Energy transition would be the largest construction project in the history of human civilization. Hence this data-file aims to screen 25 of the largest developed world construction companies, especially those constructing renewables assets, power grids, gas, CCS and broader infrastructure mega-projects. Track records, specialization and scale drive margins?
Global mega-projects tend to be delivered by mega-construction companies, which have long track records coordinating this activity, across engineering, procurement, construction, installation and commissioning.
Across all of our economic models, 40% of total installed project costs tend to accrue to construction companies. This can involve tens of millions of man-hours from tens of thousands of workers.
The average of 25 large engineering and construction companies has 100 years of operating history, 35,000 employees, generated $13bn pa of revenues in 2023, and at c4% EBIT margins.
Our construction companies screen shows how profitability requires specialization, integration and economies of scale. And it is interesting to pinpoint leaders within each space.
Engineering and construction naturally go together, and effectively all of the companies offer engineering services for the projects they construct. Three leaders in engineering are noted.
For renewables, such as solar and wind, 90% of large construction companies have started building these projects. This makes construction in this space competitive. Although we singled out three European developers which have become particularly active in building these projects.
For power grids (i.e., transmission and distribution infrastructure), three relatively specialized companies are singled out. One leader has built more T&D than any other company, and derived 74% of its 2023 revenues from utilities and renewables developers, almost all in North America, and split evenly between newbuild projects and maintenance.
Other concentrated sectors include natural gas, LNG, nuclear and mining, compared to other categories in the screen. Only 40-50% of our construction companies screen has strong experience in these spaces. In LNG, for example, two companies have effectively built half of all global capacity, and the industry is led by Bechtel.
Full notes on 25 of the largest engineering and construction companies in the world are given in the data-file.