Societe Nationale des Chemins de fer Francais Paris, France

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1 JUNE 12, 2014 CORPORATES COMPANY PROFILE Societe Nationale des Chemins de fer Francais Paris, France Table of Contents: COMPANY OVERVIEW 1 BUSINESS DESCRIPTION 2 MANAGEMENT STRATEGY/PRIORITIES 4 FINANCIAL HIGHLIGHTS 5 CAPITAL STRUCTURE AND DEBT MATURITY SCHEDULE 7 COMPANY MANAGEMENT 8 OWNERSHIP STRUCTURE 10 SECTOR/INDUSTRY PEER GROUP 11 RELATED WEBSITES AND INFORMATION SOURCES 11 MOODY S RELATED RESEARCH 11 Analyst Contacts: MILAN Lorenzo Re Vice President - Senior Analyst lorenzo.re@moodys.com Company Overview Société Nationale des Chemins de Fer Français () is a transportation group owned by the French state. As France s national railway company, also manages, operates, maintains and develops rail and related infrastructure on behalf of Réseau Ferré de France (RFF), the owner of the French railway network. Having been established with special status as an "Etablissement Public à Caractère Industriel et Commercial" (EPIC), is a French public corporation with autonomous management. operates in 120 countries worldwide. In the financial year ended 31 December 2013 (2013), it reported revenue of 32.2 billion. was founded in 1937 as a semi-public, limited liability company. In January 1983, it was established as a wholly French state-owned industrial and commercial institution. As of 31 December 2013, the French government owned all its share capital. Source: Company Reports (financial report Dec 2013), Company data, Moody s research, Moody s Financial Metrics PARIS Eric de Bodard Managing Director - Corporate Finance eric.debodard@moodys.com This report, exclusively provided to you by Moody s, presents a convenient summary of as reported, publicly available information. The information, with the exception of financial data, is not adjusted for Moody s analytic purposes. For Moody s Ratings, Opinion and Analytics on this company, please [Click here]. To access the latest Moody s Credit Opinion on this company, please [Click here].

2 Business Description Transport operator is France s national railway company. It also manages railway infrastructure on behalf of its owner, RFF. A French public corporation with autonomous management, was established with the special status of an EPIC. The company was founded in 1937 as a semi-public, limited liability company for a period of 45 years. In 1955, however, it was incorporated for an unlimited duration. In January 1983, it became a wholly French state-owned industrial and commercial institution in accordance with the French Orientation Law on Domestic Transport (30 December 1982). The Reform Law 1997 extensively revised s objectives and business, separating management of French railway operations and infrastructure. Ownership of the national railway network was transferred to RFF, while retained responsibility for network management. Historically, the company has expanded through acquisitions. In 2008, acquired all outstanding shares of Geodis, a transport and logistics group. In 2009, entered Italy s highspeed rail market by acquiring a 20% stake in Italian railway operator Nuovo Trasporto Viaggiatori (NTV) for 80 million. In 2012, increased its shares interest in Keolis, a subsidiary operating in bus, subway and tramway services, to 70% from 56%. operates in 120 countries worldwide through the following five business units: Infra; Proximités; Voyages; Geodis; and Gares & Connexions. Infra: This business unit includes delegated infrastructure management activities on behalf of RFF, such as network maintenance, signalling and traffic management services. As of 31 December 2013, Infra maintained and monitored a 30,000-kilometre rail network. In addition, the company provides engineering services (as well as rail infrastructure research and design through its Systra subsidiary), contract coordination, oversight and site logistics, both in France and internationally. In 2013, this accounted for 16.0% of the company s revenue. Proximités: Accounting for 34.5% of s revenue in 2013, this business unit offers collective transport services on contract with public authorities, including trains, buses, coaches, metros, tram-trains, tramways, trolleybuses, car-sharing, ferries and airport ground transport. Catering to 10 million passengers daily through its Keolis and Effia subsidiaries, Proximités operates in 14 countries: Australia, Belgium, Canada, China, Denmark, France, Germany, India, Luxembourg, Norway, the Netherlands, Portugal, Sweden, the UK and the US, as of 31 December Voyages: This business unit includes carrier services provided in France through its TGV and idtgv operations, and special trains and auto-trains. It also offers international high-speed services between France and the UK (Eurostar International), Belgium and the Netherlands (Thalys), Switzerland (TVG Lyria), Germany (Alleo), Spain (Elipsos) and Italy (TGV Italia), and high-speed services in Austria (Westbahn) and Italy (NTV). In addition, it incorporates distribution services and train management. In 2013, this accounted for 19.7% of the company s revenue. This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on for the most updated credit rating action information and rating history. Geodis: Accounting for 26.4% of s revenue in 2013, this business unit is the freight and logistics arm of. Its activities include rail freight, parcel carriage and logistics services, port shipping and logistics, and combined railroad transport. Gares & Connexions: This business unit is responsible for the development and operation of all national network railway stations, as well as the activities of its subsidiaries, AREP (architecture and 2 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

3 urban planning) and A2C (commercial station development). In 2013, it accounted for 3.4% of s revenue. In October 2013, the French Transportation Minister presented to the French Council of Ministers a law project to reform the French railway system. The law project is pending approval and will be discussed in the parliament in June. Proposed changes include streamlining the current railway system, in which a new group will be established with the following three entities, all benefitting from EPIC legal status:» Reseau, an infrastructure manager, which will consist of RFF, Direction de la Circulation Ferroviaire (DCF) and Infra ( s infrastructure management )» Mobilites, an operator, to manage all freight and passenger railway operations, which are currently the responsibility of», a holding company, which will strategically coordinate group activities Source: Company Reports (financial report Dec 2013 and Dec 2011), Company data, Moody s research, Moody s Financial Metrics EXHIBIT 1 Revenue by Division (in Million) 14,000 12,000 10,000 8,000 6,000 4,000 2, Infra Proximités Voyages Geodis Gares & Connexions Note: Excluding Common operations and investments and Inter Source: Company Reports (financial report Dec 2013 and Dec 2012), Moody s Financial Metrics EXHIBIT 2 Operating Profit by Division (in Million) (100) (200) (300) Infra Proximités Voyages Geodis Note: Excluding Common operations and investments Gares & Connexions Source: Company Reports (financial report Dec 2013 and Dec 2012), Moody s Financial Metrics 3 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

4 Management Strategy/Priorities The following are some of the current strategies and priorities of management, by business unit: Infra :» Maintain healthy and efficient business model while continually improving the rail network management» Grow international markets Proximités :» Continually improve passenger service» Grow in France and internationally through its Keolis subsidiary, directly or through joint ventures Voyages :» Become the rail travel company of choice in Europe, creating a high-quality client service» Promote a profitable and lasting high speed business model Geodis :» Continue improving profitability in all business units» Expand non-european operations and be among the top five operators worldwide Gares & Connexions :» Provide top quality service» Maintain a sustainable business model with capacity to invest in commercial activities In October 2013, launched several new strategies as part of EXCELLENCE 2020 which aims to offer the highest-quality, most efficient mobility and logistics services in Europe by Operationally, the company is focused on the following objectives:» Prioritising commuter services» Offering customised services to passenger, freight and logistics clients» Focus on international growth: The company will focus on specific regions, enter partnerships, and undertake acquisitions. Source: Company data 4 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

5 Financial Highlights Overview Company Type: Private Fiscal Year End: 31 December Auditor: Mazars and PricewaterhouseCoopers Note: The financials presented below have been adjusted for Moody s analytic purposes. To see how adjustments have been made, please see Moody s Financial Metrics, a fundamental financial data and analytics platform that offers insight into the drivers of Moody s Corporate ratings. EXHIBIT 3 Selected Adjusted Financial Data Société Nationale des Chemins de Fer Français (in Million) 31-Dec Dec Dec-11 INCOME STATEMENT Revenue/Sales 32,232 32,225 32,645 EBITDA 3,595 3,972 3,974 EBIT 1,148 1,515 1,430 Interest Expense Net Income (182) BALANCE SHEET Cash & Cash Equivalents 5,316 5,417 3,902 Current Assets 14,688 17,089 14,440 Net Property, Plant &Equipment (PP&E) 18,931 20,208 21,056 Total Assets 43,747 47,286 46,460 Current Liabilities 16,096 17,747 16,657 Total Debt 19,503 20,828 20,790 Total Liabilities 35,391 36,733 35,034 Shareholders Equity 8,356 10,553 11,426 CASH FLOW Funds from Operations (FFO) 2,764 2,405 2,664 Cash Flow from Operations (CFO) 2,472 2,237 2,773 Capital Expenditure (2,689) (2,612) (2,787) Cash from Investing Activities (2,055) (1,204) (1,568) Dividends (236) (234) (76) Retained Cash Flow (RCF) 2,528 2,171 2,588 Share Repurchases Cash from Financing Activities (797) 645 (1,892) Source: Moody s Financial Metrics 5 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

6 EXHIBIT 4 EBITDA Margin & EBITDA/Interest Expense (Adjusted) 13% EBITDA Margin% EBITDA/Interest Expense 9.0x 8.0x 12% 7.0x 11% x As of 31 Dec 2013 Source: Moody s Financial Metrics EXHIBIT 5 Debt/EBITDA & RCF/Debt (Adjusted) 5.5x Debt/EBITDA RCF/Debt% 14% 13% 5.4x 12% 5.3x 11% 5.2x % As of 31 Dec 2013 Source: Moody s Financial Metrics 6 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

7 Capital Structure and Debt Maturity Schedule Note: Some financials presented below have been adjusted for Moody s analytic purposes. To see how adjustments have been made, please see Moody s Financial Metrics, a fundamental financial data and analytics platform that offers insight into the drivers of Moody s Corporate ratings. EXHIBIT 6 Capital Structure Société Nationale des Chemins de Fer Français (in Million) 31-Dec Dec Dec-11 SHORT-TERM DEBT Short-Term Debt 1,966 2,661 1,737 Current Portion of Long-Term Debt 1,637 2,418 3,681 Total Short-Term Debt 3,603 5,079 5,418 LONG-TERM DEBT Secured Debt Senior Debt 14,263 15,918 16,810 Subordinated Debt Financial Liabilities Non-Current Capitalised Leases 1,606 1,605 2,390 Gross Long-Term Debt 15,869 17,523 19,200 Less Current Maturities (1,637) (2,418) (3,681) Net Long-Term Debt 14,232 15,105 15,519 Total Debt 17,835 20,184 20,937 Total Adjusted Debt 19,503 20,828 20,790 SHAREHOLDERS EQUITY Preferred Stock Common Stock & Paid-In Capital 6,850 6,636 6,865 Retained Earnings (180) Accumulated Other Comprehensive Income Total Equity 6,670 7,012 6,990 Total Adjusted Equity 8,356 10,553 11,426 Adjusted Book Capitalisation 28,221 31,716 32,722 Adjusted Market Capitalisation Adjusted Debt/Adjusted Book Capital (%) Holding Company Debt/Total Debt (%) Secured Debt/Total Debt (%) Source: Moody s Financial Metrics 7 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

8 Of s total adjusted debt in 2013, the largest components were those related to lease and pension adjustments. EXHIBIT 7 Components of Debt 25,000 20,000 17, , ,567 19,503 Million 15,000 10,000 5,000 0 Unadj. Debt Pensions Lease Adj. Hybrid Securitisation Analyst Adj. Debt As of 31 Dec 2013 Source: Moody s Financial Metrics EXHIBIT 8 Upcoming Long-Term Debt Maturities Société Nationale des Chemins de Fer Français Year of Maturity Amount (in Million) , ,568 Beyond ,354 Source: Company data (financial report Dec 2013) Company Management Company Management Current Title Age Previous Roles Guillaume Pepy Chairman Eurostar: Chairman Mathias Emmerich Sophie Boissard Executive Vice-President in charge of Finance, Purchasing and Information Systems Head of Business Strategy and Development 51 Publicis Groupe: Senior Vice President, Secretary General and Executive Board Member; French Court of State Auditors: Public Auditor and Referendary Counselor : head of Gares and Connexions Patrick Ropert Head, Communications : Head of Corporate Communications; Operational Manager of Communications; Chief of Staff to the Chairman and Chief Executive Officer Alain Krakovitch Head of Railway Service Quality and Safety Claude Solard Head, Equipment 44 : Chief of Staff to s CEO; Managing Director of Paris Nord Station Stéphane Volant Company Secretary : Institutional Relations Manager; Advisor to the Chairman 8 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

9 Company Management Current Title Age Previous Roles François Nogué Head, Cohesion and Human Resources Pierre Izard Head, Infra Jean-Pierre Farandou Head, Keolis ( Proximités ) Rachel Picard Head, Gares and Connexions Sylvie Charles Alain Le Vern Head, Fret and in charge of the Geodis s Business and Rail Service Providers unit Head, Regions and Intercités ( Proximités ) : Head of Proximités STVA: Chairwoman of Executive Board; Société Générale de Transport et d Industrie: Deputy General Manager; Cariane Group: General Manager Upper Normandy Regional Council: President Jacques Damas Head, Keolis : Station Manager; Railway/Services Security & Quality Marie-Christine Lombard Chief Executive Officer, Geodis TNT Express N.V.: Chairwoman and CEO; TNT Group: Managing Director, Express ; Jet Services: Chairman and Chief Executive Officer; Jet Services: Head of Finance and IT Systems Joël Lebreton Head, Proximités : Advisor to the Chairman Barbara Dalibard Head, Voyages, sales, distribution and onboard client services Alain Picard Head, Geodis 49 : Executive Vice-President, Finance, Purchasing and Information Systems; Geodis: Head of Finance; EDF: Head of Planning and Budget Bénédicte Tilloy As of 22 May 2014 Head, Transilien ( Proximités ) Board of Directors Guillaume Pepy Marie-Line Meaux Jean-Paul Ourliac Solenne Lepage Julien Dubertret Jean Daubigny Affiliation : Chairman (Representative of the French State) : Director (Representative of the French State appointed by the Minister of Transport); General Council for the Environment and Sustainable Development: President for Risk, Safety and Security : Director (Representative of the French State appointed by the Minister of Transport); General Council for the Environment and Sustainable Development: President for Econmy, Transports and Network : Director (Representative of the French State appointed by the Minister for the Economy and Finance); Commissioner for State Holdings : Director (Representative of the French State appointed by the Minister for the Budget); Ministry for the Economy, Finance and Employment: Budget Director : Director; Director (Representative of the French State appointed by the Minister for Territorial Planning and Management); Ile de France region: prefect 9 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

10 Board of Directors Jean Bassères Muriel Penicaud Marc Debrincat Roland Ries Jean-Paul Chanteguet Anne Lassman- Trappier Affiliation : Director (Representative of the French State appointed by the Minister for Industry); Pôle Emploi: Managing Director : Director; Danone: HR Managing Director : Director; FNAUT: Legal Director : Director; Strasbourg Town Council: Mayor; Bas Rhin: Senator : Director; Blanc Town Council: Mayor; Indre: Depute; Commission for Sustainable Development and Territorial Management: President : Director; France Nature Environment Véronique Martin Alain Prouvenq Guy Zima Alain Cambi Marty Thierry Pascal Lanzillotti : Director, Employee representative (CGT) : Director, Employee representative (CGT) : Director, Employee representative (CGT) : Director, Employee representative (SUD Rail) : Director, Employee representative (UNSA) : Director, Employee representative (CFDT) As of 22 May 2014 Source: Company data Ownership Structure As of 31 December 2013, was wholly owned by the French state. Source: Company Report (financial report Dec 2013) 10 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

11 Sector/Industry Peer Group» Deutsche Bahn AG» Ceske Dráhy, a.s.» Norges Statsbaner AS» Société Nationale des Chemins de Fer Belges Related Websites and Information Sources For additional information, please see the company s website: MOODY S has provided links or references to third party World Wide Websites or URLs ("Links or References") solely for your convenience in locating related information and services. The websites reached through these Links or References have not necessarily been reviewed by MOODY S, and are maintained by a third party over which MOODY S exercises no control. Accordingly, MOODY S expressly disclaims any responsibility or liability for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on any third party web site accessed via a Link or Reference. Moreover, a Link or Reference does not imply an endorsement of any third party, any website, or the products or services provided by any third party. Moody s Related Research Press Release:» Announcement: Moody s announces impact on French corporate government-related issuers following France s sovereign outlook change, 16 February 2012 Credit Opinions:» Société Nationale des Chemins de fer Français» Deutsche Bahn AG Credit Focus:» Deutsche Bahn and : Peer Comparison, December 2012 (147997) Rating Methodologies:» Global Passenger Railway Companies, March 2013 (136815)» Application of Joint Default Analysis to Government-Related Issuers, April 2005 (92432)» Government-Related Issuers: Methodology Update, July 2010 (126031) To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this report and that more recent reports may be available in issuer page. All research may not be available to all clients. 11 JUNE 12, 2014 COMPANY PROFILE: SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS

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