In the first half of 2012/13, Alstom delivered according to plan

  In the first half of 2012/13, Alstom delivered according to plan

Business Wire

LEVALLOIS-PERRET, France -- November 07, 2012

Regulatory News:

Between 1 April and 30 September 2012, Alstom (Paris:ALO) booked a sound level
of orders at €12.1 billion, up 19% compared to the first half of last year,
driven in particular by a strong semester for Transport. Over the same period,
sales were up 4%, amounting to €9.7 billion. Income from operations increased
to €703 million, leading to a 7.2% margin or a 50 basis point improvement. The
net result stood at €403 million and the free cash flow turned positive at
€101 million.

Key figures                                       
                        30 September   30 September   % Var. Sept 12 /
                                                   
(in € million)           2011           2012           Sept 11
Actual figures                                      
Orders received          10,183         12,129         +19%
Backlog                  47,382         52,015         +10%
Sales                    9,389          9,748          +4%
Income from operations   627            703            +12%
Operating margin         6.7%           7.2%           -
Net income               363            403            +11%
Free cash flow          (914)         101           -

“In a still challenging economic environment, the Group achieved a sound
commercial performance during the first half of 2012/13 with orders up 19%,
leading to a book-to-bill above 1 for the fourth consecutive semester.
Recovery of sales combined with strict cost control and good execution of
contracts enabled the operating margin to improve to 7.2%. Free cash flow
turned positive at €101 million. Thanks to these good results, we are on track
with our three-year guidance: sales should grow over 5% per year for this
fiscal year and the two following ones, the operating margin should gradually
improve to around 8% in March 2015 and the free cash flow should be positive
in each of the three fiscal years”, said Patrick Kron, Alstom’s Chairman &
Chief Executive Officer.

A challenging world

During the first six months of 2012/13, the macro-economic conditions have
remained challenging with a sluggish economic environment in mature countries
and a slower growth in some emerging countries.

In power generation, demand in coal technologies remains stable, coming mainly
from Asia while gas progressively increases its share despite the absence of
recovery in mature countries. Thermal services and environmental control
systems continue to show good dynamism. As for renewable, hydro market is
temporary affected by a lack of major projects. Onshore wind remains under
significant price pressure, while offshore wind shows favourable prospects.

The power transmission market still presents a mixed outlook with overcapacity
in transformers and a good momentum in high-end segments (power electronics,
smart grids).

Finally, demand for rail transport continues to be sound, supported by urban
needs in Europe and expansion in developing countries.

Sound level of orders

Orders booked over the first half of 2012/13 amounted to €12.1 billion, a 19%
increase from the same period last year, driven by the very strong commercial
performance of Transport. On 30 September 2012, the Group’s backlog amounted
to €52 billion, representing 31 months of sales.

During the semester, Thermal Power booked 5 gas turbines (2 in Israel, 2 in
the UK and 1 in China) as well as several equipment orders for both coal and
nuclear, and continued to benefit from a strong activity in environmental
control systems and in thermal services.

Renewable Power recorded a sound performance in the wind business (notably in
Brazil) but only small and medium-sized hydropower projects.

Grid recorded a high level of orders with €2.2 billion of contracts including
a strategic 800 kV ultra high voltage direct current (UHVDC) contract in
India.

Transport registered its best commercial semester since 2008. Commercial
activity remained sustained in Western Europe with, in particular, a
signalling system in Amsterdam, regional trains in Germany and Sweden,
high-speed trains in Switzerland as well as suburban trains and metros in
France. In emerging countries, Alstom booked two metro contracts in Latin
America.

Operational performance improving

Sales in the first half of 2012/13 amounted to €9.7 billion, compared to €9.4
billion for the first half of 2011/12, representing a 4% increase, with
Thermal Power and Transport up, respectively 5% and 13%. Renewable Power’s
revenues decreased by 17% due to much lower revenues during this period for
large hydro contracts in execution in Latin America. Grid’s sales remained
stable.

Supported by improved sales, sound project execution and strict cost control,
the income from operations increased to €703million, up 12% compared to the
same period last year, whilst the operating margin went up 50 basis points to
7.2% for the first half of 2012/13. The operating margin in Thermal Power
moved from 9.2% to 10.6%, benefiting mainly from good project execution,
actions on costs and sales ramp-up. Renewable Power’s margin decreased from
7.3% to 5.7% , affected by lower volumes as well as price erosion in wind.
Grid’s operating margin increased from 5.8% in the first half of last year to
6.1% as a result of overall good execution of projects together with cost
optimisation. In Transport the operating margin increased from 5.0% to 5.3%,
thanks to the recovery of sales.

Net profit amounted to €403 million compared with €363 million in the first
half of 2011/12, up 11%. This figure included a contribution of €34 million
from Transmashholding compared with €15 million for the same period last year.

Positive free cash flow and sound financial structure

Free cash flow turned positive at €101 million during the first half of
2012/13, showing a marked improvement compared to the same period last year
when it was negative at €(914) million.

Following the payment of the dividend, the Group’s net financial debt reached
€(2,871) million at 30 September 2012 versus €(2,492) million at 31 March 2012
and €(2,748) million at 30 September 2011.

Equity was stable over the period, standing at €4,449 million at 30 September
2012 from €4,434 million at 31 March 2012.

With a gross cash in hands of €1.6 billion at the end of September 2012, an
undrawn credit line of €1.35 billion and a schedule of gradual repayment of
the debt starting in September 2014, the balance sheet remains strong.

On 1 October 2012, the Group launched a €350 million share capital increase
through an accelerated book building. On 4 October 2012, Alstom launched a new
bond issuance of €350 million. It will bear an annual coupon of 2.25% and
mature in October 2017. These two financing transactions contributed to
maintaining the sound financial structure of the Group.

Consolidating position in key technologies and regions

During the first half of 2012/13, Alstom pursued its policy of partnerships
and selective acquisitions and continued to invest in research & development
and capital expenditures to reinforce its presence in dynamic markets.

To strengthen its portfolio of marine products and technologies, Renewable
Power signed an agreement with Rolls-Royce in September 2012 to acquire its
wholly-owned subsidiary Tidal Generation Ltd (TGL). TGL is at the forefront of
the design, development and manufacture of tidal stream turbines which capture
and convert the energy of tidal streams to generate electrical power.

In September 2012, Grid signed a memorandum of understanding with Toshiba
Corporation to develop cooperation on smart grid, more specifically on systems
supporting wide-scale integration of renewable energy sources into the grid.

Alstom increased its research and development expenses to €351 million during
the first semester, with a continuing focus on gas turbines, new renewable
energies, smart grid and energy management as well as transport technologies
adapted to urban needs.

At €186 million, capital expenditures remained at a high level, the four
Sectors pursuing their investments, particularly in emerging markets.

Three-year guidance reiterated

The Group confirms its guidance of a sales growth of over 5% per year for this
fiscal year and the two following ones and a gradual improvement of the
operating margin which should be at around 8% in March 2015. It also confirms
that the free cash flow should be positive in each of the three fiscal years.

The half-year financial report can be found on Alstom’s website at
www.alstom.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 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.

Contact:

Press:
Christine Rahard, Isabelle Tourancheau
Tel +33 1 41 49 32 95 /39 95
christine.rahard@chq.alstom.com, isabelle.tourancheau@chq.alstom.com
Investor Relations:
Delphine Brault
Tel +33 1 41 49 26 42
delphine.brault@chq.alstom.com
Website:
www.alstom.com
 
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