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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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:
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.
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.
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.
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%.
