Investor Presentation • May 11, 2021
Investor Presentation
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© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
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● Strong progress on ESG commitments
1 aEBIT includes equity-accounted investments when these are considered to be part of the operating activities of the Group. This mainly includes Chinese Joint Ventures, namely CASCO Joint Venture for Alstom legacy as well as eligible Bombardier Transportation Joint Ventures. 2 Following the Bombardier Transportation acquisition and with effect from these Fiscal year 2020/21 consolidated financial statements, Alstom decided to introduce the "adjusted net profit" indicator aimed at restating its net profit from continued operations (Group share) to exclude the impact of amortisation of assets exclusively valued when determining the purchase price allocations ("PPA") in the context of business combination, net of the corresponding tax effect. This indicator is also aligned with market practice.
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
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BT = Bombardier Transportation legacy 2 months contribution
1 Objectives and indicators do not include former Bombardier Transportation yet; 2 Compared to 2014; 3 Injury Frequency Rate at 1 until 2020 and TRIR (Total Recordable Injury Rate) from 2020/21 onwards. This is a new AiM indicator which will include Lost-Time Injury and other work-related recordable events;
Customer Satisfaction
600 customers contacted post acquisition, the vast majority of them being very positive on the acquisition and see the upside potential for their business
Projects BT Projects deep dive completed and securisation roadmap launched
Information Systems
More than 30,000 former BT employees migrated to the Alstom IT environment
€400 million cost synergies annual run rate¹, objective to restore Bombardier Transportation's margin to a standard level in the medium term and double-digit EPS accretion by year 2 confirmed²
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1 By the year 4th to 5th post-closing of the acquisition; 2 After cost synergies and implementation costs, and before PPA amortization
Rail increasingly favored by governments and society
European Smart and Sustainable Mobility Strategy: high-speed rail traffic x2 by 2030 and freight x2 by 2050
€50bn of draft national recovery plans¹ related to Rail
H2 national strategies announced by several Member States:
€7bn by 2030 in Portugal
Numerous stimulus packages worldwide
Record 21/22 budget of ca. \$15bn² for Indian Railways
¹ UNIFE and Alstom source ² Rs 1.10 lakh crore ³ UNIFE Market Study 2020, central scenario (V-shape)
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited. 10
c.€10bn in Italy France bans short-haul domestic flights where a train journey < 2h30 exists
Joint plan issued by DB and the German aviation industry to shift 4.3 million passengers from air to rail
1 legacy Bombardier Transportation 2 months contribution
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
Next generation digital interlocking for SNCF (France) Metro system in Toulouse (France) – c.€470m
34 Coradia Stream™ High Capacity double-decker and 30-year maintenance for LNVG (Germany) - €760m
64 Tramways in Cologne (Germany) – c.€220m
Taipei Metro Line 7 extension (Taiwan) - €248m
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234 metro cars for Mumbai Metro Lines 4 & 4A (India) - €220m¹
Delhi Meerut ETCS Mainline Signalling (India) - €106m
Largest order ever placed by RENFE 152 high-capacity trains and 15-year maintenance of 56 trains (Spain) - €1.4bn
Solid commercial activity in various geographies and for all product lines
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
200 multilevel commuter rail cars to Chicago's Metra (US) – c.€650m
Ramp up of large contracts on-going
Services +9% organic vs H2 LY
Signalling +7 organic vs H2 LY
● Solid growth in H2 2020/21
Systems (17)% organic vs H2 LY
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● Anticipated ramp-down
1 BT: legacy Bombardier Transportation 2 months contribution ; AT: legacy AT contribution
Braking systems player IBRE (France) and
Investment in railway cybersecurity specialist Cylus (Israël) Brake linings player FLERTEX (France) 1 Services company Shunter (Netherlands)
Transit engineering company B&C Transit (United States)
High power fuel cells specialist Helion Hydrogen Power (France)1
1 Helion Hydrogen Power and Flertex closed in April 2021
Two new countries ordered their first hydrogen trains
6 trains (+ 8 options) in Italy
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Emissions reduction targets consistent with Paris Agreement
Exceptional €1.9m budget to better support communities suffering from the Covid-19
60% of electricity supply from renewables, increasing by 24pp
Leadership in ESG confirmed and rewarded with the inclusion in the climate A-list from CDP and for the 10th consecutive year in the DJSI World and Europe
1 All information in this slide are for Alstom legacy
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1 aEBIT includes Chinese JVs contribution for both periods: €38 million for March 2020 and €50 million for March 2021
| (in € million) | FY 2019/20 | FY 2020/21 |
|---|---|---|
| Sales | 8,201 | 8,785 |
| Adjusted EBIT¹ |
630 | 645 |
| Adjusted EBIT margin |
7.7% | 7.3% |
| Restructuring and rationalisation costs |
(18) | (14) |
| Impairments loss, Bombardier Transaction cost and other |
5 | (213) |
| Covid-19 inefficiencies and incremental costs |
(24) | (68) |
| Reversal equity pick-up |
(38) | (50) |
| EBIT | 545 | 300 |
| Financial results | (76) | (68) |
| Tax results |
(118) | (63) |
| Share in net income of equity investees |
102 | 83 |
| Minority interests from continued op. |
(7) | (12) |
| Net Profit – Continued operations, Group share |
446 | 240 |
| PPA² | 11 | 61 |
| Adjusted net profit |
457 | 301 |
● Other non operating items including:
€117m of Bombardier Transportation (BT) transaction and integration costs
● Effective tax rate at 27%
1 aEBIT includes equity-accounted investments when these are considered to be part of the operating activities of the Group. 2 impact of amortization of assets exclusively valued when determining the purchase price allocations including Bombardier Transportation and others, net of the corresponding tax effect
Working capital driven by Rolling Stock ramp up as anticipated
● FCF for legacy Bombardier Transportation impacted by
Supplier repayment and partial unwinding of working capital practices
Working capital phasing
● Net debt evolution driven by :
Positive FCF performance from Alstom stand alone
Reclassification of BT working capital instruments into debt (factoring and CAA)
1 composed of a net cash/(debt) of €(956) millionas of Dec 31st 2020 including injections from CDPQ and Bombardier Inc and of a €(451) million free cash flow in January 2021
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
Technical and engineering
Industrial and supply chain
● Evolution of provision for risks on contracts – group (in € million) ● Task force reviewed and assessed 120
| March 31 2020 | 578 |
|---|---|
| Additions / Releases / Applications | (273) |
| Scope variation adjustments mainly due to Bombardier Transportation's acquisition |
1,083 |
| Others | 35 |
| March 31 2021 | 1,423 |
● €451 million provisions already in BT Balance sheet as of Dec 2020² and €632 million additional provisions for risks on BT contracts
Commercial and customer
1 mainly due to Bombardier Transportation's acquisition ² \$554m provision for onerous contracts in Note 25 of Bombardier Inc financial reports as of Dec 2020, converted at Dec 31st exchange rate
Commitment to Baa2 rating
1 5-year maturity and two one-year options at the lenders' discretion ² 18-month maturity and two 6-month extensions at the borrower' discretion
DIVIDEND 2020/21
● Dividend of 0.25€ per share with 31% payout ratio¹ will be proposed to the next shareholders' meeting
1 The pay-out ratio is calculated by dividing the amount of the overall dividend with the "Adjusted net income" as presented in the management report on the consolidated financial statements
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
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Over 250 sites
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
Backlog breakdown per regions
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
A new order is recognised as an order received only when the contract creates enforceable obligations between the Group and its customer. When this condition is met, the order is recognised at the contract value. If the contract is denominated in a currency other than the functional currency of the reporting unit, the Group requires the immediate elimination of currency exposure using forward currency sales. Orders are then measured using the spot rate at inception of hedging instruments.
Order backlog represents sales not yet recognised from orders already received. Order backlog at the end of a financial year is computed as follows:
The order backlog is also subject to changes in the scope of consolidation, contract price adjustments and foreign currency translation effects.
Order backlog corresponds to the transaction price allocated to the remaining performance obligations, as per IFRS 15 quantitative and qualitative disclosures requirement.
The book-to-bill ratio is the ratio of orders received to the amount of sales traded for a specific period.
Starting September 2019, Alstom has opted for the inclusion of the share in net income of the equity-accounted investments into the aEBIT when these are considered to be part of the operating activities of the Group (because there are significant operational flows and/or common project execution with these entities). This mainly includes Chinese joint-ventures, namely CASCO joint-venture for Alstom as well as, following the integration of Bombardier Transportation, Bombardier Sifang (Qingdao) Transportation Ltd., Bombardier NUG Propulsion System Co. Ltd. and Changchun Bombardier Railway Vehicles Company Ltd.
aEBIT corresponds to Earning Before Interests and Tax adjusted for the following elements:
capital gains or loss/revaluation on investments disposals or controls changes of an entity;
any other non-recurring items, such as some costs incurred to realize business combinations and amortization of an asset exclusively valued in the context of business combination, as well as litigation costs that have arisen outside the ordinary course of business;
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A non-recurring item is a "one-off" exceptional item that is not supposed to occur again in following years and that is significant. Adjusted EBIT margin corresponds to Adjusted EBIT expressed as a percentage of sales.
Following the Bombardier Transportation acquisition and with effect from these Fiscal year 2020/21 consolidated financial statements, Alstom decided to introduce the "adjusted net profit" indicator aimed at restating its net profit from continued operations (Group share) to exclude the impact of amortization of assets exclusively valued when determining the purchase price allocations ("PPA") in the context of business combination, net of the corresponding tax effect. This indicator is also aligned with market practice.
Free Cash Flow is defined as net cash provided by operating activities less capital expenditures including capitalised development costs, net of proceeds from disposals of tangible and intangible assets. Free Cash Flow does not include any proceeds from disposals of activity.
The most directly comparable financial measure to Free Cash Flow calculated and presented in accordance with IFRS is net cash provided by operating activities.
The net cash/(debt) is defined as cash and cash equivalents, marketable securities and other current financial asset, less borrowings.
The payout ratio is calculated by dividing the amount of the overall dividend with the "Adjusted net profit" as presented in the management report in the consolidated financial statements.
© ALSTOM SA, 2019. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.
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