First-half 2017 results

A solid performance, led by business growth

  • Operating profit from continuing operations before non-recurring items (EBITA)([1]) up 36.4% to €12.0 million
  • EBITA margin from continuing operations up 130 bps to 5.9%
  • Profit for the period: €21.8 million([2])

Paris, 11 September 2017, 5.35 p.m. (CEST) - At its meeting on 7 September 2017, the Board of Directors of Assystem S.A. (ISIN: FR0000074148 - ASY), an international engineering group, reviewed the Group's financial statements for the first half of 2017 (i.e. the six months ended 30 June 2017).

On 11 May 2017, Assystem announced that it had entered into an agreement with Ardian to transfer its outsourced R&D division - Global Product Solutions (GPS) - to a company that will be 60%-owned by Ardian and 40%-owned by Assystem.

In accordance with IFRS 5, as the agreement provides for Ardian to take over control of GPS, this business has been classified by Assystem as held for sale for the full six months of first-half 2017. The financial statements for the first half of 2016 have been restated in order to facilitate year-on-year comparisons.

The full amount of GPS's profit has been recorded under "Profit from discontinued operations" in Assystem's consolidated financial statements for the six-month period from 1 January 2017 to 30 June 2017.

When the control of GPS is transferred it will be renamed Assystem Technologies Groupe and as from that date it will be accounted for by the equity method in Assystem's consolidated financial statements based on Assystem's ownership interest in Assystem Technologies Groupe.

In millions of euros   H1 2016* H1 2017 Year-on-year change
Revenue from continuing operations 191.0 204.5 + 7.1%
Operating profit from continuing operations before non-recurring items (EBITA)  8.8 12.0 + 36.4%
% of revenue 4.6% 5.9% + 130 bps
Consolidated profit for the period([3]) 16.0 21.8 + 36.2%

* Restated to facilitate year-on-year comparisons.


AnalysIS OF THE FIRST-HALF 2017 INCOME STATEMENT

  • Revenue from continuing operations

Assystem's consolidated revenue from continuing operations rose by 7.1% in the first half of 2017 (11.5% excluding the impact of the Staffing business).

Revenue for the Energy & Infrastructure business climbed 11.9% to €175.5 million, with both of its segments (Nuclear and Energy Transition & Infrastructures) delivering strong growth.

At €24.3 million, revenue reported by the Staffing business was down 17.5% year on year, reflecting the persistently difficult market conditions in the Oil & Gas sector.

  • Operating profit from continuing operations before non-recurring items (EBITA)

Consolidated EBITA from continuing operations surged 36.4% in the first six months of 2017 to €12.0 million from €8.8 million in first-half 2016, and the corresponding margin represented 5.9% of revenue, up 130 basis points.

Energy & Infrastructure EBITA advanced by €4.0 million to €13.9 million, representing an EBITA margin of 7.9%, up 160 basis points on the first six months of 2016.

Staffing EBITA decreased by €0.5 million to €0.6 million and its EBITA margin came at 2.5%, in line with budget.

  • Revenue and EBITA from discontinued operations

In the first half of 2017, revenue generated by Global Product Solutions (which, in accordance with IFRS 5, is no longer fully consolidated by Assystem) rose 13.7% to €332.6 million.

Global Product Solutions' EBITA increased by €5.3 million to €24.1 million, representing an EBITA margin of 7.2% compared with 6.4% in the six months ended 30 June 2016. Both the Aerospace and Automotive sectors saw a robust increase in their EBITA and EBITA margin figures.

  • Operating profit and consolidated profit for the period

After including the net non-recurring income for the period, consolidated operating profit from continuing operations came to €12.1 million, up 68.1% on the €7.2 million reported for first-half 2016.

Taking into account €1.8 million in net financial expense, a €4.1 million income tax expense and €15.6 million in profit from discontinued operations (GPS), consolidated profit for the period amounted to €21.8 million, of which €6.2 million was generated by continuing operations.

Based on the Group's future configuration, profit for first-half 2017 is estimated to represent €12.5 million([4]).

NET DEBT

Net debt recorded in the Group's consolidated statement of financial position amounted to €77.6 million at 30 June 2017. Out of this total, €50.1 million related to continuing operations, after deducting the €27.5 million in current account advances payable by GPS to entities classified as continuing operations.

GPS's net debt totalled €16.3 million, comprising the above-mentioned €27.5 million in current account advances less €11.2 million in external net cash. It is planned that this €16.3 million in net debt (which mainly corresponds to cash payments made by GPS for acquisitions in the first half of 2017) will be transferred to Assystem Technologies Groupe when the control of GPS is transferred to Ardian.

TIMELINE OF THE TRANSACTIONS ANNOUNCED IN MAY 2017

On 11 May 2017 Assystem announced that it was planning to carry out the following transactions:

  • The transfer of its GPS division to an acquisition entity controlled on a 60% basis by Ardian and 40% by Assystem (the "GPS Transaction") for a total of €550 million, representing net cash proceeds of an estimated €400 million for the Group (after deducting tax and other costs incurred in connection with the transaction and amounts reinvested in the acquisition entity).
  • A share buyback offer, subsequent to the GPS Transaction, representing at least €200 million and involving a minimum of 25% of Assystem's outstanding shares.  
  • The purchase of a 5% stake in New Areva NP for €125 million (the "New NP Investment").  

The main conditions precedent for completing the GPS Transaction have now been met and the provisional completion date is 28 September 2017. The net cash proceeds for the Group from the deal are still estimated at €400 million. The subsequent share buyback offer should be launched, as previously announced, in the fourth quarter of 2017 (subject to the AMF's approval of the note d 'information).

Concerning the New NP Investment, an agreement has been signed early July 2017 between EDF, Areva and Assystem, the terms and conditions of which are in accordance with the 11 May announcement. The provisional completion date for the transaction is still end-2017.

OUTLOOK FOR full-YEAR 2017

Assystem's full-year 2017 targets for its new scope of consolidation are to achieve the following:

  • organic revenue growth of around 10% at constant exchange rates for the Energy & Infrastructure business;
  • revenue of c. €50 million for the Staffing business;
  • a significant increase in EBITA margin;
  • net cash of around €60 million at 31 December 2017([5]).

           
The targets for GPS are to achieve:

  • organic growth of more than 10% at constant exchange rates;
  • a significant increase in EBITA margin.

           

2017 FINANCIAL CALENDAR

  • 9 November: Press release for third-quarter 2017 revenue.

Assystem is an international engineering group. As a key participant in the industry for 50 years, the Group supports its clients in managing their capital expenditure throughout the product life cycle. Assystem S.A. is listed on Euronext Paris.
For more information please visit www.assystem.com
Follow Assystem on Twitter: @Assystem

CONTACTS

Philippe Chevallier
CFO & Deputy CEO
Tel.: +33 (0)1 55 65 03 10 		Agnès Villeret
Investor Relations - Komodo
agnes.villeret@agence-komodo.com
Tel.: +33 (0)6 83 28 04 15

 

APPENDICES

1/ Revenue and EBITA by division

  • Revenue
In millions of euros H1 2016(1) H1 2017 Total year-on-year change Like-for-like change(2)
Group 191.0 204.5 +7.1% +5.2%
Energy & Infrastructure 156.8 175.5 +11.9% +9.2%
Staffing 29.4 24.3 -17.5% -17.5%
Other 4.8 4.7 - -
  1. Restated to facilitate year-on-year comparisons.
  2. Based on a comparable scope of consolidation and constant exchange rates.

      

      

  • EBITA(1)
In millions of euros H1 2016 % of revenue H1 2017 % of revenue
Group 8.8 4.6% 12.0 5.9%
Energy & Infrastructure 9.9 6.3% 13.9 7.9%
Staffing 1.1 3.7%   0.6 2.5%
Holding company and Other (2.2) - (2.5) -
  1. Operating profit before non-recurring items (EBITA) including share of profit of equity-accounted investees (€0.5 million in first-half 2016 and €0.2 million in first-half 2017).

2/ Consolidated financial statements

  • Consolidated statement of financial position
In millions of euros

 		  31 Dec. 2016* 30 June 2017
Assets    
Goodwill 184.8 68.7
Intangible assets 3.6 0.9
Property, plant and equipment 17.9 6.5
Investment property 1.4 1.4
Equity-accounted investees 0.9 0.7
Available-for-sale financial assets 0.2 0.1
Other non-current financial assets 13.7 3.7
Deferred tax assets 17.0 9.3
Non-current assets 239.5 91.3
Trade receivables 320.1 143.5
Other receivables 70.9 45.8
Income tax receivable 1.5 1.7
Other current assets 0.3 0.7
Cash and cash equivalents 85.4 30.4
  478.2 222.1
Assets held for sale - 401.0
Current assets 478.2 623.1
     
TOTAL ASSETS 717.7 714.4

Equity and liabilities 31 Dec. 2016 30 June 2017
     
Share capital 22.2 22.2
Share premium 80.3 80.3
Consolidated reserves 106.7 112.3
Profit for the period attributable to owners of the parent 31.5 21.4
Equity attributable to owners of the parent 240.7 236.2
Non-controlling interests 0.3 0.1
Total equity 241.0 236.3
Long-term debt and non-current financial liabilities 4.4 107.3
Pension and other employee benefit obligations 26.4 11.6
Liabilities related to share acquisitions 14.1 9.2
Long-term provisions 7.6 7.6
Other non-current liabilities 5.9 3.8
Non-current liabilities 58.4 139.5
Short-term bond debt 14.4 -
Other short-term debt and current financial liabilities 82.7 1.1
Trade payables 66.4 21.7
Due to suppliers of non-current assets 1.5 0.1
Accrued taxes and payroll costs 186.7 73.2
Income tax liabilities 3.8 1.0
Liabilities related to share acquisitions 4.4 -
Short-term provisions 7.2 2.9
Other current liabilities 51.2 15.6
  418.3 115.6
Liabilities associated with assets held for sale - 223.0
Current liabilities 418.3 338.6
     
TOTAL EQUITY AND LIABILITIES 717.7 714.4

* Restated to facilitate year-on-year comparisons.

  • Consolidated income statement
In millions of euros H1 2016* H1 2017
     
Revenue 191.0 204.5
Payroll costs (136.6) (142.2)
Other operating income and expenses (44.5) (49.5)
Taxes other than on income (0.4) (0.5)
Depreciation, amortisation and provisions for recurring operating items, net (1.2) (0.5)
     
Operating profit before non-recurring items (EBITA) 8.3 11.8
Share of profit of equity-accounted investees 0.5 0.2
     
EBITA including share of profit of equity-accounted investees 8.8 12.0
Non-recurring income and expenses (1.6) 0.1
     
Operating profit 7.2 12.1
Net financial income (expense) on cash and debt (0.9) (1.0)
Change in fair value of the derivative embedded in Ornane bonds (2.2) -
Other financial income and expenses (1.0) (0.8)
     
Profit from continuing operations before tax 3.1 10.3
     
Income tax expense (0.5) (4.1)
     
Profit from continuing operations 2.6 6.2
     
Profit from discontinued operations 13.4 15.6
     
Consolidated profit for the period 16.0 21.8
Attributable to:    
Owners of the parent 15.7 21.4
Non-controlling interests 0.3 0.4
     
* Restated to facilitate year-on-year comparisons.

  		   
  • Consolidated statement of cash flows
In millions of euros H1 2016

 		 H1 2017

 
     
CASH FLOWS FROM OPERATING ACTIVITIES    
EBITDA 31.6 38.6
     
Change in operating working capital requirement (24.9) (29.3)
     
Income tax paid (6.5) (8.6)
     
Other movements (3.4) (3.3)
     
Net cash used in operating activities (3.2) (2.6)
O/w related to discontinued operations (6.5) (4.0)
     
CASH FLOWS FROM INVESTING ACTIVITIES    
     
Acquisitions of property, plant and equipment and intangible assets, net of disposals (3.6) (6.3)
Acquisitions of shares in consolidated companies, net of sales (10.1) (18.9)
     
Net cash used in investing activities (13.7) (25.2)
O/w related to discontinued operations (3.2) (22.4)
     
CASH FLOWS FROM FINANCING ACTIVITIES    
     
Net financial income received (expenses paid) (1.1) (1.7)
Proceeds from new borrowings - 103.4
Repayments of borrowings and movements in other financial liabilities (17.8) (94.5)
Dividends paid(1) (17.9) (22.9)
Other movements in equity of the parent company (9.4) 0.1
     
Net cash used in financing activities (46.2) (15.6)
O/w related to discontinued operations (5.0) (50.4)
     
Net decrease in cash and cash equivalents (63.1) (43.4)
O/w related to discontinued operations (14.7) (76.8)
Net cash and cash equivalents at beginning of period 233.4 84.4
Effect of non-monetary items and changes in exchange rates (0.6) 0.4
     
Net decrease in cash and cash equivalents (63.1) (43.4)
Net cash and cash equivalents at period-end 169.7 41.4

 (1) Including €21.2 million in first-half 2017 and €17.0 million in first-half 2016 paid to shareholders of Assystem SA.

4/ Information about the Company's capital

Number of shares At 31 Dec. 2016 At 31 Aug. 2017
Number of ordinary shares outstanding 22,218,216 22,218,216
Number of treasury shares 1,068,442 1,060,724
Number of free shares and performance shares outstanding 313,300 247,300
Weighted average number of shares outstanding 21,258,072 21,153,633
Weighted average number of diluted shares 21,571,372 21,400,933

   Ownership structure at 31 August 2017

 

%		 Shares Voting rights
HDL Development(1) 60.66%   77.16%
Free float(2) 34.57% 22.84%
Treasury shares 4.77% -

 (1) HDL Development is a holding company controlled by Dominique Louis (Assystem's Chairman and Chief Executive Officer), notably through HDL, which itself holds 0.23% of Assystem's capital.
(2) Including 0.23% held by HDL.




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Source: ASSYSTEM via Globenewswire