2015 Results

EuroBusiness Media (EBM): Groupe Eurotunnel SE reports full-year results for 2015, Jacques Gounon hello. You are the Chairman and CEO of Eurotunnel. If we look at the figures, sales are up 5%, EBITDA reached €542 million and your net profit reached €100 million, so, would it be fair to say that this was a good year for Eurotunnel? Jacques Gounon: Yes, indeed, a very good year because we had strong performances. If we consider the EBITDA, which is a KPI for this business, the increase since 2009 has been +67% and we are in line with the track record. So all in all we have the possibility to propose to the next AGM a significant increase of our dividend. We are committed to a growing dividend policy, and since the first dividend it’s five times more dividend that we are serving to our shareholders. EBM: Eurotunnel delivered the best traffic figure ever despite the attacks in Paris and the states of emergency in Paris and Brussels. Freight delivered a record year and passenger business reached a 52.6% market share. Nevertheless, the activity continued to suffer from migrant pressure. Where do we stand on this topic? Jacques Gounon: 2015 has been a challenging year for all the countries and all the companies. What we can say is that we have a robust business model and we are going through these difficulties with historical records, including Eurostar which is really doing a very good job, and you know that they have introduced new train sets which means that we have potential growth for the future. The migrant issue is definitively fixed. Just to remind you, we are not in charge of the border controls which are the responsibilities of both states. Having said that, I pay tribute to the French Home Office Minister, Mr. Cazeneuve and his counterpart, Mrs. Theresa May, because they delivered very strong support for the business, for the company, for our staff who have reacted very rapidly. So definitively we are out of these disruption issues and we are looking to the positive future we have in front of us. EBM: Despite what happened on the security side are you still pushing ahead with your investments and what do you foresee as far as the evolution of traffic is concerned? Jacques Gounon: Investment is absolutely key in our business. We never sacrificed either investment or maintenance because we want to keep our Fixed Link and our rail freight businesses at the edge of technology, at the edge of the quality of service. Having said that, we have invested on the Fixed Link €77 million and we will continue to do that. We have just inaugurated the new so-called Terminal 2016, which is a huge extension of the room we have in order to deal with an increased number of trucks. Our target for 2020 is 2 million trucks and 3 million cars on our shuttles. We believe that we can deliver this incredible target and due to the British economy, which is quite robust and quite solid and quite positive, whatever the comments are, we think that investment is the key success factor in order for us to be the key leader on the market. EBM: What are your comments on Europorte which just celebrated its 10 years of activity with its oldest client and which has contributed positively to Group results with €307 million in revenues last year? Jacques Gounon: Quality of service is absolutely key and really this is the moto of this Rail Freight business which is performing well, which we started from scratch a few years ago and which is now one quarter of our Group’s sales. Very successful business, and due to the decision made by States at the Paris conference on the environment, the famous COP 21, we believe that there is a very positive future for this kind of business and we are very proud of our achievements. EBM: You are working on a project called ElecLink, for electrical interconnection. What is your update today on this project? Jacques Gounon: ElecLink is quite an exciting piece of infrastructure, a new business for the company we are working on closely with a partner in a JV. We got of course the regulator’s approval which is absolutely key for this kind of business. We are close to signing the construction contracts, with some very strong and key suppliers, so it’s really in line with our business plan and we think that it will generate a new added value and a new contribution for our Group in the years to come. EBM: You have delivered a cash flow increase which now reaches €157 million and you have worked on simplifying the structure of your debt. What’s next? Jacques Gounon: First of all, keep in mind that the debt service is not an issue for us; it’s €263 million this year, slightly declining, but we want to have such debt service really in line with our expectation, which means that - after [taking into account] the fact that we signed an agreement in order to withdraw 2 monolines, which are guarantors for the debt for some creditors -, depending of course on the market conditions, our intention is to continue to have the best quality of debt regarding our possibilities in this field. EBM: And finally, you have announced an EBIDTA guidance of €560 million for 2016 and €605 million for 2017; so, all in all, the outlook is positive? Jacques Gounon: Yes, I would say that we are still on the same trend, which is of course an increased profitability of the business in order to serve debts and to serve dividends for our shareholders; to secure the business for our staff; and beyond that, due to the fact that our expectation is of a growing traffic and without any exceptional items, we do think that we have the possibility to deliver more, year after year. What is absolutely key is the fact that we are managing this company with long-term views. We are perhaps better than state bonds because we are delivering a positive dividend and something that is very predictable, which are the cash flows and which are the profitability of the Eurotunnel Group. EBM: Jacques Gounon, Chairman and CEO of Eurotunnel thank you Jacques Gounon: Thank you.