Rising numbers fail to please Bollore investors

Bolloré Logistics

On March 24, France’s Bollore reported annual results that did little to boost investor confidence in its stock, which continues to hover around two-year lows, having fallen 20% since the turn of the year.

Reported revenues received a fillip from favourable currency trends, rising to €10.8bn – but at constant exchange rates, and on a recurring basis, they fell 2%, primarily as a result of a poor performance in its more cyclical oil logistics unit, itself subject to the headwinds battering the oil producing industry.

Excluding oil logistics, the turnover for fiscal 2015 rose by “4% at constant scope and exchange”, the group said.

“On a reported basis, currency fluctuations, primarily impacting the transportation and logistics, and communication activities, had a positive effect of €364m on the group’s turnover,” it added.

The company highlighted the good performance of transportation and logistics (+4%), communication (+5%), and electricity storage and solutions (+9%), and added that group EBITDA rose 9% to €1.1bn, which implies a respectable EBITDA margin of 10.2%.

EBIT similarly rose 8% to about €700m.

With net debt at €4.2bn, its trailing net leverage stands at 3.8x. The group noted that at the end of 2015 the net debt to equity ratio was 38%, compared to 18% at the end of 2014.

The increase in net debt to €4.2bn from €1.8bn one year earlier was attributed to the increased stake in Vivendi – from 5.1% to 14.4%, which represented “an additional investment of close to €3bn” – as well as the disposal “of 22.5% of Havas for €590m following Bollore’s exchange offer in the first half of 2015 to support the share’s liquidity and reduce its holding in Havas to 60%”.

Consolidated net income stood at €727m, up 81% from €401m in 2014.

Granular information was not provided on the performance of each unit, but core cash flows at group level are rising, and fully cover heavy capital requirements.

Bollore said that the improved performance of the transportation and logistics activities, its main revenue driver, reflected “the strength of freight forwarding globally and port terminals in Africa”.

Meanwhile, the oil logistics business fared relatively well “in distribution in France and in the logistics and depots business”, while the communication division was boosted by advertising agency Havas.

Finally, it highlighted a high level of expenditure in electricity storage and solutions.

The board will propose in early June the payment of a dividend of €0.06 per share (including an interim dividend of €0.02 paid in 2015), payable in cash or shares.

Author: Alessandro Pasetti

Source: Transport Intelligence, 6th March 2016