Alstom shares close 26% lower after train maker cuts its profit and cash outlook over German project delays

Shares in French train maker Alstom closed about 26% lower in Paris on Monday 2 November, after falling as much as 31% during the session, dpa-AFX reported, after the company cut its outlook for the second time this year.

The new forecasts. In preliminary first-half results, Alstom said its adjusted operating (EBIT) margin for the full 2026/27 financial year would be around 1%, down from around 6.5% previously. It now expects free cash flow of minus €1.5 billion for the year, after earlier forecasting a positive figure. It cut its car production target to around 4,000 from 4,400 to 4,500 and lowered its organic sales growth forecast to low-to-mid single digits from around 5%.

The first half. For the six months to 30 September, sales rose 3% to €9.3 billion and orders reached €11.0 billion, but the adjusted EBIT margin was around minus 4%, compared with 6.4% a year earlier, and free cash flow was minus €1.248 billion, Alstom said. Net debt rose to €1.1 billion.

The cause. The company said technical issues and extra testing requirements on its Coradia Max platform, regional trains ordered by German states, had extended the approval timeline and delayed deliveries, and that other projects for and from Germany were also affected. “Today’s announcement reflects the consequences of this exercise,” chief executive Martin Sion said, referring to a review of project risks he ordered after taking over in April.

Next steps. Alstom’s board is reviewing “all possible organic and inorganic options” to cut debt by around €2 billion by September 2027, the company said. Citi analysts estimated the cash outflow forecast was equal to roughly 20% of Alstom’s market value, Reuters reported. Full half-year results are due on 17 November.