(AOF) – Eiffage has unveiled a consolidated net income group share up 15.3% to 896 million euros. Current operating income amounted to 2.212 billion euros, up 15.3%, which represents an operating margin of 10.9% compared to 10.3% in 2021. Current operating income is now above its level before the health crisis in Works and in Concessions. More specifically, the operating margin for Works reached 3.8% compared to 3.7% in 2021.
In Concessions, the operating margin is 47.2% (44.5% in 2021), “driven by the good performance of motorway traffic while air traffic has not returned to its pre-crisis level”.
Consolidated revenue stood at more than 20.3 billion euros over the year, up 8.5% at actual structure compared to 2021 and 7.3% at constant scope and exchange rates . Activity was up significantly by 9.5% in the fourth quarter.
Eiffage is offering a dividend of 3.60 euros per share, up 0.50 euro.
The public works and concessions group forecasts a further increase in its current operating income in Works and Concessions for 2023. Net income group share should also benefit from the equity method of the stake in Getlink, starting in the second quarter.
In Works, it anticipates a further increase in its activity, while reaffirming its strict policy of selectivity in an environment still impacted by rising costs.
In Concessions, revenue is also expected to rise thanks to the gradual normalization of airport traffic, the integration of Sun’R, the contribution of the A79 motorway for a full year and the robustness of motorway traffic.
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Key points
– European leader in construction and concessions;
– Turnover of €18.7 billion generated by 3 branches: infrastructures (roads, civil engineering) for 36%, energy-systems (electrical, climatic, mechanical and process automation engineering) for 25%, construction for 22%, and, finally, motorway concessions (APPR, AREA, ADELAC, etc.) and airport concessions, for 16%;
– Predominantly European presence, France accounting for 73% of turnover, ahead of the rest of Europe for 23%;
– Business model based on the commitment of employees, European roots and the balance between trades -“greenfield” concessions, assembly and operation/maintenance-, resulting in stability and financial complementarity between short cycles and long cycles;
– Capital held at 19% (25% of voting rights) by employees Benoît de Ruffray being Chairman and CEO of the 12-member board;
– Balance sheet characterized by the generation of cash from the works activity, of €1.1 billion at the end of June, compared to the net debt borne by the concessions, of €10.4 billion, with €4.8 billion at the level of the holding.
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 achievements with ecosource, Sekoya, traceability, etc.;
– Environmental strategy detailed in the 3rd climate report aiming for carbon neutrality by 2050:
– 2030 stage: 46% drop in CO2 emissions, vs 2019, CO2 emissions from activities and 30% upstream and downstream,
– ecocircularity and support for biodiversity;
– Visibility of the activity, with an order book of 18 billion in works;
– In concessions, integration of Sun “R” and Cegelog.
– 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).
Challenges
– Strong diversity in margins between works and concessions and, in the concessions branch, increase in cash flow limited by the weight of the minority Macquarie (50% of the capital – 1%);
– After an 8.6% increase in revenues and a 36% increase in net profit, prospects for 2022 of growth in activity in works, more sustained in concessions, and in profitability.
Find out more about the BTP / Construction sector
Double punishment 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 of the new home market in the diffuse sector collapsed by 26.8% over one year. As for sales of new homes in the grouped sector, sales to individuals fell by 17.3% over one year in the first half, while sales to institutions fell by 23%. The trend is the same for the sale of collective housing, down 9.8%.
These bad trends are accompanied by a decline in public investment, while repayments of PGE begin. Due to a lack of visibility, local authorities prefer to suspend certain projects. They also have to face a drop in their resources and a significant increase in the cost of energy and works. However, the most significant investments are generally made during the third and fourth years of the local authorities’ mandate, that is to say in 2023 and 2024. This therefore represents a significant shortfall for the sector.