF and Suez. It went on to become the largest public service company in terms of revenue.

Saur

Still among the main competitors of the Véolia group, we find the Saur group, which is a French group specializing in the water and waste management sector. This group mainly carries out delegated management of services for local authorities and is also present in the engineering market and the construction of works related to water treatment. Its main customers are mainly local authorities and industrial customers.

RWE AG

Finally, Véolia's last direct competitor is not French but German. It is the company RWE which is a German conglomerate specialized in the energy sector and which was created in 1898. Its head office is still based in Essen today. The group owns and operates several subsidiaries with various specialties such as the distribution of electricity, gas, water and services, mainly in Europe and North America. Bear in mind that the RWE group is currently the second largest producer of electricity in Germany, particularly in the production of electricity from coal.

The major partners of Veolia

While the Veolia group has many competitors in its market, it can also count on the support of some strategic partners. Indeed, the group regularly sets up alliances with other companies as in the following three recent examples:

Thales

In 2021, the group partnered with Thales to create the first eco-sim card made of 100% recycled plastic. Indeed, the 4.5 billion SIM cards manufactured each year represent more than 20,000 tonnes of plastic. It is therefore in response to growing ecological awareness that Thales and Veolia have developed an alternative, innovative and original solution with the eco-SIM, a recycled card that is made from discarded refrigerators.

Solvay

In 2020, the group also joined forces with Solvay in a partnership to create a circular economy consortium. Together, the two companies are proposing new solutions that promise more efficient management of the metals used in lithium-ion electric vehicle batteries. The number of electric vehicles on the road is expected to rise to more than 116 million by 2030 and the availability of raw materials is therefore a strategic challenge for this industry, as the materials used for batteries are not always recovered at their maximum value.

Elise

In the same year, Veolia signed a partnership agreement with Elise, a local environmental initiative company. This agreement concerns the collection of 50,000 tonnes of office paper per year and was signed for an initial period of 5 years. Its objective is to increase the collection rate of office paper in France.

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The factors in favour of a rise in the Veolia share price:

Firstly, Veolia is currently number one in the environmental services sector throughout the world, particularly in the water, waste management and energy services sectors, which are particularly buoyant. Veolia also uses the delegated management model, which offers a lower cost for clients than with management by a public utility.

The Veolia group also has a strong international presence, with more than 40% of its turnover in Europe and 24% in the rest of the world. It is also well developed in Global Business targeting activities for large companies.

The fact that Veolia's business model is based on long-term contracts ensures good visibility and stability of the company's revenue. The group is in charge of 46% of municipal markets and 54% of industrial markets. Veolia's strategy is also based on the signing of large contracts, notably thanks to its recent reorganisation aimed at bringing together all the company's activities under a single brand in all its target countries by pooling support functions. The group's growth is based on four main pillars. Targeting major environmental issues, strengthening its position in growth markets, penetrating industrial customers and changing business models is also a strong point for the group. Project financing in the form of asset co/op co thus limits the proportion of capital employed and therefore does not unbalance the company's balance sheet.

It should also be noted that Veolia's financial situation has been strongly strengthened during 2016 thanks to the resale of SNCM and Transdev.

Finally, the last advantage of the Veolia share that can be retained concerns the good visibility of the dividend for investors.

The factors in favour of a drop in the Veolia share price:

If the Veolia share has real appeal for private investors who decide to trade it in line with CFDs, this share also has some weak points that it is also necessary to take into account and of which here are some concrete examples:

Firstly, a significant part of the business is showing significant cyclicality with the crisis, due in particular to the fall in prices in Germany, the renegotiation of contracts in France and the end of the Indianapolis contract.

In addition, the utilities segment is experiencing a bearish phase on the stock markets with a downward renegotiation of French contracts and doubts from investors who fear an imminent rise in interest rates.

Veolia's various business lines also show a strong disparity in terms of profitability, with high margins in the water sector, which accounts for ¾ of operating profit, followed by waste management, which accounts for the remaining quarter. The geographical distribution is also very disparate, since Veolia makes more profit in the rest of the world than in France and Europe.

Finally, the recent postponement of the financial targets that the group had set for 2018 has had a major impact on investor morale.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What is the listing and price information for the Veolia share?

Veolia shares are currently listed continuously on the Euronext Paris market and have been since 20 July 2000. The nominal value of each share in this group is currently €5 and the closing price of the share on 31 December 2019 was €23.71. The Veolia Group thus had a market capitalisation of €13.45 billion at the end of 2019 and the beginning of 2020. The number of shares on the market is 567.2 million.

How can I view the price of Veolia's shares?

Veolia's share price is constantly changing thanks to its live listing on the Euronext Paris market. To view the price of this stock, you must therefore have access to a real-time chart. This type of chart is accessible online on specialised sites or from the trading platforms on which this stock is offered. It is also possible to view the historical price of this stock.

Who are Veolia's direct competitors?

The Veolia group has some serious competitors in its main sectors of activity. Although it is the leader in water supply, it faces stronger competition in its other segments such as sustainable development and ecology. The most important of these are Suez Environnement, a subsidiary of the Engie group, RWE and Agbar.

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Analysis before buying or selling Veolia shares