The family owner behind Italy’s largest construction company, Salini Impregilo, has not ruled out quitting the country should Italian reformist prime minister Matteo Renzi lose a crucial upcoming referendum on constitutional reform.
The comments from Pietro Salini, chief executive and owner of 62 per cent of the construction group behind the new Panama Canal, reflects mounting concerns among investors and Italian executives about the December 4 referendum. Analysts say it risks halting Italy’s reform drive by unseating or weakening Mr Renzi.
“We are proud to carry the Italian flag around the world,” Mr Salini said in an interview in Salini’s Milan headquarters, where vast black and white photographs of Ethiopia’s Legadadi Dam hang from the frescoed walls.
“But if the [political] situation evolves in the wrong way then a large part of industry going elsewhere will be a situation to evaluate in a serious way,” he added.
Mr Salini defined “the wrong way” as “a way that puts Italy without a government, without the possibility of having elections, without the possibility of a new government that is sufficiently reliable”.
The comments from Mr Salini, a high-profile executive who has been a public supporter of Mr Renzi’s drive to reform Italy’s stagnant economy, reflect growing uncertainty about Italy’s political and economic outlook.
Exor, the holding company of the Italy’s Agnelli family often at the vanguard of business manoeuvres, earlier this month held an extraordinary shareholder meeting voting to move its fiscal and legal headquarters to the Netherlands. The majority of its revenues are now based in the US.
Like many Italian companies that have survived Italy’s decade-old economic stagnation, the 110-year-old Salini Impregilo makes most of its revenues outside of Italy.
In 2015, 9 per cent came from Italy and a quarter from the US following the takeover last year of Lane, its US-based construction rival. Mr Salini does not rule out further acquisitions in Australia. “Australia is an enormous market for us,” he said.
If the [political] situation evolves in the wrong way then a large part of industry going elsewhere will be a situation to evaluate in a serious way
The company, which operates in 50 countries, plans to increase revenues by a third to €9bn by 2018, and to boost operating margin to 10 per cent. For the first half of 2016, it reported an earnings before interest, tax, depreciation and amortisation margin of 9.2 per cent and net debt of €836m.
But Italy’s political and economic stability is still crucial to Salini. The company’s share price has been hit by the impact on cash creation from the delay of two Italian fast-speed train lines projects as well as a cut in budget of the Red Line metro in Qatar.
Mr Salini said the US market would make up a third of its business in the short term as the company seeks to “de-risk” its business model from a focus on Italy and the Middle East
Regardless of who wins the US elections, Mr Salini expects either party will invest heavily in renewing US infrastructure, a significant amount of which “is more than 100 years old”.
