COLAS (EPA:RE) - PR Colas - 2020 Half-Year Results_VE

Transparency directive : regulatory news

27/08/2020 07:30

PRESS RELEASE
Paris, August 27, 2020

- Colas / Blue Iris Photography / Créavision / McAsphalt / Nedim IMRE -
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                            2020 Half-Year Results

* Order Backlog: EUR10.1 Bn, up 1% restated for the main acquisitions and
  disposals and at constant exchange rates Covid-19 strongly impacted half-year
  results, as expected:
* Revenue: EUR4.9 Bn (-17% and -15% at constant scope and exchange rates)
* Current operating profit: -EUR304 M in 1st half year (-EUR168 M compared to
  H1 2019), of which +EUR66 M for Q2 (-EUR96 M compared to Q2 2019)
* Net profit attributable to the Group: -EUR295 M (-EUR193 M)

The Board of Directors of Colas, chaired by Mr. Olivier Roussat, met on August
25, 2020 to examine the situation as of June 30, 2020 and outlook for the
current year.

Consolidated key figures

in millions of euros   H1 2019  H1 2020  Change  At constant
                                                  scope and
                                                exchange rates
Consolidated revenue     5,834   4,870     -17%        -15%
of which France          3,071   2,236     -27%        -24%
of which International   2,763   2,634      -5%         -5%
Current operating profit  (136)   (304)    -168
Current operating margin  -2.3%   -6.3%    -4.0 pts
Operating profit          (136)   (349)(a) -213
Consolidated net profit
attributable to the Group (102)   (295)    -193
Net debt (b)             1,544   1,065     -479

The consolidated financial statements have been prepared in accordance with
IFRS 16 applicable since January 1, 2019.
(a) Including EUR45 million in non-current expenses related to the
    reorganization of the Group's road business in France and the continued
    dismantling of the Dunkirk site.
(b) See definition in glossary on page 6.

Impact of the Covid-19 pandemic

As expected, the impact of the Covid-19 pandemic on Colas' business and results
amplified during the 2nd quarter of 2020.

At constant scope and exchange rates, consolidated revenue was down 18% in the
2nd quarter (-29% in France) compared to -10% in the 1st quarter (-17% in
France).

After a sharp decline in April, business resumed gradually, returning to normal
levels in June. As the Covid-19 situation improved or stabilized, recovery was
favored, exception made for the United States, the French Overseas Departments
and Regions and the Indian Ocean.

For the 2nd quarter of 2020, the current operating profit was positive at EUR66
million, down EUR96 million from Q2 2019, compared to -EUR72 million in Q1
2020.

Finally, the health crisis slowed the filling of orders from the Group's
backlog.

Seasonal nature of business activity

Due to the highly seasonal nature of the majority of the Group's businesses,
operating losses are recorded each year during the 1st half year.

Order backlog

The order backlog at the end of June 2020 remains high at EUR10.1 billion, up
1% restated for the main acquisitions and disposals and at constant exchange
rates.

In mainland France, the order backlog (EUR3.6 billion) is down 1%, in line with
the decrease in order intake for Mainland France Roads (impact of Covid-19 and
municipal elections).

The order backlog for the international and French overseas units (EUR6.5
billion) is up 2%, restated for the main acquisitions and disposals and at
constant exchange rates.

Revenue

Consolidated revenue for the 1st half of 2020 amounted to EUR4.9 billion, down
17% compared to the 1st half of 2019 (-15% at constant scope and exchange
rates). In France, revenue amounted to EUR2.3 billion (-27% and -24% at
constant scope) and EUR2.6 billion in the international units (-5% at constant
scope and exchange rates).

The drop in revenue during the 1st half of 2020 due to the impact of the
Covid-19 pandemic is estimated at around EUR810 million.

Roads:

Revenue from the road segment amounted to EUR4.3 billion in the 1st half of
2020, down 14% (-15% at constant scope and exchange rates).

In the Mainland and French Overseas/Indian Ocean zone, which was the most
heavily impacted by the consequences of the Covid-19 pandemic, business is down
24% compared to the 1st half of 2019.

At constant scope and exchange rates, business is practically stable in the
EMEA zone (+ 1%), while it is down 7% in the United States, 8% in Canada and
11% in the Asia-Pacific zone.

Railways and other Activities:

Compared to the 1st half of 2019, revenue from Railways and other Activities is
down 14% at constant scope and exchange rates. The contribution of Smac, which
was deconsolidated in the 2nd quarter of 2019, amounted to EUR141 million in
the 1st quarter of 2019.

Financial performance

Current operating profit for the 1st half of 2020 was -EUR304 million, down
EUR168 million compared to the 1st half of 2019. In the 1st half of 2020, the
impact of the health crisis on current operating profit is estimated at around
-EUR190 million (loss of current operating margin and unavoidable costs).

1st half-year operating profit for 2020 amounted to -EUR349 million, including
non-current expenses of EUR45 million pertaining to the reorganization of the
road business in France and the continued dismantling of the Dunkirk site.

The share of income from joint ventures and associates amounted to EUR4 million
at the end of June 2020 compared to EUR25 million at the end of June 2019,
partly due to a decrease in results for Tipco Asphalt.

Net profit attributable to the Group came to -EUR295 million in the 1st half of
2020, down by EUR193 million compared to the 1st half of 2019.

Furthermore, the health crisis had no impact on the valuation of the Group's
non-current assets as of June 30, 2020.

Net debt

Net debt at June 30, 2020 stood at EUR1,065 million, an improvement of EUR479
million compared to June 30, 2019, due to both the good performance of working
capital requirements and a delay in the payment of dividends.

The payment in September of a dividend of EUR6.40 per share for the 2019
financial year will be proposed to the Ordinary General Shareholders' Meeting
on September 3, 2020.

Outlook

Despite the widespread announcement of recovery plans and infrastructure plans,
vigilance is needed as to the evolution of the Covid-19 pandemic and its
impacts on markets and zones where Colas operates.

On the basis of data known to date and excluding additional unfavorable changes
in the health crisis, the decline in revenue and current operating profit in
the 2nd half of 2020 compared to 2019 should be significantly lower than in the
1st half.

Colas confirms that in 2020 it is setting targets for reducing its greenhouse
gas emissions compatible with the Paris Agreement, and will communicate about
the action plan to achieve these goals as well.

The financial statements are available at www.colas.com.
The half-year financial report is available at www.colas.com.
The financial statements were subject to a limited review by the Statutory
Auditors, who have published a report thereof.

Colas (www.colas.com)
Colas, a subsidiary of the Bouygues Group, is a world leader whose mission is
to promote transport infrastructure solutions for sustainable mobility. With
57,000 employees in more than 50 countries on five continents, the Group
performs some 70,000 road construction and maintenance projects each year via
800 construction business units and 3,000 material production units.

In 2019, consolidated revenue at Colas totaled EUR13.7 billion (52% outside of
France). Net profit attributable to the Group amounted to EUR261 million.

For further information:
Delphine Lombard (tel. : + 33 6 60 07 76 17) / Rémi Colin
(tel.: +33 7 60 78 25 74) contact-presse@colas.fr
Jean-Paul Jorro (tel.: +33 1 47 61 74 23) / Zorah Chaouche
(tel.: +33 1 47 61 74 36) contact-investors@colas.fr

Condensed consolidated income statement for 2nd quarter

in millions of euros
                                  Q2 2019  Q2 2020  Change
Revenue                             3,547   2,911    -18%
Current operating profit              162      66    -96
Operating profit                      162      20   -142
Net profit attributable to the Group  125       4   -120

Revenue at June 30 by business segment

in millions of euros
                    At 30/06/2019 At 30/06/2020  Change Change at constant
                                                        scope and exchange
                                                              rates
Roads Mainland
France / French
Overseas-Indian
Ocean                    2,766         2,101      -24%         -24%
Roads EMEA                 921           916       -1%          +1%
Roads United States        675           674        =           -7%
Roads Canada               494           456       -8%          -8%
Roads Asia Pacific         202           184       -9%         -11%
Total Roads              5,058         4,331      -14%         -15%
Railways and other
Activities                 762           534      -30%         -14%
Parent Company              14             5       ns            ns
TOTAL                    5,834         4,870      -17%         -15%

Glossary

Order backlog: the amount of work still to be done on projects for which a firm
order has been taken, i.e. the contract has been signed and has taken effect
(after notice to proceed has been issued and suspensory clauses have been
lifted).

Changes in revenue at constant scope and exchange rates:
- at constant exchange rates: change after translating foreign-currency sales
  for the current period at the exchange rates for the comparative period;
- at constant scope: change in revenue for the periods compared, adjusted as
  follows:
  * for acquisitions, by deducting from the current period those sales of the
    acquired entity that have no equivalent during the comparative period;
  * for divestments, by deducting from the comparative period those sales of
    the divested entity that have no equivalent during the current period.

Net surplus cash/(net debt): the aggregate of cash and cash equivalents,
overdrafts and short-term bank borrowings, non-current and current debt, and
financial instruments. Net surplus cash/(net debt) does not include non-current
and current lease obligations. A positive figure represents net surplus cash
and a negative figure represents net debt.

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COLAS (EPA:RE) - PR Colas - 2020 Half-Year Results_VE

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