90% probability Alstom's fiscal 2026/27 adjusted EBIT margin reaches at least 6.0%, against confirmed guidance of about 6.5%. The backlog stands at EUR 102.8bn, so revenue is visible for years; the open question is what margin comes out of it.
Alstom reported Q1 FY2026/27 sales up 4.9% to EUR 4.7bn, with order intake of EUR 2.6bn for a book-to-bill ratio of 0.5 and Services growing 9% organically. Backlog stood at EUR 102.8bn. Full-year 2026/27 guidance was confirmed in all elements: book-to-bill above 1.0x, organic sales growth of approximately 5%, an adjusted EBIT margin of approximately 6.5%, and positive free cash flow for the full year despite EUR 1.5bn of negative cash flow in the first half before customer down payments arrive. Management expects stronger second-quarter orders from the Middle East, France, North America and the UK. The gross margin in backlog was 18.0% as of March 2026, which the group aims to convert into adjusted EBIT margin expansion toward 8-10%. Source: Alstom Q1 2026/27, 22 July 2026.
We lock a binary: Alstom's reported adjusted EBIT margin for fiscal 2026/27 is 6.0% or higher. Confidence 90%.
Guidance of approximately 6.5% was confirmed in full. Our threshold sits half a point below it.
Alstom carries a backlog of EUR 102.8bn against annual sales of roughly EUR 18-19bn — several years of revenue already contracted. That makes the top line unusually visible and is why guidance of about 5% organic sales growth is not the interesting part of this lock.
The margin is. Rolling stock is a long-cycle, fixed-price contracting business where a train ordered years ago is delivered against costs incurred today, and Alstom's recent history includes exactly that problem inherited through the Bombardier acquisition. The company itself frames the challenge as converting an 18.0% gross margin in backlog into adjusted EBIT margin progressing toward 8-10%, from about 6.5% now. Execution, not demand, is the variable.
One figure in the quarter looks alarming and mostly is not. Book-to-bill was 0.5, meaning Alstom booked half as much new work as it billed. In a business with this backlog a single soft quarter changes little, order intake is famously lumpy because one metro contract can swing a quarter, and management guides to above 1.0x for the year with named opportunities in the Middle East, France, North America and the UK. It is worth watching rather than worth panicking about.
The residual 10% is contract provisions. A single large project write-down can move a margin of this size by half a point, and this industry produces them regularly.
RAOSCAFF locks P-287 on 2026-09-02, before the fiscal 2026/27 result. Scored against the adjusted EBIT margin as reported by Alstom for the year to 31 March 2027.
Q1 book-to-bill was 0.5, which looks alarming and mostly is not against a EUR 102.8bn backlog. Contract provisions, not demand, are the real risk to a margin this size.