PRESS RELEASE

Wednesday 20 May 2020 - 7h00 CET

regulated information

Quarterly information at 31 March 2020

Wednesday 20 May 2020 - 7h00 CET regulated information

Quarterly information at 31 March 2020

  • Major impact of the public health crisis on revenue, cash flow and results of DEME and CFE Contracting in 2020
  • Sale of stake in Merkur Offshore closed
  • Order to start the construction of the Fehmarnbelt link on 1 January 2021

1. Key figures

Revenue

31/03/2020

31/03/2019

Variation

In million €

Dredging, Environment,

534.9

613.8

-12.9%

Offshore and Infra

Contracting

221.1

226.0

-2.2%

Other divisions and

4.9

-1.4

n.s.

eliminations

Total

760.9

838.4

-9.2%

Order book

31/03/2020

31/12/2019

Variation

In million €

Dredging, Environment,

3,415.0

3,750.0

-8.9%

Offshore and Infra

Contracting

1,271.4

1,385.5

-8.2%

Other divisions

44.7

47.4

-5,7%

Total

4,731.1

5,182.9

-8.7%

Net financial debt

31/03/2020

31/12/2019

Variation

In million €

Dredging, Environment,

730.3

708.5

+3.1%

Offshore and Infra

Other divisions & Holding

120.1

89.6

+34.0%

Total

850.4

798.1

+6.6%

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2. Analysis by division

Dredging, Environmental, Offshore and Infra division

KEY FIGURES

In million €

31/03/2020

31/12/2019

31/03/2019

Revenue

534.9

2,622.0

613.8

Net financial debt

730.3

708.5

681.3

Order book

3,415.0

3,750.0

3,930.0

REVENUE

DEME's revenue in the first quarter of 2020 amounted to € 534.9 million, down 12.9% on the first quarter of 2019, due to the first effects of the COVID-19 pandemic.

45% of the revenue was realized by the Dredging segment, of which approximately a third relates to maintenance dredging contracts. Several important projects continued, such as the deepening of the Elbe in Germany and the dredging works of the Scheldt and the Belgian coast. The widening works to improve the access channel to the seaport of Swinoujscie (Poland) has started successfully. In India and Africa, construction site activity continues despite logistical problems.

The offshore segment contributed 38% to the revenue in the first quarter of 2020. Unlike in the first quarter of 2019, the share of procurement was relatively small. DEME Offshore was active in the Netherlands (offshore wind farm Borssele 1 and 2) and in the United Kingdom (offshore wind farms Moray East and East Anglia One, of which the 102 wind turbines of 7 MW were successfully installed).

The Infra segment realizes an increase in revenue compared to the first quarter of 2019. Work on the three major civil engineering projects in the Netherlands (RijnlandRoute, Terneuzen lock and the Blankenburg connection) continued despite the public health crisis.

ORDER BOOK

The order book amounted to € 3.4 billion, compared to € 3.75 billion at 31 December 2019.

Several major dredging projects completed in the second quarter in Russia and Africa are not yet included in this order book at the end of March. In addition, the Danish government issued the 'notice to proceed' in May for the construction of the major Fehmarnbelt project on 1 January 2021. This project, worth EUR 700 million for DEME, concerns the design and construction of the world's longest road and rail tunnel between Denmark and Germany. This contract will also be included in the order book in the second quarter.

NET FINANCIAL DEBT

The net financial debt increased slightly to € 730.3 million at 31 March 2020. DEME expects to reduce its debt by the end of 2020, however.

The cash position remains very strong: € 481.5 million, of which more than € 400 million is managed centrally.

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INVESTMENTS

Investments in the first quarter amounted to € 69.2 million.

On 30 April 2020, DEME and its partner CSBC signed a preliminary agreement for the construction of a vessel for the installation of offshore wind turbines in Taiwan. The vessel, Green Jade, will be built by CSBC and is scheduled for delivery in 2022. It will be 216.5 metres long and will be fitted with a crane with a lifting capacity of 4,000 tonnes. It will have DP3 technology and be able to accommodate a crew of 160.

ROYAL IHC

A consortium of industrial investors entered into an agreement in principle with the banking syndicate for the acquisition and recapitalization of the Royal IHC shipyard. This operation, which has the support of the Dutch government, should enable the Royal IHC shipyard to finish the construction of five vessels ordered by DEME, including the mega cutter 'Spartacus', which is due for delivery in the fourth quarter of 2020.

ORION 1

A serious accident happened on 2 May 2020 on board of the offshore installation vessel 'Orion 1' during crane load tests in Rostock, Germany. The crane suffered considerable damage, putting the vessel out of service for several months.

In view of the investigation being carried out by the German judicial authorities, DEME does not wish to comment at this stage on the cause of the accident.

The 'Orion 1' is owned by COSCO (QIDONG) OFFSHORE and was due for delivery in the second half of May. Its first assignment was the installation of the foundations (jackets) of the Scottish offshore wind farm Moray East in the United Kingdom. The vessel was then to install the foundations of the Hornsea 2 offshore wind farm.

This accident obliges DEME to review the allocation of its fleet and to rent vessels from third-party providers. As a result of the fall in oil prices, these are available on the market at competitive prices.

COVID 19

Save in a few exceptions, DEME's projects have not been suspended, although in most cases productivity is reduced.

The pandemic primarily affects the group in two respects:

  • postponement of projects in the tendering stage, particularly in the Middle East, Africa and Asia;
  • the difficulty of ensuring crew changes due to border closures and the drastic reduction, even suspension, of air travel.

DEME endeavours to ensure the health and safety of its employees and to reduce as much as possible the impact of the public health crisis on its activities by initiating cost-cutting measures and by developing innovative initiatives such as chartering a hotel ship where crews can spend two weeks in pre-quarantine.

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OIL & GAS

The very low oil prices, if they persist, are also expected to affect the activities of DEME as it anticipates fewer calls for tenders for projects directly or indirectly linked to oil and gas or launched by countries that are dependent on oil revenues.

MERKUR

On 12 May 2020, DEME Concessions closed the sale of its 12.5% stake in Merkur Offshore GmbH, which operates a German offshore wind farm with a capacity of 396 MW. This transaction generates a capital gain of € 62 million for DEME.

OUTLOOK 2020

In view of the consequences of the public health crisis, DEME expects a decrease in revenue in 2020. The net result should however be positive.

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Contracting division

KEY FIGURES

In million €

31/03/2020

31/12/2019

31/03/2019

Revenue

221.1

998.7

226.0

Order book

1,271.4

1,385.5

1,352.9

REVENUE

Revenue for CFE Contracting in the first quarter of 2020 amounted to € 221.1 million, which is very slightly down on the first quarter of 2019. The pandemic had a relatively limited impact on business in the first quarter; the effects will be far more noticeable from the beginning of April 2020.

The situation differs from one segment to the next: the Multitechnics and Rail & Utilities clusters reported a growth in activity, as did the construction companies based in Flanders and Poland. Conversely, there was a very marked decline in revenue for the entities active in Brussels and Wallonia.

ORDER BOOK

The order book came to € 1.27 billion at 31 March 2020, down 8.2% compared to 31 December 2019.

Order intake was low in Construction, whereas the order book increased by 1% and 7.5% for Multitechnics and Rail & Utilities respectively.

COVID-19

In Poland, the impact of the pandemic is limited, with activity being maintained at a near-normal level. In Belgium and Luxembourg, on the other hand, virtually all projects were suspended from 18 March. Activity is gradually being resumed in Luxembourg from 20 April and in Belgium from 27 April.

This resumption takes place in strict compliance with the measures that are taken to protect the health of the employees and that of the customers and subcontractors. Those measures have a major impact on productivity at most sites. Certain projects are also affected by disruptions in the supply chains.

OUTLOOK 2020

In view of the impact of the pandemic, CFE Contracting will report in 2020 a decrease in revenue compared to 2019. The net result should be close to break-even.

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Real Estate division

In Belgium and Luxembourg, take-up rates of projects in progress were satisfactory at the beginning of the year. Since mid-March, sales have virtually come to a halt as a result of the lockdown and the interruption of projects. In Poland, however, sales continued, albeit at a slightly slower pace. Of the 726 housing units that will be delivered in 2020, more than 85% have been pre-sold.

During the first quarter of 2020, BPI acquired two new building plots:

  • the former head office of Allianz in the center of Brussels. BPI will, in joint venture, redevelop the site into amixed-use project with housing, offices, shops, a four-star hotel and student accommodation (40,000 m² in total). Planning permission is expected by the end of 2020; work should start at the beginning of 2021, and is due for completion in 2024;
  • a building comprising factory premises and office space, fully let and situated in Bertrange, one of the mostsought-after residential areas of Luxembourg. BPI eventually plans to demolish the building for the construction of 14 housing units.

In view of those two acquisitions, the division's net financial debt increased by 20% to € 80 million at 31 March 2020.

OUTLOOK 2020

Despite the effects of the pandemic on sales of real estate projects, BPI maintains its objective of a net result in 2020 close to that of 2019.

Financial position of the CFE Group

As of 31 March 2020, the CFE Group had a total cash position of € 586 million. To this amount must be added unused confirmed credit lines totaling just under € 200 million.

3. Corporate governance

The ordinary general meeting of 7 May 2020 renewed the directors' mandates of Christian Labeyrie,

Philippe Delusinne and Pas de Mots SRL, represented by Leen Geirnaerdt, for a period of four years, ending after the general meeting of May 2024.

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regulated information

4. Shareholders' agenda

Publication of half-year financial statements

28 August 2020(before opening of the stock market)

Publication of interim statements

23 November 2020(before opening of the stock market)

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About CFE

CFE, founded in 1880 is a Belgian industrial group active in three different divisions. The first, Dredging, Environment, Offshore and Infra, is carried out by its wholly owned subsidiary DEME, one of the world leaders in the field. DEME has a modern fleet of multipurpose vessels equipped with the latest technologies.

The second, Contracting, encompasses the group's construction, multitechnics and rail activities in Belgium, Luxembourg and Poland. The third, Real Estate Development, covers the real estate projects developed by BPI in Belgium, Luxembourg and Poland.

The CFE group currently employs more than 8,000 people and is active on every continent. CFE is listed on Euronext Brussels and is 60,96% owned by Ackermans & van Haaren.

This press release is available on our website at www.cfe.be.

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Note to editors:

For further information, please contact:

  • Piet Dejonghe, Chief Executive Officer, tel. +32.2.661.13.19, piet_dejonghe@cfe.be
  • Fabien De Jonge, Chief Financial Officer, tel. +32 2 661 13 12, fabien_de_jonge@cfe.be

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CFE - Compagnie d'Entreprises SA published this content on 20 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 May 2020 07:33:09 UTC