Earnings Release • Feb 28, 2019
Earnings Release
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Tuesday 28 February 2019 regulated information
| In million € | 2018 | 2017 | Change 2018/2017 |
|---|---|---|---|
| Revenue | 3,640.6 | 3,066.5 | +18.7% |
| Self-financing capacity (EBITDA) (*) | 488.0 | 500.7 | -2.5% |
| % of revenue | 13.4% | 16.3% | |
| Operating income (EBIT) (*) | 227.2 | 249.4 | -8.9% |
| % of revenue | 6.2% | 8.1% | |
| Net income share of the group | 171.5 | 180.4 | -4.9% |
| % of revenue | 4.7% | 5.9% | |
| Earnings per share (in euro) | 6.78 | 7.13 | -4.9% |
| Gross dividend per share (in euro) (**) | 2.40 | 2.40 | 0.0% |
(*) The definitions are included in the 'Consolidated financial statements' section of the financial report. (**) Amount to be submitted for approval to the annual general meeting of 2 May 2019.
| In million € | 2018 | 2017 | Change 2018/2017 |
|---|---|---|---|
| Equity – share of the group | 1,720.9 | 1,641.9 | +4.8% |
| Net financial debt (*) | 648.3 | 351.9 | +84.2% |
| Order book | 5,385.9 | 4,850.8 | +11.0% |
The CFE group reported a substantial consolidated revenue growth in 2018, increasing by 18.7% to € 3,640.6 million in 2018 compared to € 3,066.5 million in 2017. The three divisions reported a vigorous growth in activity.
EBITDA stood at € 488 million, which is slightly down compared to 2017 (€ 500.7 million).
The net result, share of the group, came to € 171.5 million in 2018, or 4.7% of revenue. Where the net result, share of the group, remained stable at DEME and in Contracting, it decreased, as expected, in Real Estate Development, which in 2017 had recorded two extraordinary gains on disposal.
The equity, share of the group, increased by 4.8% to € 1,720.9 million.
The investments in the renewal and expansion of DEME's fleet increased the net financial debt to € 648.3 million, or 37% of the equity, share of the group.
The order book amply topped € 5 billion, confirming the good commercial positioning of the companies.
Since 2014, DEME's key figures have been presented according to two approaches: the accounting approach according to the applicable IFRS rules, and the economic approach which consisted of the proportional consolidation of the jointly controlled entities (accounting rules applicable before 1 January 2014).
As from the beginning of September 2018, DEME holds 95% of the beneficial rights of the MEDCO company in Qatar (compared to 44.1% previously). As a result the activities of that subsidiary are now fully integrated in the consolidated financial statements of DEME.
Following the change in consolidation method of MEDCO, the economic presentation of the DEME consolidated figures is no longer appropriate. The source of major disparities between the accounting and economic approaches does not exist any longer.
| In million € | 2018 | 2017 | Change 2018/2017 |
||||
|---|---|---|---|---|---|---|---|
| DEME | Restatements DEME (*) |
Total | DEME | Restatemets DEME (*) |
Total | ||
| Revenue | 2,645.8 | 0 | 2,645.8 | 2,356.0 | 0 | 2,356.0 | +12.3% |
| EBITDA (**) | 458.9 | 0 | 458.9 | 455.5 | 0 | 455.5 | +0.7% |
| Operating income (EBIT) (**) |
202.9 | -5.3 | 197.6 | 217.8 | -10.5 | 207.3 | -4.7% |
| Net income share of the group |
155.6 | -2.0 | 153.6 | 155.1 | 1.4 | 156.5 | -1.9% |
| Net financial debt (**) | 555.8 | 0.2 | 556.0 | 285.7 | 2.0 | 287.7 | +93.3% |
| Order book | 4,010.0 | 0 | 4,010.0 | 3,520.0 | 0 | 3,520.0 | +13.9% |
(*) 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.
(**) The definitions are included in the 'Consolidated financial statements' section of the financial report.
The consolidated revenue amounted to € 2,645.8 million, which is up 12.3% compared to the previous year.
As in 2017, business was buoyant in the Offshore segment, which includes GeoSea and Tideway.
In Germany, the teams of GeoSea worked on two EPCI projects: the Merkur project, which was finalized in 2018, and the Hohe See project, for which the production of the monopile foundations and transition pieces is virtually completed, and 63 of the 87 foundations were installed by 31 December 2018.
In the UK, good progress has been made on the Hornsea One offshore wind farm: at the end of 2018, the multipurpose vessel 'Living Stone' finished the installation of the submarine power cable connecting the wind farm and electrical substations to the onshore grid. GeoSea, which is also engaged on this project, has already transported and installed 153 of the 174 monopile foundations.
In Denmark, GeoSea was in charge of the production, transport and installation of the 49 monopile foundations and transition pieces, as well as the installation of the masts and wind turbines for the Horns Rev 3 offshore wind farm. The works are virtually completed.
In the dredging segment, DEME continued work on the TTP1 project (Tuas Terminal - Phase 1), which has entered its final phase, and has just started dredging work to deepen the access channel to the port of Szczecin in Poland. Maintenance dredging activity was primarily concentrated in Belgium, Africa, India and Germany.
DEME's Environment division achieved a revenue increase in 2018. In this activity, there is a dispute with the client Rijkswaterstaat (Netherlands) regarding the execution of the Julianakanaal contract.
DIMCO, the subsidiary specializing in marine civil engineering, reported a substantial growth of business, particularly in the Netherlands where three major projects are in the start-up phase: the RijnlandRoute link, the Terneuzen lock, and the A24-Blankenburg connection.
| In % | 2018 | 2017 |
|---|---|---|
| Capital dredging | 23% | 21% |
| Maintenance dredging | 11% | 14% |
| Fallpipe and landfalls | 17% | 8% |
| Environment | 6% | 7% |
| Civil works | 6% | 3% |
| Marine works | 37% | 47% |
| In % | 2018 | 2017 |
|---|---|---|
| Europe (EU) | 67% | 68% |
| Europe (non-EU) | 2% | 2% |
| Africa | 10% | 10% |
| Americas | 4% | 3% |
| Asia-Pacific | 13% | 12% |
| Middle East | 2% | 1% |
| India and Pakistan | 2% | 4% |
EBITDA amounted to € 458.9 million, which is slightly up compared to 2017 (€ 455.5 million). The EBITDA margin came to 17.3% of revenue.
Where in the first half of 2018 DEME was confronted with substantial delays in the delivery of two vessels (the 'Apollo' and the 'Living Stone'), affecting its EBITDA margin which decreased to 14.1%, profitability recovered significantly during the second half of the year with an EBITDA margin of 20.6%.
The operating income amounted to € 202.9 million in 2018, or a 6.8% decrease due, among other things, to an increase in depreciation cost as several new vessels were brought into service.
The order book amounted to € 4.01 billion, which is up 13.9% compared to year-end 2017.
Order intake was particularly high in the fourth quarter of 2018, during which DEME won three major contracts worth a total of around € 1.5 billion:
As regards the Fehmarnbelt link, which was not yet included in the order book at 31 December 2018 (€ 710 million), the environmental permits on the German side have been granted but are still open to appeal.
Investments amounted to € 441.3 million in 2018, and primarily consist of down payments on the vessels 'Orion' and 'Spartacus', and payment of the remaining balance on the vessels 'Living Stone' and 'Apollo', which became operational in mid-2018.
In the second half of 2018, DEME started the construction of four new vessels for a total amount of € 133 million. They include two trailing suction hopper dredgers with a capacity of 2,300 m³ and 8,300 m³ respectively ('River Thames' and 'Meuse River'), and two self-propelled barges with a capacity of 3,500 m³ each ('Bengel' and 'Deugniet'). These four vessels will be built by the IHC shipyard, and are due for completion in 2020.
In addition to investments in its fleet, DEME invested more than € 30 million in its minority interests in offshore wind farm concessions.
Following the change in consolidation method of MEDCO, the fleet of that company, which essentially consists of two cutters, was recognized at fair value in the group's non-current assets for an amount of € 79.6 million.
DEME's net financial debt amounted to € 555.8 million at 31 December 2018. This had increased by € 270.1 million in 2018 as a result of the investments in the maintenance, renewal and expansion of the fleet and the increased working capital requirement (decrease in cash advances).
DEME has successfully refinanced its € 200 million bond, which matured on 14 February 2019.
Luc Vandenbulcke became the new CEO of DEME with effect from 1 January 2019. He succeeds Alain Bernard, who remains a director of DEME and some of its subsidiaries, as well as chairman of the board of directors of DEME Concessions and GSR.
The boards of directors of DEME and CFE thank Alain Bernard very much for the work he has done over the past 12 years. Under his leadership, DEME became one of the leading Belgian groups with a solid international reputation.
As of 2019, the activities of GeoSea, Tideway, A2Sea and EverSea are integrated in DEME's Offshore segment (DEME Offshore).
DEME Offshore offers a comprehensive package of solutions and services to customers in the offshore oil, gas and renewable energy industries.
| In million € | 2018 | 2017 | Change 2018/2017 |
|---|---|---|---|
| Revenue | 934.6 | 717.6 | +30.2% |
| Operating income (EBIT) (*) | 22.7 | 27.2 | -16.5% |
| Net income share of the group | 15.2 | 15.4 | -1.3% |
| Net financial surplus (*) | 102.4 | 90.5 | +13.2% |
| Order book | 1,320.3 | 1,229.7 | +7.4% |
(*) The definitions are included in the "Consolidated Financial Statements" section of the financial report..
CFE Contracting reported a strong growth in its consolidated revenue: 30.2% on a real basis and 10.2% on a like-for-like basis. The three segments (Construction, Multitechnics and Rail & Utilities) showed a solid growth in 2018.
In Belgium, the revenue of Van Laere and its subsidiaries is consolidated as of 1 January 2018 (€ 139.8 million), and accounts for most of the activity growth in the Construction segment in Belgium.
The main projects in progress in Belgium are the Gare Maritime on the Tour & Taxis site in Brussels, the ZNA hospital in Antwerp, and the residential properties on the Erasmus Gardens site in Anderlecht.
In International Construction, CFE Polska reported an all-time high volume of business. Amongst others, it finished the extension of the Platan shopping centre in Zabrze (southern Poland) in record time. Activity was also buoyant in Luxembourg, whereas the Tunisian branch continued to wind down its operations in a highly unfavourable socioeconomic environment.
In Multitechnics, the integration of the electricity and HVAC activities in the VMA cluster is bearing fruit, with a 9.9% growth of business in 2018.
In Rail & Utilities, activity for the ETCS project (automatic braking system for trains) is in an upward trend, as has the 'catenaries' department, which experienced an increase in revenue.
| In million € | 2018 | 2017 | Change in % |
|---|---|---|---|
| Construction | 692.5 | 499.8 | +38.6% |
| Belgium | 516.4 | 346.7 | +48.9% |
| International | 176.1 | 153.1 | +15.0% |
| Multitechnics | 170.6 | 155.3 | +9.9% |
| Rail & Utilities | 71.5 | 62.5 | +14.4% |
| Total Contracting | 934.6 | 717.6 | +30.2% |
The division's operating income amounted to € 22.7 million, down -16.5% compared to 2017. The volume of business remains high in Construction and Multitechnics, although prices continue to be extremely competitive, whereas the prices of materials and subcontractors show a substantial rise.
Several entities reported a strong growth in operating income, especially CFE Polska and VMA-Druart (entity active in Belgium in the HVAC market). Tunisia, however, weighed heavily on the division's results (around € 6 million loss reported in 2018).
Also worth noting is that the Van Laere group realized an operating income very close to break-even, whereas it still reported heavy losses in 2017 before joining the consolidation scope of CFE Contracting.
The net result, share of the group, remained virtually stable at € 15.2 million, or 1.6% of revenue.
| In million € | 31 December 2018 | 31 December 2017 | Change in % |
|---|---|---|---|
| Construction | 1,069.1 | 978.8 | +9.2% |
| Belgium | 870.9 | 767.3 | +13.5% |
| International | 198.2 | 211.5 | -6.3% |
| Multitechnics | 168.4 | 152.6 | +10.4% |
| Rail & Utilities | 82.8 | 98.3 | -15.8% |
| Total Contracting | 1,320.3 | 1,229.7 | +7.4% |
The order book came in at € 1,320.3 million on 31 December 2018, which is up 7.4%. Both MBG and Van Laere reported a particularly high order intake in Flanders.
In 2018, the group experienced two major commercial successes that were not yet included in the order book at 31 December 2018:
The net financial surplus of CFE Contracting increased substantially in 2018 (€ 102.4 million compared to € 90.5 million at year-end 2017), reflecting the solid operating cash flows and the continuous improvement of the working capital requirement.
At year-end 2018, the management of the Rail & Utilities segment presented the new name and logo of the cluster, which from now on will be called MOBIX.
At the year-end, CFE Contracting sold its stake in Voltis to it's management. Voltis specializes in the sale of electrical equipment to private and professional customers, and has three outlets in Walloon Brabant (€ 8.7 million revenue in 2017). The sale had no significant impact on the results of CFE Contracting.
| In million € | 2018 | 2017 | Change 2018/2017 |
|---|---|---|---|
| Revenue | 94.7 | 10.9 | n.s. |
| Operating income (EBIT) (*) | 13.2 | 23.4 | -43.6% |
| Net income share of the group | 9.3 | 22.3 | -58.3% |
| Net financial debt (*) | 70.5 | 68.8 | +2.5% |
(*) The definitions are included in the "Consolidated Financial Statements" section of the financial report.
| In million € | 31 December 2018 | 31 December 2017 |
|---|---|---|
| Unsold units post completion | 4 | 6 |
| Properties under construction | 70 | 69 |
| Properties in development | 65 | 58 |
| Total capital employed | 139 | 133 |
| In million € | 31 December 2018 | 31 December 2017 |
|---|---|---|
| Belgium | 89 | 82 |
| Luxembourg | 23 | 20 |
| Poland | 27 | 31 |
| Total | 139 | 133 |
(*) Capital employed is the sum of the equity and net financial debt of the real estate division.
BPI Real Estate Belgium (BPI), which covers the Real Estate division, is currently developing some forty real estate projects totalling 561,000 m² gross floor area above ground (BPI share), of which 142,000 m² are under construction.
BPI sold 259 apartments in 2018. Seven residential projects are currently in the course of construction and marketing:
Les Hauts-Prés, in Uccle (Brussels)
Voltaire, in Schaerbeek (Brussels)
Where the five Brussels projects show highly satisfactory take-up rates, sales are slower for the two projects in Flanders.
Besides its residential projects, BPI is also developing, in joint venture, two office projects in Liège, the Grand Poste project and the Renaissance project, on the Val Benoît site, which is already partially let to a public body.
BPI and its partners have filed a planning application for the NEO 1 project, comprising a shopping centre and more than 500 housing units on the Heysel plateau in Brussels.
The first planning applications for the Samaya project in Ottignies and the Bavière project in Liège have also been filed, while those for the Allianz and Key West projects will be filed in the next few months.
At the end of December 2018, BPI agreed with Cofinimmo on the future acquisition (mid-2020) of the property rights of its office buildings on the Serenitas and Moulin à Papier sites in Auderghem (Brussels), with a total floor area of nearly 23,000 m². The transaction amounts to approximately € 27 million. Those buildings will primarily be converted into residential properties, while part of the Serenitas site will accommodate the future head office of CFE.
BPI and its partners obtained planning permission for the Livingstone project situated along Route d'Esch in Luxembourg City (35,000 m²). All the apartments of phases 1 and 2, or 247 housing units, have already been taken up, although work on the first phase has only just begun. On the Kirchberg plateau, the Kiem project has entered its final phase, and acceptance of the apartments is scheduled for the spring of 2019.
BPI has also filed a planning application for the Domaine des Vignes project in Mertert.
In June 2018, BPI delivered two mixed-use buildings totalling 40,400 m²: the Immo Wola project in Warsaw, and phase 1 of the Bulwary Kasiazece project in Wroclaw. Virtually all housing units have been sold.
Four residential projects are currently in the course of construction and marketing, totalling 57,000 m² and situated in three large cities in Poland: Warsaw, Wroclaw and Poznan.
BPI also acquired a new building plot in Gdansk for 240 serviced housing units (Sadowa project).
The capital employed of real estate projects increased slightly during 2018 to € 139 million. The stock of unsold units post completion remained very low (less than 3%).
After having successfully launched its first private placement at the end of 2017 (€ 30 million), BPI further strengthened its financial structure in 2018 by setting up € 40 million worth of confirmed bilateral credit lines, and a Multi-Term treasury Notes programme of € 40 million.
The net result, share of the group, amounted to € 9.3 million, and was favourably impacted by, among other things, the result recognized according to percentage of completion of the Ernest The Park, Kiem (Luxembourg) and Erasmus Gardens projects, and by the recognition of the margin on the two completed projects in Poland. Unlike under the accounting rules applied in Belgium and in Luxembourg, the margin on the Polish residential projects is only recognized upon delivery.
In 2017, the sale of the Kons project in Luxembourg and the Oosteroever project in Ostend (Belgium) had made an exceptional contribution to BPI's net result.
| In million € | 2018 | 2017 | Change 2018/2017 |
|---|---|---|---|
| Revenue | -34.4 | -18.1 | n.s. |
| Operating income (EBIT) (*) | -6.4 | -8.4 | -23.8% |
| Net income share of the group | -6.5 | -13.7 | -52.6% |
| Net financial debt (*) | 124.4 | 85.9 | +44.8% |
(*) Definitions are listed under sections "Consolidated Financial Statements" of the financial report.
Adjusted for inter-division eliminations (€ -61.5 million), the revenue amounted to € 27.1 million in 2018.
Activity is essentially confined to the Brussels-South wastewater treatment plant project, of which the second of the three phases was completed at the end of 2018 on schedule and to the satisfaction of the customer. Final completion of the project is scheduled for December 2020. It should be remembered that this is the last project in progress of the Holding division.
The operating loss decreased by 23.8% to € -6.4 million thanks to the positive contributions of Rent-A-Port and Green Offshore.
Rent-A-Port, through its subsidiary Infra Asia Investments (IAI), continued to develop its industrial sites in the port areas of Hai Phong and Quang Ninh, of which approximately 40 hectares were sold in 2018. At the yearend, IAI concluded the sale of 50% of its power distribution operations to the Japanese group TEPCO.
Green Offshore owns two Belgian offshore wind farms, Rentel and SeaMade. The Rentel wind farm began generating electricity in the second half of 2018, while financial close on the SeaMade wind farm project was reached at the beginning of December 2018. The wind farm is expected to be operational by the end of 2020.
The net result, share of the group, of the Holding division amounted to € -6.5 million, compared to € -13.7 million in 2017.
Following payments received in July 2018, the outstanding receivables decreased by € 7.5 million from € 60 million to € 52.5 million (excluding VAT and receivables covered by the Credendo credit insurance). No further payments have been received since July 2018. Moreover, the sums received locally have not yet been converted into euros and transferred to Belgium.
The terms and conditions for the refinancing of the receivables relating to the Grand Hotel have been formally approved by the Chadian authorities, and have yet to be validated by the board of directors of the Afrexim Bank.
On 21 June 2018, CFE redeemed its € 100 million bond that had reached maturity. Refinancing was done by setting up a total of €160 million worth of confirmed bilateral credit lines (maturing in 2023), of which € 130 million was drawn down at 31 December 2018. At the year-end, CFE set up a Multi-Term treasury Notes programme of € 50 million. The first issues took place at the beginning of 2019.
The significant increase in net financial debt is explained by the injection of funds into Rent-A-Port and Green Offshore, and by the utilization of provisions for losses to completion and the decrease in working capital requirement.
| Year ended 31 December In thousands € |
2018 | 2017 |
|---|---|---|
| Revenue | 3,640,627 | 3,066,525 |
| Revenue from auxiliary activities | 123,018 | 116,588 |
| Purchases | -2,147,130 | -1,726,761 |
| Remuneration and social security payments | -633,090 | -546,699 |
| Other operating charges | -497,748 | -404,180 |
| Depreciations and amortization | -272,602 | -238,316 |
| Goodwill Impairment | 0 | 0 |
| Income from operating activities | 213,075 | 267,157 |
| Earnings from associates and joint ventures | 14,169 | -17,710 |
| Operating income | 227,244 | 249,447 |
| Cost of financial debt | -8,433 | -14,362 |
| Other financial expenses and income | -55 | -7,904 |
| Net financial income/expense | -8,488 | -22,266 |
| Pre-tax income | 218,756 | 227,181 |
| Income tax expense | -49,549 | -48,430 |
| Net income for the period | 169,207 | 178,751 |
| Attributable to owners of non-controlling interests | 2,323 | 1,691 |
| Net income – share of the group | 171,530 | 180,442 |
| Year ended 31 December In thousands € |
2018 | 2017 |
| Net income for the period | 169,207 | 178,751 |
| Change in fair value related to hedging instruments | -5,498 | 6,463 |
| Currency translation differences | 621 | -4,754 |
| Deferred taxes | 775 | -1,583 |
| Other elements of the comprehensive income to be reclassified to profit or loss in subsequent period |
-4,102 | 126 |
| Remeasurement on defined benefit plans | -1,063 | -2,227 |
| Deferred taxes | 726 | -3,382 |
| Other elements of the comprehensive income not to be reclassified to profit or loss in subsequent period |
-337 | -5,609 |
| Total elements of the comprehensive income directly accounted in equity |
-4,439 | -5,483 |
| Comprehensive income | 164,768 | 173,268 |
| - attributable to owners of the parent | 167,279 | 174,771 |
| - attributable to owners of non-controlling interests | -2,511 | -1,503 |
| Net income per share (€) (basic and diluted) | 6.78 | 7.13 |
| Comprehensive income per share (€) (basic and diluted) | 6.61 | 6.90 |
| ROE (*) | 10.6% | 11.9% |
(*) Definitions are listed under sections "Consolidated Financial Statements" of the financial report.
| Year ended 31 December In thousands € |
2018 | 2017 |
|---|---|---|
| Intangible assets | 89,588 | 91,343 |
| Goodwill | 177,127 | 184,930 |
| Property, plant and equipment | 2,390,236 | 2,138,208 |
| Investments in associates and joint ventures | 155,792 | 140,510 |
| Other non-current financial assets | 171,687 | 147,719 |
| Non-current derivative instruments | 9 | 921 |
| Other non-current assets | 5,501 | 7,798 |
| Deferred tax assets | 99,909 | 104,022 |
| Total non-current assets | 3,089,849 | 2,815,451 |
| Inventories | 128,889 | 138,965 |
| Trade receivables and other operating receivables | 1,261,298 | 1,098,842 |
| Other operating current assets | 67,561 | 55,712 |
| Other non operating current assets | 12,733 | 10,715 |
| Current derivative instruments | 275 | 4,156 |
| Current financial assets | 0 | 34 |
| Assets held for sale | 0 | 0 |
| Cash and cash equivalents | 388,346 | 523,018 |
| Total current assets | 1,859,102 | 1,831,442 |
| Total assets | 4,948,951 | 4,646,893 |
| Share capital | 41,330 | 41,330 |
| Share premium | 800,008 | 800,008 |
| Retained earnings | 923,768 | 840,543 |
| Defined benefits plans | -25,521 | -25,268 |
| Hedging reserves | -7,153 | -2,457 |
| Translation differences | -11,554 | -12,252 |
| Equity – part of the group CFE | 1,720,878 | 1,641,904 |
| Non-controlling interests | 13,973 | 14,421 |
| Equity | 1,734,851 | 1,656,325 |
| Retirement benefit obligations and employee benefits | 57,553 | 53,149 |
| Provisions | 35,172 | 30,183 |
| Other non-current liabilities | 5,725 | 4,497 |
| Bonds - non current | 29,584 | 231,378 |
| Financial debts | 656,788 | 419,093 |
| Non-current derivative instruments | 9,354 | 7,209 |
| Deferred tax liabilities | 119,386 | 130,023 |
| Total non-current liabilities | 913,562 | 875,532 |
| Current provisions | 65,505 | 82,530 |
| Trade payables & other operating liabilities | 1,410,944 | 1,276,446 |
| Tax liability due for payment | 44,543 | 43,275 |
| Bonds - current | 200,221 | 99,959 |
| Current financial debts | 150,075 | 124,497 |
| Current derivative instruments | 10,990 | 7,445 |
| Liabilities held for sale | 0 | 0 |
| Other operating current liabilities | 201,609 | 95,012 |
| Other non operating current liabilities Total current liabilities |
216,651 2,300,538 |
385,872 2,115,036 |
| Total equity and liabilities | 4,948,951 | 4,646,893 |
| For the period ended 31 December In thousands € |
2018 | 2017 |
|---|---|---|
| Operating activities | ||
| Income from operating activities | 213,075 | 267,157 |
| Depreciation and amortisation of intangible assets, property, plant & equipment and investment property |
272,602 | 238,316 |
| Net provision expense | 1,265 | 4,986 |
| Impairment on current and non-current assets and other non cash items |
1,018 | -9,725 |
| Sales of non-current assets | -7,530 | -9,662 |
| Dividends from associates and Joint Ventures | 4,935 | 6,507 |
| Cash flow from operating activities before changes in working capital |
485,365 | 497,579 |
| Decrease/(increase) in trade receivables and other current and non current receivables |
-349,838 | 107,002 |
| Decrease/(increase) in inventory | 6,142 | -8,466 |
| Increase/(Decrease) in trade payables and other current and non current payables |
141,189 | 75,012 |
| Income tax paid/received | -58,375 | -42,282 |
| Cash flow from operating activities | 224,483 | 628,845 |
| Investing activities | ||
| Sales of non-current assets | 15,833 | 18,322 |
| Purchases of non-current assets | -453,475 | -458,210 |
| Acquisition of subsidiaries net of cash acquired | -35 | -181,370 |
| Change in percentage held in associates | 70,049 | 0 |
| Capital increase in investments in associates | -8,660 | -32,323 |
| Sales of subsidiaries | 1,202 | 574 |
| Loans granted | -41,066 | -9,926 |
| Cash flow from investing activities | -416,152 | -662,933 |
| Financing activities | ||
| Interests paid | -22,583 | -29,347 |
| Interests received | 13,697 | 13,970 |
| Other financial expenses and income | -2,734 | -12,218 |
| Borrowings | 422,808 | 240,289 |
| Reimbursements of borrowings | -294,122 | -212,271 |
| Dividends paid | -60,755 | -54,426 |
| Cash flow from financing activities | 56,311 | -54,003 |
| Net Increase/(Decrease) in cash position | -135,358 | -88,091 |
| Cash and cash equivalents at start of the year | 523,018 | 612,155 |
| Exchange rate effects | 686 | -1,046 |
| Cash and cash equivalents at end of period | 388,346 | 523,018 |
The tangible assets amounted to € 2,390.2 million at 31 December 2018, up € 252 million. DEME's investment programme continued in 2018, partly offset by the depreciation during the period.
The consolidated opening equity was restated by € -15.55 million (application of IFRS 15 - EPCI contracts at DEME) and € -12.0 million (application of IFRS 9 - receivables from the Chadian government) respectively.
Taking into account the payment of a dividend of € 60.8 million, the consolidated equity amounted to € 1,734.9 million at 31 December 2018.
The net financial debt breaks down into a short-term and long-term financial debt of € 350.3 million and € 686.4 million respectively, and a positive net cash position of € 388.3 million.
CFE, DEME, CFE Contracting and BPI Real Estate Belgium are all in compliance with the banking covenants.
| In thousands € | Share capital | Share premium | Retained earnings | Defined benefits plans |
Reserves related instruments to hedging |
Translation differences |
Equity attributable to owners of the parent |
Non-controlling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|
| 31 December 2017 | 41,330 | 800,008 | 840,543 | -25,268 | -2,457 | -12,252 | 1,641,904 | 14,421 | 1,656,325 |
| Restatements IFRS 15 & 9 |
-27,550 | -27,550 | -27,550 | ||||||
| 31 December 2017(*) | 41,330 | 800,008 | 812,993 | -25,268 | -2,457 | -12,252 | 1,614,354 | 14,421 | 1,628,775 |
| Comprehensive income for the period |
171,530 | -253 | -4,696 | 698 | 167,279 | -2,511 | 164,768 | ||
| Dividends paid to shareholders |
-60,755 | -60,755 | -60,755 | ||||||
| Dividends paid to non-controlling interests |
-365 | -365 | |||||||
| Change in con solidation scope and other movements |
2,428 | 2,428 | |||||||
| 31 December 2018 | 41,330 | 800,008 | 923,768 | -25,521 | -7,153 | -11,554 | 1,720,878 | 13,973 | 1,734,851 |
(*) Amounts restated in accordance with changes in accounting method linked to the application of accounting standards IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments and the associated amendments.
| 31 December 2018 | 31 December 2017 | |
|---|---|---|
| Total number of shares | 25,314,482 | 25,314,482 |
| Net result part of the group per share (in €) | 6.78 | 7.13 |
| Equity part of the group per share (in €) | 67.98 | 64.86 |
| Revenue | Income from operating activities | Operating income (EBIT) | Financial income | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| In thousands € | 2018 | 2017 | 2018 | % Revenue | 2017 | % Revenue | 2018 | % Revenue | 2017 | % Revenue | 2018 | 2017 |
| Dredging and environment |
2,645,780 | 2,356,014 | 196,012 | 7.41% | 230,507 | 9.78% | 202,940 | 7.67% | 217,775 | 9.24% | -6,391 | -21,117 |
| Correction DEME | -4,589 | -5,468 | -5,273 | -10,510 | 2,901 | 4,218 | ||||||
| Contracting | 934,573 | 717,649 | 22,728 | 2.43% | 27,212 | 3.79% | 22,728 | 2.43% | 27,212 | 3.79% | -2,073 | -134 |
| Real Estate | 94,696 | 10,900 | 10,346 | 10.93% | 21,799 | 199.99% | 13,209 | 13.95% | 23,388 | 214.5% | -2,832 | -902 |
| Holding and non-transferred activities |
27,051 | 34,141 | -10,865 | -7,704 | -5,803 | -9,229 | -93 | -4,331 | ||||
| Eliminations between segments |
-61,473 | -52,179 | -557 | 811 | -557 | 811 | ||||||
| Total consolidated | 3,640,627 | 3,066,525 | 213,075 | 5.85% | 267,157 | 8.71% | 227,244 | 6.24% | 249,447 | 8.13% | -8,488 | -22,266 |
| Taxes | Net income of the group | Non-cash items | EBITDA | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| In thousands € | 2018 | 2017 | 2018 | % Revenue | 2017 | % Revenue | 2018 | 2017 | 2018 | % Revenue | 2017 | % Revenue |
| Dredging and environment |
-43,231 | -43,269 | 155,570 | 5.88% | 155,055 | 6.58% | 262,889 | 224,993 | 458,901 | 17.34% | 455,500 | 19.33% |
| Correction DEME | 384 | 7,739 | -1,988 | 1,448 | 4,589 | 5,468 | ||||||
| Contracting | -5,491 | -11,726 | 15,161 | 1.62% | 15,351 | 2.14% | 12,686 | 406 | 35,414 | 3.81% | 27,618 | 3.85% |
| Real Estate | -1,134 | -256 | 9,321 | 9.84% | 22,255 | 204.17% | -1,932 | 1,860 | 8,414 | 8.87% | 23,659 | 217.06% |
| Holding and non-transferred activities |
-124 | -856 | -6,024 | -14,416 | -3,347 | 850 | -14,212 | -6,854 | ||||
| Eliminations between segments |
47 | -62 | -510 | 749 | - 557 | 811 | ||||||
| Total consolidated | -49,549 | -48,430 | 171,530 | 4.71% | 180,442 | 5.88% | 274,885 | 233,577 | 487,960 | 13.40% | 500,734 | 16.33% |
| 31 December 2018 In thousands € |
Dredging and Environment |
Contracting | Real Estate | Holding & non-transferred activities |
Eliminations between divisions |
Consolidated total |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Goodwill | 155,567 | 21,560 | 0 | 0 | 0 | 177,127 |
| Property, plant and equipment | 2,326,304 | 61,526 | 928 | 1,478 | 0 | 2,390,236 |
| Non-current loans to consolidated group companies |
0 | 0 | 0 | 20,000 | -20,000 | 0 |
| Other non-current financial assets | 108,066 | 0 | 35,106 | 28,515 | 0 | 171,687 |
| Other non-current assets | 274,058 | 13,217 | 34,923 | 1,274,450 | -1,245,849 | 350,799 |
| Inventories | 15,244 | 16,945 | 94,592 | 3,733 | -1,625 | 128,889 |
| Cash and cash equivalents | 287,394 | 53,440 | 9,197 | 38,315 | 0 | 388,346 |
| Internal cash position - cash pooling - assets |
0 | 62,808 | 2,793 | 1,889 | -67,490 | 0 |
| Other current assets | 914,328 | 314,783 | 26,180 | 96,214 | -9,638 | 1,341,867 |
| Total assets | 4,080,961 | 544,279 | 203,719 | 1,464,594 | -1,344,602 | 4,948,951 |
| EQUITY AND LIABILITIES |
||||||
|---|---|---|---|---|---|---|
| Equity | 1,646,910 | 84,781 | 68,108 | 1,182,527 | -1,247,475 | 1,734,851 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 20,000 | 0 | -20,000 | 0 |
| Bonds - non current | 0 | 0 | 29,584 | 0 | 0 | 29,584 |
| Non-current financial liabilities | 494,796 | 10,156 | 21,836 | 130,000 | 0 | 656,788 |
| Other non-current liabilities | 179,572 | 14,712 | 10,923 | 21,983 | 0 | 227,190 |
| Bonds - current | 200,221 | 0 | 0 | 0 | 0 | 200,221 |
| Current financial liabilities | 148,376 | 1,699 | 0 | 0 | 0 | 150,075 |
| Internal cash position - cash pooling - liabilities |
0 | 1,889 | 11,043 | 54,558 | -67,490 | 0 |
| Other current liabilities | 1,411,086 | 431,042 | 42,225 | 75,526 | -9,637 | 1,950,242 |
| Total equity and liabilities | 4,080,961 | 544,279 | 203,719 | 1,464,594 | -1,344,602 | 4,948,951 |
| 31 December 2017 In thousands € |
Dredging and Environment |
Contracting | Real Estate | Holding & non-transferred activities |
Eliminations between divisions |
Consolidated total |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Goodwill | 163,370 | 21,560 | 0 | 0 | 0 | 184,930 |
| Property, plant and equipment | 2,073,436 | 63,736 | 526 | 510 | 0 | 2,138,208 |
| Non-current loans to consolidated group companies |
0 | 0 | 0 | 20,000 | -20,000 | 0 |
| Other non-current financial assets | 94,138 | 754 | 34,981 | 17,846 | 0 | 147,719 |
| Other non-current assets | 278,749 | 10,894 | 32,889 | 1,267,880 | -1,245,818 | 344,594 |
| Inventories | 15,714 | 24,020 | 99,216 | 1,640 | -1,625 | 138,965 |
| Cash and cash equivalents | 434,687 | 59,234 | 3,324 | 25,773 | 0 | 523,018 |
| Internal cash position - cash pooling - assets |
0 | 47,985 | 0 | 1,928 | -49,913 | 0 |
| Other current assets | 727,178 | 290,454 | 26,723 | 136,074 | -10,970 | 1,169,459 |
| Total assets | 3,787,272 | 518,637 | 197,659 | 1,471,651 | -1,328,326 | 4,646,893 |
| EQUITY AND LIABILITIES |
||||||
| Equity | 1,570,503 | 74,226 | 64,433 | 1,194,605 | -1,247,442 | 1,656,325 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 20,000 | 0 | -20,000 | 0 |
| Bonds - non current | 201,900 | 0 | 29,478 | 0 | 0 | 231,378 |
| Non-current financial liabilities | 401,559 | 11,134 | 6,400 | 0 | 0 | 419,093 |
| Other non-current liabilities | 177,604 | 18,241 | 8,846 | 20,370 | 0 | 225,061 |
Bonds current 0 0 0 99,959 0 99,959 Current financial liabilities 118,889 5,608 0 0 0 124,497
pooling - liabilities 0 0 16,293 33,620 -49,913 0 Other current liabilities 1,316,817 409,428 52,209 123,097 -10,971 1,890,580 Total equity and liabilities 3,787,272 518,637 197,659 1,471,651 -1,328,326 4,646,893
Internal cash position - cash
| 31 December 2018 In thousands € |
Dredging and Environment |
Contracting | Real Estate | Holding and non-transferred activities |
Consolidated total |
|---|---|---|---|---|---|
| Cash flow from operating activities before change in working capital |
454,987 | 36,904 | 10,994 | -17,520 | 485,365 |
| Net cash flow from (used in) operating activities |
222,406 | 20,552 | -1,909 | -16,566 | 224,483 |
| Cash flow from (used in) investing activities |
-395,432 | -6,569 | -700 | -13,451 | -416,152 |
| Cash flow from (used in) financing activities |
24,893 | -19,684 | 8,546 | 42,556 | 56,311 |
| Net increase/(decrease) in cash position |
-148,133 | -5,701 | 5,937 | 12,539 | -135,358 |
| 31 December 2017 In thousands € |
Dredging and Environment |
Contracting | Real Estate | Holding and non-transferred activities |
Consolidated total |
|---|---|---|---|---|---|
| Cash flow from operating activities before change in working capital |
449,832 | 24,904 | 29,056 | -6,213 | 497,579 |
| Net cash flow from (used in) operating activities |
595,170 | 44,895 | 24,272 | -35,492 | 628,845 |
| Cash flow from (used in) investing activities |
-632,851 | -21,773 | -2,583 | -5,726 | -662,933 |
| Cash flow from (used in) financing activities |
-53,178 | -8,412 | -24,152 | 31,739 | -54,003 |
| Net increase/(decrease) in cash position |
-90,859 | 14,710 | -2,463 | -9,479 | -88,091 |
On 3 September 2018, DEME NV acquired additional beneficial rights of Middle East Dredging Company QSC "Medco", increasing the group's shareholding percentage from 44.1% to 95%. This led to a change in the consolidation method of Medco, which was consolidated according to the equity method until the beginning of the third quarter, after which it became fully consolidated.
This acquisition of control meets the definition of a business combination in accordance with the standard IFRS 3 - Business Combinations, which requires the application of the "acquisition method", whereby the identifiable assets and liabilities of Medco must be included at fair value on the acquisition date in CFE's consolidated financial statements. Moreover, according to this method, the historical stake of 44.1% must also be remeasured at fair value through profit and loss. Finally, the total goodwill generated on that transaction results from the difference between the consideration transferred and the fair value of the assets and liabilities of Medco.
The fair value assessment of the identifiable assets and liabilities could be completed within the time limits set by the annual closing. This assessment, which was carried out according to the accounting methods of the CFE group, became final on 31 December 2018.
The fair values assigned to the assets and liabilities that were acquired are summarized as follows:
| In thousands € | |
|---|---|
| Intangible assets | 0 |
| Tangible assets | 79,636 |
| Trade and other operating receivables | 52,925 |
| Cash and cash equivalents | 72,454 |
| Retirement benefit obligations and employee benefits | -757 |
| Current and non current financial debts | -35,330 |
| Other current and non current assets and liabilities | -14,829 |
| Trade & other operating payables | -148,776 |
| Net asset acquired share of the group | 5,323 |
| Value of historic share of DEME in MEDCO (44.1%) | -10,605 |
| Goodwill | 5,282 |
| Purchase price | 0 |
The following valuation methods were applied to determine the fair value of the main identifiable assets and liabilities:
This transaction did not give rise to a cash settlement. As a result of the operation, DEME acquired 50.9% additional cash of Medco, generating a positive net cash flow of € 72.5 million. The remeasurement of the historical stake generated a gain of € 10.6 million. The total unallocated goodwill generated by the transaction amounted to € 5.3 million and was written down at 31 December 2018.
No significant changes have occurred in the financial and commercial situation of the CFE Group since 31 December 2018.
| In thousands € | 2018 | 2017 |
|---|---|---|
| Turnover | 29,249 | 29,578 |
| Operating income | -23,944 | -31,561 |
| Net financial result excluding non-recurring financial income |
62,771 | 57,681 |
| Non-recurring financial income | 63 | 572 |
| Non-recurring financial charges | -63 | 0 |
| Result before taxes | 38,827 | 26,692 |
| Taxes | -118 | -170 |
| Result of the year | 38,709 | 26,522 |
The Brussels-South wastewater treatment plant project represents a substantial part of the revenue. This project will take another two years.
As in 2017, the operating income was negatively impacted by increases in the provisions for other liabilities and charges.
The net financial income consists mainly of € 55 million, € 6 million and € 5 million worth of dividends received from DEME, CFE Contracting and BPI Real Estate Belgium respectively.
| In thousands € | 31 December 2018 | 31 December 2017 |
|---|---|---|
| Assets | ||
| Fixed assets | 1,338,202 | 1,325,005 |
| Current assets | 169,859 | 155,489 |
| Total assets | 1,508,061 | 1,480,494 |
| In thousands € | 31 December 2018 | 31 December 2017 |
|---|---|---|
| Equity and liabilities | ||
| Equity | 1,141,304 | 1,163,350 |
| Provisions | 95,381 | 81,998 |
| Non-current liabilities | 130,248 | 248 |
| Current liabilities | 141,128 | 234,898 |
| Total equity and liabilities | 1,508,061 | 1,480,494 |
The non-current assets consist primarily of the stakes in DEME, CFE Contracting and BPI Real Estate Belgium.
The long-term debts include € 130 million drawn down on the confirmed bilateral credit lines. In 2017, the € 100 million bond was reclassified to short-term debts.
In 2019, DEME is expected to realise a revenue of approximately the same size as that of 2018. The impact of new vessels in the fleet for a full year is expected to be compensated by the scheduled major overhaul of the important installation vessel Innovation. In 2019, the EBITDA margin is again expected to remain within the historical range of 16% to 20% for the entire year.
The revenue of the Contracting division should also be stable in 2019, while its operating income should slightly increase.
The operating income 2019 of the Real Estate Development division should remain at a level close to that of 2018.
At the general meeting of shareholders on 2 May 2019, the board of directors will propose a gross dividend of € 2.40 per share, or a total distribution of € 60.75 million.
At the end of the financial year, CFE's share capital amounted to €41,329,482.42, divided into 25,314,482 shares, with no declared par value. The Company's shares are registered or in electronic form.
CFE's equity base as of 31 December 2018 was as follows :
| Shares with no par value | 25,314,482 |
|---|---|
| registered shares | 18,572,094 |
| shares in electronic form | 6,742,288 |
Shareholders owning 3% or more of the voting rights relating to the shares they hold:
| 15,289,521 shares or 60.40% |
|---|
| 3,066,460 shares or 12.11% |
| Ordinary shareholders meeting | 2 May 2019 |
|---|---|
| Publication of interim statements 2018 | 23 May 2019 (before opening of the stock market) |
| Publication of half-year financial statements 2018 | 30 August 2019 (before opening of the stock market) |
| Publication of interim statements 2018 | 22 November 2019 (before opening of the stock market) |
The statutory auditor, Deloitte, Reviseurs d'Entreprises, represented by Michel Denayer and Rik Neckebroeck, has confirmed that it has no reservations as to the accounting information reported in this press release and that it is in line with the financial statements as approved by the board of directors. Nevertheless, without qualifying its opinion, the auditor draws attention to the uncertainties as to the payment of the outstanding debts due by the Chadian government and the actions undertaken to facilitate their settlement.
* * *
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 60.40% owned by Ackermans & van Haaren.
* * *
This press release is available on our website at www.cfe.be.
Note to editors
For further information, please contact, at CFE:
- Piet Dejonghe, Chief Executive Officer, tel. +32.2.661.13.19, [email protected]
- Fabien De Jonge, Chief Financial Officer, tel. +32 2 661 13 12, [email protected]
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