16 January 2003
FIRST NINE MONTHS - ORDERS & SALES
(1st April 2002 - 31st December 2002)
o RESILIENT PERFORMANCE IN ORDERS (-2%) AND SALES (+1%) ON A COMPARABLE BASIS
o MORE THAN €450 MILLION IN DISPOSALS INCLUDING FURTHER REAL ESTATE IN
EUROPE (€142 MILLION) AND CAPTIVE INSURANCE COMPANY (€101 MILLION)
o DEBT REDUCTION REMAINS TOP PRIORITY
Commenting on the first nine months Orders and Sales announced this morning,
Patrick Kron, Chief Executive Officer of ALSTOM, stated:
"Since our last announcement two months ago, there has been no major change in
market trends: demand for Transport remains strong, T&D is stable overall,
while demand in Power and Marine is still low in an uncertain economic
environment.
After completion of our current budget process, in mid-March I will announce our
plans and expectations for the coming years. Debt reduction remains a top
priority for ALSTOM and we expect proceeds from real estate and business
disposals to exceed the original RESTORE VALUE target."
REPORTED FIGURES (Unaudited)
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In € million ORDERS RECEIVED SALES
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FIRST NINE First Nine % change FIRST NINE First Nine % change
MONTHS Months MONTHS Months
FY2002/ FY2001/2 FY2002/ FY2001/2
2003 002 2003 002
--------------------------------------------------------------------------------------------------------------
Power 7,240 9,152 -21% 8,367 9,771 -14%
Transmission &
Distribution 2,771 2,968 -7% 2,694 2,765 -3%
Transport 5,200 4,604 13% 3,618 3,112 16%
Marine 135 229 -41% 1,065 835 27%
Others(1) 144 1,064 -87% 156 907 -83%
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Total 15,490 18,017 -14% 15,900 17,390 -9%
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(1) Including Contracting disposed as of 20 July 2001
COMPARABLE FIGURES (Unaudited)
Orders and sales, as reported, were impacted during the first nine months of
fiscal year 2002/03 by the translation effect between euro and non-euro
currencies, particularly the US dollar (impact of approximately 4.1%), and by
the change in scope, mainly the disposal of Contracting in July 2001 and GTRM
(Transport) in September 2001. Comparable figures below adjust the fiscal year
2001/02 figures for these impacts.
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In € million ORDERS RECEIVED SALES
--------------------------------------------------------------------------------------------------------------
FIRST NINE First Nine % change FIRST NINE First Nine % change
MONTHS Months MONTHS Months
FY2002/ FY2001/2 FY2002/ FY2001/2
2003 002 2003 002
--------------------------------------------------------------------------------------------------------------
Power 7,240 8,656 -16% 8,367 9,264 -10%
Transmission &
Distribution 2,771 2,806 -1% 2,694 2,638 2%
Transport 5,200 3,928 32% 3,618 2,793 30%
Marine 135 229 -41% 1,065 835 27%
Others 144 164 -12% 156 154 2%
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Total 15,490 15,783 -2% 15,900 15,684 1%
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ORDERS RECEIVED: -2%
--------------------
Despite a poor economic environment overall orders received during the third
quarter of 2002/03 (€4,953 million) were above the second quarter of this year
(€4,863 million) and the third quarter of the previous year
(€4,824 million).
On a comparable basis, order intake for the first 9 months of fiscal year
2002/03 decreased by 2% compared with the same period of the previous year,
mainly due to Power (-16%) and to a lesser extent Marine (-41%). Transport
improved significantly (+32%), taking advantage of a very buoyant market.
T&D remained stable (-1%).
The backlog, at €33 billion, remains equivalent to 19 months of sales.
SALES: +1%
----------
On a comparable basis, cumulative sales for the first three-quarters of fiscal
year 2002/03 were up 1% versus last year. This was mainly due to the
performances of Transport (+30%) and Marine (+27%), which offset the decrease in
Power (-10 %). T&D remained stable (+2%).
GEOGRAPHIC BREAKDOWN
--------------------
COMPARABLE FIGURES (Unaudited)
--------------------------------------------------------------------------------------------------------------
In € million ORDERS RECEIVED SALES
--------------------------------------------------------------------------------------------------------------
FIRST NINE First Nine % change FIRST NINE First Nine % change
MONTHS Months MONTHS Months
FY2002/ FY2001/2 FY2002/ FY2001/2
2003 002 2003 002
--------------------------------------------------------------------------------------------------------------
Europe 7,442 6,578 13% 6,686 6,018 11%
North America 3,487 3,908 -11% 3,612 4,380 -18%
Latin America 774 1,302 -41% 1,176 670 76%
Africa/Middle East 1,614 1,289 25% 1,630 1,427 14%
Asia/Pacific 2,173 2,705 -20% 2,796 3,190 -12%
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Total 15,490 15,783 -2% 15,900 15,684 1%
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Europe remained the main market for the Company, with 48% of orders versus 37%
at the end of December 2001, and continued to grow (+13%).
Orders in North America decreased by 11%, reflecting the collapse of the US
energy market partly offset by a good performance from Transport.
Orders in Latin America were down 41%, affected by the economic crisis in this
region.
Orders in Africa/Middle East were up 25% due to significant demand for power
infrastructure, particularly in the Middle East.
Orders in Asia/Pacific decreased by 20%, largely due to a decrease in Power
orders, where several important projects were secured in Malaysia and Australia
last year.
MORE THAN €450 MILLION OF DISPOSALS
-----------------------------------
The Company is making significant progress with the real estate and business
disposals outlined in its Restore Value plan:
- The South African subsidiary was sold for €50 MILLION in September
2002.
- The UK real estate portfolio was sold for €175 MILLION in December
2002. This portfolio constituted 19 properties, comprising 800 000 square
metres of buildings and 600 acres of land. The Company has taken leases on
most of these properties, the average length of the leases being
approximately 13 years.
- Two new agreements have just been signed for the sale of real estate in
continental Europe, one with CDC Ixis Capital Market (€120.5 million) and
the other with a consortium including Morgan Stanley International Real
Estate Funds and the group Foncière des Régions (€21million),
for a total of €142 MILLION. These transactions cover 16 sites in
France, Spain, Switzerland and Belgium, comprising 310 000 square metres of
buildings. Again, the Company has taken leases on the properties and the
average length of the leases will be approximately 9 years.
- Sale of captive insurance company to be closed end of January for €101
MILLION.
In addition, in November 2002, the Company selected EDS as preferred bidder for
the outsourcing of its IT services in 14 countries. Negotiations are now well
advanced.
COMMENTS BY SECTOR
------------------
POWER
Despite long-term growth fundamentals, the power generation equipment market is
currently at a low level following the collapse in US demand after an
unprecedented boom.
Orders in Power decreased by 16% and sales by 10% compared with the first 9
months of the previous fiscal year, with contrasting trends in the Sector's
constituent Segments. Customer Service continued to grow while Steam Turbine
benefited from a very positive retrofit market, which offset the decline in the
US combined cycle market. Gas Turbine, Industrial Turbine and the Heat Recovery
Steam Generators business of Boilers & Environment were also impacted by the US
market decline. However, demand in Gas Turbine remained strong in the Middle
East. Orders in the Hydro Power Segment decreased, particularly in Brazil.
Important orders received in the third quarter included an operation and
maintenance contract for a GT24 gas turbine power station in Mexico for
Iberdrola; two 130 MW steam turbines as part of a combined cycle conversion
project for Israel Electric Co and the first orders for our new GT10C gas
turbine in Egypt.
Whilst the US market remains difficult, ALSTOM is benefiting from its global
coverage, with a stable European utility sector, a steady level of activity in
the Middle East and selective opportunities in Asia/Pacific.
TRANSMISSION & DISTRIBUTION (T&D)
OVERALL THE MARKET REMAINED FLAT WITH GROWTH IN TRANSMISSION, PARTICULARLY HIGH
VOLTAGE SYSTEMS, OFFSET BY A CONTINUING LOW LEVEL OF ACTIVITY IN DISTRIBUTION
PRODUCTS. THE RELATIVELY WEAK ORDER INTAKE FOR THE NINE MONTHS OVERALL, (-1%)
WAS DUE TO AN EXCEPTIONAL LOW LEVEL OF ORDERS REGISTERED IN LARGE PROJECTS IN
THE THIRD QUARTER 2002/03. DEMAND IS BUOYANT IN CHINA AND THE MIDDLE EAST AND
THE COMPANY REMAINS WELL POSITIONED TO BENEFIT FROM AN IMPROVEMENT IN THE US
MARKET AS SOON AS A NEW REGULATORY REGIME IS PUT IN PLACE. SALES REMAINED STABLE
(+2%).
TRANSPORT
In a continuing strong market, Transport achieved a very good performance both
in orders (+32%) and sales (+30%). During the third quarter some major orders
were registered, including the New York Metro (ALSTOM's share: €650
million) and a 14-year maintenance contract for AVE in Spain (€500
million).
The recently-announced contracts for the supply of new metro trains in Barcelona
(€290 million) and the maintenance of locomotives for BNSF in the US
(€420 million) have not yet been included in the backlog. Based on the high
level of current activity, this positive trend for the Sector is expected to
continue.
In the UK, the last six regional trains were delivered. The first Pendolino
passenger service ran successfully in December 2002 on the West Coast Main Line,
with commercial service due to start by the end of January 2003.
MARINE
The merger of the two main cruise operators in the market and the weakening of
the US dollar against the euro have delayed orders for cruise-ships. However,
the cruise holiday market has recovered following the impact of 11 September
2001.
The other high added-value ship markets, including LNG tankers, are more
positive in the short term. Orders received included an oceanographic ship for
the French Ifremer Institute and a luxury yacht.
Despite a significant decrease in orders (-41%), sales are progressing well
(+27%), reflecting the shipyard's backlog with 5 cruise-ships to be delivered
over the next 15 months.
Resolution of the consequences of the Renaissance bankruptcy is now well
advanced, with 6 of the 8 vessels either sold or chartered (three for long-term
charter, one for short-term charter and two sold to P&O Princess).
OUTLOOK
-------
The nine-month trend in orders and sales is expected to be maintained for the
full year 2002/03.
*
* *
CONTACTS
Press enquiries: G. Tourvieille
(Tel. +33 1 47 55 23 15)
gilles.tourvieille@chq.alstom.com
Investor relations: E. Rocolle-Teyssier (Tel. +33 1 47 55 25 78)
investor.relations@chq.alstom.com
Internet: http://www.alstom.com
*
* *
FORWARD-LOOKING STATEMENTS
This press release contains, and other written or oral reports and
communications of ALSTOM may from time to time contain, forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements appear,
without limitation, in all of the paragraphs of the comments of the Chairman and
CEO in the press release and in the sections Orders, Power and Outlook. Examples
of such forward-looking statements include, but are not limited to (i)
projections or expectations of sales, income, operating margins, dividends,
provisions or other financial items or ratios, (ii) statements of plans,
objectives or goals of ALSTOM or its management, (iii) statements of future
product or economic performance, and (iv) statements of assumptions underlying
such statements. Words such as "believes," "anticipates," "expects," "intends,"
"aims," "plans" and "will" and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such
statements.
By their very nature, forward-looking statements involve risks and uncertainties
that the forecasts, projections and other forward-looking statements will not be
achieved. Such statements are based on management's current plans and
expectations and are subject to a number of important factors that could cause
actual results to differ materially from the plans, objectives and expectations
expressed in such forward-looking statements. These factors include: (i) the
inherent difficulty of forecasting future market conditions, level of
infrastructure spending, GDP growth generally, interest rates and exchange
rates; (ii) the effects of, and changes in, laws, regulations, governmental
policy, taxation or accounting standards or practices; (iii) the effects of
competition in the product markets and geographic areas in which ALSTOM
operates; (iv) the ability to increase market share, control costs and enhance
cash generation while maintaining high quality products and services; (v) the
timely development of new products and services; (vi) the inherent technical
complexity of many of ALSTOM's products and technologies and the ability to
resolve effectively and at reasonable cost technical problems that inevitably
arise, including in particular the problems encountered with the GT24/26 gas
turbines; (vii) risks inherent in large contracts that comprise a substantial
portion of ALSTOM's business; (viii) the effects of acquisitions and disposals;
(ix) the ability to invest in successfully, and compete at the leading edge of,
technology developments across all of ALSTOM's Sectors; (x) the availability of
adequate cash flow from operations or other sources to achieve management's
objectives or goals; (xi) the inherent difficulty in estimating future charter
or sale prices of any relevant cruise-ship in any appraisal of the exposure in
respect of the Renaissance matter or the unusual level of uncertainty at this
time regarding the world economy in general; and (xii) ALSTOM's success at
adjusting to and managing the risks of the foregoing. ALSTOM cautions that the
foregoing list of important factors is not exhaustive; when relying on
forward-looking statements to make decisions with respect to ALSTOM, investors
and others should carefully consider the foregoing factors and other
uncertainties and events, as well as other factors described in other documents
ALSTOM files from time to time with the Securities and Exchange Commission,
including reports on Form 6-K. Forward-looking statements speak only as of the
date on which they are made, and ALSTOM undertakes no obligation to update or
revise any of them, whether as a result of new information, future events or
otherwise.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALSTOM
Date: January 22, 2003 By: /s/ Philippe Jaffré
------------------------------
Name: Philippe Jaffré
Title: Chief Financial Officer