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Alstom sells North American conventional signalling business to Knorr-Bremse

The French train builder is looking to improve its financial results, which showed a need for change in the first half of the 2023-2024 financial year.

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In an effort to reduce its debt burden and negative cash flow position, Alstom entered into a binding agreement with Knorr-Bremse AG on 19 April to sell its conventional signalling business in North America.

Specifically, this Alstom Signaling Inc. business will be taken over by the parent company of New York Air Brake (NYAB) for an approximate EUR 630 million purchase price. The French manufacturer estimates that the deal will generate revenues of 620 million euros after-tax.

While regulators must approve the sale, it is expected to be closed next summer.

Alstom said the transaction is part of a “comprehensive company action plan” announced on 15 November 2023, when the company reported its 2023-2024 half-year results.

Although the manufacturer achieved global sales of €8.4bn, an order backlog of €90.1m and an adjusted net profit of €174m in the first half of the 2023-2024 fiscal year, it had negative free cash flow of €1.119bn.

“The negative free cash flow of Alstom during this first half is a clear call for change. While demand remains sustained, despite some volatility, our commercial performance has been soft. The Bombardier Transportation integration continues to progress. However, the delivery of Aventra program has been more complex than anticipated. Production and sales growth is accelerating. We are undertaking a comprehensive action plan to maintain our investment grade rating and secure our mid-term objectives. Confident in the strength of our backlog and on the solid business foundations of Alstom, I’m fully committed to take up this challenge.” said Henri Poupart-Lafarge, Chairman of the Board of Directors and Chief Executive Officer of Alstom.

The sale of Alstom Signalling, Inc. to Knorr-Bremse AG only concerns conventional signalling

The French manufacturer is not leaving the North American signalling market entirely. Following the sale of its US subsidiary, it will continue to operate in the modern signalling segments, particularly the CBTC and ETCS segments.

“We are pleased to sign this agreement, which marks an important step in the implementation of our action plan. It evidences the work of our North American signalling employees, who have built and advanced this very successful business over the past few years”, Poupart-Lafarge celebrated, referring to the agreement.

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