Risk factors

This chapter details the principal risks to which the VINCI Group’s various activities are exposed as well as changes in the year under review, which are summarised in the table shown opposite.

The level of criticality of each of these risks (high, intermediate or moderate) was determined on the basis of its probability of occurrence and the anticipated extent of its impact on the Group, in consideration of risk management procedures already in place.

2023 was a year shaped, among others, by monetary, macroeconomic and geopolitical tensions and uncertainties:
• The cycle of rising interest rates, initiated by the major central banks in 2022 to fight against inflation, gathered force in 2023. This tightening of monetary policy, unprecedented in its rapidity and magnitude, caused high volatility in bond markets. Sovereign rates reached levels not seen since 2006 in the United States and since 2011 in Europe.
• The first signs of an economic downturn – resulting from the aforementioned rate hikes – emerged in Europe, raising concerns aboutthe timing and extent of a possible recession.
• The war between Russia and Ukraine, which had begun in February 2022, ground on with no end in sight. Armed conflicts also broke out in other parts of the world, including Azerbaijan’s seizure of Nagorno-Karabakh from ethnic Armenian control, military coups in Niger and Gabon, and the intensification of clashes between Mali’s military and rebel groups. Lastly, the Middle East seems to be edging closer to a regional conflagration following the large-scale terrorist attack by Hamas in Israel on 7 October 2023. However, the Group’s exposureto these various geographies is not material.

In addition, it should be noted that inflation receded somewhat during the year, with supply chains and energy markets having returnedto a more normal footing compared with 2022.

Despite this tumultuous global environment, the VINCI Group’s performance in 2023 was outstanding. Its record-setting results illustrate once again the resilience of the Group’s business model, which combines complementary businesses, areas of expertise and cycles, a diversified geographic presence, and a selective approach to new business, as well as the relevance of the prudent and long-term perspective adopted for its financial and operational management. In particular, VINCI pays close attention to maintaining a good level of liquidity in order to cope well with unexpected circumstances and pursue its growth.

Although its risk profile has remained for the most part unchanged, the Group has noted upward trends in three risk categories over the past year:

Operational risks

• Energy and Construction businesses: successive geopolitical shocks have had a lasting impact on global economy flows and have madeit more difficult to predict either movements in goods and services or the behaviour of consumers and customers. The Group is fully awarethat the potential widening of the current conflicts poses threats to global governance, business development and the conduct of operations.
• Concessions business: the risk of an increase in the intensity of an armed conflict in the Middle East could cause disruptions for air traffic worldwide, well beyond the conflict zone, and a further rise in oil prices could slow trends in both motorway traffic levels and airport passenger numbers.
• Property development: in 2023, VINCI Immobilier’s business was heavily affected by rising interest rates, which have resulted inincreased borrowing costs. Combined with continuing high housing prices, this trend has caused a sharp drop in consumer demand acrossthe residential sector. Meanwhile, investors are demanding higher yields and a number of projects have been cancelled or postponed.The context had a considerable impact on this business line’s financial performance by 2023.

Legal risks (legal and regulatory compliance)

France’s Finance Law for 2024 has introduced a 4.6% levy on revenue generated by companies operating long-distance transportinfrastructure. Its impact for the Group, based on 2023 revenue of the entities concerned (ASF, Cofiroute, Escote and A.roports de Lyon),is estimated to represent an additional expense of €272 million (including €268 million for the motorway concession subsidiaries). The VINCI subsidiaries affected by the new measure will use all available means to oppose Article 100 of this law, since it is contrary to the spirit and the letter of the concession contracts signed with the French state as grantor, which include tax neutrality clauses.

In Mexico, the civil aviation agency has unilaterally introduced several changes to the tariff base regulation set forth in the concession contracts for the country’s airports. However, these tariff changes are expected to be partly offset in particular through supplemental tariff increases to be granted in the future and the staggering of certain investments. The net impact on VINCI’s portfolio of Mexican airports operated by OMA should thus be limited.

Workforce-related and social risks

The various conflicts described above – against the backdrop of an increasingly unstable world divided into several blocs – expose the Group to heightened risks relating to the safety and security of employees, partners, subcontractors and other Group stakeholders, especially in the regions close to these geopolitical hotspots.

In addition, the current crisis affecting the property development sector in France could lead to a deeper housing crisis if governmentauthorities do not rapidly recognise the full extent of the situation. Such a turn of events could worsen the already apparent social tensions in the country. In this context, the Group places great emphasis on maintaining its close ties to and its social engagement with local communities.

^*Level of risk determined on the basis of the monitoring frequency and extent of impact (high, intermediate or moderate).