Alstom Sa · EURONEXT:ALO
Alstom Sa — FY2022/23 Earnings Presentation
52 slides from Alstom Sa's earnings presentation, May 10, 2023
Slide 1: Full Year Results Fiscal Year 2022/23
Full Year Results Fiscal Year 2022/23 10 May 2023
Slide 2: 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 3: Agenda
Agenda FY 2022/23 Highlights Henri Poupart-Lafarge, Chairman and CEO ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― Financial Results Laurent Martinez, Chief Financial Officer ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― Trajectory and outlook
Slide 4: FY 2022/23 Highlights
1 FY 2022/23 Highlights Henri Poupart-Lafarge Chairman and CEO
Slide 5: Highlights – A global leader in a buoyant market
Highlights – A global leader in a buoyant market MARKET MOMENTUM CONFIRMED BT ACQUISITION A GAME CHANGER ALSTOM UNDISPUTED GLOBAL MARKET LEADER LEGACY CONTRACTS STABILIZATION DONE, ACCELERATING INTEGRATION CUSTOMER SATISFACTION RESTORED SYNERGIES ON TRACK QUALITY OF NEW ORDERS SINCE MERGER © ALSTOM
Slide 6: Highlights – Financial Results delivered
Highlights – Financial Results delivered FY 2022/23 RESULTS FULLY IN LINE WITH GUIDANCE FY 2023/24 OBJECTIVES : • aEBIT : ~6% • FCF : Significantly positive MID-TERM TARGETS TO BE REACHED IN FY 2025/26 MAINLY DUE TO MACRO ENVIRONMENT © ALSTOM SA 2023. All rights reserved. Information contained in th
Slide 7: Solid FY 2022/23 results, fully in line with guidance provided
Solid FY 2022/23 results, fully in line with guidance provided ORDERS SALES €20.7bn €16.5bn 179 892 kton GWh Scope 1+2 Energy Book-to-bill +7% Emissions1 consumption1 1.25 vs FY 2021/22 (22)% vs FY 2021/22 (11)% vs FY 2021/22 aEBIT FREE MARGIN CASH FLOW 5.2% €199m 59 23.9 % % Taxonomy Women in +20bp
Slide 8: Market opportunities underpinned by a strong business case for operators
Market opportunities underpinned by a strong business case for operators and continuous stimulus packages GLOBAL RIDERSHIP LEVEL 2019 - 2022 ~ 90% recovery vs. pre-Covid levels Base 100 Upside Potential €43 bn ERTMS1 roll-out €100 bn FRANCE rail plan India Government support to Railways €27 bn stron
Slide 9: Market potential confirmed on all product lines: > €220bn until FY 2025/26
Market potential confirmed on all product lines: > €220bn until FY 2025/26 ALSTOM SITES +5%1 €105bn SIGNALLING +3%1 EUROPE SYSTEMS ROLLING STOCK €36bn AND COMPONENTS AMERICAs EUROPE: Rolling stock and ETCS in DACH, Regional trains in Italy, Romania, Nordics… CANADA €53bn x21 RER Toronto Urban projec
Slide 10: Solid Order intake supporting trajectory
Solid Order intake supporting trajectory ORDERS FY 2022/23 (in €bn) +7% 20.7 20.7 19.3 20.7 AMECA Signalling 2.2 2.9 Systems 3.0 APAC 1.0 Americas 2.7 Services 6.4 12.8 Europe Rolling stock 10.4 FY 2021/22 FY 2022/23 FY 2022/23 FY 2022/23 ● > €40bn orders since merger ● Book-to-bill 1.25, backlog ab
Slide 11: Contract win momentum
Contract win momentum €10.6 billion of orders booked in H2 2022/23 Signalling and Operations & Maintenance Options on frame agreements Systems €0.3 bn Newark (SERVICES - US) E-loco KTZ 6th batch (LOCOS & MAINTENANCE- RER Toronto (Turnkey – Canada) Kazakhstan) €1.0 bn €0.2 bn MARC (SERVICES - US) RER
Slide 12: Strong sales progress, driven by Systems and Services
Strong sales progress, driven by Systems and Services SALES FY 2022/23 (in €bn) FY 2022/23 SALES SPLIT BY PRODUCT LINES +7% ROLLING STOCK: €8,784m (+2% vs FY 2021/22) 16.5 Continued execution of large projects mainly in Europe 15.5 SERVICES: €3,817m (+12% vs FY 2021/22) Growth in Europe maintenance
Slide 13: Progress on carbon reduction Scopes 1 and 2
Progress on carbon reduction Scopes 1 and 2 SCOPE 3 EMISSIONS- use of Sold Products SCOPE 1 & 2 EMISSIONS (in ktCO2) (in g.CO2/passenger.km and g.CO2/freight-ton.km) (22)% 230 9.2 9,2 179 138 5.9 4.6 4.6 2.7 FY 2021/22 FY 2022/23 FY 2030/31 FY 2021/22 FY 2022/23 FY 2030/31 Freight Actual Freight Tar
Slide 14: EU Taxonomy Alignment
EU Taxonomy Alignment – our contribution to decarbonisation of transport EU Taxonomy - Sales Sales Capex Opex Alignment Strong results Alignment: 59% Alignment: 54% Alignment: 47% Eligibility: 100% Eligibility: 100% Eligibility: 100% 0% Eligibility 100% CAC 40 Average Capital Goods Average Source: A
Slide 15: Positive progress on Commitments to Society
Positive progress on Commitments to Society KPIs March 2023 March 2025 ● Energy reduction in solutions1 23.4% 25% ENABLING ● Electricity supply from renewables 57% 100%2 decarbonisation ● % of newly-developed solutions eco-designed 65% 100% of mobility ● % of circular (recycled) content in newly-dev
Slide 16: Accelerating Innovation
Accelerating Innovation GREEN TRACTION DIGITAL NEW PLATFORMS IPCEI on H2 LEVERAGE TECHNOLOGICAL ADVANTAGE 5.2% Cybersecurity Train autonomy High Speed, Urban BEST-IN-CLASS IN ALL GEOGRAPHIES GET READY FOR DEMAND INCREASE BOOST PORTFOLIO WITH MOST INNOVATIVE SOLUTIONS R&D investment to reach 3.5% of
Slide 17: Financial Results
2 Financial Results Laurent Martinez Chief Financial Officer
Slide 18: Strong commercial momentum driving sales and aEBIT trajectory
Strong commercial momentum driving sales and aEBIT trajectory FY FY (in € million) Evolution 2021/22 2022/23 Sales 15,471 16,507 +7% Cost of Sales (13,323) (14,182) +6% Adjusted Gross Margin before PPA¹ 2,148 2,325 +20bps As a % of sales 13.9% 14.1% Research and development expenses (530) (519) befo
Slide 19: Profitability bridge FY 2021/22 to FY 2022/23
Profitability bridge FY 2021/22 to FY 2022/23 aEBIT (in %) 5.0% 60bps 20bps 30bps (90) bps 5.2% In line with guidance provided © ALSTOM SA 2023. 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 co
Slide 20: Inflation peak in FY2022/23
Inflation peak in FY2022/23 Strong action plan in place, impact moderating thereafter IMPACT ON MARGIN ON FY 2022/23 AND ONWARDS 90 bps 70 – 80 < 40bps bps MAIN LEVERS FY 2022/23 FY 2023/24 FY 2025/26 Backlog indexation 71% Continuous increase in backlog indexation + 80% Salary negotiations complete
Slide 21: aEBIT to Net Income
aEBIT to Net Income FY FY (in € million) Evolution 2021/22 2022/23 Sales 15,471 16,507 +7% Adjusted EBIT 767 852 +11% Adjusted EBIT margin 5.0% 5.2% +20bps Restructuring and rationalisation costs (138) (65) (53)% Integration costs €181m Integration, acquisition and other costs (209) (279) +33% Legal
Slide 22: Free Cash-flow of c. €200m driven by profit increase
Free Cash-flow of c. €200m driven by profit increase From EBIT* to Free Cash Flow (in € million) Restructuring Capex FY 2022/23 Change in Working EBIT* Capital1 R&D D&A Financial Cash capitalised Out Tax Cash Out FY 2022/23 FCF JVs dividends Others, o/w: Share-based payments €66m Remedies €30m * EBI
Slide 23: Working Capital evolution reflecting activity growth
Working Capital evolution reflecting activity growth 31 March 31 March (in € million) Variation 2022 2023 ● Overall evolution consistent with activity growth Contract assets 3,846 4,533 +687 and production ramp-up Inventories 3,274 3,729 +455 ● Contract liabilities driven by healthy downpayments Con
Slide 24: Sound and stable liquidity position
Sound and stable liquidity position (IN € MILLION) 4,787 Undrawn Backstop RCF maturing Jan. 2028 with 1-year extension remaining 2 2,500 ● No financial covenants on any debt Undrawn Liquidity RCF maturing Jan. 2026 with 1-year extension remaining 2 ● €248m Neu CP as of March 2023 (vs. €250m as of Ma
Slide 25: Net debt evolution
Net debt evolution (in € million) (2,085) (2,135) FCF Dividends Leases Remedies, FX and others 31 March 2022 Net cash/(debt) 31 March 2023 Net cash/(debt) © ALSTOM SA 2023. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or shoul
Slide 26: Favorable long-term debt profile
Favorable long-term debt profile OUTSTANDING BONDS (IN € MILLION) POSITIVE IMPACT OF INTEREST RATES Jan-29 AVERAGE Oct-26 Jul-30 (23)% 0.00% MATURITY 0.25% 0.5% 5.4 years Jul-27 0.125% AVERAGE COUPON (10)% 700 750 700 1,203 0.22% 923 500 351 316 2026 2027 2028 2029 2030 2031 Under funded plans liabi
Slide 27: FY2022/23 dividend stable
FY2022/23 dividend stable DIVIDEND Dividend1 of 0.25€ per share with 33% payout ratio2 2022/23 will be proposed to the next shareholders’ meeting 1 Option for scrip dividend will be proposed 2 The pay-out ratio is calculated by dividing the amount of the overall dividend with the Adjusted net profit
Slide 28: Trajectory and outlook
3 Trajectory and outlook Laurent Martinez CFO
Slide 29: Sales trajectory in line with previous guidance
Sales trajectory in line with previous guidance SALES (IN € BILLION)¹ > 5% CAGR FY 2020/21 to FY 2025/26 ▪ Growth expected to be well balanced between volume and value ▪ €38 to €40bn sales of next three years secured from backlog 15.5 16.5 14 ▪ Contribution from all product lines FY 2020/21 FY 2021/
Slide 30: Improved backlog quality consistent with mid-term guidance
Improved backlog quality consistent with mid-term guidance Quality of order intake €16.5bn ● Margin on new orders within 8% - 10% aEBIT range Sales from new orders ● Gross Margin in backlog on-track to progress at 50bps per booked since April 2021 annum Gradual decrease of legacy backlog ● Ramp-down
Slide 31: Synergies on-track with announced trajectory
Synergies on-track with announced trajectory SYNERGIES RUN RATE (IN € MILLION)1 2025/26 SOURCES OF UPLIFT2 475-500 400 BONDS FINANCING ● Incremental industrial PROCUREMENT efficiency and best REAL ESTATE use of products through massification 205 MANAGEMENT OVERLAPS ● Incremental FOOTPRINT procuremen
Slide 32: From improved sales mix to improved margin
From improved sales mix to improved margin aEBIT (in %) 8% - 10% 30-40 60-70 bps 80-90 bps bps 10-20 (30-40) 10-20 bps 20-30 bps 50-60 bps bps bps 5.2% ~6% Improved margin predictability © ALSTOM SA 2023. All rights reserved. Information contained in this document is indicative only. No representati
Slide 33: EPS trajectory
EPS trajectory Adjusted Earnings Per Share1 KEY DRIVERS ● Integration costs decreasing to ~nil in FY 2025/26 ● Restructuring to significantly reduce ● FY 2022/23 one-offs not to be repeated next years: o Remedies divestments €0.77 o Legal fees o Financial and tax expenses to increase FY 2022/23 FY 2
Slide 34: Cash trajectory – Momentum towards 80% conversion
Cash trajectory – Momentum towards 80% conversion SHORT-TERM DRIVERS MID-TERM DRIVERS + aEBIT increase + aEBIT increase + Reduction costs of Integration + Reduction costs of Integration FY 2022/23 FY 2023/24 FY 2025/26 199m€ - Financial and Tax Significantly >80% positive conversion1 - Capex at 2% o
Slide 35: Conclusion
4 Conclusion Henri Poupart-Lafarge Chairman and CEO
Slide 36: Alstom business geared to 8-10% aEBIT and > 80% cash conversion
Alstom business geared to 8-10% aEBIT and > 80% cash conversion ● Book to bill above 1 ● CAGR1 on Sales above 5% Mid-term targets FY 2023/24 To be reached in FY 2025/26 ● aEBIT ~6% ● aEBIT 8 -10% ● FCF significantly positive ● FCF > 80% conversion2 The Group has based its FY 2023/24 outlook on a cen
Slide 37: Confirmed Leadership and significant de-risking of our portfolio
Confirmed Leadership and significant de-risking of our portfolio FY 2022/23 HIGHLIGHTS DELIVERED TAKE-AWAYS External POSITIVE INFLATION, CUSTOMER MARKET MARKET SUPPLY CHAIN, SATISFACTION LEADERSHIP MOMENTUM ELECTRONICS BUSINESS Internal FINANCIAL MODEL RESULTS RESILIENCE BT OPERATIONAL STABILIZATION
Slide 38: Contacts & Agenda
Contacts & Agenda CONTACTS AGENDA 10 May 2023 – 15.00 PM CET Alstom Investor Day 11 July 2023 Shareholders’ assembly Martin VAUJOUR VP Investor Relations 25 July 2023 First quarter FY23/24 Estelle MATURELL ANDINO orders and sales Deputy Head Investor Relations investor.relations@alstomgroup.com © AL
Slide 39: Financial Calendar – FY 2022/23 Roadshows
Financial Calendar – FY 2022/23 Roadshows May 11 FY 2022/23 Roadshow in London – Deutsche Bank London, UK May 12 FY 2022/23 Roadshow in Paris – ODDO BHF Paris, FRANCE May 15 FY 2022/23 Roadshow in Milano – Kepler Cheuvreux Milano, ITALY May 15 FY 2022/23 Roadshow in Frankfurt – Jefferies Frankfurt,
Slide 40: Financial Calendar – Where to meet us in 2023?
Financial Calendar – Where to meet us in 2023 ? June 7 CEO conference – BNPP Exane Paris, FRANCE June 9 European Capital Goods – JP Morgan London, UK June 12 – 13 Roadshow Asia – Tokyo – Mizuho Tokyo, JAPAN June 14 - 16 Roadshow Asia – Tapei/ Singapore/ Hong-Kong – HSBC Asia June 20 - 21 Investors S
Slide 41: Appendix
Rai o S ® 2. Q <x if i HT abd aaaia aaa aa siti f ALSTOM
Slide 42: FY 2022/23 backlog per regions and product lines
FY 2022/23 backlog per regions and product lines Backlog breakdown per regions (in € million) Backlog breakdown per product line (in € million) Systems €6,330m Asia Pacific 7% Signalling Americas €12,191m €7,510m €13,796m 14% 9% 16% Rolling stock €42,806m Africa, Middle East & Europe 49% Services Ce
Slide 43: FY 2022/23 Sales per regions and product lines
FY 2022/23 Sales per regions and product lines Sales breakdown per regions (in € million) Sales breakdown per product line (in € million) Systems €1,476m Asia Pacific €2,378m 9% 15% Signalling €2,430m 15% Americas €2,843m Europe €9,936m 17% 60% Rolling stock €8,784m Services €3,817m 53% 23% Africa,
Slide 44: Sales by currency
Sales by currency FY 2022/23 Currencies as a % of sales EUR 46.9% USD 13.5% GBP 12.0% AUD 4.9% INR 4.7% ZAR 2.7% SEK 2.6% CAD 2.2% SGD 1.4% CHF 1.2% MXN 1.2% Currencies below 1% of sales 6.7% © ALSTOM SA 2022. All rights reserved. Information contained in this document is indicative only. No represe
Slide 45: Equity in € million
Equity in € million * 9,024 9,102 9,117 March 2022 Other movements in Net income Dividends Capital increase Share based March 2023 other comprehensive payment income *capital increase by issuance of new shares linked with scrip dividend © ALSTOM SA 2022. All rights reserved. Information contained in
Slide 46: Bridge consideration – From Enterprise Value to Equity Value
Bridge consideration – From Entreprise Value to Equity Value (in € million) FY 2022/23 Total Gross debt, incl. lease obligations (1) 3 579 Pensions liabilities net of prepaid and deferred tax asset related to pensions (2) 582 Non controlling interest (3) 105 Cash and cash equivalents (4) (826) Other
Slide 47: Bombardier Transportation PPA provisional amortisation plan
Bombardier Transportation PPA provisional amortisation plan As per P&L (in € million) Booking 1 FY 2020/21 (71) FY 2021/22 (444) FY 2022/23 (451) Higher than previously forecasted due to impairments in Germany FY 2023/24 (368) FY 2024/25 (373) FY 2025/26 (264) FY 2026/27 (213) ● The Gross PPA amorti
Slide 48: Reconciliation between consolidated income statement and MD&A view, March 2023
Reconciliation between consolidated income statement and the MD&A management view as of 31 March 2023 Adjustments as of 31 March 2023: (in € million) Tota l Adjustments Tota l 1. Impact of business combinations: amortisation of Con s ol i da ted Fi n a n ci a l Con s ol i da ted Fi n a n ci a l asse
Slide 49: Reconciliation between consolidated income statement and MD&A view, March 2022
Reconciliation between consolidated income statement and the MD&A management view as of 31 March 2022 (in € million) Total Adjustments Total Consolidated Consolidated Adjustments as of 31 March 2022: Financial Financial Statements (1) (2) (3) (4) Statements (GAAP) (MD&A view) 1. Impact of business c
Slide 50: Non-GAAP financial indicators definitions (1/2)
Appendix - Non-GAAP financial indicators definitions (1/2) 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
Slide 51: Non-GAAP financial indicators definitions (2/2)
Appendix - Non-GAAP financial indicators definitions (2/2) ● EBIT before PPA Following 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 it
Slide 52: www.alstom.com
www.alstom.com www.alstom.com