Touax: HALF-YEAR RESULTS 2023 Solid business model and operating performance

PRESS RELEASE        Paris, 13 September 2023 – 5.45pm

YOUR OPERATIONAL LEASING SOLUTION FOR SUSTAINABLE TRANSPORT

HALF-YEAR RESULTS 2023

Solid business model and operating performance

“Touax confirms the strength of its business model in a slowing economic environment. Timely investments in quality logistics assets on long-term leases and the mix of different segments in which we operate are boosting recurring revenues. Through two refinancing transactions, we have also extended the maturity of Touax SCA’s debt to mid-2027, enabling us to develop our investment strategy in support of sustainable transport,” say Fabrice and Raphaël Walewski, Touax SCA’s managing partners.

Restated revenue from Group activities (at €79.1 million, i.e. +0.9%) and consolidated EBITDA (at €28.9 million, i.e. -1.9%) were broadly stable compared with the end of June 2022. This performance was achieved in a largely anticipated context of normalisation in the Containers business after exceptionally favourable years in 2021 and 2022 for the industry as a whole.

The Group share of net profit was €5.1 million at 30 June 2023, compared with €7.6 million at end-June 2022 and €7.5 million for the full year 2022. This profit includes net exceptional income of €2.6 million (exceptional income of €3.5 million on the purchase of the minority stake in the Modular Buildings business; exceptional provision of €0.9 million due to a dispute).

Touax SCA has improved its debt profile by extending the maturity of its financing:

• In June, the Group repaid €10.0 million of the €15.0 million Euro-PP loan maturing in July 2023 in cash, and the balance by issuing €5.0 million new tranche on the 2022 sustainable-linked Euro-PP bond maturing in June 2027;
• Refinancing in July of the disintermediated loan of €40.0 million from a debt fund maturing in June 2024 by a bank loan for the same amount maturing in May 2027, in the form of a club deal with a syndicate of five banks.

These transactions follow the redemption in full of the TSSDI hybrid capital on 01 August 2022, which had already simplified the financing structure and optimised the cost of long-term resources against a backdrop of rising interest rates in the eurozone.

SIGNIFICANT ITEMS IN THE FINANCIAL STATEMENTS

(*) To provide a clearer understanding of business performance, the key indicators in the Group’s activity report are presented differently from the IFRS income statement. For this reason, no distinction is made between management on behalf of third parties, which is presented exclusively as an agent.
This presentation has no impact on EBITDA, operating income or net income. The accounting presentation of revenue from activities is given in the appendix to this press release.

STABLE BUSINESS IN THE FIRST HALF OF 2023

For the first half of the 2023 financial year, restated revenues from activities came to €79.1 million (€78.9 million on a like-for-like basis), a slight increase of 0.9% compared with the same period of 2022 (+0.7% on a like-for-like basis).

Owned activity totalled €73.9 million at 30 June 2023, up by €1.8 million compared with the end of June 2022. It benefited from the favourable trend in leasing revenue (+€0.9 million). Utilisation rates for freight railcars (89%), river barges (100%) and containers (95%) were high at 30 June 2023. Sales of owned equipment also increased by €0.8 million.

Management activity was down by €1.0 million in the first half, due to a €2.0 million reduction in syndication fees. However, sales fees rose by €0.9 million, reflecting the higher level of second-hand containers available for sale in 2023 in a market that is normalising.

ANALYSIS OF CONTRIBUTION BY DIVISION

Restated revenues for the Freight Railcars division amounted to €27.9 million at 30 June 2023, an increase of €1.5 million.

This change is attributable to the €1.9 million increase in leasing activity (+7.7%). The average utilisation rate of the owned wagon fleet was 88.5% in the first half of 2023, compared with 87% in the first half of 2022. The absence of syndication to investors in the first half of the year explains the €0.3 million reduction in management activity.

Restated revenues for the River Barges division were down slightly by €0.1 million at the end of June 2023. Leasing revenue rose by €0.4 million, benefiting from a fleet utilisation rate of 100% throughout the half-year and the latest investments made. Ancillary services fell by €0.5 million: chartering activity on the Rhine basin had been very buoyant over the same period in 2022.

Restated revenues for the Containers division amounted to €35.1 million at end-June 2023, down €6.2 million against a backdrop of normalisation across the industry in 2023, after exceptional years in 2021 and 2022.

Nevertheless, leasing revenue rose by 11.2% over the half year (+€0.8 million). Ownership activity was slowed by a less buoyant market for new containers, resulting in a €4.6 million fall in sales of owned equipment and a €1.7 million fall in ancillary services (pick-up charges).

With fewer transactions carried out, syndication fees also fell by €1.5 million. However, given the higher volume of used containers available for sale, sales fees rose by €0.9 million.

Lastly, revenues from the Modular Buildings business, reported under “Other”, rose sharply to €8.6 million (up €5.6 million over the first half). Touax produced and delivered a large number of orders at the start of the year, after a low point in 2022 when the pandemic ended.

RECURRING PROFITABILITY

EBITDA for the first half was down slightly by €0.6 million (-1.9%) at €28.9 million.

EBITDA for the Freight Railcars division came to €14.9 million, down slightly by €0.3 million, following a €1.6 million increase in operating expenses relating to the maintenance and repair cycle.

The River Barges division recorded EBITDA of €2.5 million, up by €0.4 million (+19%), due to lower chartering costs, while leasing revenues performed well over the half-year.

EBITDA for the Containers division fell by €3.7 million to €8.8 million at 30 June 2023, due to lower half-year revenues (74% of the €6.2 million fall was attributable to the normalisation of container sales prices). Conversely, the cost of equipment sales improved by €2.7 million.

The Modular Buildings business, on the other hand, saw its EBITDA rise by €3.3 million, well above breakeven thanks to a significant increase in equipment deliveries.

The Group’s depreciation, amortisation and provisions increased by €1.3 million, due to the gradual increase in investments in Touax’s balance sheet over the last three years. Current operating income therefore came to €14.7 million, €1.8 million lower than at end-June 2022.

Touax recorded net exceptional income of €2.6 million in the first half of 2023, linked on the one hand to accounting income (non-cash) of €3.5 million relating to the purchase in January of minority interests in the Modular Buildings business in Africa, and on the other hand to a provision of $1.0 million following the conviction in the United States of the former subsidiary of Modular Buildings in that country for an old dispute.

The net financial expense was €9.8 million, compared with €6.8 million at end-June 2022. The €3.0 million increase in net financial expense is mainly due to the full effect on 2023 of the rise in interest rates, which accelerated from the end of the first quarter of 2022, impacting the Freight Railcars and Containers divisions.

Net profit attributable to the Group was €5.1 million (compared with €7.6 million at 30 June 2022), representing 6.4% of restated revenue from activities.

A BALANCED FINANCIAL STRUCTURE

Touax’s balance sheet strength is reflected in a lower loan-to-value ratio of 57.4% at 30 June (compared with 59.5% at 31 December 2022 and 56.0% at 30 June 2022). The financial structure has been reinforced by the recent debt refinancing carried out by the parent company Touax SCA, providing greater certainty over the debt profile until mid-2027.

Shareholders’ equity was stable at 153.5 million euros, compared with 153.7 million euros at the end of December 2022. The allocation of the half-year profit was offset by distributions (dividend 2022 and payment to general partners) totalling €1.5 million, by a negative change in reserves of €1.5 million mainly due to translation adjustments, and by a €2.3 million reduction in minority interests in the Freight Railcars business.

Consolidated cash position fell by €10.8 million compared with the end of December, with €10.0 million used in June to repay part of the Euro-PP debt. The level of cash on the balance sheet at 30 June 2023 remains comfortable, at 45.2 million euros, and includes a temporary working capital surplus of 11 million euros on the container management business.

OUTLOOK

The Touax Group confirms its strategy of making recurring investments in quality assets leased over a long period, while remaining cautious in the face of current market conditions.

Touax’s activities should continue to benefit from the growing awareness of the need to decarbonise the economy and transport and the need to renew infrastructure.

Touax, which enjoys a unique position in sustainable transport, is increasingly committed to respecting the environment and good practices in terms of social responsibility and governance. Touax’s extra-financial ESG rating (by EcoVadis) is among the best in its industry², and the Group is building on this strength by working on a continuous improvement plan.

Touax’s aim is to provide its customers with an ever-better service in the field of sustainable transport. Our various asset classes benefit from the development of infrastructure, e-commerce and intermodal logistics, corresponding to the expectations of consumers, manufacturers, public authorities, lenders and investors.

UPCOMING DATES

• 13 September 2023: Videoconference presentation of half-year results in French
• 14 September 2023: Videoconference presentation of half-year results in English
  • 14 November 2023: Revenue for the 3^rd quarter 2023

The TOUAX Group leases tangible assets (freight railcars, river barges and containers) every day throughout the world, both for its own account and on behalf of investors. With €1.2 billion under management, TOUAX is one of Europe’s leading leasing companies for this type of equipment.

TOUAX is listed in Paris on EURONEXT – Compartment C (ISIN Code FR0000033003) and is included in the CAC® Small, CAC® Mid & Small and EnterNext©PEA-PME 150 indices.

For more information: www.touax.com

Your contacts :

TOUAX        ACTIFIN

Fabrice & Raphaël WALEWSKI        Ghislaine Gasparetto

touax@touax.com         gasparetto@actifin.fr

Tel : +33 1 46 96 18 00        Tel: +33 1 56 88 11 11

APPENDICES

1 – Analysis of restated revenue from activities

2 – Reconciliation of accounting presentation to restated presentation

3 – Breakdown of restated revenue from activities by division

1 EBITDA / Restated revenue from activities
2 With an EcoVadis rating of 63/100 at the end of 2022, Touax is in the top 9% of its industry.

Attachment

• ENG TOUAX PR – Half-year results 2023