DCF Studio

    VIE.PA · PAR · Industrials

    Veolia Environnement SA

    Also onConsensus Drift

    Implied value per share

    EUR 57.20

    Market price

    EUR 31.74

    Implied upside

    +80.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedReported capital expenditure averages just 0.00% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 5.76% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 57.20+80.2%
    Exit multiple
    EUR 39.75+25.2%
    Market price
    EUR 31.74

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 44.9bnEUR 45.4bnEUR 46.0bnEUR 46.5bnEUR 47.0bn+1.2%
    EBITEUR 3.2bnEUR 3.3bnEUR 3.3bnEUR 3.4bnEUR 3.4bn+1.2%
    NOPATEUR 2.4bnEUR 2.4bnEUR 2.5bnEUR 2.5bnEUR 2.5bn+1.2%
    Add depreciation & amortisationEUR 3.1bnEUR 3.2bnEUR 3.2bnEUR 3.2bnEUR 3.3bn+1.2%
    Less capital expenditureEUR -2.6bnEUR -2.6bnEUR -2.6bnEUR -2.7bnEUR -2.7bn+1.2%
    Less increase in working capitalEUR 152.4mEUR 154.2mEUR 156.0mEUR 157.8mEUR 159.6m-1.2%
    Free cashflow to firmEUR 3.1bnEUR 3.1bnEUR 3.2bnEUR 3.2bnEUR 3.2bn+1.2%
    Discount factor0.96930.91080.85580.80410.7556-
    Present valueEUR 3.0bnEUR 2.8bnEUR 2.7bnEUR 2.6bnEUR 2.4bn-4.9%
    Present Value Of The ForecastEUR 13.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.993Reported 0.990, pulled toward 1.0 (Blume)
    Cost of equity9.16%Risk-free + beta x equity risk premium
    Cost of debt4.36%Interest expense / average total debt
    Market capitalisationEUR 23.6bn53.8% of capital
    Total debtEUR 20.2bn46.2% of capital, book value as a proxy
    Tax rate25.8%Effective, capped at statutory
    WACC6.43%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareEUR 57.20

    74% of EV

    Forecast FCFF, final year
    EUR 3.2bn
    Capex at depreciation, working capital in reinvestment
    EUR 2.9bn
    Less reinvestment at g/ROIC (32.7% of NOPAT)
    EUR -957.2m
    Capitalised
    EUR 2.0bn
    ROIC (reported)
    7.7%
    Terminal value, undiscounted
    EUR 51.5bn
    Terminal value, discounted
    EUR 38.9bn
    Enterprise value
    EUR 52.5bn
    Less net debt
    EUR 10.6bn
    Equity value
    EUR 41.9bn

    Exit at 5.2x EBITDA

    Value per shareEUR 39.75

    66% of EV

    Terminal value, undiscounted
    EUR 34.6bn
    Terminal value, discounted
    EUR 26.2bn
    Enterprise value
    EUR 39.7bn
    Less net debt
    EUR 10.6bn
    Equity value
    EUR 29.1bn

    Spread between methods: 36%.

    Sensitivity

    Value per share (EUR) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.43%96.77107.21122.95149.57204.70
    5.43%70.0573.8678.8985.9296.49
    6.43%54.1355.5157.2059.3162.09
    7.43%43.5543.8844.2444.6545.10
    8.43%36.7236.8937.0537.2237.38

    Outlined: this model. Green text: above today's price of 31.74. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year1.2%-6.3%-7.4pp
    EBIT margin7.2%4.2%-3.1pp
    Discount rate6.4%9.5%+3.0pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.