VINCI - 2012 Annual Results

VINCI - 2012 Annual Results

RUEIL-MALMAISON, France--(BUSINESS WIRE)-- Regulatory News:

VINCI (Paris:DG):

A robust performance in a difficult economic climate:

• Revenue: €38.6 billion (+4.5%)

• Net income: €1.9 billion (+0.7%)

• Earnings per share: €3.54 (+1.6 %)

• 2012 dividend (proposed): €1.77 (stable)

• Stable net financial debt

• Order book: €31.3 billion (+2% over 12 months)

Acquisition of ANA in Portugal: a major step in VINCI's growth strategy for the airport sector

2012 key figures

¹ Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies. Revenue calculated according to IFRIC 12, including works carried out by non-Group companies, amounted to €39,183 million in 2012, up 4.1% compared with 2011.

² EBITDA: cash flow from operations before tax and financing costs.

³ After taking stock options into account.

⁴ Proposed to the Shareholders' General Meeting on 16 April 2013 (with scrip dividend option).

VINCI's Board of Directors, chaired by Xavier Huillard, met on 5 February 2013 to finalise the annual financial statements¹ for the year ended 31 December 2012 prior to submitting them for approval at the Shareholders' General Meeting on 16 April 2013.

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VINCI turned in a robust performance in 2012, with further growth in revenue and net income despite a difficult economic climate, particularly in Europe.

This achievement reflects the soundness of the Group's fundamentals: the complementary nature and resilience of its two core businesses (Concessions and Contracting), growth focusing on high value-added activities outside France and prudent financial management.

VINCI's consolidated revenue rose 4.5% to €38.6 billion. This represents 1.5% organic growth, a 0.8% positive currency effect and 2.3% growth from acquisitions. The main acquisitions, made by Contracting entities, were outside France. In 2012, 37% of total revenue was generated outside France (42% in Contracting).

Cash flow from operations before tax and financing costs (EBITDA) amounted to €5.4 billion (+1%) and equal to 14.0% of revenue. VINCI Autoroutes' EBITDA margin improved slightly to 69.5% in 2012 (69.4% in 2011).

Operating income from ordinary activities (EBIT) was €3.7 billion, up 0.3% and representing 9.5% of revenue, compared with 9.9% in 2011. In Contracting, the EBIT margin was 4.2%, against 4.6% in 2011. The decline is attributable mainly to non-recurring items at Eurovia and VINCI Construction.

Operating income, which reflects the impact of IFRS 2 share-based payment expense, impairment charges and the Group's share of income or loss from companies accounted for under the equity method, was €3.7 billion (+1.4% compared to 2011).

Net income attributable to owners of the parent amounted to €1,917 million, representing 0.7% growth compared with 2011. Earnings per share² increased 1.6% to €3.54, partly due to the Group's purchases of its own shares during 2012.

Net financial debt was €12.5 billion at 31 December 2012, slightly down relative to end-December 2011. Operating cash flow amounted to €3.1 billion in 2012 and covered all investments by VINCI Autoroutes (€1.1 billion), 2012 acquisitions (€0.7 billion) and dividends paid (€1.1 billion).

VINCI's credit ratings were confirmed by Standard & Poor's (BBB+) and Moody's (Baa1), both with stable outlooks.

The Group obtained excellent terms for several bond issues and placements totalling more than €1.5 billion, at an average interest rate of 3.66%, to refinance its debt in advance. VINCI continued to benefit from good access to credit and was able to renew for 5 years a bank credit facility granted to ASF for €1.8 billion.

At 31 December 2012, the Group's liquidity remained very high at €11.5 billion. It comprises €5.0 billion net cash managed and €6.5 billion medium-term bank credit facilities maturing in 2016 and 2017.

Contracting maintained its good business momentum throughout 2012, especially outside France. At 31 December 2012, its order book stood at €31.3 billion (up more than 2% relative to end-2011), of which 45% is outside of France. The international order book is up 12% over 12 months.

¹ The consolidated financial statements have been audited and the Statutory Auditors' report is being published.

² After taking stock options into account.

On 27 December 2012, VINCI was selected by the Portuguese government to acquire ANA, the company that holds the 50-year concession contract for all the country's airports (four on the mainland, four in the Azores and two in Madeira). ANA handled over 30 million passengers in 2012, half of them through its Lisbon hub. By acquiring ANA, VINCI Airports will become one of the leading players in the airport sector, managing a total of 23 airports in Portugal, France and Cambodia with more than 40 million passengers a year. This activity will generate revenue of about €600 million, with EBITDA of about €270 million.

2013 trends

The economic climate is expected to remain difficult in 2013, especially in Europe:

For VINCI Autoroutes entities, the outlook for growth in traffic, which depends on economic growth in France and neighbouring countries, remains uncertain at this stage and could decline along the same lines as in 2012.

Contracting has started the year with a very healthy order book in both France, with the high-speed rail line project between Tours and Bordeaux, and abroad.

However, if trends observed at the end of 2012 continue, there could be a downturn in order intake, due to the Group's emphasis on margins rather than volume for project selection.

Against this backdrop, the Group is expecting business to be flat in 2013, before taking ANA or any other new acquisitions into account.

ANNUAL RESULTS

Revenue: €38,634 million (+4.5% actual; +1.5% on a comparable structure basis)

VINCI's 2012 consolidated revenue amounted to almost €38.6 billion, up 4.5% compared with 2011. This reflects 1.5% organic growth and a 0.8% positive exchange rate effect, along with 2.3% from the acquisitions made by Eurovia (NAPC in India and Carmacks in Canada) and VINCI Energies (GA Gruppe in Germany) in 2012 and by Soletanche Freyssinet in Turkey and the United Kingdom at the end of 2011.

Revenue by business line:

* Excluding concession subsidiaries' revenue derived from works (IFRIC 12).

Operating income from ordinary activities (EBIT): €3,671 million (+0.3%)

Operating income from ordinary activities amounted to €3,671 million in 2012, up 0.3% compared with that of 2011 (€3,660 million).

Operating margin from ordinary activities was 9.5% in 2012, against 9.9% in 2011.

EBIT by business line:

* Excluding concession subsidiaries' revenue derived from works (IFRIC 12).

The Concessions EBIT margin was 40.3%, essentially unchanged compared to 2011 (40.6%).

VINCI Autoroutes' EBIT margin declined from 45.8% in 2011 to 45.5% in 2012, due mainly to the increase in concession depreciation expense following the commissioning of contractual investments (green motorway package and road widening works on the A63).

VINCI Concessions' EBIT margin improved from 14.7% in 2011 to 15.2% in 2012, notably due to a good performance at VINCI Airports.

In Contracting, operating income from ordinary activities declined 2.2% to €1,403 million (€1,435 million in 2011). The EBIT margin was 4.2% (vs. 4.6% in 2011).

VINCI Energies' EBIT margin of 5.6% remained stable compared to 2011.

Eurovia's EBIT margin was 3.2%, a decline compared to 2011 (3.7%), due mainly to losses in Poland as a result of low business levels following the Euro 2012 football tournament and write-downs of works in progress.

The EBIT margin at VINCI Construction was 4.1%, compared with 4.5% in 2011. This reflects provisions taken at VINCI Construction Grands Projets within respect to an unfavourable court decision in the USA.

Operating income: €3,651 million (+1,4 %)

Operating income, after share-based payment expense (IFRS 2), goodwill impairment and VINCI's share in the income or loss of companies accounted for under the equity method, amounted to €3,651 million in 2012 or 9.5% of revenue. This represents a 1.4% increase over that of 2011 (€3,601 million and 9.7% of revenue).

Net income attributable to owners of the parent: €1,917 million (+0.7%)

Net income attributable to owners of the parent was to €1,917 million in 2012, up 0.7% compared with that of 2011 (€1,904 million) and representing 5.0% of revenue.

Dilutedearnings per share (i.e. after taking stock options into account) amounted to €3.54, a 1.6% increase (€3.48 per share in 2011).

Net income attributable to owners of the parent by business line:

The cost of net financial debt was -€638 million in 2012 (-€647 million in 2011). The Group's policy of converting fixed rate debt to floating rate enabled it to benefit from lower interest rates, and this completely offset the fall in returns from investments and the current higher costs of refinancing.

The average interest rate on long-term financial debt at 31 December 2012 was 3.63% (3.93% at 31 December 2011).

Income tax expense for the year was €969 million in 2012 (€984 million in 2011), resulting in an effective tax rate of 33.3% (33.6% in 2011).

Cash flow from operations (EBITDA)*: €5,418 million (+1.0%)

EBITDA was €5.4 billion (+1%) and represented 14.0% of revenue. VINCI Autoroutes' EBITDA margin improved slightly in 2012 to 69.5% (69.4 % in 2011).

Cash flow from operations by business line:

* Excluding concessions subsidiaries' revenue derived from works (IFRIC 12).

Other cash flows

Changes in operating working capital requirement and current provisions resulted in an outflow of €37 million in 2012 compared with an inflow of €93 million in 2011. This mainly reflects an increase in the working capital requirement of Eurovia's activities in Central and Eastern Europe and draw downs of project advances.

After accounting for interest and taxes paid, along with investments in operating assets, operating cash flow¹ was €3,123 million, similar to the 2011 figure (€3,270 million).

Growth investments in concessions and PPPs totalled €1,140 million in 2012 (€1,135 million in 2011). They included €1,046 million invested by VINCI Autoroutes in France under its master plans and the green motorway package (€1,017 million in 2011).

Free cash flow after investments amounted to €1,983 million (€2,134 million in 2011), including €841 million generated by Concessions and €738 million by Contracting (€766 million and €1,130 million, respectively, in 2011).

Acquisitions, including the net debt of acquired companies and net of disposals, amounted to €700 million in 2012 (€172 million in 2011). They included Carmacks in Canada and NAPC in India, acquired by Eurovia, and GA Gruppe in Germany, acquired by VINCI Energies. They also included the buy-out of non-controlling interests in Entrepose Contracting and the increase in the Group's stake in Geostock from 25% to 90%.

¹ Operating cash flow: cash flow from operations adjusted for changes in operating working capital requirement and current provisions, interest and income tax paid, dividends received from companies accounted for under the equity method and net investments in operating assets.

Dividends paid during the year amounted to €1,057 million (€1,036 million in 2011). VINCI also continued its share buy-back programme, purchasing 17.7 million shares in the market for a total investment of €647 million. Capital increases in 2012 totalled €334 million.

Net financial debt: (€12,527) million

Consolidated net financial debt was €12.5 billion at 31 December 2012 (€12.6 billion at 31 December 2011) down €63 million.

For the Concessions business, including holding companies, net financial debt was €18.1 billion, down more than €800 million relative to 31 December 2011. Contracting, meanwhile, had a net cash surplus of €2.1 billion at year-end (€2.9 billion in 2011), due mainly to 2012 acquisitions.

The ratio of net financial debt to equity was 0.9 at 31 December 2012, in line with the end-2011 figure. Debt-to-EBITDA stood at 2.3 at end-2012, the same as at 31 December 2011.

The Group's liquidity remained very high at €11.5 billion at 31 December 2012. It comprised €5.0 billion of net cash managed and €6.5 billion of unused confirmed credit facilities, including €1.1 billion expiring in 2016 and €5.3 billion in 2017.

With its investment grade credit ratings confirmed by S&P (BBB+) and Moody's (Baa1) with stable outlooks, VINCI carried out several bond issues and placements totalling more than €1.5 billion at an average interest rate of 3.66% at issuance. The Group was thus able to refinance in advance the bank loans arranged for the acquisition of ASF as well as repayments on loans from CNA (Caisse Nationale des Autoroutes). Following these transactions, the average maturity of the Group's long-term debt was 6.1 years at 31 December 2012, and bonds represented 53% of long-term debt (41% at 31 December 2011).

In January 2013, ASF successfully issued €700 million of 10-year bonds expiring in January 2023 paying an annual coupon of 2.875%.

VINCI continued to have good access to bank credit with a five-year syndicated bank facility for €1.8 billion in July 2012 for ASF, replacing a similar facility due to expire in 2013.

Lastly, VINCI finalised several project financing deals for infrastructure under concessions or public-private partnerships for a total of around €350 million. This concerned PFI (Private Finance Initiative) contracts for road maintenance in Hounslow (£88 million, 24.5 years) and the Isle of Wight (£95 million, up to 24.5 years) in the UK, and the Dunkerque Arena (€69 million, more than 27 years) in France.

Parent company results

The parent company generated net income of €256 million in 2012.

Dividend

The Board of Directors has decided to propose to the next Shareholders' General Meeting that the amount of the dividend for 2012 be maintained at €1.77 per share, i.e. 50% of net income.

If approved, given that an interim dividend of €0.55 per share was paid in November 2012, a final dividend of €1.22 euro will be paid in cash on 22 May 2013. It will also be proposed that shareholders may opt to be paid the final dividend in shares. The scrip share price will be based on the average opening share price of the 20 trading days preceding the Shareholders' General Meeting on 16 April 2013 less the amount of the interim dividend. A 5% discount will then be applied to that result.

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Diary

Analysts meeting:08.30 on Wednesday, 6 February2013 at Pavillon Ledoyen, 1 avenue Dutuit, 75008 Paris.

Press conference: 11.00 on Wednesday, 6 February 2013 at Pavillon Ledoyen, 1 avenue Dutuit, 75008 Paris.

This press release is available in French and English on VINCI's website: www.vinci.com.

APPENDIXES

Appendix A: FINANCIAL STATEMENTS