OHLA - comment
OHLA's 5-year strategic plan is evolutionary rather than revolutionary, but it still could create problems in the longer term. The plan anticipates growth in the concessions business, concentrated on Latin America (and CEE). Previously, poorly executed construction contracts morphed into Concessions, and we have concerns that the same could happen again. The USD$1bn Brazilian contract announced today starts with a £140m initial project. The focus on construction growth in the US makes sense, given the better margins.
The 2029 strategic plan builds on the 2025-2026 targets announced during the equity raise. Revenue of €5bn (€4.2bn in 2024) implies a CAGR of <4%, a modest assumption. EBITDA growth from €160m to >€300m is over 10% CAGR; some of this will come from scale and greater US activity but will require strong execution by OHLA regionally.
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