Alstom Sa · EURONEXT:ALO
Alstom Sa — H1 2022/23 Earnings Presentation
49 slides from Alstom Sa's earnings presentation, Nov 16, 2022
Slide 1: Half Year Results Fiscal Year 2022/23
Half Year Results Fiscal Year 2022/23 16 November 2022
Slide 2: Disclaimer
Disclaimer ● This presentation contains forward-looking statements which are based on current plans and forecasts of Alstom’s management. Such forward-looking statements are relevant to the current scope of activity and are by their nature subject to a number of important risks and uncertainty facto
Slide 3: Agenda
Agenda H1 2022/23 Highlights Henri Poupart-Lafarge, Chairman and CEO ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― Financial Results Laurent Martinez, CFO ――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――――― Trajectory and outlook Laurent Martinez, CF
Slide 4: H1 2022/23 Highlights
1 H1 2022/23 Highlights Henri Poupart-Lafarge Chairman and CEO
Slide 5: H1 2022/23 - Highlights
H1 2022/23 - Highlights STRONG MARKET DEMAND CONFIRMED SOLID H1 FINANCIAL RESULTS OPERATIONAL TURNAROUND ON-TRACK FY 2022/23 OUTLOOK • aEBIT within 5.1% to 5.3% range • FCF within €100m to €300m range © ALSTOM SA 2022. All rights reserved. Information contained in this document is indicative only. N
Slide 6: Solid H1 2022/23 results, fully supporting announced trajectory
Solid H1 2022/23 results, fully supporting announced trajectory ORDERS SALES €10.1bn €8.0bn 215 948 kton GWh Scope 1+2 Energy Book-to-bill +8.1% Emissions1 consumption1 1.25 vs H1 2021/22 (6.5)% vs FY 2021/22 (5.0)% vs FY 2021/22 aEBIT FREE MARGIN CASH FLOW 4.9% €(45)m 46 23.6 % % Electricity from W
Slide 7: Market potential confirmed: > €190bn until H1 FY 2025/26
Market potential confirmed: > €190bn until H1 FY 2025/26 ALSTOM SITES €98bn SIGNALLING SYSTEMS EUROPE ROLLING STOCK €31bn AND COMPONENTS AMERICAs EUROPE: Large tenders for rolling stock and ETCS in DACH CANADA €41bn Large systems opportunities RER Toronto APAC Growth across all countries and product
Slide 8: Confirmed market momentum
Confirmed market momentum ORDERS H1 2022/23 (in €bn) +3.6% 10.1 10.1 9.7 10.1 AMECA 1.0 Signalling 1.0 APAC 0.5 Systems 1.7 Americas 0.8 Services 3.0 6.6 Europe Rolling stock 5.5 H1 2021/22 H1 2022/23 H1 2022/23 H1 2022/23 ● Backlog at €85.9bn ● Margin and cash on order intake supporting short and m
Slide 9: Main contracts won in H1 2022/23
Main contracts won in H1 2022/23 €10.1 billion of orders booked in H1 2022/23 High-speed CORADIA STREAM™ Services and very high-speed €2.5 bn €3 Bn ORDER INTAKE IN H1 €0.6 bn BaWû (REGIONAL & SERVICES - Germany) SJ250 (HIGH SPEED - Sweden) €0.3 bn €0.2 bn UK GTR (SERVICES – United Kingdom) CORADIA E
Slide 10: Sales progress in line with announced trajectory
Sales progress in line with announced trajectory SALES H1 2022/23 (in €bn) H1 2022/23 SALES SPLIT BY PRODUCT LINES +8.1% ROLLING STOCK: €4,360m (+2% vs H1 2021/22) 8.0 Stabilizing project execution 7.4 SERVICES: €1,802m (+16% vs H1 2021/22) Significant step-up driven by Europe and Americas SIGNALLIN
Slide 11: Execution under control
Execution under control NON-PERFORMING SALES EXECUTION AS TARGETED UPDATES DURING H1 H1 2022/23 €1.3 €8.0bn ● Last two settlement agreements being finalized Sales Sales traded at zero margin1 ≈ 16% ● Volume of sales in line with guidance PROVISIONS FOR RISKS ON CONTRACTS (€m) Mar 21 Sep 21 Mar 22 Se
Slide 12: Integration process - Highlights
Integration process - Highlights 92% CRITICAL PROCESSES CONVERGED Target 100% by March 2023 DIGITAL SUITE DEPLOYMENT 7 countries live Target 100% by December 2024 (30 countries) SYNERGIES FY 2022/23 ~ €200m vs €102m last year © ALSTOM SA 2022. All rights reserved. Information contained in this docum
Slide 13: Confirmed trajectory on operational performance at H1 2022/23
Confirmed trajectory on operational performance at H1 2022/23 -33% on H1 (avg -20% on H1 ~stable on H1 +8% on H1 6 months) Pre-acq Mar Mar Sep Mar Mar Pre-acq Mar Mar Sep Mar Mar Pre-acq Mar Mar Sep Mar Mar Pre-acq Mar Mar Sep Mar Mar AT ’21 ‘22 ‘22 ’23 ‘25 AT ’21 ‘22 ‘22 ’23 ‘25 AT ’21 ‘22 ‘22 ’23
Slide 14: Alstom is leading the race on Hydrogen
Alstom is leading the race on Hydrogen FIRST HYDROGEN TRAIN DISTANCE RECORD WITHOUT PUBLIC SUPPORT TO BOOST IN COMMERCIAL SERVICE REFUELING HYDROGEN IPCEI validated ● €5.4 billion public support ● 4 projects of Alstom selected €350m subsidies granted © ALSTOM SA 2022. All rights reserved. Informatio
Slide 15: Digital innovations for autonomous mobility
Digital innovations for autonomous mobility PASSENGER TRAIN PROJECT FREIGHT TRAIN PROJECT • Successful tests with automatic lateral signalling systems • Successful test on track in July 2022 and obstacle detection Progress on Automatic Train Operation (ATO) technology © ALSTOM SA 2022. All rights re
Slide 16: Financial Results
2 Financial Results Laurent Martinez CFO
Slide 17: P&L on-track with FY 2022/23 trajectory
P&L on-track with FY 2022/23 trajectory H1 H1 (in € million) Evolution 2021/22 2022/23 Sales 7,443 8,048 +8.1% Cost of Sales (6,494) (6,988) +7.6% Adjusted Gross Margin before PPA¹ 949 1,060 +40bps As a % of sales 12.8% 13.2% Research and development expenses (220) (231) before PPA2 +5.0% 3.0% 2.9%
Slide 18: Profitability bridge H1 2021/22 to H1 2022/23
Profitability bridge H1 2021/22 to H1 2022/23 aEBIT (in %) 4.5% 60bps 10bps 50bps (80)bps 4.9% aEBIT recovery in line with announced trajectory © ALSTOM SA 2022. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied
Slide 19: Macro / inflation challenges during H1 2022/23
Macro / inflation challenges during H1 2022/23 ~2/3 of backlog with indexation ~ 1/3 of backlog without indexation ~50% of H1 sales ~50% of H1 sales Labour costs fixed for 2022/23, Energy costs mostly hedged for 2022/23, Cost-out measures, Customer negotiations • Indexation covering raw materials, e
Slide 20: As announced, sustained integration effort during H1
As announced, sustained integration effort during H1 H1 H1 (in € million) Evolution 2021/22 2022/23 Sales 7,443 8,048 +8.1% Adjusted EBIT 335 397 +18.5% Adjusted EBIT margin 4.5% 4.9% +40bps Restructuring and rationalisation costs (47) (6) +41 Integration cost €64m Integration, acquisition and other
Slide 21: H1 Free Cash Flow close to zero despite expected working capital consumption
H1 Free Cash Flow close to zero despite expected working capital consumption From EBIT to Free Cash Flow (in € million) Restructuring Change in Working Capex Capital1 H1 2022/23 EBIT* R&D capitalised D&A H1 2022/23 Financial & Tax JVs dividends FCF Cash Out Others, o/w: Share-based payments €28m Rem
Slide 22: Working Capital evolution in line with expectations
Working Capital evolution in line with expectations 30 31 March (in € million) September Variation 2022 2022 Contract assets 3,846 4,139 293 Contract liabilities (6,155) (6,299) (144) Inventories 3,274 3,604 330 Trade payables (3,323) (3,535) (212) Trade receivables 2,747 2,572 (175) Other current a
Slide 23: Net debt evolution
Net debt evolution (in € million) (2,306) (2,085) FCF Dividends Leases Remedies, FX (45) and others (51) (76) (49) 31 March 2022 30 September 2022 Net cash/(debt) Net cash/(debt) © ALSTOM SA 2022. All rights reserved. Information contained in this document is indicative only. No representation or wa
Slide 24: Sound and stable liquidity position
Sound and stable liquidity position (IN € MILLION) 4,618 Undrawn Backstop RCF maturing Jan. 2027 with two 1-year extension 2 2,500 ● No financial covenants on any debt Undrawn Liquidity RCF maturing Jan. 2025 with two 1-year extension 2 ● €357m Neu CP as of September 2022 (vs. €250m as of March 2022
Slide 25: Favorable long-term debt profile
Favorable long-term debt profile OUTSTANDING BONDS (IN € MILLION) POSITIVE IMPACT OF INTEREST RATES Jan-29 AVERAGE Oct-26 Jul-30 -17% 0.00% MATURITY 0.25% 0.5% 5.9 years Jul-27 0.125% AVERAGE COUPON +13% 700 750 700 1,203 0.22% 997 500 351 397 2026 2027 2028 2029 2030 2031 Under funded plans liabili
Slide 26: Trajectory and outlook
3 Trajectory and outlook Laurent Martinez CFO
Slide 27: Profitability bridge FY 2021/22 to FY 2022/23
Profitability bridge FY 2021/22 to FY 2022/23 aEBIT (in %) 5.0% ~60bps ~10bps ~30bps (70 - 90) bps 5.1 -5.3% FY 2022/23 outlook confirmed in a range of 5.1% to 5.3% © ALSTOM SA 2022. All rights reserved. Information contained in this document is indicative only. No representation or warranty is give
Slide 28: Free Cash Flow generation confirmed
Free Cash Flow generation confirmed H1 2022/23 - Free Cash Flow FY 2022/23 - Free Cash Flow KEY FCF DRIVERS • aEBIT progression EBIT • R&D - Capex Before PPA • Working Capital & Provisions normalization + D&A EBIT +€100m / +€300m Before PPA + D&A FCF FCF Capex/R&D Capex/R&D €(45)m Change in WC Chang
Slide 29: Conclusion
4 Conclusion Henri Poupart-Lafarge Chairman and CEO
Slide 30: FY 2022/23 outlook specified
MARKET SHARE FY 2022/23 outlook specified +5pp 1 Mid-term 2024/25 targets confirmed SALES CAGR >5%2 ● FY 2022/23 Book to bill above 1 aEBIT ● FY 2022/23 Sales growth consistent with mid-term guidance 8-10%3 ● aEBIT for FY 2022/23 expected in the 5.1% to 5.3% range FCF to Adjusted Net profit ● Free C
Slide 31: Alstom's resilient business model - H1 2022/23 highlights
Alstom’s resilient business model - despite challenging environment H1 2022/23 highlights LEADER POSITION IN A DYNAMIC MARKET supported by secular trends BACKLOG OFFERING LONG-TERM VISIBILITY with improving margin GLOBAL FOOTPRINT, multi-local supply chain STRONG SERVICE AND SIGNALLING FRANCHISES ©
Slide 32: Contacts & Agenda
Contacts & Agenda CONTACTS AGENDA 25 January 2023 Q3 2022/23 publication 29 March 2023 Martin VAUJOUR Alstom ESG Day VP Investor Relations 10 May 2023 Estelle MATURELL ANDINO FY 2022/23 publication Deputy Head Investor Relations Alstom Investor Day 11 July 2023 [email protected] Sha
Slide 33: Appendix
Rai o S ® 2. Q <x if i HT abd aaaia aaa aa siti f ALSTOM
Slide 34: H1 2022/23 backlog per regions and product lines
H1 2022/23 backlog per regions and product lines Backlog breakdown per regions (in € million) Backlog breakdown per product line (in € million) Systems €6,556m Asia Pacific 8% Signalling Americas €12,806m €7,029m €14,283m 15% 8% 17% Rolling stock €42,645m Africa, Middle East & Europe 50% Services Ce
Slide 35: H1 2022/23 Sales per regions and product lines
H1 2022/23 Sales per regions and product lines Sales breakdown per regions (in € million) Sales breakdown per product line (in € million) Systems €734m Asia Pacific €1,178m 9% 15% Signalling €1,152m 14% Americas €1,352m Europe €4,788m 17% 59% Rolling stock €4,360m Services €1,802m 54% 23% Africa, Mi
Slide 36: Sales by currency
Sales by currency H1 2022/23 Currencies as a % of sales EUR 48.9% USD 13.1% GBP 12.0% AUD 5.0% INR 4.5% ZAR 2.7% SEK 2.3% CAD 1.8% SGD 1.4% Currencies below 1% of sales 8.3% © ALSTOM SA 2022. All rights reserved. Information contained in this document is indicative only. No representation or warrant
Slide 37: Equity in € million
Equity in € million * 9,024 9,392 9,117 March 2022 Movements in other Net income Dividends Capital increase Share based September 2022 comprehensive payment income *capital increase by issuance of new shares linked with scrip dividend © ALSTOM SA 2022. All rights reserved. Information contained in t
Slide 38: Bridge consideration – From Enterprise Value to Equity Value
Bridge consideration – From Entreprise Value to Equity Value (in € million) H1 2022/23 Total Gross debt, incl. lease obligations (1) 3 810 Pensions liabilities net of prepaid and deferred tax asset related to pensions (2) 551 Non controlling interest (3) 113 Cash and cash equivalents (4) (833) Other
Slide 39: Bombardier Transportation PPA provisional amortisation plan
Bombardier Transportation PPA provisional amortisation plan As per P&L (in € million) Booking 1 FY 2020/21 (71) ● The Gross PPA amortisation plan will be subject to FX evolution in FY 2021/22 (428) future years or subject to potential impairments H1 FY 2022/23 (207) H2 FY2022/23 (199) ● Refer to Not
Slide 40: Reconciliation between consolidated income statement and MD&A view, 30 September 2022
Reconciliation between consolidated income statement and the MD&A management view as of 30 September 2022 (in € million) Tota l Ajustments Tota l Con s ol i da ted Con s ol i da ted Fi n a n ci a l Fi n a n ci a l S ta tem en ts (1) (2) (3) (4) S ta tem en ts (GAAP) (M D &A vi ew) 30 Sep temb er 202
Slide 41: Reconciliation between consolidated income statement and MD&A view, 30 September 2021
Reconciliation between consolidated income statement and the MD&A management view as of 30 September 2021 Adjustments as of 30 September 2021: 1. Impact of business combinations: amortisation of assets exclusively valued when determining the purchase price allocation (PPA), including corresponding t
Slide 42: Contract and Completed Contract accounting
Contract and Completed Contract accounting Warranty provision Illustration of a theoretical Rolling Stock contract Completed contract accruals €m Design / homologation phase. Fixed costs spend Deliveries, acceptance Downpayment Industrial ramp-up Warranty phase Contract Cash curve Reliability growth
Slide 43: Contract accounting – P&L – Glossary
Contract accounting – P&L – Glossary • Revenue and Contract Margin are recognized at the percentage of completion method based on Costs-to-Costs under IFRS15: • Percentage of completion (PoC) = Costs accumulated to date divided by Costs at completion • Cumulative sales to date = Selling Price at com
Slide 44: Contract and Completed contract accounting – Working Capital – Glossary
Contract and Completed contract accounting – Working Capital – Glossary • Contract Liabilities are made of • Down-payments received (upfront payment received at inception to finance the contract) • Deferred income on contracts : when cumulative billing of the contract is exceeding cumulative trading
Slide 45: Other Working Capital items - Glossary
Other Working Capital items - Glossary • Inventories are mainly raw materials and semi-finished goods. They are recognized when goods are received at the factory1. Inventories are transferred to Contract Assets / liabilities when they exit the warehouse and are entering the assembly line, then alloc
Slide 46: Other Working Capital items - Glossary
Other Working Capital items - Glossary • Other current operating assets are mainly : • 40 to 50% represent B/S side of financial derivatives and hedged firm commitments not yet turned into a receivable • The remainder consists in • Taxes (VAT, CIT…) • Downpayment to suppliers • Prepaid expenses • No
Slide 47: Non-GAAP financial indicators definitions (1/2)
Appendix - Non-GAAP financial indicators definitions (1/2) This section presents financial indicators used by the Group that are not defined by accounting standard setters. • Orders received A new order is recognised as an order received only when the contract creates enforceable obligations between
Slide 48: Non-GAAP financial indicators definitions (2/2)
Appendix - Non-GAAP financial indicators definitions (2/2) ● EBIT before PPA Following the Bombardier Transportation acquisition and with effect from the fiscal year 2021/22 condensed consolidated financial statements, Alstom decided to introduce the “EBIT before PPA” indicator aimed at restating it
Slide 49: www.alstom.com
www.alstom.com www.alstom.com