February 24, 2017 INFORMATION MEETING

Transcription

1 February 24, 2017 INFORMATION MEETING

2 Contents 1. The Year Business by operating segment 3. Financial statements 4. Outlook for Appendix 2

3 3 01 The Year 2016

4 Highlights of 2016 Global economic environment dominated by low growth, still not very favorable for relaunch of public investment Against this backdrop, Colas met all its targets - revenue at 11 billion, down 8% and 4% at constant scope and exchange rates - operating income on the rise thanks to the halt of current losses in the refining business in France and the positive impact of action plans, in particular in Mainland France current operating income at 386 M (+ 42 M), i.e., a current operating margin of 3.5%, up 0.6% operating income at 324 M (+ 75 M), despite 62 M in non-current expenses - net profit at 355 M, up a sharp 121 M - net cash position at 695 M (including payment of interim dividend in December 2016), up 135 M in one year 4

5 Highlights of 2016 (cont.) Beyond good financial performance, many positive points in stable activity for Roads in Mainland France after several years of decline - closure of the Dunkirk refinery at the end of the year - acquisitions with good potential in the Middle East (United Arab Emirates, Oman and Qatar) and in the United States - very good sale of two stakes held in two highway concession companies - work-on-hand at end-2016 which is high ( 7.1 B) with a better geographic spread than the previous year at the same time - Wattway Solar Road s ongoing success with potential customers, with numerous trial sections 5

6 Key Figures in millions of Change 16/15 Change at constant scope and exchange rates Revenue (in billions of ) % - 4% Current operating income M Operating income 324 (1) M Net profit attributable to the Group 355 (2) M Net cash 517 (3) M In Dividend per share 8.20 (4)(5) (1) Including 62 M in 2016 and 95 M in 2015 in non-current expenses linked mainly to the closure of business at the subsidiary SRD (2) Including 72 M of net capital gain from disposal of shares in Atlandes and Adelac (3) After payment of interim dividend of 178 M (4) Proposed at the General Shareholders Meeting on April 11, 2017 (5) Of which an interim dividend of 5.45 paid out in December

7 Revenue in millions of Change 16/15 Change at constant scope and exchange rates Revenue 11,006 11,960-8% - 4% France 5,779 6,044-4% - 4% International 5,227 5,916-12% - 4% Currency effect Changes in scope of consolidation Revenue at 11 billion, with strong impact of scope and exchange rates - changes in scope of consolidation totaling M, with the sale of bitumen storage and distribution subsidiaries in Asia to Thai subsidiary Tipco Asphalt (in which the Group owns a 32% stake) and the halt of sales of refined products - currency effect of M, due mainly to depreciation of the British pound (Roads and Railways) and, to a lesser extent, the Canadian dollar against the euro 7

8 Revenue (cont.) Revenue is down 4% at constant scope and exchange rates - Roads -5% increase in revenue for Australia, Pacific Rim and Africa good level of revenue for subsidiaries in the USA with a refocused scope stable revenue for road subsidiaries in Mainland France after several years of decrease, and for subsidiaries in northern Europe and Indian Ocean however, a decrease for central Europe, Canada and French Overseas Departments - Specialized activities -3% stable revenue for Railways a drop for Waterproofing, and to a lesser extent, for Safety and Signaling and Networks 8

9 9 02 Business by operating segment

10 Roads in Mainland France Business is stabilizing and operational performance of subsidiaries has improved Revenue 4.0 billion + 0.2% 10

11 Roads in Mainland France (cont.) Road market is stabilizing after dropping for several years - government funding to local authorities continues to decrease - local officials are more and more aware that networks need upgrading - cities in second half of elected term - transport projects launched (tramways in Paris, bus rapid transit) - stability in the private market Slight improvement in volume if lower oil product (bitumen) prices are taken into account Subsidiaries improved performance despite pressure on profit margins, thanks to action plans (successful merger for Colas Nord-Picardie and Colas Est, further geographic reorganization, more synergy between lines of business) Completion or continued work on major projects and PPPs (high speed train bypass of Nîmes-Montpellier, L2 bypass of Marseille, Troissereux bypass), launch of extension contract at the seaport in Calais 11

12 Roads in Europe Business roughly comparable to 2015 in northern Europe but down as forecast in central Europe Operating income improved Revenue 1.4 billion - 18% - 16% at constant scope and exchange rates 12

13 Roads in Europe (cont.) Northern Europe - decline in the UK due to the slowdown in investment (resulting from the Brexit), not offset by the national road infrastructure plan which has not started yet - a slight increase in Ireland with economic recovery and expansion of range of activities, in Belgium with the development of private business, in Switzerland and at Colas Danmark (upgrade at the Keflavik airport in Iceland) - preparing bids on large contracts in Belgium (PPP tramway in Liège and new sections of the Antwerp Ring) Central Europe - significant drop as expected with delays in the launch of road and motorway projects financed by European funds - limited impact on operational profitability thanks to good anticipation of low level of activity - continuing efforts to improve structures - a motorway project (M35) was started and work-on-hand filled back up during last quarter 2016 (major road contract for Route 47 secured in Hungary) 13

14 Roads in North America Business is good in the USA, down in Canada Good overall operational performance 14 Revenue 2.5-7% - 6% at constant scope and exchange rates billion

15 Roads in North America A good year United States Progressive economic recovery, with a market boosted by State infrastructure initiatives and a slow start up of the private sector Stable revenue at constant scope and exchange rates, impacted by - lower oil product prices (bitumen) - refocus on core business (end of major civil engineering works) Significant improvement in operational performance Companies ready to benefit from the 8-year FAST Act infrastructure plan 15

16 Roads in North America Canada Business is down, operating margin is solid Revenue down from 2015, which was a high basis for comparison Economy of Western provinces impacted by declining oil prices, notably in Alberta where Colas has a strong foothold Good level of activity in Ontario Stable market that remains low in Quebec Completion of PPP contract for the Iqaluit Airport in Nunavut Satisfactory operating income is preserved thanks to anticipation of the slowdown in the West Waiting for impact of Trudeau infrastructure plan, good outlook for 2017, including for the West 16

17 French Overseas Depts., Africa, Indian Ocean, Roads Rest of the World Middle East, Asia, Australia, Pacific Rim Solid business and operating income in contrasted background 17 Revenue 1.1 billion - 19% - 4% at constant scope and exchange rates

18 Roads Rest of the World French Overseas Departments Conventional activity still low in French Caribbean and Reunion Island In Mayotte, no large projects In Reunion Island, major project for the New Coastal Road helps partially offset the low level of conventional business Subsidiaries are well adapted to current market volumes 18

19 Roads Rest of the World Business comparable to 2015 Africa, Indian Ocean In Morocco, business has progressed, benefitting from infrastructure investments and private sector In West Africa, business improved in Côte d Ivoire, major road projects in Benin and Togo, a large contract for a mining client in Guinea-Conakry secured at the end of 2016 Impact of lower oil and raw material prices on road investments in southern Africa and central Africa (Gabon, Congo) No large projects in the Indian Ocean (Madagascar, Mauritius) 19

20 Roads Rest of the World A good first year Middle East Material production and road construction companies acquired in partnership at end-2015, beginning 2016 in United Arab Emirates, Oman and Qatar Consolidation with the equity method (no contribution to consolidated revenue) A satisfactory first year As of 2017, part of the Northern Europe Division (synergy with Colas Ltd) 20

21 Roads Rest of the World Another good performance in 2016 Asia, Australia, Pacific Rim Significant impact of changes in scope relating to the sale at the beginning of 2016 of subsidiaries specialized in bitumen storage and distribution in Vietnam, Indonesia and Singapore to the Thai subsidiary Tipco Asphalt (of which Colas owns 32%) In Asia : - a good year in India - activity necessarily took a downturn in Thailand after a record year in 2015, reflecting a significant slowdown in activity in southeast Asia In Australia, business (industries and road works) on the rise in a more favorable economic environment In New Caledonia, business is stable in a still challenging economy 21

22 Specialized activities (excl. Refining in France) Revenue and operating income are down Railways 967 million - 4% (+ 1% at constant scope and exchange rates) Waterproofing 547 million - 8% Safety & Signaling 301 million - 3% Revenue 2.0-5% - 3% at constant scope and exchange rates billion 22 Networks 189 million - 4%

23 Specialized activities Railways Business is stable Railway markets more buoyant internationally than in France - more difficult in France the end of the high speed lines (Nîmes-Montpellier rail bypass being completed) late start for renovation and maintenance activity on the national rail network freight activity posted deficit - business still upbeat in the United Kingdom record level of activity start of the contract to upgrade railway infrastructure in Wessex - still dynamic for major international projects continuation of the major railway projects in the Rest of the world: Tanger-Kenitra high speed line in Morocco, extension A and C of line 1 of the Algiers, Algeria metro, construction of lines 3 and 6 of the metro of Santiago de Chile, extension of line 3 of the Cairo, Egypt metro contracts obtained in a new location: Vietnam (construction of line 3 of the Hanoi metro) 23

24 Specialized activities Networks, Waterproofing, Safety and Signaling Markets still difficult for Waterproofing, Safety and Signaling Networks - good level of activity in the transport of energy, industrial projects offset the decline in the pipeline sector - satisfactory operating profitability - at the end of 2016, two major gas pipeline contracts were secured - excellent work-on-hand at the end of 2016 Waterproofing - building market in Mainland France remains difficult, although a slight recovery was recorded in the second half - action plan to relaunch Smac in Safety and Signaling - markets declining in volume and very competitive due to overcapacity in France which led to a loss in major player in large complex contracts (e.g., PPPs for Troissereux bypass, Marseille L2 bypass) - business model to be rethought in a return to operational breakeven no later than 2018

25 Specialized activities Refining in France (SRD) 2016: the Dunkirk refining unit was closed and secured at year end as planned. There is no more workforce on site Accounted for in financial statements as non-current expenses (structural costs, in particular wages, and adjustments to costs of re-employment plan) Dedicated structure has been set up to dismantle and remediate pollution on site 25

26 26 03 Financial statements

27 Income statement in millions of Revenue 11,006 11,960 Net depreciation and amortization expenses (399) (420) Net charges to provisions and impairment losses (155) (186) Current operating income Other non-current income and expenses (62) (95) Operating income Cost of net debt (13) (19) Other financial income and expenses 74 (2) Income tax expenses (108) (68) Share in income from associates and joint ventures Net profit Net profit attributable to minority interests 4 4 Net profit attributable to the Group

28 Free cash flow in millions of Net cash flow Net capital expenditure Free cash flow (1) (1) Free cash flow: cash flow (determined after cost of net debt and net income tax expense, but before changes in working capital requirements) minus net capital expenditure for the period 28

29 Net cash position 2016 / 2015 in millions of Net cash flow Net Capex Income tax expense less Other +578 income tax paid Change in working capital requirements Cash surplus from operations

30 Net cash position 2016 / 2015 (cont.) in millions of Cash surplus from operations Net sales of subsidiaries and assets Net cash as of Dividends 01/01/2016 paid out Net cash as of 31/12/ (1) -358 Changes in equity Changes in scope (1) Including payment of interim dividend of 178 M in December

31 Condensed financial structure in millions of Change 16/15 Non-current assets 3,716 3, Shareholders equity (1) 2,891 2, Non-current liabilities 1,113 1, Shareholders equity + noncurrent liabilities / non-current assets 108% 104% + 4% Net cash (1) (1) Including payment of interim dividend of 178 M in December

32 Ordinary dividend for 2016 Yield (1) 6.2% 5.9% 11.6% 3.9% per share (extraordinary) % 8.20 (2)(4) per share Dividend in millions of per share (2)(3)(4) 90 Balance to be paid out per share 178 Interim dividend paid on Dec. 9, (1) Based on share price at December 31 (2) If the proposed dividend of 8.20 per share is approved by the Shareholders' Meeting of April 11, 2017 (3) Based on the number of shares at December 31, 2016 (4) Including an interim dividend of 5.45 per share ( 178 million) paid in December

33 33 04 Outlook 2017

34 Major contracts secured at end-2016 Construction of Hódmezővásárhely bypass on Route 47 in Hungary - order intake: 91 M - duration: 18 months Earthworks, civil engineering, rail work for a mining client in Guinea-Conakry - order intake: 129 M - duration: 18 months Installing natural gas pipelines on the Gascogne- Midi artery and in Saône-et-Loire - order intake : 91 M - duration: 24 months 34

35 Other major contracts secured in 2016 Extension of seaport in Calais, France (design-build) - order intake : 75 M (Colas share) - work starts in 2018 Construction of extension of lines A and C of the Algiers metro - order intake: 86 M (Colas Rail share) - duration: 22 months 35

36 High level of work-on-hand in billions of End- December 2016 Change 16/15 Mainland France % International and French Overseas 4.2-3% Total for the Group % A slight improvement of 1% (+ 2% at constant exchange rates) - increase in work-on-hand in Mainland France - unchanged work-on-hand at constant exchange rates for International and Overseas units 36

37 Outlook 2017 Roads and Specialized Activities Activity could increase slightly for the Roads segment in Mainland France - low point probably reached in 2016 after several years of decline - continued pursuit of objectives: broadening range of activities of the subsidiaries, transforming organization and operating procedures, and improving operating margin International Roads segment, particularly in North America and central Europe, should enjoy growth - first positive effects of infrastructure plans expected in the United Kingdom, Canada and the United States - road and motorway contracts financed by European funds in Central Europe Railways should record a good level of business in France For other Specialized Activities - Networks (Spac), with a high level of work-on-hand, and Waterproofing (Smac), with a recovery in the Building market, should benefit from an increase in business - only Safety and Signaling will continue to operate in a sluggish market 37

38 Conclusion In 2016, Colas improved its financial performance in an economic environment that remained not very favorable to public investment The whole of the Group s action plans, adaptation plans and development plans have begun to bear fruit; in particular, the process of adapting road subsidiaries in France to a historically low market is a success Activities that have negatively impacted income in recent years, such as refining in France or civil engineering in the United States, have been stopped A new organization, with a dedicated subsidiary called Colas Projects, has been set up to manage major projects with a cross-divisional approach with local subsidiaries: the goal is to increase Colas' market share in a targeted manner, improve the construction process and profitability Strategy remains unchanged, with in particular continued development outside of France. Colas has the financial resources necessary for this growth (organic or through acquisitions) Based on forecasts and all available information, at constant scope, revenue in 2017 should be higher than in

39 39 05 Appendix

40 Colas by business sector in billions of Roads % Specialized activities % 11.0 Road construction (incl. civil engineering and building) Sales of construction materials % % RAILWAYS (Colas Rail) 9% WATERPROOFING (Smac) 5% SAFETY AND SIGNALING (Aximum) 2% NETWORKS (Spac) 2% 40

41 Geographic breakdown of revenue % 9% 18% 16% 51% 52% 22% 23% France North America Europe (excl.france) Rest of the World 41

42 Revenue by operating sector in millions of Change 16/15 At constant scope and exchange rates 16/15 Roads Mainland France 3,990 3, % + 0.2% Roads Europe 1,374 1,674-18% - 16% Roads North America 2,474 2,666-7% - 6% Roads Rest of the World 1,133 1,395-19% - 4% Total Roads 8,971 9,717-8% - 5% Specialized Activities (1) 2,016 2,227-9% - 3% Parent company ns ns Total 11,006 11,960-8% - 4% (1) Of which sales of refined products in France