3 key takeaways from Eiffage’s first quarter report

An Eiffage Énergie Systèmes worker on a railway site. (Image: Eiffage)

The company’s overall revenue reached €5.2 billion (US$5.6 billion), a 4.9% increase over last year, with international revenue surging up 13.1%.

1) Strong order book and revenue in contracting and concessions

Contracting saw a 4.8% increase in revenue to €4.3 billion ($4.7 billion), with the Énergie Systèmes division leading the way with a 15.2% year-over-year increase.

Encompassing construction, infrastructure, and energy systems, contracting reported a €27.8 billion ($30.2 billion) order book, which is up 40% year-on-year.

The steep rise in orders and growth in revenue was augmented by two major contracts and strategic acquisitions, said Eiffage: Their concessionaire role for the A412 motorway in the UK and the acquisition of German-based EQOS Energie by the Eiffage Énergie Systèmes division.

Other significant contracts boosting revenues include civil engineering works for the Penly EPR2 reactors in France and the design and construction of a section of the Grand Paris Express.

Revenue from concessions grew by 5.4% to €880 million ($956 million), supported by increased activity from motorway and airport projects, the firm said.

2) Some mixed results in Eiffage’s construction revenue

The firm’s construction revenue dropped 13.6% to €943 million ($1.02 billion), which Eiffage said was largely due to the European housing market slowdown. The division’s order book rose 3%.

The company blamed “a strict policy of selectivity, both in buildings and property development” for causing the pullback.

Property development revenue was down 23.6% to €146 million ($159 million). Housing sales slowed, said Eiffage, with the company recording 278 bookings by the end of March 2024 compared to 313 at the end of March 2023.

Infrastructure works, on the other hand, grew revenue by 8.2% to €1.8 billion ($2 billion), driven by key projects in Germany, the UK, and Norway, said Eiffage. The division’s order book was reported to be up 64%.

3) International orders increasing, liquidity remains solid

While the firm’s in-country revenue remained relatively flat (up 1.5% to €3.5 billion [$3.8 billion]), its international revenue was up to €1.6 billion ($1.7 billion), a 13.1% climb from last year. The majority of that activity – €1.5 billion ($1.6 billion) – was from other European countries, with revenue outside of Europe reported down 1.3% to €149 million ($162 million).

Eiffage’s liquidity, it said, remained strong, with the company reporting €4.2 billion ($4.6 billion) for Eiffage and €2.7 billion ($2.9 billion) for APRR, France’s second largest road network, which Eiffage owns 52% interest in.

Outlook

Eiffage said, in contracting, it expects a further increase in business activity which may be “less sustained in its organic momentum than in 2023, as part of an ongoing selective approach to acquiring business.”

In concessions, the firm is planning for an increase in revenue due to increased airport traffic, the ramp-up of the most recent motorway concessions and the full consolidation of of the Adelac (A41) road project.

“Against this backdrop, the group expects current operating income to rise in contracting, driven in particular by further growth in Eiffage Énergie Systèmes’ operating margin,” said Eiffage. “In concessions, the new tax on long-distance transport infrastructure will have a significant impact on results.”