ALSTOM SA: Alstom’s first half 2023/24. Confirming sound market
positioning, Alstom takes significant steps to reduce its leverage
after negative cash flow.
Alstom’s first half 2023/24. Confirming
sound market positioning, Alstom takes significant steps to reduce
its leverage after negative cash flow.
- H1 2023/24 key figures in
line with 4th October preliminary
release
- FY 2023/24
outlook:
- Sales organic growth: above
5%
-
aEBIT1 margin: around
6%
- Free Cash Flow
within the range €(500)m - €(750)m
- Mid-term objectives
confirmed
- Alstom action
plan:
- Commercial and operational
efficiency, costs saving plan
- €2 billion balance sheet
reinforcement plan
- Simplification of
operational setup
15 November 2023 – In the first
half 2023/24 (from 1 April to 30 September 2023), Alstom booked
€8.4 billion of orders. The Group sales reached €8.4 billion,
resulting in a book-to-bill ratio at 1.0.
The backlog reached €90.1 billion, providing
strong visibility on future sales. Gross margin % on backlog1
reached 17.2% as of 30 September 2023, compared to 16.9% on 31
March 2023.
Alstom’s adjusted EBIT1 was €438 million,
equivalent to a 5.2% aEBIT margin. Adjusted net profit1 was €174
million and free cash flow was €(1,119) million for the
half-year.
“The negative free cash flow of Alstom during
this first half is a clear call for change. While demand remains
sustained, despite some volatility, our commercial performance has
been soft. The Bombardier Transportation integration continues to
progress. However, the delivery of Aventra program has been more
complex than anticipated. Production and sales growth is
accelerating. We are undertaking a comprehensive action plan to
maintain our investment grade rating and secure our mid-term
objectives. Confident in the strength of our backlog and on the
solid business foundations of Alstom, I’m fully committed to
take-up this challenge.” said Henri
Poupart-Lafarge, Chairman of the Board of Directors and
Chief Executive Officer of Alstom.
***
Alstom takes new steps to reduce
leverage and secure mid-term profit and cash targets
The company is working on a comprehensive
operational, commercial, and cost efficiency plan. The plan aims at
accelerating the third phase of the Bombardier Transportation
merger roadmap (optimization):
- Continue growing the margin in
backlog through quality order intake (+0.5% per year in coming
three years),
- Successfully delivering the
production ramp-up (currently over 10% increase in cars production
per year),
- Improving on-time delivery (back to
ex-Alstom level in FY 2024/25),
- Efficiency and working capital
discipline, notably through reduction of inventory days of sales
(back to 75 days as a mid-term target) and contract assets
reduction through improved execution,
- Reducing overhead costs (~1,500 FTE
reduction, representing close to 10% of total S&A
positions)
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
therefore 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.
Depending on market conditions, Alstom is
considering a range of transactions to accelerate the company’s
deleveraging, including:
- An assets disposal program, which
has already been launched (generating proceeds of €0.5 billion to
€1.0 billion);
- Equity and equity-like issuances,
including the refinancing of certain assets;
- A capital increase with pre-emptive
rights for shareholders.
The company remains flexible as to the
sequencing as well as the rightsizing of such instruments.
On the liquidity side, Alstom has signed on
October 31st a new liquidity line of €2.25 billion with a 1st tier
international bank as a further step to demonstrate its financial
flexibility.
Alstom’s top priority is to support credit
metrics and bolster the foundations of the Group in order to create
enduring shareholder value.
Organization changes to improve
accountability and financial discipline
At the next Shareholders’ General Meeting in
July 2024, the Board will propose Philippe Petitcolin, former CEO
of Safran, to be elected as a Board Member, then Chairman of the
Board. As a consequence, the role of Chairman and CEO will then be
dissociated, and Henri Poupart-Lafarge will keep the CEO role.
Additionally, as part of the third phase of the
merger roadmap, the group will engage in an operational
organization simplification, to increase accountability. This
simplification will be a key lever to drive the FTE reduction
mentioned above.
As part of the consequences of the H1 2023/24
cash outflow, a review of the employee incentive scheme has been
launched to insert a condition of reaching cash-focused targets for
all the 28,000 employees benefiting from the scheme.
***
Key figures2
Actual figures(in € million) |
Half-year ended 30 September
2022 |
Half-year ended 30 September
2023 |
% Change Reported |
% Change Organic |
Orders received3 |
10,072 |
8,446 |
(16)% |
(14)% |
Sales |
8,048 |
8,443 |
4.9% |
8.8% |
Adjusted EBIT3 |
397 |
438 |
10% |
|
Adjusted EBIT margin3 |
4.9% |
5.2% |
|
|
EBIT before PPA3 |
200 |
275 |
|
|
Adjusted net profit3 |
179 |
174 |
|
|
Free Cash Flow |
(45) |
(1,119) |
|
|
(in € million) |
Full year ended 31 March
2023 |
Half-year ended 30 September
2023 |
% Change Reported |
% Change Organic |
Backlog |
87,387 |
90,080 |
3% |
3% |
Gross margin % on backlog3 |
16.9% |
17.2% |
|
|
***
Strategic and business
update
-
Growth by offering greater value to customers
During the first half of fiscal year 2023/24,
the Group recorded €8.4 billion in orders, with commercial
success across multiple geographies – notably in Europe,
Asia/Pacific and in Americas – and product lines. For the same
period last fiscal year, Alstom reported an order intake of €10.1
billion. The (16)% decrease is mostly driven by last year’s
landmark contract awarded by Landesanstalt Schienenfahrzeuge Baden
Württemberg (SFBW) network in Germany of almost €2.5 billion.In
Europe, Alstom recorded €5.2 billion order intake
during the first half of fiscal year 2023/24, compared with €6.6
billion over the same period last fiscal year.
In Germany, Alstom was awarded a contract to
supply 40 Coradia StreamTM High-Capacity electric multiple units
together with full maintenance for 30 years to Nahverkehrsverbund
Schleswig-Holstein (NAH.SH), valued at close to €900 million, and
including an option for up to 55 additional trains with a
corresponding full-service package. The Group also signed a
contract with RAILPOOL for 50 TraxxTM Universal multi-purpose
locomotives.
In France, the Group signed a framework contract
with Akiem European rolling stock leasing company for 100
TraxxTM Universal multi-system (MS3) locomotives, together with an
initial firm order for 65 locomotives. The total amount of the
framework agreement is up €500 million.
Alstom, as part of a consortium with the civil
works companies Gulermak and Arcada, also signed a contract with
the Cluj-Napoca City Hall in Romania for the construction of the
Cluj-Napoca Metro Line 1. Alstom’s share of this state-of-the-art
turnkey project is approximately €400 million.
In Italy, Alstom was awarded a contract for the
supply of high-speed trains.
In Americas, Alstom reported
€1.5 billion order intake, compared with €0.8 billion over the same
period last fiscal year, driven by a contract with the Southeastern
Pennsylvania Transportation Authority (SEPTA) in the United States
to deliver 130 full low floor electric streetcars for Philadelphia,
valued at over €667 million and with options to build an additional
30 streetcars. And the Group was awarded a contract by the
Connecticut Department of Transportation (CTDOT) in the United
States to supply 60 single-level rail coach cars valued at
approximately €285 million with options to build an
additional 313 cars, as part of CTDOT’s coach renewal program for
its statewide rail system.
In Asia/Pacific, the order
intake stood at €1.7 billion, stable compared to last fiscal year.
In the Philippines, Alstom, in consortium with Colas Rail, has been
awarded by Mitsubishi Corporation a contract to provide an
integrated railway system for the extension of the North-South
Commuter Railway project (NSCR). Alstom’s contract share is worth
approximately €1 billion. In Australia, the Group will build an
additional 23 VLocityTM trains in Victoria.
In Africa/Middle East/Central
Asia, the Group reported €35 million order intake,
compared with €1.0 billion over the same period last fiscal year.
The performance last year was mainly driven by a contract to supply
MetropolisTM trains and maintenance services for upgrade of Cairo
Metro Line 1.
As of 30 September 2023, the backlog stood at
€90.1 billion, providing the Group with strong visibility over
future sales.
Alstom’s sales amounted to €8.4 billion for the
first half of fiscal year 2023/24, representing a growth of 4.9% on
an actual basis and a strong 8.8% on an organic basis compared with
Alstom sales in the same period last fiscal year. Sales related to
non-performing backlog, corresponding to sales on legacy projects
with a negative margin at completion, amounted to €1.0 billion
during the first half of the fiscal year 2023/24.
Rolling stock sales reached €4.5 billion,
representing an increase of 2% on an actual basis and 6% on an
organic basis, driven by the ramp-up of some contracts such as the
metro cars for BART in the United States and the MetropolisTM
trains for São Paulo Metropolitan Train System in Brazil, and the
solid level of execution in Europe, India and Kazakhstan.
Services sales stood at €2.0 billion, up 10% on
an actual basis and 14% on an organic basis versus last year,
benefiting from a strong ramp-up in the UK, in Italy and in the
US.
In Signalling, Alstom reported €1.2 billion
sales, up 8% on an actual basis and 12% on an organic basis versus
last year, led by a consistent execution across all regions, mainly
in Europe and in APAC.
Systems sales grew 2% on an actual basis and 5%
on an organic basis, and stood at €0.8 billion, driven by a good
performance of Turnkey Systems projects in Mexico and Canada.
***
2. Innovation by
Pioneering Smarter and Greener Mobility for All
During the first half of fiscal year 2023/24,
Alstom’s net R&D expenses reached €2544 million, i.e., 3.0% of
sales, reflecting the Group’s investment in innovation to develop
smarter and greener mobility solutions, in line with the Alstom In
Motion strategy.
Programs funded by IPCEI5 Hydrogen have
been launched. This innovative European program will allow to
further develop the components portfolio needed for hydrogen
powered trains, fuel cell powerpacks, batteries and power
converters. It will support the development of new hydrogen trains
for regional applications, shunting locos and freight, leveraging
on the experience collected with Coradia iLint™
regional trains that are now in revenue service.
The development of the Avelia range continues in
the Very High-Speed segment. Two pre-serial trainsets of
Avelia Horizon™ pursue dynamic test on the French
network. The 320 kph milestone has been reached in September 2023.
The development of international configurations is ongoing.
Based on Citadis™ platform,
Alstom is developing a light rail vehicle addressing the
specificities of the market in the USA with a focus on passenger
experience and the possibility to operate without catenary.
The replacement of Adessia™
commuter train has been launched to address the U.K. and USA
markets. This new product range will include electric, battery and
hydrogen versions to also replace the existing Diesel trains.
The other Rolling Stock developments were
focused on Alstom Coradia stream™ range which has
been further extended with longer cars and 15kV traction chain
(primarily in Germany), and Alstom TRAXX™ Multi-system 3 -
locomotives with the development of the passenger version
at 200kph. The upgrade of large gauge Metros addressing the Indian
market is ongoing.
Services product line continues to focus on
addressing green, sustainable and more efficient operation concepts
like Green re-tractioning initiatives and
Health-Hub™, an innovative solution for operation
and maintenance activities.
The Signalling Product Line worked on
Atlas™ European Standard convergence, driving
market presence with its integration into TRAXX platform and
securing new contracts for cross border operation,
ERTMS* level 2 and level 3 on-board solution
together with Automatic Train Operation, and it continued its
footprint expansion with a new contract in Canada with the
ATLAS™ on-board train control solution. Alstom
kept on developing CBTC6 solutions Urbalis
Fluence™ (e.g., Torino Line 1),
Urbalis™ 400™ (e.g., Cluj Metro,
Surat Metro L1&2, Bhopal & Indore Metro) and
Cityflo™ 650™ (e.g., Delhi Line 7 extension, Metro
Santiago de los Caballeros) for metros and tramways, and
ICONIS™ and Ebi™Screen™ suites
for Operational Control Centres, maximising traffic fluidity and
orchestrating operations from a distance.
Alstom Signalling also plays a key role in the
System and Innovation Pillar defining a harmonised functional
architecture for the rail system including migration paths and
regulatory framework as well as contributing to several Flagship
projects: MOTIONAL (FP1), R2DATO (FP2) and FUTURE (FP6).
Alstom Innovations cluster continued to develop
Autonomous Mobility solutions for Passengers &
Freight trains.
***
3. Profitability
The adjusted EBIT as a percentage of sales has
progressed from 4.9% over the first semester of 2022/23 to 5.2%
over the first semester of 2023/24, benefiting from synergies for
30bps, a steady reduction of non-performing contracts for 40bps, an
increased volume and favourable mix for 50bps, an improved
indexation of our backlog for 20bps, and it was partially offset by
R&D acceleration for (30)bps and the negative gross margin
impact related to the Aventra program stabilisation costs
(80)bps.
Below adjusted EBIT, Alstom recorded
restructuring and rationalisation charges of €(7) million.
In conformity with announced reduction
trajectory, integration costs, impairment loss & others
amounted to €(92) million, mainly consisting of costs related to
the integration of Bombardier Transportation for €(65) million, and
other exceptional expenses for €(27) million among which legal fees
in the context of Bombardier Transportation’s integration and
remedies costs.
Taking into consideration restructuring and
rationalisation charges, capital gains on disposal of business,
integration costs, impairment loss & others, Alstom’s EBIT
before amortisation and impairment of assets exclusively valued
when determining the purchase price allocation (“PPA”) stood at
€275 million. This compares to €200 million in the same period last
fiscal year.
The share in net income from equity investments
amounted to €53 million, excluding the amortisation of the purchase
price allocation (“PPA”) from Chinese joint ventures of €(5)
million.
Adjusted net profit, representing the group’s
share of net profit from continued operations excluding PPA net of
tax, amounts to €174 million for the first half of fiscal year
2023/24. This compares to an adjusted net profit of €179 million in
the same period last fiscal year.
***
4. Financial
structure
The Group’s Free Cash Flow stands at €(1,119)
million for the first half of fiscal year 2023/24 as compared to
€(45) million during the same period last fiscal year. Cash
generation was impacted by an unfavourable €(1,375) million change
in working capital compared to €(381) million in the same period
last fiscal year; mostly due to degradation of Trade Working
Capital of which a €(408) million inventory build-up is the main
element, as well as the reversal effect of the change in law on VAT
in France for €(380) million. The Contract Working Capital is
negatively impacted by the delay of the Aventra program in the UK
and the lower-than-expected downpayments in the first semester.
On 30 September 2023, the Group recorded a net
debt position of €(3,433) million, including bonds with long
maturities and cost profile and no financial covenants.
In addition to its available cash and cash
equivalents, amounting to €826 million on 30 September 2023, Alstom
benefits from strong liquidity through short term lines. The
facilities available on 30 September 2023 for the Group are made
of:
- €1.75 billion short term Revolving
Credit Facility maturing in January 2026;
- €2.5 billion Revolving Credit
Facility maturing in January 2028.
These two facilities have a one-year extension
option remaining at lenders’ discretion and are undrawn on 30
September 2023.
Considering the €1,370 million of Negotiable
European Commercial Papers outstanding and €141 million overdraft,
the liquidity available at 30 September 2023 reached €3.6
billion.
On the 31 October 2023, the Group has signed a
new €2.25bn liquidity line with a 1st tier international bank as a
step to demonstrate its financial flexibility. This facility is not
subject to financial covenant, its maturity is October 2024 and has
two six-month extensions at the borrowers' discretion.
***
5. One Alstom team -
Agile, Inclusive and Responsible
More than ever, decarbonization is at the heart
of Alstom’s strategy. The Group is reducing its own direct and
indirect emissions (Scope 1 & 2 at 159kton, reduction of 11%
since March 2023) and is also committed to work with suppliers and
customers (Scope 3) to contribute to Net Zero carbon in the
mobility sector. Alstom CO2 emissions reduction targets had been
validated on the 6th of July 2023 by the independent Science Based
Targets initiative (SBTi) as in line with requirements to reach
Paris Agreement commitments.
The supply of electricity from renewable sources
has also been expanded. Alstom signed a significant Power Purchase
Agreement focused on solar development in Spain. The solar farm is
expected to begin operations early 2025 with a 10-years contract.
The project will cover the equivalent of 80% of Alstom’s
electricity consumption in Europe, so this is a major step in
reaching our target of 100% electricity consumption from
renewables.
Alstom’s Corporate Social Responsibility
performance is regularly evaluated by various rating agencies; the
Group maintained its presence among the CAC40 ESG index for the 3rd
consecutive year. Alstom improved is scoring to ECOVADIS
questionnaire with a score of 77/100 and kept AA score with MSCI
agency. Those results reflect its strong position and strategy on
Sustainability.
***
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 the electronics, supply chain and energy challenges as it
has done during this first half 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
The Board will propose to the Shareholders’
General Assembly in July 2024 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 €90.1 billion backlog as of 30 September
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%7 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 half year results for Fiscal Year 2023/24 on
Wednesday 15 November at 08:30 am (Paris time), hosted by Henri
Poupart-Lafarge, CEO and Bernard Delpit, CFO.
A live audiocast will also be available on
Alstom’s website: Alstom’s Half Year results for FY 2023/24.
To participate in the Q&A session (audio
only), please use the dial-in numbers below:
- France: +33 (0) 1
7037 7166
- UK: +44 (0) 33 0551
0200
- USA: +1 212 999
6659
- Canada: 1 866 378
3566 (toll free)
Quote ALSTOM to the operator to
be transferred to the appropriate conference.
***
The Board of Directors met on November 14th,
2023 and reviewed the interim financial statements and the
management report as end of September 30th, 2023. The limited
review procedures on the condensed interim consolidated financial
statements were carried out by the statutory auditors. Their report
is currently being prepared. The consolidated financial statements
and notes related to this press release are available on the
www.alstom.com website.
Alstom™, Coradia™ and Coradia Stream™ are protected trademarks
of the Alstom Group.
1 Non – GAAP. See definition in the appendix.2
Geographic and product breakdowns of reported orders and sales are
provided in Appendix 13 Non - GAAP. See definition in the
appendix.4 Excluding €(30) million of amortisation expenses of the
purchase price allocation of Bombardier Transportation as of 30
September 20235 Important Projects of Common European Interest6
Communication Based Train Control7 Subject to short term
volatility
|
About Alstom |
|
|
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 |
|
|
|
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 |
|
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
Actual figures |
H1 |
% |
H1 |
% |
(in € million) |
2022/23 |
Contrib. |
2023/24 |
Contrib. |
Europe |
6,571 |
65% |
5,232 |
62% |
Americas |
806 |
8% |
1,456 |
17% |
Asia/Pacific |
1,687 |
17% |
1,723 |
21% |
Middle East/Africa/Central Asia |
1,008 |
10% |
35 |
0% |
Orders by destination |
10,072 |
100% |
8,446 |
100% |
Actual figures |
H1 |
% |
H1 |
% |
(in € million) |
2022/23 |
Contrib. |
2023/24 |
Contrib. |
Europe |
4,788 |
59% |
4,875 |
57% |
Americas |
1,352 |
17% |
1,664 |
20% |
Asia/Pacific |
1,178 |
15% |
1,165 |
14% |
Middle East/Africa/Central Asia |
730 |
9% |
739 |
9% |
Sales by destination |
8,048 |
100% |
8,443 |
100% |
APPENDIX 1B – PRODUCT BREAKDOWN
Actual figures |
H1 |
% |
H1 |
% |
(in € million) |
2022/23 |
Contrib. |
2023/24 |
Contrib. |
Rolling stock |
5,508 |
55% |
3,818 |
45% |
Services |
3,038 |
30% |
2,141 |
26% |
Systems |
524 |
5% |
1,548 |
18% |
Signalling |
1,002 |
10% |
939 |
11% |
Orders by product line |
10,072 |
100% |
8,446 |
100% |
Actual figures |
H1 |
% |
H1 |
% |
(in € million) |
2022/23 |
Contrib. |
2023/24 |
Contrib. |
Rolling stock |
4,360 |
54% |
4,463 |
52% |
Services |
1,802 |
23% |
1,986 |
24% |
Systems |
734 |
9% |
751 |
9% |
Signalling |
1,152 |
14% |
1,243 |
15% |
Sales by product line |
8,048 |
100% |
8,443 |
100% |
APPENDIX 2 – INCOME STATEMENT
Actual figures |
Half-Year ended |
Half-Year ended |
(in € million) |
30 September 2022 |
30 September 2023 |
Sales |
8,048 |
8,443 |
Adjusted Gross Margin before PPA* |
1,060 |
1,165 |
Adjusted Earnings Before Interest and Taxes
(aEBIT)* |
397 |
438 |
Restructuring and rationalisation costs |
(6) |
(7) |
Integration, acquisition and other costs |
(116) |
(91) |
Reversal of net interest in equity investees pick-up |
(75) |
(65) |
EARNING BEFORE INTEREST AND TAXES (EBIT) BEFORE
PPA* |
200 |
275 |
Financial result |
(24) |
(98) |
Tax result |
(48) |
(44) |
Share in net income of equity investees |
62 |
53 |
Minority interests from continued operations |
(11) |
(12) |
Adjusted Net profit |
179 |
174 |
PPA net of tax |
(195) |
(173) |
Net profit – Continued operations, Group
share |
(16) |
1 |
Net profit (loss) from discontinued operations |
(5) |
- |
Net profit (Group share) |
(21) |
1 |
* See definition below
APPENDIX 3 – FREE CASH FLOW
Actual figures(in € million) |
Half-Year ended |
Half-Year ended |
30 September 2022 |
30 September 2023 |
EBIT before PPA |
200 |
275 |
Depreciation and amortisation1 |
233 |
211 |
JVs dividends |
97 |
106 |
EBITDA before PPA + JVs dividends |
530 |
592 |
Capital expenditure |
(99) |
(86) |
R&D
capitalisation |
(57) |
(70). |
Financial &
Tax cash out |
(86) |
(164) |
Others |
48 |
(15) |
Funds from Operations |
336 |
256 |
Trade Working
Capital changes |
(44) |
(730) |
Contract Working Capital changes |
(337) |
(645) |
Free Cash Flow |
(45) |
(1,119) |
1 Before PPA
APPENDIX 4 - NON-GAAP FINANCIAL
INDICATORS DEFINITIONSThis 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.
|
H1 2022/23 |
|
H1 2023/24 |
|
|
|
|
(in € million) |
Actual figures |
Exchange rate and scope
impact |
Comparable Figures |
|
Actualfigures |
|
|
% Var Act. |
% Var Org. |
Orders |
10,072 |
(257) |
9,815 |
|
8,446 |
|
|
(16)% |
(14)% |
Sales |
8,048 |
(287) |
7,761 |
|
8,443 |
|
|
4.9% |
8.8% |
|
Full Year-ended 31 March
2023 |
|
Half Year-ended30 September
2023 |
|
|
|
|
(in € million) |
Actual figures |
Exchange rate and scope
impact |
Comparable Figures |
|
Actualfigures |
|
|
% Var Act. |
% Var Org. |
Backlog |
87,387 |
287 |
87,674 |
|
90,080 |
|
|
3% |
3% |
- PR Alstom H1 2023-24 Results- EN - Final
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