SNCF GROUP FINANCIAL INFORMATION 1 st Half Year 2010 Results

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1 SNCF GROUP FINANCIAL INFORMATION 1 st Half Year 2010 Results Recovery in SNCF group 1 st Half 2010 results Net result and free cash flow at break-even point thanks to controlled operating expenses and investments Profitability remains unsatisfactory and ongoing structural reform must be pursued > Revenue up 5.6% at a constant consolidation and currency scope compared to a 1 st half year 2009 heavily affected by the crisis > Gross profit of 995 million, or 6.7% of revenue > Net result attributable to equity holders of the parent breaks even > Slightly positive free cash flow Guillaume Pepy, SNCF Chairman, made the following statement: The 1 st half year 2010 shows a partial recovery of activity lost in the 1 st half of 2009, especially in goods transport. Careful control of group expenses has brought gross profit back to levels which allow for balanced free cash flow. Recovery in gross profit is demonstrated throughout all group divisions, in particular SNCF Infra and SNCF Geodis, which were heavily affected by the crisis in the 1 st half year After a very challenging year in 2009, figures for the 1 st half year 2010 demonstrate a gradual and still fragile recovery of our activities, which must be pursued and amplified. The results remain unsatisfactory in light of our investment needs. The prevailing economic uncertainty leads us to remain prudent as to an upswing in volume in the 2 nd half year. We expect to see continuing progress in resolving structural difficulties linked to the rail freight activity and land-use planning trains, as well as managing and maintaining our infrastructure; but our projections do not yet indicate a return to a level of profitability capable of meeting our investment needs. The group will therefore continue to apply corporate cost control measures, and strive for acceptable profitability levels longterm for all its activities. page 1/7

2 Key figures as at 30 June 2010 SNCF group (Non-audited figures) Consolidated data (in millions of Euros) 1 st half year st half year 2009 Constant consolidation & currency scope (1) Revenue 14,945 11,944 3, % % Gross Profit (EBITDA) % ,4% as a % of revenue 6.7% 4.7% Current Operating profit (loss) 178 (194) as a % of revenue 1.2% (1.6%) Operating profit (loss) 430 (383) as a % of revenue 2.9% (3.2%) Finance costs (313) (105) (208) (181) as a % of revenue (2.1%) (0.9%) Net profit (loss) before exceptional items 12 (354) as a % of revenue 0.1% (3.0%) Net profit (loss) attributable to equity holders of the parent 80 (496) As a % of revenue 0.5% (4.2%) Self-financing capacity Free cash flow 20 (712) 732 Net indebtedness (2) 8,623 7,072 1,550 (1) Consolidation impact: - SNCF Proximités: Keolis - SNCF Geodis: SCO, Giraud, Cool Jet, Ciblex, Bertola, Logistics Beverage, Veolia cargo, Ermewa, Werner Egerland (STVA), Novatrans (2) Net indebtedness 2009 as at 31/12/2009: 7,172 M page 2/7

3 SNCF group performance Group revenue amounted to 14,945 million as at 30 June 2010, up 5.6% at a constant consolidation and currency scope, bearing in mind that first half year 2009 results were very heavily affected by the financial crisis and provide a favourable basis for comparison. Accounting for consolidation and currency effects, activity grew 25.1% compared to 1 st half year 2009, driven by the full accounting integration of Keolis and SNCF Geodis acquisitions. Gross profit reached 995 million, or 6.7% of revenue, against 4.7% in the first half of This represents growth of 430 million over the first half year 2009, of which 130 million attributable to development operations. At a constant consolidation and currency scope, all divisions show gross profit as at 30 June 2010 higher than that of the same period in 2009 ; this upward trend was driven by SNCF Infra (+ 184 million; profits made on additional renovation volumes), TER (+ 65 million) and SNCF Geodis (+ 83 million). In contrast, SNCF Voyages shows virtually stable gross profit, due to increased taxes and track access charges which offset the positive impact of improved revenue. Current operating profit is positive at 178 million as at 30 June 2010, compared to million in losses in the first half of 2009, and corresponds to recovery in gross profit. Operating profit reached 430 million, an improvement of 813 million over the 1 st half year This can be explained by the sale of assets in the 1 st half year 2010 (namely, the sale of high voltage lines to Réseau de Transport d Electricité (RTE, a French electricity transport network company) for 80 million and the sale of real estate assets amounting to 60 million), as well as the positive effect of a revaluation of previously-held investments in Keolis and Ermewa which contributed 316 million. It should be noted that the first half year 2009 basis for comparison suffered the negative impact of SNCF Infra asset depreciation amounting to 151 million. Net finance costs were million as at 30 June 2010, representing a decline of 208 million compared to the 1 st half year 2009 (- 105 million), mostly due to changes in the fair value of group hedging instruments. Net result attributable to equity holders of the parent As a consequence of these changes, the net result attributable to equity holders of the parent is positive at 80 M, versus a loss of 496 million for the same period in 2009, representing an improvement of 576 million. Net profit before exceptional items amounted to 12 million. page 3/7

4 Investments Paris, 31 August 2010 In the first half of 2010 total gross investments amounted to 1,445 million, including 960 million of capital investments. Financial position Free cash flow, at 20million, was modestly positive as at 30 June 2010, an improvement of 732 compared to the first half of 2009, due to: the 372 million rise in self-financing capacity brought about by the improvement in gross profit; reigning in capital investments (- 161 million); proceeds from the sale of assets ( 199 million), especially the disposal of a part of Batignolles and Réseau de Transport de l Electricité (RTE) operations. Net indebtedness was 8,623 million as at 30 June 2010, an increase of 1,451 million compared to 31 December Growth through acquisitions was higher than the proceeds from sale of assets ( 317 million). Capital investments ( 960 million) remained higher than cash from operations ( 663 million). Performance by division Revenue by division to 30 June 2010 (in millions of Euros) 1 st half year st half year 2009 Constant currency & consolidation scope SNCF Infra (infrastructure & engineering) 2,487 2, % 6.2% SNCF Proximités (local & regional transport) 5,271 3, % 11.4% SNCF Voyages (long distance transport) 3,603 3, % 7.2% SNCF Geodis (freight transport & logistics) 4,307 3, % 7.6% Gares & Connexions (station management & development) NB : Financial results for the new division Gares & Connexions have been published separately from those of the other four divisions from 1 January However, to facilitate comparisons with 2010, 2009 results for the Gares division in the above table are presented on a like-for-like basis, having previously been included in SNCF Voyages. page 4/7

5 Gross profit (EBITDA) by division to 30 June 2010 (in millions of Euros) 1 st half year 1 st half year SNCF Infra (infrastructure & engineering) (51) (235) 184 SNCF Proximités (local & regional transport) SNCF Voyages (long distance transport) SNCF Geodis (freight transport & logistics) 51 (61) 111 Gares & Connexions (station management & development) 69 NC NC > SNCF Infra : Revenue amounted to 2,487 million, a 6.2% increase compared to the first half of Network investments and renovations conducted on behalf of RFF, the entity which owns and maintains the French rail network, are the main reasons for the growth in revenue. Revenue from the Infrastructure Management Contract (CGI) were stable, while those of its subsidiaries (Systra, Inexia and SNCF International) grew by 8%. Gross profit was still negative at -51 M due to the unbalanced nature of the CGI contract, although it rose more than revenue. This 184 million increase was a result of the continued growth in business from RFF, new transitory agreements, good cost control, favourable results from RFF agreements (such as partial payment of additional pension costs), and a recovery of provisions. > SNCF Proximités : Revenue was 5,271 million, a 65.4% increase compared to the first half of 2009, boosted by the accounting integration of Keolis on 1 February 2010 amounting to 1,719 million. At a constant consolidation and currency scope, and excluding the impact of creating the Gares & Connexions division, growth was 172 million or 5.4%. TER accounted for 2/3rds of this as it broadened its service offer, more than offsetting the negative impact of the April strikes. Over the same period revenue from an increase in traffic rose 3.3% for TER and 4% for Transilien. Gross profit rose slightly to 293 million, up 192 million compared to the first half of 2009 and 90 million at a constant consolidation and currency scope, largely due to payments by the Organising Authorities and good cost control. Gross profit was positive in all division activities with the exception of Intercités. page 5/7

6 > SNCF Voyages : Revenue was 3,603 million, a 7.4% improvement over the first half of At a constant consolidation and currency scope and excluding the impact of creating the Gares & Connexions division, growth was 176 million or 5.3%. In a slightly more favourable economic climate than the same period last year, the recovery in revenue was boosted by strength in activity abroad (Eurostar, Thalys and Lyria). Gross profit rose slightly to 478 million (+ 15 million) compared to the first half of 2009 thanks to stronger revenue (+ 248 million, or million excluding Gares & Connexions), and was offset to a large degree by increased track access charges (+ 78 million), income and other taxes (+ 13 million) and other operating expenses. > SNCF Geodis : Revenue was 4,307 million, up 25.4% (+ 872 million) compared to the first half year million of this came from growth operations. At a constant consolidation and currency scope, revenue rose 7.6% (+ 260 million). Growth was particularly strong in Freight Forwarding, driven by the recovery in Asia-Europe traffic and by rising freight rates. Operating activity related to the automobile industry (especially STVA) increased sharply. By way of contrast, Rail Goods Transports (TFM) experienced a 1.8% decline (- 15 million), penalised by the strikes in April. Gross profit, at 51 million, improved by 111 million M with a negative group scope impact of 28 million. At a constant consolidation and currency scope, gross profit rose 83 million, with TFM contributing 30 million through better cost control, Geodis (global offer) 86 million through higher revenue and better cost control, and 21 million from Asset Management which also experienced growth revenue. > Gares & Connexions : Revenue amounted to 541 million, 67.5% of which came from station access charges paid by carriers. These charges are paid in exchange for basic services which, according to law, must be provided in a transparent and non-discriminatory fashion to all rail operators. In 2009, SNCF Voyages and SNCF Proximités were responsible for train station management. Gross profit was 69 million. First half results for 2010 reflect the status of Gares & Connexions as a separate and wholly independent division, as defined in 2009, and fully operational since the second half of * * * page 6/7

7 About SNCF group SNCF is a premier global mobility and logistics group with expected annual revenues of 30 billion in 2010 and almost 235,000 employees in 120 countries. A public group dedicated to public service, our mission is to achieve greater mobility, respect and solidarity by making ecomobility the driving force behind sustained growth and client preference for passengers, Organising Authorities and loaders. The Group is made up of 5 main divisions: managing, operating, maintaining and engineering railway infrastructures (SNCF Infra), local urban, commuter and regional passenger transport (SNCF Proximités), long distance and high speed passenger rail transport (SNCF Voyages), freight transport and logistics (SNCF Geodis) and train station management and development (Gares & Connexions). page 7/7