Presentation of VINCI Park

Presentation of VINCI Park
London - 12 February 2004
Dario d’ANNUNZIO –
Denis GRAND –
Sue TAYLOR –
Chairman of VINCI Concessions
Chairman and CEO of VINCI Park
CEO of VINCI Park UK
Renaud LAROCHE –
CFO of VINCI Park
1
Programme
1.
Introduction
2.
VINCI Park – Presentation
3.
Challenges to be met
4.
Strategy
5.
Focus – VINCI Park in the UK
6.
Key figures
7.
Outlook
2
Introduction
3
Introduction
An excellent combination of complementary skills in construction and concessions
Fundamentals of the combination of skills:
 Entrepreneurial culture
 Commercial synergies based on a dense network of local companies (e.g.: building & civil
engineering  car parks, …)
 Recognised expertise (design capability, cost and schedule control, project management
know-how, operator know-how)
 Complementary business cycles: concessions generate recurring and growing revenue
Value creation: Cofiroute, VINCI Park, infrastructure concessions, etc …
4
Introduction
Concessions: a long-standing VINCI business line
 A growth model that draws on the strengths of a construction company
 Strong presence in France and in Europe
 Diversified portfolio
 A fully fledged VINCI business line
5
Introduction
Severn crossings
Newport bypass (south)
Dartford: 150,000 vehicles/day
150,000 car park spaces
Airport services at 2 airports
22,800 car park spaces
(including Luxembourg)
Liège airport: 200,000 PAX
Airport services at 15 airports
Confederation bridge: 13 km
Fredericton-Moncton motorway: 200 km
43,000 car park spaces
Airport services at 8 airports
Toll Collect (motorway toll system)
Airport services at 1 airport
SR91 express lanes: 17 km
Airport services at 72 airports
8,400 car park spaces
Cofiroute network: 1,100 km
ASF network: 3,100 km
450,000 car park spaces
Prado-Carénage tunnel
A86 west tunnel
Stade de France: 80,000 seats
Airport services at 4 airports
Grenoble airport (275,000 PAX)
2 bridges over the Tagus
14,500 car park spaces
22 airports: 23m PAX
Chillàn-Collipulli motorway: 165 km
3,400 car park spaces
5,700 car park spaces
Airport services at 1 airport
13,400 car park spaces
Airport services at 4 airports
29,800 car park spaces
Airport services at 1 airport
Rion-Antirion bridge
2 airports: 1m PAX
6
Presentation of VINCI Park
7
Presentation of VINCI Park
European leader in parking
Operating in 12 countries and 240 cities
 France : 165 cities
 International : 75 cities
Operates 811,000 paying parking spaces
and
1,400 kilometres of on-street regulated parking
Operates 1,250 car parks
 France : 550 car parks
 International : 700 car parks
8
Presentation of VINCI Park
No.1 in parking in France
Partenariats et synergies
 464,000 spaces under
management
(12/31/03)
 Operating in 165 cities
 Complementing the motorway
network in which VINCI is
involved (ASF, Escota,
Cofiroute)
Cofiroute network (65%)
ASF network (20%)
VINCI Park car parks
Airports
9
Presentation of VINCI Park
Strong operations in Europe
France
United Kingdom
Belgium
Austria
Czech Republic
Spain
Switzerland
Luxembourg
Slovakia
Canada
China
Chile
10
Presentation of VINCI Park
Breakdown by geographic region : 811,000 spaces
International
United Kingdom
Belgium
Luxembourg
Switzerland
Czech Republic
Austria
Spain
Slovakia
Canada
China
Chile
190 000
10 800
37 300
5 400
8 500
400
13 600
400
46 700
30 500
3 400
355,000
347,000
44%
13%
43%
109,000
International
Paris
French regions
France : 464,000 spaces
11
Presentation of VINCI Park
Breakdown by type of contract
57 %
2%
464 000
Concession
France : 464,000 spaces
167 000
36 %
Full ownership
17 000
International : 347,000 spaces
1%
47 000
Service provision
61 %
3%
14 000
330 000
41 %
283 000
14 %
85 %
297 000
3 000
1%
12
Breakdown by type of contract
Contract features
Capital intensity
%EBITDA/net sales
Duration
Pricing
Upstream customer
Final customer
Full ownership
Concession/lease
Service provision
high
high/medium
low
~ 45%
~ 45%
~ 13%
unlimited
30/15 years
3/5 years
unrestricted
unrestricted within a ceiling
lump sum+incentive
n/a
local authority/lessor
local authority/owner
motorist
motorist
local authority/owner
13
Presentation of VINCI Park
Breakdown by type of facility
39%
61%
318,000
493,000
on-street
car parks
14
Presentation of VINCI Park
Change: + 105,000 spaces in 2 years
CAGR : 7,5%
17 000
800 000
700 000
16 500
13 900
330 000
600 000
500 000
340 700
320 600
735,000
704,900
400 000
300 000
200 000
811,000
464 000
370 400
377 800
2001
2002
100 000
Service provision
Concession
2003
Full ownership
15
Presentation of VINCI Park
Average concession duration : 28 years
Calculation method: residual contract duration weighted by
EBITDA discounted at VINCI Park WACC (5.6%)
00
0
34
350 000
7
00
0
400 000
0
Concession
Full ownership
1
19
1
00
0
23
250 000
14
6
00
0
200 000
0
00
0
27
2048
00
32
2044
00
0
0
00
38
50 000
2040
46
59
00
0
00
78
100 000
0
10
6
00
0
150 000
2036
2032
2028
2024
2020
2016
2012
2008
0
2004
No; of spqces
00
0
27
300 000
16
Presentation of VINCI Park
Creation of a corporate identity and a business line
4,700 employees
 2 ,100 in France
 2,600 outside of France
Development of a strong corporate culture
 « VINCI Park et vous»
 VINCI Park Raid adventure
 Training institute
17
Challenges to be met
18
Challenges to be met
A combination of issues to be addressed
External factors
 »Arr êté Gallot» government ban on competition: July 2001 – June 2004
 Restriction on cars in cities
Internal factors
 End of several major contracts generating significant income (2002 – 2005)
 Request by several concession grantors for renegociation
19
Challenges to be met
Impact of contracts ended on net income
Annual net sales
lost
-9, 874
-9,398
-9,196
-12,469
-5,202
-8,311
Annual spaces lost
-14,621
-7,416
-10,166
-11,662
-9,294
-9,379
In M €
2002
2003
2004
2005
2006
2007
0
-1
-1
-2
-1,2
-1,9
-3
-4
-5
-4,2
-5,1
-6
-7
-6,3
Impact of contracts
ended on net income
• Effect of the strategy: At 12/31/03, loss of 10.6 M € completely offset
20
VINCI Park strategy
21
VINCI Park Strategy
Organisation
Action completed (2002 – 2003)
 Refocusing on core business: parking
Operational reorganisation: streamlining and decentralisation
 Reduction of overheads
Action under way (2004)
 Optimisation of purchasing policy
Total savings: 6 M € / year
22
VINCI Park Strategy
Development
Proactive strategy
- External growth
- Full ownership acquisitions
- Expansion outside France
Firm approach to contract renegotiation
Refocusing and margin improvement outside France
23
VINCI Park Strategy
Examples of acquisitions in 2002 and 2003
France
 01/02 - Pathé Ivry
 02/02 - Les tanneurs (Lille)
 05/02 - Park Heulin (François 1er, Pierre Charron, Vendôme, Saint Honoré, Bourse)
 05/02 - SPS (Saint Quentin, Compiègne, Tarbes, Amiens, …)
 05/02 - Mail Gaillardon (Melun)
 07/02 - Saint Denis Greneta (Paris)
 07/02 - Disneyland Paris
 12/02 - Saint Georges (Toulouse)
 12/03- Etoile Wagram (Paris)
No.of spaces
865
592
4 236
5 895
300
511
1 400
1 326
530
Outside France
 01/02 - Cardiff et Dundee Hospital car parks (UK)
 01/03 - 50% Gestipark (Canada)
 07/03 - Général Yague Car Park(Madrid / Spain)
 10/03 - Grotemarkt and Vemarkt car parks (Malines / Belgium)
 12/03 - Alexia car park (Bratislava / Slovakia)
 In progress - Simplon car park TGV station Lausanne
5 340
42 000
409
284
358
410
24
VINCI Park Strategy
Contract renegotiation
Concession contracts renegotiated in 2003
 Euralille: 14 years
 Grenoble: 20 years
 Grasse: 25 years
 Toulouse: new 23 year concession contract obtained
 Lille: Peuple Belge 50 years, Grand Place 45 years
Negotiations under way
 Boulogne-Billancourt
 Nancy
25
VINCI Park Strategy
Refocusing outside France
Expansion strategy
 Canada : acquisition of a 50% stake in Gestipark and increase planned
 Central Europe: foothold in Slovakia
 Expansion under way in Eastern and Central Europe based on the VINCI network
Disposal of minority interests
 Switzerland
 Portugal
Sale of non-strategic activities
 United Kingdom: Cinergic - October 2003
 Hong Kong : ASF and ACS - December 2003
26
VINCI Park Strategy
Sales and marketing strategy
Goal: strengthening appeal of the brand and the product
 Creation and launch of the VINCI Park brand in mid-2001
 Service revolution
 Sales and marketing activities
 Sales events
 Quality monitoring
27
Brand launch
Customer commitment
28
The service revolution
Related services provided free of charge
29
The service revolution
Related services provided free of charge
30
The service revolution
Services provided for a fee
Segway
Car rental
Car wash
Traffic information
31
The service revolution
Service advertising tools
32
Marketing activities
33
Sales events
34
Quality monitoring
Toll-free number – Increase in / reason for calls
• Some 1,000 calls per month, always responded to
• Complaints have platformed at about 10% of calls
100%
1400
1200
80%
OTHER
1000
60%
COMMERCIAL
800
ASSISTANCE
40%
600
400
COMPLAINTS
20%
DECEMBRE
NOVEMBRE
OCTOBRE
SEPTEMBRE
AOUT
JUILLET
JUIN
MAI
AVRIL
MARS
DECEMBRE
NOVEMBRE
OCTOBRE
SEPTEMBRE
2003
AOUT
JUILLET
JUIN
AVRIL
MARS
FEVRIER
JANVIER
MAI
2002
FEVRIER
0%
0
JANVIER
200
35
Quality monitoring
Sales and marketing strategy results
Preliminary results
 Name recognition survey carried out in Paris in October 2003
(ADVIR polling organisation – 1,300 persons interviewed)
 Sales and marketing strategy results
36
Quality monitoring
Name recognition survey: focus on the brand
Main results in October 2003
 Spontaneous recognition: What car park companies do you know by name ?
On-street
Total
Car park
59%
72%
76%
62%
37%
50%
24%
15%
2001
9%
2002
2003
2001
2002
2003
2001
2002
2003
37
Quality monitoring
Name recognition survey: focus on the brand
Main results in October 2003
 Prompted recognition: Which of these car park logos do you recognise by name ?
on-street
Total
66%
74%
2001
94%
88%
93%
40%
Car park
81%
57%
30%
2002
2003
2001
2002
2003
2001
2002
2003
« VINCI Park is now a strong brand»
Conclusion of the ADVIR survey – October 2003
38
Quality monitoring
Name recognition survey: focus on services provided
Other indicators in the survey
 Perception of services : VINCI Park has launched new services for customers. Have you
heard about them ?
14%
9%
11%
0%
0%
0%
2002
35%
24%
29%
2001
car park
on-street
Total
2003
2001
2002
2003
2001
2002
2003
39
Quality monitoring
Name recognition survey: focus on services provided
Other indicators in the survey
 Perception of services: If yes, which services have you heard about ?
63%
Prêt de vélo
36%
32%
Prêt de parapluie
Lavage automobile
24%
Stationnement gratuit anniversaire
Location de voiture
Location de Segway
Prêt d'un kit de dépannage - entretien
Distribution gratuite de journaux, magazines
Prêt de cabas
Service accompagnement
Autres
Toilettes
15%
11%
10%
8%
3%
3%
3%
2%
40
Quality monitoring
Les métiers
Name recognition survey: theoretical service price ratio
« Psychological price »
 The « PSYCHOLOGICAL PRICE» method is used to determine the maximum price that can be
charged
• above what price level would you stop coming?
• below what price would this car park seem too low-end?
(always full, poorly maintained, poor security,…)
Three lessons learned
 Prices are by and large well accepted today
 Business customers are prepared to pay a bit more
 Highlighting services makes it possible to raise the hourly rate by 0,10 to 0,50 €
41
Quality monitoring
Results of the sales and marketing strategy in Paris
Sample
 80 Parisian car parks (like-for-like basis)
VINCI Park locations in Paris
 Statistics between March 2001 and July 2003
 Number of customers :
• 11 million hourly customers per annum
• 28,000 season ticket holders
 Net sales (excl. VAT) :
• Hourly: 65 million euros
• Season tickets: 35 million euros
42
Quality monitoring
Results of the sales and marketing strategy in Paris
Context
Generally poor economy
 Restrictions on automobile traffic
Strategy implemented
 Creation of the brand, renovation of car parks and launch of services
 Sales activities to promote season tickets
Results
 Increase in net sales above inflation
43
Quality monitoring
Change in number of hourly customers and net sales in Paris
12%
+ 10,6%
Sample: 10.5 million hourly customers
10%
8%
6%
+2,4 %
4%
2%
0%
mars-01
juin-01
sept-01
déc-01
mars-02
juin-02
sept-02
déc-02
mars-03
juin-03
- 1,7%
-2%
-4%
-6%
- 6%
hourly customers
Automobile traffic in Paris (source: Paris police)
hourly net sales incl. inflation
hourly net sales
44
Quality monitoring
Change in number of season ticket customers and net sales in Paris
20%
Sample: 28,000 season ticket holders
+ 20,2%
• average monthly ticket price: 125 euros (excl. VAT)
+17,8%
• average collection per hourly customer: 6.20 euros (excl. VAT)
15%
One season ticket holder is equal to 20 hourly customers per month
+13,1%
10%
5%
0%
mars-01
juin-01
sept-01
déc-01
No. of seas.tickets
mars-02
juin-02
sept-02
Seas. ticket net sales incl.infl.
déc-02
mars-03
seas. ticket net sales
juin-03
45
Quality monitoring
Change in total number of customers and net sales in Paris
+ 13,9 %
14%
+
13,9%
One point in performance is equal to 1M euros
12%
10%
+ 7,8%
8%
6%
+ 3,7%
4%
2%
0%
mars-01
juin-01
sept-01
déc-01
mars-02
Total number of customers
juin-02
sept-02
Total net sales incl. inflation
déc-02
mars-03
juin-03
Total net sales
46
Focus on VINCI Park in the UK
47
VINCI Park
in key figures
48
VINCI Park in key figures
Key figures – 2003
2003
2002
Change
2003 / 2002
Change
2003 / 2002
(excl. translation
differences)
491
484
+ 1.4%
+ 4%
122
118
+3.4%
+4.9%
EBIT
117
113
+3.5%
+ 4.6%
Net income before
SOGEPARC goodwill
61.3
62.9
-2.5 %
- 2.1 %
Net income after
SOGEPARC goodwill
46.9
48.7
-3.7%
-3.1%
In millions of euros
Net sales (*)
EBITA (**)
*Like-for-like, excluding impact of contracts completed or won and excluding translation differences: + 3%
** EBIT before amortisation of goodwill allocated to fixed assets
49
VINCI Park in key figures
Change in net sales
• Full ownership and concessions drive growth in net sales
M euros HT
• Sales and marketing strategy support this growth
600
467
484
491
CAGR : +2.5%
400
130
128
126
CAGR : -1.5%
200
337
356
365
CAGR : +4.2%
0
2001
2002
2003
Concession net sales
Service provision net sales
Change 2003-2002 like-for like :
+3%
Concession :
+3.5%
Service provision:
+0.9%
50
VINCI Park in key figures
2003 EBIT slighty up, despite the impact of lost contracts
491
484
467
25.4%
24.1%
23.3%
119
2001
113
2002
Net sales
117
2003
EBIT
51
VINCI Park in key figures
Net income (before SOGEPARC goodwill) stable at a high level
65
13.0%
In millions of 'euros
13.2%
62
62,9
12.5%
60
61,3
55
2001
2002
Net income
2003
% net income / net sales
52
VINCI Park in key figures
Sectorial information
• concessions and full ownership facilities support EBIT growth
EBIT by business line as a % of net sales
40%
33,80%
35%
30%
28,90%
30%
25,40%
23,30%
25%
24,10%
20%
15%
8,60%
10%
5%
7,10%
3,60%
0%
2001
2002
Full ownership and concessions
2003
Service provision
Total
53
VINCI Park in key figures
Consolidated balance sheet
• Sound financial structure, low indebtedness
2003
2002
1,389
1,414
368
381
204
208
1,593
1,622
Shareholders’ equity
725
719
Provisions et other items
29
35
LT financial debt
520
567
Short term debts and liabilities
319
301
Total liabilities
1,593
1,622
Net financial debt
-479
-518
% debt at fixed interest rate
63%
63%
Assets
Fixed assets
O/w net goodwill
Current assets
Total assets
Liabilities
54
VINCI Park in key figures
Analysis of debt at 31December 2003
2003 net financial debt: 479 million euros
2003 gross financial debt: 520 million euros
Financing
 Long term: 87%
 Short term: 11%
 Local authorities: 2%
Average interest rate of long-term debt: 4.30% in 2003 (after hedging)
55
VINCI Park in key figures
Capex and financial investments
• VINCI Park adapted its capex and financial investments in 2003 to Group objectives
(in millions of euros)
2003
2002
2001
Maintenance capex
19
25
25
Net development capex
32
35
44
Net financial investments
5
48
35
Total
56
108
104
56
VINCI Park in key figures
Financing of capex and financial investments
• With average investment of some 80 M euros per year,
VINCI Park has stabilised its net indebtedness
(in millions of euros)
2003
2002
Operating cash flow
114
119
Capex and financial investments
-56
-108
Net changes in WCR and in scope of
consolidation
+18
+36
Free cash flow
+76
+ 47
Dividends paid
-37
-58
Change in net indebtedness
+39
-11
57
VINCI Park in key figures
Financial ratios
• Favourable ratios
• Significant additional leverage capacity
2003
2002
479
518
Net debt / equity
66%
69%
Net debt / operating cash flow
4.2
4.3
Net debt / EBITDA
2.9
2.9
Net financial debt (in millions of euros)
58
VINCI Park in key figures
Valuation of VINCI Park without development
Change in entreprise value without development
(1)
No-investment scenario
• Annual growth net sales: +3% and expenses: +2,1%
• Present value of FCF: EBITDA – maintenance capex – tax
• VINCI Park WACC: 5.6% at 12/31/2003
Enterprise value without investment
in bn €
Equity value without investment
3,5
3,0
2,5
In billions of euros
Enterprise value
2004
2010
2,0
2.3
2.2
1,5
1,0
2028
2024
2020
2016
0,5
2012
2.2
2008
1.8
2004
Equity value
(1) Net present value calculated for each period (at 12/31) based
on fucture FCF – discount rate: 5.6%
59
VINCI Park in key figures
Valuation of VINCI Park with development
Investment scenario
Comparative change in enterprise value with and
without development (1)
• 60 M euros invested over 11 years
Equity value without investment
•Project mix:
in bn €
• 2 full ownership – 50 years
• 2 concessions in large-sized cities – 30 years 3,5
• 2 concessions in medium-sized cities – 30 years3,0
2,5
• 2 concessions renewed – 15 years
• 1 acquisition
2,0
• Other parameters unchanged
Enterprise value without investment
Equity value
2.2
3.4
2028
2024
2020
3.5
2016
2.8
0,5
2012
2016
2008
2004
2004
Entreprise value
Enterprise value with investment
1,5
1,0
In billions of euros
Equity value with investment
(1) Net present value calculated for each period (12/31) based on future
FCF – discount rate: 5.6%
VINCI Park creates 400 million euros additional value by 2004
60
Outlook
61
Outlook
VINCI Park, European leader and service creator
Growth driven by services provided
 High quality facilities
 Recognised brand
 Focus on services
VINCI Park is pursuing an original and innovative sales and marketing strategy aimed
at:
– Enhancing the appeal of the brand
– Fastening growth of high added-value net sales
62
Outlook
VINCI Park, European leader and service creator
Growth opportunities
 France: ready to take advantage of the end of the ban on competition in July 2004
 International: strengthening operations in Europe and expansion in Central and Eastern
Europe
 Synergies with other VINCI Construction subsidiaries, VINCI Airport, COFIROUTE and ASF
 Cross-fertilisation through sharing of local know-how
Building the future:
future:
• Meeting environmental aspirations
• Creating the world leader in intermodal parking
63
A BIENTÔT
64