Alstom: Record Orders of €27.6 Billion but Declining Margins, Lowered Ambitions
Alstom recorded a record order intake of €27.6 billion for the fiscal year 2025/26, up 39%. However, the adjusted operating margin was at 6%, down from the forecasted 7%, affected by slower than expected progress on some major rolling stock projects. The group has now revised its medium-term margin ambitions downward.
Record Order Intake Amidst Production Challenges
The fourth quarter of fiscal year 2025/26 saw order intakes of €7.6 billion, up from €4.6 billion the previous year, bringing the order-to-revenue ratio to 1.4. Over the entire fiscal year, order intakes reached €27.6 billion, a 39% increase from the previous year. The group's order book stands at €100 billion. However, this strong commercial momentum did not translate into accelerated production. Alstom produced 4,284 railcars during the fiscal year 2025/26, down by 99 units from the 4,383 railcars produced the previous year. The group explicitly attributes this decline to the slower than anticipated pace of certain rolling stock projects, reflecting a prolonged ramp-up phase.
Stable Revenue Growth but Profitability Lags
Revenue stood at €19.2 billion, up 4% in reported figures and 7% in organic growth, aligning with forecasts. However, profitability did not keep pace. The adjusted operating margin reached 6% for the fiscal year 2025/26, down from the previous year and significantly below the previously communicated forecast of around 7%. After adjusting for unfavorable exchange rate effects and a negative scope effect (sale of conventional signaling in North America), the organic adjusted operating margin remained broadly stable year-over-year. Non-operational expenses decreased to €160 million from €198 million the previous year, while the net financial result improved to (€160) million from (€214) million the previous year.
Free Cash Flow Meets Forecasts but Falls Year-on-Year
The group's free cash flow amounted to €330 million, within the forecast range of €200 to €400 million, but down €172 million from €502 million recorded the previous year. Unfavorable factors related to working capital needs, due to slower project progress, were partially offset by advance payments boosted by the record commercial activity. Net debt slightly decreased to €400 million as of March 31, 2026, from €434 million as of March 31, 2025. The group has a cash reserve of €2.3 billion and neither of the two revolving credit lines has been drawn. Alstom no longer maintains its target of cumulative free cash flow of €1.5 billion over the three fiscal years from 2024/25 to 2026/27. The medium-term ambition of an adjusted operating margin of 8 to 10% will not be achieved by the end of fiscal year 2026/27.
