In a challenging commercial environment, Alstom posts excellent operational results for the fiscal year 2009/10
In a challenging commercial environment, Alstom posts excellent operational results for the fiscal year 2009/10
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At its next Annual General Meeting, Alstom
will propose to increase the dividend from 1.12 to
1.24 per share (+11%).
"Fiscal year 2009/10 was marked by a major contraction in
demand for power generation due to the strong economic downturn,
whilst the transportation market resisted better, supported by
the focus on rail projects in government budgets. After a low
point in orders during the first half of the year, the second
semester saw a modest improvement. Although tendering remains
active, it is still difficult to assess the timing and the
magnitude of the expected recovery. The backlog continues to be
robust despite its slight decline. Driven by its quality, sales
and income from operations have reached record levels and the
operating margin target of 9% has been exceeded. In response to
the economic uncertainty, Alstom intends to remain focused on
strictly controlling costs and maintaining flexibility and smooth
project management. To support its organic long-term growth
strategy, the Group plans on keeping a sound level of capital
expenditures and research and development expenses, although
programmes will continue to be strictly prioritised.
Additionally, the acquisition of Transmission activities will
strengthen Alstoms offering. Over the next two years, we
expect the Groups operating margin to stay within a 7 to
8% bracket",
said Patrick Kron, Alstoms Chairman and Chief
Executive Officer.
Low level of order intake
During the fiscal year 2009/10, Alstoms markets were
impacted by the global economic downturn. The Group booked
14.9 billion of new orders, a 39% decrease from the
exceptionally high level of the previous fiscal year, which
included several very large contracts. On 31 March 2010, the
backlog amounted to 42.6 billion (-7%), representing 26
months of sales.
In Power, Thermal Systems & Products received orders for a
large gas power plant in the UK, coal power plants in Slovenia,
Germany and India as well as plant management systems in South
Africa. Thermal Services registered a flow of small and
medium-sized orders, particularly in Europe and in the USA, for
both retrofit and service and booked three operation and
maintenance long-term contracts during the fourth quarter. In
Renewables, the main orders recorded during the period were for
hydro projects in Switzerland.
In Transport, the main contracts recorded during the fiscal year
included regional trains in France and Germany, suburban trains
in France, metros in Brazil and the Netherlands, tramways in
Brazil, Morocco and France, as well as various signalling systems
and maintenance orders.
Record sales and results
The progressive delivery of the backlog has led to a further
growth in sales. They reached the record level of 19.7
billion in the fiscal year 2009/10 from 18.7 billion in
2008/09, representing a 5% increase. Sales grew by 6% in Power
and by 1% in Transport.
In the fiscal year 2009/10, income from operations amounted to
1,779 million, up 16% from 1,536 million in the
previous year and operating margin improved from 8.2% to 9.1%,
both Sectors having achieved their operating margin objectives.
Powers operating margin grew from 9.6% to 10.6%, whilst
Transports operating margin remained stable at 7.2%.
On the back of an improved operating performance, net profit
increased by 10%, amounting to 1,217 million compared to
1,109 million in the previous fiscal year.
Sound financial structure
Free cash flow was positive at 185 million during the
fiscal year 2009/10. The operational profit has more than offset
the expected deterioration of the working capital linked to the
low level of orders.
Alstom had a net cash position of 2,222 million at 31
March 2010, compared to 2,051 million at 31 March 2009. A
syndicated line of bonding facilities amounting to 8.3
billion has been renewed for three years at the same conditions
as the previous one.
Equity increased from 2,884 million at 31 March 2009 to
4,101 million at 31 March 2010 as a result of the strong
net income.
Dividend
The Board of Directors has decided to propose a 1.24 per
share dividend at the next Annual General Meeting, to be held on
22 June 2010. It represents a 11% increase compared to the
dividend of 1.12 paid last year. If approved, the dividend
will be distributed on 29 June 2010.
Composition of the Board of Directors
At the next Annual General Meeting, to be held on 22 June 2010,
the Board of Directors will propose the appointments of Mrs
Lalita Gupte, former Joint Managing Director and member of the
Board of ICICI Bank Ltd, and Mrs Katrina Landis, Chief Executive
Officer and Group Vice President of BP Alternative Energy, as
Directors, as well as the renewal of the appointments of Georges
Chodron de Courcel, Olivier Bouygues and Bouygues SA, as
Directors.
Adaptation to the new environment
To adapt to the more challenging markets, Alstom has intensified
its measures to reduce costs; for example, selling and
administrative expenses decreased from 7.4% of sales in March
2009 to 6.8% in March 2010.
The total workforce has been adjusted with a decrease of 5,000
people over the year, by natural turnover, non-renewal of some
fixed term employment contracts or downsizing of some sites.
To keep and reinforce its technological leadership and industrial
efficiency, the Group maintained R&D expenses and capital
expenditures at high levels, respectively 614 million and
470 million.
Update on portfolio evolution
On 20 January 2010, Alstom and Schneider Electric signed with
Areva the agreement for the acquisition of its Transmission &
Distribution (T&D) business. The proposed transaction was
approved by the European Commission on 26 March 2010; it remains
subject to the approvals of competition authorities in certain
countries and of the French Commission des Participations et des
Transferts which are expected shortly. Alstom and Schneider
Electric are working closely with the management of Areva T&D
in order to implement a rapid and smooth integration.
On 1 March 2010, Alstom and Transmashholding (TMH), the largest
railway equipment manufacturer in Russia, firmed up the strategic
partnership that they had previously concluded. This agreement is
subject to final documentation and authorisations.
Outlook
Power remains focused on developing in high growth areas, keeping
the lead in clean power and leveraging opportunities in the
installed base. Transport aims to strengthen its positioning in
mature markets, whilst targeting emerging ones with suitable
solutions. Along with the integration of Transmission's
activities into the Group, Alstom will seek to boost its growth
through selective acquisitions if opportunities arise.
Alstom's operational priorities are geared towards leveraging its
competitive advantages to get profitable orders as well as
adapting to the load whilst maintaining flexibility. Focus
remains centred on quality, project execution and strict cost
control.
In the current context, Alstom has set a new operating margin
forecast between 7 and 8% over the next two years, based upon
proper contract execution and gradual recovery of demand.
The Group activity and the consolidated financial statements,
as approved by the Board of Directors, in its meeting held on 3
May 2010, are available on Alstoms website at
www.alstom.com. The accounts have
been audited and certified.
In accordance with AFEP-MEDEF recommendations, information
related to the remuneration of Alstoms Executive Officer
is available on Alstoms website:
www.alstom.com, under About
us/Corporate Governance/Remuneration of the Executive
Officer.
Press Contact
Philippe Kasse, Stéphane Farhi (Corporate)
Tel: +33 1 41 49 29 82 / 33 08
philippe.kasse@chq.alstom.com
stephane.farhi@chq.alstom.com
Investor Relations
Emmanuelle Châtelain
Tel: + 33 1 41 49 37 38
emmanuelle.chatelain@chq.alstom.com
This press release contains forward-looking statements which
are based on current plans and forecasts of Alstoms
management. Such forward-looking statements are relevant to the
current scope of activity and are by their nature subject to a
number of important risk and uncertainty factors (such as those
described in the documents filed by Alstom with the French AMF)
that could cause actual results to differ from the plans,
objectives and expectations expressed in such forward-looking
statements. These such forward-looking statements speak only as
of the date on which they are made, and Alstom undertakes no
obligation to update or revise any of them, whether as a result
of new information, future events or otherwise.