PRESS RELEASE                                                                                                              Paris, 13th September 2018 - 17:45

YOUR OPERATIONAL LEASING SOLUTION

RESULTS - FIRST HALF OF 2018

Strong improvement of net income Group share Current operating income of € 4.3 million, up 24% € 12.8 million EBITDA, stable compared to the first half of 2017 Decrease in revenues[1], -6% at constant exchange rates and perimeter, without impact on Group's profitability Strengthened balance sheet, Gearing ratio at 1.32x and Loan to Value ratio at 53% Launch of a change management following the refocusing on transportation equipment leasing businesses

"Following the sale of the European and US modular buildings activities in December 2017, priority has been given to improving the profitability of the transportation equipment leasing business, refinancing and developing the asset management for third parties, based on the Group's fundamentals: our tangible asset base, our global footprint and our long-standing trusted relationships with our customers. " state Fabrice and Raphael Walewski, managing partners of TOUAX SCA.

"During the first half of 2018, we implemented the first steps of our strategic refocusing action plan around transportation activities. We launched a Change Management program, including the design of a new organization for the Freight Railcar business to continually improve the quality of our service and customer satisfaction. We have completed 110 million euros in asset financing, syndicated 14 million euros of assets to investors and developed third-party management with the signing of an investment agreement of 80 million dollars.

This refocusing allowed us, as at June 30, 2018, to record a strong improvement in net income Group share and strengthen our balance sheet. "

The consolidated financial statements at June 30, 2018 were approved by the Management Board on September 12, 2018 and submitted to the Supervisory Board today. They have been subject to limited review by the Statutory Auditors. Their report is in progress.

REVENUES ANALYSIS

Revenues (in thousand of euros) Q1 2018 Q2 2018 H1 2018 Q1 2017 Q2 2017 H1 2017
Lease revenues (*) 32,465 32,700 65,165 38,498 37,820 76,318
Sales of Equipment 3,557 4,728 8,285 3,424 3,427 6,851
Syndication Fees and Capital gain 323 654 978 80 1,049 1,129
Total Revenues 36,346 38,082 74,429 42,002 42,297 84,298
(*) Lease revenues include ancillary services

Consolidated revenues for the first half of 2018 amounted to € 74.4 million, compared to € 84.3 million for the same period in 2017. On a like-for-like basis, revenue was down 6%. This decrease concerns the lease revenue of equipment owned by investors and has no significant impact on the Group's profitability.

Lease revenue increased from 76.3 million in the first half of 2017 to 65.2 million over the same period in 2018, -9% at constant scope and exchange rates. This change is mainly due to the Containers division, whose fleet has decreased compared to the previous year.

Equipment sales rose by 21%, reaching 8.3 million euros at June 30, 2018.

Syndication fees were stable (-0.1 million) at 1 million euros over the period.

Segmentation analysis

Revenues (in thousand of euros) Q1 2018 Q2 2018 H1 2018 Q1 2017 Q2 2017 H1 2017
Lease revenues (1) 12,775 12,660 25,435 11,929 12,826 24,755
Sales of Equipment 100 789 889 598 982 1,580
Syndication fees   662 662   1,050 1,050
Freight Railcars 12,875 14,111 26,986 12,527 14,858 27,385
Lease revenues (1) 3,029 2,798 5,827 3,699 3,560 7,259
Sales of Equipment 1,020   1,020 6 111 117
River Barges 4,049 2,798 6,847 3,705 3,671 7,376
Lease revenues (1) 16,329 17,111 33,441 22,824 21,572 44,396
Sales of Equipment 1,746 2,062 3,808 1,833 1,681 3,514
Syndication fees 309 5 314 76 (1) 75
Containers 18,385 19,178 37,563 24,734 23,251 47,985
Lease revenues (1) 331 130 461 45 (137) (92)
Sales of Equipment 692 1,877 2,568 987 653 1,639
Capital gain (loss) on disposals 14 (12) 2 4   4
Others 1,037 1,994 3,032 1,036 517 1,552
             
Lease revenues (1) 32,465 32,700 65,165 38,498 37,820 76,318
Sales of Equipment 3,557 4,728 8,285 3,424 3,427 6,851
Syndication Fees and Capital gain (loss) on disposals 323 654 978 80 1,049 1,129
Total Revenues 36,346 38,082 74,429 42,002 42,297 84,298
(1) Lease revenues include ancillary services
  • Revenues of the Freight Railcars division amounted to 26.9 million euros at the end of June 2018, down 1.5% compared to 27.4 million euros in the first half of 2017 mainly due to the decreased sales of equipment.

Rental revenue increased by € 0.7 million to € 25.4 million in June 2018, thanks to the start of a recovery in rental rates and the increase in the utilization rate. The latter averaged 84.2% in the first half of 2018, while it stood at 80.3% a year earlier. These increases underline the operational improvement of the Freight Railcars division.

  • Revenues of the River Barges division amounted to € 6.8 million, down 7.2% compared to € 7.4 million in the first half of 2017. Barges sales partly offset declines in chartering revenue in Europe and leasing activity in South America.
  • The Containers Division's revenues amounted to 37.6 million euros at the end of June 2018, down 21.7% compared to 48 million euros in the first half of 2017, explained by the evolution of the leasing revenues, down 11 million due to the decline in the USD and fleet volume in management (-42,857 CEU[2]) while the average utilization rate is up: 98.9% in the first half of 2018 compared to 97.2% a year earlier.
  • The retained sales activity of modular buildings in Africa presented in "miscellaneous" rose by 0.9 million euros in the first half of 2018.

H1 RESULTS ANALYSIS

Key Figures (in thousand of euros) 06/2018 06/2017 12/2017
Revenues 74.4 84.3 169.7
  Freight railcars 27.0 27.4 57.0
River Barges 6.8 7.4 14.6
Containers 37.6 48.0 87.6
Others 3.0 1.6 10.6
Gross operating margin - EBITDAR (1) 40.3 42.8 88.7
EBITDA (2) 12.8 13.0 26.9
Current operating income 4.3 3.4 7.6
Operating Income 4.0 5.3 0.9
Profit before tax -0.5 0.3 -8.5
Consolidated net profit (loss) (Group's share) -1.8 -13.9 -18.0
Including income from retained operations -1.8 -0.1 -5.4
Including income from discontinued operations   -13.8 -12.7
Net earnings per share (€) -0.25 -1.99 -2.58
Total non current assets 304.5 323.2 307.8
Total Assets 408.9 628.7 398.2
Total shareholders' equity 135.1 150.8 136.7
Net Financial Debt (3) 178.7 193.2 181.1
Operating cash flow of the retained operations 10.4 33.4 22.6
Loan to Value 53 % 57 % 54 %

(1) The EBITDAR (earnings before interest taxes depreciation and amortization and rent) calculated by the Group corresponds to the current operating income. increased by depreciation charges and provisions for capital assets and distributions to investors

(2) EBITDA: EBITDAR after deducting distributions to investors

(3) Including €156.5 million in debt without recourse at 30 June 2018

EBITDA reached 12.8 million euros at June 30, 2018, stable compared to 13 million euros recorded a year earlier.

The Freight Railcars business is the Group's leading contributor to EBITDA, with a majority of assets owned, while the contribution of the container division is low due to the preponderance of assets managed on behalf of third parties.

EBITDA for the Freight Railcars (+1 million euros) and Containers (+0.5 million euros) divisions improved thanks to the improvement in equipment profitability over the period.

Excluding non-recurring income relating to the resolution of a dispute in South America (€ 1.1 million) in the first half of 2017, the EBITDA of the River Barges business is stable.

EBITDA from other activities was down 0.5 million euros, impacted by general expenses previously allocated to the modular buildings division divested in December 2017, partially offset by the improvement in the residual activity of modular buildings in Africa.

  • Recurring operating income[3] amounted to € 4.3 million, up 24%. This increase is attributable to an operational increase in leasing activities combined with higher sales margins.
  • Net income Group share for the first half of 2018 was -1.8 million euros compared to -13.9 million euros a year earlier (of which -13.8 million euros related to discontinued operations).

After restatement of non-recurring items in the first half of 2017 and scope effects, the improvement in the operating profitability of the leasing activities of transport equipment and the residual activity of modular buildings in Africa is confirmed.

FINANCIAL STRUCTURE

  • The balance sheet shows a total of 409 million euros at June 30, 2018, compared with 398 million euros at December 31, 2017 and 629 million euros at June 30, 2017.
  • Tangible assets amount to 318 million euros.
  • Cash flow from operations amounted to € 10.4 million.
  • The financial structure is reinforced with a gross financial debt of 212.5 million euros, stable (+1 million euros) compared to the end of December 2017, out of which 74 % without recourse. The Group's net debt amounted to 179 million euros.
  • The Group improves its credit profile as of June 30, 2018, with Gearing and Loan to Value ratios of 1.32x and 53% respectively.

Financings

  • At the end of May 2018, the Group refinanced some of its railcars and containers asset debt up to 110 million euros with its core asset financing banks but also with new international banking partners, thus expanding its pool.

These financings make it possible to extend the maturity of the Group's debts and resume investments.

  • Post-closing, on July 31, 2018, Touax SCA completed a "senior unsecured" bond issue in Euro PP format for a nominal amount of € 16.6 million with a maturity date of July 31, 2023.

The issue of the Bonds is intended to extend the average maturity of the Group's debt.

The net proceeds of the issue will thus be partly used to refinance the bonds maturing on October 2, 2018; the balance being allocated to the general needs of the Group.

OUTLOOK

The underlying markets for the leasing of transportation equipment remain positive.

Freight Railcars leasing in Europe is benefiting from improved economic conditions and the recovery of private sector demand following the liberalization of Rail Freight.

The River transport market in Europe is driven by the increase in construction and transport of cereals and biomass leading to demand for River Barges.

The global growth of containerized trade forecast at 5% in 2019 (Clarkson, August 2018) is favorable for the leasing of containers.

The Group is continuing its focus on improving its profitability, through increased utilization rates and rental rates, is gradually increasing investments for its own account, and is developing asset management for third parties.

TOUAX confirms an improvement in its results for the whole of 2018.

NEXT APPOINTMENTS

  • - September 13, 2018: SFAF meeting to present the 2018 half-year financial statements
  • - September 14, 2018: Half-yearly results conference call
  • - November 15, 2018: Third Quarter 2018 Revenues

TOUAX Group leases out tangible assets (freight railcars, river barges and containers) on a daily basis throughout the world, for its own account and on behalf of third party investors. With €1.2 billion under management, TOUAX is one of the European leaders in the operational leasing of this type of equipment.

TOUAX is listed in Paris on EURONEXT - Euronext Paris Compartment C (Code ISIN FR0000033003) and on the CAC® Small and CAC® Mid & Small indexes and in EnterNext PEA-PME 150.

For more information: www.touax.com

Contacts:
TOUAX                                                                                                                                    ACTIFIN
Fabrice & Raphaël WALEWSKI                                                                               Ghislaine Gasparetto
touax@touax.com                                                                                               ggasparetto@actifin.fr
www.touax.com                                                                                                   Tel : +33 1 56 88 11 11
Tel : +33 1 46 96 18 00                                                                                                                          




[1] IFRS 15 "Revenue from Contracts with Customers" came into effect on 1 January 2018.
The application of this standard concerns presentation elements that have no impact on margins.
It results in a requirement to present Fees on syndications and sales of used equipment belonging to investors in Revenues.
2017 figures have been restated according to IFRS15 - cf Condensed Consolidated Half-Year Financial Statements

[2] CEU : Cost Equivalent Unit

[3] NB: change in estimation of the useful life of railcars harmonized to 36 years and capitalization of revising railcars' spare parts for a better comparison with our peers (prospective change; H1 2017 impact estimated to 2 million euros)


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