Excellent results for Alstom in the first half
2017/18
-
Sales up 5% in line with 2020
objective
-
Adjusted EBIT up 16% at 6.2%
margin from 5.6%
-
Net income up 66% at €213
million
-
Sound cash flow generation at
€227 million
-
2020 objectives
confirmed
14 November
2017 - Between 1 April 2017 and 30 September 2017, Alstom
booked €3.2 billion of orders. Sales, at €3.8 billion were up 5%
organically. The adjusted EBIT increased to €231 million, 16% above
last year, leading to an adjusted EBIT margin of 6.2%. Net income
(Group share) reached €213 million. Alstom benefits from a very
strong balance sheet. During the first half of fiscal year 2017/18,
free cash flow amounted to €227 million.
Key figures
(in € million) |
Half-year ended
30 September 2016 |
Half-year ended
30 September 2017 |
% change
reported |
% change
organic |
Actual figures |
|
|
|
|
|
Orders backlog[1] |
33,491 |
32,741 |
(2)% |
0% |
|
Orders received |
6,212 |
3,170 |
(49)% |
(49)% |
|
Sales |
3,570 |
3,756 |
5% |
5% |
|
Adjusted EBIT |
200 |
231 |
16% |
|
|
Adjusted EBIT margin |
5.6% |
6.2% |
|
|
|
Net income - Group share |
128 |
213 |
|
|
|
Free cash flow |
333 |
227 |
|
|
|
"These six first
months were marked by the good execution of our various projects as
shown by solid operational results in line with our 2020
objectives. Systems sales have strongly
increased, supported by the progress of Dubai and Riyadh metros
projects. The construction of South Africa and India factories
continues. Our innovation capacity is highlighted by the first
commercial success for the Coradia iLint, the world's first
hydrogen train. These excellent results
demonstrate the success of Alstom's strategy in a growing market
and represent a significant step towards our 2020 objectives.
Furthermore, the combination of Alstom with
Siemens' railway activities brings together two innovative players
in the mobility market with more unique customer value and
operational potential. At this stage discussions with employee
representative bodies are ongoing and the deal implementation teams
are operational," said Henri
Poupart-Lafarge, Alstom Chairman and Chief Executive Officer.
***
2020 strategy on track
Alstom 2020 strategy is based on
the five following pillars:
-
Customer-focused
organisation
The Group booked €3,170 million
orders in the first half of fiscal year 2017/18. This compares to
€6,212 million over the same period last year which included
several large projects such as the new generation of high-speed
trains with Amtrak in the USA and the extension of Dubai Metro's
Red line with RTA in United Arabic Emirates.
This semester, Alstom signed
contracts in all regions, including two
contracts in Canada for almost 100 light rail vehicles, a first
metro system contract in Vietnam, a metro system contract in Philippines,
contracts for regional trains in Italy,
Senegal and Germany, a maintenance contract in Sweden, as well
as a fleet modernisation project in
the USA.
At €32.7
billion on 30 September 2017, current backlog provides strong
visibility on future sales.
-
Complete range of
solutions
In the first half of fiscal year
2017/18, Alstom's total sales reached €3,756 million, up 5% (5%
organically).
Signalling, systems and services
represented 57% of sales in the first half of 2017/18, in line with
2020 objective of 60%. Systems sales increased by almost 60% with
progress of Riyadh and Dubai metro systems. Signalling and Services
sales slightly decreased due to an adverse forex impact in the
United Kingdom as well as the ramp down of some projects. Rolling
stock sales remained stable at €1.6 billon with deliveries of
regional and high-speed trains in Europe, the beginning of the
Amtrak project in the USA, on-going execution of the PRASA project
in South Africa and tramway deliveries in Algeria.
-
Value creation through
innovation
Alstom sustained its level of
research and development (gross costs) at €101 million, i.e. 2.7%
of sales, in first half of fiscal year 2017/18. Main programmes
included the renewal of rolling stock ranges, signalling, and
predictive maintenance. In April 2017, Alstom launched several
smart mobility technologies to address the evolving needs of both
operators and passengers, such as Mastria, the first multimodal
supervision solution. Alstom and Airbus also signed a strategic
cooperation agreement in the field of cybersecurity. More recently,
Alstom and NTL received the Innovation label at Busworld exhibition
in Belgium for Aptis, their new mobility experience.
-
Operational and environmental
excellence
Alstom delivered an adjusted EBIT
of €231 million in first half of 2017/18, compared to €200 million
the previous year, representing a 16% increase. The adjusted EBIT
margin reached 6.2%, versus 5.6% for last fiscal year. This
continuous improvement was driven by volume increase and on-going
initiatives for operational excellence. Net income (Group share)
reached €213 million.
In September 2017, Alstom improved
its score in the Dow Jones Sustainability World and Europe indices
with an overall score of 80 out of 100 in the DJSI ranking, which
represents a two points improvement compared to previous year.
Finally, in October 2017, Alstom scores B at CDP's climate change
questionnaire.
-
Diverse and entrepreneurial
people
To reflect Alstom's passenger
base, the company has the ambition to increase diversity. Alstom's
employees around the world all share the same culture, underpinned
by strong integrity and ethics values. In June 2017, Alstom
obtained ISO 37001 certification for its anti-bribery management
system, confirming its commitment to fight corruption.
***
Solid balance
sheet
During the first half of fiscal
year 2017/18, the Group free cash flow was positive at €227
million, benefitting from impacts of the Cash Focus programme and
favourable cash profile of several projects.
Alstom invested €80 million in
capital expenditures in first half 2017/18, compared to €43 million
the previous year. As end of September 2017, the cumulated
transformation capex stood at €100 million, out of €300 million,
with notably the progress in sites' construction in South Africa
and in India.
Alstom net debt amounted to €101
million on 30 September 2017, compared to €208 million on 31 March
2017. Last, equity reached €3,787 million at 30 September 2017,
versus €3,713 million at 31 March 2017.
***
Creation of a global
leader in Mobility
On 26 September 2017, Siemens and
Alstom signed a Memorandum of Understanding to combine Siemens'
mobility business including its rail traction drives business with
Alstom. The transaction brings together two innovative players of
the railway market with unique customer value and operational
potential. The two businesses are largely complementary in terms of
activities and geographies.
***
Governance
As per the announcement of 26
September 2017, the French State did not exercise the call options
on Alstom shares held by Bouygues and restituted them on 17 October
2017. According to declaration published by the AMF (the French financial markets authority) on 25
October 2017, Bouygues holds 62,086,226 shares and 65,347,092
voting rights i.e. 28.15% of the capital and 28.95% of the voting
rights of the Company. In this context, Pascal Faure has presented
his resignation from his mandate as Director at Alstom. As a
consequence, the Board of Directors of Alstom is now comprised of
13 Directors of which 6 women (46%) and 7 independent Directors
(54%).
***
Objectives for 2020
confirmed
By 2020 sales should grow
organically by 5% per year.
Adjusted EBIT margin should reach around 7% by 2020 driven by
volume, portfolio mix and results of operational excellence
actions.
By 2020, Alstom expects c. 100% conversion from net income into
free cash flow.
*
The half-year
financial report, as approved by the Board of Directors, in its
meeting held on 13 November 2017, is available on Alstom's website
at www.alstom.com. The accounts have been
reviewed by the auditors.
About
Alstom
As a promoter of sustainable mobility, Alstom
develops and markets systems, equipment and services for the
transport sector. Alstom offers a complete range of solutions (from
high-speed trains to metros, tramways and e-buses), passenger
solutions, customised services (maintenance, modernisation),
infrastructure, signalling and digital mobility solutions. Alstom
is a world leader in integrated transport systems. The company
recorded sales of €7.3 billion and booked €10.0 billion of orders
in the 2016/17 fiscal year. Headquartered in France, Alstom is
present in over 60 countries and employs 32,800
people.
www.alstom.com
Press
contacts
Justine Rohée - Tel. + 33 1 57 06 18 81
justine.rohee@alstomgroup.com
Christopher English - Tel. + 33 1 57
06 36 90
christopher.a.english@alstomgroup.com
Investor
relations
Selma Bekhechi - Tel. + 33 1 57 06 95 39
selma.bekhechi@alstomgroup.com
Julien Minot - Tel. + 33 1 57 06
64 84
julien.minot@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 |
H1 2016/17 |
% |
H1 2017/18 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Europe |
2,124 |
35% |
1,535 |
48% |
Americas |
2,570 |
41% |
907 |
29% |
Asia / Pacific |
267 |
4% |
544 |
17% |
Middle East / Africa |
1,251 |
20% |
184 |
6% |
Orders by destination |
6,212 |
100% |
3,170 |
100% |
Actual figures |
H1 2016/17 |
% |
H1 2017/18 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Europe |
2,121 |
59% |
1,917 |
51% |
Americas |
577 |
16% |
727 |
19% |
Asia / Pacific |
343 |
10% |
429 |
12% |
Middle East / Africa |
529 |
15% |
683 |
18% |
Sales by destination |
3,570 |
100% |
3,756 |
100% |
Appendix 1b -
Product Breakdown
Actual figures |
H1 2016/17 |
% |
H1 2017/18 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Rolling stock |
2,971 |
48% |
1,330 |
42% |
Services |
1,596 |
26% |
992 |
31% |
Systems |
1,268 |
20% |
406 |
13% |
Signalling |
377 |
6% |
442 |
14% |
Orders by destination |
6,212 |
100% |
3,170 |
100% |
Actual figures |
H1 2016/17 |
% |
H1 2017/18 |
% |
(in € million) |
|
Contrib. |
|
Contrib. |
Rolling stock |
1,641 |
46% |
1,641 |
43% |
Services |
742 |
21% |
696 |
19% |
Systems |
515 |
14% |
819 |
22% |
Signalling |
672 |
19% |
600 |
16% |
Sales by destination |
3,570 |
100% |
3,756 |
100% |
Appendix 2 -
Income statement
Actual figures |
H1 2016/17 |
H1 2017/18 |
(in € million) |
|
|
Sales |
3,570 |
3,756 |
Adjusted Earnings Before Interest and Taxes
(aEBIT) |
200 |
231 |
Restructuring charges |
- |
(19) |
Other charges |
(32) |
(18) |
Earnings Before Interest and Taxes (EBIT) |
168 |
194 |
Financial
result |
(71) |
(51) |
Tax
result |
(32) |
(40) |
Share in
net income of equity investees |
47 |
110 |
Minority
interests from continued operations |
(8) |
(8) |
Net income
- Discontinued operations* |
24 |
8 |
Net income - Group share |
128 |
213 |
*Group share
Appendix 3 - Free
cash flow
Actual figures |
H1 2016/17 |
H1 2017/18 |
(in € million) |
|
|
Adjusted EBIT |
200 |
231 |
Depreciation and amortisation |
69 |
93 |
Restructuring cash-out |
(18) |
(18) |
Capital
expenditure |
(43) |
(80) |
R&D
capitalisation |
(21) |
(23) |
Change in
working capital |
188 |
53 |
Financial
cash-out |
(11) |
(19) |
Tax
cash-out |
(40) |
(46) |
Other* |
9 |
36 |
Free cash flow |
333 |
227 |
*includes free cash flow from
discontinued operations
Appendix 4 -
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, 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.
aEBIT corresponds to earning before interests, tax and net result
from equity method investments adjusted with 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;
-
and 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.
A non-recurring item is a
"one-off" exceptional item that is not supposed to be reappearing
in following years and that is significant.
Adjusted EBIT margin corresponds to Adjusted EBIT in percentage of
sales.
The non-GAAP measure adjusted EBIT indicator reconciles with the
GAAP measure EBIT as follows:
|
Half-year ended |
Half-year ended |
(in € million) |
30 Sept. 2016 |
30 Sept. 2017 |
Adjusted Earnings Before Interest and Taxes
(aEBIT) |
200 |
231 |
Restructuring costs |
- |
(19) |
Assets impairment |
- |
- |
PPA amortisation and integration costs |
(24) |
(12) |
Capital gains/losses on disposal of business |
(1) |
- |
Others |
(7) |
(6) |
Earnings Before Interest and Taxes (EBIT) |
168 |
194 |
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.
A reconciliation of free cash flow and net cash provided by
operating activities is presented below:
|
Half-year ended |
Half-year ended |
(in € million) |
30 Sept. 2016 |
30 Sept. 2017 |
Net cash provided by / (used in) operating
activities |
396 |
329 |
Capital expenditure (including capitalised R&D
costs) |
(64) |
(103) |
Proceeds from disposals of tangible and intangible
assets |
1 |
1 |
Free cash flow |
333 |
227 |
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.
|
Year ended |
Half-year ended |
(in € million) |
31 March 2017 |
30 Sept. 2017 |
Cash and cash equivalents |
1,563 |
1,643 |
Other current financial assets |
8 |
15 |
Financial non-current assets directly associated to
financial debt |
260 |
241 |
Less: |
|
|
Current financial debt |
444 |
468 |
Non-current financial debt |
1,595 |
1,532 |
Net cash/(debt) at the end of the period |
(208) |
(101) |
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.
[1] September
16 backlog has been restated from the contribution of staggered
entities
2017-11-14 PR H1
2017-18.pdf
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The issuer of this announcement warrants that they are solely
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information contained therein.
Source: ALSTOM SA via Globenewswire
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