ALSTOM SA: Alstom’s third quarter 2023/24: good commercial momentum
and Free Cash Flow guidance reaffirmed for FY 2023/24
Alstom’s third quarter 2023/24: good commercial momentum
and Free Cash Flow guidance reaffirmed for FY 2023/24
- Q3: strong orders of €5.5
billion, sales at €4.3 billion, book-to-bill at 1.3
- 9-months: orders at €13.9
billion, sales at €12.8 billion, book-to-bill at 1.1
- Full year 2023/24 outlook
and mid-term objectives confirmed
- Executing on the
deleveraging plan
24 January 2024 – Over the
third quarter of 2023/24 (from 1 October to 31 December 2023),
Alstom booked €5.5 billion of orders. The Group’s sales reached
€4.3 billion in the quarter.
For the first nine months of 2023/24 (from 1
April to 31 December 2023), Alstom’s order intake reached €13.9
billion, compared to €15.2 billion for the same period last fiscal
year. The Group sales increased by 4.1% over 9 months, of which
7.3% organic growth, reaching €12.8 billion, in line with the
targeted trajectory.
The backlog, as of 31 December 2023, settled at
€90.3 billion, providing strong visibility on future sales.
Key figures
|
Reported figures(in € million) |
2022/23Q3 |
2023/24Q3 |
% ChangeReported |
% ChangeOrganic |
|
Orders received |
5,152 |
5,451 |
+5.8% |
+6.4% |
|
Sales |
4,223 |
4,332 |
+2.6% |
+4.6% |
|
Reported figures(in € million) |
2022/239 months |
2023/249 months |
% ChangeReported |
% ChangeOrganic |
|
Orders received |
15,224 |
13,898 |
(8.7)% |
(7.0)% |
|
Sales |
12,271 |
12,775 |
+4.1% |
+7.3% |
Geographic and product breakdowns of reported orders and sales
are provided in Appendix 1. All figures mentioned in this release
are unaudited.
“Alstom delivered strong levels of order intake
during the third quarter, on the back of positive market momentum
in Services and Systems. We are relentlessly focused on the
operational action plan to generate cash in the second half of the
year, notably through improved production and working capital
efficiency. Considering the progress made since November, we will
provide the breakdown of each measure of the €2 billion inorganic
plan in May 2024. Confident in the resilience of our business
model, we confirm our short and mid-term targets,” said
Henri POUPART-LAFARGE, Alstom Chairman and Chief
Executive Officer.
***
Detailed review
During the third quarter of 2023/24
(from 1 October to 31 December 2023), Alstom recorded
€5,451 million in orders, compared to €5,152 million over
the same period last fiscal year. Over three months,
orders for Services, Signalling and Systems reached 84% of the
total order intake and 66% over the 9 months. On a regional level,
Europe accounts for 34% of the Group total order intake. In the
United Kingdom, Alstom has signed an eight-year extension to its
Train Services Agreement (TSA) with CrossCountry. With this
contract extension, valued at around €950 million, Alstom will
continue to maintain, overhaul, service and clean CrossCountry’s
Voyager and Super Voyager fleet until 2031.
In France, Alstom has won a twelve-year
framework contract worth almost €300 million to develop and deploy
the NExTEO signalling system on the RER B and RER D lines in the
Île-de-France region. Alstom’s Urbalis signalling technology will
help infrastructure managers and transport operators to improve the
performance and punctuality.
In the Asia-Pacific region, Alstom has been
announced as the successful bidder for a contract worth around €900
million to maintain the regional rolling stock VLocity and Classic
fleets in Victoria, Australia for the next decade.
In Africa-Middle East-Central Asia, the Group
reached financial closure for Israel’s NTA contract of Tel Aviv’s
Green Line light rail systems. With around €900 million share in
the contract, Alstom is set to design, build and maintain the Tel
Aviv Metropolitan LRT Green Line by Metropolitan Mass Transit
System Ltd (NTA).
The level of base orders (less than €200 million
of contract value) has exceeded €2 billion during this third
quarter.
Sales were €4,332 million in Q3 2023/24
compared to €4,223 million in Q3 2022/23.
Over 9 months, sales amounted to €12,775
million, representing a growth of 4.1% on a reported basis and a
strong 7.3% on an organic basis compared with Alstom sales in the
same period last fiscal year.
For the same period, Rolling Stock sales reached
€6,765 million, representing an increase of 1% on a reported basis
and 5% on an organic basis, driven by a ramp-up of projects in
Brazil and in India as well as a solid level of execution in the US
and in France.
Signalling sales stood at €1,911 million for the
9 months, up 8% on a reported basis and 12% on an organic basis,
led by a consistent execution across all regions, mainly in the US,
the UK and Australia.
In Systems, Alstom reported €1,118 million sales
for the 9 months, up 5% on a reported basis and 8% on an organic
basis, on the back of a good performance of Turnkey Systems
projects in Egypt, Canada and France and a ramp-up of projects in
Mexico.
Services delivered a sustained performance and
reported €2,981 million of sales over 9 months, up 7% on a reported
basis and 10% on an organic basis, benefiting from a strong ramp-up
in the UK, in Italy and in the US.
The book-to-bill ratio is 1.3 over the quarter
and 1.1 over 9 months.
***
Main highlights of the third quarter of
2023/24
During the quarter, Alstom reached important
delivery milestones, and launched a range of initiatives to
accelerate its transformation into a more competitive and agile
group.
In October 2023, Alstom reached a milestone for
India’s rail revolution with the inauguration of NaMo Bharat,
India's first semi-high-speed regional rail service, with both
rolling stock and signalling solutions provided by Alstom India.
The first phase, the seventeen-kilometre Duhai-Sahibabad section of
the Delhi-Meerut corridor which is now operational for general
public, also marks the world debut of Level 3 ETCS (European Train
Control System).
In November 2023 in Paris, Ile-de-France
Mobilités, SNCF Voyageurs and Alstom together inaugurated the RER
NG, the “New Generation RER” in the presence of elected
representatives and passengers. The RER NG commuter train, designed
and manufactured with the contribution of 9 Alstom sites in France,
will bring lasting improvements to travel conditions for the
hundreds of thousands of people who use the RER D and RER E lines
every day.
In December 2023, for the first time in France,
a battery-powered train carried passengers on a non-electrified
track in Toulouse, in the Occitanie region. This innovative
tri-mode electric-combustion-battery train was presented at
Toulouse-Matabiau station before departing for Mazamet. The hybrid
train will be tested for a year in commercial service on several
lines in the four partner regions.
Also in December 2023, Tren Maya, a brand-new
rail service for Mexico’s Yucatán Peninsula entered commercial
service. The trains were built by Alstom, at its plant in Ciudad
Sahagún, in Mexico. Alstom is providing the X’trapolis trains for
this project. Alstom is responsible for the maintenance of the
trains for the next five years and continues the work to provide
signalling as well.
-
One Alstom team Agile, Inclusive and
Responsible
For the thirteenth consecutive year, Alstom has
been included in the Dow Jones Sustainability Indices (DJSI), World
and Europe, attesting to its leadership position in sustainable
business practices.
The Company reached an overall score of 70 out
of 100 in the Corporate Sustainability Assessment and remained in
the top of the best scored companies of the industry. Significant
improvement has been recorded this year in areas such as Resource
Efficiency and Circularity, Customer relationship, Environmental
Emissions and Human rights.
Alstom has also ranked among Corporate Knights’
2024 100 Most Sustainable Corporations in the World.
In December 2023, Alstom and Fundación ONCE
renewed their collaboration to continue building accessible and
inclusive mobility by bolstering their commitments for the social
inclusion of people with disabilities. Fundación ONCE has become a
worldwide strategic advisor in terms of inclusiveness and a
strategic partner in research, development and innovation.
***
Progress on Alstom’s action plan to
secure financial targets
During this third quarter, the company has been
mobilizing around the operational, commercial, and cost efficiency
plan:
- Quality of order intake during Q3
2023/24 provides comfort to continue growing the margin in backlog
(+0.5% per year in coming three years)
- After 9 months, Alstom has produced
3,415 cars (compared to 2,998 in 2022/23), continuing to deliver
the production ramp-up
- Strong actions have been launched
to revert the negative trend on inventory days of sales
- Plan to reduce overhead costs has
been announced to employees representatives and is expected to be
finalized (sizing, cost, modalities and timeline) and launched by
the year-end, with the objective to decrease SG&A costs by ca.
1 percentage point of sales by March 2026.
Reinforce Balance sheet to maintain
Investment Grade Rating
Alstom’s Board of Directors is committed to
maintaining a solid and sustainable Investment Grade rating. It has
decided to reinforce the Group’s balance-sheet and is targeting a
reduction in its net debt position by €2 billion by March 2025.
Existing reference shareholders are supportive
of this plan and are working closely with the management to execute
it swiftly.
- Assets disposal processes are
progressing, which allows confirmation of the announced range of
expected proceeds between €0.5 billion and €1.0 billion.
- Equity-like instruments preparation
is also in progress, with advisors mandated and underlying business
selection and structuration well advanced.
- Feasibility and sizing of a
potential capital increase (with pre-emptive rights for
shareholders) is being studied in parallel.
Not taken into account in the €2 billion
deleveraging plan is the exit of TMH Limited, which was closed
early January 2024 for an amount of €75 million, contributing to
the de-risking of the company’s portfolio, and which was accounted
for as asset held for sale as of 30 September 2023. The sale of TMH
Limited will result in a non-cash loss of around €(127) million due
to the recognition of the €(202) million Currency Translation
Adjustment accounted for directly in equity since the
acquisition.
Alstom will precise the breakdown of the €2
billion deleveraging plan latest by full-year results release in
May 2024.
***
Financial trajectory for FY
2023/24
The Group has based its 2023/24 outlook on a
central inflation scenario reflecting a consensus of public
institutions. The Group also assumes its continuous ability to
navigate supply chain disruptions and macroeconomic and
geopolitical challenges as it has done during these first nine
months of fiscal year 2023/24.
- Book to bill ratio above 1
- Sales organic growth above 5%
- Adjusted EBIT Margin around 6%
- Free Cash Flow within the range
€(500)m - €(750)m
As already announced, the Board will propose to
the Shareholders’ General Assembly that no dividend will be paid
with regards to the fiscal year 2023/24.
***
Mid-term financial trajectory and
objectives to be reached in FY 2025/26
- Sales: Between 2020/21 (proforma
sales of €14 billion) – and 2025/26, Alstom is aiming at sales
Compound Annual Growth Rate over 5% supported by strong market
momentum and unparalleled €90.3 billion backlog as of 31 December
2023, securing sales of ca. €38 to €40 billion over the next three
years. Rolling Stock should grow above market rate, Services and
Signalling at high-single digit path.
- Profitability: the adjusted EBIT
margin should reach between 8% and 10% from 2025/26 onwards,
benefiting from operational excellence initiatives, strong margins
on new orders including improved indexation, the completion of the
challenging projects in backlog while synergies are expected to
deliver €400 million run rate in 2024/25 and €475 - €500 million
annually from 2025/26 onwards.
- Free Cash Flow: from 2025/26
onwards, the conversion from adjusted net profit to Free Cash Flow
should be over 80%1 driven by mid-term stability of trade working
capital, stabilisation of CAPEX to around 2% of sales and cash
focus initiatives while benefiting from volume and synergies take
up.
***
Conference Call
Alstom is pleased to invite you to a conference
call presenting its third quarter orders and sales of the fiscal
year 2023/24 on Wednesday 24 January 2024 at 08:30 am (Paris time),
hosted by Bernard Delpit, Alstom CFO. A live audiocast will also be
available on Alstom’s website: Alstom’s orders and sales for the
third quarter of fiscal year 2023/24.
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.
***
Alstom™, VLocity™, Urbalis™ and X’trapolis™ are protected
trademarks of the Alstom Group.NExTEO™ is a protected trademark of
the SNCF Group
1 Subject to short term volatility
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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 Samuel MILLER –
Tel. : +33 (0) 6 65 47 40 14 samuel.miller@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 1A – GEOGRAPHIC
BREAKDOWN
|
Reported figures |
2022/23 |
% |
2023/24 |
% |
|
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
|
Europe |
9,395 |
62% |
8,224 |
59% |
|
Americas |
1,510 |
10% |
1,767 |
13% |
|
Asia / Pacific |
2,104 |
14% |
2,977 |
21% |
|
Middle East / Africa |
2,215 |
14% |
929 |
7% |
|
Orders by destination |
15,224 |
100% |
13,898 |
100% |
|
Reported figures |
2022/23 |
% |
2023/24 |
% |
|
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
|
Europe |
7,343 |
60% |
7,391 |
58% |
|
Americas |
2,074 |
17% |
2,516 |
20% |
|
Asia / Pacific |
1,797 |
15% |
1,782 |
14% |
|
Middle East / Africa |
1,057 |
8% |
1,086 |
8% |
|
Sales by destination |
12,271 |
100% |
12,775 |
100% |
APPENDIX 1B – PRODUCT BREAKDOWN
|
Reported figures |
2022/23 |
% |
2023/24 |
% |
|
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
|
Rolling stock |
7,648 |
50% |
4,666 |
34% |
|
Services |
5,047 |
33% |
4,943 |
36% |
|
Systems |
852 |
6% |
2,419 |
17% |
|
Signalling |
1,677 |
11% |
1,870 |
13% |
|
Orders by product line |
15,224 |
100% |
13,898 |
100% |
|
Reported figures |
2022/23 |
% |
2023/24 |
% |
|
(in € million) |
9 months |
Contrib. |
9 months |
Contrib. |
|
Rolling stock |
6,667 |
54% |
6,765 |
53% |
|
Services |
2,775 |
23% |
2,981 |
23% |
|
Systems |
1,062 |
9% |
1,118 |
9% |
|
Signalling |
1,767 |
14% |
1,911 |
15% |
|
Sales by product line |
12,271 |
100% |
12,775 |
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 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.
Gross margin % on backlogGross
Margin % on backlog is a Key Performance Indicator to present the
expected performance level of firmed contracts in backlog. It
represents the difference between the sales not yet recognized and
the cost of sales not yet incurred from the contracts in backlog.
This % is an average of the portfolio of contracts in backlog and
is meaningful to project mid- and long-term
profitability.
Adjusted Gross Margin before
PPAAdjusted Gross Margin before PPA is a Key Performance
Indicator to present the level of recurring operational
performance. It represents the sales minus the cost of sales,
adjusted to exclude the impact of amortisation of assets
exclusively valued when determining the purchase price allocations
(“PPA”) in the context of business combination as well as
non-recurring “one off” items that are not supposed to occur again
in following years and are significant.
EBIT before PPAFollowing the
Bombardier Transportation acquisition and with effect from the
fiscal year 2021/22 condensed consolidated financial statements,
Alstom decided to introduce the “EBIT before PPA” indicator aimed
at restating its Earnings Before Interest and Taxes (“EBIT”) to
exclude the impact of amortisation of assets exclusively valued
when determining the purchase price allocations (“PPA”) in the
context of business combination. This indicator is also aligned
with market practice.
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 joint-venture for Alstom as
well as, following the integration of Bombardier Transportation,
Alstom Sifang (Qingdao) Transportation Ltd. (formerly Bombardier
Sifang), Bombardier NUG Propulsion System Co. Ltd and Changchun
Changke Alstom Railway Vehicles Company Ltd (formerly Changchun
Bombardier).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 amortization 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.
EBITDA + JV dividendsEBITDA +
JV dividends is the EBIT before PPA, before the depreciation and
amortisation, with the addition of the dividends received from the
JVs.
Adjusted net profitFollowing
the Bombardier Transportation, Alstom decided to introduce the
“adjusted net profit” indicator aimed at restating its net profit
from continued operations (Group share) to exclude the impact of
amortisation of assets exclusively valued when determining the
purchase price allocations (“PPA”) in the context of business
combination, net of the corresponding tax effect. This indicator is
also aligned with market practice.
Free cash flow Free Cash Flow
is defined as net cash provided by operating activities minus
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.
Funds from OperationsFunds from
Operations “FFO” in the EBIT to FCF statement refers to the Free
Cash Flow generated by Operations, less Working Capital
variations.
Trade Working Capital and Contract
Working CapitalTrade Working Capital is the Working
Capital that is not strictly contractual, hence not included in
Project Working Capital. It includes:
- Inventories
- Trade
Receivables
- Trade
Payables
- Other elements
of Working Capital, defined as the sum of Other Current
Assets/Liabilities and Non-Current provisions
Contract Working Capital is the sum of:
- Contract Assets
& Liabilities, which includes the Customer Down-Payments
- Current
provisions, which includes Risks on contracts and Warranties
Net cash/(debt)The net
cash/(debt) is defined as cash and cash equivalents, marketable
securities and other current financial asset, less borrowings.
Pay-out ratio The pay-out ratio
is calculated by dividing the amount of the overall dividend with
the “Adjusted Net profit from continuing operations attributable to
equity holders of the parent, Group share” as presented in the
management report in the consolidated financial statements.
Organic basis This press
release includes performance indicators presented on an actual
basis and on an 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.
| |
Q3 2022/23 |
|
Q3 2023/24 |
|
|
|
|
|
(in € million) |
Reported figures |
Exchange rate and scope
impact |
Organic Figures |
|
Reported figures |
|
|
% Var Act. |
% Var Org. |
|
Orders |
5,152 |
(28) |
5,124 |
|
5,451 |
|
|
+5.8% |
+6.4% |
|
Sales |
4,223 |
(83) |
4,140 |
|
4,332 |
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|
+2.6% |
+4.6% |
| |
9 months2022/23 |
|
9 months2023/24 |
|
|
|
|
|
(in € million) |
Reportedfigures |
Exchange rate and scope
impact |
Organic Figures |
|
Reported figures |
|
|
% Var Act. |
% Var Org. |
|
Orders |
15,224 |
(275) |
14,949 |
|
13,898 |
|
|
(8.7)% |
(7.0)% |
|
Sales |
12,271 |
(370) |
11,901 |
|
12,775 |
|
|
+4.1% |
+7.3% |
- Alstom - PR Q3 2023-24 ENG - Final
Alstom (EU:ALO)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Alstom (EU:ALO)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024
