Alstom shares plunged 28 per cent on Monday after the French train maker cut profit and cash flow forecasts for the second time since April, tipping the company deeper into crisis.
The world’s second-largest train manufacturer also set out a plan to cut its debt by €2 billion as it blamed delays to a series of large German contracts for the deterioration in its cash position. The company built the entire Luas fleet for Dublin and is supplying battery electric trains for the city’s Dart network.
Free cash flow would sink into negative territory, reaching minus €1.5 billion for the full year, Alstom said on Monday, compared with previous guidance of “positive” cash flow.
It forecast an adjusted profit margin of about 1 per cent, a steep downgrade from its previous prediction of 6.5 per cent.
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The company also slashed its sales forecast to between 2 per cent and 4 per cent for the 12 months to March, down from about 5 per cent previously.
Its Paris-listed shares slumped 28 per cent to €11.28 in morning trading, bringing the decline this year to 55 per cent.
Monday’s warning was Alstom’s second since the arrival of new chief executive Martin Sion in April, when his first forecast cut sparked a 30 per cent drop in the company’s shares. Sion is focusing on execution problems that have plagued the French TGV maker for years, and has sent teams of experts to review projects.
But the latest reset of guidance is even more drastic, after the company said it had belatedly found issues with the testing phase for a German regional train programme that will now trigger a series of knock-on delays and penalties. It comes after several other profit warnings since 2021 and Alstom’s acquisition of Canadian rival Bombardier, which left it with various low-margin contracts.
Alstom had already been through a similar storm in 2023-24 when it slashed its guidance, sold assets to reduce debt by another €2bn and raised capital under its former chief.
The train maker, second to China’s CRRC, still has a buoyant order book.
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It has often blamed the lumpy nature of contracts in the industry for difficulties in forecasting. However, Alstom has also had execution problems in the handling of contracts.
In France this has led it to headline-grabbing delays in getting the latest version of the double-decker TGV on the tracks. The new train will now make its inaugural journey this week – more than two years after the Paris Olympic Games, when it had been due to launch.
On Monday, Sion pointed to “problems in development and project management that should have been better” on a German train programme known as Coradia Max.
Alstom paused development at one stage to carry out more testing and retrofit some trains already manufactured. More issues with its testing plans were then found, delaying production with the first trains due to be delivered in 2028 rather than next year.
The programme involved six separate contracts, and the delays will trigger penalties. Alstom said it was taking an upfront hit on the entirety of its Coradia Max setbacks and their effects for the years to come.
Sion said he aimed to “normalise the group’s performance from next fiscal year”.
In its first half to September 30th, Alstom reported a 5 per cent year-on-year rise in orders to €11bn. Its adjusted profit margin fell to minus 4 per cent, compared with 6.4 per cent a year earlier. – Copyright The Financial Times Limited 2026
