Alstom reports strong cash flow and higher margins

Alstom, the French train manufacturer, forecasted a rise in adjusted operating margins for 2025/26 after reporting a free cash flow that was well above expectations. This is a sign that its cash problems are now resolved.

These issues are partly due to the fact that it inherited problem contracts from Bombardier Rail's 2021 acquisition.

Alstom builds trains and signalling for urban and regional railway networks. It reported an adjusted operating margin of 7% during the year up to March 2026.

It reported a 6.4% margin based on adjusted earning before interest and tax (EBIT) of 1,18 billion euros ($1.32billion) for its fiscal year 2024/25. This was slightly higher than the average analyst expectation of 1,16 billion euros.

The group reported a cash flow free of 502 millions euros for the entire year, which was higher than the 330 million euros analysts surveyed by Alstom expected.

The free cash flow was estimated to be between 200 and 400 million euros per year.

Alstom stated that the 2025/26 guidance is supported by full implementation of its deleveraging plans and the completion of the Bombardier Integration process.

Alstom announced a plan in May 2024 to reduce debt and reform finances. This included a $1 Billion Rights Issue supported by two of its main shareholders.

It said that the new outlook also benefits from a supportive market, but does not include any possible impact of tariffs.

Alstom anticipates that its organic sales will grow between 3% to 5% during the current fiscal period.

The organic growth of the fiscal 2024/25 sales was 6.6%, bringing them to 18.49 billion euro. This is higher than the 18.31 billion euro consensus.

(source: Reuters)