RUBIS // AN INFRASTRUCTURE BASE DEDICATED TO ENERGY LOGISTICS AND DISTRIBUTION

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MAJOR MOVE IN WESTERN AFRICA IN BITUMEN SECTOR
SET UP OF RUBIS SUPPORT AND SERVICES
RIGHT ISSUE PLAN

Acquisition

Rubis has signed an agreement to acquire Eres, one of the main independent specialists in supply-transportation-logistic-retail of bitumen, operating in Western Africa.

With the support of a strong logistic infrastructure including import terminals in Senegal, Togo, and Nigeria, the Group is leader in the sub-region. The company controls the whole logistics and supply chain from the refinery in-take, shipping, sea-connected import terminals to inland depot till truck delivery to the final users on the work site.

This significant acquisition is in line with Rubis strategy: a niche product, marketed on structurally import markets where the infrastructure component is essential to maintain in the long run a competitive advantage and to offer the best service to international road contractors.

In 2014, Eres total sales-revenues have reached an estimated $550M with a proforma profit generation of around 8% of sales. The company has marketed 400 000 tons of bitumen and emulsion in 2014 in addition to fuels in Western Africa. Eres has successfully built a solid business base in the region helped by its expertise and its powerful integrated logistic (vessels, terminals, road transportation).

The transaction includes the immediate purchase of 75% of the shares followed by a scheduled earn out payment and the remaining 25% shares after 3 years. Rubis will pay $315M for 75% of the shares including the working capital. The earn out element for a maximum amount of $120M is linked to profits and scheduled over a period of 3 years. The remaining purchase of 25% shares will take place in 3 years, and indexed on profit performance.

Rubis Support et Services

The nature and the dimension of this transaction will give birth to a new branch: Rubis Support and Services which will include all the infrastructure, transportation, supply and services operations which are supporting the marketing and retail distribution branch. This new branch will also include SARA (the refinery in the French Antilles) and the current supply and trading operations in the Caribbean.

Right Issue

This acquisition comes in addition to existing Group’s financing requirements and brings the total cash requirement to an estimated €600M including capital expenditures for the current year, extension plans (Antwerp and Rotterdam) and commitments to acquire SARA (Antilles refinery) and SRPP (Reunion Island). Those financing needs are already met by the addition of the current cash flow generation, existing credit lines and the Group’s cash position.

However, aiming at respecting its financial structure target and being able to seize new acquisitions opportunities, Rubis intends to launch in the coming months a right issue corresponding to 20% of its total cash spending.

In addition, in order to secure a solid earning per share enhancement resulting from these acquisitions, it has decided to halve the use of its existing equity line to some 1.2 million shares over 2015 and 2016 (market value of approximately €65M).

Upcoming events :

First-quarter 2015 sales revenue: May 12, 2015 (after Bourse closing)

 


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NET INCOME: UP 13%
OUTSTANDING PERFORMANCE IN A CHAOTIC ENVIRONMENT

At its meeting of March 9, 2015, the Board of Management finalized the financial statements for fiscal 2014, which were approved by the Supervisory Board at its meeting of March 11, 2015. A report giving certification without reservations is currently being issued by the Statutory Auditors.

Faced in 2014 with numerous external factors that pulled the income statement in opposing directions, the Group managed nonetheless to maintain its historical double-digit rate of growth.

In total, net income, Group share rose 13%. Correcting for extraordinary items and at comparable scope of consolidation, the growth in net income was 12%, proving yet again the strength of the Rubis business model, despite a particularly chaotic business environment.

This high level of performance will permit to increase the dividend payable per share by 5% to €2.05, if approved by the Shareholders' Meeting.

The sharp increase in generated cash flow (+21%) is notable; in conjunction with the lowered net working capital requirements due to lower oil prices, it gives the Group the means to maintain net debt at a moderate level (1.3 times EBITDA) and to actively pursue its growth strategy.

The main external factors having an effect on the period can be summarized as follows:

  • an historically unfavorable climatic factor, impacting volumes in Europe by an estimated 5%;
  • historic volatility in the price of oil, with a collapse in the fourth quarter (down 30% from the third quarter), creating contrary effects depending on the region (positive in Europe, mixed in the Caribbean according to product segment) combined with negative inventory effects;
  • the application of a new decree reducing the profitability of the SARA refinery in Martinique;
  • a rather gloomy economic outlook globally, affecting many countries where the Group operates; and lastly,
  • generally positive foreign exchange effects linked to the €/$ rate.

At the same time, the Group successfully integrated its scope additions in Portugal and Switzerland, and maintained a constant level of capital expenditure: €111 million on facilities maintenance, support for market share gains and building new sites.


RUBIS ÉNERGIE: Distribution of LPG and petroleum products

In 2014, with volume amounting to 2.4 million m3, Rubis Énergie's retail distribution of LPG and petroleum products increased 2% (unchanged at comparable scope and climatic conditions).

The variability was due to numerous factors, with opposing effects on the different income statement aggregates. In all, EBIT grew by 3%, or 9% excluding changes in scope and exceptional items, with:

  • Europe showing strong growth (EBIT up 28%), favorably affected by margins but offset by exceptionally mild weather conditions. Excluding exceptional items and at comparable scope, growth of EBIT was 19%;
  • the Caribbean posting a decline (EBIT down 13%) due to lower profitability at SARA (application of the new decree) and to negative effects from the collapse of oil prices late in the year. Correcting for exceptional items due to these factors, EBIT rose 7%;
  • in Africa, EBIT grew at a fast pace at +32% or +11% excluding exceptional items. Southern Africa is showing particularly high growth.


RUBIS TERMINAL: Bulk liquid storage

Revenues at storage sites taken as a whole rose 8%, including 2% in France, 6% in the ARA zone (Rotterdam and Antwerp) and a doubling in Turkey. The division achieved 6% growth in EBIT despite weather conditions that were unfavorable for domestic heating oil shipments and despite difficulties with one customer in the ARA zone, offset by growth at the Reichstett site in France.

For the Group, fiscal 2014 was active in terms of capital spending (€111 million) and the consolidation of new companies (in Portugal and Switzerland), in addition to the €170 million of committed capital spending for 2015, primarily including SARA (the Martinique refinery) and SRPP (petroleum products distribution in Reunion Island), both of which require government approvals.

A proposal will be made to the Shareholders' Meeting to be held on June 5, 2015 to declare a dividend of €2.05 per share (up 5%) payable in cash or in shares at the option of the shareholder. It should be noted that payment in shares has the effect of reducing the Group's tax expense (3% contribution due only on amounts paid in cash).

In 2015 Rubis intends to continue its industrial development, with capital expenditures budgeted at €148 million.

The Group is confident in its ability to generate organic growth and continue its acquisition policy.

Rubis, listed on Euronext Paris, is an independent player operating in bulk liquid storage and the distribution of LPG and petroleum products.

 

Upcoming events :

First-quarter 2015 sales revenue: May 12, 2015 (after Bourse closing)


Rubis does not guarantee the reliability, accuracy or completeness of the information provided herein and shall not be held responsible for the content of the site or for any use thereof by any person whatsoever.

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