Alstom wins maintenance contract with VR in Sweden – 2023-01-16 at 18:04


(AOF) – Alstom, a specialist in smart and sustainable mobility, has won a new contract with VR Sweden for the maintenance of 30 regional trains in Sweden. Alstom will provide VR Sweden, the new train operator, with the maintenance of the Tåg i Bergslagen fleet, which connects the four counties of Bergslag. Through this contract, worth nearly one billion Swedish crowns, Alstom will maintain the fleet for 10 years, with a one-year option. The new contract will take effect on December 10, 2023.

Alstom is the largest supplier to the Swedish rail market, having delivered over 1,000 trains to Swedish Railways.

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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,

– 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, intrapreneurship 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 10.1 billion at the end of September, 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;

– Negative impact of inflation on the 2022/23 margin (80 basis points at the end of September) but low exposure to the shortage of electronic components;

– After an 8.1% increase in revenues and an 18.5% increase in operating margin in the first half ended September 30, 2022-23 outlook raised from an operating margin of 5.1 to 5, 3% and free cash flow between €100 and €300 million;

– After a dividend of €0.25 for 2021-2022, a desire for a distribution of between 25 and 35%.

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