ALSTOM

Alstom confirms its annual targets and is still studying a capital increase

(Update: details of activity and prospects, departure of TMH in Russia)

PARIS (Agefi-Dow Jones) – Alstom on Wednesday revealed activity indicators that improved in the third quarter of its delayed financial year and confirmed its outlook for the current financial year. The rail equipment maker also said it had begun implementing a 2 billion euro debt reduction plan presented in November to strengthen its financial structure and maintain its investment grade rating.

In a press release, Alstom said that “asset disposal processes are progressing, allowing for the confirmation of the announced range of sales proceeds of 0.5 to 1 billion euros” and that “the overhead reduction plan has been communicated to employee representatives and should be finalized (size, cost , terms and schedule) and launched by the end of the year to reduce overhead costs by approximately 1 percentage point of turnover by March 2026”.

“Also, preparations for issuing quasi-equity and similar securities are underway, advisers have been appointed and the selection and structuring of the underlying assets has advanced considerably,” the group said, repeating the “feasibility and capital size” study. increase”.

While Alstom intends to provide more details on the measures taken to achieve its debt reduction targets at the latest when it publishes its annual results in May, the group said it sold its 20% stake in the company in early January. Transmasholding (TMH) for €75 million, “contributing to de-risking the company’s portfolio”.

This sale is not taken into account in the debt reduction plan and will result in a loss of around 127 million euros, the group stressed.

Third quarter sales rose 2.6%.

In the third quarter, which ended at the end of December, Alstom had sales of 4.3 billion euros, up 2.6% on a reported basis and 4.6% on an organic basis, i.e. volume and exchange rate.

Order intake reached 5.5 billion euros in the third quarter, compared to 5.2 billion euros in the third quarter of 2022-2023, showing an order-to-sales ratio of 1.3.

“Alstom recorded solid order intake in the third quarter thanks to the positive dynamics of the services and systems market,” CEO Henri Poupart-Lafarge said in a press release. “We are fully committed to the operational action plan aimed at generating positive cash flows in the second half of the year, particularly through improving production efficiency and working capital requirements,” he added.

In the first nine months of the 2023-2024 financial year, Alstom’s turnover reached 12.8 billion euros, an increase of 4.1%, according to published data. On an organic basis, growth reached 7.3%. Order intake fell 8.7% in published data and 7% in organic data to 13.9 billion euros. The ratio of orders to turnover is 1.1.

The order book as of December 31, 2023 was 90.3 billion euros, offering “strong visibility of future turnover,” Alstom said.

The operating margin is expected to be around 6% in 2023-2024.

Alstom confirmed its targets for organic revenue growth above 5% and an adjusted operating margin of around 6% for the financial year ending March 2024. The order-to-order turnover ratio is expected to be above 1 at all times.

Alstom also confirmed its forecast for cash flows, a closely watched indicator by the market, which should be between €500m and €750m negative over the full current financial year, which ends at the end of March 2024.

The group also confirmed its medium-term outlook. Alstom expects an adjusted operating margin of between 8% and 10% and a conversion of adjusted net profit to free cash flow of more than 80% from the 2025-2026 financial year. The group is also targeting an average annual growth of more than 5% between the financial year 2020-2021 and the financial year 2025-2026.

-Pierre-Jean Lepagnot, Agefi-Dow Jones +33 (0)1 41 27 47 95; pjlepagnot@agefi.fr ed: VLV

FINANCIAL REPORTS FROM ALSTOM

http://www.alstom.com/press-centre/fr/?taxgroup=8589951432

Agefi-Dow Jones Financial Intelligence

Dow Jones Newswires

January 24, 2024 02:55 ET (07:55 GMT)

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