Alstom and the EUR10 billion order book
French multinational firm Alstom, specialists in rail transport and electricity generation, has revealed in booked a record €10 billion worth of orders in the year up to 31 March 2015.
In the shadow of a potential €12.4 billion takeover deal by General Electric for Alstom’s power equipment business, the company has said Thermal Power, Renewable Power and Grid activities, as well as some corporate costs have been classified as Discontinued Operations; they are therefore not included in orders, sales, income from operations and are reported under the “net income – discontinued operations” line.
Between 1 April 2014 and 31 March 2015, Alstom booked a record €10 billion of orders meaning an increase of more than 60 percent as compared to last year. The book-to-bill ratio at 1.6, was above 1 for the fifth year in a row and was notably boosted by a €4 billion contract in South Africa. Sales at €6.2 billion, were up 8 percent over last year and income from operations amounted to €318 million, up 19 percent.
The operating margin (after corporate costs) improved by 50bps to 5.2 percent thanks to the increase in sales, the sound execution of projects, the implementation of the d2e (dedicated to excellence) performance plan and despite ramp-up costs of new platforms.
Group net income (continued and discontinued) was at €719 million, affected by a number of exceptional items, in particular the agreement with the US Department of Justice and some asset write-offs in Russia. As expected, free cash flow from continued operations (before tax and financial cash-out) was positive for the full year and Group free cash flow was substantially positive over the second half of the year and offset a large part of the cash outflow of the first half, with a full year figure of €429 million. The backlog amounted to €28 billion, corresponding to 55 months of sales.
Patrick Kron, Alstom’s Chairman and Chief Executive Officer, said: “Alstom delivered a very strong commercial performance in its Transport activity during the fiscal year, booking a record level of orders. As expected, Group free cash flow was substantially positive in the second half and free cash flow from continued operations, before tax and financial cash-out, was positive over the full year.
“The project with General Electric is moving ahead; we have already obtained anti-trust and regulatory authorisations in a number of countries and are actively working to complete this process and, thus, allow a closing in the coming months. After closing, we plan to call a Shareholders’ Meeting to vote on the amount of cash proceeds to be distributed to shareholders”
Alstom’s sales increased organically by 7 percent to reach €6.2 billion thanks mainly to deliveries of suburban, intercity and very high speed trains in France, Italy and Germany as well as very high speed trains in Morocco and tramways in Dubai. Emerging countries represented 30 percent of sales, pointing to an area of optimism for potential future growth markets for the organisation.
For the full Alstom financial report, please visit: http://www.alstom.com/Global/Group/Resources/Documents/Investors document/Financial results/2014-15/2015-05-06 FY 2014-15 PR.pdf
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