Vinci: Double-Digit Concessions Growth Supports Higher Free Cash Flow Guidance

Narrow-moat Vinci grew revenue by 9% during the third quarter, supported by the ongoing recovery in passenger numbers across its airports. The defensiveness of its Concessions business, which tends to be resilient to macroeconomic conditions, was supported by impressive organic sales growth at its Energies and Cobra IS segments—10.6% and 13.5%, respectively. Management raised its outlook for its Autoroutes business and expects airport passenger numbers in the fourth quarter to be similar to prepandemic levels, which coincides with its upgraded free cash flow guidance of at least EUR 4.5 billion from between EUR 4.0 and EUR 4.5 billion. Shares are trading marginally higher but remain undervalued to our EUR 122 fair value estimate, which we maintain.