Annual Report 2018
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Annual Report 2018 PHILIPPE CROONENBERGHS Chairman “2018 will go down in the history of Texaf as the year in which the Board decided to invest in a new sector of the future in Africa: digital. This sector is booming in Africa and needs are much greater than in Europe: economic inclusion, identification of people, sharing information in rural areas, e-government, public health applications... There will no doubt be many investment opportunities. Texaf is positioning itself to identify them, partnering with a leading venture capitalist, PARTECH AFRICA, and creating Kinshasa’s first digital hub, which is destined to become a point of reference in the region.” JEAN-PHILIPPE WATERSCHOOT CEO “Resilience and capacity to invest in new fields of action is in TEXAF’s DNA. In spite of the socio-political upheaval witnessed in 2018, TEXAF has pursued its investment policy. Its ability to constantly adapt to the demands of the high-end real estate market in the city of Kinshasa and the quality of the services it offers enables it to maintain an occupancy rate of almost 100% in this situation. The group has solid fundamentals and maintains large-scale ambitions on this market by favoring an increasingly environ- mentally responsible approach in its construction methods and management of its real estate portfolio. TEXAF counts on skilled and devoted operational teams for both its real estate business and its quarrying activities. Their continual engagement in often difficult circumstances is a major resource in our pursuit of success.” CONTENTS 01 Profile 06 Who are we? 07 Our activities in DRC 10 Information for shareholders 17 02 Reports of the Board of Directors 20 Directors’ report 21 Corporate governance 32 Management team 38 Remuneration and Nomination Committee report 41 02 Corporate social responsibility 44 Comequi 46 Chirpa 48 Texaf Bilembo 50 Sankuru Yema-Yema 52 Ndako Ya Biso 54 04 Annual financial statements 56 Consolidated financial statements 58 Notes to the consolidated financial statements 64 Summary of the principal accounting policies 98 Report of the auditor 107 Directors’ report of TEXAF S.A. 110 TEXAF ANNUAL REPORT 2018 3 2018 IN SUMMARY KEY FIGURES Average RESULT (IN EUR k) 2014 2015 2016 2017 2018 growth Revenue 18,927 19,648 18,392 18,208 18,869 Growth 2% 4% (6%) (1%) 4% 0% Recurring EBITDA * 10,019 9,598 9,740 10,038 10,111 Growth 6% (4%) 1% 3% 1% 0% Recurring operating result ** 6,938 6,486 6,953 7,020 7,168 Growth 7% (7%) 7% 1% 2% 1% Net result (share of the group) 4,685 5,456 5,454 4,542 12,909 Growth (28%) 16% 0% (17%) 184% 29% (*) Recurring EBITDA: recurring operating result before interest, taxes, depreciation and amortization. (**) Recurring operating result: operating result minus income or expenses that are not expected to be repeated in each accounting year, such as: - Gain or loss on disposals of non-current assets - Allocations to (or reversals of) write-downs on non-current assets - Costs relating to major restructuring, purchase or disposal of a business (such as redundancy costs, plant closure and commissions paid to third parties to acquire or dispose of an activity) Average CASH FLOWS (IN EUR k) 2014 2015 2016 2017 2018 growth Cash-flows opérationnels 6,243 6,819 8,666 8,706 11,742 5% Cash-flows d’investissement (7,326) (9,401) (7,149) (6,421) (5,416) 18% Cash-flows de financement (1,649) 4,061 (3,067) (2,532) (4,436) - CASH AS AT DECEMBER 31st 3,984 5,461 3,911 3,674 5,564 - TEXAF dividend € 1.20 4,000,000 in EUR 3,500,000 € 1.00 3,000,000 € 0.80 2,500,000 € 0.60 2,000,000 1,500,000 € 0.40 1,000,000 € 0.20 500,000 € 0.00 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total gross dividend Gross dividend per share Net dividend per share 4 TEXAF ANNUAL REPORT 2018 Real estate Highlights RENTAL REVENUE 18,000,000 in EUR VIRTUALLY 16,000,000 14,000,000 12,000,000 10,000,000 100% 8,000,000 OCCUPATION RATE 6,000,000 4,000,000 2,000,000 0 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 36 Carrigrès NEW HOMES SALES 600,000 500,000 in metric tons 400,000 CARRIGRÈS 300,000 RETURN TO PROFIT 200,000 100,000 0 1987 1990 1994 1998 2002 2006 2010 2014 2018 CAPITAL GAIN AVERAGE TEXAF PRICE + MAX & MIN EUR 1.5 m 45 in EUR 40 35 30 25 REDUCTION IN 20 DEFERRED TAXES 15 10 5 EUR m 0 5.8 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 TEXAF ANNUAL REPORT 2018 5 01 Profile 6 TEXAF ANNUAL REPORT 2018 PROFILE WHO ARE WE? Organigram TEXAF S.A. BRUSSELS REAL ESTATE INDUSTRIAL FINANCIAL 98.9% 100% 100% i-Finance 10% Anagest Cotex Carriaf* Holding Brussels Kinshasa Brussels Brussels Holding Office rental Holding Holding 100% 100% 99.6% Utexafrica 94.1% Carrigrès i-Finance* Kinshasa La Kinshasa Kinshasa Residential Cotonnière Kinshasa Sandstone quarries Microfinance rental 35.3% 64.7% Immotex 100% Estagrico Kinshasa Kinshasa Office rental 35% 8.8% Congotex* Kinshasa (*) in liquidation Our history - A destiny linked to DRC TEXAF is a public company, formed on August 14, 1925 Between its formation and the early 2000s, the group’s on the initiative of visionary trailblazing entrepreneurs, business was centered on textile. Its primary subsidiary, registered and domiciled in Belgium. It is unique in UTEXAFRICA, whose plants produced more than 30 million that it is the only company, listed since its formation on meters of fabric annually, was involved in every step of cotton an international stock exchange, that has all its assets processing. At its peak, the group’s textile business employed concentrated in the Democratic Republic of Congo. up to 6,000 people in Kinshasa, making it the city’s biggest private employer at the time, and supervised more than 100,000 smallholders in the cotton sector, spread over several provinces in the center and east of the country. TEXAF had also diversified its business interests into metal construction, a sandstone quarry and agriculture. It owns many properties in today’s provinces of Sankuru, Maniema, South Kivu, Tanganyika, Lomami and Kasaï Oriental. Facade of TEXAF office in 1929. TEXAF ANNUAL REPORT 2018 7 PROFILE The plunderings of 1991 and 1993 had a profound impact Our DNA: on the country’s economy. The deterioration of the roads and railways made trade with the interior of the country very resilience difficult. Political instability, armed conflict, a failing banking system and contraband copies of UTEXAFRICA textiles significantly weakened the group’s textile business. In this situation, BNP-PARIBAS, the last in a succession of Our ambitions financial groups to hold a shareholding, decided to pull out of DRC in 2002, selling its majority stake in TEXAF to Philippe Real estate continues to be TEXAF’s main business. Croonenberghs, the current chairman of TEXAF group. There are very substantial future development opportunities With Albert Yuma and Jean-Philippe Waterschoot, in various areas: the two managers heading the group in DRC, every possible step was taken to save the textile business by focusing on 1. The construction of homes on free space estimated niche markets generating higher added value for African at 15 hectares of industrial wasteland print, developing its clothing business and going into part- nership with another textile group in Africa. These efforts 2. The construction of office blocks on spaces estimated could not prevent the plant from closing in 2007. at 10 hectares along Avenue Colonel Mondjiba, including the very attractive 3.5 ha site opposite the The group opted for a radical transformation, focusing its French embassy and a 3,500 m2 lot ideally located on business on the development of a large real estate portfolio the roundabout at the end of the imposing Boulevard ((> 150 hectares), ideally located along the Congo river du 30 Juin. in Kinshasa. 3. Development of the “Les Jardins de Kinsuka” project Within a decade it became an important name in the field, for the construction on a 104 ha space of more than a offering a unique quality concept in Kinshasa. thousand ecologically responsible homes and several thousand square meters of commercial, educational, As such, TEXAF has come through the many periods of medical and office premises, as well as many sports and unrest that have punctuated the political, economic and recreational grounds along with a large proportion of social history of the country. Its capacity to reinvent itself green space. and explore new opportunities in a constantly changing environment has made it a leading operator in DRC. There are development opportunities in the agro-industrial domain, particularly based on the group’s assets in the inte- rior of the country through its subsidiaries LA COTONNIERE and ESTAGRICO, but they can only be envisaged as part of a huge infrastructure renovation project to open up these areas by road and rail. The group is also studying projects to diversify its business and hired several engineers in 2018 to strengthen its analysis and implementation capacities. The first domain of diversification TEXAF has decided to enter is digital, both for training and to support promising new initiatives. Bois Nobles district. 8 TEXAF ANNUAL REPORT 2018 PROFILE TEXAF DIGITAL Our rules of conduct “The European Union currently has an ageing population TEXAF wishes to realize its ambitions: of 510 million; Africa 1.25 billion, 40% of whom are under 15 years of age.