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.
To know the competition of the Vinci action :
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 strategic alliances set up by the Vinci group :
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: Sentinel of the Environment" by installing beehives in 7 French airports and raising awareness among passengers and airport staff about biodiversity issues.
Introduction and quotation of the Vinci share :
Let's now look at the history of Vinci share prices, in order to better understand the volatility of this stock and the trading opportunities it represents. First of all, note that the share price is listed on compartment A of the Euronext Paris market and that it includes the calculation of the Euronext 100 stock market index.
Over the last few years, the Vinci share price peaked at €61.70 in May 2007 before falling back to €24.02 in October 2008. This was followed by a general upward phase, punctuated by two slight downward retracements, in June 2010 at €35.61 and in October 2014 at €42.08.
At the beginning of 2015, the Vinci share price stabilised at around €55, in a global trend that is still very positive and promising. This will take the share price above the €87 threshold in December 2017.
This is followed by a slight downward correction, this time to €71 in December 2018, one year later. Since the beginning of 2019, the share price has again been in an upward phase.
Stock market data
In addition to the information you have read above, such as the activities and history of the Vinci group, it is also interesting to know some more general stock market information that you will find below, which will help you to better understand the listing of this stock:
- In 2019, the Vinci group represents a total market capitalisation of nearly MEUR 53,670.57 .
- There are currently 600,341,977 Vinci shares outstanding on the stock market.
- 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.
- Vinci's shareholders are 73.60% institutional investors, 8.80% employees, 7.20% individual shareholders, 6.1% treasury shares, 3.8% shares of Qatar Holding and 0.5% shares of directors and managers.
What are the assets and advantages of the Vinci share as a stock market asset?
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.
What are the shortcomings and weaknesses of the Vinci share as a stock market asset?
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.