Compagnie d'Entreprises CFE SA

Earnings Release • May 23, 2019

Thursday 23 May 2019 – 7h00 CET regulated information

Quarterly information at 31 March 2019

Quarterly information at 31 March 2019

• • Revenue Q1 2019 increases to € 838.4 million
• • Order book stable at € 5.3 billion
• • Increased net financial debt in line with continuing investments at DEME
• • Outlook unchanged for 2019

1. Key figures

Revenue In million €	31/03/2019	31/03/2018	Variation
Dredging and Environment	613.8	584.6	+5.0%
Contracting	226.0	207.1	+9.1%
Other divisions and eliminations	-1.4	2.0	n.s.
Total	838.4	793.7	+5.6%

Order book In million €	31/03/2019	31/12/2018	Variation
Dredging and Environment	3,930.0	4,010.0	-2.0%
Contracting	1,352.9	1,320.3	+2.5%
Other divisions	58.9	55.6	+5.9%
Total	5,341.8	5,385.9	-0.8%

Net financial debt (*) In million €	31/03/2019	31/12/2018	Variation
Dredging and Environment including restatements	601.7	556.0	+8.2%
Other divisions & Holding	113.8	92.3	+23.2%
Total	715.5	648.3	+10.4%

(*) Excluding amounts restated following the implementation of IFRS 16 Leases, of which the impact for the CFE group amounted to €98.5 million at 31 December 2018 and €93.5 million at 31 March 2019.

2. Analysis by division

Dredging, Environmental, Offshore and Infra division

KEY FIGURES

In million €	31/03/2019	31/12/2018	31/03/2018
Revenue	613.8	2.645.8	584.6
Net financial debt (*)	601.7	555.8	527.8
Order book	3,930.0	4,010.0	3,365.0

(*) Excluding amounts restated to take account of the recognition at fair value of the identifiable assets and liabilities of DEME following the acquisition of an additional 50% of the DEME shares on 24 December 2013 and amounts restated following the implementation of IFRS 16 Leases.

REVENUE

DEME's revenue in the first quarter of 2019 amounted to € 613.8 million, which is up 5% compared to the first quarter of 2018.

44% of revenue was realized by the Dredging segment, which reported a very high level of activity in Singapore, Qatar, India and Africa.

In the Offshore segment (about 40% of revenue in the first quarter of 2019), DEME finished installing the monopiles and transition pieces of the German Hohe See offshore wind farm. In Belgium, preparations have begun for the production of the foundations and subsea cables for the SeaMade offshore wind farm, while production of the cables for the MOG (Modular Offshore Grid) is progressing well.

In the UK, DEME Offshore finalized the installation of the cables and foundations for the world's largest offshore wind farm, Hornsea Project 1.

Work on the three major civil engineering projects in the Netherlands (Rijnland Route, the Terneuzen lock, and the Blankenburg connection) is being ramped up.

ORDER BOOK

DEME's order book remains well filled at € 3.93 billion as of 31 March 2019.

During the first quarter, DEME secured, among others, the extension of its dredging contract in Papua New Guinea (Lower Ok Tedi River project). This contract has been extended with 5 years.

Three major orders are not included in the order book at 31 March 2019, notably

• the contract for the Fehmarnbelt link (€ 710 million),
• the contract for the widening and deepening of the Elbe over a length of 116 kilometres between Cuxhaven and Hamburg in Germany. This contract, worth € 200 million, will be included in the order book during the second quarter 2019,
• the contract for the transport and installation of 165 foundations, transition pieces and turbines for the Hornsea Two wind farm in the United Kingdom. This contract, worth more than € 200 million, will be included in the order book during the second quarter 2019.

INVESTMENTS AND NET FINANCIAL DEBT

Investments in the first quarter amounted to € 80 million.

The trailing suction hopper dredger 'Bonny River', with a capacity of 15,000 m³, will join DEME's fleet at the end of the first semester 2019. The 'Bonny River' can dredge the seabed down to a depth of more than 100 metres and, like all the new vessels of DEME's fleet, is equipped with engines that can run on diesel or on liquefied natural gas (LNG).

As was announced earlier, the jack-up vessel 'Innovation' is out of service for about four months (until August) due to major maintenance.

The net financial debt of DEME amounted to € 601.7 million (excluding impact IFRS 16), which is up € 45.9 million on 31 December 2018. The new IFRS 16 standard on leases and lease contracts became effective on 1 January 2019. The implementation of this new standard resulted in an increase in DEME's net financial debt by € 83.2 million at 31 December 2018. At 31 March 2019, the impact amounted to € 79.6 million.

During the first quarter of 2019, DEME successfully refinanced its € 200 million bond.

Contracting division

KEY FIGURES

In million €	31/03/2019	31/12/2018	31/03/2018
Revenue	226.0	934.6	207.1
Order book	1,352.9	1,320.3	1,121.3

REVENUE

In million €	31/03/2019	31/03/2018
Construction	172.9	154.2
Buildings, Belgium	130.2	117.5
Buildings, International	42.7	36.7
Multitechnics	36.6	37.5
Rail & Utilities	16.5	15.4
Total Contracting	226.0	207.1

Revenue for CFE Contracting in the first quarter of 2019 amounted to € 226 million, which is up 9.1% compared to the first quarter of 2018.

Growth of activity was reported primarily in Flanders and Poland.

ORDER BOOK

In million €	31/03/2019	31/12/2018
Construction	960.7	1,069.1
Buildings, Belgium	799.3	870.9
Buildings, International	161.4	198.2
Multitechnics	187.5	168.4
Rail & Utilities	204.7	82.8
Total Contracting	1,352.9	1,320.3

The order book increased by 2.5% to € 1.35 billion. Order intake was particularly high in the Rail & Utilities segment, which won, in joint venture, the contract for the design, modernization, finance, management and 20-year maintenance of the public lighting along the main roads and motorways in the Walloon region. Financial close was reached on 13 February 2019. Furthermore, several orders linked to the framework contract ETCS 2 (automatic braking system for trains) also entered the order book during the first quarter of 2019.

Real Estate division

EVOLUTION OF REAL ESTATE PROJECTS

In million €	31/03/2019	31/12/2018
Properties being marketed	4	4
Properties under construction	75	70
Properties in development	68	65
Total	147	139

The commercialisation of the residential projects in the three countries where BPI is active evolves well. The stock of the built but unsold properties remains very low.

During the first quarter, BPI acquired a building plot in Tervuren (Flanders) for the construction of a mixed-use real estate complex of 6,000 m² for housing, co-working and a crèche.

In Poland, BPI finalized the sale upon completion of construction of the retail premises (approximately 4,500 m²) of the Bulwary Ksiazece project in Wroclaw.

Holding, Non-transferred Operations, Interdivision Eliminations

RENT-A-PORT:

During the first quarter of 2019, CFE increased its stake in Rent-A-Port from 45% to 50%. Rent-A-Port is equally owned by CFE and Ackermans & van Haaren.

CHAD:

The amount of the outstanding receivables from the Chadian government has not changed since the beginning of 2019. Negotiations with the Afrexim Bank are continuing.

Perspectives 2019

CFE reiterates the outlook which it communicated at the end of February 2019:

DEME's revenue is expected to remain stable in 2019. The EBITDA margin expressed as a percentage of revenue is expected to stay within the historical range between 16% and 20%.

The revenue of the Contracting division should at least remain stable in 2019, while its operating income is expected to increase slightly.

The operating income of the Real Estate Development division in 2019 is expected to remain close to that of 2018.

3. Corporate governance

The general meeting of shareholders of 2 May 2019 approved the renewal of the mandate of Ciska Servais SPRL, represented by Ciska Servais, for a period of four years, ending after the annual general meeting of May 2023. Ciska Servais SPRL no longer meets the independence criteria defined in Article 526c of the Companies Code and in the 2009 Belgian Corporate Governance Code.

The Board of Directors has taken note of the resignation of Alain Bernard as director of CFE with effect from 2 May 2019. Alain Bernard remains a director of DEME and some of its subsidiaries.

4. Shareholders' agenda

Publication of half-year financial statements	30 August 2019 (before opening of the stock market)
Publication of interim statements	22 November 2019 (before opening of the stock market)

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About CFE

CFE, founded in 1880 is a Belgian industrial group active in three different divisions. The first, Dredging, Environment, Offshore and Infra, is carried out by its wholly owned subsidiary DEME, one of the world leaders in the field. DEME has a modern fleet of multipurpose vessels equipped with the latest technologies. The second, Contracting, encompasses the group's construction, multitechnics and rail activities in Belgium, Luxembourg and Poland. The third, Real Estate Development, covers the real estate projects developed by BPI in Belgium, Luxembourg and Poland.

Sustainability and innovation are important themes for which the CFE group is willing to accept responsibility, among other things by the use of digital technology in the areas of productivity, safety, employee well-being and customer satisfaction. The CFE group currently employs more than 8,000 people and is active on every continent. CFE is listed on Euronext Brussels and is 60.76% owned by Ackermans & van Haaren.

This press release is available on our website at www.cfe.be.

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Note to editors:

For further information, please contact, at CFE:

• Piet Dejonghe, Chief Executive Officer, tel. +32.2.661.13.19, piet_dejonghe@cfe.be
• Fabien De Jonge, Chief Financial Officer, tel. +32 2 661 13 12, fabien_de_jonge@cfe.be