Strong growth in net profit
- Revenues: a further increase to €510
million (+4%)1
- EBITDA increased to €250 million
(+5%)
- Net profit up strongly to €39
million (+15%)
- Revenues increased to €450 million
(+4%)
- Increase in EBITDA of 4% to €247
million
- Revenues increased to €60 million
(+2%)
- Significant increase in EBITDA to €4
million
Regulatory News:
Jacques Gounon, Chairman and Chief Executive Officer of
Getlink (Paris:GET) stated: “For the first six months of 2018,
Getlink has published growth in its revenues and EBITDA for the 9th
consecutive first-half. We confirm our outlook for 2022 and our
shareholder remuneration policy."
Key events in the half
year
- Group
- The arrival of Atlantia as an investor
in the Group
- At its Investor Day on 19 June, the
Group confirmed its financial objectives and dividend policy
- Payment of €160 million in dividends
for the 2017 financial year
- Negative impact of the SNCF strikes on
EBITDA estimated at €4.5 million
- Eurotunnel
- Strength of Le Shuttle and Le Shuttle
Freight
- Opening of the Folkestone Flexiplus
lounge
- Increase in truck market share (+1.7
points) to 40.9% and relative stability in the car market at
57.6%
- Eurostar traffic growth up to 5.2
million passengers (+3%), aided by the opening of the
London-Amsterdam service on 4 April 2018 and a record month in June
with 1.016 million passengers (+6.6%), the second biggest month in
their history, despite the impact of strikes during the second
quarter
- Underlying growth of +20% for
cross-Channel rail freight trains, which were strongly affected by
the SNCF strikes
- Europorte
- Increase in revenues (+2%) due to
winning new contracts
- Negative impact of SNCF strikes on
Europorte EBITDA, estimated at €1.6 million
- Significant increase in EBITDA to €4
million, in line with the strategic plan
- ElecLink
- On-time and on-budget
- €355 million investment to date since
taking control in 2016
____________________
1 All comparisons with the income statement for the first half
of 2017 are made at the average exchange rate for the first half of
2018 of £1=€1.136.
Operating profit continues to
improve
The consolidated revenues for the Group in the first six months
of 2018 reached €510 million, an increase of €18 million, or +4%
compared to the first half of 2017.
The Group’s operating costs have increased by €7 million for the
six months. For the Fixed Link, charges increased by +4% to €203
million.
The consolidated figures for the first six months show an
increase of €11 million in EBITDA to €250 million.
For the Fixed Link, this is the 9th consecutive first-half of
the year when EBITDA has increased, +4% to €247 million.
We should remember that revenues and operating profit remain
characterised by the strong seasonality across the year and that
these first-half results cannot be extrapolated across the full
year.
Net finance costs increased slightly (+€3 million) in the first
six months of 2018, an increase due to the impact of the increase
in British and French inflation on the cost of the indexed tranches
of the debt.
In the first half of 2018, the Group’s net consolidated result
was a profit of €39 million, an increase of +15%.
The Free Cash Flow for the Group’s continuing activities has
increased by +€2 million to €108 million in the first six months of
2018, compared to €106 million in the first half of 2017.
OUTLOOK
Looking towards 2022, the Group remains confident in its
capacity to generate sustainable growth and continues to expect
growth in its EBITDA. The Group reconfirms its outlook for the
medium term:
2018 Objectives:
- EBITDA: €545 million at an exchange
rate of £1=€1.14
- Dividend 2018: €0.35 per share
Outlook for 2022:
- EBITDA: above €735 million (at least
+38%)
- Free Cash Flow: c.€400 million (approx.
+70%)
- Annual increase in dividend: +€0.05 per
share
GROUP REVENUES
First half (January to
June)
€ million 1st half2018*
1st half2017**
Change 1st half2017
Exchange rate €/£ 1.136 1.136
1.161 Shuttle Services 296 282 +5% 285
Railway Network 147 144 +2% 146 Other revenues 7 7
0% 7
Sub-total Fixed Link 450
433 +4% 438 Europorte
60 59 +2% 59
Revenues
510 492 +4% 497
* Average exchange rate for the first half of 2018: 1£ =
€1.136.
** Recalculated at the exchange average rate of the first half
of 2018.
Second quarter (April to
June)
€ million 2nd quarter2018
2nd quarter2017
Change 2nd quarter2017
Shuttle Services 157.5 152.6 +3% 153.9
Railway Network 77.5 76.3 +2% 77.0 Other revenues 3.9
4.1 -5% 4.0
Sub-total Fixed Link
238.9 233.0 +3%
234.9 Europorte 30.1 30.3 -1%
30.3
Revenues 269.0 263.3
+2% 265.2
First quarter (January to
March)
€ million 1st
quarter2018* 1st
quarter2017** Change
1st quarter2017 Exchange rate
€/£ 1.137 1.137
1.168 Shuttle Services 138.3 129.4 +7% 130.8 Railway
Network 70.1 68.1 +3% 68.9 Other revenues 3.3 3.1
+5% 3.2
Sub-total Fixed Link
211.7 200.6 +6%
202.9 Europorte 29.7
28.9
+3% 28.9
Revenues 241.4
229.5 +5% 231.8
* Average exchange rate for the first quarter 2018: 1£ =
€1.137.
** Recalculated at the exchange average rate of the first
quarter of 2018.
FIXED LINK TRAFFIC
First half (January to
June)
1st half-year2018
1st half-year2017 Change
Truck Shuttles 845,132 823,147 +3%
Passenger Shuttles Cars* 1,163,054
1,138,087 +2% Coaches 27,274 27,714
-2%
High-speed passenger
trains (Eurostar)**
Passengers 5,198,821 5,040,425 +3%
Rail Freight*** Tonnes 670,853 601,237
+12% Trains 1,060 1,043 +2%
Second quarter (April to
June)
2nd quarter2018
2nd quarter2017 Change
Truck Shuttles 421,281 413,291 +2%
Passenger Shuttles Cars* 675,851
671,525 +1% Coaches 16,462 16,548
-1%
High-speed passenger
trains (Eurostar)**
Passengers 2,819,078 2,769,754 +2%
Rail Freight*** Tonnes 298,692 292,512
+2% Trains 484 500 -3%
First quarter (January to
March)
1st quarter2018
1st quarter2017 Change
Truck Shuttles 423,851 409,856 +3%
Passenger Shuttles Cars* 487,203
466,562 +4% Coaches 10,812 11,166
-3%
High-speed passenger
trains (Eurostar)**
Passengers 2,379,743 2,270,671 +5%
Rail Freight*** Tonnes 372,161 308,725
+21% Trains 576 543 +6%
* Including motorcycles, vehicles with trailers, caravans and
motor homes.
** Only passengers using Eurostar to cross the Channel are
included in this table, thus excluding those who travel between
Continental stations (such as Brussels-Calais, Brussels-Lille,
Brussels-Amsterdam).
*** Rail freight services by train operators (DB Cargo on behalf
of BRB, SNCF and its subsidiaries, GB Railfreight, Rail Operations
Group, RailAdventure and Europorte) using the Tunnel.
www.getlinkgroup.com
GETLINK SE
HALF-YEAR FINANCIAL REPORT
FOR THE SIX MONTHS
TO 30 JUNE 2018*
CONTENTS
HALF-YEAR ACTIVITY REPORT AT 30 JUNE 2018 1
Analysis of consolidated income statement 1
Analysis of consolidated statement of financial position 6
Analysis of consolidated cash flows 7
Other financial indicators 8
Outlook 9
Risks 9
Related parties 9
SUMMARY HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS
10
Consolidated income statement 10
Consolidated statement of other comprehensive income 10
Consolidated statement of financial position 11
Consolidated statement of changes in equity 12
Consolidated statement of cash flows 13
Notes to the financial statements 14
A. Important events 14
B. Principles of preparation, main accounting
policies and methods 15
C. Scope of consolidation 16
D. Operating data 17
E. Personnel expenses and benefits 19
F. Intangible and tangible property, plant
and equipment 20
G. Financing and financial instruments 21
H. Share capital and earnings per share
24
I. Income tax expense 26
J. Events after the reporting period 27
STATUTORY AUDITORS’ REVIEW REPORT ON THE 2018 HALF-YEAR
FINANCIAL INFORMATION 28
DECLARATION BY THE PERSON RESPONSIBLE FOR THE HALF-YEAR
FINANCIAL REPORT AT 30 JUNE 2018 29
_________________________
* English translation of Getlink SE’s “rapport financier
semestriel” for information purposes only.
HALF-YEAR ACTIVITY REPORT AT 30 JUNE 2018
ANALYSIS OF CONSOLIDATED INCOME STATEMENT
To enable a better comparison between the two periods, the
consolidated income statement for the first half of 2017 presented
in this half-year activity report has been recalculated at the
exchange rate used for the 2018 half-year income statement of
£1=€1.136.
In the first half of 2018, the Group’s consolidated revenues
amounted to €510 million, an increase of €18 million (4%) compared
to 2017. Operating costs totalled €260 million, an increase of €7
million (3%) compared to 2017. EBITDA improved by €11 million (5%)
to €250 million and the trading profit improved by €10 million to
€173 million. At €170 million, the operating profit for the first
six months of 2018 was up by €13 million compared to 2017. Net
finance costs increased by €3 million mainly as a result of the
impact of higher British and French inflation rates on the
index-linked tranches of the debt. The pre-tax result for the
Group’s continuing operations for the first half of 2018 was a
profit of €36 million, an increase of €1 million compared to 2017
restated.
After taking into account a net tax income of €3 million, the
net result for the continuing activities of the Group was a profit
of €39 million compared to a profit of €29 million in 2017. The
Group’s net consolidated result for the first six months of 2018
was a profit of €39 million compared to a profit of €34 million in
2017.
€ million
1st half
2018 1st half 2017 Variance 1st
half 2017 Improvement/(deterioration) of result
* restated €M %
published Exchange rate €/£ 1.136 1.136
1.161 Fixed Link 450 433 17 +4 %
438 Europorte 60 59 1 +2 % 59
Revenue 510 492 18 +4 %
497 Fixed Link (203 ) (196 ) (7 ) -4 % (198 ) Europorte (56
) (56 ) – – (56 ) ElecLink (1 ) (1 ) –
– (1 )
Operating costs (260 )
(253 ) (7 ) -3 % (255
) Operating margin (EBITDA) 250 239
11 +5 % 242 Depreciation (77 )
(76 ) (1 ) -1 % (76 )
Trading profit
173 163 10 +6 % 166 Other net
operating charges (3 ) (6 ) 3
(6 )
Operating profit (EBIT) 170 157
13 +8 % 160 Net finance costs (135 ) (132 ) (3
) -2 % (134 ) Net other financial income 1 10
(9 ) -90 % 10
Pre-tax profit from continuing
operations 36 35 1
+3 % 36 Income tax income/(expense)
3 (6 ) 9 +150 % (6 )
Net
profit from continuing operations 39
29 10 +34 % 30 Net
profit from discontinued operations** – 5 (5 )
5
Net consolidated profit for the
period 39 34 5
+15 % 35
* Restated at the rate of exchange used for the 2018 half-year
income statement (£1=€1.136).
** The Group has applied IFRS 5 “Non-current Assets Held for
Sale and Discontinued Operations” to its maritime segment since the
cessation of MyFerryLink’s operations in the second half of 2015
and to GB Railfreight’s activity since its sale in November 2016.
Accordingly, the net results of these activities for the current
and previous financial periods are presented as a single line in
the income statement called “Net profit from discontinued
operations”.
The evolution of the pre-tax result from continuing operations
by segment compared to 2017 is presented below:
€ million
Fixed Link
Europorte ElecLink Total
continuing activities Pre-tax result from
continuing activities for the 1st half of 2017* 37
- (2 ) 35 Improvement/(deterioration) of
result: Revenue +17 +1 - +18 Operating expenses -7 -
- -7
EBITDA +10 +1 -
+11 Depreciation -1 - - -1
Trading result +9 +1 - +10 Other
net operating income/charges +3 - - +3
Operating result (EBIT) +12 +1 -
+13 Net financial costs and other -12 -
- -12
Total changes - +1
- +1 Pre-tax result from continuing
operations for the 1st half of 2018 37
1 (2 ) 36
* Restated at the rate of exchange used for the 2018 half-year
income statement (£1=€1.136).
1 FIXED LINK SEGMENT
The Group’s core business is the Channel Tunnel Fixed Link
Concession which operates and directly markets its Shuttle Services
and also provides access, on payment of a toll, for the circulation
of High-Speed Passenger Trains (Eurostar) and the Train Operators’
Rail Freight Trains through its Railway Network. As stated in note
D.1 to the half-year consolidated financial statements at 30 June
2018, as the corporate reorganisation as described in note A.1 to
the consolidated half-year financial statements at 30 June 2018 has
only recently been put in place, the separation between the
Eurotunnel and Getlink segments has not been presented in this
half-year financial report. Therefore the Group’s corporate
services are included in the Fixed Link segment as previously.
€ million
1st half 1st
half Variation Improvement/(deterioration) of result
2018 *2017 M€
% Exchange rate €/£ 1.136 1.136
Shuttle Services 296 282 14 +5 % Railway Network 147
144 3 +2 % Other revenue 7 7 – –
Revenue 450 433 17 +4 % External
operating costs (112 ) (107 ) (5 ) -5 % Employee benefits expense
(91 ) (89 ) (2 ) -2 %
Operating
costs (203 ) (196 ) (7
) -4 % Operating margin (EBITDA)
247 237 10 +4 %
EBITDA/revenue 55 % 55 % 0 pts
* Restated at the rate of exchange used for the 2018 half-year
income statement (£1=€1.136).
1.1 FIXED LINK CONCESSION REVENUE
Revenue generated by this segment, which in the first six months
of 2018 represented 88% of the Group’s total revenue, reached €450
million, up 4% compared to 2017.
1.1.1 Shuttle Services
Traffic (number of vehicles)
1st half 2018 1st half 2017
Change Truck Shuttle 845,132 823,147
3 % Passenger Shuttle: Cars * 1,163,054 1,138,087 2 %
Coaches 27,274 27,714 -2 %
* Includes motorcycles, vehicles with trailers, caravans and
motor homes.
Shuttle Services’ revenue for the first half of 2018 amounted to
€296 million, up 5% compared to the previous year due to an
increase in yields which continue to benefit from the Group’s
strategy of optimising the profitability of its Shuttle business
through its dynamic pricing policy for both truck and passenger
traffic.
Truck Shuttle
The Truck Shuttle service increased its share of the Short
Straits cross-Channel truck market from 39.2% for the first half of
2017 to 40.9% for the first half of 2018. The number of vehicles
carried increased by 2.7% to 845,132 trucks which represents a
record for a first half of the year.
Passenger Shuttle
With growth traffic of 2.2% in the first half of 2018, the
market share of the Passenger Shuttle’s car activity remained
relatively stable at 57.6%.
The Passenger Shuttle’s coach market share for the first half of
2018 increased by one point compared to the previous year, to
41.0%.
1.1.2 Railway Network
Traffic 1st half 2018
1st half 2017 Change High-Speed
Passenger Trains (Eurostar) Passengers * 5,198,821
5,040,425 3 % Train Operators' Rail Freight Services **:
Number of tonnes 670,853 601,237 12 % Number of trains 1,060
1,043 2 %
* Only passengers travelling through the Channel Tunnel are
included in this table, excluding those who travel between
continental stations (such as Brussels-Calais, Brussels-Lille,
Brussels-Amsterdam, etc.).
** Rail freight services by train operators (DB Cargo for BRB,
SNCF and its subsidiaries, GB Railfreight, Rail Operations Group,
RailAdventure and Europorte) using the Tunnel.
The Group earned revenues of €147 million in the first half of
2018 from the use of its Railway Network by Eurostar’s High-Speed
Passenger Trains and by the Train Operators’ Rail Freight Services,
up 2% compared to 2017. Revenues generated by both Eurostar and
rail freight trains were impacted by the series of SNCF strikes in
France during April, May and June 2018.
Despite being impacted by the SNCF strikes, the 5,198,821
Eurostar passengers that used the Tunnel in the first half of 2018
represented a record first-half, with June being the second best
month ever. This growth of 3% compared to the previous year was
across all destinations and was boosted by the start of direct
services from London to Amsterdam on 4 April 2018.
In the first half of 2018, cross-Channel rail freight recorded a
growth of 2% in the number of trains compared to the same period in
2017. After a first quarter with 6% growth and well set to continue
like this with the launch of two new cross-Channel rail freight
services to Italy and Germany and the new Silk Road service, the
second quarter was affected by the SNCF strikes and fell by 3%.
The impact on Railway Network revenue of the SNCF strikes in the
first half of 2018 is estimated at €2.9 million.
1.2 FIXED LINK OPERATING COSTS
Fixed Link’s operating costs amounted to €203 millions for the
first half of 2018, up 4% compared to 2017. This increase of €7
million was due mainly to increased activity and maintenance costs
as well as to increased electricity costs and UK business rates,
partially offset by the impact on the period of credits from EDF
energy savings certificates in relation to operation of the new
Truck Shuttles amounting to €4 million.
2 EUROPORTE SEGMENT
The Europorte segment covers the entire rail freight transport
logistics chain in France and includes Europorte France and
Socorail.
€ million
1st half 1st half
Change Improvement/(deterioration) of result
2018 2017 €M Revenue 60 59 1
External operating costs (33 ) (33 ) – Employee benefits expense
(23 ) (23 ) –
Operating costs
(56 ) (56 ) – Operating
margin (EBITDA) 4 3 1
Despite the SNCF strikes that had a significant impact on
Europorte’s activities during the second quarter of 2018,
Europorte’s revenues and EBITDA for the first half of 2018
increased by €1 million compared to 2017. The results for the
period were driven by the contribution of new business and
increased activity, particularly in the petrochemical sector and by
the continued strategy to sustainably reinforce Europorte’s
profitability. The impact of the SNCF strikes on revenue and EBITDA
is estimated at €1.6 million for the first half of 2018.
3 ELECLINK SEGMENT
ElecLink’s activity is the construction and operation of a 1,000
MW electricity interconnector between the UK and France.
Construction works began in 2016 and the interconnector is expected
to be in commercial operation at the beginning of 2020.
Costs directly attributable to the project are capitalised.
During the first half of 2018, works continued to advance in
accordance with the schedule and investment in the project amounted
to €116 million.
Operating costs for the first half of 2018 amounted to €1
million, at a similar level as in the first half of 2017.
4 OPERATING MARGIN (EBITDA)
EBITDA by business segment evolved as follows:
€ million
Fixed Link
Europorte ElecLink Total
Group EBITDA 1st half 2017 * 237 3 (1 )
239
Improvement/(deterioration): Revenue 17 1 –
18 Operating
costs (7 ) – –
(7 ) Total
changes 10 1 –
11 EBITDA 1st half 2018 247
4 (1 ) 250
* Restated at the rate of exchange used for the 2018 income
statement (£1=€1.136).
At €250 million in 2018, the Group’s operating margin improved
by €11 million compared to 2017 (+5%) as a result of an increase in
revenue and control of costs. The series of SNCF strikes during the
second quarter of 2018 impacted the EBITDA of both the Fixed Link
and Europorte segments by an estimated €4.5 million.
5 OPERATING PROFIT (EBIT)
Depreciation charges increased by €1 million compared to the
first half of 2017 to €77 million.
At €173 million in the first half of 2018, the trading profit
improved by €10 million (+6%) compared to 2017.
After taking into account net other operating charges of €3
million (€6 million in 2017), the operating profit for the first
six months of 2018 was up by €13 million (+8%) compared to 2017, to
€170 million.
6 NET FINANCIAL CHARGES
At €135 million for the first half of 2018, net finance costs
increased by €3 million compared to 2017 at a constant exchange
rate. This increase was mainly as a result of the impact of the
increase in inflation rates in the UK and France on the
index-linked tranches of the debt and of the loan for the
acquisition of the inflation-linked bonds partially offset by the
capitalisation of interest on the financing of the ElecLink
project.
Other net financial income of €1 million in the first half of
2018 include net exchange losses of €0.1 million (2017: net
exchange gains of €8 million) and a net income of €1 million on the
bonds held by the Group (2017: €3 million).
7 NET RESULT FROM CONTINUING OPERATIONS
The Group’s pre-tax result for continuing operations for the
first six months of 2018 was a profit of €36 million, up €1 million
compared to 2017 at a constant exchange rate.
After taking into account a net tax income of €3 million, the
Group’s post-tax result for continuing operations for the first
half of 2018 was a profit of €39 million compared to a profit of
€29 million in 2017.
8 NET RESULT FROM DISCONTINUED ACTIVITIES
Information on discontinued activities is set out in note C.2 to
the Group’s half-year consolidated financial statements as at 30
June 2018.
9 NET CONSOLIDATED RESULT
The net consolidated result for the Group for the first half of
the 2018 financial year was a profit of €39 million compared to a
profit of €34 million (restated at an equivalent exchange rate) for
the same period in 2017.
ANALYSIS OF CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
€ million
30 June 2018
31 December 2017 Exchange rate €/£ 1.129
1.127 Fixed assets 6,554 6,493 Other non-current assets
559 229
Total non-current assets 7,113
6,722 Trade and other receivables 111 96 Other current
assets 65 61 Cash and cash equivalents 274 613
Total current assets 450 770
Total assets 7,563 7,492 Total
equity 1,914 2,051 Financial liabilities 4,568 4,346 Interest rate
derivatives 719 716 Other liabilities 362 379
Total equity and liabilities 7,563
7,492
The table above summarises the Group’s consolidated statement of
financial position as at 30 June 2018 and 31 December 2017. The
main elements and changes between the two dates, presented at the
exchange rate for each period, are as follows:
- At 30 June 2018, “Fixed assets” include
property, plant and equipment and intangible assets amounting to
€5,964 million for the Fixed Link segment, €512 million for the
ElecLink segment and €79 million for the Europorte segment. The
increase between 31 December 2017 and 30 June 2018 results mainly
from investments of €116 million in the ElecLink project.
- Other non-current assets at 30 June
2018 include the inflation-linked bonds acquired by the Group in
February 2018 amounting to €336 million (see note A.2 to the
half-year consolidated financial statements at 30 June 2018) and a
deferred tax asset of €218 million.
- At 30 June 2018, “Cash and cash
equivalents” amounted to €274 million after payment of the €160
million dividend, net capital expenditure of €111 million, €126
million in debt service costs (interest, repayments and fees) and
net payments of €192 million in respect of the acquisition of the
inflation-linked bonds (a total payment of €407 million for the
purchase of the bonds financed in part by a loan of €214
million).
- Equity decreased by €137 million as a
result of the €160 million dividend payment, the impact of the
first-time application of IFRS 9 on the opening balance sheet
at 1 January 2018 (€22 million) and the purchase of treasury shares
(€13 million) partly offset by the recycling of the fair value of
value on the hedging contracts (€18 million) and the net profit for
the period (€39 million).
- Financial liabilities have increased by
€222 million compared to 31 December 2017 as a result of the €214
million loan to finance the acquisition of the inflation-linked
bonds in February 2018, an increase of €30 million arising from
fees and the effect of inflation on the index-linked debt tranches
of the Term Loan and €26 million for the impact of the first-time
application of IFRS 9 on the accounting value of the debt at 1
January 2018. These increases have been partially offset by the
contractual debt repayments of €39 million.
- The valuation of the fair value of the
interest rate derivatives liability increased by €3 million.
- Other liabilities include €287 million
of trade and other payables and provisions, as well as retirement
liabilities of €75 million.
ANALYSIS OF CONSOLIDATED CASH FLOWS
Consolidated cash flows
€ million
1st half 2018
1st half 2017 Exchange rate €/£ 1.129
1.137
Continuing activities: Net cash inflow from trading
271 261 Other operating cash flows and taxation (9 )
1
Net cash inflow from operating activities 262
262 Net cash outflow from investing activities (111 ) (168 )
Net cash outflow from financing activities (298 ) (269 ) Net cash
(outflow)/inflow from financing operation (192 ) 265
(Decrease)/increase in cash in the period from continuing
activities (339 ) 90
Discontinued activities *: Net cash outflow from sale of
subsidiary – (2 ) Net cash inflow from financing activities
– 120
Increase in cash in the period from discontinued
activities – 118 Total
(decrease)/increase in cash in the period (339 )
208
* Maritime segment and GB Railfreight Limited, see note C.2 to
the consolidated accounts at 30 June 2018.
Continuing activities
At €271 million, net cash generated from trading by
continuing operations in the first half of 2018 improved by
€10 million compared to the first half of 2017. This change is
explained mainly by:
- an increase of €9 million to
€271 million for the Fixed Link’s activities (first half of
2017: €262 million),
- Europorte’s trading cash flow remained
stable at €1 million, and
- ElecLink’s expenditure remained
relatively stable at €1 million (first half of 2017:
€2 million).
The €10 million reduction in “Other operating cash flows
and taxation” is mainly due to a net increase in tax payments: net
payments of €6 million in the first half of 2018 compared to net
receipts of €3 million in the first half of 2017.
At €111 million in the first half of 2018 (down by
€57 million compared to the first half of 2017), net cash
payments from investing activities comprised mainly:
- a net amount of €31 million
relating to the Fixed Link (first half of 2017: €27 million).
The main expenditure was €11 million on infrastructure,
€8 million on rolling stock, €4 million for new Flexiplus
lounges (the Folkestone lounge opened 18 May 2018), €3 million to
improve service to customers on the terminals and €2 million
on computing and digital projects, and
- payments of €79 million for the
construction works on the ElecLink project (€140 million in
the first half of 2017).
On 9 February 2018, the Group completed the acquisition of
inflation-linked bonds (see notes A.2 and G.1 to the notes to the
half-year consolidated financial statements at 30 June 2018), which
was financed in part by an external loan. This transaction
generated a net cash outflow of €192 million.
Other net financing payments in the first half of 2018 amounted
to €298 million compared to €269 million in the first
half of 2017. During 2018, cash flow from financing comprised:
- debt service costs of
€126 million:
- €84 million of interest paid on the
Term Loan and on other borrowings (€111 million in the first half
of 2017, including the associated hedging transactions before their
partial termination in June 2017); the decrease in interest paid
results from the new financing conditions obtained from the debt
restructuring in June 2017;
- €39 million paid in respect of the
scheduled repayments on the Term Loan and other borrowings
(€17 million in the first half of 2017), including €31 million
in respect of the first repayments of tranche A of the debt,
and
- €4 million in relation to fees on
the operation to simplify the debt completed at the end of 2015
(€3 million in the first half of 2017).
- €15 million paid in respect of the
share buyback programme (€4 million in the first half of
2017),
- €160 million paid in dividends (€139
million in the first half of 2017), and
- net receipts of €3 million from
the liquidity contract and interest received (€7 million in the
first half of 2017, including €3 million on the floating rate notes
held by the Group until June 2017).
Free Cash Flow
The Group defines its Free Cash Flow as net cash flow from
operating activities less net cash flow from investing activities
(excluding the initial investment in new activities and the
acquisition of shareholdings in subsidiary undertakings) and net
cash flow from financing activities relating to debt service plus
interest received (on cash and cash equivalents and other
financial assets).
€ million
1st half 2018
1st half 2017 Exchange rate €/£ 1.129
1.137 Net cash inflow from operating activities 262 262 Net cash
outflow from investing activities (31 ) (28 ) Debt service costs
(interest paid, fees and repayments) (126 ) (134 ) Interest
received and other receipts 3 6
Free Cash Flow
from continuing operations 108 106
Free Cash Flow from discontinuing operations – 5 Free
Cash Flow 108 111 Dividend paid (160 ) (139 )
Purchase of treasury shares and net movement on liquidity contract
(16 ) (2 ) ElecLink: project expenditure (79 ) (140 ) Refinancing
operations (192 ) 266 Sale of GB Railfreight Limited – (2 ) Sale of
ferries – 114
Use of Free Cash Flow
(447 ) 97 (Decrease)/increase in cash in
the period (339 ) 208
At €108 million in the first half of 2018, Free Cash Flow
for continuing activities has increased by €2 million compared
to the same period in 2017 for the reasons set out above.
OTHER FINANCIAL INDICATORS
Financial covenants
Following the completion of the Group’s corporate reorganisation
during the first half of 2018 (see note A.1 to the consolidated
financial statements at 30 June 2018), the debt service cover ratio
is now based on the cash flows of the Eurotunnel Holding SAS
sub-group of companies only, being defined as their net operating
cash flow less capital expenditure and taxes compared to their debt
service costs, calculated on a rolling 12 month basis. The
synthetic debt service cover ratio is calculated on the same basis
but using a hypothetical amortisation on the Term Loan.
The ratios for the 12 months ending 30 June 2018 were 2.53 and
2.53 respectively and hence the financial covenants for the period
were respected.
Net debt to EBITDA ratio
The net debt to EBITDA ratio as defined by the Group in
paragraph 2.1.4 of the 2017 Registration Document, is the ratio
between consolidated EBITDA and financial liabilities less the
value of the inflation-linked notes and cash and cash equivalents
held by the Group. The Group does not consider it appropriate to
publish this ratio when calculated on the basis of the activity of
a six month period. At 31 December 2017, the ratio was 7.1.
EBITDA to finance cost ratio
The ratio of the Group’s consolidated EBITDA to its finance
costs (excluding interest received and indexation) as defined in
paragraph 2.1.4 of the 2017 Registration Document is 2.2 at 30 June
2018 (30 June 2017 restated: 2.2).
OUTLOOK
The Group's results for the first half of 2018 reflect the
orientations adopted within the framework of the strategic plan.
They confirm the robustness of its business model focused on
sustainable growth in its various business segments and on creating
value for its shareholders.
The results of the Shuttle business, with traffic growth of
between 2 and 3% and revenue increasing by 5%, reflect the strategy
of optimising profitability through active management of prices,
for both the truck and car activities.
This strategy, driven by an attractive commercial proposition
based on quality of service and the digitalisation of processes, is
intended to generate continuous growth in Tunnel traffic whilst
optimising margins. The Group’s investment policy serves this
strategy and, such as with the opening of the new Flexiplus lounge
on the Folkestone terminal during the first half of the year, the
Group is continuing its targeted investments aimed at reinforcing
service quality and modernising its infrastructure and
equipment.
Despite the SNCF strike during the period, passenger high-speed
train traffic travelling through the Tunnel continued the growth
seen in 2017, and the launch in April 2018 of the new service
between London and Amsterdam confirms the potential for growth of
the rail transport market between the UK and the Continent over and
above existing services and destinations.
The Group remains very confident in the solidity of its Fixed
Link business and in its potential for growth. The Fixed Link
continues to be, and will increasingly assert itself as, the
principle choice for trade and movement of people between the UK
and continental Europe.
The Group is closely following the negotiations on the exit of
the United Kingdom from the European Union, which, with the recent
publication of a white paper by the British Government, has entered
an intense phase in the run-up to the effective date of 29 March
2019. Since 2016, the Group has been in constant contact with the
French and British authorities and other stakeholders so as to be
informed of potential changes to the framework for future
cross-border controls and the definition of technological options
to facilitate them. As a private company, manager of its own
infrastructure and with 25 years of experience in the management of
change, the Group remains confident in its ability – once the
arrangements have been agreed between the parties – to deliver
the solutions required to enable it to guarantee the fluidity of
traffic through the Tunnel and to reinforce its position as a vital
link in the European economic landscape. It is to be remembered
that under the Treaty of Canterbury, the management of frontiers is
the joint responsibility of the two States.
Europorte continues its strategy of prioritising the
profitability of its operations and the quality of its services.
Its performance in the first half of the year, achieved despite the
SNCF strikes, reinforces the Group’s objective of creating value in
rail freight in France through managed growth and a high quality of
service.
The ElecLink project is progressing normally and is in line with
both budget and timetable except for a small shift in the
deployment in the rail tunnel. The various studies and independent
expert opinions requested by the IGC in order to give authorisation
for the installation of the cable will be completed and delivered
in the next few weeks. The objective of a start of operations at
the beginning of 2020 remains valid.
Following the completion of its corporate reorganisation in
April 2018, the Group continues to work on the optimisation of its
financing structure in order to minimise, as market conditions
allow, the cost of its debt and to support its strategy to develop
its core businesses of infrastructure and transport activities.
During the second half of 2018, the Group intends to refinance the
EASL external bank loan of £190 million.
With confidence in its future and in light of its first half
results, the Group confirms its financial objective as published in
its 2017 Registration Document of a consolidated EBITDA of €545
million in 2018 (on the basis of an exchange rate of £1=€1.14 and
the current scope of consolidation)*.
The start of ElecLink operations in 2020 will enable a
significant step change in the Group’s profitability. In total, in
the current context, the Group believes it should exceed an EBITDA
of €735 million (at £1=€1.14) in 2022.*
The Group confirms its intention to continue with its policy of
a regular growth in dividend payments to shareholders with a target
increase per share of €0.05 per year.
RISKS
The main risks and uncertainties that the Group may face in the
remaining six months of the financial year are identified in the
“Risks and Controls” chapter (chapter 3) of the 2017 Registration
Document, which contains a detailed description of the risk factors
to which the Group is exposed. However, other risks, not identified
at the date of publication of this half-year report, may exist.
RELATED PARTIES
In the first half of 2018, the Group did not have any related
parties transactions as defined by IAS 24.
_____________________________
* These objectives are based on data, assumptions and estimates
that are considered to be reasonable. They take particular account
of the consequences of the geopolitical context but are however
liable to change or to be modified due to uncertainties related in
particular to the economic, financial, competitive and regulatory
environment. Furthermore, the materialisation of certain risks as
described in chapter 3 “Risks and Controls” of the 2017
Registration Document could have an impact on the Group’s
activities and its capacity to achieve its objectives. The Group
does not therefore make any commitments nor does it give any
guarantee that the objectives will be met, and the forward looking
information contained in this chapter cannot be used to make a
forecast of results.
SUMMARY HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
€'000
Note 1st
half 2018 1st half 2017
Full year 2017 Revenue D.1 510,373 496,993 1,032,978
Operating expenses D.2 (145,128 ) (141,119 ) (278,184 ) Employee
benefits expense E (115,169 ) (113,682 )
(228,550 )
Operating margin (EBITDA) D.1
250,076 242,192 526,244 Depreciation F
(77,353 ) (76,448 ) (152,590 )
Trading
profit 172,723 165,744 373,654 Other
operating income D.3 663 696 1,289 Other operating expenses
D.3 (2,966 ) (6,205 ) (10,241 )
Operating
profit 170,420 160,235 364,702 Finance
income G.2 859 565 1,808 Finance costs G.2 (136,421 )
(134,438 ) (272,031 ) Net finance costs (135,562 )
(133,873 ) (270,223 ) Other financial income G.3 9,317 57,064
69,245 Other financial charges G.3 (7,937 )
(47,291 ) (112,092 )
Pre-tax profit from continuing
operations 36,238 36,135 51,632 Income tax
expense of continuing operations I.1 2,961
(5,939 ) 56,534
Net profit from continuing operations
39,199 30,196
108,166 Net profit from discontinued operations C.2
4 5,205 5,116
Net profit for the year
39,203 35,401
113,282 Net profit attributable to: Group share
39,203 35,460 112,932 Minority interest share
– (59 ) 350
Earnings per share (€): H.3 Basic
earnings per share: Group share 0.07 0.07 0.21 Diluted earnings per
share: Group share 0.07 0.07 0.21 Basic earnings per share from
continuing operations 0.07 0.06 0.20 Diluted earnings per share
from continuing operations 0.07 0.06
0.20
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
€'000
Note 1st
half 2018 1st half 2017
Full year 2017 Items that will never be
reclassified to the income statement: Actuarial gains and
losses on employee benefits (21 ) (363 ) 26,560 Related tax ,, I 6
93 (300 )
Items that are or may be reclassified to the income
statement: Foreign exchange translation differences (2,133 )
41,960 56,608 Hedging contracts: movement in market value and
recycling of the fair value on the partially terminated contracts
G.1 25,780 126,913 126,337 Related tax I (7,376 )
65,601 50,434
Net income recognised directly in
equity 16,256 234,204 259,639 Profit for
the period – Group share 39,203 35,460
112,932
Total comprehensive income – Group share
55,459 269,664 372,571 Total comprehensive
(expense)/income – minority interest share –
(59 ) 650
Total comprehensive income for the
period 55,459 269,605
373,221
The accompanying notes form an integral part of these
consolidated financial statements. The exchange rates used for the
preparation of these financial statements are set out in note B.2
below.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
€'000
Note 30 June 2018
31 December 2017 ASSETS
Goodwill F 20,392 20,392 Intangible assets F 119,955
119,955
Total intangible assets 140,347
140,347 Concession property, plant and equipment F 5,960,681
6,013,175 Other property, plant and equipment F
452,877 339,529
Total property, plant and equipment
6,413,558 6,352,704 Deferred tax asset I.2 218,371
217,420 Other financial assets G.4 341,246
11,697
Total non-current assets 7,113,522
6,722,168 Inventories 2,123 1,843 Trade receivables 110,669
96,422 Other receivables 62,383 58,781 Other financial assets G.4
199 – Cash and cash equivalents 274,297
612,533
Total current assets
449,671 769,579 Total assets
7,563,193 7,491,747 EQUITY
AND LIABILITIES Issued share capital H.1 220,000 220,000 Share
premium account 1,711,796 1,711,796 Other reserves H.4 (347,687 )
(286,106 ) Profit for the period 39,203 112,932 Cumulative
translation reserve 290,257 292,390
Equity – Group share 1,913,569 2,051,012
Minority interest share – –
Total
equity 1,913,569 2,051,012 Retirement benefit
obligations 74,934 73,970 Financial liabilities G 4,251,674
4,219,528 Other financial liabilities 41,646 52,078 Interest rate
derivatives G.1 718,726 716,371
Total
non-current liabilities 5,086,980 5,061,947
Provisions D.4 15,805 73,059 Financial liabilities G 270,038 67,872
Other financial liabilities 4,820 6,885 Trade payables 206,730
197,925 Other payables 65,251 33,047
Total current liabilities
562,644 378,788 Total equity and
liabilities 7,563,193
7,491,747
The accompanying notes form an integral part of these
consolidated financial statements. The exchange rates used for the
preparation of these financial statements are set out in note B.2
below.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
€'000
Issued share capital
Share premium account *
Consolid- ated reserves Result
Cumulative translation reserve
Group share Minority interests
Total 1 January 2017 220,000 1,711,796 (555,788 )
200,585 235,782
1,812,375 (650 )
1,811,725 Transfer
to consolidated reserves – – 200,585 (200,585 ) –
– –
– Payment of dividend – – (139,005 ) – –
(139,005 ) –
(139,005 ) Share based payments – – 5,972 – –
5,972 –
5,972 Acquisition/sale of treasury shares – – (901 ) – –
(901 ) –
(901 ) Result for the year – – – 112,932 –
112,932 350
113,282 Minority interests – – – – –
– 300
300 Profit/(loss) recorded directly in other
comprehensive income: ▪ Actuarial gains and losses on employee
benefits – – 26,560 – –
26,560 –
26,560 ▪ Related tax
– – (300 ) – –
(300 ) –
(300 ) ▪ Movement in fair
value of hedging contracts – – 96,104 – –
96,104 –
96,104 ▪ Recycling of the fair value on the partially
terminated hedging contracts – – 30,233 – –
30,233 –
30,233 ▪ Related tax – – 50,434 – –
50,434 –
50,434 ▪ Foreign exchange translation differences –
– – – 56,608
56,608
–
56,608 31 December 2017
220,000 1,711,796 (286,106 ) 112,932
292,390 2,051,012 – 2,051,012 Transfer
to consolidated reserves – – 112,932 (112,932 ) –
– –
– Impact of the first application of IFRS 9 (G.1) – –
(25,901 ) – –
(25,901 ) –
(25,901 ) Related tax – –
3,448 – –
3,448 –
3,448 Payment of dividend (H.4) – –
(160,385 ) – –
(160,385 ) –
(160,385 ) Share based
payments ** – – 3,094 – –
3,094 –
3,094
Acquisition/sale of treasury shares – – (13,158 ) – –
(13,158
) –
(13,158 ) Result for the period – – – 39,203 –
39,203 –
39,203 Profit/(loss) recorded directly in
other comprehensive income: ▪ Actuarial gains and losses on
employee benefits – – (21 ) – –
(21 ) –
(21 ) ▪
Related tax – – 6 – –
6 –
6 ▪ Movement in fair value
of hedging contracts (G.1) – – (2,635 ) – –
(2,635 ) –
(2,635 ) ▪ Recycling of the fair value on the partially
terminated hedging contracts (G.1) – – 28,415 – –
28,415 –
28,415 ▪ Related tax – – (7,376 ) – –
(7,376 ) –
(7,376 ) ▪ Foreign exchange translation differences –
– – – (2,133 )
(2,133 )
–
(2,133 ) 30 June 2018
220,000 1,711,796 (347,687 )
39,203 290,257 1,913,569
– 1,913,569
* See note H.4 below.
** Of which €1,516,000 is in respect of free shares and
€1,578,000 is in respect of preference shares.
The accompanying notes form an integral part of these
consolidated financial statements. The exchange rates used for the
preparation of these financial statements are set out in note B.2
below.
CONSOLIDATED STATEMENT OF CASH FLOWS
€'000
Note 1st
half 2018 1st half 2017
Full year 2017 Operating margin (EBITDA) from
continuing operations D.1 250,076 242,192 526,244 Operating margin
(EBITDA) from discontinued operations C.2 (48 ) (531 ) (681 )
Exchange adjustment * (904 ) (2,216 ) (3,397 ) Decrease/(increase)
in inventories (279 ) 124 153 (Increase)/decrease in trade and
other receivables (11,023 ) (11,653 ) (3,106 ) Increase in trade
and other payables 33,012 32,996
19,713
Net cash inflow from trading 270,834
260,912 538,926 Other operating cash flows (3,297 )
(3,010 ) (5,302 ) Taxation paid (5,373 )
4,136 (1,406 )
Net cash inflow from operating
activities 262,164
262,038 532,218 Payments to acquire property,
plant and equipment (110,604 ) (167,691 ) (275,240 ) Sale of
property, plant and equipment 17 6 169 Purchase of shares – – 300
Sale of subsidiary – (2,338 )
(2,338 )
Net cash outflow from investing activities
(110,587 ) (170,023 )
(277,109 ) Dividend paid (160,385 ) (139,005 ) (139,005 )
Exercise of stock options 2,922 1,735 2,365 Purchase of treasury
shares (14,923 ) (3,698 ) (8,695 ) Liquidity contract (net) (460 )
1,725 4,816 Cash received from loans 214,435 1,956,708 1,949,757
Fees paid on new loans (1,622 ) (19,879 ) (25,177 ) Purchase of
inflation-linked bonds (405,028 ) – – Fees paid for partial
termination of hedging contracts – (484,297 ) (481,982 ) Early
repayment of loans – (1,351,030 ) (1,347,486 ) Cash received from
redemption of floating rate notes – 163,995 163,995 Fees paid on
loans (3,546 ) (3,435 ) (7,151 ) Interest paid on loans (83,656 )
(77,639 ) (162,954 ) Interest paid on hedging instruments – (33,786
) (33,703 ) Scheduled repayment of loans (38,998 ) (18,681 )
(25,968 ) Cash received under finance leases – 119,552 121,807
Interest received on cash and cash equivalents 938 563 2,641
Interest received on other financial assets –
2,742 2,742
Net cash (outflow)/inflow from
financing activities **
(490,323 )
115,570 16,002 (Decrease)/increase in cash
in the period (338,746 )
207,585 271,111
* The adjustment relates to the restatement of elements of the
income statement at the exchange rate ruling at the
period end.
** In 2017, the fees paid during the renegotiation of tranche C
totalling €25 million were recognised for €18 million as an
adjustment to the amount of the debt. The fees paid on the
termination of the swaps correspond to the fair value of the
instruments (€502 million on the transaction date) after taking
into account the discount obtained from the counterparties and the
negotiation costs.
Movement during the period
€'000
1st half 2018 1st half 2017
Full year 2017 Cash and cash equivalents at 1
January 612,533 346,637 346,637 Effect of movement in exchange rate
471 (4,061 ) (5,395 ) (Decrease)/increase in cash in the period
(338,746 ) 207,585 271,111 Increase/(decrease) in interest
receivable in the period 39 (9 )
180
Cash and cash equivalents at the period end
274,297 550,152
612,533
The accompanying notes form an integral part of these
consolidated financial statements. The exchange rates used for the
preparation of these financial statements are set out in note B.2
below.
NOTES TO THE FINANCIAL STATEMENTS
Getlink SE, formerly Groupe Eurotunnel SE, is the Group’s
consolidating entity. Its registered office is at 3 rue La
Boétie, 75008 Paris, France and its shares are listed on Euronext
Paris and on NYSE Euronext London, The term “Getlink SE” refers to
the holding company which is governed by French law. The term
“Group” refers to Getlink SE and all its subsidiaries.
The main activities of the Group are the design, financing,
construction and operation of the Fixed Link’s infrastructure and
transport system in accordance with the terms of the Concession
(which will expire in 2086), the rail freight activity of the
Europorte segment as well as the construction and operation
(expected for the beginning of 2020) of the 1,000 MW electricity
interconnector in the Tunnel by ElecLink. The maritime activity was
discontinued in 2015 (see note C.2 below).
The summary half-year consolidated financial statements for 2018
were prepared under the responsibility of the Board of Directors at
its meeting held on 24 July 2018.
A. Important events
A.1 Internal legal reorganisation of the Group
On 23 April 2018, the Group finalised the implementation of its
corporate reorganisation. This internal reorganisation concerned
its main activity, that of the operation of the Fixed Link which is
now in a distinct sub-group, separate from other of the Group’s
activities which are managed and financed independently from the
Fixed Link activity. This releases Getlink SE from its
commitments as a guarantor under the Term Loan as described in
section 8.1.4 of the 2017 Registration Document and should also
enable a more flexible funding structure to be put in place in
future that is more suitable for the Group’s development needs.
The reorganisation involved the transfer of the companies in
Getlink SE’s Fixed Link sub-group (including the Concessionaires,
France Manche SA and Channel Tunnel Group Ltd) to Eurotunnel
Holding SAS which is now the new holding company for the Eurotunnel
sub-group and the bearer of the obligations under the Term Loan
which previously resided with Getlink SE.
This reorganisation forms part of the Group’s long-term strategy
to develop its core infrastructure and transport activities.
As this corporate reorganisation has only recently been put in
place, it is not reflected in the segment information in note D.1
of the consolidated financial statements at 30 June 2018, but it
will be included in the annual consolidated financial statements to
31 December 2018.
A.2 Acquisition of inflation-indexed bonds
On 9 February 2018, Eurotunnel Agent Services Limited (an
English subsidiary of Getlink SE), completed the acquisition of the
Channel Link Enterprises Finance Plc (CLEF) G2 bonds held by
FMS.
The G2 bonds, which have a nominal value of £150 million and are
indexed on UK inflation, were acquired for £359 million which was
financed in part by an external loan of £190 million and in part by
the Group’s own funds.
The G2 bonds have been recognised as “Other financial assets” at
their fair value at the date of acquisition of £302 million.
Information on the accounting treatment of the transaction is
given in note D.4 and G.4 to the notes to the consolidated
financial statements at 30 June 2018.
A.3 ElecLink
ElecLink’s construction works continued to progress as planned
during the period in terms of both cost and timetable. Investment
in the project during the first half of 2018 amounted to €116
million, bringing the total investment since the Group took full
control of ElecLink in 2016 to €355 million.
B. Principles of preparation, main accounting policies
and methods
B.1 Statement of compliance
The summary half-year consolidated financial statements have
been prepared in accordance with IFRS as adopted by the European
Union and applicable on that date. They have been prepared in
accordance with IAS 34. Thus, they do not contain all the
information required for complete annual financial statements and
must be read in conjunction with Getlink SE’s consolidated
financial statements for the year ended 31 December 2017.
B.2 Basis of preparation and presentation of the
consolidated financial statements
The summary half-year consolidated financial statements for
Getlink SE and its subsidiaries are prepared as at 30
June.
The summary half-year consolidated financial statements have
been prepared using the principles of currency conversion as
defined in the 2017 annual financial statements as at 31 December
2017.
The average and closing exchange rates used in the preparation
of the 2018 and 2017 half-year accounts and the 2017 annual
accounts are as follows:
€/£
30 June 2018 30
June 2017 31 December 2017 Closing rate 1.129
1.137 1.127 Average rate 1.136 1.161 1.140
B.3 Changes in accounting standards as at 30 June
2018
The standards and interpretations used and described in the
annual financial statements as at 31 December 2017 have been
supplemented by the standards, amendments and interpretations whose
application is mandatory for financial years beginning on or after
1 January 2018.
B.3.1 Texts adopted by the European Union whose
application is compulsory
The texts adopted by the European Union, the application of
which is compulsory for financial years beginning on or after
1 January 2018, are as follows:
- IFRS 15 “Revenue from Contracts with
Customers” and its amendments;
- IFRS 9 “Financial Instruments”;
- amendments to IFRS 4 “Application of
IFRS 9 and IFRS 4”;
- amendments to IFRS 2 “Classification
and measurement of share-based payment transactions”;
- IAS 40 “Transfers of investment
property”; and
- interpretation IFRIC 22 “Foreign
Currency Transactions and Advance Consideration”.
The impact of the first-time application of IFRS 9 is set out in
note G.1 below. The application of other texts has not had a
significant impact on the Group's consolidated financial
statements.
B.3.2 Texts adopted by the European Union but not yet
mandatory
IFRS 16 “Leases” will be mandatory for financial years beginning
on or after 1 January 2019. Under this standard, all leases other
than short-term leases and those for low-value assets must be
recognised in the lessee’s statement of financial position, in the
form of a right-of-use asset and in consideration of a financial
debt. The Group currently presents operating leases off-balance
sheet. The analysis of the potential impact of this standard, which
mainly concerns the Europorte segment, is currently being
finalised.
The Group does not intend to apply this standard in advance.
B.3.3 Other texts and amendments published by the IASB
but not approved by the European Union
The following texts concerning accounting rules and methods
specifically applied by the Group have not yet been approved by the
European Union:
- interpretation IFRIC 23 “Uncertainty
over Income Tax Treatments”;
- amendments to IAS 28 “Long-term
Interests in Associates and Joint Ventures”;
- amendments to IAS 19 “Defined Benefit
Plans: Plan Amendment, Curtailment or Settlement”; and
- amendments to IFRS 10 and IAS 28 “Sales
or contributions of assets between an investor and its associate/
joint venture”.
The potential impact of these other texts will be assessed by
the Group in subsequent years.
B.4 Use of estimates and judgements
The preparation of the consolidated financial statements
requires estimates and assumptions to be made that affect the
reported amounts of assets and liabilities and the reported amounts
of revenues and expenses for the period. The Group’s management and
Board of Directors periodically review its valuations and estimates
based on their experience and various other factors considered
relevant for the determination of reasonable and appropriate
estimates of the assets’ and liabilities’ carrying value.
Accordingly, the estimates underlying the preparation of half-year
consolidated financial statements to 30 June 2018 have been
established in the context of the decision by the UK to leave the
European Union as described below. Depending on the evolution of
these assumptions, actual results may differ from current
estimates.
The use of estimations concerns mainly the valuation of
intangible and tangible property, plant and equipment (see note F),
the evaluation of the Group’s deferred tax situation (note I), the
valuation of the Group’s retirement liabilities and certain
elements of the valuation of financial assets and liabilities (note
G.5).
Brexit: the United Kingdom’s exit from the European
Union
Following the UK's decision to leave the European Union on 23
June 2016, formal negotiations between the UK government and the
European Commission on the terms and mechanisms of the exit which
started on 19 June 2017, entered the second phase in December 2017
and are continuing as of the closing date of these accounts.
During the first half of 2018, the Group has not noted any
significant impact of this decision on its business but continues
its process of active monitoring and detailed follow-up of
potential risks that may arise.
The Group has taken account of this situation in the
determination of the principal estimates and assumptions used in
the preparation of its consolidated financial statements at 30 June
2018 as set out above.
B.5 Seasonal variations
The revenue and the trading result generated in each reporting
period are subject to seasonal variations over the year, in
particular for the Passenger Shuttle’s car activity during the peak
summer season. Therefore the results for the first half of the year
cannot be extrapolated to the full year.
C. Scope of consolidation
C.1 Changes in the scope of consolidation
The scope of consolidation at 30 June 2018 is the same as that
at 31 December 2017.
C.2 Assets held for sale and discontinued
operations
The net result per discontinued activity is as below:
€'000
1st half 2018
1st half 2017 Full year
2017 Maritime segment 4 2,316 2,230 GB Railfreight Limited
– 2,889 2,886
Net result from discontinued
activities 4 5,205
5,116 Earnings per share from discontinued activities
(€): Basic – 0.01 0.01 Diluted – 0.01 0.01
Maritime segment MyFerryLink
The Group has applied IFRS 5 “Non-Current Assets Held for Sale
and Discontinued Operations” to its maritime segment since the
ending of its maritime activity in the second half of 2015. In
2017, the Group sold its three ferries.
The Group is the subject of a number of legal claims following
the cessation of its maritime activity for which provision has been
made amounting to €11 million as at 30 June 2018.
Maritime segment’s income statement
€'000
1st half 2018
1st half 2017 Full year
2017 Operating costs (48 ) (531 ) (681
)
Operating margin (EBITDA) (48 ) (531 )
(681 ) Other operating income/(charges) 48
2,847 2,911
Operating profit/(loss) –
2,316 2,230 Net financial income/(charges) 4
– –
Pre-tax profit/(loss) 4
2,316 2,230 Deferred tax – 15,790
15,790 Income tax expense – (15,790 ) (15,790
)
Net profit/(loss) 4 2,316
2,230
Maritime segment’s cash flow statement
€'000
1st half 2018
1st half 2017 Full year
2017 Net cash flow from operating activities (17 ) (331 )
(13,371 ) Net cash flow from investing activities 12 – 75 Net cash
flow from financing activities – 119,552
121,807
Increase/(decrease) in cash in year (5
) 119,221 108,511
GB Railfreight Limited
In the first half of 2017, the Group recorded an income of €2.9
million in relation to the final price adjustment following the
sale of its subsidiary GB Railfreight Limited on 15 November
2016.
D. Operating data
D.1 Segment information
As explained in note A.1 above, the Group put in place a new
corporate structure during the first half of 2018, which splits the
old “Fixed Link” segment into two new segments: “Eurotunnel” and
“Getlink”. The Group is therefore now organised around the
following four sectors, which correspond to the internal
information reviewed and used by the main operational decision
makers (the Executive Committee):
- the “Eurotunnel” segment, which
includes the Concessionaires’ of the cross-Channel Fixed Link and
their subsidiaries,
- the “Europorte” segment, the main
activity of which is that of rail freight operator,
- the “ElecLink” segment, whose activity
is the construction and operation of a 1,000 MW electricity
interconnector running through the Channel Tunnel, and
- the “Getlink” segment which includes
the Group’s corporate services and which, since the Group’s
corporate reorganisation, is reported separately from the
Eurotunnel segment.
As the new organisation has only recently been put in place, the
separation between the Eurotunnel and Getlink segments is not
presented in this note which uses the old segmentation that
regroups Eurotunnel and Getlink in the Fixed Link segment. The new
organisation will be reflected in the annual consolidated financial
statements to 31 December 2018.
Information by segment
€'000
Fixed Link Europorte
ElecLink
Consolidation
adjustments
Total of
continuing
operations
Discontinued
operations*
Total At 30 June 2018 Revenue 450,604 59,769 –
–
510,373 –
510,373 EBITDA 248,465 3,813 (926)
(1,276)
250,076 –
250,076 Trading profit/(loss)
173,997 948 (946) (1,276)
172,723 –
172,723 Pre-tax
result of continuing operations 38,951 993 (2,430) (1,276)
36,238 –
36,238 Net consolidated result
39,199
4
39,203 Investment in property, plant and equipment 24,238
943 115,816 (1,272)
139,725 –
139,725 Property, plant
and equipment (intangible and tangible) 5,964,018 78,907 511,614
(634)
6,553,905 –
6,553,905 External financial
liabilities 4,508,641 13,071 – –
4,521,712 –
4,521,712 At 30 June
2017 Revenue 437,773 59,220 – –
496,993 –
496,993
EBITDA 241,388 2,634 (1,397) (433)
242,192 –
242,192
Trading profit/(loss) 167,902 (317) (1,408) (433)
165,744 –
165,744 Pre-tax result of continuing operations 35,741 18
(2,088) 2,464
36,135 –
36,135 Net consolidated result
30,196 5,205
35,401 Investment in property, plant and
equipment 24,716 1,281 136,572 2,464
165,033 –
165,033 Property, plant and equipment (intangible and
tangible) 6,039,721 81,480 330,977 2,397
6,454,575 –
6,454,575 External financial liabilities 4,272,350
14,072 – –
4,286,422 –
4,286,422 At 31 December 2017 Revenue 914,531
118,447 – –
1,032,978 –
1,032,978 EBITDA 522,058
5,939 (800) (953)
526,244 –
526,244 Trading
profit/(loss) 375,423 12 (828) (953)
373,654 –
373,654 Pre-tax result of continuing operations 53,936 325
(3,329) 700
51,632 –
51,632 Net consolidated result
108,166 5,116
113,282 Investment in property, plant
and equipment 76,913 3,648 180,964 705
262,230 –
262,230 Property, plant and equipment (intangible and
tangible) 6,015,767 80,829 395,817 638
6,493,051 –
6,493,051 External financial liabilities 4,273,823
13,577 – –
4,287,400 –
4,287,400
* See note C.2 above.
D.2 Operating costs
Operating costs are analysed as follows:
€'000
1st half 2018
1st half 2017 Full year
2017 Operations and maintenance: subcontracting and spares
54,470 51,060 104,782 Electricity 14,037 14,349 30,086 Cost of
sales and commercial costs 9,637 9,940 16,349 Regulatory costs,
insurance and local taxes 25,040 22,960 40,040 General overheads
and centralised costs 8,747 8,872 20,166
Sub-total Fixed Link 111,931 107,181
211,423 Europorte 32,619 33,029 66,252 ElecLink 578
909 509
Total 145,128
141,119 278,184
D.3 Other operating income and (expenses)
€'000
1st half 2018
1st half 2017 Full year
2017 Other operating income 663 696
1,289
Sub-total other operating income 663 696
1,289 Net loss on disposal or write-off of assets (2,196 )
(1,419 ) (4,733 ) Other (770 ) (4,786 ) (5,508
)
Sub-total other operating expenses (2,966 )
(6,205 ) (10,241 ) Total
(2,303 ) (5,509 ) (8,952 )
D.4 Provisions
€'000
1 January
2018 Charge to income statement
Release of unspent provisions
Provisions utilised 30 June 2018
Continuing activities 61,059 165 (2,174 ) (54,443 )
4,607
Discontinued maritime activity(see note C.2) 12,000 –
– (802 )
11,198 Total
73,059 165 (2,174 )
(55,245 ) 15,805
The provision of £48 million, which was recorded in 2017 in
respect of the indemnity to be paid as part of the acquisition of
the inflation-linked bonds, was released in the first half of 2018
following its payment in February 2018 (see note A.2 above).
E. Personnel expenses and benefits
Share-based payments
E.1 Free share plans with no performance
conditions
Following the approval by the general meeting of shareholders on
18 April 2018 of the plan to issue existing free shares, Getlink
SE’s Board of Directors decided on 18 April 2018 to grant a total
of 348,700 Getlink SE ordinary shares (100 shares per employee) to
all employees of Getlink SE and its related companies with the
exception of executive and corporate officers of Getlink SE. The
vesting period for these shares is one year and is followed by a
three-year lock-up period.
During the first half of 2018, 122,600 free shares issued in
2014 and 237,975 free shares issued in 2017 were acquired by
employees.
Movements on the free share plans
Number of shares
2018
2017 In issue at 1 January 573,075 954,550 Granted during
the period 348,700 253,800 Renounced during the period (9,100 )
(54,175 ) Acquired during the period (360,575 )
(581,100 )
In issue at the end of the period
552,100 573,075
Assumptions used for the fair value measurement on the grant
date
Year of grant
2018 Fair value of free shares
on grant date (€) 10.82 Share price on grant date (€) 11.55 Number
of beneficiaries 3,487 Risk-free interest rate (based on government
bonds): 1 year -0.46 % 4 years -0.04 %
E.2 Preference shares convertible into ordinary shares
subject to performance conditions
On 18 April 2018, the general meeting of shareholders authorised
the Board of Directors to grant to executives and senior staff of
Getlink SE and its subsidiaries preference shares (class D shares)
with a nominal value of €0.01 each with no voting rights which are
convertible into Getlink SE ordinary shares subject to performance
conditions at the end of a three-year period. The total number of
preference shares may not give the right to more than 1,500,000
ordinary shares of a nominal value of €0.40 each. Under this
scheme, the Board approved on 18 April 2018 the grant of 1,500
preference shares, each convertible at the end of the period into a
maximum of 1,000 ordinary shares.
Information on the preference share plans
Date of grant / main staff
concerned Number of shares
Conditions for acquiring rights
Vestingperiod Preference shares granted tokey
executives and senior staff on 18 April 2018 (D shares)
1,500 Staff must remain as employees of the Group.Internal
performance condition for 50% of the attributable volume: based on
the Group's long-term economic performance measured by reference to
the average rate of achievement of the EBITDA targets announced to
the market for the years 2018, 2019 and 2020.External performance
condition (TSR) for 40% of the attributable volume: based on the
stock market performance of the Getlink SE share compared to the
performance of the GPR Getlink SE index (dividends included) over a
3-year period.CSR internal performance condition for 10% of
attributable volume: based on the performance of the 2020 Composite
CSR index. 3 years
Assumptions used for the fair value measurement of
preference shares on the grant date
The fair value on grant date of the rights granted to staff as
part of the plan was calculated by using the Monte Carlo valuation
model. The assumptions used to measure the fair value of the plan
on grant date were as follows:
D shares Fair value on grant date (€)
7.69 Share price on grant date (€) 11.55 Number of beneficiaries 53
Risk-free interest rate (based on government bonds): 1 year -0.32 %
2 years -0.20 % 3 years 0.08 %
E.3 Charges to income statement
€'000
1st half 2018
1st half 2017 Full year
2017 Free shares with no performance conditions 1,551 2,250
3,731 Preference shares and free shareswith performance conditions
1,492 894 2,028
Total
3,043 3,144 5,759
F. Intangible and tangible property, plant and
equipment
The goodwill of €20,392,000 was recorded as part of the
acquisition of ElecLink in 2016.
Other property, plant and equipment consists mainly of the
Europorte subsidiaries’ rolling stock fleet and ElecLink’s
construction works.
Fixed asset additions during the first half of 2018 relate
mainly to construction works on the ElecLink project.
The Group has not identified any indication of impairment in
either the tangible or intangible assets of its Eurotunnel or
Europorte activities or of the ElecLink project.
G. Financing and financial instruments
G.1 Financial liabilities
The movements in financial liabilities during the period were as
follows:
€'000
31 December 2017 published
31 December 2017 restated*
Adjustment IFRS 9** Reclass-
ification Drawdown Repayment
Interest, indexation and fees
30 June 2018 Term Loan 4,206,973 4,209,860 25,929
(23,738 ) – – 27,598 4,239,649 Europorte loans 12,555
12,555 – (530 ) – – –
12,025
Total non-currentfinancial liabilities
4,219,528 4,222,415 25,929
(24,268 ) – –
27,598 4,251,674 Term Loan 61,766 61,814 –
23,738 – (38,492 ) 944 48,004 EASL loan – – – – 214,435 – – 214,435
Europorte loans 1,022 1,022 – 530 – (506 ) – 1,046 Accrued interest
on loans 5,084 5,088 – – –
– 1,465 6,553
Total current
financial liabilities 67,872
67,924 – 24,268
214,435 (38,998 ) 2,409
270,038 Total 4,287,400
4,290,339 25,929 –
214,435 (38,998 ) 30,007
4,521,712
* The financial liabilities at 31 December 2017 (calculated at
the year-end exchange rate of £1=€1.127) have been recalculated at
the exchange rate at 30 June 2018 (£1=€1.129) in order to
facilitate comparison.
** Amount at the exchange rate on 30 June 2018.
Adjustment relating to IFRS 9 : Financial
Instruments
IFRS 9, which is applicable from 1 January 2018, establishes new
principles for the classification and measurement of financial
assets and liabilities and notably modifies the treatment of debt
restructurings which renegotiate debt.
The renegotiation of the A tranches of the Term Loan in December
2015 is the only one of the Group’s transactions which requires
retreatment in accordance with IFRS 9. In accordance with IAS 39,
the debt was maintained in the balance sheet with an adjustment of
the effective interest rate and the spreading of the cash flow
differential over the residual maturity of the debt. In accordance
with IFRS 9, this difference is now recognised in the income
statement as at the renegotiation date.
Application of IFRS 9 is retrospective, by recognising the
cumulative transition effect as an adjustment to opening debt and
equity at 1 January 2018. As a consequence, the restatement has the
effect of increasing the carrying value of the Group’s financial
liabilities by approximately €26 million at 1 January 2018 through
a reduction in opening retained earnings.
The other changes made by this new standard, in particular as
regards the impairment of trade receivables and the treatment of
hedging contracts, did not have a significant impact on the Group's
consolidated financial statements as of 30 June 2018.
EASL loan
The line “EASL” loan in the table above of €214 million at 30
June 2018 corresponds to a bank loan of €190 million taken out by
the English Getlink SE subsidiary, Eurotunnel Agent Services
Limited, as part of the transaction completed on 9 February 2018 to
acquire the G2 loans (see note A.2 above).
This loan bears a variable rate of interest, initially at LIBOR
+1% with a progressively increasing margin to 3% at its final
maturity on 30 November 2018.
Hedging instruments
In 2007, the Group put in place hedging contracts in place to
cover its floating rate loans (tranches C1 and C2) in the form of
swaps for the same duration and for the same value (EURIBOR against
a fixed rate of 4.90% and LIBOR against a fixed rate of 5.26%). The
nominal value of hedging swap is €953 million and £350 million.
These derivatives were partially terminated as part of the
refinancing of tranche C in June 2017 as set out in note G.1.1.a)
of the Group’s annual consolidated financial statements at 31
December 2017.
These derivatives have been measured at their fair value as a
liability on the statement of financial position as follows:
€'000
31 December
2017 * Changes in market value
Exchange difference 30 June 2018
Contracts in euros 503,517 17,845 – 521,362 Contracts in sterling
212,854 (15,774 ) 284 197,364
Total 716,371 2,071
284 718,726
* Recorded directly in equity.
The amount of negative reserves for hedging instruments changed
as follows:
€'000
31 December
2017 Recycling of partial
termination June 2017 Changes in
market value Exchange difference
30 June 2018 Contracts in euros 796,458 (20,797 )
17,845 – 793,506 Contracts in sterling 386,190 (7,618
) (15,774 ) 564 363,362
Total
1,182,648 (28,415 ) 2,071
564 1,156,868
These derivatives generated a net charge to the income statement
of €28 million for the first half of 2018 (€34 million for the
first half of 2017).
G.2 Net finance costs
€'000
1st half 2018 1st
half 2017 Full year 2017 Finance income
859 565 1,808
Total finance income
859 565 1,808 Interest on
loans before hedging (85,687 ) (80,205 ) (163,761 ) Interest on
hedging instruments – (33,740 ) (31,706 ) Amortisation of hedging
costs (28,415 ) – (30,326 ) Capitalisation of interest on the
ElecLink project 6,370 5,114 9,444 Effective rate adjustment
(3,742 ) (3,519 ) (7,715 )
Sub-total
(111,474 ) (112,350 ) (224,064 ) Inflation
indexation of the nominal (24,947 ) (22,088 )
(47,967 )
Total finance costs after hedging
(136,421 ) (134,438 ) (272,031 )
Total net finance costs after hedging (135,562
) (133,873 ) (270,223 )
The inflation indexation of the loan principal estimated at 30
June 2018 reflects the estimated effect of annual French and
British inflation rates on the principal amount of the A tranches
of the Term Loan as described in note G.1.1.b) of the annual
consolidated financial statements at 31 December 2017.
G.3 Other financial income and (charges)
€'000
1st half 2018
1st half 2017 Full year
2017 Financial income arising from financial
transactions: Discount realised on the partial termination of
the hedging contracts – 15,473 15,304 Remaining discount on the
floating rate notes held by the Group – 14,316
14,057
Sub-total – 29,789 29,361
Unrealised exchange gains * 3,293 20,320 27,164 Interest received
on bonds owned by the Group 4,124 2,655 2,607 Other exchange gains
1,762 4,275 9,042 Other 138 25 1,071
Other
financial income 9,317 57,064
69,245 Financial charges arising from financial
transactions: Unamortised costs on the old C1 and C2 tranches –
(20,663 ) (20,547 ) Costs of the operation (7 ) (7,071 ) (7,361 )
Cost of the partial termination of the hedging contracts – (3,371 )
(3,344 ) Cost of acquisition of bonds (see note A.2) (2,779
) – (54,720 )
Sub-total (2,786 )
(31,105 ) (85,972 ) Unrealised exchange losses *
(3,710 ) (11,540 ) (15,510 ) Other exchange losses (1,422 ) (4,628
) (10,575 ) Other (19 ) (18 ) (35 )
Other
financial charges (7,937 ) (47,291
) (112,092 ) Total 1,380
9,773 (42,847 ) Of which net unrealised
exchange (losses)/gains (417 ) 8,780 11,654
* Mainly arising from the re-evaluation of intra-group debtors
and creditors.
G.4 Other financial assets
€'000
31 June 2018 31
December 2017 Inflation-linked bonds (see note G.1)
336,429 – Other 4,817 11,697
Total non-current
341,246 11,697 Accrued interest on
bonds 199 –
Total current 199
–
Acquisition of inflation-linked bonds
As mentioned in notes A.2 and G.1 above, on 9 February 2018
Eurotunnel Agent Services Limited (an English subsidiary of Getlink
SE) completed the acquisition of the CLEF inflation-linked bonds
held by FMS.
The G2 bonds have been recorded at their fair value at the date
of acquisition of €302 million. The fair value of these bonds on
the date of their acquisition was determined by the Group using its
own financial model and corroborated by estimates provided by an
external expert.
The bonds, which have a nominal value of €150 million and are
indexed on UK inflation, correspond to the securitisation of
tranche A2 of the Group’s debt and have the same characteristics in
terms of interest and maturity as the A2 tranche (see note G.1 to
the Group’s annual financial statements at 31 December 2017).
The difference of £49 million between the fair value of the
bonds at their acquisition date and their purchase price, which
corresponds to the indemnity paid in respect of a contribution to
the fees incurred by FMS, has been recorded in the income statement
in the first half of 2018 under “Other financial charges”. The
provision of £48 million recorded at 31 December 2017 in respect of
this indemnity was released on the acquisition of the G2 bonds (see
note D.4 above).
The difference between the fair value of the G2 bonds at their
acquisition date and their nominal value indexed at the same date
will be amortised to the income statement over the remaining term
until their final maturity.
G.5 Matrix of class of financial instrument and
recognition categories and fair value
The table below presents the carrying amount and fair value of
financial instruments. The different levels of fair value are
defined in note G.7 to the consolidated financial statements at 31
December 2017.
At 30 June 2018
€'000
Carrying
amount Fair value Class of financial
instrument Note Assets at fair
value through profit and loss
Financial assets at fair value
through equity Securities at
amortised cost Loans and
receivables Hedging instruments
Liabilities at amortised cost
Total net carrying value Level
1 Level 2 Level 3
Total Financial assets measured at fair value
Other non-currentfinancial assets – –
– – – –
– –
– –
– Financial assets not measured at fair
value Other current and non-current financial assets G.4 – –
341,445 – – –
341,445 – – 337,273
337,273 Trade
receivables – – – 110,669 – –
110,669 – – –
– Cash
and cash equivalents 274,297 – –
– – –
274,297 274,297
– –
274,297 Financial liabilities
measured at fair value Interest rate derivatives G.1
– – – – 718,726 –
718,726 – 718,726 –
718,726 Financial liabilities not measured at fair
value Financial liabilities G.1 – – – – – 4,521,712
4,521,712 – – 5,529,329
5,529,329 Other financial
liabilities – – – – – 46,466
46,466 – – –
– Trade
payables – – – – –
206,730
206,730 – – –
–
At 30 June 2018, information relating to the fair value of the
financial liabilities remains as described in note G.6 to the
annual consolidated financial statements at 31 December 2017 and
taking into account the evolution of the yield curve at 30 June
2018.
H. Share capital and earnings per share
H.1 Changes in share capital
€
30 June 2018 31
December 2017 550,000,000 fully paid-up ordinary shares
each with a nominal value of €0.40 220,000,000.00 220,000,000.00
Category B fully paid-up preference shares each with a nominal
value of €0.01 0.28 2.78 Category C fully paid-up preference shares
each with a nominal value of €0.01 6.92 6.92
Total 220,000,007.20
220,000,009.70
During the first half of 2018, 250 category B preference shares
issued under the 2014 programme of preference shares convertible
into ordinary shares were cancelled.
The programmes of preference shares convertible into ordinary
shares are described in note E.5 to the consolidated financial
statements at 31 December 2017.
H.2 Treasury shares
The movements in the number of own shares held during the period
were as follows:
Share buyback
programme Liquidity contract
Total At 1 January 2018 15,499,726 280,000
15,779,726
Share buyback programme 1,290,000 –
1,290,000 Shares
transferred to staff (free share scheme) (1,468,150 ) –
(1,468,150 ) Exercise of stock options (340,250 ) –
(340,250 ) Net purchase/(sale) under liquidity contract –
51,848
51,848 At 30 Jun 2018 14,981,326
331,848 15,313,174
Treasury shares held as part of the share buyback programme
renewed by the general meeting of shareholders and implemented by
decision of the Board of Directors on 18 April 2018 are allocated,
in particular, to cover share option plans and the grant of free
shares, as approved by the general meetings of shareholders in
2010, 2011, 2013, 2014, 2015, 2016, 2017 and 2018.
H.3 Earnings per share
H.3.1 Number of shares
1st half 2018
1st half 2017 Full year
2017 Weighted average number: – of issued ordinary
shares 550,000,000 550,000,000 550,000,000 – of treasury shares
(15,870,291 ) (16,076,590 ) (15,806,980 )
Number of shares used to calculate the result per share (A)
534,129,709 533,923,410 534,193,020 – effect
of share options 371,498 446,694 447,642 – effect of free shares
2,913,188 3,191,971 3,072,091 – effect of preference shares
1,118,774 1,063,055 1,303,457
Potential number of
ordinary shares (B) 4,403,460
4,701,720 4,823,190 Number of shares used
to calculate the diluted result per share (A+B)
538,533,169 538,625,130
539,016,210
The calculations were made on the following bases:
- on the assumption of the exercise of
all the options issued and still in issue at 30 June 2018. The
exercise of these options is conditional on the criteria described
in note E.5.1 to the consolidated financial statements at 31
December 2017;
- on the assumption of the acquisition of
all the free shares allocated to staff. During the first half of
2018, 360,575 of the free shares issued in 2014 and 2017 were
acquired by staff and 348,700 new free shares were granted (see
note E.1 above). Details of free shares are given in note E.5.2 to
the consolidated financial statements at 31 December 2017; and
- on the assumption of the acquisition of
all the preference shares allocated to staff and still in issue at
30 June 2018. Conversion of these preference shares is subject to
achieving certain targets and remaining in the Group’s employment
as described in note E.5.3 to the consolidated financial statements
at 31 December 2017.
H.3.2 Earnings per share
1st half 2018
1st half 2017 Full year
2017 Group share: profit/(loss) Net result (€’000)
(C) 39,203 35,460 112,932
Basic earnings per share (€) (C/A)
0.07 0.07 0.21 Diluted earnings per share
(€) (C/(A+B)) 0.07 0.07
0.21 Continuing operations: profit/(loss) Net result
(€’000) (D) 39,199 30,196 108,166
Basic earnings per share (€)
(D/A) 0.07 0.06 0.20 Diluted earnings
per share (€) (D/(A+B)) 0.07 0.06
0.20 Discontinued operations: profit/(loss)
Net result (€’000) (E) 4 5,205 5,116
Basic earnings per share
(€) (E/A) 0.00 0.01 0.01 Diluted
earnings per share (€) (E/(A+B)) 0.00
0.01 0.01
H.4 Detail of consolidated reserves by origin
€'000
30 June 2018 31
December 2017 Hedging contracts (1,156,868 ) (1,182,648
) Share options, free and preference shares and treasury shares
(106,078 ) (96,011 ) Retirement liability (28,060 ) (28,039 )
Deferred tax 99,855 107,224 Retained earnings 843,464
913,368
Total (347,687 ) (286,106
)
Dividend
On 18 April 2018, Getlink SE’s shareholders’ general meeting
approved the payment of a dividend relating to the financial year
ended 31 December 2017, of 0.30€ per share. This dividend was paid
on 26 May 2018 for a total of €160 million.
I. Income tax expense
I.1 Tax accounted for through the income
statement
€'000
1st half 2018
1st half 2017 Full year
2017 Current tax: Income tax (1,913 ) (469 ) (2,724 ) Tax on
dividends – (4,170 ) 8,889
Total current
tax (1,913 ) (4,639 )
6,165 Deferred tax 4,874 (1,300 )
50,369
Total 2,961 (5,939 )
56,534
The tax charge is determined by applying to the half year’s
result the estimated effective tax rate based on internal forecasts
for the full year. The effective tax rate at 30 June 2018 was -8.2%
(30 June 2017: 4.9% excluding dividend tax) as a result of the
impact of the activation of deferred tax in respect of tax
losses.
I.2 Changes to deferred tax during the period
2018 impact on: €'000
At 31 December
2017 published At 31 December
2017 restated income statement
statement of financial position other
compre- hensive income At 30 June
2018 Tax effects of temporary differences related to:
Property, plant and equipment 167,957 167,669 (9,365 ) – –
158,304 ElecLink goodwill (20,392 ) (20,392 ) – – –
(20,392 ) Deferred taxation of restructuring profit (352,353
) (352,353 ) – – –
(352,353 ) Hedging contracts 104,251
104,251 – – (7,376 )
96,875 Other 3,884 3,848 72 3,448 6
7,374 Tax losses 314,073 314,396 14,167 – –
328,563
Net tax assets/(liabilities) 217,420 217,419
4,874 3,448 (7,370 ) 218,371
The impact of the first-time application of IFRS 9 is presented
in the line “Other” in the table above.
J. Events after the reporting period
None.
GETLINK SE: HALF-YEAR FINANCIAL REPORT FOR THE SIX MONTHS TO
30 JUNE
Statutory auditors’ review report on the 2018 half-year
financial information
GETLINK SE: HALF-YEAR FINANCIAL REPORT FOR THE SIX MONTHS TO
30 JUNE
Declaration by the person responsible for the half-year
financial reportSTATUTORY AUDITORS’ REVIEW REPORT ON THE 2018
HALF-YEAR FINANCIAL INFORMATION
This is a free translation into English of the statutory
auditors’ review report on the half-year financial information
issued in French and is provided solely for the convenience of
English-speaking users. This report includes information relating
to the specific verification of information given in the Group’s
half-year management report. This report should be read in
conjunction with, and construed in accordance with, French law and
professional standards applicable in France.
To the Shareholders,
In compliance with the assignment entrusted to us by annual
general meeting and in accordance with the requirements of article
L. 451-1-2 III of the French Monetary and Financial Code
(“Code monétaire et financier”), we hereby report to you on:
the review of the accompanying summary half-year consolidated
financial statements of Getlink SE, for the period from 1 January
to 30 June 2018,
the verification of the information presented in the half-yearly
management report.
These summary half-year consolidated financial statements are
the responsibility of the Board of Directors. Our role is to
express a conclusion on these financial statements based on our
review.
I. Conclusion on the financial statements
We conducted our review in accordance with professional
standards applicable in France. A review of interim financial
information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
professional standards applicable in France and consequently does
not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying summary half-year
consolidated financial statements are not prepared, in all material
respects, in accordance with IAS 34 - standard of the IFRSs as
adopted by the European Union applicable to interim financial
information.
Without qualifying our conclusion, we draw your attention to
note “G.1 Financial liabilities - Adjustment relating to IFRS 9:
Financial Instruments” to the summary half-year consolidated
financial statements related to the first application of IFRS 9 –
Financial instruments.
II. Specific verification
We have also verified the information presented in the half-year
management report on the summary half-year consolidated financial
statements subject to our review. We have no matters to report as
to its fair presentation and consistency with the summary half-year
consolidated financial statements.
Statutory auditors,
24 July 2018
Paris La Défense Courbevoie
KPMG Audit
Mazars
A division of KPMG S.A.
French original signed by
Fabrice Odent Francisco Sanchez
Partner
Partner
DECLARATION BY THE PERSON RESPONSIBLE FOR THE HALF-YEAR
FINANCIAL REPORT AT 30 JUNE 2018
I declare that, to the best of my knowledge, these summary
half-year consolidated financial statements have been prepared in
accordance with applicable accounting standards and present fairly
the assets, financial situation and results of Getlink SE and
of all the companies included in the consolidation, and that this
half-year financial report presents fairly the important events of
the first six months of the financial year, their effect on the
summary half-year consolidated financial statements, the main
transactions between related parties, and a description of the main
risks and uncertainties for the remaining six months of the
financial year.
Jacques GounonChairman and Chief Executive
Officer of Getlink SE24 July 2018
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version on businesswire.com: https://www.businesswire.com/news/home/20180724005998/en/
GetlinkFor UK media
enquiries contactJohn Keefe on + 44 (0) 1303 284491Email:
press@getlinkgroup.comorFor investor enquiries
contact:Jean-Baptiste Roussille on +33 (0)1 40 98 04 81Email:
jean-baptiste.roussille@getlinkgroup.comorFor other media
enquiries contactAnne-Laure Desclèves on +33(0)1 4098
0467Michael Schuller on +44 (0) 1303 288749Email:
Michael.schuller@getlinkgroup.com
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