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ALSTOM Registration Documen * TABLE OF CONTENTS REGISTRATION DOCUMENT 2016/17 DESCRIPTION CORPORATE 1 OF GROUP ACTIVITIES AFR 3 5 GOVERNANCE 135 Industry characteristics 4 Chairman’s report 136 Competitive position 7 Executive Committee AFR 179 Strategy 8 Statutory Auditors’ report prepared Offering 9 in accordance with Article L. 225‑235 of the French Commercial Code Research and development 15 on the report prepared by the Chairman of the Board of Alstom AFR 180 MANAGEMENT REPORT Interests of the officers 2 ON CONSOLIDATED and employees in the share capital 181 FINANCIAL STATEMENTS – Related‑party agreements and commitments 188 AFR FISCAL YEAR 2016/17 AFR 19 Statutory Auditors 188 Main events of fiscal year 2016/17 20 Objectives for 2020 confirmed 21 SUSTAINABLE DEVELOPMENT: Commercial performance 22 6 ALSTOM’S SOCIAL Orders backlog 24 RESPONSIBILITY 189 Income Statement 24 Sustainable development strategy 190 Free cash flow 26 Designing sustainable mobility solutions 198 Net Debt 27 Environmental performance 205 Equity 27 Social performance 213 Non‑GAAP financial indicators definitions 28 Relationships with external stakeholders 231 Synthesis of indicators/key figures 2016/17 242 FINANCIAL STATEMENTS AFR 31 Report by one of the Statutory Auditors, 3 Consolidated income statement 32 appointed as an independent third party , on the consolidated environmental, Statutory financial statements 96 labour and social information presented in the management report 245 AFR RISK FACTORS 117 Table of compulsory CSR information AFR 248 4 Risks in relation to the economic environment and Group activities 118 ADDITIONAL Operating risks 122 7 INFORMATION 251 Financial risks 125 Information on the Group Risks in relation to acquisitions, disposals and and the holding company AFR 252 other external growth operations 129 Information on the share capital AFR 258 Risks in relation to the transactions organisation chart as of 31 March 2017 272 with General Electric 129 Information on the Annual Financial Report 274 Legal and tax risks 130 Information on the Registration Document AFR 275 Risk management policy and insurance 132 Table of reconciliation 276 AFR The Content of the Annual Financial Report is identified in the summary table with the help of this pictogram. Société anonyme with share capital € 1,533,889,525 48, rue Albert Dhalenne – 93400 Saint-Ouen (France) – RCS : 389 058 447 Bobigny 2016 / 17 REGISTRATION DOCUMENT The original French version of this Registration Document was filed with the Autorité des marchés financiers (AMF) on 31 May 2016 in accordance with Article 212-13 of its General Regulation. It may be used in connection with an offering of securities if it is supplemented by a prospectus (“note d’opération”) for which the AMF has issued a visa. This document has been prepared by the issuer under the responsability of its signatories. This Registration Document includes all elements of the Annual Financial Report specified by Article L. 451-1-2 of the Code monétaire et financier and Article 222-3 of the AMF’s General Regulation. A table of reconciliation is provided on page 284. This Registration Document is available on our website: www.alstom.com. REGISTRATION DOCUMENT 2016/17 — ALSTOM 1 2 ALSTOM — REGISTRATION DOCUMENT 2016/17 1 DESCRIPTION OF GROUP ACTIVITIES / INDUSTRY CHARACTERISTICS AFR 4 Market drivers 4 Main markets 6 / COMPETITIVE POSITION AFR 7 / STRATEGY AFR 8 Customer-focused organisation 8 Complete range of solutions 8 Value creation through innovation 8 Operational and environmental excellence 8 Diverse and entrepreneurial people 8 / OFFERING AFR 9 Rolling stock 10 Systems 12 Services 12 Signalling 13 / RESEARCH AND DEVELOPMENT AFR 15 Development of the range 15 Innovation 17 AFR The Content of the Annual Financial Report is identified in the summary table with the help of this pictogram REGISTRATIONREGISTRATION DOCUMENT DOCUMENT 2016/17 2016/17 — —ALSTOM ALSTOM 3 DESCRIPTION OF GROUP ACTIVITIES 1 Industry characteristics Alstom is a leading player in the world rail transport industry. As such, the Company offers a complete range of solutions, including rolling stock, systems, services as well as signalling for passenger and freight railway transportation. It benefits from a growing market with solid fundamentals. The key market drivers are urbanisation, environmental concerns, economic growth, governmental spending and digital transformation. In this context, Alstom has been able to develop both a local and global presence that sets it apart from many of its competitors, while offering proximity to customers and great industrial flexibility. Its range of solutions, one of the most complete and integrated on the market, and its position as a technological leader, place Alstom in a unique situation to benefit from the worldwide growth in the rail transport market. Lastly, in order to generate profitable growth, Alstom focuses on operational excellence and its product mix evolution. INDUSTRY CHARACTERISTICS MARKET DRIVERS The rail transportation market is supported by solid long term drivers. Sustainable development Urbanisation creates a growing demand for infrastructure, rolling stock (especially for integrated solutions) and signalling notably in emerging Greenhouse gas emissions, impact of air pollution on public health, countries. Mature markets, on the other hand, are mainly supported by climate change, recycling, recovery, energy efficiency and noise projects aiming at updating and modernising existing infrastructure and constitute some of the most significant environmental and sustainable rolling stock, as well as by growing environmental concerns. development concerns currently voiced by populations and politicians. Today more than 90% of the world population leaves in areas where Urbanisation air pollution exceeds the threshold recommended by the World Health Organisation while CO2 emissions from transport continue to grow. The combination of both economic and demographic growth should Based on these criteria, rail transportation offers higher performance entice a growing number of people to live in cities. By 2050, world levels than other transportation modes, which should have a positive population should exceed 9 billion inhabitants, of which nearly 70% will impact on the evolution of the rail transportation market. However, reside in urban areas (source: UNFPA, United Nations Population Fund). some challenges will have to be faced in these various sectors in order This trend towards urbanisation is particularly strong in China, India and to meet ambitious emission reduction goals within set time frames. In in the developing countries of Africa and Latin America. addition, if concerns regarding these matters are significant in mature This development triggers the growing saturation of airports, roads markets, they are gradually gaining more clout in emerging countries. and existing railway infrastructure. In this situation, railways typically In the run-up to COP 21, the European Union issued its commitment offer the easiest, safest and cleanest solution as a real and competitive to reduce greenhouse gas emissions by 40% compared to 1990 levels alternative to road or air transportation. by 2030, in-line with its global ambition to reduce greenhouse gas Additionally, especially in developed countries, the population is emissions by 80% to 95% below 1990 levels by 2050. Transportation, encouraged to leave behind individual methods of transportation and which represents approximately 25% of these emissions, must contribute favour public transportation. This change will be supported by the active to this reduction. Among the ambitions set in the White Paper on (2) promotion of public transportation which is cheaper, more sustainable Transport , the following should be noted: and more mindful of the environment. Therefore, people responsible yy60% reduction in emissions as compared with 1990 levels by 2050; for urban planning and development as well as urban populations yy30% of road freight (for distances higher than 300 kilometres) must themselves are looking for efficient, comfortable and intermodal urban become rail freight and/or maritime freight by 2030; transportation systems (1). In this context, rail transportation offers the via rail by 2050; ideal mobility solutions in terms of safety, comfort and respect of the yyover 50% of intercity passenger transportation environment for urban and interurban transportation systems. yyno more standard internal combustion engine cars in cities by 2050. Moreover, the extension of suburban areas will require adapted This vision has been further reinforced and detailed through the transportation solutions. Innovations to reduce the environmental Communication on European Strategy for Low Emission Mobility impacts in urban areas, such as noise and pollution, as well as improving published in July 2016. the energy efficiency of these transportation methods are also becoming a major priority. The growing urbanisation should also lead to extending transportation networks that connect big cities to smaller ones. (1) Intermodal transportation corresponds to the use of several methods of transportation over the course of a single trip. (2) European Commission, Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system, 2011. 4 ALSTOM — REGISTRATION DOCUMENT 2016/17 DESCRIPTION OF GROUP ACTIVITIES Industry characteristics 1 In September 2014, the International Railway Association, (UIC: Union For Alstom, rail is clearly positioned today among
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