Alstom: transports of delight - FT.com Winter storms have made travelling a sore subject for commuters on both sides of the Atlantic. But transport is certainly delivering for Alstom, the French industrial engineering group whose products range from power plants to rail rolling stock. On Tuesday, the company reported flat third-quarter sales, year-on-year, at €4.9bn, but a 3 per cent advance in orders received, to just over €5bn. This means the book-to-bill ratio - the rate at which filled orders are being replaced - was over one for the ninth consecutive quarter. Recently, this has been due largely to Alstom's transport unit, where orders for the first nine months of the financial year are now 50 per cent higher, at €6.3bn, than at the same stage in 2011. This has more than offset the weaker thermal power side, which is struggling with a lack of large turnkey projects. In the context of a European capital goods sector battling sluggish conditions, this looks encouraging. There is a potential downside, though - namely margins, which are traditionally much higher on the thermal power side. True, Alstom has repeated its guidance of an 8 per cent operating margin by 2014/15. This slipped to 7.1 per cent in the last financial year to end-March. There could be business to come: for example, in the UK, where Alstom has provided over half the installed power generation base, there has been talk of up to 30 new gas plants medium-term. As ever though, energy policy is subject to election vagaries, making timing uncertain. More encouragingly, Alstom is signalling positive free cash flow this year - which would reverse a two-year outflow trend. Since June, its shares have gained 40 per cent, and now trade on an enterprise value to 2012/13 earnings before interest, tax, depreciation and amortisation multiple of 6 times. Even so, this remains a discount to the sector. Alstom still has scope to travel.