EIFFAGE (EPA:FGR) - Eiffage1st semester 2018 results

Transparency directive : regulatory news

29/08/2018 17:45

Vélizy-Villacoublay, 29 August 2018
17:40

Sales(1): EUR7.6bn (+9.4%)
Operating profit on ordinary activities: +11.2%
Operating margin: increase to 10.5%
Net profit Group share(2): +25.4%
Net debt(3): decrease of EUR501m
Contracting order book: EUR14.4bn (+22% over one year)

                                 Press release

                           1st semester 2018 results

> Thanks to a dynamic Contracting activity (International and ramping up of the
  Grand Paris Express) and to a motorway traffic well oriented, operating
  profit on ordinary activity progressed in all divisions. The net profit
  group share for the period increases by 25 %.

> Net debt(3) has decreased by EUR501m over twelve months notwithstanding the
  Group's significant investments in external growth to strengthen its European
  footprint.

> On the basis of these semi-annual results and a strong growth of order book
  (+22%) Eiffage anticipates a growth of activity and a new progress of its
  results(2) in Contracting and in Concessions.

The Board of Directors of Eiffage met on 29 August 2018 to approve the
financial statements for the first half of 2018(4).

Activity

Consolidated sales for the first half of 2018 reached more than EUR7.6bn, up
by 9.4% on a reported basis and by 6.4% on a like-for-like basis (lfl)
(see Appendix 1).

Sales contributed by the Contracting activities increased by 9.7% on a reported
basis (and by 6.0% lfl) to more than EUR6.2bn.
Sales reached EUR4.3bn in France (up by 1.5% on a reported basis and by 0.9%
lfl) and more than EUR1.9bn in the rest of the world up by 33.7% on a reported
basis, of which 14.0% or EUR203m due to the acquisitions completed in Spain
(EDS), the Netherlands (Kropman), Switzerland (Priora) and outside Europe
(Eiffage Génie Civil Marine).

At the Construction division, sales increased by 4.0% to EUR1.84bn.
While there was a 5.3% decrease in France, there was a 49.2% increase in the
rest of Europe (22.9% increase without Priora), mainly in the Benelux
countries.
In property development, reservations for new housing units reached 2,237 units
compared with 2,080 units in the first half of 2017.

All 2017 comparatives in this press release have been restated to reflect the
first-time application of IFRS 15, so that comparisons between 2018 and 2017
take into account these restatements. The impacts of IFRS 15 restatement on the
2017 comparatives are set out in the financial semester report available on the
group internet web site.

(1) Excluding construction revenue of concessions (IFRIC 12).
(2) Excluding the adjustment of non-current deferred tax.
(3) Excluding the fair value of the CNA debt and swaps.
(4) The audit procedures have been completed and the auditors' report on the
financial statements is in the process of being issued.

At the Infrastructures division, sales increased by 15.1% to EUR2.48bn.
There was an overall increase of 8.0% in France, with increases of 3.6% for
road construction, 17.2% for civil engineering (due notably to the ramping up
of work on the Grand Paris Express) and 2.1% for metallic construction. The
division continues to expand internationally (+28.8%, of which +9.2% in
Europe).

At the Energy Systems division, sales increased by 8.9% to EUR1.94bn, with
increases reaching 2.1% in France and 31.4% outside France (up 17.5% lfl).

In Concessions, the growth in motorway traffic (up 4.6% on the APRR network, up
5.6% on the A65 motorway, up 0.5% on the Millau viaduct and up 31.4% of
transactions on the Avenir motorway in Senegal) and the contributions made by
other concessions and public-private partnerships paved the way for a sharp
7.9% increase in sales to EUR1.4bn.

First-half sales reflect a particularly upbeat performance in the second
quarter (when growth reached 12.6% overall) by both Contracting (13.8%
increase) and Concessions (7.2% increase).

Results

Operating profit on ordinary activities increased by 11.2% to EUR806m (with a
19.3% increase in the Contracting activities, for a 9.7% increase in sales).

In the Construction division, the operating margin was stable at 3.6% both in
France and in the rest of Europe.

The Infrastructures division, which traditionally generates a negative margin
in the first half, recorded an operating margin of -1.3% (up from -1.8% in
June, 2017), its performance buoyed by the brisk growth recorded by civil
engineering and road construction both in France and in the rest of the
world.

In the Energy Systems division, the operating margin continued to progress in
France and in the rest of the world to reach 3.4% (up from 3.2% in June,
2017).

Overall, the operating margin of the Contracting activities improved to 1.6%
versus 1.5% in June 2017.

In Concessions, the operating margin increased to 51.3% (50.3% in June 2017)
thanks notably to the significant growth in motorway traffic. APRR's Ebitda
margin improved to 76.0% (75.4% in June 2017).

Net finance costs declined by EUR24m in the first half of 2018 thanks to the
debt refinancing completed by the Group in the last 18 months.
As a result of the reduction in net finance costs and in non-current operating
expenses, net profit Group share increased by 25.4% to EUR217m (up from EUR173m
in June, 2017).

Financial situation

Net financial debt, excluding the fair value of the Caisse Nationale des
Autoroutes (CNA) debt and swaps, amounted to EUR11.0bn, down EUR501m over 12
months. This debt is lodged almost exclusively in the Concessions activities
and is without recourse against Eiffage. The holding and Contracting activities
had net cash of EUR95m at 30 June 2018 (EUR76m at the end of June 2017), after
the Group had completed external acquisitions totalling EUR161m (versus EUR23m
in June 2017).

Free cash flow is traditionally negative during the first half of the year due
to a seasonal increase in working capital requirements that reached EUR537m in
the first half of 2018 (EUR432m at June 30, 2017), impacted by the robust
growth enjoyed by the Contracting activities. The Group's liquidity amounted to
EUR2.7bn and consists of available net cash of EUR1.7bn and an unused credit
line confirmed until September 2021 amounting to EUR1bn (reduced to EUR0.92bn
in the final year).

Financing

In order to complete, expand and diversify the Group's sources of financing,
Eiffage put into place a Negotiable European Medium Term Notes (NEU - MTN)
programme at the end of June 2018, amounting to EUR1bn.
Furthermore, at the end of July 2018, A'Liénor, concessionaire of the A65
Pau-Langon motorway until 2067, successfully completed the refinancing of its
debt by arranging a 10-year loan amounting to
EUR825m subscribed to by 11 banks and conforting its financial structure.

2018 prospects

The Contracting order book stood at EUR14.4, up by 22% over one year (+2% over
3 months). It represents 13.4 months of activity for the Contracting division,
compared with 12.0 months as at 30 June 2017. Order intake has been buoyed in
France by the Grand Paris Express contracts (notably for lot 1 of line 16,
worth EUR1.7bn) and by the favourable momentum enjoyed by the Group's
subsidiaries in Europe. The order book has also been buttressed by the
significant contribution made by the companies acquired by the Group in the
semester.

There follows that Eiffage confirms its 2018 outlook regarding growth in the
Group's sales and a new increase of results in contracting and in concessions
(before any adjustment to non-current deferred taxes) over the whole of 2018.

A more detailed presentation of the financial statements for the six months
ended 30 June 2018, in French and English, is available on the company's
website: www.eiffage.com.

Investor relations                      Press contact
Xavier Ombrédanne                       Sophie Mairé
Tel: + 33 (0)1 71 59 10 56              Tel: + 33 (0)1 71 59 10 62
xavier.ombredanne@eiffage.com           sophie.maire@eiffage.com

APPENDICES

Appendix 1 : Sales by division for the 1st half of 2018

                                                          % change
                                                        Actual
                            1st half   1st half  consolidation  Like-for-like
In millions of euros            2017       2018          scope         (lfl*)

Construction                   1,764      1,835          +4.0%          -0.5%
Of which property                332        369            -              -
Infrastructures                2,152      2,476         +15.1%         +11.2%
Energy Systems                 1,777      1,935          +8.9%          +6.0%
Total Contracting              5,693      6,246          +9.7%          +6.0%
Concessions
(excluding IFRIC 12)           1,296      1,399          +7.9%          +8.4%
TOTAL GROUP
(excluding IFRIC 12)           6,989      7,645          +9.4%          +6.4%
Of which:
France                         5,522      5,684          +2.9%          +2.5%
International                  1,467      1,961         +33.7%         +21.0%
Rest of Europe                 1,273      1,584         +24.4%         +14.5%
Rest of world                    194        377         +94.3%         +63.1%
Construction revenue of
Concessions (IFRIC 12)           175        128               nm

* Like-for-like (lfl) calculated by neutralising:
- the 2018 contribution made by companies consolidated for the first time in
2018;
- the 2018 contribution made by companies consolidated for the first time in
2017, for the period equivalent to that in 2017 before consolidated for the
first time;
- the 2017 contribution made by companies deconsolidated in 2018, for the
period equivalent to that in 2018 after they were deconsolidated;
- the 2017 contribution made by companies deconsolidated in 2017.
- Constant exchange rates: 2017 exchange rates applied to 2018 local currency
sales.

Sales by division for the 2nd quarter

                                 2nd quarter    2nd quarter
In millions of euros                    2017           2018       % change

Construction                             968          1,036          +7.0%
Of which property                        200            195
Infrastructures                        1,216          1,459         +20.0%
Energy Systems                           920          1,038         +12.8%
Total Contracting                      3,104          3,533         +13.8%
Concessions (excluding IFRIC 12)         684            733          +7.2%
TOTAL GROUP (excluding IFRIC 12)       3,788          4,266         +12.6%
Construction revenue of
Concessions (IFRIC 12)                   108             86             nm

Appendix 2: Operating profit by division

                               S1 2017              S1 2018
                           EURm   % change     EURm   % of sales   % change

Construction                 64       3.6%       66       3.6%       +3.1%
Infrastructures             (38)     -1.8%      (33)     -1.3%      +13.2%
Energy Systems               57       3.2%       66       3.4%      +15.8%
Sub-total Contracting        83       1.5%       99       1.6%      +19.3%
Concessions                 652      50.3%      718      51.3%      +10.1%
Holding                     (10)                (11)
TOTAL GROUP                 725      10.4%      806      10.5%      +11.2%

Appendix 3: Consolidated financial statements

Simplified consolidated income statement

In millions of euros                          S1 2017   S1 2018   % change

Sales (1)                                       6,989     7,645     +9.4%
Operating profit on ordinary activities           725       806
(% of sales)                                  (10.4%)   (10.5%)    +11.2%
Other income (expenses) from operations          (24)      (20)
Operating profit                                  701       786    +12.1%
Net finance costs                               (247)     (223)     -9.7%
Other financial income (expenses)                 (7)      (12)         -
Financial income (expenses)                     (254)     (235)         -
Share of profit (loss) of equity-method
investments                                         2         4         -
Income tax                                      (142)     (179)         -
Profit for the period                             307       376    +22.5%
Non-controlling interests                         134       159         -
Profit for the period attributable to
the holders of the parent company                 173       217    +25.4%

(1) Excluding IFRIC 12

Simplified consolidated statement of financial position

In millions of euros                                   30/06/2017   30/06/2018

Assets                                                     18,416       18,126
Non-current assets - Concessions                           13,963       13,328
Non-current assets - Holding and Contracting                4,453        4,798
Equity and liabilities                                     18,416       18,126
Equity                                                      4,678        5,331
Of which equity attributable to equity holders
of the parent company                                       3,892        4,429
Of which equity attributable to non-controlling interests     786          902
Net debt (excluding fair value of CNA debt and of swaps)   11,501       11,000
Net current liabilities                                       639          248
Net non-current liabilities (including fair value of
CNA debt and of swaps)                                      1,599        1,547

Simplified consolidated statement of cash flows

In millions of euros                               30 June 2017   30 June 2018

Cash flow from operations                                   691            735
Change in working capital requirements                    (432)          (537)
Other(1)                                                  (283)          (200)
Net cash from (used in) operating activities               (26)            (2)
Net operating investments                                 (380)          (219)
Free cash flow                                            (406)          (221)
Net financial investments                                  (23)          (161)
Dividends                                                 (145)          (328)
Change in capital                                           169             84
Capital flows and others                                      1          (405)
Change in net bank debt                                   (405)          (626)
Items not involving the movement of funds                   117              1
Change in net financial debt (2)                          (288)          (625)
Of which Concessions                                        128            184
Of which Holding and Contracting                          (416)          (809)
(1) Difference between interest paid and
recognised and between tax paid and recognised
(2) Excluding fair value of CNA debt and of swaps           325            138

Appendix 4: Order book by division

                               30 June     30 June    % change      % change
In billions of euros             2017        2018    over 1 year  over 3 months

Construction                      4.0         4.5       +14%          +9%
Infrastructures                   4.6         6.6       +44%          -3%
Energy Systems                    3.3         3.3        =            +3%
Sub-total Contracting            11.9        14.4       +22%          +2%
Property                          0.6         0.6       +12%          -3%
Concessions                       1.1         1.1        -1%          -2%

Appendix 5: 2017 tables as published and pro-forma application of IFRS 15

Sales

                                  S1 2017     S1 2017    Total 2017  Total 2017
In millions of euros             Reported    Pro-forma    Reported   Pro-forma

Construction                       1,761       1,764       3,750       3,868
Of which Property                    329         332         845         963
Infrastructures                    2,152       2,152       4,704       4,704
Energy Systems                     1,778       1,777       3,783       3,782
Total Contracting                  5,691       5,693      12,237      12,354
Concessions (excluding IFRIC 12)   1,302       1,296       2,739       2,727
TOTAL GROUP (excluding IFRIC 12)   6,993       6,989      14,976      15,081
Of which:
France                             5,526       5,522      11,806      11,911
International                      1,467       1,467       3,170       3,170
Rest of Europe                     1,273       1,273       2,700       2,700
Rest of world                        194         194         470         470
Construction revenue of
Concessions (IFRIC 12)               175         175         313         313

Operating profit on ordinary activities and margins

                     30/06/2017     30/06/2017    31/12/2017     31/12/2017
In millions of euros  Reported      Pro-forma      Reported      Pro-forma

Construction             67    3.8%    64     3.6%    153   4.1%    156    4.0%
Infrastructures         (39)  -1.8%   (38)   -1.8%    119   2.5%    119    2.5%
Energy Systems           57    3.2%    57     3.2%    158   4.2%    158    4.2%
Sub-total Contracting    85    1.5%    83     1.5%    430   3.5%    433    3.5%
Concessions             652   50.1%   652    50.3%  1,317  48.1%  1,317   48.3%
Holding                 (10)          (10)            (18)          (18)
Total Group             727   10.4%   725    10.4%  1,729  11.5%  1,732   11.5%

Order book
                      30/06/2017     30/06/2017    31/12/2017      31/12/2017
In millions of euros   Reported      Pro-forma      Reported       Pro-forma

Construction             4.8            4.0            4.9            4.3
Infrastructures          4.9            4.6            5.0            4.9
Energy Systems           3.3            3.3            2.9            2.9
Sub-total Contracting   13.0           11.9           12.9           12.1
Property                 0.0            0.6            0.0            0.7
Concessions              0.0            1.1            0.0            1.1

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