ALSTOM SA: Alstom discloses preliminary financial information for
its first half of fiscal year 2023/24, ending September 30, 2023
Alstom discloses preliminary financial
information for its first half of fiscal
year 2023/24, ending September
30, 2023
- Book-to-bill at 1.0. FY
2023/24 outlook above 1.0 confirmed
- Strong sales organic growth
at 6.5%. FY 2023/24 outlook above 5% confirmed
- Improved profitability at
5.2%. FY 2023/24 outlook around 6% confirmed
- Production ramp-up
acceleration, a Rolling Stock program delay in the UK and order
intake delays result in €(1,150) million Free Cash Flow for H1
2023/24
- FY 2023/24 Free Cash Flow
now expected to be in a range of €(500) to €(750) million –
previously announced as “significantly positive”
- Mid-term guidance
confirmed
4 October 2023 – The Board of
Directors of Alstom has met on October 3rd and 4th, 2023 and has
reviewed the preliminary unaudited financial results for the first
half of fiscal year 2023/24 and approved the following press
release.
Key figures
(in € billion) |
Half-year ended 30 September
2023 |
Orders received1 |
8.4 |
Sales |
8.3 |
Book to bill ratio1 |
1x |
Adjusted EBIT margin1 |
5.2% |
Free Cash Flow1 |
(1.15) |
Liquidity1 |
3.5 |
The preliminary figures published in this press
release are unaudited.
“Supported by a positive market momentum, Alstom
is accelerating on its organic growth trajectory. We are engaged in
a steep ramp-up, in particular in the rolling stock activity. This,
combined with legacy projects being finalized at the same time, is
weighing on the free cash flow in this first half. The management
team is strongly engaged on the operational excellence and cash
focus plans. We remain committed to mid-term profitability and cash
generation targets.” said Henri Poupart-Lafarge,
Alstom Chairman and Chief Executive Officer.
***
First half 2023/24 review and revised FY
2023/24 outlook
During the first half of fiscal 2023/24, Alstom
recorded €8.4 billion in orders compared to €10.1 billion over the
same period last fiscal year. Last year performance was notably
driven by a landmark project in Germany (Baden-Württemberg) for
€2.5 billion.
Order intake in the second quarter of fiscal
year 2023/24 stands at €4.5 billion, including notably 40 Coradia
Stream high-capacity trains for Germany with a 30-year maintenance
contract for €900 million, locomotives for Railpool and Akiem for
more than €400 million, and coaches in the US for about €300
million.
The book-to-bill ratio is 1.0 for the first half
of this fiscal year, a slight improvement compared to the first
quarter.
Market momentum is confirmed and as announced,
Alstom expects order intake to be stronger in the second half of
the year, notably thanks to deals won but not yet booked and some
orders shifting from the first to the second half of fiscal year
2023/24.
We confirm our guidance of book-to-bill
above 1 for FY 2023/24
Alstom recorded €8.3 billion sales in the first
half of this fiscal year, compared to €8.0 billion over the same
period last fiscal year. This represents 6.5% organic sales growth
and 2.7% on a reported basis, supported by the ramp-up in Rolling
stock, a strong performance in Services and Signalling and the
expected catch-up on Systems. Sales at zero gross margin reached
approximately €1.0 billion sales during the first half and the
target of €1.7 billion for this fiscal year is confirmed.
We confirm our guidance of organic sales growth above 5%
for FY 2023/24
The adjusted EBIT margin stands at 5.2% for the
first half of this fiscal year, compared to 4.9% in the same period
last fiscal year, in line with the trajectory. Profitability was
positively impacted by continuous progress on accelerating
production as well as delivering against planned synergies.
However, the Aventra2 program in the UK, one of
the legacy non-performing contracts, has not been completed as per
original plans during this first half and is now expected to be
completed beginning of fiscal year 2024/25. The negative impact has
been recognized on first half adjusted EBIT.
We confirm our guidance of aEBIT margin around 6% for FY
2023/24
Free Cash Flow stands at €(1,150) million for
the first half of this fiscal year, compared to €(45) million in
the same period last fiscal year.In addition to the usual
seasonality, Free Cash Flow for the first half of this fiscal year
has been impacted by the following main factors, which explain the
year-on-year variation:
- First,
representing about half of the variation, the strong growth of
Alstom backlog (now over €87 billion) during the last two years has
resulted in a steep acceleration of the production ramp-up,
exceeding 10% per year in average volume increase for our Rolling
Stock activity. This, combined with tight supply chain conditions,
resulted in a significant increase in the level of inventories and
contract assets built in order to avoid production disruption and
delivery delays during the first half of the year, particularly in
Americas and in Europe. Improvements are expected during the second
half of fiscal 2023/24, and full reversal in the coming years.
- Second,
representing around one third of the variation, is the delay in
completing the Aventra program in the UK, which has impacted first
half cash-flow, and this will be only partly recovered in the
second half, as completion is now expected beginning of fiscal year
2024/25.
- Third is the
decrease in the level of downpayments compared to the same period
last year due to weaker than expected orders booked in the first
half of the fiscal year. Alstom expects the level of downpayments
in the second half of this fiscal year to be higher than in the
same period last year, thanks to strong order intake.
FY 2023/24 Free Cash Flow now expected
to be in a range of €(500) to €(750) million, compared to
“significantly positive” as announced previously. Free Cash Flow in
the second half of fiscal 2023/24 will be significantly positive
thanks to the reversal of some of the headwinds of the first half
and new actions initiated in the context of a new Cash Focus
Program launched by Alstom.
***
Mid-term guidance confirmed
Alstom confirms its mid-term guidance as stated
in May 2023. The above-mentioned impacts have no material
consequences on the mid-term trajectory of the Group.
***
Conference call
Alstom will host virtually an analyst and
investor call on Wednesday 4 October 2023 at 6:30 pm (CET), hosted
by Bernard Delpit, CFO.
A live audiocast will also be available on
Alstom’s website: Alstom’s preliminary results for H1 2023/24
(royalcast.com).
To participate in the Q&A session (audio
only), please use the dial-in numbers below:
-
UK +44 (0) 33 0551 0200
-
USA +1 786 697 3501
- France +33 (0) 1
7037 7166
Quote ALSTOM to the operator to
be transferred to the appropriate conference.
1 See definition in appendix2 Aventra designates
a range of commuter trains designed and sold through 6 rolling
stock contracts to 5 different customers, originally signed by
Bombardier and executed in the United Kingdom. This program
represents a total of 443 trains.
Alstom™, Coradia™ and Coradia Stream™ are protected trademarks
of the Alstom Group.
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About Alstom |
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Alstom commits to contribute to a low carbon future by developing
and promoting innovative and sustainable transportation solutions
that people enjoy riding. From high-speed trains, metros,
monorails, trams, to turnkey systems, services, infrastructure,
signalling and digital mobility, Alstom offers its diverse
customers the broadest portfolio in the industry. With its presence
in 63 countries and a talent base of over 80,000 people from 175
nationalities, the company focusses its design, innovation, and
project management skills to where mobility solutions are needed
most. Listed in France, Alstom generated revenues of €16.5 billion
for the fiscal year ending on 31 March 2023. For more information,
please visit www.alstom.com |
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Contacts |
Press:Coralie COLLET - Tel.: +33 (0) 7 63 63 09 62
coralie.collet@alstomgroup.com Thomas ANTOINE - Tel. :
+33 (0) 6 11 47 28 60thomas.antoine@alstomgroup.com
Investor relations:Martin VAUJOUR – Tel. : +33 (0)
6 88 40 17 57martin.vaujour@alstomgroup.com Estelle MATURELL
ANDINO – Tel.: +33 (0)6 71 37 47 56
estelle.maturell@alstomgroup.com |
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This press release contains forward-looking
statements which are based on current plans and forecasts of
Alstom’s management. Such forward-looking statements are relevant
to the current scope of activity and are by their nature subject to
a number of important risks and uncertainty factors (such as those
described in the documents filed by Alstom with the French AMF)
that could cause actual results to differ from the plans,
objectives and expectations expressed in such forward-looking
statements. These such forward-looking statements speak only as of
the date on which they are made, and Alstom undertakes no
obligation to update or revise any of them, whether as a result of
new information, future events or otherwise.
This press release does not constitute or form
part of a prospectus or any offer or invitation for the sale or
issue of, or any offer or inducement to purchase or subscribe for,
or any solicitation of any offer to purchase or subscribe for any
shares or other securities in the Company in France, the United
Kingdom, the United States or any other jurisdiction. Any offer of
the Company’s securities may only be made in France pursuant to a
prospectus having received the visa from the AMF or, outside
France, pursuant to an offering document prepared for such purpose.
The information does not constitute any form of commitment on the
part of the Company or any other person. Neither the information
nor any other written or oral information made available to any
recipient, or its advisers will form the basis of any contract or
commitment whatsoever. In particular, in furnishing the
information, the Company, the Banks, their affiliates,
shareholders, and their respective directors, officers, advisers,
employees or representatives undertake no obligation to provide the
recipient with access to any additional information.
APPENDIX - NON-GAAP FINANCIAL
INDICATORS DEFINITIONS
This section presents financial indicators used
by the Group that are not defined by accounting standard
setters.
Orders receivedA
new order is recognised as an order received only when the contract
creates enforceable obligations between the Group and its customer.
When this condition is met, the order is recognised at the contract
value. If the contract is denominated in a currency other than the
functional currency of the reporting unit, the Group requires the
immediate elimination of currency exposure using forward currency
sales. Orders are then measured using the spot rate at inception of
hedging instruments.
Book-to-Bill The book-to-bill
ratio is the ratio of orders received to the amount of sales traded
for a specific period.
Adjusted EBITAdjusted EBIT
(“aEBIT”) is the Key Performance Indicator to present the level of
recurring operational performance. This indicator is also aligned
with market practice and comparable to direct competitors. Starting
September 2019, Alstom has opted for the inclusion of the share in
net income of the equity-accounted investments into the aEBIT when
these are considered to be part of the operating activities of the
Group (because there are significant operational flows and/or
common project execution with these entities). This mainly includes
Chinese joint-ventures, namely CASCO, Alstom Sifang (Qingdao)
Transportation Ltd, Jiangsu ALSTOM NUG Propulsion System Co. Ltd.
(former Bombardier NUG Propulsion) and Changchun Changke Alstom
Railway Vehicles Company Ltd.
aEBIT corresponds to Earning Before Interests
and Tax adjusted for the following elements:
- net
restructuring expenses (including rationalisation costs).
- tangibles and
intangibles impairment.
- capital gains or
loss/revaluation on investments disposals or controls changes of an
entity.
- any other
non-recurring items, such as some costs incurred to realise
business combinations and amortisation of an asset exclusively
valued in the context of business combination, as well as
litigation costs that have arisen outside the ordinary course of
business.
- and including
the share in net income of the operational equity-accounted
investments.
A non-recurring item is a “one-off” exceptional
item that is not supposed to occur again in following years and
that is significant.Adjusted EBIT margin corresponds to Adjusted
EBIT expressed as a percentage of sales.
Free cash flow Free Cash Flow
is defined as net cash provided by operating activities less capital
expenditures including capitalised development costs, net of
proceeds from disposals of tangible and intangible assets. Free
Cash Flow does not include any proceeds from disposals of
activity.The most directly comparable financial measure to Free
Cash Flow calculated and presented in accordance with IFRS is net
cash provided by operating activities.
LiquidityLiquidity is defined as
the sum of cash and cash equivalents and undrawn Revolving Credit
facilities, less the outstanding level of Negotiable European
Commercial Papers and overdraft at the end of the period.
- PR Alstom H1 Preliminary Results 04.10.23 - EN - Final
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