ALSTOM SA: Alstom Q1 2020/21 Orders and Sales
Alstom Q1 2020/21 Orders and
Sales
- Sales at €1.5 billion, impacted by Covid-19 containment
measures
- Sustained level of order intake at €1.7 billion, despite
crisis
- Industry-leading backlog at €41.2 billion
- Rail resilience supported by recent announcements in favour of
sustainable mobility
16 July 2020 – Over the first
quarter of the 2020/21 fiscal year (from 1 April to 30 June 2020),
Alstom booked €1.7 billion of orders, compared to €1.6 billion over
the same period last year. The Group’s sales decreased to €1.5
billion, down 27% (-25% on an organic basis) compared to €2.1
billion over the first quarter of 2019/20. Book-to-bill ratio stood
at 1.1.
At €41.2 billion on 30 June 2020, the current
backlog provides a strong indication of future sales.
Key figures
Actual figures(in € million) |
2019/20Q1 |
2020/21Q1 |
% changereported |
% changeorganic |
Orders
received |
1,620 |
1,651 |
2% |
2% |
|
Sales |
2,054 |
1,507 |
(27%) |
(25%) |
|
Geographic and product breakdowns of reported orders and sales
are provided in Appendix 1. All figures mentioned in this release
are unaudited.
“During the first quarter, the Group’s level of
sales was impacted by the consequences of the Covid-19 containment
measures: while we achieved a very good continuity of our
engineering activity through remote working, lockdowns impacted our
sites and supply chain. Yet, the Group’s commercial activity
remained stable despite the crisis. Announcements of governments
worldwide in support of rail show that the train is more than ever
recognized as a way to support the transition towards more
sustainable mobility.” said Henri Poupart-Lafarge, Alstom’s
Chairman and Chief Executive Officer.
***
Detailed review
During the first quarter of 2020/21, Alstom
recorded €1,651 million of orders which compares to €1,620 million
for the first quarter of 2019/20. This sustained order intake,
despite the crisis, was mainly fueled by a large Rolling stock and
Services order in AMECA and a metro system order in Taipei, Taiwan.
The Group was also awarded various Services contracts for instance
in Mexico, China, the United States and Greece. Signalling
contracts were also booked in Europe and the United
States.
The book-to-bill ratio stood at 1.1.
Sales, at €1,507 million, were down 27% (-25% on
an organic basis) in the first quarter of 2020/21, compared to the
same period last year. This decrease is mainly caused by the impact
of the Covid-19 crisis, in particular on Rolling Stock due to the
slowdown of sales recognition during the containment period, to a
lesser extent on Services due to train traffic reduction and
Signalling due to a slowdown in installation. Additionally, as
anticipated for fiscal year 2020/21, Systems sales decreased with
contracts nearing completion in Dubaï, Riyadh and a fully traded
contract in Panama.
As of July 16, Alstom’s operations are close to
a normalized level. Supply chain is resuming in line with
manufacturing operations.
***
Main events
On June 30, Alstom took a new step forward in
the implementation of its AiM strategic plan in France with the
acquisition of Ibre, a company specialised in the development,
manufacture and supply of cast iron or steel brake discs. With this
acquisition, Alstom will reinforce its internal capabilities
regarding railway braking systems, which are essential to the
overall dynamic performance of trains. Ibre employs around 30
people at its Sens site in the region of Bourgogne Franche-Comté
and had a turnover of approximately €10 million in 2019.
The German Federal Ministry of Economics has
presented Alstom with the "Innovation Prize for Regulatory
Sandboxes", related to a planned test project to implement
Automatic Train Operation (ATO) in daily passenger operation of
regional trains. The project will begin in 2021. For this project,
two trains based on Alstom’s successful Coradia Continental
platform will be equipped with a European Train Control System
(ETCS) and additional ATO equipment.
In May 2020, the first of the 12,000-horsepower
Prima T8 electric locomotives was put into commercial service by
Indian Railways. In line with
the Make-in-India mandate, all 800 of the Prima
locomotives are being manufactured locally.
Despite Covid-19, the two first Avelia Liberty
prototypes started their testing programme at the Transport
Technology Center in Pueblo, Colorado and along the North-East
Corridor. In a context of travel restrictions and despite being
over 8,000 km away, Alstom experts in Le Creusot (France) were able
to participate in the tests. Sensors were capturing and
transmitting test results to Le Creusot in real-time, allowing the
team to analyse the test results.
Combined shareholder meeting on July 8,
2020
Alstom’s Combined Shareholders’ Meeting, took place behind
closed doors, and broadcasted online, on July 8, 2020. The
Shareholders’ Meeting approved all of the proposed resolutions.
***
Bombardier Transportation acquisition
process update
Alstom announced on February 17, 2020 that it
had signed a Memorandum of Understanding with Bombardier Inc. and
Caisse de dépôt et placement du Québec (“CDPQ”) in view of the
acquisition of Bombardier Transportation.
Following the notification of the transaction to
the European Commission on June 11, 2020, Alstom has taken a
further step towards closing of its planned acquisition of
Bombardier Transportation. On July 9, Alstom submitted commitments
to respond to the Commission’s potential concerns.
Closing of the acquisition of Bombardier
Transportation remains on track for the first half of 2021.
***Confirmation of the
outlook provided on 12th May 2020
In 2019/20, Alstom fully deployed its Alstom in
Motion (AiM) strategic plan in order to progressively deliver
revenues and margin growth in line with the objectives set in the
context of AiM for 2022/23.
The Covid-19 crisis is likely to affect
negatively the financial performance of the 2020/21 fiscal year,
including order intake, net income, free cash flow and sales,
though it is not possible today to assess precisely its impact.
After the current crisis, the Group expects a fast recovery of the
rail market, sustained by strong fundamentals and increasing demand
for sustainable mobility.
In this context, the objective of a 5% average
annual growth rate over the period from 2019/20 to
2022/23 should be slightly impacted by the temporary slowdown of
tender activity, yet the 2022/23 objectives of 9% aEBIT
margin and of a conversion from net income to free cash flow above
80% are confirmed1.
With a strong liquidity position, a demonstrated
ability to deliver execution and profitability and the rapid launch
of a cost and cash mitigation plan the Group is confident in its
capacity to weather the crisis as well as to capture opportunities
in a resilient rail market and contribute to the transition
towards sustainable transport systems.
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About Alstom |
|
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Leading the way to greener and smarter mobility worldwide, Alstom
develops and markets integrated systems that provide the
sustainable foundations for the future of transportation. Alstom
offers a complete range of equipment and services, from high-speed
trains, metros, trams and e-buses to integrated systems, customised
services, infrastructure, signalling and digital mobility
solutions. Alstom recorded sales of €8.2 billion and booked orders
of €9.9 billion in the 2019/20 fiscal year. Headquartered in
France, Alstom is present in over 60 countries and employs 38,900
people. |
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Contacts |
Press:Samuel MILLER - Tel.: +33 (1) 57 06 67
74samuel.miller@alstomgroup.com Coralie COLLET - Tel.: +33 1
57 06 18 81coralie.collet@alstomgroup.com Investor
relations:Julie MOREL - Tel.: +33 (6) 67 61 88
58julie.morel@alstomgroup.com Claire LEPELLETIER - Tel.: +33
(6) 76 64 33 06claire.lepelletier@alstomgroup.com |
|
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 1A – GEOGRAPHIC BREAKDOWN
OF ORDERS AND SALES
Actual figures |
Q1 2019/20 |
% |
Q1 2020/21 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Europe |
1,331 |
83% |
239 |
14% |
Americas |
100 |
6% |
165 |
10% |
Asia / Pacific |
165 |
10% |
345 |
21% |
Africa / Middle East / Central Asia |
24 |
1% |
902 |
55% |
Orders by destination |
1,620 |
100% |
1,651 |
100% |
Actual figures |
Q1 2019/20 |
% |
Q1 2020/21 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Europe |
1,154 |
55% |
844 |
56% |
Americas |
298 |
15% |
262 |
17% |
Asia / Pacific |
238 |
12% |
202 |
14% |
Africa / Middle East / Central Asia |
364 |
18% |
199 |
13% |
Sales by destination |
2,054 |
100% |
1,507 |
100% |
APPENDIX 1B – PRODUCT BREAKDOWN OF ORDERS AND
SALES
Actual figures |
Q1 2019/20 |
% |
Q1 2020/21 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Rolling stock |
984 |
61% |
553 |
34% |
Services |
324 |
20% |
668 |
40% |
Systems |
33 |
2% |
265 |
16% |
Signalling |
279 |
17% |
165 |
10% |
Orders by destination |
1,620 |
100% |
1,651 |
100% |
Actual figures |
Q1 2019/20 |
% |
Q1 2020/21 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Rolling stock |
967 |
47% |
718 |
48% |
Services |
358 |
18% |
283 |
19% |
Systems |
375 |
18% |
182 |
12% |
Signalling |
354 |
17% |
324 |
21% |
Sales by destination |
2,054 |
100% |
1,507 |
100% |
APPENDIX 2 - NON-GAAP FINANCIAL
INDICATORS DEFINITIONSThis section presents financial
indicators used by the Group that are not defined by accounting
standard setters.
Orders
A 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.
Order backlog
Order backlog represents sales not yet
recognised from orders already received. Order backlog at the end
of a financial year is computed as follows:
- order backlog at the beginning of the year;
- plus new orders received during the year;
- less cancellations of orders recorded during the year;
- less sales recognised during the year.
The order backlog is also subject to changes in
the scope of consolidation, contract price adjustments and foreign
currency translation effects.Order backlog corresponds to the
transaction price allocated to the remaining performance
obligations, as per IFRS 15 quantitative and qualitative
disclosures requirement.
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 EBIT
When Alstom’s new organisation was implemented
in 2015, adjusted EBIT (“aEBIT”) became 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 in 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), namely the CASCO Joint Venture. The company
believes that bringing visibility over a key contributor to the
Alstom signalling strategy will provide a fairer and more accurate
picture of the overall commercial & operational performance of
the Group. This change will also enable more comparability with
what similar market players define as being part of their main
non-GAAP ‘profit’ aggregate disclosure.
aEBIT corresponds to Earning Before Interests
and Tax adjusted for the following elements:
- net restructuring expenses (including rationalization
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
realize 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 in 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. In particular, 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.
Alstom uses free cash flow both for internal
analysis purposes as well as for external communication as the
Group believes it provides accurate insight regarding the actual
amount of cash generated or used by operations.
Net cash/(debt)
The net cash/(debt) is defined as cash and cash
equivalents, other current financial assets and non-current
financial assets directly associated to liabilities included in
financial debt, less financial debt.
Organic basis
Figures given on an organic basis eliminate the
impact of changes in scope of consolidation and changes resulting
from the translation of the accounts into Euro following the
variation of foreign currencies against the Euro. The Group uses
figures prepared on an organic basis both for internal analysis and
for external communication, as it believes they provide means to
analyse and explain variations from one period to another. However,
these figures are not measurements of performance under IFRS.
|
Q1 2019/20 |
|
|
Q1 2020/21 |
|
(in €
million) |
Actual figures |
Exchange rate |
Comparable Figures |
|
Actual figures |
|
% Var Act. |
% Var
Org. |
Orders |
1,620 |
(3) |
1,617 |
|
1,651 |
|
2% |
2% |
Sales |
2,054 |
(37) |
2,017 |
|
1,507 |
|
(27)% |
(25)% |
1 AiM targets set on an Alstom standalone
basis
- 2020-07-16 PR Q1 2020-21_UK
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