Eiffage: construction in consortium of a ministerial office building for 178 million euros – 07/12/2022 at 18:11


(AOF) – Eiffage, through Eiffage Construction and Eiffage Services, has just won, in a consortium with the Viguier agency, the Oasis, Egis and Berim design offices as well as the companies AD Ingé, DIE and DCT, the market for the design-construction-operation-maintenance of the “Second Major Site” of the central administration of the ministries responsible for social affairs. The total amount of the contract is 178 million euros, including more than 156 million euros for Eiffage (including 155.2 million euros for deconstruction and new works).

This global performance contract was awarded by the ministries responsible for social affairs (Ministry of Labour, Full Employment and Integration, Ministry of Health and Prevention and Ministry of Solidarity, Autonomy and People with Disabilities ) who are involved, in conjunction with the State Real Estate Department, in this major real estate operation to bring together the services of the central administration, in addition to their location in the 7th arrondissement of Paris.

Located on state-owned Porte de Vanves land in Malakoff (92), site of the former INSEE headquarters, the future complex will include an R+7 building and an R+13 building classified IGH which will be connected, at each level, by glazed footbridges allowing a visual breakthrough between Malakoff and Paris. These two buildings will total a floor area of ​​approximately 35,000 square meters that can accommodate 1,800 to 2,000 workstations. In particular, they will have an auditorium, training rooms, a collaborative workspace and a restaurant.

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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.

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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.



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