Good day, ladies and gentlemen. Welcome to the VINCI third quarter revenue 2026 conference call. I now hand you over to Thierry Mirville, CFO of VINCI. Sir, please go ahead.
Okay. Hello, and thanks for attending this conf call. I am today with Grégoire Thibault and the IR team and Marie-Amélia Folch, the group controller. I will be brief to have more time for the Q&A. What are the key takeaways of this publication? First, a strong revenue increase in Q3, +5%, driven in particular by international and energy solutions. This is a positive trend after a stable Q1 and +4% in Q2. Thus, the nine months revenue totaled EUR 56 billion, +3% on an actual basis and +2% on a like-for-like basis. It should be noted that year- to- date, this increase was driven by a good momentum at energy solutions, +7%, and by revenue outside of France, which rose by 7%, including +4% like- for- like.
Revenue outside France accounting for 60% of the total versus 58% in the nine months 2025. I will come back later in greater details for each business. The key takeaway number two, the group's nine-month order intake was robust, almost EUR 50 billion, an increase of +6% year-on-year. It is worth mentioning that order intake in flow business, which accounts for the majority of revenue for the energy solutions and construction businesses, was up 7%. Order intake was well above revenue generated by this business line, EUR 46 billion. It means that the order book continues to grow at a satisfactory renewal rate. At the end of September, the order book reached the high level of EUR 75 billion, +7% year-on-year.
It represents 14 months of average business activity, enhancing visibility and serenity for the group while enabling it to continue to remain extremely selective, and international business made up 71% of the order book. The third key takeaway, the net financial debt of VINCI at the end of September is well under control. It amounted to EUR 20.2 billion, down EUR 1.2 billion year-on-year. So VINCI's liquidity remains substantial, with a managed net cash of almost EUR 15 billion at the end of September and EUR 6.5 billion of FCF. As a result, with such a quality order book and sound financial position, VINCI is well prepared to continue with the development in good conditions with a disciplined cash allocation policy and looks to the future with serenity. Let us now have a closer look at the main divisions. First, concessions. Nine months revenue of EUR 9.6 billion, up 2%.
This performance reflects the good diversification of our portfolio of airports and motorways worldwide and their resilience to headwind. At VINCI Airports, passenger numbers remained stable despite high prices for kerosene and geopolitical disruption. The trends are contrasted. Many airports in the network continued to benefit from a solid growth, particularly in Portugal, Belgrade, Budapest, Edinburgh, the Dominican Republic, and Cabo Verde. Conversely, geopolitical disruptions continued to weigh on traffic at some airports, such as London Gatwick or in Asia. Stable traffic then, but revenue rose by 3% on an actual basis to EUR 3.8 billion, despite negative scope effect in Cambodia. On a like-for-like basis, revenue grew by 5%. This performance demonstrates the ability of VINCI Airports to optimize both aviation and non-aviation activities, in particular by passing on inflation.
At VINCI Autoroutes, nine months traffic levels were down 3%, of which light vehicle traffic minus 4%, primarily due to surging fuel prices. Meanwhile, heavy vehicle traffic continued to show a positive trend, +1%. This good momentum for heavy vehicle traffic partially explains the relatively limited decline in revenue recorded by VINCI Autoroutes, -0.8% to EUR 5.1 billion. Now, for energy solutions. Nine months showed that this business is firmly buoyed by powerful megatrends, such as electrification, AI, and data center development, digital infrastructure services, and defense and sovereignty investments. The nine-month highlights include a revenue growth of +7% to EUR 22 billion, 70% of which was generated outside France, and with a strong growth in Q3, +9%. The increase in order intake, +9%, and the order book, which is +9% year-on-year, and VINCI Energies' active acquisition policy in fragmented markets.
Within energy solutions, VINCI Energies printed once more a strong performance. Nine months revenue of EUR 16 billion, +7% actual and +4% like-for-like. Q3 was particularly strong, +8%, of which +4% like-for-like. This performance reflects the dynamism of the business unit in robust market, both in France and abroad. France was up 5%, while international was up 9%, of which +12% in Germany. Other indicators to point out, order intake up 8%, so that means a new rolling 12-month record of nearly EUR 24 billion, and another book up 11% year-on-year. Furthermore, please note that VINCI Energies remain active on the M&A front, having completed 23 acquisitions in the first nine months, representing a cumulative annual revenue of around EUR 220 million, mainly in the Benelux, the U.K., North America, Australia, and New Zealand.
In addition, keep in mind that VINCI Energies completed mid-October the acquisition of the German company All for One, around EUR 500 million of revenue per year. This acquisition of a specialist in the integration and maintenance of business application will give VINCI Energies, through its Axians ground, a stronger presence in the fast-growing digital infrastructure services market, and it will allow it to seize the many opportunities created by the acceleration of digital transformation in Europe. Within energy solutions, let's now move to Cobra IS. The nine-month revenue of EUR 5.8 billion means +8%, of which +10% in Q3, which is not bad. This growth was driven especially by the flow business, which remains very strong in Spain. The other indicators, order intake year- to- date was up 11%, and order book at the end of September was up 6%.
Finally, in the construction business, revenue reached a high level of EUR 24.6 billion, with good momentum outside of France for both proximity networks and specialty networks, and the successful integration of the public works company, Fletcher Construction, in New Zealand. For VINCI Construction, the nine months revenue is slightly up on an actual basis and slightly down like-for-like. In line with the trend observed in previous quarters, the key points were lower business levels for major projects, representing less than 10% of the total view, in particular to progress on the HS2 project in the U.K. The decline in revenue in France as a consequence of the usual electoral cycles and phasing for some building projects, and a favorable revenue trend for the other divisions, particularly Oceania, Central Europe, and the United Kingdom. The order intake is up 3%, and order book up 5%.
Last but not least, Vinci Immobilier. The property development market is, as you know, still facing very challenging conditions. In the backdrop, Vinci Immobilier's revenue was down 14%, and the number of reservations in France down 23%. In terms of M&A disposals and cash allocation policy, I already mentioned the development of VINCI Energies. I would like to add that in September, Cobra IS sold its 50% stake in the company Pampa, which holds a PPP contract for high voltage transmission line in Brazil. This transaction is a good illustration of Cobra IS expertise in carrying out major P&D projects, notably under PPP, such as currently in Brazil and Australia, and in optimizing the management of its asset portfolio. Since 2023 in Brazil, Cobra IS has sold several stakes in PPP within the sector for proceeds of more than EUR 300 million.
Now in terms of share buybacks, total amounted to EUR 1.7 billion in the first nine months versus EUR 1.4 billion in the first nine months of last year. We will continue since VINCI implemented a new share buyback program with a maximum purchase amount of EUR 270 million to be completed by year-end. Note that VINCI is one of the most active players in the share buyback amongst the French corporates.
In conclusion, given this excellent financial performance since the start of the year, VINCI confirms its 2026 guidance, further growth in its revenue operating on a net income attributable to owner of the parent, and a free cash flow that could reach EUR 6 billion. This guidance does not factor in the adverse impact of a possible increase in France's tax on long-distance transport infrastructure operators, mainly those operating motorway, which is currently being reviewed by the French Parliament.
As an initial estimate, the potential P&L impact of such a measure on VINCI's operating earnings and net profit in 2026 would be an additional charge of around EUR 450 million to be paid in 2027. I insist, it means that it would have no cash impact in 2026. We would like to thank you for your attention, and before taking your question, I will emphasize that I will not make any additional comments on the current discussion that the French Parliament regarding the national budget for 2027, as these discussions are at early stage and sometimes quite erratic, if I may say so. Now it is time for the Q&A.
Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star one one again. Please stand by, we will compile the Q&A roster. This will take a few moments. Once again, if you would like to ask a question, please press star one one. Now we are going to take our first question, and it comes from the line of Luis Prieto from Credit Suisse. Your line is open. Please ask your question.
Good afternoon. Good evening. Luis Prieto here. Thanks a lot for taking my questions. Just one from me today. There is mention of various disposals in today's statements that you just made reference to. In this context, I wanted to take the chance to ask you about potential further progress in the wider portfolio review that you have commented about in the past. Thank you.
No major from the [inaudible]. Okay. To answer your question, I would say there will be no major change of our behavior in terms of review of our portfolio. That means that indeed it is an ongoing process, but at this stage, nothing has changed compared to what we have already said since the beginning of the year.
Understood. Thank you.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for a name to be announced. We are going to take our next question. The question comes from the line of Cristian Nedelcu from UBS. Your line is open. Please ask your question.
Hi. Thank you very much. Could I ask you in terms of the inflationary pressures that we are seeing out there, could you give us a bit of color around your confidence, around the EBIT margins in Construction and Energy Solutions? Do you believe you can maintain them stable and growing year-over-year? Any color on your ability to pass through the inflationary pressures? The second one, can I ask on the share buyback, when you decide what is the appropriate level of share buyback that you are doing, could you elaborate a little bit on the factors that you are considering? I could argue that the share price is at a low level that may be an appealing level to buy more than you are currently doing. What would be the counterargument of doing that? Maybe the last one, if I could kindly ask you, the yields are increasing.
Could you talk a little bit about the impact on your interest cost? I guess you have some refinancings ahead. You have some of your debt that has a variable component. Could you help us with a bit more detail how you are thinking about this aspect? Thank you.
We can share my back. Answering your first question about inflation. First, our best protection against inflation is the fact that most of our contracts are very short. For instance, both for our Energy Solutions and VINCI Construction, the huge majority of the revenue is done with contracts which last a few weeks or a few months. That means that we are able to adapt very quickly our pricing to the inflation pressure. For the bigger contracts, it is forbidden since a month now, since COVID, I would say, to take fixed price contracts. That means for all big jobs, all of our big jobs are either cost-plus jobs or are jobs with escalation clause, which protect us against inflation, knowing that in terms of our cost, we do not still have so much inflation pressure in our cost.
When or if it occurs, we are confident that thanks to the granularity of our contract and this, I would say, escalation clause or contractual schemes, we will be able, and it was the case in the past, to pass through inflation to our clients. That is about inflation. About share buyback, indeed, we have asked ourselves the question, given the level of the price of the share, that indeed if we could do more, I would say, and we have decided to stay in line with what we have decided since the beginning of the year, knowing that, as I did mention, we are already among the first player in the share buyback in France. We want to keep a very strong liquidity in our balance sheet, because we do not know what will happen in the next month in terms of refinancing.
That means that we want to be able to choose the right window in order to issue bonds, and not to feel under pressure to issue bonds in a bad condition, knowing that also we have started to refinance in advance some of the bond which will mature next year. So the first explanation why we have kept this level of EUR 2 billion. The second explanation is we are convinced that this period will bring us many development opportunities as it was the case during the Euro crisis with the acquisition of ANA, during the COVID, with the acquisition of Cobra IS, which creates a lot of value for the group. We will be able to catch any opportunity which could come in the coming months.
That is why we have decided to keep our liquidity in the balance sheet, knowing also that, probably even the situation, the level of the price of the share will probably stay quite low in the coming months. So with the figure at the end of the year, and for instance, term of cash flow generation, we will decide what will be our policy for next year. In terms of interest rates, so perhaps to summarize what is our interest rate management policy. I would say, today we have half of our gross debt, which is in variable rate, half of which is in a fixed rate. In front of the date in variable rate, we have almost the same amount of cash, which has also almost the same remuneration of the cost of the net debt.
That means that when there is an increase of the interest rate, indeed it costs more for the gross debt, which is on the value in a variable rate. We have to compensate an increase of the remuneration of our cash, which is rather neutral for VINCI.
That is very helpful. Am I allowed to ask one more, if it is not too much trouble?
Okay.
Thank you. Could I ask you on your movement in net debt, if I calculate well, I think your net debt was reduced by around EUR 2.2 billion in Q3, which is a higher reduction than you have done over the last two years. Just curious, is all of that reflective of the free cash flow generation or are there other movements in there around FX or other movements we should keep in mind? I am asking from the perspective of you have reiterated around EUR 6 billion free cash flow target for this year. So I was curious a bit if you can give us more color of the moving parts in the current environment. I do not know if there are some positive and some headwinds to reaching that target that you could elaborate on. Thank you.
As you said, you have made yourself your calculation, so I will not give you a precise figure, but you have made your calculation. Indeed, you have all the parameters to, I would say, make a rough calculation of the free cash flow. You know what our M&A expenses, what is our share buybacks, and so on. That means that indeed, regarding the free cash flow, I would say all the indicators we have at this stage show that indeed we are confident that we are going to be able to reach this guidance in term of free cash flow. As you did mention, indeed, I would say according to your own calculation, it is even a little bit better now than it was last year at the same stage of the year.
Understood. Thank you very much.
Thank you. Now we're going to take our next question. The question comes to line of Nicolas Mora from Morgan Stanley. Your line is open. Please ask the question.
Yes, good evening. Two or three from me, please. I'll be quite quick. First one on France. Can you tell us overall a little bit what you're seeing on the ground? You mentioned a soft investment backdrop from the municipal cycle and construction mostly. I think we have that in mind. Are you seeing anything, any kind of slowdown also in the energy space and in terms of order intake of late? We're just trying to assess a little bit what the current environment could be carrying in terms of risks of further slowdown. That's first point. Second point on Cobra, the order intake was excellent in Q3. You mentioned in the release a fair amount of orders left and right, especially in data centers. Anything else you want to mention? Any in terms of maybe A flow orders versus large orders and what's really driving that print.
Last point on M&A, I think you've just closed All for One acquisition. You've got one left to be delivered by the end of the year. Safeway Concessions, are we still on for the year-end for the close? I think that would be it. Thank you.
Regarding France, I would say situation is very contrasted. Starting with VINCI Energies, as you can see in the figures in France, both revenue and order intake is still very dynamic, and we don't really anticipate, according to the news we have, a change in the coming week or month. Demand is still there, especially in the infrastructure and building solution businesses. So that's for VINCI Energies. I would say for VINCI Construction situation is again, within VINCI Construction contrasted. That's clear that indeed for the road business, so the Eurovia business, there is, I would say, quite a decline in term both of order intake and revenue. So it's partly due to the electoral cycle, but also indeed there is some reduction of the investment in this field, and probably it will continue in the coming months for this road business.
On the opposite, there are still some business which are still quite sustained. For instance, for everything which is linked to water treatment is still quite a strong dynamic. Also good for the building business, I would say. That is clear that for the new building, the market is quite difficult, but it is compensated by the refurbishment business, which is still very strong. That is clear that indeed, I would say, for VINCI Construction, France is not the most dynamic part of the business, and we anticipate that it will continue like that in the coming months. That was about France. The second question, Cobra IS. Cobra IS, as you have seen, indeed order intake was very strong in Q3. It is, I would say, the outcome of two factors that I can say. Order intake is still very strong in the flow business, especially in Spain.
Also for, I would say, the EPC business. Indeed, they did book a few big projects during the Q3, namely the cooling plant for Sines in Portugal. There is also a PV contract in Mexico, where Cobra did disclose a PR this week or last week. The synchronizer for Red Eléctrica in Spain. There is three big jobs which have lifted the order intake of Cobra in Q3. The last question was about Safeway. Safeway, we are still waiting for some authorization in India, but it is on track, and we are confident that the closing will occur before the end of the year. I would say by year-end, it is very unlikely that there will be significant other acquisition which will be closed. Probably, I would say a few smaller ones for VINCI Energies as usual. A significant one, no, it is very unlikely.
Excuse me, Nicolas, any further questions?
Oh, sorry, I was on mute. No, nothing. Thank you very much.
Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. Dear speakers, just a moment. We just got another question come through. Just give us a moment. The question comes line of Marcin Wojtal from Bank of America. Your line is open. Please ask your question.
Oh, yes. Good afternoon. Thank you. I have just got one question on motorway traffic in France. We have been reading in the press about shortages of fuel in some of the petrol stations, in particular, diesel. Could you comment, has that impacted your traffic volumes? Has there been perhaps any hesitancy to travel due to these shortages, or the performance you are seeing is mostly driven by expensive fuel prices? Thank you.
No. There is no shortage of diesel on our motorways. I would say the decline of traffic is only due to the high price of gasoline or diesel. But I would say there is, at this stage, there is no shortage of diesel or other fuel on our motorway.
Thank you, Marcin. Now we are going to take our next question. The question comes line of José M. Arroyas from Santander. Your line is open, please ask your question.
Thank you. Just one question from me. I wanted to ask you about your opinion on the managed lane market in light of the recent outcomes we have seen in two projects. Is this a market that remains attractive to VINCI, and could VINCI consider participating under current conditions in future? Thank you.
I would say you probably or certainly know what are our views regarding the managed lanes. I would say that still that we need to have certain conditions to be met in order to bid for such managed lanes. We did try North Carolina, we were not selected and so on. We are still open to bid for managed lanes where these conditions are met. Now, when we see the figures for the last two bids won by Ferrovial, that is clear that we do not know much detail, but when we only read the figure, I would say we are a little bit surprised. We are waiting to try to understand better what is the economics of this kind of deal.
But, indeed, despite that, I would say if there is one managed lane or managed lanes which meet the required conditions in order to be attractive for us, that is clear. We are still open.
Excuse me, Jose, any further questions from you?
No, thank you. That was all. Thank you very much.
Thank you so much. Now we are going to take our next question. The question comes line of Ruairi Cullinane from RBC Capital Markets. Your line is open, please ask your question.
Hi. Good afternoon. Just one question, and no problem if you cannot answer this given your comments at the start. But are you interested in bidding in future concession and, well, potentially in time autoroute re-tendering opportunities, how would you approach them? Given current budget proposals, would you just bid for them with a higher risk premium? What is your thinking about that, if you can comment? Thank you.
I would say, first, indeed, we are under no pressure to bid for new concession of motorways in France because, as I already explained, since 20 years, we have built VINCI. We are developing VINCI Airports and so on, in order to not depend on the future of the French motorway concession. Now, indeed, when it will happen, it will depend on the conditions. That is clear. That is what we experienced since a few days or few weeks. We are going to be even more cautious. So we will see what will be the conditions, but it is too early to tell. I would say we are open, we will see, but we will be under no pressure to win new French motorways concession in a few years.
Great. Thank you.
Thank you. Now we are going to take our next question, and the question comes line of Graham Hunt from Jefferies. Your line is open, please ask your question.
Yes. Thank you. Just one from me. Maybe just quickly on the data center outlook. You signed a contract in Iberia, I think. You have talked about a much larger scale of opportunities in Europe this year. Should we see this order as, is there a lot coming behind that? Is this kind of the scale we should be expecting? Just a bit more color in terms of what you are seeing over the next 12 months in terms of the data center pipeline would be helpful. Thank you.
The data center. That is clear that if you remember, the boss of Cobra did, I would say, did speak about significant amounts for data center, especially in Spain. As you probably know, there is, I would say, a draft of a decree in Spain, strengthening the conditions in terms of electricity supply for the new data center, which has, I would say, make think again some clients before launching the project. Also there is some delay in terms of construction permit and so on. That means that the projects are still there. I would say it is slower than what we were expecting due to these factors, but that is clear that these projects are still on the table. We are still well-positioned when this project will come to win some of them.
Also the same clients have also some projects in France, in Italy, in Germany, and they have also asked us to, I would say, work with them for this new project. To summarize, indeed, we have still strong expectations in the DC field for the coming months, but it's slower than what we were anticipating in July.
Understood. Thank you.
Thank you, Graham. Dear participants, as a final reminder, if you would like to ask a question, please press star one one on your telephone keypad. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Thierry Mirville, for any closing remarks.
No, thank you. See you soon.
That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.