Chairman and CEO, VINCI
The growth potential in our business lines has certainly never been so considerable. Our companies are rallying around all the transformations under way in cities, buildings, transport infrastructure, energy grids and communication networks, in particular to address the major challenge of our planet’s health.
How would you sum up VINCI’s business performance in 2021?
It’s solid. It bears the mark of our model’s resilience. We are a robust and at the same time mobile group, which is showing that it has the ability and agility to adapt to the shifting landscape during the public health crisis and to promptly return to a long-term growth path. Our revenue in 2021 was higher than in 2019, thanks to the sharp upswing in our business activities in the energy and construction sectors.
In our concessions, it is important to point out that traffic on our motorways was buoyant. Our airports were still heavily affected by the pandemic, but the overall repercussions are relatively limited. Our earnings also increased substantially, and free cash flow generation was outstanding. Lastly, the fact that we have kept our net debt within bounds enabled us to carry out our investments and development projects in optimal conditions.
What about the trend in each business?
The highlight in Concessions was that traffic on our motorways in France, which had been held back by travel restrictions in the first half of 2021, climbed back to its pre-crisis level then beyond it in the summer. The trend was by and large the same on our motorways outside France. The situation at our airports improved in Europe and the Americas during the year, once again showing that traffic springs back as soon as authorities lift restrictions. Unprecedented efforts were made to reduce investments and operating expenses.
In Construction, 2021 saw VINCI Construction and Eurovia join forces in a new integrated business line to tap into the complementarities between their areas of expertise and networks around the world. This move will optimise our growth potential in the building and civil engineering sectors in the long term, as well as our operational performance in the near term. We started seeing this in 2021: revenue and profit margin rates rose beyond their 2019 levels, and the order book grew slightly compared to 2020 – when it was already very high due to the exceptional volume of major new contracts awarded that year.
The momentum was even more noticeable at VINCI Energies, which is one of the best performing companies in its sector. Its ability to rally around its customers during the health crisis has further strengthened its ties with them, and we are seeing the results in its brisk growth and order intake. Essentially, VINCI Energies is taking full advantage of its ability to create solutions and services that position its companies at the very core of their customers’ energy transition and digital transformation.
The other major milestone here was the acquisition of ACS’s energy business, Cobra IS, which we finalised at the very end of 2021.
What will Cobra IS bring to VINCI?
We have always said that we are determined to expand in the energy sector. This large acquisition, representing an investment of about €4.2 billion in enterprise value, confirms our ambition to build a global leader in this field. Cobra IS complements VINCI: it has strong positions in the Iberian Peninsula and Latin America, and acknowledged expertise in developing turnkey energy projects. It works on these projects synergistically with a renewable energy concession development platform, which we have acquired as well. With this move, we will change scale in these very buoyant markets. We will also bring in our investment capacity and know-how as a concession operator, construction contractor and energy specialist. Moving forward, we will strengthen the long-term side of our business, because we intend to keep the renewable energy assets we develop, as we have done with our motorway and airport concessions.
What is the outlook for 2022 and beyond?
Notwithstanding the lingering uncertainty surrounding Covid-19 – which makes it difficult to make forecasts –, we are in a good position for the post-crisis phase. VINCI Construction and VINCI Energies have very large order books, so we expect them both to remain on their positive trajectories. The contribution from Cobra IS will also kick in. At VINCI Concessions, barring new travel restrictions, motorway traffic should remain as robust as in the second half of 2021. Airport traffic still depends on government measures. This is especially true for international flights. But, as we have seen in the past, passenger numbers will probably pick up swiftly as soon as the health situation improves. And we expect traffic to continue to grow over the long term, because the structural factors underpinning demand for air travel are solid.
Beyond 2022 – and this is the main very positive signal–, the growth potential in our business lines has certainly never been so considerable. We are active in the mobility, construction and energy sectors. So we are at the centre of the challenges facing today’s world. Our companies are rallying around all the transformations under way in cities, buildings, transport infrastructure, energy grids and communication networks, in particular to address the major challenge of our planet’s health.
Precisely, how are you tackling the climate emergency in your business lines?
The ambitious commitments we made in 2020, when we recast our environmental policy, rank this issue as a strategic priority for VINCI. This is the new frontier for all our business activities. We can and want to make a positive contribution in this area, through all our business lines – each in its respective field but also combining their expertise to make progress towards this primary objective. It is our responsibility as builders of cities and regions. It is a necessity dictated by the climate emergency. And, through our ability to respond, we are opening doors into the future for our companies and at the same time taking action for the future of the planet. We are moreover doing all this with the support of our shareholders, who voted overwhelmingly in favour of our environmental transition plan at our 2021 Shareholders’ General Meeting, and of the investors who subscribe to the green bonds we issue. Their trust is encouraging us to push ahead in this direction.
How is VINCI implementing its new environmental ambition, inpractice?
By combining a strong thrust at Group level and our teams’ commitment on the ground. We were extremely active on this front in 2021. The success of our first Environment Awards is one example of this. We have launched action plans in each of our business lines, and now our employees are amplifying them with thousands of initiatives in our day-to-day operations. We are seeing the same enthusiasm and creativity in our teams worldwide. This shows that the environment can be a powerful lever for cohesion and transformation in a group such as ours.
Implementation is based on a two-pronged approach: taking action to reduce our environmental impact in our own operations, with the aim of setting an example in our production and operation processes, and supporting our customers’ and infrastructure users’ efforts to shrink their footprint. To move forward on these two complementary fronts, we can count on a flurry of innovation both at Group level in our platform Leonard, and in our businesses and companies. We are radically accelerating our business lines’ environmental transformation, with our eyes on two goals: to renew our own practices and, through our products, services and solutions, to fast-track the ecological transition in the cities and regions where we play a prominent role. This is what prompted us, for instance, to team up with other large companies to invest in developing green hydrogen and in infrastructure to produce this low-carbon energy that is bound to be an essential component of mobility tomorrow.
Against this background, how would you sum up VINCI’s vision?
We are moving forward single-mindedly with our plan for virtuous growth. The growing sense of urgency is pressing us all to act now to protect the future of the planet and people. This urgency, in other words, is setting virtuous cycles in motion. Similarly, our companies set virtuous growth cycles in motion when they play their full role as drivers in this vital collective endeavour. Ultimately, the challenges in today’s world are showing us that all-round performance, which is the approach we have always taken, is the right way to go. For VINCI, economic performance, environmental performance and contributing to the common good go hand in hand. This is our vision of progress!