Information Meeting - Colas...Consolidated key figures 2010 2009 Variation 10/09 Revenue Mainland...
Transcript of Information Meeting - Colas...Consolidated key figures 2010 2009 Variation 10/09 Revenue Mainland...
March 3, 2011
Information Meeting
Contents
The year 2010
Financial statements
Outlook for 2011
Appendix
The year 2010
Consolidated key figures
2010 2009 Variation
10/09
Revenue
Mainland France
International
and French overseas
11,661
6,299
5,362
11,581
6,272
5,309
+ 0.7%
+ 0.4%
+ 1.0%
Current operating income 365 541 - 33%
Current operating margin 3.1% 4.7% - 1.6 pt
Net profit (Group share) 224 387 - 42%
in millions of €
Business up slightly by 1%
2010 2009 Variation
10/09
comparable exchange
rates and scope
of business
10/09
Mainland France 6,299 6,272 + 0.4% - 2.7%
French overseas depts. 362 426 - 15.0% - 15.0%
Total France 6,661 6,698 - 0.6% -3.5%
North America 2,211 1,925 + 14.9% + 2.9%
Northern Europe 1,139 986 + 15.5% + 11.7%
Central Europe 702 1,061 - 33.8% - 34.6%
Rest of world 948 911 + 4.1% + 3.1%
Total International 5,000 4,883 + 2.4% - 3.5%
Total 11,661 11,581 + 0.7% - 3.5%
Av. exchange rate €/USD
Av. exchange rate €/CAD
1.32
1.37
1.40
1.58
Total currency effect + €265 M
in millions of €
Drop in profitability
2010 2009 Variation
10/09
Net profit (Group share) 224 387 (163)
% of revenue 1.9% 3.3% - 1.4 pt
in millions of €
> Two reasons:
drop in current operating income
high non-current operating expenses
Drop in current operating income
2010 2009 Variation
10/09
Current operating income 365 541 (176)
in millions of €
2/3 of decrease due to current operating losses in Colas’ central
European subsidiaries: €109 M
Eroding profit margins in France where competition is intense,
even though income figures remain correct
Shortage of major contracts in Africa and the Indian Ocean
Cost of streamlining and adaptation plans
Good performance in North America, in Asia and in specialized lines
of business
+
-
High non-current operating expenses: €52 M
Old antitrust fines
Depreciation of all goodwill in central Europe during the year
2010: region by region
Central Europe: sharp dive in business -50% in 2 years in millions of €
Slovakia
Hungary
Croatia
Romania
Poland
Czech Republic
in €M
- 34% - 22%
Central Europe: heavy current operating losses €109 M
Heavily impacted by 2008-2009 financial crisis
Shrinking of conventional business markets (e.g., Croatia)
Intense competition (companies with surpluses)
> Difficulty to quickly adapt to sharp, brutal fall
No relay for major projects following completion of PPP on M6
Motorway in Hungary
Cancellation of PPP contract for D1 Motorway in Slovakia
(8-month wait > structural costs)
Delays in work on projects in Romania
Losses on projects in Slovakia
Managerial errors in some companies
Central Europe: action plans
The action plans were tailor-made for each country in light of their
specific situation.
> A shared strategy: streamline businesses without undermining
the future (medium-term infrastructure needs remain high)
Workforce is cut in Croatia and Slovakia and trimmed in other
countries:
– 12/2009: 7,300
– 12/2010: 5,450
New management staff:
– Hungary, Slovakia, Croatia in 2010
– Romania in 2009
Completion of difficult contracts by boosting means and expertise
Disinvestment in equipment and plant
Goal: equilibrium in 2012 with reduced business levels
if needed
- 25%
French overseas departments: business is down 15%
Revenue: €362 million
Guadeloupe Martinique French Guiana Reunion Island
French overseas departments: business and actions plans
Reunion Island: recession in the wake of completion
of major projects (Tamarind Road)
– slump in private investment after changes to French tax
law (impact on Building sector)
– cancellation of Tram-train PPP
Caribbean: market remains sluggish after 2009 social
crisis (shortage of public and private investment)
French Guiana: good levels of business
> Actions plans:
– Reunion Island: streamlining the company to fit
with business levels
• workforce 2010/2008: -45%
• transfer of equipment and employees to other zones
– Caribbean:
• workforce 2010/2009: -7%
Mainland France:
Roads(1): -0.7%
Safety, signaling: +1.8%
Civil engineering,
Pipes, mains: -2.0%
Waterproofing: +0.4%
Railways: +13.8%
- market retracted slightly - tough competition pushed prices down
Revenue: €6.3 billion
(1) including Building and Deconstruction
Mainland France: business
Roads:
– harsh winter weather and impact of nationwide protests
in October/November
– local authorities remain cautious to invest (uncertainty hovers
about impact of suppression of France’s professional tax)
– major disparities between regions, départements, urban-rural
zones
– overall price drop despite high business volumes
Safety, Signaling: conventional market off slightly,
acquisition of Sagecom
Pipes and mains: slump in traditional business, offset by major
projects in the natural gas sector (pipelines, compressor stations)
Waterproofing: held up well despite drop in photovoltaic sector,
acquisition of Linea BTP
Railways: buoyant market (tramways, upgrading and maintenance
of railways)
Mainland France: action plan
Efforts continue to streamline overheads
and structures
Market analysis and positioning are being enhanced
Worksite productivity and industrial production chain are
being improved
Incessant effort to mediate margins, volumes
and structures
Target: improve profitability in roads sector
and specialized activities in France
Africa/Indian Ocean: stability
Revenue: €679 million
Africa / Indian Ocean: business
Morocco: market has returned to less euphoric situation
with greater competition
West and Central Africa: a “passable” year
Southern Africa: business boosted by World Cup
Madagascar: business limited to completion of mining
contracts, political situation at a standstill
> transfer of employees and equipment to other profit centers
(e.g., Mauritius), well anticipated with launch
in 2009
Mauritius: buoyant market
Mayotte: satisfactory business
Northern Europe: a solid year
Revenue:
€1.14 billion
+ 16%
Northern Europe: business units held up well
Great Britain:
– recurrent business thanks to:
• 4 long-term MAC contracts for road network management
and maintenance (Areas 14, 10, 7, 12) > 3,500-km long
network
• 2 long-term MAC contracts for railway track renewal
– positive impact of government stimulus package during 1st
half-year 2010
Switzerland: major highway projects in addition
to traditional business
Belgium: buoyant business
Denmark: disparities between 1st and 2nd half-year
Ireland: stability despite difficult economic situation
Asia/Australia: a dynamic market
Production, storage, transformation, sales of bitumen and
oil products
> the network:
• 1 bitumen refining unit
• 27 emulsion plants
• 20 bitumen depots
• 7 bitumen tankers
Revenue(1): €237 million
(1) not including revenue of Thai subsidiary which
is posted with equity method
Asia/Australia: a satisfactory year
Bitumen sales 1 million tons in 2010
Kemaman bitumen refinery in Malaysia:
a good year (630,000 tons in 2010)
Commissioning of the 8th emulsion plant in India
New bitumen depots in Vietnam, India, Indonesia
Australia: increased stake in subsidiary from 51%
to 94%
> Continued focus on industrial and sales strategies:
extension of bitumen storage capacity and distribution
network
North America: excellent performance
+15%
Comparable exchange rates
and scope of business: + 3%
Revenue:
€2.2 billion
States, Provinces, Territories where Colas operates
States where companies acquired in 2010 have a foothold
North America: excellent performance
Business was upbeat in 2010:
– Canada: dynamic market
• long-term infrastructure upgrading program in Quebec
• private investment back on track in West
– United States:
• positive impact of 2nd year of stimulus plan
• budding recovery of private sector at the end of the year
• activity is focusing on maintenance techniques
Acquisition of two road companies in USA in July:
– reinforce network in Georgia
– gateway to new States in Midwest and Southeast
> Operating profit margins remain high
> Opportunities for external growth
SRD: Société de la Raffinerie de Dunkerque
Acquisition of 100% stake at the end of June 2010
Special products refinery:
– 300,000 tons of bitumen per year (1/4 of needs of Colas companies in France)
– 660,000 tons of fuel, base oils, wax and paraffin per year
Target: optimize bitumen supplies for Group companies in France
> Reinforced bitumen strategy:
– production:
• SRD in France
• Kemaman in Malaysia
– storage: building an international network of bitumen depots
– sales and trading
Financial statements
Financial statements
Income statement
Income statement
in millions of €
2010 2009
Revenue 11,661 11,581
Depreciation, amortization and depletion (470) (481)
Reversals (allocations) of provisions (173) (183)
Depreciation, amortization, depletion and reversals (allocations) of provisions
2010 2009 Variation
10/09
Depreciation, amortization
and depletion (470) (481) (11)
Reversals (allocations) of provisions (173) (183) (10)
in millions of €
Depreciation, amortization and depletion
– the €11 M drop is the result of controlled investments in 2009 and 2010
Reversals (allocations) of provisions (173)
to which are added or deducted:
– reversal of non-used provisions classified in other incomes 114
– allocation and reversals classified in non-current items (36)
– allocation and reversals classified in financial income and expenses (7)
– provisions and impairment regarding associated companies 4
– allocation and reversal of provisions classified in income tax (1)
Net impact of depreciation, amortization, depletion and reversals on income is€(99)
M
Income statement (cont.)
in millions of €
2010 2009
Revenue 11,661 11,581
Depreciation, amortization and depletion (470) (481)
Reversals (allocations) of provisions (173) (183)
Current operating income 365 541
Current operating income by zone
2010 Margin 2009 Margin Variation
10/09
Variation
margin
France 212 3.2% 223 3.4% (11) -0.2%
Europe (88) (5.5%) 35 1.9% (123) -7.4%
of which
central Europe (109) (16.0%) 1 - (110) -16%
North America 163 7.4% 167 8.7% (4) -1.3%
Rest of world 78 6.2% 116 9.1% (38) -2.9%
Total 365 3.1% 541 4.7% (176) -1.6%
in millions of €
Income statement (cont.)
in millions of €
2010 2009
Revenue 11,661 11,581
Depreciation, amortization and depletion (470) (481)
Reversals (allocations) of provisions (173) (183)
Current operating income 365 541
Non-current operating expenses (52) -
Non-current operating expenses
Antitrust fines Depreciation
of Goodwill Total
France (25) - (25)
International (5) (22) (27)
Total (30) (22) (52)
in millions of €
Income statement (cont.)
(34) Interest income (expenses) (30)
Other finance income (costs) (7) 1
Provisions for income taxes (122) (172)
Income from associates 69 55
Net profit 223 391
Minority interests (1) 4
Net profit (Group share) 224 387
in millions of €
2010 2009
Revenue 11,661 11,581
Depreciation, amortization and depletion (470) (481)
Reversals (allocations) of provisions (173) (183)
Current operating income 365 541
Non-current operating expenses (52) -
Operating income 313 541
Financial statements
Cash flow statement
Cash flow statement
2010 2009
Cash generated from operations
(before interest and income tax) 814 1,066
Income tax paid (171) (202)
Net change in working capital
requirements (109) (51)
A Net cash from operating activities 534 813
in millions of €
Cash flow statement (cont.)
2010 2009
Purchase of property, plant
and equipment (480) (399)
Purchase of shares or purchase of assets (83) (12)
Proceeds from sales of property, plant,
equipment and shares 63 43
Other investing activities 43 (16)
B Net cash used in investing activities (457) (384)
in millions of €
Net investments
2010 2009 2008 2007 2006
Equipment, plant, property 480 383 579 681 513
Additions
(financial investments
and assets purchases) 83 28 175 398 143
Disposals (63) (43) (96) (114) (75)
Net investments 500 368 658 965 581
in millions of €
Cash flow statement (cont.)
2010 2009
Change in shareholders’ equity 2 8
Dividends paid (224) (287)
Net increase/decrease of long-term
borrowings (19) 20
Interest income (expenses) (30) (34)
Other - (1)
C Net cash used in financing activities (271) (294)
in millions of €
Cash flow statement (cont.)
in millions of €
2010 2009 Variation
10/09
Cash flow from operating activities in
2010 534 813 (279)
(198) cash flow from
operations
(58) working capital
requirements
Cash flow from investing activities (457) (384) (73)
Cash flow from financing activities (271) (294)
Other 13 6
A
B
C
(181) 141 Net increase (decrease) (A + B + C)
in cash and cash equivalents
incl.
Free cash flow
Free cash flow= cash flow from operations less all financial debts, taxes and net investments
262
303
225
264
426
484
2005 2006 2007 2008 2009 2010
in millions of €
Financial statements
Financial structure
Balance sheet
2010 2009 Variation
10/09
Non-current assets 3,704 3,502 + 202
Current assets 3,972 4,186 (214)
7,676 7,688 (12)
Shareholders’ equity 2,375 2,310 + 65
Non-current liabilities 1,045 957 + 88
Current liabilities 4,256 4,421 (165)
7,676 7,688 (12)
Net cash/debt (57) 117 (174)
Net debt/shareholders’ equity 2.4% (5%)
in millions of €
Changes in net cash position in 2010
Net cash flow
from operations
Other Net CapEx Working
capital
requirements
Cash surplus
from operations
in millions of €
662
-1
-415
-158
88
860 5 (367) (81) 417 2009
Changes in net cash position in 2010 (cont.)
Dividends
paid out
Change
in equity
Change
in scope
Cash
surplus
Net debt
as of 31/12/2010
in millions of €
117
-61
2
-57
Cash surplus
from operations
as of 31/12/2009
-224
88
21
Acquisition
of subsidiaries
and assets
(external growth)
2009 (6) (25) (287) 8 10 417 117
Colas dividend for the period
(1) If the proposed dividend of €6.30 is approved by the Shareholders’ Meeting on April 15, 2011
€6.30(1)
per share
in millions of €
207.2
154.3
205.5
276.4284.8
220.1
2005 2006 2007 2008 2009 2010
Outlook for 2011
Work-on-hand at the end of December
- 2%
- 3%
- 1%
%
10/09
6.26
3.06
3.20
End of
December
2009
6.14
2.98
3.16
End of
December
2010
Mainland France
International
and French overseas
Total Group
in billions of €
Work-on-hand to be completed in 2011
Excluding central Europe, work-on-hand to be completed
in 2011 is up 3.4%.
in billions of €
+ 2%
0%
+ 3%
%
10/09
4.92
2.25
2.67
End of
December
2009
4.99
2.25
2.74
End of
December
2010
Mainland France
International
and French overseas
Total Group
Photo A63
A63 Highway concession in southwest France
Awarded in January 2011 to Atlandes, the concession
company
Duration of concession: 40 years
105-km section (between the towns of Salles
and Saint-Geours-de-Maremne):
– upgrading former Route RN10 to current highway
and environmental standards
– widening to 6 lanes
Construction consortium led by Group road subsidiaries
in southwest (51% of work)
Duration of work: 41 months (start up in fall 2011)
Contract value for work: €500 million
High Energy Performance contract for public lighting/traffic lights in Paris
Awarded in February 2011 to a consortium in which Aximum
holds a 15% stake
(other stakeholders include ETDE, Satelec, Vinci Energies)
High Energy Performance contract for public lighting
and traffic lights in the city of Paris
> energy saving stipulated in contract: 30% over 10 years
Assistance in project management, operating/maintenance of:
– 180,000 street lights
– 140,000 traffic lights
Duration: 10 years
Start date: July 1, 2011
Contract value: €492 million (Aximum’s share: €7.4 million per year)
Outlook for 2011
Central Europe: another difficult year but losses should be cut
thanks to action plans
Northern Europe: markets less upbeat (austerity plans in Great
Britain and Ireland)
Mainland France:
– Roads: market remains strained but no major drops are forecast
• strong willed local authorities
• tramway projects
• major projects
• budding recovery of private investment
– Railways: outlook is favorable (long-term contracts to upgrade infrastructure,
tramways, international projects)
Africa/Indian Ocean/French overseas departments: stability
Outlook for 2011 (cont.)
Asia/Australia: growth
North America: buoyant markets
– in Canada
– in the United States:
• strong foothold in maintenance markets
• external growth opportunities
Conclusion
First hypothesis for revenue in 2011: €11.8 billion
Profitability:
– 2010: low point for profitability
– progressive rise in profitability as of 2011
Colas’ strengths
Growing needs for transport infrastructure maintenance in France
and around the world
> the Group’s historical core business
> decision-makers should spotlight maintenance in current context
Conclusion (cont.)
A worldwide network of durable business units in 40 countries
and 5 continents
Strong position in North America, where needs will remain high
Capacity to fulfill all needs, from small local projects that require quick
reaction times to major projects that require complex studies
High-level expertise in PPP, PFI, Concessions (notably in road and rail
network management) backing regional units
Cutting-edge research and innovation
Tight control of materials in framework of vertical integration strategy
focused on aggregates and bitumen
Solid financial structure
Targeted external growth projects
Strong faith in the future after 2010 “mishap”
Appendix
Breakdown of business at Colas
Roads Building materials
1,738 7,306
Civil engineering, Pipes, mains
Safety Signaling Waterproofing Building Railways
63% 15%
801 328 585 345 558
2,61
7 22%
Specialized activities:
in millions of €
7% 3% 5% 3% 4%
Geographical breakdown of revenue
2009 2010
Mainland France North America Europe (excl. France)
Rest of world French overseas depts.
16.6% 54.6%
17.5%
7.6% 3.7% 3%
54% 19%
16%
8%
Production of aggregates
Millions
of tons
%
10/09
Total production 102.2 - 4%
Mainland France 51.5 - 6%
International and
French overseas 50.7 - 2%
Reserves:
2.7 billion tons
quarries and gravel pits 670
Production of emulsions and binders
Thousands
of tons
%
10/09
Total production 1,584 - 2%
Mainland France 634 - 5%
International and
French overseas 950 + 1%
plants 140
Production of asphalt concrete
Millions
of tons
%
10/09
Total production 46.7 - 4%
Mainland France 21.2 - 6%
International and
French overseas 25.6 - 2%
plants 600