(BFM Bourse) – The construction and concessions group has raised its cash generation forecast for the past year, which will mark a new record, higher than the amount of 5.4 billion euros for 2022.
Just before the “quiet period” – a period during which a listed group does not comment on its financial and operational situation prior to the publication of financial results – Vinci warns the market that its performance has exceeded its own forecasts.
In a press release published after the market closed, the specialist in construction, highway, airport and energy concessions announced that it had increased its free cash flow generation forecast for the past year.
The CAC 40 resident previously expected to generate free cash flow of at least 4.5 billion. It will ultimately be much more: Vinci explained that its previous record of 2022, i.e. 5.4 billion euros, would be exceeded in 2023, without specifying the exact amount.
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Consensus forgotten
The group will also do better than analysts’ consensus, which so far stood at 4.75 billion euros, according to UBS, which itself expected a figure of 4.95 billion euros.
“This particularly remarkable situation would result in particular from a level of customer collections at the end of the year higher than expectations and the time delay of certain investments,” explains Vinci in a press release.
A performance indicator which is not included in the income statement but in a separate table, free cash flow allows us to know whether a group has burned or stored cash over a given financial year. It is particularly monitored for industrial companies (like Airbus) or those with a high level of debt, because a green flow means that the company is deleveraging.
Vinci certainly benefits from a solid balance sheet, with net debt which represented less than twice Ebitda (gross operating income) at the end of December 2022, a level considered healthy by the market. But a greater cash flow gives a company more latitude to invest or carry out external growth operations (business buyouts).
On the Paris Stock Exchange, the market appreciated this announcement, with Vinci shares increasing by 2.1% around 3:30 p.m., outperforming the CAC 40 at the same time (+0.9%).
Annual results on February 7
This is not the first time that Vinci has had a strong end to the year. Already in 2022, the record of 5.4 billion euros of free cash flow had been reached thanks to high collections at the end of the financial year. In 2020, the group published a free cash flow of 4 billion, twice the 2 billion euros expected at the time by analysts, releasing nearly 2 billion euros in cash in the month alone of December.
The group’s CEO, Xavier Huillard, then explained that this performance was explained by a “Covid-19 effect”, public companies being encouraged to pay their suppliers as quickly as possible to support them in times of crisis.
Vinci will publish its 2023 results in full after the market closes on Thursday February 7. UBS expects its net profit to increase by 5% in 2024 despite the impact of the French government’s tax on transport infrastructure, which Vinci had estimated at around 260 million euros based on its results. 2022.
Seduced by the group’s asset allocation strategy, Stifel believes, for its part, that the group should continue acquisitions this year, which will allow it to increase its valuation premium compared to its closest French comparables.
Julien Marion – ©2024 BFM Bourse
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