2010 ANNUAL RESULTS
- Revenues increased substantially1 to €737 million (+26% at a constant exchange rate2)
- No insurance indemnities for operating losses following the fire in 2008 accounted for in 2010 (€69 million included in 2009)
- Trading profit increased to €180 million and, like for like3, by +80%
- Net loss of €57 million due to the absence of insurance indemnities and to a charge of €4.5 million linked to the reconditioning of a Shuttle
- Increase in cash to €316 million at 31 December 2010, compared to €251 million at 31 December 2009
- Continuation of dividend policy: dividend payment to be put to vote at AGM on 28 April 2011 (4 euro cents)
The board of directors, chaired by Jacques Gounon has finalised the accounts for the year to 31
Jacques Gounon, Chairman and Chief Executive Officer of the Eurotunnel Group stated:
“Eurotunnel has regained its place as leader in the cross-Channel market and is developing its activities in rail freight, a sector which fits perfectly with the Group’s ambitions for sustainable development. As announced previously, the delay in payment of the insurance indemnities has impacted heavily on our net result but the Group is working to rectify this situation. As proof of our confidence, we will propose a dividend payment for 2010 at the AGM.”
KEY EVENTS FROM THE PAST YEAR:
- Concession for the cross-Channel Fixed Link
- Regained historic Truck Shuttle market share at the end of the year. The cross-Channel truck market has experienced a significant contraction estimated at -16% since 2007, although it did grow by 3% in 2010.
- Growth of 3% in Eurostar passenger numbers to more than 9.5 million in 2010.
- Request from Deutsche Bahn to run direct services between London and major cities in Germany and Holland.
- Groupe Eurotunnel SA, listed in Paris and London, was the only euro zone stock to be included in the MSCI growth index, on 10 February 2010. Groupe Eurotunnel SA was also included in the “CAC Next 20” index on the Paris Bourse from 21 June 2010.
- Acquisition of GBRf, the third largest rail freight operator in the UK on 28 May 2010, for £25.7 million (equivalent to €30 million): Eurotunnel Group has become a major player in European rail freight.
- Contribution of almost €100 million to 2010 revenues.
CURRENT SITUATION and OUTLOOK:
Legal proceedings concerning insurance indemnities for the fire in September 2008
The litigation launched by Eurostar and SNCF in May 2009 against Eurotunnel’s first–layer insurers resulted in the freezing of €59 million of indemnities. €11 million of this was released in February 2011. The Group is working to secure a settlement of this issue. No indemnities have been accounted for in turnover in 2010.
The operating margin of €336 million is a small improvement on 2009, even though no additional insurance indemnities for operating losses resulting from the fire in September 2008 have been taken into account. The trading profit increased by €10 million to €180 million in 2010 (+€80 million like for like) largely due to a reduction in depreciation of €8 million.
The operating profit (EBIT) has also improved, by €20 million due to net other operating income of €10 million principally constituted of an amount of €13 million of negative goodwill arising from the acquisition of the companies acquired in November 2009.
Due to the mechanical effect of the increase of inflation in the UK on the indexed element of the debt, gross financial charges have increased by €56 million, to €255 million. Interest charges have returned to levels close to those in 2008 following the reduction in inflation in 2009. The increase in interest charges in 2010 is without impact on cash flow for the year as the indexation of the nominal does not give rise to a cash payment until its reimbursement.
Eurotunnel continues to generate a significant operating cash-flow; the net cash inflow for 2010 was €60 million compared to a net cash outflow of €30 million in 2009.
- Preparation for the Olympic Games in London in 2012: in order to further increase departure frequency in 2012 the Eurotunnel Group is working to bring back into service the Passenger Shuttle which was withdrawn in 2005. The Group has accounted for a charge of €4.5 million for the write-off of certain elements of this Passenger Shuttle prior to its reconditioning.
- The situation of SeaFrance: Eurotunnel will remain vigilant regarding the conditions for SeaFrance’s recapitalisation, as it risks being a major destabilising factor for all the players in the cross-Channel market.
- In the short term there appears to be an increase in activity, which is likely to build up gradually according to the different segments. In the medium term, the Group remains confident in its capacity to generate sustainable growth and through developing its business streams to improve its resistance to economic variations. The Group currently anticipates growth in the freight market of between 4 and 5% in 2011.
- The price of oil remaining above $110 for several months is a serious possibility according to many economists. This increase has already led operators in the airline, maritime and tourist sectors to announce fuel surcharges on to their transport costs. Eurotunnel, however, remains almost unaffected by this phenomenon as its rail services are powered by low-carbon electricity.
- The dynamism amongst the passenger train operators should lead to growth in traffic levels. Deutsche Bahn is preparing to launch direct services between London and major cities in Germany and Holland. Eurostar is preparing to launch new services to Amsterdam, the south east of France and to Switzerland, which could help Eurostar reach the level of 10 million passengers in a year for the first time in their history. Overall, the new destinations represent a market estimated at between 3 and 4 million passengers per year.
REVIEW OF THE FINANCIAL SITUATION AND CONSOLIDATED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
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 2010 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union at 31 December 2010.
The following information relating to Groupe Eurotunnel SA’s financial situation and consolidated results must be read in conjunction with the consolidated financial statements in paragraph 20.3.1 of the 2010 Reference Document.
Get the full results in the attached document.