Annual Report
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(Translation from the Italian original which remains the definitive version) ANNUAL REPORT ATM Group 2016 ATM has been a leading transport provider in Milan for over 85 years, transporting millions of people around the city every day. Consolidated experience, investment capacity and technological innovation are the foundations of its work. Contents Consolidated financial statements of ATM group 48 Consolidated financial statements 62 Notes to the consolidated financial statements 104 Annexes ATM Group Highlights Profit and loss account highlights (millions of Euros) 2016 2015 2014 Production revenues 996.8 1,056.3 961.9 Operating costs (832.7) (892.9) (841.7) Gross operating profit 164.1 163.4 120.2 % of production revenues 16.5% 15.5% 12.5% Operating profit 34.0 20.7 8.5 % of production revenues 3.4% 2.0% 0.9% Net profit for the year 38.9 25.8 5.6 % of production revenues 3.9% 2.4% 0.6% 2016 revenues - by type and geographical segment Other revenues Abroad 19.18% 4.68% On-street parking, car parks, towing away service 3.14% Italy LPT 95.32% 77.68% Balance sheet highlights (millions of Euros) 2016 2015 2014 Fixed assets (tangible and intangible) 1,005.7 1,101.7 1,081.3 Net equity 966.6 929.3 900.1 Net financial position (247.1) (217.8) (234.3) Investments 76.8 190.0 195.8 Performance highlights (millions of Euros) 2016 2015 2014 ROI 2.2% 1.3% 0.5% Net invested capital 1,581.2 1,614.1 1,573.6 Operating profit 34.0 20.7 8.5 ROE 4.0% 2.8% 0.6% Net equity 966.6 929.3 900.1 Net profit for the year 38.9 25.8 5.6 I Operating ratios - ITALY TOTAL NETWORK 1 Area covered (km²) 1,083 Passengers (mln) 7 28.3 Municipalities covered 96 Km travelled (mln) 162.8 MET RO NET WORK Number of lines 4 Fleet (engines and carriages) 4 1,014 Nework length (km) 2 96.8 System length (km) 3 215.9 ROAD NET WORK Number of lines 157 Fleet4 1,420 Nework length (km) 2 1,562.0 Average age of fleet (years) 9.7 T RAM NET WORK5 Number of lines 20 Fleet4 493 Nework length (km) 2 181.8 System length (km) 3 282.1 TROLLEYBUS NETWORK Number of lines 4 Fleet4 137 Nework length (km) 2 38.8 System length (km) 3 85.8 1 Figures refer to the s ervice pro vided by ATM in the Metro po litan city o f Milan, with the funicular railway in Co mo and pro vided by NET in the Metro po litan city o f Milan and in the pro vinces o f Mo nza and Brianza, Bergamo and Lecco 2 Length o f netwo rk refers to the s um o f all o f the lengths o f each line 3 Line superstructures and overhead lines in km are included 4 Owned vehicles 5 This als o includes the Milan-Des io intercity tram line, which has tempo rarily been s us pended (replaced by a bus s ince 1 Octo ber 2011) II Operating ratios – ITALY SERVICES PROVIDED IN THE METROPOLITAN CITY OF MILAN AND PROVINCES OF MONZA AND BRIANZA, BERGAMO AND LECCO 6 Area covered (km²) 662.7 Number of lines 27 Municipalities covered 59 Network length (km) 400.1 Passengers (mln) 10.5 Fleet 86 Km travelled (mln) 8.0 CAR PARKS AND ON-ST REET PARKING Car parks 7 On-street parking Number 22 Spaces 85,331 Spaces 18,635 Entrances 5,7 42,47 5 COMO - BRUNATE FUNICULAR RAILWAY Network length (km) 1.1 Km travelled 49,37 8 Passengers (mln) 1.0 CASCINA GOBBA - H. SAN RAFFAELE MINI METRO Network length (km) 0.7 Km travelled 86,896 6 Service o perated by NET. Figures als o included in "Who le netwo rk" 7 This includes the Novara-Trenno car park, which has 1,613 spaces III Operating ratios - ABROAD COPENHAGEN MET RO Area covered (km²) 162 Number of lines 2 Municipalities covered 3 Network length (km) 21 Passengers (mln) 60.9 Fleet 34 Km travelled ( mln ) 14.9 IV Company bodies Board of directors1 Chairman Bruno Rota Directors Nunzio Domenico Paolo Dragonetti Carmela Francesca Alessandra Perrazzelli Paolo Simonetti Board of statutory auditors 2 Chairman Stefano Poggi Longostrevi Statutory auditors Gaetano Frigerio Maria Luisa Mosconi Alternate statutory auditors Monica Bellini Domenico Salerno Independent auditors 3 KPMG S.p.A. 1. The board of directors was elected by the shareholder on 22 April 2014 with a term of office that ends with the approval of the 2016 financial statements. 2. The board of statutory auditors was elected by the shareholder on 29 April 2016 with a term of office that ends with the approval the 2018 financial statements. 3. The independent auditors were engaged with the resolution passed by the shareholder on 29 April 2016 proposed by the board of statutory auditors, their term of office expires with approval of the financial statements for 2018. V Group structure at 31 December 2016 Companies included in the consolidation scope ATM S.p.A.: a company limited by shares since 2001, wholly owned by the Milan municipality. It is the parent and carries out management and coordination activities pursuant to article 2497 and subsequent articles of the Italian Civil Code. The company manages the transport systems, structures and infrastructure, and the mobility of people, goods and information. ATM Servizi S.p.A.: set up on 22 September 2006, and wholly owned by ATM S.p.A.. The company manages all transport services, including railway services, as well as services related to the transport of people, goods and information, and mobility, including on-street parking and car parks. It has a service contract with the Milan municipality for local public transport and related and ancillary services. ATM Servizi Diversificati S.r.l. : set up on 9 September 2010, and wholly owned by ATM S.p.A.. The company manages services for the transport of people and goods both by road and by rail in the rentals sector as well as diversified service sectors such as the tram restaurant and tourist services. GeSAM S.r.l.: established on 22 December 2005, it is wholly owned by ATM S.p.A.. The company carries out consultancy activities in the insurance sector, including all the related specialist assistance, aimed at the preparation and settling of claims, with the exception of insurance mediation activities. International Metro Service S.r.l.: established on 12 April 2007, it is 51% controlled by ATM S.p.A.. The company provides services for the transport of people and goods, with related programming and operational organisation activities, all with a view to implementing contracts for the operating and maintenance of metro systems. The company controls 100% of Metro Service A/S, the company that manages the metro in Copenhagen. Nord Est Trasporti S.r.l. : established on 5 December 2007, it is fully owned by ATM S.p.A.. The company manages transport services for people, goods and information, with the related programming activities and operational organisation as well as services connected to transport and mobility around the Metropolitan city of Milan, the Monza and Brianza province and the Monza municipality. Rail Diagnostics S.p.A.: established on 31 October 2006, and 97.27% controlled by ATM S.p.A.. The company focuses on the design, construction, maintenance and integrated diagnostics of the metro and tram equipment and control systems. Hereinafter in this annual report, ATM refers to all of the group companies included in the consolidation scope. VI Description of the business of ATM S.p.A. and the group companies VII Directors’ report Directors’ report 3 Directors’ report ATM in 2016 During the year, ATM S.p.A. once again significantly improved all its operating parameters. Net profit rose to over €19.7 million compared to €10.8 million in the previous year, a growth of over 80%. Gross operating profit, an indicator of its core business, further increased over the net improvement of 2015 to top €130 million. This increase was the result of the careful monitoring of all costs, which saw operating costs decrease at a rate more than proportional to the contraction in revenues following the end of the Expo-related activities and related increased passenger numbers. The consolidated economic equilibrium now achieved by all the investees who have overcome the highly critical situation of just a few years ago, along with the excellent performance of the Danish investee, Metro Service A/S, which continues to successfully operate the metro network in Copenhagen, which will soon see ATM’s role grow, contributed to the strong results of the parent. At a consolidated level, the Group’s net profit was €38.8 million, including minority interests. This excellent result, with a further increase on the €25.8 million achieved in the previous year (which itself represented a strong increase), thus continues the results of the Expo year. Meanwhile, the group’s gross operating profit reached €164 million. From the beginning of 2016, the entire Group was aware of the importance of showing that the results of the previous year were not due solely to Expo-related activities, but were the result of an effective and consolidated transparent management model, and that its strong performance can cover the costs associated with the jump in employee numbers in 2015 (most of whom were kept on in 2016). ATM is robust and efficient, but it must continue to develop its productive factors in order to successfully meet its ambitious and inevitable challenges.