FY 2012/13 Alstom Achieves a Solid Commercial and Operational Performance and Free Cash Flow Turns Positive

  FY 2012/13 Alstom Achieves a Solid Commercial and Operational Performance
  and Free Cash Flow Turns Positive

Business Wire

LEVALLOIS-PERRET, France -- May 7, 2013

Regulatory News :

Between 1 April 2012 and 31 March 2013, Alstom (Paris:ALO) booked €23.8
billion of orders, up 10% compared to last year. As announced, the group
achieved a strong level of orders in the fourth quarter at €6.6 billion,
leading to a book-to-bill above 1 for the 10^th consecutive quarter. Sales, at
€20.3 billion, showed a 2% growth compared to last year. Income from
operations amounted to €1,463 million, reaching a 7.2% operating margin, up
10bp compared to the same period last year. The net result increased by 10%
from €732 million in 2011/12 to €802 million. The free cash flow turned
positive to €408 million in fiscal year 2012/13.

At its next Annual General Meeting, Alstom will propose a dividend of €0.84
per share, a 5% increase compared to last year.

Key figures

(in € million)          31 March 2012  31 March 2013  % Var. March 13/March
                                                         12
Actual figures                                        
Orders received          21,706          23,770          +10%
Backlog                  49,269          52,875          +7%
Sales                    19,934          20,269          +2%
Income from operations   1,406           1,463           +4%
Operating margin         7.1%            7.2%            -
Net income               732             802             +10%
Free cash flow          (573)          408            -

“In 2012/13, the Group delivered a solid commercial performance, illustrated
by a book-to-bill ratio above 1 for every quarter of the fiscal year. Sales
were up despite lower milestones recognition in Renewable and clients slowing
down some projects in Grid. The operating margin has improved compared to the
last fiscal year, thanks notably to sound contract execution and cost
optimisation. Free cash flow has clearly turned positive after two years of
negative figures. Our long-term prospects remain solid, driven by attractive
fundamentals for all our end-markets. However, our short-term performance is
expected to be impacted by lower volumes than anticipated due to a more
challenging environment. In this context, we now expect sales to grow
organically at a low single digit, operating margin to stay stable in 2013/14
and then gradually increase over the next two to three years to around 8%.
Cash generation remains a top priority and we continue to anticipate a
positive free cash flow year after year over this period”, said Patrick Kron,
Alstom’s Chairman and Chief Executive Officer.

A solid commercial performance

During fiscal year 2012/13, Alstom registered €23.8 billion of orders, up 10%
compared to last year. Commercial activity remained robust in emerging
countries which accounted for nearly half of total orders. Transport was
particularly successful in Europe. On 31 March 2013, the backlog amounted to
€53billion, up 7% and representing 31 months of sales.

Thermal Power won major contracts across its businesses. In particular, it
booked 12 gas turbines in China, UK, Jordan, Israel and Thailand where it sold
its first two upgraded GT26 gas turbines. The group nearly doubled its GW
share compared to the level booked in 2011/12, increasing from 2.8 GW to 5 GW,
thanks to the higher number of GT26 sold. The group was also active in steam
with several turbine islands sold in Saudi Arabia (Heavy Fuel Oil), India and
in Egypt. Thermal Power benefited from a strong activity in environmental
control systems as well as in retrofit and service.

Renewable Power was particularly active in Wind in 2012/13, notably in Brazil.
Three key contracts were signed in Hydro in Ethiopia, Columbia and Brazil,
allowing the Sector to maintain a strong market share.

Over the period, Grid booked a record level of order intake with two major
High Voltage Direct Current projects in India (800 kV) and Germany (Offshore)
as well as the usual flow of small and medium orders worldwide.

Transport achieved its strongest commercial year since 2009/10. Successes were
registered in Western Europe with notably regional trains in Germany, Italy
and Sweden, high-speed trains in Switzerland, suburban trains and metros in
France as well as a signalling system in the Netherlands. Outside Europe, the
group also signed key contracts including metros in Brazil, light-rail
vehicles in Canada and a maintenance contract in Kazakhstan.

A gradual recovery of sales and operating income

In 2012/13, the Group’s sales stood at €20.3 billion, up 2% compared to last
year. This increase was driven by Thermal Power (up 5%) and Transport (up 6%),
both of which recovered from last year’s trough. Sales in Renewable Power were
down 11%, impacted, in the first half, by much lower revenues for large hydro
contracts in execution in Latin America. Grid’s revenues decreased by 5% with
customers slowing down some projects, notably in India.

In fiscal year 2012/13, income from operations amounted to €1,463 million,
versus €1,406million in the previous year. The Group’s operating margin
improved by 10bp to 7.2%. The operating margin in Thermal Power progressed
further from 9.7% in 2011/12 to 10.4%, benefiting from higher volumes and
actions on costs. Renewable Power’s operating margin reached a low point at
4.9%, from 7.4% in 2011/12, affected by a low level of sales, price erosion in
wind and a negative impact of the first Brazilian wind contracts. The
operating margin in Grid remained stable at 6.2%, thanks to sound execution
and cost optimisation despite lower volumes and trading of some orders with
low margins. Transport’s operating margin continued to recover at 5.4% thanks
to volume increase and efforts on costs.

Net profit amounted to €802 million, up 10% compared to last year. This figure
included €137 million of restructuring costs, mainly on Grid and Renewable
Power, as well as a positive contribution from Transmashholding (€68 million
compared to €32 million in 2011/12).

Free cash flow turnaround confirmed

The free cash flow turned positive at €408 million in fiscal year 2012/13
supported by efficient working capital management and despite the low level of
EPC contracts impacting customers’ advance payments. Compared to last year,
free cash flow generation improved by almost a billion euros.

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, bearing an annual coupon of 2.25% and maturing
in October 2017.

Equity increased over the period, standing at €5,104 million at 31 March 2013
from €4,434 million at 31 March 2012, after taking into account the capital
increase, pension adjustments and the payment of the dividend.

At 31 March 2013, net debt stood at €2,342 million compared to €2,492 million
at 31March 2012. This reduction mainly resulted from the capital increase and
the positive free cash flow partly offset by the payment of the dividend for
2011/12 and some financial investments.

With a gross cash in hands of €2.2 billion at the end of March 2013, an
undrawn credit line of €1.35 billion as well as a schedule of gradual
repayment of the debt starting in September 2014, the Group’s balance sheet
remains strong.

Increased dividend per share proposed to the next AGM

The Board of Directors has decided to propose a dividend of €0.84 per share at
the next Annual General Meeting to be held on 2 July 2013, up 5% compared to
last year. It corresponds to a stable pay-out ratio of 32%. If approved, the
dividend will be distributed on 9 July 2013.

Sustained Research & Development and Capital Expenditures for future growth

During the fiscal year 2012/13, Alstom continued to invest in research &
development (R&D) and capital expenditures (capex) to reinforce its presence
in dynamic markets and pursued its policy of partnerships and selective
acquisitions.

R&D expenses increased to €737million in fiscal year 2012/13. Among a number
of substantial developments, Thermal Power continued its focus on gas turbines
aiming at offering higher output, better efficiency and increased flexibility.
Renewable Power installed its first 1 MW Tidal turbine prototype in Scotland.
Grid developed the world’s fastest HVDC circuit breaker. Lastly, Transport
launched its light rail vehicle for the North American market (Citadis
Spirit).

At €505 million, capex remained at a sustained level, the four Sectors
pursuing their investments to develop their capacities, particularly in
emerging markets, and to modernise their industrial footprint.

Renewable Power acquired the wholly-owned subsidiary of Rolls-Royce, Tidal
Generation Ltd (TGL), strengthening its portfolio of marine products and
technologies. 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.
Alstom invested an additional US$40 million in the American company
BrightSource Energy Inc. to reinforce its partnership with this pioneering
solar power company, a leader in the concentrated solar thermal tower
technology. Since its initial investment in 2010, Alstom has progressively
increased its participation and now holds above 20% of the capital.
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.

Updated guidance

The markets on which the Group operates show unchanged solid long-term
prospects, driven by attractive fundamentals for all end-markets and Alstom
confirms its strategic targets based on profitable growth and operational
excellence. However, over the last twelve months, economic conditions have
further deteriorated whilst the competitive environment has remained
challenging. These two headwinds should impact the future short-term
performance, mitigated by action on costs through operational efficiency and
footprint optimisation. In this context, sales are expected to grow at a low
single digit on an organic basis, operating margin to stay stable in 2013/14
and then gradually increase to around 8% over the next two to three years.
Cash generation remains a key focus and free cash flow should be positive year
after year over this period.

                                      *

The management report and the consolidated financial statements, as approved
by the Board of Directors, in its meeting held on 6 May 2013, are available on
Alstom’s website at www.alstom.com. The accounts have been audited and
certified.

In accordance with AFEP-MEDEF recommendations, information related to the
remuneration of Alstom‘s Executive Officer is available on Alstom’s website:
www.alstom.com, under About/Corporate Governance/Remuneration of the Executive
Officer.

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:

Alstom
Press Contacts
Emmanuelle Châtelain, Isabelle Tourancheau - Tel +33 1 41 49 37 38 /39 95
emmanuelle.chatelain@chq.alstom.com, isabelle.tourancheau@chq.alstom.com
or
Investor Relations
Delphine Brault, Anouch Mkhitarian - Tel +33 1 41 49 26 42 / 25 13
delphine.brault@chq.alstom.com , anouch.mkhitarian@chq.alstom.com
or
Website www.alstom.com
 
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