Alstom: Good commercial momentum but decline in margin in H1 – Boursorama

PARIS (Reuters) – Alstom on Wednesday reported an increase in its turnover and order book in the first half of its 2021-2022 fiscal year, driven by good commercial momentum, even if its operating margin adjusted has declined significantly.

Order intake reached 9.72 billion euros over the period, bringing the order book to 76.36 billion euros, and sales increased 14% on a pro forma basis to 7.44 billion euros.

Alstom, which acquired Bombardier’s rail business in January for 5.5 billion euros, reports strong demand in Europe which alone totals 6.3 billion euros in orders.

Adjusted operating income rose to 335 million euros, against 263 million in the same period a year earlier, showing a margin of 4.5%, against 7.5% a year ago.

The margin is “impacted by sales of the non-performing order book and by the gradual acceleration of sales during the year,” Alstom said in a statement.

Free cash flow was also negative by 1.46 billion euros, due to the anticipated unfavorable non-recurring change in working capital requirement.

At the beginning of July, Alstom had warned that its free cash flow should come out negative to the tune of 1.6-1.9 billion euros in the first half.

The transport engineering group expects positive free cash flow in the second half of the year and a gradual recovery of adjusted operating income by the end of the fiscal year ended at the end of March.

The ramp-up of production should also allow sales to increase in the second half of the year compared to the first half of the year, Alstom said.

(Report Blandine Hénault, edited by Jean-Stéphane Brosse)