SNCF: Geodis and Rail Logistics Europe buffeted by macroeconomic headwinds

SNCF Group

French state owned railway operator SNCF reported a 0.8% y-o-y growth in revenue to €41,760m with a 2.7% EBITDA fall to €6,435m. Its logistics arm Geodis and rail freight arm Rail Logistics Europe both saw drops in revenue and profits. 


Geodis saw a 15% y-o-y drop in revenues to €11,640m and a 4.0% y-o-y fall in EBITDA to €1,117m. According to its parent company, the international logistics arm of SNCF saw falls in volumes in road freight, sea freight and air freight.

For road freight Geodis was faced by weak demand and overcapacity that impacted margins.

Sea freight has a problem of global overcapacity where new ships coming into service are only partially offset by retirements of older vessels.

In aviation freight, sector capacity is returning to 2019 levels even with demand not matching that. This is putting pressure on air cargo rates and squeezing margins, a problem faced across the global freight forwarding industry.

 Perhaps helping Geodis into the future was the finalization of its acquisition of temperature controlled pharma logistics company, trans-o-flex Germany in 2023. At the time, Marie-Christine Lombard, Chief Executive Officer of GEODIS, said: The acquisition of trans-o-flex, the largest temperature-controlled distribution network in Germany specializing in healthcare, accelerates our growth in a key market for GEODIS. We want to enable trans-o-flex to consolidate its market position in Germany and expand it in the largest European countries. It forms part of our ambition to develop our global end-to-end logistics solutions in support of our customersgrowth and geographical expansion.”

Rail Freight Europe

The rail freight arm of SNCF saw EBITDA fall 38.5% y-o-y to €128m and revenues down 0.5% to €1,712m. The company’s subsidiaries were all exposed to the railway workers’ strikes across France in 2023, that impacted much of the rest of the parent company.

As well as the pension reform related strikes that beset SNCF as a whole, Rail Freight Europe was also hit by the slowdown in rail freight volumes across the economic bloc and indirectly, by the war in Ukraine.

Looking forward…

SNCF doesn’t expect a big turnaround for these two subsidiaries in 2024, with Geodis projecting further falls in volumes and Rail Freight Europe the same.

Much of SNCF’s business is in passenger trains, which are set to benefit considerably from the Paris Olympics in 2024. These business lines, if not beset by further industrial action, will see a boost in revenues and profits, even as its logistics operations continue in their less than perfect macro environments.

Author: Richard Shrubb

Source: Ti Insights

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