French train manufacturer Alstom's shares fell sharply after the company announced delivery delays due to "execution headwinds." These setbacks have forced Alstom to abandon its profit and cash flow targets.
Sales for the financial year ending March saw a 4 percent increase, but operating margins declined to approximately 6 percent. Alstom CEO Martin Sion stated that slower-than-expected progress on several large rolling-stock projects impacted near-term margins and cash flow. "We are therefore launching immediate actions to stabilise performance, while preparing deeper operational changes to restore sustainable execution, cash generation and profitable growth," Sion added.
Free cash flow for the full year decreased to around €330 million ($389 million) from €502 million the prior year. The company will also not meet its target of €1.5 billion in total cash flow for the three years ending March 2027. Alstom also indicated that profit margins would not reach the previously promised 8-10 percent next year.
The financial warnings led to a nearly 30 percent drop in Alstom's shares on the Paris stock exchange, trading at €16.13.