(a) including €4 M in non-current expenses during the first half 2017 pertaining to pre-decommissioning work at the Dunkirk site.

Note: Seasonal nature of business at Colas

Given the highly seasonal nature of the majority of Colas’ businesses, it is important to underline the fact that the Group’s half-year results are not representative of its full-year performance. The acquisition of Miller McAsphalt further reinforces the seasonal nature of the Group’s business, posting half-year revenue[1] of €243 million along with a neutral contribution to current operating income.

1st half-year revenue 2018 is up 7%

Revenue for the first half of 2018 amounted to €5.4 billion, up 7% compared to 2017 (+4% at constant scope and exchange rates). The situation is contrasted between the Roads segment, which is up 11%, and the Specialized activities segment, which recorded a 7% drop. 

Roads:

In the first half, revenue from the Roads segment amounted to €4.4 billion, up 11% compared to 2017 (+7% at constant scope and exchange rates):

• revenue in Mainland France rose by 5% compared to the first half of 2017. All six regional subsidiaries contributed to this increase, in line with market growth;
• revenue in Europe increased by 12% (+14% at constant scope and exchange rates). Growth remains strong, both in the British Isles and Continental Europe, especially in central Europe;
• revenue in North America was up 24% (+3% at constant scope and exchange rates), mostly in Canada due to the contribution of Miller McAsphalt;
• in the Rest of the World (International units, excluding Europe and North America), revenue was up 8% (+12% at constant scope and exchange rates). Growth was strong in Oceania (+17% at constant scope and exchange rates), boosted by Australia.

Specialized Activities:

In the first half of 2018, revenue from the Specialized Activities segment totaled €903 million, down 7% compared to the first half of 2017 (-7% at constant scope and exchange rates). This drop is mainly attributable to Networks (-16%) and Railways (-9%), the latter being impacted by a decline in business in France, a consequence of the situation at the French national rail company, SNCF.

Profitability

Current operating income in the first half of the year amounted to -€174 million, compared to -€136 million in the first half of 2017, down €38 million.

Current operating income remained stable in the second quarter at €128 million:

• it benefitted from a rising contribution from the Roads segment, after a first quarter impacted by severe weather in most areas,
• on the other hand, it was negatively impacted by difficulties in the Railway business in France, in the wake of a decline in business, mainly due to the situation at the French national rail company, SNCF.

Income from associates and joint ventures totaled €17 million compared to €33 million at the end of June 2017, due to a smaller contribution from Tipco Asphalt, which experienced a slowdown in business.

Net income attributable to the Group amounted to -€130 million in the first half of 2018, compared to -€88 million in the first half of 2017.

Net debt

Net financial debt as of June 30, 2018 totaled €1,314 million, compared to net financial debt of €570 million at the end of June 2017. The change from December 31, 2017 (net financial surplus of €433 million) includes the acquisition of the Miller McAsphalt Group in Canada, in addition to the impact of the usual seasonal nature of businesses.   

Work on hand

Work on hand at the end of June 2018 amounted to €9.5 billion, up 18% from the end of June 2017.  These figures include €0.8 billion pertaining to Miller McAsphalt. At constant exchange rates, work on hand was up 21% (+11% excluding Miller McAsphalt). Work on hand for Mainland France is up 8% while work on hand for the international and overseas units is up 25%.

Outlook

2018 revenue is expected to be significantly higher than in 2017, due in particular to Miller McAsphalt's contribution. Current operating profit margin is expected to improve, subject to the usual weather conditions and the availability of raw materials.

[1] as of March 2018; the contribution for March to June is posted in the 2nd quarter.