MARTIN Sion, who succeeded Henri Poupart-Lafarge as Alstom CEO on April 1, says that despite achieving a strong order intake and meeting its cash objectives for the 2025-26 financial year, the company’s profitability has fallen short of expectations, leading it to revise its short-term financial outlook.
“Let me be very clear from the start, this is not the way I was expecting to start my mandate,” Sion said. “The financial results on cash generation are not at the level you should expect from a market leader, especially with a €100bn backlog in a growing industry. After the last 12 months, we delivered strong organic sales growth of 7% but this did not lead to margin improvement, and in a year of record commercial activity with €28bn of order intake, free cashflow generation should have been much stronger.”
Sion was speaking at a conference call for financial analysts arranged at short notice late on April 16 to announce the company’s preliminary results. Markets reacted poorly to the news the following morning with a 28% drop in the Alstom share price.
Sion says multiple factors are at play. The production ramp-up of new rolling stock platforms has not been as steep as expected in the fourth quarter, while Alstom has failed to turn around other projects which met challenges early in their lifecycle.
“It’s fair to say that the current situation in the Middle East has been an additional constraint,” Sion added. “Taken together, these factors will have knock-on effects on near-term financial performance.”
Sion visited Alstom plants in Italy, France and Germany during his first two weeks with Alstom. “One conclusion is very clear, our ability to stick to planning is not strong enough. In a project business, sticking to planning is essential. Today, development, industrialisation and manufacturing across multiple sites are not always aligned, creating complexity. In some cases, production moves ahead while homologation is still pending.
Sion says several projects, some of which are large in scale, are in difficulty. “When we are late, then you've got a domino effect with significant consequences,” he explains. “That's why my priority is to drive deep operational changes and improve execution quality. In short, this means tighter day-to-day execution, stronger planning discipline, and better coordination across engineering, supply chain and production.”
Sion revealed that he plans to initiate discussions within Alstom to adopt a more focused product and commercial strategy, and that he will review the portfolio and industrial footprint, including the company's existing industrial transformation plan. He revealed that an action plan we be announced later this year.
“Restoring performance in rolling stock is a major opportunity for the group,” Sion said. “It is achievable with discipline. This is a necessary step to execute the backlog and prepare the group for sustainable cash generation and profitable growth.”
2025-26 results
During the fourth quarter of financial year 2025-26, Alstom recorded €7.6bn in orders, a huge increase compared with the €4.6bn achieved in the same quarter of the previous year. “This brings the order intake for the full fiscal year 2025-26 to €27.6bn, up 39% compared with the prior fiscal year,” Alstom says. “This is equivalent to a 1.4 book-to-bill ratio, in line with guidance.”
Sales grew by 4% to €19.2bn in 2025-26, although Alstom says organic growth was 7% after adjusting for an adverse currency impact and the disposal of its North American conventional signalling business during 2024-25.
Alstom manufactured 4284 passenger cars in 2025-26, compared with 4383 in the previous year, a reduction of 2%. Alstom says this mainly reflects “rolling stock projects moving at a slower than anticipated pace, prolonging the ramp-up phase.”
Adjusted Ebit margin for 2025-26 was around 6%, down compared with the last fiscal year and lower than the previous guidance figure of around 7%.
Free cashflow was around €330m in 2025-26, which Alstom says is within its guidance range of €200-400m. This compares with €502m in 2024-25.
Net debt stood at approximately €400m on March 31 2026, compared with €434m a year earlier.
Outlining the preliminary outlook for 2026-27, Bernard Delpit, Alstom’s executive vice-president and CFO, says commercial activity should remain strong, driving solid down payments, and he predicts a book to bill ratio above one. “Organic sales growth should be around 5%,” he said. “We expect the adjusted margin to return to around to around 6.5% with R&D expenses expected to increase as a percentage of sales. The improvement will be driven by a rebound in gross margin back to levels seen in fiscal year 2023-24.
“On the other hand, lower margins than previously anticipated, capex to support the growth of services being put forward, as well as trade working capital changes, will weigh on cash compared with what we previously planned.”
As a result, Alstom says it has withdrawn the three-year cumulative €1.5bn free cashflow guidance from 2024-25 to 2026-27, while the medium-term ambition of an adjusted Ebit margin of 8-10% will no longer be met by 2026-27.
