(News Bulletin 247) – The railway equipment manufacturer announced Wednesday evening the appointment of Martin Sion, executive chairman of Arianegroup. A choice which has the merit of streamlining the dialogue at headquarters, the manager being a former Safran employee as is his financial director as well as the chairman of the board of directors. His experience with the space group will also be useful for the railway group.

Alstom has decided to turn the (long) page on Henri Poupart-Lafarge. The railway equipment manufacturer announced on Wednesday, after the close of the stock market, the appointment as general manager of Martin Sion, current executive chairman of Arianegroup, a company specializing in space launchers.

This appointment will be effective from April 2026, the date on which Martin Sion will take the reins of the company. And will succeed Henri Poupart-Lafarge, in place since 2016.

The latter had, in March, decided not to request his renewal from the board of directors when his mandate as general director expired, that is to say in the summer of 2027.

Alstom has therefore decided not to wait for this date to put in place a successor, marking the end of a contrasting era, at best.

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A balance sheet of Poupart-Lafarge tarnished by the descent into hell of action

Over the period from 2016 to the beginning of 2021, Henri Poupart-Lafarge led with some brilliance the management of a group that became a pure-player in rail after the sale of its energy activities in 2015 to General Electric, even if he had to endure the veto from Brussels of the proposed merger with the German Siemens Mobility which should have created a European rail champion.

The end of his mandate will remain marred by a series of heavy stock market corrections due in part to the takeover of Bombardier Transportation, former railway subsidiary of the Canadian group Bombardier, finalized in January 2021.

Coherent on a strategic level, this operation responded to a logic of size necessary to conquer markets and weigh against the Chinese juggernaut CRRC.

But the financial aspect has turned into a nightmare for Alstom, which is also in dispute with Bombardier over this operation.

Alstom then inherited several contentious contracts with execution difficulties. This weighed on its profitability and notably forced it to invest massively to straighten out the difficult projects of Quebec society. In the first half of its 2021-2022 financial year, Alstom had burned 1.46 billion euros in free cash flow.

In October 2023, Alstom then issued a profit warning (especially on its cash generation) which caused the share price to plunge by 37.6% in a single session. The company was then forced to recapitalize (including a capital increase of 1 billion euros) to clean up its balance sheet and avoid a further downgrade of its credit rating by Moody’s, which would have had serious consequences.

This financial restructuring was well carried out and calmed the markets. But investor confidence remains fragile and, all in all, relative. Last May, the stock plunged another 17.3% in one session after the group delivered disappointing cash flow prospects for the current financial year.

Since January 2021, just before the finalization of the acquisition of Bombardier Transport, Alstom shares have fallen by 50%.

A member of the Safran “dream team”

“The announcement of the advanced succession of Henri Poupart-Lafarge is good news because the latter had lost his credit with investors and the market no longer had confidence,” says a financial intermediary.

The Stock Exchange reacted with moderation to the appointment of Martin Sion at the head of the group. Alstom shares are up slightly this Thursday, October 9, gaining 0.4% around 4 p.m.

“At the end of the day, Martin Sion is not very well known and ran a much smaller company than Alstom with Arianegroup, which employs around 8,000 people, with a very Franco-German weight, while Alstom is more international. Moreover, he will not arrive until April 2026”, underlines the financial intermediary previously cited to explain this virtual absence of market reaction.

This market expert, however, notes several positive points in his choice. In particular the good articulation that can be expected with the financial director of Alstom, Bernard Delpit, and the chairman of the board of directors, Philippe Petitcolin.

Martin Sion spent 32 years at Safran where he held various positions until April, including that of president of Safran Electronics & Defense, from 2015 to 2023. During this period, the general director of Safran was none other than Philippe Petitcolin (2015-2020), a boss who started as a mathematics professor and is known for his outspokenness. As well as its very good results.

Bernard Delpit, a manager known for his rigor, held the position of financial director (2015-2022), a position he now holds at Alstom.

This Petitcolin-Delpit tandem was highly appreciated by the market and analysts at Safran, before being, in some way, recreated at Alstom.

Delpit was appointed financial director in 2023, while Philippe Petitcolin became chairman of the board of directors in the summer of 2024.

With the arrival of Martin Sion, this tandem of Safran alumni becomes a trio. “We have somewhere the ‘Safran dream team’ that we could have hoped for and we had a good feeling that they were going to look for people they knew at Safran. This will allow a good connection to be established between the different members of management and will facilitate the integration of Martin Sion”, appreciates the financial intermediary.

The latter also believes that Martin Sion will also be able to leverage his experience at Arianegroup within Alstom.

“Space and rail have similarities and common points with industrial projects that are complex to execute and projects that are different each time, unlike other industries where there is mass production. And these are professions that require significant expertise in logistics chain management, in short it’s interesting,” he explains.

The market and analysts could have a little more information on the reasons for its choice when the half-year results are published on November 13.