VINCI

Analysis of Vinci share price

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Some French companies enjoy strong national popularity, but also strong recognition worldwide due to their success stories and the countless profits they generate. This is the case of Vinci, which is also one of the largest French groups listed on the stock exchange. To find out how to analyse Vinci shares, here is some information you should know.

Elements that can influence the price of this asset:

Analysis N°1

The signing of Vinci contracts in emerging markets, which represent a major source of revenue with a strong increase in demand for infrastructure over the last few years, will be followed with the utmost attention.

Analysis N°2

We will also monitor the evolution of the group's positioning in the energy segment, which is likely to increase its sources of revenue to a greater or lesser extent. Of course, this concerns more particularly the green energy sector.

Analysis N°3

We will also closely monitor the signing of Vinci public-private partnership contracts that will take place in the coming months or years, as well as partnerships of this type that are currently underway.

Analysis N°4

Of course, the price of raw materials will also have an impact on the price of this value and on Vinci's activities, so you will have to keep a close eye on this market.

Analysis N°5

Competition from Asian countries is also to be closely monitored in the building and public works sector, as is competition from large groups, particularly European groups.

Analysis N°6

We will also monitor the evolution of investment by local authorities in the execution of public works, which will have an impact on the company's profitability.

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General presentation of Vinci

The French group Vinci is none other than the world leader in construction, concessions and related services. However, its turnover is mainly generated by the design and construction of works in the building, civil engineering and hydraulic sectors with Vinci Construction. These activities account for 32.3% of the group's sales.

This is followed by the design, construction and maintenance of energy and telecoms infrastructures, and the construction, renovation and maintenance of transport infrastructures, which account for 28.6% of sales with Vinci Energie. Delegated infrastructure management generates 16.4% of revenue. Finally, the remaining 2.5% of sales came from property development activities.

Vinci achieves more than 59.6% of its turnover in France but also reaches the whole of Europe, Africa, North America and a few other countries.

Vinci's share price is currently listed on compartment A of the Euronext Paris market in France. The Vinci Group is included in the calculation of the French national stock market index CAC 40. It is therefore one of the 40 companies with the largest market capitalisation in France.

Analysis of Vinci share price
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The major competitors of Vinci

The French group Vinci has specific activities in the construction and property engineering sector. In this sense, it faces little competition. However, as the market in this sector is small, these direct competitors are a real threat and are also among the large companies listed on the stock exchange. Vinci does not compete directly with the smaller companies in this sector since the projects in which it is involved are large scale and require precise means and expertise. We therefore invite you to discover these competitors here. It is therefore essential to monitor the activities of these two major groups that are direct and main competitors of the Vinci Group and in particular their responses to public tenders in this market. In fact, an increase in one of these three actions often leads to a decrease in the other two and vice versa due to the competition phenomenon.

Bouygues

Vinci's main competitor in terms of sales is currently the construction giant Bouygues through its specialist subsidiary.

Eiffage

But we must also take into account the competition from the Eiffage Group, which occupies a large part of the French and international market.


The major partners of Vinci

The Vinci Group, through its various subsidiaries, has developed various partnerships with French and international companies over the years in order to maintain its place among the leaders in this field of activity.

BlablaCar

It has thus set up a partnership with the company BlablaCar in 2015 in order to develop this type of means of transport on French motorways.

Bouygues

Negotiations are currently underway between Vinci and Bouygues to set up a possible partnership on various construction projects.

Waze

More recently, the group has also set up a partnership with the Waze satellite guidance service with the aim of preventing dangers for men and women working on motorways through active prevention for motorists in real time. The partnership between these two companies was initially set up in 2015 and has been strengthened since 2018 with the deployment of a new feature that signals the presence of Vinci Autoroutes' intervention vans.

UNAF

Also in 2018, Vinci Airports has also joined the UNAF programme "Bee

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The factors in favour of a rise in the Vinci share price:

Vinci's first asset is of course its positioning on the international market. Indeed, the group is currently and has been for several years the world leader in the building and public works sector. It stands out in particular in the motorway and airport concession segments. It should also be noted that Vinci is marked by a very strong presence outside France, with more than 41% of its sales outside France, which is relatively rare for a French company.

The Vinci company also benefits from a reassuring long-term strategy, highlighting the complementary nature of its activities. Indeed, there is a strong complementarity between the concession activities with the Vinci Autoroutes and Vinci Aéroports subsidiaries, which together account for more than 18% of the company's sales, and the contracting activities with the Vinci Energies, Eurovia and Vinci Construction subsidiaries, which generate the remaining 82% of the company's overall sales.

It is also relatively easy for investors and shareholders to have good visibility on the future results of the Vinci company. Indeed, the company usually communicates its order book with a horizon of one year of revenue, which allows correct and precise anticipations of the evolution of sales and profits.

The Vinci group also shows a very interesting capacity for growth and development. Indeed, the company often makes acquisitions, particularly of airport concessions that enable it to increase its market share in a sector that is known to generate high margins. Thanks to this judicious acquisition strategy, Vinci is today the fifth largest international player in this sector with more than 100 million passengers a year thanks to its subsidiary Vinci Airport.

In the coming years, Vinci should also benefit from the renewal of French motorway concession contracts. The investors appreciated the fact that the company was able to negotiate advantageous financial conditions for these renewals despite negative expectations.

Vinci also won the tender for the Grand Paris project, which is about to start and should enable the company to generate significant profits in France in the coming years. This offers additional visibility to investors.

Finally, in a difficult economic context for European companies, Vinci has succeeded in significantly reducing its debt. As a result, it has been awarded an A rating by the rating agencies in 2016 and offers a high return for investors.

The factors in favour of a drop in the Vinci share price:

Of course, like any stock market asset, the Vinci share does not have only assets and can suffer from a few flaws that it is important to be aware of before engaging in online speculation. Here are the main weaknesses of this stock:

  • Firstly, although visibility is relatively good with regard to the Group's motorway concession contracts in France, in recent years there has been a downward trend in traffic mainly due to the rise in petrol prices and the decline in purchasing power in Europe. This could therefore weigh on the company's profitability in the longer term.
  • Other news also cast doubt on the company's future results, such as the uncertainties surrounding the financing of French local authorities or the delays in setting up public-private partnerships. The European States are currently undergoing major budgetary constraints, which has had harmful consequences for Vinci, as was the case with the suspension of the Bordeaux-Hendaye TGV line and the postponement of the delivery of the new Nantes airport terminal.
  • It should also be noted that, although Vinci benefits from varied and diversified activities, the margins achieved according to the divisions show rather significant variations. We know that most of the company's current profit, i.e. more than 60%, is generated by concession activities, while contracting is lagging behind. The value is therefore highly exposed to the constraints of this particular sector of activity.
  • Finally, we also note that investors are currently reluctant to buy Vinci shares because of their high price. Indeed, it should be remembered that this value is currently at an all-time high.

It is important to analyse and compare the effects of these advantages and shortcomings of Vinci before speculating on this share on the stock market.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

Who is the main shareholder of the Vinci Group?

At present, it is in fact the Vinci Group's employee savings funds that bring together more than 120,000 employees and former employees of the group that represents Vinci's largest shareholder. Indeed, these employee savings funds currently represent 9% of the group's capital in terms of shareholding, making them collectively the largest shareholder in terms of shares in the company. The rest of the shareholding can be consulted on the group's website.

What dividend policy does the Vinci Group apply?

The Vinci share offers a significant advantage with regard to the Group's dividend policy. Indeed, this policy is particularly attractive and constant and consists of distributing 50% of its consolidated net profit to shareholders. This favourable policy has been applied since 2006 and since the group's acquisition of ASF.

How has the Vinci share evolved historically?

It is interesting to know the evolution of the Vinci share price, in other words, its performance, over the last few months or the last year. Thus, over the last year, the share of this group has lost 28.12% of its value. Its high was €107.35 and its low €54.76. For the last six months to April 2020, the Vinci share has fallen by 34.40%.

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