2014 Summary

Pursuant to EC Regulation 1606/2002 of 19 July 2002 on the application of internation accounting standards, the consolidated financial statements of Groupe Eurotunnel SE for the financial year ended 31 December 2014 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union at 31 December 2014.

For a full understanding of the financial data and activities, figures given below are extracts from the consolidated financial statements of Groupe Eurotunnel SE. So please refer to the paragraph 20.3.1 of the 2014 Registration Document available on the Group's website.

Comparison of financial years ended 31 December 2013 and 2014

In € million

20142013
restated1
Variance
2014/2013
2013
published

Exchange rate€/£

1.2581.258-1.187

Fixed Link

Europorte

MyFerryLink

847

267

93

802

247

74

+6%

+8%

+25%

779

239

74

Revenue

1,207

976

+12%

993

Fixed Link
Europorte
MyFerryLink

(353)
(251)
(105)

(334)
(227)
(96)

+6%
+11%
+9%

(327)
(220)
(96)

Operating costs

(709)(657)+8%(643)

Operating margin (EBITDA)
Depreciation

498
(166)
466
(166)

+7%
=

449
(166)

Trading profit
Other net operating income/(charges)

332
2
300
2
+11%
=

283
2

Operating profit (EBIT)
Share of result of equity-accounted companies
Net finance costs
Net other financial (charges)/income

334
(1)
(272)
(5)

302
-1)
(277)
6

+11%
=
-2%
-

285
(1)
(269)
5

Pre-tax profit

5630+89%

20

Income tax income

181- 81

Profit for the year

57111-101

Summary of the 2014 annual results for the Eurotunnel Group

  • 7%1 increase in revenues to €1.207Bn
  • EBITDA improved by 7%to €498M
  • Operating profit (EBIT) increased by €32Mto €334M
  • Net result after tax: profit of €57M
  • Free cash flow: €155M(vs €129M in 2013)
  • Cash balances at 31 December 2014: €385M (vs €277M at 31 December 2013)

Group's revenues

The Group's consolidated revenues in 2014 amounted to €1.207Bn, an increase of €84M (+7%) compared to 2013.

The revenue generated by the Fixed Link Concession segment, the Eurotunnel Group's core business which represents 70% of the Group's total revenue, amounted to €847M in 2014, an increase of 6% compared to 2013.

The increase of €20M in Europorte's revenues, up by 8% to €267M, has been mainly generated by new contracts started in 2014 and by the extension of the Network Rail contract in the UK.

The maritime segment of MyFerryLink generated revenues of €93M in 2014 (of which €12M was from the lease of the ferries), an increase of 25%.

2014 Revenue for the Group

Group's operating costs

Operating costs totalled €709M, an increase of €52M (+8%). mainly due to the growth in all the activities of the Group in 2014 as well as the additional costs resulting from the start-up of several new contracts during the year.

Group's operating costs

Operating margin (EBITDA)

The Group's consolidated operating margin amounts to €498M, a €32M increase compared to 2013.

EBITDA

Operating profit (EBIT)

Depreciation charges remained stable at €166M in 2014. The operating profit in 2014 was €334M, an improvement of €32M compared to 2013.

EBIT

Investments

CAPEX

Net finance costs

At €272M in 2014, net finance costs decreased by €5M principally due to the decrease in inflation rates and the resulting effect on the noùinal value of the index-linked tranche of the debt. The variance in Net other financial charges and income reflects principally the unrealised exchange differences generated by the impact of the appreciation of sterling against the euro on intragroup balances.

Net finance costs

Pre-tax profit

The consolidated pre-tax result was a profit of €56M, an increase of €26M (+89% compared to 2013).

Pre-tax profit

Net result

In 2014, the Income tax included a €2M charge relating to tax on dividends, a €2M income tex charge and a €5M net deferred tax credit. The consolidated result after tax for the Eurotunnel Group for the 2014 financial year was a profit of €57M.

Net result for the Group

Cash flows

Free cash flow generated in 2014 amounts to €155M compared to €129M in 2013. At 31 December 2014, the Group held cash balances of €385M (vs €277M at 31 December 2013), after €77M net capital expenditure, €214M net cash outflow from various financial activities, €81M payment of the dividend and €34M paid in respect of scheduled repayments on the Term Loan.

Cash flows

Outlook: new targets for creating value

Business remains dynamic, led by growth in the UK economy and signs of improvement in Europe. The Group remains confident in its ability to generate sustainable growth both in cross-Channel and rail freight activities and to increase its resistance to the vagaries of the economy. The Eurotunnel Group expects growth in EBITDA* in line with the following objectives:
> 2015: €535M
> 2016: €580M.

In the medium-term, there are several factors favourable to the Eurotunnel Group:
> The continuation of growth in the cross-Channel truck and passenger markets.
> The decision of the UK competition authorities to limit the ferry operators at Dover to two and the implementation of the Marpol environmental protection regulations
>The launch of new high-speed rail services such as London-Amsterdam, and
> The prospect of rail freight growth.

* At an exchange rate of £1 = €1.3 and excluding MyFerryLink

1 - In order to enable a better comparison between the two years, the 2013 consolidated income statement presented above has been recalculated at the exchange rate used for the 2014 income statement of £1 = €1.258.