Record high orders and improving profitability in Alstoms first half of 2014/15, Key milestones achieved in the project with General Electric
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In the context of the project between Alstom and General Electric, and in compliance with IFRS 5, 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 and 30 September 2014, Alstom booked a record 6.4 billion of orders, more than twice the level of last years first-half. The book-to-bill ratio, at 2.1, was notably boosted by a 4 billion contract in South Africa. Over the same period, sales were up 13% organically, amounting to 3.1 billion. The operating margin (after corporate costs) improved by 30 bps thanks to the increase in sales, the progressive implementation of the d2e performance plan and despite ramp-up costs of new platforms.
Group net profit (continued and discontinued) reached 255 million and free cash flow at (1,376) million was mainly affected by negative working capital change.
The project between Alstom and General Electric is moving ahead, with works council consultations completed, the sale contract and other agreements signed as well as the French Foreign Investment authorisation obtained. Alstoms General Meeting, where the approval of the transaction will be submitted to the shareholders vote, is to be convened on 19 December 2014.
The project with General Electric is progressing well. Following the completion of the information-consultation with works councils we have signed the final agreements with General Electric. The French Foreign Investment authorisation has also been granted. Alstoms Board of Directors has consequently decided to call for a shareholders meeting on 19th December to vote on the transaction. Should the shareholders approve it, General Electrics offer would still be subject to authorisations from regulatory and competition bodies in a number of jurisdictions. After completion of this transaction, the Group will focus on its Transport business with positive perspectives for sales growth and operating profit improvement. Alstom would rely on a strong balance sheet, as a large part of the proceeds from General Electric will be used to reinforce the Group and support its development. We will communicate on the targeted balance sheet structure, including the amount of cash to be returned to shareholders with the publication of the Board of Directors report in view of the General Meeting. Concerning the first half of the year, Alstom registered a record high level of orders thanks to a number of large projects, including a jumbo contract in South Africa for around 4 billon. Sales grew a strong 13% organically and the operating margin improved by 30 bps, said Patrick Kron, Alstoms Chairman & Chief Executive Officer.
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