EuroBusinessMedia (EBM): Eurotunnel has just reported earnings for the first-half of 2007. Well, to be perfectly precise, the name "Eurotunnel" no longer applies, as that company has ceased to exist since the month of June, when it was taken over by "Groupe Eurotunnel SA" as part of the financial restructuring. Jacques Gounon, welcome. You are the CEO of Groupe Eurotunnel SA. What are your comments on the company's performance in the first-half?
Jacques Gounon (JG): Quite easy to make comments, because these results are very good, even if they are the past TNU story. The turnover growth is +7%, the growth in the operational margin is + 15% and the growth in the EBIT, the operational result, is + 52%. So it's really difficult to say that these are not good results! More than that, it's clear that the context is very positive. And I am fully confident for the second semester, because I think what is important of course is the full year. And we have some specific events in the second semester which are very good for Eurotunnel. We have the Rugby World Cup - so a lot of additional passengers - and more than that, we have the St. Pancreas inauguration for Eurostar, that means the new high-speed line in Great Britain. And this is more than a positive impact on the end of the second semester; this is a positive trend for the future. So really, I'm fully confident for 2007.
EBM: As we've seen, your operational KPI's, or key performance indicators, have dramatically improved these past semesters. Should we expect this trend to continue at the same pace?
JG: I will try to do that. It's clear that over the past three years we have increased, in a very significant way, all these KPIs and it's clear that it's now a clear track record for the new Groupe Eurotunnel SA, and of course we intend to continue at this pace. And more than that, we have to keep in mind that the debt has been halved and so the financial structure and the financial cost of course will decrease, which means that, all in all, the future for Groupe Eurotunnel SA is something which is quite understandable and quite visible for all the investors.
EBM: Pursuant to the financial restructuring that you've implemented, can we now consider that Groupe Eurotunnel is back on track, back in working order, and that the financial difficulties are definitively a part of the past?
JG: Sure, it's clear that the new Groupe Eurotunnel is something which is absolutely different from the past, difficult, turmoil story of the Eurotunnel, which is now renamed TNU. So we have, for the past, TNU with such difficulties which are well known and for the future, we have a very new approach, very aggressive on commercial issues with good successes. It's clear that the environment also is positive, because our competitors, and mainly the airports, are facing the difficulties which are well known; we are able to deliver a very high quality of services which is really appreciated by our customers. So, a very reliable financial structure, growth on all the operational indicators, yes, there is something that is quite attractive for the future.
EBM: When will the new company post a net profit and pay out dividends to shareholders?
JG: It's always difficult to commit, but I have no problem to say that if 2007 is clearly a transition period, it's clear that the target for 2008 is to deliver something which could satisfy all the investors. And in the same work plan, which has been designed for such purpose, the first dividend is scheduled for 2011. If we can shorten, of course, we will do.
EBM: How is cross-Channel traffic evolving, and what of your revenues from car and truck shuttles? I also understand that you are particularly concerned about the current situation in rail fret.
JG: Yes, it's funny I would say, but there are two different scopes: on the passengers and trucks and our shuttles we are on a + 8% growth rate, which is very ¬good - perhaps we'll slightly decrease but we're on the right trend. As far as Eurostar is concerned, the new inauguration of St. Pancreas in a few days, plus the fact that the journey is shortened to only 2 hours 15 minutes between London and Paris is something which will give additional passengers and some additional revenues for the company. Unfortunately, on the rail freight side, even with this activity in the hands of our partners, which are EWS in Great Britain and Fret SNCF in France, it's clear that the conditions are not here in order to restart this business, to develop this business. Some subsidies have been put in place by the UK government - and I pay tribute to this move. We need something which is equivalent on the French side if we want the rail freight starting again.
EBM: Groupe Eurotunnel does indeed belong to the penny stock category, trading at about 30 cents per share. You've decided to move the stock out of this category by regrouping the shares shortly. When and how will this be done?
JG: As soon as possible, that means in the weeks to come. It will be a consolidation on the basis of a ratio of 1 to 40. The purpose of such consolidation of course is to clearly identify that Groupe Eurtonnel SA is a kind of new company, whose future is clearly different from the past TNU and that now, such Groupe Eurotunnel SA, which is listed in Paris and London, could be compared to other companies, like infrastructure companies. That's the purpose of such consolidation.
EBM: You also intend to launch a capital increase to buy back some of your convertible bonds. When and how will this take place?
JG: This will take place next year, because today we release the first semester - which are not the Groupe Eurotunnel SA - accounts, but which is a set of accounts of the past TNU. So if we want to have a clear understanding of what the trends are, what the track records of the Groupe Eurotunnel SA are, we need to wait to release the full set of accounts for 2007. And so, if we look at the timetable, of course such capital increase, which is a commitment of the safeguard plan, has to take place at Easter 2008.
EBM: Finally, for investors considering making a long-term investment in Eurotunnel, what would be some of the key points that you would put forth?
JG: More than key points, I would say key words. It's an infrastructure. It's a concession - it's a long-term concession up to 2086. It's a profitable concession. We have a very good track record on the operational results since the turnaround we made three years ago. So now we have a clear visibility, a clear understanding of what the prospects of this company are. So I think, yes, it's really attractive for long-term investors, as Groupe Eurotunnel SA is a new positive story.
EBM: Jacques Gounon, CEO of Groupe Eurtonnel SA, thank you very much.
JG: Thank you.
