2017 Keolis Results: sustained profitable growth and accelerated transformation

2017 was a very positive year for Keolis, with significant growth in its revenue, EBITDA and net result. Revenue increased by 6.4% to reach 5.4 billion euros. A strong increase in revenue was accompanied by a solid improvement in profitability (recurring EBITDA) which grew by +9.4% from €313M to €342M, between 2016 and 2017. The Group achieved a net result of €51M, an increase of +13% compared to 2016.

After a solid financial year in 2016 (+1.4%), Keolis renewed this trend with sustained growth (+6.4%) this year following successes in France and internationally.

The Group effectively anticipated structural changes in the mobility sector, which enabled it to continue delivering excellent results in its traditional areas of activity, and to accelerate its ‘new mobility solutions’ strategy.

2017 Results: Keolis boosts its growth

The Group’s revenue reached 5.4 billion euros in 2017, an increase of +6.4%, up 324 million euros as compared to 2016. This reflects a significant increase in annual revenue. Excluding the impact of foreign exchange and scope, there was a +5.9% organic increase in revenue. This growth can be explained by the good performance of the Group’s base across all of its activities, and by the start of several contracts won in previous years, including in the United Kingdom, Continental Europe, the United States and Australia.

The profitability of the Group (recurring EBITDA) increased compared to last year and reached €342M (+9.4%). Excluding the impact of foreign exchange and scope, organic growth was greater than that of annual revenue at 7.0%.
The financial structure of the Group remained solid with a contained net debt of 1.01 billion euros, which allowed it to publish a debt leverage ratio of 2.4x at the end of 2017, lower than the limit outlined in banking documentation.
The Group’s net result reached €51M, an improvement of +13% (+€6M) compared to 2016.

2017, a year of success in France

With 30% of its revenue in France up for contract renewal, Keolis was able to maintain its market share and consolidate its national base. The contracts won or renewed will generate annual revenue of 761 million euros.

Numerous contract renewals, including several iconic ones…

As the long-standing operator of the Lille network, Keolis had its contract renewed on 15 December 2017. Therefore, it will continue to operate mobility services for Lille’s transport authority, Métropole Européenne de Lille (MEL). The new seven-year contract will generate cumulative revenue of 2.1 billion euros. Keolis has invested all of its know-how in order to make the Lille network an international showcase in terms of automated metro and multimodality (metro, tram, bus, on-demand transport, bikeshare, ticketing integration with regional trains, etc.).

Rennes Métropole, the transport authority for Rennes, also renewed its trust in Keolis to manage the operation of its mobility services (metro, bus, bike-share, dynamic car-sharing, and transport for people with reduced mobility). This new contract commenced on 1 January 2018 for a period of seven years. It will generate cumulative revenue of 983 million euros. Keolis will support the transport authority in the launch of a second automated metro line in 2020, as well as its transition to electric energy, with the arrival of eight fully electric buses in 2018.

Île-de-France Mobilités, the transport authority for Greater Paris, chose to keep Keolis as the operator of Filéo, the largest on-demand transport service in Europe, which serves the airport hub of Paris-Charles-de-Gaulle (259km2 zone, 43,000 companies), and two Express bus lines to go to Roissy. The new contract commenced on 1 January 2018 for a period of six years, and will generate cumulative revenue of 77 million euros. The Group also had its contract renewed for the operation of urban transport services in Caen, Amiens, Quimper, Morlaix, Chaumont, Sarrebourg, Toul, Lons-le-Saunier, Pontarlier, and Obernai.

In terms of suburban transport, €75M in contracts was renewed.

…and new networks

On 1 April 2017, Keolis started operating the Chronoplus public transport network in Côte Basque Adour (Bayonne-Anglet-Biarritz), for which it won the contract in 2016. In 2019, Keolis will launch two ‘Tram’bus’ (high-frequency buses) fully electric.

At the end of October 2017, la Communauté d’Agglomération du Grand Besançon, the transport authority for Greater Besançon, entrusted Keolis with the operation of its Ginko public transport network. The contract commenced on 1 January 2018 and will generate cumulative revenue of 248.5 million euros over seven years. As part of its contract, Keolis will launch a comprehensive and connected mobility services offer combining tram, high-frequency bus, bike, ondemand transport, car-sharing and transport for people with reduced mobility.

Growth in operating revenue

Keolis was particularly dynamic in its performance with an increase in operating revenue and patronage.

Keolis recorded above average results for the sector with an increase of +4.6% for operating revenue, and a patronage increase of +3.8% among the 14 largest city networks, which account for 95% of revenue. These successes confirm the effectiveness of local customer loyalty campaigns, as well as the Group’s fare evasion strategy. Through these initiatives, Keolis continues to improve the revenue/expenditure ratio of networks for transport authorities. For example, the TCL network in Lyon hit a record rate of 60% in 2017, the highest in the sector by far.

Active external growth

Following the acquisition in 2017 of Les Coccinelles and Les Kangarous, two transport companies for people with reduced mobility in Greater Paris, Keolis acquired in January 2018 the Peglion Group which is based in the Alpes-Maritimes region (south east France). Peglion is a grouping of three coach transport companies for the region: TRAM, Phocéens Cars and Santa Azur, as well as a travel agency subsidiary, Phocéens Voyages.

Parking: strong growth for EFFIA

With more than 37 contracts won, including 23 new ones, EFFIA had a very successful year with close to 30,000 additional parking spaces. Keolis’ parking subsidiary now manages 210,500 parking spaces, including 19,500 in Belgium.

Thanks to the acquisition of Alfa Park and Parkeren Roeselare, EFFIA is now established in Belgium and plans to continue its international expansion in the coming years.

Despite a fairly depressed parking market, parking revenue increased by +4.7%, on a like-for-like basis. This significant increase was the result of customer loyalty campaigns by EFFIA, as well as its digital innovation strategy through its online booking service Resaplace and its partnership with OnePark, the internet and mobile booking platform.

Internationally recognised expertise in mass transit

The Group’s international activities currently represent 45% of its overall revenue. In 2017, Keolis strengthened its expertise in mass transit internationally, thanks to contract wins, renewals and network launches in metro, tram and regional train.

A pioneer and world leader in automated metros, Keolis continues to enhance its expertise internationally

In Qatar, as part of the RKH Qitarat joint-venture founded by the consortium with RATP Dev and the Qatari company Hamad Group, Keolis won the operating and maintenance contract for the new automated metro in Doha, and the tram network in the new city of Lusail, currently under construction. Estimated at more than three billion euros, this 20-year contract is one of the major projects underway for the 2022 soccer world cup. The network is scheduled to start operating in 2020.

In China, Keolis and its Chinese partner Shentong Metro, will launch the first automated metro line in Shanghai at the end of March 2018. In September 2017, Keolis won its second automated metro contract for the city, the future line is for Pudong International Airport, which will link Shanghai’s two existing terminals to new terminals. This project is intended to support significant growth at the airport, which is expected to cater for 80 million passengers annually in the next few years (compared to 60 million currently). The 20-year contract consists of several operating phases, the first of which will happen in June 2019.

 

World number one in trams

In Australia, Keolis had its contract renewed in September 2017 for the operation of Melbourne’s tram network, Yarra Trams, the largest tram network in the world (250km of double track). Keolis Downer, Keolis’ Australian subsidiary, which has been operating this network since 2009, has improved safety, achieved record levels of passenger satisfaction and maintained service punctuality, despite strong patronage growth.

At the end of December 2017, on the Gold Coast in Queensland, the Group opened a new extension to the G:link tram network, increasing its size from 13km to 20.3km. This extension allows for the connection of two modes of transport – trains and trams – and to better link Gold Coast and Brisbane, the two largest cities in the region. Keolis Downer has launched this extension in time for the Commonwealth Games in April 2018, to better manage the significant flows of passengers attending the event.

In Newcastle, on 1 July 2017, the Group became the first private operator to manage a multimodal network in Australia. In addition to buses and ferries, Keolis Downer will also operate a new tram network from 2019.

In the United Kingdom, on 1 July 2017, Keolis started operating Metrolink, in Manchester, the country’s largest tram network. The network, which covers 96km and serves 93 stations across Greater Manchester, including its airport and suburbs, carrying 37 million passengers a year.

In Denmark, at the end of December 2017, Keolis launched the first stage of the country’s first tram network in Aarhus. 26 trams, including 12 tram-trains, are currently running on the network, which will eventually cover 110km of track and service 51 stations.

Keolis reinforces its experience in regional commuter rail services

Keolis now operates 10 regional commuter rail services internationally in the Netherlands, Germany, the United Kingdom, and the United States and continues to grow and strengthen its expertise in passenger rail.

In Continental Europe, in December 2017 the Group launched the rail network of Teutoburger-Wald-Netz (TWN) in the North Rhine-Westphalia, Germany, with lines linking the cities of Zwolle to Enschede and Kampen in the province of Overijssel in the Netherlands.

In the United States, in Boston, thanks to the return to good operational performance, Keolis was able to improve the service quality of the network and expects to restore the financial health of this contract in 2018.

Keolis accelerates its transformation…

In digital mobility

Keolis enhanced its Plan Book Ticket solution by launching M-Ticket (digital ticket for smartphones) on the French networks of Montargis and Orléans. In Orléans, more than 10,000 one-time users have accessed M-Ticket, with a monthly user increase of 30% since its launch. For the first time in France, the all-inone digital solution integrates in a single mobile app, the ‘planning’, ‘purchase’ and ‘validation’ functions for a transport ticket. With this innovation, Keolis has achieved a new milestone in simplifying the passenger journey.

Keolis also developed the helloGo ‘Mobility as a service’ solution, the first ‘MaaS’ platform in the Netherlands, which will be deployed shortly by its subsidiary Keolis Nederland.

In autonomous mobility

Keolis and Navya multiplied its autonomous vehicle trials in France and internationally, with a total of 10 trials in seven countries. Since September 2016, the shuttles operated by Keolis have carried 69,000 passengers and travelled 27,000km.
Several operational scenarios have now been tested: regular services over a long time period (Lyon), services in a busy pedestrian zone (Paris-La Défense), services on a public road, information exchange with traffic lights, (Las Vegas) etc.

As part of its partnership with Navya, in 2018 Keolis will jointly launch the new Navya vehicle, ‘AutonomCab’, which was demonstrated for the first time at CES 2018 in Las Vegas.

In real-time shared mobility

In Newcastle (Australia), as part of its multimodal contract, Keolis launched in early 2018 an innovative on-demand transport service spanning a 50km2 radius, in partnership with VIA, a world leader in shared, real-time mobility solutions.

…and continues to diversify its activities

Keolis, number one in medical transport in France

In July 2017, Keolis partnered with Intégral and Douillard to create Keolis Santé, thus becoming the leading operator in medical transport in France, with 1,650 employees and 1,000 vehicles. Five months later, Keolis Santé partnered with the national ambulance network JUSSIEU secours and created its own commercial brand, thereby becoming the industry reference for ambulance transport in France. The business has 4,000 employees and 2,200 vehicles.

These good results in France and internationally confirm the effectiveness of Keolis’ strategy to continue with its core business, while accelerating its transformation into new mobility solutions.

The increase in the number of employees reflects the significant development of the Group. In 2017 the Group recruited 4,300 new employees; 1,300 in France and 3,000 internationally. Keolis now has 63,000 employees across its 16 countries of operation.

2017 was a very successful year and encourages us to keep going in the direction we have committed to: be strong in our traditional areas of activity, innovative in terms of our services and bold in our new business areas.

 

Jean-Pierre Farandou, Group Executive Chairman