Half-year report June 30, 2017

Transcription

1 Your operational leasing solution Half-year report June 30, 2017 The present half-year financial report has been drawn up in accordance with Article L III of the French Monetary and Financial Code and Articles and of the General Regulations of the French Financial Market Authority (AMF). 1

2 Contents 1. Half-year progress report on the interim financial statements to June 30, Key figures Reminder concerning the businesses Variation in consolidated revenue Variation in the Group's results Other items of the consolidated results Group consolidated balance sheet Principal outstanding investments Significant events during the first half of Post balance sheet events Outlook Risks and uncertainties regarding the second half-year Principal related-party transactions Condensed consolidated half-year financial statements Attestation by the authors of the half-year financial report Statutory auditors' report on the half-year financial report 41 2

3 1.HALF-YEAR PROGRESS REPORT ON THE INTERIM FINANCIAL STATEMENTS TO JUNE 30, 2017 Preliminary note: On 3 July 2017, TOUAX announced the intended saleof all shares held in Touax Solutions Modulaires SAS. Thus, the modular division operating in Europe would be taken over by a fund company managed by TDR Capital LLP. TDR Capital manages funds with a majority shareholding in Algeco. TDR Capital and TOUAX aim to close the transaction in the 2nd half of 2017, following the information/consultation of employee representatives and subject to receipt of the necessary approvals. This transaction will strengthen the balance sheet and the financial capacity of our Group. It is fully in line with our strategic direction of concentrating and further developing the leasing of transport equipment (railcars, barges and containers) driven by the continued growth of world trade. As regards its other modular activities outside Europe, TOUAX has also signed a mandate to sell its activities in the United States and intends to expand its activities in Africa (with its subsidiary 51% owned by TOUAX and 49% by a private equity firm). In accordance with IFRS 5 (as of 30 June 2017), the Europe and US modular buildings activity is presented as discontinued operations. In practice, revenues and expenses have been treated as follows: The contribution to each line of the TOUAX consolidated income statement is grouped under "Net income from discontinued operations" over the periods presented; In accordance with IFRS 5, these restatements are applied to all periods presented in order to make the information consistent. In addition, the assets and liabilities of discontinued operations are grouped together under a single line of assets and liabilities for the period ended 30 June KEY FIGURES The tables below show extracts from the income statements, statements of financial position and cash flow statements from the condensed consolidated financial statements for the six-month periods to June 30, 2017 and June 30, 2016 and full-year The financial information given below must be understood in the light of the condensed consolidated financial statements and the other information given in the half-year progress report given below. In accordance with IFRS 5, the financial statements have been restated (see preliminary note). 3

4 Leasing revenue Sales of equipment including sales to clients including sales to investors Revenue from ordinary activities EBITDAR EBITDA(1) Operating income Consolidated net attributable income - Group's share (13 910) (4 366) (11 583) Included the net income from discontinued activities (13 837) (3 091) (7 669) Earnings per share (euro) (1,99) (0,74) (1,82) (1) EBITDA corresponds to the EBITDAR after deducting distributions to investors (previously called EBITDA after distribution to investors) Total assets Gross tangible fixed assets (1) Total non-current assets Shareholders' equity - Group's share Consolidated shareholder's equity Minority interests Gross financial debt Net financial debt Net dividend per share NA NA NA (1) The gross tangible assets do not include the value of capital gains on internal disposals and assets on discontinued businesses at June 30, 2017 representing an impact of 303 million (2) The net debt is the gross debt after deducting cash assets and liabilities on derivatives, liabilities associated with assets of discontinued businesses were also adjusted, representing an impact of 132,7 millions 1.2.REMINDER CONCERNING THE BUSINESSES TOUAX leases, sells freight railcars, river barges and shipping containers as well as modular buildings throughout the world, on its own behalf and on behalf of investors. With managed assets worth over 1.3 billion, TOUAX is one of the European leaders for leasing this type of equipment. TOUAX is present on all five continents and achieved revenue of million in the period to June 30, 2017, of which 99% was achieved outside France. Freight Railcars division TOUAX Rail Ltd, a wholly-owned subsidiary of TOUAX, operated circa 9,251 platforms (6,983 railcars) at the end of June The Group is specialized in 45, 60, 90 and 106 flat intermodal railcars, but also markets car-carrier railcars and hopper railcars. The currency of the Freight Railcars division is the euro in Europe, the dollar in the United States and the Indian rupee in India. In Europe, the Group offers its leasing and maintenance services via a network of agencies and agents located in most of the European countries. TOUAX may also sell used and new railcars. TOUAX offers complete hedging to all its clients. The Group mainly operates railcars on its own behalf (73% of the managed fleet in number of platforms) and partly through third-party asset management (27% of the managed fleet in number of platforms). 4

5 River Barges division The TOUAX Group is present Europe and North and South America with a fleet of 119 barges at the end of June 2017 for its own and for third parties, representing a capacity of over 309,000 tons. TOUAX provides its services: - in France on the Seine and Rhone, - in Northern Europe on the Rhine (Meuse, Moselle, Main), - in Central Europe on the Danube, - in North America on the Mississippi, - in South America on the Paraná-Paraguay. TOUAX offers its customers comprehensive expertise in the field of river transport, in particular with leasing and trade in river transport equipment. The currency of the River Barges division is the dollar in the United States and South America, and the euro in Europe. TOUAX's customers are river logistics operators and industrial companies. Shipping Containers division Through Touax Global Container Solutions, TOUAX managed a fleet of about 532,000 CEU at the end of June 2017, making it the leader in Continental Europe and the eight largest leasing company in the world. The Group specializes in standard dry containers (20 feet, 40 feet, and 40 feet high capacity) which can be leased to all shipping companies worldwide. The average age of its fleet is of 9 years. 94% (number of CEU) of the shipping containers are managed on behalf of third-party investors, and the remainder belongs to the Group. The Shipping Containers division deals in US dollars. TOUAX Global Container Solutions offers a very extensive range of contracts: - short-term operational leasing (annually renewable master lease or one way leasing), - long-term operational leasing (3 to 7 years) with or without an option to buy (these contracts account for 89% of the fleet managed), - financial leasing (sale and leaseback and lease-purchase program). TOUAX also sells new and used containers. The Group's utilization rate was of 97.5% on June 30, TOUAX Global Container Solutions works with over 120 shipping companies worldwide and with top 25 firms. Customers include for example Maersk Lines, Hapag Lloyd, Evergreen, Mediterranean Shipping Company, CMA-CGM, China Shipping etc. The Group is present at the international level with a network of 8 offices (Hong-Kong, Miami, Bremen, Genoa, Shanghai, Singapore, San Francisco and Sao Paulo) and 2 agencies located in South Africa and South Korea, and works with about 200 warehouses located in the main port zones in the world, thereby offering global cover to all its customers. Modular Buildings division Discontinued operations On 3 July 2017, TOUAX announced the intended sale of all the shares held in TOUAX Solutions Modulaires SAS to one of the funds managed by TDR Capital LLP and signed the share purchase agreement on 4 August The closing of transaction will occur following receipt of the necessary approvals with a closing scheduled for the last quarter of TOUAX has also signed a mandate to sell its Modular buildings activities in the United States and intends to expand its activities in Africa (with its subsidiary owned 51% by TOUAX and 49% by a private equity firm) VARIATION IN CONSOLIDATED REVENUE Total revenue increased by 11 million (equal to +9.9 %), from million in June 2016 to million in June Revenue from retained businesses increased by 1.87% with constant currency and scope (adjusted with the inclusion of TRF3 in the perimeter). 5

6 Leasing revenue increased by 5 million, from 71.3 million at 30 June 2016 to 76.3 million on 30 June 2017, equal to a variation of +7%. The variation in leasing revenue at constant scope and currency is -4.2% (impact of TRF3 at S1 2017: 6.5 million) mainly resulting from the decline in the shipping container fleet due to the sale of used assets in The freight railcar leasing business is growing strongly thanks to the integration of revenues from the fleet owned by the subsidiary TRF3 (a fully-consolidated subsidiary since early January 2017). The leasing activity of the River Barges division increased by 1.4 million. This change is explained by the increased chartering carried out by our subsidiary in the Netherlands. The leasing activity of the Shipping Containers division is down 5.46%. This variation is explained by the transfer of used containers and container returns followed by lower leasing prices in Equipment sales increased by 6 million (equal to +15%) increasing from 40.2 million on 30 June 2016 to 46.2 million on 30 June Sales to end customers were up by 35%. Many used containers were sold in 2016, while few used containers were available for sale in the first half of Sales to investors are increasing due to railcar syndications (+112%). Analysis by division Revenues by business Variation June /2017 FREIGHT RAILCARS ,4% Leasing revenues (1) ,3% Sale of new and used equipment ,7% RIVER BARGES ,6% Leasing revenues (1) ,9% Sale of new and used equipment (818) -87,5% SHIPPING CONTAINERS (15 918) -19,9% Leasing revenues (1) (2 564) -5,5% Sale of new and used equipment (13 354) -40,3% Other (Misc. and offsets) (2 234) -59,1% Leasing revenues (1) (92) 222 (314) -141,4% 171 Sale of new and used equipment (1 920) -53,9% TOTAL ,9% (1) Leasing revenue includes ancillary services. Revenues have been restated in accordance with IFRS 5 (see preliminary note). Analysis by geographical area Revenues by geographical area Variation June / International (16 155) -20,2% Americas (318) -10,8% Europe ,0% Other (478) -15,8% TOTAL ,9% In the Freight Railcars and River Barges divisions, the services are provided in the sector where the markets and customers are located. The Shipping Containers division is present at the international level, since the shipping containers travel on hundreds of global trade routes. 6

7 Quarterly information restated in accordance with the application of IFRS 5 following the transfer in progress of the leasing of modular buildings in Europe and the United States, neither audited or reviewed by the Statutory Auditors. Revenues by quarter Q Q Total Leasing revenue Sales of equipment Including sales to clients Including sales to investors Freight Railcars Leasing revenue Sales of equipment Including sales to clients Including sales to investors River barges Leasing revenue Sales of equipment Including sales to clients Including sales to investors (100) Shipping containers Leasing revenue 45 (137) (92) Sales of equipment Including sales to clients Including sales to investors Miscellaneous & unallocated Leasing revenue Sales of equipment Including sales to clients Including sales to investors TOTAL GROUP

8 Revenues by quarter Q Q Q Q Total Leasing revenue Sales of equipment Including sales to clients Including sales to investors Freight Railcars Leasing revenue Sales of equipment Including sales to clients Including sales to investors River barges Leasing revenue Sales of equipment Including sales to clients Including sales to investors Shipping containers Leasing revenue (114) 171 Sales of equipment Including sales to clients Including sales to investors Miscellaneous & unallocated Leasing revenue Sales of equipment Including sales to clients Including sales to investors TOTAL GROUP The variation in revenue (+9.9%) has the following breakdown: Freight railcars The revenue generated by the Freight Railcars division increased by 28.6 million (or +137%), changing from 20.8 million in June 2016 to 49.4 million in June The leasing business, like the sales business, was up. The leasing revenue generated by our Freight Railcars division increased by 6.5 million (or +35%), from 18.3 million in June 2016 to 24.8 million in June The increase in leasing revenues is mainly due to the full consolidation of the TRF3 subsidiary. The average utilisation rate for the first half of 2016 was 81.53%, compared with an average of 80.30% for the 1 st half of Equipment sales in the Freight Railcars division increased by 22.1 million, from 2.5 million in June 2016 to 24.6 million in June 2017 following the completion of major syndications. River barges The revenue generated by the River Barges division increased by 0.6 million (or +8.6%), changing from 6.8 million in June 2016 to 7.4 million in June Chartering in the Netherlands increased significantly offsetting the decline in railcar sales in Shipping containers The revenue generated by the Shipping Container division decreased by 15.9 million (or -19.9%), changing from 80.1 million in June 2016 to 64.2 million in June This change is mainly due to lower sales of containers to customers and investors. The leasing revenue generated by the Shipping Container division fell by 2.6 million (or -5.5%), changing from 47 million in June 2016 to 44.4 million in June At constant Euro/dollar exchange rates, the leasing revenue from our Shipping Containers division fell by 8.2%. The decrease in leasing revenues is due to the transfer of used containers and lower daily leasing rates in The fleet decreased by 70,106 CEU between the two periods (531,529 CEU on ). The utilization rate increased to 97.5% on 30 June 2017 compared with 89.4% on 30 June

9 Equipment sales from the Shipping Container division fell by 13.4 million (or -40%), changing from 33.1 million in June 2016 to 19.8 million in June Huge numbers of used containers were sold in 2016, while few used containers were available for sale in the first half of Investor syndications are also down. Miscellaneous Other activities most notably include modular buildings in Africa. It shows a decrease in its revenues of 2.2 million at 30 June 2017 compared to 30 June 2016 with lower deliveries temporarily. 1.4.VARIATION IN THE GROUP'S RESULTS Segment information is presented in accordance with IFRS 8 based on internal management reports. Result FREIGHT RAILCARS Variation June 2016/ Gross operating margin (EBITDAR) Segment-based results before distribution to investors Leasing revenues owed to investors (1 626) (1 654) 28 (3 667) Segment-based current operating income RIVER BARGES Gross operating margin (EBITDAR) Segment-based results before distribution to investors Leasing revenues owed to investors Segment-based current operating income SHIPPING CONTAINERS Gross operating margin (EBITDAR) (1 496) Segment-based results before distribution to investors (1 628) Leasing revenues owed to investors (28 171) (27 757) (413) (54 215) Segment-based current operating income (1 014) (2 042) 226 TOTAL Gross operating margin (EBITDAR) Segment-based results before distribution to investors Leasing revenues owed to investors (29 797) (29 411) (385) (57 882) Segment-based current operating income Other (misc., non-allocated) (1 742) (1 332) (409) (2 025) Current operating income Other operating revenues and expenses (2 519) Operating income Financial result (4 920) (5 049) 129 (10 722) Shares of profit/(loss) of associates (65) (1 201) Profit before tax 274 (1 136) (5 565) Corporate income tax (94) (444) 350 (473) EARNINGS FROM RETAINED BUSINESSES 180 (1 580) (6 038) EARNINGS FROM DISCONTINUED OPERATIONS (10 363) (3 092) (7 271) (7 664) CONSOLIDATED NET INCOME (10 183) (4 672) (5 510) (13 702) - non controlling interests (Minority interests) from retained businesses 253 (305) 558 (2 124) - non controlling interests (Minority interests) from discontinued operations (1) CONSOLIDATED NET ATTRIBUTABLE INCOME (13 910) (4 366) (9 544) (11 583) Including EARNINGS FROM RETAINED BUSINESSES (73) (1 275) (3 914) Including EARGNINGS FROM DISCONTINUED OPERATIONS (13 837) (3 091) (10 746) (7 669) The financial statements have been restated in accordance with IFRS 5 (see preliminary note). The segment-based results in the Freight Railcars is up by 1.7 million. The 1.5 million increase in sales margin was mainly due to the syndication of wagons to the Luxembourg SICAV. 9

10 The segment-based current operating income in the River Barges division reported an increase of 1.4 million compared to June The resolution of the dispute with a South American customer provided an ad hoc improvement to the operating profit of 1.1 million. The Shipping Containers division shows segment-based results down by 2 million on 30 June The sales and syndication activity was down due to a reduced volume of containers available for sale and a smaller syndication. The Shipping Containers activity is impacted by significant container returns and lower-priced leases in OTHER ITEMS OF THE CONSOLIDATED RESULTS Net distribution to investors The net distribution to investors increased by 0.4 million (or +1.3%), changing from 29.4 million in June 2016 to 29.8 million in June At constant currency, the variation is -1%. The Shipping Containers division makes a major contribution to this item: 28.2 million in June 2017 compared with 27.8 million in June The Shipping Containers division contributed 0.4 million to this increase, while at constant currency, the distribution to investors would decrease by 0.3 million. The Shipping Containers division manages 460,557 CEU on behalf of investors at the end of June 2017 compared to 504,231 CEU at the end of June The decline in the fleet of investors following the sale of second-hand containers in 2016 is greater than the decrease in distribution due to the increase in the utilization rate and the leasing rates in Distributions to investors in the Freight Railcar division were stable at 1.6 million for both periods. It is stated that the leasing revenue includes leasing revenue received on behalf of third parties, leasing revenue due to the Group, and the share of interest on finance leases in which the Group is the lessor. The change in the business mix (proprietary asset management and third-party asset management) results in a change in the revenue distribution rate. In other words, if more leasing revenue is received on behalf of third parties, the revenue distribution rate will be higher. It should be noted that in June 2017 the Group managed equipment worth over 1.3 billion, 69% of which belonged to third parties. Current operating income The current operating income amounted to 3.4 million, compared to 2.8 million in June Other operating income and expenses Other operating income and expenses show an income of 1.8 million related to the change from equity method to the full consolidation method of TRF3 (Railcar division). Financial result The financial result showed an expense of 4.9 million at June 30, 2017 compared with 5 million at 30 June The financial result mainly comprises interest charges. Net result (Group's share) The consolidated net income (Group's share) showed a loss of 13.9 million at 30 June Net earnings per share amounted to ( in June 2016). 1.6.GROUP CONSOLIDATED BALANCE SHEET The consolidated balance sheet total at June 30, 2017 amounted to 629 million, compared with 633 million at December 31, Non-current assets totalled 323 million (including property, plant and equipment worth 299 million at June 30, 2017) compared with 504 million at December 31, 2016 (including property, plant and equipment worth 455 million at December 31, 2016). The restatement of the assets from discontinued operations according to IFRS 5 has a negative impact on non-current assets of million. Long-term financial assets amounted to 4.1 million and remained stable compared with 31 December

11 Stocks at June 30, 2017 amounted to 15.4 million versus 37 million at December 31, The restatement of the assets from discontinued operations according to IFRS 5 impacts on the reduction of stocks equal to 8.2 million. Shareholders equity amounted to million compared with million at December 31, Non-current liabilities amounted to million, down 96.1 million compared with December 2016 ( million). The decrease is due to the reclassification as liabilities relating to assets held for sale for an amount of 98.7 million. Consolidated net financial indebtedness (after deducting cash and marketable securities and Short-term derivative instruments assets) amounted to million, down by million compared with million in December The decrease is due to the reclassification as liabilities of assets held for sale for the gross debt and as assets held for sale for cash at a value of million net. 1.7.PRINCIPAL OUTSTANDING INVESTMENTS Change in gross value assets leased in the first half of 2017 (In thousands of euros) Freight Railcars River Barges Shipping Containers Misc. TOTAL Gross capital assets investments Variation in stock of equipment (9 069) (6 653) (15 722) Sale of capitalized equipment (historical gross value) (16 982) (562) (1 308) (8 627) (27 479) Including discontinued operations (5 075) (5 075) Investments in capital and in stock (558) (7 756) Equipments sold to investors (finance lease) Gross investment in managed assets Capitalized equipment sold to investors Sale of managed equipment (historical value) (43 754) (66 420) (2 345) ( ) Including discontinued operations (2 345) (2 345) Net investment in managed assets (20 698) (60 560) (81 258) NET INVESTMENTS (2 184) (558) (68 316) 266 (70 792) The net fixed and stocked investments represent purchases of fixed and stocked leasing equipment at gross value, decreased by sales at gross value. Main investments on TOUAX s own behalf Net capital assets investments Net intangible investments Net tangible investments (2 633) (11 525) Including inclusion of TRF3 in the perimeter Net financial investments (491) (577) (786) TOTAL NET INVESTMENTS IN ASSETS (3 121) (12 100) These are acquisitions of fixed assets in gross value less the gross values of the transfers of fixed assets. Breakdown by business of net capital assets investments Freight Railcars (230) Including impact of inclusion in the perimeter River Barges (558) (788) (1 206) Shipping Containers (1 103) (1 423) (2 713) Miscellaneous 266 (3 977) (7 951) TOTAL NET INVESTMENTS IN ASSETS (3 121) (10 664) A divestment of assets held on the balance sheet can be noted, explained by the sale of railcars to the Luxembourg SICAV. Firm investment commitments Firm orders and investments at June 30, 2017 amounted to 8.53 million, consisting of 7.37 million for freight railcars and 1.16 million for shipping containers. 11

12 Discontinued operations have not placed an order or made an investment as of 30 June SIGNIFICANT EVENTS DURING THE FIRST HALF OF 2017 On 30 June 2017, the TOUAX Group signed a put option for all shares held in TOUAX Solutions Modulaires SAS, the modular division Touax Europe, with a company controlled by funds managed by TDR Capital LLP. On 3 July 2017, TOUAX announced the intended sale of all the shares held in TOUAX Solutions Modulaires SAS and the signature of a sales advisory mandate for its modular building activities in the United States. The IFRS 5 standard "Non-current Assets Held for Sale and Discontinued Operations" applies to the accounts of 30 June (see note 3) 1.9. POST BALANCE SHEET EVENTS TOUAX paid a coupon to the holders of Undated Super Subordinated Notes (TSSDI) for an amount of 4 million in August On 4 August 2017, TOUAX signed the share purchase agreement all the shares held in TOUAX Solutions Modulaires SAS OUTLOOK The Freight Railcars business in Europe should continue to benefit from the improving European economy along with the rise in utilisation rate. The River Barges business continues to experience a difficult economic context in South America, but has improved in Europe. The Shipping Containers business is benefiting from a worldwide shortage of containers with utilisation rates rising since the beginning of This situation creates a need for investment and an expected growth of the fleet. The context is again favourable for TOUAX which envisages a return to investments as soon as the sale of the European and American modular buildings leasing and sales activity is completed. Losses in the modular buildings business in Europe, particularly in France as well as in the United States, will cease with the respective sales of these businesses. TOUAX confirms an operating profit for the year RISKS AND UNCERTAINTIES REGARDING THE SECOND HALF-YEAR Risk management is set out in the 2016 reference document reference filed with the AMF on April 7, 2017, reference D TOUAX does not expect changes in the risks described in the 2016 reference document PRINCIPAL RELATED-PARTY TRANSACTIONS The nature of the transactions carried out by the Group with related parties is described in Note 30 of the Notes to the 2016 consolidated financial statements. There were no significant changes to related-party transactions during the first half of

13 2.CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS In accordance with IFRS 5 (as of 30 June 2017), European and US Modular Buildings activities are presented as discontinued operations. Income and expenses from discontinued operations were treated as follows: The contribution by these activities to each line of the TOUAX consolidated income statement is grouped under "Net income from discontinued operations" over the periods presented; In accordance with IFRS 5, these restatements are applied to all periods presented in order to make the information consistent. Assets and liabilities of discontinued operations are aggregated on a single line to assets and to liabilities. Consolidated income statement, presented by function Leasing revenue Sales of equipment TOTAL REVENUE Capital gains on disposals Revenue from ordinary activities Cost of sales (42 826) (36 414) (77 454) Operating expenses (25 701) (22 898) (51 729) Sales, general and administrative expenses (11 189) (11 555) (22 585) GROSS OPERATING MARGIN (EBITDAR) Depreciation, amortization and impairments (9 574) (8 443) (17 601) OPERATING INCOME before distribution to investors Net distributions to investors (29 796) (29 411) (57 882) CURRENT OPERATING INCOME Other operating revenues (expenses), net (2 519) OPERATING INCOME Interest income Inerest expense (5 326) (4 847) (9 453) Net interest expense (5 278) (4 709) (9 307) Other financial income (expenses), net 358 (340) (1 415) NET FINANCIAL EXPENSE (4 920) (5 049) (10 722) Profit (loss) of investments in associates (65) PROFIT BEFORE TAX 274 (1 136) (5 565) Income tax benefit (expense) (94) (444) (473) Earnings from retained businesses 180 (1 580) (6 038) Earnings from discontinued operations (10 363) (3 092) (7 664) NET INCOME OF CONSOLIDATED COMPANIES (10 183) (4 672) (13 702) including portion attributable to - non controlling interests (Minority interests) from retained businesses 253 (305) (2 124) - non controlling interests (Minority interests) from discontinued operations (1) 5 CONSOLIDATED NET INCOME (LOSS) (13 910) (4 366) (11 583) Including earnings from retained businesses (73) (1 275) (3 914) Including earnings from discontinued operations (13 837) (3 091) (7 669) Net earning per share (euro) (1,99) (0,74) (1,82) Diluted net earnings per share (euro) (1,99) (0,74) (1,82) The application of IFRS 5 results in the restatement of the consolidated financial statements for the periods presented (see note 3). 13

14 Consolidated income statement, presented by type Note # Revenue Capital gain (loss) on disposals Revenue from ordinary activities Other purchases and external charges (70 515) (63 616) ( ) 6 Staff costs (8 304) (8 255) (15 747) Other operating revenues & expenses (2 709) GROSS OPERATING PROFIT Operating Provisions (2 599) 689 (1 304) GROSS OPERATING MARGIN (EBITDAR) Depreciation, amortization and impairments (9 574) (8 443) (17 601) OPERATING INCOME before distribution to investors Net distributions to investors (29 796) (29 411) (57 882) CURRENT OPERATING INCOME Other revenues (expenses), net (2 519) OPERATING INCOME Interest income Interest expense (5 326) (4 847) (9 453) Net interest expense (5 278) (4 709) (9 307) Other financial income (expenses), net 358 (340) (1 415) 9 NET FNANCIAL EXPENSE (4 920) (5 049) (10 722) Profit (loss) of investments in associates (65) PROFIT BEFORE TAX 274 (1 136) (5 565) 10 Income tax benefit (expense) (94) (444) (473) Earnings from retained businesses 180 (1 580) (6 038) Earnings from discontinued operations (10 363) (3 092) (7 664) NET INCOME OF CONSOLIDATED COMPANIES (10 183) (4 672) (13 702) Including portion attributable to: - non controlling interests (Minority interests) from retained businesses 253 (305) (2 124) - non controlling interests (Minority interests) from discontinued operations (1) 5 CONSOLIDATED NET INCOME (LOSS) (13 910) (4 366) (11 583) Including earnings from retained businesses (73) (1 275) (3 914) Including earnings from discontinued operations (13 837) (3 091) (7 669) Net earnings per share (1,99) (0,74) (1,82) Diluted earnings per share (1,99) (0,74) (1,82) The application of IFRS 5 results in the restatement of the consolidated financial statements for the periods presented (see note 3). 14

15 Statement of comprehensive income for the period (in thousands of Euros) Consolidated net income (loss) (10 183) (4 672) (13 702) Other items of comprehensive income, net of taxes Translation adjustments (2 677) (2 046) Translation adjustments on net investment in subsidiaries (222) (587) (145) Profit and losses on cash flow hedges (efficient part) 254 (580) 847 Profits and losses on cash flow hedges for the share of companies accounted for the equity method (93) Tax on comprehensive income items (105) 161 (3) Total items that may be subsequently reclassified to profit or loss (2 750) (3 052) including non-controlling interests (minority interests) (273) (518) 408 including Owners of the Group s parent company (2 477) (2 534) Net income (loss) for the financial year attributable to: non-controlling interests (minority interests) (306) (2 119) Owners of the Group s parent company (13 910) (4 366) (11 583) Total (10 183) (4 672) (13 702) COMPREHENSIVE INCOME: including non-controlling interests (minority interests) (824) (1 711) including Owners of the Group s parent company (16 387) (6 900) (10 039) TOTAL (12 933) (7 724) (11 750) 15

16 Consolidated balance sheet Note # ASSETS 12 Goodwill Intangible assets Rental equipment & other property plant & equipment, net Long-term financial assets Investments in associates Other non-current assets Deferred tax assets Total non-current assets Inventory and work-in-progress Trade receivables, net Current Financial Assets Other Current Assets Cash and Cash Equivalents Total current assets Assets of discontinued operations TOTAL ASSETS LIABILITIES Share capital Hybrid capital Reserves Profit (loss) for the fiscal year, Group's share (13 910) (4 366) (11 583) Equity attributable to the owners of the parent company Non-controlling interests (Minority interests) Consolidated shareholders' equity Loans and borrowings Deferred tax liabilities Employee benefits Other long-term liabilities Total non-current liabilities Provisions Loans and borrowings Trade payables Other Current Liabilities Total current liabilities Liabilities associated with assets of discontinued operations TOTAL LIABILITIES The application of IFRS 5 results in the restatement of the consolidated financial statements for the 2017 period (see note 3). 16

17 TOUAX GROUP Variation in the fair value of derivatives (swaps) Comprehensive income for the year TOTAL Equity attributable to the owners of the parent company Non controlling interests (Minority TOTAL shareholders' interests) equity Changes in consolidated shareholders' equity Share capital Premiums Consolidated reserves Conversion reserves POSITION AT JANUARY 1, (221) (23 955) Revenue (expenses) recognized directly in (222) (222) shareholders' equity (281) (503) Translation differences (2 280) (2 280) (270) (2 550) Comprehensive income for the year (4 366) (4 366) (306) (4 672) (2 280) (222) (4 366) (6 868) (857) (7 725) TOTAL charges and revenue recognised Capital increases Appropriation of the 2015 net result (23 955) General Partners statutory compensation (362) (362) (362) Change in the reserves 344 (344) Changes in the consolidation perimeter and miscellaneous Treasury shares AT JUNE 30, (787) (4 366) POSITION AT JANUARY 1, (203) (11 583) Revenue (expenses) recognized directly in shareholders' equity Translation differences (2 659) (2 659) (336) (2 995) Comprehensive income for the year (13 910) (13 910) (10 183) (2 659) 182 (13 910) (16 387) (12 933) TOTAL charges and revenue recognised Capital increases (26 405) Appropriation of the 2016 net result (11 583) General Partners statutory compensation (441) (441) (1 938) Dividend (1 497) (1 497) Changes in the consolidation perimeter and 122 (80) 42 miscellaneous Treasury shares (5) (5) (5) AT JUNE 30, (101) (13 910)

18 Consolidated Cash Flow Statement Consolidated net income/(loss) 181 (1 580) (6 038) Profit / (loss) of investments in associates 65 (1 136) (2 058) Depreciation and amortization Change in deferred taxes (134) (137) 80 Capital gains & losses on disposals (1 313) (871) (1 642) Other non-cash income (expenses), net (2 106) Self-financing capacity after cost of net financial debt & tax Net interest expense Income tax paid Self-financing capacity before cost of net financial debt & tax Income tax paid (227) (581) (392) A Change in working capital (excluding changes in inventory) 643 (15 669) (7 029) B Change in inventory C Change in working capital related to rental equipment purchases (6 128) (12 665) (10 814) Purchase of rental equipment (3 132) (5 535) (8 104) Proceed from sale of rental equipment Net impact of finance leases granted to customers Sub-total (6 746) CASH FLOW FROM OPERATING ACTIVITIES GENERATED BY RETAINED BUSINESSES (13 193) CASH FLOW FROM OPERATING ACTIVITIES GENERATED BY DISCOUNTINUED OPERATIONS I - CASH FLOW FROM OPERATING ACTIVITIES (7 252) Investing activities Acquisition of PPE and intangible assets (173) (282) (459) Acquisition of equity interests Net change in financial fixed assets (214) Proceed from sale of property, plant and equipment Change in the scope of consolidation (3) CASH FLOW FROM INVESTING ACTIVITIES GENERATED BY RETAINED BUSINESSES (273) (2) CASH FLOW FROM INVESTING ACTIVITIES GENERATED BY DISCOUNTINUED OPERATIONS (160) (314) (1 354) II - CASH FLOW FROM INVESTING ACTIVITIES (587) (1 356) Financing transactions Receipt from borrowings Repayments of borrowings (29 627) (27 487) (52 962) Net change in borrowings (15 394) (14 042) (25 607) Net increase in shareholders' equity (capital increase) Interest expense (5 278) (4 709) (9 307) Dividends to shareholders of TOUAX SCA Dividends to minority shareholders (1 410) (784) General Partners statutory compensation (362) Hybrid capital coupons (4 039) Net sale (acquisition) of treasury shares (5) CASH FLOW FROM FINANCING TRANSACTIONS GENERATED BY RETAINED BUSINESSES (22 126) (18 711) (29 198) CASH FLOW FROM FINANCING TRANSACTIONS GENERATED BY DISCOUNTINUED OPERATIONS (8 596) (9 207) (17 286) III - CASH FLOW FROM FINANCING TRANSACTIONS (30 722) (27 918) (46 484) Effect of exchange rate fluctuations 47 (438) (158) IV - CASH FLOW FROM EXCHANGE RATE FLUCTUATIONS 47 (438) (158) V - Reclassification of discontinued operations cash and cash equivalents CHANGE IN NET CASH POSITION (I) + (II) + (III) + (IV) (31 770) (17 076) Analysis of cash flow Cash position at start of year Cash position at year end CHANGE IN NET CASH POSITION (31 770) (17 076) 18

19 Net cash includes current bank facilities Change in the operational working capital Decrease/(increase) in inventory B Change in inventory (2) Decrease/(increase) in trade receivables (1 196) (1 368) (76) Decrease/(increase) in other current assets (13) (371) (33) (Decrease)/increase in trade payables (2 224) (1 067) (2 555) (Decrease)/increase in other liabilities (12 863) (4 365) A Change in operating working capital excluding change in inventory (1) 643 (15 669) (7 029) Change in the working capital (1)+(2) (8 776) C Change in Working Capital for investment Decrease / (increase) in receivables / fixed assets (20) Decrease / (increase) in liabilities / fixed assets (6 128) (12 665) (10 794) Change in Working Capital for investment (6 128) (12 665) (10 814) The application of IFRS 5 results in the restatement of the consolidated financial statements for the periods presented (see note 3). NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS note 1. ACCOUNTING RULES AND METHODS note 1.1. BASIS FOR PREPARING AND PRESENTING THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS FOR THE PERIOD TO JUNE 30, 2017 The consolidated financial statements of TOUAX SCA are presented in accordance with international standards (IFRS International Financial Reporting Standards) approved by the European Union. The condensed consolidated half-year financial statements have been drawn up in accordance with IAS 34 "Interim Financial Reporting". The condensed consolidated half-year financial statements do not include all of the information required for the full annual financial statements and must be understood in conjunction with the Group's reference document for the financial year to December 31, The accounting principles and methods of assessment have been applied consistently for the periods presented. The interim financial statements have been drawn up in accordance with the same rules and methods used to draw up the annual financial statements, except for the calculation of the current and deferred income tax expense. The income tax expense has been calculated by applying the estimated annual average tax rate for the current fiscal year for each entity or tax group, to the accounting income for the period. However, for the interim financial statements, in accordance with IAS 34, certain assessments (unless otherwise indicated) may be based to a greater extent on estimates rather than on the annual financial data. In accordance with IFRS 5 (as of 30 June 2017), European and US Modular Buildings activities are presented as discontinued operations. Income and expenses from discontinued operations were treated as follows: The contribution to each line of the TOUAX consolidated income statement is grouped under "Net income from discontinued operations" over the periods presented; In accordance with IFRS 5, these restatements are applied to all periods presented in order to make the information consistent. Assets and liabilities of discontinued operations are aggregated on a single line to assets and to liabilities. The condensed consolidated half-year financial statements for the period to June 30, 2017 and the notes to these financial statements were approved on August 31, 2017 by the TOUAX SCA Management Board. The condensed interim consolidated financial statements are presented in euros rounded up or down to the nearest thousand euros, unless otherwise stated. 19

20 New IFRSs standards and interpretations No amendments or interpretations that had to be applied from 1 st January 2017 had a material impact on the half year consolidated accounts at 30 June The Group does not apply the following rules, which had not been adopted by the European Union on 30 June 2017: IFRS 9 "Financial instruments This new standard simplifies the classification of financial assets into two categories. In light of the initial analyses, the TOUAX Group does not identify any reclassification between the different categories of financial assets (historical cost, fair value). Concerning financial liabilities, IFRS 9 does not change the provisions of IAS 39 except for the change in fair value of financial liabilities recorded today as profit or loss. This change in fair value will be recorded in other global income to avoid any volatility of profit or loss. Today, the TOUAX Group accounts for its Ornane loan at fair value. The new asset impairment model and hedge accounting provisions are being analysed. IFRS 9 is applicable from 1 January IFRS 15 "Revenue from contracts with customers" A typology of activities and contracts with customers has been established in the Shipping Containers Division. A sample of contracts by type is currently being analysed.. There are fewer sales contract types in the Railcar division. Service contracts still need to be analysed. Services and sales are marginal in the Barge division, which is more centred on leasing. Service contracts still need to be analysed. IFRS 15 is applicable from 1 January IFRS 16 "Leasing Contract" The standard will replace IAS 17. The main change to this standard is the removal of the distinction between finance leases and simple operating leases for lessees. Limited exemptions are provided for short-term contracts and those for low-value assets. The TOUAX Group must collect the information needed to measure its impact. This standard will apply from 1 January note 1.2. ESTIMATES Drawing up financial statements in accordance with IFRS standards has led the management to make estimates and assumptions affecting the book value of certain assets and liabilities, income and expenses, as well as the information given in certain notes to the financial statements. Since these assumptions are intrinsically uncertain, the actual figures may differ from the estimates. The Group regularly reviews its estimates and assessments in order to take past experience into account and factor in any elements considered relevant regarding economic conditions. The financial assets and information subject to significant estimates concern in particular the appraisal of any loss in value of tangible assets, valuation of goodwill, financial assets, derivative financial instruments, inventories and work in progress, provisions for risks and charges, and deferred taxes. note 1.3. SEASONAL NATURE OF THE BUSINESS The Group s businesses do not show a marked seasonal activity. note 2. CHANGES IN THE SCOPE OF CONSOLIDATION TFR 3 is an entity in the Freight Railcar division, consolidated by the equity method in 2015 and The acquisition of a majority stake by TOUAX in the capital of TRF3 analysed in accordance with IFRS 10 led to its consolidation under the full consolidation method. 20

21 TXRF4 is an entity in the Freight Railcar division, consolidated by the equity method in The sale of a 1,000,000-share stake and the dilution of TOUAX in the capital of TXRF4 in June 2017 led the TOUAX Group to deconsolidate TXRF4 by the equity method on 30 June 2017 (significant loss of influence). note 3. DISCONTINUED OPERATIONS A non-current asset, or group of assets and liabilities, is held for sale when its accounting amount will be recovered primarily through a sale and not a continuing use. For this to be the case, the asset must be available for immediate sale and sale must be highly probable. The assets and liabilities concerned are reclassified as assets held for sale and as liabilities associated with assets held for sale without the possibility of offsetting. Assets reclassified in this way are recorded at the lowest value out of the fair value net of exit costs and their net accounting amount, in other words their cost minus the accumulated depreciation and impairment losses and are no longer amortized. An activity is considered to be discontinued when it represents a distinct and significant activity for the group and the criteria for classification as assets held for sale have been satisfied. Discontinued operations are presented on a single line of the income statement for the periods presented, including the net after-tax income from discontinued operations up to the date of transfer and the after-tax gain or loss resulting from the disposal or fair value minus the costs of selling the assets and liabilities that constitute the discontinued activities. Similarly, cash flows from discontinued operations are presented on a separate line in the consolidated statement of cash flows for the periods presented. In accordance with IFRS 5 - Non-current assets held for sale and discontinued operations, the Europe and US Modular Buildings activities are presented in the consolidated financial statements of the TOUAX Group as discontinued operations. There are 12 entities involved in the application of IFRS 5. Transfer in progress on 30 June 2017: On 30 June 2017, the TOUAX Group signed a put option for the Europe Modular Buildings activity with TDR Capital. Its implementation is subject to employee representative bodies and to the obtaining of approvals from the competition regulatory authorities. This transaction is expected to be completed in the second half of The TOUAX Group has also decided to sell its Modular Buildings activity in the United States. note 3.1. CONTRIBUTION TO EARNINGS FROM DISCONTINUED OPERATIONS OVER THE PERIODS PRESENTED: Subgroup Touax Solutions Modulaires (European activity) Total revenue Gross operating margin (EBITDAR) Operating income (6 175) Profit before tax (9 164) (906) (3 016) Income tax benefit (expense) (231) (924) (2 300) Net income (9 395) (1 829) (5 317) Including owners of the parent company (12 869) (1 828) (5 322) Including non controlling interests (minority interests) (1) 5 Touax Modular Building USA (US actiivty) Total revenue Gross operating margin (EBITDAR) (312) (665) (909) Operating income (739) (1 080) (1 961) Profit before tax (1 124) (1 400) (2 636) Income tax benefit (expense) Net income (968) (1 262) (2 347) Including owners of the parent company (968) (1 262) (2 347) Including non controlling interests (minority interests) Net income from discontinued operations includes net income from these activities and an additional goodwill depreciation of 1.4 million. 21