Alstom issues severe profit warning; shares plunge almost 30%
Source · Industry desk
— Summary
Days after Martin Sion took over as CEO (replacing Henri Poupart-Lafarge), French rail equipment maker Alstom issued a severe profit warning. On Friday 17 April the stock plunged almost 30% at the Paris open, falling from €22.70 to €16.48.
The problem lies not in the order book — above €100bn — but in industrial execution in the short and medium term. Organic revenue growth for fiscal 2025-26 came in at 7% to €19.2bn, in line with guidance. But adjusted operating margin fell to around 6%, versus the ~7% previously promised. Delays on major rolling-stock projects (the trainsets and locomotives delivered to rail operators) are weighing on margins and cash. As a result, the cumulative free-cash-flow target of €1.5bn over 2024-25 to 2026-27 has been dropped, and the medium-term 8% to 10% adjusted operating margin goal has been pushed beyond 2026-27.
For the current year, management now guides around +5% organic growth, roughly 6.5% adjusted operating margin and positive free cash flow. An "operational transformation plan" will be unveiled at the audited results on 13 May. "Let's be clear, this is not how I had planned to start my mandate", Sion acknowledged. Source: Les Echos, 16 April 2026, Denis Fainsilber.
The story in one line: Alstom’s new CEO Martin Sion inherits a profit warning: adjusted margin cut to 6% from a promised 7%, three-year cumulative free-cash-flow target scrapped, shares down almost 30%.
Key numbers
Stock drop on 17 April: from €22.70 to €16.48 (~–30%).
Order book: above €100bn.
2025-26 organic revenue growth: +7% to €19.2bn.
2025-26 adjusted operating margin: ~6% vs ~7% previously promised.
Cumulative FCF target for 2024-25 to 2026-27: €1.5bn — dropped.
Medium-term 8% to 10% adjusted margin goal in 2026-27: deferred.
Alstom has a record order book but cannot convert it into margin or cash. The culprit: delivery delays on major rolling-stock projects (the trainsets and locomotives ordered by operators), which stretch cycles and eat into margins through contractual penalties and cost overruns. New CEO Martin Sion must convince investors that the “operational transformation plan” to be presented by 13 May will reconnect industrial execution with financial promises.
Takeaway
The issue is not demand (€100bn backlog) but industrial organisation. The stock’s credibility now rests on the medium-term targets Sion will unveil in May, and the visibility he offers on the pace of margin normalisation.
Source: Les Echos, 16 April 2026, Denis Fainsilber.