SNCF GROUP FINANCIAL INFORMATION 2010 annual results

Transcription

1 SNCF GROUP FINANCIAL INFORMATION 2010 annual results Net profit rallies despite limited recovery in France Despite effective cost controls at all levels, EBITDA remains insufficient to cover essential on-going investments in service quality and development Severe impact of non-recurring items ( 466 million) on net result Debt under control at 8.5 billion, with progress beating targets > Revenue up 4.1% at constant scope of consolidation and exchange rates, relative to a severely deteriorated situation in 2009 > EBITDA 2,163 million, equalling 7.1 > Recurring net profit 231 million (reported net profit 697 million) > Free cash flow negative in an amount of 162 million > Net debt 8,499 million Guillaume Pepy, Chairman of SNCF, comments: In 2010, SNCF carried over 10 million passengers a day, as well as goods in the service of clients in France, Europe and around the world. Our group also demonstrated its capacity to meet the needs of the day with efficient management of rail stations and the railway infrastructure making up the national network. Revenue in the year rebounded to partly make up for the slump in 2009, despite two extended strikes that cost the business 240 million in EBITDA. The effectiveness of page 1/9

2 cost controls favoured a moderate upturn in EBITDA, but this was not sufficient to provide the selffinancing capacity to cover very sizeable investment requirements. Our free cash flow performance nonetheless improved after a marked deterioration in the previous year, encouraging our continued efforts to build sound financial foundations for service quality and business development. At the end of the year, debt was well under control at 8,499 million, which is significantly lower than had been expected and consolidates progress towards our objectives. While we expect solutions for structural difficulties relating to the operation of subsidized Trains d'equilibre Territorial and the Infrastructure Management Contract, we continue to take a cautious view of prospects for SNCF is thus maintaining efforts to tighten cash management and build positions for the longer term with satisfactory levels of profitability in all our areas of businesses. page 2/9

3 Key figures at December 31, 2010 SNCF Group Consolidated data (in millions of euros) Change Change at constant scope of consolidation and exchange rates (1) Revenue % % Gross profit (EBITDA) % % as 7.1% 6.8% Current operating profit (loss) as 1.7% 0.6% Operating profit (loss) Financial profit (loss) Recurring net profit (2) as 0.8% 0.0% Net profit (attributable to equity holders of the parent) as 2.3% -3.9% Self-financing capacity Free cash flow Net indebtedness (1) Main impact of changes in scope of consolidation excluding revaluation of shares: - SNCF Proximités: Keolis - SNCF Geodis: SCO, Giraud, Cool Jet, Ciblex, Bertola, Logistics Beverage, Veolia Cargo, Ermewa, Werner Egerland (STVA), Novatrans. (2) Recurring net profit: net profit excluding exceptional items SNCF Group performance Consolidated revenue totalled 30,466 million, up 4.1% ( 1,024 million) at constant scope of consolidation and exchange rates, reflecting a favourable basis for comparison since 2009 operations were hard hit by recession. Taking into account changes in scope of consolidation and exchange rates, revenue rose 22.4% ( 5,584 million) from 2009, driven by the full consolidation of Keolis and acquisitions through SNCF Geodis. page 3/9

4 Gross profit (EBITDA) amounted to 2,163 million or 7.1, compared with 1,668 million and 6.8% in While this is up 475 million or 28.1% from 2009, including a 216 million increase at constant scope of consolidation and exchange rates, it remains too low to cover investments. All branches except SNCF Voyages reported a year-on-year rise in EBITDA at December 31, The increase, like for like, was mainly attributable to SNCF Infra ( 230 million), SNCF Proximités ( 82 millions) and SNCF Geodis ( 86 million). SNCF Voyages reported a loss ( 42 million at constant scope of consolidation and exchange rates), due in particular to an increase in track access charges paid to RFF (owner of the French railway network). Current operating profit was 531 million at December 31, 2010, compared with 145 million in 2009, in line with the rise in EBITDA. Operating profit came to 1,409 million, up 1,869 million from This reflects the basis for comparison with the previous year, which was affected by a 1,037 million write-down of assets at SNCF Infra and SNCF Geodis. In 2010, operating profit was buoyed by the indirect impact of acquisitions (revaluation of Keolis, Ermewa and Eurostar shares, previously valued at 585 million) and asset disposals during the year (in particular high-voltage lines to Reseau de Transport d Electricité and real estate). Recovery of a 356 million provision for assets relating to the operation of Trains d Equilibre du Territoire (TET) for land-use planning in regions, the subject of an agreement with the French State, was offset by further write-downs of assets at SNCF Geodis (- 250 million) and SNCF Infra (- 79 million). Financial items showed a 358 million loss at the end of 2010, or 55 million more than the 30 million loss at the end of This was due to a decline in the fair value of financial instruments. Net profit attributable to equity holders of the parent Together these developments set net profit attributable to parent-company equity holders at 697 million, compared with a 980 million loss at the end of 2009, an improvement of 1,677 million. The change in exceptional items was 1,449, while net profit before exceptional items was up 228 million. As a percentage of revenue, net profit before exceptional items eased from 2.1% in 2008 to 0.8% in In other words, 2010 did not correct the decline in profitability observed in 2009 (2009 recurring net profit: 3 million). Capital expenditure page 4/9

5 In 2010, capital investments amounted to 2,127 million, while an additional 926 million was directly financed by organising authorities. Gross investments thus totalled 3,053 million, including: - Rolling stock for a total of 1,719 million, of which more than two-thirds was for new equipment, in particular over 100 new-generation TER regional trains, 12 Francilien trains for Transilien, 13 tram trains, 17 TGV trains, and special locomotives for the operations of SNCF Infra; vehicles for Keolis; - Modernisation of stations for an amount of over 160 million, with main stations concerned including Paris Lyon, Paris Nord, Lyon Part Dieu, Bordeaux Saint Jean, Belfort and Bellegarde; - Maintenance centres, renovation, technical and IT equipment for over 560million. Financial position While free cash flow was negative in an amount of 162 million at the end of 2010, this represented an improvement of 329 million from the end of 2009 and reflected: - a 68 million decline in self-financing capacity; - limitation of capital investments, down 85 million from the previous year; - a 312 million rise in the proceeds of divestment, including in particular inflows relating to realestate transactions in the Batignolles area of Paris and the sale of high-voltage lines to Réseau de Transport de l Electricité (RTE). Net financial debt at 31 December 2010 amounted to 8,499 million, showing a rise of 1,327 million from 31 December 2009, but remaining well below the amount initially anticipated. Capital investments amounting to 2,127 million again exceeded self-financing capacity, which came to 1,431 million, and an additional increase resulted from the impact, mainly in terms of book entry, of the consolidation of debt relating to acquisitions finalized in 2010, in particular Keolis and Ermewa. Performance by division Revenue by division to December 31, 2010 (in millions of euros) Change SNCF Infra (infrastructure & engineering) Change at constant scope of consolidation and exchange rates % +1.0% page 5/9

6 SNCF Proximités (local & regional transport) SNCF Voyages (longdistance transport) SNCF Geodis (freight & logistics) Gares & Connexions (station management & development) % +7.5% % +5.4% % +6.6% Note: Financial data concerning the new Gares & Connexion division have been separated from those for the other four divisions since January 1, However to allow comparisons with 2010, figures presented here identify related items for 2009, when the business of what is now the Gares & Connexion division was partly conducted by the SNCF Voyages division. EBITDA by division to December 31, 2010 (in millions of euros) Change Change at constant scope of consolidation and exchange rates SNCF Infra SNCF Proximités SNCF Voyages SNCF Geodis Gares & Connexions NS: Not significant NC: Non-comparable % 5.4% 12.6% % 15.4% NS 4.6% 14.4% -49 NS NC NC NC > SNCF Infra (infrastructure and engineering): Revenue rose 1% on a year to 5,182 million. Renovation and upgrade work for Réseau Ferré de France (RFF), which owns the French railway network, showed a rise from EBITDA came to 136 million, showing an improvement of 230 million, an amount that included over 195 million for items not directly related to operations in It also reflects improvement in construction and renovation business resulting from renegotiation of contracts with RFF (excluding the infrastructure management contract) and effective control of personnel costs. page 6/9

7 > SNCF Proximités (local and regional transport) Revenue came to 10,770 million, showing a rise of 4,191 million from 2009, of which 3,694 million resulted from the consolidation of Keolis. At constant scope of consolidation and exchange rates, and excluding the impact of the creation of the new Gares & Connexions division, the rise in revenue was 149 million or 2.3%. While strikes in spring and autumn resulted in a slight decline in passenger traffic, down 0.5% for rail services, business benefited from the expansion of services and the new TER and Transilien commuter and regional rail offerings decided on by organizing authorities. EBITDA came to 588 million, showing a rise of 286 million or 81 million at constant scope. This was made up of a 41 million contribution from TER regional trains and a 40 million contribution from the Transilien commuter network serving Paris. Improvement reflects cost controls and a rise in revenue, making for higher profitability. However it is based on comparison with a much-deteriorated situation in 2009 and results remain below levels achieved in 2008, reflecting the continued strains associated with trends in costs and revenue. > SNCF Voyages (long-distance and high-speed passenger rail) Revenue came to 7,217 million, showing a rise of 5.3% from At constant scope of consolidation and exchange rates, and excluding the impact of the creation of the new Gares & Connexions division, the rise in revenue was 240 million or 3.5%. This modest rebound following on a slight decline in the previous year was mainly attributable to firm trends in international traffic, benefiting from a good sales performance for Eurostar, expansion of Thalys services to Amsterdam following the opening of the high-speed line in the Netherlands, and expansion of Lyria services to Switzerland. It also reflected the favourable effects of improved economic conditions on domestic revenue in France (TGV and idtgv), which offset the impact of strikes and work on lines. The overall rise in passenger traffic for the year was 0.7%. EBITDA came to 915 million showing a year-on-year decline of 74 million or 42 million at constant scope of consolidation and exchange rates. Excluding the 100 million charge for CST (Contribution de Solidarité Territoriale) to finance subsidized Trains d Equilibre du Territoire for land-use planning, EBITDA showed a modest like-for-like rise of 58 million, reflecting effective control of operating costs within the business and firm revenue trends, which however only just covered the 174 million rise in usage fees. > SNCF Geodis (freight and logistics) Revenue came to 8,890 million, showing a rise of 20.5% or 1,512 million, while the rise in rail freight business (TFM) taken alone was 3.9% and acquisitions contributed 858 million. At constant of consolidation and exchange rates, revenue rose by 486 million or 6.6%, with international Freight Forwarding the main driver. Freight volumes measured in metric gigatons per kilometre (GTK) were up 15.1%, reflecting in particular the acquisition of Captrain subsidiaries. page 7/9

8 EBITDA came to 104 million, showing an improvement of 153 million. Acquisitions accounted for 67 million of this, while Global Offering business contributed 49 million and Asset Management 57 million, offsetting a 17 million decline for Rail Freight (TFM). > Gares & Connexions (station management and development) Revenue came to 1,134 million, with 66% of this representing station access charges paid by carriers. These fees are charged for essential services that must legally be made available on a transparent, non-discriminatory basis to all rail operators. Up until 2009, station management business was handled by the SNCF Voyages and SNCF Proximités divisions. EBITDA amounted to 175 million. Annual results for 2010 concern the Gares & Connexions division within the scope defined in 2009 and fully operational from the second half of Outlook While progress can be expected in the resolution of the Group's structural difficulties, the relative weakness of its markets offers little prospect of a steep rise in revenue, and this calls for caution on 2011 margins. It is thus too early to expect profitability to reach a satisfactory level, meaning an EBITDA margin estimated at between 10% and 12% to cover the recurrent investments needed to ensure the quality of service and back development. The SNCF group is thus continuing action to achieve acceptable levels of earnings in all areas of business. Upcoming announcement > First-quarter revenue: April 21, 2011 * * * 2010 consolidated financial statements are available on the SNCF Group website ( under Finance About SNCF group SNCF is a world leader in mobility and logistics with a presence in 120 countries and a total workforce of 241,000 generating revenue of 30.5 billion in A public sector group dedicated to public service, SNCF builds on its foundations in rail to offer an extended range of page 8/9

9 services for smooth door-to-door mobility in the interest of transport and logistics operators, passengers and the regional and local governments that are its organizing authorities. Targeting cross-border and international markets, the group is made up of five divisions: SNCF Infra, managing, operating, maintaining and developing rail and related infrastructure; SNCF Proximités, operating local, urban and regional passenger services; SNCF Voyages, operating long-distance and high-speed passenger rail services; SNCF Geodis, providing freight and logistic services; and Gares & Connexions, charged with train-station management and development. page 9/9