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JCDecaux SA
Earnings Release • Mar 5, 2020
1455_10-k_2020-03-05_3a302a48-98e7-49f9-8565-99a337943e79.pdf
Earnings Release
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Business report FY 2019
March 5th, 2020
| Annual business review – FY 2019 |
3 |
|---|---|
| Annual financial release – FY 2019 |
3 |
| Business highlights of FY 2019 |
11 |
| Perspectives | 13 |
| Related parties |
14 |
| Risk factors |
15 |
| Annual consolidated financial statements – FY 2019 |
18 |
|---|---|
| Annual consolidated financial statements |
18 |
| Notes to the annual consolidated financial statements |
23 |
ANNUAL BUSINESS REVIEW – FY 2019
ANNUAL FINANCIAL RELEASE – FY 2019
- Adjusted revenue up +7.5% to €3,890.2 million
- Adjusted organic revenue up +2.0%
- Adjusted operating margin of €792.2 million, up +13.2%
- Adjusted EBIT, before impairment charge, of €385.2 million, up +11.7%
- Net income Group share of €265.5 million, up +34.6%
- Adjusted free cash flow of €169.7 million, up +19.8%
- Dividend per share proposed for the year 2019, to €0.58, in line with 2018
- Adjusted organic revenue expected to be down around -10% in Q1 2020
Paris, March 5th, 2020 – JCDecaux SA (Euronext Paris: DEC), the number one outdoor advertising company worldwide, announced today its results for the year ended December 31st, 2019. JCDecaux Supervisory Board, which met on March 4th, 2020, approved the audited financial statements for fiscal year 2019. A report with an unqualified opinion is being issued by the Statutory Auditors.
Following the adoptions of IFRS 11 from January 1 st , 2014 and IFRS 16 from January 1 st , 2019, and in compliance with the AMF's instructions, the operating data presented below are adjusted:
- to include our prorata share in companies under joint control, regarding IFRS 11,
- to exclude the impact of IFRS 16 on our core business lease contracts (lease agreements of locations for advertising structures excluding real estate and vehicle rental contracts). Please refer to the paragraph "Adjusted data" on pages 4 and 5 of this release for the definition of adjusted data and reconciliation with IFRS.
The values shown in the tables are generally expressed in millions of euros. The sum of the rounded amounts or variations calculations may differ, albeit to an insignificant extent, from the reported values.
Commenting on the 2019 results, Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said:
"JCDecaux, the world's largest Out-of-Home media company, delivered in 2019 record results which are the best since IPO with revenue at €3,890.2 million, operating margin at €792.2 million, EBIT before impairment at €385.2 million and net income Group share at €265.5 million.
Our digital transformation continues to drive growth with digital revenue growing at +33% compared to 2018 and representing now 25.2% of Group revenue. Most advertising categories are up led by Retail, Personal care & Luxury goods and Entertainment and we are very pleased with our diversified client mix with our Top 10 clients representing only 12.5% of Group revenue.
As expected, our Group operating margin improved by +110bp in 2019. Our H2 Street Furniture operating margin continued to expand, thanks to a strong organic revenue performance throughout the year while our Transport operating margin was affected by the decline of our business in Asia in H2. On a full-year basis, Street Furniture margin increased by +70bp, thanks to good performances mainly in France, in North America and in Australia. Despite a double-digit revenue decline in Asia-Pacific in H2 2019, Transport margin grew by +180bp, driven by margin accretion across most of the regions. Billboard posted a slight margin decline of -10bp, due to tough market conditions in some geographies, partly offset by the positive contribution from APN Outdoor and the billboard rationalisation and digitisation in UK.
Our free cash flow generation increased by +19.8% in 2019, while we continued to significantly accelerate our investments in digital capital expenditure.
Given the increase in our net income Group share by +34.6% and our financial flexibility, we recommend the payment of a dividend of €0.58 per share, in line with 2018, at the Annual General Meeting which will take place on May 14th , 2020.
Annual business review – FY 2019
Annual financial release – FY 2019
In 2019, we remained highly focused on our ESG – a lever of our business performance. We joined RE100, a global leadership initiative for companies committed to 100% renewable electricity, in line with our current objective of sourcing 100% of our electricity consumption from renewable electricity by 2022. We already reduced our carbon emissions by -33% in 2019 compared to 2018. We have been delighted that our leadership in ESG in Out-of-Home industry has been commended in January 2020, for our climate action and transparency, achieving a place on global environmental impact non-profit CDP's prestigious 'A List' for climate change.
As far as the Covid-19 is concerned, our key priority is the health of our employees and I would like to take the opportunity to commend the exemplary behaviour of our teams across the world during this difficult time notably in China, with a Business Continuity Plan in place since the beginning of the epidemic on January 28th, 2020.
Looking at Q1 2020, we expect our adjusted organic revenue to be down around -10%, despite a positive current trading in Street Furniture, reflecting the very material impact from the Covid-19 outbreak and taking into account the Q1 2019 high comparable in Transport. In Asia-Pacific, our business has been significantly affected since the beginning of February, with a very important decline in China in passengers and commuters in the airports and metros where we operate. All our landlords in China fully recognise the significant setback for the advertising business and have all already expressed their intention to grant us rent reductions.
During the past few weeks, we have been talking to our clients / advertisers and we are supporting them with exceptional temporary reliefs. Regarding Travel Retail, most of our clients want to keep their premium locations and their long-term commitments in our airports.
Given the magnitude of the Covid-19 disruption, our Group operating margin should be negatively affected in 2020, despite saving measures being implemented without compromising our operational quality and efficiency, to mitigate the impact. With strong and effective measures notably taken by the Chinese government, a rebound of the economic growth could pave the way for a recovery with consumption and investment activities resuming, once the epidemic is under control.
In a media landscape increasingly fragmented, out-of-home advertising reinforces its attractiveness. With our well diversified geographic country and advertisers portfolio, our growing premium digital portfolio combined with a new data-led audience targeting platform, our ability to win new contracts and the high quality of our teams across the world, we believe we are well positioned to outperform the global advertising market and increase our leadership position in the outdoor advertising industry through profitable market share gains. The strength of our balance sheet is a key competitive advantage that will allow us to pursue further external growth opportunities as they arise and to continue to invest significantly in digital."
ADJUSTED REVENUE
As reported on January 30th , 2020, consolidated adjusted revenue increased by +7.5% to €3,890.2 million in 2019. Adjusted organic revenue grew by +2%. Digital revenue were up +33% including a small but incremental contribution from programmatic and now represent 25.2% of total revenue. This clearly demonstrates the commercial success of our digitisation strategy, which we are now rolling out in more markets around the world. Our well diversified geographic country portfolio was key to offset the weakness of our biggest market, China, in the second half, with a strong performance in the US market and good sales results in Europe which still represents more than 50% of total revenue.
Street Furniture with a +5.3% organic revenue growth was driven by a very strong digital revenue increase at +28.6%, representing 21.9% of total Street Furniture revenue. Transport posted a positive organic revenue growth at +0.3% impacted in the second half of the year by a deterioration in our business in China, notably in Hong Kong, partially offset by a strong digital revenue increase at +26.7% which represent 30.3% of total Transport revenue. Billboard recorded a -3.5% organic revenue decline, affected by challenging market conditions in France and in the Rest of the World, despite the positive impact from the rationalisation and digitisation of our UK billboard assets and a strong Group digital billboard revenue increase at +95.5% representing 20.6% of total Billboard revenue. Group digital revenue remained concentrated with 71% coming from 5 markets (UK, US, Australia, Germany and China).
ADJUSTED OPERATING MARGIN (1)
In 2019, adjusted operating margin increased by +13.2% to €792.2 million from €700.1 million in 2018. Adjusted operating margin as a percentage of revenue was 20.4%, +110bp above prior year.
| 2019 | 2018 | Change 19/18 | ||||
|---|---|---|---|---|---|---|
| €m | % of revenue |
€m | % of revenue |
Change (%) |
Margin rate (bp) |
|
| Street Furniture | 452.3 | 26.8% | 413.7 | 26.1% | +9.3% | +70bp |
| Transport | 265.9 | 16.2% | 218.4 | 14.4% | +21.7% | +180bp |
| Billboard | 74.1 | 13.1% | 68.0 | 13.2% | +8,9% | -10bp |
| Total | 792.2 | 20.4% | 700.1 | 19.3% | +13.2% | +110bp |
Street Furniture: In 2019, adjusted operating margin increased by +9.3% to €452.3 million. As a percentage of revenue, the adjusted operating margin increased by +70bp to 26.8%, compared to 2018, positively impacted by good commercial performances throughout the year mainly in France, North America and Australia with a better operating margin accretion in H2 versus H1.
Transport: In 2019, adjusted operating margin increased by +21.7% to €265.9 million. As a percentage of revenue, the adjusted operating margin increased by +180bp to 16.2% compared to 2018. Despite a double-digit revenue decline in Asia-Pacific in H2 2019, operating margin improved, driven by margin accretions across most of the regions.
Billboard: In 2019, adjusted operating margin increased by +8.9% to €74.1 million. As a percentage of revenue, adjusted operating margin decreased by -10bp to 13.1% compared to 2018, despite the accretive contribution from APN Outdoor.
ADJUSTED EBIT (2)
In 2019, adjusted EBIT before impairment charge increased by +11.7% to €385.2 million compared to €345.0 million in 2018. As a percentage of revenue, this represented a +40bp increase to 9.9%, from 9.5% in 2018. The consumption of maintenance spare parts increased by €3.9 million to €41.6 million in 2019 mainly due to France. Net amortisation and provisions were up compared to last year, in line with our investments related to significant contract wins and digital and including the Purchase Accounting impact of €29.6 million from APN Outdoor. Other operating income and expenses impacted EBIT negatively in 2019.
An impairment charge on goodwill amounting to €10.0 million has been recorded in 2019, compared to a €1.4 million impairment charge in 2018. A €1.0 million net reversal on provisions for onerous contracts, a €2.0 million impairment on PP&E and intangible assets and a €10.7 million reversal on net assets from companies under joint control have been recognised in 2019 (a €0.6 million net reversal on provisions for onerous contracts and a €8.4 million net reversal on impairment on tangible and intangible assets were booked in 2018). Adjusted EBIT, after impairment charge increased by +9.2% to €384.9 million compared to €352.6 million in 2018.
NET FINANCIAL INCOME / (LOSS) (3)
In 2019, interest expenses on IFRS 16 leases were -€152.0 million compared to -€152.2 million in 2018.
In 2019, excluding IFRS 16, other net financial income / (loss) was -€24.4 million compared to -€25.1 million in 2018.
EQUITY AFFILIATES
In 2019, the share of net profit from equity affiliates was €102.0 million, slightly higher compared to 2018 (€99.5 million).
NET INCOME GROUP SHARE
In 2019, net income Group share before impairment charge increased by +37.1% to €267.3 million compared to €195.0 million in 2018, including a positive one-off net impact of €35.7 million due to the application of IFRS 16 on our core business, leading to reversal of lease liabilities and rights-of-use relating to contracts renegotiation during the period.
Taking into account the impact from the impairment charge, net income Group share increased by +34.6% to €265.5 million compared to €197.2 million in 2018.
ADJUSTED CAPITAL EXPENDITURE
In 2019, adjusted net capex (acquisition of property, plant and equipment and intangible assets, net of disposals of assets) was at €375.4 million compared to €286.4 million, up compared to last year, mainly due to the new Street Furniture contracts in Europe as well as the digitisation across all segments.
ADJUSTED FREE CASH FLOW (4)
In 2019, adjusted free cash flow was €169.7 million compared to €141.7 million in 2018. The increase is mainly due to an increase in funds from operations, an improvement in change in working capital requirements thanks to a good cash collection and inventory management from our operations despite higher capex as expected, in line with our investments following significant contract wins over the last 2 years.
DIVIDEND
At the next Annual General Meeting of Shareholders on May 14th, 2020, the Supervisory Board will recommend the payment of a dividend of €0.58 per share for the 2019 financial year, in line with 2018.
NET DEBT (5)
Net debt as of December 31st, 2019 amounted to €1,125.0 million compared to a net debt position of €1,179.9 million as of December 31st, 2018.
RIGHTS-OF-USE & LEASE LIABILITIES, IFRS 16
Rights-of-use, IFRS 16 as of December 31st, 2019 amounted to €3,958.5 million compared to €4,498.1 million as of December 31st , 2018, a decrease related to the amortisation of rights-of-use during the period and contracts renegotiations partially offset by new contracts, contracts extended and contracts renewed.
IFRS 16 lease liabilities decreased by €589.6 million from €5,186.1 million as of December 31st , 2018 to €4,596.5 million as of December 31st , 2019, the decrease in lease liabilities corresponding to rents paid and renegotiated during the period partially offset by new contracts, contracts extended and contracts renewed.
ADJUSTED DATA
Under IFRS 11, applicable from January 1 st , 2014, companies under joint control are accounted for using the equity method.
Under IFRS 16, applicable from January 1 st , 2019, a lease liability for contractual fixed rental payments is recognised on the balance sheet, against a right-of-use asset to be depreciated over the lease term. As regards P&L, the fixed rent expense is replaced by the depreciation of the right-of-use in EBIT, below the operating margin, and a lease interest expense on the lease liability in financial result, below EBIT. IFRS 16 has no impact on cash payments but payment of debt (principal) is booked in funds from financing activities.
However, in order to reflect the business reality of the Group and the readability of our performance, our operating management reports used to monitor the activity, allocate resources and measure performance continue:
- To integrate on proportional basis operating data of the companies under joint control and;
- To exclude the IFRS 16 impact on our core business lease contracts (lease agreements of locations for advertising structures excluding real estate and vehicle rental contracts).
As regards the P&L, it concerns all aggregates down to the EBIT. As regards the cash flow statement, it concerns all aggregates down to the free cash flow.
Consequently, pursuant to IFRS 8, Segment Reporting presented in the financial statements complies with the Group's internal information, and the Group's external financial communication therefore relies on this operating financial information. Financial information and comments are therefore based on "adjusted" data, consistent with historical data, which is reconciled with IFRS financial statements.
In 2019, the impacts of IFRS 11 and IFRS 16 on our adjusted aggregates are:
• -€402.5 million for IFRS 11 on adjusted revenue (-€437.1 million for IFRS 11 in 2018) leaving IFRS revenue at €3,487.6 million (€3,181.4 million in 2018).
- -€123.8 million for IFRS 11 and €1,045.8 million for IFRS 16 on adjusted operating margin (-€133.8 million for IFRS 11 and €967.1 million for IFRS 16 in 2018) leaving IFRS operating margin at €1,714.2 million (€1,533.4 million in 2018).
- -€98.7 million for IFRS 11 and €185.0 million for IFRS 16 on adjusted EBIT before impairment charge (- €109.3 million for IFRS 11 and €106.4 million for IFRS 16 in 2018) leaving IFRS EBIT before impairment charge at €471.6 million (€342.1 million in 2018).
- -€109.4 million for IFRS 11 and €185.0 million for IFRS 16 on adjusted EBIT after impairment charge (- €109.3 million for IFRS 11 and €106.4 million for IFRS 16 in 2018) leaving IFRS EBIT after impairment charge at €460.6 million (€349.8 million in 2018).
- €15.1 million for IFRS 11 on adjusted capital expenditure (€14.3 million for IFRS 11 in 2018) leaving IFRS capital expenditure at -€360.3 million (-€272.1 million in 2018).
- €19.9 million for IFRS 11 and €949.5 million for IFRS 16 on adjusted free cash flow (-€21.8 million for IFRS 11 and €849.1 million for IFRS 16 in 2018) leaving IFRS free cash flow at €1,139.1 million (€969.0 million in 2018).
The full reconciliation between adjusted figures and IFRS figures is provided on page 8 of this release.
NOTES
- (1) Operating Margin: Revenue less Direct Operating Expenses (excluding Maintenance spare parts) less SG&A expenses.
- (2) EBIT: Earnings Before Interests and Taxes = Operating Margin less Depreciation, amortization and provisions (net) less Impairment of goodwill less Maintenance spare parts less Other operating income and expenses.
- (3) Net financial income / (loss): Excluding the net impact of discounting and revaluation of debt on commitments to purchase minority interests (-€12.0 million and -€1.8 million in 2019 and 2018 respectively).
- (4) Free cash flow: Net cash flow from operating activities less capital investments (property, plant and equipment and intangible assets) net of disposals.
- (5) Net debt: Debt net of managed cash less bank overdrafts, excluding the non-cash IAS 32 impact (debt on commitments to purchase minority interests), including the non-cash IFRS 9 impact on both debt and hedging financial derivatives excluding IFRS 16 lease liabilities.
ORGANIC GROWTH DEFINITION
The Group's organic growth corresponds to the adjusted revenue growth excluding foreign exchange impact and perimeter effect. The reference fiscal year remains unchanged regarding the reported figures, and the organic growth is calculated by converting the revenue of the current fiscal year at the average exchange rates of the previous year and taking into account the perimeter variations prorata temporis, but including revenue variations from the gains of new contracts and the losses of contracts previously held in our portfolio.
| €m | Q1 | Q2 | Q3 | Q4 | FY | |
|---|---|---|---|---|---|---|
| 2018 adjusted revenue | (a) | 742.5 | 900.8 | 867.7 | 1,107.5 | 3,618.5 |
| 2019 IFRS revenue | (b) | 753.2 | 898.2 | 832.1 | 1,004.1 | 3,487.6 |
| IFRS 11 impacts | (c) | 86.8 | 104.1 | 93.7 | 118.0 | 402.5 |
| 2019 adjusted revenue | (d) = (b) + (c) | 840.0 | 1,002.3 | 925.8 | 1,122.0 | 3,890.2 |
| Currency impacts | (e) | (13.1) | (9.4) | (10.9) | (12.3) | (45.7) |
| 2019 adjusted revenue at 2018 exchange rates |
(f) = (d) + (e) | 826.9 | 992.9 | 914.9 | 1,109.8 | 3,844.5 |
| Change in scope | (g) | (44.4) | (46.3) | (46.2) | (18.4) | (155.3) |
| 2019 adjusted organic revenue |
(h) = (f) + (g) | 782.5 | 946.6 | 868.7 | 1,091.4 | 3,689.2 |
| Organic growth | (i) = (h) / (a) | +5.4% | +5.1% | +0.1% | -1.5% | +2.0% |
| €m | Impact of currency as of December 31st, 2019 |
|---|---|
| USD | (17.3) |
| HKD | (11.3) |
| UAE | (4.2) |
| RMB | (4.2) |
| Other | (8.7) |
| Total | (45.7) |
| Average exchange rate | FY 2019 | FY 2018 |
|---|---|---|
| USD | 0.8933 | 0.8468 |
| HKD | 0.1140 | 0.1080 |
| UAE | 0.2431 | 0.2304 |
| RMB | 0.1293 | 0.1281 |
Next information:
Q1 2020 revenue: May 12 th, 2020 (after market) Annual General Meeting of Shareholders: May 14 th, 2020
Key Figures for JCDecaux
- 2019 revenue: €3,890m
- Present in 3,890 cities with more than 10,000 inhabitants
- A daily audience of more than 890 million people in more than 80 countries
- 13,210 employees
- Leader in self-service bike rental scheme: pioneer in eco-friendly mobility
- 1 st Out-of-Home Media company to join the RE100 (committed to 100% renewable energy)
- JCDecaux is listed on the Eurolist of Euronext Paris and is part of the Euronext 100 and Euronext Family Business indexes
- JCDecaux is recognised for its extra-financial performance in the FTSE4Good index and the MSCI and CDP 'A List' rankings
- 1,061,630 advertising panels worldwide
- N°1 worldwide in street furniture (517,800 advertising panels)
- N°1 worldwide in transport advertising with more than 160 airports and 270 contracts in metros, buses, trains and tramways (379,970 advertising panels)
- N°1 in Europe for billboards (136,750 advertising panels)
- N°1 in outdoor advertising in Europe (636,620 advertising panels)
- N°1 in outdoor advertising in Asia-Pacific (260,700 advertising panels)
- N°1 in outdoor advertising in Latin America (69,490 advertising panels)
- N°1 in outdoor advertising in Africa (22,760 advertising panels)
- N°1 in outdoor advertising in the Middle East (15,510 advertising panels)
For more information about JCDecaux, please visit jcdecaux.com. Join us on Twitter, LinkedIn, Facebook, Instagram and YouTube.
Forward looking statements
This news release may contain some forward-looking statements. These statements are not undertakings as to the future performance of the Company. Although the Company considers that such statements are based on reasonable expectations and assumptions on the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual performance to differ from those indicated or implied in such statements.
These risks and uncertainties include without limitation the risk factors that are described in the annual report registered in France with the French Autorité des Marchés Financiers.
Investors and holders of shares of the Company may obtain copy of such annual report by contacting the Autorité des Marchés Financiers on its website www.amf-france.org or directly on the Company website www.jcdecaux.com.
The Company does not have the obligation and undertakes no obligation to update or revise any of the forwardlooking statements.
Communications Department: Agathe Albertini
+33 (0) 1 30 79 34 99 – [email protected]
Investor Relations: Arnaud Courtial
+33 (0) 1 30 79 79 93 – [email protected]
Annual business review – FY 2019
Annual financial release – FY 2019
RECONCILIATION BETWEEN ADJUSTED FIGURES AND IFRS FIGURES
| Profit & Loss | 2019 | 2018 | ||||
|---|---|---|---|---|---|---|
| €m | Adjusted | Impact of companies under joint control |
Impact of IFRS 16 from controlled entities (2) |
IFRS | Adjusted | Impact of companies under joint control |
| Revenue | 3,890.2 | (402.5) | - | 3,487.6 | 3,618.5 | (437.1) |
| Net operating costs | (3,098.0) | 278.7 | 1,045.8 | (1,773.5) | (2,918.4) | 303.3 |
| Operating margin | 792.2 | (123.8) | 1,045.8 | 1,714.2 | 700.1 | (133.8) |
| Maintenance spare parts | (41.6) | 1.1 | - | (40.5) | (37.7) | 1.1 |
| Amortisation and provisions (net) | (358.1) | 23.5 | (923.9) | (1,258.6) | (312.2) | 22.1 |
| Other operating income / expenses | (7.2) | 0.5 | 63.1 | 56.4 | (5.2) | 1.3 |
| EBIT before impairment charge | 385.2 | (98.7) | 185.0 | 471.6 | 345.0 | (109.3) |
| Net impairment charge (3) | (0.3) | (10.7) | - | (11.0) | 7.6 | - |
| EBIT after impairment charge | 384.9 | (109.4) | 185.0 | 460.6 | 352.6 | (109.3) |
(1) The 2018 comparative figures are restated from the retrospective application of IFRS 16, applicable from January 1st, 2019.
(2) IFRS 16 impact on core and non-core business contracts from controlled entities
(3) Including impairment charge on net assets of companies under joint control.
| Cash-flow Statement | 2019 | 2018 | ||||
|---|---|---|---|---|---|---|
| €m | Adjusted | Impact of companies under joint control |
Impact of IFRS 16 from controlled entities (2) |
IFRS | Adjusted | Impact of companies under joint control |
| Funds from operations net of maintenance costs |
550.8 | (4.9) | 947.3 | 1,493.2 | 503.4 | (27.0) |
| Change in working capital requirement | (5.8) | 9.7 | 2.2 | 6.2 | (75.3) | (9.1) |
| Net cash flow from operating activities |
545.1 | 4.8 | 949.5 | 1,499.4 | 428.1 | (36.1) |
| Capital expenditure | (375.4) | 15.1 | - | (360.3) | (286.4) | 14.3 |
| Free cash flow | 169.7 | 19.9 | 949.5 | 1,139.1 | 141.7 | (21.8) |
(1) The 2018 comparative figures are restated from the retrospective application of IFRS 16, applicable from January 1st, 2019.
(2) IFRS 16 impact on core and non-core business contracts from controlled entities
BUSINESS HIGHLIGHTS OF FY 2019
Key contracts wins
• Asia-Pacific
In January, JCDecaux announced that its Japanese subsidiary MCDecaux (JCDecaux: 85%; Mitsubishi Corporation: 15%) has won the digital advertising concession of Kansai Airports' 10-year contract.
In October, JCDecaux announced that its Japanese subsidiary MCDecaux (JCDecaux: 85%; Mitsubishi Corporation: 15%) has signed a contract following a public tender to become the exclusive operator of Smart Digital City Information Panels (CIPs) with advertising in the centre of Nagoya City (the fourth-largest metropolitan area after Tokyo, Yokohama and Osaka, with 2.3 million inhabitants).
• Rest of Europe
In January, JCDecaux announced that its Dutch subsidiary, JCDecaux Netherlands, has been awarded a new 11 year (8+3) exclusive contract for all analogue and digital advertising street furniture in Rotterdam, following a competitive tender.
In February, JCDecaux announced that, following a competitive tender, its Spanish subsidiary has won the 15-year analogue and digital advertising street furniture contract for the city of Bilbao (population: 346,332).
• France
In February, JCDecaux announced it has been awarded, following a tender process, an 8-year services concession contract by the City of Paris for columns and display flagpoles.
In March, JCDecaux announced that it has started the roll out of its smart and digital street furniture in 34 cities in Hautsde-Seine (total population: around 1.6 million), under its new exclusive contract with the Department Council.
In April, JCDecaux announced that it has won the 12-year bus shelter contract from the Grenoble urban area public transport authority, Syndicat Mixte des Transports en Commun - SMTC.
In July, JCDecaux announced that following a competitive tender, it has won the advertising street furniture contract for six cities in the Grand Paris Seine Ouest area, an Etablissement Public Territorial (a public local authority created within Greater Paris) comprising eight municipalities, six of which are covered by this new contract (one win: Vanves and five renewals).
In September, JCDecaux announced that it has won, following a competitive tender, the contract to provide bus shelters for the bus network (contract renewal) and the brand-new Bus Rapid Transit (new contract) of Aix-en-Provence.
In October, JCDecaux announced that the consortium formed by Metrobus and JCDecaux has won, following a competitive process, the advertising contract for the public transport network of the Lille metropolitan area, which is made up of 90 municipalities and home to approximately 1.2 million inhabitants.
• Rest of the World
In May, JCDecaux announced that its subsidiary JCDecaux Abu Dhabi has been awarded a 10-year exclusive advertising concession for the new Midfield Terminal of Abu Dhabi International Airport.
• United Kingdom
In February, JCDecaux announced that following a competitive tender, it has signed the bus shelter advertising contract for the London Borough of Camden, with a footprint that covers a large part of central London, including the UK head offices of Google, St. Pancras International (Eurostar station) and the British Museum.
• North America
In July, JCDecaux announced that it has been awarded the iconic Street Furniture contract for San Francisco (population: over 860,000). The 20-year contract was awarded by the San Francisco's Board of Supervisors in a unanimous vote and signed by the Mayor following a competitive tender. The contract covers the program management, including design, installation and daily maintenance of 114 three-sided columns with 2 panels for advertising and 1 panel for City/public service uses, as well as 25 fully accessible automatic public toilets.
Other events
• Group
In February, JCDecaux announced the launch of AAM (Airport Audience Measurement), the first international audience measurement system for the airport industry.
In February, JCDecaux announced two appointments in line with its internal promotion policy. They are effective since March 1st, 2019. Jérôme d'Héré is appointed Director of Mergers & Acquisitions and Development of the Group. Caroline Burtin is appointed Deputy Director of Mergers & Acquisitions and Development of the Group.
In May, JCDecaux announced that it has signed with Kepler Cheuvreux on April 26th, 2019 a liquidity contract regarding JCDecaux S.A. shares traded on Euronext Paris.
In September, JCDecaux has joined RE100, a global leadership initiative for companies committed to 100% renewable electricity. This move underlines the company's current objective of sourcing 100% of its electricity consumption from renewable electricity by 2022. The Group began buying green electricity as part of an ambitious policy rolled out in 2014. In 2018, it was already meeting 69% of its electricity needs with renewable electricity compared with 37% in 2015.
In October, JCDecaux has changed its organisation following Jean-Sébastien Decaux's decision to devote himself, from January 1 st , 2020, to the philanthropic activities of the Decaux family.
• Rest of Europe
In January, JCDecaux announced that Hannelore Majoor has been appointed as CEO for the Dutch subsidiary, JCDecaux Netherlands.
• France
In January, JCDecaux announced that following the publication by the ANFR (National Frequency Agency) report in December 2018 – demonstrating the relevance of the small cells installed on JCDecaux street furniture – the Group will provide support for French telecoms operators to roll out small cells in around ten French cities in 2019. To this end, it will draw on the expertise gained in pilot projects undertaken with these operators in France since 2016.
• United Kingdom
In January, JCDecaux announced that JCDecaux UK strengthens its senior leadership team as it continues to digitally transform its business. Spencer Berwin and Philip Thomas have stepped down from their roles as Co-CEOs at the end of March 2019 and will move to new positions as non-executive directors reporting directly to Jean-François Decaux. Were promoted two JCDecaux Senior Managers, Chris Collins the Managing Director of its Rail and Retail Divisions and Dallas Wiles the Chief Commercial Officer became the new Co-CEOs of JCDecaux UK.
In March, JCDecaux announced that its subsidiary JCDecaux UK has been awarded second place in the prestigious "Best Environmental Sustainability Programme" award in the supplier category, at the Sedex conference in London on March 26th .
• North America
In April, JCDecaux announced that Alan Sullivan has been appointed to the position of Co-CEO of JCDecaux North America. Alan Sullivan will take up his new position on September 1st, 2019.
PERSPECTIVES
Commenting on the 2019 annual results, Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, said:
"Looking at Q1 2020, we expect our adjusted organic revenue to be down around -10%, despite a positive current trading in Street Furniture, reflecting the very material impact from the Covid-19 outbreak and taking into account the Q1 2019 high comparable in Transport. In Asia-Pacific, our business has been significantly affected since the beginning of February, with a very important decline in China in passengers and commuters in the airports and metros where we operate. All our landlords in China fully recognise the significant setback for the advertising business and have all already expressed their intention to grant us rent reductions.
During the past few weeks, we have been talking to our clients / advertisers and we are supporting them with exceptional temporary reliefs. Regarding Travel Retail, most of our clients want to keep their premium locations and their long-term commitments in our airports.
Given the magnitude of the Covid-19 disruption, our Group operating margin should be negatively affected in 2020, despite saving measures being implemented without compromising our operational quality and efficiency, to mitigate the impact. With strong and effective measures notably taken by the Chinese government, a rebound of the economic growth could pave the way for a recovery with consumption and investment activities resuming, once the epidemic is under control."
RELATED PARTIES
Paragraph 9 of the "Notes to the annual consolidated financial statements" on page 77 reports on related parties.
Risk factors
RISK FACTORS
The Group faces a number of internal and external risks that may affect the achievement of its objectives, its business or its financial position.
As specified in the previous chapter, the Group prioritizes each of the risks identified and then groups them into six major risk categories, which include the main risks dealt with in the Declaration of Extra-Financial Performance.
- Fraud, Corruption, Illicit Agreement
- Compliance with laws and regulations
- Financial risks
- Strategic risks
- Operating risks
- Exogenous risks
The Company's main risks are presented in the graph below and described in detail in the following chapters:
The Group has reviewed risks that could have a material adverse effect on its business, financial position or results (or its ability to achieve its objectives), and considers that those presented are the most significant ones.
1. Category: Fraud, Corruption, Illicit Agreement
In this category, the Group has identified risks relating to business ethics at various stages of the value chain: in relations with its customers (advertisers, agencies, etc.), with its contracting authorities (cities, local authorities, transport management companies, etc.) or with its suppliers.
The main risk associated with this category is one dealt with in the Declaration of Extra-Financial Performance: risks related to the Group's reputation and non-compliance with business ethics.
The Group's activity is closely linked to the quality and integrity of relations with contracting authorities (cities, local authorities, transport management companies, etc.). Our reputation and our history of integrity are essential elements in our business, and help us access various public and private contracts. Ethical business conduct is also a key factor in preserving long- term relationships with the Group's advertisers and partners, and in maintaining its reputation for excellence in the market. JCDecaux is also particularly vigilant in respect of business ethics when making acquisitions, particularly in countries deemed sensitive in terms of corruption.
In 2001, the Group published a Code of Ethics setting out the principles and ethical rules to be followed in conducting the Group's business. The Code of Ethics is communicated to all the Group's companies and employees.
2. Category: Compliance with laws and regulations
Several major risks, dealt with in the Declaration of Extra-Financial Performance, fall within this category:
- Risk related to non-respect of Human Rights/Employees
The JCDecaux group operates in more than 75 countries, and 24% of the Group's FTEs are located in countries that have not ratified all the Fundamental Conventions of the International Labor Organization. However, all employees of the Group should have their fundamental human rights respected, as stated in the JCDecaux International Charter of Fundamental Social Values.
JCDecaux has implemented a specific process to deploy the JCDecaux Charters and to ensure a basis of fundamental rights for all its employees.
- Risk related to non-respect of Human Rights/Suppliers
Suppliers are at the heart of the Group's quality processes. JCDecaux has chosen to entrust the production of its products and solutions to trusted third parties. Some of these suppliers are located in countries that have not ratified all the Fundamental Conventions of the International Labor Organization. However, JCDecaux requires its suppliers to comply with these international standards through its Supplier Code of Conduct, whose ratification it requires.
JCDecaux has implemented a specific process to deploy the JCDecaux Charters and to ensure a basis of fundamental rights for all its employees as well as for its subcontractors.
- Risk related to the protection of personal data and non-respect of personal privacy
In the digital and connected age, data are at the core of JCDecaux's business lines. In the course of its business, which among other things covers Wi-Fi access, self-service bicycles, commercial relations, events and websites, JCDecaux may collect and process personal data relating to thousands of third parties. It is its responsibility to guarantee to protect the privacy and personal data of each of these parties, as well as their rights under applicable law.
To reduce the risk associated with the irresponsible processing or violation of this information, JCDecaux has a governance structure and policy on the protection of personal data. This system has been further strengthened by the entry into force of the General Data Protection Regulation:
- a specific governance structure has been put in place: formation of a "GDPR" steering committee, appointment of a Data Protection Officer (DPO) or Privacy Manager at each subsidiary located within the EU, involvement of the Legal Department in each non-EU country
- Group policies and procedures dedicated to the protection of personal data have been published and implemented across all the entities;
- training initiatives (e-learning) have been carried out to raise awareness of these issues among all personnel
On a more general note, as regards the "compliance with laws and regulations" category, the outdoor advertising market is regulated at the local and national level, in the majority of countries where the Group operates, relating to
- the type (analogue/digital billboard), luminosity, density, size and location of billboards and Street Furniture in urban and other areas: regulations, however, are generally moving to reduce the total number of advertising spaces, and/or reduce their size, and local authorities are becoming stricter in applying existing laws and regulations. Some advertising spaces, particularly billboards, could therefore have to be removed or relocated in certain countries in the future.
- the content of advertising messages circulated (in particular, bans and/or restrictions in certain countries on tobacco and alcohol advertising): regarding the advertising of alcoholic beverages, laws and regulations vary considerably from one European country to another, from complete prohibition of billboards to permission only at points of sale or within a certain zone: for example, since a law promulgated in October 2018, alcohol advertising has been banned within 200 meters of schools and crèches and in public transport in Ireland; however, the majority of EU Member States have adopted laws that restrict the content, presentation and/or timing of some advertising. The advertising of alcoholic beverages is also regulated outside the European Union.
3. Category: Financial risks
As a result of its business, the Group may be exposed to varying degrees of financial risks (especially liquidity and financing risk, interest rate risk, foreign exchange rate risk and risks related to financial management, in particular, counterparty risk). The main risk identified in this category is the risk related to the economic environment.
In the event of a worldwide recession, the advertising and communications sector is quite susceptible to business fluctuations as many advertisers may cut their advertising budgets.
The Group must also deal with the cyclical nature of the advertising market. Our line of business is strongly linked to changes in the GDP in the countries where the Group operates. A significant increase or downturn in the economic activity of a country may substantially impact the Group's business and revenue.
The Group's operations in geographically diverse markets minimize the impact of a possible across-the-board decline in the sector, since reactions are disparate and occur at different times on markets in the various countries where it operates.
The Group management and its Finance Department are particularly attentive to cost structures, and adopt action plans to maintain the Group's profitability.
Risk factors
4. Category: Strategic risks
As a result of its business, the Group may face several strategic risks (in particular, reliance on key executive officers, the attractiveness of the employer brand or the ability to deal with changes in the business model).
The two main risks in this category are the following:
- Risk of online hacking of street furniture and dissemination of inappropriate content
Operating in 80 countries, JC Decaux has a digital presence in 47 of these through almost 30,000 street furniture assets. Any external or internal attempt to access the digital screens of the Group's street furniture in order to advertise uncontrolled messages is a major risk, which could affect its results as well as its reputation and its ability to provide a credible digital offering to advertisers. The more offensive and harmful the messages disseminated, the more serious the impacts will be. With the increasing digitization of businesses, securing access to the Group's network, computer systems and data is a priority to protect the value of the Company.
JCDecaux has had a comprehensive IT policy in place for several years to protect itself against the risk of attempts to hack its digital content. Under the Corporate responsibility of the Infrastructure Department, a robust IT security policy has been implemented, with the application of principles governing architecture, a monitoring tool, procedures, action plans and a set of tools (checks, vulnerability assessments, etc.) to ensure digital security to cover all of the risks identified.
- Risk of a cyberattack on the Company's main systems
The Group uses complex information systems to support its commercial, industrial and management activities. The main risks are related to the integrity and maintenance of the operational capacity of its systems.
The Group's information systems are protected on several levels: the data centers are secure, access to software controlled and our billboard systems audited. These protections concern in particular the computer platform used for the preparation and dissemination of digital advertising campaigns. This platform relies on a private network and is operated by the JCDecaux teams in accordance with strict end-to-end control and audit rules. It is monitored 24/7 in order to detect and deal with any operational anomalies in real time. In addition, Business Recovery Plans aimed at ensuring the continuity of our operations are tested several times a year. Moreover, in order to improve the security of IT systems on a continuous basis and to limit the consequences of any malfunctions, the various risks (incidents affecting data centers, failure of equipment or telecommunications systems, security breaches, human error, etc.) are regularly assessed. Based on these assessments, the resources in place are strengthened or/and new protective measures developed to clamp down on any attempted security breaches, disclosure of confidential information, data loss or corruption, loss of traceability, etc.
5. Category: Operating risks
In this category, the Group has identified the operating risks related to these various activities (in particular when selling advertising spaces or during billboard, cleaning and maintenance activities).
The main risk associated with this category is one dealt with in the Declaration of Extra-Financial Performance: Risks related to the health and safety of employees and subcontractors.
There are more than 400 different skills within JCDecaux, from the design of street furniture to the marketing of advertising space, not forgetting furniture's upkeep and maintenance and advertising spaces. Operational and field staff, which represented approximately 51% of the Group's total workforce in 2018, are more exposed to the risks of accidents and incidents through their activities. This may include work at great height, use of electricity or in proximity to electrical equipment, road driving or work close to roads or railways, work in places where the "density" of the public is considerable (airports, railway stations, metro systems, pavements, etc.).
JCDecaux has implemented a Group Health & Safety Policy.
6. Category: Exogenous risks
This category includes all the risks related to natural disasters or external social, political or epidemiological factors: in fact, given that the Group operates in many countries, it may, for example, be affected by a period of economic or political instability.
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS – FY 2019
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
Assets
| In million euros | 31/12/2019 | 31/12/2018 Restated (1) |
01/01/2018 Restated (1) |
|
|---|---|---|---|---|
| Goodwill | § 4.1 | 1,779.0 | 1,939.0 | 1,341.3 |
| Other intangible assets | § 4.1 | 612.5 | 393.6 | 301.9 |
| Property, plant and equipment | § 4.2 | 1,394.7 | 1,274.0 | 1,135.3 |
| Right-of-use | § 4.3 | 3,958.5 | 4,498.1 | 3,893.1 |
| Investments under the equity method | § 4.5 | 452.3 | 443.6 | 447.8 |
| Other financial assets | § 4.6 | 75.8 | 75.4 | 78.2 |
| Financial derivatives | § 4.17 | 0.1 | - | - |
| Deferred tax assets | § 4.11 | 122.7 | 137.6 | 114.0 |
| Current tax assets | § 4.19 | 1.4 | 1.1 | 1.5 |
| Other receivables | § 4.7 | 17.1 | 18.3 | 15.4 |
| NON-CURRENT ASSETS | 8,414.1 | 8,780.6 | 7,328.4 | |
| Other financial assets | § 4.6 | 4.5 | 30.2 | 3.7 |
| Inventories | § 4.8 | 175.1 | 159.4 | 123.8 |
| Financial derivatives | § 4.17 | 1.1 | 4.9 | 0.2 |
| Trade and other receivables | § 4.9 | 1,021.5 | 1,001.0 | 874.5 |
| Current tax assets | § 4.19 | 34.5 | 18.4 | 49.9 |
| Treasury financial assets | § 4.10 | 83.5 | 81.2 | 277.9 |
| Cash and cash equivalents | § 4.10 | 149.8 | 112.3 | 728.3 |
| CURRENT ASSETS | 1,470.0 | 1,407.4 | 2,058.3 | |
| TOTAL ASSETS | 9,884.1 | 10,188.0 | 9,386.7 |
(1) See Note 1.2 "Change in accounting methods".
Annual consolidated financial statements
Equity and liabilities
| In million euros | 31/12/2019 | 31/12/2018 Restated (1) |
01/01/2018 Restated (1) |
|
|---|---|---|---|---|
| Share capital | 3.2 | 3.2 | 3.2 | |
| Additional paid-in capital | 608.5 | 606.4 | 602.4 | |
| Consolidated reserves | 1,510.2 | 1,437.2 | 1,376.5 | |
| Consolidated net income (Group share) | 265.5 | 197.2 | 189.9 | |
| Other components of equity | (155.9) | (166.2) | (146.1) | |
| EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY | 2,231.5 | 2,077.9 | 2,025.9 | |
| Non-controlling interests | 36.8 | 30.9 | 32.3 | |
| TOTAL EQUITY | § 4.12 | 2,268.3 | 2,108.8 | 2,058.2 |
| Provisions | § 4.13 | 360.1 | 332.8 | 315.8 |
| Deferred tax liabilities | § 4.11 | 132.1 | 64.0 | 53.0 |
| Financial debt | § 4.14 | 753.1 | 1,062.9 | 772.2 |
| Debt on commitments to purchase non-controlling interests | § 4.15 | 104.8 | 87.8 | 80.1 |
| Lease liabilities | § 4.16 | 3,564.3 | 4,163.2 | 3,664.3 |
| Other payables | 22.0 | 15.0 | 11.5 | |
| Income tax payable | § 4.19 | 0.0 | 0.0 | 0.0 |
| Financial derivatives | § 4.17 | 0.0 | 0.2 | 0.5 |
| NON-CURRENT LIABILITIES | 4,936.5 | 5,726.0 | 4,897.3 | |
| Provisions | § 4.13 | 58.3 | 61.6 | 51.3 |
| Financial debt | § 4.14 | 595.7 | 289.6 | 578.1 |
| Debt on commitments to purchase non-controlling interests | § 4.15 | 4.6 | 4.6 | 21.9 |
| Financial derivatives | § 4.17 | 3.3 | 1.3 | 4.9 |
| Lease liabilities | § 4.16 | 1,032.3 | 1,022.9 | 865.9 |
| Trade and other payables | § 4.18 | 930.7 | 905.4 | 856.6 |
| Income tax payable | § 4.19 | 46.9 | 43.4 | 39.6 |
| Bank overdrafts | § 4.14 | 7.4 | 24.3 | 12.8 |
| CURRENT LIABILITIES | 2,679.3 | 2,353.2 | 2,431.2 | |
| TOTAL LIABILITIES | 7,615.7 | 8,079.2 | 7,328.5 | |
| TOTAL EQUITY AND LIABILITIES | 9,884.1 | 10,188.0 | 9,386.7 |
(1) See Note 1.2 "Change in accounting methods".
STATEMENT OF COMPREHENSIVE INCOME
INCOME STATEMENT
| In million euros | 2019 | 2018 Restated (1) |
|
|---|---|---|---|
| REVENUE | § 5.1 | 3,487.6 | 3,181.4 |
| Direct operating expenses | § 5.2 | (1,222.4) | (1,127.0) |
| Selling, general and administrative expenses | § 5.2 | (551.2) | (521.0) |
| OPERATING MARGIN | 1,714.2 | 1,533.4 | |
| Depreciation, amortisation and provisions (net) | § 5.2 | (1,259.5) | (1,142.5) |
| Impairment of goodwill | § 5.2 | (10.0) | (1.4) |
| Maintenance spare parts | § 5.2 | (40.5) | (36.6) |
| Other operating income | § 5.2 | 83.4 | 36.6 |
| Other operating expenses | § 5.2 | (27.0) | (39.7) |
| EBIT | 460.6 | 349.8 | |
| Interest expenses on IFRS 16 lease | § 5.3 | (152.0) | (152.2) |
| Financial income | § 5.3 | 6.4 | 7.7 |
| Financial expenses | § 5.3 | (42.8) | (34.6) |
| Net financial income excluding IFRS 16 | § 5.3 | (36.4) | (26.9) |
| NET FINANCIAL INCOME (LOSS) | (188.4) | (179.0) | |
| Income tax | § 5.4 | (92.1) | (57.8) |
| Share of net profit of companies under the equity method | § 5.5 | 102.0 | 99.5 |
| PROFIT OF THE YEAR FROM CONTINUING OPERATIONS | 282.2 | 212.5 | |
| Gain or loss on discontinued operations | 0.0 | 0.0 | |
| CONSOLIDATED NET INCOME | 282.2 | 212.5 | |
| - Including non-controlling interests | 16.7 | 15.3 | |
| CONSOLIDATED NET INCOME (GROUP SHARE) | 265.5 | 197.2 | |
| Earnings per share (in euros) | 1.247 | 0.927 | |
| Diluted earnings per share (in euros) | 1.247 | 0.926 | |
| Weighted average number of shares | § 5.7 | 212,895,694 | 212,765,223 |
| Weighted average number of shares (diluted) | § 5.7 | 212,918,809 | 212,808,951 |
(1) See Note 1.2 "Change in accounting methods".
STATEMENT OF OTHER COMPREHENSIVE INCOME
| In million euros | 2019 | 2018 Restated (1) |
|---|---|---|
| CONSOLIDATED NET INCOME | 282.2 | 212.5 |
| Translation reserve adjustments on foreign transactions (2) | 11.7 | (21.9) |
| Translation reserve adjustments on net foreign investments | (0.9) | (1.9) |
| Cash flow hedges | (1.1) | 2.6 |
| Tax on the other comprehensive income subsequently released to net income | 0.3 | (0.0) |
| Share of other comprehensive income of companies under the equity method (after tax) | 4.8 | (2.8) |
| Other comprehensive income subsequently released to net income | 14.9 | (24.0) |
| Change in actuarial gains and losses on post-employment benefit plans and assets ceiling | (13.1) | (2.1) |
| Tax on the other comprehensive income not subsequently released to net income | 2.4 | (0.2) |
| Share of other comprehensive income of companies under the equity method (after tax) | 6.0 | 1.8 |
| Other comprehensive income not subsequently released to net income | (4.7) | (0.6) |
| Total other comprehensive income | 10.2 | (24.5) |
| TOTAL COMPREHENSIVE INCOME | 292.4 | 188.0 |
| - Including non-controlling interests | 16.2 | 14.9 |
| TOTAL COMPREHENSIVE INCOME - GROUP SHARE | 276.2 | 173.1 |
See Note 1.2 "Change in accounting methods".
(1) In 2019, the translation reserve adjustments on foreign transactions were related to changes in foreign exchange rates, of which €5.4 million in Mexico, €12.2 million in the United Kingdom, €(4.2) million in Israel, €(4.9) million in Zimbabwe, €2.9 million in South Africa. The item also included a €(1.0) million transfer in the income statement related to the changes in scope.
In 2018, the translation reserve adjustments on foreign transactions were related to changes in foreign exchange rates, of which €(11.3) million in Australia, €(6.8) million in Brazil, €(4.9) million in Angola, €(4.1) million in South Africa and €10.1 million in Hong Kong. The item also included a €0.5 million transfer in the income statement related to the changes in scope.
STATEMENT OF CHANGES IN EQUITY
| Equity attribuable to the owners of the parent company | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share Capital |
Additionnal paid-in capital |
Treasury shares |
Retained earnings |
Other components of equity | Total | Non controlling interests |
Total | |||||||
| Cash flow hedges |
Available for sale securities |
Translation reserve adjustments |
Revaluation reserves |
Actuarial gains and losses / assets ceiling |
Other | Total other components |
||||||||
| In million euros Equity as of 01 January 2018 Published |
3.2 | 602.4 | 0.0 | 1,863.4 | (0.2) | (0.1) | (65.7) | 0.9 | (53.3) | 0.8 | (117.6) | 2,351.4 | 60.7 | 2,412.1 |
| IFRS 16 Restatement | (297.0) | (28.5) | (28.5) | (325.5) | (28.4) | (353.9) | ||||||||
| Equity as of 01 January 2018 restated for IFRS 16 (1) | 3.2 | 602.4 | 0.0 | 1,566.4 | (0.2) | (0.1) | (94.2) | 0.9 | (53.3) | 0.8 | (146.1) | 2,025.9 | 32.3 | 2,058.2 |
| IFRS 9 Restatement | (1.2) | 0.0 | (1.2) | (0.1) | (1.3) | |||||||||
| Equity as of 01 January 2018 restated for IFRS 9 and IFRS 16 (1) | 3.2 | 602.4 | 0.0 | 1,565.2 | (0.2) | (0.1) | (94.2) | 0.9 | (53.3) | 0.8 | (146.1) | 2,024.7 | 32.2 | 2,056.9 |
| Capital increase (2) | 0.0 | 3.0 | 0.0 | 0.0 | 3.0 | 1.0 | 4.0 | |||||||
| Distribution of dividends | (119.1) | 0.0 | (119.1) | (16.6) | (135.7) | |||||||||
| Share-based payments | 1.0 | 0.0 | 1.0 | 0.0 | 1.0 | |||||||||
| Debt on commitments to purchase non-controlling interests (4) |
0.0 | 0.0 | 11.3 | 11.3 | ||||||||||
| Change in consolidation scope (5) | (8.8) | 4.0 | 4.0 | (4.8) | (11.8) | (16.6) | ||||||||
| Consolidated net income | 197.2 | 0.0 | 197.2 | 15.3 | 212.5 | |||||||||
| Other comprehensive income | 1.9 | (25.6) | (0.4) | (24.1) | (24.1) | (0.5) | (24.5) | |||||||
| Total comprehensive income | 0.0 | 0.0 | 0.0 | 197.2 | 1.9 | 0.0 | (25.6) | 0.0 | (0.4) | 0.0 | (24.1) | 173.1 | 14.9 | 188.0 |
| Other | ||||||||||||||
| Equity as of 31 December 2018 restated (1) | 3.2 | 606.4 | 0.0 | 1,634.4 | 1.7 | (0.1) | (115.7) | 0.9 | (53.7) | 0.8 | (166.2) | 2,077.9 | 30.9 | 2,108.8 |
| Capital increase (2) | 0.0 | 1.8 | 0.0 | 0.0 | 1.8 | 0.3 | 2.2 | |||||||
| Change in treasury shares (3) | (0.6) | 0.1 | 0.0 | (0.5) | 0.0 | (0.5) | ||||||||
| Purchase | (12.1) | (12.1) | 0.0 | (12.1) | ||||||||||
| Sale | 11.5 | 0.1 | 11.6 | 0.0 | 11.6 | |||||||||
| Distribution of dividends | (123.4) | 0.0 | (123.4) | (12.2) | (135.6) | |||||||||
| Share-based payments | 0.2 | 0.0 | 0.2 | 0.0 | 0.2 | |||||||||
| Debt on commitments to purchase non-controlling interests (4) |
0.0 | 0.0 | (5.0) | (5.0) | ||||||||||
| Change in consolidation scope (5) | (0.2) | (0.4) | (0.4) | (0.6) | 6.5 | 5.9 | ||||||||
| Consolidated net income | 265.5 | 0.0 | 265.5 | 16.7 | 282.2 | |||||||||
| Other comprehensive income | (0.8) | 16.0 | (4.5) | 10.7 | 10.7 | (0.5) | 10.2 | |||||||
| Total comprehensive income | 0.0 | 0.0 | 0.0 | 265.5 | (0.8) | 0.0 | 16.0 | 0.0 | (4.5) | 0.0 | 10.7 | 276.2 | 16.2 | 292.4 |
| Other | ||||||||||||||
| Equity as of 31 December 2019 | 3.2 | 608.5 | (0.6) | 1,776.4 | 0.9 | (0.1) | (100.2) | 0.9 | (58.2) | 0.8 | (155.9) | 2,231.5 | 36.8 | 2,268.3 |
(1) See Note 1.2 "Change in accounting methods".
(2) Increase in JCDecaux SA's additional paid-in capital related to the exercise of stock options and increases in the capital of controlled entities.
(3) Change in treasury shares of JCDecaux SA under the liquidity agreement concluded on May 2019.
(4) In 2019, new purchase commitment.
In 2018, exercise of a commitment to purchase non-controlling interests and change in scope. Revaluation and discounting effects on commitments to purchase non-controlling interests are recorded in the income statement under the line item "Consolidated net income" in "Non-controlling interests" for €(12.0) million in 2019 compared to €(1.8) million in 2018.
(5) In 2019, changes in consolidation scope are mainly related to disposals without loss of control in Latin America and Europe. In 2018, changes in consolidation scope are mainly related to the purchase of the non-controlling interests in Latin America.
Annual consolidated financial statements
STATEMENT OF CASH FLOWS
| In million euros | 2019 | 2018 Restated (1) |
|
|---|---|---|---|
| NET INCOME BEFORE TAX | 374.2 | 270.3 | |
| Share of net profit of companies under the equity method | § 5.5 | (102.0) | (99.5) |
| Dividends received from companies under the equity method | § 10.4 & § 11.3 | 105.6 | 103.5 |
| Expenses related to share-based payments | § 5.2 | 0.2 | 1.0 |
| Depreciation, amortisation and provisions (net) | § 5.2 & § 5.3 | 1,270.4 | 1,144.9 |
| Capital gains and losses and net income (loss) on changes in scope | § 5.2 & § 5.3 | (11.0) | (21.1) |
| Gains and losses on lease contracts | § 5.2 | (63.0) | (0.8) |
| Net discounting expenses | § 5.3 | 16.6 | 7.3 |
| Net interest expense & interest expenses on IFRS16 lease | § 5.3 | 163.3 | 162.6 |
| Financial derivatives, translation adjustments and other | 6.2 | 0.5 | |
| Change in working capital | 6.2 | (104.3) | |
| Change in inventories | (5.7) | (34.6) | |
| Change in trade and other receivables | 11.0 | (90.9) | |
| Change in trade and other payables | 0.9 | 21.1 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | 1,766.6 | 1,464.3 | |
| Interest paid on IFRS16 lease | § 4.16 | (154.7) | (149.5) |
| Interest paid | (17.4) | (27.4) | |
| Interest received | 5.5 | 6.8 | |
| Income tax paid | (100.6) | (53.1) | |
| NET CASH FLOWS FROM OPERATING ACTIVITIES | § 6.1 | 1,499.4 | 1,241.1 |
| Cash payments on acquisitions of intangible assets and property, plant and equipment | (378.9) | (309.8) | |
| Cash payments on acquisitions of financial assets (long-term investments) net of cash acquired | (15.6) | (673.3) | |
| Acquisitions of other financial assets | (4.9) | (34.1) | |
| Total investments | (399.4) | (1,017.2) | |
| Cash receipts on proceeds on disposals of intangible assets and property, plant and equipment Cash receipts on proceeds on disposals of financial assets (long-term investments) net of |
18.6 | 37.7 | |
| cash sold | 1.6 | 4.2 | |
| Proceeds on disposals of other financial assets | 31.9 | 9.3 | |
| Total asset disposals | 52.1 | 51.2 | |
| NET CASH FLOWS FROM INVESTING ACTIVITIES | § 6.2 | (347.3) | (966.0) |
| Dividends paid | (135.6) | (135.7) | |
| Purchase of treasury shares | (12.1) | - | |
| Cash payments on acquisitions of non-controlling interests | (2.9) | (15.3) | |
| Capital decrease | 0.0 | 0.0 | |
| Repayment of long-term borrowings | § 6.4 | (83.5) | (644.0) |
| Repayment of lease liabilities | § 4.16 | (949.5) | (849.1) |
| Acquisitions and disposals of treasury financial assets | (1.1) | 199.0 | |
| Cash outflow from financing activities | (1,184.8) | (1,445.1) | |
| Cash receipts on proceeds on disposal of interests without loss of control | 8.5 | - | |
| Capital increase | 2.2 | 4.0 | |
| Sale of treasury shares | 11.6 | - | |
| Increase in long-term borrowings | § 6.4 | 79.6 | 545.3 |
| Cash inflow from financing activities | 101.9 | 549.3 | |
| NET CASH FLOWS FROM FINANCING ACTIVITIES | § 6.3 | (1,082.8) | (895.8) |
| CHANGE IN NET CASH POSITION | 69.3 | (620.7) | |
| Net cash position beginning of period | § 4.14 | 88.0 | 715.5 |
| Effect of exchange rate fluctuations and other movements | (14.8) | (6.8) | |
| Net cash position end of period (2) | § 4.14 | 142.4 | 88.0 |
(1) See Note 1.2 "Change in accounting methods".
Including €149.8 million in cash and cash equivalents and €(7.4) million in bank overdrafts as of 31 December 2019, compared to €112.3 million and €(24.3) million, respectively, as of 31 December 2018.
NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING METHODS AND PRINCIPLES
1.1. General principles
The JCDecaux SA consolidated financial statements for the year ended 31 December 2019 include JCDecaux SA and its subsidiaries (hereinafter referred to as the "Group") and the share of the Group's equity in associates and joint ventures.
Pursuant to European Regulation No. 1606/2002 of 19 July 2002, the 2019 consolidated financial statements were prepared in accordance with IFRS, as adopted by the European Union. They were approved by the Executive Board and were authorised for release by the Supervisory Board on 4 March 2020. These financial statements shall only be considered final upon approval by the General Meeting of Shareholders.
The values shown in the tables are generally expressed in millions of euros. The sum of the rounded amounts may differ, albeit insignificantly, from the reported values.
The principles used for the preparation of these financial statements are based on:
- All standards and interpretations adopted by the European Union and in force as of 31 December 2019. These are available on the European Commission website. Moreover, these principles are the same as the IFRS published by the IASB;
- Accounting treatments adopted by the Group when no guidance is provided by current standards.
These various options and positions can be broken down as follows:
The Group has implemented the following standards, amendments to standards and interpretations adopted by the European Union and applicable from 1 January 2019:
- IFRS 16 "Leases";
- IFRIC 23 "Uncertainty over Income Tax Treatments";
- IFRS 9 Amendments "Prepayment Features with Negative Compensation";
- IAS 28 Amendments "Long-term Interests in Associates and Joint Ventures";
- IAS 19 Amendments "Plan Amendments, Curtailments, or Settlements";
- Annual improvements to IFRS: 2015-2017 cycle.
The impacts related to the application of IFRS 16 are detailed in Note 1.2 "Change in accounting methods". The application of other amendments, interpretations and standards, in particular IFRIC 23 interpretation, had no significant impact on the consolidated financial statements.
In the absence of specific IFRS provisions on the accounting treatment of debts on commitments to purchase noncontrolling interests, the accounting principles used in the previous consolidated financial statements were maintained and are explained under Note 1.19 "Commitments to purchase non-controlling interests". In particular, subsequent revaluation and discounting effects of the debt arising from such commitments are recognised in net financial income and allocated to non-controlling interests in the income statement, with no impact on the net income (Group share).
In addition, the Group has opted not to apply in advance the new standards, amendments to standards and interpretations, adopted by the European Union when their application is only mandatory after 31 December 2019.
1.2. Change in accounting methods
1.2.1 First time adoption of IFRS 16
The Group has applied IFRS 16 "Leases" since 1 January 2019, using the full retrospective transition method with restatement of comparative figures in the financial statements.
IFRS 16 leads to the recognition of a lease liability for contractual minimum and fixed rental payments (or variable on an indexation basis) against a right-of-use, in assets section, which is depreciated linearly over the lease duration or the useful life of the underlying-asset. Variable rental payments based on revenue are excluded from the lease liability and remain in operating expenses when they occur.
The fixed lease rental in operating margin is replaced by amortisation of the right-of-use recognised in EBIT and the financial expense of the lease liability recorded in financial income and expenses. The standard has no impact on net income over the lease term, but has a negative impact at the beginning of the lease contract which reverses over time due to declining interest expenses.
Notes to the annual consolidated financial statements
The Group's net debt excludes lease liabilities (liabilities related to existing contracts classified at the transition date as finance leases under IAS 17 are also excluded).
IFRS 16 has no impact on the cash variation but it has a positive effect on operating activities as the interests portion remains in operating activities while the principal portion is moved to financing activities.
Deferred taxes are recognised on leases within the scope of IFRS 16.
The Group is applying the practical expedient under which an entity is not required to reassess whether a contract is, or contains, a lease at the date of initial application by using analysis performed under IAS 17 "Leases" and IFRIC 4 "Determining whether an arrangement contains a Lease".
However, starting from 1 January 2019, each new contract is subject to analysis to conclude whether it meets the definition of a lease contract. When the contractor who has conceded advertising space to the Group has a substitution right allowing them to replace any space allocated at the start of the contract with another one over the contract's duration, in order to meet their operational needs (except in the case of a maintenance and repair activity), this right is considered to be substantial. In this case the Group does not have control over the assets. The contract therefore does not meet the definition of a lease contract in application of IFRS 16.
The assessment of the substance of the substitution right requires judgment and depends on the facts and circumstances of each contract. Advertising spaces are generally substitutable from one location to another.
Most contracts relating to Street furniture and Transport activities include substitution right clauses for the benefit of the contractor for which the Group has concluded that they are substantive. Contracts commencing after 1 January 2019 and including such substantive substitution rights, are therefore not recognized in the Group's consolidated statement of financial position. They are disclosed in off-balance sheet commitments for the amount of fixed rents to which the Group is committed.
Moreover, both exemptions authorized by IFRS 16 – short-term leases and low value leases – have been applied.
The lease liability level depends on the assumptions used for the calculation thereof, such as duration term and marginal borrowing rate.
The marginal borrowing rate is calculated for each lease as the risk-free rate for the lease's currency plus the currency basis, if available, and the subsidiary's credit margin based on the Group's credit risk. These components are defined in light of the average weighted life of the lease.
Most of the time, the initial duration of contracts is the one recognised as reasonably certain, with no extension option for which the Group is not the decision-maker, except in specific cases. With respect to extension or termination options, the Group complies with IFRS 16:
- The reasonably certain end date is the one taken into account in the lease liability calculation. Thus, an extension (or early termination) option is selected only when the Group is reasonably certain to exercise this option;
- An extension (or early termination) option is selected when JCDecaux has the decision in its own hands;
- The extension (or early termination) duration taken into account is retained on the basis of the overall economy of the contract and not only the contractual termination payments. If only one of the parties has an economic interest in not interrupting this contract, then the contract is enforceable beyond the date on which it can be interrupted.
Regarding the IFRIC interpretation relating to Lease Term and Useful Life of Leasehold Improvements having received an enforceable conclusion on 16 December 2019, an analysis has been carried out and did not reveal any significant distortion between the duration of amortisation of fixtures and the contractual duration of leases under IFRS 16.
Regarding French real estate leases, the position of the French Accounting Standards Authority of 16 February 2018 has been applied. Accordingly, for French real estate leases, there is no renewal option at the end of the lease and the period during which the contract is enforceable is generally 9 years, the non-cancellable period being 3 years.
Changes and re-estimates of contracts are mainly related to signed amendments to contracts and to the life time of the contract, in particular a change in the amount of rents to be paid or a change in the reasonably certain end date when a decision is made on the extension or the early termination of a contract. They lead to a re-estimation of the lease liability against the right-of-use, and may lead in some cases to a positive impact in the income statement.
Contracts already signed but not started at the closing date are disclosed in the off-balance sheet commitments.
1.2.2 IFRS 16 Contracts description
More than 20,000 contracts have been identified in more than 75 countries, they are essentially signed with municipalities, airports, transport companies, malls and private landlords. The purpose of these contracts is to secure
Notes to the annual consolidated financial statements
locations in order to install advertising structures used for the Group's main activity. From more than 20,000 contracts within the scope of IFRS 16, almost 90% are advertising space lease agreements (Street furniture, Transport, and Billboard). The remaining 10% are real estate and vehicle contracts. The portion of rent and fees relating to advertising space leases before IFRS 16 represented more than 50% of the operating costs in the Group's operating margin, and 2/3 of those rent and fees relating to advertising space leases are fixed (or fixed in substance) fees within the scope of IFRS 16 and therefore included in the lease liability calculation. Real estate and vehicle contracts that represent a low portion of in-scope contracts, have no specific criteria compared with other group companies.
JCDecaux's Core business contracts often have specificities related to the activity they belong to (Street furniture, Transport and Billboard) or to their geographic area (local regulation or market practice). Most of the time, in the street furniture and transport activities, each contract is a specific case, with complex terms arising from direct negotiations or tender-offer conditions. The terms may also be renegotiated during the life of the contract, most of the time due to unexpected market events or to operational deployment of advertising structures. In Street furniture and Transport activities, these contracts include in almost all cases a substitution right on the advertising spaces in the hand of the contractor. When this substitution right is substantial, as indicated in Note 1.2.1, then the contracts do not fall within the scope of IFRS 16 and the fixed fees are recorded in the off-balance sheet commitments.
Fixed (or fixed in-substance) rent and fees are very often minimum guarantees of variable fees based on the revenue generated by advertising structures installed in the locations the Group rents. This is mainly the case in the transport and malls activities and is frequently the case for street furniture, however it is rarer in the large format billboard activity where rent and fees are not usually linked to revenue generated.
Fixed rent and fees and/or fixed in substance rent and fees or minimum guarantees can, according to the contracts:
- Have a flat amount over the duration of the contract;
- Vary according to a certain index (inflation, construction ...) or under the same calculation method more specific to a given contract (passenger numbers in transport contracts for example);
- Increase due to an expected ramp-up of the advertising revenue in line with the progressive installation of advertising structures, the opening of new subway lines or a new airport terminal;
- Vary based on a percentage of rent and fees paid (including the variable portion) during the previous year.
Contracts can have very different initial terms, ranging from 1 to 35 years in total:
- For the street furniture activity, contracts range from 1 to 35 years. This depends on tender-offer terms and, in a few cases, on direct negotiation with the municipalities. This duration totally depends on the economic model set out in the municipalities' specifications, and in particular on JCDecaux expected capex level for advertising and non-advertising furniture. The higher the capex, the longer it takes to balance the economic model.
- For the transport activity, contracts range from 1 to 21 years. The duration also depends, most often, on tenderoffer terms. The contract duration is generally shorter and the rent and fees level is higher than in the street furniture activity, due to the lower capex and operational costs compared to revenue from advertising structures.
- For the large format billboard activity, contracts range from 1 to 32 years. The duration varies significantly according to the countries and their local regulations, which are more or less restrictive, as well as the market practices relating to the relationship between lessees and private landlords.
Regarding extension and renewal terms:
- According to local regulations or market practices, large format billboard contracts often have tacit renewal or automatic renewal clauses which are country-dependent. In such cases, the duration applied is the renewal term for which the Group is committed, since the lessee or the lessor can terminate the contract at the end of each renewal period.
- Street furniture or transport contracts may provide for extension periods to the initial duration of the contract. These are either dependent on a joint agreement between the two parties or on one party only. When applying IFRS 16 on an initial contract, extensions to the contractual period are only considered when JCDecaux is the only party able to exercise this option, these cases being rather rare. Renewals of street furniture or transport contracts are generally made through new contracts, following a competitive bidding procedure (most often through a tender offer).
Only a small number of contracts has been identified in which JCDecaux has the sole right to exercise an early termination option. Most often, either the agreement of both parties is required, or the early termination option can be used under specific condition (force majeure, change of direction of road traffic in large format billboard, major economic recession or advertising market collapse in certain transport contracts).
1.2.3 Impact of retrospective application of IFRS 16 on the 2018 and 2017 financial statements
1.2.3.1. Impact of retrospective application of IFRS 16 on the income statement for 2018
The changes detailed above have the following impacts on the different items of the 2018 consolidated income statement:
| In million euros | 2018 Published |
IFRS 16 impact |
2018 Restated |
|---|---|---|---|
| REVENUE | 3,181.4 | 0.0 | 3,181.4 |
| Direct operating expenses | (2,107.4) | 980.4 | (1,127.0) |
| Selling, general and administrative expenses | (549.9) | 28.9 | (521.0) |
| OPERATING MARGIN | 524.1 | 1,009.3 | 1,533.4 |
| Depreciation, amortisation and provisions (net) | (243.8) | (898.7) | (1,142.5) |
| Impairment of goodwill | (1.4) | 0.0 | (1.4) |
| Maintenance spare parts | (36.6) | 0.0 | (36.6) |
| Other operating income | 35.8 | 0.8 | 36.6 |
| Other operating expenses | (39.7) | 0.0 | (39.7) |
| EBIT | 238.4 | 111.4 | 349.8 |
| Interest expenses on IFRS 16 lease | - | (152.2) | (152.2) |
| Financial income | 7.7 | 0.0 | 7.7 |
| Financial expenses | (34.6) | 0.0 | (34.6) |
| Net financial income (loss) excluding IFRS 16 | (26.9) | 0.0 | (26.9) |
| NET FINANCIAL INCOME (LOSS) | (26.9) | (152.2) | (179.0) |
| Income tax | (72.7) | 14.9 | (57.8) |
| Share of net profit of companies under the equity method | 98.1 | 1.4 | 99.5 |
| PROFIT OF THE YEAR FROM CONTINUING OPERATIONS | 236.9 | (24.5) | 212.5 |
| Gain or loss on discontinued operations | 0.0 | 0.0 | 0.0 |
| CONSOLIDATED NET INCOME | 236.9 | (24.5) | 212.5 |
| - Including non-controlling interests | 17.0 | (1.7) | 15.3 |
| CONSOLIDATED NET INCOME (GROUP SHARE) | 219.9 | (22.8) | 197.2 |
| Earnings per share (in euros) | 1.034 | (0.107) | 0.927 |
| Diluted earnings per share (in euros) | 1.033 | (0.107) | 0.926 |
| Weighted average number of shares | 212,765,223 | 212,765,223 | |
| Weighted average number of shares (diluted) | 212,808,951 | 212,808,951 |
Notes to the annual consolidated financial statements
1.2.3.2. Impact of retrospective application of IFRS 16 on the statement of financial position as of 1 January 2018 and 31 December 2018
The changes detailed above have the following impacts as of 1 January 2018 and 31 December 2018 on the different items of the statement of financial position, with an impact on equity for €(353.9) million as of 1 January 2018:
| In million euros | 01/01/2018 | IFRS 16 | 01/12/2018 |
|---|---|---|---|
| Published | Impact | Restated | |
| Goodwill | 1,341.3 | 0.0 | 1,341.3 |
| Other intangible assets | 301.9 | 0.0 | 301.9 |
| Property, plant and equipment (1) | 1,156.3 | (21.1) | 1,135.3 |
| Right-of-use | 3,893.1 | 3,893.1 | |
| Investments under the equity method | 476.0 | (28.2) | 447.8 |
| Other financial assets | 90.3 | (12.1) | 78.2 |
| Deferred tax assets | 92.3 | 21.7 | 114.0 |
| Current tax assets | 1.5 | 0.0 | 1.5 |
| Other receivables | 23.8 | (8.4) | 15.4 |
| NON-CURRENT ASSETS | 3,483.4 | 3,845.0 | 7,328.4 |
| Other financial assets | 3.7 | 0.0 | 3.7 |
| Inventories | 123.8 | 0.0 | 123.8 |
| Financial derivatives | 0.2 | 0.0 | 0.2 |
| Trade and other receivables | 918.1 | (43.6) | 874.5 |
| Current tax assets | 49.9 | 0.0 | 49.9 |
| Treasury financial assets | 277.9 | 0.0 | 277.9 |
| Cash and cash equivalents | 728.3 | 0.0 | 728.3 |
| CURRENT ASSETS | 2,101.9 | (43.6) | 2,058.3 |
| TOTAL ASSETS | 5,585.3 | 3,801.4 | 9,386.7 |
| Share capital | 3.2 | 0.0 | 3.2 |
| Additional paid-in capital | 602.4 | 0.0 | 602.4 |
| Consolidated reserves | 1,669.7 | (293.2) | 1,376.5 |
| Consolidated net income (Group share) | 193.7 | (3.8) | 189.9 |
| Other components of equity | (117.6) | (28.5) | (146.1) |
| EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY | 2,351.4 | (325.5) | 2,025.9 |
| Non-controlling interests | 60.7 | (28.4) | 32.3 |
| TOTAL EQUITY | 2,412.1 | (353.9) | 2,058.2 |
| Provisions (2) | 385.7 | (69.9) | 315.8 |
| Deferred tax liabilities | 79.3 | (26.3) | 53.0 |
| Financial debt (1) | 786.6 | (14.4) | 772.2 |
| Debt on commitments to purchase non-controlling interests | 80.1 | 0.0 | 80.1 |
| Lease liabilities | 3,664.3 | 3,664.3 | |
| Other payables | 11.8 | (0.3) | 11.5 |
| Financial derivatives | 0.5 | 0.0 | 0.5 |
| NON-CURRENT LIABILITIES | 1,344.0 | 3,553.3 | 4,897.3 |
| Provisions (2) | 71.6 | (20.3) | 51.3 |
| Financial debt (1) | 586.0 | (7.9) | 578.1 |
| Debt on commitments to purchase non-controlling interests | 21.9 | 0.0 | 21.9 |
| Financial derivatives | 4.9 | 0.0 | 4.9 |
| Lease liabilities | 865.9 | 865.9 | |
| Trade and other payables | 1,092.4 | (235.8) | 856.6 |
| Income tax payable | 39.6 | 0.0 | 39.6 |
| Bank overdrafts | 12.8 | 0.0 | 12.8 |
| CURRENT LIABILITIES | 1,829.2 | 602.0 | 2,431.2 |
| TOTAL LIABILITIES | 3,173.2 | 4,155.3 | 7,328.5 |
| TOTAL LIABILITIES AND EQUITY | 5,585.3 | 3,801.4 | 9,386.7 |
(1) Finance leases are considered as lease contracts under IFRS 16.
(2) Provisions for onerous contracts are considered as a reduction in the right-of-use under IFRS16.
Notes to the annual consolidated financial statements
| In million euros | 31/12/2018 | IFRS 16 | 31/12/2018 |
|---|---|---|---|
| Published | Impact | Restated | |
| Goodwill | 1,940.9 | (1.9) | 1,939.0 |
| Other intangible assets | 393.6 | 0.0 | 393.6 |
| Property, plant and equipment (1) | 1,293.0 | (19.1) | 1,274.0 |
| Right-of-use | 4,498.1 | 4,498.1 | |
| Investments under the equity method | 468.2 | (24.6) | 443.6 |
| Other financial assets | 90.1 | (14.7) | 75.4 |
| Deferred tax assets | 101.6 | 36.0 | 137.6 |
| Current tax assets | 1.1 | 0.0 | 1.1 |
| Other receivables | 31.2 | (12.9) | 18.3 |
| NON-CURRENT ASSETS | 4,319.7 | 4,460.9 | 8,780.6 |
| Other financial assets | 30.2 | 0.0 | 30.2 |
| Inventories | 159.4 | 0.0 | 159.4 |
| Financial derivatives | 4.9 | 0.0 | 4.9 |
| Trade and other receivables | 1,035.6 | (34.6) | 1,001.0 |
| Current tax assets | 18.4 | 0.0 | 18.4 |
| Treasury financial assets | 81.2 | 0.0 | 81.2 |
| Cash and cash equivalents | 112.3 | 0.0 | 112.3 |
| CURRENT ASSETS | 1,442.0 | (34.6) | 1,407.4 |
| TOTAL ASSETS | 5,761.7 | 4,426.3 | 10,188.0 |
| Share capital | 3.2 | 0.0 | 3.2 |
| Additional paid-in capital | 606.4 | 0.0 | 606.4 |
| Consolidated reserves | 1,734.3 | (297.0) | 1,437.2 |
| Consolidated net income (Group share) | 219.9 | (22.7) | 197.2 |
| Other components of equity | (135.1) | (31.1) | (166.2) |
| EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY | 2,428.7 | (350.8) | 2,077.9 |
| Non-controlling interests | 62.1 | (31.2) | 30.9 |
| TOTAL EQUITY | 2,490.8 | (382.0) | 2,108.8 |
| Provisions (2) | 395.9 | (63.1) | 332.8 |
| Deferred tax liabilities | 90.0 | (26.0) | 64.0 |
| Financial debt (1) | 1,075.7 | (12.8) | 1,062.9 |
| Debt on commitments to purchase non-controlling interests | 87.8 | 0.0 | 87.8 |
| Lease liabilities | 4,163.2 | 4,163.2 | |
| Other payables | 17.0 | (2.0) | 15.0 |
| Financial derivatives | 0.2 | 0.0 | 0.2 |
| NON-CURRENT LIABILITIES | 1,666.6 | 4,059.4 | 5,726.0 |
| Provisions (2) | 71.6 | (10.0) | 61.6 |
| Financial debt (1) | 296.9 | (7.3) | 289.6 |
| Debt on commitments to purchase non-controlling interests | 4.6 | 0.0 | 4.6 |
| Financial derivatives | 1.3 | 0.0 | 1.3 |
| Lease liabilities | 1,022.9 | 1,022.9 | |
| Trade and other payables | 1,162.2 | (256.8) | 905.4 |
| Income tax payable | 43.4 | 0.0 | 43.4 |
| Bank overdrafts | 24.3 | 0.0 | 24.3 |
| CURRENT LIABILITIES | 1,604.3 | 748.9 | 2,353.2 |
| TOTAL LIABILITIES | 3,270.9 | 4,808.2 | 8,079.2 |
| TOTAL LIABILITIES AND EQUITY | 5,761.7 | 4,426.3 | 10,188.0 |
(1) Finance leases are considered as lease contracts under IFRS 16.
(2) Provisions for onerous contracts are considered as a reduction in the right-of-use under IFRS16.
Notes to the annual consolidated financial statements
1.2.3.3 Impact of retrospective application of IFRS 16 on the statement of cash flows for 2018
The changes detailed above have the following impacts on the different items of the 2018 statement of cash flows, with a nil impact on net cash position:
| 2018 | IFRS16 | 2018 | |
|---|---|---|---|
| In million euros NET INCOME BEFORE TAX |
Published 309.6 |
Impact (39.3) |
Restated 270.3 |
| Share of net profit of companies under the equity method | (98.1) | (1.4) | (99.5) |
| Dividends received from companies under the equity method | 103.5 | 103.5 | |
| Expenses related to share-based payments | 1.0 | 1.0 | |
| Depreciation, amortisation and provisions (net) | 246.1 | 898.8 | 1,144.9 |
| Capital gains and losses and net income (loss) on changes in scope | (21.1) | (21.1) | |
| Gains and losses on lease contracts | - | (0.8) | (0.8) |
| Net discounting expenses | 7.3 | 7.3 | |
| Net interest expense & interest expenses on IFRS 16 lease | 10.8 | 151.8 | 162.6 |
| Financial derivatives, translation adjustments and other | 0.1 | 0.4 | 0.5 |
| Change in working capital | (84.4) | (20.0) | (104.3) |
| Change in invent ories |
(34.6) | (34.6) | |
| Change in t rade and ot her rec eivables |
(87.9) | (3.0) | (90.9) |
| Change in trade and other payables | 38.1 | (17.0) | 21.1 |
| CASH FLOW FROM OPERATING ACTIVITIES | 474.8 | 989.5 | 1,464.3 |
| Interest paid on IFRS 16 lease | - | (149.5) | (149.5) |
| Interest paid | (27.8) | 0.4 | (27.4) |
| Interest received | 6.8 | 6.8 | |
| Income tax paid | (53.1) | (53.1) | |
| NET CASH FLOW FROM OPERATING ACTIVITIES | 400.7 | 840.4 | 1,241.1 |
| Cash payments on acquisitions of intangible assets and property, plant and equipment | (309.8) | (309.8) | |
| Cash payments on acquisitions of financial assets (long-term investments) net of cash acquired | (673.3) | (673.3) | |
| Acquisitions of other financial assets | (34.1) | (34.1) | |
| Total investments | (1,017.2) | 0.0 | (1,017.2) |
| Cash receipts on proceeds on disposals of intangible assets and property, plant and equipment | 37.7 | 37.7 | |
| Cash receipts on proceeds on disposals of financial assets (long-term investments) net of cash | |||
| sold | 4.2 | 4.2 | |
| Proceeds on disposals of other financial assets | 9.3 | 9.3 | |
| Total asset disposals | 51.2 | 0.0 | 51.2 |
| NET CASH FLOW FROM INVESTING ACTIVITIES | (966.0) | 0.0 | (966.0) |
| Dividends paid | (135.7) | (135.7) | |
| Cash payments on acquisitions of non-controlling interests | (15.3) | (15.3) | |
| Capital decrease | 0.0 | 0.0 | |
| Repayment of long-term borrowings | (644.0) | (644.0) | |
| Repayment of finance lease debts | (8.7) | 8.7 | - |
| Repayment of lease liabilities | - | (849.1) | (849.1) |
| Acquisitions and disposals of treasury financial assets | 199.0 | 199.0 | |
| Cash outflow from financing activities | (604.7) | (840.4) | (1,445.1) |
| Capital increase | 4.0 | 4.0 | |
| Increase in long-term borrowings | 545.3 | 545.3 | |
| Cash inflow from financing activities | 549.3 | 0.0 | 549.3 |
| NET CASH FLOW FROM FINANCING ACTIVITIES | (55.4) | (840.4) | (895.8) |
| CHANGE IN NET CASH POSITION | (620.7) | 0.0 | (620.7) |
| Net cash position beginning of period | 715.5 | 0.0 | 715.5 |
| Effect of exchange rate fluctuations and other movements | (6.8) | (6.8) | |
| Net cash position end of period | 88.0 | 0.0 | 88.0 |
1.3 Scope and methods of consolidation
The financial statements of companies controlled by the Group are included in the consolidated financial statements from the date control is acquired to the date control ceases.
The equity method is adopted for joint ventures and for associates, companies over which the Group exercises a significant influence on operating and financial policies.
All transactions between fully consolidated Group companies are eliminated upon consolidation.
Inter-company results are also eliminated. Capital gains or losses on inter-company sales realised by a company consolidated under the equity method are eliminated up to the percentage of ownership and offset by the value of the assets sold. Capital losses realised on Inter-company sales to an equity-accounted company are under IFRS3R and capital gains realised on sales to an equity-accounted company are under SIC13.
1.4. Recognition of foreign currency transactions in the functional currency of entities
Transactions denominated in foreign currencies are translated into the functional currency at the rate prevailing on the transaction date. At the end of the period, monetary items are translated at the closing exchange rate and the resulting gains or losses are recorded in the income statement.
Long-term monetary assets held by a Group entity in a foreign subsidiary for which settlement is neither planned nor likely to occur in the foreseeable future are a part of the entity's net investment in a foreign operation. Accordingly, pursuant to IAS 21 "The Effects of Changes in Foreign Exchange Rates", exchange differences on these items are recorded in other comprehensive income until the investment's disposal or disqualification. Otherwise, exchange differences are recorded in the income statement.
1.5. Translation of subsidiaries' financial statements
The Group's consolidated financial statements are prepared using the Euro, which is the parent company's presentation and functional currency.
Assets and liabilities of foreign subsidiaries are translated into the Group's presentation currency at the year-end exchange rate, and the corresponding income statement is translated at the average exchange rate of the period. Resulting translation adjustments are directly allocated to other comprehensive income.
At the time of a total or partial disposal, with loss of control, or the liquidation of a foreign entity, or a step acquisition giving control, translation adjustments accumulated in equity are reclassified in the income statement.
1.6. Use of estimates
As part of the process of preparing the consolidated financial statements, the valuation of some assets and liabilities requires the use of judgments, assumptions and estimates. This primarily involves the valuation of goodwill, property, plant and equipment, intangible assets and right-of-use, the valuation of investments under the equity method, determining the amount of provisions for employee benefits and dismantling, and the valuation of commitments on securities. These judgments, assumptions and estimates are based on information available or situations existing at the financial statement preparation date, which in the future could differ from reality. Valuation methods are described in more detail, mainly in Note 1.11 "Impairment of intangible assets, property, plant and equipment, right-of-use and goodwill", in Note 1.12 "Investments under the equity method", in Note 1.20 "Provisions for retirement and other longterm benefits" and in Note 1.21 "Dismantling provisions". The results of sensitivity tests are provided in Note 4.4 "Goodwill, Property, plant and equipment (PP&E), right-of-use and Intangible assets impairment tests" for the valuation of goodwill, property, plant and equipment, intangible assets and right-of-use, in Note 4.5 "Investments under the equity method and impairment tests" for the valuation of investments under the equity method, in Note 4.20 "Financial assets and liabilities by category" for the valuation of the debt on commitments to purchase non-controlling interests and in Note 4.13 "Provisions" for the valuation of dismantling provisions and provisions for employee benefits.
1.7. Current/non-current distinction
With the exception of deferred tax assets and liabilities which are classified as non-current, assets and liabilities are classified as current when their recoverability or payment is expected no later than 12 months after the year-end closing date; otherwise, they are classified as non-current.
1.8. Intangible assets
1.8.1. Development costs
According to IAS 38, development costs must be capitalised as intangible assets if the Group can demonstrate:
- its intention, and financial and technical ability, to complete the development project,
- the existence of probable future economic benefits for the Group,
- the high probability of success for the Group,
- and that the cost of the asset can be measured reliably.
Development costs capitalised in the statement of financial position include all costs related to the development, modification or improvement to the array of street furniture offerings and advertising structures in connection with
Notes to the annual consolidated financial statements
contract proposals having a strong probability of success. Development costs also include the design and construction of models and prototypes.
The Group considers that it is legitimate to capitalise tender response preparation costs. Given the nature of the costs incurred (design and construction of models and prototypes), and the statistical success rate of the JCDecaux Group in its responses bids, the Group believes that these costs represent development activities that can be capitalised under the aforementioned criteria. Indeed, these costs are directly related to a given contract, and are incurred to obtain it. Amortisation, spread out over the term of the contract, begins when the project is awarded. Should the bid be lost, the amount capitalised is expensed.
Development costs carried in assets are recognised at cost less accumulated amortisation and impairment losses.
1.8.2. Other intangible assets
Other intangible assets primarily involve Street Furniture, Billboard and Transport contracts recognised in business combinations, which are amortised over the contract term. They also include upfront payments, amortised over the contract term, and software. Only individualised and clearly identified software (ERP in particular) is capitalised and amortised over a maximum period of 10 years. Other software expenses are recognised in expenses for the period.
1.9. Business combinations, acquisition of non-controlling interests and disposals
Goodwill represents the fair value of the consideration transferred (including the acquisition-date fair value of the acquirer's previously held equity interest in the company acquired), plus the amount recognised for any non-controlling interest in the acquired company, minus the net of the amounts of the identifiable assets acquired and the liabilities measured at their fair value and assumed on the acquisition date.
Goodwill is not amortised. The Group conducts impairment tests at least once a year at each statement of financial position date and at any time when there are indicators of impairment. Following these impairment tests, performed in accordance with the methodology described in Note 1.11 "Impairment of intangible assets, property, plant and equipment, right-of-use and goodwill", a goodwill impairment loss is recognised if necessary. When recognised, such a loss cannot be reversed at a later period.
Negative goodwill, if any, is immediately recognised directly in the income statement.
When determining the fair value of the assets and liabilities of the acquired entity, the Group assesses contracts at fair value and recognises them as intangible assets. When an onerous contract is identified, the Group decreases the gross amount of right-of-use attached to the contract and recognises any resulting liability.
Under IFRS, companies are granted a 12-month period, starting from the date of acquisition, to finalise the fair value measurement of assets and liabilities acquired.
Acquisition-related costs are recognised by the Group in other operating expenses, except for acquisition-related costs for non-controlling interests, which are recorded in equity.
For staged acquisitions, any gain or loss arising from the fair value revaluation of the previously held equity interest is recorded in the income statement, under other operating income and expenses, at the time control is acquired. The fair value of this revaluation is estimated on the basis of the purchase price less the control premium.
For every partial or complete disposal with loss of control, any gain or loss on the disposal as well as the remeasurement of retained interest are recorded in the income statement, under other operating income and expenses.
Furthermore, for acquisitions of non-controlling interests in controlled companies and the sale of interests without loss of control, the difference between the acquisition price or sale price and the carrying value of non-controlling interests is recognised in changes in equity attributable to the shareholders of the parent company. The corresponding cash inflows and outflows are presented under the line item "Net cash flows from financing activities" of the statement of cash flows.
1.10. Property, plant and equipment (PP&E)
Property, plant and equipment (PP&E) are presented in the statement of financial position at historical cost less accumulated depreciation and impairment losses.
Street furniture
Street furniture (Bus shelters, MUPIs®, Seniors, Electronic Information Boards (EIB), Automatic Public Toilets, Morris Columns, etc.) and advertising structures in the transport activity is depreciated on a straight-line basis over the term of the contracts between 8 and 20 years. The digital screens are depreciated over a 5 to 10 year period; their economic lifetime can be shorter than the term of the contracts. Street furniture maintenance costs are recognised as expenses. The expected discounted dismantling costs at the end of the contract are recorded in assets, with the corresponding provision, and amortised over the term of the contracts.
Billboards
Notes to the annual consolidated financial statements
Billboards are depreciated according to the method of depreciation prevailing in the relevant countries in accordance with local regulations and economic conditions.
The main method of depreciation is the straight-line method over a period of 2 to 20 years.
Depreciation charges are calculated over the following normal useful lives:
Depreciation periods
Property, plant and equipment:
| ▪ | Buildings and constructions | 10 to 50 years | |
|---|---|---|---|
| ▪ | Technical installations, tools and equipment (Excluding street furniture and billboards) |
5 to 10 years | |
| ▪ Street furniture and billboards |
2 to 20 years | ||
| Other property, plant and equipment: | |||
| ▪ | Fixtures and fittings | 5 to 16 years | |
| ▪ | Transport equipment | 3 to 15 years | |
| ▪ | Computer equipment | 3 to 5 years | |
| ▪ | Furniture | 5 to 10 years |
1.11. Impairment of intangible assets, property, plant and equipment, right-of-use and goodwill
Items of property, plant and equipment, intangible assets and right-of-use as well as goodwill are tested for impairment at least once a year.
Impairment testing consists in comparing the carrying value of a Cash-Generating Unit (CGU) or a CGU group with its recoverable amount. The recoverable amount is the highest of (i) the fair value of the asset (or group of assets) less costs of disposal and (ii) the value in use determined based on future discounted cash flows.
The carrying amount includes the right-of-use net of the book value of the lease liabilities, and the value in use is determined based on cash flows in line with the adjusted operating indicators.
When the recoverable amount is assessed on the basis of the value in use, cash flow forecasts are determined using growth assumptions based either on the term of the contracts, or over a five-year period with a subsequent perpetual projection and a discount rate reflecting current market estimates of the time value of money. The growth assumptions used do not take into account any external acquisitions. Risks specific to the CGU tested are largely reflected in the assumptions adopted for determining the cash flows and the discount rate used.
When the carrying value of an asset (or group of assets) exceeds its recoverable amount, an impairment loss is recognised in the income statement to write down the asset's carrying value to the recoverable amount.
Adopted methodology
- Level of testing
- For PP&E, intangible assets and right-of-use, impairment tests are carried out at the CGU-level corresponding to the operational entity,
- For goodwill, tests are carried out at the level of each group of CGUs whose scope is determined by taking into account the expected level of synergies between the CGUs. Thus, tests are generally performed at the level where the operating segments and the geographical area meet, except for the Airports activity where synergies are appreciated worldwide and the Pacific zone where synergies are justified in all operational sectors.
- Discount rates used
The values in use taken into account for impairment testing are determined based on expected future cash flows, discounted at a rate based on the weighted average cost of capital. This rate reflects management's best estimates regarding the time value of money, the risks specific to the assets or CGUs and the economic situation in the geographical areas where the business relating to these assets or CGUs is carried out.
The countries are broken down into five areas based on the risk associated with each country, and each area corresponds to a specific discount rate.
▪ Recoverable amounts
They are determined based on budgeted values for the first year following the closing of the accounts and growth and change assumptions specific to each market and which reflect the expected future outlook. The recoverable values are based on business plans for which the procedures for determining future cash flows differ for the various business segments, with a time horizon usually exceeding five years owing to the nature and business activity of the Group, which is characterised by long-term contracts with a strong probability of renewal. In general:
- for the Street Furniture and Transport segments, future cash flows are calculated over the remaining term of contracts, taking into account the likelihood of renewal after term, the business plans being realised over the duration of the contract, generally between 5 and 20 years, with a maximum term of 25 years,
- for the Billboard segment, future cash flows are calculated over a 5-year period with a perpetual projection using a 2% yearly growth rate for European countries, whose markets seem mature to us, and a 3% rate for other countries, where large format billboard activity seems to be experiencing more favourable market conditions.
The recoverable amount of a group of CGUs corresponds to the sum of the individual recoverable amounts of each CGU belonging to that group.
1.12. Investments under the equity method
Goodwill recognised on acquisition is included in the value of the investments under the equity method.
The share of amortisation of the assets recognised at the time of acquisition or the fair value adjustment of existing assets is presented under the heading "Share of net profit of companies under the equity method".
If the Group's share of losses of an equity-accounted entity equals or exceeds its interest in that entity, its share is reduced to zero. If the Group considers itself as involved in losses, a provision is recognised under provisions for contingencies for the share of losses exceeding the initial investment as well as loans and receivables.
Investments under the equity method are subject to impairment tests on an annual basis, or when existing conditions suggest a possible impairment. When necessary, the related loss, which is recorded in "Share of net profit of companies under the equity method," is calculated on the asset's recoverable value which is defined as the higher of (i) the fair value of the asset less costs of disposal and (ii) its value in use based on the expected future cash flows less net debt. For listed companies, the fair value used as part of impairment tests corresponds to the stock price. The method used to calculate the values in use is the same one applied for PP&E, intangible assets and right-of-use as described in Note 1.11 "Impairment of intangible assets, property, plant and equipment, right-of-use and goodwill".
1.13. Other financial assets
This heading mainly includes investments in non-consolidated entities (financial investments), loans and loans to participating interests granted to companies under the equity method or non-consolidated entities, deposits and guarantees and advances paid on acquisition of long-term investments under conditions precedent.
They are recorded and measured:
- For the investments in non-consolidated entities, initially at their fair value, related to their acquisition price. In the absence of a listed price on an active market, they are then measured at the fair value that is close to the utility value, which takes into account the share of equity and the probable recovery amount. Changes in value are recognised for each of these assets and definitively either in net income or in other comprehensive income with no option to reclassify in net income in the event of their disposal. Only the dividends received from these assets are recorded in the income statement under the line "Other net financial expenses".
- For the other financial assets, at amortised cost (IFRS9 category). An impairment loss is recognised in the income statement when the recovery amount of these loans and receivables is less than their carrying amount.
1.14. Inventories
Inventories mainly consist of:
- parts required for the maintenance of installed street furniture, and
- street furniture and billboards in kit form.
Inventories are valued at weighted average cost, and may include production, assembly and logistic costs.
Inventories are written down to their net realisable value when the net realisable value is lower than cost.
1.15 Trade and other receivables
Trade receivables are recorded at fair value, which corresponds to their nominal invoice value, unless there is a significant discounting effect. After initial recognition, they are measured at amortised cost.
Notes to the annual consolidated financial statements
A provision for depreciation is recognised when their recovery amount is less than their carrying amount. The Group recognises an additional provision on the performing receivables by applying an average rate of default of payment based from historical statistical data. This forward-looking model based on expected losses applies to receivables at their initial recognition.
1.16. Managed Cash
Managed cash includes cash, cash equivalents and treasury financial assets. These items are measured at fair value and changes in fair value are recognised in net financial income.
Cash recognised as assets in the statement of financial position includes cash at bank and cash in hand. Cash equivalents consist of short-term investments and short-term deposits. Short-term investments and short-term deposits are easily convertible into a known cash amount and are subject to low risk of change in value, in accordance with IAS 7.
Treasury financial assets are short-term liquid investments and cash owned by the Group but held in escrow accounts in connection with the execution of contracts. These assets have the main characteristics of cash equivalents but do not strictly comply with all the criteria to be qualified as such, according to IAS 7. They are included in the calculation of the Group's net debt.
For the consolidated statement of cash flows, net cash consists of cash and cash equivalents as defined above, net of bank overdrafts.
1.17. Financial debts
Financial debts are initially recorded at the fair value generally corresponding to the amount received less related issuance costs and are subsequently measured at amortised cost.
1.18. Financial derivatives
A financial derivative is a financial instrument having the following three characteristics:
- an underlying item that changes the value of the financial derivative,
- little or no initial net investment, and
- settlement at a future date.
Financial derivatives are recognised in the statement of financial position at fair value in assets or liabilities. Changes in subsequent values are offset in the income statement, unless they have been qualified as part of an effective cash flow hedge (effective portion) or as a foreign net investment.
Hedge accounting may be adopted if a hedging relationship between the hedged item (the underlying) and the financial derivative is established and documented from the time the hedge is set up, and its effectiveness is demonstrated from inception and at each period-end. The Group currently limits itself mainly to two types of hedges for financial assets and liabilities:
- Fair Value Hedge, whose purpose is to limit the impact of changes in the fair value of assets, liabilities or firm commitments at inception, due to changes in market conditions. The change in the fair value of the hedging instrument is recorded in the income statement. However, this impact is cancelled out by symmetrical changes in the fair value of the hedged risk (to the extent of hedge effectiveness),
- Cash Flow Hedge, whose purpose is to limit changes in cash flows attributable to existing assets and liabilities or highly probable forecasted transactions. The effective portion of the change in fair value of the hedging instrument is recorded directly in other comprehensive income, and the ineffective portion is maintained in the income statement. The amount recorded in other comprehensive income is reclassified to profit or loss when the hedged item itself has an impact on profit or loss. The initial value recorded on the balance sheet in assets or liabilities is recognised by applying the "basis adjustment".
The hedging relationship involves a single market parameter, which for the Group is currently either a foreign exchange rate or an interest rate. When a derivative is used to hedge both a foreign exchange and interest rate risk, the foreign exchange and interest rate impacts are treated separately.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss on a cash flow hedge as part of the hedging of a highly probable forecasted transaction recognised in other comprehensive income is maintained in equity until the forecasted transaction occurs. If the hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in other comprehensive income is transferred to net financial income for the year.
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are recorded directly in net financial income for the year.
The accounting classification of financial derivatives instruments in current or non-current items is determined by the maturity of the derivative.
1.19. Commitments to purchase non-controlling interests
In the absence of any position from the IASB on the accounting treatment of commitments to purchase non-controlling interests, the accounting positions taken in the previous consolidated financial statements have been maintained for all Group commitments.
The application of IAS 32 results in the recognition of a liability relating to commitments to purchase shares held by noncontrolling interests in the Group's subsidiaries, not only for the portion already recognised in non-controlling interests (reclassified in liabilities), but also for the excess resulting from the present value of the commitment. The amount of this excess portion is deducted from non-controlling interests in the equity of the statement of financial position.
In the absence of any position from the IASB on the accounting treatment of commitments to purchase non-controlling interests, subsequent changes in the fair value of the liability are recognised in net financial income and allocated to noncontrolling interests in the income statement, with no impact on consolidated net income (Group share).
Commitments recorded in this respect are presented under the statement of financial position heading "Debt on commitments to purchase non-controlling interests".
1.20. Provisions for retirement and other long-term benefits
The Group's obligations resulting from defined benefit plans, as well as their cost, are determined using the projected unit credit method.
This method consists of measuring the obligation based on the projected end-of-career salary and the rights vested at the valuation date, determined in accordance with collective trade union agreements, company agreements or the legal rights in effect.
The actuarial assumptions used to determine the obligations vary according to the economic conditions prevailing in the country of origin and the demographic assumptions specific to each company.
These plans are either funded, with their assets being managed by an entity legally separate and independent from the Group, or partially funded or not funded, with the Group's obligations being covered by a provision in the statement of financial position. The income from the plan's assets is estimated based on the discount rate used for the benefit obligation.
For the post-employment benefit plans, the actuarial gains and losses are immediately and entirely recognised in other comprehensive income with no option to reclassify in the income statement. Past service costs are immediately and fully recorded in the income statement on acquired rights as well as on future entitlements.
For other long-term benefits, actuarial gains or losses and past service costs are recognised as income or expenses when they occur.
The effects of discounting the provision for employee benefits are presented in net financial income (loss).
1.21. Dismantling provisions
Costs for dismantling street furniture at the end of a contract are recorded in provisions, when a contractual dismantling obligation exists at a foreseeable date. These provisions represent the entire estimated dismantling cost from the contract's inception and are discounted. Dismantling costs are offset under assets in the statement of financial position and amortised over the term of the contract. The discounting charge is recorded as a financial expense. The discount rate applied is the swap rate in the country concerned for the average weighted life of the assets of the contracts.
1.22. Share-based payments
1.22.1. Share purchase or subscription plans at an agreed unit price
In accordance with IFRS 2 "Share-based payment", stock options granted to employees are considered to be part of compensation in exchange for services rendered over the period extending from the grant date to the vesting date.
The fair value of services rendered is determined by reference to the fair value of the financial instruments granted.
The fair value of options is determined at their grant date by an independent actuary, and any subsequent changes in the fair value are not taken into account. The Black & Scholes valuation model used is based on the assumptions described in Note 5.2 "Net operating expenses" hereafter.
Notes to the annual consolidated financial statements
The cost of services rendered is recognised in the income statement and offset under an equity heading on a basis that reflects the vesting pattern of the options. This entry is recorded at the end of each accounting period until the date at which all vesting rights of the plan in question have been fully granted.
The amount stated in equity reflects the extent to which the vesting period has expired and the number of options granted that, based on management's best available estimate, will ultimately vest.
Stock option plans are granted based on individual objectives and Group results. The exercise of stock options is subject to years of continuous presence in the company.
1.22.2. Cash-settled share subscription and purchase plans
The share subscription and purchase plans which will be settled in cash are assessed at their fair value, recorded in the income statement and offset with a liability. This liability is measured at each closing date up to its settlement.
1.23. Revenue
The Group's revenue mainly comes from sales of advertising space on street furniture equipment, billboards and advertising in transport systems.
Advertising space revenue, rentals and provided services are recorded as revenue on a straight-line basis over the period over which the service is performed, which has a duration ranging from 1 week to 6 years.
The trigger event for advertising space revenue recognition is the execution of the advertising campaign.
Advertising space revenue is recorded on a net basis after deduction of commercial rebates. In some countries, commissions are paid by the Group to advertising agencies and media brokers when they act as intermediaries between the Group and advertisers. These commissions are then deducted from revenue.
In agreements where the Group pays variable fees or revenue sharing, and to the extent that the Group acts as the principal in its advertising space sales activity, the Group recognises all gross advertising revenue as revenue and books fees and the portion of revenue repaid as operating expenses.
Discounts granted to customers for early payment are deducted from revenue.
In addition to marketing advertising space on furniture, the Group also sells, rents and maintains street furniture, the revenue from which is recognised in the Street Furniture business. The Group also earns non-advertising revenues from its Self-Service Bicycle business as well as the implementation of innovative technical solutions, under the "JCDecaux Innovate" name, and services ancillary to its analogue and digital revenues.
1.24. Operating margin
The operating margin is defined as revenue less direct operating and selling, general and administrative expenses.
It includes charges to provisions net of reversals relating to trade receivables.
The operating margin is impacted by cash discounts granted to customers deducted from revenue, and cash discounts received from suppliers deducted from direct operating expenses. It also includes stock option or bonus share expenses recognised in the line item "Selling, general and administrative expenses".
1.25. EBIT
EBIT is determined on the basis of the operating margin less consumption of spare parts used for maintenance, depreciation, amortisation and provisions (net), goodwill impairment losses, and other operating income and expenses. Inventory impairment losses are recognised in the line item "Maintenance spare parts".
Other operating income and expenses include the gains and losses generated by the disposal of property, plant and equipment, intangible assets, joint ventures and associates, the gains and losses on lease contracts, the gains and losses generated by the loss of control of companies, any resulting gain or loss resulting from the fair value revaluation of a retained interest, any resulting gain or loss resulting from the fair value revaluation of a previously held equity interest at the time control is acquired with staged acquisitions, potential price adjustments resulting from events subsequent to the acquisition date, as well as any negative goodwill, acquisition-related costs, and non-recurring items.
Net charges related to the results of impairment tests performed on property, plant and equipment, intangible assets and right-of-use are included in the line item "Depreciation, amortisation and provisions (net)".
1.26. Current and deferred income tax
Deferred taxes are recognised based on timing differences between the accounting value and the tax base of assets and liabilities. They mainly stem from consolidation restatements (standardisation of Group accounting principles and
Notes to the annual consolidated financial statements
amortisation/depreciation periods for property, plant and equipment and intangible assets, leases, recognition of contracts as part of the purchase method, etc.). Deferred tax assets and liabilities are measured at the tax rate expected to apply for the period in which the asset is realised or the liability is settled, based on the tax regulations that were adopted at the year-end closing date. They may be written down if a subsidiary has a net deferred tax asset whose shortterm recovery is uncertain.
Deferred tax assets on tax losses carried forward are recognised only when it is probable that the Group will have future taxable profits against which these tax losses may be offset. Forecasts are prepared on the basis of a 3 to 5 year time frame adapted to the specific characteristics of each country.
In accordance with IFRS, the Group determined that the CVAE (French tax known as the Cotisation sur la Valeur Ajoutée des Entreprises) is an income tax expense. This qualification as an income tax gives rise to the recognition of a deferred tax liability calculated based on the depreciable assets of the companies subject to the CVAE. Moreover, as the CVAE can be deducted from the corporate tax, its recognition generates a deferred tax asset.
2. CHANGES IN THE CONSOLIDATION SCOPE
2.1. Major changes in the consolidation scope
The main changes in the consolidation scope during 2019 are as follows:
Acquisitions (with acquisition of control)
On 9 July 2019, the Group completed the acquisition of Belgium group Publiroute. The new companies acquired, as well as the company JCDecaux Belgium Billboard which has been contributed, are 87% fully consolidated.
Acquisitions of non-controlling interests
On 7 March 2019, JCDecaux Central America Holding SA acquired 3.41% of the non-controlling interests in the company JCDecaux Top Media SA in Panama. This company, which was already fully consolidated, is now 76.16% owned.
Disposals of interests without loss of control
On 20 March 2019, Equipamientos Urbanos de Mexico, SA de C.V. (Eumex) sold 3.70% of the shares of JCDecaux Out of Home SA de CV (Mexico). The company remained fully consolidated and is now 60.0% owned.
Other variances
The other variances, mainly liquidations, sales and acquisitions of long-term investments are detailed in Note 12 "Scope of consolidation".
As a reminder, the main change in scope in 2018 was the acquisition of the group APN Outdoor which was fully consolidated as from 1 November 2018. The impacts of this acquisition are shown in the 2018 consolidated financial statements. Purchase price allocation works were finalised during 2019 and are shown in the note 2.2 below.
2.2. Impact of acquisitions
The main acquisitions made in 2019 notably including the group Publiroute in Belgium, and the purchase price allocation of APN Outdoor group, acquired end of October 2018, within the 12-month period following the acquisition, had the following impacts on the Group's consolidated financial statements:
| Fair value at the date | ||
|---|---|---|
| In million euros | of acquisition | |
| Non-current assets | 261.2 | |
| Current assets | 12.0 | |
| Total assets | 273.2 | |
| Non-current liabilities | 81.3 | |
| Current liabilities | 3.9 | |
| Total liabilities | 85.2 | |
| Fair value of net assets at 100% | (a) | 188.0 |
| - of which non-controlling interests | (b) | |
| Total consideration transferred | (c) | 22.6 |
| - of which purchase price | 22.6 | |
| Goodwill | (d)=(c)-(a)+(b) | (165.4) |
| - including Goodwill allocated to companies under the equity method | (e) | - |
| Goodwill IFRS (1) | (f)=(d)-(e) | (165.4) |
| Purchase price | (22.6) | |
| Net cash acquired | 7.9 | |
| Acquisitions of long-term investments over the period | (14.7) |
(1) The option of the full goodwill calculation method was not used for any of the 2019 acquisitions.
The value of assets and liabilities acquired and goodwill relating to these acquisitions is determined on a temporary basis and is likely to change during the period required to finalise the allocation of the goodwill, which can be extended to a maximum of 12 months following the acquisition date, with the exception of the purchase price allocation of APN Outdoor group which is final.
The impact of these 2019 acquisitions on revenue and net income (Group share) is respectively €4.0 million and €0.3 million. Had the acquisitions taken place as of 1 January 2019, the additional impact would have been an increase of €4.3 million in revenue and an increase of €0.3 million in net income (Group share).
3. SEGMENT REPORTING
To measure the Group's operational performance and to inform managers about their decision-making in line with historical data, segment information is adjusted by:
- IFRS 11 impact: in the segment reporting, the data related to joint ventures, companies under joint control, is proportionately consolidated as shown in the Group's operating management reporting used by the Executive Board – the Chief Operating Decision Maker (CODM),
- IFRS 16 impact on location lease contracts for advertising structures ("Core Business" contracts) excluding real estate and vehicle rental contracts.
Consequently, pursuant to IFRS 8, operating data presented hereafter, in line with internal communication, is "adjusted". The "adjusted" data is reconciled with the IFRS financial statements for which the IFRS 11 leads to consolidation of the joint ventures under the equity method and where "core business" rents are accounted for in accordance with IFRS 16.
3.1. Information related to operating segments
Definition of operating segments
Street Furniture
The Street Furniture operating segment covers, in general, the advertising agreements relating to public property entered into with cities and local authorities. It also includes advertising in shopping malls, as well as the renting of street furniture, the sale and rental of equipment, cleaning and maintenance and other various services.
Transport
The Transport operating segment covers advertising in public transport systems, such as airports, subways, buses, tramways and trains.
Billboard
The Billboard operating segment covers, in general, advertising on private property, including either traditional large format or back-light billboards, neon-light billboards and advertising wraps.
Transactions between operating segments
Transfer prices between operating segments are equal to prices determined on an arm's length basis, as in transactions with third parties.
The breakdown of the 2019 segment reporting by operating segment is as follows:
| Street | Transport | Billboard | Total | |
|---|---|---|---|---|
| In million euros | Furniture | |||
| Revenue (1) | 1,688.2 | 1,636.4 | 565.6 | 3,890.2 |
| Operating margin | 452.3 | 265.9 | 74.1 | 792.2 |
| EBIT (2) | 219.3 | 166.8 | (1.1) | 384.9 |
| Acquisitions of intangible assets and PP&E net of disposals (3) | 297.9 | 45.7 | 31.8 | 375.4 |
(1) Including advertising revenue for €3,498.3 million and non-advertising revenue for €391.9 million.
(2) Including a net impairment charge related to impairment tests for €(0.3) million: €7.0 million in Street Furniture, €(1.0) million in Transport and €(6.4) million in Billboard.
(3) Cash payments on acquisitions of intangible assets and property, plant and equipment net of cash receipts on proceeds on disposals of intangible assets and property, plant and equipment.
The reconciliation of this operating data from Adjusted to IFRS breaks down as follows:
| Adjusted data (1) | Joint ventures' | IFRS 16 impact (3) | IFRS data | |
|---|---|---|---|---|
| In million euros | impact (2) | |||
| Revenue | 3,890.2 | (402.5) | 3,487.6 | |
| Operating margin | 792.2 | (123.8) | 1,045.8 | 1,714.2 |
| EBIT | 384.9 | (109.4) | 185.0 | 460.6 |
| Acquisitions of intangible assets and PP&E net of disposals | 375.4 | (15.1) | 360.3 |
(1) Including impact of IFRS 16 on non-core business contracts (of which +€49.9 million for the cancellation of rents and €(44.5) million for right-of-use amortisation).
(2) Impact of change from proportionate consolidation to the equity method of joint ventures.
(3) Impact of IFRS 16 on core business rents of controlled companies.
The impact of €(402.5) million resulting from IFRS 11 (change from proportionate consolidation to the equity method of joint ventures) on the adjusted revenue is split between €(416.3) million of revenue from the joint ventures – See Note 10
Notes to the annual consolidated financial statements
"Information on the joint ventures" – and +€13.8 million for the non-eliminated part of intercompany revenue from Group fully consolidated companies with joint ventures, under IFRS 11, bringing the IFRS revenue to €3,487.6 million.
The impact of €1,045.8 million resulting from IFRS 16 on the operating margin corresponds to the cancellation of core business rent and fees of controlled companies. The impact of €185.0 million resulting from IFRS 16 on the EBIT breaks down into €1,045.8 million of cancellation of rent and fees on the operating margin, €(924.7) million of the right-of-use amortisation, €63.1 million of net gain on changes in contracts, €(17.4) million of cancellation of reversals of provisions for onerous contracts and €18.3 million of the right-of-use amortisation resulting from the requalification of provisions for onerous contracts.
The breakdown of the 2018 segment reporting by operating segment is as follows:
| Street | Transport | Billboard | Total | |
|---|---|---|---|---|
| In million euros | Furniture | |||
| Revenue (1) | 1,587.6 | 1,517.0 | 513.9 | 3,618.5 |
| Operating margin | 413.7 | 218.4 | 68.0 | 700.1 |
| EBIT (2) | 197.2 | 141.5 | 13.9 | 352.6 |
| Acquisitions of intangible assets and PP&E net of disposals (3) | 230.7 | 43.0 | 12.7 | 286.4 |
(1) Including advertising revenue for €3,261.3 million and non-advertising revenue for €357.2 million.
(2) Including a net reversal related to impairment tests for €7.6 million: €(1.2) million in Street Furniture, €(0.2) million in Transport and €9.0 million in Billboard.
(3) Cash payments on acquisitions of intangible assets and property, plant and equipment net of cash receipts on proceeds on disposals of intangible assets and property, plant and equipment.
The reconciliation of this operating data from Adjusted to IFRS breaks down as follows:
| In million euros | Adjusted data published |
IFRS16 impact (1) |
Adjusted data restated (2) |
Joint ventures' impact (3) |
IFRS16 impact (4) |
IFRS data restated |
|---|---|---|---|---|---|---|
| Revenue | 3,618.5 | 3,618.5 | (437.1) | 3,181.4 | ||
| Operating margin | 655.1 | 45.0 | 700.1 | (133.8) | 967.1 | 1,533.4 |
| EBIT | 347.4 | 5.2 | 352.6 | (109.3) | 106.4 | 349.8 |
| Acquisitions of intangible assets and PP&E net of disposals | 286.4 | 286.4 | (14.3) | 272.1 |
(1) IFRS 16 impact on non-core business rents.
(2) Including the IFRS 16 impact on non-core business leases (including €45.0 million for the cancellation of rents and €(39.8) million for right-of-use amortisation).
(3) Impact of change from proportionate consolidation to the equity method for joint ventures.
(4) IFRS 16 impact on core business rents of controlled entities
The impact of €(437.1) million resulting from IFRS 11 (change from proportionate consolidation to the equity method of joint ventures) on the adjusted revenue is split between €(449.7) million of revenue from the joint ventures – See Note 10 "Information on the joint ventures" – and +€12.6 million for the non-eliminated part of intercompany revenue from Group fully consolidated companies with joint ventures, under IFRS 11, bringing the IFRS revenue to €3,181.4 million.
The impact of €967.1 million resulting from IFRS 16 on the operating margin corresponds to the cancellation of core business rent and fees of controlled companies. The impact of €106.4 million resulting from IFRS 16 on the EBIT breaks down into €967.1 million of cancellation of rent and fees on the operating margin, €(864.2) million of the right-of-use amortisation, €0.8 million of net gain on changes in contracts, €(19.4) million cancellation of reversals of provisions for onerous contracts and €22.2 million of the right-of-use amortisation resulting from the requalification of provisions for onerous contracts.
3.2. Information by geographical area
The 2019 information by geographical area breaks down as follows:
| Asia | Europe (2) | France | Rest of the | United | North | Total | |
|---|---|---|---|---|---|---|---|
| In million euros | Pacific (1) | world | Kingdom | America (3) | |||
| Revenue | 1,105.0 | 997.9 | 618.8 | 450.2 | 382.1 | 336.1 | 3,890.2 |
(1) Mainly China and Australia.
(2) Excluding France and the United Kingdom. Mainly Germany, Austria and Spain.
(3) Mainly United States.
The 2018 information by geographical area breaks down as follows:
| Asia | Europe (2) | France | Rest of the | United | North | Total | |
|---|---|---|---|---|---|---|---|
| In million euros | Pacific (1) | world | Kingdom | America (3) | |||
| Revenue | 957.3 | 960.7 | 602.6 | 438.0 | 369.0 | 290.9 | 3,618.5 |
(1) Mainly China and Australia.
(2) Excluding France and the United Kingdom. Mainly Germany, Austria and Spain.
(3) Mainly United States.
No single customer reaches the 10% of Group revenue threshold.
3.3. Other information
3.3.1. Non-current segment assets
The non-current segment assets by geographical area for the year 2019 (based on IFRS data) breaks down as follows:
| Asia Pacific |
Europe (1) | France | Rest of the world |
United Kingdom |
North America |
Eliminations Intercos |
Total | |
|---|---|---|---|---|---|---|---|---|
| In million euros | ||||||||
| Non-current segment assets(2) | 2,220.6 | 2,925.2 | 1,577.6 | 1,134.3 | 933.4 | 761.6 | (1,385.1) | 8,167.6 |
| Unallocated segment assets(3) | 123.8 |
(1) Excluding France and the United Kingdom. (2) Excluding deferred tax assets and financial derivatives.
(3) Goodwill relating to Airports World that is not allocated by geographical area, as global coverage is a key success factor for this business activity
from a commercial standpoint and in connection with the awarding and renewal of contracts. This also applies to impairment tests.
The non-current segment assets by geographical area for the year 2018 restated (based on IFRS data) breaks down as follows:
| Asia Pacific |
Europe (1) | France | Rest of the |
United Kingdom |
North America |
Eliminations Intercos |
Total | |
|---|---|---|---|---|---|---|---|---|
| In million euros | world | |||||||
| Non-current segment assets(2) | 2,565.9 | 2,933.7 | 1,564.1 | 1,169.2 | 866.1 | 842.8 | (1,422.3) | 8,519.5 |
| Unallocated segment assets(3) | 123.6 |
(1) Excluding France and the United Kingdom.
(2) Excluding deferred tax assets and financial derivatives.
(3) Goodwill relating to Airports World that is not allocated by geographical area, as global coverage is a key success factor for this business activity from a commercial standpoint and in connection with the awarding and renewal of contracts. This also applies to impairment tests.
3.3.2. Free cash flow
The reconciliation of the free cash flow from Adjusted to IFRS for the year 2019 is as follows:
| In million euros | Adjusted data published |
Joint ventures' impact (1) |
IFRS16 impact (2) |
IFRS data |
|---|---|---|---|---|
| Net cash provided by operating activities | 545.1 | 4.8 | 949.5 | 1,499.4 |
| - Including Change in working capital | (5.8) | 9.7 | 2.2 | 6.2 |
| Acquisitions of intangible assets and PP&E net of disposals (3) | (375.4) | 15.1 | 0.0 | (360.3) |
| Free Cash Flow | 169.7 | 19.9 | 949.5 | 1,139.1 |
(1) Impact of change from proportionate consolidation to the equity method of joint ventures.
(2) IFRS 16 impact on core and non-core business rents of controlled companies.
(3) Cash payments on acquisitions of intangible assets and property, plant and equipment net of cash receipts on proceeds on disposals of intangible assets and property, plant and equipment.
The reconciliation of the free cash flow from Adjusted to IFRS for the year 2018 is as follows:
| In million euros | Adjusted data published |
IFRS16 impact (1) |
Adjusted data restated |
Joint ventures' impact (2) |
IFRS16 impact (3) |
IFRS data restated |
|---|---|---|---|---|---|---|
| Net cash provided by operating activities | 436.8 | (8.7) | 428.1 | (36.1) | 849.1 | 1,241.1 |
| - Including Change in working capital | (75.3) | (75.3) | (9.1) | (19.9) | (104.3) | |
| Acquisitions of intangible assets and PP&E net of disposals (4) |
(286.4) | (286.4) | 14.3 | (272.1) | ||
| Free Cash Flow | 150.4 | (8.7) | 141.7 | (21.8) | 849.1 | 969.0 |
(1) Payment of liabilities related to existing contracts at the transition date qualified as finance leases under IAS 17.
(2) Impact of change from proportionate consolidation to the equity method of joint ventures.
(3) IFRS 16 impact on core and non-core business rents of controlled companies.
(4) Cash payments on acquisitions of intangible assets and property, plant and equipment net of cash receipts on proceeds on disposals of intangible assets and property, plant and equipment.
4. COMMENTS ON THE STATEMENT OF FINANCIAL POSITION
4.1. Goodwill and other intangible assets
4.1.1. Goodwill
2019 and 2018 changes in net carrying amount:
| 2018 | ||
|---|---|---|
| In million euros | 2019 | Restated |
| Net value as of 1 January Restated | 1,939.0 | 1,341.3 |
| Impairment loss | (10.0) | (1.4) |
| Decreases | (0.1) | (0.1) |
| Changes in scope | (163.6) | 611.5 |
| Translation adjustments | 13.6 | (12.3) |
| Net value as of 31 December | 1,779.0 | 1,939.0 |
4.1.2. Other intangible assets
2019 changes in gross value and net carrying amount:
Notes to the annual consolidated financial statements
| Patents, licences, | Leasehold | ||||
|---|---|---|---|---|---|
| Development | advertising contracts, | rights, payments on | |||
| In million euros | costs | ERP (1) | account, other | Total | |
| Gross value as of 1 January 2019 | 81.1 | 836.9 | 29.0 | 947.0 | |
| Acquisitions/Increases | 15.0 | 16.7 | 18.4 | 50.1 | |
| Decreases | (0.3) | (9.9) | (0.2) | (10.5) | |
| Changes in scope | 0.0 | ||||
| Translation adjustments | (0.2) | 13.7 | 0.5 | 14.0 | |
| Reclassifications (2) | (0.1) | 35.5 | 8.4 | 43.8 | |
| Goodwill allocation | 245.9 | 245.9 | |||
| Gross value as of 31 December 2019 | 95.5 | 1,138.8 | 56.1 | 1,290.4 | |
| Amortisation / Impairment as of 1 January 2019 | (46.9) | (490.1) | (16.4) | (553.4) | |
| Amortisation charge | (7.9) | (85.8) | (0.8) | (94.5) | |
| Impairment loss | (0.3) | (0.3) | |||
| Decreases | 0.3 | 9.9 | 0.2 | 10.5 | |
| Changes in scope | 0.0 | ||||
| Translation adjustments | 0.1 | (6.9) | (0.4) | (7.2) | |
| Reclassifications (2) | 0.0 | (16.1) | (16.8) | (32.9) | |
| Goodwill allocation | 0.0 | ||||
| Amortisation / Impairment as of 31 December 2019 | (54.4) | (589.3) | (34.2) | (677.9) | |
| Net value as of 1 January 2019 | 34.2 | 346.8 | 12.6 | 393.6 | |
| Net value as of 31 December 2019 | 41.1 | 549.5 | 21.9 | 612.5 |
(1) Includes the valuation of contracts recognised in connection with business combinations.
(2) The net impact of reclassifications is not nil, as some reclassifications have an impact on other items in the statement of financial position.
2018 changes in gross value and net carrying amount:
| Patents, licences, | Leasehold | |||
|---|---|---|---|---|
| Development | advertising contracts, | rights, payments on | ||
| In million euros | costs | ERP (1) | account, other | Total |
| Gross value as of 1 January 2018 | 68.4 | 709.2 | 29.0 | 806.6 |
| Acquisitions/Increases | 13.1 | 14.3 | 13.5 | 40.9 |
| Decreases | (0.1) | (2.5) | (0.5) | (3.1) |
| Changes in scope (2) | 90.2 | 0.1 | 90.3 | |
| Translation adjustments | (0.3) | (1.7) | (0.1) | (2.1) |
| Reclassifications (3) | 13.1 | (13.0) | 0.1 | |
| Goodw ill allocation |
14.3 | 14.3 | ||
| Gross value as of 31 December 2018 | 81.1 | 836.9 | 29.0 | 947.0 |
| Amortisation / Impairment as of 1 January 2018 | (40.6) | (447.8) | (16.3) | (504.7) |
| Amortisation charge | (6.5) | (52.8) | (0.2) | (59.5) |
| Impairment loss | 9.7 | 9.7 | ||
| Decreases | 0.1 | 2.4 | 0.1 | 2.6 |
| Changes in scope (2) | 0.0 | |||
| Translation adjustments | 0.1 | (0.8) | (0.2) | (0.9) |
| Reclassifications (3) | (0.8) | 0.2 | (0.6) | |
| Goodw ill allocation |
0.0 | |||
| Amortisation / Impairment as of 31 December 2018 | (46.9) | (490.1) | (16.4) | (553.4) |
| Net value as of 1 January 2018 | 27.8 | 261.4 | 12.7 | 301.9 |
| Net value as of 31 December 2018 | 34.2 | 346.8 | 12.6 | 393.6 |
(1) Includes the valuation of contracts recognised in connection with business combinations.
(2) Those amounts are linked to the acquisitions and liquidations of entities over the period.
(3) The net impact of reclassifications is not nil, as some reclassifications have an impact on other items in the statement of financial position.
4.2. Property, plant and equipment (PP&E)
| 31/12/2018 | ||||
|---|---|---|---|---|
| Restated | ||||
| Depreciation | ||||
| In million euros | Gross value | or provision | Net value | Net value |
| Land | 19.8 | (1.2) | 18.6 | 21.0 |
| Buildings | 96.0 | (69.6) | 26.4 | 25.6 |
| Technical installations, tools and equipment | 3,212.8 | (2,057.5) | 1,155.3 | 1,048.3 |
| Vehicles | 82.5 | (48.3) | 34.2 | 34.4 |
| Other property, plant and equipment | 172.6 | (128.5) | 44.1 | 46.7 |
| Assets under construction and dow n payments |
116.0 | 0.0 | 116.0 | 98.1 |
| Total | 3,699.8 | (2,305.1) | 1,394.7 | 1,274.0 |
2019 changes in gross value and net carrying amount:
Notes to the annual consolidated financial statements
| Technical | ||||||
|---|---|---|---|---|---|---|
| In million euros | Land | Buildings | & equipment | Other | Total | |
| Gross value as of 1 January 2019 Restated | 22.3 | 94.5 | 3,081.4 | 358.7 | 3,556.8 | |
| - of which dismantling cost | 187.6 | 187.6 | ||||
| Acquisitions | 0.0 | 2.4 | 178.8 | 185.6 | 366.8 | |
| - of which dismantling cost | 28.9 | 28.9 | ||||
| - of which effect of rate change on dismantling cost | 9.1 | 9.1 | ||||
| Decreases | (1.9) | (5.7) | (230.0) | (22.1) | (259.7) | |
| - of which dismantling cost | (23.7) | (23.7) | ||||
| Changes in scope | 0.0 | (0.0) | 0.0 | (0.0) | 0.0 | |
| Reclassifications (1) | (1.3) | 4.7 | 143.5 | (153.5) | (6.7) | |
| Goodwill allocation | 15.1 | 15.1 | ||||
| Translation adjustments | 0.7 | 0.2 | 24.0 | 2.6 | 27.5 | |
| Gross value as of 31 December 2019 | 19.8 | 96.0 | 3,212.8 | 371.1 | 3,699.8 | |
| Amortisation / Impairment as of 1 January 2019 Restated | (1.3) | (68.9) | (2,033.1) | (179.4) | (2,282.7) | |
| - of which dismantling cost | (108.0) | (108.0) | ||||
| Depreciation charge net of reversals | (0.0) | (2.9) | (217.9) | (16.0) | (236.8) | |
| - of which dismantling cost | (22.8) | (22.8) | ||||
| Impairment loss | (1.3) | (0.4) | (1.7) | |||
| Decreases | 0.1 | 4.9 | 217.8 | 21.2 | 244.0 | |
| - of which dismantling cost | 17.1 | 17.1 | ||||
| Changes in scope | 0.0 | |||||
| Reclassifications (1) | (2.5) | (8.3) | (1.0) | (11.9) | ||
| Goodwill allocation | 0.0 | |||||
| Translation adjustments | (0.0) | (0.2) | (14.7) | (1.0) | (15.9) | |
| Amortisation / Impairment as of 31 December 2019 | (1.2) | (69.6) | (2,057.5) | (176.8) | (2,305.1) | |
| Net value as of 1 January 2019 Restated | 21.0 | 25.6 | 1,048.3 | 179.3 | 1,274.0 | |
| Net value as of 31 December 2019 | 18.6 | 26.4 | 1,155.3 | 194.3 | 1,394.7 |
(1) The net impact of reclassifications is not nil, as some reclassifications have an impact on other items in the statement of financial position.
2018 Restated changes in gross value and net carrying amount:
| Technical | |||||
|---|---|---|---|---|---|
| installations, tools | |||||
| In million euros | Land | Buildings | & equipment | Other | Total |
| Gross value as of 1 January 2018 Restated | 23.3 | 102.8 | 2,905.4 | 367.6 | 3,399.1 |
| - of which dismantling cost | 169.3 | 169.3 | |||
| Acquisitions | 2.3 | 157.5 | 144.9 | 304.7 | |
| - of which dismantling cost | 35.6 | 35.6 | |||
| - of which effect of rate change on dismantling cost | 0.0 | ||||
| Decreases | (1.2) | (11.7) | (177.8) | (25.6) | (216.3) |
| - of which dismantling cost | (18.9) | (18.9) | |||
| Changes in scope | 64.7 | 7.8 | 72.5 | ||
| Reclassifications | 0.2 | 0.7 | 132.1 | (136.5) | (3.5) |
| Goodwill allocation | 0.0 | ||||
| Translation adjustments | 0.4 | (0.5) | 0.4 | 0.3 | |
| Gross value as of 31 December 2018 Restated | 22.3 | 94.5 | 3,081.4 | 358.7 | 3,556.8 |
| Amortisation / Impairment as of 1 January 2018 Restated | (1.2) | (67.4) | (2,009.2) | (186.1) | (2,263.9) |
| - of which dismantling cost | (98.1) | (98.1) | |||
| Depreciation charge net of reversals | (4.2) | (196.6) | (17.0) | (217.8) | |
| - of which dismantling cost | (23.3) | (23.3) | |||
| Impairment loss | (1.3) | (1.3) | |||
| Decreases | 0.1 | 3.4 | 172.1 | 20.0 | 195.6 |
| - of which dismantling cost | 15.1 | 15.1 | |||
| Changes in scope | (0.2) | 0.3 | 0.1 | ||
| Reclassifications | (0.1) | (0.6) | 1.4 | 2.8 | 3.5 |
| Goodwill allocation | 0.0 | ||||
| Translation adjustments | (0.1) | (0.1) | 0.7 | 0.6 | 1.1 |
| Amortisation / Impairment as of 31 December 2018 Restated | (1.3) | (68.9) | (2,033.1) | (179.4) | (2,282.7) |
| Net value as of 1 January 2018 Restated | 22.1 | 35.4 | 896.2 | 181.5 | 1,135.3 |
| Net value as of 31 December 2018 Restated | 21.0 | 25.6 | 1,048.3 | 179.3 | 1,274.0 |
4.3. Right-of-Use
| 31/12/2018 | ||||
|---|---|---|---|---|
| 31/12/2019 | Restated | |||
| Depreciation or | ||||
| In million euros | Gross value | provision | Net value | Net value |
| Right-of-Use leased advertising space | 7,982.5 | (4,195.7) | 3,786.8 | 4,336.4 |
| Right-of-Use leased property | 331.4 | (190.7) | 140.7 | 133.9 |
| Right-of-Use leased vehicles | 28.8 | (11.4) | 17.4 | 8.5 |
| Right-of-Use other leases | 51.6 | (37.9) | 13.7 | 19.1 |
| Total | 8,394.3 | (4,435.7) | 3,958.5 | 4,498.1 |
2019 changes in gross value and net carrying amount:
| Right-of-use leased advertising |
Right-of-use leased |
Right-of-use leased |
Right-of-use | ||
|---|---|---|---|---|---|
| In million euros | space | property | vehicles | other leases | Total |
| Gross value as of 1 January 2019 Restated | 8,094.6 | 301.4 | 19.9 | 58.3 | 8,474.3 |
| Increases | 646.6 | 45.0 | 14.7 | 3.4 | 709.7 |
| Decreases | (917.4) | (19.1) | (5.9) | (10.6) | (952.9) |
| Changes in scope | 2.2 | 2.0 | 4.3 | ||
| Reclassifications | 16.6 | (1.5) | 0.0 | 0.2 | 15.2 |
| Translation adjustments | 139.7 | 3.5 | 0.1 | 0.4 | 143.8 |
| Gross value as of 31 December 2019 | 7,982.5 | 331.4 | 28.8 | 51.6 | 8,394.3 |
| Amortisation / Impairment as of 1 January 2019 Restated |
(3,758.2) | (167.5) | (11.3) | (39.2) | (3,976.3) |
| Depreciation charge net of reversals | (907.4) | (35.3) | (5.8) | (8.5) | (957.0) |
| Decreases | 553.8 | 12.1 | 5.8 | 10.0 | 581.7 |
| Changes in scope | 0.0 | ||||
| Reclassifications | (13.7) | 1.4 | (0.0) | 0.0 | (12.3) |
| Translation adjustments | (70.1) | (1.4) | (0.1) | (0.2) | (71.8) |
| Amortisation / Impairment as of 31 December 2019 | (4,195.7) | (190.7) | (11.4) | (37.9) | (4,435.7) |
| Net value as of 1 January 2019 Restated | 4,336.4 | 133.9 | 8.5 | 19.1 | 4,498.1 |
| Net value as of 31 December 2019 | 3,786.8 | 140.7 | 17.4 | 13.7 | 3,958.5 |
Notes to the annual consolidated financial statements
4.4. Goodwill, Property, plant and equipment (PP&E), intangible asset and right-of-use impairment tests
Goodwill, property, plant and equipment, intangible assets and right-of-use refer to the following CGU groups:
| 31/12/2019 | 31/12/2018 Restated |
|||||
|---|---|---|---|---|---|---|
| In million euros | Goodwill (1) | PP&E / intangible assets / Right of-use (2) |
Total | Goodwill (1) | PP&E / intangible assets / Right of-use (2) |
Total |
| Street Furniture Europe (excluding France and | ||||||
| United Kingdom) | 389.0 | 282.0 | 671.0 | 389.1 | 260.5 | 649.6 |
| Pacific | 340.0 | 403.1 | 743.0 | 594.5 | 165.2 | 759.7 |
| Billboard Europe (excluding France and United | ||||||
| Kingdom) | 155.3 | 39.0 | 194.3 | 141.4 | 47.9 | 189.4 |
| Billboard United Kingdom | 149.3 | 50.8 | 200.1 | 142.3 | 49.5 | 191.7 |
| Airports World | 123.8 | (58.3) | 65.5 | 123.6 | (114.0) | 9.6 |
| Billboard France | 115.4 | (11.7) | 103.7 | 115.4 | (8.9) | 106.5 |
| Street Furniture France | 86.4 | 381.9 | 468.3 | 86.4 | 301.1 | 387.5 |
| Billboard Rest of the World | 72.8 | 122.7 | 195.5 | 82.5 | 120.0 | 202.5 |
| Street Furniture United Kingdom | 57.8 | 21.7 | 79.5 | 57.2 | 16.3 | 73.5 |
| Other | 192.9 | 129.0 | 321.9 | 191.6 | 133.8 | 325.4 |
| Total | 1,682.7 | 1,360.1 | 3,042.8 | 1,924.0 | 971.5 | 2,895.5 |
This table takes into account the impairment losses recognised on property, plant and equipment, intangible assets, right-of-use and goodwill.
- (1) Goodwill is shown net of net deferred tax liabilities related to contracts and provisions for onerous contracts deducted from right-ofuse recognised in connection with business combinations, totalling, respectively, €96.3 million and €15.1 million at 31 December 2019 and 31 December 2018.
- (2) Intangible assets, property, plant and equipment and right-of-use are presented net of provisions for onerous contracts of €9.1 million and €7.8 million at 31 December 2019 and 31 December 2018, respectively. They are also shown net of lease liabilities of €4,596.5 million and €5,186.1 million at 31 December 2019 and 31 December 2018, respectively.
Impairment tests carried out at 31 December 2019 led to an overall impairment charge to operating income of €(2.0) million on intangible assets and property, plant and equipment, a net reversal of €1.0 million on provisions for onerous contracts and goodwill impairment loss of €(10.0) million.
Impairment tests on goodwill, intangible assets and property, plant and equipment had a negative impact of €(10.0) million in net income Group share (versus €2.2 million in 2018).
The discount rate, the operating margin ratio and the perpetual growth rate for the Billboard business are considered to be the Group's key assumptions with respect to impairment testing.
The countries are broken down into five areas based on the risk associated with each country, and each area corresponds to a specific discount rate ranging from 6.0% to 17.0%, for the area presenting the highest risk. The aftertax rate of 6.0%, used in 2019 and 2018, was used, in particular, in Western Europe (excluding Spain, Portugal, Italy and Ireland), North America, Japan, Singapore, South Korea, and Australia where the Group generates 60.5% of its adjusted revenue. The average discount rate for the Group came to 7.8% in 2019.
The sensitivity tests whose results are presented below were run at the level of each business plan and each CGU. Where a region has several CGUs, tests were run separately on each.
- In France, the United Kingdom, Europe (excluding France and the United Kingdom), Asia and Pacific, three tests were done:
- o first, a 50 basis point rise in the discount rate for all businesses;
- o second, a 50 basis point reduction in operating margin ratio for all businesses;
- o lastly, a 50 basis point reduction in the perpetual growth rate of discounted cash flows from the Billboard business.
- In the Rest of the World geographical area, where some countries are exposed to greater political and economic volatility, three sensitivity tests were done:
- o first, a 200 basis point rise in the discount rate for all businesses;
- o second, a 200 basis point reduction in operating margin ratio for all businesses;
- o lastly, a 200 basis point reduction in the perpetual growth rate of discounted cash flows from the Billboard business.
The Airports CGU is tested at a global level.
The results below are an aggregate of the tests run on each business plan.
The results of the sensitivity tests demonstrate that:
Notes to the annual consolidated financial statements
- an increase of 50 basis points in the discount rate for France, the United Kingdom, Europe (excluding France and the United Kingdom), Asia and Pacific would not lead to any impairment loss on goodwill in these geographical areas;
- an increase of 200 basis points in the discount rate for the Rest of the World geographical area would lead to an additional impairment loss of €(22.1) million on goodwill and assets in the Billboard business;
- a decrease of 50 basis points in the operating margin ratio for France, the United Kingdom, Europe (excluding France and the United Kingdom), Asia and Pacific would not lead to any impairment loss on goodwill in these geographical areas;
- a decrease of 200 basis points in the operating margin ratio for the Rest of the World geographical area would lead to an additional impairment loss of €(9.4) million on goodwill and assets in the Billboard business;
- a decrease in the perpetual growth rate of the discounted cash flows of 50 basis points for France, the United Kingdom, Europe (excluding France and the United Kingdom), Asia and Pacific would lead to an impairment loss of €(14.1) million on goodwill and assets in the Billboard business;
- a decrease in the perpetual growth rate of discounted cash flows of 200 basis points for the Rest of the World geographical area would lead to an impairment loss of €(17.4) million on goodwill and assets in the Billboard business.
4.5. Investments under the equity method and impairment tests
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Joint ventures | 266.8 | 259.6 |
| Associates | 185.5 | 184.0 |
| Total (1) | 452.3 | 443.6 |
(1) Including €48.9 million related to the Rest of the World area as of 31 December 2019 compared to €49.6 million as of 31 December 2018.
The information related to the joint ventures and associates is provided in application of IFRS 12 "Disclosure of Interests in Other Entities" and is detailed in Note 10 "Information on the joint ventures" and in Note 11 "Information on associates".
In 2019, a €8.7 million reversal of impairment on joint ventures was recorded. No impairment loss was recognised in 2018.
For companies consolidated under the equity method in France, the United Kingdom, Europe (excluding France and the United Kingdom), Asia and Pacific areas, the results of the sensitivity tests demonstrate that:
- an increase of 50 basis points in the discount rate would not lead to an impairment loss on the share of net profit of companies consolidated under the equity method,
- a decrease of 50 basis points in the operating margin ratio would not lead to an impairment loss on the share of net profit of companies consolidated under the equity method,
- a decrease of 50 basis points in the perpetual growth rate of discounted cash flows would not lead to an impairment loss on the share of net profit of companies consolidated under the equity method, where future cash flows are calculated on the basis of a perpetual projection.
For investments under the equity method belonging to the Rest of the World geographical area, the results of the sensitivity tests demonstrate that:
- an increase of 200 basis points in the discount rate would not lead to an impairment loss on the share of net profit of companies consolidated under the equity method,
- a decrease of 200 basis points in the operating margin ratio would not lead to an impairment loss on the share of net profit of companies consolidated under the equity method,
- a decrease of 200 basis points in the perpetual growth rate of discounted cash flows would not lead to an impairment loss on the share of net profit of companies consolidated under the equity method where cash flows are calculated on the basis of a perpetual projection.
4.6. Other financial assets (current and non-current)
Notes to the annual consolidated financial statements
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Financial investments | 0.9 | 0.5 |
| Loans | 33.3 | 36.7 |
| Loans to participating interests | 2.0 | 0.7 |
| Other financial investments | 44.2 | 67.7 |
| Total | 80.3 | 105.6 |
The decrease in other financial assets of €(25.3) million as of 31 December 2019 mainly reflects the release of the escrow account in Belgium on completion of the Publiroute acquisition in 2019.
The maturity of other financial assets (except financial investments) breaks down as follows:
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| < 1 year | 4.5 | 30.2 |
| > 1 year & < 5 years | 58.6 | 62.6 |
| > 5 years | 16.2 | 12.2 |
| Total | 79.4 | 105.0 |
4.7. Other receivables (non-current)
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Prepaid expenses | 11.3 | 12.5 |
| Miscellaneous receivables | 7.2 | 7.2 |
| Total Gross value for other receivables (non-current) | 18.5 | 19.7 |
| Write-down for miscellaneous receivables | (1.4) | (1.4) |
| Total Write-down for other receivables (non-current) | (1.4) | (1.4) |
| Total | 17.1 | 18.3 |
4.8. Inventories
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Gross value of inventories | 205.4 | 186.7 |
| Raw materials, supply and goods | 155.2 | 123.5 |
| Intermediate and finished products | 50.2 | 63.2 |
| Write-down | (30.3) | (27.3) |
| Raw materials, supply and goods | (21.8) | (19.9) |
| Intermediate and finished products | (8.6) | (7.4) |
| Total | 175.1 | 159.4 |
Inventories mainly consist of:
▪ parts required for the maintenance of installed street furniture, and
▪ street furniture and billboards in kit form.
As of 31 December 2019, France contributed €73.8 million to the total gross value, including 60% of inventories in work in progress and 40% of maintenance inventories.
The €15.7 million increase of inventories as of 31 December 2019 is mainly due to digitalisation projects of street furniture.
4.9. Trade and other receivables
Notes to the annual consolidated financial statements
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Trade receivables | 848.8 | 862.3 |
| Miscellaneous receivables | 17.7 | 15.8 |
| Other operating receivables | 23.3 | 27.2 |
| Miscellaneous tax receivables | 93.3 | 69.5 |
| Receivables on disposal of assets and equipment grant to be received | 0.4 | 0.3 |
| Down payments | 4.8 | 9.8 |
| Prepaid expenses | 67.3 | 49.6 |
| Total Gross value for Trade and other receivables | 1,055.6 | 1,034.5 |
| Write-down for trade receivables | (32.3) | (31.5) |
| Write-down for miscellaneous receivables | (1.7) | (1.9) |
| Write-down for other operating receivables | (0.1) | (0.1) |
| Total Write-down for Trade and other receivables | (34.1) | (33.5) |
| Total | 1,021.5 | 1,001.0 |
The €20.5 million increase in trade and other receivables as of 31 December 2019 is mainly due to foreign exchange rates impacts for €17.1 million and changes in scope for €16.6 million, partially offset by cash flows from operating activities for €(10.0) million and reclassifications for €(2.7) million.
The balance of past-due and un-provisioned trade receivables is €305.2 million as of 31 December 2019 compared to €330.7 million at 31 December 2018. 7.0% of the un-provisioned trade receivables are overdue by more than 90 days as of 31 December 2019 compared to 8.0% at 31 December 2018. These receivables are held mainly towards media agencies or international groups which do not pose a recovery risk.
4.10. Managed cash
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Cash | 136.0 | 97.8 |
| Cash equivalents | 13.9 | 14.5 |
| Total cash and cash equivalents | 149.8 | 112.3 |
| Treasury financial assets | 83.5 | 81.2 |
| Total managed cash | 233.3 | 193.5 |
Cash equivalents mainly include short-term deposits and money market funds. €11.2 million of the total of cash and cash equivalents is invested in guarantees as of 31 December 2019, compared to €8.6 million as of 31 December 2018.
As of 31 December 2019, treasury financial assets were comprised of €45.2 million of short-term liquid investments (compared to €44.7 million as of 31 December 2018) and €38.3 million held in an escrow account by the Group in connection with operational contracts, where the cash belongs to the Group (compared to €36.5 million as of 31 December 2018). These financial assets have the main characteristics of cash equivalents but do not strictly comply with all the criteria to be qualified as such according to IAS 7.
4.11. Net deferred taxes
4.11.1. Deferred taxes recorded
Breakdown of deferred taxes:
| 31/12/2019 | 31/12/2018 Restated |
|
|---|---|---|
| In million euros | ||
| PP&E, intangible assets and provisions for onerous contracts | (173.0) | (92.4) |
| Tax losses carried forward | 24.2 | 28.6 |
| Provisions for dismantling costs | 23.0 | 22.8 |
| Provisions for retirement and other benefits | 23.7 | 23.2 |
| IFRS16 leases | 69.4 | 79.7 |
| Other | 23.3 | 11.7 |
| Total | (9.4) | 73.5 |
The €82.9 million decrease of deferred tax assets net of the deferred tax liabilities is mainly due to an increase in deferred tax liabilities on intangible assets and property, plant and equipment related to the purchase price allocation of APN Outdoor group in 2019 for €(82.1) million.
4.11.2. Net deferred tax variation
As of 31 December 2019, the net deferred tax variations are as follows:
| 31/12/2018 | DT on actuarial gains |
Translation | Changes in | ||||
|---|---|---|---|---|---|---|---|
| In million euros | Restated | Net expense | Reclassifications | and losses | adjustments | scope | 31/12/2019 |
| Deferred tax assets | 137.6 | (14.1) | (3.2) | 0.4 | 2.4 | (0.3) | 122.7 |
| Deferred tax liabilities | (64.0) | 9.6 | 3.2 | 2.0 | (1.6) | (81.3) | (132.1) |
| Total | 73.5 | (4.5) | 0.0 | 2.4 | 0.9 | (81.7) | (9.4) |
As of 31 December 2018, the net deferred tax variations were as follows:
| DT on | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 01/01/2018 | actuarial gains | Translation | Changes in | 31/12/2018 | ||||||
| In million euros | Restated | Net expense Reclassifications | and losses | adjustments | scope | Restated | ||||
| Deferred tax assets | 114.0 | 18.7 | (2.6) | (0.1) | 2.2 | 5.4 | 137.6 | |||
| Deferred tax liabilities | (53.0) | 10.4 | 2.6 | 0.0 | (1.4) | (22.6) | (64.0) | |||
| Total | 61.0 | 29.1 | 0.0 | (0.1) | 0.8 | (17.3) | 73.5 |
4.11.3. Unrecognised deferred tax assets on tax losses carried forward
As of 31 December 2019, the amount of deferred tax assets on unrecognised losses carried forward is €103.2 million, compared to €92.0 million as of 31 December 2018.
4.12. Equity
Breakdown of share capital
As of 31 December 2019, share capital amounted to €3,245,684.82 divided into 212,902,810 shares of the same class and fully paid up.
Reconciliation of the number of outstanding shares as of 1 January 2019 and 31 December 2019:
| Number of outstanding shares as of 1 January 2019 | 212,810,350 |
|---|---|
| Shares issued following the exercise of options | 92,460 |
| Number of outstanding shares as of 31 December 2019 | 212,902,810 |
The Group holds 24,373 treasury shares as of 31 December 2019.
In 2019, the Group did not grant any stock option or bonus share plans.
The cost related to all the current plans amounted to €0.2 million in 2019.
The General Meeting held on 16 May 2019, approved a dividend payment of €0.58 to each of the 212,810,350 shares making up the share capital as of 31 December 2018.
Non-controlling interests do not represent a significant portion of the 2018 and 2019 Group consolidated financial statements.
4.13. Provisions
Provisions break down as follows:
| 31/12/2018 Restated |
Allocations | Discount (1) | Reversals | Actuarial gains and losses/ assets ceiling |
Reclassi fications |
Translation adjustments |
Changes in scope |
31/12/2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| In million euros | Used | Not used |
||||||||
| Provisions for dismantling cost |
242.6 | 28.9 | 12.7 | (18.6) | (11.8) | 2.3 | 256.1 | |||
| Provisions for retirement and other benefits |
88.3 | 5.4 | 1.7 | (5.9) | 0.0 | 13.1 | 0.9 | 0.1 | 103.6 | |
| Provisions for risks and litigation |
55.7 | 11.9 | (4.8) | (13.4) | (0.3) | 0.6 | 49.5 | |||
| Provisions for onerous contracts |
7.8 | 4.5 | (3.5) | 0.0 | 0.3 | 9.1 | ||||
| Total | 394.4 | 50.7 | 14.4 | (32.9) | (25.1) | 13.1 | 0.0 | 3.7 | 0.1 | 418.4 |
(1) Including €9.1 million recognised versus PP&E.
4.13.1. Provisions for dismantling costs
Provisions consist mainly of provisions for dismantling costs regarding advertising assets in respect of Street Furniture and Transport businesses. They are calculated at the end of each accounting period and are based on the assets pool and their unitary dismantling cost (labour, cost of destruction and restoration of ground surfaces). As of 31 December 2019, the average residual contract term used to calculate the provision for dismantling costs is 8.3 years.
Individual rates have been applied to each country since 2019. A weighted average discount rate was calculated based on each country's dismantling provision for the needs of the sensitivity analysis. The sensitivity analysis at 31 December 2019 used this new weighted average discount rate for dismantling provisions, calculated as 0.71%, rather than the generic 1.50% rate used at 31 December 2018. Therefore, a 50 basis point reduction in the weighted average discount rate to 0.21% would have generated an additional provision of approximately €10.8 million.
As of 31 December 2019, the release of provisions for dismantling costs amounts to €118.2 million over a time horizon less than or equal to 5 years; it amounts to €90.7 million over a time horizon ranging between 5 and 10 years and to €47.2 million after 10 years.
4.13.2. Provisions for retirement and other benefits
4.13.2.1. Characteristics of the defined benefits plans
The Group's defined employee benefit obligations mainly consist of retirement benefits (contractual termination benefits, pensions and other retirement benefits for senior executives of certain Group subsidiaries) and other long-term benefits paid throughout the employee's career, such as long service awards or jubilees.
The Group's retirement benefits mainly involve France, the United Kingdom and Austria.
In France, termination benefits paid at retirement are calculated in accordance with the "Convention Nationale de la Publicité" (Collective Bargaining Agreement for Advertising). A portion of the obligation is covered by contributions made to an external fund by the French companies of JCDecaux Group.
In the United Kingdom, retirement obligations mainly consist of a pension plan previously opened to some employees of JCDecaux UK Ltd. In December 2002, the vesting rights for this plan were frozen.
In Austria, the obligations mainly comprise mandatory termination benefits.
4.13.2.2. Financial information
Provisions are calculated according to the following assumptions:
| 2019 | 2018 | |
|---|---|---|
| Discount rate (1) | ||
| Euro Zone | 0.80% | 1.75% |
| United Kingdom | 1.95% | 2.80% |
| Estimated annual rate of increase in future salaries | ||
| Euro Zone | 1.98% | 1.90% |
| United Kingdom (2) | NA | NA |
| Inflation rate | ||
| Euro Zone | 1.75% | 1.75% |
| United Kingdom | 2.05% | 2.40% |
(1) The discount rates for the Euro Zone and the United Kingdom are taken from the Iboxx data and are determined based on the yield rate of bonds issued by highly rated companies (rated AA).
(2) As the UK plan was frozen, no salary increase was taken into account.
Notes to the annual consolidated financial statements
Retirement benefits and other long-term benefits (before tax) in 2019 break down as follows:
| Retirement benefits | Other long-term | Total | ||
|---|---|---|---|---|
| In million euros | unfunded | funded | benefits | |
| Change in benefit obligation | ||||
| Benefit obligation at the beginning of the year | 20.3 | 119.9 | 7.7 | 147.9 |
| Service cost | 1.2 | 3.4 | 0.7 | 5.2 |
| Interest cost | 0.4 | 2.6 | 0.2 | 3.2 |
| Acquisitions / disposals of plans | 0.0 | 0.3 | 0.0 | 0.3 |
| Modifications / curtailments of plans | (0.9) | (0.9) | ||
| Actuarial gains/losses (1) | 3.4 | 12.4 | 0.0 | 15.8 |
| Employee contributions | 0.2 | 0.2 | ||
| Benefits paid | (0.7) | (3.0) | (0.7) | (4.4) |
| Translation adjustments | 0.2 | 3.0 | 0.0 | 3.2 |
| Benefit obligation at the end of the year | 24.8 | 137.9 | 7.8 | 170.5 |
| including France | 17.0 | 59.9 | 4.1 | 81.0 |
| including other countries | 7.8 | 78.0 | 3.7 | 89.5 |
| Change in plan assets | ||||
| Assets at the beginning of the year | 59.8 | 59.8 | ||
| Interest income | 1.5 | 1.5 | ||
| Return on plan assets excluding amounts included in interest income | 2.2 | 2.2 | ||
| Acquisitions / disposals of plans | 0.2 | 0.2 | ||
| Employer contributions | 3.6 | 3.6 | ||
| Employee contributions | 0.2 | 0.2 | ||
| Benefits paid | (3.0) | (3.0) | ||
| Translation adjustments | 2.3 | 2.3 | ||
| Assets at the end of the year | 66.9 | 66.9 | ||
| including France | 7.4 | 7.4 | ||
| including other countries (2) | 59.5 | 59.5 | ||
| Provisions | ||||
| Funded status | 24.8 | 71.0 | 7.8 | 103.6 |
| Assets ceiling | 0.0 | |||
| Provisions at the end of the year | 24.8 | 71.0 | 7.8 | 103.6 |
| including France | 17.0 | 52.5 | 4.1 | 73.6 |
| including other countries | 7.8 | 18.5 | 3.7 | 30.0 |
| Pension cost | ||||
| Interest cost | 0.4 | 2.6 | 0.2 | 3.2 |
| Interest income | (1.5) | (1.5) | ||
| Modifications / curtailments of plans | (0.9) | (0.9) | ||
| Service cost | 1.2 | 3.4 | 0.7 | 5.2 |
| Amortisation of actuarial gains/losses on other long-term benefits | 0.2 | 0.2 | ||
| Charge for the year | 1.5 | 3.6 | 1.1 | 6.2 |
| including France | 1.1 | 2.8 | 0.2 | 4.1 |
| including other countries | 0.5 | 0.8 | 0.8 | 2.1 |
(1) Including €(0.4) million related to experience gains and losses, €16.3 million related to financial assumptions and €(0.1) million related to demographic assumptions.
(2) Mainly the United Kingdom.
As of 31 December 2019 the Group's benefit obligation amounted to €170.5 million and mainly involved three countries: France (48% of the total benefit obligation), the United Kingdom (36%) and Austria (5%).
The valuations were performed by an independent actuary who also conducted sensitivity tests for each of the plans. The results of the sensitivity tests demonstrate that:
- a decrease of 50 basis points in the discount rate would lead to a €11.1 million increase in the benefit obligation's present value,
- an increase of 50 basis points in the annual rate of increase in future salaries would lead to a €5.4 million increase in the benefit obligation's present value,
- an increase of 50 basis points in the inflation rate would lead to a €1.8 million increase in the benefit obligation's present value.
The variances observed during the sensitivity tests do not call into question the rates taken on for the preparation of the financial statements, deemed to be the rates that most closely match the market.
Notes to the annual consolidated financial statements
| 2019 In million euros |
2018 |
|---|---|
| 1 January 88.3 |
85.7 |
| Charge for the year 6.2 |
6.0 |
| Translation adjustments 0.9 |
0.0 |
| Contributions paid (3.6) |
(4.6) |
| Benefits paid (1.4) |
(1.7) |
| Change in actuarial gains and losses on post-employment benefit plans and assets ceiling 13.1 |
2.1 |
| Other 0.1 |
0.8 |
| 31 December 103.6 |
88.3 |
| Which are recorded: | |
| - In EBIT 0.4 |
1.6 |
| - In Financial income (loss) (1.7) |
(1.3) |
| - In Other comprehensive income (13.1) |
(2.1) |
The breakdown of the related plan assets is as follows:
| 31/12/2019 | 31/12/2018 | |||
|---|---|---|---|---|
| In M€ | In % | In M€ | In % | |
| Shares | 22.5 | 34% | 20.8 | 35% |
| Bonds | 27.3 | 41% | 23.9 | 40% |
| Corporate bonds | 2.3 | 3% | 2.8 | 5% |
| Real Estate | 2.9 | 4% | 2.7 | 4% |
| Insurance contracts | 9.6 | 14% | 9.2 | 15% |
| Other | 2.3 | 3% | 0.4 | 1% |
| Total | 66.9 | 100% | 59.8 | 100% |
The plan assets are assets that are listed, separately from real estate which is not listed.
Retirement benefits and other long-term benefits (before tax) in 2018 break down as follows:
| Retirement benefits | Other long-term | Total | |||
|---|---|---|---|---|---|
| In million euros | unfunded | funded | benefits | ||
| Change in benefit obligation | |||||
| Benefit obligation at the beginning of the year | 18.4 | 119.8 | 7.7 | 145.9 | |
| Service cost | 1.4 | 3.5 | 0.7 | 5.6 | |
| Interest cost | 0.3 | 2.2 | 0.1 | 2.6 | |
| Acquisitions / disposals of plans | 0.7 | 0.1 | 0.8 | ||
| Liquidations of plans | (0.6) | (0.6) | |||
| Actuarial gains/losses (1) | 1.3 | (1.0) | (0.4) | (0.1) | |
| Employee contributions | 0.2 | 0.2 | |||
| Benefits paid | (1.2) | (4.5) | (0.5) | (6.2) | |
| Translation adjustments | (0.3) | (0.3) | |||
| Benefit obligation at the end of the year | 20.3 | 119.9 | 7.7 | 147.9 | |
| including France | 12.7 | 55.2 | 4.4 | 72.3 | |
| including other countries | 7.6 | 64.7 | 3.3 | 75.6 | |
| Change in plan assets | |||||
| Assets at the beginning of the year | 60.2 | 60.2 | |||
| Interest income | 1.3 | 1.3 | |||
| Return on plan assets excluding amounts included in interest income | (1.7) | (1.7) | |||
| Employer contributions | 4.6 | 4.6 | |||
| Employee contributions | 0.2 | 0.2 | |||
| Benefits paid | (4.5) | (4.5) | |||
| Translation adjustments | (0.3) | (0.3) | |||
| Assets at the end of the year | 59.8 | 59.8 | |||
| including France | 7.4 | 7.4 | |||
| including other countries (2) | 52.4 | 52.4 | |||
| Provisions | |||||
| Funded status | 20.3 | 60.1 | 7.7 | 88.1 | |
| Assets ceiling | 0.2 | 0.2 | |||
| Provisions at the end of the year | 20.3 | 60.3 | 7.7 | 88.3 | |
| including France | 12.7 | 47.8 | 4.4 | 64.9 | |
| including other countries | 7.6 | 12.5 | 3.3 | 23.4 | |
| Pension cost | |||||
| Interest cost | 0.3 | 2.2 | 0.1 | 2.6 | |
| Interest income | (1.3) | (1.3) | |||
| Service cost | 1.4 | 3.5 | 0.7 | 5.6 | |
| Amortisation of actuarial gains/losses on other long-term benefits | (0.3) | (0.3) | |||
| Liquidations of plans | (0.6) | (0.6) | |||
| Charge for the year | 1.1 | 4.4 | 0.5 | 6.0 | |
| including France | 0.9 | 3.4 | 0.1 | 4.4 | |
| including other countries | 0.2 | 1.0 | 0.4 | 1.6 |
(1) Including €2.6 million related to experience gains and losses, €(5.4) million related to financial assumptions and €2.7 million related to demographic assumptions.
(2) Mainly the United Kingdom.
4.13.2.3. Information about the future cash flows
Future contributions to pension funds for the year 2020 are estimated at €2.3 million.
The average weighted duration is respectively 11 years and 18 years for the Euro Zone and the United Kingdom.
The JCDecaux UK Ltd pension plan in the United Kingdom has been closed since December 2002. Today only the deferred or retirees remain in this plan. "Funding" evaluations are carried out every three years in order to determine the level of the plan's deficit with the agreement of the Trustees and the employer in compliance with the regulations. A schedule of contributions is defined up to 2028.
4.13.2.4. Defined contribution plans
Contributions paid for defined contribution plans represented €29.6 million in 2019 compared to €36.0 million in 2018.
4.13.2.5. Multi-employer defined benefit plans
The Group takes part in three multi-employer defined benefit plans covered by assets in Sweden (ITP Plan). An evaluation is performed according to the local standards each year. The benefit obligation of the company JCDecaux Sverige AB cannot currently be determined separately. As of 31 December 2018, the three plans were in loss position for a total amount of €(1,381.0) million, at the national level, according to local evaluations specific to these commitments. The expense recognised in the consolidated financial statements for these three plans is the same as the contributions paid in 2019, i.e. €0.6 million. The future contributions of the three plans will be steady in 2020.
The Group takes part also in five multi-employer plans in the United States. The Group does not have sufficient information related to the assets and obligations of these plans, the amount of actuarial gains and losses, the service cost and the financial cost, necessary information for the recognition of these plans as defined benefit plans. Therefore, they are recognised on the same basis as for defined contribution plans. The Group's annual contribution for these multiemployer plans in the United States amounted to €0.5 million.
4.13.3. Provisions for risks and litigation
Provisions for risks and litigation amounted to €49.5 million as of 31 December 2019 compared to €55.7 million as of 31 December 2018.
The JCDecaux Group is party to several legal disputes regarding the implementation terms and conditions for some of its contracts with its concession grantors and the terms and conditions governing supplier relations. In addition, the specific nature of its business (contracts with public authorities) may generate specific contentious procedures. The JCDecaux Group is party to litigation over the awarding or cancellation of street furniture, transport and billboard contracts, as well as tax litigation. In addition, in the context of their businesses, Group companies may be subject to actions/investigations from legal authorities/national competition authorities. Some are ongoing and should not lead to material adverse consequences for the Group.
The Group's Legal Department identifies all risks and litigation (nature, amounts, procedure, risk level), regularly monitors developments and compares this information with that of the Finance Department. The amount of provisions recognised for risks and litigation is analysed case by case, based on the positions of the plaintiffs, the assessment of the Group's legal advisors and any decisions handed down by a court.
4.13.4. Contingent assets and liabilities
Subsequent to a risk analysis, the Group deemed that it was not necessary to recognise a provision with respect to some on-going proceedings regarding litigation or investigations by competition authorities, tax risks or the terms and conditions governing the implementation or awarding of contracts.
Subject to exceptions, no provision for dismantling costs regarding panels in respect of the Billboard business is recognised in the Group financial statements. Indeed, the Group deems that the dismantling obligation of the Billboard business corresponds to a contingent liability as either the obligation is hardly probable or it cannot be estimated with sufficient reliability due to the uncertainty of the probable dismantling date that influences the discounting impact. Regarding panels that resemble street furniture, large format digital screens and the most spectacular advertising structures, whose unitary dismantling cost is more significant than for dismantling traditional panels, as well as for dismantling programs related to panels for which a high probability of dismantling exists in the short term and at our initiative, the Group had estimated the overall non-discounted dismantling cost at €16.7 million as of 31 December 2019, compared to €21.0 million as of 31 December 2018. In exceptional cases where a short-term dismantling obligation is identified, the Group may recognise a provision for dismantling costs regarding panels of the Billboard business.
Notes to the annual consolidated financial statements
4.14. Financial debt
| 31/12/2019 | 31/12/2018 Restated |
||||||
|---|---|---|---|---|---|---|---|
| In million euros | Current portion |
Non-current portion |
Total | Current portion |
Non-current portion |
Total | |
| Gross financial debt | (1) | 595.7 | 753.1 | 1,348.9 | 289.6 | 1,062.9 | 1,352.5 |
| Financial derivatives assets | (1.1) | (0.1) | (1.2) | (4.9) | (4.9) | ||
| Financial derivatives liabilities | 3.3 | 0.0 | 3.3 | 1.3 | 0.2 | 1.5 | |
| Hedging financial derivatives instruments | (2) | 2.2 | (0.1) | 2.2 | (3.6) | 0.2 | (3.4) |
| Cash and cash equivalents (*) | 149.8 | 149.8 | 112.3 | 112.3 | |||
| Bank overdrafts | (7.4) | (7.4) | (24.3) | (24.3) | |||
| Net cash | (3) | 142.4 | 0.0 | 142.4 | 88.0 | 0.0 | 88.0 |
| Treasury financial assets (**) | (4) | 83.5 | 0.0 | 83.5 | 81.2 | 0.0 | 81.2 |
| Net financial debt (excluding non-controlling interest purchase commitments) |
(5)=(1)+(2)- (3)-(4) |
372.0 | 753.0 | 1,125.1 | 116.8 | 1,063.1 | 1,179.9 |
(*) As of 31 December 2019, the Group had €149.8 million of cash and cash equivalents (compared to €112.3 million as of 31 December 2018) and €83.5 million of treasury financial assets (compared to €81.2 million as of 31 December 2018). Cash equivalents mainly included short-term deposits and money market funds. €11.2 million of the total of cash and cash equivalents is invested in guarantees as of 31 December 2019, compared to €8.6 million as of 31 December 2018.
(**) As of 31 December 2019 treasury financial assets were made of €45.2 million of short-term liquid investments (compared to €44.7 million as of 31 December 2018) and €38.3 million held in an escrow account by the Group in connection with operational contracts, where the cash belongs to the Group (compared to €36.5 million as of 31 December 2018). These financial assets have the main characteristics of cash equivalents but do not strictly comply with all the criteria to be qualified as such according to IAS 7.
The debts on commitments to purchase non-controlling interests are recorded separately and therefore are not included in the financial debt. They are described in Note 4.15 "Debt on commitments to purchase non-controlling interests".
Hedging financial instruments are described in Note 4.17 "Financial instruments".
The reconciliation of the cash flow variance with the change in gross financial debt is detailed in Note 6.4 "Reconciliation between the cash flows and the change in gross financial debt".
The debt analyses presented hereafter are based on the economic financial debt, which is equal to the gross financial debt on the statement of financial position adjusted by the impact of amortised cost:
| 31/12/2019 | Restated | ||||||
|---|---|---|---|---|---|---|---|
| Current | Non-current | Current | Non-current | ||||
| In million euros | portion | portion | Total | portion | portion | Total | |
| Gross financial debt | 595.7 | 753.1 | 1,348.8 | 289.6 | 1,062.9 | 1,352.5 | |
| Impact of amortised cost | 1.1 | 3.2 | 4.3 | 1.2 | 3.2 | 4.4 | |
| Economic financial debt | 596.7 | 756.3 | 1,353.0 | 290.8 | 1,066.1 | 1,356.9 |
The economic financial debt breaks down as follows:
| Restated | ||||||
|---|---|---|---|---|---|---|
| In million euros | Current portion |
Non-current portion |
Total | Current portion |
Non-current portion |
Total |
| Bonds | 300.0 | 750.0 | 1,050.0 | 1,050.0 | 1,050.0 | |
| Commercial Paper (NEU/CP) | 180.0 | 180.0 | 220.0 | 220.0 | ||
| Bank borrowings | 72.0 | 1.7 | 73.7 | 36.4 | 10.3 | 46.7 |
| Miscellaneous borrowings | 39.9 | 4.6 | 44.5 | 29.6 | 5.8 | 35.4 |
| Accrued interest | 4.8 | 0.0 | 4.8 | 4.8 | 0.0 | 4.8 |
| Economic financial debt | 596.7 | 756.3 | 1,353.0 | 290.8 | 1,066.1 | 1,356.9 |
As of 31 December 2019, the Group's financial debt mainly includes:
- bonds held by JCDecaux SA:
- €750 million issued in June 2016 maturing in June 2023
- €300 million issued in October 2018 maturing in October 2020. This maturity is secured by the committed revolving credit facility of €825 million maturing in July 2024 detailed below.
- €180 million of commercial paper issued by JCDecaux SA through its Negotiable European Commercial Paper (NEU CP) program for a maximum amount of €500 million.
The financial debt also includes:
- bank borrowings held by JCDecaux SA's subsidiaries, for €73.7 million,
- miscellaneous borrowings for €44.5million, mainly including borrowings from JCDecaux SA and its subsidiaries towards the Group's joint ventures,
- accrued interest for €4.8 million.
The average effective interest rate of JCDecaux SA's debts is approximately 0.5% for 2019 financial year.
As of 31 December 2019, JCDecaux SA also holds an undrawn committed revolving credit facility of €825 million, which includes a €100 million swingline for same-day short-term drawdowns. On 2 July 2019, JCDecaux SA signed an amendment to this revolving credit facility modifying the applicable margin and maturity. The margin is now based on JCDecaux SA's credit rating and no longer on its net debt/operating margin ratio. In addition, the facility's maturity has been extended to July 2024 with two one-year extensions options.
If JCDecaux's credit rating goes below Baa3 (Moody's) or BBB (Standard and Poor's), the revolving credit facility requires compliance with the ratio: net financial debt/operating margin strictly below 3.5.
JCDecaux SA is rated "Baa2" by Moody's and "BBB" by Standard and Poor's (Moody's last rating dated 9 September 2019, and that of Standard and Poor's 5 September 2018), with a stable outlook for both ratings.
Maturity of financial debt (excluding unused committed credit facilities)
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Less than one year | 596.7 | 290.8 |
| More than one year and less than 5 years | 756.3 | 1,064.8 |
| More than 5 years | - | 1.3 |
| Total | 1,353.0 | 1,356.9 |
Breakdown of financial debt by currency (after foreign exchange currency hedging)
| Restated | |||
|---|---|---|---|
| In M€ | In % | In M€ | In % |
| 996.4 | 74% | 967.4 | 71% |
| 192.9 | 14% | 166.8 | 12% |
| 155.7 | 12% | 169.2 | 12% |
| 80.7 | 6% | 66.5 | 5% |
| 51.4 | 4% | 37.5 | 3% |
| 25.7 | 2% | 17.8 | 1% |
| (10.1) | (1)% | 0.0 | 0% |
| (16.8) | (1)% | 16.0 | 1% |
| (28.3) | (2)% | (29.6) | (2)% |
| (89.0) | (7)% | (70.6) | (5)% |
| (5.6) | 0% | 15.9 | 1% |
| 1,353.0 | 100% | 1,356.9 | 100% |
| 31/12/2019 | 31/12/2018 |
(1) Negative amounts correspond to lending positions.
Breakdown of debt by interest rate (excluding unused committed credit facilities)
| 31/12/2018 | |||||
|---|---|---|---|---|---|
| 31/12/2019 | Restated | ||||
| In M€ | In % | In M€ | In % | ||
| Fixed rate | 941.5 | 70% | 979.3 | 72% | |
| Floating rate | 411.5 | 30% | 377.6 | 28% | |
| Total | 1,353.0 | 100% | 1,356.9 | 100% |
4.15. Debt on commitments to purchase non-controlling interests
The debt on commitments to purchase non-controlling interests amounted to €109.4 million as of 31 December 2019, compared to €92.4 million as of 31 December 2018. It mainly relates to a put on a company in Europe, exercisable in 2029 and for which the debt is calculated as the present value of the estimated contractual exercise price.
Notes to the annual consolidated financial statements
The €17.0 million increase in the debt on commitments to purchase non-controlling interests between 31 December 2018 and 31 December 2019 includes the impact of debt on commitments to purchase non-controlling interests actualisation and the accounting of a new commitment.
4.16. Lease liabilities
The lease liabilities related to lease contracts as at 31 December 2019 are as follows:
| In million euros | 31/12/2018 Restated |
Increases | Interest expense |
Repayme nts (1) |
Decreases | Changes in scope |
Reclassifi cations |
Translation adjustments Others |
31/12/2019 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Lease liability on advertising space > 12 months |
4,019.3 | 615.7 | (10.7) | (414.8) | 1.8 | (859.0) | 62.3 | 3,414.6 | ||
| Lease liability on property > 12 months |
125.9 | 44.4 | (6.8) | 2.0 | (38.4) | 2.3 | 129.4 | |||
| Lease liability on vehicles > 12 months |
17.8 | 16.2 | (8.8) | (0.1) | (6.0) | 0.1 | 0.2 | 19.5 | ||
| Lease liability others > 12 months |
0.2 | 1.8 | (1.2) | 0.0 | 0.8 | |||||
| Total lease liabilities - non current |
4,163.2 | 678.2 | 0.0 | (19.5) | (421.7) | 3.8 | (904.6) | 64.7 | 0.2 | 3,564.3 |
| Lease liability on advertising space < 12 months |
977.5 | 30.9 | 146.2 (1,033.9) | (12.2) | 0.4 | 825.3 | 16.9 | 951.1 | ||
| Lease liability on property < 12 months |
34.2 | 0.6 | 4.8 | (41.1) | (0.1) | 0.0 | 37.7 | 0.3 | 36.5 | |
| Lease liability on vehicles < 12 months |
11.1 | 0.0 | 0.8 | (6.1) | (0.2) | 5.9 | 0.1 | 11.6 | ||
| Lease liability others < 12 months |
0.0 | 0.1 | 0.1 | (0.9) | 1.2 | 0.0 | 0.6 | |||
| Accrued interest on lease liability < 12 months |
(2.8) | 0.0 | 34.5 | (0.1) | 0.8 | 32.5 | ||||
| Total lease liabilities - current |
1,022.9 | 31.6 | 152.0 (1,084.7) | (12.5) | 0.4 | 904.6 | 17.3 | 0.8 | 1,032.3 | |
| Total lease liabilities | 5,186.1 | 709.8 | 152.0 (1,104.2) | (434.3) | 4.2 | (0.0) | 82.0 | 1.0 | 4,596.5 |
(1) Including the repayment of the principal for €(949.5) million and the interest payment for €(154.7) million.
Maturity of lease liabilities:
| 31/12/2018 | ||||||
|---|---|---|---|---|---|---|
| 31/12/2019 | Restated | |||||
| Non | Non | |||||
| discounted | discounted | |||||
| future | Discount | Lease | future | Discount | Lease | |
| In million euros | payments | impact | liabilities | payments | impact | liabilities |
| Less than one year | 1,071.5 | 39.2 | 1,032.3 | 1,065.0 | 42.1 | 1,022.9 |
| More than one year and less than 5 years | 2,492.5 | 135.8 | 2,356.6 | 2,898.7 | 146.1 | 2,752.7 |
| More than 5 years | 1,259.5 | 51.9 | 1,207.6 | 1,466.4 | 55.8 | 1,410.6 |
| Total | 4,823.5 | 226.9 | 4,596.5 | 5,430.1 | 244.0 | 5,186.1 |
4.17. Financial instruments
The Group uses financial instruments mainly for foreign exchange rate hedging purposes. These instruments are primarily held by JCDecaux SA.
Foreign exchange rate financial instruments
The Group's foreign exchange risk exposure is mainly generated by its business in foreign countries. However, because of its operating structure, the JCDecaux Group is not very vulnerable to currency fluctuations in terms of cash flows, as the subsidiaries in each country do business in their own country and inter-company services and purchases are relatively insignificant. Accordingly, most of the foreign exchange risk stems from the translation of local-currencydenominated accounts to the euro-denominated consolidated accounts.
The foreign exchange risk on flows is mainly related to financial activities (refinancing and recycling of cash with foreign subsidiaries pursuant to the Group's cash centralisation policy). The Group hedges this risk mainly with short-term currency swaps.
Therefore, as of 31 December, the average exchange rates of the foreign exchange financial instruments are close to the exchange rates at closing.
Since inter-company loans and borrowings are eliminated upon consolidation, only the value of the hedging instruments is presented in the assets or liabilities of the statement of financial position.
As of 31 December 2019, the main foreign exchange rate financial instruments contracted by the Group are as follows (net positions):
| In million euros | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Forward purchases against euro: | ||
| Hong Kong dollar | 56.7 | 39.1 |
| Emirati dirham | 29.5 | 31.4 |
| South African rand | 13.7 | 0.0 |
| Norwegian krone | 13.2 | 11.9 |
| Saoudian riyal | 12.3 | 6.2 |
| Others | 14.8 | 22.9 |
| Forward sales against euro: | ||
| Australian dollar | 193.8 | 185.1 |
| American dollar | 112.0 | 122.2 |
| British pound sterling | 34.9 | 34.0 |
| Japanese yen | 26.8 | 17.8 |
| Israeli Shekel | 0.0 | 41.2 |
| South African rand | 0.0 | 17.1 |
| Others | 17.0 | 30.9 |
| Forward purchase against Chinese yuan: | ||
| Hong Kong dollar | 31.8 | 31.0 |
| Forward purchase against British pound sterling: | ||
| Chinese Yuan | 14.7 | 3.2 |
| American dollar | 3.9 | 0.0 |
| Emirati dirham | 3.8 | 4.9 |
| Singaporean dollar | 1.2 | 0.0 |
| Others | 2.3 | 0.4 |
| Forward sales against Thai Baht: | ||
| American dollar | 10.1 | 0.0 |
As of 31 December 2019, the market value of the foreign exchange financial instruments amounted to €(2.2) million compared to €3.4 million as of 31 December 2018.
The inefficient portion of cash flow hedges is zero as of 31 December 2019 and 31 December 2018.
4.18. Trade and other payables (current liabilities)
| 31/12/2019 | 31/12/2018 | |
|---|---|---|
| In million euros | Restated | |
| Trade payables and other operating liabilities | 537.2 | 539.4 |
| Tax and employee-related liabilities | 251.1 | 222.7 |
| Deferred income | 91.8 | 86.9 |
| Payables on the acquisition of assets | 8.8 | 15.1 |
| Other payables | 41.8 | 41.3 |
| Total | 930.7 | 905.4 |
Operating liabilities have a maturity of one year or less.
The €25.3 million increase as of 31 December 2019 is mainly due to scope effects for €19.4 million and currency effect for €13.5 million, partially offset by flows from operating activities for €(5.5) million and reclassifications for €(1.4) million.
Notes to the annual consolidated financial statements
4.19. Net income tax payable (current and non-current liabilities)
| In million euros | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Income tax payable | 47.0 | 43.4 |
| Current tax assets | (35.9) | (19.5) |
| Total | 11.1 | 23.9 |
The €12.8 million decrease in net income tax payable is mainly due to the increase of down payments of current tax for €16.4 million related to performance improvement and to scope effects.
4.20. Financial assets and liabilities by category
| 31/12/2019 | |||||||
|---|---|---|---|---|---|---|---|
| In million euros | Fair value through income statement |
Fair value through other comprehensive income |
Cash flow hedges and NIH |
Amortised cost |
Total net carrying amount |
Fair value |
|
| Financial derivatives (assets) (1) | 1.1 | 0.1 | 1.2 | 1.2 | |||
| Other financial assets | (2) | 0.9 | 79.4 | 80.3 | 80.3 | ||
| Trade and other receivables (non- current) |
(3) | 5.5 | 5.5 | 5.5 | |||
| Trade, miscellaneous and other operating receivables (current) |
(3) | 856.1 | 856.1 | 856.1 | |||
| Cash | 136.0 | 136.0 | 136.0 | ||||
| Cash equivalents | (4) | 13.9 | 13.9 | 13.9 | |||
| Treasury financial assets | (1) | 83.5 | 83.5 | 83.5 | |||
| Total financial assets | 234.4 | 1.0 | 0.0 | 941.0 | 1,176.4 | 1,176.4 | |
| Financial debt | (5) | (1,348.8) | (1,348.8) | (1,370.7) | |||
| Debt on commitments to purchase non-controlling interests |
(2) | (109.4) | (109.4) | (109.4) | |||
| Financial derivatives (liabilities) |
(1) | (3.3) | (0.1) | (3.3) | (3.3) | ||
| Trade and other payables and other operating liabilities (current) |
(3) | (581.7) | (581.7) | (581.7) | |||
| Other payables (non-current) (3) | (19.8) | (19.8) | (19.8) | ||||
| Bank overdrafts | (7.4) | (7.4) | (7.4) | ||||
| Total financial liabilities | (120.1) | (0.1) | 0.0 | (1,950.2) | (2,070.4) | (2,092.3) |
(1) The fair value measurement of these financial assets and liabilities uses valuation techniques that are based on observable market data (Level 2 category in accordance with IFRS 13 (§93a and b) except for the cash held in an escrow account for €38.3 million that is disclosed in the Treasury financial assets line and for which the change in fair value refers to quoted prices in an active market (Level 1 category in accordance with IFRS 13 (§93a and b)).
(2) The fair value measurement of these financial assets and liabilities uses valuation techniques that are based on non-observable market data (Level 3 category in accordance with IFRS 13 (§93a and b)). The main assumption impacting the fair value of debts on commitments to purchase noncontrolling interests is the discount rate, being at 0.4% as of 31 December 2019. A decrease of 40 bps of the discount rate would lead to an increase of €3.5 million of the debt on commitments to purchase non-controlling interests.
(3) Employee and tax-related receivables and payables, down payments, deferred income and prepaid expenses that do not meet the IAS 32 definition of a financial asset or a financial liability are excluded from these items.
(4) The fair value measurement of these financial assets refers to quoted prices in an active market for €4.6 million (Level 1 category in accordance with IFRS 13 (§93a and b)) and uses valuation techniques that are based on observable market data (Level 2 category in accordance with IFRS 13 (§93a and b)) for €9.3 million.
(5) The fair value measurement of these financial liabilities refers to quoted prices in an active market for bonds for which the fair value amounts to €771.9 million (Level 1 category in accordance with IFRS 13 (§93a and b)) and uses valuation techniques that are based on observable market data (Level 2 category in accordance with IFRS 13 (§93a and b)) for €598.8 million.
Notes to the annual consolidated financial statements
| 31/12/2018 Restated | |||||||
|---|---|---|---|---|---|---|---|
| In million euros | Fair value through income statement |
Fair value through other comprehensive income |
Cash flow hedges and NIH |
Amortised cost |
Total net carrying amount |
Fair value |
|
| Financial derivatives (assets) (1) | 4.7 | 0.2 | 4.9 | 4.9 | |||
| Other financial assets | (2) | 0.5 | 105.1 | 105.6 | 105.6 | ||
| Trade and other receivables (non- current) |
(3) | 5.6 | 5.6 | 5.6 | |||
| Trade, miscellaneous and other operating receivables (current) |
(3) | 872.1 | 872.1 | 872.1 | |||
| Cash | 97.8 | 97.8 | 97.8 | ||||
| Cash equivalents | (4) | 14.5 | 14.5 | 14.5 | |||
| Treasury financial assets | (1) | 81.2 | 81.2 | 81.2 | |||
| Total financial assets | 198.2 | 0.7 | 0.0 | 982.8 | 1,181.7 | 1,181.7 | |
| Financial debt | (5) | (1,352.5) | (1,352.5) | (1,368.0) | |||
| Debt on commitments to purchase non-controlling interests |
(2) | (92.4) | (92.4) | (92.4) | |||
| Financial derivatives (liabilities) |
(1) | (1.4) | (0.1) | (1.5) | (1.5) | ||
| Trade and other payables and other operating liabilities (current) |
(3) | (586.8) | (586.8) | (586.8) | |||
| Other payables (non-current) (3) | (12.3) | (12.3) | (12.3) | ||||
| Bank overdrafts | (24.3) | (24.3) | (24.3) | ||||
| Total financial liabilities | (118.1) | (0.1) | 0.0 | (1,951.6) | (2,069.8) | (2,085.3) |
(1) The fair value measurement of these financial assets and liabilities uses valuation techniques that are based on observable market data (Level 2 category in accordance with IFRS 13 (§93a and b) except for the cash held in an escrow account for €36.5 million that is disclosed in the Treasury financial assets line and for which the change in fair value refers to quoted prices in an active market (Level 1 category in accordance with IFRS 13 (§93a and b)).
(2) The fair value measurement of these financial assets and liabilities uses valuation techniques that are based on non-observable market data (Level 3 category in accordance with IFRS 13 (§93a and b)). The main assumption impacting the fair value of debts on commitments to purchase noncontrolling interests is the discount rate, being at 1.5% as of 31 December 2018. A decrease of 50 bps of the discount rate would lead to an increase of €4.4 million of the debt on commitments to purchase non-controlling interests.
(3) Employee and tax-related receivables and payables, down payments, deferred income and prepaid expenses that do not meet the IAS 32 definition of a financial asset or a financial liability are excluded from these items.
(4) The fair value measurement of these financial assets refers to quoted prices in an active market for €0.2 million (Level 1 category in accordance with IFRS 13 (§93a and b)) and uses valuation techniques that are based on observable market data (Level 2 category in accordance with IFRS 13 (§93a and b)) for €14.3 million.
(5) The fair value measurement of these financial liabilities refers to quoted prices in an active market for bonds for which the fair value amounts to €765.5 million (Level 1 category in accordance with IFRS 13 (§93a and b)) and uses valuation techniques that are based on observable market data (Level 2 category in accordance with IFRS 13 (§93a and b)) for €602.5 million.
5. COMMENTS ON THE INCOME STATEMENT
5.1. Revenue
IFRS revenue increased by 9.6% from €3,181.4 million in 2018 to €3,487.6 million in 2019.
The contributions of the three business lines Street Furniture, Transport and Billboard to 2019 IFRS revenue were €1,627.0 million, €1,346.1 million and €514.6 million, respectively, (compared to €1,530.3 million, €1,193.0 million and €458.0 million respectively in 2018).
The IFRS advertising revenue stood at €3,128.9 million in 2019 (versus €2,861.2 million in 2018) and the IFRS nonadvertising revenue totalled €358.7 million in 2019 (versus €320.2 million in 2018).
5.2. Net operating expenses
| 2018 | ||
|---|---|---|
| In million euros | 2019 | Restated (1) |
| Rent and fees Core Business (2) | (497.9) | (424.8) |
| Other net operational expenses | (579.1) | (562.2) |
| Taxes and duties | (7.5) | (6.7) |
| Staff costs | (688.9) | (654.3) |
| Direct operating expenses & Selling, general & administrative expenses (3) | (1,773.5) | (1,648.0) |
| Provision charge net of reversals | 29.7 | 14.2 |
| Depreciation and amortisation net of reversals | (1,289.2) | (1,156.7) |
| Impairment of goodwill | (10.0) | (1.4) |
| Maintenance spare parts | (40.5) | (36.6) |
| Other operating income | 83.4 | 36.6 |
| Other operating expenses | (27.0) | (39.7) |
| Total | (3,027.2) | (2,831.7) |
(1) See Note 1.2 "Change in accounting methods".
(2) Including service contract fees (advertising space contracts provision including substantial substitution right clauses) for €(61,8) million in 2019. (3) Including €(1,222.4) million in "Direct operating expenses" and €(551.2) million in "Selling, general & administrative expenses" in 2019 (compared to
€(1,127.0) million and €(521.0) million in 2018, respectively).
Lease expenses
In 2019, lease expenses broke down as follows:
| Rents and fees | Non-Core | |
|---|---|---|
| In million euros | Core Business | Business rents (1) |
| Variable lease expenses | (389.0) | 0.0 |
| Short-term lease expenses | (26.0) | (5.8) |
| Low-value lease expenses | (21.1) | (6.5) |
| Total | (436.1) | (12.3) |
(1) Included in the line « Other net operational expenses »
Variable expenses are determined based on contractual terms and conditions: rent and fees that fluctuate according to revenue levels are considered as variable expenses.
The sensitivity of variable expenses to changes in revenue is as follows:
Two sensitivity tests were done on variable lease expenses:
- The first considered a 1% rise in revenue on the leases concerned;
- The second considered a 1% fall in revenue on the leases concerned.
These tests were run on the major leases representing 66.9% of the Group's variable lease expenses. The results were as follows:
- A 1% rise in revenue on these leases would increase variable lease expenses by €4.5 million/1.7%,
- A 1% fall in revenue on these leases would reduce variable lease expenses by €4.4 million/1.7%.
In 2018, lease expenses broke down as follows:
| Rents and fees | Non-core | |
|---|---|---|
| In million euros | Core Business | Business rents (1) |
| Variable lease expenses | (380.6) | 0.0 |
| Short-term lease expenses | (24.7) | (6.2) |
| Low-value lease expenses | (19.6) | (6.9) |
| Total | (424.8) | (13.1) |
(1) Included in the line « Other net operational expenses »
Other net operational expenses
This item includes five main cost categories:
- subcontracting costs for certain maintenance operations,
- the cost of services and supplies relating to operations,
- the fees and operating costs, excluding staff costs, of various Group services,
- billboard advertising stamp duties and taxes,
- non-core Business rents on short-term and low-value contracts.
Non-Core Business rents, which amount to €12.3 million in 2019, are fixed charges and are detailed in the above paragraph.
Research and development costs
Research costs and non-capitalised development costs are included in "Other net operational expenses" and in "Staff costs". They amounted to €11.2 million in 2019, compared to €8.5 million in 2018.
Taxes and duties
This item includes taxes and similar charges other than income tax. The principal taxes recorded under this item are property taxes.
Staff costs
This item includes salaries, social security contributions, share-based payments and employee benefits, including furniture installation and maintenance staff, research and development staff, the sales team and administrative staff.
It also covers the expenses associated with profit-sharing and investment plans for French employees and retirement expenses.
| In million euros | 2019 | 2018 |
|---|---|---|
| Compensation and other benefits | (561.5) | (531.4) |
| Social security contributions | (127.2) | (121.9) |
| Share-based payments (1) | (0.2) | (1.0) |
| Total | (688.9) | (654.3) |
(1) Including equity settled share-based payments for €(0.2) million in 2019 compared to €(1.0) million of equity settled share-based payments in 2018.
The Group did not grant any bonus share plans in 2019 or in 2018.
Notes to the annual consolidated financial statements
Breakdown of stock option plans (1):
| 2017 Plan | 2016 Plan | 2015 Plan | 2014 Plan | 2012 Plan | |
|---|---|---|---|---|---|
| Grant date | 13/02/2017 | 17/02/2016 | 16/02/2015 | 17/02/2014 | 21/02/2012 |
| Vesting date | 13/02/2020 | 17/02/2019 | 16/02/2018 | 17/02/2017 | 21/02/2015 |
| Expiry date | 13/02/2024 | 17/02/2023 | 16/02/2022 | 17/02/2021 | 21/02/2019 |
| Number of beneficiaries | 188 | 270 | 173 | 237 | 215 |
| Number of options granted | 344,108 | 866,903 | 546,304 | 780,392 | 1,144,734 |
| Strike price before adjustment (2) | €29.77 | €34.01 | €31.29 | €31.69 | €19.73 |
| Strike price after adjustment (2) | N/A | N/A | €31.12 | €31.51 | €19.62 |
| Repricing - Adjustment of the number of options (2) | N/A | N/A | 3,145 | 3,992 | 2,437 |
| Number of options outstanding at the end of the period | 321,295 | 787,012 | 471,634 | 563,964 | 0 |
(1) The Group did not grant any stock-option plans in 2013, in 2018 and 2019.
(2) Following the simplified public tender offer (OPAS) launched by JCDecaux SA in June 2015 at a unit price of €40, 12,500,000 shares were repurchased on 17 July 2015, and subsequently cancelled. As a result, the number of options previously granted and still outstanding at the date of the OPAS was adjusted by an adjustment coefficient of 1.0056. The exercise price of the options was also adjusted to ensure that the effects of the OPAS on the rights of option holders would be neutral.
The adjustment related to the OPAS had no impact on the IFRS 2 "Share-based payment" charge.
Stock option movements during the period and average strike price by category of options:
| PERIOD | 2019 | Average share price at the date of exercise |
Average strike price |
2018 | Average share price at the date of exercise |
Average strike price |
|---|---|---|---|---|---|---|
| Number of options outstanding at the beginning of the period | 2,298,008 | € 31.47 | 2,497,308 | € 30.98 | ||
| - Options granted during the period | ||||||
| - Options forfeited during the period | 43,689 | € 31.41 | 53,397 | € 32.33 | ||
| - Options exercised during the period | 92,460 | € 26.30 | € 19.62 | 133,649 | € 31.91 | € 22.64 |
| - Options expired during the period | 17,954 | € 19.62 | 12,254 | € 23.36 | ||
| Number of options outstanding at the end of the period | 2,143,905 | € 32.08 | 2,298,008 | € 31.47 | ||
| Number of options exercisable at the end of the period | 2,143,905 | € 32.08 | 2,187,249 | € 31.65 |
The plans were valued using the Black & Scholes model based on the following assumptions:
| Assumptions | 2017 | 2016 | 2015 | 2014 | 2012 |
|---|---|---|---|---|---|
| - Price of underlying at grant date | €30.02 | €34.90 | €31.75 | €31.57 | €20.21 |
| - Estimated volatility | 23.38% | 25.56% | 25.51% | 27.46% | 38.41% |
| - Risk-free interest rate | (0.11)% | (0.24)% | (0.03)% | 0.80% | 1.35% |
| - Estimated option life (in years) | 4.5 | 4.5 | 4.5 | 4.5 | 4.5 |
| - Estimated turnover | 4.70% | 4.70% | 4.70% | 4.70% | 3.33% |
| - Dividend payment rate (1) | 2.21% | 1.77% | 1.77% | 1.42% | 2.16% |
| - Fair value of options (2) | €4.32 | €6.09 | €5.51 | €6.42 | €5.72 |
(1) Consensus of financial analysts on future dividends (source: Bloomberg).
(2) The fair value does not include the impact of turnover.
The option life retained represents the period from the grant date to Management's best estimate of the most likely date of exercise.
As the Group had more historical data for the valuation of the 2012 to 2017 plans, it was able to refine its volatility calculation assumptions. Therefore, the first year of listing was not included in the volatility calculation, as it was considered abnormal due primarily to the sharp movements in share price inherent to the IPO and the effect of 11 September 2001.
Furthermore, based on observed behaviours, the Group considered at the issuance of the plans that the options would be exercised 4.5 years on average after the grant date.
Depreciation, amortisation and provisions net of reversals
Net reversals of provisions increased by €15.5 million and amortisation net of reversals increased by €132.5 million including €68.5 million of right-of-use depreciation and €64.0 million of depreciation of PP&E and intangible assets.
Net reversals of provisions mainly correspond in 2019 to dismantling costs provisions for €23.7 million.
Notes to the annual consolidated financial statements
In 2019, this item included a net depreciation of €(1.0) million following impairment tests, including €(2.0) million of net depreciation on PP&E and intangible assets and €1.0 million of net reversals of provisions for onerous contracts.
In 2018, this item included a net reversal of €9.0 million following impairment tests, including €8.4 million of net reversals of depreciation on property, plant and equipment and €0.6 million of net reversals of provisions for onerous contracts.
Goodwill impairment
As of 31 December 2019, a €(10.0) million goodwill impairment was recorded on the CGU Billboard Rest of the World.
As of 31 December 2018, a €(1.4) million goodwill impairment was recorded on a company in Latin America.
Maintenance spare parts
The item comprises the cost of spare parts for street furniture as part of maintenance operations for the advertising network, excluding glass panel replacements and cleaning products, and inventory impairment losses.
Other operating income and expense
Other operating income and expenses break down as follows:
| 2018 | ||
|---|---|---|
| In million euros | 2019 | Restated (1) |
| Gain on disposals of financial assets and gain on changes in scope | 4.3 | 3.5 |
| Gain on disposals of intangible assets and PP&E | 11.8 | 21.6 |
| Other management income | 4.2 | 10.7 |
| P&L effect following changes on IFRS16 Non Core Business contracts | 0.0 | (0.0) |
| P&L effect following changes on IFRS16 Core Business contracts | 63.1 | 0.8 |
| Other operating income | 83.4 | 36.6 |
| Loss on disposals of financial assets and loss on changes in scope | (2.3) | (7.8) |
| Loss on disposals of intangible assets and PP&E | (2.7) | (1.3) |
| Other management expenses | (21.9) | (30.6) |
| P&L effect following changes on IFRS16 Non Core Business contracts | (0.1) | 0.0 |
| P&L effect following changes on IFRS16 Core Business contracts | 0.0 | 0.0 |
| Other operating expenses | (27.0) | (39.7) |
| Total | 56.4 | (3.0) |
(1) See Note 1.2 "Change in accounting methods".
In 2019, the gains on disposals of financial assets and income from changes in scope for €4.3 million were related, in particular, to the impact of the liquidation of a European company for €3.2 million.
In 2018, the gains on disposals of financial assets and income from changes in scope for €3.5 million were related, in particular, to the impact of the liquidation of a European company for €2.7 million.
In 2019, the P&L impact regarding changes in core business contracts amounted to €63.1 million. These mainly arose from the disappearance of the minimum guarantee or shortening of contract terms.
In 2019, the losses on disposals of financial assets and losses on changes in scope for €(2.3) million mainly concerned the liquidation of a company in the United Kingdom.
In 2018, the losses on disposals of financial assets and losses on changes in scope for €(7.8) million mainly concerned the payment of a guarantee related to the acquisitions for €(7.0) million.
In 2019, other management expenses for €(21.9) million mainly included restructuring costs for €(10.0) million related to the acquisitions and liquidations.
In 2018, other management expenses for €(30.6) million mainly included acquisition costs of €(11.2) million and restructuring costs for €(9.9) million related to the acquisitions.
5.3. Net financial income (loss)
| 2018 | |||
|---|---|---|---|
| In million euros | 2019 | Restated | |
| IFRS16 Interest expense | (152.0) | (152.2) | |
| Interest income | 6.2 | 7.5 | |
| Interest expense | (17.5) | (17.9) | |
| Net interest expense | (11.3) | (10.4) | |
| Amortised cost impact | (1.1) | (1.2) | |
| Cost of net financial debt | (1) | (12.4) | (11.6) |
| Net foreign exchange gains (losses) and hedging costs | (5.6) | (4.4) | |
| Net discounting losses | (16.6) | (7.3) | |
| Bank guarantee costs | (1.8) | (1.8) | |
| Charge to provisions for financial risks | (0.1) | (0.2) | |
| Reversal of provisions for financial risks | 0.1 | 0.1 | |
| Provisions for financial risks - Net charge | (0.0) | (0.1) | |
| Income on the sale of financial investments | 0.0 | 0.1 | |
| Expense on the sale of financial investments | 0.0 | (1.6) | |
| Net income (loss) on the sale of financial investments | 0.0 | (1.5) | |
| Other | 0.1 | (0.2) | |
| Other net financial expenses | (2) | (23.9) | (15.2) |
| Net financial income (loss) excluding IFRS16 | (3)=(1)+(2) | (36.4) | (26.9) |
| Net financial income (loss) | (188.4) | (179.0) | |
| Total financial income | 6.4 | 7.7 | |
| Total financial expenses | (194.8) | (186.7) |
The €9.4 million decrease in net financial income in 2019 is mainly due to an increase in discounting charges.
5.4. Income tax
Breakdown between deferred and current taxes
| 2018 | ||
|---|---|---|
| In million euros | 2019 | Restated |
| Current tax | (87.6) | (86.9) |
| Local tax ("CVAE") | (6.3) | (5.7) |
| Other | (81.3) | (81.2) |
| Deferred taxes | (4.5) | 29.1 |
| Local tax ("CVAE") | ||
| Other | (4.5) | 29.1 |
| Total | (92.1) | (57.8) |
The effective tax rate before impairment of goodwill and the share of net profit of companies under the equity method was 32.6% in 2019 compared to 33.5% in 2018. Excluding the discounting and revaluation impacts of debts on commitments to purchase non-controlling interests, the effective tax rate was 31.3% in 2019 compared to 33.2% in 2018.
Breakdown of deferred tax
| 2019 | 2018 | |
|---|---|---|
| In million euros | Restated | |
| Intangible assets, PP&E and provisions for onerous contracts | 6.3 | 5.6 |
| Tax losses carried forward | (4.3) | 12.5 |
| Provisions for dismantling costs | (0.2) | 1.0 |
| Provisions for retirement and other benefits | (1.9) | (0.6) |
| IFRS 16 leases | (9.7) | 10.8 |
| Other | 5.2 | (0.3) |
| Total | (4.5) | 29.1 |
Tax proof
| 2018 | ||
|---|---|---|
| In million euros | 2019 | Restated |
| Consolidated net income | 282.2 | 212.5 |
| Income tax charge | (92.1) | (57.8) |
| Consolidated income before tax | 374.2 | 270.3 |
| Share of net profit of companies under the equity method | (102.0) | (99.5) |
| Impairment of goodwill | 10.0 | 1.4 |
| Taxable dividends received from subsidiaries | 8.0 | 4.7 |
| Other non-taxable income | (45.8) | (37.7) |
| Other non-deductible expenses | 71.4 | 73.4 |
| Net income before tax subject to the standard tax rate | 315.8 | 212.6 |
| Weighted Group tax rate (1) | 23.44% | 22.35% |
| Theoretical tax charge | (74.0) | (47.5) |
| Deferred tax on unrecognised tax losses | (15.8) | (22.4) |
| Capitalisation and use of unrecognised prior year tax losses carried forward | 5.4 | 13.4 |
| Other deferred tax (temporary differences and other restatements) | 2.1 | 9.6 |
| Tax credits | 1.9 | 3.8 |
| Withholding tax | (5.0) | (2.2) |
| Tax on dividends | (0.7) | (1.2) |
| Other | 0.2 | (5.6) |
| Income tax calculated | (85.8) | (52.2) |
| Net Local tax ("CVAE") | (6.3) | (5.7) |
| Income tax recorded | (92.1) | (57.8) |
(1) National average tax rates weighted by taxable income.
5.5. Share of net profit of companies under the equity method
In 2019, the share of net profit of associates totalled €18.9 million compared to €18.0 million in 2018, and the share of net profit of joint ventures under the equity method totalled €83.1 million in 2019 compared to €81.5 million in 2018. An impairment reversal on joint ventures has been recorded in 2019 for €8.7 million.
The information related to joint ventures and to associates is described in Note 10 "Information on joint ventures" and in Note 11 "Information on associates".
5.6. Headcount
As of 31 December 2019, the Group had 12,076 employees, compared to 11,833 employees as of 31 December 2018. These figures do not include the share of employees of joint ventures which represents 1,129 employees and 1,201 employees, respectively, as of 31 December 2019 and 31 December 2018.
The breakdown of employees for the years 2019 and 2018 is as follows:
| 2019 | 2018 | |
|---|---|---|
| Technical | 6,251 | 6,074 |
| Sales and marketing | 2,936 | 2,918 |
| IT and administration | 2,157 | 2,122 |
| Contract business relations | 548 | 545 |
| Research and development | 184 | 174 |
| Total | 12,076 | 11,833 |
The breakdown of employees of joint ventures for the years 2019 and 2018 is as follows:
Notes to the annual consolidated financial statements
| 2019 | 2018 | |
|---|---|---|
| Technical | 492 | 545 |
| Sales and marketing | 370 | 373 |
| IT and administration | 232 | 247 |
| Contract business relations | 35 | 36 |
| Research and development | 0 | 0 |
| Total | 1,129 | 1,201 |
5.7. Number of shares for the earnings per share (EPS)/diluted EPS calculation
| 2019 | 2018 | |
|---|---|---|
| Weighted average number of shares for the purposes of earnings per share | 212,895,694 | 212,765,223 |
| Weighted average number of stock options potentially convertible | 2,167,020 | 2,357,804 |
| Weighted average number of stock options which would not be exercised at strike price (1) | (2,143,905) | (2,314,076) |
| Weighted average number of shares for the purposes of diluted earnings per share | 212,918,809 | 212,808,951 |
(1) This average number reflects the number of stock options which would not be exercised due to a strike price granted greater than the market price.
Earnings per share are calculated based on the weighted average number of outstanding shares. The calculation of diluted earnings per share takes into account the dilutive effect from the exercise of stock options.
5.8. Auditors' fees
In 2019, the amount of the audit fees was as follows:
| In thousand euros | EY et Autres | KPMG Audit |
|---|---|---|
| Audit of statutory and consolidated accounts and limited audit | 2,252 | 2,113 |
| JCDecaux SA and its french subsidiaries (1) | 806 | 738 |
| Others controlled entities (1) | 1,447 | 1,375 |
| Non-audit services (2) | 277 | 137 |
| JCDecaux SA and its french subsidiaries (1) | 56 | 29 |
| Others controlled entities (1) | 221 | 108 |
| Total | 2,529 | 2,250 |
(1) The controlled entities taken into account are fully consolidated subsidiaries.
(2) The services provided cover the non-audit services required by the legal and regulatory texts as well as the ones requested by the entity. The targeted services concern the ones falling within the scope of the services usually returned in the extension of the statutory audit mission (drafting of particular attestations, carrying out of agreed procedures, acquisition due diligences).
In 2018, the amount of the audit fees was as follows:
| In thousand euros | EY et Autres | KPMG Audit |
|---|---|---|
| Audit of statutory and consolidated accounts and limited audit | 1,775 | 1,604 |
| JCDecaux SA and its french subsidiaries (1) | 512 | 441 |
| Others controlled entities (1) | 1,263 | 1,163 |
| Non audit services (2) | 204 | 162 |
| JCDecaux SA and its french subsidiaries (1) | 127 | 63 |
| Others controlled entities (1) | 77 | 99 |
| Total | 1,979 | 1,766 |
(1) The controlled entities taken into account are fully consolidated subsidiaries.
(2) The services provided cover the non-audit services required by the legal and regulatory texts as well as the ones requested by the entity. The targeted services concern the ones falling within the scope of the services usually returned in the extension of the statutory audit mission (drafting of particular attestations, carrying out of agreed procedures, acquisition due diligences).
6. COMMENTS ON THE STATEMENT OF CASH FLOWS
6.1. Net cash flows from operating activities
In 2019, net cash flows from operating activities for €1,499.4 million comprised:
- operating cash flows generated by EBIT and other financial income and expenses, adjusted for non-cash items, for a total of €1,760.5 million,
- a change in the working capital of €6.2 million,
- and the payment of IFRS16 lease interest, other net financial interest and tax for €(154.7) million, €(11.9) million and €(100.6) million respectively.
In 2018, net cash flows from operating activities of €1,241.1 million included the operating cash flows generated by EBIT and other financial income and expenses, adjusted for non-cash items, for a total of €1,568.6 million, the change in the working capital of €(104.3) million, the payment of IFRS16 lease interest of €(149.5) million, the payment of other net financial interest of €(20.6) million and the payment of tax for €(53.1) million.
6.2. Net cash flows from investing activities
In 2019, net cash flows from investing activities for €(347.3) million comprised:
- cash payments on acquisitions of intangible assets and PP&E for €(378.9) million (including €(0.1) million of change in payables and receivables on intangible assets and PP&E),
- cash receipts on proceeds on disposals of intangible assets and PP&E for €18.6 million,
- cash payments on acquisitions of long-term investments net of cash receipts and net of cash acquired and sold for a total of €(14.0) million (including €7.9 million of net cash position acquired and sold). This amount mainly comprised the takeover of the group Publiroute (Belgium). The amount related to takeovers represented €(14.7) million including €7.9 million of net cash acquired,
- disposals of other financial assets net of acquisitions for a total of €27.0 million. This amount mainly relates to the release of an escrow account on completion of the acquisition of the group Publiroute (Belgium).
In 2018, net cash flows from investing activities for €(966.0) million included the cash payments on acquisitions of intangible assets and PP&E net of cash receipts for a total of €(272.1) million, cash payments on acquisitions of longterm investments net of cash receipts and net of cash acquired and sold for €(669.1) million (including a €2.7 million change in payables and receivables on financial investments and €7.7 million of net cash acquired and sold) and €(24.8) million of acquisitions of other financial assets net of disposals.
6.3. Net cash flows from financing activities
In 2019, net cash flows from financing activities for €(1,082.8) million comprised:
- repayments of lease liabilities for €(949.5) million,
- net cash flows on borrowings of the controlled entities for €(3.9) million,
- dividends paid to the JCDecaux SA's shareholders for €(123.4) million and the payment of dividends by controlled companies of the Group to their minority shareholders for €(12.2) million,
- disposals of treasury financial assets for €(1.1) million,
- cash receipts on disposals of non-controlling interests net of acquisitions for €5.6 million,
- capital increase for €2.2 million,
- net treasury share purchases for €(0.5) million.
In 2018, net cash flows from financing activities amounted to €(895.8) million, and concerned repayments of lease liabilities for €(849.1) million, payment of dividends for €(135.7) million, cash payments on acquisitions of non-controlling interests for €(15.3) million, disposals of treasury financial assets for €199.0 million, net cash flows on borrowings for €(98.7) million and capital increases net of decreases for €4.0 million.
Notes to the annual consolidated financial statements
6.4. Reconciliation between the cash flows and the change in gross financial debt
| In million euros | 31/12/2018 Restated |
Repayment of long term borrow ings |
Increase in long term borrow ings |
Translation differences, consolidation scope variations, net impact of IFRS9 and accrued interest variations |
31/12/2019 |
|---|---|---|---|---|---|
| Bonds (amortised cost included) | 1,045.6 | 0.1 | 1,045.7 | ||
| Commercial Paper (NEU/CP) | 220.0 | (40.0) | 180.0 | ||
| Bank borrow ings |
46.7 | (41.6) | 68.7 | (0.1) | 73.7 |
| Miscellaneous borrow ings |
35.4 | (1.9) | 10.9 | 0.1 | 44.5 |
| Accrued interest | 4.8 | 0.0 | 4.8 | ||
| Gross financial debt | 1,352.5 | (83.5) | 79.6 | 0.2 | 1,348.8 |
6.5. Non-cash transactions
The increase in right-of-use and lease liabilities related to lease contracts amounted to €709.7 million in 2019.
Non-cash transactions related to the acquisitions of long-term investments were recognised in 2019.
7. FINANCIAL RISKS
As a result of its business, the Group may be more or less exposed to varying degrees of financial risks (especially liquidity and financing risk, interest rate risk, foreign exchange rate risk and risks related to financial management, in particular, counterparty risk). The Group's objective is to minimise such risks by choosing appropriate financial policies. However, the Group may need to manage residual positions. This strategy is monitored and managed centrally, by a dedicated team within the Group Finance Department. Risk management policies and hedging strategies are approved by Group management.
7.1. Risks relating to the business and risks management policies
Liquidity and financing risk
The table below presents the contractual cash flows (interest cash-flows and contractual repayments) related to financial liabilities and financial instruments:
| In million euros | Carrying amount |
Contractual cash flows (*) |
2020 | 2021 | 2022 | 2023 | > 2023 |
|---|---|---|---|---|---|---|---|
| Bonds | 1,048.1 | 1,080.0 | 307.5 | 7.5 | 7.5 | 757.5 | 0.0 |
| NEU CP (Commercial Paper) | 180.0 | 180.0 | 180.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Bank borrowings at floating rate | 67.9 | 70.4 | 68.5 | 0.5 | 1.4 | 0.0 | 0.0 |
| Bank borrowings at fixed rate | 3.4 | 3.5 | 3.5 | 0.0 | 0.0 | 0.0 | 0.0 |
| Miscelleanous borrowings | 44.5 | 45.4 | 41.6 | 0.2 | 0.2 | 3.4 | 0.0 |
| Accrued interest | 4.8 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Bank overdrafts | 7.4 | 7.4 | 7.4 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total financial liabilities excluding derivatives | 1,356.1 | 1,386.8 | 608.5 | 8.2 | 9.1 | 760.9 | 0.0 |
| Foreign exchange hedges | (2.2) | (2.2) | (2.4) | 0.2 | 0.0 | 0.0 | 0.0 |
| Total financial instruments (**) | (2.2) | (2.2) | (2.4) | 0.2 | 0.0 | 0.0 | 0.0 |
For revolving debt, the nearest maturity is indicated.
(*) The interest amounts are included in the contractual cash flows in each type of borrowing.
(**) A negative amount represents a cash flow to be paid.
The Group generates enough operating cash flows to self-finance its organic growth. In the Group's opinion, external growth opportunities could lead it to temporarily increase this net debt.
The Group's financing strategy consists of:
- centralising financing at the parent company level JCDecaux SA. Subsidiaries are therefore primarily financed through direct or indirect loans granted by JCDecaux SA to its subsidiaries. However, the Group may use external financing for certain subsidiaries, (i) depending on the tax or currency or regulatory environment; (ii) for subsidiaries that are not wholly owned by the Group; or (iii) for historical reasons (financing already in place when the subsidiary joined the Group),
- having financing resources available that (i) are diversified; (ii) have a term consistent with the maturity of its assets and (iii) are flexible, in order to cover the Group's growth and the investment and business cycles,
- having permanent access to a liquidity reserve such as committed credit facilities,
- minimising the risk of renewal of financing sources, by staggering instalments,
- optimising financing margins, through early renewal of loans that are approaching maturity, or by re-financing certain financing sources when market conditions are favourable,
- optimising the cost of net debt by recycling excess cash generated by different Group entities as much as possible, in particular by repatriating the cash to JCDecaux SA through loans or dividend payments.
JCDecaux SA is rated "Baa2" by Moody's and "BBB" by Standard and Poor's (Moody's last rating dated 9 September 2019, and that of Standard and Poor's 5 September 2018), with a stable outlook for both ratings.
As of 31 December 2019, the net financial debt (excluding debt on commitments to purchase non-controlling interests) was €1,125.0 million compared to €1,179.9 million as of 31 December 2018.
JCDecaux SA carries 93% of Group financial debt which has an average maturity of approximately 2.3 years.
Notes to the annual consolidated financial statements
As of 31 December 2019, the Group has €233.3 million of cash, cash equivalents and treasury financial assets (see Note 4.10 "Managed Cash") and €844.5 million in unused committed credit facilities.
JCDecaux SA financing sources are committed, but some of them require compliance with a ratio if the credit rating goes below Baa3 (Moody's) or BBB (Standard and Poor's), for which the calculation is based on the consolidated financial statements. The nature of the ratio is described in Note 4.14 "Financial debt".
The Group holds cash in some countries from which the funds cannot be immediately repatriated, mainly because of regulatory restrictions. Nevertheless, the Group receives dividends on a regular basis from most of its subsidiaries located in these countries, and the cash is used for local purposes.
Interest rate risk
By its debt, the Group is exposed to interest rate fluctuations. Given the high correlation between the advertising market and the level of general economic activity of the countries where the Group operates, the Group's policy is to secure primarily floating-rate financing except when the interest rates are considered particularly low. The split between fixed rate and floating rate is described in Note 4.14 "Financial debt".
The following table breaks down financial assets and liabilities by interest rate maturity as of 31 December 2019:
| 31/12/2019 | |||||
|---|---|---|---|---|---|
| > 1 year | |||||
| In million euros | ≤ 1 year | & ≤ 5 years | > 5 years | Total | |
| JCDecaux SA borrowings | (512.9) | (750.0) | (1,262.9) | ||
| Other borrowings | (86.9) | (3.2) | (90.1) | ||
| Bank overdrafts | (7.4) | (7.4) | |||
| Financial liabilities | (1) | (607.2) | (753.2) | 0.0 | (1,360.4) |
| Cash and cash equivalents | 149.8 | 149.8 | |||
| Treasury financial assets | 83.5 | 83.5 | |||
| Other financial assets (excluding financial investments) | 79.4 | 79.4 | |||
| Financial assets | (2) | 312.7 | 0.0 | 0.0 | 312.7 |
| Net position | (3)=(1)+(2) | (294.5) | (753.2) | 0.0 | (1,047.7) |
For fixed-rate assets and liabilities, the maturity indicated is that of the asset and the liability. The interest rates on floating-rate assets and liabilities are adjusted every one, three or six months. The maturity indicated is therefore less than one year regardless of the maturity date.
As of 31 December 2019, 70% of the Group's total economic financial debt, all currencies considered, was at fixed rate.
Foreign exchange risk
In 2019, net income generated in currencies other than the euro accounted for 64.3% of the Group's consolidated net income.
Despite its presence in more than 80 countries, the JCDecaux Group is relatively immune to currency variations in terms of cash flows, as subsidiaries in each country do business solely in their own country and inter-company services and purchases are relatively insignificant.
However, as the Group presentation currency is the Euro, the Group's consolidated financial statements are affected by the conversion of financial statements denominated in local currencies into euros.
Based on 2019 actual data, the table below details the Group's consolidated net income and reserves exposure to a (10)% change in the foreign exchange rates of each of the most represented currencies in the Group which are the Chinese yuan, the British pound sterling, the Swiss franc, the American dollar and the Australian dollar:
| Chinese yuan |
British sterling pound |
Swiss franc | American dollar |
Australian dollar |
|
|---|---|---|---|---|---|
| Share of the currencies in the consolidated net income | 21.8% | 5.0% | 3.6% | 0.5% | (3.8%) |
| Impact on consolidated income (1) | (2.2%) | (0.5%) | (0.4%) | (0.1%) | (0.4%) |
| Impact on consolidated reserves | (0.6%) | (0.9%) | (0.1%) | 0.8% | 2.6% |
(1) The Saudi Arabian riyal has a significant impact on the Group's consolidated net income. A 10% drop in the exchange rate would reduce consolidated net income by 1.4%.
As of 31 December 2019, the Group mainly holds foreign exchange currency hedges on financial transactions. As part of the application of its centralization of funding policy, the Group mainly implemented short-term foreign exchange currency swaps to hedge intercompany loans and borrowings transactions. The Group can decide not to hedge some of the foreign exchange risks generated by inter-company transactions when hedging arrangements are (i) too costly, (ii) not available, or (iii) when loan amounts are too small.
As of 31 December 2019, the Group considers that its earnings and financial position would not be materially affected by currency fluctuations.
Notes to the annual consolidated financial statements
Management of cash and treasury financial assets
As of 31 December 2019, the Group has €233.3 million of cash, cash equivalents and treasury financial assets, which includes €149.8 million of cash and cash equivalents (including €13.9 million in cash equivalents) and €83.5 million of treasury financial assets. €11.2 million of the total of cash and cash equivalents is invested in guarantees.
Management of equity and gearing ratio
The Group is not subject to any external requirements in terms of management of its equity.
7.2. Risks related to financial management
Risks related to interest rate and foreign exchange financial instruments
The Group solely uses financial instruments to hedge foreign exchange risk.
Risks related to credit rating
JCDecaux SA is rated "Baa2" by Moody's and "BBB" by Standard & Poor's as of the date of publication of these Notes, with a stable outlook for both ratings.
The €750 million bond issued in June 2016 and the €300 million bond issued in October 2018 both include in their terms and conditions a change of control clause giving bond holders the possibility to request early repayment in the event of a change of control, when accompanied by a downgrade of the credit rating to speculative grade or a credit rating exit. The Group's other primary financing sources (financing raised by the parent company), as well as the main hedging arrangements, are not subject to early termination in the event of a downgrade of the Group's credit rating.
Bank counterparty risk
Group counterparty risk relates to the investment of the Group's excess cash with banks and to other financial transactions mainly involving JCDecaux SA (via unused committed credit facilities and hedging commitments). The Group's policy is to minimise this risk by (i) reducing excess cash within the Group by centralising the subsidiaries' available cash at JCDecaux SA level as much as possible, (ii) obtaining prior authorisation from the Group's Finance Department before opening bank accounts, (iii) selecting banks in which JCDecaux SA and its subsidiaries can make deposits (iv) and monitoring this counterparty risk on a regular basis.
Customer counterparty risk
The counterparty risk in respect of trade receivables is covered by the necessary provisions if needed. The net book value of the trade receivables is detailed in Note 4.9 "Trade and other receivables". The Group maintains a low level of dependence towards any particular client, as no single client represents more than 2.8% of the Group's revenue.
Risk related to securities and term deposits
In order to generate interest on its excess cash position, the Group mainly subscribes short-term investments and makes short-term deposits. The investments consist of money market securities. These instruments are invested on a shortterm basis, earn interest at money market benchmark rates, are liquid, and involve only limited counterparty risk. The Group's policy is not to own marketable shares or securities other than money market securities and treasury shares. Therefore, the Group considers its risk exposure arising from marketable shares and securities to be very low.
8. COMMENTS ON OFF-BALANCE SHEET COMMITMENTS
8.1. Commitments on securities and other commitments
| In million euros | 31/12/2019 | 31/12/2018 |
|---|---|---|
| Commitments given (1) | ||
| Business guarantees | 551.7 | 482.6 |
| Other guarantees | 37.7 | 22.4 |
| Pledges, mortgages and collateral | 8.2 | 9.9 |
| Commitments on securities (put options granted) | 0.5 | 0.3 |
| Total | 598.1 | 515.2 |
| Commitments received | ||
| Securities, endorsements and other guarantees | 0.0 | 0.0 |
| Commitments on securities (call options received) | 5.5 | 5.3 |
| Credit facilities | 844.5 | 863.2 |
| Total | 850.0 | 868.5 |
(1) Excluding the commitments under leases signed but not started and the commitments in advertising space contracts provision with substance of the substitution rights.
"Business guarantees" are granted mainly by JCDecaux SA and JCDecaux North America Inc. As such, JCDecaux SA and JCDecaux North America Inc. guarantee the performance of contracts entered into by subsidiaries, either directly to third parties, or by counter-guaranteeing guarantees granted by banks or insurance companies.
"Other guarantees" include securities, endorsements and other guarantees such as (i) guarantees covering lease payments, (ii) JCDecaux SA's counter-guarantees of credit facilities granted by banks, and (iii) other commitments such as guarantees covering payments to suppliers.
"Pledges, mortgages and collateral" mainly comprise cash amounts given in guarantee, and the mortgage of land and buildings in Germany.
"Commitments on securities" are granted and received primarily as part of external growth transactions.
Moreover, under certain advertising contracts, JCDecaux North America Inc., directly and indirectly through its subsidiaries, and its joint venture partners have granted, under the relevant agreements, reciprocal put/call options in connection with their respective ownership in their shared companies.
Lastly, as part of agreements between shareholders, JCDecaux SA can grant, or receive, calls in the event either party's contractual clauses are breached. Under partnership agreements, the Group and its partners benefit from pre-emptive rights, and sometimes rights to purchase, tag along or drag along, which the Group does not consider as commitments given or received. Moreover, the Group does not mention the commitments which are subject to exercise conditions which limit their probability of occurring.
Credit facilities include the committed revolving credit facility secured by JCDecaux SA for €825.0 million and the committed credit facilities granted to subsidiaries for €19.5 million.
8.2. Commitments to purchase assets
Commitments to purchase property, plant and equipment and intangible assets totalled €441.4 million as of 31 December 2019 compared to €418.6 million as of 31 December 2018.
8.3. Commitments under leases signed but not started
At 31 December 2019 the commitments on leases signed but not started were as follows:
| In million euros | Total |
|---|---|
| Lease advertising space | 156.6 |
| Lease property | 31.1 |
| Lease vehicles | 0.0 |
| Other lease | 0.0 |
| Total | 187.8 |
These commitments are recognised as a liability under IFRS 16 at the start date of the lease.
Notes to the annual consolidated financial statements
8.4. Commitments in advertising space contracts provision with substantive substitution rights
In Street Furniture and Transport activities, some contracts include a substantial substitution right on advertising spaces on contractor hand. As such, these contracts are considered as service contracts excluded from IFRS 16 application scope.
The amount of commitments given on such type of contracts and for them beginning after the 1st January 2019, totalled €572.6 million as of 31 December 2019 (amounts are neither inflated nor discounted).
9. RELATED PARTIES
9.1. Definitions
The following four categories are considered related party transactions:
- the portion of transactions with jointly-controlled companies and with associates not eliminated in the consolidated financial statements,
- transactions carried out between JCDecaux SA and its parent JCDecaux Holding,
- transactions carried out with the significant non-controlling interests,
- transactions with key management personnel and companies held by such personnel and over which they exercise a control.
9.2. Details regarding related party transactions
| In million euros | 2019 | 2018 Restated |
||||||
|---|---|---|---|---|---|---|---|---|
| Companies under the EM (1) |
Parent Companies (2) |
Other | Total | Companies under the EM (1) |
Parent Companies (2) |
Other | Total | |
| Statement of financial position | ||||||||
| Assets | ||||||||
| Right-of-use | 0.4 | 36.8 | 37.2 | 0.8 | 41.1 | 41.9 | ||
| Loans and loans to participating interests (*) |
34.2 | 34.2 | 36.5 | 36.5 | ||||
| Other receivables | 30.1 | 0.2 | 2.2 | 32.5 | 32.4 | 0.3 | 2.4 | 35.1 |
| Total Assets | 64.3 | 0.6 | 39.0 | 103.9 | 68.9 | 1.1 | 43.5 | 113.5 |
| Liabilities | ||||||||
| Financial debts and debt on commitments to purchase non |
||||||||
| controlling interests (3) | 39.3 | 111.1 | 150.4 | 29.4 | 94.0 | 123.4 | ||
| Other liabilities | 10.4 | 6.9 | 45.4 | 62.7 | 6.8 | 6.9 | 54.3 | 68.0 |
| Total Liabilities | 49.7 | 118.0 | 45.4 | 213.1 | 36.2 | 100.9 | 54.3 | 191.4 |
| Income Statement | ||||||||
| EBIT | ||||||||
| Income | 50.6 | 0.1 | 2.9 | 53.6 | 49.9 | 0.1 | 3.7 | 53.7 |
| Expenses (6) | (9.8) | (5.8) | (11.6) | (27.2) | (9.5) | (5.8) | (11.2) | (26.5) |
| EBIT | 40.8 | (5.7) | (8.7) | 26.4 | 40.4 | (5.7) | (7.5) | 27.2 |
| Net financial income (loss) | ||||||||
| Income | 2.3 | 2.3 | 2.3 | 2.3 | ||||
| Expenses (4)(5) | (0.4) | (12.1) | (1.2) | (13.7) | (0.7) | (2.0) | (1.8) | (4.5) |
| Net financial income (loss) | 1.9 | (12.1) | (1.2) | (11.4) | 1.6 | (2.0) | (1.8) | (2.2) |
(*) Including accrued interest.
(1) Portion of transactions with joint ventures and with associates not eliminated.
(2) Transactions carried out between JCDecaux SA and its parent JCDecaux Holding and transactions carried out with the significant non-controlling
interests. (3) The debt on commitments to purchase non-controlling interests amounted to €109.4 million as of 31 December 2019 compared to €92.4 million as of 31 December 2018.
(4) Including €(12.0) million in 2019 and €(1.8) million in 2018 of net expenses of revaluation and discounting on debt on commitments to purchase noncontrolling interests.
(5) Including €(1.2) million in 2019 and €(1.8) million in 2018 of IFRS16 interest expense with related parties.
(6) Including €(10.3) million in 2019 and €(9.9) million in 2018 of amortisation depreciation of right-of-use with related parties.
The off-balance sheet commitments from leases with related parties are now, in accordance with IFRS 16, recorded as liabilities in the statement of financial position at their present value. This lease liability with related parties is recognised under "Other liabilities" in the table above and represented €44.6 million as of 31 December 2019 compared to €50.2 million as of 31 December 2018.
As at 31 December 2019, the commitments given as business guarantees with associates totalled €23.1 million.
Notes to the annual consolidated financial statements
9.3. Management compensation
Compensation owed to members of the Executive Board for the years 2019 and 2018 breaks down as follows:
| In million euros | 2019 | 2018 |
|---|---|---|
| Short-term benefits | 7.9 | 7.6 |
| Fringe benefits | 0.3 | 0.3 |
| Directors'fees | 0.0 | 0.0 |
| Life insurance/special pension | 0.1 | 0.1 |
| Share-based payments | 0.0 | 0.0 |
| Total (*) | 8.3 | 8.0 |
(*) Compensations received from associates are excluded.
In addition, two Executive Board members have been entitled to receive a non-competition indemnity, potentially paid during a two year period and representing 33% of their fixed and variable compensation and calculated on the average of the last twelve months preceding the date of termination of contractual relations, if the members' employment contract were to be terminated.
Post-employment benefits recognised in liabilities in the statement of financial position amounted to €4.5 million as of 31 December 2019, compared to €3.5 million as of 31 December 2018.
Directors' fees owed to members of the Supervisory Board amounted to €0.4 million for the year 2019.
10. INFORMATION ON THE JOINT VENTURES
The following information related to the joint ventures is provided by operating segment in application of IFRS 12 "Disclosure of Interests in Other Entities".
10.1. Income statement items
10.1.1. For the year 2019
10.1.1.1. Net income
The 2019 net income of the joint ventures and reconciliation with the income statement of the consolidated financial statements for 2019 are as follows:
| Street | ||||
|---|---|---|---|---|
| In million euros | Furniture | Transport | Billboard | Total |
| Net Income (1) | 27.7 | 162.2 | (17.8) | 172.1 |
| Impact of application of the holding percentage | (13.6) | (97.7) | 13.5 | (97.7) |
| Impairment of joint ventures | 5.0 | 3.7 | 8.7 | |
| Share of net profit of joint ventures | 19.1 | 64.5 | (0.5) | 83.1 |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.1.1.2. Revenue
The 2019 revenue for the joint ventures and reconciliation with their contribution in the consolidated adjusted revenue for 2019 are as follows:
| In million euros | Revenue |
|---|---|
| Street Furniture | 126.3 |
| Transport | 587.1 |
| Billboard | 161.7 |
| Total (1) | 875.1 |
| Impact of application of the holding percentage | (457.2) |
| Elimination of the transactions inter-activities & with controlled entities | (1.6) |
| Contribution of the joint ventures in the Consolidated adjusted Revenue | 416.3 |
(1) IFRS data on a 100% basis before elimination of transactions made between the different activities and before elimination of transactions made with the controlled entities.
10.1.1.3. Other items of the income statement
The other items of the income statement for 2019 that are characteristic of the joint ventures are as follows (1):
Notes to the annual consolidated financial statements
| In million euros | Street Furniture | Transport | Billboard |
|---|---|---|---|
| Depreciation, amortisation and provisions (net) | (22.2) | (103.8) | (52.8) |
| Cost of net financial debt | (0.1) | 3.1 | (16.7) |
| Income tax | (7.6) | (56.4) | (1.0) |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.1.2. For the year 2018 (Restated)
10.1.2.1. Net income
The 2018 net income restated of the joint ventures and reconciliation with the income statement of the consolidated financial statements for 2018 restated are as follows:
| Street | ||||
|---|---|---|---|---|
| In million euros | Furniture | Transport | Billboard | Total |
| Net Income (1) | 32.1 | 150.7 | (0.2) | 182.7 |
| Impact of application of the holding percentage | (15.6) | (86.0) | 0.5 | (101.2) |
| Impairment of joint ventures | 0.0 | |||
| Share of net profit of joint ventures | 16.6 | 64.7 | 0.2 | 81.5 |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.1.2.2. Revenue
The 2018 revenue of the joint ventures and reconciliation with their contribution in the consolidated adjusted revenue for 2018 are as follows:
| In million euros | Revenue |
|---|---|
| Street Furniture | 116.2 |
| Transport | 616.4 |
| Billboard | 182.9 |
| Total (1) | 915.5 |
| Impact of application of the holding percentage | (464.2) |
| Elimination of the transactions inter-activities & with controlled entities | (1.6) |
| Contribution of the joint ventures in the Consolidated adjusted Revenue | 449.7 |
(1) IFRS data on a 100% basis before elimination of transactions made between the different activities and before elimination of transactions made with the controlled entities.
10.1.2.3. Other items of the income statement
The other items of the income statement for 2018 restated that are characteristic of the joint ventures are as follows (1):
| In million euros | Street Furniture | Transport | Billboard |
|---|---|---|---|
| Depreciation, amortisation and provisions (net) | (18.4) | (112.0) | (52.1) |
| Cost of net financial debt | 0.0 | 2.6 | (16.8) |
| Income tax | (5.2) | (52.0) | (4.4) |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.2. Statement of other comprehensive income
10.2.1. For the year 2019
Other 2019 comprehensive income for the joint ventures and reconciliation with the statement of other comprehensive income of the consolidated financial statements for 2019 are as follows:
| In million euros | Street Furniture | Transport | Billboard | Total |
|---|---|---|---|---|
| Other comprehensive income (1) | 0.0 | (0.6) | (4.8) | (5.4) |
| Impact of application of the holding percentage | 0.0 | 0.4 | 3.8 | 4.2 |
| Translation reserve adjustments on impairment of joint ventures | 0.0 | 0.0 | (1.1) | (1.1) |
| Translation reserve adjustments on goodwill & elimination of shares | 0.1 | 0.6 | 6.2 | 6.9 |
| Share of other comprehensive income of the joint ventures | 0.1 | 0.4 | 4.1 | 4.6 |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.2.2. For the year 2018 (Restated)
Other 2018 restated comprehensive income for the joint ventures and reconciliation with the statement of other comprehensive income of the consolidated financial statements for 2018 restated are as follows:
| In million euros | Street Furniture | Transport | Billboard | Total |
|---|---|---|---|---|
| Other comprehensive income (1) | 2.1 | 1.5 | 4.7 | 8.3 |
| Impact of application of the holding percentage | (1.0) | (0.9) | (3.6) | (5.5) |
| Translation reserve adjustments on impairment of joint ventures | 0.0 | 0.0 | (0.3) | (0.3) |
| Translation reserve adjustments on goodwill & elimination of shares | 0.3 | (0.6) | (6.3) | (6.6) |
| Share of other comprehensive income of the joint ventures | 1.3 | 0.0 | (5.5) | (4.1) |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.3. Statement of financial position items
10.3.1. As of 31 December 2019
10.3.1.1 Net assets
Net assets (1) as of 31 December 2019 of the joint ventures and reconciliation with the statement of financial position of the consolidated financial statements as of 31 December 2019 are as follows:
| In million euros | Street Furniture | Transport | Billboard | Total |
|---|---|---|---|---|
| Non-current assets | 115.4 | 265.4 | 335.8 | 716.6 |
| Current assets | 102.9 | 361.3 | 53.1 | 517.3 |
| Non-current liabilities | (49.6) | (130.4) | (258.4) | (438.4) |
| Current liabilities | (106.0) | (260.7) | (211.8) | (578.5) |
| Net assets (1) | 62.6 | 235.6 | (81.3) | 216.9 |
| Impact of application of the holding percentage | (29.2) | (118.9) | 56.0 | (92.1) |
| Impairment of joint ventures | (9.4) | (9.1) | (18.5) | |
| Goodwill and elimination of shares held by joint ventures | 12.7 | 69.6 | 54.5 | 136.7 |
| Negative Net Equity limitation | 23.7 | 23.7 | ||
| Investments under the equity method | 36.8 | 186.3 | 43.8 | 266.9 |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.3.1.2. Other items of the statement of financial position
The items related to the net financial debt as of 31 December 2019 characteristic of the joint ventures are as follows (1):
| In million euros | Street Furniture | Transport | Billboard |
|---|---|---|---|
| Cash and cash equivalents net of bank overdrafts | (45.3) | 198.8 | 3.3 |
| Financial debt (non-current) | (7.8) | 0.0 | (68.7) |
| Financial debt (current) | (0.2) | (2.6) | (130.3) |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.3.2. As of 31 December 2018 (Restated)
10.3.2.1. Net assets Restated
Net assets (1) restated as of 31 December 2018 of the joint ventures and reconciliation with the statement of financial position of the consolidated financial statements as of 31 December 2018 are as follows:
Notes to the annual consolidated financial statements
| In million euros | Street Furniture | Transport | Billboard | Total |
|---|---|---|---|---|
| Non-current assets | 127.8 | 303.5 | 373.0 | 804.2 |
| Current assets | 88.8 | 389.0 | 63.5 | 541.4 |
| Non-current liabilities | (55.2) | (158.4) | (296.9) | (510.5) |
| Current liabilities | (92.6) | (313.8) | (191.1) | (597.4) |
| Net assets (1) | 68.9 | 220.4 | (51.5) | 237.7 |
| Impact of application of the holding percentage | (32.0) | (105.9) | 33.0 | (104.8) |
| Impairment of joint ventures | (14.4) | (11.7) | (26.1) | |
| Goodwill and elimination of shares held by joint ventures | 12.6 | 69.0 | 48.3 | 129.9 |
| Negative Net Equity limitation | 22.9 | 22.9 | ||
| Investments under the equity method | 35.1 | 183.5 | 41.1 | 259.6 |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.3.2.2. Other items of the statement of financial position
The items related to the net financial debt as of 31 December 2018 characteristic of the joint ventures are as follows (1):
| In million euros | Street Furniture | Transport | Billboard |
|---|---|---|---|
| Cash and cash equivalents net of bank overdrafts | (23.2) | 221.6 | 18.0 |
| Financial debt (non-current) | (5.1) | 0.0 | (68.6) |
| Financial debt (current) | (0.2) | (1.1) | (128.2) |
(1) IFRS data on a 100% basis without any elimination of transactions made between the different activities and without any elimination of transactions made with the controlled entities.
10.4. Other items
The dividends received from the joint ventures for the year 2019 break down as follows:
| In million euros Street Furniture Transport |
Billboard |
|---|---|
| Dividends received 17.9 62.2 |
1.3 |
The dividends received from the joint ventures for the year 2018 break down as follows:
| In million euros | Street Furniture | Transport | Billboard |
|---|---|---|---|
| Dividends received | 17.6 | 59.1 | 1.7 |
11. INFORMATION ON ASSOCIATES
11.1. Income statement items
Income statement items of the significant entity APG|SGA SA and the reconciliation with the income statement of the consolidated financial statements are as follows:
| 2019 | 2018 Restated |
|---|---|
| APG SGA SA In million euros |
APG SGA SA |
| Revenue | 286.3 261.6 |
| Net income (1) | 35.0 37.0 |
| Impact of application of the holding percentage | (24.5) (25.9) |
| Impairment of associates | 0.0 0.0 |
| Share of net profit of associates | 10.5 11.1 |
(1) IFRS data on a 100% basis.
The contribution of the other companies in the share of net profit of associates totalled €8.4 million in 2019 and €6.9 million in 2018 (Restated).
11.2. Statement of financial position items
Statement of financial position items(1) of the significant entity APG|SGA SA and the reconciliation with the statement of financial position of the consolidated financial statements as of 31 December 2019 and as of 31 December 2018 are as follows:
| In million euros APG SGA SA 385.2 Assets (270.6) Liabilities Equity 114.6 |
2019 | 2018 Restated |
|
|---|---|---|---|
| APG SGA SA | |||
| 393.6 | |||
| (284.3) | |||
| 109.3 | |||
| Impact of application of the holding percentage (80.2) |
(76.5) | ||
| Impairment of associates 0.0 |
0.0 | ||
| Goodwill 82.9 |
82.9 | ||
| Investments in associates 117.3 |
115.7 |
(1) IFRS data on a 100% basis.
The contribution of other companies in investments in associates in the statement of financial position totalled €68.2 million and €68.3 million as of 31 December 2019 and as of 31 December 2018 (Restated).
The valuation of 30% of APG|SGA SA at the 30 December 2019 share price amounts to €235.5 million.
11.3. Other items
The dividends received from associates for the years 2019 and 2018 break down as follows:
| 2019 | 2018 | |||||
|---|---|---|---|---|---|---|
| APG SGA SA | Other | Total | APG SGA SA | Other | Total | |
| In million euros | companies | companies | ||||
| Dividends received | 15.6 | 8.6 | 24.2 | 19.4 | 5.7 | 25.1 |
12. SCOPE OF CONSOLIDATION
12.1. Identity of the parent company
As of 31 December 2019, JCDecaux Holding holds 64.67% of the share capital of JCDecaux SA.
12.2. List of consolidated companies
| COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| STREET FURNITURE | |||||
| JCDecaux SA | France | 100.00 | F | 100.00 | |
| JCDecaux FRANCE | (1) | France | 100.00 | F | 100.00 |
| SOPACT | France | 100.00 | F | 100.00 | |
| SOMUPI | France | 66.00 | F | 66.00 | |
| JCDecaux ASIE HOLDING | France | 100.00 | F | 100.00 | |
| JCDecaux EUROPE HOLDING | France | 100.00 | F | 100.00 | |
| JCDecaux AMERIQUES HOLDING | France | 100.00 | F | 100.00 | |
| CYCLOCITY | France | 100.00 | F | 100.00 | |
| JCDecaux AFRIQUE HOLDING | France | 100.00 | F | 100.00 | |
| JCDecaux BOLLORE HOLDING | France | 50.00 | E* | 50.00 | |
| JCDecaux FRANCE HOLDING | (23) | France | 100.00 | F | 100.00 |
| MEDIAKIOSK | France | 100.00 | F | 100.00 | |
| MEDIA PUBLICITE EXTERIEURE | France | 100.00 | F | 100.00 | |
| SOCIETE FERMIERE DES COLONNES MORRIS | (3) | France | 100.00 | F | 100.00 |
| SOCIETE INFORMATION COMMUNICATION | |||||
| MOBILITE - SICM | (3) | France | 100.00 | F | 100.00 |
| JCDECAUX MOBILITE AIX-MARSEILLE | (3) | France | 100.00 | F | 100.00 |
| WALL GmbH | (1) | Germany | 100.00 | F | 100.00 |
| DSM DECAUX GmbH | Germany | 50.00 | E* | 50.00 | |
| STADTREKLAME NÜRNBERG GmbH | Germany | 35.00 | E | 35.00 | |
| DIE DRAUSSENWERBER GmbH | Germany | 100.00 | F | 100.00 | |
| SKY HIGH TG GmbH | Germany | 100.00 | F | 100.00 | |
| REMSCHEIDER GESELLSCHAFT FÜR | Germany | 50.00 | E* | 50.00 | |
| STADTVERKEHRSANLAGEN GbR. | |||||
| JCDecaux ARGENTINA S.A. | Argentina | 100.00 | F | 100.00 | |
| JCDecaux STREET FURNITURE Pty Ltd | Australia | 100.00 | F | 100.00 | |
| JCDecaux AUSTRALIA Pty Ltd | Australia | 100.00 | F | 100.00 | |
| ADBOOTH Pty Ltd | Australia | 100.00 | F | 100.00 | |
| JCDecaux CITYCYCLE AUSTRALIA Pty Ltd | Australia | 100.00 | F | 100.00 | |
| ARGE AUTOBAHNWERBUNG GmbH | Austria | 67.00 | F | 100.00 | |
| DIGITAL OUT OF HOME OO GmbH | Austria | 33.50 | E* | 50.00 | |
| JCDecaux STADMOBILIAR AZ (previously JCDecaux AZERBAIJAN LLC) |
Azerbaijan | 100.00 | F | 100.00 | |
| JCDecaux AZERBAIJAN LLC | (3) | Azerbaijan | 50.00 | E* | 50.00 |
| JCDecaux STREET FURNITURE BELGIUM | (1) | Belgium | 100.00 | F | 100.00 |
| JCDecaux MALLS | Belgium | 73.36 | F | 73.36 | |
| JCDecaux DO BRASIL LTDA | Brazil | 100.00 | F | 100.00 | |
| JCDecaux SALVADOR MOBILIARIO URBANO | Brazil | 100.00 | F | 100.00 | |
| LTDA | |||||
| JCDecaux LATAM SERVIÇOS DE MANAGEMENT LTDA |
Brazil | 100.00 | F | 100.00 | |
| CONCESSIONARIA A HORA DE SÃO PAULO LTDA | (1) | Brazil | 100.00 | F | 86.67 |
| CEMUSA BRASILIA S.A. | Brazil | 100.00 | F | 100.00 | |
| CEMUSA AMAZONIA Ltda | Brazil | 100.00 | F | 100.00 | |
| CEMUSA RIO S.A. | Brazil | 100.00 | F | 100.00 |
| COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| CEMUSA SALVADOR MOBILIARIO URBANO LTDA | Brazil | 100.00 | F | 100.00 | |
| WALL SOFIA EOOD | Bulgaria | 50.00 | E* | 50.00 | |
| OUTFRONT JCDecaux STREET FURNITURE | |||||
| CANADA, Ltd | Canada | 50.00 | E* | 50.00 | |
| JCDecaux COMUNICACION EXTERIOR CHILE S.A. | (1) | Chile | 100.00 | F | 100.00 |
| JCDecaux PEARL&DEAN OUTDOOR ADVERTISING (CHINA) Co. Ltd |
China | 100.00 | F | 100.00 | |
| BEIJING PRESS JCDecaux MEDIA ADVERTISING Co. Ltd |
China | 50.00 | E* | 50.00 | |
| NINGBO JCDecaux Pearl &Dean ADVERTISING Co. Ltd |
China | 100.00 | F | 100.00 | |
| JCDecaux CITYSCAPE HONG KONG Ltd | China | 100.00 | F | 100.00 | |
| JCDecaux CITYSCAPE Ltd | China | 100.00 | F | 100.00 | |
| IMMENSE PRESTIGE | (2) | China | 100.00 | F | 100.00 |
| JCDecaux MACAU | (1) | China | 80.00 | F | 80.00 |
| EQUIPAMIENTOS URBANOS NACIONALES DE COLOMBIA SAS |
Colombia | 75.00 | F | 75.00 | |
| LLEGA S.A.S. | Colombia | 75.00 | F | 100.00 | |
| JCDecaux KOREA Inc. | South Korea | 80.00 | F | 80.00 | |
| EQUIPAMIENTOS URBANOS DE COSTA RICA S.A. | (17) | Costa Rica | 76.16 | F | 100.00 |
| JCDecaux COTE d'IVOIRE | Ivory Coast | 50.00 | E* | 50.00 | |
| AFA JCDecaux A/S | (1) | Denmark | 50.00 | F | 50.00 |
| JCDecaux STREET FURNITURE FZ LLC | United Arab Emirates |
100.00 | F | 100.00 | |
| JCDecaux DXB MEDIA FZ LLC | United Arab Emirates |
75.00 | F | 75.00 | |
| JCDecaux ECUADOR SA. | Ecuador | 100.00 | F | 100.00 | |
| JCDecaux ESPANA SLU | (1) | Spain | 100.00 | F | 100.00 |
| JCDecaux ATLANTIS SA | Spain | 85.00 | F | 85.00 | |
| JCDecaux LATIN AMERICA INVESTMENTS HOLDING S.L. |
Spain | 100.00 | F | 100.00 | |
| CORPORACION AMERICANA DE EQUIPAMIENTOS URBANOS SL. |
Spain | 100.00 | F | 100.00 | |
| CORPORACION EUROPEA DE MOBILIARIO URBANO S.A. |
(1) | Spain | 100.00 | F | 100.00 |
| JCDecaux EESTI OU | Estonia | 100.00 | F | 100.00 | |
| JCDecaux NEW YORK, Inc. | United States | 100.00 | F | 100.00 | |
| JCDecaux SAN FRANCISCO, LLC | United States | 100.00 | F | 100.00 | |
| JCDecaux MALLSCAPE, LLC | United States | 100.00 | F | 100.00 | |
| JCDecaux CHICAGO, LLC | United States | 100.00 | F | 100.00 | |
| JCDecaux NEW YORK, LLC | United States | 100.00 | F | 100.00 | |
| OUTFRONT DECAUX STREET FURNITURE, LLC | United States | 50.00 | E* | 50.00 | |
| JCDecaux NORTH AMERICA, Inc. | United States | 100.00 | F | 100.00 | |
| JCDecaux BOSTON, Inc. | United States | 100.00 | F | 100.00 | |
| JCDecaux STREET FURNITURE, Inc. | United States | 100.00 | F | 100.00 | |
| JCDecaux STREET FURNITURE GREATER BOSTON, LLC |
United States | 100.00 | F | 100.00 | |
| JCDecaux STREET FURNITURE NEW YORK, LLC | United States | 100.00 | F | 100.00 | |
| JCDecaux FINLAND Oy | (1) | Finland | 100.00 | F | 100.00 |
| JCDecaux GABON Gabon 40.00 E 40.00 JCDecaux GUATEMALA, S.A. (17) Guatemala 76.16 F 100.00 VBM VAROSBUTOR ES MEDIA Kft. Hungary 67.00 F 100.00 JCDecaux HUNGARY Zrt (1) Hungary 67.00 F 100.00 JCDecaux ADVERTISING INDIA PVT Ltd (1) India 100.00 F 100.00 JCDecaux ISRAEL Ltd Israel 92.00 F 92.00 MCDECAUX Inc. (1) Japan 85.00 F 85.00 CYCLOCITY Inc. Japan 100.00 F 100.00 RTS DECAUX JSC Kazakhstan 50.00 F 50.00 JCDecaux LATVIJA SIA Latvia 100.00 F 100.00 JCDecaux LIETUVA UAB Lithuania 100.00 F 100.00 JCDecaux LUXEMBOURG SA (1) Luxembourg 100.00 F 100.00 JCDecaux GROUP SERVICES SARL (2) Luxembourg 100.00 F 100.00 JCDecaux MONGOLIA LLC Mongolia 51.00 F 51.00 EQUIPAMIENTOS URBANOS DE MEXICO, S.A. DE Mexico 100.00 F 100.00 C.V. SERVICIOS DE COMERCIALIZACION DE Mexico 100.00 F 100.00 PUBLICIDAD, S.A. DE C.V. SERVICIO Y TECNOLOGIA ESPECIALIZADA, S.A. (18) Mexico 60.00 F 100.00 DE C.V. MEDIOS DE PUBLICIDAD S.A. DE C.V. (18) Mexico 60.00 F 100.00 EQUIPAMIENTOS URBANOS DE LA PENINSULA, (18) Mexico 60.00 F 100.00 S.A. DE C.V. JCDecaux OUT OF HOME MEXICO SA de CV (18) Mexico 60.00 F 60.00 ESCATO URBANO, S.A. DE C.V. (18) Mexico 60.00 F 100.00 STOC SA DE CV (18) Mexico 60.00 F 100.00 FMIDecaux Co., Ltd. Myanmar 60.00 F 60.00 JCDecaux OMAN (1) & (5) Oman 100.00 F 100.00 JCDecaux UZ Uzbekistan 72.26 F 72.26 JCDecaux PANAMA, S.A. (1) & (17) Panama 76.16 F 100.00 JCDecaux CENTRAL AMERICA HOLDING S.A. Panama 100.00 F 100.00 JCDecaux Top Media SA (17) Panama 76.16 F 76.16 JCDecaux TOP MEDIA CORPORATIVO, S.A (3) Panama 76.16 F 100.00 The JCDecaux NEDERLAND BV 100.00 F 100.00 Netherlands JCDecaux PORTUGAL - MOBILIARIO URBANO Lda Portugal 100.00 F 100.00 PURBE PUBLICIDADE URBANA & GESTAO Lda Portugal 100.00 F 100.00 ELAN DECAUX W.L.L (1) Qatar 50.00 E 49.00 Dominican JCDecaux DOMINICANA, SAS. 100.00 F 100.00 Rep. JCDecaux MESTSKY MOBILIAR Spol Sro (1) Czech Rep. 100.00 F 100.00 RENCAR MEDIA Spol Sro Czech Rep. 46.90 F 100.00 CLV CR Spol Sro Czech Rep. 23.45 E* 50.00 United JCDecaux UK Ltd (1) 100.00 F 100.00 Kingdom United JCDecaux SMALL CELLS Ltd 70.00 F 70.00 Kingdom United IN FOCUS PUBLIC NETWORKS LIMITED 100.00 F 100.00 Kingdom United VIOOH LIMITED (1) 93.50 F 93.50 Kingdom JCDecaux EL SALVADOR, S.A. DE C.V. (17) Salvador 76.16 F 100.00 |
COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|---|---|---|---|---|---|
| COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| JCDecaux SINGAPORE Pte Ltd | Singapore | 100.00 | F | 100.00 | |
| JCDecaux SLOVAKIA Sro | Slovakia | 100.00 | F | 100.00 | |
| JCDecaux SVERIGE AB | Sw eden |
100.00 | F | 100.00 | |
| OUTDOOR AB | Sw eden |
48.50 | E* | 48.50 | |
| JCDecaux SVERIGE FORSALJNINGSAKTIEBOLAG |
Sw eden |
100.00 | F | 100.00 | |
| JCDecaux CORPORATE SERVICES GmbH | Sw itzerland |
100.00 | F | 100.00 | |
| JCDecaux URUGUAY | (6) | Uruguay | 100.00 | F | 100.00 |
| JCDecaux URUGUAY SA | Uruguay | 100.00 | F | 100.00 | |
| JCDecaux OOH URUGUAY SA | Uruguay | 100.00 | F | 100.00 | |
| PUBLIBUS SA | Uruguay | 100.00 | F | 100.00 | |
| TRANSPORT | |||||
| MEDIA AEROPORTS DE PARIS | France | 50.00 | E* | 50.00 | |
| METROBUS | France | 33.00 | E | 33.00 | |
| JCDecaux SPG OUTDOOR ADVERTISING (PTY) | |||||
| LTD | South Africa | 35.00 | E* | 50.00 | |
| JCDecaux ALGERIE SARL | Algeria | 80.00 | F | 80.00 | |
| JCDecaux AIRPORT ALGER EURL | Algeria | 80.00 | F | 100.00 | |
| JCDecaux AIRPORT CENTRE SARL | Algeria | 49.00 | E | 49.00 | |
| MEDIA FRANKFURT GmbH | Germany | 39.00 | E* | 39.00 | |
| JCDecaux AIRPORT MEDIA GmbH | Germany | 100.00 | F | 100.00 | |
| JCDecaux ATA SAUDI LLC | Saudi Arabia | 60.00 | F | 60.00 | |
| BUSPAK ADVERTISING GROUP PTY LTD | Australia | 100.00 | F | 100.00 | |
| GSP PRINT PTY LTD | Australia | 100.00 | F | 100.00 | |
| INFOSCREEN AUSTRIA GmbH | Austria | 67.00 | F | 100.00 | |
| JCD BAHRAIN SPC | (19) | Bahrain | 100.00 | F | 100.00 |
| CEMUSA DO BRASIL LTDA | Brazil | 100.00 | F | 100.00 | |
| JCDecaux MIDIA AEROPORTOS LTDA | Brazil | 100.00 | F | 100.00 | |
| JCDecaux CAMEROUN | Cameroon | 50.00 | E* | 50.00 | |
| JCDecaux CHILE SA | (1) | Chile | 100.00 | F | 100.00 |
| JCDecaux MOMENTUM SHANGHAI AIRPORT | China | 35.00 | E* | 35.00 | |
| ADVERTISING Co. Ltd | |||||
| JCDecaux ADVERTISING (BEIJING) Co. Ltd | China | 100.00 | F | 100.00 | |
| BEIJING TOP RESULT METRO Advertising. Co. Ltd | (13) | China | 90.00 | E* | 38.00 |
| JCDecaux ADVERTISING (SHANGHAI) Co. Ltd | China | 100.00 | F | 100.00 | |
| CHONGQING MPI PUBLIC TRANSPORTATION ADVERTISING Co. Ltd |
China | 60.00 | F | 60.00 | |
| CHENGDU MPI PUBLIC TRANSPORTATION | |||||
| Advertising. Co. Ltd | China | 100.00 | F | 100.00 | |
| JINAN ZHONGGUAN XUNHUA PUBLIC | China | 30.00 | E | 30.00 | |
| TRANSPORT Advertising. Co. Ltd | |||||
| SHANGHAI SHENTONG JCDecaux METRO ADVERTISING Co. Ltd |
China | 60.00 | E* | 51.00 | |
| NANJING METRO JCDecaux ADVERTISING Co., | |||||
| Ltd | China | 100.00 | F | 100.00 | |
| JCDecaux ADVERTISING CHONGQING Co., Ltd | China | 80.00 | F | 80.00 | |
| SUZHOU JCDecaux METRO ADVERTISING Co.Ltd | China | 80.00 | F | 65.00 | |
| NANJING JCDecaux BUS ADVERTISING Co., Ltd | China | 100.00 | F | 100.00 |
| COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| GUANGZHOU METRO JCDecaux ADVERTISING Co., Ltd |
China | 49.00 | E* | 49.00 | |
| GUANGZHOU JCDECAUX AEROTROPOLIS | China | 100.00 | F | 100.00 | |
| ADVERTISING Co.,Ltd | |||||
| TIANJIN METRO JCDecaux ADVERTISING Co., Ltd | (13) | China | 60.00 | E* | 60.00 |
| VIOOH CHINA LIMITED (previously BEIJING JCDecaux PEARL & DEAN Advertising Co.,Ltd) |
(3) | China | 93.50 | F | 100.00 |
| JCDecaux PEARL & DEAN Ltd | China | 100.00 | F | 100.00 | |
| JCDecaux INNOVATE Ltd | China | 100.00 | F | 100.00 | |
| MEDIA PRODUCTION Ltd | China | 100.00 | F | 100.00 | |
| JCDecaux CHINA HOLDING Ltd | China | 100.00 | F | 100.00 | |
| TOP RESULT PROMOTION Ltd | (1) | China | 100.00 | F | 100.00 |
| MEDIA PARTNERS INTERNATIONAL Ltd | (1) | China | 100.00 | F | 100.00 |
| JCDecaux DIGITAL VISION (HK) Ltd. | China | 100.00 | F | 100.00 | |
| VIOOH (HK) LIMITED | (3) | China | 93.50 | F | 100.00 |
| CNDECAUX AIRPORT MEDIA Co. Ltd | China | 30.00 | E | 30.00 | |
| JCDecaux DICON FZCO | United Arab Emirates |
75.00 | F | 75.00 | |
| JCDecaux ADVERTISING AND MEDIA LLC | United Arab Emirates |
80.00 | F | 49.00 | |
| JCDecaux MIDDLE EAST FZ-LLC | United Arab Emirates |
100.00 | F | 100.00 | |
| JCDecaux OUT OF HOME FZ-LLC (ABU DHABI) | United Arab Emirates |
55.00 | F | 55.00 | |
| JCDecaux AIRPORT, Inc. | United States | 100.00 | F | 100.00 | |
| JOINT VENTURE FOR THE OPERATION OF THE ADVERTISING CONCESSION AT LAWA, LLC |
United States | 92.50 | F | 92.50 | |
| MIAMI AIRPORT CONCESSION, LLC | United States | 50.00 | E* | 50.00 | |
| JCDecaux AIRPORT CHICAGO, LLC | United States | 100.00 | F | 100.00 | |
| THE JOINT VENTURE FOR THE OPERATION OF THE ADVERTISING CONCESSION AT HOUSTON |
United States | 99.00 | F | 99.00 | |
| AIRPORTS, LLC | |||||
| JCDecaux AIRPORT BOSTON, LLC | United States | 98.00 | F | 98.00 | |
| JCDecaux AIRPORT SPONSORSHIPS, LLC | (25) | United States | 100.00 | F | 100.00 |
| JCDecaux AIRPORT DALLAS FORT WORTH, LLC | United States | 97.50 | F | 97.50 | |
| IGPDECAUX Spa | (1) & (13) | Italy | 60.00 | E* | 60.00 |
| JCDecaux NORGE AS | (1) | Norw ay |
97.69 | F | 100.00 |
| AEROTOP, S.A. | (14) & (17) | Panama | 76.16 | F | 100.00 |
| CITY BUS TOP, S.A. | (17) | Panama | 60.93 | F | 80.00 |
| PUBLICIDAD AEROPUERTO DE TOCUMEN S.A. | (17) | Panama | 76.16 | F | 100.00 |
| CIPRES S.A. | (3) | Paraguay | 100.00 | F | 100.00 |
| JCDecaux PERU SAC | (1) | Peru | 100.00 | F | 100.00 |
| JCDecaux AIRPORT POLSKA Sp zoo | Poland | 100.00 | F | 100.00 | |
| JCDecaux AIRPORT PORTUGAL SA | Portugal | 85.00 | F | 85.00 | |
| RENCAR PRAHA AS | Czech Rep. | 46.90 | F | 70.00 | |
| JCDecaux AIRPORT UK Ltd | (2) | United Kingdom |
100.00 | F | 100.00 |
| JCDecaux ASIA SINGAPORE Pte Ltd | Singapore | 100.00 | F | 100.00 | |
| JCDecaux OUT OF HOME ADVERTISING Pte Ltd | Singapore | 100.00 | F | 100.00 | |
| JCDecaux THAILAND Co., Ltd | Thailand | 98.00 | F | 49.50 | |
| BILLBOARD | |||||
| JCDecaux SOUTH AFRICA HOLDINGS (PROPRIETARY) LIMITED |
South Africa | 100.00 | F | 100.00 | |
| JCDecaux SOUTH AFRICA OUTDOOR ADVERTISING (PROPRIETARY) LIMITED |
South Africa | 49.00 | F | 70.00 |
| COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| JCDecaux SUB-SAHARAN AFRICA (Pty) Ltd | (22) | South Africa | 78.15 | F | 100.00 |
| MERAFE RAIL | (22) | South Africa | 78.15 | F | 100.00 |
| MERAFE OUTDOOR | (22) | South Africa | 78.15 | F | 100.00 |
| CORPCOM OUTDOOR | (22) | South Africa | 78.15 | F | 100.00 |
| SUBURBAN INDUSTRIAL SIGN DESIGN | (22) | South Africa | 78.15 | F | 100.00 |
| RENT A SIGN LEBOWA | (22) | South Africa | 39.08 | E* | 50.00 |
| JCDecaux SOUTH AFRICA (PTY) Ltd | South Africa | 70.00 | F | 100.00 | |
| OUTDOOR Co (Pty) Ltd | South Africa | 70.00 | F | 100.00 | |
| BDEYE DESIGNS (Pty) Ltd | South Africa | 70.00 | F | 100.00 | |
| KCF INVESTMENTS (Pty) Ltd | South Africa | 70.00 | F | 100.00 | |
| NEWSHELF1001 (Pty) Ltd (Lease Co) | South Africa | 70.00 | F | 100.00 | |
| SIYENZA GRAPHIC DESIGN AND SIGNAGE (PTY) | South Africa | 70.00 | F | 100.00 | |
| LTD | |||||
| INTER-AFRICA OUTDOOR ADVERTISING (SOUTH AFRICA) (PTY) Ltd |
(22) | South Africa | 78.15 | F | 100.00 |
| JCDecaux SUBSAHARAN AFRICA HOLDINGS (Pty) Ltd |
South Africa | 70.00 | F | 100.00 | |
| JINJA 3 OUTDOOR ADVERTISING PTY LTD | (3) | South Africa | 21.00 | E* | 30.00 |
| JCDecaux ANGOLA LIMITADA (previously JCDecaux ANGOLA LDA) |
(22) | Angola | 78.15 | F | 100.00 |
| URBANMEDIA ARGENTINA S.A. | Argentina | 100.00 | F | 100.00 | |
| JCDecaux ARGENTINA OOH S.A. | Argentina | 100.00 | F | 100.00 | |
| JCDecaux ANZ PTY Ltd | Australia | 100.00 | F | 100.00 | |
| JCDecaux AUSTRALIA HOLDINGS PTY Ltd | Australia | 100.00 | F | 100.00 | |
| APN OUTDOOR GROUP LTD | Australia | 100.00 | F | 100.00 | |
| APNO GROUP HOLDINGS PTY LTD | Australia | 100.00 | F | 100.00 | |
| APNO FINANCE PTY LTD | Australia | 100.00 | F | 100.00 | |
| APN OUTDOOR PTY LTD | (1) | Australia | 100.00 | F | 100.00 |
| EASTCOTT INVESTMENTS PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| UNIVERSAL OUTDOOR PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| CODY LINK PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| TAXIMEDIA PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| VALTOFF PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| TOTAL CAB MEDIA PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| SOL AUSTRALIA PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| EVERFACT PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| EVERFACT UNIT TRUST | (2) | Australia | 100.00 | F | 100.00 |
| APN OUTDOOR (TRADING) PTY LTD | Australia | 100.00 | F | 100.00 | |
| AUSTRALIAN POSTERS PTY LTD | Australia | 100.00 | F | 100.00 | |
| THE AUSTRALASIAN ADVERTISING COMPANY PTY LTD |
(2) | Australia | 100.00 | F | 100.00 |
| COMPANIES | COUNTRY | % INTEREST |
CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| ADSPACE PTY LTD | Australia | 100.00 | F | 100.00 | |
| IOM PTY LIMITED | Australia | 100.00 | F | 100.00 | |
| TMS OUTDOOR ADVERTISING PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| THE NETTLEFOLD OUTDOOR ADVERTISING UNIT TRUST |
(2) | Australia | 100.00 | F | 100.00 |
| NETTLEFOLD ADVERTISING PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| NATIONAL OUTDOOR ADVERTISING PTY LTD | (2) | Australia | 100.00 | F | 100.00 |
| GEWISTA WERBEGESELLSCHAFT.mbH | (1) | Austria | 67.00 | F | 67.00 |
| PROGRESS AUSSENWERBUNG GmbH | Austria | 45.10 | F | 51.00 | |
| PROGRESS WERBELAND WERBE. GmbH | Austria | 67.00 | F | 100.00 | |
| USP WERBEGESELLSCHAFT.mbH | Austria | 50.25 | F | 75.00 | |
| JCDecaux CENTRAL EASTERN EUROPE GmbH | Austria | 100.00 | F | 100.00 | |
| GEWISTA SERVICE GmbH | Austria | 67.00 | F | 100.00 | |
| ROLLING BOARD OBERÖSTERREICH WERBE GmbH |
Austria | 25.13 | E* | 50.00 | |
| KULTURFORMAT | Austria | 67.00 | F | 100.00 | |
| MEGABOARD SORAVIA GmbH | Austria | 45.10 | F | 51.00 | |
| ANKÜNDER GmbH | Austria | 22.31 | E | 33.30 | |
| JCDecaux BILLBOARD BELGIUM | (20) | Belgium | 86.93 | F | 100.00 |
| JCDecaux ARTVERTISING BELGIUM | Belgium | 100.00 | F | 100.00 | |
| CS CONSULTING | (3) & (20) | Belgium | 86.93 | F | 86.93 |
| PUBLICITE TOUSSAINT | (3) & (20) | Belgium | 43.46 | E* | 50.00 |
| PUBLIROUTE | (3) & (20) | Belgium | 86.93 | F | 100.00 |
| CITY BUSINESS MEDIA | (21) | Belgium | 100.00 | F | 100.00 |
| JCDecaux BOTSWANA (PTY) LIMITED | (22) | Botsw ana |
78.15 | F | 100.00 |
| JCDecaux GRANDES FORMATOS MIDIA EXTERIOR LTDA |
Brazil | 100.00 | F | 100.00 | |
| JCDecaux OUTDOOR Ltda | Brazil | 100.00 | F | 100.00 | |
| JCDecaux BULGARIA HOLDING BV | (11) | Bulgaria | 50.00 | E* | 50.00 |
| JCDecaux BULGARIA EOOD | Bulgaria | 50.00 | E* | 50.00 | |
| MARKANY LINE EOOD | Bulgaria | 25.00 | E* | 50.00 | |
| EASY DOCK EOOD | Bulgaria | 50.00 | E* | 50.00 | |
| PRIME OUTDOOR OOD | Bulgaria | 50.00 | E* | 50.00 | |
| JCDecaux IMAGE JSC | Bulgaria | 25.00 | E* | 50.00 | |
| IOAHC INVESTMENTS URUGUAY COMPANY | Cayman Islands |
100.00 | F | 100.00 | |
| IOA PROLIX COMPANY | Cayman Islands |
80.00 | F | 80.00 | |
| JCDecaux OOH CHILE S.A. | Chile | 100.00 | F | 100.00 | |
| POAD | China | 49.00 | E | 49.00 | |
| CEE MEDIA HOLDING LIMITED | Cyprus | 50.00 | E* | 50.00 | |
| DROSFIELD ENTERPRISES LIMITED | Cyprus | 50.00 | E* | 50.00 | |
| OUTDOOR MEDIA SYSTEMS LIMITED | Cyprus | 50.00 | E* | 50.00 | |
| ELACORP LIMITED | Cyprus | 18.75 | E* | 25.00 | |
| TOP MEDIA COSTA RICA, S.A. | (16) & (17) | Costa Rica | 76.16 | F | 100.00 |
| EUROPLAKAT Doo CLEAR CHANNEL ESPANA, S.L.U. y CEMUSA - |
Croatia | 45.10 | F | 51.00 | |
| CORPORACION EUROPEA DE MOBILIARIO URBANO, S.A. |
Spain | 50.00 | E* | 50.00 | |
| JCDecaux ESWATINI (PROPRIETARY) LIMITED (previously JCDecaux SWAZILAND (PTY) LTD) |
(22) | Esw atini |
78.15 | F | 100.00 |
| COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| INTERSTATE JCDecaux LLC | United States | 49.00 | E* | 49.00 | |
| TOP MEDIA GUATEMALA, S.A. | (17) | Guatemala | 76.16 | F | 100.00 |
| JCDecaux TOP MEDIA HONDURAS S.A. | (17) | Honduras | 76.16 | F | 100.00 |
| JCDecaux REUNION ISLAND | (22) | Reunion Island | 62.72 | F | 100.00 |
| DAVID ALLEN HOLDINGS Ltd | (10) | Ireland | 100.00 | F | 100.00 |
| DAVID ALLEN POSTER SITES Ltd | Ireland | 100.00 | F | 100.00 | |
| SOLAR HOLDINGS Ltd | Ireland | 100.00 | F | 100.00 | |
| JCDecaux IRELAND Ltd | (1) | Ireland | 100.00 | F | 100.00 |
| BRAVO OUTDOOR ADVERTISING Ltd | Ireland | 100.00 | F | 100.00 | |
| JCDecaux LESOTHO (PTY) LTD | (22) | Lesotho | 78.15 | F | 100.00 |
| JCDecaux MADAGASCAR SA | (22) | Madagascar | 62.52 | F | 80.00 |
| JCDecaux MEDIA Sdn Bhd | (2) | Malaysia | 100.00 | F | 100.00 |
| JCDecaux OUTDOOR ADVERTISING LTD | (22) | Malaw i |
78.15 | F | 100.00 |
| JCDecaux (MAURITIUS) Ltd | (22) | Mauritius | 62.72 | F | 80.25 |
| CONTINENTAL OUTDOOR MEDIA MANAGEMENT COMPANY (MAURITIUS) Ltd |
(22) | Mauritius | 78.15 | F | 100.00 |
| VENDOR PUBLICIDAD EXTERIOR S DE R.L. DE C.V. |
(18) | Mexico | 60.00 | F | 100.00 |
| CORPORACION DE MEDIOS INTEGRALES, S.A. DE C.V. |
(18) | Mexico | 60.00 | F | 100.00 |
| PUBLITOP DE OCCIDENTE, S.A. DE C.V. | (18) | Mexico | 60.00 | F | 100.00 |
| PUBLITOP, S.A. DE C.V. | (18) | Mexico | 60.00 | F | 100.00 |
| JCDecaux MOZAMBIQUE LDA | (22) | Mozambique | 55.88 | F | 71.50 |
| JCDecaux NAMIBIA OUTDOOR ADVERTISING (Pty) Limited |
(22) | Namibia | 78.15 | F | 100.00 |
| TOP MEDIA NICARAGUA, S.A. | (17) | Nicaragua | 76.16 | F | 100.00 |
| JCDecaux NIGERIA OUTDOOR ADVERTISING Ltd | (22) | Nigeria | 54.71 | F | 70.00 |
| APN OUTDOOR HOLDINGS Ltd | New Zealand |
100.00 | F | 100.00 | |
| APN OUTDOOR Ltd | (1) | New Zealand |
100.00 | F | 100.00 |
| JCDecaux UGANDA OUTDOOR ADVERTISING LTD |
(22) | Uganda | 78.15 | F | 100.00 |
| PUBLITOP DE PANAMA, S.A. | (15) & (17) | Panama | 76.16 | F | 100.00 |
| JCDecaux TOP MEDIA SERVICIOS DE PANAMA, S.A. |
(17) | Panama | 76.16 | F | 100.00 |
| TOP MEDIA PANAMA, S.A. | (17) | Panama | 76.16 | F | 100.00 |
| PUBLITOP DE PANAMA, S.A. (previously PUBLITOP NORTE) |
(17) | Panama | 76.16 | F | 100.00 |
| OUTDOOR SYSTEMS AMERICAS NETHERLANDS NEWCO BV |
The Netherlands |
100.00 | F | 100.00 | |
| JCDecaux CARTELERA B.V. | (2) | The Netherlands |
100.00 | F | 100.00 |
| JCDecaux NEONLIGHT Sp zoo | Poland | 100.00 | F | 100.00 | |
| GIGABOARD POLSKA Sp zoo Poland | Poland | 67.00 | F | 100.00 | |
| RED PORTUGUESA - PUBLICIDADE EXTERIOR SA |
Portugal | 96.38 | F | 96.38 | |
| AUTEDOR - PUBLICIDADE EXTERIOR Lda | (4) | Portugal | 49.15 | F | 51.00 |
| RED LITORAL - PUBLICIDADE EXTERIOR Lda | Portugal | 72.29 | F | 75.00 | |
| DISTRIBUIDORA DE VALLAS DOMINICANA, S.A. | Dominican Rep. |
100.00 | F | 100.00 | |
| EUROPLAKAT Spol Sro | Czech Rep. | 67.00 | F | 100.00 |
| United JCDecaux Ltd 100.00 F 100.00 Kingdom United JCDecaux UNITED Ltd 100.00 F 100.00 Kingdom United ALLAM GROUP Ltd 100.00 F 100.00 Kingdom United EXCEL OUTDOOR MEDIA Ltd 100.00 F 100.00 Kingdom RUSS OUT OF HOME BV (RUSS OUTDOOR) (8) Russia 25.00 E 25.00 ADVANCE GROUP LLC Russia 12.75 E 25.00 APR CITY/TVD LLC Russia 25.00 E 25.00 BIGBOARD LLC Russia 25.00 E 25.00 DISPLAY LLC Russia 18.75 E 25.00 EUROPEAN OUTDOOR COMPANY Inc. (9) Russia 25.00 E 25.00 EXPOMEDIA LLC Russia 25.00 E 25.00 FREGAT LLC Russia 25.00 E 25.00 HARDLINK SOLUTIONS LLC Russia 25.00 E 25.00 WALL CIS LLC Russia 25.00 E 25.00 MEDIA SUPPORT SERVICES Ltd (9) Russia 25.00 E 25.00 MERCURY OUTDOOR DISPLAY Ltd (9) Russia 25.00 E 25.00 RUSS OUT OF HOME GmbH (7) Russia 25.00 E 25.00 NORTHERN OUTDOOR DISPLAYS Ltd (9) Russia 25.00 E 25.00 OMS LLC Russia 25.00 E 25.00 OUTDOOR LLC Russia 25.00 E 25.00 OUTDOOR MARKETING LLC Russia 25.00 E 25.00 OUTDOOR MEDIA MANAGEMENT LLC Russia 25.00 E 25.00 OUTDOOR SYSTEMS LIMITED (9) Russia 25.00 E 25.00 PRIME SITE LLC Russia 25.00 E 25.00 PRIME SITE Ltd (9) Russia 25.00 E 25.00 REKART MEDIA LLC Russia 25.00 E 25.00 REKTIME LLC Russia 25.00 E 25.00 RUSS INDOOR LLC Russia 25.00 E 25.00 RUSS OUTDOOR LLC Russia 25.00 E 25.00 RUSS OUTDOOR MEDIA LLC Russia 25.00 E 25.00 SCROPE TRADE & FINANCE SA (9) Russia 25.00 E 25.00 SENROSE FINANCE LIMITED (9) Russia 25.00 E 25.00 SOLVEX Ltd (9) Russia 25.00 E 25.00 TERMOTRANS LLC Russia 25.00 E 25.00 UNITED OUTDOOR HOLDING Inc. (9) Russia 25.00 E 25.00 MERIDIAN LLC Russia 12.75 E 25.00 RINGROADMEDIA LLC Russia 12.75 E 25.00 VA LLC (24) Russia 24.98 E 25.00 ADVERTRACK LLC (3) Russia 12.75 E 25.00 ADMETRIX LLC (3) Russia 25.00 E 25.00 HIGHWAY ADVERTISING LLC (3) Russia 12.75 E 25.00 TOP MEDIA EL SALVADOR, S.A. de C.V. (17) Salvador 76.16 F 100.00 ISPA BRATISLAVA Spol Sro Slovakia 67.00 F 100.00 EUROPLAKAT Doo Slovenia 27.56 E 41.13 PLAKATIRANJE Doo Slovenia 27.56 E 41.13 SVETLOBNE VITRINE Slovenia 27.56 E 41.13 MADISON Doo Slovenia 27.56 E 41.13 METROPOLIS MEDIA Doo (SLOVENIA) Slovenia 27.56 E 41.13 APG SGA SA Sw itzerland 30.00 E 30.00 |
COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|---|---|---|---|---|---|
Notes to the annual consolidated financial statements
| COMPANIES | COUNTRY | % INTEREST | CONSOL. METHOD |
% CONTROL* |
|
|---|---|---|---|---|---|
| JCDecaux TANZANIA LTD | (22) | Tanzania | 78.15 | F | 100.00 |
| BIGBOARD B.V. | (12) | Ukraine | 50.00 | E* | 50.00 |
| BIGBOARD GROUP LLC | Ukraine | 50.00 | E* | 50.00 | |
| ALTER-V LLC | Ukraine | 50.00 | E* | 50.00 | |
| AUTO CAPITAL LLC | Ukraine | 50.00 | E* | 50.00 | |
| BIG MEDIA LLC | Ukraine | 50.00 | E* | 50.00 | |
| BIGBOARD KHARKOV | Ukraine | 50.00 | E* | 50.00 | |
| BIGBOARD LLC (KIEV) | Ukraine | 50.00 | E* | 50.00 | |
| BIGBOARD LVOV | Ukraine | 50.00 | E* | 50.00 | |
| BIGBOARD VYSHGOROD | Ukraine | 50.00 | E* | 50.00 | |
| BIGBOARD ZAPOROZHIE | Ukraine | 50.00 | E* | 50.00 | |
| BOMOND LLC | Ukraine | 25.00 | E* | 50.00 | |
| MEDIA PARTNER - O | Ukraine | 50.00 | E* | 50.00 | |
| OUTDOORAUTO LLC | Ukraine | 50.00 | E* | 50.00 | |
| POSTER DNEPROPETROVSK | Ukraine | 50.00 | E* | 50.00 | |
| POSTER DONBASS | Ukraine | 50.00 | E* | 50.00 | |
| POSTER GROUP LLC | Ukraine | 50.00 | E* | 50.00 | |
| POSTER LLC (KIEV) | Ukraine | 50.00 | E* | 50.00 | |
| POSTER ODESSA | Ukraine | 50.00 | E* | 50.00 | |
| REKSVIT UKRAINE LLC | Ukraine | 50.00 | E* | 50.00 | |
| UKRAIYINSKA REKLAMA LLC | Ukraine | 50.00 | E* | 50.00 | |
| JCDecaux ZAMBIA LTD | (22) | Zambia | 78.15 | F | 100.00 |
| JCDecaux ZIMBABWE (PVT) LTD | (22) | Zimbabw e |
78.15 | F | 100.00 |
(1) Companies spread over two or three activities for segment reporting purposes, but listed in the above table according to their historical business activity.
- (2) Companies liquidated in 2019.
- (3) Companies consolidated in 2019.
- (4) Companies sold in 2019.
- (5) This company is a representative office of JCDecaux Bahrain SPC.
- (6) This company is a representative office of JCDecaux France.
- (7) Company incorporated under Austrian law and operating in Russia.
- (8) Company incorporated under Dutch law and operating in Russia.
- (9) Company incorporated under British Virgin Islands law and holding interests in Russia.
- (10) Company incorporated under British law and operating in Northern Ireland.
- (11) Company incorporated under Dutch law and operating in Bulgaria.
- (12) Company incorporated under Dutch law and operating in Ukraine.
- (13) Beijing Top Result Metro Advertising. Co. Ltd (China), TIANJIN METRO JCDecaux ADVERTISING Co., Ltd (China) and IGPDECAUX Spa (Italy) are consolidated using the equity method due to joint control with the Group's partner in management matters.
- (14) Aerotop, S.A. (Panama) was absorbed by Publicidad Aeropuerto de Tocumen S.A. (Panama) on 1 January 2019.
- (15) Publitop de Panama, S.A. (Panama) was absorbed by Publitop Norte (Panama) on 1 January 2019. After the transaction, the absorbing company was renamed Publitop de Panama, S.A.
- (16) Top Media Costa Rica, S.A. (Costa Rica) was absorbed by Equipamientos Urbanos de Costa Rica S.A. (Costa Rica) on 6 February 2019.
- (17) On 7 March 2019, acquisition of 3.41% of the minority interests in JCDecaux Top Media SA (Panama) by JCDecaux Central America Holding S.A. (Panama) raising the financial interest from 72.75% to 76.16% and increasing the financial interest of entities held by JCDecaux Top Media SA.
- (18) On 20 March 2019, sale without loss of control of a 3.70% stake in JCDecaux Out Of Home Mexico SA de CV (Mexico) by Corporacion Americana de Equipamientos Urbanos SL. (Spain) and Equipamientos Urbanos de Mexico, SA de CV (Mexico) reducing the percentage of financial interest and control from 63.70% to 60% and reducing the financial interest of entities directly or indirectly held by JCDecaux Out Of Home Mexico SA de CV.
Notes to the annual consolidated financial statements
- (19) The principal activity of JCD Bahrain SPC (Bahrain) is now Transport.
- (20) On 9 July 2019, the Group completed its acquisition of Belgium's Publiroute group, first acquired in November 2018 with the contribution in kind of JCDecaux Billboard Belgium (Belgium) by JCDecaux Street Furniture Belgium (Belgium) and the sale without loss of control of a 13% stake to the partner. The new merged entity on which the Group holds a percentage of control and financial interest of 86.93% is fully consolidated.
- (21) The principal activity of City Business Media (Belgium) is now Billboard.
- (22) In September 2019, JCDecaux South Africa Holdings (Proprietary) Limited (South Africa) acquired a 27.18% stake in JCDecaux Sub-Saharan Africa (Pty) Ltd (South Africa). The effect was to increase its financial interest from 70% to 78.15% and raise the financial interest of entities directly or indirectly held by JCDecaux Sub-Saharan Africa (Pty) Ltd.
- (23) JCDecaux France Holding (France) was absorbed by JCDecaux SA (France) with retrospective effect as from 1 January 2019.
- (24) Outdoor Media Management LLC (Russia) acquired 55% of the minority interests conferring control over VA LLC (Russia) increasing its financial interest from 11.25% to 24.98%.
- (25) Company deconsolidated in 2019.
Note:
F = Full consolidation E* = Under the equity method (joint control) E = Under the equity method (significant influence)
* The percentage of control corresponds to the portion of direct or indirect ownership in the share capital of the companies except for the companies held by a company under joint control. For these companies, the percentage of control corresponds to the percentage of control of its owner.
For controlled companies and companies under equity method they hold, the voting rights percentage is normally determined based on the percentage of control, with the exception of a few companies in China, where it is determined by representation in the governance bodies, given that local legal and regulatory specificities do not allow it to be assessed otherwise, and in Thailand, where the voting rights percentage is 98%.
13. SUBSEQUENT EVENTS
On 4 March 2020, the Supervisory Board decided to propose a €0.58 per share dividend distribution for 2019 at the General Meeting of Shareholders in May 2020.
Between 31 December 2019, the closing date, and 4 March 2020, the date of approval of the accounts by the Supervisory Board, the Covid-19 health crisis occurred.
Looking at the first quarter of 2020, the Group's adjusted organic revenue is expected to be down around (10)%, despite a positive current trading in Street Furniture, reflecting the very material impact from the Covid-19 outbreak and taking into account the Q1 2019 high comparable in Transport. In Asia-Pacific, the Group's business has been significantly affected since the beginning of February, with a very significant decline in China in passengers and commuters in the airports and metros where the Group operates. All the landlords of the Group in China fully recognise the significant setback for the advertising business and have all already expressed their intention to grant the Group rent reductions. Given the magnitude of the Covid-19 disruption, the operating margin should be negatively affected in 2020, despite saving measures being implemented without compromising the operational quality and efficiency, to mitigate the impact. With strong and effective measures notably taken by the Chinese government, a rebound of the economic growth could pave the way for a recovery with consumption and investment activities resuming, once the epidemic is under control.