Autoroutes du Sud de la France SA

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Autoroutes du Sud de la France SA

100 avenue de Suffren
75015 Paris Cedex 15
Telephone: (+33) 1-47-53-37-00
Fax: (+33) 1-47-53-39-36
Web site:

Public Company
1957 as Autoroutes de la Vallée du Rhône
Employees: 8,277
Sales: EUR 2.10 billion ($2.05 billion)(2002)
Stock Exchanges: Euronext Paris
Ticker Symbol: ASF
NAIC: 237310 Highway, Street, and Bridge Construction

Autoroutes du Sud de la France SA (ASF) is that countrys largest operator of toll roads. The nearly 2,800 kilometers of roadway under ASFs control also make it the second-largest toll road operator in Europe, behind Italys Autostrade, and number three worldwide. The company, together with primary subsidiary Escota, holds long-term concessions for its roadways, which were also constructed under its auspices, extending through to 2032. Concessions for an additional 300 kilometers of French controlled-access highway, expected to be completed during the first decade of the 21st century, give the company a solid base for revenue growth. At the same time, ASF, which, together with subsidiary Escota, traditionally has operated in Frances southern and western regions, has begun to compete for concessions elsewhere, both within France and internationally. ASF has also signaled its interest in expanding into a the multi-modal market, particularly in the development of a railway link. Nearly all of ASFs revenues, which topped EUR 2.1 billion in 2002, come from toll collections; fiber optic networking provisions and other telecom fees, such as antenna placements, as well fees from service area operators, contributed less than 2 percent to the companys revenues. ASF went public on the Euronext Paris exchange in 2002 in one of the years largest and most successful European IPOs. The company remains held at some 50 percent by the French government. Chairman Bernard Val and CEO Jacques Tavernier have successfully overseen ASFs transition from government entity to privately operated company.

Building Frances Freeways in the 1950s

The development of Europes freeway system began in the early 1900s as automobiles began to achieve higher speeds and became more widespread. Among the earliest high-speed roadways was a ten-kilometer stretch built in Berlin, begun in 1909 but not completed until 1921. However, that roadways use was limited to racing and road-testing vehicles. Italy became the site of the next development in freeway construction techniques, that of elevated crossings, devised by Strade et Cave founder and Mussolini supporter Piero Puricelli. Puricellis company completed what many consider as the first true freeway in 1924, opening an 85-kilometer autostrada between Milan and Varese. The autostrada also marked another innovation: that of the toll road.

France, which had long boasted a national network of roads built under the auspices of Napoleon, began preparations for the development of its own freeway network in the late 1920s, focusing at first on the region around Paris. In 1935, the creation of a national freeway system granted official government approval. In that year, construction began on the countrys first autoroute, as the French freeway system was to be called, along a 20-kilometer route between the Paris Saint-Cloud tunnel and the town of Orgeval.

The start of World War II and the subsequent German occupation of France, however, put a temporary end to the countrys freeway development. Nonetheless, the Saint Cloud-Orgeval roadway was put in service by the occupying forces. After the completion of repairs, that roadway was officially opened for civil traffic in 1946, marking the start of the first true French autoroute.

France was long to play catch up with its European neighbors in the development of a national freeway system. Until the mid-1950s, the French government had attempted to finance autoroute construction itself. In 1955, however, the government abandoned that model and instead converted its planned freeway system, at least temporarily, into a toll road network. By then, Frances autoroute system represented just 77 kilometers, compared to more than 3,000 kilometers in Germany. As part of its new legislation, the French government decided to create a number of semi-public companies that would take over the construction and operation of the countrys toll-based autoroute system.

The first of the new generation of autoroute companies began operations in 1956, when the Société de lAutoroute dEstérel Côte dAzur, or Escota, was granted the concession to build the countrys A8 roadway between Aix and Nice. The following year, however, saw the creation of a new company, Société dAutoroutes de la Vallée du Rhône, destined to become the countrys largest autoroute operator under the name of Autoroutes du Sud de la France. Also in 1957, the various European countries met to define common technical characteristics for the extended European freeway network.

The creation of semi-public companies and the use of tolls permitted France to more than double its freeway network by 1960. In that year, the French government imposed the toll-road system on a permanent basis. This action helped stimulate autoroute construction, and by the mid-1960s the country counted more than seven semi-public toll-road companies, which had put more than 650 kilometers of roadway into service. That number was to top 1,500 kilometers by the end of the decade.

Nevertheless, a movement for a reform of legislation governing the French autoroute system had been building through the 1960s. This movement gained significant impetus in 1970 when a snowstorm stranded some 6,000 vehicles on the A7 autoroute. By the beginning of the following year, reforms of the system had gotten underway. A chief feature of the new reforms was a liberalization of the market, enabling the formerly government run business to operate as more or less private companies. At the same time, the law allowed a number of new, non-government-owned business to enter the sector, including Cofiroute, which won concessions in the countrys central western region, and ACOBA, which operated along the Basque coast. The reforms also led many of the existing roadway operators to change names, including the SAVR, which adopted the new name of Autoroutes du Sud de la France (ASF) in 1973.

ASF continued to build out its networkits concessions later placed as the largest of the French autoroute groupswhile adapting new features and services to its roadway already in service. In 1975, ASF inaugurated its first automated entry lanes. The following year, the company debuted its first village rest area, the Village Catalan along the A9 roadway. ASFs rest areas, which offered typical rest stop amenities, often became destinations in and of themselves, helping to make the autoroute system even more attractive to travelers who more and more turned from the countrys toll-free national road system to the higher speed autoroute network.

In 1981, ASF completed its 1,000th kilometer of roadway, along the A62 autoroute, representing nearly one-fifth of the total French autoroute system then in service. Two years later, the companys rest area operations boasted the first multimodal rest area, in Port Lauragais, open not only to autoroute travelers but also to marine traffic along the Canal du Midi.

World-leading Public Toll-road Group in the 21st Century

An attempt to do away with tolls on Frances autoroute network, spearheaded by the socialist government that came to power in 1980, was defeated in the face of the enormous financial effort needed to construct and maintain the countrys roadway system. Meanwhile, a decade of economic turmoil, sparked by the Oil Embargo of the early 1970s, had brought most of the privately run autoroute companies to bankruptcy. Most of these were converted into government-owned entitieswith Cofiroute remaining the sole privately held survivorby the end of the 1980s. As a result, ASF itself gained in scope, taking over the A63 roadway developed by ACOBA, in 1991.

New reform in 1994 brought about a reformation of the French autoroute system as the government regrouped its autoroute business around three major regional poles, with ASF becoming responsible for most of the southern part of the country. As a result of the reorganization, Escota, which by then had nearly 550 kilometers of roadway completed, was placed under ASFs control.

ASF continued to add new services to its autoroute network, including automatic lanes for trucks in 1990, then began testing an electronic toll collection system in Toulouse in 1993. The company also continued to expand its network, building its 2000th kilometer in 2000. By then, ASF was the clear leader in the French autoroute system, with concessions totaling 34 percent of the entire national autoroute network and a 37 percent share of total autoroute revenues. Where the other government-held autoroute operators struggled against losses, ASF remained highly profitable.

The 21st century, however, was to mark the beginning of a new era for ASF. Under pressure from the European Union, the French government agreed to enact a number of changes in 2001, including the introduction of value-added taxes, a move which slashed more than EUR 110 million from ASFs profits. The French government also agreed to open up bidding for new highway concessions to the wider European pool, which in turn led the way to the creation of a number of new, privately held companies that began to compete for a share of the French roadway pool.

Company Perspectives:

The companys mission is to develop and operate the most important network of toll motorways in France, the second in Europe: that is our profession.

ASF itself moved to take advantage of the new opportunities available to it in the European Union, tendering bids for roadway concessions in Ireland and Greece in 2001. Meanwhile, further reforms were being put into place in the French autoroute sector, including the end of the financial system that had allowed the autoroute companies to finance construction of new roadway sections through the toll receipts gained on their existing network.

As a consequence, the French government announced its intention to privatize ASF, its largest and most profitable autoroute company, in 2002. While the economic downturn, and especially the depressed stock market, forced the government to cancel a number of other privatization projects, the move to list ASF proved more successful. Indeed, the ASF listing promised to be one of the largest European IPOs that year, and, given the companys steady, toll-based income, one of the most sought after.

The ASF IPO went ahead in March 2002, with shares selling at EUR 25 per share, nearly reaching the top of its proposed range, and pricing at a multiple of 24 times its estimated 2002 earnings. With 50 percent of the company up for sale, the listing was oversubscribed by some 18 times, driving up the share price by the end of its first day of trading. In all, the listing raised nearly EUR 2 billion for the French government.

By April 2002, ASF found itself sought after not only by investors but also by a joint-venture formed between French construction giants Vinci and Eiffage. Having gained a stake of more than 15 percent in ASF, both Vinci and Eiffage acknowledged their interest in expanding their holding in the autoroute operator. The French government was expected to sell off still more of its ASF shares in the near future. A link-up with Vinci appeared particularly attractive, given Vincis 66 percent share of Cofiroute, and its roadway holdings elsewhere in the world, which included an 83 percent share of the Chiles Chillian-Collipuli highway and minor shares in roadways in Canada and Thailand.

By the end of 2002, ASF appeared to confirm its investors hopes as its revenues topped EUR 2.1 billion, with net profits of more than EUR 230 million. The near future appeared to hold bright prospects for the company: it still held concessions on more than 300 kilometers of highway, which were expected to be completed by the end of the 2000s, more or less guaranteeing continued revenue growth. At the same time, the company was expected to begin cost-cutting initiatives to continue to drive up profits. Meanwhile, ASF had begun to compete for new autoroute concessions elsewhere in France, a move that was expected to help the company expand beyond its core southern and western regional focus. Lastly, the opening of the European roadway network to international competition promised still more growth opportunities for ASF. As one of the primary builders of Frances nearly 10,000-kilometer autoroute system, generally considered one of the worlds most advanced roadway networks, ASF looked forward to a promising future.

Principal Subsidiaries

Escota SA.

Principal Competitors

Autostrade - Concessioni e Costruzioni Autostrade S.p.A; Autopistas Concesionaria Española, S.A.; Société des Autoroutes du Nord et de lEst de la France; Compagnie Financière et Industrielle des Autoroutes S.A; Société des Autoroutes Esterei Côte dAzur Provence Alpes S.A.; Société des Autoroutes Rhône-Alpes S.A.; Autoroutes et Tunnel du Mont Blanc; Ste Autoroutes Esterel Côte dAzur Provence Alpes; Société des Autoroutes; Société de Construction des Autoroutes du Sud et de lOuest Sari; Cofiroute SA.

Key Dates:

Construction begins on the first French autoroute between Paris Saint-Cloud and Orgeval.
Saint-Cloud Orgeval autoroute is opened to civilian traffic.
The French government adopts legislation placing the development, maintenance, and operation of the countrys autoroute network under the control of quasi-governmental companies.
Escota becomes the first of the new autoroute companies, beginning construction of the Nice-Aix auto-route.
Autoroutes de la Vallée du Rhône (SAVR) begins operations in southwestern France.
SAVR changes its name to Autoroutes du Sud de la France (ASF).
ASF introduces its first automated toll entry points.
ASF completes 1,000 kilometers of autoroute.
ASF begins testing automated payment systems in Toulouse.
Under reorganization plan, ASF becomes the parent company to Escota, which continues to operate independently.
ASF completes 2,000 kilometers of autoroute.
The French government lists 49 percent of ASF on the Euronext Paris stock exchange, marking the one of the largest European IPOs of the year.

Further Reading

Chaperon, Isabelle, France Opts for Floatation of Road Group, Financial Times, January 28, 2002, p. 24.

Driving Through the Storm: Best Global Equity IssueAutoroutes du Sud de la France, Euroweek, January 24, 2003, p. 24.

Graham, Robert, and Mallet, Victor, Motorways Sell-off Breaks New Ground, Financial Times, October 18, 2001, p. 14.

Lanchner, David, All Roads Lead to ASF, Institutional Investor International Edition, January 2003, p. 47.

Minder, Raphael, French Set for ASF Toll Road Windfall, Financial Times, March 15, 2002, p. 28.

Paisner, Guy, Vinci Courts Government Over ASF, Financial News, June 7, 2002.

Tieman, Ross, Scramble as France Floats Its Toll Roads, Evening Standard, March 28, 2002, p. 82.

M. L. Cohen