Through AiM – “Alstom in Motion” strategy, the company’s objective is to become the leader in green and smart mobility solutions by 2023.
The commercial and operational objectives will support Alstom to become number one or two on each of its market, lead in sustainable and smart mobility solutions, achieve a margin and free cash flow level among the best of its sector, and further improve its social and environmental impact.
The AiM strategy is based on several pillars which should lead to an estimated market growth on 3% and to place Alstom as the global innovative player for a sustainable and smart mobility.
“We now will leverage innovation and efficiency in our portfolio of products and services to expand our presence in all our fields of activity and become the leader in green and smart mobility solutions,” said Henri Poupart-Lafarge, Alstom CEO.
Through the pillar “growth by offering greater value to its customers”, company’s ambitions are to consolidate its positioning in each its activities and geographies: Alstom intends to become the “undisputed leader in services”, on signalling market, the company want to gain market and product leadership thanks to the digitalisation of its solution, and on rolling stock segment, the company will expand its leadership thanks to the geographical expansion of its new product platforms.
“Innovation in smarter and greener mobility solutions” is another pillar based on green and smart mobility, encouraged by customers’ and passengers’ expectations, which will lead to a transformation of the market. Here, Alstom has set six priority areas such as green traction and energy performance; road electromobility; eco-design and manufacturing; autonomous train; data driven rail mobility for more connected products and services; and multimodality and flow management. To achieve its leadership on this segment, Alstom will rely on sustained R&D investments and constant in percentage of sales.
On the increase of the “operational efficiency”, powered by digital, Alstom will capitalize on its worldwide presence and its industrial and engineering capacities in emerging markets, as well as on the gain in competitiveness of its new generation of products and services. The group will also implement additional levers, in particular the digital transformation of all its value chain, optimising sites and projects. Alstom’s ambition is to achieve a margin and free cash flow level among the best of its sector.
“One Alstom Team: an agile, inclusive and responsible culture” is another pillar for which Alstom will pursue its environmental and social responsibility commitments at a mid-term horizon. Among the objectives targeted for 2025, energy consumption of solutions offered to its clients should be reduced by 25% and 100% of the group electricity supply should come from renewables. 100% of its suppliers should be monitored or assessed on CSR and E&C standards. Alstom employees share together the same culture, with strong local actions and ethical commitment. Following a consultation of all its employees, Alstom will change its brand signature, to become “mobility by nature” in order to reaffirm its leadership in mobility.
Company’s financial objectives up to 2022-2023 will see an average annual growth rate of sales around 5%, overperforming the estimated growth for the market and the adjusted EBIT margin should reach around 9%. By 2023, the conversion from net income to free cash flow should be above 80% driven by capex stabilisation to around 2% of sales in the mid-term, and mid-term stability of the working capital.
Overperforming the market, the Group achieved its objectives of sales organic growth and achieved an average growth of 5.5% by year between 2015/16 and 2018/19. It released an adjusted EBIT margin of 7.1% in 2018/19 (+1.8 pts vs 2015/16). The free cash flow also increased over the period with EUR 153 million in 2018/19 versus EUR 326 million in 2015/16. The group has a solid balance sheet with a net cash amounting to EUR 2,325 million at March 31 2019, before the proposed dividend distribution of EUR 5.5 Euros/share. Alstom can also count on a record backlog of EUR 40.5 billion at the end of March 2019, offering strong visibility for the coming years.
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