Welcome to the VINCI's Q1 2022 revenue conference call. I will now hand over to Mr. Grégoire Thibault, Head of Investor Relations of VINCI. Sir, please go ahead.
Thank you, Laurent. Good evening, and thanks everybody for attending this conf call. I'm today with my colleagues of the Investor Relations team, Boris Vallée, and Walid Louhni, Amelia Falk, Head of Corporate Controlling and Accounting, and Christophe Ferrer, Head of Group Cash Management and Financing. As usual, I will try to be brief to have more time for the Q&A. What are the key takeaways of this publication? Firstly, a good start to the year of all our businesses. In a nutshell, for VINCI Autoroutes, the traffic was much higher than last year and higher than in Q1 2019. For VINCI Airports, passenger numbers continue to recover progressively benefiting from the reopening trend in many countries, especially in the Americas and in Europe, notably on our two main assets, Portugal and London Gatwick. For VINCI Construction, the momentum was good.
For VINCI Energies, business levels on order intake were buoyant. Finally, have in mind that Cobra IS is consolidated since the first of January 2022. I will give you more granularity by division later in my presentation. All in all, total revenue was EUR 12.8 billion, up 26% year-on-year and up 12% like for like. International, which now accounts for more than half of the total, was up 51% and up 19% like for like. Changes in scope were boosted mostly by the integration of Cobra IS. Exchange rate movements had a positive impact of 3% as several currencies, particularly the US dollar and the sterling, rose against the euro. France, accounting for 49% of the total revenue, was up 7%.
Regarding the order intake, order intake at VINCI Energies and VINCI Construction in Q1 2022 were EUR 11.4 billion, almost unchanged year-on-year despite the high base of comparison. Keep in mind that last year at the same time, VINCI Construction won large project, and notably the Fehmarn Tunnel between Denmark and Germany for around EUR 1 billion. Order intake at Cobra total EUR 1.1 billion this quarter. The order book amounted to EUR 55 billion at the end of March. This represents a year-on-year increase of 20% and 2% excluding Cobra, and it represents 14 months of average activity.
This all-time high order book gives us good visibility and a lot of serenity, allowing us to continue being selective in terms of business at a time when markets are affected by the war in Ukraine, which results in cost inflation and supply shortage. Among this order book, note that the international part is 68%. In terms of financial position, the net financial debt of VINCI at the end of March amounted to EUR 20.7 billion. The limited increase of EUR 1.4 billion since year-end 2021 reflects the seasonal increase in the working capital requirement, as well as our share buyback program for around EUR 600 million, and the acquisition carried out during this quarter.
VINCI's liquidity remains substantial at EUR 16.5 billion at the end of March, of which a managed net cash of EUR 7 billion, a large part of it being centrally managed. As a result, with such financial position, VINCI is well prepared to continue dealing with the unexpected and continue its development. Also, have in mind that S&P confirmed in March its confidence in the group's credit quality by affirming its A- rating with stable outlook. Let's now have a closer look at the main divisions. VINCI Autoroutes. Q1 revenue of EUR 1.3 billion, up 15% year-on-year and up 9% versus Q1 2019. In the Q1 2022, the traffic continued to rise, up 15% year-on-year.
Compared with Q1 2019, light vehicle traffic was up 1.5% and heavy vehicle traffic was up 6.7%, thanks to firm economic activity in France and growth in e-commerce. The slight decline in light vehicle traffic in March was mainly due to the different timing of school winter holidays between 2019, when these holidays were spread over February and March. In 2022, when holidays were mainly concentrated in February. VINCI Airports revenue of EUR 405 million, 2.6 times the revenue of Q1 2021. You have already seen the encouraging traffic figures published last week. VINCI Airports passenger numbers in Q1 2022 were 3 times the numbers seen in Q1 2021 and were 46% below the level of Q1 2019. The gradual return to pre-pandemic levels is on track.
The picture gets brighter, even if trends vary between geographic areas. In the Americas, in the U.S., Dominican Republic, Brazil, Chile, Costa Rica, we see a good momentum. The good trend continues, with passenger numbers close to or higher than 2019 levels. I'd like to remind you that the 7 airports in Brazil's north region that have recently joined our network started their operation in January and February this year. In addition, speaking about Americas, I seize this opportunity to tell you that the new international terminal of the Santiago Airport has been inaugurated a few weeks ago. That's a key infrastructure for Chile, and it will double the airport's capacity to 38 million passengers per year. Let's go back in Europe. The easing of COVID restrictions led to remarkable improvements in Portugal, in France, and in Serbia, notably.
In the U.K., the loosening of restrictions on international travel in early February led to a marked rebound in passenger numbers at London Gatwick Airport. As a consequence, Gatwick South Terminal reopened on the 27th of March after being closed for almost two years because of the pandemic. That's a very positive signal. However, airports in Asia continue to suffer from border closures and ongoing restrictions, particularly in China. We saw anyway a slightly better trend in domestic traffic in Japan. Let's move to VINCI Energies now. As a wrap-up, VINCI Energies, this division, started 2022 on a positive note, both in France and abroad.
Although the base for comparison was high and despite procurement issues, which had already been experienced in late 2021, business levels were supported by buoyant markets, driven by the energy transition and the increasing deployment of digital technologies, and broadly speaking, a good momentum in flow business for VINCI Energies. More in detail, Q1 revenue was EUR 3.6 billion, up 7% and up 5% like for like versus Q1 2021. Outside France, 53% of the total, revenue was up 9% and 5% like for like. In France, revenue was up 4%. Order intake for VINCI Energies was also strong in the first three months of the year, up 10% year-on-year. This growth was homogeneous between France, at +10%, and international, +10%.
It's worth highlighting that over the rolling twelve months at the end of March, order intake of VINCI Energies amounted to a record high of EUR 16.5 billion. Order book is EUR 12.2 billion at the end of March, up 13% year on year and representing 10 months of VINCI Energies' average business activity. Finally, please note that VINCI Energies remains active on the M&A front, having completed 7 bolt-on acquisitions in Q1 2022, essentially in Europe, representing a cumulative annual revenue of around EUR 70 million. Cobra IS, revenue of EUR 1.2 billion, with 46% coming from Spain and 36% coming from Latin America. It was driven by good momentum in flow business, particularly in Spain, Peru, and Mexico, and by EPC projects relating notably to power transmission lines in Brazil.
Note that around 10% of revenue this quarter is linked to renewable energy projects. Order book of Cobra at the end of March is EUR 8.4 billion, a high level that represents more than 18 months of business activity. VINCI Construction. The division achieved a substantial increase in revenue at EUR 6 billion, up 14% and up 11% like for like. Outside France, that's 51% of the total revenue, growth was outstanding, +26% and +20% like for like. This growth was boosted by the ramp-up of several large contracts, including the two work packages on the HS2 in the U.K., but as well motorway and rail projects in Canada, Australia, New Zealand, and some preparatory works on the Fehmarn tunnel between Denmark and Germany. In France, where we saw good momentum in road works, revenue was up 3%.
The 9% decline in order intake year-on-year of VINCI Construction resulted from a high base of comparison that I mentioned earlier. In addition, given current market trends and given the very robust order book, VINCI Construction is maintaining a particularly selective approach to taking on new business. In particular, note that we have recently taken the decision to stop signing contracts taking place over the medium term unless they have price adjustment clauses. No more fixed price contracts over the medium term for VINCI Construction. VINCI Construction order book ended the quarter at EUR 34.3 billion, almost unchanged year-on-year, only down 2%. It represents more than 15 months of average activity. VINCI Immobilier revenue of EUR 337 million, up 5% year-on-year. Production remained robust in both the residential and commercial sector.
The number of homes reserved in France was 1,102 units, down 28% versus Q1 2021. In Q1 2021, remember, there was a sharp post-COVID catch-up. In other words, the comps were quite challenging this quarter. In conclusion, despite a more challenging economic and geopolitical environment, we confirm our previous 2022 guidance. VINCI Autoroutes expects full-year traffic levels to exceed those of 2019. VINCI Airports anticipates that passenger numbers will continue recovering to around 60% of their 2019 level, enabling it to achieve net income close to breakeven. VINCI Energies, which operates in a buoyant market, should be able to continue growing its business while solidifying its operational performance.
Cobra IS, benefiting from firm momentum in its flow business and the ramp up of some EPC project, is expecting revenue of around EUR 5.5 billion and operating margin in line with the industry's best in class. VINCI Construction, thanks to its very large order book, is likely to remain busy and improve its operating margin while taking a selective approach to new business. Overall, we confirm that VINCI expects net income in 2022 to be higher than the 2019 figure. More broadly, and beyond 2022, we remain confident that VINCI will be able to maintain a consistent growth. The group has a number of key strengths since its energy services, construction, and mobility businesses place it at the heart of the green growth. We would like to thank you for your attention, and my colleagues and myself are now ready to take your question.
We have our first question from Jean-Christophe Lefèvre-Moulenq from CIC. Please go ahead.
Good evening. I have a question regarding your optimistic guidance you have just provided, Grégoire. In particular, on Vinci Construction. Vinci Construction posted an EBIT margin, I think of 3.7% last year. Are you able to improve this margin level both in Eurovia and in Vinci Construction? As a whole for Vinci Construction perimeter. Second issue, regarding VINCI Airports. We have a contrasted situation, better in Portugal, still difficult in Cambodia. In Aéroport du Cambodge, were you able, and are you still able to continue to reduce the cost, given the very low level of the traffic? In Lisbon, we have an improvement. Will you restart the CapEx program of the new airport or not? Many thanks.
Hello, Jean-Christophe. Regarding the guidance, you say it's optimistic, but it didn't change. It's exactly the same. We confirm what we already said. For VINCI Construction, as I just told, despite the current environment, and we may come back more in detail about that, we wrote in the guidance that we expect to be able to increase the EBIT margin. To speak in details of the EBIT margin is not exactly the topic of this call. Last year, you're right, in 2021, the EBIT margin of VINCI Construction was 3.7%. When you read the guidance, yes, this margin can be, let's say, increased a bit. We don't, you know, we don't make the split, and we already told you that, between, let's say, the old VINCI Construction and Eurovia.
No, no, because, you know, there is a new organization. Some teams are very let's say, close to each other. We are not, let's say, it doesn't make sense anymore really to break down the old VINCI Construction and Eurovia. Now we only speak in terms of VINCI Construction new look.
New look. Okay. Okay.
For VINCI Airports, Jean-Christophe, I think in your question there were many different questions.
Yeah.
Can you repeat it, please?
Yes. If we go into the details, first, we have a contrasted situation with a good improvement in Portugal and in France and still a difficult situation in Cambodia. In Cambodia, were you able last year and will you be still able in 2022 to reduce the cost of Cambodia Airports? And secondly, regarding ANA. ANA, you have stopped a big CapEx program. But given the improvement of the traffic, will you restart it or not? Merci à toi. Many thanks.
Regarding the cost for Cambodia, we see a very slight, let's say, beginning of improvement. Of course, it remains very, very low, and it's particularly affected by the fact that China has very strict rules in terms of restriction. There is a direct impact on Cambodia. That being said, the costs have been reduced as much as we could, and you know that VINCI Airports as a whole was probably the best cost cutter of the market.
Okay.
We did what we could. If traffic, let's say, stays at the very low level, I'm not sure we can further reduce the cost, but on the other hand, they will not increase. For the other airports, you're right to focus at the bright spots because Cambodia is not the brightest one, but you mentioned France, Portugal, so that's right. Since the traffic will increase, of course, and that's good news, the cost will increase.
Yeah. The CapEx
The CapEx for airport, I think you refer to Montijo Airport.
Yeah, Montijo.
Let's say we are, of course, at the disposal of the grantors to make this CapEx, but today the decision is not in our court.
Okay.
Yes, the government and Mr. António Costa has been reelected as prime minister in January in Portugal. Good news is that he had as well a majority at the parliament. This government is determined to resolve the airport capacity faced in Lisbon. Today, there is an environmental assessment process which is ongoing, and the results should be expected maybe in 2023.
Oh, okay.
Within this environmental assessment process, there will be a very detailed analysis of the Montijo option.
Okay.
Clearly, of course, for a country like Portugal, improving air transport accessibility is really key for such a country. Tourism, of course, is one of the main economic resources. It will advance, but today it's not, let's say, us to push the button, but we are always, like everywhere, helpful and at the disposal of the public authorities.
Okay. I have a follow-up question that, I think it is an important subject, Grégoire, on the works in progress for a public authority in France and more generally in Europe. As you maybe saw, the French Prime Minister has just issued a circular on exceptional circumstances, théorie de l'imprévision. Is this decree now applicable, and are you now able to have you the right to be fairly compensated for the extra raw material cost for the works in progress or not? I think the things are not fully clear for this new decree.
It's not a decree. It's a-
Circular
circular.
Circular. Yes.
What we call a Prime Minister circular. It has been issued on 30 March. Maybe for the people who may not be so familiar with this subject, this circular relates to the performance of public procurement contract.
Okay.
It's something very positive in the current environment of rising prices. In fact, it will make this negotiation, let's say, easier with the public clients. It's a bit like in the same spirit than what has been issued, you remember, in April or May 2020. It should have a positive influence on the public clients. It goes in the right direction, so we can only, let's say, welcome such a circular with the application of the doctrine of unforeseeability, as you say, that's very important. Maybe ultimately, such a circular can also have an influence on the private sector first of all.
Okay.
That, that's very positive. As far as I know, it's in place.
Excellent. No, no, it's an excellent view. [Foreign language: Merci à toi.] Many thanks.
We have another question from Luis Prieto from Kepler. Please go ahead.
Good evening, Greg and team. Thanks for answering my questions. I had a couple of very quick ones. The first one, would it be possible to isolate or quantify any potential Q1 impacts of fuel prices on light vehicle traffic? Any indication in the same direction, any indication you could provide on how April is performing in terms of this hypothetical impact, if any, at the moment? The second question, in light of Q1 performance and your selective order intake approach, which you highlighted again just a moment ago, can we rule out the possibility of cost inflation and/or potential supply chain disruption translating into hypothetical contracting execution slowdown in coming months? Thank you.
Yes, I mentioned that there was an underperformance of traffic on VINCI Autoroutes in March 2022. The traffic in March 2022 was down 2% versus March 2019. There are three reasons for that. First one is what I told, a negative calendar effect. That's what we explained when we released the traffic in February, which was very strong. We said, "Okay, February had a positive count. March will be the reverse effect, will be the opposite." The winter school holidays in 2022 took place, let's say, mainly in February. In 2019, it was spread over February and March. High counts. Second explanation is that it has importance, some very bad weather condition in March in France.
For those living in France, you know that we were under the rain all day long during a long part of the month. In such a weather, it doesn't make you feel like going and traveling too much. Finally, because it's, I know it's your. I read between the lines. We cannot rule out that there was a negative impact of the violent increase of the oil price because of the war in Ukraine. You know that on a qualitative point of view, and that's what we observed in the past, is that when there is such a violent and sudden rise in fuel prices, it may temporarily slow growth in light vehicle traffic. It's a kind of, let's say, short-term psychological shock for the drivers. What we observed as well is that there is quite a quick normalization thereafter.
I mean, people adapt to the new level of price. They take this new level of price into account in their personal budget because the need for traveling is so important. It's a human burning desire to travel. As soon as petrol price, in addition, when petrol price decrease, let's say the pent-up demand materialize and demand is back. Good news is that since the beginning of April, compared to the peak of the oil price in France at the end of March, the oil price decreased a bit. You will see the April traffic figures mid-May.
Okay. We have another question from
No, sorry, Laurent.
Sorry.
Yeah, I think I missed one question of Luis.
Oh, okay. No problem.
In the current situation, there may be some delays, yes, because of a shortage. There may be some revenue postponed from one year to another. There may be some wait and see attitude from the clients, waiting for, let's say, better price. What I think is that ultimately, we are in a new world in terms of inflation. We are in a new world and the clients, the market will have to relearn how to live with inflation. Finally, probably there will be no other choice. The prices will increase, prices of construction projects will increase, because this price increase of the price of components, of fuel price and so on, that's a risk we, VINCI as a contractor, will not take. Our competitors will do the same.
They will not take such a risk. Ultimately, the prices will go up. Maybe at a certain point, we don't see that today, and today it's very difficult to make some, let's say forecast. The visibility is very low. Ultimately, maybe such a current situation can drive down a bit demand and order intake in volume terms, but not necessarily in value terms. Let's say the lower volumes compared to what is expected can be compensated by higher prices, ultimately more value. Again, at this stage it's very difficult to predict the indirect impact of such a crazy world.
Understood. Thank you very much.
We have another question from Elodie Rall from JPMorgan. Please go ahead.
Hi, Grégoire. I have two questions. The first one is on the order book and the risk in contracting in general. Even you mentioned that 68% of the order book now is generated from outside of France. How do we think about risk between contracts in France and contracts outside of France, given that in France, we know the market is quite consolidated with only like three main players looking really closely at margins and protecting margins? There are higher risk in your view in contract, like coming from outside of France. So that's my first question. My second question is on the high level of construction activity in Q1, so VINCI Construction.
Do you think that some of the supply chain constraints that, I think management spoke about at the end of last year, had anything to do with like renewed, you know, the stronger activity level, basically the pent-up demand that was there? Thanks very much.
For the first question, Elodie, even abroad, that's true that the proportion of international increase and that's in line with our strategy. That's what we build up since many decades, year after year. When we are on international project. You're right. In France, we know this market, of course, very well by nature. This market is very, let's say, thin. Okay, but on international, when we make activity in international, it doesn't mean we just make some kind of export. It means that we are deeply rooted since a very long time, and we are local players. That's the case, for example, I don't know, in the U.S. You know, in the U.S., we are there since several decades. We bought another company at the end of 2018, Lane plants on paving.
We grow by capillarity. Let's say we have a local management. We are in the countries where we feel comfortable. That, that's something to monitor closely. That's exactly why there are, for example, some states in the U.S. where we would not go because we would be as, let's say, a foreigner, as a stranger. There are some countries where we don't go for many reasons because we don't understand the business behavior, let's say the economic and political system and so on. Our presence abroad is really, let's say, deeply rooted. It's not suddenly we go in a country, and we will make more than 50 percent outside. No, that's countries where we are since many years. Does it answer your question?
Yeah. Okay. Thanks.
The second question. No, the very good trend, the very good momentum we printed for VINCI Construction is mainly due, by the way, outside France on large projects, on the large projects we won. You know, I speak of in the U.K., some motorways and railway projects in Australia and New Zealand and motorways project in Canada. That's really the ramp up, the build-up of these large projects, which explains such a performance. It's not so much, some revenue which would have been postponed from 2021 - 2022. By the way, what we said at the end of 2021 is that regarding this revenue postponement, because of shortage, it was more for VINCI Energies rather than VINCI Construction.
Okay. Thank you.
We have another question from Nabil Ahmed from Barclays. Go ahead.
Yeah, good evening, everyone. Thanks for taking my questions. I had four actually, if you don't mind. So I may be asking them one by one. The first one, I know it's a difficult one, but are you able to isolate the pricing impact in VINCI Construction growth in Q1? I'm thinking at material prices for Eurovia and also maybe the triggering of escalation clause for construction. I mean, was that a big factor in terms of the like for like growth?
No, we are not. You know, we have in total, when you take VINCI Construction, VINCI Energies, and with Cobra, it will be even more than that, we have 300,000 contracts. So that's true that some business unit can have, let's say, a visibility on that. But I will not give you, and will not say, "Okay, X% of the growth comes from, let's say, the price increase or the procurement increase and the rate for volume." So I'm sorry, I'm not able to answer you. It's more complicated in your case than in other sectors. That's true. For example, in cement that you know by heart, that some drivers which are monitored closely by you. We do agree the same, but I cannot give an answer like that.
Okay.
Especially not, Nabil, especially not for Q1.
Okay. When you say you are more selective at VINCI Construction, is that a comment that applies to France, to the overall business? Could you describe what's the environment for prices right now on new bidding? I mean, is that a reaction you have because you don't see competition very rational in some of the markets, for instance?
Yes. More selective. We are always selective, but more selective maybe today than ever. It's true in France, and it's true abroad as well. It's probably our competitors will do the same because, again, what I explained a bit earlier is that we are lucky to have very high order book. It gives us visibility and serenity, and we are very lucky for that. We don't have, let's say, to fight like crazy to get some volume at any price. We could live very comfortably with smaller order book. Let's say we have the means of such an ambition with such high order book. We don't want to take inflation risk. That's not our job. We are not better positioned than the clients to monitor this kind of fluctuations, which are very, very difficult.
With all such other routes, we can be selective. The competition, everybody, what they want, do what they want. The competition, we think, will do exactly the same. What does it mean to be selective? It's to be cautious, to be vigilant, to refuse to bid for contract with fixed and non-adjustable prices. We have enough to do. We don't need, let's say, to take a risky contract. We think ultimately the prices will increase. Again, the clients and people in the world, maybe that's something new, but we enter a new world, and people will have to get used again to inflation.
Okay. The third question I had, I was wondering if you could provide some comparison of Cobra versus last year. I mean, I remember you've been saying as well that you are also more selective and which I understood as there are some businesses that you are less interested in. I would assume that maybe revenues went down versus last year. Could you provide an idea of what was the performance of Cobra in Q1 versus last year?
In fact, we are more to the point, too. We are more focused on integration. You know, last year was very specific. It was, let's say, an interim year. We prefer not to, let's say, compare Q1 2022 versus Q1 2021, for example. The current trend of Cobra IS are bang in line with what we expect and with our business plan for the full year. It means, okay, we are EUR 1.2 billion in Q1. That's fine. That's what we expected. At the end of the year, we expect revenue of EUR 5.5 billion, which will be higher than the revenue last year.
Okay.
We ask Cobra IS to be very selective as well, to apply the same, let's say, recipe, the same stringent rules. The same for them. They have a very high order book, more than 18 months of activity. Let's say relatively, it's even bigger for them than for VINCI Construction or VINCI Energies, and whose projects are mainly short cycle, so maybe comparison is not, let's say, relevant. Cobra IS has visibility, so they can afford to be selective and to follow the rules.
Understood. Last one is the easiest one actually. You know, coming back to an earlier question, I think that we asked about the impact of fuel prices on motorway traffic. Could you confirm that from the first of April, French drivers benefit from a rebate paid for by the government on gasoline prices?
Yes, I confirm, it's in place until the end of July 2022. It's a good help, right? It's a subsidy, which is important. When you fill your gas tank with such a subsidy, you save almost EUR 10 per full gas tank. It can have an impact, and you may have noticed that the petrol price since the peak at the end of March, for the diesel and for the unleaded petrol price, at the end of March, it increased strongly the tenth of March until the end of March. At the end of March, it was a bit more than EUR 2 per liter. Now today it decreased at around EUR 1.8 per liter.
That's before the rebate?
After.
Okay.
All right. That's the impact because ultimately, what will be key to monitor in terms of traffic for motorways will be Q3, which is of course the most important quarter of the year. We'll see that closely. The performance of the year will be driven, let's say, from June.
Yes.
As usual.
Thanks a lot, Grégoire. That's very useful. Thank you.
Yeah, no worries, Nabil. Bye-bye.
We have another question from Marcin Wojtal from Bank of America. Please go ahead.
Yes. Good afternoon. Thank you. I've got a couple of questions. Firstly, can you comment on the evolution of aviation tariffs in your main airports, let's say maybe in Portugal and London Gatwick? Have you been increasing these tariffs at all in the last 12 months? Are you planning any increases in the coming months? Or are you perhaps providing discounts to airlines to help the traffic to recover? And can you also remind us, which of the main airports have tariffs which are linked to inflation? That would be my first question if that's okay. Question number 2-
Yes, sure.
Sorry to come back to construction margins, but can you just remind us, I mean, what is the main reason for you to expect profitability to improve? Is it better execution? Is it you finishing some old, less profitable project? Because obviously, when revenue is growing so much, typically, there is lower profitability in the initial stages of new projects. You mentioned several projects which are large and which are new as well.
Marcin, inflation specifically, yes, you're on airports. Generally speaking, you know, the thematic of inflation is very important in contracting for concession. With concessions, with motorways and airports, we are very happy because they offer us an edge versus inflation. Your question is regarding airports. So, ANA, you see the aeronautical fees are linked, inflation linked. Inflation being the European inflation. That's a kind of a harmonized index of consumer prices determined across all the European countries. You know that's calculated, that inflation which is calculated at the end of August. For an application, the year after the first of January. ANA, let's say no problem, quite a straightforward inflation mechanism. The aeronautical fees for ANA are public, if I'm correct. In 2022, they increase.
In other words, the blended increase is almost 5% on the Portuguese airport. Okay? For Gatwick, it's very easy as well. You know that some agreements with the airline, with the clients, and these agreements are based year to year on RPI, on the retail price index. The same, there will be a mechanical pass-through mechanism for Gatwick. I mentioned ANA, I mentioned Gatwick. With these two airports, we have already covered 60% of the revenue of VINCI Airports of a normal year. If you want more food, a lot of other airports have straightforward aeronautical fees linked to CPI. That's the case in Brazil, for example. That's the case in Belgrade, in Cambodia, in Chile. I covered 90% of the revenue of VINCI Airports.
After all, there are some situations where it's from year after year negotiation, but you know, as infrastructure manager and, we know, and the stakeholders know, the grantors know that CPI is absolutely key. So I mean, even if you don't see a formula, of pass-through for CPI, you know that in the negotiation, of course, inflation is an unavoidable, parameter to take into account in the financial equilibrium of the deal. For VINCI Construction, let's say the answer is the same as the one we did at the beginning of the year, is that we think VINCI Construction has still room to, increase and to improve the operating margin, because we are still, let's say, pretty far from, an optimal level. Because until the end of 2020, you know, we suffered from loss-making projects.
Those have been in France, you know, to answer, to follow up on the question of Elodie. Even in France, we can go through big difficulties sometimes. These loss-making projects are now behind us. From 2021 onwards, I mean, 2022 it will be the same, you'll not have any more dilutive impact of such loss-making projects. It will be as well some better execution and a better organization as well, thanks to the new unique management of VINCI Construction and Eurovia. You know, this VINCI Construction new look is led by Pierre Anjolras. He did a great job at Eurovia during many years, and he will do probably the same at VINCI Construction.
Today we are still, let's say, reasonably optimistic, and the margin we see in the backlog make us confident.
Okay, thank you very much.
We have another question from José Arroyas from Santander. Please go ahead.
Hello, gentlemen. Hello, Grégoire. A question first on the autoroutes. I'm struggling to reconcile revenue growth and traffic. Revenue is up 9% versus the Q1 2019, but traffic is just 2%. I wanted to understand the different moving parts here, and I was wondering in particular the impact of the Strasbourg bypass. Is the Strasbourg bypass counted in the revenues but not in the traffic data? That's question number one. Question number two is on Cobra IS. It's probably early days, but I wanted to check with you, what progress has been made towards the commissioning of some or several of the 15 GW renewable pipeline so far? Thank you.
Yeah, hello, José. Revenue VINCI Autoroutes Q1 2022 versus Q1 2019, growth of traffic +2%. In addition, you have three years of tariff increase. You know, you compound tariff hikes, toll hikes, which took place in 2020, the first of February 2020, the first of February 2021, and the first of February 2022. The other moving part, you know, is the mixed effect. Sometimes it can have a positive impact, sometimes a negative impact. You know, when the trucks outperform in terms of traffic, the light vehicles, since the trucks pay more than the cars, ultimately you have, let's say, a further boost in your revenue.
Regarding ARCOS, the western bypass of Strasbourg in the east of France, we commission and we open this asset mid-December 2021. It's a small asset, José, revenue for the full year 2022. Let's say the beginning of a ramping up very young asset. It will be a few 10 million EUR, maybe a bit more than 20 million EUR. It does not have a big impact. Don't forget anyway that since it's a young asset, and it's always like that at the beginning of the concession, that's what we call the daycare. It's. They will not be profitable the first year. It will have a drag all things being equal.
This small asset will have a small dilutive impact on the profitability of VINCI Autoroutes. Regarding the second question, José, with Cobra, we have three, let's say, hot projects to develop in the very short term. That's what Xavier Huillard, the CEO, explained at the beginning of February. The let's say, the three next upcoming renewable projects that we will operate as a concessionaire. The next one is in Brazil. That's a photovoltaic plant. It's a 570-megawatt capacity. The project should be the works should start imminently, very, very soon. CapEx will be EUR 350 million, and this asset should be ready to produce in mid-2023. This one is probably the works will start, if not already started, very, very soon. For production, mid-2023.
The other asset we highlighted at the beginning of the year, and it goes in the right direction. We develop, we work, and so it's, let's say, it goes in the right direction. The second project is in Ecuador. It's a non-toll wind concession. It should be ready to build in the next few weeks or few months. The capacity is 110 MW. That's a CapEx of around $175 million, and it should be ready to produce by the end of 2024. The third project, which is, let's say, very close, it's a photovoltaic plant in Spain for a bit more than 110 MW. It should be ready to build by the end of 2022. We are waiting for, let's say, the latest different authorization.
CapEx of EUR 70 million, and it should be ready to produce maybe somewhere in H2 2023 or early 2024. I think it goes, let's say, in the right direction. José? José, can you hear?
Yes. Thank you, Grégoire. All very clear. Thank you.
Thank you. Bye-bye. See you soon.
We have another question from Gregor Kuglitsch from UBS. Please go ahead.
Hi. Thanks for taking my questions. Can you just specify maybe how much you spent on M&A in the quarter? There were a few deals, I think half of them closed as well, and then maybe specifically on the two, I guess those were actually in April. Anyways, the TollPlus deal, if you could just provide a little bit more detail, and also on that smallish concession in Canada, that would be helpful, please. The second question is just on construction. I mean, obviously you had a really strong Q1. I seem to remember before the message was a bit more like, I don't know, stable-ish revenue.
Should we expect that still to be true, or is it now starting to build a little bit of upside risk given, I guess, the ramp up of some of those contracts has probably just started? Then finally, I saw in your commentary that perhaps was disclosed before, but I'm not sure it was discussed at any particular point in time, is the Scope 3 reduction. Could you just maybe give us a little bit more detail around that, the 20% target? You know, how much can you really control? What are you actually doing there to achieve that? Thank you.
Regarding M&A. We don't comment yet on the deals we announced for April, TollPlus and the Confederation Bridge in Canada. I'm not sure they are closed, that's the first reason, and there are some non-disclosure agreements with the seller of TollPlus, which is with an Indian, let's say, entrepreneur, and with OMERS, the infrastructure fund in Canada. I don't know what I can tell or not, sorry, I prefer at this stage not to tell you the amount. Regarding the transactions, the M&A which are being closed in Q1, I prefer not to give you any prices because there were not a lot, let's say, of transactions, for confidentiality reasons. If your underlying question is to try to estimate other things, maybe.
Free cash flow, right? Yep.
Yeah, okay. Free cash flow. Below the free cash flow, you had this M&A, but I don't comment on the amounts because I prefer not. I don't know if I'm allowed or not. You have as well the share buyback. You know, in Q1 2022, we did EUR 600 million of share buyback. It's not nothing. It has an importance. Above free cash flow, and I'm sure it was the sense of your question maybe, you have the working cap change. The working cap change in Q1 is negative, and that's totally normal at this time of the year. That's due to seasonal variation in our business activity. It's negative as well because we integrate the Cobra IS, whose working cap change in Q1, for the same reasons of seasonality, is negative as well.
If we adjust from this, let's say, scope effect, let's say our working cap change is pretty reassuring, not too far from, let's say a normal level for Q1. In other words, and to make it clear, we don't see at this stage big, unwind or backlash on our working cap, despite the stellar performance of the working cap in 2020 and 2021. It's pretty reassuring. The second question was Gregor?
I think it was on CO2 emissions, the Scope 3.
Okay, yes. Okay, yeah, we announced that we will reduce our Scope 3 emissions, which amounts currently at around a bit more than 40 million tons per year, by 20% between 2019 and 2030. It's in addition to the first ambitious target we have on the Scope 1 and Scope 2, which is to reduce the CO2 emission by 40%, 40, between 2018 and 2030. The good news as well is that this, let's say, ambition on this target, and it's very important for a lot of investors, are being validated by SBTi, the Science Based Targets initiative. To give you a few examples, we write, there are, let's say, maybe, 30, 40 or 50 pages in the URD regarding all that. In detail, you will find a lot of things.
For example, to reduce emissions with our supplier, we will try to push some low carbon concrete. Our ambition is to use 90% of low carbon concrete by 2030. To give you an example, for example, in concession, because we spoke quite a lot about the concession, we will deploy some electrical charging stations for airports. We can set up, let's say, an industry to develop some green hydrogen and liquid hydrogen to boost, you know, the future of aviation. We can propose city airports, a modulation of aeronautical fees, depending on the environmental performance of the aircraft.
That's all this kind of initiative to try to make some more green efficient, more energy efficient buildings for our clients to help them to monitor their CO2 emissions and to have a real impact on that. That's all these kind of initiatives.
Okay. Construction, the revenue outlook given the strong Q1.
Yeah, but the guidance did not change. We said that we will keep, let's say, we'll stabilize the high level of revenue. Q1 is only a Q1 regard. All of you, it's maybe too early to extrapolate too much. What we said is that we will be selective. At the end of the year, will the growth be as strong as in Q1? Q1, let's say, you cannot extrapolate. Maybe it will be flattish, but if it's flattish plus, because we are selective and because we will not run after volumes, let's say desperately, it can be a good news as well. I cannot be more specific than that, Gregor.
Fair enough. Thank you. Appreciate it. Have a good evening.
Yes, thank you.
We have no further questions, sir.
Okay. Thank you very much. We hope to see you in person very soon. In the meantime, as usual, Walid, Boris, and myself, we are at your entire disposal should you have any questions or follow-up. We are here for you. Same for the buy side in this call. Bye-bye.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.