Alstom lifts the veil on its debt reduction plan

The Alstom group has just presented its results for 2023. The railway manufacturer took the opportunity to clarify the outlines of its debt reduction plan, because the company is in financial difficulties.

Over the whole of 2023, Alstom worsened its losses by recording a deficit of 309 million euros for a turnover close to 18 billion. Alstom is the story of a group whose order book is full for ten years (92 billion euros in the pipeline), but which is facing significant cash flow problems, weighed down by debt. of almost three billion. The company burns a lot of money to operate, which does not please the financial markets. Since October, the stock has plunged on the stock market. At the beginning of March, Alstom shares even left the CAC 40 (the flagship index of the Paris market). Its value has fallen by a third in three years. The railway manufacturer Alstom clarified, Wednesday May 8, how it intends to implement its two billion euro debt reduction plan, a key step in moving forward after a difficult period.

What is Alstom suffering from?

After the effects of the health crisis which hit all railway manufacturers in all countries, the reorganization of the sector which followed was heavy to bear. Alstom is struggling to recover from the takeover of Canadian Bombardier in 2021 for five and a half billion euros. What was a great operation on paper gradually turned into disenchantment with the discovery of unpleasant surprises in the contracts signed by the Canadian group.

Savings, reorganization of capital, reorganization of corporate governance. Alstom has already announced the elimination of 1,500 administrative and commercial positions (excluding engineers) worldwide, including 300 in France. The group is selling assets for around 700 million euros, notably with the sale of signaling activities in North America. Finally, the company will not propose dividends to its shareholders for the 2023/2024 financial year. Alstom will carry out a capital increase of one billion euros by the end of September at the latest, if market conditions permit.

Evolution of governance

The current CEO, Henri Poupart-Lafarge, will leave the “presidency” and remain “general director” from June. It is the former general director of Safran, manufacturer of aircraft engines, Philippe Petitcolin, who will take over as chairman of the Board of Directors. Major stages in the life of Alstom engaged in a final reform intended to ensure its survival while it remains the second largest railway manufacturer in the world behind the Chinese CRRC.