Alstom Sa · EURONEXT:ALO
Alstom Sa — Shareholder Meeting (July 2014)
85 slides from Alstom Sa's shareholder meeting presentation, Jul 1, 2014
Slide 1: Shareholders' Meeting
Shareholders’ Meeting 1 July 2014
Slide 2: Introduction
Introduction Patrick Kron ALSTOM Shaping the future
Slide 3: Opening
Opening Kareen CEINTRE - Company Secretary
Slide 4: Agenda of the Shareholders' Meeting
• Agenda of the Shareholders’ Meeting: Notice of meeting, page 3 • Resolutions: Notice of meeting, pages 37 to 46 P4
Slide 5: Alstom & You
Alstom & You Patrick Kron ALSTOM Shaping the future
Slide 6: Shareholding structure
Shareholding structure As of 31 March 2014 3% 1% 12% 18% 7% 54% 29% 58% 18% France North America UK & Ireland Institutional investors Bouygues Rest of Europe Rest of the World Individual shareholders Employees You are 250,000 shareholders P6
Slide 7: Your information
Your information A permanent dialogue with individual shareholders Dedicated web Shareholders’ Information Alstom Site visits page section letter meetings Open de France www.alstom.com/ investors Shareholders’ tribune Contact us Email address: investor.relations@chq.alstom.com P7
Slide 8: Alstom in 2013/14
Alstom in 2013/14 Patrick Kron
Slide 9: Main events
Main events Resilience in profitability, negative free cash flow despite a positive H2 • Decrease in orders • Organic growth in sales and resilience in profitability • “D2e” cost savings’ performance plan well on track • Negative free cash flow over the year, positive in H2 • No dividend proposed to
Slide 10: Contrasted order intake
Contrasted order intake • Thermal power: strong Service orders, Order intake weak new build contracts In € billion • Renewable Power: strong commercial 21.7 23.8 21.5 performance • Grid affected by lack of HVDC projects • Transport benefiting from strong demand for urban products and systems 2011/12
Slide 11: Commercial successes
Commercial successes THERMAL POWER RENEWABLE POWER • Poland – equipment for the country’s • Brazil – several onshore wind contract largest coal-fired power plant • Israel – first pumped storage power • USA - maintenance and gas turbine station upgrade packages for four power stations • Albania – equ
Slide 12: R&D and capex in line with plans
R&D and capex in line with plans • R&D expenses of €733 million − Thermal Power: gas turbines development, focus on flexibility and increased combined efficiency − Renewable Power: successful tidal turbine test − Grid: launch of MaxSineTM eStorage (storage solution addressing the instabilities on th
Slide 13: R&D and capex in line with plans
R&D and capex in line with plans • Capex of €565 million − Extension of the hydro equipment manufacturing site in Tianjin, China − Wind tower factory in Canoas, Brazil − Bogie manufacturing plant in Canada − Smart grid excellence centre in France P 13
Slide 14: "Dedicated to Excellence" plan progressing well
“Dedicated to Excellence” plan progressing well One third of the target achieved to date d2e: realised and target savings In € million 1,500 > 500 End March 14 End March 16 €1.5 billion of savings targeted by end March 2016 vs. 2012/13 cost base P 14
Slide 15: Examples of initiatives realised by Sector
Examples of initiatives realised by Sector THERMAL POWER RENEWABLE POWER • Adaptation plan in European • Grouping of most French boiler capacity progressing hydro engineering and well support activities in Grenoble • Lead time decrease • Reorganisation of Spanish industrial footprint in wind GRID TR
Slide 16: Thermal power – Key figures
Thermal power – KEY FIGURES Margin supported by d2e, good execution and mix In € million Orders Sales and operating • Better order intake in H2 margin -6% • Sales reflecting slower orders -4% intake over the recent quarters 9,574 9,179 9,017 8,787 • Resilient Thermal Services 10.4% 10.6% 2012/13 201
Slide 17: Renewable power – Key figures
Renewable power – KEY FIGURES Margin affected by unfavourable mix and pressure on wind prices In € million Orders Sales and operating • Growth in orders fuelled by margin hydro projects booked (Albania, Turkey, Canada, +26% +1% India, Israel) and by strong orders in wind in Brazil 2,565 1,803 1,829
Slide 18: Grid – Key figures
Grid – KEY FIGURES Pricing pressure in standard products partly mitigated through d2e In € million Orders Sales and operating • Stable orders when excluding margin Dolwin 3 and Champa HVDC contracts booked in 2012/13 -31% -1% • No awards of large HVDC 5,058 projects over the period 3,514 3,829 3,777
Slide 19: Transport – Key figures
Transport – KEY FIGURES Improvement in margin thanks to volumes, d2e and good execution In € million Orders Sales and operating • Sound level of orders with margin major contracts signed in Saudi Arabia, Chile and France -10% +8% • Prasa contract booked in Q1 7,109 6,402 5,876 2014/15 5,458 5.4% 5.6
Slide 20: Corporate social responsibility (1/2)
Corporate social responsibility Alstom’s contribution to sustainable development (1/2) • A CSR policy covering all the aspects of sustainable development • A products’ and solutions’ offering helping Alstom’s clients Tramway Citadis de Dublin, Irlande to effectively limit their environmental impact
Slide 21: Corporate social responsibility (2/2)
Corporate social responsibility Alstom’s contribution to sustainable development (2/2) • A Group strongly committed to diversity and equality at work • Better working conditions with an absolute priority on employees and sub-contractors’ safety Injury Frequency Rate (12 rolling months) – Alstom empl
Slide 22: Strategic reorientation
Strategic reorientation Patrick Kron
Slide 23: GE Binding Offer on Energy
GE Binding Offer on Energy GE to Acquire • Scope : Thermal Power, Renewable Power and Grid sectors, corporate and Alstom Energy shared services • Binding and fixed price of €12.35bn (or 13.8x EV/EBIT 2013/14) • All terms and conditions unchanged as compared to the initial offer 50/50 Joint Ventures
Slide 24: Acquisition of GE Signalling and Global Rail Alliance with GE
Acquisition of GE Signalling and Global Rail Alliance with GE GE Signalling: a strategic acquisition Global Rail Alliance • Sales of €400 million, around 1,200 • Commercial support from GE in selected employees in 15 sites geographies, notably in the USA • Reinforcing Alstom’s global position in • S
Slide 25: Alstom Post Transaction
Alstom Post Transaction TRANSPORT GRID RENEWABLE Global NUCLEAR (Alstom Grid + (Hydro + offshore and French STEAM GE Digital Energy) renewable) 100 % 50/50 JVs • Sales: €6.2bn • Sales: €4.9bn* • Sales: €1.3bn* • Sales: €1.4 bn* • Employees: c. 29,500 • Employees: c. 21,000* • Employees: c. 7,600* •
Slide 26: Next Steps
Next Steps Immediately • Information – consultation with works councils • Implementing JVs agreements, GE Signalling acquisition and global rail alliance • Launching Antitrust and regulatory authorisations process H2 2014 • Finalisation and Signing of acquisition contract and other agreements • Gene
Slide 27: Changes in shareholding structure
Changes in shareholding structure • Signature of an agreement between the French State and Bouygues allowing, after return to shareholders of cash related to contemplated transaction with GE: − The French State to borrow shares from Bouygues to obtain up to 20% of Alstom’s voting rights − The grant
Slide 28: Alstom Transport
Alstom Transport Henri Poupart-Lafarge
Slide 29: Alstom Transport today
Alstom Transport today Sales breakdown (2013/ 14) Trains Systems * CIS 6% Signalling Asia Pacific 10% France 22% 18% Middle- Trains East/Africa 49% 8% Services Services Signalling Latin 19% America7% North Europe 42% Systems America 5% 14% Key figures € Bn March 14 Backlog 23.2 • 4 year backlog Orde
Slide 30: A growing worldwide market
A growing worldwide market Urbanisation Public funding support Sustainable development Economic growth Europe CIS +5 % North +2 % • Solid growth factors America France +5 % • Market worth more than +3 % Asia Pacific €100 Bn, driven by urban and regional Latin +7 % +0.2 % America +9 % ME/ • Growth in
Slide 31: Alstom Transport: a unique market position
Alstom Transport : a unique market position 8.1 7.6 6.4 5.9 5.5 3.6 3.7 1.9 1.5 1.5 1.3 1.0 0.4 Worldwide Services Systems Trains Integrated Sig. • With a 100 year experience in rail, one of the only worldwide, integra
Slide 32: A global/multi-local strategy
A global/multi-local strategy Europe • 11,800 employees CIS • Partnerships: ABC • 250 employees Recent commercial success Electrification & SSL (UK), IRVIA (Spain) • Partnerships: TMH (Russia) & EKZ North America (Kazakhstan) • 1,300 employees France Asia Pacific • 9,200 employees • 2,000 employees
Slide 33: An integrated offering strategy
An integratred offering strategy Recent commercial success Complete system Bundled offer between 2 Integrated segments solutions with several products Simple Complete system for Riyadh metro product (Saudi Arabia) - € 1.2 Bn contract - Trains: 69 Metropolis trainsets Increasing demand for integratio
Slide 34: A strategy based on continuous innovation
A strategy based on continuous innovation Examples • Propose best-in-class technology • Safety/Performance • Impact on the environment Lille metro (France) including Urbalis Fluence signalling solution: €250 million • Passenger experience • Improve the competitiveness of our offer • Reduced total co
Slide 35: A profitable growth strategy
A profitable growth strategy • 3 pillars: Evolution of the operating margin • Increase in volumes • Improvement of mix • Decrease in costs • d2e performance plan implemented at Alstom 5.6% Transport 5.4% 5.1% • Competitive offering • Excellence in delivery 2011/12 2012/13 2013/14 P 35
Slide 36: Conclusion
Conclusion • Solid market and fundamentals • A technology leader with unique worldwide presence and integrated offering • A profitable growth strategy • A strengthened balance sheet after disposal of Energy activities Major assets for the Alstom of tomorrow P 36
Slide 37: Financial results 2013/14
Financial results 2013/14 Nicolas Tissot
Slide 38: Group operating performance
Group operating performance In € million Sales Income from operations +4% -3% 0% 1,463 1,424 20,269 20,269 7.2 % 7.0 % 2012/13 2013/14 2012/13 2013/14 -x% % change reported -x% % change organic P 38
Slide 39: Income statement
Income statement In € million 2012/13* 2013/14 Variation Income from operations 1,463 1,424 (3)% Restructuring charges (137) (220) Other non-operating expenses (137) (196) EBIT 1,189 1,008 (15)% Financial result (266) (308) Tax result (186) (163) Impair. loss of equity investees - (23) Non controlli
Slide 40: Volatility of free cash flow
Volatility of free cash flow In € million 408 400 200 0 (200) (171) (400) (600) (800) (573) (1,000) H1 H2 H1 H2 H1 H2 2011/12 2012/13 2013/14 2011/12 2012/13 2013/14 P 40
Slide 41: Net debt evolution
Net debt evolution In € million (2,342) (171) (3,019) (259) (89) (158) Mar-13 FCF Dividends Acq. & Disposals Forex & Other Mar-14 P 41
Slide 42: Equity evolution
Equity evolution In € million 53 556 (259) (328) 5,087 5,109 Mar-13* Net income Dividends Pensions Forex & Other Mar-14 * Adjusted for revised IAS 19 P 42
Slide 43: Corporate Governance
Corporate Governance Patrick Kron
Slide 44: Board of directors
Board of directors A diversified Board 14 Directors • 9 independent Directors (64 %) • 7 foreigners (50 %) • 4 women (28 %) P 44
Slide 45: Board of Directors – Activity in 2013/14
Board of Directors – ACTIVITY IN 2013/14 • Review of the Group’s financial situation and risks; approval of Activity of the Board of Directors half-year and annual results in 2013/14 • Review of the Group’s growth strategy and its activities • Deliberations on the d2e competitiveness plan and the •
Slide 46: Board of Directors – Lead Director
Board of Directors – Lead Director • Lead Independent Director: Jean-Martin Folz appointed when the functions of Chairman of the Board of Directors and Chief Executive Officer are combined Role defined in the Board’s internal rules (article 6): - ensures the proper functioning of the corporate g
Slide 47: Board of Directors - Resolutions 5, 6, 7 and 8
Board of Directors - Resolutions 5, 6, 7 and 8 Renewal of directorships • Bouygues S.A. • Olivier Bouygues • Lalita D. Gupte (independent director) • Katrina Landis (independent director) P 47
Slide 48: Board of Directors - Resolution 9
Board of Directors - Resolution 9 Proposed appointment of a Director • Mrs Bi Yong Chungunco Nationality: Filipino Main function: Senior Vice President, Group General Counsel and Corporate Secretary of Lafarge S.A. Independent Director Experience - International companies, law firms P 48
Slide 49: Board of Directors after the Shareholders' Meeting
Board of Directors after the Shareholders’ Meeting 14 members • 10 independent Directors (71%) • 8 foreigners (57%) • 5 women (36%) P 49
Slide 50: Committees of the Board
Committees of the Board • 3 specialised Committees chaired by independent Directors Nominations and Ethics, Compliance and Audit Committee Remuneration Sustainability Committee Committee Alan Thomson James W. Leng Jean-Martin Folz Amparo Moraleda Candace Beinecke Katrina Landis Lalita D. Gupte Olivi
Slide 51: Governance and Remuneration
Governance and Remuneration Jean-Martin Folz – Lead Director
Slide 52: Audit Committee - Activity in 2013/14
Audit Committee - ACTIVITY IN 2013/14 • Review of half-year and annual results Activity of the Audit Committee in 2013/14 • Review of risks, internal control and risk management procedures • 4 meetings • Specific review of internal audit and control status and of • 96% attendance the Corporate Contr
Slide 53: Nominations and Remuneration Committee – Activity in 2013/14
Nominations and Remuneration Committee – ACTIVITY IN 2013/14 • Review of the governance practices and update of the Activity of the Board’s internal rules Nominations and Remuneration • Recommendation on the Chairman and CEO’s Committee in 2013/14 compensation • 4 meetings • Proposal of conditional
Slide 54: Ethics, Compliance and Sustainability Committee – Activity in 2013/14
Ethics, Compliance and Sustainability Committee – ACTIVITY IN 2013/14 • Review of the Group’s rules and procedures in the field Activity of the Ethics, of ethics and compliance including Group’s instruction in Compliance and respect of relationships with Business advisors Sustainability Committee in
Slide 55: Directors' fees - Resolution 11
Directors’ fees - Resolution 11 • Increase of the maximum annual amount from €1 million to €1.3 million to take into account the forecasted increase in the number of Board of Directors and Committees’ meetings P 55
Slide 56: Remuneration of Mr Patrick Kron in respect of FY2013/14
Remuneration of Mr Patrick Kron in respect of FY2013/14 submitted to the advisory vote of the shareholders – Resolution 10 • Structure of the remuneration of Mr Kron: - a fixed amount set at the beginning of the fiscal year reflecting the experience and the responsibilities of the executive and comp
Slide 57: Fixed and variable remuneration due for FY2013/14 - Resolution 10
Fixed and variable remuneration due for FY2013/14 - Resolution 10 • Total fixed remuneration: €1,200,000 • Total variable gross remuneration: €1,034,000 (down 37% compared to the previous year) corresponding to 86.1% of the fixed gross salary (for a variable remuneration « target » of 100% and a var
Slide 58: Allocation of options and performance shares during FY2013/14
Allocation of options and performance shares during FY2013/14 - Resolution 10 • A maximum of 90,000 conditional options (IFRS 2 valuation: €315,900) and 20,000 performance shares (IFRS 2 valuation: €400,400) under the 2013 Plan, representing 3.15% of the total allocation of the 2013 Plan and 0.04% o
Slide 59: Supplementary pension plans - Resolution 10
Supplementary pension plans previously approved by the General Shareholders’ Meeting - Resolution 10 Defined benefit plan • Amount assuming a retirement age of 65: approximately 15% of the annual reference remuneration (average of fixed and variable remuneration received over the course of the past
Slide 60: Auditors' report
Auditors’ report Olivier Lotz– PricewaterhouseCoopers
Slide 61: Dialogue with the shareholders
Dialogue with the shareholders
Slide 62: Vote of the resolutions
Vote of the resolutions Kareen Ceintre – Company Secretary
Slide 63: 1st resolution – Ordinary part of the Meeting
1st resolution – Ordinary part of the Meeting • Approval of the statutory financial statements and operations for the fiscal year ended 31 March 2014 P 63
Slide 64: 2nd resolution - Ordinary part of the Meeting
2nd resolution - Ordinary part of the Meeting • Approval of the consolidated financial statements and operations for the fiscal year ended on 31 March 2014 P 64
Slide 65: 3rd resolution - Ordinary part of the Meeting
3rd resolution - Ordinary part of the Meeting Allocation of the €(852,314,976.99) loss : • to the “Carried forward” account, for €(644,975,628.64), which will thus be reduced to €0 • to the “General reserve” account, for €(207,339,348.35), which will thus be reduced to €(7,263,072,309.65) • No divid
Slide 66: 4th resolution - Ordinary part of the Meeting
4th resolution - Ordinary part of the Meeting • Statutory Auditors’ report on related party agreements and commitments P 66
Slide 67: 5th resolution - Ordinary part of the Meeting
5th resolution - Ordinary part of the Meeting • Renewal of BOUYGUES’s appointment as a Director P 67
Slide 68: 6th resolution - Ordinary part of the Meeting
6th resolution - Ordinary part of the Meeting • Renewal of Mr Olivier BOUYGUES’s appointment as a Director P 68
Slide 69: 7th resolution - Ordinary part of the Meeting
7th resolution - Ordinary part of the Meeting • Renewal of Mrs Katrina LANDIS’s appointment as a Director P 69
Slide 70: 8th resolution - Ordinary part of the Meeting
8th resolution - Ordinary part of the Meeting • Renewal of Mrs Lalita GUPTE’s appointment as a Director P 70
Slide 71: 9th resolution - Ordinary part of the Meeting
9th resolution - Ordinary part of the Meeting • Appointment of Mrs Bi Yong CHUNGUNCO as a Director P 71
Slide 72: 10th resolution - Ordinary part of the Meeting
10th resolution - Ordinary part of the Meeting • Advisory vote on the elements of the remuneration due or attributed to Mr. Patrick KRON for the fiscal year 2013/14 P 72
Slide 73: 11th resolution - Ordinary part of the Meeting
11th resolution - Ordinary part of the Meeting • Determination of the maximum amount of the Directors’ fees : € 1,300,000 P 73
Slide 74: 12th resolution - Ordinary part of the Meeting
12th resolution - Ordinary part of the Meeting • Authorisation to be given to the Board of Directors to trade the Company’s shares - Maximum amount: 10% of the share capital - Duration : 18 months P 74
Slide 75: 13th resolution – Extraordinary part of the Meeting
13th resolution – Extraordinary part of the Meeting • Issuances of any type of securities giving access to the shares of the Company or one of its subsidiaries, with maintenance of the Preferential Subscription Rights - Capital increase : €1,080 million* (50% of the share capital) - Debt securities
Slide 76: 14th resolution - Extraordinary part of the Meeting
14th resolution - Extraordinary part of the Meeting • Issuances of any type of securities giving access to the shares of the Company or one of its subsidiaries, with cancellation of Preferential Subscription Rights and public offer and option to grant a priority right - Capital increase : €215 milli
Slide 77: 15th resolution - Extraordinary part of the Meeting
15 th resolution - Extraordinary part of the Meeting • Issuances of any type of securities giving access to the shares of the Company or one of its subsidiaries, with cancellation of Preferential Subscription Rights and a private placement - Capital increase : €215 million* (10% of the share capital
Slide 78: 16th resolution - Extraordinary part of the Meeting
16th resolution - Extraordinary part of the Meeting • Increase of the number of securities to be issued in case of a capital increase with maintenance or cancellation or the Preferential Subscription Rights Maximum amount: 15% of the amount of the initial issue* * such amount shall reduce the €1,080
Slide 79: 17th resolution - Extraordinary part of the Meeting
17th resolution - Extraordinary part of the Meeting • Increase in the share capital to remunerate contributions in kind of shares or securities giving access to the share capital Maximum amount: 10% of the share capital * * such amount shall reduce the €1,080 million and €215 million overall limits
Slide 80: 18th resolution - Extraordinary part of the Meeting
18th resolution - Extraordinary part of the Meeting • Issuances of shares or securities giving access to the Company’s share capital reserved for members of the savings plan Maximum amount: 2% of the share capital * * such amount shall reduce the € 1,080 million overall limit (13th resolution) P 80
Slide 81: 19th resolution - Extraordinary part of the Meeting
19th resolution - Extraordinary part of the Meeting • Increase in the share capital with waiver of the preferential subscription rights to a category of beneficiaries Maximum amount: 0,5% of the share capital * * such amount shall reduce the € 1,080 million (13th resolution) and 2% overall limits (1
Slide 82: 20th resolution - Extraordinary part of the Meeting
20th resolution - Extraordinary part of the Meeting • Amendment of Article 15.3 of the bylaws to preserve single voting rights P 82
Slide 83: 21st resolution - Extraordinary part of the Meeting
21th resolution - Extraordinary part of the Meeting • New Article 18 «General Bondholders’ Meetings » to the bylaws To enable bondholders to attend and vote at General Meetings by videoconference or by means of telecommunication P 83
Slide 84: 22nd resolution - Extraordinary part of the Meeting
22th resolution - Extraordinary part of the Meeting • Authorisation to implement the Shareholders’ Meeting’s decisions and complete the formalities P 84
Slide 85: www.alstom.com
ALSTOM Shaping the futire