INFORMATION MEETING. February 27, 2014

Transcription

1 INFORMATION MEETING February 27, 2014

2 CONTENTS The year 2013 Business by operating sector Financial statements Outlook for 2014 Appendix

3 THE YEAR 2013

4 HIGHLIGHTS OF 2013 Revenue is stable, against a backdrop of sluggish economic growth throughout the majority of the Group s networks and lines of business Current net operating profit and net profit are up slightly Net cash has improved The Group pursued dynamic targeted external growth The new organization in mainland France road business (7 Colas subsidiaries) has reached its 1 st year goals Significant commercial successes have resulted in high level work-on-hand at the end of December 2013, higher than at the end of 2012 Colas signed agreement at year-end to sell its stake in Cofiroute 4

5 KEY FIGURES in millions of Change 13/12 Revenue 13,049 13, % Current operating income M Net profit attributable to the Group M Net cash flow M Net capital expenditure (1) M Free cash flow (1) (2) M Net cash / (Net debt) 39 (170) M in Dividend per share 7.26 (3) 7.26 = (1) Excluding acquisition of assets attributable to external growth ( 5 M in 2013, 29 M in 2012) (2) Free cash flow: cash flow (determined after cost of net debt and net income tax expense, but before changes in working capital) minus net capital expenditure for the period (3) Proposed to the Shareholders Meeting on April 15,

6 REVENUE in millions of Change 13/12 Revenue 13,049 13, % France 7,432 7, % International 5,617 5, % Currency effect Changes in scope of consolidation Business is up slightly in France and down slightly in the international units A negative 194 M currency effect was partially offset by external growth Revenue is essentially stable (+ 0.1%) and up very slightly at constant scope and exchange rates (+ 0.5%) 6

7 CURRENT NET PROFIT Solid performance Road business in France, Europe and the Rest of the World Specialized activities: the Railways sector has made headway and Pipelines enjoyed a return to profitability essentially counterbalanced by a drop in profitability in North America significant loss in the sales of refined products sector ( 46 M in 2013 against 24 M in 2012), with base oils at historically low sales price Current operating profit amounted to 417 M, up a slight 11 M from 2012 Operating profit margin is up slightly at 3.2% (3.1% in 2012) 7

8 DYNAMIC TARGETED EXTERNAL GROWTH In Australia: Acquisition of Tropic Asphalts asphalt mix production and road construction annual revenue: 50 M thus expanding existing Colas business in Australia (storage / sales of bitumen & manufacturing / sales of emulsions and binders) In Canada: Acquisition of Furfari Paving asphalt mix production and road construction annual revenue: 80 M in the Greater Toronto area (pop.: 5.5 million) 1 st foothold for Colas in Ontario, a province with high economic potential (40% of Canada s GDP) Yukon British Columbia Northwest Territories Alberta Saskatchewan Ontario Quebec 8

9 SIGNIFICANT COMMERCIAL SUCCESSES IN 2013 PPP construction of the L2 bypass in Marseille order intake: 66 M (Colas share) duration: 30 years Construction of sections of highway in central Europe Hungary: M85 ( 91 M), M4 ( 78 M), M89 ( 43 M) Slovakia: R2 ( 80 M) PPP upgrading of the Iqaluit International Airport in Nunavut, Canada order intake: 70 M (Colas share) duration: 34 years 9

10 SIGNIFICANT COMMERCIAL SUCCESSES IN 2013 Design-build for the Tangiers-Kenitra high speed train line in Morocco order intake: 124 M duration: 42 months Kenitra Tanger Construction and maintenance of metro lines 3 & 6 in Santiago, Chile order intake: 67 M (Colas share) duration: 50 months + 20 years (maintenance) 10

11 BUSINESS BY OPERATING SECTOR

12 ROADS IN MAINLAND FRANCE Good performance REVENUE 5.2 = billion 12

13 ROADS IN MAINLAND FRANCE Good performance A year marked by particularly poor weather during 1 st half year weaknesses in the road market, notably in rural areas, offset by projects involving mass transit and quality urban development The new organization (7 Colas regional subsidiaries) launched at the end of 2012 is a success rolled out in record time (decision made in September 2012, operational on January 1, 2013) high level economic performance preserved productivity gains Delivery of Highway A63 in southern France to Atlandes highway concession company 7 months ahead of schedule Colas has a 16.6% stake duration of concession: 40 years Business is stable and results are solid 13

14 ROADS IN NORTHERN EUROPE Satisfactory year REVENUE 1.0-2% = billion at constant scope and exchange rates 14

15 ROADS IN NORTHERN EUROPE Satisfactory year despite very unfavorable weather Great Britain Good year with an increase in revenue despite very tight competition and budget restrictions Launching of long-term maintenance contract for streets in central London Ireland Revenue is up in an economic environment that remains difficult Denmark Revenue is up slightly thanks to government funding of road infrastructure projects Switzerland Revenue is stable in a less buoyant market and with lower prices Ireland Business is down more than 10% due to a slump in investments from local authorities and poor weather during the first half year 15

16 ROADS IN CENTRAL EUROPE A year of consolidation REVENUE 0.5 billion - 2% + 1% at constant scope and exchange rates 16

17 ROADS IN CENTRAL EUROPE A year of consolidation Consolidation of positions in contrasted markets: headway in Hungary, Croatia, Czech Republic sharp drop in Poland (small business network) business voluntarily limited to the production and sales of construction materials in Romania Revenue has stabilized after several years of downward trend Work-on-hand has increased sharply highway projects in Hungary and Slovakia that were secured at the end of

18 ROADS IN NORTH AMERICA A year that fell below expectations REVENUE 2.4-6% - 5% billion at constant scope and exchange rates 18

19 ROADS IN NORTH AMERICA A satisfactory year in Canada Particularly harsh weather during the 1 st half year, notably in the west (snow, flooding) Cuts in infrastructure investments in some Provinces (Quebec, Alberta) Revenue is down 8%, to be put into perspective given the comparison with record figures in 2012 First foothold in Ontario (acquisition of Furfari Paving) 19

20 ROADS IN NORTH AMERICA A difficult year in the United States The road market did not benefit from recovery, contrary to forecasts Volumes differ from one state to another Difficulties encountered on several civil engineering contracts, which led to significant losses on these projects Strong measures were taken during the year to: refocus Colas Inc. on its core business wind up unprofitable civil engineering contracts quickly pave the way back to profitability as expected from such a quality business network A marked improvement in work-on-hand at the end of the year 20

21 ROADS IN THE REST OF THE WORLD French Overseas Departments, Africa, Indian Ocean, Asia, Australia, Pacific REVENUE % + 2% billion at constant scope and exchange rates 21

22 ROADS IN THE REST OF THE WORLD French Overseas Departments Business is up 6% Business is weak in Caribbean and French Guiana cuts in government funding streamlining structures to fit with market Back on track to growth in Reunion Island and Mayotte business is gaining ground in the roads and building sectors large scale projects in Mayotte 22

23 ROADS IN THE REST OF THE WORLD Africa, Indian Ocean Revenue is down 8% Morocco West Africa Business dropped sharply due to a slump in road markets and the completion of major projects; positive impact of streamlining plan began to show during 2 nd half year Revenue is up thanks to a good year in Gabon, and an increase in business during the 2 nd half year in Benin, the Ivory Coast and Burkina Faso Southern Africa Business is stable for the manufacturing and sales of emulsions (slight decrease in South Africa, sharp increase in neighboring countries) Indian Ocean Business gained ground in Madagascar and in the Comoros, whereas Mauritius recorded a drop due to the completion of major projects (airport, highways) 23

24 ROADS IN THE REST OF THE WORLD Asia, Australia, Pacific Revenue is up 10% Business is up in Asia, notably in Vietnam and India, with a slight decrease in Indonesia and Thailand Business is up in Australia production was good at the new modified binder plant in Melbourne bitumen imports began in Sydney acquisition of Tropic Asphalts (asphalt mix production and road works) 24

25 SPECIALIZED ACTIVITIES Waterproofing, Safety & Signaling, Pipelines +4% WATERPROOFING -3% SAFETY & SIGNALING = PIPELINES Business held up well Mainland France s building market is lackluster and weather conditions were unfavorable during 1 st half year Revenue is down but profitability is stable Revenue is down 9% at constant scope and exchange rates Less local government funding for road safety No new highways to equip Successful reorganization and control of major projects sector yielded a quick turnabout Return to profitability in 2013 Significant commercial successes: 1 st international contract (outside of Europe) in Gabon 25

26 SPECIALIZED ACTIVITIES Sales of refined products Significant operating loss Mechanical increase of sales volumes, as the processing contract with Total (which sold 40% of SRD s production) ended on January 1, 2013 Sales price of base oils continued to drop due to the rapid deterioration of global industrial demand (historically low level) Current operating loss has worsened from 2012 ( 46 M against 22 M) Production of refined products (excl. bitumen) by SRD in 2013: 306,000 tons of base oils and paraffin 304,000 tons of fuel 26

27 SPECIALIZED ACTIVITIES Railways Revenue + 19% (+ 21% at constant scope and exchange rates) Strong business in France numerous tramway projects upgrading and maintenance on the national rail network progress in the freight business improved operations Strong growth on international markets continued upgrading and maintenance work on the British network and a freight contract with Network Rail in the United Kingdom continued work on major projects in Malaysia and Venezuela significant commercial successes with contracts secured notably in Morocco and Chile Progress in profitability 27

28 FINANCIAL STATEMENTS

29 INCOME STATEMENT in millions of Revenue 13,049 13,036 Net depreciation and amortization expenses (417) (457) Net charges to provisions and impairment losses (125) (109) Current operating income Other non-current income and expenses (11) - Operating income Cost of net debt (26) (24) Other financial income and expenses (2) 6 Income tax expenses (127) (137) Income from associates Net profit Net profit attributable to minority interests 3 8 Net profit attributable to the Group

30 CONDENSED CONSOLIDATED BALANCE SHEET in millions of Change 13/12 Non-current assets 3,465 3, Current assets 4,509 4, Total Assets 8,332 8, Shareholders equity 2,534 2, Non-current liabilities 1,119 1, Current liabilities 4,679 4, Total liabilities and shareholders equity 8,332 8, Net cash / (Net debt) 39 (170)

31 NET CASH POSITION 2013 in millions of 678 Sharp improvement in cash from operations: M Net cash flow Cash surplus from operations Other Net Capex* Working capital Income tax requirement expense less income tax paid * Including net liabilities relating to property, plant and equipment and intangible assets, excluding assets attributable to external growth 31

32 NET CASH POSITION 2013 (CONT.) in millions of Significant improvement in net cash: M 562 Net debt as of 01/01/2013 Net cash as of 31/12/ Cash surplus from operations Net acquisitions of subsidiaries and assets* Dividends paid out Changes in equity Changes in scope * Including net debt on acquisitions of subsidiaries 32

33 FREE CASH FLOW in millions of Free cash flow remains high Net cash flow Net capital expenditure (1) Free cash flow (1) (2) (1) Excluding acquisiton of assets attributable to external growth ( 5 M in 2013, 29 M in 2012, 13 M in 2011) (2) Free cash flow: cash flow (determined after cost of net debt and net income tax expense, but before changes in working capital) minus net capital expenditure for the period 33

34 DIVIDEND for the period Dividend remains high Yield (1) 6.2% 3.9% 4.3% 7.1% 6.2% % Dividend in millions of (2) (3) 7.26 (3) per share (1) Based on share price on December 31 (2) Based on number of shares at 32,654,499 on December 31, 2013 (3) If the dividend of 7.26 per share is approved by the Shareholders Meeting on April 15,

35 IMPACT OF IFRS 10, 11, 12 Pro forma 2013 in millions of 2013 Pro forma 2013 IFRS 10, 11, 12 Revenue 13,049 12,845 Operating income % % Income before tax Income tax expenses (127) (120) Income from associates 64 (1) 78 (1) Minority interests 3 2 Net profit attributable to the Group (1) Including 50 million for Colas stake in Cofiroute 35

36 COFIROUTE: SALE OF 16.67% STAKE Colas sold its stake on January 31, 2014 Sales proceeds amounts to 780 M Impact in 2014 in millions of Colas financial statements Consolidated financial statements Sales price Gross capital gain Income taxes / Profit sharing / Forfait social (38) (38) Net capital gain Income from associates (1) - (50) Dividend received (50) - (1) On the basis of results that are identical to

37 OUTLOOK FOR 2014

38 WORK-ON-HAND IS HIGH in billions of At end- December 2013 Change 13/12 Mainland France 3.3-6% International and French Overseas Depts and Terr % Total for the Group % 38

39 TWO NEW IMPORTANT CONTRACTS SECURED AT THE BEGINNING OF 2014 Constrution of the Troissereux bypass as a PPP order intake: 20 M duration: 25 years Construction of a causeway and an interchange on the Nouvelle Route du Littoral coastal road in Reunion Island order intake: 318 M duration: work scheduled for completion in

40 OUTLOOK FOR 2014 Roads In mainland France The market should lose ground compared to 2013 overall economic environment is not growth oriented decrease of government funding to local authorities municipal elections in March 2014 In North America In the United States, the road market should benefit from a gradual economic recovery the current long-term infrastructure plan In Canada, the market will enjoy less buoyant growth than in previous years due to budget cuts in several Provinces continue to benefit from a solid economy 40

41 OUTLOOK FOR 2014 Roads In Europe The market in northern Europe should remain essentially stable In central Europe, work-on-hand will allow for improved business activity In the Rest of the World Asia, Australia and Africa, notably in southern Africa, should enjoy buoyant business 41

42 OUTLOOK FOR 2014 Specialized Activities A contrasted situation across the Specialized activities The situation in the refining market will remain downward trending The market will be buoyant for the Railways sector, which should continue to gain ground Outlook is good for the Pipelines business, with several opportunities outside of France The market will probably slump for Waterproofing and Road Safety and Signaling 42

43 CONCLUSION In 2014, the overall economic environment in France is still marked by low visibility (except for Railways), but improvement for the international units is possible Ongoing actions to improve operations and profitability: continue to adapt the new organization in the French road business to face the forecast market slump improve profitability in Europe (stronger business in central Europe) action plans under way to improve the two lines of business that negatively impacted 2013: very quick return to satisfactory profitability in the United States gradually reduce losses in refining 43

44 CONCLUSION (CONT.) Increase the share of business in the international units to offset a decrease in mainland France find new markets (e.g., western Africa or southern Africa) targeted acquisition policy on markets with solid growth potential and profitability Higher capital expenditure than in 2012 and 2013: preserve the competitive edge of production tools satisfy needs from work-on-hand and new opportunities 2014 In light of all available data, revenue should remain stable Profitability will again be favored 44

45 APPENDIX

46 COLAS BY BUSINESS SECTOR in billions of % ROADS % SPECIALIZED ACTIVITIES % Road construction (incl. civil engineering and building) % Sales of construction materials Railways (Colas Rail) Waterproofing (Smac) Sales of refined products Safety & Signaling (Aximum) Pipelines (Spac) 6% 5% 4% 2% 2% 46

47 GEOGRAPHIC BREAKDOWN OF REVENUE % FRANCE 20% NORTH AMERICA 15% EUROPE (EXCL. FRANCE) 9% REST OF THE WORLD 57% FRANCE 19% NORTH AMERICA 15% EUROPE (EXCL. FRANCE) 9% REST OF THE WORLD 47

48 REVENUE BY OPERATING SECTOR in millions of Change 13/12 At constant scope and exchange rates 13/12 Roads mainland France 5,183 5,187 = = Roads Europe 1,448 1,479-2% = Roads North America 2,422 2,583-6% - 5% Roads Rest of the World 1,514 1, % + 2% Total Roads 10,567 10,735-2% - 1% Specialized activities 2,466 2, % + 7% Parent company ns ns Total 13,049 13,036 = = 48

49 REVENUE FOR SPECIALIZED ACTIVITIES in millions of Change 13/12 Waterproofing % Railways % Sales of refined products % Road Safety & Signaling % Pipelines % Total 2,466 2, % 49