Eiffage S A : 2022 Annual results press release

Vélizy-Villacoublay, 22 February 2023 5.40pm

Press release

2022 annual results

• Significant revenue1 growth
• Increase in operating margin on ordinary activities in Contracting and Concessions and in net profit group share
• Solid financial position:
• • Further increase in free cash flow*
  • Solid cash position in Contracting
  • Higher net financial debt* following major growth investments
• Growth investments:
• • Concessions: increased stake in Getlink, of which Eiffage is now the 1st shareholder; acquisition of Sun'R in renewable energies; opening of the A79 motorway
  • Contracting: 11 acquisitions at Eiffage Énergie Systèmes (France, Switzerland and the Netherlands)
• Commitment to becoming carbon neutral by 2050 and alignment with the 1.5°C trajectory
• Proposed dividend2 of €3.60 per share, an increase of €0.50
• High level of order intake maintained; order book of €18.5 billion, up 14% year-on-year
• Outlook for 2023:
• • Growth in activity and operating profit on ordinary activities in Contracting and Concessions
  • Stake in Getlink equity accounted from the second quarter3

* See glossary

• Excluding IFRIC 12 (see glossary)

• The 2022 dividend will be proposed to the General Meeting of Shareholders of 19 April 2023

• After Eiffage, subject to the vote of the Getlink shareholders' meeting on 27 April 2023, may, as appropriate, join the governance of Getlink

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Key figures

in millions of euros

Revenue1

of which Contracting of which Concessions

Operating profit on ordinary activities

as a % of revenue

Net profit attributable to equity holders of the parent

Net profit attributable to equity holders of the parent per share (in €)

Dividend per share (in €)2

Free cash flow4

Net financial debt4

APRR traffic (all vehicles)

Contracting order book (in € billions)3

		Actual change
2021	2022	2022/2021
18,721	20,319	+8.5%
15,693	16,977	+8.2%
3,028	3,342	+10.4%
1,919	2,212	+15.3%
10.3%	10.9%	/
777	896	+15.3%
7.98	9.46	+18.5%
3.10	3.60	+0.50
1,556	1,743	+€187 million
9,332	10,166	+€834 million
		+8.0%
16.3	18.5	+14%

The Eiffage Board of Directors met today to approve the 2022 annual financial statements5, which will be submitted to the next General Meeting of Shareholders on 19 April 2023.

Business activity

Consolidated revenue amounted to more than €20.3 billion for the year, up 8.5% in actual terms compared with 2021 and 7.3% like-for-like (at constant scope and exchange rates or "lfl"). In the fourth quarter, revenue was up 9.5%.

In Contracting, revenue was close to €17 billion, up by 8.2% (6.7% lfl), driven by the activity of the Group's European entities (+23.3% growth in Europe excluding France).

In the Construction division, revenue grew by 6.4% to €4.36 billion, with a 5.0% increase in France and a 11.1% increase in Europe excluding France. In the property development, 2,481 units were reserved, compared with 4,164 in 2021. The decline resulted from the increasing difficulty of obtaining planning permission in France and higher technical costs. This pushed down the number of properties available for sale and slowed the construction of new homes.

In the Infrastructure division, revenue increased by 6.6% to €7.29 billion. In France, revenue fell by 0.8%, with a 5.9% increase in Roads, a 7.1% decrease in Civil Engineering (with a reduced contribution from Grand Paris Express projects as expected) and a 4.4% decrease in Metal. The division also recorded an increase of 19.6% internationally, thanks to the ramp-up of the HS2 high-speed rail line project in the United Kingdom and the E18 motorway project in Norway, along with good momentum in the transport infrastructure market in Germany.

In the Energy Systems division, revenue grew by 12.0% to €5.32 billion of which +6.8% in France and +22.4% internationally, mainly in Europe, with strong growth in Spain, the Netherlands, Switzerland, Benelux and Germany. Increased M&A activity accounted for 4.1% of revenue growth. Eiffage completed 11 acquisitions in 2022.

• See glossary

• The consolidated financial statements have been audited. The certification report will be issued after the procedures necessary for filing the universal registration document have been completed.

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Concessions revenue totalled €3.34 billion, up 10.4%. Motorway traffic rose across the board to levels higher than those seen in 2019, with increases of 8.0% at APRR, 5.2% on the Millau viaduct, 7.4% on the A65 and 7.3% on the Autoroute de l'Avenir in Senegal. Toll revenue on the A79, which opened on 4 November 2022, amounted to €4.2 million. Airport passenger numbers also rose compared with 2021 (+76.6%), although they remained lower than in 2019 (-25.4%).

Earnings

The Group's operating profit on ordinary activities amounted to €2,212 million, up 15.3% compared with 2021 and equal to 10.9% of revenue versus 10.3% in 2021. Operating margin on ordinary activities is now higher than its pre-Covid level in Contracting and Concessions.

Contracting operating margin was 3.8% compared with 3.7% in 2021. Operating margin was stable at 2.9% in the Infrastructure division but rose to 3.8% in the Construction division (3.7% in 2021) and 5.1% in the Energy Systems division (5.0% in 2021).

In Concessions, operating margin was 47.2% (44.5% in 2021), buoyed by good levels of motorway traffic, although airport passenger numbers remained below pre-pandemic levels. APRR's Ebitda margin was 74% (73.7% in 2021).

The cost of net financial debt was €271 million in 2022, an increase of €25 million relative to 2021.

Income tax expense was €491 million, compared with €445 million in 2021.

Consolidated net profit group share was €896 million (€777 million in 2021) up 15.3%. Earnings per share rose to €9.46 (€7.98 in 2021).

Financial position

Free cash flow was over €1.7 billion, up €187 million versus 2021 (and €476 million higher than in 2019). It was boosted by a further €234 million decrease in the working capital requirement after significant falls in 2020 and 2021 (aggregate €555 million decrease over those two financial years). The free cash flow figure is after development investments in Concessions, which amounted to €678 million and included final construction work on the new A79 motorway, which represented an investment of €221 million during the year.

In 2022, Eiffage invested €1.2 billion on increasing its stake in Getlink to 18.8%. The Group also acquired majority stakes in SNEF Telecom and Sun'R, and its Energy Systems division acquired a further 10 companies. Total investments amounted close to €1.5 billion.

In addition, Eiffage increased the proportion of its own shares held in treasury by 1 percentage point to 3.4%.

Net financial debt - excluding IFRS 16, the fair value of CNA debt and swaps - amounted to €10.2 billion at 31 December 2022, an increase of €0.8 billion over 12 months arising from major growth investments in 2022. The holding company and the Contracting divisions maintained a positive net cash balance, which amounted to €0.6 billion at the end of 2022 (€1.0 billion at the end of 2021).

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Financing

The Group has a strong financial position, both at the level of Eiffage SA (and its Contracting subsidiaries), which have been assigned a short-term credit rating of F2 by Fitch Ratings, and at its Concessions companies, the largest of which is APRR rated A with stable outlook by Fitch and A- with stable outlook by S&P.

At 31 December 2022, Eiffage SA and its Contracting subsidiaries had liquidity of €4.7 billion composed of €2.7 billion in cash and cash equivalents and an undrawn bank credit facility of €2 billion, without financial covenants. Almost all of that facility is due to expire in 2026. Eiffage SA's liquidity was €0.5 billion lower than at 31 December 2021. The decrease was mainly due to the wound down of the Group's trade receivables securitisation programme - which came to an end on 19 December 2022 whereas outstandings under that programme totalled almost €0.5 billion at 31 December 2021 - along with investments during the year.

APRR had liquidity of €3.5 billion at 31 December 2022, consisting of €1.5 billion in cash and cash equivalents and a €2 billion undrawn bank credit facility. Almost all of that facility is due to expire in 2027. At the end of 2022, APRR's liquidity was €0.3 billion higher than at 31 December 2021.

On 23 May 2022, APRR issued €500 million of bonds with a maturity of 2029 and a coupon of 1.875%.

Strengthening the Concessions portfolio

In 2022, there were three key events in the Group:

• On 4 November 2022, concession operator Aliaé opened the new A79 motorway. APRR acquired Aliaé on 30 June 2022 for €0.7 billion.
• In October 2022, Eiffage became Getlink's largest shareholder, increasing its stake to 18.8% for an investment of €1.2 billion.
• In December 2022, Eiffage acquired almost 75% of the Sun'R Group in order to accelerate its move into renewable energies.

Commitments to the ecological transition

In April 2022, Eiffage published its third climate report in accordance with the guidelines of the TCFD (Task Force on Climate-related Financial Disclosures). Through this exercise in transparency, the Group provided all of its stakeholders with information on:

• its formal climate commitments as part of the 1.5°C trajectory,
• its ambition of becoming carbon-neutral by 2050,
• its aim of reducing greenhouse gas emissions by 46% in 2030 compared with 2019 in scopes 1 and 2, and by 30% in scope 3 (upstream and direct downstream).

The Group also made commitments to new initiatives during the year:

• submission for validation of its low carbon approach to the SBTi (Science Based Targets initiative),
• submission of its second biodiversity action plan for 2023-2025 as well as reporting on its current plan 2020-2022 to the French Biodiversity Agency (OFB).

The Group publishes for the first time the share of its turnover aligned with the climate change mitigation target, according to the European green taxonomy, which for 2022 is 16.7% for an eligibility of 45.8%.

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Post-balance sheet events

A new APRR investment plan amounting to almost €410 million came into force on 31 January 2023. In particular, the plan involves investments to encourage car-sharing and public transport, to adopt free- flow for a large proportion of the AREA network and to make a 17km section of the A6 motorway south of Paris part of the APRR network. Investments under the plan will continue until 2029, and the plan gave rise to a change in tariffs.

General Meeting of Shareholders - Dividend and composition of the Board of Directors

Eiffage SA's net profit amounted to €851 million.

A proposal will be made to the General Meeting of Shareholders of 19 April 2023 to pay a dividend of €3.60 per share (€3.10 per share in 2022). The dividend will be paid on 17 May 2023 (ex date: 15 May 2023) in respect of the 98 million shares in issue on 22 February 2023 and those that will be created following the capital increase reserved for employees, decided by the Board of Directors in today's meeting.

The combined General Meeting will be held at 10am on 19 April 2023 in Salle Wagram, 39-41 avenue de Wagram, 75017 Paris.

On 7 December 2022, the Board of Directors decided to make the following changes in its composition, based on recommendations made by its Appointments and Compensation Committee:

• Appointment of Philippe Vidal, independent director since 1 January 2021, as Senior Director.
• Reduction in the size of Eiffage SA's Board of Directors from 12 to 11 members after the resignation, effective 31 December 2022, of Dominique Marcel, who had been a director since 2008 and became a non-independent director in 2020.

After these changes, Eiffage SA's Board of Directors has 11 members, 75% of whom are independent and 44.4% of whom are women. All committee chairmen and the Senior Director are independent. The remit and organisation of the Board of Directors are detailed in its internal rules, which are available on the Eiffage website.

A proposal will be made to shareholders in the 19 April 2023 General Meeting to renew Benoît de Ruffray and Isabelle Salaün's terms of office as directors, and to renew Laurent Dupont's term of office as director representing employee-shareholders, for a term of four years in each case. The director appointments and renewals of directors' terms of office put to the General Meeting have been approved by the Board of Directors following proposals by the Appointments and Compensation Committee, in accordance with the applicable provisions of the articles of association.

If the renewal proposals are accepted by the General Meeting, 75% of Board members will be independent (unchanged) and 50% will be women (44.4% currently) based on the new method for calculating gender balance, which will exclude the director representing employee-shareholders.

Executive compensation

In accordance with Afep-Medef recommendations, information on the compensation of Eiffage's Chairman and CEO (in accordance with ex-post and ex-ante "say on pay" provisions) will be published on the website www.eiffage.com.

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