Good morning, ladies and gentlemen. Welcome to our conference call on order and sales for the first quarters of our fiscal year 2021/2022. Moving to the third slide, for the first quarters of 2021/2022, we recorded a EUR 6.4 billion order intake. This exceptional order intake benefits from three contracts above EUR 1 billion in Denmark, Mexico, and France. It demonstrates clearly the very positive momentum of the rail market, notably in Europe, where we concentrate more than 70% of our order intake this quarters. Also proves as well our commercial strength based on our Alstom expanded profile. If we look at our product lines, rolling stock orders intake at EUR 3.4 billion, very solid with value orders both in urban and regional. Turnkey this quarters dynamic with three contracts totaling EUR 1.4 billion, one in Athens, Mexico, and Miami.
Services order intake at EUR 1.1 billion was sound with maintenance contracts, also train operations and maintenance services. Last, signalling at EUR 0.5 billion, mainly coming from onboard signalling contracts. This dynamic order intake leads us to a consolidated backlog of close to EUR 77 billion. Let's move to page four with zooming on some orders that we have been awarded this quarters, as you see on these nice pictures. Starting with Denmark, where we won the largest railway contract in Denmark history. First firm orders of 100 Coradia Stream regional trains, as well as 15 years of full- service maintenance agreements for a total value of EUR 1.4 billion, this as part of a framework agreement with DSB valued at a total of EUR 2.6 billion.
In Germany, we are paving the way for automated train operation in the highly frequented Stuttgart network. We will equip 118 regional trains with signalling technology. In Americas, with our new portfolio, we have been awarding new signalling technologies for automated people movers system in Miami. We will provide 10 years of operations and maintenance services for the Skyway automated people movers system at Houston Airport. We'll also supply 60 new Flexity streetcars for the city of Toronto. Last but not least, we'll supply the Tren Maya, a flagship train for Mexico, built in Mexico, for a total of EUR 1 billion by combining the strength of our platform, X'Trapolis from Alstom legacy, components portfolio from ex-Bombardier, and our site in Mexico in Sahagún. Looking ahead, while this quarters was exceptional, we do see a very robust tender pipeline in all regions. Let's move to page five.
Turning to the sales. This quarter, our sales reached EUR 3.7 billion, which is 33% growth compared to last year Q1, which was impacted, as you know, by COVID. Our sales in rolling stock is reaching EUR 2.2 billion and shows a progressive ramp-up aligned with our production step-up. In services at EUR 0.8 billion, we have a continued positive level of activities. Signalling sales at EUR 0.5 billion evidence a sound level of execution. Finally, on systems at EUR 0.2 billion, we are continuing to ramp down as expected, driven by Middle East system projects nearing completion. All in, as you see, a solid sales execution for this quarter. Just to wrap up on the key messages for our Q1 2021/2022, excellent commercial momentum this quarter, driven by a few large orders and very dynamic market, leading to a very solid backlog of EUR 77 billion.
Sales consistent with the priorities we communicated during our CMD, with H1 dedicated to project stabilization and production ramp-up in order to serve our customers. Overall, we do confirm today our outlook given during the Capital Markets Day two weeks ago. Thank you for your attention, and I suggest we switch now to the Q&A session.
Thank you much, sir. Ladies and gentlemen, if you wish to ask any question during today's presentation, please press star one item on keypad. Once again, if you wish to ask a question, please press star one. We'll pause just for a moment to settle the queue. Today's first question is coming from Iris Zheng, calling in from Credit Suisse. Please go ahead.
Hi. Good morning, Laurent, and thank you for taking my question. I've got two from my side, if possible. Firstly, it's on the rolling stock sales, which have been very solid for the quarter at EUR 2.2 billion. You've mentioned that it's helped by the ramp-up of production. Could you maybe unpackage this number a bit for us, maybe how much of it is driven by the ramp-up on the Alstom side, and how much is from the BT side? I do appreciate that it's now a consolidated company, so that maybe you do not wish to distinguish between the two. Just given that the free cash flow burn this year is going to be very associate to the industrial ramp-up of BT.
I just hope to kind of have a better understanding of how much this rolling stock sales is maybe driven by the fact that the industrial output or manufacturing at BT side is being ramped up, and also how much of it is from Alstom's side. Secondly, from my side is on the order intake or customers' appetite when it comes to the service attachment for the rolling stock contracts, because obviously you've got the Danish contracts with service parts attached to it. Would like to know now versus two to three years ago, how do you see the customers' appetite has changed when it comes to having the rolling stock plus service contract? Also, what are the progresses Alstom have made in order to get more traction with the customers when it comes to the service part of the orders and new business? Thank you.
Yes. Thank you very much, Iris, for your two questions. On your first one, as you rightly point out, we are not splitting the sales between ex-AT and ex-BT, so it will be difficult for me to provide you a lot of precision on this subject. What I can tell you is that we definitely see a progressive ramp-up of our rolling stock activities. As we indicated, we are investing today to prepare the future growth in the secnd half, definitely. To give you some color, we are definitely in ramp-up mode in the U.K. and in France, in India as well, in the U.S. These are, I would say, a few geographies where we are definitely ramping up. Again, there is in this a mix of ex-AT and ex-BT projects.
On your second question, Iris, which is a very good one, indeed, we have more and more as a trend, customers which are eager to have a kind of one-stop shop commitment from the OEM, i.e., rolling stock plus services on a life cycle cost perspective. You have seen that indeed for DSB, for Tren Maya, and for many examples. If I look at market trend, we see more and more of these kind of contracts where customers are asking a bundle commitment, rolling stock plus services for a very long period of time. We are talking 15, 20, 25 years sometimes. On that, as Alstom, we are bringing, I would say, the knowledge of the design of the OEM.
We are bringing on the table everything which is as well digital services, predictive maintenance with our HealthHub platform, which is giving us a competitive edge versus our competitors. We move to the next question.
Yes, sir. Thank you. Ladies and gentlemen, could you also please limit yourselves to one question to allow everybody to pose questions during today's call? Thank you. We'll now proceed to Akash Gupta calling in from JP Morgan. Please go ahead. Your line is open. Thank you.
Yes. Hi, good morning, Laurent. My one question is on Bombardier. Can you update us on the provision side and how much you are comfortable with the provisions that we have taken at the full year results, or do you see there may be more need for provisions going forward? Thank you.
Good morning, Akash. Thanks for your question. Akash, we do confirm the level of provision that has been booked end of March 2021. There is, I would say, no reason to update on these subjects. If I'll be a bit more specific on the project stabilization, we are making meaningful progress on a number of subjects. Talking about, for instance, BART in the U.S., SBB with reliability growth or Aventra in Derby, where we are developing and ramping up our production. All in, I would say we are confident on our project stabilization path. We told that it will take time, we are on these trajectories, there is no reason to update the provision which stands firm as we booked in March 2021.
Thank you, sir. We'll now go to Gael de-Bray, calling us from Deutsche Bank. Please go ahead.
Well, thanks very much. Good morning, everybody. Good morning, Laurent. The first question I have is on the relationship between the very strong order performance you had in Q1 and obviously the very strong negative free cash flow you guided for in the first half of this year. Obviously, the exceptional order intake you've just reported includes several large orders. Could you comment on the absence of major down payments in relation to these large orders? I wonder if there has been any sort of structural change to the financing terms of the contract with customers perhaps less willing to pay in advance, given their own cash constraints related to the pandemic.
Good morning, Gael. Thanks for your question. It helps to clarify this important point, indeed. I want to be very clear on this. There is absolutely no change of pattern whatsoever when it comes to the down payment in terms of customer behaviors. There is, of course, contract by contract, some contracts which have better down payment, some others which have a lower down payment. But on average, absolutely no change in the overall patterns of down payments. If I look at our full-year perspective, we are definitely in the type of average range of down payment that we had in the past. Stability on this and absolutely no sign, Gael, of change of behaviors on this subject despite the pandemic.
Thank you, sir. We now go to Guil Peigneux calling in from Union Bank of Switzerland. Please go ahead.
Hi. Good morning. Thank you for taking my question. Guillermo here, from UBS. I wanted to ask about the pipeline. You mentioned that you do have a relatively good pipeline looking ahead. I wonder whether you can name some of the projects or some of the tenders in which obviously we could see over the second half of this calendar year. Secondly, about the ramp-up, how far are you on the ramp-up as you see it for this fiscal year? I leave it to both of you. Thank you.
Good morning, Guillermo. Thank you for your questions. Looking at the tender pipeline, definitively a strong pipeline ahead of us for 2021, 2022, and this in all regions. Maybe just to give you a sense, good pipelines in Middle East and Africa, in Israel, in Egypt, where we are definitively gaining traction. Definitively very strong in Europe. We can talk about Grand Paris Express, which will be on decision in the weeks to come. We have, of course, the flagship HS2, which should be as well for final award and decision in the weeks and months to come. We have a number of options as well in Europe, in Trenitalia, in France, in Netherlands, in Belgium. Looking at APAC as well, a very positive traction in Australia, in India, in Taiwan, where we are very well-placed.
We are looking with confidence in terms of our pipeline looking ahead, noting that our Q1 has been very exceptional, driven by very large orders, as you have seen. The ramp-up, to your second question. We see definitively a progressive ramp-up in terms of sales, rolling stock being a key driver, but not only. Signalling. On signalling, we are targeting a high single-digit CAGR over time. That's something which will as well materialize. That's very much the two key drivers in terms of progressive ramp-up for 2021, 2022.
Thank you much, sir. Next question is coming from Alasdair Leslie, calling in from Société Générale. Please go ahead. Your line is open. Thank you.
Yeah. Thank you, and good morning. Question around normalization of working capital at Bombardier. I appreciate that has many dimensions. From what I understand, you also expect that is going to continue to be influenced by sort of stabilization of tenders and orders signed currently by Bombardier, and you are still in the process of putting in Alstom's guidelines into those tenders. I guess previously maybe Bombardier was perhaps prioritizing cash instead of margins. The margin profile is maybe okay, which I think you have commented on. Maybe the cash profile on new orders still is not where you want it to be. What can you say about the cash profile on BT's current tenders and new projects, and just how quickly you can reshape them? Thank you.
Yep. Good morning, Alasdair. Thanks for your question. You're making a valid point because indeed on the shape of our cash is very much predicated by the tenders. We have defined, I would say early in the integration process, what is a pattern of working capital we like and we want to have on tenders. Everything which we are signing today into the new group is kind of framed by this working capital pattern. Overall, and to take a step back, indeed, we said that we will be as of September 2021 with a kind of new normalized working capital after the cash outflow of the first half, and then there will be a progressive cash ramp-up.
We are definitively confident to be cash positive for the second half of 2021, 2022, and then there will be a progressive cash ramp-up over the years up to the above 80% cash conversion target we have been framing.
Thank you much, sir. Next question will be coming from Katie Self dialing in from Morgan Stanley. Please go ahead.
Hi. Good morning. Thanks for taking my question. I just wanted to clarify really a couple of points around the HS2 contract since we get asked on this one quite a lot. Firstly, is there any information you can give us on the down payment related to this contract? Would it be wrong to assume something in the kind of 10%-15% region? Also, can you clarify the situation on the two bids? Are we right to think that Alstom would benefit if the Hitachi Bombardier consortium was awarded the contract, even though the technology involved there is part of the antitrust divestments? Thanks.
Good morning, Katie. Thanks for your questions. Indeed, we have two bids on the table on HS2, one which is Alstom standalone as it was launched before the closing of the transaction, and one which is a consortium between ex-Bombardier and Hitachi. We have two chance to get the contracts, and we will see there is competition, we'll see the outcome of this, as I say, in the weeks or months to come. I will not comment, Katie, on the down payment specifics. I know it's always a commercial sensitive information to quote on this. I will say that it's a standout kind of down payment that we have on these kind of contracts.
Thank you much, sir. Today's last question will be coming from Jonathan Mounsey from Exane BNP. Please go ahead.
Hi, thanks. Good morning. Maybe a different way of asking, Akash's question around the provisions. I guess the difficult bit to provision for would be the, I don't know if you'd call them fines or at least monies that you'll agree to either pay or take off the ultimate bill to the customers where the projects are in difficulty. Those are negotiations, which, as I understand it, are yet to be completed. Could you maybe give us a bit of color around where the negotiations are most going to be acutely felt, where we're likely to have to pay fines? Also possibly, is this what changed? It feels like in the last six weeks, through the CMD, the messaging changed, and it feels like you're ramping very quickly on a number of projects in a way that you weren't describing to us earlier.
Is that ramp -up an attempt to get these problem projects finished and therefore minimize the fines? If you do struggle to deliver these projects, do the fines get larger the longer it takes to resolve them? Just some color on all that, please.
Jon, thank you very much for these two points. In terms of starting with your second point, in terms of the ramp -up, the process is simple. We are redefining with our customers, I would say, a new baseline that we want to deliver, and this is the basis of our conversation with our customers. We want to have and lay down a schedule, which is a credible one that we want to deliver. There is no kind of a rush to avoid more penalties. That's not the spirit we are in. It's all about having stability in our project execution and prioritizing on customer satisfaction. On your first point, this customer negotiation conversation are indeed ongoing. I want to frame that all overall consequences of this potential customers conversation are part of the provision we booked end of March 2021.
I would say that this will be a subject which will be continued in the weeks and months to come. We need to be two to tango on these kind of subjects, but we are overall in the frame of our provisions. Overall, the important element for us, again, is back on credibility in terms of customer deliveries and customer satisfaction.
Thank you much, sir. The next question will be coming from William Mackie calling in from Kepler. Please go ahead. Mr. Mackie, your line is open. Would you please ask your question, sir? Thank you.
Sorry. Yeah, good morning, Laurent, Julie, everyone. Thanks for the time. My questions would be directed or question directed around revenue growth and order acceptance. Firstly, you've kindly given pro forma numbers for the group last year, but just as a matter of clarity, can you I mean, the 32% or 33% pro forma growth is very impressive. Can you give us a flavor of the pro forma growth in the business areas? I missed that. Specifically, after such a strong pro forma growth in Q1 against your baseline of EUR 14 billion, can you at least now frame where you see the revenues in the full year? Should we expect this sort of Q1 to roll on through the whole fiscal year?
Do we see that the ramp- up is all skewed in H1, and we see a much more level profile in the second half of the year? The question is around, I guess, how we should think about pro forma growth in the business areas and growth for the full year. Specifically a follow-up would be about your order intake. Within the contracts related to the BT platforms that you have signed or for the group, can you talk about your expected level of gross margin on incoming orders in comparison to the existing gross margin, which sits in the backlog largely around the BT programs?
Good morning, Will. Thanks for your question. Starting with your first one, indeed on the 33% of gross Q1 2021 to Q1 2021/2022 is very much driven by the COVID impact which has been impacting everyone on the Q1 2021. To give you some colors, definitively a large step up in rolling stock compared to these numbers, a step up as well in signalling, because this is where I would say the level of activities has been ramping up in the last months and as well the most impacted in our Q1 2021. That's for your first question. On your second question, indeed, and which is a fair point as well, the baseline of the EUR 14 billion and the trend for 2021/2022. Definitively, we see a progressive ramp-up on the rolling stock project moving ahead, I would say in the quarters and second half of the year.
As I say, on signalling as well, there is definitively this high single-digit CAGR, which is our overall target. That's definitively two areas where there will be a continued progressive sales ramp-up across the quarters. Finally, on your last question on the order intake. We confirm that, which is very positive, that the level of margin of our order intake is above our backlog margin, and that's basically getting into the virtuous circles we had in Alstom, where we get, I would say, healthy order intake, which is beefing up the margins of our backlog, and we are trading at a lower level because we are, of course, delivering at a faster pace, the low-margin contracts. We are into this phase, which is definitively positive.
Thank you, Mr. Martinez. At this time, sir, we have no further questions. Thank you.
Okay. Thank you very much on my side for your attention. Our next event will be our shareholder meetings, and which will take place on July 28th. I wish you all a very good day and a very good summer. Thank you very much.
Thank you, sir. Ladies and gentlemen, that will conclude today's presentation. Thank you much for your attendance. You may now disconnect. Have a good day. Thank you.