The company seeks to reduce its debt by 2 billion by 2025 and will appoint Philippe Petitcolin as new president of the board
MADRID, 15 Nov. (EUROPA PRESS) –
The French infrastructure and transport group Alstom has announced a series of measures to reduce leverage and strengthen the company’s balance sheet, including cutting around 1,500 jobs, in addition to the sale of assets and the possibility of carrying out an expansion of capital.
The French company presented its accounts this Wednesday for the first half of its fiscal year, in which it recorded an attributable net profit of 1 million euros, after losses of 21 million recorded a year earlier, while sales increased by 4 .9%, up to 8,443 million.
However, as Alstom had warned in October, the company recorded a negative free cash flow of 1,119 million euros in the first half of its fiscal year.
“Alstom’s negative free cash flow during this first half is a clear call for change,” said Henri Poupart-Lafarge, chairman and CEO of Alstom, who admitted that, although demand remains sustained, business performance was weak.
In this way, the executive announced “a comprehensive action plan” to maintain the rating of its debt within investment grade and ensure medium-term objectives.
Among the measures planned to reduce leverage and secure medium-term earnings and cash targets, Alstom will undertake a workforce adjustment that will see the elimination of around 1,500 full-time jobs to reduce overall costs.
Furthermore, in order to maintain a strong and sustainable investment grade rating, Alstom will seek to strengthen the group’s balance sheet and aims to reduce its net debt by €2 billion by March 2025.
In this sense, the company has indicated that Alstom’s reference shareholders “support this plan” and are working closely with management to execute it quickly.
Thus, depending on market conditions, Alstom is considering a series of transactions to accelerate its deleveraging, including the asset disposal program already underway, which is expected to generate revenues of between €500 and €1 billion.
Likewise, the company is considering carrying out share issues and similar issues, including the refinancing of certain assets, as well as the possibility of carrying out a capital increase with preferential rights for shareholders.
In any case, the company has stressed that it remains flexible regarding the sequencing and adjustment of said instruments.
On the other hand, in terms of liquidity, Alstom has reported that on October 31 it signed a new line of 2,250 million euros with a first-class international bank as a further step to demonstrate its financial flexibility.
“Alstom’s top priority is to support credit metrics and strengthen the group’s foundations to create lasting value for shareholders,” the company concluded.
On the other hand, the French company has announced that at the next general meeting of shareholders, which will be held in July 2024, the board will propose Philippe Petitcolin, former CEO of Safran, as a member of the board and then as president of the board, which will mean that Henri Poupart-Lafarge will cease to be president of the board and will maintain the position of CEO.
Furthermore, as part of the third phase of the roadmap for the merger with Bombardier, the group will undertake a simplification of the operational organization in the context of the announced workforce reduction.
Regarding the consequences of the cash outflow recorded in the first half of the year, the company has launched a review of the employee incentive plan to include the condition of achieving cash-related objectives for the 28,000 employees who benefit from the plan.??
