Electrical Products Group Patrick Kron, Chairman & CEO 21-22 May 2012
Agenda 1. Key figures of 2011/12 2. Preparing future performance 3. Profitable growth strategy 4. Positive three-year guidance 5. Appendices P 2
Alstom today A balanced portfolio of systems, products and services with leading positions THERMAL POWER RENEWABLE POWER Sales by Sector FY 2011/12 Gas 10% Thermal Service Steam 35% 50% Nuclear 5% GRID TRANSPORT Power electronics Services and Automation 15% 20% Thermal Power Grid Renewable Power Transport P 3
Key figures 2011/12 A resilient performance impacted by low past orders In € million March 2011* March 2012 Variation Orders 19,054 21,706 +14% Book-to-bill ratio 0.91 1.09 Backlog 46,816 49,269 +5% Sales 20,923 19,934 -5% Income from operations 1,570 1,406 -10% Operating margin 7.5% 7.1% Net income 462 732 +58% Free cash flow (516) (573) P 4 * With Grid consolidated for 10 months (from June 2010 to March 2011)
Key figures 2011/12 Results strictly in line with guidance WHAT DID WE SAY? WHAT DID WE DO? Orders to remain sustained FY 2010/11: €19.1 Bn => FY 2011/12: €21.7 Bn • • in 2011/12, with a strong Q4 9 months 2011/12: €15.1 Bn => Q4 2011/12: €6.6 Bn • Progressive recovery of • Q1 2011/12: €4.5 Bn => Q4 2011/12: €5.7 Bn • sales with a marked improvement in Q4 H1 2011/12: 6.7% • Operating margin to be • => FY 2011/12: 7.1% between 7% and 8%, with H2 2011/12: 7.4% • an increase in H2 vs H1 H1 2011/12: €(914)m • Positive FCF in H2 => FY 2011/12: €(573)m • H2 2011/12: +€341m • P 5
Agenda 1. Key figures of 2011/12 2. Preparing future performance 3. Profitable growth strategy 4. Positive three-year guidance 5. Appendices P 6
Orders A solid commercial activity over the last 18 months to be translated into sales growth Orders received per half year In € billion Book-to-bill ratio • consistently above 1 for 3 consecutive semesters Book-to-bill ratio at 1 or • Book above in all Sectors in -to- FY 2011/12 Bill = 1 Strong performance in • emerging markets H1 H2 H1 H2 H1 H2 (*) 2009/10 2010/11 2011/12 Developed countries Emerging countries P 7 * With Grid consolidated from June 2010
Research & Development R&D expenses kept at a high level Key products launched in 2011/12 THERMAL POWER RENEWABLE POWER Evolution of R&D expenses In € million Haliade 150 Gas turbines (6MW) 703 upgrades 682 First success in (GT26, GT24 offshore wind and GT13) tender GRID TRANSPORT New HVDC AGV.italo technology Single deck (Voltage Source 2010/11 2011/12 very high Converter ) speed train developed in operation and sold P 8
Capital expenditures Positions in emerging markets reinforced through capex… Evolution of capex in emerging countries 224 167 Tianjin - China 110 Porto Alegre - Brazil Chennai - India Mundra - India Bahia - Brazil P 9
Partnerships …and through joint-ventures JV with Atomenergomash New partnerships in Russia JVs with Transmasholding INTER RAOUES RENOVA Rostechnologies New partnerships in China Global partnership KER with SEC in boilers* JV with Bardella New partnerships in Kazakhstan * To be finalised 5 JV Transport + partnerships for EMUs and locomotives 3 JV Power + partnership in nuclear 9 JV Grid Footprint Grid New partnership in India Power Transport & JV with Bharat Forge Existing partnerships Cooperation agreement with BHEL JV with NTPC in Service Recent partnerships Grid n°1 in India P 10
Restructuring Footprint in mature markets adapted to lower demand 92,600 employees (31 March 2012) TARGET SITUATION - 1,700 31/03/2012 THERMAL POWER 56,000 Plan largely 3,500 permanent by March 2012 (-20% of employees completed in Western Europe and NAM) 2010/11 2011/12 + 900 TRANSPORT 36,600 1,380 positions by March 2013 Over 50% (-8% of employees 2010/11 2011/12 in Western Europe) Mature countries Emerging countries P 11
Agenda 1. Key figures of 2011/12 2. Preparing future performance 3. Profitable growth strategy 4. Positive three-year guidance 5. Appendices P 12
Market environment A sound growth potential THERMAL POWER RENEWABLE POWER GRID TRANSPORT EMERGING MARKETS New equipment growth After Asian boom of the past Strong push for all Continuous active markets concentrated in BRICs and 5 years, market stabilising renewables in all products Asia at a high level and covering all technologies MATURE MARKETS High-tech segments (HVDC Traditional markets remaining Europe and NAM remaining Europe and NAM demand and SmartGrid) driving stable, with Northern Europe robust thanks to offshore driven by gas, retrofit and growth in Europe and NAM being more dynamic than wind and hydro retrofit service Southern Europe P 13
Strategy An ambition combining growth and performance… GROWTH Enlarge offering through better coverage and development in high growth segments Progressively Sustain Extend geographical Develop Service increase R&D CAPEX to fuel coverage in emerging business across all to remain a growth in markets Sectors leader in all emerging key markets technologies Expand in current and adjacent markets through partnerships or targeted acquisitions OPERATIONAL EXCELLENCE Cost competitiveness Cash focus People Project execution & Quality (actions on working (ind. efficiency, supply chain management, (safety, development in emerging countries) (training, processes) capital) capacity adjustments, control of S&A) P 14
Strategy …with clear objectives for each Sector THERMAL POWER Increase sales and margin by better market coverage RENEWABLE POWER TRANSPORT Grow selectively and Resume volume address temporary growth and restore margin pressure profitability GRID Develop positions while improving mix and competitiveness P 15
Thermal Power action plan GAS STEAM NUCLEAR THERMAL SERVICE Address growing areas: Leverage JVs in BRICs Bundle with new Leverage JVs in Asia to • • • • (Atomenergomash, 60 Hz (Chattanooga + better serve the region equipment sales and new GT24), Russia Dongfang and BHEL) target existing potential and lower the cost base (recent success with and best in class on own fleet Build on heavy fuel oil • technology GT13), MEA, South East market in MEA Selectively address other • Asia, China Address opportunities fleets • Remain the leader in ECS • related to new safety Grow components sales • Develop “Integrated • Be selective on turnkey regulations (retrofit, • Increase market coverage Solutions” projects • plants EDG) through R&D and partnerships Objective: sell more than Increase geographical Maintain leadership Pursue strong profitable 20 turbines per year reach and improve position growth profitability P 16
Renewable Power action plan HYDRO ONSHORE WIND OFFSHORE WIND NEW ENERGIES Grow in new promising Develop Concentrated Expand sales territory Market the Haliade 150, • • • • Solar Power through regions (Russia) a 6MW direct drive Pursue R&D on ECO • Brightsource partnership turbine beyond success Leverage technology 100/110/122 platforms • in French tender (variable speed pump Strenghten positions in • Develop Operation & • biomass and geothermal storage…) Establish industrial • Maintenance contracts through R&D footprint Develop retrofit & • Develop ocean energies services • solutions (wave & tidal) Remain the worldwide Improve onshore performance Grow in nascent leader and successfully enter offshore technologies P 17
Grid action plan PRODUCTS & SYSTEMS SERVICES HVDC / FACTS SMART GRID Renew offering through • Maximise potential Continue innovation in Leverage global • • • product introduction (GIS, on installed base power electronics leadership in network Circuit breakers, etc.) management systems Focus on value- Capitalise on HVDC • • Establish strong foothold in (demand response, etc.) • added offering and commercial successes (in higher DC transformer O&M both LCC and VSC) to Strenghten automation • voltages (800 kV and up) establish strong execution business Boost local • Foster differentiation credentials • presence by Push innovative • through innovation (digital, capitalising on Increase coverage for converter technology for • SF6 free) and quality Thermal Service industrial applications storage applications Leverage low cost network • Expand through • manufacturing base partnerships and M&A Improve Grow Be a recognised Build on competitive position aggressively market leader network expertise P 18
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