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Research Tree provides access to ongoing research coverage, media content and regulatory news on Alstom. We currently have 12 research reports from 1 professional analysts.
Alstom posted impressive results and beat market expectations on all metrics. The interesting point is the operating margin progress that resulted in a higher share of value-added activities (Signalling, Systems & Services) which already represent more than half of the revenue. The 2018/19 guidance in margins is lifted, which allows Alstom to enter into the merger with Siemens in a position of strength.
Alstom reported H1 17/18 figures which were above market expectations overall. Revenues reached €3,756m, 5% organic growth versus last year (€3,570m) and in line with expectations. Orders received amounted to €3,170m, a 49% decrease yoy (€6,212m), and included two contracts in Canada for almost 100 light rail vehicles, a first metro system contract in Vietnam, a metro system contract in Philippines, contracts for regional trains in Italy, Senegal and Germany, a maintenance contract in Sweden, as well as a fleet modernisation project in the USA. The backlog reached €32.7bn, slightly below last year’s level of €33.49bn. The operating profit was €231m (versus €200m last year), corresponding to a 6.2% operating margin (versus 5.6% last year). Net income was €213m (versus €128m) and FCF generation was €227m (€333m last year). The company confirmed its 2020 targets: 5% organic growth per year and an EBIT margin of 7%.
Deal confirmed with Bouygues; French and German states supporting the transaction. Creation of a pro forma €15.3bn company and adjusted EBIT of €1.2bn. Listing in France and group headquarters in Paris area; led by Alstom’s current CEO and 50% shares of the new entity owned by Siemens. Annual pre-tax EBIT synergies of €470m expected by the latest four years after closing (procurement, SGA, R&D and others). Up to €8 per share dividend to Alstom’s existing shareholders: €4 per share at closing + €4 per share after the exercise of the put options in the energy JVs with GE valued at €2.5bn (in line with AV’s estimate). The closing is expected at the end of 2018.
During Q1 17/18, Alstom recorded €1.91bn worth of orders (versus €900m last year), including two contracts in Canada for almost 100 light rail vehicles, a first metro system contract in Vietnam, contracts for regional trains in Senegal and Germany, a fleet modernisation project in the USA, as well as part of a metro system contract for Manila in the Philippines. Sales, at €1.9bn, were up 5% organically in the first quarter 2017/18. The backlog reached €34bn on 30 June 2017. Objectives for 2020 are confirmed: By 2020, sales should grow organically by 5% per year. The 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 a c. 100% conversion from net income into free cash flow.
Alstom has reported its annual results for 2016/17, confirming an improvement in both its operating and commercial performance. 2016/17 revenue reached €7.3bn, corresponding to +6% organic growth, and in line with expectations, while the order backlog reached €34.7bn (+10.6bn of new orders in 2016/17). The adj. operating profit reached €421m up 5% yoy, corresponding to a +5.8% margin, slightly above market and AV expectations (€411m). The net result was €289m (versus AV €296M), leading to positive FCF of €182m. The net debt was stable at €208m. The company is proposing a dividend of €0.25 and has confirmed its 2020 targets.
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.
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%.
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.
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.
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.
Alstom reported its H1 15/16 results, governance changes and a return to shareholders.
Alstom reported €1.96bn of orders in Transport for its Q1 15/16, a 59% decrease yoy but Q1 14/15 included the jumbo contract of €4.0bn in South Africa. If we exclude the jumbo contract, the order level is rather strong in comparison with last year although fuelled by small and mid-sized contracts including maintenance of Kazakh locomotives, locomotives in Azerbaijan and a signalling system in Hong Kong.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Alstom. We currently have 12 research reports from 1 professional analysts.
Last Friday we hosted our second Listed Law conference, London’s only investor event focussed on the business of law in a listed context. We are fascinated that a sector involving many hundreds of billions of dollars of activity each year in high added-value services only offers public market investors fewer than a dozen equity market investment opportunities globally, with an aggregate market cap of only £4.3bn (of which Burford Capital is £3.3bn). With high costs driving change in the way legal services are bought and sold, our speakers offered fascinating insights on emerging business models. These require capital and talent to function fully and our conference theme paid particular attention to how that talent is attracted, deployed and retained. We conclude that more public investment opportunities are likely. A video of each presentation is embedded on each company profile herein and the slide packs themselves are available on e-mail by request.
Companies: BUR GOR GTLY
We have refreshed our quality style screen for the second time and report on style performance since the last refresh in October. Performance has been very strong, outperforming the small-cap index by c.1600bps (weighted basis) and c.1000bps (unweighted). There has been volatility with the market and this style has yet to be tested in a concerted down market, but in a flat or rising market quality appears to be a successful investment style in small-caps. We have highlighted 11 focus stocks in the new screen and will report back again on performance when we next refresh the screen in about 5-6 months’ time.
Companies: LIO GHT AMO CHH ZYT DOTD GTLY RIV FCRM TAM PAM
Water Intelligence has reported a strong set of FY 2017 results with adj. EPS up 30% and a continued strong outlook. Indeed, the recent Q1 2018E statement detailed sales were up +40% and PBT up 50%. We have updated our target price to 309p (previously 263p) and reiterate our view that Water Intelligence has a differentiated offering in a large, growing market that is supported by regulation, underpinning very significant growth prospects.
Companies: Water Intelligence
Gateley have confirmed strong progress for FY18 with revenue growth of at least 8% and EBITDA growth over 7%. The group have also strengthened the property activities acquiring GCL creating one of the largest residential development teams in the UK legal market. The acquisition will drive meaningful cost and revenue synergies and we estimate will enhance earnings by 4% in FY19. Gateley shares offer investors access to an established business model set to directly benefit from the changing structure of the UK legal market; an opportunity-rich landscape for ambitious mid-tier firms. Results since the float have clearly demonstrated a quality earnings stream and we believe the positive year end trading update aligned with the earnings enhancement from GCL should provide a catalyst for re-rating.
Harvey Nash Group plc (HVN.L, 103p/£75.8m) Acquisition | Norman Broadbent plc (NBB.L, 11p/£5.8m) Final results to 31 December 2017 | Staffline Group plc (STAF.L, 970p/£270m) AGM Statement
Companies: HVN NBB STAF
Fulcrum is a leading provider of utility connection services across the UK. It has a strong recent track record, with adj. operating profit growing organically from £1.1m to £6.5m over the last two years. The Group has two segments, Infrastructure Services (high margin utility connections business) and Asset Ownership (recurring revenue at a very high margin as gas and electric flows through installed networks), and it recently acquired an electricity connections business named Dunamis. Fulcrum’s operating margin is sector leading at 17.2% in FY’17 vs. the construction peer group at 5%, and it operates a cash generative model. We expect continued growth as management implements its strategy to win market share and forecast PBT to grow to £12.4m by FY’20 from £6.5m in FY’17. We set our target price at 80p and initiate with a Buy recommendation.
Companies: Fulcrum Utility Services
The FTSE 100 hit an all-time high earlier this week, surpassing the 7,800 mark as concerns over a US-China trade war receded. As Table 1 below shows, all indices have now moved firmly into positive territory for the year to date. We have continued to see significant M&A activity. With some exceptions, company results have been as anticipated, although the outlook in some sectors of the economy looks less promising than previously. In Share News & Views, we comment on Bloomsbury Publishing, Braemar Shipping*, DeepMatter*, GetBusy*, Location Sciences* PCF Group* and Sprue Aegis*.
Companies: APC BMS CRPR ECSC ESC EUSP FDM GETB PCF SNX SPRP TCN W7L
This quarter we use finnCap’s Slide Rule to provide both top-down and bottom-up analysis of the UK’s Technology and Telecoms sectors. Our findings are very reassuring: the Tech sector scores the best (across all sectors) when considering Growth and Quality – Taptica*, Frontier Developments* and dotDigital* in particular stand out on these metrics. Given these attractive characteristics and growth prospects, the Tech sector is unsurprisingly one of the most expensive – currently trading at 17.2x FY1 EV/EBIT and 23.8x FY1 P/E, versus 15.0x and 18.5x respectively for the wider market. Despite valuations appearing high, we believe there are value opportunities. For example, Proactis* features in finnCap’s QVGM+ portfolio (ranked 17/462) – the company offers attractive organic and inorganic growth, with earnings forecast to grow by 26% CAGR over the next two years, but despite this, only trades on 15x FY1 earnings and offers 8% FCF yield in FY2.
Companies: 7DIG ALT AMO ARTA BOTB BLTG CTP CITY D4T4 DTC DOTD ELCO ESG FDEV GBG IDEA IDOX IMTK IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET PHD QTX QXT RCN 932 SSY SEE SIM SPE SRT STR TAP TAX TEP TPOP TRAK UNG VIP ZOO CYAN ONEV
Sprue’s 2017 results are in line with the expectations in the January trading update, save for the £3.8m exceptional charge announced last week in the settlement with BRK. This mainly relates to an inventory write down/charge which has impacted cash flow and no final dividend has been declared. We have reinstated coverage with lower sales and profit forecasts than previously. However, with a strong product roadmap, we expect to see these recover in due course. We reinstate a Buy rating and a DCF-derived 170p target price.
Companies: Sprue Aegis
AGM statement guides to in line and we leave estimates unchanged, with potential for upgrades later on. We continue to expect net debt of £20.4m in FY 2018.
Companies: Staffline Group
Two former AIM companies could be in the FTSE 100 index in the near future following the successful bids by Melrose Industries for GKN and GVC for Ladbrokes Coral. Melrose has been on the brink of the FTSE 100 for a while and if a constituent company of the FTSE 100 is acquired than it can be replaced by the acquirer when it is eligible. Melrose is already on the reserve list for inclusion in the FTSE 100, following the March 2018 quarterly review.
Companies: PTSG JDG TRCS SRB TAP KETL
With the acquisition of Glassman High Voltage, XP continues in its quest to expand its product portfolio to include high-voltage and high-power products. The acquisition should help XP to further penetrate key accounts, as well as adding new customers. XP is paying £31.8m in cash, funded by extending the company’s credit facility, and expects the deal to be earnings enhancing in FY18. We increase our FY18 and FY19 normalised EPS forecasts by 3.6% and 6.1% respectively. We forecast a net debt/EBITDA ratio of 0.8x at end FY18, well below the company’s 2.0x ceiling.
Companies: XP Power
Have you ever had the pleasure of cleaning a canteen kitchen, fast-food outlet or public toilet? If so, then you’ll know it’s not for the squeamish. The restaurant, facilities management and medical industries are faced with this challenge millions of times each day. Balancing on the one hand, stringent health & safety, hygiene and clinical requirements with cost, employee & customer pressures on the other.
Companies: Elektron Technology
A customer in the Financial sector has experienced a downturn in activity in H1 which has offset strong progress in the Gaming sector. After a poor H1, Financials has seen an improvement in demand and a generally stronger H2 is expected. Exciting opportunities remain in Gaming and elsewhere, and with more normal Financial sales, the outlook remains positive. We have reduced our PBT forecast in FY18 from £5.6m to £5.2m and await updates as the year progresses. Year end net cash is expected to be £14.8m. Given the expected improvement in H2, an ex cash P/E of c.13x and a dividend yield of over 5% are still strong attractions.
FY2018 results show revenues of £133.4m (-1.8%) and adj. PBT of £7.7m (+97%). Shipbroking has performed in line, despite weakness in the tanker market. The Financial division (including Braemar NAVES) has performed ahead of expectations. Technical has returned to profitability. The dividend has increased to 15p. Braemar continues to invest, for a better balance and a wider range of complementary skills. Given this investment, we have reduced FY2019E PBT by 9% to £9.5m, EPS of 25.5p, and dividend of 17p. Buy 400p TP.
Companies: Braemar Shipping Services