Alstom Sa · EURONEXT:ALO
Alstom Sa — Q4 2023 Earnings Presentation
52 slides from Alstom Sa's earnings presentation, May 10, 2023
Slide 1: Full Year Results Fiscal Year 2023/24
Full Year Results Fiscal Year 2023/24 8 May 2024 1
Slide 2: Disclaimer
RESTRICTED 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 uncert
Slide 3: Agenda
RESTRICTED Agenda Highlights Henri Poupart-Lafarge, Chairman and Chief Executive Officer ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― FY 2023/24 financial results Bernard Delpit, Executive Vice-President and Chief Financial Officer ―――――――――――――――――――――――――――――――――――――
Slide 4: Highlights
1 Highlights Henri Poupart-Lafarge Chairman and Chief Executive Officer 4
Slide 5: FY 2023/24 results in line with guidance, with strong H2 cash generation
RESTRICTED FY 2023/24 results in line with guidance, with strong H2 cash generation ORDERS SALES €18.9bn €17.6bn 139 4.0 KtonCO2e gCO2e/pass.km Scope 1+2 Scope 3 Book-to-bill +7% (o/w 9% org) Emissions2 Sold products 1.1 vs FY 2022/23 (39)% vs FY 2021/22 (13)% vs FY 2021/22 FREE aEBIT CASH FLOW €997
Slide 6: ~€190bn of three-year project pipeline reflecting selectivity strategy
RESTRICTED Strong pipeline ~€190bn of three-year project pipeline reflecting selectivity strategy €102bn ALSTOM SITES SIGNALLING EUROPE €43bn SYSTEMS ROLLING STOCK AMERICAS AND COMPONENTS EUROPE: Rolling stock and ETCS in DACH, Regional trains in Italy, NORTH AMERICA Romania, Nordics… €19bn RER Toro
Slide 7: H2 marked by major Services and Systems wins
RESTRICTED H2 marked by major Services and Systems wins €10.5bn of orders booked in H2 2023/24 €1.0 bn €0.9 bn €0.5bn Cross Country (MAINTENANCE- United Kingdom) VLocity (MAINTENANCE- Australia) AlUla (TRAMWAYS - Saudi Arabia) €0.9 bn €0.5 bn €0.8 bn Tel Aviv Green Line (TURNKEY- Tel Aviv) Abidjan M
Slide 8: Turning operational improvements into accelerated profit and cash generation
RESTRICTED Turning operational improvements into accelerated profit and cash generation Alstom post-merger transformation is delivering results (FY 2023/24 vs FY 2020/21) External demerit Divided by 4 Manufacturing Throughput (# cars) +40% On-Time Delivery of rolling stock +27pp Client Net Promoter
Slide 9: Deleveraging plan being executed now
RESTRICTED Deleveraging plan being executed now 1. 2. 3. Equity-like Capital raise Divestments US Signalling and TMH Hybrid bond Rights issue ca. ca. ca. €700m €750m €1bn €2.4bn proceeds with €2bn deleveraging effect © ALSTOM SA 2024. All rights reserved. Information contained in this document is in
Slide 10: Financial Results
2 Financial Results Bernard Delpit Executive Vice-President & Chief Financial Officer 10
Slide 11: Quality order intake supporting trajectory
RESTRICTED Quality order intake supporting trajectory ORDERS FY 2023/24 (in €bn) (8.4)% 18.9 18.9 20.7 AMECA 2.4 Signalling 2.3 18.9 3.2 APAC 3.7 Systems Americas 2.0 Services 6.5 11.3 Europe 6.4 Rolling stock FY 2022/23 FY 2023/24 FY 2023/24 FY 2023/24 ● > €60bn orders since merger ● Margin and cas
Slide 12: Strong end of the year on organic sales growth
RESTRICTED Strong end of the year on organic sales growth SALES EVOLUTION (in € million) FY 2023/24 SALES SPLIT BY PRODUCT LINES +6.7% ROLLING STOCK: €9,123m (+3.9% vs FY 2022/23, o/w 6.5% org) Ramping up in France, Belgium and the US, solid level of execution in South Africa, India, and Europe + 15
Slide 13: €1bn adjusted EBIT, up 17% year-on-year
RESTRICTED €1bn adjusted EBIT, up 17% year-on-year FY FY (in € million) Evolution 2022/23 2023/24 Sales 16,507 17,619 +6.7% Cost of Sales (14,182) (15,096) +6.4% Adjusted Gross Margin before PPA¹ 2,325 2,523 +20bps As a % of sales 14.1% 14.3% Research and development expenses (519) (549) before PPA2
Slide 14: Margin trajectory delivered in line with guidance
RESTRICTED Margin trajectory delivered in line with guidance aEBIT (in %) 20bps (30) bps 30bps 30bps 5.2% 5.7% © ALSTOM SA 2024. 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 correc
Slide 15: Net income impacted by restructuring, Russia exit and financial costs
RESTRICTED Net income impacted by restructuring, Russia exit and financial costs FY FY (in € million) Evolution 2022/23 2023/24 Sales 16,507 17,619 +6.7% Adjusted EBIT 852 997 +17.0% Of which SG&A plan €115m Others: Europe €32m Adjusted EBIT margin 5.2% 5.7% +50bps Integration costs €142m - as per p
Slide 16: Expecting strong reduction in non-operating expenses from FY 2024/25 onwards
RESTRICTED Expecting strong reduction in non-operating expenses from FY 2024/25 onwards Non-operating expenses expected trajectory (in m€) 363 279 209 138 147 65 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 Restructuring Litigation and legal fees Integration Others © ALSTOM SA 2
Slide 17: Negative FCF in FY 2023/24 due to WC changes and cash interest outflows
RESTRICTED Negative FCF in FY 2023/24 due to WC changes and cash interest outflows From EBIT* to Free Cash Flow (in € million) Capex / Cap Dev D&A 469m Financial & Tax Cash Out Change in JVs dividends 310m Working (1) Other Capital EBIT* 356m FY 2023/24 Funds From Operations FY 2023/24 FCF * EBIT Be
Slide 18: Trade Working Capital
RESTRICTED Trade Working Capital Supply chain support, discipline restored on overdues and inventories (in € million / days of sales) 31 March 2023 31 March 2024 Inventories1,2 3,729 82 3,818 79 Trade payables (3,640) (81) (3,444) (71) Trade receivables 2,670 59 2,997 62 Other assets/ liabilities1 (
Slide 19: Contract Working Capital
RESTRICTED Contract Working Capital Acceleration of deliveries and good flow of downpayments (in € million / days of sales) 31 March 2023 31 March 2024 Contract assets 4,533 100 4,973 103 Contract liabilities (6,781) (150) (7,995) (166) Current provisions (1,779) (1,612) Of which Risks on (39) (33)
Slide 20: Structural FCF seasonality mitigated or exacerbated by the timing of downpayments
RESTRICTED Structural FCF seasonality mitigated or exacerbated by the timing of downpayments FCF (in € million) Seasonality mitigated by downpayments being more H1- weighted ● Structural seasonality on cash-in from progress payments, averaging ~45% in H1 and ~55% in H2 over the last five years, driv
Slide 21: Liquidity reinforced enabling significant headroom for FY 2024/25
RESTRICTED Liquidity reinforced enabling significant headroom for FY 2024/25 Liquidity as of March 2024 (in €m) 6,268 ● €1,208m Short-term debt as of March 2024 - €1,033m NeuCP New - €175m drawing on liquidity RCF RCF1 2,250 ● No covenant on any debt, including RCFs ● Liquidity of €6,268m as of Marc
Slide 22: Strong cash generation in H2
RESTRICTED Strong cash generation in H2 31 March 2023 30 September 2023 31 March 2024 Net cash/(debt) Net cash/(debt) Net cash/(debt) H1 2023/24 FCF H2 2023/24 Leases and FCF others Dividends, leases and others © ALSTOM SA 2024. All rights reserved. Information contained in this document is indicati
Slide 23: Comprehensive plan – CDPQ and BPI intention to subscribe to RI prorata
RESTRICTED Comprehensive plan – CDPQ and BPI intention to subscribe to RI prorata IG rating reaffirmed. Outlook change to stable upon Hybrid and RI closing Deleveraging Use of 8 May 2024 breakdown Proceeds actions proceeds Asset ✓ US SIG signed €630m –closing ~Summer 2024 ~€700m Disposals ✓ TMH deli
Slide 24: Trajectory
3 Trajectory Henri Poupart-Lafarge Chairman and Chief Executive Officer 24
Slide 25: Leading the way to greener and smarter mobility
RESTRICTED Leading the way to greener and smarter mobility Restore profitability Our Set foundations to become and best-in-class Operations objectives to consolidate our position as undisputed the Rail one-stop-shop leader reference partner 1 Achieve Excellence in Operations Create profitable opport
Slide 26: Rolling Stock: turning selectivity into sustainable profit
RESTRICTED Rolling stock : turning selectivity into sustainable profit Selectivity since merger Key additional actions to uplift profitability over next three years Mid-term expectations Rolling Stock Book to Bill Focus on 13 most attractive countries Continue improving 3 ✓ Clear competitive advanta
Slide 27: Industrial optimization and overheads reduction post integration
RESTRICTED Industrial optimization and overheads reduction post integration, as the Group stabilizes deliveries to 4,800-5,000 cars per year Manufacturing Output (#cars) Mid-term expectations 4800 - 5000 4645 4151 3892 Industrial Reduce industrial 2395 optimization inefficiencies on ~3100 gross marg
Slide 28: Bringing Services to the forefront of the Alstom business model
RESTRICTED Bringing Services to the forefront of the Alstom business model AMBITION STRATEGIC FOCUS Mid-term expectations • Harvest installed base Average book-to-bill Consolidate leadership • Grow short cycle sales largely above 1 • One-stop shop positioning • Cross border and open access in Europe
Slide 29: Signalling and Systems - Profitable growth in a concentrated market
RESTRICTED Signalling and Systems - Profitable growth in a concentrated market Alstom ambition 1 A MARKET… 2 Grow above market 3 Improve profitability …CONSOLIDATING … and GROWING Mid to High Single Digit Sustain Double Digit growth profitability 4% p.a. Driven by SIG growth Driven by - Mainline: Ge
Slide 30: Strong backlog with confirmed gross margin improvement trajectory
RESTRICTED Strong backlog with confirmed gross margin improvement trajectory Backlog Stratification – Gross Margin evolution 18.3% Gross margin on backlog 17.9% 18.1% 17.5% 16.9% 16.0% Mid-term expectations €92bn €87bn €81bn Substantial reduction in share of the <10% > 20% GM backlog 10% to 20% €43b
Slide 31: Non-linear aEBIT margin trajectory with restructuring impact in second half
RESTRICTED Non-linear aEBIT margin trajectory with impact of restructuring plan kicking in during second half of FY 2024/25 aEBIT (in %) Main drivers to 8-10% aEBIT mid- to long-term ambition ~30 - 40 bps 10 -15 bps 30-35 bps • Rolling Stock margin uplift from progressive improvement of margin in ba
Slide 32: Cumulative Free Cash-Flow generation of at least €1.5bn over the next three years
RESTRICTED Cumulative Free Cash-Flow generation of at least €1.5bn over the next three years Investments impacting FFO Positive FFO drivers Services CAPEX Strong EBITDA improvement Restructuring cash out Reduction of non-operating expenses Contract working capital build-up Positive trade working cap
Slide 33: Capital allocation priorities
RESTRICTED Capital allocation priorities • Priority to deleverage and maintain Investment Grade rating 0 • Dividends policy to be re- evaluated once zero net financial debt is reached • M&A policy: • Pursue bolt-on acquisitions (Innovation, Digital, Services) • Dynamic portfolio management Graph not
Slide 34: Guidance for FY 2024/25 and mid-term ambitions
RESTRICTED Guidance for FY 2024/25 and mid-term ambitions Assumptions Outlook for FY 2024/25 Mid- to long-term ambitions • Book to bill above 1 • Supportive market • Book-to-bill above 1 demand • Sales organic growth: around 5% • Sales average growth ~5% / • FY 2024/25 • aEBIT margin around 6.5 % ye
Slide 35: Contacts & Agenda
RESTRICTED Contacts & Agenda CONTACTS AGENDA 20 June 2024 Combined Annual Martin VAUJOUR Shareholders’ Meeting VP Investor Relations 26 July 2024 Estelle MATURELL ANDINO FY 2024/25 First Quarter Deputy Head Investor Relations Order & Sales Results investor.relations@alstomgroup.com © ALSTOM SA 2024.
Slide 36: Financial Calendar
RESTRICTED Financial Calendar 8 - 10 May FY 23/24 roadshow in London – Kepler Cheuvreux London, UK 13 - 14 May FY 23/24 roadshows in NYC and Boston – ODDO NYC & Boston, USA 14 - 15 May FY 23/24 roadshows in Paris – BNPP Exane Paris, France 15 May Redburn Atlantic's 12th Annual Canada Conference Toro
Slide 37: Q&A session
Q&A session © ALSTOM SA 2024. 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 and commercial circums
Slide 38: Appendix
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Slide 39: FY 2023/24 backlog by region and product line
RESTRICTED FY 2023/24 backlog by region and product line Backlog breakdown by region (in € million) Backlog breakdown by product line (in € million) Systems Asia Pacific €8,682m Americas €13,390m 10% €12,775m 15% Signalling 14% €7,746m 8% Africa, Middle East & Rolling stock Europe €41,215m Central A
Slide 40: FY 2023/24 Sales by region and product line
RESTRICTED FY 2023/24 Sales by region and product line Sales breakdown by region (in € million) Sales breakdown by product line (in € million) Systems €1,578m Asia Pacific €2,424m 9% 14% Signalling €2,646m 15% Americas €3,466m Europe €10,185m 19% 58% Rolling stock €9,123m Services €4,272m 52% 24% Af
Slide 41: Sales - Reported vs Organic figures by quarter
RESTRICTED Sales - Reported vs Organic figures by quarter FY 2022/23 FY 2023/24 Reported growth Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Rolling Stock 0.5% 3.0% 4.8% -2.0% 5.5% -0.7% -0.2% 11.4% Services 19.3% 12.0% 13.0% 5.7% 5.2% 15.3% 2.3% 23.9% Systems 63.0% 22.2% 9.3% 24.0% -16.0% 22.5% 12.0% 11.2% Signalling -
Slide 42: Sales by currency
RESTRICTED Sales by currency FY 2023/24 Currencies as a % of sales EUR 45.3% GBP 10.9% USD 10.0% CAD 4.9% INR 4.9% AUD 4.4% SEK 2.9% MXN 2.8% ZAR 2.7% BRL 1.7% KZT 1.2% SGD 1.2% Currencies below 1% of sales 7.1% © ALSTOM SA 2024. All rights reserved. Information contained in this document is indicat
Slide 43: Equity in € million
RESTRICTED Equity in € million 9,102 9,117 8,778 Other movements Share based March 2024 March 2023 Net income Dividends payment © ALSTOM SA 2024. 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 c
Slide 44: Favorable long-term debt profile and stable pension & leases liabilities
RESTRICTED Favorable long-term debt profile and stable pension & leases liabilities OUTSTANDING BONDS (IN € MILLION) PENSIONS & LEASE LIABILITIES Jan-29 AVERAGE Oct-26 Jul-30 0.00% MATURITY 0.25% 0.5% 4.2 years Jul-27 0.125% AVERAGE COUPON 946 700 750 700 0.22% 645 500 2026 2027 2028 2029 2030 2031
Slide 45: Bridge consideration – From Enterprise Value to Equity Value
RESTRICTED Bridge consideration – From Enterprise Value to Equity Value (in € million) FY 2023/24 Total Gross debt, incl. lease obligations (1) 4,557 Pension liabilities net of prepaid and deferred tax asset related to pensions (2) 777 Non controlling interest (3) 106 Cash and cash equivalents (4) (
Slide 46: Bombardier Transportation PPA provisional amortisation plan
RESTRICTED Bombardier Transportation PPA provisional amortisation plan As per P&L (in € million) Booking 1 FY 2020/21 (71) FY 2021/22 (428) FY 2022/23 (436) FY 2023/24 (357) FY 2024/25 (373) FY 2025/26 (264) FY 2026/27 (213) ● The Gross PPA amortisation plan will be subject to FX evolution in FY 202
Slide 47: Reconciliation between consolidated income statement and MD&A view, 31 March 2024
RESTRICTED Reconciliation between consolidated income statement and the MD&A management view as of 31 March 2024 (in € million) Total Adjustments Total Consolidated Consolidated Financial Financial Adjustments as of 31 March 2024: Statements (1) (2) (3) (4) Statements (GAAP) (MD&A view) 31 March 202
Slide 48: Reconciliation between consolidated income statement and MD&A view, 31 March 2023
RESTRICTED Reconciliation between consolidated income statement and the MD&A management view as of 31 March 2023 (in € million) Total Adjustments Total Consolidated Consolidated Financial Financial Adjustments as of 31 March 2023: Statements (1) (2) (3) (4) Statements (GAAP) (MD&A view) 31 March 202
Slide 49: Non-GAAP financial indicators definitions (1/3)
RESTRICTED Appendix - Non-GAAP financial indicators definitions (1/3) 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 obligati
Slide 50: Non-GAAP financial indicators definitions (2/3)
RESTRICTED Appendix - Non-GAAP financial indicators definitions (2/3) ● 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 r
Slide 51: Non-GAAP financial indicators definitions (3/3)
RESTRICTED Appendix - Non-GAAP financial indicators definitions (3/3) ● Gross margin % on backlog Gross Margin % on backlog is a KPI that presents the expected performance level of firm contracts in backlog. It represents the difference between the sales not yet recognized and the cost of sales not
Slide 52: www.alstom.com
www.alstom.com www.alstom.com www.alstom.com www.alstom.com 52