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ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT 2009/10


CONTENTS

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

PROFILE

02 /// 03

SHAPING THE FUTURE. A worldwide leader in power generation and rail infrastructures, Alstom specialises in innovative and environmentally friendly technologies, providing solutions for tomorrow’s world today. The Group supplies integrated power plants, equipment and services for virtually every source of energy – coal, gas, hydro, nuclear, wind and geothermal. And Alstom has expertise in every area of the rail industry, offering a complete range of high performance products and services, spanning rolling stock and infrastructure, information and signalling systems, maintenance and turnkey solutions.

Close to customers across the world

04-05

A word from Patrick Kron: “Adapting to the present for the future”

06-07

Key gures

08-09

Governance Board of directors Alstom, an ethical compagny Executive committee A constant dialogue with shareholders

10-11 12-13 14-15 16-17

2009/2010 Overview

18-20

Tomorrow’s challenges Alstom Power:

21-27

“New horizons for energy”

28-45

“Sustainable mobility solutions for rail travel”

46-57

“Today’s commitment for tomorrow’s world”

58-75

Financial results

76-78

Alstom Transport:

Sustainable development:

19.7

1

€ .8

BILLION Operating prot 2009/10

BILLION sales

76,500 EMPLOYEES in over 70 countries


ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

TURKEY Trakya: Q Istanbul: VV ITALY Scandale (Calabria): Q Rome: V SWITZERLAND Nant de Drance: Q Lausanne: V SWEDEN Karlshamn: Q Stockholm: V

CLOSE TO CUSTOMERS ACROSS THE WORLD Alstom has sales and manufacturing operations on all ve continents. The Group has an established presence in over 70 countries and is represented by its two Sectors (or by one or other of these in certain cases), their manufacturing sites and the many projects the company undertakes. And Alstom’s international presence will get even stronger as it integrates the new Sector, formed around the transmission business acquired from Areva.

Power QSteam QGas QHydro QNuclear QWind QGeothermal QCO2 capture (pilot site)

48,100

EMPLOYEES

NORWAY Mongstad: Q FINLAND-RUSSIA Pendolino Helsinki-Saint-Petersbourg: V RUSSIA Moscow TPP 26: Q GERMANY Emsland: Q Neurath: Q Schwarze Pumpe (Land de Brandebourg): Q Länder: V

PORTUGAL Alqueva II: Q SPAIN Soto de Ribera 5: Q V FRANCE Lacq: Q Vallée du Moulin: Q Flamanville 3: Q Paris: V Cities: Rheims, Lyons, Montpellier, Brest, Dijon, Rouen and regions…

NETHERLANDS Claus (Maasbracht): Q Rotterdam: V BELGIUM V SLOVENIA Šoštanj: Q HUNGARY Dunamenti: Q Budapest: V BULGARIA Maritza: Q POLAND BeÉchatów: Q

V VVV V IRELAND Aghada: Q Dublin: V UNITED KINGDOM Grain: Q Maesgwyn: Q Pembroke: Q London: VV

UNITED STATES Comanche 3: Q Charleston: Q Mountaineer: Q New York City: V

9,200

Transport VMetros VTramways VLocomotives VSuburbain trains VRegional and intercity trains VHigh speed and very high speed trains

EUROPE

NORTH AMERICA

OVERVIEW OF ALSTOM’S ACHIEVEMENTS AND MAJOR PROJECTS WORLDWIDE (2007/10)

04 /// 05

ALGERIA Alger, Oran, Constantine: V MOROCCO Rabat: VV Ain Beni Mathar: Q TUNISIA Tunis: V

EMPLOYEES

4,400

SOUTH AMERICA

AFRICA & MIDDLE EAST

1,700

EMPLOYEES

CHILE Santiago: V DOMINICAN REPUBLIC Saint-Domingue: V MEXICO Los Humeros: Q

SOUTH AFRICA Medupi: Q SAUDI ARABIA Shoaiba 3: Q Rabigh: Q EMIRATES Fujairah 2: Q Dubai: Q V EGYPT Cairo: V

EMPLOYEES

BRAZIL Santo Antonio: Q Jirau: Q Rio de Janeiro: Q São Paulo: V Brasília: V

ASIA-PACIFIC

13,100 EMPLOYEES

JAPAN Higashi Izu II: Q SOUTH KOREA Anyang: Q VIETNAM Son La, Da River: Q INDONESIA Muara Tawar: Q INDIA Subansiri: Q Utran: Q New Delhi: V

SINGAPORE V CHINA Taishan: Q Three Gorges Dam: Q Provinces: V Nanjing: V AUSTRALIA Colongra: Q Melbourne: V V


A WORD FROM PATRICK KRON

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

ADAPTING TO THE PRESENT

FORTHEFUTURE F From the beginning of the economic and nancial crisis that has shaken the world economy, I have pointed out that our company – which focuses exclusively on infrastructure projects that are essential to economic, social and environmental development – could count on structural market growth in the medium and long term, no matter how severe the ups and downs of the economy might be. But I have also stressed that Alstom does not operate in isolation and that our business would surely be affected by this crisis.

PATRICK KRON Chairman and Chief Executive Ofcer

Targets met Financial year 2009/10 has conrmed these predictions. We ended the year with excellent operating results, but with a sharp drop in orders that will affect the next few years – though we can look to the future with condence. At a time when most manufacturers’ revenues have plummeted, Alstom posted record sales in 2009/10, thanks to a sizeable backlog of high quality orders accumulated in past years. We met our targets: operating prot exceeded €1.7 billion with a margin of 9.1%. This strong performance translated into higher operating prot and another dividend increase will be proposed at the Annual General Meeting.

06 /// 07

EXCELLENT OPERATING RESULTS, BUT WITH A SHARP DROP IN ORDERS THAT WILL AFFECT THE NEXT FEW YEARS – THOUGH WE CAN LOOK TO THE FUTURE WITH CONFIDENCE.

At the same time, however, new orders fell sharply and cash ow declined as we received fewer advance payments on new orders. The sharp contraction in the market for power generation equipment hit our Power business particularly hard: as operators adopted a wait-and-see attitude, large orders were down by half. The decline in orders was less pronounced for our Transport business, despite its exceptionally strong showing in 2008/09. The need to build new infrastructure in emerging countries and upgrade existing facilities in developed countries – along with the need to respond to new environmental requirements – means that a rebound in these markets is inevitable. Positive signs are already appearing: our commercial teams are involved in talks on many new projects worldwide. But the timing, pace and scope of the expected recovery in orders remain very uncertain. Reduced costs In response to this uncertainty, Alstom has stepped up the cost-cutting policy implemented in 2008/09. We cut administrative and selling expenses from 7.4% to 6.8% of sales and headcount was reduced by 5,000 during the year by limiting new hires, reducing the number of employees under xed-term contracts and making adjustments at some of our manufacturing facilities. We will make additional adjustments if trends in demand require it. Though we have prioritised our investments, they have remained substantial, and we have taken the same approach to research and development spending which is still at historic highs. Our goal is to position Alstom to face a more challenging environment and an uncertain short-term outlook without compromising our ability to capitalise swiftly on the rst signs of recovery and continue our strategy of protable growth. Though Alstom faces stiff competition, we have many strengths and are determined to build on them. We have a very broad sales presence and well-established, long-term relationships

with all our customers. We have extended our manufacturing base, expanding capacity in Brazil, China, the United States and other sites close to our markets, and have signed key agreements with local partners in China, India and Russia. Our Research and Development work will strengthen our leadership position, with CO2 capture, energy efciency and nuclear power in the promising clean power technologies, the nal development of the AGV in the market for very high speed trains, and tram-trains in the urban transport market. Maintaining our efforts We have also made a key strategic move – in acquiring Areva T&D’s Transmission business. Creating this new Sector expands our presence in the technology-intensive power transmission business and dovetails very well with our other operations. Our range of products and services will be enhanced and we will be able to make our international network work for us even better. Finally, we have continued our efforts in human resources, especially in cementing our gains in workplace safety and in social and environmental responsibility. And we have made further strides towards making Alstom the standard-bearer for ethical conduct. We owe tribute to our employees. Thanks to their hard work and commitment, our sound nancial structure and the condence of our shareholders, Alstom is poised to respond to every growth opportunity our markets can offer, tomorrow and in the years to come. Patrick Kron


KEY FIGURES

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

KEY FIGURES SALES

+5%

OPERATING PROFIT

(€ billion) Steady delivery on booked orders drove renewed growth in sales, which reached record levels.

18.7

+16%

(€ billion) Like sales, operating prot reached record levels, thanks to high quality orders and successful project execution.

91%

76,500

EMPLOYEES

The total workforce was reduced by about 5,000 through attrition, non-renewal of xed-term contracts and reorganisations at selected manufacturing facilities.

.

19.7 1.536

08 /// 09

1.779

OPERATING MARGIN Thanks to the Group’s excellent performance, the operating margin exceeded our 9% target for the nancial year.

2008/09

13.9 Power 2009/10 5.8 Transport 2009/10

2009/10

ORDER INTAKE

-39%

2008/09

ORDER BACKLOG

(€ billion) New orders were affected by the economic downturn, with demand for power generation contracting sharply. By contrast, the transport market – often a priority item in government budgets – showed more resilience.

1.468 Power 2009/10 414 Transport 2009/10

2009/10

-7%

(€ billion) Though new orders were down slightly, our sizable backlog represents 26 months of sales.

63% Europe 19% Asia-Pacic, Africa, Middle East 18% Americas

NET PROFIT

FREE CASH FLOW

SHAREHOLDERS’ EQUITY

NET CASH

(€ million) Net prot was higher, reecting Alstom’s improved operating performance.

(€ million) Free cash ow remained positive for the nancial year, with strong operating performance more than compensating for an expected decline in working capital owing to a slowdown in orders.

(€ million) Shareholders’ equity showed healthy growth thanks to the results recorded for the period.

(€ million) The cash position reects the Group’s sound nancial structure.

45.7 42.6

4,101

1,479

24.6

2,884 14.9 1,109

2,051

2,222

1,217 185

2008/09

2009/10

9.4 Power 2009/10 5.5 Transport 2009/10

2008/09

2009/10

23.3 Power 2009/10 19.2 Transport 2009/10

2008/09

2009/10

2008/09

2009/10

31/03/09

31/03/10

31/03/09

31/03/10


GOVERNANCE

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

10 /// 11

BOARD OF DIRECTORS A

Alstom has been listed on the Paris stock exchange since 1998 and applies strict corporate governance rules, particularly with respect to the independence of Board Directors and the missions of specialised committees. For more information on the Group’s corporate governance, please visit the Alstom website at www.alstom.com. 1

1. OLIVIER BOUYGUES Deputy Chief Executive Ofcer, Bouygues

2. ALAN THOMSON * Chairman, Bodycote plc

2

3

3. JEAN-PAUL BÉCHAT * Managing Director, ARSCO

4. JAMES WILLIAM LENG * Chairman, AEA Investors Europe

4

5

5. GEORGES CHODRON DE COURCEL Deputy Chief Executive Ofcer, BNP Paribas

6. PATRICK KRON Chairman and Chief Executive Ofcer, Alstom

6

7. PHILIPPE MARIEN Representative, Bouygues SA

8. JEAN-MARTIN FOLZ * Company director

7

8

9

10

9. GÉRARD HAUSER * Director, Nexans

10. CANDACE BEINECKE Chair, Hughes Hubbard & Reed LLP

11

12

11. KLAUS MANGOLD * Supervisory Board Chairman, Rothschild GmbH (Frankfurt)

12. PASCAL COLOMBANI * Senior Advisor, A.T. Kearney

* Independent directors

A robust and broad internal control system encompasses all Group Sectors and functions. By enabling quicker, more reliable and more competitive operations, a sound internal control system provide reasonable assurance that laws and regulations are complied with at all times, information and data including nancial information are reliable, and that operations are completed in an optimal manner. At the Annual General Meeting on 22 June 2010, the Board of Directors plans to propose Board appointments for Lalita Gupte, former Chief Operating Ofcer and Board member of ICICI Bank, and Katrina Landis, Group Vice President of BP Alternative Energy. Shareholders will also be asked to renew appointments for Georges Chodron de Courcel, Olivier Bouygues and Bouygues SA.


GOVERNANCE

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

12 /// 13

ALSTOM, AN ETHICAL COMPANY, WITH RULES AND CONTROL PROCEDURES AT THE BEST INTERNATIONAL STANDARDS

At the beginning of the 2000’s, Alstom put into place ethical rules which have been continually reinforced since then. These rules provide for the strict respect of laws and regulations in force in all countries where the Group operates, with prevention of corruption measures as a priority concern, and compliance with competition, securities or accounting laws and regulations. These rules also address the way Alstom deals with the relationship with governments and public authorities, customers, suppliers and sales consultants; export and trade controls; money laundering; conicts of interest; gifts and hospitality; political or charitable contributions; sponsorship; protection of the environment; health and safety; security of employees; social relations; equal opportunity and diversity; career management of employees; data privacy; condential information; intellectual property; use of communication resources; insider dealing; communication with the media and investors.

A strict control of contracts with external consultants The measures regarding the prevention of corruption hold an important place in this plan. In addition to the constant familiarisation of the rules which is managed at an in-

depth level with all concerned employees, mainly those in the sales force, the measures are founded on extremely rigorous processes concerning contracts with commercial consultants. Like all infrastructure companies operating in highly complex markets worldwide, Alstom may need to work with specialised commercial consultants who bring their particular knowledge to their market, with its own laws, regulations and decision-making process. The Group’s commercial managers can use commercial partners that are approved beforehand by the Ethics & Compliance department only after a detailed assessment of the need to contract with them, a thorough due diligence audit and a verication of the compliance between the expected services and the level of the fees. Moreover, the management of these contracts is centralised through “Payment and Control” dedicated companies. Ethics rules rated at the best international standard To assess the relevance of these rules, Alstom called on the “Ethic Intelligence International” organisation to audit and validate its procedures governing relations with sales and marketing consultants and agents. The audit was conducted between September 2008 and March 2009 by the Swiss audit company, SGS, and a concluding report was issued by a pool of international recognised experts. The audit concluded that the rules and procedures implemented by the Group corresponded to international best practices both in denition and execution. As a consequence of this positive review, the Group was awarded a certicate on 12 March 2009, granted for two years.

Notre

code

d'éthique

*nous façonnons l'avenir

A

A constantly strengthened culture of integrity Alstom has invested a great deal of effort in the deployment and integration of these ethics rules across the organisation. A Code of Ethics was produced in April 2007 and distributed to all employees throughout the world. Updated and containing more detailed information, it was re-issued in 14 languages at the beginning of 2010. The Code of Ethics booklet is included in the information pack given to all new employees. Also available on Alstom’s intranet and public internet site, it is progressively being supplemented by very detailed guidelines for each topic, widely distributed to management. Furthermore, all 35,000 Alstom Managers are required to complete a compulsory online training course named “e-Ethics” available in eight languages. Finally, the Group has implemented an Alert Procedure which allows any employee to report violations of prevention of corruption, competition and securities regulations, or accounting laws and regulations. The Ethics & Compliance Department, in charge of the Alstom Integrity Programme, set up a network of 200 Ethics & Compliance Ambassadors in all countries where Alstom operates. Recruited on a voluntary basis, these ambassadors (often the Country Presidents in charge of governance in their country and managers in the Legal, Financial or HR functions) are each charged with the deployment of ethics rules, using all appropriate means, including specic meetings, and ensuring the integration of these ethics rules in the day-to-day life of the Group.

The Code of Ethics has been translated into 14 languages and a copy given to each employee.


GOVERNANCE

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

14 /// 15

EXECUTIVE COMMITTEE 1. PHILIPPE JOUBERT Executive Vice-President President, Power Sector

E

2. HENRI POUPART-LAFARGE * Chief Financial Ofcer

Executive Committee (at 31 March 2010) • Dening strategy and general policies; setting corresponding operational objectives, including budgets and nancial targets; allocating nancial resources. • Upholding relations with the Board of Directors and the external environment (shareholders, nancial community and the public). • Undertaking any action needed to implement the strategy that cannot be efciently 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 benet-related guidelines and policies.

3. PATRICK DUBERT Senior Vice-President, Human Resources 4. PATRICK KRON Chairman & CEO

2

5. PHILIPPE MELLIER Executive Vice-President President, Transport Sector * Henri Poupart-Lafarge has been named Executive Vice President and President of the new Sector, formed around the power transmission business purchased from Areva, effective from the closing of the acquisition. He will continue to serve on the Group’s Executive Committee and will report to Patrick Kron, Alstom’s Chairman and Chief Executive Ofcer.

NICOLAS TISSOT was appointed as Alstom’s new Chief Financial Ofcer on 17 May 2010 to replace Henri Poupart-Lafarge.

1

3

4

5


GOVERNANCE

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

A CONSTANT DIALOGUE WITH SHAREHOLDERS The role of the Investor Relations team is to provide the entire nancial community – individual shareholders, institutional investors and nancial analysts – with complete, regularly updated information on the Group’s strategy and its implementation.

B

Besides the Annual General Meeting, Alstom is developing opportunities to meet and communicate with its individual shareholders. Active communication policy for individual shareholders During the scal year, the Group took part in information meetings at Annecy and Avignon in France – organised in association with the FFCI (the French Investment Club Federation) and the CLIFF (the French Association for Investor Relations). In 2010, the Group will meet with its shareholders in Strasbourg and Tours. Alstom also participates in the annual Actionaria exhibition in Paris, which welcomes over 30,000 visitors every year. During the 2009 exhibition, shareholders had the chance to meet the Chairman and Chief Executive Ofcer of the Group, as well as the Investor Relations team and members of the communications department. The Group also organises site visits in France for individual shareholders to give them a better insight into

the way the business works. For example, some of them were able to discover the different stages of regional train and metro assembly lines at factories in Reichshoffen and Valenciennes, and others saw a TGV coach, a locomotive and a steam turbine being put together at the Belfort production plant. They also discovered assembly lines for train bogies at the factory in Le Creusot. In addition to annual reports and quarterly publications, Alstom offers its shareholders a range of information tools, including the shareholder letter which is published twice a year in conjunction with the main nancial dates of the Group. All documents can be obtained upon request. The Investors section on Alstom’s website also provides shareholders with all the nancial documentation, as well as debt information and a calendar of nancial events. Relations with institutional investors and nancial analysts Roadshows are organised several times a year in major American and European nancial centres (France, USA, UK, Switzerland, Germany, Italy, Belgium…). Information meetings (presentations on Sectors, strategy etc.), as well as individual meetings with investors and analysts take place throughout the year. The Group also participates in thematic conferences organised by brokerage rms in France, the UK and the USA. During the past scal year, these conferences covered themes such as the rail transport market, power generation technologies and sustainable development. Stock market news In 2009, the Alstom share price grew by 17% and ranked

16 /// 17

SHARE PRICE EVOLUTION (IN €)

80

APRIL 2009 / APRIL 2010

70

Alstom CAC 40 ALSTOM SHARE AT 31 MARCH 2010 Place of listing: Euronext Paris Isin code: FR0010220475 Ticker: ALO Nominal value: €7 Number of shares: 293,841,996 Market capitalisation: €13,566,684,955 Main indexes: CAC 40 SBF 120 Euronext 100 DJ Euro Stoxx 50

60 50 40 30 20 10 0 04 09

05 09

27th in its reference index, the CAC40, which saw an increase of 22%. In December 2009, the Alstom share was introduced into the ECPI Ethical EMU index, which accounts for the 150 best companies in terms of stock market capitalisation in the European Economic and Monetary Union, based on the environmental, social and governance criteria specied in the ECPI screening methodology. On 31 March 2010, the share price reached €46.17 and the stock market capitalisation of the Group was €13.6 billion. Dividend For the scal year 2008/09, Alstom paid a dividend of €1.12 per share on 30 June 2009. The dividend proposed at the Annual General Meeting on the 22 June 2010 amounts to €1.24 per share, an increase of 11% compared to last year. This represents a distribution rate of 30% of the Group’s net result.

06 09

07 09

08 09

09 09

10 09

11 09

12 09

01 10

02 10

03 10

KEEPING INVESTORS INFORMED www.alstom.com or www.alstom.fr. The Investors’ section of the Alstom website has been specially designed to provide shareholders with easy access to all the Group’s nancial communications: share price quotes, the possibility to download the past ve years’ historical data, nancial results, presentations, annual reports, shareholders letters, dates of important meetings, frequently asked questions, as well as a service that dispatches press releases by e-mail. Printed copies of the annual report for 2008/09 can be obtained in French and English by sending a request to the Investor Relations department.

SHARE OWNERSHIP at 31 March 2010

CAPITAL STRUCTURE BY REGION at 31 March 2010

CONTACTS Emmanuelle Châtelain – Vice President Investor Relations Emmanuelle Douëzy – Individual Shareholders Manager Alstom 3, avenue André Malraux 92300 Levallois-Perret, France Tel.: 33 1 41 49 20 00 — Fax: 33 1 41 49 79 25 E-mail: investor.relations@chq.alstom.com Toll free number from France: 0800 50 90 51 From abroad, you can contact the team by dialling +33 1 45 30 85 75 (calls will be charged at your local operator’s standard international rate).

04 10

60% Institutional investors 31% Bouygues 7.5% Individual shareholders 1.5% Employees

57% France 16% North America 13% Rest of Europe 10% UK & Ireland 4% Asia & Middle East


OVERVIEW

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

18 /// 19

OVERVIEW 2009/10 UNITED KINGDOM APRIL 2009 Alstom to build UK’s largest power plant Under the terms of the contract signed at the end of April 2009, Alstom will deliver a turnkey combined-cycle gas-red power plant to RWE in Pembroke, Wales. With 5 GT26 turbines (260 MW each) and its other related equipment, the plant will supply power to 3 million households.

The nancial year marked the birth of a host of tramway projects. Photo: Citadis, City of Rheims, France.

SWITZERLAND MAY 2009 First turbine pump power plant in Switzerland Alstom Hydro was selected to equip the new Nant de Drance hydroelectric plant with its variable speed turbine pump technology. This is the only method available to store electrical energy on a large scale. A second similar contract will be signed in October for Kraftwerke Linth-Limmern AG’s hydroelectric plant. BRAZIL SEPTEMBER 2009 First modern tramway in the Americas for Brasilia A symbol of avant-garde architecture and urban innovation, Brasilia will be the rst city in South America to have a modern tram system. Alstom will deliver 16 Citadis tramsets and build 8km of track, 1.2kms of which will be equipped with APS (alimentation par le sol), its rail-embedded power supply technology. The absence of overhead wires allows the trams to blend into the urban environment.

FRANCE OCTOBER 2009 100 Coradia for French regions The French national railway (SNCF) and the 8 French regions that are nancing the project signed a contract at the end of October 2009. The agreement includes an option for 35 Coradia Polyvalent trains, but it also opens up a market for Alstom Transport that could grow to a total of 1,000 trains. UNITED STATES OCTOBER 2009 100,000 tons of CO2 captured each year at Mountaineer On 30 October 2009, Alstom and American Electric Power opened a pilot (20 MW) CO2 capture and storage facility at the Mountaineer coal-red power plant in New Haven, West Virginia – the rst facility to set up the entire process for the refrigerated ammonia post-combustion capture, compression and geological storage of CO2 in saline aquifers on such a large scale (100,000 metric tons of CO2 per year).

The acquisition of Areva’s transmission activities will enable Alstom to be at the heart of tomorrow’s technology.

A MAJOR STRATEGIC ACQUISITION ALSTOM CREATES A THIRD SECTOR IN POWER TRANSMISSION – ALSTOM GRID On 20 January 2010, Alstom and Schneider Electric signed an agreement with Areva, the French nuclear group, to acquire its subsidiary Areva T&D, the world’s 3rd largest player in the transmission and distribution of electricity, for a total of €2.29 billion, plus €1 billion in debt. Alstom will take over the Transmission business,

The biggest CO2 capture and storage site, in Mountaineer, West Virginia (USA).

which will become its third Sector, named “Alstom Grid”, and Schneider Electric will take over the Distribution business. This major strategic move, the most ambitious since it recovered from the crisis in 2005, enables Alstom to re-enter a business from which it withdrew in 2004, when it was obliged to sell its T&D subsidiary to Areva in order to meet its nancial commitments. Alstom has thus created a third Sector with a workforce of 20,000, annual revenue of €3.5 billion and signicant development potential. It will balance and strengthen Alstom’s business prole alongside Power and Transport, increase its critical size, bolster its portfolio of products and services and position the Group at the heart of tomorrow’s technology: smart grids. The joint offer submitted by Alstom and Schneider Electric in July 2009 was accepted by Areva’s supervisory board on 30 November. The offer was underpinned by a compelling industrial rationale. Schneider Electric, one of the world’s leading electricity distributors specialising in medium and low voltage, has created a powerful Energy business unit by regrouping highly complementary teams. And Alstom has considerably broadened its offering

with an upstream focus (power generation with the Power Sector) and a downstream focus (high and very high voltage power transmission with the new Sector, Alstom Grid), which dovetail perfectly. Alstom Grid is already present in many countries, but it still has a lot of growth potential. The strength of Alstom’s international network and the close ties that its commercial networks have forged with world’s biggest electricity producers will help drive its business development. The sale agreement with Areva was nalised on 7 June 2010, after authorisation by anti-trust authorities, consultation with works’ councils and approval by the French commission in charge of privatisations (Commission des Participations et des Transferts). This cleared the way for the effective allocation of activities between Alstom and Schneider Electric and the new Sector’s rapid incorporation into the Alstom Group.


OVERVIEW

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

BRAZIL MARCH 2010 New facilities in Brazil at the giant Santo Antonio plant On 18 March 2010, Alstom Power and its partner Bardella opened a new plant at Porto Velho, in Amazonia. “IMMA”, as it is known, produces hydroelectric equipment for future power plant facilities that will be built along the Rio Madeira and in northern Brazil. This is Alstom’s third plant in the country and a wind turbine manufacturing facility is due to open in 2010. The Imma facility is located near the major Brazilian hydro-electric projects on the Rio Madeira.

EUROPE NOVEMBER 2009 Alstom and Schlumberger join forces in CO2 capture and storage Alstom and Schlumberger Carbon Services signed a cooperation agreement in November 2009 to offer operators of new or existing power generation plants an integrated chain of services to cover the whole CO2 capture and geological storage of (CCS) process, a eld in which both partners have established highly-reputed expertise: Alstom brings its know-how in capture technology to the project in addition to its experience as an integrator; Schlumberger Carbon Services, its management of the storage process.

INDIA DECEMBER 2009 Alstom and Bharat Forge work together in India On 4 December 2009 Alstom Power and Bharat Forge, India’s leader in metal construction and wrought parts, laid the foundation stone at Mundra in Gujarat of their joint production facility which will produce rotating equipment for coal-red power plants.

RUSSIA MARCH 2010 Alstom breaks into the huge Russian rail market On 1 March 2010, Alstom and Transmashholding (TMH), Russia’s main rail transport manufacturer, put the nishing touches to their strategic partnership project. Under the terms of the agreements signed between the two companies, Alstom will acquire 25% of the share capital of TMH, and will cooperate with its Russian partner to develop and produce new rolling stock and components for the Russian rail transport market.

TOMORROW’S CHALLENGES

SOUTH AFRICA NOVEMBER 2009 The Alspa system for the South African plant at Medupi In November 2009, Alstom Power signed a contract with Eskom to supply an instrumentation and control-command system for the coal-red power plant under construction in Medupi, which will be the largest in the world. The Alspa Series 6 system is the rst major achievement of the partnership with Microsoft, which addresses the challenge of smart grids.

The design of equipment for power generation and public transport, which is essential for economic, social and environmental development, must anticipate growth in demand and operational requirements. These challenges are illustrated in ve questions.

MOROCCO NOVEMBER 2009 Following in the footsteps of Rabat, Casablanca has also chosen Citadis. A contract was signed on 13 November with Casa Transports for the delivery of 74 tramsets. It also included an option to acquire additional trams and a 15-year maintenance agreement.

Alstom Transport has signed an industrial and commercial partnership deal with Russia’s main rail transport manufacturer, TMH.


TOMORROW’S CHALLENGES

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

22 /// 23

CHALLENGE 1

CHALLENGE 2

WHAT WILL TOMORROW’S ENERGY PORTFOLIO LOOK LIKE?

ARE FOSSIL FUELS AND SUSTAINABLE DEVELOPMENT COMPATIBLE?

Clearly, we need more than one solution to power the future while meeting our environmental challenges. Growing reliance on renewable energies must go hand-in-hand with signicant improvement in traditional power generation methods.

This question is especially pressing for the most rapidly developing countries, which rely on intensive use of fossil energy. The answer is clear… and it starts with technology.

Scarcer oil and gas

INTERVIEW

FOR ROBERT GLEITZ, VP BUSINESS INTELLIGENCE AND MARKETING, “WE ARE TAKING ACTION TODAY TO MEET FUTURE DEMAND.” “Alstom provides solutions across the entire spectrum of power generation and takes a proactive approach to the development of renewable energies. Our strategy, embodied in the motto “Clean Power Today!”, is well in place and we already have a number of projects underway. In landbased and offshore wind farms; in hydropower, by combining wind farms with turbine pumping plants and remote monitoring systems, as is being done in Portugal, to cope with the intermittent nature of wind power generation; in tidal energy, through a licensing cooperation agreement concluded with Clean Current Power Systems of Canada —for example, the potential for ocean tidal power generated off the coasts of France is estimated at 3 GW; in thermal solar and geothermal; but also by co-ring biomass with coal. In this way, we stand ready to best respond to the needs of our customers.”

resources, volatility of energy prices, geopolitical uncertainty about supplies, environmental impacts related to electricity, measures to reduce the carbon footprint… there are a host of reasons why promoting a diverse energy mix in power generation makes sense. Diversication means increasing the share of renewable energy sources that do not emit greenhouse gases (hydro, wind, solar, marine current, geothermal). But facilities

that use fossil fuels are bound to remain predominant for some time to come. This highlights the importance of the challenge to improve their energy performance, and thereby to reduce all types of pollution.

INTERVIEW

ACCORDING TO CHARLES SOOTHILL, SVP TECHNOLOGY, “THERE IS NO MAGIC WAND.”

41% of all power

generated currently uses fossil fuels, coal, lignite and hydrocarbons. Coal is still the leader by a stretch, since it costs less than oil and gas, and resources are plentiful, particularly in countries like China and India where electricity production is rising very strongly. Although the use of renewable energies has grown rapidly in recent years, experts forecast that fossil fuels – primarily coal – will account for a major part of power generation in 2030. The challenge involves making their use as acceptable as possible and reducing emissions

in new or existing facilities is therefore a priority. Technological improvements have considerably boosted the energy efciency of power generation facilities, which has risen from 35% to approximately 45% for coal, and from 45% to 60% or more for natural gas. A higher yield means a signicant reduction in greenhouse gas emissions and improved economic performance assuming equivalent energy consumption. The next step is the large-scale integration of the process for CO2 capture and storage of (CCS), which is expected to arrive on the market by 2015.

“There is no easy route to sustainability, nor is there a magic wand. We will need to draw upon a full range of technology solutions. Fossil fuels, particularly coal, will continue to play a big role in power generation in the coming decades. At the same time, rapid growth in the use of renewables, in addition to hydropower, the return to nuclear energy and, most importantly, better management by consumers of electricity and energy usage are key milestones on the path to sustainability. Another way to bridge the gap is by using CCS as a mechanism to avoid CO2 emissions. If this is underpinned by stringent CO2 regulations and coordinated implementation wherever in the world substantial quantities of fossil fuels are used, then CCS can play a critical role.”


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CHALLENGE 3

CHALLENGE 4

HOW CAN CARBON CAPTURE AND STORAGE BE PROMOTED?

HOW CAN TRAINS BE ADAPTED TO EXTREME CLIMATES?

Alstom and many of its customers have already tested the carbon capture and storage technology which will be available within the next ve years. But it will never become widespread without political will and a solid legal and regulatory foundation.

As rail operators and passengers alike make ever greater demands, the rail transport market is striving to deliver better availability, tighter timetables and broader geographic reach. Today’s trains need to run through all kinds of weather over every imaginable terrain.

In order to limit global

INTERVIEW

FOR JOAN MACNAUGHTON, SVP POWER AND ENVIRONMENTAL POLICIES, “CCS PROMOTION NEEDS A LEGAL FRAMEWORK.” “C02 capture and storage will need a coherent legal and policy framework to secure its successful global implementation on a large scale. We aim to convince political leaders that public funding is justied for the rst demonstration plants because individual companies are not able to bear the cost. A strong C02 price or legislation or both will also be needed to create a market for CCS. Assuming the right framework will be set up, our commercial offer will be ready by 2015. But a transport and storage infrastructure also needs to be created, with public and private sector involvement, under suitable regulation. The spinal element to ensure CCS can make its contribution to our climate change agenda is public acceptance. The right messages need to be conveyed to the public so that they understand the rationale for CCS and are condent that CCS represents a reasonable approach without any unmanageable risks.”

warming to a 2°C rise in atmospheric temperature by 2050 compared to pre-industrial times, CO2 emissions worldwide will need to be kept below 450 ppm, according to the experts. In 2009, this level had already climbed to 387 ppm. Yet between now and 2050, power generation is projected to increase by nearly 50% around the world. Even if all current environmental standards were applied, it is still going to be a challenge to contain global warming below the 2°C target. Emerging technologies relating to the carbon capture and storage (CCS) of emissions by coal-red power plants are attracting growing interest. CCS clearly has a key role to play for shortterm atmospheric stabilisation and may,

over the longer term, facilitate the transition to genuine sustainability. Demonstration projects are sprouting up all the time and world leaders from the European Union to Japan, the United States, Canada, Australia and China have already announced that any future thermal power plants will need to be designed to be equipped with a CCS unit as soon as this technology becomes available. But that day has not yet come and the power generation industry is banking on government support to stimulate investments.

INTERVIEW

FRANÇOIS LACÔTE, SVP TECHNICAL: “PROTECTION IN EXTREME CLIMATE CONDITIONS”

From trams to high speed

trains, today’s electric rail vehicles are innitely more sophisticated than their predecessors. Initially designed to be used in relatively temperate climates, they must now be re-engineered to meet the demands of new markets with extreme climates. They will be running in all types of weather, in bitter cold as well as sweltering heat. When it snows, particles can be so ne that they get into all the machinery or can form heavy, sticky masses under the carriage bodies and around the bogies. Ravages of ne sand can freeze up moving parts. Excessive heat

can harm electronic components. Monsoon rains are another risk factor in some regions. And compliance with earthquake-resistant standards must be assured where necessary. All the specic characteristics relating to extreme climates must therefore be taken into account and solutions must be found so as to offer customers winterised or tropicalised products, depending on their requirements. These are key parameters which make all the difference in the marketplace.

“Bitter cold is the most difcult to deal with: the tensile strength of metals decreases, rubber stiffens, oils and lubricants congeal. We must therefore pay very careful attention to the materials selected. Our experience with the Pendolino in Finland will obviously be helpful for the network that will link Helsinki to Saint Petersburg, but we will also be able to draw on the experience of our Russian partner TMH, which is used to very low temperatures. At the other end of the spectrum, for extreme heat, the difculties involved are especially related to the electronic components, whose protection must be ensured since they cannot withstand high temperatures. Nor can the motors and transformers, so our heat exchangers must be of adequate size. All this does not mean that today’s high technology rolling stock is less resistant to stress than older equipment. The most important thing is to be fully aware of the weather conditions in which these products are used and to take these conditions into consideration when designing, developing and building the rolling stock, as well as the station equipment.”


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CHALLENGE 5

HOW CAN SERVICE NEEDS BE CORRECTLY ANTICIPATED? Amid escalating competition and ever-greater security requirements, rail operators are looking for maintenance systems that will keep their equipment available and reliable. Alstom has the solutions they need.

Rail transport

INTERVIEW

PASCALE GRASSET, VP MARKETING AND SALES: “A CONTRACT THAT SHOWCASES OUR EFFECTIVENESS.” “Our experience in rolling stock maintenance dates back to 1992, when a rst major customer, Renfe, entrusted us with this responsibility for its Madrid–Seville TGV. This initial success was later followed by many others and we have since signed some 50 contracts around the world, relating to several thousand rail vehicles in all categories. When the French freight market opened up to competition in 2006, we signed a contract with the private operator Veolia Cargo for the supply of 31 Prima locomotives together with a maintenance agreement. As these vehicles were operated between France and Germany, we created a centre in Belfort and set up a network of facilities over the entire circuit travelled by these trains, leasing access from their owners, such as SNCF. Thanks to TrainTracer, our online condition monitoring system, this unprecedented approach to maintenance is so widely reputed today that we get compliments from the entire European freight industry!”

infrastructure and rolling stock – just like any other equipment – stand a good chance of running smoothly for a long time if they are well maintained. Many operators expect manufacturers to offer a full range of services to ensure that the products they have purchased will remain competitive thanks to their consistent performance and availability, thereby protecting their investment. Services hold the key to customer loyalty and are therefore assuming an ever greater role in the activities of rail equipment manufacturers. Contracts can cover maintenance, upgrades, technical support, assistance, spare parts logistics. The range of solutions has to cover the broadest possible range

of needs while also being adapted to each customer’s specic requirements, effectively tailor-made and, as a matter of course, with a commitment to innovation. Combining service solutions with the product offer from the very outset may prove to be an attractive approach for the potential buyer. Alstom has made signicant advances in this area, with TrainTracer, its preventive maintenance system, which can increase trains’ availability quite spectacularly.

THREE CHALLENGES VISIT WWW.ALSTOM.COM

1

HIGH SPEED TRAINS: AN ALTERNATIVE TO AIR TRAVEL? High speed trains offer many advantages over air travel: communities benet from their lower energy consumption, smaller environmental footprint and reduced ground congestion, while travellers enjoy easy access, exibility, short travel times, and hassle-free boarding. Increasingly, trains seem to hold solutions to a broad range of problems – but how far can they go in replacing aeroplanes?

2

AGEING GRACEFULLY: CAN POWER PLANTS LIVE LONGER? 30 years? 40? 60? How long can a power plant – nuclear or conventional – deliver technological and economic benets that justify extending its life? How can we improve and optimise plant performance? And if we can, what is the average lifespan of a 20-yearold plant versus a new one built with today’s technology?

3

BALANCING ACT: WHAT TRENDS WILL SHAPE TOMORROW’S POWER GRID? How can we meet rising demand for electricity, diversify our energy sources and reduce greenhouse gas emissions – all at the same time? How can we change our approach to producing, distributing and consuming electricity to cut costs, improve our quality of life and take better care of the environment? What exactly are “smart grids”, and are they a viable solution?


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NEW HORIZONS FOR ENERGY


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ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

ALSTOM POWER TECHNOLOGIES FOR SUSTAINABLE ENERGY

Despite the ups and downs of the economy, medium and long-term needs for new power generation capacity remain massive, amid growing environmental constraints. Alstom Power has the market’s broadest range of products and services and continues to develop innovative new technologies with one overriding goal: clean power.

A

FAST FACT Alstom Power posted an operating margin of 10.6% for the nancial year.

After three years of strong growth in power generation investments, particularly in Asia, with marked increases in hydro, wind and other renewable, non-greenhouse gas technologies, the worldwide nancial and economic crisis had a severe impact in 2009. Electricity consumption fell for the rst time since 1945, some projects became harder to nance and industrial investment sagged. Consumption began to revive in early 2010 – an early sign of recovery – but despite the many invitations to tender now open, it is still not easy to predict when decisions will be made on major projects in the pipeline. Against this backdrop, Alstom Power’s orders fell 43% year-on-year. Even so, Power booked a number of important orders, including hydroelectric projects in Switzerland, upgrade contracts in Poland and construction of steam power plants in the United Kingdom, Slovenia, Germany and India, in addition to plant management projects. Buoyed by the solid order backlog recorded in previous years, sales reached €13.9 billion, an increase of 6% over 2008/09. Successful project execution, careful supply chain management and


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RAPPORT D’ACTIVITÉ ET DÉVELOPPEMENT DURABLE

A MODEL FACTORY IN CHINA With a 600m-long manufacturing oor and a total area of 500,000m2, the Wuhan factory is designed to maximise energy efciency and improve working conditions for its 2,000 employees. Thanks to geothermal heat exchangers to heat and cool the air, solar-powered water heaters, automatic lowenergy lighting, recyclable wooden insulation panels, and recyclable ooring, the building will reduce the site’s ecological footprint.

The new Elblag foundry in Poland allows Alstom to cast equipment for international projects with complete independence.

The new Wuhan Boiler plant in China is designed around environmental standards that will save 6,000 tons of CO2 emissions annually.

Alstom’s Morelia site in Mexico, which specialises in steam turbines, will complement its new Chattanooga facility in the United States.

a new boiler plant in China and a new hydroelectric equipment plant in Brazil. The Sector has also continued the research and development work that keeps it in the forefront of CO2 capture and storage and other energy technologies.

and another to produce heat exchangers and other auxiliary equipment. These two joint ventures will employ 1,800 people directly and help create some 10,000 induced jobs in the region. Construction should be complete by mid2012.

Alstom Power expands its manufacturing capacity

cost-cutting measures pushed the operating margin to 10.6%, up from 9.6% last year. Recovery will come rst from “green growth” and emerging economies. With its strong presence in these regions – and especially in Asia and Latin America – Alstom Power can make the most of its cutting-edge solutions and technologies, in conventional combustion and hydroelectricity as well as in wind energy, which rounds out its energy portfolio. In addition, Alstom Power has strengthened and expanded its production facilities worldwide, with a new foundry in Poland,

On 12 November 2009 Alstom Power inaugurated a new boiler plant in Wuhan, the economic heart of central China. The facility is Alstom’s largest boiler factory worldwide. With annual production capacity of 5 GW and potential for 8 GW, Wuhan gives Alstom immediate access to the huge Chinese market – the world’s largest for boilers designed for coal-red plants. The supercritical and ultrasupercritical circulating uidised bed boilers manufactured at Wuhan will boost the efciency of conventional coal-red plants to 45%, sharply reducing emissions of CO2 and other coal-related pollutants and fostering the growth of clean energy production in China, which relies on coal for 70% of its energy. Because it is closer to Chinese and other Asian customers and better positioned to meet their needs, the Wuhan plant supports Alstom’s strategy of positioning production resources to make the most of worldwide production capacity and adapt to market variations.

FAST FACT Chattanooga will house the world’s largest rotor infrastructure.

In early December 2009, Alstom and India’s Bharat Forge, a global leader in manufacturing and metal-forming, sealed their partnership by laying the rst stone of a new power equipment manufacturing plant. Located on a 48-hectare site in Mundra, in the western state of Gujarat, the facility will have annual capacity of 2.5 GW of supercritical turbines, generators and heat exchangers. The Mundra plant is the core element in the joint manufacturing agreement between Alstom and Bharat Forge, which establishes two joint ventures: one to make steam turbines and generators

In Poland, Alstom’s Elblag site now has a new foundry. Inaugurated in June 2009, the facility will give the group complete independence in casting equipment for all of its major international projects – a real competitive advantage. With production capacity projected at 6,000 metric tons a year, the foundry will produce castings weighing in at 15, 40 or even 60 metric tons apiece. This new unit is located next to an existing foundry that has been in operation since 1973 and has long been one of Alstom Power’s key manufacturing sites, delivering all of the equipment for several Polish coal-red power plants, including the 833 MW Belchatow facility and the 460 MW Lagisza plant.

Laying a cornerstone in Chattanooga

In the United States, work continues at our site in Chattanooga, Tennessee, with inauguration of the new factory scheduled for June 2010. The centrepiece of Alstom Power’s worldwide network, the new plant will balance out its strong presence in Europe and China. It


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ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

Alspa

LANGAGE’S DISCREET FOOTPRINT The 900 MW Langage power station doesn’t just provide the UK with clean, cost-effective electricity: it goes to extremes to blend into the natural beauty of its setting in Devon’s Dartmoor National Park. With its elevation lowered by 10 m, its chimney designed as an architectural element, and noise output reduced to 35 dB at the position of the exit, the facility recycles and reuses water and uses high-tech lighting and climate

control. The plant can go from 0 to 900 MW in less than an hour, and emissions levels are among the lowest in the world for this type of facility – in short, it delivers savings on all fronts. Nestled into the surrounding greenery, the site attracts visitors. For their part, bats, horses, badgers and eld mice have nothing to fear from their protective neighbour Langage, together with the deer that munch the owers planted on its lawns.

The new Langage power station blends seamlessly into the Devonshire countryside in the UK.

THE “SMART” TOOL An IT platform used to manage energy, Alspa Series 6 is the rst major product resulting from Alstom’s collaboration with Microsoft.. Adaptable, secure and easy to use, it enables energy producers to optimise plant assets and operating costs.

Alstom’s Alspa system features a remarkable human-machine interface.

emissions and high efciency: because it can run as efciently at low load as at full capacity during peak hours, it will allow the operator to respond to uctuating energy demands.

site in Mexico, which specialises in turbine blades and diaphragms. In power industry services – from turbines to turbogenerators to boilers – Alstom Power has opened a new welding facility in Stafford, UK. Working closely with research and development, the facility will respond to in-house and outside demand for new materials and innovation. A specialised training centre integrated into the Stafford site will remedy a critical shortage of skilled industrial welders. will house the world’s largest rotorbalancing facility, which will test new and refurbished equipment, weighing as much as 350 metric tons, at above-normal speeds. The Chattanooga factory will supply markets in the US and neighbouring countries with the equipment required to build or retrot coal- and gas-red power stations and nuclear plants. The new facility will also help Alstom Power move toward two major strategic goals: expanding worldwide capacity to manufacture rotary equipment and complementing the Morelia production

New installed capacity for customers

In May 2009, E.ON Benelux awarded Alstom Power a contract to supply a 1,113 MW steam turbine for the Maasvlakte power station in Rotterdam, the Netherlands. Like its predecessor, the Alstom unit will be able to use biomass fuels and it is designed to accommodate retrotted carbon capture technology in the future. New steam turbine technology uses direct seawater cooling for 46% net efciency, up from the European average of 36%. That translates to significantly better environmental performance, with emission levels rivalling those for gasred plants. In the UK, Alstom Power won a contract with RWE npower

FAST FACT Alstom Power has won a contract to build a new 2,000 MW gas-red plant in Wales.

for the design and construction of a new turnkey combined-cycle gas-red plant in Pembroke, Wales. With capacity of around 2,000 MW, the new unit will be the UK’s largest, powering nearly 3 million households. Built on the site of the previous oil-red power station, Pembroke will include ve Alstom GT26 turbines and related components – triple-pressure heat recovery steam generators (HRSG), compact reheat-type STF30C steam turbines, and TOPGAS hydrogen-cooled turbogenerators. The plant will offer high load flexibility while maintaining low

This is the second project that Alstom has handled for RWE npower in the UK, following a 2007 contract for construction of the gas-red 1,650 MW Staythorpe power plant. In addition to Staythorpe, Alstom built the Langage power plant for Centrica and the Grain power plant for E.On. Together with the Pembroke plant, these facilities represent capacity of nearly 6 GW.

Two watchwords: innovation and environment

In Slovenia, innovative technologies and systems integration expertise earned Alstom a new contract from state-owned utility, Termoelektrarna Šoštanj d.o.o. Under the terms of the deal, Alstom will build a 600 MW coalred power plant in the north-eastern city of Šoštanj, supplying a STF60 steam turbine, a TOPGAS generator and a once-through tower-type boiler with ultrasupercritical steam parameters, along with an ALSPA distributed control system. The plant, which is scheduled to begin operations in late 2014, will double the national operator’s


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ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

THE 75th GT26 TURBINE LEAVES MANNHEIM FACTORY On 29 January 2010, the 75th GT26 gas turbine left Alstom Power’s Mannheim factory for the Maasbracht power station in the Netherlands. Over the last two years, the factory has turned out 25 turbines, though in the past it has taken as much as four years to produce the same result. The improvement is the result of major investments in expanding the site’s production capacity – an effort that included buying new equipment and assembly platforms and setting up a more effective logistics centre. The 75 GT26 turbines delivered by Mannheim represent total electricity production capacity of almost 20 GW.

ALSTOM AND THE NUCLEAR MARKET IN CHINA

Employees celebrate production of the 75th GT26 gas turbine at the Alstom plant in Mannheim, Germany.

Alstom also supplied equipment for the Ling Ao nuclear plant.

position as a leading supplier of automation systems for high-capacity power plants. The two units will supply 4,800 MW of power each, delivered by six Alstom 790 MW turbine generator packages, produced in part by the Beizhong factory in Beijing, China. Once commissioned, they will signicantly increase electricity production in South Africa, which has launched a massive investment programme designed to double the nation’s infrastructure over the next ten years. production capacity and provide around one-third of Slovenia’s electricity, reducing its considerable dependence on imported energy. Highly efcient and environmentally friendly, the new plant will also support employment in the region. In South Africa, Eskom awarded Alstom two contracts to supply its latest ALSPA Series 6 distributed control system and associated components for two power plants: Medupi, the biggest coal-fired power plant in the world, and its twin, the Kusile plant, which is also under construction. These orders solidify Alstom’s

In Germany, Grosskraftwerk Mannheim AG called on Alstom to supply innovative technology for a new 900 MW unit planned to begin operations in 2013. Mannheim 9 will take delivery of an STF100 steam turbine, a Gigatop turbo-generator and a condenser, as well as a boiler with selective catalytic reduction (SCR) solutions and a preheater, including coal bunkers, mills and auxiliary systems. These technologies play an essential role in reducing CO2 emissions from coal-red cogeneration plants. The new unit will consume less fuel, cutting the Mannheim plant’s total emissions by around 1 million metric tons per year. Mannheim 9 will provide 25% of the Rhein-Neckar region’s electricity – the equivalent of 600,000 households. It will replace existing units 3 and 4, with output of 220 MW each, bringing the station’s

Alstom has played a historic role in the growth of China’s nuclear energy sector over the past 20 years, ever since the Group helped build Daya Bay, China’s rst major nuclear plant. More recently, Alstom participated in the Taishan project, China’s rst nuclear plant to incorporate a 3rd generation EPR reactor.

same team of specialists installed eleven 400 MW turbinegenerator packages at Saudi Arabia’s Shoaiba plant.

Solidifying Alstom Power’s Mideast presence

FAST FACT New contracts in Sweden and other countries reect Alstom Power’s expertise in the market for retrotting nuclear plants.

total capacity to 2,175 MW. Grosskraftwerk Mannheim has supplied both heat and power to the entire region for over 85 years. Elsewhere in Germany, the Boxberg lignite-red power plant near Dresden, scheduled to begin operations in February 2011, will be among the rst to feature new generation ultra-supercritical USC steam turbines. When the new design presented installation challenges, a team of seasoned Alstom specialists from India solved the problem within the contract deadlines set by the plant’s operator, Vattenfall Europe AG. In April 2009, the

In the Middle East, Alstom won several electricity production equipment contracts in 2009. Totalling €100 million in value, the deals call for delivery of two GT13E2 gas turbines, generators and auxiliary equipment for the Samra III gas plant in Jordan. With capacity of 900 MW, power station will be the kingdom’s second largest, and its rst to include the GT13E2. In the Middle East, where Alstom has already delivered 60 GT13E2s, and in North Africa, the units have established a solid reputation for operating successfully in demanding climatic conditions. Though it had been operating for over a year, the Sohar combined-cycle plant in northern Oman was officially inaugurated on 20 April 2009 in the presence of Alstom CEO, Patrick Kron. The facility, which operates in single-cycle mode – using the gas turbine only – supplies Oman’s biggest aluminium smelter with the reliable, round-the-clock electricity required to produce this metal by electrolysis. Alstom’s combined-cycle plants for the ALBA facility in Bahrain, the Aluar plant in Argentina and the


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POWER

Retrotting nuclear plants has kept Alstom Power teams busy in countries including Sweden, China, and the US.

One of six giant Eco 100 units installed in Pithiviers, France.

Continued growth for Alstom Wind

Nuclear equipment and upgrades

Dubai site (United Arab Emirates) also supply power to aluminium smelters, solidifying the Group’s presence in this fast-growing industrial market. Elsewhere in the Middle East, Alstom is delivering seawater ue-gas desulphurisation (FGD) systems for Saudi Arabia’s Rabigh oil-red power plant on behalf of China’s SEPCO III construction company, supplying equipment for two 60 MW units. Alstom Power teams in China are handling nearly 90% of the engineering on the project, with support from colleagues in India and Malaysia. This project will strengthen Alstom’s position as a supplier of ue-gas desulphurisation systems.

Alstom has won a new contract to supply eight 9.1 MW emergency diesel generators (EDGs) to the Taishan EPR nuclear power plant in south-western China – the rst plant in the country to use this technology. Alstom EDGs are the most powerful generators in the world for this type of application. Coming on the heels of a contract to supply two turbine generator packages to Taishan, the new deal was signed by a consortium that also includes Man Diesel SAS and China Guangdong Nuclear Power Company (CGNPC). Alstom will design, manufacture and supply these generators in addition to providing on-site support service. In Sweden, Alstom won an upgrade contract from Forsmarks Kraftgrupp AB, a subsidiary of the Swedish group Vattenfall. Alstom will improve the performance of unit 3 at the Forsmark site north of Stockholm, supplying a generator to replace the Alstom unit provided in 1985.

Leading the nuclear retrot market in the United States

In the United States – a promising market for massive projects like these – retrot work at the Duck Creek plant in Illinois has increased the capacity of its low-pressure

Alstom Power has resolutely expanded its wind power positions since 2007, when it acquired the Spanish company Ecotècnia, now Alstom Wind. Its range of products is growing: extremely efcient models like the Eco 100 and the soon-to-be-commercialised Eco 110 reduce the land area required for wind farms, while new technologies make components more robust and longer-lived.

FAST FACT Alstom’s Eco 100 wind turbine is among the most powerful on the market.

turbine from 450 MW to 473 MW. This marks the rst time that Alstom’s India team has handled the studies and design work for a retrot project. Turbine specialists in Rugby, UK, advised the team in India and parts were manufactured at the Beizhong factory in Beijing, China. Alstom also won a modernisation contract at the Fort Calhoun nuclear plant in Nebraska. This is for the retrot of a turbine originally provided by a competitor. As the market leader for retrofitting nuclear equipment in the US, Alstom has improved the performance of 126 turbine casings, only nine of which came from its factories.

In October 2009, the rst wind farm equipped with Eco 100, the market’s most powerful land-based wind turbine, began operating at Vieux Moulin, a site in the Essonne valley just south of Paris. Alstom designed and installed six turbines for the operator, Energias de Portugal Renovaveis. With rated power of 3 MW each, the giant Eco 100 units at Vieux Moulin can meet the energy need of 12,000 households, eliminating 42,000 metric tons of CO2 annually. Welsh company Pennant Walters has awarded Alstom Wind a contract to build, operate and maintain the Maesgwyn wind farm in southern Wales, supporting the UK’s commitment to develop 14 GW — around one third of its electricity production — of onshore wind capacity by 2020. 13 Eco 80 turbines will begin operating in October 2010. The new agreement follows a


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Alstom and Clean Current Power Systems have signed a cooperation agreement to develop tidal energy.

Mexico is the world’s fourth-largest producer of geothermal electricity. In addition to the Los Azufres plant (photo), Alstom will construct two geothermal plants at Los Humeros.

Alstom partnered with Bardella to create Imma, a joint venture that operates a new facility near the Madeira River in Brazil. The Imma facility meets the sizable demand for equipment from hydroelectric plants now being built along the river.

Finally, to make inroads into the large US wind power market, Alstom has established a dedicated centre at its Richmond, Virginia site.

The two plants, which are scheduled for commissioning in 2012, will power more than 100,000 homes in southeastern Mexico. Leveraging the proven expertise of its production facility, Alstom has also opted to locate the management unit for a line of geothermal products in Mexico. With its considerable seismic activity, Mexico is the fourth-largest geothermal electricity producer worldwide, after the USA, Philippines and Indonesia. Globally, geothermal energy is expected to increase tenfold by 2050.

Harnessing the boundless energy of the tides

contract signed in early 2009 on Scotland’s 15 MW Clachan Flats project, solidifying the Eco 80’s breakthrough into the British market. Alstom is already very active in Brazil’s electricity generation market and plans to play a major role in developing wind power. In December 2009, Alstom signed a memorandum of understanding with the Bahia state government to install an industrial assembly plant with annual capacity of 300 MW. The facility will begin operations in 2011.

Tidal energy is a completely new area of development and Alstom Hydro has embraced this new frontier by signing a cooperation agreement with Canada’s Clean Current Power Systems, Inc., a specialist in tidal energy design and testing. A blend of hydroelectric and wind technologies, tidal energy uses underwater turbines to harness the power of ocean currents and tides. A source of clean, invisible, naturally renewable electricity, it produces no greenhouse gases – and is designed to avoid disturbing the marine fauna. Alstom Hydro holds an exclusive worldwide licence on Clean Current’s patented technologies. The agreement, which provides for joint technology development and deployment of demonstration units, positions Alstom Hydro as a provider of equipment and turnkey solutions for tidal stream farms. Alstom plans to commercialise its rst tidal stream products by 2012.

Geothermal comeback

With four 25 MW geothermal units at the Los Azufres

power station and a total of 10,000 MW of installed capacity since 1988, Alstom is no stranger to the geothermal market in Mexico. In 2009, Alstom made a comeback, winning two contracts from Mexico’s Federal Electricity Commission (CFE) in rapid succession. Under the two deals, signed in May 2009 and January 2010, Alstom will supply two 25 MW turnkey geothermal power plants to the Los Humeros power station in Michoacán state, with the steam turbines to be produced locally at Alstom’s site in Morelia.

Hydroelectric capacity expands

With market share of 35% and a major production unit in Taubaté, Alstom Power leads the hydropower market in Brazil and has expanded its manufacturing capability with a newly built site in Porto Velho in the northern state of Rondónia and inaugurated in mid-March 2010. Dubbed “Mechanical and Metallurgical Industry of the Amazon” (Imma), the new facility is a joint venture formed by Alstom and Bardella, a major Brazilian manufacturer of equipment for the metallurgy, energy, oil and gas industries. Located close to the Madeira River, Imma provides mechanical equipment to nearby hydropower plants, including the Santo Antônio


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CO2 CAPTURE AND STORAGE: THE ALSTOM ADVANTAGE

CO2 capture and storage is becoming a critical factor in the ght against greenhouse gases. In 2009, Alstom solidied its leadership in this emerging technology. Alstom’s Vadodara facility in Gujarat, India manufactured the world’s most powerful Francis turbine for the Subansiri dam.

site. With commissioning planned for 2012, Santo Antônio will have 19 bulb turbines – the largest ever built – and at 3,150 MW capacity, it will be third largest power station in the country. Imma is also well positioned to participate in other hydropower projects in northern Brazil, Peru, Bolivia, Ecuador and Central America. Brazil uses only a tiny fraction of its potential for hydroelectric power, and demand should rise as the need for clean energy grows. Alstom sees strong growth potential in the market for small hydropower plants with unit capacity of 30 MW. In India, where hydropower capacity is projected to increase 2 GW a year between now and 2015, Lanco Infratech, Ltd. has

chosen Alstom to provide equipment for a new 500 MW hydropower plant to be built in the north, on the Teesta River. Alstom’s Vadodara facility in Gujarat will supply the equipment. In 2009, Vadodara delivered the largest Francis turbine ever made in India to the 2,000 MW power plant now under construction on the Subansiri dam. Vadodara is one of Alstom Hydro’s three main worldwide platforms, along with Taubaté, in Brazil and Tianjin in China. The Tianjin factory is currently providing equipment to northern Vietnam’s Son La hydropower plant, which will be the most powerful in Southeast Asia. As the world’s leading supplier of pump turbines, Alstom is introducing the technology in Switzerland and scored a double hit in 2009: a May contract for four 157 MW variable speed pump turbines along with four motor/ generator units for the Nant de Drance power station now being built in Valais, followed by another contract in October for four additional 250 MW units to equip the Kraftwerke Linth-Limmern power station in Glaris canton. Currently, pump turbines are the only technology capable of storing large quantities of surplus energy and releasing it when power needs increase, allowing producers to respond quickly and efciently to uctuations in demand. Switzerland plans to replace or upgrade around 50% of its current hydroelectric capacity by 2035.

A

Testing of the CO2 capture system at the Schwarze Pumpe plant, operated by Vattenfall in Germany’s Brandenburg state, began in late 2008.

longside improved efciency for coal- and gas-red plants and diversication of energy sources used to generate electricity, capture and geological storage of CO2 (CCS) is now viewed as a viable approach to eliminating a signicant portion of carbon dioxide emissions. Alstom, which has been studying this technology for a number of years, is now a recognised leader. With an eye towards commercialising CCS solutions by 2015, seven pilot and demonstration units are currently operating in four countries to validate this technology, and three of the six – Vattenfall’s Schwarze Pumpe plant in Germany, AEP’s Mountaineer plant in the United States, and Total’s Lacq plant in France – include storage. Five additional pilot plants with capacities over 200 MW are under construction or in the planning stage: these include


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RAPPORT D’ACTIVITÉ ET DÉVELOPPEMENT DURABLE

“A viable, workable process” Michael Morris, CEO of AEP “In the early days of carbon storage, a lot of vendors were talking about what they hoped they would be able to do but they were not as eager to join a project. In my conversations with Philippe Joubert, I realised that Alstom was ready to move, and that’s what they did. When we announced – and we were the rst to do it in the United States – that we were going to tackle all the issues of CCS at a coal-red electric plant, Alstom stepped up and joined us as a partner. Quite frankly, their support and responsiveness were incredibly impressive. Mountaineer is a very important project for us and for the world, because it shows that CCS, and in particular Alstom’s chilled ammonia process, is viable and workable.”

Poland’s PGE Belchatow plant and Vattenfall’s Jänschwalde facility in Germany, which were chosen to receive subsidies from a dedicated European Union fund in 2009. Alstom’s “Year of CCS”

In the USA, Alstom Power President Philippe Joubert and American Electric Power (AEP) President Michael Morris met at the Mountaineer site in New

“Alstom is setting the pace for CO2 capture”

Philippe Paelinck, CO2 Systems Business Development Director “As early as 2006 we established a clear, visible strategy, with a product plan and roadmaps for rapid development of select technologies. In a little less than three years, we’ve commissioned 7 pilot units, with CO2 storage at three of them. Even I have been surprised at how fast we’ve succeeded in developing a completely new industrial process like chilled ammonia CO2 capture. We began with lab research in 2006, and by late 2009 we were running a 20 MW unit with

The pilot site for AEP’s Mountaineer plant in Virginia (United States) was inaugurated in late 2009.

Haven, West Virginia on 30 October 2009, to dedicate the world’s rst facility combining capture and storage of carbon dioxide from a coal-red plant. This validation pilot, which handles 20 MW of the plant’s 1,400 MW output, can extract and store 100,000 metric tons of CO2 a year. In February 2010, the US Department of Energy (DOE) granted a subsidy to AEP to continue the project at Mountaineer with a new 235 MW unit that should be operational in 2015. Two weeks after Mountaineer was commissioned, Alstom and TransAlta, Canada’s leading electricity producer, announced that they had formed a partnership to build the world’s biggest CCS unit. This project, dubbed Pioneer, will also rely on the chilled ammonia process to extract carbon from the emissions of the 450 MW Keephills 3 plant in Alberta.

Also in the United States, in September Alstom and Dow Chemical dedicated a pilot unit that uses advanced-amine technology to capture CO2 from the ue gas of Dow’s coal-red plant in South Charleston, West Virginia. In Norway, Alstom and Norwegian oil group Statoil, signed an agreement in June 2009 to build a 40 MWth demonstration plant at the European CO2 Test Centre Mongstad (TCM). The goal of the project is to assess strategies for reducing the costs and risks associated with implementing CCS technologies at a natural gas-red plant. And in France, Europe’s rst comprehensive capture, transport and storage project was launched in Lacq, in the French Pyrenees, in January 2010, with Alstom retrotting an existing boiler for oxy combustion of natural gas. This is only the second carbon capture

FAST FACT In Europe, Alstom is preparing to convert 300 MW-plus fossil fuel-burning plants to incorporate CCS technology.

project of its kind in Europe: the rst was Schwarze Pumpe’s lignite plant. Agreements and acquisitions

By 2011, Europe’s fossil fuel-burning power plants with capacity over 300 MW must be able to assess the feasibility of CCS in order to obtain their operating permit. In November, Alstom and Schlumberger Carbon Services signed a cooperation agreement covering feasibility studies on the entire

capture and storage capacity of 100,000 metric tons a year. We’re still on track to commercialise our processes in 2015, and we expect our customers to make nal investment decisions on turnkey construction of the rst full-scale units by 2011. And we’re already working on second generation technologies like chemical looping, with the rst 1MW-3MW pilots scheduled to begin operating in 2010.”

process. These technical and geological studies will lay the groundwork for converting new and existing power plants. A worldwide leader in technological solutions for the oil and gas industry — including injecting and storing CO2, a process that the industry has long used in this sector, in the North Sea for example — Schlumberger Carbon Services has mastered the key technologies to manage CO2 storage. It is also participating in the Mountaineer project. Moreover, in November 2009, Alstom acquired an engineering unit from the former Lummus Global, a leading provider of hydrocarbon processing technologies based in Wiesbaden, Germany. Integrating this 100-member team, now named “Alstom Carbon Capture GmbH”, into Alstom will enable the Group to offer new solutions designed to optimise CO2 capture processes and reduce their toll on the system’s energy consumption.


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SUSTAINABLE MOBILITY SOLUTIONS FOR RAIL TRAVEL


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SOLUTIONS FOR SUSTAINABLE MOBILITY In nancial year 2009/10, Alstom Transport’s order intake was satisfactory and operating performance was strong. Backed by a very broad product range, Alstom Transport is already looking beyond the crisis, opening new markets and pursuing its policy of innovation.

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FAST FACT Alstom Transport is rigorous in executing orders and relentless in its pursuit of quality.

Over the long term, many factors are converging to drive a surge in rail transport and expansion of existing networks: economic, demographic and urban growth in emerging markets, a complex, congested air trafc system, saturated roads and motorways, pollution and CO2 emissions and ageing infrastructure in developed countries. But for now, the crisis has caused passenger numbers to decline in several countries, especially for main lines, and has delivered a severe blow to freight transport – down by as much as 30% in

some markets – compelling operators to make drastic reductions in their investments. Nevertheless, Alstom Transport has a relatively limited exposure. Though government stimulus plans include a “green” component focusing on transport infrastructure, the rail industry will not reap the full benet of these measures until the medium term. Financial and technical implementation of these plans will take time, and in the case of new rail lines, for example, rolling stock and signalling systems will only be delivered after civil engineering works are completed. Against this backdrop, Alstom Transport saw 2009/10 orders decline 32% to €5.5 billion, but particularly high intake in the previous year provides an unfavourable basis of comparison. The year included several major contract wins for rolling stock: tramways in Brazil, Morocco and France, metros in Brazil and the Netherlands, regional trains in France and Germany and suburban trains in the Paris region and for maintenance services and signalling systems in Sweden, France, Austria and China. Thanks to a strong order backlog accumulated in recent years, Alstom Transport recorded sales of €5.8 billon, up 1%. Following rigorous production processes and continued quality improvement efforts, the operating margin has remained stable at 7.2%. Moreover, to preserve its protability, now one of the highest in the rail industry, Alstom Transport will leverage its competitive advantages – a comprehensive product range, capacity for innovation, turnkey solutions and superior service; and adapt its offering even more closely to the needs of customers.

Strategic advance into the Russian market

In 2009/10, Alstom Transport continued its strategic move into the huge Russian and CIS market. In March 2010, Alstom and Transmashholding (TMH), Russia’s largest railway equipment manufacturer, took a new step towards nalising their partnership, launched in October 2008, with the announcement of an agreement allowing Alstom to acquire a 25% stake in TMH. Alstom will acquire this ownership interest in two stages: an initial payment of $75 million within six months following execution of the agreement, with the remainder to be paid in 2012, in an amount tied to TMH’s operating performance over the 2008/11 period. The agreement also calls for an


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HELSINKI TO SAINT-PETERSBURG IN THREE HOURS The rst of four Allegro high speed trains for the Helsinki-St. Petersburg line arrived in Finland in January 2010, two years after Alstom signed a contract with Oy Karelian Trains, a joint venture between Russian Railways (RZD) and Finnish Railways (VR). Derived from Alstom’s Pendolino tilting trains, which run at high speeds on conventional lines, the Allegro can reach 220 km/h, initially reducing Helsinki-St. Petersburg travel time to three and a half hours, and ultimately to only three. Now running in 10 countries, Pendolino trains have logged more than 300 million kilometres of commercial service in 20 years.

CORADIA POLYVALENT, THE “ECO-SUSTAINABLE” TRAIN

Alstom’s new Allegro train is derived from Pendolino tilting train technology.

Transport in a new market. Under one of these deals, Alstom will supply Kazakhstan Temir Zholy, the national rail operator, with turnout motors that incorporate Alstom’s latest technological advances and are able to operate in extreme winter temperatures. Under the second agreement, Alstom Transport will lay track and supply rolling stock and signalling systems for a new tramway project in Astana, the country’s new capital.

New successes for Coradia agreement on managing the company, as well as a cooperative venture between Transmashholding and Alstom Transport to develop and produce new rolling stock and component parts to meet the renewal and expansion requirements of the colossal Russian rail market.

Tapping into the Kazakhstan market

Two preliminary cooperation agreements were signed in October in Kazakhstan, offering growth opportunities for Alstom

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In France, Alstom Transport won an order from SNCF, the national rail operator, in October 2009, involving a rm commitment to supply 100 Coradia Polyvalent trains. The initial contract includes options, two of which were exercised in January and March 2010, bringing the number of trainsets to 142. Deliveries will run from 2013 until 2015. The order is the rst series in a eet of next generation regional trains which will upgrade regional express trains (TER) rolling stock between now and 2023. Ultimately, volume may reach 1,000 Coradia Polyvalent trains. In Germany, Lower Saxony’s regional rail authority, LNVG, ordered 28 Coradia Lint regional trains in December 2009. These two-car diesel trains are designed and manufactured at Alstom Transport’s Salzgitter site, also in Lower Saxony.

Alstom’s Coradia regional train models continue to meet with considerable success with the new generation Coradia Polyvalent, a powerful new addition to the Coradia line that travels at 160 km/h. Highly modular, this model covers the full range of peri-urban, regional and intercity trafc needs and is even available in a cross-border version that can operate on the Swiss and German networks at a voltage of 15 kV. Economical and environmentally friendly, this is the rst regional train to use permanent magnet motor bogies.

Alstom’s high performance Coradia Polyvalent engine is light and compact and over 90% of its components are recyclable. In addition, it can capture energy generated during braking and return it to the power grid – another benet to the environment. Finally, the Coradia Polyvalent is designed for comfort. Platform-level oors offer maximum accessibility, while dynamic information screens, optimum lighting and visibility and reduced vibration and noise levels enhance the passenger experience.

25% OF ALL METRO TRAINS IN SERVICE worldwide were built by Alstom. More than 3,000 Metropolis trains operate across the globe, from Istanbul to Shanghai, from Santiago to Budapest, and from Santo Domingo to Nanjing.

Elsewhere in Germany, rail operator Deutsche Bahn Regio also ordered 16 Coradia Lint trains. This is the rst phase of a 2008 framework agreement for a total of 180 trainsets. Nearly 150 Coradia Lint trains are already in service on the Deutsche Bahn network. In Sweden, Alstom Transport agreed to supply spare parts for 49 Coradia Nordic trains ordered in 2006 by Skånetraken, under a new contract with the Norwegian rolling stock maintenance rm Mantena, which maintains the trains. To date, 127 Coradia Nordic trains supplied by Alstom

are in service in Sweden. All of these trains, also manufactured at the Salzgitter site in Germany, were winterised to withstand long, cold winters. In April 2009, the Paris Regional Transport Authority (RATP) ordered 60 double-decker suburban MI09 trains from a consortium formed by Alstom and Bombardier, with an option to purchase additional trainsets. Intended to relieve congestion on Line A of the city’s regional express network, which handles more than a million passengers annually, the new trains will replace the line’s existing single-decker trainsets beginning in 2011. Each MI09 is 110 metres long and consists of ve cars with six wide doors designed to speed passenger ow and reduce station time. With a top speed of 110 km/h, the MI09 is faster than the existing trains, and its innovative traction system reduces energy consumption, generates less braking dust and requires no environmentally hazardous uids.

Metropolis gains ground

In January 2010, the city of Amsterdam in the Netherlands, ordered 23 metro trainsets with the option for additional trainsets. They will be built in Valenciennes, France and Katowice, Poland. The 166-metre-long trainsets with platform-level oors and wide doorways offer


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APS

ALSTOM TRANSPORT WINS “MOST INNOVATIVE PRODUCT” AWARD FOR WIRELESS POWER SUPPLY FOR TRAMWAYS. The award was presented during the Second Congress and Showcase of the International Association of Public Transport (UITP) for the Middle East and North Africa, held in Qatar in October 2009.

Bordeaux’s Citadis is the rst to feature Alstom’s APS wireless power supply system.

CITADIS HAILED FROM MELBOURNE TO BRASILIA

freedom of movement between carriages and carry 50% more passengers as the trainsets currently in use, while facilitating access. Dynamic information displays, onboard connectivity and light-lled interiors will enhance passenger safety and comfort. In Brazil, Alstom has strengthened its presence in this market with a whole series of contracts. In addition to a major order for the Brasilia tramway (see page 53), Alstom Transport will supply 48 metro cars for the Brazilian capital and modernise its signalling system. Elsewhere in Brazil,

Alstom Transport will supply 16 new trainsets for the Sao Paolo metro and install a fully automated control system. Automation is also coming to Line 1 of the Paris metro, the oldest and busiest in the French capital’s network. Already equipped with Alstom Transport’s MP89 trains, the entire line will be fully automated under an order from RATP, its operator, for 49 new high-performance MP05 trainsets, with the option to purchase 10 more. The MP05 models, which run on rubber tyres for extremely quiet operation, will gradually replace the previous model beginning in late 2010.

Signalling, from Atlas to Urbalis

Austria, a key signalling market with a large share of European rail trafc transiting through its territory, has chosen to equip a portion of its eet with ERTMS Atlas, Alstom Transport’s cross-border trafc management system. When its programme of 449 trainsets is complete, national rail operator, ÖBB, will boast one of the largest eets equipped with Level 2 of this system. ERTMS Atlas will be deployed by 2014 and supplemented with Alstom Transport’s specic transmission module (STM) solution, which enables locomotives to circulate non-stop in the neighbouring countries of Germany, Switzerland,

With tramways making a spectacular comeback in Europe and around the world, Alstom Transport’s Citadis has racked up one success after another since its commercial launch in 1997. Today, some 1,380 Citadis tramsets operate in 34 cities – French cities of course, but also Madrid, Dublin, Melbourne, Constantine, Algiers, and soon Dubai. One reason for its popularity is its ability to blend seamlessly into a wide variety of urban landscapes, enabling each customer to match Citadis to the style of its city – or to opt for an Alstom system that allows tramways to run without overhead wires on select stretches of track.

In Brazil, Citadis will blend seamlessly with the pioneering architecture of the country’s capital, Brasilia. The contract awarded to Alstom Transport in July 2009 calls for 16 tramsets each able to carry 400 passengers, construction of an 8 km network – including 1.2 km using APS technology – as well as power supply, telecommunications and ticket distribution systems. As a curtain-raiser, an exhibition devoted to the project opened in September. This will be the rst modern tramway in the Americas. In Morocco, Casablanca has opted for Citadis, following the lead of Tunis, Algiers, Constantine, Oran (Algeria) and Rabat (Morocco). Alstom will supply 74 tramsets, easing trafc in this congested city, which is home to nearly 4 million people and 1 million cars. Apart from this rm order, the contract includes options for additional tramsets and a 15-year maintenance agreement. In Australia, the capital city, Melbourne, whose enthusiasm for its tramway is second to none – the system currently carries the largest number of passengers worldwide – found an innovative solution to ease the burden on its Line 96, which already operates a Citadis eet: in 2009, it acquired 5 tramsets

under a lease-purchase arrangement – with the city of Mulhouse, France. In France, where the city of Montpellier, the very rst to acquire a Citadis eet, demonstrated continued condence in Alstom Transport by ordering 23 new tramsets, major metropolises are moving, one after another, to Alstom’s innovative urban transport solutions. Two cities formed a partnership in September 2009 to acquire a total of 52 tramsets – 20 for Brest, in western France, and 30 for Dijon, in Burgundy. This grouped order will allow Brest and Dijon to rationalise their investments and pool their efforts. Lastly, the city of Rouen chose Alstom to supply 27 tramsets. Of the ten French cities already equipped with a Citadis system, four have opted for the APS version: Bordeaux (the rst), Angers, Rheims and Orleans. Dubai, which chose a tropicalised version, and Brasilia have now followed their example.


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NEXT GENERATION TRAIN TRACEABILITY ENHANCES MAINTENANCE EFFICIENCY Alstom Transport’s TrainTracer system can identify and report faults while trains are running, providing information to operators in real time – a key advantage. Maintenance can be performed sooner (as part of overnight maintenance activities, for example), preventing breakdowns and eliminating delays. Under a contract signed with Veolia Cargo for Prima

FAST FACT Most rail networks use one of Alstom Transport’s many different signalling solutions – from Atlas to Urbalis.

locomotives running between France and Germany, Alstom Transport has even set up a mobile maintenance system. TrainTracer is the latest in a series of diagnostic and control tools designed by Alstom Transport to anticipate and prevent failures as well as spare parts requirements for trains in service.

Slovenia, the Czech Republic and Hungary, and in other Eastern European countries. Under this contract, Alstom Transport’s teams in Charleroi, Belgium will adapt this solution to ÖBB’s requirements. The components will be produced by the company’s sites in Villeurbanne, France and Verona, Italy. In France, the Atlas system will be installed on the French portions of two European freight corridors, Antwerp– Basel/Rotterdam–Lyons and Barcelona– Lyons–Milan. Ordered from Alstom Transport by Réseau Ferré de France, the technology will be

Virgin Trains operates a eet of 52 Pendolino tilting trains on the West Coast Main Line.

Alstom’s TrainTracer system offers practical innovation for rail operators.

“Fantastic job” In a letter to Patrick Kron, Sir Richard Branson, founder and co-shareholder of Virgin Trains, congratulated Alstom on the “fantastic job Alstom’s maintenance team did on our trains.” Sir Richard went on to stress the “enthusiasm and professionalism shown by Alstom personnel”.

deployed gradually over 2,000 kilometres of freight lines. At present, ve different signalling systems are used across a sizable portion of these corridors. In Chile, Santiago’s metro operator placed an order with Alstom Transport in January 2010 for its Urbalis automated train control system. This contract also covers three years of maintenance for the system. Beginning in September 2010, the new system will be deployed with no interruption in service. Alstom has already carried out similar work in Paris, Hong Kong and Beijing. In China, the southern city of Guangzhou, following in the footsteps of Beijing and Shanghai, has selected Urbalis for Line 6 of its fast-growing metro and the new system will begin operations in 2012. Urbalis will reduce the interval between trains to only 109 seconds, increasing the number of passengers carried. Alstom Transport is reinforcing its presence in Egypt, with a double order from Cairo’s metro operator, NAT. Under a consortium with Thales, Alstom will provide the Urbalis 200 train control system, switches and station signalling infrastructures. Under another consortium with Spie and Colas – a subsidiary of Alstom’s majority shareholder Bouygues – Alstom Transport will design and supply electromechanical components for four stations on the line, which will eventually span 33 kilometres, from Cairo

airport to the city centre. Following a contract signed in September 2009, Alstom Transport will provide the city of Bangalore, in southern India, with a signalling system that will also automate train control for its metro.

Innovating maintenance

A strategic sector for rail operators, maintenance demands ever faster, more efficient service. Alstom Transport’s solutions are gaining favour with a growing number of customers – whether their equipment is Alstom-made or not.

In the UK, the company was honoured with two prizes at the Railway Forum Innovation awards in July 2009. Alstom, Tube Lines and London Underground were named “Transport Team/Partnership of the Year”, in recognition of progress achieved on the latter’s Northern Line. Alstom maintains the eet and is responsible for making the trains available for use. Alstom went on to share with Virgin Trains, Network Rail and Bechtel, the prize for project of the year for the improvements on the high speed West Coast Main Line, which requires maximum availability for its trains. Alstom’s contribution helped ensure the success of Virgin’s High Frequency timetable, which requires one Pendolino train to depart every 20 minutes during rush hour on the London– Manchester and London–Birmingham lines, by equipping Virgin’s Pendolino eet with TrainTracer, its innovative preventive maintenance process. Passenger volumes on the West Coast Main Line are up 40% in three years, while maintenance interruptions are down by a third. After signing two four-year maintenance contracts in Spain, in summer 2009 Alstom Transport began maintaining the Madrid–Seville, Cordoba–Malaga and Madrid–Valladolid high speed train lines. The contracts cover upkeep of overhead lines, substations, autotransformer stations and associated systems. In France, the city of Rheims awarded Alstom a


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“Electric traction in all its splendour” Frédéric Hendrick, VP Marketing “Electric traction allows reuse of energy generated during braking that would otherwise be lost. Tomorrow, this energy will be stored in tram-mounted supercapacitors (STEEM), which are charged when vehicles brake or are stopped in stations. Today, this energy is transmitted through overhead wires: if there is no train available on the network to receive and use it, the energy must be re-injected into the power grid. To capitalise on this energy, Alstom has developed a reversible substation called HESOP. Already available for use with 750V lines, HESOP is being studied for 1,500V and 3kV lines.”

WORLD’S BIGGEST BOGIE Testing the AGV on Italy’s Florence-Arezzo-Chiusi line.

6.50 metres long, with 3 wheel shafts and weight of 27 metric tons, this colossal specimen, produced in September by Alstom’s specialised facility in Le Creusot, France, is designed to support locomotives weighing 5,000 metric tons that will pull trains more than a kilometre long in China.

double-decker intercity trains. As Alstom Transport’s largest site on the West Coast, Mare Island will meet all the service needs of the region’s rail operators. At the same time, Alstom has opened another site specialising in spare parts in New Castle, Delaware, on the East Coast. Under a 10-year contract signed in 2006 with Amtrak, the country’s main rail operator, Alstom Transport will refurbish the Acela eet of high speed trains serving the Boston–New York–Philadelphia–Washington DC corridor. 30-year maintenance contract for its Citadis APS, due to be inaugurated in 2011.

Two new service sites

Anticipating future needs for substantial rail network modernisation in the USA, Alstom Transport is expanding its logistics and maintenance operations with two new service sites. The Mare Island site northeast of San Francisco, which replaces the Oakland facility, is less than 100 kilometres from Caltrans, which has chosen Alstom’s teams to refurbish 66

Alstom Transport: Testing the products of tomorrow

Prototype of the new generation of high speed trains, the AGV incorporates a wide range of innovations, coupling the articulated-trainset architecture responsible for the TGV’s success with distributed power technology. After two years of tests at the Czech Republic’s Velim railway test centre, the AGV underwent additional testing on the East European high speed line in France. Soon to be launched under the name “Italo” by Italy’s Nuovo Transporte Viaggiatori (NTV), it is continuing its tests on the Italian network for nal certication. Launched in January 2010, the programme of acceptance and certication testing will continue until July 2010, covering more than 60,000 kilometres. By mid-March, the

FAST FACT The AGV has been tested over more than 60,000 km.

prototype had been tested at a top speed of 300 km/h. Although the AGV can travel at 360 km/h, it will not exceed 330 km/h in commercial operation on the Italian network. Production of AGV trainsets at Alstom Transport’s sites in La Rochelle, France and Savigliano, Italy has already begun. The rst Italo train will leave the factory in autumn 2010 for a new series of tests to complete the certication process before it ofcially enters service in 2011. The new Citadis Dualis tram-train will begin its maiden voyage through the regions of France during 2010. Designed

to run on both city tramway and regional rail networks, the tram-train features power, safety and comfort modications enabling it to travel at 100 km/h in periurban areas, due in part to its compact bogies. Citadis Dualis also takes inspiration from the experience of its predecessor, Regio Citadis, the world’s rst tram-train, which has already demonstrated its prowess in Germany and the Netherlands. Following its public début in Nantes, France last February, Citadis Dualis underwent testing on Germany’s Wildenrath test track. The new tram-trains are expected to enter commercial service in the second half of 2010. Prima II, Alstom Transport’s newest freight locomotive, is undergoing dynamic tests and is expected to be certied and go into service in 2011. Produced on the platform of the same name, the locomotive incorporates IGBT inverter technology – the latest in power electronics. It can operate at four different voltages, crossing borders throughout Europe. The rst customer for this new model is Morocco’s Ofce National de Chemins de Fer (ONCF), which ordered six Prima II locomotives in October 2007 for both freight and passenger service. In late 2009, the rst Prima II locomotives crossed the Mediterranean to be unveiled to the public in Morocco. The new trains will run on the entire Moroccan National Railways network at 120 km/h for freight and 160 km/h for passenger travel.


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TODAY’S COMMITMENT FOR TOMORROW’S WORLD

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ALSTOM OUR

COMMITMENT TO SUSTAINABLE DEVELOPMENT

Alstom takes its responsibilities seriously. It is committed to genuine sustainable development through its products, its services, its human resources policy and its relationship with the world around us.

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FAST FACT Alstom plays an active role in organisations that rally major corporations around the cause of sustainable development.

With expertise in electricity production and rail transport – infrastructure that is essential for human development – Alstom stands at the crossroads where today’s challenges meet tomorrow’s. Facing these challenges will require balancing demographic pressures and the need for economic development against the demands of social well-being and environmental protection. The Group embraces the sustainable development responsibilities that come with being a major international corporation and has made them part of its corporate strategy. Today, Alstom provides solutions that make the most of natural resources, offering alternatives to road and air transport and technologies that eliminate pollutants. And tomorrow, it will help eliminate greenhouse gas emissions. It is actively involved in the life of the communities around its sites, and believes strongly in working with its

employees to create the company of the future. Within Alstom, social responsibility translates into a range of programmes that combine the broader objectives of the Group with the specic goals of its Sectors, while still leaving room for local initiatives. To underscore its commitment, Alstom has joined several major organisations that unite businesses around sustainable development strategies. In 2009, it became a member of the World Business Council for Sustainable Development (WBCSD), which consists of some 190 international companies, and it belongs to the United States Climate Action Partnership (USCAP), an association of businesses and environmental protection organisations that advocates swift implementation of the legislation needed in the United States for the signicant reduction of greenhouse gases. Alstom is also a member of the Alliance for Clean Technology Innovation and the 3C Initiative (Combating Climate Change) and has signed the sustainable development charter of the International Association of Public Transport (UITP). In the European Union, Alstom has championed technologies that boost energy efciency and reduce greenhouse gases, particularly CO2 capture and storage (CCS). Working with partners in industry and nongovernmental organisations, it has helped create a nancing mechanism for large-scale CCS demonstration plants and it supported the decision to nance others as part of Europe’s economic recovery plan. Alstom plans to contribute CCS expertise to two of the major projects chosen by the Commission to date. Alstom has also made Brussels aware of the importance of three powerful weapons against CO2: power plant modernisation; rail transport; and energy-efcient “smart cities”. Finally, Alstom has become a founding member of the Nicolas Hulot Foundation, a French environmental NGO. Through the Foundation, it will share test results and expertise on climate change and other environmental issues and help develop programmes to increase its employees’ awareness of sustainable development.


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OUR COMMITMENT TO OUR EMPLOYEES Alstom has responded to a changing economic, social and technological environment by gearing its human resource policy around nurturing Group culture, preparing for the future and boosting operating efciency.

FAST FACT Alstom would like to see more women in the Group. Today, they account for 16.5% of its workforce.

T

hough they work in 70 different countries, Alstom’s 76,500 employees are united around the three core values – trust, team and action – that drive a shared culture and create a sense of belonging to the Group. The human resource policy is grounded in the key concepts of equal opportunity, respect for diversity, dialogue, knowledge-sharing, health and safety, and effective communication with all partners. At Alstom, equal opportunity

begins with equal pay for equal work among the women and men employed by the Group: employees with identical job descriptions and qualications receive identical pay, regardless of gender. Traditionally a company with a majority of male employees, Alstom is committed to increasing the number of women in the Group. Today, women make up 16.5% of its total workforce, up slightly from 2008/09. In several countries, Alstom actively encourages women students to consider careers in industry and it belongs to a number of organisations dedicated to that goal. In the United States, it holds membership at the Society of Women Engineers and the Society of Women in Engineering at Missouri University of Science and Technology. Alstom also belongs to a French non-governmental organisation, “Elles bougent”, promoting women’s professional advancement which held roundtables and arranged site visits during the year, with 66 female engineers and managers from Alstom participating as mentors. Networks for women have also sprung up inside the Group, including WAVE – Women Adding Value to Engineering – at Alstom Power in Switzerland. With 170 members from 20 different countries, WAVE attracts women to Alstom and provides a network that helps expand their career opportunities within the Group. Under the auspices of the French Ministry of Employment, Alstom Transport signed a Parenting Charter in France in 2008, responding to a changing society by pledging to help improve work-life balance for both men and women in its workforce. In 2009, both of its Sectors in France took steps in this area which included the allocation of budgets to help defray child care costs.

Alstom’s values: team…

ALSTOM AND THE UN’S GLOBAL COMPACT

… trust…

Since 2008, Alstom has been a member of the United Nations Global Compact, which promotes human rights, labour standards, environmental protection and noncorrupt business practices in the global market. In 2009/10, Alstom participated in a working group tasked with developing a code of conduct for investors and companies operating in high risk and conict zones. It encourages its managers to participate in the activities of their local Global Compact network.

… and action.


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La Courneuve near Paris, Alstom reaches out to young people from underprivileged neighbourhoods: 38 were recruited in 2009, including 14 who accepted apprenticeship contracts. In 2010, Alstom Transport France signed a partnership agreement with “Un avenir ensemble”, an association that helps young women from modest backgrounds pursue graduate studies and launch careers.

FAST FACT Alstom’s human relations policy is geared around principles that include equality, diversity and dialogue as well as health and safety.

Harnessing the power of diversity At Alstom, respecting diversity means fostering upward mobility within the Group and it supports this goal through programmes in a number of countries. In Argentina, for example, workers aged 29 to 55 can participate in a training programme that provides the equivalent of a secondary school diploma, paving the way to better qualied jobs, and in France, the Promotion Cadre programme, which prepares Alstom employees for management positions, has seen enrolment increase by 20% in one year. Opening doors to employment for the disadvantaged is another key element of the Group’s diversity policy and Alstom supports programmes of local government and associations that support this goal. Since 2008, it has offered a one-year technical and behavioural training programme for 20 young people aged 15 to 17 at Escola Formare Alstom in Taubaté, Brazil. And at

Diverse nationalities, cultures, and mindsets make for a stronger workforce and Alstom believes strongly in offering the same opportunities to every employee. Two key indicators bear this out: as of 31 March 2010, the ratio of French senior executives had dropped to 37%, down from 52% in 2006, while the number of Asian expatriates rose by 40% in 2008 and another 17% in 2009. Alstom Transport supports this corporate value in France through a newly created Diversity and Equal Opportunity steering committee. Its rst meeting, in December 2009, focused on making the company’s teams more international and on raising the number of women in the workforce. In the USA, Alstom supports the Society of Hispanic Professional Engineers and the National Society of Black Engineers which promote training and access to employment for young engineers from ethnic minorities. In June 2008, Alstom signed a two-year agreement with the International Association of the Exchange of Students for Technical Experience to expand international exchange among students, universities and businesses. Dialogue and employee commitment Alstom believes in keeping channels open to employees – listening to them, sharing information and negotiating collective agreements with their representatives. In a

FAST FACT

A survey conducted in 20 countries found that 72% of employees are covered by national or companywide employment agreements.

powerful testament to the vitality of the Group’s dialogue with employees, the many local agreements signed by Alstom reect the diversity of employee priorities across countries and cultures. Alstom’s management stays in constant contact with the European Works Forum (EWF) and in 2009/10 with two dedicated working groups who addressed the reorganisation issues raised by the merger of Power Systems and Power Service and the impact of changes in Transport’s structure and workload. Beginning in the summer of 2009, EWF began addressing the complex issue of Alstom and Schneider Electric’s acquisition of Areva’s Transmission and Distribution (T&D) business. The Forum held eleven special committee meetings, three plenary sessions and six working group meetings. In general, Alstom supports all forms of dialogue and any initiative that fosters a

culture based on employee involvement in the company including information meetings and managers’ initiatives to enhance communication with employees. One good example is Power’s Cafezinhos, which provide an opportunity to explain goals, answer questions and exchange ideas for improvement. In 2009/10, over one thousand employees participated in 130 Cafezinhos worldwide. Toward the same end, Alstom Power conducts employee satisfaction surveys within its various entities at regular intervals, helping managers to identify employee expectations and explain challenges facing the business. Managers also use survey results to understand employee motivation. In one case, results from a satisfaction survey of Power Hydro’s 7,000 employees prompted internal debate among managers and employee representatives, ultimately resulting in a series of initiatives ranging from lunchtime conferences with management to installation of an employee tness centre at the Sorel-Tracy site (Canada). Looking ahead As a high-tech corporation that manages large, complex projects, Alstom cannot succeed without highly skilled, competent and motivated employees. Moving outside conventional recruitment channels, Alstom has stepped up its presence on university campuses to raise its prole among students, identify the best and brightest young talent and create an incubator for future employees. Although the Group recruited fewer young graduates this year, it continued to strengthen its ties to universities and institutes of technology in over 35 countries, including China, the UK, India, Poland, France and the USA. These partnerships included funding scholarships at Wuhan’s Huazhong University,

EMPLOYING HANDICAPPED PEOPLE

INNOVATIVE EMPLOYEE RELATIONS BOARD INTEGRATES AREVA T&D

Under Alstom’s Groupwide human resources policy, the company works actively to bring the disabled into the workforce, complying with applicable legislation in the countries where it does business. In just one example, work clothes for Power’s employees in China have been made for many years by Hong Kong’s Factory for the Blind.

A temporary employee relations board will monitor the process of integrating T&D into Schneider’s future Energy unit and Alstom’s new transmission business line. The temporary board will also facilitate information sharing among the leaders of the three businesses and resolve any problems arising from this complex transaction. The necessary protocol, prepared jointly with

Women make up 16.5% of Alstom’s workforce.

the European Metalworkers’ Federation (EMF), was signed in March 2010 by Areva, Schneider Electric and Alstom and their works councils and the temporary board held its rst two meetings in March and April 2010.


SUSTAINABLE DEVELOPMENT

FAST FACT Alstom University offers 80 different programmes in seven languages.

ALSTOM

sponsoring special competitions for students in China, Germany and Canada, and participating in curricula at elite universities in France. As regards recruitment, Alstom has developed human resource programmes in key business areas to ensure that new employees are successfully integrated, trained and supervised. These include Alstom Connection, which familiarises new employees with the Group and its approach to social responsibility, and India’s 777 programme, which helps identify potential employee integration problems. Alstom does not discriminate based on age: during nancial year 09/10, it hired 590 individuals over age 45, or 13% of new employees. Alstom believes in giving its employees the widest possible range of opportunities for

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

personal growth through career development and internal mobility and its goal is to provide an annual performance review to all employees. Over 37,000 employees – the majority of the Group’s engineers and managers – received reviews in 2009/10, a 60% increase over the previous year. Financial year 2009/10 also brought expansion of the Group’s skills chart, which now includes an Environment, Health and Safety (EHS) function. Internal mobility gives Alstom’s units the skilled personnel they need and helps employees advance their career goals. Last year, it met its initial goal of lling 60% of senior executive positions with internal candidates and this year exceeded its target with a rate of 70%. At local level, Alstom has launched customised programmes such as Poland’s Power Lider, a two-year project offering a total of 16 different training modules covering all aspects of management. Launched in January 2009, the programme is designed both to hone managerial skills and to offer career development opportunities within the Group. In all, 252 employees – including 51 women – have participated in the programme, which was funded in part by the European Union. Employee training keeps Alstom competitive and plays a critical role in personal growth for its personnel, more than two thirds of whom have taken training courses. In addition to the programmes offered by the Group’s Sectors, Alstom University designs and teaches courses on general and function-specic skills common to all its operations, offering a total of 80 programmes in seven languages. Alstom University has grown to ve regional campuses in Asia (China, India), Europe (Switzerland) and the Americas (Brazil and USA). In nancial year 2009/10, nearly 6,300 employees attended 430 training

66 /// 67

sessions. Although the University continues to grow through e-learning modules delivered via a new interactive intranet platform, it is also offering a new series of face-to-face training sessions.

70% OF SENIOR EXECUTIVE openings were lled internally in 2009.

Boosting operating efciency Alstom rewards its employees for their knowledge and performance, ensures that compensation is consistent across business lines and borders and maintains the Group’s competitiveness as an employer. It also offers insurance benets: its goal is to provide life and disability cover for all employees, wherever it operates. Around 97%* of Alstom’s employees are now covered by accidental death insurance benefit and for 78%* of the insured, benets correspond to at least one year’s salary (6% more than last year). Owing to the risk of serious accidents in

both manufacturing and construction, workplace safety has been a priority for the Group for many years. Its Environment, Health and Safety (EHS) policy relies on active involvement at all levels of the corporate hierarchy to promote good habits and its Zero Serious Accident programme, launched in 2008 for both Alstom employees and subcontractor staff, has been an important factor in reducing workplace accidents. By February 2009, Alstom had reached its original goal of 2.5 for December 2010 and is now working to cut its injury frequency rate – dened as the number of accidents with time lost to injury per million hours worked – to less than one by December 2015. These encouraging results are due in part to the work of Alstom University and other training programmes, which trained nearly 1,700 managers during the course of 2008/09 and 650 in 2009/10. Alstom’s Sectors are also developing EHS training programmes to meet specic needs: “One day at time” at Transport and “EHS All Together!” at Power Thermal Systems. These programmes not only identify risks but also focus on human behaviours that threaten safety in the workplace. Finally, Alstom uses a single employee information management system to ensure that HR policies are applied across the board and to rationalise the various systems used within the Group. Employees are encouraged to work directly within the system to update their personal data, experience and skills, and so far, around 50,000 of them have taken advantage of this resource. To make human resources more efficient, payroll, personnel management and other services common to our Sectors and business units are handled locally. * In a survey of 90% of Alstom’s workforce

TAPPING INTO COMMUNITY NETWORKS Leveraging the momentum of the social networks that are springing up rapidly throughout the Group, Alstom Collaborative Way (ACW) encourages employees to share know-how, ideas and best practices across Sectors, businesses and borders through increasingly popular collaborative tools such as video and web conferencing, document-sharing systems, wikis and blogs. Because they provide a forum for informal sharing where learning is the primary goal, Alstom’s community networks – which already include hundreds of members from a wide variety

of corporate functions – are increasingly critical to knowledge management. The networks are particularly valuable to the management of Sectors, functions and businesses who are constantly looking for efcient new ways to meet demand for knowledgemanagement and innovation.

Alstom relies increasingly on community networking.

Alstom’s Zero Serious Accident programme has reduced the frequency and gravity of workplace accidents.


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OUR COMMITMENT TO THE ENVIRONMENT

and reporting their data for central analysis at Group level. Based on Alstom’s EHS Roadmap, a standard set of criteria that is reviewed annually, assessments cover each unit’s environmental management system, along with various issues such as water, soil and air pollution, waste reduction and recycling, site security, and workplace health and safety. In 2009, Alstom adapted an existing  nancial reporting tool for use in environmental reporting, rede ning the system and allowing for tighter data control and better procedures.

Alstom makes a signicant contribution to environmental protection through the technologies offered to its customers – but it has also mounted an active campaign to limit its environmental impact.

FAST FACT By 2012, every Alstom facility employing more than 200 people must be ISO 14001certied.

Each site is responsible for assessing its own environmental performance.

W

hile the Group determines overall environmental strategy and coordinates cross-functional programmes, the Sectors set their own priorities and launch related action plans. 181 Environment, Health and Safety (EHS) units tailor these plans to their individual operations, assessing their own environmental performance

Since 2006, Alstom has collected data on energy consumption for all of its facilities, complying with European targets for greenhouse gas emissions (GGE). Its primary energy sources are gas for heating and air conditioning, and electricity for lighting and manufacturing processes. By investing in upgrades, it has replaced oilred equipment with other models that run on natural gas, signicantly reducing emissions of CO2, sulphur dioxide and nitrogen oxide. Reducing the Group’s impact through local action plans Two years ago, Alstom resolved to cut energy intensity and greenhouse gas emissions by 20% by the year 2015. In 2009, nearly 40 sites began implementing action plans and the effort has paid off. Energy savings have been designed into the new facilities (Wuhan in China, Massy in France, Chattanooga in the USA, and Durgarpur in India), a lighting plan has been implemented (Alstom Transport Morden in the UK) and many of the Group’s servers have been virtualised (52% compared with the world average of 19%). These initiatives are part

In 2008, Alstom resolved to make its operations 20% less energy-intensive by the year 2015.


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CO2 INTENSITY

the company’s carbon footprint in 2009. The programme includes mandatory paper recycling and targets for reducing energy consumption by 3,000 kW/h, water consumption by 230,000 litres and waste production by 22 cubic metres for the year. An internal communication campaign has been launched in tandem with this initiative.

(metric tonnes of CO2 / €m sales) 12 rolling months to December 2009 Achieved

32

Goal

30 28

A dedicated page on Alstom’s intranet site enhances employees’ awareness of key environmental issues, including demographic trends, manufacturing output, consumption of natural resources and their impact on the environment. In December 2009, the Copenhagen conference on global warming prompted several initiatives to explain the CO2 problem to employees and present possible solutions. A special Copenhagen blog followed developments in the talks.

26 24 Baseline

of an overall strategy that has seen the Group’s emissions curve decline regularly.

FAST FACT

Alstom’s goal is to recycle 80% of waste by 2015.

Reducing water consumption and improving waste management During nancial year 2009/10, the Group also committed to new water-saving measures. By 2015, units in areas subject to local restrictions will cut water consumption by 20% based on 2009 levels. The sites using the most water have already begun implementing their own action plans, cutting water consumption by 12% relative to 2008/09 levels.

June 08 Dec. 08 June 09 Dec. 09

March 2015

Since 2008, Alstom has been publishing data on waste management Groupwide. In nancial year 2009/10, it committed to a double target, pledging both to generate less waste and to recycle 80% of it by 2015. Each Sector must submit a plan for reaching this target by July 2010. Fighting to eradicate asbestos To protect against health risks posed by asbestos, Alstom has banned the material at all sites operated by the Group. Over and above the Groupwide effort to eradicate asbestos, one Alstom business developed a specic asbestos training module on its own initiative, stepping up prevention within its supply chain and qualifying suppliers whose products are guaranteed to be asbestos-free. The pilot was so successful that Alstom is now implementing it Groupwide and it is already being implemented in China, India, Malaysia, France, South Africa and Switzerland. The programme teaches quality auditors to inspect

Alstom’s plant in Birr, Switzerland specialises in manufacturing rotors for gas turbines.

20% reduction in energy intensity and water consumption by 2015.

suppliers, providing them with the tools they need to recognise the presence of asbestos, ask the right questions during inspections and address potential problems. Bringing employees on board Sorting and collecting waste, reducing paper consumption, raising employee awareness and other initiatives also contribute to offsetting the environmental impact of the Group’s sites. In Hungary, Alstom launched an employee awareness programme aimed at reducing

Employees at Transport’s Saint-Ouen site near Paris have formed a “green circle” group to improve the site’s operations based on suggestions submitted by the facility’s 2,100 employees. So far, proposals have included a study on ride-sharing and a green guide on the processing of waste after it is sorted. Finally, in Sweden Alstom has set its sights on reducing CO2-emitting forms of transport: 40% of travel must be by train; 50% of all vehicles rented must be EcoCars, which run on E85 fuel consisting of 85% ethanol; and multimedia technology must be used for conferences to limit travel. The effort has paid off: use of trains and clean vehicles has exceeded recommendations, and more ambitious targets have now been set for 2010, particularly for EcoCars.

BIRR WINS DOUBLE HONOURS

CHATTANOOGA: ALSTOM’S FIRST LEED-CERTIFIED FACILITY

In 2009, the Swiss Foundation for Nature and the Economy honoured our Birr rotor manufacturing facility for maintaining its campus close to its natural state. For the past 10 years, Birr has refrained from using biocides and fertilisers, and native species have replaced non-native competitors. Switzerland’s Energy for the Economy Agency (AEnEC) has also presented Birr with a certicate recognizing its efforts to reduce CO2. Since 2001, the facility has cut CO2 emissions by 10%.

At the Chattanooga site in Tennessee, USA, Alstom has built new facilities and recongured existing ones with an eye toward Leadership in Energy and Environmental Design (LEED) certication. Under this international programme, a third party can verify that a building’s design and construction are genuinely environmentally friendly. Energy savings, efcient water use, reduced CO2 The new Chattanooga facility, a $280 M investment

emissions and internal environment quality are the key criteria in the certication procedure. Chattanooga will be Alstom’s rst LEED site.


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OUR COMMITMENT TO LOCAL COMMUNITIES

a nine-month apprenticeship. Choosing local suppliers also stimulates economic growth. From China to Australia Managing the impact of restructuring is another way of being a responsible member of the community. In financial year 2009/10, the declining market and its corollaries – a drop in business and workload – required Alstom to make targeted workforce adjustments in several European countries (Italy, Czech Republic, Germany, Romania) and also in the USA and Brazil. In each case, Alstom made every effort to limit the impact of these measures by outplacing the affected employees, transferring them to other operations, reducing hours, or arranging for early retirements.

Alstom takes an active role in local life wherever it does business, encouraging initiatives that benet the surrounding communities.

FAST FACT Alstom is involved in a variety of efforts aimed at raising the standard of living in local communities.

B

eing a part of the local community takes many different forms. Within the scope of Alstom’s own operations, commitment to the community starts with driving growth in the local economy. Consider one example: when Alstom and Bardella built a hydroelectric equipment factory in Porto Velho in north-eastern Brazil, where there is no industry, the Group hired 350 young people from the rural community after

Making life better in local communities where Alstom does business – often with the help of employee volunteers – is yet another form of commitment. These initiatives, totalling more than €1.2 million in 2009, essentially take the form of donations to charitable and humanitarian causes, support for cultural and sports events and targeted aid in the event of natural disasters. Alstom’s contributions are helping to educate children in Aquila, Italy; in Sorel-Tracy, Canada; and among the Yi and Miao ethnic minorities in China. They have also funded healthcare in the USA and Croatia. And in Australia too, where measures have been taken to secure the future of the Tasmanian Devil, a marsupial suffering from transmissible cancer, thus protecting a symbol of natural diversity…

THE ALSTOM FOUNDATION

Alstom is helping to restore Brazil’s virgin Atlantic forest.

When it created the Alstom Foundation in November 2007, Alstom committed to increasing its involvement in local communities, funding targeted projects for environmental and social development and working with local partners to meet local needs. In June 2009, the Foundation funded 13 proposals submitted and championed by the Group’s employees, up from 11 the year before. Some of the Foundation’s projects promote economic development – by training 100 Sudanese women in farming techniques, for example, or by

replenishing Indian springs that threatened to go dry. Others provide social support, building modern wells and planting trees in Mali, raising environmental awareness in a Warao Indian village in Venezuela, planting 100,000 trees in Thailand or helping to restore a portion of Brazil’s virgin Atlantic forest. The Alstom Foundation also steps in to help after disasters, especially when they strike areas where the Group or its subcontractors do business.

The Alstom Foundation supports environmental education programmes in South Africa.


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A

OUR COMMITMENT TO FUTURE GENERATIONS

s a fundamental aspect of its growth strategy, Alstom has focused considerable efforts in the area of innovation over the last several years, with investments in Research & Development amounting to €600 million in 2009/10. More than 11,000 engineers are currently working in some forty laboratories, R&D centres and in-house design and engineering departments. Their ndings are taken up by the Group’s Innovation Management System, an internal network whose aim is to encourage the crossfertilisation of ideas, best practices and expertise between staff members and to take part in major Groupwide projects to move technology forward.

Preparing for tomorrow’s trends in infrastructure markets, technologies, organisation methods and employee expectations by studying them today.

FAST FACT

Alstom is preparing for the future by investing heavily in research and development.

Investing in research Alstom ensures that its own approaches and procedures are kept up to date thanks to its strong connections with international organisations, universities, national research centres, consultancy rms and technology start-ups. For example, the Group participates in the research programmes of the International Energy Agency (IEA), in particular those focusing on greenhouse gases and clean coal, and takes part in the Carbon Sequestration Leadership Forum (CSLF), an international initiative to nd ways to combat climate change. Moreover,

Alstom is a founding member of the Global Carbon Capture and Storage Institute (GCCSI), an initiative launched by the Australian government, and participates in programmes sponsored by the US Department of Energy relating to the development of leading-edge technologies for electricity generation. Europe-wide involvement Very active on the European level, Alstom is an inuential member of the European Technology Platform for Zero Emission Fossil Fuel Power Plants (ZEP), serving as vicechair of this network’s Advisory Council. Together with other industry players, scientists, NGOs and government agencies, Alstom is helping to shape a sustainable energy future for the European Union. Alstom is involved in a growing number of other EU programmes, notably in Germany, the UK and Spain and is also working very closely with research centres in Switzerland, Russia and China. In France, Alstom is an active member of seven competitiveness clusters, in association with other companies, research centres and educational institutions, focusing on a variety of issues, ranging from embedded rail systems to power electronics, and from smart grids to microtechnics. In addition, Alstom’s R&D teams participate in over a hundred projects alongside university researchers, underscoring the Group’s commitment to furthering partnerships with the world’s leading universities: the prestigious Massachusetts Institute of Technology, Tsinghua University in Beijing, Bauman Moscow State Technical University, Cambridge University, Ecole Polytechnique Fédérale de Lausanne, Ecole des Mines de Paris, Politecnico di Milano, Technische Universität Darmstadt in Germany and Chalmers in Sweden, just to name a few.

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CREATIVITY REWARDED

Alstom Power’s laboratory in Grenoble, France specialises in hydropower.

Encouraging creativity and supporting collective projects are essential ingredients in Alstom’s commitment to future generations. The Alstom Innovation Awards, launched in 2008 by the Group’s Innovation Board, continue to meet with resounding success. The evaluation criteria are simple: “it’s new” and “it works”. In 2009, 220 proposals were submitted by more than 750 applicants. The jury selected six of these as particularly innovative: a method for cleaning gas turbine components that increases their power output; the TrainTracer, a remote tracking

device for preventive maintenance of rolling stock offered to rail operators; a sophisticated software tool for controlling large gas turbines; HESOP technology, which optimises energy consumption by rail operators through the recovery and reuse of braking energy; and nally, a new manufacturing process resulting in a reduction in the volume of raw materials consumed.

2009

Alstom Transport’s laboratory in Charleroi, Belgium specialises in signalling technology

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ALSTOM

Illustration : Serge Bloch

SUSTAINABLE DEVELOPMENT

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FINANCIAL RESULTS

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

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FINANCIAL RESULTS CONSOLIDATED INCOME STATEMENTS

CONSOLIDATED BALANCE SHEETS

Year ended to 31 March (in € million)

SALES Of which products Of which services Cost of sales Research and development expenses Selling expenses Administrative expenses INCOME FROM OPERATIONS Other income Other expense EARNINGS BEFORE INTEREST AND TAXES Financial income Financial expense PRE-TAX INCOME Income tax charge Share in net income of equity investments NET PROFIT Attributable to: - Equity holders of the parent - Minority interests EARNINGS PER SHARE (IN €) - Basic earnings per share - Diluted earnings per share

Year ended to 31 March (in € million)

2010

2009

2008

19,650 14,095 5,555

18,739 13,787 4,952 (15,225) (586) (666) (726) 1,536 44 (137) 1,443 122 (101) 1,464 (373) 27

16,908 12,433 4,475 (13,761) (554) (619) (679) 1,295 26 (100) 1,221 115 (184) 1,152 (291) 1

1,118 1,109 9

862 852 10

2009 3.87 3.81

2008 3.01 2.95

(15,982) (558) (669) (662) 1,779

8 (158) 1,629

59 (101) 1,587

(385) 3 1,205

1,217 (12) 2010

4.21 4.18

Total non-current assets Inventories Construction contracts in progress, assets Trade receivables Other current operating assets Marketable securities and other current nancial assets Cash and cash equivalents

Total current assets TOTAL ASSETS

Year ended to 31 March (in € million)

2010

2009

2008

1,284 14 (1,475) 12 33 175 128 -

862 (162) 559 (11) 27 (12) 116 1,147 904 2,051

239 (54) 866 90 38 (210) (1) 64 904 (64) 904

171 2,051 2,222

2009

2008

3,904 1,453 1,958 66 535 982 8,898 3,033 3,637 3,446 2,578 35 4,351 17,080

3,886 1,397 1,735 66 529 1,012

3,767 1,322 1,501 62 635 1,070

8,625

8,357

2,876 3,139 3,873 2,773 15 2,943

2,316 2,807 3,538 2,042 170 2,115

15,619

12,988

25,978

24,244

21,345

4,091

2,852

2,210

EQUITY AND LIABILITIES Equity attributable to the equity holders of the parent Minority interests

Total equity Non-current provisions Accrued pension and other employee benets

10

32

35

4,101

2,884

2,245

460

444

503

943

970

818

1,845

65

664

Non-current obligations under nance leases

527

543

644

Deferred taxes

113

70

3

3,888

2,092

2,632

1,181

1,226

1,258

196

706

576

46

42

43

Non-current borrowings

NET CASH VARIATION ANALYSIS (*)

Changes in cash and cash equivalents Changes in marketable securities and other current nancial assets Changes in bonds and notes Changes in current and non-current borrowings Changes in obligations under nance leases Net debt of acquired entities at acquisition date Exercise of put option by Bouygues Net effect of exchange rate variations and other Decrease in net debt Increase in net cash NET DEBT AT THE BEGINNING OF THE PERIOD NET DEBT AT THE END OF THE PERIOD NET CASH AT THE BEGINNING OF THE PERIOD NET CASH AT THE END OF THE PERIOD

ASSETS Goodwill Intangible assets Property, plant and equipment Associates and other investments Other non-current assets Deferred taxes

2010

Total non-current liabilities Current provisions Current borrowings Current obligations under nance leases Construction contracts in progress, liabilities

10,169

10,581

8,931

Trade payables

3,613

3,866

3,132

Other current operating liabilities

2,784

2,847

2,528

17,989

19,268

16,468

25,978

24,244

21,345

Total current liabilities TOTAL EQUITY AND LIABILITIES

(*) The net cash is dened as cash and cash equivalents, marketable securities and other current nancial assets and non-current nancial assets directly associated to liabilities included in nancial debt, less nancial debt.


FINANCIAL RESULTS

ALSTOM

ACTIVITY AND SUSTAINABLE DEVELOPMENT REPORT

CONTACTS

CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended to 31 March (in € million)

NET PROFIT

2010

2009

2008

1,205

1,118

862

Depreciation, amortisation and expense arising from share-based payments

419

439

385

Cash ow adjustment in respect of post-employment and other long-term dened employee benets

(41)

(156)

(114)

(6)

4

(34)

3

(24)

(1)

186

200

97

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

1,766

1,581

1,195

CHANGES IN WORKING CAPITAL

(960)

555

897

806

2,136

2,092

58

14

41

(679)

(671)

(498)

Net (gains)/losses on disposals of assets Share in net income of associates (net of dividends received) Deferred taxes charged to income statement

NET CASH PROVIDED BY OPERATING ACTIVITIES Proceeds from disposals of tangible and intangible assets Capital expenditure (including capitalised R&D costs) Decrease in other non-current assets Acquisitions of businesses, net of cash acquired

22

4

38

(12)

(40)

(425)

Disposals of businesses, net of net cash sold

(25)

36

(52)

NET CASH USED IN INVESTING ACTIVITIES

(636)

(657)

(896)

65

29

100

Capital increase

(34)

-

-

Dividends paid including payments to minorities

(333)

(233)

(117)

Issuance of bonds & notes

1,750

-

-

Repayment of bonds & notes issued

(866)

Treasury shares

(275)

(559)

Changes in current and non-current borrowings

(12)

11

(90)

Changes in obligations under nance leases

(33)

(27)

(38)

Changes in marketable securities and other current

(14)

162

54

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

1,114

(617)

(957)

NET INCREASE IN CASH AND CASH EQUIVALENTS

1,284

862

239

Cash and cash equivalents at the beginning of the period

2,943

2,115

1,907

135

(27)

(33)

nancial assets and liabilities

Net effect of exchange rate variations

(11)

(7)

2

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

4,351

2,943

2,115

Income tax paid

(191)

(192)

(140)

(29)

22

(58)

Other changes

Net of interest received and interest paid

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INVESTORS RELATIONS investor.relations@chq.alstom. com Toll free number from France: Tel.: 0 800 509 051 From outside France: Tel. +33 (0)1 41 33 08 58 Fax: + 33 (0)1 41 49 79 25 HUMAN RESOURCES www.careers.alstom.com WORLDWIDE The contact information for Alstom ofces around the world can be found in the “Worldwide” pages of www.alstom.com


CTIB-COC-000946

CORPO/BGENE/09-10AR/eng/COM/06.10/FR/7186 © Alstom 2010. ALSTOM, the ALSTOM logo and any alternative version thereof are trademarks and service marks of ALSTOM. The other names mentioned, registered or not, are the property of their respective companies. The technical and other data contained in this document is provided for information only. ALSTOM reserves the right to revise or change this data at any time without further notice. Photo credits: Alstom : J.-J. d’Angelo, A. Février, V. Baillas, P. Bony, F. Christophorides, D. Félix, Interlinks Image/D. Félix, E. Lamperti/Staub, P. Sautelet, C. Sasso ; Éric Flogny ; Getty Images ; LRCA ; Virgin Trains, DR. Illustrations: Heather Gatley. Production: Angie. Printing: SPEI. This report is printed on recycled, wood-free paper approved by the Forest Stewardship Council (FSC), an international organisation promoting sustainable forestry. Inks and coatings are vegetable-based. The printer is certied under the Imprim’vert program, as well as by the FSC and under the Programme for the Endorsement of Forest Certication Schemes.

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www.alstom.com


Alstom - Annual Report 2009