BOARD OF DIRECTORS’ MEETING OF 29 JULY 2016
SNCF Mobilités
30 June 2016
HALF-YEAR ACTIVITY
REPORT
and
CONDENSED HALF-YEAR
CONSOLIDATED FINANCIAL
STATEMENTS
MANAGEMENT STATEMENT
FOR THE HALF-YEAR FINANCIAL
REPORT
La Plaine Saint-Denis, 29 July 2016,
We attest that, to the best of our knowledge, the half-year consolidated financial statements have been prepared in accordance with the applicable accounting principles and give a true and fair view of the assets and liabilities and the financial position of the Group as of 30 June 2016 and of the results of its operations for the period then ended, and that the accompanying half-year financial report fairly presents the changes in operations, results and financial position of the Group and a description of its main risks and uncertainties.
The Chairman
Guillaume PEPY
Executive Vice-President,
Performance
Mathias EMMERICH
1
IFRS in € millions
30 June 2016
HALF-YEAR
ACTIVITY
REPORT
2
CONTENTS
SNCF MOBILITÉS GROUP IN 2016 ........................................................................................... 3
1 MAJOR EVENTS IN THE FIRST HALF OF 2016 ............................................................. 3
2 KEY FIGURES ................................................................................................................. 4
3 SUBSEQUENT EVENTS ................................................................................................ 5
GROUP RESULTS AND FINANCIAL POSITION ........................................................................ 6
1 GENERAL OBSERVATIONS ON GROUP RESULTS ...................................................... 6
2 ACTIVITIES AND RESULTS BY SEGMENT .................................................................. 10
3 NET INVESTMENTS AND NET DEBT ........................................................................... 22
4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND RATIOS ................... 24
5 FINANCIAL RELATIONS WITH THE FRENCH STATE, SNCF RÉSEAU AND LOCAL
AUTHORITIES ...................................................................................................................... 26
6 EMPLOYEE MATTERS .................................................................................................. 28
7 CHALLENGES AND OUTLOOK .................................................................................... 29
CORPORATE GOVERNANCE ................................................................................................. 30
1 THE BOARD OF DIRECTORS ....................................................................................... 30
2 MANAGEMENT TEAM .................................................................................................. 31
3
SNCF MOBILITÉS GROUP IN 2016
1 MAJOR EVENTS IN THE FIRST HALF OF 2016
1.1 LOSS OF CONTROL IN AKIEM
To encourage the development of the locomotive leasing activity conducted by its wholly owned subsidiary Akiem,
the Group sold 50% of its shares to an investor partner on 5 February 2016. The partnership agreement grants joint
control rather than exclusive control to SNCF Mobilités. The transaction’s effective date is 30 June 2016, contingent
to the fulfilment of conditions precedent, and specifically the opinion of the Competition Authority. Akiem has been
equity-accounted as of this date. As at 31 December 2015, and pursuant to IFRS 5 “Non-current assets held for sale
and discontinued operations,” the assets and liabilities of this company are presented under “Assets classified as held
for sale” and “Liabilities associated with assets classified as held for sale” in the statement of financial position.
Detailed information is presented in Note 4.2 to the condensed half-year consolidated financial statements.
1.2 LABOUR MOVEMENT
A portion of the EPIC SNCF Mobilités employees conducted a strike in the first half as part of the renegotiation of
the labour agreement following the set-up of a branch agreement and a core decree by the French State applicable to
all rail players. Although there was a significant mobilisation to limit customer impacts, the conflict had
consequences for nearly all the Group businesses. Specifically, there were revenue losses and additional costs for
customer compensation.
1.3 CONSEQUENCES OF INCLEMENT WEATHER AND TERRORIST ATTACKS
The unusual bad weather at the end of the first half of 2016, largely in the north of France, significantly disrupted the
passenger and freight traffic of SNCF Mobilités Group and reduced revenue.
The terrorist attacks in 2015 and the first half of 2016 resulted in revenue and gross profit setbacks in relation to the
budget for the TGV, Eurostar and Thalys CGUs. At this stage, the Group views these setbacks as cyclical (see Note
1.2.2.3 to the condensed half-year consolidated financial statements).
1.4 EXIT OF THE UNITED KINGDOM FROM THE EUROPEAN UNION (BREXIT)
In a referendum held on 23 June 2016, the United Kingdom voted in favour of leaving the European Union
(“Brexit”). In the UK, the Group transports passengers (mainly through Eurostar and joint ventures within Keolis)
and freight (through the Geodis and STVA subsidiaries in particular). In the first half of 2016, the UK subsidiaries
contributed €699 million to Group revenue, of which €508 million for Eurostar. As at 30 June 2016, the joint
ventures within Keolis represent an equity-accounted value of €29 million in the consolidated statement of financial
position.
It is presently too early to determine whether the decision expressed by the British people will have financial and/or
business consequences for the Group.
4
2 KEY FIGURES
In € millions 30/06/2016 30/06/2015
Revenue 15,143 14,260
Gross profit 833 1,121
Current operating profit 132 404
Operating profit after share of net profit of companies consolidated under the equity method
254 629
Finance costs -207 -125
Net profit /(loss) for the period attributable to owners of the parent
-25 318
Cash flow from operations 485 755
Net investments 1,073 977
Current operating profit after share of net profit of companies consolidated under the equity method
150 314
ROCE (1) 1.8% 4.9%
Employees 193,747 248,937
(1) ROCE or return on capital employed = the ratio between current operating profit after share of net profit of
companies consolidated under the equity method and average capital employed.
The capital used in this calculation is the algebraic sum of equity (including non-controlling interests - minority
interests) and net indebtedness. They are adjusted for asset impairment. The average with the prior year’s capital
employed gives the average capital employed. The ROCE presented here was calculated on a 12-month rolling basis.
In € millions 30/06/2016 31/12/2015
Net debt 8,203 7,772
5
3 SUBSEQUENT EVENTS
The main subsequent events are as follows:
3.1 INTERCITÉS
Following the roadmap presented on 7 July 2015, the French Secretary of State for Transport announced the
following measures on 19 February 2016 as part of an update:
- The renewal of rolling stock for Trains d’Équilibre du Territoire (TET), including an investment in
backbone lines of around €1.5 billion by 2025.
- The discontinuation of funding for 6 out of 8 night lines (the Paris-Briançon, and Paris-Rodez / Latour de
Carol night lines will be maintained), and a forthcoming call for expressions of interest to assess all the
proposals likely to be drawn up for these 6 lines, including the management of operations by another
authority.
- The continuation of discussions with the Régions, to develop the current TET offering, based on the
recommendations of the Duron commission.
The Secretary of State for Transport specified that these decisions will be made by the French State as and when
agreements are entered into with the Régions on the day lines, and according to the outcome of the call for
expressions of interest regarding the night lines.
On 21 July 2016, the Secretary of State for Transport announced that, in the absence of buyers, the 6 night lines will
gradually close on 1 October 2016, and 1 July and 1 October 2017. It also announced the signing of a new five-year
(2016-2020) agreement with SNCF Mobilités this fall, which should provide better passenger service and a return to
business equilibrium for SNCF Mobilités. The Secretary of State further confirmed the financing of significant
investments and continuing cooperation with the regions regarding certain lines.
At this stage, there has been no change since the balance sheet date that would significantly challenge the Group’s
assessment of the €106 million provision for onerous contracts recognised as at 31 December 2015 in respect of the
of the first year (2016) of the future agreement. This provision has been reversed in the amount of the losses
recognised in the first half (see Note 4.3 to the condensed half-year consolidated financial statements).
3.2 APPEAL TO THE CONSEIL D’ÉTAT FOR THE CALCULATION OF THE OLD AGE CONTRIBUTION RATE
On 12 July 2016, the Conseil d’État annulled the interministerial decree of 27 July 2015 that determined the
components of the definitive T1 for 2014 and the provisional T1 for 2015. As this favourable decision was handed
down following the closing of the condensed half-year consolidated financial statements, no income was recorded
for the period ended 30 June 2016. The Conseil d’État decision on the definitive 2015 T1 rate should be known by
September 2016. Detailed information is provided in Note 4.3.2.1 to the condensed half-year consolidated financial
statements.
3.3 ARAFER STUDY ON RAIL STATION MANAGEMENT
In July 2016, the French Rail and Road Regulatory Body (ARAFER) published a thematic study on the management
of passenger rail stations in France in which it formulated a certain number of recommendations. In particular, these
recommendations covered the positioning of the station manager in view of the introduction of competition in the
passenger rail transport sector. The study is in no way an indication of the Government’s future direction for 2016, as
stipulated in the law of 4 August 2014 covering rail reform. Additional information is provided in Note 1.2.3.3 to the
condensed half-year consolidated financial statements.
3.4 ADDITIONAL TRANSFERS UNDER THE RAIL REFORM
Following approval by a ministerial decree of 28 June 2016 and a favourable opinion from the ARAFER on 25 May
2016, the remaining asset transfers to SNCF Réseau stipulated under the rail reform law of August 2014 will be
carried out on 1 July 2016. This will give rise to a €68 million decrease in assets held for sale in the second half of
2016 (see Note 4.2.2 to the condensed half-year consolidated financial statements).
6
GROUP RESULTS AND FINANCIAL POSITION
1 GENERAL OBSERVATIONS ON GROUP RESULTS
In € millions 30/06/2016 30/06/2015 2016 vs 2015
change
Revenue 15,143 14,260 883 6.2%
Infrastructure fees -2,091 -1,981 -110 5.6%
Purchases and external charges, excluding infrastructure fees
-6,140 -5,204 -936 18.0%
Taxes and duties other than income tax -775 -723 -53 7.3%
Employee benefits expense -5,537 -5,455 -82 1.5%
Other income and expenses 234 223 11 4.7%
Gross profit 833 1,121 -287 -25.6%
Depreciation and amortisation -688 -706 18 -2.6%
Net movement in provisions -13 -10 -3 28.1%
Current operating profit 132 404 -272 -67.3%
Total net profit from asset disposals 110 109 1 0.9%
Fair value remeasurement of the previously held interest
26 680 -654 -96.2%
Impairment losses -32 -474 442 -93.2%
Operating profit 235 719 -484 -67.3%
Share of net profit of companies consolidated under the equity method
18 -90 108 -120.5%
Operating profit after share of net profit of companies consolidated under the equity method
254 629 -375 -59.7%
Finance cost net of employee benefits -49 13 -62 -472.7%
Net borrowing and other costs -158 -138 -20 14.7%
Finance cost -207 -125 -82 65.6%
Net profit before tax 47 504 -457 -90.8%
Income tax expense -93 -174 81 -46.3%
Net profit/(loss) from ordinary activities -47 330 -377 -114.2%
Net profit before tax of transferred operations 6 -6 -100.0%
Net profit/(loss for the period -47 336 -383 -113.9%
Net profit/(loss) for the period attributable to equity holders of the parent
-25 318 -344 -107.9%
Net profit/(loss) for the period attributable to non-controlling interests (minority interests)
-22 18 -39 -223.4%
Gross profit / revenue 5.5% 7.9%
Current operating profit / revenue 0.9% 2.8%
ROCE (1) 1.8% 4.9%
(1) See definition of ROCE in Key figures
7
1.1 COMPARABILITY OF THE FINANCIAL STATEMENTS
The comparability of the 2016 results with those of 2015 was impacted by the following changes:
In € millions Impacts on changes in
revenue
SN
CF
Vo
yag
eu
rs
SNCF Transilien, Régions and
Intercités
Changes in 2015 Group structure (1)
Deconsolidation of SNCF Infra - indirect impact 40.3
Creation of EPIC SNCF - indirect impact 7.2
Other -0.1
Voyages SNCF
Changes in 2015 Group structure (1)
Creation of Thalys International 39.8
Acquisition of control of Eurostar 405.2
Acquisition of control Eurostar - indirect impact -32.0
Deconsolidation of SNCF Infra - indirect impact 3.9
Creation of EPIC SNCF - indirect impact 2.0
Exchange rate fluctuations -9.5
Gares & Connexions
Changes in 2015 Group structure (1)
Deconsolidation of SNCF Infra - indirect impact 26.6
Creation of EPIC SNCF - indirect impact 6.4
Acquisition of control Eurostar - indirect impact -6.3
SN
CF
Lo
gis
tics
Geodis TFMM
Ermewa STVA
& Other
Changes in 2016 Group structure
Acquisition of control of Thalès Geodis Freight Logistics (Geodis) 2.0
Changes in 2015 Group structure (1)
Acquisition of the OHL group (Geodis) 636.7
Deconsolidation of SNCF Infra - indirect impact (All) 54.5
Creation of EPIC SNCF- indirect impact (All) 4.4
Other -0.1
Exchange rate fluctuations (All) -73.7
Keo
lis
Changes in 2016 Group structure
Acquisition of Transport Daniel Meyer 14.3
Acquisition of Ormont Transport 4.8
Acquisition of Le Cab 4.8
Other 1.5
Changes in 2015 Group structure (1) °
Acquisition of ATE group 41.1
Acquisition of Voyages Fouache 3.5
Other 3.3
Exchange rate fluctuations -18.3
Co
rpo
rate
Changes in 2015 Group structure (1)
Acquisition of Ouicar 2.0
Deconsolidation of SNCF Infra - indirect impact 62.5
Creation of EPIC SNCF - direct impact -7.7
Creation of EPIC SNCF - indirect impact 24.9
Acquisition of control of Eurostar - indirect impact -3.3
Exchange rate fluctuations 0
Total Group structure and exchange rate impacts 1,240.6
(1) Transactions carried out in 2015 having an impact on 2015/2016 revenue trends
8
1.2 2016 FIRST HALF RESULTS
1.2.1 Revenue
Consolidated revenue of the SNCF Mobilités Group amounted to €15,143 million for the period ended 30 June 2016,
for an increase of €883 million (+6.2%) compared to 2015, attributable to:
- a Group structure impact for €1,342 million (see 1.1),
- a foreign exchange impact for -€101 million (see 1.1),
- an organic decrease of -€358 million (-2.5%) for the Group; the changes for the segments were as follows:
SNCF Transilien, Régions and Intercités -€104 million -2.6%
Voyages SNCF -€168 million -5.5%
Gares & Connexions €31 million +17.4%
SNCF Logistics -€77 million -1.7%
Keolis -€19 million -0.8%
1.2.2 Gross profit
Standing at €833 million in 2016, gross profit declined by €287 million, or 25.6%, while gross profit over revenue
decreased from 7.9% to 5.5% between 2015 and 2016.
Lost gross profit attributable to the labour strikes in the first half of 2016 is estimated at €154 million.
In € millions 30/06/2016 30/06/2015 2016 vs 2015
2016 vs 2015
change
change
at constant Group structure and
exchange rates
Revenue 15,143 14,260 883 6.2% -358 -2.5%
Employee benefits expense -5,537 -5,455 -82 1.5% -31 0.6%
Purchases and external charges (excluding infrastructure fees, traction energy and fuel prices) and other income and expenses
-5,409 -4,453 -956 21.5% -12 0.3%
Infrastructure fees -2,091 -1,981 -110 5.6% 81 -4.1%
Traction energy and fuel prices
-497 -527 31 -5.8% 67 -12.6%
Taxes and duties other than income tax
-775 -723 -53 7.3% -45 6.2%
Gross profit 833 1,121 -287 -25.6% -298 -26.6%
Gross profit/revenue 5.5% 7.9%
NB: Gross profit analyses are on a constant Group structure and exchange rate basis.
The €81 million (-4.1%) decrease in infrastructure fees is due for €73 million to the impact of the labour strikes in
the first half of 2016.
Purchases of traction energy and fuel decreased by €67 million (-12.6%) under the combined impact of lower
volumes and a drop in oil and electricity prices.
The €45 million (+6.2%) increase in taxes and duties other than income tax is attributable for €26 million to the
increase in the regional solidarity tax (CST), which rose from €90 million in 2015 to €116 million in 2016.
9
1.2.3 Current operating profit
Current operating profit stood at €132 million, down by €272 million compared to 2015.
The revenue to current operating profit conversion rate thus fell from 2.8% in 2015 to 0.9% in 2016.
The decline in current operating profit follows that of gross profit, which fell by €287 million.
1.2.4 Operating profit
Operating profit declined by €484 million, standing at €235 million.
Net proceeds from asset disposals in 2016 comprise a €68 million gain generated by the Akiem Group structure
transaction (see Note 1.1 of Major events in the first half of 2016). The balance of the heading essentially comprises
real estate disposals.
The heading fair value remeasurement of the previously held interest was impacted by the loss of control in
Akiem (see Note 1.1 of Major events in the first half of 2016). In 2015, the heading had been impacted by the
acquisition of control of Eurostar International Limited.
Impairment losses in 2015 mainly comprised the impairment loss for the Gares & Connexions cash generating unit.
1.2.5 Share of net profit/(loss) of companies consolidated under the equity method
In 2015, the balance of this heading comprised for -€91 million the share of the net loss of Eurostar International
Limited (EIL) for the first 5 months of the year. This amount was impacted by EIL’s redemption of the preference
share held by the British shareholder HM Treasury prior to the acquisition of control by SNCF Mobilités.
1.2.6 Finance costs
The item declined by €82 million, primarily due to a decrease in the discount rates used for employee benefits (see
Note 1.2 to the condensed half-year consolidated financial statements).
1.2.7 Income tax expense
The item primarily comprises the tax on rail company profits (TREF) for an amount of €64 million.
1.2.8 Net profit/(loss) attributable to equity holders of the parent
As a result of all these changes, the net loss attributable to equity holders of the parent was -€25 million, compared to
a €318 million profit in 2015, after recognition of a net loss attributable to non-controlling interests (minority
interests) of -€22 million.
The €344 million decrease includes €151 million in non-recurring items mainly comprising impairment losses and
the 2015 remeasurement following the acquisition of Eurostar International Limited.
Recurring net profit decreased by -€193 million, standing at -€92 million at the end of the first half of 2016.
ROCE (calculated on current operating profit after share of net profit of companies consolidated under the equity
method) dropped from 4.9% to 1.8%.
10
2 ACTIVITIES AND RESULTS BY SEGMENT
SNCF Mobilités Group’s activity is organised according to three business units backed by support functions: SNCF
Voyageurs, SNCF Logistics and Keolis. Within these business units, SNCF Mobilités Group’s activity is broken
down into eight segments.
SNCF Voyageurs comprises the following three segments:
- SNCF Transilien-Régions-Intercités, Voyages SNCF, and Gares & Connexions.
SNCF Logistics is broken down into four segments:
- Geodis, Rail freight and multimodal transport (TFMM), Ermewa and STVA
Keolis is a segment on its own.
SNCF Infra, in charge of delegated infrastructure management activities for SNCF Réseau and engineering and fully
impacted by the law of 4 August 2014 on rail reform, exited SNCF Mobilités Group on 1 July 2015, and no longer
contributes, as of this date, to the consolidated income statement and balance sheet. As this division meets the
definition of a “discontinued operation” in accordance with the terms adopted by IFRS 5, its corresponding financial
data was reclassified under the line item “Net profit before tax of transferred operations” in the 2015 income
statement.
Further information on the SNCF Infra division is provided in Note 2.4.
SNCF MOBILITÉS
SNCF VOYAGEURS SNCF LOGISTICS KEOLIS
SNCF TRANSILIEN,
RÉGIONS AND INTERCITÉS
VOYAGES SNCF
GARES & CONNEXIONS
Geodis
Distribution & Express Contract Logistics Freight Forwarding
Road Transport Supply Chain Optimization
OHL
International UK
Northern Europe Australia
North America New
territories
Transilien
Operators TGV
idTGV - Ouigo Eurostar - Thalys Lyria - Elipsos
TGV Italia - Westbahn - Alleo Ouibus - iDvroom
Special trains
Auto-Train Luxembourg-Bâle
Management
and
development
of French train
stations
Rail freight and
multimodal
transport
Régions
France Grands réseaux Grands urbains
Territoires Ile-de-France
Intercités
AREP group
Ermewa
Distribution voyages-sncf.com
CRM Services Rail Europe
Avancial Rail Solutions
Orfea
Itiremia
Ritmx
Retail & Connexions
group
STVA
Effia Parking
B2B
Only the main subsidiaries are presented in this organisational chart and those that follow.
11
Contributions to revenue, gross profit, current operating profit, current operating profit after share of net profit of
companies consolidated under the equity method and net investments of the Group’s components break down as
follows (the financial data per segment shown in the table below and the tables on the following pages are presented
as a Group contribution).
In € millions SNCF
Voyageurs SNCF
Logistics Keolis Corporate
SNCF Mobilités
External revenue 7,502 4,936 2,526 179 15,143
Gross profit 411 214 146 61 833
Current operating profit 84 50 25 -27 132
Current operating profit after share of net profit of companies consolidated under the equity method
85 57 34 -25 150
Net investments -692 -184 -117 -80 -1,073
Unless stated otherwise, the analyses of results per segment are not restated for Group structure and foreign
exchange impacts.
SNCF Mobilités management monitors the external revenue generated by each segment (Group contribution) and not
the revenue generated between each segment. The revenue presented in the analyses by segment is therefore external
revenue.
However, the gross profit/revenue indicator presented by segment is calculated based on revenue between segments
since it is not relevant based on revenue contributed.
Revenue between segments represents the total internal and external revenue presented in Note 3.1 to the condensed
consolidated financial statements.
2.1 SNCF VOYAGEURS
In € millions
SNCF Transilien,
Régions and Intercités
Voyages SNCF
Gares & Connexions
Total SNCF Voyageurs
External revenue 3,945 3;351 206 7,502
Gross profit 187 146 78 411
Current operating profit 109 -50 25 84
Current operating profit after share of net profit of companies consolidated under the equity method
109 -48 24 85
Net investments -280 -305 -106 -692
12
2.1.1 SNCF TRANSILIEN, RÉGIONS AND INTERCITÉS
SNCF TRANSILIEN,
RÉGIONS AND
INTERCITÉS
Parent company Subsidiaries
Transilien
Orfea
Régions
Itiremia
Intercités
Ritmx
SNCF Transilien, Régions and Intercités offer local transport services, medium distance links (Intercités), rail
transport regulated services (TER, Transilien), and services covering passenger transport (Itiremia, Ritmx) and
housing for group employees (Orfea).
In € millions First half
2016 First half 2015 Change
External revenue 3,945 4,002 -57
Gross profit 187 270 -82 Gross profit / revenue at SNCF Transilien, Régions and Intercités level
4% 6.2%
Current operating profit 109 213 -105
Current operating profit after share of net profit of companies consolidated under the equity method
109 213 -105
Net investments -280 -164 -116
Highlights
Transilien
- Effective 1 January 2016, the STIF-SNCF Mobilités 2016-2019 agreement provides for the development of
the transport offering and the reinforcement of service quality.
- On 10 February, SNCF and Siemens signed a contract for the implementation of NExTEO. This is the first
major contract concluded as part of the Eole project (westward extension of the RER E). This new operating
system will boost train circulation and speed (120 km/h). Its implementation represents a genuine leap
forward for passenger travel in Ile-de-France.
- SNCF, RATP, Comutitres and the STIF have created a joint platform dedicated to a Ticketing
Modernisation Programme. The project’s goal is to jointly design the future of ticketing between the Ile-de-
France transport players including, for example, pay-per-use, post-payment or the use of a bank card as a
travel pass.
Régions
- The first half of 2016 was marked by the preliminary work to renew 5 agreements and extend 3 others, as
well as the presentation of the TER transformation plan to prepare for the future competition.
Intercités
- Intercités has boosted its commercial efforts focused on low fares to contain the competition and the decline
in traffic. It has also pursued its efforts to improve customer service with a production quality that surpasses
objectives, particularly in terms of performance.
- The fleet renovation work continued in the first half to improve passenger comfort. Certain programmes
have been finalised, including Paris-Limoges-Toulouse and Paris-Clermont Ferrand.
- A new TET (Trains d’Équilibre du Territoire) operating agreement is being negotiated.
13
2016 first-half results
o Revenue
Revenue in 2016 decreased by -€57 million (-1%) compared to 2015. Adjusted for Group structure impacts, this
decrease stood at -€104 million (-2.6%), of which -€10 million (-0.7%) for Transilien, -€49 million (-2.4%) for
Régions and -€49 million (-9.8%) for Intercités. The decline is essentially due to the 2016 strikes (-€116 million) and
for the Intercités activity, the competition from car-pooling.
o Gross profit
Gross profit for SNCF Transilien, Régions and Intercités diminished by -€82 million (-30%) between 2015 and 2016.
The change is largely the result of the strike impact.
o Current operating profit
Current operating profit declined by €105 million in line with gross profit and the negative change in the net
movement in provisions of €17 million.
o Net investments
Investments increased by €116 million, in line with the new investments in fixed installations and a deferral from
2015 to 2016 for the disbursements relating to the Régiolis and Regio2N contracts. Added to this is a decrease in
grants received for Transilien rolling stock.
2016 second-half outlook
Transilien
- In the second half of 2016, Transilien will pursue its investment programme as stipulated in the STIF
agreement, particularly in the workshops-garages.
- Despite the significant work planned for the second half, the goal will be to equal the level of punctuality
reached in 2015.
Régions
- In the second half, the first realisations of the SNCF Régions transformation plan will be seen in preparation
for the future competition.
- Negotiations with the new executive teams of the regions will begin for the renewal of five new agreements
and the extension of three others.
Intercités
- Intercités will pursue its commercial and marketing efforts to win back customers following the initiatives
undertaken in 2015.
- The first Régiolis Coradia Liner trains are expected by the end of 2016.
- The TET (Trains d’Equilibre du Territoire) operations will be clarified in conjunction with the Régions and
TGV segments, and the territories.
- On 21 July 2016, the Secretary of State for Transport announced that a new five-year agreement (2016-
2020) will be signed in the fall with SNCF Mobilités (see Note 3.1 of Subsequent events).
14
2.1.2 VOYAGES SNCF
VOYAGES SNCF
Parent company Subsidiaries
O
per
ato
rs
TGV France
Ouigo
iDTGV
Eurostar
Westbahn
Lyria
Elipsos
Thalys
Alleo
TGV Italia
TGV Europe
Auto-Train
Luxembourg-Bâle
Special trains
Ouibus iDVroom
Sa
les
voyages-sncf.com
CRM Services
Rail Europe
Avancial
Rail Solutions
Voyages SNCF offers its customers:
- door-to-door passenger transport services in France and Europe through its TGV, iDTGV, Ouigo, Eurostar,
Thalys, Lyria, Ouibus and iDVroom activities;
- travel-related products: train and airline tickets, car rental and hotel accommodation in particular.
In € millions First half
2016 First half
2015 Change
External revenue 3,351 3,109 242
Gross profit 146 265 -119
Gross profit / revenue at Voyages SNCF level 4.0% 7.8%
Current operating profit -50 76 -126
Current operating profit after share of net profit of companies consolidated under the equity method
-48 -25 -23
Net investments -305 -224 -81
Highlights
- In March, Voyages-sncf.com announced the creation of a subsidiary in China and the purchase of Rail Plus,
a rail specialist in Australia and New Zealand. The group carries out its extra-European activities under the
Rail Europe brand. Following these transactions, this region will become Rail Europe’s second largest
market after the United States.
- Thalys launched Izy, a new low-cost offering, during the first half of 2016. It has reinforced its position as
the Paris-Brussels leader and has also become the first European rail company to offer such a significant
international service at reduced fares. The purpose of the Izy low fares is to attract a leisure clientele that are
willing to go without on-board services (Wi-Fi, catering, etc.) and attach less importance to travel time.
15
2016 first-half results
- Revenue
Voyages SNCF revenue rose by €242 million (+7.8%). The increase is due to:
o a favourable Group structure impact of €419 million, which is detailed in Note 1.1 Comparability
of the financial statements,
o a negative foreign exchange impact of -€9 million.
- On a constant Group structure and exchange rate basis, Voyages SNCF revenue fell by -€168 million
(-5.5%). This decline reflects lower traffic revenue (-€137 million), of which -4% for the TGV France
activity, affected by the labour conflicts of the first half and -12% for the Europe activity, mainly penalised
by the terrorist attacks (see Note 1.2.3.3 to the condensed half-year consolidated financial statements).
- Gross profit
Gross profit decreased by -€119 million. At constant Group structure and exchange rates, the change amounted to
-€129 million, in line with the decline in revenue and the €26 million increase in the Territorial Solidarity Tax
(Contribution de Solidarité Territoriale).
- Current operating profit
Current operating profit of Voyages SNCF declined by €126 million, standing at -€50 million; the change is
essentially linked to that of Gross profit.
- Current operating profit after share of net profit of companies consolidated under the equity method
In 2015, the item had been impacted by the share of the net loss of Eurostar for-€91 million. This amount was
impacted by Eurostar’s redemption of the preference share held by the British shareholder HM Treasury prior to the
acquisition of control by SNCF Mobilités.
- Net investments
Net investments amounted to €305 million in 2016, compared to €224 million in 2015. The change is primarily due
to a Group structure impact of €99 million relating to the acquisition of control of Eurostar in 2015.
2016 second-half outlook
- Starshipper, a group of 32 independent French SMEs in the passenger transport business, will join the
Ouibus long-distance coach network via a franchise agreement. Starshipper will hold a 5% interest in
Ouibus, while SNCF will remain the majority shareholder, retaining its 95% interest.
- Ouibus will extend its offering and quadruple it beginning 25 July. It will offer 1,500 bus trips linking 120
destinations in France and Europe to better serve French travel needs.
- Voyages SNCF plans to gain market shares by accelerating the development of Ouigo, particularly for the
long-distance offering and will expand its low price policy in order to boost traffic and capture customers
for new offerings.
- Voyages SNCF hopes to reinvest in the value of high-speed travel by strengthening the fundamentals
(quality, performance and cleanliness) and by simplifying the customer experience through digital
technology.
16
2.1.3 GARES & CONNEXIONS
GARES &
CONNEXIONS
Parent company Subsidiaries
Management and
development of
French train stations
AREP group
Retail & Connexions
group
The purpose of Gares & Connexions is to introduce innovative services into stations, while inventing new areas of
mobility for towns and cities. The main subsidiaries included in this division are the AREP group (architecture and
urban planning) and the Retail & Connexions group (commercial enhancement of stations).
In € millions First half
2016 First half
2015 Change
External revenue 206 148 58
Gross profit 78 103 -25
Gross profit / revenue at Gares & Connexions level 13.3% 17.8%
Current operating profit 25 33 -8
Current operating profit after share of net profit of companies consolidated under the equity method
24 32 -8
Net investments -106 -113 7
Highlights
- Gares & Connexions is pursuing the roll-out of multimodal exchange hubs, particularly in Cannes,
Bordeaux and Versailles Chantiers. The first half was also the occasion for the delivery of the Arcachon
basin’s first renovated stations.
- The decree authorising Sunday openings for shops in twelve French stations was published in the Official
Journal in February 2016.
2016 first-half results
- Revenue
Gares & Connexions revenue rose by €58 million (+39.3%). Taking into account Group structure impacts, revenue
increased by €31 million. The change was mainly driven by higher concession revenues in the stations.
- Gross profit
Gross profit decreased by €25 million between 2015 and 2016. Most of the decline is related to the strike impact and
higher station security costs.
- Current operating profit
Current operating profit fell by €8 million. The item was impacted by lower depreciation and amortisation charges
for €22 million following the impairment losses of the Gares & Connexions assets recognised for the period ended
30 June 2015.
- Net investments
There was no material change in the Gares & Connexions investments.
2016 second-half outlook
- In the second half of 2016, Gares & Connexions will continue its discussions with stakeholders and its
revision of the pricing model so as to bring about pricing simplicity, stability and predictability, while
guaranteeing greater transparency for operators.
- Gares & Connexions will set an ambitious investment programme, focusing on multimodal exchange hubs,
and regulatory and service programmes, including accessibility and passenger information, as well as
intermodality and compliance programmes
17
- The operating teams will concentrate their efforts on cleanliness and safety in order to increase customer
satisfaction.
2.2 SNCF LOGISTICS
SNCF LOGISTICS
Divisions Parent company Subsidiaries
Geodis
Geodis
Ermewa
Ermewa group
Rail freight and multimodal
Transport (TFMM)
Fret SNCF
Naviland Cargo
Captrain VFLI
Lorry Rail
STVA
STVA
SNCF Logistics includes a full range of transport and freight logistics businesses.
First half 2016 First half 2015
Chg. In € millions Geodis TFMM Ermewa STVA Other Total
External revenue 3,844 743 184 165 0 4,936 4,389 547
Gross profit 141 -72 143 4 -2 214 246 -31 Gross profit / revenue at SNCF Logistics level
4.3% 5.4%
Current operating profit 64 -93 82 2 -4 50 92 -42
Current operating profit after share of net profit of companies consolidated under the equity method
69 -93 83 2 -4 57 93 -36
Net investments -46 -33 -103 -1 0 -184 -145 -39
Highlights
Geodis
- On 27 June, Geodis announced the signature of a framework agreement with Thalès for the management of
its freight transport and logistics in France. The agreement also covers the purchase by Geodis of all the
shares held by Thalès in TGFL (Thales Geodis Freight & Logistics).
- Geodis has extended its partnership with Air Liquide for transport operations originating from German
sites. The new 4-year contract concerns the shipping of atmospheric gas and hydrogen from the Frankfurt
and Ludwigshafen sites to industrial clients and hospitals in Northern Europe and Scandinavia.
- In April, Kaporal and Geodis signed a new 4-year contract to manage the brand’s logistics from its
warehouse in Grans (Bouches-du-Rhône).
- On 30 June 2016, Geodis entered into a 3-year partnership with Playmobil France to transport toys from the
German warehouse to resellers located in France.
18
TFMM
- The Rail Freight and Multimodal Transport division (TFMM) had several commercial successes in the first
half of 2016: new international combined transport contracts were concluded with Belgian (Inter Ferry
Boat), Spanish (Sesé) and Franco-Italian (Cemat/Novatrans) operators.
Ermewa
- On 5 February 2016, the Group sold 50% of its Akiem shares to an investor partner. The partnership
agreement grants joint rather than exclusive control to SNCF Mobilités (see Note 1.1 Major events in the
first half of 2016).
- Return to growth at Eurotainer, driven particularly by the Chinese (original equipment), Russian and South
American markets.
STVA
- The start of the year was marked by contract renewals, particularly with Porsche and Mercedes in Germany.
2016 first-half results
- Revenue
2016 revenue was up €547 million (+12.5%) compared to 2015. It was affected by:
o a Group structure impact for +€697 million, which is described Note 1.1 Comparability of the
financial statements,
o a foreign exchange impact for -€74 million.
At constant Group structure and exchange rates, revenue decreased by 1.7% (-€77 million). Excluding the impact of
the first-half strikes (-€54 million), revenue is relatively stable (-€23 million or -0.5%). The decline essentially
concerns the Geodis division (-€46 million) and specifically a decrease in Freight Fowarding, affected by the
slowdown in the industrial projects activity for the troubled oil sector and the drop in the Road Transport activity.
This fall in revenue was offset by the growth of Ermewa (+€9 million) and the substantial improvement of STVA
(+€16 million), confirming the trend turnaround observed since November 2015 for this division.
- Gross profit
Gross profit decreased by -€31 million. After taking into account Group structure and foreign exchange impacts,
gross profit fell by €65 million, of which €51 million for the Rail Freight and Multimodal Transport division
including an estimated strike impact of -€45 million.
- Current operating profit
Current operating profit declined by €42 million, following the gross profit trend. Added to this is a negative change
in the net movement in provisions (net charge of €17 million in 2016 compared to a net charge of €10 million in
2015).
- Net investments
SNCF Logistics investments rose by €39 million. The change was mainly driven by the purchases of locomotives at
Akiem and investments in flow management information systems at Geodis.
2016 second-half outlook
Geodis
- During the second half, Geodis will be informed of the result of the IBM tender. This result will impact the
SCO activity and to a lesser extent the Contract Logistics activity.
TFMM
- The multimodal transport activity is expecting the response of the French and Italian government tenders
regarding the Alpine Rail Motorway in the second half of 2016.
- The activity will develop thanks to various contract gains at Captrain Belgium and Fowardis GmbH and
new North-South corridor links for Captrain Deutschland.
STVA
- Two crucial tenders will impact STVA: Volkswagen Rail Europe and General Motors/Opel.
19
2.3 KEOLIS
KEOLIS
Effia
KEOLIS
International
KEOLIS France
UK Grands réseaux
Parking Northern Europe Grands urbains
B2B Australia Territoires
North America Ile-de-France
New territories
Keolis is a mass transit operator in fifteen countries worldwide. Its expertise covers all modes of transportation
(train, bus, car, metro, tram, ferry, bicycle), and the management of interconnection points (stations, airports) and
parking.
In € millions First half
2016 First half
2015 Change
External revenue 2,526 2,490 36
Gross profit 146 125 22
Gross profit / revenue at Keolis level 5.7% 4.9%
Current operating profit 25 11 14
Current operating profit after share of net profit of companies consolidated under the equity method
34 20 13
Net investments -117 -120 3
Highlights
- In mid-January, Keolis announced its acquisition of Transports Daniel Meyer, a major bus and coach
transport operator in Ile-de-France. With this strategic growth transaction, Keolis will extend its coverage in
Ile-de-France and bolster its positioning in future projects involving the Grand Paris Express.
- In early January 2016, EFFIA became the principal industrial shareholder of Société Anonyme d’Economie
Mixte d’Exploitation du Stationnement de la Ville de Paris (SAEMES, semi-public parking system operator
for the City of Paris), with a 33.27% stake. EFFIA, which already manages over 30,000 parking spaces in
Ile-de-France, has therefore partnered with the second largest Ile-de-France car park operator in terms of
revenue, SAEMES (€45 million in revenue – 25,000 spaces). SAEMES operates major car parks, including
the top Paris car park in terms of revenue generated, Lyon-Méditerranée, at the Gare de Lyon (Lyon
station).
- Keolis has been chosen as the future operator of the first automated metro line in Shanghai as part of the
Shenka joint venture.
2016 first-half results
- Revenue
Revenue increased by €36 million (+1.4%) compared to 2015. This trend breaks down as follows:
o a Group structure impact of €73 million, which is detailed in Note 1.1 Comparability of the
financial statements,
o a foreign exchange impact of -€18 million.
At constant Group structure and exchange rates, Keolis revenue decreased by -€19 million (-0.8%). The decrease is
at the international level and involves the Melbourne activity in particular.
- Gross profit
Gross profit for Keolis rose by €22 million. Excluding the Group structure impact, it increased by €15 million. The
rise is essentially driven by the international segment (+€12 million), with a boost in profitability for North America
(+€7 million, mainly in Boston) and a €4 million improvement in gross profit for Sweden.
20
- Current operating profit
Current operating profit for Keolis improved by €14 million, largely in line with the gross profit trend.
- Net investments
There was no material change in the Keolis investments.
2016 second-half outlook
- During the second half of 2016, Keolis will prepare decisive bids in the United Kingdom.
- It will also work to renew the Lyon, Lens and Dijon contracts and prepare for the 2017 expirations,
particularly for Lille, Rennes and Caen.
- The second half of the year will also see the start of operations for the Hyderabad subway in India.
21
2.4 SNCF INFRA
SNCF INFRA
Parent company Subsidiaries
Rail network
operation and
management
Engineering
Systra
Works and
maintenance
SFERIS
SNCF Infra included the following activities prior to its transfer to SNCF Réseau on 1 July 2015:
- delegated infrastructure management activities on behalf of SNCF Réseau (traffic management and network
maintenance);
- rail infrastructure engineering (Systra).
The SNCF Infra division was classified as a transferred operation following the enactment of law 2014-872 of 4
August 2014.
The table below presents the data contributed by SNCF Infra to SNCF Mobilités indicators prior to its
reclassification under “Net profit before tax of transferred operations” in the income statement, pursuant to the
adoption of IFRS 5. Consequently, these figures do not contribute to the Group indicators for the first half of 2015.
In € millions First half
2015
External revenue 2,786
Gross profit 63
Gross profit/ revenue at SNCF Infra level 2.1%
Current operating profit 4
Current operating profit after share of net profit of companies consolidated under the equity method
5
Net investments -65
22
3 NET INVESTMENTS AND NET DEBT
3.1 NET INVESTMENTS
In € millions 30/06/2016 30/06/2015 Change
Net investments -1,073 -977 -96 +10%
Disposals 166 111 56 +50%
Investments, net of disposals -907 -866 -40 +5%
Net investments stood at €1,073 million as at 30 June 2016, an increase of €96 million compared to 2015. The
change is explained by the investments in fixed installations at Transilien and a deferral from 2015 to 2016 of
disbursements on the Régiolis and Regio2N contracts. Added to this is a decrease in grants received for Transilien
rolling stock.
Disposals rose by €56 million compared to 2015; disposals for the first half mainly involved real estate assets.
3.2 GROUP NET DEBT
In € millions 30/06/2016 31/12/2015 Change
Non-current debt 14,634 13,876 758
Non-current receivables -4,809 -4,810 1
Net non-current debt used to calculate net debt 9,825 9,066 759
Current debt 3,161 3,837 -676
Current receivables -4,783 -5,131 348
Net current debt used to calculate net debt -1,623 -1,295 -328
Net debt 8,203 7,772 431
Gearing (Net debt / Equity) 2.0 1.7
Net debt stood at €8.2 billion as at 30 June 2016, for a gearing (Net debt / Equity) of 2.0 (1.7 as at 31 December
2015). Net debt as a percentage of gross profit, calculated over 12 sliding months, increased from 3.0 as at 31
December 2015 to 3.6 as at 30 June 2016. The gross profit of 31 December 2015 that was used for the calculation
did not include the competition fine for the Distribution and Express activity (see Note 4.3.2 to the condensed half-
year consolidated financial statements).
Net debt was impacted by the following movements in the first half of 2016:
Opening net debt 7,772
Cash from operations -485
Net investments 1,073
Disposals -166
Dividends received from companies consolidated under the equity method
-25
Net external growth -375
Change in operating WCR 270
Change in fair value, amortised cost, translation difference 171
Change in tax WCR -75
Other 43
Closing net debt 8,203
23
3.3 FINANCING SOURCES AND DEBT MANAGEMENT
Non-current debt increased by €0.8 billion, while current debt decreased by €0.7 billion.
These changes were essentially due to:
- new bond issues for +€0.6 billion;
- the change in fair value of financial liabilities for +€0.3 billion;
- the decrease in cash liabilities for -€0.3 billion;
- new loans contracted with credit institutions for -€0.3 billion.
Current receivables decreased by €0.3 billion, in line with the decrease in cash, while non-current receivables were
steady.
EPIC SNCF Mobilités is responsible for managing most of the Group’s net debt, carrying 90% of the Group’s
external debt at the period-end.
The SNCF Mobilités Group’s long-term debt was rated as follows by the main rating agencies:
3.4 GROUP EXPOSURE TO MARKET RISK
The management of market risks is governed by a general framework, approved by the SNCF Mobilités Board of
Directors, setting out the management principles for parent company risks that may be hedged by financial
instruments.
This general framework defines the principles governing the selection of financial products, counterparties and
underlyings for derivative instruments.
More specifically, the general framework defines risk limits for the management of euro and foreign currency cash
balances and long-term net indebtedness.
In addition, it describes the delegation and decision-making system as well as the reporting and control system and
its frequency (daily, twice monthly, monthly and annually).
The breakdown of the strategy implemented is described in the consolidated financial statements.
.
Long-term rating Outlook Report date
Standard & Poor's AA- Negative 9-Jan.-15
Moody's Aa3 Stable 17-May-16
Fitch Ratings AA Stable 26-Oct.-15
24
4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND RATIOS
In € millions 30/06/2016 31/12/2015(*)
Goodwill 2,359 2,347 Intangible assets 1,797 1,896 Property, plant and equipment 12,355 12,394 Non-current financial assets 6,391 6,339
Investments in companies consolidated under the equity method 637 450
Deferred tax assets 1,033 1,005 Non-current assets 24,573 24,431 Operating assets 7,402 7,386 Current financial assets 1,225 1,150 Cash and cash equivalents 3,601 4,024 Current assets 12,228 12,560 Assets classified as held for sale 69 645
TOTAL ASSETS 36,870 37,637
Share capital 4,971 4,971 Consolidated reserves -1,015 1,542 Net loss for the year -25 -2,180 Equity attributable to equity holders of the parent 3,931 4,333 Non-controlling interests (minority interests) 129 136 Total equity 4,060 4,469 Non-current employee benefits 1,633 1,476 Non-current provisions 1,266 1,104 Non-current financial liabilities 15,807 15,152 Deferred tax liabilities 481 469 Non-current liabilities 19,186 18,201 Current employee benefits 114 114 Current provisions 205 354 Operating payables 10,142 10,628 Operating liabilities 10,461 11,096 Current financial liabilities 3,161 3,837 Current liabilities 13,622 14,933 Liabilities associated with assets classified as held for sale 2 33
TOTAL LIABILITIES 36,870 37,637
Gearing (Net debt / Equity) 2.0 1.7
Net debt / Gross profit 3.6 3.0
(*)Comparative figures were restated mainly following the finalisation of the OHL purchase price
allocation (see Note 4.2.1 to the condensed half-year consolidated financial statements)
The statement of financial position recorded the following changes as at 30 June 2016:
- A -€98 million decrease in net intangible assets primarily due to:
o acquisitions, net of disposals for +€89 million;
o amortisation and impairment, net of reversals, for -€131 million;
o the impact of Eurostar translation differences, for -€69 million.
- An increase of €187 million in companies consolidated under the equity method, of which €166 million
relating to the loss of control in Akiem.
- An improvement in the working capital requirement of -€270 million.
- The headings “Assets classified as held for sale” and “Liabilities associated with assets classified as held for
sale” were impacted by the loss of control in Akiem.
25
- A decline in equity attributable to equity holders of the parent, which mainly includes the net loss for the
period (-€25 million), the negative change in fair value of cash flow hedges (-€140 million), the actuarial
gains and losses on post-employment benefit plans (-€88 million) and the negative change in translation
differences (-€136 million);
- A breakdown of financial assets and liabilities is shown in Note 5 to the condensed half-year consolidated
financial statements.
26
5 FINANCIAL RELATIONS WITH THE FRENCH STATE, SNCF RÉSEAU AND LOCAL AUTHORITIES
SNCF Mobilités receives:
- public service orders (as is the case with any public service agent or supplier to the French State and local
authorities) in a monopoly legislative and regulatory framework;
- operating and investment grants primarily received for the activities of SNCF Transilien, Régions and
Intercités.
5.1 PUBLIC SERVICE ORDERS
The table below shows the Group revenue generated with SNCF Réseau, Régions, STIF and the French State.
The revenue realised with SNCF Réseau was primarily generated by the SNCF Infra division transferred on 1 July
2015 as part of the rail reform. The revenue shown below corresponds to the revenue realised by the SNCF Infra
division in the first half of 2015 and presented under the heading “Net profit before tax of transferred operations” in
the income statement.
In € millions 30/06/2016 30/06/2015 Change
Compensation of Infrastructure Manager by SNCF Réseau 59 1,637 -1,578
including traffic and circulation management 2 459 -457
including network and asset management 58 1,178 -1,120
Work for SNCF Réseau 9 1,124 -1,115
Total SNCF Réseau 68 2,761 -2,692
Compensation for regional rates 266 268 -2
Services for the Organising Authorities 2,246 2,124 122
Total Régions and STIF 2,512 2,392 120
Socially-motivated prices 11 10 0
Defence 73 72 1
Trains d'Equilibre du Territoire (TET) 164 169 -5
Total French State 248 252 -4
TOTAL 2,828 5,404 -2,576
The services for the Organising Authorities and STIF increased by €120 million compared to 2015 following the
renegotiation of certain agreements and the offering’s development.
5.2 GRANTS AND PUBLIC CONTRIBUTIONS OBTAINED FROM THE FRENCH STATE AND GOVERNMENT AUTHORITIES
Public contributions granted to the Group by the French State and government authorities are presented in the
following table:
In € millions 30/06/2016 30/06/2015 Change
Operating grants 11 19 -8
Cash inflows from concession financial assets 395 480 -85
Investment grants relating to intangible assets and PP&E
110 134 -24
Total 516 633 -117
Payments received for concession financial assets and investment grants received:
SNCF Mobilités receives investment grants, primarily from local authorities, to finance its non-current assets,
particularly rolling stock.
27
In accordance with IFRIC 12, grants received as part of a concession are presented in the statement of financial
position as a deduction from intangible assets or financial assets, according to the applicable model, following the
analysis of each concession agreement. With regard to concession financial assets, the grants received are considered
as a means of reimbursing such assets.
In the other cases, investment grants received are deducted from intangible assets and property, plant and equipment
in the balance sheet. In the income statement, they are recorded in operating profit or loss (as a deduction from
depreciation and amortisation) according to the estimated economic life of the corresponding assets.
28
6 EMPLOYEE MATTERS
6.1 AVERAGE WORKFORCE
30/06/2016 30/06/2015 Change
Change on a constant Group
structure basis and excluding internal
transfers (1)
SNCF Transilien, Régions and Intercités 46,589 44,527 +4.6% 2,062 -0.1% -31
Voyages SNCF 23,559 23,992 -1.8% -433 -1.8% -433
Gares & Connexions 3,637 3,471 +4.8% 166 +4.8% 166
SNCF Logistics 51,493 41,983 +22.7% 9,510 -1.7% -729
Including the Geodis division 39,156 29,248 +33.9% 9,907 -1.2% -345
Keolis 55,986 56,229 -0.4% -243 -1.4% -804
Corporate 12,482 25,961 -51.9% -13,479 -44.0% -11,426
SNCF Infra 0 52,774 -100.0% -52,774 -100.0% -52,774
TOTAL 193,747 248,937 -22.2% -55,190 -26.5% -66,030
(1) Main changes in Group structure:
- Keolis: acquisition of Transport Daniel Meyer (+323), acquisition of Ormont Transport (+107),
- SNCF Logistics: acquisition of OHL (+10,167).
The main changes on a constant Group structure basis and excluding internal transfers were as follows:
- The change in the number of employees in SNCF Infra and the Corporate function stemmed from the
transfers to SNCF Réseau and EPIC SNCF as at 1 July 2015.
- The reduction in the SNCF Logistics workforce was attributable to the slowdown in activity observed for
certain business units of this segment.
- The decrease in the Keolis workforce is mainly explained by the decline in France, partially offset at the
international level.
The change in the workforce of subsidiaries in recent years mainly reflects the changes in Group structure:
1st half Fiscal Fiscal Fiscal Fiscal Fiscal
2016 2015 2014 2013 2012 2011
Parent company (1) 87,623 90,429 154,272 155,371 156,110 156,047
Subsidiaries 106,124 105,723 91,491 89,200 87,844 89,043
TOTAL 193,747 196,152 245,763 244,570 243,954 245,090
(1) including seconded employees
6.2 MAIN AGREEMENTS SIGNED IN THE FIRST HALF OF 2016
The following collective agreements were signed with representative trade union organisations:
- The agreement relating to the attribution and remuneration of economic and trade union training leave
signed on 8 March 2016.
- A collective agreement on work time organisation signed on 14 June 2016.
These two agreements are applicable within the Public Rail Group.
29
7 CHALLENGES AND OUTLOOK
Despite an uncertain economic and geopolitical environment, SNCF Mobilités is pursuing its ambitious objectives
and accelerating its efforts to reduce costs and boost productivity.
Outlook by business unit
Widespread expansion of the TGV low fare policy and the continued development of low prices and low cost
offerings to win market shares.
Continuing adaptation of the regional train offering to incorporate the various modes of transport and services in
order to boost the competitiveness of its activity.
Continuing development of Ouibus to link 120 destinations in France and Europe.
Implementation of an ambitious train station investment programme, focusing on the multimodal exchange
hubs, and regulatory and service programmes, including accessibility and passenger information, as well as
intermodality and compliance programmes.
Concerning Keolis in France, renewal of the Lyon, Lens and Dijon contracts and preparation for the 2017
expirations, particularly Lille, Rennes and Caen. At the international level, ongoing development of the bus activity
with tenders in the United States and Australia. Preparation of major tenders in the United Kingdom and start-up and
operation of the automated metro of Hyderabad (India).
With respect to freight (SNCF Logistics), proactive commercial development in a contrasted business environment
and reinforcement at the international level (Europe/Asia/US).
Financial objectives
Revenue growth will be mainly driven by the OHL acquisition, carried out at the end of 2015 by SNCF Logistics in
the US.
Pursuit of an ambitious industrial and commercial performance plan.
30
CORPORATE GOVERNANCE
1 THE BOARD OF DIRECTORS
The Board of Directors of the industrial and commercial public enterprise “SNCF Mobilités” comprises eighteen
members, including, in addition to the SNCF Executive Board Chairman:
- Four representatives of the French State appointed by decree, based on the report of the Transport Minister:
o one at the recommendation of the Transport Minister;
o one at the recommendation of the Minister for Economy and Finance;
o one at the recommendation of the Budget Minister;
o one at the recommendation of the Minister for Sustainable Development;
- Two members chosen for their expertise and appointed by decree:
o a representative of passengers;
o a representative chosen for his expertise in the protection of the environment and mobilities;
- Five prominent figures chosen by SNCF Mobilités to represent it;
- Six members, including a management representative, elected by employees of the Company and its
subsidiaries having a minimum workforce of 200 members.
A decree lays down the parent company by-laws and sets the procedures for the appointment and election of Board
members (Decree no. 2015-138 of 10 February 2015 relating to the mandates and by-laws of SNCF Mobilités).
Board members are appointed for a five-year term of office. A director may not exercise more than two consecutive
terms of office. Directors receive no compensation for their activities.
The Government Commissioner or, in his absence, the Assistant Government Commissioner, has an advisory seat on
the Board and all committees created.
The head of the Transport Economic and Finance Control Office or his representative has an advisory seat on the
Board and all committees and commissions.
The Board Secretary and the Secretary of the Joint Labour-Management Committee also have a seat on the Board.
The Board of Directors holds at least six meetings annually.
The Board of Directors has five committees:
Audit and Risk Committee, responsible for reviewing the annual and half-year financial statements, risk mapping and
the annual internal audit work programme;
Contracting Committee, consulted on projects involving government or private contracts, acquisitions, disposals,
building exchanges, based on predetermined thresholds set by the Board;
Passengers Committee, responsible for monitoring rail transport agreements between local authorities, public
institutions and SNCF Mobilités, and more generally overall passenger problems;
Transport and Logistics Committee, responsible for reviewing the activity and strategies of the SNCF Logistics
business unit;
Tenders Committee, responsible for examining the company’s responses to the various calls for tender in which it
will compete.
31
2 MANAGEMENT TEAM
The Chairman appoints the members of the Executive Committee and defines their tasks. Within their areas of
expertise, Executive Committee members are delegated powers by the Chairman enabling them to act and decide in
his name. The Executive Committee has five members (including the Chairman).
32
IFRS – In € millions
9, rue Jean-Philippe Rameau – 93212 Saint-Denis Cedex
30 June 2016
SNCF MOBILITES GROUP CONDENSED
HALF-YEAR
CONSOLIDATED FINANCIAL
STATEMENTS
33
CONTENTS
CONSOLIDATED INCOME STATEMENT ................................................................................ 34
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .......................................... 35
STATEMENT OF FINANCIAL POSITION ................................................................................. 36
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................... 38
CONSOLIDATED CASH FLOW STATEMENT ......................................................................... 39
NOTES TO THE CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS .. 40
1 ACCOUNTING STANDARDS BASE .................................................................................. 40
1.1 APPLICATION OF IFRS ............................................................................................. 40
1.2 VALUATION METHODS SPECIFIC TO INTERIM REPORTING PERIODS ............... 42
2 MAJOR EVENTS ............................................................................................................... 43
2.1 MAJOR EVENTS IN THE FIRST HALF OF 2016........................................................ 43
2.2 SUBSEQUENT EVENTS ............................................................................................ 43
3 GROSS PROFIT ................................................................................................................ 45
3.1 SEGMENT REPORTING ............................................................................................ 45
3.2 TRANSACTIONS WITH TRANSPORT ORGANISING AUTHORITIES ....................... 47
3.3 OTHER GROSS PROFIT ITEMS ................................................................................ 47
4 OPERATING ASSETS AND LIABILITIES .......................................................................... 48
4.1 PROPERTY, PLANT AND EQUIPMENT .................................................................... 48
4.2 GOODWILL, INVESTMENTS IN COMPANIES CONSOLIDATED UNDER THE
EQUITY METHOD AND CHANGES IN CONSOLIDATION SCOPE ...................................... 50
4.3 PROVISIONS FOR RISKS AND LITIGATION ............................................................ 52
5 CAPITAL AND FINANCING ............................................................................................... 56
6 OFF-BALANCE SHEET COMMITMENTS ......................................................................... 60
7 SCOPE OF CONSOLIDATION .......................................................................................... 60
34
CONSOLIDATED INCOME STATEMENT
In € millions Notes 30/06/2016 30/06/2015
Revenue 3 15,143 14,260
Purchases and external charges 3 -8,231 -7,185
Employee benefit expense -5,537 -5,455
Taxes and duties other than income tax -775 -723
Other operating income and expenses 234 223 Gross profit 3 833 1,121
Depreciation and amortisation 4.1.2 -688 -706
Net movement in provisions -13 -10 Current operating profit 132 404
Net proceeds from asset disposals 4.1.3 110 109
Fair value remeasurement of the previously held interest 26 680
Impairment losses -32 -474 Operating profit 235 719
Share of net profit/(loss) of companies consolidated under the equity method 18 -90
Operating profit after share of net profit/(loss) of companies consolidated under the equity method 254 629
Net borrowing and other costs 5 -158 -138
Net finance costs of employee benefits -49 13
Finance cost -207 -125 Net profit before tax from ordinary activities 47 504
Income tax expense -93 -174 Net profit/(loss) from ordinary activities -47 330
Net profit before tax of transferred operations (*) 0 6 Net profit/(loss) for the year -47 336
Net profit/(loss) for the year attributable to equity holders of the parent
-25 318
Net profit/(loss) for the year attributable to non-controlling interests (minority interests) -22 18
(*) The standard wording for this line item “Net profit/(loss) from discontinued operations” has been modified since it only includes the net profit of operations transferred as part of the rail reform..
The share capital comprises a contribution from the French State and not shares. Furthermore, the Group does not
fall within the scope of IAS 33 “Earnings per share”. For these two reasons, no earnings per share was calculated or
presented in the Group condensed half-year consolidated financial statements.
Notes 1 to 7 are an integral part of these condensed half-year consolidated financial statements.
35
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In € millions 30/06/2016 30/06/2015
Net profit/(loss) for the year -47 336
Other comprehensive income:
Change in foreign currency translation -207 23
Tax on change in foreign currency translation 11 -2
-195 21
Change in value of available-for-sale assets 0 -13
Tax on change in value of available-for-sale assets 0 0
0 -12
Change in fair value of cash flow hedges -150 115
Tax on change in fair value of cash flow hedges 5 -5
-145 110
Share of recyclable other comprehensive income of companies consolidated under the equity method
0 91
Total recyclable other comprehensive income -341 211
Actuarial gains and losses arising from employee defined benefit plans -107 147
Tax on actuarial gains and losses arising from defined benefit plans 4 0
-104 147
Share of non-recyclable other comprehensive income of companies consolidated under the equity method
10 3
Total non-recyclable other comprehensive income -94 150
Total comprehensive income/(loss) for the year -481 696
Total comprehensive income/(loss) attributable to equity holders of the parent
-389 664
Total comprehensive income attributable to non-controlling interests (minority interests)
-92 32
Notes 1 to 7 are an integral part of these condensed half-year consolidated financial statements.
36
STATEMENT OF FINANCIAL POSITION
CONSOLIDATED ASSETS
In € millions Notes 30/06/2016 31/12/2015(*)
Goodwill 4.2 2,359 2,347
Intangible assets 1,797 1,896
Property, plant and equipment 4.1 12,355 12,394
Non-current financial assets 5 6,391 6,339
Investments in companies consolidated under the equity method 4.2 637 450
Deferred tax assets 1,033 1,005
Non-current assets 24,573 24,431
Inventories and work-in-progress 658 621
Operating receivables 6,745 6,765
Operating assets 7,402 7,386
Current financial assets 5 1,225 1,150
Cash and cash equivalents 5 3,601 4,024
Current assets 12,228 12,560
Assets classified as held for sale 4.2.2 69 645
Total assets 36,870 37,637
(*) Mainly restated following the finalisation of the OHL purchase price allocation (see Note 4.2.1.1)
Notes 1 to 7 are an integral part of these condensed half-year consolidated financial statements.
37
CONSOLIDATED EQUITY AND LIABILITIES
In € millions Notes 30/06/2016 31/12/2015(*)
Share capital 4,971 4,971
Consolidated reserves -1,015 1,542 Net profit/(loss) for the year attributable to equity holders of the parent
-25 -2,180
Equity attributable to equity holders of the parent 3,931 4,333
Non-controlling interests (minority interests) 129 136
Total equity 4,060 4,469
Non-current employee benefits 1,633 1,476
Non-current provisions 4.3 1,266 1,104
Non-current financial liabilities 5 15,807 15,152
Deferred tax liabilities 481 469
Non-current liabilities 19,186 18,201
Current employee benefits 114 114
Current provisions 4.3 205 354
Operating liabilities 10,142 10,628
Operating liabilities 10,461 11,096
Current financial liabilities 5 3,161 3,837
Current liabilities 13,622 14,933
Liabilities associated with assets classified as held for sale
4.2 2 33
Total equity and liabilities 36,870 37,637
(*) Mainly restated following the finalisation of the OHL purchase price allocation (see Note 4.2.1.1)
Notes 1 to 7 are an integral part of these condensed half-year consolidated financial statements.
38
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
In € millions
Capital
Non-r
ecycla
ble
reserv
es
Gro
up
transla
tio
n
reserv
es
Cash f
low
hedges
Availa
ble
-for-
sale
assets
Reserv
es
befo
re t
axes
of
transfe
rred
opera
tio
ns(*
)
Reta
ined
earn
ings(*
)
Equity
att
rib
uta
ble
to
equity
hold
ers
of
the p
are
nt
Non-c
ontr
olli
ng
inte
rests
(min
ority
inte
rests
)
To
tal
equity
Equity published as at 31/12/2014 4,971 -450 4 -276 24 82 2,524 6,878 106 6,984
Net profit for the year - - - - - 1 317 319 17 336
Other comprehensive income - 148 16 104 -12 1 90 346 14 360
Total comprehensive income - 148 16 104 -12 3 407 665 32 696
Dividends paid - - - - 0 -66 3 -63 - -63
Dividends of subsidiaries - - - - 0 - 0 - -8 -8
Capital transactions - - - - - - 0 0 32 32
Changes of ownership in subsidiaries without loss of control - -4 0 0 - - -689 -692 -24 -717
Other changes - 0 0 0 -1 -14 -37 -53 5 -48
Equity published as at 30/06/2015 4,971 -306 20 -172 11 5 2,207 6,735 142 6,877
Equity published as at 31/12/2015 4,971 -320 -7 -181 3 -1 -141 4,324 136 4,460
Opening adjustments (*) - - - - - - 9 9 0 9
Equity restated as at 01/01/2016 4,971 -320 -7 -181 3 -1 -132 4,333 136 4,469
Net profit for the year - - - - - - -25 -25 -22 -47
Other comprehensive income - -88 -136 -140 0 - 1 -363 -71 -434
Total comprehensive income - -88 -136 -140 0 - -24 -389 -92 -481
Dividends of subsidiaries - - - 0 - - 0 - -40 -40
Capital transactions - - - - - - 0 0 1 1
Changes in scope, non-controlling interests and non-controlling interest purchase commitments
- 0 0 6 0 1 -19 -13 125 112
Other changes - 0 0 0 0 - -1 -1 0 -1
Equity published as at 30/06/2016 4,971 -408 -144 -314 3 0 -176 3,931 129 4,060
(*) Mainly restated following the finalisation of the OHL purchase price allocation (see Note 4.2.1.1)
Notes 1 to 7 are an integral part of these condensed half-year consolidated financial statements.
39
CONSOLIDATED CASH FLOW STATEMENT In € millions Notes 30/06/2016 30/06/2015
Net profit/(loss) for the year IS(1)
-47 336
Eliminations of: share of profit of associates IS
(1) -18 90
deferred tax expense (income) -31 -17 depreciation, amortisation, impairment losses and provisions 706 1,149 revaluation gains/losses (fair value) 14 -3 net proceeds from disposals and gains and losses on dilution -139 -799
Cash from operations after net borrowing costs and taxes 485 755
Eliminations of: current income tax expense (income) 124 189 net borrowing costs 144 145 dividend income -5 -5
Cash from operations before net borrowing costs and taxes 748 1,085
Impact of change in working capital requirement -270 241 Taxes paid (collected) -49 -304 Dividends received 30 39
Cash flow from operating activities 459 1,061
Acquisitions of subsidiaries net of cash acquired -88 -66
Disposals of subsidiaries net of cash transferred 51 0 Purchases of intangible assets and property, plant and equipment 4.1 -1,176 -1,136 Disposals of intangible assets and property, plant and equipment 166 111 New concession financial assets -391 -440 Cash inflows from concession financial assets 3.2 395 480 Purchases of financial assets -4 -4 Disposals of financial assets 47 0 Changes in loans and advances 2 11 Changes in cash assets -163 155 Investment grants received 110 134
Cash flow used in investing activities -1,052 -755
Cash from equity transactions 1 32 Issue of debt instruments 1,075 145 Repayments of borrowings net of inflows from the SNCF Réseau and Public Debt Fund (PDF) receivables
(3)
-285 -347
Net borrowing costs paid -265 -248 Dividends paid to Group shareholders Chg. in eq.
(2) 0 0
Dividends paid to minority interests Chg. in eq.(2)
-35 -7 Increase/(decrease) in cash borrowings -281 -860
Cash flow used in financing activities 5 209 -1,286
Effects of exchange rate changes -16 2 Impact of changes in fair value 0 1
Increase (decrease) in cash and cash equivalents -400 -978
Opening cash and cash equivalents 3,652 5,161 Closing cash and cash equivalents 3,252 4,183
(1) Consolidated income statement
(2) Consolidated statement of changes in equity
(3) Of which cash inflows of €130 million for the SNCF Réseau receivable (€0 million in the first half of 2015) and
€0 million for the PDF receivable (€92 million in the first half of 2015)
Notes 1 to 7 are an integral part of these condensed half-year consolidated financial statements.
40
NOTES TO THE CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS
Notes 1 to 7 are an integral part of these condensed half-year consolidated financial statements.
All amounts are in millions of euros (€ millions), unless stated otherwise. As the Group has elected not to round off
figures, there may be minimal differences.
1 ACCOUNTING STANDARDS BASE
Pursuant to Article L2141-10 of the French Transport Code of 28 October 2010 (which supersedes Article 25 of the
French Orientation Law on Domestic Transport (LOTI) of 30 December 1982), SNCF Mobilités, a state-owned
industrial and commercial institution, “is subject to the financial management and accounting rules applicable to
industrial and commercial companies”. SNCF keeps its accounting books and records in accordance with prevailing
legislation and regulations in France.
The condensed consolidated financial statements for the half-year ended 30 June 2016 were approved by the Board
of Directors on 29 July 2016.
The terms “SNCF Mobilités Group”, “Group” and “SNCF Mobilités” designate the parent company EPIC Société
Nationale des Chemins de fer Français and its consolidated subsidiaries. The State-owned institution (EPIC) or
company SNCF Mobilités, “EPIC”, “EPIC Mobilités”, “Mobilités” and “EPIC SNCF Mobilités” refer solely to the
parent company.
1.1 APPLICATION OF IFRS
The accounting policies used for the preparation of the SNCF Mobilités Group condensed consolidated financial
statements for the half-year ended 30 June 2016 are those adopted for the year ended 31 December 2015 and adapted
to new standards and interpretations approved by the European Commission and applicable or applied in advance to
financial periods beginning on or after 1 January 2016.
The consolidated financial statements for the year ended 31 December 2015 were prepared in accordance with the
IFRS (International Financial Reporting Standards), as adopted in the European Union.
The condensed consolidated financial statements for the half-year ended 30 June 2016 were prepared in accordance
with IAS 34, “Interim Financial Reporting”. Therefore, they do not include all the information and notes required by
IFRS for the preparation of the annual consolidated financial statements but only the material events for the period
and should be read in conjunction with the 2015 consolidated financial statements.
The basis of preparation for the condensed consolidated financial statements for the half-year ended 30 June 2016
detailed in the following notes is the result of:
- standards and interpretations of mandatory application for financial periods commencing on or before 1
January 2016;
- elected accounting options and exemptions applied in the preparation of the consolidated financial
statements for the half-year ended 30 June 2016. The options and exemptions are described in Note 1.1.2
and the valuation methods specific to interim reporting periods in Note 1.2.
1.1.1 Standards and interpretations not adopted in advance for the preparation of the 2016 condensed half-year consolidated financial statements
The Group has not opted for the early application of the standards and interpretations applicable to financial periods
subsequent to 30 June 2016, regardless of whether they were adopted by the European Commission.
In particular, the Group did not adopt the following standards and interpretations for its condensed consolidated
financial statements for the half-year ended 30 June 2016:
41
Standard or
interpretation
Summarised description Expected
impacts
Date of adoption
(period beginning as of)
IFRS 15
“Revenue from
contracts with
customers”
This new standard proposes a single revenue
recognition model applicable to all types of
customer contracts, regardless of the entity's
business segment. This model, which follows five
key steps, is based on the transfer of control which
may be continuous or at a given time. The notion of
the transfer of risks and rewards is no longer
predominant. Revenue is recognised on the
promised supply of goods or services for the amount
of the consideration expected in exchange.
Analysis
ongoing
IASB: 01/01/2018
EU: Not adopted
Group: awaiting
adoption
IFRS 9
“Financial
instruments”
The purpose of the revised standard is to replace the
current IAS 39 on financial instruments. The three
topics covered are the classification and
measurement of financial instruments, a
methodology for the impairment of financial assets
and hedge accounting.
Analysis
ongoing
IASB: 01/01/2018
EU: Not adopted
Group: awaiting
adoption
IFRS 16
“Leases”
This new standard covers the recognition of leases
and will replace the current IAS 17. It establishes
principles for the recognition by lessees of all leases
with a term of 12 months or more as finance leases
by offsetting a non-current asset (right-of-use asset)
against a lease liability. Accounting by lessors
remains similar to that set forth in IAS 17.
Analysis
ongoing
IASB: 01/01/2019 with
possible early adoption
as of 01/01/2018
EU: Not adopted
Group: awaiting
adoption
Amendments to
IAS 7
“Disclosure
Initiative”
This amendment provides for additional disclosures
on changes in liabilities arising from financing
activities as well as for changes in the financial
assets covering these financial liabilities. The entity
shall state for each change in liabilities the nature of
the flows associated with the outflow of resources
so as to enable a reconciliation between the
statement of financial position and the cash flow
statement.
Analysis
ongoing
IASB: 01/01/2017
EU: Not adopted
Group: awaiting
adoption
1.1.2 Description of the accounting options adopted
The accounting options adopted are described in the corresponding notes to the 2015 consolidated financial
statements. They apply in exactly the same manner to the condensed consolidated financial statements for the half-
year ended 30 June 2016, with the exception of the tax on rail company profits (TREF) which is subject to valuation
methods specific to interim reporting periods for income taxes as described in Note 1.2.
42
1.2 VALUATION METHODS SPECIFIC TO INTERIM REPORTING PERIODS
1.2.1 Employee benefits
The net provision relating to employee benefits is updated based on the most recent valuations available on the
closing date of the previous period. With EPIC SNCF Mobilités being the main group contributor, the actuarial
assumptions relating to its obligations were reviewed in full. Following this review, EPIC SNCF Mobilités’
obligations were increased by €127 million over the first half of 2016, primarily due to the decrease in the discount
rate from 1.75% as at 31 December 2015 to 1.05% as at 30 June 2016. The actuarial loss of €119 million arising
from this change in rate was allocated as follows: a financial expense of €32 million was recognised under “Finance
costs of employee benefits” with regard to long-term benefits and a negative impact of €87 million was recorded in
non-recyclable reserves under equity with regard to post-employment benefits.
1.2.2 Income tax expense
Income tax expense for the half-year is calculated by applying to the pre-tax profit or loss of consolidated companies
the best known estimate for the effective tax rate of the period for each tax group entity.
1.2.3 Impairment losses
1.2.3.1 General principles
The Group performs impairment tests in interim reporting periods only if indications of loss or reversal are identified
during the period.
1.2.3.2 Contextual factors
At the end of December 2015, SNCF Mobilités management reviewed several defining economic and financial
assumptions for the preparation of its financial trajectory and impairment tests included in the strategic plan
approved by the SNCF Mobilités Board of Directors on 10 March 2016. This review was carried out in a context of
risks and uncertainties surrounding some of these assumptions, considering the changing environment that made it
difficult to assess the resulting new challenges with a high sensitivity of recoverable amounts to the assumptions
adopted. Therefore, impairment losses were recognised for the TGV and Gares & Connexions CGUs for €2,238
million and €450 million, respectively. Detailed information is provided in Notes 2.1.2, 4.3.2.1, 4.3.2.2 and 4.3.2.3 to
the 2015 consolidated financial statements, with Note 4.3.2.2 specifying that the values may vary significantly over
time.
1.2.3.3 Indications identified during the period
In the first half of 2016, the TGV, Eurostar and Thalys CGUs posted revenue and gross profit setbacks in relation to
the budget, primarily due to the terrorist attacks and strikes.
At this stage, the Group considers that the aforementioned impacts do not call into question the financial trajectory in
the strategic plan approved by the Board of Directors on 10 March 2016 for the TGV, Eurostar and Thalys CGUs.
These impacts are therefore deemed to be cyclical and do not represent indications of impairment within the meaning
of IAS 36 “Impairment of assets”.
The possible changes in the business and pricing model of the Gares & Connexions CGU are still being discussed
with the various stakeholders. As part of a public consultation launched in May 2016, the management of Gares &
Connexions proposed new changes to its business and pricing model which were not known at the time of the
preparation of the 2016 – 2025 strategic plan and the implementation of the impairment test in 2015. If incorporated,
these changes could result in a structural enhancement of the Gares & Connexions medium-term economic
performance.
Furthermore, in July 2016, ARAFER published a thematic study on the management of passenger rail stations in
France in which it formulated a certain number of recommendations. In particular, these recommendations covered
the positioning of the station manager in view of the introduction of competition in the passenger rail transport
sector. The study is in no way an indication of the Government’s future direction for 2016, as stipulated in the law of
4 August 2014 covering rail reform.
To date, the Group considers that its target vision of the new pricing model drafted in its 2016-2025 strategic plan
has not been called into question. As the new aforementioned measures are still in draft form (ongoing consultation
that will continue into the second half of 2016), they cannot be considered as indications of impairment at this stage.
No indications of impairment were identified for the Group’s other CGUs.
43
2 MAJOR EVENTS
2.1 MAJOR EVENTS IN THE FIRST HALF OF 2016
2.1.1 Loss of control in Akiem
To encourage the development of the locomotive leasing activity conducted by its wholly owned subsidiary Akiem,
the Group sold 50% of its shares to an investor partner on 5 February 2016. The partnership agreement grants joint
control rather than exclusive control to SNCF Mobilités. The transaction’s effective date is 30 June 2016, contingent
to the fulfilment of conditions precedent, and specifically the opinion of the Competition Authority. Akiem has been
equity-accounted as of this date. As at 31 December 2015, and pursuant to IFRS 5 “Non-current assets held for sale
and discontinued operations,” the assets and liabilities of this company are presented under “Assets classified as held
for sale” and “Liabilities associated with assets classified as held for sale” in the statement of financial position.
Detailed information is presented in Note 4.2 to the condensed half-year consolidated financial statements.
2.1.2 Labour movement
A portion of the EPIC SNCF Mobilités employees conducted a strike in the first half as part of the renegotiation of
the labour agreement following the set-up of a branch agreement and a core decree by the French State applicable to
all rail players. Although there was a significant mobilisation to limit customer impacts, the conflict had
consequences for nearly all the Group businesses. Specifically, there were revenue losses and additional costs for
customer compensation.
2.1.3 Consequences of inclement weather and terrorist attacks
The unusual bad weather at the end of the first half of 2016, largely in the north of France, significantly disrupted the
passenger and freight traffic of SNCF Mobilités Group and reduced revenue.
The terrorist attacks in 2015 and the first half of 2016 resulted in revenue and gross profit setbacks in relation to the
budget for the TGV, Eurostar and Thalys CGUs. At this stage, the Group views these setbacks as cyclical (see Note
1.2.2.3 to the condensed half-year consolidated financial statements).
2.1.4 Exit of the United Kingdom from the European Union (BREXIT)
In a referendum held on 23 June 2016, the United Kingdom voted in favour of leaving the European Union
(“Brexit”). In the UK, the Group transports passengers (mainly through Eurostar and joint ventures within Keolis)
and freight (through the Geodis and STVA subsidiaries in particular). In the first half of 2016, the UK subsidiaries
contributed €699 million to Group revenue, of which €508 million for Eurostar. As at 30 June 2016, the joint
ventures within Keolis represent an equity-accounted value of €29 million in the consolidated statement of financial
position.
It is presently too early to determine whether the decision expressed by the British people will have financial and/or
business consequences for the Group.
2.2 SUBSEQUENT EVENTS
The main subsequent events are as follows:
2.2.1 Intercités
Following the roadmap presented on 7 July 2015, the French Secretary of State for Transport announced the
following measures on 19 February 2016 as part of an update:
- The renewal of rolling stock for Trains d’Équilibre du Territoire (TET), including an investment in
backbone lines of around €1.5 billion by 2025.
- The discontinuation of funding for 6 out of 8 night lines (the Paris-Briançon, and Paris-Rodez / Latour de
Carol night lines will be maintained), and a forthcoming call for expressions of interest to assess all the
proposals likely to be drawn up for these 6 lines, including the management of operations by another
authority.
- The continuation of discussions with the Régions, to develop the current TET offering, based on the
recommendations of the Duron commission.
44
The Secretary of State for Transport specified that these decisions will be made by the French State as and when
agreements are entered into with the Régions on the day lines, and according to the outcome of the call for
expressions of interest regarding the night lines.
On 21 July 2016, the Secretary of State for Transport announced that, in the absence of buyers, the 6 night lines will
gradually close on 1 October 2016, and 1 July and 1 October 2017. It also announced the signing of a new five-year
(2016-2020) agreement with SNCF Mobilités this fall, which should provide better passenger service and a return to
business equilibrium for SNCF Mobilités. The Secretary of State further confirmed the financing of significant
investments and continuing cooperation with the regions regarding certain lines.
At this stage, there has been no change since the balance sheet date that would significantly challenge the Group’s
assessment of the €106 million provision for onerous contracts recognised as at 31 December 2015 in respect of the
of the first year (2016) of the future agreement. This provision has been reversed in the amount of the losses
recognised in the first half (see Note 4.3 to the condensed half-year consolidated financial statements).
2.2.2 Appeal to the Conseil d’Etat for the calculation of the old age contribution rate
On 12 July 2016, the Conseil d’État annulled the interministerial decree of 27 July 2015 that determined the
components of the definitive T1 for 2014 and the provisional T1 for 2015. As this favourable decision was handed
down following the closing of the condensed half-year consolidated financial statements, no income was recorded
for the period ended 30 June 2016. The Conseil d’État decision on the definitive 2015 T1 rate should be known by
September 2016. Detailed information is provided in Note 4.3.2.1 to the condensed half-year consolidated financial
statements.
2.2.3 ARAFER study on rail station management
In July 2016, the French Rail and Road Regulatory Body (ARAFER) published a thematic study on the management
of passenger rail stations in France in which it formulated a certain number of recommendations. In particular, these
recommendations covered the positioning of the station manager in view of the introduction of competition in the
passenger rail transport sector. The study is in no way an indication of the Government’s future direction for 2016, as
stipulated in the law of 4 August 2014 covering rail reform. Additional information is provided in Note 1.2.3.3 to the
condensed half-year consolidated financial statements.
2.2.4 Additional transfers under the rail reform
Following approval by a ministerial decree of 28 June 2016 and a favourable opinion from the ARAFER on 25 May
2016, the remaining asset transfers to SNCF Réseau stipulated under the rail reform law of 4 August 2014 will be
carried out on 1 July 2016. This will give rise to a €68 million decrease in assets held for sale in the second half of
2016 (see Note 4.2.2 to the condensed half-year consolidated financial statements).
45
3 GROSS PROFIT
3.1 SEGMENT REPORTING
Segment reporting was adapted for SNCF Logistics to reflect the more precise breakdown that is now regularly
transmitted to the Executive Committee for analysis, i.e.:
Geodis: a European operator with a worldwide scope which proposes management solutions covering all or
part of the logistics chain (Supply Chain Optimization, Freight Forwarding – air and sea, Contract Logistics,
Distribution & Express, Road Transport).
Rail freight and multimodal transport: activities of rail transport operators, combined transport operators
and freight forwarders carried out by several companies (Fret SNCF, VIIA, Naviland Cargo and Forwardis).
Ermewa Group: long-term management and leasing of rail transportation equipment (specialised wagons,
tank containers, locomotives, mainline locomotives or shunters).
STVA: multimodal logistics for new and used finished vehicles.
Furthermore, net indebtedness is no longer included in the segment indicators as it is no longer monitored for each
sector.
Comparative information has therefore been restated.
SNCF Infra, in charge of delegated infrastructure management activities for SNCF Réseau and engineering and fully
impacted by the rail reform law of 4 August 2014, was removed from SNCF Mobilités Group on 1 July 2015, and no
longer contributed to the consolidated income statement and balance sheet as of that date. As this segment satisfies
the definition of a “discontinued operation” in accordance with the terms adopted by IFRS 5, its corresponding
financial data was reclassified to “Net profit before tax of transferred operations” in the income statement for the first
half of 2015. Over the period, revenue generated by SNCF Infra with the Group’s other segments amounted to €151
million.
30/06/2016
In € millions
External revenue
Internal revenue Revenue Gross profit Net investments
SNCF Transilien, Régions and Intercités 3,945 264 4,209 187 -280
Voyages SNCF 3,351 318 3,669 146 -305
Gares & Connexions 206 381 587 78 -106
Intra-segment eliminations 0 -823 -823 0 0
SNCF Voyageurs 7,502 140 7,642 411 -692
Geodis 3,844 33 3,877 141 -46
Rail freight and multimodal transport 743 41 784 -72 -33
Ermewa Group 184 70 255 143 -103
STVA 165 0 165 4 -1
Other 0 1 1 -2 0
Intra-segment eliminations 0 -95 -95 0 0
SNCF Logistics 4,936 51 4,987 214 -184
Keolis 2,526 47 2,573 146 -117
Corporate 179 931 1,109 61 -80
Inter-segment 0 -1,169 -1,169 0 0
Total 15,143 0 15,143 833 -1,073
46
30/06/2015
In € millions
External revenue
Internal revenue Revenue Gross profit
Net investments (1)
SNCF Transilien, Régions and Intercités 4,002 335 4,337 270 -164
Voyages SNCF 3,109 308 3,417 265 -224
Gares & Connexions 148 433 580 103 -113
Intra-segment eliminations 0 -836 -836 0 0
SNCF Voyageurs 7,259 240 7,499 638 -502
Geodis 3,305 64 3,369 125 -29
Rail freight and multimodal transport 765 80 844 -21 -31
Ermewa Group 171 74 246 146 -79
STVA 149 0 149 1 -3
Other 0 0 0 -6 -3
Intra-segment eliminations 0 -98 -98 0 0
SNCF Logistics 4,389 120 4,510 246 -145
Keolis 2,490 42 2,532 125 -120
Corporate 121 1,606 1,727 112 -145
Inter segment 0 -2,008 -2,008 0 0
Total 14,260 0 14,260 1,121 -977
(1) including the net investments of SNCF Infra (€65 million in the first half of 2015)
47
3.2 TRANSACTIONS WITH TRANSPORT ORGANISING AUTHORITIES
Transactions with transport organising authorities had the following impacts on the Group’s condensed half-year
consolidated financial statements:
In € millions 30/06/2016 30/06/2015 Change
Services with the OA (Régions and STIF) 2,227 2,111 116
Services with the French state as OA of the Trains d’Equilibre du Territoire
147 152 -5
Interest income arising from concession financial assets 36 30 6
Impacts on revenue 2,410 2,293 117
Cash inflows from concession financial assets 395 480 -85
Investment grants relating to intangible assets and PP&E
110 134 -24
Impacts on cash flow used in investing activities 505 614 -109
In € millions 30/06/2016 31/12/2015 Change
Concession intangible assets 55 48 7
Concession non-current financial assets 1,371 1,279 92
Impacts on non-current assets 1,426 1,328 99
3.3 OTHER GROSS PROFIT ITEMS
Purchases, sub-contracting and other external charges break down as follows:
In € millions 30/06/2016 30/06/2015 Change
Sub-contracting -2,775 -2,655 -120
Infrastructure fees payable to SNCF Réseau -1,816 -1,857 41
Eurotunnel and other infrastructure fees -275 -124 -151
Purchases and external charges -2,868 -2,022 -846
Traction energy and fuel -497 -527 31
Purchases and external charges -8,231 -7,185 -1,046
48
4 OPERATING ASSETS AND LIABILITIES
4.1 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment break down as follows by category:
30/06/2016 31/12/2015
In € millions Gross Depreciation/ impairment
Net Gross Depreciation/ impairment
Net
Land and buildings 11,434 -5,926 5,508 11,313 -5,765 5,548
Industrial and technical plant and other assets (ITP)
3,765 -2,470 1,295 3,770 -2,433 1,337
Transportation equipment
32,513 -23,159 9,353 32,303 -22,913 9,390
Property, plant and equipment in progress
924 -19 906 824 -60 764
TOTAL excluding grants
48,636 -31,574 17,062 48,209 -31,170 17,040
Investment grants -8,915 4,208 -4,707 -8,685 4,040 -4,645
TOTAL 39,720 -27,365 12,355 39,524 -27,130 12,394
Movements in property, plant and equipment, after investment grants, break down as follows:
In € millions
Land
an
d
build
ings
ITP
Tra
nsport
ation
equ
ipm
ent
Pro
pert
y,
pla
nt
and e
qu
ipm
ent
in p
rogre
ss
Investm
en
t
gra
nts
To
tal n
et
of
gra
nts
Net carrying amount as at 31/12/2015 5,548 1,337 9,390 764 -4,645 12,394
Acquisitions 11 39 526 334 -232 677
Disposals -9 -7 -11 0 0 -27
Depreciation, net of grants released -170 -117 -506 0 176 -616
Impairment losses -3 0 -28 0 0 -31
Change in consolidation scope 1 3 35 0 -5 34
Exchange differences -4 -3 -107 0 0 -113
Other changes 134 43 53 -192 -1 37
Net carrying amount as at 30/06/2016 5,508 1,295 9,353 906 -4,707 12,355
49
4.1.1 Investments
Capital expenditure flows break down as follows: 30/06/2016 30/06/2015
Intangible assets -89 -78
Property, plant and equipment -909 -950
Total acquisitions -999 -1,029
incl. non-current assets held under finance leases -11 -15
Acquisitions excluding finance leasing -988 -1,014
Investment working capital -188 -122
Intangible assets and PP&E capital expenditure flows -1,176 -1,136
Capital expenditure for the period primarily comprised:
- Software developed in-house, either already brought into service or still under development, of which €34
million for EPIC SNCF Mobilités,
- Acquisitions and upgrades to stations and buildings totalling €282 million (including the creation of the
Tangentielle Légère Nord (TLN) line, creation or adaptation of maintenance workshops for Régiolis trains,
modernisation of Paris Montparnasse station, extension of the EOLE West line, upgrades to the multimodal
exchange hubs of Grenoble, Rennes and Lorient, upgrade to the Versailles station),
- Acquisition and renovation of rail and road equipment totalling €526 million (including the acquisition of
TGV Duplex and Eurostar trains, wagons, transcontainers, rail freight locomotives and containers,
renovation of TGVs and electrical railcars).
Asset-financing grants received totalled €232 million, including €148 million for rail equipment and €84 million for
fixed installations.
4.1.2 Depreciation and amortisation
Depreciation and amortisation break down as follows:
In € millions 30/06/2016 30/06/2015 Change
Amortisation of intangible assets -129 -107 -22
Depreciation of property, plant and equipment -793 -837 44
Grants released to profit or loss 176 185 -8
Reversal of liabilities relating to concession assets excluded from the scope of IFRIC 12 58 53 5
Depreciation and amortisation -688 -706 18
4.1.3 Net proceeds from asset disposals
Asset disposals had the following impacts on profit or loss:
In € millions 30/06/2016 30/06/2015 Change
Disposal of intangible assets 11 0 11
Disposal of property, plant and equipment 68 101 -33
Disposal of financial assets 31 8 23
Net proceeds from asset disposals 110 109 1
As at 30 June 2016, net proceeds from the disposal of assets primarily concerned the Akiem transaction (see Note
4.2.1.2) and the sales of various complexes and properties by:
- EPIC SNCF Mobilités for €49 million;
- ICF-NOVEDIS for €17 million.
50
4.2 GOODWILL, INVESTMENTS IN COMPANIES CONSOLIDATED UNDER THE EQUITY METHOD AND CHANGES IN CONSOLIDATION SCOPE
4.2.1 Business combinations and goodwill
4.2.1.1 Update of the OHL (Ozburn-Hessey Logistics) purchase price allocation
On 2 November 2015, and via its wholly owned subsidiary Geodis, SNCF Logistics acquired OHL, which has been
fully consolidated since that date, in order to strengthen its US presence.
As at 31 December 2015, the provisional goodwill recognised totalled €671 million. In accordance with IFRS 3
“Business Combinations”, the comparative fiscal year was restated for the update of the purchase price allocation in
the first half of 2016. The new fair values identified for the acquired assets and liabilities are as follows:
In € millions
Provisional values recognised on the acquisition date
Intangible assets 179
Property, plant and equipment 47
Non-current financial assets 12
Investments in companies consolidated under the equity method 1
Deferred tax assets 38
Non-current assets 276
Inventories and work-in-progress 1
Operating receivables 179
Cash and cash equivalents 86
Current assets 267
Total assets 543
Non-current provisions 15
Non-current financial liabilities 243
Non-current liabilities 257
Operating payables 201
Current liabilities 201
Total liabilities 458
Net assets at 100% 85
100% share of fair value of net assets acquired 85
Goodwill 474
Cost of the business combination 559
Compared to the published 2015 fiscal year, the update had the following impacts:
- goodwill was reduced from €671 million to €474 million;
- additional intangible assets were recognised for €164 million (customer relations and technology);
- additional deferred tax assets were recognised for €44 million;
- additional non-current provisions were recognised for €11 million.
The update had no impact on:
- the brand identified for OHL in the amount of €15 million ($17 million) and then derecognised, as Geodis
decided to discontinue it as part of its single brand policy;
- the line item “Acquisitions of subsidiaries net of cash acquired” in the consolidated cash flow statement.
51
The purchase cost allocation, the period for which runs until November 2016, remains provisional. The goodwill was
allocated to the Geodis CGU.
4.2.1.2 Loss of control in Akiem
To encourage the development of Akiem, 50% of the investment was transferred to a new investor partner. The
company, which was initially fully consolidated, was equity-accounted as of 30 June 2016, the date on which
exclusive control was reduced to a joint control and Akiem became a joint venture. Pursuant to IAS 28 “Investments
in associates” and IFRS 10 “Consolidated financial statements”, the transaction breaks down into two movements in
the condensed half-year consolidated financial statements: the loss of control in the fully consolidated entity and the
entry of a new equity-accounted entity, whose capitalised goodwill is calculated in accordance with IFRS 3
“Business combinations.” The assets and liabilities acquired and the equity accounting value break down as follows:
In € millions
Provisional values recognised on the equity
accounting date
Non-current assets 568
Other current assets 32
Cash and cash equivalents 28
Current assets 60
Total assets 629
Non-current liabilities 412
Current liabilities 33
Total liabilities 445
Net assets at 100% 184
50% share of fair value of net assets acquired 92
Goodwill 74
Cost of the business combination 166
The cost of the business combination comprises the fair value of the previously held share.
The transaction breaks down as follows:
- a disposal gain of €94 million (of which €68 million under “Net proceeds from asset disposals” and €26
million under “Fair value remeasurement of the previously held interest” for the retained share);
- a €444 million decline in net indebtedness;
- net cash inflow net of the cash transferred with the subsidiary of €47 million;
- a €166 million increase in investments in companies consolidated under the equity method;
- goodwill of €74 million included in investments in companies consolidated under the equity method;
- impacts on off-balance sheet commitments (see Note 6).
The recognition of the transaction remains provisional. The purchase price allocation period runs until 30 June 2017.
52
4.2.2 Assets and liabilities classified as held for sale
In € millions 30/06/2016 31/12/2015
Assets classified as held for sale 69 645 Liabilities associated with assets classified as held for sale 2 33
Net impact on balance sheet 67 612
The activity of Akiem (leasing of locomotives) belonging to the Rail Freight Fleet Management CGU was classified
as a group of assets held for sale as at 31 December 2015. The loss of control took place on 30 June 2016 (see Note
4.2.1.2). The main assets and liability categories reclassified under IFRS 5 were as follows as at 31 December 2015:
In € millions 31/12/2015
Goodwill 50
Intangible assets and property, plant and equipment 499
Deferred tax assets 7
Operating receivables 11
Cash and cash equivalents 2
Assets classified as held for sale 568
In € millions 31/12/2015
Provisions 1
Financial liabilities 3
Operating payables 25
Liabilities associated with assets classified as held for sale 29
4.3 PROVISIONS FOR RISKS AND LITIGATION
Movements in provisions for liabilities and charges during the half-year break down as follows:
In € millions 01/01/2016 Charges Reversals
(used) Reversals (not used)
Other changes 30/06/2016
of which current
of which non-
current
Litigation and contractual risks 383 (*) 11 -36 -27 1 331 79 251
Tax, employee and customs risks 156 14 -6 0 0 164 12 152
Environmental risks 664 34 -16 -1 82 763 7 756
Restructuring costs 32 4 -8 -1 -1 26 23 3
Other 223 17 -23 -29 0 187 84 103
Total provisions 1,457 80 -89 -59 81 1,471 205 1,266
(*) Published amount restated following the finalisation of the OHL purchase price allocation (see Note 4.2.1.1)
The impact of the passage of time (reverse discounting) gave rise to a €8 million increase in provisions, offset
against financial profit for the first half of 2016.
The decline in the discount rate, which mainly covers provisions for asbestos costs, gave rise in the first half of 2016
to a €104 million provision increase, including €22 million offset against “Net movement in provisions” under
current operating profit and €82 million (in the “Other changes” column) against the dismantling component relating
53
to capitalized rolling stock (see 4.1). Regarding the provision for the dismantling of rolling stock, the rate decrease
was due to:
- A remeasurement of the duration, resulting in a €45 million provision increase, including €8 million offset
against current operating profit and €36 million offset against the component in assets.
- A change in the benchmark rate, resulting in a €53 million provision increase, including €7 million offset
against current operating profit and €46 million offset against the component in assets.
4.3.1 Provisions for environmental risks
At the period-end, environmental risks that had been provided for primarily concerned the following items:
- site decontamination: €16 million (€16 million in 2015).
- asbestos-related costs: €735 million (€634 million in 2015).
4.3.2 Provisions for contractual litigation and risks
The provision for contractual litigation and risks mainly includes risks associated with legal disputes and contract
settlements in addition to contractual risks.
4.3.2.1 Litigation
Resolved litigation
No major litigation was resolved in the first half of 2016.
Ongoing litigation
- Investigation of the Competition Authority regarding Fret SNCF
An investigation was conducted by the Competition Authority regarding Fret SNCF. In March 2012, the reporting
judges transmitted a final report to the Competition Authority with a certain number of grievances, all of which were
challenged by SNCF Mobilités (formerly SNCF) due to their unfounded nature and the lack of competition law
infringement. Following the Competition Authority’s decision (December 2012), EPIC SNCF Mobilités was ordered
to pay a fine of €61 million for having conducted several practices that hindered or delayed the entry of new
operators into the rail freight transport market. This fine was expensed in 2012 under “Purchases and external
charges” within gross profit. The Authority also issued a judicial order regarding SNCF Fret’s pricing policy and
imposed that certain measures, particularly of an accounting and commercial nature, be implemented and in effect at
the end of a three-year period in order to render such policy more objective. In January 2013, SNCF Mobilités
appealed this decision before the Paris Appeal Court, which rendered its decision on 6 November 2014, judging that
the grievance concerning predatory pricing was unsubstantiated and the order to pay was no longer justified. It also
reduced the financial penalty that SNCF Mobilités was ordered to pay to €48 million. ECR and the Competition
Authority appealed in December 2014. Proceedings continued in 2015, with further pleadings by ECR and the
Competition Authority, and SNCF Mobilités’ observations in reply (also applicable for the appeal). The court
hearing was adjourned to 11 October 2016.
- Investigation of the Competition Authority regarding Distribution and Express
The Competition Authority is currently investigating the Distribution and Express segment with regard to an alleged
agreement on pricing adjustments for the 2005/2010 period. A notice of grievances was officially received in July
2014. After observations of the parties, the Competition Authority’s investigation department issued a report on 22
April 2015, largely dismissing the arguments presented by the various stakeholders. Geodis and SNCF Mobilités put
forward their observations in reply. The Competition Authority’s board hearing was held on 30 September 2015.
The Competition Authority rendered its decision on 15 December 2015, imposing a fine of €196 million on Geodis,
a Group subsidiary. SNCF Mobilités is jointly and severally liable for the fine’s payment in the amount of €89
million. SNCF Mobilités and Geodis appealed the decision of the Competition Authority before the Paris Court of
Appeal. The accrued expense of €196 million recognised as at 31 December 2015 was fully paid in April 2016. The
appeal proceedings are still ongoing, with a hearing scheduled for March 2017.
- Disputes with ARAFER
Several proceedings are currently ongoing with ARAFER.
EPIC SNCF Mobilités is involved in legal proceedings with ARAFER regarding a litigation with Syndicat des
Transports d’Ile-de-France and with the Pays de-la-Loire region. ARAFER rendered two dispute settlement
54
decisions that were favourable for STIF and the Pays-de-la-Loire region. Gares & Connexions appealed these
decisions before the Paris Court of Appeal.
The Aquitaine region also entered into legal proceedings with ARAFER in connection with a dispute relating to the
station access fees for 2014 and 2015. Furthermore, SNCF Mobilités (Gares & Connexions) filed an appeal before
the Conseil d’Etat regarding ARAFER’s non-approval of station access fees for 2016 and 2017. The ruling on the
2016 fees should be handed down in September 2016.
- Ruling of the Paris Industrial Tribunal
The Paris Industrial Tribunal handed down its decisions on 21 September 2015 with respect to the appeals filed by
former employees. SNCF Mobilités accounted for the consequences in its 2015 condensed half-year consolidated
financial statements by readjusting the provision related to this litigation based on the penalties handed down. An
appeal was filed, thus suspending payment of the sums claimed. Furthermore, an additional provision was gradually
set aside for new appeals filed with the Paris Industrial Tribunal.
- Brétigny-sur-Orge accident
Following the derailment on 12 July 2013 of Paris-Limoges intercity train no. 3657 in Brétigny-sur-Orge (Essonne)
station, and after having filed the two expert reports requested by the investigating judges, RFF and SNCF, which
became SNCF Réseau and SNCF Mobilités, respectively, on 1 January 2015, were indicted for “involuntary
manslaughter and unintentional injuries through carelessness, recklessness, inattention, negligence, or failure to
observe an obligation of due care or precaution” and heard by the judges.
SNCF Réseau and SNCF Mobilités firmly challenged the expert reports, cast doubt on the seriousness of the
metallurgical evaluation, and requested that additional work be carried out for which the approval was notified at the
end of January 2016.
As this additional work had still not provided any response to the outstanding issues, SNCF Mobilités requested an
additional expert assessment on 29 February 2016. The investigating judges ruled that the conditions for opening an
investigation were not satisfied. This ruling was subject to an appeal that will be examined by the investigating
chamber in the coming months.
Since the accident, SNCF Mobilités has set up a dedicated team to assist the victims and their families. Under the
aegis of the coordination authority designated by the Ministry of Transport, EPIC SNCF Mobilités immediately
committed to a compensation programme for the accident’s human and material consequences. The liability insurer
has now assumed responsibility for the compensation since the date the deductible (€3 million) was exceeded.
As a precautionary measure, on 8 October 2013, SNCF Mobilités and SNCF Réseau launched the Vigirail
programme, designed to improve switching safety and upgrade track maintenance. This programme includes actions
that meet the recommendations issued by the BEA-TT in its progress report of 10 January 2014. Following the
conclusions of the final report made public by the BEA-TT on 18 September 2015, SNCF Mobilités has pledged to
implement three new recommendations.
- Appeal to the Conseil d’Etat for the calculation of the old age contribution rate
Having identified a problem in the calculation method for the T1 old age contribution rate used to finance the special
retirement plan, SNCF Mobilités requested an amendment from the relevant ministries. In the absence of any
response, the company brought the case before the Conseil d’État, which rejected in January 2015 the appeals
covering the 2011 and 2012 rates, considering that the cases put forward were not sufficiently justified. On 20 May
2016, considering it to be vitiated by an error of law pursuant to the decree of 28 June 2007, the Conseil d’État
cancelled the interministerial decree of 16 July 2014 that determined the definitive T1 components for 2013 and the
provisional T1 components for 2014 and thus validated the approach put forward by the company. The cancellation
of this ruling required the final T1 2013 rate to be recalculated and a new publication to be featured in the Journal
Officiel.
With respect to T1 2013 rate, accrued income of €29 million was therefore recognised under “Other operating
income and expenses” in the income statement, the expected gain being acquired both in principle and amount at the
period-end.
With respect to the T1 2014 and 2015 rates, the company also filed an appeal before the Conseil d’État. On 12 July
2016, the latter cancelled the interministerial decree of 27 July 2015 that determined the definitive T1 components
for 2014 and the provisional T1 components for 2015. As this favourable decision was handed down following the
closing of the condensed half-year consolidated financial statements, no income was recorded for the period ended
30 June 2016. The Conseil d’État’s decision on the definitive T1 2015 rate should be known by September 2016.
55
4.3.2.2 Provisions for onerous contracts
The Intercités Trains d’Equilibre du Territoire agreement, initially concluded with the French State for the 2011-
2013 period, was renewed for two successive years up to 31 December 2015. The roadmap presented by the
government on 7 July 2015 regarding a new future for the Trains d’Equilibre du Territoire, stipulated that a new
agreement between the French State and SNCF Mobilités would be completed in 2016 for the 2016-2020 period.
Pending the finalisation of the ongoing negotiations between SNCF Mobilités and the French State, covering in
particular the level of offerings and the funding of the future agreement over its term, the French State asked SNCF
Mobilités to maintain its 2016 Intercités offerings at the 2015 level, without additional funding.
In this context, SNCF Mobilités believed that the operational growth levers that would impact 2016 could no longer
be implemented. Therefore, due to the lack of development of the offering and additional funding from the French
State, the first year of the new multi-year agreement (the French State’s objective for the 2016-2020 period) should
be loss–making. For subsequent years (2017-2020), discussions are continuing with the French State so that the
agreement will break even over its residual term.
Accordingly, SNCF Mobilités recorded a €106 million provision for onerous contracts as at 31 December 2015,
representing the estimated first-year loss of the future agreement. Given the ongoing negotiations, there are risks and
uncertainties for the assumptions underlying the provision’s estimate, specifically in terms of the period planned for
the new agreement and the prospects of a financial break-even beyond the first year.
At this stage, there has been no change since the balance sheet date that would significantly challenge the Group’s
assessment of the €106 million provision for onerous contracts recognised as at 31 December 2015 in respect of the
of the first year (2016) of the future agreement (see Note 2.2). This provision has been reversed in the amount of €34
million for the losses recognised in the first half of the year.
56
5 CAPITAL AND FINANCING
Net borrowing costs break down as follows:
In € millions 30/06/2016 30/06/2015 Change
Net changes in fair value and hedges -5 4 -9
Net interest expense -140 -142 3
Other interest expense and income -14 0 -14
Net borrowing and other costs -158 -138 -20
In € millions 30/06/2016 30/06/2015 Change
Interest expense -415 -492 77
Interest income 257 354 -98
Net borrowing and other costs -158 -138 -20
The fair values given for classes not recognized at fair value in the balance sheet were determined according to Level
2.
57
30/06/2016 Financial instruments Total Fair value
Balance sheet heading and classes of financial instruments In € millions N
on
- C
urr
en
t
Cu
rren
t
Net
ind
eb
ted
ne
ss
At fa
ir
valu
e
thro
ugh
equity
Loans,
receiv
able
s,
debt
at
am
ort
ised c
ost
At fa
ir v
alu
e
thro
ugh p
rofit or
loss
Qualif
ied
for
hedgin
g
Net
carr
yin
g
am
ount
of th
e
cla
ss o
n t
he
bala
nce s
heet
Level 1
Level 2
Level 3
Fa
ir v
alu
e
of
the
cla
ss
SNCF Réseau receivable 676 54 730 - 730 - - 730 - - - + 1,123
SNCF receivable 449 100 549 - 549 - - 549 - - - + 614
Public Debt Fund receivable 1,509 73 1,582 - 1,582 - - 1,582 - - - + 2,140
Cash collateral assets - 754 754 - 754 - - 754 - - - + 754
Other loans and receivables 478 100 578 - 578 - - 578 - - - +
Concession financial assets 1,371 43 - 1,414 - - 1,414 - - - +
Sub-total loans and receivables 4,483 1,124 4,193 - 5,607 - - 5,607 - - - + 4,632
Pension assets 11 +
Available-for-sale assets 200 - 200 - - - 200 0 - 200 + 200
Positive fair value of hedging derivatives 649 62 711 - - - 711 711 - 711 - + 711
Positive fair value of trading derivatives 1,048 38 1,086 - - 1,086 - 1,086 - 1,086 - + 1,086
Cash and cash equivalents - 3,601 3,601 - - 3,601 - 3,601 3,201 400 0 + 3,601
Total current and non-current financial assets 6,391 4,826 9,592 200 5,607 4,688 711 11,206 3,202 2,198 200 + 10,232
Bonds 10,549 923 11,471 - 11,259 212 - 11,471 - 212 - + 14,393
Bank borrowings 1,742 98 1,840 - 1,840 - - 1,840 0 - 0 + 1,899
Finance-lease borrowings 802 241 1,043 - 1,043 - - 1,043 0 - - + 1,000
Sub-total borrowings 13,093 1,262 14,355 - 14,142 212 - 14,355 0 212 0 + 17,292
- measured at amortised cost 11,509 1,062 12,571 - 12,571 - - 12,571 - - + 15,508
- recognised using fair value hedge accounting 1,377 194 1,571 - 1,571 - - 1,571 - - - + 1,571
- designated at fair value * 206 6 212 - - 212 - 212 0 212 0 + 212
Negative fair value of hedging derivatives 679 52 731 - - - 731 731 0 731 - + 731
Negative fair value of trading derivatives 863 32 895 - - 895 - 895 - 895 - + 895
Loans and borrowings 14,634 1,346 15,981 - 14,142 1,107 731 15,981 0 1,838 0 + 18,918
Cash borrowings and overdrafts - 1,815 1,815 - 1,815 - - 1,815 - - - + 1,812
Amounts payable on non-controlling interest purchase commitments 1,173 - 1,173 - - - 1,173 - 1,173 - + 1,173
Total current and non-current financial liabilities 15,807 3,161 17,795 1,173 15,957 1,107 731 18,968 0 3,011 0 + 21,902
Group net indebtedness 9,825 -1,623 8,203 - 11,764 -3,580 20 8,203 -3,201 -360 0 + 10,698
* The nominal amount of liabilities designated under the fair value option was €161 million.
58
31/12/2015 Financial instruments Total Fair value
Balance sheet heading and classes of financial instruments In € millions N
on
-
Cu
rren
t
Cu
rren
t
Net
ind
eb
ted
ne
ss
At fa
ir
valu
e
thro
ugh
equity
Loans,
receiv
able
s,
debt
at
am
ort
ised c
ost
At fa
ir v
alu
e
thro
ugh p
rofit or
loss
Qualif
ied
for
hedgin
g
Net
carr
yin
g
am
ount
of th
e
cla
ss o
n t
he
bala
nce s
heet
Level 1
Level 2
Level 3
Fa
ir v
alu
e
of
the
cla
ss
SNCF Réseau receivable 676 184 859 - 859 - - 859 - - - 1,243
SNCF receivable 487 55 542 - 542 - - 542 - - - 604
Public Debt Fund receivable 1,515 42 1,556 - 1,556 - - 1,556 - - - 2,091
Cash collateral assets - 592 592 - 592 - - 592 - - - 592
Other loans and receivables 533 49 581 - 581 - - 581 - - -
Concession financial assets 1,279 43 - 1,322 - - 1,322 - - -
Sub-total loans and receivables 4,489 963 4,130 - 5,452 - - 5,452 - - - 4,529
Pension assets 11
Available-for-sale assets 239 - 239 - - - 239 40 - 199 239
Positive fair value of hedging derivatives 697 64 761 - - - 761 761 - 761 - 761
Positive fair value of trading derivatives 904 122 1,026 - - 1,026 - 1,026 - 1,026 - 1,026
Cash and cash equivalents - 4,024 4,024 - - 4,024 - 4,024 3,624 400 - 4,024
Total current and non-current financial assets 6,339 5,174 9,942 239 5,452 5,050 761 11,503 3,664 2,187 199 10,580
Bonds 10,083 940 11,023 - 10,830 194 - 11,023 - 192 - 13,523
Bank borrowings 1,742 336 2,078 - 2,078 - - 2,078 0 - 1 2,141
Finance-lease borrowings 817 283 1,100 - 1,100 - - 1,100 0 1 - 1,061
Sub-total borrowings 12,642 1,559 14,201 - 14,007 194 - 14,201 0 193 1 16,725
- measured at amortised cost 11,593 1,441 13,034 - 13,034 - - 13,034 - - 15,559
- recognised using fair value hedge accounting 858 116 973 - 973 - - 973 - - - 973
- designated at fair value * 191 3 194 - - 194 - 194 0 193 - 193
Negative fair value of hedging derivatives 545 63 608 - - - 608 608 - 608 - 608
Negative fair value of trading derivatives 689 86 775 - - 775 - 775 - 775 - 775
Loans and borrowings 13,876 1,707 15,584 - 14,007 969 608 15,584 0 1,576 1 18,108
Cash borrowings and overdrafts - 2,130 2,130 - 2,130 - - 2,130 0 - - 2,134
Amounts payable on non-controlling interest purchase commitments 1,276 - 1,276 - - - 1,276 - 1,276 - 1,276
Total current and non-current financial liabilities 15,152 3,837 17,713 1,276 16,137 969 608 18,989 0 2,852 1 21,518
Group net indebtedness 9,066 -1,295 7,772 - 12,006 -4,081 -153 7,771 -3,624 -611 1 9,901
* The nominal amount of liabilities designated under the fair value option was €148 million.
60
6 OFF-BALANCE SHEET COMMITMENTS
The main changes in commitments given over the half-year were as follows:
- Commitments for the purchase of assets other than rail equipment declined by €137 million primarily due
to the progress achieved in the projects realised under the forecast investment plan for Transilien.
- Purchase commitments with rail equipment suppliers decreased following the investments in Regio2N and
Régiolis trains for €138 million and the down payments for Eurostar and TGV2N2 trains in the amount of
€291 million.
- Security interest commitments increased due to the change in the Eurostar bank guarantee for the payment
of new trains in the amount of €380 million.
- For commitments given, the loss of control in Akiem (see Note 2.1) generated increases with respect to
equipment operating leases in the amount of €140 million and Akiem pledged securities held by Ermewa
in the amount of €95 million among security interests, and a decrease with respect to rolling stock
purchases in the amount of €30 million.
The main changes in commitments received over the half-year were as follows:
- Investment funding receivable from the Régions for the operation of rolling stock declined by €168
million. The decrease was primarily attributable to the decline in compensation guarantees in line with the
investments made in the first half of the year.
- Investment funding receivable from the Régions for the operation of fixed assets other than rolling stock
increased by €270 million in line with the Transilien network 2016/2019 four-year investment plan.
- The withdrawal from Akiem (see Note 2.1) generated a €230 million decrease in equipment operating
leases and a €72 decline in personal collateral.
7 SCOPE OF CONSOLIDATION
The main changes in the scope of consolidation over the period related to the loss of control in Akiem (see
Note 4.2).
PricewaterhouseCoopers Audit ERNST & YOUNG Audit
SNCF Mobilités
For the six months ended 30 June 2016
Statutory Auditors’ review report
on the 2016 interim financial information
SNCF Mobilités 1
PricewaterhouseCoopers Audit
63, rue de Villiers
92208 Neuilly-sur-Seine Cedex
Statutory Auditor
Member of the Compagnie
régionale de Versailles.
ERNST & YOUNG Audit
1/2, place des Saisons
92400 Courbevoie – Paris-La Défense 1
French S.A.S. with variable capital
Statutory Auditor
Member of the Compagnie
régionale de Versailles
Statutory Auditors' review report on
the 2016 interim financial information
For the six months ended 30 June 2016
This is a free translation into English of the Statutory Auditors’ review report issued in French and is provided
solely for the convenience of English speaking readers. This report should be read in conjunction with, and
construed in accordance with, French law and professional auditing standards applicable in France.
SNCF Mobilités
In compliance with the assignment entrusted to us by the French Minister for the Economy, Industry and Digital Affairs on 18 April
2014 and in accordance with the requirements of Article L. 451-1-2 III of the French Monetary and Financial Code (Code
monétaire et financier), we hereby report to you on:
the review of the accompanying condensed interim consolidated financial statements of SNCF Mobilités for the six months
ended 30 June 2016;
the verification of the information contained in the interim management report.
These condensed interim consolidated financial statements are the responsibility of the Board of Directors. Our role is to express
a conclusion on these financial statements based on our review.
1. Conclusion on the financial statements
We conducted our review in accordance with professional standards applicable in France. A review of interim financial
information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with
professional standards applicable in France and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim
consolidated financial statements have not been prepared, in all material respects, in accordance with IAS 34 – "Interim
Financial Reporting", as adopted by the European Union.
SNCF Mobilités 2
Without qualifying our conclusion, we draw your attention to:
Notes 1.2.3.2 and 1.2.3.3 to the condensed interim consolidated financial statements, which outline the context as well as
the risks and uncertainties surrounding certain economic and financial assumptions used by SNCF Mobilités at 31 December
2015 to determine the recoverable amount of the assets of its TGV France and Europe, and Gares & Connexions cash
generating units. Given that these assumptions remain uncertain at 30 June 2016 in light of the context described in Note
1.2.3.3 to the condensed interim consolidated financial statements and the sensitivity of the recoverable amounts is very
high, the estimated value of these assets, and consequently that of the deferred tax assets, could vary significantly over time.
Notes 2.2.1 and 4.3.2.2 to the condensed interim consolidated financial statements, which describe the context within which
SNCF Mobilités recognised a provision for onerous contracts at 31 December 2015 in respect of the future Intercités
contract. The recognition of this provision and its amount, updated at 30 June 2016, are based on a certain number of
assumptions which, as described in the notes to the financial statements, are also subject to risks and uncertainties.
2. Specific verification
We have also verified the information given in the interim management report on the condensed interim consolidated financial
statements subject to our review.
We have no matters to report as to its fair presentation and its consistency with the condensed interim consolidated financial
statements.
Neuilly-sur-Seine and Paris La Défense, 29 July 2016
The Statutory Auditors
PricewaterhouseCoopers Audit ERNST & YOUNG Audit
Laurent Daniel Pierre Marty Christine Vitrac Denis Thibon