Alstom cuts margin goal to about 1%, sees €1.5bn cash outflow; shares close 26% lower

Alstom cut its outlook for fiscal year 2026/27 on 2 November 2026. It now guides for an adjusted EBIT margin of about 1%, down from about 6.5%, and for free cash flow of minus €1.5bn, where it had previously guided for positive free cash flow, according to its press release. The TGV maker said the new goal implies a second-half margin of about 6.5%. The first-half figures, for the six months to 30 September 2026, are preliminary and unaudited: the board reviewed them on 1 November, and full half-year results are scheduled for 17 November 2026.

Alstom said its first-half adjusted EBIT margin of about -4%, against 6.4% a year earlier, reflected mainly gross margin adjustments on projects carried out for and from Germany. It cited further technical problems and testing requirements on its Coradia Max train platform, which have lengthened certification, and said it paused Coradia Max manufacturing in the first quarter to fix issues and limit later retrofit work. It built 1,860 rail cars in the half, down 8% from 2,017 a year earlier. It attributed the full-year cash outflow mainly to milestone payments moving into later fiscal years, as certification takes longer and major projects, including Coradia Max, enter service late.

Preliminary first-half sales were €9.3bn, against €9.1bn a year earlier, up 3% as reported and 2% organically. Orders rose to €11.0bn from €10.5bn, including €8.4bn in the second quarter, for a half-year book-to-bill of 1.2; Alstom kept its full-year book-to-bill goal of above 1. Free cash flow was minus €1,248m, against minus €740m a year earlier, which the company put down to seasonality. Net debt rose to €1.1bn at 30 September 2026 from €0.4bn at 31 March 2026, partly offset by €694m from a green hybrid bond issued in June.

Alstom said it held €1.65bn of cash and cash equivalents at 30 September and signed a new €2.0bn revolving credit facility on 1 November, maturing in November 2028 and free of financial covenants. The board is reviewing organic and inorganic options for the roughly €2bn debt cut, and a Capital Markets Day is planned for April-June 2027. Alstom sees performance returning to normal from fiscal 2027/28 and expects to "trend towards 8-10% adjusted EBIT over the medium term", according to the release.

Alstom shares closed at €11.685 on Euronext Paris on 2 November 2026, down 26.1% from the 30 October close of €15.81, by Polstob's calculation from Euronext historical data. The Irish Times, carrying a Financial Times report, said the shares fell 28% in morning trading after Alstom's second profit and cash flow forecast cut since April.