Activity and sustainable development report 2012/13

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

2012/13

With a presence in over one hundred countries and a broad range of products and services in the power generation, power transmission and rail transport

infrastructure markets, Alstom is at the forefront of economic, social

and environmental progress.

Alstom bases its success on the principles of ethics being rigorously

applied by its 93,000 employees who work closely with all the

Group’s stakeholders.

These shared commitments are expressed in products and services

that bear the stamp with Alstom.

3ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

CONTENTS

2 PRESENTATION

4 THE ALSTOM GROUP IN 2012/13

6 INTERVIEW WITH THE CHAIRMAN

10 GOVERNANCE

14 KEY FIGURES

18 SHAREHOLDERS

20 THE YEAR IN REVIEW

46 GETTING INVOLVED, WITH ALSTOM

46 OUR VISION

48 MEETING THE CHALLENGE OF CLIMATE CHANGE

50 MAKING ETHICS A PRIORITY

52 BRINGING INNOVATION TO SUSTAINABLE DEVELOPMENT

54 GAINING ACCESS TO TOMORROW’S TECHNOLOGY, WITH ALSTOM

54 THERMAL POWER

60 RENEWABLE POWER

66 GRID

72 TRANSPORT

78 COMMITTING TO SUSTAINABILITY, WITH ALSTOM

78 SHARING THE SAME VISION OF THE FUTURE

84 PLAYING A LARGER PART IN LOCAL LIFE

88 CREATING A MORE RESPONSIBLE WORLD, WITH ALSTOM

88 SHARING THE SAME STANDARDS AND THE SAME VALUES

94 REDUCING THE ENVIRONMENTAL FOOTPRINT

98 FINANCIAL RESULTS

4

ONE GROUP, FOUR SECTORS

Alstom is a global leader in power generation, power transmission and rail infrastructure. The Group delivers turnkey integrated power plant solutions as well as associated equipment and services for a wide variety of energy sources, thermal and renewable, and offers a wide range of solutions for power transmission. Alstom also provides the most comprehensive range of rail products and services.

Power generation Alstom offers solutions which enable its customers to generate reliable, competitive and eco-friendly power.

Rail transport ALLSTOMM TRAANSPORTAlstom Transport’s approach can be summarised in one word: fluidity. Alstom Transport develops comprehensive and sustainable railway solutions tailored to the needs of rail operators, public authorities and passengers. From rolling stock to signalling, infrastructure, services and complete turnkey systems, Alstom Transport offers the widest range of high-tech rail solutions.

Electrical grid ALLSSTOMM GRRRID Is a world leading manufacturer of engineered solutions for electrical grid applications in utility and industry settings. Alstom Grid provides integrated and customised turnkey solutions such as alternating current and direct current substations, from medium up to ultra high voltages.The solutions developed by Alstom Grid enable the efficient transmission of electricity and support the development of Smart Grids and Supergrids.

AAALSTOMMM REENEEWWABLE PPOWWWER Offers the most comprehensive range of renewable power generation solutions today: hydro power, wind power, geothermal, biomass and solar. With ocean energies, Alstom has been the leading supplier in hydro power, the largest source of renewable energy on the planet.

AALSTOMM TTHERMMAL POWWER Has the industry’s most comprehensive portfolio of thermal technologies – coal, gas, oil and nuclear – and holds leading positions in turnkey power plants, power generation equipment and air quality control services and systems.


93,000 EMPLOYEESIN OVER A HUNDRED COUNTRIES

€23.7 BILLION*

IN ORDERS BOOKED

€737 MILLION*

IN RESEARCH & DEVELOPMENT*For financial year 2012/13

South America

North America

Africa & Middle East

Europe

59%

North America

10%

20%

Asia & Oceania

outh Americou

Africa &&

8%

3%

WORKFORCE BY REGION(at 31 March 2013)


INTERVIEW WITH

PATRICK KRONCHAIRMAN AND CHIEF EXECUTIVE OFFICER

The Group booked €24 billion in orders in 2012/13, despite the unfavourable economy. Is this sales performance the primary source of your satisfaction? It is not the only one, but the high order volume last year – buil-ding on our successes from previous years – is obviously very important. This satisfactory sales performance shows that we have done good work, and I would like to thank our employees for their commitment. Owing to our very broad geographic co-verage, we have been able to make the most of growth where-ver it persisted, particularly in emerging markets. They accounted for half of all orders and two-thirds of the orders for our power generation and transmission business activities. The orders booked in 2012/13 represent more than two and a half years of business.

How does this result break down among Alstom’s various business lines?In power generation, Thermal Power scored some major successes and in particular, sold 12 gas turbines – including next-generation GT26 turbines. Service orders were also at a high level. Renewable Power won some good onshore wind contracts in Brazil and scored a particularly important vic-tory in offshore wind in France.

Grid, our power transmission business, booked record orders, with two important contracts in India and Germany for high voltage direct current transmission, a high tech area. In rail infrastructure, Transport also turned in an excellent sales performance. That includes Europe, where the market fortunately did not suffer too much from the public spending crisis, but also non-European markets like Canada and Bra-zil, where we won large contracts. In short, we have continued to work very hard across the

board, and our offer was the driver of our success.

What other key points should we remember about 2012/13?Three fi gures: the 10% rise in orders that we just mentioned; a 10% in-crease in net profi t as well; and free cash turning positive at €400 mil-lion. Sales were up too, though they did not rise as much as we expected

owing to some projects being delayed. Our operating margin has improved, largely because our project execution was ge-nerally good and we worked to optimise costs. With free cash fl ow positive again, our balance sheet was sound at the end of the fi nancial year. Shareholders’ equity stood at over €5 billion and net debt was down.

“ WE HAVE CONTINUED TO PREPARE FOR THE FUTURE. ”

We’ve developed an

ambitious social responsibility programme.

8

Last year, you focused on environmental concerns, stres-sing that they were a growth driver. Where does Alstom stand on that front? We have drawn up an ambitious social responsibility pro-gramme with a view to better anticipating the challenges that we will face tomorrow in a world with a fast-growing population, massive power and mobility needs and environ-mental problems. We built our programme around three principles: • The first is that we must constantly adapt our offer to

present the best solutions and that includes: developing technologies based on renewable energies; striving constantly for the highest energy efficiency; and practising what we call “eco-design.”

• The second principle is that we should have quality in-teractions with our professional environment and that means staying close to our customers so that we can adapt better to their needs; maintaining good relationships with our suppliers and business partners; making an in-depth evaluation of the environmental and social impact of our projects; and supporting the local communities around our sites.

• The third principle entails constantly improving the way we work: strengthening our high ethical standards, giving our employees the best – and safest – possible workplace and reducing the environmental footprint of our opera-tions.

When your results were released, you were cautious about the outlook for the Group over the next few fi nancial years. Yes, because the economy is still diffi cult in the short term. That’s why we projected modest an-nual sales growth and a stable operating margin in 2013/14, rising to around 8% in the next two or three years. Meanwhile, free cash fl ow remains a priority and should continue positive for each of the next few years.

Are you adopting a wait-and-see attitude in res-ponse to market uncertainty? On the contrary, we have continued to prepare the future by stepping up our research and development spending, which exceeded €700 million in fi nancial year 2012/13. These ongoing efforts are paying off now, positioning us in innovative, fast-growing sectors like offshore wind, high voltage direct current technology, Smart Grids and urban transport systems.

We are also continuing to update our manufac-turing base by modernising it and adapting it to the growth in emerging countries. We have invested more than €500 million in moderni-sing and developing our industrial base. We had to rethink the Group’s structure, downsize our production facilities in certain areas of Thermal Power, Renewable Power and Grid and pro-vide the necessary support to our employees, especially in the US, Mexico and Spain. At the same time, we have responded to our markets – which are changing both geographically and technologically – by launching new units and modernising existing ones in Canada, Brazil, India, Kazakhstan and France.


So Alstom is ready to face the new world that is gradually emerging? Our strategy is unchanged. Our goals are: to sustain our growth by expanding our global presence and our offer; to continue our efforts to maintain our technological edge; to support our expansion in emerging countries with targeted investments; and to continue improving our operational per-formance by executing our projects well, controlling costs and generating cash fl ow.

Alstom is on the right track. Over the long term, our mar-kets are headed in the right direction, with considerable needs for effi cient power generation and transmission infrastructures as well as rail transport. We will continue working to strengthen our positions and to make the most of our many advantages!

When Patrick Kron was appointed on 11 March 2003, Alstom was struggling to survive, plagued by technical problems with 80 gas turbines acquired from ABB, plus problems with contract execution, competitiveness and rapid financial deterioration.Patrick Kron immediately pre-sented shareholders with a road-map for turning the company around by 2005-2006, requiring Alstom to shed 40% of its opera-

tions and half of its workforce. He overhauled the Group’s manage-ment, made a thorough review of its structure and methods, brought its industrial performance back up to standard and restored the confi-dence of its customers. By 2006, Alstom was making a profit again. That same year, it entered into a strategic alliance with the Bouygues group, which bought the stake that the French state had temporarily taken in the company’s

capital. The next three years brought rapid growth, buoyed by a booming international market and a series of successes in both rail and power generation and Alstom expanded, adding power transmission back to its business portfolio. But beginning in 2009, markets changed radically in response to the financial and economic crisis. Alstom adapted, implementing a new geographical strategy, inves-ting in manufacturing capacity and partnerships in major emerging re-gions and enhancing its offer with innovative, technology-intensive new products and services. R&D – the key to the Group’s future – remained a priority, even at the height of the crisis. In the past ten years, Alstom has become a global contender with leading positions in all three of its business activities – rail transport, power generation and power transmission – and is firmly committed to new areas of technology that are critical to the Group’s future as well as to that of the planet. “We have successfully overcome all kinds of challenges in the past ten years,” says Patrick Kron, “and I’m very optimistic about our ability to face whatever tomorrow may bring.”

PATRICK KRONMARKS TENTH ANNIVERSARY AS ALSTOM CEO

10

BOARD OF DIRECTORSat 31 March 2013

1

Olivier BouyguesDeputy Chief Executive Officer, Bouygues

3

Candace BeineckeChair, Hughes Hubbard & Reed LLP

5

Jean-Paul BéchatManaging Director, ARSCO (ending his appointment after the General Meeting of 2 July 2013)

6

Philippe MarienRepresentative, Bouygues SA

Alan ThomsonChairman, Hays plc.

4 7

Lalita GupteChair, ICICI Venture Funds Management Company Ltd

2

Gérard HauserCompany director

Alstom has been listed on the Paris stock exchange since 1998. The Group has taken active steps to achieve its highly demanding goals for transparent corporate gover-nance based on the AFEP-MEDEF corporate governance code for listed companies. This means that Alstom applies strict corporate governance rules, particularly with respect to the independence of Board Directors and the missions of

specialised committees. A robust and broad internal control system encompasses and supports all Group Sectors and func-tions. By enabling quicker, more reliable and more competitive operations, the internal control system aims to ensure that local laws and regulations are complied with, that information and data, including fi nancial information, are reliable and that operations are completed in an optimal manner.


10

Jean-Martin FolzCompany director

9

Patrick KronChairman and Chief Executive Officer

13

James William LengChairman, AEA Investors Europe

8

Georges Chodron de CourcelDeputy Chief Executive Officer, BNP Paribas

12

Pascal ColombaniSenior Advisor, A.T. Kearney

11

Katrina LandisExecutive Vice President, BP

14

Klaus MangoldSupervisory Board Chairman, Rothschild GmbH (Frankfurt)

The Board of Directors has duly noted Mr Jean-Paul Béchat’s decision to resign from the position he has held for the last 12 years. This resignation will take effect at the close of the General Meeting of 2 July 2013.

The Board has decided to present this next General Meeting with a proposal to appoint Mrs Amparo Moraleda as independent director for a term of four years.

12

1 2 3 4

Philippe CochetPresident of Alstom Thermal Power

Keith CarrGeneral Counsel

Nicolas TissotChief Financial Officer

Grégoire Poux-GuillaumePresident of Alstom Grid

EXECUTIVE COMMITTEEat 31 March 2013


Defining strategy and general policies, setting correspond-ing operational objectives, including budgets and financial targets, in addition to allocating financial resources.

Upholding relations with the Board of Directors and the external environment (shareholders, financial community and the general public).

Undertaking any action needed to implement strategy that cannot be efficiently transferred to the Sectors.

Enhancing the value of human resources, including manage-ment of career development and succession planning across the Group, general employee relations, global compensation and benefit-related guidelines and policies.

7 85

Patrick KronChairman and Chief Executive Officer

Bruno GuillemetHuman Resources Director

Henri Poupart-LafargePresident of Alstom Transport

Jérôme PécressePresident of Alstom Renewable Power

6

14

21.7 23.8

OPERATING PROFIT +4%In millions of euros

The Group’s operating profit climbed 4%, with the operating margin rising to 7.2% over the year, due particularly to efficient execution of contracts and cost optimisation efforts.

ORDER BACKLOG +7%In billions of euros

At 31 March 2013, the order backlog represented about 31 months of sales.

23

6.24.6

19.149.3 52.9

2011 / 12 2012 / 13

Thermal Power 2012 / 13Renewable Power 2012 / 13Grid 2012 / 13Transport 2012 / 13

ORDER INTAKE +10%In billions of euros

Orders outstripped sales in each quarter of the financial year. Business was particularly strong in emerging markets, accounting for about half of total orders. Transport and Grid both recorded particularly high order intake levels.

2011 / 12 2012 / 13

Thermal Power 2012 / 13Renewable Power 2012 / 13Grid 2012 / 13 Transport 2012 / 13

SALES +2%In billions of euros

Sales progressively improved compared with 2011/2012. This increase was made possible by the performance of Thermal Power (+5%) and Transport (+6%), both having seen a reco-very in sales compared to the low point reached the previous year. In contrast, Renewable Power recorded lower sales for its major contracts in the execution phase, as did Grid, due to postponements by customers affecting certain projects.

5.5

3.8

9.219.9

2011 / 12 2012 / 13

Thermal Power 2012 / 13Renewable Power 2012 / 13Grid 2012 / 13Transport 2012 / 13

20.3

Renewable Power 2012 / 13Grid 2012 / 13Transport 2012 / 13

7.1

5.12

9.6

23

6.24.6

19.1

5.5

3.8

9.27.1

5.12

9.621.7 23.8 19.9 20.3

49.3 52.9

GOOD BUSINESS MOMENTUM

1.8

1,406 1,463

2011 / 12 2012 / 13

1,406 1,463


THERMAL POWER RENEWABLE POWER GRID TRANSPORT

NET PROFIT +10%In millions of euros

Net profit improved despite higher res-tructuring costs, mainly relating to Grid and Renewable Power, thanks to higher net operating profit and a positive contri-bution by the Group’s shareholding in Transmashholding (€68 million, versus €32 million in 2011/12).

NET DEBTIn millions of euros

The decrease in net debt was mainly the result of the capital increase and positive free cash flow over the financial year, partially offset by the payment of the dividend in respect of the 2011/12 financial year and financial investments.

SHAREHOLDERS’ EQUITYIn millions of euros

Shareholders’ equity was up compared to 2011/12, reflecting the impact of net profit for the financial year, the capital increase, changes in pension funds and the dividend payment.

OPERATING PROFIT AND OPERATING MARGIN BY SECTOR In millions of euros

Thermal Power’s operating margin continued to improve, buoyed by higher volumes and tighter control on costs. Renewable Power hit a low point as its operating margin decreased to 4.9%, impacted by lower sales and price erosion in wind. Grid’s operating margin remained stable at 6.2%, thanks to efficient execution of contracts and cost savings. Finally, Transport continued its turnaround with stronger business growth and cost-control measures helping to boost its operating margin to 5.4%.

732 4,434 2,492802 5,104 2,342

2011 / 12 2011 / 122012 / 13 2012 / 13

850 959

10.4%

2011 / 12 2011 / 12 2011 / 12 2011 / 122012 / 13 2012 / 13 2012 / 13 2012 / 13

150

7.4%

88

4.9%

6.2%

248

6.2%

238

5.1%

264

5.4%

297

732 802 4,434 5,104

2011 / 122011 / 12

6.2%%

248

2011 / 122011 / 12

5.1%

264

2012 / 13/

6.6.2%2%

238

5.4%

297

9.7%

CONTINUOUS IMPROVEMENT IN FINANCIAL POSITION

2011 / 12 2012 / 13

16

SUPPORTING THE CAREER ASPIRATIONS OF EMPLOYEES

Through its own tailored and effective training programmes, Alstom is developing the skills needed by the Group and training an ever larger proportion of its workforce.

Number of employees trained by Alstom University, the Group’s internal training organisation

8,900 15,817

2010/11 2011/12 2012/13

8,231

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

83%

17%

65,000

93,000

20% 24% 24% 25% 30% 31%

80% 76% 76% 75% 70% 69%

Emerging regions (Africa, Middle East, Asia-Pacific, Latin America).

Traditional regions (Europe, North America).

AN EVEN STRONGER COMMITMENT TO SUSTAINABLE DEVELOPMENT

FOCUSING ON EMPLOYEES

ADAPTING THE WORKFORCE TO DEMAND

The increase in the number of Alstom’s employees is most notable in the world’s emerging regions.

Geographic distribution of workforce (% of total workforce)

PROMOTING SAFETY: A CORE VALUE FOR THE GROUP

The Group maintains momentum and builds on its progress in this area by providing safety training to its employees on a regular basis.

3,3581.4

2010 2010/11 20112011/12

1,7001.8 8591.9

20122012/13

Alstom has reduced the number of workplace accidents.

Injury frequency rate (Alstom employees) Number of employees having completed face-to-face environment, health and safety training


2010 2011 2012 2013 2014 2015

83 81 80 78 76 75

83 80 81

2010 2011 2012 2013 2014 2015

26 25 24 23 23 22

26 25 24

Energy intensity of permanent sites (MWh/sales in € million)

Target (20% reduction between 2008 and 2015)

Ta(2

Target (20% reduction between 2008 and 2015)

Ta(2

GHG emissions intensity of permanent sites (tonnes of CO2 equivalents/sales in € million)Excluding CO2 emissions due to Grid’s SF6 fugitive emissions and CO2 emissions related to energy used by R&D activities; data updated compared to figures published in 2011/12.

REDUCING WATER CONSUMPTION BY THE GROUP’S INDUSTRIAL SITES

2010 2011 2012 2013 2014 2015

1,424 1,367 1,310 1,253 1,196 1,139

1,424 1,232 1,125 Target (20% reduction between 2010 and 2015)Tabe

Water use in water-stressed areas (thousands of m3)

Alstom pays particular attention to sites located in water-stressed areas, where its targets have been exceeded.

The solutions delivered by Thermal Power and Renewable Power between 2002 and 2011 enabled our customers to save at least 207 million tonnes of CO2 emissions annually.

EXPANDING ISO 14001 CERTIFICATION TO ALL SITES

97%81%52%

Number of permanent sites (> 200 employees) certified to ISO 14001 (environmental management)

2010 2011 2012

REDUCING ENVIRONMENTAL IMPACT THROUGH OPERATIONS AND SOLUTIONS

HELPING CUSTOMERS REDUCE THEIR CO2 EMISSIONS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

27

1

27 819

3136 42 58

63

6872

62

84

104119

131

151166

190207

54 65 73 83 89 93 103 122 134

Cumulative annual CO2 avoidance for the global power generation sector achieved with the operation of Thermal Power and Renewable Power projects commissioned between 2002 and 2011 (million tonnes of CO2/year)(Based on first year of operation data).

Thermal Power

Renewable Power

REDUCING THE INTENSITY OF ENERGYAND GREENHOUSE GAS (GHG) EMISSIONS

97% of Alstom’s permanent sites are certified to ISO 14001.

Certification is in the process of being obtained for two sites (due in 2013) to reach the target of 100%.

18

The role of the Investor Relations team is to provide the entire financial community – individual shareholders, institutional investors and financial analysts – with complete, regularly updated information on the Group’s financial position, business prospects, strategic objectives and recent highlights.

COMMUNICATION WITH INDIVIDUAL SHAREHOLDERSIn addition to the Annual General Meeting, Alstom actively develops ex-change and dialogue with its individual shareholders. During financial year 2012/13, the Group took part in infor-mation meetings in Nantes, Paris and Nancy in France – organised in asso-ciation with the F2iC (the French In-vestment Club Federation) and CLIFF (the French Association for Investor Relations). The Group organises site visits for indi-vidual shareholders to provide more in-sight into Alstom’s business activities. In 2012/13, one group of shareholders went to Aix-les-Bains to see the pro-duction of high voltage gas-insulated substations, while another toured the

La Courneuve site, the base of opera-tions for Alstom’s power plant services. A third group visited the Le Creusot plant, which builds bogies, brake sys-tems and dampers for the rail industry.

In addition to its periodical financial publications, Alstom offers its share-holders a range of information tools, including the shareholder letter which is published twice a year to accompany the main financial dates of the Group.

In 2013/14, the Group plans to main-tain active communication with indivi-dual shareholders by organising further events while pursuing its publication policy and expanding its communica-tions efforts in the digital realm.

SHARE OWNERSHIP

According to a survey run by Euroclear France and IPREO, Alstom’s share capital is held by approximately 230,000 shareholders. At 31 March 2013, share capital ownership broke down as follows:

29.4% 63.3%

6%

1.3%

CAPITAL STRUCTURE BY REGION

18%

13%55%

5%9%

RELATIONS WITH SHAREHOLDERS

EmployeesIndividual shareholdersBouygues Institutions

Rest of the worldUnited Kingdom and IrelandContinental Europe (excluding France)North AmericaFrance


CONTACTS

Delphine Brault — Vice-President

Alstom3 avenue André-Malraux92 300 Levallois-PerretTel.: +33 (0)1 41 49 20 00Fax: +33 (0)1 41 49 79 25

E-mail:[email protected]

From France: Toll free number: 0800 50 90 51,From Monday to Friday,9am to 7pm CET.

From outside France: +33 (0)1 45 30 85 75 (calls charged at operators’ standard rate).

Euronext Paris

ISIN codee: FR0010220475

Ticker symmbol: ALO

Par value: €7

Number of shares: 3308,158,126

Market capitalisatioon: €9,780,188,942

Main indexes: CAC 440 SBF 1120 Euronnext 100

SHARE PRICEThe Alstom share at 31 March 2013Share price performance (in €) – April 2012/March 2013

Base: Alstom share price at 30 March 20112: €29.26. Source: Euronext Paris.ALSTOM CAC40

April2012

21

23

25

27

29

31

33

35

37

May2012

June2012

July2012

August2012

September2012

October2012

November2012

December2012

January2013

February2013

March2013

RELATIONS WITH INSTITUTIONAL INVESTORS AND FINANCIAL ANALYSTS

Roadshows are organised several times a year in major American and European fi nancial centres (United Kingdom, France, Switzerland, Ger-many, Sweden) in addition to meetings with investors and analysts that take place throughout the year. Each year, the Group organises an analysts and investors day to present its strategy and activities. This year’s event, held in Nantes, focused on the activities of Renewable Power and Grid, in particular by exploring topics such as offshore wind, direct current transmission technology and Smart Grids. With some forty analysts and investors in attendance, the meeting was followed by a visit to the Le Car-net site, near Saint-Nazaire, where the fi rst Haliade™ 150 6MW wind turbine has been installed onshore, currently in its fi nal testing phase with a view to its certifi cation. The Group also participates in sector specifi c and general conferences orga-

nised by brokerage fi rms in the United Kingdom, France and the United States. During the fi nancial year, the Group also had the opportunity to pre-sent its core principles for corporate governance and social and environ-mental responsibility.

STOCK MARKET NEWS

Over the course of fi nancial year 2012/2013, Alstom’s share price rose 8.5%. On 31 March 2013, the share price stood at €31.75 and the stock market capitalisation of the Group was €9.8 billion.

KEEPING INVESTORS INFORMED

www.alstom.com

The Investors section of the Alstom website has been specially designed to provide shareholders with easy access to all the Group’s financial commu-nications: share price quotes, down-loadable historical data for the past five years, financial results, presenta-tions, registration documents, share-holders’ letters, dates of important

meetings, frequently asked questions, as well as a service that dispatches the Group’s press releases by email. Printed copies of the registration document and shareholders’ letters can be obtained in French and English by sending a request to the Investor Relations department.

20

Odebrecht Energia orders 40 2.7 MW ECO 122 wind turbines for four wind farms in Rio Grande do Sul. Set for manufacture in Camaçari, Bahia, at a new plant inaugurated in November 2011, the new turbines will go into commercial operation in late 2013.

40 ECO 122 WIND TURBINES FOR BRAZIL

A look back at the twelve months of the 2012/13 financial year, rich in tech-nological developments and industrial investments and marked by a number of significant new orders and projects completed around the world.

THE YEAR IN REVIEWAPRIL 2012 – MARCH 2013


On 28 April 2012, the AGV .italo launches commercial service on Italy’s high-speed line linking Naples, Rome, Florence, Bologna and Milan. In 2008, NTV chose Alstom to supply and maintain 25 AGV train sets over a 30 year period. By the end of that year, AGV .italo had expanded commercial service to include Salerno, Turin and Venice, making more than 90 daily return journeys throughout the Italian rail network.

PPPREELLIMMINAARRY SOOLAAR STUUDDY IN SOOUUUTH AAFRRICASasol, the South African energy and chemicals giant, chooses Alstom and its US partner BrightSource Energy to conduct a preliminary engineering study for construction of a solar tower plant. South Africa is one of the world’s best regions for generating concentrated solar power (CSP) energy.

AGGV .ITTALO WWELCOOMES FIRSTT PASSENGERRS

Smart Grid project in HawaiiMaui Electric Company (MECO) chooses Grid’s integrated distribution management system (IDMS) for a Smart Grid demonstration project that MECO will conduct with the US Department of Energy and the University of Hawaii. The project will evaluate how Smart Grid technologies can help reduce peaks in consumption and integrate new energies into the Hawaiian power grid – a crucial step in achieving the state’s goal of generating 70% of its electricity from renewable sources by 2030.

The €250 million contract covers construction of two 660 MW turbine islands for two supercritical coal-fired plants in Maharashtra. This first order, awarded to the joint venture by National Thermal Power Corp. Ltd., strengthens Alstom’s position in this market segment in India. The joint venture’s future plant will be the largest dedicated turbine and generator manufacturing facility in the country. A second location will produce the auxiliary equipment.

ALSSTTOM--BHAARAAT FORGGE WINS FFIIRST INDDIAAN CONTRRACT

APRIL 2012

22

THE YEAR IN REVIEW

Lille Métropole chooses Alstom Transport to modernise Line 1 of its metro, a project worth more than €250 million. Transport will supply an integrated system with 27 rubber-tyred metro train sets, an automatic driver system and a next-generation signalling system to help the city keep pace with expected increases in passenger numbers over the next few years.

Norwegian Prime Minister, Jens Stoltenberg, officially inaugurates the world’s largest carbon capture test facility. The Technology Centre Mongstad (TCM), north of Bergen, will use Alstom’s chilled ammonia process, which has shown its potential at two pilot sites in the United States. TCM will test the process on flue gas from a gas-fired power plant and on industrial offgas from a nearby refinery.

The first GT24 turbine manufactured by the plant is loaded onto a barge on the Tennessee River, bound for New Orleans and ultimately for Mexico, where it will be installed in the El Sauz combined-cycle power plant. Paired with the KA24 combined-cycle plant (two gas turbines, two HRSG heat recovery systems and one steam turbine), the exceptionally flexible next-generation GT24 delivers output in excess of 700 MW with a 60% yield and puts the Chattanooga plant in an ideal position to serve North America’s booming natural gas market.

2

CCHATTTANNOOOGGA DDELIIVVERRS FFIRRST GT24

MAY 2012

ALLSTOOMM WWINSS LIILLEE MMETTRO

CCONNTRRACCT


Alstom delivvers the third annd fiinal stage of thhhe Shoaiba steam power plant ahead of schedule,, increassing outtput by 1.2 gigawaaatts. Since the first contract was sig-

nned in 19988, Alstom has beeen thhe sole contraccctor for the entire plant, which is ope-rated by thee Saudi Electriciity CCompany (SEC))) on the Red Sea coast, 100 km from Jeddah. WWiith totall outputt of 55,600 MW, theee facility is the largest in the Middle

East and hhaas the caapacity tto mmeet Saudi Arabbia’s growing demand for electricity.

24

Alstom’s Camaçari plant in Bahia state completes assem-bly of its very first wind turbine – a 1.67 MW ECO 86 that will go into operation at the King of the Winds farm in Rio Grande del Norte. At the same time, the first of 57 ECO 86 turbines ordered from Alstom by Desenvix for the Brotas wind power complex, also in Bahia, begin supplying power to the grid. The 2010 contract covers construction of three 30 MW farms at the Macaubas, Novo Horizonte and Seabra sites.

FIRRST ALLSSTOM WWWIND TTURRBINE ASSSEEMMBLED IN BRRAZIIL

A major investment by Thermal Power in Poland, the new workshop will enable the Elblag site to use cutting-edge welding technologies on turbine shafts and to raise rotor production standards to the Group’s highest level.

Alstom Grid and France’s National Solar Energy Institute (CEA-INES) announce that they will create a joint research institute in Chambéry, France. The new institute will develop solutions for storing energy and for connecting new renewable energies to grids. The partnership is aimed, in particular, at advancing Europe’s goal of raising the share of renewables in its energy portfolio.

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JUNE 2012

A new high-speed bypass line, equipped with an Alstom signalling system, goes into service in Bologna, Italy. The bypass links the Bologna-Florence and Bologna-Milan high-speed lines without going through the Bologna Centrale station, improving punctuality and cutting travel times.

THE YEAR IN REVIEW


Frost & Sullivan, a consul-ting firm specialising in market analysis and strategy, gives its Growth Strategy Excellence award to Thermal Power for achievements in air quality control systems. The award is presented in Dubai at the 2012 Environment Industry Meet for the Middle East, where Alstom has recently won several air quality control contracts.

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The memorandum of understanding signed by Grid and IREQ targets three key areas of Smart Grid innovation: wide area measurement and control systems; integration of the control system for Alstom Grid’s voltage source converter into Hydro Québec’s Hypersim platform and monitoring of digital substations.

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IINNSTTTITTUUUTE ((IRREQ)

Alstom Transport receives a €440 million order for 46 new Coradia Nordic regional trains from Grand Stockholm SL, the Swedish public transport authority. In all,

239 trains from this winterised range have been sold to various Swedish operators; the new order brings SL’s total to 129.

SWEEDEN ORRDERS 446 MORE CORRADIA NNORDIC TTRAINS

Alstom joins with France’s Strategic Investment Fund (FSI), a public financing entity, to acquire Translohr, a maker of rubber-tyred tramways. Translohr’s manufacturing operations will remain in Duppigheim, Alsace, securing their future for the region.

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26

The contract, awarded to Thermal Power by National Thermal Power Corpora-tion, will be performed in cooperation with Bharat Heavy Electricals Limited (BHEL) under a supercri-tical technology licence granted by Alstom to BHEL in 2005. The two 660 MW boilers and their key com-ponents will be manufac-tured at Alstom’s Wellsville and Concordia sites in the United States and its Durgarpur and Shahabad sites in India.

Under a contract with Arabian Bemco Contracting and GS E&C, Alstom will supply two 342 MW steam-turbine generator sets and eight heat recovery steam generators for the Saudi Electric Company’s No. 12 gas-fired power plant in Riyadh. Converting to a combined cycle configu-ration will allow the plant to increase power while simultaneously optimising gas consumption. Alstom has extensive Middle East experience in adding steam tails to any class of gas turbines, regardless of manufacturer.

TWWWO SUUUPEERRCCRITIIICAL

BBOIILLERSSS ORDDEEREDDD FOOR IINDIIIA

Svenska Kraftnät awards Alstom Grid a contract for a new 420 kV substation as part of a campaign to modernise the Stockholm region’s power grid. In January 2012, Svenska Kraftnät chose Grid’s MaxSine HVDC technology for a key project establishing a new 1,440 MW high voltage direct current link to southwestern Sweden.

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JULY 2012

Grid signs several contracts with KAR Construction & Engineering to manufacture and supply four air-insulated switchgear substations and one gas-insulated substation.

Grid will also expand and modify three existing substations within the Dohuk Governorate, part of the Kurdistan Regional Authority. This is Grid’s first project in the

region since it installed similar substations in 2002.

AAALSSTOOMM WINS FIRRSTT STEAM TAIL

OOFFERING IIIN SSAUUDI AARABBBIA

THE YEAR IN REVIEW


AUGUST 2012

Under a contract with East Delta Electricity Production Co. (EDEPC) amounting to some €90 million, Alstom will supply a steam turbine and generator for a 650 MW steam cycle power plant near Suez (150 km east of Cairo, in Egypt). Due to be commissioned in 2015 and connected to the national grid, the plant will directly serve more than 500,000 residents in the Suez metropolitan area.

With consortium partner BHEL (Bharat Heavy Electricals Limited), Alstom wins a contract from Nuclear Corporation of India Limited (NPCIL) to supply the Rajasthan power plant in Rawatbhata with turbogenerator packages. The new equipment will be installed in units 7 & 8, with capacity of 700 MW each. In all, India has 20 nuclear plants, plus seven reactors under construction.

NEEW SSTEAM CYCLE PPPLANT FORR EEGYPT

AALSSTTOOMM SSTEPPPS UP PRRESENCCCE

INNN TTHEE INDIAN NNUCCLLEARRR MMAARRKETTT

With nine 3 MW ECO 100 wind turbines, southern Turkey’s Senköy wind farm has annual capacity of around 85 GWh and is outperforming initial projections by 10% – a fact noted with pleasure by Alstom’s customer, Guris Construction, at the inauguration ceremony on 4 August. With Turkey planning to install 20,000 MW of wind capacity by 2023, Senköy’s success holds promise for Alstom.

Power Grid Corporation of India awards Alstom Grid a turnkey contract to supply an 800 kV high voltage direct current (HVDC) connection – one of the biggest ultra HVDC contracts Grid has ever won, and the first of its kind in India. The network is designed to transfer bulk power from the eastern central region of Chhattisgarh to the load centre in the north via a 1,365 km transmission line.

ANN EEENEERGGYY HHIGGHWWAAYYY FFORR INNDDIA

Alstom Grid and Cisco agree to pool their expertise to develop communications solutions for next-generation smart substations. The new range will integrate Cisco’s telecommunications and cyber security technologies into Alstom’s DS Agile™ substation command and control system, improving protection for data circula-ting in new Smart Grids.

SBB, the Swiss federal railway operator, or-ders eight more New Pendolino trains which will run on the Geneva-Milan and Zurich-Milan lines from 2015. The €200 million deal is an option on the previous contract, signed in 2004 by Alstom and Cisalpino, the former joint venture between SBB and Italian railway operator, Trenitalia. The new order will expand SBB’s existing fleet of seven Pendolino trains.

EIGGHT NEWW PPENNDOLINO TRRAINNS FFORR SWWITZZERLAND

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28

SEPTEMBER 2012

Inauguration of “five star” power plant in Pembroke, WalesThe UK’s largest combined-cycle gas-fired power plant, with five KA26 groups deli-vering output of 2,160 MW, is officially inaugurated on 19 September. The project has already garnered a number of high-profile distinctions, inclu-ding a Five Star Health and Safety Audit Award and the Sword of Honour award from the British Safety Council.

The two companies will explore a business collaboration based on their respective Smart Grid capabilities. Alstom Grid brings expertise in grid management, while Toshiba has strengths in smart meters and integration of energy storage batteries. By combining their technologies, the partners expect to develop a broad range of integrated transmission and distribution solutions adapted for Smart Grids.

AAALSTOOM FOORRMS SMARTT GRRID PPPARTNNERSHHHIP WWITH TOOSHIBA

The tests of Alstom’s Prima II are designed to confirm that the next-generation locomotive is compatible with Channel Tunnel systems and security standards, opening up promi-sing new possibilities for European rail freight.

EUROOTUNNNEL AAND AALSTOMM CONNDUCTT DYNNAMIC TESTSS

IN CHHANNNEL TTUNNEL WITH PRRIMA II LOOCOMOTIVEE

Singaporean operator, Sembcorp, chooses Alstom to maintain its cogeneration power plant on Jurong Island, Singapore, signing a 12 year contract that includes overhauling the facility’s steam turbine and three generators. Alstom originally supplied the 815 MW plant in 2001 and is currently building a new 400 MW cogeneration facility on the island for the same customer. The new plant will be delivered in 2014.

French utility, EDF, chooses Alstom to retrofit control and alarm systems in eight of its nuclear sites by 2023. A customised system based on Alstom’s proven ALSPA Series 6 will be installed in a total of twenty 1,300 MW nuclear units and integra-ted into the Controbloc N20 control system, which Alstom supplied and regularly services.

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AALSTTOOM TTTO MMMOODERNISE 8 FRREENCHH NNUCCLLEARRR PPLAANTSSS

THE YEAR IN REVIEW


New successes for air quality control systemsIn Taiwan, Thermal Power will fit the Talin power plant (2x800 MW) with a seawater flue gas desulphurisation system, following an earlier project at Taiwan’s Linkou plant. The contract also includes a particulate removal system. Once the two new technologies are in place, Talin will meet Taiwanese environmental standards, which are particularly strict. In Romania, Alstom will install a wet flue gas desulphurisation system at the Craiova power plant – which includes two units built by Alstom – following a similar contract at the Rovinari plant. The new system enables compliance with the European Union’s new industrial emissions directive ahead of the 2016 deadline.

Alstom Thermal Power wins a 14 year contract for maintenance – including daily service – of unit 8 of Moscow’s TPP-26 power plant, the most efficient combi-ned cycle power plant in Russia. Built by Alstom and in service since 2011, the plant includes one GT26 gas turbine, a steam turbine, two air-cooled generators and one heat recovery steam generator. Alstom was the first foreign company to build a turnkey power plant on Russian soil and is the first to win a service contract with such broad scope.

MAJJOOR MAAIINTENNNANCE CCONNTTRACTTT INN RRUUSSIAAA

After taking a sizable stake in AWS, a Scottish wave energy company, Alstom moves to acquire Tidal Generation Limited (TGL), a Rolls Royce subsidiary specialising in the design and manufacture of tidal stream turbines. TGL, which successfully tested its first 500 kW turbine at the European Marine Energy Centre (EMEC) in Scotland’s Orkney Islands, has

since begun experimenting with a new 1 MW prototype.

30

Alstom invests an additional $40 million in US-based BrightSource Energy, Inc., a leader in concentrated solar thermal tower technology, bringing its stake to over 20%. The two companies also agree to expand their cooperation to India and Australia, where solar conditions are particularly well matched to BrightSource’s concentrated solar power (CSP) technology. According to the International Energy Agency, CSP could supply more than 11% of the world’s electricity by 2050.

SOOLLAR THERRMMAAL POWEER EENNTERS A NEEWW STAGEE

Carrington Power Limited awards Thermal Power a contract to supply and maintain equipment for a new 880 MW combined-cycle power plant at Trafford, near Manchester. The order includes two GT26 gas turbines, a steam turbine, a turbogenerator and a heat recovery steam generator (HRSG), which will supply power to nearly a million households starting in 2016. The total contract value is €640 million, with €410 million for Thermal Power. Duro Felguera, the consortium’s Spanish partner, will be responsible for construction and site management. Alstom equipment already provides more than half of the UK’s power generation capacity.

NNEW AALSTOOM PPOWWER PLLAANTFOR TTHHE UK

Light Energia and Light SESA, the operators res-ponsible for power distri-bution in Rio de Janeiro state, choose Alstom Grid’s e-terra software platform to automate their network. With e-terra, the Brazilian operators will be able to visualise and control their entire network – including automated underground systems – in real time, making distribution signifi-cantly more reliable.

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OCTOBER 2012THE YEAR IN REVIEW


The two transactions, on 1 and 4 October, raised a total of €700 million, which the Group will use to finance current acquisitions without increasing financial debt. In particular, Alstom will use the proceeds to finalise its agreement with the Russian rail company, Transmashholding (TMH), making an additional payment of around €250 million for a 25% stake in TMH’s capital. This strategic investment has opened the Russian and CIS rail markets to Alstom Transport, which has already won more than €1.5 billion in contracts via TMH.

ALSTOM LAUNCHES CAPITAL INCREASE AND BOND ISSUE

TO FUEL GROWTH

Alstom Hydro signs a €110 million contract with Neoenergia, a major private group, for delivery of three Kaplan hydro turbines, generators, command, control and protection systems, and all electromechanical and erection equipment for the future 350 MW Baixo Iguaçu hydro power plant in Brazil’s Paraná state. Meanwhile, Alstom Wind signs a letter of intent with the state of Rio Grande do Sul to build its first plant to manufacture wind turbine towers in Latin America, near Grid’s Canoas facility.

Alstom Transport and AO Locomotive, a subsidiary of the Kazakh national rail company KTZ, win a contract to maintain, overhaul and modernise 27 KZ4AC passenger locomotives which have been in service since 2009. As Alstom’s first maintenance agreement in Kazakhstan, the deal is a major breakthrough. An earlier order for 295 freight and passenger locomotives was placed by KTZ in 2010 and is now in progress.

25 YEAAR MMAIINTEENANNCE COONTRACCT WWITH

KAZZAKH RRAILWWAYS

32

NOVEMBER 2012

Transelec, a major Chilean power transmission company, chooses Grid to supply equipment for the country’s first 550 kV gas-insulated substation. Installed in Santiago, the new substation will secure the capital’s power supply and make the Chilean power grid more efficient and reliable.

CCCHILLE ORRDEERS FFIRRSTT GAAS-IIINSUULAATTTEDD SUBBSTTATTION

AAAn 800 MWWW hydraaulic turrbine/geneeratoor – the mostt poweerful hhydroelectrric unitt in thhe wworld – is installed by Renewable Power at the Xiangjiaba hydro power plant in Yunnan. The China Three Gorges Corporation (CTG) chose Alstom to design, engineer and manufacture four of the plant’s eight units and to oversee their installation and commissioning. With total output of 6,400 MW, Xiangjiaba will be the country’s third most powerful plant.

For Alstom’s fifth annual Innovation Awards, the

jury considered 344 projects representing 1,071 Alstom

employees from nine countries, from the Americas to Asia. Thirteen teams won awards in the in-house competition, and six entries won

gold trophies. “Bringing innovation into our operations, our products,

our procedures and into the world’s ecosystems isn’t just a competitive

advantage – it is a competitive Advantage with a capital ‘A’”,

said Patrick Kron, stressing the close ties between innovation and

teamwork.

INNOVATION AWARDS HONOUR

13 FINALIST TEAMS

NOTTTINGGHAMM WAATCHESS APPPITRACKK LAYY 120 METRRES

OOF TRRACKAlstom’s quiet, ultra-fast automated track-laying technology extended Nottingham’s tram network in two areas – its first use in the United Kingdom. The public was invited to watch Appitrack pour concrete and insert rail shoes at a rate of 150 metres a day, versus 20 to 50 metres with conventional technology. Previously used in Jerusalem, Algiers and Reims, Appitrack also set a world record in Orléans, where it laid 403 metres of track in a single day.

THE YEAR IN REVIEW


Alstom Grid’s Noventa di Piave site – already a competence centre for high voltage disconnectors – inaugurates a new production line as well as facilities to test high voltage equipment for air-insulated substations. Noventa di Piave exports 90% of its output, and more than 160,000 high voltage disconnectors manufactured there have been installed in more than 130 countries.

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SSSITTE FFFORR ITTAALLY

Innovative light scanning technology designed to inspect generator retaining rings is tested on site at Mosenergo’s TTP-27 steam power plant in Moscow. Developed by Alstom R&D teams with specialised expertise in robotics and automation, the fully automated scanner shortens inspections by several days, reducing customer downtime and giving Alstom a competitive edge.

Thermal Power to outfit a gas-fired plant in the USDominion Virginia Power will pair Alstom heat recovery steam generators with Mitsubishi MHI501G gas turbines in a 1,300 MW gas-fired power plant planned for Lawrenceville, Virginia. The generators are used to enhance the performance of combined-cycle plants while simultaneously achieving significant reductions in nitrogen oxide (NOx) emissions. In 2011, Dominion Virginia Power placed a similar order with Thermal Power for its power plant in Warren, Virginia. In both cases, gas-powered units will replace coal-fired plants.

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Owned by GDF-Suez subsidiary, Eole Generation, the Landes-de-Couesmé wind farm is located in Morbihan in western France. It has a total of eleven

Alstom-made 3 MW wind turbines, which stand 145 metres high and have a rotor diameter of 110 metres. The ECO 110 has a particularly high energy yield,

reducing its environmental footprint in densely populated areas.

34

Transmashholding (TMH) and Kazakh Railways (KTZ) join Alstom in inaugurating their new electric locomotive factory on 4 December. The first of ten pre-series KZ8A locomotives, now in production at Alstom’s Belfort plant, was delivered for the occasion. The Astana factory will be operated by EKZ – a joint venture among KTZ (50%), Alstom and TMH (25% each) – and begins production in January 2013, in the first joint project that Alstom and TMH have undertaken outside of Russia. The KZ8A is the world’s most powerful freight locomotive, able to haul up to 9,000 tonnes at 120 km/h under extreme weather conditions.

The EP20 locomotive, designed and manufactured by Alstom and TMH at the Novocherkassk factory in the Rostov region, makes a successful first run between Saint Petersburg and Moscow. This locomotive, which the factory will produce at the rate of three a month, will run on the Moscow-Sochi line during the 2014 Winter Olympics.

AAND THHEE FFIRRSST EPP20 GGOOEES INNTOO

SERVVICCE

DECEMBER 2012THE YEAR IN REVIEW


The Canadian company offers a unique range of solutions for operating, managing and maintaining substations for Smart Grids, raising Alstom Grid’s portfolio of Smart Grid products to a whole new level. ASAT solutions are widely used by leading power companies in North America and around the world.

Thermal Power is set supply Harbin Turbine Company (HTC) with two additional GT13E2 gas turbine generator sets for Huaneng Power International’s combined-cycle plant in Tongxiang, in the province of Zhejiang. Two long term service

agreements were signed by Thermal Power for gas turbines of this type in Ivory Coast and Jordan.

TTWO MOORRE GT113E2 TTO BBE DELIVERRED IN CHINA

The deal is a major new order from the Italian public railway operator and is part of a total investment of €3 billion to modernise and enhance regional services. The trains will serve several regions around the country and provide a connecting service between Rome’s Fiumicino international airport and the Rome Termini train station. The Coradia Meridians will be designed and manufactured in Italy. Three different sites will be involved, with Savigliano designing, manufacturing and certifying the units; Sesto San Giovanni providing the traction systems and auxiliary switchers; Bologna delivering on-board signalling systems. More than 250 Coradia trains are currently in service in Italy, with another 13 in production.

TTRENNITAALIA OORDEERS 70 CORRADIA MMERIDIANN TRAINS FOR €€440 MILLIION

36

Alstom Grid and SICAE, a power distributor serving rural communities in France, jointly install and test a new power grid telecommunications solution which is carried through medium voltage power lines. The technology offers new possibilities for managing grid information and facilitates deployment of smart solutions to make grids more reliable and responsive.

NNNEWW TELEEECOOMMMMUNNICAATTIOONS

TEECHHNOOLOGGYY FOOOR SMMMARRT GRIDSS

Alstom and its Chinese joint venture, SATEE, sign a new contract with the Shanghai Metro Group for supply of traction systems with the latest Optonix technology. The systems will be installed in Metropolis train sets

for Line 3 (29 stations) and Line 4 (a circle line with 26 stations). Specially designed and developed for China, Optonix is tailored to high-speed metros

and is already in service on Line 15 of Beijing’s metro.

Eskom, South Africa’s largest public utility company, chooses Thermal Power to retrofit the low pressure steam turbines in its Kriel coal-fired power station. The contract is worth €110 million.

Long-term customer, General Electric Company of Libya (GECOL), awards a major contract to Thermal Services as part of a campaign to make all its gas power plants operational and connect them to the grid. The order covers supply of spare parts for 11 gas turbine units at five different power plants on the Mediterranean coast, as well as blades and vanes for various turbines that are critical to maintaining GECOL’s entire installed base. In all, Alstom has sup-plied GECOL with 24 gas turbines, or 50% of its production capacity.

RETTROOFFITTINNNG CCCONNTRACT PLAAAYS

TTO AALLSTOOMM’SS STREEENGTHS

THEERMMAAL WINNNS €2250 MMILLIONNN

CCOONTTRAACT IN LIBYA

DECEMBER 2012THE YEAR IN REVIEW


…wwith FFrenchh Primme Minisster Jean--Marc Ayrault, Alstom CEO Patrick Kron and Moorocccan and Freench offficials in aattendance. The Casablanca tramway is the

longgest eever bbuilt inn a single project,, and its 48 stations extend from the eastern ppart oof thhe cityy throuugh the centre to the southwest, covering a distance of 31 km. EEachh of its 74 Citadiis tramss is a doubble unit 65 metres long, accommodating over

6000 paassenggers aat a timee and carrrying as many as 250,000 a day. Forty-four Cittadiss tramms havve been in service in Rabat since May 2011. In 2012, Alstom Traanspport deelivereed nearlly 270 Citaadis train sets – 60% of all worldwide tram

deliveries for the year.

38

JANUARY 2013

Mounted on the end of the low pressure sec-tion of Alstom’s Arabelle nuclear steam turbine, the LSB 75 blade is 1.9 metres (75 inches) long. With an exhaust area of 58 m², the new blade reduces energy waste and increases electri-cal output. The LSB 75 was unveiled before a panel of customers during a seminar in Oskarshamn, Sweden.

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LOOONGEESST LLLAST STTAGEE BLAAADE FOOORR NNUUCLEEEAR

TTUURBBINEEES

National Power Transmission Corporation, a subsidiary of Vietnam’s national opera-tor (EVN), uses Grid to supply electrical materials and equipment for the My Tho (220 kV) and Vinh Tan (500 kV) air-insula-ted substations in the Mekong Delta. The Vinh Tan substation will play an important role in linking the Vinh Tan coal-fired power plant – Vietnam’s largest – to the national grid, with planned capacity of 5,600 MW.

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VVVIETNNNAAMEESSEE SUUBBSTTTAATTIOONNSS

Transport’s site in Le Creusot, France, delivered a record 2,201 bogies in 2012, including 784 for Citadis tramways. Investment, recruiting, close attention to suppliers and highly moti-vated employees combined to boost production to this unprecedented level. Le Creusot is Alstom Trans-port’s worldwide centre of excellence for bogies.

LEE CCREEUSSOTT SSETTS AA RRECCORRD

FFORR BBOGGIE PRRODDUUCTIIONN

Phase one of the Atlantic Wind Connection (AWC) project calls for construction of the New Jersey Link, a 3 GW transmission line buried under the sea floor, to connect offshore wind farms with onshore power grids. Two offshore substations will incorporate Grid’s 320 kV HVDC system, which includes voltage source converter technology to transform the alter-nating current generated by the offshore wind farms into direct current for transmission. Once on land, the direct current will be converted back to alternating current for homes and businesses. Construction on the first 304 kilometre section will begin in 2014. Grid’s partner for the project is Bechtel, the top engineering and construction group in the US. When complete, the line will run from Virginia to New York and will enable New Jersey to generate more than 22% of its electricity from renewable sources by 2021.

GRIDDD’S HVVDC TTEECHNNOLOGY CHOSSENFOR AAMERRICA’S

FIIRST OOFFSHHHORE ENERGGY LLINKK

The influential British magazine, Wallpaper, presents its Design Award 2013 to the AGV .italo train, made by Alstom for Italian operator, NTV. The prestigious award recognises the high-speed train as one of the most beautiful and innovative products on the market. The AGV .italo took top honours in the “Life enhancer of the year” category for offering passengers a “new travel experience”: comfort, on-board services, spaces customised for a variety of passenger activities and elegant lighting and materials. In operation since April 2012, the innovative train serves nine cities, connecting Turin and Venice to Salerno via Bologna.

AAGV .ITAALO CCROWWNEED ““BEST OOF TTHE BBESTT”

THE YEAR IN REVIEW


As the soole supplier to a consortiiuum led by EEDF EEnergies Nou-velles, chhhosen to ooutffit three ooffshhhore wind ffarms in the English Channell and tthe AAtlantic, Alsttomm will manuufacturre 240 6 MW

Haliade™™™ 150 wind tturbines, tthe mmost poweerful oon the market. The two pplantss in SSaiint-Nazairre wwwill be dediccated to assembling

nacelleess and mannuffacturing genneerators forr the HHaliade. Two other plaants inn Cheerbbourg willl rouund out thee projeect’s manufac-turing assssets, prodduccing turbiine ttowers andd bladees. Under this

manufacttuuring plann, AAlstom will ccrreate somee 1,000 direct jobs in France’ss marinne reeneewables ssecttoor, plus anoother 44,000 indirect

jobss ammonng its suppplieerrs and conttractoors.

Then

othtu

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Saint-Nazaire, 21 January 2013: the first stone is laid for two of four new Alstom offshore wind turbine plants, kicking off development

of a new industrial cluster. French Prime Minister Jean-Marc Ayrault presided at the ceremony, along with Alstom CEO Patrick Kron.

ALSTOOOM LLAUUNNCHESS CCCONSTRRUCTTION OFFF ITSS FIIRRST FRENNNCH PLAANTTS

IIN OOVER 330 YYYEARS

40

Strong infrastructure and a long tradition of manu-facturing heavy equipment for nuclear energy pay off for a Volgodonsk plant as Alstom-Atomenergomash (AAEM, Thermal Power’s joint venture with its Rus-sian partner) chooses the site to manufacture gene-rator and Arabelle turbine components. Located near the Black Sea, the facility also puts AAEM in an excellent position for new projects. In the near term, the Volgodonsk plant will manufacture two VVER-1200 nuclear reactors for the Baltic project in Kaliningrad.

After two years of commercial operation in Unit 3 of the Ling Ao II nuclear power plant in southern China, the China Guangdong Nuclear Power Company (CGNPC) signs the final acceptance certificate for the very first Arabelle turbine delivered to the country. Alstom also supplied the turbine for Unit 4, with acceptance expected in the autumn of 2013. The first site to operate Arabelle technology outside France, Ling Ao II is running at full power, with efficiency well above contract levels.

AARRAABBELLLLE IINN RRUUSSIIIA

…AANDD INN CHHHINA

Alstom Grid and Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, sign a global alliance agreement aimed at offering joint Smart Grid solutions. Together, the two companies will launch the industry’s first real-time, Cloud-based integrated distribution management systems (IDMS), as well as a new Cloud-based demand response management system (DRMS). Built on e-terra 3.0, Alstom’s network management software platform, these innovative services will improve cybersecurity, make management of Smart Grid information flows more responsive and increase reliability.

JANUARY 2013THE YEAR IN REVIEW


FEBRUARY 2013

Long a centre of Alstom hydro power expertise, Grenoble is home to the new headquarters of Alstom’s global technology and hydro power centre, the headquarters for all hydro power R&D. The centre also coordinates Alstom’s five other global technology centres, located in Birr (Switzerland), Sorel-Tracy (Canada), Vadodara (India), Taubaté (Brazil) and Tianjin (China). A long-term partner in the test bench at the University of Grenoble’s hydraulics department, Alstom marks the occasion by announcing the creation of an industrial chair in hydraulic equipment at the Institut National Polytechnique. With this range of skills now assembled in Grenoble, Alstom enjoys unequalled scientific and industrial expertise in hydraulics and electricity.

EEEXTTENNSIONN OOOF ALSSTOOM HYDRRRO’’S GGLOBAALLL TECHHNOOLOGY

CCENNTTRRE INN GGGRENOOBLLE

The Rideau Transit Group consortium and Alstom Transport sign a contract for delivery of 34 Citadis Spirit vehicles for the first tram-train line in Ottawa, Canada’s federal capital. The €400 million contract also includes maintaining the vehicles for 30 years. The deal marks the worldwide debut of Citadis Spirit, a version of the Citadis Dualis – now operating in the French cities of Nantes and Lyon – that is adapted to Canada’s harsh winters. The tram-trains will be produced at various sites in France, the United States and Canada and the new line is expected to be fully operational in the spring of 2018.

TRAANSPOORT BREAKSS INTO A NNEW MMARKKET IN NORTHH AMERRICA

Three turbine islands for coal-fired plants in IndiaNabinagar Power Generating Company Ltd. has placed an order worth more than €350 million with Alstom Bharat Forge Power Ltd. (ABFPL), the joint venture created in 2009 by Alstom and the Indian group, Bharat Forge. ABFPL will supply three 660 MW supercritical coal turbine islands for coal-fired power plants in nor-thern India. The deal is worth €185 million for Alstom and follows a similar contract, awarded to ABFPL in April 2012, for two supercritical units at the Solapur power plant in Maharashtra.

42

EGAT, the country’s biggest power producer, chooses the Thermal Power-Sumitomo consortium for turnkey delivery of a combined-cycle plant for North Bangkok 2. For a total of €225 million, Alstom will supply two next-generation GT26 gas turbines, turbogenerators, heat recovery steam generators (HRSG), steam turbines and the distribution control system, making North Bangkok 2 the world’s first combined-cycle power plant to feature Alstom’s upgraded GT26 gas turbine. Thailand also has the largest fleet of power plants incorporating the original GT26, with seven units in operation. These include the Bang Bo site, where Alstom’s service agreement has been renewed through 2023. Alstom will also upgrade the plant’s turbine in 2014.

FIRRST NEWW GGT26 ORRRDERS IN THAAILAND

During testing at Alstom Grid’s facility in Villeurbanne, France, a high voltage direct current circuit breaker interrupts currents exceeding 3,000 amperes in less than 2.5 milliseconds. This constitutes a major technological breakthrough: the circuit breaker is a key element of power network protection in the event of a short circuit, particularly in building Supergrids. The tests were conducted under the leadership of RTE, the French transmission system operator, as part of the EU’s TWENTIES project, which seeks to integrate wind power and other renewables into the European electrical grid by 2020.

WWOOORRLLDD LLEAAADEEERRSSHHIP IN VVERRRYY HHIGH

VVOOLLLTAAGGE DIRREECT CUURRRRRENNTT GGRRIDS

FEBRUARY 2013

Alstom Renewable Power receives a record order from Renova Energia, the wind power leader in Brazil. Under a memorandum of understanding signed on 6 February, Alstom will supply, operate and maintain 440 onshore wind turbines for Renova’s wind farms in the state of Bahia. Based on the ECO 100 platform, the turbines will have output capacity of 2.7-3 MW each. Because the ECO 100 range has three rotor types ranging from 100 to 122 metres in diameter, developers can select the best option for each turbine’s position and combine two or three rotor types on the same site to optimise their capacity factor. The turbines will be manufactured at Alstom’s Camaçari plant, which has initial production capacity of 300 MW a year.

€€1 BIILLLLION WWWINND PPOWEERRR CONTTRAACT

IN BRAAAZIL

THE YEAR IN REVIEW


TennneTT, tthe Duttchh transmission system operator, chooses Alstom Grid for the DolWin3 project, which wwill creaatte a powweer highway linking offshore wind farms in the North Sea to Germany’s mainland grid.

AAAs thee generaal ccontractor for the project, Alstom will supply advanced technologies for alternating ccurrreent oofffshore suubstations and for onshore transmission of high voltage direct current energy (320 kV,

9900 MMW), ass wwell as cable systems to link the wind farms to the grid. These consist of an 83-km uundderseea cable aannd a 79-km onshore cable stretching from the coast to the converter stations in Lower Saaxxonyy. Alstomm hhas chosen highly experienced partners for the project – platform constructor, Nordic

YYYardss aand cabblee supplier, Prysmian. DolWin3 is TenneT’s eighth grid connection project using high voolltagee ddirect ccurrrent and it will enable the operator to deliver 6.2 GW of offshore wind power to the

onshore grid. The project should be operational in late 2017.

44

MARCH 2013

Alstom and NaturEner sign a €420 million agreement for the supply of 138 ECO 110 wind turbines, which will generate 414 MW of power for the WildRose 1 and 2 wind farms in Alberta province. The agreement also calls for maintaining the farms over a 10 year period. Alstom will assemble the wind turbine nacelles in its factories in Amarillo, Texas (United States) and in Buñuel, Spain.

EEENTTERRING THHEEE CANAADIAN WWWIND MMAAARKETT

Harbin Turbine Company (HTC) awards the Group a new contract for the supply of two additional GT13E2 gas turbine generator sets – one for each unit of Huaneng Power International’s combined-cycle plant in Suzhou, near Shanghai. The deal comes on the heels of three previous orders for Alstom gas turbines signed with Harbin in recent months.

Alstom wins a contract to provide steam turbine retrofit services for unit 2 of American Electric Power’s D.C. Cook nuclear power plant in Bridgman, Michigan, following a successful retrofit of unit 1. The work will increase current capacity of 1,160 MW by 60 MW, enough to power 60,000 additional homes. In 2011, AEP awarded Alstom Thermal Power a major contract to upgrade the low-pressure steam turbines across its entire fleet of 1,300 MW coal-fired power plants. AEP was also the customer when Alstom built the first carbon capture and storage pilot unit in the US, inaugurated in 2010.

FURRTHHER SUCCCCESS INNN CHINNESE GGGAS PPOOWWERR MARRKET

NEW COONTRACTTT TO RRETTROFIT

AA USS NUCCLLEAR PLAAANT

THE YEAR IN REVIEW


In January 2013, Alstom Transport and Kamkor, a subsidiary of the Kazakh national railway company (KTZ) that specialises in rolling stock maintenance, created a 50/50 joint venture for the production of point machines. The first 10,000 machines ordered by KTZ will be imported from Alstom’s Bologna plant, during renovation of existing workshops in Almaty, in southern Kazakhstan. Transferring production from Bologna to Almaty is part of Alstom’s strategy of getting closer to customers through geographic expansion. Alstom’s P80 point machines have been operating successfully for two years at the railway station in Astana, the Kazakh capital. Their mechanism is protected from ice and snow and does not require heating.

100,0000 POIINT MAACHHINES FORR

KAAZAAKHH RRAILLWAAYS

Alstom Grid breaks a new record, manufacturing one of the world’s largest 710 MVA generator step-up transformer at its site in Gebze, Turkey. The massive unit is intended for the Sostanj power plant built by Alstom Thermal Power in Slovenia. In addition to its outsize capacity, the new transformer also features a distinctive MS300 monitoring system that allows operators to monitor wear and tear closely and to use that information to manage the unit’s maintenance and lifecycle more efficiently.

Bharat Heavy Electricals Limited (BHEL) chooses Alstom Thermal Power to supply components for three 660 MW supercritical boilers for Nabinagar Power Generating Company Limited. Alstom has licensed its supercritical boiler technology to BHEL and will provide the technical assistance required to complete the project.

THRRREE SUUPPERCRIITICAL BOOILLERS

FFORR IINDIA

4646

Believing that technology and new business models contribute to solving social and environmental issues, Alstom leads in designing innovative, environmentally-conscious technology solutions for power generation, power transmission and transport.

OUR VISION

OUR PRINCIPLESWe are shaping the future responsibly:

With Alstom’s technologies and solutions• our products are designed to minimise the use of natural resources and safeguard people and the environment,

• our solutions help our customers limit their impact on the environment,• our products and solutions provide access to electricity and facilitate mobility, ensuring sustainable economic growth and social progress;

with our partners and stakeholders• we lead the way in innovation, working together to achieve a sustainable value chain,• we support the development and improvement of living conditions of surrounding communities;

with our operational approach• we work ethically and safely, with respect for people and the environment,• we share an approach focused on our values of trust, team and action.

47ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT 47ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

48

Dirk Forrister, what is the role of your organisation? Dirk Forrister: The International Emissions Trading Association has 150 members throughout the world. These are companies working on climate change pro-grammes, technological solutions, emissions markets and climate financing for the long-term management of carbon gas (CO2) emissions.

What do you think about carbon market trends?D.F.: Overall, many countries are turning to carbon markets as the best solution to climate change. In Europe, the carbon market is adjus-ting to the drop in demand related to the econo-mic crisis. As a consequence, in the light of low demand and low prices, the EU is now conside-ring how to improve the carbon market’s perfor-mance. In other parts of the world, new markets are starting as countries begin to shoulder their part of the global burden of managing carbon emissions. These countries wish to take advan-tage of the opportunities offered by the market.

Giles Dickson, what is Alstom’s position on the carbon market? Is today’s low price of carbon offset hindering the development of carbon-free solutions? Giles Dickson: CO2 emissions trading is an effi-cient way to encourage investment in low-carbon technologies and infrastructure and to facilitate the transition towards low-carbon economies. But today, where they exist, carbon prices are too low to provide the required incentives and leve-rage. In Europe, this has contributed to the delay in a number of investments, e.g. in renewables, carbon capture and storage projects and, to some extent, combined-cycle plants.

In terms of funding for this sector, what are you expecting from businesses and governments?D.F.: Market prices certainly mobilise a significant share of finance. But governments also have a key role to play in terms of funding research and develop-ment. Today’s challenge is that budget constraints are undermining this objective. I am currently working in

Dirk Forrister, President and CEO of the International Emissions Trading Association.

GETTING INVOLVED, WITH ALSTOM

MEETING THE CHALLENGE OF CLIMATE CHANGE

Alstom’s vision clearly presents the company’s commitment to technologies and solutions to

meet the challenge of climate change. Dirk Forrister, President and CEO of IETA, and Giles

Dickson, Vice President in charge of environmental policies at Alstom, share their thoughts on

the impact of the carbon gas (CO2) market on the commitments undertaken by businesses.


Washington and I know that across town at the Department of Energy, which is in charge of technology research, officials are under consi-derable budget pressure on techno-logy R&D.

G.D.: We agree that, alongside carbon pricing, we need specific incentives to encourage investment in low-carbon technologies. That means funding for R&D and, to an increasing extent, for the demons-tration at scale of new technologies. We also need financial support for the early deployment of technolo-gies whilst they are still progressing down their cost curves.

Where are we in terms of carbon capture and storage?G.D.: We are making significant progress in this area. We have successfully pilot-tested three types of capture technology: oxy-fuel combustion, post-combustion using chilled ammonia and post-combus-tion using advanced amines. The next stage is full-scale demonstra-tion. The government support we need for this has been slower in materialising than we had hoped, but we had some good news recently with the UK government’s selection of Alstom’s 426 MW White Rose project at Drax Power Station for funding.

To conclude, what do you consider to be the major challenges ahead in the fight against global warming?D.F.: While climate change is at the top of the envi-ronmental agenda, it faces two main challenges: its complexity and a tough economic atmosphere. International negotiators are preparing strategies to address these challenges at a major global climate summit in Paris in 2015. As that date approaches, this is a great time for companies working in this sector to prepare for a big step forward. As nations adopt policies in anticipation of the summit, they will create opportunities for business in technology, trading and finance. Companies should gear up for a whole new scale of climate action around the world.

G.D.: Many countries now recognise it is in their own interest to invest in low-carbon energy and infras-tructures and are developing policies to support this. Sixteen emerging economies are preparing CO2 pricing schemes with World Bank support: for example, China

plans to bring in a national emissions trading scheme around 2016-2020. Alstom is supporting these ini-tiatives through a “Business Partnership for Market Readiness” in the countries concerned. The point is that the new policies will help participating countries reduce their emissions, but also improve their energy efficiency and security and develop low-carbon indus-tries. Combating climate change makes economic as well as environmental sense.

Giles Dickson, Vice President, Environmental Policies and Global Advocacy at Alstom.

Between 2002 and 2011, equipment installed and solutions delivered by Alstom Thermal Power and Alstom Renewable Power enabled their customers to save 207 million tonnes of carbon gas emissions per year, i.e. 30% more than total CO2 emissions in the Netherlands (160 million tonnes per year).

207 MILLION TONNES OF CO2 SAVED PER YEAR

50

Alstom’s growth is underpinned by a culture of integrity and scrupulous respect for ethical

rules with regard to the Group’s stakeholders. Keith Darcy, Executive Director of the

Ethics & Compliance Officer Association, and Jean-Daniel Lainé*, Senior Vice President for

Ethics & Compliance at Alstom, review the progress made by countries and companies in

integrating these values.

Keith Darcy, Executive Director of the Ethics & Compliance Officer Association.

Keith Darcy, you are the head of the Ethics & Com-pliance Officer Association. What is the purpose of your organisation?Keith Darcy: Our organisation comprises 1,400 mem-bers worldwide. Our mission over the last 21 years has been to provide our members with the tools and resources to manage reputational risks and fight cor-ruption and fraud.

What has been the impact of the anti-bribery convention signed by OECD member states in 1997?K.D.: The OECD Convention passed in 1997 set the stage for significant public and private sector initia-tives. They include the United Nations Convention against Corruption which came into effect in 2005, the addition of a tenth principle against corruption to the UN Global Compact in 2004 and the African Union’s anti-corruption convention adopted in 2003. In addi-tion, Transparency International, which has grown into a highly committed NGO, along with the World Economic Forum’s Partnering against Corruption Ini-tiative (PACI) have made significant contributions to the fight against corruption.

What has changed over the last five years?K.D.: We live in the age of information where there are no secrets and there is no place to hide. Henceforth, everyone is subject to new standards of transparency. Even ordinary citizens have the power to fight cor-ruption through public and in-house hotlines, micro blogging and social media channels. The worldwide

Corruption will lessen

as people

become more aware of the damage it does to competitiveness.


MAKING ETHICS

A PRIORITY

* On 1 July 2013, Jean-Daniel Lainé retires, to be replaced by Romain Marie, formerly Senior Vice President Internal Audit and Control.


community now has vastly superior means to monitor issues concerning corruption.

Jean-Daniel Lainé, you run the Ethics & Compliance department at Alstom. Why have you included an ethical aspect in the fight against corruption?Jean-Daniel Lainé: It goes without saying that a company such as ours must strictly respect national laws and international regulations. We decided to go a step further and include an ethical aspect in our policy. For a multinational, an ethical underpinning promotes sus-tainable growth and performance impro-vement. A company which acts ethically in its business transactions gains respect from its competitors and customers... and will often attract better ratings from investors. Moreover, values related to personal integrity are the lifeblood of corporate culture. A company such as ours encourages employees to use their judgment to make appropriate decisions. In so doing, we can learn from any mis-takes that may have been made in the past and prevent future misconduct.

In other words, you are explaining that ethics have an impact on performance?J-D.L.: Yes, we are absolutely convinced that integrity is a major factor in determining performance. An ethi-cal stance drives our teams to focus solely on excel-lence in terms of technology, production, resources and the competitiveness of our projects, since we have no alternative but to rely upon our own funda-mental assets. For our Group, clean business is great business, and an ethical company attracts and retains talented people. Alstom is, and will always strive to be, this kind of company.

Keith Darcy, we know that not all countries are subject to the convention. Doesn’t that create an unlevel playing field?K.D.: I would have replied ‘yes’ to that question five years ago. But differences are steadily diminishing. Companies are increasingly recognising the risks of not having implemented robust anti-corruption poli-cies within their organisations. A growing number of countries are working closely together to tackle this very difficult issue of corruption. In years to come, as more weight is given to transparency, global coope-ration and zero tolerance in the private sector will be major drivers of the fight against corruption.

To conclude, how do you ensure that ethical rules are applied within Alstom?J-D.L.: What is most important is to foster a shared culture of integrity among all Alstom employees. Next, there must be a totally independent structure with full authority to deal with ethics and compliance, in addition to having an appropriate position in the hierarchy. Moreo-ver, a structured and highly detailed integrity programme must be implemented to cover the entire spectrum of risk and in particular, corruption. The core team of the Ethics and Compliance department can also count on a large community of approximately 800 Alstom people with specific responsibilities in this field, including com-pany lawyers, internal audit and control teams, risk managers and the Ethics & Compliance ambassadors appointed worldwide, bearing in mind that integrity is the responsibility of every single person in the Group.

Jean-Daniel Lainé, Senior Vice-President for Ethics & Compliance at Alstom.

At Alstom, we are

absolutely convinced

that integrity is a major factor in determining performance.

52

Ronan Stephan, Chief Innovation Officer at Alstom.

Jian Lu, in your opinion, what innovation challenges do companies face right now in the area of sustai-nable development? Jian Lu: Sustainable development has special significance in Hong Kong, where there are seven million people living in an area that is only about one-tenth the size of Paris and its surrounding region. Despite the high energy demand resulting from this population density, Hong Kong’s per

capita energy consumption for transport is the lowest of all major cities in mature economies. This impressive performance is mainly due to its highly developed, flexible public transport sys-tem, which intelligently combines metros, buses, trams, ferries and taxis. Here in Hong Kong, we therefore have a particular stake in actively deve-loping the use of carbon-free energy and ener-gy-efficient solutions in buildings. We face two challenges – to use more of these new energies and to “intelligently” regulate electricity consump-tion. Alstom’s work on Smart Grids has produced innovative solutions for regulating input and out-put and ensuring the overall stabilisation of the electricity grid.

Ronan Stephan, what future do you see for innova-tion at Alstom? Ronan Stephan: There is a growing demand for optimised allocation of energy production based on


BRINGING INNOVATION TO SUSTAINABLE DEVELOPMENT

Innovation is a source of development and differentiation for Alstom solutions. Jian Lu,

Dean of the College of Science and Engineering at the City University of Hong Kong

(CityU*), and Ronan Stephan, Chief Innovation Officer at Alstom, look at how innovation

currently contributes to sustainable development goals.

What we want is to

encourage the development of scenarios and solutions for the future with a

long-term collaborative R&D

agreement.

* CityU came first in Shanghai Jiao Tong University’s 2012 university ranking for Hong Kong and mainland China and 32nd worldwide in the Engineering/Technology and Computer Sciences field.


Jian Lu, Dean of the College of Science and Engineering at the City University of Hong Kong.

consumption needs, which calls for greater conver-gence between the energy and mobility businesses. This can be achieved with intelligent coordination or supervision distributed across the various grid components. We are dealing with systems and with systems of systems, and to develop them we need people skilled in computer engineering, applied mathematics, modelling, simulation, sensors and ‘big data’ databases, among other fields. At Als-tom, innovation comes from maintaining a close, strategic dialogue between the engineers and the architects who design and build tomorrow’s ‘smart’ solutions. These cross-disciplinary interactions are absolutely vital!

Professor Lu, this brings to mind the issue of par-tnerships combining fundamental research and innovation. What are your views on this topic?J.L.: CityU’s strategy is to form partnerships with two types of companies: innovative SMEs capable of creating and developing emerging technological solutions and large companies working on long-term developments. That’s why we chose to create special ties with the Global Fortune 500, the world’s 500 largest companies. Alstom is one of those companies.

Ronan Stephan, what is Alstom’s approach to open innovation?R.S.: Open innovation requires internal processes and a company culture that promotes interaction with other members of our ecosystem, e.g. custo-mers, suppliers, research institutes and innovative companies. A great example of this is Metrolab, a completely independent co-venture financed by RATP (the Paris transport authority) and Alstom. Metro-lab’s teams are imagining the metro of the future; they have the opportunity to start afresh from a blank page, sharing the best available technologies and challenging tried and trusted concepts. What we want is to encourage the development of scenarios and solutions for the future with a long-term colla-borative R&D agreement.

Jian Lu, to conclude, what levers do you think can companies use to accelerate innovation? J.L.: The biggest lever is interaction between academic researchers and industrial researchers or engineers: in other words, between fundamental and applied tech-nological research. Medium to long-term interaction of this kind is essential. It is the real innovation trigger.

How do you intend to accelerate innovation at Alstom?R.S.: The Alstom Group consists of four business Sec-tors whose skills are among the world’s best. At first glance, one might think that there is little room for interaction among these different Sectors. But acce-lerating innovation means getting the most out of the lever that Jian Lu just described and also applying the open innovation principles I mentioned earlier, inside the company. This means making sure that expe-riences and information are shared as freely as pos-sible among the various communities and R&D teams. This cross-pollination is a key performance driver! For example, close collaboration between telecom network and energy grid teams are giving rise to new ‘smart’ solutions that will make electricity distribu-tion more flexible and better address environmental concerns. Tackling these issues is the way to accele-rate innovation.

Interaction between

fundamental research

and industrial R&D is how innovation happens.

54

Philippe CochetPresident of Alstom Thermal PowerExecutive Vice-President of Alstom.


Philippe Cochet, President of Alstom Thermal Power, looks back at the Sector’s year.Our growth strategy is built on four components that played a decisive role in our results: service for our competitors’ installed base as well as our own; an expanded offer that now includes sale of individual components and islands as well as turnkey power plants; our focus on high-growth regions, including China, India, Southeast Asia, Russia and the Middle East; and finally, our return to the 60Hz market, with the more specific target of using com-bined-cycle plants to get back into the gas business, primarily in the US. With this strategy, we have increased our market share, despite tough conditions, particularly in Europe and the United States. But technology played a role too.Of course, and that’s true for both services and new power plants. In the new equipment market, for

example, our GT13E2 mid-sized gas turbine continues to be very successful. The past year proved once again that it is an excellent machine - we sold five in China during 2012/13, making a return to the Chinese gas

turbine market. And do not forget that the new GT13E2, which we developed during the year, delivers even better performance than its predecessor. How do the year’s orders stack up in terms of output?In all, we sold 12 machines, or two less than the previous year, if you

combine the GT13E2s with our high-power GT24/26 gas turbines, including the next-generation GT26, which Thailand was the first to order. Because we sold more large turbines and combined-cycle solu-tions, output rose from a little under 3,000 MW to more than 5,000 MW. The market is well aware of our technological advances.

GAINING ACCESS TO TOMORROW’S TECHNOLOGY, WITH ALSTOM

THERMAL POWER

With the broadest offer of power generation products and services on the market, Alstom Thermal Power provides customers with solutions that

constantly increase efficiency and reduce energy consumption. These economic and environmental strengths are the foundation for a successful strategy of

growth, technological development and operational excellence. In the extremely volatile market of financial year 2012/13, the Sector booked orders

worth €9.6 billion, an increase from the previous year.

The market is well aware of our

technological advances.

56 GAINING ACCESS TO TOMORROW’S TECHNOLOGY, WITH ALSTOM

What share of your results comes from the Service business?Orders increased 18 % over the year, representing nearly 55 % of the total received. This increase is lar-gely due to the success of our innovative solutions for upgrading and updating the installed base. And when I say “installed base”, I mean not only our own equipment but also our competitors’, an area where we have been very successful. Growth, technology, and operational excellence – your third strategic driver. What were the 2012/13 highlights for operational excellence?We launched three programmes. The first focuses exclusively on our operational excellence, and we

are applying it in all our plants around the world, as well as to all our internal processes. The second programme is dedicated to product excellence and is geared around our customers’ three core needs: redu-cing the cost of power, lowering their environmental footprint and continuously improving the flexibility and reliability of their assets. Finally, we launched a dedicated customer relations programme. With the market changing so rapidly, it is important to stay close to our customers and anticipate their needs so that we can offer them the right solutions. Under this programme, we meet regularly with our customers at both the operational level – having our Service people meet with power plant operators, for example – and the executive level.

One unique feature of the GT13E2 turbine is that it can operate in two different modes. One maximises its output at base load, while the other offers more flexibility by increasing the interval between scheduled inspections. That, in turn, increases availability and reduces maintenance costs for Alstom’s customers.

GT13E2: POWER AND ECONOMY


Every time we meet with them, we present Alstom’s entire Thermal and Renewable portfolio, they present their needs and we agree on a joint plan for following up. This programme has met with a very positive res-ponse from customers.

How is customer behaviour changing in this un-stable economy?They’re confronted with the volatility and uncertainty of the power market; they want products that meet their requirements and they want them fast. And here’s another point: it is a buyer’s market, so there is strong price pressure. At the same time, customers are consolidating their purchasing practices. What used to be handled with our customers at power plant level is now handled at regional or even group level, which also presents business opportunities for us. How do you respond to the emergence of new competitors?Competition is fierce in some areas and is driving prices down, especially for turnkey power plants. But because we maintain strong relationships with these EPC (engineering procurement construction) contrac-tors, our strategy of offering power island components is an effective response. Just look at our orders in South Korea itself. We are going to supply the two 600 MW steam turbines at Dongbu, as well as the generators for the biggest ultra-supercritical power plant the country has ever built. Alstom is expanding its presence in fast-growing countries. What share of your 2012/13 results did they contribute?Their relative share fell slightly for the reasons I men-tioned earlier – our booming service business, which is largely concentrated in North America and Europe where the installed base is oldest. And also because we won some large contracts for new power plants in Europe. How is the Sector positioned in the emerging economies?Our manufacturing base is strong. We have a very solid presence, especially in India, but also in Malaysia and, of course, in China where we have a sizeable manufacturing base, particularly in Wuhan, site of the world’s largest boiler factory, and in Beijing for steam turbines and generators. Another big market where we are stepping up our local presence is Russia, where we and our partner, Atomenergomash, will build a plant in Volgodonsk, near the Black Sea, to manufacture steam turbines and turbine generators for conventional islands in nuclear plants. Another important development is that many customers in fast-growing markets are asking us to execute part of their projects locally, which leads us to develop local expertise – in areas like engineering, manufacturing and service – as close to these markets as possible.

Globalisation of business, multiple partnerships and licensing agreements, how does Alstom protect its intellectual property?This issue has a great deal of personal importance for me. What’s at stake here is our competitive edge and a unique group of assets that we alone should control. To preserve these assets, we have strengthened our teams of IP specialists at corporate level to ensure that our intellectual property rights are enforced across all our markets. As in previous years, we took legal action on a number of cases, when our policy of systemati-cally defending our intellectual property justified such action. We continue to selectively grant our partners, on a case-by-case basis, the right to use some of our technologies for supercritical coal-fired steam plants, fume treatment, heat recovery steam genera-tors and so on. And we are filing new patents systematically too. In all, we filed more than 850 for 2012/13 alone, which, you have to admit, is considerable. Alstom is the market leader for air quality control, but you’re also the leader for CO2 cap-ture and storage. Where do things stand there? The issues here are com-mercial profitability – since the price of CO2 is still far too low – and acceptable storage, which is very controversial. As a result, we have reoriented our R&D significantly, and we are now looking beyond carbon capture to focus on using CO2 rather than storing it. We are exploring two major avenues: making fertili-ser and recovering oil from end-of-life wells. This is already getting traction in some markets and could continue to grow. Another key technological issue is reducing environ-mental footprints. Are you pursuing this at every level?There are two sides to sustainable development. First, there is what we are doing for our customers – pre-serving air quality, making power plants more efficient and reducing water consumption. Then there is what we are doing internally and that means choosing the right materials for our products and lowering our own energy footprint by reducing our consumption of water, electricity and heating and by cutting greenhouse gas emissions from our plants. Finally, there is improving the well-being and safety of all of our employees in the workplace – an issue that I take particularly to heart and that guides what our managers do every day.

With the market changing so

rapidly, it is important to stay close to our customers and anticipate

their needs so that we can offer them the right solutions.

58

Rhein Energie places its first order with Alstom, for turnkey construction of Niehl 3, a 450 MW combined-cycle heat and power plant in Cologne. The deal includes a 15-year service agreement for plant maintenance and remote supervision by Alstom’s Plant Support Centre. Overall, Rhein Energie will invest €350 million. The project is part of Germany’s new energy policy which calls for construc-tion of highly efficient combined heat and power plants. Thermal Power has created comprehensive, customised technology for Niehl 3. The package includes an ecoHeat KA26 combined-cycle plant – consisting of a GT26 gas turbine, a steam turbine, a turbogenerator, and heat recovery systems – as well as district heating facilities. With efficiency of nearly 85 %, Niehl 3 will be one of the world’s most effective plants, generating savings of 500,000 tonnes of CO2 annually while supplying enough energy to power 1 million homes.

THERMAL POWER WINS MAJOR GERMAN CONTRACT



FOCUS ONECO-SOLUTIONS

Among the challenges of the global power generation sector, water dependency and use is growing in importance as a criterion for assessing the physical, economic and environmental viability of power generation assets.

SOLUTIONS FOR IMPROVING THE WATER FOOTPRINT OF OUR OFFERINGS

The water footprint of power generation units involves the withdrawal and consumption of water as well as the impact on the quality of surrounding water resources. In thermal power generation, the use of water is a deciding factor because it affects the cooling process and its performance.

To respond to the environmental challenge posed by water usage in power generation, Alstom is committed to developing and adapting solutions to optimise the water footprint of thermal power plants in accordance with the local needs and regulatory constraints of its customers. Alstom Thermal Power’s solutions are thus based around three main pillars:

• Reducing dependency on water from external sources;

• Enhancing water use efficiency;

• Lowering the impact of discharge on water quality.

2 - BOOSTING WATER USE EFFICIENCY • Raising energy efficiency to achieve

lower water use by the cooling system • Greater use of internal water recycling

3 - LOWERING THE IMPACT OF DISCHARGES ON WATER QUALITY

• Lower discharge volumes • Limiting the chemical and thermal effects of discharges

wer

1 - REDUCING WATER DEPENDENCY • Air-cooling systems and low water usage

power generation • Use of lower quality water resources

(seawater, wastewater, etc.)

1 REDUCING WATER DEPENDENCY

y g

3 - LOWERING THE IMPACT OF DISCHARGES

BOOSTING WATER USE EFFICIENCY Raising energy efficiency to achieve lower water use by the cooling system Greater use of internal water recycling

MANAGEMENT OF DISCHARGES TO AIR

SAMPLING AND DISCHARGE OF

COOLING WATER

Boiiler Steam turbine

Cooling tow

WATER SAMPLING AND TREATMENT

1 REDUCING WATER DEPENDENCY • Air-cooling systems and low water usage

power generation • Use of lower quality water resources

(seawater, wastewater, etc.)Chimney

60

Jérôme PécressePresident of Alstom Renewable Power

Executive Vice-President of Alstom.


Jérôme Pécresse, President of Alstom Renewable Power, analyses the renewables market and the outlook for growth.We are confident about the medium-term outlook for all the renewable energy sources we offer, but there is no denying that in the past year, the market for new equipment declined by around 30 % worldwide – and became more competitive in the process. Considering this difficult context, on the sales side we turned in a satisfactory performance. Orders were firm at around €2 billion (much of it from wind projects in Brazil), and market share in new hydro power equipment was above the average for the past few years.

In addition to these orders, you had two major successes in wind power.The first was winning the tender for French offshore wind power with our partner, EDF EN. We are their sole turbine supplier, which translates to around €2 billion in orders over the next few years. The second was the memorandum of understanding we signed

with Renova to supply onshore wind turbines to Brazil. That deal is worth around €1 billion, half of which was actually ordered in March 2013. I’d also like to add that the US Department of Energy chose us and our partner, Dominion Resources, to develop a turbine for an East Coast pilot project intended to jump-start the growth of offshore wind power in the United States.

Is the world adopting renewables?One thing we need to keep in mind about renewable energy is that when we look at the worldwide instal-led base today, we are talking about 80 % hydro power. The general trend towards carbon-free energies is still strong in all of the mature economies, with a tenden-cy to spill over into the emerging economies. The ocean energies will take some time, but for onshore wind and other established sources, many countries are now fairly close to grid parity, which means that renewables can make gains without subsidies. Brazil is one example of this.


RENEWABLE POWER

Alstom Renewable Power offers hydro power, on- and offshore wind power, geothermal, biomass and solar thermal energies (and soon ocean energies), generators, every type of turbine and a comprehensive range of services – a portfolio of solutions that is spurring the growth of carbon-free energies around the world. But the European economic crisis and slowing growth in

emerging countries took a toll on Renewable’s orders, which remained steady at €2 billion over the financial year.

62

What does this overall trend mean for Alstom?Latin America still holds potential for major projects in hydro power and onshore wind. In China, big hydro

power projects should make a comeback in the near future and we also expect to see invest-ments in offshore wind. Then there is Africa, which will occupy an important position on the worldwide renewables chess-board. We have won a major hydro power contract in Ethiopia and we are also working on wind contracts there and in Morocco. And over the next few years, we expect the commercial solar

thermal market to grow considerably in the United States, the Mediterranean, the Middle East, South Africa and Australia.

But hydro power is still Alstom’s greatest strength. What’s the outlook for that market?With our genuinely global presence, we have the highest market share for new equipment – and we are also the leader in large production units. We believe strongly in the growth potential of hydro power. One sign of this is the plant we are building in Russia as part of our joint venture with RusHydro. They are the leading player in Russia’s hydro power market, and they’re opening doors for us in the Russian market and other CIS markets. Another good example is Bhutan, where we are going to set up a Hydro service centre – again as part of a joint venture, this time with Druk Green Power, the major local power company.

Does energy storage open up a new role for hydro power?A very important role, which is too often under-estimated, particularly when you consider wind and

The Aquelva dam in Portugal is equipped with a pump turbine system installed by Alstom.

Currently, pumped storage plant (PSP)

is the only way to store significant volumes of energy efficiently and with good yields.



other fast-growing intermittent energies. Currently, pumped storage plant (PSP) is the only way to store significant volumes of energy efficiently and with good yields, which make variable speed pump turbines, with their increased responsiveness, even more important – and we are the worldwide leader in that technology.

How would you define your strategy?We have a multi-technology, multi-region growth stra-tegy. We want to remain the worldwide leader in hydro power - by covering all the major markets that continue to choose this technology, by putting more and more emphasis on providing service and retrofitting the ins-talled base and by investing steadily in R&D, especially through specialised regional technology centres in

locations around the world – like the ones we have in India and Canada now and will have in Brazil and China by the end of the year. For wind power, our selective worldwide growth strategy is based on our strengths and assets. Our goal is also to expand off-shore wind by ramping up our plants in France on the manufacturing side and by responding successfully to current calls for tender on the business side. Finally, we help develop tomorrow’s renewable technologies, make them economical and reduce the cost of gene-rating energy.

What are Alstom Renewable’s key strengths?First, we can draw upon Alstom’s well-established relationships with major power companies world-wide, in both thermal power and hydro power.

Alstom books its first Scandinavian wind turbine order, signing a contract with TuuliMuukko Oy for seven 3 MW ECO 110 cold-climate wind turbines for the Muukko wind farm near Lappeenranta in southern Finland. Alstom will also transport and install the turbines – 110 metres in diameter – and maintain them for 12 years. The Finnish government’s objective is to reach 2,500 MW of wind capacity by 2020.

COLD-CLIMATE WIND TURBINES FOR EXTREME CONDITIONS IN FINLAND

64

Increasingly, we are seeing that the world of re-newable energies belongs to large power companies and independent power producers (IPPs), and that’s

a strategic advantage for us. A second advantage is our powerful, longstanding pre-sence in hydro power and our familiarity with customers and markets, which may explain our success in selling wind power in Brazil, for example. Our third advantage is Alstom’s capacity for techno-logical expertise and innova-tion. With no false modesty, I can say that our 6 MW, direct-drive offshore turbine, which we successfully deve-loped in record time, is the best example of this.

Do you see your partnerships and acquisitions in emerging energies as another strength? In solar thermal, we hold a 22 % stake in the US com-pany BrightSource and we have signed business and industrial agreements for manufacture of the entire power block for concentrated solar power plants. Thanks to our acquisition of TGL from Rolls Royce, we believe we now have one of the most advanced tidal energy technologies – a full-size tidal energy turbine installed in the ocean which has already generated electricity. Finally, in wave energy, we now hold a 56 % stake in the Scottish company AWS, which is also developing a technology with solid potential.

Other ways forward for the Renewable sector?It is our responsibility to keep working to improve quality, deliver on time, and – most importantly – to keep our employees and contractors safe in our plants and project sites. We are aiming for excellence across the board.

The brand new Bujagali hydro power plant, in Uganda.

Africa will occupy

an important position on the worldwide renewables chessboard.



FOCUS ON ECO-SOLUTIONS

Alstom strategically focuses on concentrated solar power (CSP) as a solution to produce solar thermal energy. CSP stations use mirrors and tracking systems to concentrate heat on a boiler mounted on a central tower, before producing steam that powers a generator and produces electricity.

REDUCING CO2 EMISSIONS THROUGH THE HYBRIDISATION OF TRADITIONAL PLANTS WITH SOLAR

• To reduce fossil energy consumption: when a new fossil power plant is built or retrofitted, a solar unit can be incorporated to help reduce the amount of fuel needed to produce the power and therefore, reduce CO2 emissions.

• To produce more power: by adding a solar-thermal system to an existing fossil-fired power plant, it is possible to produce more power while using the same amount of fuel and so reduce CO2 emissions.

To meet environmental challenges, Alstom proposes an eco-solution via two technologies for the hybridisation of conventional fossil plants:

Investments in eco-solutions can quickly be optimised as they use the same equipment (turbine, generator…) and the same infrastructure (grid access…) while benefiting fromrenewable energy incentives and tax credits.

WAT

ER

STEA

MWAT

ER

STEA

M

Fossil-fired power plant

RADIATION INTOCONVERTS SSOLAR SUPER-HEATEDHEAT, TO CREATE STERSTEAM FROMM WAT

OLOGY T2: HYBRID TEECHNOWERTO INCREASE POW

GENGENERAERAAATIOTIONN

T1: HYBBRIDTECTECHNOHNOOOLOGLOGYY

SIL TO LOWERR FOSSIONFUEL CONSUUMPTI

Heliostats

Solar radiation Solar furnacce

COMPUTER-CONTROLLED SOLAR ARRAY TO CONCENTRATE RADIATION ON A CENTRAL RECRECEIVER ATOATOP THE TOWTOWER

66

Grégoire Poux-GuillaumePresident of Alstom Grid

Executive Vice-President of Alstom



GRID

Grégoire Poux-Guillaume, President of Alstom Grid, discusses the Sector’s performance and market trends.It was a solid year, with orders around 25 % higher than expected, and a pleasant surprise at the end of the year when we won the DolWin3 contract, worth a little over €1 billion. Sales are down slightly – we are in a very tight market, with customers tending to postpone delivery and commissioning of projects. But our order book is very full and all these projects will be executed. In terms of profitability, we met our targets.

Business really took off?Business took off thanks to good sales work and a very happy end to Germany’s call for tenders on the DolWin3 project. By staying close to the customer, offering the right solutions and partnering with experienced companies, we were able to present a high-quality offer that won the customer over. The fact that they chose us over our competitors for this complex project – a critical component in Germany’s energy turnaround – is extremely satis-fying for Alstom Grid. And it is a good springboard for growth in very high voltage direct current (HVDC) transmission.

How does Grid’s market look now? Electricity is the fastest-growing component in the world’s demand for energy. What mature economies typically need is to upgrade and gradually update their installed base, while the so-called emerging econo-mies need to invest in expanding their power grids to support manufacturing and ensure that everyone has access to electricity.

What share of your results does each market generate? In fact – and in contrast to other sectors – our business is actually growing fastest in mature countries at the moment. The explanation for this reversal is that Europe and the United States are moving into renewables, and that puts us in a dif-ferent cycle. This trend has gathered pace as various countries – and particularly Germany, which ulti-mately wants to replace the nuclear-generated part of its power – have resolutely begun the transition. Compensating with intermittent energies presents various problems with connection, stability, energy flow management and transmission, especially since a portion of these energies is generated offs-hore. The need to find the right solutions is creating very considerable growth opportunities.

With its cutting-edge expertise in high and ultra high voltage direct and alternating current systems, Alstom Grid is also a pioneer in Smart Grids and

Supergrids, which incorporate renewable energies. In a sign of customer confidence in the reliability of Grid’s proven, innovative power transmission technologies, orders booked in financial year 2012/13 came to €5.1 billion,

a strong increase from €4 billion the previous year.

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Innovation is a differentiator for Alstom. What were your most important innovations during the year? Our R&D policy is very ambitious and we have over 300 projects in progress. This commitment has put us in leading positions today, particularly in Smart Grid technologies and systems for integrating renewables into the grid. We launched a number of innovations

at the international CIGRE 2012 forum last August, including the first complete smart substation and – as part of our “green offering” – the VL-109, the first SF6-free vacuum circuit breaker. And more recently, we successfully tested the world’s fastest direct cur-rent circuit breaker, which will play a role in high voltage meshed networks and other critical future applications.

will be installed in India, at the 1,200 kV ultra high tension national test station operated by Power Grid Corporation of India in Bina, Madhya Pradesh. Developed by Alstom Grid’s Phoenix centre of excel-lence in the US, the equipment is part of the COmpact Sensor Intelligence (COSI) range and is not only a milestone in moving the Indian grid toward higher currents, but a worldwide first. Grid previously provided the first 1,200 kV capacitor voltage transformer at the Bina test station and developed a dis-connector that will be presented later. Both units were manufactured locally at Grid’s facilities in Hosur and Paddapai.

THE WORLD’S FIRST 1,200 KV OPTICAL CURRENT TRANSFORMER



Going back to your “green offering”, do you see a change in customer attitudes towards sustainability?Yes, and meeting their expectations, which vary from region to region, is increasingly becoming a selection factor in the tender process. Our custo-mers want assurances on issues ranging from eco-design and product recyclability to the car-bon footprint of our products and ways to cut associated CO2 emis-sions. For example, the Swedish operator, Svenska Kraftnät, asked us to provide detailed documentation on the environ-mental impact of the materials used in the substations we are supplying for the South-West Link project, as well as recommendations for recycling them. We have created a team at Villeurbanne speci-fically to work on their request.

Massive reliance on information technology to manage and interconnect power grids raises another environmental protection issue: how can

we protect ourselves against attacks that could paralyse power transmission? How can we make the system safe from cyberattacks?

Power grids really are beco-ming strategic assets for both governments and operators. That’s why we are increasingly focused on data processing and data security, both in our own systems and in the equipment we install for customers. Our cyber security offering ranges from raising awareness of data protection to cyberproofing our software solutions and securing all the products and systems at customer sites. At the same time, we are developing a range

of services for our partners to help them improve their infrastructure security.

Grid operates in a highly competitive environment. Is that what drives your partnership strategy?Everyone wins when we develop joint solutions with partners that complement our strengths

Issy-les-Moulineaux, France’s pioneer town in Smart Grids.

Alstom Grid leads the world

in power grid management.

Its systems manage 70 %

of the energy flows in the entire US market.

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in technology and business. That’s why we are working on smart substations with Cisco in the United States, on energy efficiency with FSK in Rus-sia, and on Smart Grids with Toshiba in Japan and Capgemini in France. We are also working on Smart Grids and ecodistricts in France, partnering with Bouygues Immobilier on IssyGrid and with ERDF and SAFT on Nice Grid.

Are ecodistricts a way for Alstom to slip into the urban landscape unseen? Transport is Alstom’s biggest presence in the urban landscape, but Grid’s role is growing fast as cities face the challenge of creating ecodistricts and smart cities. Our profile is still fairly low, but stakeholders in a certain number of projects have asked us to supply the brain that will manage and optimise the whole package of smart city solutions. I think we are very well positioned to play a major role in this area – which also underscores the cohesiveness of Alstom’s strategy because it combines power generation and transmission with passenger transport and informa-tion technology.

TransnetBW, Baden-Württemberg’s power grid operator, awards Grid a contract to supply a flexible alternating current transmission system (FACTS), designed to protect grids by preventing overvoltage on power lines. Grid will also expand the 380 kV Engstlatt substation, where the FACTS will be used, and install a new 110 kV section.

NEW FACTS SYSTEM FOR GERMANY

The International

Energy Agency projects that electricity consumption

will increase 115-150 % between 2007 and 2050.

The world’s rising electricity consumption is being driven by Asia.



FOCUS ON ECO-DESIGN

Industrial processes are now reviewed in terms of “eco-design”: environmental impact is anticipated for each stage of product lifecycle from design through manufacturing and maintenance to end-of-life recycling.

F35: ECO-DESIGN IS AT THE VERY HEART OF GRID’S INDUSTRIAL PROCESSES

• Removal of cadmium and chromium VI,

• Compared to a single-phase disconnector of equivalent voltage, reduction of the quantity of aluminium by 35 %, epoxide resin by 50 % and SF6 (greenhouse gas) by more than 20 %,

• Reduction of Joule effect losses, and as a consequence, lower carbon emissions,

• PET insulators, end-of-life recyclable thermoplastics (an Alstom innovation which is unique in the area of GIS),

• Better sealing of the bay to reduce SF6 emissions into the atmosphere.

The F35, one of the most recently developed substations, is a good illustration of the application of these new requirements by Grid. This metal-enclosed substation is used to protect power lines, power transformers and more generally, the electrical supply network. Within the F35 range, the F35-170 kV is currently Alstom’s highest voltage three phase substation, also designed to deliver a series of major environmental benefits:

Lower atmospheric emissions

Removal of cadmium and chromium VI

Recyclability of materials: 91 %

Lower consumption of materials

Lower carbon emissions

atmospheric issions

admium ium VI

R l bilit

Low

F35

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Henri Poupart-LafargePresident of Alstom Transport

Executive Vice-President of Alstom.



TRANSPORT

Henri Poupart-Lafarge, President of Alstom Trans-port, explains the surge in orders.On the business side, the most significant deve-lopments of the year were the European market’s resilience despite a difficult economy and some very noteworthy successes in several parts of the world. The orders came primarily from Western Europe – regional trains, trams, and metros – but also from Latin America and especially from Brazil, where we won two metro contracts. In Canada, Ottawa’s Cita-dis Spirit tram-train order was a major success in the North American market.

New contracts, but also new products. Which do you think were the most important for the Alstom brand?In our tramway range, the most symbolic is certainly the Citadis Compact for midsize cities. The first of them will go into service in Southern France in 2014. We are also expanding our Citadis Dualis tram-train, which is perfect for medium-density suburban lines. Then there is the VAL metro in Lille, which is enti-rely automated and runs on rubber tyres. I’d also like

to mention the Amsterdam metro; along with the metros we are supplying to RATP in France, it offers the most advanced design available today. The elec-tric locomotives that we launched for the Russian and Kazakh Railways – the EP20 passenger locomotive and the KZ8A freight locomotive – are also very im-portant. Finally, our successes with Euroduplex on the Paris-Marseille-Frankfurt line and AGV.italo, which went into commercial operation at the beginning of the financial year, confirmed Alstom’s image as an expert in very high speed rail.

The rail market seems less closely tied to economic growth than the other Sectors. Does that surprise you? Transport contributes to growth and there is a general trend toward metros and tramways in cities all over the world. The really good news is that markets are robust both in Western Europe and in the emerging countries, where urban transport is the most dynamic segment of the rail market. Looking beyond rolling stock, we are also seeing continued strong growth in services, turnkey infrastructures and signalling.

To keep pace with demographic growth and urbanisation worldwide, communities need fluid, comfortable public transport with a small footprint. Alstom Transport’s chief advantage is its comprehensive range of products,

solutions and services adapted to any need and to each customer’s preferences. In spite of economic uncertainties, the rail market is growing on every continent and in 2012/13, the Sector attained a record level, booking

over €7 billion in orders.

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A number of large contracts were won in urban transport with a remarkable performance in metros. Lille Métropole awarded Alstom a €250 million contract to modernise Line 1 of its metro by providing an integrated system with an automatic driver system, 27 rubber-tyred metro train sets and a next-generation signalling system. In the Paris region, transport authorities, RATP and STIF, exercised options for additional equip-ment. RATP ordered 70 more MI09 double-decker train sets for the RER A regional line, a deal worth €700 million, while STIF bought 14 train sets for Line 14 of the Paris metro for €127 million. Alstom metros have also been very successful in Latin America, especially in Brazil, where two contracts were signed. In Porto Alegre, an Alstom-led consortium will supply 15 Metropolis train sets to Trensurb for Line 1 of the city’s metro, a deal worth around €80 million, while SuperVia, Rio de Janeiro state’s leading rail operator, placed a €105 million order for 80 Metropolis metro cars. In São Paulo, Alstom won a €40 million order to supply infrastructure for phase two of Line 4 and a €20 mil-lion order for auxiliary systems that will extend Line 5. In Mexico City, Alstom successfully completed a turnkey project involving design, installation and commissioning of the entire electrification and rail control systems for the new Line 12.

A RECORD SALES LEVEL FOR ALSTOM METROS



You’re also pursuing your partnership strategy. Which relationships are the most promising in the long term? We are, in fact, continuing to build relationships with local partners in a certain number of countries. We already have partnerships in China and in the United Kingdom, for example, with Balfour-Beatty. In 2012/13, we inaugurated a locomotive plant in Ka-zakhstan with KTZ, the Kazakh rail operator, and for-med two new signalling partnerships in Kazakhstan and Russia. In Algeria, we are launching a tramway factory with our local partner, EMA, which operates the Algiers metro and then there is THE big par-tnership in Russia with TMH. We hold a 25 % stake in their capital and are working with them to develop a variety of products. We are starting with locomotives and then we will branch out to metros, regional and high-speed trains.

What’s the real significance of your alliance with TMH? TMH is the most powerful player in the Russian rail market which is, by far, one of the most promising in the world – in urban transport, main lines and freight – and not only because it is a growth market. It also needs to modernise. Our partnership is extre-mely important because it will help expand both the local market and the broader market for the entire 1520 mm region, which includes all the CIS and other countries that use this track gauge. It is ambitious be-cause it covers joint development of all of the product lines, the manufacturing and the engineering. Finally,

our partnership with TMH is an excellent strategic move for Alstom Transport. In the long term, it could completely transform the Sector because the two companies are about the same size and that’s unique within the Alstom Group.

Another market with enormous potential is India, where Alstom has two plants. What are your plans for them?India’s urban transport market is very promising. Many cities are adding metro systems and we expect to be a key player there. We already have a factory for traction com-ponents in Coimbatore, Tamil Nadu, as well as a major engineering centre for signalling in Banga-lore. Our brand new plant in Sri City, Chennai, which began operations last October, will assemble the 168 metro cars the city has ordered. It is a sister plant to our site in Lapa, Brazil, which is making the first cars for this contract. Sri City gives us inside access to the market not just in India, but in other countries as well, starting with the Middle East and Southeast Asia.

Alstom assembly plants produced an average of one tram every 18 hours.

Construction of the Rabat tramway at the Santa Perpetua plant, Spain.

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You’re in a highly competitive market. What are your latest strategies for staying ahead?The competition is fuelled by growth markets in a cer-tain number of countries, in Europe and elsewhere.

We are close to our customers because we have a global network – and that’s very im-portant – but we have many competitors in all our markets. We have launched a competi-tiveness plan to cut costs for the products themselves, and

we are focusing particularly on the cost of ownership throughout the product lifecycle, as well as compre-hensive, turnkey solutions and project management.

With customers constantly demanding higher quality and faster delivery, we have to improve our perfor-mance constantly. It’s energising!

Does your capacity for innovation set you apart?Of course. All our R&D efforts aim to make our trains lighter, less energy-intensive and more comfortable, but that fi ts into our overarching “fl uidity” initiative, which feeds into everything we do. However, we go further, lis-tening to customers more and more, staying with them through the life of the contract and the life of their trains, offering them comprehensive solutions that meet their needs and building trains to shorter and shorter times-cales. With this initiative, we want passengers to fully integrate this new mobility in their lifestyle.

The first plant built by Transport since 1995, the Sri City facility will produce metro cars for the Indian market. Its first task will be to manufacture 33 of 42 Metropolis train sets for the nearby city of Chennai, the first nine being made by Transport’s site in Lapa, Brazil. Lapa joined Transport’s European sites in providing support to Sri City along with comprehensive training of its operators and managers, enabling the new facility to begin operations as scheduled. The Sri City plant gives Alstom an ideal position in one of the world’s biggest rail markets.

OPERATIONS BEGIN AT ALSTOM TRANSPORT’S PLANT IN SRI CITY, INDIA

270 Citadis trams went into

service in financial year 2012/13.



FOCUS ON ECO-SOLUTIONS

The 28 new-generation train sets delivered to the city of Amsterdam represent an eco-solution which contributes to the sustainable development of Alstom’s customer. There are four keys to reducing this metro’s environmental impact:

AMSTERDAM METRO: INNOVATE TO IMPROVE ENVIRONMENTAL PERFORMANCE

1. Reduction of the axle load: • Decrease in the axle load from 15 T

to 12 T, reducing energy consumption by 15 %.

2. Optimal use of energy to lower consumption:

• 100 % electrical braking: Maximises energy recovery from braking, reduces noise pollution and limits dust emissions.

• 100 % LED internal and external lighting: Multiplies light bulb lifespans by a factor of six and simplifies train set maintenance.

3. Passenger comfort: • Reduced noise levels both inside

(optimised ventilation, sound insulation) and outside (electrical braking).

4. Environmental protection: • Use of water-soluble paints facilitates

train maintenance and recycling.

100 % LED lighting

= lifespan x 6

Water-soluble paint

Optimised air ducts + acoustic insulation

= -4dB outsideand -8dB inside

Lower axle load = 15 % energy

savings

100 % electric brake system

= more recovered energy

xle loadenergy ngs

100 % LED lighting

= lifespan x 6

Water-soluble paint

Lower ax= 15 % e

savin

100 % electric brake system

= more recovered energy

Optimised air ducts + acoustic insulation

= -4dB outsideand -8dB inside

W

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Research in renewable ocean energies

(turbine prototype).

2012/13

737

2009/10

614

2006/07

440

INVESTING IN TECHNOLOGIES OF THE FUTURE

A policy of sustained investment in R&D (millions of euros)


COMMITTING TO SUSTAINABILITY, WITH ALSTOM

SHARING THE SAME VISION OF THE FUTURE

Alstom uses its experience and expertise to offer environmentally friendly solutions for power generation and transmission and for rail transport, promoting

access to electricity for all, increasing mobility and contributing to sustainable economic growth. Applied worldwide, these skills have made the Group an

acknowledged partner and a leading proponent of sustainable development.

As a participant in direct dialogue with governments and international organisations on sustainable deve-lopment policy, Alstom puts particular emphasis on the importance of maintaining free trade, ensuring fair competition through reciprocal access to public tenders and protecting intellectual property. The Group also stresses the need for a proactive public policy of long-term investment to encourage the development of non-polluting technologies.

In the deeply held belief that sustainable develop-ment cannot be achieved without the active invol-vement of all stakeholders, Alstom plays a role in a number of institutions and organisations, including the UN Global Compact, the World Business Council for Sustainable Development (WBCSD), the Inter-national Association of Public Transport (UITP), the International Emission Trading Association (IETA), the Australia-based Global Carbon Capture and Storage Institute, the Corporate Leaders Group on Climate Change, and the EU Corporate Leaders Group on Climate Change. In 2013, Alstom joined econsense, Germany’s leading corporate association for sustainable development.

FORGING CLOSER TIES WITH CUSTOMERS

Because customer relationships are critical to Alstom’s growth and expansion into new markets, the Group cultivates close relationships built on trust and proximity.

As a result, the shared sales organisation for the Power Sectors has launched a “customer proximity” pro-gramme that will be rolled out worldwide in the next financial year. And in addition to having regular contact with Alstom experts in working groups, customers are invited to participate in a variety of technical training programmes to learn more about Group products and how they work. In many cases, training sessions can be held at the customer own site using portable simulators.

Grid uses an integrated software tool to get a compre-hensive picture of its customer relationships and ma-nage them as closely as possible, focusing particularly on some 40 strategic “key accounts”. The Sector uses this system to communicate with customers on line, but also holds regular users’ group meetings. In 2012, these included five sessions on grid management attended by 600 customers, as well as an event held in Barcelona in November that drew 80 customers

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from 35 countries for an advance demonstration of air-insulated substations. Grid also provides customer support through the 16 centres that make up its Tech-nical Institute, delivering 23,000 days of training in financial year 2012/13. Finally, Grid has stepped up implementation of its “All Ambassadors” programme, designed primarily for key employees in regular contact with customers.

Meanwhile, Transport conducted a sweeping satisfac-tion survey of some 50 customers worldwide, and then provided them with information on follow-up action at both global and local levels. In another customer ou-treach initiative, the Sector created Club Métro Alstom, its first users’ group, as a platform for frequent infor-mation sharing and dialogue. Membership currently consists of 46 metro operators. And in mid-2013, Trans-port will follow the example of the other three Sectors and open a customer training centre, initially aimed at on-board and maintenance personnel. A customer rela-tions management tool is also being rolled out.

A TWO-WAY COMMITMENT WITH SUPPLIERS

Because Alstom’s growth depends on the quality of its supply chain, the Group applies its sustainable purcha-sing policy to its many suppliers and contractors – an approach that, among other things, improves supplier performance and reduces Alstom’s exposure to labour, environmental and ethical risks.

When they sign the Group’s Sustainable Development Charter, suppliers and contractors agree to comply with major international agreements in areas including

• Participated actively in the Rio+20 Earth Summit in June 2012.

• Participated in the G20’s Green Growth Task Force; the forums of the United Nations Framework Convention on Climate Change (UNFCCC); the meetings of the UNFCCC’s Technology Executive Committee; and the Durban Forum on Capacity Building.

• Played an important role in the business community’s backing for the European Union’s European Trading Scheme (EU-ETS), and is a member of Australia’s Businesses for a Clean Economy initiative in support of carbon pricing.

• Participates in debates on key issues in a number of countries, actively advocating air quality regulation in India and taking part in the national debate on energy transition in France.

• Signed the Leadership Compact of Cambridge University’s Natural Capital Leaders Platform, pledging to preserve ecosystems and natural resources.

ALSTOM’S ROLE IN INTERNATIONAL PROGRAMMES

Close to our customers (testing the Algiers tramway).


What is Neopolia?Neopolia is a network of marine and aeronautics subcontractors in the Loire region of France. Our membership consists of 165 very small to medium-sized businesses with a total of 13,000 employees. Our mission is to support big contractors that want to cultivate close partnerships with a network of effective, cutting-edge suppliers. We are currently diversifying into five clusters: marine, oil and gas, aeronautics, rail and renewable ocean energies.

What is your relationship with Alstom?First, we partnered with Alstom Wind to build offshore wind turbines and develop renewable ocean energies, and later, our rail cluster formed another partnership with Alstom Transport. Both relationships are geared around joint development. We work with Alstom to identify various needs and then try to find innovative, high-performance solutions.

For example?We helped build the cradles to transport the Haliade 150 nacelles, as well as the helicopter-hoisting platforms on top of the turbines, onto which service personnel can be lowered. We also contributed to the Haliade 150’s composite nacelle structure.

And we are currently working on seven projects at Alstom Transport’s Aytré site in La Rochelle. With our experience in aeronautics and rail and other land transport, Neopolia has the expertise that Alstom needs.

How many businesses are involved in the partnership?Around forty with Alstom Renewable Power and around thirty with Alstom Transport.

BRINGING REGIONAL COMPANIES TOGETHER AROUND OFFSHORE WINDAn interview with Jean-Claude Pelleteur, Chairman of Neopolia.

human rights, child labour and workplace health and safety, and with the principles of the Alstom Code of Ethics. At 31 March 2013, over 10,000 of them had signed the Charter.

Suppliers’ sustainable development performance is assessed by a third party. At the end of the financial year, 1,515 suppliers had been assessed, accounting for approximately 45% of the Group’s total procure-ment value. Any suppliers with unsatisfactory assess-ment outcomes are required to take corrective action, after which they undergo a second assessment.

In order to help buyers understand the company’s requirements for making sustainable purchases, evaluating suppliers, and supporting their efforts to improve, Alstom has developed a dedicated training programme. By the end of the financial year, 780 indi-viduals had taken the course.

One of the benefits of Alstom Transport’s Leading Partners programme (LP 150), is to cultivate partnerships with suppliers who commit to working with Alstom over the long term to develop environmentally friendly products and increase their performance and competitive edge.

Regarding the procurement of environmentally friendly products and services, Alstom works together with its partners in a process combining eco-design and life cycle analysis. As they become an integral part of Alstom’s value chain, suppliers are able to join forces to develop innovative solutions. As an example of sustainable mobility, via its partnership with logistics provider Geodis, Alstom Transport broke new ground in January 2013 when it moved rolling stock by rail from its place of manufacture to its port of lading. This par-ticular initiative, which involved the tramway destined for Casablanca (Morocco), led to a 90% reduction in CO2 emissions due to using rail as the means of transport.

82

PATHS TO INNOVATION

At Alstom, innovation is a strategic growth driver. In 2012, the Group was among the companies ranked highest by the European Patent Office for patent appli-cation filings in Europe. But innovation is impossible without the ability to look ahead, both to technologi-cal progress and to changes in industry practice. This foresight and pro-activity depend, in turn, on a com-pany’s ability to unite its own employees around the great challenges of the future and to cooperate with others over the long term. Alstom has chosen to promote innovation in a very broad sense, particularly by placing strong emphasis on cooperation with academia, both for technologi-cal research and development and for education and training. In line with this philosophy, the Group has entered into several hundred cooperation agreements in over 35 countries.

Alstom puts this strategic commitment into practice by closely monitoring develop-ments in key areas and by acquiring the new skills and know-how required to apply new discoveries to its bu-siness lines. Essential to this process are several forms of cooperation, including:• Research. Alstom keeps

pace with progress by participating in industry committees at the Mas-sachusetts Institute of Technology (MIT) and other universities; by working on predictive maintenance at the University of Cincinnati and turbulence simu-lation at Stanford; by playing a role in the University of Wisconsin’s industry consortium; by participating in the power electronics centre at Virginia Tech; and by participating in the French electrochemical energy storage network RS2E, the European technology platform for power electronics and the Universities High Voltage Network in the UK.

• Training. Alstom participates in industry research chairs, working with ETH Zürich on energy, power

electronics and renewable energies; with the Uni-versity of Grenoble on hydro power; with SINTEF in Norway and in Saudi Arabia on CO2 recovery and new energy development; and with the University of Nottingham in the UK and the University of Witwa-tersrand in South Africa on electric power distribution and transport. In Morocco and Belgium, the Group is working on Transport-related training projects and it also promotes new degree programmes, such as the new masters in Sustainable Energies and Cities that Alstom and the Bouygues group have joined forces to create.

• Targeted cooperation projects. Alstom has partnered with some of the world’s best university clusters, working on hydro power with Laval University in Quebec, the École de technologie supérieure and the École polytechnique in Montréal, the Indian Ins-titute of Technology in Delhi, and the University of

Itajubá in Brazil. The Group also has many research partnerships on topics rela-ted to transport, renewable energies and power dis-tribution, including strong relationships with China’s best universities. Alstom’s Sectors are working closely with Europe’s best research centres, either through bila-teral partnerships or through the EU’s 7th Framework

Programme for Research and Development. Par-tners for these projects include Imperial College, the École polytechnique fédérale de Lausanne (EPFL), Karlsruhe Institute of Technology (KIT), the French Alternative Energies and Atomic Energy Commission (CEA), the French public science and technology ins-titution INRIA, the French National Centre for Scien-tific Research (CNRS), Delft University, Chalmers University, Compiègne University, the University of Toulouse, and Manchester University.

In addition to these partnerships with public and university research centres, Alstom has launched

The spirit of innovation is also cultivated within the Group. Every year, the Innovation Awards are given out in recognition of the top achievements by international teams, often in collaboration with external resear-chers. Here, Ron Vanstone and Ian Chilton present an alloy that improves performance in ultra-supercritical steam turbines, a winning innovation in 2012.

INNOVATION AWARDS

Alstom has chosen to promote innovation

in a very broad sense,particularly by placingstrong emphasison cooperation

with academia.


initiatives with other businesses, particularly SMEs and start-ups. These include:• the Catapult research and innovation programme in

the UK; • new French public-private partnerships, including

the Jules Verne Technological Research Institutes, M2P, Railenium and System X, and the Supergrid and France Energies Marines Institutes of Excellence in Carbon-Free Energies;

• ten French competitiveness clusters targeting on-board systems, transport systems of the future, microtechnology, renewable energies, power electro-nics and nuclear technology;

• investments in innovative businesses (and business projects) with products and solutions that are com-patible with Alstom’s own offer. In partnership with Schneider Electric and Solvay-Rhodia, Alstom owns shares in Aster Capital, which acquires equity in start ups specialising in energy, mobility, construction,

new materials and eco-friendly chemicals. Alstom has also partnered with Rotem Industries, Ltd. and Gefen Biomed Investments to create Horizon Green Tech Ventures which targets investments in green technologies such as novel generators, Smart Grid energy management and systems for optimising the efficiency of photovoltaic panels.

Finally, in the course of major projects in France, Ger-many, the US and Asia, Alstom uses smart, reconfi-gurable power generation and management solutions, which enable the company to qualify its solutions and anticipate new market paradigms.

These shared ambitions, combined with Alstom’s re-solve to remain open to developing new products and solutions based on sustainable technologies, make the Group a key practitioner of responsible innovation in the service of society.

Alstom works with RS2E, the French national network for electrochemical energy storage. Here, a researcher at Cirimat laboratory (Toulouse University-CNRS) mounts an electrochemical cell in an X-ray diffractometer to carry out in-situ characterisation of battery materials during charge/discharge cycles.

84

Alstom funds a clean energy chair at Wits University in Johannesburg,

South Africa. It’s just one of many ways that the Group contributes to

the life of local communities.

SUPPORTING LOCAL DEVELOPMENT

Projects financed by the Alstom Foundation (cumulative)

2010/11

2009/10

2011/12

2012/13

7575757575757575577557575757575

242424242442424242424242242424424424444444242424242442444442444424242444242424244444242424244442444442242444442224422222

3433434343434343433343343434334333343443433343433434444343333444343444434344343334343433434434443

60606060606006000600600660


COMMITTING TO SUSTAINABILITY, WITH ALSTOM

PLAYING A LARGER PART IN LOCAL LIFE

As Alstom’s business expands into new regions, it becomes involved in each community’s local life, focusing particularly on education. The Group’s

outreach initiatives reflect its willingness to engage with society and its commitment to responsible, sustainable growth and employees are

constantly encouraged to play an active role.

Formally adopted in January 2013 following the Group’s commitment at the Rio+20 Summit in June 2012, Alstom’s community outreach policy is geared around three main priorities.

Because education is a growth driver, it is the first of Alstom’s three priorities. To promote primary and secondary education, Alstom provides funding for disadvantaged schools in India, South Africa, Chile and other countries.

At university level, Alstom builds on its strong relationships with academia to offer scholarships, internships and apprenticeships to students and in some cases, recruits and trains them for technical skills. In the UK, for example, Alstom employees help promote engineering careers by volunteering for the Science, Technology, Engineering and Mathematics (STEM) programme, and in Algeria they participate in Injaz El-Djazair, an international programme that teaches students how to start their own businesses.

Second priority: participating in local manufactu-ring communities and promoting local growth. For example, Alstom assists small companies by offering advice on strategy or introducing them to local custo-mers; it also supports start-ups which are innovating in the field of sustainable technologies and helps local suppliers enhance their capabilities. This is the case in France where the Group has signed the Pacte PME Internationales and supports the Alizé programme

for very small companies. The same is true in regions where Alstom is launching or expanding operations. In South Africa, it has created a system for purchasing from local businesses; in Kazakhstan, it has set up a network of local rail equipment suppliers; in Morocco, a first series of suppliers was qualified in 2012; and in India, the Sri City plant located near Chennai is set to play a major role in the local industrial community.

Third priority: cultivating action-oriented dialogue with local stakeholders in order to respond appropria-tely to their needs, particularly where access to em-ployment is concerned. Alstom has launched a num-ber of initiatives along these lines, primarily to assist young men and women with no job qualifications.

In December 2012, Alstom partnered with the Babyloan micro-credit platform to launch Solidarity Challenge, a campaign to familiarise Group employees with micro-lending and generate funds for very small businesses in Cambodia, Benin, Peru and other countries. During the first campaign in France, 400 Alstom employees contributed overall €37,000 in loans – enough to help 72 micro-entrepreneurs grow their businesses.

OPERATION “BABYLOAN”

86

Apprenticeships are conducted in the workplace with the aim of offering jobs to apprentices either internally or at another company, when they are complete. In Brazil, Grid and Power have set up two programmes with the NGO, IOCHPE, in Taubaté and Alstom Hydro has partnered with Bardella, training 900 individuals and recruiting 400 over the life of an initiative launched three years ago. Alstom also supports public policies designed to reduce joblessness among the young; in March 2013, it joined the Jeunes et entreprises cam-paign launched by the Association of French Private-Sector Companies (AFEP).

THE ALSTOM FOUNDATION

Created in 2008, the Alstom Foundation provides fun-ding for hands-on efforts to promote socio-economic progress, support education, protect the environment and preserve natural resources. To be considered by the Foundation, projects must be developed with local stakeholders and be designed to meet local needs. These initiatives reinforce the efforts made by the Group and its local partners to improve living condi-tions in the communities surrounding Alstom’s offices, plants and construction sites worldwide.

For its 2012/13 campaign, the Foundation supported 15 projects. Four of them are designed to boost income in rural communities in Bhutan, Nepal, Colombia and South Africa. Five will renovate or make improvements to orphanage and other schools that raise awareness

of best environmental practices – a rainwater collec-tion and storage project in Mozambique; renovation of a centre that will provide schooling and instruction on water management and recycling for the children of 150 families in Peru; an “environmental” school with a vegetable garden, compost heap, solar ovens and waste recycling in Chile; and solar energy projects in Tanzania and Zanskar, India.

Education-related projects are of particular interest. In Malaysia, for example, Group employees will join with local schools and universities to clean up two water-falls near Alstom sites, participating in weekly clean-up sessions over a two-year period. In Vietnam’s Mekong Delta, the Foundation is creating a network of young people to teach local people about environmental issues. At the same time, bathrooms and water purifi-cation systems are being installed in area schools.

Finally, two projects are designed specifically to pre-serve the natural environment. One will continue restoring Brazil’s Atlantic Forest for the fourth year in a row, and the other will develop a strategy in Mexico to protect the Ambystoma, an endangered species of small amphibian, and promote green tourism in Mexico State.

In June 2012, the Foundation’s mandate was renewed for five years, with added priority given to innovation-related projects.

In Vietnam’s Mekong Delta, the Alstom Foundation is creating a network of young instructors to raise awareness of environmental and sanitation issues in the local population.


Every year in China, some 45 billion wooden chopsticks – the equivalent of 25 million trees – are used once and thrown away. Working with the Chinese environmental organisation, Global Village Beijing, Alstom has launched an awareness-raising initiative at Hydro’s Tianjin plant. Ten thousand “Tree Bags”, containing reusable chopsticks and cotton napkins, were distributed to Hydro employees and to young Chinese, the programme’s primary target. The effort will be expanded to some twenty other local communities, and trees will be planted in the Tianjin Airport Economic Zone, where the plant is located.

Jean-Marc Terisse has been involved in humanitarian causes for nearly 20 years. In 1994, he joined Via Sahel, an association that works to provide education, healthcare, micro-lending, access to water and other services to Mali’s Dogon region. Since then, this 45 year-old engineer has juggled his professional duties as a commercial director for Alstom Wind, his personal responsibilities as the father of three children and his commitment to serving the disadvantaged. He joined Alstom in 2007 when the Group acquired his employer, Ecotècnia, and now plans to continue his humanitarian efforts in Mali. Thanks to the support from the Alstom Foundation, he will have spent three years working on a reforestation campaign in what is now his second home. “Feeling useful and building genuine relationships with other people is true happiness therapy.”

REUSABLE CHOPSTICKS IN TIANJIN

“HAPPINESS THERAPY”

88

ETHICS TRAINING FOR EMPLOYEESOO

Number of employees who have completed ethics training (cumulative)

2010/11

2011/12

2012/13

9,9,9,99,404040400000

5,55,5,5,5,5,5,5555 000000000000 0007,77777 202020202020000


THE ETHICS IMPERATIVE

In today’s highly competitive global market, a repu-tation for integrity plays a key role in a company’s performance. Alstom’s three core values – team, trust and action – have taken on an added ethical dimen-sion through the Group’s Integrity Programme, which is mandatory for all employees. Headed by the Ethics & Compliance (E&C) Department, the programme is based on the Group Code of Ethics which has been translated into 21 languages and updated regularly since 2001. In 2011, the programme received a new two-year certification from ETHIC Intelligence.

The Code of Ethics provides guidelines for Alstom’s relationships with business partners and suppliers, for its commitments to socially responsible business practices, for its corporate human resources policies and for protection of its assets.

The Code also contains an alert procedure for reporting potential violations of corruption, competition, securi-ties and accounting laws, and in the United States, whistle-blowers can use the Alstom US Business Ethics Hot Line to protect their anonymity.

Very strict instructions govern relationships with distributors and consultants, conflicts of interest, gifts and invitations, donations to political and charitable organisations, and sponsorship.

The E&C Department maintains direct contact with 300 volunteers – Als-tom Country Presidents and representatives of the Legal, Finance and Human Resources departments – who serve as E&C Ambassa-dors and promote a culture of integrity.

In addition, all the Group’s legal teams work to apply this policy. The Group also supports this network through training, with nearly 2,200 individuals par-ticipating during the 2012/13 financial year, and regular communication with employees through pos-ters, the Intranet and articles in the Group’s weekly newsletter.

CREATING A MORE RESPONSIBLE WORLD, WITH ALSTOM

SHARING THE SAME STANDARDS AND THE SAME VALUES

One of Alstom’s primary growth drivers is its strong corporate culture – rooted in each employee’s commitment to Group values and ethical principles

and in a human resources policy that provides the best working conditions and career opportunities for all.

Very strict instructions govern

relationships with distributors

and consultants.

90

Alstom is a member of the UN’s Global Compact Wor-king Group on Anti-Corruption, the Ethics and Com-pliance Officer Association in the United States, the Institute of Business Ethics in the United Kingdom, and the International Chamber of Commerce in France. At a local level, the Group sponsors the Ethos Institute in Brazil, the Center for Business Ethics and Corporate Governance in Russia, and the Chair in Law and Business Ethics at the University of Cergy-Pon-toise in France, and in 2012 it signed Malaysia’s Cor-porate Integrity Pledge and joined the anti-corruption initiative in Argentina’s electric power sector.

SAFETY FIRST

Because Alstom’s success depends on its ability to motivate employees, give them a sense of belonging, and cultivate their initiative and creativity, the Group is rapidly adapting its human resources policy.

The first priority is providing employees with a safe workplace. Although the overall accident rate is down 70% since 2006, the number of serious or fatal acci-dents on Alstom project sites is still too high. In March 2012, the Executive Committee voted to implement a Zero Deviation Plan at all Group sites. The programme rigorously applies 40 critical requirements to promote strict compliance with guidelines for high-risk activi-ties and establish zero tolerance for safety procedure violations. And because contractors account for the majority of serious accidents, Alstom has begun to monitor them even more closely to ensure that they know and comply with Group standards.

BETTER QUALITY OF LIFE IN THE WORKPLACE

A variety of local programmes focus on health and well-being in the workplace. In Germany, where the

disabled are a priority, workstations are adapted to meet special needs, and a day-long workshop fosters understanding and cooperation. Also in Germany, a new regulation facilitates extended parental leave, helps preserve ties to the Group, and makes it easier for employees to return to work part-time.

In France, all employees have anonymous access to a psychological support service for help with professional and personal issues.

In Switzerland, the Welfare Foundation provides interest-free loans or grants to any employee who is temporarily in need. Another programme uses a network of outside experts in medicine, insurance and other areas to develop personalised plans that help employees return to work after a long absence owing to accident or illness. Some 300 individuals benefited from this programme in 2012.

BRINGING NEW EMPLOYEES ON BOARD

Alstom offers targeted programmes to help new hires become part of the team, and in 2012 the company focused particularly on individualised orientation for managers. Meanwhile, the Human Resources depart-ment organised an orientation session designed pri-marily for employees in the BRIC countries.

Local programmes supplement the Group’s effort to integrate new employees. In India, Alstom recruited more than 100 students from the country’s best engineering schools directly from their campuses. The Young Engineers Graduate (YEG) programme, which focuses on behaviour rather than technical skills, pro-vides a three-month transition between the university and job training. And Grid’s Graduate Development

Ning Yang, 33, is one of 30 Ethics and Compliance (E&C) Ambassadors of Alstom China. She sees her mission as a natural extension of her job of Legal Counsel for Alstom Wuhan Engineering & Technology Co., Ltd., a medium- sized entity specialised in nuclear. “Being an E&C Ambassador allows me to be go beyond my role of legal expert. Training the 200 people of the company to E&C rules has made me familiar with aspects of the business I did not really know. My challenge was to make them understand, especially operational people, that I was not there to slow down the business, but to help them make sound business – and I think they see me now more as a support than a constraint”.

CLOSE TO BUSINESS, CLOSE TO EMPLOYEES


Programme, which has been approved by the Institute of Engineering and Technology (IET), a professional group with 150,000 members in 127 countries, seeks to recruit young graduates.

PROMOTING INTERNAL MOBILITY

For a high-tech corporation like Alstom, which ma-nages large, complex projects with long timelines, the quality, expertise and commitment of its workforce are critical to success. As a result, employees are

encouraged to play an active role in mapping out their career paths and improving their performance, with support from managers and HR personnel. The Group also provides a number of career development tools, including ALPS, an on-line HR information system; Alstom Jobs Online; and e-Talent, a cross-Sector data-base of job openings launched in 2010.

Technical experts, functional personnel and mana-gers also benefit from special career development

This achievement is the result of TSFI’s 2008 commitment to put environmental, health and safety (EHS) concerns ahead of everything else – in addition to a solid training programme and regular communication with employees. TSFI, which has no industrial facilities of its own and works exclusively on customer sites, has received a Level 1 certification from the Finnish Institute of Occupational Health, as well as awards from several of its customers – honours that have raised the unit’s profile in a highly competitive market.

1,000 ACCIDENT-FREE DAYS FOR THERMAL SERVICES FINLAND (TSFI)

92

programmes, such as the Technical Communities Career Management platform maintained by Thermal Services; Grid’s community of experts, which brings together several hundred individuals; and Transport’s World Class Engineering programme.

Engineers and managers can also use their annual evaluations to set goals and map out a personal

career development plan, and since 2013 evalua-tions have included discussions about putting Group values into practice.

Alstom’s People Reviews programme also promotes career planning by matching unit needs to available skills with a skill-mapping tool. And Alstom University helps the Group reach its strategic goals by offering

THE POWER OF CULTURAL DIVERSITY

Having a broad range of nationalities, cultures and mindsets is an asset, and Alstom actively cultivates this diversity. For example, the number of French nationals among the Group’s senior executives fell from 52% in 2006 to 45% in 2009, and by 31 March 2013 it had dropped again to 40%. Similarly, the number of expatriates fell from 946 to 840 in a single financial year, reflecting local managers’ shifts into positions of responsibility.


80 training modules on campuses in Europe, North America, Latin America, China and India. The Uni-versity adapts its curriculum to meet needs at Sector and employee level, improves individual and collective processes, and offers training programmes that meet local needs at all five of its locations.

OPPORTUNITY FOR ALL

Alstom’s employment practices ensure equal oppor-tunity and open the Group to diversity, without exclusion. The top priority is increasing the number of women in a company that is still 84% male. In financial year 2012/13, the number of women in senior executive positions rose to 11.6% – a trend that the Group must continue to encourage. Women Empowerment for Business, a new in-house pro-gramme, and special attention to women in People Reviews should help to attract and promote women employees. The EVE women’s leadership programme encourages women to take on responsibility, and a wide range of initiatives and measures have been designed to prevent discri-mination and harassment and improve work/life ba-lance. In France, Alstom si-gned three new agreements in 2012. Key provisions include adjusting women’s working hours during pre-gnancy and immediately after their return from maternity leave; maintaining salary levels during paternity leave; offering flexible hours to single parents; and contributing to childcare costs. In Brazil, maternity leave was extended, and in Turkey new mothers can work reduced hours during the year following the end of their maternity leave.The Group also joins with various associations in encouraging female students to choose industrial careers. In the United States, Alstom belongs to the Equal Employment Advisory Council and the Indus-trial Liaison Group. In France it has formed a new partnership with Déployons nos Elles, a women’s association, and continues to support the Elles bougent initiative.

In addition, the Group strictly prohibits any discrimi-nation based on health or disability and complies with local laws on hiring and retaining disabled employees. As part of this policy of openness, an Alstom factory workshop in Barcelona, Spain has hired only disabled employees. Special training for managers, employees and HR personnel has enabled the newcomers to transition into the company smoothly and successfully.

REWARDING PERFORMANCE

Alstom’s practice is to review employee base sala-ries at least once a year, and to hold open talks with

employee representatives wherever local legisla-tion permits. Compensation for managers includes variable components that are tied to Group perfor-mance and individual goals. At 31 December 2012, over 34,000 employees, or 73% of managers, were participating in this programme. For some managers, variable compensation is also based on their commit-ment to higher quality, better safety and sustainability performance. At Alstom Thermal Power, the variable component can be as high as 20%.

Alstom also recognises collective performance by offe-ring profit-sharing in 13 countries. At 31 March 2012, current and former employees held 1.31% of Alstom’s capital, either directly or through mutual funds.

CONTINUING SOCIAL DIALOGUE

In 2012, the Group joined employee representatives in signing many local agreements on salaries, working hours, insurance, reorganisations and profit sharing.

In July, Alstom renewed its agreement with the Euro-pean Works Forum (EWF), which represents employees at European level. The num-ber of company representa-tives has increased thanks to Grid’s integration into the Group.

The many EWF meetings held during the year focused primarily on the position of Alstom’s business and its impact on employees, under a February 2011 agreement with the Euro-pean Metalworkers’ Federation (EMF) on antici-pating change. The purpose of the agreement is to preserve jobs, provide support to employees who are affected by reorganisation, build skills, and structure talks between labour and management. The agree-ment draws on national best practices within the Group, such as proactive human resource manage-ment in France, temporary reduction of working hours in Germany and geographic mobility in Italy.

Alstom does its utmost to limit the impact of reor-ganisation on employees, starting from the principle that no one is left to face an employment problem alone. Internal transfers are the preferred solution, as illustrated by Grid’s reorganisa-tion plans in Greece, Mexico and Australia.

Alstom embraces diversity and attaches great importance to equal opportunity for all.

Alstom does not discriminate based on age.

During financial year 2012/13, new hires over age 45

totalled 1,506,

or 15.2% of recruitment.

94

20102011

20122013

201420150

83 81 80 78 76 75

83380

81

Target

(20% reduction from 2008 to 2015)

REDUCING ENERGY INTENSITY

Energy intensity of the company over 3 years and tarrr

get for 2015 ff

(MWh/sales in million euros).

Alstom’s recently inaugurated hydro power equipment

manufacturing facility in Tianjin (China) was designed to achieve

the lowest possible energy consumption. For example,

its shop floors are designed to maximise use of natural light.


With more than 70 active production sites around the world, Alstom makes every effort to limit the impact of its operations on the environment, in terms of green-house gas emissions, energy and water use, and waste management. Alongside the targets set by the Group, Alstom pursues a large number of additional initiatives, all helping to reduce its environmental footprint.

TOWARDS TOTAL CERTIFICATION

The first of Alstom’s targets is to obtain ISO 14001 certification for the environmental management sys-tems in use at all of its sites. At 31 March 2013, 97% of the Group’s industrial sites with more than 200 employees were certified (up from 83% a year earlier). In Germany, some Alstom sites have certified their environmental reporting systems to EMAS, the Euro-pean Eco-Management and Audit Scheme.

CONSUMING LESS ENERGY

Alstom’s second target is to achieve a 20% reduction in the energy intensity of its sites (ratio of energy consumption to sales) by 2015 compared to 2008. At the end of 2012, energy intensity rose slightly from its level a year earlier, as a result of recent colder win-ters, which required higher gas and steam consump-tion to heat buildings in Europe. In absolute terms, the Group’s electricity consumption decreased.

Energy saving initiatives rolled out gradually to all Group Sectors have helped mitigate seasonal factors affecting demand and the effects of launching ope-rations in 2012 at three new facilities at Baroda in India, Camaçari in Brazil and Tianjin in China. The Group’s performance is therefore on track to meet the 2015 target.

CREATING A MORE RESPONSIBLE WORLD, WITH ALSTOM

REDUCING THE ENVIRONMENTAL FOOTPRINT

In December 2012, for its third year as a participant in the Carbon Disclosure Project (CDP)*, the Group received a score of 97 out of a possible 100 (up from 88 last year) and thus qualified for inclusion in the Carbon Disclosure Leadership Index (CDLI). Alstom was also the top scorer in the French “Industrials” sector.

* An NGO representing 655 institutional investors.

Launched in 2011, Alstom Grid’s Energy Treasure Hunt programme, which aims to raise team awareness of energy savings, was responsible for a 2.4% reduction in the Sector’s energy footprint in 2012/13, by promoting eco-efficiency and local initiatives. Currently adopted in France, China, India and the United States, this programme is soon to be expanded to all of Grid’s operations. Recognised as a best practice, the programme has also spawned similar initiatives, such as Thermal Power and Renewable Power’s Energy Saving Days.

HUNTING DOWN ENERGY WASTE

96

REDUCING THE GROUP’S CARBON FOOTPRINT

In 2008, the Group set a goal of reducing greenhouse gas emissions from its worldwide operations, ex-pressed in tonnes of CO2 equivalents, by 20% over the next seven years. Between 2011 and 2012, Alstom continued to decrease its greenhouse gas emissions, achieving a 2% reduction over the year.

Emissions of sulphur hexafluoride (SF6), a particularly potent greenhouse gas used by Grid, are monitored separately. The Group’s specific target relating to SF6, set in 2012, is to achieve an 8% reduction in these emissions by 2015. Essential to Grid’s operations and those of its clients, this gas offers unique properties as an insulator, quenching electric arcs very effectively. However, due to its very high global warming poten-tial (24,000 times greater than CO2), emissions of this greenhouse gas must be strictly limited.

In addition, the full range of actions implemented – lowering leak rates during equipment filling operations and testing phases, improving gas-handling practices during daily production activities and reducing the vo-lume of SF6 contained in substations by the eco-design of equipement – are the priorities for action in reaching the 2015 target.

SAVING WATER

Another Group target for 2015, set in 2010, is to achieve a 20% reduction in water use at Alstom’s 38 sites located in water-stressed regions, as identified by the World Resources Institute in 2003. The conside-rable efforts brought to bear between 2011 and 2012 by Thermal Power and Transport at their sites in these regions lowered consumption by a further 9%, resulting in a cumulative 21% reduction in water use compared to 2010. Although the Group’s target has thus been excee-ded, Alstom will continue to lower its water consump-tion at these sites, at an annual rate of 3% on average.

At the other sites, which represent 70% of the Group’s water use, significant strides were also made: the savings made possible by the recovery of rainwater, closed-loop systems and various leak detection mechanisms reduced consumption by 10% in 2012. However, it should be noted that the Group’s R&D sites are still heavy water users and particular attention is paid to them.

LIMITING EMISSIONS, RECOVERING WASTE

Developments in the Group’s business, in particular Alstom’s recent addition of activities in the manufac-ture of electrical equipment for power generation and solvent-based paints (for which substitutes are not yet

Most of Alstom’s industrial sites are located outside protected and/or priority areas for the preserva-tion of biodiversity. The Group’s initial assessment of its impact on biodiversity, conducted in 2012, will allow Alstom to better define the scope of its actions. Apart from the numerous initiatives already being pursued in this vein under the aegis of the Alstom Foundation, measures are also being taken to address specific local issues. In the United Kingdom, these include Grid’s installation of nests for bats deprived of their natural habitat at its West Weybridge site and the relocation of badger setts to ensure the safety of these animals at its Bramford site.

ALSTOM SAFEGUARDS BIODIVERSITY


available), are responsible for significant emissions of non-methane volatile organic compounds (VOCs). The Group’s initial goal, set in 2010, to reduce these emis-sions by 10% each year until 2015 has had to be revised due to data uncertainty. Taking the analysis completed by teams at Renewable Power as a starting point, a new, more precise and more exhaustive calculation method has been developed. The results have revealed an increase in VOC emissions compared to 2011 data. Consequently, in line with the new method, the Group has adjusted its target and now aims to achieve a 2% reduction in its VOC emissions each year until 2015.

With respect to the recycling of all waste produced by the Group, Alstom’s goal is to recover 80% of its overall waste by 2015. This rate remained stable at 77% in 2012/13. Continuing efforts to limit waste production and improve recovery for specific items will make it possible to achieve the targeted rate.

HIGHLY MOTIVATED EMPLOYEES

Alstom considers the offsetting of its environmental impact as one of the Group’s most important civic responsibilities. The Sectors implement many initiatives along these lines, all widely supported by their employees, as evidenced by the results of a survey carried out in 2011/12.

In 2012, Renewable Power launched a new project, entitled “We Share the Power”. The idea is not only to share best practices between plants and offices, but also to inspire employees to adopt these practices in their personal lives. Following the example of Grid’s successful Energy Saving Day initiative, a similar event was organised at the Group’s headquarters in Levallois, near Paris. This event involves the partici-pation of volunteers who pit their wits against each

other to find the most energy-saving measures, such as fully shutting down computers at the end of the day or reducing the use of paper.

Electric cars are made available to certain staff, at the Group’s headquarters as well as those of Alstom Grid and Alstom Transport, for example, while Renewable Power’s Hydro Europe entity in Grenoble has had considerable success encouraging its employees to use ecological transportation alternatives, especially bicycles.

One of the ways in which the Group lowers its CO2

emissions is by implementing a strict policy relating to air travel. As part of this policy, Alstom is also moving towards greater use of virtual meetings. A total of 15,700 such meetings were organised in 2012, avoiding the emission of 30,000 tonnes of CO2

equivalents.

For the shipment of gas-insulated busbars to its sites, Grid had been using containers weighing as much as 800 kg that were neither reusable nor recyclable. A joint eco-design project has resulted in the development of a new packaging solution, made from wood. Although recyclable, this new container offers the same advantages as the pre-vious one, with the additional merit of generating an average of only 4 tonnes of waste per site, compared to 62 tonnes using the former method!

REDUCTION AND REUSE OF PACKAGING FOR SHIPMENTS

Opened in April 2012, Transport’s new site in Tarbes-Séméac, France, is classified as a “green” facility. Several of its buildings have been optimised for energy performance: better thermal insulation as well as state-of-the-art electrical equipment for heating, air-conditioning and ventilation. And the results are impressive: overall fossil fuel consump-tion reduced by 10%, electricity by 8%, with 80% of discharged energy captured and reused.In the United States, Thermal Power’s Chatta-nooga site, which has already achieved LEED (Leadership in Energy and Environmental Design) certification to the Gold level, inaugurated its first solar array in 2012: 234 panels delivering 56.16 kW of power. Renewable Power’s wind turbine plant in Camaçari, Brazil has also achieved LEED certification.

“GREEN” BUILDINGS

98

FINANCIAL YEAR ENDED 31 MARCH (IN € MILLION) 2013 2012

SALES 20,269 19,934

Cost of sales (16,324) (16,144)

Research and development expenses (737) (682)

Selling expenses (952) (900)

Administrative expenses (793) (802)

INCOME FROM OPERATIONS 1,463 1,406

Other income 6 3

Other expense (282) (337)

EARNINGS BEFORE INTEREST AND TAXES 1,187 1,072

Financial income 36 55

Financial expense (259) (232)

PRE-TAX INCOME 964 895

Income tax charge (193) (179)

Share in net income of equity investments 47 28

NET PROFIT 818 744

Attributable to:

- Equity holders of the parent 802 732

- Non controlling interests 16 12

EARNINGS PER SHARE (IN €)

- Basic earnings per share 2.66 2.49

- Diluted earnings per share 2.64 2.46

CONSOLIDATED INCOME STATEMENT

FINANCIAL RESULTS

98


SALES 20,269 19,934

Cost of sales (16,324) (16,144)

Research and development expenses (737) (682)

Selling expenses (952) (900)

Administrative expenses (793) (802)

INCOME FROM OPERATIONS 1,463 1,406

Other income 6 3

Other expense (282) (337)

EARNINGS BEFORE INTEREST AND TAXES 1,187 1,072

Financial income 36 55

Financial expense (259) (232)

PRE-TAX INCOME 964 895

Income tax charge (193) (179)

Share in net income of equity investments 47 28

NET PROFIT 818 744

Attributable to:

- Equity holders of the parent 802 732

- Non controlling interests 16 12

EARNINGS PER SHARE (IN €)

- Basic earnings per share 2.66 2.49

- Diluted earnings per share 2.64 2.46

CONSOLIDATED INCOME STATEMENT

FINANCIAL RESULTS



ASSETS

Goodwill 5,536 5,483

Intangible assets 1,982 1,921

Property, plant and equipment 3,024 2,852

Associates and non consolidated investments 698 531

Other non-current assets 515 545

Deferred taxes 1,711 1,472

TOTAL NON-CURRENT ASSETS 13,466 12,804

Inventories 3,144 3,138

Construction contracts in progress, assets 4,158 3,752

Trade receivables 5,285 5,692

Other current operating assets 3,328 3,557

Marketable securities and other current financial assets 36 13

Cash and cash equivalents 2,195 2,091

TOTAL CURRENT ASSETS 18,146 18,243

TOTAL ASSETS 31,612 31,047

EQUITY AND LIABILITIES

Equity attributable to the equity holders of the parent 5,011 4,327

Non controlling interests 93 107

TOTAL EQUITY 5,104 4,434

Non-current provisions 680 804

Accrued pension and other employee benefits 1,642 1,417

Non-current borrowings 4,197 3,863

Non-current obligations under finance leases 433 477

Deferred taxes 284 176

TOTAL NON-CURRENT LIABILITIES 7,236 6,737

Current provisions 1,309 1,414

Current borrowings 283 634

Current obligations under finance leases 42 48

Construction contracts in progress, liabilities 9,909 9,508

Trade payables 4,041 4,080

Other current operating liabilities 3,688 4,192

TOTAL CURRENT LIABILITIES 19,272 19,876

TOTAL EQUITY AND LIABILITIES 31,612 31,047

CONSOLIDATED BALANCE SHEET



ASSETS

Goodwill 5,536 5,483

Intangible assets 1,982 1,921

Property, plant and equipment 3,024 2,852

Associates and non consolidated investments 698 531

Other non-current assets 515 545

Deferred taxes 1,711 1,472

TOTAL NON-CURRENT ASSETS 13,466 12,804

Inventories 3,144 3,138

Construction contracts in progress, assets 4,158 3,752

Trade receivables 5,285 5,692

Other current operating assets 3,328 3,557

Marketable securities and other current financial assets 36 13

Cash and cash equivalents 2,195 2,091

TOTAL CURRENT ASSETS 18,146 18,243

TOTAL ASSETS 31,612 31,047

EQUITY AND LIABILITIES

Equity attributable to the equity holders of the parent 5,011 4,327

Non controlling interests 93 107

TOTAL EQUITY 5,104 4,434

Non-current provisions 680 804

Accrued pension and other employee benefits 1,642 1,417

Non-current borrowings 4,197 3,863

Non-current obligations under finance leases 433 477

Deferred taxes 284 176

TOTAL NON-CURRENT LIABILITIES 7,236 6,737

Current provisions 1,309 1,414

Current borrowings 283 634

Current obligations under finance leases 42 48

Construction contracts in progress, liabilities 9,909 9,508

Trade payables 4,041 4,080

Other current operating liabilities 3,688 4,192

TOTAL CURRENT LIABILITIES 19,272 19,876

TOTAL EQUITY AND LIABILITIES 31,612 31,047

CONSOLIDATED BALANCE SHEET

100


NET PROFIT 818 744

Depreciation, amortisation and expense arising from share-based payments 543 621

Post-employment and other long-term defined employee benefits (65) (61)

Net (gains)/losses on disposals of assets 34 1

Share in net income of associates (net of dividends received) (18) (27)

Deferred taxes charged to income statement (73) (94)

NET CASH PROVIDED BY OPERATING ACTIVITIES - BEFORE CHANGES IN WORKING CAPITAL

1,239 1,184

CHANGES IN WORKING CAPITAL RESULTING FROM OPERATING ACTIVITIES (150) (968)

NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES 1,089 216

Proceeds from disposals of tangible and intangible assets 57 24

Capital expenditure (including capitalised R&D costs) (738) (813)

Increase/(decrease) in other non-current assets 37 15

Acquisitions of businesses, net of cash acquired (472) (65)

Disposals of businesses, net of net cash sold (2) (73)

NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES (1,118) (912)

Capital increase/(decrease) including non controlling interests 351 (1)

Dividends paid including payments to non controlling interests (243) (206)

Changes in ownership interests with no gain/loss of control (48) -

Issuance of bonds & notes 350 560

Changes in current and non-current borrowings (174) 13

Changes in obligations under finance leases (45) (42)

Changes in marketable securities and other currentfinancial assets and liabilities

(11) (237)

NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES 180 87

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 151 (609)

Cash and cash equivalents at the beginning of the period 2,091 2,701

Net effect of exchange rate variations (49) -

Other changes 2 (1)

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2,195 2,091

Income tax paid (240) (264)

Net of interests paid & received (186) (170)

CONSOLIDATED STATEMENT OF CASH FLOWS

100


NET PROFIT 818 744

Depreciation, amortisation and expense arising from share-based payments 543 621

Post-employment and other long-term defined employee benefits (65) (61)

Net (gains)/losses on disposals of assets 34 1

Share in net income of associates (net of dividends received) (18) (27)

Deferred taxes charged to income statement (73) (94)

NET CASH PROVIDED BY OPERATING ACTIVITIES - BEFORE CHANGESIN WORKING CAPITAL

1,239 1,184

CHANGES IN WORKING CAPITAL RESULTING FROM OPERATING ACTIVITIES (150) (968)

NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES 1,089 216

Proceeds from disposals of tangible and intangible assets 57 24

Capital expenditure (including capitalised R&D costs) (738) (813)

Increase/(decrease) in other non-current assets 37 15

Acquisitions of businesses, net of cash acquired (472) (65)

Disposals of businesses, net of net cash sold (2) (73)

NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES (1,118) (912)

Capital increase/(decrease) including non controlling interests 351 (1)

Dividends paid including payments to non controlling interests (243) (206)

Changes in ownership interests with no gain/loss of control (48) -

Issuance of bonds & notes 350 560

Changes in current and non-current borrowings (174) 13

Changes in obligations under finance leases (45) (42)

Changes in marketable securities and other currentfinancial assets and liabilities

(11) (237)

NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES 180 87

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 151 (609)

Cash and cash equivalents at the beginning of the period 2,091 2,701

Net effect of exchange rate variations (49) -

Other changes 2 (1)

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2,195 2,091

Income tax paid (240) (264)

Net of interests paid & received (186) (170)

CONSOLIDATED STATEMENT OF CASH FLOWS


ANALYSIS OF CHANGE IN NET CASH POSITION


NET CASH/(DEBT) VARIATION ANALYSIS (*)

Changes in cash and cash equivalents 151 (609)

Changes in marketable securities and other current financial assets & liabilities 11 237

Changes in bonds and notes (350) (560)

Changes in current and non-current borrowings 174 (13)

Changes in obligations under finance leases 45 42

Net debt of acquired entities at acquisition date and other variations 119 (303)

Decrease/(increase) in net debt 150 (1,206)

NET CASH/(DEBT) AT THE BEGINNING OF THE PERIOD (2,492) (1,286)

NET CASH/(DEBT) AT THE END OF THE PERIOD (2,342) (2,492)

* The net cash/(debt) is defined as cash and cash equivalents, marketable securities and other current financial assets and non-current financial assets directly associated with liabilities included in financial debt, less financial debt.


ANALYSIS OF CHANGE IN NET CASH POSITION


NET CASH/(DEBT) VARIATION ANALYSIS (*)

Changes in cash and cash equivalents 151 (609)

Changes in marketable securities and other current financial assets & liabilities 11 237

Changes in bonds and notes (350) (560)

Changes in current and non-current borrowings 174 (13)

Changes in obligations under finance leases 45 42

Net debt of acquired entities at acquisition date and other variations 119 (303)

Decrease/(increase) in net debt 150 (1,206)

NET CASH/(DEBT) AT THE BEGINNING OF THE PERIOD (2,492) (1,286)

NET CASH/(DEBT) AT THE END OF THE PERIOD (2,342) (2,492)

* The net cash/(debt) is defined as cash and cash equivalents, marketable securities and other current financial assets and non-current financial assets directly associated with liabilities included in financialdebt, less financial debt.

ALSTOM3 avenue André-Malraux92309 Levallois-Perret CedexImmeuble SextantFranceTel.:+33 (0)1 41 49 20 00www.alstom.com

ALSTOM THERMAL POWERBrown Boveri Strasse 7CH-5401 BadenSwitzerlandTel.:+41 (0) 56 205 77 33www.alstom.com/power

ALSTOM RENEWABLE POWER4 avenue André-Malraux92309 Levallois-Perret CedexImmeuble OctantFranceTel.:+33 (0)1 41 49 20 00www.alstom.com/power

ALSTOM TRANSPORT48 rue Albert Dhalenne93482 Saint-Ouen CedexFranceTel.:+33 (0)1 57 06 90 00www.alstom.com/transport

ALSTOM GRIDImmeuble GaliléeQuartier Michelet-La Défense 10FranceTel.:+33 (0)1 49 01 61 00www.alstom.com/grid

CONTACTS

ALSTOM

3 avenue André-M

alraux92309 Levallois-P

erret CedexFranceTel.: +33 (0)1 41 49 20 00w

ww

.alstom.com

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