Implenia CEO: Hardly affected by the crisis in residential construction
Published: Monday, Nov 27th 2023, 11:40
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The crisis in residential construction in Switzerland and especially Germany has left Implenia virtually unscathed. Switzerland's largest construction group is sticking to all its short, medium and long-term goals, as CEO André Wyss says in an interview with the news agency AWP. Implenia wants to make its shareholders happy with a higher dividend.
The pressure on residential construction in Germany has intensified again in recent months, says Implenia CEO Wyss. "However, we are not very active in the residential market, so it hardly affects us."
Implenia is not feeling the downward trend in the market. In civil engineering, demand for infrastructure, mobility and energy buildings remains high to very high throughout Europe. "And the latest forecasts are still clearly positive. We are positioned precisely where demand is much more resilient in a fluctuating economy," says Wyss.
Implenia undertakes large, complex real estate and infrastructure projects, some of which are financed by public-sector clients. "And we are not seeing a decline in either Germany or Switzerland. On the contrary: our order book rose to a record level of CHF 7.3 billion in the first half of 2023. And we continue to see that our order book is developing well."
Implenia on course for annual targets
Implenia is on track to achieve its operating profit (EBIT) target of around CHF 120 million for the 2023 financial year, says Wyss. However, this means EBIT will be lower than the previous year's figure of CHF 138.9 million in 2022. However, the sale of major real estate projects in 2022 led to an extraordinary jump in profits.
Wyss is also sticking to his other targets for the end of the financial year: "We expect our equity ratio to rise to over 20% by the end of the year, compared to 18% in the first half of the year. And we also expect to be able to report a significantly positive free cash flow in the second half of the year after a negative free cash flow in the first half."
Shareholders should also share in the success. "We are trying to continue and even increase the dividend payment," says the Implenia CEO.
For the coming year, the Group CEO expects an EBIT margin of around 3.5%. "We want to further increase the equity ratio towards our medium to long-term target of 25%. And we plan to deliver a positive free cash flow." The financial targets for 2024 are to be announced on February 28. "But with our positioning and order backlog, we are certainly well positioned to make 2024 another good year."
Great potential for renewable energies
The production of renewable energies has great potential throughout Europe. "For example, we are involved in renewing the Grimsel dam or building reserve power plants," says Wyss: "The question is, how much of this cake can we take and how successfully can we do it?"
The business will be built up gradually. "We are not making any big moves. We're really taking a step-by-step approach," says Wyss: "We're not going to make big acquisitions and then suddenly become much, much bigger in this area, but rather grow organically with project acquisitions."
It is not possible to estimate how big the business will become. "We have no targets for inorganic growth. That would also be very dangerous," says the Implenia CEO. Then you would suddenly be driven by growth again and run the risk of losing sight of profitability.
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