Vinci SA (NYSE: DG) Q4 2022 earnings call dated Feb. 09, 2023
Corporate Participants:
Xavier Huillard — Chairman and Chief Executive Officer
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
Jose Maria Castillo Lacabex — Chief Executive Officer
Analysts:
Sathish Sivakumar — Citi — Analyst
Gregor Kuglitsch — UBS — Analyst
Graham Hunt — Jefferies — Analyst
Presentation:
Xavier Huillard — Chairman and Chief Executive Officer
Good morning to you, one and all. Thank you for taking part in this little meeting. As as is our custom, I am with Christian Labeyrie in the room. We’ve also got most of the Executive Committee members including Jose Maria, chief of Cobra IS, who will be able to field questions later if anyone has questions in English.
First of all, to look at some pictures. They are very important. On the cover page, here, we can see the establishment in the North Sea, the first conversion platform, AC DC conversion built by Cobra with joint-venture Siemens Energy. As you saw in our press releases, we’ve got five others. On order, the last two are about twice as big as what we see here. Capacity is two times greater, more than two times greater than the capacity of the first two stations. We can come back to the point.
Now this picture, it tells us again that France won’t meet its carbon neutrality commitments by 2050 without a major and highly urgent effort to decarbonize roads, particularly motorways. We’re already working very hard on our VINCI Autoroutes networks, but the bulk of the work remains yet to be done and will require significant investments.
Now picture illustrating the acquisition of 29.99% of the OMA company, OMA, that manages a cluster of 13 airports in Mexico, including the Monterrey Airport, which alone has about half of the 23 million passenger — passengers booked by the cluster in 2022. This picture is an illustration of the signature two by the 55%, the company called Entrevias, which in-turn is the concessionary 570 kilometers of motorways in Brazil. A portion of this is being widened, 200 kilometers being widened, we’ll come back to the point.
Then many acquisitions at VINCI Energies specifically under the ICT component Information and Communication Technology through the takeover of ICT expertise that previously was held by the Kontron Company, operating in 11 Eastern and Central European countries. This further strengthens VINCI Energies Axians specialty, which means it will be achieving around EUR3.3 billion or EUR3.4 billion in revenue 2023.
This picture is an illustration of a major deal won by a COBRA which will begin work on the first land terminal to regasification of liquefied natural gas in Germany. As you know, Germany was highly dependent on Russian gas. So, urgently they quickly leased ships that could use to regasify LNG. Four or five of these were installed. But of course, that’s a temporary solution. Germany must build land regasification terminals to diversify sources of supply for its gas. We won the first one, simply because Cobra had already been working on this for many years and speeded things up further due to recent developments, particularly the war in Ukraine.
Now here we have a picture, which is an illustration of a major deal won recently by VINCI Construction. It’s a joint-venture with our Spanish our comrades from Ferrovial. They’re very serious, very good company. It’s design, build, contract for a significant portion of the new Toronto Metro Subway in Ontario. This will prevent 28,000 vehicles worth of traffic every day, which will mean a significant reduction in greenhouse gas.
Lastly, VINCI Immobilier will also make it in a timely fashion to deliver a major section of the Athletes Village. We’re showcasing this because it’s a beautiful example of urban regeneration in industrial brownfield.
To come back now to our achievements in 2022, VINCI is doing well. In 2022, we booked a strong growth in revenue and profits. Cashflow generation is at a record level. There has been a satisfactory — highly satisfactory renewal of our order books and growth in our environmental and social performance. This is an illustration of the resilience of our business model and especially our major ability to adapt as the case about 4,000 to business unit is highly adaptable. But firstly, Cobra IS is now very well-integrated. This is confirmed further that it’s a wonderful driver of growth and performance together with VINCI Energies which was already growing beautifully. If we put both of these together, we’re talking about energy branch making over EUR22 billion in revenue because they at the crux of major transformations afoot right now that are caused by the energy transition and the digital revolution.
Among other things, we are deploying Renewable Energy fields at our airports, our motorways and even at a bigger scale further and Cobra covered countries such as the Iberian Peninsula, as well as Latin-America mainly. The good news, our first renewable photovoltaic field of 0.6 gigawatts, 600 MW, will begin producing — generating green power as of 2023, and this is taking place in Brazil. VINCI Construction is reaping the benefits of this new organization, and most importantly, the benefits of its major, highly disciplined way of accepting order intake.
Next, is fairly spectacular recovery at VINCI Airports, which speeded up throughout the year. Further recovery continuing to 2023 for airports, good road traffic, motorway traffic held up well, especially in France and in fact, it’s now above levels observed before the pandemic in-spite of hikes in fuel prices.
And all-in all, we see net-debt going down significantly. The debt down by EUR3.1 billion over the three-year period in-spite of several major acquisitions such as Cobra OMA and further — over the past three years financial investments have been on the order of EUR8 billion. And in-spite of the EUR8 billion, our debt has brought down by EUR3.1 billion as we can.
Lastly, I’ll come back to the point quickly later. I thought I’d go methodologically. We rollout our environmental strategy and all of our employees joining on this. Important thing to see here is that all geographies are growing. North-America growing significantly, reaching around EUR5 billion, whereas, Latin-America, Europe and Oceania are also growing very satisfactorily. Of course, reaping the benefits of the strong positions that Cobra has as well in these various geographies.
All-in all, we can say that for the first time in our history, we’re making over half of our revenue outside of France, specifically around 45% revenues from France and the remainder from outside of France. It’s very much in-line with the strategic decisions we took around 10 years ago now. To delve into further detail on the business lines, VINCI Autoroutes light-vehicle traffic above the traffic levels in 2019, as I mentioned already, in-spite of increases in fuel prices. Furthermore, there were problems with fuel availability, which you all felt last fall in spite of little growth. This growth, well, part of it is due to the return of our foreign customers, our non-French customers. This is readily apparent several borders and several motorway sections.
Heavy vehicle traffic was already doing well in 2021. You’ll remember, it’s continuing to grow by 22% in 2022. All in all, this is beyond — the growth it goes beyond macroeconomic growth. This is to a large degree due to development of e-commerce. By way of illustration here, I’d mention basically a doubling in the annual pace of construction of warehouse logistics — logistics warehouses alongside our motorways. That’s a very good piece of news because it means it’s not all of a sudden that road shipping will take some other means of transportation, because now the logistics warehouses have been set-up alongside motorways, particularly near the hub areas of the motorways section. So it’s a done deal and this is something developed in a very big way particularly since 2015.
This illustration of our major efforts in decarbonization. 100% of our motorway rest areas at VINCI Autoroutes have electric recharging stations,1,750 charging points and an important thing is 1,400, these are ultra-rapid charging stations of over 150 kilowatt. Imagine people who can have their vehicles spending eight hours to way to be charged on a slow charge when you’re making a long-distance trip and you start at a motorway rest area.
Vinci Airports, I said the recovery is speeding up. Q4 2022 was just down 17% versus Q4 of 2019. Traffic more than doubled over the full-year period versus 2021. Several geographies and countries have already reached levels above or near the pre pandemic situation. The UK is recovering quickly. The Asia zone will be gradually reaping the benefits of the lifting of travel restrictions, particularly recent decisions made by China.
We had also observed that Significant work being done over the past three years on opex has made it possible to see a significant impact on EBITDA, which is even above the level of 2019. Net income was over EUR500 million. To tell the truth, it is much higher than we were thinking and actually saying a year-ago, thanks to all this. And in addition — and add it the fact that there is a cut in capex because we we’ve frozen a lot of capex during the pandemic. Not all capex, but much of it. So VINCI Airports free cashflow in 2022, goes beyond EUR1 billion. VINCI Airports also has environmental targets, they’re highly ambitious, targeting carbon neutrality in 2030. Several airports will reach this as of 2026, particularly we’re seeing a systematic rollout of PV farms whenever possible in airport areas.
We have resumed external growth at VINCI Airports, for instance, the signature 40-year concession for seven airports in Cape Verde to be closed towards mid-2023 then more recently we closed. So we’re now owner of 29.99% of the OMA airport cluster. Important to observe, traffic here, as of the last July reached the pre-COVID levels. So is it done deal.
Just like in our motorways, we’re seeing that there is a strong desire to commute, to travel to be mobile, it is very strong. And what’s striking in air traffic is this has remained very-high in spite of significant increases in ticket prices, which you all have noticed. On average 30% increases in airplane ticket process and that has not held back people’s desire to travel and be mobile amongst the citizenry.
To talk about VINCI Highways, this is motorways outside of France, plus other concessions. We’re seeing the same positive trends for traffic, particularly motorway traffic in Peru and in Paris. I’ll say Rail with SCA and then stadiums to — if you can say traffic, stadiums, particularly we’ve stepped the France, which is actively preparing to accommodate the Rugby World Cup in the fall of 2023, as well as the Olympics and Paralympics games in the summer of 2024.
Strengthening of our percentage stake in several assets such as the [Indecipherable] in Canada and Rion Antirion in Greece and the two bridges over the Tagus in Portugal. Full acquisition of the TollPlus company, we mentioned this last time I believe, they are an expert in strategic business lines, i.e. IT solutions for mobility. Then the acquisition of the 55% of Entrevias that I already mentioned to you.
VINCI Energies, a really truly beautiful, beautiful year at VINCI Energies. Revenue up again 11% even further speeding up revenue growth in Q4. Vinci Energies not only is growing, but is also further improving its EBIT margin risk, standing at 6.8% versus the 6.5% in 2021, which is truly remarkable and further illustrates, I believe, the power and robustness of our business model established — well-established on the mega-trend, which is energy transition and the digital revolution. These are mega-trends, which are going to be buoyant for quite some time to come. Furthermore, this is thanks to an excellent geographical diversification.
Lastly, VINCI Energies as always continues its strategy of growth through acquisition, 31 small, medium and sometimes biggest company has acquired and particularly in the ICT area from the Kontron group that I just mentioned a moment ago. The first successful year for Cobra IS and the Group and so it’s revenue, about 45% in Spain and 35% in Latin-America, and it breaks out basically into three main segments, first of all, Flow business. Flow business representing two-thirds of revenue. Important — it’s very important. This is a guarantee for stability and resilience.
Next come the EPC projects, engineering, procurement, construction projects. Their ever bigger scale, their turnkey, operations, requiring many types of expertise, think of the AC DC conversion power stations we saw on the first slide. Furthermore, the regasification, the LNG regasification plants we already talked about, we’re also talking about some very-high voltage, 200,000 volts transportation links for power in Brazil. Also, systems for transport, infrastructure management, such as winning deal in 2022 for the [Indecipherable] Tunnel.
Here, we also have teams working from VINCI Construction. This EPC portion, we can say, the size of businesses fluctuates more here depending on how things vary. We can — we’re in a very positive phase right now, many deals on offer to various companies, particularly Cobra. This is, once again, because we’re surveying the mega-trends to the energy transition and development of our transport, virtuous transportation, infrastructures such as subways, metros, and other types of mobility that are kinder to the environment.
Third segment at Cobra is to develop renewable energy production fields. The pipeline of projects under development standing at 15 gigawatts, the same figure as when I mentioned a year-ago. Not exactly the same, 14 and 15, you have to add to this two gigawatts. We now have all the authorizations, the building permit, the environmental permit, the permit to connect to the grid. This is two gigawatts. Some of this is the 0.6 gigawatts I mentioned to you earlier that’ll come on electricity production come online in 2023 plus 0.3 gigawatts also photovoltaic in Spain, which will see work beginning in 2023 and 0.6 gigawatts in Brazil, again photovoltaic, which should begin construction in the next few months.
All of this is an illustration, the two giga at maturity now, almost ready to build. And the pipeline, we’ve still got ahead of us, under development has replenished. So it is still a significant volume, 14 gigawatts. All of this is very much in-line with our roadmap. In fact, going beyond it, because we indicated to you one gigawatt per annum initially. It’s possible will be more in the neighborhood of 1.5 gigawatts, especially if you add the PV developments along our motorways as well as our airport assets.
New VINCI Construction is keeping — making good promises stronger activity in growing — growth of revenue of 11% — more than 11%, EUR29 billion, 55% of which, outside of France, the UK, France, the Czech Republic, North-America and Oceania. Important to point that out. We’re seeing a ramp-up of the major projects won previously such as one, the UK, it’s just due, and also a very good deal flow of big projects. And also a very good deal flow of small and medium deals and electrical engineering that’s important to have to make sure you’re highly resilient, all sizes. EBIT margin growing 3.8% and will continue to grow.
The key motto of VINCI Construction is selectivity. Selectivity more than ever before. We don’t talk about market share and volumes. We are talking about of striving for operational excellence and performance. The good news is the size and the quality of our order books give us the confidence, we need to know that we’re able to continue with this policy of being highly selective. Yes, order intake 2022 was very good. We can see it on the slide, up 12% excluding Cobra, up 32%, like changing the scope, i.e. including Cobra. On the right-hand side, we see a particularly significant harvest of orders outside of France. This order intake. Bigger in non French Europe and international outside Europe, then in France. Even in France, order intake is very good on the order of 10%.
Lastly, property development and the environment deteriorated here in residential property. Pretty abrupt shift from the previous situation where you had strong demand shift to the situation where we’ve got a scarcity of supply that’s priced in-line with interest rates. People’s purchasing power has been cut by increased interest rates. That’s on residential real-estate. And then we’re seeing very clear a wait-and-see stance is taken by investors in-office real estate wait and see by the investors over something around pandemic. So, housing housing unit reservations down by approximately 17%, even slightly more, significantly more in the most recent months of 2022, and according to initial figures of 2023, even though, obviously, we’re not going to disclose annual trends which is to say we are starting to move into a more difficult period when it comes to residential real-estate. However, there is a section of residential is doing well in niche, which we’ve begun developing, we’ve begun looking several years ago and now here I’m talking about serviced residences, both for students and seniors. This is particularly popular amongst seniors. These are not nursing homes. These are service departments for older people. These are not medical facilities. We are not in the same category as the other guys.
Another very important point. Something I think I already touched upon, VINCI Immobilier was the number one developer, the first developer to set a target for zero ceiling of soil by 2030 in net terms, which will make for a major transformation in property development. We will tend to focus on re — urban regeneration operations such as our new headquarters office or such as the Athlete’s — Olympic Athletes’ village that you saw earlier. No doubt about it. The property market will improve again in the future. We feel it’s going to see improvement fairly soon in residential because the country more than ever before needs new housing units, whether we’re talking about housing the people buy or housing to be rent — social — rented social housing. We have a problem in this country, if a major gesture is not made to boost increased construction of new housing.
I’ll hand over to Christian Labeyrie, who is going to report the figures to us.
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
Thank you, Xavier. So on revenue, lot has been said. Growth on close 25% at actual scope, EUR60 million in revenue, constant up 12%, strong increase in concessions, plus 30% on the back of growing track — traffic of motorways, the rebound of VINCI airports. VINCI Autoroutes revenue up 8%. VINCI airports more than double that of ’21, slightly above 2019 pre-COVID level. VINCI Highways essentially international order road activities in e-toll management activities, as you said the control of TollPlus in the U.S. in 2022 and the Prince Edward SCDI bridging Canada revenue up 55% in real terms, 24% like-for-like. VINCI Energies up 11% like-for-like, 8% accelerating quarter-after-quarter growth in revenue of VINCI Energies both France and internationally.
VINCI construction up 11%, like-for-like 8.5%, fully leveraging its international growth. Scope effect EUR5.5 billion, integration of Cobra IS acquisitions. VINCI Energies some 30 and 22, the most significant cemented at the end of last year. Kontron AG added to that of total 30 over the years, some 60 acquisitions contributing for about EUR260 million additional revenue in ’22. VINCI Concessions, the integration of the Canada bridge full-year, that’s EUR40 million, EUR26. million and EUR16 million in 2022. VINCI Airports integration since the first of January of the Amazon Airport some EUR50 million in ’23. We’ll have the integration of OMA for close on EUR500 million. Cape Verde about EUR30 million full-year, half for ’23.
Net impact of currency translation adjustments 1.5 that’s the Rev ruling at average rates, some 10% for the dollar as well as other currencies linked to the dollar.
Next slide gives you the split by geographic areas. Strong rebound in revenue versus ’21, driven by international operations plus 46%, plus 17% like-for-like, thanks to Cobra for the actual change. But growth in France is noteworthy, 6% pretty much on par with inflation but differences by business. VINCI Energies above 9%. VINCI construction below plus 2%, illustrates our selective approach at VINCI Construction.
In conclusion on this chapter, VINCI is accelerating the expansion of its international footprint, that’s in-line with one of our strategic goals set-out a long-time ago for first time over half VINCI revenue 55% achieved internationally, as against 47% last year.
Operating income from ordinary activities of each division. Overall, remarkable performance increases across businesses. EBIT of VINCI Highways over EUR3 billion, 52% of revenue topping its 2019 level just below EUR3 billion VINCI Airports thanks to accelerating traffic recovery throughout the year and drastic savings plans put in place during COVID sees its roper grow strongly with now reaching close on EUR1 billion, that’s pretty much the 2019 level. Other cause for satisfaction, EBIT of VINCI Energies, VINCI construction are up, coming in approximately at EUR1.2 billion, 30% better than in ’19. The operating margins of these two divisions continue to grow in spite of cost inflation and supply-chain difficulties in certain markets.
VINCI Energies operating margin reaches 6.8% of revenue, 30 basis-points higher than last year, 80 bps higher than 2019. Majority of our businesses and geographies at VINCI Energies contribute to this excellent overall performance strengthening VINCI Energies amongst most the best-performing companies in its sector. Cobra delivering EBIT of over $400 million, excellent margin, in-line with our expectations. Above 7% for VINCI Construction. Operating margin up 10 basis points versus ’21, 3.8%. That’s a good, even very good level given industry characteristics, size of the company, even if there is room for further progress and it’s a level never before reached at VINCI for over 10 years.
VINCI Construction margin reflects good performance in major projects, specialty networks, Soletanche facing a good profit margin internationally North-America, Australia, New Zealand. To preempt Jean-Christophe’s [Phonetic] question let’s flag that there are no material claims to be noted that would boost these results. As always, there are challenging work sites inherent to the business are also very good projects, HS2 in the UK. Well, the start-up of the FMA or the Greater Paris project and also finishing construction margin reflects the initial positive effects of the French reorganization into four subdivisions building, road works, civil engineering, specialty, hydraulics, earthworks, demolition. We can of course do better. Notably, U.K., Africa. So we can bank on continued improvement of VC margins going-forward.
Lastly, EBIT of VINCI real estate amount is more modest is also up on the year as well as the profit margin, as Xaveir said. This performance can’t necessarily be extrapolated going forward given the difficult climate in France. Moving along, the income statement. IFRS two to be related to a group policy. The 270,000 people, international head count more important, and we’re striving to — of profit-sharing systems linked to VINCI share capital contribution of subsidiaries consolidated equity. There are pluses and improvements in Japanese airports minuses because there are acquisition costs under this item. No — under the one-off items, no impairment test impact to be noted.
As regards the financial expenses bit surprising in terms of what you’re — and to slightly down 614 as against 658. The explanation is the rising interest-rate, hasn’t yet impacted a great deal in ’22. In fact, more in Q4, we benefited the positive rate-of-return on our cash. ’23 slightly to be less favorable, with rising interest rates full-year and also swap rate variability that in the right direction that is in the wrong direction last year.
Other financial items very positive, reflecting revaluation of our stake in ADP, let me say that since we no longer have a seat on the Board, ADP shuts mark-to-market, which has improved significantly in ’22 Hence, a positive impact in our financials and impacted Garratt tweak of the early redemption of certain loans under power generating a profit of ISO of those bond redemptions because Gatwick had the necessary cash to do that. Tax-wise, an increase in the tax bill. Higher than what’s shown here. EUR2.6 billion, we had an expense of EUR400 million linked to the revaluation of income tax in the UK, was purely book impact on our deferred tax. Strong increase in the tax expense for France, we’ve spent just over EUR1 billion tax on profits, the same amount to be added in terms of production tax in the income tax, over EUR2 billion in taxes, which puts us quite well in the list, the French tax payers. Net income after EUR4.259 billion. That’s a record, I’m sure of that. That’s EPS of close on EUR5.50.
Next slide is the change in the debt over a year. The free cashflow record free cash EUR5.4 billion, very much higher than what we could expect a few weeks before the end of the year. The last forecast was strengthened by Bloomberg consensus in November was EUR4.7 billion. We delivered 700 better of half for this gap comes, this variance comes from a strong level of cash-in towards the end of the down-payments, one received on the project in Canada, one in the final weeks of the year. That’s remarkable performance.
WCR improved sharply off-late in ’20 and ’21 during COVID because the admin teams were ready to call in receivables, but those benefits were not reversed in ’22. Our attempt to repeat this year, but it’s the case this year, we can’t consider. The ’23 cashflow level can be considered as normative going forward, all the more, the capex, be it Cobra to grow renewables in greenfield or VINCI Airports is set to rise Vinci Airports, in particular the ’22 capex is EUR200 million below what it was in ’19. Necessarily, there’ll be a catch-up in the lag here. Notably, Portugal, the U.K. and Cobra will continue to invest significant sums in renewals, about EUR400 million this year probably more going forward. Hence a normative cashflow.
To make a forecast out of risk of the order of EUR4 billion to EUR4.5 billion, but not necessarily more. EUR2.7 billion financial investment, that includes the acquisition of OMA for EUR1.5 billion at the end-of-the year, partially funded in Mexican peso. EUR600 million at VINCI Energies, over half Kontron that was the deal that was cemented at the end of last year. VINCI Highways about EUR300 million, if we include the consolidation of the debt of companies acquired. The Canada bridge previously not consolidated. About EUR100 million at VINCI Construction, essentially in North-America. Cash-out are turning to dividend and share buybacks in the cash effect of the debt linked to the mark-to-market of our exchange rate derivatives. All-in all, reduction of debt over a year EUR1 billion.
Next slide is the way in which free cashflow is crafted, quote-endquote, of the first part of the year. We don’t generate a lot of FCF up until July. It’s certainly after that that the curve begins to arrive with December that’s particularly significant. It has happened certain years that it even accounts 50% of the year’s cashflow. In ’22, it was 44%. It’s a lot more in certain businesses a lot more in ’21 35% in 2020, 51%, 2019 24%. Hence, the difficulty to give you a very accurate forecast especially at the start of the year. That’s due to very specific situation of receivables at the end-of-the year, notably at VINCI construction, energy and Cobra.
Putting things into perspective, next slide, on 10 years, we see that FCF generation at VINCI is rising incrementally very-high and recurring on average per year, cashflows improved 11% per annum. But seven — 17% over the last five years, that’s way above the increase in profit on the average, 8% of the period accelerating since ’18. As I said, once again, we can’t consider the levels reached in ’21, ’22 over EUR5 billion a normative. Reasons difficult to predict capex, both at airports and Cobra.
Balance sheet is of course very solid even more so, equity up EUR4.6 billion WCR, negative WCR. It’s free results, obviously that’s very appreciable that strengthen further. Our long-term assets coming in at close to EUR5 billion, that will increase by close on EUR5 billion, covering the large part of capex and acquisitions, reduction in net-debt by one billion as I said. Free cashflow above EUR9 billion same level even slightly higher than last year’s. So it means that if we reason EBITDA multiple, not necessarily the right reason often we do, the debt ratios improved because debt was 2.5 times EBITDA in ’21 and it’s down to a 1.8 in ’22. It’s a level that may not be viewed by some as optimal if we want to reason in optimizing cost-of-capital but we — except that, it’s a consequence of our prudence. It’s vital assset, gives us some leeway when it comes to M&A and also swiftness in our recovery since COVID.
Next financial policy. Well, you already know this. We attach great importance to liquidity, ability to mobilize resources if need be to reimburse our loans in ’22, we’ll reimbursed EUR2.6 billion maturing to optimize refinancing costs to pick the right time to position on the market. In ’22, we issued two bonds, one in all just ASF in October for VINCI, more recently in January this year for ASF, and also to seize M&A opportunities. Part of our strategy as we did say in December ’21 by writing a cheque to ACS closed on EUR5 billion to acquire Cobra, more recently at the end of ’22 take a 30% stake in [Indecipherable] to acquire Kontron at VINCI Energies.
All in all, over three years, we achieved EUR8 billion in acquisition. That’s a lot. Need to fund that in over four years. Over EUR16 billion in M&A debt reversals by VINCI. That’s an average of EUR4 billion per year, in spite of COVID. So have total liquidity, including unused credit EUR20 billion increased in ’22, estimated the uncertain period especially during the summer because of the Ukraine conflict, it’d be prudent to up our credit lines. We did that with the support of our banks for EUR2.5 billion. So we’re equipped to continue to meet contingencies, while continuing to expand.
Credit rating confirmed both by Moody’s and S&P’s appreciate the strengths of the economic model resilience, Business diversification, and our cautious management. Thanks to these good ratings, we can expect to continue to fund the company in good conditions even in the changing context and if rates aren’t quite what they were a year-ago.
As I said, we placed in ’22 two issues, one of EUR850 million at ASF, other of EUR850 million at VINCI, another at EUR700 at ASF. So the average maturity of our debt still around seven years, had conditions higher than what they were previously remain okay, given the current rate environment.
Cost to debt is the next slide. Slightly increased the weighted average in ’22 at 2.5%, that’s due to the charts on the right, given the cost of debt by currency. So you see in particularly euro debt, the three main currencies. Cost of debt has risen and that the weighting by currency has changed because we have a share of debt excluding Euro higher. We also have a debt excluding OECD. Strong currencies. Mexican pesos, Peruvian sol, etc. In spite of that, it remains pretty much okay. Difference between the rates on the right and left between two five is an average only. It doesn’t fully factor-in the full impact of rate rises and on the right, it’s the end of year. So we see what happened notably, at the end of years cross-currency with 200 bps increase as the various cost by currency. Thanks.
Xavier Huillard — Chairman and Chief Executive Officer
First of all, before talking about 2023, VINCI we all share — have this confidence that we’re very confident in the future, as Christian has said. And the reason for this is because our construction and energy and mobility business lines really placed us at the very core of major challenges in this world where we’re all about transforming cities, we’ll get back to the point later; digital revolution, all industries and human activities; decarbonizing transportation; developing green electricity in the energy mix; support, providing support for the emergence of low-carbon hydrogen for industry and large-scale transportation; also systematically tackling projects from the vantage point of preserving biodiversity and carbon footprint. It also means developing the circular economy.
On all of these subjects, we are very highly involved. We feel we are a solutions providers in all these areas to rise to all of these challenges, which we find very exciting as the case for all 270,000 of our employees, very enthusiastic. This really gives us a great deal of leverage for further future growth.
At VINCI Autoroutes, we are realistic. We accept the macroeconomic facts and also higher fuel prices, for all these reasons, we expect stable traffic at VINCI Autoroutes in 2023. At VINCI Airports on the other hand, what we are expecting is continued recovery in passenger traffic. Probably things will lag in Asia because Asia has just reopened more recently. So somewhat of a lag. Some forecasters worldwide are expecting resumption of traffic to pretend — pre-pandemic levels as the 2023 — 2022 sorry. We’re more cautious, we think we’ll be more towards 2024, but added ’23, ’24, what really change things in a big way. But anyway, continued recovery in traffic at VINCI Airports clearly leading to calculate in terms of impact on our business performance.
Onto VINCI Energies. We’ll continue to grow. All the while maintaining the high-level of EBIT merge and already booked in 2022. Cobra is — has a very strong order book, truly a record order book, probably the highest order book Cobra’s ever had on-hand in its history. This is where we expect growth of at least 10% in Cobra sales in 2023, all the while remaining top of the class in the profession in terms of EBIT margin.
Vinci Construction, as we said, our intention is not to grow at VINCI Construction, but to continue growing the EBIT margin by being even more selective. It may happen that the consequence of that discipline might cost too tiny, tiny tariff growth. We’re not targeting growth that there may well be growth. We’re going to be further improving our business performance though and EBIT margin, which is to say, all in all, for VINCI, what we’re expecting is renewed growth in revenue and operating income to a lesser degree than in 2022 compared to 2021.
As a comparison, our net income should be slightly above that of 2022 in spite of increased financial expenses that are crystal-clear that Christian has explained very clearly. With this great confidence, the Board of Directors met yesterday and decided to propose to our next shareholders’ meeting on April 13th, a dividend for 2022 of EUR4 per share payable in cash, including EUR1 already paid as an interim dividend. The remainder of EUR3 will be payable in cash on 27th April this year. The dividend will be taken into account the fact of the matter that you’ve seen, i.e., the rebound after crisis, the new profile of this group with further development of concessions, record levels of cashflow. This is also a way for us to demonstrate our confidence in the future.
Lastly, I won’t dwell on this, but let me just say that in the presentation, you can find firstly three slides that give you details on our environmental and social ambitions, how we’re making progress in this area, how we’re really bringing forward with us all of our employees take-away point. We’re very much on-track on our roadmap, particularly when it comes to our CO2 footprint down by 13% and also when it comes to using low-carbon concrete, our intention is, by 2030, to be using 80% low-carbon concrete or even better ultra low-carbon concrete. If you look just at France, we already stay at 30% usage of low-carbon concrete in all the VINCI Construction activities.
Another important parameter is recycling. The circular economy. We already stand at 46% using recycled growth beds for construction of motorways in France and a very large proportion of our aggregates and other elements are from recycled materials. At VINCI construction, our target is to reach 20 million tons in the next year. So we’re somewhat ahead of schedule on that particular point. Lastly, we gave you — this is a slide you’ve to be careful when you look at, we’re looking at our socio-economic footprint in France. It’s done by outside from, an independent firm called you Utopies [Phonetic]. We’ve asked them to do this analysis several times before. They use methodology which is very strong and sound methodology. It accounts not only our impact in France. In France, we’ve got our own business impact. But we go beyond our direct effects. We also have — they also study our indirect impact and we call the induced impact, i.e., the fact we pay taxes has a knock-on effect in terms of jobs because those taxes don’t just stay in the box at the Treasury Department, but they’re actually used to do various things such as build schools, health facilities, and so forth in the country. If you take into account all of these effects, direct, indirect and induced, we are supporting [Indecipherable] the term supporting around 1.6% of all jobs in France. It’s about 460,000 jobs, 463,000 jobs, representing 1.5% of the country’s GDP, another important parameter.
Based on the Utopian survey, if we focus again on France, 96.5% of our purchasing is done in France and out of that amount 50% purchased from small and medium-sized companies within our ecosystem. So again, the figures, possibly to the question because the modeling involved here is highly sophisticated, but the important thing is to track this to see what progress we are making in terms of our impact on the environment and society as a whole.
There you have it, that’s what we wanted to say to you. Now we’d be happy to field your many questions. We will respect our tradition. As you can well imagine. We will give the floor.
Yes, go ahead. Hello, everyone. I might disappoint Chris Joe, it’s not Energy this year compliance, but actually thinking of energy, VINCI Energies, Cobra as well as in our operations for yourselves, VINCI Energies congratulate 30 basis-points improvement in operating margin. Question, could we get more color. More information on the profits equation, in other words, is this by business line, ICT industry, are they explanation for the improved performance and the absolute margins or other geography considerations as well.
They come into play. Furthermore, we’re getting COBRA, I suspect, the margin above 7%. Is due to turnkey projects versus recurring business. Lastly, regarding our proprietary operations projects for your own account that are being developed will — has VINCI managed to control its purchasing and the cost of purchasing? I know that there were issues. I do believe for solar panels.
Questions and Answers:
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
Well, the problem with Jean-Christophe, is that labyrinth questions I’ll answer and let my colleagues, may be come in the good news with VINCI Energies is that it’s very uniform in terms of business and in terms of geography. In terms of business and and geography, both I’d say why, well, because the margin is psychological. If you decide to do 6.8, doesn’t happen at the drop of a hat. Everyone ends up by delivering six point — the margin is crafted in the mind.
Second thing, VINCI Energies is a huge amount of relatively small deals but with the systematic determination to seek out the technology value-added and not to follow deals which would have low-value added and that’s another way of boosting margins. So the risk of disappointing you Jean-Christophe, the margin is very uniform both vertically and horizontally. There is no business driving the others.
ICT business costs more than the others generally come at a higher price and over the long-term, tend to produce quite a good margin, but as long as you’re capable once again of refocusing them on the right segments and the good clients, that generally takes a bit of time after the acquisition.
Your second allusion would seem to indicate that the Cobra margin was in very large part coming from major EPC projects. I fail to see why you hold that belief. No, it’s the same as VINCI energies once again. The major projects have the advantage when they generate margins to rest that margin on big volume. The disadvantages when things go sour, then you see a decrease in the average margin rate. You need to ensure that the margin’s broadly equivalent across the two segments mentioned earlier. Fro –flow business, on the one hand, and big EPC on the other. If I were to give you a more complete answer, you may be right, insofar as cyclically EPC tends to generate slightly more margin than the Flow business segment, but it’s not set to last.
If my colleagues wish to add some value-added to my words, they’re most welcome to do so. No, have I said anything silly?
Xavier Huillard — Chairman and Chief Executive Officer
Of course, you haven’t. He is nice. He’s a nice guy.
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
No, of course, not. It’s uniform in countries and businesses. Not just in my mind, it’s a bit in my mind. I mean points as these really mega-trends, we’re also facing shortage and so we’re all the more selective because today there is a lot of solicitation also depending on that the lower great numbers that comes into play, depending on business sectors. Growth is more or less high, year-on year, and it can evolve. This year, we’ve seen a very strong momentum in industry driven probably by energy efficiency and rising energy costs, such that industry players need to invest in order to optimize their production, major projects, were less on major projects, but we see notably, there were issues in the tertiary major, fewer tertiary projects innovation. With our characteristic agility, we can grow all our business like for VINCI Construction, the aim is to be selective and to favor margin over volume.
Jose Maria, would you like to come in and maybe enlighten us on the price of PV panels, what’s true is that we’ve kind of delayed a bit the start-up of the construction of this first project in Brazil so as not to pay over the odds for the PV panels. What’s the situation?
Jose Maria Castillo Lacabex — Chief Executive Officer
Linking with the price of panels, you know that the — we bought in our last three years, more than three of PV panels. Then, we have some advantage, but it is a a fact that panels has increased the prices 20%, 30%, but it’s true that the prices of the energy has increased a lot. Then the PPAs prices are better, and we then mitigate the price of the panels, that rise of the price of the panels due to our position and we can balance this with increase of the [Indecipherable].
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
We don’t disclose margin. We’ve got about 4,000 entities been ever ending. The standard deviation of margins at VINCI Energies far narrow than at Cobra. In fact, we can do a lot better when the standard deviation will shrink more at COBRA units and geographies that have above par performance and others sub-par performance.
Next question. Hi, Barclays. Three questions, if I may. First to pickup up on what you expect for highways in ’23. Not surprised about your message of passenger cars, stability trucks, the amount — the numbers isn’t going to be a slowdown that could impact trucks more as we saw in more challenging macro situation in the past, if you could give us a bit more color on that. Second question on financial expenses in ’23. What type of increase should we work on of course, rates shifted a lot as of Q2, EUR300 million, EUR350 million, is that the order of magnitude, all other things being equal, excluding acquisition costs? Third question on Entrevias. So maybe I’m mistaken, I thought your appetite for South American highways wasn’t that great because of technical due dil issues. What did you see in this asset that makes you confident? Is it the kind of works aspect that attracts you? Particularly, you’re going to do the work, so other factors that came into play? Thanks.
On truck traffic, Pierre Coppey will correct me if I’m wrong, but what’s driving truck traffic is the growth in e-commerce. Unless there is a collapse in the e-commerce segment, truck traffic is said to level-off in our view, not declined significantly. I don’t know if I said this, but the logistics warehouses. So there’s not really any possible alternative to ship all the small parcels from the growth of e-commerce, they can only be shipped by road because the warehouses are longer roads. That’s the good news. Think I pretty much answered the question.
Pierre, do you want to comment on that? No, just to recall that 90% of freight goes by Road. Financial costs expenses. Please, Joe. Do you want to take that one? I think you’ve got a slide. I don’t know if it’s in the deck or if it will be in the annexes, gives you the share of variable-rate debt overall debt you can do the math you like depending on the assumptions that are yours or might be great change on average the years. It’s not easy to assess today. Answer to your question is easy. What show is still be scope effects because on the one-hand, we’ve integrated companies that weren’t previously consolidate — we recover that cost of debt numbers that weren’t the case accounted. So there’ll be OMER, of course, has it own debt, about 300 million, 400 million in pesos. That’s going to impact our financial expense plus the cost of acquisition for 1.5 billion. That will also impact our acquisition cost. That alone is far from negligible effect, but then as regards the additional costs of debt linked to rising rates on the variable-rate all depends on your assumptions. With that, you can do the calculations. I am not going to do the job in your state. We did it with a degree of prudence as always when we redo the math a bit more specifically. After the close, we see that our budgets were a little over cautious, but we can expect a significant hike in cost to debt in ’23.
Nicolas, on Entrevias, so trying to answer your question. First-off, Brazil is a country, part of the countries that have significant infrastructure needs, we’re seeing because we’re managing airports Salvador Bahia for five years, Manaus, and other ports in the Amazon, and it’s a country that has Federal State Administration works while we found our balance in the country. That’s the first part to the answer. Secondly, it’s a yellow field project, we of course audited the traffic segment that got in technical assistance and traffic and we’re maintaining a partnership with taking 55 with an investor Patria Brazilian Funds that has a contract track-record for the second segment. We won’t be the constructor, selective strategy. Brazil is now part of the countries where we going construct — will be concession and this entry and partnership in terms of contract. Well, so we’ve worked on airports, makes us confident the ground tour is the state of Sao Paulo, a very big and the elected Governor is the infrastructure minister who previously managed airports. So we’re in total confidence on this contract.
I would just add that our understanding and our confidence in this major country was strengthened by the fact that Cobra is — has been present there for a very long time and one including PPP very significant deals, high voltage lines shows, Maria will correct me if I’m wrong, Cobra will have already achieved 20,000, 30,000 kilometers of high voltage power lines in Brazil and has ahead of it has significant potential to continue to work on this segment given the mammoth needs brought about by the energy transition. So it’s a combination between the recent understanding that we have at VINCI Airports with the longer presence of VINCI and very historical powerful presence of Cobra makes us believe that this country is a good country in which to invest.
Xavier Huillard — Chairman and Chief Executive Officer
Yes, good morning. Thank you. From. Taking couple of questions. First of all, a brief question on slide 55. Operating cashflow. I’m wondering, operating cashflow at VINCI Energies, why was it divided by two cut in half in 2022? Next question. A few questions that are more about strategy. Growth through acquisition. External growth has resumed you reinvested in airports. What should our expectation be hence forth? You’ve got enough on your balance sheet, will it be further airports or in energy, will there be other focuses for your growth, particularly the United States. You’re well-established there and construction and concession, you’ve got all the know-how. There is an infrastructure growth plan. The pipeline over there. So what are Vinci’s infrastructure intentions for the United States. Lastly, do you have an update on the potential green capex plan extension of concessions, now that rates have been set?
I forgot to write-down, I saw you were looking at the slide, yes. Could you repeat the two-three points? First of all, slide 55, on operating cash-flow at VINCI Energies. Next, external growth. Where are we headed hence forth. And then the United States, infrastructure, any opportunities. He will be moving on for VINCI. And then the motorway concessions planned extension green capex, any updates.
I’ll ask Christian to comment on slide 55. I couldn’t find it. I’m looking it up. While cash-flow, Arnaud will build on this if necessary. 2021 cashflow was an outlier. Cash-flow was well above net income, but you can explain this. in 2020 and we’d have cash-flow levels that were way higher abnormal. So we’re now coming back to the norm. An additional planted at to secure lead-time for supply and secure, we had to do a lot of advanced purchasing of material and that worse WCR, but all in all, we’re in the neighborhood of record levels before the outlier years, the atypical years of 2020 and 2021.
On external growth. We’re not going to reinvent some new asset class or new business line, we’ve got enough. We’re going to be really focusing on areas of energy and concessions, our three main focuses land, mobility, and motorways, air mobility, airports, and now energy and generation of Green Energy. That’s enough. And we’re at the very beginning stages of things in that third segment.
The next question. We’ll refocus what geography to focus on. No doubt about it, the North American continent is a place we will need to investigate. I’d be more assertive than I might have been in the last 30 years, but we would recall for you that in the area of highways, for instance, we can say that the number of projects for concessions, motorways, highways in U.S. well, there’ll be some increase, yes, but not a huge thing. It’s not going to be potentially a major market. So we take a looksie cautiously.
In Airports, Nicolas, we’ll check if I’m mistaken, the concessions model for airports, full airports in the U.S., I don’t think we really have any sign that might develop in a large big way in upcoming years. Sometimes what happens is, the terminals might be on offer as a concession. We’re somewhat reluctant. It’s a little bit risky to just be responsible and shoulder the risks of a terminal within a much bigger airport hub.
As to decarbonized energy, yes a lot yet to be done. The Reduction Act is going to boost things, no doubt about it. A huge boost to anything related to the environment, particularly renewable energy specifically high — especially hydrogen in the U.S., but we have to move forward carefully, we have to be certain firstly. We fully understand and are well rooted before moving on to new projects, but yes, overall, we are going to be developing faster than previously in the United States and Canada. But of course, there we’ve already prospered quite well. So no new business lines and our focus in all likelihood, a greater focus on North-America, in addition to Latin-America, as well as Europe, which has been the case. I believe that I’ve covered most of the points.
The player and nothing really to say here. Why? Well, we did say this here in the past. Our whole strategy boils down to what. First of all, to make as many people as possible realize that we have a huge issue of decarbonizing our motorways in this country. If this isn’t dealt with right now, together, we’re not going to manage to meet the targets of carbon neutrality by 2050, especially. And this is how Tempur recent communication done by transportation regulatory authority, we can’t wait new concessions to take-over from the current months to then begin making powerful gestures to decarbonize. We’ve got started now, start tackling this now. 2030 will too late in the day to meet the deadline of 2050.
So we’re talking about this. Nothing specific to announce to you above and beyond what I’ve said already. We’re still explaining things. Last week, there was a very interesting symposium organized jointly with VINCI Autoroutes and the [Indecipherable]. So gradually, we’re disseminating this information we’re getting people to realize and understand, it’s urgent to demobilize mobility — decarbonized mobility.
Let’s talk about that, but if we talk about how to finance it.
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
Hi. We just have two quick questions. One quick and one rather more strategic. The first on the auto routes and the toll price changes in ’23. You announced a number of small or major support measures for your users notably reductions on short trips, will be the impact. Would it be material financially for you and a slightly more strategic question on expansion in renewables, you mentioned the fact you confirm the pipeline of 14 gigawatts of projects, saying that it’s evolved. Okay, there are projects that will enter production that are being replaced, but have you given up on certain projects or replaced certain projects? If yes, why? And lastly, still on renewables. If we look 10 years out, how do you view yourselves from that business and it’s a year — just every year that you’ve integrated Cobra, what you see as your competitive advantages in that business?
I’ll answer, let Jose Maria come in if he want to. A year-ago, we said we’d be capable produce one additional gigawatt per year. Today, we’re saying it’s probably a bit more than that. If we were to flow to number, forgive me if it’s not quite right, because it’s not the same year-on-year, I’d say closer to 1.5 giga. And then do the math over 10 years. No reason why this demand doesn’t continue to be there. 10 years at 1.5, that’s 15 gigas, we plan to retain them, even if it means, showing the capital with others with ACS because the company is set up to receive the assets developed from scratch by Cobra. Well, it means that in 10 years time, we’ll have something of the order of 15 giga, a bit more, if in the meantime we decide to go further and the gigawatt that can be developed on French motorways and 1.2 gigawatts potentially develop — that can be developed on our airports.
So — And that’s going to be heavy capex-wise, but it can generate good EBITDA gradually as of this year because we’re going to have the first field in-production. Our competitive edge is remain the same. What’s complicated in renewables is to develop from scratch, find the land that can be negotiated potentially with its owner, that can be quite readily connected to the grid, close to a station whose power is sufficient to receive the power you’re going to produce and that we sense it’s going to be not too difficult to develop in terms of environmental planning mission, which is a growing concern quite rightly.
What’s complicated, is that once that’s done, project engineering, of course, construction, we’re talking about PV, it’s not hyper sophisticated in terms of the technology and then production isn’t rocket science either. One final segment has to be sold that power, and we’re agile, Cobra’s agile, that’s to say. There are times when you have to sell some in the form of the PPA, because there is a strong appetite for electro intensive industrialists to secure their green power supply.
You may now in Europe, there are no longer PPAs available to offer the Electro intensive players, unless you wait for ’27 or ’28, there is a shortage of projects to meet the needs of PPA in green power from industrialists. So the key is to take them. It depends on the country, better regulated tariffs, sign a number of PPAs, but also to accept, we’re happy with that, to retain some of the power that we’re going to sell in merchant. That’s to say we’ll sell on the market. Need to be very agile. The good news is that Cobra is very agile when it comes to finding the right mix and possibly switching mix depending on changes in the market conditions.
So our competitive edge is there, it’s in the fact that we believe we have the right mix between a local understanding and global capabilities, so as to develop projects from scratch. Our purpose isn’t to buy ready-made fields, not saying that we’ll never do it as we did for the highways, but our purpose is first and foremost to develop ourselves and the strong expertise at Cobra on that, develop the fields ourselves takes time, but it generates higher IRR on the tariffs.
Hang on Jose Maria. Okay. So on the tariffs, we worked on the acceptability of the increase by doing three things differentiated application of the tariffs, depending on whether short trips or long trips we block, we managed to block 70% of trips under 30ks, that is near urban ring roads and all the short trips that is home to work trips. We increased from 20% to 30%, the rebate on the release highway subscription passes for frequent users, which obtained get a reduction of one regular trip and the e-release subscribers who pay their e-recharge 10% rebate secured as of May. We need to do the IT development. The costs stemming from all these is of a handful of millions.
Xavier Huillard — Chairman and Chief Executive Officer
We’re talking about 60,000 charging stations use electric. As I said earlier by mid ’23, we’ll have that number of recharging stations, electric. It goes well beyond the borders of motorways to give access and also payment for network recharging stations, that’s well beyond the number we have, the 70,000. Well beyond the number we have just on the motorways. And there will be a 10% price reduction on offer. That’s significant in terms of the service we’re providing to road customers broadly.
Now questions from the telephone. We’ll hear French language questions online first. Ladies and gentlemen to ask your questions please. First question from Stephanie from the Bank of Canada. Go ahead, madam. Thank you very much. Great results. First question on free cashflow. EUR5.4 billion this year. If I just in the presentation, you’re expecting EUR4 billion to EUR4.5 billion in the current year. Could you help us understand what the negative impact would be on WCR and capex increases?
The two items that will have an impact on free cashflow in 2023, could you briefly talk to us about capex in Portugal and over a month, two so, where things stand there? The second airport that you want to develop Montego and you’ve also talked. Elizabeth, next, dividend payout you usually have 35%, 50%, 22% to the ratio of 54%. Can our expectation be gradual increase over the years of the dividend payout ratio?
Next question on the stimulus plan for highways. Its stimulus significant. What about investment plans? [Indecipherable] has announced [Indecipherable] 10 million investments plan. Is this something you’re also working on? Thank you.
First of all, free cashflow. Complicated answer, therefore, I’ll give you some time to think about it right or not? No, the bulk of the difference, aside from the WCR, which is impossible to predict at this juncture due to earlier the fact we have interim amounts at the end of ’22 and have and ’23. Thinking of capex, we’ll handover to Nicolas. Maybe capex for Mexico, plus all the other capex that had been deferred. I don’t know if you’d like to answer on this one. We need Nicolas to get a microphone.
Under free cashflow 2022, you’ve got a major contribution from airports and that about it. During the COVID crisis, we’d cut works that weren’t compulsory, weren’t indispensable. So free cashflow for airports around EUR1 billion in ’22, whereas, it had been further negative in ’21. It’s true, we’ll complete some of the compulsory work like Belgrade will be delivered as foreseen, summer of ’23. We’ll also resume around EUR100 million worth of capex that had been postponed, there’ll be Gatwick, Portugal, some — pretty much worldwide order of magnitude. But in EUR200 million and EUR300 million in airport capex this year, we’ll be around EUR700 million and EUR800 million, the order of magnitude, but this is wholly normal. We’re coming back to the normative level. Specifically on Portugal traffic, very good in all the airport hubs, not only Lisbon.
Capex will be as foreseen, including existing airport at Lisbon. The Portuguese government has expected a strategic survey of the environment and it’s going to be ongoing throughout ’23. So they can select the best ways and means to continue with capacity in Lisbon. The solution, it’s interesting on the table, make best use of existing airports in the Montage basis. And you know that we’ve got an exclusive relationship once this solution has been opted for to perfect the solution to put it together with the government. So growth is bouyant end-of-the year, beginning of the year in Portugal. Growth is well above 19 at this juncture and we’re expecting — awaiting the results of that survey. It’s on time. You mean the deadline? By the end of 2023.
Thank you. Payout ratio is not exactly 54%, 53.5% actually. This is very much in-line with what we said just before beginning of the pandemic back at that time we said, we recognize the change in the Group’s profile considering the increasing proportion of concessions. The unchanging role for about 20 years of 50% payout, we realized that gradually that would need to be increased, that payout. You will remember, we had begun suggesting that for the dividend, pertaining to fiscal 2019. If memory serves, we were to payout a dividend equal to 52% payout, but we didn’t do that in the end, we didn’t pay-out in the end due to the subsequent to arrival of pandemic. We stood at 53%, now this just means that we’re coming back to the principal we’d already talked about back at the end of 2019.
Now as to how things will pan-out in the future, and it will all depend. It will depend on what we achieve and what our investment projects are in the meantime. Regarding talking about a masterplan contract. [Indecipherable] and a 2022. How did the major plan — the negotiate ASF after we had to as a bypass the Western — bypass Immobilier, end of 2022, we completed negotiation for the master contract Coffee route EUR400 million worth of investments. It needs to be brought before the ART as well as the State Council to be fully authorized and then we started ASF negotiations in for master contract similar order of magnitude under the rates tariff laws between the different portions at these rates specific percentages there. Thank you very much.
Thank you. We’re going to move on to questions from the telephone in English, this time. This is headsets if need be.
Operator
The next question comes from the line of Sathish Sivakumar from Citigroup. Please go ahead.
Sathish Sivakumar — Citi — Analyst
Hi there. Thanks again for the presentation. I’ve got two questions there. Firstly on the concessions, specifically in the airport. Can you — we are on the pricing negotiation with different portfolios for 2023. For instance in Gatwick, I assume it is RPA link, which has 12%. So what should we expect like an average pricing for ’23? And secondly, on the construction, any color on what is your exposure to civil contacts that in that business and what do you see like impact of into those contracts, and now any pricing mix mechanism over there too? Thank you.
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
Change in airport pricing. So for all our airports, we have tariffs that are not inflation indexed. I’ll spare you the details, very mechanized. We got 65 airports, but we now have quite clearly we’ve fully secured the tariffs in Mexico, Portugal, Gatwick and all those prices are fully in indexed on the country’s inflation. So it’s inflation slightly higher than what we see in France and then there are few exceptions, but for most of the tariffs, it’s also the case in Serbia, it’s fully inflation-linked and that’s already acquired authorizations in concessions the authorization of the granters or the regulator — obtained — have been obtained in the countries cited. On construction, the situation is that if you look globally, we are in a phase that’s very favorable to the growth in civil engineering, brought about by the needs for development and improved environmental performance of mobility infrastructure, land mobility, that’s why these part — we’ve treated a great number of projects in the four corners of the world, be it in Canada, the U.S., Europe, France through the Greater Paris projects in New Zealand, Australia, and I’m no doubt forgetting a few.
This mega-trend is set to continue. And it’s far in a way, sufficient to satisfy our activity and to allow us to have this systematically, selective approach, what we’re seeing is that once we’ve noted that the ability to achieve over achievement on these major complex projects, not necessarily can’t be extended, competition isn’t as keen as it was 10, 20 years ago. So we can be more selective, but also to proceed embedded conditions because only companies that are capable of having the engineering and construction assets to deliver these deals can submit a bid, so we are I would say in a favorable phase, not necessarily the case across all geographies in the world. In the U.K., we’re heavily invested in HS2, in France, we’re cyclically heavily invested in the mammoths investments for the Greater Paris four mega contracts in design and will be awarded, I don’t know, at least we’ll submit our bids for these four mega projects during the course of the year.
And looking further out, we will probably have a great many opportunities given the energy transition and the paramount need to develop nuclear power in our country, notably with as you know, major projects of eight 14 new-generation EPI plants under existing EDF site. So one, the volume is there; two, was selective; and three, the key is increasingly the ability to have the engineering assets and to deliver, which is favorable to companies such as ours.
Operator
Your next question comes from the line of Gregor Kuglitsch from UBS. Please go ahead.
Gregor Kuglitsch — UBS — Analyst
Hi, good morning. Thank you for taking my questions. I’ve got a few actually. So firstly on airports, you know your margin was not actually all-time high, EBITDA margin 59%, but your traffic is still below. So, I want to understand this that is expected to increase as traffic further recovers. The first question.
The second question is, I believe in Portugal, there was a bit of a dispute on the tariffs. Can you just sort of tell us what happened and whether you’re going to get remunerated. I think you’re under recovering of what you’re entitled to in the contract. The third question is the oilfield you bought at the end of last year. Can you just explain a little bit what happened, what your plan is, how much you paid for it? I believe it sort of shows up in different lines. And then finally, maybe a detailed question, I’m looking at the capex slide. Well, Cobra’s capex was quite high. I think, like EUR500 million. Can we just understand what’s going on there, what sort of a normal level, if you could just help us out a little bit. Thank you.
Christian Labeyrie — Executive Vice-President and Chief Financial Officer
Margin. So, if you compare 2019 to 2022, we didn’t have to four months of — the first four months of 2019, about Gatwick in 2019. [Foreign Speech] Sorry, I’m going to switch language. We didn’t have the first four months of 2019, which in ’22 are not so good months because the first four months of the year weren’t great with Omicron and not the best month. That’s the first point.
Secondly, the non-consolidated assets don’t included in revenue EBITDA. It doesn’t include Japanese airports, but with markedly higher traffic levels, we went from 56, 57 to 59 EBITDA between ’19 and ’22. So we are expecting going forward the recovery in traffic level, continued growth of the EBITDA margins, not always steady, but we’ve reached cruising speed and through M&A deals cause the EBITDA margin of OMA is also useful in the regards. So all in all, we’re looking at a rising trend of the EBITDA.
In terms of tariffs, in Portugal, what you saw, there were pretty technical discussions. Sometimes the rules for tariff hikes provide for certain metrics. Notably, safety, there’s a sub metric at the tariff for which the interpretation of the contract could differ. It’s not the key component and it doesn’t contradict what I said which is tariffs in Portugal approved across airports in particular that have Lisbon inflation indexed signed and granted. Sometime there is a little debate on one of the components of the tariff inflated to security and safety. That’s what you read in the media, but the tariffs finally approved our indexed on inflation in Portugal.
Xavier Huillard — Chairman and Chief Executive Officer
So regarding Cobra investments. I’ll hand over to Christian very quickly, and Jose Maria, if necessary, but let me just set. We have to look at it this way. What does it boil down to? We’ve got EPC activities, engineering procurement, and construction in oil and gas and we have had for a long time at VINCI Energies, also at VINCI construction. And very naturally, this was also the case of Cobra, we do not intend to fully halt those activities EPC. As I said it happens, on that deal in Brazil, we’ve got special contractual provision, we are paid for our endeavors not in oil, not in money. So don’t see this as our intention to branch out into oil production, but rather we intend to continue exercising our lines of business, engineering, procurement, construction and with the next requisite flexibility to adapt to the various contractual points that are on offer and the methods of payment that are offered.
I’ll hand over to Christian Labeyrie now, who will give you, if necessary, if he wants to give you some figures and then I will give the floor to Jose Maria, if he’d like to speak. I’ll try again and not get lost in the table because they have all replaced. If you put aside the oil operational talk about later. Capex 2022 for Cobra around approximately EUR500 million, you’ve to add concessions capex, that’s EUR150 million. Now, the renewable portion here would be broadly approximately EUR400 million, if I’m not mistaken, Jose Maria.
Now on the oil point, we bought assets, we didn’t buy a company, we bought assets. Booked cost in 2022 is approximately EUR800 million, approximately there’ll be an additional to be paid of EUR150 million approximately next year. The 800 million was more than offset by an advance payment we received in phraseology is by the offtaker, which is a British company that fully, fully-funded this acquisition. So this is a neutral impact actually it’s left a positive impact on our 2022, by the same token into 2023. There’ll be an additional advance we sold in advance as this is done in the oil industry. Portion of upcoming year’s production. So due to next year, this should have no impact or slightly positive impact. Next, operations, as said, we’ll generate its own income, it’s own cashflow and maybe we Jose Maria could build-on this to tell us how he sees the ramp-up of operation of this deal in terms of production. Just a couple of figures on possible production we generate revenue to cover works, construction.
Jose Maria Castillo Lacabex — Chief Executive Officer
We invest in this asset. We, as Christine said, we collect prepayment linkage with our capacity, with our technical capacity to obstruct and and a level of barrels. Then we have now and we are going to repay with the barrels to Shell. Shell have taken, we can say that. Then Shell buy the whole production of the field to us. With this prepayment, they pay us for the next five years of the production of the field and we have now the 7,000 barrels per day. We’re starting that and we think that we can go with our investments and with our knowledge to at least 20,000 barrels in next two years.
With that, we are going to go over, by far the prepayment that the Shell give us. This is a 100% fund and as Christian said, these must be — we must do an exercise of strategy in the future to see if we are going to put the Shell. For example, of others, as an investor, and we only remain as the operator of the field.
Xavier Huillard — Chairman and Chief Executive Officer
We have one last question in English.
Operator
Your last question comes from the line of Graham Hunt from Jefferies. Please go ahead.
Graham Hunt — Jefferies — Analyst
Yeah, thanks very much. I made them two short ones. Maybe just on Energies margins and the guidance, just wondering why perhaps not a little bit more optimistic here given the strong trends that you’re seeing in this business to go for slightly higher profitability in 2023, rather than defending the current position.
And then similarly on construction. Maybe just on why you do have the confidence to push for margin expansion there and maybe a bit more color on what the projects inflow, where you’re seeing higher margins and what kind of projects you’re seeing those in the construction business? Thanks.
Xavier Huillard — Chairman and Chief Executive Officer
Maybe we misspoke. In energy, we didn’t say we’d remain stable. We said we’d be growing both the VINCI Energies and at Cobra. We even said we’d grow by at least 10% for Cobra — at Cobra due to the scale of the order book, particularly the big deals in the order book, acquired during fiscal ’22. In addition we said operating margin at VINCI Energies should remain at the record level where it starts off from 2022. Cobra’s margin will remain among the top of the class. Top of the standards in the global profession. So you can do your own modeling based on that.
Regarding construction, we have to remember that in the world of construction. It’s always illusory to think you can grow revenue and margin at the same time and yet our view is that the current margin is highly satisfactory because it’s growing, but we haven’t yet reached the end of that effort. We feel we need to target operating margins above the 3.8% achieved in 2022. The only way to achieve this is to be ever more selective and to never target revenue growth. Revenue growth can happen after the fact as a bonus after adhering to your good principle, but not in addition. Any strategy designed to up margin via increasing revenues leads to problems and big disappointments in terms of merging. That’s quite clear. This is very much in VINCI Constructions corporate cultural — culture. [Indecipherable] said this right, and I’ll be corrected mistaken, but I think, 120,000 employees of VINCI Construction feel the same way.
Okay, as everyone finished their questions, thank you to you, one and all, and we can now meet over lunch. Thank you.