Ladies and gentlemen, good morning. Thank you for coming to the presentation of our consolidated results as of 30th June 2018, I have Baptiste Janio, our Administrative and Financial Officer, with us, who has set forth The main information to be gleaned from our good results since we are working on the Solidity of our balance sheet, the positive effects of our recent refinancing on our development prospects. As far as I'm concerned, I would like to understand the underscore the quality of our half year results and say a few words on 2018, the outlook The outlook beyond 2018, first of all, let me point out that there's been earnings have been up sharply on June 30, 2018. The net result is up by 150% net income as compared with the previous year. That's the result of sustained growth, 10% up for the contributed revenue, but it's also the result of an improvement in our operating margins With OBEB up 21% in Europe, up more than 52% in COI when compared to the first half 2017, that operational performance goes hand in hand with the strengthening of our balance sheet.
Financial debt has gone down and the gearing as of 30 June 2018 is Back down to 3x EBITDA, that is the that was the objective that I now at the beginning of the year, that is 3x EBITDA. That good performance As well as the operating results can be seen on our 2 perimeters, France and International. Particularly internationally, the strong growth in our activity and even stronger growth in Operating results are the result of our new subsidiaries in Latin America and Sularca in Spain, I'm particularly pleased that those subsidiaries bought out only a year ago Have revealed their potential as early as 2018. Of course, I fully trust that we will that international development, which for us is a major component of our total development. In the course of the first half twenty has taken advantage of very promising markets in France.
At the same time, we've strengthened our activities on our international markets. In France, in In France, in particular, the group benefited from significant volume effects. These are this volume growth As a result of a good conjuncture, which has also benefited industrial production, it's basically our processing activities, incineration and storage that have benefited from that. Over the half year, all our activities are up. I mentioned process Seeing reuse, recycling, we've also enjoyed strong levels of activity.
First of all, when it comes to hazardous waste With Peixin and Vaz Kimika, our specialized subsidiaries and also activities In reuse of waste for energy, our group has benefited from the ramp up of our recent investments, Particularly, new energy production capacities in Nagaba and Guadalupe, but especially and especially the CSR Our unit, Changje, in the Department of Magen. At the same time, our service activities have also confirmed their dynamism, particularly in decontamination. Internationally, as I said, Growth was borne by our recent acquisitions in Latin America. We invested in Peru and in Chile In order to enhance the storage capacities for hazardous waste, this has made it possible for us to Address the new industrial customers in those two countries. In the rest of the world, over present in the industrial service markets Through Solarca, in particular, activity was particularly strong, particularly when compared with the first half year twenty seventeen, Which was relatively low for that branch.
This was also helped out by the favorable activities mix, which contributed to the strong rise in operating margins. Batiste will speak about those elements in his presentation. But the improvement of our operating margins strengthened our cash generation. At the same time, as we announced, our industrial development investments We're limited when compared with first half twenty seventeen. The free cash was strengthened and we've concretized our debt lowering our debt as of this half Here, Batiste will give you more information on those positive impacts on our balance sheet.
Therefore, After the first half twenty eighteen, we are stronger. As I've said, the economic situation was particularly favorable. We benefited from volume and activity mix effects were very positive for the first half year. In the second half, we are expecting a more stable economic environment, which should lead to Performance results as well as our operational results that are comparable to the first half year. We are confident that we will reach our annual goals, 1st of all, in terms of growth.
In fact, it should even be a bit higher because Then what we announced at the beginning of the year and also in terms of operating results, we are also considering the medium term with confidence. Our financial situation is more solid and will continue to become more solid In the future, the refinancing carried out in early July will make it possible for us to benefit from increased cash and better rates in order to finance our development projects via internal or external growth, organic or external. Therefore, we are on a good growth and profitability trajectory such as we presented in our recent Investor Day. That is To say, organic growth, which make it possible for Stavra contributed revenue between €550,000,000 €600,000,000 by 2020 and EBITDA in 2020 of around 20% of our contributed revenue, not counting external growth. Those are the few messages that I wanted to deliver by way An introduction.
Let me now hand it over to Baptiste to give you further detail on the financial performance for the first half year. And he will speak about, of course, the current year as well.
Thank you, Joel, so I'm going to run through, as per usual, all the key figures, some information on CapEx, Ex gross cash flow, the metric that we track very closely to manage the company and then change In debt, I'll run through all these, aggregates in greater detail after that. As regards to the first half, as Joel said, We have revenue that is sharply up at €277,600,000 sharply up 10% versus first Half twenty seventeen EBITDA, €51,800,000 with a margin of Operating income, EUR 20,700,000 with an operating margin at 7.4%. Net income stands at €9,200,000 also sharply up over last year. CapEx That come in at €22,500,000 and gross cash flow positive that serve to reduce our net debt, Be it under IFRS standards or the banking definition that serves for the Debt covenants, our first focus on level of activity, as Joao said. Very positive overall dynamics across the first half that impacts Directly on hazardous and nonhazardous waste, we have contributed revenue up euros 25,000,000 plus €15,000,000 for nonhazardous waste, plus 10.5 €1,000,000 on hazardous waste.
For hazardous waste, we have a level of activity that's Very dynamic across businesses buoyed by a processing or a facility that's very dynamic with volume increases that are significant in France and very positive momentum Internationally, as Joel indicated, with storage activities in Chile and Peru that have come in well and a service activity via Selecta delivering a very The first half, the nonhazardous waste, we saw during the first half that we had a decontamination That is buoyed and driven by Services, of course, driving Stories activities benefiting from a very significant volume effect. This growth is, of course, boosted by the ramp up Of our recovery solutions, the CSR has changed versus the first half, which clearly, Clearly impacts our activity. Focus by quarter, the key Takeaway, we had a Q2 in terms of activity that was very Sustained affecting both hazardous and nonhazardous revenue. As regards the France International split, which is a split that we track Regularly, you see that we have an international segment that continues to grow. To remind you, this share of international revenue was 5% in 2016, 9% in the H1 twenty 17.
We're at 11%, H1 twenty eighteen. The no scope effect Moving from 9% to 11% in spite of very positive momentum in France, we also have sustained growth internationally with revenue going from euros 25,000,000 to €31,400,000, that's an increase of €6,000,000 in other words, 30% at constant exchange rate. This Increase in activity comes essentially from the Solarca service. Services, very Dynamic first half and also equally between storage in Latin America, Peru, Chile and recovery with purification business in Spain that was very dynamic. So Overall, we see hazardous waste activity internationally that is Very positive in terms of dynamics and confirms our strategy of internationalization on hazardous waste.
2nd part is obviously Development France with an increase in revenue of plus 8.2%. About half of that is for storage, hazardous, nonhazardous waste, Good recovery levels. And of course, with the ramp up of the Changier RCU and very good level of contamination activity. We saw that in the first half. That's replicated in H2.
So all in all, when we consider in terms of activity, Treatment Recovery Services, all our businesses contributed to positive growth in revenue in Differing proportions. Treatment and Services, very dynamic in the first half, a significant contribution of treatment In other words, when we decontamination, we're obviously fueling treatment activity. After activity, an update on profitability Regarding earnings, EBITDA at June 30, 2017 came in at €43,000,000 At the end of this first half, we're at €51,800,000 Gross margin is up 8.7 €8,000,000 Gross margin is up €8,700,000 split €6,000,000 for France, euros 2,500,000 international. There's Noteworthy, very significant volume effect on treatment and services activity, consistent with what we saw previously. Also to be noted, an increase in fixed cost.
These are the Representation costs and headcount costs that are up 1.5. And then another item, €2,000,000 miscellaneous, that's the tax has not increased Land tax has not increased. That impacts 2017, 2018. So that comes in at that's a one off for euros 2,000,000 and doesn't, of course, affect the profitability. Geographically, EBITDA, euros 46,500,000 for France, with an EBITDA margin of 18.9%, sharply up in terms of geography because 17.7 The first half twenty seventeen and international EBITDA at EUR 5,300,000 with a margin of 17 percent of contributed revenue driven by storage activities in Latin America, services in Spain, as I indicated.
Moving down to current operating Income, obviously, there's a change in COI that tracks The change in EBITDA because it goes from €13,600,000,000 to 20.7 €1,000,000, there's a positive contribution France International. The differentiating element is the major impact in the 1st half twenty eighteen on provisions for amortizations due to volume Increases in storage business is that de facto increases the amortization, and That has an impact on COI. Profit From operations on the right there, you can see that it's sharply up with an operating margin of 7 percent on contributed revenue in France and 10.6% to from international Contributed revenue. Moving down the income statement, down to net Income from operating from current operating income to operating income, briefly, there's a difference of some EUR 2 euros 2,000,000 that's primarily due to a provision booked as part of the customs control from €1,800,000 that were challenging and costs as part of the reorganization of the group, That group reorg helping to boost productivity of our operations. Finance income stands at €6,400,000 down versus H1 2017.
This is due To a decrease in the cost of debt, 3.11 percent as against 3.38 percent H1 twenty seventeen. We also note that this finance financial income doesn't take kind of recent financing because recent refinancing was closed in July. So We just have the costs linked to the first half, so that's before refinancing service decrease. It has a real impact on the first half. We're expecting an increase in H2 Linked to 1 off non recurring events, since we they were REAP Financed early, there'll be a one off exceptional cost charge linked to The reversal, the write back of all the costs that went amortized on the previous loan, and this will have An impact on the H2 corporate tax is up 1,500,000.
H1 2017, it stands at €3,100,000 in 2018. This is primarily due to the increase in the tax based following improved operating margin. And then we have smaller numbers. Companies consolidated at Equity An increase, the contribution of €300,000 of CANI linked to Improved earnings from Cannae, that's a Peruvian company that we don't control that is consolidated accounted for by the equity method with posting improved earnings. Net income Overall, that is sharply up given all these items coming in at €9,200,000 which, of course, It automatically leads to an increase in our equity IFRS coming in at June 30 at €245,000,000 As regards CapEx investments, we discussed this at length at the start of the year in terms of our targets.
The Target, the goal is to contain investments and EBITDA minus So CapEx, June 30, we can say that overall, we're on track. We have CapEx That are down in the first half twenty eighteen as against H1 twenty seventeen with, in particular, A significant decrease in development CapEx. This comes primarily from the end of the Large CSI unit furnace at Changier, and we have 23.4 €1,000,000 CapEx, in line with the target set affecting primarily storage Capacity and maintenance CapEx for the incinerators. So given the message that we Delivered at the start of the year demonstrates our flexibility on CapEx and primarily development CapEx, That was achieved during the first half. Moving on to Cash flow.
So we have gross cash flow recurring operating cash flow that is up €31,500,000 H1 twenty seventeen €39,500,000 H1 twenty eighteen. So that's Up essentially due to the increase in EBITDA. Gross Cash flow, EUR 11,600,000, a change in WCR that's slightly negative To the tune of €4,000,000 that's due to a lag of receivables collection data of receivables from local Authorities, that's from the Strasbourg Sinerval contract and that WCR will probably be reversed in H2. On change in debt From gross cash flow to net debt, we see the net financial date, 31st was 2017, €325,000,000 It comes in at the end of June at €318,000,000 This decrease is Due to cash flow generation on the first half and shows that at steady state Cruising speed, we can generate cash flow and reduce our debt. On the financial Leverage, we have a 2018 target, which was times 3, as we indicated during the presentation of the annual results 2017.
The goal target for 2018 was achieved in the first half end of June with cash of €46,000,000 cash position, which is comfortable given our WCR cycle And our current debt?
Yes. Of course, on 30 June, we the banking covenants having to do with gearing and having to do with the leverage, As indicated in the presentation, will no longer be valid for the coming quarters, But I'll come back to that point in the following slides. But as of June 30, the former covenants were still In force, so that's why they were respected and that's why we're in advance with respect to our 2018 forecasts. Let me come back to refinancing that was closed in July 2018. All in all, that refinancing concerned EUR 420,000,000 With banking debt along with criteria and the environmental impact of EUR 70,000,000 €270,000,000, that is a motorcycle loan maturing €70,000,000 over 5 years.
New lines of liquidity, This is a very important element, EUR 200,000,000 with a revolving credit line of EUR 150,000,000, which will serve our growth and our general needs and a redeemable term credit, which is there to refinance our Private investment, that amounts to EUR 50,000,000, those that will reach maturity in the coming years. That refinancing integrates the environmental impact criteria, which are likely to reduce the cost of bank debt. This is something which is important to keep in mind and which is new. Bank bond issuance, And which also includes a bank placement of a total amount of €150,000,000, an average maturity of 7 years and an average coupon of 3.25 percent with a single covenant, which we will manage as of the next publication with the leverage of 3.9 5x EBITDA, which may be increased to 4.25 in the event of acquisitions. That doesn't mean that we're going to immediately I'll go to €395,000,000 because our objective is €3,000,000,000 but it will give us more flexibility in the case of significant organic growth or external growth Acquisitions.
The point of this refinancing is, of course, to extend the debt maturity between the end of 2017 and after the refinancing. So you can see that we have a schedule, which is So you can see that we have a schedule, which is spread out up to 2020 4, after that, there's the bond issue that will be refinanced, but we'll have more visibility on that with an increase of the average life And 3.8 years at the end of 2017 and 6.4 average life In July 2018, average maturity that is, the objective is to give us the means To finance our development, that is to take the group's development strategy and give it the proper financial resources. As we said, we have a liquidity line, which is significant, EUR 150,000,000 Which can be used if all of us have never a WCR issue or a development issue, we could draw down for 5 years, EUR 150,000,000 euros and we've secured refinancing of the Euro PPs, which reached maturity in 2019 2021. That clearly aims at giving us the financial resources to develop and to secure the refinancing over the coming years. We can say that as of today, the group No longer has any cash or liquidity problems and won't for the coming years.
If you give us greater flexibility in the case of external growth, well, that's a point which I've already made, which I won't come back to, and also to position Our strategy as a player in sustainable development is very important. We need to integrate Those criteria in our refinancing that concern energy efficiency, biodiversity as well as an external Rating carried out by Riti Finance. It's an extra financial entity that takes account of social, environmental and governance criteria, Epi Finance that is. Concerning our outlook for the second half of twenty eighteen, What we can see today and what we're presenting, well, you can see that there's a very positive message concerning the First half because the first half was extremely promising both in terms of our activity and activity generates Good results, good operating results and a strong net result. This is assisted by strong activity in France and internationally.
The performance with storage in France and international services We're extremely dynamic, very favorable trend when it comes to activities mix. Even if we can see that All of the tools contributed to our performance. We have an activity mix, which is very favorable in particular and which contributes to improving operational profitability and EBITDA. This helped us To bring down net debt, IFRS and bank debt and to reach the objective of 3x EBITDA, which is a financial objective that's Ambitious. The second half should be similar.
That is to say, we are expecting a good macroeconomic context, a stable context in France As well as growth of our activities in Latin America, let's not forget that we are in a world that's Changing there's increased volatility on the emerging markets. We saw this in the recent weeks, very strong volatility, even a depreciation of currencies In the emerging countries as a whole, in a geopolitical context and in The foreign exchange market context that are volatile, we have to take account of all that in our outlook. And activity mix For the second half, while we're expecting dynamism in processing, particularly incineration And greater contribution of the services to our French activities, our objective is to continue to drive our free cash flow and to master our development CapEx whilst maintaining our objective of a stable leverage around 3x EBITDA. In terms of In more precise terms, we're expecting contributed revenue in the second half that's similar to that of the first And EBITDA that's also comparable to the first half. This, of course, reassures us When it comes to our 2020 plan that we presented on Investor Day, as Joel has said, we're Expecting growth, our profitability objective is still very clear, 20% EBITDA margin by 2020, we will achieve maintain that objective, And we're expecting a Granite growth of between €550,000,000 €600,000,000 Let me now give the floor To Joel for outlook.
Thank you, Baptiste For those words of explanation, therefore, we are on the road to selective and profitable growth. As we have set forth for medium term prospects, Selective, that is an industrial investment policy, which is well Mastered and profitable with a view to return on investment and enhanced flexibility. Therefore, We are confident that we will achieve our 2018 goals. In the second half, the macroeconomic environment should become stable when compared to 1st half at any rate in France, we think that in that context of greater stability, our level of activity should remain Solid in our main business lines on the second half of the year. Traditionally, As you've noted, I'm sure the second half has been more contributive than the first when it comes to revenue As well as COI.
This year, the good performance of the first half in our processing activities or treatment activities have led us To a more balanced view of our activities over both halves, we also think that the positive mix effects That occurred in the first half will not allow for greater improvement of our Operational profitability. Therefore, we're expecting activity in the second half that will be comparable to the first half with Operating the COE that COI, sorry, that will be comparable. As we announced at the beginning of the year, we will maintain our Master investment policy in 2018, I can confirm that we are aiming at a leverage objective of around 3x EBITDA By the end of the year, I hope that we have been as comprehensive as And we are now opening the floor to questions and answers. Since the results are good in general, that means there are There's questions. Don't be shy.
Speak up. Batiste is ready. Good morning. I would like to know I have 2 questions, in fact, regarding Peru. There's the equity method, as you said, I think that's still the case.
But there is still in the contribute of revenue, they're still counted. I'd like to know what's going on there. That's the first question. Should I ask the second question? No, let me answer the first question.
There are 2 companies in Peru, Taris, Which is globally integrated and therefore, which is part of EBITDA and contribute to Revenue in this Cannae, which to which the equity method applies. So it's integrated A de facto in our results but by the equity method. Now with Cannae, there's an option to increase your shareholding, right? Right. But for the time being, it's still the equity method.
As I said or as I said before, it's still true that company It should become part of our perimeter. We have an option to integrate it, but for the time being, we We haven't used that option. And I have a question that you spoke about Deconsolidating factoring, I'd like to know whether you set up well, No, that was not factored into the analysis. 31 December 2017, there were 24,000,000 receivables deconsolidated receivables, there's the same amount at 30th June 2018. Are there any other questions?
This is the back of the room. Good morning. You said that in the second half, there should be a financial result that should be Higher, it should be increased at least on an exceptional basis. Can we have an idea as to that exceptional amount And what that means for the following years, the effect of the second half, there will be Nonrecurrent exceptional impact amounting to about EUR 1,500,000. Now when it comes to refinancing, not taking kind of exceptional events, what we would expect would be Cost an increase in financing around 10 basis points between 2017 2018.
Given the new refinancing of the over cost of bonds When compared to short term debt or as compared to short term debt. Any other questions? Is everything clear? One last question. This is Luca from Ambas here.
I can see that Your finances have opted you to increase your debt ratio in the case of acquisitions. Are you referring to or Hinting at international acquisitions or what? Well, of course, we have an investment watch over all possible growth that we can achieve or assets that we can buy, very active watch when it comes to our international activities Because that's but we want such growth to be very selective. That is we have to find as we found in Chile and Peru, You have to find activities that are profitable, Which would add value to which we could add value, to which we could add our expertise And which can be accretive when it comes to the results. Of course, the global regulatory The difference today with respect to the past is that we have the means To carry out our strategy, that is if we found assets that met the different Political, economic criteria and that could be accretive and to which we could add value.
We Could take a more active attitude That is such an investment would be more realistic today. We don't have anything to announce today, but we are keeping an active watch over such opportunities on a continuous basis More internationally than in France. The example of Peru and Chile are good examples today, that is to say, We acquired a company, which we're growing, the hazardous waste, which we're adding our expertise. The activities are there. Results are forthcoming.
And La Carnes in Spain, too. In a particular niche activity, that's a company that will help to fill out our range of industrial services, these are success stories. This is a sort of acquisition that we want to continue. Of course, not necessarily be small tuck ins because We will then grow those activities by investing there and by filling out the range of activities given the palette of activities that we can provide in France. Any other questions?