Alstom, the French railway manufacturer, publishes its financial results on Wednesday May 8, 2024. In November 2023, it announced a debt reduction plan. When we look at the glass half full, we see turnover increasing to reach 17.6 billion euros, almost 19 billion new contracts over one year. But when we look at the glass half empty, we see a profit down to 44 million euros, or 250 million less than the previous year. “We are satisfied with our results. They bear witness to all the efforts that have been made in the last period to turn the group around.”declares Henri Poupart-Lafarge.
In 2021, Alstom buys its Canadian competitor Bombardier. “Since the integration of Bombardier, we have increased our train production by 40% in the last three years, compared to the combination of the two groups”says Henri Poupart-Lafarge. “In this period which has been complex, from a geostrategic point of view, from a Covid point of view, therefore from a health point of view, few industries can say that they have increased their production capacity of 40% during this period”he insists.
-: How do you explain these financial results?
Henri Poupart-Lafarge : First of all, we are satisfied with our results. They demonstrate the commitment of all our employees. They bear witness to all the efforts that have been made in the last period to turn the group around. And they are in line with our estimates, as you said, growing sales, operating income increasing by 17%.
“A certain number of charges linked to the integration of Bombardier, to the launch of a certain number of industrial plans, have burdened costs below the operational pace and therefore weighed on the net result.”
Henri Poupart-Lafarge-
In the fall of 2023, you launched a two billion euro debt reduction plan. Where are you today?
We had announced a two billion euro debt reduction plan, taking into account the efforts that will be made to generate cash flow through our operations. And we announced this plan which includes, on the one hand, asset sales that we have carried out. We have entered into an agreement for the sale of signage in the United States. It is not completely done, but it is signed, it is safe. And we therefore announced the issuance of two types of financial instruments, including bonds on the one hand, and capital on the other. This is what we announced and the total amount is two billion, as we said last November.
This capital increase that you are announcing will be of the order of how much ?
We have precisely given its figure, it will be of the order of one billion euros.
This restructuring undertaken also has a social cost. You have already announced 1 500 administrative job cuts, including 300 in France. Do you plan to stop there or will you go further?
So we initiated this efficiency plan mainly on structures.
“We are now entering a phase of global industrial optimization where we will optimize the capacity of our various factories around the world.”
Henri Poupart-Lafarge-
But this will happen over time and this is normal from the moment we have an activity which can go up or down.
Can we imagine further job cuts in the future?
No, that means that we are continually adjusting our production capacities around the world, as we have always done and as we will continue to do. There are no job cuts planned at this time.
Your order book is full, with a record of 92 billion euros, but you are struggling to honor it. The TGVs were to be delivered before the Olympics, this will not be before the second half of 2025. The new generation RERs began to be delivered in the fall of 2023, two years late. What happened ?
First, I would like to emphasize that we are obviously doing everything we can to deliver our trains as quickly as possible.
“We are at the time of the Olympic Games, we have delivered a lot of metros, in particular to enable the extension of line 14.”
Henri Poupart-Lafarge-
We delivered, as you have just recalled, the RER E and to allow the opening of the extension of the line, also trams, so that line 3 was also extended.
We are late. These are eminently complex projects. You know that the last time we developed a new TGV, moreover jointly with the SNCF, these were co-development projects with the RATP or with the SNCF, the last time we did it, it was in the 90s. This shows the effort of innovation which belongs to this type of train. And so with the SNCF, of course, we want to make the most innovative, most economical, most technological train possible. This is a generation that will last for the next 50 years.
And the last few years have been a bit complex, Covid, supply chains, action, inflation… But beyond that, once again, it’s a co-development between the State and us. This TGV is a fantastic TGV, there will be 15% less energy consumption than the previous generation and 15% more seats. Instead, it will consume 30% less energy and that’s the main thing. All these technological innovations which will allow improved comfort for passengers and better efficiency for the SNCF.
Haven’t your eyes been bigger than your stomach with this order book that you’re struggling to fulfill on time?
No, we have a book stabilization policy. Moreover, as we have announced, we want to be more and more selective to be sure that we are able to deliver our trains properly. I believe that the entire railway industry has experienced very strong growth.
I believe that there are quite few industries that can boast, in this period which has been complex once again, from a geostrategic point of view, from a Covid point of view, therefore from a From a health perspective, few industries can say that they increased their production capacity by 40% during this period.
The integration of Bombardier is complete, it was long and difficult. You have reached critical mass, who is your main competitor today? The German Siemens who won the first TGV line in the United States (Las Vegas, Los Angeles) or the Chinese CRRC who are winning more and more contracts in Europe and are slashing prices.
We are the only global player. That is to say that precisely, this was the strategic interest of Bombardier’s question, it is to have a critical size in each of the markets. And so we don’t have any main competitors. Everywhere we are, we encounter new competitors, different competitors. We are the only player to be on all continents, in Europe, in all countries.
Are you better than the Chinese or the Germans?
We have a unique position on the market which is that of being a player that could be called multilocal, that is to say present on all continents and in all main markets. Our competitors are only present in certain markets and therefore we encounter different competitors in each of the markets in which we operate. They meet us constantly.
The integration of Bombardier was successful, was it a good operation?
It was an excellent operation confirmed by the rail market, which is extremely buoyant and confirmed by this tendency precisely to have extremely important local markets, this need to be close to customers. So yes, a very strategic and confirmed integration and operation.
