During the first quarter 2010/11, Alstoms sales showed resilience, whilst orders were impacted by a lack of large projects

During the first quarter of 2010/11
(from 1 April to 30 June 2010), orders booked by Alstom amounted to 3.1 billion.
Sales, at 4.7 billion, were slightly down as compared to the same period of
last year¹. 

Power received orders of 2 billion during the first quarter. The lack of
large projects was partly offset by the resilience of small and medium-sized
contracts, particularly in service and retrofit. Transport registered 1.1 billion of
new orders, including a major commercial success in Russia.

During the first quarter 2010/11, sales grew by 9% in Transport,
whilst they started to decline in Power, down 6% versus the first quarter 2009/10, as a consequence of the order evolution over the
last  fiscal year in this Sector. 

The total backlog remained stable at 42 billion on 30 June 2010,
benefiting from a 1.3 billion currency effect. It represented 27 months of sales.

 

Key
figures

 

This
first quarter confirms the resilience of small and medium-sized contracts in
Power but, despite the busy tendering activity, the Group still faces
challenges to register large orders as customers continue to delay their
investments in new power plants. In Transport, the market remains sound,
offering a number of opportunities. Sales have grown in Transport, whilst, as
expected, they have started declining in Power, after the strong decrease in
the order intake of the last fiscal year , said Patrick Kron, Chairman & Chief Executive Officer of
Alstom.

 

Sector Review² 

 

Power  

Order intake at
2 billion for the first quarter of the fiscal year 2010/11 showed a decrease
of 35% versus the first quarter of last year. This evolution reflects the
challenging commercial environment for new equipment. 

Thermal Systems & Products received small and
medium-sized orders only in the first quarter of the fiscal year 2010/11. The
Thermal Services Business registered a large number of projects for both
retrofit and service, as well as operation and maintenance contracts in Spain. In
Renewables, the main orders booked in the first quarter were for hydro
contracts in the Americas,
as well as for wind turbines in Brazil. 

Sales in Power,
at 3.2 billion, decreased by 6% (-10% on an organic basis³) in comparison with the same period of last year, due to the expected slowdown of the turnover in Thermal Systems & Products. 

 

Transport 

Orders, at 1.1
billion in the first quarter of the fiscal year 2010/11, remained sustained
despite being down 37% as compared with the first quarter 2009/10, which
included several large contracts in Europe and South America.   

The main orders
booked in the first quarter 2010/11 included locomotives in Russia, as well as contracts in Sweden for
suburban trains and maintenance. 

In the first quarter
of the fiscal year 2010/11, sales, at 1.6 billion, were up by 9% (+7% on an organic basis³)compared to the same
period of the last fiscal year.  

 

Key events of the first quarter 2010/11   

 

On 20 May 2010, Alstom entered the solar market by investing $55 million
in BrightSource Energy Inc. This US privately-owned company
specialises in designing, building and operating tower-based solar thermal
power plants. 

 

On 2 June 2010, Alstom acquired Amstar, a coating services company in the
United States,
which had sales of approximately $11 million in 2009 and employed 50 people.
This acquisition strengthened Alstoms service offerings with advanced
technologies that improve power plant component life. 

 

On 7 June 2010, Alstom and Schneider Electric completed the transaction
with Areva for the acquisition of Areva T&D, its transmission and
distribution businesses, after obtaining the approvals of the relevant
competition authorities and the French Commission des Participations et des
Transferts (CPT). With this acquisition, Alstom created a third Sector, named
Alstom Grid, constituting the high voltage energy transmission business of the
Group. Alstoms expertise in power generation combined with the capabilities
acquired in grid management positions the Group in the key market of Smart
Grid.  

 

On 19 June 2010, Alstom, Transmashholding and Kazakh Railways (KTZ)
signed an agreement for the creation of a joint company to manufacture electric
locomotives in Kazakhstan. 

 

On 24 June 2010, Alstom inaugurated a new production facility in Chattanooga, Tennessee, (USA) for steam
and gas turbines, large turbo-generators and related equipment for the North
American fossil fuel and nuclear power generation market. It will also retrofit
existing steam turbines with leading edge technology.  

 

Financial situation 

During the first quarter 2010/11, Alstom turned into a net debt position,
due to the financing of Areva Transmission for 2.3 billion, the payment of the
dividend for 364 million as well as the impact on the free cash flow of the
low book-to-bill ratio. 

 

Outlook 

The Group confirms that the operating
margin for the two fiscal years 2010/11 and 2011/12 should be between 7% and
8%, based
upon proper contract execution and gradual recovery of demand.

 

 

***

 

Note 1: Orders and sales for Alstom Grid were not yet available on
30 June 2010 for release. The new Sector will be fully consolidated on 30
September 2010 in the half year results and will account for four months. 

Note 2: The reported figures by Sector are presented in appendix
1. A geographic breakdown of reported orders and sales is provided in appendix
2. As for all figures mentioned in this release, these are unaudited.  

Note 3: i.e.
excluding any currency & scope impacts. For this quarter, these are mostly
positive currency effects. 

 

 

 

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. 

 

Appendix 1 Sector Breakdown by Quarter

 

 

 

(*) Figures given for
comparison and analysis purposes only  

Appendix 2
Geographic Breakdown