Wrap Text
Vivo Energy plc First Quarter 2018 Results
Vivo Energy plc
(Incorporated in England and Wales)
(Registration number: 11250655)
(Share code: VVO)
LEI: 213800TR7V9QN896AU56
ISIN: GB00BDGT2M75
Vivo Energy plc First Quarter 2018 Results
A good start to the year
Vivo Energy plc ("Vivo Energy" or the "Company") announces interim consolidated financial results for the
quarter ended 31 March 2018, following the admission of its shares to trading on the Main Market for listed
securities of the London Stock Exchange, and to listing and trading as a secondary inward listing on the Main
Board of the securities exchange operated by the Johannesburg Stock Exchange (together, "Admission") on 10 May 2018
(the "IPO"). References in this announcement to "Vivo Energy" or the "Group" mean the Company and Vivo Energy Holding B.V.
("VEH", the holding company of the Vivo Energy group until Admission), together with its consolidated subsidiaries and
subsidiary undertakings. Refer to the Non-GAAP financial measures definitions of Adjusted EBITDA and Adjusted Net Income and
reconciliations to the most comparable IFRS measures in the interim consolidated financial statements for the
three month period ended 31 March 2018 (Note 4). The Group defines Gross Cash Profit as Gross profit
adjusted to exclude depreciation and amortisation expense.
KEY PERFORMANCE INDICATORS
Three-month Three-month
period ended period ended
($ in millions), if not otherwise indicated 31 March 2018 31 March 2017 Change
Volumes (million litres) 2,289 2,189 +5%
Gross Cash Profit 170 160 +6%
Adjusted EBITDA 102 96 +6%
Net Income 43 42 +3%
Adjusted Net Income 48 42 +15%
Christian Chammas, CEO of Vivo Energy, commented: "We have made a good start to 2018,
reflected in a strong set of results across our operations. Performance was underpinned by
continued growth in volume and gross cash profit, as well as our relentless focus on
enhancing our customer value proposition across all segments, whilst driving efficiency
throughout the business."
Highlights
- Total Volumes up 5% year-on-year, driven by expansion of the retail network across the
portfolio and strong volume performances in our Commercial and Lubricants segments
- Adjusted EBITDA up 6% year-on-year, primarily as a result of higher volumes and strong margins
- Adjusted Net Income, before the impact of special items mainly associated with IPO related
costs, up 15% year-on-year
- Completed joint venture agreement to acquire KFC Botswana
- Subsequent to the reporting period, the Group established a new $400m revolving credit facility at
Admission; terminates in three years with two possible one-year extensions; security granted
in respect of the facility was released on Admission
- On 30 May 2018 announced the proposed issue of new five or seven year $[400]m Senior
Notes due 2023 or 2025 (the "Notes") to refinance existing indebtedness and pay fees and
expenses related to the IPO and the offering of the Notes.
OVERVIEW OF OPERATIONS BY SEGMENT
Three-month Three-month
period ended period ended
($ in millions), if not otherwise indicated 31 March 2018 31 March 2017 Change
Volumes (million litres)
Retail 1,300 1,219 +7%
Commercial 956 938 +2%
Lubricants 33 32 +3%
Total 2,289 2,189 +5%
Gross Cash Unit Margin ($ / 000 litres)
Retail Fuel 79 76 +4%
Commercial 46 44 +5%
Lubricants 546 624 -12%
Total 74 73 +2%
Gross Cash Profit
Retail (including Non-Fuel Retail) 108 98 +10%
Commercial 44 42 +7%
Lubricants 18 20 -10%
Total 170 160 +6%
Retail
Retail volume growth was 7%, as a result of continued network expansion across the business, whilst
maintaining average throughput performance for the retail network in line with full year 2017 levels.
Overall Gross Cash Profit was up 10%, supported by enhanced volumes, incremental unit margin
growth, as well as the ongoing expansion of Non-Fuel Retail activities.
Commercial
Commercial volume growth was 2% and Gross Cash Profit was up 7%. Gross Cash Profit increased
across all parts of the Commercial segment, especially in Aviation and Marine, where several new
tenders were won. Overall, 74% of volumes were generated by core Commercial customers in the
B2B, Mining and LPG channels, which contributed 86% of Commercial Gross Cash Profit, with the
remainder driven by Aviation and Marine.
Lubricants
Lubricants volumes were up 3% but Gross Cash Profit was down 10%. Consistent volume growth in
the Retail and B2C channels was offset by lower Gross Cash Unit Margins due to increasing base oil
market prices during the quarter. Overall, the Retail and B2C channels accounted for approximately
60% of volume and Gross Cash Profit within Lubricants.
FY 2018 OUTLOOK
During the first quarter of 2018, the Company progressed steadily towards meeting the Group's
objectives for the year. Looking ahead, we continue to expect annual volume growth to be within
our target mid-single digit percentage range, with an overall broadly stable total Gross Cash
Unit Margin.
Vivo Energy expects to provide further updates on its medium term objectives, including the impact
of the Engen transaction, in due course after completion of the transaction.
NOTE
The following interim consolidated financial statements were prepared in connection with the offering
of the Notes. The Company does not intend to publish quarterly financial statements on an ongoing basis.
Ends
Enquiries:
Media
Tulchan Communications LLP
+44 20 7353 4200
Martin Robinson, Tony Bates
vivoenergy@tulchangroup.com
Vivo Energy
Rob Foyle
+44 1234 904 037
rob.foyle@vivoenergy.com
Investors
investors@vivoenergy.com
Notes to editors:
Vivo Energy operates and markets its products in countries across North, West, East and Southern Africa.
The Group has a network of over 1,800 service stations in 15 countries and exports lubricants to a number of
other African countries. Its retail offering includes fuels, lubricants, card services, shops and other non-fuel
services (e.g. oil change and car wash). It provides fuels, lubricants and liquefied petroleum gas (LPG) to
business customers across a range of sectors including marine, mining, construction, power, transport, and
manufacturing. Jet fuel is sold to customers at 23 airports under the Vitol Aviation brand.
The Company employs around 2,360 people and has access to approximately 943,000 cubic metres of fuel
storage capacity. The Group's joint venture, Shell and Vivo Lubricants B.V., sources, blends, packages and
supplies Shell-branded lubricants and has blending capacity per annum of around 158,000 metric tonnes at
plants in six countries (Ghana, Guinea, Ivory Coast, Kenya, Morocco, and Tunisia).
This announcement is available on the Company's website: http://investors.vivoenergy.com
This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire
securities of Vivo Energy plc or any of its affiliates in any jurisdiction or an inducement to enter into
investment activity.
Forward looking-statements
This announcement includes forward-looking statements. These forward-looking statements involve known and unknown
risks and uncertainties, many of which are beyond the Company's control and all of which are based on the Directors'
current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of
forward-looking terminology such as "believe", "expects", "may", "will", "could", "should", "shall", "risk", "intends",
"estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned", "anticipates" or "targets" or the negative
thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that
are not historical facts. They appear in a number of places throughout this report and include statements regarding the
intentions, beliefs or current expectations of the Directors or the Group concerning, among other things, the future
results of operations, financial condition, prospects, growth, strategies of the Group and the industry in which it operates.
No assurance can be given that such future results will be achieved; actual events or results may differ materially as a
result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary
materially from the future results indicated, expressed, or implied in such forward-looking statements.
Such forward-looking statements contained in this report speak only as of the date of this report. The Company and the
Directors expressly disclaim any obligation or undertaking to update these forward-looking statements contained in the
document to reflect any change in their expectations or any change in events, conditions, or circumstances on which
such statements are based unless required to do so by applicable law.
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three-month period ended 31 March 2018
Terms and abbreviations
Term Description Term Description
EBIT Earnings before financing expense, financing FVTPL Fair value through profit and loss
income and income taxes GAAP Generally accepted accounting principles
EBITDA Earnings before financing expense, financing HSSE Health, safety, security and environment
income, income taxes, depreciation, IAS International Accounting Standards
amortisation and impairment charges IASB International Accounting Standards Board
EBT Earnings before income taxes IFRIC IFRS Interpretation Committee
EPS Earnings per share IFRS International Financial Reporting Standards
ETR Effective tax rate NCI Non-controlling interest
FCF Free cash flow OCI Other comprehensive income
FVTOCI Fair value through other comprehensive income P&L Profit and loss
PP&E Property, plant & equipment
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three-month Three-month
Notes period ended period ended
US $'000 31 March 2018 31 March 2017
Revenues 4 1,777,792 1,607,561
Cost of sales (1,623,991) (1,462,061)
Gross profit 4 153,801 145,500
Selling and marketing cost (44,407) (41,158)
General and administrative cost (40,492) (31,754)
Share of profit of joint ventures and associates 5,412 2,696
Other income (expense) 5 (141) 299
EBIT 4 74,173 75,583
Finance income 1,605 1,073
Finance expense (8,067) (8,483)
Finance expense - net 6 (6,462) (7,410)
EBT 67,711 68,173
Income taxes 7 (24,552) (26,185)
Profit 4 43,159 41,988
Profit attributable to:
Owners of the company 39,783 38,938
NCI 3,376 3,050
43,159 41,988
OCI
Items that may be reclassified to profit or loss
Currency translation differences 22,949 6,501
Net investment hedge - net loss (4,989) -
Items that are never reclassified to profit or loss
Re-measurement of retirement benefits 33 680
Income tax relating to retirement benefits - (211)
OCI, net of tax 17,993 6,970
Total comprehensive income 61,152 48,958
Total comprehensive income attributable to:
Owners of the company 54,984 45,127
NCI 6,168 3,831
61,152 48,958
EPS (US $) 8
Basic 17.68 17.31
Diluted 17.39 17.02
NON-GAAP FINANCIAL MEASURES1
Three-month Three-month
period ended period ended
US $'000 31 March 2018 31 March 2017
Adjusted EBIT 79,260 75,583
EBITDA 96,453 95,721
Adjusted EBITDA 101,540 95,721
Adjusted net income 48,095 41,988
Adjusted EPS (US $) 19.55 17.02
The notes are an integral part of these interim consolidated financial statements.
(1) Refer to the Non-GAAP financial measures definitions of these metrics and reconciliations to the most comparable
IFRS measures (note 4).
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
US $'000 Notes 31 March 2018 31 December 2017
Assets
Non-current assets
Property, plant and equipment 599,068 585,171
Right-of-use assets 153,561 148,413
Intangible assets 125,935 119,993
Investments in joint ventures and associates 225,292 218,801
Deferred income taxes 42,705 42,627
Available for sale investments 6,327 6,314
Other assets 9 105,586 82,171
1,258,474 1,203,490
Current assets
Inventories 10 412,632 353,129
Trade receivables 490,355 412,181
Other assets 9 272,644 229,068
Income tax receivables 6,017 8,452
Other financial assets 3,734 -
Cash and cash equivalents 385,732 422,494
1,571,114 1,425,324
Total assets 2,829,588 2,628,814
Equity and liabilities
Total equity
Attributable to equity holders of Vivo Energy Holding B.V. 456,530 401,546
Attributable to NCI 52,243 46,075
508,773 447,621
Liabilities
Non-current liabilities
Lease liability 124,432 121,261
Borrowings 11 400,422 396,244
Provisions 92,831 91,982
Deferred income taxes 54,428 51,388
Other liabilities 12 184,037 168,245
856,150 829,120
Current liabilities
Lease liability 17,437 12,496
Trade payables 1,046,750 868,521
Borrowings 11 210,933 258,947
Provisions 19,966 20,866
Other financial liabilities - 664
Other liabilities 12 131,616 152,409
Income tax payables 37,963 38,170
1,464,665 1,352,073
Total liabilities 2,320,815 2,181,193
Total equity and liabilities 2,829,588 2,628,814
The notes are an integral part of these interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
US $'000 For the three-month period ended 31 March 2018
Attributable to equity holders of Vivo Energy Holding B.V.
Other reserves
Currency Fair
Share Share Retained Retirement Translation Value Management NCI
Capital Premium Earnings Benefits Difference Reserves Equity Plan Reserves Total NCI Total Equity
Balance at 1 January 2018 30 244,753 309,218 (2,294) (160,226) 2,446 1,904 5,715 401,546 46,075 447,621
Profit - - 39,783 - - - - - 39,783 3,376 43,159
OCI - - - 33 15,168 - - - 15,201 2,792 17,993
Total comprehensive income - - 39,783 33 15,168 - - - 54,984 6,168 61,152
Share based payments - - - - - - - - - - -
Dividends paid - - - - - - - - - - -
Balance at 31 March 2018 30 244,753 349,001 (2,261) (145,058) 2,446 1,904 5,715 456,530 52,243 508,773
US $'000 For the three-month period ended 31 March 2017
Attributable to equity holders of Vivo Energy Holding B.V.
Other reserves
Currency Fair
Share Share Retained Retirement Translation Value Management NCI
Capital Premium Earnings Benefits Difference Reserves Equity Plan Reserves Total NCI Total Equity
Balance at 1 January 2017 30 244,753 473,501 (4,233) (175,396) 2,281 1,814 5,715 548,465 39,993 588,458
Profit - - 38,938 - - - - - 38,938 3,050 41,988
OCI - - - 469 5,720 - - - 6,189 781 6,970
Total comprehensive income - - 38,938 469 5,720 - - - 45,127 3,831 48,958
Share based payments - - - - - - 22 - 22 - 22
Dividends paid - - - - - - - - - - -
Balance at 31 March 2017 30 244,753 512,439 (3,764) (169,676) 2,281 1,836 5,715 593,614 43,824 637,438
The notes are an integral part of these interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three-month Three-month
period ended period ended
US $'000 Notes 31 March 2018 31 March 2017
Operating activities
Profit 43,159 41,988
Adjustment for:
Income taxes 24,552 26,185
Amortisation, depreciation and impairment 22,280 20,138
Net (gain)/loss on disposal of PP&E and intangible assets 5 (27) 139
Share of profit of joint ventures and associates (5,412) (2,696)
Dividends received from joint ventures and associates - 367
Current income tax paid (21,318) (40,911)
Net change in operating assets and liabilities and other adjustments 13 (25,799) (11,077)
Cash flows from operating activities 37,435 34,133
Investing activities
Acquisition of businesses (547) -
Purchases of PP&E and intangible assets (20,479) (20,339)
Proceeds from disposals of PP&E and intangible assets 424 248
Cash flows from investing activities (20,602) (20,091)
Financing activities
Net proceeds from long-term debt - 472
Net repayments of bank and other borrowings (49,159) (61,429)
Repayment of lease liability (5,217) (4,664)
Interest paid (8,301) (5,889)
Interest received 1,498 1,073
Cash flows from financing activities (61,179) (70,437)
Effect of exchange rate changes on cash and cash equivalents 7,584 3,405
Net decrease in cash and cash equivalents (36,762) (52,990)
Cash and cash equivalents at beginning of period 422,494 368,653
Cash and cash equivalents at end of period 385,732 315,663
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The Company's condensed interim consolidated financial statements have been prepared in accordance with
IAS 34 'Interim Financial Reporting Standards' as adopted by the European Union. The condensed interim
consolidated financial statements have been prepared under the historical cost convention unless otherwise
indicated.
These interim financial statements should be read in conjunction with the annual financial statements for the
year ended 31 December 2017, which have been prepared in accordance with IFRS as adopted by the
European Union.
2. Significant changes in the current and future reporting period
A number of new standards and amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2018.
IFRS 2 'Amendments to Classification and Measurement of Share-based Payment Transactions' clarifies the following:
- In estimating the fair value of cash-settled share-based payments, the accounting for the effects of vesting
and non-vesting conditions should follow the same approach as for equity-settled share-based payments;
- Where tax law or regulation require an entity to withhold a specified number of equity instruments equal
to the monetary value of the employees tax obligation, which is then remitted to the tax authority, such
an arrangement should be classified as equity-settled in its entirety, provided it would have been classified
as equity-settled in absence of the net settlement feature; and
- A modification of share-based payment that changes the transaction from cash-settled to equity-settled
should be accounted for as (1) a derecognition of the original liability; (2) recognition of an equity-settled
share based payment at the modification date; and (3) any differences between the carrying amount of the
liability at the modification date and the amount recognised in equity should be recognised in profit or loss.
The Group already applies these amendments.
IFRS 10 'Consolidated Financial Statements' and IAS 28 'Amendments to Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture' deals with situations where there is a sale or contribution of assets
between an investor and its associate or joint venture and the treatment of gains or losses from such
transactions. The IASB has not confirmed the effective date of this amendment, however early application is
permitted. The Group does not anticipate that the application of these amendments will have an impact on the
Group's financial statements in future periods should such transaction arise.
IFRIC 22 'Foreign Currency Transactions and Advance Consideration' addresses how to determine the 'date of
transaction' for the purpose of determining the exchange rate to use on initial recognition of an asset, expense
or income, when consideration for that item has been paid or received in advance in a foreign currency which
resulted in the recognition of a non-monetary asset or non-monetary liability.
The Group already accounts for transactions involving the payment or receipt of advance consideration in a
foreign currency that is consistent with IFRIC 22 amendments.
IFRIC 23 'Uncertainty over Income Tax Treatments' provides additional guidance on the determination of taxable
profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over
income tax treatments under IAS 12. The Group has to determine the impact, if any, on the consolidated
financial statements.
The Group does not anticipate that the application of these amendments will have an impact on the Group's
consolidated financial statements.
There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a
material impact on the Group.
3. Financial instruments by category
The table below sets out the Group's classification of each class of financial assets and financial liabilities and
their fair values for the current and the comparative period:
US $'000
Financial 31 March 2018
Financial assets at assets at Financial assets at Total carrying Fair value
amortised cost FVTPL FVTOCI value
Financial assets
Trade receivables 490,355 - - 490,355 490,355
Cash and cash equivalents 385,732 - - 385,732 385,732
Available for sale investments - - 6,327 6,327 6,327
Other assets(2) 98,230 - - 98,230 98,230
Total 974,317 - 6,327 980,644 980,644
US $'000 31 March 2018
Financial liabilities Total carrying Fair value
measured at value
amortised cost
Financial liabilities
Trade payables 1,046,750 1,046,750 1,046,750
Borrowings 611,355 611,355 611,355
Other liabilities(3) 250,941 250,941 250,941
Lease liabilities 141,869 141,869 141,869
Total 2,050,915 2,050,915 2,050,915
US $'000
Financial 31 December 2017
Financial assets at assets at Financial assets at Total carrying Fair value
amortised cost FVTPL FVTOCI value
Financial assets
Trade receivables 412,181 - - 412,181 412,181
Cash and cash equivalents 422,494 - - 422,494 422,494
Available for sale investments - - 6,314 6,314 6,314
Other assets(4) 87,473 - - 87,473 87,473
Total 922,148 - 6,314 928,462 928,462
US $'000
Financial liabilities 31 December 2017
measured at Total carrying Fair value
amortised cost value
Financial liabilities
Trade payables 868,521 868,521 868,521
(2) Other assets (note 9) exclude the following elements that do not qualify as financial instruments: prepayments, VAT and
duties receivable and other compensation benefits.
(3) Other liabilities (note 12) exclude the following elements that do not qualify as financial instruments: other tax payable
and deferred income.
(4) Other assets (note 9) exclude the following elements that do not qualify as financial instruments: prepayments, VAT and
duties receivable and other compensation benefits.
Borrowings 655,191 655,191 655,191
Other liabilities(5) 261,179 261,179 261,179
Lease liabilities 133,757 133,757 133,757
Other financial liabilities 664 664 664
Total 1,919,312 1,919,312 1,919,312
The Group has classified equity investments as financial instruments at FVTOCI (without recycling). These
investments are measured using inputs for the asset or liability that are in absence of observable market data,
based on net asset value of the related investments (level 3 in the IFRS 13 fair value measurement hierarchy).
Since the value is based on the net asset value of the related investments, no sensitivity analysis is presented.
4. Segment reporting
The Group operates under three reportable segments: Retail, Commercial and Lubricants.
Retail segment - Retail Fuel is aggregated with Non-Fuel revenue. Both the operating segments derive
revenue from retail customers who visit our retail sites. Retail Fuel and Non-Fuel revenues are aggregated as
the segments are managed as one unit and have similar customers. The economic indicators that have been
addressed in determining that the aggregated segments have similar economic characteristics, are that they
have similar expected future financial performance and similar operating and competitive risks.
Commercial segment - Commercial Fuel and LPG are aggregated in the Commercial segment as the
operating segments derive revenues from commercial customers. The segments have similar economic
characteristics. The economic indicators that have been addressed are the long-term growth and average long-
term gross margin percentage.
Lubricants segment - Retail Lubes, B2C Lubes and B2B/Export Lubes are the remaining operating segments.
Since these operating segments meet the majority of aggregation criteria they are aggregated in the Lubricants
segment.
The segmented information is prepared using the same accounting policies as those described in the annual
consolidated financial statements for the fiscal year ended 31 December 2017.
The following table presents revenues and profit information regarding the Group's operating segments.
US $'000 Three-month period ended 31 March 2018
Retail Commercial Lubricants Consolidated
Revenues from external customers 1,156,994 528,253 92,545 1,777,792
Gross profit 97,441 38,915 17,445 153,801
Add back: Amortisation, depreciation and impairment 10,395 5,445 660 16,500
Gross cash profit 107,836 44,360 18,105 170,301
Adjusted EBITDA 62,314 26,468 12,758 101,540
US $'000 Three-month period ended 31 March 2017
Retail Commercial Lubricants Consolidated
Revenues from external customers 1,019,046 506,098 82,417 1,607,561
Gross profit 89,209 36,785 19,506 145,500
Add back: Amortisation, depreciation and impairment 9,117 4,776 579 14,472
Gross cash profit 98,326 41,561 20,085 159,972
Adjusted EBITDA 53,720 28,973 13,028 95,721
(5) Other liabilities (note 12) exclude the following elements that do not qualify as financial instruments: other tax
payable and deferred income.
Three-month Three-month
period ended period ended
US $'000 31 March 2018 31 March 2017
Share of profit of joint ventures and associates included in Segment EBITDA
Lubricants 2,775 -
Retail 1,443 1,634
Commercial 1,194 1,062
Total 5,412 2,696
The amount of revenues from external customers by location of the customers is shown in the table below.
Three-month period Three-month period
ended ended
US $'000 31 March 2018 31 March 2017
Revenues from external customers by country
Morocco 356,283 308,488
Kenya 279,109 352,621
Ghana 146,198 132,264
Other 996,202 814,188
Total 1,777,792 1,607,561
US $'000 31 March 2018 31 December 2017
Non-current assets by country (excluding deferred tax)
Morocco 193,833 189,058
Netherlands 185,577 182,459
Kenya 122,669 125,184
Other 713,690 664,162
Total 1,215,769 1,160,863
Reconciliation of Non-GAAP measures
We believe that providing certain non-GAAP financial measures in addition to IFRS measures provides users of
our consolidated financial statements with enhanced understanding of results and related trends and increases
the transparency and clarity of the core results of our business. Non-GAAP financial measures are derived
from the consolidated financial statements but do not have standardised meanings prescribed by IFRS. The
exclusion of certain items from non-GAAP performance measures does not imply that these items are
necessarily non-recurring. From time to time, we may exclude additional items if we believe doing so would
result in a more transparent and comparable disclosure.
Gross cash profit, the Group defines Gross cash profit as Gross profit adjusted to exclude depreciation and
amortisation expense. Adjusted EBITDA, the Group defines EBITDA as earnings before tax, finance expense,
finance income, depreciation and amortisation. Adjusted EBITDA is arrived at by making further adjustments
to EBITDA for special items. Special items represent income or charges that are not considered to represent
the underlying operational performance and based on their significance in size or nature are presented
separately to provide further understanding of the financial performance of the Group. Headline earnings, the
Group defined Headline earnings as earnings based on profit attributable to owners of the Group before items
of a capital nature, net of income tax.
Three-month period Three-month period
ended ended
US $'000 31 March 2018 31 March 2017
EBIT 74,173 75,583
Amortisation, depreciation and impairment 22,280 20,138
EBITDA 96,453 95,721
Special items:
Management Equity Plan 1,342 -
IPO related expenses(6) 3,745 -
Adjusted EBITDA 101,540 95,721
Three-month period Three-month period
ended ended
US $'000 31 March 2018 31 March 2017
Net income 43,159 41,988
Adjustments to EBIT related to special items:
Management Equity Plan 1,342 -
IPO related expenses(1) 3,745 -
Tax on special items (151) -
Adjusted net income 48,095 41,988
Three-month Three-month period
period ended ended
US $ 31 March 2018 31 March 2017
Diluted EPS (see note 8) 17.39 17.02
Impact of special items 2.16 -
Adjusted EPS 19.55 17.02
Three-month Three-month period
period ended ended
US $'000 31 March 2018 31 March 2017
Headline Earnings Per Share
Profit attributable to owners 39,783 38,938
Re-measurements:
Net (gain)/loss on disposal of PP&E and intangible assets (27) 139
Impairments - -
Income tax on re-measurements 10 (53)
Headline earnings 39,766 39,024
Weighted average number of ordinary shares 2,250,000 2,250,000
Headline EPS (US $) 17.67 17.34
Diluted number of shares 2,287,433 2,287,433
Diluted headline earnings (US $) 17.38 17.06
ETR 36.26% 38.41%
5. Other income and expense
Three-month period Three-month period
ended ended
US $'000 31 March 2018 31 March 2017
Gain/(loss) on disposal of PP&E and intangible assets 27 (139)
Loss on financial instruments (597) (360)
Other income 429 798
(141) 299
6. Finance income and expense
Three-month period Three-month period
ended ended
US $'000 31 March 2018 31 March 2017
Finance expense
(6) In May 2018 the Company became listed on the London Stock Exchange Main Market for listed securities and the Main Board
of the JSE Limited by way of secondary inward listing. All IPO-related expenses are considered to be special items.
For further information see note 16 (events after balance sheet period).
Interest on bank and other borrowings and on lease liability (5,214) (5,435)
Interest on long-term debt including amortisation of set-up fees (1,699) (1,760)
Foreign exchange loss - (123)
Accretion expense net defined benefit liability (545) (521)
Other (609) (644)
(8,067) (8,483)
Finance income
Interest from cash and cash equivalents 1,499 1,073
Foreign exchange gain 106 -
1,605 1,073
Finance expense - net (6,462) (7,410)
7. Income taxes
Income tax expense is recognised based on management's estimate of the effective annual income tax rate of
36% (2017: 38%) expected for the full financial year. The effective tax rate used for the three-month period
ended 31 March 2018 is in line with management's estimated annual income tax rate for the year, due to the
fact that management has not identified any significant items impacting the effective annual income tax rate.
8. Earnings per share
Basic and diluted EPS were computed as follows:
Three-month Three-month
period ended period ended
US $'000 31 March 2018 31 March 2017
Basic Earnings Per Share
Profit 43,159 41,988
Attributable to owners 39,783 38,938
Weighted average number of ordinary shares 2,250,000 2,250,000
Basic EPS (US $) 17.68 17.31
Three-month Three-month
period ended period ended
US $'000 31 March 2018 31 March 2017
Diluted Earnings Per Share
Earnings attributable to owners 39,783 38,938
Diluted number of shares 2,287,433 2,287,433
Diluted EPS (US $) 17.39 17.02
9. Other assets
US $'000 31 March 2018 31 December 2017
Prepayments 133,460 118,507
Other compensation benefits(7) 108,506 71,748
VAT and duties receivable 38,034 33,511
Indemnification asset on legal and tax claims 7,726 9,868
Employee loans 9,580 8,137
Other(8) 80,924 69,468
378,230 311,239
Of which current 272,644 229,068
Of which non-current 105,586 82,171
(7) The amount relates to compensation benefits granted by the government mainly in Morocco, Botswana, Madagascar, Senegal
and Guinea.
(8) The amount in 'Other' mainly comprises items such as brand promotion fund receivables and coupons to customers' deposits.
378,230 311,239
10. Inventories
US $'000 31 March 2018 31 December 2017
Fuel 328,097 276,680
Lubricants 77,354 69,773
Other 7,181 6,676
412,632 353,129
Cost of sales as disclosed on the face of the consolidated statements of comprehensive income include the
total expense for inventory during the quarter for $1,567m (full year 2017: $5,869m). The carrying value of
inventory represents the net realisable value.
Write-downs of inventories to the net realisable value amounted to $5m as per 31 March 2018 (2017: $5m).
These were recognised as an expense during the period and included in cost of sales.
11. Borrowings
US $'000 Drawn on Interest rate Maturity 31 March 2018 31 December 2017
Societe Generale(9) 09/06/2017 Libor + 2.50%/3% 09/06/2022 485,514 479,889
Bank borrowings 125,841 175,302
611,355 655,191
Of which current 210,933 258,947
Of which non-current 400,422 396,244
611,355 655,191
Current borrowings consist of bank borrowings which carry interest rates between 1% and 24% per annum.
The carrying amounts of the Group's non-current and current borrowings approximate the fair value.
The Societe Generale secured term loan facility was entered into on 6 June 2017. The facility matures on 9
June 2022 and has semi-annual repayments. Interest is paid quarterly at a rate of Libor plus a margin of 2.50%
per annum. Incremental facility was drawn down on 18 December 2017 and carries an interest of Libor +2.5%
for the amortised portion and Libor +3% for the bullet portion.
The facility carries the following security: Pledge of the shares of Vivo Energy Investments B.V., Vivo Energy
Cape Verde Holdings B.V., Vivo Energy Morocco Holdings B.V., Vivo Energy Mauritius Holdings B.V., Vivo
Energy Mali Holdings B.V., Vivo Energy Senegal Holdings Ltd., Vivo Energy Madagascar Holdings Ltd., Vivo
Energy Tunisia Holdings Ltd., Vivo Energy Africa Holdings Ltd., Vivo Energy Kenya Holdings B.V., Vivo Energy
Burkina Faso Holdings B.V., Vivo Energy Guinea Holdings B.V., Vivo Energy Cote D'Ivoire Holdings B.V., Vivo
Energy Ghana Holdings B.V. and Vivo Energy Uganda Holdings B.V.
Key covenants:
- The Company needs to supply to the lender within 150 calendar days after year end its audited annual
consolidated financial statements, unaudited annual non-consolidated financial statements and the
unaudited annual group accounts of each operating unit. Within 90 days after each half of each financial
year the Company should provide its unaudited non-consolidated financial statements, unaudited
consolidated financial statements and unaudited group accounts for each operating unit for the financial
half year.
- With each set of financial statements a financial covenants compliance certificate has to be provided
showing the following covenants ratios: debt cover and interest cover.
(9) The amounts are net of financing costs. The loan amount is $490m (2017: $484m); financing costs are $4m (2017: $4m).
- Formerly, we reported twice a year, a set of financial statements accompanying a financial covenants
compliance certificate that had to be provided showing the following covenants ratios:
- Current cover ratio;
- Debt cover;
- Debt service cover; and
- Cash flow cover.
- The loan carries a negative pledge that restricts the Company from creating or permitting to subsist any
security over any of its assets. The Company is also not permitted to incur any additional financial
indebtedness, enter into mergers, demergers or reconstruction, may not sell, lease, transfer or dispose of
assets or issue any guarantees subject, in each case, to certain exemptions.
- Default events include but are not limited to a breach in financial covenants, cross-default, failure of
payment, misrepresentations, insolvency, failure to pay taxes and unlawfulness.
- Upon the occurrence of change of control, the facility will be cancelled and all outstanding loans, together
with accrued interest and all other amounts due, will become immediately payable and due. The IPO
reorganization of the Group does not lead to any change of control.
No covenants were breached in the last applicable period ended 31 December 2017. The Company amended
its senior facility after the balance sheet period. For details see note 16.
12. Other liabilities
US $'000 31 March 2018 31 December 2017
Oil fund liabilities 89,698 88,070
Employee liabilities 75,402 93,801
Deposits owed to customers 60,558 54,062
Other tax payable 57,403 50,587
Deferred income 7,309 8,888
Contingent liabilities (see note 14) 3,825 3,825
Other 21,458 21,421
315,653 320,654
Of which current 131,616 152,409
Of which non-current 184,037 168,245
315,653 320,654
13. Net change in operating assets and liabilities and other adjustments
Three-month period Three-month period
ended ended
US $'000 31 March 2018 31 March 2017
Inventories (49,309) 2,328
Trade receivables (59,662) (67,672)
Trade payables 144,619 67,612
Other assets (52,589) (8,999)
Other liabilities (16,491) (28,900)
Provisions (4,209) 11,765
Other 11,842 12,789
(25,799) (11,077)
14. Commitments and contingencies
Lease commitments
The table below analyses the Group's lease liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
US $'000 31 March 2018
Between 3
Less than 3 months and 1 Between 1 and Between 2 and Over
months year 2 years 5 years 5 years Total
Lease liability 5,677 14,329 17,840 50,880 53,850 142,576
31 December 2017
Between 3
Less than 3 months and 1 Between 1 and Between 2 and Over
months year 2 years 5 years 5 years Total
Lease liability 4,846 14,540 17,217 49,906 55,712 142,221
Contingencies
The Company's Executive Management has prepared a best estimate of its contingent liabilities that should be
recognised in respect of legal claims in the course of ordinary business. Some of the claims will be
compensated by an indemnity obtained from the former Shareholder (Shell); should these cases be determined
against the relevant Vivo Energy Entity, such entity will be indemnified by the former Shareholder. An
indemnification assets of $8m (2017: $10m), equivalent to the fair value of the contingencies provided for by
the Group in respect of the indemnified claims that have been recognised.
In many markets there is a high degree of complexity involved in the local tax regimes. In common with other
business operating in this environment the Group is required to exercise judgement in the assessment of any
potential exposures in these areas. Where appropriate the Group will make provisions or disclose
contingencies in accordance with the relevant accounting principles.
15. Management Equity Plan
In 2012, Vivo Energy Holding granted to certain senior managers and other senior employees' phantom
options which entitled option holders to a cash payment based on the value of Vivo Energy Holding shares
upon exercise of their phantom options. Under the terms of the phantom options, all outstanding phantom
options would become fully exercisable upon admission.
However, the option holders have agreed to amend the terms of their outstanding phantom options such that
30% of the outstanding phantom options became deemed to be exercised at admission and 70% will become
exercisable on the first anniversary of admission for a period of 12 months. Under the amended terms, the
option holders' entitlement to the cash payment is based on the market value of the shares at the time of
exercise net of a nominal per share exercise price.
The Management Equity Plan related liability as at 31 March 2018 amounts to $44m (31 December 2017: $49m).
16. Events after balance sheet period
On 4 December 2017, the Company agreed to enter into a sale and purchase agreement with Engen Holdings
(Pty) Limited (Engen Holdings), a 100% subsidiary of Engen Limited, in relation to the purchase of shares in
Engen International Holdings (Mauritius) Limited (Engen International Holdings) for the exchange of a
shareholding in Vivo Energy, with a possible cash element. This transaction is subject to regulatory approval.
In May 2018 the Company became listed on the London Stock Exchange Main Market for listed securities and
the Main Board of the JSE Limited by way of secondary inward listing. In connection with this, a pre-IPO
reorganisation of the Group was executed including the insertion of Vivo Energy plc, a public company limited
by shares incorporated in the United Kingdom, as the ultimate parent company via a share-for-share exchange
effective on 4 May 2018.
The Company amended its senior finance facility agreement before the listing to include a new multi-currency
Revolving Credit Facility (RCF), consisting of a primary $300m able to be drawn upon on admission and an
additional $100m contingent upon events after the listing. Under the terms of the new agreement, the financial
covenants and the clauses on change in control and additional indebtedness disclosed in note 11 are amended
to align with the Company's future capital structuring plans.
The Company is planning to issue senior unsecured notes in June. The contemplated notional amount is
$400m and the maturity will be 5 to 7 years. The proceeds of the notes will be used to repay the existing term
loan in full. The Company has sought credit rating from two rating agencies for the purpose of the notes
issuance. Notes holders and RCF lenders will rank pari passu.
JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
Date of release: 30 May 2018
Date: 30/05/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
