French speed-train maker Alstom SA Tuesday reported that its third-quarter sales declined slightly from last year on a reported basis, but grew 2 percent organically. Orders also declined significantly.
Looking ahead, the company confirmed outlook for fiscal 2021 and mid-term 2022/23, supported by positive fourth-quarter commercial pipeline and mid-term rail market perspectives. Alstom shares were gaining around 4 percent in the morning trading in Paris.
For the third quarter, sales were 2.05 billion euros, slightly down from last year’s 2.06 billion euros.
Sales grew 2 percent organically, mainly due to a ramp-up in Rolling Stock and Signalling, which compensated the anticipated decline of Systems and a decrease in Services.
Signalling sales increased 10 percent and Rolling Stock sales grew 9 percent, both organically.
Systems anticipated declined 23 percent on an organic basis is due notably to contracts nearly completed in Middle-East. Services, impacted by Covid-19, show a decrease at 7 percent organic.
Alstom recorded 1.84 billion euros of orders in the third quarter, sharply lower than 3.56 billion euros in the prior year that was notably high with large orders.
The company noted that Europe accounted for the majority of its orders including one large metro system contract in Toulouse worth more than 470 million euros. It also included large rolling stock contracts with the supply of up to 30 Metropolis trains in Romania and 64 low-floor tramways in Germany.
Orders in Signalling and Services were positive.
The backlog as of December 31, 2020 reached 40.1 billion euros.
Going ahead, for fiscal year 2021, the company expects sales between 7.6 billion euros and 7.9 billion euros, and an adjusted EBIT margin in the 7.7 percent – 8.0 percent range.
Alstom noted that the Covid-19 crisis is negatively affecting its financial performance for fiscal 2021, yet it is expecting a strong pipeline for second half and observed a solid production pick-up during the second quarter and the third quarter.
Further ahead, for mid-term outlook for fiscal year 2023, the company confirmed 9 percent aEBIT margin and of a conversion from net income to free cash flow above 80 percent.
In the context of the Covid-19 crisis, the objective of a 5 percent average annual growth rate over the period from 2019/20 to 2022/23 should be slightly impacted by the temporary slowdown of tender activity, the company said.
In Paris, Alstom shares were trading at 47.73 euros, up 4.44 percent.
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