(AOF) – Eiffage announced that APRR’s consolidated turnover excluding Construction stood at 3.019 billion euros as of December 31, 2023, up 7.1% year-on-year. Total traffic, measured in number of kilometers traveled, saw an increase of 2.5% as of December 31, 2023 compared to the previous year. Light vehicle traffic increased by 2.8% over 12 months and that of heavy goods vehicles by 0.5%. APRR’s consolidated turnover excluding Construction came to 708 million euros in the fourth quarter, an increase of 6.1%.
Total traffic, measured in number of kilometers traveled, recorded an increase of 2.8% in the fourth quarter of 2023 compared to the same period of 2022. Traffic over the quarter increased by 3.4% for light vehicles and by 0.3% for heavy goods vehicles.
AOF – LEARN MORE
Learn more about Eiffage
Key points
– European leader in construction and concessions;
– Turnover of €20.3 billion generated by 2 branches: works for 84% (road, civil engineering, energy-systems, construction) and motorway concessions (APPR, AREA, ADELAC, etc.) and airports, for 16 %;
– Mainly European presence, France accounting for 70% of turnover, ahead of the rest of Europe at 26%;
– Business model based on employee commitment, European anchoring and the balance between professions – “greenfield” concessions, assembly and operation/maintenance -, resulting in stability and financial complementarity between short cycles and long cycles;
– Capital held at 20.5% (+ 25% of voting rights) by employees, Benoît de Ruffray being chairman and CEO of the 11-member board;
– Balance sheet under control with debt increased to 10.6 billion at the end of June 2023 compared to liquidity of €3.6 billion.
Challenges
– Low carbon industrial strategy based on the reduction of internal emissions and the extension of low carbon offers;
– “Low carbon” innovation strategy in 5 parts:
– emergence of proposals via Start.box and Impulse Partners,
– support for operational projects via Seed’Innov and R&D programs,
– construction of the offer via Start lab, E-Face, etc.,
– distribution via Innopedia,
– consolidation of knowledge with ecosource, Sekoya, traceability, etc.;
– Environmental strategy aimed at carbon neutrality for 2050:
– 2030 stage: 46% reduction in CO2 emissions compared to 2019,
– ecocircularity and support for biodiversity;
– Visibility of the activity, with a work order book of €19.8 billion at the end of June 2023 and since reinforced by the entry of large multi-year contracts;
– In concessions, expansion of the portfolio, boosted by €1.5 billion in investments (Sun “R” for renewable energies, increase in the capital of the Millau viaduct);
– Evolution of relations with Getlink, whose 18.79% stake in its capital will be accounted for using the equity method from the 2nd half of the 2023 financial year.
Challenges
– Budgetary constraints in European countries favorable to concession and PPP (Public/Private Partnership) projects, very profitable for the group and winning relations with the State for APRR and AREA (regularity of contractual increases);
– Strong differences in margins between works and concessions and, in the concessions branch, cash flow increase limited by the weight of the minority Macquarie (50% of the capital – 1%);
– Risk of increased taxation on motorway concession companies;
– After an increase of +10% in half-yearly revenues and net profit, outlook for 2023: growth in activity and profitability in works and concessions.
Learn more about the BTP/Construction sector
Double penalty for the sector
The French Building Federation (FFB) recently warned of the collapse of the new housing market. Over the first eight months of 2022, sales in the new home market in the diffuse sector collapsed by 26.8% year-on-year. As for sales of new homes in the grouped sector, sales to individuals fell by 17.3% year-on-year in the first half, while sales to institutions fell by 23%. The trend is the same for collective housing sales, down 9.8%.
These bad trends are accompanied by a decline in public investments, while PGE reimbursements begin. Due to a lack of visibility, local authorities prefer to put certain projects on hold. They also have to face a drop in their resources and a significant increase in energy and works costs. However, the largest investments are generally made during the third and fourth years of mandate of communities, that is to say in 2023 and 2024. This therefore represents a significant shortfall for the sector.