(AOF) – Vinci reported solid results for its 2023 financial year. The construction and concessions giant generated consolidated net income, group share, of 4.7 billion euros, an increase of 10%. Its Ebitda amounts to 12 billion euros (17.4% of turnover), up 17% compared to 2022 (10.2 billion euros, or 16.6% of turnover). business). Vinci Airports contributes half of this increase, a result of the recovery in air traffic, the increase in revenue per passenger, good cost control and the integration of OMA.
Consolidated turnover amounted to 68.8 billion euros, up 11.6%. In France (43% of the total), turnover reached 29.6 billion euros, an improvement of 6%. Internationally (57% of the total), turnover stood at 39.2 billion euros, up 16%.
Free cash flow reached a record level of 6.6 billion euros compared to 5.4 billion euros in 2022. This performance is well beyond the expectations expressed at the start of 2023.
“Vinci achieved an overall performance of very high quality in 2023. Turnover and results are growing strongly and reaching new records. Free cash flow generation is at an exceptional level, well exceeding expectations, commented Xavier Huillard, Chairman and CEO of Vinci, quoted in a press release.
Before adding a caveat: “The dynamic of almost all of the group’s businesses, both in France and internationally, was very positive throughout the year. The only exception is real estate development which involves a severe economic crisis.
The payment of a dividend of 4.50 euros
The board of directors approved the payment of a dividend in the amount of 4.50 euros per share, payable entirely in cash.
In terms of prospects, the group is planning a further increase in its turnover for 2024, but this should be of a lesser magnitude than that achieved in 2023. Results should also improve.
This trend is before taking into account the new tax on long-distance transport infrastructure decided by the French government, the amount of which is estimated at around 280 million euros.
Despite this negative impact, the net result in 2024 could be close to the level reached in 2023.
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Key points
World leader in construction born in 1898 and involved in motorway and airport concessions;
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Revenues of €61.7 billion, of which 55% were generated internationally, distributed between construction for 47%, energy for 36%, motorway and airport concessions for 15% and real estate;
– Economic model: “design, finance, build and manage infrastructure and equipment for mobility” with complementarity between concessions and contracting;
– Open capital (employees with 9.9% of the capital and Qatari Holding with 3.8%), the board of directors of 15 members being chaired by Xavier Huillard also general director;
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Debt-free balance sheet, with €19.7 billion in cash and record free self-financing of €5.4 billion.
Challenges
– Growth strategy based on 3 pillars:
– in concessions, extension of the maturity of the portfolio and growth of the airport sector through external growth,
– in contracting, priority to Vinci Energy via acquisitions and to the specialized activities of Eurovia and Vinci Construction,
– synergy of concessions & contracting expertise in infrastructure projects;
– Innovation strategy organized by profession, with a budget of €50 million financing 50 programs from 12 research centers and focused on urban mobility and sustainable cities,
– partnerships with Paris-Tech (Research & environment lab), Fabrique de la Cité, etc.;
– “Ambition 2030” environmental strategy aiming for carbon neutrality in 2050:
– intermediate objective of reducing the carbon footprint by 20% in 2030 vs. 2019;
– circular process systematizing recycling and reuse in each sector,
– “avoid, reduce, compensate” approach for “0 net loss” of biodiversity,
– launch of the first green loan,
– participation in the global decarbonized hydrogen infrastructure fund;
– Dynamism of Vinci Energies, supported by acquisitions, particularly in IT in Central Europe;
– Order book of 57.3 billion, including 68% internationally
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Challenges
– Reduction in the disparity in margins between motorway concessions (2/3 of operating profit) and construction;
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Strong ambitions for Cobra IS, specialist in energy infrastructure for solar and wind energy -15 GW in the medium term of capacity, particularly in Latin America with commissioning in 2023 from 1
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photovoltaic project and construction of 1.4 GW renewable energy projects;
– Impact on profitability of the 30% stake in the Mexican OMA airport (23 million passengers in 2022);
– After a 25% increase in billings, 2023 objectives of a further increase in revenues and an operating profit slightly above the 2022 level:
– motorways: traffic of the same order as that of 2022;
– airports: passenger traffic lower than 2019 level and increase in operating income,
– VINCI Energies: new growth in activity and reinforced operating margin,
– VINCI Construction: selectivity of business intake, stabilization of activity and further improvement in operating margin;
– 2022 dividend of €4 after deposit and share program.
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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.