VINCI - 2008 annual report

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BUSINESS REPORT CONSTRUCTION
OUTLOOK GOOD VISIBILTY FOR 2009,
BUOYANT LONG-TERM MARKETS
In the short term, VINCI Construction expects a volume contraction in its
markets as a result of the downturn in its business environment, marking
a slowdown in the growth cycle that has doubled its revenue over the
last fi ve years.
In the long term, the markets in which VINCI Construction operates will
be sustainably buoyed by the substantial requirements for infrastructure
and facilities of all types (transport, energy, health care, education, etc.) in
both the emerging countries, where new construction will be the norm,
and in mature economies, in which the focus will be on modernisation.
An increasing proportion of these projects will be carried out under PPP
contracts, and synergies with VINCI Concessions hold out signifi cant
prospects in this fi eld.
At the end of 2008, VINCI Construction’s order book amounted to €16
billion (12% above the level at the end of 2007), accounting for about one
year of average business activity and thus aff ording excellent visibility for
a good part of 2009.
VINCI Construction’s wide range of business lines, areas of operation
and customers, together with the responsiveness of its organisations and
the ability of its companies to meet changing demand in their markets,
enable it to withstand cyclical swings. This resilience is reinforced by the
major steps it has taken in recent years – building a unifi ed network in
France, with VINCI Construction France, broadening its range of expertise
(soil technologies, oil and gas infrastructure, nuclear) and internationalising
its business activity, with half its revenue now generated outside
mainland France.
VINCI Construction will be moving into the period of market contraction
that is now expected without departing from its principles of selective
order-taking and rigorous management. Its constant priority will be to
uphold its margins, even if this means, in some cases, voluntarily reducing
volumes. Activity will however be bolstered, during this intermediary
period, by public economic stimulus programmes, which give pride of
place to infrastructure projects and construction business lines, especially
in France, where the stimulus package is combined with the major
building energy renovation programmes that emerged from the Grenelle
Environment Forum.
The development of PPPs aimed at building, refurbishing
and maintaining public buildings enabled
SKE, VINCI Construction’s German subsidiary, to
diversify into the educational sector, winning three
major contracts in 2008.
VINCI __ 2008 ANNUAL REPORT
Our internationalisation is notably driven
by specialised subsidiaries such as Entrepose
Contracting, which offers expertise in oil and
gas infrastructure.