Alstom Sa · EURONEXT:ALO
Alstom Sa — H1 2017/18 Earnings Presentation
52 slides from Alstom Sa's earnings presentation, Nov 14, 2017
Slide 1: Half Year Results Fiscal Year 2017/18
Half Year Results Fiscal Year 2017/18 14 November 2017
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 1 Introduction 2 2020 strategy 3 Financial results 4 Siemens Alstom project 5 Objectives ALSTOM – 14 November 2017 – P 3 © ALSTOM 2017. 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 comp
Slide 4: H1 2017/18 results highlights
H1 2017/18 results highlights Strong operational performance • Order intake of €3.2bn and backlog of €32.7bn • Sales up 5% (organic 5%) at €3.8bn • Adjusted EBIT up 16%, at €231m, leading to margin at 6.2% Solid balance sheet • Free cash flow of €227m • Net debt at €101m • Equity of €3.8bn Sie
Slide 5: Agenda: 2020 strategy
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Siemens Alstom project 5 Objectives ALSTOM – 14 November 2017 – P 5 © ALSTOM 2017. 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 comp
Slide 6: An ambitious strategy for 2020
An ambitious strategy for 2020 OUR VALUES TEAM, TRUST & ACTION ETHICS & COMPLIANCE 1 CUSTOMER-FOCUSED ORGANISATION ORGANIC OUR 2 COMPLETE RANGE OF SOLUTIONS GROWTH VISION OUR BOOSTED PREFERRED 3 VALUE CREATION THROUGH INNOVATION PARTNER STRATEGY BY FOR SELECTIVE 4 OPERATIONAL AND ENVIRONMENTAL EXCEL
Slide 7: Customer-focused organisation: commercial performance
Customer-focused organisation Commercial performance Orders (in € billion) Backlog (in € billion) 6.2 3.2 0.3 1.3 2.6 0.5 0.2 33.5 32.7 0.9 2.1 1.5 H1 2016/17 H1 2017/18 H1 2016/17* H1 2017/18 Europe Americas MEA Asia Pacific Backlog breakdown as end of September 2017 6.2 3.2 1.6 0.4 Asia Pacific Sy
Slide 8: Customer focused organisation: main H1 2017/18 orders
Customer focused organisation Main H1 2017/18 orders Sweden: Trains maintenance Canada: Citadis Spirit LRV contracts Germany: Regional trains in Toronto and Ottawa Italy: Regional trains USA: Los Angeles LRV fleet modernisation Senegal: Regional trains Vietnam: Hanoi metro system Philippines: Manila
Slide 9: Customer focused organisation: LRV contracts in Canada
Customer focused organisation 2 contracts for almost 100 LRVs in Canada Contract for 61 Citadis Spirit light rail vehicles for the Greater Toronto and Hamilton area by Metrolinx. Value over €355m. Contract for 38 Citadis Spirit light rail vehicles with RTG worth c.€200m for the stage 2 LRT expan
Slide 10: Complete range of solutions
Complete range of solutions Towards more systems, signalling and services E-bus, tram, metro, suburban/regional, high speed, very high speed, locomotive 43% Components: traction, bogie, motor Maintenance Modernisation Spare parts, repairs & overhaul 19% Support services Signalling solu
Slide 11: Complete range of solutions: organic sales growth of 5%
Complete range of solutions Organic sales growth of 5% Sales (in € billion) 3.8 3.6 Stable Rolling Stock 0.7 0.7 • Regional and high-speed trains in Europe 0.6 0.7 • Beginning of Amtrak project 0.5 +5% 0.8 • On-going execution of PRASA project 1.6 1.6 • Tramway deliveries in Algeria H1 2016/17 H1
Slide 12: Value creation through innovation
Value creation through innovation Sustained level of R&D R&D gross costs (in € million) Main R&D programmes Renewal of rolling stock ranges As % of sales Smart mobility programmes Predictive maintenance 101 98 Latest innovations First commercial success for Coradia iLint in Germany 2.7% 2.7%
Slide 13: Operational excellence: adjusted EBIT
Operational excellence Continued strong operational performance Adjusted EBIT (in € million) Volume increase As % of sales Portfolio mix improvement +16% On-going initiatives for operational +20% excellence 231 200 167 6.2% 5.6% 5.1% H1 2015/16 H1 2016/17 H1 2017/18 % change reported ALSTOM –
Slide 14: Operational excellence: competitive offering
Operational excellence Competitive offering Sourcing Global footprint Alstom Alliance Continued India ramp-up • Premium partnerships with strategic suppliers to • 3,200 people at end September 2017 (vs 2,700 at support geographical expansion, share innovations end March 2017) and mutualise devel
Slide 15: Operational excellence: solid project execution
Operational excellence Excellence in delivery: solid project execution PRASA project, South Africa eLoco project, India Amtrak NGHST project, USA • Contract booked in 2014/15 • Contract booked in 2015/16 • Contract booked in 2016/17 • 20 trains delivered from Brazil: 18 in • Production started
Slide 16: CSR and Ethics & Compliance
CSR and Ethics & Compliance First AFAQ ISO 37001 certification for anti-bribery management system awarded by AFNOR Alstom selected in the Dow Jones Sustainability World and Europe indices for the 7th consecutive year and now part of the top 5% assessed companies Alstom scores B at CDP’s 2017 c
Slide 17: Agenda: Financial results
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Siemens Alstom project 5 Objectives ALSTOM – 14 November 2017 – P 17 © ALSTOM 2017. 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 com
Slide 18: Income statement
Income statement In € million H1 2016/17 H1 2017/18 Sales 3,570 3,756 Adjusted EBIT 200 231 Adjusted EBIT margin 5.6% 6.2% Restructuring charges - (19) Other charges (32) (18) EBIT 168 194 Financial result (71) (51) Tax result (32) (40) Share in net income of equity investees 47 110 Minority interes
Slide 19: Free cash flow
Free cash flow In € million H1 2016/17 H1 2017/18 Cash Focus programme impact Adjusted EBIT 200 231 Favourable cash profile on several projects Depreciation & amortisation 69 93 Volatility on short period Restructuring cash-out (18) (18) Capex (43) (80) Phasing of transformation R&D capitali
Slide 20: Capex developments
Capex developments Progressive ramp up of transformation capex Capex* (in € million) 43 80 49 11 32 31 H1 2016/17 H1 2017/18 South Africa factory Capex Transformation Capex * excluding capitalised development costs New sites to meet customers’ growing demand for a local presence €100m spent out of c
Slide 21: Liquidity and gross debt
Liquidity and gross debt In € million Liquidity position Liquidity 1,963 2,043 €2,043m cash and cash equivalents as of 30 September 2017 €400m revolving credit facility ; fully undrawn Flexibility with Energy JVs put options Mar-17 Sep-17 Undrawn credit line Gross cash In € million Gross debt
Slide 22: Net debt
Net debt Net cash/(debt) In € million (42) 30 (56) (101) (52) (208) 227 Mar-17 FCF Acq. & disposals* Capital increase** Dividend paid Forex & other*** Sept-17 * includes GE related separation impact (e.g. IS&T) ** includes Indian Railways contribution to Madhepura capital and stock option subscripti
Slide 23: Equity
Equity Equity In € million 38 (59) 29 (147) 213 3,787 3,713 Mar-17 Net income* Pensions Dividends Share base payments Forex & other** Sept-17 * Group share ** includes currency translation adjustment of €(169) million ALSTOM – 14 November 2017 – P 23 © ALSTOM 2017. All rights reserved. Information c
Slide 24: Agenda: Siemens Alstom project
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Siemens Alstom project 5 Objectives ALSTOM – 14 November 2017 – P 24 © ALSTOM 2017. 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 com
Slide 25: Siemens Alstom project
Siemens Alstom project Signing of Memorandum of Understanding and announcement on 26 September 2017 Set-up of multi-disciplinary deal implementation teams On-going Works Councils’ information and consultation procedure Next step: signing of Business Combination Agreement expected in Q1 CY 20
Slide 26: Agenda: Objectives
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Siemens Alstom project 5 Objectives ALSTOM – 14 November 2017 – P 26 © ALSTOM 2017. 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 com
Slide 27: 2020 objectives confirmed
2020 objectives confirmed 2020 OBJECTIVES Sales expected to grow at 5% per year organically Adjusted EBIT margin to reach around 7% c. 100% conversion from net income to free cash flow ALSTOM – 14 November 2017 – P 27 © ALSTOM 2017. All rights reserved. Information contained in this document i
Slide 28: Q&A
Q&A ALSTOM – 14 November 2017 – P 28 © ALSTOM 2017. 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 technical
Slide 29: Contacts and agenda
Contacts and agenda Contacts Agenda Selma BEKHECHI 17 January 2018 Investor Relations Director +33 (0)1 57 06 95 39 Q3 2017/18 Orders and Sales Julien MINOT Investor Relations Manager 16 May 2018 +33 (0)1 57 06 64 84 Full Year 2017/18 Results investor.relations@alstomgroup.com ALSTOM – 14 November 2
Slide 30: www.alstom.com
www.alstom.com ALSTOM rarer es
Slide 31: Appendix: Creation of a global leader in Mobility
Appendix: Creation of a global leader in Mobility
Slide 32: Disclaimer
Disclaimer No Offer This communication does not constitute or form any part of an offer to exchange or purchase, or solicitation of an offer to buy or exchange, any securities. Any such offer or solicitation will be made only pursuant to an official offer documentation approved by the appropriate re
Slide 33: Agenda: Overview
Agenda 1 Overview 2 A global leader 3 Transaction terms ALSTOM – 14 November 2017 – P 33 © ALSTOM 2017. 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 34: Creation of a global leader in Mobility
Creation of a global leader in Mobility Signed Memorandum of Understanding grants exclusivity to combine mobility businesses in merger of equals Listing in France and group headquarters in Paris area; led by Alstom current CEO and 50%1 shares of the new entity owned by Siemens Industrial footp
Slide 35: Alstom overview
Alstom overview Backlog Sales Tram, metro, suburban/regional, high speed, very high speed, locomotive E-bus ROLLING Components: traction, bogie, motor STOCK Signaling solutions portfolio for urban, main line, freight and mining and digital mobility Sold as products or solutions SIGNALLING
Slide 36: Siemens Mobility overview
Siemens Mobility overview Backlog Sales Short-distance, regional and long-distance rolling stock Rail-bound urban public transport vehicles and passenger coaches Motor/drive unit, railway gears, inverter, auxiliary power supply and control ROLLING unit STOCK1 Products, solutions and turnkey
Slide 37: Agenda: A global leader
Agenda 1 Overview 2 A global leader 3 Transaction terms ALSTOM – 14 November 2017 – P 37 © ALSTOM 2017. 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 38: Combination rationale
Combination rationale 1 Creation of a global leader in the mobility sector with two major players joining forces 2 Combination of two highly renowned brands with complementary portfolio 3 Industrial footprint and customer base highly complementary worldwide with critical size in each region 4 Global
Slide 39: Creation of a global leader in the mobility sector
Creation of a global leader in the mobility sector with two major players joining forces A global leader in Rolling Stock, Signalling, Services and Systems Ongoing industry consolidation over recent years… Revenue of rail activities (€bn) Year1 Acquirer Target Last available financial year 2016 Wabt
Slide 40: Two renowned brands with complementary portfolio
Combination of two highly renowned brands with complementary portfolio What Siemens portfolio brings to Alstom Add-on of successful locomotive and tramway business ROLLING Portfolio extension: automated people mover and passenger coach STOCK Intelligent transport systems and road management
Slide 41: Industrial footprint and customer base complementary worldwide
Industrial footprint and customer base highly complementary worldwide with critical size in each region 62,300 talented employees (Alstom: 32,800 + Siemens: 29,500) working in over 60 countries EUROPE 43,400 EMPLOYEES Alstom Siemens 20,700 22,700 EMPLOYEES EMPLOYEES AMERICAS MIDDLE EAST 7,700 EMPL
Slide 42: Geographical coverage complementarity
Industrial footprint and customer base highly complementary worldwide with critical size in each region Geographical coverage complementarity Leverage global Alstom footprint ROLLING Expand commercial reach in North America and the UK STOCK Urban: Access to new key locations of CBTC (Paris, Ne
Slide 43: Global leader in digital innovation with strengthened R&D
Global leader in digital innovation with strengthened R&D capacity Key action fields Boost innovation: Best-in-class technology to increase differentiation Invest in competitiveness-oriented technologies Coradia iLint Mireo Strengthen automation and digitalisation of rail solutions and infrastructur
Slide 44: Agility of a standalone business leveraging Siemens Group
Agility of a standalone business leveraging strengths of Siemens Group Divisions Operational collaboration with Energy Management Siemens Group divisions Process Industries and Drives Collaboration opportunity for key account managers and regional support Cooperation to enhance business by pro
Slide 45: High value creation potential for shareholders
High value creation potential for shareholders €470m annual pre-tax EBIT savings, 4 years after closing Procurement SG&A R&D and others Up to €8 per share dividend to existing Alstom shareholders Control premium Extraordinary dividend Up to €4 per share, after exercise of the put options in €4 per s
Slide 46: Agenda: Transaction terms
Agenda 1 Overview 2 A global leader 3 Transaction terms ALSTOM – 14 November 2017 – P 46 © ALSTOM 2017. 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 47: Transaction structure
Transaction structure Contribution by Siemens of its Mobility Business (plus rail Pre deal traction drives) to Alstom against issuance of Alstom shares giving control to Siemens (50%2)3 Siemens Bouygues/APE Float / Other investors Alstom existing shareholders to receive special dividends of 28%
Slide 48: Valuation mechanism
Valuation mechanism Standalone proforma Alstom + Siemens Mobility2 (listed on Euronext Paris) Rail traction Control drives Energy JVs premium Debt like Extraordinary adjustments dividend Siemens Alstom Mobility Transport 50%1 Mobility 50%1,2 Siemens Mobility2 Alstom EV based upon 2018 consensus For
Slide 49: Key governance principles
Key governance principles Board composition: 11 members 6 appointed by Siemens 4 independent board members designated by Alstom (with specific rights) CEO Non-executive chairman of the board to be designated by Siemens Alstom CEO will lead the newco Double voting rights would be cancel
Slide 50: Strong financial profile
Strong financial profile Alstom Siemens1 Proforma entity Ending March 17 Ending Sept. 16 Excluding transaction adj. Backlog €34.8bn €26.4bn €61.2bn Order Intake €10.0bn €8.0bn €18.0bn Sales €7.3bn €8.0bn €15.3bn Adjusted EBIT2 (pre-synergies) €0.4bn €0.8bn €1.2bn margin 5.8% 10.1% 8.0% + c.€470m pre
Slide 51: Indicative timetable
Indicative timetable 26/09/2017 Signing of Memorandum of Understanding and announcement Q1 CY18 Signing Business Combination Agreement Q2 CY18 Alstom shareholders’ meeting Until Q2/Q3 Siemens Mobility carve-out CY18 End CY18 Expected closing Closing conditions: • Antitrust and other regulatory appro
Slide 52: www.alstom.com
www.alstom.com ALSTOM rarer es