Alstom sees sales fall 5% as a result of poor recession orders
ENGINEERING group Alstom, which supports thousands of jobs in the Midlands, has seen a 5% fall in sales during the 2011/12 financial year as the lingering effects of the recession continue to affect performance.
The group said sales stood at £17.4bn (€19.9bn) for the year and the fall had been sharpest in its Thermal Power division, where sales were down 10% and in Transport, down 8%.
It said the situation reflected the trough in orders taken in 2009 when the economic crisis was at its worst.
Some divisions did see an uplift – sales in Renewable Power were up 4% compared to last year, while Grid registered a turnover of £3.21bn (€4bn). Income from operations amounted to £1,125m (€1,406m), which compared with €1,570m last year.
Patrick Kron, Alstom’s chairman and chief executive, said: “The group achieved a solid commercial performance, illustrated by a book-to-bill ratio above 1 for every quarter of the fiscal year and by a strong level of orders in the fourth quarter, the highest for the Power Sectors and for Transport since 2008/09.
“Sales gradually recovered throughout the year. Looking ahead, given our positioning in our four businesses, we are expecting to maintain a sound level of orders. On this basis, sales should increase by more than 5% per year over the next three years while operating margin should gradually improve to around 8% in March 2015.”
The strength of the economies in the emerging markets could well determine if this strategy is successful.
The company attributes around 60% of its business to orders from such areas.
Closer to home, over the period, Grid booked a strategic HVDC (High Voltage Direct Current) project in Sweden utilising new HVDC technology. Developed in Stafford, the VSC technology will be used in Alstom’s multi-million pound contract from the Swedish state-owned utility Svenska Kraftnät. Alstom will design and manufacture the equipment for the 1440 megawatt South-West HVDC Link Project.
Alstom is also a key partner of the Tramlink Nottingham Consortium, which was awarded the Nottingham Express Transit Phase Two Contract by Nottingham City Council – a high-profile 23-year contract to provide two new lines and expand the existing network by 17.5 km in Nottingham.
