Alstom Company

Company Profile

Overview

Alstom serves the power generation market through its Power Sectors, and the rail transport market through its Transport Sector. Alstom designs, supplies and services a complete range of technologically advanced products and systems for its customers, and possesses a unique expertise in systems integration and through-life maintenance and service. In fi scal year 2008/09, orders amounted to €24.6 billion and sales to €18.7 billion. On 31 March 2009, the backlog amounted to €45.7 billion. Alstom believes the power and transport markets in which the Group operates are sound, offering: solid long-term growth prospects based on customers’ needs to expand essential infrastructure systems in developing economies and to replace or modernise them in the developed world; and attractive opportunities to serve the existing installed base.  Alstom believes it can capitalise on its long-standing expertise in these two markets to achieve competitive differentiation. Alstom is strategically well positioned for the following reasons: Alstom has global reach, with a presence in around 70 countries  worldwide; Alstom is a recognised technology leader in most of its fields of  activity, providing best-in-class technology; and the Group benefits from one of the largest installed bases of equipment in power generation and rolling stock, which enables it to develop its service activities.  An international network coordinates the presence of Alstom throughout the world. This network supports the Sectors in their business development and sales. On 31 March 2009, Alstom had a total of approximately 81,500 employees worldwide.

History

Year	Points of note
1928	The beginning of Alsthom was from the merger of Thomson-Houston and Société Alsacienne de Constructions Mécaniques (SACM), with its 1st factory in Belfort.
1932	Alsthom acquires Constructions Electriques de France, Tarbes, a manufacturer of electric locomotives as well as electrical and hydraulic equipment. Transport thus becomes a part of Alsthom
1969	Compagnie Générale d'Electricité (CGE) becomes majority shareholder of Alsthom
1976	The Group merges with Chantiers de l’Atlantique to become Alsthom Atlantique, bringing Marine into Alsthom’s portfolio.
1977	Alsthom constructs the 1st 1300MW generator set for the Paluel power station which set a world record with an output of 1500 MW.
1978	The first TGV is delivered to SNCF. The TGV went on to break world rail speed records in 1981 (380 km/h) and 1990 (515,3 km/h ), and achieved the world endurance record for high speed train lines in 2001, travelling from Calais to Marseille (1067.2km) in 3 hours and 29 mins.
1986	The Alsthom Belfort site receives an order from EDF for the largest gas turbine in the world (212MW)
1989	GEC ALSTHOM is formed from the merger of the power and transport activities of Compagnie Générale d'Electricité (CGE) and the UK GEC. France’s market was no longer sufficient, so the merger was to enable ALSTHOM to export into Europe.
1994	LHB Salzgitter joins GEC Alsthom
1995	Outstanding shares in MAN Energie (steam turbines) are acquired
1998	GEC Alsthom acquired Cegelec (electrical contracting) June: the Group is introduced on to the Paris Stock Exchange and changes its name from GEC ALSTHOM to ALSTOM. GEC and Alcatel sell off part of their stakes in the capital (23.6% each).
1998	ALSTOM acquires Sasib Railways (Italy), which also adds the former General Railway Signal (USA)
1999	ALSTOM acquires the Canadian Télécité Inc., a worldwide Centre of Excellence in passenger information and security solutions ALSTOM and ABB merge their energy businesses in a 50-50 joint company known as ABB ALSTOM POWER. In a parallel move, ALSTOM sells its heavy duty gas turbine business to General Electric.
2000	ALSTOM acquires ABB’s share in ABB ALSTOM POWER. ALSTOM acquires a 51% stake in FIAT FERROVIARIA, the Italian rail manufacturer and world leader in tilting technology.
2001	ALSTOM launches ALSTOM Power Rentals a fast track emergency and temporary power rental provider
2002	ALSTOM Power Rentals first contract supplies 20MW of electrical power facility to Jaffna in northern Sri Lanka
2003	ALSTOM supplies the highest capacity automated metro in the world to Singapore
2004	January: ALSTOM sells its T&D activities to Areva. The French State takes up a 21% stake in ALSTOM’s capital to support the recovery of the company. ALSTOM delivers the Queen Mary 2, the world’s largest cruise liner, to Cunard.
2004	ALSTOM sells ALSTOM Power Rentals to APR LLC later becoming APR Energy LLC
2005	ALSTOM sells its Power Conversion activity to Barclays Private Equity
2005/2006	GT 24/26 turbines achieve 1.5 million operating hours and major sales to countries such as Italy, Germany, Spain and Thailand demonstrating the Group’s return to the gas turbine market with a technologically advanced product.
2006	ALSTOM sells its Marine Division to the Norwegian group Aker Yards. ALSTOM commits itself to keeping 25% of the shares until 2010. On 27 April, ALSTOM signs a cooperation framework agreement with Bouygues, the French conglomerate, for the purchase of the 21% stake in ALSTOM that the French government held. Later in the year, Bouygues increase its shareholding to 24%. ALSTOM launches major clean coal technology initiative with the EU.
2007	Following a new Graphic Chart, the Group name is now written "Alstom", with the exception of the legal entities which are written with ALSTOM in capitals, e.g. ALSTOM S.A. April: on a test run in France, TGV Est set the world speed record for rail vehicles of 574.8 km/h 25th of June: Acquired the Spanish wind turbine manufacturer Ecotècnia, now Alstom Ecotècnia
2009	Alstom acquired 25%+1 share of Russian Transmashholding.

MAIN EVENTS OF FISCAL YEAR 2008/09

Alstom pursues its growth and improves once again its profitability.

In fiscal year 2008/09, Alstom achieved very good results, driven by commercial successes on the dynamic power and transport markets and by an overall proper execution of the projects in the backlog. The Group set a new record in orders intake at €24.6 billion, a 5% increase on an actual basis (6% on an organic basis) compared to last year. Fuelled by these commercial successes, the backlog reached €45.7 billion at the end of March 2009 (an increase of 16% on an actual and an organic basis), the equivalent of 29 months of sales. Sales also grew to €18.7 billion, representing an annual increase of 11% on an actual basis (10% on an organic basis) as a result of the execution of the Group’s large backlog. Continuously improving since 2004/05, operating income increased by 19% at €1,536 million during fi scal year 2008/09 (18% on an organic basis). Translating both the quality of the orders received and the attention paid to project execution, operating margin rose to 8.2%\\ (7.7% in 2007/08).

During fiscal year 2008/09, net profit (Group share) after a 25% tax expense, increased 30% at €1,109 million due to an improved operational performance and a turned positive financial income. Earnings per share (basic) reached €3.9 versus €3.0 last year. During the past fiscal year, Alstom generated €1,479 million of free cash flow, a notable performance – including the high capital expenditure programmes launched in 2007/08 – which results from a good operational performance and a favourable evolution of the Group’s working capital.

A SECURED BACKLOG IN VOLUME AND IN QUALITY

At 31 March 2009, the Group backlog reached €45.7 billion, represent ing 29 months of sales. The high volume and quality of this backlog give Alstom strong visibility to prepare for and face, if necessary, an extended slowdown in demand.  State-owned and large utilities account today for 80% of Alstom Power Sectors customer base, and 90% of Transport Sector’s. This proportion\ should minimise the Group’s sensitivity to financial risks impacting its customer base. In this respect, no project cancellation or deferral has been recorded so far.

A SOUND FINANCIAL PERFORMANCE

At the end of fiscal year 2008/09, Alstom showed a steady liquidity position with net cash strengthened at €2.1 billion and gross cash amounting to €2.9 billion, after the reimbursement, during the period either at maturity or in anticipation of €559 million of bonds. As of 31 March 2009, the total outstanding bonds amounted to €275 million in nominal value (vs. €834 million at 31 March 2008). In terms of bonds and guarantees, Alstom also benefits from a €8 billion committed syndicated line and €13.5 billion of bilateral lines (€2.4 billion and €5.1 billion being respectively undrawn).

Preparing the future

INITIATIVES TAKEN IN AN UNCERTAIN GLOBAL CONTEXT

Uncertainties created by the recent economic downturn have prompted Alstom to take the following specific actions: a programme focusing on the strict control of selling and  administrative expenses was set up in December 2008, and actions deployed at the Group’s unit level. Short-term specific actions have also been taken to limit IT, travel and consulting expenses. Lastly, specific attention will continue to be paid to the efficiency of support functions; future capital expenditures will be strictly prioritised, without questioning the ongoing major projects aiming at developing and reinforcing the industrial base in key markets (Wuhan Boiler Company new factory in China, Chattanooga steam turbines facility in the United States or Elblag foundry in Poland).

STREAMLINING OF POWER ORGANISATION

In March 2009, Alstom announced a reorganisation of its activities related to power generation consisting in the merger of the two Sectors, Power Systems (plants, equipments and retrofit) and Power Service (after-sales, from service to renovation and spare parts). The set-up of a single Power Sector will improve the commercial performance of the Group and optimise its engineering and production means. This new Sector will be organised around six activities (Thermal Systems, Thermal Products, Thermal Services, Hydro, Wind, and Energy Management).

A strong and optimised industrial base

The Group’s capital expenditures for the fiscal year 2008/09 (excluding capitalised development costs) amounted to €499 million, an increase of 33% year on year. Market oriented, major ongoing Power capital expenditure projects include: to address the American market, the construction of a new facility in Chattanooga (Tennessee, United States of America) to manufacture steam turbines for nuclear and thermal applications, gas turbines, generators and related equipments; to address the Chinese and export markets, the construction in Wuhan city outskirts (Hubei Province, China) of a new facility following the acquisition of 51% of Wuhan Boiler Company in 2007.  This factory will be Alstom’s largest utility boilers manufacturing site and should be operational by the end of 2009; the building of a foundry in Elblag (Poland), aiming at increasing the  production capacity of key components for turbines. In Transport Sector, the capital expenditure programmes were focused on the upgrade and expansion of the European manufacturing base for rolling stock (very high speed trains, tramways and components). The main investments have been made in France, Germany, Italy and Poland.

A Reinforced Corporate Responsibility

A CARING HUMAN RESOURCES MANAGEMENT

During fiscal year 2008-09, the Group continued to drive its headcount increase. At the end of March 2009, total headcount reached 81,500 people, including more than 11,000 new recruitments over the period to support the Group’s development on key markets and to ensure the execution of its growing backlog. Alstom focused its recruitment particularly in Europe (57%) and in Asia/Pacific (22%). This policy may be adapted pending future market development. Care for people remained a key factor as the Group further developed its training programmes. The number of “Alstom University” training sessions delivered has increased by 60% compared to last year, and five “Alstom University” regional campuses are operational around the world.

Board of directors

          Board of Directors (at 31^st March 2009)

1.       Pascal Colombani.

          Associate director of AT Kearney

          Bouygues SA SA is represented by

2.       Philippe Marien,

          Chief financial Officer of Bouygues

3.       Jean-Paul Bechat

          Chief Executive Officer of Safian

4.       Jean-Martin Folz

          Member of the Supervisory Board of Carrefour and Axa

5.       Canadace Beinecke

          Chair of Hughes Hubbard & Read LLP

6.       Patrick Kron

          Chairman and Chief Executive Officer of Alstom

7.       Klaus Mangold

          Member of the Board of Directors of the Chubb Corporation

8.       James William Leng

          Chairman of Corus Group

9.       Alan Thomson

          Non-executive Director of Johnson Matthey

10.     Georges Chodron De Courcel

          Chief Operating Officer of BNP Paribas

11.     Gerard Hauser

          Chairman and Chief Executive Officer of Nexans

12.     Olivier Bouygues

          Deputy Chief Executive Officer of Bouygues

Key Figures – Alstom Worldwide (2009-10)

•        Orders: Euro 14.9 billion

•        Sales: Euro 19.7 billion (+5%)

•        Operating Results: Euro 1,779 million (+16%)

•        Net Result: Euro 1, 217 million (+10 %)

Generated through Alstom made equipment”

A world leader in energy and rail transport infrastructure, Alstom designs, supplies and services a range of technologically advanced products and systems for its customers and possesses a unique expertise in systems integration and through-life maintenance and service. With a presence in 70 countries, Alstom employs around 76,500 people globally.

Alstom India: Overview

Alstom has been associated with India’s progress for over a century and has been a part of the country’s economic history. As new economic reforms shape a globally resurgent India, Alstom helps to provide the country the much-needed technological expertise. With a strong focus and commitment dovetailed with a passion for excellence, Alstom looks forward to contributing to India’s future growth.

Alstom in India has full capabilities in engineering, manufacturing, project management and supply of power generation equipment. It also has a significant presence in the transport sector in India providing railway equipment and technology solutions. Alstom combines local presence and knowledge with global resources to deliver world-class services and solutions that meet each project’s needs. APIL is listed both in BSE and NSE with one-third of its equity share held by public.

Alstom Hydro in India – A pace setter

Alstom is involved in the largest hydro project of India, the 2000 MW Subansiri Lower.

Strategic Relationships in India

Alstom in India has made strategic relationships with strong local players to bring in frontline technologies to enhance the quality and efficiency of the power sector.

Alstom and Bharat Forge Ltd (BFL) set up a joint venture (JV) – 2009

The JV will manufacture 300-800 MW subcritical and supercritical equipments with an annual capacity of 5000 MW. The arrangement between Alstom and Bharat Forge involves setting up of two JV companies – one for manufacturing of steam turbine and generators and the other for manufacturing of all the auxiliaries.

Alstom and Bharat Heavy Engineering Limited (BHEL) tie-up - 2005

Alstom and BHEL have entered into a 15-year agreement for manufacture, supply and technology transfer for super critical boilers. The tie-up between the two companies on coal fired boilers using super critical technology supports large capacity expansion of power generation in the country. This agreement will provide the energy sector in India with the latest in clean coal technologies.

Alstom and Infosys R&D Centre – Since 2005

Alstom teamed up with Infosys, a global consulting and IT services firm to set up an R&D centre at the Infosys campus in Bengalaru. Created on the strength of a multi-year relationship, the R&D centre provides engineering solutions that give Alstom a competitive edge, thanks to rapid design and deployment, thereby reducing time-to-market. These solutions, by using new materials, increase the life span and efficiency of mechanical components, thus improving performance and cost effectiveness.

NTPC Alstom Power Service Limited (NASL) - 1999

This 50:50 joint venture of Alstom and National Thermal Power Corporation (NTPC) undertakes renovation, modernization, retrofit and refurbishment of old and aging power plants. NASL gets full support from Alstom Global Technology Centers located in Europe, USA and India.

Products/Solutions Offered in India

For Coal and Gas-fired Power Plants:

•        Turnkey Solutions

•        Steam Turbines

•        Gas Turbines

•        Turbo-generators

•        Boilers

•        Heat Recovery Steam Generators

•        Environment Control Systems

•        Boiler and Steam Turbine Retrofits

Our main capabilities are:

•        Overhaul/Retrofits

•        Upgrades (parts & components)

•        Technical Services (diagnostics)

•        Restoration/Replacement and Repair of Parts

•        Field Service

•        Long Term Service Agreement (LTSA) (including O&M)

For Hydro Power Plants:

•        Hydro Turbines & Generators for all sizes

•        Hydro Mechanical Equipment and lifting equipment

•        Pump Turbines and Generators Motors (fix and variable speed)

•        Control and Protection Systems

•        Refurbishments and upgrade

•        Small hydro

For Process Industries:

•        Air Pollution Control Systems

•        Industrial Boilers

Thermal Services: Complete Range

Backed with global support from dedicated product lead centres that have local expertise in India ensure that our customer requirements are met with a fast response and innovative solutions. The wider Thermal Service organization provides comprehensive support, ensuring that Alstom’s global expertise is available in India. This covers the whole plant and all technologies including gas turbines, steam turbines, generators, boilers, balance of plant, I&C and electrical equipment, and environmental equipment.

Service Workshop

With the expansion of the workshop, Alstom Thermal Service will now double its service capabilities. It pioneers the introduction of technologically-advanced equipment for its operations. With this development, Alstom can meet customer requirements adequately. It is the only company in the private sector to have a “high speed balancing facility”.

Our integrated value packages are designed to provide our customers with

•        Highest plant availability and reliability

•        Highest plant efficiency and capacity

•        Low production costs

•        Environment compatibility

•        Ability to dispatch generated power

Transport

Alstom's Transport sector offers the most comprehensive and technologically advanced range of products and services in the rail transport segment. This sector has 32 major production and service sites around the world.

Against a background of increasing competition, Alstom transport tried to maintain its technological advantage. However, although essential, technical performance on its own is not enough. The added value of a technology is the service it provides to passengers.

Alstom Transport’s R&D strategy is based in putting the customer in the heart of innovation while capitalizing on its technological expertise. In India, the company’s transport division has a plant in Coimbatore and a software centre in Bengaluru. The Delhi Metro Rail Corporation (DMRC) and Bangalore Metro Rail Corporation Limited (BMRCL) are among the company's prestigious clients in India. The company provides signaling systems and Automatic Train Control System for rolling stock to DMRC. The group has provided state-of-the-art signaling solution with automated train operation to DMRC. The Indian Railways also sources Linke - Hoffman - Busch (LHB) coaches’ technology from Alstom. With public transport going for a major overhaul in India and metro rail emerging as the preferred solution, Alstom transport has a great potential for growth.

Major References

Hydro Power Plants

•        Illarionas – 2 x 77 MW – Greece – under execution

•        Lower Jurala – 6 x 40 MW for APGENCO – under execution

•        Nam Ngum 2 Hydro Mechanical, Lao PDR – under execution

•        Bujagali HEP – 5 x 51 MW – Uganda – under execution

•        Uri Stage II – 4 x 60 MW for NHPC – under execution

•        Chamera Stage III – 3 x 77 MW for NHPC - under execution

•        Chuzachen- 2 x 55 MW for GATI Infrastructure - under execution

•        Subansiri 8 x 250 MW for NHPC - under execution

•        Gurara Water Transfer Project Hydro – Mechanical Works – Nigeria

•        Omkareshwar Hydromechanical for NHDC

•        Dulhasti 3 x 130 MW for NHPC

•        Vishnuprayag 4 x 100 MW for Jaiprakash Power Ventures Ltd.

•        Dhauliganga 4 x 70 MW for NHPC

•        Maithon R&M 1 x 20 MW for DVC

•        Naphta Jhakri 6 x 250 MW for NJPC

•        Gangrel 4 x 2.5 MW for CSEB

•        Chamera II - 3 x 100 MW for NHPC

•        Koyna IV - 4 x 250 MW for GOMID

•        Uri 4 x 120 MW for NHPC

•        Chamera I - 3 x 180 MW for NHPC

Steam Power Plants

•        Neyveli 250 MW turnkey for ST-CMS

•        Talcher 2 x 500 MW STG package for NTPC

•        Rihand I - 2 x 500 MW for NTPC

•        Nashik 2 x 140 MW turnkey for MSEB

Gas Power Plants

•        Utran 370 MW CCPP for GSECL

•        Gautami 469 MW CCPP for GVK

•        Jegurupadu Phase II - 228 MW for GVK

•        Hazira 156 MW CCPP for GSEG

•        Jegurupadu Phase I - 235 MW for GVK

•        Gandhar 650 MW CCPP for NTPC

•        Kawas 645 MW CCPP for NTPC

•        Anta 413 MW CCPP for NTPC

Boilers & Environment

•        Tallawara: 1 Triple Pressure Reheat HRSG for 400 MW CCPP – under execution.

 •       Sohar Alumina: 4 x Dual Pressure fired HRSG for 1100 MW CCPP – under execution.

•        Fujaira II: 5 x Single Pressure Heavily Fired HRSG for 2000 MW CCPP – under execution.

•        TNEB: 1 x Triple Pressure HRSG for 93 MW CCPP – under execution

•        Regency Power: 1 x Dual Pressure HRSG for 58 MW CCPP

•        Tata Power: 2 x 230 TPH BFG/COG fired boiler – under execution

•        Bokaro Power: 1 x 300 TPH PF Boiler – under execution

•        Akrimota 2 x 125 MW CFBC boilers for GMDC

•        Talcher 4 x 500 MW electro-static precipitators for NTPC

•        Toranagallu 100 MW Corex/BFG fired boiler for Jindal

•        Budge Budge: 2 x 250 MW PC Boilers for CESC

•        PSEB Bhatinda: R&M of 2 x 120 MW

•        Skopje: 1 x Dual Pressure, unfired HRSG for 220 MW CCPP – under execution.

Services

•        Turbine rotor repairs at TNEB, APGENCO, NTPC, MSPGCL, Nasik, etc.

•        Nuclear rotor repairs for NPCIL

•        Steam path audit at TNEB with local expertise

•        Generator exciter repair for 500 MW NTPC, Rihand

•        Generator stator, core repairs at NTPC Dadri, Korba, etc.

•        Boiler performance & modernization at IISCO

•        Mill upgrades at CSEB Korba, DVC

•        ESP upgrades for PSEB, NTPC, MSPGCL

•        Overseas Boiler & ESP upgrades in SEA countries

•        AMCS on TG & Boiler island

•        O&M (LTSA) utran for 15 yrs.

Transport

•        24 air conditioned steel passenger coaches for Indian Railways

•        Supply of 750 Remote-fed Audio Frequency Track Circuits (AFTC) to Mumbai Rail Vikas.

Corporation Limited (MRVC) - under execution

•        Delhi Metro Phase II: Signalling & Telecom systems and electrical equipment & services for Rolling Stock

•        Delhi Metro: Signaling and Telecom systems and electrical equipments and services for Rolling Stock

•        Traction drives for Delhi Metro for DMRC (via MELCO)

Good Governance:

Alstom has been listed on the Paris stock exchange since 199* and applies strict corporate governance rules, particularly with respect to the independence of Board Directors and the missions of specialised committees. 

Effective Internal Control:

A robust and broad internal control system encompasses all group Sectors and functions.  By enabling quicker, more reliable and more competitive operations, a sound internal control system should provide reasonable assurance that laws and regulations are complied with at all times, information and data including financial information are reliable and that operations are completed in an optimal manner.