SPIE (EPA:SPIE) - SPIE - Q1 2017 trading update - A good start to the year

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28/04/2017 07:01

Press release

                            Q1 2017 trading update

                           A good start to the year

Cergy, April 28th, 2017

Q1 2017 highlights

- Total revenue growth at constant FX: +4.8% (+3.3% reported)
- EBITA up +2.5%, at EUR59.2 million
- Strong momentum in Germany & Central Europe and North-Western Europe
- SAG acquisition finalised on March 31st, 2017, integration process initiated
- Continued bolt-on M&A activity: 4 acquisitions in 2017 to date representing
  annual revenue of EUR141 million, of which EUR133 million in Germany

In millions of euros
(unaudited figures)  Q1 2017     Q1 2016      Change      Q1 2016
                                Restated(1)             Published

Revenue              1,228.3     1,188.5       +3.3%      1,193.0
EBITA                   59.2        57.7       +2.5%         57.1
EBITA margin            4.8%        4.9%                     4.8%

Gauthier Louette, Chairman & CEO, commented: 'SPIE has made a good start to the
year. Business across our main European geographies was in Iine with our
expectations, with particularly good momentum in Germany & Central Europe and
North-Western Europe. As planned, we finalised the acquisition of SAG at the
end of March 2017 and immediately started to work on the integration, hand-
in-hand with SAG employees. At the same time bolt-on M&A activity remained
strong, particularly in Germany where we made further progress towards a
fully-balanced portfolio of activities.'

(1) Restated in accordance with IFRS 5: revenue and EBITA figures exclude the
contribution from discontinued operations

Consolidated revenue was EUR1,228.3 million in Q1 2017, up +4.8% year-on-year
at constant currency. Reported revenue showed a +3.3% growth, which included a
-1.5% foreign exchange impact primarily due to the weakening of the GBP.

EBITA was EUR59.2 million, up +2.5% year-on-year, with EBITA margin at 4.8%
(4.9% in Q1 2016).

Comments by segment

France

In the France segment, revenue and margin in Q1 2017 were flat year-on-year, in
line with  expectations. In the wake of our 'Ambition 2020' project, SPIE
Facilities is already bringing to market advanced digital solutions and
deploying full IoT (Internet of Things) Facility Management on pilot projects.
SPIE CityNetworks had a good start to the year, capitalising effectively on
positive trends in telecoms and electrical grid services. Demand from
industrial clients was hesitant, in part due to pre- election uncertainty. The
stabilisation of activity with the public sector was confirmed in Q1 2017. The
commercial market was more active, but remained competitive.

Germany & Central Europe

The Germany & Central Europe segment delivered a strong performance in Q1 2017.
In Germany, margins made further progress and revenue growth was strong,
benefitting from both solid organic trends and the contribution of ICT
specialists Comnet and GfT, acquired in 2016.

Our operations in Central Europe progressed well with the integration of Agis
in Poland and Hungary. In Switzerland, the restructuring process initiated in
2015 is now substantially complete and bearing fruit.

North-Western Europe

Momentum in the North-Western Europe segment was good in Q1 2017. Despite a
negative impact from the weakening of the GBP, the segment's revenue grew
significantly, as a result of a particularly strong M&A activity in the second
part of 2016 (6 acquisitions, representing cumulative annual revenue in excess
of EUR150 million) and sound business trends overall. Margin dynamics were good
in Q1 2017.

Oil & Gas and Nuclear

Our Nuclear business reported a modest revenue decrease in Q1 2017, in line
with management expectations, coming off a peak level of activity related to
the 'Grand Carénage' programme in 2016, while maintaining its margins.

The performance of our Oil & Gas activities in Q1 2017 was weaker than
expected, with continued revenue contraction leading to increased pressure on
margins, in an environment that showed no sign of short-term improvement.

Continued bolt-on M&A activity

In 2017 to date, SPIE acquired 4 companies, with total annualised revenue of
EUR141 million.

On January 3rd, 2017, SPIE acquired Ad Bouman BV, active in the Dutch retail
installation market. The company employs 22 people and generates annual revenue
of approximately EUR5 million. Following the recent acquisition of Aaftink,
this acquisition reinforces SPIE's leading position in the Dutch retail
installation market.

On January 26th, 2017, SPIE acquired Maintenance Mesure Contrôle ('MMC'),
through its subsidiary SPIE Nucléaire. MMC, a specialist in predictive
maintenance on electronuclear sites, employs  15 people and generates annual
revenue of approximately EUR3 million.

On April 6th, 2017, SPIE acquired PMS Sicherheitstechnik und Kommunikation GmbH
in Germany. The company installs and maintains building security and
communication systems, employs 24 people and generates annual revenue of
approximately EUR3 million.

On April 13th, 2017, SPIE signed an agreement for the acquisition of Lück
Verwaltungs GmbH, a German specialist in building technology services employing
1,000 people and generating annual revenue of approximately EUR130 million.
With this acquisition, expected to be finalised by the end of May 2017, SPIE
will expand its mechanical and electrical services capabilities in Germany,
while further increasing its network density and strengthening its position as
a major technical services provider in this country.

Timely closing of the SAG acquisition

SPIE completed the acquisition of SAG on March 31st, 2017, following the
approval of the European competition authorities. SPIE and SAG management teams
have immediately started to proceed with the integration process. The new
organisation and management structure of the Group in Germany is being rapidly
deployed and the first synergies will be delivered according to plan in 2017.

Successful bond issue

In order to finance the acquisition of SAG, SPIE made a successful return to
the bond market on March 15th, 2017, issuing a EUR600 million fixed-rate,
euro-denominated bond, with a 7-year maturity and an annual coupon of 3.125%.
The issue was heavily oversubscribed, reflecting institutional investors'
confidence in SPIE's credit quality, rated BB by Standard & Poor's and Ba3 by
Moody's.

2017 outlook confirmed

Revenue acquired in 2017 through bolt-on acquisitions should be in the order of
EUR200 million on a full- year basis.

Excluding SAG:

* Group revenue is expected to grow by c.4% at constant foreign exchange;
* Group EBITA margin is expected to remain stable at its 2016 level.

In addition, SAG's revenue contribution over nine months should be c.EUR1.0
billion, with an EBITA  margin of c.6%, including synergies.

Based on the proven track records of both SPIE and SAG, we are confident that
the combined Group will achieve c.100% cash conversion.

Dividend pay-out ratio will remain at c.40% of adjusted net income attributable
to the Group.

Governance

In accordance with agreements in place between SPIE and its principal
shareholders Clayton, Dubillier & Rice, Ardian and Caisse de Dépôt et
Placement du Québec ('CDPQ'), Mr Roberto Quarta has resigned from his office
as a Director of SPIE SA following the placing of 10.1% of SPIE's share capital
by Clayax Acquisition Luxembourg 5 SCA and CDPQ. His resignation is effective
March 16th, 2017. As a consequence, Clayton, Dubillier & Rice is now
represented by one Director.

Conference call for investors and analysts

Date: Friday, April 28th, 2017
9.00 am Paris time - 8.00 am London time

Speakers:
Gauthier Louette, Chairman & CEO
Denis Chêne, CFO

Next events

- May 29th, 2017:          2016 dividend ex-date (payment: May 31st, 2017)

- July 28th, 2017:         2017 Half-year results

- September 29th, 2017:    2017 interim dividend payment (amounting to 30% of
                           2016 approved dividend)

- November 10th, 2017:     September 30th, 2017 trading update

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 38,000 employees working from close to 600 sites in 38 countries, SPIE
achieved in 2016 consolidated revenues of EUR5.1 billion and consolidated EBITA
of EUR352 million.

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

Disclaimer

Certain information included in this press release are not historical facts but
are forward-looking statements.  These forward-looking statements are based on
current beliefs, expectations and assumptions, including, without limitation,
assumptions regarding present and future business strategies (including the
successful integration of SAG) and the environment in which SPIE operates, and
involve known and unknown risks, uncertainties and  other factors, which may
cause actual results, performance or achievements, or industry results or other
events,  to be materially different from those expressed or implied by these
forward-looking statements.

Forward-looking statements speak only as of the date of this press release and
SPIE expressly disclaims any obligation or undertaking to release any update or
revisions to any forward-looking statements included in this press release to
reflect any change in expectations or any change in events, conditions or
circumstances on  which these forward-looking statements are based. Such
forward- looking statements are for illustrative purposes only. Forward-looking
information and statements are not guarantees of future performances and are
subject to various risks and uncertainties, many of which are difficult to
predict and generally beyond the control of SPIE. Actual results could differ
materially from those expressed in, or implied or projected by, forward-looking
information and statements. These risks and uncertainties include those
discussed or identified under Chapter 4 "Risk factors" in the 2016 Registration
Document, which received the AMF visa n° R. 17 - 017 on April 18th, 2017, and
is available on the website of the Company (www.spie.com) and of the AMF
(www.amf-france.org).

This press release includes only summary information and does not purport to be
comprehensive. No reliance should be placed on the accuracy or completeness of
the information or opinions contained in this press release.

This press release does not contain or constitute an offer of securities for
sale or an invitation or inducement to invest in securities in France, the
United States or any other jurisdiction.

Appendix

Reconciliation between revenue (as per management accounts) and revenue under
IFRS

In millions of euros
(unaudited figures)             Q1 2017   Q1 2016
                                          Restated*
Revenue
(as per management accounts)    1,228.3    1,188.5
Sonaid (OCTG activity)             (2.0)      (4.4)
Holding activities                  6.2       11.2
Others                             (9.7)       1.2
Revenue under IFRS              1,222.8    1,196.6

* Restated in accordance with IFRS 5 (figures exclude the contribution from
discontinued operations)

Reconciliation between EBITA and Operating income

In millions of euros
(unaudited figures)             Q1 2017   Q1 2016
                                         Restated*
EBITA                              59.2      57.7
Amortisation of intangible assets
(allocated goodwill)               (4.0)    (10.8)
Discontinued activities and
restructuring costs                (3.0)      0.0
Financial commissions              (0.3)     (0.4)
Non-controlling interests          (0.3)     (0.8)
Others                             (6.2)      0.3
Operating Income (including
equity-accounted companies)        45.4      46.0

* Restated in accordance with IFRS 5 (figures exclude the contribution from
discontinued operations)

Press contacts

SPIE
Pascal Omnès
Group Communications Director
Tel. + 33 (0)1 34 41 81 11
pascal.omnes@spie.com

SPIE
Thomas Guillois
Investor Relations Director
Tel. + 33 (0)1 34 41 80 72
thomas.guillois@spie.com

Brunswick
Agnès Catineau
Tel. + 33 (0)1 53 96 83 84
acatineau@brunswickgroup.com

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