How the major European construction and engineering companies are managing the economic downturn
+23%
Average growth in turnover
Major European construction groups
Between 2007 and 2011
"After an already significant recovery in 2010, by the end of 2011 our order book had reached a record level of 30.6 billion euros, an 18% increase in one year. The visibility we achieve through our order book and our operating model means we can approach 2012 with confidence."
Xavier Huillard, CEO VINCI
Extract from the 2011 reference document
Introduction
Since the 1990s, major companies within the Construction and Public Works sector have tended to focus on adding value and stabilizing margins. They achieved this through diversification and an increase in activities such as facility managementYet despite the unfavorable economic backdrop, the ongoing strategy to diversify activities saw major groups within the sector withstanding difficulties brought on by the financial crisis. And while margins decreased slightly they still remain significantly higher than those achieved prior to the 2000s, when the sector began a new upward cycle.
From 2007 to today the favorable performance of major companies has been linked, in particular, to the strategies implemented before the crisis and to the considerable and ongoing diversification of their activities.
Methodology
This study is based on the reference documents and presentations of seven companies listed on the European markets, from whom occasional restatements were taken for consistency and readability purposes. For sector and macroeconomic information, the study is based for the most part on data from the Euroconstruct network*.
To facilitate comparisons, the activities of the Construction and Public Works groups have, in some cases, been divided into four main categories:
- Construction and Utilities.
- Real Estate
- Concessions
- Other sectors of activity
The construction sector is, overall, a very broad sector and the major listed European groups account for barely 10% of all activity in the sector.
This study is based on the 7 major European Construction and Public Works companies, each leaders in their market: Vinci, Bouygues and Eiffage for France; ACS for Spain; Strabag for Germany, Austria and Central Europe; Balfour Beatty for the United Kingdom; and Skanska for Northern Europe.
Table of contents
- Backdrop: 10 years of growth wiped out by 4 years of crisis
- Transition: Major European companies enjoy a relatively calm journey through the crisis
- The Future: Recovery ahead?
