Investing.com -- Alstom shares plunged more than 18% on Tradegate on Monday after the company again cut its outlook amid execution issues with its Coradia Max platform.
The company reported first-half fiscal 2026/27 sales of €9.3 billion, up 3% YoY, with organic growth of 2%.
However, the adjusted EBIT margin came in at around -4%, a sharp decline from 6.4% in the same period last year. The deterioration was primarily driven by gross margin adjustments on projects executed for and from Germany, particularly the Coradia Max platform, which faced industrialization challenges and extended homologation timelines.
Alstom recorded orders of €11 billion, roughly flat from €10.5 billion reported in the same period of the previous fiscal year. Car production fell 8% to 1,860 units as manufacturing was paused during the first quarter to resolve technical issues.
Alstom slashed its fiscal 2026/27 outlook significantly. The company now expects an adjusted EBIT margin of around 1%, down from its previous guidance of around 6.5%.
Organic sales growth guidance was reduced to low- to mid-single digit from around 5% previously. Car production is now expected to reach around 4,000 units, down from the prior range of 4,400-4,500.
Most notably, the company now anticipates negative free cash flow of €1.5 billion, compared to its previous guidance of positive free cash flow.
"Today's announcement reflects the consequences of this exercise with the objective to normalise the Group's performance from next fiscal year," said Martin Sion, CEO of Alstom, who was appointed in April 2026.
The company reported free cash flow of negative €1.25 billion in the first half, reflecting seasonality. Net debt increased to €1.1 billion as of September 30, 2026, from €0.4 billion at the end of March 2026.
Alstom maintained its book-to-bill ratio guidance of above 1 for the full year.
The company announced a deleveraging objective of around €2 billion and plans to hold a Capital Markets Day in the second quarter of 2027.
Original Article
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