- Very solid order intake of €9.7 billion for H1 2021/22, +81% versus proforma, robust backlog at €76.4 billion
- Sales H1 2021/22 at €7.4 billion, +14% versus proforma
- aEBIT12 margin at 4.5%
- Adjusted net profit23 of €172 million
- Free Cash Flow2 at €(1.46) billion for H1 2021/22, due to anticipated non-recurring adverse working capital change. Positive Free Cash Flow H2 2021/22 confirmed
Bombardier Transportation integration fully on track and progress on projects stabilisation- €400m synergies run rate4 and outlook 2024/25 confirmed
“Our first semester results are in line with our expectations as announced at the Capital Markets Day in July. During the first semester, the Group had a very strong commercial performance across all regions and product lines, illustrated by significant wins in
Key figures5
Actual figures (in € million) | Half-year ended | Half-year ended 30 September 2020 proforma5 | Half-year ended | % change reported | % change proforma5 | ||
Orders backlog | 40,001 | 76,362 | 91% | ||||
Orders received2 | 2,652 | 5,364 | 9,726 | 267% | 81% | ||
Sales | 3,518 | 6,536 | 7,443 | 112% | 14% | ||
Adjusted EBIT1 2 | 263 | 335 | 27% | ||||
Adjusted EBIT margin1 2 EBIT before PPA2 | 7.5% 197 | 4.5% 179 | |||||
Adjusted net profit2 3 | 168 | 172 | |||||
Free Cash Flow2 | (253) | (1,461) |
***
Strategic and business update
The enlarged Group profile made progress on all four strategic pillars of its
1. Growth by offering greater value to customers
- Orders
The Group booked a very solid order intake of €9,726 million in H1 2021/22 versus €5,364 million in H1 2020/21 proforma (+81%), sustained by a strong commercial dynamic.
The book-to-bill ratio exceeded 1.3. The backlog amounted to €76.4 billion on
- Sales
In H1 2021/22 (from 1 April to
H1 2021/22 sales in Services amounting €1,559 million illustrates the positive impact of traffic pick-up. In Rolling stock, the H1 2021/22 sales at €4,285 million were sustained by the progressive ramp-up of production. In Signalling,
Sales related to non-performing backlog, representing sales on project under cost-to-cost method with a negative margin at completion amounted to €1.29 billion in H1 2021/22.
2. Innovation by Pioneering Smarter and Greener Mobility for All
During the first half of fiscal year 2021/22,
In
In
3. Efficiency at scale, Powered by Digital
Below adjusted EBIT,
Adjusted net profit8 reached € 172 million compared to €168 million the previous year, impacted by the volume effect, the integration costs and other one-off items below adjusted EBIT. Net profit from continued operations (Group share) stood at €(24) million, including net effect from purchase price allocation (PPA) after tax for €(196) million.
The gross margin backlog improved during H1 2021/22, based on trading low margin backlog and healthy gross margin on order intake.
4. One
In 2021/22, the
***
Balance sheet
During the first half of fiscal year 2021/22, the Group Free Cash Flow is negative at €(1,461) million. As anticipated, the Free Cash Flow has been impacted by non-recurring working capital build-up due to project stabilisation efforts, phasing effect and industrial ramp-up.
The Group held €1,139 million of cash and cash equivalent at the end of
Consequently, the Group liquidity stood at €4,389 million as of
In
***
Clear global integration roadmap
The new organisation of
On processes convergence,
On IT integration,
The products convergence is on track. The products and components portfolios of both legacies have been reviewed extensively, enabling
***
Outlook for fiscal year 2021/22
As the basis for its 2021/22 guidance, the Group assumes neither further disruptions to the world economy, nor significant supply-chain shortages, that would materially impact the Group’s ability to deliver products and services.
- Book to bill ratio above 1 on the back of a very good visibility on the short-term pipeline,
- Sales progression in H2 vs H1 2021/22 as a result of production ramp-up and stabilisation efforts,
- Progressive recovery of aEBIT,
- Free Cash Flow generation as of H2 2021/22 and onwards.
***
Mid-term financial trajectory and objectives
The outlook given in connection with the Capital Markets Day held on 6 July 2021 is confirmed
- Sales: Between 2020/21 (proforma sales of €14 billion) – and 2024/25,
Alstom is aiming at sales Compound Annual Growth Rate over 5% supported by strong market momentum and unparalleled €76.4 billion backlog as of30 September 2021 , securing ca. €30 billion of sales over the next three years. Rolling stock should grow above market rate, Services at solid mid-single digit path and Signalling at high single digit path. - Profitability: The adjusted EBIT margin should reach between 8% and 10% from 2024/25 onwards, benefiting from operational excellence initiatives, the completion of the challenging projects in backlog while synergies are expected to deliver €400 million run rate between 2024/25 and 2025/26.
- Free Cash Flow: From 2024/25 onwards, the conversion from adjusted net income12 to Free Cash Flow should be over 80%13 driven by mid-term stability of working capital, stabilisation of CAPEX to around 2% of sales and cash focus initiatives while benefiting from volume and synergies take up.
Alstom will maintain its disciplined capital allocation focusing on maintaining its investment grade profile while keeping flexibility and ability to pursue growth opportunities through focused bolt-on M&A.Alstom is committed to delivering sustained shareholder returns with a dividend pay-out ratio14 of between 25% and 35%15
***
The management report and the consolidated financial statements, as approved by the Board of Directors, in its meeting held on 9 November 2021, are available on Alstom’s website atwww.alstom.com. These financial statements were audited by the Statutory Auditors whose certification report is in the process of being issued.
1 aEBIT includes equity-accounted investments when these are considered to be part of the operating activities of the Group. This mainly includes Chinese joint-ventures, namely
2 Non - GAAP. See definition in the appendix
3 Net profit from continued operations (Group share) excluding the impact of amortisation of assets exclusively valued when determining the PPA in the context of business combination, net of the corresponding tax effect.
4 Objective to generate €400 million cost synergies on annual run rate basis by the fourth to fifth year after closing of the acquisition of
5 Geographic and product breakdowns of reported orders, backlog and sales are provided in Appendix 1. Any reference in this document to variations « Pro forma like-for-like», orders and sales, correspond to a combined, non-audited, group vision including
6 Excluding €(38) million of amortisation expenses of the purchase price allocation of
7 Non - GAAP. See definition in the apendix
8 net profit from continued operations (Group share) excluding the impact of amortisation of assets exclusively valued when determining the PPA in the context of business combination, net of the corresponding tax effect.
9 On legacy perimetre
10 €1,500 million long term Revolving Credit Facility maturing in
11 Negociable European Commercial Papers
12 Adjusted net income
13 Subject to short term volatility
14 The pay-out ratio is calculated by dividing the amount of the overall dividend with the "Adjusted net profit from continuing operations attributable to equity holders of the parent, group share" as presented in the management report in the consolidated financial statements.
15 Of adjusted net income
About | Leading societies to a low carbon future, | ||||||||
Contacts | Press: Coralie COLLET - Tel.: +33 (1) 57 06 18 81 coralie.collet@alstomgroup.com Samuel MILLER - Tel.: +33 (1) 57 06 67 74 Samuel.miller@alstomgroup.com Investor relations: Martin VAUJOUR - Tel.: +33 (6) 88 40 17 57 martin.vaujour@alstomgroup.com Claire LEPELLETIER – Tel.: +33 (6) 76 64 33 06 claire.lepelletier@alstomgroup.com |
This press release 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 factors (such as those described in the documents filed by
This press release does not constitute or form part of a prospectus or any offer or invitation for the sale or issue of, or any offer or inducement to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for any shares or other securities in the Company in
APPENDIX 1A – GEOGRAPHIC BREAKDOWN
Actual figures | H1 | % | H1 | % |
(in € million) | 2020/21 | Contrib. | 2021/22 | Contrib. |
1,088 | 41% | 6,256 | 64% | |
249 | 10% | 2,270 | 23% | |
432 | 16% | 1,042 | 11% | |
883 | 33% | 158 | 2% | |
Orders by destination | 2,652 | 100% | 9,726 | 100% |
Actual figures | H1 | % | H1 | % |
(in € million) | 2020/21 | Contrib. | 2021/22 | Contrib. |
20,398 | 51% | 41,681 | 55% | |
5,106 | 13% | 11,653 | 15% | |
6,262 | 16% | 11,398 | 15% | |
8,235 | 20% | 11,630 | 15% | |
Backlog by destination | 40,001 | 100% | 76,362 | 100% |
Actual figures | H1 | % | H1 | % |
(in € million) | 2020/21 | Contrib. | 2021/22 | Contrib. |
2,017 | 57% | 4,620 | 62% | |
557 | 16% | 1,226 | 16% | |
424 | 12% | 1,045 | 14% | |
520 | 15% | 552 | 7% | |
Sales by destination | 3,518 | 100% | 7,443 | 100% |
APPENDIX 1B – PRODUCT BREAKDOWN
Actual figures | H1 | % | H1 | % |
(in € million) | 2020/21 | Contrib. | 2021/22 | Contrib. |
Rolling stock | 890 | 34% | 5,023 | 51% |
Services | 820 | 31% | 1,522 | 16% |
Systems | 374 | 14% | 2,195 | 23% |
Signalling | 568 | 21% | 986 | 10% |
Orders by destination | 2,652 | 100% | 9,726 | 100% |
Actual figures | H1 | % | H1 | % |
(in € million) | 2020/21 | Contrib. | 2021/22 | Contrib. |
Rolling stock | 19,838 | 50% | 38,983 | 51% |
Services | 13,899 | 35% | 24,420 | 32% |
Systems | 2,218 | 5% | 6,348 | 8% |
Signalling | 4,046 | 10% | 6,611 | 9% |
Backlog by destination | 40,001 | 100% | 76,362 | 100% |
Actual figures | H1 | % | H1 | % |
(in € million) | 2020/21 | Contrib. | 2021/22 | Contrib. |
Rolling stock | 1,713 | 49% | 4,285 | 58% |
Services | 662 | 19% | 1,559 | 21% |
Systems | 452 | 13% | 522 | 7% |
Signalling | 691 | 19% | 1,077 | 14% |
Sales by destination | 3,518 | 100% | 7,443 | 100% |
APPENDIX 2 – INCOME STATEMENT
Actual figures | Half-Year ended | Half-year ended |
(in € million) | ||
Sales | 3,518 | 7,443 |
Adjusted Gross Margin before PPA* | 634 | 949 |
Adjusted Earnings Before Interest and Taxes (aEBIT)* | 263 | 335 |
Restructuring and rationalisation costs | (7) | (47) |
Impairment loss and other | 33 | (32) |
Covid-19 inefficiencies & incremental costs | (68) | - |
Reversal of net interest in equity investees pick-up | (24) | (77) |
EARNING BEFORE INTEREST AND TAXES (EBIT) BEFORE PPA* | 197 | 179 |
Financial result | (23) | (20) |
Tax result | (38) | (43) |
Share in net income of equity investees | 37 | 65 |
Minority interests from continued operations | (5) | (9) |
Adjusted net profit* | 168 | 172 |
PPA net of tax | (7) | (196) |
Net profit – Continued operations, Group share | 161 | (24) |
Net profit (loss) from discontinued operations | 9 | (2) |
Net profit (Group share) | 170 | (26) |
* see definition below
APPENDIX 3 – FREE CASH FLOW
Actual figures (in € million) | Half-Year ended | Half-Year ended |
EBIT before PPA | 197 | 179 |
Depreciation and amortisation1 | 94 | 226 |
Restructuring variation | (15) | 10 |
Capital expenditure | (54) | (135) |
R&D capitalisation | (39) | (34) |
Change in working capital2 | (433) | (1,697) |
Financial cash-out | (21) | (10) |
Tax cash-out | (30) | (86) |
Other | 48 | 85 |
Free Cash Flow | (253) | (1,461) |
1 Before PPA
2 Change in working capital for €1,697 million corresponds to the €1,763 million changes in working capital resulting from operating activities disclosed in the condensed interim consolidated financial statements from which the €66 million variations of restructuring provisions and of corporate tax and other tax have been excluded.
APPENDIX 4 - NON-GAAP FINANCIAL INDICATORS DEFINITIONS
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 the Group and its customer.
When this condition is met, the order is recognised at the contract value.
If the contract is denominated in a currency other than the functional currency of the reporting unit, the Group requires the immediate elimination of currency exposure using forward currency sales. Orders are then measured using the spot rate at inception of hedging instruments.
Book-to-Bill
The book-to-bill ratio is the ratio of orders received to the amount of sales traded for a specific period.
Adjusted Gross Margin before PPA
Adjusted Gross Margin before PPA is a Key Performance Indicator to present the level of recurring operational performance. It represents the sales minus the cost of sales, adjusted to exclude the impact of amortisation of assets exclusively valued when determining the purchase price allocations (“PPA”) in the context of business combination as well as non-recurring “one off” items that are not supposed to occur again in following years and are significant.
Adjusted EBIT
Adjusted EBIT (“aEBIT”) is the Key Performance Indicator to present the level of recurring operational performance. This indicator is also aligned with market practice and comparable to direct competitors.
Starting
aEBIT corresponds to Earning Before Interests and Tax adjusted for the following elements:
- net restructuring expenses (including rationalisation costs);
- tangibles and intangibles impairment;
- capital gains or loss/revaluation on investments disposals or controls changes of an entity;
- any other non-recurring items, such as some costs incurred to realise business combinations and amortisation of an asset exclusively valued in the context of business combination, as well as litigation costs that have arisen outside the ordinary course of business;
- and including the share in net income of the operational equity-accounted investments.
A non-recurring item is a “one-off” exceptional item that is not supposed to occur again in following years and that is significant.
Adjusted EBIT margin corresponds to Adjusted EBIT in percentage of sales.
EBIT before PPA
Following the
The non-GAAP measure adjusted EBIT (aEBIT hereafter) indicator reconciles with the GAAP measure EBIT as follows:
Half-Year ended | Half-year ended | |
(in € million) | ||
Adjusted Earnings Before Interest and Taxes (aEBIT) | 263 | 335 |
aEBIT (in % of Sales) | 7.5% | 4.5% |
Restructuring and rationalisation costs | (7) | (47) |
Integration, acquisition and other costs | 33 | (32) |
Covid-19 inefficiencies and incremental costs | (68) | - |
Reversal of Net interest in equity investees pick-up | (24) | (77) |
Earnings Before Interest and Taxes (EBIT) before PPA | 197 | 179 |
PPA amortisation* | (7) | (217) |
Earnings before Interest and Taxes (EBIT) | 190 | (38) |
* Gross amount before tax
Adjusted net profit
Following the
This non-GAAP measure adjusted net profit indicator reconciles with the GAAP measure net profit from continued operations attributable to equity holders (net profit – Group share) as follows:
(in € million) | Half-Year ended | Half-Year ended | |
Adjusted net profit | 168 | 172 | |
Amortisation of assets valued when determining the purchase price allocation | (7) | (196) | |
Net profit from continued operations attributable to equity holders | 161 | (24) |
Free Cash Flow
Free Cash Flow is defined as net cash provided by operating activities less capital expenditures including capitalised development costs, net of proceeds from disposals of tangible and intangible assets. Free Cash Flow does not include any proceeds from disposals of activity.
The most directly comparable financial measure to Free Cash Flow calculated and presented in accordance with IFRS is net cash provided by operating activities.
A reconciliation of Free Cash Flow and net cash provided by operating activities is presented below:
Half-Year ended | Half-year ended | |
(in € million) | ||
Net cash provided by / (used in) operating activities Of which operating flows provided / (used) by discontinued operations | (162) | (1,293) |
Capital expenditure (including capitalised R&D costs) | (92) | (169) |
Proceeds from disposals of tangible and intangible assets | 1 | 1 |
Free Cash Flow | (253) | (1,461) |
Net cash/(debt)
The net cash/(debt) is defined as cash and cash equivalents, marketable securities and other current financial asset, less borrowings.
Half-Year ended | Half-Year ended | ||
(in € million) | 30 September 2020 | 30 September 2021 | |
Cash and cash equivalents | 1,953 | 1,139 | |
Other current financial assets | 25 | 37 | |
Less: | |||
Current financial debt | 384 | 1,074 | |
Non-current financial debt | 751 | 2,628 | |
Net cash/(debt) at the end of the period | 843 | (2,526) |
Proforma like-for-like new
The "proforma like-for-like New Alstom" variations, orders and sales, correspond to the like-for-like variation of
Adjusted income statement, EBIT and Adjusted Net Profit
This section presents reconciliation between consolidated income statement and the MD&A management view.
Total Consolidated | Adjustments | Total Adjusted | |||
(in € million) | Income statement (GAAP) | (1) | (2) | (3) | Income Statement (Management view) |
Sales | 7,443 | 7,443 | |||
Cost of sales | (6,694) | 179 | 21 | (6,494) | |
Adjusted Gross Margin before PPA(1)(2) | 749 | 179 | 21 | - | 949 |
R&D expenses | (258) | 38 | (220) | ||
Selling expenses | (162) | (162) | |||
Administrative expenses | (309) | (309) | |||
Equity pick-up | - | 77 | 77 | ||
Adjusted EBIT (1)(2) | 20 | 217 | 21 | 77 | 335 |
Other income / (expenses) | (58) | (21) | (79) | ||
Equity pick-up (reversal) | - | (77) | (77) | ||
EBIT / EBIT before PPA (2) | (38) | 217 | - | - | 179 |
Financial income | 6 | 6 | |||
Financial expenses | (26) | (26) | |||
Pre-tax income | (58) | 217 | - | - | 159 |
Income tax charge | (22) | (21) | (43) | ||
Share in net income of equity-accounted investments | 65 | 65 | |||
Net profit (loss) from continued operations | (15) | 196 | - | - | 181 |
Net (profit) loss attributable to non controlling interests | (9) | (9) | |||
Net profit (loss)/Adjusted Net Profit (loss)(2) | (24) | 196 | - | - | 172 |
Purchase Price Allocation (PPA) | - | (196) | (196) | ||
Net profit (loss) from discontinued operations | (2) | (2) | |||
Net profit (Group share) | (26) | - | - | - | (26) |
Note: (1) figures not reported as such in the income statement
Note: (2) Alternative performance indicator for management reporting only
Adjustments
(1) Impact of business combinations: amortization of assets exclusively valued when determining the purchase price allocation (PPA), including corresponding tax effect;
(2) Impact of Aptis closure: reclassification of operational results as non-recurring items following Alstom’s announced and planned discontinuance of Aptis activities;
(3) Reclassification of share in net income of the equity-accounted investments when these are considered to be part of operating activities of the Group.
Total Consolidated | Adjustments | Total Adjusted | |||
(in € million) | Income statement (GAAP) | (1) | (2) | (3) | Income Statement (Management view) |
Sales | 3,518 | 3,518 | |||
Cost of sales | (2,952) | 68 | (2,884) | ||
Adjusted Gross Margin before PPA(1)(2) | 566 | - | 68 | - | 634 |
R&D expenses | (125) | (125) | |||
Selling expenses | (101) | (101) | |||
Administrative expenses | (169) | (169) | |||
Equity pick-up | - | 24 | 24 | ||
Adjusted EBIT(1)(2) | 171 | - | 68 | 24 | 263 |
Other income / (expenses) | 19 | 7 | (68) | (42) | |
Equity pick-up (reversal) | - | (24) | (24) | ||
EBIT / EBIT before PPA(2) | 190 | 7 | 197 | ||
Financial income | 1 | 1 | |||
Financial expenses | (24) | (24) | |||
Pre-tax income | 167 | 7 | - | - | 174 |
Income tax charge | (38) | (1) | (39) | ||
Share in net income of equity-accounted investments | 37 | 37 | |||
Net profit (loss) from continued operations | 166 | 7 | - | - | 173 |
Net (profit) loss attributable to non controlling interests | (5) | (5) | |||
Net profit (loss)/Adjusted Net profit (loss)(2) | 161 | 7 | 168 | ||
Purchase Price Allocation (PPA) | - | (7) | (7) | ||
Net profit (loss) from discontinued operations | 9 | 9 | |||
Net profit (Group share) | 170 | - | - | - | 170 |
Note: (1) figures not reported as such in the income statement
Note: (2) Alternative performance indicator for management reporting only
Adjustments 30
(1) Impact of business combinations: amortisation of assets exclusively valued when determining the purchase price allocation (PPA), including corresponding tax effect;
(2) Impact from Covid-19 reclassified as non- recurring items;
(3) Reclassification of share in net income of the equity-accounted investments when these are considered to be part of operating activities of the Group.
million long term Revolving Credit Facility maturing in
Attachment
- 20211110 PR H1 2021-22 final
© OMX, source