Alstom booked €20.7 billion of orders between 1st April 2022 to 31st March 2023, Sales were €16.5 billion, in line with the targeted trajectory, resulting in a strong book-to-bill ratio at 1.25. The backlog reached €87.4 billion, providing strong visibility on future sales.
More Details:
- In the fiscal year 2022/23, Alstom’s adjusted EBIT was €852 million, equivalent to a 5.2% EBIT margin. Adjusted net profit was €292 million and free cash flow was €199 million for the full year.
- On 31 March 2023, the Group’s net debt position stood at €2,135 million, compared to the €2,085 million that the Group reported on 31 March 2022. Alstom benefits from a solid €4,787 million liquidity position and equity amounting to €9,102 million on 31 March 2023.
- The Board of Directors, in its meeting of 9 May 2023, decided to propose a dividend distribution of €0.25 per share at the next Shareholders’ meeting on 11 July 2023, which corresponds to a 33% pay-out ratio from the adjusted net profit.
Orders:
- During the fiscal year 2022/23, the Group recorded €20.7 billion in orders, with significant commercial success across multiple geographies, notably in Africa/Middle East/Central Asia and in Asia/Pacific, and product lines, mostly in Services. Orders for Services reached a new record level of €6.4 billion, or 31% of the total order intake.
- In Asia/Pacific, the order intake stood at €3.0 billion, as compared to €2.3 billion over the same period last fiscal year. In Australia, Alstom has signed a framework contract with the Department of Transport Victoria for the provision of 100 Flexity TM low-floor Next Generation Trams (NGTs) for the largest urban tram network in the world.
- Valued at approximately €700 million, the contract includes supply of rolling stock and 15-year maintenance, making this the biggest tram contract in Australia and in the Southern hemisphere.
In India:
- In India, Alstom has been awarded a contract by Madhya Pradesh Metro Rail Corporation Limited (MPMRCL) to deliver 156 MoviaTM metro cars with 15 years of comprehensive maintenance and the installation of latest generation of Communications Based Train Control (CBTC) signalling system as well as train control and telecommunication systems, each with seven years of comprehensive maintenance, for the Bhopal and Indore metro projects.
- The Group also received a contract from Delhi Metro Rail Corporation (DMRC) to design, manufacture, supply, test and commission 312 standard gauge metro cars for the Delhi Metro Phase-IV expansion with maintenance services for 78 cars.
- In Hong Kong, Alstom was awarded a contract to provide the signalling system for the Lantau Extension project.
- As of 31 March 2023, the orders backlog stood at €87.4 billion, providing the Group with strong visibility over future sales.
Sales:
- Alstom’s sales amounted to €16.5 billion for the fiscal year 2022/23, representing a growth of 7% on an actual basis and 5% on an organic basis compared with Alstom sales last fiscal year. Sales related to non-performing backlog, corresponding to sales on projects with a negative margin at completion, amounted to €2.3 billion during the fiscal year 2022/23.
- Rolling stock sales reached €8.8 billion, representing an increase of 2% on an actual basis, driven by the continued execution of large rolling stock contracts, including the Coradia StreamTM trains in the Netherlands, the Regio 2N regional trains and RER NG double-deck trains for SNCF as well as EMU trains for the Paris Metro for RATP in France and for Trenitalia in Italy, the Barcelona Metro for Transports de Barcelona SA in Spain, the ICE 4 trains and the S-Bahn Stuttgart trains for Deutsche Bahn in Germany, the AventraTM trains in the United Kingdom and the double-deck M7-type multifunctional coaches for SNCB in Belgium.
- On the other hand, large Rolling Stock contracts such as the TWINDEXX double-deck trains for SBB in Switzerland, the Coradia StreamTM trains in Italy and the Nouvelle Automotrice Transilien project for SNCF in France are close to completion, therefore generating lower level of sales as compared to last year.
- Services sales stood at €3.8 billion, up 12% versus last year, benefiting from growth in Europe maintenance as well as Train Operations & System Maintenance services in the Americas.
- In Signalling, Alstom reported €2.4 billion sales, up 7% versus last year, led by a stable execution in Europe and in APAC and a growing performance in Germany.
- Systems sales grew 28% on an actual basis and stood at €1.5 billion, reflecting an acceleration in execution on key projects notably Cairo monorail in Egypt, Monorails project in Thailand, as well as the Tren Maya project in Mexico.
Divestments:
- The Group announced in July 2022 that it has concluded the transfer of business activities related to Bombardier Transportation’s contribution to the V300 ZEFIRO very high-speed train to Hitachi Rail. Alstom will continue to honour its obligations under the existing orders for Rolling Stock from Trenitalia and ILSA to ensure a seamless transition.
- In August 2022, Alstom also completed the divestment of its Coradia Polyvalent platform, its Reichshoffen production site in France and its TALENT3 platform to CAF.
- These milestones signal the completion of the divestment commitments to the European Commission for their clearance of the Alstom/Bombardier Transportation transaction.
Innovation by Pioneering Smarter and Greener Mobility for All:
- During the fiscal year 2022/23, Alstom reached important delivery milestones, and launched a range of initiatives to accelerate its transformation into a more competitive and agile group. The R&D expenses reached €519 million, i.e., 3.1% of sales for the full year, reflecting the Group’s continuous investments in innovation, focused on the following areas:
- Energy efficiency: Alstom puts a high focus into aerodynamic efficiency to reduce the energy consumption on our high-speed trains. The new Avelia Horizon (known as TGV M) has a resistance reduced by 16% compared with Euroduplex, which accounts for nearly half of the energy consumption at high speed.
- Noise reduction: Flexx Curve is an innovative solution to reduce the resistance of the wheels and the noise level in curves. It reduces curve squealing noise by ca. 15 dB and energy consumption in curves by 80%.
- Passenger experience: Alstom’s smart lighting solution is an intelligent light control system to automatically adjust the interior LED lighting according to the level of natural light, weather, time of the day, season, and passenger density. For passengers, it enables them to improve their well-being and creates a pleasant ambiance, respecting the human physiological cycle.
- Autonomous train: Alstom’s ATO technology (Automatic Train Operation) aims at maximising and optimising operations, increasing line capacity, reducing energy consumption and costs, and improving general service (including comfort and punctuality) for passengers.
- Several important milestones were reached over the period (for SNCF in particular), both for passenger trains (success of the first tests of autonomous trains without any crew member in the driving cab) and for freight transportation (successful testing of an automatic lateral signalling system and an obstacle detection radar).
One Alstom team – Agile, Inclusive and Responsible:
- More than ever, decarbonisation is at the heart of Alstom’s strategy. The Group is reducing its own direct and indirect emissions (Scope 1 & 2) and is also committed to work with suppliers and customers (Scope 3) to contribute to Net Zero carbon in the mobility sector. Alstom targets have been submitted for validation by the independent Science Based Targets initiative (SBTi) with expected feedback by June 2023.
- During the year energy efficiency plans were deployed in all regions and, along with favourable weather conditions, resulted in a reduction in energy consumption of 10.5%, with a particular fall in gas consumption.
- The supply of electricity from renewable sources has also been expanded. Alstom implemented a new contract for the supply of electricity from renewable energy sources in India and further expanded in France, United Kingdom and Germany to reach 57% of green electricity coverage globally (vs 42% for FY 2021/22).
- Altogether, this has led to a reduction of Scope 1 and 2 CO2 emissions of 22% in 2022/23 versus the previous year.
- The Group is in line with its target to reduce energy consumption from its solutions with a 23.4% reduction achieved, compared to 2014 performance. Performance on intensity of Scope 3 emissions from Use of Sold Products is stable, reflecting the mix of solutions and geographies of orders taken in recent years and slow decarbonisation of electricity mix in some geographies. An engagement programme with customers has been started and will be extended in coming years.
- Alstom is also engaging with suppliers on Scope 3 and committed to decreasing its CO2 emissions intensity from the supply chain by 30% by 2030.
- Regarding Diversity & Inclusion, the Alstom in Motion (AiM) 2025 strategy targets to reach 28% of women managers, engineers and professionals roles by 2025. As of the end of March 2023, 23.9% of manager, engineer and professional roles are held by women. Alstom is on a positive trajectory and will continue to accelerate its efforts in the coming months.
- In addition, Alstom published for the first-year European Taxonomy-aligned KPIs about Sales, Capex and Opex, pursuing strong analysis initiated last year for the EU Taxonomy-eligibility disclosure.
- EU Taxonomy-aligned Sales amounted to 59% and ranked Alstom among best in class, confirming the importance of the sector in which Alstom operates in achieving the EU’s ambition of carbon neutrality by 2050. The EU Taxonomy purpose is to redirect capital flows towards sustainable activities and help navigate transition to a low carbon economy.
- In 2022/23, The Group maintained its presence among the DJSI World and CAC40 ESG index reflecting its strong position and strategy on Sustainability.
Mid-term financial trajectory and objectives to be reached in FY 2025/26:
- Alstom will reach its mid-term adjusted EBIT and Free Cash Flow objectives in FY 2025/26, one year later than previously envisioned, as a result mainly of the new macroeconomic environment, in particular the effect of inflation.
- 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 €87.4 billion backlog as of 31 March 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 a 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% driven by mid-term stability of working capital, stabilisation of CAPEX to around 2% of sales and cash focus initiatives while benefiting from volume and synergies take up.
Mr. Henri Poupart-Lafarge, Chairman of the Board of Directors and Chief Executive Officer of Alstom, said “We have delivered a strong commercial performance during this year, with new orders exceeding €20 billion and book-to-bill consistently at 1.25. Market momentum remains very positive with an increasing orders pipeline, and compelling growth prospects in all regions supported by a conducive policy environment focused on the greening of transport. Alstom is emerging stronger operationally from this year as we accelerate our transformation. Of note, we have successfully adapted our model to address the supply chain and electronics headwinds, while delivering against our financial and environmental objectives. We remain committed to our mid-term profitability and cash generation targets, which will be reached in 2025/26.”
Source: Alstom- Press Release | Image Credit (representational): Alstom
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