(AOF) – Eiffage rose 1.45% to € 92.46 on the Paris Stock Exchange after posting a 7.3% increase in turnover in the third quarter, driven by works and concessions. The construction group achieved consolidated revenues of 5.18 billion euros in the three months up to the end of September. Its construction business increased by 8.5% and its concession subsidiary by 2%. At the end of October, Eiffage became the largest shareholder of the Channel Tunnel operator Getlink with nearly 19% of the capital.
Through this acquisition, Eiffage extends the life of its portfolio while strengthening its stake in a key player in the decarbonisation of transport in Europe.
The energy division, which builds power lines, street lamps, solar parks and data centers, reported revenues of 1.28 billion euros in the third quarter, up 12.9% over one year.
The turnover of the motorway operator APRR, a company controlled by Eiffage, amounts to 2.15 billion euros, up 12.6% in one year, with total traffic up 11.9% at 30 September compared to same period of 2021.
With an order book of € 18.8 billion, Eiffage confirmed the prospects for 2022 growth in revenues and profits in the works and concessions segments.
“Trends in sales and order acquisition in the third quarter support the idea that the outsourcing industry will remain resilient in 2023,” concludes the UBS analyst.
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– European leader in construction and concessions;
– Turnover of 18.7 billion euros 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 accounts for 73% of turnover, ahead of the rest of Europe for 23%;
– Business model based on the commitment of employees, on European roots and on the balance between the professions – “greenfield” concessions, assembly and operation / maintenance -, with consequent financial stability and complementarity between short and long cycles;
– Capital held at 19% (25% of voting rights) by Benoît de Ruffray employees as Chairman and CEO of the 12-member board;
– Balance sheet characterized by the generation of cash from work activities, equal to 1.1 billion euros at the end of June, compared to the net financial debt of the concessions, equal to 10.4 billion euros, with 4.8 billion euros at holding level.
– 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 through Start.box and Impulse Partners,
– support for operational projects through Seed’Innov and research and development programs,
– construction of the offer through Start lab, E-Face, etc.,
– distribution via Innopedia,
– consolidation of projects with ecosource, Sekoya, traceability, etc .;
– Environmental strategy detailed in the 3rd climate report aiming at carbon neutrality by 2050:
– Phase 2030: reduction of CO2 emissions by 46%, compared to 2019, of CO2 emissions from activities and by 30% upstream and downstream,
– eco-circularity and support for biodiversity;
– Visibility of the business, with an order book of 18 billion works;
– Under concession, integration of Sun “R” and Cegelog.
– Budget constraints in European countries in favor of concession projects and PPP (Public / Private Partnership), very profitable for the group and winning relations with the State for APRR and AREA (regularity of contractual increases).
– Strong difference in margins between works and concessions and, in the concessions branch, an increase in cash flow limited by the weight of the Macquarie minority (50% of the capital – 1%);
– After an increase in revenues of 8.6% and net profit of 36%, prospects for 2022 of growth in activity in the works, more sustained in concessions, and in profitability.
Concern and caution
Capeb wants to be cautious in its forecasts for the whole year. Business growth of between 1.5 and 2.5% is expected in 2022 due to economic uncertainties and rising prices. For its part, the French Construction Federation (FFB) is concerned about the decline in sales of new homes for 2023. It also asks to measure the impact of the ecological and digital transition on the sector. The RE2020 standard would therefore generate additional costs of 5 to 12%. He would like to see a “National Construction Council” set up, recalling that the sector created more than 8,000 jobs during the first quarter.