EIFFAGE (EPA:FGR) - Eiffage - Financial information at 31 March 2020
Transparency directive : regulatory news
12/05/2020 17:45
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Vélizy-Villacoublay, 12 May 2020
17:45
Financial information at 31 March 2020
* Activity
- Growth in activity at the start of the year followed by an abrupt fall
mid-March due to the spread of the Covid-19 virus
- Total sales reached EUR3.7bn at 31 March 2020 (-4.3%)
* Outlook
- Solid Contracting order book of EUR15.0bn (+5% over 3 months)
- Decline in activity and results over the year to be expected, this being
inevitable in the context of the current health crisis
* Strengthening of liquidity
- Eiffage: establishment of an additional bank facility
- APRR (A- rating affirmed by S&P): two bond issues
* Publication by the Group of its first Climate report
1 - SALES FOR THE FIRST QUARTER OF 2020
in millions of euros 1st quarter 2019 1st quarter 2020
Construction 923 807
of which Property 205 182
Infrastructures 1,318 1,255
Energy Systems 993 1,002
Sub-total Contracting 3,234 3,064
Concessions (excluding Ifric 12) 682 684
Total Group (excluding Ifric 12) 3,916 3,748
Of which:
France 2,915 2,788
International 1,001 960
Europe outside France 815 784
Rest of world 186 176
Construction revenue (Ifric 12)(**) 70 45
% change
Actual
consolidation Like-for-like
scope (lfl)(*)
-12.6% -13.0%
-4.8% -4.8%
+0.9% +0.5%
-5.3% -5.5%
+0.3% -4.5%
-4.3% -5.3%
-4.4% -5.6%
-4.1% -4.5%
-3.8% -4.3%
-5.4% -5.4%
n.m.
2 - REVIEW OF ACTIVITY
The growth recorded by the Group in the first two months of the year came to an
end mid-March when there was an abrupt fall in activity as a result of the
measures implemented to limit the spread of the Covid-19 virus, whether the
government-ordered lockdown measures or those taken by its construction firms
to overhaul work practices and strengthen basic preventive measures. This
phenomenon was far more pronounced in France, which entered into lockdown on 17
March, than abroad.
In this context, consolidated sales reported by Eiffage for the first quarter
of 2020 reached EUR3.7bn, down by 4.3% on a reported basis and by 5.3% lfl
compared with the first quarter of 2019.
Eiffage has continued to give priority to ensuring the operational continuity
of its activities: for Concessions, service continuity of the motorway, railway
and airport infrastructures managed by the Group; for Contracting, maintaining
supplies of electricity, water and gas, performing hospital maintenance
operations and ensuring food chain continuity.
Various measures have been taken at all of the Group's business lines to
mitigate the effect of this unprecedented crisis on its financial situation.
Sales contributed by the Contracting activities decreased by 5.3% on a reported
basis (and by 5.5% lfl) to nearly EUR3.1bn.
Besides the impact mentioned above, the first quarter had to contend with an
unfavourable base effect, as activity at all divisions was particularly buoyant
in the first quarter of 2019 (+15.9% compared with the first quarter of 2018)
thanks notably to the very mild weather conditions.
Construction: sales of EUR807m (-12.6% on a reported basis and -13.0% lfl)
- For Construction in France, sales decreased by 12.1% (on a reported basis and
lfl) to EUR602m. In Europe outside France, sales decreased by 13.9% (-15.5%
lfl) to EUR205m.
- For Property Development, sales decreased by 11.2% to EUR182m, but held above
their level in 2018. The marketing of new housing units was as upbeat in the
first two months of the year as in 2019, reservations reaching 1,436 at the
end of March 2020 compared with 1,591 at the end of March 2019 and 1,000 at
the end of March 2018.
Infrastructures: sales of EUR1,255m (-4.8% on a reported basis and lfl)
- In France, sales decreased by 5.2% to EUR820m (-5.2% lfl).
- In Europe outside France, sales decreased by 5.6% to EUR303m.
- Outside Europe, sales were stable at EUR132m.
Energy Systems: sales of EUR1,002m (+0.9% on a reported basis and +0.5% lfl)
- In France, sales came to EUR695m, stable on a reported basis (-0.7% lfl).
- In Europe outside France, sales increased by 8.2% to EUR277m.
- Outside Europe, sales reached EUR30m, compared with EUR41m in the first
quarter of 2019.
Sales contributed by Concessions, excluding Construction revenue**, increased
by 0.3% to EUR684m (-4.5% lfl, including a EUR33m contribution by the
Toulouse-Blagnac airport, whose acquisition was closed on 30 December 2019).
The application of the lockdown and border closures in the second fortnight of
March had a major impact on motorway and airport traffic, the latter being more
marginal at the level of the Group's activities.
Overall traffic on the APRR network, as measured by the number of kilometres
travelled, decreased by 8.2% in the first quarter of 2020, with decreases of
9.1% in light vehicle (LV) traffic and 4.3% in heavy goods vehicle (HGV)
traffic. Total revenue contributed by APRR (excluding Construction revenue**)
reached EUR567m (-5.8%).
On the A65 Pau-Langon motorway, overall traffic decreased by 9.4%, with
decreases of 9.8% in LV traffic and 6.6% in HGV traffic. Total revenue
decreased by 5.8% to EUR16m.
On the Millau viaduct, overall traffic decreased by 6.1%, with a decrease of
8.0% in LV traffic but an increase of 2.2% in HGV traffic. Total revenue
decreased by 0.8% to EUR8m.
Revenue contributed by the Avenir motorway in Senegal was stable at EUR13m.
Revenue contributed by the Pierre-Mauroy stadium in Lille amounted to EUR5m.
The new airport concessions (Lille and Toulouse-Blagnac airports) recorded a
15.2% decrease in passenger traffic. Revenue reached EUR38m.
Other concessions and public-private partnerships generated revenue of
EUR37m.
3 - FINANCIAL SITUATION
The Group has a robust financial structure, both at the level of Eiffage S.A.
(and its Contracting subsidiaries), which is not rated, and of its concession
entities, the largest of which is APRR (rated A-).
As at 31 March 2020, Eiffage S.A. and its Contracting subsidiaries had EUR3.2bn
in liquidity, consisting of EUR1.2bn of cash and a line of credit, with no
financial covenant and undrawn. This line of credit, which was increased from
EUR1bn to EUR2bn in May 2019 matures in 2025 with a one-year extension
possible. Liquidity increased by EUR600m from EUR2.6bn as at 31 March 2019,
bearing in mind the significant growth investments made in the past 12 months
due to a EUR1bn increase in the syndicated credit. On 3 March 2020, Eiffage
increased indirectly by 2% its ownership in APRR and Adelac, the net investment
of close to EUR150m being funded out of available cash.
Furthermore, on 15 April 2020, Eiffage S.A. arranged an additional EUR600m
credit facility in the form of a bridge for its securitisation programme, with
no financial covenant and available for six months, with two three-month
extensions possible. This new credit line is intended to substitute itself, in
whole or in part, to its EUR600m trade receivables securitisation programme
that has been in place for 18 years, so as to address the temporary decline in
volumes invoiced.
As at 31 March 2020, APRR had EUR2.7bn in liquidity, consisting of EUR0.7bn of
cash and a line of credit, undrawn. This line of credit, which was increased
from EUR1.8bn to EUR2bn in February 2020 matures in 2025, with two one-year
extensions possible. Liquidity increased by EUR100m from EUR2.6bn as at 31
March 2019.
Furthermore, in January 2020, APRR repaid all of its bonds maturing in 2020 for
EUR1bn, staging two bond issues of EUR0.5bn each, one in January maturing in
three years offering a 0% coupon and one in April maturing in seven years
offering a 1.25% coupon.
In April 2020, APRR also raised EUR400m through the issue of commercial paper
maturing in one year.
Lastly, on 17 April 2020, Standard & Poor's affirmed APRR's A- credit rating,
which remains on Stable outlook.
4 - SIGNIFICANT EVENTS SINCE 31 MARCH 2020
On 7 April 2020, Eiffage, in consortium with JOHANN BUNTE Bauunternehmung,
signed a 30-year PPP agreement to design, widen, operate and maintain the
76-kilometre section of the A3 motorway located between Biebelried and
Fürth/Erlangen, in Germany. The work to design and widen this motorway section
is worth around EUR1.5bn, of which 50%, or around EUR750m, for Eiffage.
On 15 April 2020, the joint venture formed by Eiffage, Kier, BAM Nuttall and
Ferrovial Agroman received the Notice to Proceed for the construction of an
80-kilometre section of the Phase 1 of the future HS2 high- speed rail link
between London and Birmingham in the United Kingdom. The work is worth around
EUR2.6bn, of which 35%, or more than EUR900m, for Eiffage.
These two new contracts will generate around EUR1.7bn of work for the Group and
strengthen the order book in the second quarter of 2020.
On 22 April 2020, Eiffage released its first Climate report, prepared in line
with the recommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD). It details the financial risks and opportunities linked to
the energy transition and climate change. This report is available on the
company's website www.eiffage.com.
5 - OUTLOOK
In Contracting, pilot projects resumed mid-April, initially to test the
application of the recommendations and work procedures implemented by the Group
with the employees representatives, its customers, project managers and
partners. These procedures are essential in protecting employee health and, in
general, the health of third parties working on Eiffage sites. Since then, more
operations have resumed their activity each week, but in downgraded mode. This
recovery should accelerate with the gradual improvement of health conditions in
the various countries where the Group operates.
In Concessions, the lifting of the lockdown measures can be expected to have a
direct impact on traffic.
In these circumstances, it is difficult to draw up projections as regards the
impact of this situation on the Group's full-year results. However, the sharp
deterioration in activity expected in the second quarter, which will be more
pronounced in France than abroad, will inevitably lead to a decline in the
Group's activity and results over the year as a whole.
The order book and the visibility it confers remain a major strength for the
Group in the face of the prevailing uncertainty. At 31 March 2020, the order
book stood at EUR15.0bn for Contracting, a decrease of 2% year-on- year (but an
increase of 5% over three months). This represents 12 months of activity for
the Contracting divisions. The order book does not include the two major
contracts mentioned above, which were closed at the start of April.
Group sales for the second quarter of 2020 and results for the first half of
2020 will be published on 26 August 2020 after trading hours.
Investor relations Press contact
Xavier Ombrédanne Sophie Mairé
Tel: +33 (0)1 71 59 10 56 Tel: +33 (0)1 71 59 10 62
e-mail: xavier.ombredanne@eiffage.com e-mail: sophie.maire@eiffage.com
Appendix
Change in order books (in billions of euros)
At 31/03/2019 At 31/12/2019
Contracting 15.2 14.2
Property 0.6 0.6
Concessions 1.1 1.0
At 31/03/2020 % change % change
year-on-year quarter-on- quarter
15.0 -2% +5%
0.6 +13% +5%
1.0 -3% -1%
Glossary
(**) Construction revenue
of Concessions (Ifric 12) (**) Definition of concessions revenue under
Ifric 12: the Construction revenue of
Concessions corresponds to costs relating to
services to build or improve the
infrastructure committed by the concession
operator determined in accordance with the
requirements of Ifric 12 ,"Service Concession
Arrangements", after elimination of
intragroup operations.
(*)
Like-for-like (lfl)
Constant consolidation
scope and constant
exchange rates Constant consolidation scope: calculated by
neutralising:
- the 2020 contribution made by companies
consolidated for the first time in 2020;
- the 2020 contribution made by companies
consolidated for the first time in 2019,
for the period equivalent to that in 2019
before they were consolidated for the
first time;
- the 2019 contribution made by companies
deconsolidated in 2020, for the period
equivalent to that in 2020 after they were
deconsolidated;
- the 2019 contribution made by companies
deconsolidated in 2019.
Constant exchange rates: 2019 exchange rates
applied to 2020 local currency sales.
Order
book of
Contracting divisions Portion of signed contracts not yet
executed
Group liquidity The Group's liquidity is calculated as
follows:
cash and cash equivalents managed by Eiffage
S.A. and its Contracting subsidiaries +
undrawn credit line(s) of Eiffage S.A.
APRR liquidity APRR's liquidity is calculated as follows:
cash and cash equivalents managed by APRR S.A.
+ undrawn credit line(s) of APRR S.A.