Alstom Backs Outlook As Q3 Sales, Orders Rise, But 9M Orders Down; Stock Dips

(RTTNews) - French rolling stock maker Alstom SA reported Wednesday growth in its third-quarter sales and orders as well as in nine-month sales. Meanwhile, nine-month orders were weak, and the company maintained its outlook for fiscal 2024 and mid-term. Alstom shares were losing more than 5 percent in the morning trading in Paris.

Henri POUPART-LAFARGE, Alstom Chairman and Chief Executive Officer, said, "Alstom delivered strong levels of order intake during the third quarter, on the back of positive market momentum in Services and Systems. We are relentlessly focused on the operational action plan to generate cash in the second half of the year, notably through improved production and working capital efficiency. Considering the progress made since November, we will provide the breakdown of each measure of the €2 billion inorganic plan in May 2024. Confident in the resilience of our business model, we confirm our short and mid-term targets."

For fiscal 2024, the company continues to project organic sales growth of above 5 percent, and adjusted EBIT margin around 6 percent, compared to last year's margin of 5.2 percent.

The company also confirmed its mid-term objectives to be reached in fiscal 2026, expecting sales Compound Annual Growth Rate over 5 percent supported by strong market momentum and 90.3 billion euros backlog as of December 31. This would help secure sales of around 38 billion euros to 40 billion euros over the next three years.

The adjusted EBIT margin is still projected to reach between 8 percent and 10 percent from 2026 onwards.

The company targets a reduction in its net debt position by 2 billion euros by March 2025.

For the third quarter, Alstom's sales rose 2.6 percent to 4.33 billion euros from 4.22 billion euros in the previous year. Quarterly organic sales were up 4.6 percent.

During the quarter, Alstom booked 5.45 billion euros in orders, up 5.8 percent from 5.15 billion euros in the same period last year. Organic order growth was 6.4 percent.

In the nine-month period, Alstom's sales grew 4.1 percent on a reported basis and 7.3 percent organically from last year to 12.78 billion euros. Orders, meanwhile, fell 8.7 percent on a reported basis and 7 percent organically to 13.90 billion euros.

Over 9 months, Rolling Stock sales reached 6.77 billion euros, a increase of 1 percent on a reported basis and 5 percent on an organic basis, driven by a ramp-up of projects in Brazil and in India as well as a solid level of execution in the US and in France.

Signalling sales grew 8 percent on a reported basis and 12 percent on an organic basis. Services sales also went up 7 percent on a reported basis and 10 percent on an organic basis.

Orders for Services, Signalling and Systems reached 66 percent of the total order intake over the 9 months. On a regional level, Europe accounts for 34 percent of the Group total order intake.

The backlog, as of December 31, 2023, settled at 90.3 billion euros, providing strong visibility on future sales.

In Paris, Alstom shares were trading at 11.27 euros, down 5.33 percent.