SNCF 2014 Financial Report
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BOARD OF DIRECTORS' MEETING OF 12 FEBRUARY 2015 SNCF MOBILITÉS GROUP (formerly Société Nationale des Chemins de fer Français) 31 December 2014 ANNUAL MANAGEMENT REPORT and CONSOLIDATED FINANCIAL STATEMENTS MANAGEMENT STATEMENT FOR FINANCIAL REPORT La Plaine Saint-Denis, 12 February 2015 We attest that, to the best of our knowledge, the consolidated financial statements have been prepared in accordance with the applicable accounting principles and give a true and fair view of the assets and liabilities and the financial position of the Group as of 31 December 2014 and of the results of its operations for the year then ended, and that the accompanying management report fairly presents the changes in operations, results and financial position of the Group and a description of its main risks and uncertainties. The Chairman Executive Vice-President, Performance Guillaume PEPY Mathias EMMERICH BOARD OF DIRECTORS' MEETING OF 12 FEBRUARY 2015 31 December 2014 ANNUAL MANAGEMENT REPORT IFRS – In € millions 1 CONTENTS SNCF Mobilités Group in 2014................................................................................................................. 3 1. Major events of the year ................................................................................................................ 3 2. Key figures .................................................................................................................................... 5 3. Subsequent events ....................................................................................................................... 6 Group results and financial position ......................................................................................................... 7 1. General observations on group results ......................................................................................... 7 2. Activity and results by division ....................................................................................................12 3. Net investments and net debt .....................................................................................................25 4. Consolidated statement of financial position and ratios ..............................................................28 5. Financial relations with the French State, RFF (SNCF Réseau as at 1 January 2015) and local authorities ........................................................................................................................................30 6. Employee matters .......................................................................................................................31 7. Challenges and outlook ...............................................................................................................33 Corporate social responsibility ...............................................................................................................34 1. SNCF Mobilités and CSR – 4 challenges and 12 commitments.................................................34 2. Customer challenge ....................................................................................................................35 3. Environment challenge ................................................................................................................38 4. Employee challenge ....................................................................................................................40 5. Community challenge ..................................................................................................................42 6. Values and principles ..................................................................................................................44 Corporate governance ............................................................................................................................46 1. Board of Directors .......................................................................................................................46 2. Management team ......................................................................................................................47 2 SNCF MOBILITÉS GROUP IN 2014 In this report, the terms “SNCF Mobilités Group,” “Group” and “SNCF Mobilités” designate the parent company EPIC Société Nationale des Chemins de fer Français, known as SNCF Mobilités as of 1 January 2015, and its consolidated subsidiaries. The State-owned public institution “(EPIC) SNCF Mobilités,” “EPIC,” “EPIC Mobilités,” “Mobilités” and “EPIC SNCF Mobilités” refer solely to the parent company. 1. MAJOR EVENTS OF THE YEAR 1.1. IMPAIRMENT LOSS REVERSALS Impairment loss reversals were recognised for €163 million for rail freight production resources within the SNCF Logistics division, formerly known as SNCF Geodis (all property, plant and equipment and intangible assets excluding land and buildings). These reversals follow the change in business models that resulted in the reallocation of production resources between the Rail freight and Rail freight fleet management cash generating units and the adaptation of impairment testing methods in accordance with IAS 36. They were recognised under “Impairment losses” in the income statement. Detailed information is presented in Note 8 to the consolidated financial statements. 1.2. RAIL REFORM The rail reform law definitively adopted on 22 July 2014 and enacted by the President of the French Republic on 4 August 2014, under number 2014-872, is based on five objectives: - Confirmation of a public service that is strengthened and better managed; - Creation of an integrated public industrial group; - Introduction of a national agreement to ensure the financial future of the public service; - Creation of a labour framework for all rail sector players by maintaining the status of railway employees and unifying their group; - Greater regulatory authority to guarantee the impartiality of network accessibility. The current organisation of the French rail system and specifically the State-owned industrial and commercial institution (or EPIC) Société Nationale des Chemins de fer Français was profoundly changed as of 1 January 2015, the effective date of the law, with the creation of a group organised according to three economically integrated EPICs: - The current EPIC Société Nationale des Chemins de fer Français (SNCF until 30 November 2014), will become SNCF Mobilités and will continue to carry out all the transport activities for the SNCF Proximités, SNCF Voyages and SNCF Logistics (formerly SNCF Geodis) divisions, and manage the stations of the Gares & Connexions division. - The current Réseau Ferré de France (RFF) will become SNCF Réseau and unify all the infrastructure management functions by combining SNCF Infra and Rail network operation and management currently part of the SNCF Infra division. It will guarantee fair access to the network for all rail companies. - A “parent” EPIC, created on 1 December 2014 as part of the reform and called SNCF, will be responsible for strategic control and steering, economic coherence, and the public rail group's industrial integration and social unity. Accordingly, in accordance with IFRS 5 “Non-current assets held for sale and discontinued operations,” the profit or loss components of the SNCF Infra division, which must be transferred under the law of 4 August 2014, were reclassified under “Net profit/(loss) from transferred operations” in the 2014 and 2013 income statements. The assets and liabilities of this division that are to be transferred were reclassified under “Assets classified as held for sale” and “Liabilities associated with assets classified as held for sale” in the statement of financial position as of 31 December 2014. 3 The law also stipulates that non-current assets and entities will be transferred to the parent EPIC. Non- current assets and the assets of entities to be transferred as identified at the year-end were reclassified under “Assets classified as held for sale” in the statement of financial position as of 31 December 2014. The liabilities of these entities were reclassified under “Liabilities associated with assets classified as held for sale.” As the application decrees are still being drafted, the scope of the entities and assets to be ultimately transferred could be expanded. Detailed information is presented in Note 27 to the consolidated financial statements. 1.3. LABOUR MOVEMENT A strike involving a portion of SNCF employees took place between 11 and 23 June 2014 in opposition to the rail reform bill and to debate the future of the rail sector. Despite a significant mobilisation of SNCF resources to limit customer impacts, the strike had repercussions in almost all Group divisions, particularly in terms of revenue losses and additional costs for customer compensation. 1.4. ASSIGNMENT OF A RECEIVABLE The receivable generated in the period by the Competitiveness and Employment Tax Credit set up by the French government (see Note 1.1.2.3) and recorded for French tax consolidation groups was assigned under the Dailly Law. As this involves an operating receivable, its assignment led to a posting of a net receipt of €306 million in “Net cash from operating activities” on the cash flow statement. Details are provided in Note 28.3 to the consolidated financial statements. 4 2. KEY FIGURES In € millions 2014 2013 (1) Revenue 27,243 27,030 Gross profit 2,383 2,486 Current operating profit 678 721 Operating profit after share of net profit of companies 1,050 -528 consolidated