Eiffage: Thanks to the energy branch, Eiffage's growth is outpacing the market

(BFM Bourse) – The construction and concessions group delivered revenues above expectations in the third quarter, driven by the good momentum of its energy division.

If Vinci had somewhat disappointed the market during this results season, its closest competitor, Eiffage, met expectations.

The construction and concession group rose 2.3% at the end of the session this Thursday after having delivered its third quarter activity.

From July to the end of September, the group generated revenues of 5.9 billion euros, up 7.7% on a published basis and 4.6% on a comparable basis. The company quite clearly exceeded the consensus, at 5.78 billion euros, according to Oddo BHF.

In concessions (motorways and the airports of Lille and Toulouse) Eiffage recorded an increase in its turnover of 4.9% on a comparable basis. In “Works”, which brings together construction, infrastructure (road, civil engineering) and the “energy systems” branch (design, production and maintenance of equipment and systems in electrical, industrial or climate engineering) revenues have increased. of 4.5% in organic data (excluding currency and scope effects).

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A “remarkable” performance

Eiffage was penalized by the weakness of its “construction” branch, in which turnover fell by 10.5% on a comparable basis, due to the drop in new housing construction.

The good surprise of the publication comes from the “energy systems” branch whose turnover jumped 16.9% on a comparable basis over the period, for a total of 1.76 billion euros against a consensus. at 1.58 billion notes Oddo BHF.

“French organic growth of 6% (compared to 2% for Vinci Energies France at +2% and 0.4% for Spie) is solid, stimulated by the ramp-up of the Grand Paris Express projects and sustained flow activity” , underlines Morgan Stanley for its part.

“The European performance is remarkable, with organic growth close to +30% compared to the previous year on easy comparable bases, supported by the delivery of solar photovoltaic projects in Spain. Such outperformance of Eiffage Energy Systems is bodes well for margins and contract valuation (the division having higher margins and higher valuation multiples compared to the construction and infrastructure divisions),” adds the American bank.

Corporate tax surcharge

At the end of this publication, Eiffage confirmed its objectives for 2024, namely an increase in activity, an increase in current operating income in “works” and a net profit “of the same order as in 2023 with taxation constant corporate tax.

On this last point, Eiffage assessed the impact of the future increase in corporate tax as currently discussed in Parliament as part of the Finance bill for 2025. Based on its 2023 results, the The company estimated that this increase in taxation would have reduced its net profit by around 135 million euros. Morgan Stanley expects an impact that is half the size.

Oddo BHF, for its part, reiterated its “neutral” advice on the stock. “We are maintaining a 20% discount which seems to us entirely justified by the growing gap with the performance of Vinci, its big brother, but also and above all the lack of structuring operation. Eiffage is certainly at the gates of the CAC40 but the group does not seem to show any inclination to strengthen its financial communication…”, writes the broker.

Julien Marion – ©2024 BFM Bourse