GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT Contents
Management Report 3 1.1 Management report from the Chairwoman of the Board of Directors on the consolidated and annual financial statements for the year ended 31 December 2020 4
Consolidated financial statements 31 December 2020 11 2.1 Key figures for the Group 12 2.2 Consolidated financial statements 13 2.3 Notes to the consolidated financial statements 18 2.4 statutory auditors’ report on the consolidated financial statements 70
Annual financial statements 73 3.1 Financial statements at 31 December 2020 74 3.2 Appendix 78 3.3 Statutory auditors’ report on the annual financial statements 92
GROUPE KEOLIS S.A.S. Société par Actions Simplifiée au capital de € 237 888 901,80 Siège social : 20-22 rue Le Peletier, 75009 Paris 494 321 276 RCS PARIS ______Assemblée Générale Ordinaire Annuelle du 5 mai 2021 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT
300AOM countries16 68,500employees partners
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 1 2 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com 1 MANAGEMENT REPORT
1.1 MANAGEMENT REPORT FROM THE CHAIRWOMAN OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED AND ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 4
1.1.1ACTIVITY 4 1.1.3 FORESEEABLE TRENDS AND FUTURE 1.1.1.1Business activity and development 4 PROSPECTS 9 1.1.1.2Acquisitions and investments 5 1.1.4 SIGNIFICANT EVENTS SINCE THE END OF THE FINANCIAL YEAR 9 1.1.1.3The Company’s financial position 5 1.1.1.4Main risks and uncertainties 5 1.1.5CORPORATE GOVERNANCE 9 1.1.1.5The Group’s financial results 5 1.1.5.1 Members of the Supervisory Board 9 1.1.5.2 Internal Committees of the Supervisory 1.1.2 COMMENTS ON THE FINANCIAL Board 9 STATEMENTS AND RESULTS 6 1.1.5.3 Board of Directors and Chair 1.1.2.1Consolidated financial statements 6 of the Company 9 1.1.2.2Annual financial statements 6 1.1.5.4Capital and shareholding structure 9 1.1.2.3Subsidiaries and investments 6 1.1.6 PRESENTATION OF THE RESOLUTIONS 1.1.2.4 Notification of major holdings SUBMITTED and takeovers 6 TO THE SHAREHOLDERS’ VOTE 10 1.1.2.5Research and development activities 7 1.1.6.1Proposed allocation of profit 10 1.1.2.6 Information on supplier and customer 1.1.6.2 Agreements covered by Article L. 227-10 payment settlement 8 of the French Commercial Code 10 1.1.2.7Information on secondary establishments 8 Appendix 10 1.1.2.8 Information on loans granted to other companies (Article L. 511-6 3 bis of the French Monetary and Financial Code) 8
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 3 Management Report 1 1.1 Management report from the Chairwoman of the Board of Directors
Ladies and Gentlemen, In accordance with legal, regulatory and statutory requirements, we Your statutory auditors will also read their reports to you. submit for your approval the consolidated and annual financial This report reviews the various items of information as required by statements for the financial year ended 31 December 2020 and applicable regulations and information on corporate governance. report to you on the activities of our Company and its subsidiaries during the year. 1.1 MANAGEMENT REPORT FROM THE CHAIRWOMAN OF THE BOARD OF DIRECTORS ON THE CONSOLIDATED AND ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
ACTIVITY
1.1.1.1 Business activity and development International As in France, the COVID-19 crisis had a severe impact on France international operations, notably on contracts exposed to The Group has renewed and won numerous contracts in urban revenue risk. The agreements negotiated with the public activities (Dreux, Tarbes-Lourdes, Blois, Châtellerault) and transport authorities and the implementation of action and interurban activities (Hérault, Bas-Rhin, Moselle, Oise, Gard, restructuring plans have nevertheless made it possible to Pas-de-Calais, etc.), representing a total annual revenue of significantly limit the adverse impacts. €170 million. Keolis managed to obtain contract extensions for a total of The year in 2020 was heavily impacted by the COVID-19 €700 million in annual revenue: Washington (Virginia Rail) and epidemic, which directly affected all mobility-related businesses Boston (KCS) rail contracts, a bus contract in Sweden, and DLR and required permanent responsiveness to adapt the transport automatic metro and LSER rail network franchise in the United offer, in terms of level and operating mode, working with the Kingdom. organising authorities. After winning several contracts, Keolis was able to strengthen its Income in France fell sharply across all activities, particularly for international position, in particular in Australia after winning the activities not conducted under an agreement with the public Adelaide contract (rail: €85 million in annual revenue), in transport authorities (tourism, occasional transport, airport Denmark (e.g.: winning bus contract for Greater Copenhagen) services, etc.). and in the United States (notably in Virginia and California). Significant contractual negotiations have been conducted and The Government of Wales decided to take over the operations of are continuing with the public transport authorities to mitigate the Transport for Wales network (initial contract signed in 2018 the impact of this unpredictable external event, notably on trafic for a period of 15 years, revenue of €362 million in 2020) from revenue. 7 February 2021. At the same time, a technical assistance partnership with KeolisAmey was signed to support Transport Very significant savings plans were also made. for Wales in the development of its mobility offers. Lastly, Keolis demonstrated its desire to strengthen its expertise EFFIA in low-carbon and electric mobility by deploying a fleet of 246 The health crisis is having a strong impact on EFFIA’s parking fully electric buses in the Netherlands and a fleet of 138 fully activity, with almost no hourly attendance during the spring carbon-free buses in Norway. Keolis now operates the largest lockdown, followed by a moderate recovery before a relapse fleet of electric buses in Europe. during the second lockdown. The decline in TGV use by business customers has had a significant impact on station parking revenue. New Mobilities In 2020, Keolis’ desire to innovate was also expressed in terms Mitigation measures were sought in savings plans and in of autonomous mobility. The Group has reached a new negotiations with the delegating authorities to reduce the fixed milestone with the launch of our first shuttle without an operator portion of traffic fees. on board, in Châteauroux, at the National Shooting Sports The acquisition of MyPark at the end of 2019 produced its Centre. full-year effect in 2020.
4 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Management Report 1.1 Management report from the Chairwoman of the Board of Directors
1.1.1.2 Acquisitions and investments Continuity risks take the form of sudden and serious events The Group has not made any significant acquisitions or investments which affect business continuity and potentially harm the image since 1 January 2020. and credibility of the Group. This could be the case, for example, with a major passenger accident, a terrorist attack or a widespread data breach. 1.1.1.3 The Company’s financial position Performance risks are a threat to the Company’s results. They At 31 December 2020, the Group had net financial debt of arise from operational management issues, such as not winning €1,034 million, chiefly made up of a €900 million syndicated loan key contracts abroad, a lack of necessary expertise in the facility maturing in 2025 of which €600 million had been drawn, complexity of railway operations, difficulties in recruiting for jobs together with other external financing facilities arranged in France in production and non-compliance with regulatory requirements and other countries with maturity dates running until 2032. such as the prevention of bribery and corruption. To manage liquidity risk, the Group has available confirmed credit Transformational risks threaten the future of the Company and lines for an amount of €650 million as at 31 December 2020 as necessitate deep and rapid corrective action. This type of risk well as bank overdrafts, short-term financing lines and daily liquid can be illustrated by poor use of data, the arrival of new market investments. players with a disruptive model or delays in adopting an energy The Group manages its counterparty risk by only borrowing from transition. 1 banks falling within the “Authorised” bank category. This category is The year in 2020 was marked by multiple crisis, whether of a health, defined according the banks’ ratings and their level of participation economic or even climate-related nature. towards the financing of the Group. In particular, the COVID-19 pandemic had a sudden, and possibly As a result of its operational, financial and investment activities, the lasting, impact on the lives of almost all the inhabitants of our Group is exposed to the following financial market risks: planet. In addition, climate change and attacks by cyber-terrorists interest rate risk; are an increasingly significant part of our daily lives. foreign exchange risk; commodities risk. 1.1.1.5 The Group’s financial results The COVID-19 pandemic had a significant impact on the mobility To manage this exposure, the Group uses standard, liquid and business lines in the majority of countries where Keolis is present, market-available derivative financial instruments: as a result of lockdown or travel restriction measures, with sharp forward and futures sales and purchases; reductions in terms of passenger ridership and supply of travel services. swaps; call options; Revenues put options in combination with call options to provide symmetric Against this backdrop, the Group’s recurring revenue for 2020 or asymmetric collars or caps spreads. amounted to €6,087.8 million, down -€491.5 million, i.e. -7.5% The Group’s interest rate risk exposure results from its financial compared to 2019. debt, part of which is subject to variable interest rates. It is therefore The foreign exchange effect was -€35.0 million, in particular, on the exposed to rate rises. The objective of risk management is to Australian dollar, the US dollar and the pound sterling. protect the Group’s net financial income from an increase in interest rates, while taking advantage of any decrease in rates to the The technical effect was negative, amounting to -€3.5 million, and greatest possible extent. corresponded to the impacts of IFRIC 12. The Group also makes investments in foreign entities. To cover the The scope effect was positive, amounting to +€74.7 million, of foreign exchange risk engendered by these investments, the Group which +€65.3 million in France (full-year effect of the acquisition of uses derivative financial instruments to maintain a reference CarPostal) and +€9.4 million at EFFIA (full-year effect of My Park exchange rate defined for the year. acquisition). The Group is exposed to the risk of the fluctuation of the price of The portfolio effect of won/lost contracts amounted to diesel. This risk is partially hedged in the concession contracts -€102.2 million, of which mainly -€52.9 million in France (losses in signed with public transport authorities. For the remaining exposure, Angers of -€33.6 million and Brest of -€25.4 million) and the Group implements a hedging policy using derivative financial -€49.7 million internationally with, notably, the discontinuation of the instruments whose objective is to minimise the volatility of Group KTA taxi business in the United States (-€29.6 million) and the end income. of the LV Microtransit and Concord contracts, in Australia (-€15.9 million; loss of contracts in South Australia). 1.1.1.4 Main risks and uncertainties Existing contracts were down -€425.2 million, heavily impacted by the COVID-19 health crisis, of which -€295.8 million in France The Group conducts its business in a constantly-evolving economic, (mainly in the regions: -€130.2 million; Major City Networks: competitive and technical environment. Identifying and anticipating -€73.0 million; Île-de-France: -€50.3 million; City Networks: risks and finding ways of controlling them lie at the heart of its -€34.3 million) and -€58.6 million internationally (mainly in Belgium: concerns. -€41.1 million) and -€56.6 million at EFFIA. The Group’s geographical footprint, its status as a market leader Organic change in revenue including portfolio change amounted to and key player in different modes of transport, and the nature of the -€527.4 million, or -8.0%. passenger transportation business all entail both intrinsic and external risks for the Group.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 5 Management Report 1 1.1 Management report from the Chairwoman of the Board of Directors
EBIT K Net income (Group share) The violent impact of the COVID-19 health crisis was partly offset Recurring operating profit amounted to -€23.5 million, down by coordinated and proactive action, in particular through general -113.5% compared to 2019. savings plans, the mobilisation of public aid mechanisms and Net income (Group share) amounted to -€464.4 million, against contractual renegotiations. Consolidated recurring EBIT K -€71.9 million in 2019. The transition between recurring operating amounted to -€43.0 million, down -€191.7 million, or -128.9% profit and net income (Group share) is due, on the one hand, to compared to 2019. non-recurring items representing -€362.9 million, mainly including The currency effect was slightly favourable, amounting to the provisions for onerous contracts in Germany for -€108.3 million +€0.8 million, mainly due to the Swedish krona. and the Netherlands for -€12.6 million, the exit costs of Wales & The technical effect was favourable, amounting to +€5.5 million, Borders for -€25.7 million, the impairment of intangible assets for and related to the IFRS 16 restatement mainly in Sweden -€134.5 million (mainly related to: the discontinuation of the Wales (+€3.1 million) and in Germany (+€2.2 million). & Borders contract; the revision of the trajectories of certain countries under the effect of COVID-19, which led to the The scope effect improved recurring EBIT K by +€1.3 million, and impairment of goodwill in Canada for -€16.9 million and the related to the full-year effect of the MyPark acquisition at EFFIA. impairment of intangible assets in Belgium for -€9.9 million), the The portfolio effect of won/lost contracts amounted to costs of restructuring the airport activity in Île-de-France for -€8.5 million, of which -€5.2 million internationally (including -€37.2 million and lastly the amortisation of contractual rights for -€1.6 million in Norway due to the costs of starting the Bergen Bus -€25.9 million. operations, and KTA in the United States, -€2.0 million) and On the other hand, net financial income also had an impact on -€3.2 million in France (including -€3.3 million for City Networks). income, in the amount of -€86.5 million, and the tax expense, in the Existing contracts were heavily impacted by the COVID-19, and amount of -€17.5 million. Associates contributed €11.2 million to were down -€190.8 million, of which -€74.5 million in France income for the year. (mainly -€37.6 million for Major City Networks, -€15.8 million for City Networks, -€10.6 million in the French Regions), -€37.3 million Net debt for EFFIA, and -€78.1 million internationally. There were contrasting Free Cash Flow in 2020 amounted to €96 million. Excluding results by region regarding international operations (significant acquisitions, it amounted to +€92.9 million, i.e. an improvement of impact of the COVID-19 on areas exposed to revenue risk including €82.6 million compared to 31/12/2019, mainly due to a Australia, -€27.1 million, notably with Yarra Trams, and the UK, +€230.5 million change in WCR, a €35 million saving on capex -€30.4 million, with Wales & Borders) and in terms of the which offset the fall in operating profit. importance of occasional and tourism activities (notably in Belgium for -€21.0 million), while there were operational difficulties in Net debt amounted to €1,034.4 million at the end of 2020 Germany, -€17.3 million, partially offset by the good performance of compared with €1,120.8 million at the end of 2019. The decrease Sweden (+€15.5 million, driven by volumes and productivity) and is explained by the change in Free Cash Flow. North America (+€9.2 million; favourable extension of the KCS contract).
1.1.2 COMMENTS ON THE FINANCIAL STATEMENTS AND RESULTS
1.1.2.1 Consolidated financial statements After posting exceptional income of -€130 thousand and a The consolidated financial statements are prepared in accordance corporate income tax profit of €17,263 thousand related to gains with IFRS as adopted by the European Union. arising from tax consolidation, the annual financial statements of GROUPE KEOLIS S.A.S. show a loss of €29,797 thousand. Revenues from ordinary activities amount to €6,110.8 million. After taking into account all operating costs, operating profit after 1.1.2.3 Subsidiaries and investments income from investments under the equity method amounts to The table attached to the balance sheet provides all the necessary -€375.2 million. information concerning the Company’s subsidiaries and Net income (Group share) amounts to a loss of €464.4 million for investments. the financial year ended 31 December 2020. 1.1.2.4 Notification of major holdings 1.1.2.2 Annual financial statements and takeovers The operating income amounts to -€6,969 thousand. Net financial During the financial year 2020, the Company GROUPE KEOLIS income amounts to -€40,221 thousand. S.A.S. did not acquire or take control of any companies.
6 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Management Report 1.1 Management report from the Chairwoman of the Board of Directors
During the same period, Keolis S.A., a subsidiary of GROUPE KEOLIS S.A.S., acquired or formed the following companies:
Acquisition of companies in France/Shareholding investments Name Date Percentage Cykleo 30/11/2020 100% (reclassification of shares held by EFFIA S.A.S)
Establishment of companies in France Name Date Percentage KLP 50 18/12/2020 100% KLP 51 18/12/2020 100% KLP 52 18/12/2020 100% 1 KLP 53 18/12/2020 100% KLP 54 18/12/2020 100% KLP 55 18/12/2020 100% KLP 56 18/12/2020 100% KLP 57 18/12/2020 100% KLP 58 18/12/2020 100% KLP 59 18/12/2020 100%
Establishment of companies internationally Name Date Percentage Keolis Downer South Australia Pty Ltd 15/09/20 51% Keolis Downer Adelaide Pty Ltd 15/09/20 51% KA Wales Consulting Limited 17/12/20 64% TfW Innovation Services Limited 17/12/20 31%
Over the same period, EFFIA S.A.S and Keomotion did not acquire, take control or formed any company.
1.1.2.5 Research and development activities The Company has no research and development activities.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 7 Management Report 1 1.1 Management report from the Chairwoman of the Board of Directors
1.1.2.6 Information on supplier and customer payment settlement In accordance with articles L. 441-6-1 and D. 441-4 of the French Commercial Code, there follows an analysis by due date of the year-end balance of amounts owed to suppliers and by customers:
Invoices received and not paid at year end Total 0 days 1 -30 31 61 91 days (1 day (€ thousand) (indicative) days -60 days -90 days and more and more)
(A) Overdue payment brackets Number of invoices 1 _ Total value of invoices (incl.VAT) 47 _ _ _ _ _ Percentage of total value of purchases (excl. VAT) for the year 0.6% _ _ _ _ _ Percentage of total revenue (excl. VAT) for the year
(B) Invoices not included in (A) relating to disputed or non-accounted liabilities Number of invoices not included Value of invoices not included (excl. VAT)
(C) Reference payment due date used (contractual or legal) Due date used to calculate overdue payments þ Contractual due date Legal due date
Invoices issued but not paid at year end Total 0 days 1 -30 31 61 91 days (1 day (€ thousand) (indicative) days -60 days -90 days and more and more)
(A) Overdue payment brackets Number of invoices 4 22 Total value of invoices (excl. VAT) 403 326 29 12 432 799 Percentage of total value of purchases (excl. VAT) for the year Percentage of total revenue (excl. VAT) for the year 3.82% 3.09% 0.28% 0.11% 4.09% 7.58%
(B) Invoices not included in (A) relating to disputed or non-accounted receivables Number of invoices not included Value of invoices not included (excl. VAT)
(C) Reference payment due date used (contractual or legal) Due date used to calculate overdue payments þ Contractual due date Legal due date
1.1.2.7 Information on secondary 1.1.2.8 Information on loans granted to other establishments companies (Article L. 511-6 3 bis of the In accordance with the requirements of Article L. 232-1 II of the French Monetary and Financial Code) French Commercial Code, we can confirm that the Company does Article L. 511-6 of the French Monetary and Financial Code not have any secondary establishments. requires the disclosure of any loans granted to economically-related companies under the meaning of Article R. 511-2-1-1 of the Monetary and Financial Code. We specify that Company has not granted any loan entering within the scope of the provisions of Article L. 511-6 3 bis of the French Monetary and Financial Code.
8 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Management Report 1.1 Management report from the Chairwoman of the Board of Directors
1.1.3 FORESEEABLE TRENDS 1.1.5 CORPORATE GOVERNANCE AND FUTURE PROSPECTS
The year in 2021 will be marked by considerable uncertainty related 1.1.5.1 Members of the Supervisory Board to the health situation for all of the Group’s activities. As of 31 December 2020, the Supervisory Board had nine In France, contractual negotiations will continue with the public members: transport authorities notably to seek to integrate the recurring Mr Joël Lebreton, member and Chairman of the Supervisory impacts on revenue related to the COVID-19 crisis. This year of Board; transition will be marked by the partial resumption of occasional Mr Patrick Bastien, member of the Supervisory Board; interurban services, and a partial upturn in passenger numbers on Major City Networks and City Networks, as well as in Île-de-France. Mr Patrick Coté, member of the Supervisory Board; Keolis Santé could benefit from a revaluation of the social security Mr Alain Krakovitch, member of the Supervisory Board; fees for medical transport. Lastly, 2021 will be more intense in terms of calls for tenders, particularly in Île-de-France in the context Mr Normand Provost, member of the Supervisory Board; of the opening up of Optile networks to competition. Ms Claudia Schlossberger, member of the Supervisory Board; For EFFIA, the Group expects a gradual recovery in traffic in car 1 Mr Jérôme Tolot, member of the Supervisory Board; parks, but in the still difficult context of the health crisis. The rate of return of TGV business customers will be a determining factor in Mr Laurent Trévisani, member of the Supervisory Board; the economic performance of the car parks. Ms Nathalie Wright, member of the Supervisory Board. Internationally, the impact of COVID-19, which should still be In accordance with the decision of the Supervisory Board of significant in 2021, will be the subject of ongoing negotiations with 15 January 2021, Mr Jérôme Tolot was appointed as Chairman of the public transport authorities. The year in 2021 will also be a year the Supervisory Board, replacing Mr Joël Lebreton, who made of transition in Wales, with the operation of the Transport for Wales available his offices as member and Chairman of the Supervisory network being taken over by the government (annual revenue of Board. €400 million) with the support of a technical assistance partnership with KeolisAmey. The Group also expects contracts to be mobilised 1.1.5.2 Internal Committees with the start of the rail operation-maintenance contract in Adelaide in February 2021, and bus operations in Denmark on Movia A18 of the Supervisory Board and Odensee in 2021. Lastly, the United States will benefit from the The Supervisory Board relies on five internal committees that bus contracts won at the end of 2020 (in Virginia and California) as prepare the work of the Board: well as the rail contract renewals in Boston (KCS) and Washington the Audit and Ethics Committee; (Virginia Rail). the Investment and Strategy Committee; The Group expects a return to reasonable growth in New Mobilities supported by a significant productivity plan. Investments focused on the Risks and Safety Committee; the passenger information platform are planned at Kisio Digital. the Remuneration and Human Resources Committee; Investments in data services will continue at Kisio Études & Conseil. the New Mobilities Committee.
1.1.4 SIGNIFICANT EVENTS SINCE 1.1.5.3 Board of Directors THE END OF THE FINANCIAL YEAR and Chair of the Company At 31 December 2020, the Board of Directors is composed of a Nil. single member. Ms Marie-Ange Debon was appointed as Chairwoman of the Board of Directors and Chairwoman of the Company, as per the decision of the Supervisory Board of 28 July 2020.
1.1.5.4 Capital and shareholding structure As of 31 December 2020, the share capital amounted to €237,888,901.80. It breaks down as follows: SNCF Participations: 69.69%; CDP-IE: 30%; FCPE GROUPE KEOLIS ACTIONNARIAT: 0.20%; treasury stock: 0.11%. Employee shareholdings in the form of FCPE GROUPE KEOLIS ACTIONNARIAT therefore represent 0.20% of the capital.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 9 Management Report 1 1.1 Management report from the Chairwoman of the Board of Directors
1.1.6 PRESENTATION OF THE RESOLUTIONS SUBMITTED TO THE SHAREHOLDERS’ VOTE
1.1.6.1 Proposed allocation of profit You will be asked to allocate the loss for the financial year ended 31 December 2020 as follows:
Loss for the financial year €(29,796,733.19) Allocation to the legal reserve €0 Rest €(29,796,733.19) Retained earnings €88,966,198.05 Distributable profit €0 Dividends paid €0 Retained earnings €59,169,464.86
In accordance with legal requirements, you are requested to note that the amount of the dividend distributed and that of the corresponding dividend tax credit for the previous financial years were as follows:
Financial Distributed income eligible Amount of distributed income year Dividend for the allowance not eligible for the rebate €0 2019 I.e. €0 per share €0 €0 €30,602,671.21 2018 I.e. €0.17 per share €0 €30,602,671.21 €30,585,867.05 2017 I.e. €0.17 per share €0 €30,585,867.05
Non tax deductible expenses We advise you that there were no non tax deductible expenses within the meaning of articles 223 quater and 223 quinquies of the French General Tax Code during the past year.
1.1.6.2 Agreements covered by Article L. 227-10 Appendix of the French Commercial Code You will be read the Statutory Auditor’s report on agreements made List of secondary establishments during the financial year and authorised by the Supervisory Board Nil. pursuant to Article L. 227-10 of the French Commercial Code. We hope that you will approve the above proposals and consequently vote in favour of the resolutions to be submitted to you. The Chairwoman of the Board of Directors
10 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com 2 CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2020
2.1KEY FIGURES FOR THE GROUP 12 2.3.4 NOTES TO THE CONSOLIDATED INCOME STATEMENT 31 2.2 CONSOLIDATED FINANCIAL 2.3.5 NOTES TO THE CONSOLIDATED STATEMENTS 13 STATEMENT OF FINANCIAL POSITION 35
2.2.1INCOME STATEMENT 13 2.3.6 OFF-STATEMENT OF FINANCIAL POSITION COMMITMENTS AND 2.2.2 STATEMENT OF COMPREHENSIVE CONTRACTUAL OBLIGATIONS 59 INCOME 14 2.3.7 LITIGATION AND CONTINGENT 2.2.3STATEMENT OF FINANCIAL POSITION 15 LIABILITIES 59 2.2.4STATEMENT OF CHANGES IN EQUITY 16 2.3.8RELATED-PARTY TRANSACTIONS 59 2.2.5STATEMENT OF CASH FLOWS 17 2.3.9POST-BALANCE SHEET EVENTS 59
2.3 NOTES TO THE CONSOLIDATED 2.3.10SCOPE OF CONSOLIDATION 60 FINANCIAL STATEMENTS 18 2.4 STATUTORY AUDITORS’ 2.3.1GENERAL INFORMATION 19 REPORT ON THE CONSOLIDATED FINANCIAL 2.3.2MAIN ACCOUNTING METHODS 19 STATEMENTS 70 2.3.3 HIGHLIGHTS OF THE 2020 FINANCIAL YEAR 30
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 11 Consolidated financial statements 31 December 2020 2 2.1 Key figures for the Group
2.1 KEY FIGURES FOR THE GROUP
(€ million) Note 31/12/2020 31/12/2019 Revenue 6,087.8 6,579.3 Revenue France 2,936.5 3,280.8 Revenue International 3,151.4 3,298.5 Revenue net of sub-contracting 5,918.8 6,386.7 Recurring EBITDA 2.3.4.3 531.9 703.1 EBITDA 2.3.4.3 480.2 672.9 Recurring operating profit 2.3.4.2 (23.5) 173.1 Operating profit before investments under equity method 2.3.4.2 (386.4) 54.5 Operating income after investments under equity method (375.2) 77.8 Profit after tax from continuing operations (479.1) (63.9) Net income (Group share) (464.4) (71.9) Total equity 465.3 942.8 of which attributable to equity shareholders 396.9 864.6 Net cash from operating activities 652.0 606.5 Capital expenditure (242.2) (297.5) Net financial debt (cash surplus)(1) 1,034.1 1,120.8
(1) In the case of an excess cash position, figures are shown in brackets.
12 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.2 Consolidated financial statements
2.2 CONSOLIDATED FINANCIAL STATEMENTS
2.2.1 INCOME STATEMENT
(€ million) Note 31/12/2020 31/12/2019 Revenue 6,087.8 6,579.3 Other income from operations 23.0 35.4 Revenue from ordinary activities 6,110.8 6,614.7 Sub-contracting (169.1) (192.6) Purchases consumed and external expenses (1,886.8) (2,028.4) Taxes (34.5) (35.6) Staff costs, incentive schemes, profit-sharing 2.3.4.1 (3,477.0) (3,646.1) Other operating income 3.6 5.6 Other operating expenses (10.4) (14.3) Net provisions on current assets (4.7) (0.1) Net depreciation and other provisions charged (557.3) (535.8) Income on recurring fixed asset disposals (4.1) 0.9 Share of reversal of grant 6.0 4.8 Recurring operating profit (23.5) 173.1 Other non-recurring income 2.3.4.2 120.3 23.0 Other non-recurring expense 2.3.4.2 (354.9) (95.3) Depreciation and provisions on contractual rights 2.3.4.2 (132.2) (44.7) Of which impairment of other intangible assets and badwill (107.8) (10.3) Income on non-recurring fixed asset disposals 3.9 (1.6) 2 Operating profit before investments under equity method 2.3.4.2 (386.4) 54.5 Income from associates 2.3.4.4 11.2 23.3 Operating income after investments under equity method (375.2) 77.8 Net cost of financial debt 2.3.4.5 (19.8) (16.1) Other financial income 2.3.4.5 36.0 1.1 Other financial charges 2.3.4.5 (102.7) (77.1) Financial income (86.5) (92.2) Net income before tax (461.7) (14.4) Taxation 2.3.4.6 (17.4) (49.5) Profit after tax from continuing operations (479.1) (63.9) Income for the year from discontinued operations, net of tax - - Net income for the year (479.1) (63.9) Income attributable to non-controlling interests 14.8 (8.0) Net income (Group share) (464.4) (71.9)
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 13 Consolidated financial statements 31 December 2020 2 2.2 Consolidated financial statements
2.2.2 STATEMENT OF COMPREHENSIVE INCOME
(€ million) 31/12/2020 31/12/2019 Net income for the year (479.1) (63.9) Actuarial gains (losses) on defined benefit pension schemes 3.5 59.1 Unrealised gains (losses) relating to the revaluation at fair value of non-consolidated investments (3.1) (0.6) Tax on actuarial gains (losses) on defined benefit pension schemes 4.3 (13.8) Share of other comprehensive income of companies accounted for by the equity method that cannot be recycled 3.9 (0.0) Items which will not be recycled in income 8.6 44.6 Foreign exchange translation differences and other (6.9) 16.5 Unrealised gains (losses) (2.6) 1.4 Financial hedging instruments (2.6) 1.4 Change in fair value of assets 0.0 0.0 Tax on items that may be reclassified to profit or loss 0.4 0.9 Share of other comprehensive income of companies accounted for by the equity method that can be recycled (2.2) 1.3 Items which will be recycled in income (11.4) 20.0 Expenses and income recognised directly in equity (3.0) 64.6 Comprehensive income (482.1) 0.7 Of which attributable to equity shareholders (467.7) (8.7) Of which share of non-controlling interests (14.4) 9.3
14 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.2 Consolidated financial statements
2.2.3 STATEMENT OF FINANCIAL POSITION
Assets
(€ million) Note 31/12/2020 31/12/2019 Goodwill 2.3.5.1 1,107.0 1,324.7 Other intangible assets 2.3.5.2 651.4 590.9 Right-of-use assets 2.3.5.4 1,471.7 1,561.9 Property, plant and equipment 2.3.5.3 889.5 953.7 Investments under the equity method 2.3.5.5 76.6 72.4 Non-current financial assets 2.3.5.6 316.0 143.2 Deferred tax asset 2.3.4.6 92.3 46.0
Non-current assets 4,604.5 4,692.7 Inventories and work in progress 2.3.5.7 148.8 142.6 Trade receivables 2.3.5.8 565.5 731.5 Other receivables 2.3.5.8 515.2 552.2 Current financial assets 2.3.5.6 12.5 17.2 Cash and cash equivalents 2.3.5.9 515.5 382.1
Current assets 1,757.4 1,825.6
TOTAL ASSETS 6,361.9 6,518.3
Liabilities
(€ million) Note 31/12/2020 31/12/2019 Share capital 2.3.5.10 237.9 237.9 2 Reserves and premiums 2.3.5.10 623.4 698.6 Net income (Group share) 2.3.5.10 (464.4) (71.9)
Equity attributable to Group 396.9 864.6 Reserves attributable to non-controlling interests 83.1 70.2 Profit for the year attributable to non-controlling interests (14.8) 8.0
Equity 465.3 942.8 Non-current provisions 2.3.5.14 271.0 167.6 Lease commitments non-current 2.3.5.4 1,266.8 1,325.0 Non-current financial debt 2.3.5.11 1,431.3 1,198.2 Deferred tax liability 2.3.4.6 159.4 101.6
Non-current liabilities 3,128.5 2,792.4 Current provisions 2.3.5.14 91.2 58.9 Lease commitments current 2.3.5.4 243.7 265.9 Current financial debt 2.3.5.11 163.1 136.9 Bank borrowings 2.3.5.9 140.9 206.7 Trade payables and other liabilities 2.3.5.15 2,129.2 2,114.7
Current liabilities 2,768.1 2,783.1
TOTAL LIABILITIES 6,361.9 6,518.3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 15 Consolidated financial statements 31 December 2020 2 2.2 Consolidated financial statements
2.2.4 STATEMENT OF CHANGES IN EQUITY
Capital Reserves and other
Items which will be reclassifiable to profit or loss Other unrealised Foreign Other gains/losses, exchange unrecognised net, not Share translation gains/losses, reclassifiable capital Reserves difference net to profit or loss Subtotal Equity At 31 December 2018 237.9 837.0 (71.0) (10.8) (26.4) 729.0 966.8 Attributable to GROUPE KEOLIS S.A.S shareholders 237.9 773.3 (71.4) (8.6) (26.4) 666.9 904.8 Attributable to minority shareholders in subsidiaries - 63.7 0.4 (2.2) 0.1 62.0 62.0 Dividends paid to GROUPE KEOLIS S.A.S shareholders - (30.6) - - - (30.6) (30.6) Correction of error on deficit 16.0 - - - 16.0 16.0 Reversal of historical entry Australia (2.8) - - - (2.8) (2.8) Reversal of unused provision Transpole (1.5) - - - (1.5) (1.5) Other changes (1.3) - - - (1.3) (1.3) Cancellation of treasury shares GK SAS (PEG) (0.5) - - - (0.5) (0.5) Change in shareholdings in subsidiaries without gain/loss of control of subsidiaries (9.8) - - - (9.8) (9.8) Other changes 0.2 (0.0) (0.4) (0.9) (1.1) (1.1)
Transactions attributable to GROUPE KEOLIS S.A.S. Shareholders (A) - (30.3) (0.0) (0.4) (0.9) (31.6) (31.6) Dividends paid to minority shareholders in subsidiaries - (5.2) - - - (5.2) (5.2) Capital increase KCS 4.3 - - - 4.3 4.3 Change in shareholdings in subsidiaries without gain/loss of control of subsidiaries - 8.8 - - - 8.8 8.8 Other changes (0.6) - (0.2) (0.1) (0.9) (0.9)
Operations attributable to minority shareholders in subsidiaries (B) - 7.3 - (0.2) (0.1) 7.0 7.0 Net income for the year - (63.9) - - - (63.9) (63.9) Expenses and income recognised directly in equity - - 17.7 2.2 44.6 64.6 64.6
Comprehensive income (C) - (63.9) 17.7 2.2 44.6 0.7 0.7
CHANGE IN THE YEAR (A+B+C) - (86.8) 17.7 1.7 43.6 (23.9) (23.9) Attributable to GROUPE KEOLIS S.A.S shareholders - (102.2) 16.3 0.9 44.9 (40.1) (40.1) Attributable to minority shareholders in subsidiaries - 15.3 1.4 0.8 (1.3) 16.2 16.2 At 31 December 2019 237.9 750.2 (53.2) (9.1) 17.1 704.9 942.8 Attributable to GROUPE KEOLIS S.A.S. Shareholders 237.9 671.1 (55.1) (7.7) 18.4 626.7 864.6 Attributable to minority shareholders in subsidiaries - 79.0 1.9 (1.4) (1.3) 78.2 78.2 Dividends paid to GROUPE KEOLIS S.A.S. Shareholders - (0.1) - - - (0.1) (0.1) Adjustment of tax loss carryforwards Belgium (1.0) - - - (1.0) (1.0) Reversal of historical entry Australia 1.8 - - - 1.8 1.8 Adjustment of One Park shares 3.9 - - - 3.9 3.9 Other changes (0.2) - (0.2) (0.2) (0.6) (0.6)
Transactions attributable to GROUPE KEOLIS S.A.S. Shareholders (A) - 4.3 - (0.2) (0.2) 3.9 3.9 Dividends paid to minority shareholders in subsidiaries - (0.3) - - - (0.3) (0.3) Capital increase subscribed by minority shareholders 5.9 - - - 5.9 5.9 Change in shareholdings in subsidiaries without gain/loss of control of subsidiaries - 0.1 - - - 0.1 0.1 Reversal of historical entry Australia (0.9) - - - (0.9) (0.9) Other changes (0.0) - 1.4 (1.7) (0.3) (0.3)
Operations attributable to minority shareholders in subsidiaries (B) - 4.8 - 1.4 (1.7) 4.6 4.6 Net income for the year - (479.1) - - - (479.1) (479.1) Expenses and income recognised directly in equity - - (9.1) (2.3) 4.5 (6.9) (6.9)
Comprehensive income (C) - (479.1) (9.1) (2.3) 4.5 (486.0) (486.0)
CHANGE IN THE YEAR (A+B+C) - (470.0) (9.1) 1.5 0.2 (477.4) (477.4) Attributable to GROUPE KEOLIS S.A.S. Shareholders - (460.0) (7.3) (0.1) (0.1) (467.6) (467.6) Attributable to minority shareholders in subsidiaries - (9.9) (1.8) 1.6 0.3 (9.8) (9.8) At 31 December 2020 237.9 280.3 (62.4) (7.6) 17.3 227.6 465.3 Attributable to GROUPE KEOLIS S.A.S. Shareholders 237.9 211.1 (62.4) (7.8) 18.3 159.2 396.9 Attributable to minority shareholders in subsidiaries - 69.1 0.1 0.2 (0.9) 68.4 68.3
16 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.2 Consolidated financial statements
2.2.5 STATEMENT OF CASH FLOWS
(€ million) Note 31/12/2020 31/12/2019 Operating profit before investments under equity method (386.4) 54.5 Non-cash items 866.6 618.5 EBITDA 2.3.4.3 480.2 672.9 Elimination of provisions on current assets (0.8) 3.7 Changes in working capital 203.5 (28.5) Tax paid (30.9) (41.6)
A) Net cash from operating activities 652.0 606.6 Capital expenditure (242.2) (297.5) Sale of intangible assets and property, plant and equipment (sale price) 10.0 38.2 Investment grants received 45.9 34.2 Change in financial assets for concessions (IFRIC 12) (22.6) (23.8) Financial investments (28.5) (195.5) Proceeds from disposal of financial assets 11.6 (0.2) Cash flows on changes in reporting scope 0.8 (21.4)
B) Net cash from investing activities (225.2) (466.0) Free cash flow 426.8 140.6 Dividends paid (0.2) (36.1) Net dividends received 7.9 23.8 Change in equity (other transactions with shareholders) 6.0 4.4 New borrowings 2.3.5.11 518.9 314.3 Borrowings repaid 2.3.5.11 (388.9) (56.5) Interest received 1.8 1.6 2 Interest paid (21.9) (17.7) Change in other financial debts 2.3.5.11 (0.4) 0.1 Repayment of lease commitments 2.3.5.4 (293.0) (297.0) Net interest paid on lease commitments 2.3.5.4 (48.5) (45.3) Other (7.0) (9.3)
C) Net cash from financing activities (225.4) (117.7)
D) Foreign exchange translation differences (2.3) 2.3
CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C+D) 199.2 25.2 and cash equivalents at beginning of period 2.3.5.9 175.4 150.2 Cash and cash equivalents at end of period 2.3.5.9 374.6 175.4
Change in cash and cash equivalents 199.2 25.2
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 17 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
2.3 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.3.1GENERAL INFORMATION 19 2.3.5.7Inventories 41 2.3.2MAIN ACCOUNTING METHODS 19 2.3.5.8Trade and other receivables 42 2.3.2.1Accounting standards 19 2.3.5.9Cash and cash equivalents 42 2.3.2.2Changes in accounting principles 19 2.3.5.10Equity 42 2.3.2.3 Use of management estimates in the application 2.3.5.11Financial debt and long-term borrowings 43 of the Group’s accounting standards 19 2.3.5.12Assets and liabilities by category 45 2.3.2.4Accounting principles 20 2.3.5.13Risk management and financial derivatives 47 2.3.5.14Provisions 54 2.3.3HIGHLIGHTS OF THE 2020 FINANCIAL YEAR 30 2.3.5.15Trade and other liabilities 58 2.3.4 NOTES TO THE CONSOLIDATED INCOME STATEMENT 31 2.3.6 OFF-STATEMENT OF FINANCIAL POSITION 2.3.4.1Staff expenses 31 COMMITMENTS AND CONTRACTUAL 2.3.4.2Operating profit 32 OBLIGATIONS 59 2.3.4.3EBITDA calculation 32 2.3.7LITIGATION AND CONTINGENT LIABILITIES 59 2.3.4.4Share of net income of equity-accounted investments 33 2.3.8RELATED-PARTY TRANSACTIONS 59 2.3.4.5Financial income 33 2.3.8.1Transactions with SNCF 59 2.3.4.6Tax 33 2.3.8.2Transactions with joint ventures and associates 59 2.3.5 NOTES TO THE CONSOLIDATED STATEMENT 2.3.8.3Remuneration of the Group’s key managers 59 OF FINANCIAL POSITION 35 2.3.9POST-BALANCE SHEET EVENTS 59 2.3.5.1Goodwill 35 2.3.5.2Other intangible assets 37 2.3.10SCOPE OF CONSOLIDATION 60 2.3.5.3Property, plant and equipment 38 2.3.10.1Subsidiaries 60 2.3.5.4Rights of use 39 2.3.10.2Joint ventures and associates 69 2.3.5.5Investments under the equity method 40 2.3.5.6Current and non-current financial assets 41
18 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.1 GENERAL INFORMATION
GROUPE KEOLIS S.A.S. and its subsidiaries (“the Group”) develop The consolidated financial statements of GROUPE KEOLIS S.A.S. transport service solutions tailored to local conditions: automatic as at 31 December 2020 were approved by the Board of Directors metros, trams, trains, buses, coaches, river and sea ferries, self-hire on 15 February 2021 and presented to the Supervisory Board on bikes. The Keolis Group exports its multi-modal expertise to 25 February 2021. 15 countries around the world. It is also the second largest parking The Group’s financial statements are fully consolidated in those of provider in France through its subsidiary EFFIA and offers mobility the SNCF Group. solutions and services through its subsidiary Kisio. The consolidated financial statements are prepared in euros (€), the GROUPE KEOLIS S.A.S., the Group’s holding company, is a Group’s functional currency, and, unless otherwise stated, are simplified joint stock company (société par actions simplifiée) presented in millions of euros (€M). The Group has chosen not to registered and domiciled in France, with its registered office located manage rounding discrepancies; consequently, some small at 20-22, rue Le Peletier, 75320 Paris Cedex 09. differences may appear.
2.3.2 MAIN ACCOUNTING METHODS
2.3.2.1 Accounting standards This amendment provides a more precise definition of the term The Group’s consolidated financial statements as at 31 December “significant” as used in IAS 1 and IAS 8. 2020 have been prepared in accordance with IFRS (standards and No significant impact has been identified as at 31 December 2020. interpretations) published by IASB as adopted by the European Amendment to IFRS 16 “Leases” relating to rent Union and rendered mandatory from 1 January 2020. They are reductions linked to the COVID-19 health crisis available at this site: This amendment gives tenants the option of not assessing whether http://ec.europa.eu/commission/index_en a rent reduction granted in the context of the health crisis is a In the absence of borrowing or equity instruments traded on a contract amendment. This practical exemption allows the tenant to regulated market, the Group has chosen not to publish information recognise rent reductions related to COVID-19 as if they were not on earnings per share (IAS 33), or information about operating contract amendments, and to recognise the impact of the rent segments (IFRS 8). reduction in income for the period. The impact of the application of the amendment at 31 December 2.3.2.2 Changes in accounting principles 2020 was not material. 2 Amendment to IFRS 3 “Definition of a company” Standards, amendments to standards and The purpose of this amendment is to clarify the definition of interpretations not subject to early application “business” and to simplify the analysis of whether an acquisition The Group has not applied in advance any mandatory standards and constitutes a business combination or an acquisition of individual interpretations from a financial year after 31 December 2020, assets. whether or not adopted by the European Commission. No significant impact has been identified as at 31 December 2020. Amendments to IFRS 9, IAS 39 and IFRS 7 “Recognition 2.3.2.3 Use of management estimates and measurement as part of the reform of benchmark in the application of the Group’s interest rates” accounting standards These amendments, designed to enable entities to provide useful In order to draw up the Group’s accounts in accordance with IAS 8 financial information during the period of uncertainty related to the “Accounting Policies, Changes in Accounting Estimates and Errors”, IBOR reform, modify certain hedge accounting requirements. Their management must make estimates and assumptions, notably based purpose is to maintain existing hedging relationships despite the on ongoing action plans for certain operations, affecting the uncertainties raised by the current reform. In addition, these amounts stated in the financial statements. Management has to amendments require the entities to provide investors with additional revise such estimates in the light of changes in the circumstances information on their hedging relationships that are directly affected on which they were based or further to new information. by these uncertainties. Management also has to exercise judgement in how accounting No significant impact has been identified as at 31 December 2020. methods are applied. As a result, future estimates may be different from those adopted as of 31 December 2020. Amendment to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 19 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
The estimates and assumptions primarily concern the lengths of FULLY-CONSOLIDATED SUBSIDIARIES contractual relations, asset impairment tests, deferred tax assets All the Group’s subsidiaries are companies it controls directly or and financial instruments, as well as provisions, in particular indirectly. The Group’s consolidated financial statements include the provisions for pensions, litigation and losses on contracts and assets, liabilities, income and expenses of these companies. recognition of amounts to be received and penalties to be paid arising from contractual relationships. Control exists when GROUPE KEOLIS S.A.S. has power over the entity, is exposed or has rights to variable returns, and has the ability As part of the preparation of the 2020 financial statements, to affect those returns. In ascertaining whether there is control, management has made its estimates and formulated its account is taken of the established rules of governance and the assumptions by integrating the effects of the health crisis on the rights held by the other shareholders in order to ensure that they transport business, in particular the adjustments to the offer and the are merely protective in nature. Potential voting rights, whether taking into account of the compensation mechanisms proposed immediately exercisable or convertible, including those held by locally by the State or the Public Transport Authorities. Likewise, the another entity, are also analysed to determine those conferring assumptions take into account the action plans established to adapt substantive rights in the assessment of power, in accordance with to the new conditions observed in the public transport market. IFRS 10 “Consolidated Financial Statements”. The Group was particularly attentive to the effects of the COVID-19 health crisis on significant estimates, and more specifically on the ASSOCIATES AND JOINT VENTURES CONSOLIDATED UNDER following subjects: THE EQUITY METHOD the valuation of goodwill (note 2.3.5.1) and intangible assets Entities in which the Group exerts significant influence without (note 2.3.5.2). The Group has taken into account the exercising control are associates. Significant influence is presumed uncertainties relating to the COVID-19 health crisis in the when the Group holds upwards of 20% of the voting rights. assessment of the recoverable values of these assets; Under the equity method, investments in associates or joint analysis of contract profitability; ventures are capitalised in the consolidated balance sheet at their the valuation of capitalised tax losses carried forward cost of acquisition. The Group’s share of income of associates or (note 2.3.4.6), taking into account the possible impact of the joint ventures is recognised in profit or loss, whereas its share of COVID-19 health crisis on taxable income forecasts. post-acquisition movements in reserves is recognised in reserves. Post-acquisition movements are posted in adjustment to the value Finally, in the absence of standards or interpretations applicable to a of the investment. The Group’s share of an associate’s or a joint specific transaction, Group management must use its best venture’s losses is recognised up to the limit of the carrying amount judgement to define and implement accounting methods that of the investment as well as any possible long-term share. provide the most relevant and reliable information, to ensure that Additional losses are not booked as provisions, unless the Group is the financial statements: legally or implicitly required to support the said associate or joint present a true and fair view of the Group’s financial position and venture. cash flows; reflect the economic reality of the transactions. NON-CONTROLLING INTERESTS A non-controlling investment is the share of interest in a subsidiary 2.3.2.4 Accounting principles which is not directly or indirectly attributable to the parent company. Non-controlling investments are recognised at fair value on the 2.3.2.4.1 General measurement method takeover date. The assets and liabilities in the Group’s consolidated financial statements are measured and recognised according to various YEAR-END CLOSING TIMING DIFFERENCES measurement bases authorised by IFRS, primarily the historical cost For companies whose financial year does not end on 31 December, basis of accounting, with the exception of derivative financial interim financial statements as at 31 December are established. instruments and financial assets held for trading purposes or classified as AFS (available for sale), which are measured at fair value. TRANSACTIONS ELIMINATED IN THE CONSOLIDATED FINANCIAL STATEMENTS 2.3.2.4.2 Methods of consolidation Transactions between consolidated companies which have an impact on their balance sheet or income statement are eliminated. Subsidiaries are recognised in the consolidated statements from Losses on transactions between consolidated companies that are the date on which control thereof reverted to the Group. They are indicative of value impairment are not eliminated. IAS 12 “Income derecognised from the date on which the Group ceased to control Taxes” applies to temporary differences resulting from the them. The income and expenses of the companies are included in elimination of profits and losses on intra-group transactions. the Group’s income from the date that control was taken, up to the date on which the Group lost control.
20 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.2.4.3 Translation of transactions if the adjustment is the result of new information collected and financial statements of foreign enabling fine-tuning of the valuation on the takeover date: companies counterpart in goodwill. A subsequent change of debt corresponding to additional TRANSLATION OF THE FINANCIAL STATEMENTS consideration beyond the twelve-month period is booked in income OF FOREIGN COMPANIES for the year. The financial statements of consolidated foreign subsidiaries, After the acquisition of control, purchases/disposals without loss of whose functional currency is different from the euro, are translated control are treated as transactions between shareholders and on the following bases: therefore directly through equity. assets and liabilities are translated at the official exchange rates prevailing at the year-end date; 2.3.2.4.5 Goodwill income and expenses are translated at the average rate for the Goodwill on acquisition represents the excess of the cost of an period, unless exchange rates fluctuate significantly; acquisition over the share acquired by the Group of the fair value of the acquired assets and liabilities of the acquired entity on the date goodwill and fair value adjustments recognised on the of acquisition. acquisition of companies whose functional currency is not the euro are considered to be the assets and liabilities of such The goodwill recognised for an associate is included in the value of companies: they are therefore expressed in the companies’ own the capital holding in it under “Investments under the equity functional currency and translated at the closing rate for each method”, in the statement of financial position. period; Corrections or adjustments may be made to the fair value of assets, the resulting foreign exchange translation differences are liabilities and contingent liabilities acquired in the twelve months recognised in consolidated equity under the item “foreign following the acquisition, when new information arises affecting exchange translation reserves”. facts and circumstances which were in evidence at this date of acquisition. Goodwill is then corrected with retroactive effect. Beyond that date, any change in assets acquired and liabilities TRANSLATION OF FOREIGN CURRENCY TRANSACTIONS assumed is recognised in the income statement. The functional currency of Group companies is their local currency. If the information is a result of events occurring after the date of Transactions denominated in foreign currency are translated by the acquisition, the changes are recognised in income for the year. subsidiaries into their functional currency at the rate of exchange prevailing at the transaction date. As goodwill cannot be amortised, it undergoes impairment tests every year or at more frequent intervals when events or changes in Monetary assets and liabilities denominated in foreign currency are circumstances indicate possible loss in value (see 2.3.2.4.10). translated into euros at the last official year-end exchange rate. The corresponding exchange differences are recorded in net financial Goodwill is allocated to cash-generating units or groups of cash-generating units that are likely to benefit from the synergies of 2 income. business combinations carried out in accordance with the procedures set out in note 2.3.2.4.10. 2.3.2.4.4 Business combinations The Group has applied IFRS 3 (revised) since 1 January 2010. Badwill (negative goodwill) is recognised in the income statement. A business combination is understood to involve the obtaining of control. Upon acquisition of control, the acquirer recognises the fair 2.3.2.4.6 Concession assets value of the acquired assets and liabilities of the acquired entity and also assesses the goodwill or profit from them. PRESENTATION OF THE IFRIC 12 INTERPRETATION Non-controlling interests are recognised according to the following An arrangement is included in the scope of interpretation of IC 12, options for each combination: where the assets used to carry out the public service are controlled by the grantor. Control is presumed when the two conditions below either based on their share in the fair value of the assets and are met: liabilities acquired (the so-called partial goodwill method); or the grantor controls or regulates the public service, i.e. it controls at fair value of the shareholding (the so-called complete goodwill or regulates the services that must be rendered, through the method). infrastructure covered by the concession and determines to Acquisition costs are expensed in the financial year. whom and at what price the service shall be rendered; and For a takeover in several stages, the investment held prior to the the grantor controls the infrastructure on termination of the establishment of control is revalued at its fair value on the date of contract, i.e. the right to regain possession of the infrastructure takeover and any profit or loss arising therefrom is recognised at the end of the contract. under operational profit after gains or losses from disposals. In its public transport activities, the Group is notably the holder of Commitments linked to earn-out clauses are measured at their fair outsourced public service contracts. value on the acquisition date. In France, the Group operates outsourced public service contracts, Adjustments to the cash consideration during the twelve months mainly in the form of operate and maintain (O&M) contracts after the date of acquisition must be analysed in order to determine: whereby the operator is responsible for operating and maintaining facilities owned and funded by local and regional authorities – if the adjustment is linked to new factors occurring since the public transport authorities (PTAs). acquisition of control: counterpart in the income statement;
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 21 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Pursuant to the interpretation of IFRIC 12, in this case, the operator Within the framework of the intangible asset model, revenues from cannot include the infrastructure controlled by the grantor in its ordinary activities include: balance sheet as tangible assets, but either as an intangible asset revenue as and when assets or infrastructures under (“intangible asset model”) and/or as a financial asset (“financial construction are completed; asset model”): remuneration relating to the provision of services. the “financial asset model” applies where the operator obtains an unconditional right to receive cash or other financial asset, either directly or indirectly through guarantees given by the grantor on MIXED OR BIFURCATION MODEL the amount of cash payments from the public service. The Application of the financial asset model or the intangible asset remuneration is independent of the extent to which the public model is based on the existence of guarantees of payment given by uses the infrastructure; the grantor. the “intangible asset model” applies where the operator receives However, certain contracts may include a payment commitment a right to charge users for the public service and thus bears a from the grantor which partially covers the investment, with the financial risk. balance covered through fees charged to users. Where the service is provided using infrastructure rented from a In this case, the amount guaranteed by the grantor is recognised as third party and controlled by the grantor, the Group has recognised a financial asset and the balance as an intangible asset. payments of fixed and variable fees and rents in the IFRIC 12 “Asset valuation”. 2.3.2.4.7 Intangible assets excluding goodwill Intangible assets are shown in the statement of financial position at FINANCIAL ASSET MODEL their acquisition cost less the accumulated amortisation and In service concessions, the operator receives an unconditional right impairments. if the grantor gives it a contractual guarantee to pay: Intangible assets mainly consist of patents, licences, trademarks, amounts specified or determined in the contract; or rights under contracts, authorisations, pension plan assets, software the shortfall, if any – between the amount received from users of and service concession intangible assets as defined by IFRIC 12. the public service and specified or determinable amounts in the In the event of a successful bid, the Group capitalises mobilisation contract. costs, which meet capitalisation criteria, from the point at which it is Financial assets resulting from the application of IFRIC 12 are almost certain that the contract will be awarded. The corresponding recorded in the consolidated statement of financial position under contract asset is amortised over the life of the contract. the headings “Non-current financial assets” described in When the Group completes an acquisition, the contractual note 2.3.5.6. They are recognised at amortised cost and repaid. relationship between the acquired company and its client (the public When the service is provided through the use of infrastructure transport authority) is assessed at fair value and recognised leased to third parties and controlled by the grantor, the counterpart separately from the goodwill as a contractual right satisfying the of the financial asset is a concession financial liability. qualifying criteria of IAS 38 and IFRS 3 revised. The financial income, calculated on the basis of the effective rate of Where their useful life is defined, intangible assets are amortised on interest, the equivalent of the project’s internal rate of return, is a straight-line basis over periods corresponding to their expected recognised as revenue. useful life. The amortisation method and useful lives are revised at least each financial year or when necessary. The estimated useful Under the financial asset model, income from ordinary activities is lives are as follows: only recognised in revenue when the Group can be considered as a main player. trademarks: between five and fifteen years; contractual rights: two to twenty years, corresponding to their INTANGIBLE ASSET MODEL estimated useful life, allowing for a contract renewal rate when the Group has a high renewal rate in the Cash Generating Unit The intangible asset model applies where the operator is paid by (CGU) concerned; users or does not receive any contractual guarantee from the grantor on the amount to be collected. The intangible asset software: one to five years; corresponds to the right granted by the grantor to the operator to concession assets amortised over the term of the contract (see charge users for the public service. 2.3.2.4.6); Intangible assets resulting from the application of the IFRIC 12 contract assets, amortised over the life of the contract. interpretation are booked in the statement of financial position When their useful life is indefinite, intangible assets are not under the heading “Other intangible fixed assets” detailed in amortised; they are subject to an impairment test (see 2.3.2.4.10). In note 2.3.5.2. These assets are amortised straight-line over the term particular, authorisations held for an unlimited period cannot be of the contract. amortised. When the service is provided through the use of infrastructure leased to third parties and controlled by the grantor, the counterpart of the intangible asset is an operating liability.
22 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.2.4.8 Property, plant and equipment SUBSEQUENT EXPENDITURE Expenditure on property, plant and equipment by the Group is Subsequent expenditure incurred in replacing property, plant or recognised as an asset at its acquisition cost where it satisfies the equipment is recognised under PPE only if it satisfies the foregoing following criteria: general criteria and can be qualified as components. it is likely that the future economic benefits relating to the asset Otherwise, this expenditure is recognised in the income statement will fall to the Group; as incurred. the cost of the asset can be reliably measured. Through its public passenger transport activity, the Group incurs multiyear expenditure on major maintenance and servicing Property, plant and equipment are shown in the statement of operations on its light rail (underground railway, tramway) and financial position at their acquisition cost less the accumulated passenger rail rolling stock. These are recognised as assets in the depreciation and impairments. The cost includes the asset’s form of a maintenance component, which is subsequently purchase or production cost and all the costs directly incurred in depreciated. Furthermore, expenditure which relates to making it usable. refurbishments or leads to an increase in productive capacity and Items of property, plant and equipment cease to be recognised as modifications bringing new functionality or that extend lifespans are assets when they are derecognised (through disposal or contributions that can be qualified as operator assets. retirement), or when no future economic benefit is expected from their use or disposal. Any gain or loss arising from the derecognition DEPRECIATION of an asset from the statement of financial position (the difference between the net income from disposal and the asset’s carrying The residual values and useful lives of the assets are reviewed and, amount) is recognised in the income statement in the period of its where applicable, adjusted, annually or whenever lasting changes retirement. arise in operating conditions. Given the nature of the Group’s business, the activities of the To date, the residual values at the end of the useful life are different subsidiaries do not include holding investment property regarded as immaterial. assets. Land is not depreciated. Other property, plant and equipment items are depreciated using the straight line method. The estimated useful lives are as follows:
Buildings 15 to 20 years Equipment and tooling 5 to 10 years Furniture and office equipment 5 to 10 years Vehicle equipment: Cars 5 years 2 Coaches and buses 10 to 15 years Rolling stock 15 to 30 years
GOVERNMENT INVESTMENT GRANTS VALUATION OF THE RIGHT-OF-USE ASSETS Government grants wholly or partly covering the cost of investing in At the effective date of a lease, the right-of-use asset is measured an asset are recognised as “Trade payables and other liabilities” and at cost and includes: systematically written down in the income statement over the useful the initial amount of the lease commitment plus, if applicable, lives of the assets concerned. any prepayments made to the lessor, net of any lease inducements received from the lessor; 2.3.2.4.9 Rights of use the initial direct costs incurred by the lessee for the conclusion The existence of a lease in a contract is based primarily on the of the contract; control exercised by the lessee over the right to use an identified asset for a specified period of time. Eligible contracts are then the estimated costs of maintaining and dismantling the leased presented in the balance sheet by the recognition of: asset in accordance with the terms of the contract. an asset corresponding to the right to use the leased asset The right-of-use asset is depreciated over the lease term or over during the term of the contract; the useful life of the underlying asset when the contract provides for a purchase option that the lessee is reasonably certain to a liability corresponding to the present value of the remaining exercise. payments due to the lessor.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 23 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
VALUATION OF THE LEASE COMMITMENT For testing purposes, the assets are aggregated within CGUs in At the inception of the contract, the lease commitment is accordance with IAS 36 “Impairment of Assets”. recognised in an amount equal to the present value of the rental These tests compare the net carrying amount of assets with their payments over the term of the contract. The amounts taken into recoverable amount, which is the higher of the fair value less the account in the valuation of lease commitments are: potential sales costs or the value in use of the asset. In the absence fixed rentals (including rentals that are fixed in substance, i.e. of any fair value observable on an organised market, the even if they contain variability in form, they are in substance recoverable value of the CGUs is determined on the basis of their unavoidable); value in use. variable rentals based on a rate or index using the rate or index The carrying amount of each asset group tested is compared with at the effective date of the contract; its value in use defined as the sum of the net cash flows arising from the latest forecasts for each of the CGUs, drawn up according payments to be made by the lessee under a residual value to the main assumptions and procedures set out below: guarantee; medium-term plan and budgets over a 5-year timeframe, drawn the penalties to be paid in the event of the exercise of an option up by Management on the basis of growth and profitability to terminate or not renew the contract, if the duration of the assumptions taking account of past performance, foreseeable contract was determined on the assumption that the lessee developments in the economic environment and the expected would exercise it. development of markets. The best estimate of the consequences Certain events may lead to a revaluation of the values recorded in of the health crisis was also taken into account; the balance sheet. These include the following situations in extrapolation of the net cash flow of the last year or the average particular: of cash flows over the five previous years by applying the growth revision of the rental period, the rent or the scope of the leased assumptions stated in note 2.3.5.1; assets; discounted future value of the cash flows arising from these revaluation relating to residual value guarantees; plans at a rate determined using the weighted average cost of capital (WACC) of the Group. revision of the rates or indices on which rents are based. Value impairment is recognised in the income statement, under The discount rate used to measure the lease commitment is the other non-recurring expense, if the carrying amount of a rate implicit in the contract when it is readily determinable or, failing cash-generating unit or group of such units is greater than its that, the lessee’s marginal borrowing rate at the inception of the recoverable amount. The value impairment is allocated first to the contract. This rate corresponds to the interest rate that the lessee goodwill apportioned to the CGU or CGU group tested, then to the would obtain at the inception of the lease agreement, in order to other assets of the CGU or CGU group in proportion to their borrow over a similar term, with a similar guarantee and economic carrying amount. environment, the funds necessary to acquire an asset with a value equivalent to the right-of-use asset. This allocation must not result in the carrying amount of an individual asset being lower than its fair value, value in use or zero. The lease term corresponds to the negotiated contractual term. Renewal or termination assumptions are only taken into account if a Potential impairment losses allocated to acquisition goodwill cannot particular context allows the Group to be reasonably certain: be reversed, unlike the impairment losses of other property, plant and equipment and intangible assets. to exercise a renewal option, for example, when the leased asset is considered “strategic” or when it has been the subject of In the event of an impairment loss being reversed, the asset’s “significant” investments while the remaining lease term is carrying amount is capped at the carrying amount, net of any significantly short; depreciation or amortisation without taking into account any value impairment recognised in prior periods. When an impairment loss or not to exercise the termination option provided for contractually, a reversal of an impairment loss has been recognised, the for example in the event of early termination of the Public depreciation charge is adjusted for future periods so that the Service Delegation contract. adjusted carrying amount of the asset, less its residual value, if any, is spread systematically over the remaining useful life. 2.3.2.4.10 Impairment of capitalised assets and non-financial assets 2.3.2.4.11 Financial assets The Group performs systematic impairment tests annually (or more Purchases and sales of financial assets are recognised at their frequently where value impairment is indicated) of goodwill and transaction date, the date on which the Group is committed to the other intangible assets that have indefinite useful lives, and purchase or sale of the asset. On initial recognition, financial assets therefore cannot be depreciated. are recognised in the statement of financial position at fair value For property, plant and equipment, and intangible assets with finite plus the transaction costs directly attributable to the acquisition or useful lives, which are therefore depreciated or amortised, an issue of the asset (except for the category of financial assets impairment test is only conducted where impairment is indicated. measured at fair value, for which transaction costs are recognised directly in the income statement). Cash Generating Units (CGUs) are the smallest group of assets generating cash flows largely independently of other asset groups. Financial assets are derecognised from the statement of financial Such units or groups of units correspond to activities in France and, position to the extent that entitlements to future cash flows have internationally, mainly by country. expired or have been transferred to a third party, and the Group has transferred virtually all the risks and benefits or the control of such assets. Financial assets, the maturity (or intended holding period) of which exceeds one year, are recognised under “Non-current financial assets”.
24 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
In applying the standard IFRS 9, the Group determines the In the case of instruments with a debt component and an equity classification of financial assets, on the date of initial recognition, component, IFRS 9 does not authorise their separation: an analysis into one of the accounting categories provided for, according to the of the instrument will lead to its being classified in one of the two management model applied for these assets and the characteristics categories. For example, loans convertible into shares are classified of the contractual cash flows (“basic loan” criteria). in the category of debt instruments whose variations in fair value pass in the income statement. EQUITY INSTRUMENTS An equity instrument under the terms of IAS 32 offers its holder a IMPAIRMENT OF FINANCIAL ASSETS residual right to the assets of an entity after deduction of the When financial assets are first recognised, the Group considers the liabilities, without the issuer of the instrument being obliged: potential expected credit losses not only on the basis of an to give them cash or any other financial asset; or objective indication but also with regard to statistics arising from its past experience. to exchange financial instruments under terms which would be potentially unfavourable to them. Accordingly, the initial value of a financial asset depends on the level of credit risk at its initial recognition. Equity instruments within the Keolis Group relate to non-consolidated investments. The Keolis Group has irrevocably Subsequently, a loss of value is recognised on an asset or a group of financial assets not measured at fair value, in the case of a selected the classification of its equity assets, either in the category of securities whose fair value varies in equity in “Items which will not significant increase of credit risk or where there is an objective be recycled in profit/loss” with no option to recycle in profit/loss indication of impairment arising from one or more events that have occurred since the initial recognition of the asset, and where such (this is the case for strategic investments in entities created under an impairing event has an impact on the estimated future cash public/ private partnerships, and historic investments on the date of the first application), or in the category of securities whose flows from the financial asset or group of financial assets, and if its corresponding variations in fair value pass in the income statement. carrying value is higher than its estimated recoverable value. The valuation of trade receivables is presented in 2.3.2.4.13. DEBT INSTRUMENTS Debt instruments are defined by standard IAS 32 as being financial 2.3.2.4.12 Inventories instruments that do not come within the definition of equity Inventories consist mainly of consumables and miscellaneous goods instruments mentioned above. or supplies used for the maintenance and upkeep of vehicles or intended for resale. The Group analyses the cash flows generated by the instrument and Management’s intentions with regard to these investments, in These inventories are valued at purchase cost. Impairment is order to determine the classification of the financial instruments recognised to reduce the purchase cost (determined using the according to the following three categories: weighted average cost (WAC) method or the First-in, First-out (FIFO) method) to the net realisable value if lower. Pursuant to debt instrument valued at “hold to collect” amortised cost: this 2 IAS 2, the net realisable value is the estimated sale price in the means debt instruments whose cash flows represent interest or normal course of business, less the estimated costs for completion repayment of capital on specific dates (compliance with “basic and realisation of the sale. loan” criteria), and that the Management intends to retain to maturity; 2.3.2.4.13 Trade and other receivables debt instruments valued at the Fair Value by Equity (“Other Items in Comprehensive Income”) recycled in profit/loss at the time of Trade receivables and receivables from other debtors are initially the sale “hold to collect and sell”: these are debt instruments recognised at their fair value which, in most cases is their nominal whose cash flows represent interest or repayment of capital on value, given the generally short payment times. The carrying amount specific dates (compliance with “basic loan” criteria), and that the is subsequently measured where required at the amortised cost Management intends sell in the medium term; using the effective interest rate method, less any impairment allowances. debt instruments valued at Fair Value in “hold to sell” income: these are: When the trade debt is first accounted for, the Group considers the potential expected credit losses not only on the basis of an either debt instruments whose cash flows represent interest or objective indication but also with regard to statistics arising from its repayment of capital on specific dates (compliance with “basic past experience. loan” criteria), and that the Management intends to sell in the short term, or In view of the low credit risk borne by its customers (mainly public authorities), the Keolis Group applies the simplified method for debt instruments where it cannot be contractually asserted trade receivables and states that the expected credit loss on that the cash flows represent interest or repayment of capital recognition of the receivable is negligible. on specific dates.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 25 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
If there is subsequently an objective indication of impairment or a exception applies especially to the income of subsidiaries yet to be risk that the Group may be unable to collect all the contractual distributed, should distribution thereof to shareholders generate amounts (principal plus interest) on the date set in the contractual taxation; if the Group has decided not to distribute profits retained payment schedule, an impairment loss is recognised in the income by the subsidiary in the foreseeable future, no deferred tax liabilities statement. This allowance is equal to the difference between the are recognised. carrying amount and the estimated recoverable future cash flows, discounted at the original effective rate of interest. 2.3.2.4.16 Financial debt and long-term borrowings 2.3.2.4.14 Cash and cash equivalents All borrowings are initially recognised at fair value, less the related This item includes cash, sight deposits and other short-term borrowing costs. Thereafter, they are recognised at amortised cost, deposits as well as other easily convertible liquid instruments with using the effective interest rate method, with the difference negligible risk of a change in value, maturing less than three months between the cost and the redemption value recognised in the from the date of acquisition. income statement over the term of the borrowings. The effective interest rate is the rate used to obtain the original 2.3.2.4.15 Income tax carrying amount of a loan by discounting the future cash inflows or The company GROUPE KEOLIS S.A.S., parent of the tax group, has outflows over the loan’s term. The original carrying amount of the opted for the tax consolidation system in France. loan includes the transaction costs of the operation and any issuance premiums. Other tax consolidation regimes also exist abroad. The effect of these regimes is recognised in the income statement. Most of the When a debt is reimbursed early, any non-amortised costs are French companies subject to corporate income tax and in which the recognised as expenses. company GROUPE KEOLIS S.A.S. holds an equity interest of at In the event that a loan is renegotiated, standard IFRS 9 stage 1 least 95% are included in the tax consolidation group. lays down that the original interest rate is maintained, and an The income tax expense or income includes the current tax immediate impact is recognised in the income statement amounting expense or income and the deferred tax expense or income. Tax is to the difference between the expected contractual flows prior to recognised in profit for the year unless it relates to items that are amendment, and the expected contractual flows after amendment. directly recognised under equity, in which case, the tax is recognised under equity. 2.3.2.4.17 Derivative financial instruments Current tax is the estimated amount of tax due on the taxable profit The Group uses derivative financial instruments to manage for the period. It also includes adjustments to the amount of tax exposure to financial market risks resulting from its operational, payable in respect of previous periods. financial and investment activities: Deferred tax is calculated for each individual entity using the interest rate risk; balance sheet approach, on the temporary differences between the foreign exchange risk; carrying amount of the assets and liabilities and their taxation base, including assets of which the Group has possession under finance commodities risk. lease agreements. The derivative financial instruments are measured and recognised Measurement of deferred tax assets and liabilities depends on at fair value in the balance sheet on the date they are established, whether the Group expects to recover or to pay the carrying amount then on each financial year end date. of the assets and liabilities, under the variable carry-forward method, Fair value is measured by using standard valuation methods and is using the rates of taxation that were adopted or virtually adopted at based on the mid-market conditions commonly used in the markets. the reporting date. A deferred tax asset is only recognised or The market data used is level 2 under the terms of IFRS 13. maintained as an asset to the extent that the Group is likely to benefit from future taxable profits to which the related deductible The treatment of the gains and losses under the fair value temporary difference may be imputed. revaluation depends on whether or not the derivative instrument is considered a hedging instrument and the nature of the hedged The deferred tax assets and liabilities are not discounted. item. Deferred tax assets and liabilities are offset in each taxable entity Certain derivative financial instruments are eligible for one of the when the latter recovers the asset and settles the liability on the three hedge accounting categories defined in IFRS 9: same due date, subject to the following conditions being met: fair value hedge; legally enforceable right to offset; cash flow hedge; intention to settle; net investment hedge. schedule of payments. They are recognised in accordance with hedge accounting rules. Deferred tax liabilities are recognised for all taxable temporary differences, with the exception of certain differences between the The criteria to apply hedge accounting are mainly: values of the Group’s proportionate interests in the net assets of general hedging documentation that describes the Group’s subsidiaries, joint ventures and associates and their tax values. This exposure to the various financial risks and its hedging strategy;
26 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
a hedging relationship clearly established on the date on which qualified as Cash Flow Hedges; each derivative financial instrument is established; based on finance contracts that are still outstanding and whose the use of effectiveness testing to demonstrate the renewal is deemed highly probable; effectiveness of the hedging relationship prospective to its date despite the change in index, the underlying debt instruments will of establishment, and at each financial close. not be redeemed; Interest rate, foreign exchange and commodity derivative financial the change in index on the hedged item will not be a trigger for instruments are entered into with first-class bank counterparties in the disappearance of the hedged item triggering reclassification accordance with the Group’s counterparty risk management policy. into P&L; Consequently, the counterparty risk can be regarded as negligible. none of our finance or hedging contracts were subject to an Derivative financial instruments qualifying for hedge accounting are index change at 31 December 2020. currently accounted for as cash flow hedges. The derivative financial instruments that are not eligible are recognised under Outstanding hedging instruments held by the Keolis Group trading. according to the type of index are as follows: Changes in the intrinsic value of derivative financial instruments Euribor 1m €400 million; treated as cash flow hedges are wholly recognised in equity Euribor 3m €101 million; (reclassifiable reserves). The initial time value (premium) is treated as a cost of the hedging with subsequent changes in value USD Libor 1m €24 million; recognised in OCI. USD Libor 3m €33 million; Applying standard IFRS 9, the element of contango/backwardation, AUD BBSW 3m €9 million. corresponding to the difference in price between the swap futures (or the exercise price for the options) and the spot price, may be INTEREST RATE RISKS RELATING TO VARIABLE-RATE recognised either as a cost of hedging or within financial result: at BORROWINGS 31 December 2020 the element of contango/backwardation for all transactions is treated as a cost of hedging. The exposure of the Group to interest rate risk stems from its financial debt. The Group covers this risk by using derivative The change in fair value of derivatives not qualifying for hedge financial instruments. accounting (for example, the asymmetrical collars) is recognised within financial result. The objective of the risk management is to protect the Group’s financial income from an increase in interest rates, while taking As part of the application of the phase 1 amendment to advantage of a decrease in rates to the greatest extent possible. IFRS 9/IAS 39 relating to the reform of reference rates, which was published in September 2020 and was adopted by the European The interest rate hedging policy implemented consists in favouring Union on 15 January 2020, the hedging relationships of interest fixed rate derivative financial instruments. The management horizon rate instruments are not called into question at 31 December 2020. adopted is usually a rolling five years, but this can be greater if the 2 need to hedge requires it. Hedging relationships are exposed to the following reference rates: The derivative financial instruments used by the Group are standard, AUD BBSW 3 months (not affected by the reform); liquid and market-available: EUR Euribor 1 month; swaps; EUR Euribor 3 months; cap calls; USD Libor 1 month. cap puts to unwind an existing cap or to realise a cap spread; At 31 December 2020, none of our finance or hedging contracts floor puts if tied with cap calls to create a symmetrical or were subject to an index amendment. The period of uncertainty will asymmetrical collar; cease once the financial instrument contracts, whose monitoring and management are centralised at Group level, have been floor calls, in particular to buy back floors that constitute amended to correspond to the Group’s new debt indices. asymmetrical collars; The vast majority of the underlying financing concerned is swaption calls; syndicated and bilateral financing held by GROUPE KEOLIS S.A.S. swaption puts if tied with calls to constitute swaption collars. holding company (on which 77% of the interest rate hedging instruments are backed) and by Keolis S.A. (12%). In addition to this there is financing held by the subsidiaries Keolis America Inc (10%) SENSITIVITY ANALYSIS and Keolis Australia (2%). The sensitivity of income to a risk in variations in interest rates is It should also be noted that 32% of the interest rate hedging linked: instruments held by the Keolis Group have a maturity date before to the net debt at variable interest rates after taking into account 31 December 2021. fair value hedges; All interest rate hedging instruments are covered by the exemption to liabilities for fair value options; provided for in the amendment since all these transactions are: to derivative financial instruments not qualifying as hedges in the sense of the standard IFRS 9.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 27 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
The sensitivity of reclassifiable reserves (equity) to a risk in As of 31 December 2020, the maturities of commodity derivative variations in interest rates is linked to derivatives qualifying as cash financial instruments cover the period from January 2021 to flow hedges. June 2024.
FOREIGN EXCHANGE RISK 2.3.2.4.18 Provisions The Group has put in place intra-group loans denominated in foreign currency and recognised in current accounts. In order to PROVISIONS FOR PENSION AND POST-EMPLOYMENT cover the resulting foreign exchange risk, the Group uses derivative COMMITMENTS (IAS 19 REVISED) financial instruments which allow it to fix the exchange rate of these The Group offers its employees various fringe benefits while they intra-group loans. are in employment or after employment. These benefits arise under The Group also makes net investments in the capital of its foreign the legislation applicable in certain countries and under contractual subsidiaries in local currency. To cover the foreign exchange risks arrangements concluded by the Group with its employees, and are engendered by these investments, the Group uses derivative either defined contribution plans or defined benefit plans. financial instruments in limited amounts. Management’s objective is to protect the balance sheet values of these investments in local (a) Defined contribution plans currency. The foreign exchange hedging policy implemented to achieve this objective consists of maintaining a reference exchange Defined contribution plans are characterised by payments to rate defined for the year. organisations that discharge the employer from any subsequent obligation, with the organisations taking responsibility for paying The derivative financial instruments used by the Group are standard, employees their entitlements. Hence, once the contributions are liquid and market-available: paid, no liability is reported in the Group’s financial statements. forward and futures sales and purchases; foreign exchange swaps; (b) Defined benefit plans call options; Defined benefit plans refer to plans providing post-employment benefits other than defined contribution plans. The Group has a put options in combination with call options to provide symmetric duty to accrue provisions for the benefits to be paid to serving or asymmetric collars. members of its staff, and to pay the benefits of former members of Derivative financial instruments mainly hedge transactions in the its staff. In substance, the actuarial and investment risks lie with the following currencies: AED, CAD, DKK, GBP, NOK, SEK and USD. Group. All of the foreign exchange hedging derivatives held at These plans mainly concern the following: 31 December 2020 mature in 2021. pension commitments: pension annuity plans, retirement gratuities, other retirement commitments and additional pension RAW MATERIALS PRICE RISKS benefits; Due to their transportation activities as operators of light vehicle other long-term benefits: long-service awards. fleets (coaches and buses), the GROUPE KEOLIS S.A.S. subsidiaries must make substantial and regular purchases of diesel. DESCRIPTION OF COMMITMENTS UNDER DEFINED BENEFIT PLANS The Group is consequently exposed to a risk in the fluctuation of the price of diesel, a risk which is partially hedged in the concession Apart from ordinary, statutory schemes, the Group provides, contracts signed with public authorities. For the remaining exposure, according to country and local legislation, retirement gratuity the Group implements a hedging policy using derivative financial schemes (France), defined benefit pension schemes (United instruments whose objective is to minimise the volatility of Group Kingdom and Canada) and pensioners’ health benefit schemes income. (Canada and USA). For this purpose, the Group uses standard, liquid and In France, retirement gratuities paid to the employee on leaving market-available derivative financial instruments, namely: employment are determined according to the national collective labour agreement or the company agreement applying in the swaps; business. The following are the two main collective labour cap calls; agreements applied within the Group: cap puts to unwind an existing cap or to realise a cap spread; “Convention collective des transports publics urbains” floor puts if tied with cap calls to create symmetrical or (CCN_3099) – the national collective labour agreement for asymmetrical collars; urban public transport; floor calls, in particular to buy back floors that constitute “Convention collective des transports routiers” (CCN_3085) – asymmetrical collars. the national road-haulage collective labour agreement. Derivative financial instruments eligible for hedge accounting are These schemes are partly financed by insurance policies. recognised under cash flow hedges as described by IFRS 9. The The valuation is carried out over the actual duration of the public derivative financial instruments that are not eligible are recognised service delegation contracts assuming the transfer of employees to under trading. the new concessionaire, with the exception of GROUPE KEOLIS S.A.S., Keolis S.A., subsidiaries of the Keolis Santé Group, and subsidiaries of the EFFIA Group, for which the valuation is carried out up to the retirement age.
28 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
For the retirement obligations in respect of the British Train OTHER TYPES OF PROVISIONS Operating Companies (TOCs), a local position has been taken with Provisions are accrued where at the end of the reporting period: regard to IAS 19R: there is a present legal or implicit obligation towards third parties an asset representing the pension rights is taken into account at arising from a past event; the start of the franchise; there is a probability that an outflow of resources embodying liabilities are calculated for the length of the current contract. economic benefits will be required to settle this obligation; and These two elements will have zero value at the end of the contract. a reliable estimate can be made of the amount. This treatment is renewed in the case of a renewal of the franchise. In the context of its activity, the Group is generally subject to a contractual obligation to carry out multiyear major maintenance and In the United Kingdom there is a defined benefits pension scheme servicing operations on facilities managed under a public service specific to the rail industry: the Railways Pension Scheme (RPS). agreement. The resulting maintenance and repair costs are This scheme is financed by a trust. The amount of the commitment analysed in accordance with IAS 37 on provisions and, where which falls on the company is according to the length of the applicable, provisions are accrued for major maintenance and franchise. This commitment is shown in the statement of financial servicing and also for lossmaking contracts where the unavoidable position for a net amount which reflects the partial off set of costs incurred to meet the contractual obligation are greater than pension assets and liabilities. the economic benefits of the contract. Annual actuarial evaluations of the commitments of the defined In cases of restructuring, an obligation is accrued in so far as the benefit schemes are carried out each year end primarily by restructuring has been announced and is the object of a detailed independent actuaries. formalised plan or has been started prior to the reporting date. Commitments for pensions, additional pension benefits and Provisions due in more than one year are discounted whenever the retirement gratuities are measured using a method that takes impact is material. account of the projected final end-of-career salaries (termed the Projected Unit Credit Method) on an individual basis, which is based on assumptions of discounting rates and expected long-term yields 2.3.2.4.19 Payments in shares and similar from the funds invested for each country, and on assumptions payments regarding life expectancy, staff turnover, trends in pay, annuity The Group has no share option plans or share purchase warrants revaluations and the discounted value of payable sums. The specific for the benefit of its members of staff. assumptions for each plan take local economic and demographic factors into account. 2.3.2.4.20 Trade payables and other accounts The value entered in the statement of financial position under payable provisions “pensions and other employment benefits” is the Trade payables and other accounts payable are measured at their difference between the discounted value of the future obligations fair value at initial recognition, which in most cases is their nominal 2 and the fair value of the pension plan assets intended to cover value, and thereafter at the amortised cost. Short-term payables are them. Where the result of this calculation is a net commitment, an recognised at their nominal amount unless discounting at the obligation is recognised as a liability in the statement of financial market rate would have a material impact. position. In the event of long payment delays, the suppliers’ debt is When bids are won in France or abroad, the asset representing discounted. pension rights and all other employee benefits recognised at the start of the contract is determined on the basis of the amount of Other payables include deferred revenues, corresponding to income pension liabilities and other employee benefits due over the received for services not yet provided, and investment grants not yet estimated life of the contract. posted in the income statement. Actuarial gains/losses relating to post-employment benefits resulting from experience and changes in actuarial assumptions are 2.3.2.4.21 Revenue and other business income recognised directly in equity in the year in which they are incurred Revenue and other business-related income are measured at the and are offset against the increase or decrease of the obligation. fair value of the consideration received or accrued. They are set out in the statement of comprehensive income. They are measured net of discounts and commercial benefits given, In the income statement, the cost of service earned during the where the service has been provided. No income is recognised financial year is included in operating income. where there exists significant uncertainty as to the recoverability of The interest cost in respect of the discounting of pensions and the consideration receivable or the costs incurred or to be incurred similar obligations, and the income relating to the expected yields in relation to the service, and where the Group remains involved in from the pension plan assets, are recognised under financial managing the income. income and expense. The revenue from urban passenger transport companies is In France long service awards are valued on the same basis as recognised according to the terms of the contract signed with the pension commitments, with the exception of the recognition of public transport authority, taking account of all additional clauses actuarial gains and losses. Actuarial gains and losses are and any vested rights (indexation clauses, etc.). recognised in the income statement.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 29 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
The same applies for revenue from intercity passenger transport 2.3.2.4.26 Financial income companies, and other activities not under contract, recognised Financial expenses include interest on borrowings and financial according to the services provided. debt calculated using the effective interest rate method, the cost of Revenues include fees from value added services arising from the early loan repayments or of cancelling credit lines, the financial Group’s knowhow. The activities concerned, excluding transport, interest not directly attributable to the operating margin and the relate mainly to the management of car parks, airports and bicycles. financial cost of discounting non-current liabilities. Other business-related income covers fees for services consisting Financial income includes income from deposits of cash or cash mainly of revenues classified by the Group as incidental, as well as equivalents and dividends received from non-consolidated the remuneration of concession financial assets. companies. Other financial income and expense include net foreign exchange 2.3.2.4.22 Other operating expenses gains and losses, bank commissions on credit transactions booked Since they are a recurrent feature of the activity, losses or gains on as an expense and their rebilling as income, changes in the fair sales of transport equipment are recognised on a separate line and value of derivative financial instruments when they are to be included in recurring operating profit. recognised in the income statement and are recognised respectively as financial income or expenses on transactions, with the exception of changes in the fair value of hedging derivatives 2.3.2.4.23 Recurring operating profit which are recorded on the same line as the transaction hedged Recurring operating profit corresponds to the whole of the within operating profit. Therefore, any change in the fair value of expenses and income arising from the Group’s recurring operating derivatives, when they are not eligible for hedge accounting, and the activity before financing activities, the earnings of associates, change in value of the ineffective portion for cash flow hedging are activities discontinued or being sold and taxation. recognised in the financial result. All interest on borrowings is recognised as a financial expense as 2.3.2.4.24 Operating profit and when incurred. Operating profit includes recurring operating profit and all transactions not directly related to the normal conduct of business, but that cannot be directly attached to any other item in the income 2.3.3 HIGHLIGHTS OF THE 2020 statement. FINANCIAL YEAR Income and expenses, charges to depreciation and provisions on non-recurring items include all non-recurring operations where The health crisis, marked by restrictive measures on a national scale costs are significant: this applies in particular to offensive bids, between March and the end of December 2020, rendered restructuring costs, disposal gains or losses on assets other than inapplicable certain contractual provisions initially planned for transport equipment, the amortisation of contractual rights and execution under normal conditions of transport activity. In this start-up costs in a new country or zone, and to other items that are context, the support measures granted by the State and the by their nature non-recurring. dialogue established with the public transport authorities have made it possible to not call into question the financial stability of the Effects of changes in scope recognised directly in income include: Keolis Group. direct acquisition costs in the case of a takeover; The adaptation of the contractual clauses made necessary by the effects of revaluations, at fair value on the acquisition date, of exceptional economic situation was characterised by negotiations non-controlling interests previously acquired in the case of an of new contractual provisions with the public transport authorities, acquisition in stages; some of which have been finalised or are in the process of being subsequent earn-outs; finalised. The financial statements, and in particular the valuation of revenue, were prepared on the basis of our best estimates of the income from divestments of holdings which lead to a change in outcome of these negotiations. the method of consolidation as well as, where applicable, the revaluation effects of retained non-controlling interests. In addition, the effects of the health crisis on 2020 and subsequent years were included in the estimates used in the impairment tests on the Group’s assets. 2.3.2.4.25 EBITDA calculation At the end of December 2020, in order to take into account the EBITDA is calculated based on operating profit, plus or minus the effects of COVID-19 on the balance of the contract, the profit or loss on asset disposals, the amounts representing Government of Wales decided to take over the operations of the depreciation and amortisation, increases and reversals of provisions Transport for Wales network (initial contract signed in 2018 for a and the share of subsidy income. period of 15 years; revenue of €362 million in 2020) from Recurring EBITDA corresponds to EBITDA less material 7 February 2021. At the same time, a technical assistance non-recurring items. partnership with KeolisAmey was signed to support Transport for Wales in the development of its mobility offers.
France The Group renewed and won numerous contracts in France, relating to urban areas (notably Dreux, Tarbes-Lourdes, Blois, Châtellerault) and interurban areas (Hérault, Bas-Rhin, Moselle, Oise, Gard, Pas-de-Calais, etc.).
30 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Significant contractual negotiations have been conducted and New Mobilities are continuing with the public transport authorities to mitigate In 2020, Keolis’ desire to innovate was also expressed in terms the impact of the COVID-19 epidemic. of autonomous mobility. The Group has reached a new milestone notably with the launch of our first shuttle without an EFFIA operator on board, in Châteauroux, at the National Shooting The acquisition of MyPark at the end of 2019 produced its Sports Centre. full-year effect in 2020. The health crisis is having a strong impact on EFFIA’s parking Syndicated loan amendment activity, with almost no hourly attendance during the spring On 6 July 2020, the Group signed an amendment to the syndicated lockdown, followed by a moderate recovery before a relapse loan agreement of 12 July 2013. The principal features of this during the re-confinement in the autumn. amendment are: a borrowing envelope unchanged at €900 million; International maturity extended to 27 July 2025. As in France, the COVID-19 crisis has had a severe impact on By virtue of the principle of debt continuity, none of the nominal international operations, notably on contracts exposed to revenue risk. The agreements negotiated with the public sum was reimbursed when the amendment was concluded. transport authorities and the implementation of action and At 31 December 2020, the amount drawn was €600 million and restructuring plans have nevertheless made it possible to the undrawn balance stood at €300 million. significantly limit the adverse impacts. The Group has secured major international contract extensions: New syndicated credit facility rail in Boston (KCS) and Washington (Virginia Rail), bus in On 29 July 2020, the Group set up a new syndicated credit facility Stockholm Sweden, metro in London (DLR) and minority rail of €350 million with some of the pool of partner banks already franchises in the United Kingdom (London & South Eastern participating in the main syndicated credit facility of €900 million. Railway). This facility was contracted for a period of 2 years. The Group won new key contracts in Australia (rail in Adelaide), in the USA (bus in Virginia, California) and in Denmark (bus in At 31 December 2020, the amount drawn was €0 million and the the Copenhagen region). undrawn balance stood at €350 million. The Group has commissioned two of the largest electric bus networks in Europe: a fleet of 246 electric buses in the Netherlands and a fully carbon-free bus network in Norway (138 buses). 2 2.3.4 NOTES TO THE CONSOLIDATED INCOME STATEMENT
2.3.4.1 Staff expenses
(€ million) 31/12/2020 31/12/2019 Wages and social charges (3,152.4) (3,292.4) Taxes on remuneration (72.0) (70.7) Other staff expenses(1) (252.5) (283.0)
TOTAL (3,477.0) (3,646.1)
(1) Other staff expenses include incentive schemes and profit sharing.
(number of people) 31/12/2020 31/12/2019 Managers 4,145 3,963 Supervisory and technical staff 10,423 11,615 Clerical and manual employees, drivers 54,265 55,054
TOTAL 68,833 70,632
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 31 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
2.3.4.2 Operating profit
(€ million) 31/12/2020 31/12/2019 Recurring operating profit (23.5) 173.1 Costs of offensive bids 0.0 (0.7) Profit/(loss) on non-recurring fixed asset disposals 3.9 (1.6) Amortisation of contractual rights and others (132.2) (44.7) of which impairment of goodwill (107.8) (10.3) Other non-recurring items (234.6) (71.7) reorganisation expenses (42.9) (17.0) provisions for contract losses(1) (123.9) (9.4) of which loss on Wales&Borders contract (25.7) 0.0 of which impairment of contractual rights(2) (22.5) (5.9) of which Taxi business in the USA (3.7) (5.9) cessation of business at Driverlite and VTC Le Cab (2.7) (19.8) other (13.2) (13.6) Total non-recurring items (362.9) (118.6)
OPERATING PROFIT BEFORE INVESTMENTS UNDER EQUITY METHOD (386.4) 54.5
(1) Provisions for losses on contracts are mainly composed of a provision for losses on contracts in Germany for €108.3 million. (2) In 2020, certain contractual rights (mainly Australia and France) were impaired following the loss of contracts for an amount of €17 million.
2.3.4.3 EBITDA calculation
(€ million) 31/12/2020 31/12/2019 Operating profit (386.4) 54.5 Net depreciation and other provisions charged 557.3 535.8 Depreciation and provisions on non-recurring items 315.1 86.9 of which amortisation and impairment of contractual rights and trademarks, net 135.1 44.7 cessation of business at VTC Le Cab 2.7 14.7 of which contract losses Germany 108.3 8.0 of which loss on Wales&Borders contract 22.3 0.0 of which restructuring costs for Keolis Mobility Airport 28.9 0.0 allocations and reversals for other provisions 17.9 19.4 Share of reversal of investment grant (6.0) (4.8) Profit/(loss) on non-recurring fixed asset disposals (3.9) 1.6 Profit/(loss) on fixed asset disposals 4.1 (0.9)
EBITDA 480.2 672.9 Non-recurring income and expense(1) 51.6 30.2
RECURRING EBITDA 531.9 703.1
(1) Non-recurring income and expenses include major restructuring expenses and other significant non-recurring items.
32 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.4.4 Share of net income of equity-accounted investments
(€ million) 31/12/2020 31/12/2019 Govia (UK) 13.1 24.0 First/Keolis Transpennine (UK) 2.0 0.1 Other associates (France)(1) (13.7) (1.3) Other associates (International excluding UK) 9.8 0.5
TOTAL ASSOCIATES AND JOINT VENTURES 11.2 23.3
(1) The line “Other associates (France)” is mainly composed of the share of the income of One Park for -€12 million.
2.3.4.5 Financial income
(€ million) 31/12/2020 31/12/2019 Net cost of financial debt (19.8) (16.1) of which cost of gross financial debt (22.0) (17.7) of which income from cash and cash equivalents 2.2 1.6 Other financial income 36.0 1.1 of which revaluation of securities 0.0 0.0 Other financial charges (57.1) (29.9) of which foreign exchange impact (1.3) (2.6) of which revaluation of securities (0.4) (3.9) IFRS 16 “Financial expenses” (45.6) (47.2)
FINANCIAL INCOME (86.5) (92.2)
2.3.4.6 Tax 2 The tax charge breaks down as follows:
(€ million) 31/12/2020 31/12/2019 Current tax expense (37.2) (65.6) Tax payable for the period (41.1) (69.6) Adjustment recognised during the period in respect of prior years’ current tax payable 3.9 4.1 Deferred tax income 19.8 16.1 Deferred tax for the period 27.2 24.7 Impairment loss on deferred tax asset (7.4) (8.7)
TAX EXPENSE FOR THE FINANCIAL YEAR (17.4) (49.5)
In 2020, the Group decided to present a reconciliation of its effective rate on the basis of the rate of 32.02% (in 2019, the Group had elected to present a reconciliation of its effective rate on the basis of the rate of 34.43%).
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 33 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
The reconciliation between the legal rate of taxation in France and the effective rate is as follows:
31/12/2020 31/12/2019 as a % in €m as a % in €m Profit after tax from continuing operations (479.1) (63.9) Neutralisation of share of profit/(loss) from associates (11.2) (23.3) Neutralisation of corporation tax 17.4 49.5 Profit before tax and before share of profit/(loss) from associates (472.8) (37.7) Theoretical tax using the legal rate of French taxation 32.02% 151.4 34.43% 13.0 French/foreign taxation rate differences (5.06%) (23.9) (4.21%) (1.6) Effect of reduced rates and changes in tax rates (0.94%) (4.5) 0.47% 0.2 Adjustment in respect of tax for prior financial years 0.82% 3.9 10.74% 4.1 Other permanent differences (3.91%) (18.5) (6.55%) (2.5) Tax credit 0.21% 1.0 2.32% 0.9 Effect of direct taxation (CVAE) (4.17%) (19.7) (53.02%) (20.0) Unrecognised deferred tax assets (22.65%) (107.1) (115.49%) (43.6)
EFFECTIVE RATE OF TAXATION (3.69%) (17.4) (131.29%) (49.5)
The unrecognised deferred tax assets in 2020 mainly relate to Germany, the United Kingdom, North America, the Netherlands and France. Deferred tax included within non-current assets and liabilities breaks down as follows:
(€ million) 31/12/2020 31/12/2019 Deferred tax assets 92.3 46.0 Less than one year 19.0 17.1 More than one year 73.3 28.9 Deferred tax liabilities (159.4) (101.6) Less than one year (18.2) (19.2) More than one year (141.2) (82.3)
Unused losses amounted to €499.1 million at 31 December 2020 At each financial year end, the Group assesses for each tax entity of which €450 million were not recognised, taking into account the probability of its having taxable profits against which to offset its assumptions on the usability of these losses within available time deferred tax assets or to use available unrecognised tax credits. In limits, which would represent a deferred tax asset of €122.4 million. making this assessment, the Group takes account of, among other The recognition of tax loss carryforwards is consistent with the factors, past and present taxable profit, and the companies’ budgets used for impairment tests. prospects for making future taxable profits.
The change in the net deferred taxes recorded in the statement of financial position breaks down as follows:
(€ million) Net position
Opening balance on 1 January 2020 (55.6) Recognised in equity 4.6 Recognised in profit for the year 19.9 Effect of changes in consolidation scope (35.5) Foreign exchange translation differences and other movements (0.4)
CLOSING BALANCE ON 31 DECEMBER 2020 (67.0)
34 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
(€ million) Net position
Opening balance on 1 January 2019 (58.7) Recognised in equity (13.5) Recognised in profit for the year 16.7 Effect of changes in consolidation scope 2.4 Foreign exchange translation differences and other movements (2.5)
CLOSING BALANCE ON 31 DECEMBER 2019 (55.6)
Net deferred taxes by type are as follows:
(€ million) 31/12/2020 31/12/2019 Purchase accounting asset revaluations (132.3) (102.8) Employee benefits 31.7 20.6 Tax losses 12.6 17.1 Other 20.9 9.6 Closing balance on 31 December (67.0) (55.6)
2.3.5 NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2.3.5.1 Goodwill
Changes in carrying amount
Continental North (€ million) France Europe Australia UK America Total 2 At 1 January 2020 804.5 269.4 32.1 187.2 31.6 1,324.7 Acquisition(1) - (98.0) - - - (98.0) Disposals ------Impairment loss for the period(2) - (5.5) - (85.3) (16.9) (107.8) Foreign exchange translation differences and other - 0.2 0.2 (10.0) (2.3) (11.9) At 31 December 2020 804.5 166.1 32.3 91.8 12.3 1,107.0 Of which gross value 804.5 173.6 32.5 177.1 48.1 1,235.9 Of which accumulated amortisation and impairment charges - (7.6) (0.2) (85.3) (35.8) (128.9)
(1) The change in acquisitions in Continental Europe concerns the recognition of goodwill related to the parking subsidiaries in Belgium, and the finalisation of the goodwill allocation exercise. (2) Impairment losses relate to the effects of the health crisis on tourism activities in Belgium, intercity activities in Canada and rail activities in the UK.
Continental North (€ million) France Europe Australia UK America Total At 1 January 2019 810.0 112.1 31.6 178.0 40.0 1,171.7 Acquisition(1) 1.5 159.7 - - - 161.2 Disposals ------Impairment loss for the period(2) - - - - (10.3) (10.3) Foreign exchange translation differences and other (6.9) (2.4) 0.4 9.1 1.8 2.1 At 31 December 2019 804.5 269.4 32.1 187.2 31.6 1,324.7 Of which gross value 804.5 271.4 32.3 187.2 52.2 1,347.5 Of which accumulated amortisation and impairment charges - (2.0) (0.2) - (20.6) (22.8)
(1) The change in acquisitions in France mainly relates to acquisitions in medical transport and in Belgium; it essentially relates to parking. (2) Impairments over the period amount to €10.3 million. The impairment of assets in North America reflects both the change in development strategy in the US and the difficulties encountered in the taxi business linked to the impact of regulatory changes.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 35 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Impairment testing The main assumptions made for impairment tests are as follows:
CFH DISCOUNT RATE Cash flows are from the main strategic plan drawn up over 5 years The discount rate used is based on the average cost of capital and approved by the management bodies. Beyond this time-frame, reflecting current market assessments of the time value of money the flows are extrapolated by applying a long-term growth rate and the risks specific to the tested asset. which is close to the long-term inflation expected by the Group, The average weighted cost of capital has been determined by a within the limit of the duration of the contract or to perpetuity. The combination of two methods: the “Capital Asset Pricing Model” discounting of flows is carried out using rates appropriate to the (CAPM) method and the average weighted cost of capital method nature of the activities (see paragraph below). for comparable listed companies. Taking into account these factors, the costs of capital used to discount future cash flows are as follows:
WACC 31/12/2020 31/12/2019 Groupe Keolis 5.76% 4.81% United Kingdom 6.30% 5.00% Sweden 5.40% 4.40% Canada 6.10% 4.40% Denmark 5.40% 4.40% Netherlands 5.40% 4.40% Belgium 6.00% 5.10% Australia 6.20% 5.90% Norway 5.40% 4.40% United States 5.90% 5.50% Germany 5.40% 4.40% France 5.90% 5.00%
These discount rates are rates after tax applied to cash flows after tax. Use thereof results in recoverable amounts identical to those obtained by using pre-tax rates applied to non-taxed cash flows, in accordance with IAS 36.
LONG-TERM GROWTH RATES The growth rates applied to the main cash-generating units or groups thereof are as follows:
Infinite growth rates 31/12/2020 31/12/2019 Groupe Keolis 1.64% 2.00% United Kingdom 2.00% 2.00% Sweden 1.60% 2.00% Canada 1.60% 2.00% Denmark 1.60% 2.00% Netherlands 1.60% 2.00% Belgium 1.60% 2.00% Australia 1.60% 2.00% Norway 1.60% 2.00% United States 1.60% 2.00% Germany 1.60% 2.00% France 1.60% 2.00%
36 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
SENSITIVITY OF RECOVERABLE AMOUNTS “Belgium” and “Canada” CGUs for which an impairment has been booked for the period. Sensitivity tests on groups of cash-generating units were carried out by varying the long-term growth rates or the WACC (weighted A 0.5 point increase in the discount rate leaves a positive margin average cost of capital). between the value in use and the carrying amount for all of the cash generating units with the exception of the “United Kingdom”, A 0.5 point fall in the perpetual growth rate leaves a positive margin “Belgium” and “Canada” CGUs for which an impairment has been between the value in use and the carrying amount for all of the cash booked for the period. generating units with the exception of the “United Kingdom”,
2.3.5.2 Other intangible assets
Authorisations, Contractual Concession Contract (1) (€ million) Patents and Software Trademarks rights assets assets Other Total At 1 January 2020 128.4 53.0 220.1 111.6 27.9 49.9 590.9 Acquisitions 24.6 - - - 0.2 20.2 45.1 Assets disposed of and scrapped (5.4) - - - - (0.6) (6.0) Net depreciation, amortisation and impairment (36.6) - (48.5) (20.1) (3.6) (20.8) (129.6) Changes in scope (0.1) - 133.2 - - 4.2 137.3 Foreign exchange translation differences and other 15.2 (0.0) (0.3) 17.6 2.5 (21.1) 13.8 At 31 December 2020 126.1 53.0 304.5 109.1 27.0 31.7 651.4 Of which gross value 254.0 69.0 685.0 177.3 49.0 100.2 1,334.4 Of which cumulative depreciation, amortisation and impairment losses (127.8) (16.0) (380.5) (68.2) (22.0) (68.5) (683.1)
Authorisations, Contractual Concession Contract (1) (€ million) Patents and Software Trademarks rights assets assets Other Total 2 At 1 January 2019 121.1 55.8 246.8 76.0 28.7 52.4 580.7 Acquisitions 28.9 - - - 8.4 17.4 54.7 Assets disposed of and scrapped (2.9) - - - - (1.8) (4.6) Net depreciation, amortisation and impairment (42.6) (2.9) (27.2) (17.0) (9.9) (8.1) (107.7) Changes in scope 0.4 - (0.1) - - 5.0 5.3 Foreign exchange translation differences and other 23.4 0.1 0.7 52.6 0.7 (15.1) 62.4 At 31 December 2019 128.4 53.0 220.1 111.6 27.9 49.9 590.9 Of which gross value 321.2 69.2 555.8 159.7 50.6 101.0 1,257.4 Of which cumulative depreciation, amortisation and impairment losses (192.7) (16.2) (335.7) (48.1) (22.7) (51.1) (666.6)
(1) See note 2.3.2.4.7 for the definition of contract assets.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 37 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
2.3.5.3 Property, plant and equipment
Land & Equipment Transport PPE under (€ million) Developments Buildings and tooling equipment construction Other Total At 1 January 2020 42.9 305.6 78.7 371.2 33.6 121.6 953.7 Acquisitions 6.5 24.9 22.8 43.3 35.2 68.0 200.7 Assets disposed of and scrapped (1.0) (0.8) (0.6) (10.0) (0.3) (0.9) (13.6) Net depreciation and amortisation (1.5) (31.1) (24.1) (106.0) - (78.5) (241.3) Changes in scope (0.0) 0.2 (0.2) (0.7) (0.1) (0.3) (1.1) Foreign exchange translation differences and other movements 0.4 0.4 2.5 8.6 (18.5) (2.4) (8.9) At 31 December 2020 47.4 299.3 79.0 306.5 49.9 107.5 889.5 Of which gross value 61.2 612.7 238.1 1,015.0 49.9 335.2 2,312.1 Of which cumulative depreciation, amortisation and impairment losses (13.8) (313.4) (159.1) (708.5) - (227.7) (1,422.5)
Land & Equipment Transport PPE under (€ million) Developments Buildings and tooling equipment construction Other Total At 1 January 2019 38.2 249.2 66.5 513.6 54.0 82.1 1,003.6 Acquisitions 3.6 23.3 19.5 68.0 46.2 59.5 220.1 Assets disposed of and scrapped (0.5) (3.0) (0.9) (30.1) (0.1) (1.3) (35.8) Net depreciation and amortisation (1.9) (28.1) (18.8) (84.6) - (20.0) (153.4) Changes in scope 1.8 25.9 2.9 23.8 0.1 3.8 58.4 Foreign exchange translation differences and other movements 1.7 38.4 9.6 (119.5) (66.7) (2.6) (139.1) At 31 December 2019 42.9 305.6 78.7 371.2 33.6 121.6 953.7 Of which gross value 55.4 589.9 219.4 1,041.1 33.6 288.0 2,227.4 Of which cumulative depreciation, amortisation and impairment losses (12.4) (284.3) (140.7) (669.8) - (166.4) (1,273.7)
38 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.5.4 Rights of use
Assets
Railway Road Land and transport transport Other (€ million) buildings equipment equipment equipment Total At 1 January 2020 514.5 495.1 536.2 16.0 1,561.9 New contracts 27.1 10.2 192.0 4.5 233.9 Assets disposed of and scrapped - (0.3) (0.3) - (0.6) Net depreciation, amortisation and impairment (88.8) (66.5) (156.0) (5.2) (316.6) Changes in scope (7.8) - (23.9) (0.0) (31.7) Foreign exchange translation differences and other 18.1 5.0 1.7 0.1 24.9 At 31 December 2020 463.1 443.4 549.8 15.4 1,471.7 Of which gross value 620.6 593.5 1,004.1 22.1 2,240.4 Of which cumulative depreciation, amortisation and impairment losses (157.6) (150.1) (454.3) (6.7) (768.7)
Liabilities
IFRS 16 Lease IFRS 16 Lease (€ million) liabilities > 1 year liabilities < 1 year Total At 1 January 2020 1,325.0 265.9 1,590.9 New liabilities 225.3 8.6 233.8 Repayments of lease obligations (0.0) (293.0) (293.0) Changes in scope (36.0) (8.8) (44.8) Foreign exchange translation differences and other (247.5) 271.1 23.6 At 31 December 2020 1,266.8 243.7 1,510.6
Assets 2 Railway Road Land and transport transport Other (€ million) buildings equipment equipment equipment Total At 1 January 2019(1) 570.6 508.8 519.9 19.6 1,618.9 New contracts 23.1 45.8 155.4 2.3 226.5 Assets disposed of and scrapped - (0.1) (0.1) 0.0 (0.2) Net depreciation, amortisation and impairment (84.3) (65.7) (162.9) (5.8) (318.8) Changes in scope (0.1) - 29.4 - 29.4 Foreign exchange translation differences and other 5.2 6.4 (5.5) 0.0 6.1 At 31 December 2019 514.5 495.1 536.2 16.0 1,561.9 Of which gross value 601.9 584.7 889.7 22.5 2,098.8 Of which cumulative depreciation, amortisation and impairment losses (87.4) (89.6) (353.4) (6.4) (536.9)
(1) The right-of-use assets amounting to €1,619 million of which €1,447 million in operational leases and €152 million in finance leases correspond to the first application of IFRS 16 on 1 January 2019.
Liabilities
IFRS 16 Lease IFRS 16 Lease (€ million) liabilities > 1 year liabilities < 1 year Total At 1 January 2019 1,334.6 282.7 1,617.4 New liabilities 216.6 9.9 226.5 Repayments of lease obligations - (297.0) (297.0) Changes in scope 29.3 (0.5) 28.8 Accrued interest on lease obligations - 3.8 3.8 Foreign exchange translation differences and other (255.5) 266.9 11.4 At 31 December 2019 1,325.0 265.9 1,590.9
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 39 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
2.3.5.5 Investments under the equity method The Group holds several investments in joint ventures and associates notably in the United Kingdom, consolidated under the equity method. The changes in the value of these investments during the financial year can be explained by the items below:
(€ million) 31/12/2020 31/12/2019 Value at 1 January 72.4 69.5 Net profit attributable to Group 11.2 23.3 Impairment - - Profit/(loss) from investments under equity method 11.2 23.3 Changes in fair value impacting equity 3.9 (0.0) Foreign exchange translation difference (2.4) 1.5 Dividends paid (7.6) (22.3) Changes in consolidation scope & other (0.8) 0.4 Value at 31 December 76.6 72.4
The financial elements relating to significant joint ventures are presented below at 100% of their values.
31/12/2020 31/12/2019 e es is l iari es eo S k d i K
iat s / bs u tal s nePar ther
AEME irst ranspennin o Govia & subsidiaries SAEMES First / Keolis First / Keolis Transpennine Others & OnePark Total associates Total (€ million) F T S O O T assoc Non-current assets 402.4 0.0 247.3 0.0 NA NA 694.1 (0.0) 222.0 21.6 NA NA Net WCR (149.9) 0.0 (140.0) (0.0) NA NA (348.9) 7.1 (100.6) 0.0 NA NA Current assets 965.1 2.0 17.5 0.0 NA NA 936.9 12.8 28.5 0.0 NA NA
Total assets 1,367.5 2.0 264.8 0.0 1,631.0 12.8 250.5 21.6 Equity 114.3 0.0 73.1 0.0 NA NA 89.4 7.2 77.1 21.6 NA NA of which net profit 37.3 4.4 (3.9) (33.3) NA NA 68.5 0.1 1.3 (5.3) NA NA Current liabilities 1,115.1 2.0 157.5 0.0 NA NA 1,285.8 5.7 129.2 0.0 NA NA Non-current liabilities 138.1 0.0 34.3 0.0 NA NA 255.7 (0.0) 44.3 0.0 NA NA
Total liabilities 1,367.5 2.0 264.8 0.0 NA NA 1,631.0 12.8 250.5 21.6 NA NA Net assets 114.3 0.0 73.1 0.0 NA NA 89.4 7.2 77.1 21.6 NA NA Reconciliation of financial data with value of investments under the equity method: Group share of net assets 40.0 0.0 24.3 0.0 12.2 76.6 31.3 3.2 25.6 8.0 4.1 72.4 Goodwill Other Net book value of investments 40.0 0.0 24.3 0.0 12.2 76.6 31.3 3.2 25.6 8.0 4.1 72.4
With regard to Govia’s activities in the UK, operating companies are companies cannot be qualified as transferable to the Go-Ahead required under contract to retain a level of liquidity such that the group, the majority shareholder in Govia. As such, the net cash public service can be guaranteed in the event of the operator’s position at year end is presented in net working capital. insolvency. This requires the operator to maintain a Liquidity However, the net assets held by the Keolis Group in the UK in Maintenance Ratio. The required amount is equal to a certain Govia, amounting to €40.0 million at 31 December 2020, are fully number of weeks of direct costs relating to the activity and must be available. maintained until the end of the franchise. This requirement means that the majority of the cash held by Govia under operational
40 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.5.6 Current and non-current financial assets
Equity instruments Debt instruments measured at measured at “Fair value” “Fair value” through “OCI” amortised “Fair value” Financial At 31 December 2020 through not recyclable cost through through Derivative assets for (€ million) profit/loss in P&L profit/loss Profit/loss assets concessions Total Gross value 28.1 13.1 83.0 1.6 251.1 376.9 Impairment - - (42.5) - - (6.1) (48.6) Net value 28.1 13.1 40.6 - 1.6 244.9 328.3 Due in less than one year 10.9 1.6 12.5 Due in more than one year 28.1 13.1 29.7 - - 244.9 316.0
Equity instruments Debt instruments measured at measured at “Fair value” amortised “Fair value” through “OCI” cost “Fair value” Financial At 31 December 2019 through not recyclable through through Derivative assets for (€ million) profit/loss in P&L profit/loss Profit/loss assets concessions Total Gross value 18.3 16.5 37.5 0.2 0.7 87.1 160.3 Impairment ------Net value 18.3 16.5 37.5 0.2 0.7 87.1 160.3 Due in less than one year 16.4 0.8 17.2 Due in more than one year 18.3 16.5 21.1 0.2 (0.1) 87.1 143.2
As of 31 December 2020, equity instruments measured at fair value through profit or loss mainly comprise Via Transportation, Navya and Blue Technologies Limited securities. The Navya shares have been valued on the basis of the stock market price on 31 December 2020 (€3.89 per share). 2 2.3.5.7 Inventories
(€ million) 31/12/2020 31/12/2019 Gross inventories 150.4 144.8 Impairment (1.6) (2.2)
NET 148.8 142.6
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 41 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
2.3.5.8 Trade and other receivables
(€ million) 31/12/2020 31/12/2019 Trade receivables 555,9 735.2 Advances and down payments on orders 28.0 12.4 Impairment of accounts receivable (18.4) (16.1)
Trade receivables 565.5 731.5 Receivables from staff and welfare agencies 15.6 8.8 Central government and local authorities 199.0 235.0 Prepaid Expenses 56.9 65.4 Other(1) 244.8 247.7 Impairment of other debtors (1.1) (4.8)
Other receivables 515.2 552.2
TOTAL 1,080.7 1,283.7
(1) Other receivables for 2020 include €78 million representing the Australian Department for Transport’s guarantee on extra holiday rights; these rights appear under liabilities as payables to staff. These same receivables totalled €71 million in 2019.
2.3.5.9 Cash and cash equivalents
Analysis by type
(€ million) 31/12/2020 31/12/2019 Cash 514.2 380.9 Short term investments 1.3 1.2 Total recognised as assets 515.5 382.1 Including cash to be kept available locallyy(1) 40.5 48.6 Bank overdrafts and current account liabilities (140.9) (206.7)
NET CASH AND CASH EQUIVALENTS 374.6 175.4
(1) In the United Kingdom, the operating companies are required by contract to maintain a certain level of liquidity such that the public service can be guaranteed in the event of the operator’s insolvency. This requires the operator to maintain a “Liquidity Maintenance Ratio” or “Financial Ratio”. The required amount is equal to a certain number of weeks of direct costs relating to the activity, or an amount sufficient to meet the “Financial Ratio”, and must be maintained until the end of the franchise.
Cash equivalents include highly liquid short-term investments that The Group considers that its undertakings for collective investment are easily convertible into a known amount of cash and present no in transferable securities classified by the French Financial Markets significant risk of loss of value. Authority (Autorité des Marchés Financiers) as “euro money” meet the criteria enabling it to be classified as cash equivalents. No transaction of this type was conducted on 31 December 2020.
2.3.5.10 Equity
Share capital and share premium Distributable reserves and earnings At 31 December 2020, the share capital was €237.9 million, At 31 December 2020, GROUPE KEOLIS S.A.S. had 2020 comprising 180,218,865 ordinary shares with a nominal value of accounting income of -€29 million and retained earnings of one euro and thirty-two cents each, fully paid up. €89 million prior to allocation of 2020 income. Distributable profit at The share premium amounted to €273.2 million. 31 December 2020 was therefore €60 million. The Group’s borrowing contracts do not include any mandatory gearing ratio clauses. Reserves attributable to non-controlling interests The main reserves attributable to non-controlling interests come from the following subsidiaries: Keolis Downer, KDR Gold Coast Treasury shares Pty Ltd, KDR Victoria Pty Ltd, Australian Transit Enterprises Pty Ltd On 31 December, all of GROUPE KEOLIS S.A.S.’s treasury shares, and Keolis Commuter Services LLC. totalling €2.3 million, were cancelled.
42 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Foreign exchange translation reserve The following were the main exchange rates against the euro used for the 2020 and 2019 financial years:
2020 2019
(For 1 euro) Average rate Closing rate Average rate Closing rate Pound Sterling 0.889704 0.899030 0.877771 0.850800 Australian Dollar 1.654919 1.589600 1.610881 1.599500 Danish Crown 7.454214 7.440900 7.466064 7.471500 Swedish Crown 10.484753 10.034300 10.589081 10.446800 Norwegian Crown 10.722785 10.470300 9.851086 9.863800 US Dollar 1.142196 1.227100 1.119475 1.123400 Canadian Dollar 1.529993 1.563300 1.485477 1.459800 Indian Rupee 84.639155 89.660500 78.836140 80.187000
2.3.5.11 Financial debt and long-term borrowings
Financial debt breakdown by type In 2020, three lines of financing were put in place: at the level of KSA: an amortisable fixed-rate loan of €8 million, at the level of GKSAS: a syndicated variable-rate loan of set up and drawn down on 6 April 2020 for a period of three €350 million, set up on 29 July 2020 for a period of two years. years;
At 31 December 2020 Amounts in the statement of (€ million) financial position Maturity Interest rates Derivatives 11.1 2021 - Loans 12.8 2021 Fixed rates 2 Loans 137.9 2021 Variable rates
Sub-total, less than 1 year 161.8 Employee profit sharing 0.7 2022-2024 Fixed rates Loans 103.2 2022-2032 Fixed rates Loans 1,185.9 2022-2033 Variable rates
Sub-total, more than one year 1,289.8
TOTAL (EXCLUDING FINANCIAL LIABILITIES FOR CONCESSIONS) 1,451.5
At 31 December 2019 Amounts in the statement of (€ million) financial position Maturity Interest rates Derivatives 9.,9 2020 - Loans 15.1 2020 Fixed rates Loans 111.9 2020 Variable rates
Sub-total, less than one year 136.9 Employee profit sharing 0.6 2021-2023 Fixed rates Derivatives (0.1) - Loans 119.0 2021-2031 Fixed rates Loans 1,078.7 2021-2032 Variable rates
Sub-total, more than one year 1,198.2
TOTAL 1,335.1
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 43 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
At 31 December 2020, the amount drawn under the syndicated loan arranged on 12 July 2013 and amended on 11 June 2015, 29 February 2016, 27 July 2018, 17 June 2019 and 6 July 2020 stood at €600 million. The amount drawn down for the second syndicated loan set up on 29 July 2020 is €0.
Financial debt breakdown by maturity 2026 Maturity (€ million) 2021 2022 2023 2024 2025 to 2031 > 2031 Total Lease obligations 243.7 236.5 183.9 145.6 135.5 366.1 199.2 1,510.6 Financial debt excluding financial liabilities for concessions 161.8 406.0 78.4 17.2 672.3 98.3 17.6 1,451.5
Mandatory financial ratios The Group’s contracts, and those of its subsidiaries, also include In the documentation for the syndicated loan, one financial ratio is cross acceleration clauses. If the Group or, under certain conditions, to be complied with on a six-monthly basis (the “Leverage ratio”). its largest subsidiaries do not comply with their commitments, However, an amendment was made to cancel the test date of lending institutions may claim default and early reimbursement of a December 2020. The next test date will be June 2021. major portion of the Group’s debt. The Leverage ratio corresponds to the ratio between the adjusted Taking account of the spread of this financing among various net debt and the adjusted recurring EBITDA. subsidiaries and the quality of the Group’s liquidity resources, the existence of these clauses does not create a material risk to the The aggregations used to calculate the financial ratio strictly comply Group’s financial situation. with the definitions set out in the Syndicated Loan documentation. In 2014 the Group introduced monitoring of these financial ratios relating to the financing of the Group and its subsidiaries in order to anticipate any adverse change to the ratios.
Statement of changes in financial debt and lease obligations Foreign Changes exchange million) 31/12/2019 Increase Decrease in scope impact Other 31/12/2020 Lease obligations 265.9 53.6 (338.1) 0.2 (1.2) 263.3 243.7 Derivatives 9.9 - - - (0.1) 1.3 11.1 Financial liabilities for concessions - 1.3 - - - - 1.3 Loans 127.0 56.4 (46.4) (1.2) (2.0) 16.9 150.7
Sub-total, less than one year 402.8 111.3 (384.4) (1.1) (3.3) 281.5 406.8 Lease obligations 1,325.0 225.3 (0.0) (26.6) (12.0) (244.9) 1,266.8 Employee profit sharing 0.6 - - - - 0.1 0.7 Derivatives (0.1) - - - - 0.1 - Financial liabilities for concessions - 146.2 (3.6) - (1.0) - 141.5 Loans 1,197.7 463.7 (343.7) 0.1 (9.6) (19.1) 1,289.1
Sub-total, more than one year 2,523.2 835.1 (347.3) (26.5) (22.6) (263.8) 2,698.1
TOTAL 2,926.0 946.4 (731.7) (27.6) (25.9) 17.7 3,104.9
44 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.5.12 Assets and liabilities by category The following table shows the balance sheet carrying amount and fair value by accounting category of assets and liabilities defined in accordance with the IFRS 9 standard:
Financial instruments Fair value 31/12/2020 Net book value of Loans, Balance sheet class in At fair receivables, At fair item and statement value debt at value Qualified Net instrument class Non- of financial through amortised through as financial (€ million) current Current position equity cost profit/loss hedging Level 1 Level 2 Level 3 debt Debt instruments 29,7 10,9 40,5 - 40.5 0.1 - - 40.5 0.0 40,5 Financial assets for concessions 244.9 - 244.9 - 244.9 - - - 244.9 - -
Sub-total of loans and receivables 274.6 10.9 285.5 - 285.4 0.1 - - 285.5 0.0 40.5 Equity instruments 41.2 - 41.2 13.1 - 28.0 - 15.1 0.9 25.2 Positive fair value of hedging instruments - 0.1 0.1 - - - 0.1 - 0.1 - 0.1 Positive fair value of trading derivatives - 1.5 1.5 - - 1.5 - - 1.5 - 1.5 Cash and cash equivalents 515.5 515.5 - - 515.5 - - 515.5 - 515.5
TOTAL CURRENT AND NON-CURRENT FINANCIAL ASSETS 316.0 528.0 843.8 13.1 285.4 545.1 0.1 15.1 803.4 25.2 557.6 Bank borrowings 1,286.6 150.7 1,437.2 - 1,437.2 - - - 1,437.2 - 1,437.2
Sub-total of borrowings 1,289.1 150.7 1,439.7 - 1,437.2 2.5 - - 1,439.7 - 1,439.7 of which: - - measured at amortised cost 1,286.6 150.7 1,437.2 - 1,437.2 - - - 1,437.2 - 1,437.2 measured according to the “fair value” option 2.5 - 2.5 - - 2.5 - - 2.5 - 2.5 Negative fair value of 2 hedging instruments - 10.8 10.8 - - - 10.8 - 10.8 - 10.8 Negative fair value of trading derivatives - 0.3 0.3 - - 0.3 - - 0.3 - 0.3 Financial debt and long-term borrowings 1,289.1 161.8 1,450.8 - 1,437.2 2.8 10.8 - 1,450.8 - 1,450.8 Bank loans and overdrafts - 140.9 140.9 - 140.9 - - - 140.9 - 140.9
TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES 1,289.1 302.7 1,591.8 - 1,578.1 2.8 10.8 - 1,591.8 - 1,591.8 Group net financial debt 1,259.4 (225.3) 1,034.1 - 1,537.6 (514.2) 10.7 - 1,034.2 (0.0) 1,034.1
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 45 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Financial instruments Fair value 31/12/2019 Net book value of Loans, Balance sheet class in At fair receivables, At fair item and statement value debt at value Qualified Net instrument class Non- of financial through amortised through as financial (€ million) current Current position equity cost profit/loss hedging Level 1 Level 2 Level 3 debt Debt instruments 21,2 16,4 37,7 - 37,5 0,2 - 0,0 37,7 0,0 37,7 Financial assets for concessions 87.1 - 87.1 - 87.1 - - - 87.1 -
Sub-total of loans and receivables 108.4 16.4 124.8 - 124.6 0.2 - 0.0 124.9 0.0 37.7 Equity instruments 34.8 - 34.8 16.5 - 18.3 - 3.9 21.7 9.1 Positive fair value of hedging instruments (0.1) 0.1 0.0 - - - 0.0 - 0.0 - 0.0 Positive fair value of trading derivatives - 0.7 0.7 - - 0.7 - - 0.7 - 0.7 Cash and cash equivalents 382.1 382.1 - - 382.1 - 0.0 382.1 - 382.1
TOTAL CURRENT AND NON-CURRENT FINANCIAL ASSETS 143.2 399.3 542.3 16.5 124.6 401.2 0.0 3.9 529.3 9.1 420.5 Bond borrowings 2.5 - 2.5 - - 2.5 - - 2.5 - 2.5 Bank borrowings 1,195.2 122.5 1,317.7 - 1,317.7 - - - 1,317.7 - 1,317.7
Sub-total of borrowings 1,197.7 122.5 1,320.2 - 1,317.7 2.5 - - 1,320.2 - 1,320.2 of which: - measured at amortised cost 1,195.2 122.5 1,317.7 - 1,317.7 - - - 1,317.7 - 1,317.7 measured according to the “fair value” option 2.5 0.0 2.5 - - 2.5 - - 2.5 - 2.5 Negative fair value of hedging instruments (0.1) 9.1 9.1 - - - 9.1 - 9.1 - 9.1 Negative fair value of trading derivatives - 0.7 0.7 - - 0.7 - - 0.7 - 0.7 Financial debt and long-term borrowings 1,197.6 132.4 1,330.0 - 1,317.7 3.3 9.1 - 1,330.0 - 1,330.0 Bank loans and overdrafts - 211.2 211.2 - 211.2 - - (0.0) 211.2 - 211.2
TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES 1,197.6 343.6 1,541.3 - 1,528.9 3.3 9.1 (0.0) 1,541.2 - 1,541.3 Group net financial debt 1,176.5 (55.7) 1,120.8 - 1,491.4 (379.7) 9.1 (0.0) 1,120.7 (0.0) 1,120.8
46 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.5.13 Risk management and financial derivatives The Group uses derivative financial instruments to manage non-eligible for hedge accounting and recognised under trading. exposure to financial market risks resulting from its operational, Fair value is measured by using standard valuation methods and is financial and investment activities: based on the mid-market conditions commonly used in the markets. interest rate risk; The market data used is level 2 under the terms of IFRS 13. foreign exchange risk; The impacts on performance and the financial position of derivative commodities risk. financial Instruments are presented in the table below: As at 31 December 2020, the Group held derivative financial instruments: eligible for hedge accounting and recognised as cash flow hedges (CFH);
Latent Fair value financial Financial Premium (excl. Changes in equity income/ income Fair value to be premium) (reclassifiable reserves) (expense) generated (excl. amortised Underlying Hedge at premium) at asset accounting 31/12/2019 Changes(1) Reclassified(2) Changes(3) Changes(4) at 31/12/2020 31/12/2020 Interest rates CFH (9.1) (4.7) 5.1 (2.0) - (10.7) (1.3) Interest rates Trading (0.6) - - 0.3 - (0.2) -
Total interest rates (9.6) (4.7) 5.1 (1.7) - (10.9) (1.3) FX CFH - - 2.3 (2.3) - - - FX Trading 0.5 - - - 0.9 1.4 -
Total currency 0.5 - 2.3 (2.3) 0.9 1.4 - Commodities CFH (0.5) (17.7) 16.2 0.1 - (1.9) 0.0 Commodities Trading (0.0) - - - (7.4) (7.4) -
Total commodities (0.6) (17.7) 16.2 0.1 (7.4) (9.4) 0.0 2 TOTAL (9.7) (22.4) 23.5 (3.9) (6.4) (18.9) (1.3)
(1) of changes in fair values which have impacted the equity account (reclassifiable reserves) for the financial year. (2) Reclassifications from equity (reclassifiable reserves) have an impact on financial income. (3) Share of change in fair value that impacts financial income for the financial year. (4) Financial income generated on “Commodities” corresponds to the disqualification of hedging derivatives following the early termination of Wales & Borders.
Interest rate and foreign exchange derivatives are recorded in the statement of financial position at fair value for the following amounts:
31/12/2020 31/12/2019 Non- Non- (€ million) current Current Total current Current Total Derivative assets Cash flow hedges - 0.1 0.1 (0.1) 0.1 0.0 Fair value hedges ------Transaction hedges - 1.5 1.5 - 0.7 0.7 Net foreign investment hedges ------
TOTAL DERIVATIVE INSTRUMENTS ASSETS - 1.6 1.6 (0.1) 0.8 0.7 Derivative liabilities Cash flow hedges - 10.8 10.8 (0.1) 9.1 9.1 Fair value hedges ------Transaction hedges - 0.3 0.3 - 0.7 0.7 Net foreign investment hedges ------
TOTAL DERIVATIVE INSTRUMENTS LIABILITIES - 11.1 11.1 (0.1) 9.9 9.8
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 47 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
The following table presents, by type of risk, the economic connection between derivatives and the items hedged:
FV of Change in FV Change in FV of Ineffectiveness 2020 derivatives of derivatives hedged item of hedging GKSAS CFH Interest rates (10.7) (1.6) 1.5 (0.1) FX - - - - Commodities (1.9) (1.4) 1.4 - Trading Interest rates (0.2) 0.3 - - FX 1.4 0.9 - - Commodities (7.4) (7.4) - -
FV of Change in FV Change in FV of Ineffectiveness 2019 derivatives of derivatives hedged item of hedging GKSAS CFH Interest rates (9.1) (6.5) 5.5 (1.0) FX - (1.8) 1.8 - Commodities (0.5) 7.4 (7.4) - Trading Interest rates (0.6) 0.6 - - FX 0.5 (0.7) - - Commodities 0.0 0.1 - -
48 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
The impact on reclassifiable equity (other comprehensive income) is as follows:
Equity as items which may be reclassified At 1 January 2019 (16.9)
Recycled in Profit & Loss 1.3
Change in effective value on cash flow hedge instruments (1.0) Interest rate hedging (8.4) Foreign exchange hedging (1.8) Including future transactions hedged (1.8) Price risk hedging 9.2
Change in cost of hedging 1.2 Interest rate hedging (0.2) Foreign exchange hedging 1.3 Price risk hedging -
Exchange difference (0.1) At 31 December 2019 (15.6) At 1 January 2020 (15.6)
Recycled in Profit & Loss 23.5
Change in effective value on cash flow hedge instruments (22.3) Interest rate hedging (4.6) Foreign exchange hedging - Including future transactions hedged - 2 Price risk hedging (17.7)
Change in cost of hedging (0.1) Interest rate hedging (0.1) Foreign exchange hedging - Price risk hedging - Exchange difference - At 31 December 2020 (14.5)
Breaking of hedging relationships A hedging relationship is broken from the point that the conditions ensuring its effectiveness are no longer fulfilled under the standard IFRS 9, or when the related derivative instrument reaches its settlement date, is cancelled or sold, or when the item hedged is cancelled or sold. Furthermore, the Group may at any time decide to end a hedging relationship. In this case, the hedging relationship no longer applies.
Balance of hedging Balance of hedging Hedging reserves Hedging reserves reserves on reserves on reclassified as the reclassified as the maintained hedging terminated hedging hedged element hedged element is 2020 relationships relationships has impacted profit no longer realisable GKSAS
Interest rates (12.2) (0.0) 3.5 1.5 FX - - - 2.3 Commodities (2.1) - 11.1 12.2
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 49 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Disqualified instruments correspond in particular to the loss on the Wales & Borders contract and the related derivatives (rates, foreign exchange and diesel). As events related to COVID-19 led to a sharp drop in consumption, some of the diesel hedging carried out in 2020 was also subject to disqualification.
Balance of hedging Balance of hedging Hedging reserves Hedging reserves reserves on reserves on reclassified as the reclassified as the maintained hedging terminated hedging hedged element hedged element is 2019 relationships relationships has impacted profit no longer realisable GKSAS CFH Interest rates (12.5) (0.1) 2.5 - FX (2.3) - - - Commodities (0.7) - (1.7) -
Management of interest rate risk Derivative financial instruments eligible for hedge accounting are The exposure of the Group to interest rate risk stems from its recognised under cash flow hedges. The derivative financial financial debt. The Group covers the risk of interest rate increases instruments that are not eligible are recognised under trading. by using derivative financial instruments. The exposed debt at The market environment of negative interest rates has created an 31 December 2020 is 65% covered. asymmetric position between the floored debt and certain hedging derivative instruments. This asymmetry, which creates inefficiency under application of IFRS 9, led to these instruments being reclassified as trading. The breakdown between the Group’s fixed and variable rate debt is as follows:
At 31 December At 31 December (€ million) 2020 2019 Financial debt and long-term borrowings restated for financial liabilities for concessions 1,451.5 1,335.1 Cash and cash equivalents (374.6) (175.4) Accrued interest receivable (1.7) (0.2) Loans and receivables (28.5) (9.8) Deposits and guarantees (10.4) (27.7) Derivative assets (1.6) (0.8) Employee profit sharing (0.7) (0.6) Net financial debt 1,034.1 1,120.8
Net financial debt is an internal Keolis indicator. It does not include The Group is exposed to interest rate variability on the variable rate the lease obligations created by application of IFRS 16 (including portion of its net financial debt. finance lease liabilities which were entirely reclassified as lease obligations, applying IFRS 16) and commitments to purchase non-controlling interests. It also excludes financial liabilities for concessions.
The interest rate breakdown of financial debt and borrowings before and after derivative instruments (hedging and trading) is as follows:
Initial debt structure Structure after hedging
(€ million) 31/12/2020 31/12/2019 31/12/2020 31/12/2019 Fixed rates 116.7 134.7 682.2 870.5 Variable rates 1,334.8 1,200.4 769.3 464.6
TOTAL BORROWINGS AND DEBT 1,451.5 1,335.1 1,451.5 1,335.1
50 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Analysis of sensitivity At 31 December 2020, on the basis of a constant net debt, an immediate variation of 50 basis points in interest rates at the end of the year would have changed the annual borrowing cost as follows:
+50 bp -50 bp +50 bp Reclassifiable -50 bp Reclassifiable (€ million) Income reserves Income reserves Variable rate financial instruments (after taking into account FV hedges) (2.3) - 0.7 - Liabilities for fair value options - - - - Derivatives not qualifying as hedges 0.1 - (0.1) - Derivatives qualifying as cash flow hedges 0.0 5.2 (0.0) (4.9)
ANALYSIS OF SENSITIVITY (2.2) 5.2 0.6 (4.9)
On the basis of the debt structure at 31 December 2020, a variation in the interest rate curve of +/-50 basis points on the residual maturity of the debt (approximately 3 years) would affect the cost of financial borrowings as follows:
+50 bp -50 bp +50 bp Reclassifiable -50 bp Reclassifiable (€ million) Income reserves Income reserves Variable rate financial instruments (after taking into account FV hedges) 0.8 - (1.1) - Liabilities for fair value options - - - - Derivatives not qualifying as hedges 0.1 - (0.1) - Derivatives qualifying as cash flow hedges 0.0 1.2 (0.0) (1.2)
ANALYSIS OF SENSITIVITY 0.9 1.2 (1.2) (1.2)
Derivative financial instruments are recorded in the statement of financial position at their fair value for the following amounts: 2
Fair value in the balance sheet as at 31/12/2020 Fair value in the balance sheet as at 31/12/2019
Hedge of a net Hedge of a net Cash Fair investment Cash Fair investment flow value in a foreign flow value in a foreign (€ million) hedge hedge Trading operation TOTAL hedge hedge Trading operation TOTAL Fixed-rate receiver swaps ------Fixed-rate payer swaps ------Interest rate options 0.1 - - - 0.1 0.1 - - - 0.1
Derivative assets 0.1 - - - 0.1 0.1 - - - 0.1 Fixed-rate receiver swaps ------Fixed-rate payer swaps 10.7 - 0.2 - 10.9 8.9 - 0.6 - 9.4 Interest rate options 0.1 - - - 0.1 0.3 - - - 0.3
Derivative liabilities 10.8 - 0.2 - 11.0 9.1 - 0.6 - 9.7
INTEREST RATE NET POSITION (10.7) - (0.2) - (10.9) (9.1) - (0.6) - (9.6)
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 51 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
The nominal amounts of derivative financial instruments are detailed below:
31/12/2020 31/12/2019 Net long Net short Net long Net short (€ million) term debt term debt term debt term debt Fixed-rate receiver swaps - - - - Fixed-rate payer swaps 225.9 39.4 277.5 67.5 Index swaps - - - - Interest rate options 162.6 140.0 335.0 122.0
All of the interest rate hedging instruments held at 31 December 2020 mature between 2021 and 2028. For synthetic hedges made up of several instruments, we only consider the nominal hedged.
Foreign exchange risk management The Group has put in place intra-group loans denominated in management objective being to maintain the reference exchange foreign currency and recognised in current accounts. In order to rate defined for the year. cover the resulting foreign exchange risk, the Group uses derivative Some of the derivative financial instruments held by the Group are financial instruments which allow it to fix the exchange rate of these eligible for net investment hedge accounting as described by intra-group loans, covering 100% of the nominal amounts exposed. IFRS 9, the rest are recognised under trading. At 31 December The Group also makes investments in foreign entities. To cover the 2020, there were no derivative hedging instruments qualified as net foreign exchange risk engendered by these investments, the Group investments. uses derivative financial instruments for limited amounts, with the
The derivative financial instruments are recognised in the statement of financial position at their fair value at the following amounts:
Fair value in the balance sheet as at 31/12/2020 value in the balance sheet as at 31/12/2019 Hedge Hedge of a net of a net Cash Fair investment Cash Fair investment flow value in a foreign flow value in a foreign (€ million) hedge hedge Trading operation TOTAL hedge hedge Trading operation TOTAL Currency swaps - - 1.5 - 1.5 - - 0.7 - 0.7
Derivative assets - - 1.5 - 1.5 - - 0.7 - 0.7 Currency swaps - - 0.1 - 0.1 - - 0.2 - 0.2 Forward purchase of currencies - - 0.0 - 0.0 - - - - - Forward sale of currencies ------Currency options ------
Derivative liabilities - - 0.1 - 0.1 - - 0.2 - 0.2
NET POSITION ON CURRENCIES - - 1.4 - 1.4 - - 0.5 - 0.5
The derivative financial instruments mainly hedge transactions in In 2020, Keolis hedged 87% of budgeted exposed diesel volumes. the following currencies: AED, CAD, DKK, GBP, NOK, SEK, USD. The Covid and lockdown periods led to a significant drop in the All of the foreign exchange hedging derivatives held at volumes actually consumed. The Group disqualified the share of 31 December 2020 mature in 2021. unrealised volumes between March and December 2020. Taking into account disqualifications and actual business volumes, the level of coverage was 94% in 2020. Management of risk of fluctuations in commodities prices Derivative financial instruments eligible for hedge accounting are recognised under cash flow hedges as described by IFRS 9. The Within the scope of its activities, the Group is exposed to a risk of derivative financial instruments that are not eligible are recognised fluctuation in the price of certain commodities, in particular diesel. under trading. The Group covers this risk by using derivative financial instruments.
52 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
The derivative financial instruments are recognised in the statement of financial position at their fair value at the following amounts:
Fair value in the balance sheet Fair value in the balance sheet as at 31/12/2020 as at 31/12/2019 Fair Cash Fair Cash flow value flow value (€ million) hedge hedge Trading TOTAL hedge hedge Trading TOTAL Swaps on petroleum products 0.6 0.0 0.6 1.1 1.1 Swaptions on petroleum products - - - - - Forward purchase of electricity - - - - - Diesel options – assets - - - - - Diesel caps – assets - - - - -
Derivatives on commodities assets 0.6 - 0.0 0.6 1.1 1.1 Swaps on petroleum products 2.6 7.4 10.0 1.7 1.7 Swaptions on petroleum products - - - - - Forward purchase of electricity - - - - - Diesel options – liabilities - - - - Diesel caps – liabilities - - - - -
Derivatives on commodities liabilities 2.6 - 7.4 10.0 1.7 - 1.7
NET POSITION ON COMMODITIES (1.9) - (7.4) (9.4) (0.5) - - (0.5)
At 31 December 2020, commodity price derivatives represent a volume of 104,331 tonnes (compared with 132,865 tonnes at 31 December 2019): The derivatives of Keolis Amey Operations will be unwound before 7 February 2021.
Maturity
Volumes in tonnes less than 1 year 1 to 5 years Swaps and tunnels on diesel reference 63,877 40,455 2 Including KAO 25,800 28,050 Excluding KAO 38,077 12,405
Counterparty risk the portfolio of cash investments complies with weighting The transactions generating a potential counterparty risk for the restrictions, Group are as follows: the “fair value at risk” (fair value in favour of the Group) of the cash deposits; portfolio of derivative financial instruments is monitored regularly so as to spread the risk over various counterparties, derivative financial instruments; the banks and categories are monitored regularly. trade receivables. If a bank that is a Group counterparty is removed from the In 2013, the Group established and implemented a counterparty “Authorised Bank” category, the portfolio of derivative financial risk procedure for bank counterparties relating to its investments instruments is restructured so as to comply once again with the and derivative financial instruments. This procedure is based on the category criteria. principles set out below: At 31 December 2020: definition of three categories within which the Group’s bank counterparties are divided: all the investments made and all the derivative financial instruments held by the Group were established with bank authorised Banks, counterparties in the “Authorised Banks” category; banks under supervision, the analysis of fair values at risk indicates that there is no major non-authorised Banks; counterparty risk to report. these categories are defined based on criteria specific to banks Finally, the credit and debit valuation adjustment calculations for the (rating) or GROUPE KEOLIS S.A.S. (Group financing): counterparty risk, as required by IFRS 13, indicate that the counterparty risk related to the valuation of the Group’s portfolios of cash investments and derivative financial instruments are only derivative financial instruments is negligible. undertaken with counterparties that belong to the “Authorised Banks” category,
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 53 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Liquidity risk On 6 July 2020, the maturity date of the €900 million syndicated An additional liquidity line was set up on 29 July 2020 for an loan was extended by a year to 27 July 2025. amount of €350 million. The maturity date of this line is 29 July From 30 April 2020 to 30 October 2020, the Keolis Group drew all 2022. As of 31 December 2020, the undrawn amount available of its €900 million syndicated loan as a security measure and to under this confirmed syndicated credit facility was €350 million. deal with the uncertainties of the COVID-19 crisis. This credit line is available to GROUPE KEOLIS S.A.S. subject to compliance with financial ratios. As of 31 December 2020, the undrawn amount available under this confirmed syndicated credit facility was €300 million. This credit line is available to GROUPE KEOLIS S.A.S. and Keolis S.A.
The following table shows the reimbursement schedule for the syndicated credit facility and the acquisition financing credit lines, and the profile of the corresponding forecasted interest charges after taking into account interest rate hedging. At 31 December 2020:
(€ million) <= 1 year 2 years 3 to 5 years > 5 years Financial debt 40.0 316.4 640.0 - Debt expense (10.2) (8.5) (15.2) (1.0) Of which interest rate hedges (2.7) (2.1) (4.8) (1.0)
The forecasted interest charges on the debt are calculated on the The Group ensures that it has sufficient resources to meet its gross debt on the basis of the interest rate on 31 December 2020, financial obligations. To do so, each year the Group prepares a table to which is added the Group’s interest margin. of projected cash flows several years into the future to identify financing requirements and their seasonality. On the basis of this, the Group closed its 2020 financial statements without any identified cash risk for 2021.
2.3.5.14 Provisions
Analysis by type
At 31 December 2020 At 31 December 2019 More than Less than More than Less than (€ million) one year one year Total one year one year Total Pensions 68.1 10.7 78.8 79.1 5.2 84.3 Other employee benefits 27.7 1.7 29.4 23.9 1.8 25.8 Employment and tax risks 40.9 41.9 82.8 12.1 32.5 44.6 Losses on contract termination and loss-making contracts 115.5 18.7 134.2 14.8 - 14.8 Major repairs and refurbishment 9.4 5.3 14.7 10.3 10.6 20.8 Other 9.5 12.8 22.4 27.5 8.7 36.2
TOTAL 271.0 91.2 362.2 167.6 58.9 226.5
Movements during the financial year Newly consolidated Other (€ million) 1/1/2020 Charge Reversals companies movements 31/12/2020 Pensions 84.3 7.0 (10.1) (0.3) (2.1) 78.8 Other employee benefits 25.8 1.9 (1.2) - 2.9 29.4 Employment and tax risks 44.6 55.4 (16.5) - (0.7) 82.8 Losses on contract termination and loss-making contracts 14.8 131.7 (12.3) - (0.0) 134.2 Major repairs and refurbishment 20.8 3.8 (0.4) - (9.6) 14.7 Other 36.2 18.4 (33.3) (5.6) 6.7 22.4
TOTAL 226.5 218.3 (73.8) (6.0) (2.8) 362.2
54 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
At 31 December 2020, the €73.8 million of reversals comprised €49.9 million of utilised reversals, €10.1 million of which were pension provision reversals, and €23.9 million of unutilised reversals.
Pensions and similar benefits The amount of commitments recognised in the statement of financial position breaks down as follows:
(€ million) 31/12/2020 31/12/2019 Commitments recorded in the statement of financial position: Pensions and other post-employment benefits 78.8 84.4 Other employee benefits 29.4 25.8
TOTAL 108.2 110.1 Of which: Non-current 95.7 103.0 Current 12.5 7.1
In the United Kingdom there is a defined benefits pension scheme As of 31 December 2020, the net commitment of this plan is close specific to the rail industry: the Railways Pension Scheme (RPS). to £0.0 million due to the end of the Wales franchise. It represented This scheme is financed by a trust. The amount of the commitment £(4.9) million at 31 December 2019. which falls on the company is according to the length of the franchise. This commitment is shown in the statement of financial position for a net amount which reflects the partial off set of pension assets and liabilities.
Pensions and other post-employment benefits
ACTUARIAL ASSUMPTIONS The following are the main actuarial assumptions adopted in evaluating pension commitments under the defined benefit schemes:
At 31 December 2020 At 31 December 2019 2 United United (per cent) France Kingdom Canada France Kingdom Canada Discount rate 0.21 1.35 N/A 0.38 1.90 2.90 Rate of increase in salaries 4.13 3.15 N/A 2.3-6.7 3.20 N/A Expected rate of return on assets 0.21 1.35 N/A 0.38 - 3.65
The plan assets break down as follows:
At 31 December 2020 At 31 December 2019 United United (€ million) France Kingdom Canada France Kingdom Canada Equities 0.0 - - 0.0 - - Bonds 0.2 - - 0.2 - - Real estate 0.0 - - 0.0 - - Other (notably cash equivalents) 0.0 - - 0.0 - 0.2
The sensitivity to discount rates is as follows, in relation to the assumptions adopted at 31/12/2020:
Commitment Service cost Financial cost (€ million) at 31/12/2020 2021 2021 Discount rate less 0.25% 81.4 7.0 0.0 Discount rate (basic assumption) 78.8 6.7 0.2 Discount rate plus 0.25% 77.3 6.4 0.3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 55 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Commitments recorded in the statement of financial position The commitments recognised in the statement of financial position break down as follows:
(€ million) At 31 December 2020 At 31 December 2019 Present value of non-financed liabilities 77.2 77.9 Present value of financed liabilities 1.9 7.1
PRESENT VALUE OF TOTAL LIABILITIES 79.1 85.0 Fair value of pension scheme assets (0.3) (0.6)
PRESENT VALUE OF NET LIABILITIES RECOGNISED 78.8 84.4
Analysis of changes in liabilities and assets The net present value of the liabilities comprises:
(€ million) At 31 December 2020 At 31 December 2019
NET PRESENT VALUE OF LIABILITIES AT 1 JANUARY 85.0 153.8 cost 6.8 10.0 Financial cost (including Franchise Adjustment) 0.4 2.3 Benefits paid (7.7) (7.9) Employee contributions - 0.0 Changes in pension schemes - 1.2 Actuarial gains and losses (2.0) (70.9) Foreign exchange translation difference 0.3 0.5 Effect of changes in consolidation scope (1.1) 8.9 Effect of reductions and pension scheme settlements (2.5) (13.0)
NET PRESENT VALUE OF LIABILITIES AT 31 DECEMBER 79.2 85.0
The fair value of the assets comprises:
At 31 December 2020 At 31 December 2019
FAIR VALUE OF PENSION PLAN ASSETS AT 1 JANUARY 0.6 6.2 return on assets 0.0 0.1 Actuarial gains/(losses) on pension fund returns 0.0 0.6 Employer contributions - 0.0 Employee contributions - 0.0 Benefits paid (0.0) (0.7) Foreign exchange translation difference 0.0 0.3 Effect of changes in consolidation scope - 0.0 Effect of reductions and pension scheme settlements (0.2) (6.0)
FAIR VALUE OF PENSION PLAN ASSETS AT 31 DECEMBER 0.4 0.6
56 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
The following are the actuarial gains and losses both in the light of experience and due to changes in actuarial assumptions:
(€ million) At 31 December 2020 At 31 December 2019 Impact of changes in assumptions (0.9) 12.4 Losses/(gains) in the light of experience (1.0) (5.3) Modification of time-frame 0.0 (78.6) Actuarial (gains)/losses for the year (2.0) (71.5) Franchise adjustment incl. foreign exchange translation differences - -
ACTUARIAL (GAINS)/LOSSES FOR THE FINANCIAL YEAR (AFTER FRANCHISE ADJUSTMENT) (2.0) (71.5)
The following is the geographical breakdown of the liabilities and assets:
At 31 December 2020 United (€ million) France Kingdom Canada Total Present value of the liabilities 79.1 0.0 - 79.1 Fair value of pension scheme assets (0.3) - - (0.3) Franchise adjustment (United Kingdom) - - -
NET PRESENT VALUE OF THE OBLIGATION 78.8 0.0 - 78.8
Benefit cost for the financial year The cost of benefits recognised in the income statement breaks down as follows:
(€ million) At 31 December 2020 At 31 December 2019 2 Service cost 6.8 10.0 Interest cost 0.4 2.3 Expected return on assets (0.0) (0.1) Changes in pension schemes - 1.2 Effect of reductions and pension scheme settlements (2.3) (7.1)
TOTAL EXPENSE RECOGNISED IN THE INCOME STATEMENT 4.9 6.3
The service cost is recognised within staff expenses. The interest cost on liabilities and the expected return on the pension scheme assets are recognised as financial expense and financial income respectively.
CHANGE IN NET OBLIGATION RECOGNISED AS LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION
(€ million) At 31 December 2020 At 31 December 2019
OPENING PROVISION AT 1 JANUARY 84.4 147.6 Newly consolidated companies (0.9) 7.6 Benefit cost for the financial year 4.9 6.3 Used (Benefits/Contributions paid) (7.6) (7.2) Provision charged to/(reversed from) equity (2.0) (71.5) Foreign exchange translation differences and other changes 0.0 1.6
CLOSING PROVISION AT 31 DECEMBER 78.8 84.4
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 57 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
The cumulative movements in charges/(reversals) recognised directly in equity are as follows:
(€ million) At 31 December 2020 At 31 December 2019
CUMULATIVE OPENING BALANCE OF CHARGES/(REVERSALS) (26.6) 44.7 Actuarial (gains)/losses for the year (2.0) (71.5) Franchise Adjustment incl. foreign exchange translation differences (0.0) 0.2
CUMULATIVE CLOSING BALANCE OF CHARGES/(REVERSALS) (28.6) (26.6)
Variations for the current financial year and for the three previous ones:
(€ million) 31/12/2020 31/12/2019 31/12/2018 31/12/2017 Present value of liabilities 79.1 85.0 153.8 157.2 Fair value of pension scheme assets (0.3) (0.6) (6.2) (7.2) Franchise Adjustment and Asset Limitation (Canada) - 0.0 - 0.2 Surplus (deficit) of the pension scheme 78.8 84.4 147.6 150.2 Adjustments related to experience (1.0) (5.3) 2.1 0.9 Modification of time-frame 0.0 (78.6) N/A N/A
Other employee benefits These schemes are not funded by external assets (e.g. insurance policies). The obligations arising from defined benefit schemes are DESCRIPTION OF COMMITMENTS AND ACTUARIAL measured using the same methods and assumptions as for the ASSUMPTIONS pension schemes. Other employee benefits consist of long-service awards to The actuarial gains and losses arising from both experience and employees working in France and healthcare expenses of due to changes in actuarial assumptions are immediately employees in the United States who have taken early retirement. recognised in the income statement for the financial year.
ANALYSIS OF CHANGES IN OBLIGATIONS
(€ million) 1/1/2020 Charge Reversals Other 31/12/2020 France: long service awards 15.0 1.9 (1.0) (0.3) 15.6 USA: healthcare expenses of retired employees 10.8 0.2 (0.1) 2.9 13.8
TOTAL 25.8 2.1 (1.1) 2.6 29.4
2.3.5.15 Trade and other liabilities
(€ million) 31/12/2020 31/12/2019 Customers: advances and deposits received 81.4 65.8 Trade payables 725.6 775.5 Payables to PPE suppliers 60.7 56.8 Payables to staff 560.8 578.3 Central government and local authorities 89.4 141.0 Deferred income(1) 381.4 314.8 Other 229.8 182.5
TOTAL 2,129.2 2,114.6
(1) Including €123.8 million in financial liabilities for concessions in 2020.
58 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
2.3.6 OFF-STATEMENT OF FINANCIAL POSITION COMMITMENTS AND CONTRACTUAL OBLIGATIONS
(€ million) 31/12/2020 31/12/2019 Unutilised credit lines 695.2 364.7 Guarantees received as collateral 598.6 80.7
TOTAL COMMITMENTS AND GUARANTEES RECEIVED EXCLUDING OPERATING LEASES 1,293.8 445.4 to purchase 3.2 7.8 Guarantees given for operating commitments 1,881.9 1,819.5 Securities provided 46.3 3.1
TOTAL COMMITMENTS MADE AND GUARANTEES GIVEN, EXCLUDING OPERATING LEASES 1,931.4 1,830.4
The amount of path access entitlements within the “Guarantees 31 December 2020 compared to €668.3 million at 31 December given for operating commitments” is €627.5 million at 2019.
2.3.7 LITIGATION AND CONTINGENT LIABILITIES
The estimates and underlying assumptions relating to current The Optile transport group, of which Keolis is a member, is disputes are continuously re-examined. In particular, current concerned by the decision of the Council of State relating to the disputes and litigation, especially with tax administrations or relating recovery of subsidies granted by the Regional Council of to appeals on tenders or on warranty claims, have been examined Île-de-France on the grounds that it benefited from State aid by the management with its advisers and lawyers for the purpose of unlawfully. As the system was deemed compatible with the internal assessing the risk they entail to the measurement of assets or market, but not notified to the Commission, by a ruling dated liabilities. 18 March 2020, the Council of State asked the Île-de-France The impact of changes in accounting estimates is recognised region to “take the necessary measures to ensure the payment, by during the period of the change where they only affect that period, each company having conducted an activity on a market open to competition and having benefited from the aid scheme unlawfully 2 or during the period of the change and subsequent periods where the latter are also affected by the change. implemented, of the amounts corresponding to the interest… that the company would have paid if it had had to borrow…”. Risks are measured at fair value and, when an outflow of resources is considered probable, a provision is made in the accounts (see In the absence of procedures for implementing this decision and for 2.3.5.14). determining the net amounts concerned, the Keolis Group did not record a provision for this dispute.
2.3.8 RELATED-PARTY TRANSACTIONS
2.3.8.1 Transactions with SNCF 2.3.8.3 Remuneration of the Group’s key GROUPE KEOLIS S.A.S. is 69.69%-owned by SNCF Participations managers (an entity with an industrial and commercial activity, whose capital is The key managers in the Group are defined as being the company entirely held by the French state) and 30.00% by Caisse des executive officers of GROUPE KEOLIS S.A.S. and the members of Dépôts et Placements du Québec. the Executive Committee. The remuneration and other short-term Transactions mainly correspond to general management services. benefits of these hey managers amounted to €5.1 million in 2020 compared to €4.9 million in 2019. Transactions with the SNCF and its subsidiaries mainly concern car park rentals, and either permanent or occasional passenger The following director’s fees were paid to independent directors: transport services. €0.4 million in 2020, compared to €0.4 million in 2019. There are no outstanding advances or credit facilities extended to 2.3.8.2 Transactions with joint ventures members of the Group’s management or executive bodies. and associates Transactions with joint ventures and associates are carried out under normal market conditions. 2.3.9 POST-BALANCE SHEET EVENTS
Nil.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 59 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
2.3.10 SCOPE OF CONSOLIDATION
2.3.10.1 Subsidiaries Name Country Method of consolidation % of shareholding A85 Assistances FRANCE Fully consolidated (FC) 100.00 ADN FRANCE Fully consolidated (FC) 100.00 Aerobag FRANCE Fully consolidated (FC) 100.00 Aerolis FRANCE Fully consolidated (FC) 100.00 Aéroport Angers Marcé FRANCE Fully consolidated (FC) 100.00 Airelle FRANCE Fully consolidated (FC) 100.00 Ambulance Agréée Baril FRANCE Fully consolidated (FC) 100.00 Ambulance Amitié Campugnan FRANCE Fully consolidated (FC) 100.00 Ambulance Angers FRANCE Fully consolidated (FC) 100.00 Ambulance Anjou Touraine FRANCE Fully consolidated (FC) 100.00 Ambulance Aux 2 B FRANCE Fully consolidated (FC) 100.00 Ambulance Bretagne FRANCE Fully consolidated (FC) 100.00 Ambulance Douillard FRANCE Fully consolidated (FC) 100.00 Ambulance Florentaise FRANCE Fully consolidated (FC) 100.00 Ambulance Graton FRANCE Fully consolidated (FC) 100.00 Ambulance Platinium FRANCE Fully consolidated (FC) 100.00 Ambulance Saint Jean Baptiste Canejan FRANCE Fully consolidated (FC) 100.00 Ambulance Saint Jean Baptiste Langon FRANCE Fully consolidated (FC) 100.00 Ambulance Saint Jean Baptiste Libourne FRANCE Fully consolidated (FC) 100.00 Ambulance Taxi Laporte FRANCE Fully consolidated (FC) 100.00 Ambulances 24/24 FRANCE Fully consolidated (FC) 100.00 Ambulances Alienor d’Aquitaine FRANCE Fully consolidated (FC) 100.00 Ambulances Blanc FRANCE Fully consolidated (FC) 100.00 Ambulances Chaperon FRANCE Fully consolidated (FC) 100.00 Ambulances Chesnaysiennes Sanitran FRANCE Fully consolidated (FC) 100.00 Ambulances de la Côte d’Argent FRANCE Fully consolidated (FC) 100.00 Ambulances de la Pointe FRANCE Fully consolidated (FC) 85.00 Ambulances de la Vallée FRANCE Fully consolidated (FC) 100.00 Ambulances de l’Étoile FRANCE Fully consolidated (FC) 100.00 Ambulances de l’Iroise FRANCE Fully consolidated (FC) 85.00 Ambulances des Trois Moutiers FRANCE Fully consolidated (FC) 100.00 Ambulances Gaillacoises AAAT FRANCE Fully consolidated (FC) 100.00 Ambulances Garnachoise FRANCE Fully consolidated (FC) 100.00 Ambulances Hervé FRANCE Fully consolidated (FC) 100.00 Ambulances Larreche FRANCE Fully consolidated (FC) 100.00 Ambulances Loire et Sillon FRANCE Fully consolidated (FC) 100.00 Ambulances Moreau FRANCE Fully consolidated (FC) 100.00 Ambulances Secours Rapides du Bassin FRANCE Fully consolidated (FC) 100.00 Ambulances Sud Loire FRANCE Fully consolidated (FC) 100.00 Ambulances Sud Nantes FRANCE Fully consolidated (FC) 100.00 Ambulances Talençaises FRANCE Fully consolidated (FC) 100.00 Appel Sud 79 FRANCE Fully consolidated (FC) 100.00 Arnaud FRANCE Fully consolidated (FC) 100.00 ASC Groupe FRANCE Fully consolidated (FC) 100.00
60 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding Augeron FRANCE Fully consolidated (FC) 100.00 Autocars Delion SAS FRANCE Fully consolidated (FC) 100.00 Autocars Eschenlauer FRANCE Fully consolidated (FC) 100.00 Autocars et Transports Grindler FRANCE Fully consolidated (FC) 100.00 Autocars Striebig FRANCE Fully consolidated (FC) 100.00 Autocars Trans-Azur FRANCE Fully consolidated (FC) 100.00 Brest Ambulances FRANCE Fully consolidated (FC) 85.00 Cars de Bordeaux FRANCE Fully consolidated (FC) 100.00 Castel Ambulances FRANCE Fully consolidated (FC) 100.00 Castel Funéraire FRANCE Fully consolidated (FC) 100.00 Centre Ambulancier 16 FRANCE Fully consolidated (FC) 100.00 Compagnie du Blanc Argent FRANCE Fully consolidated (FC) 99.43 CTHK FRANCE Fully consolidated (FC) 100.00 Cykleo FRANCE Fully consolidated (FC) 100.00 DM Finance FRANCE Fully consolidated (FC) 85.00 EFFIA (holding company) FRANCE Fully consolidated (FC) 100.00 EFFIA Asnières-sur-Seine FRANCE Fully consolidated (FC) 100.00 EFFIA Cannes FRANCE Fully consolidated (FC) 100.00 EFFIA Cergy Pontoise FRANCE Fully consolidated (FC) 100.00 EFFIA Charenton FRANCE Fully consolidated (FC) 100.00 EFFIA Concessions FRANCE Fully consolidated (FC) 100.00 EFFIA Le Havre FRANCE Fully consolidated (FC) 100.00 EFFIA Limoges FRANCE Fully consolidated (FC) 100.00 EFFIA Park FRANCE Fully consolidated (FC) 100.00 EFFIA Rouen Gare FRANCE Fully consolidated (FC) 100.00 2 EFFIA Stationnement Cassis FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Chambéry FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement et Mobilité FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Eze FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Grenoble FRANCE Fully consolidated (FC) 100.00 EFFIA stationnement Lille FRANCE Fully consolidated (FC) 100.00 EFFIA stationnement Lyon FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Marseille FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Nice Mozart FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Saint-Etienne FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Saint-Maur-des-Fossés FRANCE Fully consolidated (FC) 100.00 EFFIA Stationnement Vincennes FRANCE Fully consolidated (FC) 100.00 EGS Lyon FRANCE Fully consolidated (FC) 100.00 Enlèvement et Gardiennage Services FRANCE Fully consolidated (FC) 100.00 Enlèvement et Gardiennage Services Lille FRANCE Fully consolidated (FC) 100.00 Enlèvement et Gardiennage Services Marseille FRANCE Fully consolidated (FC) 100.00 Enlèvement et Gardiennage Services Montpellier FRANCE Fully consolidated (FC) 100.00 Financière Franck Salat FRANCE Fully consolidated (FC) 100.00 GEP Vidal FRANCE Fully consolidated (FC) 100.00 GR4 Crolles FRANCE Fully consolidated (FC) 55.81 GROUPE KEOLIS S.A.S. FRANCE Fully consolidated (FC) 100.00 Guillou Aillerie FRANCE Fully consolidated (FC) 100.00
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 61 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding Holding CFK FRANCE Fully consolidated (FC) 100.00 Holding Rochette Participations Montverdun FRANCE Fully consolidated (FC) 100.00 Holding Striebig FRANCE Fully consolidated (FC) 100.00 Institut Keolis FRANCE Fully consolidated (FC) 100.00 Inter Ambulances FRANCE Fully consolidated (FC) 100.00 Interhone FRANCE Fully consolidated (FC) 100.00 Jade Ambulance Service FRANCE Fully consolidated (FC) 100.00 Jussieu Secours FRANCE Fully consolidated (FC) 56.74 Keolis FRANCE Fully consolidated (FC) 100.00 Keolis Haguenau FRANCE Fully consolidated (FC) 100.00 Keolis Agen FRANCE Fully consolidated (FC) 100.00 Keolis Aile FRANCE Fully consolidated (FC) 100.00 Keolis Aile Foncière FRANCE Fully consolidated (FC) 100.00 Keolis Aile Sud FRANCE Fully consolidated (FC) 100.00 Keolis Alès FRANCE Fully consolidated (FC) 100.00 Keolis Alpes Maritimes FRANCE Fully consolidated (FC) 100.00 Keolis Amiens FRANCE Fully consolidated (FC) 100.00 Keolis Angers FRANCE Fully consolidated (FC) 100.00 Keolis Armor FRANCE Fully consolidated (FC) 100.00 Keolis Arras FRANCE Fully consolidated (FC) 100.00 Keolis Artois FRANCE Fully consolidated (FC) 100.00 Keolis Atlantique FRANCE Fully consolidated (FC) 100.00 Keolis Auch FRANCE Fully consolidated (FC) 100.00 Keolis Aude FRANCE Fully consolidated (FC) 100.00 Keolis Autocars Planche FRANCE Fully consolidated (FC) 100.00 Keolis Baie des Anges FRANCE Fully consolidated (FC) 100.00 Keolis Bassin d’Arcachon FRANCE Fully consolidated (FC) 100.00 Keolis Bassin de Pompey FRANCE Fully consolidated (FC) 100.00 Keolis Bassin de Thau FRANCE Fully consolidated (FC) 100.00 Keolis Beaune FRANCE Fully consolidated (FC) 100.00 Keolis Besançon Mobilités FRANCE Fully consolidated (FC) 100.00 Keolis Blois Mobilités FRANCE Fully consolidated (FC) 100.00 Keolis Blois* FRANCE Fully consolidated (FC) 100.00 Keolis Bordeaux FRANCE Fully consolidated (FC) 99.99 Keolis Bordeaux Métropole FRANCE Fully consolidated (FC) 100.00 Keolis Boulogne sur Mer FRANCE Fully consolidated (FC) 100.00 Keolis Bourgogne FRANCE Fully consolidated (FC) 99.50 Keolis Brest FRANCE Fully consolidated (FC) 100.00 Keolis Bus Verts FRANCE Fully consolidated (FC) 100.00 Keolis Caen FRANCE Fully consolidated (FC) 100.00 Keolis Caen Mobilités FRANCE Fully consolidated (FC) 100.00 Keolis Calvados FRANCE Fully consolidated (FC) 100.00 Keolis Camargue FRANCE Fully consolidated (FC) 100.00 Keolis Centre FRANCE Fully consolidated (FC) 100.00 Keolis Châlons-en-Champagne FRANCE Fully consolidated (FC) 99.24 Keolis Chambéry FRANCE Fully consolidated (FC) 100.00 Keolis Charente Maritime FRANCE Fully consolidated (FC) 99.98
62 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding Keolis Château Thierry FRANCE Fully consolidated (FC) 100.00 Keolis Châteauroux FRANCE Fully consolidated (FC) 100.00 Keolis Châtellerault FRANCE Fully consolidated (FC) 100.00 Keolis Chaumont FRANCE Fully consolidated (FC) 100.00 Keolis Chauny-Tergnier FRANCE Fully consolidated (FC) 100.00 Keolis Chauny-Tergnier-La Fère scolaire FRANCE Fully consolidated (FC) 100.00 Keolis Cherbourg FRANCE Fully consolidated (FC) 100.00 Keolis CIF FRANCE Fully consolidated (FC) 99.99 Keolis Conseil et Projets FRANCE Fully consolidated (FC) 100.00 Keolis Contrôle et Humanisation* FRANCE Fully consolidated (FC) 100.00 Keolis Côte Basque – Adour FRANCE Fully consolidated (FC) 100.00 Keolis Côte d’Azur FRANCE Fully consolidated (FC) 100.00 Keolis Côte d’Opale FRANCE Fully consolidated (FC) 100.00 Keolis Creil FRANCE Fully consolidated (FC) 100.00 Keolis Dijon FRANCE Fully consolidated (FC) 100.00 Keolis Dijon Mobilités FRANCE Fully consolidated (FC) 100.00 Keolis Dole FRANCE Fully consolidated (FC) 100.00 Keolis Drôme Ardèche FRANCE Fully consolidated (FC) 100.00 Keolis Drouais FRANCE Fully consolidated (FC) 100.00 Keolis en Cévennes FRANCE Fully consolidated (FC) 99.19 Keolis Epinal FRANCE Fully consolidated (FC) 100.00 Keolis Eure et Loir FRANCE Fully consolidated (FC) 100.00 Keolis Flandre Maritime FRANCE Fully consolidated (FC) 100.00 Keolis Fouache FRANCE Fully consolidated (FC) 100.00 Keolis Garonne FRANCE Fully consolidated (FC) 100.00 2 Keolis Gascogne FRANCE Fully consolidated (FC) 100.00 Keolis Gironde FRANCE Fully consolidated (FC) 100.00 Keolis Grand Bassin de Bourg-en-Bresse FRANCE Fully consolidated (FC) 100.00 Keolis Grand Nancy FRANCE Fully consolidated (FC) 100.00 Keolis Haut-Bugey FRANCE Fully consolidated (FC) 100.00 Keolis Île-et-Vilaine FRANCE Fully consolidated (FC) 100.00 Keolis Languedoc FRANCE Fully consolidated (FC) 100.00 Keolis Laval FRANCE Fully consolidated (FC) 100.00 Keolis Laval Mobilités FRANCE Fully consolidated (FC) 100.00 Keolis Lille FRANCE Fully consolidated (FC) 100.00 Keolis Lille Métropole FRANCE Fully consolidated (FC) 100.00 Keolis Littoral FRANCE Fully consolidated (FC) 100.00 Keolis Lorient FRANCE Fully consolidated (FC) 100.00 Keolis Lyon FRANCE Fully consolidated (FC) 100.00 Keolis Manche FRANCE Fully consolidated (FC) 100.00 Keolis Maritime Brest FRANCE Fully consolidated (FC) 100.00 Keolis Marmande FRANCE Fully consolidated (FC) 100.00 Keolis Méditerranée FRANCE Fully consolidated (FC) 100.00 Keolis Menton Riviera FRANCE Fully consolidated (FC) 100.00 Keolis Métropole Orléans FRANCE Fully consolidated (FC) 100.00 Keolis Mobilité Paris FRANCE Fully consolidated (FC) 100.00 Keolis Mobilité Roissy FRANCE Fully consolidated (FC) 100.00
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 63 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding Keolis Mobilité Val de Marne FRANCE Fully consolidated (FC) 100.00 Keolis Montargis FRANCE Fully consolidated (FC) 100.00 Keolis Montluçon FRANCE Fully consolidated (FC) 100.00 Keolis Morlaix FRANCE Fully consolidated (FC) 96.00 Keolis Moulins FRANCE Fully consolidated (FC) 100.00 Keolis Narbonne FRANCE Fully consolidated (FC) 100.00 Keolis Narbonne Mobilités FRANCE Fully consolidated (FC) 100.00 KO Nevers FRANCE Fully consolidated (FC) 100.00 Keolis Nevers FRANCE Fully consolidated (FC) 100.00 Keolis Nîmes FRANCE Fully consolidated (FC) 100.00 Keolis Nord FRANCE Fully consolidated (FC) 99.99 Keolis Normandie Seine FRANCE Fully consolidated (FC) 100.00 Keolis Obernai FRANCE Fully consolidated (FC) 100.00 Keolis Oise FRANCE Fully consolidated (FC) 100.00 Keolis Orléans FRANCE Fully consolidated (FC) 100.00 Keolis Orly Airport FRANCE Fully consolidated (FC) 100.00 Keolis Orly Rungis FRANCE Fully consolidated (FC) 100.00 Keolis Ouest Val-de-Marne FRANCE Fully consolidated (FC) 100.00 Keolis Oyonnax FRANCE Fully consolidated (FC) 100.00 Keolis Pays d’Aix FRANCE Fully consolidated (FC) 100.00 Keolis Pays de Montbéliard FRANCE Fully consolidated (FC) 100.00 Keolis Pays des Volcans FRANCE Fully consolidated (FC) 100.00 Keolis Pays Dolois FRANCE Fully consolidated (FC) 100.00 Keolis Pays du Forez FRANCE Fully consolidated (FC) 100.00 Keolis Pays Nancéien FRANCE Fully consolidated (FC) 100.00 Keolis Pays Normands FRANCE Fully consolidated (FC) 100.00 Keolis PMR Rhône FRANCE Fully consolidated (FC) 100.00 Keolis Porte de l’Isère FRANCE Fully consolidated (FC) 100.00 Keolis Porte des Alpes FRANCE Fully consolidated (FC) 100.00 Keolis Pyrénées FRANCE Fully consolidated (FC) 95.16 Keolis Quimper FRANCE Fully consolidated (FC) 100.00 Keolis Rennes FRANCE Fully consolidated (FC) 100.00 Keolis Réseau Départemental Sud Oise FRANCE Fully consolidated (FC) 100.00 Keolis Riom FRANCE Fully consolidated (FC) 100.00 Keolis Roissy Services Aéroportuaires FRANCE Fully consolidated (FC) 100.00 Keolis Saint Malo FRANCE Fully consolidated (FC) 100.00 Keolis Saintes FRANCE Fully consolidated (FC) 100.00 Keolis Saintes Mobilités FRANCE Fully consolidated (FC) 100.00 Keolis Salon-de-Provence FRANCE Fully consolidated (FC) 100.00 Keolis Santé FRANCE Fully consolidated (FC) 100.00 Keolis Seine Essonne FRANCE Fully consolidated (FC) 100.00 Keolis Seine Maritime FRANCE Fully consolidated (FC) 100.00 Keolis Seine Sénart FRANCE Fully consolidated (FC) 100.00 Keolis Seine Val-de-Marne FRANCE Fully consolidated (FC) 100.00 Keolis Solutions FRANCE Fully consolidated (FC) 100.00 Keolis Somme FRANCE Fully consolidated (FC) 100.00 Keolis Sophia Antipolis FRANCE Fully consolidated (FC) 100.00
64 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding Keolis Sud Allier FRANCE Fully consolidated (FC) 100.00 Keolis Sud Lorraine FRANCE Fully consolidated (FC) 100.00 Keolis Tarbes Lourdes Pyrénées FRANCE Fully consolidated (FC) 100.00 Keolis Territoires Nancéiens FRANCE Fully consolidated (FC) 100.00 Keolis Touraine FRANCE Fully consolidated (FC) 100.00 Keolis Tours FRANCE Fully consolidated (FC) 100.00 Keolis Tours Access FRANCE Fully consolidated (FC) 100.00 Keolis Travel Services FRANCE Fully consolidated (FC) 100.00 Keolis Trois Frontières FRANCE Fully consolidated (FC) 100.00 Keolis Urbest FRANCE Fully consolidated (FC) 100.00 Keolis Val de Maine FRANCE Fully consolidated (FC) 100.00 Keolis Val de Saône FRANCE Fully consolidated (FC) 100.00 Keolis Val d’Oise FRANCE Fully consolidated (FC) 100.00 Keolis Val Hainaut FRANCE Fully consolidated (FC) 96.32 Keolis Vélizy FRANCE Fully consolidated (FC) 100.00 Keolis Versailles FRANCE Fully consolidated (FC) 100.00 Keolis Vesoul FRANCE Fully consolidated (FC) 100.00 Keolis Vichy FRANCE Fully consolidated (FC) 100.00 Keolis Villefranche-sur-Saône FRANCE Fully consolidated (FC) 100.00 Keolis Voyages FRANCE Fully consolidated (FC) 100.00 Keolis Westeel FRANCE Fully consolidated (FC) 100.00 Keolis Yvelines FRANCE Fully consolidated (FC) 100.00 Keolis Agde FRANCE Fully consolidated (FC) 100.00 KeoMotion FRANCE Fully consolidated (FC) 100.00 Kisio Digital FRANCE Fully consolidated (FC) 100.00 2 Kisio Services & Consulting FRANCE Fully consolidated (FC) 100.00 KORRIVA* FRANCE Fully consolidated (FC) 100.00 L2O FRANCE Fully consolidated (FC) 100.00 Les Cars du Bassin de Thau FRANCE Fully consolidated (FC) 100.00 Les Coccinelles FRANCE Fully consolidated (FC) 100.00 Les Courriers Catalans FRANCE Fully consolidated (FC) 100.00 Les Courriers Du Midi FRANCE Fully consolidated (FC) 100.00 Les Kangourous 2 FRANCE Fully consolidated (FC) 100.00 Logistique Ambulance FRANCE Fully consolidated (FC) 100.00 Loisirs et Voyages FRANCE Fully consolidated (FC) 100.00 Mazamet Ambulances FRANCE Fully consolidated (FC) 100.00 Monamiligo FRANCE Fully consolidated (FC) 100.00 Monts Jura Autocars FRANCE Fully consolidated (FC) 100.00 Ormont Transports FRANCE Fully consolidated (FC) 100.00 Orset Investissement* FRANCE Fully consolidated (FC) 100.00 Ouest Ambulances FRANCE Fully consolidated (FC) 85.00 Pacific Car FRANCE Fully consolidated (FC) 100.00 Pessac Ambulances FRANCE Fully consolidated (FC) 100.00 Phocéens Cars FRANCE Fully consolidated (FC) 100.00 Réseau en Vosges FRANCE Fully consolidated (FC) 70.00 Santa Azur FRANCE Fully consolidated (FC) 100.00 SAP Cariane Provence FRANCE Fully consolidated (FC) 100.00
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 65 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding SATRVAM FRANCE Fully consolidated (FC) 100.00 SCAC FRANCE Fully consolidated (FC) 100.00 SCAC Bagnis FRANCE Fully consolidated (FC) 100.00 SEA Albert-Picardie FRANCE Fully consolidated (FC) 50.96 Société Bordelaise d’Exploitation de Services FRANCE Fully consolidated (FC) 100.00 Société d’Exploitation de l’Aéroport Dole Jura FRANCE Fully consolidated (FC) 51.00 Société du Parc Lyon-Diderot FRANCE Fully consolidated (FC) 50.00 Société Nantaise de Fourrière Automobile FRANCE Fully consolidated (FC) 100.00 Société Rennaise Transports et Services FRANCE Fully consolidated (FC) 100.00 Société Transports Robert FRANCE Fully consolidated (FC) 100.00 Sodetrav FRANCE Fully consolidated (FC) 100.00 STEFIM FRANCE Fully consolidated (FC) 100.00 Strasbourgeoise d’Enlèvement et de Gardiennage FRANCE Fully consolidated (FC) 100.00 TPR FRANCE Fully consolidated (FC) 100.00 Train Bleu St Marcellin FRANCE Fully consolidated (FC) 100.00 TRAM FRANCE Fully consolidated (FC) 100.00 Transévry FRANCE Fully consolidated (FC) 55.62 Transkeo FRANCE Fully consolidated (FC) 51.00 Transkeo T13 FRANCE Fully consolidated (FC) 100.00 Transport Daniel MEYER FRANCE Fully consolidated (FC) 100.00 Transports de la Brière FRANCE Fully consolidated (FC) 95.00 Transports Evrard FRANCE Fully consolidated (FC) 100.00 Urgence 33 FRANCE Fully consolidated (FC) 100.00 Voyages Autocars Services FRANCE Fully consolidated (FC) 100.00 Voyages Chargelègue FRANCE Fully consolidated (FC) 100.00 Voyages Dourlens FRANCE Fully consolidated (FC) 100.00 Voyages Monnet FRANCE Fully consolidated (FC) 100.00 Keolis Deutschland GmbH & Co. KG GERMANY Fully consolidated (FC) 100.00 Keolis Deutschland Verwaltung GERMANY Fully consolidated (FC) 100.00 Schloemer Verkehrsbetrieb GmbH GERMANY Fully consolidated (FC) 100.00 Striebig Deutschland GERMANY Fully consolidated (FC) 100.00 Striebig GmbH GERMANY Fully consolidated (FC) 100.00 Australian Transit Enterprises Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 Hornibrook Bus Lines Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 Hornibrook Transit Management Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 KD Hunter Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 KDR Gold Coast Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 KDR Victoria Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 Keolis Australia Pty AUSTRALIA Fully consolidated (FC) 100.00 Keolis Downer AUSTRALIA Fully consolidated (FC) 51.00 Keolis Downer Adelaide* AUSTRALIA Fully consolidated (FC) 51.00 Keolis Downer Bus and Coachlines Property Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 Keolis Downer Bus and Coachlines Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 Keolis Downer South Australia* AUSTRALIA Fully consolidated (FC) 51.00 Link SA Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 Path Transit Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 South West Transit Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00
66 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding Southlink Pty Ltd AUSTRALIA Fully consolidated (FC) 51.00 ALFA PARK BELGIUM Fully consolidated (FC) 88.80 Autobus Dony BELGIUM Fully consolidated (FC) 100.00 Autobus Dujardin BELGIUM Fully consolidated (FC) 100.00 Autobus Lienard BELGIUM Fully consolidated (FC) 100.00 Cardona-Deltenre BELGIUM Fully consolidated (FC) 100.00 Cars Gembloutois BELGIUM Fully consolidated (FC) 100.00 CINTRA BELGIUM Fully consolidated (FC) 100.00 CINTRAL BELGIUM Fully consolidated (FC) 100.00 Compagnie des Autobus Liégeois BELGIUM Fully consolidated (FC) 100.00 De Turck BVBA BELGIUM Fully consolidated (FC) 100.00 EFFIA BELGIUM BELGIUM Fully consolidated (FC) 100.00 Eltebe BELGIUM Fully consolidated (FC) 100.00 Eurobus Holding BELGIUM Fully consolidated (FC) 100.00 Eurobussing Brussels BELGIUM Fully consolidated (FC) 100.00 Eurobussing Wallonie BELGIUM Fully consolidated (FC) 100.00 Flanders Bus BELGIUM Fully consolidated (FC) 100.00 Garage du Perron BELGIUM Fully consolidated (FC) 100.00 Gino Tours BELGIUM Fully consolidated (FC) 100.00 Heyerick BELGIUM Fully consolidated (FC) 100.00 Immo Cammerpoorte SA BELGIUM Fully consolidated (FC) 100.00 Joye BELGIUM Fully consolidated (FC) 100.00 Keolis Belgium BELGIUM Fully consolidated (FC) 100.00 Keolis Vlaanderen BELGIUM Fully consolidated (FC) 100.00 Modern Toerisme NV BELGIUM Fully consolidated (FC) 100.00 2 Nice Traveling SPRL BELGIUM Fully consolidated (FC) 100.00 NV Autocars De Boeck BELGIUM Fully consolidated (FC) 100.00 NV Autobusbedrijf Bronckaers BELGIUM Fully consolidated (FC) 100.00 NV Autobussen De Reys BELGIUM Fully consolidated (FC) 100.00 Open Tours – Les Voyages Belges NV BELGIUM Fully consolidated (FC) 100.00 PARKEREN ROESELARE BELGIUM Fully consolidated (FC) 100.00 Parking Cathedrale SA BELGIUM Fully consolidated (FC) 100.00 Parking de l’Esplanade SA BELGIUM Fully consolidated (FC) 100.00 Parking Ladeuze NV BELGIUM Fully consolidated (FC) 100.00 Picavet BELGIUM Fully consolidated (FC) 100.00 Reniers & C° BELGIUM Fully consolidated (FC) 100.00 SADAR BELGIUM Fully consolidated (FC) 100.00 Satracom BELGIUM Fully consolidated (FC) 100.00 Sophibus BELGIUM Fully consolidated (FC) 100.00 SPRL Taxis Melkior BELGIUM Fully consolidated (FC) 100.00 SPRL Voyages F. Lenoir BELGIUM Fully consolidated (FC) 100.00 STACA (KBO) BELGIUM Fully consolidated (FC) 100.00 STEMI BELGIUM Fully consolidated (FC) 100.00 T.C.M. Cars BELGIUM Fully consolidated (FC) 100.00 Transports Penning BELGIUM Fully consolidated (FC) 100.00 Trimi BELGIUM Fully consolidated (FC) 100.00 Van Rompaye NV BELGIUM Fully consolidated (FC) 100.00
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 67 Consolidated financial statements 31 December 2020 2 2.3 Notes to the consolidated financial statements
Name Country Method of consolidation % of shareholding Voyages Doppagne BELGIUM Fully consolidated (FC) 100.00 Voyages Nicolay BELGIUM Fully consolidated (FC) 100.00 Keolis Canada Inc CANADA Fully consolidated (FC) 100.00 Keolis Grand River LP CANADA Fully consolidated (FC) 100.00 Keolis China CHINA Fully consolidated (FC) 100.00 Keolis Wuhan CHINA Fully consolidated (FC) 100.00 Keolis Denmark DENMARK Fully consolidated (FC) 100.00 Établissement Abu Dhabi UNITED ARAB EMIRATES Fully consolidated (FC) 100.00 Keolis Middle East DMCC UNITED ARAB EMIRATES Fully consolidated (FC) 100.00 Keolis España SPAIN Fully consolidated (FC) 100.00 Keolis America Inc. UNITED STATES Fully consolidated (FC) 100.00 Keolis Commuter Services LLC UNITED STATES Fully consolidated (FC) 60.00 Keolis Rail Service America UNITED STATES Fully consolidated (FC) 100.00 Keolis Rail Service Virginia UNITED STATES Fully consolidated (FC) 100.00 Keolis Transit America UNITED STATES Fully consolidated (FC) 100.00 Keolis Amey Operations/Gweithrediadau Keolis Amey Limited – the Operating Entity UK Fully consolidated (FC) 64.00 Keolis Amey Wales Cymru Limited – the Operating Delivery Partner UK Fully consolidated (FC) 60.00 Keolis UK UK Fully consolidated (FC) 100.00 Keolis-Amey Docklands Ltd UK Fully consolidated (FC) 70.00 KeolisAmey Metrolink UK Fully consolidated (FC) 60.00 Nottingham Trams Ltd UK Fully consolidated (FC) 80.00 Keolis Hyderabad Mass Rapid Transit System Private Limited INDIA Fully consolidated (FC) 100.00 Kilux LUXEMBOURG Fully consolidated (FC) 100.00 Keolis Norge AS NORWAY Fully consolidated (FC) 100.00 Keolis Mobilities BV NETHERLANDS Fully consolidated (FC) 100.00 Keolis Nederland BV (ex-Syntus) NETHERLANDS Fully consolidated (FC) 100.00 Keolis Asia Pte.Ltd. SINGAPORE Fully consolidated (FC) 100.00 CSG Commuter Security SWEDEN Fully consolidated (FC) 100.00 Keolis Nordic SWEDEN Fully consolidated (FC) 100.00 Keolis Spår AB SWEDEN Fully consolidated (FC) 100.00 Keolis Sverige SWEDEN Fully consolidated (FC) 100.00
* Including entries into the scope in 2020 (see below).
Name Country Method of consolidation % of shareholding Keolis Blois FRANCE Fully consolidated (FC) 100.00 Keolis Contrôle et Humanisation FRANCE Fully consolidated (FC) 100.00 Keolis Haut-Bugey FRANCE Fully consolidated (FC) 100.00 KORRIVA FRANCE Fully consolidated (FC) 100.00 Orset Investissement FRANCE Fully consolidated (FC) 100.00 Keolis Downer Adelaide AUSTRALIA Fully consolidated (FC) 51.00 Keolis Downer South Australia AUSTRALIA Fully consolidated (FC) 51.00
68 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.3 Notes to the consolidated financial statements
Companies removed from the consolidation scope in 2020 Name Country Method of consolidation % of shareholding Keolis Maritime FRANCE Not consolidated (NC) 0.00 LeCab FRANCE Not consolidated (NC) 0.00 Keolis Roissy Airport FRANCE Not consolidated (NC) 0.00 Keolis Abbeville FRANCE Not consolidated (NC) 0.00 Excellence Consulting FRANCE Not consolidated (NC) 0.00 Driverlite FRANCE Not consolidated (NC) 0.00 TMT (Take Me There) FRANCE Not consolidated (NC) 0.00
2.3.10.2 Joint ventures and associates Name Country Method of consolidation % of shareholding Albatrans FRANCE Equity method (EM) 36.20 CTCOP FRANCE Equity method (EM) 50.00 EFFIA SEM Roubaix FRANCE Equity method (EM) 50.00 Hello Paris FRANCE Equity method (EM) 50.00 Hello Paris Participations FRANCE Equity method (EM) 50.00 Hello Paris Services FRANCE Equity method (EM) 50.00 NAVLY FRANCE Equity method (EM) 50.00 OnePark FRANCE Equity method (EM) 35.94 Orgebus FRANCE Equity method (EM) 50.00 Park Grenoble Alpes Metropole FRANCE Equity method (EM) 49.99 RDK France FRANCE Equity method (EM) 50.00 SAEMES FRANCE Equity method (EM) 33.27 Scodec FRANCE Equity method (EM) 35.00 2 Sirius Plateforme Santé FRANCE Equity method (EM) 27.80 TICE FRANCE Equity method (EM) 19.00 Trans Pistes FRANCE Equity method (EM) 40.00 Transports de l’agglomération de Metz Métropole FRANCE Equity method (EM) 25.00 Netlog GERMANY Equity method (EM) 33.00 Galiliège BELGIUM Equity method (EM) 21.76 Parkeren Assen BELGIUM Equity method (EM) 44.40 Shanghai Keolis Public Transport Operation Management Co. CHINA Equity method (EM) 49.00 Wuhan Tianhe Airport Transport Center Operation and Management Co. Ltd CHINA Equity method (EM) 40.00 First/Keolis Holdings Limited UK Equity method (EM) 45.00 First/Keolis Transpennine UK Equity method (EM) 45.00 First/Keolis Transpennine Holding Ltd UK Equity method (EM) 45.00 Govia UK Equity method (EM) 35.00 Govia Thameslink Railway Limited UK Equity method (EM) 35.00 London Midland UK Equity method (EM) 35.00 London&South Eastern Railway – LSER UK Equity method (EM) 35.00 New Southern Railway UK Equity method (EM) 35.00 Southern Railway Ltd UK Equity method (EM) 35.00 Thameslink Rail Limited UK Equity method (EM) 35.00 RDK LLC (Qatar) QATAR Equity method (EM) 50.00 RKH Qitarat LLC QATAR Equity method (EM) 32.50
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 69 Consolidated financial statements 31 December 2020 2 2.4 statutory auditors’ report on the consolidated financial statements
2.4 STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
(Financial year ended 31 December 2020)
To the shareholders, GROUPE KEOLIS S.A.S. 20-22 rue le Peletier 75009 PARIS
Opinion In compliance with the assignment entrusted to us by your Annual Accounting estimates General Meeting, we have audited the accompanying consolidated The Group carries out impairment tests on goodwill and financial statements of Groupe Keolis S.A.S for the financial year indefinite life assets and also assesses whether there is any ended 31 December 2020. indication of impairment on non-current assets, as described in In our opinion, the consolidated financial statements give a true and notes 2.3.2.3, 2.3.2.4.10 and 2.3.5.1 to the financial statements. fair view of the assets and liabilities and of the financial position of We have examined the methods used to carry out this the Group as at 31 December 2019 and of the results of its impairment test as well as the corresponding cash flow forecasts operations for the year then ended in accordance with International and assumptions, and have verified that the notes to the Financial Reporting Standards as adopted by the European Union. consolidated financial statements provide appropriate disclosures. Basis of the opinion Note 2.3.2.4.18 specifies the valuation methods for provisions for pensions and other employee benefits. An evaluation of Audit standards these provisions was carried out by independent actuaries. Our We conducted our audit in accordance with professional standards work consisted in examining the data and assumptions used and applicable in France. We believe that the audit evidence we have verifying that note 2.3.5.14 to the consolidated financial obtained is sufficient and appropriate to provide a basis for our statements provides appropriate disclosures. opinion. Notes 2.3.2.3, 2.3.2.4.18 and 2.3.7 specify the methods used to Our responsibilities under those standards are further described in take into account the risks relating to ongoing litigation and the the “statutory auditors’ responsibilities for the audit of the annual profitability of contracts. Our work consisted in examining the financial statements” section of our report. procedures used by the Company to identify and assess these risks and the accounting treatment applied and in assessing the resulting estimates. Independence Notes 2.3.2.3, 2.3.2.4.21 and 2.3.3 specify the revenue We conducted our audit in accordance with the rules of recognition methods inherent in the adaptation of contractual independence set out in the French Commercial Code and in the clauses in the exceptional economic context. Our work consisted code of ethics for statutory auditors for the period from 1 January in examining the procedures used by the Company to identify 2020 to the date of publication of our report. and assess these risks and the accounting treatment applied and in assessing the resulting estimates. Justification of assessments As part of our assessments, we verified the reasonableness of The global crisis brought about by the COVID-19 pandemic creates these estimates. special conditions for the preparation and audit of this year’s financial statements. This crisis and the exceptional measures taken The assessments made are in the context of the audit of the in the context of the state of health emergency are having multiple consolidated financial statements taken as a whole and the consequences for companies, particularly on their business and formation of our opinion expressed above. We do not express an financing, as well as increasing uncertainty about their future opinion on elements of these consolidated financial statements in outlook. Some of these measures, such as travel restrictions and isolation. teleworking, have also had an impact on the internal organisation of companies and on the way audits are carried out. Specific verifications It is in this complex and changing context that, in accordance with As required by law we have also made specific checks, in the provisions of articles L. 823-9 and R. 823-7 of the French accordance with professional standards applicable in France, on Commercial Code relating to the justification of our assessments, information pertaining to the Group presented in the management we bring to your attention the following assessments, which, in our report of the Board of Directors. professional judgement, were the most significant for the audit of We have no matters to report as to its fair presentation and its the consolidated financial statements for the year. consistency with the consolidated financial statements.
70 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Consolidated financial statements 31 December 2020 2.4 statutory auditors’ report on the consolidated financial statements
Responsibilities of management And furthermore: and those charged with governance identifies and assesses the risks of material misstatement of the for the consolidated financial statements consolidated financial statements, whether due to fraud or error, Management is responsible for the preparation and fair designs and performs audit procedures responsive to those presentation of the consolidated financial statements in accordance risks, and obtains audit evidence considered to be sufficient and with International Financial Reporting Standards as adopted in the appropriate to provide a basis for his opinion. the risk of not European Union and for such internal control as management detecting a material misstatement resulting from fraud is higher determines is necessary to enable the preparation of consolidated than for one resulting from error, as fraud may involve collusion, financial statements that are free from material misstatement, forgery, intentional omissions, misrepresentations, or the override whether due to fraud or error. of internal control; In preparing the consolidated financial statements, management is obtains an understanding of internal control relevant to the audit responsible for assessing the Company’s ability to continue as a in order to design audit procedures that are appropriate in the going concern, disclosing, as applicable, matters related to going circumstances, but not for the purpose of expressing an opinion concern and using the going concern basis of accounting unless it on the effectiveness of the internal control; is expected to liquidate the Company or to cease operations. evaluates the appropriateness of accounting policies used and The consolidated financial statements were approved by the the reasonableness of accounting estimates and related Chairman of the Board of Directors. disclosures made by management in the consolidated financial statements; Statutory auditors’ responsibilities for the audit assesses the appropriateness of management’s use of the going of the annual financial statements concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events Our role is to issue a report on the consolidated financial or conditions that may cast significant doubt on the Company’s statements. Our objective is to obtain reasonable assurance about ability to continue as a going concern. This assessment is based whether the consolidated financial statements as a whole are free on the audit evidence obtained up to the date of his audit report. from material misstatement. Reasonable assurance is a high level of However, future events or conditions may cause the Company to assurance, but is not a guarantee that an audit conducted in cease to continue as a going concern. If the statutory auditor accordance with professional standards will always detect a concludes that a material uncertainty exists, there is a material misstatement when it exists. Misstatements can arise from requirement to draw attention in the audit report to the related fraud or error and are considered material if, individually or in the disclosures in the consolidated financial statements or, if such aggregate, they could reasonably be expected to influence the disclosures are not provided or inadequate, to modify the opinion economic decisions of users taken on the basis of these financial expressed therein; statements. evaluates the overall presentation of the consolidated financial As specified in Article L. 823-10-1 of the French Commercial Code, statements and assesses whether these statements represent 2 our statutory audit does not include assurance on the viability of the the underlying transactions and events in a manner that Company or the quality of management of the affairs of the achieves fair presentation; Company. obtains sufficient appropriate audit evidence regarding the As part of an audit conducted in accordance with professional financial information of the entities or business activities within standards applicable in France, the statutory auditor exercises the Group to express an opinion on the consolidated financial professional judgment throughout the audit. statements. The statutory auditor is responsible for the direction, supervision and performance of the audit of the consolidated financial statements and for the opinion expressed on these consolidated financial statements.
Neuilly-sur-Seine and Paris-La Défense, 26 February 2021 The statutory auditors
PricewaterhouseCoopers Audit ERNST & YOUNG Audit Françoise Garnier Jérôme GUIRAUDEN
GROUPE KEOLIS S.A.S. FINANCIAL REPORT 71 2 Consolidated financial statements 31 December 2020
72 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com 3 ANNUAL FINANCIAL STATEMENTS
3.1 FINANCIAL STATEMENTS 3.2.3 NOTES TO THE BALANCE SHEET AT 31 DECEMBER 2020 74 ASSETS 81
3.1.1BALANCE SHEET AT 31/12/2020 74 3.2.4 NOTES TO THE BALANCE SHEET LIABILITIES 84 3.1.2INCOME STATEMENT AT 31/12/2020 76 3.2.5NOTES TO THE INCOME STATEMENT 88 3.2APPENDIX 78 3.2.6OTHER INFORMATION 89
3.2.1 SIGNIFICANT EVENTS 3.2.7 SIGNIFICANT EVENTS SINCE THE END OF THE FINANCIAL YEAR 79 OF THE FINANCIAL YEAR 91
3.2.2 ACCOUNTING PRINCIPLES, RULES 3.3 STATUTORY AUDITORS’ AND METHODS 79 REPORT ON THE ANNUAL FINANCIAL STATEMENTS 92
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 73 Annual financial statements 3 3.1 Financial statements at 31 December 2020
3.1 FINANCIAL STATEMENTS AT 31 DECEMBER 2020
3.1.1 BALANCE SHEET AT 31/12/2020
Balance sheet assets Items (€) Amount gross Alloc. to Prov. Net 31/12/2020 Net 31/12/2019 Uncalled subscribed capital - - - - Intangible assets Preliminary expenses - - - - Development costs - - - - Concessions, patents and related rights - - - - Goodwill - - - - Other intangible assets - - - 121,000 Advances, down payments for intangible assets - - - - Property, plant and equipment Land - - - - Buildings - - - - Technical facilities, equipment, machinery - - - - Other property, plant and equipment - - - - PPE under construction - - - - Advances and down payments - - - - Financial assets Shareholdings under the equity method Other shareholdings 1,842,992,524 74,186,047 1,768,806,477 1,488,482,524 Receivables from shareholdings 650,886 - 650,886 183,063,700 Other long-term investments - - - - Loans 8,849,631 8,849,631 - 1,375,000 Other financial assets 538 - 538 538
FIXED ASSET 1,852,493,579 83,035,678 1,769,457,901 1,673,042,762 Inventories and work in progress Raw materials, supplies - - - - Production in progress (goods) - - - - Production in progress (services) - - - - Semi-finished and finished goods - - - - Goods - - - - Advances and down payments on orders - - - - Receivables Trade receivables and related accounts 4,982,599 - 4,982,599 12,384,754 Other receivables 52,091,499 - 52,091,499 121,896,803 Subscribed called non paid-up capital - - - - Miscellaneous Marketable securities 105 - 105 105 Cash 178,233 - 178,233 - Accruals Prepaid Expenses 45,312 - 45,312 45,312 TOTAL CURRENT ASSETS 57,297,748 - 57,297,748 134,326,975 Loan issue expenses to spread - - - - Bond repayment premiums - - - - Foreign exchange translation difference, assets - - - -
TOTAL ASSETS 1,909,791,327 83,035,678 1,826,755,649 1,807,369,736
74 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.1 Financial statements at 31 December 2020
Balance sheet liabilities Items (€) 2020 financial year 2019 financial year Share capital or individual capital (of which paid: 237,888,902) 237,888,902 237,888,902 Additional paid-in capital 273,246,055 273,246,055 Purchase accounting asset revaluations - - Legal reserve 11,149,542 11,149,542 Statutory or contractual reserves - - Regulated reserves - - Other reserves 2,386,768 2,386,768 Retained earnings 88,966,198 116,057,325 NET PROFIT/(LOSS) FOR THE FINANCIAL YEAR (29,796,733) (27,091,127) Investment grants - - Regulated provisions 508,720 365.067 TOTAL EQUITY 584,349,452 614,002,531 Income from issues of equity investments - - Conditional advances - - Grantor rights - - OTHER EQUITY Provisions for contingencies - - Provisions for charges 13,453,446 9,690,856 TOTAL PROVISIONS 13,453,446 9,690,856 Financial debt Convertible bond issues - - Other bond issues - - Bank borrowings 898,193,895 877,329,478 Miscellaneous financial debts and long-term borrowings 217,435,742 145,353,796 Customer advances and down payments - - Trade liabilities Trade payables and related accounts 3,190,498 2,892,837 Tax and social security debts 1,915,312 4,692,612 Other liabilities Liabilities on fixed assets and related accounts - 145,200 Other liabilities 108,217,304 153,262,426 Accruals Deferred income - - LIABILITIES AND ACCRUALS 1,228,952,751 1,183,676,349 Unrealised gains on foreign exchange transactions - -
TOTAL ASSETS 1,826,755,649 1,807,369,736 3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 75 Annual financial statements 3 3.1 Financial statements at 31 December 2020
3.1.2 INCOME STATEMENT AT 31/12/2020
Items (€) 2020 financial year 2019 financial year Sales of merchandise - - Sales of goods - - Sales of services 10,549,454 13,228,787
NET REVENUE 10,549,454 13,228,787 Production held as inventory - - Capitalised production - - Operating grants - - Reversals on imp., prov. (and dep./amort), expense transfers 9,424,332 17,524,946 Other income 189 79
OPERATING REVENUE 19,973,975 30,753,812 Stock purchases (including customs duties) - - Change in inventory of goods - - Purchases of raw materials and other supplies - - Change in inventory purchases (raw materials and supplies) - - Other purchases and operating expenses 8,300,053 7,286,779 Taxes and similar payments 291,574 696,211 Wages and salaries 3,578,393 4,448,985 Welfare contributions 960,111 1,666,309 Operating allowances: On fixed assets: allocations to depreciation and amortisation - - On fixed assets: allocations to impairments - - On current assets: charges to impairments - - Allocations to provisions 13,452,922 9,421,239 Other charges 360,007 348,988
OPERATING EXPENSES 26,943,060 23,868,510
OPERATING PROFIT/LOSS (6,969,085) 6,885,301
JOINT VENTURES Profit allocated or loss transferred - - Loss suffered or profit transferred - -
FINANCIAL INCOME 2,198,852 10,676,412 Financial income from shareholdings 2,146,816 10,256,051 Other marketable and receivables from capitalised assets - - Other interest and similar income 52,036 420,361 Reversal of provisions charged and expense transfers - - Foreign exchange gains - - Net gains on sales of marketable securities - -
76 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.1 Financial statements at 31 December 2020
Items (€) 2020 financial year 2019 financial year
FINANCIAL EXPENSES 42,419,760 63,291,532 Depreciation, amortisation and provisions 28,525,678 54,510,000 Interest and similar expenses 13,894,082 8,781,532 Foreign exchange losses - - Net expenses on sales of marketable securities - -
NET TOTAL (40,220,908) (52,615,120)
RECURRING PROFIT BEFORE TAX (47,189,993) (45,729,819)
EXCEPTIONAL GAINS 274,315 10,000 Exceptional gains on operations 8,315 - Exceptional gains on equity transactions - 10,000 Reversal of provisions charged and expense transfers 266,000 -
EXCEPTIONAL LOSSES 143,654 419,654 Exceptional losses on operations - - Exceptional losses on equity transactions - 10,000 Exceptional depreciation, amortisation and provisions 143,654 409,654
EXCEPTIONAL INCOME 130,662 (409,654) Employee profit-sharing - - Income tax (17,262,598) (19,048,346)
TOTAL INCOME 22,447,142 41,440,223
TOTAL CHARGES 52,243,875 68,531,350
PROFIT OR LOSS (29,796,733) (27,091,127)
3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 77 Annual financial statements 3 3.2 Appendix
3.2 APPENDIX
3.2.1SIGNIFICANT EVENTS OF THE FINANCIAL YEAR 79 3.2.5NOTES TO THE INCOME STATEMENT 88 3.2.2ACCOUNTING PRINCIPLES, RULES AND METHODS 79 3.2.5.1Breakdown of revenue 88 3.2.2.1Contracts managed 79 3.2.5.2Breakdown of other operating income and expenses 88 3.2.2.2Fixed assets 79 3.2.5.3Share of income from joint ventures 88 3.2.2.3Information on inventories 79 3.2.5.4Transfer of expenses 88 3.2.2.4Information on receivables and payables 79 3.2.5.5Gains and losses relating to previous financial years 88 3.2.2.5Marketable securities 79 3.2.5.6Exceptional income and expense 89 3.2.2.6Cash and cash equivalents 80 3.2.5.7Income tax 89 3.2.2.7Provisions for contingencies and charges 80 3.2.6OTHER INFORMATION 89 3.2.2.8Employee benefits 80 3.2.6.1Transactions with related parties 89 3.2.2.9Government investment grants 80 3.2.6.2Financial commitments 89 3.2.2.10Tax status 80 3.2.6.3Pension and long service award commitments 90 3.2.3NOTES TO THE BALANCE SHEET ASSETS 81 3.2.6.4Information on leasing 90 3.2.3.1Fixed assets 81 3.2.6.5Average workforce 91 3.2.3.2Table of depreciation and amortisation 81 3.2.6.6 Remuneration of administration, management 3.2.3.3Table of financial assets 81 or supervisory bodies 91 3.2.3.4Receivables 82 3.2.6.7Identity of the consolidating company 91 3.2.3.5Breakdown of accrued income 83 3.2.6.8Information on subsidiaries and equity investments 91 3.2.3.6Breakdown of deferred income and expenses 83 3.2.7 SIGNIFICANT EVENTS SINCE THE END 3.2.4NOTES TO THE BALANCE SHEET LIABILITIES 84 OF THE FINANCIAL YEAR 91 3.2.4.1Equity 84 3.2.4.2Provisions 85 3.2.4.3Liabilities and accruals maturity schedule 86 3.2.4.4Trade liabilities 86 3.2.4.5Breakdown of accrued liabilities 87 3.2.4.6 Exchange differences on receivables and payables in foreign currencies 87
78 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.2 Appendix
3.2.1 SIGNIFICANT EVENTS OF THE FINANCIAL YEAR
Syndicated loan amendment New syndicated credit facility On 6 July 2020, GROUPE KEOLIS S.A.S. signed an amendment to On 29 July 2020, GROUPE KEOLIS S.A.S. set up a new syndicated the syndicated loan contract initially signed on 12 July 2013. The credit facility of €350 million with some of the pool of partner banks principal features of this amendment are: already participating in the main syndicated credit facility of a borrowing envelope unchanged at €900 million; €900 million. maturity extended to 27 July 2025. This facility was contracted for a period of 2 years. These new provisions will begin to apply from the accounting close At 31 December 2020, the amount drawn was €0 million and the of 30 July 2020. undrawn balance stood at €350 million. By virtue of the principle of debt continuity, none of the nominal sum was reimbursed when the amendment was concluded. Subscription to the capital increase GROUPE KEOLIS S.A.S. subscribed to 25,000,000 new Keolis S.A. At 31 December 2020, the amount drawn was €600 million and shares with a par value of €12 during the Extraordinary Annual the undrawn balance stood at €300 million. General Meeting of 22 December 2020. The total amount of the capital increase was €300 million, of which €117 million was paid in cash and €183 million by offsetting receivables.
3.2.2 ACCOUNTING PRINCIPLES, RULES AND METHODS
These annual financial statements are prepared in accordance with 3.2.2.2.3 Financial assets the rules laid down by the general chart of accounts in accordance with regulation ANC N°2014-03 dated 5 June 2014, amended by EQUITY INVESTMENTS the regulation ANC 2015-06, of the French Accounting Standards Authority (Autorité des Normes Comptables) and principles Equity investments are recorded at acquisition cost. If this value is generally accepted in the profession. greater than the asset value an impairment is recognised for the difference. For each investment, the asset value is determined General conventions were applied in compliance with the prudence based on the future cash flows which their business activity could principle, in accordance with the basic assumptions of: generate. Where the subsidiary has negative equity, we depreciate continuity of operations; the entire investment. consistency of accounting methods from one financial year to another; OTHER FINANCIAL ASSETS independence of financial years. Other financial assets are recorded on the balance sheet at their acquisition cost. Where relevant, an impairment is recorded when The underlying method used to value the items in the accounts their value in use falls below their acquisition cost. is the historical cost method. In preparing the financial statements, the adjustments to the 3.2.2.3 Information on inventories general accounting plan PGC (articles 111-1 and 831-1/1) were not used. Nil The main accounting policies used are described below. 3.2.2.4 Information on receivables and payables Receivables are recorded at their nominal value. 3.2.2.1 Contracts managed Nil Where applicable, an impairment is recognised whenever there is a risk of non-recovery. 3.2.2.2 Fixed assets Receivables and payables in foreign currency are converted at the closing exchange rate of the financial period. The difference resulting from this adjustment is recognised in the year’s income 3 3.2.2.2.1 Intangible assets statement under “Foreign exchange gains” or “losses”. A provision is booked for unrealised losses on foreign exchange transactions; OTHER INTANGIBLE ASSETS unrealised gains do not appear in the income statement. Other intangible assets consist of the costs of acquiring financial assets. 3.2.2.5 Marketable securities Nil 3.2.2.2.2 Property, plant and equipment Nil
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 79 Annual financial statements 3 3.2 Appendix
3.2.2.6 Cash and cash equivalents from a past event, whose amount can be reliably estimated and Cash in foreign currency is converted at the last exchange rate of where it is probable that its settlement will cause an outflow of the financial year, with the difference resulting from this adjustment resources without compensation of at least an equivalent amount. being recognised in the profit or loss for the financial year, foreign exchange losses or foreign exchange gains. 3.2.2.8 Employee benefits Employee benefits relate to payments due on retirement and long 3.2.2.7 Provisions for contingencies service awards. and charges Evaluations of these obligations are carried out annually using the A provision for contingencies and charges is recorded when the projected unit credit method. Company has a legal or implicit obligation to a third party arising
The main actuarial assumptions used for the assessment of employee benefits are:
Tax depreciation period Coefficient Discount rate 0.21% Long-term expected inflation rate 1.60% Rate of increase of payrolls used to calculate payments due on retirement 4.92% Average turnover rate 1.63% At the initiative of the Type of retirement employee Mortality table INSEE TD/TV 2014 -2016
3.2.2.9 Government investment grants 3.2.2.10 Tax status Nil The Company’s results are incorporated within a group tax regime. The parent company of the tax group is GROUPE KEOLIS S.A.S. The agreement requires the Company to calculate the tax expense as if it were taxed separately. The savings achieved by the tax group regime from carried forward tax losses are taken by the parent company in its income statement. However, they are reallocated to the subsidiary as and when its future profits are earned.
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3.2.3 NOTES TO THE BALANCE SHEET ASSETS
3.2.3.1 Fixed assets Transfers corrections At (€) At 31/12/2019 Acquisitions and +/- Disposals 31/12/2020 Start-up and development expenses - - - - - Other intangible assets item(1) 121,000 - 121,000 - -
Total 1 Intangible 121,000 - 121,000 - - Land - - - - - Buildings on own land - - - - - Buildings not on own land - - - - - Building facilities, fixtures and fittings… - - - - - General facilities and fixtures and fittings - - - - - Technical facilities, equipment, machinery - - - - - Transport equipment - - - - - Office and IT equipment, furniture - - - - - Recoverable packaging and miscellaneous - - - - -
Total 2 Tangible - - - - - Property, plant and equipment in progress - - - - -
Total 3 Property, plant and equipment - - - - - Advances - - - - -
TOTAL 121,000 - 121,000 - -
(1) Other intangible assets: Other intangible assets relate to the costs of acquiring securities.
3.2.3.2 Table of depreciation and amortisation Nil
3.2.3.3 Table of financial assets
Acquisitions Disposals Gross value at and and Gross value at Net value at (€) 31/12/2019 transfers transfers 31/12/2020 Provisions 31/12/2020 Shareholdings valued under the equity method Other shareholdings(1) 1,542,992,524 300,000,000 - 1,842,992,524 74,186,047 1,768,806,477 Other long-term 3 investments ------Loans and other financial assets 1,375,000 7,474,631 - 8,849,631 8,849,631 -
TOTAL 1,544,367,524 307,474,631 - 1,851,842,155 83,035,678 1,768,806,477
(1) Capital increase of Keolis S.A. for €300 million.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 81 Annual financial statements 3 3.2 Appendix
3.2.3.4 Receivables
3.2.3.4.1 Receivables maturity schedule Due in less More than (€) Amount gross than one year one year Fixed assets Receivables from shareholdings 650,886 650,886 - Loans 8,849,631 514,511 8,335,120 Other financial assets 538 538 - Total current assets Trade receivables 4,982,599 4,982,599 - Doubtful receivables - - - Personnel and related accounts 1,602 1,602 - Social entities 4,315 4,315 - State: miscellaneous taxes and duties 34,815,646 34,815,646 - Group and associates 16,370,955 16,370,955 - Sundry debtors 898,981 898,981 - Prepaid Expenses 45,312 45,312 -
TOTAL 66,620,465 58,285,345 8,335,120
3.2.3.4.2 Trade receivables and related accounts
Receivables (€) Gross amount Alloc. to Prov. Net 31/12/2020 Net 31/12/2019 Trade receivables and related accounts 4,982,599 - 4,982,599 12,384,754 Other receivables 52,091,499 - 52,091,499 121,876,623 Subscribed called non paid-up capital - - - -
TOTAL 57,072,496 - 57,072,496 134,261,377
Of which Group receivables:
Group receivables (€) 31/12/2020 31/12/2019 Consolidated affiliate client companies France 1,196,254 7,119,714 Parent client companies and Miscellaneous - - Consolidated affiliate client companies - - Client invoices to issue Group 3,780,548 5,259,244
TOTAL 4,976,802 12,378,958
82 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.2 Appendix
3.2.3.5 Breakdown of accrued income Item 31/12/2020 31/12/2019
Accrued income 5,815,402 5,412,944 Receivables from shareholdings 650,886 153,700 Accrued interest not yet due on receivables from shareholdings 650,886 153,700 Other financial assets 514,511 - Accrued interest on other loans 514,511 - Trade receivables and related accounts 3,780,548 5,259,244 Group clients – Invoice to issue 3,780,548 5,259,244 Other receivables 869,456 - Group suppliers Receivables 869,456 -
TOTAL 5,815,402 5,412,944
3.2.3.6 Breakdown of deferred income and expenses Item 31/12/2020 31/12/2019
Prepaid Expenses 45,312 45,312 Operating income/expenses 45,312 45,312 Deferred income – Suppliers outside Group 45,312 45,312
TOTAL 45,312 45,312
3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 83 Annual financial statements 3 3.2 Appendix
3.2.4 NOTES TO THE BALANCE SHEET LIABILITIES
3.2.4.1 Equity Balance Situation at the beginning of the financial year at 1/1/2020 Equity before distributions of prior year retained profits 614,002,531 Distributions of prior year retained profits - Equity after distributions of prior year retained profits 614,002,531
Change during the financial year Negative Positive Changes in capital - - Distributions of prior year retained profits - - Equity after distributions of prior year retained profits - - Changes in share premium - - Changes in reserves - - Changes in investment subsidies - - Changes in regulated provisions - 143,654 Other changes - - Profit for the financial year 29,796,733 -
Balance 29,796,733 143,654 BALANCE SITUATION AT THE END OF THE FINANCIAL YEAR AT 31/12/2020 Equity before appropriation 584,349,452
Share capital The Company’s share capital amounts to €237,888,901.80, GROUPE KEOLIS S.A.S. holds 0.14% of its own capital, i.e. consisting of 180,218,865 shares with a par value of €1.32 each. 253,152 shares (with a par value of €1.32 each). These shares do not carry voting rights.
Allocation of net income for the previous financial year Annual General Meeting of 05/05/2020 allocated the income from the 2019 financial year, amounting to (€27,091,127), as follows:
Allocations (€) 2020 Legal reserve - Other reserves - Dividends paid - Other transfers - Retained earnings (27,091,127)
Regulated provisions Regulated provisions include €508,720 relating to special depreciation and amortisation allowances, including €143,654 charged to the financial year.
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3.2.4.2 Provisions
3.2.4.2.1 Provisions for charges
(€) At 31/12/2019 Charge Reversals At 31/12/2020 Provisions for pensions and similar commitments 4,876 - 4,352 524 Tax provisions 9,419,980 13,452,922 9,419,980 13,452,922 Provisions for fixed asset renewals - - - - Provisions for major maintenance - - - - Provision for tax and welfare contributions on staff leave - - - - Other provisions for contingencies and charges 266,000 - 266,000 -
TOTAL 9,690,856 13,452,922 9,690,332 13,453,446
3.2.4.2.2 Provisions for impairment Impairment of assets was recorded for an amount of €28,525,678 at 31/12/2020, compared to €54,510,000 at 31/12/2019. They mainly concern equity investments and loans.
(€) At 31/12/2019 Charge Reversals At 31/12/2020 Provisions on intangible assets - - - - Provisions on property, plant and equipment - - - - Provisions on investments under the equity method - - - - Provisions on equity investments(1) 54,510,000 19,676,047 - 74,186,047 Provisions on other financial assets(2) - 8,849,631 - 8,849,631
Total 1 54,510,000 28,525,678 - 83,035,678 Inventories and work in progress - - - -
Total 2 - - - - Doubtful receivables - - - - Other receivables - - - -
Total 3 - - - -
TOTAL 54,510,000 28,525,678 - 83,035,678
(1) KEOMOTION, wholly-owned by GROUPE KEOLIS S.A.S., which had a negative net position at 31/12/2020. In accordance with the Group method specified in section 3.2.2.2.3, the value of its shares in GROUPE KEOLIS S.A.S. was fully impaired in 2019. ONE PARK, 36%-owned by GROUPE KEOLIS S.A.S., which had a negative net position at 31/12/2020. The value of its shares in GROUPE KEOLIS S.A.S. is fully impaired. (2) ONE PARK, loans held are fully impaired. 3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 85 Annual financial statements 3 3.2 Appendix
3.2.4.3 Liabilities and accruals maturity schedule
Gross amount Less than Liabilities and accruals (€) end of fin. yr. 1 year 1 to 5 years Over 5 years Convertible bond issues - - - - Other bond issues - - - - Bank borrowings: - - - - up to 1 year at the outset 1,783,617 1,783,617 - - over 1 year at the outset 896,410,278 - 896,410,278 - Miscellaneous financial debts and long-term borrowings 217,435,742 435,742 217,000,000 - Trade payables 3,190,498 3,190,498 - - Personnel and related accounts 563,249 563,249 - - Social security and other social entities 405,113 405,113 - - State and other public authorities: - - - - Income tax - - - - Value added tax 885,343 885,343 - - Guaranteed bonds - - - - Other taxes and related accounts 61,608 61,608 - - Liabilities on fixed assets and related accounts - - - - Group and associates 106,944,829 106,944,829 - - Other liabilities 1,272,476 1,272,476 - - Payables on securities borrowed provided as collateral - - - - Deferred income - - - -
TOTAL 1,228,952,753 115,542,475 1,113,410,278 - Loans taken out during the financial year 320,000,000 Loans repaid during the financial year 300,000,000
3.2.4.4 Trade liabilities
3.2.4.4.1 Trade payables and related accounts At At (€) 31/12/2020 31/12/2019 Group suppliers 46,900 333,978 Suppliers France - - Foreign Suppliers - - Notes payable other than Group - - Notes payable Group - - Suppliers, invoices not yet received 103,200 2,558,858
TOTAL 150,100 2,892,836
86 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.2 Appendix
3.2.4.5 Breakdown of accrued liabilities
Item 31/12/2020 31/12/2019
Accrued liabilities 7,065,898 6,296,108 Financial debt and long-term borrowings 813,942 286,891 Accrued interest not yet due on bank borrowings 813,942 286,891 Financial debt and long-term borrowings 435,742 353,796 Accrued interest not yet due on loans 435,742 353,796 Trade payables and related accounts 3,143,598 2,558,858 Suppliers – Unbilled payables on other goods and services 2,568,410 2,550,774 Suppliers outside Group – Automatic unbilled payables 471,987 8,084 Group suppliers – Unbilled payables on other goods and services 103,200 - Debts on fixed assets - 145,200 Suppliers – Unbilled payables on fixed assets - 145,200 Other liabilities 897,658 - Group clients Credit notes to be issued 897,658 - Tax and social security debts 849,655 2,362,677 Provisions for paid leave 92,087 175,355 Staff NDF (1,602) - Provisions for employee “time savings” plan 42,019 23,395 Provision for variable target-based bonuses 429,143 1,446,399 Provisions for social charges on paid leave 36,835 70,142 Provisions for social charges on employee “time savings” plans 7,450 9,358 Provisions for social charges on target-based bonuses 171,658 607,058 Accruals – Construction fund 36 20 Accruals – Training 1% 46,402 5,461 Accruals – Apprenticeship tax 25,628 177 Accruals – Tax on salaries - 25,311 Accrued interest on overdraft 925,304 588,685 Accrued interest not yet due on Bank 925,304 588,685
TOTAL 7,065,898 6,296,108
3.2.4.6 Exchange differences on receivables and payables in foreign currencies Nil 3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 87 Annual financial statements 3 3.2 Appendix
3.2.5 NOTES TO THE INCOME STATEMENT
3.2.5.1 Breakdown of revenue The Company generates most of its revenue in France.
2019 2020 financial year financial year
(€) France Export at intra. Total Total Sales of merchandise - - - - Sales of goods - - - - Sales of services 10,549,454 - 10,549,454 13,228,787
REVENUE 10,549,454 - 10,549,454 13,228,787
3.2.5.2 Breakdown of other operating income and expenses
Other income (€) At 31/12/2020 At 31/12/2019 Sales price of transport equipment - - Settlement differences 189 79 Other - -
TOTAL 189 79
Other expenses (€) At 31/12/2020 At 31/12/2019 Fees for concessions, patents, etc. - Attendance fees 360,000 348,334 Losses on irrecoverable receivables - - Council and meeting expenses - - Carrying amount of transport equipment sold - - Settlement differences 7 654 Other - -
TOTAL 360,007 348,988
3.2.5.3 Share of income from joint ventures Nil
3.2.5.4 Transfer of expenses Nil
3.2.5.5 Gains and losses relating to previous financial years Nil
88 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.2 Appendix
3.2.5.6 Exceptional income and expense Allocated Type of expenses (€) Amount to account Nil -
TOTAL -
Allocated Type of products (€) Amount to account Miscellaneous adjustments 8,315 771,800
TOTAL 8,315
3.2.5.7 Income tax
Breakdown of tax between profit from ordinary activities and exceptional items
Distribution (€) Profit before tax Tax rate Tax due Net profit after tax Current (47,189,993) - - (47,189,993) Exceptional 130,662 - - 130,662 Tax integration - - (17,262,598) 17,262,598 Exceptional contribution - - - -
ACCOUNTING INCOME (47,059,331) - (17,262,598) (29,796,733)
3.2.6 OTHER INFORMATION
3.2.6.1 Transactions with related parties Interest rate and foreign exchange derivative financial instruments No disclosures are made concerning related party transactions are traded with first-class bank counterparties in accordance with insofar as these transactions were undertaken according to normal the GROUPE KEOLIS S.A.S. counterparty risk management policy. market conditions. Interest rate risks relating to variable-rate 3.2.6.2 Financial commitments borrowings GROUPE KEOLIS S.A.S. uses derivative financial instruments to The GROUPE KEOLIS S.A.S. interest rate risk exposure results manage its exposure to financial risks resulting from its financial from its financial debt. and investing activities: The GROUPE KEOLIS S.A.S. financial debt mainly relates to its interest rate risk; confirmed syndicated loan agreement dated 12 July 2013 arranged with a syndicate of 13 banks for a nominal amount of €800 million, foreign exchange risk. maturing on 12 July 2018. This line was amended on 11 June At the end of the financial year, unrealised gains are not recognised 2015 to increase its nominal amount to €900 million, and extend its in the accounts. Unrealised losses are accounted for except when maturity until 11 June 2020, then again on 27 July 2018 to adjust they relate to instruments qualified as hedging and falling within the Covenants to the application of IFRS 16 from 1 January 2019 one of the following two cases: and to extend the maturity date to 27 July 2023 and 17 June 2019 3 to further extend the maturity date to 27 July 2024. Lastly, on to hedge underlying items in the balance sheet which have not 6 July 2020, a new amendment to the syndicated loan agreement been revalued; was signed. to hedge future cash flows expected in a future financial year, The principal features of this amendment are: under the principle of matching the accounting impact in the same financial year. a borrowing envelope unchanged at €900 million; The gains and losses realised are reported in the same income maturity extended to 27 July 2025. statement as the income and expenses on the hedged item. On 29 July 2020, Groupe Keolis S.A.S set up a new syndicated credit facility of €350 million with some of the pool of partner banks already participating in the main syndicated credit facility of €900 million.
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 89 Annual financial statements 3 3.2 Appendix
This facility was contracted for a period of 2 years. cap calls; To cover the interest rate risk, Groupe Keolis S.A.S uses standard, floor puts are associated with cap calls to create a symmetrical liquid and market-available derivative financial instruments: or asymmetrical collar; swaps; cap puts to unwind an existing cap or to realise a cap spread; floor calls, in particular to buy back floors that constitute asymmetrical collars The distribution of GROUPE KEOLIS S.A.S. debt between fixed and variable rates, without taking into account the derivative’s portfolio is as follows:
(€ million) At 31 December 2020 At 31 December 2019 Variable rates 1,073.4 981.4 Fixed rates 41.3 40.6 Financial debt and long-term borrowings 1,113.4 1,022.0 Cash and cash equivalents at variable rates - (51.8) Cash and cash equivalents at fixed rates - - Cash and cash equivalents - (51.8) Accrued interest receivable (1.2) (0.2) Loans and receivables - (182.9) Deposits, guarantees and participating loans (8.3) (1.4) Derivative assets - (0.2) Accrued interest payable - -
NET FINANCIAL DEBT 1,122.9 785.5
GROUPE KEOLIS S.A.S. is subject to variations in interest rates on The instruments used by the Group are standard, liquid and the part of its net financial debt at variable rates. At 31 December market-available: 2020, an immediate increase of 50 basis points of market interest forward and futures sales and purchases; rates, based on unchanged net financial debt, would increase the annual cost of debt by €0.2 million and in parallel would have foreign exchange swaps; virtually no effect on financial income on cash and cash equivalents call options; and financial income of variable rate receivables. put options in combination with call options to provide symmetric Taking into account the impact of interest rate hedges, an or asymmetric collars. immediate increase of 50 basis points in market interest rates on an unchanged amount of net financial debt would reduce the net debt At 31 December 2020, GROUPE KEOLIS S.A.S. had no open cost by €0.7 million. foreign exchange positions. Equally, an immediate decrease of 50 basis points in market interest rates on an unchanged amount of net financial debt, and 3.2.6.3 Pension and long service award taking into account the impact of interest rate hedges, would commitments increase the net annual debt cost by €0.7 million. At 31 December 2020, the first available, confirmed and undrawn Retirement payments syndicated credit facility is for €300 million. This credit line is The amount of retirement payment liabilities at 31 December available to GROUPE KEOLIS S.A.S. and Keolis S.A. 2020 stands at €166,614. At 31 December 2020, the second available, confirmed and No provisions have been set aside for this sum in the annual undrawn syndicated credit facility is for €350 million. This credit line financial statements and it appears under financial commitments. is available to GROUPE KEOLIS S.A.S. Long service awards Foreign exchange risk The amount provided for in the annual financial statements relating The company GROUPE KEOLIS S.A.S., given its status as the to long-service awards is €524 thousand at 31 December 2020. parent company of the Group, carries out net investments in foreign currencies in the capital of its foreign subsidiaries. To cover the 3.2.6.4 Information on leasing foreign exchange risk engendered by these investments, GROUPE Nil KEOLIS S.A.S. uses derivative financial instruments for limited amounts. Management’s objective is to protect the reference exchange rate defined for the year.
90 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.2 Appendix
3.2.6.5 Average workforce Headcount Employees Managers 7
TOTAL 7
3.2.6.6 Remuneration of administration, 3.2.6.7 Identity of the consolidating company management or supervisory bodies The Company belongs a group whose consolidating company is Remuneration made to management bodies is not disclosed, as this SNCF PARTICIPATIONS, incorporated and domiciled in France, would indirectly reveal individual remuneration. under SIRET number 572 150 977 01839, whose registered office is located at 9 Jean-Philippe Rameau -93 212 LA PLAINE ST Attendance fees paid to Board members amount to €360,000. DENIS CEDEX. The Company’s accounts are fully consolidated within the consolidated financial statements of SNCF PARTICIPATIONS.
3.2.6.8 Information on subsidiaries and equity investments Amount Equity Companies concerned of share capital Capital held including income Net income (€) Keolis S.A. 619,793,616 100% 287,913,217 (342,343,520) EFFIA SAS 3,136,000 100% 76,139,386 20,715,628 KEOMOTION 54,510,000 100% (49,714,308) 4,485,918 KLP15 10,000 100% 10,000 - ONEPARK(1) 48,654 36% (10,882,000) (5,795,000)
(1) 2019 data
3.2.7 SIGNIFICANT EVENTS SINCE THE END OF THE FINANCIAL YEAR
Nil
3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 91 Annual financial statements 3 3.3 Statutory auditors’ report on the annual financial statements
3.3 STATUTORY AUDITORS’ REPORT ON THE ANNUAL FINANCIAL STATEMENTS
(Financial year ended 31 December 2020)
To the shareholders, GROUPE KEOLIS S.A.S. 20-22 rue le Peletier 75009 PARIS
Opinion Pursuant to the assignment entrusted to us by your Annual General It is in this complex and changing context that, in accordance with Meeting, we have audited the accompanying annual financial the provisions of articles L. 823-9 and R. 823-7 of the French statements of Groupe Keolis S.A.S for the financial year ended Commercial Code relating to the justification of our assessments, 31 December 2020. we bring to your attention the following assessments, which, in our In our opinion, the annual financial statements give, in accordance professional judgement, were the most significant for the audit of with French accounting rules and principles, a true and fair view of the annual financial statements for the year. the results of the Company’s operations over the past financial year, as well as of its financial positions and its assets and liabilities at Accounting estimates the end of said period. Equity investments are valued at their acquisition cost and impaired on the basis of their value in use according to the methods Basis of the opinion described in notes 3.2.2.2.3 and 3.2.3.3 to the appendix. Our work consisted in assessing the data and assumptions on which these Audit standards estimates are based, notably the cash flow forecasts prepared by We conducted our audit in accordance with professional standards the Company’s operating departments, in reviewing the calculations applicable in France. We believe that the audit evidence we have made by the Company, and in reviewing the procedure for obtained is sufficient and appropriate to provide a basis for our approving these estimates by management. As part of our opinion. assessments, we verified the reasonableness of these estimates. Our responsibilities under those standards are further described in The assessments made are in the context of the audit of the annual the “statutory auditors’ responsibilities for the audit of the annual financial statements taken as a whole and the formation of our financial statements” section of our report. opinion expressed above. We do not express an opinion on elements of these annual financial statements in isolation. Independence Specific verifications We conducted our audit in accordance with the rules of independence set out in the French Commercial Code and in the We have also performed, in accordance with professional standards code of ethics for statutory auditors for the period from 1 January applicable in France, the specific verifications required by French 2020 to the date of publication of our report. law.
Justification of assessments Information given in the management report and in the other documents provided to shareholders The global crisis brought about by the COVID-19 pandemic creates special conditions for the preparation and audit of this year’s with respect to the financial position and the financial statements. This crisis and the exceptional measures taken annual financial statements in the context of the state of health emergency are having multiple We have no matters to report as to the fair presentation and the consequences for companies, particularly on their business and consistency with the annual financial statements of the information financing, as well as increasing uncertainty about their future given in the Chairman’s management report and in the other outlook. Some of these measures, such as travel restrictions and documents provided to the shareholders with respect to the teleworking, have also had an impact on the internal organisation of financial position and the annual financial statements. companies and on the way audits are carried out. We attest the fair presentation and the consistency with the annual financial statements of the information relating to the payment terms required by Article D. 441-4 of the French Commercial Code (Code de commerce).
92 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com Annual financial statements 3.3 Statutory auditors’ report on the annual financial statements
Other information As part of an audit conducted in accordance with professional In accordance with French law, we have verified that the required standards applicable in France, the statutory auditor exercises information concerning the identity of those holding shares and professional judgment throughout the audit. And furthermore: voting rights has been properly disclosed in the management report. identifies and assesses the risks of material misstatement of the annual financial statements, whether due to fraud or error, Responsibilities of management and those designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and charged with governance for the annual financial appropriate to provide a basis for his opinion. the risk of not statements detecting a material misstatement resulting from fraud is higher Management is responsible for the preparation and fair than for one resulting from error, as fraud may involve collusion, presentation of the annual financial statements in accordance with forgery, intentional omissions, misrepresentations, or the override French accounting principles and for such internal control as of internal control; management determines is necessary to enable the preparation of obtains an understanding of internal control relevant to the audit annual financial statements that are free from material in order to design audit procedures that are appropriate in the misstatement, whether due to fraud or error. circumstances, but not for the purpose of expressing an opinion In preparing the annual financial statements, management is on the effectiveness of the internal control; responsible for assessing the Company’s ability to continue as a evaluates the appropriateness of accounting policies used and going concern, disclosing, as applicable, matters related to going the reasonableness of accounting estimates and related concern and using the going concern basis of accounting unless it disclosures made by management in the annual financial is expected to liquidate the Company or to cease operations. statements; The annual financial statements were approved by the Board of assesses the appropriateness of management’s use of the going Directors. concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events Statutory auditors’ responsibilities for the audit or conditions that may cast significant doubt on the Company’s of the annual financial statements ability to continue as a going concern. This assessment is based Our role is to issue a report on the annual financial statements. Our on the audit evidence obtained up to the date of his audit report. objective is to obtain reasonable assurance about whether the However, future events or conditions may cause the Company to annual financial statements as a whole are free from material cease to continue as a going concern. If the statutory auditor misstatement. Reasonable assurance is a high level of assurance, concludes that a material uncertainty exists, there is a but is not a guarantee that an audit conducted in accordance with requirement to draw attention in the audit report to the related professional standards will always detect a material misstatement disclosures in the annual financial statements or, if such when it exists. Misstatements can arise from fraud or error and are disclosures are not provided or inadequate, to modify the opinion considered material if, individually or in the aggregate, they could expressed therein; reasonably be expected to influence the economic decisions of evaluates the overall presentation of the annual financial users taken on the basis of these financial statements. statements and assesses whether these statements represent As specified in Article L. 823-10-1 of the French Commercial Code, the underlying transactions and events in a manner that our statutory audit does not include assurance on the viability of the achieves fair presentation. Company or the quality of management of the affairs of the Company.
Neuilly-sur-Seine and Paris-La Défense, 26 February 2021 The statutory auditors
PricewaterhouseCoopers Audit ERNST & YOUNG Audit Françoise GARNIER Jérôme GUIRAUDEN 3
GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT 93 Annual financial statements 3 3.3 Statutory auditors’ report on the annual financial statements
94 GROUPE KEOLIS S.A.S. 2020 FINANCIAL REPORT www.keolis.com
20 rue Le Peletier, 75320 Paris Cedex 09 – France
T. +33(0)1 71 32 90 00 www.keolis.com