Slide 1: Half-Year Results Fiscal Year 2005/06
Half-Year Results Fiscal Year 2005/06 17 November 2005
Slide 2: Agenda
Agenda f Overview P. Kron f Operational review P. Kron f Financial Results H. Poupart-Lafarge f Conclusion P. Kron 2
Slide 3: Main events in H1-05/06
Main events in H1-05/06 f Recovery ahead of plan f March 06 targets already achieved f Visibility further reinforced f New bonding programme negotiated f Reduced debt with improved profile f Disposals close to completion (signed or closed) f Recent important commercial successes 3
Slide 4: Key figures H1-05/06 in IFRS
Key figures H1-05/06 in IFRS f Orders Received at €7.5Bn, down 10%* versus H1 04/05, but up 4%* excluding Marine f Sales at €6.9Bn, up 12%* f Operating margin at 5%, up from 2.1%* in H1 04/05 f Net income of +€136m, versus a loss of €(242)m in H1 04/05 f Free Cash flow at +€115m, versus €(283)m in H
Slide 5: Agenda
Agenda f Overview P. Kron f Operational review P. Kron f Financial Results H. Poupart-Lafarge f Conclusion P. Kron 5
Slide 6: ALSTOM - Actuals
ALSTOM - Actuals In € million H1 04/05 H1 05/06 Var H1/H1 Orders 8,362 7,454 (11)% Sales 6,316 6,938 +10% Backlog 27,077 27,488 +2% Income from op 137 347 +153% Operating Margin 2.2% 5.0% - 6
Slide 7: ALSTOM - Comparables
ALSTOM - Comparables Same scope and exchange rates In € million H1 04/05 H1 05/06 Var H1/H1 Orders 8,277 7,454 (10)%* Sales 6,195 6,938 +12% Backlog 26,311 27,488 +4% Income from op 128 347 x2.7 Operating Margin 2.1% 5.0% - 7 * +4% excluding Marine
Slide 8: Power Turbo-Systems / Power Environment Comparables
Power Turbo-Systems / Power Environment Comparables Same scope and exchange rates In € million H1 04/05 H1 05/06 Var H1/H1 Orders 2,215 2,346 +6% Sales 1,820 2,426 +33% Backlog 6,888 7,450 +8% Income from op (81) 37 - Operating Margin (4.5)% 1.5% - FY2005/06 operating margin target: increased to 1.5
Slide 9: Power Turbo-Systems / Power Environment
Power Turbo-Systems / Power Environment f Market f Contrasted markets by geographical areas f Increasing demand for clean coal combustion and environmental control systems f Continuing sound hydro market f Gas market focused on South Europe, Middle-East and South East Asia f Achievements f GT26 awar
Slide 10: Power Turbo-Systems / Power Environment Power Service
Power Turbo-Systems / Power Environment Power Service f GT24/GT26 f 1.5 million operating hours f Evolution of fleet commercial status: March 04 March 05 Sept 05 Firm agreements 64 74 74 Of which unconditional 42 65 72 Of which conditional 22 9 2 In negotiation 12 2 2 Total 76 76 76 f Cash impact in
Slide 11: Power Service Comparables
Power Service Comparables Same scope and exchange rates In € million H1 04/05 H1 05/06 Var H1/H1 Orders 1,719 1,760 +2% Sales 1,409 1,505 +7% Backlog 3,437 4,026 +17% Income from op 188 221 +18% Operating Margin 13.3% 14.7% - FY2005/06 operating margin target: increased to 14.5%/15% 11
Slide 12: Power Service
Power Service f Market f Overall increasing demand in Europe and US due to on-going modernisation needs and optimisation of assets f Growth in Asia with market liberalisation and larger installed capacities f Achievements f Continuous growth despite no major O&M contract registered in H1 f Acquisiti
Slide 13: Transport Comparables
Transport Comparables Same scope and exchange rates In € million H1 04/05 H1 05/06 Var H1/H1 Orders 2,867 2,902 +1% Sales 2,411 2,553 +6% Backlog 13,802 14,277 +3% Income from op 90 155 +72% Operating Margin 3.7% 6.1% - FY2005/06 operating margin target: confirmed at 6%/6.5% 13
Slide 14: Transport
Transport f Market f Continuing growth in Italy, Spain, France f Weak markets in Germany, UK and US f Continuous development of tramway systems f Achievements f Strong commercial performance in high speed f Successes in mass transit: tramway, metro f Marked improvement in the operational performance
Slide 15: Marine Comparables
Marine Comparables Same scope and exchange rates In € million H1 04/05 H1 05/06 Var H1/H1 Orders 1,101 11 - Sales 274 159 (42)% Backlog 1,624 1,122 (31)% Income from op (34) (22) - Operating Margin (12.3)% (13.6)% - f Order for 2 cruise-ships to be registered in H2 05/06 f Reduced losses in H1 05/06
Slide 16: Agenda
Agenda f Overview P. Kron f Operational review P. Kron f Financial Results H. Poupart-Lafarge f Conclusion P. Kron 16
Slide 17: Income Statement -1-
Income Statement -1- In € million H1 04/05 H1 05/06 Var H1/H1 Income from operations 137 347 x2.5 Restructuring costs (69) (38) Amortisation of pension (27) (31) Capital gains & other (14) 25* EBIT 27 303 x11 17 * Including €87 million of impairment on Marine assets
Slide 18: Income Statement -2-
Income Statement -2- In € million H1 04/05 H1 05/06 Var H1/H1 EBIT 27 303 x11 Financial result (242) (88) Tax result (23) (75)* Minority interest (4) (4) Net income (242) 136 - 18 * Including app. €40 million related to taxes on capital gains
Slide 19: Free Cash Flow
Free Cash Flow In € million H1 04/05 H1 05/06 Var H1/H1 EBIT before restructuring 96 341 x3.5 Depreciation/amortisation 236 209 Restructuring cash (122) (103) Financial items & tax (282) (108) Change in Marine WC (100) (230) Change in WC (excl.Marine) 176 245 Capex (96) (123) Others 15 (60) GT24/GT2
Slide 20: Disposals
Disposals f Disposals requested by EC representing €1.5 billion of sales f Valencia locomotives in Spain Sold in FY 04/05 f Misc. activities in Australia Sold in FY 04/05 f FlowSystems Sold in H1 05/06 f Transport activities in Australia/NZ Sold in H1 05/06 f Power Conversion Sold in H2 05/06 f Indu
Slide 21: Evolution of equity & debt
Evolution of equity & debt € million Equity Net debt 1,802 1,651 268 1,220 Capital 250 leases 1,583 1st April 05 30 Sept 05 1st April 05 30 Sept 05 Gearing reduced to 68% in Sept 05 21
Slide 22: Main lines at 30th September 2005
Main lines at 30th September 2005 € million Nominal amount 2,899 Cash at 555 subsidiaries 2,344 Headroom 1,000 704 570 600 205 228 190 121 27 33 95 Situation Nov 05 Mar 06 July 06 Aug 06 Jan 07 Sept 07 Sept 08 Mar 09 Mar 10 at 30 Sept 05 Undrawn lines Drawn lines 22
Slide 23: Bonding program
Bonding program f Program increased to €10.5 billion and extended till July 2008 f €9.3 billion already syndicated with 18 banks f New cash collateral of €175 million (to be increased in case of major adverse deviation of the operating margin vs targeted levels) f €700 million cash collateral of the
Slide 24: Cash collateral mechanism
Cash collateral mechanism Sep-06 March 07 Sep-07 March 08 <Sept 08-Dec 08> Op margin all cases >4,5% >5,875% >6,25% Cash collateral €175m €175m €175m €175m €175m Op margin 4,875%<>5,875% 5,25%<>6,25% Cash collateral (5%*) €205m €285m €455m Op margin <4,5% <4,875% <5,25% Cash collateral (10%*) €230m
Slide 25: Group targets in IFRS (1)
Group targets in IFRS (1) March 06 March 08 Op margin targets in French Gaap: 6% 7- 8% IFRS adjustments*: - Pension service cost (0.8%) - Depreciation of intangible (0.4%) - Other (0.1%) Equivalent IFRS targets*: 4.7% 5.7- 6.7 % New op margin targets: 5% 6-7% * Based upon fiscal year 04/05 IFRS rest
Slide 26: Group targets in IFRS (2)
Group targets in IFRS (2) March 06 Net income target in French Gaap: positive IFRS adjustments*: - Goodwill amortisation app. +€220m - Others app. + €20m Equivalent IFRS Target*: €240m New net income target: over €250m * Based upon fiscal year 04/05 IFRS restatement 26
Slide 27: Group targets in IFRS (3)
Group targets in IFRS (3) March 06 Free Cash Flow target in French Gaap: positive IFRS adjustment *: NS Equivalent IFRS target*: positive New Free Cash Flow target: positive * Based upon fiscal year 04/05 IFRS restatement 27
Slide 28: New targets by Sector
New targets by Sector March 06 PTS/PE PS Transport Op margin targets in French Gaap 3% 15-16% 7% IFRS adjustments *: - Pension service costs (0.8%) (1.5%) (0.4%) - Depreciation of intangible (0.8%) (0.9%) 0% - Other (0.2%) +0.3% (0.4%) Equivalent IFRS target*: 1.2% 12.9-13.9% 6.2% New op margin targ
Slide 29: Agenda
Agenda f Overview P. Kron f Operational review P. Kron f Financial Results H. Poupart-Lafarge f Conclusion P. Kron 29
Slide 30: March 06 objectives
March 06 objectives f Orders: same level as previous year on a comparable basis f Sales: more than 7% up on a comparable basis f Operating margin: over 5% f Net income: over €250 million f Free Cash Flow: positive Guidance confirmed or improved 30
Slide 31: www.alstom.com
ALSTOM www.alstom.com