Alstom: "unprecedented" order book, group tackles its debt

Alstom: “unprecedented” order book, group tackles its debt

An order book that will allow you to deal with debt. This is what Alstom highlighted this Wednesday, January 24, by unveiling a turnover of 4.3 billion euros in the third quarter of its staggered financial year. That’s up 2.6% from a year earlier, allowing it to continue its cost-cutting plan to clean up its balance sheet, according to its profit and loss statements released on Wednesday. “We are fully committed to the operational action plan” to reduce the group’s debt, indicated its CEO Henri Poupart-Lafarge, quoted in the results press release. The details of that plan will be known in May 2024, he said, before the close of the annual accounts.

As a reminder, it provides sale of assets for 500 million to 1 billion euros, the elimination of 1,500 administrative jobs worldwide and a possible capital increase to reduce debt by 2 billion euros. Order intake in the third quarter, completed at the end of December, improved after a disastrous first half in this regard, with orders received at 5.5 billion euros, up 5.8% on last year. In the first nine months of the financial year, they remained 8.7% lower than in the previous year.

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Alstom aims to grow above 5%

The ratio of orders to turnover thus increased to 1.3 this quarter compared to 1 in the first half, confirming forecasts from Alstom, which in November predicted a recovery in the second half. Orders for services – ie train maintenance – and signaling and systems accounted for 84% of the total this quarter. Alstom also continued its rollout, although it is often criticized for delays in some contracts and cost penalties. The rail manufacturer produced 3,415 cars in the first nine months of the financial year, compared with 2,998 in the same period in 2022-23.

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It also confirmed its short-term targets, notably free cash flow, which is still negative during the financial year, but reduced to -750 to -500 million euros, compared to -1.1 billion in the first half. Is the organic growth of turnover expected “above 5%”. medium term, “Alstom is aiming for an average annual turnover growth rate of more than 5%” between the financial years 2021-2022 and 2025-2026, details in the press release. To achieve this, the company relies on the order book “unparalleled” to 90.3 billion euros as of 31 “guarantees a turnover of around 38 to 40 billion euros in the next three years”.

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