Market Outlook 2018
Looking at the global scenario, we see that infrastructure is a confirmed essential lever for sustainable development within a context of economic recovery. In a context where the global GDP growth was 3.0% in 20171, the construction market went from USD2.9 trillion in 2016 to USD3.2 trillion in 2017. It is expected to reach USD 3.5 trillion in 2018.
This construction market’s growth meets the ongoing demanding needs linked to megatrends like urbanisation, water shortage and infrastructure ageing. Mass urbanisation is leading towards the growth of megacities. It is therefore increasing the demand for highquality infrastructure connected to sustainable transport, like metros and railways.
The global population’s increase is causing the water shortage phenomena. It is linked to the ever-growing need to manage the lack of water resources through solutions like water treatment plants to manage and reuse water, desalination plants and purification plants, plants to guarantee existing water reserves and to generate electricity from renewable sources through hydroelectric plants.
There is also the need to renew infrastructure that is now obsolete in most parts of the developed world, while also seizing the opportunities that present themselves in emerging countries that are ready to invest in new high quality infrastructure.
In this scenario, Salini Impregilo opened 2018 with an excellent order backlog, confirming its global leadership in the water segment and continuing to develop its excellent track record in transportation. The main new projects won by the Group confirm the willingness to work in areas with a favourable profit and risk ratio, but also the will to continue to work in Italy.
The US market’s expected demand for infrastructure by 2015 will reach USD4.6 trillion.* The Group’s US market outlook calls for ongoing investments through Lane, including through new businesses, like Lane Power and Energy.
*Source: American Society Of Civil Engineers 2017 Infrastructure report Card and Failure to Act series, published 2011-2017
Financial Outlook 2018
The 2018 targets, compliant with IFRS 15 and unchanged compared to the 2016-2019 Business Plan, are based on EUR / USD exchange rate equal to 1.25 and transformation of new orders into revenues based on the historical standards of the industry.
For the future, the Group has set itself some strategic guidelines, among which: to keep the leadership in the water and metro sectors, while consolidating the position in the United States, the Middle East and Italy; Salini Impregilo also intends to increase its market share in the United States, and to reposition Lane for the building of large infrastructure projects; the aim is to reduce direct costs, optimise corporate costs and increase cash flow generation, to support the Group’s growth by strengthening its financial solidity.
The objectives defined may be influenced by unforeseeable exogenous factors that do not fall within the domain of management.