Full Year Results 2004/05 1st April 2004 - 31st March
2005
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ALSTOMs recovery is clearly reflected in the
FY04/05 results:
- Orders received of 15.8 billion, up 15 per cent on
a comparable basis from FY03/04
- Operating income at 550 million, multiplied by
three on a comparable basis versus 168 million in the
previous fiscal year; operating margin up from 1.2 per cent
in FY03/04 to 4.0 per cent in FY04/05
- Net losses cut in half to 0.86 billion from
1.84 billion in FY03/04 in spite of significant
non-recurring charges
- Net debt strongly reduced during the fiscal year, down to
1.4 billion from 3.7 billion
- Free Cash Flow showing strong improvement at -170
million versus -1007 million in the last fiscal year
- Liquidity reinforced due to the financial consolidation
undertaken during the fiscal year
2005/06 objectives confirmed:
- 6 per cent operating margin leading to a return to
profitability
- Positive Free Cash Flow with continuing debt
reduction
The Board, in its meeting held on 30th May 2005, has
approved the accounts for the fiscal year 2004/05. Commenting
on these results, Patrick Kron, Chairman & Chief Executive
Officer said:
The results we are presenting today clearly
demonstrate the ongoing recovery of ALSTOM. All key indicators
are in line with, or better than the guidance previously given.
These results enable us to confirm the FY 2005/06 targets
announced in March 2003 when we launched our recovery plan: an
operating margin of 6 per cent leading to a return to
profitability and a positive Free Cash Flow.
Customers renewed confidence in ALSTOM is clearly
evidenced by 15.8 billion of orders, up 15 per cent on a
comparable basis from FY03/04. This positive trend is not only
quantitative but also qualitative. Margins on orders booked
continue to improve; those in our current order book, which
represents two years of sales, are in line with the
profitability targets announced for the Group and its
operational Sectors. On a geographical basis, the commercial
success achieved in markets with strong growth potential is
encouraging. Chinese orders reached 1.6 billion, more
than twice the level of the previous year, and orders from
India were close to 0.5 billion.
Our operational performance is greatly enhanced: the
GT24/GT26 heavy-duty gas turbine issue is now resolved, with
the remaining disbursements fully reserved.Agreements with our
customers have been reached on 74 out of the 76 turbines sold.
New orders for a total of seven machines - have been
secured in Spain and in Thailand, and new tenders are under
review in several countries. We have actively pursued our
cost-cutting programme; a set of restructuring measures, aimed
at adapting our industrial and engineering capacity and
improving our overall efficiency has led to a reduction of the
workforce by 11,500 (8,000 departures to date), which should
bring an annual reduction in costs of 500 million. We
have focused on the improvement of contract execution, adapting
our manpower, organisation and internal controls. These actions
have allowed us, in spite of the low level of sales resulting
from low order intake 12 to 18 months ago, to significantly
increase our operational income, with the operating margin, on
a comparable basis, rising from 1.2 per cent to 4 per cent. Our
Free Cash Flow is also considerably better with net cash
outflow reduced from 1,007 million last financial year
to 170 million in 2004/05 out of which
366 million were spent as part of the settlement of the
GT24/26 problem.
Thanks to our ongoing disposal programme and to the capital
increases which took place in July 2004, our net debt has been
significantly reduced, from 3.7 billion to 1.4
billion in March 2005. The successful refinancing undertaken in
February 2005 and our current headroom (our cash at holding
company level and the available undrawn credit lines at 31
March 2005 stood at 2 billion) give us a considerable
buffer to cover our future liquidity needs.
The progress achieved makes us confident for the future. The
ambitious objectives we have set for March 2006 are thus
confirmed: an operating margin of 6 per cent allowing for the
return to profitability and a positive Free Cash Flow.
Obviously we intend to further improve our performance beyond
our current financial year: operating margin at the end March
2008 should be up by one or two percent, reaching 7 to 8
percent, and Free Cash Flow, thanks to a strict management of
working capital, should also continue to show strong growth.
Thus, from a significantly stronger base, ALSTOM will pursue an
ambitious and profitable development strategy in its growing
markets.