Presentation of accounts
Pursuant to EC Regulation 1606/2002 of 19 July 2002 on the application of international accounting standards, the consolidated financial statements of GET SA for the financial year ended 31 December 2009 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union at 31 December 2009.
Groupe Eurotunnel SA’s consolidated accounts were approved by the Board of Directors on 8 March 2010.
The auditors’ work on the consolidated accounts for the year ended 31 December 2009 is largely completed. The audit reports of the statutory auditors relating to the certification of the consolidated accounts will be issued after verification of the information contained in the management report and completion of the work required for the finalisation of the reference document.
Comparison of financial years ended 31 December 2008 and 31 December 2009
|
In € million
(€M) |
2009 |
2008
restated 1 |
%
change |
2008
published |
|
Exchange rate €/£ |
1.119 |
1.119 |
|
1.216 |
|
Shuttle services
Railways
Other revenue |
311
250
10 |
416
250
13 |
-25%
=
-25% |
431
260
13 |
|
Revenue
Other income |
571
69 |
679
42 |
-16% |
704
44 |
|
Total turnover
Operating expenses
Employee benefit expense |
640
(195)
(120) |
721
(194)
(124) |
-11%
-
-3% |
748
(200)
(127) |
|
Operating margin (EBITDA)
Depreciation |
325
(164) |
403
(160) |
-19%
+3% |
421
(160) |
|
Trading profit
Other operating income and (expenses) |
161
0 |
243
28 |
-34%
- |
261
(28) |
|
Operating profit (EBIT)
Income from cash and cash equivalents
Gross cost of servicing debt |
161
3
(195) |
271
18
(257) |
-24%
|
289
19
(268) |
|
Net cost of financing and debt service |
(192) |
(239) |
-19% |
(249) |
|
Other financial income and (charges) and income tax expenses |
32 |
2 |
|
- |
|
Result for the year: profit |
1 |
34 |
40 |
1 In order to enable a better comparison between the two years, the 2008 consolidated income statement presented above has been recalculated at the exchange rate used for the 2009 income statement of £1 = €1.119.
Key figures: income statement
The section of the Tunnel damaged by the fire on 11 September 2008 remained closed until 9 February 2009. The activity in 2009 was therefore significantly affected by the reduced capacity at the beginning of the year and its consequences, as well as by the effects of the economic crisis on the markets in which Eurotunnel operates. The wintry conditions at the end of the year also had a negative effect.
The material damage and operating losses resulting from the Fire in September 2008 are covered by insurance policies up to €900 million for a period of 24 months, i.e. up to September 2010.
Given the fact that the four new rail freight subsidiaries of Europorte purchased on 30 November 2009 from the Veolia group were recently acquired, the Eurotunnel Group has not consolidated these four companies (Europorte France, Europorte Link, Europorte Proximité and Socorail) in its Group accounts at 31 December 2009.
Summary
At €571 million, the Eurotunnel Group’s consolidated revenue excluding insurance indemnities is 16% below 2008 at a constant exchange rate, in a context of the financial crisis and an activity which has been significantly affected by the Fire in September 2008 and its consequences. After taking into account insurance indemnities relating to operating losses of €69 million (€42 million in 2008) and operating expenses and depreciation relatively stable despite a substantial increase in insurance premiums, the trading profit is 34% below 2008 at a constant exchange rate. The net cost of financing and debt service is significantly below 2008 (-19%) as a result of the effect of low inflation on the indexed tranche of the debt. After taking into account financial income of €32 million, Groupe Eurotunnel SA’s net consolidated result for the 2009 financial year is a profit of €1.4 million compared to a profit of €34 million (restated at a constant exchange rate) in 2008.
Revenues
The Eurotunnel Group’s total consolidated revenues for 2009 amounted to €571 million excluding insurance indemnities, a reduction of 16% compared to 2008 at a constant exchange rate.
Shuttle services
Shuttle services revenues for 2009 were affected by the direct and indirect consequences of the fire, as well as by the contraction of the markets in the year. At €311 million in 2009, Shuttle revenues were 25% below 2008 at a constant exchange rate. Shuttle revenues in the fourth quarter of 2009 were nevertheless 10% above 2008, but compared to a period in 2008 impacted by the fire.
-
Truck Shuttle
Adversely affected by the economic situation, in 2009 the cross-Channel truck market was about 20% below 2007 (the last comparable year). Due to the non-renewal of their annual contracts at the end of 2008 by a certain number of hauliers and to the effect of the economic crisis on the market, Truck Shuttle traffic decreased by 39% for the year compared to 2008. In contrast, the traffic increased in the fourth quarter (+12% compared to the fourth quarter of 2008 heavily impacted by the consequences of the fire) and the second half showed a significant improvement (17%) on the first half, despite the restriction to road traffic resulting from the wintry weather at the end of the year.
-
Passenger Shuttle
Car traffic increased slightly in the year (+0.5%), the reduction in the first half having been compensated by the strong increase in the second half. The fourth quarter of 2009 saw the Eurotunnel Group regain market share in the cross-Channel car market. Coach traffic reduced slightly in the year (-2%).
Railways
Eurostar returned to a normal service on 23 February 2009. The number of Eurostar passengers travelling through the Tunnel in the first half of 2009 was 6% below the same period in 2008, but the growth in the third and fourth quarters (+9% and +8% respectively) resulted in full-year traffic growth of 1% compared to 2008, despite the breakdown of 5 Eurostars on the 18 December 2009 and the severe service disruptions that followed.
The increase in the number of rail freight trains using the Tunnel in the second half of 2009 compared to the second half of 2008 (+2.4%) reduced the decline in the full-year traffic to 12% in 2009 compared to 2008.
At €250 million in 2009, revenue from the Railways is at the same level as in 2008 at a constant exchange rate.
Total turnover
Other income corresponds to insurance indemnities for operating losses. It includes €36 million for insurance indemnities received during 2009, as well as indemnities to be received, estimated on the basis of the latest evaluation of entitlement to compensation at the end of 2009 which was limited to €33 million in the context of the actions undertaken by the railways (as described in note 3.1 of the Extract from the consolidated financial statements of Groupe Eurotunnel SA for the year ended 31 December 2009).
Operating margin (EBITDA)
-
Operating expenses
External operating costs remained stable in 2009 despite the €20 million increase in insurance premiums following the Fire in September 2008, as a result of the reduction in activity, and in electricity and maintenance charges in 2009, as well as the decrease in “taxe professionnelle” (a French local tax) which is related to the reduction in activity levels.
-
Employee benefit expense
Staff numbers have remained relatively stable in the year, with an average of 2,361 in 2009. Employee benefit expense has decreased by 3% mainly because of the reduction in bonuses based on financial and operational results.
Trading profit
Accelerated depreciation on certain equipment (points) in 2009 generated a 3% increase in depreciation charges.
Operating profit (EBIT)
Net other operating income and expenses in 2009 are made up mainly of an income of €8 million received in 2009 from the British government following the agreement on compensation for the intrusions by illegal immigrants (following the agreement with the French government in 2008 for €24 million), compensated by a charge of €9 million corresponding to the write-off of the remainder of the rolling stock considered irreparable by the Group and its experts following the fire. In the context described in note 3.1 (see link to note at end of the page), the Group has not accounted for any further indemnities relating to these assets in 2009.
EBIT for 2009 is €161 million compared to €271 million in 2008 restated at the average exchange rate for 2009.
Net cost of financing and debt service
“Income from cash and cash equivalents” of €3 million in 2009 has reduced by €15 million as a result of the temporary placement of the proceeds of the financial transactions from which the Group benefited in the first half of 2008, and also as a result of the significant decrease in interest rates.
At €195 million, the gross cost of servicing debt has reduced by €62 million at a constant exchange rate, of which €54 million results from the effect of lower inflation rates in 2009 than in 2008, which has led to a reduction in indexed financial charges on the nominal of tranche A of the debt. As a result of the transactions to redeem and re-purchase NRS that have been carried out since the first half of 2008, the accretion expense on the NRS has reduced by €7 million in 2009.
In 2009 the other net financial income of €32 million includes a release of provision for risk following the end of legal proceedings relating to the safeguard plan.
Net result
The net consolidated result for 2009 is a profit of €1.4 million compared to a profit of €34 million in 2008 restated at the average exchange rate for 2009.