Good afternoon, ladies and gentlemen. Dear shareholders, I declare open this session of the combined shareholders meeting of Alstom. First of all, I would like to thank the shareholders attending the meeting, as well as shareholders who did connect remotely to attend this shareholders meeting I have the honor to preside. Attending today on stage, Mr. Martin Sion, the new Chief Executive Officer of your company. He will introduce himself in a moment. Madame Emmanuelle Petrovic, General Counsel, and Mr. Bernard Delpit, Chief Financial Officer. I would like also to welcome here in the first row the members of our Board of Directors. In accordance with the law, it is now my responsibility to appoint the presiding officers. I call upon the two members of the meeting who represent the largest number of votes and who have agreed to take on this role. [non-English content] .
[non-English content] Share EUR 80,930,484 shares represented by Mrs. Kim Thomassin, and Bpifrance Investissement, which holds EUR 34,930,254 shares, represented by Mr. Samuel Danas in the second row. I would like now, with the agreement of the scrutineers, to appoint Madame Emmanuelle Petrovic as secretary of the shareholders meeting. Representatives from Forvis Mazars and PricewaterhouseCoopers, statutory auditors for Alstom, are also attending this meeting, and I would like to thank them indeed for being here with us. I shall now hand over to Mrs. Emmanuelle Petrovic.
Thank you. Sir, the agenda and the resolutions put to the vote of this combined shareholders meeting are set out in the notice of meeting, which is available online on our website, and that has been sent to registered shareholders.
The agenda and these resolutions are also set out in the notice of meeting published in the bulletin, [non-English content] , on June 1st, 2026. The Board of Directors report on the resolutions is included in this notice of meeting. The statutory auditors reports have also been made available to you and are included in the notice of meeting. To avoid unnecessarily prolonging the meeting, I will not be reading out the agenda and these reports. The dossier put on the table contains the documents required by law, a list of which will be recorded in the minutes of this meeting. All of the documents have been made available to shareholders at the company's registered office. Having clarified these points, I would like to inform you about the following.
Our Chief Executive Officer, Mr. Martin Sion, will present a review of the financial year and provide an update on the group's outlook. Mr. Bernard Delpit, Chief Financial Officer, will comment on the group's financial results for this financial year. Mr. Kevin Cogo, Head of Group Strategy, will outline the group CSR priority and achievements. Corporate governance and remuneration matters will then be presented by Mr. Philippe Petitcolin, Chairman of the Board of Directors, and by Mr. Baudouin Prot in his capacity as Chairman of the Nominations and Remuneration Committee. The statutory auditors will present their reports. Following these presentations, there will be a Q&A session with the audience, during which you will be available to ask questions, whether verbally or in writing, using the form provided to you. We will then conclude with the presentation and vote of the resolutions.
As usual, to facilitate voting and enable results to be displayed more quickly, an electronic voting system will be used. Upon entering the room, you were given an electronic voting device, which I would like to ask you to keep at hand and not to forget to return them to the hostesses on the way out. I would like to point out that the attendance register is currently being checked and we will be welcoming shareholders up until 3:00 P.M. As at the record date for shares carrying at least one voting right, your company's share capital comprises 462,616,024 shares. According to the provisional attendance register, shareholders represent in person or by proxy, hold 331,438,000 votes, 71.30% carrying voting rights. The quorum required for this general assembly, which will be held on first notice, 20% for the ordinary part and 25% for the extraordinary part.
The 25% quorum has been already achieved and the meeting will be able to deliberate. I would like to remind you that this meeting is being filmed and broadcast live on the company's website. I would also like to inform you that a judicial officer is in this room. Thank you for your attention. Hand over back to the chairman.
Thank you, Madam Secretary. I will now hand over to Mr. Martin Sion, Chief Executive Officer.
Ladies and gentlemen, dear shareholders, it is with great honor, but also a strong sense of responsibility that I address to you today for the first time as Chief Executive Officer of Alstom. I joined the Alstom group on April 1st after 36 years working at Safran in the aerospace and defense industries. Let me say a few words about my career.
I began my career in technical and engineering roles before moving into transformation and continuous improvement. I held industrial management roles, managed three companies with Safran: Safran Nacelles, Safran Electronics & Defense, some of you have known it as Sagem, and finally, ArianeGroup, which is a joint venture between Safran and Airbus. What is the link between rocket engines, aircraft engines, electronic equipment, nacelles and launchers, and the railway sector? Well, in reality, there are many. Looking at each of these fields, we are always talking about high-level engineering, technology, complex systems, reliability, industrial performance, and rigor in execution. The environment is different, the size of the company is different, as soon as you look at the details, you understand that skills involved are very similar. This experience of major industrial projects, I want to bring to Alstom.
Since my arrival, I have been keen to get out into the field as quickly as possible. I visited about 20 sites during the first three months. I did not mean to observe Alstom from a distance, rather to ground my assessment in the company's industrial reality. That is to say, meeting with teams, partners, and customers alike. These initial visits have confirmed a very strong conviction of mine. Alstom has considerable strength, technologies, products, a global footprint, a leading backlog, as you well know, it's also women and men who demonstrate remarkable commitment and expertise. Still, these assets must now be reflected more clearly in our performance. We need more regularity in execution, more consistency, a greater discipline in steering our projects, more predictability in our deliveries, and more simplicity in the way we operate. Well, this assessment is not based solely on figures.
It also stems from what I have seen, what I have heard, and the discussions that I've had with our teams, customers, and partners. Recent financial results show that we are not yet performing at the expected level for a leader such as Alstom. However, they do not call into question the quality of our fundamentals or the potential of the company. My message is therefore simple. Alstom is not a company that needs to be reinvented. It is a company whose full potential must be realized by raising the bar, and this is precisely what we are about to enter now. I would like now to cover the year 2025-2026, starting with the highlights of this year. First of all, it was a record year in commercial terms. Nearly EUR 28 billion of orders. The turnover rose by 3.7% with adjusted for changes of scope and currency effects.
The organic growth stood at 7.2%. All business units contributed, Rolling Stock, Services, and Industrialization. The adjusted EBIT margin fell short of our expectations, down on last year. This is mainly due to the underperformance in Rolling Stock. This is mainly explained by two types of problems. First of all, industrialization and homologation processes, and some projects reaching the end of the execution, which had a difficult start. The free cash flow generation stood at EUR 336 million, in line with our target. Let's now turn to the group's commercial performance over the past financial year. Alstom recorded EUR 27.6 billion in order intake, which is a record level, with an order to turnover ratio of 1.4. This performance is well-balanced both geographically and by business segment. Europe remains the main contributor with EUR 15.6 billion.
Among the major contracts, there is EUR 1 billion in Portugal, EUR 1.5 billion in Poland for our Coradia Max regional platform, including maintenance, EUR 1.4 billion with Eurostar in France, and EUR 1.6 billion for RER NG trains in the Paris region. Americas are also seeing strong growth with EUR 7.9 billion orders. This is driven by several major successes in North America. First of all, a EUR 2 billion contract for the metro in the New York metropolitan area, EUR 1 billion for the New Jersey commuter rail network, and EUR 1.4 billion in Canada for the Toronto Metro. By product line, Rolling Stock leads the way with EUR 14.3 billion, pretty much half of the order intake. Services follow with EUR 6.5 billion. Signaling and Systems accounting each for approximately EUR 3.4 billion.
Beyond the figures, this performance confirms the group's platform strategy Avelia Horizon, for instance, is our high-speed train platform, is going strong in several markets, as shown by the significant proportion of options included in orders, and the backlog now stands at over EUR 104 billion. Let me talk about key operational achievements. In the U.S., the next-gen Acela has entered commercial service on Amtrak Northeast Corridor, with trains designed and manufactured in the U.S. for the U.S. market. At this stage, more than 10 train sets are already in commercial operation. In India, new metro lines have been brought into service in Bhopal and extensions to the New Delhi network, incorporating Alstom's latest signaling technologies. In France, MF19 has entered service on line 10 of the Paris Metro. Deployment will continue gradually across eight metro lines by 2033.
Finally, in Australia, we achieved a first for the country with the commissioning of the Melbourne Metro Tunnel. Let me now switch to that part of my presentation to share with you my assessment of the group current situation. Alstom is in the business of industrial projects. For this kind of business, the quality of execution and financial performance depend above all on the backlog, its size, balance, and margin levels. From that point of view, the progress made recently is very important. The backlog has went up over EUR 6 billion over five years. It is also better balanced across Rolling Stock, Services, Signaling, and Systems. At the same time, the margin embedded in the backlog has improved by approximately two percentage points. Several factors explain this development. First of all, the railway market has performed well with approximately EUR 210 billion identified worldwide over the next three years.
This gives us visibility, it also requires a real discipline in the way we select our projects. Secondly, the combination of Rolling Stock and Services is a unique driver of growth. In practical terms, over the last two years, around 50% of the trains sold was accompanied by a maintenance contract. Finally, Alstom has built a strong position in digital Signaling solutions, both in standalone projects and in integrated turnkey projects. All of this provides a sound foundation. In an industrial project-based business such as Alstom, a strong balance sheet and cost discipline are essential to our success. Progress has been made these last three years. The debt reduction plan that was launched in 2024 that strengthened the balance sheet, fixed costs have fallen as a proportion of turnover. Progress has also been made on the environmental front.
Scope 3 emissions, which are linked to passenger trains sold to our customers, have fallen by around 20% over three years' time. This reflects both the evolution of our products and a growing need and demand for low-carbon mobility solutions. There have also been operational improvements. Manufacturing quality has improved, a transformation plan has been launched in Germany in order to adapt our industrial footprint and boost efficiency and competitiveness. This does not solve everything, these progresses clearly show that the actions we have taken are beginning to yield results. This slide shows that there is still room for improvement in terms of execution. You can see the production of cars these last three years for every quarter. Regarding the Rolling Stock, we haven't reached yet the expected level of consistency. This has impacted our operational performance and reduced our financial visibility, especially during Q4.
Regarding production, the first nine months of the year were kind of stable. Q4 fell short with a total of nearly 100 cars fewer than planned for the year. Most of this shortfall stems from several major platforms where the development and industrialization phases are overlapping and taking longer than anticipated. It means delays and additional costs. Teams remain on task for a longer time. The testing phases are extending, and in some cases, some changes have to be made retrospectively. All of this puts pressure on margins and cash generation in the short term. Deliveries are not canceled but postponed over time. Consequently, so are cash inflows. At the same time, the group is finalizing a small number of contracts for which additional problems were identified during project reviews in Q4.
On the next slide, you see some very tangible short-term actions to stabilize the situation and start turning things around. First of all, we are working at strengthening managers' attention on execution. We do insist on operational discipline with faster Lean practices implemented for engineering and execution. We also want to strengthen the quick problems feedback coming from the field. We want to review roles and the decision rights in the companies to reinforce the empowerment of our project managers. We try to simplify our operating methods, our teams have more time to dedicate to execution. Thirdly, we are working towards an even greater control cost, focusing our resources on the key projects and aligning with delivery requirements. Finally, we are accelerating procurement initiatives in order to capitalize on the size of our backlog when negotiating with our suppliers. All these actions target the fundamentals of execution.
We will implement them with determination. At the same time, we are preparing for more far-reaching operational changes and are making a better alignment of our operations, operating mode, industrial footprint, and offers. This concludes my presentation. I will now hand over to Bernard Delpit for the financial review.
[non-English content] Martin.
Thank you, Martin. I am now going to invite Bernard Delpit, the financial director, to take the floor.
Thank you, Mr. Chairman. Ladies and gentlemen, dear Alstom shareholders, it's an honor for me to present to you the group's consolidated income statements for the financial year ending 31st of March 2026. I'm going to do this by highlighting a number of financial indicators. To start with the key elements of resolution number 2, which is going to be subjected to your vote concerning the consolidated accounts of Alstom. You see here on the right-hand side column that the sales figure of your company reached EUR 19,171,000,000 for the last financial year, which represents organic growth, in other words, outside of currency and scope effects of 7.2%. The operating income of your company reached EUR 1,168,000,000. In other words, a fairly stable level compared to last year. This represents an adjusted operating margin of 6.1%, down by 30 basis points compared to the previous financial year.
Readjusted with currency and scope effects, this operating margin is stable compared to the past year. Issues of execution of some projects for Rolling Stock have therefore been offset by the correct execution of the rest of the portfolio and the good effective control of our central costs and the strong performance of our joint venture projects in China. Non-operating expenses continue to fall, going from almost EUR 200 million to EUR 155 million last year.
These include, in particular, restructuring and streamlining costs to adapt our industrial base, as well as legal costs. This decline reflects the gradual normalization of these expenses following the integration of Bombardier. As a consequence, the operating profit is now at EUR 797 million. In addition to which, the financial result is improving significantly, with EUR 165 million compared to EUR 214 million last year, benefiting in particular from the efforts for debt reduction of the group.
The tax rate that you see on this line, effective tax rate, is now at 35% of taxable income, which is stable compared to last year. All of these factors leads to an adjusted net profit of EUR 559 million, compared to EUR 498 million last year. Finally, after taking into account the amortization of goodwill, as it's called, in particular related to past transactions, net profit attributable to the group is now at EUR 324 million, a significant improvement on the EUR 149 million of last year. This is the result that we suggest you approve in the second resolution. I would also like to take this opportunity to mention the company accounts in French law. For Alstom SA, which is the parent company of the group, Alstom, that you are the direct shareholders of.
The amount of the general reserve at the end of March 2026 stands at approximately EUR 6.7 billion, following allocation of the profits from previous year. This year, we suggest to allocate to this general reserve the result of the year, in other words, in French standards, EUR 100 million. Just like last year, we do not suggest any dividends for the year 2025/2026. This decision is in line with the financial policy of the group. In other words, with the objective of favoring the strengthening of the balance sheet and the pursuing of efforts for debt reduction. Speaking of debt reduction, debt net of your company, which was at EUR 34 million on the 31st of March 2025, is now today at EUR 404 million.
This evolution is explained, first of all, with the generation of cash flow, which reached €336 million for this financial year, in line with the forecasts that were made in May of 2025. In addition to this cash generation, a number of factors have also influenced this change in debt, in particular, the paying of dividends to minority shareholders and the coupon payments on what is called a hybrid debt, which we had issued in May 2024 in this plan of debt reduction for the Alstom group. In addition to which, rent payments amounted to €172 million paid over that period. Finally, exchange rate effects contributed to a reduction by €53 million of debt. All of these flows, favorable for cash generation and unfavorable for the other factors that I just mentioned, explain the fairly moderate evolution of debt reduction, reaching €404 million.
Concerning the cash flow of the group, free cash flow and equivalents are now at €2.3 billion in March of 2026, a level which is overall stable compared to last year. In addition to which, the group has revolving credit facilities, a line of €2.5 billion, which was not drawn, and a commercial paper program allowing it to issue short-term for an amount of €2.5 billion. Overall, these elements give the group a situation for cash flow that allows it to meet its operating needs. Concerning the profile of the debt that you see on the right here, bonds of €700 million are going to be due in October of this year. This debt maturity was already refinanced with a debt emission in the month of June that I'll come back on shortly.
These €700 million will be paid back in the month of October. Taking this opportunity as well to tell you about the objectives that were announced for this financial year, 2026/2027. First of all, we continue to anticipate a sustained demand on our markets, in particular for Rolling Stock, but also for Signaling and Services. In this general situation, we expect business activities to be quite buoyant with an order to turnover ratio exceeding one, an accumulation of order intake above the level of the turnover of the year. This turnover, we expect to have increasing by over 5% in line with our ambitions, midterm ambitions. In this respect, we estimate that the number of carriages, being either a car, a locomotive, or a metro carriage.
We estimate that this overall number of carriages produced, a physical estimation, which represents about 50% of our activity, should be in the range of 4,400 to 4,500 units in this financial year, which is a crucial indicator, in particular of the efficiency of our production tool and of the quality of our engineering. Concerning profitability, we are targeting a gradual improvement of the adjusted operating margin with the objective of 6.5%, compared to the 6.1% for the previous financial year that was just closed, which translates the ongoing efforts to enhance operational efficiency and of the product mix. In terms of cash generation, we are targeting positive free cash flow for the financial year.
As you know, Alstom has a financial year that starts on the 1st of April, and so in the first half of the year, there is two lower months of activity, so the summer months, and so cash flow is strongly affected by the seasonality, and we have therefore indicated that we should have a negative cash flow up to minus EUR 1.5 billion during the first half of our financial year. Now, a few striking elements for the first quarter 26/27. First of all, the TGV M obtained the authorization for commissioning in May, with a commercial review by the SNCF in the month of September. We now have a commercial start, which is aligned with our expectations on Signaling and Services. A little bit lesser for activities for Rolling Stock.
As I indicated previously, at the beginning of June, we issued a hybrid bond, as it's called, and most especially green bond with characteristics connected to efforts for decarbonization conducted by Alstom, which was met with quite a bit of success, with a rate that is considered successful performing, high-performing. I would not leave you without showing you, as I usually do, the evolution of the share price for this period of time since our last shareholders' meeting, compared to the SBF 120 index. For the first part of the period, the share price performed overall positively, reflecting in particular the strength of the commercial policy of the group, with a record order intake and an order book offering strong visibility.
We observe a period of increased volatility, which is explained first of all by the market environment, which is more uncertain, characterized in particular by geopolitical tensions in the Middle East, which of course impacted all equity markets and even more so on Alstom. Secondly, the publication of our preliminary results mid-April, with the revision of our outlook prospects, which triggered a clear market reaction. Over this whole period, the share's performance is therefore lagging behind the benchmark index, reflecting these specific factors. Against this backdrop, our priority is clear: strengthening operational execution, improving discipline on our projects, and gradually restoring our path to profitability and cash generation. This, in the long term, will allow for value creation for our shareholders. Thank you.
Thank you, Bernard. It's rare to see a financial officer being applauded this way.
Giving now the floor to Mr. Kevin Cogo, in charge of the strategy. Why don't you come on to the floor, Kevin?
Hello. Thank you, Mr. Chairman. Thank you, Bernard. Hello. I'm going to now tell you about the results and the assessment of our CSR strategy. Our strategy is based on five pillars that covers all of our value chain, and the objective is to reconcile industrial performance, and strengthen our resilience, and reduce our environmental impact all at the same time. Favoring zero-emissions mobility is at the heart of our mission. We are a key player of decarbonization of mobility, with a portfolio of comprehensive solutions with zero carbon emissions. We also carry many efforts in terms of reducing our own impacts, whether in our own production plants, industrial activities, and Services.
The preservation of resources is a material impact for the group, and so we established a number of actions in terms of circular economies, and we're especially ramping up recycled materials in our Rolling Stock in 2025/2026. 27% of materials used were recycled for our Rolling Stock. Our support to local communities through our different operations is also a key element through our foundation in particular, and also activities that we perform in different regions. We have over 373,000 beneficiaries in 2025/2026, and we're also working hardly for our different partners to increase diversity in the group and culture on EHS. Security safety is a crucial element as well, and a differentiating element. Finally, we put a lot of effort into building a respectful and responsible value chain with our customers, partners, and suppliers. Concerning the results.
We have, for this financial year, 2025/2026, made a lot of progress, one more year in the right direction. We reduced our emissions, measured in Scope 1 and 2, going down by 12% compared to last year. As mentioned, the solutions that we deliver our customers have also progressed by 26% in terms of emissions compared to the 2021 reference year. Now in terms of social indicators, we are also making progress. It's been more than 10 years that we've been systematically reducing incidents in our production plants and with our customers in the framework of our Services to reach in 2025/2026, a 1.4 in terms of results. Our diversity is in progress as well, with 26.6% women in managerial teams. These results confirm the efficiency of actions conducted and the, of course, mobilization of management.
Taking this opportunity to give you a few illustrations of some of these key elements. Now, in terms of impact and environmental priorities, in 2025/2026, we reached 100% renewable energy in the group. In other words, through actions conducted on production sites with solar panels, for instance, and also by signing contracts for pure renewable energy contracts. We also worked on our own consumptions with a Lean plan. So 82% of sites are equipped with LED lighting, which is a significant improvement of our electricity consumption. Now, in terms of our value chain and suppliers, vendors, we have multiplied contracts, in particular for raw materials. Outokumpu, which is one of our major suppliers, is now giving us access to low-carbon steel. On this commodity, we reduced by 93% our carbon impact, which is extremely significant.
Finally, as mentioned by Bernard, we are using the excellent results of our EU Taxonomy in relation to our engagements on climate engagements, so as to be able to go into EUR 700 million of issuing of green bonds, which, as you heard, was a great success. We are continuing our social engagement through our foundation with a safer, more inclusive, more accessible, and greener mobility for all regions. I mentioned here a project in Mexico, which fulfilled all these criteria and is a beautiful illustration of what we are doing in these different regions. This is for us, a very strong commitment, a mobilization of all times and of all hands. Thank you for listening to me and giving the floor back to the chairman.
Thank you so much. Let me now present some information connected to the governance of your company, then I will ask Mr. Baudouin Prot, who is presiding the Compensation and Appointment Committee, to take the floor. As you well know, the past year has been marked by the departure of Mr. Henri Poupart-Lafarge, former CEO, who was director of this company. He left his two roles on March 31st, 2026. Ever since April 1st, 2026, the board of directors I am presiding is composed of 11 administrators or directors, including two directors representing employees and one scrutineer. The independence rate within this council is quite high, 89%. The diversity is ensured by the balance between women and men, but also different nationalities represented, and expertise and experiences that are diverse and complementary.
This allows your board of directors to comply with the regulations in force and with the best corporate governance practices. I also would like to say that the board of directors met nine times during the previous fiscal year, and seven executive meetings were convened with an attendance rate of 100%. Now, if we switch to the mandates of directors that are expiring, there are actually three of them, Mrs. Bi Yong Chungunco, Mrs. Clotilde Delbos, and Mr. Baudouin Prot. The board of directors would like you to vote on a certain number of proposals relating to its composition after this general meeting. Mr. Baudouin Prot expressed his will to run for a third term of reference within the board of directors. After considering this request, we decided to renew his mandate, or to propose to renew this mandate for four years, which is resolution number five.
To replace Mme. Clotilde Delbos and Mme. Bi Yong Chungunco, who do not wish to renew their terms of office, the board of directors, after proceeding to rigorous selection, together with the support of an external firm, would like to propose to appoint Mr. Pascal Bouchiat and Mme. Ana Girós for a four-year term of office. These nominations will be voted for on resolutions six and seven.
The board of directors would also like to propose resolution number eight, that is the nomination of Mr. Martin Sion as independent administrator or director for a four-year term. All the information pertaining to these applications are included in the notice of invitation. Martin expressed himself at the beginning of this meeting, and I believe that his speech will have convinced you of the relevance of his attendance to the board of directors. Mr. Pascal Bouchiat and Mme. Ana Girós are also attending this shareholders' meeting, and I would like to invite them to take the floor so that they can introduce themselves. Pascal?
Thank you, sir. Hello, dear shareholders. I'm Pascal Bouchiat. Up until recently, I was the CFO and IT director for Thales with a lot of engineering businesses in aerospace, defense, cybersecurity, and digital identity industries. Before this, I spent an important time of my career in the chemical industries. I'm a chemical engineer by training, and I graduated. I have two MBAs, and I started out as an R&D engineer before switching to a certain number of industrial roles. I used to be production manager and then turned to financial job roles. Before joining Thales, I used to be the deputy CEO in charge of finance and IT systems of Rhodia. Rhodia group merged with Solvay.
Thank you for your attention, thank you for your support in advance. Thank you.
Thank you, Pascal. I will now hand over to Ana.
Thank you. Ladies and gentlemen, dear shareholders, thank you for having me and giving me the chance to introduce myself. I'm Spanish, Ana Girós. I studied in Barcelona in the Polytechnic Engineering School. My career has moved from one industry to the other, even though I spent 20 years of my professional life in the railway industries, taking different roles, product management, then Services, I've been in charge of major Services business unit, later on, I also was working for the general management in the railway industry still. Then I used to be an international manager at Suez, working in the waste and water and infrastructure businesses. For the past four years, I've been working at Equans as DGA.
It is a group working in the energy and service industries. It is a global player in these fields. All these experiences, European, international, and diverse industries, I would love to utilize in order to work at the Alstom Board of Directors operating in the railway industry, which is a great transition industry in order to evolve towards a decarbonated connected economy. It is a great pleasure for me to be with you today. Thank you for your trust and for your attention.
Thank you, Ana. Ladies and gentlemen, dear shareholders, should you decide to approve these resolutions after this shareholders meeting, the Board of Directors will be made of 12 directors and one scrutineer with an independence rate of 80% and a men to women ratio of 40% and 60% with seven different nationalities represented. Regarding now the committees, there are three of them.
After the shareholders meeting, they will be as follows: Mr. Baudouin Prot would be renewed as the President of the Nominations and Remuneration Committee. Mr. Pascal Bouchiat would become the Chairman of the Audit and Risk Committee and Chair for the Ethics and Sustainability Committee. The number of members attending each committee would remain the same. Each committee being made of at least two-thirds of independent directors. All this information pertaining to the Board of Directors and committees' activities during the past year, even more detailed information about all the topics that were studied last year, are to be found on chapter five of the Universal Registered Document 2025-2026.
Thank you for your attention, I will now ask Mr. Baudouin Prot, Chairman of the Nominations and Remuneration Committee, to please join us on stage in order to present the resolutions you will have to vote in terms of compensation. Baudouin?
Thank you. Ladies and gentlemen, shareholders, as the President of the Alstom Nominations and Remuneration Committee, please let me read the resolution for you to vote about the remuneration policies for 2026-2027, the rest, remuneration for the past year as a corporate officer for your company. The list of this resolution being displayed on stage. First of all, I would like to give you some information about the departure conditions for Mr. Henri Poupart-Lafarge. A transactional agreement has been reached with the former CEO of your company on February 27th, 2026, providing for the prevention and end of any litigation as he left his role of CEO.
According to that agreement, a transactional amount will be paid out for EUR 1,325,964 in counterpart of the commitment of Mr. Poupart-Lafarge to continue and cooperate with the company on all litigation procedures involving the company. This agreement has led to two specific votes. Resolution 4, since there is a regulated convention, and Resolution 9, asking you to approve of the remuneration policy 2025/2026 that did not include such an agreement. On top of it, I will come back to this in a moment, you will also have to vote on that indemnity considering a more general framework presented in Resolution 15. Regarding the 2026/2027 remuneration policy for the new CEO, there are two resolutions pertaining to this matter. Resolution 10, about the remuneration policy including all the components with the main change in increase of the fixed annual remuneration of EUR 1,050,000.
Resolution 11, about a sign-on bonus that is not recurring with the performed shares. The remuneration policy for the CEO includes other components whose conditions remain the same. Benefits in kind, supplemental pension schemes, and non-competition payment. All the information will be available at page 269-280 of the universal registration document 2025-2026. Regarding the remuneration policy 2026-2027 for the chairman of the board of directors, you will have to vote on Resolution 12. This remains the same as compared with the past year. It is made of fixed annual compensation and benefits in kind. All this detailed information you can read on page 280 of the universal registration document 2025-2026. The 2026-2027 remuneration policy for the directors will be voted for in Resolution 13. It remains the same. It is unchanged versus 2025-2026 policy.
This policy has been established on the basis of an overall envelope of EUR 1.3 million, approved by the shareholders on July 1, 2014, and this envelope has remained the same ever since with a fixed part and a variable part. This information you can find in details on page 269 of the 2025-2026 universal registration document. Now, talking about the remuneration of the past year, Resolutions 14 and 16. According to Resolution 14, you will have first of all to vote for or against the overall global remuneration report, providing information about the past fiscal year for all of the corporate officers. I will not give you any detail in terms of remuneration for the directors and chairman of the board, since there will be specific resolutions to vote in a moment. There are two kinds of information on this report.
First of all, it is about the remuneration of the board of directors that received amounts to EUR 836,000, and information pertaining to the ratio of remuneration compared with the chairman of the board's remuneration and compared with the remuneration of the group's employees. All the information you can find on page 281 and 291 on the universal registration document 2025-2026. Now, switching to the remuneration for the past CEO and chairman of the board.
The 2025-2026 remuneration of Mr. Henri Poupart-Lafarge, who was the CEO up until March 31, 2026, will be voted on Resolution 15. All in all, Mr. Poupart-Lafarge received a fixed remuneration of EUR 950,000 during the past year. After this meeting, he will receive, or is supposed to receive, a variable remuneration, EUR 456,000, reaching its objective by 48%. On top of this variable remuneration, there would be a transactional amount of EUR 1,325,964 as presented a moment ago.
Regarding the non-competition indemnity of EUR 2.808 million. This amount has already been paid for partly, but EUR 117,000 since April 1st, and this payment will continue up until March 31st, 2028. All this information is detailed on page 292 of the universal registration document 2025, 2026. Finally, resolution number 16. You will have to vote on the remuneration paid to the Chairman of the Board of Directors 2025, 2026. Mr. Philippe Petitcolin received a fixed annual compensation as Chairman of EUR 450,000. Here again, information detailed on page 290 of the universal registered document 2025, 2026. Thank you, ladies and gentlemen, dear shareholders, for your attention. Over to the president of our chairman for the rest of this meeting.
Thank you, Baudouin. I will now ask Mr. Richard Bijoux of PricewaterhouseCoopers to please make a presentation of the statutory auditor's report.
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Thank you, Mr. President, ladies and gentlemen, shareholders. In the name of the statutory auditors, the cabinets for PricewaterhouseCoopers and Forvis Mazars, I have the honor to give you the results of our missions as for the financial years finished, ending at 31st of March 2026. I'm going to summarize the terms of our report, which were given to your attention by the company. I'm going to start with our report on consolidated accounts of the court that were prepared, according to the IFRS referential base as adopted by the European Union. We certified the consolidated accounts of the group without any reservations or observations. We considered as key points of the audit the following elements that were considered to be the most substantial and were therefore given special attention from our part.
The elements concerned, margin on long-term contracts, the evaluation of litigation and investigation. We see here that our main mission is to obtain a reasonable assurance on sincerity, regularity, and a faithful image of accounts and to make sure that these accounts do not have any significant anomaly. To do so, we intervene in all significant entities of the group, whether in France or abroad. The verification of management report and other documents given to the disposal of shareholders does not lead to any comments on our part. Concerning our reports on annual accounts of your company, this time presented according to the French standards. We considered as key points of our audit the assessment of the inventory, value for securities and Alstom's holding.
We validated these accounts without any reservation, with just one observation of technical nature concerning the application of the general rules. For the first article of the general rules, which applies to all companies in this industry in France. Concerning the accounts, we have a new convention which was subjected to your council and which is therefore subjected to your approval today and is detailed in our special report on page 305 of the universal registration document. We also have a convention already approved by your assembly and the execution being pursued during this financial year.
Concerning our work on information published in terms of sustainability, your company published for the second time the information for sustainability according to the provisions of the EU directive called CSRD. We emitted a report to give limited assurance in terms of conformity of elements in this report that have to do with three dimensions. Conformity, according to ESRS standards of the processes of the company to determine impacts, risks, and opportunities conducted in relation to sustainability and conformity of published information in line with regulatory requirements of CSRD and of EU Taxonomy. On the basis of the procedures that we implemented, we did not identify any errors, omissions, or significant inconsistencies concerning conformity of information with ESRS and European regulations.
Finally, in terms of the extraordinary part of your general assembly, we emitted five reports concerning resolution projects subjected to the vote this afternoon and having to do with capital changes in social capitals. We have no objection on the principle proposed of the resolutions proposed by your president. Mr. Chairperson, ladies and gentlemen, shareholders, thank you for your attention.
Thank you, Mr. Bijoux. We are now going to open the floor for the debates. I would like to call your attention to the fact that you have these young ladies in the room to collect your questions that you can either ask
Out loud with the microphone that will be handed to you or through this question form that was given to you when you entered the room. Before we start, however, I'd like to call your attention to the fact that the company received questions in written form in relation to article R225/84 of the Code of Commerce on the part of its shareholders and from the CFDT trade union with the spokesperson, Mr. Ostertag, as well as Mrs. Mara Lilley, who's present today, from the Church of England Pensions Board in London. Thank you for their questions. I'm now going to read the questions that were asked in writing. To start with Mr. Ostertag, in the name of the CFDT, two questions from his part. First question, the risk of evolution of the industrial organization.
In its press release of April 26, Alstom put forward the level of cash flow that wasn't up to expectations and the objective of an operational transformation plan and new ambitions midterm during this financial year. What causes have led to this cash flow situation and issues? Is this impossible to remedy? What evolutions are to be predicted and where? In this logic of social responsibility on the part of Alstom, how is Alstom going to involve all potentially impacted stakeholders in the building of this new industrial organization? You see, this is a very substantial question. Second question of the CFDT as well. In terms of the European context, to support its industry, both in terms of weight, richness, sovereignty, Europe is building a project for regulation, which is called the Industrial Accelerator Act, and the rail industry is not mentioned in the concerned industry.
First point, is Alstom defending, advocating the interest of being included in the IAA, the Industrial Accelerator Act? Second point, for Alstom's industrial projects of rail building in Europe, what is the weight in added value of European local content? Third point, what is Alstom's ambition of either maintaining or increasing this weight in the future years, and in what segment? We are now going to let Martin answer these two questions from the CFDT trade union, and we'll go back to the second question from our British friend next.
Thank you, Philippe. For the first question, now concerning the question of cash flow, this was recalled by Bernard. The level of debt of Alstom today has improved, including during this financial year of 2025, 2026, around EUR 400 million. We generated EUR 800 million in free cash flow during the last two financial years.
As I just recalled previously, Bernard also said it as well, the performances that we had in 2025, 2026 led to the fact that we didn't generate this economic generation. We had to review the EBIT generation for next year by 1.5 points. Relatively speaking, the impact on EBIT, of course, has an impact on the free cash flow. Our guidance is now a free cash flow that's positive, and this is what creates the situation. These are the consequences of our operational overcost, the projects that we already mentioned. The question to know whether this situation can be remedied.
Of course, it can be remedied, but we have to improve operational performances, execution, that will therefore improve our situation. In terms of restructurations. In 2025, 2026, we continued having optimization projects for our industrial footprint. There is a transformation project underway in Germany that was already communicated on the Bruges site. We also engaged headcount reductions, which are the consequence of the fact that we were not selected by the SNCB for a program of regional trains. We are going to, in any case, continue improving our industrial footprint to see how and where we have to develop and where, on the other hand, we have to maybe reduce or optimize the size of our sites.
It depends on the markets that we win, there's already a number of optimization projects underway, for instance, in England and Australia, this is done without any site closures. Generally speaking, what's important for sites is to see their progress, momentum, the dynamics. This is something that I was very keen about when I went to site visits to see the progress, room for maneuver in each site, this is crucial to keep in mind. A comment on social responsibility of Alstom and the way that we bring all stakeholders on board. Generally speaking, Alstom maintains a constant social dialogue with representative bodies, including of employees in the different countries where we have operations.
I had the occasion on the 2nd of July of taking part in the European Works Forum, the European Council, which allowed me to exchange with the different trade unions and organizations represented. We will align with all collective agreements and legislations when necessary, of course. On question number 2, concerning the European local content. On the Industrial Accelerator Act. This Industrial Accelerator Act, for those of you who do not know what it is, it's a proposal that was made on the part of the European Commission to recommend the use of aluminum, steel, and cement that be sustainable and European-sourced, to lead to a certain number, for it to become an obligation for a certain number of industries. Here we see that it concerns rail for infrastructure, because rail infrastructure is already going to be included.
What's true, however, is that today the European Commission is explicitly making a reference to rolling stock in a future revision of the IAA, which means that rolling stock is not yet part of the IAA at this stage. We consider that this two-phased approach is consistent, first of all, because rolling stock is not representative of big volumes in terms of steel and aluminum, in addition to which, there is requirements in terms of quality and nuances in this respect that are essential to guarantee the lifespan of projects over more than 50 or 40 years. For us, it's important that rolling stock be considered into the IAA once there is this availability of sustainable steel and aluminum, and that that situation improve.
In terms of the industrial, the European content of our projects, if I try to have the minimal amount, we are always above 50% of European content in our projects in Europe, and sometimes way above that level. How is this going to change over time? We found a balance today to have the right level of competitiveness and competitivity by taking advantage of our different locations worldwide. It is always advantageous, logistically speaking, to be as close as possible. We also have to make the best of our costs thanks to this worldwide footprint. To go back to my first comment, we have to look at the competitiveness of our sites and the speed at which we can improve our economic performances for each site. That comes into the equation as well.
Thank you, Martin.
I am now going to move on to the question that was asked by Mara Lilley from the Church of England Pensions Board in London. Since the question was asked in English, I am now going to let Emmanuelle rephrase the question in French and potentially give it an answer as well. Emmanuelle, go ahead.
Thank you, Mr. Chairman. Two questions were asked, which I am first going to read to you, and then I will try to give you an answer. The first question was following the removal of the project of the Jerusalem tramway. The question is, "What were the guarantees that were given to the board of directors that the underlying risks were managed, and what safeguarding measures and controls are now in place to preclude any similar risk in the future?" The Alstom group has been observing for always a strict political neutrality.
As a worldwide mobility player, we supply transportation solutions that will be beneficial to all communities in the world, including in Jerusalem and Israel. We consider that access to transportation is a key element for social and economic development. Our participation in any project relies on an ethics program and strict conformity, respectful of French legislation and any legislation applicable. We salute the decision of 2025, which, in this respect, you voted for, of the United Nations Human Rights Commissariat, of the UN, concerning settlements in Israel. This decision is aligned with the position that Alstom has had since 2023, stating that Alstom does not exercise any activity in line with occupied Palestinian territories. Alstom has, to this day, no activities, operations in line with occupied Palestinian territories, and has no intention of doing so.
The second question which was transmitted was to know if, more broadly, how the board of directors supervises and makes sure that human rights are integrated in all projects and partnerships that are conducted in different situations and/or countries at high risk, including co-companies or joint ventures and supply chains, and on what guarantees do we rely to ensure true efficiency of these processes. The board of directors, as well as the ethics committee, makes sure that integration of human rights are included in governance and in the risk assessment of the group. These risks are included in the mapping of risks at Alstom and are subjected to close monitoring and regular monitoring with the ethics and risk committee.
In terms of operations, Alstom applies due diligence measures that are strengthened and bolstered all along the project. Risks connected to human rights are assessed as of the tender, thanks to an analysis grid, which integrates specific criteria, in particular for high-risk countries that are affected by conflicts, before the implementation of mitigation measures when this is necessary. We also apply rigorous controls to our suppliers, subcontractors, and any third party, including a regular assessment, due diligence, specialized due diligence, and corrective actions if necessary. In case of a serious non-conformity, we put an end to the commercial relations. The efficiency of these provisions verified by this continuous monitoring process, including assessment of suppliers, third-party controls of the people we work with, and plans and remedying actions and alerts through the alert-raising programs are conducted at best.
Thank you for your question. Thank you, Emmanuelle.
We have several questions, and I have four documents that were just handed over to me. The first coming from Mr. Philippe Briseac, who says, "Since this idea of buying Bombardier, is the forecast plan considered to be adequate?" The second question from the same gentleman, "In terms of climate conditions, in particular heat, is the new generation TGV going to be well adapted?"
That's a very good question and very topical. I'll take the first question. Bombardier's trajectory is not the one that we'd considered, let's say. The trajectory for projects coming from Bombardier was not what was expected in 2021. That's a fact. In terms of the quality of financial forecast in 2023, this has been improving.
What I'd like to say is that we talked about how crucial our order intake is and how crucial it is to have it be balanced, and the fact that we have so high activities of service at Alstom is essential for the group, in my opinion. This was brought to the group by Bombardier. I would say that Bombardier, we're not looking at what was going on in the past, a few years ago, but the fact that we have this order intake now, which takes advantage of recurring activities and higher margins with the services, is an advantage for the group. In addition to which, when you look at the situation of rail at the time, consolidation was a good thing, in my opinion.
Thank you, Martin. I now have a question from Mrs. Bénédicte Gontran. Oh, apologies.
I didn't talk about heat in trains, heat waves and trains, because quite a few people are interested in this matter these days. TGV M was designed with nominal running temperatures of 45 degrees, which is higher than what was taken into account with previous TGVs, which was around 40 degrees, and it can run at temperatures that are even beyond 45 degrees. Yes, indeed, the TGV M, our Avelia Horizon range and all of its connected carriages and appliances are adapted to these high temperatures, and it is the application that is going to be allowing us to adapt AC systems to customers' requests. It's been years that we've had a TGV line, for instance, in Morocco, running at these high temperatures.
Keep in mind, this is not the question, but do keep in mind that if TGVs are not running today, it could also be for other reasons. For instance, the high voltage lines and the whole infrastructure, electrical in particular, which is affected with the high temperatures.
Thank you, Martin. I think you are going to like this question. It's from Mrs. Bénédicte Gontran.
Creating, if possible, a club of shareholders visiting the site of Saint-Ouen or offering drinks or a sweet buffet for shareholders. That question is for me, I believe, to answer. I will answer this one. Well, yes, I am in favor of creating a club of shareholders. I do believe this is a good idea. We'll think about it and will come back to you, hopefully, before next year. The very principle of shareholders of our company in this difficult time, as you heard it, we're not in a very favorable situation. If shareholders could actually see, understand, discuss with the teams about what Alstom actually is, the actual Alstom value is, to me, extremely positive. I'm backing your request, and we will favorably answer your question. It will take some time, of course, because that's the way how things in this company.
I believe that before the end of the year, we will be able to set up a club of shareholders. You will therefore meet and have a chance to discuss with the staff, with the teams, discover the products as well this company is able to manufacture. About the drinks and food, of course, I agree, it's not a problem. Next year you will have access to drink and sweet buffet. Sweet snacks only. Seriously, a question from Mr. Bernard Nigen. "What about the future for the joint venture, and why so much delay in TGV M deliveries?"
Well, about the joint venture. The joint venture has played a major role in the high-speed train innovation for Alstom. On the one hand, we have the TGV, and then you also have the joint venture that led to the project with Italo, the high-speed train operated in Italy.
It's a real pride for our teams to see how successful Italo is, which is a success shared with Alstom. The architecture is quite different from our own TGV, since it is an architecture that is articulated so the technology embedded has helped Alstom develop a know-how and therefore to address the overall market. It's definitely part of our technology portfolio so that we can address the high-speed train market. Regarding the delays for the high-speed train deliveries, I will not get into the details because I haven't experienced it directly. What I can say is that with the TGV M, Train M, we have embarked a lot of technology indeed, and it is a project that hadn't been seen these last 30 years.
It's not just incremental train, it's a brand-new train. It also is a brand-new generation of designers we are working with and who has ramping up. It's unusual to come up with such a train that will be a major asset for Alstom. Such a train with the state-of-the-art technologies and the best level global teams is unprecedented, and this is what I would like to insist on. I noticed that when we wrote an article with SNCF about the commissioning of this train in September, the title the journalist decided to keep was, "In a few months from now, we will not be talking about delays," and it was quoting someone working at SNCF. How many trains are being tested currently? Well, currently, we are putting trains in conformity with the homologation process that was launched on May 22.
There are some retrofit operations. Some trains are in the pre-commercial phase. That is to say they are operated by SNCF in order to be able to train some drivers. We want to have six trains, or three multiple units rather, that will be available in September, and 13 trains in total at the end of the year. Then we will reach our full potential in 2027 in terms of manufacturing. Regarding all the customers that we landed with Avelia, we launched an additional assembly line this year.
Thank you. Martin. One question from Mr. Jean Neiman. Sorry if I'm misreading your name, mispronouncing your name. It is a handwritten note. Question for our CFO. What about the financial cost, which is EUR 165 million in 2025 for a debt of EUR 400 million? That is to say, 40% of annual interest rates. Can you explain why such a high cost considering the limited 6% industrial margin?
Of course, it is a very meaningful question that requires further explanations from me, but it would be quite difficult to reconcile the financial result with a net debt for two reasons, actually. First of all, the debt is net of cash, whereas the gross margin we're paying interests on is EUR 2.65 billion. You saw that in the graphs. You saw the debt deadlines. The moment we need to pay the money back, and when you add the two, the gross debt is EUR 2.64 billion. We're not paying interest on EUR 400 million, but on EUR 2.6 billion.
Reason number 2 is that the EUR 160 million do not represent the interest that we're paying out, but it rather reflects the financial result, which is an aggregate, including the pensions costs evolution, but also the current effect of also the cost of the debt. It includes many different things. To answer your questions more specifically, the cost of our debt burden is very limited. The reason to this is that we contracted this debt when interest rates were close to zero. So the cost of net is not 40%, but between 0 and 0.5%. That is one of the problems we have to cope with. The interest rates are now going back up, and the new debts we are taking, we are taking loans at a much higher rate, which is one of the financial challenges for the future.
Thank you, Bernard.
Perhaps we could turn on the lights in this room. We need some more light, please. Let's start the questions here.
Claude Ange. I have a question about the problems in execution during the past fiscal year. According to counts on March 31st, 2026, the adjusted operating margin was 6.1% instead of 7% that was announced repeatedly at the beginning of the year. This operating margin has been suffered by execution problems in 2025, 2026 that triggered late deliveries and complaints from SNCF and RATP. How do you intend, and that is my question, how do you intend to reestablish homogeneous and controlled deliveries for all of your product lines? How do you hence intend to restore credibility and trust of markets and revalue the Alstom share value that has remained way too low for many years?
It's a very good question indeed. I fully subscribe to that question, actually. I will therefore ask this question to our CEO. That's the heart of the matter. That's what you insisted on. This has been the problem for this company for many years.
Thank you for that question. Martin There is no magical recipe. If it involved a couple of decisions and a few staff changes, this would have been done a long time ago. It's important to understand, to comprehend the company's culture and to understand how to strike a balance between project management, businesses, sites, relationships with our customers, since this is part of the railway specificities. When we talk about delayed, Alstom is not the only industrial player suffering from late deliveries. We have our own issues to cope with, unfortunately, we work in an industry whose practices lead to delays.
You're right, we have our own share to take and deal with, we do. Let's not forget that there are things to do in a more general way for the overall industry. There was a meeting with two ministers that was held this very week in order to try and work on the railway sector and somehow to try and improve our working ways with our customers. Back to what Alstom has to do. From what I've seen so far, I believe that we had to work on our design offices and our factories in order to improve our Lean management, our operational excellence practices. There are standards, the way to actually implement them and to create a change culture are important elements that involve the sites that produce trains and all the regions.
I believe there are things to improve in our operating modes. We are doing so with the Alstom leadership team. Regarding costs, we said that we are trying to optimize some sites, Bruges, U.K., Australia. There will be things to do here too, that is the reason why we wanted to take some time before announcing and kicking off a plan. Some programs have been kicked off already to give more empowerment to product managers and to somehow simplify some operating methods. We are currently working on decreasing our costs and boosting our procurement policies. It wouldn't be realistic to tell you that the solutions will be implemented in a few months' time. We will be able to follow a route that will be much more performant than what we followed in the past.
Are there other questions in the room? Please. Armand Schneider.
Going back to the industrial sites, you talked about Bruges and the SNCB order that you did not get. Regarding Germany, I am referring to locomotive workshop, which was created 200 years ago with very good practices and many different both public and private freight customers. These locomotives we see everywhere, including in France, and we do not understand what the benefits will be attached to the selling of this unit. Could you please further elaborate and explain why you decided to sell this factory?
Well, we have been approached in order to enter discussions about the site you referred to. Today, we have no specific project attached to this, but considering the current situation, if we were to find solutions for our employees, for our sites, in order to improve our product line's competitiveness, it would be, of course, my responsibility to consider these.
To date, we haven't found a specific avenue to follow. I am always open to suggestions, and it wouldn't be reasonable to tell you that if we identify the solution to preserve jobs, to improve our footprint, and to improve the product's competitiveness, which is what we need to conclude a successful project, it wouldn't make sense not to consider that project. To date, there is no such thing.
Any other question? Bernard wants me to say it's not about stopping the producing locomotives. It goes without saying.
Please, sir. Thank you, Mr. Jordan. I don't know if you can see me. I have a quick question. There was a change in management, the general management. I am always surprised that in such big companies, we have to recruit outside. I believe that there were production issues, and I believe that these problems were reported on internally.
Why these people, who perhaps acted against their hierarchy by sending a warning message, are not rewarded and are not promoted? I think it's a pity. That was the first thing. About Mr. Poupart-Lafarge's departure, he will cash in EUR 1.3 million. This is resolution number four, plus EUR 2.8 million of non-competition clause paid out during the next 24 months to come. The lawyer's costs paid for by Alstom. Could you remind us of these litigations?
One more thing about the arrival of Mr. Sion, resolution 11. There is a welcome bonus of EUR 1.1 million, and looking at the annual report, it is justified considering its former Arianespace compensation levels that remain confidential. That includes compensation and stock options. Either it's confidential and we say nothing about it, or we are provided clear indications about this amount so that shareholders can actually understand what this EUR 1.2 million is about.
That's why I would rather see internal Alstom people being promoted, especially since they reported on the past problems. I think there are many things attached to your questions. I will try to give you an answer, don't hesitate if I do not answer everything. About internal or external recruitment. You know what? That's not how we thought, how we considered the question. When the board of directors met and decided that it was time to make a change, we worked with the Nominations and Remuneration Committee, relied on a headhunter, if you like, who considered a certain number of applications, both internally and externally, in and out. There were perhaps 30 potential candidates. There was a pre-selection that was operated. We shortlisted 10 candidates. I will give you no names, but they were internal candidates. On these 10 applications, there was a selection.
We shortlisted five candidates. Of the five candidates, the remuneration and nomination committee supported Martin Sion's application as new CEO. There was no exclusive selection process focusing only on external candidates versus internal candidates. Both internal and external candidates were considered. From what I understand in your question, perhaps there was a lack of acknowledgment and internal promotion. This is part of the questions that Martin is currently working on. I believe indeed that someone who spent a certain number of years working for a company, who knows the company, and who contributed to the company's results should be thanked and should benefit from career development opportunities. Agreed on this. Internal promotion schemes are considered, sometimes we need to recruit outside because we believe the right talents are not identified internally when they are required. This is part of the manager's decision.
Regarding the transactional agreement, I have nothing to say. This is something that is submitted to you today. It's your decision. You will decide. This is how things have been planned right from the start. A transactional agreement is submitted to the shareholders' meeting that will say whether they are supporting or not this transactional agreement. The other elements you are referring to about the non-competition agreement or the bonus of Mr. Poupart-Lafarge, these are contractual elements included in the statuses of our company. We only implement the rules of our companies. Nothing more, nothing less. About the compensation package of Mr. Sion. Well, indeed, we supported the proposals that were made by the remuneration and appointment nomination committees to submit all the remuneration proposals as presented to you by Mr. Baudouin Prot. The basic salary of Martin complies with what is adopted in France.
I cannot tell you what this remuneration could be if we were part of a European or global system. Salaries in France are way below what they are in Europe, not to talk about America, because that would definitely scare you away. Regarding the sign-on bonus that you will have to vote on regarding Martin Sion arrival, it represents a share of what Martin lost when he left his former job. Maybe you know, or some of you know, that wages and compensations of executive managers are at three parts. There's a fixed compensation short-term bonus with the objective of the years to each, and there's a longer-term bonus that is calculated over three years to try, and going back to what you said, to the internal promotion schemes, to try and retain the people we do not want to leave. That's what we call the long-term incentive.
This long-term incentive, Martin was entitled to in his former company. It is a private company, we do not have to know the specific amounts. What I can tell you is that what we are proposing today in terms of a sign-on bonus is just a part of what Martin lost. It's just not 100%, but just a part of what he lost. What we already decided altogether was not to pay out cash, but rather to give performant shares. This bonus is subject to the performance of Martin and of the company in the three years ahead. I believe that we are definitely in line with the market and with the international companies' operating rules. Are there other questions?
I'm an individual director, a shareholder. We generated about EUR 1 million in profits. We decided, again, to not issue any dividends, a postponing of EUR 6.4 billion. What is the advantage of keeping this in your accounts, or is there a strategy for using this substantial amount? Second question, the hydrogen trains. There is quite a bit of noise around this, a bit of publicity. Where do we stand today? Could you give us a take stock of the situation? Third point is the renewal of Mr. Baudouin Prot's mandate. We all know and recognize his qualities. I would say there comes a time and an age where maybe you have to hand over. Thank you.
You have three questions, actually. Okay. The first I'll leave to Bernard Delpit, our financial officer.
Yes. Thank you for your question, dear gentleman. Unfortunately, there is unfortunately no massive sum, as was said in French, certainly not to the extent of EUR 6.7 billion, which is an accounting figure which assesses the reallocated reserves and to which a certain profit is reallocated, which is an accounting amount within French standards, financial accounting standards, which is not the representation of cash that could have been generated for the company. I do understand your frustration in terms of dividends, with the caveat of what the General Assembly will approve of. The logic that was retained was first to want to reduce the level of debt of the company, net debt being EUR 400 million, which was reduced by about EUR 40 million this year.
If a fraction of the EUR 300 million in net consolidated profits. If we did this profit sharing back, it would increase the debt of the company. Paying dividends and therefore increasing the debt is not according to us, a good logic. It's up to the shareholders' approval. I'm just going to highlight the logic. If there was, however, EUR 6.7 billion of favorable cash flow, I'd be a lot more relaxed right now, which is not the case. That's unfortunate. What about hydrogen-fired trains?
The news in the last few months is the acquisition that we made of a hydrogen fuel cells acquisition. This appeared to us as being the only solution to have a control over this product that we absolutely need to uphold the commitments that we made vis-a-vis our customers. What I expect is, thanks to the integration of these operations within Alstom, thanks to the support that we can bring in this respect, we have a number of technologies that we're working on. My expectation is for us to have a high-quality product, which will allow us to have a competitive edge. From there, we'll be implementing a strategy. For now, we're just in the consolidation phase of our product so that we can meet our commitments, then we can move forward from there. Thank you.
The question on Baudouin now. Baudouin has demonstrated his value and his expertise during his last two mandates as a director, he conducted quite successfully and diligently the work in terms of the succession of the general director. This is the reason for which the board of directors also plans to renew his mandate as the chairman of the Nominations and Remunerations Committee. In a more general fashion, the board of directors considers that the age of a director does not stop him or her from conducting his missions successfully. The average age within our board is 62. If you look at the SBF 120, it's a little over 60. We are within the industry average. We were talking about Baudouin, but in the first row, you have a director who is 33, is he too young?
It's a comprehensive whole of board of directors, set of shareholders for that matter, is a whole set of skills, experience, expertise, a bit of common sense as well. If you have that amount of common sense that you need to be sure that you can analyze and criticize management when is needed and do the work that you entrust us with, you as shareholders, we as directors, I think that we do our work well. Is there another question? Microphone number three.
Michel Coudrat, individual shareholder. I'm more specifically interested in the level of debt. I am a shareholder of different listed companies, which within their debt either have a bond, maturity plans, or bonds that can be paid back in shares.
These are programs that are not very well explained usually, not very well measured by shareholders, that could disrupt the share prices quite a bit. I'd like to know if in your debt, you have these types of elements that are actually connected to issued bonds and/or the payment of bonds in the form of shares. If this is the case, well, for the future, I would finish with a piece of advice. Please give very precise and clear information so that shareholders not end up multiplying by a certain number, that certain percentage, the impact of this type of debt product or vehicle.
I'm not going to take that one.
Okay. Dear sir, in our debt, we do not have convertible bonds, as they're called. We don't have this type of thing.
We do have more classic types of debt that are going to be paid back in cash. Since 2024, we've had a hybrid debt, as it's called, which is also something that needs to be paid back in cash, but for which we also have the possibility to postpone the maturity. It's hybrid in the sense that it looks like debt, but could also look like capital in the sense that it could be permanent debt. The cost of this debt is connected to the fact that interests illustrate this possibility of transforming a dated instrument into a perpetual instrument. We don't have this type of vehicle where, at the discretion of the company, could lead to a share issuing.
When we do share issuing, we ask it to a general assembly. This afternoon, we are going to have a date on the possibility of conducting capital increases, certainly not, as of today, any debt that would lead to share issuance in a discrete fashion, if that's your question.
Is there another question? Apparently not. I don't think I see anybody else. Is there one more? Okay, well, this will be the last one then. Hello. Hello.
I'm also an individual shareholder. I was wondering about the quality of the delivered carriages and lines. I use the RER and NGRERs in particular. I see that the seats are already damaged and there's a certain number of degradations.
I'm wondering if we are taking the sustainability of the quality of the carriages into consideration, because they are degraded quite quickly. Wondering about this.
The question is for me probably. This is not a comment that I've heard very often. Actually, I've heard quite the opposite, the great satisfaction of our customers, including the RATP and SNCF train lines, in terms of the quality of the products that we deliver. There's a reason for this, is that when we talk about the trains that we make in France for the RATP and SNCF, there's a huge work that's done in common, jointly, specifications that are extremely precise from our customers.
Sometimes our teams complain about this. There's this experience of the RATP and SNCF in that matter, for trains to last as long as possible and the total cost of ownership, as it's called in English, for it to be as optimized as possible. Of course, we take advantage of their experience to choose the raw materials, fabrics, et cetera. I don't know the specific point of the RER that you mentioned, all the feedback that I'm getting is going the other way, usually. Expanding the scope when you have serial trains produced, so in series, the feedback that I am getting from our customers is also very positive in terms of what we deliver. I will look into the one train that you mentioned more specifically if I find any information.
For the 3 months that I spent here, I received this message that we do make very high quality and long-standing trains and up to our customer satisfaction.
Thank you, Martin Sion. I suggest we now move on to the presentation and voting on the resolutions, and I would like to ask the secretary of the select committee to conduct the vote. Emmanuelle, go ahead.
Thank you, Mr. Chairman. We are now going to present the electronic voting procedure. Ladies and gentlemen, shareholders, the box that was given to you after you signed the register is strictly personal. The number of votes that you have and/or that you represent is downloaded in the screen and is seen, so in the box and seen on the screen, you just need to use the green, yellow, and red keys. Green is in favor, yellow is abstention, and red is against.
After the reading of each resolution, you then have to vote immediately. The vote will be considered open at that time. You will be seeing on your screen a rectangle that gives you the countdown of seconds that you have for voting. When the countdown has been completed, the vote will be declared closed, and you can then not vote. The posting of results will be displayed on the screen a few seconds after the closing of each vote. One last clarification, please make sure that you turn off your cell phones during the whole duration of the vote. Make sure that you give the voting boxes back when you exit the room. As indicated at the beginning of the session, the quorum is 20% for ordinary resolutions and 25% for extraordinary resolutions.
The attendance sheet demonstrates that shareholders represented or voting remotely have 331,398 million actions, representing 71.64% of shares carrying voting rights. We've reached the quorum. Resolutions will have to be adopted by majority of the votes held by shareholders present or represented or voting remotely. For the ordinary part of the meeting and by the two-thirds majority for the extraordinary part. I suggest to give you the title of the resolution summarizing the resolution if, of course, no one requests that it be read in full, and I see that there are no objections. I therefore am going to present the resolutions and invite you to vote for each one in turn once I declare the vote is open. First resolution, ordinary resolution, approval of the annual accounts for the financial year ending on 31st of March 2026. Vote open.
The resolution has been adopted. Second resolution, ordinary resolution, approval of the consolidated accounts for the financial year ending 31st of March 2026. Vote is open. Vote closed. Resolution adopted. Third ordinary resolution, appropriation of the result for the financial year ending 31st of March 2026. Vote open. Vote closed. Resolution adopted. Fourth ordinary resolution, approval of a regulated agreement. Vote open. Vote closed. Resolution adopted. Fifth resolution, ordinary resolution, renewal of the term of office of Mr. Baudouin Prot as a director. Vote open.
Vote closed. Resolution approved. Ordinary resolution number 6, appointment of Mr. Pascal Bouchiat as a director. Vote open. Vote closed. Resolution adopted. 7th resolution, ordinary resolution, appointment of Mrs. Ana Girós as a director. Vote open. Vote closed. Resolution adopted. 8th resolution, ordinary resolution as well, appointment of Mr. Martin Sion as a director. Vote open. Vote closed. Resolution adopted. 9th resolution, ordinary resolution, approval of the change of the remuneration policy for 2025/2026 for the chief executive officer. Vote open. Vote closed. Resolution rejected. 10th ordinary resolution, approval of the 2026/2027 remuneration policy for the chief executive officer, excluding sign-on bonus. Vote open. Vote closed. Resolution adopted. 11th resolution, ordinary resolution, approval of the sign-on bonus as a part of the 2026/2027 remuneration policy for the chief executive officer. Vote open. Vote closed. Resolution adopted.
12th resolution, ordinary resolution, approval of the 2026/2027 remuneration policy for the chairman of the board of directors. Vote open. Vote closed. Resolution adopted. Ordinary resolution number 13, approval of the 2026/2027 remuneration policy for directors. Please vote. Vote closed. Resolution adopted. Ordinary resolution 14, approval of the information specified in Article L.22-10-9 of the French Commercial Code report on remuneration. Please vote. Vote closed. Resolution adopted. Ordinary resolution 15, approval of the fixed variable and exceptional components of the total remuneration and benefits of all kinds paid during the last fiscal year or allocated for that fiscal year to Mr. Henri Poupart-Lafarge in his capacity as CEO. Please vote. Vote closed. Resolution approved.
Ordinary resolution 16, approve the fixed variable and exceptional components of the total remuneration and benefits of all kinds paid during the last fiscal year or allocated for that fiscal year to Mr. Philippe Petitcolin as chairman of the board of directors. Please vote. Vote closed. Resolution adopted. Ordinary resolution 17, authorization to be granted to the board of directors to trade in the company's shares. Please vote. Vote closed. Resolution adopted. Extraordinary resolution number 18, authorization to be granted to the board of directors to reduce the share capital by canceling treasury shares. Please vote. Vote closed. Resolution adopted. Extraordinary resolution 19, delegation of authority to be given to the board of directors to decide to increase the share capital by capitalization of premiums, reserves, profits, or any other terms. Please vote. Vote closed. Adopted.
Resolution number 20, extraordinary resolution, delegation of authority to be given to the board of directors to decide to increase the share capital of any company by issuing shares and/or securities, giving immediate or future access to share capital with preferential subscription rights. Please vote.
The vote is closed. Adopted. Extraordinary resolution 21: delegation of authority to be given to the Board of Directors to decide to increase the share capital of the company or any other company by issuing shares and/or securities giving immediate or future access to the share capital without preferential subscription rights by public offering. Please vote. Vote closed. Resolution adopted. Extraordinary resolution 22: delegation of authority to be given to the Board of Directors to decide to increase the share capital of the company by issuing shares and/or security giving immediate or future access to the share capital without preferential subscription rights according to Article 411 of the French Monetary and Financial Code. Please vote. Vote is closed. Adopted.
Extraordinary resolution 23: delegation of authority to be given to the Board of Directors to decide to increase the company's share capital by issuing shares and/or securities giving immediate or future access to the share capital without preferential subscription rights reserved for members of saving plans. Please vote. Vote closed. Resolution adopted. Extraordinary resolution 24: delegation of authority to be given to the Board of Directors to decide to increase the company's share capital by issuing shares and/or securities giving immediate or future access to the share capital without preferential rights. Please vote. Vote closed. Adopted. Extraordinary resolution 25: delegation of authority to decide to increase the company's share capital by issuing shares and/or securities, giving immediate or future access reserved for one or more named beneficiaries. Please vote. Vote is closed. Adopted.
Extraordinary resolution 26: delegation of authority to increase the board of securities to be issued in the event of capital increase. Please vote. Vote closed. Resolution adopted. Extraordinary resolution 27: right to issue shares and/or securities giving immediate or future access to shares to be issued by the company for contribution in kind. Please vote. Vote is closed. Adopted. Extraordinary resolution 28: delegation of authority to issue shares in a company following the issue by subsidiaries of the company's securities giving access to the company's share capital without preferential subscription rights. Please vote. Vote is closed. Adopted. Extraordinary resolution 29: authorization to be given to the Board of Directors to make free grants of existing shares or shares to be issued to employees and corporate officers. Please vote. Closed. Approved. Extraordinary resolution 30: amendment to the articles of association, staggering of director terms of office. Please vote. Vote closed.
Resolution adopted. Last and 31st ordinary resolution: powers to carry out legal formalities. Please vote. The vote is closed. Resolution adopted. Thank you very much.
Thank you, Emmanuelle. I would like to remind you that hostesses are here to help you and collect the voting devices that can only be used here anyway, so they will be only used for electronic votes. Before the session is closed, I would like to thank you indeed and again for your attendance and renewed trust. Thank you so much.