Alstom Sa · EURONEXT:ALO
Alstom Sa — Investor Day (July 2021)
82 slides from Alstom Sa's investor day presentation, Jul 6, 2021
Slide 1: Disclaimer
Disclaimer ● This presentation 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 facto
Slide 2: Alstom Capital Markets Day
Alstom Capital Markets Day July 6th, 2021
Slide 3: Agenda
Agenda Introduction, Market perspectives, Strategic overview Henri Poupart-Lafarge, Chairman and Chief Executive Officer Rolling Stock and Components Danny Di Perna, Executive VP and Chief Operations Officer Benjamin Fitoussi, President Rolling Stock and Components – Development & Operations
Slide 4: Introduction, Market perspectives, Strategic overview
1 Introduction, Market perspectives, Strategic overview Henri Poupart-Lafarge, Chairman and Chief Executive Officer 4
Slide 5: Introduction
1.1 Introduction Strategic roadmap Bombardier Transportation integration Henri Poupart-Lafarge, Chairman and Chief Executive Officer
Slide 6: With Bombardier Transportation acquisition, Alstom becomes clear global leader
With Bombardier Transportation acquisition, Alstom becomes clear global leader with an unparalleled profile CLEAR LEADERSHIP WITH… WORLDWIDE PRESENCE BALANCED AND RESILIENT PROFILE Revenues for calendar year 2020 in € Bn Main railway actors4 18.9 71,700 EMPLOYEES IN 70+ COUNTRIES Turnkey 8% #2 Signa
Slide 7: Significant market tailwinds despite recent global crisis
Significant market tailwinds despite recent global crisis Secular rail long-term drivers + New Catalysts MAJOR MOBILITY INDUSTRY1 STIMULUS PACKAGES ANNOUNCED Government Funding €55 Bn $165 Bn $15 Bn $15 Bn4 RELATED TO RAIL2 USA PLAN3 ONTARIO, CAN FOR INDIAN RAIL EUROPEAN CARBON NEUTRAL STRATEGY Sust
Slide 8: Leading to a strong rail manufacturing growth outlook
Leading to a strong rail manufacturing growth outlook GLOBAL RAIL OEM MARKET1, IN € BN CAGR CAGR +2.8% +2.8% 126 126 5 +4.7% LATAM 116 9 116 TURNKEY Contrasted momentum 5 +6.4% 27 +3.1% Strong potential with 7 uncertain timing 21 24 +2.9% AMECA SIGNALLING 20 14 +5.3% ETCS roll-out mainly in Europe R
Slide 9: Our priorities for 2021 - 2025
Our priorities for 2021 - 2025 Capture growth, extend our innovative leadership, Expand and reinforce continued transformation momentum our strategy Execute plan Integrate Bombardier Transportation with clear roadmap Leading the way to greener and smarter mobility, worldwide © ALSTOM SA 2021. All ri
Slide 10: Strategic roadmap
1.2 Introduction Strategic roadmap Bombardier Transportation integration Henri Poupart-Lafarge, Chairman and CEO
Slide 11: Alstom in Motion strategy fully on track
2019-2021: Alstom in Motion strategy fully on track Growth Efficiency 1.15 STRONG MARGIN GAINS LINKED TO OPERATIONAL EXCELLENCE IMPLEMENTATION AND SOLID EXECUTION BOOK-TO-BILL RATIO AVERAGE1 +50bps +3pp 8.0% SALES CONTRIBUTION OF SERVICES & 7.7% SIGNALLING2 7.5%3 M&A FY 2018/19 FY 2019/20 FY 2020/21
Slide 12: Extending Alstom in Motion to 2025, powered by our new scale
Extending Alstom in Motion to 2025, powered by our new scale © ALSTOM SA 2021. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This wi
Slide 13: A comprehensive and best-in-class portfolio positioning Alstom ahead of the game
A comprehensive and best-in-class portfolio positioning Alstom ahead of the game COMPLETE PORFOLIO WITH EXTENDED REACH BEST SELLERS IN + ALL PRODUCT LINES 6 Bn€ orders since launch REGIONAL (CORADIA™) Maintenance DELIVERING HIGH + Urban signalling PERFORMING PRODUCTS ATLAS ETCS Strategic products an
Slide 14: A unique global-local footprint to respond to growing demand for localisation
A unique global-local footprint to respond to growing demand for localisation while delivering competitiveness “Customers are looking for reliable, tailored and competitive solutions delivered close to them” PROXIMITY ILLUSTRATION Commercial reach in 70+ countries Rolling Stock & Components key site
Slide 15: Alstom best positioned to capture growth in key geographies
Alstom best positioned to capture growth in key geographies Alstom Market share1 Assets highlight France and Southern CONSOLIDATE Europe3 Extensive market coverage on all segments with high POSITION AS (~13 Bn€2) customer intimacy NATURAL LEADER USA & Canada Tailored product portfolio & large existi
Slide 16: Strong assets and clear strategy for each product line
Strong assets and clear strategy for each product line Rolling Stock & Turnkey Signalling Services • Technological leadership in ETCS • Most innovative products • Widest installed base – 150,000 cars • Presence in strategic markets • Strong Alstom execution track record • High performing digital sol
Slide 17: Largest R&D scale of the industry and strong innovation pipeline
Largest R&D scale of the industry and strong innovation pipeline A sustained R&D effort1 … to extend innovation leadership in 3 areas “Lead societies to a low carbon GREEN future” 302 MOBILITY ECO-DESIGN 550-600 GREEN TRACTION CIRCULARITY / SMART M€2,3 M€ ENERGY SYSTEMS SALES2 SALES3 “Make mobility
Slide 18: Alstom leading the way in green traction mobility
Alstom leading the way in green traction mobility LARGE GREEN TRACTION DEMAND LEADER BY FAR, ENABLED BY PUBLIC SUPPORT ALSTOM COMPLETE OFFERING AND MORE TO COME 8 EU countries announcing diesel bans ~46% non-electrified lines in Europe Hydrogen train program Eversholt Rail Trial operations 1st Passe
Slide 19: Digitalisation core to future performance
Digitalisation core to future performance CRITICAL ROLE OF DATA IN THE RAIL INDUSTRY ALSTOM RECENT DIGITAL BREAKTHROUGHS ENRICH SOFTWARE TO IMPROVE PERFORMANCE Tendered in Shenzhen World-first implementation and Lille for Métropole Européenne de Lille ACCELERATE RAIL DATA ENHANCE KNOWLEDGE OF URBALI
Slide 20: Continued transformation momentum extended to 2025, with clear targets
Continued transformation momentum extended to 2025, with clear targets TOMORROW FY 2020/21 EXTEND DIGITALISATION TO THE GLOBAL SCOPE - 2024/25 • Deploy Alstom digital suite +20pp Digitalised processes • Leverage scale to invest and accelerate • Boost automation 100% Core model deployed to new group
Slide 21: Alstom's DNA dedicated to making the world more sustainable
Alstom’s DNA dedicated to making the world more sustainable 2025 TARGETS ENABLING ● 25%1 energy reduction in solutions decarbonisation of mobility ● 100% of newly-developed solutions eco-designed ● 100% electricity supply from renewables2 ● Alstom committed to science-based targets within the frame
Slide 22: Bombardier transportation integration
1.3 Introduction Strategic roadmap Bombardier transportation integration Henri Poupart-Lafarge, Chairman and CEO
Slide 23: Significant progress in 5 months
Significant progress in 5 months ~6 Bn€ OF ALSTOM ORDERS WON OVER Q1 ● One organisation Selection of wins deployed as per Target – 90% 1.4 bn€ 1.0 bn€ employees positive about Bombardier Transportation acquisition DSB FREMTIDENS TOG (REGIONAL - DEN) TREN MAYA (TURNKEY - MEX) ● Product and process co
Slide 24: A clear roadmap for Bombardier Transportation integration
A clear roadmap for Bombardier Transportation integration PRIORITIES Complete stabilisation of challenging Achieve ONE group, with operating model Ready to fully leverage the significant Bombardier Transportation legacy backlog deployed and best-in-class converged geographical, industrial and produc
Slide 25: Rolling Stock & Components
2 Rolling Stock & Components Danny Di Perna, Executive VP and Chief Operating Officer Benjamin Fitoussi, President Rolling Stock and Components – Development & Operations 25
Slide 26: Alstom | The market leader in Rolling Stock & Components
Alstom | The market leader in Rolling Stock & Components RSC IS A LARGE AND STEADY MARKET ALSTOM #1 GLOBAL PLAYER UNIFE accessible market 2020-2022 (WRMS 2020) – Average in Bn / year 33%4 5% 8% 30% Regional /Suburban HS/VHS 10% 12% 11% Urban Light Rail 5% +1.6%³ 5% 4% 11% €45 bn Wagons Coaches Locom
Slide 27: Our Ambition | Create value for customers & stakeholders
Our Ambition I Create value for customers & stakeholders Leverage scale & Develop technology & Deliver quality products Achieve profitable growth & broad portfolio sustainable solutions on time to customers create stakeholder value Win Orders Lead Industry Execute Market Share © ALSTOM SA 2021. All
Slide 28: An industry leading product portfolio
An industry leading product portfolio COMBINED PLATFORM & TECHNOLOGIES ENABLES COVERING BOTH CUSTOMISATION & STANDARDISATION ALL SEGMENTS Avelia™ Capacity Locomotive Coradia™ Traxx™ Metropolis™ Innovia™ Avelia™ Innovia™ Metro Suburban Movia™ High & very high-speed Citadis™ Flexity™ Regional & interc
Slide 29: Component building blocks drive competitiveness & product performance
Component building blocks drive competitiveness & product performance BROADEST COMPONENT COMPLETE SPECTRUM OF VERTICALISED WITH SELECTIVE PORTFOLIO IN THE INDUSTRY GREEN & CLEAN SOLUTIONS RECENT M&A Bogies & Drives H2 Fuel Cell Vertical integration of Brakes core components and key technology bricks
Slide 30: Capitalise on our best-selling platforms to profitably grow: Urban focus
Capitalise on our best-selling platforms to profitably grow Urban focus ▪ Flexity & Citadis products cover all market needs Light Rail ▪ A competitive offering for AMERICAS, the US market EUROPE ▪ Integrate and optimise Movia & Metropolis product for India Urban INDIA, ▪ Leverage portfolio of sub- E
Slide 31: Capitalise on our best-selling platforms to profitably grow: Mainline focus
Capitalise on our best-selling platforms to profitably grow Mainline focus ▪ Capitalise on Coradia Stream platform flexibility for SD & high-capacity DD Regional ▪ Leverage Green Traction EUROPE, leading position (Hydrogen DACH, & battery) AMERICAS ▪ Avelia Horizon, game- changer cost of ownership M
Slide 32: Our new combined asset portfolio strengthens value offering to customers
Our new combined asset portfolio strengthens value offering to customers Platform Components Production site Award TREN MAYA - MEXICO 42 suburban trains & railway systems: ▪ 31 stations X`TRAPOLIS FLEXX ECO BOGIE SAHAGUN, MEXICO ▪ 1,485 km MUMBAI - INDIA 234 metro cars for Metro Line 4 & 4A : ▪ 34 s
Slide 33: Continuous differentiation through innovation
Continuous differentiation through innovation Constant focus on the performance for the benefit of all customers TCO1 systematic approach Purchase cost, maintenance, reduced track load, energy savings through traction efficiency AVELIA™ HIGH-SPEED Healthier mobility and passenger experience +20% sea
Slide 34: Project stabilisation progressing
Project stabilisation progressing OBJECTIVES MEASURES BEING IMPLEMENTED SPECIFIC TASKFORCE ON MOST CRITICAL PROJECTS • Solve technical issues during development • Mobilisation of technical expertise • Review of all customer requirements • Accelerate development phase in engineering and manufacturing
Slide 35: Increased competitiveness by leveraging product capabilities
Increased competitiveness by leveraging product capabilities “Best-of-both” on vehicle architecture, components and technologies BEST COMPONENT SELECTION MAKE VS BUY INTERIOR AND ELECTRICAL Bogie/Drive, Traction, TC&IS Leverage Alstom make capabilities Leverage Alstom development ● Agate 4 to increa
Slide 36: Procurement as a clear synergy and competitiveness lever
Procurement as a clear synergy and competitiveness lever Alstom RSC Procurement >20k suppliers 80% of spend with 1k suppliers April ‘21 March ‘23 Leading Together Volume pooling with strategic partners Kick-off Specification optimisation & standardisation Consolidated collaborative Demand Management
Slide 37: Operate as ONE by March 2022, fully digitalised by 2025
Operate as ONE by March 2022, fully digitalised by 2025 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Aligned KPIS & DATA A WW CONNECTED OPERATIONS NETWORK with common processes and structures MANAGEMENT Digital systems boosting process alignment & performance Aligned 26 CRITICAL PROCESSES ● Engineering: ▪ Di
Slide 38: Digitalisation enabling continuous efficiency improvement
Digitalisation enabling continuous efficiency improvement ENGINEERING AUTOMATION SITE AUTOMATION & DIGITALISATION Robotic Process Automation • 250m3 of water saved/year • Leverage AI to automate tasks / • Process fully repeatable processes • Leakage detection assistance TRACTION CASE AUTOMATIC WATER
Slide 39: Operational excellence throughout our value chain
Operational excellence throughout our value chain Development & Procurement Manufacturing Project Management & Supply Chain • Project Management • Supplier performance • Right first-time quality set-up by sub-system management culture • Design for quality / new • Logistics & Supply Chain • Asset uti
Slide 40: Increased efficiency by leveraging scale & site specialisation
Increased efficiency by leveraging scale & site specialisation ~26,000 ~7,000 OPERATION TRAIN SYSTEMS EMPLOYEES & DESIGN ENGINEERS DERBY LA ROCHELLE >60% MANUF. IN BCC HORNELL 22 MADHEPURA COUNTRIES PRODUCTION 10 SITES LEADING RS ENGINEERING SITES 40% SHARE LA POCATIERE DEVELOPMENT QINGDAO IN INDIA
Slide 41: Our focus and journey ahead
Our focus and journey ahead ❶ Market leading « Green Mobility » solutions provider ❷ Integration enables customer value: product & component portfolio, global scale & process discipline ❸ Enhance market competitiveness, through design standardisation & operational cost focus ❹ Project Execution: Qua
Slide 42: Signalling
3 Signalling Jean-François Beaudoin President, Digital and Integrated Systems 42
Slide 43: Signalling technology responds to key concerns of rail operators
Signalling technology responds to key concerns of rail operators, supporting a strong market outlook Strong underlying drivers A fast-growing signalling market1 Accessible market 2024-25 in €bn (rounded value) Increasing capacity on existing infrastructure 2 0.7 MARKET: €14.9BN Improving reliability
Slide 44: Alstom has delivered strongly during the last two years
Alstom has delivered strongly during the last two years ALSTOM DELIVERING GROWTH AND PROFITABILITY WITH EXCELLENT TRACK RECORD UPLIFT TO ITS SIGNALLING ACTIVITIES1 FOR KEY TECHNOLOGIES Fiscal year sales CAGR +7% 1.5 Bn€ SINGAPORE: world’s longest underground driverless metro SIGNALLING 1.3 Bn€ PROFI
Slide 45: With Bombardier Transportation, Alstom signalling acquires a new dimension
With Bombardier Transportation, Alstom signalling acquires a new dimension ~2.1 Bn€ COMBINED SALES OVER 13,000 COMBINED HEADCOUNT Alstom Digital Bombardier Transportation Bombardier Transportation legacy Mobility Rail Control Solutions & 32% Pro Forma Wayside Alstom legacy revenues1 ~9,000 + ~4,000
Slide 46: Alstom will leverage its assets to continue its growth dynamic
Alstom will leverage its assets to continue its growth dynamic on a larger scale 2025 ambition: COMPLETE TECHNOLOGICAL #1 in COMPETITIVE signalling LEADERSHIP OFFERING SALES GROWTH Best in High Class GLOBAL FOOTPRINT STRONG single digit Profitability MARKET LEVERAGING POSITIONING BCC1 Sales growth C
Slide 47: Mainline: Leverage geographical complementarities and latest ETCS technology
Mainline: Leverage geographical complementarities and latest ETCS technology A fast growing market Alstom’s key assets ● Strong position in all strategic markets thanks to Alstom / Bombardier Transportation complementarities BOMBARDIER CONTRIBUTION >5% Market CAGR 2020/25 Homologated Market Market S
Slide 48: Urban: Deliver a competitive value proposition
Urban: Deliver a competitive value proposition based on global footprint and technological leadership A market favourable to large, sophisticated players Alstom’s key assets Alstom market leader Technological leader with the most innovative product on the market today: train-to-train driverless CBTC
Slide 49: Services: Build the industry-leading digital services solutions
Services: Build the industry-leading digital services solutions for our customers and harvest our huge installed base Fast growth Strong market drivers Alstom’s key assets trajectory x2 sales in ● Bombardier Transportation the past increases the already significant installed base by ~50% 2 years Exp
Slide 50: Innovation and smart products core to continued leadership
Innovation and smart products core to continued leadership DIGITALISATION OF PORTFOLIO AUTONOMOUS TRAINS CYBERSECURITY ● Technological leadership on highest grades of automation (3/4) for both passenger and freight trains ● Up to 45% energy saving, up to 20% capacity increase ● Complete autonomy pro
Slide 51: Efficiency driven by continued transformation and synergies
Efficiency driven by continued transformation and synergies Leverage unparalleled Drive R&D and engineering Digitalisation footprint boosted by BCC1 standardisation of operations ● Best in class profitability & growth ● Digitalisation of processes and potential: efficiency gains ▪ 3 major engineerin
Slide 52: Key takeaways
Key takeaways ❶ Very positive market perspectives, with growing need for more efficient transport systems ❷ Complete offering with reinforced portfolio, global presence and best in class innovative solutions ❸ Profitability improvement benefiting from scale effect, best cost countries footprint and
Slide 53: Services
4 Services Services Matthew Byrne, President, Services 53
Slide 54: A growing, profitable services market with untapped potential
A growing, profitable services market with untapped potential Services long-term drivers Rail Services market characteristics: Market liberalisation in Europe • Long-term contracts 20+ years Drive of sustainable, green mobility >37bn€ • Low execution risk due to stable technology serviced Rise in PP
Slide 55: Alstom is the undisputed leader in rail services
Alstom is the undisputed leader in rail services ALSTOM #1 IN A COMPETITIVE MARKET1 OUTSTANDING TRACK-RECORD In € - Sales based on latest published figures Last year flagship projects 3.2 Bn SYTRAL – Lyon Tram Delhi – Meerut RRTS Global competitor 1 1.3 Bn Overhaul of Lyon’s trams (France) New build
Slide 56: Extensive portfolio and footprint covering the whole asset lifecycle
Extensive portfolio and footprint covering the whole asset lifecycle Solutions portfolio across the whole asset lifecycle ALL ENCOMPASSING PORTFOLIO Trusted partner to our client with a portfolio covering the whole asset lifecycle • Combining strengths in parts business BUILD OPERATION Product intro
Slide 57: Alstom Services renewed ambition
Alstom Services renewed ambition “Deliver enhanced value to customers every day” INNOVATION AS A MEANS TO… ● Finetune offering to individual customers specific needs ● Use the size to enhance and expand premium positioning ● Drive partnerships and M&A DRIVE SERVICES OPERATIONAL SOLID MID EXCELLENCE
Slide 58: Strong growth through enhancement and expansion of premium positioning
Strong growth through enhancement and expansion of Alstom’s premium positioning Alstom’s Four Services growth levers ENHANCE EXPAND Develop Maintenance business Grow operations outside 1. and leverage installed base 3. of North Americas Increase globalisation of Parts & 2. Component Repairs & Overha
Slide 59: Alstom is best placed to capture the potential of the maintenance market
ENHANCE Alstom is best placed to capture the potential of the maintenance market 1. ALSTOM’S UNIQUE VALUE PROPOSITION… … SECURING FUTURE SALES AND MAINTAINING GROWTH FULL DEDICATION to our client and holistic view on their Book-To-Bill Ratio Contracts 20+ years services needs to reach outstanding sy
Slide 60: Expansion of parts & overhaul services with a clear plan
ENHANCE Expansion of parts & overhaul services with a clear plan 2. Alstom Parts & Overhaul WORLDWIDE Transformation Transformation Program for growth COMPONENT SERVICE existing parts hub extension CENTRES: Combine portfolio and streamline processes Brakes Getafe x2 x12 Traction Sesto Centralised In
Slide 61: Grow Alstom's Train Operations business beyond North America
EXPAND Grow Alstom’s Train Operations business beyond North America and APM segment selectively 3. Alstom’s train operations business… … relies on a solid track record in NAM… … to selectively grow 99.5+% #1 GLOBAL SYSTEM PRIVATE OPERATOR AVAILABILITY IN NORTH AMERICA More O&M Why? concessions on th
Slide 62: Services growth driven by smart & green modernisation
EXPAND Services growth will additionally be driven by smart & green modernisation 4. Enhance smart & green modernisation CLIENT EXAMPLE ILLUSTRATION OF FRANCE SNCF AGC TRAIN UPGRADE Upgrade of fleets for up to + 20 years of life • Conversion from diesel traction to 0 Emissions battery traction 5 tra
Slide 63: People, partnerships, innovation and digital solutions enable additional value
People, partnerships, innovation and digital solutions will enable additional value delivery for our customers People as differentiator Strong track record Digital solutions and innovation as enabler for services excellence in acquisitions for value creation Transport Operators Maintainers OEM Verti
Slide 64: Alstom's new group scale and capabilities will boost competitiveness
Alstom’s new group scale and capabilities will boost competitiveness INTEGRATION ON TRACK HIGHLY SKILLED WORKFORCE OPERATIONAL EXCELLENCE TO DELIVER VALUE AS CORE OF SERVICES FOR MAXIMISED PERFORMANCE EXCELLENCE ● High customer intimacy with +15,000 employees in over 40 countries ● Full ownership an
Slide 65: Key takeaways
Key takeaways ❶ Very dynamic services market with significant untapped potential ❷ Undisputed leader with organisation ready for growth capture ❸ New scale to enhance and expand our agile and premium positioning boosting value creation “Deliver enhanced value to customers every day” © ALSTOM SA 2021
Slide 66: Financial framework
5 Financial framework Laurent Martinez, Chief Financial Officer © ALSTOM SA 2021. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This
Slide 67: Alstom delivering on its AiM strategic plan despite unprecedented crisis
Alstom1 delivering on its AIM strategic plan despite unprecedented crisis INDUSTRY LEADING BACKLOG STRONG SALES LEVEL In €bn 42.5 In €bn 8.1 8.2 40.5 40.9 7.7 FY 2018/19 FY 2019/20 FY 2020/21 FY 2018/19 FY 2019/20 FY 2020/21 CONTINUOUS INCREASE OF PROFITABILITY FREE CASH FLOW aEBIT margin In €m 8.0%
Slide 68: Extending Alstom in Motion to 2025, powered by our new scale
Extending Alstom in Motion to 2025, powered by our new scale Leading the way to greener and smarter mobility, worldwide GROW INNOVATION DELIVER by offering by pioneering smarter at scale greater value and greener mobility powered to customers solutions for all by digital Driven by One Alstom team, A
Slide 69: Above market growth for all product lines, supporting strong sales uplift
Above market growth for all product lines, supporting strong sales uplift by 2024/25 AIM 2025 targets In €bn > 5% CAGR 20/21 - 24/251 Rolling Stock & Systems Above market growth 14 Services Strong mid single digit growth FY 2020/21* FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 Signalling High single
Slide 70: Profitability improvement towards best-in-class level
Profitability improvement towards best-in-class level aEBIT VOLUME In % ● Solid top line growth ● Cost control on S&A and R&D 8-10% MARGIN & EFFICIENCY ● Operational excellence c.5%* Synergies ● Projects execution and stabilisation Margin & ● Improving gross margin on new orders Volume Efficiency ●
Slide 71: Clear roadmap launched to achieve €400M cost synergies run rate
Clear roadmap launched to achieve €400 cost synergies run rate1 EXPECTED RAMP UP OF SYNERGIES FINANCING SYNERGIES ● Lower financing costs linked to alignment of ~15% Bombardier Transportation legacy financing costs €400 run rate to Alstom level synergies1 PROCUREMENT SYNERGIES ● Commercial power, su
Slide 72: Prioritisation on project stabilisation leading to negative Free Cash Flow in 2021/22
Priorisation on project stabilisation measures leading to significant negative Free Cash Flow in 2021/22 Priority on stabilisation of challenging Short term focus on projects stabilisation leading projects in 2021/22 through: to cash outflows in H1 2021/22, and securing positive FCF as of H2 2021/22
Slide 73: Above 80% Free Cash Flow conversion from Net Income from 2024/25
Above 80% Free Cash Flow conversion from Net Income1 from 2024/25 onwards DELIVERY PERFORMANCE DRIVEN BY SOUND PROJECT EXECUTION ABOVE 80% WORKING CAPITAL STABILISATION CAPEX REDUCTION TOWARDS 2% FCF OF SALES CONVERSION from 2024/25 onwards CASH FOCUS PROGRAMME (Tender golden rules, inventory manage
Slide 74: Disciplined capital allocation policy
Disciplined capital allocation policy to protect financial flexibility, pursue growth opportunities and fairly reward our shareholders Commitment to Investment Grade profile Focused bolt-on M&A Sustained shareholder return of 25%-35% payout1 1. Adjusted net income © ALSTOM SA 2021. All rights reserv
Slide 75: Multiple drivers to deliver value generation for shareholders
Multiple drivers to deliver value generation for shareholders STRONG VALUE CREATION EARNING PER SHARE1 EVOLUTION ● Sales: above 5% CAGR growth between 2020/21 and 2024/251 ● Margin improvement driven by synergies and operational excellence ● Positive contribution from Joint Ventures EPS 2020/21 EPS
Slide 76: Key takeaways
Key takeaways AiM 2025 Mid-term financial targets • Sales above 5% CAGR between 2020/21 ✓ Sales uplift supported by strong market and 2024/251 momentum, and solid backlog • Adjusted EBIT margin between 8% to 10% ✓ Leading profitability through efficiency and from 2024/25 onwards sound execution • Co
Slide 77: Conclusion
Conclusion Henri Poupart-Lafarge, Chairman and Chief Executive Officer 77
Slide 78: Unique assets and opportunities ensuring Alstom's continuous growth
Unique assets and opportunities ensuring Alstom’s continuous growth Mid-term targets MARKET SHARE ❶ Unprecedented market dynamics +5pp 1 ❷ Best positioned to capture customer SALES CAGR demand, leveraging unique geographical >5%2 presence and product line assets ❸ Innovation leadership as key differ
Slide 79: Alstom: Leading the way to greener and smarter mobility, worldwide
Alstom : Leading the way to greener and smarter mobility, worldwide © ALSTOM SA 2021. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project.
Slide 80: Questions and answers session
Questions and answers session 80
Slide 81: Appendix - Non-GAAP financial indicators definitions
Appendix 1 - 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
Slide 82: Appendix - Non-GAAP financial indicators definitions
Appendix 1 - Non-GAAP financial indicators definitions ● Adjusted Net Profit Following the Bombardier Transportation acquisition and with effect from these Fiscal year 2020/21 consolidated financial statements, Alstom decided to introduce the “adjusted net profit” indicator aimed at restating its ne