Slide 1: Annual Results Fiscal Year 2008/09
Annual Results Fiscal Year 2008/09 5 May 2009
Slide 2: Agenda
Agenda 1. Key events of the year Page 3 2. Operational review by Sector Page 16 3. Financial results Page 28 4. Outlook Page 36 P2
Slide 3: Key figures
Key figures In € million 2008/09: another year of solid results March 2008 March 2009 Variation +5% actual/ Orders received 23,472 24,580 +6% organic* +16% actual/ Backlog 39,222 45,670 +16% organic* +11% actual/ Sales 16,908 18,739 +10% organic* Income from operations 1,295 1,536 +19% actual/ Opera
Slide 4: Strong assets to face the challenging environment: record and secured backlog
Strong assets to face the challenging environment Record and secured backlog Book-to-bill Orders in hand 45.7 39.2 In € billion 32.4 26.9 25.9 1.39 Future orders 1.34 1.31 1.14 1.14 2004/05 2005/06 2006/07 2007/08 2008/09 • No cancellation • Selectivity policy to be maintained • No deferral • Lower
Slide 5: Strong assets to face the challenging environment: solid customer base
Strong assets to face the challenging environment Solid customer base Customers’ profile Global coverage High risk Private operators IPP / Industrial 16% 52% 13% Private utilities 6% 13% 80% 90% Low credit States Low risk Sales by country of destination at March 2009 Medium / High credit States Powe
Slide 6: Strong assets to face the challenging environment: sound financial situation
Strong assets to face the challenging environment Sound financial situation Rating maintained Net cash position strenghtened In € million 2,051 BBB+ / Baa1 904 Mar 06 Mar 07 (64) Mar 08 Mar 09 Bonding & guarantees available In € billion (1,248) 21.5 18.2 7.5 5.4 14.0 12.8 Available Outstanding Mar 0
Slide 7: Preparing the future: stricter control on S&A expenses
Preparing the future Stricter control on S&A expenses Structural transversal programmes Immediate short term measures • Focus on functions efficiency to be • Freezing of consultancy projects deployed in HR, Finance, Communication and IS&T • Reduction of travel costs • Renegotiation of indirect sourc
Slide 8: Preparing the future: streamlining of Power organisation
Preparing the future Streamlining of Power organisation New Power Sector 6 Operational Businesses: New external reporting units*: Thermal Systems Thermal Products Energy Thermal Systems Gas, steam, ECS Gas, steam, nuclear Management & Products Thermal Services Thermal Services Retrofit, service cent
Slide 9: Preparing the future: flexible structure
Preparing the future Flexible structure Cost structure at March 2009 Breakdown of headcount at March 2009 Depreciation & others 14% Wages and benefits Purchasing Permanent employees Total headcount: 81,500 Fixed term contracts Evolution of permanent workforce 5,000 6,000 (3,000) • Low level of fixed
Slide 10: Preparing the future: prioritisation of future capital expenditures
Preparing the future Completion of launched projects Prioritisation of future capital expenditures Transport Evolution of capex by Sector In € million +33% 499 35 Chattanooga VHS, tramways, Wuhan components… 374 121 30 Increase capacity in Europe 85 343 Power 259 Corporate & others Transport Power G
Slide 11: Preparing the future: continuous efforts on Research & Development
Preparing the future Continuous efforts on Research & Development Evolution of R&D expenses Power In € million Keep the lead in clean power +6% 586 554 CO2 capture, turbine upgrades… Transport - Pursue the standardisation strategy - Become n°1 in tramways and remain n°1 in very high speed AGV, signa
Slide 12: Preparing the future: Environment
Preparing the future Environment Responsible company • Reduction of energy and Greenhouse Gases CO2 intensity (GHG) intensities (Tons CO2/M€ sales) − Target: -20% by 2015 31.9 − Action plan in sites 30.6 • Comprehensive environmental data reporting 30.2 30.2 30.0 − On-going implementation • Alstom F
Slide 13: Preparing the future: Social
Preparing the future Social • New target of injury frequency rate − Below 2.5 by Dec. 2010 • Alstom University − 5,600 trainees/year: 60% increase as compared to 2007/08 • New employee share programme in 2009: Injury Frequency Rate (12 rolling months) ‘Alstom Sharing’ 4.5 4.4 4.2 − 28% subscription
Slide 14: Preparing the future: Governance
Preparing the future Governance • Adhesion to World Business Council for the Sustainable Development (WBCSD) • Ethics and compliance: − Certificate granted by Ethic Intelligence International on rules and procedures governing relations with sales and marketing consultants and agents • Sourcing: − Ch
Slide 15: Agenda
Agenda 1. Key events of the year Page 3 2. Operational review by Sector Page 16 3. Financial results Page 28 4. Outlook Page 36 P 15
Slide 16: Power: General context
Power General context Short term drop, medium term sustained Orders in GW p.a 2009 power market 300 Wind Hydro LT IEA 2030 scenario Nuclear 250 Steam ~ 225 Gas • Expected decrease of the 200 new equipment market 150 Demand Growth to around 170 GW 100 • Service and retrofit 50 markets less volatile R
Slide 17: Power: Key figures (1)
Power Key figures (1) In € million March 2008 March 2009 Variation Orders Power Systems 11,569 11,879 +3% Power Service 4,401 4,587 +4% Total Power 15,970 16,466 +3% Backlog Power Systems 16,039 19,385 +21% Power Service 5,900 6,779 +15% Total Power 21,939 26,164 +19% Sales Power Systems 7,768 9,239
Slide 18: Power: Key figures (2)
Power Key figures (2) In € million March 2008 March 2009 Variation Income from op. Power Systems 415 600 +45% Power Service 592 648 +9% Total Power 1,007 1,248 +24% Operating margin Power Systems 5.3% 6.5% Power Service 16.4% 17.0% Total Power 8.9% 9.6% P 18
Slide 19: Power: Commercial activity
Power Commercial activity Europe • Gas projects in the Netherlands and Spain Orders received by country of destination in 2008/09 • Power blocks and supercritical boilers in Germany • Boilers in the Netherlands • Hydro project in Portugal & wind turbines in Spain • O&M contracts in the Netherlands a
Slide 20: Power: Profile
Power Profile Resilient service activity Contribution to sales Total World Installed Base: ~4,600 GW 25% 18% 15% Contribution to income from operations 6% New build (incl. retrofit) OEM supplied at least the turbine, the generator or the steam generator March 2009 data After-market Source: ALSTOM, U
Slide 21: Power: Operational priorities
Power Operational priorities Orders Evolution of orders and sales Sales • Manage the load − Properly deliver the backlog − Adapt recruitment to execution needs • Develop industrial footprint in Asia and the USA 2004/05 2005/06 2006/07 2007/08 2008/09 • Strengthen positioning on broad portfolio of te
Slide 22: Transport: General context
Transport General context Sustained market Macro trends • Demographics, urbanisation Stimulus packages for rail • Climate change Impact on Alstom • Economic growth ++ • Liberalisation + Rail business drivers +++ • Environment & Energy • Urban integration +++ • Infrastructure saturation • Freight dev
Slide 23: Transport: Key figures
Transport Key figures In € million March 2008 March 2009 Variation Orders 7,467 8,114 +9% Backlog 17,283 19,506 +13% Sales 5,509 5,685 +3% Income from op 397 408 +3% Operating margin 7.2% 7.2% P 23
Slide 24: Transport: Commercial activity
Transport Commercial activity Europe Orders received by country of destination • AGV and maintenance in Italy in 2008/09 • Pendolinos and maintenance in the UK • Coradia in Germany and in Sweden North America • Metros in the USA 9% 72% • Turnkey contract for metros in Mexico 5% Asia/Pacific Central
Slide 25: Transport: Strategic move, partnership with Transmashholding
Transport Strategic move Partnership with Transmashholding Potential of the Russian market • Technological support to • Largest railway market in Europe modernise TMH’s facilities • 85,000 kilometres of electrified track • Creation of a 50/50 JV for the • 1.3 billion passengers per year development
Slide 26: Transport: Operational priorities
Transport Operational priorities • Secure project execution − Quality focus − Suppliers panel development − Cost optimisation • Take advantage of market conditions − Large opportunities in France, UK and Germany − Good momentum worldwide for very high speed and mass transit − Development of service
Slide 27: Agenda
Agenda 1. Key events of the year Page 3 2. Operational review by Sector Page 16 3. Financial results Page 28 4. Outlook Page 36 P 27
Slide 28: Income statement (1/2)
Income statement (1/2) In € million March 2008 March 2009 Variation Sales 16,908 18,739 +11% Power 11,370 13,054 +15% Transport 5,509 5,685 +3% Corporate & others 29 - - Income from operations 1,295 1,536 +19% Power 1,007 1,248 +24% Transport 397 408 +3% Corporate & others (109) (120) - P 28
Slide 29: Income statement (2/2)
Income statement (2/2) In € million March 2008 March 2009 Variation Income from operations 1,295 1,536 +19% Restructuring costs (35) (46) Capital gains & other (39) (47) EBIT 1,221 1,443 +18% Financial result (69) 21 Tax result (291) (373) Minority interest & other (9) 18 Net result 852 1,109 +30% P
Slide 30: Free cash flow
Free cash flow In € million March 2008 March 2009 Income from operations 1,295 1,536 Restructuring cash out (87) (84) Depreciation 223 247 Capital expenditure (374) (499) R&D cap. & amort. of acq. techno. (7) (35) Pensions (102) (151) Change in working capital 777 613 Tax cash out (127) (192) Financ
Slide 31: Free cash flow analysis
Free cash flow analysis Evolution of change in working capital vs book-to-bill In € million 1.39 1.34 1.31 Evolution of FCF vs net result 1.14 +777 +613 +540 +248 In € million Change in working capital Mar 06 Mar 07 Mar 08 Mar 09 FCF before change in working capital Net result Change in working capi
Slide 32: Evolution of net cash & equity
Evolution of net cash & equity Strong net cash position Further consolidation of equity In € million In € million 29 2,051 (226) 2,884 (226) 1,109 75 1,479 (135) (319) 2,245 904 Net cash Free cash Dividends Capital Other Net cash 31 Mar 08 flow increase* 31 Mar 09 (*) Employee share purchase schemes
Slide 33: Liquidity
Liquidity Liquidity position strengthened Reimbursment of bonds In € million In € million 2,948 Maturity July 2008 249 2,270 March 2009 161 March 2010 424 275 Mar 08 Mar 09 1,000 1,000 Mar 08 Mar 09 Gross cash Undrawn credit line Nominal amount P 33
Slide 34: Pensions
Pensions In € million In € million Defined benefit obligations Fair value of assets 68 (89) (184) 3,668 (237) 27 2,716 (439) (232) 3,360 4,110 Opening Return on Payments FX Closing 1 Apr 08 assets & other 31 Mar 09 Opening Service Discounting Payments FX Closing 1 Apr 08 costs & actuarial & other 31
Slide 35: Agenda
Agenda 1. Key events of the year Page 3 2. Operational review by Sector Page 16 3. Financial results Page 28 4. Outlook Page 36 P 35
Slide 36: Outlook
Outlook Short term priorities • Smoothly execute the large backlog • Increase flexibility and optimise costs • Strengthen our positioning • Grasp opportunistic acquisitions Objectives • March 2010 operating margin forecast confirmed: around 9% for the Group − Power: between 10% and 11% − Transport:
Slide 37: 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 38: www.alstom.com
www.alstom.co Lue ane shaping the feture | ALSTOM