Alstom (ALO) Q4 25/26 TU earnings summary

Executive summary

• Organic sales grew 7% year-over-year, with sales reaching €19.2 billion, but margin improvement was not achieved due to execution issues in rolling stock and project ramp-up, despite record commercial activity and a backlog exceeding €100 billion.

• Order intake reached a record €27.6 billion for FY 2025/26, with a book-to-bill ratio of 1.4.

• Adjusted EBIT margin declined to around 6%, impacted by slower progress on large rolling stock projects and below previous guidance.

• Free cash flow was approximately €330 million, within guidance but down from €502 million last year.

• Leadership transition with new CEO focusing on operational changes, tighter execution, and a review of the industrial transformation plan.

Financial highlights

• Orders received increased 39% year-over-year, with Q4 orders at €7.6 billion, and a book-to-bill ratio of 1.4 for both rolling stock and services.

• Sales totaled €19.2 billion, up 4% reported and 7% organically year-over-year after adjusting for currency and scope.

• Adjusted EBIT margin was around 6%, down from 6.4% last year and below previous guidance of ~7%.

• Free cash flow was €330 million for FY 2025/26, within guidance.

• Net debt stood at around €400 million at year-end, with a gross cash position of €2.3 billion.

Outlook and guidance

• Commercial activity expected to remain strong with a book-to-bill above 1 for 2026/2027.

• Organic sales growth guided at around 5% for the next fiscal year.

• Adjusted EBIT margin expected to improve to around 6.5% in 2026/2027, driven by gross margin rebound.

• Positive free cash flow anticipated for 2026/2027, despite strong seasonality and a projected €1.5 billion outflow in H1.

• Withdrawal of three-year cumulative €1.5 billion free cash flow guidance and medium-term EBIT margin ambition of 8-10% for FY 2026/27.