Productivity experiences a limited decline
The productivity indicator measures the own production generated by each employee of the company. Own production is understood as the turnover of a company, less subcontracting.
The changes reflect a trend of improvement for several years and the organizational efforts on sites.
In 2020, if we note a drop in productivity, the levels remain higher than those observed in 2016 with 214 k € / FTE on the Structural Work, 173 k € for the Second Work and 199 k € for the Public Works .
Added value is maintained in 2020
Added value (VA) expresses the increase in value generated by the company as a result of its current activities. It makes it possible to remunerate the actors of the company (staff, providers of capital, administrations).
In a downward trend since 2016, the year 2020 is however in line with the year 2019 (39,2% for Public Works, 38,9% for Secondary Works and 34,6% for Structural Works) , without too much effect of the COVID crisis on this ratio.
This is mainly explained by the ability of companies to adapt their purchasing policies in line with changes in turnover.
However, the increase in the price of raw materials and an activity under pressure in certain regions favoring strong competition between companies, continue to weigh on VA.
The weight of the workforce in the VA increases
With the COVID crisis and despite government aid, the ratio deteriorates significantly in 2020, erasing the effects of the efforts made in recent years.
Staff costs represent around 82% of the added value for Structural Work activities (vs. 80% in 2019), 77% for Public Works (vs. 75% in 2019). We mainly explain this by maintaining employment in the sector and significant needs at the end of the year, with increased use of temporary workers.
The drop in profitability
Since 2016, the recovery has been marked in all sectors. Unsurprisingly, profitability is declining in 2020 but remaining greater than or equal to the 2016 level. It reached respectively 3,0% for the Structural Work, 3,1% for the Second Work and 3,4% for the Public Works. .
Despite government aid, some charges could not be reduced, having a direct impact on profitability.
The increase in the share of losing companies
As a direct consequence of the fall in activity, in 2020, the share of loss-making companies increased significantly (more than 4%) across all sectors.
Increasing customer lead times
In 2020, the deadlines tend to lengthen and remain high at 83 days in the Structural Work, 84 days in the Sub-Work and 90 days in the Public Works.
This is explained on the one hand by a greater inertia on the part of the contracting authorities in the payment of their invoices, but also by a catching-up effect of certain sites at the end of the year, generating significant invoicing at the last quarter of the year and therefore the recognition of significant trade receivables on the balance sheet. This can also be explained by a relaxation of companies in the collection of their trade receivables, given the improvement in cash flow thanks to EMPs.
It should be noted that public customers, disputes over work situations, general and final accounts and withholding of unsecured guarantees always contribute to the increase in the accounts receivable of construction companies.
An improving financial structure
Quite counterintuitively, the financial structure of companies will strengthen in 2020, with a FP / CA ratio which improves across all sectors to a little over 20% for Finishing Work and Public Works and 16,4% for the Structural Work.
This is explained by the drop in turnover, but also by prudent management on the part of the directors, preserving for several years the result generated by the company in equity and in cash.
For Sylvie LOIRE-FABRE, Chairman of the Management Board of BTP Banque: “Over the period 2016 - 2019, significant actions were taken by companies in terms of productivity. While the high order books and regained margins augured for a very good 2020 for Construction, we had to face an unprecedented period with all the economic and social consequences that followed. The construction sector has once again proven its capacity for resilience, as evidenced by the first data from our study, which will be completed by the end of 2021 with the analysis of more than 30 balance sheets. "