3. P3 POWER SERVICE
Alstom Power Service
Our Business Scope
Power Service's market is the Power Generation element
in the energy value chain, specifically:
• operation
• maintenance and repair
• performance improvement and lifetime extension
of existing power generating plants
Fuel Electricity
Power
Generation
Maintenance
Operation
AssetManagement
4. P4 POWER SERVICE
Alstom Power Service
Vision and Mission Statement
VisionVision
To be the undisputed leader in servicing and upgrading
power plants around the globe.
We provide the most responsive, reliable and innovative
solutions to keep power plants competitive throughout
their life cycle.
Mission
Statement
Mission
Statement
5. P5 POWER SERVICE
Alstom Power Service
KPIs
vs. Sept. 06 (%)
6 months12 months
March 07 (€M) vs. March 06 (%) Sept. 07 (€M)
Orders backlog
Orders received
Sales
Operating Income
Operating Margin
5,219
4,058
3,198
510
15.9%
+20%
+16%
+12%
+15%
5,882
2,512
1,756
286
16.3%
+14%
+6%
+18%
+20%
Fast growth and improving profitability
6. P6 POWER SERVICE
The Power Service Opportunity
• Global installed capacity continues to grow, especially in
China, India, and Middle-East
• Customers focusing on increasing existing plant
efficiency to reduce costs and emissions
• Increased environmental focus
• Technology is key to differentiation in the marketplace,
and to profitable growth
8. P8 POWER SERVICE
World Installed Power Generation Capacity
0
20
40
60
80
100
120
140
160
others
Hydro
Nuclear
ST - conventional
GT / GTCC
1 6 11 16 21 26 31 36 41 46
~4400GW Installed Capacity; 30% older than 30 years
2006 2000 1990 1980 1970 1960 Year of
Commission
Age of
Power Plant
GW 1312 GW >= 30 Years
(at End 2007)
Source – UDI 2007 / PS BD, Power Generation Market, all sizes
5%
60%5%
29%
1%
• A growing and old fleet with predominance of coal fired plants
• Lead time for new units and environmental regulation is driving the need for
efficiency increase / lifetime extension
9. P9 POWER SERVICE
Alstom installed fleet
PS Workshop / Engineering location
PS Field Service Hub
Plant containing at least 1 major Alstom
equipment
• Alstom has leading positions in all key equipments in terms of installed fleet (GT;
ST; GEN; BOI; ENV) -> A good basis to develop service business
• Plants containing Alstom equipment are historically concentrated in Europe and
North-America -> opportunity for OOEM strategy in other areas
10. P10 POWER SERVICE
Total Market
€26bn(*)
• Power Service presence to be adapted to capture growth from most dynamic areas
• Service strategy is not limited to own fleet: focused OOEM initiatives based on Alstom
technology and local network are pursued to address the entire market potential
(*) Scope excludes industrial, <20MW, retrofit, construction and uses average regional utilisation 2000-2004. Growth rate MACA 2006, *incl. BOP, basis -2006
Rest of Asia
€3.0bn
China
€1.9bn
Russia & CIS
€1.0bn
Europe
€5.5bn
North America
€7.4bn
South America
€1.3bn
Australasia
€0.4bn
India
€0.9bn
MEA
€3.5bn
7.2
18 1.9
2.7
1.2
8.8 %
8.7 %
10.9 %
Plants containing
at least 1 Alstom
major equipment
No Alstom
equipment
installed
-> Specific
OOEM
initiatives
developed
Outsourced revenue potential in €bn
> 5 %
CAGR
(to 2015)
The Power Service market: 26B€; growth above 5% p.a.
11. P11 POWER SERVICE
The Service players: typology
A specific environment with clear segmentation of players
The major OEMs: Alstom; GE; Siemens…
• Comprehensive range of equipment and proprietary fleet
• Excellent technological level across the board
• Focusing on their own fleet first but having developed service as a specific business with its own key
success factors
The emerging OEMs: Chinese; Indians…
• Partial range of equipment and overall lower technological level
• Mostly focusing on new builds and therefore offering lower quality of service to their customers
The Independent Service Providers (ISPs): Wood Group; Sulzer; North American
Energy Services…
• Spin-offs from utilities in Field Service activities
• From niche players with some technological know-how in their field to purely execution focused
companies (selling manpower but no/very limited technology)
• Very different sizes and financial performance
13. P13 POWER SERVICE
Alstom Power Service
Present in Key Markets
Gas Coal
Nuclear (conventional island)Industrial
14. P14 POWER SERVICE
Alstom Power Service
Present in all Key Components
GeneratorsGas Turbines Steam Turbines
Boilers/HRSG Environmental Instrumentation & Control
15. P15 POWER SERVICE
Alstom Power Service
Offering a comprehensive product portfolio
Plant Components Products
Parts Spare parts, re-conditioned parts, workshop
repairs
Field Service Outage management,
field repairs, erection, commissioning,
construction, supervision
Consultancy &
Support
Technical services, condition assessment,
consultancy, training, monitoring &
diagnosis, performance analysis
Performance
Improvements
Upgrades, modernization, optimization, life-
time extension
•Mechanical BoP
•Environmental
•I&C, Electrical BoP
•Boiler
•Generator
•Steam Turbine
•Gas Turbine
= Total Plant Solutions
16. P16 POWER SERVICE
Power Service Organization: Our Objectives
• Meet our strategic goals (significantly grow revenues and profit)
• Meet the business needs of today and tomorrow
• Minimize inefficiencies and exploit our full potential
• Continuity and continuous improvement of established processes
Leverage centralized product know-how and
execution capability with local Service Centers
17. P17 POWER SERVICE
Power Service Set-up: Locations & Headcount
~2000
~200
~300
~10,000
~2500
Workshop / Engineering location
Field Service Hub
Headcount by geography (all functions)
NAM
SAM
EUROPE
MEA
ASIA
• 38 engineering locations; 26 field service hubs; ~ 15'000 people
• Resources historically concentrated in Europe & (less so) in the U.S.
• Recent acquisitions in Asia
18. P18 POWER SERVICE
Sales by Product (%)
Sales by Market (%)
Power Service at a glance (2006/07 figures)
20
30
40
35
30
35
Europe
Americas
Asia
Africa – Middle East
Gas (GT+TG)
Steam (ST+TG)
Boiler island
Key Facts
• Balanced mix, with main pillars in Europe and U.S.
• Still potential to increase market share in key areas
• Challenge to develop business in fast growing areas
with limited own fleet
Key Facts
• 3 well balanced pillars
• >60% of revenues from higher-margin rotating
equipments
10
19. P19 POWER SERVICE
Alstom Power Service
Competitive Strengths
• Technology leadership and ownership
• Global reach – service at customer’s doorstep
• Comprehensive portfolio
• Largest installed base
• Leader in Environmental Control Systems
Alstom Power Service has developed
the right skills to benefit from a
growing and changing market
21. P21 POWER SERVICE
Power Service Maturity Model: Continued Development
Leverage Existing
Resources
Leverage Technical
Strength
Leverage Technology &
Size to differentiate
“Meet our Vision"
• Put marketing at the
centre of the
organization
Stage 1
Informal
Stage 3
Integrated
Process
Stage 2
Functional /
Balanced
Start-up
Power Service
1999/2000
2002/2004
Stage 4
Customer
Collaboration
Integrated processes to act as One Business
2005/2010
22. P22 POWER SERVICE
Our Strategic Pillars to Growth
PLANT
Full Plant Service Provider and expert in
optimizing performance and extending the lifecycle
Diversify
geographically by
building up
infrastructure and
capabilities in target
areas
PRESENCE
Differentiate through
products which
provide extra value to
customers
PRODUCTS
Global excellence in
integrated and
aligned processes
PROCESSES
PEOPLE
23. P23 POWER SERVICE
Steam Plant Strategy: from customer demand to products
CUSTOMER DEMAND
Component
Upgrade
Maintenance
Support
Operation
Support
M&D
MARKET DRIVERS
Increasing
Power Demand
Increasing
Power Demand
Environmental
Legislation
Environmental
Legislation
Fuel Price
Development
Fuel Price
Development
Electricity
Trading
Electricity
Trading
Lack of Competent
Personnel
Lack of Competent
Personnel
Increase
Power Output
Increase
Power Output
Improve
Availability
Improve
Availability
Improve
Flexibility
Improve
Flexibility
Reduce
Emissions
Reduce
Emissions
Increase
Efficiency
Increase
Efficiency
Extension of
Lifetime
Extension of
Lifetime
XX
XX
XX
XX
XX
XXXX XX
XX
XX
XXXX
XX
XXXX
XX
Component 1
Component 2
Plant
integration
Targeting the overall plant, the integrating systems
and the non-ALSTOM components to offer an
integrated solution to the customer
24. P24 POWER SERVICE
Product strategy: principles
• Service “Products” are the basis for the Sector development model
− Plans are defined and aligned centrally, then implemented locally
• Strategies are adapted to individual equipment
− Defend or gain market share on own fleet by leveraging technology as
well as commercial levers on mature products
− Develop organisation to support fast growing activities
− Selectively address opportunities on OOEM fleets
Technology is key to differentiation
25. P25
Product strategy: example of innovative solutions
Market-driven R&D efforts to extend lifetime and
improve availability and efficiency
Gas Turbine
Steam Turbine
Full Rotor Scanner
• Automated ultrasonic modular scanning system for all rotors
• Detecting and sizing of cracking and forging defects
• Market: all OEM and OOEM rotors and cylindrical parts
Valve upgrade for ex ABB/BBC Fleet
• HP valve groups (control valves) with reduced pressure losses
to increase plant efficiency
GT13 E2 XL
• Development of GT13 E2XL with improved
lifetime/availability extension package at minimal
possible cost
Robotics
26. P26
Product strategy: Acquisition of PSM in March 2007
• ALSTOM Power System Manufacturing
− Headquartered in Jupiter, Florida
− USD 70m sales in 2006
− 100 highly qualified people
− High-tech company focusing on
service for F-class gas turbines
A strong platform to develop
Power Service activities in
OOEM Gas Turbines
27. P27
Presence
Geographic Expansion in the Middle East
• ALSTOM Power Service (Arabia) FZE, (APSA); Jebel Ali Free Zone
• Focusing on CCPP:
– supply of field service personnel
– gas turbine blade reconditioning
– generator rewind and repair
– spin pit for generator rotor balancing
• Local Resource: 140 employees; 3 200 sqm of offices and workshops
Adapt industrial footprint to key markets
28. P28
Presence
Geographic Expansion in China
• ALSTOM Strongwish
− Headquartered in Shenzhen, China
− 4 M€ sales in 06/07,
100 employees
− Remote Monitoring and Diagnostic
services
• Alstom Sizhou
− Qingdao Sizhou acquired in May 2007
− 50 M€ sales in 2006, 1 100 employees
− Ash handling systems and spare parts
− Coal handling systems and spare parts
− Wind Tower Manufacturing
Build-up platforms to develop Service activities
29. P29
Processes
One Business Platform – 3 Major Projects
Standardizing Business Processes
Lead Unit A
Support
Unit B
Support
Unit C
Commercial Visibility of Internal Supply Chain
Internal Offer and Order Management
Managing Customer
Information & Sales
Opportunities
Processes Platforms
One Platform for Sales
& Marketing (CRM)
One Platform for
Commercial Business
Processes
One Platform For Local
Unit Execution
Processes
(ERP)
One Global Business Platform
30. P30
• Recruitment of >2 000 employees
− Covering attrition and new positions
required to support sector growth
− Mainly Europe, NAM, Asia
• Training / knowledge sharing: increase
current training for employees by more than
50%
People by geography
People
HR: High attention given to people development
Key HR action plans
12
15
55
12
Europe
Other Asia
China
MEA 6
Americas
Industry requirements: high skills; experience; service culture
31. P31
Support growth by driving a focused M&A strategy
Two main categories for M&A in Service
Product focused Execution focused
• Add complementary Service
products and innovative resources
− Increase own fleet / product
base
− Acquire products
complementary to our fleet
• Add capabilities and resources
− Establish stronger local
presence
− Add capabilities to our existing
industrial footprint (focus on
low cost sourcing and supply
chain management)
32. P32
Past acquisitions have reinforced portfolio and
execution capabilities
Technology
value
added
Geographic reach Global
PSM
Strongwish
SizhouHolmes
RMG Pointo
ETH
CSC
MSc
160 M € sales/year
1 700 new colleagues
100 new products
Execution
Technology
Intermediary
Local
Low
High Past 18 months
Turboteh
(FR)
(CN)
(USA) (CN)
(USA)
(CH)
(AU)
(CR)
(FI)
Proven acquisition and integration capabilities
33. P33
Conclusion
• Power Service on track, but significant potential growth remains to be
captured
• Straight forward strategy based on:
PLANT
PRESENCEPRODUCTS PROCESSES
PEOPLE
We are committed to sustainable economic development
