VINCI Construction
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VINCI CONSTRUCTIONANNUAL REPORT2OO4 The men and women at VINCI Construction, the heirs to great builders, are helping to enhance the world’s living environment and develop its infrastructure. The group, a strategic division of VINCI, has set its sights on being its customers’ and partners’ most valued and respected builder, and on involving its 46,000 employees in its growth momentum. VINCI Construction is one of the four core business divisions of VINCI, world leader in concessions, construction and related services. VINCI has 128,000 employees in 70 countries, and generated net sales of €19.5 billion in 2004. VINCI Construction 8,284 VINCI Concessions 1,943 VINCI Energies 3,338 Eurovia (Roads) 5,788 2004 net sales in € millions 2004 ANNUAL REPORT VINCI CONSTRUCTION CONTENTS MANAGEMENT TEAM, CHAIRMAN'S MESSAGE 2 PROFILE 4 A GROWTH TRAJECTORY 6 A RESPONSIBLE GROUP 8 2004 BUSINESS REPORT 12 BUILDING 14 CIVIL ENGINEERING 18 HYDRAULIC ENGINEERING 23 SERVICES 26 VINCI CONSTRUCTION COMPANIES 28 SOGEA CONSTRUCTION 30 GTM CONSTRUCTION 32 VINCI CONSTRUCTION FILIALES INTERNATIONALES 34 VINCI PLC 36 COMPAGNIE D’ENTREPRISES CFE 38 VINCI CONSTRUCTION GRANDS PROJETS 40 FREYSSINET 42 1 2 3 4 5 6 7 8 9 10 MANAGEMENT TEAM 1 PHILIPPE RATYNSKI Chairman of VINCI Construction 2 JEAN ROSSI Chairman of Sogea Construction 3 ROBERT HOSSELET Chairman of GTM Construction 4 RICHARD FRANCIOLI Chairman of VINCI Construction Filiales Internationales 5 JOHN STANION Chairman of VINCI PLC 6 RENAUD BENTEGEAT Managing Director of Compagnie d'Entreprises CFE 7 PIERRE BERGER Chief Executive Officer of VINCI Construction Grands Projets 8 BRUNO DUPETY Chairman of Freyssinet 9 JEAN-MARC FONTEYNE Human Resources Director of VINCI Construction 10 FRANÇOIS RAVERY Chief Administrative and Financial Officer of VINCI Construction ON COURSE FOR PERFORMANCE “ nward and upward together” — this productivity and increase added value, their goal, spelled out a year ago, is reflected results are expected to increase further. in VINCI Construction's performance in O Three objectives underpin our roadmap for com- 2004. The year ended with results at an all-time ing years. We will be pursuing organic growth high. Net sales grew by 8% and net income by leveraging the expertise, roots and respon- increased even more (by 36%). siveness of our companies in each of their mar- VINCI Construction builds on the broad diversity kets. We will be stepping up integration of our of its companies and the strength of what brings know-how in offerings with high service content, them together — a clear and steady strategy of including project development and maintenance. controlled growth, an entrepreneurial culture And we will be intensifying our continuous driven by customer satisfaction and economic effi- improvement programme, striving day-to-day to ciency, and a management model focused on peo- make our companies more innovative, more pro- ple rather than structures. By working together ductive, more attentive to the expectations of within an organisation that combines and lever- their customers and safer and more fulfilling ages talents, VINCI Construction's 46,000 employ- for their employees. ees achieved outstanding results in 2004 and con- We are steering a course, as we go onward and solidated the group’s position as the world leader upward together, toward ever-greater perfor- in its sector. mance. The momentum is expected to continue in 2005. At €8.9 billion, our order backlog set an all-time record at the end of 2004, heralding further sig- nificant activity growth, especially in France and Central Europe and in major projects. Mean- while, as our companies continue to optimise Philippe Ratynski Chairman of VINCI Construction page 3 PROFILE Market leader in France and a world major in building and ≤ civil engineering, VINCI Construction brings together a unique range of competencies in building, civil engineer- ing, hydraulic engineering and maintenance. The variety and quality of the expertise applied by its exceptionally close- knit — especially in France and Europe — network enable the group to achieve optimum coverage of its markets. VINCI Construction's business activity is structured in three major segments, which complement each other: • mainland France with two independent networks engaged in multiple business lines (Sogea Construction and GTM Construction), which have a large number of agencies rooted in their local markets; • local markets outside mainland France, covered by a net- work of subsidiaries operating in the full range of con- struction business lines in their geographic zones: VINCI PLC in the United Kingdom; CFE (in which VINCI Construction holds a 45% interest) in Belgium; and VINCI VINCI CONSTRUCTION DIVISIONS Construction Filiales Internationales in Germany, Central VINCI CONSTRUCTION Europe, the French overseas territories and Africa; FILIALES INTERNATIONALES • a world market for major engineering structures, spe- SOGEA CONSTRUCTION GTM CONSTRUCTION Europe, North and South France France America, Africa, Oceania cialised civil engineering and dredging, covered by VINCI Sogea GTM Sogea-Satom Construction Grands Projets, Freyssinet and DEME (in which Barriquand Chantiers Modernes Warbud Bateg Dumez FCC CFE holds a 50% stake). Botte Fondations Coca SMP Construction Bourdarios Petit Hídépítö VINCI Construction has a management system combining Campenon Bernard Socra Inter-Most Cardaillac Pitance Novkol decentralised organisation, individual supervisory staff Caroni Construction Fargeot SBTPC CBC Travaux du Midi Sogea Réunion responsibility, a profit culture and networking. This model, Deschiron TMSO Sogea Mayotte Dodin CMA Sogea Martinique together with a constant strategy of selective order taking EMCC TPC SIMP Heulin Delair-Navarra Dodin Guadeloupe and added value enhancement, has enabled VINCI Manei GTM Guadeloupe Sicra Cogit Construction to steadily increase its results since it was Sobea Environnement Sogea Guyane Sogea TPI Nofrayane founded in 2000, and has contributed to making it the world- VINCI Environnement Dumez-GTM Calédonie VINCI Networks SKE wide benchmark in its sector. VINCI Bautec VINCI Construction OHG page 4 KEY FIGURES 2004 NET SALES « (in € millions) 8,284 NET CASH (in € millions) 1,506 OPERATING INCOME (in € millions) 349 NET INCOME (in € millions) 242 AND MAIN SUBSIDIARIES VINCI CONSTRUCTION FREYSSINET WORKFORCE COMPAGNIE GRANDS PROJETS Europe, North and VINCI PLC D’ENTREPRISES CFE Europe, North and South South America, Africa, UNITED KINGDOM Europe America, Africa, Asia Oceania, Asia Norwest Holst ABEB Socaso Freyssinet 45,701 Construction Bageci Hydroplus Terre Armée Norwest Holst Soil BPC Janin Atlas Inc. Ménard Soltraitement Engineering CFE Brabant Salvarem Conren CFE Nederland Hebetec NET SALES Crispin & Borst CFE Hungary BY BUSINESS LINE John Jones Excavation CFE Polska Rosser & Russell CLE Simplex Foundations MBG VINCI Investments BPI Civil Building engineering VINCI Partnerships CFE Immo 45% 27% VINCI Services Construction Management Sogesmaint Engema Hydraulic 13% 8% engineering Nizet 7% Vanderhoydoncks Specialised civil DEME engineering Services and misc. NB: The key figures given above are contributions to VINCI consolidated net income. They include VINCI's German subsidiaries VINCI Construction OHG and VINCI Bautec but do not include, in particular, goodwill amortisation related to reclassification of securities within the VINCI Group. page 5 A GROWTH TRAJECTORY all business lines, especially in major opera- tions and in services (real estate project devel- In 2004, VINCI Construction opment, water and waste treatment, optical ≤ outperformed the market in virtually fibre networks). At the end of 2004, Sogea Construction had an order backlog worth all sectors in which it operates, €2.2 billion, an increase of 24% over the pre- ranging from its historic markets in vious year. France, Western Europe, Africa, and the French overseas territories, to GTM Construction achieved spectacular activ- ity growth (15%) and more than doubled its the Central European countries where consolidated net income, which represented it has operated for the last decade 3% of net sales. Growth was particularly strong and world major project and in earthmoving (35%) and civil engineering specialised civil engineering markets. (20%); in building, growth far outpaced the market (4%, source: Ministry of Infrastructure). The GTM Construction order backlog at the end of 2004 exceeded €1.8 billion, an increase of 16% over the previous year. EUROPE FRANCE In the United Kingdom, where its diversified The substantial increase in activity in a mar- offering spans the full range of building and ket that grew only slightly has strengthened civil engineering activities, VINCI PLC also out- VINCI Construction's position of leadership. Its performed the market. The building division independent, multiple business line networks booked a record level of orders (€350 million achieved record performance in a demonstra- for 2005). To support VINCI PLC's expansion in tion of the high-quality expertise and local the facilities management market, carried out market roots that enable them to provide opti- primarily under public-private partnerships, a mum coverage of the full range of market seg- company was set up to bring together these ments. activities. Performing well across all its activities, Sogea recorded 10% growth in net sales and nearly 40% growth in net income. Activity was up in page 6 IN ALL THE GROUP'S MARKETS In Belgium, CFE tightened its management €350