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GLOBAL INVESTOR CALL9-10th March, 2021
IMPACT OF THE PANDEMIC AND FINANCIAL ROADMAPLAURENT TREVISANIDeputy CEO, Chief Strategy and Finance Officer
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IN AN UNPRECEDENTED CRISIS, SNCF GROUP SHOWED STRONG RESILIENCE DUE TO BUSINESS AND GEOGRAPHIC DIVERSIFICATION
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AN UNPRECEDENTED CRISIS …
PASSENGER BUSINESS STRONGLY IMPACTED BY COVID-19
SNCF VOYAGEURS
TGV (High speed trains)
– Hit a low during first lockdown with ridership down 90% in April /May
– Rebounded in summer as 80% of passengers returned
– Second lockdown reduced traffic supply to 1/3 of capacity in November
– 2020 activity more strongly impacted for business activity (-63%) than for leisure (-42%)
TER (Regional passenger transport)
– Mass transit businesses showed more resilience because of loss sharing agreements between SNCF and French local authorities
– Traffic decreased by 40 to 50% but revenue are down only 5% in 2020
KEOLIS
– Traffic resilient but diversely impacted depending on geography
– Revenue / EBITDA loss more limited on regulated activities than on open access
TGV*(Sales in €BN)
2019 20202019 2020
(Sales in €BN)
9.0
3.7
TN*, TER* & IC*(Sales in €BN)
2019 2020
KEOLIS
2019 2020
(Sales in €BN)
6.6 6.1
16.8
12.1
SNCF Voyageurs
-28%
-8%
-54% -5%
8.0 8.6
*TN: Commuter transport in the Paris region
*TER: Regional passenger transport
*IC: Medium and long-distance train in France
4 SNCF GROUP PRESENTATION
& TRANSILIEN (Commuter transport in Paris)
*TGV: High-speed transport in France & Europe
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AN UNPRECEDENTED CRISIS …
INFRASTRUCTURE AND LOGISTICS OPERATIONS STAY STRONG
LOGISTICS
GEODIS
– Excellent resilience with revenue increasing vs. 2019 (+4.5%) because of Freight forwarding (+12%) and contract logistics activities (+9%) offsetting losses on Distribution & Express and Road Transport activities in France
RAIL LOGISTICS EUROPE– Fret down only 12% in 2020 because of first lockdown
– Stronger resilience in H2 with business keeping pace with the economy and easing of sanitary restrictions
SNCF RESEAU – SNCF G&C
– Operations hit by falling track access charges payments from transport operators
– SNCF G&C: €71 M loss on retail fees reflecting the impact of the two lockdowns and the slow resumption since
2019 2020
(Sales in €BN)
2019 2020
(Sales in €BN)
6.5
5.9
8.28.4
GEODIS
+4.5%
-9%
2019 2020
(Sales in €BN)
1.71.5
RAIL LOGISTICS EUROPE
-12%
SNCF RÉSEAU
2019 2020
(Sales in €BN)
1.5 1.5
-4%
G&C
5 SNCF GROUP PRESENTATION
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– Down -14% from 2019– Impact of January strikes: -€0.4 BN
On revenue
-€6.8 BN
EBITDA
REVENUE
ACTION PLAN: IMPACT ON FREE CASH FLOW
FREE CASH FLOW
NET CAPEX
NET INDEBTEDNESS
DECEMBER 2020 IMPACT OF COVID
On EBITDA
-€5.4 BN
KEY FIGURES AT DECEMBER 31 AND IMPACT OF COVID-19
AN UNPRECEDENTED CRISIS …
€30.0 BN
€2.0 BN
€2.5 BN
-€2.8 BN
€3.7 BN
€38.1 BN
– 6.6% of revenue (vs 15.9% in 2019)– Impact of January strikes: -€0.3 BN
– Shared between OPEX (€1.1 BN), CAPEX (€0.6 BN) and cash actions (€0.8 BN)
– Versus -€2.350 BN in 2019
– Decrease of -€1.6 BN vs. 2019 with 2/3 of the impact on SNCF Voyageurs
– €25BN transferred to French State (debt-relief of SNCF Debt)– Impact of negative free cash flow: -€2.8 BN
6 SNCF GROUP PRESENTATION
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AN AMBITIOUS STRATEGYSUPPORTED BY FRENCH RECOVERY PLAN & SNCF STRONG REMEDIAL ACTIONS
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2020 CRISIS MITIGATION PLAN ROLLED OUT IN APRIL IN RESPONSE TO COVID-19
FREE CASH FLOW
AN AMBITIOUS STRATEGY…
€2.5 BN
ACTION
PLAN
8 SNCF GROUP PRESENTATION
€0.4 BN
€0.7 BN
€0.6 BN
€0.8 BN
Overheadexpenses
Industrial expenses
CAPEX
Cash actions
– Adjustments to investments and postponement of non-essential projects
– Decrease in IS CAPEX
– Postponement of costs: 2020 CVAE, social charges– Activation of cash flow levers including securitization of receivables– Optimizing working capital requirement
– Decrease in SG&A costs– Performance in purchasing and expenses
– Optimizing business processes, productivity, digitalization
– Lower energy & maintenance expenses– Short-time working
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A HISTORIC STATE SUPPORT PACKAGE FOR THE RAIL INDUSTRY
Exceptional dividend
Transport Organizing Authorities
€4.7 BN
BREAKDOWN OF SUPPORT PACKAGE SUPPORT PACKAGE OBJECTIVES
BUDGET CREDITS CAPITAL INCREASE
- €250 M to upgrade the railway network
- €300 M for small regional lines
- €250 M to reintroduce service on two overnight train lines
- Of which 3.8 BN to secure planned investment programmes at SNCF Réseau
- €250 M allocated to 14 small regional lines
SNCF PLAYS A STRATEGIC ROLE IN FRANCE’S GREEN RECOVERY
RAIL’S NETWORK AS A PRIORITY REBOOT RAIL FREIGHT
FIGHT REGIONAL INEQUALITY FINANCE ON A SOUND FOOTING
- Upgrade the busiest segments
- Improve quality on core network
- Boost employment in the construction industry
- Reduce the transport emissions
- Boost employment by renewed investment in network segments used for freight
- Upgrade small local lines
- Give France’s least populated regions more appeal
- Get debt under control without slowing the pace of development
- Aim for a sound financial structure and strong sustainable solvency
AN AMBITIOUS STRATEGY…
€0.6 BN €4.05 BN
9 SNCF GROUP PRESENTATION
Budget earmarked2021-2028
Capital increase
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SNCF 2030 - A WORLD LEADER OF SUSTAINABLE MOBILITYFOR PASSENGERS AND FREIGHT
GEODISA resilient player that rounds out other SNCF business lines
Proved its strategic value during the worst of the Covid-19 crisis
FRETRail freight, grounded on a stable and profitable business model
Network upgrades: vital to successful operation of the rail system
SNCF Voyageurs transport operators:Voyages, TER, Transilien
KEOLIS: a powerful presence on French markets already open to competition (concession of public service)
SNCF Gares & Connexions
Industrial operations:Rolling stock and other services
SNCF Voyageurs transport operators in Europe: Eurostar, Thalys, Spain and more
KEOLIS: a global leader in mass transit
SYSTRA, AREP and more
Establishing a strong position across all business lines
10 SNCF GROUP PRESENTATION
AN AMBITIOUS STRATEGY…
RAIL AND MASS TRANSIT IN FRANCE
RAIL AND MASS TRANSIT AROUND THE WORLD
LOGISTICS AND FREIGHT TRANSPORTATION
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B2CPassengers
B2BShippers, carriers, etc.
B2G2CCountries, regions, urban communitiesand more
MANAGEMENT OF INFRASTRUCTURE AND ASSETS OPERATIONS
€4.4 BNSNCF RÉSEAU
€1.5 BNGARES&
CONNEXIONS
€2.1 BNSNCF RÉSEAU
€3.2 BNTRANSILIEN
€5.0 BNTER
€6.6 BNKEOLIS
€8.2 BNGEODIS
€8.8 BNVOYAGE + SUBSIDIARIES
2019 revenues on a stand-alone basis (not as a contribution to the group total)
11 SNCF GROUP PRESENTATION
€1.9 BNDIRECTION
INDUSTRIELLE
AN AMBITIOUS STRATEGY…
SNCF 2030 - DIVERSIFYING TO PROMOTE RESILIENCE
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60,000employees outside France
33%of revenue outside France
120countries
No.1 Worldwidein automatic metros andlight rail/trams
No.8 Worldwidein logistics
93% 7%
SUB-SAHARAN AFRICA
€40 M
73%27%
NORTH AFRICA
€35 M 60%
MIDDLE EAST
€82 M75%
13%
40% SOUTH ASIA
€88 M
CENTRAL ASIA
95%
5%
404 M€
95% 5%
12% SOUTHEAST ASIA
€176 M
AUSTRALIA / OCEANIA
33%
66%1%
€904 M
99.7%0.3%
CENTRAL/EASTERN EUROPE
€237 M
61%1%
NORTHERN EUROPE
38%
€1,011 M
70%1%
1%
NORTH AMERICA
99.7% 0.3%
CENTRAL AMERICA
€237 M
28%
€2,565 M
24%58%
€2,996 M
WESTERN EUROPE
3%
SOUTH AMERICA
97%
€174 M
5%
37%
UNITED KINGDOM
1%
57%
3 112 M€
18%
BUSINESSES IN2019
• Freight/goods logistics
• Masstransit• Long-distance passenger transport• Engineering consultancy (incl. Systra,consolidated on the equity method)
Revenue recorded by SNCF Group companies (controlling interest or not)
12 SNCFGROUP PRESENTATION
AN AMBITIOUS STRATEGY…
SNCF 2030 - DIVERSIFYING TO PROMOTE RESILIENCE
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OUR 4 GUIDING PRINCIPLES TO RESTORE OUR FINANCIAL STRENGTH
- SNCF is already diversified.
- We must continue to diversify: logistics and other non-core business lines act as financial shock absorbers, cushioning the impact of economic cycles
- Growing our international markets is not an end in itself. It’s a decision to be made line by line, contract by contract, as opportunities present themselves
- We may opt to do business in high-growth markets and pull out of markets with low margins or fierce competition
- SNCF Group cannot take on debt to fund growth in areas outside our core rail business
- Occasionally, we will develop partnerships with third parties that could provide funding
RISK DIVERSIFICATION PRAGMATIC GROWTH IN EUROPE1 PROFITABILITY ACROSS
ALL BUSINESS LINESSELF-FINANCING FOR NON-CORE INVESTMENTS
- This is consistent with SNCF’s corporate mission and essential to its success
- This principle calls for continuous improvement in our operational and financial performance and continued across-the-board productivity efforts
- Our choices should enable us to:- Maintain a sustainable
financial structure- Optimize dividends to secure
investments in the rail system- Fund profitable investments
and keep the Group on track
2 3 4
AN AMBITIOUS STRATEGY…
13 SNCF GROUP PRESENTATION
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GUILLAUME HINTZYHead of Finance and Treasury Division, SNCF Group
DESPITE THE CRISIS WE REMAIN COMMITTED TO FINANCIAL SUSTAINABILITY
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CONSISTENT FINANCIAL COMMITMENTS SUPPORTING STRONG RATINGS AND PROACTIVE FINANCING STRATEGY
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FINANCIAL COMMITMENTS CONFIRMED
CONSISTENT FINANCIAL COMMITMENTS…
Defend SNCF Group rating by ensuring that ratios are consistent with SA status– CFL > 0 from 2022– FFO / net debt ≥ 10.0% from2022– Net debt / EBITDA ≤ 6.0x from2023
Decrease structural subordinationof debt held by SNCF SA
Keep liquidity high enough (cash position + RCF) to ensure—at all times—a ratio over 1.2x (sources/uses)
Ensure prudent hedging for all financial risk (forex, interest rates, inflation,etc.)
421 3
16 SNCF GROUP PRESENTATION
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LIQUIDITY & RATINGS PRESERVED THROUGHOUT THE YEAR
CONSISTENT FINANCIAL COMMITMENTS…
Since introducing its EMTN programme in March 2020, SNCF SA has launched 16 bond issues representing a total of €6.8bn
Comfortable liquidity at year end (figures at 31/12/2020):
The group also has two short-term financing programmes (€3 BN & €5 BN ,25% used).
10 yrs, €1,250M
20 yrs, €1,000M
30 yrs, €2,000M
3 yrs, $1,250M
10 yrs, CHF 250 M
Various private placements including one 100-year issue
At group level
Liquidity ratio:
€
€
€
BN
BN
1.5X Sources / Uses
$
CHF
PP
100% available
€6.3
€3.5
Cash & cash equivalents
Bank credit line (RCF)
A LIQUIDITY LEVEL REMAINING STRONG RATINGS PRESERVED
“The affirmation of SNCF’s ratings reflects our assessment that the reduction in revenues andEBITDA, stemming from reduced passenger numbers due to the coronavirus, has been to some extent offset by the support package of EUR4.7billion from the French government”
“The amount andmechanismof the support reinforce ourview of an extremely high likelihood of extraordinary government support, and helps the group pursue the deleveraging targets set by the rail reform implemented on Jan. 1,2020”
23/10/202021/10/2020
AA-/A-1+Negative
Aa3/P-1Stable
A+/F1+Negative
17 SNCF GROUP PRESENTATION
Last
update
21 OCT 2020
20 OCT 2020
04 DEC 2020
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OUR SUSTAINABLEFINANCING STRATEGY FOR TOMORROW
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RAIL IS COMPETITIVE FOR ITS CARBON FOOTPRINT—BUT THAT’S NOT ALL
RAIL’S SHARE OF TOTAL PASSENGER TRANSPORTATION
RAIL’S SHARE OF THE SECTOR’S CO2 EMISSIONS
RAIL’S SHARE OF THE
SECTOR’S PARTICLE
EMISSIONS
10%0.6%2.5%1.6% RAIL’S SHARE OF THE
SECTOR’S NITROGEN OXIDE EMISSIONS
23XMORE EFFICIENT THAN PLANES
31XMORE EFFICIENT THAN PRIVATE CARS
6XMORE EFFICIENT THAN BUSES
OUTSTANDING CARBON FOOTPRINT …
Trains account for 10% of passenger transport but only 0.6% ofthe sector’s emissions, making rail a powerful asset for theecological transition
… AND MANY OTHER ADVANTAGES:
2.5%of the passenger transport sector’s particle emissions, which cause 48,000 premature deaths a year
only1.6%of sector emissions of nitrogen oxide, compared with 80% for cars
along with air travel,rail is the safest mode of transport—27 times safer than cars.
6 millionpeopleare exposed to noise from rail networks, compared to 52millionforcars
And the rail system has a very small footprint (87,000 ha for rail vs 1.2m ha for cars)
nitrogen oxide
particlematter
19 SNCF GROUP PRESENTATION
safety
noise
OUR SUSTAINABLE FINANCING STRATEGY FOR TOMORROW
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OUR KEY PROJECTS TO PROMOTE GREENER TRANSPORT SOLUTIONS
OUR SUSTAINABLE FINANCING STRATEGY FOR TOMORROW
TGVTER
HYRBRID TRAINS WITH BIOFUEL
BATTERY-POWERED TRAIN
HYDROGEN TER
TGV M
(high-speed train)
- Replace half of diesel engines with batteries- Aim: cut energy costs by 20% and maintenance costs by 30%
- Project cost: €16.85 M per trainset- Q4 2022: prototype enters commercial service
- Replace all diesel engines with batteries- Aim: acquire 100% battery-powered, dual-mode capacity trainsets- Project cost: €7.7 M per trainset- MID 2023: commercial service begins
- Replace all diesel engines with hydrogen fuel cells- Aim: acquire 100% battery-powered, dual-mode capacity trainsets- Project cost: €18.6 M per trainset- MID 2025: commercial service begins
Cutting-edge technology to serve passengers and advance the ecological transition
100% French, next generation high-speed train
M for:- Modularity- Energy management- Predictive management
Aim: 20% more passengers per trainset, 30% reduction in maintenance costs, 97% recyclable materials eliminating 32% of CO2 emissions
Project cost: €3 BN for 100 TGV M trainsets ordered
First trainsets are set to run for the 2024 Olympic games
20 SNCF GROUP PRESENTATION
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SNCF GROUP AND GREEN FINANCE
OUR SUSTAINABLE FINANCING STRATEGY FOR TOMORROW
2029
2030
2031
2034
2047
850
1 000
900
1 500
1 350
100
50
1 250
TIMELINE (€ MILLION)
2036
2119
2120
TheGreen BondPrinciples
High scores from non-financial rating agencies
Leading green bond issuer
Our sustainability-linked RCF
- VIGEO EIRIS rates SNCF 74/100 (# 1 out of 22) and ECOVADIS rates SNCF 79/100
- Outstanding bonds total €7.2 BN, or 28% of financing raised by SNCF Group from 2016-2020
- #3 in France and #5 in Europe and worldwide (excluding sovereign, supra and bank bonds)
- World’s first rail infrastructure manager to issue green bonds - World’s first 100-year green bonds in any currency or issuer
class
- €3.5 BN revolving credit facility from 20 banks - 3 criteria: carbon footprint, renewable energies, responsible
procurement
We’re expanding the scope of our green financial products
21 SNCF GROUP PRESENTATION
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CARBON IMPACT
9,700PEOPLE
Equal to the carbon footprint of 9,700 people in France over 40 years.
CO24.7
22 SNCF GROUP PRESENTATION
1BILLIONEUROS
Invested in Green Bonds dedicated to infrastructure upgrades.
MILLION TONS
of CO emissionsavoided2
over 40 years
CARBON IMPACT 2016 2017 2018 2019
Network upgrades € M 710 1 508 - 3 181
CARBON IMPACT TCO2e M 2.7 5.7 - 17.1
Network expansion € M176 226 - -
CARBON IMPACT TCO2e M 0.2 0.2 - -
TOTAL IMPACT TCO2e M 2.9 5.9 - 17.1
A total of 25.9 million tons of CO2 eq. saved thanks to SNCF Group Green Bonds (equal to the carbon footprint of 53,500 French people).
and reused
OTHER IMPACTS 2016 2017 2018 2019
Rails recycled % 96.5 100 - 100
Ballast reused % 30-50 30-50 - 30-50
Wood reused as T 78,300 67,800 - 65,000energy source
OUR SUSTAINABLE FINANCING STRATEGY FOR TOMORROW
IMPACT OF GREEN BOND ISSUES FROM 2016 TO 2019
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EXPANDING OUR GREEN BOND PROGRAMME
OUR SUSTAINABLE FINANCING STRATEGY FOR TOMORROW
BROADER, DEEPER BASE
ENVELOPE / YEAR
VOYAGEURS
VOYAGES TER + TRANSILIEN
TOTAL ENVELOPE
€2-2.5 BN
€0.35 BN €0.15 BN€1.5 BN
+ €0.3 BN
GREEN BOND PROGRAMME: WHAT’S NEW IN 2021
RÉSEAU’S ASSET BASE DEEPENS– Addition of UIC-5 and UIC-6– New envelope of €250 m-€350 m/year– Still applies exclusively to electrified network
PROGRAMME EXPANDS TO VOYAGEURS ACTIVITIES– Covers all investment, procurement and upgrade costs
for our zero-direct-emission TGV fleet– Average envelope of €350 m/year, including
replacement of conventional TGV fleets with TGV M and Euro-duplex trains
SNCF is the world’s first mobility group to develop a green bond programme for both infrastructure and rolling stock
23 SNCF GROUP PRESENTATION
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2021 FINANCING STRATEGY
OUR SUSTAINABLE FINANCING STRATEGY FOR TOMORROW
BNFINANCINGNEEDED
BNTO BE ISSUED
IAS GREEN BONDS
PUBLIC
OFFERINGS
€4.4 €2.080%40% ALREADY
FUNDED
2021 financing needs:€4.4 BN of which >40% has already been raised
We expect to raise €2.0 BN with Green Bonds through public offerings and/or private placements
Key components of our financing strategy:
- Average maturity over 10 years
- 80% public offerings and 20% private placements
- Public offerings in our primary currencies (€, $, £, CHF)
- Private placements and tap issues in all currencies ($, YEN, CAD, AUD, NOK, SEK, etc.) and private placements in fixed-rate bonds, FRNs, ZC bonds, CMSs, inflation-indexed bond, etc.
24 SNCF GROUP PRESENTATION
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THANK YOU