Alstom Banks Record €27.6bn Order Haul but Execution Strains Persist

Alstom said record commercial momentum failed to translate into the margin expansion shareholders had been promised, as Europe's largest train maker confirmed full-year results that crystallised a sharp reset of medium-term ambitions under new chief executive Martin Sion.

The Saint-Ouen-based group reported order intake of €27.6bn for the fiscal year to 31 March, a 39 per cent jump that lifted its backlog above €104bn and underscored the strength of a European rolling stock cycle buoyed by fleet renewal, high-speed expansion and growing public investment in cross-border services.

Sales rose 3.7 per cent on a reported basis to €19.17bn, with organic growth of 7.2 per cent. Net profit attributable to the group more than doubled to €324m, while free cash flow of €336m landed within guidance.

The headline numbers, however, sat awkwardly against an adjusted EBIT margin of 6.1 per cent, 30 basis points below the prior year and well short of the consensus expectation that prevailed before April's preliminary disclosure wiped roughly 28 per cent off the share price in a single session. Sion conceded that execution on some major rolling stock contracts had progressed more slowly than planned, weighing on near-term profitability.

The group withdrew its three-year €1.5bn cumulative free cash flow target last month and confirmed that the 8 to 10 per cent EBIT margin ambition will no longer be met by 2026/27. Guidance for the new fiscal year points to organic growth of around 5 per cent and an EBIT margin of 6.5 per cent, both below sell-side forecasts.

Sion will outline a fuller operational plan at a Capital Markets Day in early 2027, with disciplined conversion of the backlog's 18 per cent gross margin into reported earnings now the central investment question for the stock.