Alstom’s sales increased by 5% in Q1 2017/18

During the first half of fiscal year 2017/18, Alstom’s total sales reached EUR 3,756 million, up 5% (5% organically). Signalling, systems and services represented 57% of sales in the first half of 2017/18, in line with 2020 objective of 60%. Systems sales increased by almost 60% with progress of Riyadh and Dubai metro systems. Signalling and Services sales slightly decreased due to an adverse forex impact in the United Kingdom as well as the ramp down of some projects. Rolling stock sales remained stable at EUR 1.6 billon with deliveries of regional and high-speed trains in Europe, the beginning of the Amtrak project in the USA, on-going execution of the PRASA project in South Africa and tramway deliveries in Algeria.
Alstom booked EUR 3,170 million orders. This compares to EUR 6,212 million over the same period last year which included several large projects such as the new generation of high-speed trains with Amtrak in the USA and the extension of Dubai Metro’s Red line with RTA in United Arabic Emirates.
“These six first months were marked by the good execution of our various projects as shown by solid operational results in line with our 2020 objectives. Systems sales have strongly increased, supported by the progress of Dubai and Riyadh metros projects. The construction of South Africa and India factories continues,” Henri Poupart-Lafarge, Alstom CEO said.
This semester, Alstom signed contracts in all regions, including two contracts in Canada for almost 100 LRVs, a first metro system contract in Vietnam, a metro system contract in Philippines, contracts for regional trains in Italy, Senegal and Germany, a maintenance contract in Sweden, as well as a fleet modernisation project in the USA.
At EUR 32.7 billion on 30 September 2017, current backlog provides strong visibility on future sales.
Alstom delivered an adjusted EBIT of EUR 231 million in first half of 2017/18, compared to EUR 200 million the previous year, representing a 16% increase. The adjusted EBIT margin reached 6.2%, versus 5.6% for last fiscal year. This continuous improvement was driven by volume increase and on-going initiatives for operational excellence. Net income (Group share) reached EUR 213 million.
In the same period, the Group free cash flow was positive at EUR 227 million, benefiting from impacts of the Cash Focus programme and favourable cash profile of several projects.
Alstom invested EUR 80 million in capital expenditures in first half 2017/18, compared to EUR 43 million the previous year. As end of September 2017, the cumulated transformation capex stood at EUR 100 million, out of EUR 300 million, with notably the progress in sites’ construction in South Africa and in India.
According to the company, by 2020 sales should grow organically by 5% per year. Adjusted EBIT margin should reach around 7% by 2020 driven by volume, portfolio mix and results of operational excellence actions. By 2020, Alstom expects c. 100% conversion from net income into free cash flow.
In September 2017, Siemens and Alstom signed a MoU to combine Siemens’ mobility business including its rail traction drives business with Alstom. The transaction brings together two innovative players of the railway market with unique customer value and operational potential. The two businesses are largely complementary in terms of activities and geographies. “At this stage discussions with employee representative bodies are ongoing and the deal implementation teams are operational,” Lafarge said.

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