NORBERT DENTRESSANGLE
HALF-YEAR FINANCIAL REPORT
30 JUNE 2014
I - ACTIVITY REPORT OF THE FIRST HALF OF 2014
Our first half of 2014 took place in a European economic environment that had
improved overall and was favourably influenced by the dynamics of the UK
economy and the recovery of Spain.
The activity's performance of activity, 2 190M€ by the Group that is to say
+13.4% gross growth compared with N-1 and +5.8% growth at constant scope and
exchange, is satisfactory.
In this more favourable environment, the Logistics activity has maintained
strong organic growth (8%) boosted by the growth represented in 2014 by the
Asos UK contract and the start of our Danone business in Russia.
Transport remained the focus of organic growth at +4% with a return to growth
in all of our activities with the exception of Bulk and General Cargo.
Our current operating income rose by 22% (18% before taking the CICE into
account) to reach 72.4 M€ and our operating profit before goodwill increased
by 19% to 65.4 M€ (3% EBITA margin), reflecting overall proper operation in
all sectors and some nice gains.
The Air & Sea Freight Forwarding Division is significantly ahead as against
the previous year (1M€). Causes of substantial operating losses in 2013 (China
and Spain) are resolved with the perimeter of Daher in France being consistent
with our expectations and the Russian perimeter being significantly higher.
Finally, the pressure on transport margins in France remains a subject
requiring significant attention with France having a rather sluggish economy
and regulatory transport instability (Eco tax/transit tax) causing problems in
terms of reference prices.
The half-year saw us easily integrate the British Bulk Pulverent company
Hopkinson in April (£4M/25 vehicles/44 tanks) and 9 French MGF warehouses in
June and July (26 M€ /272 employees).
1. CONSOLIDATED RESULTS AS OF 30TH JUNE 2014
1.1 Consolidated income statement as of 30th June 2014
Realised Realised Variation
in thousands of €uros 30-June-13 30-June-14 R14/R13
TURNOVER 1,932,120 2,190,501 13%
EBITDA 112,077 119,191 6%
5.8% 5.4%
Current operating income 59,585 72,478 22%
3.1% 3.3%
EBITA (Res. Op. before acquisition differences) 55,096 65,455 19%
as % of turnover 2.9% 3.0%
Amortisation of Customer Relations -3,166 -5,023
Depreciation of goodwill / negative goodwill 1,375
EBIT (Operating income) 51,930 61,807 19%
as % of turnover 2.7% 2.8%
Financial Result -12,292 -16,423 -34%
PROFIT before corporation tax and equity method 39,638 45,384 14%
as % of turnover 2.1% 2.1%
Corporation taxes -8,181 -11,337
CVAE -6,560 -6,523
Equity Method -39 -20
elimination of Minority -348 -3,145
Group share of NET INCOME 24,510 24,359 -1%
as % of turnover 1.3% 1.1%
As of 30th June 2014, the consolidated turnover of the Norbert Dentressangle
Group was 2 191M€ , an increase of 13.4% compared to the turnover for the 1st
quarter of 2013 that is to say 5.8% at comparable scope and exchange rates.
TOTAL TURNOVER END June GROUP 2014 N-1 AT GLOBAL DIFFERENCE VAR DIFFERENCE
BUSINESS BUSINESS ON NET RATE DIFFERENCE AT PERIMETER CHANGE
A CONSTANT CONSTANT CONSTANT
PERIMETER
& CHANGE
GROUP 2,190,501 2,140,893 2,023,677 13.4% 5.8% 6.5% 1.1%
Interdivisional turnover (58,162) (58,085) (54,001)
TRANSPORT 1,066,746 1,059,356 1,018,048 5.6% 4.1% 0.7% 0.8%
LOGISTICS 1,068,492 1,026,196 946,677 19.2% 8.4% 9.1% 1.7%
AIR & SEA 95,842 95,842 98,294 50.5% -2.5% 57.5% -4.5%
CORPORATE 17,583 17,583 14,659 22. 20.0% 0.0% 2.8%
Transport generates 1 067M€ during this first half of the year, up 5.6%,
including 4.1% at comparable exchange rates and scope. This means that the
organic growth of the transport activity was perpetuated during the second
quarter of 2014 at a comparable level (4.0%) to the 1st quarter of 2014
(4.1%). These figures generally reflect a less difficult economic environment
for this activity than the one we faced in 2013.
It is the same for the Logistics Division which saw a turnover of 1 068M€ in
the first half of the year and exceeded that of the Transport activity for the
first time. This level of activity represents a cumulative increase of 19.2%
compared with the first half of 2013, including 8.4% at comparable scope and
exchange rates, a strictly identical performance between the 1st and 2nd
quarter of 2014. From 1st January 2014, these figures retrospectively record
the exit of the Saudi joint venture from the consolidation scope, with our
shares being sold to the Saudi minority in June 2014.
Finally, in the first half of 2014 the Air & Sea Freight Forwarding activity
posted a turnover of 96M€an increase of over 50% compared to the turnover
recorded in the first half of 2013. This increase is mainly explained by the
full-year consolidation of the activities undertaken by the Daher group in
2013, in France and Russia. However, organic erosion, at comparable exchange
rates and scope in the first half of 2014, is limited to -2.5%, reflecting an
increase in the 2nd quarter of 2014.
The distribution of turnover (net of intercompany) in the first half of 2014
is as follows:
COUNTRY CONTRIBUTIONS TOTAL COUNTRY %
FRANCE 845,892 38.6%
GREAT BRITAIN 639,877 29.2%
SPAIN 276,003 12.6%
NETHERLANDS 58,508 2.7%
ITALY 121,970 5.6%
BELGIUM 45,096 2.1%
CHINA 11,170 0.5%
POLAND 26,414 1.2%
IRELAND 16,826 0.8%
ROMANIA 19,908 0.9%
SWITZERLAND 17,825 0.8%
UNITED STATES 11,301 0.5%
PORTUGAL 16,533 0.8%
RUSSIA 44,987 2.1%
GERMANY 14,223 0.6%
SAUDI ARABIA 0 0.0%
LUXEMBOURG 5,350 0.2%
SLOVAK REPUBLIC 6,042 0.3%
CZECH REPUBLIC 3,945 0.2%
CHILE 2,673 0.1%
BRAZIL 1,015 0.0%
INDIA 992 0.0%
SRI LANKA 1,270 0.1%
UKRAINE 1,461 0.1%
HONG-KONG 321 0.0%
MOROCCO 900 0.0%
TOTAL 2,190,501 100%
The half-year has seen the following trends:
- the increase in the Air & Sea Freight Forwarding activity which now accounts
for over 4% of the group's consolidated turnover,
- the weight of the Logistics Division, which now represents 49% of the total,
- the group's top 3 countries in terms of activity remain: France (39%); Great
Britain (29%); Spain (13%),
- the cessation, retroactive as of 1st January, of our activities in Saudi
Arabia.
EBITDA (Earnings Before Interest Taxes Depreciation and Amortisation), was
119.2M€ for the 1st half of 2014. Regardless of the 6.4% increase compared
with EBITDA for the first half of 2013 (when turnover rose by more than 13%),
this EBITDA represents a margin of 5.4% of turnover, compared with 5.8% in the
first half of 2013.
Given a level of depreciation and amortisation below the budget, which
reflects deferred CAPEX from the 1st and 2nd half of the year, current
operating income was at a satisfactory level at 72.5M€, that is to say 3.3% of
the turnover. This current operating income rose 22% compared to the first
half of 2013 (59.6M€ or 3.1% of turnover), higher than that of the turnover.
In the first half of 2013, the group recorded 6.7M€ of restructuring costs, a
significant amount but it is still below the first half of last year (7.7M€).
Given these restructuring costs, the operating profit before goodwill (EBITA)
in the first half of 2014 was 65.5M€ or 3.0% of turnover, up 19% compared with
the first half of 2013 (55.1M€ or 2.9% of turnover). The increase in operating
income is higher than the turnover during the 1st half of 2014. However, it is
worth recalling the budgetary challenge of the 2nd half of 2014 which, as in
the previous year, should help generate about 60% of the annual EBITA.
In addition to the depreciation of "customer relationships" which represented
3.5M€ in the first half of the year, we observed exceptional amortisation of
1.5M€ on a recognised intangible asset in 2012 and on the occasion of the
resumption of Nova Natie activities in Anvers. This extraordinary depreciation
is justified by the level of losses, still substantial, from these activities
in 2014.
In addition, we recorded in "badwill" a negative technical goodwill on the
Russian joint venture equivalent to 3.1M€ and "entry fees" for 1.9M€. Finally,
an acquisition "badwill" of 0.2M€ was also recorded for the Sri Lankan joint
venture with John Keels.
Given this, the EBIT (Earnings Before Interest and Taxes) totalled 61.8M€
representing 2.8% of turnover, up 19% compared with the EBIT in the first half
of 2013.
The bottom line for the period is a cost of -16.4m€ greater than the costs
recorded in the first half of 2013 (-12.3M€) due to the introduction in late
2013 of bank resources, particularly additional bonds; the result also
recorded significant losses related to the devaluation of the Ukrainian
currency for -1.2M€.
The profit before corporation tax and equity amounted to 45.4M€ for N-1 at
39.6M€. The cost of corporation tax in the first half of 2014 represents
-11.3M€. This tax cost corresponds to an "Effective Tax Rate" excluding CVAE
of 29%, a rate that remains higher than that recorded last year (24.7%). These
higher taxes are explained in particular by higher corporation tax rates in
France and the significance of tax losses not activated for Belgium in
particular.
Given this corporation tax burden, a CAVE amounting to -6.5M€ and taking into
account minority interests for 3.1M€, the Group's net income share in the 1st
half of 2014 is 24.4M€, strictly comparable to the net income in the first
half of 2013 (24.5M€). The increase in operating income in the first half of
2014, although higher than the increase in turnover, is offset by higher
financial expenses and heavier taxation, which will not be allowed to increase
the Group's net income for the first half of 2014.
1.2 - Consolidated balance sheet
As of 30th June 2014, equity including minority interests) is 607M€. It rose
more than 37M€ compared with the 1st half of 2014 given:
- a net income share for the group for the first half of the year at +24.4 M€,
- the annual dividend payment of -15.6M€,
- actuarial reduction of British pension fund deficits for +26.8 M€,
- other positive impacts are related to conversion differences, tax effects
and revaluations of put options on minorities.
As of 30th June 2014, the non-current assets are 1 347M€. They are relatively
stable compared to 31st December 2013 (1 355M€) despite the inclusion of
positive conversion differences for 18M€ related to the revaluation of the £
relative to the €.
As of 30th June 2014, the working capital requirement (WCR) was 87.5M€. This
is a need for traditional financing during the year. This need is greater than
our forecast. The difference of 26 M€ is half explained by less funding on
capital providers and the other half by operating WCR. The decrease in
operating WCR is the result of greater difficulties relating to getting paid
on time by our customers; problems faced mainly in France by three operating
divisions. While the deadline for payment of our suppliers is under control.
The net level of investment recorded in the first half of 2014 was below our
expectations; the group accrued fewer additional financial debts. Thus,
despite a WCR higher than the budget, the net financial debt on the balance
sheet as of 30th June 2014 is 551M€. In the 1st half of 2014 the group
invested 3M€ in purchasing activity (Hopkinson in the UK and part of the
goodwill in MGF, the balance being resumed in July 2014). As a reminder, this
is still significantly higher than that achieved at the end of last year
(456M€), this development being directly linked to the cyclical production of
cash within the group.
Provisions (long-term and short-term) total 171M€ compared with over 211M€ as
of 31st December 2013. The decrease in the amount of these provisions is
mainly explained by the actuarial reduction of the deficits of the 2 British
pension funds.
1.3 - Cash Flow Statement
Cash flow generated from operating activities over the 1st half of 2014 shows
consumption of -2.5M€ compared to a release of cash in the 1st half of 2013 in
the order of +10M€. This variance is justified by WCR consumption up by 7M€
compared with the previous year. In addition, disbursements from pension funds
are higher this year due to different "phasing" and the payment of an
"unfunded pension" to a former director of TDG. This unbudgeted payment will
limit future disbursements which the group was committed to.
The investment cash flow in the rises 1st half of 2014 is -56.9M€, down 13M€
relative to the 1st half of 2013. This flow notably includes acquisitions
for-3M€ in the 1st half of 2014 (acquisition of Hopkinson, which joined the
Bulk BU in the UK and partial redemption of the goodwill to MGF, which will
continue in July 2014). Last year we invested 31 M€ in external growth. The
operational CAPEX (including changes in WCR on capital providers) amounted, in
the 1st half of 2013, to 54M€, an amount substantially greater than the
operational CAPEX posted in the 1st half of last year (39M€).
Cash flow from financing reflects a period of deleveraging of 14M€ while in
the 1st half of 2013, the flow of additional funding was 17M€.
Net changes in cash and cash equivalents in the 1st half of 2014, including
the impact of foreign exchange, -71M€ compared with the 1st half of 2013 at
-44M€. As of 30th June 2014 the group had available cash amounting to more
than 318M€.
1.4 - Bank and bond ratios and covenants
Financial ratios measured for the 1st half of 2014 are characterised by
- the gearing ratio was 95% (excluding goodwill amortisation),
- a leverage ratio 2.1x greater than as of 31st December 2013 as in each year
and as explained by the seasonality of the group's cash flow. This ratio
naturally remains far from the maximum limit set out in the bank covenants
(3.5x),
- the ROCE (EBITA before tax on average capital employed for the period) is
13%.
Considering the current average share price (between 95 and 100€, that is to
say -25% relative to the highest of the year), the group's multiple current
stock valuations are about 10x EBITA and 5.9x EBITDA.
This means that these multiples are still below the majority of our major
comparables
- between 12.3 and 13.7x EBITDA 2014 for freight forwarders such as DSV, K+N,
Panalpina,
- Stef is currently valued at 6.3x EBITDA and 12x EBIT 2014,
- U.S. freight-forwarders (Expeditors, C.H. Robinson) between 11.6 and 13.6x
EBITDA.
1.5 - Operational performance of the three Divisions
Variation
30/06/2013 30/06/2014 2014 /
in k€ 2013
LOGISTICS:
Total Turnover 896,536 1,068,492 19.2%
- Intra-group invoicing -3,482 -4,699
Turnover net of inter company business. 893,054 1,063,793
Res. Current Operations 34,724 42,215 22%
% cons. turnover 3.9% 4.0%
Res. Operational (EBITA) 31,848 37,698 18%
% cons. turnover 3.6% 3.5%
TRANSPORT:
Total Turnover 1,010,320 1,066,746 5.6%
- Intra-group invoicing -33,382 -34,661
Turnover net of inter company business. 976,938 1,032,085
Res. Current Operations 25,249 29,445 17%
% cons. turnover 2.6% 2.9%
Res. Operational (EBITA) 23,820 26,949 13%
% cons. turnover 2.4% 2.6%
AIR & SEA:
Total Turnover 63,687 95,842 50%
- Intra-group invoicing -1,747 -1,333
Turnover net of inter company business. 61,940 94,509
Res. Current Operations -388 818 311%
% cons. turnover -0.6% 0.9%
Res. Operational (EBITA) -572 810 242%
% cons. turnover -0.9% 0.9%
Total CONSOLIDATED GROUP:
Consolidated Turnover 1,932,120 2,190,501 13.4%
Res. Current Operations 59,585 72,479 22%
% cons. turnover 3.1% 3.3%
Res. Operational (EBITA) 55,096 65,455 19%
% cons. turnover 2.9% 3.0%
During the 1st half of 2014, the group's three Business Divisions saw turnover
increase through organic growth and the contribution of external growth. The
current operating profitability has also recovered significantly by a greater
degree than the growth in turnover for the three divisions. Thus
- Within the Logistics Division, the half-year turnover increased by 19%
compared to 2013 and the COI by 22%. The current operating margin for the 1st
half of 2014 was 4.0%,
- The turnover for the Transport Division increased by 5.6% compared to the
1st half of 2013; its operating margin rose by 17% to 2.9%,
- Finally, the Air & Sea Freight Forwarding Division saw its sales increase
significantly for the 1st half of 2014 to +50%; its current operating margin
became positive at 0.9% of this turnover.
1.6 - Logistics Division
The 2nd quarter of 2014 for the Logistics Division was once again marked by an
increase in its turnover expressed in Euros: 546 M€ as against 460 M€ in the
2nd quarter of 2013, an increase of +18.6%.
Which consolidates the increase in turnover in the 1st half of the year 1.1bn
€as against 0.9bn € in 2013 (+19%).
At constant scope and exchange rates, organic growth in the 2nd quarter was
8.4%, or +42 M€.
This growth is half explained by turnover of 19.7 M€ in Russia in the 2nd
quarter of 2014 (country started in July 2013), and half by the commercial
dynamism of the two major countries, the UK (+6.5% at constant exchange rates)
and France (+4.0%), but also Italy (+12.7% excluding Fiege) and Spain (+64%
excluding Fiege).
The shares of the company in a joint venture in Saudi Arabia started in June
2013 having been sold to the local partner, the 2014 turnover was cancelled.
1.6.1 - The Division's EBITA
The first half of 2014 benefited from a change in the consolidation method for
the Spanish and Romanian JVs: 100% consolidated since 1st January; they were
previously consolidated at 50%.
In the first half of the year, the Division's EBITA is 37.7 M€ (3.5% return)
as against 31.8 M€ in 2013 (3.6%) and within budget.
Significant increases compared with 2013 come from
- Italy where the income is greater with new clients including H&M; the rest
coming from higher volumes from GUCCI, non-contractual transactions rebilled
to METRO with a higher profit margin on departure and control of the cost
structure following the acquisition of Fiege in 2013;
- Spain where the income is greater thanks to the new client AMAZON started in
March 2014 but also due to the scalability of the INDITEX activity started in
March 2013. The 1st half of 2013 was also marked by non-recurring
restructuring costs.
However, France posted income that was slightly down compared with 2013, the
half of the year was very satisfactory with increased profitability as against
the budget.
The UK posted income that was slightly down compared with 2013, but in line
with budget expectations: managing to offset the costs arising from the
bankruptcy of SIT-UP TV in March 2014.
In Belgium the situation is always different from one entity to another. The
Welkenraedt site, which showed an encouraging recovery since the beginning of
the year, has been very negatively impacted by a problem with its main client.
Operations in Antwerp are still heavily in deficit, still representing the
Division's black point in terms of profitability The decline in volumes
combined with the loss of customers in the Fresh activity (- 10% of turnover
compared with 2013) annihilates income from restructuring operations since
April 2013.
The Netherlands has suffered from the departure of two customers and the loss
of the contribution from these two files to the subsidiary's income; in 2013,
these two contracts represented annual turnover of 23 M€, that is say 17% of
the subsidiary's total turnover.
However, thanks to controlled operations and significant volumes on all sites,
almost all sites operated at full capacity in the first half of the year- the
Netherlands had a very good half with returns above their budget.
The Russian JV, despite turnover well below the budgetary target due to the
unfavourable exchange rate, the operational costs of the sites listed below
expectations and business development with relatively small external
customers, shows profitability in line with the defined plan.
Fiege & MGF (2013 and 2014 acquisitions)
The result from Fiege activities in Spain and Portugal is positive despite the
empty surface areas that have not been fulfilled. In Italy, the result is also
positive despite significant losses in the pharmaceutical sector.
In June 2014, the first 4 points of the 8 sites bought with MGF were bought by
ND Logistics in France for a turnover of 0.6 M€ over the month. The other 4
sites will follow in July 2014.
1.7 - Transport Division
Generally speaking, the 1st half of the year was satisfactory for the
Transport Division in terms of the level of turnover and the operating profit,
both of which are over budget and an improvement over the previous year. Note
the positive evolution of the French BUs, as well as the decline of the UK
Transport and Distribution BU.
Compared with last year, all Transport BUs evolved positively.
The Distribution BUs have shown growth in both France and Spain, compensating
for the significant deterioration in the UK Transport & Distribution BU.
1.7.1 Evolution of sales
Turnover in the 1st half of 2014 amounted to 1 067 M€ which represents an
increase of 57 M€ and +5.6% vs. last year, continuing the positive trend
initiated in the 4th quarter of 2013 (+2.4%) and the 1st quarter of 2014 (+
5.4%).
The only BUs having seen a decrease are the Bulk BU - 6% (mainly the Pulverant
business in France) and the France Transport Solutions BU - 2.3% due to the
loss of significant customers in 2013 having an effect on 2014.
However, the total of the three Distribution BUs increased by more than 9% and
the Central Europe BU by 18%.
1.7.2 Income
The EBITA in the first half of 2014 amounted to 26.9 M€ (2.5% of turnover) and
an increase of 3.1 M€ compared with the first half of 2013.
As shown in the table below, the increase in EBITA compared to the previous
year is due to sales growth, net of a slight deterioration in the net profit
margin and an increase in structures (linked to the extension of the scope in
Spain and the increase in activity, particularly in the distribution sector),
on the one hand, and the increase in CICE and lower restructuring costs on the
other hand.
Analysis of the results by BU highlights that only two BUs are lagging behind
their goals: the Bulk BU and Transport & Distribution UK, the first due to the
significant decline its turnover on the Pulverant France activity and the
second due to the difficult start of the new national Crick hub in the
distribution business.
In the Bulk BU, the trend is clearly improving.
On the other hand, the distribution BUs in France and in the Iberian Peninsula
are still delivering strong results and the Transport Solutions France and
Volume BUs are meeting their budgets.
1.7.3 The business
In summary, the pace of new contracts in the second quarter accelerated as
against 2013 and compared with the 1st quarter to be above our objectives.
The rate impact is positive but it is limited to +2.1 M €.
Overall, the transport activity saw a positive level of organic growth in the
1st half of 2014 +4.2% compared with 2013 and +5.6% including acquisitions.
Our growth is based mainly on a return to the growth of strategic "Top 30"
customers.
Strategic files in the Key PL sector such as Tata Steel, Aggregate and Coca
Cola are again showing strong growth at over 10% in 2014.
With regard to our product mix, we are maintaining solid growth in our Red
Inside business at +4.0%, we are continuing to strongly develop our domestic
Distribution activities with +12.6% and our Red Europe activity is maintaining
sustained growth of +7.0% like the Key PL activity (+7.2%). The Complete Batch
activity has resumed growth with +3.2%.
1.7.4 Evolution of the vehicle fleet
As of 30th June 2014, the Group's vehicle fleet is 7,376 vehicles (including
Logistics with 1 340), 10 771 semi-trailers (including Logistics with 2 097).
These figures include vehicles belonging to JV in Russia.
The vehicle fleet is down by 1.5% compared with June 2013.
94% of the vehicles Euro V and Euro VI.
Our vehicle fleet is the newest and least polluting on the market.
This change in the mix of our transport means is fully aligned with the
strategy defined by the Division and that is to focus on subcontracting for
international transport, the regular charter fleet being increased from 29% in
January 2013 to 35% in June 2014.
1.8 - Freight Forwarding Division Air & Sea
As of the end of June, the Overseas Division counted 677 employees (compared
to 725 as of 31st December 2013), distributed over 53 offices locations in 14
countries.
The Division's turnover was 95.8 M€ the first six months of 2014, up 50%
compared with 2013 due to the acquisition of Daher. At constant scope and
exchange rates, the decrease is, however, only 2.5% compared with 2013,
despite the loss of two significant contracts in France related to the
acquisition of Daher.
The average profit margin in the Division totalled 20.7% in the first six
months of 2014. It is a significant improvement compared to 2013 (16.2%) with
the Division enjoying good profit margins in France and Russia driven by
customs activities.
The EBITA cumulated over the first six months was +818 K€ and -388 K€ over the
same period in 2013 (an improvement of 1.2 M€ compared with last year).
The difference compared with 2013 is mainly due to
- China: activity balanced in the first half of the year as against a loss in
the same period in 2013
- Spain: an activity close to balance in the first half of the year as against
a significant loss in the same period in 2013
- France
- Russia: a very strong activity with a very positive EBIT
The Division (and notably France) responds to a growing number of calls for
tenders for blue chip customers. However, the conversion rate remains low with
large customers hesitating to entrust traffic to NDO at the first
consultation. In contrast, France won numerous spot volumes. In the United
States, the contract with the main clients has been renewed for the remainder
of 2014 without a new call for tenders.
The structure of NDO is still being strengthened at commercial and legal
level.
Several IT projects have also moved forward: back office, front office and
B.I.
1.9 - HUMAN RESOURCES
Numbers generally increased from 13% between June 2013 and June 2014 due to
the growth of the logistics activity and external acquisitions made in the
period.
Commission of
International
Workforce at Group as a Transport Logistics Transport
the end of June whole Division Division Division
2014 Group
Total workforce 37552 13275 23557 677 61
2. OTHER INFORMATION
2.1 - Major transactions with related parties
No significant change in the nature of transactions with related parties took
place with respect to 31st December 2013 (see note (q) of the annex in the
condensed interim financial statements and note (z) of the annex to the
consolidated accounts of the year ended 31st December 2013).
2.2- Significant events during the first six months of the financial year and
their impact on the interim financial statements
In addition to the events described above in this report, and the references
to subsequent events appearing in the Annex to the interim financial
statements (see III, v).); no significant events took place during the first
six months of the year which would have had an impact on the interim financial
statements.
2.3 - Principal risks and uncertainties
As of 30th June 2014, the risk factors as identified at the end of fiscal year
2013 have not changed. The principal risks and uncertainties to which the
Group may be exposed in the second half of 2014 are those detailed in Chapter
2 of Reference Document 2012.
3. FORECAST FOR THE 2nd HALF OF THE YEAR AND THE WHOLE OF 2014
In an economic context perceived as less favourable than what we experienced
in 2013, the Group is expected to continue to grow its turnover and
profitability during the 2nd half of 2014.
The organic growth of the Logistics Division, significant in the 1st half of
2014, will probably be lower this year-end, taking into account unfavourable
"base effects" for the rest of the year.
Given its financial resources, the Group will remain attentive to external
growth opportunities, especially those outside of Europe for the logistics
activity.
The Transportation Division is continuing to restore its margins in an
unfavourable environment, because of its exposure to the French market.
Finally, for the Air & Sea Freight Forwarding activity, 2014 will remain a
year of transition, dedicated to strengthening the structure, teamwork and
installing common tools.
With the strength of its position in its markets, its diversified portfolio
and its flexible decentralised organisation, Norbert Dentressangle has the
strengths to address a context that still lacks visibility.
II - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. CONSOLIDATED INCOME STATEMENT
In K€ Note 30/06/2014 30/06/2013
TURNOVER b 2 190 501 1 932120
Other purchases and external costs (1 368 918) (1 189 139)
Staffing costs (670 780) (603 724)
Taxes, and similar payments (23 191) (22 438)
Depreciation and amortisations (57 100) (57 591)
Other operational expenses (income) 467 (811)
Income from sales of current assets 1 342 1 012
Restructuring costs (6 655) (7 696)
Capital gains or or losses on real estate (210) 3 363
OPERATING INCOME BEFORE GOODWILL AND 65 455 55 096
AMORTISATION OF CLIENT RELATIONS (EBITA)
Amortisation of allocated Customer Relations (5 023) (3 166)
Badwill 1 375
OPERATING INCOME (EBIT) c 61 807 51 930
Financial income d 2735 1 992
Financial expenses d (19 158) (14 285)
THE GROUP'S PRE-TAX PROFIT 45 384 39 638
Income tax e (17 860) (14 741)
Share of income from associated companies (20) (39)
NET PROFIT 27 504 24 858
Non-controlling interests 3 145 348
THE GROUP'S NET PROFIT 24 359 24 510
INCOME PER SHARE g
basis for the year's profit 2.50 2.56
diluted for the year's profit 2.46 2.54
2. COMPREHENSIVE INCOME STATEMENT
K€ 30/06/2014 30/06/2013
NET INCOME 27 504 24 858
Exchange differences 7 028 (8 271)
Gains and losses related to revaluation of financial (1 508) 7 480
instruments
Tax effect on financial instruments and exchange 456 (3 519)
differences
Miscellaneous 70
Subtotal recyclable elements in the profit 5 976 (4 240)
Actuarial gains and (losses) on employee benefits 26 844 17 545
Tax effect (5 357) (4 036)
Miscellaneous (90)
Subtotal of non-recyclable elements in the profit 21 487 13 419
OTHER COMPREHENSIVE INCOME 27 463 9 179
TOTAL COMPREHENSIVE INCOME 54 967 34 037
Share of non-controlling interests in other global 3 106 358
income
The Group's share in the overall profit 51 861 33 679
3. CONSOLIDATED BALANCE SHEET
ASSETS
In K€ Note 30/06/2014 31/12/2013
Goodwills h 610 975 599 951
Intangible assets h 128 845 133 128
Tangible assets i 524 093 532 849
Participations in related companies j 2 907 2 877
Other non-current assets j 30 583 33 146
Deferred taxes on assets 49 218 53 347
NON-CURRENT ASSETS 1 346 621 1 355 298
Stocks 14 377 14 049
Clients k 860 613 775 879
Current tax assets k 22 503 17 621
Other receivables k 196 305 141 743
Other current assets
Cash and cash equivalents l, o 329 571 396 622
CURRENT ASSETS 1 423 369 1 345 914
TOTAL ASSETS 2 769 990 2 701 212
LIABILITIES
In K€ Note 30/06/2014 31/12/2013
Share Capital m 19 672 19 672
Issue premiums m 19 077 19 077
Exchange differences m (15 330) (22 464)
Consolidated reserves m 531 575 456 182
Income over the year 24 359 70 100
THE GROUP'S EQUITY SHARE 579 353 542 567
Non-controlling interests 28 116 27 595
EQUITY 607 469 570 162
Long-term provisions n 152 770 190 583
Deferred tax liabilities 73 345 72 846
Financial debts of more a year o 761 963 742 884
Other non-current liabilities 18 917 17 451
NON-CURRENT LIABILITIES 1 006 995 1 023 764
Short-term provisions n 18 544 20 605
Financial liabilities of less than a year o 106 757 102 507
Other current liabilities 12 413 9 330
Bank overdrafts l, o 11 513 7 200
Suppliers 605 089 601 548
Current tax liabilities 9 841 11 528
Other debts 391 369 354 568
CURRENT LIABILITIES 1 155 526 1 107 286
TOTAL LIABILITIES 2 769 990 2 701 212
4. TABLE OF CONSOLIDATED CASH FLOWS
K€ Note 30/06/2014 30/06/2013
Net income 24 359 24 510
Depreciation and provisions 59 802 61 832
Net financial expenses related to financing 14 004 10 607
activities
Income from minority interests & related 3 166 387
companies
Income tax (income) expenses 17 860 14 741
EBITDA 119 191 112 077
Gains or losses on sales of fixed assets (1 042) (4 343)
Other adjustments 126 (900)
Income taxes paid (24 418) (17 579)
Gross operating margin for self-financing after 93 857 89 255
tax paid
Variation in stocks (233) 1 021
Current customer receivables - (72 363) (53 687)
Current supplier liabilities - 5 309 (9 071)
Operating WCR (67 287) (61 737)
Social receivables and liabilities (1 000) (5 488)
Tax receivables and liabilities (10 130) (4 722)
Other receivables and debts (3 297) (2 217)
Non-operating WCR (14 427) (12 427)
Operating WCR (81 714) (74 164)
Changes in Pension Funds (14 668) (5 173)
CASH FLOW GENERATED BY THE ACTIVITY (2 525) 9 918
Sales of tangible and intangible fixed assets 22 916 28 024
Acquisitions of intangible and tangible fixed (61 534) (69 636)
assets
Receivables and payables on fixed assets (15 427) 2 971
Sales of financial fixed assets 113 103
Acquisition of financial fixed assets (327)
Net cash flow from acquisitions and sales of p (2 688) (31 308)
companies
NET CASH FLOW FROM INVESTMENT ACTIVITIES (56 947) (69 846)
AVAILABLE CASH FLOW (59 472) (59 928)
Dividends paid (15 744) (14 575)
Net issue of borrowings 9 321 40 711
Increase/Decrease in capital 2 480
Stock (758) 260
Other financial Assets/Liabilities 6 961 (1 302)
Net financial expenses related to financing (14 041) (10 607)
activities
CASH FLOWS FROM FINANCING OPERATIONS (14 261) 16 967
Exchange differences during the conversion of 2 369 (1 380)
cash
Variation in cash (71 364) (44 341)
Cash and cash equivalents on opening 389 421 247 041
Cash and cash equivalents on closing 318 057 202 700
Variation in cash (closing - opening) (71 364) (44 341)
5. STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
In K€ Capital Bonuses Undistributed Other Result Conversion Own Non-controlling TOTAL
reserves reserves reserves equity interests Equity
in the
Group
AS OF 31ST DEC. 19 672 18 891 455 443 (28 028) 69 672 (18 103) 517 547 3 251 520 798
2012
Allocation of 69 672 (69 672)
income
Dividends paid (14 384) (14 384) (191) (14 575)
Net income for 1st 24 510 24 510 348 24 858
half of 2013
Other 13 504 4 031 (8 366) 9 169 10 9 179
comprehensive
income elements
Capital increase 2 608 2 608
(Purchases) sales 4 128 132 132
of own shares
Benefits related 222 222 222
to share-based
payments
Changes in scope
Other changes 291 291 (368) (77)
AS OF 30TH JUNE 19 672 18 891 524 752 (23 869) 24 510 (26 469) 537 487 5 658 543 145
2013
Allocation of
income
Dividends paid (4) (4) (4)
Net income for 2nd 45 590 45 590 (91) 45 499
half of 2013
Other (55 650) 2 197 4 005 (49 448) (124) (49 572)
comprehensive
income elements
Capital increase 186 (69) 117 105 222
(Purchases) sales 321 8 174 8 495 8 495
of own shares
Benefits related 497 497 497
to share-based
payments
Impact of changes 22 047 22 047
in the
consolidation
method
Other changes (167) (167) (167)
AS OF 31ST 19 672 19 077 469 680 (13 498) 70 100 (22 464) 542 567 27 595 570 162
DECEMBER 2013
Allocation of 70 100 (70 100)
income
Dividends paid (15 586) (15 586) (158) (15 744)
Net income in 1st 24 359 24 359 3 145 27 504
half of 2014
Other 20 966 (610) 7 134 27 490 (39) 27 451
comprehensive
income elements
Capital increase
(Purchases) sales 107 (866) (759) (759)
of own shares
Benefits related 626 626 626
to share-based
payments
Changes in scope 700 700 (2 427) (1 727)
Other changes (44) (44) (44)
AS OF 30TH JUNE 19 672 19 077 546 549 (14 974) 24 359 (15 330) 579 353 28 116 607 469
2014
III ANNEX TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF 30TH JUNE 2014 - IFRS STANDARDS
1. GENERAL INFORMATION ABOUT THE ISSUER
Name: Norbert Dentressangle.
Registered office: 192 avenue Thiers - 69457 LYON Cedex 06 - France.
Legal form: Public limited company with a Management and Supervisory Board,
subject to the provisions of the Commercial Code.
The parent company of the Group is Norbert Dentressangle.
It is subject to French law.
The Company is listed on the Eurolist Compartment B
The Norbert Dentressangle Group's accounts were established by the Management
Board on 29th July 2014.
The Group's businesses are Transport, Logistics and the Air & Sea division.
There is no marked seasonality in either the Transportation activity, the
Logistics activity or the Air & Sea activity at the end of June 2014 in terms
of turnover.
2. ACCOUNTING POLICIES
2.1 Statement of compliance and basis of preparation
Pursuant to European Regulation 1606/2002 of 19th July 2002 on international
standards, the condensed consolidated financial statements of the Norbert
Dentressangle Group as of 30th June 2014 have been prepared in accordance with
International Financial Reporting Standards (IFRS) applicable on that date and
as approved by the European Union on the date of preparation of these
financial statements.
These standards are available on the European Commission's website at the
following address (http://ec.europa.eu/internal_market/accounting/ias/index_fr.htm).
The condensed consolidated financial statements for the first half of 2014
have been prepared in accordance with IAS 34 "Interim Financial Reporting".
They do not include all information and annexes included in the annual
financial statements. Therefore, it is advisable to be read them in
conjunction with the consolidated financial statements of 31st December 2013.
The Group's consolidated financial statements for the year ended 31st December
2013 are available upon request at the company's headquarters, or on the
website http://www.norbert-dentressangle.com.
Some standards are subject to changes or interpretations that could be
retrospective. These developments could cause the Group to edit the
consolidated financial statements according to IFRS standards.
The consolidated financial statements as of 30th June were prepared in Euros,
the Group's functional currency. They are presented in thousands of Euros.
2.2 Changes in accounting policies
The accounting policies applied in the preparation of financial statements are
identical to those used in the preparation of the consolidated financial
statements for the year ended 31st December 2013, complemented by the
following new standards and interpretations applicable from 1st January 2014
- IFRS 10: consolidated financial statements
- IFRS 11: partnerships
- IFRS 12: disclosure of interests in other entities
- IAS 28 R: Shares in associated companies
- IAS 32 amendment financial instruments
- IAS 36 amendment: disclosure of the recoverable amount of non financial
assets
- IAS 39 amendment: novation of derivatives and maintenance of hedge
accounting
None of these amendments or new standards have a material impact on the
Group's net income and financial position, or on the presentation of the
accounts and the financial reporting.
In this specific case, the application of IFRS 10 and 11 as of 1st January
2013 not having a significant impact on the accounts for 2013, these accounts
presented for comparison purposes are not the subject of reprocessing.
In addition, the Group has not adopted any standards, interpretations and
amendments early or in the process of being adopted by the European Union and
whose application is compulsory after 31st December 2014.
- IFRIC 21 Duties and Taxes
2.3 Estimates and judgments
Preparing its financial statements, the Group is required to make estimates
and assumptions that may affect the financial statements. The Group reviews
its estimates and judgments on a regular basis to take into account past
experience and other factors deemed relevant to the economic conditions.
Depending on the evolution of these different assumptions or conditions, the
amounts appearing in the future financial statements may differ from current
estimates.
The major elements of the financial statements that may be subject to
estimates are as follows:
- impairment of receivables,
- impairment of goodwill the assessment of which is based on assumptions of
future cash flows, discount rates, terminal values based on long-term growth
rates,
- valuation of stock option plans, equity warrants and performance shares
granted to employees and directors whose assessment is based on a number of
actuarial assumptions,
- valuation of assets and liabilities related to pension liabilities through
the inclusion of actuarial assumptions in effect on the balance sheet date
(discount rate, future salary rates and inflation)
- valuation of customer relationships,
- valuation of financial instruments,
- deferred taxes and income tax expenses.
The financial statements reflect the management's best estimates based on the
information available on the date of the financial statements.
They have been prepared according to the historical cost convention, except
for certain items such as financial assets and liabilities that are measured
at fair value.
The financial statements for each company in the Group are prepared in
accordance with the accounting principles and regulations in force in their
respective countries. They are restated to comply with the consolidation
principles in force within the Group.
2.3.1. Features specific to the preparation of the interim financial
statements:
- Income tax:
In the context of the interim financial statements, income tax (current and
deferred) is determined by applying the average effective rate estimated for
the entire year to the pre-tax income.
- Pensions and other employee benefits:
Pension costs and other long-term employee benefits are calculated on the
basis of an extrapolation of actuarial valuations performed at the end of last
year. Where appropriate, these assessments are adjusted for discounts,
settlements or other significant non-recurring developments during the period.
3. NOTES ANNEXED TO THE INTERIM FINANCIAL STATEMENTS AS OF 30TH JUNE 2014
3.1. Events in the period
To use a more appropriate name vis-à-vis the business partners and to
communicate its core business more readily, the name of the Freight Forwarding
division has changed to the Air & Sea division.
The Logistics activity in Saudi Arabia in partnership with Danone has been
sold; the entity is removed from the consolidation scope.
3.2. Sector information
In M€ Transport Logistics Air & Sea Elimination Total
of inter
sectoral
operations
and various
turnover
Turnover
30/06/2014 1 067 1 068 96 (40) 2 191
30/06/2013 1 010 896 64 (38) 1 932
Inter-sector turnover
30/06/2014 (34) (5) (1) (40)
30/06/2013 (33) (3) (2) (38)
In M€ Transport Logistics Air & Sea Total
Operating income (EBIT)
30/06/2014 25.8 34.9 1.1 61.8
30/06/2013 23.0 29.5 -0.6 51. 9
3.3. Operating income
Passage from EBITDA to Operating income (EBIT):
In K€ 30/06/2014 30/06/2013
EBITDA 119 191 112 077
Depreciation and amortisation (57 100) (57 591)
Depreciation and reversals of provisions (1) 3 365 610
Amortisation of customer relationships (5 023) (3 166)
Badwill 1 375
OPERATING INCOME (EBIT) 61 807 51 930
(1) The 3365 K€ is divided into the items on the consolidated income statement
as follows 3 443 K€ in "Other purchases and external charges" (1 093) K€ in
"Other operational expenses (income)", 1641 K€ in "Restructuring costs" and
(626) K€ in "Personnel expenses".
3.4. Financial result
In K€ 30/06/2014 30/06/2013
Interest and similar financial income 2 583 1 932
Income from the sale of investment instruments 1 1
Other financial income 113
Interest from pension funds and other 38 59
provisions
TOTAL FINANCIAL INCOME 2735 1 992
Interest and assimilated costs (15 408) (12 025)
Negative exchange differences (1 216) (283)
Other financial expenses (239) (233)
Interest from pension funds and other (2 295) (1 744)
provisions
TOTAL FINANCIAL EXPENSES (19 158) (14 285)
TOTAL (16 423) (12 293)
3.5. Income tax
In K€ 30/06/2014 30/06/2013
Profit before tax 45 384 39 638
CVAE (6 523) (6 560)
Profit before tax and after CVAE 38 861 33 078
Permanent differences 3 430 3 761
Income tax (11 337) (8 181)
Effective tax rate 29.2% 24.7%
3.6. Distribution of dividends
In K€ 30/06/2014 30/06/2013
Dividends paid by the parent company on 3rd 15 586 14 376
June 2014
3.7. Average number of shares
30/06/2014 30/06/2013
Average number of shares issued 9 836 241 9 836 241
Average number of shares (98 212) (254 476)
Average number of shares 9 738 029 9 581 765
Equity warrants 140 000 60 000
Share subscription options(*) 25 610 0
Average number of diluted shares 9 903 639 9 641 765
* On the balance sheet date, the Group believes it is more likely than not
that the options will be exercised contrary to previous years.
3.8. Goodwill and intangible assets
In K€ Goodwill Patents, Other Total
licenses intangible
assets
Gross value
Value as of 31st December 605 451 47 900 157 298 810 649
2013
Acquisitions 1 998 385 2 383
Sales (7) (7)
Exchange differences 9 989 286 3 683 13 958
Changes in scope and 1 035 59 (2 015) (920)
reclassifications
Value as of 30th June 2014 616 475 50 235 159 351 826 062
Depreciations, amortisations
Value as of 31st December (5 500) (40 189) (31 881) (77 570)
2013
Allocations (1 972) (5 252) (7 224)
Recoveries 7 7
Exchange differences (206) (1 208) (1 414)
Changes in scope and (142) 100 (43)
reclassifications
Value as of 30th June 2014 (5 500) (42 501) (38 240) (86 241)
Net value as of 31st December 599 951 7 711 125 417 733 079
2013
Net value as of 30th June 610 975 7 734 121 111 739 821
2014
As of 30th June 2014, the allocation of the purchase price to the identifiable
assets and liabilities in the logistics and transportation activities acquired
from the Fiege Group is complete. No significant adjustments were recorded
during the period.
The allocation of the acquisition price concerning the Daher Group's Air & Sea
activities is in progress and is subject to change.
3.9. Tangible fixed assets
In K€ Land and Transport Other Total
buildings equipment tangible
assets
Gross value
Value as of 31st December 2013 170 111 532 406 336 215 1 038 732
Acquisitions 6 155 26 291 32 378 64 823
Sales (570) (47 905) (5 122) (53 597)
Exchange differences 1 653 3 263 2 988 7 904
Changes in scope and 595 2 882 (5 448) (1 971)
reclassifications
Value as of 30th June 2014 177 945 516 936 361 018 1 055 898
Depreciations, amortisations
Value as of 31st December 2013 (80 296) (208 492) (217 095) (505 883)
Allocations (3 835) (31 743) (19 463) (55 041)
Recoveries 370 26 565 4 722 31 656
Exchange differences (375) (1 110) (1 531) (3 016)
Changes in scope and 5 166 312 482
reclassifications
Value as of 30th June 2014 (84 130) (214 614) (233 060) (531 805)
Net value as of 31st December 2013 89 815 323 914 119 120 532 849
Net value as of 30th June 2014 93 815 302 322 127 958 524 093
3.10. Monitoring the value of non-current assets and investments in associate
companies
The net book value of goodwills, customer relationships, other intangible
assets and investments in associated companies is reviewed at least annually
and whenever events or circumstances indicate that an impairment is likely to
occur. Such events or circumstances are associated with adverse changes of a
permanent nature and affect either the economic environment or the assumptions
or objectives on the acquisition date. An impairment loss is recognised when
the recoverable amount of the assets tested becomes sustainably lower than
their net book value.
As of 30th June 2014, the Group conducted a review of impairment indicators
that may result in a reduction of the book value of goodwills, customer
relationships recognised and participations in associated companies.
The Group reviewed, given the current economic environment on the one hand,
and the performance achieved in the first half of the year on the other hand,
the assumed growth rates and discount rates as of 31/12/2013, the latter
remain valid as of 30th June 2014.
No evidence of impairment has been detected; the group has not proceeded with
any impairment test.
With regard to investments in associated companies, the Group has identified
no elements questioning their value as of 30th June 2014.
3.11. Trade and other receivables
In K€ 30/06/2014 31/12/2013
Customers and associated accounts 882 828 795 593
Provisions for impairment (22 215) (19 714)
Clients 860 613 775 879
Tax and social receivables 95 701 63 606
Advances and deposits paid 8 142 11 134
Prepaid expenses 70 295 48 583
Other miscellaneous receivables 22 172 18 420
Other receivables 196 305 141 743
Current tax assets 22 503 17 621
- Receivables transferred and derecognised in their entirety
The Group has not proceeded with any assignment of trade receivables since
July 2013.
3.12. Cash and cash equivalents
In K€ 30/06/2014 31/12/2013
Cash equivalents 213 015 197 638
Cash and cash equivalents 116 556 198 984
Cash and cash equivalents 329 571 396 622
Banks ( payable balances) (11 513) (7 200)
Net Cash 318 057 389 422
Cash equivalents consist of deposits paid, and cash available at any time at a
known value.
There are no restrictions on the use of its cash by the Group.
3.13. Issued capital and reserves
Change in capital Capital after
operation
Years Nature of Number of Nominal Bonuses Amount in Number of
transaction shares in Euros in Euros Euros shares
As of 31st - - - 19 672 482 9 836 241
December 2010
As of 22nd July Equity warrants 75 000 2 3 726 000 19 822 482 9 911 241
2011
As of 24th Capital 75 000 2 (3 374 19 672 482 9 836 241
October 2011 Decrease 861)
As of 18th Equity warrants 30 000 2 1 759 200 19 732 482 9 866 241
September 2013
As of 20th Capital 30 000 2 1 648 680 19 672 482 9 836 241
December 2013 Decrease
AS OF 30TH JUNE 19 672 482 9 836 241
2014
3.14. Provisions
In K€ Claims Social and Personnel Other Total
tax disputes benefits provisions
Value as of 31st 14 858 12 080 133 792 50 460 211 188
December 2013
Allocations 2 763 1 720 3 923 5 797 14 202
Reversals used (2 842) (1 408) (13 545) (6 603) (24 397)
Reversals not applicable (1 471) (547) (1) (2 901) (4 920)
Changes in scope 80 80
Other global income (26 751) (26 751)
elements
Reclassifications (357) (1 873) (2 231)
Effect of conversion 324 (46) 3 163 701 4 142
Value as of 30th June 13 631 11 799 100 224 45 660 171 314
2014
For the interim financial statements as of 30th June 2014, employee benefits
include employee benefits for UK employees (e.g. Christian Salvesen and
formerly TDG) for a total of 67.7 M€ (101.4 M€ as of 31st December 2013).
The balance of other provisions at 45.7 M€ as of 30th June 2014 consists
primarily of
- 13.2 M€ relating to provisions for remediation of sites under operating
leases (dilapidation costs) (12.2
- M€ as of 31st December 2013)
- 3.8 M€ relating to provisions for non-market rents (onerous leases),
- 3.9 M€ relating to disputes in connection with the activity,
- 2.9 M€ provisions relating to restructuring,
- 14.6 M€ relating to social risks -7.2 M€ relating to various provisions
which are insignificant in their amount.
3.15. Financial debts
In K€ Payment dates
31/12/2013 30/06/2014 Less than 1 - 1 to 5 Over 5 years
year years
NON-CURRENT
Financial debt over a year 713 181 727 076 490 595 236 481
Leasing 28 664 33 916 32 202 1 714
Other borrowings 1 039 971 971 -
TOTAL NON-CURRENT 742 884 761 963 523 768 238 195
CURRENT
Financial debt less than a 94 454 96 539 96 539
year
Leasing 7 628 9 811 9 811
Other borrowings 382 407 407
TOTAL CURRENT 102 464 106 757 106 757
TOTAL GROSS DEBT 845 391 868 720 106 757 523 768 238 195
Cash and cash equivalents (396 622) (329 571) (329 571)
Bank overdrafts 7 200 11 513 11 513
TOTAL NET CASH (389 422) (318 057) (318 057)
TOTAL NET FINANCIAL DEBT 455 969 550 663 211 300 523 768 238 195
3.15.1 Banking covenants
As of 30th June 2014, the amount of loans subject to these financial ratios
amounted to 480 M€, including 405 M€ subject to two financial ratios and 75 M€
at three financial ratios.
The three financial ratios listed below are calculated semi-annually based on
the consolidated financial statements published in accordance with contractual
definitions and over a rolling 12 month period.
- The "Financial Indebtedness" ratio, the ratio of Net Total Debt (Gross
Financial debt less cash) and consolidated Equity;
- The "Financial Expenses Coverage" ratio, the ratio of operating income -
Consolidated EBIT - and Net Financial Charges;
- The "Leverage" ratio, the ratio of Total Net Debt (Gross financial debt less
cash) and the EBITDA.
As of 30th June 2014, the Group complied with these three ratios.
- The "Financial Indebtedness" ratio as defined in the contracts amounts to
0.77. Its value as of 30th June 2014 must be less than or equal to 2.00.
- The "Financial Expenses Coverage" ratio as defined in the contracts amounts
to 5.68. Its value as of 30th June 2014 must be greater than or equal to 3.00.
- The "Leverage" ratio as defined in the contracts amounts to 2.13. Its value
as of 30th June 2014 must be less than or equal to 3.50.
Given the continuity of operations context in which the Group has signed up
for the future, especially for 2014, the Group believes that it will meet
these three ratios in 2014 within the limits set by the credit agreement.
3.15.2 Liquidity risk
In K€ 30/06/2014 confirmed unconfirmed
Drawn Not Drawn Drawn Not Drawn
Credit lines available
Lease debt 43 727 43 727 0 0 0
Financial debt 1 051 449 823 615 227 834 0 0
Bank overdrafts 101 306 2 220 47 686 9 293 42 107
As of 30/06/14, the Group has a revolving credit line of 400 M€, confirmed
with maturity of more than one year and not used in part to the tune of 228
M€, and an overdraft, confirmed at 49.9 M€ (drawn at 2.2M€) and unconfirmed at
51.4M€ (drawn up to 9.2M€).
3.16. Cash flow
Cash is used for acquisitions and sales of subsidiaries as follows
In K€ 30/06/2014
Disbursement following the acquisition of subsidiaries (3 046)
Net cash provided by acquired companies 358
CASH USED FOR PURCHASES AND SALES OF SUBSIDIARIES (2 688)
3.17. Information on related parties
1. Transactions concluded under normal market conditions between the Group and
the companies owned directly or indirectly by majority shareholder of the
company Norbert Dentressangle S.A., are as follows:
Company Nature Income or Balance sheet Provision for Guarantee given
(expense) debit or doubtful or received
(credit) accounts
In K€ 30/06/14 30/06/13 30/06/14 31/12/13 30/06/14 31/12/13 30/06/14 31/12/13
Dentressangle Administrative (700) (769) (140) (244) -
Initiatives services
Dentressangle Use of the (10) (4) (2) -
Initiatives trademark and
logo for free
Dentressangle Various 73 83 54 -
Initiatives services
Other Rent costs (10 069) (7 783) (4 518) 28 - 5 575 5 828
companies
owned directly
or indirectly
by Financière
Norbert
Dentressangle
2. Transactions with companies in which the Norbert Dentressangle Group has
significant influence and accounted for using the equity method are only
common transactions at market prices for non-significant amounts in relation
to the Group's activity.
The balances of receivables and payables at year end are also not significant.
3. Gross remuneration allocated to Directors and Executive Officers
In K€ 30/06/2014 30/06/2013
Nature of the expense
Short-term employee benefits 1 068 1 046
Post-employment benefits
Other long-term benefits
Termination indemnities
Benefits under stock options, warrants and 626 222
performance shares
Attendance tokens 126 106
4. Remuneration paid in shares to executives
30/06/2014 31/12/2013
Subscriptions for the year
Equity warrants 110 000
Performance shares
Exercised during the year
Equity warrants (30 000)
Performance shares
Cancelled and repurchased by the Company
Equity warrants (55 000)
Performance shares
Stock held at the end of the year
Equity warrants 140 000 140 000
Performance shares
3.18. Commitments and contingencies
The Group's commitments (parent company fully consolidated companies) are as
follows:
In K€ 30/06/2014 31/12/2013
Commitments given
Commitments related to the scope
Acquisition of securities na na
Warranties 25 153 24 189
Financing commitments
Bonds and guarantees 64 185 87 638
Borrowings subject to financial covenants 480 413 473 300
Contribution from the pension regimes to defined 115 211 137 917
UK and Ireland benefits
Commitments related to operating activities
Bonds and guarantees 0 1 097
Property rent 990 210 966 768
Transport leases 193 110 204 018
DIF in hours 1 173 130 1 196 714
K€ 30/06/2014 31/12/2013
Commitments received
Commitments related to the scope
Warranties 44 169 40 589
Financing commitments
Unused lines of credit available see below see below
Commitments related to operating activities
Property rent 6 382 6 263
Manufacturers 134 582 159 774
3.18.1. Commitments given
Warranties
The Group has given warranties in respect of the sale of TFND South East and
the sale of the Dagenham site in the UK.
Data on warranties:
- Deductibles: 0.1M€
- Maximum ceiling for warranties as of 30th June 2014: 25.1 million€
(including 24.9 M€ due in 2019)
Commitments relating to property rental
The latter correspond to rents due from the date of closing and the first
legally permissible lease. They range as follows:
In K€
1 year 180 791
1 - 5 years 492 796
Over 5 years 316 624
Total 990 210
Transport commitments
In K€
1 year 50 661
1 - 5 years 131 486
Over 5 years 11 003
Total 193 150
Commitment to pay contributions to pension regimes with defined benefits in
the UK and Ireland
In K€
1 year 11 357
1 - 5 years 51 122
Over 5 years 52 732
Total 115 211
3.18.2. Commitments received
Commitment on available credit lines
Credit lines available and not used are detailed in note III o) Borrowings §
Liquidity Risk.
Warranties
The Group provided guarantees of liabilities from the acquisition of TDG,
Daher, Fiege, Brune Lavage, Hopkinson and MGF.
Warranties received in June 2014:
- Deductibles: 0.5M€
- Maximum ceiling for warranties at the end of June 2014: 44.2 M€ (including
4.3 M€ due in 2017 and 39.2 M€ due in 2018)
- This upper limit can be increased to 20.1 M€ in case of fraud.
The Group provided warranties from the acquisition of APC: compensation for
the Euro/Euro on all returns (no deductible or ceiling or duration).
The Group has also received guarantees in connection with the acquisition of
John Kells. The latter run from the 31/10/2012 for a period of 3 years (no
deductible, no ceiling).
3.19. Post balance sheet events
In July 2014, our subsidiary ND Distribution (formerly Darfeuille Services, a
subsidiary of the Christian Salvesen Group acquired through a takeover in
December 2007) received notification from the French Competition Authority
relating to alleged anti-competitive practices on the part of players in the
courier transport sector.
Most French players in this specialty have seen and reported these complaints
for several years.
At the heart the investigation is the role played by a professional
association whose "Courier business council" meetings would have been put to
use by the participants to align their trade policies including tariffs.
At this preliminary stage, the period covered by the Competition Authority is
between June 2007 and March 2008, partially before the effective takeover by
our Group of this company.
At this stage it is a statement of objections, which is temporary in nature,
and opens up the right to challenge.
III - CERTIFICATION FROM THE PERSON RESPONSIBLE OF THE HALF-YEAR FINANCIAL
REPORT
Lyon, 30th July 2014
Certification of Half-Year Financial Report
I hereby confirm that the condensed interim financial statements have been
prepared in accordance with applicable accounting standards and give a true
and fair view of the company's assets, financial position and results and the
undertakings included in the consolidation, and that the interim management
report attached hereto presents a true picture of the important events during
the first six months of the financial year and their impact on the financial
statements, the main transactions between related parties and a description of
the principal risks and uncertainties for the remaining six months of the
year.
Hervé Montjotin
President of the Management Board
IV - REPORT FROM THE STATUTORY AUDITORS ON THE HAL-YEAR FINANCIAL INFORMATION
Norbert Dentressangle
For the period from January 1 to June 30, 2014
Statutory Auditors' review on the half-yearly financial information
To the Shareholders,
In compliance with the assignment entrusted to us by your annual general
meetings 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 condensed half-yearly consolidated financial
statements of Norbert Dentressangle, for the period from January 1 to June 30,
2014
- the verification of information presented in the half-yearly management
report.
These consolidated condensed interim financial statements have been prepared
under the responsibility of the Executive Board. It is up to us, based on our
limited review, to express a conclusion on these financial statements.
1. 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 condensed half-yearly 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.
2. Specific verification
We have also verified the information presented in the half-yearly management
report on the condensed half-yearly consolidated financial statements subject
to our review.
We have no matters to report as to its fair presentation and consistency with
the condensed half-yearly consolidated financial statements.
Lyon, July 30, 2014
The statutory auditors
French original signed by
GRANT THORTON
French member of Grant Thornton International ERNST & YOUNG and Others
Robert Dambo Daniel Mary-Dauphin