Veolia Environnement: H1 2013 results – Underlying performance uptick adds to new restructuring milestones
BUY, Fair Value EUR15 (+41%)
We strip out two important themes from Veolia’s H1 2013 results: i) the confirmation of an inflection point in the underlying performance in Q2; and ii) important milestones for the restructuring story: a) management looks confident of achieving the EUR170m savings target in FY13 and even suggested upside following the implementation of the new organisation (ahead of plan); b) the net debt development confirms our expectations that the ND/EBITDA ratio should stand at around 3.0x at YE13, i.e. a year ahead of schedule; c) only minor one-off items in H1 (with positive offsetting negatives) led CEO Frérot to qualify as “completed” the clean-up of operations, confirming the de-risking of the group profile; and iv) soft guidance of EUR0.70 EPS in FY14 was retained.
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