PRESS RELEASE - LA PLAINE SAINT DENIS, 31 JULY 2019
SNCF GROUP 2019 HALF-YEAR RESULTS
SNCF's mission: bringing the freedom of effortless mobility and a greener
planet to all. In H1 2019, the Group reported decisive progress on each of the
six commitments it has made to reach this goal:
- It grew rail use in France, with a rise of over +11%* in the number of
high-speed rail passengers, including SNCF's new InOui experience and low-cost
Ouigo service. Conventional rail also benefited, with a +4.3%* increase in
travellers using Transilien services in the Paris Region and a 15.9%* rise for
TER regional trains. Rail freight slowed, but this was partly offset by
operations in Europe, and the start-up of a fifth rail motorway provided a
- A drive to be best on fundamentals generated gains in both safety (events
down 11%) and on-time performance, up +1.3 points from the previous high in
2014 for all passenger activities combined. TER regional trains and Transilien
commuter trains made their best showing since 2010, at 92.9% and 90.7%,
respectively, and TGV high-speed rail's on-time performance rate was 90.9%, its
highest since 2015.
- Client satisfaction improved, reaching a record high of 77% for high-speed
rail and 74% for TER regional rail, thanks to investment in rail network
upgrades, faster renewal of rolling stock, and effective passenger service
- Employee engagement and satisfaction are critical to the Group's future
success, and SNCF is investing more than ever to build the skills and expertise
its workforce needs to meet the rail challenges of tomorrow. A core feature is
the negotiation of an attractive, incentive-based labour agreement.
- Strong business performance remains critical, and H1 figures exceeded targets
with revenue at EUR17.9bn, EBITDA up sharply at EUR2.9bn, and net profit in
- The Group worked with regions to advance the ecological and inclusive
transition through flagship initiatives, including launch of the Assistant SNCF
app to promote shared mobility and the announcement of a 25-year contract to
source power from renewable sources.
> Revenue grew a sustained +10.5% to total EUR17.9bn. Excluding the negative
impact of the 2018 strike, business rose +5.0%.
> International business was a major growth driver, with Keolis turning in a
particularly strong performance outside France (+21.4%).
> EUR400m in additional competitivity gains for H1 2019, with EBITDA at
EUR2.9bn (16% of revenue).
> Increased investment in rail infrastructure upgrades in H1 2019, with the
total set to reach EUR10.1bn for the full year (infrastructure and trainsets/
rolling stock, all funding sources combined).
> Rise in self-financing capacity generated by SNCF Mobilités, where
investments in new rolling stock and other areas totalled EUR1.9bn (all
funding sources combined)
> Recurring net profit came to +EUR20m, up +EUR551m over 30 June 2018.
* The strike in spring 2018 makes a comparison problematic; figures above thus
compare H1 2019 with H1 2017.
Sustained growth across all operations in France, with even stronger gains on
Strong growth in H1 2019 more than made up for ground lost during the strike in
spring 2018, as revenue rose +10.5% to EUR17.9bn. Excluding the strike's
impact, the rise was +5.0%.
High-speed passenger rail traffic increased +16.9% over the period in France
(excluding subsidiaries). When compared with H1 2017 (to avoid distortion from
the 2018 strike), the rise was 11.1%, confirming extremely robust growth for
TGV service. Other rail transport traffic also grew, with Transilien (Paris
Region) and TER (regional rail) rising +12.5% and +21.4%, respectively, or
+4.3% and +15.9% when compared with H1 2017. TER got a special boost when
certain Intercités lines, previously operated under an agreement with the
French state, were transferred to TER management under an agreement with French
At Keolis, business was up +11.9%, buoyed by a steep +21.4% rise on
international markets, thanks to its contract to operate the Transport for
Wales network since year-end 2018, plus business in the United States, Sweden
Passenger traffic rose +4.6% for Thalys, including +22% for low-cost IZY
At SNCF Logistics, revenue was up +2.6%, with a boost from international
markets despite a disappointing showing in several sectors in Q2 2019,
particularly in June. GEODIS reported robust growth in contract logistics (up
+8.8% in the US).
TFMM rail & multimodal freight transport reported growth of +11.8% (-1.3%
excluding the impact of the 2018 strike). June saw a marked slowdown as several
European industries struggled. Multimodal transport gained +20% (+7% excluding
the impact of the 2018 strike), buoyed by European traffic and commissioning of
a fifth rail motorway, linking Barcelona with Bettembourg in Luxembourg.
Finally, Ermewa, a specialist in rolling stock management and a very active
player on international markets, reported growth of +17.8% in H1 2019, thanks
in part to its acquisition of Raffles Lease, which consolidated its position as
owner of one of the world's largest tank container fleets.
Gares & Connexions also made strong gains with revenue up +10.9%. It is
aggressively marketing commercial space in stations, and has signed a technical
services contract to help renovate two stations in southern India.
Meanwhile, SNCF Group continued to improve its business performance ...
Ongoing performance plans have generated an additional EUR400m in competitivity
gains since the beginning of the year, or nearly 60% of the Group's full-year
target of EUR700m. These include optimizing procurement for network up- grades,
cutting operating costs, deploying a highly responsive sales strategy, adapting
SNCF's offer, fighting passenger fraud, and reducing structural costs.
At the same time, the Group continued planned recruitment, hiring nearly 6,400
new employees in France in H1 2019. Of the new hires, over one-third were in
... made additional investments in customer services ...
As planned, investments continued on a massive scale, with over EUR10bn
expected for the full year. Over 50% will be financed by SNCF Group from its
own funds, and over 90% will be in France. First-half outlays totalled
SNCF Réseau invested heavily in renovation works and upgrades (EUR2.4bn),
spending EUR248m more in H1 2019 than in H1 2018, with EUR5.6bn projected full
year. Regional development projects, co-financed by regional authorities and
the French State, rose EUR185m over the period. They included start-up of the
central command unit for the network serving Belfort, in eastern France, after
more than ten years of analysis and works; the move will cut operating costs
significantly while delivering substantially improved service quality. In the
Paris Region, France's largest railway tunnel-boring machine began work in
February on the six-kilometre section of the EOLE line linking Courbevoie
Gambetta to Paris. Works aimed at improving accessibility for people with
limited mobility also continued.
In addition to these massive investment in the rail network, SNCF Mobilités
invested EUR1.9bn (all funding sources combined), with new rolling stock
accounting for two-thirds of the total. This included 56 trainsets: 22 for
Transilien in the Paris Region, 28 for TER and Intercités serving French
regions, and six high-speed TGV Océane trainsets serving western France.
...and delivered good results.
Strong business performance combined with cost-cutting set Group EBITDA at
EUR2.9bn, up EUR1.7bn (+EUR1.2bn using identical IFRS accounting rules). At
constant scope of consolidation and discounting the negative impact of H1 2018
(including the strike) on financial statements, EBITDA improved nearly
This improvement in EBITDA was mitigated by a +EUR150m increase in amortization
resulting from the increase in value of high- speed rail assets and stations in
Recurring net profit came to +EUR20m, up +EUR551m from 30 June 2018.
These results are well above Group projections for mid-year 2019, and H2 is
enjoying a more robust seasonal boost than expected.
OUTLOOK FOR FULL-YEAR 2019
SNCF Group is pursuing ambitious aims for H2 2019 in the run-up to
implementation of French rail reform and creation of a new unified state-owned
group in 2020. This has meant stepping up efforts to improve rail service
quality to meet passenger demand, while trimming costs and increasing
competitive edge. At the same time, it has rolled out an aggressive sales
strategy to win more revenue and prepare for the opening of France's domestic
rail market to outside competition. Within SNCF Réseau, the Nouvel R
transformation programme, launched in 2018, is strengthening the critical role
of infrastructure manager, improving client relations and boosting operational
performance with contributions from key production areas.
In logistics, the Group will track business conditions and global cargo volumes
SNCF GROUP: KEY FIGURES, H1 2019
CONSOLIDATED DATA (IFRS) H1 2018 H1 2019 Change at constant
EUR MILLIONS Proforma scope of consolidation,
IFRS 16 and exchange
Revenue 16,079 17,854
Change H1 2018/H1 2017 +11.0% +10.5%
EBITDA 1,238 2,888 + 1,164
As % of revenue 8.0% 16.2%
EBITDA excluding IFRS 16* 2,398
Recurring net profit
attributable to equity
parent co. -579 10 +631
Net profit (attributable to
equity holders of the parent
company) -488 20 +551
Investments (all funding
sources combined) 3,964 4,317 +453
Incl. net investments
(financed by SNCF) 2,635 3,055 +520
Free cash flow for
SNCF Mobilités -71 -77
Free cash flow for
SNCF network -1,815 -1,481
SNCF Mobilités -8,167 -8,078
SNCF Réseau -48,595 -51,641
SNCF Mobilités and SNCF Réseau financial statements at 30 June 2019 underwent
a limited review by the statutory auditors. SNCF Group consolidated financial
statements at 30 June 2019 were not subject to the same review.
* Application of IFRS 16: IFRS 16, which takes effect on 1 January 2019,
changed the way leases are accounted for. Today a single approach has been
adopted for all-"on balance sheet", i.e., all leases are registered as an asset
on the balance sheet with the corresponding financial commitment appearing as a
liability. This has little impact on net profit since the positive impact of
cancelling rents (boosting EBITDA) is offset, first, by depreciation of assets
(impacting ROC) and second, by financial expense relating to the debt. This
debt is excluded from net financial debt.
FOCUS: SNCF MOBILITÉS
SNCF Mobilités reported revenue of EUR17bn, up +10.7%, for a remarkable first
half that was driven by business at Keolis, SNCF Transilien & TER and TGV
high-speed rail. Excluding the negative impact of the strike in spring 2018,
growth was a sustained +5%.
EBITDA as a percentage of revenue was up +70% (vs H1 2018 like-for-like). The
improvement was visible across the board and testified to SNCF Mobilités'
capacity to generate profitable business.
Recurring net profit stood at a positive EUR164m, a rise of over EUR300m that
bears out this analysis, despite the negative impact of additional amortization
linked to revaluation of TGV assets in 2018.
Total investments financed by SNCF ownfundsreachedarecordEUR1.3bn, upEUR436m,
with self-financing capacity significantly higher at 80%. Free cash flow was
nearly balanced, while net debt was held to EUR8.1 billion at 30 June 2019, for
a EUR0.9 billion rise from 31 December 2018. ThiswasduetoaEUR537 million
contribution from SNCF Mobilités' previous results("dividend"), as provided
under the Rail Pact-all of which will be used to accelerate SNCF Réseau's
investment in renovating and upgrading rail infrastructure, as well as for
See SNCF Mobilités H1 2019 financial statements at
FOCUS: SNCF RÉSEAU
The first half of 2019 saw record investment in railway infrastructure, with a
full EUR2.4bn poured into renovation and upgrades-a rise of EUR248m from 30
June 2018, with EUR5.6bn planned full year. Priority went to renovating the
network's core structures, building on increased mechanization and greater use
of industrialized processes.
Despite no change in the volume of train slots from the first half of 2018
(excluding the strike's impact), revenuecametoEUR3.3bn, up 3.6% (excluding
strike), buoyed by the positive impact of track usage fees (+1.7%). EBITDA
stood at EUR947m, up EUR400m from the first half of 2018, with a EUR44m
structural improvement over the same period. The resulting EUR75m performance
gain reflected SNCF Réseau's industrial performance plan, which called for
optimizing methods, boosting efficiency and cutting costs, and was in line with
formal commitments made under that contract.
Together these factors increased free cash flow by +EUR335mcompared with June
2018, for a total-EUR1,481m at 30 June 2019. Healthier finances-another key
priority for SNCF Réseau-reflected successful efforts to bring interest
expense under control as average interest rates edged down. The cost of net
financial indebtedness was nearly unchanged at -EUR746m despite the rise in net
debt, whichstoodatEUR51.7bn at 30 June 2019 vs EUR49.6bnattheend of 2018. In
addition to the change in free cash flow, H1 2019 to date-and temporarily-was
hit by a-EUR570m change in fair value of financial instruments compared with
-EUR149m at the end of June 2018.
See SNCF Réseau's H1 2019 financial statements at:
ABOUT SNCF GROUP - sncf.com
A global leader in passenger transport and freight logistics, SNCF reported
EUR33.3 billion in revenue in 2018, with one-third generated on international
markets. With 272,000 employees in 120 countries, SNCF draws on its foundations
in French rail and its extensive experience as an architect of transport
services. SNCF Réseau (management and operation of the French rail network);
commuter transport (mass transit in the Paris region, TER regional rail, and
Keolis in France and worldwide); long distance rail (TGV inOui, Ouigo,
Intercités, Eurostar, Thalys and more, and ticket sales through Oui.sncf);
SNCF Gares & Connexions (station management and development), SNCF Logistics
(freight transport and logistics worldwide with Geodis, Fret SNCF and Ermewa)
and SNCF Immobilier (management and optimization of SNCF property and land