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Alstom want loan acquisitions to accelerate growth

Alstom want loan acquisitions to accelerate growth

Alstom is ready to make acquisitions to accelerate growth strongly oriented towards signaling and rail services to international, said Wednesday its CEO, Henri Poupart-Lafarge.

The French industrial group refocused on railway equipment after the sale of its energy business to General Electric, has already publicly expressed interest in the signaling equipment manufacturer of aerospace and defense Thales.

Following the merger of the transportation activities of GE and Alstom and the redemption of the Italian specialist in railway signaling Ansaldo STS by the Japanese Hitachi, industry consolidation will continue, analysts said.

"We want to boost our strategy through acquisitions," said Henri Poupart-Lafarge at an analysts day in Villeurbanne (Rhône), noting that the group had the financial capacity of its ambitions.

"This is not a required element of the strategy, but it would be an accelerator and, in some cases, a way to change the game level," said the leader, who took over in late January at the head Patrick Kron the new Alstom.

Henri Poupart-Lafarge however, said no acquisition was in preparation for the time and that the group had mainly on organic growth, expected at an annual rate of 5% by 2020.

Alstom said Tuesday night aimed an adjusted operating margin of about 7% in 2020, an improvement of two points over the first half 2015-2016.

The group, which Bouygues holds 29%, will release on May 11 its results for the full fiscal year, which ends on 31 March.

Capacities "adapted" in Europe

The action Alstom lost 15% since the beginning of the year, almost five times more than the SBF 120 index, but analysts say this group now "pure player" undervalued stock exchange.

Alstom should benefit from major projects such as railways in South Africa, the biggest project in the history of the group that is the subject of a four billion euros in 2013, an order for 800 locomotives India announced in November 2015 or the future of the Grand Paris Express network.

The group wants to continue to expand internationally and said its capacity in Europe, which remains its biggest market, will be "adjusted according to the load." In an interview with Echos, Henri Poupart-Lafarge gave the example of the declining rate of production of the site reichshoffen (Alsace) after the summer, which will lead to the temporary departure.

Half of Alstom's order book at 30 September 2015 comes from Europe, against 31% in the Middle East-Africa region, 12% in America and 7% in Asia Pacific.

Alstom, whose main rival is Canada's Bombardier and Germany's Siemens, also faces the competition of Chinese groups (CRRC), South Korean and Russian, and in Europe, companies such as Spain's CAF.

The group, which employs 32,000 people in 60 countries, achieved sales of € 6.2 billion in 2014-2015.

By 2020, Alstom will cover 47% to 60% the share of its sales in the signaling systems and rail services, with higher margins than the trains of the group, best known in France for the TGV.

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Master of Economics, University of Harvard, worked as an analyst in a few large companies and specializes in many countries. Currently owned by a large company that conducts assessment of investment attractiveness in the various countries of the world.