Alstom Sa · EURONEXT:ALO
Alstom Sa — H1 2023/24 Earnings Presentation
45 slides from Alstom Sa's earnings presentation, Nov 17, 2023
Slide 1: Half Year Results Fiscal Year 2023/24
Half Year Results Fiscal Year 2023/24 15 November 2023 1
Slide 2: Disclaimer
Disclaimer ● This presentation contains forward-looking statements which are based on current plans and forecasts of Alstom’s management. Such forward-looking statements are relevant to the current scope of activity and are by their nature subject to a number of important risks and uncertainty facto
Slide 3: Agenda
Agenda CEO introduction Henri Poupart-Lafarge, Chairman and CEO ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― H1 2023/24 financial results Bernard Delpit, CFO ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― Company action plan Henri Poupart-Lafar
Slide 4: Introduction
1 Introduction Henri Poupart-Lafarge Chairman and CEO 4
Slide 5: Consolidating Investment Grade profile, delivering profitability and cash trajectory
Consolidating Investment Grade profile, delivering profitability and cash trajectory Commercial and operational action plan Balance sheet strengthening ✓ Orders selectivity ✓ Successful ramp-up ✓ Commitment to Investment Grade ✓ On-time delivery restored by FY25 ✓ €2bn inorganic measures ✓ Inventory
Slide 6: Operational and commercial plan to secure EBIT and cash trajectory
Operational and commercial plan to secure EBIT and cash trajectory Reinforcement of commercial €(1.1)bn cash outflow and operational plan ▪ Ramp-up > 10% per year creating working ▪ Acceleration of third phase of merger roadmap capital needs (optimization) ▪ Low level of commercial activity – orders
Slide 7: Decision to reinforce Balance sheet to secure Investment grade
Decision to reinforce Balance sheet to secure Investment grade Balance sheet to be strengthened €2bn inorganic measures Depending on market conditions, with flexibility on ▪ €(3.4)bn net financial debt timeline and sizing of the instruments: ▪ Higher interest rates impacts ▪ Assets disposal programm
Slide 8: Governance changes to improve accountability at all levels
Governance changes to improve accountability at all levels Lack of financial predictability Governance reinforcement ▪ Complex organization ▪ Operational organization simplification ▪ Weak planning ▪ Accountability at all levels ▪ Inherent cash-in volatility ▪ Proposed dissociation at next General A
Slide 9: Financial Results
2 Financial Results Bernard Delpit CFO 9
Slide 10: H1 2023/24 financial results in line with preliminary figures release
H1 2023/24 financial results in line with preliminary figures release ORDERS SALES €8.4bn €8.4bn 160 832 kton GWh Scope 1+2 Energy Book-to-bill +4.9% (o/w 8.8% org) Emissions1,2 consumption1,2 1.0 vs H1 2022/23 (11)% vs March 2023 (7)% vs March 2023 aEBIT FREE MARGIN CASH FLOW 5.2% €(1,119)m 64 24.3
Slide 11: Book-to-bill at 1 for the first half
Book-to-bill at 1 for the first half ORDERS H1 2023/24 (in €bn) (16.1)% 8.4 8.4 10.1 Signalling 1.0 8.4 1.7 APAC 1.5 Systems Americas 1.5 Services 2.1 5.2 Europe 3.8 Rolling stock H1 2022/23 H1 2023/24 H1 2023/24 H1 2023/24 ● Book-to-bill 1.0, backlog at €90bn ● Margin and cash on order intake suppo
Slide 12: Acceleration of ramp-up during Q2 with organic sales growth at 8.8%
Acceleration of ramp-up during Q2 with organic sales growth at 8.8% SALES H1 2023/24 (in €m) H1 2023/24 SALES SPLIT BY PRODUCT LINES +4.9% ROLLING STOCK: €4,463m (+2% vs H1 2022/23, o/w 6% organic growth) (3.1)% Ramp-up in the US and Brazil and solid level of execution in (0.8)% the EU, Kazakhstan a
Slide 13: aEBIT in line with preliminary release
aEBIT in line with preliminary release H1 H1 (in € million) Evolution 2022/23 2023/24 Sales 8,048 8,443 +4.9% Cost of Sales (6,988) (7,278) +4.1% Adjusted Gross Margin before PPA¹ 1,060 1,165 +60bps As a % of sales 13.2% 13.8% Research and development expenses (231) (254) before PPA2 +10.0% 2.9% 3.0
Slide 14: Profit improvement impeded by Aventra
Profit improvement impeded by Aventra aEBIT (in %) 20bps 50bps 40bps 30bps (80) bps* (30)bps 4.9% 5.2% * Negative gross margin impact © ALSTOM SA 2023. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that i
Slide 15: aEBIT to Net Income bridge
aEBIT to Net Income bridge H1 H1 (in € million) Evolution 2022/23 2023/24 Sales 8,048 8,443 +4.9% Adjusted EBIT 397 438 +10.3% Adjusted EBIT margin 4.9% 5.2% +30bps Restructuring and rationalisation costs (6) (7) +16.7% Integration, acquisition and other costs (116) (91) (21.6)% o/w Integration cost
Slide 16: FCF: heavy impact of Working capital changes, whereas FFO increases
FCF: heavy impact of Working capital changes, whereas FFO increases From EBIT* to Free Cash Flow (in € million) Capex / Cap Dev D&A 211m Trade Working Funds From Capital change JVs dividends 106m Operations Financial & Other EBIT* 275m Tax Cash Out H1 2023/24 FCF H1 2023/24 Contract Working Capital
Slide 17: Working Capital evolution
Working Capital evolution 30 31 March (in € million) September Variation 2023 2023 Inventories 3,729 4,216 487 Trade payables (3,640) (4,223) (583) Trade working capital (from 3 to 20 days of sales) Trade receivables 2,670 3,019 349 ● Strong effect of ramp-up acceleration in Q2 (inventories, receiva
Slide 18: Net debt evolution
Net debt evolution (in € million) 31 March 2023 Net cash/(debt) (2,135) (3,433) FCF (1,119) Dividends Leases FX and others 30 September 2023 Net cash/(debt) © ALSTOM SA 2023. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or sho
Slide 19: Net debt target
Net debt target (in € million) No dividend for FY 2023/24 30 September 2023 Net Debt Balance sheet inorganic FFO measures Contract 31 March 2026 Trade working working capital Net Debt capital changes changes © ALSTOM SA 2023. All rights reserved. Information contained in this document is indicative
Slide 20: Company Action Plan
3 Company Action Plan Henri Poupart-Lafarge Chairman and CEO 20
Slide 21: Strong backlog with confirmed GM% improvement trajectory
Strong backlog with confirmed GM% improvement trajectory Backlog Stratification – Gross Margin evolution 18.1% 18.3% 17.9% Gross margin on backlog 16.9% 17.2% 16.0% €90bn €87bn €81bn > 20% 10% to 20% €41bn €43bn €40bn < 0% to 10% o/w Legacy BT contracts trading at zero gross margin *Consistent with
Slide 22: Mid-term market potential >€230bn over next three years, enabling selectivity
Mid-term market potential >€230bn over next three years, enabling selectivity ALSTOM SITES €107bn SIGNALLING SYSTEMS EUROPE ROLLING STOCK €42bn AND COMPONENTS AMERICAs EUROPE: Large tenders for Rolling Stock and Services in DACH and in France CANADA and UNITED STATES €50bn Large Systems and Rolling
Slide 23: Ramp-up acceleration and long lead times is generating inventories
Ramp-up acceleration and long lead times is generating inventories Manufacturing Output FY 2022/23 FY 2023/24 FY 2024/25 ~5,200 >10% ~4,700 # cars > 13% 4,151 ~4,700 ~5,200 +7% ~2,450 + ~549 + ~500 Ramp-up ~1 year ahead… 3,892 4,151 + 2,250 build-up of build-up raw material of WIP increase of hard i
Slide 24: Delivery KPIs still require improvements to reach pre-acquisition level
Delivery KPIs still require improvements to reach pre-acquisition level Quality -35% on H1 -25% on H1 ~stable on H1 +6% on H1 Pre-acq Apr Mar Mar Sep Mar Mar Pre-acq Apr Mar Mar Sep Mar Mar Pre-acq Apr Mar Mar Sep Mar Mar Apr Mar Mar Sep AT x2 ’21 ‘22 ‘23 ‘23 ’24 ‘25 AT ’21 ‘22 ‘23 ‘23 ’24 ‘25 AT ’2
Slide 25: Snapshot on Amtrak and Aventra programs
Snapshot on Amtrak and Aventra programs AMTRAK Next Generation AVENTRA Platform US - High Speed Train UK - Regional Trains 6 contracts – 5 customers Key numbers / Achievements Key numbers / Achievements • Selling Price €1.5 billion, positive GM – 28 trains • Total Selling Price ~€5 billion, negative
Slide 26: New cost efficiency measures to secure our medium-term profitability trajectory
New cost efficiency measures to secure our medium-term profitability trajectory Selling & administrative expenses ( as a % of sales) 7.2% 7.2% 6.6% 6.4% 6.4% ● Headcount reduction of ~1,500 FTEs, mainly S&A, out of ~82,000 FTEs as of September 2023. ● Around 1pp S&A / Sales ratio reduction targeted
Slide 27: New measures towards improving trade working capital efficiency
New measures towards improving trade working capital efficiency Trade Working Capital (in days of sales) ● Inventories: targeting reduction from 91 days as of H1 to ~80 days by March 2024, with mid-term target at 75 days Contract Working Capital (in days of sales) ● Improve Operational KPIs to accel
Slide 28: Consolidating Investment Grade profile, delivering profitability and cash trajectory
Consolidating Investment Grade profile, delivering profitability and cash trajectory Commercial and operational action plan Balance sheet strengthening ✓ Orders selectivity ✓ Successful ramp-up ✓ Commitment to Investment Grade ✓ On-time delivery restored by FY25 ✓ €2bn inorganic measures ✓ Inventory
Slide 29: Mid-term targets confirmed
Mid-term targets confirmed FY 2023/24 outlook and mid-term targets confirmed ● Book to bill above 1 ● Sales organic growth: above 5% ● aEBIT around 6% ● FCF within the range €(500m) - €(750)m Mid-term targets The Group has based its FY 2023/24 outlook on a central inflation To be reached in FY 2025/
Slide 30: Contacts & Agenda
Contacts & Agenda CONTACTS AGENDA 24 January 2024 Third quarter FY 2023/24 Martin VAUJOUR orders and sales VP Investor Relations 15 May 2024 Estelle MATURELL ANDINO FY 2023/24 results Deputy Head Investor Relations investor.relations@alstomgroup.com © ALSTOM SA 2023. All rights reserved. Information
Slide 31: Financial Calendar
Financial Calendar 16 November HY 23/24 roadshow in London – Bank of America London, UK 17 November HY 23/24 roadshow in Paris – Kepler Cheuvreux Paris, France 20 November HY 23/24 roadshow in Frankfurt – Jefferies Frankfurt, GERMANY 21 November HY 23/24 roadshow in Zurich – Jefferies Zurich, SWITZ
Slide 32: Q&A session
Q&A session © ALSTOM SA 2022. 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 33: Appendix
Rai o S ® 2. Q <x if i HT abd aaaia aaa aa siti f ALSTOM
Slide 34: HY 2023/24 backlog per regions and product lines
HY 2023/24 backlog per regions and product lines Backlog breakdown per regions (in € million) Backlog breakdown per product line (in € million) Systems €7,320m Asia Pacific 8% Signalling Americas €12,975m €7,572m €14,245m 14% 8% 16% Rolling stock €43,328m Africa, Middle East & Europe 48% Services Ce
Slide 35: HY 2023/24 Sales per regions and product lines
HY 2023/24 Sales per regions and product lines Sales breakdown per regions (in € million) Sales breakdown per product line (in € million) Systems €751m Asia Pacific €1,165m 9% 14% Signalling €1,243m 15% Americas €1,664m Europe €4,875m 20% 57% Rolling stock €4,463m Services €1,986m 52% 24% Africa, Mi
Slide 36: Sales by currency
Sales by currency H1 2023/24 Currencies as a % of sales EUR 46.3% USD 12.5% GBP 11.5% INR 5.0% AUD 4.8% CAD 3.0% SEK 2.7% ZAR 2.6% MXN 2.2% KZT 1.2% BRL 1.2% Currencies below 1% of sales 7.1% © ALSTOM SA 2023. All rights reserved. Information contained in this document is indicative only. No represe
Slide 37: Equity in € million
Equity in € million * 9,102 9,121 9,117 March 2023 Other movements Net income Dividends Capital increase Share based September 2023 payment *capital increase by issuance of new shares linked with scrip dividend © ALSTOM SA 2023. All rights reserved. Information contained in this document is indicati
Slide 38: Bridge consideration – From Entreprise Value to Equity Value
Bridge consideration – From Entreprise Value to Equity Value (in € million) H1 2023/24 Total Gross debt, incl. lease obligations (1) 4,897 Pensions liabilities net of prepaid and deferred tax asset related to pensions (2) 632 Non controlling interest (3) 104 Cash and cash equivalents (4) (826) Other
Slide 39: Bombardier Transportation PPA provisional amortisation plan
Bombardier Transportation PPA provisional amortisation plan As per P&L (in € million) Booking 1 FY 2020/21 (71) FY 2021/22 (428) FY 2022/23 (436) FY 2023/24 (368) 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 2027/28 (203)
Slide 40: Reconciliation between consolidated income statement and MD&A view, 30 September 2023
Reconciliation between consolidated income statement and the MD&A management view as of 30 September 2023 (in € million) Tota l Adjustments Tota l Con s ol i da ted Con s ol i da ted Fi n a n ci a l Fi n a n ci a l (1) (2) (3) S ta tem en ts (GAAP) S ta tem en ts (M D &A vi ew) Adjustments as of 30
Slide 41: Reconciliation between consolidated income statement and MD&A view, 30 September 2022
Reconciliation between consolidated income statement and the MD&A management view as of 30 September 2022 (in € million) Tota l Adjustments Tota l Con s ol i da ted Con s ol i da ted Fi n a n ci a l Fi n a n ci a l Adjustments as of 30 September 2022: S ta tem en ts (1) (2) (3) (4) S ta tem en ts (G
Slide 42: Non-GAAP financial indicators definitions (1/3)
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 obligations between
Slide 43: Non-GAAP financial indicators definitions (2/3)
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 restating it
Slide 44: Non-GAAP financial indicators definitions (3/3)
Appendix - Non-GAAP financial indicators definitions (3/3) ● Gross margin % on backlog Gross Margin % on backlog is a Key Performance Indicator to present the expected performance level of firmed contracts in Backlog. It represents the difference between the sales not yet recognized and the cost of
Slide 45: www.alstom.com
www.alstom.com www.alstom.com 45