Eiffage (AO) | Buy | In-line Q1 revenue (interesting divisional split) and guidance reiteration

Research evidence excerpt

Eiffage (AO) | Buy | In-line Q1 revenue (interesting divisional split) and guidance reiteration

Eiffage Buy | Target Price: EUR182.00

Company description Management

Eiffage is a French company that operates transport infrastructure concessions Benoit de Ruffray, CEO

along with a sizeable contracting business, mainly in Europe. Eiffage is organised Christian Cassayre, CFO

in 4 divisions, Concessions, Construction, Infrastructure and Energy Systems, the

last three of which constitute the firm's contracting franchise. The Construction Key shareholders

division also includes Eiffage's real estate development activities. The firm's Free float 79.50%

Employees 20.50%

main transport infrastructure concession is France's APRR toll road network.

Investment case Valuation methodology

Eiffage runs an integrated infrastructure developer model, in We value Eiffage using a sum-of-the-parts approach.

which contracting is a competitive advantage for concession We employ a DDM for APRR/Eiffarie, in order to capture lifetime

development. Its footprint is mainly domestic and its dividend streams, and use book value and capital employed

concession portfolio is underpinned by the stake in APRR. multiples for the rest of concessions.

APRR, more than half of the value of Eiffage Concessions, We value the firm’s contracting units on the basis of earnings

expires in 2036, raising questions about portfolio duration. This multiples. We use the metrics implied in the DCF models we run

led Eiffage to enter the airport sector and to take a position in for the contracting divisions of its peers as reference.

Getlink, which makes strategic sense but should not yield Risks to our rating

immediate results. A hypothetical recessionary environment in European markets