Good afternoon. Thank you for standing by, and welcome to the VINCI nine-month 2023 revenue conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero. At this time, I would like to turn the conference over to Mr. Grégoire Thibault, Head of Investor Relations. Please go ahead, sir.
Thank you. Hello, everybody, for joining the call. I'm today with the Investor Relations team, Boris Vallée and Marie Richard. And as usual, we try to be brief to have more time for the Q&A, and because I know there are other calls this evening for some of you. So what are the key takeaways of this presentation? First, the solid operating performance overall in Q3, strong business leaders with Q3 revenue of EUR 18.3 billion, up 9% year-on-year. This trend confirms the momentum of VINCI's businesses, both in France and abroad. I will give you more granularity later in my presentation. In the first nine months of 2023, total revenue amounted to EUR 50.6 billion, up 12% year-on-year, and 10% like-for-like. International revenue made up a new record, 57% of the group total.
International revenue is up 18% and up 15% like-for-like. Changes in scope were boosted mostly by OMA, Mexico, of Cabo Verde, and by the recent acquisition made by VINCI Energies, including [Control ID] and Otera AS in Norway. Exchange rate movement had a slightly negative impact on revenue, because the euro rose against several currencies, of which the sterling and the US dollar. France, 43% of the total revenue, was up 5% in nine months. Point number two, group order intake were well oriented, EUR 47.8 billion in the first nine months, plus 16% year-over-year, of which were robust, plus 13% in Q3 2023 versus Q3 2022. This good momentum is due to strong flow business and several recent large contracts.
In total, the order book of VINCI reached a new all-time high level of more than EUR 63 billion at the end of September. This is +10% year-on-year, representing four months of average activity. International made up 58% of the order book. Such a large order book gives good visibility, serenity, and enables VINCI to remain selective in terms of new business. Point number three, regarding the financial position, the net financial debt of VINCI at the end of September is under control. It amounted to EUR 18.6 billion, down EUR 1.5 billion year-on-year, and almost stable related to the level seen at the end of 2022, despite the acquisition completed during the period and despite the payment of the final dividend in 2022. It means, in other words, that the cash generation was robust in Q3 and year-to-date.
VINCI's liquidity remains substantial, with a managed net cash of EUR 10.6 billion and EUR 8 billion of RCF. As a result, with such a sound financial position, VINCI is well prepared to continue its development. Last but not least, in view of its solid performance year-to-date, the group revised upward its free cash flow guidance for 2023. The free cash flow is now expected to be of at least EUR 4.5 billion. Let's now have a quick and closer look at the main division. VINCI Autoroutes, nine months revenue up 5% to EUR 4.9 billion. In September 2023 versus September 2022, traffic was up 2.2%, including a 3% increase for light vehicles, lowered by exceptional summer-like weather condition in France in September. As a result, Q3 2023 traffic reached a high level, stable versus Q3 2022.
Overall, in the first nine months, traffic is up 1.3%, of which cars, plus 1.7%, despite high fuel prices. Truck traffic was slightly down, partly because of negative calendar effect, with two fewer working days year-to-date compared to last year. VINCI Airports, nine months revenue of EUR 3 billion, plus 49% on like-for-basis and plus 27% like-for-like. You have already seen the traffic figures produced two weeks ago. They confirm the continued strong recovery in air traffic in Q3. Many airports achieved record passengers number, in Portugal, Serbia, Mexico, and the Dominican Republic. In Japan, pax numbers continue to show a firm recovery on international routes. Overall, passenger numbers in nine months 2023 equals 93% of the level seen in nine months 2019, before the sanitary crisis, of which 97% in Q3 and 99% in September.
VINCI Energies, nine months revenue of EUR 13.9 billion, more than what was generated on the full year 2019. That reminded nine months revenue was up 17% and 12% like-for-like. As a wrap up for you to take away, after a very obvious page one, VINCI Energies continued to deliver stronger organic growth in Q3, +15% that is Q3 2022. International growth even accelerated relative to the Q2, both on an actual basis and like-for-like. Order intake of VINCI Energies also remains very strong, hitting a new record on a rolling twelve-month basis of more than EUR 20 billion. In the first nine months, order intake of VINCI Energies were up 19%, of which +17% in Q3.
VINCI Energies, as a group, amounted to EUR 14.7 billion, +16% year-on-year, representing more than nine months of average activity. This outstanding overall performance reflects the very solid position of VINCI Energies' company, perfectly suited to the energy and digital transition mega trend, both in France and abroad. Finally, please note that VINCI Energies remains active on the M&A front, having completed 25 acquisitions in the first nine months of 2023, representing a cumulative annual revenue of around EUR 350 million. Cobra IS, nine months revenue of EUR 4.7 billion, up 14%, with 46% coming from Spain and 32% from Latin America. In Spain, revenue was up 16%. Outside Spain, revenue was up 13%.
As a wrap up, please note that Cobra IS increased its revenue sharply in the Q3, with growth of 13%, beating its Q2 growth figure of 9%. This momentum is being driven by strong performance in most of its geographies, both in core business and in EPC projects. Order intake for Cobra IS in nine months rose 31% year-on-year, running at record levels, due in particular to large contracts related to energy transition. In particular, the first of the three offshore wind energy converter platforms of TenneT, the contract which had been announced in April 2023. So the first platform is now under way. Order book amounted to EUR 14.9 billion, +33% year-on-year, representing a record two years and a half of average activity.
About renewable energy production, in addition to the 0.6 gigawatts Belmonte solar farm in Brazil, which started generating electricity in May-July this year, work began in Q3 on a new solar project in Brazil and Spain, with total capacity of 0.6 and 0.2 gigawatts respectively. Thus, at year-to-date level, the capacity in operation or under construction in Cobra IS portfolio totals 1.4 gigawatts. Finally, remember that we will organize a CMD dedicated to Cobra IS next first December in Madrid. You are more than welcome. VINCI Construction, nine months revenue of EUR 23.4 billion, up 9% and 10% like-for-like. In a nutshell, VINCI Construction business developed very well, driven by civil engineering and building works activity.
Growth remains very strong in the Q3 outside France, with international revenue at 12% like-for-like compared to Q3 2022, while in France, the revenue stabilized at a high level. VINCI Construction also achieved a high level of new orders, +10% in nine months 2023, due to good performance in public works across its main geographical strongholds, along with several recent large contracts, such as the section of Line 15 West of the Grand Paris Express, alongside VINCI Energies. VINCI Construction order book ended the quarter stable year-on-year at a high level of almost EUR 24 billion, representing 30 months of average activity. VINCI Immobilier, probably the only snag of VINCI, even if figures are small for the VINCI Group. VINCI Immobilier nine months revenue amounted to EUR 836 million, down 24%.
As already mentioned previously, the significant decline in VINCI Immobilier revenue and number of units in France, -46% in 9 months, are the result of very difficult conditions in the French property development sector, which is suffering in particular from high interest rates. In conclusion, the group confirms that for 2023, it expects a further increase as to more than in 2022 in revenue and operating income. Expect as well, a net income slightly higher than the level achieved in 2022, despite a substantial increase in financial costs. The outlook for the free cash flow, as I told you in introduction, has been revised as well, it should now be of at least EUR 4.5 billion in 2023. In addition, forecast for concession traffic has been updated.
VINCI Autoroutes now expects traffic levels in 2023 to be slightly higher than in 2022. VINCI Airports is forecasting a further recovery in passenger numbers, which should be close in the Q4 2023 to the level seen in Q4 2019. We would like to thank you for your attention, and we are now ready to take your questions.
Thank you. This is the conference operator. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Jean-Christophe Lefèvre-Moulenq with CIC. Please go ahead.
Hello? Hello.
Hello.
Hello. Good evening, everyone. I have only two questions. The first one, could we have flavor on the motorway traffic in October first? And secondly, if we have a closer look on VINCI Construction, we have a stabilization of the order book. Is that due to France or to foreign subsidiaries? Order intake is up by 10%. Is that means that we could have, let's say, a good good year 2024 in the contracting, VINCI Construction?
Excuse me. I was speaking, but I was going to. So for the traffic in October, no flavor yet because we will publish the monthly traffic. I think mid-November, fifteenth of November.
Okay.
Fourteenth of November. So we will have the traffic for from VINCI on the route and for VINCI Airports for the months of October.
Okay.
Regarding construction, as I said in introduction, the order intake has been well, actually, you saw for order intake an acceleration in Q3. The order intake were flat in Q2 for VINCI Construction, that is Q2 2022, and now they are strongly up in Q3 2023. That is Q3 and 2022, and that's true in France, and that's notably true to the big project of Line 15 West. On the other hand, the profit net remains very solid, so it's pretty, reassuring. We don't see any sign of deceleration. That said, it's too early to give you some more color regarding the activity of 2024.
Okay.
The next question is from Luis Prieto with Kepler. Please go ahead.
Good evening. Thanks for taking my questions. Greg, I would like to ask if you could provide us with an idea of the potential working capital performance for the year in the context of your updated cash flow guidance. The second one, more philosophical, has the regulation change in Mexican airports altered the way or in any way the company's approach to project selection in emerging markets and in general? Thank you.
I will, yes, probably one of the moving parts of the free cash flow is the working cash. The working cash change at the end of September, of course, is still negative, which is totally normal at this stage of the year, but less negative than at the end of June, which is pretty normal as well. The situation is better compared to the situation last year at the same period, and probably a bit better than what we could have expected. It means we are a bit in advance compared to our budget, so it's one of the reasons why we decided to be a bit more precise and direct on free cash flow. I hope it answers your question.
Second question, yes, the news flow in Mexico since two or three weeks, because you perfectly know we had a multi-government assigned to amend one of the attendees of the competition contract of the three private airport operator in this country, in order to specify and to redefine, let's say, the applicable regulation. Since then, a constructive dialog really took place since two weeks with them to discuss the desired amendment, and that clarified certain points. At the end of the day, let's say I can, I would say that these amendments do not significantly change the regulation for OMA. OMA is deciding not to challenge this amendment. I cannot go more specifically, let's say, into detail, because OMA will publish next week, next Monday.
OMA is a listed company, both on the Mexican regulation and on the U.S. one. So let's say I prefer to let the lead today in terms of regulation, stock exchange regulation, this time.
But you did, you said that they're not gonna challenge the final form of the amendment, given that there's been more constructive dialogue. Is that what I, did I understand correctly?
Yes, yes, we are not, we don't intend to challenge that. You know, OMA, we are very happy with this investment. To be frank, traffic has been stellar since OMA joined VINCI Airports at the end of 2022. Traffic was much higher than expected. The outlook is very well oriented in Mexico. So all in all, let's say we are pretty, let's say, satisfied with the current situation.
Very clear. Thank you.
It's, it's true that the stock exchange reaction two or three weeks ago was pretty, scary for some of you, but was probably a bit, excessive.
Overdone.
In an excessive and sensitive market currently.
Okay, understood. Thank you.
The next question is from Elodie Rall with J.P. Morgan. Please go ahead.
Yes, good evening. Thanks, Greg. Maybe just one question on the French tax, if you could give us a recap of where we are, the impact expected, the next steps, et cetera. Thank you.
Hello, hello. I'm not going more or less to repeat what we wrote at the end of September, and you remember, we did a press release to explain that, VINCI is contesting this plan, which go against both the letter and the spirit of the concession contract, and particularly of the contract signed between the French state as the grantors and the motorway concession company. These contracts, and you know that by heart, include tax neutrality clauses, and so we intend to use all the available avenues of appeal. You remember well that the opinion of the Conseil d'État, which was not made public until this summer, showed that the government has to apply such a neutrality, probably narrower and much more complicated than the government and press has been suggesting for the government.
That said, higher taxes inevitably mean higher tolls, as provided by Article 32 of the contract. Taxes already make up 40% of toll at best nine, and increasing again the proportion will not only mean that the French state, as concession grantor, would be breaking its word, but would also make a consequence no sense at a time when urgent investments are required to decarbonize road transport, which accounts more or less for 90% of the total flow in our country, of passengers and freight. I cannot say more than that. It's currently being discussed at the Senate, we will know more by year end. We are committed, we will defend our contracts. That's our only asset for motorway.
Okay, thanks.
The next question is from Sathish Sivakumar with Citigroup. Please go ahead.
Hello. Thanks for taking my question. I just have a couple of questions. First, I wanted some clarity on the reason for increasing guidance for Free Cash Flow. Is it due to better working capital or lower CapEx? The second thing I wanted to check, what is driving the growth in international revenues? Which are the regions where you are expecting higher growth? Thank you.
Hello, Ashish. We, I will answer to, to me, regarding the free cash flow. It's CapEx, we increase CapEx with our airports, our renewable energy development. So one of the driver of the free cash flow, one of the moving parts, is working cap. And working cap is probably a bit better at this stage than what we expected. Okay, going forward, international is very dynamic, very dynamic for the airport, very dynamic for VINCI Energy. For VINCI Energy, most of the VINCI Energy is present in, between 50 and 60 countries, and in most of their geographies, the activity is very strong. That's true in Germany, that's true in, in... So for VINCI Construction, activity is well oriented as well.
In the nine main countries of VINCI Energies, we will still be well oriented, and with the ongoing large projects, like I speak to in the U.K., like the [same internet] between Denmark and Germany, like some motorway projects in Australia, some railway projects in New Zealand, some motorway and railway projects in North America. All in all, the activity is good and the outlook is good. Cobra, otherwise, of course, is based on Latin America, and then pay more than 16%. All in all, we don't see any, let's say, material sign of slowdown.
Great, thanks.
The next question is from Marten Votteler with Bank of America. Please go ahead.
Yes, thank you so much. A couple of questions. Firstly, could you confirm that you expect your tariff increase on the French motorways for 2024 to be in line with the usual formula of 70% of inflation? Is there perhaps any discussion right now between you and the brand around this topic? Number two, could you comment on your order backlog trends? Obviously, the backlog has been growing, but if I look at the divisional split, at least in the last two quarters, all of the growth is driven by Cobra IS, and backlog is actually flattish in the last two quarters in VINCI Energies and Construction. What is actually driving that?
Would you say there is maybe some sort of flatlining of demand in those two important segments?
Hello, Martin. Regarding the total increase for February 2024, it's contractual. So I don't know what will be the level of inflation at the end of October. It will be calculated soon. We will put that in the formula of the contract, and there is no reason to say we could not increase the toll by 70%, 70, of the inflation at the end of October. Second point, and I don't see exactly what you refer to, because this slide, if I look at the order intake, VINCI Energies is up in 9 months, 16%, okay? Of which 17% in Q3. So there, there is no deterioration, which remains quite a very healthy growth. And so at the end of September, order intake is up 16%.
For VINCI Construction, order intake is up 10% in nine months, of which 17% of revenue is Q3. So order book is flat, but because at the same time, the level of activity was very strong, notably international. Cobra IS order book reach a record high level, it has been boosted notably by several very large projects, even if the business were well oriented. So order book of Cobra IS is up 33%, and nine months order intake of Cobra IS are up 31%. So I, for me, there is no, let's say, deterioration.
Very good. Thank you.
The next question is from Graham Hunt with Jefferies. Please go ahead.
Good evening, and thank you for letting me take the questions. Just two from me. Firstly, maybe could you give us a little bit of color across your airport portfolio, what you're expecting in terms of pricing across the main platforms, next year? And then second question on Cobra, how should we think about margins, for this year and, I suppose, going forward, particularly with such strong growth and with the converter platforms coming in, which I think have quite attractive margin profiles alone? Just something around that would be helpful. Thanks.
Hello, Graham. So first, Cobra IS, margin. In general, for this kind of revenue call, we don't speak of profitability and margin. So maybe, you should keep the question for next month and a half for the CMD of the Cobra. Okay, so that's the answer. Other thing, regarding the airports, we don't at this stage of the year, we did some proposals to the grantors, depending on the country, depending on the regulation, et cetera, we cannot really comment. Just have in mind that out of our airports, our portfolio, I mean, we are looking now to have almost 90% of the aeronautical revenue, which are, let's say, indexed directly to CPI. Can be sometimes the European CPI, sometimes the local CPI, et cetera. But so all in all, let's say, at the-...
The tariff guarantee increase from next year should mirror the CPI. In Portugal, that's currently in discussion for ANA, with the European CPI of almost 10%. For Gatwick, you remember the CCF, the contract and commitment framework authorized the airports to increase the aerodrome surface by RPI. So RPI is currently in the U.K. more than 10%. So that's it. You know, that's again, airport autoroutes, and VINCI in general, the good vehicle to fight inflation.
Thanks. Thanks very much.
The next question is from Luis Prieto with Kepler. Please go ahead.
Yeah. Hi again. I had a follow-up question. Just out of curiosity, has there been any progress in the strategic review of Polo Carmópolis, that I understand was expected to take place this year?
It's, it's ongoing, Luis. But say, you should ask during the CMD, of course, that's the strategic review is ongoing.
Excellent. Thank you.
The next question is from Gregor Kuglitsch with UBS. Please go ahead.
Hi, good evening. Couple of questions, please. So I read, I think it was a few days ago, that you were selected preferred bidder, I believe, for an airport in Poland. If you care to comment what the quantum of that is, I think there was a number mentioned in, in at least from the grantor side. So you just tell us what the economics are there. And then maybe broadly, I mean, it seems like you're involved in quite a lot of bids. Seeing something potentially in Australia, I think maybe in Hungary. There was also, I think, a press article on a sort of renewables business in Spain.
Can you just give us a sense, like, what, what's going on and whether these are sort of all true, or like maybe it's just a comment on pipeline on things that, that you're, that you're looking at? Maybe then a question on the actual revenue. So you did 11% organic growth in energies, which I thought was quite strong against the kind of harder comp. Is there any reason why that slows in the short term, or, or does it just sort of ever get harder given the, the comparison basis? So those are two—my two questions. Thank you.
Hello, Greg. So true that the flow in terms of M&A is not so thin. That said, as a general rule, you know, we never provide information on this kind of bidding procedure or this kind of noise. So I will not. I'm sorry, it will be a little frustrating for you, I guess. Regarding Poland, specifically, it's even more difficult to comment since the government has changed last weekend. So I prefer not to tell anything about that, because we don't comment in terms of information, especially not in a kind of political change like that.
Makes sense. On energies?
Yes, yes, sorry, because I forgot your second question. I would say that, in fact, we have seen the only limiting factor will be probably the availability of human resources. But thanks to the organization of VINCI Energies, which is very decentralized, with many companies, you know, 2,000 business units, with our M&A fire power, which finally enabled me to buy as well some [number world]. I would say that, we are well positioned. So can there be any reason to see a slow on energy with, difficult to know, but,
Okay.
Maybe in the process, we know. But again, we are very at the beginning of a very long growth cycle.
Okay. And then maybe, sorry, a final question. You mentioned, I think, on the renewables, that you're at 1.4 GW now. Can't quite remember where that was at the end of half one, but maybe you can remind me, and you're saying 2 gigawatts by the end of the year. So which projects are actually kind of being launched, or which projects you press the go button on?
Yes, we are back on. At the end of July, you remember, we, we opened, we commissioned the Belmonte solar project in Brazil.
Yes.
It's a big milestone for us because of being gas saver, renewable, asset producer of them. So 0.6 gigawatts for Belmonte. That's in operation. In the last month, the last two months, work started on another 0.6 gigawatts of solar project in Brazil.
Okay.
It pushes us, our capacity, to 1.2. Plus, work started again in Spain on a certain number of projects, cumulating 0.2 GW. We have 0.6 at Belmonte, plus, let's say, in construction 0.6 in Brazil, plus in construction 0.2 in Spain. In total, at the end of this calendar, our portfolio is made up of a capacity of 1.4 GW. You're right, by year-end, we aim at reaching 2 GW of assets in operation or under construction.
Okay. Thank you.
The next question is from Sathish Sivakumar with Citigroup. Please go ahead.
Yeah, thanks again. This is Sathish Sivakumar from Citi. I got two questions here, both in the airport space. Firstly, on Portugal, where we are actually in terms of expansion of the airport, given the capacity limitation, and also what does it mean for you in terms of TAP being, like, being divested or privatized? So what is—what are the in, in terms of expansion as such, how does the capacity allocation will come through? And then the second is actually across your portfolio, can you give any color on what are you seeing in terms of retail spend at the airports? Are you still seeing, like, steady increase, or are you starting to see some normalization there? Thank you.
Hello again. Regarding retail for airports, we are not seeing a big change in the consumption habits of our passengers. Retail revenue per pack, in fact, is up, is up, and especially if we include Japan, you know, where the Chinese passenger numbers are not yet significant. They are not yet coming back in Japan. If we exclude Japan from this analysis, the spend per pack is up and higher than in 2019. That's due to inflation, that the retail outlets have been able to pass through the environment. That's true as well to our initiative, like we, you know, we open some new stores, we reorganize the stores, we make the stores more dense, we do a good job as well, you know, on average sales business.
And that's particularly true in, in Lisbon and Madrid. And this, so regarding Lisbon, no big news at this stage, and no big news we, we are waiting, you know, for the strategic environmental assessment, which is, ongoing since, it's been more than two years now. So we expect the strategic environmental assessment to be released in H1 2024. And then we'll be very happy to see, let's say, a final decision to develop this, to develop a new airport capacity in, in Lisbon. Because you're totally right, the Lisbon airport is, already, congested. So for the country, for Portugal, in order to be able to keep on absorbing flows of tourists, it would be good to, to go ahead soon.
We are ready, anyway, to keep on playing our role, shoulder to shoulder with the Portuguese government for this country.
Okay, so thank you. Just a quick follow-up, actually. So you said, outside of Japan, the rest of the airports are still seeing, good retail spend per pack momentum, yeah? And the Japan is still lack of Chinese tourists coming back is what, holding it, yeah?
Yes, the retail momentum is satisfactory, I would say, especially if we exclude the figures of Japan, where there is a distortion, you know, because when you have a lot of Chinese, it boosts, it's a... How do you say? A tailwind for the, the, the retail performance. So Japan is very exposed to Chinese passengers, or was very exposed before the 2019, yeah, in 2019, before the Covid crisis. So what I say is that excluding Japan, which can clearly improve, there is room to improve, and it will be down mechanically when the Chinese will come back. But excluding Japan, clearly, our retail revenue per pack is well oriented.
Okay, got it. Yes, thank you.
The next question is from Nicolas Mora with Morgan Stanley. Please go ahead.
Yes, good evening, Grégoire. Just a quick one on the order intake. Can you help us understand a bit what was included in the third quarter, especially for Cobra? Because there's a fair amount of very large orders which can easily swing the order intake for the quarter. So for example, did you include any share of the EUR 7 billion contract you have with Siemens Energy on the converter stations you won in April? And then bigger picture, I know you don't wanna comment on M&A, but yeah, I'm gonna give it a try. You're...
Are you seeing a genuine pickup, especially in airports opportunities, following a pretty long crossing of the desert, with not much, or is this just newspaper news flow? Thank you.
Yeah, it is, but I thought you have a strange notion of these deals, because, you know, we did OMA in Mexico, we bought seven airports in Amazonia, the Cabo Verde airport. So finally, you know, we did quite a lot in the last year. But yes, there is a deal flow. Clearly, there is a deal flow, and our M&A team is very busy. I cannot comment what I said to Gregor, but I cannot comment more than that. But, you know, there is quite a deal flow, and again, we are opportunity. We are, we are more capital discipline, so we don't do... But we are looking at a lot, a lot, a lot of things. It doesn't mean that at the end of the day, we do it. That's capital discipline.
Regarding order intake, so for Cobra's, we did a statement, so we explained that in a statement, but then maybe normal, we didn't see that in the right now. For the Siemens operation, you know, for the three electrical offshore converter, we included the first one, one of the three, okay? So for Cobra's share, it's a bit more than EUR 1 billion of order intake. Because you said you got it right, like the total deal was EUR 7 billion, roughly 50% for Cobra's, 50% for Siemens Energy. So it means roughly EUR 3.5 billion. So we entered in the order book one-third of these EUR 3.5 billion. Clear?
Perfect. Thank you. And just last one-
And for VINCI Construction, for VINCI Construction as well, Nicola, we explained in the... What has been entered in the backlog of VINCI Construction in Q3. So we have the first section in our Line 15 West and Grand Paris. The part for VINCI Construction, for VINCI Energies as well. We have done as well the LNG storage plant in the Netherlands, the deal we announced a few weeks ago. We entered as well, you know, the interconnect, electrical interconnection between France and Spain, same for VINCI Construction and VINCI Energies. And we entered as well the northern bypass of Prešov for VINCI Construction.
Perfect. And last one, if I may, just on VINCI Energies, because we were all looking at, you know, tougher comps. It played out in Q2, didn't play out in Q3, despite some fears of cyclical slowdown. The order intake is still pretty solid. There is, you've talked about the only limit being staff availability, but there is still no sign of, you know, client exhaustion, especially on short cycle orders and industrial orders?
No. No, in reality, I am—I know it can be surprising, but as you recall, we were expecting that, you know, these financial markets could have expected that in Q2, it was not the case. In Q3, it's clearly not the case. So now, again, at this stage, we don't see... Okay, in France, the pace of growth is lower than what it was on the very Q1, which was absolutely stellar. But in France, our revenue in Q3 was up 8%, or a bit more than 8%, so it remains very, very, very dynamic. In international, and as I told you, there was even an acceleration in the revenue pace of growth in Q3 compared to Q2. So now we don't see a material sign of slowdown, neither in the very short cycle project, neither in the industrial segment.
Again, the energy transition, the digital transition behind that are a clear support of the business. Will it stay like that, exactly like that for the next quarter? Who knows. But what we think is that it's only the beginning of a very powerful growth story. It's only the beginning.
Thank you, Greg.
Welcome.
The next question is from Tobias Woerner with Stifel. Please go ahead.
Yes, good evening, Greg. Thanks for taking my question. Two questions, and both related to France, really, and slightly more sort of around sentiment. Number one, when you look into 2024, and I don't expect you to give me any guidance on 2024, but you've got a big event coming up in France. Your orders are looking up at the moment, also, when you look at the FNTP. But do you expect that the end of that event to mark a big difference in context of infrastructure-related work, or is this much broader than the Olympics? The second question relates to, you know, your very small VINCI Immobilier business.
I'd just like to get a sense of whether there have been any sort of signs of light at the end of the tunnel at all, or whether this is pretty still, you know, there's complete lack of visibility at this point in time. Thank you.
You know, so we have so regarding Olympics in 2024, but the, the activity and for growth, for example, will still be, well oriented ahead of these events. But again, I'm not sure it has a very clear impact on the total revenue of VINCI Construction and our work there in France. You know, the Olympics, you are in Paris region, a bit in Marseille, but, but, so, so, so I don't imagine and say, "Oh, okay, there is an effect after the Olympics, finally." We are not particularly worried. And you know, once the Olympics will be behind us, step by step, we will enter the positive, electoral cycle. We will enter the positive side of the electoral cycle ahead of the next municipal election taking place in 2025.
We don't see yet any effect on that, but maybe by year-end 2024, early 2025, we should have this positive effect. Regarding VINCI Immobilier, light at the end of the tunnel, it's difficult to know. Clearly, the situation is very, very difficult because high interest rates, so it means that it mechanically reduce the affordability for individual buyers. The current macroeconomic momentum make institutional investors a bit, resistant and hesitant, and it's difficult to borrow money, and the inflation has eroded the purchasing power of people. The local authorities remain resistant to grant new, building authorization. So overall, let's say, the planets are not very, aligned.
So we do something in the meantime, but the crisis could last probably, unless the government finally recognize the extreme severity of the current crisis and adopt some measures, can be housing stimulus plan, it can be some, fiscal measures, let's say, to, to help the sector. Because this is now a housing crisis, and tomorrow it will be a social crisis.
Mm-hmm. Fair point, actually, which leads me on to a follow-up question. I mean, in the UK, the opposition party, Labour, talks about building a significant amount of public housing or social housing. In Germany, the income threshold was just raised for the effectively 0% mortgage rates. Do you see something similar happening in France?
Actually, there was a new initiative which has been adopted by the French government last week. It's a bit technical, but it was to increase what we call the zero loan, the zero, zero coupon loan. And, as far as I know, it's the only, let's say, measure which has been taken so far by the French government, and probably it's far from being enough.
Mm-hmm. Understood. And just... Sorry, I didn't hear it acoustically earlier. I'm not French, so I, I don't know. When are the municipal elections? Early 2025?
2020... No, it's spring 2026.
Spring 26. Okay, thank you.
Yes.
Thank you.
The next question is from Sonia Baldeira with Bloomberg Intelligence. Please go ahead.
Hello, good evening. Thank you, Greg, for getting my question. It's very simple. I would like, please, just to have a sense, how is the execution of the wind energy projects that you have? Mostly, I'm worried with offshore wind in terms of bottlenecks, if you see something happen, or if you just see the projects going on a normal basis, and with no implications on margins in the future.
You know, we are not in the best position to answer this offshore question because with Cobra, yes, we developed some renewable energy project indeed, but it's mainly some solar projects.
Mm-hmm.
The 1.1 GW I mentioned, it's only from solar. We do onshore wind project, but not offshore.
All right. So, thank you. Thank you for answering that. So, but in terms of your wind projects, do you see any kind of trouble or bottlenecks that could affect? I mean, this is just on the back of what just happened today in market with Siemens. And so just, everyone is worried about right now with execution of wind projects, so I just wonder if you could have a word on how things go on your side.
No, no, you cannot do any negative read-across regarding us and our different businesses compared to what some of the groups announced.
Mm-hmm. Okay. Okay, thank you. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Mr. Thibault, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.
Oh, thank you very much. Good luck for this, again and again, intense period of publication. We are here with Boris and Marie to follow us, and we hope to see most of you in Madrid on 12 December for the CMD. Have a nice evening, all. Bye-bye.
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