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An unsurprising soft Q3 order intake
17 Jan 17
Alstom booked €1bn of orders in Q3 16/17 (versus €2.35bn in Q3 15/16) following very strong activity in Q2 (€5.3bn). For the first nine months of 2016/17, Alstom’s order intake reached €7.2bn, up 16% compared to €6.3bn over the same period last year. The group’s sales amounted to €5.2bn, up 6% yoy. The book-to-bill remained strong at 1.4x. Sales increased to €1.7bn, up 3% yoy, of which 2% organically. The company also announced a €190m metro system contract in Vietnam. Objectives for 2020 confirmed: By 2020, sales should grow organically by 5% per year. Adjusted EBIT margin should reach around 7% by 2020 driven by volume, portfolio mix and the results of operational excellence actions. By 2020, Alstom expects c. 100% conversion from net income into free cash flow.
Impressive set of results in H1 16
09 Nov 16
Alstom reported strong figures in H1 16 which were above market expectations. Main facts: Order intake reached €6.2bn, a +66% yoy organic increase and leading to a record €33.6bn order book (+22% yoy organic increase). Revenues came in at €3,570m, a +7% organic increase. Adjusted EBIT was up 20% yoy at €200m and corresponding to a 5.6% margin (versus 5.1% in H1 15). Free cash flow of €333m (versus €-1,336m), was exceptionnaly high with several down-payments. 2020 guidance confirmed: organic growth of 5% per year and the EBIT margin to reach 7%.
Weak orders in Q1 16 which should not be extrapolated
13 Jul 16
Alstom booked €0.9 bn of orders in Q1 16, compared to c.€2bn over the same period last year. Sales reached €1.7bn and were up 7% organically over Q1 2016/17 mainly driven by regional, high-speed and suburban trains in France, regional trains in Italy, Germany and Sweden, the progressive ramp-up of the PRASA project in South Africa, maintenance of high speed trains in the UK as well as a signalling project in Canada. At €29.7bn on 30 June 2016, the backlog represented over four years of sales. The trains contribution to new orders reached 31% while services, systems and signalling reached 69%, however the signalling contribution was only 23% of orders compared to 25% in Q1 15/16. Objectives for 2020 are confirmed, as sales should grow organically by 5% per year, the adjusted EBIT margin should reach around 7% driven by volume, portfolio mix and efficiencies, while the company expects c. 100% conversion from net income into free cash flow.
The company confirmed its positive turnaround
11 May 16
Alstom reported positive full-year 2015/16 results, which confirmed back to normal, coupled with positive prospects ahead according to the 2020 strategic plan. Main facts: Orders grew 7% yoy at €10.64bn (versus €10.05bn in 2015/14) while the backlog reached €30.63bn, a +14% yoy organic increase and corresponding to more than four years revenue. Revenue was €6881m, 12% growth reported but corresponding to 7% organic growth. The adjusted EBIT was €366m, a +23% increase, corresponding to a 5.3% margin versus 4.8% last year. Net debt was €200m at the end of March 2015. Net income was €3.0bn, impacted by the selling of the energy division. The company confirmed its 2020 targets: By 2020, sales should grow organically by 5% per year. Adjusted EBIT margin should reach around 7% by 2020, driven by volume, portfolio mix and the results of operational excellence actions. By 2020, Alstom expects c. 100% conversion from net income into free cash flow.
Solid Q3 orders confirm positive outlook
18 Jan 16
Alstom Q3 results and press conference call on first nine months’ orders & sales for FY 2015/16 (April 1st to December 12). Alstom booked €2,358 million of orders in Q3 2015/16, versus €1,615 million last year corresponding to a +46% increase. Major commercial successes included regional trains in Belgium, Pendolino trains and associated maintenance in Italy, electrification, a signaling and telecommunications project in India, locomotives in Switzerland, regional trains in Germany, extension of the metro in Panama as well as the tramway for Nice in France. Revenues increased to €1,613 million in the third quarter 2015/16, compared to €1,501 million for the same period last year. (7.4% increase). Nonetheless, Q3 organic sales growth was around 3% on a YoY basis, falling below the 5% organic annual sales growth target previously announced by Alstom Chief Executive Officer Patrick Kron. These results give the company a book-to-bill ratio of 1.46x for the quarter and 1.29x for the first nine months. In the press conference Mr. Kron stated that the GE Signaling business, acquired in November 2015, had been consolidated in the last two months' results and had generated €60m of Sales over this period (€360m on an annualised basis); this was slightly disappointing given the expected €400m increase in annual Sales. Thanks to the grid and power businesses divestment, Alstom is sitting on a substantial amount of cash, even after the $3.2 billion share buyback, the €700m acquisition of GE’s signaling business and the stake increase in Russia’s Transmashholding from 25% to 33% late last year for 54 million Euros. The company is currently net debt free, meaning that in-hand cash balances the gross debt, giving the company a window for external growth and/new share buybacks although CEO Patrick Kron did say in the press conference that external growth and share buybacks were not the first priority. The press conference was Mr. Kron's last and he took the opportunity to thank his teams for the ‘’great work they’ve done’’ during his 13-year career as CEO. He is replaced by the Alstom Transportation’s segment president, Mr. Henri Poupart-Lafarge.
A deleveraged company with a cautious growth approach
05 Nov 15
Alstom reported its H1 15/16 results, governance changes and a return to shareholders. H1 15 orders reached €3.9bn (-39% yoy as H1 14 figures included the jumbo South African contract of €4bn), including about €2bn orders in Q2 15. Sales were €3.3bn, an 8% increase yoy, of which +4% organic reflecting solid performance in Europe and continued growth in Emerging markets. The operating income was €167m (+10% versus last year's €152m) and corresponding to a 5.1% operating margin, slightly higher than last year (5.0%). The net income for continued operations was €18m (below last year's level of (€29m), impacted by one-offs linked to the GE deal. The operating FCF was €-5m,impacted by the ramp-up of some projects (high WC). The outlook is maintained, for the medium term sales are expected to grow at over 5% per year organically and the operating margin within the 5-7% range. Besides the H1 results, two significant pieces of news were released by Alstom: 1/ As expected Alstom will proceed with a public share buy-back offer for €3.2bn at a price of €35, concerning a maximum of 91.5m shares, which will then be cancelled. The transaction will be submitted to the approval of a Shareholders’ Meeting on 18/12/2015, as well as a review by the AMF. The offer would be opened from 23 December 2015 to 20 January 2016 with settlement-delivery of the shares scheduled for 28 January 2016. 2/ Governance: also expected, Mr Kron has resigned from his functions of chairman and CEO which will take place after the return to shareholders, at the end of January 2016, and Mr Henri Poupart-Lafarge will then take over.
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
accesso Technology (ACSO LN) Full year results in line, but key trading months still ahead | Augean (AUG LN) Double digit growth in ’16, good start to ‘17 | Earthport (EPO LN) Interims show continued top line strength | Goals Soccer Centres (GOAL LN) Good momentum under new team. It’s now all about delivery | IQE (IQE LN) FY’16 results prompt further upgrades | Microsaic Systems (MSYS LN) Challenges in 2016, strategy remains in place | mporium Group (MPM LN) Funds raised to help execute strategy | RhythmOne (RTHM LN) Dawn of the independents | ScS Group (SCS LN) Strong progress on key growth initiatives albeit comps now toughen | Sinclair Pharma (SPH LN) FY results: EBITDA ahead, Instalift™ gaining pace | Vectura Group (VEC LN) FY (9-month) results
N+1 Singer - Augean - Double digit growth in ’16, good start to ‘17
21 Mar 17
Augean reported another year of double digit growth for 2016, with profits in line with our forecasts. Sales grew by 21% excluding landfill tax, while adjusted PBT grew by 18% to £7.1m before amortisation of acquired intangibles. DPS was increased by 54% to 1.0p, 25% ahead of our estimate. The business units made further strategic progress, with revenues from their top 20 customers increasing from 42% to 43% of the total, of which 88% was under contract or a framework agreement, increasing forward visibility. There has been an encouraging start to 2017 and management is confident of delivering another year of profits growth. The shares trade on undemanding single digit multiples, offering good value.
N+1 Singer - Xaar - 2016 results slightly ahead, reduced visibility in 2017
22 Mar 17
Xaar’s 2016 results were slightly ahead of our forecasts, showing a small decline in profit vs. the previous year. Sales grew by 3% to £96.2m, reflecting lower sales from ceramic tile printing, offset by strong growth from Packaging and licence income and an initial contribution from the Engineered Printing Solutions acquisition. Adjusted PBT reduced by 6% to £19.5m (N+1Se £18.7m). Xaar has made significant progress in terms of strategic development in 2016. Its growth drivers are broadening out and it remains focused on its target of £220m sales by 2020. However near term growth is dependent on new products and management has guided to a higher than normal H2 weighting and reduced visibility, which is likely to restrain the share price.