Quarterly Report • Jul 29, 2016
Quarterly Report
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| 1. | Key events in the period | 3 |
|---|---|---|
| 1. | Faits marquants de la période | 3 |
| 2. | Revenue | 4 |
| 1. | Faits marquants de la période | 3 |
| 3. | Résults | 6 |
| 1. | Faits marquants de la période | 3 |
| 4. | Cash flows | 8 |
| 1. | Faits marquants de la période | 3 |
| 5. | Balance sheet and net financial debt | 9 |
| 1. | Faits marquants de la période | 3 |
| 6. | Contracting order book | 10 |
| 1. | Faits marquants de la période | 3 |
| 7. | Interim dividend | 11 |
| 1. | Faits marquants de la période | 3 |
| 8. | Main transactions with related parties | 11 |
| 1. | Faits marquants de la période | 3 |
| 9. | Risk factors | 11 |
| 1. | Faits marquants de la période | 3 |
The first half of 2016 brought good momentum in French motorway traffic and airport passenger traffic in the Concessions business. The Group also continued its international expansion: in the airports business with the integration of AERODOM, which holds the concessions for six airports in the Dominican Republic, and the start of the concession for two airports in the Kansai region of Japan; and in energy, with the acquisition by VINCI Energies of J&P Richardson in Australia. In Contracting, trends seen in the first quarter continued, with a limited decline in revenue and an upturn in orders, particularly in France. Profitability improved with a rise in Ebitda, recurring operating income and net income. The Group's financial position remained solid, giving it a sound base for implementing its growth strategy, as shown by Moody's decision to upgrade its credit rating.
Consolidated revenue totalled €17.6 billion in the first half of 2016, a slight decline with respect to the first half of 2015 (down 1.5% on an actual basis). That was due to a 2.6% fall in revenue on an organic basis, a positive 2.3% impact from changes in the consolidation scope – i.e. acquisitions by VINCI Energies, VINCI Construction and VINCI Airports outside France – and a 1.2% negative currency effect. Of VINCI's total revenue, 41.3% was generated outside France in the first half of 2016 (40.6% in the first half of 2015).
Cash flow from operations before tax and financing costs (Ebitda) totalled €2.6 billion, up 5.5% and equal to 14.8% of revenue (13.8% of revenue in the first half of 2015).
Operating income from ordinary activities (Ebit) was €1,720 million, an increase of 11.7% compared with the first half of 2015 (€1,540 million). Ebit margin rose to 9.8% (8.6% in the first half of 2015).
Recurring operating income – including the impact of share-based payments (IFRS 2), the Group's share of the income or loss of companies accounted for under the equity method, and other recurring operating items – rose 7.3% to €1,702 million (€1,586 million in the first half of 2015).
Consolidated net income attributable to owners of the parent was €920 million, up €101 million (+12.4%) compared with the first half of 2015 (€819 million). Earnings per share amounted to €1.65 (€1.47 in the first half of 2015), up 12.1%, after taking account of dilutive instruments.
Net financial debt stood at €14.4 billion at 30 June 2016, up €0.5 billion relative to 30 June 2015. By comparison with 31 December 2015, net financial debt was up almost €2.0 billion, including €1.1 billion due to financial investments during the period (mainly by VINCI Airports) and €0.7 billion relating to the payment of the final dividend for 2015.
In May 2016, Moody's upgraded its long-term credit ratings on VINCI and ASF from Baa1 to A3 and its short-term ratings from P-2 to P-1, with stable outlook. Those upgrades confirm the Group's credit quality.
In the first half of 2016, the Group issued €500 million of 10-year bonds and took out a €390 million, 17-year repayment loan from the European Investment Bank (EIB).
At 30 June 2016, the Group had liquidity of €8.7 billion, comprising €2.7 billion of managed net cash and €6.0 billion of unused confirmed bank credit facilities due to expire in 2021.
Order intake in the Contracting business amounted to €16.9 billion in the first half of 2016, up 10% year-on-year, with a 14% increase in France and a 7% rise outside France.
At 30 June 2016, the order book stood at €29.2 billion, a year-on-year increase of almost 2%, comprising a 7% increase in France and a 3% decline outside France, and an increase of almost 6% relative to 31 December 2015. It represents 11 months of average business activity in the Contracting business.
In February, VINCI Energies acquired Australian company J&P Richardson. The company is based in Queensland and carries out engineering, installation and maintenance work relating to electricity and water distribution networks, telecoms networks and industrial processes. It employs 500 people and generated revenue of A\$130 million in 2015 (about €85 million). The acquisition strengthens the Group's positions in the region after its recent purchases of HEB Construction and Electrix.
On 1 April 2016, VINCI Airports took over the operation of two airports in the Kansai region of Japan for a 44-year period, under a concession contract signed on 15 December 2015. Kansai Airports' main shareholders are VINCI Airports (40%) and Japanese company Orix (40%), with the remainder held by around 30 Japanese companies operating in the region. The two airports handled 37.7 million passengers in 2015, and should benefit from growth in tourism in Japan and the rise of low-cost airlines. The financing of the transaction amounted to €2.1 billion (¥260 billion), including €640 million (¥80 billion) of equity invested by the shareholders and €1.4 billion (¥180 billion) of long-term bank debt.
On 8 April 2016, VINCI Airports completed the acquisition of Dominican Republic-based company AERODOM (Aeropuertos Dominicanos Siglo XXI SA), which holds a concession contract with the government of the Dominican Republic to operate six of the country's nine airports in the country until March 2030. These include Las Américas international airport, which serves the capital Santo Domingo. In 2015, 4.6 million passengers passed through AERODOM's airports, 98% of whom travelled on international flights. In 2015, the company generated revenue of \$136 million.
On 13 June, VINCI announced an agreement with Ardian Infrastructure and Crédit Agricole Assurances with a view to selling its 24.6% stake in Indigo (formerly known as VINCI Park). The transaction is subject to the approval of the competition authorities and should be completed in the second half of 2016. It had no impact on the Group's results for the first half of 2016.
Major contracts won by the Group in the first half of 2016 included the following.
In the first half of 2016, the Group repaid €771 million of debt, including €158 million of loans taken out by the ASF group from the Caisse Nationale des Autoroutes (CNA) and the EIB. In April, VINCI redeemed €500 million of 3-year bonds issued in 2013.
In the first half of 2016, ASF carried out the following transactions:
At 30 June 2016, the Group's gross long-term financial debt totalled €18 billion. Its average maturity was 4.5 years, and the average interest rate was 3.17% (3.27% at 31 December 2015 and 3.37% at 30 June 2015).
Consolidated revenue totalled €17.6 billion in the first half of 2016, down 1.5% on an actual basis. Revenue fell 2.6% on a comparable structure basis, and there was a 1.2% negative currency effect, partly offset by a 2.3% boost from changes in the consolidation scope. Those changes related to acquisitions made in 2016 by VINCI Energies (J&P Richardson in Australia, Smart Grid Energy in France) and VINCI Airports (AERODOM in the Dominican Republic), along with the impact of acquisitions carried out in 2015 (mainly Orteng in Brazil and HEB Construction in New Zealand).
Concessions revenue totalled €2.9 billion, up 6.8% on an actual basis or 5.8% like-for-like. Revenue rose 4.9% at VINCI Autoroutes and 11.4% at VINCI Airports.
Contracting revenue (VINCI Energies, Eurovia, VINCI Construction) was €14.7 billion, down 3.6% on an actual basis or down 4.7% on a comparable structure basis.
In France, revenue was €10.3 billion, down 2.6% or 3.3% on a comparable structure basis, of which 1.8 points were due to progress with the Tours–Bordeaux HSL project, which was 94% complete at 30 June 2016. Concessions revenue grew 4.6%, while Contracting revenue fell 5.9% (6.8% on a constant structure basis).
Outside France, revenue was €7.3 billion. It rose 0.2% on an actual basis by comparison with the first half of 2015 and fell 1.4% on a comparable structure basis, excluding a 2.9% negative currency effect and a positive 4.5% impact from changes in scope.
In the first half of 2016, the proportion of revenue generated outside France rose slightly to 41.3%, from 40.6% in the first half of 2015.
Business outside France accounted for 14.5% of revenue in Concessions (12.7% in the first half of 2015) and 46.7% of revenue in Contracting (45.4% in the first half of 2015).
| First half 2016 | First half 2015 | 2016/2015 change | ||
|---|---|---|---|---|
| (in € millions) | Actual | Comparable | ||
| Concessions | 2,882 | 2,699 | +6.8% | +5.8% |
| VINCI Autoroutes | 2,365 | 2,253 | +4.9% | +4.9% |
| VINCI Airports | 455 | 384 | +18.6% | +11.4% |
| Other concessions | 62 | 62 | +0.5% | +1.3% |
| Contracting | 14,695 | 15,244 | -3.6% | -4.7% |
| VINCI Energies | 4,960 | 4,795 | +3.4% | +0.4% |
| Eurovia | 3,282 | 3,445 | -4.7% | -3.8% |
| VINCI Construction | 6,453 | 7,005 | -7.9% | -8.6% |
| VINCI Immobilier | 265 | 261 | +1.5% | +1.5% |
| Intragroup eliminations | (223) | (324) | ||
| Revenue (*) | 17,619 | 17,880 | -1.5% | -2.6% |
| Concession subsidiaries' works revenue | 340 | 350 | -2.8% | -10.5% |
| Intragroup eliminations | (157) | (98) | ||
| Concession subsidiaries' revenue derived from works carried out by non Group companies |
183 | 252 | -27.3% | -38.0% |
| Total consolidated revenue | 17,802 | 18,132 | -1.8% | -3.0% |
(*) Excluding concession subsidiaries' works revenue.
VINCI Autoroutes: revenue amounted to €2,365 million in the first half of 2016, up 4.9% from the first half of 2015. Toll revenue increased 4.9% due to a 3.3% rise in traffic on the intercity network (light vehicles up 2.9%, heavy vehicles up 5.2%) including the positive leap-year effect, favourable weather conditions (except for the flooding that affected the A10 in late May on the Cofiroute network) and the ongoing economic recovery. There was also a positive impact from the A86 Duplex (0.1%), and price effects (1.5%).
VINCI Airports generated revenue of €455 million in the first half of 2016, an increase of 18.6% or 11.4% on a comparable structure basis. Passenger traffic continued to grow at a rapid pace (10.2% excluding the integration of airports in the Dominican Republic from April), with 11.9% growth in Portugal, 4.9% in Cambodia and 5.7% in France.
In France, revenue declined 5.9% to €7,830 million (down 6.8% on a constant structure basis). The decline in activity caused by progress with the SEA HSL project, which was 94%-complete at 30 June 2016, accounted for 2.2 points of the fall in revenue (€132 million in the first half of 2016 versus €328 million in the year-earlier period).
Outside France, revenue totalled €6,866 million, down 0.9% on an actual basis. The 4.2% boost from changes in scope mostly offset a 2.1% organic decline and a 3.0% negative currency effect.
In France, revenue totalled €2,628 million, up 2.3% compared with the first half of 2015 on an actual basis, due to the integration of APX, a "cloud builder" acquired in the second half of 2015, and Smart Grid Energy, acquired in the second quarter of 2016. Revenue fell 1.0% on a comparable structure basis, with performance varying between business areas. In the information and communication technology (ICT) segment, business levels rose slightly. Growth in company communication offset a significant fall in telecoms infrastructure, due in particular to the completion of the GSM-R project. In energy and mobility infrastructure, revenue increased, while it declined in the service and industrial sectors.
Outside France, revenue totalled €2,332 million (up 4.8% actual; up 2.1% on a comparable structure basis). The growth on an actual basis was driven by acquisitions at the start of the year (J&P Richardson in Australia) and in the second quarter of 2015 (Orteng in Brazil). Growth in revenue at constant scope and exchange rates reflects varying situations between regions. In Europe, there was robust growth in Benelux, Germany and Switzerland and business levels recovered in the UK and Southern Europe, but they fell in Central Europe. Outside Europe, revenue on a comparable structure basis fell in Brazil, Indonesia and Australia, was stable in Morocco and rose in New Zealand.
In France, revenue was €1,918 million, down 7% on both an actual and comparable structure basis. This was due mainly to local authority budget cuts for traditional road activities and progress with the SEA HSL project, which accounted for 2 points of the decline.
Outside France, revenue totalled €1,364 million, down 1.3% on an actual basis. Excluding changes in scope (positive effect of 0.3%) and currency effects (negative effect of 2.7%, mainly due to sterling and the Canadian dollar), revenue rose 1.1% on a comparable structure basis, with situations varying between countries. Revenue fell in the Czech Republic and Slovakia due to the completion of major projects ahead of new European investment plans. It also fell in Poland and Spain, was stable in the UK and Canada, and grew in Germany, the USA and Chile.
Seasonal variations are significant at Eurovia, since first-half revenue accounted for only 44% of the full-year total in 2015. Such variations are particularly large in Central Europe and Canada.
In France, revenue came in at €3,283 million, down 10.9% on both an actual and comparable structure basis. The decline was due to lower order intake in building and civil engineering in 2015, completion of work on the Tours–Bordeaux HSL (negative impact of around 3%) and of several other major building and civil engineering projects, both in the Paris region and elsewhere in France. Those factors were not fully offset by the ramp-up of new motorway projects (A9, A63), the new coastal highway on Reunion Island and the start of new contracts recently won. On the plus side, Soletanche Freyssinet saw higher business levels in specialist works.
Outside France, revenue amounted to €3,170 million, down 4.5% on an actual basis. Revenue was down 6.1% in organic terms and there was a 4.0% negative currency effect, which was not fully offset by changes in scope in 2015, when the Group took full control of Grupo Rodio Kronsa and acquired HEB Construction. On a comparable structure basis, revenue fell at Sogea-Satom and Entrepose, which were affected by the sharp fall in investment by major African hydrocarbon-producing countries and by companies in the oil and gas industry. In the United Kingdom, business levels stabilised at VINCI Construction plc. Soletanche Freyssinet's revenue fell slightly after two years of rapid growth, and the same was true of VINCI Construction Grands Projets, due to the timing of project phases.
The French residential market was buoyant, with apartment reservations rising 24% to 2,360 and the start of construction work on new projects (up 42% to 1,762 units). This offset the decline in the commercial property business.
| First half 2016 | % of total | First half 2015 | 2016/2015 change | ||
|---|---|---|---|---|---|
| (in € millions) | Actual | At constant exchange rates | |||
| France | 10,348 | 58.7% | 10,621 | -2.6% | -2.6% |
| United Kingdom | 1,261 | 7.2% | 1,331 | -5.3% | +0.8% |
| Germany | 1,192 | 6.8% | 1,150 | +3.6% | +3.6% |
| Central and Eastern Europe | 626 | 3.6% | 708 | -11.5% | -10.5% |
| Rest of Europe | 1,378 | 7.8% | 1,257 | +9.7% | +10.5% |
| Europe excl. France | 4,457 | 25.3% | 4,446 | +0.3% | +2.5% |
| Americas | 1,074 | 6.1% | 1,064 | +1.0% | +7.1% |
| Africa | 661 | 3.8% | 671 | -1.4% | +0.5% |
| Russia, Asia Pacific and Middle East | 1,078 | 6.1% | 1,078 | -0.0% | +4.6% |
| International excl. Europe | 2,814 | 16.0% | 2,813 | +0.0% | +4.6% |
| Total International | 7,271 | 41.3% | 7,259 | +0.2% | +3.3% |
| Revenue (*) | 17,619 | 100.0% | 17,880 | -1.5% | -0.2% |
(*) Excluding concession subsidiaries' works revenue.
Operating income from ordinary activities (Ebit) was €1,720 million, an increase of 11.7% compared with the first half of 2015 (€1,540 million).
Ebit margin rose from 8.6% in the first half of 2015 to 9.8% in the first half of 2016, mainly due to higher Ebit in the Concessions business, which accounted for a larger share of the Group's business mix.
| (in € millions) | First half 2016 | % of revenue (*) | First half 2015 | % of revenue (*) | 2016/2015 change |
|---|---|---|---|---|---|
| Concessions | 1,361 | 47.2% | 1,186 | 44.0% | 14.7% |
| VINCI Autoroutes | 1,205 | 51.0% | 1,070 | 47.5% | 12.7% |
| VINCI Airports | 160 | 35.3% | 138 | 35.9% | 16.5% |
| Other concessions | (4) | -7.2% | (21) | -34.0% | - |
| Contracting | 338 | 2.3% | 315 | 2.1% | 7.5% |
| VINCI Energies | 274 | 5.5% | 260 | 5.4% | 5.5% |
| Eurovia | (28) | -0.9% | (48) | -1.4% | 40.9% |
| VINCI Construction | 92 | 1.4% | 103 | 1.5% | -10.0% |
| VINCI Immobilier | 8 | 3.1% | 23 | 9.0% | -64.9% |
| Holding companies | 12 | - | 15 | - | - |
| Operating income from ordinary activities (Ebit) | 1,720 | 9.8% | 1,540 | 8.6% | 11.7% |
| Share-based payments (IFRS 2) | (43) | - | (36) | - | - |
| Income/(loss) of companies accounted for under the equity method | 2 | - | 49 | - | - |
| Other recurring operating items | 23 | - | 33 | - | - |
| Recurring operating income | 1,702 | 9.7% | 1,586 | 8.9% | 7.3% |
| Non-recurring operating items | 5 | - | (9) | - | - |
| Operating income | 1,706 | 9.7% | 1,577 | 8.8% | 8.2% |
NB: Operating income from ordinary activities is defined as operating income before the effects of share-based payments (IFRS 2), the income or loss of companies accounted for under the equity method and other recurring and non-recurring operating items.
(*) Excluding concession subsidiaries' works revenue.
In Concessions, Ebit was €1,361 million, representing 47.2% of revenue, up 14.7% relative to the first-half 2015 figure (€1,186 million, equal to 44.0% of revenue).
At VINCI Autoroutes, Ebit amounted to €1,205 million, up 12.7% relative to the first-half 2015 figure of €1,070 million. Ebit margin rose from 47.5% in the first half of 2015 to 51.0% in the first half of 2016. The increase was driven by higher revenue and a firm grip on operating expenses. Depreciation charges were also spread over a longer period because of concession extensions under the motorway stimulus plan agreed in France in July 2015.
Ebit at VINCI Airports rose 16.5% to €160 million (35.3% of revenue compared with 35.9% in the first half of 2015). As well as the acquisition of AERODOM, the increase was driven by good performance at the main airports, particularly in Portugal.
In the Contracting business, Ebit rose €24 million to €338 million compared with €315 million in the first half of 2015. Ebit margin rose to 2.3% (2.1% in the first half of 2015), due to progress at VINCI Energies and Eurovia. The slight reduction in VINCI Construction's Ebit margin was caused by lower business levels in France and Africa, which were not fully offset by VINCI Construction UK returning to breakeven.
At VINCI Energies, Ebit was €274 million, up €14 million or 5.5% relative to the first half of 2015 (€260 million). Ebit margin rose from 5.4% in the first half of 2015 to 5.5% in the first half of 2016, due to a good overall performance in France and Europe.
Eurovia made a €28 million loss at the Ebit level, although that was a smaller loss than the €48 million seen in the first half of 2015. Ebit margin improved by 50 basis points while remaining negative at 0.9%. Improved profitability of operations outside France, particularly in the UK, Central Europe, the USA, Chile and Canada, was accompanied by a resilient performance in traditional road and rail activities in France, where the decline in margins was limited despite lower business levels. It should be noted that Eurovia's first-half performance is not representative of its full-year performance, because seasonal variations in business levels affect coverage of overheads.
VINCI Construction's Ebit came in at €92 million, down €11 million relative to the first-half 2015 figure of €103 million. Ebit margin fell from 1.5% in the first half of 2015 to 1.4% in the first half of 2016. The decline in margins at VINCI Construction France resulted from lower business volumes, which led to lower coverage of overheads and reorganisation costs. A reduction in expenditure by African oil-producing countries led to a lower contribution from Sogea-Satom. Margins at Soletanche Freyssinet and VINCI Construction Grands Projets remained satisfactory. Lastly, VINCI Construction plc's Ebit moved close to breakeven.
VINCI Immobilier: Ebit totalled €8 million, with Ebit margin of 3.1%, as opposed to €23 million and 9.0% in the first half of 2015, when figures were boosted by the settlement of an old dispute. There was good performance in residential property, but the timing of commercial project phases had an adverse impact. The results do not reflect VINCI Immobilier's expected full-year performance.
Recurring operating income was €1,702 million, equal to 9.7% of revenue (€1,586 million and 8.9% in the first half of 2015). This item takes into account the following factors:
Share-based payment expense, which reflects the benefits granted to employees under the Group's savings and performance share plans. This expense amounted to €43 million (€36 million in the first half of 2015);
The Group's share in the income or loss of companies accounted for under the equity method, which was positive at €2 million (€49 million in the first half of 2015), including €17 million from the Concessions business (€20 million positive contribution in the first half of 2015) and negative at €20 million in Contracting (€25 million positive contribution in the first half of 2015).
Other recurring operating income and expense produced €23 million of income versus €33 million in the first half of 2015.
| (in € millions) | First half 2016 | % of revenue (*) | First half 2015 | % of revenue (*) | 2016/2015 change |
|---|---|---|---|---|---|
| Concessions | 1,389 | 48.2% | 1,216 | 45.1% | 14.2% |
| VINCI Autoroutes | 1,199 | 50.7% | 1,068 | 47.4% | 12.3% |
| VINCI Airports | 187 | 41.0% | 151 | 39.3% | 24.0% |
| Other concessions | 3 | 5.1% | (2) | -3.6% | - |
| Contracting | 291 | 2.0% | 327 | 2.1% | -11.0% |
| VINCI Energies | 262 | 5.3% | 251 | 5.2% | 4.4% |
| Eurovia | (30) | -0.9% | (47) | -1.4% | 36.9% |
| VINCI Construction | 58 | 0.9% | 123 | 1.8% | -52.4% |
| VINCI Immobilier | 13 | 4.8% | 27 | 10.4% | -53.0% |
| Holding companies | 9 | - | 16 | - | - |
| Recurring operating income | 1,702 | 9.7% | 1,586 | 8.9% | 7.3% |
(*) Excluding concession subsidiaries' works revenue.
Non-recurring operating items produced a net gain of €5 million in the first half of 2016, as opposed to a loss of €9 million in the first half of 2015.
After taking account of both recurring and non-recurring items, operating income was €1,706 million in the first half of 2016, up 8.2% relative to the first-half 2015 figure of €1,577 million.
Consolidated net income attributable to owners of the parent amounted to €920 million (5.2% of revenue), up €101 million (+12.4%) compared with the first half of 2015 (€819 million).
Earnings per share (after taking account of dilutive instruments) amounted to €1.65, up 12.1% compared with the first half of 2015 (€1.47).
The cost of net financial debt continued to fall in the first half of 2016. It amounted to €262 million, as opposed to €277 million in the first half of 2015. The improvement was due to the reduction in the average outstanding amount of long-term debt, the refinancing of debt repaid in 2015 and 2016 on improved terms, and the fall in interest rates, which benefited the Group because of its policy of switching part of its debt from fixed to floating rate. The average interest rate on long-term financial debt in the first half of 2016 was 3.31% (3.51% in the first half of 2015 and 2015).
Other financial income and expense resulted in a net expense of €21 million, compared with €4 million in the first half of 2015. This figure includes the cost of discounting retirement benefit obligations and provisions for the obligation to maintain the condition of concession intangible assets in the amount of €26 million (compared with €28 million in the first half of 2015), €18 million of income relating to capitalised borrowing costs on current concession investments (€11 million in the first half of 2015) and a currency loss of €13 million compared with a gain of €13 million in the first half of 2015.
Tax expense totalled €483 million, giving an effective tax rate of 34.0%, compared with an expense of €462 million and 37.0% in the first half of 2015, which included the 10.7% corporate income surtax in France (which took the standard rate to 38% between 2012 and 2015). That increase was because of higher pre-tax profit both inside and outside France.
Earnings attributable to non-controlling interests totalled €20 million (€16 million in the first half of 2015).
Cash flow from operations before tax and financing costs (Ebitda) totalled €2,606 million in the first half of 2016, up 5.5% relative to the first half of 2015 (€2,471 million) and equal to 14.8% of revenue (13.8% in the first half of 2015).
Ebitda in the Concessions business (77% of the total) rose 7.4% to €2,019 million (€1,879 million in the first half of 2015) or 70.1% of revenue (69.6% of revenue in the first half of 2015).
VINCI Autoroutes' Ebitda grew 5.3% to €1,766 million, versus €1,678 million in the first half of 2015. Ebitda margin rose slightly to 74.7% from 74.4% in the year-earlier period.
Ebitda at VINCI Airports rose almost 21% to €239 million (€198 million in the first half of 2015), due in particular to the integration of AERODOM and good performance in Portugal. Ebitda margin rose from 51.7% in the first half of 2015 to 52.6% in the first half of 2016.
Ebitda in the Contracting business was stable at €560 million (€557 million in the first half of 2015). Ebitda margin rose from 3.7% in the first half of 2015 to 3.8% in the first half of 2016.
| (in € millions) | First half 2016 | % of revenue (*) | First half 2015 | % of revenue (*) | 2016/2015 change |
|---|---|---|---|---|---|
| Concessions | 2,019 | 70.1% | 1,879 | 69.6% | +7.4% |
| VINCI Autoroutes | 1,766 | 74.7% | 1,678 | 74.4% | +5.3% |
| VINCI Airports | 239 | 52.6% | 198 | 51.7% | +20.7% |
| Other concessions | 13 | 21.5% | 4 | 5.9% | - |
| Contracting | 560 | 3.8% | 557 | 3.7% | +0.5% |
| VINCI Energies | 289 | 5.8% | 279 | 5.8% | +3.6% |
| Eurovia | 59 | 1.8% | 35 | 1.0% | +70.7% |
| VINCI Construction | 211 | 3.3% | 243 | 3.5% | -13.2% |
| VINCI Immobilier | 8 | 2.9% | 23 | 8.9% | -66.2% |
| Holding companies | 20 | 11 | |||
| Total Ebitda | 2,606 | 14.8% | 2,471 | 13.8% | +5.5% |
(*) Excluding concession subsidiaries' works revenue.
The change in the working capital requirement relating to business activities and current provisions – which is always negative in the first half of the year due to seasonal variations in the contracting business – was negative at €1,136 million in the first half of 2016, versus €831 million in the first half of 2015. The change was due to lower business levels at Eurovia and VINCI Construction, in France and in Africa, the timing of downpayments and end-of-project payments on major international projects that was less favourable than in the first half of 2015, and lower cash inflows, particularly at Eurovia in Central Europe, after some customers made payments early in December 2015. VINCI Immobilier also acquired new land.
Net interest paid totalled €331 million in the first half of 2016, stable by comparison with the first half of 2015 (€331 million). Income taxes paid rose €30 million to €495 million (€465 million in the first half of 2015).
Cash flow from operating activities1 totalled €697 million, down €220 million relative to the first-half 2015 figure of €917 million.
After accounting for operating investments net of disposals amounting to €299 million, up 9.5% on the year-earlier figure of €273 million), operating cash flow2 produced an inflow of €398 million as opposed to €643 million in the first half of 2015.
Growth investments in concessions and PPPs totalled €435 million (€396 million in the year-earlier period). Of this figure, €359 million related to investments by VINCI Autoroutes in France (€307 million in the first half of 2015).
Free cash flow before financial investments produced an outflow of €38 million as opposed to an inflow of €247 million in the first half of 2015), including a €713 million inflow in Concessions and a €982 million outflow in Contracting (€648 million inflow and €644 million outflow respectively in the first half of 2015).
Financial investments, net of disposals and other investment flows, resulted in a net cash outflow of €1,043 million, including the acquisitions AERODOM in the Dominican Republic by VINCI Airports and J&P Richardson in Australia by VINCI Energies, along with the purchase of a 40% stake in Kansai Airports, which holds concessions for two airports in Japan, by VINCI Airports.
In the first half of 2015, financial investments totalled €167 million and mainly concerned VINCI Energies' acquisition of Orteng in Brazil.
Dividends paid by the Group in the first half of 2016 totalled €720 million (€683 million in the first half of 2015), including €702 million paid by VINCI SA as the final dividend for 2015 (€1.27 per share).
Capital increases resulted in the creation of 6.4 million new shares and totalled €323 million in the first half of 2016, including €257 million relating to Group savings plans and €65 million relating to the exercise of share subscription options.
To neutralise the dilutive effect of these operations, VINCI purchased 5.5 million shares in the market through its share buy-back programme for a total investment of €347 million at an average price of €63.47 per share.
As a result of these cash flows, there was a €1,954 million increase in net financial debt in the first half of 2016, taking the total to €14,390 million at 30 June 2016. That figure reflects long-term gross financial debt of €17,103 million (€16,557 million at 31 December 2015) and managed net cash of €2,713 million (€4,121 million at 31 December 2015).
Consolidated non-current assets amounted to €37.5 billion at 30 June 2016 (€36.5 billion at 30 June 2015, €36.7 billion at 31 December 2015), including €28.5 billion in the Concessions business (€27.5 billion at 30 June 2015, €27.6 billion at 31 December 2015) and €8.9 billion in Contracting (€8.8 billion at 30 June 2015, €9.0 billion at 31 December 2015).
After taking account of a net working capital surplus (attributable mainly to the Contracting business) of €5.4 billion, down almost €1.2 billion compared with 31 December 2015, capital employed was €32.1 billion at 30 June 2016 (€30.1 billion at end-2015, €31.2 billion at 30 June 2015). Capital employed in the Concessions business amounted to €27.3 billion, accounting for 85% of the total (84% at 30 June 2015).
The Group's consolidated equity totalled €15.2 billion at 30 June 2016, up €0.3 billion compared with 30 June 2015 and down €0.1 billion compared with 31 December 2015 (€15.3 billion). It includes €0.1 billion relating to non-controlling interests.
1 Cash flow from operating activities: cash flow from operations adjusted for changes in operating working capital requirement and current provisions, interest paid, income taxes paid and dividends received from companies accounted for under the equity method.
2 Operating cash flow: cash flow from operating activities adjusted for net investments in operating assets (excluding growth investments in concessions and PPPs
The number of shares, excluding treasury shares, was 594,880,595 at 30 June 2016 (588,453,075 at 31 December 2015). Treasury shares amounted to 6.6% of the total capital at 30 June 2016 (5.8% at 31 December 2015, 7.1% at 30 June 2015).
Consolidated net financial debt at end-June 2016 was €14.4 billion, up €0.5 billion relative to 30 June 2015 (€13.9 billion) and up almost €2.0 billion relative to 31 December 2015 (€12.4 billion).
For the Concessions business, including its holding companies, net financial debt stood at €23.9 billion, up €0.3 billion relative to 31 December 2015 (€23.6 billion). The Contracting business showed net debt of €0.1 billion, a €1.1 billion change during the first-half period compared with the net cash surplus of €1.0 billion at 31 December 2015 (€0.6 billion surplus at 30 June 2015). The holding companies and other activities posted a net financial surplus of €9.6 billion, down €0.5 billion relative to 31 December 2015.
The ratio of net financial debt to equity was 0.9 at 30 June 2016 (0.8 at 31 December 2015). The ratio of net financial debt to Ebitda on a rolling 12-month basis was 2.5 at 30 June 2016 (2.2 at 31 December 2015).
Liquidity at end-June 2016 amounted to €8.7 billion, versus €9.2 billion at end-June 2015 and €10.1 billion at 31 December 2015. The liquidity figure comprises €2.7 billion of managed net cash and €6.0 billion of unused confirmed bank credit facilities. In the first half of 2016, the expiry dates of those facilities were extended until May 2021.
| (in € millions) | 30/06/2016 | Net financial debt/Ebitda |
30/06/2015 | 31/12/2015 | Change 30/06/2016 vs. 30/06/2015 |
Change 30/06/2016 vs. 31/12/2015 |
|---|---|---|---|---|---|---|
| Concessions | (23,884) | x5.9 | (19,777) | (23,551) | (4,107) | (333) |
| VINCI Autoroutes | (19,643) | x5.4 | (16,738) | (20,247) | (2,904) | 605 |
| VINCI Airports | (3,826) | x8.5 | (2,901) | (2,812) | (925) | (1,014) |
| VINCI Concessions | (415) | (138) | (492) | (277) | 77 | |
| Contracting | (94) | 635 | 1,034 | (729) | (1,128) | |
| VINCI Energies | (761) | (630) | (472) | (131) | (289) | |
| Eurovia | (258) | (117) | 174 | (141) | (432) | |
| VINCI Construction | 925 | 1,382 | 1,332 | (457) | (406) | |
| Holding companies and miscellaneous | 9,588 | 5,267 | 10,081 | 4,321 | (493) | |
| Total | (14,390) | x 2.5 | (13,875) | (12,436) | (515) | (1,954) |
At 30 June 2016, the order book of the Contracting business lines (VINCI Energies, Eurovia and VINCI Construction) stood at €29.2 billion, up almost 6% relative to 31 December 2015. The order book was stable outside France, and rose by over 11% in France. Over a 12-month period, it was up almost 2% (€28.7 billion at 30 June 2015) and up 3% excluding the SEA HSL project. It represents 11 months of average business activity. Major projects make up a larger share of the total than before, so orders currently in the order book are likely to be realised over a longer period than before.
VINCI Energies' order book stood at €6.4 billion at 30 June 2016, up 6% compared with 31 December 2015 (up 5% in France and up 8% outside France) but down 5% over 12 months (down 3% in France and down 8% outside France). It represents almost eight months of VINCI Energies' average business activity.
Eurovia's order book stood at €5.9 billion, up 9% since the start of the year (up 28% in France but down 2% outside France) and up almost 4% relative to end-June 2015 (up 20% in France and down 5% outside France). It represents nine months of Eurovia's average business activity.
VINCI Construction's order book stood at €16.9 billion at 30 June 2016, up 4% compared with 31 December 2015 (up 10% in France and down 2% outside France) and up 4% over 12 months (up 8% in France and stable outside France). It represents almost 15 months of VINCI Construction's average business activity.
| Total Contracting | 29.2 | 14.9 | 14.3 | 28.7 | 27.7 |
|---|---|---|---|---|---|
| VINCI Construction | 16.9 | 9.0 | 8.0 | 16.3 | 16.3 |
| Eurovia | 5.9 | 2.5 | 3.4 | 5.6 | 5.4 |
| VINCI Energies | 6.4 | 3.5 | 3.0 | 6.8 | 6.1 |
| (in € billions) | 30/06/2016 | France | outside France | 30/06/2015 | 31/12/2015 |
| of which | of which |
(*) Unaudited figures.
On 28 July 2016, the Board of Directors decided to pay an interim dividend of €0.63 per share in respect of 2016, up 10.5% relative to the interim dividend paid in 2015 (€0.57).
This interim dividend will be paid in cash on 10 November 2016 (ex-dividend date: 8 November 2016).
The main transactions with related parties are described in Note L.26 to the condensed half-year consolidated financial statements.
The main risk factors that VINCI could face are described in Section C "Risk factors" of the Report of the Board of Directors contained in the 2015 registration document.
| Consolidated half-year financial statements | 13 |
|---|---|
| Key figures | 13 |
| Consolidated income statement for the period | 14 |
| Consolidated comprehensive income statement for the period | 15 |
| Consolidated balance sheet | 16 |
| Consolidated cash flow statement | 18 |
| Consolidated statement of changes in equity | 19 |
| Notes to the consolidated financial statements | 20 |
| Change first half | ||||
|---|---|---|---|---|
| (in € millions) | First half 2016 | First half 2015 | 2016/2015 | Full year 2015 |
| Revenue (*) | 17,619 | 17,880 | -1.5% | 38,518 |
| Revenue generated in France (*) | 10,348 | 10,621 | -2.6% | 22,414 |
| % of revenue (*) | 58.7% | 59.4% | 58.2% | |
| Revenue generated outside France (*) | 7,271 | 7,259 | 0.2% | 16,104 |
| % of revenue (*) | 41.3% | 40.6% | 41.8% | |
| Operating income from ordinary activities | 1,720 | 1,540 | 11.7% | 3,758 |
| % of revenue (*) | 9.8% | 8.6% | 9.8% | |
| Recurring operating income | 1,702 | 1,586 | 7.3% | 3,788 |
| Operating income | 1,706 | 1,577 | 8.2% | 3,715 |
| Net income attributable to owners of the parent | 920 | 819 | 12.4% | 2,046 |
| Diluted earnings per share (in €) | 1.65 | 1.47 | 12.1% | 3.66 |
| Dividend per share (in €) | 0.63 (**) | 0.57 | 10.5% | 1.84 |
| Cash flow from operations before tax and financing costs | 2,606 | 2,471 | 5.5% | 5,664 |
| Operating investments (net of disposals) | (299) | (273) | 9.5% | (624) |
| Growth investments in concessions and PPPs | (435) | (396) | 9.8% | (903) |
| Free cash flow (after investments) | (38) | 247 | -115% | 2,995 |
| Equity including non-controlling interests | 15,180 | 14,889 | 291 | 15,256 |
| Net financial debt | (14,390) | (13,875) | (515) | (12,436) |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
(**) Interim dividend to be paid on 10 November 2016.
| (in € millions) | Notes | First half 2016 | First half 2015 | Full year 2015 |
|---|---|---|---|---|
| Revenue (*) | 1-2 | 17,619 | 17,880 | 38,518 |
| Concession subsidiaries' revenue derived from works carried out by non-Group companies | 183 | 252 | 643 | |
| Total revenue | 17,802 | 18,132 | 39,161 | |
| Revenue from ancillary activities | 74 | 86 | 160 | |
| Operating expenses | 4 | (16,156) | (16,678) | (35,563) |
| Operating income from ordinary activities | 1-4 | 1,720 | 1,540 | 3,758 |
| Share-based payments (IFRS 2) | 25 | (43) | (36) | (95) |
| Profit/(loss) of companies accounted for under the equity method | 4-10 | 2 | 49 | 89 |
| Other recurring operating items | 23 | 33 | 36 | |
| Recurring operating income | 4 | 1,702 | 1,586 | 3,788 |
| Non-recurring operating items | 4 | 5 | (9) | (73) |
| Operating income | 4 | 1,706 | 1,577 | 3,715 |
| Cost of gross financial debt | (277) | (303) | (600) | |
| Financial income from cash investments | 15 | 26 | 43 | |
| Cost of net financial debt | 5 | (262) | (277) | (557) |
| Other financial income and expense | 6 | (21) | (4) | (24) |
| Income tax expense | 7 | (483) | (462) | (1,055) |
| Net income | 940 | 834 | 2,079 | |
| Net income attributable to non-controlling interests | 20 | 16 | 34 | |
| Net income attributable to owners of the parent | 920 | 819 | 2,046 | |
| Earnings per share attributable to owners of the parent | ||||
| Basic earnings per share (in €) | 8 | 1.66 | 1.48 | 3.69 |
| Diluted earnings per share (in €) | 8 | 1.65 | 1.47 | 3.66 |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
| First half 2016 | First half 2015 | Full year 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (in € millions) | Attributable to owners of the parent |
Attributable to non controlling interests |
Total | Attributable to owners of the parent |
Attributable to non controlling interests |
Total | Attributable to owners of the parent |
Attributable to non controlling interests |
Total |
| Net income | 920 | 20 | 940 | 819 | 16 | 834 | 2,046 | 34 | 2,079 |
| Changes in fair value of cash flow hedging instruments (*) |
(1) | - | (1) | 45 | - | 45 | 71 | - | 71 |
| Currency translation differences | 1 | (1) | - | 93 | 5 | 98 | 32 | 4 | 36 |
| Tax (**) | - | - | - | (15) | - | (15) | (26) | - | (26) |
| Share in net income of companies accounted for under the equity method |
(30) | - | (30) | 66 | - | 66 | 60 | - | 60 |
| Other comprehensive income that may be recycled subsequently to net income |
(29) | (1) | (30) | 188 | 5 | 193 | 137 | 4 | 140 |
| Actuarial gains and losses on retirement benefit obligations |
(126) | - | (126) | (207) | - | (207) | (105) | - | (105) |
| Tax | 32 | - | 32 | 51 | - | 51 | 25 | - | 25 |
| Share in net income of companies accounted for under the equity method |
- | - | - | - | - | - | - | - | - |
| Other comprehensive income that may not be recycled subsequently to net income |
(93) | - | (93) | (156) | - | (156) | (80) | - | (80) |
| Total other comprehensive income recognised directly in equity |
(122) | (1) | (123) | 32 | 5 | 37 | 57 | 3 | 60 |
| Total comprehensive income | 798 | 19 | 817 | 851 | 20 | 871 | 2,102 | 37 | 2,139 |
(*) Changes in the fair value of cash flow hedges are recognised in equity for the effective portion. Cumulative gains and losses in equity are taken to profit or loss at the time when the cash flow affects profit or loss.
(**) Tax effects relating to changes in the fair value of cash flow hedging financial instruments (effective portion).
| (in € millions) | Notes | 30/06/2016 | 30/06/2015 | 31/12/2015 |
|---|---|---|---|---|
| Non-current assets | ||||
| Concession intangible assets | 12 | 24,315 | 23,892 | 23,915 |
| Goodwill | 9 | 7,644 | 7,170 | 7,296 |
| Other intangible assets | 389 | 401 | 387 | |
| Property, plant and equipment | 14 | 4,313 | 4,225 | 4,241 |
| Investments in companies accounted for under the equity method | 10 | 1,457 | 1,340 | 1,404 |
| Other non-current financial assets | 11-13 | 875 | 988 | 942 |
| Derivative financial instruments – non-current assets | 877 | 809 | 803 | |
| Deferred tax assets | 313 | 307 | 278 | |
| Total non-current assets | 40,183 | 39,132 | 39,267 | |
| Current assets | ||||
| Inventories and work in progress | 15 | 1,029 | 973 | 964 |
| Trade and other receivables | 15 | 10,835 | 11,127 | 10,696 |
| Other current operating assets | 15 | 4,772 | 4,685 | 4,635 |
| Other current non-operating assets | 32 | 40 | 30 | |
| Current tax assets | 125 | 206 | 365 | |
| Other current financial assets | 29 | 30 | 27 | |
| Derivative financial instruments – current assets | 337 | 322 | 364 | |
| Cash management financial assets | 21 | 166 | 186 | 166 |
| Cash and cash equivalents | 21 | 4,358 | 5,207 | 5,632 |
| Total current assets | 21,683 | 22,777 | 22,880 | |
| Assets held for sale | 197 | - | - | |
| Total assets | 62,062 | 61,909 | 62,147 |
| (in € millions) | Notes | 30/06/2016 | 30/06/2015 | 31/12/2015 |
|---|---|---|---|---|
| Equity | ||||
| Share capital | 18.1 | 1,487 | 1,495 | 1,471 |
| Share premium | 9,351 | 8,951 | 9,044 | |
| Treasury shares | 18.2 | (1,874) | (1,938) | (1,534) |
| Other equity instruments | - | 466 | - | |
| Consolidated reserves | 6,208 | 5,917 | 5,024 | |
| Currency translation reserves | 54 | 96 | 31 | |
| Net income attributable to owners of the parent | 920 | 819 | 2,046 | |
| Amounts recognised directly in equity | 18.3 | (1,107) | (1,053) | (962) |
| Equity attributable to owners of the parent | 15,039 | 14,752 | 15,119 | |
| Non-controlling interests | 141 | 137 | 137 | |
| Total equity | 15,180 | 14,889 | 15,256 | |
| Non-current liabilities | ||||
| Non-current provisions | 16 | 1,069 | 887 | 949 |
| Provisions for employee benefits | 24 | 1,631 | 1,634 | 1,515 |
| Bonds | 20 | 11,115 | 11,653 | 11,147 |
| Other loans and borrowings | 20 | 3,539 | 4,429 | 3,854 |
| Derivative financial instruments – non-current liabilities | 171 | 235 | 224 | |
| Other non-current liabilities | 139 | 145 | 129 | |
| Deferred tax liabilities | 1,734 | 1,670 | 1,656 | |
| Total non-current liabilities | 19,399 | 20,652 | 19,474 | |
| Current liabilities | ||||
| Current provisions | 15 | 3,986 | 3,767 | 4,053 |
| Trade payables | 15 | 7,121 | 7,348 | 7,590 |
| Other current operating liabilities | 15 | 10,565 | 10,716 | 10,884 |
| Other current non-operating liabilities | 319 | 278 | 360 | |
| Current tax liabilities | 189 | 174 | 351 | |
| Derivative financial instruments – current liabilities | 184 | 195 | 193 | |
| Current borrowings | 20 | 5,120 | 3,889 | 3,986 |
| Total current liabilities | 27,483 | 26,367 | 27,417 | |
| Liabilities held for sale | - | - | - | |
| Total equity and liabilities | 62,062 | 61,909 | 62,147 |
| (in € millions) | Notes | First half 2016 | First half 2015 | Full year 2015 |
|---|---|---|---|---|
| Consolidated net income for the period (including non-controlling interests) | 940 | 834 | ||
| Depreciation and amortisation | 987 | 1,041 | ||
| Net increase/(decrease) in provisions and impairment | 2 | (37) | ||
| Share-based payments (IFRS 2) and other restatements | (33) | (38) | ||
| Gain or loss on disposals | (20) | 13 | ||
| Change in fair value of financial instruments | 10 | (17) | ||
| Share of profit or loss of companies accounted for under the equity method and | (7) | (55) | ||
| dividends received from unconsolidated companies | ||||
| Capitalised borrowing costs | (18) | (11) | ||
| Cost of net financial debt recognised | 5 | 262 | 277 | |
| Current and deferred tax expense recognised | 483 | 462 | ||
| Cash flow from operations before tax and financing costs | 1 | 2,606 | 2,471 | |
| Changes in operating working capital requirement and current provisions | 15.1 | (1,137) | (831) | |
| Income taxes paid | (495) | (465) | ||
| Net interest paid | (331) | (331) | ||
| Dividends received from companies accounted for under the equity method | 54 | 73 | ||
| Cash flows (used in)/from operating activities | I | 697 | 917 | |
| Purchases of property, plant and equipment and intangible assets | (350) | (327) | ||
| Proceeds from sales of property, plant and equipment and intangible assets | 51 | 54 | ||
| Operating investments (net of disposals) | 1 | (299) | (273) | |
| Operating cash flow | 1 | 398 | 643 | |
| Investments in concession fixed assets (net of grants received) | (421) | (361) | ||
| Financial receivables (PPP contracts and others) | (14) | (36) | ||
| Growth investments in concessions and PPPs | 1 | (435) | (396) | |
| Free cash flow (after investments) | 1 | (38) | 247 | |
| Purchases of shares in subsidiaries and affiliates (consolidated and unconsolidated) (1) |
(684) | (152) | ||
| Proceeds from sales of shares in subsidiaries and affiliates (consolidated and unconsolidated) |
48 | 6 | ||
| Net effect of changes in scope of consolidation | (423) | (66) | ||
| Net financial investments | (1,059) | (213) | ||
| Other | 21 | 52 | ||
| Net cash flows (used in)/from investing activities | II | (1,773) | (831) | |
| Share capital increases and decreases and repurchases of other equity instruments (2) | 322 | 312 | ||
| Transactions on treasury shares | 18.2 | (348) | (466) | |
| Non-controlling interests in share capital increases and decreases of subsidiaries |
1 | - | ||
| Acquisitions/disposals of non-controlling interests (without acquisition or loss of control) |
(2) | (1) | ||
| Dividends paid | 19 | (719) | (683) | |
| - to shareholders of VINCI SA (3) | (703) | (673) | ||
| - to non-controlling interests | (17) | (10) | ||
| Proceeds from new long-term borrowings | 930 | 21 | ||
| Repayments of long-term borrowings | (791) | (796) | ||
| Change in cash management assets and other current financial debts | (80) | 524 | ||
| Net cash flows (used in)/from financing activities | III | (686) | (1,089) | |
| Other changes (*) | IV | 440 | 121 | |
| Change in net cash | I+II+III+IV | (1,322) | (882) | |
| Net cash and cash equivalents at beginning of period | 5,077 | 5,491 | ||
| Net cash and cash equivalents at end of period | 21 | 3,755 | 4,608 | |
| Change in cash management assets and other current financial debts | 80 | (524) | ||
| (Proceeds from)/repayment of loans | (139) | 775 | ||
| Other changes (4) | (573) | 37 | ||
| Change in net financial debt | (1,954) | (594) | ||
| Net financial debt at beginning of period | (12,436) | (13,281) | (13,281) | |
(1) Including, in the first half of 2016, the acquisition of Aerodom for €417 million and J&P Richardson for €61 million, along with funding provided to companies operating concessions at Kansai airport (€149 million) and Santiago de Chile airport (€13 million). In 2015, acquisitions of Orteng Engenharia e Sistemas for €87 million, HEB Construction for €43 million and a 20% stake in Constructora Conconcreto for €81 million.
(2) Including in 2015 capital increases totalling €436 million and the early redemption of perpetual subordinated bonds for €500 million.
(3) Including in 2015 interest payments on the perpetual subordinated bonds for €30 million.
(4) Including Aerodom's net financial debt at acquisition date.
| Equity attributable to owners of the parent | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in € millions) | Share capital |
Share premium |
Treasury shares |
Other equity instruments |
Consolidated reserves |
Net income |
Currency translation reserves |
Amounts recognised directly in equity |
Total attributable to owners of the parent |
Non controlling interests |
Total |
| Balance at 01/01/2015 | 1,475 | 8,633 | (1,560) | 491 | 4,205 | 2,486 | (1) | (987) | 14,743 | 125 | 14,868 |
| Net income for the period | - | - | - | - | - | 819 | - | - | 819 | 16 | 834 |
| Other comprehensive income recognised directly in the equity of controlled companies |
- | - | - | - | - | - | 93 | (127) | (34) | 5 | (29) |
| Other comprehensive income recognised directly in the equity |
- | - | - | - | - | - | 7 | 59 | 66 | - | 66 |
| of companies accounted for under the equity method |
|||||||||||
| Total comprehensive income for the period |
- | - | - | - | - | 819 | 100 | (67) | 851 | 20 | 871 |
| Increase in share capital | 20 | 318 | - | - | - | - | - | - | 338 | - | 338 |
| Decrease in share capital and repurchases of other equity instruments |
- | - | - | (25) | (1) | - | - | - | (25) | - | (25) |
| Transactions on treasury shares | - | - | (378) | - | (89) | - | - | - | (466) | - | (466) |
| Allocation of net income | |||||||||||
| and dividend payments | - | - | - | - | 1,813 | (2,486) | - | - | (673) | (10) | (683) |
| Share-based payments (IFRS 2) | - | - | - | - | 24 | - | - | - | 24 | - | 24 |
| Impact of acquisitions or disposals | |||||||||||
| of non-controlling interests after acquisition of control |
- | - | - | - | (1) | - | - | - | (1) | - | (1) |
| Changes in consolidation scope | - | - | - | - | 2 | - | (2) | - | - | 2 | 2 |
| Other | - | - | - | - | (38) | - | (1) | 1 | (37) | - | (37) |
| Balance at 30/06/2015 | 1,495 | 8,951 | (1,938) | 466 | 5,917 | 819 | 96 | (1,053) | 14,752 | 137 | 14,889 |
| Net income for the period | - | - | - | - | - | 1,227 | - | - | 1,227 | 18 | 1,245 |
| Other comprehensive income recognised directly in the equity of controlled companies |
- | - | - | - | - | - | (61) | 92 | 31 | (1) | 30 |
| Other comprehensive income recognised directly in the equity |
- | - | - | - | - | - | (4) | (2) | (6) | - | (6) |
| of companies accounted for under the equity method |
|||||||||||
| Total comprehensive income for the period |
- | - | - | - | - | 1,227 | (65) | 90 | 1,252 | 17 | 1,268 |
| Increase in share capital | 6 | 93 | - | - | - | - | - | - | 99 | - | 99 |
| Decrease in share capital and repurchases of other equity instruments |
(30) | - | 625 | (466) | (605) | - | - | - | (476) | - | (476) |
| Transactions on treasury shares | - | - | (221) | - | - | - | - | - | (222) | - | (222) |
| Allocation of net income and dividend payments |
- | - | - | - | (346) | - | - | - | (346) | (15) | (361) |
| Share-based payments (IFRS 2) | - | - | - | - | 37 | - | - | - | 37 | - | 37 |
| Impact of acquisitions or disposals of non-controlling interests after |
- | - | - | - | (6) | - | - | - | (6) | - | (6) |
| acquisition of control | |||||||||||
| Changes in consolidation scope Other |
- - |
- - |
- - |
- - |
(1) 28 |
- - |
(1) 1 |
2 (1) |
- 28 |
(2) - |
(2) 28 |
| Balance at 31/12/2015 | 1,471 | 9,044 | (1,534) | - | 5,024 | 2,046 | 31 | (962) | 15,119 | 137 | 15,256 |
| Net income for the period | - | - | - | - | - | 920 | - | - | 920 | 20 | 940 |
| Other comprehensive income | |||||||||||
| recognised directly in the equity of controlled companies |
- | - | - | - | - | - | 1 | (94) | (93) | (1) | (93) |
| Other comprehensive income recognised directly in the equity |
|||||||||||
| of companies accounted for under the equity method |
- | - | - | - | - | - | 22 | (52) | (30) | - | (30) |
| Total comprehensive income for the period |
- | - | - | - | - | 920 | 23 | (145) | 798 | 19 | 817 |
| Increase in share capital | 16 | 306 | - | - | - | - | - | - | 322 | 1 | 323 |
| Decrease in share capital | - | - | - | - | - | - | - | - | - | - | - |
| Transactions on treasury shares | - | - | (340) | - | (8) | - | - | - | (348) | - | (348) |
| Allocation of net income and dividend payments |
- | - | - | - | 1,343 | (2,046) | - | - | (703) | (17) | (719) |
| Share-based payments (IFRS 2) | - | - | - | - | 29 | - | - | - | 29 | - | 29 |
| Impact of acquisitions or disposals of non-controlling interests after |
- | - | - | - | 4 | - | - | - | 4 | - | 4 |
| acquisition of control Changes in consolidation scope |
- | - | - | - | (2) | - | - | 2 | - | 1 | 1 |
| Other Balance at 30/06/2016 |
- 1,487 |
- 9,351 |
- (1,874) |
- - |
(182) 6,208 |
- 920 |
- 54 |
(1) (1,107) |
(183) 15,039 |
- 141 |
(183) 15,180 |
| A. | Seasonal nature of the business | 22 |
|---|---|---|
| B. | General policies and use of estimates | 23 |
| C. | Key events in the period and changes in consolidation scope | 26 |
| D. | Financial indicators by business line and geographical area | 28 |
| 1. Information by operating segment 2. Breakdown of revenue by geographical area 3. Reconciliation between capital employed and the financial statements |
28 35 36 |
|
| E. | Main income statement items | 37 |
| 4. Operating income 5. Cost of net financial debt 6. Other financial income and expense 7. Income tax expense 8. Earnings per share |
37 38 38 38 38 |
|
| F. | Investments in other companies | 40 |
| 9. Goodwill 10. Companies accounted for under the equity method: associates and joint ventures 11. Other non-current financial assets |
40 41 42 |
|
| G. | Concession and PPP contracts | 43 |
| 12. Concession intangible assets 13. PPP financial receivables (controlled companies) |
43 45 |
|
| H. | Other balance sheet items and business-related commitments | 46 |
| 14. Property, plant and equipment 15. Working capital requirement and current provisions 16. Non-current provisions 17. Other contractual obligations of an operational nature and commitments given and received |
46 46 47 48 |
|
| I. | Equity | 49 |
| 18. Information on equity 19. Dividends |
49 50 |
|
| J. | Financing and financial risk management | 51 |
| 20. Net financial debt 21. Net cash managed and available resources 22. Financial risk management 23. Book and fair value of financial instruments by accounting category |
51 53 54 55 |
|
| K. | Employee benefits and share-based payments | 57 |
| 24. Provisions for employee benefits 25. Share-based payments |
57 57 |
| L. | Other notes | |||
|---|---|---|---|---|
| 26. | Related party transactions | 60 | ||
| 27. | Note on litigation | 60 | ||
| 28. | Post-balance sheet events | 61 | ||
| M. | Other consolidation rules and methods | 62 |
First-half performance is characterised by the seasonal nature of the business in most of the Group's activities, particularly:
roadworks, with lower business volumes than in the second half of the year due to weather conditions;
motorway concession companies, where traffic volumes are lower in the first half than the second because of high levels of light-vehicle traffic in the summer period.
In the last few years, first-half revenue has accounted for 46-47% of the full-year total.
First-half revenue and earnings cannot therefore be extrapolated over the full year because of the above and also because of the application of IFRIC 21. That interpretation governs the recognition of levies, and generally focuses on when the activity that triggers payment, as identified by the relevant legislation, occurs (see Note A.1 "Basis for preparing the financial statements" in the 2015 registration document).
The seasonality of the Group's business is also reflected in the net use of cash in the first half, which is attributable to the lower level of receipts during this period and the pattern of operating cash flows, the majority of which is generated in the second half of the year.
The impact of seasonal factors has not resulted in any adjustment to the Group's half-year consolidated financial statements.
Group income and expenses in respect of ordinary activities that are of a seasonal, cyclical or occasional nature are accounted for using the same accounting methods as those adopted for the full-year financial statements. They are neither brought forward nor deferred at the half-year accounts closing date.
Income and expenses invoiced on an annual basis (e.g. patent and licence fees) are accounted for on a pro rata basis using an estimate for the full year.
Risks arising in the first half are provisioned in the financial statements for the period. As regards loss-making contracts in particular, losses on completion known during the first half are provisioned in full.
The accounting policies used at 30 June 2016 are consistent with those used in preparing the consolidated financial statements at 31 December 2015, except for the standards and/or amendments adopted by the European Union and mandatorily applicable as from 1 January 2016 (see below).
The Group's condensed half-year consolidated financial statements at 30 June 2016 have been prepared in accordance with IAS 34 "Interim Financial Reporting". They were approved by the Board of Directors on 28 July 2016. As these are condensed consolidated financial statements, they do not include all the information required by IFRSs in relation to full-year financial statements and should therefore be read in conjunction with the Group's consolidated financial statements for the period ended 31 December 2015, as set out in the 2015 registration document D.16-0086, filed with the AMF on 26 February 2016.
The accounting policies adopted in preparing and presenting the condensed half-year consolidated financial statements comply with the IFRS standards and interpretations as adopted by the European Union as at 30 June 2016 (*).
The Group's consolidated financial statements are presented in millions of euros, rounded to the nearest million. This may in certain circumstances lead to non-material differences between the sum of the figures and the subtotals that appear in the tables.
The presentation of the Group's consolidated financial statements has been changed relative to that used for the condensed half-year consolidated financial statements at 30 June 2015.
The changes relate mainly to the organisation and ordering of the notes by theme. They are intended to make the consolidated financial statements easier to read and understand and more relevant, in line with the AMF's recommendations and work done by the International Accounting Standards Board.
The basis for preparing the financial statements, the consolidation methods applicable specifically to Group companies and the use of estimates in preparing the consolidated financial statements are covered in Note B. "General policies and use of estimates". Other rules and consolidation methods, which are more general and not specific to the Group, are now presented in Note M. "Other consolidation rules and methods".
The presentation of the income statement, comprehensive income statement, cash flow statement and statement of changes in equity has not changed as a result of the improvement work undertaken. The presentation of the balance sheet is identical to that in previous half-year periods, with the exception of the addition of complementary items that present on an isolated basis the fair values of derivative financial instruments and provisions for employee benefits. The "Other financial assets" item now consists solely of loans and receivables (including financial receivables under PPP contracts) and available-for-sale financial assets. The change in the presentation of the statement of comprehensive income following the amendment of IAS 1 is described in the following section relating to the implementation of applicable new standards.
No new standards applied for the first time from 1 January 2016. There were only a few amendments of standards applying mandatorily to periods beginning in 2016:
The presentation of comprehensive income takes into account the amendments to IAS 1 "Improvements to disclosures in the notes". Specific line items have been created to present the following information separately for entities accounted for under the equity method:
At Group level, the implementation of the other amendments has no material impact.
(*) Available at http://ec.europa.eu/internal_market/accounting/ias/index_en.htm
The Group has not applied early the following standards and interpretations that could concern the Group and of which application was not mandatory at 1 January 2016.
An analysis of the impacts and practical consequences of applying these standards is currently taking place.
In accordance with IFRS 10, companies in which the Group holds, whether directly or indirectly, the majority of voting rights in shareholders' general meetings, in the Boards of Directors or in the equivalent management bodies, giving it the power to direct their operational and financial policies, are generally deemed to be controlled and are fully consolidated. To determine control, VINCI carries out an in-depth analysis of the established governance arrangements and of the rights held by other shareholders. Where necessary, a study is carried out in relation to instruments held by the Group or by third parties (potential voting rights, dilutive instruments, convertible instruments, etc.) that, if exercised, could alter the type of influence exerted by each party.
For some infrastructure project companies operating under concessions or public-private partnership contracts and in which VINCI is not the only capital investor, in addition to the analysis of the governance arrangements with each partner, the Group may look at the characteristics of subcontracting contracts to check that they do not confer additional powers that could lead to a situation of de facto control. This most often concerns construction contracts and contracts to operate/maintain concession assets.
An analysis is performed if a specific event takes place that may affect the level of control exerted by the Group, such as a change in an entity's ownership structure or governance, or the exercise of a dilutive financial instrument.
In accordance with IFRS 11, the Group's joint arrangements fall into two categories (joint ventures and joint operations) depending on the nature of the rights and obligations held by each party. Classification is generally determined by the legal form of the project vehicle.
Most joint arrangements in the Contracting business are joint operations because of the legal form of the vehicles used. In France, for example, parties generally use sociétés en participation (SEPs) to contractualise their joint works activities. In some situations, where the facts and circumstances show that a company has been designed to provide production to the parties, it is regarded as a joint operation even where the vehicle's legal form does not establish transparency between the joint operators' assets and those of the joint arrangement. In that situation, the parties have the rights to substantially all of the economic benefits associated with the company's assets, and will settle its liabilities.
Within the Group, this concerns certain coating plants held and used by Eurovia in its road infrastructure construction and renovation activities. French property development joint arrangements contractualised in the form of sociétés civiles de construction-vente (SCCVs) are joint ventures under IFRS 11 and accounted for under the equity method.
Associates are entities over which the Group exerts significant influence. They are accounted for under the equity method in accordance with IAS 28. Significant influence is presumed where the Group's stake is more than or equal to 20%. However, it may arise where the ownership interest is lower, particularly where the Group is represented on the Board of Directors or any equivalent governance body, and therefore takes part in determining the entity's operational and financial policies and strategy. This concerns the Group's stakes in the ADP (Aéroports de Paris) group and CFE in particular.
The Group's consolidation scope does not include any subsidiaries in which non-controlling interests are material, or any individually material joint ventures or associates. That assessment is based on the impact of those interests on the Group's financial position, financial performance and cash flows. VINCI does not own any interest in structured entities as defined by IFRS 12.
VINCI's consolidated financial statements include the financial statements of all companies with revenue of more than €2 million, and of companies whose revenue is below this figure but whose impact on the Group's financial statements is material.
The preparation of financial statements under IFRSs requires estimates to be used and assumptions to be made that affect the amounts shown in those financial statements.
These estimates assume the operation is a going concern and are made on the basis of information available at the time. Estimates may be revised if the circumstances on which they were based alter or if new information becomes available. Actual results may be different from these estimates. The consolidated half-year financial statements have been prepared with reference to the immediate environment, including as regards estimates relating to:
determination of the discount rates to be used when performing impairment tests (IAS 36) and when calculating the present value of provisions (IAS 37) and employee benefit obligations (IAS 19);
The Group mainly uses fair value in measuring, on a consistent basis, the derivative instruments, cash and cash equivalents, available-for-sale financial assets, cash management financial assets and identifiable assets and liabilities acquired in business combinations on its balance sheet. The fair value of other financial instruments (particularly debt instruments and loans and receivables at amortised cost) is stated in Note J.23 "Book and fair value of financial instruments by accounting category" below.
Fair value is the price that would be received from selling an asset or paid to transfer a liability in a normal transaction. It is recognised on the basis of the asset or liability's main market (or the most advantageous market if there is no main market), i.e. the one that offers the highest volume and activity levels. The fair value of derivative financial instruments includes a "counterparty risk" component for derivatives carried as assets and an "own credit risk" component for derivatives carried as liabilities.
To determine these fair values, the Group uses the following measurement methods:
The following three-level hierarchy of fair values is used:
Level 1 – price quoted on an active market: Marketable securities, some available-for-sale financial assets and listed bond issues are measured in this way.
Level 2 – internal model using internal measurement techniques with observable factors: these techniques are based on usual mathematical computation methods, which incorporate observable market data (forward prices, yield curves, etc.). The calculation of the fair value of most derivative financial instruments (swaps, caps, floors, etc.) traded over the counter is made on the basis of models commonly used by market participants to price such financial instruments.
Every quarter, the internally calculated values of derivative instruments are checked for consistency with those sent to VINCI by the counterparties. Level 3 – internal model using non-observable factors: this model applies to customer relationships and contracts acquired through business combinations, as well as to holdings of unlisted shares, which, in the absence of an active market, are measured at their cost of acquisition plus transaction costs.
The tax expense for the first half year is determined by applying the estimated average tax rate for the whole of 2016 (including deferred tax) to pre-tax income. This rate may be adjusted for the tax effects of unusual items recognised in the period.
No new comprehensive actuarial assessment is carried out for the half-year consolidated financial statements. The expense for the half year in respect of retirement benefit obligations is half the expense calculated for 2016 on the basis of actuarial assumptions at 31 December 2015. Impacts arising from changes in assumptions relating to post-employment benefits in the first half of 2016 (discount rate and long-term inflation rate) are recognised under "Other comprehensive income".
VINCI Airports maintained its growth in the first half of 2016:
from 1 April 2016, it took over the operation of Kansai and Osaka airports in Japan for a 44-year term, in partnership with Orix Corporation (40%) and other local Japanese companies (20%);
on 8 April 2016, it acquired Aerodom, which operates six airports in the Dominican Republic (see Note C.2.1 "Acquisition of Aerodom").
On 13 June, VINCI announced an agreement with Ardian Infrastructure and Crédit Agricole Assurances with a view to selling its 24.6% stake in Indigo (formerly known as VINCI Park).
The transaction is subject to the approval of the competition authorities and should be completed in the second half of 2016.
At 30 June 2016, in accordance with IFRS 5, all assets relating to the equity stake in Infra Park TopCo were shown on the balance sheet under "Assets held for sale".
In February 2016, VINCI won a 54-year concession contract for the design, financing, construction, operation and maintenance of the A355, a 24 km bypass to the west of Strasbourg.
In 2016, VINCI has been named as the preferred bidder for the concession contract regarding the future A45 motorway between Saint Étienne and the Lyon urban area.
| 30/06/2016 | 30/06/2015 | 31/12/2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (number of companies) | Total | France | Foreign | Total | France | Foreign | Total | France | Foreign | |
| Controlled companies | 1,873 | 1,115 | 758 | 1,847 | 1,122 | 725 | 1,881 | 1,122 | 759 | |
| Joint ventures (*) | 153 | 105 | 48 | 174 | 106 | 68 | 161 | 110 | 51 | |
| Associates (*) | 46 | 22 | 24 | 46 | 24 | 22 | 47 | 23 | 24 | |
| Total | 2,072 | 1,242 | 830 | 2,067 | 1,252 | 815 | 2,089 | 1,255 | 834 |
(*) Entities accounted for under the equity method.
The main changes during the period involved the creation or acquisition of project companies handling new concession contracts, along with acquisitions of companies as part of the Group's development outside France.
Other changes relate to legal restructuring within the Group and resulted in a reduction in the number of consolidated entities.
On 8 April 2016, VINCI Airports completed the acquisition of all shares in Aeropuertos Dominicanos Siglo XXI SA (Aerodom), the company that holds a concession contract with the government of the Dominican Republic to operate six airports in the country until March 2030. Aerodom has been fully consolidated in VINCI's consolidated financial statements since that date.
| (in € millions) | |
|---|---|
| Assets and liabilities acquired | Fair value |
| Concession intangible and operating fixed assets | 749 |
| Property, plant and equipment | 2 |
| Other non-current financial assets | 52 |
| Deferred tax assets | 11 |
| Total non-current assets | 813 |
| Trade and other operating receivables | 16 |
| Inventories and work in progress | 2 |
| Cash and cash equivalents | 29 |
| Total current assets | 47 |
| Provisions and other non-current liabilities | 5 |
| Bonds | 455 |
| Deferred tax liabilities | 202 |
| Total non-current liabilities | 663 |
| Current provisions | 23 |
| Accrued interest not matured | 16 |
| Trade payables and other current liabilities | 15 |
| Total current liabilities | 53 |
| Net assets acquired | 144 |
Acquisition-date fair value of the total consideration transferred 417
Provisional goodwill, as shown in the table above, represents the future economic benefits that VINCI expects to derive from the acquisition of Aerodom. It has been allocated to the VINCI Airports business segment.
Aerodom contributed €28 million to Group revenue, €5 million to Group operating income from ordinary activities and a negative amount of €6 million to Group net income in the first half of 2016.
For the first half of 2016 as a whole, revenue, operating income from ordinary activities and net income, on the basis of the same assumptions as those retained at the acquisition date, would have been €67 million, €17 million and a negative amount of €8 million respectively (unaudited figures).
In February 2016, VINCI Energies completed the acquisition of all shares in Australian company J&P Richardson Industries Pty Limited, which is based in Queensland in north-east Australia.
J&P Richardson Industries Pty Limited is a leading player in its markets and performs engineering, installation and maintenance work relating to electricity and water distribution networks, telecoms networks and industrial processes.
In accordance with IFRS 3 Revised, the fair value of the identifiable assets and liabilities acquired will be measured, and the related deferred tax effects will be determined. The purchase price was €69 million. The goodwill related to the J&P Richardson acquisition was provisionally measured at €58 million on the date the Group took control.
The main acquisitions in 2015 involved VINCI Energies (Orteng Engenharia e Sistemas and APX Intégration), VINCI Construction International Network (HEB Construction), VINCI (Constructora Conconcreto) and Soletanche Freyssinet (Grupo Rodio Kronsa).
In relation to these companies, VINCI assessed the fair value of the identifiable assets and liabilities acquired in accordance with IFRS 3 Amended. The values allocated to identifiable acquired assets and liabilities on the dates when control was acquired in 2015 were not adjusted materially in the first half of 2016. At 30 June 2016, the allocation of purchase prices resulted in the recognition of:
Details of these transactions are provided in Note B.2. "Changes in consolidation scope" in the 2015 registration document.
Based on the Group's organisational structure and internal reporting system, segment information is presented by business line.
The Group consists of two core businesses (Concessions and Contracting), which each consist of business lines.
VINCI Energies: electrical works and engineering, information and communication technology, heating ventilation and air conditioning engineering, insulation, fire protection and facilities management.
Eurovia: building and maintenance of roads, motorways and railways, urban infrastructure, environmental work, production of materials, demolition works, recycling, and the manufacturing and installation of road signage.
VINCI Construction: design and construction of buildings and civil engineering infrastructure, hydraulic works, foundations, soil treatment, specialised civil engineering.
VINCI Immobilier, whose business consists of property development (residential and commercial), reports directly to the VINCI holding company.
The data below is for the businesses and business lines concerned and is stated before elimination, at their own level, of transactions with the rest of the Group.
| Contracting | VINCI | |||||||
|---|---|---|---|---|---|---|---|---|
| (in € millions) | Concessions | VINCI Energies |
Eurovia | VINCI Construction |
Total | Immobilier and holding companies |
Eliminations | Total |
| Income statement | ||||||||
| Revenue (*) | 2,882 | 4,960 | 3,282 | 6,453 | 14,695 | 265 | (223) | 17,619 |
| Concession subsidiaries' works revenue |
340 | - | - | - | - | - | (157) (**) | 183 |
| Total revenue | 3,222 | 4,960 | 3,282 | 6,453 | 14,695 | 265 | (380) | 17,802 |
| Operating income from ordinary activities |
1,361 | 274 | (28) | 92 | 338 | 20 | - | 1,720 |
| % of revenue (*) | 47.2% | 5.5% | -0.9% | 1.4% | 2.3% | - | - | 9.8% |
| Recurring operating income | 1,389 | 262 | (30) | 58 | 291 | 22 | - | 1,702 |
| Operating income | 1,394 | 260 | (30) | 60 | 290 | 22 | - | 1,706 |
| Cash flow statement | ||||||||
| Cash flows from operations before tax and financing costs |
2,019 | 289 | 59 | 211 | 560 | 27 | - | 2,606 |
| % of revenue (*) | 70.1% | 5.8% | 1.8% | 3.3% | 3.8% | - | - | 14.8% |
| Depreciation and amortisation | 653 | 55 | 112 | 165 | 332 | 2 | - | 987 |
| Net increase/(decrease) in provisions and impairment |
9 | (2) | 4 | (7) | (4) | (2) | - | 2 |
| Operating investments (net of disposals) |
(16) | (42) | (116) | (122) | (281) | (2) | - | (299) |
| Operating cash flow | 1,132 | (178) | (399) | (388) | (966) | 232 | - | 398 |
| Growth investments in concessions and PPPs |
(419) | 1 | 2 | (20) | (17) | - | - | (435) |
| Free cash flow (after investments) |
713 | (177) | (397) | (408) | (982) | 232 | - | (38) |
| Balance sheet | ||||||||
| Capital employed at 30/06/2016 | 27,319 | 2,979 | 1,138 | 385 | 4,502 | 310 | - | 32,130 |
| of which investments in companies accounted for under the equity method |
969 | 6 | 107 | 259 | 372 | 115 | - | 1,457 |
| Net financial surplus (debt) | (23,884) | (761) | (258) | 925 | (94) | 9,588 | - | (14,390) |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
(**) Intragroup revenue of the Contracting business derived from works carried out for the Group's concession operating companies.
| Contracting | VINCI | |||||||
|---|---|---|---|---|---|---|---|---|
| (in € millions) | Concessions | VINCI Energies |
Eurovia | VINCI Construction |
Total | Immobilier and holding companies |
Eliminations | |
| Income statement | ||||||||
| Revenue (*) | 2,699 | 4,795 | 3,445 | 7,005 | 15,244 | 261 | (324) | |
| Concession subsidiaries' works revenue |
350 | - | - | - | - | - | (98) (**) | |
| Total revenue | 3,049 | 4,795 | 3,445 | 7,005 | 15,244 | 261 | (422) | |
| Operating income from ordinary activities |
1,186 | 260 | (48) | 103 | 315 | 39 | - | |
| % of revenue (*) | 44.0% | 5.4% | -1.4% | 1.5% | 2.1% | - | - | |
| Recurring operating income | 1,216 | 251 | (47) | 123 | 327 | 43 | - | |
| Operating income | 1,216 | 251 | (54) | 121 | 318 | 43 | - | |
| Cash flow statement | ||||||||
| Cash flow from operations before tax and financing costs |
1,879 | 279 | 35 | 243 | 557 | 34 | - | |
| % of revenue (*) | 69.6% | 5.8% | 1.0% | 3.5% | 3.7% | - | - | |
| Depreciation and amortisation | 703 | 54 | 109 | 173 | 337 | 2 | - | |
| Net increase/(decrease) in provisions and impairment |
(5) | (1) | (23) | (7) | (32) | - | - | |
| Operating investments (net of disposals) |
(14) | (39) | (80) | (141) | (259) | (1) | - | |
| Operating cash flow | 1,033 | (87) | (246) | (299) | (633) | 243 | - | |
| Growth investments in concessions and PPPs |
(385) | 1 | (7) | (5) | (11) | - | - | |
| Free cash flow (after investments) |
648 | (86) | (254) | (304) | (644) | 243 | - | |
| Balance sheet | ||||||||
| Capital employed at 30/06/2015 | 26,325 | 2,946 | 1,262 | 423 | 4,631 | 246 | - | |
| of which investments in companies accounted for under the equity method |
858 | 10 | 109 | 322 | 441 | 41 | - | |
| Net financial surplus (debt) | (19,777) | (630) | (117) | 1,382 | 635 | 5,267 | - |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
(**) Intragroup revenue of the Contracting business derived from works carried out for the Group's concession operating companies.
2015
| Contracting | VINCI | |||||||
|---|---|---|---|---|---|---|---|---|
| (in € millions) | Concessions | VINCI Energies |
Eurovia | VINCI Construction |
Total | Immobilier and holding companies |
Eliminations | |
| Income statement | ||||||||
| Revenue (*) | 5,804 | 10,180 | 7,899 | 14,491 | 32,570 | 707 | (562) | 38,518 |
| Concession subsidiaries' works revenue |
882 | - | - | - | - | - | (239) (**) | |
| Total revenue | 6,686 | 10,180 | 7,899 | 14,491 | 32,570 | 707 | (802) | |
| Operating income from ordinary activities |
2,576 | 568 | 233 | 299 | 1,100 | 82 | - | |
| % of revenue (*) | 44.4% | 5.6% | 3.0% | 2.1% | 3.4% | - | - | |
| Recurring operating income | 2,627 | 538 | 237 | 292 | 1,067 | 94 | - | |
| Operating income | 2,627 | 527 | 224 | 247 | 998 | 90 | - | |
| Cash flow statement | ||||||||
| Cash flow from operations before tax and financing costs |
3,933 | 597 | 432 | 536 | 1,565 | 166 | - | |
| % of revenue (*) | 67.8% | 5.9% | 5.5% | 3.7% | 4.8% | - | - | |
| Depreciation and amortisation | 1,338 | 113 | 230 | 348 | 691 | 4 | - | |
| Net increase/(decrease) in provisions and impairment |
32 | 5 | 8 | 16 | 30 | (1) | - | |
| Operating investments (net of disposals) |
(29) | (104) | (193) | (292) | (589) | (6) | - | |
| Operating cash flow | 2,381 | 465 | 415 | 228 | 1,108 | 408 | - | |
| Growth investments in concessions and PPPs |
(917) | 2 | (1) | 13 | 14 | - | - | |
| Free cash flow (after investments) |
1,464 | 467 | 414 | 242 | 1,122 | 408 | - | |
| Balance sheet | ||||||||
| Capital employed at 31/12/2015 | 26,247 | 2,581 | 757 | (7) | 3,331 | 554 | - | |
| of which investments in companies accounted for under the equity method |
871 | 6 | 110 | 308 | 424 | 109 | - | |
| Net financial surplus (debt) | (23,551) | (472) | 174 | 1,332 | 1,034 | 10,081 | - | (12,436) |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
(**) Intragroup revenue of the Contracting business derived from works carried out for the Group's concession operating companies.
| Concessions | |||||
|---|---|---|---|---|---|
| (in € millions) | VINCI Autoroutes | VINCI Airports | Other concessions | Total | |
| Income statement | |||||
| Revenue (*) | 2,365 | 455 | 62 | 2,882 | |
| Concession subsidiaries' works revenue | 320 | 20 | - | 340 | |
| Total revenue | 2,685 | 476 | 62 | 3,222 | |
| Operating income from ordinary activities | 1,205 | 160 | (4) | 1,361 | |
| % of revenue (*) | 51.0% | 35.3% | -7.2% | 47.2% | |
| Recurring operating income | 1,199 | 187 | 3 | 1,389 | |
| Operating income | 1,199 | 187 | 8 | 1,394 | |
| Cash flow statement | |||||
| Cash flows from operations before tax and financing costs | 1,766 | 239 | 13 | 2,019 | |
| % of revenue (*) | 74.7% | 52.6% | 21.5% | 70.1% | |
| Depreciation and amortisation | 570 | 78 | 5 | 653 | |
| Net increase/(decrease) in provisions and impairment | 8 | 1 | - | 9 | |
| Operating investments (net of disposals) | (4) | (6) | (7) | (16) | |
| Operating cash flow | 913 | 135 | 84 | 1,132 | |
| Growth investments in concessions and PPPs | (359) | (55) | (5) | (419) | |
| Free cash flow (after investments) | 554 | 80 | 79 | 713 | |
| Balance sheet | |||||
| Capital employed at 30/06/2016 | 21,886 | 4,944 | 489 | 27,319 | |
| of which investments in companies accounted for under the equity method | - | 895 | 74 | 969 | |
| Net financial surplus (debt) | (19,643) | (3,826) | (415) | (23,884) |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
| Concessions | ||||||
|---|---|---|---|---|---|---|
| (in € millions) | VINCI Autoroutes (**) | VINCI Airports | Other concessions (**) | |||
| Income statement | ||||||
| Revenue (*) | 2,253 | 384 | 62 | |||
| Concession subsidiaries' works revenue | 256 | 63 | 31 | |||
| Total revenue | 2,509 | 447 | 93 | |||
| Operating income from ordinary activities | 1,070 | 138 | (21) | |||
| % of revenue (*) | 47.5% | 35.9% | -34.0% | |||
| Recurring operating income | 1,068 | 151 | (2) | |||
| Operating income | 1,068 | 151 | (2) | |||
| Cash flow statement | ||||||
| Cash flows from operations before tax and financing costs | 1,678 | 198 | 4 | |||
| % of revenue (*) | 74.4% | 51.7% | 5.9% | |||
| Depreciation and amortisation | 635 | 63 | 5 | |||
| Net increase/(decrease) in provisions and impairment | (10) | 1 | 4 | |||
| Operating investments (net of disposals) | (5) | (5) | (4) | |||
| Operating cash flow | 932 | 136 | (35) | |||
| Growth investments in concessions and PPPs | (307) | (53) | (25) | |||
| Free cash flow (after investments) | 625 | 83 | (60) | |||
| Balance sheet | ||||||
| Capital employed at 30/06/2015 | 21,997 | 3,614 | 714 | |||
| of which investments in companies accounted for under the equity method | - | 679 | 179 | |||
| Net financial surplus (debt) | (16,738) | (2,901) | (138) |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
(**) 2015 figures adjusted following the transfer of Transjamaican Highway Ltd and Jamaican Infra Operator from VINCI Autoroutes to VINCI Concessions.
| Concessions | ||||||
|---|---|---|---|---|---|---|
| (in € millions) | VINCI Autoroutes (**) | VINCI Airports | Other concessions (**) | |||
| Income statement | ||||||
| Revenue (*) | 4,871 | 820 | 112 | |||
| Concession subsidiaries' works revenue | 746 | 93 | 42 | |||
| Total revenue | 5,617 | 914 | 155 | |||
| Operating income from ordinary activities | 2,350 | 289 | (64) | |||
| % of revenue (*) | 48.2% | 35.3% | -56.6% | |||
| Recurring operating income | 2,341 | 320 | (34) | |||
| Operating income | 2,341 | 320 | (35) | |||
| Cash flow statement | ||||||
| Cash flows from operations before tax and financing costs | 3,522 | 412 | - | |||
| % of revenue (*) | 72.3% | 50.2% | -0.1% | |||
| Depreciation and amortisation | 1,204 | 124 | 10 | |||
| Net increase/(decrease) in provisions and impairment | (9) | 5 | 36 | |||
| Operating investments (net of disposals) | (10) | (3) | (15) | |||
| Operating cash flow | 2,139 | 298 | (55) | |||
| Growth investments in concessions and PPPs | (784) | (109) | (24) | |||
| Free cash flow (after investments) | 1,355 | 188 | (79) | |||
| Balance sheet | ||||||
| Capital employed at 31/12/2015 | 21,866 | 3,634 | 747 | |||
| of which investments in companies accounted for under the equity method | - | 706 | 164 | |||
| Net financial surplus (debt) | (20,247) | (2,812) | (492) |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
(**) 2015 figures adjusted following the transfer of Transjamaican Highway Ltd and Jamaican Infra Operator from VINCI Autoroutes to VINCI Concessions.
| (in € millions) | First half 2016 | % | First half 2015 | % | Full year 2015 | % |
|---|---|---|---|---|---|---|
| France | 10,348 | 58.7% | 10,621 | 59.4% | 22,414 | 58.2% |
| United Kingdom | 1,261 | 7.2% | 1,331 | 7.4% | 2,679 | 7.0% |
| Germany | 1,192 | 6.8% | 1,150 | 6.4% | 2,703 | 7.0% |
| Central and Eastern Europe (*) | 626 | 3.6% | 708 | 4.0% | 1,884 | 4.9% |
| Other European countries | 1,378 | 7.8% | 1,257 | 7.0% | 2,699 | 7.0% |
| Europe (**) | 14,805 | 84.0% | 15,067 | 84.3% | 32,379 | 84.1% |
| of which European Union | 14,447 | 82.0% | 14,728 | 82.4% | 31,594 | 82.0% |
| North America | 620 | 3.5% | 609 | 3.4% | 1,408 | 3.7% |
| Central and South America | 454 | 2.6% | 455 | 2.5% | 956 | 2.5% |
| Africa | 661 | 3.8% | 671 | 3.8% | 1,479 | 3.8% |
| Russia, Asia Pacific and Middle East | 1,078 | 6.1% | 1,078 | 6.0% | 2,295 | 6.0% |
| International excluding Europe | 2,814 | 16.0% | 2,813 | 15.7% | 6,139 | 15.9% |
| International excluding France | 7,271 | 41.3% | 7,259 | 40.6% | 16,104 | 41.8% |
| Revenue (***) | 17,619 | 100.0% | 17,880 | 100.0% | 38,518 | 100.0% |
(*) Albania, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine.
(**) Of which eurozone: €12,526 million in the first half of 2016, €12,648 million in the first half of 2015 and €27,044 million for full year 2015.
(***) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
Revenue arising outside France amounted to €7,271 million in the first half of 2016, stable relative to the first half of 2015. It accounted for 41.3% of revenue excluding concession subsidiaries' revenue derived from works carried out by non-Group companies (40.6% in the first half of 2015).
The definition of capital employed is non-current assets less working capital requirement (including current provisions) (see Note H.15 "Working capital requirement and current provisions") and less tax payable.
| (in € millions) Note |
30/06/2016 | 30/06/2015 | 31/12/2015 |
|---|---|---|---|
| Capital employed – Assets | |||
| Concession intangible assets 12 |
24,315 | 23,892 | 23,915 |
| - Deferred tax on business combination fair value adjustments | (1,654) | (1,749) | (1,694) |
| Goodwill, gross 9 |
7,823 | 7,357 | 7,485 |
| Other intangible assets | 389 | 401 | 387 |
| Property, plant and equipment 14 |
4,313 | 4,225 | 4,241 |
| Investments in companies accounted for under the equity method 10 |
1,457 | 1,340 | 1,404 |
| Other non-current financial assets 11-13 |
1,751 | 1,798 | 1,745 |
| - Collateralised loans and receivables (at more than one year) | - | (2) | (2) |
| - Derivative financial instruments (non-current assets) | (877) | (809) | (803) |
| Inventories and work in progress 15 |
1,029 | 973 | 964 |
| Trade and other receivables 15 |
10,835 | 11,127 | 10,696 |
| Other current operating assets 15 |
4,772 | 4,685 | 4,635 |
| Other current non-operating assets | 32 | 40 | 30 |
| Current tax assets | 125 | 206 | 365 |
| Capital employed – Liabilities | |||
| Current provisions 15 |
(3,986) | (3,767) | (4,053) |
| Trade payables 15 |
(7,121) | (7,348) | (7,590) |
| Other current operating liabilities 15 |
(10,565) | (10,716) | (10,884) |
| Other current non-operating liabilities | (319) | (278) | (360) |
| Current tax liabilities | (189) | (174) | (351) |
| Total capital employed | 32,130 | 31,202 | 30,132 |
| (in € millions) | First half 2016 | First half 2015 | Full year 2015 |
|---|---|---|---|
| Revenue (*) | 17,619 | 17,880 | 38,518 |
| Concession subsidiaries' revenue derived from works carried out by non-Group companies | 183 | 252 | 643 |
| Total revenue | 17,802 | 18,132 | 39,161 |
| Revenue from ancillary activities | 74 | 86 | 160 |
| Purchases consumed | (3,800) | (4,108) | (8,531) |
| External services | (2,189) | (2,108) | (4,670) |
| Temporary employees | (451) | (461) | (998) |
| Subcontracting (including concession operating companies' construction costs) | (3,583) | (3,883) | (8,598) |
| Taxes and levies | (457) | (474) | (1,086) |
| Employment costs | (4,826) | (4,759) | (9,536) |
| Other operating income and expense on activity | 29 | 39 | 67 |
| Depreciation and amortisation | (987) | (1,041) | (2,033) |
| Net provision expense | 108 | 118 | (178) |
| Operating expenses | (16,156) | (16,678) | (35,563) |
| Operating income from ordinary activities | 1,720 | 1,540 | 3,758 |
| % of revenue (*) | 9.8% | 8.6% | 9.8% |
| Share-based payments (IFRS 2) | (43) | (36) | (95) |
| Profit/(loss) of companies accounted for under the equity method | 2 | 49 | 89 |
| Other recurring operating items | 23 | 33 | 36 |
| Recurring operating income | 1,702 | 1,586 | 3,788 |
| Goodwill impairment expense | - | - | (8) |
| Impact from changes in scope and gain/(loss) on disposals of shares | 5 | (8) | (27) |
| Other non-recurring operating items | - | - | (38) |
| Total non-recurring operating items | 5 | (9) | (73) |
| Operating income | 1,706 | 1,577 | 3,715 |
(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.
Operating income from ordinary activities measures the operating performance of fully consolidated Group subsidiaries before taking account of expenses related to share-based payments (IFRS 2). It excludes the share of the income or loss of companies accounted for under the equity method and certain other recurring operating items.
Recurring operating income is intended to present the Group's recurring operational performance excluding the impact of non-recurring transactions and events during the period. It is obtained by adding the impacts associated with share-based payments (IFRS 2), income/losses from companies accounted for under the equity method and other recurring operating income and expense to operating income from ordinary activities.
Goodwill impairment losses and other material non-recurring operating items, including gains or losses on the disposal of shares and the impact of remeasuring equity interests at fair value when changes of control take place, are recognised under operating income. Operating income is therefore obtained by adding non-recurring income and expenses to recurring operating income.
The Group did not recognise any material non-recurring items in the first half of 2016.
In 2015, non-recurring items recognised by the Group mainly related to the impact of divestments, impairment losses and restructuring costs, particularly in France.
The cost of net financial debt amounted to €262 million in the first half of 2016, down €15 million relative to the first half of 2015 (€277 million). The improvement was mainly the result of the fall in the average amount of long-term debt outstanding, the refinancing of debt repaid in 2015 and 2016 on improved terms and the reduction in interest rates, which benefited the Group due to its policy of keeping a certain level of variable rate debt.
The cost of net financial debt in the period can be analysed as follows:
| (in € millions) | First half 2016 | First half 2015 | Full year 2015 |
|---|---|---|---|
| Financial liabilities at amortised cost | (332) | (349) | (689) |
| Financial assets and liabilities at fair value | 15 | 25 | 43 |
| Derivatives designated as hedges: assets and liabilities | 61 | 48 | 97 |
| Derivatives at fair value through profit and loss: assets and liabilities | (6) | (2) | (8) |
| Total cost of net financial debt | (262) | (277) | (557) |
Other financial income and expense breaks down as follows:
| (in € millions) | First half 2016 | First half 2015 | 2015 |
|---|---|---|---|
| Effect of discounting to present value | (26) | (28) | (49) |
| Borrowing costs capitalised | 18 | 11 | 23 |
| Foreign exchange gains and losses | (13) | 13 | 1 |
| Total other financial income and expense | (21) | (4) | (24) |
The effect of discounting to present value relates mainly to provisions for retirement benefit obligations and represented an expense of €17 million (€18 million in the first half of 2015) and to provisions for the obligation to maintain the condition of concession assets, representing an expense of €9 million (€9 million in the first half of 2015).
Capitalised borrowing costs mainly relate to the ASF group for €13 million (€10 million in the first half of 2015).
The tax expense amounted to €483 million, compared with €462 million in the first half of 2015. The effective tax rate, excluding income from companies accounted for under the equity method, was 34.0%, compared with 37.0% in the first half of 2015. This decrease resulted mainly from the 10.7% corporate income surtax in France no longer applying in 2016. The rate in the first half of 2016 was slightly lower than the standard French tax rate of 34.43% because earnings at some foreign subsidiaries are taxed at a rate lower than the French rate.
Basic earnings per share is the net income for the period after non-controlling interests, divided by the weighted average number of shares outstanding during the period less the weighted average number of treasury shares.
In calculating diluted earnings per share, the weighted average number of shares outstanding is adjusted for the dilutive effect of equity instruments issued by the company, in particular share subscription options and performance shares. The dilution resulting from the exercise of share subscription options and from performance shares is determined using the method defined in IAS 33. In accordance with this standard, plans of which the stock market price is greater than the average price during the period are excluded from the diluted earnings per share calculation.
In calculating basic and diluted earnings per share, earnings are also adjusted for changes in income and expenses taken directly to equity resulting from the conversion into shares of all potentially dilutive instruments.
The tables below show the transition from basic earnings per share to diluted earnings per share:
| Average number | Net income | Earnings per share | |
|---|---|---|---|
| First half 2016 | of shares | (in € millions) | (in €) |
| Total shares | 590,760,326 | ||
| Treasury shares | (36,304,953) | ||
| Basic earnings per share | 554,455,373 | 920 | 1.66 |
| Subscription options | 1,918,879 | ||
| Group savings plan | 364,820 | ||
| Performance shares | 2,396,790 | ||
| Diluted earnings per share | 559,135,862 | 920 | 1.65 |
| Average number | Net income | Earnings per share | |
|---|---|---|---|
| First half 2015 | of shares | (in € millions) | (in €) |
| Total shares | 592,374,369 | ||
| Treasury shares | (38,602,063) | ||
| Basic earnings per share | 553,772,306 | 819 | 1.48 |
| Subscription options | 2,093,849 | ||
| Group savings plan | 678,000 | ||
| Performance shares | 1,080,080 | ||
| Diluted earnings per share | 557,624,235 | 819 | 1.47 |
| Average number | Net income | Earnings per share |
|---|---|---|
| of shares | (in € millions) | (in €) |
| 595,424,717 | ||
| (41,444,909) | ||
| 553,979,808 | 2,046 | 3.69 |
| 2,129,991 | ||
| 500,370 | ||
| 1,556,904 | ||
| 558,167,073 | 2,046 | 3.66 |
Changes in the period were as follows:
| (in € millions) | 30/06/2016 | 31/12/2015 |
|---|---|---|
| Net at beginning of period | 7,296 | 6,994 |
| Goodwill recognised during the period | 364 | 252 |
| Impairment losses | - | (8) |
| Currency translation differences | (14) | 13 |
| Entities no longer consolidated | (3) | (2) |
| Other movements | 1 | 47 |
| Net at end of period | 7,644 | 7,296 |
The acquisition of control over Aerodom resulted in the recognition of €280 million of provisional goodwill at 30 June 2016. In 2015, the main changes related to the acquisition of control over Orteng Engenharia e Sistemas by VINCI Energies and of HEB Construction by VINCI Construction International Network.
The main goodwill items at 30 June 2016 were as follows:
| 31/12/2015 | ||||
|---|---|---|---|---|
| (in € millions) | Gross | Impairment losses | Net | Net |
| VINCI Energies France | 2,325 | - | 2,325 | 2,309 |
| ASF group (*) | 1,935 | - | 1,935 | 1,935 |
| VINCI Airports | 762 | - | 762 | 483 |
| VINCI Energies Germany | 528 | - | 528 | 527 |
| VINCI Energies Benelux | 264 | - | 264 | 264 |
| Entrepose | 201 | - | 201 | 201 |
| Soletanche Bachy | 171 | - | 171 | 171 |
| VINCI Energies Australia - New Zealand | 161 | - | 161 | 97 |
| Nuvia | 137 | - | 137 | 155 |
| VINCI Energies Switzerland | 132 | - | 132 | 126 |
| ETF | 108 | - | 108 | 108 |
| VINCI Construction UK | 160 | (74) | 86 | 97 |
| Other goodwill | 940 | (105) | 835 | 826 |
| Total | 7,823 | (179) | 7,644 | 7,296 |
(*) ASF et Escota.
| 30/06/2016 | 31/12/2015 | ||||||
|---|---|---|---|---|---|---|---|
| (in € millions) | Associates | Joint ventures | Total | Associates | Joint ventures | Total | |
| Value of shares at beginning of period | 1,187 | 217 | 1,404 | 1,094 | 215 | 1,309 | |
| of which Concessions | 762 | 109 | 871 | 772 | 73 | 845 | |
| of which Contracting | 421 | 87 | 508 | 318 | 106 | 424 | |
| of which VINCI Immobilier | 4 | 20 | 25 | 4 | 36 | 40 | |
| Increase in share capital of companies accounted for under the equity method | 4 | 162 | 166 | 90 | 41 | 131 | |
| Group share of profit or loss for the period | 20 | (18) | 2 | 70 | 19 | 89 | |
| Group share of other comprehensive income for the period | (6) | (24) | (30) | 13 | 46 | 60 | |
| Dividends paid | (23) | (31) | (54) | (70) | (55) | (125) | |
| Changes in consolidation scope and other | (46) | (4) | (50) | - | (13) | (12) | |
| Reclassifications () (*) | (75) | 94 | 19 | (11) | (37) | (48) | |
| Value of shares at end of period | 1,060 | 397 | 1,457 | 1,187 | 217 | 1,404 | |
| of which Concessions | 678 | 291 | 969 | 762 | 109 | 871 | |
| of which Contracting | 377 | 84 | 461 | 421 | 87 | 508 | |
| of which VINCI Immobilier | 4 | 22 | 26 | 4 | 20 | 25 |
(*) Reclassifications of shares in the negative net equity-accounted companies under provisions for financial risks.
(**) Classification of Infra Foch TopCo shares as assets held for sale.
The list of the main companies accounted for under the equity method is given in Note O. "Other information on the consolidation scope" in the 2015 registration document.
At 30 June 2016, the Group's interests in associates included, in the Concessions business, the stake in the ADP group (€671 million), and, in the Contracting business, the stake in CFE (€193 million).
The change in the Concessions business' interests in joint ventures in the first half of 2016 arose from the creation of Kansai Airports (€182 million) to take over the concession contracts for Kansai and Osaka airports in Japan.
The impacts recorded under "Group share of other comprehensive income for the period" relate mainly to cash flow and interest rate hedging transactions on concession and public-private partnership projects.
The contribution of equity-accounted companies to the Group's consolidated comprehensive income during the period is as follows:
| First half 2016 | First half 2015 | 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (in € millions) | Associates (*) Joint ventures | Total | Associates Joint ventures | Total | Associates | Joint ventures | Total | ||
| Net income | 20 | (18) | 2 | 29 | 19 | 49 | 70 | 19 | 89 |
| of which Concessions | 14 | 2 | 17 | 14 | 5 | 20 | 38 | 7 | 45 |
| of which Contracting | 5 | (25) | (20) | 15 | (6) | 9 | 32 | (1) | 31 |
| of which VINCI Immobilier | - | 5 | 5 | - | 20 | 20 | - | 13 | 13 |
| Other comprehensive income | (6) | (24) | (30) | 9 | 57 | 66 | 13 | 46 | 60 |
| of which Concessions | (11) | (20) | (30) | 8 | 56 | 64 | 11 | 47 | 58 |
| of which Contracting | 5 | (4) | 1 | 1 | 2 | 2 | 2 | - | 2 |
| of which VINCI Immobilier | - | - | - | - | - | - | - | - | - |
| Comprehensive income | 14 | (42) | (28) | 38 | 77 | 115 | 84 | 65 | 149 |
| of which Concessions | 4 | (17) | (14) | 22 | 61 | 84 | 49 | 53 | 103 |
| of which Contracting | 10 | (29) | (19) | 15 | (4) | 11 | 34 | (2) | 33 |
| of which VINCI Immobilier | - | 5 | 5 | - | 20 | 20 | - | 13 | 13 |
(*) Including Infra Foch TopCo until the date it was classified under assets held for sale.
At 30 June 2016, Group funding commitments to equity-accounted companies (via capital or subordinated loans) amounted to €193 million (€453 million at 31 December 2015). These commitments relate mainly to companies in the Concessions business, including LISEA – the concession company for the high-speed rail line between Tours and Bordeaux – for which funding commitments amounted to €113 million at 30 June 2016. The funding following the creation in April 2016 of Kansai Airports, the company operating the concession for Osaka and Kansai airports, explains the decrease in commitments during the first-half period.
Collateral security has also been granted in the form of pledges of shares in companies accounted for under the equity method. The net carrying amount of the shares pledged at 30 June 2016 was €28 million and included shares in SMTPC (the holder of the concession for the Prado Carénage road tunnel in Marseille) for €26 million.
The Group has also granted collateral security in the form of cash deposits relating to the SEA project for €135 million.
At 30 June 2016, the Group's share of investment commitments given by companies accounted for by the equity method amounted to €1,202 million (€1,401 million at 31 December 2015). They mainly concern infrastructure projects at the construction phase in the Concessions business, including Santiago airport in Chile (€338 million), the new toll section of the M11 motorway between Moscow and St Petersburg (€313 million) and the Regina bypass in Canada (€191 million).
During the period, the decrease in these investment commitments was due to progress with works carried out on concession projects, particularly on the Regina bypass in Canada, at LISEA and at Olympia Odos in Greece.
| (in € millions) | 30/06/2016 | 31/12/2015 |
|---|---|---|
| Loans and receivables | 560 | 644 |
| PPP financial receivables (*) | 216 | 202 |
| Available-for-sale financial assets | 99 | 96 |
| Other non-current financial assets | 875 | 942 |
(*) Information relating to "PPP financial receivables" is provided in Note G.13.
Loans and receivables at amortised cost mainly comprise receivables relating to shareholdings, including shareholders' advances to PPP or concession project companies for €375 million (€285 million at 31 December 2015).
They are presented on the asset side of the consolidated balance sheet under "Other non-current financial assets" (for the part at more than one year). The part at less than one year is included under "Other current financial assets" for €19 million at 30 June 2016 (€17 million at 31 December 2015).
During the period, the change broke down as follows:
| (in € millions) | First half 2016 | Full year 2015 |
|---|---|---|
| Beginning of period | 644 | 630 |
| Acquisitions during the period | 131 | 99 |
| Acquisitions as part of business combinations | - | 66 |
| Impairment losses | (4) | (11) |
| Disposals during the period | (88) | (128) |
| Other movements and currency translation differences | (125) | (11) |
| End of period | 560 | 644 |
Increases during the period mainly concerned Kansai Airports (€95 million). Pathé performed its purchase undertaking by buying bonds issued by Foncière du Montout (the company developing the Olympique Lyonnais stadium) and previously subscribed by the Group, for €43 million. Other changes and currency translation differences included the reclassification of a loan granted to Indigo as assets held for sale in an amount of €112 million.
Available-for-sale assets include shareholdings in subsidiaries that do not meet VINCI's minimum financial criteria for consolidation.
| (in € millions) | VINCI Autoroutes |
VINCI Airports |
Other concessions |
Total for the Concessions business |
Other concession infrastructure |
Total |
|---|---|---|---|---|---|---|
| Gross | ||||||
| 01/01/2015 | 30,254 | 2,558 | 203 | 33,015 | 6 | 33,021 |
| Acquisitions during period (*) | 768 | 99 | 1 | 869 | - | 869 |
| Disposals during period | (3) | (2) | - | (5) | - | (5) |
| Currency translation differences | - | 32 | - | 32 | - | 32 |
| Changes in scope and other | 8 | 10 | 2 | 20 | (6) | 14 |
| 31,028 | 2,697 | 206 | 33,931 | - | 33,931 | |
| Grants received | (8) | (2) | - | (10) | - | (10) |
| 31/12/2015 | 31,020 | 2,695 | 206 | 33,921 | - | 33,921 |
| Acquisitions during period (*) | 335 | 38 | 1 | 374 | - | 374 |
| Disposals during period | (2) | (1) | (2) | (4) | - | (4) |
| Currency translation differences | - | 6 | - | 6 | - | 6 |
| Changes in scope and other | 1 | 568 | - | 569 | - | 569 |
| Grants received | (9) | - | - | (9) | - | (9) |
| 30/06/2016 | 31,345 | 3,306 | 206 | 34,856 | - | 34,856 |
| Amortisation and impairment losses | ||||||
| 01/01/2015 | (8,565) | (165) | (146) | (8,877) | (4) | (8,880) |
| Amortisation during period | (1,025) | (64) | (6) | (1,095) | (2) | (1,096) |
| Impairment losses | - | (1) | - | (1) | - | (1) |
| Reversals of impairment losses | - | 1 | - | 1 | - | 1 |
| Disposals during period | - | - | - | - | - | - |
| Currency translation differences | - | (12) | - | (12) | - | (12) |
| Other | (12) | (9) | (2) | (23) | 5 | (17) |
| 31/12/2015 | (9,602) | (250) | (154) | (10,006) | - | (10,006) |
| Amortisation during period | (486) | (40) | (3) | (529) | (1) | (530) |
| Impairment losses | - | - | - | - | - | - |
| Reversals of impairment losses | - | - | - | - | - | - |
| Disposals during period | - | - | 2 | 2 | - | 2 |
| Currency translation differences | - | 2 | - | 2 | - | 2 |
| Other | (6) | (4) | (1) | (10) | 1 | (10) |
| 30/06/2016 | (10,093) | (292) | (156) | (10,541) | - | (10,541) |
| Net | ||||||
| 01/01/2015 | 21,689 | 2,393 | 57 | 24,139 | 2 | 24,141 |
| 31/12/2015 | 21,418 | 2,444 | 52 | 23,915 | - | 23,915 |
| 30/06/2016 | 21,252 | 3,014 | 50 | 24,315 | - | 24,315 |
(*) Including capitalised borrowing costs.
In the first half of 2016, acquisitions amounted to €374 million (€320 million in the first half of 2015). They include investments by the ASF group for €242 million (€220 million in the first half of 2015), by Cofiroute for €42 million (€31 million in the first half of 2015) and by VINCI Airports for €37 million (€54 million in the first half of 2015). ASF's investments related in particular to further work on the relief motorway for the A9 near Montpellier and the widening of the A63 motorway in the Basque Country.
The changes in scope of the first half of 2016 mainly refer to the consolidation of Aerodom.
Concession intangible assets include assets under construction for a gross amount of €1,350 million at 30 June 2016 (€1,247 million at 31 December 2015). These relate mainly to VINCI Autoroutes subsidiaries (€1,241 million including €959 million for ASF, €160 million for Escota and €93 million for Cofiroute).
The main features of concession and PPP contracts reported using the intangible asset model or the bifurcated model, and commitments relating to these contracts, are described in Note F. "Concession and PPP contracts" in the 2015 registration document.
| (in € millions) | 30/06/2016 | 31/12/2015 |
|---|---|---|
| ASF group | 2,054 | 2,312 |
| Cofiroute | 1,057 | 1,102 |
| Arcos – company holding the concession for the western Strasbourg bypass | 502 | - |
| Grand Ouest airports concession company | 368 | 367 |
| Other | 180 | 134 |
| Total | 4,161 | 3,914 |
The contractual investment obligations of motorway concession companies (ASF group, Cofiroute) consist mainly of undertakings made under multi-year master plans and the motorway stimulus plan implemented in the second half of 2015.
During the period, the increase in investment commitments concerned in particular the project for the western Strasbourg bypass, which is being handled by Arcos, for €502 million. Progress with works by ASF group and Cofiroute concession companies in the first-half period resulted in a €303 million decrease in their commitments.
The above amounts do not include obligations relating to maintenance expenditure on infrastructure under concession, which are provisioned (see Note H.15.2 "Breakdown of current provisions").
Some concession operating companies have given collateral security to guarantee the financing of their investments in concession infrastructure. These break down as follows:
| (in € millions) | Start date | End date | Amount |
|---|---|---|---|
| Arcour | 2008 | 2045 | 587 |
| Aerodom | 2016 | 2019 | 357 |
| Other concession operating companies | 14 |
PPP financial receivables related to concession and PPP contracts managed by the Group (part at more than one year) are presented on the balance sheet under the "Other non-current financial assets" item, which also includes "Loans and receivables" and "Available-for-sale financial assets" (see Note F.11 "Other non-current financial assets").
During the period, the change in PPP financial receivables broke down as follows:
| (in € millions) | First half 2016 | Full year 2015 |
|---|---|---|
| Beginning of period | 202 | 175 |
| Acquisitions during period | 25 | 82 |
| Acquisitions as part of business combinations | - | 3 |
| Impairment losses | - | - |
| Redemptions | (11) | (64) |
| Other movements and currency translation differences | - | 6 |
| End of period | 216 | 202 |
In the first half of 2016, the increase in PPP financial receivables related mainly to the public-private partnership, via PPP company Prisme, for the construction of the new building of the French institute for radiological protection and nuclear safety (IRSN).
In 2015, the increase in PPP financial receivables concerned in particular the Caraibus bus rapid transit project in Fort-de-France, construction of which was completed in 2015.
The part at less than one year of PPP financial receivables is included in the balance sheet under "Other current financial assets". At 30 June 2016, it amounted to €10 million (€11 million at 31 December 2015).
Under their concession and PPP contracts, certain Group subsidiaries undertake to carry out investments. Where the financial asset model or bifurcated model applies, they receive a guarantee of payment from the concession grantor in return for their investment commitment. At 30 June 2016, investment undertakings with respect to contracts under the financial asset or bifurcated models amounted to €14 million (€33 million at 31 December 2015).
Some subsidiaries have given collateral security to guarantee the financing of their investments relating to infrastructure under concession. This collateral amounted to €72 million at 30 June 2016 (€72 million at 31 December 2015), including €37 million for the parking facilities for car rental companies in Nice and €35 million for MMArena (Le Mans stadium).
The commitments made with respect to concession and PPP contracts by companies accounted for under the equity method are presented in Note F.10.3 "Commitments made in respect of associates and joint ventures".
| Fixed assets in connection with concession |
Constructions and investment |
Plant, equipment | |||
|---|---|---|---|---|---|
| (in € millions) | contracts | Land | property | and fixtures | Total |
| Gross | |||||
| 31/12/2015 | 3,577 | 863 | 1,152 | 6,953 | 12,545 |
| 30/06/2016 | 3,815 | 862 | 1,154 | 6,943 | 12,773 |
| Depreciation and impairment losses | |||||
| 31/12/2015 | (2,291) | (291) | (617) | (5,105) | (8,304) |
| 30/06/2016 | (2,388) | (294) | (631) | (5,147) | (8,460) |
| Net | |||||
| 31/12/2015 | 1,286 | 572 | 534 | 1,849 | 4,241 |
| 30/06/2016 | 1,427 | 568 | 523 | 1,795 |
Property, plant and equipment included assets under construction for €243 million at 30 June 2016 (€222 million at 31 December 2015).
At 30 June 2016, assets acquired under finance leases amounted to €109 million (€103 million at 31 December 2015). They concern mainly plant and equipment used in operations. The debts relating to these assets are shown in Note J.20.1 "Detail of long-term financial debt by business".
| Changes 30/06/2016 - 31/12/2015 | |||||
|---|---|---|---|---|---|
| (in € millions) | 30/06/2016 | 30/06/2015 | 31/12/2015 | Changes in operating WCR |
Other changes (*) |
| Inventories and work in progress (net) | 1,029 | 973 | 964 | 60 | 5 |
| Trade and other receivables | 10,835 | 11,127 | 10,696 | 178 | (39) |
| Other current operating assets | 4,772 | 4,685 | 4,635 | 234 | (97) |
| Inventories and operating receivables I |
16,635 | 16,785 | 16,295 | 472 | (132) |
| Trade payables | (7,121) | (7,348) | (7,590) | 388 | 81 |
| Other current operating liabilities | (10,565) | (10,716) | (10,884) | 198 | 121 |
| Trade and other operating payables II |
(17,686) | (18,064) | (18,474) | 586 | 202 |
| Working capital requirement I+II (excluding current provisions) |
(1,051) | (1,279) | (2,179) | 1,058 | 70 |
| Current provisions | (3,986) | (3,767) | (4,053) | 79 | (12) |
| of which part at less than one year of non-current provisions |
(198) | (223) | (227) | 25 | 4 |
| Working capital requirement (including current provisions) |
(5,037) | (5,046) | (6,232) | 1,137 | 59 |
(*) Mainly currency translation differences and changes in consolidation scope.
Changes in current provisions reported in the balance sheet for the first half of 2016 and full-year 2015 were as follows:
| Changes in consolidation |
Change in the | Currency | ||||||
|---|---|---|---|---|---|---|---|---|
| (in € millions) | Opening | Provisions taken |
Provisions used |
Other reversals not used |
scope and miscellaneous |
part at less than one year |
translation differences |
Closing |
| 01/01/2015 | 3,670 | 1,432 | (1,132) | (144) | (17) | 16 | 18 | 3,844 |
| Obligation to maintain the condition of concession assets | 758 | 89 | (100) | (7) | 1 | - | 3 | 744 |
| After-sales service | 379 | 118 | (96) | (16) | (1) | - | 4 | 387 |
| Losses on completion and construction project liabilities | 1,176 | 744 | (687) | (36) | 57 | - | 11 | 1,266 |
| Disputes | 508 | 185 | (125) | (45) | 8 | - | 1 | 532 |
| Restructuring costs | 39 | 31 | (17) | (6) | 5 | - | - | 51 |
| Other current liabilities | 736 | 360 | (226) | (27) | 1 | - | 3 | 847 |
| Reclassification of the part at less than one year | 247 | - | - | - | (3) | (16) | (1) | 227 |
| 31/12/2015 | 3,844 | 1,526 | (1,251) | (137) | 68 | (16) | 20 | 4,053 |
| Obligation to maintain the condition of concession assets | 744 | 50 | (36) | (2) | 22 | - | - | 778 |
| After-sales service | 387 | 50 | (51) | (6) | (3) | - | (5) | 372 |
| Losses on completion and construction project liabilities | 1,266 | 508 | (495) | (20) | 21 | - | (11) | 1,268 |
| Disputes | 532 | 35 | (52) | (18) | (8) | - | (1) | 487 |
| Restructuring costs | 51 | 10 | (16) | (4) | - | - | - | 41 |
| Other current liabilities | 847 | 107 | (116) | (11) | 20 | - | (3) | 843 |
| Reclassification of the part at less than one year | 227 | - | - | - | (4) | (25) | - | 198 |
| 30/06/2016 | 4,053 | 759 | (768) | (62) | 48 | (25) | (21) | 3,986 |
Current provisions relating to the operating cycle consist mainly of provisions in respect of construction contracts and provisions for the obligation to maintain the condition of concession assets.
Such provisions are intended to cover the expenses to be incurred by motorway concession operating companies for road repairs, bridges, tunnels and hydraulic infrastructure. They mainly concern the ASF group for €387 million at 30 June 2016 (€381 million at 31 December 2015) and Cofiroute for €245 million at 30 June 2016 (€241 million at 31 December 2015).
Provisions also include expenses to be incurred by airport concession companies (repairs to runways, traffic lanes and other paved surfaces). They mainly concern the ANA group for €70 million at 30 June 2016 (€70 million at 31 December 2015).
Changes in other non-current provisions reported in the balance sheet (excluding employee benefits) were as follows in the first half of 2016 and 2015:
| Provisions | Provisions | Other reversals | Changes in consolidation scope and |
Change in the part at less |
Currency translation |
|||
|---|---|---|---|---|---|---|---|---|
| (in € millions) | Opening | taken | used | not used | miscellaneous | than one year | differences | Closing |
| 01/01/2015 | 718 | 186 | (142) | (24) | 232 | (16) | 3 | 956 |
| Financial risks | 674 | 54 | (34) | (3) | (47) | - | - | 644 |
| Other liabilities | 528 | 140 | (119) | (13) | (4) | - | - | 532 |
| Reclassification of the part at less than one year | (247) | - | - | - | 3 | 16 | 1 | (227) |
| 31/12/2015 | 956 | 194 | (153) | (16) | (48) | 16 | 1 | 949 |
| Financial risks | 644 | 4 | (16) | - | 103 | - | - | 735 |
| Other liabilities | 532 | 37 | (33) | (7) | 3 | - | - | 533 |
| Reclassification of the part at less than one year | (227) | - | - | - | 4 | 25 | - | (198) |
| 30/06/2016 | 949 | 40 | (49) | (7) | 111 | 25 | - | 1,069 |
Provisions for financial risks comprise the Group's share of the negative net equity of companies accounted for under the equity method. That negative net equity arises from the adjustment to fair value, in the financial statements of the companies concerned, of interest rate derivatives used as cash flow hedges.
Provisions for other liabilities, not directly linked with the operating cycle, include provisions for disputes and arbitration, some of which are described in Note L.27 "Note on litigation". These amounted to €533 million at 30 June 2016 (€532 million at 31 December 2015), including €369 million at more than one year (€349 million at 31 December 2015).
| (in € millions) | 30/06/2016 | 31/12/2015 |
|---|---|---|
| Operating leases | 1,184 | 1,191 |
| Purchase and capital expenditure obligations (*) | 436 | 403 |
(*) Excluding capital investment obligations related to concession and PPP contracts (see Note G. "Concession and PPP contracts").
Operating lease commitments amounted to €1,184 million at 30 June 2016 (€1,191 million at 31 December 2015). Of this, €778 million was for property (€783 million at 31 December 2015) and €406 million for movable items (€408 million at 31 December 2015). The purchase and capital expenditure obligations mentioned above relate mainly to Eurovia, VINCI Energies and VINCI Immobilier.
| (in € millions) | 30/06/2016 | 31/12/2015 |
|---|---|---|
| Collateral security | 30 | 31 |
| Other commitments made (received) | 382 | 321 |
In addition to commitments in connection with concession and PPP contracts, collateral security may be given. This relates mainly to VINCI Energies and Eurovia.
The commitments made and received by the Group in connection with concession contracts and items connected with unrecognised retirement benefit obligations are shown in the following notes:
Commitments made and received by the Group in connection with construction contracts did not change materially in the first half of 2016 and are detailed in Note G.15.2 of the 2015 registration document.
In the first half of 2016, VINCI continued its policy of purchasing its own shares under the programme approved by the combined Shareholders' General Meeting held on 14 April 2015 and the programme approved by the Shareholders' General Meeting of 19 April 2016, for a period of 18 months and relating to a maximum amount of purchases of €2 billion at a maximum share price of €80. In the first half of 2016, 5,469,731 shares were bought at an average price of €63.47, for a total of €347 million.
On 22 June 2016, VINCI signed a share purchase agreement expiring on 28 September 2016 for a maximum amount of €150 million. Since the agreement is for a variable number of shares, a financial debt was recognised. At 30 June 2016, that debt, presented under "Other current financial debt", amounted to €144 million.
Treasury shares (see Note I.18.2 "Treasury shares") are allocated to financing external growth transactions and to covering performance share plans and the employer contributions to international employee share ownership plans. They may also be intended for cancellation.
VINCI's employee savings policy aims to make it easier for Group employees to become shareholders. At 30 June 2016, over 60% of the Group's employees were VINCI shareholders, through unit funds invested in VINCI shares. Since those funds own 9.34% of the company's shares, the Group's current and former employees form its largest group of shareholders.
Neither the Group's consolidated equity nor the equity of parent company VINCI SA is subject to any external constraints in the form of financial covenants.
At 30 June 2016, the parent company's share capital was represented by 594,880,595 ordinary shares of €2.5 nominal value each.
| 30/06/2016 | 31/12/2015 | |
|---|---|---|
| Number of shares at beginning of period | 588,453,075 | 590,098,637 |
| Increases in share capital | 6,427,520 | 10,354,438 |
| Cancelled treasury shares | (12,000,000) | |
| Number of shares at end of period | 594,880,595 | 588,453,075 |
| Number of shares issued and fully paid | 594,880,595 | 588,453,075 |
| Nominal value of one share (in €) | 2.5 | 2.5 |
| Treasury shares held directly by VINCI | 39,466,534 | 34,195,347 |
| of which shares allocated to cover performance share plans and employee share ownership plans | 10,178,086 | 4,906,899 |
Changes in treasury shares were as follows:
| 30/06/2016 | 31/12/2015 | |
|---|---|---|
| Number of shares at beginning of period | 34,195,347 | 35,614,382 |
| Purchases of shares | 5,469,731 | 12,782,264 |
| Allocation of 2013 performance shares to employees | (1,913,455) | |
| Allocation of 2014 performance shares to employees | (505) | |
| Allocation of 2015 performance shares to employees | (500) | |
| Employer contribution in connection with the Castor International plan | (198,544) | (286,839) |
| Cancelled treasury shares | (12,000,000) | |
| Number of shares at end of period | 39,466,534 | 34,195,347 |
At 30 June 2016, the total number of treasury shares held was 39,466,534. These were recognised as a deduction from consolidated equity for €1,874 million.
The main amounts recognised directly in equity are as follows:
| 30/06/2016 | 31/12/2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Attributable to | Attributable to | Attributable to | Attributable to | ||||||
| owners of the | non-controlling | owners of the | non-controlling | ||||||
| (in € millions) Available-for-sale financial assets |
parent | interests | Total | parent | interests | Total | |||
| Reserve at beginning of period | 2 | - | 2 | 2 | - | 2 | |||
| Gross reserve before tax effect at balance sheet date | I | 2 | - | 2 | 2 | - | 2 | ||
| Cash flow hedge | |||||||||
| Reserve at beginning of period | (916) | - | (916) | (1,068) | - | (1,068) | |||
| Changes in fair value of companies accounted for under the equity method |
(77) | - | (77) | 81 | - | 81 | |||
| Other changes in fair value in the period | (35) | - | (35) | (13) | - | (13) | |||
| Fair value items recognised in profit or loss | 35 | - | 35 | 84 | - | 84 | |||
| Changes in consolidation scope and miscellaneous | (1) | - | (1) | (1) | - | (1) | |||
| Gross reserve before tax effect at balance sheet date | II | (995) | - | (995) | (916) | - | (916) | ||
| of which gross reserve relating to companies accounted for under the equity method |
(779) | - | (779) | (701) | - | (701) | |||
| Total gross reserve before tax effects (items that may be recycled to income) |
I+II | (992) | - | (992) | (914) | - | (914) | ||
| Associated tax effect | 321 | - | 321 | 295 | - | 295 | |||
| Reserve net of tax (items that may be recycled to income) |
III | (672) | - | (672) | (618) | - | (618) | ||
| Actuarial gains and losses on retirement benefit obligations |
|||||||||
| Reserve at beginning of period | (344) | - | (344) | (267) | - | (267) | |||
| Actuarial gains and losses recognised in the period | (126) | - | (126) | (105) | - | (105) | |||
| Associated tax effect | 32 | - | 32 | 25 | - | 25 | |||
| Changes in consolidation scope and miscellaneous | 2 | - | 2 | 3 | - | 3 | |||
| Reserve net of tax at end of period (items that may not be recycled to income) |
IV | (436) | - | (436) | (344) | - | (344) | ||
| Total amounts recognised directly in equity | III+IV | (1,107) | - | (1,108) | (962) | - | (963) |
The amount recorded as a reduction of equity relating to cash flow and net investment hedges (negative effect of €995 million) arises from transactions hedging interest rate risk (negative effect of €957 million) including:
a negative amount of €178 million relating to controlled subsidiaries, including a negative amount of 229 million for VINCI Autoroutes subsidiaries and a positive amount of €92 million for VINCI Holding;
a negative effect of €779 million relating to companies accounted for under the equity method, relating mainly to LISEA and other companies managing infrastructure projects on a PPP or concession basis.
These transactions are described in Note J.25.1.2 "Cash flow hedges" in the 2015 registration document.
Dividends paid by VINCI SA to its shareholders in respect of 2015 and 2014 break down as follows:
| 2015 | 2014 | |
|---|---|---|
| Dividend per share (in €) | ||
| Interim dividend | 0.57 | 1.00 (*) |
| Final dividend | 1.27 | 1.22 |
| Net total dividend | 1.84 | 2.22 |
| Amount of dividend (in € millions) | ||
| Interim dividend | 316 | 555 |
| Final dividend | 702 | 673 |
| Net total dividend | 1,018 | 1,228 |
(*) Including a special dividend of €0.45.
VINCI paid the final dividend in respect of 2015 in cash on 28 April 2016 for an amount of €702 million.
At 30 June 2016, net financial debt stood at €14.4 billion, up almost €2 billion compared with 31 December 2015. It breaks down as follows:
| Analysis by | 30/06/2016 | 31/12/2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| accounting | Non | Non | ||||||||
| heading | (in € millions) | current | Ref. | Current (*) | Ref. | Total | current | Current (*) | Total | |
| Bonds | (11,115) | (1) | (1,849) | (3) | (12,964) | (11,147) | (1,315) | (12,462) | ||
| Other bank loans and other financial debt | (3,491) | (2) | (1,434) | (3) | (4,925) | (3,803) | (968) | (4,771) | ||
| Finance lease debt restated | (48) | (2) | (25) | (3) | (72) | (51) | (26) | (77) | ||
| Long-term financial debt (**) | (14,653) | (3,308) | (17,961) | (15,001) | (2,309) | (17,310) | ||||
| Financial | Commercial paper | - | (888) | (3) | (888) | - | (951) | (951) | ||
| liabilities at amortised cost |
Other current financial liabilities | - | (215) | (3) | (215) | - | (68) | (68) | ||
| Bank overdrafts | - | (603) | (3) | (603) | - | (555) | (555) | |||
| Financial current accounts, liabilities | - | (106) | (3) | (106) | - | (103) | (103) | |||
| I - Gross financial debt | (14,653) | (5,120) | (19,773) | (15,001) | (3,986) | (18,987) | ||||
| of which impact of fair value hedges | (832) | (15) | (847) | (744) | (6) | (750) | ||||
| Loans and | Loans and collateralised financial receivables | - | (4) | - | (5) | - | 2 | - | 2 | |
| receivables | Financial current accounts, assets | - | 85 | (6) | 85 | - | 82 | 82 | ||
| Cash management financial assets | - | 81 | (6) | 81 | - | 84 | 84 | |||
| Financial assets at fair value |
Cash equivalents | - | 2,292 | (7) | 2,292 | - | 2,930 | 2,930 | ||
| through profit and loss |
Cash | - | 2,066 | (7) | 2,066 | - | 2,702 | 2,702 | ||
| II - Financial assets | - | 4,525 | 4,525 | 2 | 5,798 | 5,800 | ||||
| Derivative financial instruments – liabilities | (171) | (8) | (184) | (10) | (355) | (224) | (193) | (417) | ||
| Derivatives | Derivative financial instruments – assets | 877 | (9) | 337 | (11) | 1,213 | 803 | 364 | 1,168 | |
| III - Derivative financial instruments | 705 | 153 | 858 | 579 | 172 | 751 | ||||
| Net financial debt | I+II+III | (13,948) | (442) | (14,390) | (14,420) | 1,984 | (12,436) | |||
| Net financial debt breaks down by business as follows: | ||||||||||
| Concessions | (22,972) | (912) | (23,884) | (22,804) | (746) | (23,551) | ||||
| Contracting | (3,119) | 3,025 | (94) | (3,135) | 4,169 | 1,034 | ||||
| Holding companies and VINCI Immobilier | 12,143 | (2,555) | 9,588 | 11,520 | (1,439) | 10,081 |
(*) The current part includes accrued interest not matured.
(**) Including the part at less than one year.
| (in € millions) | Ref. | 30/06/2016 | 31/12/2015 |
|---|---|---|---|
| Bonds | (1) | (11,115) | (11,147) |
| Other loans and borrowings | (2) | (3,539) | (3,854) |
| Current borrowings | (3) | (5,120) | (3,986) |
| Non-current collateralised loans and receivables | (4) | - | 2 |
| Current collateralised loans and receivables | (5) | - | - |
| Cash management financial assets | (6) | 166 | 166 |
| Cash and cash equivalents | (7) | 4,358 | 5,632 |
| Derivative financial instruments – non-current liabilities | (8) | (171) | (224) |
| Derivative financial instruments – non-current assets | (9) | 877 | 803 |
| Derivative financial instruments – current liabilities | (10) | (184) | (193) |
| Derivative financial instruments – current assets | (11) | 337 | 364 |
| Net financial debt | (14,390) | (12,436) |
Derivative financial instruments that are not designated as hedges for accounting purposes are reported as "Derivative financial instruments – current assets" or "Derivative financial instruments – current liabilities", whatever their maturity dates.
The breakdown of long-term financial debt (including the part at less than one year) at 30 June 2016 by business was as follows:
| 30/06/2016 | 31/12/2015 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Holding companies and VINCI |
Holding companies and VINCI |
||||||||
| (in € millions) | Concessions | Contracting | Immobilier | Total | Concessions | Contracting | Immobilier | Total | |
| Bonds | (10,413) | - | (2,551) | (12,964) | (9,372) | - | (3,089) | (12,462) | |
| Other bank loans and other financial debt |
(4,822) | (111) | 9 (*) | (4,925) | (4,649) | (132) | 10 (*) | (4,771) | |
| Finance lease debt | (2) | (70) | - | (72) | (1) | (76) | - | (77) | |
| Long-term financial debt | (15,237) | (182) | (2,542) | (17,961) | (14,023) | (207) | (3,079) | (17,310) |
(*) Net of arrangement commissions relating to the undrawn VINCI syndicated credit family, recognized as a reduction in debt.
At 30 June 2016, long-term net financial debt amounted to €18 billion, up €0.7 billion compared with the 31 December 2015 figure of €17.3 billion. The change was due to the following transactions:
the integration of Aerodom, which has US dollar-denominated bond debt due to mature in November 2019 with a value of €466 million at 30 June 2016;
new financing for the ASF group with a net amount of €890 million arising from an issue of €500 million of bonds maturing in May 2026 and with a coupon of 1% as part of its EMTN (Euro Medium Term Note) programme, and a €390 million loan from the European Investment Bank (EIB) maturing in April 2033 and intended to finance part of the investment in the relief motorway for the A9 near Montpellier;
repayments made in April 2016, i.e. €138 million paid by ASF in relation to a CNA/EIB loan and €500 million paid by VINCI Holding in relation to a bond issue.
At 30 June 2016, the weighted average maturity of the Group's long-term financial debt was 4.5 years (4.6 years at 31 December 2015). The average maturity was 4.9 years in Concession subsidiaries, 2.3 years for holding companies and VINCI Immobilier, and 3.1 years in Contracting.
On 26 May 2016, credit rating agency Moody's raised its long-term credit rating on the Group from Baa1 to A3. It also raised its short-term rating on the Group from P2 to P1.
At 30 June 2016, the Group's credit ratings were as follows:
| Rating | ||||
|---|---|---|---|---|
| Agency | Long term | Outlook | Short term | |
| VINCI SA | Standard & Poor's | A- | Stable | A2 |
| Moody's | A3 | Stable | P1 | |
| ASF | Standard & Poor's | A- | Stable | A2 |
| Moody's | A3 | Stable | P1 | |
| Cofiroute | Standard & Poor's | A- | Stable | A2 |
Some financing agreements involving VINCI and its main subsidiaries include early repayment clauses applicable in the event of non-compliance with financial ratios. The characteristics of the covenants associated with the financing agreements in place at 30 June 2016 remain unchanged relative to 31 December 2015. They are described in Note J.23.3 "Credit ratings and financial covenants" in the 2015 registration document. The relevant ratios were all met at 30 June 2016.
At 30 June 2016, the Group's available resources amounted to €8.7 billion, including €2.7 billion net cash managed and €6 billion of unused confirmed bank credit facilities due to expire in 2021.
Net cash managed, which includes in particular cash management financial assets and commercial paper issued, breaks down as follows:
| 30/06/2016 | |||||||
|---|---|---|---|---|---|---|---|
| (in € millions) | Concessions | Contracting | Holding companies and VINCI Immobilier |
Total | |||
| Cash equivalents | 193 | 329 | 1,770 | 2,292 | |||
| Marketable securities and mutual funds (UCITS) | 69 | 8 | 543 | 620 | |||
| Negotiable debt securities with an original maturity of less than 3 months (*) | 124 | 321 | 1,227 | 1,672 | |||
| Cash | 135 | 1,677 | 255 | 2,066 | |||
| Bank overdrafts | (10) | (518) | (75) | (603) | |||
| Net cash and cash equivalents | 317 | 1,487 | 1,951 | 3,755 | |||
| Cash management financial assets | 26 | 54 | 1 | 81 | |||
| Marketable securities and mutual funds (UCITS) (**) | - | 6 | - | 6 | |||
| Negotiable debt securities and bonds with an original maturity of less than 3 months |
1 | 34 | - | 35 | |||
| Negotiable debt securities and bonds with an original maturity of more than 3 months |
24 | 15 | 1 | 41 | |||
| Commercial paper issued | - | - | (888) | (888) | |||
| Other current financial liabilities | - | (71) | (144) (***) | (215) | |||
| Balance of cash management current accounts | 779 | 1,617 | (2,416) | (21) | |||
| Net cash managed | 1,122 | 3,087 | (1,496) | 2,713 |
(*) Including term deposits, interest earning accounts and certificates of deposit.
(**) Short-term investments in UCITS units that do not meet the criteria to be designated as cash equivalents as defined by IAS 7.
(***) Current financial liabilities linked to the treasury share buy-back programme due in September 2016 (See Note I.18).
| 31/12/2015 | ||||||
|---|---|---|---|---|---|---|
| (in € millions) | Concessions | Contracting | Holding companies and VINCI Immobilier |
Total | ||
| Cash equivalents | 151 | 440 | 2,340 | 2,930 | ||
| Marketable securities and mutual funds (UCITS) | 26 | 22 | 424 | 472 | ||
| Negotiable debt securities with an original maturity of less than 3 months (*) | 125 | 418 | 1,915 | 2,458 | ||
| Cash | 96 | 1,709 | 897 | 2,702 | ||
| Bank overdrafts | - | (467) | (88) | (555) | ||
| Net cash and cash equivalents | 247 | 1,682 | 3,148 | 5,077 | ||
| Cash management financial assets | 34 | 49 | 1 | 84 | ||
| Marketable securities and mutual funds (UCITS) (**) | - | 7 | - | 7 | ||
| Negotiable debt securities and bonds with an original maturity of less than 3 months |
1 | 33 | - | 34 | ||
| Negotiable debt securities and bonds with an original maturity of more than 3 months |
33 | 9 | 1 | 43 | ||
| Commercial paper issued | - | - | (951) | (951) | ||
| Other current financial liabilities | (8) | (60) | - | (68) | ||
| Balance of cash management current accounts | 534 | 2,597 | (3,152) | (21) | ||
| Net cash managed | 807 | 4,269 | (954) | 4,121 |
(*) Including term deposits, interest earning accounts and certificates of deposit.
(**) Short-term investments in UCITS units that do not meet the criteria to be designated as cash equivalents as defined by IAS 7.
The investment vehicles used by the Group are money market UCITS, interest earning accounts, term deposits and negotiable debt securities (certificates of deposit generally with a maturity of less than three months). They are measured and recognised at their fair value.
Net cash is managed with limited risk to capital. The performance and the risks associated with these investments of net cash are monitored regularly through a report detailing the yield of the various assets on the basis of their fair value and analysing the associated level of risk.
At 30 June 2016, net cash managed by VINCI SA amounted to €486 million, arising mainly from the cash surpluses transferred upwards from French subsidiaries through a cash pooling system. VINCI Finance International, a wholly owned subsidiary of VINCI SA that centralises the cash surpluses of foreign subsidiaries, managed cash investments of €435 million at 30 June 2016.
This centralisation enables the management of financial resources to be optimised at Group level and the risks relating to the counterparties and investment vehicles used to be better managed.
Other subsidiaries' cash investments are managed in a decentralised manner while complying with the guidelines and instructions issued by VINCI, which define in particular the investment vehicles and the counterparties authorised. The investments amounted to €1.8 billion at 30 June 2016, including €0.3 billion for the Concessions business and €1.5 billion for the Contracting business.
VINCI, ASF and Cofiroute each have a revolving credit facility whose maturities were extended in the first half of 2016 until May 2021 after the lenders agreed to the use of the second extension option.
At 30 June 2016, none of the above credit facilities was being used.
The amounts authorised and used, and the maturities of the credit lines of VINCI and its subsidiaries are as follows:
| (in € millions) | Amounts authorised at 30/06/2016 |
Within 1 year | Between 1 and 5 years |
After 5 years |
|---|---|---|---|---|
| VINCI syndicated facility | 3,830 | - | 3,830 | - |
| ASF: syndicated facility | 1,670 | - | 1,670 | - |
| Cofiroute: syndicated facility | 500 | - | 500 | - |
| Total | 6,000 | - | 6,000 | - |
At 30 June 2016, VINCI SA had a commercial paper programme of €3 billion. The programme is rated A2 by Standard & Poor's and P1 by Moody's.
At 30 June 2016, VINCI SA had made use of its programme in an amount of €888 million.
The Group's policies and procedures for managing financial risk are identical to those described in Note J.25 "Financial risk management" in the 2015 registration document. Transactions to set up or unwind hedging instruments during the first-half period did not materially alter VINCI's exposure to potential financial risks.
The main risks – interest rate risk, foreign exchange risk, credit and counterparty risk and equity risk – are described in paragraphs 25.1, 25.2, 25.3 and 25.4 respectively of the 2015 registration document.
The method of measuring the fair value of financial assets and liabilities was not altered in the first half of 2016. The following table shows the carrying amount and the fair value of financial assets and liabilities in the balance sheet by accounting category as defined in IAS 39:
| 30/06/2016 | Accounting categories (1) | Fair value | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance sheet headings and classes of instrument |
Financial instruments at fair value through profit and loss |
Derivatives designated as hedges |
Financial assets measured at fair value |
Available for-sale financial assets |
Loans and receivables |
Financial liabilities at amortised cost |
Total net book value of the class |
Level 1: quoted prices and cash |
Level 2: internal model using observable factors |
Level 3: internal model using non observable factors |
Fair value of the class |
| Available-for-sale | - | - | - | 99 | - | - | 99 | 1 | - | 98 | 99 |
| financial assets Loans and financial |
|||||||||||
| receivables incl. PPP | - | - | - | - | 776 | - | 776 | - | 776 | - | 776 |
| I - Non-current financial assets (2) |
- | - | - | 99 | 776 | - | 875 | 1 | 776 | 98 | 875 |
| II - Derivative financial instruments – assets |
209 | 1,004 | - | - | - | - | 1,213 | - | 1,213 | - | 1,213 |
| Cash management financial assets |
81 | 81 | 6 | 75 | 81 | ||||||
| Financial current accounts, assets |
85 | 85 | 85 | - | 85 | ||||||
| Cash equivalents | 2,292 | 2,292 | 620 | 1,672(3) | 2,292 | ||||||
| Cash | 2,066 | 2,066 | 2,066 | 2,066 | |||||||
| III - Current financial assets |
- | - | 4,525 | - | - | - | 4,525 | 2,778 | 1,747 | - | 4,525 |
| Total assets | 209 | 1,004 | 4,525 | 99 | 776 | - | 6,613 | 2,778 | 3,736 | 98 | 6,613 |
| Bonds | (12,964) | (12,964) | (13,216) | (718) | - | (13,933) | |||||
| Other bank loans and other financial debt |
(4,925) | (4,925) | (1,384)(4) | (3,669) | - | (5,053) | |||||
| Finance lease debt restated |
(72) | (72) | - | (72) | - | (72) | |||||
| IV - Long-term financial debt |
- | - | - | - | - | (17,961) | (17,961) | (14,600) | (4,459) | - | (19,059) |
| V - Derivative financial instruments – |
(172) | (183) | - | (355) | - | (355) | - | (355) | |||
| Other current financial liabilities |
(1,103) | (1,103) | - | (1,103) | - | (1,103) | |||||
| Financial current accounts - liabilities |
(106) | (106) | (106) | - | - | (106) | |||||
| Bank overdrafts | (603) | (603) | (603) | - | - | (603) | |||||
| VI - Current financial liabilities |
(1,812) | (1,812) | (709) | (1,103) | - | (1,812) | |||||
| Total liabilities | (172) | (183) | - | - | - | (19,773) | (20,128) | (15,308) | (5,917) | - | (21,226) |
| Total | 38 | 821 | 4,525 | 99 | 776 | (19,773) | (13,515) | (12,530) | (2,181) | 98 | (14,613) |
(1) The Group holds no held-to-maturity financial assets.
(2) See Notes F.11 and G.13.
(3) Mainly comprising certificates of deposit, term deposits and interest bearing accounts.
(4) Listed price of loans issued by CNA.
| 31/12/2015 | Accounting categories (1) | Fair value | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance sheet headings and classes of instrument |
Financial instruments at fair value through profit and loss |
Derivatives designated as hedges |
Financial assets measured at fair value |
Available for-sale financial assets |
Loans and receivables |
Financial liabilities at amortised cost |
Total net book value of the class |
Level 1: quoted prices and cash |
Level 2: internal model using observable factors |
Level 3: internal model using non observable factors |
Fair value of the class |
| Available-for-sale financial assets |
- | - | - | 96 | - | - | 96 | 1 | - | 96 | 96 |
| Loans and financial receivables incl. PPP |
- | - | - | - | 846 | - | 846 | - | 846 | - | 846 |
| I - Non-current financial assets (2) |
- | - | - | 96 | 846 | - | 942 | 1 | 846 | 96 | 942 |
| II - Derivative financial instruments – assets |
229 | 939 | - | - | - | - | 1,168 | - | 1,168 | - | 1,168 |
| Cash management financial assets |
84 | 84 | 7 | 77 | 84 | ||||||
| Financial current accounts, assets |
82 | 82 | 82 | - | 82 | ||||||
| Cash equivalents | 2,930 | 2,930 | 472 | 2,458(3) | 2,930 | ||||||
| Cash | 2,702 | 2,702 | 2,702 | 2,702 | |||||||
| III - Current financial assets |
- | - | 5,798 | - | - | - | 5,798 | 3,264 | 2,535 | - | 5,798 |
| Total assets | 229 | 939 | 5,798 | 96 | 846 | - | 7,908 | 3,264 | 4,548 | 96 | 7,908 |
| Bonds | (12,462) | (12,462) | (12,590) | (686) | - | (13,277) | |||||
| Other bank loans and other financial debt |
(4,771) | (4,771) | (1,442)(4) | (3,438) | - | (4,880) | |||||
| Finance lease debt restated |
(77) | (77) | - | (77) | - | (77) | |||||
| IV - Long-term financial debt |
- | - | - | - | - | (17,310) | (17,310) | (14,032) | (4,201) | - | (18,233) |
| V - Derivative financial instruments – |
(187) | (230) | - | (417) | - | (417) | - | (417) | |||
| Other current financial liabilities |
(1,019) | (1,019) | - | (1,019) | - | (1,019) | |||||
| Financial current accounts - liabilities |
(103) | (103) | (103) | - | - | (103) | |||||
| Bank overdrafts | (555) | (555) | (555) | - | - | (555) | |||||
| VI - Current financial liabilities |
(1,677) | (1,677) | (658) | (1,019) | - | (1,677) | |||||
| Total liabilities | (187) | (230) | - | - | - | (18,987) | (19,404) | (14,691) | (5,637) | - | (20,327) |
| Total | 42 | 709 | 5,798 | 96 | 846 | (18,987) | (11,496) | (11,426) | (1,089) | 96 | (12,419) |
(1) The Group holds no held-to-maturity financial assets.
(2) See Notes F.11 and G.13.
(3) Mainly comprising certificates of deposit, term deposits and interest bearing accounts.
(4) Listed price of loans issued by CNA.
At 30 June 2016, provisions for retirement benefit obligations amounted to €1,600 million (including €1,542 million at more than one year) compared with €1,475 million at 31 December 2015 (including €1,425 million at more than one year). They comprise provisions for lump sums on retirement and provisions for obligations for supplementary retirement benefits. The increase during the period arose mainly from the decline in discount rates in the eurozone, United Kingdom and Switzerland.
The part at less than one year of these provisions (€58 million at 30 June 2016 and €50 million at 31 December 2015) is reported under "Other current non-operating liabilities". Details of benefits enjoyed by Group employees are provided in Note K.27.1 "Provisions for retirement benefit obligations" in the 2015 registration document.
The expense recognised for the first half of 2016 in respect of retirement benefit obligations is half the forecast expense for 2016 determined on the basis of actuarial assumptions at 31 December 2015 and in accordance with IAS 19.
Provisions for other employee benefits mainly include long-service bonuses and jubilee bonuses. At 30 June 2016, these provisions amounted to €104 million (€107 million at 31 December 2015).
The expense relating to employee benefits has been assessed at €43 million for the first half of 2016 (€36 million in the first half of 2015), including €26 million in respect of performance share plans (€20 million in the first half of 2015) and €17 million in respect of employee savings plans (€16 million in the first half of 2015).
The features of the various plans in progress are described below.
The number and weighted average exercise prices of share subscription options outstanding at 30 June 2016 were as follows:
| 30/06/2016 | 31/12/2015 | ||||
|---|---|---|---|---|---|
| Average exercise | Average exercise | ||||
| price | price | ||||
| Options | (in €) | Options | (in €) | ||
| Options in circulation at start of period | 5,704,701 | 39.00 | 9,012,808 | 38.87 | |
| Options exercised | (1,663,349) | - | (3,284,382) | - | |
| Options cancelled | (16,265) | - | (23,725) | - | |
| Options in circulation at end of period | 4,025,087 | 38.97 | 5,704,701 | 39.00 | |
| of which exercisable options | 4,025,087 | - | 5,704,701 | - |
The features of plans currently in force are set out in Note K.28.1 "Share subscription options" in the 2015 registration document. No new share subscription option plans were set up in the first half of 2016 or 2015.
| 30/06/2016 | 31/12/2015 | |
|---|---|---|
| Number of shares granted subject to performance conditions at start of period | 2,031,364 | 2,964,443 |
| Shares granted | 2,249,676 | 1,036,658 |
| Shares acquired by beneficiaries | - | (1,914,460) |
| Shares cancelled | (18,142) | (55,277) |
| Number of shares granted subject to performance conditions not vested at end of period | 4,262,898 | 2,031,364 |
| Plan | Plan granted on 19/04/2016 |
Plan granted on 14/04/2015 |
Plan granted on 15/04/2014 |
|---|---|---|---|
| Original number of beneficiaries | 2,051 | 1,846 | 1,850 |
| Vesting date of the shares granted | 19/04/2019 | 14/04/2018 | 15/04/2017 |
| End of conservation period for shares acquired | N/A | N/A | N/A |
| Number of shares granted subject to performance conditions | 2,249,676 | 1,036,658 | 1,027,651 |
| Shares cancelled | - | (20,335) | (28,577) |
| Shares acquired by beneficiaries | - | (500) | (1,675) |
| Number of shares granted subject to performance conditions at end of period | 2,249,676 | 1,015,823 | 997,399 |
On 19 April 2016, VINCI's Board of Directors decided to set up a new long-term incentive plan involving the allotment, subject to conditions, of performance shares (2,249,676 shares) to 2,051 employees. Those shares will only vest definitively after a period of three years. Vesting is subject to beneficiaries being employed by the Group until the end of the vesting period, and to performance conditions in respect of the performance shares.
The performance conditions are as follows:
an internal criterion (80% weighting) consisting of the ratio at 31 December 2018 of average ROCE in the previous three years (2016, 2017 and 2018) to the average weighted average cost of capital (WACC) in the previous three years (2016, 2017 and 2018).
This ratio must be equal to or greater than 1.1 for all performance shares granted to vest. If the ratio is between 1 and 1.1, the number of performance shares that vest will be reduced in proportion and no shares will vest if the ratio is equal to or less than 1.
an external criterion (20%) consisting of the difference, at 31 December 2018, between:
‐ the average total return for VINCI shareholders over a three-year period (2016, 2017 and 2018), minus
‐ the average total return for a shareholder investing in the CAC 40 index over a three-year period (2016, 2017 and 2018). Total shareholder returns include dividends.
The difference must be equal to or greater than +10% for all performance shares granted to vest. If the difference is between +10% and -10%, the number of performance shares that vest will be reduced in proportion and no shares will vest if the difference is equal to or less than -10%.
The fair value of the performance shares has been calculated by an external actuary at the respective grant dates of the shares on the basis of the following characteristics and assumptions:
| 2016 plan | 2015 plan | 2014 plan | |
|---|---|---|---|
| Price of VINCI share on date plan was announced (in €) | 66.18 | 56.45 | 52.61 |
| Fair value of performance share at grant date (in €) | 56.17 | 47.22 | 44.88 |
| Fair value compared with share price at grant date | 84.87% | 83.65% | 85.31% |
| Original maturity (in years) – vesting period | 3 years | 3 years | 3 years |
| Risk-free interest rate (*) | -0.41% | -0.15% | 0.28% |
(*) Three-year government bond yield in the eurozone.
VINCI's Board of Directors defines the conditions for subscribing to Group savings plans in accordance with the authorisations granted to it by the Shareholders' General Meeting.
In France, VINCI issues new shares reserved for employees three times a year at a subscription price that includes a 5% discount against the average stock market price over 20 trading days preceding the meeting of the Board of Directors in which the subscription price was set. Subscribers also benefit from an employer contribution with an annual maximum of €2,500 per person. The benefits granted in this way to Group employees are recognised in profit or loss and are valued in accordance with IFRS 2 on the basis of the following assumptions:
length of subscription period: four months;
length of period during which funds are frozen: five years.
The estimated number of shares subscribed to at the end of the subscription period is calculated based on a linear regression method applied to historical observations of the plans between 2006 and 2015, taking account of the cost of restrictions on the availability of units in the savings fund.
The opportunity cost of the frozen shares subscribed to is estimated from the point of view of a third party holding a diversified portfolio and prepared to acquire the frozen shares in return for a discount, which should correspond to the return demanded by a purchaser on own funds allocated to hedge against market risk over the period in which the shares are frozen (five years). The market risk is assessed on an annual basis applying a value-at-risk approach.
| Group savings plans – France | Second four-month period of 2016 (1 May – 31 August 2016) |
|---|---|
| Anticipated return from VINCI shares | 4.92% |
| Subscription price (in €) | 56.62 |
| Share price at date of Board of Directors' meeting | 60.29 |
| Historical volatility of the VINCI share price | 24.95% |
| Estimated number of shares subscribed | 508,309 |
| Estimated number of shares issued (subscriptions plus employer contribution) | 662,327 |
In the first half of 2016, in accordance with authorisations given to the Board of Directors by the Shareholders' General Meeting, VINCI initiated new savings plans for the employees of certain foreign subsidiaries. Known as Castor International, the plans cover 29 countries in 2016: Australia, Austria, Bahrain, Belgium, Brazil, Cambodia, Canada, Chile, Czech Republic, Germany, Hong Kong, Indonesia, Luxembourg, Malaysia, Mexico, Morocco, Netherlands, New Zealand, Poland, Portugal, Romania, Singapore, Slovakia, Spain, Sweden, Switzerland, the United Arab Emirates, United Kingdom and United States.
The main characteristics of these plans are as follows:
subscription period: from 23 May to 10 June 2016 (seven successive periods between April and October 2016 in the UK);
employer contribution consisting of bonus shares, with delivery deferred for three years where possible, or with immediate delivery but a threeyear vesting period;
no lock-up period beyond the three-year vesting period for bonus shares.
| Subscription price (in €) | 64.90 |
|---|---|
| Closing share price on the last day of the subscription period (in €) | 64.67 |
| Anticipated dividend pay-out rate | 2.55% |
| Fair value of bonus shares on the last day of the subscription period (in €) | 59.97 |
The Group's transactions with related parties mainly concern:
There was no material change in the first half of 2016 in the nature of transactions conducted by the Group with its related parties from those at 31 December 2015, which were referred to in Note E.10.5 "Controlled subsidiaries' transactions with associates and joint ventures" and Note L.29 "Related party transactions" in the 2015 registration document.
The companies comprising the VINCI Group are sometimes involved in litigation arising from their activities. The related risks are assessed by VINCI and the subsidiaries involved on the basis of their knowledge of the cases, and provisions are taken in consequence as appropriate.
The main judicial, administrative or arbitration proceedings in progress at 30 June 2016 were as follows:
King County, the county seat of which is Seattle, Washington (United States), is in dispute with a consortium in which VINCI Construction Grands Projets has a 60% share, the purpose of which is to perform a contract for the construction of two underground tunnels known as "Brightwater Central". Because of particularly difficult geotechnical conditions and changes to the initial contract terms, it was not possible to complete the work as set out in the contract, and this resulted in delays and cost overruns. As a result, King County decided to complete one of the tunnels using another company that had a tunnel boring machine using a technology different to that of the tunnel boring machine that the consortium was contractually obliged to use. King County initiated proceedings before the King County Superior Court in Seattle in order to obtain compensation for the cost of completing the work, and for damage that it claims to have suffered. A hearing took place before a jury which, on 20 December 2012, decided that the consortium should pay \$155 million to King County and that King County should pay \$26 million to the consortium. The King County Superior Court delivered its judgment on 7 May 2013, formalising the jury's decision. After paying the damages, the consortium appealed against this judgment in the Washington Court of Appeals on 31 May 2013 which, through a decision on 9 November 2015, confirmed the judgment of 7 May 2013. It then appealed to the Washington State Supreme Court. In view of the current situation, the Group considers that this dispute is unlikely to have a material effect on its financial situation.
SNCF initiated proceedings in the Paris Administrative Court on 14 March 2011 against around 20 construction companies, including several Group subsidiaries, seeking €59.4 million for damages it claims to have suffered as a result of contracts formed in 1993 relating to the construction of civil engineering structures at the Magenta and Saint Lazare Condorcet railway stations. These proceedings followed a ruling made against those companies by the Conseil de la Concurrence (1) (competition authority) on 21 March 2006.
In July 2014, SNCF asked the court to declare the contracts formed in 1993 void. On 8 March 2016, the Paris Administrative Court noted the reciprocal discontinuance of proceedings and waiver of rights of action between SNCF Mobilités and all VINCI Group companies involved in these proceedings, following a settlement.
The Czech Republic's roads and motorways department (RMD) has made several claims against Eurovia CS, a Eurovia subsidiary based in the Czech Republic, as well as several other non-Group companies. These claims concern works carried out between 2003 and 2007 in building the D47 motorway. In late 2012, the RMD commenced arbitration and legal proceedings challenging (i) the inflation coefficients used in revising the price of works and (ii) the payment of various sums for what RMD alleges was defective work affecting the roads and engineering structures that were built. As regards the claims relating to inflation coefficients, all awards made under arbitration decisions have been much smaller than those sought by RMD. Regarding the other claims, relating mainly to defective work, the RMD is currently claiming CZK3.37 billion, of which Eurovia CS' share would be around 75%. Repairs have been carried out since the start of 2014, costing substantially less than that amount, and technical assessments are underway on the worksite. In view of the current situation, the Group considers that this dispute will not have a material effect on its financial situation.
(1) Now known as the Autorité de la Concurrence.
Soletanche Bachy France has submitted a request for arbitration to the International Chamber of Commerce after ACT (Aqaba Container Terminal) terminated a contract for the construction of an extension to a container terminal in the port of Aqaba in Jordan. Soletanche Bachy is disputing the grounds for terminating the contract, and is claiming \$10 million in damages. ACT contends that it had valid grounds for terminating the contract and that it incurred additional costs in completing the works, and is counter-claiming \$44 million in damages. In view of the current situation, the Group considers that this dispute will not have a material effect on its financial situation.
In 2011, Freyssinet Canada undertook to make prefabricated beams for PIC under a contract worth CAD23 million. Prefabrication work started in 2012 but was suspended in 2013 because the project owner took the view that the beams were defective. PIC terminated the supply contract, resulting in legal proceedings before the Superior Court of Ontario. Freyssinet Canada is claiming CAD11 million for wrongful termination and PIC is claiming CAD55 million from Freyssinet Canada and several Soletanche Freyssinet group companies for losses arising from the alleged defects. In view of the current situation, the Group considers that this dispute is unlikely to have a material effect on its financial situation.
There are several disputes between Consortium Stade de France (CSDF), which operates the Stade de France, and the sporting federations that use the stadium. On 13 June 2013, the French Rugby Federation (Fédération Française de Rugby or FFR) commenced proceedings against CSDF before the Paris regional court (Tribunal de Grande Instance de Paris) on the grounds of "significant contractual imbalance" in the rights and obligations arising from the 15-year stadium provision agreement formed on 26 April 1995. The FFR claimed that the purported imbalance caused it harm, which it quantified at €164 million, corresponding to the amount it claims was wrongly received by CSDF. In separate proceedings, the FFR is claiming €2.3 million in damages for various types of purported commercial harm arising in particular from the cancellation of a match. The Paris regional court decided to stay these proceedings pending a final decision in the proceedings initiated by the FFR against the French state on 17 May 2013 regarding certain clauses in the concession contract that it claimed to be unlawful. In a judgment on 3 October 2014, the Paris administrative court rejected FFR's action. FFR appealed against that judgment to the Paris administrative appeal court, which rejected FFR's appeal. As a result of that definitive decision, the proceedings before the Paris regional court resumed. The French Football Federation (Fédération Française de Football or FFF) also commenced proceedings against CSDF before the Paris regional court on 1 September 2015, seeking a ruling that the stadium provision agreement formed on 3 September 2010 for a period expiring on 28 April 2025 was void. The FFF is also claiming that it has suffered harm, which it has not yet quantified. In addition, the FFF commenced proceedings against the French state before the Paris administrative court on 21 September 2015, seeking an order forcing the state to terminate the concession contract formed with CSDF. In view of the current situation, the Group considers that these disputes will not have a material effect on its financial situation.
To the Company's knowledge, there are no other judicial, administrative or arbitration proceedings that are likely to have, or have had since the publication of the consolidated financial statements for the year ended 31 December 2015, a material effect on the business, financial performance, net assets or financial situation of the Company or Group.
Between 30 June 2016 and the date on which the Board of Directors approved the consolidated financial statements (28 July 2016), no event took place, to the Group's knowledge, that would justify being mentioned under post-balance sheet events.
Reciprocal operations and transactions relating to assets, liabilities, income and expenses between companies that are fully consolidated are eliminated in the consolidated financial statements.
Where a fully consolidated Group entity carries out a transaction with a joint venture or associate that is accounted for under the equity method, income and losses resulting from the transaction are only recognised in the Group's consolidated financial statements to the extent of the interest owned by third parties in the joint venture or associate.
In most cases, the functional currency of companies and establishments is their local currency.
The financial statements of foreign companies of which the functional currency is different from that used in preparing the Group's consolidated financial statements are translated at the closing rate for balance sheet items and at the average rate for the period for income statement items. Any resulting translation differences are recognised under other comprehensive income. Goodwill relating to foreign entities forms part of the assets acquired and is therefore denominated in the company's functional currency and translated at the exchange rate in force at the balance sheet date.
Transactions in foreign currency are translated into euros at the exchange rate at the transaction date. Assets and monetary liabilities denominated in foreign currencies are translated at the closing rate. Foreign exchange gains and losses are recognised in income.
Foreign exchange gains and losses arising on loans denominated in foreign currency or on foreign currency derivative instruments qualifying as hedges of net investments in foreign subsidiaries are recorded under currency translation differences in equity.
Under IFRS 3 Amended, the cost of a business combination is the fair value, at the date of exchange, of the assets given, liabilities assumed, and/or equity instruments issued by the acquirer in exchange for control of the acquiree. Contingent price adjustments are included in the cost of the business combination and are measured at fair value at each balance sheet date. From the acquisition date, any subsequent changes to this fair value resulting from events after control was acquired are recognised in profit or loss.
Expenses that are directly attributable to the acquisition, such as professional fees for due diligence and other related fees, are expensed as they are incurred. They are presented in the "Impact of changes in scope and gain/(loss) on disposals of shares" item on the income statement.
Non-controlling interests in the acquiree, where they give their holders present ownership interests in the entity (voting rights, a share of earnings, etc.) and entitle them to a proportionate share of net assets in the event of liquidation, are measured either at their share of the acquiree's net identifiable assets, or at their fair value. This option is applied on a case-by-case basis for each acquisition.
On the date control is acquired, the cost of acquisition is allocated by recognising the identifiable assets acquired and liabilities assumed from the acquiree at their fair value at that date, except for tax assets and liabilities and employee benefits, which are measured according to their reference standard (IAS 12 and IAS 19 respectively) and asset groups classified as held for sale, which are recognised under IFRS 5 at their fair value less costs to sell. The positive difference between the cost of acquisition and the fair value of the identifiable assets and liabilities acquired constitutes goodwill. Where applicable, goodwill can include a portion of the fair value of non-controlling interests if the full goodwill method has been selected. The Group has 12 months from the date of acquisition to finalise the accounting for business combinations.
In the case of a business combination achieved in stages, previously acquired shareholdings in the acquiree are measured at fair value at the date of acquisition of control. Any resulting gain or loss is recognised in profit or loss.
In accordance with IFRS 10, acquisitions or disposals of non-controlling interests, with no impact on control, are considered as transactions with the Group's shareholders. The difference between the consideration paid to increase the percentage shareholding in an already-controlled entity and the supplementary share of equity thus acquired is recorded under equity attributable to owners of the parent. Similarly, a decrease in the Group's percentage interest in an entity that continues to be controlled is booked in the accounts as a transaction between shareholders, with no impact on profit or loss. Professional fees and other costs relating to acquisitions and disposals of non-controlling interests that have no impact on control, and any associated tax effects, are recorded under equity. Cash flows related to transactions between shareholders are presented under cash flows (used in)/from financing activities in the consolidated cash flow statement.
All other consolidation rules and methods are detailed in Note O. "Other information on the consolidation scope" in the 2015 registration document.
For the period from 1 January 2016 to 30 June 2016
To the Shareholders,
In compliance with the assignment entrusted to us by your Shareholders' General Meeting and in accordance with the requirements of Article L.451-1-2 III of the French Monetary and Financial Code (Code Monétaire et Financier), we hereby report to you on:
These condensed half-yearly consolidated financial statements are the responsibility of the Board of Directors. Our role is to express a conclusion on these financial statements based on our review.
We conducted our review in accordance with the professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for accounting and financial matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-yearly consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 – standard of the IFRSs as adopted by the European Union applicable to interim financial information.
We have also verified the information presented in the half-yearly management report on the condensed half-yearly consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-yearly consolidated financial statements.
The Statutory Auditors
Paris La Défense and Neuilly-sur-Seine, 28 July 2016
KPMG Audit IS DELOITTE & ASSOCIES
Jay Nirsimloo Philippe Bourhis Alain Pons Marc de Villartay
This is a free translation into English of the statutory auditors' review report on the half-yearly financial information issued in French and is provided solely for the convenience of English-speaking readers. This report includes information relating to the specific verification of information given in the Group's halfyearly management report.
This report should be read in conjunction with, and is construed in accordance with, French law and professional standards applicable in France.
"I certify that, to the best of my knowledge, the condensed half-year financial statements presented in the half-year financial report have been prepared in accordance with the applicable financial reporting standards and give a true and fair view of the assets and liabilities, financial position and results of the operations of the Company and of the Group formed by the companies included in the consolidated financial statements, and that the management report for the half-year period (featuring on pages 2 to 11) faithfully presents the important events that have occurred during the first six months of the financial year, their impact on the half-year financial statements, the main transactions between related parties and a description of the main risks and uncertainties in respect of the remaining six months of the financial year."
Xavier Huillard
Chairman and Chief Executive Officer
VINCI 1 cours Ferdinand-de-Lesseps 92851 Rueil-Malmaison Cedex - France Tel: +33 1 47 16 35 00 Fax: +33 1 47 51 91 02 www.vinci.com
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