Eiffage, France's third largest contractor, has named its 71-year-old founder and retired chief executive Jean-Francois Roverato to stabilize company leadership following the sudden death last month of Chairman and CEO Pierre Berger.
The 47-year-old suffered a fatal heart attack at his home in a Paris suburb on Oct. 23. He had led the $14-billion global firm since 2011.
The firm's board on Oct. 26 said Roverato, 71, who now is vice chairman, becomes Eiffage chairman, and deputy CEO Max Roche, 62, is interim CEO until a permanent replacement is named in February. Roverato had led the firm for 35 years.
Phillippe Soullier, a French management consultant, noted in an online Le Figaro article that "it is essential to reassure quickly" the firm's shareholders, customers and suppliers, and "to appoint a transition manager to allow employees to focus on operations" while avoiding "internal wars of succession."
Berger, a rising star at rival French contractor Vinci who Roverato tapped for Eiffage's management team in 2010, was named chairman in 2012. “His exceptional human and professional qualities were crucial to the development of the group, improving its profitability and advancing Eiffage shares," the firm said in a statement. "Pierre Berger was animated by an exceptional energy.”
Eiffage, with 66,000 employees, ranks at No. 19 on ENR's list of the Top 250 Global Contractors, reporting $14.4 billion in 2014 revenue, including $2.9 billion outside of France. About 40% is in general building, with 30% in transportation and 10% in power. The firm is Europe's sixth largest contractor and third behind Vinci and Bouygues in France. It is organized into four groups: construction, energy, concessions and a newly recognized infrastructure division.
Media reports credit Berger with pushing the firm into work on global projects and raising its profits 34% as domestic markets softened. Before his arrival, the company was the target of a hostile takeover bid by Spain's Sacyr Vallehermoso Group in 2007, but French financial regulators blocked the move. Sacyr sold its 33% stake in 2008.
"The group’s strong balance sheet puts us in a good position to step up our international development across all our businesses, from construction to concessions" he told employees earlier this year, with a focus on turnkey projects abroad and acquisitions in Canada and Colombia.
Eiffage already is an industry pioneer in steel construction, such as the iconic Millau bridge in southwest France, and a leader in employee stock ownership in Europe—with nearly 30% of staffers as shareholders. The firm now has its own sustainable urban development research program called Phosphore that is building a pilot "eco-neighborhood" in Marseille that Berger wanted to "export to other countries."
Berger was on the fast-track since leaving public sector engineering work to open his own design firm at age 23, which was eventually acquired by Vinci. He rose to CEO of one of its key subsidiaries before leaving for Eiffage.
During Berger's tenure, Eiffage had managed to deliver on time in mid-2012, the ultra-modern 50,283-seat Grand Lille Stadium, which was the first built in France to have a retractable roof and to be financed through a public-private partnership. Eiffage also built and operates a successful toll highway in Dakar, Senegal, and runs concessions for nearly 2, 300 km of European motorways teamed with Macquarie. The contractor also announced last month that it is part of a joint venture with large British builders Carillion and Kier on construction of the UK’s High Speed 2 (HS2) rail project
In 2014, Eiffage saw its profits grow by 7% to $303 million even as revenue fell about 2%, mostly fueed by a falloff in key French markets. In the first half of 2015, construction division revenue dropped 6.8% mostly fueled by the market compression in France. Road construction sales outside of France grew 12.8%, which the company attributed to recovery in Spain and acquisition generated revenue. Energy division sales grew by double digits both in France and outside.
"We want our clients to view the Eiffage brand as a sign of quality and guaranteed schedule and budget compliance," Berger told employees in 2015. He noted discussions to build a thermal power plant in Senegal as a market diversification step, and said that with the firm's portfolio of 30 P3 and concession projects, "we have developed the ability to win such contracts, and we can certainly export this expertise. These are complex operations that demand a very diverse skill set. Targeting them is a good way for the group to grow in an area with fewer top-tier competitors."