ID Logistics increases business volume and improves profits in the first half of 2019.

ID Logistics, an international logistics operator, presents its results for the first half of 2019. Its revenues totaled €744,5 million, an increase of 10,9% (9,4% at constant exchange rates). On the other hand, ordinary operating income increased by 31%, reaching €19,5 million. Net profit remained at €6,6 million.

Eric Hémar, President and CEO of ID Logistics, comments: “We maintained our financial performance at the highest level in the first half of 2019, thanks to strong demand from our customers for an efficient logistics organization. We maintain a solid position, which leads us on a path of growth and increased profitability. Increasing customer satisfaction, expanding our portfolio and broadening our geographic presence allows us to move firmly towards our goal.”

Key financial indicators

Rapid revenue growth

ID Logistics' revenues in the first half of the year reached 744,5 million euros, an increase of 9,4%, or 10.9% at constant exchange rates.

• In France, revenues totaled €394,0 million, an increase of 5,6% compared to the first half of 2018. This growth was primarily driven by new contracts initiated in 2018 and early 2019.
• International revenues totaled €395,5 million, a 13,1% increase compared to the first half of 2018. Due to the negative exchange rate effect and the accounting treatment for hyperinflation in Argentina, organic growth was 16,0%. The contribution of the aforementioned new contracts, as well as the positive price and volume effects, managed to offset the vast majority of currency headwinds. Performance in international markets was primarily driven by Spain, Germany, the Netherlands, and Russia.

Increased benefits from ordinary activities

ID Logistics demonstrated a clear improvement in the profitability of its operations. Profit from ordinary activities reached €19,5 million in the first half of 2019. This represents an operating margin of 2,6%, an increase of 31% compared to the same period in 2018. The entry into force of the new IFRS 16 standards in 2019 had a positive effect on this result. Excluding the effect of the new IFRS standards, profit from ordinary activities totaled €17,2 million, 15,4% more than in the first half of 2018.

• In France, the operating margin increased by 3,7%, including the impact of IFRS 16, compared to 3,6% in the same period of 2018. The operating margin continued to improve progressively, keeping the cost of new contracts initiated in 2019 under control and absorbing the negative impact of the end of the CICE tax credit.
• Internationally, the operating margin increased by 1,1%, excluding the impact of IFRS 16, representing an improvement compared to the first half of 2018. Increased productivity on existing contracts offsets the initial start-up costs of new contracts, in line with strong business growth and taking into account estimated unfavorable exchange rate effects of €0,3 million.

Net profit for the first half of 2019 decreased slightly to €6,6 million, compared to €7,4 million in the first half of 2018. This figure excludes a negative effect of €1,6 million resulting from the entry into force of IFRS 16 standards. Without this latter impact, net profit is €8,2 million, representing an increase of 10,8%.

Strong economy and solid financial structure

The improvement recorded in the second half of 2018, the increase in EBITDA, and sound treasury management contributed to increased liquidity generation. This increase was applied to new investments, which totaled €36,7 million in the first half of 2019, compared to €23,2 million last year. The majority of these investments are in new projects initiated in the last 12 months or the following 12 months, with a significant automation component to meet customer demand.

As of June 30, 2019, ID Logistics' net debt was €81,9 million, excluding the effect of IFRS 16, down from €63 million on December 31, 2018. Since lease liabilities were included under IFRS 16, the total debt amounted to €411,8 million. Therefore, maintaining EBITDA at a level of 1x, excluding the effect of IFRS 16 (2x EBITDA after IFRS 16), reflects ID Logistics' high investment capacity.

Revenue will continue to increase during the current period. In line with typical business seasonality, ID Logistics expects to achieve a higher level of profitability during the second half of the year compared to the first.

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