FULL REPORT: The world's 200 largest construction companies

07 August 2008

Vinci was the world's largest contractor in 2007 according to the results of International Construction's annual ranking of the worlds largest construction companies. Fellow French company Bouygues maintained its second place, but further down the top 10 there were major changes.

New in third position is Spain's ACS, rising two places from fifth last year. The company pushed the largest US company in the ranking, Bechtel, down one place to fourth.

Fifth and sixth places are taken by Chinese contractors, with China Railway Construction Corporation taking a huge leap up 17 positions from no. 23 in last year's rankings. Also new to the top 10 this year is China Communications Construction Group in ninth place.

Spain's Ferrovial is the other new addition to the top 10, in eighth position, while Hochtief and Skanska lost places compared to their rankings in last year's edition of the table.

For the first time in the league table's history, there are no Japanese companies in the global top 10. The highest placed this year was Kajima - last year's eighth placed company - at no. 14. Taisei also fell sharply, ranking at no. 17 this year, compared to no. 10 last year.

But the biggest fall from last year's top 10 was for Lennar of the US. The house building specialist was ranked seventh in last year's rankings, but this year has been placed at no. 31, some 24 places lower.

Massive losses

This is just one of the symptoms of the residential construction crash in the US, which has seen operating profit margins for the 44 US companies in the global top 200 fall from 6.52% last year (based on 2006 results) to an operating loss of -5.08% 12 months on.

Not all US companies are in trouble. Companies like Fluor, Jacobs and Peter Kiewit, which operate outside the residential market imprved their positions in this year's table. However, there are 15 specialist US housebuilders in the Top 200, and it is these that did the damage.

Total revenues for these companies was US$ 76.7 billion in 2007, a massive -30.7% decline on 2006's figure of US$ 110.7 billion. But more dramatic was the change in profits. In 2005, at the height of the residential boom in the US, these companies had an operating margin of 17.7%. That fell to 8.2% in 2006 when things started to cool, but in 2007 the figure crashed to -13.7%, which is to say these 15 companies made losses totalling US$ 10.5 billion.

This is what pulled the overall profit figure for US companies into the red in this year's analysis. It also had a major impact on the profitability of the sector as a whole.

The overall operating margin for the 100 largest construction companies fell to 4.82% this year, from 6.20% last year (based on 2006 figures). This was the lowest it has been since 2003, and the fall occurred despite a +15% increase in revnues for the top 100.

Falling revnues for many US companies was a big factor in shaping this year's league table, with 21 of the 44 US companies listed losing places since last year.

More striking though has been the decline of Japan's construciton companies over the last 12 months. Only three of the Japanese companies listed improved their standing compared to last year, while one maintained its position and 31 lost places. Profitability also suffer - in last year's report on the Top 200 contractors, Jpaanese companies had an average operating margin of 2.86%. In this year's analysis, that already poor figure has weakened to 1.93%.

Risers

But if 52 of the 79 US and Japanese companies in the Top 200 have lsot ground over the last year, this means other companies must have benefited.

The first group to mention is the Chinese contractors. All nine in the Top 200 have improved their positions compared to last year, and as previously noted, there are now three inside the top 10.

Equally impressive has been the performance of the Spanish contractors. There are now 11 in the Top 200, with Aldesa being ranked for the first time, and nine of the remaining companies improved their positions on last year. ACS and Ferrovial are in the top 10, while FCC moved up 14 places to no. 11 over the last year.

As well as growing revenues, the Spanish contractors have improved their porfitabiility over the last year. In the analysis 12 months ago the overall operating profit margin for this group was an impressive 10.10%. However, this has improved even more to 12.28% in this year's ranking.

Like Spain, many of the Euro zone countries saw their contractors rise up the rankings this year, and one reason for this was the appreciation of the Euor against the Dollar during 2007. In 2006 iC used an exchange rate of € 1 = US$ 1.257, which was the average for the year. However, the average for 2007 was € 1 = US$ 1.369, which was the figure used to calculate the latest rankings.

If the Dollar had held its ground against the Euro last year, most of the European companies in the Top 200 would be one or two places lower. Overall, the appreciation of the Euro added US$ 31 billion to the total revenues of the Top 200.

Record revenues

Total revenues for the Top 200 contractors broke through the US $ 1 trillion mark for the first time last year to reach a figure of US$ 1144 billion. Last year the figure was US$ 992 billion, for a year-on-year increase of 15.3%.

As well as organic growth, several mergers and acquisitions in the industry have helped to drive up revenues. In the UK alone, famous names like George Wimpey and Alfred McAlpine have disappeared this year, following their acquisition by Carillion. Amec is also absent, following the break-up of its construction business.

With a handfull of US and Japanese construction companies falling off the bottom of the table, these factors have combined to make space for some new names in the Top 200 this year. There are a total of 15 new players in the league table this year from 13 different countries.

Many of these newcomers are from what would be described as developing countries including Egypt, India, Mexico and Thailand. But while these contractors may be moving up the rankings, they are yet to trouble the giants of the mature markets.

Besides the six Chinese contractors in the top 100, it contains only five other companies from developing world countries. The highest placed is Turkey's Enka at no. 60, followed by India's Larsen & Toubro E&C (no. 72), Brazil's Odebrecht (79) and Andrada Gutierrez (87) and Israel's Africa Israel Investments (96).

In fact companies from the developed world dominate the picture - 178 out of the Top 200 come from the EU, US, Australia, Canada, Japan or South Korea. The remaining 22 are drawn from nine emerging markets - China, Brazil, Egypt, India, Israel, Mexico, South Africa, Thailand and Turkey.

Oddly, companies from the emerging markets are on average larger than their developed world counterparts. Mean revenues last year for the 178 developed world contractors were US$ 5.6 billion, compared to US$ 6.7 billion. However, the picture is a little distorted by the presence of China's massive contractors - nine former state industries with average annual revenues of US$ 12.3 billion and a total workforce of just over 1 million people.

Taking Chinese companies out of the equation, and the average size of the remaining 13 emerging market contractors falls to US$ 2.9 billion revenues last year. This illustrates the gap that exists between construction companies in mature markets and their peers in the world's emerging economies.

Health check?

For the last five years, the prospects for the construction industry have been bright, based on analysis of our league table of the industry's 200 largest companies. But can the same be said this year?

Profits in the industry fell dramatically in 2007 - not just because of the crash in US house building, but also due to weakening profitability in other major markets. With the US arguably in worse trouble than it was a year ago and construction slowing in other major markets like the UK and Spain, next year's Top 200 league table and analysis could make for grim reading.

FULL TABLE: The world's 200 largest construction companies

Position Company Country 2007 Position Change
1 Vinci France 1 -
2 Bouygues' Construction Divisions France 2 -
3 ACS Spain 5 2
4 Bechtel US 3 -1
5 China Railway Group China 6 1
6 China Railway Construction Corporation China 23 17
7 Hochtief Germany 4 -3
8 Ferrovial Spain 11 3
9 China Communications Construction Group China 14 5
10 Skanska Sweden 9 -1
11 FCC Spain 25 14
12 China State Construction & Engineering (CSCEC) China 13 1
13 Eiffage France 21 8
14 Kajima Corporation Japan 8 -6
15 Fluor US 17 2
16 Strabag SE Austria 22 6
17 Taisei Corporation Japan 10 -7
18 Daiwa House Japan 18 -
19 Obayashi Corporation Japan 20 1
20 Shimizu Corporation Japan 16 -4
21 Sekisui House Japan 19 -2
22 Saipem Italy 32 10
23 Balfour Beatty UK 28 5
24 Lend Lease Australia 33 9
25 Acciona Spain 35 10
26 Bilfinger Berger Germany 29 3
27 Bam Group Netherlands 27 -
28 China Metallurgical Group (MCC) China 36 8
29 D R Horton US 12 -17
30 Technip France 34 4
31 Lennar US 7 -24
32 Aker Solutions Norway 37 5
33 Taylor Wimpey UK 40 7
34 Pulte Homes US 15 -19
35 Takenaka Corporation Japan 31 -4
36 KBR US 30 -6
37 NCC Group Sweden 38 1
38 Jacobs Engineering US 39 1
39 Leighton Holdings Australia 41 2
40 Centex US 24 -16
41 Sacyr Vallehermoso Spain 49 8
42 Daelim South Korea 67 25
43 Laing O'Rourke UK 60 17
44 GS E&C South Korea 47 3
45 Carillion UK 53 8
46 Daewoo Engineering & Construction South Korea 46 -
47 VolkerWessels Netherlands 54 7
48 Sinohydro China 70 22
49 Hyundai Engineering & Construction South Korea 52 3
50 KB Home US 26 -24
51 Haseko Japan 42 -9
52 Peter Kiewit US 58 6
53 Barratt Developments UK 66 13
54 Persimmon UK 51 -3
55 SNC-Lavalin Canada 65 10
56 Emcor Group US 59 3
57 Shaw Group US 62 5
58 McDermott International US 75 17
59 Consolidated Contractors Company (CCC)* Greece 55 -4
60 Enka Insaat Turkey 68 8
61 Obrascon Huarte Lain Spain 69 8
62 URS Corporation US - NEW
63 NVR US 43 -20
64 Chiyoda Japan 91 27
65 Heijmans Netherlands 84 19
66 Foster Wheeler US 87 21
67 YIT Corporation Finland 73 6
68 Petrofac UK 149 81
69 Hovnanian Enterprises US 44 -25
70 SPIE France 82 12
71 Peab Sweden 74 3
72 Larsen & Toubro E&C India 108 36
73 JGC Japan 57 -16
74 Toll Brothers US 45 -29
75 Perini US 99 24
76 Kinden Japan 72 -4
77 PCL Construction Group Canada 77 -
78 Doosan Heavy Industries & Construction South Korea 85 7
79 Construtora Norberto Odebrecht* Brazil 89 10
80 Chicago Bridge & Iron US 97 17
81 Sumitomo Mitsui Construction Japan 64 -17
82 Morgan Sindall UK 110 28
83 Kier Group UK 94 11
84 Cegelec France 81 -3
85 Whiting-Turner Contracting US 98 13
86 Maeda Corporation Japan 76 -10
87 Andrada Gutierrez Brazil 133 46
88 Kandenko Japan 80 -8
89 Toda Japan 78 -11
90 Ed Züblin Germany 96 6
91 Nishimatsu Corporation Japan 71 -20
92 Walsh Group US 126 34
93 Parsons Corporation US 93 -
94 Impregilo Group Italy 92 -2
95 Alpine Bau Austria 105 10
96 Africa Israel Investments Israel 200 104
97 Clark Construction US 114 17
98 Beazer Homes USA US 56 -42
99 Interserve UK 115 16
100 Misawa Homes Holdings Japan 86 -14
101 Nippo Corporation Japan 83 -18
102 Structure Tone US 119 17
103 Isolux Corsan Spain 121 18
104 Veidekke Norway 116 12
105 Shanghai Construction Company China 179 74
106 Nexity France 125 19
107 Aveng South Africa 124 17
108 TBI Holdings BV Netherlands 118 10
109 Babcock International UK 151 42
110 Porr Group Austria 120 10
111 Ryland Group US 63 -48
112 Penta-Ocean Construction Japan 109 -3
113 Lemminkäinen Finland 129 16
114 Fujita Japan 100 -14
115 Brookfield Multiplex Australia 104 -11
116 M D C Holdings US 61 -55
117 Standard Pacific US 79 -38
118 McCarthy Building US 122 4
119 Galliford Try UK 169 50
120 Toyo Engineering (TEC) Japan 143 23
121 Tecnicas Reunidas Spain 171 50
122 Granite Construction US 102 -20
123 Maire Tecnimont Italy - NEW
124 Bellway UK 128 4
125 Tousa US 111 -14
126 Tokyu Construction Japan 113 -13
127 Boskalis Westminster Netherlands 156 29
128 Murray & Roberts South Africa 153 25
129 Hensel Phelps US 155 26
130 Kumagai Gumi Japan 106 -24
131 Jan De Nul Belgium 176 45
132 PanaHome Japan 117 -15
133 J.E. Dunn Group* US 127 -6
134 Black & Veatch* US 131 -3
135 Miller Group UK 130 -5
136 Samsung Engineering South Korea 139 3
137 China Railway Erju China 161 24
138 Meritage Homes US 88 -50
139 Guangsha Construction Group* China 145 6
140 Van Oord ACZ Netherlands 144 4
141 John Sisk & Son (Group) Ireland 175 34
142 Okumura Corporation Japan 141 -1
143 MT Hojgaard Denmark 148 5
144 Gilbane Building US 101 -43
145 Grupo San Jose Spain 142 -3
146 Zachry* US 146 -
147 Mota-Engil Portugal 154 7
148 M.A. Mortenson US 183 35
149 Swinerton* US 150 1
150 ICA Mexico 140 -10
151 Compagnie D'Entreprises CFE Belgium 174 23
152 Besix* Belgium - NEW
153 Doosan Industrial Development South Korea 137 -16
154 Hunt Construction Group* US 157 3
155 Implenia AG Switzerland 147 -8
156 Yates Companies US 152 -4
157 Keller Group UK 158 1
158 Punj Lloyd India - NEW
159 Wates Group UK 166 7
160 ROK UK 198 38
161 Technical Olympic Group Greece 107 -54
162 Kaufman & Broad France 165 3
163 JM Sweden 163 -
164 TIC Holdings* US - NEW
165 Hazama Japan 136 -29
166 Dongbu South Korea 170 4
167 Berkeley Group UK 159 -8
168 Swietelsky Baugessellschaft Austria 185 17
169 Astaldi Italy 188 19
170 Toa Japan 164 -6
171 DEME Belgium 184 13
172 Ballast Nedam Netherlands 162 -10
173 Austin Industries US 194 21
174 Asanuma Japan 138 -36
175 Redrow UK 181 6
176 Bowmer & Kirkland UK 195 19
177 Comsa Spain 191 14
178 Aldesa Spain - NEW
179 Strukton Groep Netherlands - NEW
180 Fukuda Japan 172 -8
181 Bauer Germany 199 18
182 Tekken Corporation Japan 168 -14
183 ISG UK - NEW
184 Maeda Road Construction Japan 178 -6
185 Keang Nam Enterprises South Korea - NEW
186 Costain Group UK 186 -
187 Homex Mexico - NEW
188 Dura Vermeer Netherlands 193 5
189 Zenitaka Japan 180 -9
190 Ssangyoung Engineering & Construction South Korea 182 -8
191 Teixeira Duarte Portugal - NEW
192 Takamatsu Japan 177 -15
193 Italian-Thai Development Thailand - NEW
194 Daiho Japan 189 -5
195 Arab Contractors Egypt - NEW
196 Arcadis Netherlands 173 -23
197 Corporacion Geo Mexico - NEW
198 Max Boegl Germany 197 -1
199 Aecon Group Canada - NEW
200 Tobishima Coporation Japan 167 -33
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