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TRANSPORT

ALSTOM TRANSPORTPhilippe MELLIER

Nomura Rail SeminarSeptember 6th 2010

p. 2

Agenda: 2 sections

Railways Market

Alstom Transport Today

p. 3

Agenda

Railways Market


p. 4

• Approximately

flat

• Improvement

expected

when

employment

recovers

• Stimulus plans…• …but public debt

limiting

/

delaying

investments

• -25 to -35% throughout

2009

• Slow recovery

expected,

pre-crisis

level

by ’12-’13

2007 2008 2009 2010 2011 2012 2013 2014 20152006

Traffic Pass.km

Traffic Ton.km

Spending

Railway activities have been hit by recession less severely than other sectors…

PASSENGER

FREIGHT

INFRASTRUCTURE

(*) CAGR in EU27 over 2000-2007

TODAY

p. 5

9,7

11,2 11,012,7

25,430,0 28,1

31,7

5,9 9,1 6,7 7,6

22,124,6 27,1 29,8

21,9

24,4 26,5

29,0

0,0

20,0

40,0

60,0

80,0

100,0

Bn€

2005-07 2008-10 2011-13 2014-16

86 b€

99 b€ 99 b€111 b€

Signalling

(TIS)

RS Mainline

RS Urban

Service (TLS)

Infra (TGS)

Stimulus packages

Railway market as per UNIFE study

… and

on the long run,

Railways still growing

3% p.a. on average

Non Rolling-Stock

73 b€

+ 16 b€ over 10 years

Rolling-Stock

37 b€

+ 9 b€ over

10 years

p. 6

Large opportunities in all continents

•

Metros

in Mexico, Canada and USA

• High speed

lines in the USA

North America

• Very high speed line

in Brazil

•

Mass transit

projects in Argentina, Chile, Venezuela and Brazil

South America

•

Very high speed

lines in Saudi Arabia and in Morocco

•

Mass transit

projects in the Arabic peninsula and in Northern Africa

MEA

• Very high speed

in China

•

Locomotives, coaches and infrastructure in India

•

Metros

in China, India and Australia

Asia

Russia• Double-deck

passenger cars

• Diesel locomotives

• High-

& Very-High Speed

Europe•

Very high speed and regional trains in France, Germany, Italy

•

Mass transit projects in the UK and in the Netherlands

•

Large signalling

contracts in the UK, Netherlands and in Denmark

•

High speed

in Italy

p. 7

Historic metropolesNY, London, Paris

Imposed designsHuge contractsUrban & Suburban networks

Growing metropolesShanghai, Mexico City, Sao Paulo

Open to standard productsMedium to small contracts

Regional centresIstanbul, Rotterdam, Brussels

Flexible solution from downtown to suburbsTransport development with urban renewalOpen to outsource operations (new customers)

Customers overview

Infrastructure ownersRFF, DB Netz, RFI

Invest to boost interoperability & grow capacityOptimised use-based fees charged to operators

Passenger operatorsRailteam International Group for VHST to compete with airlinesRegional

Decentralisation of Rolling Stock investment decisionsOutsource operations ( CONNEX, ARRIVA )

Freight operatorsEurope : Market growth triggered by increased competition and investmentNorth America : Investment for efficiency, capacity & safety

URBAN MAINLINES

p. 8

Transport market drivers

• Market liberalisation, cross-boarder traffic

• Our key customers becoming integrated mobility providers

• Growth of urban populations, mainly in emerging nations

• Increasing mobility & infrastructure saturation

• Rising need for inter-modality

• Transportation habits impacted by regulation

(eg London congestion tax)

• Cars losing ground in Europe (fewer driver licences)

• Rising concerns for the environment

• Stimulus packages

Daniel Kurth

Rail Operator

Yesterday Tomorrow

Mobility Provider

Station to

station

Door to

door

Integrated Mobility Solution

Door-to-door information

Online-Ticket

Mobility BahnCard 100

Parking at station

Connexion to public transportation

Extension of portal to extended mobility offering

eTicketing and payment system

Our key

customers

becoming

integrated

mobility

providers

DB EXAMPLE

p. 9

Mature markets still significant, emerging ones growing faster

CONTEXT CHANGE

MARKETS

COMPE-

TITION

PRODUCTS

EMERGING markets• Several markets, traditionally

closed

or non-railways, are opening (Algeria, Venezuela, US, Russia…)

• New infrastructure• Standards to be

set• Demand

for localisation

& technology

transfer

2005 2016

Rest

of

world

BRIC

North

America

Western

Europe

86 b€

111 b€

MATURE markets• Debt

level issues to finance infrastructure• Package offers

including

financing

(PPP…)• Focus on renewal

/ upgrade of

existing systems• Tougher

Terms

& Conditions

manufacturers asked to carry more & more risks

p. 10

Increasing demand for “lower price” or “just-enough” solutions

PREMIUM30%

JUST ENOUGH

35%

BASIC10%

BUILD PARTNERSHIPS

with local partners to develop /

upgrade products

(eg. CNR, TMH…)

DESCOPE & LOCALISE

(Alstom’s

answer:

Traction type B, Satee)

HIGH

PRICE

LOW

PRICE

LOW

TECH

HIGH

TECH

PREMIUM LOWER PRICE25%

LIMIT of

ALSTOM BRANDCONTEXT CHANGE

MARKETS

COMPE-

TITION

PRODUCTS

LOCALISE

(Alstom’s

answer: Metropolis China,

Xiajeco, Dispen, Lapa, Katowice…)

p. 11

Tough & global competition

• TOP 3 growing but loosing market share globally• 2nd rank competitors growing gradually

(CAF, Stadler, Rotem…)• Chinese booming on domestic & export (CNR+CSR = similar to Big3)• TMH

growing fast

• Historic Customers invite more & more competitors in tenders• Possible industry concentration in the future

CONTEXT CHANGE

MARKETS

COMPE-

TITION

PRODUCTS

Sales evolution

2001 2005 2008

BT

AT

ST

CSRCNR

TMH

TOP3

20

40

b€

50%

40%

10%

37%

42%

21%

RANK 2

p. 12

Agenda

Railways Market


p. 13

Agenda

What & where we sell

How we are organised

Our achievements & results

Our strategy

Railways Market


p. 14

Agenda




Our strategy

Railways Market


p. 15

Distribution of Sales by zone

North-America12%

Asia-Pacific9%

France22%

North

Europe21%

South

Europe29%

LATAM6%

FY 2009/2010

€ 5.75 billion

p. 16

Distribution of Sales by product line

59%

Infra & TurnkeyTGS

SignallingTIS

ServiceTLS

Rolling Stock URBAN

FY 2009/2010

€ 5.75 billion

Rolling Stock MAINLINESComponents

2%

34%

19%15%

15%

13%

p. 17

Rolling Stock an extensive range of products, from tram to VHST

Tram Metro

Regional

Locomotives

Very

high

speed

Interurban

High speed

Long distance

Short distance Speed

Tram-train

URBAN

& REGIONAL

MAINLINES

p. 18

Rolling Stock : Strong position in Urban

Barcelona Dublin Lyon

Extensive knowledge

and

experience of steel

wheel and rubber

tyre metros

Paris

• Citadis selected

by 32 towns

• Over 1,250 trams ordered

• More than

1 billion passengers carried

p. 19

RS / VHS : from

French Exception to Worldwide

Leadership

South East TGV109

1981

TGV Atlantic105

1990/3

TGV “Réseau”

80

TGV Duplex

131 (+ 84 to be delivered)

Eurostar

31

1994AVE (ES)

18

TGV Thalys

27

KTX (Korea)

46

TGV East

19 equiv. (coaches)

AGV (IT)

25

1994

1996

1996

2004

2007

2011

(*) worldwide installed fleet > 300 km/h

30 years of experience

660 TGV & AGV sold

60% ww market share**

http://img219.imageshack.us/img219/4541/137402558ox.jpg

p. 20

Components

Developing components based on market needs.

• Reliable, competitive and cost attractive

• For internal integration or external customer

Standard components catalogue aims to cover 80% of market requirements

p. 21

Maintenance Transit - Freight - Equipment –

Track

Renovation Transit – Freight –

Equipment – Track

Train Life Service (TLS)

3 after-market activities

Spare

Parts & Components Repair

All makes

Covering Alstom equipments as well as non-Alstom equipments

WCML Pendolinos Maintenance in UK (Virgin)

p. 22

Transport Information Solutions (TIS)

IT for RailNon Safety Systems

Train Protection ERTMS, CBTC, Legacy

Enforce lateral signal

Manage Speed

Manage Traffic inControl Centers

Interlocking (IXL)Track Products

Manage Priority

Avoid collision

Signals

Level Crossings

Train detection

Inform & Secure Passengers

(board & station)

Assist driver

Eco Driving

Space trains

Point Machines

Develop, install, configure, integrate

a wide range of products & systems

p. 23

Electrification Electromechanical

TURNKEY PROJECT OPERATION MANAGEMENT

DESIGN –

CONSTRUCT -

MAINTAIN

Transport Global Solutions (TGS)

- System engineering

- Interfaces coordination

- Construction methods

-Testing and commissioning

Trackworks Signalling Workshop Rolling Stock ( turnkey )

C I V I L

W O R K S

O P E R A T O R

p. 24

Agenda




Our strategy

Railways Market


p. 25

Headcount

as of April 2010 : 28 853

Northern

Europe21%

Asia-

Pacific 5%

IBAM

19%

6%North

America

Southern

Europe49%

More than

28 800 employees around the

globe

p. 26

Component Unit

RS Unit

JVSanta Perpètua

Salzgitter

Charleroi

Katowice

Savigliano

Sesto

San Giovanni

FRANCE La RochelleBelfort

ValenciennesReichshoffen

Le Creusot

Ornans

Tarbes

Current footprint RS & Components : 1/2 (Europe)

p. 27

Current footprint RS & Components : 2/2 (rest of the world)

Component Unit

RS Unit

Hornell

Lapa

Coimbatore

QingdaoXi’ian

ShanghaiSATCO SATEE

JV

p. 28

Agenda




Our strategy

Railways Market


p. 29

Transport / Key figures

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10Sales (b€) 4.9 5.1 5.1 5.3 5.5 5.7 5.8Orders (b€) 4.7 5.5 5.2 5.4 7.5 8.1 5.5Backlog (b€) 14.3 14.5 14.1 15.2 17.3 19.5 19.5Income from op. 64 218 324 349 397 408 414Operating margin 1.3% 4.3% 6.3% 6.6% 7.2% 7.2% 7.2%

p. 30

Agenda




Our strategy

Railways Market


p. 31

Alstom

Transport Strategy

• Grew profitably

• Built strong expertise & leadership

• Reinforced our position as multi-specialist

• Set-up a performing organisation

• Being multi-specialist is no longer sufficient to grow profitably

• Defending our home markets is vital

• Becoming multi-geographic is a key objective

Over the last years, we successfully… …but

BE THE UNDISPUTED RAILWAY LEADER• Profitability

Leadership• Multi-specialist• Multi-geographic

AT Strategy

p. 32

NEED

to become

multi-geographic

MATURE MARKETS (OECD)

EMERGING MARKETS (BRIC or BICK or BRICUS…)

Tomorrow’s

leaders = those

able to address

all marketsTomorrow’s

leaders = those

able to address

all markets

YESTERDAY

TOMORROWAT

AT

50 b€

AT

60 b€

30 b€

60 b€

AT

p. 33

TMH-AT : a case for new ways of doing business

• A 3-year negotiation• Anti-trust authorization to be closed by Oct ’10• AT bought 25% + 1 stake in TMH equity

STRATEGIC AGREEMENT

• COO of TMH appointed by Alstom• Creation of 2 JV (50%-50%)

−

TRT = engineering−

COMPCO = components (traction)

PRINCIPLES OF COOPERATION

• High & historical reliance on Railways• 11 time zones• The largest electrified network in the world• Still a large influence on CIS area• Strategic positioning between Europe & Asia

RUSSIA : A VERY LARGE MARKET

• Contract awarded to TMH-AT−

200 EP20 Passenger locos, 1b€

(AT 450 M€)

Localisation in Russia under AT management

• Future opportunities−

Russia Fret Locos, Kazak Passenger Locos−

Azerbaijan, Ukraine…

AWARDED CONTRACTS & OPPORTUNITIES

p. 34

Conclusion

• Despite crisis and tougher business conditions, our global ambition remains unchanged

−

be the undisputed leader in the transportation business both in terms of profitability & market share

−

Keep / reach N°1 positions (HST/VHST, trams & tram-trains)

• To achieve this ambition, we need to

−

Continue to act as a multi-specialist player : boost share of non-Rolling Stock activities

−

Become a multi-geographic leader : be able to address all markets / adapt to new rules

• Key success factors to succeed

−

Customer focus

−

New organisation

: Regions-Operations intimacy

−

New ways of managing, common financial literacy

TRANSPORT

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