Vinci Sa Act

Welcome to the Vinci conference call. I will now hand over to Mr. Christian Laberry, CFO of Vinci. Sir, please go ahead.

Yes, good afternoon or good evening, and thank you for attending this conference call. As usual, I am today with Maria-Emilia Volk, our controller, and the investment relations team, Grégoire Thibault and Alexandra Bournazel, and I will be brief, as usual, to have more time for the Q&A. So what are the key takeaways of the beginning of the year 2021 for Vinci? We can start maybe with a quick organizational reminder. As announced last February, Vinci Construction and Eurovia have been placed under the leadership of Pierre Angelras, which used to be CEO of Eurovia and member of the executive committee of the group. And therefore, Vinci Construction and Eurovia will, excuse me, Vinci will from now on report on this group of business under the name of Vinci Construction, which will include as a result Eurovia. Q1 revenue, as you saw it in the press release, came to 10.2 billion euro, up 5% year on year, and also 5% versus Q1 2019. France, which accounts for 57% of the total, was up 11% year-on-year. Bear in mind that in Q1 2020, business levels at Vinci Énergie, Vinci Construction and Concession in France have fallen sharply following the start of the first lockdown which took place as of March 17th. International accounting for 43% of the total was down 2.3%. minus 1.5% like-unlike, eliminating the currency variations. Unlike in France, business levels abroad generally held up well despite the pandemic last year at the same period, which explains why the variation between 2021 and 2020 is not as favorable as for France. Changes in scope were mainly related to the integration of Vinci Energy in most recent acquisitions, which increased revenue by 1.3%. And exchange rate movements had a negative impact, as I mentioned it, of 2.2%, since most currencies, especially the dollar US, fell against the euro. A very positive point is the order intake. The order intake was dynamic, plus 8% on rolling 12-month basis, of which plus 16% abroad and minus 2% in France. And if we compare with the first quarter of 2020, the order intake was up in the first quarter of 2021, 19%. That growth reflects several large contracts wins at Vinci Construction in particular, including a contract for the Femern Tunnel that will connect in the future Germany and Denmark, which represents an amount of around 1 billion euros. So as a result of that, the order book hit a new all-time high of 45.8 billion euros, up 21% year-on-year. which represents almost 15 months of activity of Vinci Energy plus Vinci Construction, the new Vinci Construction, which provide us with a good visibility and serenity for the future. International business account for 61% of the order book versus 57% at the end of March 2020. In terms of financial position, Vinci continues to maintain its liquidity at a very high level, more than 18 billion, 18.4 exactly, at the end of March 2021, which comprises managed net cash of 9.8 billion euros, 600 million of commercial paper, and also an unused confirmed syndicated bank facility of 8 billion, which is due to mature in November 2025 for almost all of this amount. So as a result, Vinci is well prepared to continue dealing with the unexpected and also continue its development. So let's now have a look, a closer look at the main divisions. Vinci Concession, Q1 sales of 1.3 billion down 22% versus Q1 2020 and down 20% versus Q1 2019. So, Vinci Autoroute first. Vinci Autoroute, which is rather good news, stability of the revenue at 1.1 billion euros. Despite travel restrictions in France and in the rest of Europe, traffic on our motorways saw only a limited decline of 2.8% compared to Q1 2020. Light vehicle traffic fell by 4.5%, while heavy vehicle traffic rose 4.8%. thanks to a firm economic activity and growth in the e-commerce. Compared to Q1 2019, traffic levels were still down 11%. Heavy vehicle traffic up 1.7% was robust, unlike light vehicle traffic down 13.8% versus Q1 2019. Now, Vassi Airport, Vinci Airport, a revenue of only 150 million, down 70%. Like the world's air transport sector as a whole, revenue of Vinci Airport continued to suffer badly from the COVID-19 pandemic and the resulting travel restrictions, continuing the trend seen in late 2020. You have already seen the traffic figures published last week. Overall, passenger numbers in Q1 2021 were down 78% versus Q1 2020 and down 82% versus Q1 2019. Let's talk now about the energy business. Vinci Energy, with sales of 3.5 billion, started the 2021 year well with revenue rising 7%. with Q1 2020 6% like for like and 13% compared to Q1 2019. That upturn was driven by France, where revenue was up 14% in Q1 2021 versus Q1 2020, which had been hit by the start of the first lockdown last year. Outside France, where business levels remained firm last year despite the pandemic, Revenue was up only 2% on an actual basis and stable like for like year on year. This performance is one more time a good illustration of Vincit Energy's resilience and diversity in terms of geographical exposure, business segments, and expertise. Acquisition also contributed by around $60 million to the first quarter revenue increase. Order intake of Vinci Energy was more or less stable compared to Q1 2020, even though Vinci Energies won several major contracts in early 2020. Now let's talk about the new Vinci Construction, which includes Rovia. So Vinci Construction with sales of 5.3 billion, The first quarter of this year continued the positive inflection we saw in the second half of last year since the revenue rose 10% versus Q1 last year and 11% like for like and 6% versus Q1 2019. In France, where business levels were badly affected last year by the near shutdown of work sites, for almost two months starting in mid-March 2020. Growth was firm. Revenue were up 12% in Q1 2021, year on year, with a sharp increase in revenue from public works and civil engineering, supported in particular by the Grand Paris Express projects, and also from road, rail, and ground works, all that for France. Business levels in the building segment were supported by several major developments in the Paris area. So now, outside of France, the growth of the revenue of Vinci Construction in the first quarter was 8%, driven by the major project division, Vinci Construction Major Project, with the ramp-up of several large projects, large contracts, which were won recently, and particularly the HS2 in the UK. which we entered into the order book, if I remember well, in Q2 last year, while revenue was stable in road and rail works despite the negative currency effect. Vinci Construction order intake rose 34% year-on-year in Q1 2021. And now last but not least, Vinci Immobilier. are the property development activities. So the revenue of RC Immobilier rose 34.5% to $320 million in Q1 2021 after the integration of Urbat Promotion, which is a small developer in the southeast of France, which we acquired 100% in January this year. Like for like, the revenue of Vinci Immobilier in the first quarter rose 24.2% versus Q1 last year, when you remember probably business levels were hit by worksite shutdowns from mid-March onwards, and also by a lower number of projects entering into the construction phase because of the pandemic. The number of homes reserved in France by Vinci Immobilier rose 46% to 1,525 units for a value which is up 64% because the average value per unit has increased also. In conclusion, with these good figures, overall, we maintain our 2021 outlook, which we already... explained and disclosed in the previous communications. Advancy Construction and Advancy Energy, the group is aiming, bearing exceptional events obviously, is aiming to increase revenue very close to the 2019 level and also to improve operating margins compared with 2020. Operating margins for the two divisions, Advancy Construction and Advancy Energy, should return to levels similar to those seen in 2019, but probably slightly better, slightly higher in the case, particularly of construction activities. In concession, visibility still remains very limited and business levels continue to depend on restrictions arising from the COVID-19 situation in France and abroad. As a result, it is not possible at this stage to offer reliable forecasts regarding neither Vinci autoroute traffic levels nor Vinci airport passenger numbers for the next few quarters. But for Vinci autoroute, traffic levels can be expected to return to normal relatively quickly, as this was seen in summer last year, as soon as travel restrictions are lifted in France. And maybe the good news will be the next announcement by the government for a new opening of travel within the country in May. Given these uncertainties and the weight of the concession business for the group's overall performance, Vinci obviously cannot provide, at this stage, reliable earnings forecasts for 2021. In any event, earnings will not recover to 2019 levels in 2021. But although it remains unclear how the pandemic will unfold, Vinci has strengths that will enable it to get back onto a trajectory of consistent growth once the COVID-19 crisis has been overcome. Thank you for your attention, and we all are now ready to take your questions.

Thank you, ladies and gentlemen. This concludes the presentation. Now we open the Q&A session. If you wish to ask a question, please press 01 on your telephone keypad. We have a first question from Shippen Lynch from Dutch Bank.