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Part 1 - General presentation of the Group
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Despite the economic recovery, new orders have been
slow to materialize in our markets in 2010. Customers
are cautious and take longer to decide on major
investment projects. We should mention however than
in this rather sluggish economy, Hamon made the best
of a bad situation and took an increasing number of
orders compared to 2009 (see Review of the year
2010). After a slight upturn during the second half year
of 2009, our markets slowed down again in the first half
year of 2010 (“double dip” scenario). Overall, during the
first nine months of 2010 the major engineering
companies saw their orders decrease by approximately
15% compared to the same period in 2009. The
decrease is mostly the result of a reduction in the
number of major projects. However, we experienced an
increase during the second half year of 2010. In
conclusion, the markets remain very volatile and their
evolution is difficult to predict. We should also note that
our markets generally react six to twelve months after
the change in the economy. Lastly, it should be noted
that in contrast to 2009, many major engineering
companies started 2010 with a rather empty order
book, which intensified the competition.
After-sale service is a lot less volatile and less affected
by economic fluctuations. In developed countries, the
market for the repairing of existing units is also relatively
stable and significant in size.
We are noticing more and more that in developed
economies, engineering companies are selling contracts
for repair, replacement or improvement works for
existing units, while in emerging countries it is often
new units that are being built.
The United States is still affected by the absence of an
energy policy and a clear regulatory framework,
following the rejection of the “Energy Bill” by the
American Congress. As the current government has lost
its majority in the House of Representatives, nothing is
likely to change before the end of 2012. However, the
rapidly growing emerging economies have major plans
for the construction of new electrical power stations,
such as China (among others for nuclear power
stations) and India.
Investments linked to the oil, gas and petrochemical
sectors were boosted by the increase in the price of oil,
which rose from USD 80 per barrel at the start of 2010
to approximately USD 90 at the start of 2011. Numerous
projects are underway, particularly in emerging
countries (e.g. Asia, Middle East, Brazil).
The trend is similar in other heavy industries (metals,
cement, glass, etc.); the markets have been strong
particularly in emerging countries, which have seen an
increase in the prices of numerous raw materials and a
high demand from China, among others, which had a
positive influence on investments.
Lastly, we should also note that the U.S. dollar has risen
against the Euro in 2010 (USD/EUR 1,325 against
1,394 on average in 2009), which effectively increases
the numbers from the American market expressed in
Euros. The price of the main raw materials (steel,
aluminum, etc.) also increased in 2010, which consequently
increased the unit price of each plant.
In terms of the market for electrical power plants,
investments in new plants are at a low level in Europe
(moderate in Germany) and in the United States, due to
the stagnation of the demand for electricity. In some
European countries, the development of renewable
energy has more than offset the need for new production
units. However, the development of renewable
energy should slow down as a number of governments
have reduced their funding and grants for this sector.
Eventually, the development of smart grids should also
reduce the needs of new large power plants. We should
also point out that environmental pressures have also
been detrimental to some construction projects for
thermal power stations (especially coal-fired power
stations in Germany). However, projects involving
natural gas have not seen any impact as this fuel has a
high-energy performance (combined cycles) and the
gas supply has significantly increased in some regions
(particularly in the United States: shale gas).