PRESS RELEASE RATP Group Posts Solid Half-Year Results
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PRESS RELEASE 31 August 2018 2018 H1 results RATP Group posts solid half-year results • Financial trajectory under control • Investment remains high for passengers • Passenger figures on the rise • Solid activity by subsidiaries in France and internationally • Dynamic traffic in the Paris region with 1.0% growth • Group revenue stable at 2,787 million euros at 30 June 2018. • Subsidiaries’ contribution 20.8% of overall Group revenue at 580 million euros. • Recurring EBIT of 212 million euros, i.e., 7.6% of revenue • Sustained investment in the Paris region amounting to 575 million euros. • Stronger financial solidity with a gearing ratio of 1.09 (compared to 1.13 at 31 December 2017). The RATP board of directors, chaired by RATP President and Chief Executive Catherine Guillouard, met on 31 August 2018 to review and draw up the consolidated financial statements for RATP Group and the EPIC entity’s company accounts at 30 June 2018. Catherine Guillouard stated at the meeting: “The half-year results posted by RATP Group are solid and demonstrate the company’s professionalism and ability to remain true to the financial trajectory it has set out. In the Paris region, thanks to support from Ile-de-France Mobilités, we have invested 575 million euros for passengers to extend metro and tramway lines, maintain infrastructures and current facilities, renew and renovate rolling stock and modernise passenger spaces and information. We continue to pursue a policy of modernising and extending our networks, which are unparalleled in Europe, particularly with the simultaneous extension of four metro lines (lines 4, 11, 12 and 14 north & south). RATP Group is also continuing its dynamic expansion in France and internationally with operating contracts won and renewed to consolidate its leading position in driverless, high- capacity metro systems worldwide.” 1 Trends in RATP Group key performance indicators in euro millions 30 June 2017 30 June 2018 Consolidated pro forma revenue* 2,782 2,787 Recurring EBIT (non-IFRS) 244 212 Net result, Group share 132 114 Cash flow 488 484 * the 2017 half-year results have been restated for comparison purposes to integrate the impact of new accounting standards (IFRS 15) for booking revenue. The new standards reduce revenue by 46 million euros at 30 June (restatement of remuneration received as revertible assets, recognition of revenue relating to sub-contracting contracts for RATP Dev subsidiaries). Solid consolidated results Group consolidated revenue amounted to 2,787 million euros at 30 June 2018, a slight increase over 30 June 2017 (2,782 million euros). The EPIC entity's contribution to group consolidated revenue amounted to 2,207 million euros, a 1.0% increase thanks to dynamic passenger patronage in the Paris region. Revenue generated by subsidiaries amounted to 580 million euros, a slight contraction (-0.5% excluding the currency effect) as a result of withdrawals from the consolidation scope that counterbalanced persistently strong organic growth achieved by RATP Dev. Revenue generated by subsidiaries accounted for 20.8% of the group’s overall revenue, a level that was practically unchanged (excluding currency effects) compared to the first half of 2017. Recurring EBIT amounted to 212 million euros (7.6% of revenue), a 31 million-euro contraction compared to June 2017, over three-quarters of which can be attributed to adverse external factors (the net impact of the rise in the CSG tax and the contraction in the rate of CICE levy), time differences and rising impairments. The financial result improved by 10 million euros over the previous year. The net result, Group share, amounted to 114 million euros, i.e., 4.1% of revenue. Cash flow amounted to 484 million euros, practically unchanged from 2017 (-4 million euros). Net debt levels contracted by 55 million euros against the end of December 2017. The group’s gearing ratio continued its upward trajectory at 1.09, compared to 1.13 at the end of December 2017, thereby demonstrating the company’s financial solidity. Increasing traffic and high investment in the Paris region Passenger patronage rose by 1% in the Paris region in H1 to 1.736 billion journeys. Traffic was driven by the economic recovery and dynamic tourism activity in the Paris region. Metro and tramway modes at +1% and +6.6% respectively drove much of the increase in patronage. Regional Express 2 Rail (RER) traffic remained stable despite the impact of SNCF strikes on line B. RER line A continued its remarkable dynamic of +5%. Bus patronage contracted by 1.0% owing to persistent traffic difficulties in Paris and the inner suburbs. Passenger income rose by 2.2% reflecting a 1.0% increase in EPIC entity revenue after readjustment of IDFM contributions. Thanks to support from Ile-de-France Mobilités, RATP continued its sustained investment policy, investing 575 million euros in the first half of 2018: - 240 million euros to extend metro and tramway lines (current extensions of lines 4, 11, 12 and 14 north & south). The inauguration of the T3b extension to Porte d’Asnières is scheduled for November 2018 - 285 million euros to maintain and modernize current infrastructure and equipment (deploy automatic steering on RER line A, automate metro line 4, work to convert the Lagny bus depot to electric-powered vehicles, etc.). Preliminary tenders have been issued to renew rolling stock for RER line B and to acquire 1,000 electric buses - 50 million euros to modernise public spaces, improve passenger information and service quality: nearly 200 stations now feature 3G/4G connectivity; a new dynamic, real-time display has been deployed on the RER, the Basilique de St Denis station on line 13 has been renovated. In total, RATP has over 3,000 projects of all sizes in progress to improve service quality and ensure maximal safety and security in its facilities. The company maintains its target of extensive investment at 1.6 billion euros in 2018. Production on the rise on the rail network In the first half of the year, the metro network posted peak-hour production averaging at 98.5% for all lines (98.1% in 2017), which confirms the sound results obtained in previous years. RER line A achieved 89.2% punctuality, an improvement of 3.9 points over the same period in 2017. The net improvement is due in particular to the implementation of a new timetable and the continued deployment of automatic steering in the central section at a time when the line recorded a 5% growth in passenger usage. The punctuality index for RER line B rose by 1.4 points to 88.1% (compared to 86.7% in the first half of 2017) thanks in particular to the continued improvement of joint operation of the line by SNCF and RATP and despite significant operating incidents and a major accident at Courcelle-sur- Yvette on 12 June. On the rail network, experiments with sniffer dogs (twenty dog teams detecting explosives will work on the network by the end of the year) save four hours’ service interruption each month and also contribute to the network’s positive results. The offering provided on surface networks in the first half of 2018 amounted to 94.8%, close to 2017 H1 levels of 96.3%. Subsidiaries expanding in France and internationally 3 RATP Dev: sustained activity growth and expiring contracts RATP Dev activity in the first half of 2018 recorded organic growth of +7.4% (43 million euros) thanks in particular to the launch of the Lorient network and solid activity performance in Algeria and South Africa. However, growth was counterbalanced by withdrawals from the consolidation scope (inter-urban contracts expiring in the centre of France, the disposal of Fullington and the end of the Metrolink contract) and by the currency effect especially in the USA and Algeria. Overall revenue contracted by 2.5% in the first half of 2018. In France, the main events for RATP Dev in the first half of 2018 included the launch of the operating contract for the Lorient network. Internationally, in Algeria, RATP Dev commissioned the Algiers metro extension along with the Ouargla and Sétif tramway lines. In Qatar, the Doha metro contract was signed in April. In Saudi Arabia, RATP Dev is short-listed to operate the Riyadh metro. Solid results by other group subsidiaries Ixxi, the subsidiary specialising in mobility assistance services, continues to expand. Ixxi won a technical support contract to ensure interoperability by the public transport card in Santo Domingo (Dominican Republic), as well as a contract to provide the ticketing system for the future Guayaquil cable car service. Systra (the engineering firm jointly owned by SNCF and RATP) achieved a high level of new orders at 304 million euros, which is close to the 2017 all-time record. The first six months of the year saw new orders for contracting assistance services for the third metro line in Toulouse, project management for the second civil engineering batch in the Lyon Turin rail project, phase 2 of the Dubai tram and project management for the extension of line 14 south, etc. Although revenue recorded a 5.6% contraction as a result of the completion of major LGV projects, the healthy order book (894 million euros at the end of June 2018) ensures sound visibility for the company. 4 .