(AOF) – Olivier Berthelot has been appointed President of Eiffage Construction and joins the group’s executive committee. He succeeds Olivier Genis, who has held this position since March 2017 and has decided to exercise his retirement rights. A graduate of ESTP, Olivier Berthelot has been President of Nové since 2022, the concession company responsible for carrying out the contract for the management, renovation and development of the Ministry of the Armed Forces’ housing stock.
“In order to best prepare for his taking up of office, he was appointed Deputy Managing Director of Eiffage Construction in January 2024, while retaining the presidency of Nové,” states a press release.
Olivier Berthelot has spent his entire career within the group. He started in 1991 as a real estate program manager. He then held management positions within the production teams of Eiffage Construction, before becoming director of various subsidiaries in Île-de-France from 2005.
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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 airport concessions, for 16%;
– Mainly European presence, with France accounting for 70% of turnover, ahead of the rest of Europe for 26%;
– Business model based on employee commitment, European roots and a balance between professions – greenfield concessions, assembly and operation/maintenance – hence stability and financial complementarity between short 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;
– 5-part “low carbon” innovation strategy:
– 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…,
– broadcast via Innopédia,
– consolidation of acquired knowledge with ecosource, Sekoya, traceability, etc.;
– Environmental strategy aiming for carbon neutrality by 2050:
– 2030 stage: 46% reduction in CO2 emissions vs 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 strengthened since by the entry of large multi-year contracts;
– In concessions, expansion of the portfolio, boosted by €1.5 billion of investments (Sun “R” for renewable energies, increase in the capital of the Millau viaduct);
– Development of relations with Getlink, whose 18.79% stake in its capital will be accounted for using the equity method in the accounts from the second 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 relations with the State beneficial for APRR and AREA (regularity of contractual increases);
– Strong diversity of 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%);
– Risk of increased taxation on motorway concession companies;
– After a +10% increase in half-yearly revenues and net profit, 2023 outlook: growth in activity and profitability in works and concessions.
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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 in 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 of the year, while sales to institutions fell by 23%. The trend is the same for collective housing sales, down 9.8%.
These negative trends are accompanied by a decline in public investments, while PGE repayments are beginning. Due to a lack of visibility, local authorities prefer to put certain projects on hold. They must also face a reduction 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 the local authorities’ mandate, i.e. in 2023 and 2024. This therefore represents a significant loss of revenue for the sector.