Alstom cuts profit forecast as Coradia Max problems hit financial results

Alstom has sharply reduced its financial outlook for 2026/27 following production delays and technical problems affecting its Coradia Max train platform and other projects in Germany. The revised outlook follows preliminary, unaudited results for the six months ending 30 September 2026. Alstom recorded an adjusted EBIT margin of approximately -4%, compared with a positive 6.4% in the same period last year. Free cash flow deteriorated to negative EUR 1.25 billion, from negative EUR 740 million a year earlier. The deterioration contrasts with continued growth in orders and sales. Alstom received EUR 11 billion in orders during the first half, up 5%, while sales increased by 3% to EUR 9.3 billion. Orders accelerated during the second quarter, reaching EUR 8.4 billion. Coradia Max delays affect production and payments The main operational difficulties concern the Coradia Max platform, where Alstom has encountered industrialisation problems, additional technical requirements and extended approval procedures. Manufacturing was temporarily suspended during the first quarter to resolve identified issues and reduce the need for subsequent modifications. The manufacturer produced 1,860 rail vehicles during the first half, 8% fewer than the 2,017 recorded a year earlier. Alstom has subsequently reduced its full-year production target from 4,400–4,500 vehicles to approximately 4,000. Technical problems and revised project schedules have also affected profitability on other contracts executed for and from Germany. Reviews of major rolling stock projects identified additional work, execution risks and changes to estimated completion costs, resulting in lower expected project margins. Delayed approval and entry into passenger service are also pushing contractual milestone payments into later financial periods. Alstom now forecasts negative free cash flow of EUR 1.5 billion for the full year, replacing its previous expectation of positive cash generation. Organic sales growth is expected to reach low- to mid-single-digit levels, rather than the approximately 5% previously forecast. Alstom plans EUR 2 billion debt reduction Alstom's net debt increased from EUR 400 million at the end of March 2026 to EUR 1.1 billion at the end of September. The company has announced a review of measures intended to reduce debt by approximately EUR 2 billion by September 2027, including potential internal measures and transactions involving assets or businesses. The group held EUR 1.65 billion in cash and cash equivalents at the end of September. On 1 November, it also arranged a new EUR 2 billion revolving credit facility, maturing in November 2028. CEO Martin Sion, appointed in April 2026, has initiated a review of project execution, manufacturing processes and the company's organisational structure. Decisions on possible operational changes are expected by early 2027. Despite the downward revision, Alstom expects its adjusted EBIT margin to recover to approximately 6.5% during the second half of the current financial year. The manufacturer anticipates a return to more normal financial performance from 2027/28, with a medium-term target of 8–10% adjusted EBIT margin. Alstom will publish its full half-year financial results on 17 November 2026, while a Capital Markets Day presenting its longer-term operational and financial plans is scheduled for the second quarter of 2027.