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.
Find out about the competition of the Veolia share:
The Veolia Group is currently the world's leading water supplier. However, as we have just seen, it is active in other sectors, including sustainable development and ecology, in which it faces very strong competition. It is strongly advised to know the main competitors of this group before starting to trade its shares on the stock market. It is for this reason that we invite you to discover the companies that compete with Veolia so that you can closely monitor their news and possibly detect events or changes that may have an influence on the price of its stock.
The strategic alliances set up by the Veolia Group :
The Veolia Group has been able to forge interesting links with other internationally renowned companies as well as with small innovative companies. We invite you to discover the group's major partners here.
- Huawei : This is the case of the Chinese digital giant, Huawei, with which Veolia is working on a smart city project.
- Danone: The Veolia group has also signed an agreement with the Danone group to take charge of the treatment of its waste and to achieve a zero CO2 emission target by 2020.
- IBM: In 2014, Veolia has also joined forces with the IT giant IBM, still in the waste treatment business, to use digital technologies to optimise their intuitive and ecological aspects.
What are the advantages of the Veolia share as an investment asset?
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.
What are the disadvantages and weak points of the Veolia share?
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.