ALSTOM SA: Alstom’s orders and sales for the first nine months of
2019/20
Alstom’s orders and sales for the first
nine months of 2019/20
- Order intake of €8.2 billion
- Record backlog of €43 billion
- Sales reaching €6.2 billion, up 3% (+2% organic)
- Alstom in Motion outlook confirmed
16 January 2020 – Over the
third quarter 2019/20 (from 1 October to 31 December 2019), Alstom
booked €3.6 billion of orders, compared to €3.4 billion over the
same period last fiscal year. The Group’s sales increased at €2.1
billion compared to €2.0 billion over the third quarter 2018/19.For
the first nine months of 2019/20 (from 1 April to 31 December
2019), Alstom’s order intake reached €8.2 billion. The Group’s
sales reached €6.2 billion, up 3% (2% organically) compared to the
first nine months of 2018/19.
The backlog, on 31 December 2019, reaches a new
historic record of €43 billion and provides strong visibility on
future sales.
Key figures
Actual
figures |
2018/19 |
|
2019/20 |
|
2018/19 |
2019/20 |
Var. % |
Var. % |
|
(in € million) |
Q1 |
Q2 |
Q3 |
Q4 |
|
Q1 |
Q2 |
Q3 |
|
9 months |
9 months |
Actual |
Organic |
Orders received |
2,641 |
4,488 |
3,386 |
1,592 |
|
1,620 |
2,998 |
3,563 |
|
10,515 |
8,181 |
(22%) |
(23%) |
Sales |
2,017 |
1,993 |
2,010 |
2,052 |
|
2,054 |
2,086 |
2,060 |
|
6,020 |
6,200 |
3% |
2% |
Geographic and product breakdowns of reported orders and sales
are provided in Appendix 1. All figures mentioned in this release
are unaudited.
“Alstom’s order intake was particularly dynamic
this quarter, benefiting from a strong momentum in Europe and Asia
Pacific with a major contract for Perth’s rail network, as well as
significant orders in Signalling and Services in line with our
Alstom in Motion (AiM) strategy. The Group is also proud to have
contributed to the start of commercial services of emblematic
transport systems, such as the Leman express between Switzerland
and France and Sydney Light Rail.The rail market is clearly
undergoing a very positive momentum, in particular driven by
growing environmental concerns. We are fully committed to
contribute to the shift to a decarbonated future thanks to our
portfolio of sustainable mobility solutions.” said Henri
Poupart-Lafarge, Alstom Chairman and Chief Executive Officer.
***
Detailed review
During the third quarter of 2019/20 (from 1
October to 31 December 2019), Alstom recorded €3,563 million
of orders, versus €3,386 million in Q3 2018/2019. Europe accounts
for the majority of the orders of the Group with notably a €755
million contract to refurbish and maintain Avanti West Coast
Pendolinos in the United Kingdom and the renewal and automation of
Marseille metro. It also includes 44 new generation metro trains
for Île-de-France Mobilités and RATP in consortium with Bombardier
within a major frame contract for a total of up to 410 trains.
Alstom also achieved a strong order intake in Asia Pacific at
€1,276 million with a combined €800 million contract for rolling
stock and maintenance for Perth’s rail network in Australia, as
well as driverless trains and digital signalling system for Sydney
Metro extension.Orders in Signalling and Services were particularly
positive with respectively €593 million and €1,266 million
booked during the quarter.
Regarding sales, €2,060 million were traded in
the third quarter 2019/20 (from 1 October to 31 December 2019)
versus €2,010 in Q3 2018/19. Compared to the first nine months of
2018/19, Rolling Stock sales grew by 11% organic with the
acceleration of major projects this quarter. Services show a slight
decrease at 2% organic. Systems show a foreseen decline, by 22%
organic, due notably to a fully traded contract for Panama Metro
and contracts nearing completion in Middle-East. Signalling sales
increased strongly by 16% organic, in coherence with our AiM
strategy, with contracts executed mainly in Americas, Asia Pacific
and Europe.
***Main events of the
third quarter 2019/20
In October 2019 Alstom has successfully carried
out the issuance of senior unsecured Eurobonds for a total of €700
million, at excellent financing conditions. The bonds have a
seven-year maturity and a fixed coupon of 0.25%, payable annually.
The order book was more than three times oversubscribed.
In December 2019, Sydney Light Rail commenced
revenue service and will contribute to transform the appeal of the
city of Sydney. Alstom, as part of the ALTRAC Light Rail
consortium, has been responsible for the integrated light rail
system. The tram system integrates innovative power solutions, with
a wire-free APS ground-based power supply and Hesop energy recovery
substations.
French-Swiss Leman Express rail network started
service with 17 Coradia Polyvalent and on-board digital solutions
implemented by Alstom on 23 other trains, allowing cross-border
operations. The Coradia Polyvalent Léman Express trains will
contribute to providing a sustainable alternative to the car for
the daily commutes of Greater Geneva’s residents, as well as a
better service to the economic and tourist hubs of the entire
region. The Leman Express is Europe's largest cross-border rail
network (45 stations, 230 km).
In the frame of Denmark’s countrywide signalling
system replacement programme, Alstom is a first to supply full
ERTMS1 Level 2 on a Denmark corridor, the line to Roskilde to Köge,
which opened for commercial service in December. The system is
fully digital and combines both ERTMS trackside and on-board
signalling, while being fully integrated with the Traffic
Management System. This technology (“baseline 3”) represents the
latest level of the standard, allowing to further increase traffic
throughput. Alstom is the first player worldwide to offer this
integrated system2.
In line with the AiM strategy to be the leading
global innovative player for a sustainable and smart mobility,
Alstom committed during COP 25 to the “Science-Based Targets”
initiative, a framework providing pathways to set ambitious
greenhouse gas reduction targets. This will enable us to be fully
consistent with the objectives stated by the Paris agreement to
keep global temperature rise below 2 degrees Celsius. Alstom
is the first train manufacturer to commit to set such a target.
***
Outlook
The Alstom outlook is provided at constant
perimeter and exchange rates. It is set in accordance with the IFRS
15 and 16 norms.
The 2019/20 fiscal year will be a year of
stabilisation of growth after a 2018/19 fiscal year with an
exceptional sales and profitability growth. For 2019/20 fiscal
year, the business cycle with the finalisation of major systems
contracts and the evolution of large Rolling stock projects will
lead to a sales and margin growth lower than the average objectives
set in the context of AiM, and to a working capital evolution
impacting the generation of free cash flow3.
Up to March 2023, Alstom targets an average
annual growth rate of sales around 5% over the period 2019/20 –
2022/23, an adjusted EBIT margin4 to reach around 9% in 2022/23, a
conversion from net income5 to free cash flow above 80% by 2022/233
and a dividend policy with a pay-out ratio between 25% and 35%.
Furthermore, Alstom will conduct a disciplined
investment and external growth transactions policy to support its
development and to create value.
|
About Alstom |
|
|
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 €8.1 billion and booked orders
of €12.1 billion in the 2018/19 fiscal year.Headquartered in
France, Alstom is present in over 60 countries and employs 36,300
people. |
|
|
|
Contacts |
Press:Coralie COLLET - Tel.: +33 (1) 57 06 18
81coralie.collet@alstomgroup.com Samuel MILLER - Tel.: +33
(1) 57 06 67 74Samuel.miller@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.
APPENDIX 1A – GEOGRAPHIC
BREAKDOWN
Actual figures |
2018/2019 |
% |
2019/2020 |
% |
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
Europe |
6,235 |
59% |
6,092 |
74% |
Americas |
1,937 |
19% |
504 |
6% |
Asia / Pacific |
1,168 |
11% |
1,531 |
19% |
Middle East / Africa |
1,175 |
11% |
54 |
1% |
Orders by destination |
10,515 |
100% |
8,181 |
100% |
Actual figures |
2018/2019 |
% |
2019/2020 |
% |
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
Europe |
3,005 |
50% |
3,500 |
56% |
Americas |
1,101 |
18% |
1,015 |
16% |
Asia / Pacific |
662 |
11% |
655 |
11% |
Middle East / Africa |
1,252 |
21% |
1,030 |
17% |
Sales by destination |
6,020 |
100% |
6,200 |
100% |
APPENDIX 1B – PRODUCT BREAKDOWN
Actual figures |
2018/2019 |
% |
2019/2020 |
% |
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
Rolling stock |
5,456 |
52% |
4,099 |
50% |
Services |
2,868 |
27% |
2,719 |
33% |
Systems |
1,262 |
12% |
91 |
1% |
Signalling |
929 |
9% |
1,272 |
16% |
Orders by destination |
10,515 |
100% |
8,181 |
100% |
Actual figures |
2018/2019 |
% |
2019/2020 |
% |
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
Rolling stock |
2,608 |
43% |
2,897 |
47% |
Services |
1,122 |
19% |
1,109 |
18% |
Systems |
1,338 |
22% |
1,078 |
17% |
Signalling |
952 |
16% |
1,116 |
18% |
Sales by destination |
6,020 |
100% |
6,200 |
100% |
APPENDIX 2 - NON-GAAP FINANCIAL
INDICATORS DEFINITIONS
This section presents financial indicators used
by the Group that are not defined by accounting standard
setters.
Orders received
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 through the use of 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 on 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.
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.
Going forward (1st application for Half Year
2019/2020 publication), Alstom has opted for the inclusion of the
share in net income of the equity-accounted investments into the
aEBIT when these are considered as 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 the 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 the 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.
Pay-out ratio
The pay-out ratio is calculated by dividing the
amount of the overall dividend with the "Net profit from continuing
operations attributable to equity holders of the parent” as
presented in the consolidated income statement
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.
|
9 months 31 Dec. 2018 |
|
9 months 31 Dec. 2019 |
|
|
|
(in €
million) |
Actual figures |
Exchange rate |
Scope impact |
Comparable Figures |
|
Actual figures |
Exchange rate |
Scope impact |
Comparable Figures |
|
% Var
Act. |
% Var
Org. |
Orders |
10,515 |
112 |
- |
10,627 |
|
8,181 |
- |
- |
8,181 |
|
(22)% |
(23)% |
Sales |
6,020 |
72 |
- |
6,092 |
|
6,200 |
- |
- |
6,200 |
|
3% |
2% |
1 European Railway Traffic Management System2 A
full system (combining Onboard, Wayside, Traffic Management System)
in Baseline 33 The free cash flow generation is subject to
usual short-term volatility linked to customers down payments and
milestone payments from customers4 Including the share of net
income of the joint venture with CASCO held by Alstom at 49%5 Net
profit from continuing operations attributable to equity holders of
the parent
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