Press release
Paris, 13 March 2017
ANNUAL RESULTS 2016
Revised 2016 targets exceeded
782,000 customer sites acquired in France
66.5% revenue growth to €1,692.4 million
Current operating income multiplied by 2.6 to €86.8 million
Proposed dividend raised by 25% to €0.25 per share
| € millions | 31/12/2016 | 31/12/2015 | Change | |||
| Revenue from ordinary activities | 1,692.4 | 1,016.5 | +66.5% | |||
| Gross margin | 233.8 | 148.5 | +57.4% | |||
| Current operating income | 86.8 | 34.0 | x 2,6 | |||
| Net income | 123.6 | 27.2 | x 4,5 | |||
| Earnings per share (in euro) | 3.01 | 0.67 |
Today's Board of Directors meeting approved the 2016 consolidated accounts. The audit procedures on the consolidated accounts have been completed and the audit report for the certification of the financial statements is being issued.
Record business growth in France, excellent commercial performance
2016 annual revenue is up by 66.5% to €1,692 million. This very strong increase is in particular attributable to the ongoing commercial growth with, in France, a 31.6% increase in gross acquisitions to 782,000 over the year compared with 594,000 a year earlier.
The increase in volume of electricity (13.9 TWh delivered, up 84%) and gas (5.4 TWh, up 42%) sold is in particular supported by corporate and public authority customers acquired by the Group(89,000 net sites) following the end of regulated tariffs for both electricity and gas for this customer category on 31 December 2015.
In 2016, the Group's customer portfolio rose 29.7% (472,000 net new sites acquired compared with 303,000 in 2015), which breaks down as follows at 31 December 2016:
| in thousands | at end 2016 | at end 2015 | Change |
| Residentials | 1,705 | 1,337 | +27.5% |
| Non residentials | 358 | 254 | +40.9% |
| Total | 2, 063 | 1, 591 | +29.7% |
| in thousands | at end 2016 | at end 2015 | change |
| Electricity | 1,607 | 1,248 | +28.8% |
| Gas | 456 | 343 | +32.9% |
| Total | 2, 063 | 1, 591 | +29.7% |
Strong improvement in net profitability
In a context of sustained customer site acquisitions and increased volumes of energy delivered, the Group successfully optimised its terms of supply and has adapted to the volatility in wholesale prices, especially for electricity. Combined with a positive €14.2 million impact from tariff catch-up following the publication of retroactive decrees in October 2016 (*), the gross margin is up by a sharp 57.4% to €233.8 million. This performance includes a negative €31.6 million impact of a provision taken for the loss-making contract concerning gas transit capacities between the Netherlands, Belgium and France.
(*) Cancellation of the 28/07/2014 decree concerning the period of August 2014 to October 2014 (non-compliance with the principle of legal certainty for the "blue" tariffs) and the 30/10/14 decree concerning the period of November 2014 to July 2015 (failure to take into account the necessary tariff catch-up for residential "blue" tariffs and "green" tariffs).
For the first time over a full year, the gross margin also includes the contribution of the Bayet gas-fired combined-cycle power plant for around €9 million.
Control of operating expenses, which once again grow slower than revenue, bring the current operating income to €86.8 million (x 2.6). To note the positive impact, around €10 million for the past, of retroactive application of the CoRDis decision implementing assumption by GrDF of unpaid amounts for distribution costs relative to the gas supply business.
Net income also achieves record level at €123.6 million (multiplied by 4.5). It outpaces the current operating income thanks to improvement of fundamentals combined with:
- a rise in wholesale prices at the end of 2016 resulting in a positive change in fair value of energy derivatives operational in nature for €21.4 million compared with an expense of €(11.6) million in 2015;
- tax income of €29.5 million partly linked to the application of tax-loss carry forwards relative to the improvements of earnings outlooks.
Shareholders' equity boosted, solid cash position
At 31 December 2016, the Group Shareholders' equity is €217.5 million compared with a negative €(29.3) million at 31 December 2015. This €246.8 million increase is attributable, on the one hand, to the sharp improvement in net profitability, and on the other, to the positive €123.6 million change in the fair value of hedging instruments. Restated for the effect generated by the rise in wholesale prices and physical deliveries in 2016 of energy volumes purchased before 1 January 2016, shareholders' equity comes to €203.9 million (up €123.2 million compared with 31 December 2015).
The cash generation, along with the improved profitability, brings net financial debt to €(43.6) million.
| € M | 31/12/2016 | 31/12/2015 | ||
| Gross financial debt | 196,170 | 183,093 | ||
| Margin calls received in cash | 132,362 | 850 | ||
| Margin calls paid in cash | (3,230) | (60,568) | ||
| Gross cash | (368,867) | (35,230) | ||
| Net financial debt (*) | (43,565) | 88,145 |
(*) Given the volatility of wholesale prices and the margin call levels that may result, the Group presents its net financial debt including all the financial effect of these margin calls.
The financial debt is mainly composed of bond debt (€183 million) maturing between 2019 and 2023; the last private placement in this format having raised €68 million in November 2016 to finance both the acquisition of customer sites and the purchase the of Marcinelle gas-fired power plant at the end of December for an enterprise value of around €36.5 million.
In addition to its available cash, the Group can also rely on significant liquidities of around €206 million through its unused credit facilities.
Continued growth in 2017 with once again increased targets
After a record 2016, 2017 will again be a year of growth in terms of activity and profitability. Buoyed by investment in communication and marketing, growth will in particular be driven by faster customer site acquisitions, again in a context of controlled operating expenses.
The Group targets for 2017:
- a portfolio of 2.5 million customer sites;
- revenue of €2,000 million at seasonal average temperatures; and
- current operating income of €100 million at seasonal average temperatures.
The Group is confident on its ability to sustain profitable growth, over the long term. In this respect, the Group states that its target is to serve over 4 million customer sites, all segments, energies and countries combined, by 2020.
Additionally, Direct Energie confirms its ambitions for external growth opportunities, in France and the rest of Europe, in particular to strengthen its upstream and downstream market positions. This expansion strategy reflects the Group's commitment to diversifying the growth drivers demonstrated by the previous acquisitions.
Proposed dividend per share of €0.25
The Board of Directors has decided to propose to the next General Shareholders' Meeting a dividend per share raised to €0.25 (an increase of 25%) with respect to the fiscal year 2016 and a coupon detachment set at 2 June 2017.
For Xavier Caïtucoli, CEO of the Group: "the 2016 results confirm the growth and profitability dynamic. They provide a solid foundation to further accelerate Direct Energie's development, and put in place new growth relays".
Next publication:
Revenue for 1 st quarter 2017 on 10 May 2017 after the markets close
ISIN code: FR0004191674/Ticker symbol: DIREN/Euronext Paris, Compartment A
Publications : The Group's annual activity report, the annual accounts and the support used for the analyst meeting, are available on its internet site: www.direct -energie.com.
About Direct Energie
Third-largest French electricity and gas provider, the Direct Energie Group supplies, in France and Belgium (under the Poweo brand), more than 2.1 million residential and non-residential sites. As an integrated energy actor, Direct Energie produces power, supplies gas and electricity, and sells energy services to its customers. Direct Energie's success has been underpinned for more than 14 years by its technical expertise, excellent customer relationships and innovation capacity.
In 2016, the Group generated consolidated revenues of €1,692.4 million and delivered 19.8 TWh of energy.
For more information, visit our website: www.direct-energie.com
Press contact:
Image Sept
Grégoire Lucas - glucas@image7.fr - Tel +33 (0)1 53 70 74 94
Marie Artzner - martzner@image7.fr - Tel +33 (0)1 53 70 74 31 or +33 (0)6 75 74 31 73
CM CIC Market Solutions
Stéphanie Stahr - stephanie.stahr@cmcic.fr - Tel +33 (0)1 53 48 80 57
Direct Energie
Mathieu Behar - mathieu.behar@direct-energie.com - Tel +33 (0)6 12 48 85 85
Profit & loss account
| In thousands of euros | 31/12/2016 | 31/12/2015 | ||
| Revenues excluding Energy Management Margin | 1,676,957 | 1,016,870 | ||
| Energy Management Margin | 15,472 | (335) | ||
| Revenue from ordinary activities | 1,692,429 | 1,016,535 | ||
| Cost of sales | (1,458,660) | (868,083) | ||
| Gross margin | 233,769 | 148,452 | ||
| Personnel expenses | (34,583) | (26,391) | ||
| Other operating income and expenses | (83,242) | (65,588) | ||
| Depreciation and amortisation | (29,186) | (22,507) | ||
| Current operating income | 86,758 | 33,965 | ||
| Changes in fair value of Energy financial derivative instruments operational in nature | 21,394 | (11,636) | ||
| Disposals of non-current assets | (2,453) | (5,929) | ||
| Impairment of non-current assets | (112) | (550) | ||
| Income and expenses related to changes in scope of consolidation | (628) | (120) | ||
| Operating income | 104,959 | 15,731 | ||
| Cost of net debt | (10,819) | (3,743) | ||
| Other financial income and expenses | (389) | 65 | ||
| Financial income/(loss) | (11,208) | (3,678) | ||
| Corporate income tax | 29,454 | 17,010 | ||
| Share of net income from companies accounted for by the equity method | 352 | (62) | ||
| Net income from continuing operations | 123,557 | 29,001 | ||
| Net income from discontinued operations | - | (1,754) | ||
| Net income | 123,557 | 27,247 | ||
| of which Net income, Group share | 123,557 | 27,247 | ||
| of which Net income, minority interests | - | - | ||
| Earnings per share (in euros) | 3.01 | 0.67 | ||
| Diluted earnings per share (in euros) | 2.85 | 0.64 | ||
| Earnings per share from continuing operations (in euros) | 3.01 | 0.71 | ||
| Diluted earnings per share from continuing operations (in euros) | 2.85 | 0.68 | ||
| Earnings per share from discontinued operations (in euros) | - | (0.04) | ||
| Diluted earnings per share from discontinued operations (in euros) | - | (0.04) |
Balance sheet assets
| In thousands of euros | 31/12/2016 | 31/12/2015 | ||
| Intangible assets | 50,170 | 40,949 | ||
| Property, plant and equipment | 76,217 | 47,661 | ||
| Investments in associates | 1,434 | 902 | ||
| Non-current derivative financial instruments | 19,334 | 8,494 | ||
| Other non-current financial assets | 1,342 | 1,458 | ||
| Other non-current assets | 8,210 | 5,279 | ||
| Deferred tax assets | 66,467 | 40,780 | ||
| Non-current assets | 223,173 | 145,522 | ||
| Inventory | 38,458 | 36,245 | ||
| Trade receivables | 413,279 | 220,596 | ||
| Current derivative financial instruments | 137,084 | 35,843 | ||
| Other current financial assets | 18,364 | 70,688 | ||
| Other current assets | 30,263 | 69,500 | ||
| Cash and cash equivalents | 368,867 | 35,230 | ||
| Current assets | 1,006,314 | 468,102 | ||
| TOTAL ASSETS | 1,229,487 | 613,624 |
Balance sheet liabilities
| In thousands of euros | 31/12/2016 | 31/12/2015 | ||
| Share capital and share premiums | 15,307 | 9,003 | ||
| Retained earnings and net income/(loss) | 188,769 | 71,717 | ||
| Treasury shares | (207) | (88) | ||
| Other comprehensive income/(loss) | 13,630 | (109,981) | ||
| Shareholders' Equity - Group share | 217,499 | (29,350) | ||
| Non-controlling interests | - | - | ||
| TOTAL SHAREHOLDERS' EQUITY | 217,499 | (29,350) | ||
| Non-current provisions | 37,658 | 5,051 | ||
| Non-current derivative financial instruments | 17,311 | 81,354 | ||
| Other non-current financial liabilities | 182,843 | 114,829 | ||
| Other non-current liabilities | 4,759 | 2,164 | ||
| Deferred tax liabilities | 13,065 | 21,130 | ||
| Non-current liabilities | 255,637 | 224,528 | ||
| Current provisions | 14,169 | 6,776 | ||
| Trade payables | 242,602 | 187,818 | ||
| Current derivative financial instruments | 103,925 | 83,851 | ||
| Other current financial liabilities | 145,689 | 69,113 | ||
| Other current liabilities | 249,966 | 70,887 | ||
| Current liabilities | 756,351 | 418,446 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,229,487 | 613,624 |
Statement of changes in equity
| Share capital | Share premiums | Retained earnings and profit or loss | Treasury shares | Other comprehensive income | Total Shareholders' equity | |||||
| In thousands of euros | Changes in fair value* | Other | ||||||||
| Shareholders' equity at 31/12/2015 | 4,079 | 4,923 | 71,717 | (88) | (109,981) | 0 | (29,350) | |||
| Net income | - | - | 123,557 | - | - | - | 123,557 | |||
| Other comprehensive income | - | - | - | - | 123,611 | - | 123,611 | |||
| Comprehensive income | - | - | 123,557 | - | 123,611 | - | 247,168 | |||
| Capital increase | - | - | - | - | - | - | - | |||
| Options exercised | 71 | 6,234 | - | - | - | - | 6,304 | |||
| Options | - | - | 1,738 | - | - | - | 1,738 | |||
| Treasury shares purchases/sales | - | - | - | (119) | - | - | (119) | |||
| Dividends paid | - | - | (8,242) | - | - | - | (8,242) | |||
| Shareholders' equity at 31/12/2016 | 4,150 | 11,157 | 188,769 | (207) | 13,630 | 0 | 217,499 | |||
Cash flow statement
| In thousands of euros | 31/12/2016 | 31/12/2015 | ||
| Consolidated net income | 123,557 | 27,247 | ||
| Tax expenses/income | (29,454) | (17,010) | ||
| Financial income/(loss) | 11,208 | 3,678 | ||
| Income before taxes and financial expenses | 105,311 | 13,915 | ||
| Depreciation and amortisation | 29,186 | 22,507 | ||
| Impairment | 112 | 550 | ||
| Provisions | 31,926 | 6,212 | ||
| Effect of changes in consolidation scope and other gains and losses on disposals | 0 | 234 | ||
| Expenses related to share-based payments | 1,738 | 1,351 | ||
| Change in fair value of financial instruments | (25,280) | 8,658 | ||
| Other financial items with no cash impact | 2,138 | 7,465 | ||
| Share of income from associates | (352) | 62 | ||
| Items with no cash impact | 39,468 | 47,040 | ||
| Income tax paid | (10,636) | - | ||
| Change in working capital requirement | 84,873 | (79,755) | ||
| Net cash flow from operating activities | 219,016 | (18,800) | ||
| Acquisition of fixed assets | (33,770) | (25,749) | ||
| Disposals of fixed assets | - | 3 | ||
| Change in deposits and guarantees | 184,812 | (55,511) | ||
| Acquisition of shares in companies not fully consolidated | (10) | - | ||
| Acquisition of available-for-sale securities | 0 | (26) | ||
| Acquisition of subsidiary and merger, net of cash acquired | (35,453) | (43,934) | ||
| Loss of control of subsidiaries net of cash and cash equivalents sold | - | 3,672 | ||
| Change in financial assets | - | 27,871 | ||
| Net change in loans originated by the company | 2,154 | 3,803 | ||
| Net cash flows from investment activities | 117,733 | (89,872) | ||
| Sums received from shareholders during capital increases | 6,304 | - | ||
| Treasury shares | (119) | 13 | ||
| Proceeds from borrowings | 185,541 | 120,876 | ||
| Repayment of borrowings | (177,117) | (840) | ||
| Interest paid | (11,173) | (5,220) | ||
| Interest received | 901 | 647 | ||
| Dividends paid | (8,242) | (6,119) | ||
| Net cash flows from financing activities | (3,904) | 109,357 | ||
| Net change in cash and cash equivalents | 332,844 | 685 | ||
| Cash and cash equivalents at beginning of year | 31,993 | 31,308 | ||
| Cash and cash equivalents at end of year | 364,837 | 31,993 |
