Alstom OW/AFL: A delay on the track but medium-term prospects remain attractive

研报英文原文证据摘录

Alstom OW/AFL: A delay on the track but medium-term prospects remain attractive

en partially) was presented as the core

confidence driver: closing it fully points to ~9%+; closing half still supports ~8%. The

focus will be on improving order intake quality, lifting gross margin, and reducing risk

at the bid stage.

• Bidding discipline, risk reduction, and “left-shifting” engineering

spend. Management emphasized tighter tender governance introduced over the last two

years, with clearer rules to validate orders while bidding (including assessing gross

margin, free cash flow profile, and - more stringently - customisation level). A key lever

is investing earlier (“left-shifting”) in engineering to de-risk bids by developing

platforms off-line before committing, rather than discovering issues late. This links to

planned higher R&D in FY27, with the nuance that the question is timing of spend more

than absolute spend: spend earlier to reduce downstream disruption.

• Cash flow, guidance mechanics, and seasonality. For near-term guidance, the stated

objective is to be above breakeven on free cash flow, with delivery execution (serial

trains) and successful homologations as key milestones across H1/H2. Management

highlighted pronounced seasonality: working capital is expected to be a headwind in H1,

with H1 negative (and “heavily” negative), profitability back-end loaded, and

downpayment seasonality higher than the prior year. Due to lower level of acceptance in

its H1 (long summer holidays) working capital seasonality will remain. Management

believes that cash collections are well managed, while cash outflows can be improved -

especially via supply chain management and inventory discipline.

• Portfolio/footprint, organization, and competitive positioning. The CEO noted board