Financial report 2003

CGEA Connex
36-38 avenue Kléber - 75799 Paris cedex 16 - France
Tel.: (33) 1 71 75 00 00 - Fax : (33) 7 71 75 10 00
Head office:
Parc des Fontaines
163-169, avenue Georges Clemenceau - 92735 Nanterre - France
RCS: B 383 607 090
Capital: 195 936 240 EUR
Bords de Loir - Photos : C.Majani d’Inguimbert
Financial report 2003
Contents
I
Consolidated balance sheet as of December 31, 2003
2
II
Consolidated income statement for the year ended December 31, 2003
4
III
Consolidated cash flow statement for the year ended December 31, 2003
5
IV
Summary of significant accounting policies
6
V
Consolidation methods
8
VI
Significant events of the period
9
VII
Changes in scope of consolidation
10
VIII
Additional notes to the balance sheet and income statement
16
IX
Statutory auditors’ report on the consolidated financial statements
28
C o n n e x
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F i n a n c i a l
R e p o r t
1
I
Consolidated balance sheet
as of December 31, 2003
(€ thousands)
December 31, 2002
December 31, 2003
Net
ASSETS
Amount
Gross
Dep./Amort.
Net
Amount
Provisions
Amount
Réf.
Note
Fixed assets
211 192
Intangible assets
244 533
(38 259)
206 274
VIII - (8)
264 326
Goodwill
356 837
(99 007)
257 830
VIII - (9)
1 443 919
Property, plant & equipment
2 911 028
(1 281 404)
1 629 624
VIII - (10)
1 919 437
Total intangible and tangible assets
3 512 398
(1 418 670)
2 093 728
11 954
(2 319)
9 635
VIII - (11)
VIII - (12)
Financial assets
13 939
Non-consolidated investments
3 410
Investments accounted for by the equity method
1 814
0
1 814
3 951
Other financial assets
5 083
(2 041)
3 042
76 915
Long-term loans
72 779
(5)
72 774
98 215
Total financial assets
91 630
(4 365)
87 265
3 604 028
(1 423 035)
2 180 993
42 480
(554)
41 926
2 017 652
TOTAL FIXED ASSETS (I)
VIII - (17)
Current assets
43 390
637 692
Trade receivables and other accounts receivable
651 686
(24 692)
626 994
VIII - (19)
215 126
Financial receivables
183 612
(1 711)
181 901
VIII - (17)
153 447
Cash and marketable securities
103 929
(1 010)
102 919
VIII - (17)
1 049 655
TOTAL CURRENT ASSETS (II)
981 707
(27 967)
953 740
21 978
3 089 285
2
Inventories
PREPAID EXPENSES AND DEFERRED CHARGES (III)
TOTAL (I+II+III)
Co n s o l i d a t e d
24 027
4 609 762
f i n a n c i a l
s t a t e m e n t s,
ye a r
24 027
(1 451 002)
e n d e d
VIII - (13)
3 158 760
D e c e m b e r
3 1 ,
2 0 0 3
(€ thousands)
December 31, 2002
December 31, 2003
Réf.
LIABILITIES
Notes
Shareholders’ equity
195 935
Capital stock (12 246 015 shares)
195 935
183 694
Additional paid-in capital
183 694
55 260
8 665
Group reserves
52 065
Net group income
(78 169)
443 554
Group share of net shareholders’ equity
353 525
VIII - (14)
226 047
Investment subsidies
375 137
VIII - (15)
669 601
TOTAL SHAREHOLDERS’ EQUITY (I)
728 662
Minority interest
36 866
1 813
38 679
In shareholders’ equity
33 874
In net income
11 475
TOTAL MINORITY INTEREST (II)
45 349
VIII - (14)
Other shareholders’ equity
100 000
Subordinated loan
100 000
100 000
OTHER SHAREHOLDERS’ EQUITY (III)
100 000
VIII - (17)
110 555
PROVISIONS FOR LIABILITIES AND CHARGES (IV)
169 776
VIII - (16)
Liabilities
628 370
Shareholder’s loan (of which €605,558 long-term)
683 107
VIII - (17)
553 210
Debt (of which €378,882 long-term)
511 050
VIII - (17)
923 025
Trade payables and other short term debt
906 210
VIII - (19)
2 104 605
2 100 367
TOTAL LIABILITIES (V)
65 845
DEFERRED INCOME (VI)
14 606
3 089 285
TOTAL (I+II+III+IV+V+VI)
3 158 760
C o n n e x
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F i n a n c i a l
VIII - (20)
R e p o r t
3
II
Consolidated income statement for
the year ended December 31, 2003
(€ thousands)
2002
2003
% Change
Notes
03 / 02
3 426 644
(3 186 518)
NET SALES
3 678 380
Cost of sales
7.3%
(3 473 729)
9.0%
(3 212)
R & D costs
(2 771)
- 13.7%
(15 155)
Selling costs
(13 817)
- 8.8%
(113 574)
- 4.7%
(119 175)
1 765
General and Administrative costs
Share in net income of SNC and SCI partnerships
VIII - (1)
747
Other operating revenue/(expense)
17 365
55.0%
VIII - (2)
115 556
E.B.I.T. (*)
92 601
- 19.9%
VIII - (3)
(11 545)
Net restructuring costs
(31 500)
N/A
VIII - (4)
(18 991)
Amortization of goodwill
(30 891)
62.7%
VIII - (9)
30 210
- 64.5%
(39 161)
- 23.2%
(7 569)
165.0%
NET FINANCIAL EXPENSE
(46 730)
- 13.2%
PRE-TAX INCOME ON CONTINUING OPERATIONS
(16 520)
Other income and expense
(27 440)
PRE-TAX INCOME
(43 960)
Income taxes and deferred taxes
(16 973)
12 646
NET INCOME FROM CONSOLIDATED COMPANIES
(60 933)
(2 046)
Group share in net income of companies accounted for at equity
(4 236)
Amortization of goodwill on companies accounted for at equity
(1 525)
11 207
85 020
(50 996)
(2 856)
(53 852)
31 168
6 542
37 710
(25 064)
(122)
NET OPERATING INCOME
Net interest expense
Other financial income/(expense)
10 478
NET INCOME
(66 694)
(1 813)
Minority interest
(11 475)
NET INCOME, GROUP SHARE
(78 169)
EBITDA (**)
283 320
8 665
290 523
VIII - (5)
VIII - (6)
VIII - (7)
VIII - (12)
107.1%
VIII - (9)
VIII - (14)
- 2.5%
(€)
0.71
Earnings per share
(6.38)
0.71
Diluted earnings per share
(6.38)
(*) Earnings before interest, tax, goodwill, amortization and restructuring costs
(**) Earnings before financial expense, tax, goodwill amortization, amortization and depreciation of long term assets and restructuring costs
4
Co n s o l i d a t e d
f i n a n c i a l
s t a t e m e n t s,
ye a r
e n d e d
D e c e m b e r
3 1 ,
2 0 0 3
III Consolidated cash flow statement
for the year ended December 31, 2003
(€ thousands)
2002
2003
192 435
Cash flow
190 878
(58 210)
Change in working capital
(88 340)
134 225
I. Cash provided by operating activities
102 538
(98 470)
Capital expenditure (net of disposals)
(80 852)
(111 952)
Acquisitions of financial assets
(37 478)
4 625
Divestments of financial assets
3 787
(31 587)
Change in long-term financial receivables
3 876
(8 765)
Change in short-term financial receivables
29 952
(3 561)
Marketable securities
12 909
11 136
Impact of changes in scope of consolidation
(238 574)
9 695
II. Cash used in investing activities
(58 111)
214 644
Change in long-term debt
23 307
(348 418)
Change in short-term debt
(80 424)
33 738
Change in other long-term liabilities
(2 975)
250 342
Increase in capital stock
(12 168)
Cash dividends paid
138 139
III. Cash provided by financing activities
(65 578)
(21 690)
IV. Foreign currency effect and other
(18 227)
82 482
Opening cash
12 101
Change in cash (I+II+III+IV)
94 583
Closing cash
384
(5 870)
94 583
(39 378)
55 205
C o n n e x
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F i n a n c i a l
R e p o r t
5
IV Summary of significant
accounting policies
The CGEA Transport Group was formed on
January 1, 1997 when the CGEA Group transferred
its passenger transport activities to a separate
subsidiary at net book value. In 2000, CGEA Transport
changed its name to Connex and in 2001, the
parent company, CGEA Connex, became a direct
subsidiary of Veolia Environnement.
The consolidated financial statements of the
Connex Group have been prepared in accordance
with generally accepted accounting principles:
n
n
n
French generally accepted accounting principles;
The provisions of the law of January 3, 1985 and
its enforcement decree of February 17, 1986;
The new consolidated accounting treatment
recommended by the Comité de la Réglementation Comptable (in Regulation 99-02 of
April 29, 1999).
The accounting methods applied are consistent
with those used by the Veolia Environnement
Group which owns the entire capital of CGEA Connex.
Veolia Environnement includes the Connex Group
in its consolidated financial statements.
1
Intangible assets and property,
plant and equipment
Intangible assets and property, plant and equipment are stated at cost.
Market share gained through new international
subsidiaries or subsidiaries operating in specific
markets is recorded as an intangible asset.
Purchased goodwill with a unit value of less than
6
€150,000 recorded in the balance sheets of fullyconsolidated companies is amortized in full in
the year of acquisition in the consolidated financial
statements; in the case of companies consolidated
for the first time, the difference between
accumulated goodwill amortization calculated in
accordance with Group policy has been charged
to their reserves as of the date of acquisition.
Deferred charges, which are recorded under
« Intangible assets », include project start-up
costs. A provision is booked for start-up costs on
projects still in development.
Since 1998, passenger transport vehicles
(buses and coaches) have been depreciated
over a period of 8 to 14 years throughout the
entire Group, in order to harmonize the depreciation
policies used by the various Group companies
and for consistency with those used by the
major foreign operators.
In the case of subsidized assets, subsidies are
either deferred and recognized as revenue over
the depreciation applicable to the asset
concerned or over the period during which the
subsidy is definitively acquired by the company,
with the exception of the Rouen metro-tramway
concession (see Note 15).
Recurring capital gains on disposal of passenger
transport vehicles are treated as operating
items.
Assets acquired under finance leases are capitalized.
They are stated at cost and depreciated using the
methods described below. The corresponding
liability is recorded as debt.
Notes to the consolidated financial statements, year ended December 31, 2003
Depreciation and amortization are calculated by the straight-line or reducing balance method to reflect as
closely as possible the actual decline in value of the assets concerned, as follows:
Asset
Depreciation period
Method
1 year
Straight-line
Purchased goodwill, less than € 150,000
Purchased goodwill, more than € 150,000
Other intangible assets
20 years
Straight-line
1 to 10 years
Straight-line or reducing balance
Buildings
20 years
Straight-line
10 to 15 years
Straight-line
Plant and equipment
5 to 10 years
Straight-line
Passenger transport vehicles
8 to 14 years
Straight-line
10 to 30 years
Straight-line
4 years
Straight-line
Fixtures, installations and improvements
Rolling stock
Service vehicles
Fixtures and fittings
10 years
Straight-line
5 years
Reducing balance
5 to 7 years
Straight-line
8 to 10 years
Straight-line
Computer equipment
Office equipment
Office furniture
2
Financial assets
Investments in non-consolidated companies are
stated at the lower of cost and fair value.
Fair value is determined based on market values
or probable realizable value, taking into account
the company’s earnings outlook.
3
Inventories
Raw materials inventories include vehicle fuel
and replacement parts. They are stated at cost.
Due to the nature and fast turnover of inventories,
cost is based on the last purchase price.
4
Receivables and payables
Receivables and payables are stated at nominal
value. Provisions are booked to cover any risk of
non-recovery of receivables.
5
Translation differences
Depending upon the underlying asset or liability,
translation differences are written directly either
to the income statement or to shareholders’
equity. Translation differences arising on loans in
foreign currencies contracted to finance foreign
subsidiaries are written to shareholders’ equity.
6
Corporate income tax
Since January 1, 2001, CGEA Connex and most
of its French subsidiaries have been integrated
in the Veolia Environnement tax group.
C o n n e x
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7
V
Consolidation methods
Group companies are consolidated by one of three
methods, as follows:
n
n
n
direct and indirect subsidiaries that are
exclusively controlled by the Group are fully
consolidated;
closely-held companies that are controlled
jointly by the Group and one or several partners
are proportionaly consolidated;
companies that are between 20% and
50%-owned and are not controlled by the
Group are accounted for by the equity method.
Companies that are not material in relation to the
Group as a whole and companies acquired at the
year-end are excluded from the consolidation scope.
1
Year-end
The consolidated financial statements have been
prepared on the basis of individual financial
statements or interim financial statements at
December 31.
2
Intercompany transactions
Intercompany transactions between fully-consolidated
companies are eliminated in full. Transactions with
proportionately-consolidated companies are eliminated based on the Group’s percentage interest.
Other intercompany transactions (dividends, changes
in provisions for impairment in value of investments
in consolidated companies and gains and losses
on intercompany sales of tangible fixed assets or
financial assets) are also eliminated in full.
3
Foreign currency translation
The balance sheets of foreign subsidiaries based
outside the euro-zone are translated into euros at
the year-end exchange rate, and their income
8
statements and statements of sources and uses
of funds at the average rate for the year. Any resulting
translation differences are recorded as a separate
component of consolidated shareholders’ equity
under “Cumulative translation adjustment”.
In 2003, the translation adjustment debited to
shareholders’ equity amounted to €6.6 million.
4
Goodwill
Goodwill represents the difference between the
cost of shares in consolidated companies and the
Group’s equity in the fair value of the underlying
net assets at the date of acquisition.
Fair value adjustments concern both property,
plant and equipment, principally passenger transport vehicles, and intangible assets such as market shares, which are not amortized. The value
attributed to these intangible assets is determined
using valuation methods based on objective, quantifiable indicators. The value is reviewed regularly,
using the same method.
Any remaining balance, which cannot be allocated
to the above-mentioned assets, represents goodwill.
Goodwill is amortized over twenty years.
As an exception to this principle, goodwill arising
on acquisition of certain companies engaged in
the execution of specific transport contracts may,
in certain cases, be amortized over a period that
takes account of the residual life of the contracts.
Goodwill representing less than €150 thousand
is amortized in full in the year of acquisition.
5
Pension commitments
The Group’s liability for pension commitments
and lump sum payments on retirement is calculated by the projected unit credit method on an
actuarial basis, taking into account the probability of employees remaining with the Group until
Notes to the consolidated financial statements, year ended December 31, 2003
retirement age, projected future salary levels and
the appropriate discount rates, determined separately for each individual country. In France, the
rate used is 4.75%. Outside France, the rates range
from 5.0% to 12.0%.
The liability of substantially all French companies
in the Connex Group for lump sum payments on
retirement is funded under an insured plan.
At December 31, 2003, commitments totaling
€11.9 million were funded under insured plans
and commitments of €47.2 million were covered
by provisions recorded in the balance sheet.
In 2000, an in-depth review of certain supplementary
retirement plans in place in several of the Group’s
subsidiaries revealed the existence of an actuarial liability similar in substance to the Group’s
pension commitments. This liability has therefore
been accounted for in the same way as existing
pension commitments. The total liability outstanding as of December 31, 2003 was covered by provisions amounting to €3.1 million.
6
Deferred taxes
Deferred taxes are recorded by the liability method
at local tax rates for all temporary differences between
restated book income and taxable income.
Deferred tax assets (including on tax loss carryforwards) are recognised only when it is probable
that the related tax benefit will be realized.
VI Significant events of the period
The Strategic Rail Authority (SRA) in the United
Kingdom decided to terminate the rail franchise
operated by Connex South Eastern. The contract
expired on November 9, 2003. Connex then sold
off all the assets related to this business and
transferred its personnel to the new franchisee.
Revenue from this contract amounted to €611 million for the full year in 2002 and €527 million for
the period up to the termination of operations in
2003. The decision was also taken to sell off the
bus lines at the beginning of 2004.
In the United States, after a 6-month transitional
period, Connex and its partners in MBCR subsidiary
took over management of the Boston suburburban
railway on July 1, 2003. Revenue ($200 million over
a full year) amounted to €94 million in 2003. The
contract is for a five-year period.
In Australia, the Melbourne contract negotiations
in 2003 were successful. The new contract was
signed at the beginning of 2004, for a five year
period, with annual revenue of €300 million
(€111 million in 2003).
In Norway, Connex won during the first quarter
2003 the bid related to the privatisation of FFR
(Finnmark Fylkesrederi og Ruteslskap AS) which
operates regional bus and ferry passenger services
in the Finnmark region. Estimated annual revenue
is €42 million.
In France, on August 1, 2003 Connex took over
the management of regular school bus lines
from the former operator STAHV (Vosges).
Annual revenue from these activities amounts
to €10.5 million.
C o n n e x
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F i n a n c i a l
R e p o r t
9
VII Changes in scope of consolidation
As of December 31, 2003, the consolidation scope
of the Connex Group included 407 companies
compared with 395 one year earlier. The 2003 figure includes:
n
371 fully consolidated companies,
n
28 proportionately consolidated companies,
n
n
n
n
8 companies or groups of companies accounted
for at equity.
The principal changes in the scope of consolidation
or percentage holdings were:
n
n
n
n
10
Full consolidation of MBCRC, the Boston contract operator (operations start on July 1),
Acquisition as of April 1, 2003 of FFR in Norway
(bus and ferry),
Purchase of Sometrar’s minority interests,
which was therefore fully consolidated in 2003
(56% proportionate consolidation in 2002),
First-time consolidation of the investment in
Israel,
n
n
n
Full consolidation of the Bavarian subsidiary,
BOB, as of December 31, 2003 (previously equity
method), after Deutsche Bahn exercised its put,
Equity method consolidation of Necoss in
Germany as of July 1, 2003 (previously proportionately consolidated),
Some first-time consolidations in France
(Prévost, Autocars Broch, Les Rubans Bleus,
Aria, SNN, PPS, Echos Piste, Trac Piste), in Germany
(Van Gerven, BGB – subsidiary of IGB…) and in
North and Eastern Europe (Connex Praha, Connex Hongrie, CTD Leasing 2003, Connex Tog
and Connex Kedzierzyn Kozle),
Disposal of companies: in France (Océtour, Bus
Air), in Spain (Edetania), and in Australia
(Victorian Railway Company Pty),
Purchase of minority interests in the Polish
subsidiaries (Connex Lancut, Connex Sanok
and Connex Tczew),
Connex South Eastern terminated operations
on November 8, 2003, after receiving notice
from the SRA on June 26, 2003.
Notes to the consolidated financial statements, year ended December 31, 2003
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Companies consolidated in 2003
FC CITRAM POITOU CHARENTES
99.52 100.00
99.51 100.00 First-time
FC CITRAM PYRENEES
99.52 100.00
FC AERO PISTE
59.77
FC CLOS PIERVIL
FC AIX ARBOIS AEROPORT
99.95 100.00 First-time
FC CMTS
FC ARY
99.51 100.00
PC COMOX
FC ATCRB
99.52 100.00
FC COMPAGNIE SAINT QUENTINOISE
FC A.RIA
99.00
98.80
99.80 100.00
100.00 100.00
59.99
DE TRANSPORTS
59.99 First-time
99.51 100.00
FC AUTO NICE TRANSPORTS
98.32
FC AUTOBUS AIXOIS
99.80 100.00
FC CONNEX AUVERGNE
99.52 100.00
FC AUTOBUS ARTESIENS
84.65
FC CONNEX BORDEAUX
99.99
FC AUTOBUS AUBAGNAIS
99.96 100.00
FC CONNEX LCB
100.00 100.00
FC AUTOBUS AURELIENS
69.64
FC CONNEX NANCY
100.00 100.00
FC AUTOBUS DU FORT
99.96 100.00
FC COTRAP
89.23
FC AUTOCARS BROCH
99.52 100.00 First-time
FC COURRIERS AUTOMOBILES PICARDS
87.05
97.53
FC AUTOCARS DU CALVADOS
99.52 100.00
FC COURRIERS BEAUCERONS
99.47
99.95
FC AUTOCARS SABARDU
99.82
99.86
FC COURRIERS DE LA GARONNE
99.51
99.99
FC AUTOCARS TOURNEUX
99.98
99.98
FC COURRIERS DE SEINE-ET-OISE
99.98
99.98
FC BUS DE L'ETANG DE BERRE
99.61
99.96
FC CPL
99.95 100.00
FC BUS MANOSQUE VAL DURANCE
51.98
52.00
PC CTCOP
49.96
49.96
FC CABARO
99.51
99.99
FC CTPO
99.98
99.98
FC CARBU WASH
59.77
99.00
FC ECHOS-PISTES
59.77
99.00 First-time
FC CARS CHARVIS
99.52 100.00
FC E-MOVE
99.99 100.00
FC CARS DU PAYS D'AIX
99.96 100.00
FC ENERGIE BUS
97.52
97.58
FC CARS ET BUS MAINTENANCE
99.60 100.00
FC ESTEREL CARS
99.99
99.99
FC CARS EXPRESS
86.97
PC EUROLINES SA
49.74
49.98
FC CARS ROQUES
99.52 100.00
FC EUROLUM
100.00 100.00
FC CAT
99.06
FC FASSETTA
99.52 100.00
97.24
70.00
99.88
99.38
99.99
89.52
FC CFTA
100.00 100.00
PC GECIR
45.00
FC CFTA Cargo
100.00 100.00 First-time
FC GENERALE DE LOCATION
99.95 100.00
FC CFTA CENTRE OUEST
99.52 100.00
FC CFTI
99.52
99.52
45.00
FC GTV VERNEY
99.60 100.00
FC GUERIF - MARGOGNE
99.60 100.00
FC CGEA Connex (Société-mère)
100.00 100.00
FC ILE-DE-FRANCE TOURISME
FC CGFTE
100.00 100.00
PC INTERCARS
50.00
50.00 First-time
FC INTERPISTE
59.77
99.00
99.52 100.00
99.00
100.00 100.00
FC CHARLIPISTE
59.77
FC CIE ARMORICAINE DE TRANSPORTS
99.60 100.00
FC JEANNEROT FRANCHE-COMTE
FC CIE DE TRANSPORTS DE SAUMUR
99.39
FC KUNEGEL
99.51
99.99
FC CIE DES AUTOCARS DE L'ANJOU
99.60 100.00
FC LA MARE AU MOULIN SCI
99.94
99.99
FC CIE DES AUTOCARS DE TOURAINE
99.52 100.00
FC LES AUTOCARS BLANC
99.91
99.95
FC CIE DES TRANSPORTS DE L'ATLANTIQUE
99.60 100.00
FC LES AUTOCARS MENARDI
99.96 100.00
FC CIE DES TRANSPORTS DE L'EST
99.60 100.00
FC LES CARS FAVIER
99.53 100.00
FC CIE DES TRANSPORTS D'ILE-ET-VILAINE
99.17
99.56
FC LES CARS ROSE
100.00 100.00
99.79
FC CIE DES TRANSPORTS DU MORBIHAN
99.60
99.99
FC LES MELEZES SCI
99.76 100.00
FC CIE DES TRANSPORTS DU PAYS DE VANNES
99.57
99.97
FC LES RAPIDES VAROIS
99.52 100.00
FC CIE NORMANDE D'AUTOBUS
99.52 100.00
PC LES RUBANS BLEUS
49.98
50.00 First-time
FC CIOTABUS
97.96
98.00
FC LITTORAL CARS
95.63
96.10
FC CIRCUL AIR
59.77
99.00
FC MAINE AUTOCARS
99.52 100.00
FC CITRAM AQUITAINE
99.51 100.00
FC MANU-PISTE
59.77
99.00
FC: Full Consolidation, PC: Proportionate Consolidation, EM: Equity Method
C o n n e x
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R e p o r t
11
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FC MECA PISTE
59.77
99.00
FC TDI
99.52 100.00
FC MEDIACITE
99.63 100.00
FC TEL
99.52 100.00
FC METRO TRAFFIC CONTROL
99.87
99.87
EM TOURISME VERNEY
99.60 100.00
FC MIDI PISTE
59.77
99.00
FC TOURISME VERNEY - MATERIEL ET SERVICES 99.60 100.00
FC MONTLUÇON CARS
99.52 100.00
FC TRA
99.95
99.99
FC NORD INVESTISSEMENT
99.92
FC TRAC-PISTE
59.77
99.00 First-time
FC OCECARS
99.52 100.00
FC TRANS PROVENCE
99.48
99.52
FC PASSAGERS POLE SERVICES
59.77
99.00 First-time
FC TRANS VAL D'OISE
99.96 100.00
FC POISSON
99.80
99.80
FC TRANS VAL DE France
99.96 100.00
FC PREVOST
99.52 100.00 First-time
EM TRANSEVRY
31.08
31.08
FC RAPIDES DE COTE D'AZUR
99.52 100.00
EM TRANSPORT AUTO BRUNIER
39.82
39.82
FC RAPIDES DE LA MEUSE
99.06
99.54
FC TRANSPORT ET TOURISME DU TERRITOIRE
99.60 100.00
FC RAPIDES DU LITTORAL
99.23
99.71
FC TRANSPORT PUBLIC DU VAL DU GIER
PC RHONE NORD AUTOCARS
50.00
50.00
FC TRANSPORT SERVICES ET GESTION
99.96 100.00
FC RMTT
59.97
59.97
FC TRANSPORTS BORDEUX
84.61
FC VE AIRPORT
59.97
60.00
FC TRANSPORTS DU VAL DE SEINE
99.59
99.99
FC SCI DE LA LAVANDE
99.96 100.00
FC TRANSPORTS DU VAL D'OISE
65.00
65.00
FC SCI ROSTAND
99.99 100.00
FC TRANSPORTS GAGNARD
99.52 100.00
FC SDCPT FOS
99.51 100.00
FC TRANSPORTS JOFFET
99.52 100.00
FC SEAFEP
99.52 100.00
FC TRANSPORTS VERNEY RHONE-ALPES
99.60 100.00
PC SEM AAAS
49.75
FC TRANS-SERVICES
99.82 100.00
FC SERVEAU
99.52 100.00
FC TRANSVAR
99.52 100.00
FC SETRA
99.95 100.00
FC VAROISE DE TRANSPORTS
99.96 100.00
FC SMEA
99.82
99.97
FC VATASUR
96.32 100.00
99.60
99.60
FC SNCP
99.97
49.99
FC SNEG
100.00 100.00
FC SNN
100.00 100.00 First-time
FC SOCORAIL
100.00 100.00
FC SOMETRAR
98.78
98.78
FC ST2N
95.03
95.03
FC STCE
99.87
99.87
FC STDE
99.97
99.97
FC STDG
99.51 100.00
FC STDLC
99.52 100.00
FC STDM
99.50
99.98
FC STE DES TRANSPORTS AUTO. DE L'OUEST
99.53
99.92
FC STE DES TRANSPORTS D'ANNONAY
DAVEZIEUX
99.60 100.00
FC STE DES TRANSPORTS DE NORMANDIE
99.60 100.00
EM STE FOURAS AIX
49.76
50.00
FC STPAS
99.92
99.92
FC STRAV
99.82
99.99
FC STUD
100.00 100.00
100.00 100.00
97.04
Austria
FC CONNEX VERKHER OSTERREICH GMBH
100.00 100.00
Switzerland
FC CONNEX VERKHER SCHWEIZ AG
100.00 100.00
Jersey
FC CONNEX JERSEY TRANSPORT
100.00 100.00
Asia pacific
FC CARSUD
50.99
50.99
FC CONNEX GROUP AUSTRALIA
100.00 100.00
FC CONNEX MANAGEMENT AUSTRALIA PTY
100.00 100.00
FC CONNEX NOUVELLE CALÉDONIE
100.00 100.00
FC CONNEX NSW PTY
100.00 100.00
FC CONNEX SYDNEY PTY
100.00 100.00
FC CONNEX TRAINS MELBOURNE PTY
100.00 100.00
FC CROSSLEY
100.00 100.00
FC MELBOURNE TRANSPORT ENTR.
100.00 100.00
Colombia
FC SUD CARS
99.96
99.98
FC T3M
83.33
83.33
PC CONEXION MOVIL
FC TCAR
99.88
99.88
PC STE INTERNATIONALE DE TRANSPORT MASSIVO 38.50
31.07
38.50 First-time
38.50
FC: Full Consolidation, PC: Proportionate Consolidation, EM: Equity Method
12
Notes to the consolidated financial statements, year ended December 31, 2003
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Germany
FC EISENBAHNWERKSTATT
FC CONNEX VERKEHR GmbH
100.00 100.00
PC HABUS GmbH
FC CONNEX NAHEVERKEHR
100.00 100.00
FC LAUSITZBAHN Gmbh
FC ALPINA BAD HOMBURG GmbH
51.00
FC NOB
100.00 100.00 First-time
51.00
100.00 100.00
PC NBRB TEILE UND LOGISTIK Gmbh
B U S : C O N N E X S TA D T V E R K E H R
100.00 100.00
50.00
50.00
100.00 100.00
FC NWB
64.00
64.00
FC ALPINA BIBERACH VERWALTUNGS GmbH 100.00 100.00
FC OME
100.00 100.00
FC ALPINA IMMOBILIEN GmbH
100.00 100.00
FC RBE
100.00 100.00
FC ALPINA MÜNCHEN GmbH & CO KG
100.00 100.00
FC WEG
100.00 100.00
FC ALPINA RHEIN-MAIN GmbH & CO KG
100.00 100.00
FC ALPINA VERWALTUNGS GmbH
100.00 100.00
FC AUTO BUS SERVICE GmbH
100.00 100.00
FC AUTO-LEGNER GmbH & CO KG
100.00 100.00
FC CONNEX STADTVERKEHR
100.00 100.00
FC DURENTRANS
FC GRIENSTEIDL OMNIBUS UND REISEBURO
FC HVG
51.00
F R E I G H T: C O N N E X C A R G O L O G I S T I C S
FC BAHNBETRIEBS-GESELLSCHAFT
51.00
100.00 100.00
50.21 First-time
80.00 100.00
FC CONNEX CARGO LOGISTICS GmbH
80.00
80.00
FC FVE
78.40
98.00
74.83
FC HTB
80.00 100.00
FC JENSEN VERWALTUNGS GmbH
100.00 100.00
FC IGB
40.17
50.21
FC JENSEN & DAMM GmbH & CO KG
100.00 100.00
FC NEB
26.88
66.92
FC K TANK GmbH
100.00 100.00
EM NEUTRAL CONTAINER SHUTTLE SYSTEM
31.20
39.00
FC K TANK REISEN GmbH & CO KG
100.00 100.00
FC NWC
40.80
51.00
FC KALENBERG GmbH & CO KG
100.00 100.00
FC RBB
80.00 100.00
60.08 100.00
FC NVG
74.83
36.80
BORSIGWALDE
FC BCB
74.86
FC RCB
FC OVR
100.00 100.00
74.86
FC SRS
18.82
70.00
FC PALATINABUS
100.00 100.00
FC TWE AG
43.10
53.88
FC TWE BAHNBETRIEBS GmbH
43.10 100.00 First-time
FC REGIOBUS GUTERSLOH
43.10 100.00
PC RHEIN-BUS
51.00
51.00
FC SAX-BUS EILENBURGER
56.00
56.00
FC SHA
FC SVG
United Kingdom
100.00 100.00
51.02
51.02
FC TAETER VERWALTUNGS GmbH
100.00 100.00
FC TAETER-AACHEN
100.00 100.00
FC CONNEX BUS
100.00 100.00
FC CONNEX LEASING
100.00 100.00
FC CONNEX SOUTH EASTERN
100.00 100.00
FC CONNEX TRANSPORT UK Ltd
100.00 100.00
FC TAETER-TOURS
51.00
51.00
Spain
FC TWE BUSVERKEHRS GmbH
43.10
53.88
PC ALMERAYA
25.00
25.00
EM BUS TURISTICO DE MALAGA SA
20.00
20.00
50.00
50.00
FC VAN GERVEN OMNIBUS
100.00 100.00
FC VERKEHRSUNTERNEHMEN K TANK
GmbH & CO KG
FC VGG
FC WEG-KV
PC WEST-BUS
Entrante
PC CORPORACION ESPANOLA
100.00 100.00
50.53
50.53
100.00 100.00
49.00
49.00
REGIONAL RAIL: CONNEX REGIOBAHN
TRANSPORTES SA
PC CORPORACION JEREZANA
50.00
50.00
PC DETREN
50.00
50.00
PC FCC CONNEX CORPORACION SA
50.00
50.00
PC TRANSPORTES MUNUCIPALES DE EGARA SA
40.00
50.00
29.84
50.00
TRANSPORTES URBANO SA
FC BIGS
100.00 100.00
FC BOB
100.00 100.00
PC TRANSPORTES URBANOS
FC CONNEX REGIOBAHN GmbH
100.00 100.00
PC UTE TREMBAIX
33.00
33.00 First-time
FC DEG
100.00 100.00
PC UTE TREMBESOS
33.00
33.00 First-time
DE SANLUCAR SA
FC: Full Consolidation, PC: Proportionate Consolidation, EM: Equity Method
C o n n e x
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R e p o r t
13
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United States
Israel
FC BELLE ISLE CAB COMPANY
100.00 100.00
FC CONNEX ISRAEL
100.00 100.00 First-time
FC CENTRAL CAB COMPANY
100.00 100.00
FC CONNEX TRANSPORTATION ISRAEL
100.00 100.00 First-time
FC CENTURY CAB COMPANY
100.00 100.00
FC CHAMPION CAB COMPANY
100.00 100.00
FC CHECKER CAB ASSOCIATION
100.00 100.00
FC CHOICE CAB COMPANY
100.00 100.00
FC CIRCLE CAB COMPANY
100.00 100.00
FC CLASSIC CAB COMPANY
100.00 100.00
FC AB GESTOR
100.00 100.00
FC COAST CAB COMPANY
100.00 100.00
FC ALUMINIUMBUSS I PITEÅ AB
100.00 100.00
FC COLONIAL CAB COMPANY
100.00 100.00
FC CGEA TRANSPORT AB
100.00 100.00
FC COMPUTER CAB COMPANY
100.00 100.00
FC CONNEX SVERIGE AB
100.00 100.00
FC CONNEX NORTH
100.00 100.00
FC CONNEX TÅG AB
100.00 100.00
FC CONNEX NORTH AMERICA
100.00 100.00
FC CONNEX TRANSPORT AB
100.00 100.00
FC CONNEX RAILROAD LLC
100.00 100.00 First-time
FC CONNEX TUNNELBANAN AB
100.00 100.00
FC CONNEX SOUTH
100.00 100.00
FC E-CONNEX AB
100.00 100.00
FC CONNEX WEST LLC
100.00 100.00 First-time
FC KALMAR BUSS EK. FÖR.
100.00 100.00
FC CORDIAL CAB COMPANY
100.00 100.00
FC KB BUSSNINGEN
Hungary
FC CONNEX HUNGARY K.F.T
100.00 100.00 First-time
Sweden
83.30
83.30
EM JIMMY'S CAB
50.00
50.00
FC LINJEBUSS MASKIN OCH TEKNIK AB
100.00 100.00
FC MBCRC
60.00
60.00 First-time
FC NORDPASSAGEN AB
100.00 100.00
FC NATIONAL LIMOUSINE
100.00 100.00
FC NORRBOTTENS TRAFIK AB
100.00 100.00
FC OAK STREET SALES
100.00 100.00
FC SKÅNSKA TRAFIK AB
100.00 100.00
FC SAFETY CAB COMPANY
100.00 100.00
EM TAGIA AB
FC SCOUT CAB COMPANY
100.00 100.00
FC TIMRÅBUSSARNA AB
100.00 100.00
FC SECURE CAB COMPANY
100.00 100.00
FC TOPPBUSS AB
100.00 100.00
FC SELECT CAB COMPANY
100.00 100.00
FC TULEVÄGENS EGENDOMS AB
100.00 100.00
FC SENTINEL CAB COMPANY
100.00 100.00
FC VERGENTA FINANS AB
100.00 100.00
FC SERENE CAB COMPANY
100.00 100.00
33.00
33.00
Denmark
FC SERVICE CAB COMPANY
100.00 100.00
FC SKYLINE CAB COMPANY
100.00 100.00
FC CONNEX DANMARK A/S
FC SUN TAXI CAB ASSOCIATION
100.00 100.00
FC CONNEX TRANSPORT TOG A/S
100.00 100.00
FC SUNRISE CAB COMPANY
100.00 100.00
FC CTD LEASING 1999 A/S
100.00 100.00
FC SUPERIOR CAB COMPANY
100.00 100.00
FC CTD LEASING 2000 A/S
100.00 100.00
FC SUPREME CAB COMPANY
100.00 100.00
FC CTD LEASING 2001 A/S
100.00 100.00
FC TAXI DISPATCH
100.00 100.00
FC CTD LEASING 2002 A/S
100.00 100.00
FC YELLOW BUS SERVICE
100.00 100.00
FC CTD LEASING 2003 A/S
100.00 100.00 First-time
FC YELLOW CAB ASSOCIATION
100.00 100.00
FC LINJEBUS LEASING AF 1998 A/S
100.00 100.00
FC YELLOW CAB COMPANY
100.00 100.00
FC LINJEBUS LEASING AF 1999 A/S
100.00 100.00
FC YELLOW MANAGEMENT
100.00 100.00
FC YELLOW TAXI ASSOCIATION
100.00 100.00
FC YELLOW VAN SERVICE
100.00 100.00
Lebanon
100.00 100.00
Norway
FC CONNEX BUSS AS
100.00 100.00
FC CONNEX NORGE AS
100.00 100.00
FC CONNEX TOG A/S
100.00 100.00 First-time
FC CGEA MEDITERRANEAN MIDDLE EAST SAL
99.99
99.99
FC CONNEX VEST AS
100.00 100.00
FC CONNEX LIBAN
99.67
99.67
FC FFR A/S
100.00 100.00 First-time
FC GOLCONDE SAL
60.91
61.11
FC ÖSTERHUS BUSS AS
100.00 100.00
FC: Full Consolidation, PC: Proportionate Consolidation, EM: Equity Method
14
Notes to the consolidated financial statements, year ended December 31, 2003
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Finland
FC PZN
100.00 100.00
FC ALHONEN & LASTUNEN OY
100.00 100.00
FC ROLGOED
100.00 100.00
FC CONNEX ESPOO OY
100.00 100.00
FC SAMENWERKENDE MAASTRICHTSE
FC CONNEX FINLAND OY
100.00 100.00
PERSONENVERVOERDERS
FC CONNEX HELSINKI OY
100.00 100.00
FC SBM BESLOTEN VERVOER
100.00 100.00
FC CONNEX VANTAA OY
100.00 100.00
FC SIESWERDA TAXI'S
100.00 100.00
FC HAKUNILAN LIIKENNE OY
100.00 100.00
FC STADSBUS GROEP MAASTRICHT
100.00 100.00
FC LINJALIIKE A & J HAUTAMAKI OY
100.00 100.00
FC STADSBUS MAASTRICHT
100.00 100.00
FC RIBEATA OY
100.00 100.00
FC STADSBUS MAASTRICHT PARTICIPATIES
100.00 100.00
FC TCMB
100.00 100.00
FC TTC
100.00 100.00
Poland
FC CONNEX KEDZIERZYN KOZLE SP .ZO.O
100.00 100.00 First-time
FC CONNEX POLSKA SP.ZO.O
100.00 100.00
FC CONNEX WARSZAWA SP.ZO.O
100.00 100.00
FC PKS CONNEX LANCUT SP.ZO.O
92.58
92.58
FC PKS CONNEX SANOK SP.ZO.O
92.56
92.56
FC ZKM CONNEX TCZEW SP.ZO.O
66.71
66.71
Czech Republic
FC CONNEX CR
100.00 100.00
FC CONNEX MORAVA A.S.
100.00 100.00
FC CONNEX PRAHA s r o
100.00 100.00 First-time
FC CONNEX VYCHODNI CECHY A.S.
100.00 100.00
FC SAD TRINEC / BUS SLEZSKO
100.00 100.00
FC AS CONNEX TARTU
100.00 100.00
FC AUTAVERHUUR GUUS BAGGGEN GELEEN 100.00 100.00
FC BBA
100.00 100.00
FC BBA BEDRIJF RANDSTAD
100.00 100.00
FC BBA FAST FERRIES
100.00 100.00
FC BBA TOURS
100.00 100.00
66.66
66.66
FC CGEA TRANSPORT NEDERLAND
100.00 100.00
FC CONNEX TRANSPORT NEDERLAND
100.00 100.00
FC CONTINENTAL BREDA
100.00 100.00
FC CRALS PERSONENVERVOER MAASTRICHT
100.00 100.00
PC EUROLINES BV NETHERLANDS
BAGGGEN LIMBURG
100.00 100.00
FC WALSMITS
100.00 100.00
Belgium
FC A. DE VOEGHT & CO BVBA
PC AMT
50.00
50.00
FC EUROTAX
100.00 100.00
FC LIMEX
100.00 100.00
FC NBA
100.00 100.00
FC OMNITAX
100.00 100.00
FC PBB
100.00 100.00
FC PWN
100.00 100.00
100.00 100.00
50.00
50.00 First-time
FC AUTOBUS & AUTOCARS GEORGES SPRL
100.00 100.00
FC AUTOBUS VERLEYEN N.V.
100.00 100.00
FC AUTOBUSBEDRIJF G. MEBIS & CO. N.V.
100.00 100.00
FC AUTOBUSSEN EN AUTOCARS
ACHIEL WEYN EN ZONEN N.V.
FC AUTOCARS DE POLDER N.V.
100.00 100.00
100.00 100.00
50.00
PC B&C
50.00 First-time
100.00 100.00
FC CONNEX BELGIUM N.V.
100.00 100.00
FC DE DUINEN N.V.
100.00 100.00
PC EUROLINES BELGIUM
Netherlands
FC BSM VOERTUIGSERVICE
FC VERVOERONDERNEMING GUUS
FC BUS DE POLDER N.V.
Estonia
100.00 100.00
50.00
50.00 First-time
FC GEENENS BUS & CAR N.V.
100.00 100.00
FC GEENENS N.V.
100.00 100.00
FC GRUSON AUTOBUS N.V.
100.00 100.00
FC HADEP N.V.
100.00 100.00
FC HEIDEBLOEM N.V.
100.00 100.00
FC HERMES N.V.
100.00 100.00
FC KATRIVA N.V.
100.00 100.00
FC LEFEVER N.V.
100.00 100.00
FC R. MELOTTE & CO. N.V.
100.00 100.00
PC S.O.D.E.L.I. S.A.
50.00
50.00
FC V.B.M.N.V.
100.00 100.00
FC VAN COILLIE N.V.
100.00 100.00
FC VAN PEE INVEST N.V.
100.00 100.00
FC VERVOERBEDRIJF GEBROEDERS DE VOS BVBA 100.00 100.00
100.00 100.00
FC YPRABUS S.A.
Slovenia
IG CERTUS, DD
61.00
61.00
FC: Full Consolidation, PC: Proportionate Consolidation, EM: Equity Method
C o n n e x
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R e p o r t
15
VIII Additional notes to the balance
sheet and income statement
1
Net sales
(€ thousands)
ANALYSIS OF NET SALES BY GEOGRAPHICAL AREA
2001
% Total
2002
% Total
2003
% Total
FRANCE
1 008 315
32.5%
1 290 167
37.7%
1 374 100
37.4%
INTERNATIONAL
2 094 686
67.5%
2 136 477
62.3%
2 304 280
62.6%
TOTAL
3 103 001
100.0%
3 426 644
100.0%
3 678 380
100.0%
Connex Group net sales amounted to €3,678.4m, a rise of 7.3% compared with 2002. Organic growth accounted for
6.3% of the increase and new acquisitions for the remainder. The main growth drivers were the acquisition of the
Verney Group in France, developments in Northern Europe with the FFR contract in Norway, business expansion in
the United States due the Boston contract, and activities in Spain and Germany. This was offset to some extent by
the two month impact of the loss of the South Eastern contract in the United Kingdom.
2
Other operating revenue and expense
This item totaled €17.4m, principally comprising €13.3m from the transfer of debt to the local authorities following
the renegotiation of the Melbourne contract. In 2002, this item principally included €6m in compensation from an
equipment manufacturer and proceeds of various asset disposals in Germany and the United States.
3
EBIT
EBIT amounted to €92.6m, 19.9% down on 2002. In France, EBIT increased particularly in urban transport
business. Outside France, it was satisfactory in Belgium, the Netherlands and the Czech Republic, and was boosted
by the Boston railway contract in the United States. It was offset to some extent however by the difficult situation
in the United Kingdom and also to a lesser degree by the situation in Israel and Lebanon.
4
Restructuring
This item includes the cost incurred by the early termination of the South Eastern contract in the United Kingdom
(€20.9m), and the cost of restructuring in Germany (€3.6m) and Sweden (€1.6m).
5
Net financial expense
Net financial expense totaled €46.7m, including:
n
n
6
interest expense of €39m,
other financial expense, principally comprising amortization of interest expense capitalized during the start-up
period of the Rouen metro concession (Sometrar).
Other income and expense
This item amounted to a net expense of €27.4m, including a €25.2m provision for the disposal of the bus business
in the United Kingdom and various capital gains and losses on the disposal of shares in France, Spain and Australia.
In 2002, this item amounted to a net gain of €6.8m, principally due to the €7.5m dilution gains on the Connex
Cargo / IGB share exchange, offset by various losses on the disposal of shares in France and Australia.
16
Notes to the consolidated financial statements, year ended December 31, 2003
7
Income taxes and deferred taxes
a) Income taxes
(€ thousands)
2002
2003
Current taxes
20 142
21 166
Deferred taxes
4 922
(4 193)
25 064
16 973
TOTAL
The deferred tax expense recorded in 2003 mainly includes:
n
n
n
deferred tax liabilities arising from the harmonization of depreciation periods for passenger transport vehicles,
deferred tax assets corresponding to tax losses, principally outside France,
deferred tax assets arising from the reduction of tax rates in Poland and the Czech Republic.
b) Deferred taxes
The impact of deferred taxes was as follows:
(€ thousands)
Balance
Impact of changes
Change during
Balance
End 2002
in scope and other
the period
End 2003
77 482
5 577
(737)
82 323
128 884
4 118
(4 930)
128 072
Impact on the consolidated balance sheet
Deferred tax assets
Provision for deferred tax liabilities
Impact on the consolidated statement of income
Deferred taxes
(4 922)
4 193
c) Tax reconciliation
The group’s theoretical tax for 2003, calculated at the standard French rate of 34.33% is a profit of €15.1m.
The difference with the actual tax charge of €17m leads to a difference of €32.1m, which breaks down as follows:
n
n
n
n
n
difference between French tax rate and local tax rates in countries outside France: €(4.5)m,
unused tax loss carryforwards in companies where their recovery is deemed too long-term or uncertain,
for instance, in Germany: €(14.1)m,
permanent differences for goodwill amortization: €(6.4)m,
prior year adjustments and other permanent differences (no tax on the provision for disposal of the bus business
in the United Kingdom): €(8.2)m,
a reduction in the tax rates in Poland and the Czech Republic: €1.1m.
C o n n e x
-
F i n a n c i a l
R e p o r t
17
8
Intangible assets
(€ thousands)
Opening
Impact of
Acquisitions
Disposals
Closing
balance
changes in scope
2003
2003
balance
2002
and other
2003
Intangible assets at cost
242 461
7 207
4 383
(9 518)
244 533
Accumulated amortization and provisions
(31 269)
(3 962)
(8 488)
5 461
(38 259)
Intangible assets - Net
211 192
3 245
(4 105)
(4 057)
206 274
Intangible assets comprise:
n
n
n
market shares worth €151.9m in 2003, compared with €155.7m in 2002, due to currency fluctuations,
purchased goodwill: €19.2m,
project development, engineering and start-up costs: €16.2m (including €5.1m in the Asia Pacific region and
€6.5m due to losses incurred in the initial years of Sometrar concession, which are being deducted from the initial profits generated by the contract).
In the statement of changes in financial position, intangible asset investments amounted to €10 million after deduction
of deferred charges and disposals.
9
Goodwill
(€ thousands)
Change during the year
Goodwill at January 1, 2003
Changes in scope and other, less impact of final fair value adjustments
Gross amount
Amort. and Provisions
Net amount
351 170
(86 844)
264 326
5 667
Amortization for the year
Goodwill at December 31, 2003
356 837
20 253
25 920
(32 416)
(32 416)
(99 007)
257 830
The transactions that generated goodwill are as follows:
n
n
n
n
Acquisition of Sometrar minority interests
Acquisition of companies in France
Acquisition of companies in Norway, Poland and Belgium
Review of the opening balance sheet of Certus
€ 5.7 m
€ 4.3 m
€ 15.0 m
€ 1.6 m
Due to the loss of the South Eastern contract, the remaining goodwill was amortized in full in 2003 (€9.7 million
goodwill amortization compared with €1.2 million in 2002), and the gross value and accumulated amortization
totaling €19.5m were written off.
18
Notes to the consolidated financial statements, year ended December 31, 2003
10
Property, plant and equipment
(€ thousand)
Balance
Impact of
Acquisitions
Disposals
Balance
End 2002
changes in scope
2003
2003
End 2003
and other
Property, plant & equipment at cost
Accumulated depreciation and provisions
Property, plant & equipment, net
2 611 207
367 927
182 450
(250 556)
2 911 028
(1 167 288)
(79 206)
(184 867)
149 957
(1 281 404)
1 443 919
288 721
(2 417)
(100 599)
1 629 624
Capital expenditure net of disposals and investment subsidies worth €10.9m amounted to €70.8 million.
The disposals included €55 million relating to the Connex South Eastern franchise in the United Kingdom, and the
sale of passenger transport vehicules, for fleet management purposes.
11
Principal investments in unconsolidated companies
(€ thousand)
%
Shareholders’
Net income
interest
equity
of previous
Cost
Depreciation
Net
period
C.T.V.M.I.
29.78%
6 722
(389)
2 058
873
873
1 040
1 040
Tramvia Metropolita del Besos, S.A.
2.91%
30 000
Tramvia Metropolita, S.A.
3.41%
30 852
352
2 058
Express Ferries
13.50%
6 054
856
882
PKS Connex Sedziszow Malopolski
50.82%
1 297
44
659
PKS Connex Brzozow
50.85%
1 255
(13)
642
Cityway
89.00%
(36)
(24)
195
(195)
0
5 605
(1 242)
4 363
11 954
(2 319)
9 635
Other investments (gross value per company < €0.5m)
Total at December 31, 2003
C o n n e x
-
F i n a n c i a l
(882)
0
659
642
R e p o r t
19
12
Investments accounted for by the equity method
(€ thousands)
Company
% interest
TAGIA AB
TAB
Group share
Group share
of net assets
of net income
33.00 %
220
(1 094)
39.82 %
744
100.00 %
674
STE FOURAS AIX
50.00 %
85
NECOSS (1)
39.00 %
BOB (2)
50.00 %
TOURISME VERNEY
Various (immaterial individual items)
TOTAL
107
(457)
(2 808)
91
16
1 814
(4 236)
(1) The NECOSS investment is stated at zero in assets following the writedown of €0.5 million as a provision for liabilities.
(2) Full consolidation of the Bavarian subsidiary, BOB, as of December 31, 2003 (previously equity method), after Deutsche Bahn exercised its put.
Change in group share of net assets
(€ thousands)
At January 1, 2003
3 410
Acquisitions and other (1)
2 232
Net income of companies accounted for by the equity method
(4 236)
Accumulated translation adjustment
(49)
Writedown of Necoss shares to a provision for liabilities
457
At December 31, 2003
1 814
(1) Mainly corresponds to the change in consolidation method for BOB (Equity method in 2002, full consolidation as of December 31, 2003) and the disposal
of the «Victorian Railway Company ».
13
Prepaid expenses and deferred charges
(€ thousands)
Prepaid expenses
Foreign currency translation gains (losses)
Total
2002
2003
Change 03/02
21 978
24 027
2 049
0
0
0
21 978
24 027
2 049
In 2003, prepaid expenses included €3.1 million in maintenance costs for the Melbourne contract. In 2002, this item
included €6.3 million in lease payments for rolling stock and railway equipment related to the South Eastern contract
in the United Kingdom.
20
Notes to the consolidated financial statements, year ended December 31, 2003
14
Changes in shareholders’ equity
Group share
At January 1, 2003
(€ thousands)
Capital
Additional
stock
paid-in capital
195 935
183 694
Net income for the year
Reserves
Total
63 925
443 554
(78 169)
(78 169)
Foreign currency translation adjustments (1)
(6 065)
(6 065)
Dividend payment
(3 060)
(3 060)
Other changes (2)
(2 735)
(2 735)
(26 104)
353 525
At December 31, 2003
195 935
183 694
(1) Principally due to the US dollar €(5.0)m, pound sterling €(2.1)m, Swedish krona €(1.6)m, Czech koruna €(1.3)m and the Israeli shekel €(0.9)m, offset
in part by the €6.2m rise in the Australian dollar.
(2) Principally due to the fair value adjustments made to the Group’s share of net assets after the Bavarian subsidiary, BOB, previously accounted for by
the equity method, which was charged directly to Group consolidated reserves on the date of acquisition of control, in accordance with regulation
99-02 (§ 221).
Minority interests
(€ thousands)
At January 1, 2003
38 679
Dividends paid to minority shareholders of subsidiaries
(2 852)
Effect of changes in scope and other
(1 485)
Minority interest in net income for the year
11 475
Foreign currency translation adjustments
(468)
45 349
At December 31, 2003
This increase corresponds principally to the entry of minority shareholders in the Boston contract and a reclassification
of German freight business.
15
Subsidies
(€ thousands)
Subsidy for the Rouen metro/tramway concession
Other investment subsidies
TOTAL
Increases
Writebacks
Balance
Balance
Change in scope,
End 2002
method & other
End 2003
170 546
134 000
304 546
55 501
12 092
10 892
(7 894)
70 591
226 047
146 092
10 892
(7 894)
375 137
The subsidy granted by the Rouen municipal authorities for the Rouen metro/tramway concession (Sometrar) is
intended to finance non-replaceable assets which must be handed back at the end of the concession period for
no consideration. Changes during the period were due to the change in consolidation method (proportionate
consolidation at 56% as of December 31, 2002; full consolidation as of December 31, 2003).
C o n n e x
-
F i n a n c i a l
R e p o r t
21
16
Long and short-term provisions
(€ thousands)
Balance
Changes in scope
End 2002
& other
Increases
Decreases
Balance
8 916
(1 254)
4 520
(2 161)
844
(296)
282
(276)
554
3 951
(500)
1 240
(326)
4 365
13 711
(2 050)
6 042
(2 763)
14 940
End 2003
Provisions for impairment
Receivables and marketable securities
Inventories
Investments & other financial assets
SUB-TOTAL (I)
10 021
Provisions for liabilities and charges
Provisions for major repairs and renewals
5 775
382
2 525
(1 247)
7 435
Provisions for litigation
7 790
383
4 904
(2 929)
10 148
Provisions for pension commitments
48 253
663
4 753
(3 419)
50 250
Provisions for SOMETRAR assets managed
under concession
22 840
17 946
5 535
0
46 321
Other provisions for liabilities & charges (1)
25 897
9 809
37 205
(17 289)
55 622
SUB-TOTAL (II)
110 555
29 183
54 922
(24 884)
169 776
TOTAL (I + II)
124 266
27 133
60 964
(27 647)
184 716
33 317
(1) Including, as of December 31, 2003, a €24.8 million provision for the disposal of the bus business in the United Kingdom, and a €1.3 provision for the
disposal of T3M combined transport business.
Provisions for litigation essentially relate to social, tax and commercial matters and those settled by an industrial
tribunal. For a breakdown of pension commitments see paragraph V.5.
Net charges to depreciation, amortization and provisions:
(€ thousands)
Operating
Restructuring
expense
Provisions for impairment
Provisions for liabilities and charges
Sub-total short and long-term provisions
Exceptional
Financial
expense
expense
2 572
Goodwill
707
122
4 677
25 239
2 694
4 677
25 239
Total
3 279
30 038
707
33 317
Depreciation and amortization of property,
plant and equipment and intangible assets and
184 241
1 270
3 302
1 816
185 511
investment subsidiaries written back to income
Amortization of deferred charges
7 918
Goodwill amortization
Total
22
190 237
4 677
28 325
8 625
13 036
32 416
32 416
32 416
264 280
Notes to the consolidated financial statements, year ended December 31, 2003
17
Net debt
(€ thousands)
2002
2003
Subordinated loan
100 000
100 000
0
Shareholder loan
628 370
683 107
54 737
Limited recourse project financing (1)
Borrowings
Change 02/03
29 956
48 934
18 978
523 254
462 116
(61 138)
Cash and marketable securities
(153 447)
(102 919)
50 528
Financial receivables (2)
(215 126)
(181 901)
33 225
Long term loans (3)
(76 915)
(72 774)
4 141
Total
836 092
936 563
100 471
(1) Debt contracted to finance the Rouen metro infrastructure and installations (€30 million in 2002 and €49 million in 2003) is classified as limited recourse
in that it is secured only by the project financed. The change in 2003 is due to full consolidation, (it was 56% consolidated in 2002).
(2) This item principally comprises prefinancing of trains under construction (Australia, Germany,…).
(3) Including €17.7 million as of December 31, 2003, contracted by Connex South Eastern in the United Kingdom (long-term investment made at the
start of the franchise contract at an 8% interest rate), compared with €38.4 million as of December 31, 2002, and a €44.9 million financial deposit for
trains in Australia.
Maturity of debt:
(€ thousands)
Total debt
Subordinated loan
Maturity of debt at December 31, 2003
2002
2003
100 000
100 000
< 1 year
1 to 5 years
> 5 years
100 000
Shareholder loan
628 370
683 107
77 549
605 558
Other debt
553 210
511 050
132 168
251 432
127 450
1 281 580
1 294 157
209 717
856 990
227 450
TOTAL
1 084 440
Unused credit lines
Unused credit lines amounted to €169.4m as of December 31, 2003, including €139.6m in shareholder loan facilities.
C o n n e x
-
F i n a n c i a l
R e p o r t
23
18
Group exposure to interest rate risk
(€ thousands)
Currency
Other long-term debt
Euro (€)
TOTAL
Fixed rate
Floating rate
117 287
563 719
681 006
American dollar (US$)
2 540
2 970
5 510
Australian dollar (A$)
46 997
109 945
156 942
Swedish krona (SKr)
1 163
88 220
89 383
Danish krona (DKr)
4 030
73 386
77 416
Norwegian krona (NKr)
Other
TOTAL
20 248
39 116
59 364
37
14 782
14 819
192 302
892 138
1 084 440
Veolia Environnement plays the role of internal banker, in terms of partly providing various credit facilities and taking
responsibility for interest rate risk.
As of December 31, 2003, these credit facilities comprised short and long-term loans and a subordinated loan of
€100 million, all at floating interest rates.
19
Receivables and payables
a) Accounts receivable
(€ thousands)
2002
2003
Change 02/03
548 398
545 265
(3 133)
Provisions for doubtful accounts
(6 736)
(7 300)
(564)
Other non-operating receivables
18 548
6 705
(11 843)
Deferred tax assets
83 420
99 716
16 296
Provisions for deferred tax assets
(5 938)
(17 392)
(11 454)
637 692
626 994
(10 698)
Trade receivables and other accounts receivable
Total accounts receivable
At December 31, 2003, receivables sold without recourse under DAILLY Act contracts amounted to €31.9 million
compared with €21.3 million as of December 31, 2002.
24
Notes to the consolidated financial statements, year ended December 31, 2003
b) Accounts payable
(€ thousands)
Trade payables and other accounts payable
Other non-operating liabilities
Deferred tax liabilities
2002
2003
Change 02/03
726 313
677 503
(48 810)
18 422
16 387
(2 035)
128 884
128 072
(812)
Other long-term liabilities
49 406
84 248
34 842
Total accounts payable
923 025
906 210
(16 815)
All trade and other accounts payable are due within one year.
20
Deferred income
(€ thousands)
Deferred income
Foreign currency translation gains
Total
2002
2003
Change 02/03
64 361
14 606
(49 755)
1 484
0
(1 484)
65 845
14 606
(51 239)
The change compared with 2002 is mainly due to the termination of prepaid subscriptions related to the South Eastern
contract in the United Kingdom (€53.9 million as of December 31, 2002).
21
Average number of employees
2002
2003
Change 02/03
2 075
1 964
(111)
Other employees
46 314
49 473
3 159
TOTAL
48 389
51 437
3 048
Executives
The above figures correspond to the weighted average number of employees, determined based on hours worked
and staff utilization rates.
The average number of Group employees is determined as follows:
n
n
n
All employees of fully-consolidated companies are included,
The number of employees of proportionately consolidated companies included is based on the Group’s
percentage interest in the company,
Employees of companies accounted for by the equity method are not included.
The increase in the average number of employees was due to organic growth in Connex Transport AB (1,110 extra
employees) and in business in the United States (1,189 extra employees).
C o n n e x
-
F i n a n c i a l
R e p o r t
25
22
Off-balance sheet items
For greater clarity, collateral granted (see part 23) and commitments given and received under financing arrangements
for the acquisition of certain items of rolling stock in France are identified separately.
(€ thousands)
2002
2003
Guarantees
13 708
13 240
Performance bonds
97 809
75 657
7 465
17 980
118 982
106 877
Other commitments received
1 352
7 370
TOTAL
1 352
7 370
Commitments given
Other commitments given
TOTAL
Commitments received
Guarantees
Performance bond commitments given in 2003 include:
n
n
n
€29.7m in counter-guarantees given by CGEA Connex in connection with the Melbourne contract,
€15.8m in counter-guarantees given by MBCR in connection with the Boston contract,
€10m in counter-guarantees given by CGEA Connex for the Dublin contract.
In 2002, they also included €52.3m in counter-guarantees given by CGEA Connex in connection with the UK railway
contract.
Other commitments given include the commitment to purchase the minority interests in the German freight
holding (Connex Cargo).
Other commitments not valued:
CGEA Connex has guaranteed the Rouen local authorities that it will implement the operating contract for the Zénith
in Rouen until February 2006, in the event of the default of the operator or its parent company, Vega (former subsidiary
of CGEA Connex). Part of Vega’s shares have been mortgaged to Connex, as consideration for this guarantee.
26
Notes to the consolidated financial statements, year ended December 31, 2003
Commitments given and received in connection with financing
arrangements for the acquisition of rolling stock
(€ thousands)
2002
2003
Commitments given
197 575
297 535
Commitments received
112 591
171 422
Since 2000, the Group has contracted off-balance sheet financing arrangements for the acquisiton of certain
items of rolling stock in France.
Investments in this respect totaled €57.8m in 2003 and €151.3m on a cumulative basis.
Under these arrangements, the financing organization has undertaken to make lease payments to the group
totaling €171.4m, under a ten-year head lease, while the Group has undertaken to make rental payments to the
financing organization totalling €14.3m in 2000, €17.5m in 2001, €40.7m in 2002 and €53.6 in 2003, under a
seven-year sublease. The rolling stock concerned has been mortgaged to the financial organization for the sum of
€171.4m.
Operating and finance leases
Connex leases assets under operating and finance leases. As of December 31, 2003, the minimum future lease
payments amounted to:
(€ thousands)
Operating
Finance
lease
lease
2004
173 378
34 827
2005
169 878
24 320
2006
161 470
18 736
2007
154 522
22 510
2008
148 621
10 173
2009 and subsequent years
219 778
76 308
1 027 647
186 874
TOTAL
23
Collateral granted
(€ thousands)
Collateral granted
2002
2003
77 899
117 291
This item mainly comprises vehicles pledged as collateral for bank debts.
C o n n e x
-
F i n a n c i a l
R e p o r t
27
IX Statutory auditors’ report
on the consolidated financial statements
For the period ended december 31, 2003
TRANSLATED FROM THE ORIGINAL DOCUMENT ISSUED IN FRENCH
In accordance with our appointment by your Shareholders’ General Meetings, we have audited the accompanying consolidated
financial statements of CGEA Connex, for the year ended December 31, 2003.
These consolidated financial statements have been approved by the Board of Directors. Our responsibility is to express an opinion on
these consolidated financial statements, based on our audit.
1
Opinion on the consolidated financial statements
We conducted our audit in accordance with French generally accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance that the consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements, prepared according to French generally accepted accounting principles, give
a true and fair view of the financial position and the results of operations of all the entities consolidated.
2
Basis of our assessment
In conformity with the provisions of Article L.225-235, paragraph 2, of the Commercial Code, introduced by the French Financial Security
Act of August 1, 2003 and applicable for the first time to this accounting period, which require that we substantiate our assessments,
we draw your attention to the following:
The management of CGEA Connex is required to make estimates and assumptions which affect the amounts reported in the financial statements and accompanying notes. In our audit of the consolidated financial statements for the period ended December 31, 2003,
we concluded that, of the items subject to material accounting estimates, property, plant and equipment, intangible assets and provisions
for contingencies and charges might require substantiation of our assessments, on the following points:
n
n
Concerning the methods used to value the main goodwill items and property, plant and equipment and intangible assets, as described
respectively in notes V-4) and IV-1) of the notes to the consolidated financial statements, our work consisted in assessing the amounts,
disclosures and assumptions used to estimate these items.
Regarding provisions for contingencies and liabilities, we assessed the basis on which these provisions were recorded and reviewed
the appropriateness of the information provided in note VIII -16) of the notes to the consolidated financial statements.
We also assessed the significant estimates and assumptions made by management to prepare the financial statements, and ensured that
they were reasonable.
These assessments are an integral part of our audit of the financial statements as a whole. They therefore enabled us to issue the
unqualified opinion set out in the first part of this report.
3
Specific verifications
We also verified the information provided in the group’s management report. We have no comments to make as to its fair presentation
and its conformity with the consolidated financial statements.
Courbevoie and Paris, April 26, 2004
The Statutory Auditors
BARBIER FRINAULT & CIE - ERNST & YOUNG
Jean BOUQUOT
28
RSM SALUSTRO REYDEL
Bernard CATTENOZ - Philippe ARNAUD
Notes to the consolidated financial statements, year ended December 31, 2003
CGEA Connex
36-38 avenue Kléber - 75799 Paris cedex 16 - France
Tel.: (33) 1 71 75 00 00 - Fax : (33) 7 71 75 10 00
Head office:
Parc des Fontaines
163-169, avenue Georges Clemenceau - 92735 Nanterre - France
RCS: B 383 607 090
Capital: 195 936 240 EUR
Bords de Loir - Photos : C.Majani d’Inguimbert
Financial report 2003