HALF-YEAR REPORT AS OF JUNE 30, 2018
CONTENTS
Colas’ half-year activity report as of June 30, 2018 (French monetary and financial code L. 451-1-2)
Consolidated interim financial statements as of June 30, 2018
Certification by the person assuming responsibility for the half-year activity report
Statutory Auditors Report on the half-year financial information 2018
HALF-YEAR REPORT AT JUNE 30, 2018
With operations in more than 50 countries on five continents, Colas is a global leader whose mission is to promote infrastructure solutions for sustainable mobility. Through an international network of 800 construction units and 2,000 material production units, it performs some 80,000 construction and maintenance projects each year, including roads, airports and railways, backed by integrated production and recycling activities in most of its business segments.
Key figures
KEY FIGURES (millions of euros) 1st HALF YEAR
2017 1st HALF YEAR
2018 CHANGE
Revenue 5,002 5,361 +7 %a
of which France 2,812 2,855 +2 %
of which International 2,190 2,506 +14 %
Current operating income (136) (174) - 38 M€
Operating income (140)b (174) - 34 M€
Net profit attributable to the Group (88) (130) - 42 M€ (a) +4 % at constant scope and exchange rates. (b) of which €4 M of non-recurrent expenses during the first half year 2017 pertaining to the pre-decommissioning of the Dunkirk site.
Highlights of the half year
• Acquisitions :
o Miller McAsphalt Group (road works and bitumen distribution) in Canada (closing on February 28, 2018);
• Significant contracts secured:
o Pavement rehabilitation on Highways 401 and 404 in Ontario, Canada for €76 million;
o 25-year maintenance contract for the Highway 25 PPP in Ontario, Canada for €58 million;
o Rehabilitation of runways at Anchorage Airport in Alaska, USA for €43 million;
o Installation of a drinking water network near Fairbanks, Alaska, USA for €42 million;
o Birmingham tram extension for Midland Metro Alliance in the United Kingdom for €60 million;
o Works on tracks for Network Rail in the United Kingdom for €48 million;
o Construction of line B of the Angers tramway in France for €63 million;
o Laying of railway tracks and construction of the platform for the T9 Paris-Orly ville tramway in France for €38 million.
Activity per business segment Revenue for the first half of 2018 amounted to €5,361 million, up 7% compared to 2017 and 4% at constant scope and exchange rates. The situation is contrasted between the Roads segment, which is up 11% (+7% at constant scope and exchange rates), and the Specialized Activities segment, which recorded a 7% drop (-7% at constant scope and exchange rates).
REVENUE PER BUSINESS SEGMENT (millions of euros)
1ST HALF 2017 1ST HALF 2018 CHANGE CHANGE AT CSER
Revenue 5,002 5,361 +7 % +4 %
of which Roads Mainland France 1,954 2,060 +5% +5%
of which Roads Europe 669 749 +12% +14%
of which Roads North America 814 1,009 +24% +3%
of which Roads Rest of the World 583 629 +8% +12%
of which Specialized Activities 976 903 -7% -7%
of which Parent Company 6 11 ns ns
Roads Revenue in Mainland France rose by 5% compared to the first half of 2017. All six regional subsidiaries contributed to this increase, in line with market growth. Revenue in Europe increased by 12% compared to the first half of 2017 (+14% at constant scope and exchange rates). Growth remains strong, both in the British Isles and Continental Europe, especially in central Europe. Revenue in North America was up 24% compared to the first half of 2017 (+3% at constant scope and exchange rates), mostly in Canada due to the contribution of Miller McAsphalt (€243 million as of March 1, 2018; the contribution of March to June was posted in the 2nd quarter 2018). In the Rest of the World (International units, excluding Europe and North America), revenue was up 8% compared to the first half of 2017 (+12% at constant scope and exchange rates). Growth was strong in Oceania (+17% at constant scope and exchange rates), boosted by Australia.
Specialized Activities In the first half of 2018, revenue from the Specialized Activities segment totaled €903 million, down 7% compared to the first half of 2017 (-7% at constant scope and exchange rates). This drop is mainly attributable to Networks (-16%) and Railways (-9%), the latter being impacted by a decline in business in France, mainly due to consequences of the situation at French national rail company, SNCF.
Production of materials In France and around the world, Colas is involved in large-scale production of construction materials, including aggregates, backed by an international network of 741 quarries, 568 asphalt plants, 125 emulsion plants and 168 concrete plants. In the first half of 2018, 49 million metric tons of aggregates (+14% compared to the first half of 2017), 16 million metric tons of asphalt mix (+14%), 876,000 metric tons of binders and emulsions (+18%) and 1.3 million cubic meters of ready-mix concrete (+17%) were manufactured.
Profitability Current operating profit in the first half of the year was -174 million euros, compared to -136 million euros in the first half of 2017, down 38 million euros. Current operating income remained stable in the second quarter at €128 million:
• it benefitted from a rising contribution from the Roads segment, after a first quarter impacted by severe weather in most areas,
• on the other hand, it was negatively impacted by the difficulties of the Railway business in France, particularly by the situation at the French national railway company, SNCF.
Income from associates and joint ventures totaled €17 million compared to €33 million at the end of June 2017, due to a smaller contribution from Tipco Asphalt, which experienced a slowdown in business. Net profit attributable to the Group amounted to -€130 million in the first half of 2018, compared to -€88 million in the first half of 2017.
Financial structure Net financial debt as of June 30, 2018 totaled €1,314 million, compared to net financial debt of €570 million at the end of June 2017. The change from December 31, 2017 (net financial surplus of €433 million) includes the acquisition of the Miller McAsphalt Group in Canada, in addition to the impact of the usual seasonal nature of businesses.
Work on hand Work on hand at the end of June 2018 amounted to €9.5 billion, up 18% from the end of June 2017. These figures include 0.8 billion euros pertaining to Miller McAsphalt. At constant exchange rates, work on hand was up 21% (+11% excluding Miller McAsphalt). Work on hand in Mainland France is up 8% while work on hand in international and overseas units is up 25%.
Outlook 2018 revenue is expected to be significantly higher than in 2017 due in part to Miller McAsphalt's contribution. Current operating profit margin is expected to improve, subject to the usual weather conditions and the availability of raw materials.
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French Société Anonyme with share capital of 48,981,748.50 euros Headquarters: 7, place René Clair - 92100 Boulogne Billancourt - France
Registration: R.C.S. Nanterre B552 025 314 A.P.E. 4211Z Fiscal year from January 1 to December 31, 2018
Condensed consolidated financial statements of the
Colas Group
At June 30, 2018
Consolidated Balance Sheet
Consolidated Income Statement
Statement of Recognized Income and Expense
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
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Consolidated balance sheet
In millions of euros Notes
June 30 2018
December 31
2017 Restated (a)
June 30 2017
Property, plant and equipment 3.1 2,406 2,384 2,401
Intangible assets 3.2 117 107 94
Goodwill 3.2 1,118 512 513
Joint ventures and associates 3.3 378 396 380
Other non-current financial assets 3.4 194 197 180
Deferred taxes and non-current tax receivable 164 154 180
Non-current assets 4,377 3,750 3,748
Inventories 610 501 606
Trade receivables 2,795 2,314 2,628
Tax asset (receivable) 858 539 745
Assets on customer contracts 61 197 210
Other current receivables and prepaid expenses 983 617 740
Cash and cash equivalents 397 680 333
Financial instruments 12 14 15
Current assets 5,716 4,862 5,277
Total assets 10,093 8,612 9,025
Share capital and share premium 384 384 384
Retained earnings 2,132 2,070 2,095
Treasury shares (1)
Translation reserve 12 15 73
Consolidated net income / (loss) (130) 328 (88)
Equity attributable to the Group 2,397 2,797 2,464
Non-controlling interests 27 30 30
Equity 4 2,424 2,827 2,494
Non-current debt 6 1,230 126 494
Non-current provisions 5.2 891 884 906
Deferred tax liabilities and non-current tax liabilities 63 60 72
Non-current liabilities 2,184 1,070 1,472
Advances and down-payments received on orders
Current debt 6 83 40 49
Current taxes payable 12 56 18
Trade payables 2,280 2,041 2,101
Liabilities on customer contracts 953 802 772
Current provisions 5.1 244 278 285
Other current liabilities 1,503 1,403 1,459
Overdrafts and short-term bank borrowings 6 397 80 358
Financial instruments 13 15 17
Current liabilities 5,485 4,715 5,059
Total liabilities and shareholders’ equity 10,093 8,612 9,025
Net surplus clash / (net debt) 7 (1,314) 433 (570)
(a) Restated to reflect the impact of the application of IFRS 9
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Consolidated income statement
In millions of euros June 30,
Year
2018 2017 2017
Revenue (1) 8/11 5,361 5,002 11,705
Purchases used in production (2,566) (2,284) (5,319)
Personnel costs (1,641) (1,624) (3,252)
External charges (1,298) (1,192) (2,611)
Taxes, other than income tax (91) (86) (159)
Net depreciation and amortization expenses (192) (176) (407)
Net charges to provisions and impairment losses (17) (3) (88)
Change in production inventories 7 8 1
Other income from operations (2) 314 278 685
Other expenses on operations (51) (59) (193)
Current operating profit 9/11 (174) (136) 362
Other operating income
Other operating expenses (4) (5)
Operating profit (174) (140) 357
Financial income 7 6 15
Financial expenses (20) (14) (29)
Cost of net debt (13) (8) (14)
Other financial income 5 6 14
Other financial expenses (7) (5) (13)
Income tax expenses 10 41 27 (75)
Joint ventures and associates 17 33 61
Net profit/(loss) (131) (87) 330
Net profit/(loss) attributable to the Group (130) (88) 328
Net profit/(loss) attributable to non-controlling interests (1) 1 2
Basic earnings per share from continuing operations (in euros) ns ns 10.04
Diluted earnings per share from continuing operations (in euros) ns ns 10.04
(1) Of which recorded outside of France (including export sales) 2,506 2,190 5,601
(2) Of which reversal of unutilized provisions / impairment losses 82 44 121
Statement of recognized income and expense Net profit/ (loss) (131) (87) 330
Items not reclassifiable to profit/(loss)
Actuarial gains and losses on employee benefits 1 5
Net tax effect of items not reclassifiable to profit/(loss) (2)
Items reclassifiable to profit or loss
Change in cumulative translation adjustment of controlled entities (4) (37) (85)
Net change in fair value of financial instruments used for hedging purposes
3 3 (3)
Net tax effect of items reclassifiable to profit/(loss) (2) 1
Share of reclassifiable income and expense of joint ventures and associates
1 (7) (17)
Net income recognized directly in equity (1) (41) (101)
Total recognized income and expense (132) (128) 229
Attributable to the Group (130) (128) 228
Attributable to non-controlling interests (1) 1
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Consolidated statement of changes in equity
millions of euros
Share capital
and share premium
Retained earnings
Translation reserve
Consolidated net
profit/ (loss)
Capital and
reserves
Minority interests
Total
At December 31, 2016 384 1,825 116 355 2,680 33 2,713
Variation in treasury shares
1 1 1
Prior-year profit allocation
355 (355)
Dividends paid
(90) (90) (1) (91)
Other transactions with shareholders
Net profit/(loss)
328 328 2 330
Income (expenses) recognized directly in equity
1 (101) (100) (1) (101)
Net profit/(loss) and income (expenses) recognized directly in equity
1 (101) 328 228 1 229
Changes in scope of consolidation
(3) (3)
Impact of the application of IFRS 9 (22) (22) (22)
At December 31, 2017 (2) 384 2,070 15 328 2,797 30 2,827
Variation in treasury shares
(1) (1) (1)
Prior-year profit allocation
328 (328)
Dividends paid
(268) (268) (2) (270)
Other transactions with shareholders
Net profit/(loss)
(130) (130) (1) (131)
Income (expenses) recognized directly in equity (1)
2 (3) (1) (1)
Net profit/(loss) and income (expenses) recognized directly in equity
2 (3) (130) (131) (1) (132)
Changes in scope of consolidation
At June 30, 2018 384 2,131 12 (130) 2,397 27 2,424
(1) Detail:
Group Minority
interests Total
Exchange differences (3) (3)
Fair value restatement on financial instruments 3 3
Actuarial gains (losses) on employee benefits 1 1
Deferred taxes based on these items (2) (2)
Total income (expenses) recognized directly in equity (1) (1)
(2) Restated to reflect the impact of the application of IFRS 9
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Consolidated cash flow statement
June 30,
2018
December
31, 2017
June 30,
2017
In millions of euros
Consolidated net profit/(loss) (131) 330 (87)
Adjustments for:
Joint ventures and associates (17) (61) (33)
Dividends received from associates 28 53 28
Dividends received from unconsolidated companies (1) (2) (1)
Charges to/(reversals of) depreciation, amortization, impairment & non-current provisions
193 395 166
Gains and losses on asset disposal (9) (40) (9)
Miscellaneous non-cash charges
Cash flow after cost of net debt and income tax 63 675 64
Cost of net debt 13 14 8
Income tax expense (41) 75 (27)
Cash from operations 35 764 45
Income tax paid (50) (86) (48)
Changes in working capital related to operating activities (553) (205) (717)
Cash flows from operating activities (a) (568) 473 (720)
Purchase price of property, plant and equipment and intangible assets (171) (443) (162)
Proceeds from disposals of property, plant and equipment and intangible assets
19 88 24
Net liabilities related to property, plant and equipment and intangible assets
(92) 12 (103)
Sub-total (244) (343) (241)
Acquisitions and disposals of subsidiaries:
Acquisitions of subsidiaries (644) (157) (101)
Disposals of subsidiaries 23 1
Net liabilities related to non-consolidated companies and other investments
65 63
Other effects of changes in scope of consolidation (cash of acquired and divested companies)
1 (10) 1
Sub-total (643) (79) (36)
Other cash flows related to investing activities (change in loans, dividends received from non-consolidated companies):
Dividends received from unconsolidated companies 1 2 1
Changes of other non-current financial assets 5 (18)
Sub-total 6 (16) 1
Cash flows from investing activities (b) (881) (438) (276)
Capital increases/(reductions) paid by shareholders & non-controlling interests and other transactions between shareholders
(1) (1) 1
Dividends paid to parent company shareholders (268) (90) (89)
Dividends paid to minority interests (2) (1) (3)
Change in current and non-current debt 1,134 (34) 350
Cost of net debt (13) (14) (8)
Other cash flows related to financing activities
Cash flows from financing (c) 850 (140) 251
Effect of foreign exchange fluctuations (d) (1) (12) 3
Net change in cash and cash equivalents (a+b+c+d) (600) (117) (742)
Net cash at the beginning of the year 600 717 717
Net cash and cash equivalents at the end of the year (see note 7) 600 (25)
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Notes to the consolidated financial statements
Notes
1. Significant facts of the first half year
2. Significant accounting principles and policies
3. Non-current assets
4. Information on equity
5. Provisions current and non-current
6. Current and non-current financial debt
7. Net financial surplus (indebtedness)
8. Analysis of revenue and other income from ordinary activities
9. Operating profit
10. Tax
11. Segment reporting
12. Off balance sheet commitments
13. Related parties disclosures
14. Main exchange rates
Declaration of compliance The interim condensed consolidated financial statements of Colas and its subsidiaries (the “Group”) as of June 30, 2018 were prepared in accordance with IAS 34, “Interim Financial Reporting”, an IFRS standard as endorsed by the European Union. Because they are condensed, these financial statements do not include all the information required under IFRS standards, and should be read in conjunction with the full-year financial statements of the Colas Group for the year ended 31 December 2017. They were prepared in accordance with the standards issued by the IASB including: IFRSs, IASs (International Accounting Standards), supplemented by the interpretations made by the former International Financial Reporting Interpretations Committee ("IFRIC"), now called IFRS Interpretation Committee or issued by the agency that preceded the Standing Interpretation Committee ("SIC"), approved by the Union European and applicable to that date. At June 30, 2018, the Group has not applied standard or interpretation by anticipation, not approved by the European Union. The accounts present in millions of euros (unless otherwise stated): the balance sheet, the income statement, the statement of recognized income and expense, the consolidated statement of changes in equity, the consolidated cash flow statement and the notes. They are presented compared with consolidated accounts at 31 December 2017 and the consolidated condensed to June 30, 2017.
NOTE 1. SIGNIFICANT FACTS
1.1 Significant facts of the first half of 2018
• In line with the memorandum of understanding signed on 30 August 2017, Colas completed the acquisition of the
entire share capital of the Miller McAsphalt group on 28 February 2018. The Miller McAsphalt group is a major
player in road construction and bitumen distribution in Canada, with a particularly strong presence in Ontario. Over
the last three years, it has generated average annual sales of approximately CAD 1.3 billion, with an average
operating profit margin of 7% over the three last years. It employs 3,300 people. The provisional purchase price
paid on the completion date was CAD 913 million, equivalent to € 585 million. The acquisition was financed for an
amount of € 410 million by debt. The contribution to the result of the acquired business has been registered for 4
months of operation to end June 2018.
• On 26 March 2018, Bouygues Construction and Colas announced the acquisition of Alpiq Engineering Services,
which specializes in hard and soft services in construction and in energy, industrial and transport infrastructures.
Alpiq employs nearly 7,650 people and generated sales of approximately CHF 1.7 billion in 2017, mainly in
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Switzerland (57%), Germany (24%) and Italy (12%). The acquisition was completed on the basis of an enterprise
value of CHF 850 million (CHF 700 million for Bouygues Construction, CHF 150 million for Colas Rail).
1.2 Significant facts subsequent to 30 June 2018
▪ On 31 July 2018, closing occurred on the acquisition of Alpiq Engineering Services, following clearance from the
European and Swiss competition authorities on 11 July 2018. A provisional purchase price of € 144 million was paid to
acquire the entire share capital by Colas Rail.
NOTE 2. SIGNIFICANT ACCOUNTING PRINCIPLES AND POLICIES
2.1 Preparation principles of the financial statements
Condensed interim consolidated accounts of the Group Colas include the financial statements of Colas SA and its
subsidiaries, as well as investments in associated entities, joint ventures and joint activities. They are presented in millions of euros, currency in which the majority of the Group's operations is treated, and comply with the recommendations of the Autorité des Normes Comptables (ANC), the French national accounting standard-setter, nr. 2016-01 of December 2, 2016 concerning the presentation of financial statements. They were approved for publication by the Board of Directors on August 28, 2018. The Condensed interim consolidated financial statements for the half year 2018 have been prepared in accordance with IFRS standards and principles, based on historical cost, with the exception of certain financial assets and liabilities, measured at fair value where this is required by IFRS. They are presented in comparison with the financial statements for the year ended December 31, 2017 and at the end of June 2017. Condensed interim consolidated accounts specific assessment methods are as follows:
• For interim financial statements, consolidated income tax is determined according to the principles defined by the IAS
34 standard. The income tax of each company is taken into account in respect of the period based on the best estimate
of the average annual tax rate expected for the full year (except for holding companies determined according to actual
tax at end of period).
• Expenses accounted for in the period in respect of the employee benefits are prorated charges estimated for the year,
calculated on the basis of actuarial assumptions and forecasts to December 31, 2017. A drop of 70 basis points of the
discount rate (1.50 % at December 31, 2017) would lead to an increase in the provision for employee retirement
indemnities of EUR 25 million. This impact would be apprehended in the statement of recognized income and expense.
2.2 New IFRS Standards, amendments and interpretations As of June 30, 2018, the Group applied the standards, interpretations, accounting principles and methods that were applied in the financial statements of fiscal year 2017, with the exception of mandatory changes laid down by the IFRS standards mentioned below, applicable as from January 1, 2018.
• Main IFRS standards, amendments and interpretations in force within the European Union, of mandatory or applicable application by January 1, 2018:
▪ IFRS 9 financial instruments:
On 24 July 2014, the IASB issued a new standard on financial instruments intended to replace most of the current IFRS
pronouncements on this subject, in particular IAS 39. The new standard, which was endorsed by the European Union
on 22 November 2016, is applicable from 1 January 2018. The Group has decided not to early adopt this standard.
The Group has applied the classification, measurement and impairment principles of IFRS 9 retrospectively with effect
from 1 January 2018, with no restatement of prior period comparatives on first time application. The hedge accounting
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principles of IFRS 9 will also be applied by the Group with effect from 1 January 2018, using a prospective approach
in accordance with the standard.
The impacts of applying this standard with effect from 1 January 2018 are not material.
▪ IFRS 15: Revenue from Contracts with Customers
On 28 May 2014, the IASB issued a new standard on revenue recognition intended to replace most of the current IFRS
pronouncements on this subject, in particular IAS 11 and IAS 18. The new standard was endorsed by the European
Union on 29 October 2016 and is applicable from 1 January 2018. The Bouygues group has not early adopted IFRS
15, which it will apply retrospectively with effect from 1 January 2018; the 2017 figures presented in 2018 will also be
restated to reflect the impacts of IFRS 15.
The impacts of applying this standard with effect from 1 January 2018 are not material.
• Standard effective within the European Union and mandatorily applicable from 1 January 2019
▪ IFRS 16: leases
On 13 January 2016, the IASB issued IFRS 16, “Leases”. IFRS 16 will replace IAS 17, along with the associated
IFRIC and SIC interpretations, and for lessees will end the distinction previously made between operating leases
and finance leases. Lessees will be required to account for all leases with a term of more than one year in a manner
similar to that currently specified for finance leases under IAS 17, involving the recognition of an asset for the rights,
and a liability for the obligations, arising under the lease. New standard, which has been endorsed by the European
Union, is applicable from 1 January 2019. The new standard, endorsed by the European Union on 31 October 2017
is applicable from 1 January 2019.
The Group has not early adopted IFRS 16, and for first-time application has elected the retrospective approach with
presentation of a comparative year.
The impact of IFRS 16 is currently under review. Given the expected changes in lease accounting and various uncertainties (including determination of the term of some leases), the detailed information on leases as provided in the notes to the consolidated financial statements for the year ended 31 December 2017 is not indicative of the actual impact that IFRS 16 might have on those financial statements.
• Essential interpretation issued by the IASB but not yet endorsed by the European Union:
• IFRIC 23: Uncertainty Over Income Tax Treatments
On 7 June 2017, the IFRS Interpretations Committee issued IFRIC 23, which is mandatorily applicable from 1 January 2019 and has not yet been endorsed by the European Union. IFRIC 23 clarifies the accounting treatments used to recognize the fiscal consequences of uncertainties relating to income taxes. The Group has not elected early adoption of IFRIC 23, and is reviewing the potential consequences of applying it.
2.3 Seasonal nature of business
Revenue and operating income figures are clearly marked by the strong seasonal nature of Colas’ business, which is reflected in the low level of activity during the first half year due to poor weather conditions. The amplitude of the phenomena varies from year to year. In compliance with IFRS principles, interim revenue is recognized in the same conditions as it is at year end.
.
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NOTE 3. NON- CURRENT ASSETS 3.1 – Property, plant and equipment
Land and buildings
Plant and equipment
Assets in course of construction
and advance payments
TOTAL
Net carrying amount
At June 30, 2017 925 1,382 94 2,401
At December 31, 2017 930 1,374 80 2,384
At June 30, 2018 923 1,407 76 2,406
3.2 - Intangible assets and Goodwill
Concessions, patents, and other rights
Other Total intangible assets
Goodwill
At June 30, 2017 62 32 94 513
At December 31, 2017 64 43 107 512 507 At June 30, 2018 97 20 117 1,118
3.3 – Investments in joint ventures and associates
Share in equity Goodwill Goodwill
impairment Carrying amount
At June 30, 2017 308 110 (38) 380
At December 31, 2017 319 115 (38) 396
At June 30, 2018 303 115 (40) 378
Main companies
Share in equity Net carrying
amount
Main associated companies
Tipco Asphalt 98 3
Mak Mecsek 36 2
Other 23 1
Joint ventures
Miscellaneous companies 146 11
Total 303 17
3.4 – Other non-current financial assets
Non- consolidated investments
Other non-current
financial assets
Total gross value
Allowance Carrying amount
At June 30, 2016 83 160 243 (63) 180
At December 31, 2016 81 177 258 (61) 197
At June 30, 2017 80 172 252 (58) 194
NOTE 4. INFORMATION ON EQUITY
4.1 Composition of share capital
Colas’ share capital as of June 30, 2018 amounted to 48,981,748.50 euros.
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It is comprised of 32,654,499 shares with a nominal value of 1.50 euros each, ranking pari passu (although nominative shares owned for a period of more than two years by the same shareholder grant double voting rights).
4.2 Change during the year: None since January 1st, 2018.
NOTE 5. CURRENT AND NON-CURRENT PROVISIONS 5.1 – Current provisions
Losses on completion
Works risks and costs of
closing down sites
Customer warranties
(Short Term)
Site reclamation
(Short Term)
Other Total
At January 1, 2018 92 73 41 11 61 278
Exchange differences 1 1
Transfers (1) (1)
Changes in scope of consolidation (1) (1)
Allocation for the year 23 7 3 10 43
Reversal of utilized provisions (24) (4) (2) (1) (11) (42)
Reversal of unutilized provisions (21) (10) (2) (1) (34)
At June 30, 2018 70 64 40 10 60 244
5.2 - Non-current provisions
Employee benefits
Litigation & legal matters
Customer warranties
(Long Term)
Site reclamation
(Long Term)
Others Total
At January 1, 2018 426 196 66 156 40 884
Exchange differences 1 (1)
Transfers 1 1 2
Changes in scope of consolidation 2 (1) 1
Actuarial gains/losses in equity (1) (1)
Allocation for the year 11 15 8 4 3 41
Reversal of utilized provisions (4) (7) (3) (6) (4) (24)
Reversal of unutilized provisions (7) (4) (1) (12)
At June 30, 2018 433 200 66 153 39 891
Breakdown of main provisions
June 30,
2018 December
31, 2017
Length-of-service awards 108 105
Retirement indemnities 232 228
Pensions 93 93
Employee benefits 433 426
Litigation with clients 41 39
Litigation with employees 25 27
Litigation with welfare bodies 83 85
Litigation with tax authorities 19 18
Litigation with other bodies 1 1
Other litigations 31 26
Litigation and legal matters 200 196
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NOTE 6. CURRENT AND NON-CURRENT FINANCIAL DEBT
June 30, 2018 June 30, 2017
Bank loans (medium/long-term) 1,223 486
Finance leases 6 7
Other financial debts (long-term) 1 1
Non-current debt 1,230 494
Portion of long-term debt at less than one year 83 49
Overdrafts and short-term borrowings 397 358
Current debt 480 407
NOTE 7. NET FINANCIAL SURPLUS (NET DEBT)
December 31, 2017
Cash flows
Scope Conversion differencie
s
Fair values Other impacts
June 30, 2018
Cash and cash equivalents 680 (294) 14 (3) 397
Overdrafts and short-term bank borrowings (80) (306) (13) (1) 3 (397)
Net cash 600 (600) 1 (1)
Non-current financial liabilities 126 1,102 12 (10) 1,230
Financial liabilities (party less than a year) 40 31 12 83
Net financial instruments 1 1
Gross debt 167 1,133 12 2 1,314
Net financial surplus (net debt) 433 (1,733) 1 (13) (2) (1,314)
NOTE 8. ANALYSIS OF REVENUE AND OTHER INCOME FROM ACTIVITY
June 30, 2018 June 30, 2017
Sales of products 951 801
Rendering of services 169 175
Construction contracts 4,241 4,026
Revenue 5,361 5,002
Other income from ordinary activities - -
Total revenue 5,361 5,002
NOTE 9 – OPERATING PROFIT
June 30, 2018 June 30, 2017
Current operating profit (174) (136)
Other non-current income (a) - -
Other non-current expense (a) - (4)
Operating profit (174) (140)
(a) Expenses related to the refined products activity, which essentially correspond to the fixed
costs of the SRD subsidiary in Dunkerque, whose production is stopped.
NOTE 10 – TAX
Evaluation of the income tax for interim period Income tax of every consolidated entity is calculated by applying to the result before taxes for the interim period the average effective rate estimated for the annual period.
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Breakdown
June 30, 2018 June 30, 2017
Current income tax 36 25
Deferred income tax 9 4
Tax adjustments or exemptions, withholding taxes (4) (2)
Net tax expense 41 27
NOTE 11. SEGMENT REPORTING IFRS 8 requires operating segment definition based on internal reporting reviewed by the entity's chief operating decision-maker to make decisions about resources to be allocated to the segment and to assess its performance.
11.1 Determination of Group’s segments The Group’s operating activities are organized as follows: • Roads Mainland France includes the road activities in mainland France;
• Roads Europe includes road activities in Europe (excluding France);
• Roads North America includes road activities in the United States and Canada;
• Roads Rest of the world includes road activities in Africa, North Africa, Indian Ocean, French overseas departments
and Territories, Asia/Australia and Middle-East;
• Specialized Activities include specialized activities for France and elsewhere around the world: Waterproofing,
Railways, Safety and signaling, Networks.
• Holding company includes the Head Office of Colas.
11.2 Business segment information
Roads
Mainland Roads
Europe Roads North
America Roads Rest of the world
Specialized Activities
Holding company
Consolidated
June 30, 2018
Income from ordinary activities 2,060 749 1,009 629 903 11 5,361
Current operating profit (31) (11) (97) 20 (57) 2 (174)
Net profit (16) (3) (69) 19 (63) 1 (131)
June 30, 2017
Income from ordinary activities 1,954 669 814 583 976 6 5,002
Current operating profit (32) (10) (94) 10 (26) 12 (140)
Net profit (27) (5) (55) 23 (35) 12 (87)
11.3 Other indicators
June 30, 2018 June 30, 2017
Cash flow after cost of net debt and income tax (I) 63 64
Net acquisitions / disposals of tangible and intangible assets (II) (152) (138)
Free Cash-Flow (I) + (II) (89) (74)
Cash from operations 35 45
EBITDA (a) (47) (1)
(a) EBITDA = Current operating profit + net depreciation and amortization expenses + net charges to provisions and impairment losses – reversal of unutilized provisions / impairment losses
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NOTE 12. CONTINGENT LIABILITIES Off-balance sheet commitments at 31 December 2017 do not significantly change.
NOTE 13. RELATED PARTY DISCLOSURES
Related parties identity Parties with ownership interest: Bouygues and its subsidiaries and associates companies Joint-ventures and joint activities: Carrières Roy and certain non-significant joint-ventures Associates: Tipco Asphalt, Mak and some non-significant associates Other related parties: Colas Foundation, and other non-consolidated companies
Details of transactions with related parties
Expenses Income Receivables Payables
2018 2017 2018 2017 2018 2017 2018 2017
Parties with ownership interest 30 29 36 60 59 63 273 63
Joint-ventures and joint activities 25 28 48 77 45 59 44 51
Associates 2 13 10 5 6 9 11
Other related parties 14 21 31 31 22 15 13 14
Total 69 80 128 178 131 143 339 139
Maturity under one year 337 137
Maturity from 1 to 5 years 2 2
Maturity above 5 years - -
NOTE 14. MAIN EXCHANGE RATES USED FOR TRANSLATION Convention: 1 euro = x local monetary units
Country Currency Rate June 30, 2018
Average rate June 30, 2018
Rate June 30, 2017
Average rate June 30, 2017
Europe
Croatia Croatian Kuna 7.3795 7.4203 7.4148 7.4521
Denmark Danish Kroner 7,45 7.4472 7.4371 7.4368
Great Britain British Pound 0.8766 0.8797 0.8752 0.8589
Hungary Forint 323.02 313.2344 307.09 309.4494
Poland Zloty 4.2876 4.2128 4.2125 4.2732
Czech Republic Czech Republic Koruny 25.739 25.4741 26.172 26.8316
Switzerland Swiss Franc 1.1554 1.171 1.087 1.0756
North America
United States US Dollar 1.1613 1.2135 1.1199 1.079
Canada Canadian Dollar 1.5307 1.5453 1.4827 1.4412
Other
Australia Australian Dollar 1.561 1.5683 1.4705 1.432
Morocco Dirham 11.0732 11.2597 10.9147 10.7593
Thailand Baht 37.951 38.4234 38.009 37.5289
