(AOF) – Alstom, a global company in sustainable and smart mobility, and Northrail AG have entered into a framework agreement to supply 50 Traxx Universal multi-system locomotives, complete with full maintenance service for a period of up to up to 16 years old. The investment was arranged and structured by Northrail on behalf of RIVE Private Investment, a Paris-based real asset investment firm. Northrail will act, on behalf of RIVE, as asset manager and lessor of the locomotives.
The basic order includes 15 multi-system locomotives and 8 years of full maintenance. The maximum value of the contract is 370 million euros. Production will take place at Alstom’s site in Kassel, Germany and is expected to start in 2025.
These Traxx Universal multi-system locomotives will be the first of this type homologated in France and will be able to travel at a speed of up to 160 km/h in a European corridor comprising the following six countries: Germany, France, Belgium, Luxembourg, Austria and Poland.
Multi-system locomotives can be used for transporting goods and passengers.
All locomotives will be equipped with ATLAS, Alstom’s on-board solution for the European Train Control System (ETCS). The train control system intended to standardize and streamline cross-border traffic on a European scale allows the speeds and frequency of trains on the railways to be increased.
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Key points
– World leader in rail transport, from trams and metros to TGVs, reinforced by the acquisition, in 2021, of Bombardier Transport;
– Activities of €15.5 billion at the end of the 2021-2022 financial year carried out 62% in Europe, 17% in the Americas, 14% in Asia-Pacific and 7% in the rest of the world;
– Offer covering all railway construction trades: rolling stock for 56% of sales, signaling for 15%, systems for 7% and services (maintenance, remote control of vehicles, networks, passengers, etc.) for 22%;
– Business model based on:
– the complementarity of geographical areas between Alstom -France, Italy, Spain, India, South-East Asia, North Africa and Brazil- and Bombardier Transport -United Kingdom, Germany, Scandinavia, China and North America,
– the creation of value ranging from the design and construction of a railway system to maintenance;
– Open capital, 17.48% owned by the Caisse de dépôt et placement du Québec, Henri Poupart-Lafarge, Chief Executive Officer, chairing the 13-member Board of Directors;
– Solid balance sheet: €9 billion in shareholders’ equity and €4.6 billion in cash compared with $2.3 billion in net debt.
Challenges
– Alstom in Motion 2024/25 growth strategy with confirmed objectives:
– annual increase of +5% in revenues, operating margin of 8 to 10% and industrial investments at 2% of revenues,
– conversion of 80% of the result into free cash flow t,
– distribution to shareholders between 25 and 35%;
– Innovation strategy supported by 3.4% R&D and 9,400 patents with 3 axes:
– full range of green traction, ownership of fuel cell technology and, soon, fully connected transport fleets,
– innovation ecosystems: industrial partnerships (Engie, DeutscheBann, etc.), with start-ups via the Aster fund, with suppliers via the Alliance program, participation in 30 European programs, including Shift2Rail, and, internally, entrepreneurship with I move you,
– roll-out of the digital suite to 100% of the group;
– Environmental strategy for the decarbonization of the activity:
– integrated into the innovation strategy – eco-design of the main solutions from 2025, and aimed at strengthening natural capital – use of renewable electricity, waste recovery, recycling,
– aiming for a 10% reduction in energy intensity and a 25% reduction in CO2 emissions by 2025 (vs 2019);
– ecocircularity: waste recovered at 98%,
– launch of the 1st green guarantee facility;
– Control of portfolio rotation – disposals constrained by the merger with Bombardier and strengthening of holdings, particularly in Cylus, in Kazakhstan and in South Africa;
– Good visibility, with order intake of 15.2 billion at the end of December, of which 55% in Europe, ie more than 1 year of revenue.
Challenges
– After the loss incurred in 2021-22 due to provisions related to the acquisition of Bombardier Transportation, execution of the synergies of the merger with Bombardier -€200m in 2022/23, €400m per year in 2024/25 and 475- €500m thereafter – but positive impact on 2023 profit;
– Uncertainties on the outcome of the investigation into the February rail accident in Greece;
– Negative impact of inflation on the 2022/23 margin but almost total control of component supplies;
– After an 8% increase in revenues over the first 9 months of the financial year, confirmed outlook for 2022-23 of an operating margin of 5.1 to 5.3% and free cash flow between 100 and 300 M€.
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