Vinci Closes Out 2021 With Record Free Cash Flow and Order Book; Shares Are Fairly Valued

Narrow-moat Vinci enjoyed a recovery across all end markets, albeit against a weak comparator, reporting 14% revenue growth, which was in line with our expectations. Investors will benefit more comparing the figure with 2019 levels, which is 2.8% higher despite Vinci’s prolonged recovery from airports. However, it was noticeable the airport segment reported a profit during the second half of 2021, which will allow Vinci to perform on all cylinders during the current year when air traffic improves. A recovery in industrial activity and demand for construction services were the main drivers behind the recovery, leading to a record order book and free cash flow growth of 32% to EUR 5.3 billion. Vinci’s reputation as a stable provider of capital was maintained. A EUR 2.9 per-share dividend was proposed, an increase of 32%. We reiterate our EUR 90 fair value estimate and view shares as fairly valued.