VINCI - 2005 annual report

The Group’s fi nancial structure continued to strengthen in 2005, with
equity (including minority interest) up from €3.6 billion to €5.3 billion
and gearing (the net borrowing to total equity ratio) of 30%, against
67% in 2004.
Provisions reported under liabilities (both current and non-current)
remained at a level equivalent to that of 31 December 2004, at
1.7 RETURN ON CAPITAL
Return on equity (ROE)
ROE, calculated on the basis of consolidated shareholders’ equity (excluding
minority interest) at the start of the period, was 28.9% overall for
2005, an improvement against the previous period. This refl ects the high
profi tability of the construction and civil engineering business lines, which
are not capital intensive.
(in € millions)
Shareholders’ equity
2005 2004
at previous year-end 3,016 2,662
Net profi t for the year 871 732
ROE 28.9 % 27.5 %
Return on capital employed (ROCE)
ROCE also increased against the level in 2004 despite the increase in
capital employed, as a result of continuing the Group’s policy of investing
in concessions. This positive trend takes account of the effect of equity
accounting for ASF over a full year in 2005.
The Group’s ROCE is the result of two very different activity profi les:
– very high ROCE in activities other than concessions (262% in 2005),
due to the combination of their low capital intensity (which is even
negative for VINCI Construction) and high operating profi tability;
€1.6 billion at 31 December 2005. Provisions for retirement obligations
amounted to €667 million.
Lastly, the working capital surplus remained at the very high level reached
in 2004, at €1.6 billion at 31 December 2005.
– a lower ROCE in Concession businesses (6.4% in 2005), which is
effected by the size of investments that are at the construction stage and
by concessions in their start-up phase (€1.6 billion in total), where
profi tability is still low.
(in € millions) 2005 2004
Capital employed at previous year-end 7,562 7,640
Capital employed at this year-end 8,481 7,562
Average capital employed 8,022 7,601
Operating profi t from ordinary activities 1,568 1,300
Other items (1) 91 66
Theoretical tax expense (2) (496) (387)
NOPAT 1,163 979
ROCE 14.5 % 12.9 %
(1) Group’s share of earnings of equity-accounted companies, dividends received and other fi nancial items
(excluding fi nancing costs, depreciation, amortisation and provisions, foreign exchange gains and losses,
disposal gains and losses, capitalised borrowing costs, cost of discounting retirement obligations, and
income from the equity swap in 2004).
(2) On the basis of the effective rate for the period (31.6% in 2005; 29.6% in 2004)..
2. PARENT COMPANY FINANCIAL STATEMENTS
The parent company’s net profi t was €716 million in 2005, compared
with €330 million in 2004.
3. DIVIDENDS
The net dividend proposed to the Shareholders Meeting is €2.0 per share,
up 14% against the €1.75 per share paid in respect of 2004 (€3.50 per
share before the two-for-one share split in May 2005). This represents a
yield, including tax credit, of 2.6% on the basis of the share price at 24
February 2006. The fi nal dividend of €1.30 will be paid on 18 May 2006.
REPORT OF THE BOARD
Expenses referred to in Article 39.4 of the French Tax Code amounted to
€15,062 in 2005.
The total amount that will be distributed to shareholders in respect of
2005 is estimated at €382 million. This is an increase of 33% against the
distribution in respect of 2004 (€287 million) and represents 44% of the
2005 net consolidated profi t (40% in 2004).
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