Alstom Sa · EURONEXT:ALO
Alstom Sa — Investor Day (June 2019)
131 slides from Alstom Sa's investor day presentation, Jun 24, 2019
Slide 1: Alstom Capital Markets Day
Alstom Capital Markets Day Paris - France June 24 2019
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 by their nature subject to a number of important risk and uncertainty factors (such as those described in the documents filed by
Slide 3: Agenda
AGENDA 9:30-10:00 am ⚫ Welcome Coffee 2:00-3:30 pm ⚫ Signalling Jean François Beaudoin – Digital Mobility SVP ⚫ Services Bernd Burgstahler – Services VP 10:00-12:15 pm ⚫ Alstom today, market perspectives, ⚫ Innovation Strategy overview Marc Granger – CSO Henri Poupart-Lafarge – Chairman & CEO ⚫ Fina
Slide 4: Today's speakers
Today’s speakers Henri Poupart-Lafarge Laurent Martinez Thierry Best Ling Fang Chairman Chief Financial Operations Asia Pacific & Chief Executive Office Officer Senior Vice President Senior Vice President Jean François Beaudoin Bernd Burgstahler Marc Granger Digital Mobility Services Chief Strategy
Slide 5: Alstom today, Market perspectives, Strategy overview
Alstom today, Market perspectives, Strategy overview Henri POUPART-LAFARGE – Chairman & CEO 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 5 © ALSTOM 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on
Slide 6: Alstom today
Alstom today ALSTOM – 24/06/2019 – P 6 © ALSTOM 2019. 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 will depend on the technica
Slide 7: 2016 – 2019: establishing a successful rail pure player
2016 – 2019: establishing a successful rail pure player Alstom 2020 Strategy CUSTOMER-FOCUSED ORGANISATION COMPLETE RANGE OF SOLUTIONS VALUE CREATION THROUGH INNOVATION OPERATIONAL & ENVIRONMENTAL EXCELLENCE DIVERSE AND ENTREPRENEURIAL PEOPLE ALSTOM – 24/06/2019 – P 7 © ALSTOM 2019. All rights reser
Slide 8: The most global player, a leader in all geographies
The most global player, a leader in all geographies, result of outstanding growth Alstom within the top 3 market Growth outperforming the market share in every region1 Alstom sales, by region, in € Bn ALSTOM CAGR 5.5% Americas2 Asia Pacific Market4 #1 #2 2.3% 8.1 7.3 7.3 6.9 1.6 1.3 1.4 1.1 0.9 0.7
Slide 9: A unique multiregional footprint key to commercial success
A unique multiregional footprint key to the group’s commercial success and competitiveness Europe 21,400 Americas Sri City 5,200 USA Bangalore Asia Pacific India 5,200 Brazil Middle East Africa South Africa 4,500 Katowice 36,300 people in New regional hubs Best shoring Global M&A over 60 countries a
Slide 10: A diverse and innovative portfolio of solutions
A diverse and innovative portfolio of solutions New platforms and breakthrough innovations in all product lines Tramway Regional Regional ROLLING SYSTEMS SERVICES SIGNALLING STOCK High Speed Infrastructure Maintenance Mainline networks & Very High Speed Integrated Modernisation Urban networks Citadi
Slide 11: Strong project execution and ability to improve operational profitability
Strong project execution and ability to improve operational profitability Operational excellence Margin evolution Structural cost control Gross Margin on Order Intake, in % SG&A evolution contained despite fast growing sales (in €m) 2015/16 2018/19 As of % sales +15% On time delivery 2015/16 2016/17
Slide 12: Strategy 2020 largely a success, ready for the next step
Strategy 2020 largely a success, ready for the next step Record backlog in the industry, geared for sustainable growth Outperformed market and main competition’ growth Backlog in 2018/19 Sales 2015/161 – 2018/19 €40.5Bn €33Bn €30Bn 5.5% 5.3% 2.5% 2.3% Global Global Global Global Market Alstom compet
Slide 13: Market perspectives
Market perspectives ALSTOM – 24/06/2019 – P 13 © ALSTOM 2019. 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 will depend on the
Slide 14: Robust macro-economic drivers supporting steady growth of rail traffic
Robust macro-economic drivers supporting the steady growth of rail traffic Passenger traffic per market segment Sustainable Urbanisation development In basis 100 70% -60% Average growth (2015 – 2025) of urban population -60% CO2 emissions projected by 2050 expected in transport Urban by 2050 (vs.199
Slide 15: A positive rail manufacturing market outlook
A positive rail manufacturing market outlook Global rail OEM market, in € Bn Global rail OEM market, in € Bn CAGR CAGR +3.0% +3.0% LATAM TURNKEY 125 125 Uncertain momentum Strong potential 0.7 4.9 114 constrained by uncertain 114 9.5 momentum in MEA 0.6 MEA 4.5 25.1 7.6 INFRA Economic slowdown may 2
Slide 16: A more diverse set of clients
A more diverse set of clients Clients becoming more and more Longstanding clients partners National operators on traditional markets Demand shift towards: • Lower Total Cost of Ownership is becoming the rule • Higher demand for services contracts • Flexible Rolling Stock New business models emerging
Slide 17: Growing environmental concerns while rapid advancement of green technologies
Growing environmental concerns while rapid advancement of green technologies Multiplication of "diesel ban" Continued investment in hydrogen Increased availability Hydrogen Council: ~$10bn of green technologies investment (2017) Li-ion battery cell cost development, Copenhagen USD/kWh; 2016 - 2030 2
Slide 18: Digital revolution carrying changes in our industry
Digital revolution carrying changes in our industry Rapid progress in digital technologies… …Enabling new mobility solutions… … And impacting the rail value chain Big data ⚫ Data: new gold for all players Advanced analytics ⚫ Value in complex algorithms for maintenance, operations or Cloud customer
Slide 19: Convergence of rail-guided mobility and private individual vehicles
Looking further afield: convergence of rail-guided mobility and the world of private individual vehicles THE RAIL INDUSTRY IS ALREADY: Private, Public, individual, NEW collective, ⚫ High safety compliant road-based MOBILITY rail-guided solutions solutions shared ⚫ 50% electrified, and soon connected
Slide 20: Strategy overview
Strategy overview ALSTOM – 24/06/2019 – P 20 © ALSTOM 2019. 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 will depend on the te
Slide 21: Our mid-term ambition
Our mid-term ambition Be the leading global innovative player for a sustainable and smart mobility ALSTOM – 24/06/2019 – P 21 © ALSTOM 2019. 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 comple
Slide 22: AiM – Alstom in Motion: our strategic plan for 2019 - 2023
AiM – Alstom in Motion : our strategic plan for 2019 - 2023 GROWTH INNOVATION EFFICIENCY, by offering in smarter and powered by greater value greener mobility digital to our customers solutions Driven by One Alstom team, Agile, Inclusive and Responsible ALSTOM – 24/06/2019 – P 22 © ALSTOM 2019. All
Slide 23: Growth by offering greater value to our customers
Growth by offering greater value to our customers ◄ Leverage our recognised expertise and our customer intimacy worldwide ► SERVICES SIGNALLING ROLLING STOCK & SYSTEMS Become Gain product Grow profitably leveraging the undisputed leader and market leadership our new platforms #1 OR #2 IN OUR MARKETS
Slide 24: Services: become the undisputed leader
Services: become the undisputed leader Outstanding market potential Alstom best positioned with unique assets and excellent track-record Accessible market by 2023: ~€42bn1, ⚫ Installed base + 50,000 vehicles, only 1/5 clients have largely untapped service contracts today ⚫ Numerous success stories o
Slide 25: Signalling: gain product and market leadership
Signalling: gain product and market leadership Accessible Market Segment Breakdown1 NEXT PRIORITIES: UNIFE Accessible market ⚫ Leverage our assets to capture growth: Mainline: driven by Europe and ETCS upswing ✓ ETCS expertise URBAN: large ✓ Complex project know-how roll-outs planned 34% ✓ #1 in Chi
Slide 26: Rolling stock & Systems: leverage our new platforms
Rolling stock & Systems: leverage our new platforms to further expand Already a leading position in our markets1 NEXT PRIORITIES: Market shares 3Y Orders – March 19, in % ⚫ High technology products ⚫ Competitive on price (Total Cost 20% 17% 15% of Ownership) quality and time ⚫ Higher penetration 10%
Slide 27: Breakthrough innovations in green and smart mobility
Already recognised breakthrough innovations in green and smart mobility First Hydrogen train Unique electric bus €360m first contract Built from base zero Won one of the largest European tenders Alstom assets Rolling stock - Coradia ILint ⚫ Long-term customer intimacy New platform - Aptis 99% of rec
Slide 28: Six priority innovation areas
Six priority innovation areas to respond to mid and long term business drivers Road electromobility 2 GREEN 1 3 Green traction Eco-design and manufacturing MOBILITY 6 4 SMART Multimodality Autonomous train and Flow management MOBILITY 5 Data driven rail mobility LEAD IN GREEN AND SMART SOLUTIONS ALS
Slide 29: Efficiency, powered by digital
Efficiency, powered by digital A TOP PRIORITY FOR THE GROUP Additional levers 2020 objective of 7% aEbit margin reached ⚫ Digital transformation Thanks to: ⚫ Footprint stabilisation & optimisation ⚫ Sourcing cost reduction – €250m ⚫ Best-in-class project execution, including cash focus ⚫ 60% of manu
Slide 30: Environment and social impact at the heart of our strategy
Environment and social impact at the heart of our strategy 2025 targets 1 ENABLING 25%1 energy reduction in solutions (CO2) decarbonisation of mobility 100 % electricity supply from renewables 2 Total recordable injury rate at 2 CARING for our people 25% Women in management & professional roles Glob
Slide 31: Clear financial objectives for 2022/23
Clear financial objectives for 2022/23 Sales average annual growth Above 80% Net aEBIT margin1 rate of around 5% Income2 to FCF3 by around 9% in 2022/23 over 2019/20 to 2022/23 2022/23 Sustainable shareholder return: 25 to 35% dividend pay-out as of 2019/20 1 including CASCO JV share of net income 2
Slide 32: Finance
Finance Laurent MARTINEZ - CFO 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 32 © ALSTOM 2019. 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 particul
Slide 33: Alstom 2020 achievements
Alstom 2020 achievements ALSTOM – 24/06/2019 – P 33 © ALSTOM 2019. 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 will depend on
Slide 34: 2020 Strategy largely a success - Financial Achievement
2020 Strategy largely a success - Alstom Financial Achievement Backlog (in € billion) Sales (in € billion) 40.5 8.1 30.4 +33% 6.9 CAGR ⚫ Backlog: strongest industry backlog 5.5% ⚫ Growth to €8.1Bn sales ⚫ Raised margin to 7% FY 2015/16* FY 2018/19 FY 2015/16* FY 2018/19 *as per IAS11 standards *as p
Slide 35: Delivering Margin Expansion
Delivering Margin Expansion 7.1% ⚫ Volume/Price ▪ Solid top line growth ▪ Partly offset by pricing dynamics 5.3% Operational ⚫ Portfolio/Mix Mix Excellence ▪ Reaching 60% sales on Services / Signalling / Systems Volume/price ▪ New products development ⚫ Operational excellence ▪ Sourcing savings ▪ Gl
Slide 36: Success Foundation: Tender and Project Execution
Alstom Success Foundation: Tender and Project Execution Gross Margin% on Orders Intake Margin at completion increase On projects portfolio FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 ⚫ Sound Management of 500 projects portfolio Strong Project & Risk Manage
Slide 37: Creating Value with JV and Partnerships
Creating Value with JV and Partnerships United Kingdom France Russia in € millions) Nomad Digital & 21Net (connectivity) Easymile (driverless shuttles) TMH (trains & services) * Excluding JV Energy Share: 100% Share: 20% 89* Speedinov Share: 50% China Casco (Sig) Share: 49% (7)* 711 352* Kazakhstan
Slide 38: Sustainable Working Capital Performance
Sustainable Working Capital Performance Down Payments position (in € billion) Working Capital Change (impact on FCF) (in € million) 2,50.0 2.3 2.3 16 FY 2015/16 FY 2016/17 FY 2017/18 FY 2018/19 2.2 2.0 14 2,0.0 12.1 12 10.6 +€100m 1,50.0 10.0 10 8 1,0.0 7.2 6 4 ,50.0 2 (84) ,0.0 0 FY 2015/16 FY 2016
Slide 39: Strong Balance Sheet post 18/19 Dividend
Strong Balance Sheet post 18/19 Dividend – Foundation for next phase Net Cash / (Debt) (in € million) 2,325 (1,230) ⚫ Dividend of 5.5€ per share proposed by Board of Directors 1,095 ⚫ Strong net cash position allows growth and investment ⚫ Solid rating: Baa2 ⚫ Access to bank guarantees at competitiv
Slide 40: AiM financial framework
AiM financial framework ALSTOM – 24/06/2019 – P 40 © ALSTOM 2019. 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 will depend on
Slide 41: Alstom's Strategic Framework
Alstom’s Strategic Framework We AiM to GROWTH INNOVATION EFFICIENCY, by offering in smarter and powered by greater value greener mobility digital to our customers solutions One Alstom team, driven by Agile, Inclusive and Responsible values Sales step up Future growth & Margin expansion & competitive
Slide 42: Growing Sales Sustainably Above Market
Growing Sales Sustainably Above Market ⚫ Record €40Bn backlog securing €16.5-17.5Bn sales over next 3 years €8.1Bn ⚫ Boost Signalling sales ⚫ Foster Services momentum ⚫ Revenue from Services and Signalling to reach 40% by 2022/23 ⚫ Build on Rolling Stock and Systems capabilities ⚫ Softer FY 2019/20
Slide 43: Boosting Signalling Performance
Boosting Signalling Performance ⚫ Signalling growth drivers ▪ European Mainline signalling ▪ Global urban market ▪ Services on installed base €1.3Bn ▪ Innovation ⚫ Margin expension drivers ▪ R&D efficiency & standardisation ▪ Bangalore engineering footprint ▪ Casco contribution FY 2018/19 FY 2019/20
Slide 44: Harvesting on Service Leadership
Harvesting on Service Leadership ⚫ Services growth drivers ▪ Record backlog of €13.5Bn ▪ Long term maintenance services contracts, parts, green €1.6Bn modernisation ▪ Alstom unique added value on reliability & availability ⚫ Margin drivers ▪ Sourcing efficiency ▪ Design for maintenance & services ▪
Slide 45: Leading Rolling Stock and System Performance
Leading Rolling Stock and System Performance ⚫ Systems dynamics ▪ Systems sales softening after peak activities in 2018/19 ▪ Opportunities in Middle East & Latin America ▪ Unique Alstom turn-key experience & capability €1.8Bn ⚫ Rolling stock growth drivers ▪ Renewed product portfolio on Rolling Stoc
Slide 46: Committed to Create Value Through Innovation
Committed to Create Value Through Innovation R&D Costs around 5% ⚫ R&D costs growing at same pace than sales 400 0.6% (around 5%): stable R&D / sales ratio 350 €291m ⚫ Harvesting on current platform generation on 0.5% 300 Rolling stocks 0.4% 250 ⚫ Prioritised innovation axes 200 0.3% ▪ Green mobilit
Slide 47: Uplifting margin to Benchmark Level
Uplifting margin to Benchmark Level 9.0%* ⚫ Volume/Price ▪ Sustainable top line growth ▪ Consistent price dynamics trends 7.5%* ⚫ Portfolio Mix Operational Excellence ▪ Growth towards Services & Signalling (toward 40% of Mix Casco sales in 2022/23) Volume/price ⚫ Operations Performance 7.1% ▪ Sourci
Slide 48: Deliver EPS growth
Deliver EPS growth 0.3 ⚫ EPS growth driven mainly by EBIT step up ▪ Restructuring almost completed, returning to normative 0.2 level ▪ Financial expenses reduced by bonds repayment 0.2 ▪ Effective Tax Rate between 25 and 30%, benefiting from Deferred Tax Asset ▪ Long Term Incentive payout to be impl
Slide 49: Driving Performance through Cash Focus Programme
Driving Performance through Cash Focus Programme Programme Architecture ⚫ Key drivers Tender ▪ Tender - Progress payment & Working Capital optimisation ▪ Inventory - 20% reduction of testing duration Sourcing Tools & - 15% Hard Inventory coverage reduction process Payment - Vendors Managed Inventori
Slide 50: Cash Focus: Prioritising Capex
Cash Focus: Prioritising Capex ⚫ Transformation capex to end in 2019/20: CAPEX no new industrial hub creation €207m ⚫ Capacity increase in Best cost countries ▪ Sri City (India) ▪ Katowice (Poland) ⚫ Capex prioritised to efficiency drivers ▪ Machining capacity ▪ Robot welding ▪ Factory 4.0 FY 2018/1
Slide 51: Cash Focus: Working Capital Performance
Cash Focus: Working Capital Performance FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 ⚫ Stable Down payment on average ⚫ Inventory to ramp up over next 2 years ⚫ Impact of Cash Focus stringent actions ⚫ Mid-term Target: working capital stability Working capital subject to customary short te
Slide 52: Delivering FCF Performance
Delivering FCF Performance ⚫ FCF key drivers ▪ EBIT growth driven by volume & margin expansion ▪ Working Capital: inventory impact during 2 years, and stable mid-term target ▪ Capex stabilising to 2% of sales ▪ Financial cash out benefiting from bonds repayment ▪ Tax cash out supported by tax losses
Slide 53: Disciplined M&A Policy
Disciplined M&A Policy Bolt-on acquisitions Medium to small and partnership to Opportunities in all acquisitions enter new market areas of our core contemplated for segments or business & digital the coming years countries Disciplined M&A to accelerate growth & value creation - EPS Accretive target
Slide 54: Capital Allocation Policy & Shareholder return
Capital Allocation Policy & Shareholder return FCF improvement Strong Sustainable Disciplined Balance Shareholder M&A Sheet return ⚫ Strong net cash position maintained to sustain growth ⚫ Solid investment grade rating maintained ⚫ Sustainable shareholder return: 25 to 35% dividend pay out as of 201
Slide 55: We Aim at value creation
We Aim at value creation GROWTH INNOVATION EFFICIENCY, by offering in smarter and powered by greater value greener mobility digital to our customers solutions Sustainable shareholder return: 25 to 35% dividend pay-out as of 2019/20 Sales: average annual Disciplined M&A Mid term target: growth rate o
Slide 56: Key Take Aways
Key Take Aways ⚫ Well positioned in a growing market, supported by an industry-leading backlog, a global footprint and range of products / services EPS ⚫ Translating in industry-leading margins and cash flow Growth generation ⚫ Significant firepower to implement disciplined M&A and innovation ⚫ Mana
Slide 57: Efficiency
Efficiency Thierry BEST – Operations SVP 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 57 © ALSTOM 2019. 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 an
Slide 58: Alstom in Motion 2019-2023: Efficiency
Alstom in Motion 2019-2023: Efficiency Cash focus Sourcing Digital transformation Footprint Footprint stabilisation Alstom 2020 globalisation and optimisation Alstom in Motion (2019 -2023) (2016 -2019) Low Labor Cost Best-in-Class Project Country Extension Execution ⚫ Key targets hit: ⚫ Key targets:
Slide 59: Digital Transformation: Engineering
Digital Transformation: Engineering ⚫ Fully digitalised development from R&D 4 months development cycle time reduction to project execution demonstrated on metro projects ⚫ Digital design reviews with state-of the art 3D technologies 15% reduction on development cycletime ALSTOM – 24/06/2019 – P 59
Slide 60: Digital Transformation: Industrial Operations
Digital Transformation: Industrial Operations Smart Operations 3D printing Parts 3D printed Connected Workforce ▪ Extensive use for jigs and prototypes allowing 80% leadtime reduction Welding robot in Le Creusot Up to -10% ▪ -20% on bogie frame cost Digital Supply Chain Manufacturing automation Manu
Slide 61: Digitalisation transformation: Alstom Digital Suite
Digitalisation transformation: Alstom Digital Suite Smart Operations Alstom Digital Suite GSI Roll Out Planning ⚫ Alstom Digital Suite covers every process: FR 100% ▪ Tendering APAC 100% ▪ Engineering ▪ Manufacturing Execution System NAM 100% ▪ Quality Execution System MEA 60% ▪ Service Execution Sy
Slide 62: Digital Transformation: Use Case TGV2020
Digital Transformation: Use Case TGV2020 Extensive use of digital Parts handling Manufacturing Execution System with Cobot and new technologies Digital worksinstruction and monitoring Welding automation Virtual Training welding and painting -25% Manufacturing hours vs previous generation 3D printing
Slide 63: Footprint Stabilisation: Rolling Stock Engineering
Footprint Stabilisation and Optimisation: Rolling Stock Engineering Engineering ⚫ Site specialisation by product ⚫ Engineering hub in Bangalore & Saint-Ouen to serve all projects ⚫ Creation of centers of Excellence for critical subsystems 30% Engineering hours in India RS Engineering Sites Engineeri
Slide 64: Footprint Stabilisation & Optimisation: Sourcing
Footprint Stabilisation & Optimisation: Sourcing ⚫ Standardisation Recent achievements ▪ Design To Cost (DTC) involving suppliers DTC with supplier for intercity brake architecture ▪ Components catalogue ⚫ Massification ▪ “Alliance” program with selected suppliers ▪ Bundling from new built to afters
Slide 65: Footprint Stabilisation & Optimisation: Industrial Operations
Footprint Stabilisation & Optimisation: Industrial Operations Current Status Upstream hub Completed set-up of Regional and Best Cost Final Assembly Unit Country footprint New sites Ramping up Mid term goal 60% hrs Sites per region specialised Manufacturing in upstream operations allowing automation
Slide 66: Footprint Optimisation: Use case Sydney Project
Footprint Stabilisation & Optimisation: Use case Sydney Project Worldwide organisation serving Sydney Project Europe ➔ EXPERTISE Project Set up: India ➔ EXPERTISE & COMPETITIVENESS 20% savings vs previous organisation Sydney ➔ CUSTOMER INTIMACY & MAINTENANCE CONTRACT OVER 15y ALSTOM – 24/06/2019 – P
Slide 67: Best-in-Class Project Execution
Best-in-Class Project Execution 500 projects High level of collaboration and Enhanced project From Sound agility between sites management To Lean and Industrialised Project Execution processes and Tools project management On-Time-Delivery securing full continuity improved by 15% from tender to Proje
Slide 68: Cash Focus
Cash Focus Key Axis La Rochelle Vendor managed inventory ⚫ Vendor Managed Inventory → 15% Hard Inventory Decrease TGV2020 Production line ⚫ Optimise production line balancing optimisation → Manufacturing: -25% hours ⚫ Testing duration reduced by 20% -15% Hard and -33% leadtime Inventory ⚫ Processes
Slide 69: Alstom in India
Alstom in India Ling FANG – APAC SVP 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 69 © ALSTOM 2019. 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 pa
Slide 70: Alstom in India: An Established Footprint
Alstom in India An Established Footprint ⚫ India: key contributor to Alstom strategy with high Total 4,040 Employees standard sites for R&D, engineering and manufacturing ▪ Bangalore: Alstom’s largest engineering center for Rolling Stock & Signalling Madhepura 370 Employees → 22% of global engineeri
Slide 71: Alstom in India: A Proven Track-Record
Alstom in India A Proven Track-Record ⚫ Metro RS: LUCKNOW – €150m a proven Track-Record of Projects executed from India, to address Domestic & Export Markets: Rolling Stock ▪ Chennai, Kochi, Lucknow, Sydney, successfully commissioned Signaling ▪ Montreal, Mumbai in execution 1st completed “Make in I
Slide 72: Alstom in India: An Exciting Journey
Alstom in India An Exciting Journey Manufacturing Workload in million hours: SRI & CBE ⚫ World-class manufacturing facilities, 2 for metro RS and components 0.3 0.7 2015 2019 2023 ⚫ Established supplier base in India, Evolution of Indian Content (Metro Projects): SUPPLIERS with high focus on quality
Slide 73: India, Unmatched Differentiator for Alstom
Alstom in India India, Unmatched Differentiator for Alstom Higher Education Enrolment (%) ⚫ A skilled & abundant workforce: ▪ 2nd most populated country in the world with 1.3bn people in 2017 (1.5bn by 2030) 18% 27% 10% ▪ 63% of the population below 35 years ▪ Increased focus on education ; English
Slide 74: Questions & Answers
Questions & Answers 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 74 © ALSTOM 2019. 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 75: Lunch Break
Lunch Break 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 75 © ALSTOM 2019. 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 76: Alstom Capital Markets Day
Alstom Capital Markets Day Paris - France June 24 2019 ALSTOM – 24/06/2019 – P 76 © ALSTOM 2019. 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 particula
Slide 77: Signalling
Signalling Jean-François BEAUDOIN – Digital Mobility SVP 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 77 © ALSTOM 2019. 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
Slide 78: Railway Signalling Principles
Railway Signalling Principles Overall Architecture Route control Route control Train protection Train protection IT for rail Wayside equipment Interlocking Trackside On-board Control Center Equipment Equipment to manage Equipment Equipment Equipment to monitor train lines, on the wayside to: priorit
Slide 79: Extensive Standalone Solution Portfolio & Integrated Systems Capability
Extensive Standalone Solution Portfolio & Integrated Systems Capability Train Protection Route Control Security and Control ETCS, CBTC TRACKSIDE CONTROL CENTRES SECURITY INTERLOCKING Trackside & On-Board PRODUCTS (ATS, SCADA) Passenger Informat. Public address Telecom Standalone ATLAS URBALIS SMARTL
Slide 80: Signalling Market Overview
Signalling Market Overview Global volume increase, Stable segment breakdown Accessible Market Segment Breakdown1 Accessible Market Geography Breakdown1 UNIFE Accessible market UNIFE Accessible market CAGR ~2.5% URBAN Mainline Wayside 1.6 34% (ATP Wayside & IxL) 1.2 1.8 ◼ MEA 1.6 ~€12Bn 46% Over past
Slide 81: Alstom Competitive Positioning
Alstom Competitive Positioning Main Signalling Players Revenue (2018) €1.8- >€2.5Bn €1.4 Bn ~€1.2Bn €0.8Bn 1.9Bn ALSTOM AMBITION Gain Product & Market Leadership Player #1 Player #2 Alstom Player #4 Player #5 5 GLOBAL SIGNALLING PLAYERS ALSTOM IS #3 Source: Company data & players’ publication, estim
Slide 82: Strong Mainline Perspectives
Strong Mainline Perspectives Driven by Europe & ETCS upswing Mainline addressable market 2019-2023 (avg/yr) ALSTOM KEY ASSETS (in €Bn) 7.2 ⚫ Strong track record in all segments… 5 Europe ~70% ▪ #1 on ETCS Onboard of Global Mainline market ▪ Interlocking homologated Europe Global in 12 countries ▪ ET
Slide 83: Steady Urban Market Growth
Steady Urban Market Growth Buoyant Global Demand ALSTOM KEY ASSETS Over €4Bn Largest world wide installed base market per year New lines construction ⚫ Standalone market driven by 2 countries: ➔ China over 10 lines per year Revamping ➔ India over 20 lines in 15 cities within 5 years New built System
Slide 84: Sustained Freight & Mining Trend
Sustained Freight & Mining Trend Primarily steered by North America ALSTOM KEY ASSETS ~€0.3Bn market ⚫ Leader in North America Market in NAM Long-term cooperation with all “Class-I” rail road operators per year Product Business ⚫ Best in-class products & Customer value innovation ⚫ Private customers
Slide 85: A Unique Global Footprint
A Unique Global Footprint Competitive & Customer-focused Alstom Signalling Headcount (2019) 7,000 AMONGST 4,500 EUROPE Employees WHICH Engineers NORTH AMERICA CASCO JV ⚫ 2 development hubs: Europe & Bangalore 2,850 EMPLOYEES ⚫ Customer-centric deployment teams across 800 the globe EMPLOYEES 1,750 EM
Slide 86: Innovating towards Competitiveness & Efficiency: Platforming
Innovating towards Competitiveness & Efficiency Platforming Approach ⚫ 1 single trackside computer & associated object controller family for all applications in all countries Convergence Historical Today Bools HARDWARE ROUTE CONTROL CLC & SOFTWARE SmIO 24 V Bools PLATFORMING State charts Bools / SSI
Slide 87: Innovating towards Competitiveness & Efficiency: Digital Processes
Innovating towards Competitiveness & Efficiency Digital Processes ⚫ Digital Twins Strengthened simulation capacity ➔ Advanced systems lab tests thanks ➔ Early, quicker & advanced system tests from any location to ʺvirtual replicaʺ of all equipments & their functions ⚫ Cloud-based testing Cloud ÷25 D
Slide 88: Leading Technology Breakthrough
Leading Technology Breakthrough More than 15 years track-record MAINLINE URBAN 2003 1st CBTC for heavy metro (Singapore NEL) 1st ERTMS L2 deployment for very high speed 2005 300kph – no conventional system back-up (Italy) 1st ERTMS L2 deployment for high density line 2006 2 minutes headway – 270 tra
Slide 89: Creating customer value through digital technology
Creating customer value through digital technology Towards “Digital Train” ⚫ Energy efficiency & System performance Capacity Up to Energy Up to ➔ ATO over ETCS L2 pilot (Netherlands) increase 20% saving 40% ⚫ Driving automation Prototype by 2023 DIGITAL ➔ SNCF Driverless freight train pilot TRAIN ⚫
Slide 90: Boost our Service Offering to Drive Value
Boost our Service Offering to Drive Value Market evolution CLEAR ROADMAP ⚫ Market Size: €3.9bn Customer Focus ⚫ Obsolescence as increasing issue ❶ Integration into Global Parts Governance ⚫ Legacy systems with low flexibility ❷ Advanced diagnostics & monitoring solutions ⚫ Increasing cyber vulnerabi
Slide 91: Conclusion
Conclusion Achieving 2023 Ambition Strong market perspectives GAIN PRODUCT 4 Levers for Alstom unique portfolio & knowhow & MARKET LEADERSHIP Innovation towards Global reach Competitiveness Europe & Efficiency Mainline 1 2 3 4 North Create Customer value Global America Boost through Urban Freight Se
Slide 92: Services
Services Bernd BURGSTAHLER – Services VP 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 92 © ALSTOM 2019. 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 an
Slide 93: Services at Alstom
Services at Alstom Already strong market position thanks to a diversified portfolio of solutions Diverse portfolio Wide coverage 4,000 customers with Parts 25% coverage of installed fleet Leader in services 13,000 vehicles, 139 depots among OEMs1 Maintenance in 41 countries under contract Service: h
Slide 94: Long term growth
Long term growth Orders and sales historically outperforming the market Solid growth Acc. Market CAGR KEY RESULTS 11/13 – 18/20 Alstom Services Orders and Sales In €m, CAGR in % ⚫ Alstom orders and sales +3% Orders Sales outperforming the market +16% ▪ Sales CAGR: double the market growth ▪ Orders C
Slide 95: Value creation through innovation and technology
Value creation through innovation and technology To achieve this leadership position we’ve developed innovative solutions with strong customer benefits Integrated Digital solutions… … Creating benefits for customers Condition monitoring Improved reliability Decreased in-service - 40% breakdowns (# o
Slide 96: Value creation through customer focus – Example Italy
Value creation through customer focus From "vendor" to "solution provider“ – Example ITALY 2008/09 2018/19 Alstom Service Italy Alstom Service Italy …to ⚫ Under 100 empl. ⚫ Over 1,000 empl. "Solution ⚫ Only gardening ⚫ 6 Full-Service Contr. Provider" ⚫ Parts and Repairs ⚫ Complete Portfolio High val
Slide 97: Our ambition: becoming the undisputed leader
Our ambition: becoming the undisputed leader Acceleration plan in services to keep on growing profitably 2018/ 2022/ 2019 2023 CONTINUING BUILDING PROFITABLE GROWTH A LEADERSHIP POSITION IN CORE AND NEW SOLUTIONS IN SERVICES TO BECOME THE UNDISPUTED LEADER Sales and orders growth Increase service co
Slide 98: Very strong market potential
Very strong market potential Existence of large untapped pools and key long-term drivers enable profitable growth Large untapped pools… …and strong growth drivers 9.2 16.3 24.6 1.6 25.8 €78Bn Liberalisation ▪ New market entrants ▪ Maintenance outsourcing 23% ▪ Traffic increase 58% 60% 67% Operators
Slide 99: Key attributes
Key attributes Alstom can leverage some tangible assets to meet its ambition Large installed Customer Cutting-edge Highly-skilled base Intimacy technology workforce Best in class Condition Monitoring + 50,000 and Prognostics + 7,000 local Alstom vehicles presence with Technical experts in Service He
Slide 100: Growth strategy
Growth strategy Focused on four high-value opportunities 1 Open new revenue streams in parts Continued growth Expand our leadership position in maintenance in core solutions 2 through operational excellence and digital and new solutions 3 Enhance our position on green modernisation ALSTOM – 24/06/20
Slide 101: Open new revenue streams in parts
1 Open new revenue streams in parts Market evolution CLEAR ROADMAP ⚫ Market Size: €19Bn Customer Focus ❶ Worldwide integrated organisation ⚫ Suppliers extending their offering to service ❷ Smart diagnosis tools and localisation of repairs ⚫ Increasing dynamic on buyers’ side ❸ Strengthening of Alsto
Slide 102: Expand our leadership position in maintenance
2 Expand our leadership position in maintenance Market evolution CLEAR ROADMAP ⚫ Market Size: €8.6Bn Customer Focus ❶ Extend Prognostics & Health Management ⚫ Various schemes: bundle with RS, O&M, PPPs ❷ Full coverage with Fleet Support Centers ⚫ System Maintenance growing (full TCO evaluation) ❸ Ne
Slide 103: Enhance our position on green modernisation
3 Enhance our position on green modernisation Market evolution CLEAR ROADMAP ⚫ Today’s Market Size: €0.6Bn1, but high potential Customer Focus growth ❶ Partnering with Lessors / Roscos ⚫ CO2-free requirements ❷ Green re-tractioning ◼ Smart power module exchange (GTO – IGBT) ⚫ Diesel Multiple Units b
Slide 104: Promising financial outcome
Promising financial outcome Revenues, earnings and cash increase ALSTOM – 24/06/2019 – P 104 © ALSTOM 2019. 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 an
Slide 105: Key takeaways
Key takeaways ⚫ Already in a leadership position in services among OEMs thanks to innovation and customer focus Become the undisputed leader ⚫ Outperforming the market growth for the past 10 years Strengthen market position in high-value services ⚫ Growing business with large untapped pools Increase
Slide 106: Innovation
Innovation Marc GRANGER – CSO 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 106 © ALSTOM 2019. 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 particul
Slide 107: A long history of value creation through innovation
A long history of value creation through innovation First large size 2000's and fully automatic metro in the world 1980's 2007 First deploying Gate Turn-Off Thyristor World rail speed in train systems record – 574.8km/h Historically, Alstom at the forefront of innovation and technological progress i
Slide 108: New product launches to keep on differentiating
And more recently new product launches to keep on differentiating Rolling stock - Coradia iLint New platform - Aptis Signalling - Fluence Services - Health Hub Systems - SRS Systems - Hesop ALSTOM – 24/06/2019 – P 108 © ALSTOM 2019. All rights reserved. Information contained in this document is indi
Slide 109: Renewed platforms with strong efficiency gains
Renewed platforms with strong efficiency gains Successful renewal of our platforms… Tramway Metro Regional High-speed Locomotive Citadis XO5 Alu Metropolis Coradia Stream Avelia Liberty Prima H4 … with direct business impacts for our customers TGV du futur1 Metropolis2 Total cost of ownership -20% -
Slide 110: Innovative business models and operational solutions
And innovative business models and operational solutions New business model … … and solutions to improve efficiency INDUSTRY 4.0 The first online marketplace Implementation of cutting edge dedicated to the railway sector technologies into internal processes AUTOMATION: HIGHEST-CAPACITY WELDING ROBOT
Slide 111: A continued R&D investment to drive innovation
A continued R&D investment to drive innovation A continued investment in R&D Initiative to foster internal creativity ⚫ Yearly, company wide innovation contest 4%-5% R&D investments SALES1 2015/16 – 2018/19 ⚫ 2018: 599 innovations submitted, 57 sites, 27 countries ⚫ Successful track record: HealthHu
Slide 112: New product offering opportunities
New product offering opportunities Social and business Mega trends Technological innovations model innovation Globalisation Sustainability Terrorism Autonomy and Big Data / 3D printing Automation Open platform Crowdfunding Sharing new power sources Analytics ecosystems economy Urbanisation Gen Z Cyb
Slide 113: Six key innovation priorities in green and smart mobility
2019 – 2023: Six key innovation priorities in green and smart mobility Road electromobility 2 GREEN 1 3 Green traction Eco-design and manufacturing MOBILITY 2019 – 2023 6 key innovation 6 priorities 4 SMART Multimodality Autonomous train and Flow management MOBILITY 5 Data driven rail mobility ALSTO
Slide 114: Green traction
1 Green traction A future breakthrough in rail (Opportunities) A future growth driver… Ambition: Alstom as a key green player -60% CO2 emissions expected in Top sustainable train provider transport by 2050 (vs.1990) DIESEL Increasing number of cities declaring "Diesel ban" Large portion of networks
Slide 115: Green traction: solutions to reduce energy consumption
1 Green traction Comprehensive solutions to help reduce energy consumption Rolling stock – Silicon Carbide (SiC) Systems – Rail efficiency application ⚫ Up to - 20% lower train energy consumption ⚫ Strategic partnership with Cosmo Tech ⚫ - 12% lower traction maintenance costs ⚫ A powerful simulation
Slide 116: Road electromobility
2 Road electromobility Aptis as a first step beyond rail mobility Low carbon road mobility potential eBus share of the European bus market by x2 Demand for mobility while ÷2 CO2 …and reducing air pollution in cities 50% 2025, ie 7,500 ebuses/yr 90% EU people today live in areas exposed to by 2050… e
Slide 117: Eco-design and manufacturing
3 Eco-design and manufacturing Strengthening our carbon neutrality strategy ECO-DESIGN ENVIRONMENTAL EXCELLENCE IN MANUFACTURING Now 23% solutions in Alstom's portfolio -12.5% energy intensity are classified as eco-designed reduction since 2014 -17% energy consumption 40% electricity consumed in sit
Slide 118: Autonomous train
4 Autonomous train On track to reach our strong ambition Participation in Easymile Remote cab pilot OUR OBJECTIVES 2021 Autonomous shuttle system in service Autonomous train consortium 2022 Driverless tram in depot Automatise first train depot 2023 Complete autonomous train prototype ALSTOM – 24/06/
Slide 119: Data driven rail mobility
5 Data driven rail mobility Data leads to new range of digital solutions Alstom Railway Data … Lead to new digital solutions Now 2025 MAINTENANCE OPERATIONS +2M train +170 Bn +100 fleets +50 fleets data of data in supervised supervised per day database (all assets) Condition monitoring Traffic manag
Slide 120: Data driven rail mobility: innovative technology
5 Data driven rail mobility Innovative technology to build new solutions Advanced technologies Artificial Computer IoT security & Container IoT sensor Big Data Intelligence Vision connectivity Automation Mobility Data Platform Framework | Cloud & On Premise Mobility Data Train and Data Science and R
Slide 121: Multimodality & Flow management: Mastria
6 Multimodality & Flow management Mastria ⚫ Coordinates all public transport modes from rail & road ⚫ Offers alternative mobility solutions rapidly in case of incidents ⚫ Optimises operations with mobility analytics ON-GOING PILOTS IN PARIS AREA AND IN TUSCANY Mastria offers a next generation soluti
Slide 122: Multimodality & Flow management: emerging markets
6 Multimodality & Flow management Exploring new emerging markets SHARED MOBILITY ⚫ Complex transport systems, as currently available in rail, will emerge in road ⚫ These new systems will first Driving appear in public Driverless PT Autonomous car automation transportation Intelligent Connected infra
Slide 123: Strategic enablers to support innovation priorities
2019 – 2023: Strategic enablers to support Alstom innovation priorities 6 innovation priorities 3 enablers Road electromobility A 2 Green traction Data Innovation Factory 1 3 Eco-design and manufacturing GREEN B MOBILITY Open and agile innovation SMART and partnerships MOBILITY 6 4 Autonomous train
Slide 124: Open and agile innovation and partnerships
B Open and agile innovation and partnerships Green mobility Smart mobility ⚫ Partnership signed in 2017 ⚫ Partnership signed in 2017 ⚫ Focus on technologies for electric and ⚫ Focus on cybersecurity of transport systems hybrid systems ⚫ Investment in 2017 ⚫ Joint contract in Germany on May 2019 ⚫ Fo
Slide 125: Key takeaways
Key takeaways R&D and innovation embedded in A new open and agile Alstom's organisation to sustain innovation mindset enabled our leadership and build a by key capabilities: business new one in green and smart incubator, data innovation factory, mobility partnerships & ecosystem ALSTOM – 24/06/2019
Slide 126: Questions & Answers
Questions & Answers 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 126 © ALSTOM 2019. 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 127: Closing remarks
Closing remarks Henri POUPART-LAFARGE – Chairman & CEO 2019 Capital Markets Day ALSTOM – 24/06/2019 – P 127 © ALSTOM 2019. 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 w
Slide 128: Closing remarks
Closing remarks On track to be THE LEADING GLOBAL INNOVATIVE PLAYER in our markets for a sustainable and smart mobility to create greater value for passengers, clients and shareholders Leveraging the Growing and stable market Clear objectives, supported achievements of our 2020 with opportunities by
Slide 129: Appendix
Slide 130: 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 131: Appendix - Non-GAAP financial indicators definitions
Appendix 1 - Non-GAAP financial indicators definitions ⚫ Free cash flow Free cash flow is defined as net cash provided by operating activities less capital expenditures including capitalised development costs, net of proceeds from disposals of tangible and intangible assets. In particular, free cash fl