All the accounts (and investments) of Ferrovie Italiane

All the accounts (and investments) of Ferrovie Italiane

Here are the salient numbers of the Ferrovie dello Stato Italiane 2020 budget

The Ferrovie group headed by the managing director Gianfranco Battisti is confirmed as the first industrial group for technical investments in Italy. Last year there were about 9 billion (up by 5% on 2019), with 98% employed in Italy, while over 7 billion were directed to railway and motorway infrastructures, supporting the country's production chains through financial advances for about a billion euros (382 million in 2019). The overall contribution to GDP was therefore equal to 2.4%.

As regards the accounts, operating revenues were 10.8 billion, down by 1.6 billion (-12.8%) compared to the previous year, even if compared with a decrease of approximately 1.7 billion due solely for the effects of Covid-19 . The other data show an Ebidta of +1.6 billion, but taking into account the negative impact of a pandemic of over one billion.

The operating result was negative for 278 million, compared to a positive figure of 829 million in 2019. In any case, Fs explains in a note, "the optimization of industrial processes allowed a limited loss": 2020 thus closed for the group in negative for 562 million.

Fs also confirms "the capital solidity" which stands at 41.4 billion in equity. The effects linked to Covid "include the registration of the contributions envisaged at national level, and in part paid during the year, by the Relaunch and August decrees" for an amount equal to 953 million ", thus mitigating the negative effects on the group, caused of the activity block.

"The pandemic crisis still in progress – declared the CEO GianfrancoBattisti – required a thorough reflection on the evolution of the reference sectors". FS has also "set up a task force aimed at governing the actions of the group connected to the NRP, with the aim of coordinating the development of the approved plan, with reference to the projects for which the company will be responsible, monitoring their advancement and realization ».



The Board of Directors of Ferrovie dello Stato Italiane today examined and approved the draft annual financial report of the Company, which also includes the consolidated financial statements of the Group, as at 31 December 2020.

The performance of the year in question, as anticipated in the highlights, suffers the negative effects associated with the spread of the COVID-19 pandemic ("Coronavirus"), which had impacts on the entire production system, with particular consequences on the mobility of people and goods. All the margins for the year, in the absence of impacts from COVID, therefore concentrated in the passenger transport sector and, to a lesser extent, freight, would have closed largely positively, in full continuity with recent years, also thanks to the good performance of the other sectors of the Group's business. Indeed:

Ø the Group's operating revenues fell, compared to 2019, to € 10.8 billion, with an overall decrease of € 1.6 billion (-12.8%), essentially due to the Coronavirus;

Ø the decrease in revenues is accompanied by the decrease in the Gross Operating Margin (EBITDA) of 976 million euros, which while remaining positive reaches 1.6 billion euros compared to the 2.6 billion euros of the previous year (-37, 4%), however discounting COVID effects for approximately 1 billion euro (with the EBITDA Margin which consequently goes from 21% to 15%);

Ø EBIT, as a result, decreases, going from a positive 829 million euros in 2019 to a negative 278 million euros in 2020 (-133.5%), after an impact related to the Coronavirus equal to -999 million euros, thus as the net result for the period, which fell to -562 million euros (-1,146 million euros compared to 2019; -196.2%) after COVID effects for 986 million euros.

Revenues from transport services, equal to 5 billion euros, show a decrease of 2.5 billion euros compared to 2019 (of which 2.3 billion due to the COVID effect). Specifically, due to the effects of the pandemic, all components related to transport show a negative sign: in fact, both the revenues relating to passenger services on Long Haul and Short Haul rail have decreased (overall -2.4 billion euros approximately), that revenues related to passenger transport by road (-101 million euros) and freight transport by rail (-75 million euros).

It is clear that the aforementioned overall decrease in transport revenues during the year is a direct consequence of the health emergency and of the restrictions imposed on the mobility sector, in particular in the lockdown phase, with a loss of demand volumes. recorded in the year by Trenitalia equal to 67.9% in the long distance market and a reduction in the number of seats * km that can be sold equal to 61%; in the regional context, the reduction in traffic connected with the COVID emergency resulted in a sharp reduction in passenger-km (-55.3%) with a reduction in production in terms of train-km equal to -14.9% compared to to 2019.

Operating costs for the year amounted to € 9.2 billion, down by € 610 million (6.2%) compared to the previous year, largely thanks to the vigorous cost saving actions promptly implemented by management of the Group during the lockdown period and in subsequent months.

It should also be noted that the economic effects linked to COVID described above include the registration of the contributions envisaged at national level, and partly paid out during the year, by Legislative Decree no. 34/2020 (so-called "Relaunch" decree) and by Legislative Decree no. 104/2020 (so-called “August” decree) for a total amount of 953 million euros, which therefore mitigated the negative effects rained on the Group due to the pandemic. On the other hand, it was not possible to include all the contributions to cover the LH market passenger business, to offset the effects of the Coronavirus, because the share referring to the second half of 2020, as well as that destined, for the entire year, to the freight business, for a total of 406 million euros, the investigation phase by the European Union is still in progress.

Despite the strong, objective complexities caused by the COVID emergency in 2020 to all the industrial production chains in the country, the FS Italiane Group has continued in its central role in supporting the national industrial system. In fact, during the year a volume of technical investments equal to 9 billion euros was made, thus contributing significantly, with a growth of 5% compared to 2019, to the strengthening of the country (98% investments in the national territory and over 7 billion in railway infrastructures and motorways) with particular reference to the development and renewal of the transport, infrastructure and logistics sectors. In this context, the Group has also guaranteed full financial support to the construction and procurement sector, through the provision of advances to suppliers for approximately 1 billion euros (compared to 0.4 billion in 2019).

FS Italiane has chosen, and confirmed in 2020, environmental, social and economic sustainability as a guiding element for the definition of strategic and operational choices and to ensure responsible growth of the business in the medium and long term. The distributed economic value, and therefore transformed into wealth created for the benefit of the various categories of stakeholders by the FS Italiane Group in 2020 (mainly operating costs for goods and services and the payment of personnel), amounts to € 9.6 billion, equal to 88% of the economic value generated (+7% points compared to 2019, when it was equal to 81%). Furthermore, the activities and investments of the FS Italiane Group contribute directly and indirectly to the growth of the Italian economy by 2.4 percentage points of GDP, generating an equivalent employment impact of 260,000 units.

For environmental sustainability, FS Italiane – which will be carbon neutral by 2050 – confirms the improvement in the emissions trend, even net of the reduction in production due to the pandemic. The FS Italiane Group has also reached the Leadership bracket, with the “A-“ score of the rating issued by the Carbon Disclosure Project, one of the main organizations in the sector.

In 2020, the Group further committed itself with the establishment of the "Program Team for adaptation initiatives in the face of the risks deriving from climate change", an inter-company working table which aims to define the quantification of exposure to the risks deriving from climate change in the long term and an organic plan of adaptation intervention projects consistent with the forecasts of the European Green Deal.

In this context, ESG finance for the Group's sustainable investments plays a significant role. In particular, in 2020 new ESG finance operations were carried out for 990 million euros in counterpart of supranational institutions and banks that go to support the green bond issues carried out to date for a total of 2.3 billion euros. Euro and underwritten by institutional investors. Finally, more than 100,000 tons of CO2 were saved thanks to the purchase of green energy for all the electricity consumption of the road network managed by the Group. The commitment in the recovery of special waste is also significant, which is confirmed in 2020 at over 95%.

Aware of how much the improvement of economic, environmental and social performance also passes from the involvement of its suppliers, the FS Group intends to accompany them on a path of growth, through the integration and consolidation of environmental and social considerations in the procurement phase. Almost 600 suppliers were involved in 2020, also through the use of EcoVadis, one of the most accredited international platforms.

In the social sphere, sustainability is also realized thanks to the network of "Blue Rooms", which saw the number of active stations rise to 332 in 2020. An increasingly extensive network, which guarantees widespread accessibility to travel and attention to the needs of people with disabilities. Also in 2020, the "National Blue Room" was established to support the telephone activities of the "Blue Rooms", and to monitor and improve the services dedicated to people with disabilities and reduced mobility.

With reference to the territory, there were numerous initiatives: among these, the 418 stations which, in agreement with local authorities and associations, were dedicated to activities for the enhancement of the territory or the activation of services to favor of citizenship. Overall, 177,779 m2 of spaces were used for social purposes. Finally, currently, approximately 465 km of disused lines have been transformed into tourist lines, cycle paths and greenways.

Group employees went from 83,764 to 81,409 mainly due to changes in the corporate perimeter.

Despite the effects of the Coronavirus, the FS Italiane Group maintains a high level of capital and financial solidity, with own means that at the end of 2020 exceeded 41.4 billion euros. The Net Financial Position (NFP), which stands at € 8.9 billion, varies by just over € 1.2 billion compared to 31 December 2019, with a NFP / Equity ratio of 0.2. The ratings of the rating agencies (“BBB” from Standard & Poor's and “BBB-” from Fitch) also fully acknowledge the Group's equity and financial reliability.

Finally, we want to underline how the COVID-19 emergency has undoubtedly represented, and still represents, an unprecedented discontinuity at national, European and global level, with disruptive impacts also on the transport sector, which will therefore structurally change the value system and travel habits. In this context, the history of the FS Group constitutes a solid basis on which to leverage to re-direct its prospective evolution, so that it can respond with resilience to change, contributing to an increasingly sustainable and safe collective mobility and to the creation of economic, social and environmental value.

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Wed, 31 Mar 2021 17:25:27 +0000.