Alstom's Activity and sustainable development report 2013/14

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

2013/14

WITH A PRESENCE IN MORE THAN 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’S SUCCESS IS BASED ON ITS 93,000 EMPLOYEES APPLYING ITS ETHICS PRINCIPLES RIGOROUSLY IN CLOSE

COOPERATION WITH THE GROUP’S STAKEHOLDERS.

THESE SHARED COMMITMENTS ARE EXPRESSED IN PRODUCTS AND SERVICES THAT BEAR THE STAMP

“WITH ALSTOM.”

CONTENTS

2 PRESENTATION4 THE GROUP6 INTERVIEW WITH THE CHAIRMAN8 GOVERNANCE12 RESULTS16 SHAREHOLDER RELATIONS

18 YEAR BOOKLIFE AT ALSTOM

44 INNOVATING WITH ALSTOMin 4 key industrial Sectors

46 THERMAL POWER50 RENEWABLE POWER54 GRID58 TRANSPORT

62 LIVE WITH ALSTOM64 COMMITTING WITH ALSTOM

for sustainable development to support local communities

72 GETTING INVOLVED WITH ALSTOM in a responsible corporate culture for the protection of the environment

80 FINANCIAL RESULTS

PAGE _18YEAR BOOKLIFE AT ALSTOMA SUMMARY IN IMAGES OF NEWS PACKED WITH ORDERS, PRODUCTIONS AND INNOVATIONS.

PAGE _44INNOVATING WITH ALSTOMALSTOM DEVELOPS IN ALL OF ITS ACTIVITIES INNOVATIVE AND SUSTAINABLE SOLUTIONS THAT RESPECT AND IMPROVE THE ENVIRONMENT.

PAGE _62LIVE WITH ALSTOMALSTOM HAS A SOLID CORPORATE CULTURE, UNDERPINNED BY VALUES EVERYONE SHARES AND ETHICAL COMMITMENTS.

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT/3

ALSTOM is one of the world leaders in power generation, power transmission and rail infrastructure. The Group delivers turnkey integrated power plant solutions as well as related equipment and services for a wide range of energy sources, thermal and renewable, and offers a large choice of solutions for power transmission. Alstom also provides the most comprehensive range of rail products and services.

ONE GROUP, FOUR SECTORS

POWER GENERATIONALSTOM OFFERS SOLUTIONS WHICH ENABLE ITS CUSTOMERS TO GENERATE RELIABLE, AFFORDABLE AND ECO-FRIENDLY POWER.

MANAGING ELECTRICAL GRIDS

RAIL TRANSPORT

has the most complete portfolio of thermal power generationtechnologies – coal, gas, oil and nuclear – and holds leadingpositions in turnkey power plants, equipment, services for theinstalled base and air quality control systems.

ALSTOM THERMAL POWER

ALSTOM RENEWABLE POWER

offers the most comprehensive range of renewable power generation solutions today: hydropower, wind power, geothermal,biomass, solar and tomorrow ocean energies. For more than100 years, Alstom has been the world leader in hydropower, theplanet’s largest source of renewable energy.

ALSTOM GRID

The world leader in the design and construction of solutions forelectrical grids for operators and industries, Alstom Grid suppliesintegrated and customised turnkey solutions, like medium to high-voltage AC and DC substations. The solutions developed by AlstomGrid enable the efficient transmission of electricity and support thedevelopment of Smart Grids and Supergrids.

ALSTOM TRANSPORT

With a global approach that 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 integrated systems, Alstom Transportoffers the widest range of high-tech rail solutions.

A GLOBAL PRESENCEWORKFORCE DISTRIBUTION AT 31 MARCH 2014

93,000 EMPLOYEES

€21.5 BILLION

IN ORDERS BOOKED

€733 MILLION

IN RESEARCH & DEVELOPMENT

IN OVER A HUNDREDCOUNTRIES

10%

8%

59% 20%3%NORTH AMERICA

SOUTH AMERICA

EUROPE

ASIA & PACIFIC

AFRICA & MIDDLE EAST

How would you describe the results for FY 2013/14?Our order intake was lower than in 2012/13, in an unfavourable economic context. It should be remembered that the world market for thermal power

plants has fallen from 260 gigawatts in 2008 to less than 150 gigawatts in 2013. While Thermal Power suffered from this difficult market’s impact on new equipment, it nevertheless recorded 11 orders for gas turbines, in line with its forecasts, and booked a record level of service contracts, which represented more than half of the Sec-tor’s orders.Renewable Power achieved good commercial results, booking €2.6 billion of new orders in the hydropower and wind power markets.Grid booked €3.5 billion of new orders. This level was sta-ble year-over-year, excluding the two exceptionally large HVDC contracts signed in 2012/13 in India and Germany.Regarding Transport, the Sector once again recorded a strong level of orders, at €6.4 billion. Major contracts were signed in Saudi Arabia with a turnkey metro project, in France with regional trains and in Chile with the modern-isation of the Santiago metro system.As a result of the successful execution of our contracts, con-solidated sales increased 4% organically. Sales increased in Renewable Power, Grid and Transport, while Thermal Power’s sales were stable.

Alstom continued cost reduction programmes over the past year. Did these efforts have an impact on your in-vestment policy?Not only did we continue these efforts, we intensified them. Cost reduction is the goal of our performance improvement plan, known as Dedicated to Excellence (d2e), enabling us to reduce costs by more than €500 million in March 2014 com-pared to the 2012/13 cost base, thanks to the combined efforts of the Sectors plus Corporate and shared services.At the same time, we continued the necessary investments to expand and strengthen our industrial facilities with expenditures of €565 million. These investments were used in Tianjin, China, to create the Group’s largest hydropower industrial site and in Brazil to undertake construction of the first tramway produc-tion line for South America, which Transport will install at the Taubaté site. We allocated around €730 million to R&D, includ-ing among other, Grid’s launch of an energy storage system that optimally balances energy flows on power grids, or Transport’s Axonis turnkey metro system for densely populated cities.

You describe a situation that on balance is rather good for Alstom. Under these conditions, why consider selling the Group’s Energy activities?Alstom’s short-term future is not threatened, but my re-sponsibility is to address the strategic challenges facing Alstom and to prepare for the future. My key priority and objective are to ensure a future for each of Alstom’s activi-ties and its employees.

In April 2014, Alstom announced that General Electric (GE) had made a firm offer to acquire the Group’s Energy activities, covering the Thermal Power, Renewable Power and Grid Sectors together with the Corporate and shared services. According to the terms of this offer, if this project is concluded, Alstom would focus on its transport activities, where it is a world leader. Patrick Kron, Chairman and CEO, having commented on FY 2013/14, explains the reasons for an operation which aims to ensure the future for Alstom’s activities and employees.

“TRANSFER THE ENERGY ACTIVITIES TO A GLOBAL PLAYER WHILE STRENGTHENING OUR LEADERSHIP IN RAIL TRANSPORT”Interview with Patrick Kron *

* Comments recorded on 14 May 2014 ** High voltage direct current

6

Why should we carry out such an operation now? Because the markets are experiencing structural changes in the energy sector more than elsewhere. The European market is down and under pressure. On top of this, custom-ers have increasing financing needs, while competition is intensifying from Asian players, who rely on large domestic markets and benefit from massive financial support. Faced with this situation in the energy markets, a company has to have a critical size. Remaining alone could prove to be a risky choice for Alstom’s future. GE’s offer can meet these strategic challenges by transferring our energy activities to a global player with the necessary resources to invest in R&D and support customers around the world.The two groups’ energy portfolios are extremely complementary:- In thermal power, Alstom and GE have complementary

product lines in steam turbine and gas turbine technologies;- In service activities, Alstom’s comprehensive product port-

folio matches GE’s global presence perfectly;- In wind power, Alstom is small with a competitive product

line in offshore wind power while GE is more focused on onshore wind power;

- In hydropower, Alstom is a leading global player while GE isn’t present;

- In power transmission, Alstom and GE offer complemen-tary products and solutions and complement each other geographically.

Consequently, I believe GE’s offer responds well to the strategic challenges I mentioned. As explained, as part

of the process, the Alstom Board will examine the offer and should it conclude positively, the Alstom employees’ representative bodies would be informed and consulted before entering into any definitive agreement. Comple-tion of the transaction would be subject to merger con-trol and other regulatory clearances and the approval of the shareholders. The Board has reserved the right to respond to unsolicited offers that could lead to a superior offer to Alstom.

If the project to sell the Energy activities is concluded suc-cessfully, Alstom would refocus on rail transport. Will the company have the critical size to confront the competi-tion from major groups? Alstom Transport is already a world leader, with 28,000 em-ployees, nearly €6 billion of revenues and a backlog of or-ders corresponding to approximately four years of opera-tion. The Sector has the rail industry’s largest portfolio in a growing market, driven by the increasing urbanisation around the world and the increasing environmental con-cerns. This excellent commercial, technological and indus-trial positioning is illustrated by the recently won contract for suburban trains in South Africa for a total of €4 billion, the largest contract in Alstom’s history. Finally, if the ener-gy transaction is completed, Alstom Transport will have the financial strength to fund its growth and seize acquisition opportunities.

4 6 7 8 9321

Keith CarrGeneral Counsel

Grégoire Poux-GuillaumePresident of Alstom Grid

Nicolas TissotChief Financial Officer

Jérôme PécressePresident of AlstomRenewable Power

Patrick KronChairman and Chief Executive Officer

Henri Poupart-LafargePresident of Alstom Transport

Philippe CochetPresident of Alstom Thermal Power

Bruno GuillemetSVP,Human Resources

Defining strategy and general policies, setting corresponding 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 management of career development and succession planning across the Group, general employee relations, global compensation and benefit-related guidelines and policies.

EXECUTIVE COMMITTEEat 31 March 2014

8 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT / 9

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 governance 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 functions. By ena-bling quicker, more reliable and more competitive operations, the in-ternal control system aims to ensure that local laws and regulations are complied with, that information and data, including financial information, are reliable and that operations are completed in an optimal manner. The Board of Directors has duly noted Mr. Georges Chodron de Courcel’s decision not to renew his directorship, which he has held for 12 years, at the close of the General Meeting of 1 July 2014. The Board has decided to propose to this next General Meeting the appointment of Mrs. Bi Yong Chungunco as independ-ent director for a term of four years.

3

Olivier BouyguesDeputy Chief Executive Officer of Bouygues

4

Gérard HauserDirector of companies

5

Philippe MarienRepresentative of Bouygues SA

6

Lalita GupteNon Executive Chairman, ICICI Venture Funds Management Company Ltd

1

James William LengChairman of AEA Investors Europe

2

Klaus MangoldChairman of the Supervisory Board of Rothschild GmbH (Frankfurt)

BOARD OF DIRECTORSat 31 March 2014

10

9

Amparo MoraledaDirector of companies

11

Patrick KronChairman and Chief Executive Officer

12

Jean-Martin FolzDirector of companies

7

Candace BeineckeChair, Hughes Hubbard & Reed LLP

13

Katrina LandisExecutive Vice President, Corporate Business Activities, BP plc

8

Alan ThomsonPresident of Hays plc

10

Georges Chodron de CourcelDeputy Chief Executive Officer of BNP Paribas

14

Pascal ColombaniSenior Advisor of A.T. Kearney

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT / 11

ORDERS€ billions

SALES€ billions

SATISFACTORY PROGRESS ON THE d2e PERFORMANCE PLAN

In spite of a difficult economic environment for new build orders in the Thermal Power market, orders remained higher than sales over the year. Orders were down 6% on a constant scope and exchange rate basis.

Alstom’s consolidated sales increased 4% organically over the pri-or year. On the same basis, Thermal Power’s sales remained stable while Renewable Power’s sales grew solidly (+9%) like the sales of Grid (+6%) and Transport (+9%).

2012/13 2013/14

20.320.3

1.8

DISTRIBUTION 2013/14THERMAL GRID

TRANSPORT RENEWABLE

8.8

5.9

3.8

ORDER BACKLOG€ billions

INCOME FROM OPERATIONS€ millions

The depreciation of certain emerging countries’ currencies reduced the order backlog €2.3 billion from 31 March 2013. Consequent-ly, the order backlog was down slightly, representing 30 months of sales.

On a comparable basis, operating profit remained relatively stable (+1%).

2012/13 2013/14 2012/13 2013/14

d2e PLAN € millions

The Dedicated to Excellence (d2e) performance plan has shown real progress driven by the implementation of strict expenditure measures at both Sectors and Corporate levels.

*compared to the 2012/13 cost base

more than €500

million of savings *

2012/13 2013/14 DISTRIBUTION 2013/14THERMAL GRID

TRANSPORT RENEWABLE

9

6.4

3.5

2.6

23.8 21.5

52.9 51.5 1,463 1,424

DISTRIBUTION 2013/14

23.2

17.9

5.54.9

THERMAL GRID

TRANSPORT RENEWABLE

12

SHAREHOLDERS’ EQUITY€ millions

NET PROFIT€ millions

NET DEBT€ millions

Shareholders’ equity remained stable year-over-year.

Net profit was impacted primarily by the increase in restructuring costs, financial expenses and a higher tax rate, plus specific legal fees.

Debt increased during the year primarily due to the negative free cash flow and the payment of a dividend for FY 2012/13.

2012/132012/13 2013/142013/14

5,109

2012/13 2013/14

5,087556

768 3,0192,342

2012/13 2012/13 2012/13 2012/132013/14 2013/14 2013/14 2013/14

OPERATING PROFIT AND OPERATING MARGIN BY SECTOR€ millionsThe Thermal Power Sector’s operating margin continued to improve, driven by Services’ contribution and cost control. The Renewable Power Sector’s operating margin was impacted by an unfavoura-ble product mix and the ongoing erosion of prices in wind power. At Grid, the operating margin contracted slightly, to 5.6%, penalised

by the execution of certain standard product contracts at low mar-gins. Finally, the Transport Sector’s operating margin continued to recover, reaching 5.6%, driven by the increase in activity and tighter control on costs.

10.4%10.6%

4.9% 4.5%

6.2% 5.6%

5.4%5.6%

930

THERMAL RENEWABLE GRID TRANSPORT

238 211297 330

88 82

959


_Workforce distribution by region (% of total workforce, including long-term absentees) *

ADAPTING THE WORKFORCE TO MARKET DEMAND

TRAINING IS ESSENTIAL TO EXPLAIN TO EMPLOYEES THE GROUP’S ETHICS AND COMPLIANCE POLICY.

ALSTOM HAS REDUCED THE NUMBER OF WORKPLACE ACCIDENTS FOR EMPLOYEES AND CONTRACTORS

AND CONTINUED ITS EMPLOYEE SAFETY TRAINING EFFORTS.

PROMOTING SAFETY ETHICS AT THE CENTRE OF THE GROUP’S PRIORITIES

_Injury frequency rate (employees and contractors)*

_Number of employees who have completed Environment, Health and Safety training (in-class)*

_Number of employees who have received training on ethics (cumulative since 2006)*

1.8

1.21.4

AN EVER STRONGER COMMITMENT TO SUSTAINABLE DEVELOPMENT

FOCUSING ON EMPLOYEES

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

Traditional regions(Europe, North America).

THE INCREASE IN THE NUMBER OF EMPLOYEES IS PROPORTIONALLY MORE PRONOUNCED IN EMERGING COUNTRIES.

17% 83%

2006

25% 75%

2010

31% 69%

2014

2012 2012 2012 2013 2014 20142014 2013 2013

* Data collected annually on 31 March.

14,3007,200

9,500

1,7003,358 2,914

14

_Cumulative annual CO2 emissions avoided for the global power generation sector with the operation of the Thermal Power and Renewable Power projects commissioned between 2003 and 2012 (based on the power plants’ first year of operation data)

_Cumulative annual SO2 emissions removal achieved thanks to Thermal Power’s Air Quality Control System (AQCS) projects commissioned between 2003 and 2012 (based on the power plants’ first year of operation values)

HELPING CUSTOMERS REDUCE THEIR CO2 EMISSIONSIn million tonnes of CO2 avoided per year

AND IMPROVE THE AIR QUALITYIn thousand tonnes of SO2 captured per year

Thermal Power

Renewable Power

REDUCING THE ENVIRONMENTAL IMPACT THROUGH OPERATIONS AND SOLUTIONS

35

2003

92

2006

138

2009

201

2012

_Intensity of greenhouse gas (GHG) emissions of Alstom’s permanent sites (tonnes eq. CO2 /sales in € millions) Excluding CO2 emissions related to the Grid Sector’s fugitive SF6 emissions and the CO2 emissions related to the energies consumed during test activities; data updated compared to the figures published in previous years.

_Energy intensity of Alstom’s permanent sites (MWh/€ millions of sales)at 31 December 2013

REDUCING THE INTENSITY OF ENERGY AND GREENHOUSE GAS (GHG) EMISSIONS

Target 2015: 75

2012

81

2011

80

2013

77

Target 2015: 2225

24

2011

25

2012 2013

2003

124

2006

305

2009

1,909

2012

2,700

_Percentage of permanent manufacturing sites (> 200 employees) certifi ed ISO 14001 (environmental management)

EXPANDING ISO 14001 CERTIFICATION TO ALL SITES

REDUCING PERMANENT SITES’ WATER CONSUMPTION

_Permanent sites’ water consumption (thousands of m3)

Objective: -2% per year

2012

4,699

2011

4,619

2013

4,403

100%2013


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, its strategy and recent highlights.

COMMUNICATION WITH INDIVIDUAL SHAREHOLDERSAlstom offers its individual shareholders opportunities to discuss and interact. During FY 2013/14, in addition to the annual general meeting, the Group took part in the “ Village des actionnaires ” (Shareholders Village) in Lyon, France, and information meetings in Amiens and Marseille, organised in partnership with the F2IC (French Investment Club Federation) and CLIFF (French Association for Investor Relations).

The Group organises site visits for individual shareholders to provide more insight into Alstom’s business activities. In 2013/14, a group of shareholders visited the Reichshoffen site, France, specialised in the production and testing of trains. Another

group toured the Belfort site, France, where they discovered the production lines for steam turbines and turbo-generators.

In addition to its periodical financial publications, Alstom offers its shareholders a range of information tools, including the Shareholders’ letter, which is published twice a year when the Group announces its interim and annual results. As announced last year, the newsletter is now available in digital format to reduce the carbon footprint and paper consumption.

In 2014/15 the Group plans to maintain active communication with individual shareholders by continuing to organise similar events and making full use of the various communication tools available.

SHARE OWNERSHIP

According to a shareholder survey conducted by Euroclear France and Orient Capital, Alstom’s capital is held by approximately 250,000 shareholders. At 31 March 2014, share capital ownership broke down as follows:

CAPITAL STRUCTURE BY REGION

SHAREHOLDER RELATIONS



1%

11%

29%58%

INDIVIDUAL SHAREHOLDERS

INSTITUTIONALINVESTORS

BOUYGUES EMPLOYEES

3%6%

REST OF EUROPE NORTH AMERICA

UNITED KINGDOM+ IRELAND REST OF THE WORLDFRANCE

54%18%

18%

16

RELATIONS WITH INSTITUTIONAL INVESTORS AND FINANCIAL ANALYSTSRoadshows are organised several times a year in major American and European finan cial centres (France, United Kingdom , Switzerland and Germany) in addition to meetings with investors and analysts that take place throughout the year.The Group also participates in sector spe-cific and general conferences organised by brokerage firms in the United Kingdom, France and the United States. During the year the Group also had the opportunity to present its core principles for Corporate governance and social and environmental responsibility.

STOCK MARKET NEWSOver the course of FY 2013/14, Alstom’s share price dropped 37.6%. On 31 March 2014, the share price stood at €19.82 and the Group’s stock market capitalisation was €6.12 billion.

KEEPING INVESTORS INFORMEDwww.alstom.comThe “Investors” section of the Alstom website has been specially designed to provide shareholders with easy access to all of the Group’s financial communications: share price quotes, downloadable historical data for the past five years, financial results, presentations, registration documents, shareholders' letters, dates of important meetings, frequently asked questions, as well as a service that dispatches the Group's press releases by e-mail.

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.

CONTACTS

Delphine Brault — Vice-President, Investor Relations

Alstom3 avenue André-Malraux92300 Levallois-Perret, FranceTel.: +33 (0)1 41 49 20 00Fax: +33 (0)1 41 49 79 25

e-mail [email protected]

France Toll free number: +33 (0)800 50 90 51 from Monday to Friday from 9 a.m. to 7 p.m.

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

Euronext ParisISIN code: FR0010220475Ticker symbol: ALOFace value: €7

Number of shares: 308,702,146Market capitalisation: €6,118,476,534Main indexes: CAC 40

SBF 120Euronext 100

SHARE PRICEAlstom share at 31 March 2014Share price performance (in €) – April 2013/March 2014

Base: Alstom share price at 28 March 2013: €31.75 Source: Euronext Paris.ALSTOM CAC 40

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http://www.alstom.com

mailto:[email protected]

18 ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT / 19

LIFE

AT

ALST

OM This overview of FY 2013/14

reveals a year that was rich in technological breakthroughs, achievements, new industrial facilities and saw many orders comes in from around the world. In short, it is an excellent demonstration of the Group’s dynamism as it continues to move forward, even in a difficult economic context.

The private German operator AKN, which carries more than 10 million passengers annually, orders 14 Coradia Lint regional trains for delivery in 2015. In 15 years, Alstom has sold almost 750 trains to the federal state of Schleswig-Holstein.

CCOOOORRAADDDIIAA LLIINNTT FOR THE HAMBURG REGION

14AN ”ALL-IN-ONE” INTELLIGENT BOX During the GridTech 2013 exhibition in India, Alstom Grid presented P60 Agile, its new range of intelligent electronic devices (IEDs). These are specially designed for Smart Grids and provides comprehensive protection, control, recording and measurement of electrical power systems. Embedded in digital substations, these new IEDs will enable Grid to expand its product line to the power distribution systems market and strengthen its leadership in the area of substation automation.

HESOP EXPORTS TO ENGLAND

Alstom will supply to UK Power Networks Service for its reversible electrical substation, HESOP, for the Victoria Line in the London Underground. This system can recover more than 99% of the traction energy generated by braking, thereby improving the energy efficiency and reducing CO2 emissions.YE

ARBO

OK

TRANSPORT

THERMALRENEWABLEGRID

APRIL

20

TRANSPORT


APRIL

IN BHUTAN

Alstom and Druk Green officially launched construction of the service centre for Bhutan Hydropower Services Limited (BHSL), their joint venture company. Through the projects planned in cooperation with Bhutan and India, this centre should play a leading role in developing this region’s hydropower potential.

A RAILWAY COMPONENT PLANTIN RUSSIA

Alstom Transport and its partner, Transmashholding (TMH), inaugurate the plant for their RailComp joint venture company. The site will produce asynchronous traction drives for the electric locomotives

developed and manufactured for the Russian and Kazakhstan railways. This plant is integrated in the NEVZ site, TMH's manufacturing plant in Novotcherkassk, in the south of Russia.

In April, Alstom announced two major orders in the service area: one in the United States to service three GT24 turbines in a gas power plant at the Lake Road site in Connecticut, and the other in the United Kingdom to service five GT13E2 gas turbines installed at South Humber Bank power plant, north of the country.

SERVICE CONTRACTS IN THE UNITED STATES AND THE UNITED KINGDOM

22

JUNE

TRANSPORT


MAY


A NEW TURNKEY METRO SYSTEMAxonis offers a reduced urban footprint, simplicity, speed of construction and latest transport technologies in terms of automated metro and integrated signalling. Introduced by Alstom at the UITP (International Association of Public Transport) world congress in Geneva and to the market at the end of 2013, Axonis is an elevated metro system especially suited to the needs of fast growing cities that are looking to install with a fast, safe, comfortable and lower cost metro system.

A MAJOR INDUSTRIAL PARTNER FOR GRID AND KEPCOIN KOREA

With a view to implementing HVDC technology in Korea, KAPES (the joint venture company created in 2012 by Grid and Kepco, the main electric power producer on the peninsula) signs a license agreement with LSIS, the country’s leading manufacturing company specialised in electric and automation equipment. This new partnership strengthens Grid’s presence in the Asian HVDC market.

TM

PRODUCED PER YEARAlstom confirmed its industrial plan with the construction of two plants in France specialised in the manufacturing of offshore wind generators and nacelles. The two plants are sized to produce 100 Haliade™ annually. This production is intended for the wind farms that the French government awarded in April 2012 to the EDF led consortium that Alstom is the exclusive supplier to. It will also supply foreign markets. ON THE SMART GRID

After three years of close collaboration on several demonstration projects, Alstom and Intel, the world leader in microprocessors, sign an agreement to jointly develop the technological architecture for increasingly complex electrical grids. The agreement also covers research, with Intel's McAfee subsidiary, on solutions to protect against cyber attacks.

GRID ACQUIRES ENGEMAN IN BRAZIL AND STRENGTHENS ITS SERVICE ACTIVITYThrough the acquisition of Engeman Serviços e Manutenção, a Brazilian specialist in maintaining and servicing medium and high-voltage equipment and systems, Alstom Grid expands its service offer and adds 300 customers to its distribution and transmission portfolio.

After having signed three successive contracts to supply GT13E2 gas turbines to Harbin Turbine Corporation (HTC), one of the major Chinese power generation component manufacturers, Thermal Power signs a long-term licensing agreement with HTC to produce and sell these gas turbines in China.

HTC and Thermal Power will also create an aftermarket service joint venture company for the turbine’s Chinese customers. The Chinese gas turbine market is growing rapidly and Alstom's GT13E2 turbine offers the highest output to date in its category.

2424

TRANSPORT


JUNE

LATIN AMERICA’S LARGEST HYDROELECTRIC WHEELIN BRAZIL

9 metres in diameter and 270 tonnes: these are the vital statistics of the first of five turbine wheels. The Taubaté site will manufacture the five Francis 370 MW turbines that will equip the Teles Pires hydropower plant, 2,900 km from Taubaté.

®IN AVIGNON

The city of Avignon, in the south of France, chooses the Citadis® Compact to equip its tramway system. Citadis® is now operating in 43 cities around the world and more than 1,760 tramways have been ordered.

ECO 110 POWERS THE FINNISH GRIDIn Lappeenranta, in the east of Finland, the Muukko wind farm has begun to produce electric power for the grid on schedule. Muukko is the first wind farm built by Alstom in the Nordic region and one of the largest land sites in Finland. With an estimated annual production of more than 40 GWh, the seven 3 MW ECO 110 in Muukko should supply 3,000 homes.

GRID AND KER CREATE A JOINT VENTURE COMPANY FOR HVDC PROJECTS IN RUSSIA

As part of modernising the power transmission infrastructure in Russia, Alstom Grid and the KER group announce the creation of a 50/50 joint venture company. This company will participate in complex HVDC projects to improve the reliability of the electric power supply and to apply advanced Super Grid technologies.

26

TRANSPORT


JULY


BETWEEN ALSTOM AND DONGFANG ELECTRICIN CHINA

According to the terms of the agreement signed with Dongfang Electric Corporation (DEC), a Chinese group, Alstom will supply turbines and generators to future AP 1000 projects, the third generation pressurised water nuclear reactor designed by Westinghouse. This agreement is based on Arabelle™, Alstom’s steam turbine. Through its cooperation with DEC Alstom has already supplied more than half of the turbines and generators for the Chinese programme, including the Ling Ao, Taishan and Hongyanhe power plants.

stt

POWER PROJECTIN MEXICO

Alstom signs a contract with ENEL Green Power in Mexico to supply and commission 34 onshore wind turbines for the Sureste I – Phase II project. The wind farm will generate more than 350 GWh per year.

3 AUTOMATED METRO LINESFOR RIYADH

On the occasion of one of the most ambitious turnkey metro projects in the world, the FAST consortium* is chosen to equip three of the six future lines of the Saudi capital with a complete automated metro system. The €6 billion contract includes €1.2 billion for Alstom Transport, which will deliver a fully integrated metro comprising 69 two-car 36-metre long Metropolis® trainsets, Urbalis signalling, HESOP braking energy recovery system and Appitrack fast track laying technology. The six metro lines will be built simultaneously and include 87 stations covering 170 kilometres when the network enters commercial service in 2018.* The FAST consortium is comprised of FCC (leader), Freyssinet Saudi Arabia, Samsung, Strukton, Setec, Typsa, Atkins and Alstom.

ALSTOM STRENGTHENS ITS LEADERSHIP POSITION IN THE TURKISH HYDROPOWER MARKETAlstom signs three major contracts for approximately €100 million to supply the hydropower equipment for three projects in northern and eastern Turkey: Alpaslan II (292 MW), Kaleköy Superieur (636 MW) and Tepekişla (72 MW), which will generate 3,500 GWh per year. Alstom is the leading component manufacturer in the Turkish hydropower sector, which it has been supplying for more than 60 years.

THE FIRST TRAMWAYFOR ECUADOR

The city of Cuenca selects Alstom to supply 14 Citadis® tramsets. A Unesco World Heritage Site, Cuenca opts for the APS technology, a catenary-free solution, to preserve the architecture of its historic centre. This first 10-kilometre 20-station line is scheduled to open in 2015.

THE MOST POWERFUL HYDROPOWER UNITS IN THE WORLDThe four units manufactured by Alstom for the Xiangjiaba underground hydropower plant in China successfully starts commercial operation. They constitute the most powerful generating units in the world. The electricity produced by each turbine represents the equivalent, in China, of the annual consumption of approximately 5 million inhabitants.

IN CHINA

Four Alstom Francis turbines equipped for the first time in the world with an automatic self-closing ring gate system were installed and successfully tested at the Ahai hydropower station in Yunnan. This system can automatically cut the water flow and stop the turbine. The complete system will include 5 turbines.

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TRANSPORT


SEPTEMBER


4 TURBINE GENERATOR UNITSFOR SAUDI ARABIA

Thermal Power will supply four 720 MW steam turbine generator units to the Al Shuqaiq fuel oil power plant, 600 kilometres south of Jeddah, built by Hyundai Heavy Industries (HHI). The order is valued at €170 million, on top of the €750 million order won in April to equip the Yanbu power plant. Alstom equipment supplies more than 20% of the Wahhabite kingdom’s electric power.

ALSTOM OVERHAULS THE LIGHT RAIL SYSTEMIN BALTIMORE

The Maryland Transit Administration (MTA) awards Alstom a $150 million contract (approximately €110 million) to refurbish Baltimore’s entire light rail fleet. The 53 light rail vehicles will be overhauled in Alstom’s Hornell plant in New York.

sstt

CCENNTTTRRE INN IINNDDIA FOR THE DEVELOPMENT OF SMART GRIDSAt the Pallavaram site, Chennai, Alstom Grid inaugurates its first Indian digital substation automation skills centre. Their development, essential for the transition from traditional power grids to smart grids, will also make it possible to integrate renewable energies efficiently and improve the connectivity between grids. This centre marks Alstom’s commitment to the development of smart grids in India.

IN THE UNITED STATES

GDF Suez Energy North America and Alstom finalise a €360 million ($480 million) long-term contract to modernise and service four natural gas power plants. They operate with 14 Alstom GT24 gas turbines, which currently generate enough electricity to power more than three million homes in Texas and Massachusetts.

Alstom signed a cooperation agreement with GDF Suez to respond to France’s call for expressions of interest to equip the Raz Blanchard pilot tidal power farm off the French coast. The technical parameters to be defined concerning the site’s optimal operation will propose an operation and maintenance strategy.

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TRANSPORT


HYDRO INAUGURATES ITS LARGEST POWER PLANT IN THE WORLD IN TIANJIN

250,000 sq m, advanced energy efficient designed facilities, 2,000 employees and an investment of €100 million: the new Alstom site in China, officially inaugurated on 17 September by Patrick Kron, Chairman and CEO of Alstom and Jérôme Pécresse, President of Renewable Power, is now the

showpiece of Hydro’s industrial activity in the world. This site will be able to design and manufacture up to 26 turbine generator units annually. From R&D to maintenance, Tianjin will offer a complete value chain for hydro projects in China and beyond, in Southeast Asia and the rest of the world.

MMMMEEEETTTRRRROOO CCCAARS

FOR THE BUENOS AIRES METRO

The public company Subterráneos de Buenos Aires, signs a contract with Alstom Transport covering the delivery of 20 six-car Metropolis® trainsets and the modernisation of 48 other metro cars for €140 million.

SEPTEMBER

Nottingham Express Transit (NET) receives the first of its 22 Citadis® tramways ordered in 2011. Alstom’s plant in Barcelona is building the 32-metre long tramsets. Alstom Transport will also maintain these as well as the 15 tramways already in service.

®®

32

TRANSPORT


OCTOBER


CORADIA LINER WILL REPLACE TRADITIONAL TRAINS IN FRANCE

As part of the project to renew the Corail intercity trains circulating on the non-TGV network, the national SNCF operator orders 34 Coradia Liner trainsets, the latest generation of regional trains developed by Alstom Transport, for a total of €350 million. The first deliveries are scheduled for the end of 2015.

HAPPY BIRTHDAY, PENDOLINO!Alstom and Ferrovie dello Stato, the Italian railway, celebrate the 25th anniversary of Pendolino at Milan’s Central Station. On 29 May 1988, two Pendolino ETR450 entered commercial service on the Rome to Milan line, cutting one hour off the journey between the two cities. The tilting technology, designed by two Fiat Ferroviaria engineers, Franco Di Majo and Oreste Santanera, makes it possible to use conventional infrastructures and to maintain a very high speed in curves. A key product in Alstom’s high-speed product line (Alstom raised its stake to 51% in Fiat Ferroviaria in 2012), Pendolino is the world’s best-selling high-speed train with some 500 trains sold in thirteen countries, including Italy, Slovenia, Finland and Russia.

FOR THE ALSTOM TIDAL TURBINECurrently tested at the European Marine Energy Centre (EMEC) in the Orkney Islands, Scotland, the tidal stream turbine, which has reached its full power of 1 MW, has been supplying electric power into the grid since its installation in 2013. Trials will continue in 2014.

IN THE MIDDLE EAST

In Jebel Ali, southwest of Dubai, Grid inaugurates its first mobile service workshop in the region. It has the capacity to service all types of Alstom and Third Party large power transformers, diagnose components and repair them.

600 TRAINS FOR €4 BILLIONIn the presence of the French president, François Hollande, and the South African president, Jacob Zuma, Gibela* signs with PRASA**, the South African passenger rail agency, “the largest contract in its history and, undoubtedly, the largest ever awarded by South Africa to a single company” underlines Henri Poupart-Lafarge, the president of Alstom Transport: a contract to supply 600 X’Trapolis Mega trainsets (3,600 cars) between 2015 and 2025. This is the first phase of the vast programme to replace the suburban trains in service in Pretoria, Johannesburg, Cape Town and Durban, covering 1,200 trains in all, one of the largest railway programmes in the world.

As well as supplying rolling stock, the contract also covers transferring skills, training personnel and industrialising the region. While the Lapa plant in Brazil will manufacture the first 20 trainsets, the remainder will be manufactured by the production site Alstom will build in Ekurhuleni, east of Johannesburg. It will then provide technical assistance and supply spare parts for 18 years.*Gibela is the name of the consortium led by Alstom.** PRASA: Passenger Rail Agency of South Africa.

FIRST HYDRO PROJECT IN INDIAN KASHMIR

GVK Power and Infrastructure awards Alstom a contract for more than €100 million to supply five Francis turbines (four 205 MW and one 30 MW), which will equip the Ratle hydropower station, the largest project currently underway in the State of Jammu & Kashmir.

3434

TRANSPORT


NOVEMBER

HALIADE™ INSTALLED OFF THE BELGIUM COASTHaliade™ is the largest wind turbine ever installed in real offshore conditions. Off the coast of Ostende, this turbine culminates at more than 170 metres above the sea level.

34

36

DECEMBER

TRANSPORT


NOVEMBER


GRID FILLS ITS ORDER BOOKIN SAUDI ARABIA

Between July and November 2013, Alstom Grid won nine contracts from the Saudi Electricity Company (SEC), which manages the country’s electric power grid, to produce and install a series of major equipment. Demand for electricity is increasing 8% annually and the production capacity is expected to increase from the current 40 GW to 70 GW in five years. Alstom equipment supplies more than 20% of the Kingdom’s electric power.

thCITADIS® DELIVERED!Alstom delivers the 1,500th Citadis® on the occasion of the commissioning of Île-de-France’s new Line 7 tramway on 16 November.

PENDOLINO BEATS ITS OWN WORLD SPEED RECORDPendolino sold to the Polish railway reached a speed of 293 km/h on 24 November on the conventional line northwest of Krakow. A national high-speed rail record and also a world record for this train.

IN SAUDI ARABIA

Confident in the development of gas-fired power plants in the Middle East, Alstom and Arabian Bemco Contracting (BEMCO) found a 50/50 joint venture company to produce power generation components including Alstom heat recovery steam generators (HRSG), which are used in combined cycle gas-fired power plants. Through this technology transfer, Alstom Arabia Power Factory will have an exclusive license in

Saudi Arabia and will also supply the States on the Arabian peninsula plus Jordan, Iraq, Syria, Lebanon and Egypt. Alstom and Bemco have already worked together on PP12 in Riyadh, the world’s largest combined cycle power plant with 40 gas turbines, 10 steam turbines and 40 HRSG. The new industrial site will be located in King Abdullah Economic City near Jeddah, an investment of €50 million.

TWO 500 MW BOILERS FOR TAMIL NADU

Bharat Heavy Electricals Limited (BHEL) awards a €125 million contract to Alstom to supply components for the new Neyveli thermal power plant in the south of India. This power plant will be the first high capacity (2x500 MW) lignite-fired power plant in the country and the region’s leading source of power. This project is one of many contracts signed between Alstom and BHEL, demonstrating their solid cooperation since 2005. BATTERY ENERGY STORAGE

The estimated 40% growth in renewable energies by 2018 is already creating grid congestion problems during high demand periods. Alstom Grid launches MaxSine™ eStorage, a battery energy storage solution that can balance energy flow on the grid and manage electric power distribution based on demand during peak periods, such as evenings in urban zones. Depending on the number of modules, 2 to 12 MW are available immediately to meet consumption peaks. MaxSine™ eStorage will be implemented on Nice Grid, one of the largest smart grid demonstration projects in France.

ALSTOM WILL BUILD THE GEOTHERMAL POWER PLANTFOR LOS HUMEROS III-A

Alstom signed a €30 million contract with the Mexican Federal Electricity Commission to construct the “Los Humeros III – Phase A” geothermal power plant. This power plant will operate together with two other geothermal power plants Alstom installed recently in the same area (Los Humeros II-A and Los Humeros II-B) These three projects will have a combined generating capacity of 75 MW.

38

TRANSPORT


JANUARY


CHENGDU AND XI’AN METROS IN CHINA

First batch of contracts for Alstom metros in Central and Western China: Alstom and Satee (one of its Chinese joint ventures) win two contracts worth a total of €75 million to supply traction equipment for more than 550 cars that will run on the metro lines in Chengdu and the historic city of Xi’an. The cars will be equipped with Optonix, Alstom’s latest traction technology designed and developed specially for China.

GRID AND HYDRO QUEBEC “SMART” PARTNERSHIPAs part of their partnership concluded in 2012, Grid and IREQ (the research institute of Hydro Quebec, Canada’s largest electric power producer) agree to market a technology that can detect instabilities on the grid and trigger a corrective action within 170 ms. The smart grids, with increasingly interconnected grids and production sources, should be the first beneficiaries of this technology.

AN ULTRA LOW-EMISSION 1,800 MW COAL-FIRED POWER PLANTFOR POLAND

Alstom signs several contracts valued at approximately €1.25 billion with the consortium in charge of supplying two 900 MW units to PGE, Polska Grupa Energetyczna. The key to these contracts is Alstom’s supply of its USC (ultra-supercritical) technology, including boilers, turbine generators, steam turbines, air quality control systems and ancillary equipment, which will make Opole 5 and 6 Poland’s most powerful and also its most environmentally advanced coal-fired power plant. All of the components will be manufactured locally at Alstom’s Wroclaw and Elblag sites.

GRID ACQUIRES REASON TECNOLOGIAIN BRAZIL

In acquiring the Brazilian company Reason Tecnologia, specialised in measurement systems and solutions for digital substation automation, Grid strengthens Alstom’s presence in this market in Latin America. This acquisition follows the acquisition of ASAT in Canada and the inaugurations of two new digital substation automation centres of excellence in France and India.

stt

PUMPED STORAGE POWER PLANTIN ISRAEL

Alstom enters the Israeli hydro market as it signs two contracts totalling €120 million with PSP Investment to supply equipment for the 300 MW pumped storage power station in Gilboa, Galilee. The project includes two pump-turbines, ancillary equipment and the control system plus operation and maintenance of the site for 18 years. Gilboa will be commissioned in 2018.

GRID’S IDMS SYSTEM IN THE NETHERLANDS

Stedin, a major player in electricity distribution in the Netherlands and supplier of gas and electricity to more than two million customers including the port of Rotterdam, is the first in Europe to adopt an Integrated Distribution Management System (IDMS), Alstom’s IDMS. An additional step in securing and increasing the reliability of the Stedin group’s electric grid as Stedin aims for 100% customer satisfaction.

IN BRAZIL

The new facility, spanning 16 hectares, will be built alongside the existing hydro equipment manufacturing site in Taubaté. The manufacturing line will meet the needs of the Latin American markets, beginning with Brazil. Production will start in December 2014 with the 32 catenary-free Citadis® tramways ordered by the VT Carioca consortium in September 2013 for Rio de Janeiro for the 2016 Olympic Games.

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TRANSPORT


FEBRUARY

THE SRI CITY PLANT IN INDIA DELIVERS ITS FIRST TWO METRO TRAINSETSIN CHENNAI

The first 9 Metropolis® trainsets (36 cars) for the Chennai metro in India have been produced and tested at Transport’s plant in Lapa, Brazil, the main production site for stainless steel trainsets. The new ultramodern Sri City rolling stock plant in Andhra Pradesh has taken over now, delivering two trainsets to the public operator Chennai Metro Rail Limited, which has ordered a total of 42 trainsets (168 cars).

Alstom T&D India will supply the world’s largest Wide Area Monitoring System (WAMS) to Power Grid Corporation of India (PGCIL), India’s main electric power transmission operator. WAMS will protect the grid against the challenging disturbances that affect it and guarantee the best performances in terms of flow and reliability.

Alstom signs a contract with Deepwater Wind to supply five Haliade™ 150-6 MW wind turbines to the Block Island pilot wind farm located off the coast of Rhode Island. The wind farm, which should enter service in 2016, will be one of the first offshore wind farms in the United States and the first in the world to use the Haliade™. The five wind turbines will produce approximately 125,000 MW of electricity annually and Alstom will provide maintenance for 15 years. This is an important step that enables the Haliade™ to continue its technological development before launching mass production and opens commercial prospects abroad.

IN BRAZIL

Alstom and Renova sign one of the world’s biggest partnerships in the onshore wind market.

Valued at more than €1 billion, this agreement includes the supply, over three to four years,

of more than 440 wind turbines as well as operating and maintenance services.

With a capacity of 2.7 to 3 MW each, these turbines will supply the country with more than 1.2 GW of new wind generation capacity. These wind turbines will equip the Renova wind farms in the state of Bahia.

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TRANSPORT


MARCH


IN IRAQ

4 GT13E2 FOR ZUBAIRIraq chooses Alstom to construct a 740 MW gas-fired power plant that will support the expansion of Zubair, one of the country’s largest oil fields, near Basra. Alstom will be responsible for engineering, construction and commissioning the power plant as well as supplying all key equipment, including four GT13E2 gas turbines.

AND 4 GT26 FOR AL-ANBARAnother contract in Iraq: Alstom will also equip the 1,642 MW combined cycle power plant in Al-Anbar in western Iraq. The order for €225 million covers the supply of four high performance GT26 gas turbines, four heat recovery steam generators (HRSG) and two steam turbines and air-cooled turbine generators. The consortium comprised of Metka SA and Metka Overseas Ltd. is responsible for constructing the power plant.

IN DUBAI

Alstom’s customers will be able to use the centre to develop and integrate software locally and perform factory acceptance tests on site. Grid will also provide customers with customised training so they can implement these technologies to monitor and manage their electric grids.

They are 45 years old and can remain in service for another 20 years: Alstom is going to fully refurbish Santiago’s 35 metro trainsets, built originally by Alstom. This €220 million contract will create 150 local jobs. Santiago’s metro system is Latin America’s most extensive, after Mexico’s system, and carries more than 2 million passengers daily.

IN KOREA

Renewable Power wins a contract with GS Engineering & Construction to supply ten ECO 110 wind turbines for the Gimnyeong wind farm on the Island of Jeju. Korea relies on foreign sources for 96% of its energy supply.

IN CHILE

Alstom won more than €100 million of contracts to supply two GT13E2 gas turbines and related long-term services for the Kelar combined cycle power plant in Mejillones, in northern Chile.

INNOVATING WITH ALSTOMIN 4 KEY INDUSTRIAL SECTORS

KEY FIGURES INNOVATIONSTransport

Grid

lower line losses

HIGH VOLTAGE DIRECT CURRENT (HVDC)

50%GIS bays in service

GAS-INSULATED SUBSTATIONS (GIS)

20,000

user countries

CONTROL ROOM SOLUTIONS

60 on-site interventions

SERVICES

35,000

TRAINS

Citadis® tramwaysordered

in 15 years

1,800

SERVICES

cars maintained**2010-2012

6,600

SYSTEMS

in the world* for tramways systems

*2007-2013

No. 1The turnkey metro solution that allows fast-growing cities to develop their public transit network faster and at a lower cost.

Axonis, a turnkey metro solution

Transport

This new circuit breaker is a key compo-nent in a high voltage direct current grid in the event of a short circuit. It repre-sents a major step forward in the devel-opment of a meshed direct current grid. This will have the effect of significantly increasing the integration of renewable energies and enabling energy exchanges and supply across continents.

Direct Current Circuit Breaker

Grid

in the world for onboard

signalling

SIGNALLING

No. 1

a key comppo-t current grgrid cuit. It repree-in the devel-current grid.

f significantly of renewable gy exchanges s.

r

allows r public er cost.

In 2013 Alstom unveiled an advanced cir-culating fluidised bed (CFB) boiler provid-ing 600 MW of power. This boiler decreas-es CO2 emissions and energy consumption by 6% while offering flexibility and reliabil-ity through its expertise in the USC (ultra- supercritical) and CFB technologies.

CFB600, a circulating fluidised bed boiler

Thermal Power

Alstom developed a new two-part water-lubricated guide bearing - to support and maintain hydroelectric turbines in their rotational axis. It can be installed very quickly on hydroelectric turbines, thereby reducing the service interruption and related costs.

A water-lubricated guide bearing

Renewable Power

Renewable Power

Thermal Power

25%of the generating capacity in the world operates with Alstom technology

STEAM TURBINESTHERMAL POWER PLANTS

40% of the generating capacity in the world operates with Alstom technology

STEAM TURBINE NUCLEAR POWER PLANTS

for the new version of theECO 122

WIND

3 MWsolar thermalpower plants

SOLAR

250 MWworldwide in pumped storage

HYDRO

No. 1

15,000SERVICES

people, the largest organisation on the market

GAS TURBINES

1,500 gas turbines installed worldwide

of generating capacity

GEOTHERMAL

390 MW

In 20culating 6es COby 6%ity thsupe

CFflu

The

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President of Alstom Thermal PowerPhilippe Cochet

What is your assessment of FY 2013/14?We operate in a very complex and highly contrasted market for new builds. Managing this complexity is a challenge we share with all of our competitors. In industrialised countries, the recovery is too weak to result in sizeable investments. And in high-growth countries, such as China and Southeast Asia, this growth is not at sufficiently high levels to offset the drop in Europe.

Is this a worrying drop?In Europe, the market for new thermal power plants has declined by nearly 50% from 2007/08 and we don’t expect a recovery for several years. Without being catastrophic, this market remains low, except in a few countries like the United Kingdom and Poland. On the other hand, the Asian and Middle East markets should grow in light of increased electricity demand, which calls for them to build new capacities.

What are the different dynamics inside this global thermal power market?

The nuclear market has potential but the process to commission projects is very lengthy and complicated. As a consequence, it isn’t a continuous activity. Nevertheless, a number of projects are on the agenda, in China and Finland, or under discussion in South Africa and Saudi Arabia. The

coal market has remained rather stable but the gas market has declined substantially. But this hasn’t prevented us from having a reservoir of signed projects in the 50Hz and 60Hz markets*, which firms up our return to this market. Overall these resulted in more than a dozen projects over the last year, like the recent Zubair power plant in Iraq, which has made us the country’s leading supplier of turnkey power plants.

What are your main areas of satisfaction in this difficult context?

Our components and power island portfolio enabled us to win our biggest contract over the last fiscal year, to supply €1.24 billion worth of our cutting-edge ultra super-critical technologies to the Opole power plant in Poland, which will be one of Europe’s largest coal-fired power plants. Our know-how in delivering turnkey thermal power plants was also a source of major contracts, including Köln Niehl - one of the rare gas projects in Germany - a cutting edge combined-cycle power station that can reuse the heat from power generation for urban heating. Another important reason for being satisfied is that we successfully renewed all of our service contracts, which were coming to the end of their term, both in the United States and in Europe.

“We opperrate in a complexx maarket, with diffeeerent dynamics, which requuiree substantial flexxibiliity in order to coontinually be closer

to our cuusttomers’ needs. TThat is why our orgaaanisation is more cuustomer--centtric than ever.”

* Current frequency and voltage vary from one country to another. The frequency in Europe is 50Hz while the frequency in the United States is 60Hz.


Is service a key activity that is growing at Thermal Power?

The market for the installed base is sustained by the need to modernise, to bring plants into compliance with new regulations and to reduce the cost of electricity. Indeed, we are accelerating this activity, which is a significant growth driver for us. It is based on a vast international presence and solid experience in retrofit solutions, both on our own installed base and that of our competitors. We are especially proud of the long-term service contract we won recently in the United States with Oklahoma Power, thanks to our ability to meet our customer’s needs. We are also proud of being a leader for services for other original equipment manufacturers (OOEM). Our service activity is not limited to gas, but extends to our entire thermal portfolio.

Are partnerships another growth lever?It is a question of being close to the market and also of sharing risks and successes. We are pleased with our development in Saudi Arabia, where, in a joint venture with Bemco, we are going to build a manufacturing facility for heat recovery steam generators (HRSG) and where we have inaugurated a maintenance shop in Rabigh. Our collaboration and our partnership strategy in India with Bharat Forge Ltd. and Russia with Rosatom are very active.

And, of course, always closer to customers…That goes without saying. We operate in a complex market, with different dynamics, which require substantial flexibility in order to continually improve

the way we answer our customers’ needs. And our organisation is more customer-centric than ever. We are reaping the fruits of our numerous initiatives to increase contacts with our customers, with our customer loyalty indicator improving 4 points compared to our last survey two years ago. We will continue in this direction in order to continue to provide more value and to innovate everywhere they are expecting us.

In a versatile market, competitiveness rhymes with agility. What are your solutions?

First of all, we are accelerating our Dedicated to Excellence (d2e) programme, to continue adjusting our ways of working to customer needs. This means we are adapting our footprint, but also that we continue improving our cost competitiveness, for instance on our KA26 combined cycle power plants where we exceeded our cost optimisation objectives this year. It also means we are delivering projects right the first time for our customers, with improved lead time: we are now able to deliver a new coal plant in 42 months versus 50 months previously. Secondly, we sustain our R&D efforts at a high level to further develop our product portfolio and meet market needs. So this year again we were able to launch some great products including our 600 MW CFB ultra-supercritical boilers and our new air cooled generators. These developments are done taking the particular needs of our customers into account and as an example we have interviewed more than 600 customers to design our new gas turbine platform.

Service accounted for more than half of the Sector’s orders in the year.

48

FOCUS THERMAL POWER

INSPECTION ROBOTICS: OPTIMISING THE LIFE-CYCLE OF ROTORSAlstom offers extensive service solutions in order to help thermal power plants remain competitive, by maximising performance and lifetime profitability, while keeping safety, reliability and environmental compatibility at the top of priorities.

A COMPREHENSIVE PROGRAMME FOR ROTORSIt is based on regular rotor assessments in order to detect component degradation early in the lifecycle, and to predict and exploit the maximum rotor lifetime. Such a programme is continuously updated to remain as comprehensive as possible.

It combines OEM (Original Equipment Manufacturer) insights, finite element methods (FEM), and extensive material data bases with field experience and non-destructive testing methods like Eddy Current and Ultrasonic testing.

Design services from turbine rotors to turnkey power plants

Monitoring during scheduled site inspections

Risks predictionsby evaluation of the rotor status and trend information

Repair is recommended when the rotor condition is deteriorated

Rotor reconditioning is a holistic overhaul, planned well in advance

Replacement with advanced planning and smart exchange schemes

Alstom’s turbine rotor lifecycle management programme

President of Alstom Renewable PowerJérôme Pécresse

Compared to the previous year, what were the most striking changes in your Sector?

First of all, an excellent commercial momentum, with orders up sharply, including several very large contracts. Our market share in hydropower remains at a historically high level and in new equipment we are the world leader with a 30% market share. In onshore wind projects, our orders grew sharply, especially in Brazil. Second point, the sustained momentum of our investments should enable us to transform these orders into revenues: in China, with the Tianjin Hydropower plant, in Brazil through the implementation of our industrial system for onshore wind turbines and in France with the start of construction of two factories for offshore wind turbines.

And with regard to offshore wind projects, there is considerable progress…

That is the third point. We have continued to advance in our development plan with, in particular, the offshore installation of our second prototype Haliade™ 150-6MW, off the Belgium coast at Ostend. We also booked our first order for five of these wind turbines for the Block Island offshore project in the United States.

A “marine” trend seems to be taking shape at Renewable. What are the growth

prospects for these energies?We believe in the potential of marine energies because they represent significant energy reserves and they have fewer constraints of acceptance than other renewable energies. But these technologies only have a future if they have a realistic chance of attaining by 2020/2025 a MWh production cost that is competitive with other energies. We are active in offshore wind turbines, fixed and floating, as well as in tidal stream energy. We support each technology based on its level of maturity. Today we have gone beyond the R&D phase and are validating the technology and economic parameters as we reach volumes that create economies of scale so our customers can lower production costs.

Hydropower is still an Alstom strength. Which strategy will you implement to

maintain your place among the world leaders?

We will implement a three-prong strategy. First we are investing to improve our machines’ technological performance, which last year enabled us to commission the most powerful hydropower

““OOne off ourr prrime objecctiveess is that serrvice shhould account fforr 25% of sales wwwithin a feww yearss.”


machine ever installed, an 850 MW turbine on the Xiangjiaba project in China. Second we are investing to strengthen our central and decentralised Research and Technology resources. At the same time, we are working on our competitiveness by improving our machines’ production costs. Finally, we are maintaining a strong local presence with production, procurement and project execution resources on all continents. Today, we are the most international player in hydropower.

Energy storage is being called on to play an increasing role. Alstom is also the world leader in this field with its pumped storage technology. What developments do you see

in this sector?We see a move towards variable speed pumped storage solutions, which provide improved responsiveness and performance compared to fixed speed technologies. We currently have two projects, one in Switzerland and one in India. We also see overall growth in the pumped storage market, but which clearly remains less than the market’s needs to balance the grid, due to a lack of adequate incentives for storage remuneration, especially in Europe.

In the concentrated solar thermal energy field we are working on a molten salts storage solution to accompany the tower technology we have developed jointly with BrightSource Energy.

Like Transport and Thermal Power, today your sector is focusing on developing the

service activity. Where are you at present in this area? Which particular service aspects do you intend to focus on and what is your

objective in terms of percentage of your total activity?

Yes, we are clearly emphasising service in our hydropower and wind power activities. By strengthening our resources and by ensuring they are dedicated resources. By establishing partnerships with Thermal Power, whose skills, experience and physical infrastructure in many countries may be useful to us. By seeking to participate in all aspects of service, from supplying spare parts and carrying out more or less important retrofits to operation and maintenance contracts. By enriching our line of service oriented products and our technological research on service. One of our prime objectives is that service should account for 25% of sales within a few years.

The hydroelectric generating units in Xianjiaba, China, have a capacity of 800 MW each, making them the most powerful ones in the world. The four units, designed and manufactured in Alstom’s Tianjin plant for the power station, began their commercial service in July 2013.

52

FOCUS RENEWABLE POWER

HALIADETM 150-6 MW: HIGH YIELD, UNCOMPROMISING RELIABILITYHaliade™ meets environmental stakes by increasing the reliability and competitiveness of renewable energies.

Alstom has developed and installed the Haliade™ 150-6 MW, the largest offshore direct-drive new generation wind turbine. Suited to all offshore conditions and uncompromising in terms of reliability, this wind turbine delivers energy at a lower cost and can power up to 5,000 homes.

THE HALIADE™ ADVENTURE Installed in the North Sea, in the Belwind wind farm, the Haliade™ has also drawn the attention of the American market, integrating the US Department of Energy’s innovation programme. In addition, Alstom will supply 5 Haliade™ to the Block Island pilot farm, the United States’ 1st offshore project.In France, 240 wind turbines will be installed offshore in the Fécamp, Courseulles-sur-Mer and Saint-Nazaire wind farms, with a total capacity of 1.4 GW.

A NEW INDUSTRIAL CLUSTER CREATED With the construction of 4 plants dedicated to assembling offshore wind turbines, Alstom has positioned itself as a leader in the offshore wind power industry. Alstom has opened a unique engineering centre specialised in marine energies, bringing together the Group’s synergies in renewable marine energies.

150 m diameter rotor:for efficiency.The large rotor diameter combined with 6 MW of power guarantees high and competitive energy efficiency. The wind turbine, designed with aerodynamic blades suited to the most extreme ocean conditions, can handle record wind speeds.

Alstom Pure Torque®:an innovative technology This unique rotor support protects the generator from deflection loads, thereby increasing reliability and reducing maintenance costs.

“Advanced High Density” direct-drive permanent magnet generator: for reliability. The use of a permanent magnet generator improves the wind turbine’s energy efficiency. The reduced number of rotating parts increases the equipment’s overall mechanical reliability.

President of Alstom GridGrégoire Poux-Guillaume

Your comments on FY 2013/14?It was a good year carried out in a difficult environment. We can congratulate ourselves on successfully staying the course commercially and reaching our objectives in spite of highly unfavourable exchange rates following substantial devaluations in the major countries where we are active (India, Brazil, Indonesia and Russia) and despite of the general lack of major new HVDC projects. 2013/14 was a year of intense activity with a record number of calls for tender prepared in the HVDC market. However, we lacked major contracts, which should materialise in 2014/15. We believe we are well positioned to start the year and win successes in line with our current excellent progress in HVDC.

What can we say today about Alstom Grid’s overall visibility?

For the past three years, Grid has been a leading HVDC and Smart Grid player. These two extremely complex fields are at the cutting edge of technology, in which we have made sustained investments in terms of R&D, industrial presence and acquisitions. Today we are harvesting the positive results of this forward-looking policy with major commercial successes and annual double-digit growth. Consequently, Grid has fully asserted its differentiation – a differentiation

based on innovation with, in particular, our VSC MaxSine™ technology that has enabled us to win substantial contracts in Sweden and Germany.

With a significant breakthrough in HVDC…We signed a world first with our prototype direct current circuit breaker, which successfully obtained the market’s shortest interruption time. The race underway is wide open to be the first to offer an effective and commercially viable circuit breaker that can be used to build an interconnected direct current network. This will be a radical change for operators’ ability to carry electricity on a national or regional scale. Consequently, it is extremely important for Alstom and for the market in general.

Is Alstom’s image evolving through the Smart Grid?

The image one usually has of Alstom Grid is that of a player in high voltage and transmission. But Grid is also a distribution player in cities, including in smart neighbourhoods. This understanding of the entire range of networks gives us the capability to build the smart system and management systems for the different components comprising the smart city, as we are doing, for example, on the especially innovative Nice Grid project in France.

“Thhhe Smart GGrid resemblles the deevelopment oof the Internet: innnovation ccomes fromm ccompaniees of all sizess and wwe have

to be oopen to thee bbest practtices in the mmarket.”


Alstom Grid’s development also involves strategic acquisitions…

The Smart Grid resembles the development of the Internet: innovation comes from companies of all sizes and we have to be open to the best practices in the market. Our acquisitions primarily concern companies that can provide technological building blocks to complement our product line (e.g. the recent acquisitions of ASAT in Canada and Reason Technologia in Brazil).

You have also acquired Engeman, a Brazilian service specialist. Is service an essential

activity to Grid’s growth?In the service area, acquisitions are a way to increase the density of our presence so we are closer to our customers and thus more responsive. Service is clearly a key activity for Grid’s growth, as it also is posting double-digit growth. Service has always been an issue for our customers, but it is becoming even more important because the smarter the networks become, the more complex they become and the

more our customers need local technical support. That is what we provide.

You mentioned significant investments in R&D and production capacity. Which regions

in particular?We inaugurated a development and test centre this year for network protection equipment in Pallavaram, near Chennai, India. We also opened a Smart Grid centre in Dubai, which can test grid management applications developed by our customers, either under real conditions or with a customer-specific grid simulation. This is a concrete way to show that the skill is regionalised and local. In the industrial area, we equipped our Baroda plant in India with manufacturing and testing capacity for HVDC transformers, which are intended for both the Indian and world market. As such Baroda is our fourth specialised plant after the plants in England, Brazil and China. Namely three of the four BRIC countries, illustrating Alstom Grid’s local development policy to make capital expenditures near customers and the market.

After acquiring Engeman, a service specialist in Brazil, Grid expanded its service offer on the Rio Madeira project, the world’s longest high voltage direct current transmission line.

56

CENTRALEHYBRIDE

STOCKAGELOCAL

STOCKAGEEN RÉSEAU

CONSOMMATEURSINDUSTRIELS

CENTRALEÉLECTRIQUE

FERMEÉOLIENNE

ÉOLIENNESRÉPARTIES

MICROGÉNÉRATION

VILLEINTELLIGENTE

E-TRANSPORT


FOCUS GRID

SMART GRIDS:CREATING AN ERA OF EXCELLENCE

The objective of implementing a Smart Grid in an electric network is to manage the balance between electricity consumption and production in real time and to optimise the grid’s stability and efficiency.and efficiency.

SMART SOLUTIONS The environmental policies undertaken expand the production of clean and renewable energy. The Smart Grid solutions developed by Alstom are based on “intelligent” technologies that can integrate intermittent sources into the power grids while guaranteeing grid reliability. They optimise:• the energy efficiency of bulk power transmission from multiple

sources of production,• the reliability of complex grids by providing the ability to contin-

uously balance production and consumption, thereby limiting the risks of black-out.

CENTRES OF EXCELLENCE To make it easier to implement Smart Grids, this year Alstom in-augurated three Smart Grid centres, veritable centres of excellence: one in Montpellier for France and Europe, one in Pallavaram, near Chennai, for India and one in Dubai for the Middle East.The Dubai centre includes a software integration platform to test ap-plications before they are deployed and a telecommunications test laboratory that reproduces customers’ configurations. It also has a training centre for future operators.

Transmission gridControl room, real time balancing

Distribution gridControl room, real time monitoring

POWER FLOWS INFORMATION FLOWS

COMBINED CYCLE POWER PLANT

LOCAL STORAGE

STORAGE ON THE GRID

INDUSTRIAL CONSUMERS

POWER PLANT

WIND FARM

DISTRIBUTED WIND TURBINES

MICRO GENERATION

SMART CITY

E-TRANSPORT

Henri Poupart-LafargePresident of Alstom Transport

FY 2012/13 was exceptional in terms of order volume. How would you describe

the past year?Overall, it was an excellent year with significant successes and an order book at a record level at year-end, which gives us great visibility going forward. This year continued the commercial momentum of the previous year and demonstrated, from Saudi Arabia to Brazil and from Ecuador to Israel, the worldwide momentum of our activities and our products, solutions and services. A global strategy crowned by the announcement that we have been selected as a supplier by PRASA, in South Africa, for the largest rail contract ever signed by Alstom. Of course, this winning momentum doesn’t mean we have forgotten the European market, which remains important with orders for very high-speed trains in France and regional trains in France and Germany.

Have urban and peri-urban transit systems become the main growth engines for

Alstom Transport?The needs are immense. This is not only due to urbanisation and the fact that the majority of people now live in cities, but also because many of the already large cities don’t have efficient metro systems. Consequently, our most important growth areas lie in

emerging countries, both in urban and peri-urban areas. Our recent successes demonstrate this.

What is your recipe for success?New products and a renewed ability to propose solutions, based on which we won 7 out of 8 turnkey tramway projects in the world. We know how to control the system, infrastructure, rolling stock and signalling systems and integrate all of this in an offer adapted to cities’ needs. We have made this a priority because this is where the needs are. The challenge is to be able to solve the technical, funding and project management problems that arise.

To return to your global strategy: a plant in India that produces the Chennai metro, a huge

industrial project in South Africa, a just as large contract in Saudi Arabia, new plants in

Canada, Brazil, Algeria, Kazakhstan, etc.How far will you go in this direction?

Our markets are becoming globalised and we have to be close to our customers. It isn’t just a matter of a local sales presence; we also have to have local technical and production capabilities so we can satisfy our customers locally. For the past three years we have pursued a globalisation policy that involves implementing the necessary resources to

“The mmmmajority of ouur aactivityy is sttill iin EEuroppe, but wwithiin threee yyears wee wwwill balaance ouurr activity 50/550 wwith the restt of thhee woorld..”


carry it out in a number of countries, whether it be infrastructure, signalling or the production of rolling stock. The majority of our activity is still in Europe, but within three years, we will balance our activity 50/50 with the rest of the world. The South African contract will be a major component of this rebalancing. Note that we are not going to abandon Europe. It isn’t a shrinking market; on the contrary, it is growing but more slowly than other markets!

Is the partnership with TMH moving towards an expanded range of projects?

We have just celebrated the fifth anniversary of this agreement, which has enabled us to establish a significant presence in the Russian market. Pragmatism must guide our decisions and operations. We are developing new products, implementing more modern plant and equipment and sharing the best practices. We have many projects including locomotives, urban transit (tramways and metros), regional trains, etc. It is a complete partnership.

A few comments about Alstom Transport’s improved operational performance…

Alstom Transport is part of the global Dedicated to Excellence (d2e) initiative launched at the Group level, which will allow us to cross a new milestone in

operational excellence. Execution and competitiveness are our two major action areas. This means trains delivered without defects and on time, a continuous dialogue with the customer, effective and efficient products throughout their useful life, procurement carried out under the best conditions and an internal organisation and execution processes that are more fluid, in production, engineering and procurement.

What innovations can we expect in railway equipment?

Over and above improving passenger comfort and our environmental performance for trains, we are looking for efficiencies at all levels: investment, speed of execution, operating costs, recyclability and end of life cost of equipment. For integrated solutions, we propose Axonis, a comprehensive elevated metro solution that is low cost and quick to deliver. For tracklaying, we rely on Appitrack, up to four times faster than the conventional method, and on its NBT extension, a concrete track system. In addition, Axonis can deliver energy savings of 30 to 40% compared to a traditional system, especially through the use of HESOP energy recovery substations. The performance of Axonis is based on a set of technologies we have developed and will continue to improve.

The largest contract in Alstom’s history was signed in October 2013 in South Africa. It covers, among other things, the supply of 600 X’Trapolis Mega suburban trainsets and the construction of a local manufacturing facility.

60

FOCUS TRANSPORT

CLOSE TO OUR CUSTOMERS

Present around the world, Alstom Transport is well placed to meet the needs of customers who are developing internationally. Transport has developed standardised processes that make it possible to share know-how between its different production facilities around the world and to generate economies of scale. As such the Sector is able to take advantage of the potential of growth markets while reducing the impact of local production cycles.

Alstom Transport has developed a flexible local approach with its customers, who have their own insight into their domestic markets and regulatory constraints, and who increasingly insist that their suppliers develop local industrial content. This flexibility lets the Sector adapt its operational resources to local demand by implementing, as required, joint ventures or strategic partnerships or setting up Alstom industrial facilities.

A GLOBAL PRESENCE FLEXIBILITY AND CLOSE TO CUSTOMERS

Thanks to a flexible approach that ensures both a global presence and facilities in local markets, Alstom Transport is uniquely positioned to take advantage of world demand and meet its customers’ local needs.

9

116

16

8

5

15

2

4

3

TRANSMASHHOLDING - Russia

12 EKZ - Kazakhstan

13 TRTRANS - Kazakhstan

14 RAILCOMP - Kazakhstan

CHENNAI - India

TAUBATÉ - Brazil

BANGALORE - India

CASCO - China, Shanghai

SATCO and SATEE - China, Shanghai

CITAL - Algeria, Annaba

IRVIA - Spain

NTL - France, Alsace

SIGNALLING SOLUTIONS - UK

ABC ELECTRIFICATION - UK

METROLAB - France, Paris

GIBELA - South Africa

Joint venture or strategic partnershipIndustrial presence in fast-growing countries

1 - Metro production facility / 2 - Engineering centre / 3 - Tramway production facility for the Brazilian and Latin American market - 16,000 sq m, €15 million investment for Alstom / 4 - As part of the contract awarded by Chennai Metro Rail Limited, technology transfer from the Lapa facility to the Chennai facility concerning the construction of metros. The first nine trainsets were manufactured in Lapa / 5 - Joint venture for the maintenance and assembly of public tramways / 6 - Partnership with Babcock and Costain to create a European leader in electrification / 7 - Joint venture with Balfour Beatty Rail Projects for signalling activities in the United Kingdom / 8 - Joint venture with JV RENFE to maintain trains / 9 - Joint venture with China Railway Signal and Communication Corporation to supply signalling systems / 10 - Joint venture with CNR to manufacture equipment and trains / 11 - Strategic partnership to design locomotives for the 1520 zone and to establish principles that can be applied to the design of tramways, metros, regional trains and high speed trains / 12 - Joint venture with KTZ and TMH / 13 - Joint venture with TMH / 14 - Joint venture with TMH / 15 - Joint venture to supply PRASA (Passenger Rail Agency of South Africa) 600 X’Trapolis Mega trainsets / 16 - Joint venture with RATP to develop the automated metro of the future / 17 - Joint venture with Fonds Stratégique d’Investissement to acquire Translohr, manufacturer of tramways with tyres.

7

10

LAPA - Brazil

17

1

LIVE WITH ALSTOM LOCAL COOPERATION

Alstom Foundation operations

900families helped to

access electricity in 2013

PARTNERSHIPSUniversities in R&D partnerships

184in 2013

ECO-PERFORMANCETrain recyclability

in 201397%

RESPONSIBILITYSupplier charter

charters signed16,900

ECO-SOLUTIONSmart Grid Technologies

Smart power grids make it easier to integrate and control renewable energy

sources

ECO-PERFORMANCEISO 14001 certification

100%manufacturing sites certified

ENERGY EFFICIENCYCO2 emissions

201million tonnes of CO2 avoided between 2003

and 2012

TRAININGEmployee training

hours in 20131,286,444

ECO-SOLUTIONHVDC* technologies

lower line losses during electricity transmissions

than direct current solutions

50%

SAFETYDecrease in injury frequency rate

from March 2012to March 2014

38%

* High voltage direct current

An R&D engineer, Eva Gouel works on the DS Agile system (Digital Substation), a control software solution that plays an active part in the development of smart grids.

COMMITTING WITH ALSTOM

FOR SUSTAINABLE DEVELOPMENT

ALSTOM IN THE INTERNATIONAL DIALOGUEBased on its long experience, its portfolio of cutting-edge technologies and its strong presence around the world, Alstom prefers to dialogue directly with governmental and international organisations to encourage sustainable development policies. In this glo-balised context, Alstom insists on the impor-tance of fair competition based on reciprocal access to government contracts and protec-tion of intellectual property rights. Alstom also underlines the need for public and pri-vate sectors to make long-term investments to support the development of “clean” tech-nologies.The Group is convinced that the objective of sustainable development requires the deter-mined involvement of all players concerned. It participates in numerous international bod-ies and increased its contribution to various programmes in 2013/14.

CLOSE RELATIONSHIPS WITH CUSTOMERSBusiness growth depends on customer sat-isfaction. It starts with a close relationship based on developing an environment where customer expectations are understood, their opinions are sought out through regular sat-isfaction surveys and their comments are taken into account. Regular events (“cus-tomer clubs,” technical meetings, user

groups, etc.) are organised to consolidate this relationship. The company also provides customers with a range of technical train-ing courses, either in their own premises or in dedicated Alstom centres. Consequently, customers can become familiar with the products and solutions so they get the most out of them. For example, in July 2013, Transport inaugurated its Knowledge Centre north of Paris, France, in a site shared with the Power and Grid Sectors.

A COMMITMENT SHARED WITH SUPPLIERS Continuous improvement is also at the fore-front of Alstom’s partnership relations with its suppliers and contractors. Sustainable de-velopment is integrated in sourcing to reduce social, environmental and ethical risks in the supply chain. Nearly 17,000 suppliers have made a commitment by signing the Group’s Substainable Devolopement charter. An independent specialised organisation evaluates suppliers’ sustainable develop-ment performance based on major inter-national standards like the United Nations Global Compact. At the end of the fiscal year, 1,600 suppliers had been assessed, covering more than 50% of the Group’s purchases. In the event, should the results prove unsatis-factory, the suppliers, backed by Alstom’s sourcing teams, must undertake corrective actions.Then their performance is reassessed.

Pendolino’s 25th anniversary in November 2013 was the occasion for the Transport Sector to add the Pendolino Club to its family of “Customer Clubs,” created in February 2013 with the Metro Club followed by the Coradia Nordic Club, in May. The purpose of these clubs is to serve as international forums that railway network operators can use to share their experiences and points of view between themselves and with Alstom.

TRANSPORT’S CUSTOMER CLUBS

DEMOGRAPHIC GROWTH and increasing urbanisation require “clean” power and efficient means of transportation. At the centre of these issues, Alstom CREATES INNOVATIVE AND SUSTAINABLE TECHNOLOGIES for power generation and transmission and for transport, and ensures that social and environmental concerns are taken into account in all of its activities and relations with stakeholders.


Purchasing plays a central role in this process. The company has developed a training pro-gramme to help them understand the require-ments in terms of sustainable material sourc-ing and supplier assessment and support. At 31 March 2014, 960 members of the sourcing community had taken this training, compared to 780 the previous year.With its strategic suppliers (Leading Partners) who have undertaken to work on a long-term basis, Alstom Transport establishes partner-ships to develop competitive advantages like innovation, engineering, processes, eco-design and international approaches.

STIMULATING INNOVATION As a technology group with a worldwide pres-ence, Alstom pursues an intensive innovation policy in order to remain competitive in a dif-ficult market and anticipate its customers’ challenges. As such €733 million were invested in innovation and R&D during the past year, with a general reorientation

towards increased selectivity in research fields and an acceleration in the synergies em-ployed, both internally between the Sectors and with SMEs, start-ups and universities. Whether it involves framework agreements with the latter or the participation in the Aster Capital investment fund and Horizon Green Tech Ventures in Israel, these synergies are expected to provide strengthened and more productive dynamics. Created during the previous year, Alstom’s Innovation Committee’s mission is to inspire new momentum in the Group’s future tech-nologies. The context of this mission was ex-panded with cross-functional development areas and the implementation of strategic partnerships based on an “open innovation” concept.Five major cross-functional themes, as guide-lines for the R&D strategy, were identified: materials and especially nanotechnologies, power electronics, digital, energy storage and future urban systems.

In order to improve effectiveness, the number of partnerships with universities decreased from 300 to 180 in 20 countries and the Group strengthened its involvement in a number of strategic cooperation agreements: - on materials and nanotechnologies, with

the MIT industrial liaison committee, in the United States, and the Jules Verne Techno-logical Research Institute, in France;

- on power electronics with the research centres at Virginia Tech University, in the United States, the Supergrid Institute in Lyon, France and the European Centre for Power Electronics (ECPE) in Germany;

- on predictive maintenance, with the Cincinnati Research Institute, in the United States, and on digital technology with the Saclay and INRIA SystemX Research Insti-tute, in France;

- on energy storage, with the French Electro-chemical Energy Storage Network (RS2E) in Amiens, France and the European Associa-tion for Storage of Energy; and

- on micro-power grid architectures for future urban systems, with the joint laboratory cre-ated with the City University of Hong Kong.

“I NOVE YOU”

Inaugurated in 2008, this competition aims to reinforce the innovation culture in the Alstom Group. For the sixth edition, 1,900 people from all company activities proposed more than 510 projects; a re-cord. These projects, includ-ed: redesigning the Francis turbine blades with com-posite materials to increase the efficiency of hydropower plants, designing a thermal power plant to recover un-used heat and use it to heat urban neighbourhoods and developing an “open source” automatic testing platform for railway control and supervision platforms.

A CUSTOMER CHARTER

A customer charter, signed by employees, was launched to show Alstom’s commitment to strengthening relations with its customers and improving future collabora-tions with them. This charter is part of the “customer intimacy” programme now fully implemented.

66

FOCUS“OPEN INNOVATION”

At Alstom, R&D and engineering employ approximately 10,000 people. Open innovation is a practice common to the four Sectors. It is embodied in particular in privileged partnerships with research organisations as well as with start-ups, which are either developed from research or are backed by university laboratories.

Alstom provides these small innovative companies with expertise and advice so they can save time. The numerous innovation areas in the Group’s sectors of activity cover, in particular, intermittent energy management and the crucial question of energy storage in batteries, hydrogen, ultra-condensers, the development

of smart systems for energy, mobility, fluid distribution, etc. Innovation needs drive the mobilisation of R&D resources to strengthen the competitiveness of Alstom’s offers, including the plan to introduce an even more open innovation focused category in the Innovation Awards.

Beyond these strategic priorities, the Group intends to foster open innovation as part of its international development, especially in Asia and the emerging countries. Another joint laboratory project is under discussion with the University of Nanyang in Singapore and a startup incubator project for emerging countries has begun, which should soon see its first startup project in India. Other initia-

tives are under discussion in South Africa and Nigeria in the areas of power generation and transport.Finally, an innovative training approach has been implemented in collaboration with Bouygues and the Ecole des Ponts Paris Tech, with the creation of an international master programme in integrated urban systems.

Alstom has formed strategic partnerships with prestigious schools and universities, as here with the Faculty of Science and Engineering, city Universty of Hong Kong, which works with Alstom on the networks of tomorrow.


This Cambodian student attends a class at the “Pour un Sourire d’Enfant” education centre. This NGO, in partnership with the

Alstom Foundation, provides children with accommodation and vocational training.

COMMITTING WITH ALSTOM

TO SUPPORT LOCAL COMMUNITIES

CONTRIBUTING TO EDUCATIONAs a key development factor, education is the first priority for Alstom, which supports schools from the elementary to secondary levels and universities. For example, the programme launched in Norrköping, Sweden, for 14-year-old students, gives them the opportunity over 80 hours to discover the energy and rail transport businesses and the jobs in these sectors. In Seoul, Korea, Alstom employees devoted two days at the end of 2013 to nearly 200 students to present Corporate Social Responsibility and the role of cutting-edge companies. To give some other examples, Alstom awards prizes for the excellent academic results of em-ployees’ children in Malaysia, and in Poland, it finances a mathematics competition .

Alstom collaborates with more than 180 uni-versities around the world. Through these ac-tions, Alstom, reinforcing its employee value proposition, identifies new employees, forms partnerships and participates in the education and training effort .Alstom is involved in students’ access to employment and offers them opportunities to develop their skills. For example, in the United Kingdom, Sweden and France, spon-sorship programmes, staffed by volunteers, have been implemented to promote industri-al occupations, both for men and women. In the United Kingdom, Alstom is a member of

Engineering UK and WISE (Women in Science and Engineering) and participates with 125 “ambassadors” in the STEM (Sci-ence, Technology, Engineering and Mathe-matics) programme .This support policy also offers students in-ternship opportunities in the company. In China, 90 students from Wuhan were hosted in one of the first experimental engineering schools, created by HUST (HuaZhong Uni-versity of Science and Technology) and the Alstom subsidiary, Wuhan Boiler Company Ltd. In addition, Alstom participates in local initiatives to help young people in difficult social situations. Such was the case in Brazil where, in cooperation with the Ioschpe and Pescar Foundations, the three Alstom sites in Taubaté, Canoas and Itajuba provide 50 young people with one year of training that prepares them for the working world.

HELPING DEVELOP LOCAL COMPANIESAlstom's second priority: contributing to local development. The most recent example is the birth of a new industrial sector: offshore wind farms in France. It is taking shape with the construction of two industrial sites accom-panied by the creation of 1,000 direct and 4,000 indirect jobs to carry out the contracts won with EDF in this new market. 80 local manufacturers, suppliers and contractors, including 65 SMEs, responded to the calls for tender to construct these industrial plants.

In 2013, Alstom formalised ITS POLICY ON RELATIONS WITH LOCAL COMMUNITIES based on three priorities: the economy, education and social issues. The Group applies this policy equally everywhere it intervenes, through action plans that meet the local expectations. Employees are encouraged to actively support this policy in the field.

ALSTOM AUSTRALIA’S FIGHT AGAINST CHILDHOOD CANCERS

In Australia, all Alstom employees were consulted to choose a charitable action that funding would be concentrated on. The Children’s Cancer Institute Australia (CCIA) was designated. This medical research institute concentrates on the cause, treatment and prevention of childhood cancers. The Group’s sites mobilised to find funding. Employees at the “Cambridge Workshop” site in Tasmania were the first to contribute AU$1,000 to the association. Another example: 12 cyclists from the Sydney sites completed an intense 12-hour ride on 4 April 2014, raising AU$12,000 for the Institute. The Group’s objective is to collect AU$35,000 in one year.


In South Africa, as part of the railway contract with PRASA, Alstom has committed along the same lines. And around the world, Alstom seeks out local suppliers for its activities, sup-ports innovative start-ups and participates in national or international programmes that create centres of expertise between large and small companies, research centres and uni-versities.

ENCOURAGING SOCIAL VOLUNTEERINGFinally, the third priority is to meet the social needs expressed locally. To this end, special emphasis was placed in 2013/14 on employ-ees’ volunteering.In Mexico, “green days” were organised during which the GRUPEDSAC organisation taught 100 employees and their families how to fabricate stoves or plant an organic garden.These techniques were applied with poorer families in the Piedra Grande community in the State of Mexico.Still in Mexico, nearly 80 employees partici-pated in a foot race to collect funds to help the 14,000 children who are born every year with a heart disease.In January 2014 in Italy, more than 600 Alstom

employees in Bologna helped purchase refrig-erated cabinets to store unconsumed food from the canteen and distribute it to the Mensa Della Fraternita (house of charity canteen). In Australia, 700 Group employees decided to concentrate their charity action on a single target, the Children’s Cancer Institute Australia (CCIA), an independent medical research institute focused on childhood cancers (see page 69).

Food and medicine were collected to help victims of flooding in Germany and a volcano eruption in Indonesia. In China, Alstom em-ployees and their families mobilised to pro-vide financial assistance to migrant workers. Still in China, 70 Group employees provide funds, clothing and educational material to the “Sun Villages,” which take care of chil-dren of convicts.

ALSTOM FOUNDATIONSince its creation in 2007, the Alstom Foun-dation has financed around 15 projects per year. 16 projects were selected in FY 2013/14.Eight of those selected for the current campaign concern access to energy for six small villag-es in Bhutan, Cameroon and Laos, a school

IN VADODARA, INDIA, ALSTOM FINANCES THE RECYCLING OF

KITCHEN WASTES TO REDUCE THE

ENERGY COST.

Alstom financed the installation of an organic waste methanisation station for Akshaya Patra, an Indian NGO that prepares approximately 1.3 million meals a day throughout India. Its “Midday Meal Scheme ” directly impacts increased schooling by encouraging students’ presence. In the state of Vadodara, the kitchen produces meals for 114,000 children in 616 schools. This new station enables it to recycle 1.5 tonne of waste per day, representing a saving of €27,000 per year. The Akshaya Patra centralised kitchen in Vadodara, India, feeds 114,000 children daily in more than 600 schools.

It generates 1.5 tonnes of wastes daily, which will be recycled at BioOrja, an organic waste methanisation station financed by the Alstom Foundation.

70

FOCUSA SUSTAINABLE DEVELOPMENT PROGRAMME IN THE REGION OF BAHIA

In the State of Bahia, Brazil, the Pratigi zone, which is especially rich in ecosystems, is recognised as a “protected zone.” To help very poor people benefit from the future growth in tourism, the Odebrecht Foundation implemented, on an experimental basis, a comprehensive programme in three communities. The Alstom Foundation participates in this project, financing teacher training and 480 young people from four

schools in Cairu and Hilo Peçanha, in particular concerning opportunities related to protecting natural resources and developing cultural assets. For example, this programme includes a study on protecting sea turtles with field activities like observing nests and cleaning beaches. It will help develop tourism-related jobs.

in Kenya, 30 medical centres in Ethiopia and a learning centre in Cambodia.Other projects include equipment for a 900 KW dam in Nepal and the production of biogas from the food wastes of an asso-ciation that serves nearly 114,000 meals a day to school children in India (see page 70).Six other projects concern economic devel-opment: in Vietnam the creation of 20 mod-el farms to produce micronutrient and vi-tamin A rich foods to combat blindness; in Thailand, a programme to recycle waste in schools and temples; in India, an economic and social development programme in a vil-lage near Alstom’s site in Durgapur, north of

Calcutta; in Peru, a programme to protect the Huacas del Sol y de la Luna archaeolog-ical site and its mural frescos; in Brazil, a programme to develop eco-tourism that re-spects the indigenous population’s customs; and in France, the renovation of a train dat-ing from 1920 for a tourism line. Finally, two nature conservation projects were selected. In India, the clean-up of two lakes invaded by wastes in the Chennai re-gion and, in Peru, the creation of parks in the Lima suburbs and support for an organisa-tion training single mothers in construction skills.

A teacher with children from the Barra dos Carvalhos community in Bahia, Brazil, during a group reading: one of the actions in the regional development programme supported by the Alstom Foundation.


GETTING INVOLVED WITH ALSTOM

IN A RESPONSIBLE CORPORATE CULTURE

Manik Bishwas is a welder at the Vadodara hydropower industrial site in India.

A SOLID CORPORATE CULTURE built on employees’ full adherence to its values and ethical principles, a human resources policy that pays attention to everyone’s working conditions and professional development, all these elements are essential to the Group’s growth and reputation.

A CODE OF ETHICS FOR EVERYONEThe Alstom Group’s culture is built on three fundamental values (trust, team, action) and ethical standards and codes, formulated in an “integrity programme,” shared by all employees. Applied under the supervision of the Ethics and Compliance (E&C) Department, this programme is based on the Code of Ethics, updated regularly since 2001 and translated into 22 languages. To date, 60,000 Group employees have taken the online Code of Ethics training.This Code’s strict instructions govern Alstom’s relationships with business part-ners, its commitments as a socially respon-sible company, its human resources policy and the principles of protecting its assets. It contains an alert procedure to report any breaches of the corruption prevention rules, the right to fair competition or securities and accounting laws and regulations. In July 2013, the procedure was modernised with a secure website and toll-free numbers open around the clock. Furthermore, two new instructions were added: one related to preventing corruption in relations with sup-pliers and contractors and the other related to the creation of joint venture companies and consortiums. Direct representatives of

the E&C Department, some 300 voluntary “ambassadors” – country presidents and representatives of the Legal, Financial and Human Resources functions – are responsi-ble for disseminating the culture of integrity amongst the personnel .

ENSURING WORKPLACE SAFETYThe number one priority of Alstom’s human resources and EHS (Environment, Health and Safety) policy is to ensure that its employees are safe and that its contractors observe the same policy. The Zero Deviation plan (AZDP) launched at all sites in June 2012 has sub-stantially helped reduce the rate of serious accidents: no fatal accident occurred during the year amongst the Group’s employees. To reduce the rate of serious accidents, which is still too high, especially at contractors, Alstom has reinforced inspections to ensure everyone respects these standards.The AZDP plan remains in effect until the ob-jective of “zero serious accidents” is achieved, which implies a policy of “zero tolerance” for any deviation. This year, a second wave of specific safety audits for this plan was organ-ised to ensure it is applied. This safety policy is supported over time through a series of training actions for new recruits.

FOCUSALSTOM RECOGNISED FOR ITS SUSTAINABLE DEVELOPMENT POLICYFor the third year in a row, Alstom was listed on the Dow Jones Sustainability Index (DJSI), which recognises companies for their social responsibility. Al-stom’s rating improved in several areas and especially concerning its policy of listening to, and taking into account, customers’ expectations.

In Mexico in March 2014 the Group obtained, after an as-sessment based on ISO 26000, the Distintivo ESR 2014. This distinction recognises its Corpo-rate Social Responsibility (CSR) performance and in particular the CSR policy implemented, including the tools and contin-uous improvement initiatives: country-specific CSR manual, employees’ increasingly active participation in solidarity actions as part of voluntary service, etc.


PROVIDING EMPLOYEES WITH THE CONDITIONS TO SUCCEEDAs a high-tech company that manages large-scale, long-term projects, Alstom places the utmost importance on the quality and com-mitment of its teams. Given the company’s excellent reputation and its relationships and partnerships with leading schools and uni-versities around the world, it has no trouble attracting the necessary skills corresponding to its expectations. During FY 2013/14, 8,300 new permanent employees were hired. Europe hired the most, followed by the Asia-Pacific region, North America, South America and the Africa- Middle East region. Recruitment is combined with a number of actions designed to facil-itate newcomers’ integration in their teams. For example, since Alstom Grid launched the Newcomer’s Discovery Kitchen in January 2013, more than 800 people have taken the online integration session.

In order to strengthen the skills level, a new “Management of Talents” organisation was announced in July 2013. Its leaders, who are based at the Levallois head office in France, plus in India and Singapore, work closely with the human resources teams in the Sectors and the country divisions.Alongside the career management pro-grammes aimed at the Group’s technical experts and central divisions, other pro-grammes are devoted specifically to future managers. The “Future Technical Managers” programme was developed with the MIT Sloan School of Management in the United States for high-potential employees likely to occupy leading positions in the R&D and Engineering departments. The Accelerated Management Programme (AMP) entered its third year, focusing on BRIC interns (60% of the programme’s participants). The 2014 pro-gramme continues along this path with spe-cial attention paid to female interns.

…AND IN ALSTOM TRANSPORT’S ENGLISH YARDS The TLS (Train Life Services) teams at Alstom Transport’s Golders Green and Morden yards, in the London suburbs, have worked two years without an occupational lost-time accident. These two maintenance centres received a silver medal and were cited as examples for all Transport yards around the world.

THERMAL SERVICES’ “SAFETY” EXCELLENCE...

At Thermal Services, safety is one of the pillars of the Dedicated to Excellence (d2e) programme. Indicators include: 10 years without an occupational lost-time accident at the Perlis power plant in Malaysia and a customer satisfaction rate of 4.97 out of 5 while in India, at the Jharsuguda aluminium plant, the customer Vedanta Aluminium Ltd. renewed Alstom’s title as an “Elite EHS partner” for 4 million hours of acci-dent-free labour. Or the performance of the TermoBahia power plant in Brazil where in May 2013 Alstom had accumu-lated more than 4,000 days without an occupational lost-time accident, which influenced Petrobras’ decision to select Alstom for a new service contract.

Working at height situations are risky activities covered by the Zero Deviation safety plan. Here, two Grid employees are working on a transformer in Indonesia.

74

PROMOTING EQUALITYAlstom places special emphasis on integrating women in its activities. Without establishing a specific objective, an active policy is carried out in several countries to increase the current 15% rate of women employed in industrial careers. In the United States, Alstom has increased the num-ber of partnerships and its participation in many programmes demonstrates its commitment to di-versity and equal employment opportunities, espe-cially for women. In France, the Group also sup-ports the “EVE” women’s leadership programme. A partnership was signed with “Déployons nos Elles”, a non-profit organisation whose mission is to in-troduce female high-school students to industry professions and put them in contact with engineers and technicians.With this same determination to strengthen the diversity in its workforce, in September 2013 Alstom launched a global action plan adapted locally in each country under the guidance of a “Head of Diversity” appointed by the Human Resources Department.

A Disability policy has also been strengthened to make it easier to integrate employees with disabilities and keep them employed. Regarding improving the balance between professional life and private life, a group of initiatives and measures has been implemented, especially concerning maternity and parental leave. ONGOING SOCIAL DIALOGUEBased on the principle that “nobody is left to cope alone with an employment problem”, Alstom works hard to limit the impact of restructuring plans on its workforce. The reduction of 1,300 positions during the year, especially in Power’s gas and boiler businesses in Germany and Switzerland, was accompanied by an information procedure, technical reports on the need to change the organisation and an ongoing dialogue through meetings and discussions with the personnel’s representatives. A procedure in compliance with the agreement signed between Alstom and the European Metalworkers’ Federation (EMF) was implemented.

Alstom is committed to diversity and equality at work.


GETTING INVOLVED WITH ALSTOM

FOR THE PROTECTION OF THE ENVIRONMENT

Antoine Desclos is the project manager for the We Share the Power programme to raise employees’ awareness of the energy savings initiated at Renewable Power and extended to the other Sectors.

CERTIFICATION OF ALL SITES: OBJECTIVE REACHEDAt the end of the past year, 97% of the Group's industrial sites with more than 200 employ-ees were certified ISO 14001 (environmental management). One year later, 100% of the sites had obtained this certification. The cer-tification criteria for ISO 14001 and OHSAS 18001 (Occupational Health and Safety) are integrated in the Group’s EHS plan and help improve it.

LESS ENERGY CONSUMEDThe objective to reduce sites’ energy intensi-ty (ratio of energy consumption to sales) by 20% between 2008 by 2015 has almost been reached (-18% at the end of 2013). The numer-ous action plans implemented in the Sectors contributed the most (80%) to this result. The remaining 20% was due to a milder winter than the previous year in Europe, which meant less gas and steam were needed to heat the build-ings. Consequently, the Group’s total energy consumption dropped by 5% year over year.

REDUCING THE CARBON FOOTPRINTIn 2008, the Group also set an objective to reduce by 20% its energy-consumption relat-ed greenhouse gas emissions by 2015. These emissions have decreased by 11% between

2008 and 2013. The programme to reduce energy consumption contributes to this re-sult, as well as the conversion of some equip-ment to less CO2 emitting solutions and the “green” electricity supply contracts. Sulphur hexafluoride (SF6) is an essential gas for the Grid Sector and its customers for its insulating properties in high voltage switchgears and in gas-insulated substa-tions. SF6 is a very powerful greenhouse gas (24,000 times the effect of CO2, which means that a 1 kg leak of SF6 in the atmosphere equals 24 tonnes of CO2). Alstom Grid tracks these emissions very closely and has set the objective of reducing them by 8% between 2012 and 2015. To achieve this result, Alstom has launched worldwide training on SF6. The objective is to make sure that all employees are aware of the risks that this gas represents for the planet and the need to use the best practices to reduce its emissions.A major effort is also made to use eco-design to reduce the volumes of SF6 used in switch-gear. Decreasing the volumes used reduces proportionally the risks of leaks and their consequences.Alstom Grid has an active research pro-gramme to identify alternative technologies with similar properties to SF6 but with a lower environmental impact.

With more than 70 major production sites around the world, Alstom strives to limit THE IMPACT OF ITS ACTIVITIES ON THE ENVIRONMENT in terms of greenhouse gas emissions, energy and water consumption, and waste recycling.

In the United Kingdom, 40 GWh of green electricity supplies Alstom sites: 70% wind power, 14% biomass power, 7% hydropower and 5% from other sources. In Germany, the Cassel site uses renewable energy sources and in 2008 signed a 100% green hydropower contract. In France the Group signed a master contract for its sites, which includes 30% renewable energies for 2014 and 2015. For each call for tender on energy supply, “green” energy bids are favoured provided the economic impact can be supported.

ALSTOM FAVOURS GREEN ENERGIES


WATER CONSUMPTION DOWNWater is a precious resource that is getting rarer. Aware of this stake, Alstom has set am-bitious reduction objectives by concentrating its efforts on the facilities located in the most threatened zones (water-stressed areas).Since the objective of a 20% reduction between 2010 and 2015 in these facilities was achieved in 2012, Alstom has decided to extend this effort to all of the Group’s permanent facili-ties. Consequently, the Group will continue to reduce its annual water use by 2% on average across all permanent facilities. Note that the current action plans reduced consumption by more than 5% between 2012 and 2013.

LIMITING EMISSIONS OF POLLUTANTS AND RECOVERING WASTEAlstom’s activities generate non-methane- forming volatile organic compound (VOC) emissions, primarily in the manufacture of electrical equipment and in the use of sol-vent-based paints. The objective is to reduce these emissions by 2% annually. In 2013, Alstom improved the precision of measure-ments thanks to an in-depth metodology of analysing and measuring VOC emissions developed by the Renewable Power Sector in 2012.The resulting continuous improvement work, along with the VOC capture systems recently

3D PRINTED BURNER PARTS

The three dimensional printing technology is spreading in industry. At Alstom, the Thermal Power Sector paved the way by introducing the selective laser sintering (SLS) technology to produce functional burner prototypes. This approach reduces lead-times and costs substantially, while offering.

the possibility to produce increasingly complex parts. Three different burner concepts were produced with this technology. In all 50 kg were produced in 100 hours. The burner’s fully assembled lobe-shaped nozzle heads successfully passed the fuel mixing and emission tests. The inspection after the series

of tests at temperatures up to 1,850 K (more than 1,576°C) didn’t reveal any defects on the “printed” parts. For Alstom, there are multiple advantages to this method: the cost of parts no longer depends on the design complexity but rather on the volume (weight) to produce; the speed of prototyping accelerates

the parts’ commercialisation; it is easier to upgrade a part’s design and also to increase its complexity in order to improve the assembly’s performance and efficiency, etc. This SLS technology should become one of the manufacturing pillars for gas turbines’ hot gas parts (HGP).

The buildings of Alstom Grid’s centre of excellence for smart grids, in Montpellier, France, meet the specifications for low energy buildings and reduce the carbon footprint by 25% compared to the previous facility. Equipped with solar panels, the site is also equipped with charging stations to encourage the use of electric cars.

78

FOCUSVIRTUAL MEETINGS FOR LESS CO2

In 2013, 21 new telepresence or videoconference rooms were installed. Interconnected since February 2013, these two technologies are now available in 22 countries and 60 sites. The Group also encourages the use of in-house video-messaging tools, which facilitate “face-to-face” meetings with two or three participants. These solutions can be used to organise virtual meetings that are just as effective as meetings where the participants are physically present and they accelerate decision making.This initiative is supported by a strict travel policy, which successfully reduced business travel related CO2 emissions by 12% between 2012 and 2013.

installed in the Thermal Power Sector, have made it possible to reduce emissions significantly. Conse-quently, between 2011 and 2013, they decreased by nearly 35%.

The continuous improvement processes also made it possible to reduce the Group’s total sulphur dioxide (SO2) emissions from 45 to 15 tonnes between 2011 and 2013 and the nitrogen oxides (NOx) emissions from 152 to 117 tonnes over the same period.

The initiative undertaken by Alstom since many years to increase the share of recycled waste contin-ues. The rate reached for this year was 78%, in line with the objective set of 80% for 2015.

EMPLOYEES INCREASINGLY INVOLVEDIn a world preoccupied by environmental concerns, employees generally support the Sectors’ increased actions to attenuate the impact of their activities. In 2011, the Renewable Power Sector launched the We Share the Power project to support the Group's overall objective of reducing its energy consump-tion. In 2013 this project was extended to the other Renewable Power sites with the Energy Saving Days – initially a successful Grid initiative – organised in France, Spain, India, China, Canada and Brazil. This is a competition between volunteer teams to find the best ways to reduce energy costs. In 2013, Renewable Power organised two conferences on this theme at the Group’s head office in Levallois-Perret, France.

Video-conference meetings increasingly replace travel.


FINANCIAL RESULTS

FINANCIAL YEAR ENDED 31 MARCH (IN € MILLIONS) 2014 2013

SALES 20,269 20,269

Cost of sales (16,213) (16,324)

Research and development expenses (733) (737)

Selling expenses (966) (952)

Administrative expenses (933) (793)

INCOME FROM OPERATIONS 1,424 1,463

Other income 27 6

Other expenses (443) (280)

EARNINGS BEFORE INTEREST AND TAXES 1,008 1,189

Financial income 28 36

Financial expenses (336) (302)

PRE-TAX INCOME 700 923

Income tax charge (163) (186)

Share in the net income of equity investments 29 47

NET PROFIT 566 784

Attributable to:

- equity holders of the parent company 556 768

- non controlling interests 10 16

Net earnings per share (in €)

- Basic earnings per share 1.80 2.55

- Diluted earnings per share 1.78 2.52

CONSOLIDATED INCOME STATEMENT

* Amounts restated in accordance with changes in the accounting method related to application of IAS 19 amended.

82

FINANCIAL YEAR ENDED 31 MARCH (IN € MILLIONS) 2014 2013 *

ASSETS

Goodwill 5,281 5,536

Intangible assets 2,054 1,982

Property, plant and equipment 3,032 3,024

Associates and non-consolidated investments 620 698

Other non-current assets 533 521

Deferred taxes 1,647 1,720

TOTAL NON-CURRENT ASSETS 13,167 13,481

Inventories 2,977 3,144

Construction contracts in progress, assets 3,967 4,158

Trade receivables 4,483 5,285

Other current operating assets 3,203 3,328

Marketable securities and other current financial assets 18 36

Cash and cash equivalents 2,320 2,195

Assets held for sale 293 -

TOTAL CURRENT ASSETS 17,261 18,146

TOTAL ASSETS 30,428 31,627

EQUITY AND LIABILITIES

Equity attributable to the equity holders of the parent 5,044 4,994

Non controlling interests 65 93

TOTAL EQUITY 5,109 5,087

Non-current provisions 710 680

Accrued pension and other employee benefits 1,526 1,674

Non-current borrowings 4,009 4,197

Non-current obligations under finance leases 398 433

Deferred taxes 176 284

TOTAL NON-CURRENT LIABILITIES 6,819 7,268

Current provisions 1,191 1,309

Current borrowings 1,267 283

Current obligations under finance leases 47 42

Construction contracts in progress, liabilities 8,458 9,909

Trade payables 3,866 4,041

Other current operating liabilities 3,671 3,688

Liabilities held for sale - -

TOTAL CURRENT LIABILITIES 18,500 19,272

TOTAL EQUITY AND LIABILITIES 30,428 31,627

CONSOLIDATED BALANCE SHEET

* Amounts restated in accordance with the changes in the accounting method related to application of IAS 19 amended.



NET PROFIT 566 784

Depreciation, amortisation and expense arising from share-based payments 569 543

Post-employment and other long-term defined employee benefits (17) (24)

Net (gains)/losses on disposals of assets (23) 34

Share in earnings of equity affiliates (net of dividends received) 7 (18)

Deferred taxes charged to income statement (163) (80)

NET CASH PROVIDED BY OPERATING ACTIVITIES - BEFORE CHANGES IN WORKING CAPITAL REQUIREMENTS 939 1,239

CHANGES IN WORKING CAPITAL REQUIREMENTS RESULTING FROM OPERATING ACTIVITIES (300) (150)

NET CHANGE IN CASH RESULTING FROM OPERATING ACTIVITIES 639 1,089

Net cash provided by/(used in) operating activities 34 57

Proceeds from disposals of tangible and intangible assets (844) (738)

Capital expenditure (including capitalised R&D costs) (9) 37

Increase/(decrease) in other non-current assets (105) (472)

Acquisitions of businesses, net of cash acquired 17 (2)

DISPOSALS OF BUSINESSES, NET OF NET CASH SOLD (907) (1,118)

Capital increases/(decreases) including non controlling interest 36 351

Dividends paid including payments to non controlling interests (267) (243)

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

Issuance of bonds & notes 500 350

Reimbursement of bonds & notes (26) -

Changes in current and non-current borrowings 346 (174)

Changes in obligations under finance leases (38) (45)

Changes in marketable securities and other current financial assets and liabilities 13 (11)

NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES 564 180

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 296 151

Cash and cash equivalents at the beginning of the period 2,195 2,091

Net effect of exchange rate variations (148) (49)

Other changes (23) 2

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2,320 2,195

Income tax paid (266) (240)

Net of interests paid & received (202) (186)

CONSOLIDATED STATEMENT OF CASH FLOWS


84

ANALYSIS OF CHANGE IN NET CASH POSITION


NET CASH/(DEBT) VARIATION ANALYSIS (**)

Changes in cash and cash equivalents 296 151

Changes in marketable securities and other current financial assets & liabilities (13) 11

Changes in bonds and notes (474) (350)

Changes in current and non-current borrowings (346) 174

Changes in obligations under finance leases 38 45

Net debt of acquired entities at acquisition date and other variations (178) 119

Decrease/(increase) in net debt (677) 150

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

NET CASH/(DEBT) AT THE END OF THE PERIOD (3,019) (2,342)

** 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.



CONTACTSALSTOM3 avenue André-Malraux92309 Levallois-Perret CedexImmeuble SextantFranceTel.: +33 (0)1 41 49 20 00www.alstom.com

ALSTOM THERMAL POWERBrown Boveri Strasse 7,CH-5401 BadenSuisseTel.: +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 Le Galilée51 esplanade du Général de GaulleFranceTel.: +33 (0)1 49 01 61 00www.alstom.com/grid


http://www.alstom.com/power

http://www.alstom.com/power

http://www.alstom.com/transport

http://www.alstom.com/grid

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

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