Vinci Sa Act

Thank you for taking part in this presentation of our 2021 results. I hope you can all hear me. I also hope that you found on our website the presentation of our results, which you'll be able to read through this morning. We're at the Archipel building. This is our new HQ in Nanterre. At my side, there are several of my colleagues from the Executive Committee. especially Christian Laberry, who's seated next to me, plus the heads of the main business lines that will be able to answer questions you have later. First of all, a few pictures, quickly, as is our custom. The first one... is just to illustrate the fact that we opened last December the Strasbourg Bypass with Jean Cassex, the French Prime Minister, who used the opportunity firstly to congratulate the environmental excellence of the project, but also to give a strong speech about revamping road mobility, emphasizing the fact that roads are essential for the development of France. He even added that roads were no longer to be viewed as the enemy of the environmental transition and shouldn't be seen as something that opposes rail travel. Both these types of mobility go hand in hand was his point. On the next slide, we see that we took charge a few days ago in January for a 30-year period of the Manaus Airport will also be gradually taking charge of regional airports located near Manaus, six further small airports in Brazil. Manaus is the number three cargo airport in Brazil. Especially, most importantly, its infrastructure is completely crucial for the economic and social development of the Amazon region. Our project is to roll out our environmental action plan just as we did in Salvador, which since our arrival in 2018 has become the most sustainable airport in the whole of Brazil. Next slide. we're showing you that we finalized financing of the B247 Federal Road in Germany, PPP, 30-year motorway investment around 500 million euros. This is a project which is a good illustration of the development of the PPP model in Germany. I'm sure you know, we already said this, we're a leader in this business area with five PPPs that we've won already. Next, we have a picture of the project designed by Vinci Energy. It's a floating photovoltaic farm on an old quarry that was rehabilitated by Vinci Construction. I'd add that the solar panels are placed on water, which is a plus. It increases the overall energy yield of the facility because this water naturally cools the 44,000 PV panels that, after the building of this, will make it possible to provide electricity for around 6,400 households. Here we have an illustration of a major project that we won, along with our Italian partner, under the gigantic Lyon-Turin railway project. Our portion is 23 kilometers of bitumen tunnels, which is 46 kilometers of tunnels all in all, plus... around 70 safety branching tunnels. This should be a five-year project employing around 1,650 people. Lastly, Vinci Immobilier Real Estate is developing part of the athletes' village, and 6.4 hectares of industrial brownfield is complex because, first of all, it's designed for the Olympic Games of 2024, 6,000 beds for the athletes, 33,000... square meters of services and workspace, and afterwards it will all be converted just after the Olympics to turn it into a new neighborhood, a blended neighborhood, residential plus offices. And during both stages of the process, careful attention will be played to environmental performance as well as social performance. Furthermore, this is a beautiful illustration of the concept of urban recycling. A great illustration of the zero net artificialization strategy, no soil ceiling, that we talked about already at the beginning of the year. Those points made, I'd like to say, Vinci's doing well after 2020, which showed our great ability to adapt, great resilience. Now in 2021, we're booking a strong rebound. Revenue for the full year going beyond 2019, up around 3%. Our order intake very good, order book looking very good, a clear turnaround in margins as well. Now, an important salient point, free cash flow up. It's a record level, 5.3 billion euros. This, of course, is due to an uptick in overall revenues, but it's also thanks to a great deal of work get cash in from Billings. Vinci Airport's cash flow went back in the black in the second half of 2021. This is thanks to major efforts, intense efforts made to cut both OPEX and CAPEX. Second item, our works business, increasing their operating margins. Operating margin levels are record highs, 6.5% at Vinci Energy, and a gain of 40 basis points, reaching 3.7% at new Vinci Construction versus 2019. Next item. Motorway traffic has recovered very quickly as soon as restrictions were lifted. Henceforth, since around the second half of 2021, its level has reached a higher level than the pre-COVID level. We also benefited this year, reap the benefits of continued rollout of our strategy for the environment and in-depth strategy. We've got all of our employees on board in all of our geographies and we'll be talking about this in more detail at our next annual general meeting. Lastly, at the very end of the year, 31 December of the year, 31 December, we've closed on Cobra IS acquisition, which will be building a global leader in engineering services relating to energy and also boost our development in concessions for renewable energy. All geographies, this is page 12 of my slideshow, all geographies are seeing growth versus 2020 growth. The most active geographies are also growing versus 2019, especially on the left-hand side of the slide you can see North America growing very significantly, reaching now almost 4 billion euros in revenue. We've made major progress in that part of the world over the past few years. Now to delve into greater detail in each business line, starting with Vinci Auto Roots. After the first four months of the year, they were a little bit more difficult, particularly as you'll remember, where there were still some lockdowns. So after that period, light vehicle traffic quickly recovered, reaching levels above traffic levels for 2019. That was in the second half, completing the year at minus 5.3% compared to traffic observed in 2019 during the same period. To talk about heavy goods vehicles, heavy vehicles, this was much better. It continues to be above 2019 levels throughout the year, ending the year at plus 3.1%. Interesting to observe, we feel that there's still a great potential for growth. Two phenomena here. First of all, we observed that foreign traffic, especially at the Spanish border, was below the norm for the whole year, so it should recover this year. Furthermore, bus traffic also continued to feel a strong impact of restrictions, and we do believe it should rebound this year. The crisis has yet again confirmed that roadways are the vital network in our country. Nine trips out of 10 are made by road. for our belief is that decarbonizing France and meeting commitments to decarbonize our country broadly, these targets will only be met if quickly If we don't quickly decarbonize mobility, generally and more precisely decarbonize road transport, that's precisely what we're doing with our low-carbon motorways program. This is what John Castex, the Prime Minister, underscored when he inaugurated the Strasbourg Bypass on 13 December. Vinci Autoroutes, one of the main project owners in France, and we're very pleased to have reached an agreement and gotten the go-ahead from the state council last Saturday, precisely. It was put in the official journal. It's an addendum making it possible for us to carry out the western bypass of Montpellier, thereby continuing our missions with an eye to town and country planning. Let's move on to Vinci Airports. Flight 14, the first half was depressed, but after that first half, we saw a clear uptick starting from the summertime, ending up with the last quarter that had more than doubled versus the corresponding quarter in 2020. The situation is still quite a mix, varies from geography to geography. In the Americas, they're reaching almost normal levels, going almost sometimes beyond traffic booked in 2019 in some countries. Europe is starting to normalize. The United Kingdom will begin improving. Travel restrictions very recently were lifted. You'll remember that UK citizens were only allowed to leave their country for major reasons. And this is the constraint was lifted a few weeks ago with a release of those restrictions. So we're going to see an impact of this now on air traffic in upcoming weeks and months. I already mentioned this. took charge of the Manaus Airport, and will be rolling out there the policies that have shown their effectiveness in Salvador in terms of quality of service, productivity, environmental impact, and labor impact, social impact. What seems quite clear to us is just as we've observed regarding our motorways and what we also observe in domestic airport markets, when they're in countries such as the U.S. and many Latin American countries that have major domestic airline traffic, People want to travel, people want to fly. And we're going to see the impact of this as soon as any and all restrictions are lifted in the various countries. Now in our engineering business lines, works and services, order intake continues to be very high, almost reaching the level of order intake of 2020. And you remember in 2020 we booked several mega orders, truly exceptional ones, such as the HS2 high-speed line in the United Kingdom for Vinci Construction. It was a beautiful, absolutely tremendous year at Vinci Energy, revenue up, this is page 16, slide 16, revenue up 10% compared to 2019, and 11% compared to 2020, in spite of delays in supply toward the end of the 2021 period, the supply delays probably delayed some continued jobs, continuation of job sites, and that has carried some over, postponed them to 2020. So revenue would have probably grown even more if there hadn't been some of these delays in supply, and you're familiar with these types of delays. Vinci Energy has already said that it's so magnificent, I'd like to repeat it, it's yet again improving its EBIT margin, reaching 6.5% versus 6% in 2019, which is truly remarkable, and really demonstrates, of course, their resilience, but also the robustness and the potential for growth in their business model. Vinci Energy. Excellent cash flow generation as well, making it possible to improve by 700 million euros the net debt situation for that activity over an annual period. Lastly, in spite of the pandemic, Vinci Energy continued with its strategy of external growth, during 2020 and 2021, there were no fewer than 50 small and medium-sized businesses that were acquired, accommodated, integrated into Vinci Energy, producing additional revenue of around 300 million euros during 2021. To move on to slide 17 now, you can see here the new Vinci Construction, after the merger of Eurovia and Vinci Construction, is keeping its promises. Its revenue up 5% versus 2019, reaching €26.3 billion. We're seeing a ramp-up of the major projects won recently. Also, a very good deal flow in terms of order intake is specifically and very important. I've mentioned... orders for small and medium sized businesses is very important because they make up for overall resilience, help obtain overall resilience. There's a good order intake, very good order book, back to the point, makes it possible for us to be confident in G construction and look at new projects in a highly selective fashion. Another important point, our EBIT margin is up significantly, 3.7% versus 3.3% in 2019, and it should continue to grow. Lastly, we're seeing excellent cash generation, making it possible to improve by more than 1.1 billion euros the overall net debt. for the annual period. Bottom right of the screen you can see we've now achieved Avinci Construction now has just over half of its revenue outside of France. That had been the case for several years at Avinci Energy. It's now the case at Avinci Construction as well. This is all fully in sync with our strategy, which we embarked upon several years ago now. Lastly, to talk about property, real estate development recovered very well after the abrupt shock due to the pandemic. housing unit reservations slightly above their level in 2019, specifically for managed residences, which are developing well. Vinci Immobilier is the number one developer to commit to zero soil sealing, zero artificialization by 2030, which is 20 years ahead of what's called for in the law called climate and resilience. This will make for in-depth, profound transformation of the property development model The idea will be to prefer using surfaces that have already been built on, sometimes polluted. And also, I mean, recycling, urban recycling of surfaces. And when you have to build on greenfield, we will make sure we optimize projects so that we limit to the utmost any artificialization of soil during the project. We take into account all three components and that's why we are very much in a position to reach our target of zero net artificialization of soil in property development for the full French scope by 2030. I would like to give the floor now to Christian Levy.

Thank you, Xavier.

Good morning, ladies and gentlemen. So I'll go into a little more detail on the figures that Xavier has presented. First of all, revenue, which was up in 2021 on 2020 across all our businesses, because overall we are up 14%. over 49 billion euros, and with our VASI construction and VASI energy, we're even above, we're up 3% on 2019. Over the year, the increase is particularly strong in concessions, even in the airports, whose revenues are very similar to that of 2019. This is not yet the case of VASI and POT, because VASI and POT is still down minus 55 on 2019. due to passenger traffic which is still quite low. Versy Energy was up 10% both on 2020 and 2019 and Versy Construction is up over 13% and has now reached the level above that of the pre-crisis. At Constant Scope and FX, revenues are up 13% with Scope FX representing 500 million in revenue additional of which 300 million for Vinci Energy. This reflects about 50 acquisitions, of which 30 completed in 2021, mainly in France, in Germany, and in the United States. We should also point out the 100% control taken of Erbat Promotion, which is a company in which Vinci Immobilier took a 49% stake a few years ago, in which a has 150 million revenue for the full year. Currency impact is low. The depreciation of currencies versus the euro are offset by appreciation. Sterling offset the depreciation of the dollar and some Latin American currencies. Looking now at the breakdown of revenue between France and international business in 2021, Moving on to the next slide. We see that this was a similar increase between France and international, but comparing to 2019, we see that France is back to 2019 levels, whereas international business is up, which means that international business in our revenue has increased. It's gone up from 45% in 2019 to 47% in 2021. Of course, this is excluding Cobra, and with Cobra in 2022, over 50% of our revenue will, of course, be generated overseas. Operating income, next slide, up strongly, 4.7 billion, up 1.9 billion on last year, but we're still below the 2019 level to the tune of approximately 1 billion. Merci, Autoroute. Post results very similar to 2019 and Vinci Airport, as Xavier pointed out, is still showing a loss. But the good news is that in the second half, Vinci Airport came back with positive results reflecting the drastic cuts that were made. implemented after the beginning of the pandemic in March 2020. We're very happy with the results of VersiEnergie and VersiConstruction whose results are up strongly, 1 billion in revenue for both of these businesses. 50 basis points more margin. Most of the business in the geographies have contributed to this very strong overall performance with the strongest synergies in the sector. Versi Construction in its new structure with Eurovia has a margin of 3.7 versus 3.3 in 2019 and it had not reached this level for many years. This increase reflects cuts in previous losses through the reorganisation of the business in oil and gas in 2021 and completion of some difficult projects and the first positive impact of the merger between Vestas & Construction and Eurovia. This improves profitability on 2019 with a significant reduction increase in Versi Construction whose margin stood at 3% and Frescine approximately 3% which was the margin that you've become accustomed to and that's for Versi Immobilier although the amount is lower it still shows a strong increase on last year but unfortunately we have not yet gone back to 2020, pre-21 levels due to increases in the cost of land and technical costs. So looking at the income statement, operating income in construction, where we had a loss previously We are now back to positive result this year, even though we have not yet gone back to the very high level of 2019, but it's still an improvement. The financial result here is slightly up on previous years, reflecting variation in the other direction. We've reduced the cost of debt in euro. with a coupon of close to zero for VAT-CSA and the amortization of long-standing debt for KFHUT and we're continuing to reduce the cost of debt in Euro and we had to pay more for sterling debt in order to refinance London Gatwick. So the financial results we have a very strong increase in corporate tax double that of last year's level we have a non-recurring item of 400 million euros which is the impact on our deferred tax liability of the increase on corporate tax in the UK starting 2023 it's not a cash impact but it does have an impact on our results and 200 million in the bottom line. So overall, 2.6 billion is the net result of a double that of last year, which was a low level, a low base, and not quite back to 2019 when we hope to reach that this year. And if we adjust for UK tax, that's 2.5 billion in income generated this year. Next slide is the analysis in debt variation. with an increase in debt of 1.3 billion or 18 billion to 19.5 billion. But this takes into account the check we wrote for 4.2 to acquire ICS. And we have free cash flow of 5.3 billion, which is a historic level, historic record. versus 4 billion last year and 4.2 billion in 2019. EBITDA, not yet back to 2019, but quite close to that, 7.9 billion. Working capital requirement, 1.6 billion, further improvement, not quite as good as last year, but much better than what we usually have with a strong contribution from VASI Energy and VASI Construction. That's the blue or green shaded part of the chart. CapEx really kept under control, even down CapEx from 2.9 billion to 2.5 billion over three years with a carryover of the investment in airports. but part of this is due to a genuine reduction and impact of acquisitions, namely that of Cobra. Dividends and miscellaneous up to the tune of $2 billion. We have the dividend which was paid in 2021 to the tune of $550 million. Shared buybacks which picked up again from October and now stand at $200 billion. 200 billion per year 600 million over three months so those are the flows for 2021 so what you should keep in mind is the free cash flow which is really exceptional 5.3 billion so if we analyze how we built up this free cash flow well you can see the profile of cash flow over the past three years which makes it very difficult to make forecasts. I'm usually very cautious, as you know, when you ask for guidance on free cash flow in November 2021, we had 3.4 billion, which was slightly up that of 2019. whereas we only had 2 billion in free cash flow in 2020. But we were expecting that December, given the fact that we have a lot of cash inflows from basic construction, that we would have 1 billion in December, as was the case in 2019 and not 2020, which was 2 years. And what happened in 2021 is exceptional because we generated in December 2 billion in cash flow to achieve the level of 5.3 billion. But that was, you will understand, very difficult to forecast. The major part of Vinci Construction's cash flow is achieved in the closing months of the year and the same goes for Vinci Energy. So we always prefer to be prudent in our forecast when we give guidance on free cash flow. Next, the chart shows that we have moved above a threshold here. Looking back at the past 10 years, we had 2 billion, 2.5 billion of free cash flow per year. And now we've moved to 3 to 3.5 billion. And over the past three years, we've gone above 4 billion. And now we're over 5 billion. But what I would say is that we should not extrapolate that level for the next year. That would not be reasonable given the impact of what happened in December 2021. But perhaps 5 billion will be a sort of benchmark if we want to come up with a reliable forecast for the years ahead. Versi's balance sheet is very strong, comes as no surprise to you, notwithstanding the acquisition of Cobra, accounting for 4.2 billion in committed... capital which is still below that of two years ago and as you can see we have a strong increase of 4.7 billion in working capital over the same period shareholder's equity is up and net debt is actually down by 2.4 billion even though we paid out as I said 4.2 billion net cash to acquire Cobra So, next slide. Nothing new. We still have a high level of liquidity, 18 billion euros, which is the level of 2020 almost, even though we have the acquisition of Cobra to account for. unused credit lines to the tune of 8.5 billion with 500 million of Cobra. And credit ratings, we haven't seen S&P yet. We will be soon, but I think we should be looking quite good. And we hope to keep our long-term rating stable at S&P and with Moody's, as I said. we issued a Merve CSR bond with a coupon close to zero. And we also redeemed just over 1 billion of a Coffeehood bond, which has contributed to reducing the cost of debt in the same token. We refinance in order to avoid any liquidity concerns the debt of Gatwick to the tune of 750 billion. That's a high cost because Gatwick interest rates in sterling are higher than for euro and we had to pay the price for that in order to refinance and my last slide I recall that over the past the cost of debt has constantly gone down even though the structure of debt currency has changed five years ago it was almost entirely euro denominated and now with Gatwick and our American concessions and acquisitions in the dollar region, we now have net debt, which is only 59% in euros and 41% non-euro denominated. And this means that looking to the next two years, I don't think we're going to be able to significantly go below that. We'll probably have to go slightly up given what has been done by the central banks. Thank you very much, Christian. Well,