Alstom, the French trainmaker, has announced a rise in sales for the first half of the fiscal year, driven by rolling stock. However, the company experienced a negative impact on its cash flow due to the production ramp up.
According to preliminary results, Alstom's sales reached 8.3 billion euros ($8.69 billion) for the period ended September 30, an organic increase of 6.5% compared to the previous year. The company has confirmed its guidance for organic sales growth above 5% for the full fiscal year.
In terms of cash flow, Alstom reported a negative free cash flow of EUR1.15 billion, a stark contrast to the negative EUR45 million in the same period last year. This decline can be attributed to the acceleration of the production ramp-up, a delay in orders from the U.K., and a decrease in downpayments.
Looking ahead, Alstom anticipates an improvement in cash flow during the second half of the fiscal year. However, the company has adjusted its full-year expectations and now expects free cash flow to range between minus EUR500 million and minus EUR750 million for fiscal years 2023-2024. Previously, Alstom had predicted that free cash flow would be "significantly positive."
Additionally, Alstom's order intake dropped to EUR8.4 billion in the first half, down from EUR10.1 billion in the same period last year. This decline is primarily attributed to a supply contract worth EUR2.5 billion secured by the company in Germany during the previous year.
In terms of financial performance, Alstom's adjusted earnings before interest and taxes margin stood at 5.2%, an improvement compared to the 4.9% margin achieved in the previous year.
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