Getlink Se · EURONEXT:GET
Getlink — Groupe Eurotunnel — H1 2016 Earnings Presentation
46 slides from Getlink's earnings presentation, Jul 20, 2016
Slide 1: 2016 half-year results of the Eurotunnel Group
2016 half-year results of the Eurotunnel Group 20 July 2016 Jacques Gounon – Chairman & Chief Executive Officer
Slide 2: Agenda
1. EUROTUNNEL GROUP Key fact & figures and CSR in H1 2016 2. RAIL FREIGHT ACTIVITY Europorte 3. FIXED LINK CONCESSION ACTIVITY Eurotunnel 4. OTHER GROUP ACTIVITIES ElecLink, CIFFCO 5. H1 2016 FINANCIAL RESULTS Eurotunnel Group 6. DEVELOPMENTS AND OUTLOOK Eurotunnel Group
Slide 3: Eurotunnel Group: Key facts & figures and CSR in H1 2016
1 EUROTUNNEL GROUP Key facts & figures and CSR in H1 2016
Slide 4: Key facts and figures in H1 2016
GROUPE EUROTUNNEL SE Key facts and figures in H1 2016 Truck Shuttle Growth in revenue +2% Net profit traffic: +10% to €582M, increased to Car traffic in EBITDA +4% €60M** stable to €249M* * Excluding discontinued activity and recalculated at H1 2016 exchange rate: £1 = €1,273 4 ** Including a €22M o
Slide 5: A particular geopolitical context
EUROTUNNEL GROUP A particular geopolitical context Brexit A business model based on solid and sustainable UK/FR flows of goods and people A stable legal framework, independent of European Union agreements The United Kingdom already outside the Schengen area (immigration) No impact: Treaty of
Slide 6: A 100% privately-owned European Group
GROUPE EUROTUNNEL SE A 100% privately-owned European Group GET shares listed on the NYSE Euronext Paris and London Market capitalisation at 19 July 2016: €5.4Bn Share performance since 01/01/2014: +27% Financial market volatility resulting from the UK referendum Concessionaire of the cross-Cha
Slide 7: Further ethical and social progress
CSR OF EUROTUNNEL GROUP IN H1 2016 Further ethical and social progress Publications Document of compliance with the duty of care against illegal work (May) Chapitre 17 of the 2015 Registration Document and Group’s CSR report (March) Social: 4,000 employees in UK/FR 124 young people in apprenti
Slide 8: Further environmental and societal progress
CSR OF EUROTUNNEL GROUP IN H1 2016 Further environmental and societal progress Environment Replacement and entry into service of the 1st refrigeration unit of the Tunnel cooling plant in Sangatte in May: HFO organic gas and 40% saving in electricity Replacement of Halon gas by Novec 1230 (fire p
Slide 9: Rail Freight Activity: Europorte in H1 2016
3 RAIL FREIGHT ACTIVITY Europorte in H1 2016
Slide 10: No.1 private rail freight operator in UK/FR
EUROPORTE: RAIL FREIGHT No.1 private rail freight operator in UK/FR Architect of railway and logistics solutions Succesful renegotiation of labour agreements in France in line with the new Collective Agreement (2014 railway reform) A sustainable business model Europorte’s activity in France in H1 20
Slide 11: Diversification and organic growth of GB Railfreight in the UK
EUROPORTE: RAIL FREIGHT Diversification and organic growth of GB Railfreight in the UK Start of new activities Traction of the luxury Belmont Royal Scotsman in Scotland (5-year contract) Transport of biomass for Drax New services and contract extensions in the infrastructure, intermodal and bulk
Slide 12: A business and social success
EUROPORTE AND ITS SUBSIDIARIES A business and social success In €M H1 2016 Change H1 2015* Revenue 139 -4% 146 Operating costs -129 -5% -136 Operating margin (EBITDA) 10 = 10 Revenue Operating costs Investment New contracts started in 2015 and In line with the temporary reduction In Class 66 and 73
Slide 13: Fixed Link Concession Activity: Eurotunnel in H1 2016
3 FIXED LINK CONCESSION ACTIVITY Eurotunnel in H1 2016
Slide 14: Migrant pressure: efficiency of the multi-year plan
FIXED LINK Migrant pressure: efficiency of the multi-year plan Humanity, protection against risks but firmness Significant reinforcement of security measures on the Coquelles terminal in 2015 Full support of governments Visits in August 2015 by the Home Secretaries, Theresa May and Bernard Cazeneu
Slide 15: An all-time traffic record and yield up
TRUCK SHUTTLES – H1 2016 An all-time traffic record and yield up A fast, frequent and flexible +10% Eurotunnel Freight service +3% +8% Activity Cross-Channel market and Yield Eurotunnel market share 829,606 trucks transported Steady increase 8 months of record traffic Steady growth in Short Straits
Slide 16: Best 1st half-year traffic for 15 years
LE SHUTTLE FOR PASSENGERS – S1 2016 Best 1st half-year traffic for 15 years A fast, reliable, easy and comfortable service with Le Shuttle = +4 % +5 % Activity Cross-Channel car market* Yield et ventes and Eurotunnel market share* 1,162,740 cars transported Continued growth in average yield 28,036 c
Slide 17: 3rd best 1st half-year traffic since 1994
HIGH-SPEED PASSENGER TRAINS* EUROSTAR – H1 2016 3rd best 1st half-year traffic since 1994 Activity Almost 5 million passengers transported Additional traffic generated by Euro 2016 football tournament 10 first new e320 trains in commercial service +2% +2% -3% at end of June Success of the direct Lon
Slide 18: Traffic transferred to other commercial routes
CROSS-CHANNEL RAIL FREIGHT – H1 2016 Traffic transfered to other commercial routes ActivitésActivity Still impacted by the migrant crisis in H2 2015 and difficulties to secure the SNCF Calais-Fréthun site Traffic transfered to other commercial routes +15% +4% -43% Relaunch of traffic Calais-Fréthun
Slide 19: Steady growth in revenue
FIXED LINK CONCESSION Steady growth in revenue In €M H1 2016 Change H1 2015* Revenue 443 +4% 424 Other Operating costs -204 +5% -194 2% revenue Operating margin (EBITDA) 239 +4% 230 Railway Network +€25M increase in Shuttle Service revenue 33% 65% Excellent revenue progress; the segment represents 7
Slide 20: No.1 operator on the Short Straits
EUROTUNNEL IN H1 2016 N0.1 operator on the Short Straits 145,000 trucks 15,000 passenger 121,000 Pets 62,000 trains transported in vehicles onboard through the March 2016, transported Le Shuttle Tunnel, of which an all-time on 25 March in H1 2016 52,000 Eurotunnel monthly record in both directions (
Slide 21: Other Group Activities: ElecLink, CIFFCO
4 OTHER GROUP ACTIVITIES ElecLink, CIFFCO
Slide 22: ElecLink, a FR-UK electricity interconnector
DEVELOPMENT OF STRATEGIC INFRASTRUCTURE ELECLINK, a FR-UK electricity interconnector Added-value for the Channel Tunnel: a €500M investment and creating employment Regulatory process completed Signature of a conditional agreement for the purchase by the Eurotunnel Group of Star Capital Partners’ 51%
Slide 23: CIFFCO, No.1 private railway training centre in FR/UK
DEVELOPMENT, TRAINING AND EXPERTISE CIFFCO, No.1 private railway training centre in FR/UK Strengthening of the railway sector to support recruitments and training Success of the 1st Training of ground Investiment in Training agents for high- MOOC for railway jobs staff and train drivers a driving si
Slide 24: H1 2016 Financial Results: Eurotunnel Group
5 H1 2016 FINANCIAL RESULTS Eurotunnel Group 24
Slide 25: 13th consecutive half-year growth in revenue
GROUP REVENUE (in €M) 13th consecutive half-year growth in revenue 570 582 529 +2% Europorte +8% -4% Fixed Link +4% 25 * Restated for IFRS 5 (excl. MyFerryLink) and recalculated at H1 2016 exchange rate: £1 = €1.273
Slide 26: Controlled and in line with the activity
GROUP OPERATING COSTS (in €M) Controled and in line with the activity 330 333 300 +1% +10% Europorte -5% Europorte +10% FIXED Link Liaison Fixe +5% +7% Europorte Fixed Link Decrease in costs, in line with the Impact of increased activity on maintenance, staff and other H1 2016 activity operational c
Slide 27: Continuous improvement in the operating margin
GROUP EBITDA (in €M) Continuous improvement in the operating margin: +€9M vs H1 2015 249 240 229 +4% Europorte +5% = Fixed Link +€9M 27 * Restated for IFRS 5 (excl. MyFerryLink) and recalculated at H1 2016 exchange rate: £1 = €1.273
Slide 28: An operating profit up by €5M
GROUP EBIT (in €M) An operating profit up by €5M 168 147 163 +3% Europorte +11% -€2M Fixed Link +€7M 28 * Restated for IFRS 5 (excl. MyFerryLink) and recalculated at H1 2016 exchange rate: £1 = €1.273
Slide 29: To support growth in activity and secure the future
CAPEX* (in €M) To support growth in activity and secure the future 56 38 45 Europorte Liaison Fixe Europorte Fixed Link Purchase of new locomotives for Terminal 2015, 3 new Truck Shuttles, GB Railfreight in the UK, partially rerailing in Tunnel, GSM-R refinanced in H1 2016 29 * At historical exchang
Slide 30: Invest to secure and manage 2 million trucks in 2020
FIXED LINK Invest to secure and manage 2 million trucks in 2020 New Truck Shuttle terminals: €30M Coquelles: October 2015 Folkestone: February 2016 150-truck secure buffer storage area 5 new access lanes Doubling of control lanes New 5 check-in booth plaza 2 new check-in lanes Check-in control build
Slide 31: Invest to increase capacity and performance
FIXED LINK Invest to increase capacity and performance 3 new WBN Truck Shuttles: €60M To enable up to 8 Truck Shuttle departures per hour and per direction during peak traffic periods Delivery of the 1st wagon on 15 April 2016 1st new Shuttle to enter commercial service Finishing work, fitting of on
Slide 32: Invest to modernise and secure the systems
FIXED LINK Invest to modernise and secure the systems New GSM-R system, the European standard in railway telecommunications: €48M over 7 years High-security private cellular network Track-to-train cellular network Communications between technicians and To be operational during the summer of 2016 wit
Slide 33: Investment grade rating
NET FINANCE COSTS (in €M) Investment grade rating 138 131 Nominal value of the debt: 129 €3.6Bn* at 30/06/2016 -6% +1% Debt repayment-X in M€ H1 2016: €19M Total reduction of the Term Loan since 2008: €299M* Liaison Fixe Very long-term maturity Simplification of the debt structure at end of 2015 * A
Slide 34: A €29M increase in profit
GROUP CONSOLIDATED NET RESULT (in €M) A €29M increase in profit 60 (including a net income linked to the lease of 31 +€29M the ferries with a put option) -12 +€43M 34 * Recalculated at H1 2016 exchange rate: £1 = €1.273
Slide 35: A sustainable dividend policy
TREASURY IN H1 2016 FOR SERVING SHAREHOLDERS A sustainable dividend policy Dividend paid in 2016 = €118M Scheduled repayment of loans = €19M incl. €18M for the Term Loan 4M shares buy back = €39M Net CAPEX = €47M Cash position = €298M at 30/06/2016 (vs €406M at 31/12/2015) Dividend paid +22% on 26 M
Slide 36: Summary of H1 2016
EUROTUNNEL GROUP Summary of H1 2016 Growth in revenue: +2% at €582M €71M of free cash flow from continuing operations Scheduled repayment of the Term Loan: €18M, i.e. €299M total repayments since 2008 EBITDA at €249M, up by +€9M Operating profit (EBIT) at €168M, up by +€5M Net result from continuing
Slide 37: Developments and Outlook: Eurotunnel Group
6 DEVELOPMENTS AND OUTLOOK Eurotunnel Group
Slide 38: Increase our striking force
FIXED LINK: VISION 2020 Increase our striking force A cross-divisional collaborative approach to tackle challenges Up to 400 Shuttle departures per day Be be able to accommodate in 2020 2 million truck, vs 1.5M in 2015 3 million cars, vs 2.6M 13.5 million high-speed train passengers, vs 10.4M
Slide 39: Tailor-made customer relations
LE SHUTTLE: CUSTOMER EXPERIENCE Tailor-made customer relations A strategic and daily priority Reporting app launched online in H1 2016 A onboard technical fault recording tool in real time to enable faster reaction Information to customers Provide information on the travel status in real-time vi
Slide 40: A commitment to further improve services
LE SHUTTLE: CUSTOMER EXPERIENCE A commitment to further improve services Renovation of the Extension of wi-fi/4G Innovation at the Pets Special events on both Charles Dickens coverage in the Tunnel building in Coquelles: terminals (at peak building in Coquelles (6 UK/FR operators) Pets drive-through
Slide 41: The Shuttle premium service
FLEXIPLUS The Shuttle premium service One product and some exclusive services Priority boarding A flexible ticket and the possibility to travel on the next available Shuttle One dedicated check-in lane (minimum) Access to a private lounge (free snacks, newspapers and wi-fi) Flexiplus custome
Slide 42: Support the growth in traffic and customers' satisfaction
TRUCK SHUTTLES IN H1 2016 Support the growth in traffic and customers’ satisfaction Pricing policy: Deployment of wi-fi and New Freight Extranet New Freight brochure, increase in the number AMC TV: practical site with the online information panels, new of peak traffic days information broadcast trac
Slide 43: A vital service to Europe's industries and economy
TRUCK SHUTTLES BY 2020 AND BEYOND A vital service to Europe’s industries and economy 2016 to 2020 Steady and strong growth of the truck market 8 consecutive months of traffic records at Eurotunnel (November 2015 – June 2016) A potential market of more than 4.4M trucks in 2020 Developments in 2
Slide 44: New services and destinations, new level of comfort
HIGH-SPEED PASSENGER TRAINS - EUROSTAR New services and destinations, new level of comfort New Eurostar trains 10 new e320 trains in commercial service in H1 2016, 7 further trains ordered +20% more capacity (900 passengers) Comfort Speed Services Growth in traffic / destinations New London-Am
Slide 45: A clear demonstration of our know-how
EUROPORTE: RAIL FREIGHT A clear demonstration of our know-how Rail freight making progress throughout Europe but France is lagging behind Horizon 2020, for profitable growth Develpment of long-term partnerships with customers (Lhoist, Caledonian Sleeper, Drax, Network Rail,…) Diversification of
Slide 46: Expertise and results
GROUPE EUROTUNNEL Expertise and results €582M revenue, €249M EBITDA and €60M net profit in H1 2016 Concessionaire until 2086 of a vital binational link between the United Kingdom and Europe The most environmentally-friendly cross-Channel transport system A fast response capacity An optimisation of t