Slide 1: Half-Year Results Fiscal Year 2013/14
Half-Year Results Fiscal Year 2013/14 6 November 2013
Slide 2: Key takeaways
Key takeaways Making Alstom fit for the current environment ● Stable H1 2013/14 profitability with FCF impacted by some contracts’ profiles and downpayments ● Strong backlog of 30 months of sales with active pipeline of projects and opportunities ● Acceleration of the performance plan with annual sa
Slide 3: Agenda
Agenda • Key highlights of H1 2013/14 • Alstom’s action plan to adapt to the current environment • Outlook P3
Slide 4: H1 2013/14 key figures
H1 2013/14 key figures Stable profitability, FCF impacted by some contracts’ profiles and downpayments In € million % change % change Sept 2012* Sept 2013 reported organic Orders 12,129 9,431 -22% -20% Book-to-bill ratio 1.24 0.97 Backlog 52,015 50,890 -2% 2% Sales 9,748 9,730 0% 4% Income from oper
Slide 5: Solid backlog at the end of September
Solid backlog at the end of September Order book representing 30 months of sales In € billion Backlog In months of sales • Healthy backlog representing 30 months of 31 29 30 31 30 sales 52.0 52.9 26 50.9 * 23 49.3 46.8 47.4 45.3 H1 2010/11 H2 2010/11 H1 2011/12 H2 2011/12 H1 2012/13 H2 2012/13 H1 20
Slide 6: Thermal Power
Thermal Power Key figures -17% In € million -20% 4,765 • Steam equipment (coal, ECS) remaining active, Orders and 3,801 while pick-up in gas yet to come book-to-bill 1.12 0.89 • Thermal Services orders strong at €2.7 billion H1 2012/13 H1 2013/14 +4% 4,258 0% 4,248 • Sales growing in spite of limite
Slide 7: Renewable Power
Renewable Power Key figures +91% In € million +74% 1,048 • Growth in orders fuelled by hydro projects booked Orders and (Albania, Turkey, Canada, India) and by strong book-to-bill 1.21 602 growth in services 0.70 • Commercial successes in wind in Mexico and in Brazil H1 2012/13 H1 2013/14 +6% • Sale
Slide 8: Grid
Grid Key figures -18% In € million -23% 2,180 • Good flow of small and mid-sized contracts Orders and book-to-bill 1.17 1,671 • Stable volumes excluding a €400 million UHVDC 0.91 contract in India booked in H1 2012/13 H1 2012/13 H1 2013/14 +5% 1,863 -1% 1,836 • Sales up 5% on an organic basis • Well
Slide 9: Transport
Transport Key figures -36% In € million -36% 4,582 • Sound orders (exceptionally high in H1 2012/13) Orders and book-to-bill 1.65 2,911 • Main contracts signed in France, UK, USA 1.05 H1 2012/13 H1 2013/14 +2% 2,771 0% 2,782 • Increase in sales organically (strong in Q2) • Main deliveries in France
Slide 10: Sound Thermal Services business
Sound Thermal Services business Activity supported by balanced portfolio Orders: remaining at peak Resilience of thermal service market In € billion 5.2 • Ageing base in mature markets, H2 2.7 5.2 +14% • increasing environmental constraints and 2.5 H1 2.7 • growing emerging markets offsetting Previo
Slide 11: Investing selectively for future growth
Investing selectively for future growth R&D and capex in line with plans R&D expenses • H1 2013/14 R&D expenses dedicated In € million notably to: 737 − Gas turbines development 682 − Successful Tidal test turbine H2 H2 359 − First digital substation automation centre in India H1 H1 H1 − Axonis and
Slide 12: Income statement
Income statement In € million % change Sept 2012 * Sept 2013 reported Sales 9,748 9,730 0% Income from operations 703 695 -1% Operating margin 7.2% 7.1% Grid PPA & acquisition costs (43) (2) Restructuring charges (29) (56) Other non-operating expenses (39) (20) EBIT 592 617 4% Financial result (135)
Slide 13: Free cash flow
Free cash flow FCF impacted by some projects’ profiles and downpayments In € million Sept 2012 Sept 2013 Income from operations 703 695 Negative working capital change during the period: Restructuring cash out (73) (78) • Unfavourable cash profile of contracts Depreciation 175 162 executed: - €700 C
Slide 14: Financial structure
Financial structure Actively managing balance sheet Liquidity position In € billion ● A €1.35 billion syndicated credit line fully undrawn 3.5 3.0 3.2 maturing in 2016 ● Large headroom on covenants at end of Sept 2013 – Minimum interest cover = 10.4 (>3) – Maximum total net debt leverage = 1.8 (<3.6
Slide 15: Net debt & equity
Net debt & equity In € million Net debt In € million Equity 375 85 (259) (2,342) 5,089 (284) 5,006 (2,871) (3,294) (511) (259) (10) (172) Sep-12 Mar-13 FCF Dividends Acq. & Forex & Sep-13 Mar-13* Net income Dividends Pensions Forex & Sep-13 Disposals Other Other * Adjusted for revised IAS 19 P 15
Slide 16: Agenda
Agenda • Key highlights of H1 2013/14 • Alstom’s action plan to adapt to the current environment • Outlook P 16
Slide 17: A comprehensive action plan to reinforce competitiveness and increase strategic mobility
A comprehensive action plan to reinforce competitiveness and increase strategic mobility Adapting to a tough economic and commercial environment: ● Enhancing cost savings programme ● Promoting a leaner organisation ● Increasing financial flexibility and regaining strategic mobility P 17
Slide 18: Contrasted markets
Contrasted markets THERMAL POWER RENEWABLE POWER Gas Postponed recovery in mature markets Hydro Services & rehabilitation, large projects expected to resume Steam Opportunities in Eastern Europe, Middle East and Asia Onshore wind Strong market but overcapacity & pricing pressures Some new pr
Slide 19: Consistent efforts to grasp growth and opportunities
Consistent efforts to grasp growth and opportunities Developing service business Enlarging equipment product offering Services 20% of orders with products of representing 30% of less than 3 years in 2012/13: 30% sales in FY2012/13, • Upgraded gas turbines, 24% * from 24% in 2009/10 • HVDC, smart gri
Slide 20: Making Alstom fit for the future
Making Alstom fit for the future “Dedicated to Excellence” Plan ● Adjusting cost base to low-growth scenario ● Performance plan accelerated and enhanced with two targets: − Reinforcing competitiveness − Consolidating the medium-term guidance ● Promotion of leaner organisation ● Targeting annual savi
Slide 21: Four major cost categories
Four major cost categories Sourcing: €10bn of cost base in 2012/13 Manufacturing: €4bn of cost base in 2012/13 • More efficient sourcing organisation (incl. • Deployment to all the Group of lean creation of a sourcing board across the Group to practices identified in Sectors, including identify and
Slide 22: Examples of initiatives by Sector
Examples of initiatives by Sector THERMAL POWER: lead-time reduction RENEWABLE POWER: Francis turbines redesign-to-cost Optimisation of project resources on 4 levers of cost savings: EPC Gas project - functional - technical redesign-to-cost, Action plan on non-critical equipment - process optimisati
Slide 23: Initiatives at corporate level
Initiatives at corporate level Lighter and leaner organisation Simplification of regional structure Decentralisation • Reorganising corporate • Delegating authority functions on country level • Reinforcing local decision making • Reinforcing regional hubs Organisational delayering Get closer to cust
Slide 24: Recent capacity adjustments – Streamlining
Recent capacity adjustments – Streamlining Context • Adaptation of footprint to lower demand • Optimisation of cost base, notably in Indirect costs Plan launched end October 2013 Thermal Power • Adaptation of European boiler capacity (notably in Germany) • Streamlining in other businesses Central fu
Slide 25: Making Alstom fit for future: portfolio management
Making Alstom fit for future: portfolio management Increased financial flexibility and strategic mobility by: ● Disposal of non-strategic assets ● Study of the sale of a minority stake in Alstom Transport to industrial partners or financial investors €1 to 2 billion of proceeds targeted by Decembe
Slide 26: Agenda
Agenda • Key highlights of H1 2013/14 • Alstom’s action plan to adapt to the current environment • Outlook P 26
Slide 27: Three-year guidance maintained
Three-year guidance maintained OUTLOOK • Sales to grow organically at low single digit • IFO margin expected to gradually increase with • Stable IFO margin in FY 13/14 • IFO margin at around 8% in FY 15/16 or FY 16/17 • Positive FCF year after year P 27
Slide 28: Contacts and agenda
Contacts and agenda CONTACTS AGENDA Delphine BRAULT Vice President Investor Relations 21 January 2014 +33 (0)1 41 49 26 42 Q3 orders and sales Anouch MKHITARIAN Investor Relations Manager +33 (0)1 41 49 25 13 7 May 2014 Perrine DE GASTINES FY 2013/14 results Individual Shareholders Coordinator +33 (
Slide 29: www.alstom.com
www.alstom.com ALSTOM Shaping the futiare