Alstoms first half of 2013/14
FCF impacted by project profiles and downpayments
- Ambitious cost saving programme accelerated
- Strategic mobility to be enhanced through asset sales
- Guidance maintained
Between 1 April and 30 September 2013, Alstom booked 9.4 billion of orders, down 22% compared to the first half of last year. The book-to-bill ratio, close to 1, benefited from a good flow of small to medium-sized orders despite a less active market for big contracts. Over the same period, sales were up 4% organically, amounting to 9.7 billion, thanks to the ramp-up achieved in the second quarter. Income from operations and the operating margin were stable at around 700 million and 7.1% respectively. The net profit stood at 375 million whilst the free cash flow at (511) million was mainly affected by the unfavourable cash profile of some contracts being executed during the period and by limited downpayments due to the level and mix of orders received.
In markets that remain contrasted, our commercial activity in the first half was supported by a good flow of small and medium-sized orders, but lacked large contracts, notably in Thermal Power. As expected, sales recovered in the second quarter leading to a 4% organic growth in the first half. With strict cost control and good execution of contracts, the operating margin remained stable. Tendering is active and we expect stronger order bookings by the end of the year, which will support free cash-flow rebound in the second half. Looking forward, we maintain the guidance given at the close of FY 2012/13. In the current low-growth environment, we need to further reinforce our competitiveness; we are accelerating our performance plan and expect annual cost savings ramping up to 1.5 billion by April 2016. We want to regain strategic mobility and have launched an asset disposal programme targeting 1 to 2 billion of proceeds through the contemplated sale of a minority stake in Alstom Transport and the disposal of non-strategic assets, said Patrick Kron, Alstoms Chairman & Chief Executive Officer.
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