February 21, 2018 / 6:16 AM / 2 years ago

Channel tunnel group Getlink's profits rise, considers governance changes

* Getlink CEO says top shareholder TCI “very constructive”

* Getlink to split Chairman/CEO roles in three years

* 2017 EBITDA 526 mln euros, up 6 pct at constant forex

* Eyes 2018 EBITDA of 545 mln euros, over 700 mln by 2022

By Dominique Vidalon

PARIS, Feb 21 (Reuters) - Channel tunnel operator Getlink posted higher 2017 profits on Wednesday despite a slowing British economy and said it would split the chairman and CEO roles within three years.

Getlink, formerly known as Eurotunnel, vowed to grow profits and dividends over the next five years and its boss Jacques Gounon said he was “pleased” to have British hedge fund TCI as the group’s top shareholder.

Gounon, Getlink’s 64-year old chairman and chief executive, told a conference call that Getlink’s board will ask shareholders to vote at its April annual general meeting on a proposal to raise the age limit for the chairman and CEO to 68 years from 65.

The board will then - in three years time - split the chairman and CEO roles, added Gounon, who will turn 65 in April.

Gounon, whose current mandate expires at the April AGM, will thus run for a new term.

Once the roles are split, Gounon could stay on as chairman and deputy CEO Francois Gauthey could become CEO, he added.


Getlink carries Eurostar high-speed trains between Paris, Brussels and London, as well as shuttle trains containing passenger cars, coaches and freight trucks.

Getlink forecast earnings before interest, taxes, depreciation and amortisation (EBITDA) of 545 million euros ($672 million) this year, rising to over 700 million by 2022.

The 2018 and 2022 forecasts were made on the basis of an exchange rate of 1.14 euros per pound.

Its EBITDA 2017 figure rose by 32 million euros from the previous year to 526 million.

Getlink also increased its 2017 dividend by 15 percent to 0.30 euros per share, with the dividend set to rise to 0.35 euros for 2018 and by 0.05 euros each year in coming years.

Hedge fund and activist investor The Children’s Investment Fund Management (TCI) is now Getlink’s top shareholder with an 11.08 percent stake, France’s AMF stock market watchdog disclosed last month in a regulatory filing.

According to the AMF, TCI does not intend to conduct any specific strategy towards Getlink nor influence the way it is managed. TCI will also not seek board seats or control of the company.

Nevertheless, TCI - run by Sir Christopher Hohn - has a reputation for aggressive campaigning.

TCI launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank's sale. (reut.rs/2C8X5jZ)

Last year, TCI also put pressure on French aerospace group Safran to ditch its takeover of rival Zodiac. Zodiac eventually accepted a 15 percent lower bid in May 2017.

Gounon said he had met with TCI, and that the meeting had seemed “very constructive”.

TCI believed Getlink’s shares were “under-valued”, given the group’s strong growth prospects, and that concerns over Brexit were overdone, while it was in favour of splitting the CEO and Chairman roles, said Gounon.

Eurotunnel renamed itself Getlink last November to reflect the fact that the company has other businesses besides operating the Channel tunnel. They include Europorte, which runs the rail freight business and ElecLink, a projected power line to connect the French and UK national grids.

Gounon said that even though the British economy was slowing following the country’s decision to quit the European Union, Getlink nevertheless stood to benefit from growth in the Greater London area, and from the start of a new Eurostar London-to-Amsterdam route in April and the launch of ElecLink in 2020.

Eurostar’s passenger traffic figures rose 3 percent last year to reach record levels.

$1 = 0.8114 euros Reporting by Dominique Vidalon Editing by Sudip Kar-Gupta

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