Alstom Unsp/Adr

Hello, and welcome to Alstom's 9-Month Results for Fiscal Year 2024-2025 presentation. My name is George. I'll be coordinating today's event. Please note, this conference is being recorded, and for the duration of the call, your line is in listen-only mode. However, you have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing star 1 on your telephone keypad to answer your questions. If you require assistance at any point, please press star zero and you will be connected to an operator. I'd like to hand you over to your host this evening, Mr. Bernard Ndipi, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Good evening, everyone, and welcome to Awesome's webcast dedicated to the third quarter of the fiscal year 24-25, presenting Orders and Sales. Before jumping to the slides, let me please emphasize some context points. Market perspectives remain solid. Commercial activity is high. And we see a stable pipeline for the next quarters, i.e., no change to last talks we had in November with H1 releases. A number of large projects have been awarded lately and options on large frame contracts have been exercised. Worth also noting that competition has been intensifying lately in certain regions like Middle East, Asia or Latin America. That being said, Let's focus on our sum orders and sales and I'll start with orders on page 3 Order intakes total 4.3 billion euros in Q3 with large orders at 2.2 billion and the sound level of base orders around 2 billion So after nine months Europe is still leading the pack and represents large majority of total order intake. 58% of total orders come from services and signaling year-to-date. Group book-to-bill stands at 1.1, while services book-to-bill is at 2, signaling at 1.3, and rolling stock is 1%. Backlog remains stable around 95 billion, even after a 0.9 booktube in Q3, as FX was slightly positive in Q3. The margin on orders continues to be largely exceeding the margin traded in the P&L. and it is fully consistent with our mid-term objective, and as a result, our margin in backlog is improving, supporting our trajectory of profitable growth. On page 4, a few contracts to highlight, reflecting the commercial successes of the third quarter. about 1.5 billion euros of large services orders, two major orders for regional trains maintenance in Europe for 9 and 23 years respectively. And also, two important wins in the US in California and Denver airport, an unrolling stock, 500 million euros of options on RER ENGIE in Paris. Of note, two promising frame agreements in signaling have been signed in Europe for a total of 800 million euros with orders to be booked progressively over next quarters, which will support signaling growth trajectory. Turning to sales. Organic growth was 9.8% in Q3 and 6.9% year to date. Strong performance of services delivering double-digit organic growth over the nine months. Sequential growth in rolling stock production from Q2 to Q3. and organic growth accelerating in Q3 with high system deliveries, notably in Mexico. Signaling reported growth impacted by the sale of our U.S. conventional SIG to Gnor-Brenso in August, and Forex impact has reversed during Q3 and only weighs negative 0.3% on sales after nine months. Regarding rolling stock production, Q3 saw an increase in the output with 1,098 cars. It's up 6% versus Q2, and it's up 10% versus H1 monthly average. It's fair to say that it's below our target for two reasons. The first one was already discussed after Q2, situation of the supply chain. Out of 63 critical suppliers, we still had a few impacting our European production lines. It is gradually improving. Another one that is not new, but worth mentioning, is that we have a high proportion of projects in their starting phase which are less, let's say, stable than serial production. So not a supply chain issue, but rather some phasing in the ramp-up. We now see total rolling stock output between 4300 and 4400 at the end of the year. below the previous forecast of 46 to 4,400, but still higher than last year when you exclude Derby that is not producing cows anymore. It has an impact on sales and margin of rolling stock. It has been mediated thanks to the rolling stock mix that is improving, thanks to other product line growth that is above the forecast, and thanks to the adaptation of the running stock production cost and the acceleration of other cost savings programs. Turning to the outlook, I can confirm that after nine months, the main assumptions of our full year targets are the same. Market demand is supportive, and the level of down payments is should be consistent this year as compared to last fiscal year. And we are now expecting an output of 4,300 to 4,400 cars for the full year as just explained. On this basis, the outlook for the full year is confirmed. Book to build above one. Sales organic growth around 5%. Adjusted EBIT around 6.5%. and free cash flow generation to be within a range of 300 to 500 million euros for the full year. Before we open for Q&A, let me share a few words of conclusion. Demand remains robust. Management focus is on project execution, with the expected increase in production output in Q4. Integration efforts... or ending the Asper plan with last countries adopting Alstom tools in Q4. Thank you for listening. I will now take your questions.

Thank you very much, Mr. Delpy. Ladies and gentlemen, as a reminder, if you have any questions, please press star 1 on your keyboard. Our very first question is coming from Daniela Costa, calling from Goldman Sachs. Please go ahead.