Profits leap

19 March 2008

Total sales for the CE-100 companies came to € 334 billion last year, up +12% on the 2006 total of € 297 billion. It was a second year of double-digit growth for the top 100, reflecting buoyancy in the industry compared to the earlier part of the decade.

But much more significant this year was the sharp increase in profitability of the top 100 companies. The average operating margin in the sector increase more than one percentage point from 5,75% in 2005 to 6,92% in 2006. This was the best profitability has been in the sector this decade.

Construction output in Europe is put by Euroconstruct at about € 1400 billion, so the € 334 billion sales of the top 100 would equate to about a 24% share. FIEC estimates the industry's output to be lower at € 1065 billion, so the CE-100's share by this estimate would be about 31%. However, both estimates are likely to overstate the CE-100's share because of the fact that some companies listed have activities outside Europe.

On a bigger scale, economic forecasting company Global Insight puts the world's construction output at about US$ 4000 (€ 5480 billion), so the CE-100's share would be a little over 6%.

But whatever their share might be, it is clear the CE-100 is gaining ground. The annual revenues increase of +12% is well ahead of the +3,7% rise in European construction output Euroconstruct saw in 2006, and indeed ahead of Global Insight's figure of +3,1% for world construction growth. This clearly indicates that the large companies that make up the CE-100 increased their market share last year.

The average headcount of the 92 companies that report staffing levels was 17254 people last year, a +23% increase on the previous figure of 13999. This implies total employment of 1,7 million people among the CE-100 companies. According to FIEC, some 13,4 million people work in the European construction sector, which suggests that the CE-100 accounts for about 13% of the industry's workforce.

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