2022 Universal Registration Document

Risk identification	Risk management procedures
Design phase Erroneous business plan Poor estimate of required investment Difficulties in finalising the financial structure Constraints relating to the applicable regulation Uncertainties affecting the contractual environment or geopolitical context Poor estimate of the project’s environmental and social impacts Legal or tax uncertainties Possible consequences: Cost overruns and delays Late delivery, project deterioration Unprofitable project Challenges to contract by the concession grantor Damage to the Group’s reputation	Design phase Erroneous business plan Poor estimate of required investment Difficulties in finalising the financial structure Constraints relating to the applicable regulation Uncertainties affecting the contractual environment or geopolitical context Poor estimate of the project’s environmental and social impacts Legal or tax uncertainties Possible consequences: Cost overruns and delays Late delivery, project deterioration Unprofitable project Challenges to contract by the concession grantor Damage to the Group’s reputation Risk management procedures Presentation to the Risk Committee before a bid is submitted Transaction structured as a special purpose vehicle (SPV): to limit the Group’s commitments and the amount it invests in the SPV, ownership of capital and control may be shared with one or more partners and a majority of the financing may be comprised of debt with no recourse or only limited recourse to shareholders Some risks may remain with the concession-granting authority, in particular in relation to making land available Recourse to the expertise of the Group’s Construction and Energy businesses Involvement of lenders from the preliminary phase Use of outside consultants Analysis of the project’s environmental and social impacts
Construction phase Poor choice of contractors and other companies Difficulties or unexpected events during construction Disturbances caused by project opponents Adverse legal or political developments Possible consequences: Cost overruns and delays Penalties Late delivery, project deterioration Unprofitable project	Construction phase Poor choice of contractors and other companies Difficulties or unexpected events during construction Disturbances caused by project opponents Adverse legal or political developments Possible consequences: Cost overruns and delays Penalties Late delivery, project deterioration Unprofitable project Risk management procedures Special attention paid to the preparation phase and the management of relations with stakeholders, including the implementation of best practices in line with the Cooperate initiative Fixed-price construction contracts based on a back-to-back principle to the extent possible
Operating phase Difficulties in concession management with the concession-granting authority, regulatory authorities and/or end users Legislative or tax changes International sanction(s) against a partner or a country in which the Group operates Damage to infrastructure Significant deterioration in financial markets Climate change, extreme weather events Strikes or toll disputes Disruptions caused by fuel shortages and/or price increases Possible consequences: Lower-than-expected traffic levels or passenger numbers Unprofitable project Difficulty in refinancing the project at favourable terms Unilateral decision by the concession-granting authority to challenge the terms of the contract Financial difficulties at airlines Infrastructure unavailability that could cause loss of revenue and contractual penalties Damage to the Group’s reputation	Operating phase Difficulties in concession management with the concession-granting authority, regulatory authorities and/or end users Legislative or tax changes International sanction(s) against a partner or a country in which the Group operates Damage to infrastructure Significant deterioration in financial markets Climate change, extreme weather events Strikes or toll disputes Disruptions caused by fuel shortages and/or price increases Possible consequences: Lower-than-expected traffic levels or passenger numbers Unprofitable project Difficulty in refinancing the project at favourable terms Unilateral decision by the concession-granting authority to challenge the terms of the contract Financial difficulties at airlines Infrastructure unavailability that could cause loss of revenue and contractual penalties Damage to the Group’s reputation Risk management procedures In-depth review of the wording of the initial contract and the periodic economic regulation contracts Quality of service to end users Strict surveillance and maintenance procedures (in France, this relates to the review and implementation of the rules laid down in the set of official documents comprising the technical instructions for the monitoring and maintenance of civil engineering structures, known by its French acronym ITSEOA) Analysis of airline credit risk

Risk identification

Risk management procedures

Design phase

Erroneous business plan
Poor estimate of required investment
Difficulties in finalising the financial structure
Constraints relating to the applicable regulation
Uncertainties affecting the contractual environment or geopolitical context
Poor estimate of the project’s environmental and social impacts
Legal or tax uncertainties

Possible consequences:

Cost overruns and delays
Late delivery, project deterioration
Unprofitable project
Challenges to contract by the concession grantor
Damage to the Group’s reputation

Presentation to the Risk Committee before a bid is submitted
Transaction structured as a special purpose vehicle (SPV): to limit the Group’s commitments and the amount it invests in the SPV, ownership of capital and control may be shared with one or more partners and a majority of the financing may be comprised of debt with no recourse or only limited recourse to shareholders
Some risks may remain with the concession-granting authority, in particular in relation to making land available
Recourse to the expertise of the Group’s Construction and Energy businesses
Involvement of lenders from the preliminary phase
Use of outside consultants
Analysis of the project’s environmental and social impacts

Construction phase

Poor choice of contractors and other companies
Difficulties or unexpected events during construction
Disturbances caused by project opponents
Adverse legal or political developments

Possible consequences:

Cost overruns and delays
Penalties
Late delivery, project deterioration
Unprofitable project

Special attention paid to the preparation phase and the management of relations with stakeholders, including the implementation of best practices in line with the Cooperate initiative
Fixed-price construction contracts based on a back-to-back principle to the extent possible

Operating phase

Difficulties in concession management with the concession-granting authority, regulatory authorities and/or end users
Legislative or tax changes
International sanction(s) against a partner or a country in which the Group operates
Damage to infrastructure
Significant deterioration in financial markets
Climate change, extreme weather events
Strikes or toll disputes
Disruptions caused by fuel shortages and/or price increases

Possible consequences:

Lower-than-expected traffic levels or passenger numbers
Unprofitable project
Difficulty in refinancing the project at favourable terms
Unilateral decision by the concession-granting authority to challenge the terms of the contract
Financial difficulties at airlines
Infrastructure unavailability that could cause loss of revenue and contractual penalties
Damage to the Group’s reputation

In-depth review of the wording of the initial contract and the periodic economic regulation contracts
Quality of service to end users
Strict surveillance and maintenance procedures (in France, this relates to the review and implementation of the rules laid down in the set of official documents comprising the technical instructions for the monitoring and maintenance of civil engineering structures, known by its French acronym ITSEOA)
Analysis of airline credit risk

PROPERTY DEVELOPMENT

The Group’s property development activities are exposed to numerous administrative, technical, commercial, tax and economic uncertainties as well as to the potential business failure of partners or subcontractors (builders). The Group’s property development operations are carried out essentially in France by VINCI Immobilier. Some VINCI Construction subsidiaries may also participate in property transactions or property development programmes, with a limited assumption of risk. Any commitment exceeding defined thresholds must be authorised in advance by the VINCI Risk Committee. The Group’s policy is to undertake a new project only after it has reached a minimum pre-sale rate.

Risk identification	Risk management procedures
Cyclical business Risk of obtaining permits; recourse to third parties Poor project and programme definition (number and size of residential units, quality category) Poor choice of partner and subcontractor companies Deterioration in the financial condition of investors and buyers Less favourable lending terms Defects in workmanship Changes in applicable regulations, particularly those relating to taxes and the environment Inflation-generated cost increases Unavailability and delays in the supply chain Possible consequences: Construction permit not obtained Programme not in line with market preferences Buyers cannot obtain bank financing Lack of demand Insufficient occupancy (offices, residential) Risk of unsold properties Cost overruns, delays or abandonment of certain projects Damage to the Group’s reputation	Cyclical business Risk of obtaining permits; recourse to third parties Poor project and programme definition (number and size of residential units, quality category) Poor choice of partner and subcontractor companies Deterioration in the financial condition of investors and buyers Less favourable lending terms Defects in workmanship Changes in applicable regulations, particularly those relating to taxes and the environment Inflation-generated cost increases Unavailability and delays in the supply chain Possible consequences: Construction permit not obtained Programme not in line with market preferences Buyers cannot obtain bank financing Lack of demand Insufficient occupancy (offices, residential) Risk of unsold properties Cost overruns, delays or abandonment of certain projects Damage to the Group’s reputation Risk management procedures Presentation to the Risk Committee prior to acquisition of the land and/or launch of property development operations Separation into three areas of expertise: residential property, business property, property services Conditions precedent in land purchase contracts (obtaining building permit, pre-sale percentage, etc.) Limiting transactions with no reservations; minimum pre-sale threshold required Strengthening controls for assigning and tracking construction work Developing a strategy to ensure that no reservations are raised at the handover for quality programmes Securing materials and setting prices sufficiently upstream with subcontractors and suppliers

Risk identification

Risk management procedures

Cyclical business
Risk of obtaining permits; recourse to third parties
Poor project and programme definition (number and size of residential units, quality category)
Poor choice of partner and subcontractor companies
Deterioration in the financial condition of investors and buyers
Less favourable lending terms
Defects in workmanship
Changes in applicable regulations, particularly those relating to taxes and the environment
Inflation-generated cost increases
Unavailability and delays in the supply chain

Possible consequences:

Construction permit not obtained
Programme not in line with market preferences
Buyers cannot obtain bank financing
Lack of demand
Insufficient occupancy (offices, residential)
Risk of unsold properties
Cost overruns, delays or abandonment of certain projects
Damage to the Group’s reputation

Presentation to the Risk Committee prior to acquisition of the land and/or launch of property development operations
Separation into three areas of expertise: residential property, business property, property services
Conditions precedent in land purchase contracts (obtaining building permit, pre-sale percentage, etc.)
Limiting transactions with no reservations; minimum pre-sale threshold required
Strengthening controls for assigning and tracking construction work
Developing a strategy to ensure that no reservations are raised at the handover for quality programmes
Securing materials and setting prices sufficiently upstream with subcontractors and suppliers

2022 Universal Registration Document

Key Data

PROPERTY DEVELOPMENT