Alstom Sa · EURONEXT:ALO
Alstom Sa — Investor Day (May 2022)
48 slides from Alstom Sa's investor day presentation, May 11, 2022
Slide 1: Alstom Investor Day
Alstom Investor Day May 11th, 2022
Slide 2: Agenda
Agenda Introduction Henri Poupart-Lafarge, Chairman and Chief Executive Officer ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― Rolling Stock and Components Danny Di Perna, Executive VP and Chief Operating Officer ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――
Slide 3: Introduction
1 Introduction Henri Poupart-Lafarge, Chairman and Chief Executive Officer
Slide 4: A successful first year integrating Bombardier Transportation, setting foundation for effective turnaround
A successful first year integrating Bombardier Transportation, setting foundation for effective turnaround Very robust commercial momentum and high customer satisfaction 8.1 Net Promotor Backlog execution delivered as per target Score 80% One Alstom team: Global key processes and IT tools convergenc
Slide 5: Our One Alstom team at the heart of our journey
Our One Alstom team at the heart of our journey A SUCCESSFUL FIRST YEAR OF INTEGRATION 1 million connections to our learning platforms in 6 months 86% employees are aware of the new Alstom Values 1 80% employees are proud to work for Alstom1 SOLID PEOPLE FOUNDATION AND A GREAT DYNAMIC ● An attractiv
Slide 6: Services: Our strong order booking demonstrates customer confidence
Services Our strong order booking demonstrates customer confidence … SECURING FUTURE SALES €4.2 BILLION OF SERVICES ORDERS BOOKED IN 2021/22 AND MAINTAINING GROWTH Book-To-Bill Ratio > 1.1 each year over the past 5 years DALLAS (10 YEARS OPERATION & MAINTENANCE – US) SANTIAGO M7 (20 YEARS FULL MAINT
Slide 7: Signalling: Progressing well, in line with our ambition
Signalling Progressing well, in line with our ambition #2 IN A MARKET UNDER CONSOLIDATION STRONG COMMERCIAL ACHIEVEMENTS IN 2021/22 In € - Sales linked to all Signalling activities (estimated) ● Mainline: Cambridge (UK), Bursa– Yenisehir– Osmaneli (Turkey), Stuttgart (Germany) Global competitor 1 (*
Slide 8: Turnkey: Sustain our leadership and deliver strong results
Turnkey Sustain our leadership and deliver strong results STRONG MARKET DRIVERS ALSTOM’S KEY ASSETS Strong underlying urban railway ● Metro Turnkey leader for several years transportation market ● Proven track record in system integration and optimization activities Increasing complexity of railway
Slide 9: Rolling Stock and Components
2 Rolling Stock and Components Danny Di Perna Executive VP and Chief Operating Officer
Slide 10: Alstom is the market leader in Rolling Stock & Components
Alstom is the market leader in Rolling Stock & Components RSC IS A LARGE AND STEADY MARKET ALSTOM: A CLEAR RSC MARKET LEADER UNIFE accessible market 2020-2022 RSC Market shares 2019-2021, in % including turnkey share (WRMS 2020) – Average in € Bn / year 5% 38% 8% 30% Regional/Commuter HS/VHS 10% Urb
Slide 11: An industry leading product portfolio
An industry leading product portfolio PLATFORM & TECHNOLOGIES ENABLE CUSTOMISATION & STANDARDISATION COVERING ALL SEGMENTS Avelia™ Capacity Coradia™ Traxx™ Locomotive Metropolis™ Innovia™ Avelia™ Innovia™ Metro Commuter Movia™ High & Flexity™ very high- Citadis™ Regional speed Mitrac™ & intercity Me
Slide 12: Component building blocks drive competitiveness and product performance
Component building blocks drive competitiveness and product performance COMPLETE SPECTRUM OF BROADEST COMPONENT VERTICALISED GREEN & CLEAN SOLUTIONS PORTFOLIO IN THE INDUSTRY WITH SELECTIVE M&A H 2, GREEN TRACTION, BATTERY Bogies & Drives Vertical integration of core Brakes components and key techno
Slide 13: A unique global-local presence and capability
A unique global-local presence and capability WORLD-CLASS WELL BALANCED CAPABILITIES BETWEEN COMPETENCIES CUSTOMER PROXIMITY AND COST COMPETITIVENESS Rolling Stock & Components Key Sites SIEGEN KATOWICE +50 Production sites in 22 countries DERBY BARCELONA 24m hours manufacturing across all key SAHAG
Slide 14: Technology investments targeted for a greener, smarter and more inclusive mobility
Technology investments targeted for a greener, smarter and more inclusive mobility KEEPING THE EDGE OPTIMIZING ENHANCING IN ZERO EMISSION SOLUTION TOTAL COST OF OWNERSHIP PASSENGER COMFORT ● Partnership to decarbonise ● Avelia Horizon under dynamic test ● PEPA™ filter, an antiviral HVAC filter freig
Slide 15: Ambition to grow profitability and strengthen our leading market position
Ambition to grow profitability and strengthen our leading market position GROW PROFITABLY AND DELIVER STRATEGIC ORIENTATION TO CUSTOMER COMMITMENTS AND KEY INITIATIVES PLATFORMS Market share target +3 to 4pp by FY2024/25 • Platforming standardisation & components building blocks • Tendering focused
Slide 16: A clear path towards growth and profitability restoration
A clear path towards growth and profitability restoration GROW PROFITABLY… … MITIGATE GLOBAL HEADWINDS Footprint utilisation 1 Manage industrial & material & labor Product Platforming & inflation convergence Standardisation Operational Digitalisation Execute project excellence backlog: Acquisition v
Slide 17: Process rigour and execution focus create value for customers and stakeholders
Process rigour and execution focus create value for customers and stakeholders INTEGRATE STABILISE PROFITABLE TRANSFORM GROWTH © ALSTOM SA 2022. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given orshould be relied on that it is com
Slide 18: Stabilise: Turning around difficult projects
2.1 STABILISE Turning around difficult projects Danny Di Perna Executive VP and Chief Operating Officer
Slide 19: A Rolling Stock and Components backlog of €41bn, comprising ~130 active projects
A Rolling Stock and Components backlog of €41bn, comprising ~130 active projects PROJECT BACKLOG BREAKDOWN PER SEGMENT Light Rail 26 ~€3bn Regional 27 ~€10bn projects backlog projects backlog 26 ~€7bn 9 ~€5bn Urban High-Speed projects backlog projects backlog 22 ~ €12bn 16 ~€4bn Commuter projects ba
Slide 20: FY2021/22 key Rolling Stock and Components backlog and sales information
FY2021/22 key Rolling Stock and Components backlog and sales information €41 bn €8.6 bn ~130 Projects1 Backlog Traded Sales FY 2021/22 Urban High-speed Regional Locomotive ~110 Projects Commuter ~130 Active Light Rail Projects Components €2.3 bn ~20 Projects Sales at zero gross margin A portion of t
Slide 21: A comprehensive portfolio risk assessment completed
A comprehensive portfolio risk assessment completed 130 PROJECTS THOROUGHLY ASSESSED (H1 2021/22) HIGHLIGHTING MAIN ROOT CAUSES Operational exposure Illustration • Incomplete or partial compliance in requirements management process HIGH CRITICALITY • Inadequate project planning, ~20 projects schedul
Slide 22: Project stabilisation action plan deployed with expert task forces
Project stabilisation action plan deployed with expert task forces TASK FORCE EXPERT GROUPS LAUNCHED Inject development experts Review all customer requirements Align project scheduling and resources Enforce Design for Quality and Project Management standards Punctual support on demand and extensive
Slide 23: Systematic process and actions deployed to reduce project risks are yielding results
Systematic process and actions deployed to reduce project risks are yielding results APPROACH TO SUPPORT CRITICAL PROJECTS RISK CRITICALITY INDEX EVOLUTION 4.0 4.0 4.0 3.4 • Systematic and comprehensive maturity assessment based on 3.0 3.0 3.0 common set of 15 criteria -26% 2.5 2.0 2.0 -20% 2.0 ~2 I
Slide 24: Project Management best practices being deployed on all new projects
Project Management best practices being deployed on all new projects LEVERAGING STANDARD DEVELOPMENT PROCESS TOOLS… CLEAR OBJECTIVES Compliance to main Requirements Coverage & Design for Technical Performance targets Validation of Dev. Assumptions Operation & Services 100% Launch Gate Review on time
Slide 25: Reinforced action plan to mitigate inflation cost effect
Reinforced action plan to mitigate inflation cost effect INCREASED PRESSURE OVER H2 2021/22 MULTI-DISCIPLINARY ACTION PLAN Evolution of relevant cost items indexes Indexed, Yearly evolution 2019-2025E, Base = 2019 1 Price adjustment on new tenders mirroring cost increase 2 Commercial contract pricin
Slide 26: Supply chain turbulence mitigated in 2021/22
Supply chain turbulence mitigated in 2021/22 SUPPLY CHAIN CONSTRAINTS DOUBLE DOWN ON ACTION PLAN IN FY 2022/23 Electronic components material capacity issues 1 Crisis cell to optimise scarce material allocation ● Semiconductor chip shortages aggravated by the pandemic In-depth analysis of semiconduc
Slide 27: Integrate: Working as One
2.2 INTEGRATE Working as One Benjamin Fitoussi President Rolling Stock and Components – Development & Operations
Slide 28: Integrate: Work as One
INTEGRATE Work as One OUR TARGET Bring back the operational performance to nominal in March 2023 and deliver the committed synergies 1 2 3 4 BRING OUR ALIGN AND OPTIMISE WORK AS OPERATIONS TO THE PURSUE CASH FOCUS OUR PRODUCT ONE ALSTOM REQUIRED LEVEL OF PROGRAM PORTFOLIO PERFORMANCE © ALSTOM SA 202
Slide 29: Now able to operate as ONE COMPANY
1 Now able to operate as ONE COMPANY 1 March 2021 March 2022 March 2023 March 2025 80% convergence Full deployment Full digitalisation KPIS & DATA MANAGEMENT Digital systems boosting process alignment & performance aligned ● Digital suite with PLM (Delmia/Catia) >80% RSC PROCESSES Engineering: ● Wor
Slide 30: Operational performance growing with integration
1 Operational performance growing with integration 1 Pre-acq Mar Mar Mar Mar Pre-acq Mar Mar Mar Mar Pre-acq Mar Mar Mar Mar Pre-acq Mar Mar Mar Mar AT ‘21 ‘22 ’23 ‘25 AT ‘21 ‘22 ’23 ‘25 AT ‘21 ‘22 ’23 ‘25 AT ‘21 ‘22 ’23 ‘25 Pre-acq Pre-acq Mar Mar Mar Mar Pre-acq Mar Mar Mar Mar Pre-acq Mar Mar Mar
Slide 31: Align and optimize our product portfolio
2 Align and optimize our product portfolio 2 A CLEAR ROADMAP TO EXTEND MARKET COVERAGE AND TIME-TO-MARKET WHILE IMPROVING COSTS From Day 1 FY 2021/22 FY 2022/23 FY 2023/24 INVENTORY CONVERGE RATIONALISE STANDARDISE AS PART OF TRANSFORM A DEFINED DECISION TREE AT ALL LEVELS OF THE BILL OF MATERIAL Op
Slide 32: Convergence finalised, rationalisation on-going on tenders
2 Convergence finalised, rationalisation on-going on tenders 2 ILLUSTRATION AT ROLLING STOCK LEVEL ILLUSTRATION AT SUB-SYSTEM AND COMPONENT LEVEL Regional platform Before acquisition Today BOGIES & DRIVES 35 active products Coradia Stream™ 7 product families 20 reference solutions Talent™ 3 74 activ
Slide 33: Establish best-in-class project execution and capabilities
3 Establish best-in-class project execution and capabilities 3 2025 Targets 90% Achieve excellence in our Continuous improvement focus Best-in-class partner Gate Reviews tender and project execution and right-first-time culture for our customers Go On Time PM2020: FROM A METIER BASED TO A SUB-SYSTEM
Slide 34: Procurement on-track to capture value, leveraging Group size
3 Procurement on-track to capture value, leveraging Group size 3 1st Supplier day 2nd Supplier day March 2021 March 2022 March 2023 April 2021 Q1 2021/22 SOURCING SUMMITS SUPPLIER DAY NEGOTIATIONS 4 LEVERS MOVING FORWARD DONE WITH TOP 600 SUPPLIERS ● Co-development ● Design-to-cost ● Understanding o
Slide 35: Driving the right quality standards across our value chain
3 Driving the right quality standards across our value chain 3 STRENGTHEN QUALITY LEAN AND EFFICIENT COMPETENCE PROCESSES CUSTOMER SATISFACTION ● Engineering (Right First Time) ● Development For Quality ● Reliability Growth & Warranty ● Industrial (Zero Defect Program) ● Focus major production Ramp-
Slide 36: Pursue Cash Focus programme
4 Pursue Cash Focus programme 4 AMBITION KEY INITIATIVES 2024/25 OBJECTIVES ● Optimise Cash across ● Cash-based selectivity in tenders Alstom entire value chain ● Alignment strategic & tactical planning ● Cash conscious supplier contracts Free Cash ● Optimise hard inventories level Flow: 80% ● Incre
Slide 37: Synergies on-track and run-rate target uplifted to €475–500m from FY 2025/26 onwards
Synergies on-track and run-rate target1 uplifted to €475 – 500m from FY 2025/26 onwards SYNERGIES RUN RATE (IN € MILLION)² 2025/26 SOURCES OF UPLIFT 475-500 BONDS FINANCING 400 ● Incremental industrial PROCUREMENT SYNERGIES efficiency and best REAL ESTATE use of products through massification MANAGE
Slide 38: Transform: Growing profitably
2.3 TRANSFORM Growing profitably Benjamin Fitoussi President Rolling Stock and Components – Development & Operations
Slide 39: Transform
TRANSFORM 1 2 3 4 ACCELERATE THE EFFORT GET THE BEST OF OUR FURTHER DIGITALIZE LEVERAGE OUR PEOPLE OF STANDARDISATION / DIVERSE FOOTPRINT OUR OPERATIONS SKILLS AND CAPABILITIES MODULARIZATION AND SCALE ADVANTAGE © ALSTOM SA 2021. All rights reserved. Information contained in this document is indicat
Slide 40: Recent RSC orders are based on standardised, reliable and proven platforms
1 Recent RSC orders are based on standardised, reliable and proven platforms 1 Illustration of major 2021/22 wins based on “ best-seller” products CORADIA STREAM™ METROPOLIS™ X’TRAPOLIS™ ● 29 High-Capacity electric double- ● 55 large gauge Metros for Cairo L1 ● Up to 750 new commuter rail cars deck
Slide 41: Platform product management and standardisation
1 Platform product management and standardisation 68 components, 48 buy modules 1 PRODUCT TENDER PROJECT Standard Operability & Performance Reference Solution 1 Variability management Standardisation Assess Standardisation Coeff (Re-use level) Standard architecture Coeff (Re-Use) minimum at every pr
Slide 42: Increased Engineering efficiency by leveraging Best Cost Countries site specialisation
2 Increased Engineering efficiency by leveraging Best Cost Countries (BCC) site specialisation 2 POLAND | EUROPEAN PROJECT SUPPORT Aligned organisation model > Katowice Deployed target processes Massify specialisation & return of experience : - New development sites organized by product INDIA | GLOB
Slide 43: A unique global-local manufacturing footprint to meet growing demand for localisation
2 A unique global-local manufacturing footprint to meet growing demand for localisation while delivering competitiveness 2 Customers are looking for reliable, tailored and competitive solutions delivered close to them TENDERS WON THANKS TO ABILITY PROXIMITY TO DELIVER LOCAL CONTENT TREN MAYA (MEXICO
Slide 44: Leveraging Best Cost Countries footprint boosts competitiveness
2 Leveraging Best Cost Countries (BCC) footprint boosts competitiveness 2 AN AMBITIOUS BEST COST COUNTRIES ROADMAP EXAMPLES OF RECENT FOR MANUFACTURING INVESTMENTS BCC Roadmap : Mar ‘22 43% Mar ‘25 60% Light Rail Carbody Locos assembly A FOOTPRINT ENABLING TO MANUFACTURE AT THE BEST COSTS CLOSE TO O
Slide 45: Roadmap to transformation in Germany, Austria and Switzerland
2 Roadmap to transformation in Germany, Austria and Switzerland 2 ● Maintain market position through GERMANY competitive offering & strengthened • Planned reduction of around 900 to 1300 project execution. manufacturing positions over next 3 years • Over 700 new positions in engineering, digitalizat
Slide 46: Drive the digital transformation journey
3 Drive the digital transformation journey 3 Increase automation Deploy innovative 2025 Targets and digitalisation digital reality scope SERIAL WATERTIGHNESS -6%¹ RSC Engineering hours ADDITIVE AUGMENTED -10%¹ TARBES, FRANCE RSC Manufacturing hours MANUFACTURING REALITY WELDING ROBOT 100%¹ Converged
Slide 47: Investing in people with World Class Engineering & Manufacturing programme
4 Investing in people with World Class Engineering & Manufacturing programme 4 DACH : AMERICAS : 13 Manufacturing experts 25 Manufacturing experts 103 Engineering experts 87 Engineering experts EUROPE : 61 Manufacturing experts 204 Engineering experts FRANCE : 86 Manufacturing experts APAC : 282 Eng
Slide 48: Rolling Stock and Components journey ahead
Rolling Stock and Components journey ahead ❶ Significant improvement in project stabilization achieved in 2021/22 - back to nominal performance expected by March 2023 ❷ Operating already as One Team, with best-in-class converged processes and product portfolio by March 2025 ❸ Clear plan to deliver t