COLAS (EPA:RE) - PR Colas - Financial Year 2017

Transparency directive : regulatory news

22/02/2018 07:30

PRESS RELEASE

                                                  Boulogne, February 22, 2018

                               Financial Year 2017
  High level of work-on-hand: EUR7.6 B (up 7% and 9% at constant exchange
  rates)
  Revenue: EUR11.7 B (+6% and +7% at constant scope and exchange rates)
  Current operating income: EUR362 M (-EUR24 M)
  Operating income: EUR357 M (+EUR33 M)
  Net profit attributable to the Group: EUR328 M (-EUR27 M)
  Dividend proposed: EUR8.20 per share

The Board of Directors of Colas, chaired by Mr. Hervé Le Bouc, met on February
20, 2018 to finalize the 2017 financial statements that are to be submitted to
the Annual General Shareholders' Meeting on April 12, 2018.

Consolidated Key Figures

In millions of euros     2017    2016    Change    At constant
                                       2017/2016    scope and
                                                  exchange rates
Consolidated revenue    11,705  11,006      +6%         +7%
of which France          6,104   5,779      +6%         +6%
of which International   5,601   5,227      +7%         +8%
Current operating income   362     386   - EUR24 M
Current operating profit
margin                     3.1%    3.5%    -0.4 pt
Operating income           357(a)  324(a) +EUR33 M
Net profit attributable
to the Group               328     355(b) -EUR27 M
Net cash (Net debt)        433     517    -EUR84 M

(a) Of which non-current expenses: EUR5 M in 2017 relating to the closure of
the Dunkirk site and EUR62 M in 2016 essentially relating to the
discontinuation of the refined products business.
(b) Of which EUR72 M in net capital gains on the disposal of stakes in highway
concession Atlandes and Adelac.

Revenue

Consolidated revenue of the Colas Group totaled EUR11.7 billion in 2017, up 6%
and 7% at constant scope and exchange rates compared to 2016, mainly due to a
recovery in the Roads sector.

Roads

The Roads sector recorded revenue of EUR9.7 billion in 2017, up 8% from 2016
(+8% at constant scope and exchange rates):

* revenue in Mainland France was up 8%. The six regional subsidiaries have
  seen an increase in business, thus reflecting a recovery in the market
  after several years of decline followed by stabilization in 2016;

* revenue in North America increased slightly (+1% at constant scope and
  exchange rates) after a very good 4th quarter, particularly in the United
  States;

* revenue in Europe (excluding France) rose 19% at constant scope and exchange
  rates. Business in Northern Europe increased by 7%. In central Europe,
  revenue rose a sharp 45% at constant scope and exchange rates, boosted by
  the resumption of infrastructure projects financed by the European Union;

* in the Rest of the World (international excluding Europe and North America),
  revenue was up 7% at constant scope and exchange rates. The situation is
  contrasted at constant scope and exchange rates between Oceania, which
  enjoyed 18% growth, Africa and the Indian Ocean, which grew 10%, and the
  French Overseas Departments and Regions, where revenue was down by 3%.

Specialized Activities

Specialized Activities posted revenue of EUR2 billion in 2017, up 1% compared
to 2016 (+3% at constant scope and exchange rates): increases were recorded for
Networks (+22%) and Waterproofing (+3%), while business for the Railways and
Safety & Signaling sectors remained practically stable.

Profitability

Current operating income amounted to EUR362 million in 2017, compared to EUR386
million in 2016, a EUR24-million decrease. Current operating profit margin
stood at 3.1% in 2017 compared to 3.5% in 2016:

* the Roads sector generated current operating income of EUR334 million, stable
  compared to 2016 (EUR336 million) and current operating profit margin of
  3.5%, down from 2016 (3.8%). The improvement in current operating income in
  Mainland France offsets the decline observed in North America, which was
  due mainly to harsh weather conditions in Canada and a less favorable
  market environment for bitumen by-products in the United States;

* current operating income for Specialized Activities amounted to EUR12
  million, compared to EUR43 million in 2016, a EUR31-million decrease,
  attributable almost entirely to the Railways business.

In 2017, non-current operating expenses amounted to EUR5 million, corresponding
to the closure of the Dunkirk site, compared to EUR62 million in 2016, mainly
related to the discontinuation of the refined products business.

Thus, operating income for the year 2017 totaled EUR357 million, against EUR324
million in 2016, an improvement of EUR33 million.

The cost of net debt was EUR14 million in 2017, comparable to that of 2016
(EUR13 million).

Other financial income and expenses amounted to EUR1 million in 2017 compared
to EUR74 million in 2016 (of which EUR75 million in capital gains on the sale
of stakes in highway concession companies Atlandes and Adelac).

Income tax expense in 2017 totaled EUR75 million, down EUR33 million compared
to EUR108 million in 2016, due in particular to tax reform laws passed in the
United States at the end of 2017.

The share of income from associates amounted to EUR61 million in 2017, compared
to EUR82 million in 2016.

Lastly, net profit attributable to the Group was posted at EUR328 million in
2017, compared to EUR355 million in 2016, down EUR27 million.

Solid financial structure

Net cash flow totaled EUR675 million, a EUR97-million increase compared to 2016
(EUR578 million). Free cash flow (1) improved significantly, totaling EUR320
million compared to EUR194 million in 2016.

Net capital expenditure amounted to EUR355 million in 2017, compared to EUR384
million in 2016. Financial investments totaled a gross amount of EUR157 million
and a net of EUR134 million in 2017. External growth was back on track, mainly
in France and North America, essentially in the building materials sector. In
addition, on August 30, 2017, Colas signed a memorandum of understanding for
the acquisition of 100% of the shares of the Miller McAsphalt group, a bitumen
distribution and roadworks specialist in Canada.

The Group's financial structure is solid, with shareholders' equity at EUR2.8
billion and a net cash position of EUR433 million at the end of December 2017,
compared to EUR517 million at the end of December 2016.

Net profit at Colas

Net profit for the parent company Colas amounted to EUR163.2 million in 2017,
compared to EUR249.6 million in 2016.

Dividend

The Board of Directors will put forward to the General Shareholders' Meeting on
April 12, 2018 to pay out a dividend per share of EUR8.20, identical to the
dividend distributed last year.

Board of Directors

The Board has decided to renew the term of office for Mr. Hervé Le Bouc as
Chairman and Chief Executive Officer up to the General Shareholders' Meeting
that will be called on to approve the financial statements of fiscal 2018. This
renewal is subject to the amendment of the Company's bylaws, which will be put
forward for approval at the General Shareholders' Meeting of April 12, 2018.

The Board will also put forward to the General Meeting of April 12, 2018 the
renewal of the appointment of Mrs. Catherine Ronge as a Member of the Board of
Directors for a period of two years.

(1) Free cash flow: cash flow (determined after cost of net debt and net income
tax expense, but before changes in working capital requirements) minus net
capital expenditure for the period.

Work-on-hand

At the end of December 2017, work-on-hand remained high at EUR7.6 billion, up
7% compared to the end of December 2016, and up 9% at constant exchange rates.
Work-on- hand in Mainland France (EUR3.2 billion) is up 9%, as is international
and overseas work- on-hand (EUR4.4 billion), which is also up 9% at constant
exchange rates.

Major contracts were won in the 4th quarter, including three motorway contracts
in Hungary for a total of EUR330 million and three contracts for renewal and
maintenance of rail networks in France (EUR300 million) and the United Kingdom
(EUR255 million).

Outlook
In the medium term, demand for transport infrastructure is expected to remain
high, whether in emerging countries, due to population growth and increasing
urbanization, or in developed countries, where maintenance needs are growing.
The return of a favorable economic environment is also positive for Colas.

Colas intends to pursue its growth in transport infrastructure solutions, Roads
and Railways, to serve sustainable mobility. The Group has the assets, skills
and financial resources necessary for this growth.

Revenue for the Roads business in Mainland France is expected to increase
slightly in 2018, in a market boosted by the "Greater Paris" projects, by the
2nd highway plan and by a resumption in public-funded projects.

In Europe, the construction market is fueled by the public works sector. Road
activity should also increase.

In North America, in addition to infrastructure bills at the federal, state or
provincial level, Colas is positioning itself on major P3 projects in Canada.
The acquisition of Miller McAsphalt in the 1st quarter of 2018 will lead to a
sharp increase in Colas Canada's revenue.

In the Rest of the World, opportunities for projects are numerous and national
markets are generally buoyant except in a few specific areas, notably in the
French Overseas Departments and Regions, and Qatar.

Revenue from Specialized Activities is expected to remain stable for the most
part. The measures taken in the Railways sector (renewal of management,
reorganization of activities in France, asset disposals) will begin to have a
gradual effect as of 2018. Waterproofing will benefit from a healthy building
market. Safety and Signaling could grow slightly and Networks could remain
stable at a high level.

As a result, revenue in 2018 is expected to be significantly higher than in
2017, and the current operating profit margin is expected to improve.

The Statutory Auditors have duly audited and certified the financial
statements.

Financial statements and notes are available at www.colas.com.

The presentation to financial analysts will be held on February 22, 2018 at
2.30 pm and will be made available at www.colas.com.

For further information: Ms. Delphine Lombard (tel.:+33 1 47 61 76 17)
                       delphine.lombard@colas.com

Consolidated condensed income statement for 4th quarter 2017

in millions of euros             4th quarter      Change 2017/2016
                              2017          2016

Revenue                       3,088         2,891         +7%
Current operating income        183           145      +EUR38 M
Other operating expenses         -            (23)     +EUR23 M
Operating income                183           122      +EUR61 M
Net profit attributable to
the Group                       168           188(1)   -EUR20 M

(1) Of which EUR72 million in net capital gains on the disposal of
stakes in highway concession companies Atlandes and Adelac.

Revenue 2017 by business segment

In millions of euros     2017    2016    Change    Change at constant
                                       2017/2016       scope and
                                                    exchange rates

Roads Mainland France   4,312   3,990      +8%           +8%
Roads Europe            1,603   1,374     +17%          +19%
Roads North America     2,525   2,474      +2%           +1%
Roads Rest of the World 1,216   1,133      +7%           +7%
Total Roads             9,656   8,971      +8%           +8%
Specialized Activities  2,037   2,016      +1%           +3%
Parent company             12      19       ns            ns
TOTAL                  11,705  11,006      +6%           +7%

Revenue 2017 by geographic zone

in millions of euros   2017     2016     Change
                                        2017/2016
Mainland France        5,684   5,348      +6%
French Overseas D
epartments and Regions   420     431      -3%
France                 6,104   5,779      +6%
North America          2,529   2,478      +2%
Europe (excluding
France)                2,038   1,792     +14%
Rest of the World(a)   1,034     957      +8%
International          5,601   5,227      +7%
TOTAL                 11,705  11,006      +6%

(a) Including French Overseas Territories

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COLAS (EPA:RE) - PR Colas - Financial Year 2017

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