Veolia posted a poor Q1 sales performance and solid LfL EBITDA growth as expected. As for Suez, earnings growth was only generated by the cost reduction programme, and not by a rebound in activities. We were positively surprised by stable activities in France while Suez posted a LfL decline in the region last week but were not surprised by the good contribution from cost cutting. Despite this, we are sticking to our Neutral recommendation as we think only positive macro surprises from Europe or North America could drive up consensus. FV unchanged at EUR22/share.
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