SPIE (EPA:SPIE) - SPIE - H1-2015 Results - Delivering on stated 2015 objectives

Transparency directive : regulatory news

28/07/2015 17:41

Press Release

H1- 2015 Results

                       Delivering on stated 2015 objectives

Cergy, July 28, 2015

Key highlights

* Revenue up 5.3% in the first half
* Margin improvement across all segments
* Volume contraction in France and Oil & Gas, as expected, but tender activity
  picking up; solid growth in other core markets
* 2 bolt-ons: Numac in May, adding complementary industrial maintenance and
  technical services capabilities in the Netherlands, and engineering &
  utilities services company Leven Energy Services in the UK in July
* Increased financial flexibility following successful IPO

Financial highlights

* Revenue: EUR2,584.3 million (+5.3%, -2.0% organic at constant currency)
* EBITA(1): EUR142.7 million (+7.5%)
* EBITA margin: 5.5% (+11 basis points compared to H1- 2014)
* Acquisitions: adding annualised revenues of EUR110 million(2)
* Leverage(3): 3.4x at June 2015

(1) Adjusted operating income before amortisation of allocated goodwill, before
    taxes and financial income
(2) Based on 2014 revenue
(3) Net debt/ LTM EBITDA

Outlook

SPIE confirms its 2015 guidance: total Group revenue of EUR5.4 billion- EUR5.5
billion, over 10 basis points increase in EBITA margin and 100% cash conversion.
Furthermore, with an extensive pipeline of opportunities ahead, SPIE expects to
complete a number of further acquisitions before the year-end so that EUR200
million in annualised sales are added to Group revenues this year.

Gauthier Louette, Chairman & CEO commented: 'Against the background of mixed
macroeconomic conditions, we are delivering on our stated 2015 objectives.
Rigorous contract portfolio management and cost optimisation allowed for margin
improvement across all four segments. We continued to successfully roll out the
SPIE model in Germany. We are currently seeing renewed tender activity in both
France and the Oil & Gas businesses but the recent reversal of oil prices may
lead to further softness in OCTG(4) as the second half develops. The successful
IPO pro vides us with additional flexibility to implement our virtuous cycle of
growth model'.

Results

Euro million           H1 2015    H1 2014     Change
France

             Revenue   1,086.3    1,124.1     -3.4%
              EBITA       62.1       63.6     -2.3%
        EBITA margin      5.7%       5.7%     6 bps

Germany & Central Europe

             Revenue     447.2      341.8     30.8%
        EBITA             12.5        6.5     93.3%
        EBITA margin      2.8%       1.9%    90 bps

North-Western Europe

             Revenue     631.2      583.6      8.2%
        EBITA             21.6       19.4     11.3%
        EBITA margin      3.4%       3.3%    10 bps

Oil & Gas and Nuclear

            Revenue      419.6      404.0      3.9%
        EBITA             37.1       33.8      9.8%
        EBITA margin      8.8%       8.4%    48 bps

Holding

        EBITA              9.4        9.5        nm

Consolidated

           Revenue     2,584.3    2,453.5      5.3%
        EBITA            142.7      132.8      7.5%
        EBITA margin      5.5%       5.4%    11 bps

(4) Activities mainly related to trading of tubular goods (casing/ tubing) in
Angola as part of development projects and pipe yard management (approximately
3% of H1-2015 revenue)

Half year revenue increased 5.3% to EUR2.58 billion versus H1-2014. Organic
growth was +0.9% (-2.0% at constant exchange rate). Bolt-on acquisitions
(mainly in H2-2014) added EUR108 million or 4.4% to H1 period revenues.

EBITA grew faster than revenues due to the 11 basis points improvement in group
margin to 5.5%. Half year EBITA was EUR142.7 million, up 7.5% from EUR132.8
million. All segments reported higher margins in spite of continuing volume
softness in France and the expected deterioration in Oil & Gas activity (mainly
OCTG) in the second quarter.

Segmental review

In the France segment, the macroeconomic environment remained challenging.
Half-year revenue declined by 3.4% with the public sector experiencing continued
weakness (mainly in new build activities). Market shares improved in the telecom
sector while the aerospace client sector demonstrated strong resilience. Margins
improved 6 basis points to 5.7% through the combination of strict contract
selection, focus on higher value work and continued overhead reduction. With
tender activity increasing, the decline in revenue is expected to reduce to low
single digit decline for the full year.

In the Germany & Central Europe segment, revenue increased by 30.8% benefiting
from the acquisitions completed in the second half of 2014 in Germany (primarily
Fleischhauer) and Switzerland (Viscom, connectis and Softix), all designed to
expand the ICT footprint locally. Organic growth at constant currency was solid,
with all acquired companies performing well. In Germany, the SPIE model has been
rolled out further. The restructuring is now substantially complete with a 4%
reduction in German headcount and legacy contracts have been exited or
renegotiated and fully provided for. In addition, further significant wins on
small projects have been recorded. Segment EBITA margins improved by 90 basis
points to 2.8%.

The North-Western Europe segment recorded a 8.2% increase in revenues benefiting
from the favourable impact of currency translation and the Scotshield
acquisition in the UK in July 2014. Volume expanded strongly in the Netherlands
and growth was steady in the UK against a strong H1-2014. On the other hand,
segment growth was negatively affected by lower volumes in Morocco and Portugal.
Segment margins improved 10 basis points with the UK outperforming markedly
thanks to contract selectivity and improved procurement. The underperforming
Portuguese activities are being put under strategic review.

Oil & Gas and Nuclear segment revenue increased by 3.9%. At constant currency,
revenue contracted by mid-single digit percentage reflecting declining activity
in the Oil & Gas division while development in the Nuclear division remained
steady. At June-end, the core oil & gas operation and maintenance activities
posted a slight revenue growth at constant currency, while OCTG deliveries
contracted significantly during Q2. Segment margins increased 48 basis points
with Oil & Gas managing to report steady improvement against a challenging
backdrop due to its flexible labor model. The outlook for OCTG, which accounted
for 19% of segment revenue and 3% of Group revenues in H1-2015, remains
uncertain given the recent reversal in the oil price.

Delivering energy-efficient facilities and infrastructures

SPIE promotes technology convergence in support of the green economy, by
focusing on delivering more energy-efficient facilities and infrastructures in
the field of Mechanical and Electrical Services, Information & Communications
Technology Services and Technical Facility Management.

Mechanical and Electrical Services

SPIE GmbH has renewed a contract for the maintenance and upgrade of heating, air
conditioning and drinking water supply systems for the 106,000 sqm SI
Erlebnis-Centrum in Stuttgart for a period of eleven years with committed cost
saving targets.

In the UK, SPIE Scotshield will design, install and commission an innovative
solution for global fire security for the Glasgow University Hospital Centre
while integrating the fire detection and fire alarm systems in the building
management system. SPIE UK has been awarded the installation of additional data
halls with complete Mechanical and Electrical infrastructure, fire system and
security by Next Generation Data, the largest data centre Campus in the UK with
a 750,000 sq.ft main building located near Cardiff.

SPIE offers a wide range of resources to capitalise on the shift in mix of
energy production and distribution. In the Netherlands, SPIE was awarded the
contract to build a new 110KV station for the grid operator TenneT in its move
to further operate wind energy mills.

Information & Communications Technology

For Sitech's Chemelot chemical site in the Netherlands, SPIE will provide
expansion and maintenance services for the telephony, data and industrial
communication network (fibre optics and copper). As a leading Information and
Communications Technology provider, SPIE will also supply technical management
of the infrastructure and equipment and services on the site for the computer
workstations and telephony.

SPIE GmbH has been awarded by Finanzinformatik operation responsibility of a
data centre class 'ANIMAL IV' with the highest standards in terms of
availability, response times and qualification requirements for personnel.

Technical Faciity Management

In Germany, SPIE will supply multi-technical services for five Airbus sites
located in the Northern part of the country representing a total of 370
buildings and industrial warehouses of 1.7m sqm. Services include operation and
maintenance of HVAC systems and taking over of the daily operational management
of the equipment and supply of 24/7 services.

In France, SPIE has been awarded the multi-technical maintenance of L'Oreal's
world headquarters in Clichy in eight buildings covering an area of 87,000 sqm.

SPIE Oil & Gas will provide commissioning assistance and start as part of the
Sadara project in Saudi Arabia, the world's largest chemical complex made up of
26 integrated manufacturing plants.

Acquisitions

Operating on a highly fragmented market in Europe, SPIE pursues bolt-on
acquisitions to increase network density, expand its range of services and its
customer portfolio. The Group plans to add an average of approximately EUR200
million per annum in annualised sales. On May 1, SPIE completed the purchase of
Numac, a leading industrial maintenance and technical services provider in the
Netherlands. With EUR57 million in revenues in 2014, Numac perfectly complements
SPIE Nederland's client base and maintenance expertise. After the period end,
SPIE completed the acquisition of Leven Energy Services on July 22. With
revenues of EUR53 million in 2014, Leven Energy Services provides a range of
engineering and utility services to the distribution network operators in the
UK. It is involved in all the major utility areas of Electricity, Gas and Water
and will significantly enhance the business reach in Southern England.

Financing - Balance sheet

First half decrease in financing from working capital was stronger in H1-2015
than in H1-2014. This was essentially due to delayed payments at June-end by a
few specific clients which are expected to correct in H2.

On June 11, 2015, SPIE concluded a successful initial public offering on the
regulated market of Euronext Paris resulting in a company market capitalisation
of EUR2.5 billion at the time of the listing. As part of the transaction; SPIE
raised EUR700 million by way of issuance of new shares. The primary proceeds and
new credit facilities totalling EUR1,295 million were used to repay existing
facilities (EUR1,958 million in total) as well as refinancing costs and IPO
related fees.

At June-end, net financial debt amounted to EUR1,311 million. The corresponding
leverage was 3.4x down from 3.5x in March 2015 proforma(5). The Group confirms
its objective to reach a debt leverage ratio equal to or less than 2.5x EBITDA
by year-end 2015 (including the impact of the employee offering to be launched
in September 2015).

Both Moody's and Standard & Poors raised their long term corporate ratings to
Ba3 and BB from B2 and B+ respectively (with a stable outlook) following the
successful IPO and the simultaneous refinancing.

About SPIE

As the independent European leader in multi-technical services in the areas of
energy and communications, SPIE supports its customers to design, build, operate
and maintain energy-efficient and environmentally-friendly facilities.

With more than 38,000 employees working from close to 550 sites in 35 countries,
SPIE achieved consolidated revenue of EUR5.22 billion in 2014 and consolidated
EBITA of EUR334 million.

www.spie.com
https://www.facebook.com/SPIEgroup
http://twitter.com/spiegroup

(5) Proforma for the IPO

                                    Contacts
             SPIE                                             SPIE
         Pascal Omnès                                     Rémy Dumoulin
    Communication Director                         Investor Relations Director
Tél. : + 33 (0)1 34 22 58 21                      Tél. : + 33 (0)1 34 22 53 70
     pascal.omnes@spie.com                           remy.dumoulin@spie.com

SPIE's latest news

03/11/2023 06:52

SPIE (EPA:SPIE) - SPIE - H1-2015 Results - Delivering on stated 2015 objectives

Transparency directive : regulatory news

SPIE's latest news

Other stories