Alstom plunges as it slashes outlook second time in 2026 (updated)

Alstom SA

Today 07:28

Adds share move in paragraph 1, details on outlook cut and details on Coradia Max programme in paragraph 5, 6 and 8, analyst comment in paragraph 7.
Nov 2 (Reuters) - French train maker Alstom ALSO.PA cut its full-year outlook again on Monday, after execution problems in Germany drove half-year profitability sharply lower and worsened cash flow, sending its shares plunging 30% in early Paris trading.
The warning comes less than seven months after Alstom scrapped a three-year free cash flow target and cut its margin outlook, blaming delays and execution issues on major rolling-stock contracts.
The group said its adjusted core profit margin was around -4% in the first half of the financial year, compared with +6.4% a year ago, as it lowered its full-year forecast to around 1% from an earlier 6.5%.
It also cut its free cash flow target for the year to an outflow of €1.5 billion ($1.7 billion), having previously guided for a positive result, and launched a plan to reduce debt by around €2 billion.
Alstom said industrialisation challenges and delays in securing approvals for its Coradia Max trains in Germany had weighed on profitability, while a review of key projects highlighted additional work and schedule overruns.
Coradia Max is a series of regional trains ordered by German states that had been expected to drive production growth this year.
"Given the size of the cash warning, and limited details on the de-leveraging, we'd expect a significant negative reaction to the shares," Citi analysts said in a note ahead of market open, estimating that the cash outflow forecast was equivalent to roughly 20% of Alstom's market capitalisation.
The train maker also cut its annual production target to around 4,000 rail cars, from a range of 4,400 to 4,500 previously. It now sees low- to mid-single-digit percent organic sales growth, against a previous forecast of around 5%.
($1 = 0.8948 euros)

(Reporting by Hugo Lhomedet in Gdansk, additional reporting by Diana Mandia, editing by Milla Nissi-Prussak)
((hugo.lhomedet@thomsonreuters.com))