Alstom Sa · EURONEXT:ALO
Alstom Sa — FY2017/18 Earnings Presentation
56 slides from Alstom Sa's earnings presentation, May 16, 2018
Slide 1: Annual Results Fiscal Year 2017/18
Annual Results Fiscal Year 2017/18 16 May 2018
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 Outlook 5 Siemens Alstom project ALSTOM – 16 May 2018 – P 3 © ALSTOM 2018. 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
Slide 4: FY 2017/18 results highlights
FY 2017/18 results highlights Order intake of €7.2bn and backlog of €34.2bn Sales at €8bn with an outstanding growth of 9% (10% organically) Continued profitability improvement with an adjusted EBIT margin reaching 6.5% Positive free cash flow and sound balance sheet • Free cash flow of €128
Slide 5: Agenda: 2020 strategy
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Outlook 5 Siemens Alstom project ALSTOM – 16 May 2018 – P 5 © ALSTOM 2018. 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
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) 10.0 7.2 0.6 1.4 1.0 2.9 1.1 1.6 34.8 34.2 5.1 3.5 2016/17 2017/18 2016/17 2017/18 Europe Americas MEA Asia Pacific Backlog breakdown as end of March 2018 10.0 7.2 2.0 1.0 Asia Pacific Europe Systems 9%
Slide 8: Main FY 2017/18 orders
Customer focused organisation Main FY 2017/18 orders Sweden: Trains maintenance France: Metro and regional trains Canada: Citadis Spirit LRV contracts Germany: Regional trains in Toronto and Ottawa, associated maintenance for Ottawa Italy: Regional trains, High-speed trains USA: Los Angeles LRV flee
Slide 9: Leader on all continents
Customer focused organisation Leader on all continents 34,500 employees working on 105 sites in 60 countries serving Rankings(1) 200 customers AMERICAS(2) #1 EUROPE EUROPE (3) Top 3 AMERICAS 21,100 EMPLOYEES MIDDLE EAST 5,100 EMPLOYEES AFRICA ASIA PACIFIC MIDDLE EAST AFRICA Top 3 4,700 3,600 EMP
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: Outstanding organic sales growth of 10%
Complete range of solutions Outstanding organic sales growth of 10% Sales (in € billion) 7.3 8.0 c. 9% growth in Rolling Stock • Regional and high-speed trains in Europe 1.5 1.5 1.3 • Beginning of Amtrak project +9% 1.4 1.7 • Regional trains in Algeria 1.3 • On-going execution of PRASA project 3.2
Slide 12: Progress on urban systems projects in Middle-East
Complete range of solutions Progress on urban systems projects in Middle-East Riyadh metro, Kingdom of Saudi Arabia Dubai 2020, United Arab Emirates ALSTOM – 16 May 2018 – P 12 © ALSTOM 2018. All rights reserved. Information contained in this document is indicative only. No representation or war
Slide 13: Sustained level of R&D
Value creation through innovation Sustained level of R&D R&D gross costs (in € million) Main R&D programmes As % of sales Renewal of rolling stock ranges Smart mobility programmes Predictive maintenance 278 248 3.4% 3.5% 2016/17 2017/18 ALSTOM – 16 May 2018 – P 13 © ALSTOM 2018. All rights res
Slide 14: Recent major launches
Value creation through innovation Recent major launches First commercial success for Coradia iLint in Currently in tests across Europe Germany Innovation label at Busworld’s awards Award of 2018 GreenTec Mobility prize in for Aptis Munich ALSTOM – 16 May 2018 – P 14 © ALSTOM 2018. All rights
Slide 15: Continued strong operational performance
Operational excellence Continued strong operational performance Adjusted EBIT (in € million) Volume increase As % of sales Portfolio mix improvement On-going initiatives for operational excellence +72% 514 421 366 298 6.5% 5.8% 5.3% 4.8% 2014/15 2015/16 2016/17 2017/18 % change reported ALSTOM
Slide 16: Competitive offering
Operational excellence Competitive offering Sourcing Global footprint Alstom Alliance Continued India ramp-up • Premium partnerships with strategic suppliers to • 3,300 people at end March 2018 (vs 2,700 at end support geographical expansion, share innovations March 2017) and mutualise developme
Slide 17: Excellence in delivery: solid project execution
Operational excellence Excellence in delivery: solid project execution PRASA project, South Africa eLoco project, India Amtrak NGHST project, USA ALSTOM – 16 May 2018 – P 17 © ALSTOM 2018. All rights reserved. Information contained in this document is indicative only. No representation or warr
Slide 18: Environmental excellence
Environmental excellence On track to achieve 2020 objectives Improve our environmental footprint • Continue our efforts on energy saving, waste and CO2 • ISO 14001 for all operational units with more than 200 people • 2020 objective: energy intensity reduction by 10%. - 2017 status: 9% reduction c
Slide 19: A culture based on diversity & entrepreneurship
A culture based on diversity & entrepreneurship 34,500 employees worldwide Diversity in terms of gender, generation, nationality, social and cultural background targeted: 25% women in management or professional role by 2020 – Status: 20% in 2017/18 ALSTOM – 16 May 2018 – P 19 © ALSTOM 2018. Al
Slide 20: 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 21: Agenda: Financial results
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Outlook 5 Siemens Alstom project ALSTOM – 16 May 2018 – P 21 © ALSTOM 2018. 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
Slide 22: Income statement
Income statement % change % change In € million FY 2016/17 FY 2017/18 reported organic Sales 7,306 7,951 9% 10% Adjusted EBIT 421 514 22% Adjusted EBIT margin 5.8% 6.5% Restructuring charges (6) (47) Other charges (57) (86) EBIT 358 381 Financial result (127) (91) Tax result (76) (73) Share in net i
Slide 23: Free cash flow
Free cash flow In € million FY 2016/17 FY 2017/18 Cash Focus programme Adjusted EBIT 421 514 impact Working cap impacted by Depreciation & amortisation 132 137 (49) (37) volatility on short period Restructuring cash-out Capex (150) (202) Ramp-up of transformation R&D capitalisation (70) (81) c
Slide 24: Capex developments
Capex developments Ramp up of transformation capex Capex* (in € million) 150 202 108 47 103 94 2016/17 2017/18 Capex Transformation Capex South Africa factory * excluding capitalised development costs New sites to meet customers’ growing demand for a local presence €159m spent out of c. €300m transf
Slide 25: Liquidity and gross debt
Liquidity and gross debt In € million Liquidity position Liquidity 1,963 €1,231m cash and cash equivalents as of 31 March 2018 1,631 €400m revolving credit facility ; fully undrawn Flexibility with Energy JVs: €2.6bn on 2 October 2018 Mar-17 Mar-18 Undrawn credit line Gross cash In € million G
Slide 26: Net debt
Net debt In € million Net cash/(debt) (208) (104) (255) 128 47 (60) (58) Mar-17 FCF Acq. & disposals* Capital increase** Dividend paid Forex & other Mar-18 * includes GE related separation impact (e.g. IS&T) and advance payment on EKZ shares ** includes Indian Railways contribution to Madhepura capi
Slide 27: Equity
Equity Equity In € million 59 (55) 55 (220) 475 4,027 3,713 Mar-17 Net income* Pensions Dividends Share base payments Forex & other** Mar-18 * Group share ** includes currency translation adjustment of €(234) million ALSTOM – 16 May 2018 – P 27 © ALSTOM 2018. All rights reserved. Information contain
Slide 28: IFRS 15 implementation
IFRS 15 implementation New standard for revenue recognition Effective from fiscal year 2018/19 for Alstom Full retrospective method elected No impact on the cash position and no impact at completion on the economics Change in percentage of completion method from milestones to cost to cost
Slide 29: Agenda: Outlook
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Outlook 5 Siemens Alstom project ALSTOM – 16 May 2018 – P 29 © ALSTOM 2018. 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
Slide 30: Outlook
Outlook At constant perimeter and exchange rates. In accordance with IFRS 15. Medium term FY 2018/19 Outperform the market growth Sales to reach around €8bn Gradually improve profitability aEBIT margin to reach up to 7% Improve cash generation, with possible volatility over some short pe
Slide 31: Agenda: Siemens Alstom project
Agenda 1 Introduction 2 2020 strategy 3 Financial results 4 Outlook 5 Siemens Alstom project ALSTOM – 16 May 2018 – P 31 © ALSTOM 2018. 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
Slide 32: Indicative timetable
Indicative timetable 26 September 2017 23 March 2018 17 July 2018 End CY 2018 Closing conditions: • Antitrust and other regulatory approvals • AMF mandatory takeover waiver process and clearance • MINEFI clearance (French State – foreign investment control) • Siemens Mobility carve-out • Approval by
Slide 33: Proposed nominations of future Siemens Alstom Board of Directors
Proposed nominations of future Siemens Alstom Board of Directors Roland Busch1 Yann Delabrière2 Clotilde Delbos2 Sigmar H. Gabriel1 CTO and member of the currently Lead Independent Renault Executive Vice Former German Minister of Managing Board of Director of Alstom, as President and CFO, as Foreign
Slide 34: Organisation and culture
Organisation and culture Principles of the planned target organisation defined Intimacy with customers through empowered “Regions” Digitalisation, which is the key enabler of value creation in mobility, will be driven by “Mobility Automation” Innovation and Operational efficiency through tra
Slide 35: Q&A
Q&A ALSTOM – 16 May 2018 – P 35 © ALSTOM 2018. 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 c
Slide 36: Contacts and agenda
Contacts and agenda Agenda Contacts Selma BEKHECHI 17 July 2018 Investor Relations Director +33 (0)1 57 06 95 39 Shareholders’ Meeting Julien MINOT Investor Relations Manager 19 July 2018 +33 (0)1 57 06 64 84 Q1 2018/19 Orders and Sales investor.relations@alstomgroup.com ALSTOM – 16 May 2018 – P 36
Slide 37: www.alstom.com
, AEN Se ao. www.alstom.com ALSTOM pean, vies flac
Slide 38: Appendix: Creation of a global leader in Mobility
Appendix: Creation of a global leader in Mobility
Slide 39: 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 40: Agenda: Overview
Agenda 1 Overview 2 A global leader 3 Transaction terms ALSTOM – 16 May 2018 – P 40 © ALSTOM 2018. 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 particu
Slide 41: Creation of a global leader in Mobility
Creation of a global leader in Mobility Signed Memorandum of Understanding grants exclusivity to combine mobility businesses 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 footprint and customer ba
Slide 42: 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 43: Agenda: A global leader
Agenda 1 Overview 2 A global leader 3 Transaction terms ALSTOM – 16 May 2018 – P 43 © ALSTOM 2018. 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 particu
Slide 44: 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 45: 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 Revenue of rail activities (€bn) Ongoing industry consolidation over recent years… Year1 Acquirer Target 2016 Wabtec Faiveley 2015 Stadler Vossl
Slide 46: Combination of two highly 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 47: Industrial footprint and customer base highly 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 48: Global leader in digital innovation with strengthened R&D capacity
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 infrastru
Slide 49: Agility of a standalone business leveraging strengths of 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
Slide 50: 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 51: 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 52: Agenda: Transaction terms
Agenda 1 Overview 2 A global leader 3 Transaction terms ALSTOM – 16 May 2018 – P 52 © ALSTOM 2018. 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 particu
Slide 53: 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 Float / Other investors Alstom existing shareholders to receive special dividends of 28% 72%
Slide 54: 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 55: 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 56: www.alstom.com
, AEN Se ao. www.alstom.com ALSTOM pean, vies flac