Earnings Release • Jul 28, 2016
Earnings Release
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Paris, July 28, 2016
| (€m) | H1 2015 | H1 2016 | Change | Change like-for-like |
|---|---|---|---|---|
| Sales | 19,860 | 19,549 | -1.6% | +2.9% |
| EBITDA | 1,886 | 1,957 | +3.8% | |
| Operating income | 1,275 | 1,368 | +7.3% | +10.2% |
| Recurring net income2 | 552 | 624 | +13.0% | |
| Free cash flow3 | 728 | 823 | +13.0% |
"Saint-Gobain's sales for first-half 2016 confirm our February forecasts, with France stabilizing and all regions making a strong contribution to growth. Our strategy of investing in emerging markets provides us with a diversified platform for profitable growth. Our first-half results also benefited from efforts to optimize our operations, particularly in Western Europe, and from upbeat trading in the US. The results are in line with our objectives and we expect a like-for-like improvement in operating income for second-half 2016 versus second-half 2015. While the June 23 Brexit vote in the UK has created a climate of uncertainty, it does not affect our objectives."
1. Recurring earnings per share from continuing operations.
2. Recurring net income from continuing operations excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions.
3. Cash flow from continuing operations excluding the tax impact of capital gains and losses on disposals, asset write-downs and material non-recurring provisions less capital expenditure
First-half sales came in at €19,549 million, including a significant 3.5% negative currency impact resulting namely from the depreciation of Latin American currencies – and to a lesser extent the pound sterling – against the euro.
The negative 1.0% Group structure impact is a result of the disposals carried out in 2015 aimed at optimizing the Building Distribution portfolio.
On a like-for-like basis, sales were up 2.9% on the back of 3.5% volume growth driven partly by the positive impact of a greater number of working days in the second quarter (estimated impact of just over +1% in the first half). All Business Sectors and regions delivered volume growth. In a still deflationary environment in terms of raw material and energy costs, prices remained slightly down, losing 0.6% over the six months to June 30.
The Group's operating income climbed 7.3% on a reported basis and 10.2% like-for-like. The Group's operating margin1 rallied to 7.0%, gaining 0.6 percentage points compared to firsthalf 2015. All Business Sectors reported margin growth, particularly in industry and to a lesser extent Building Distribution, which was hit by the deflationary environment.
Innovative Materials like-for-like sales moved up 4.4%, powered by Flat Glass. There was a further significant improvement in the Business Sector's operating margin, which came in at 11.2% versus 10.2% one year earlier.
Construction Products (CP) like-for-like sales advanced 1.6% over the first half lifted by Interior Solutions, which drove a significant improvement in the Business Sector's operating margin, up to 9.4% compared to 8.7% for the same period in 2015.
Interior Solutions posted 5.2% organic growth in the first half on the back of strong market positions, which allowed it to benefit from good trading in all regions. In a still deflationary environment, volumes proved upbeat in Western Europe (partly helped by the positive impact of a greater number of working days) and in North America. Asia and emerging countries confirmed their good performance as well as the merits of the growth operations carried out in this region over the past few years. The operating margin climbed to 10.2% from 9.0% in first-half 2015.
1. Operating margin = operating income expressed as a percentage of sales.
Exterior Solutions like-for-like sales retreated 2.0% over the first half, due solely to the expected decline in Pipe, which was hit by contracting markets in its main regions. However, Exterior Solutions stabilized in the second quarter, helped by an acceleration in volumes for Roofing in the US. Mortars reported organic growth led by Asia and emerging countries and by the improvement in Western Europe, which offset tougher conditions in Brazil. Overall, the operating margin steadied at 8.3%.
Building Distribution like-for-like sales rose 3.1%, with the second-quarter performance buoyed by the positive impact of a greater number of working days. Trading in France benefited from the first signs of an upturn in new-builds, while the renovation market remains sluggish. Germany, the UK and especially Nordic countries continued to report good volume trends. Amid a fall in the cost of goods sold in Europe, prices were down – particularly in France and the UK. The sharp economic slowdown in Brazil continued to take its toll on trading.
The operating margin came in at 2.8% versus 2.6% in first-half 2015, benefiting from an upturn in volumes in Europe but affected by a deflationary environment.
The Group delivered organic growth in all of its regions in the first half, as trends observed earlier in the first quarter continued in the three months to June 30.
The unaudited interim consolidated financial statements for first-half 2016 were subject to a limited review by the statutory auditors and were approved and adopted by the Board of Directors on July 28, 2016.
| H1 2015 | H1 2016 | % change |
|
|---|---|---|---|
| €m | (A) | (B) | (B)/(A) |
| Sales and ancillary revenue | 19,860 | 19,549 | -1.6% |
| Operating income | 1,275 | 1,368 | 7.3% |
| Operating depreciation and amortization | 611 | 589 | -3.6% |
| EBITDA (op. inc. + operating depr./amort.) | 1,886 | 1,957 | 3.8% |
| Non-operating costs | (154) | (180) | 16.9% |
| Capital gains and losses on disposals, asset write-downs, corporate acquisition fees and earn-out payments |
(41) | (32) | -22.0% |
| Business income | 1,080 | 1,156 | 7.0% |
| Net financial expense | (328) | (287) | -12.5% |
| Income tax | (236) | (261) | 10.6% |
| Share in net income of associates | 0 | 2 | n.s. |
| Net income from continuing operations | 516 | 610 | 18.2% |
| Net income from discontinued operations | 69 | 0 | n.s. |
| Net income before minority interests | 585 | 610 | 4.3% |
| Minority interests | 27 | 14 | -48.1% |
| Net attributable income | 558 | 596 | 6.8% |
| Earnings per share2 (in €) |
0.98 | 1.08 | 10.2% |
| Net attributable income from continuing operations | 493 | 596 | 20.9% |
| Recurring net income from continuing operations1 | 552 | 624 | 13.0% |
| earnings per share2 Recurring from continuing operations1 (in €) |
0.97 | 1.13 | 16.5% |
| Cash flow from operations3 | 1,195 | 1,260 | 5.4% |
| Cash flow from operations (excluding capital gains | |||
| tax)4 | 1,185 | 1,251 | 5.6% |
| Capital expenditure | 457 | 428 | -6.3% |
| Free cash flow5 | 728 | 823 | 13.0% |
| Investments in securities | 92 | 68 | -26.1% |
| Net debt | 7,995 | 6,624 | -17.1% |
1. Excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions.
2. Calculated based on the number of shares outstanding at June 30 (552,574,120 in 2016, versus 569,364,905 in 2015).
3. Cash flow from operations = operating cash flow from continuing operations excluding material non-recurring provisions.
4. Cash flow from operations excluding capital gains tax = (3) - tax impact of capital gains and losses on disposals, asset writedowns and material non-recurring provisions.
5. Free cash flow = (4) - capital expenditure of continuing operations.
Consolidated sales advanced 2.9% like-for-like, buoyed by volume growth and despite a negative 0.6% price effect in a deflationary environment. On a reported basis, sales were down 1.6%, with a negative 3.5% currency impact chiefly resulting from the depreciation of Latin America currencies – and to a lesser extent the pound sterling – against the euro. The negative 1.0% Group structure impact essentially reflected disposals carried out in the Building Distribution business in 2015.
Operating income climbed 7.3% based on reported figures, despite a negative currency impact. The operating margin improved to 7.0% of sales versus 6.4% in first-half 2015, buoyed by margin gains in all Business Sectors.
EBITDA (operating income + operating depreciation and amortization) was up 3.8% to €1,957 million, and the EBITDA margin came in at 10.0% of sales versus 9.5% in first-half 2015.
Non-operating costs totaled €180 million, with a rise in restructuring costs compared to the same period in 2015 owing to the roll-out of certain projects earlier than planned. The Group maintains its forecast of a slight decrease in restructuring costs for the year as a whole. The €45 million accrual to the provision for asbestos-related litigation involving CertainTeed in the US is unchanged from the last few half-year periods.
The net balance of capital gains and losses on disposals, asset write-downs and corporate acquisition fees was an expense of just €32 million versus an expense of €41 million in first-half 2015. In line with the increase in operating income, business income climbed 7.0% to €1,156 million.
Net financial expense improved significantly, down 12.5% to €287 million from €328 million, mainly reflecting the decrease in net debt; the cost of gross debt remained at 3.9% at June 30, 2016, in line with end-2015.
The income tax rate on recurring net income remained stable at 30%. Income tax expense totaled €261 million (€236 million in first-half 2015).
Recurring net income (excluding capital gains and losses on disposals, asset write-downs and material non-recurring provisions) jumped 13.0% to €624 million.
Net attributable income was up 6.8% to €596 million but jumped 20.9% excluding net income relating to Verallia in 2015.
Capital expenditure fell to €428 million including a negative currency impact (€457 million for the same period in 2015). Capex represented 2.2% of sales compared to 2.3% in the same period one year earlier.
Cash flow from operations rose 5.4% to €1,260 million; before the tax impact of capital gains and losses on disposals, asset write-downs and material non-recurring provisions, cash flow from operations advanced 5.6% to €1,251 million and free cash flow rose 13.0% to €823 million (4.2% of sales versus 3.7% in first-half 2015).
The difference between EBITDA and capital expenditure improved, up 7.0% to €1,529 million (€1,429 million in first-half 2015), representing 7.8% of sales (7.2% in first-half 2015).
Operating working capital requirements (operating WCR) totaled €4,244 million (€4,448 million at June 30, 2015) and represented 39.1 days' sales, an improvement of 1.7 days year-on-year, owing chiefly to the decrease in inventories.
Investments in securities were limited, at €68 million (€92 million in first-half 2015) and correspond to small-scale acquisitions in the three business sectors.
Net debt fell 17.1% from €8.0 billion at June 30, 2015 to €6.6 billion at June 30, 2016, reflecting the favorable impact of the Verallia disposal in second-half 2015, partly offset by the dividend paid out in June 2016 compared to the payment in July 2015, and by the €857 million in share buybacks over the last two half-year periods. Net debt represents 36% of consolidated equity, compared to 40% at end-June 2015.
The net debt to EBITDA ratio on a rolling 12-month basis came in at 1.7, compared to 2.1 one year earlier.
Some 1,700 claims were filed against CertainTeed in the first half of 2016 (versus 2,000 claims in first-half 2015).
At the same time, around 2,100 claims were settled (versus 2,000 in first-half 2015), bringing the total number of outstanding claims at June 30, 2016 to around 35,200, down slightly on December 31, 2015 (35,600 claims).
A total of USD 89 million in indemnity payments were made in the US in the 12 months to June 30, 2016, versus USD 65 million in the year to December 31, 2015, reflecting the catch-up in payments in respect of settlements still to be documented.
After a first half in line with our forecasts, our outlook for the second half is as follows:
The Group confirms its action priorities for the year as a whole:
In line with its long-term objectives, the Group bought back 10.9 million shares and canceled 11 million shares in the first six months of 2016.
An information meeting will be held at 8:30am (GMT + 1) on July 29, 2016 and will be broadcast live on www.saint-gobain.com
Sales for the first nine months of 2016: October 27, 2016, after close of trading on the Paris Bourse.
| Analyst/Investor relations | Press relations | |||
|---|---|---|---|---|
| Gaetano Terrasini Vivien Dardel Florent Nouveau |
+33 1 47 62 32 52 +33 1 47 62 44 29 +33 1 47 62 30 93 |
Charles Hufnagel Susanne Trabitzsch |
+33 1 47 62 30 10 +33 1 47 62 43 25 |
All indicators contained in this press release (not defined in the footnotes) are explained in the notes to the financial statements in the interim financial report, available by clicking here: https://www.saint-gobain.com/en/finance/regulated-information/half-yearly-financialreport
The glossary below shows the note of the interim financial statements in which you can find an explanation of each indicator.
| Note 3 |
|---|
| Note 7 |
| Note 3 |
| Note 3 |
| Note 3 |
| Note 7 |
| Note 3 |
| Note 3 |
This press release contains forward-looking statements with respect to Saint-Gobain's financial condition, results, business, strategy, plans and outlook. Forward-looking statements are generally identified by the use of the words "expect", "anticipate", "believe", "intend", "estimate", "plan" and similar expressions. Although Saint-Gobain believes that the expectations reflected in such forwardlooking statements are based on reasonable assumptions as at the time of publishing this document, investors are cautioned that these statements are not guarantees of its future performance. Actual results may differ materially from the forward-looking statements as a result of a number of known and unknown risks, uncertainties and other factors, many of which are difficult to predict and are generally beyond the control of Saint-Gobain, including but not limited to the risks described in Saint-Gobain's registration document available on its website (www.saint-gobain.com). Accordingly, readers of this document are cautioned against relying on these forward-looking statements. These forward-looking statements are made as of the date of this document. Saint-Gobain disclaims any intention or obligation to complete, update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
This press release does not constitute any offer to purchase or exchange, nor any solicitation of an offer to sell or exchange securities of Saint-Gobain.
For any further information, please visit www.saint-gobain.com
| I. SALES | H1 2015 (in EUR m) |
H1 2016 (in EUR m) |
Change on an actual structure basis |
Change on a comparable structure basis |
Change on a comparable structure and currency basis |
|---|---|---|---|---|---|
| By sector and division: | |||||
| Innovative Materials 1 | 4,922 | 4,912 | -0.2% | -0.4% | +4.4% |
| Flat Glass | 2,633 | 2,656 | +0.9% | +0.8% | +6.5% |
| High-Performance Materials | 2,297 | 2,264 | -1.4% | -1.8% | +2.0% |
| Construction Products 1 | 6,079 | 6,008 | -1.2% | -2.1% | +1.6% |
| Interior Solutions | 3,197 | 3,297 | +3.1% | +2.0% | +5.2% |
| Exterior Solutions | 2,913 | 2,753 | -5.5% | -6.2% | -2.0% |
| Building Distribution | 9,338 | 9,104 | -2.5% | +0.6% | +3.1% |
| Internal sales and misc. | -479 | -475 | n.m. | n.m. | n.m. |
| Group Total | 19,860 | 19,549 | -1.6% | -0.6% | +2.9% |
| 1 including intra-sector eliminations |
|||||
| By geographic area: | |||||
| France | 5,282 | 5,270 | -0.2% | +0.6% | +0.6% |
| Other Western European countries | 8,574 | 8,660 | +1.0% | +1.6% | +4.3% |
| North America | 2,738 | 2,674 | -2.3% | +3.1% | +3.6% |
| Emerging countries and Asia | 4,219 | 3,956 | -6.2% | -6.5% | +4.9% |
| Internal sales | -953 | -1,011 | n.m. | n.m. | n.m. |
| Group Total | 19,860 | 19,549 | -1.6% | -0.6% | +2.9% |
| II. OPERATING INCOME | H1 2015 (in EUR m) |
H1 2016 (in EUR m) |
Change on an actual structure basis |
H1 2015 (in % of sales) |
H1 2016 (in % of sales) |
|---|---|---|---|---|---|
| By sector and division: | |||||
| Innovative Materials | 504 | 552 | +9.5% | 10.2% | 11.2% |
| Flat Glass | 194 | 234 | +20.6% | 7.4% | 8.8% |
| High-Performance Materials | 310 | 318 | +2.6% | 13.5% | 14.0% |
| Construction Products | 529 | 564 | +6.6% | 8.7% | 9.4% |
| Interior Solutions | 288 | 335 | +16.3% | 9.0% | 10.2% |
| Exterior Solutions | 241 | 229 | -5.0% | 8.3% | 8.3% |
| Building Distribution | 242 | 253 | +4.5% | 2.6% | 2.8% |
| Misc. | 0 | -1 | n.m. | n.m. | n.m. |
| Group Total | 1,275 | 1,368 | +7.3% | 6.4% | 7.0% |
| By geographic area: | |||||
| France | 136 | 124 | -8.8% | 2.6% | 2.4% |
| Other Western European countries | 460 | 513 | +11.5% | 5.4% | 5.9% |
| North America | 259 | 310 | +19.7% | 9.5% | 11.6% |
| Emerging countries and Asia | 420 | 421 | +0.2% | 10.0% | 10.6% |
| Group Total | 1,275 | 1,368 | +7.3% | 6.4% | 7.0% |
| III. BUSINESS INCOME | H1 2015 (in EUR m) |
H1 2016 (in EUR m) |
Change on an actual structure basis |
H1 2015 (in % of sales) |
H1 2016 (in % of sales) |
|---|---|---|---|---|---|
| By sector and division: | |||||
| Innovative Materials | 463 | 462 | -0.2% | 9.4% | 9.4% |
| Flat Glass | 181 | 177 | -2.2% | 6.9% | 6.7% |
| High-Performance Materials | 282 | 285 | +1.1% | 12.3% | 12.6% |
| Construction Products | 475 | 528 | +11.2% | 7.8% | 8.8% |
| Interior Solutions | 258 | 319 | +23.6% | 8.1% | 9.7% |
| Exterior Solutions | 217 | 209 | -3.7% | 7.4% | 7.6% |
| Building Distribution | 196 | 219 | +11.7% | 2.1% | 2.4% |
| Misc. (a) | -54 | -53 | n.m. | n.m. | n.m. |
| Group Total | 1,080 | 1,156 | +7.0% | 5.4% | 5.9% |
| By geographic area: | |||||
| France | 107 | 90 | -15.9% | 2.0% | 1.7% |
| Other Western European countries | 393 | 465 | +18.3% | 4.6% | 5.4% |
| North America (a) | 200 | 226 | +13.0% | 7.3% | 8.5% |
| Emerging countries and Asia | 380 | 375 | -1.3% | 9.0% | 9.5% |
| Group Total | 1,080 | 1,156 | +7.0% | 5.4% | 5.9% |
(a) after asbestos-related charge (before tax) of €45m in H1 2016 and in H1 2015
| IV. CASH FLOW | H1 2015 (in EUR m) |
H1 2016 (in EUR m) |
Change on an actual structure basis |
H1 2015 (in % of sales) |
H1 2016 (in % of sales) |
|---|---|---|---|---|---|
| By sector and division: | |||||
| Innovative Materials | 465 | 502 | +8.0% | 9.4% | 10.2% |
| Flat Glass | 221 | 254 | +14.9% | 8.4% | 9.6% |
| High-Performance Materials | 244 | 248 | +1.6% | 10.6% | 11.0% |
| Construction Products | 415 | 420 | +1.2% | 6.8% | 7.0% |
| Building Distribution | 188 | 191 | +1.6% | 2.0% | 2.1% |
| Misc. (a) | 127 | 147 | n.m. | n.m. | n.m. |
| Group Total | 1,195 | 1,260 | +5.4% | 6.0% | 6.4% |
| By geographic area: | |||||
| France | 90 | 89 | -1.1% | 1.7% | 1.7% |
| Other Western European countries | 470 | 505 | +7.4% | 5.5% | 5.8% |
| North America (a) | 200 | 211 | +5.5% | 7.3% | 7.9% |
| Emerging countries and Asia | 435 | 455 | +4.6% | 10.3% | 11.5% |
| Group Total | 1,195 | 1,260 | +5.4% | 6.0% | 6.4% |
(a) after asbestos-related charge (after tax) of €27m in H1 2016 and in H1 2015
| V. CAPITAL EXPENDITURE | H1 2015 (in EUR m) |
H1 2016 (in EUR m) |
Change on an actual structure basis |
H1 2015 (in % of sales) |
H1 2016 (in % of sales) |
|---|---|---|---|---|---|
| By sector and division: | |||||
| Innovative Materials | 165 | 176 | +6.7% | 3.4% | 3.6% |
| Flat Glass | 91 | 102 | +12.1% | 3.5% | 3.8% |
| High-Performance Materials | 74 | 74 | +0.0% | 3.2% | 3.3% |
| Construction Products | 183 | 164 | -10.4% | 3.0% | 2.7% |
| Interior Solutions | 110 | 111 | +0.9% | 3.4% | 3.4% |
| Exterior Solutions | 73 | 53 | -27.4% | 2.5% | 1.9% |
| Building Distribution | 82 | 69 | -15.9% | 0.9% | 0.8% |
| Misc. | 27 | 19 | n.m. | n.m. | n.m. |
| Group Total | 457 | 428 | -6.3% | 2.3% | 2.2% |
| By geographic area: | |||||
| France | 69 | 81 | +17.4% | 1.3% | 1.5% |
| Other Western European countries | 107 | 108 | +0.9% | 1.2% | 1.2% |
| North America | 119 | 81 | -31.9% | 4.3% | 3.0% |
| Emerging countries and Asia | 162 | 158 | -2.5% | 3.8% | 4.0% |
| Group Total | 457 | 428 | -6.3% | 2.3% | 2.2% |
| H1 | H1 | Change on an | H1 | H1 | |
|---|---|---|---|---|---|
| 2015 | 2016 | actual structure | 2015 | 2016 | |
| (in EUR m) | (in EUR m) | basis | (in % of sales) | (in % of sales) | |
| By sector and division: | |||||
| Innovative Materials | 731 | 768 | +5.1% | 14.9% | 15.6% |
| Flat Glass | 347 | 369 | +6.3% | 13.2% | 13.9% |
| High-Performance Materials | 384 | 399 | +3.9% | 16.7% | 17.6% |
| Construction Products | 765 | 795 | +3.9% | 12.6% | 13.2% |
| Interior Solutions | 448 | 491 | +9.6% | 14.0% | 14.9% |
| Exterior Solutions | 317 | 304 | -4.1% | 10.9% | 11.0% |
| Building Distribution | 374 | 380 | +1.6% | 4.0% | 4.2% |
| Misc. | 16 | 14 | n.m. | n.m. | n.m. |
| Group Total | 1,886 | 1,957 | +3.8% | 9.5% | 10.0% |
| By geographic area: | |||||
| France | 287 | 265 | -7.7% | 5.4% | 5.0% |
| Other Western European countries | 650 | 697 | +7.2% | 7.6% | 8.0% |
| North America | 349 | 399 | +14.3% | 12.7% | 14.9% |
| Emerging countries and Asia | 600 | 596 | -0.7% | 14.2% | 15.1% |
| Group Total | 1,886 | 1,957 | +3.8% | 9.5% | 10.0% |
| SALES | Q2 2015 (in EUR m) |
Q2 2016 (in EUR m) |
Change on an actual structure basis |
Change on a comparable structure basis |
Change on a comparable structure and currency basis |
|---|---|---|---|---|---|
| By sector and division: | |||||
| Innovative Materials 1 | 2,537 | 2,516 | -0.8% | -0.9% | +4.5% |
| Flat Glass | 1,348 | 1,380 | +2.4% | +2.2% | +8.0% |
| High-Performance Materials | 1,193 | 1,141 | -4.4% | -4.5% | +0.4% |
| Construction Products 1 | 3,246 | 3,211 | -1.1% | -1.9% | +2.4% |
| Interior Solutions | 1,656 | 1,688 | +1.9% | +0.9% | +4.8% |
| Exterior Solutions | 1,606 | 1,545 | -3.8% | -4.4% | +0.1% |
| Building Distribution | 5,023 | 4,934 | -1.8% | +1.8% | +4.6% |
| Internal sales and misc. | -255 | -248 | n.m. | n.m. | n.m. |
| Group Total | 10,551 | 10,413 | -1.3% | -0.1% | +3.8% |
| 1 including intra-sector eliminations |
|||||
| By geographic area: | |||||
| France | 2,743 | 2,756 | +0.5% | +1.3% | +1.3% |
| Other Western European countries | 4,584 | 4,684 | +2.2% | +2.8% | +6.3% |
| North America | 1,493 | 1,429 | -4.3% | +1.7% | +4.3% |
| Emerging countries and Asia | 2,215 | 2,072 | -6.5% | -6.2% | +3.9% |
| Internal sales | -484 | -528 | n.m. | n.m. | n.m. |
| Group Total | 10,551 | 10,413 | -1.3% | -0.1% | +3.8% |
| in € million | June 30, 2016 | Dec 31, 2015 |
|---|---|---|
| Assets | ||
| Goodwill | 10,457 | 10,683 |
| Other intangible assets | 2,641 | 2,748 |
| Property, plant and equipment | 11,373 | 11,587 |
| Investments in associates | 331 | 319 |
| Deferred tax assets | 1,548 | 1,337 |
| Other non-current assets | 660 | 635 |
| Non-current assets | 27,010 | 27,309 |
| Inventories | 5,964 | 5,715 |
| Trade accounts receivable | 5,906 | 4,751 |
| Current tax receivable Other accounts receivable |
264 1,522 |
296 1,405 |
| Cash and cash equivalents | 2,900 | 5,380 |
| Current assets | 16,556 | 17,547 |
| Total assets | 43,566 | 44,856 |
| Liabilities and Shareholders' equity | ||
| Capital stock | 2,219 | 2,244 |
| Additional paid-in capital and legal reserve | 6,081 | 6,341 |
| Retained earnings and net income for the year | 10,591 | 10,805 |
| Cumulative translation adjustments | -913 | -528 |
| Fair value reserves | 147 | 181 |
| Treasury stock | -78 | -87 |
| Shareholders' equity | 18,047 | 18,956 |
| Minority interests | 360 | 364 |
| Total equity | 18,407 | 19,320 |
| Long-term debt | 5,829 | 7,330 |
| Provisions for pensions and other employee benefits | 4,082 | 3,849 |
| Deferred tax liabilities | 474 | 466 |
| Provisions for other liabilities and charges | 1,298 | 1,276 |
| Non-current liabilities | 11,683 | 12,921 |
| Current portion of long-term debt | 2,933 | 2,231 |
| Current portion of provisions for other liabilities and charges | 428 | 454 |
| Trade accounts payable | 5,699 | 5,716 |
| Current tax liabilities | 167 | 150 |
| Other accounts payable | 3,487 | 3,448 |
| Short-term debt and bank overdrafts | 762 | 616 |
| Current liabilities | 13,476 | 12,615 |
| Total equity and liabilities | 43,566 | 44,856 |
| (in € million) | H1 2015 |
H1 2016 |
|---|---|---|
| Net income of continuing operations attributable to equity holders of the parent | 493 | 596 |
| Minority interests in net income | 23 | 14 |
| Share in net income of associates, net of dividends received | (12) | (8) |
| Depreciation, amortization and impairment of assets | 633 | 608 |
| Gains and losses on disposals of assets | 10 | 9 |
| Unrealized gains and losses arising from changes in fair value and share-based payments Changes in inventories |
21 (250) |
34 (300) |
| Changes in trade accounts receivable and payable, and other accounts receivable and payable | (1,128) | (1,081) |
| Changes in tax receivable and payable Changes in deferred taxes and provisions for other liabilities and charges |
24 43 |
55 (29) |
| Net cash from operating activities of continuing operations | (143) | (102) |
| Net cash from operating activities of discontinued operations | 61 | 0 |
| Net cash from operating activities | (82) | (102) |
| Acquisitions of property, plant and equipment [ H1 2015: (457), H1 2016: (428) ] and intangible assets | (511) | (480) |
| Acquisitions of property, plant and equipment in finance leases | (8) | (9) |
| Increase (decrease) in amounts due to suppliers of fixed assets Acquisitions of shares in consolidated companies [ H1 2015: (85), H1 2016: (56) ], net of debt acquired |
(135) (86) |
(111) (64) |
| Acquisitions of other investments Increase in investment-related liabilities |
(7) 4 |
(12) 2 |
| Decrease in investment-related liabilities | (14) | (2) |
| Investments | (757) | (676) |
| Disposals of property, plant and equipment and intangible assets | 73 | 31 |
| Disposals of shares in consolidated companies, net of net debt divested | 7 | 25 |
| Disposals of other investments | 0 | 1 |
| Divestments | 80 | 57 |
| Increase in loans, deposits and short-term loans Decrease in loans, deposits and short-term loans |
(84) 33 |
(72) 36 |
| Net cash from (used in) investment and divestment activities of continuing operations | (728) | (655) |
| Net cash from (used in) investment and divestment activities of discontinued operations | (107) | 0 |
| Net cash from (used in) investment and divestment activities | (835) | (655) |
| Issues of capital stock Minority interests' share in capital increases of subsidiaries |
394 12 |
137 0 |
| (Increase) decrease in treasury stock | (104) | (416) |
| Dividends paid | (695) | (681) |
| Increase (decrease) in dividends payable | 455 | 2 |
| Dividends paid to minority shareholders by consolidated companies | (34) | (29) |
| Net cash from (used in) financing activities of continuing operations Net cash from (used in) financing activities of discontinued operations |
28 (1) |
(987) 0 |
| Net Cash from (used in) financing activities | 27 | (987) |
| Increase (decrease) in net debt | (890) | (1,744) |
| Net effect of exchange rate changes on net debt | (13) | 1 |
| Net effect from changes in fair value on net debt | 33 | (84) |
| Net effect of exchange rate changes on net debt of discontinued operations Transfer of net debt in assets and liabilities of discontinued operations |
(3) 99 |
0 0 |
| Net debt at beginning of period | (7,221) | (4,797) |
| Net debt at end of period | (7,995) | (6,624) |
| Amount and structure of net debt | €bn | |
|---|---|---|
| Gross debt | 9.5 | |
| Cash & cash equivalents | 2.9 | At end of June 2016, 77% of gross debt was at fixed interest rates and the average cost of gross debt was 3.9% |
| Net debt | 6.6 | |
Comments
| Breakdown of gross debt | 9.5 | ||
|---|---|---|---|
| Bond debt and perpetual notes | 7.7 | ||
| September 2016 | 0.5 | ||
| December 2016 | 0.4 | (GBP 0.3bn) | |
| April 2017 | 0.1 | (YEN 5bn) | |
| April 2017 | 1.2 | ||
| June 2017 | 0.2 | ||
| March 2018 | 0.1 | (NOK 0.8bn) | |
| October 2018 | 0.7 | ||
| September 2019 | 0.9 | ||
| June 2021 | 0.7 | ||
| After 2021 | 2.9 | ||
| Other long-term debt | 0.5 | (including EUR 0.2bn long-term securitization) | |
| Short-term debt | 1.3 | (excluding bonds) | |
| NEU CP (Negotiable European Commercial Paper < 3 month) |
0.0 | Maximum amount of bond issue: €3bn | |
| Securitization | 0.6 | (EUR 0.3bn equivalent in USD + EUR 0.3bn) | |
| Local debt and accrued interest | 0.7 | Annual rollover; several hundreds of different sources of financing |
| Credit lines, cash & cash equivalents | 6.9 | |
|---|---|---|
| Cash and cash equivalents Back-up credit-lines |
2.9 4.0 |
See breakdown below |
All lines are confirmed and undrawn, with no Material Adverse Change (MAC) clause
| Expiry | Covenants | ||
|---|---|---|---|
| Syndicated line: | €2.5bn | December 2020 | None |
| Syndicated line: | €1.5bn | December 2018 | None |
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