Alstom has released its financial statement for the year 2019/2020, included in which is a progress report on its planned takeover of Bombardier Transportation.
Order intake, at €9,900 million, was down on the previous year (€12,107 million). However, it still exceeded sales (€8,201 million, marginally up on 2018/19’s €8,072 million), so the order backlog grew slightly to €40,903 million.
Earnings before interest and taxes were €630 million – a margin of 7.7 per cent.
Sales will have been slightly affected by the Coronavirus (COVID-19) outbreak, but only in the last few weeks of the financial year. The estimate is that the company lost around €100 million of output.
Due to the current crisis, the board decided not to recommend a dividend to shareholders this year, though it was at pains to point out that this was due to the uncertainty of the crisis and not to a lack of liquidity. The financial statement included the comment: “While a partial restart of production is on-going as of 12 May, the group cannot predict the shape and timing of a recovery during 2020/21 as it depends on the further development of the COVID-19 crisis, the duration of containment measures and the intensity of the economic downturn and market response.
“After the current crisis, the group expects a fast recovery of the rail market, sustained by strong fundamentals and the increasing demand for sustainable mobility.”
Bombardier acquisition
The statement also included information on the Bombardier takeover and an indicative timetable. Alstom announced on 17 February 2020 that it had signed a memorandum of understanding with Bombardier Inc. and Caisse de dépôt et placement du Québec (CDPQ) regarding the acquisition of Bombardier Transportation. (CDPQ purchased 30 per cent of Bombardier Transportation (Investment) UK Ltd in 2015.)
The statement continued: “Alstom’s unions indicated they will render their opinion around summer 2020 on the proposed takeover of Bombardier Transportation, according to the ‘method agreement’ reached with management.
“An EGM (extraordinary general meeting) vote on the reserved capital increases to CDPQ and Bombardier Inc. and the rights issue should take place no later than 31 October 2020. Subject to the EGM approval, rights issue will take place between the second semester 2020 and first semester 2021, subject to market conditions, and the reserved capital increases will take place at closing.
“The syndication of €2.4 billion of bridge facilities and a new €1.5 billion revolving credit facility related to the proposed acquisition of Bombardier was completed in April 2020 as planned. The transaction will also be subject to clearance from relevant regulatory authorities and anti-trust authorities. Closing is expected in the first half of 2021.”
Chairman’s comment
Alstom’s chairman and chief executive officer Henri Poupart-Lafarge commented on the financial statement: “This fiscal year was the first of our new strategy Alstom in Motion, which was launched last June and is now being deployed throughout the group. Although considered a stabilisation year, Alstom enjoyed strong commercial momentum in a very dynamic railway market. We won major orders especially in Europe and in Asia-Pacific.
“In addition, we secured pioneering orders for our green mobility solutions, illustrating the potential of such technologies and the dynamism of the shift to carbon free transportation modes. The continuous improvement in our operational performance demonstrates the group’s focus on profitable growth.
“The end of the fiscal year was marked by the unprecedented Covid-19 crisis. Alstom considers the health and safety of its employees and stakeholders as its top priority during this period. We are confident for the resilience of Alstom’s business in the mid-term, given the fundamentals of the rail market and, in particular, the need for greener mobility.”
In line with AiM efficiency strategy, Alstom moved forward during this year in its business process digitization roadmap with 80% of the group turnover being covered by a group core model SAP solution. The Covid-19 containment measures also showed the digital agility and resiliency of the Group: within a few days, thousands of engineers were able to access very demanding software solutions from home ensuring quasi-complete continuity of engineering.