Alstom Unsp/Adr

Welcome to the Alstom 2026-2027 First Quarter Orders and Sales Conference Call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to Bernard Delpit, Executive Vice President and CFO. Sir, please go ahead.

Thank you. Good morning everyone and thanks for joining Alstom's orders and sales update for the first quarter of fiscal year 26-27. And let's start with orders on slide 3. The group recorded 2.6 billion euros of order intake in the first quarter. This represents a book-to-bill ratio of 0.5 compared to a 0.9 in Q1 last year. Similar to prior years, we expect order intake to accelerate in the coming months and reach a book-to-bill ratio above 1 for the full year starting with Q2 where we also expect a book-to-bill above 1. Some additional color by product line and region. Rolling Stock was the largest contributor this quarter, representing around 1.2 billion euros of orders. In particular, the group was awarded a locomotive contract in the Africa, Middle East, and Central Asia region for 800 million euros. Services delivered a solid performance with €0.8 billion of order intake, with in particular contracts for locomotive maintenance in India and several service contracts in Northern Europe. Signalling recorded €600 million of orders, benefiting notably from around €300 million of orders in Egypt. So as a whole, a low volume but good quality of order intake, with locomotives being a platform we push for, and with average margin on new orders being accretive to overall gross margin in the backlog. At the end of June, the backlog amounted to 102.8 billion euros. Turning to slide four with some operational highlights in the first quarter. In France, TGVM received homologation from both the European and French authorities to enter passenger service. This is an important milestone for the group, considering that 190 Avelia Horizon trains have been ordered by several customers to date. Some of them, including the ones ordered by SNCF and Eurostar, will have 11 cars in total. Some others will be configured with one or two fewer cars, but all are based on the same platform. In Egypt, commercial service began on Africa's first monorail system. This marks a significant milestone for the first large turnkey project and the start of the operations and maintenance contract by Alstom for a period of 30 years. In signaling, we commissioned the first Argos digital interlocking system in France. This is an important step in the future deployment of the European Signaling Standard . In the UK, the first of the 10 Elizabeth Line train options based on the Aventra platform has been manufactured and is now undergoing testing. Finally, in France, serial production programs reached significant milestones to date 500 regional trains have been manufactured under the Omneo platform and our customer Ile-de-France Mobility has more than 100 RER new generation trains in commercial service now across the Paris region. Turning to slide 5 on car production, which gives an indication of the level of activity for slightly over half of our business. The group produced 940 cows in the first quarter, compared with 961 in Q1 last year. Beyond this 2% decrease, we do note that all regions reported year-on-year growth, except the Americas, partly due to the completion of major programs such as BART for San Francisco. From a mixed perspective, in the first quarter, the group produced fewer metros but more commuters and regional trains compared to the same period last fiscal year. In addition, we continue to bring the several new platforms we mentioned in Q4 through their industrialization phase. You recall this had an impact on car production in Q4 last year, and it continues to weigh on production in Q1. However, the year-on-year decline moderated to 2% compared with 6% in the previous quarter. Beyond the usual seasonality, we expect car production to improve relative to last year's levels, particularly in the second half. The full-year production target is 4,400 to 4,500 cars, compared with 4,284 produced last fiscal year. We also note that the number of cars delivered to our clients increased in the first quarter compared to the same period last year and exceeded the number of cars produced, which is a KPI that we report here since 2024. Let me now turn to sales performance in the first quarter. The group recorded 4.7 billion euros of sales in the first quarter, up 4.9% compared to the same period last year. Currency impact on sales was broadly neutral, meaning organic growth was 4.8% over the period. Rolling Stock recorded sales of 2.5 billion euros, up 6% versus last year on an organic basis. This was primarily driven by the execution of regional and commuter train projects currently in serial production in France, but also the ramp-up of production for regional trains sold in Eastern Europe, as well as increased locomotive production. Services delivered another strong quarter at 1.2 billion euros of sales, up 9% on an organic basis. Growth was supported by the expansion of our operations and maintenance activities in North America, as well as commuter and regional maintenance contracts in Australia. Signalling sales grew by 4%, reaching 600 million euros. It was supported by the acceleration of the Perth High Capacity Signalling Project in Australia, while several signalling contracts in Poland continued to progress according to plan. System sales were 400 million, down 10% on an organic basis. This mainly reflects major projects such as Trenmaya in Mexico and the Sao Paulo monorail continuing to ramp down and now reaching the final stages of execution. Turning to slide seven. where we confirm the outlook for this current fiscal year as given at the time of full year results in May. We expect a book-to-bill above 1, organic sales growth of around 5%, and car production in the range of 4,400 to 3,500 units. The target is an adjusted debit margin of around 6.5% and positive free cash flow for the full year. As usual, cash generation will be heavily weighted toward the second half, and we therefore continue to anticipate around 1.5 billion of free cash flow consumption in H1 and a strong recovery in the second half. Finally, regarding capital structure, the Group issued its first green hybrid bond last month with a nominal amount of 700 million euros. This transaction will enable Alstom to continue financing both capital expenditure and operating expenditures that are aligned with the European taxonomy. It also strengthened the group's liquidity position ahead of the repayment of the 700 million senior bond maturing in October this year. This concludes the presentation and we will now open the floor to your questions. Thank you.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Delphine Brault from Otto BHF. Please go ahead.