Alstom pursues its growth and improves once again its
profitability for the fiscal year 2008/09

During the same period, income from operations grew by 19%,
leading to an operating margin of 8.2%. This substantial rise
in profitability allowed the net income to reach 1.1
billion, up by 30%. The Groups financial situation was
further strengthened by the cash generation of 1.5
billion over the year. At its next Annual General Meeting,
Alstom will propose to increase the dividend by 40% to
1.12 per share.


 

Alstom once again posted healthy results in the
fiscal year 2008/09, with a solid performance in both Power and
Transport activities. The brutal downturn in the worlds
economy has created uncertainties in our markets. We expect
demand for rail transportation to remain sustained, notably
thanks to the stimulus packages; demand for new equipment in
the power market should drop as some future projects may be
postponed, while demand for service is expected to be less
volatile. Alstom benefits from strong assets to face this
challenging environment: a competitive industrial positioning
worldwide, a solid customer base, a sound financial structure
and a record backlog. The visibility provided by the backlog
allows us to confirm our operating margin estimate for March
2010 at around 9%. Furthermore, to continue to smoothly weather
the economic crisis, the Group has initiated actions aimed at
optimising costs, developing flexibility and prioritising
future investments, while continuing to ensure a proper
execution of its large order book , said Patrick
Kron, Alstoms Chairman and Chief Executive Officer.


Strong commercial activity



During the fiscal year 2008/09, the Group booked 24.6
billion of new orders, a 5% increase from the already very high
level of the previous fiscal year, bringing its backlog to
45.7 billion (+16%), which represents 29 months of
sales. Both activities contributed to this growth in order
intake: +3% in Power and +9% in Transport.


Power received several orders for gas turnkey plants, mainly in
Europe, South East Asia and Northern Africa, as well as large
contracts for oil/coal power plants in Saudi Arabia, South
Africa and Europe. The Sector also recorded orders for
conventional islands in Chinese nuclear power plants, as well
as for important hydro projects in Latin America and Portugal.
Power signed operation and maintenance contracts, mainly
related to gas-fired power plants, notably in Europe and the
Middle East/Africa.


Transport set a new record in order intake, notably by booking
very high speed trains (AGV) in Italy and Pendolinos in the UK,
both associated to maintenance contracts, tramways in Northern
Africa, metros in the Americas and Asia as well as regional
trains in Northern Europe and Australia.

The progressive delivery of the large backlog led to a
further growth in sales. They rose from


16.9 billion in the fiscal year 2007/08 to 18.7
billion in 2008/09, representing a 11% increase. Sales grew by
15% in Power and by 3% in Transport.


Further rise in profitability



In the fiscal year 2008/09, income from operations amounted to
1,536 million, up 19% from 1,295 million in the
previous year and operating margin improved from 7.7% to 8.2%.
The operating margin of Power grew from 8.9% to 9.6%, driven by
the better quality of contracts booked over the recent periods
combined with volume increase and continued focus on project
execution. In Transport, the operating margin remained stable
at 7.2% in spite of higher spending on new platforms.

Net profit increased by 30%, amounting to 1,109
million compared to 852 million in the fiscal year
2007/08. This evolution came mainly from improved operational
performance and a positive financial income.


Sound financial structure


Free cash flow amounted to 1,479 million for the fiscal
year 2008/09 compared to 1,635 million in the fiscal
year 2007/08. An improved profitability associated with a
favourable working capital evolution, largely driven by a
book-to-bill ratio above 1.3, explains this strong cash flow
generation.

Thanks to this very high free cash flow, Alstom has a net
cash position of 2,051 million at 31 March 2009, as
compared to 904 million at 31 March 2008, after payment
of the dividend. Gross cash amounted to 2.9 billion and
a credit line of 1 billion maturing in 2012 remains
undrawn. Alstom also benefits from contract bonding lines of
21.5 billion, of which 7.5 billion are
available.

After payment of the dividend in July 2008 and the negative
impact of pensions variation due to the adverse performance of
the financial markets, equity increased from 2,245
million at 31 March 2008 to 2,884 million at 31 March
2009 as a result of the strong net income.

Standard & Poor's and Moody's reiterated their BBB+ and
Baa1 credit rating in May 2009.


 

Dividend policy



The Board of Directors has decided to propose a 1.12 per
share dividend at the next Annual General Meeting, to be held
on 23 June 2009. It represents a 40% increase as compared to
the dividend of last year. If approved, the dividend will be
distributed on 30 June 2009.


Preparing the future


Alstom benefits from its robust results of 2008/09 and from a
high visibility given by its large order book. Nevertheless it
has to adapt to the current uncertain economic environment. An
internal plan has been launched to get a stricter control on
costs; the streamlining of the Power organisation through the
merger of Power Systems and Power Service Sectors will also
allow costs to be reduced, while optimising Alstoms
offering and better managing the supply chain. While making
available the resources needed for the execution of its
backlog, the Group will keep its flexible structure to adapt to
future evolutions of demand.

Capital expenditures amounted to 499 million, up by
33% as compared to last year. The programmes launched to
reinforce Powers industrial base in Asia and the USA as
well as to strengthen Transports competitive positions
in Europe will be completed, while future investments are
strictly prioritised.

Research and development expenses at 586 million rose
by 6% as compared to the previous year. Efforts will be
maintained to keep the lead in clean power and in Transport to
pursue the standardisation strategy as well as the
consolidation of its strong positions in key areas such as very
high speed trains.


Finally, as part of its strategy to address high growth
markets, the Group entered into a global partnership with
Transmashholding, the leading rolling stock supplier of the
Russian railway market.


Outlook


Alstom confirms that the operating margin of the Group in March
2010 should reach around 9%, with an operating margin for the
Power Sector between 10% and 11% and for the Transport Sector
between 7% and 8%.


 

The Group activity and the consolidated financial
statements can be found on Alstoms website atwww.alstom.com

In accordance with AFEP-MEDEF recommendations, information
related to the remuneration of Alstoms Executive Officer
is available on Alstoms website: www.alstom.com, under
Investors/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 ChâtelainTel: + 33 1 41 49 37 38

emmanuelle.chatelain@chq.alstom.com