Business figures: Alstom lowers forecast - shares plummet

French train manufacturer Alstom has lowered its forecast for the second time this year, causing its stock to drop by 28 percent. The company announced Monday that it expects only a near-zero adjusted EBIT margin for the current fiscal year, down from a previous projection of 6.5 percent. Alstom now anticipates a cash outflow of 1.5 billion euros instead of a cash inflow.

Production is expected to fall to around 4,000 vehicles, down from a previous high of 4,500. Investors reacted strongly to the news, with the Alstom share price falling to 11.34 euros in early trading on Monday, a 28.3 percent decline from its final price on Friday (15.81 euros). The stock is now at its lowest point in the past 52 weeks, having lost more than half its value this year.

The trigger for the decline is the delay in orders for the Coradia Max train series, including regional trains ordered by German states such as Baden-Württemberg and Niedersachsen. These projects were expected to drive Alstom's biggest production surge this year. This has led to "a domino effect" on other German projects, said Alstom's CFO Bernard Delpit during a media briefing by phone.

Alstom's CEO Martin Sion, who took over in April, has sent teams to struggling projects and found that "problems are not only in development." Project management organization has been "inefficient and ineffective," according to Delpit. As a result, Alstom is fundamentally reviewing its organization with the aim of improving processes, clarifying responsibility, reducing costs, and simplifying procedures.

The company is also planning to reduce its debt by about two billion euros, including further sales. Delpit did not specify details, stating it is too early. Alstom had already lowered its annual targets in April due to slow progress on several projects, and the share price fell then too. Alstom has been trying to strengthen its balance sheet since acquiring the rail business from Bombardier in 2021.

The previous CEO, Henri Poupart-Lafarge, had already achieved a two-billion-euro debt reduction. Alstom will present its full-year figures on November 17. The company plans a capital market day for the second quarter of 2027.