Slide 1: Results Presentation Fiscal Year 2022
Results Presentation Fiscal Year 2022 28 February 2023
Slide 2: Table of contents
Table of contents 1. Executive summary 2. Other materials I. Business performance II. Financial results ANNEX 1
Slide 3: Executive Summary – Key Highlights
Executive Summary – Key Highlights FY-2022 ▪ High social commitment with highest Health & Safety standards and Freq. Index. 9.961 employee engagement. I. ESG CO2 emmisions 4.8152 ▪ Environmental policies across all operations and developments. Board members 10 (-33%) ▪ Corporate Government best prac
Slide 4: I. ESG
I. ESG ▪ Employee Management Business Model : o Health & Safety highest standards in the industry as main priority, with the objective to target zero accidents in the business activity. o Launch of new talent and professional careers management model to encourage employee-company engagement. ▪ Corpo
Slide 5: II. Business performance (I/II)
II. Business performance (I/II) Operating challenges Action plan ➢ Updated salary base for 2021-22 agreed with unions (9.2% in two years). ➢ >70% backlog with indexation clauses (maintenance contracts). Inflation / ➢ Back-to-back client/suppliers reducing exposure to prices volatility. Raw materials
Slide 6: II. Business performance (II/II)
II. Business performance (II/II) ▪ Company backlog stood at €2.7 bn in FY-2022, which reaches €3.0 bn when considering the contracts already awarded pending to precedent conditions o Manufacturing backlog most significant projects comprises DB Talgo 230 trains (Germany), Renfe VHS powerheads (Spain)
Slide 7: III. Financial results – P&L
III. Financial results – P&L ▪ Revenues reached €469.1 m in the period, 15% below previous year as a result of: FY-2022 o Impact of delays caused by supply chain disruptions in manufacturing, to be recovered in 2023. Revenues €469.1 m o Change in mix of projects, from Spain VHS and €52.5 m Egypt to
Slide 8: III. Financial results – Balance Sheet
III. Financial results – Balance Sheet ▪ Working Capital and Net Financial Debt increased in the period reflecting current manufacturing phases: FY-2022 o Renfe VHS project cash-ins are expected for 2023 as trains deliveries start. Working Capital €217.3 m o AAD2 structure (DB project) used in line
Slide 9: III – Outlook FY2022 review and FY2023 targets
III – Outlook FY2022 review and FY2023 targets Targets Performance Targets FY2022 FY2022 FY2023 Profitability ✓ Adjusted EBITDA: c. 11% P c. 11% c. 12% ✓ Working Capital: Cash consumption P + €51 m Stable WC Capital structure ✓ Net Debt: c. 2.5x aEBITDA P 1.9x c. 2.0x ✓ Capex: c. €25 m P €21 m c. €3
Slide 10: Table of contents
Table of contents 1. Executive summary 2. Other materials I. Business performance II. Financial results ANNEX 9
Slide 11: Commercial activity
Commercial activity Rolling stock market and Talgo’s pipeline1 Talgo pipeline 2023-2024: €7.6 bn 37.4 +2.8% 44.1 +2,2% 10.0 NAFTA: CIS/Asia: 8.8 €0.1 bn Europe: €0.8 bn +9.4% 5.9 €3.3 bn 3.4 10.8 +4.3% 13.9 Talgo Pipeline: MENA: 27% (€7.6 bn) €3.4 bn 14.4 +0.0% 14.4 2019-2021 2025-2027 Loco & coache
Slide 12: Backlog breakdown
Backlog breakdown Backlog FY-2022 1 Times LTM Manufacturing 5.9x 5.5x 6.5x Revenues €0.6 bn (23%) (2) 3,249 280 3,028 2,748 Maintenance €2.7 bn Awarded and €2.0 bn (71%) pending to precedent Remodelling conditions €0.1 bn (5%) FY-2021 FY-2022 FY-2022 bis ▪ Backlog as of December 2022 amounted €2.7 b
Slide 13: Manufacturing projects – High Speed
Manufacturing projects – High Speed Backlog FY-2022 Renfe Avril VHS (Spain) ▪ Project scope – €900 m: Manufacturing o Manufacture of 30 VHS “Avril” trains. €0.6 bn (23%) o Maintenance for a period of 30 years1. ▪ Project status: o Under dynamic testing activity. €2.7 bn o Significant testing milesto
Slide 14: Manufacturing projects – Long distance / Passenger coaches
Manufacturing projects – Long distance / Passenger coaches Backlog FY-2022 DB Talgo 230 km/h (Germany) ▪ Project scope – €550 m (€2.3 bn)1: Manufacturing o Framework contract for the manufacture of up to €0.6 bn (23%) 100 Talgo 230 trains. o Initial order for the manufacture of 23 trains. o Second o
Slide 15: Light maintenance projects
Light maintenance projects Backlog FY-2022 Location of fleet maintained Maintenance €2.7 bn €2.0 bn (71%) ▪ Commercial services resumed during 2022 reaching pre-Covid levels in all markets. ▪ Launching maintenance services new markets (Egypt), where Talgo new trains are being delivered. ▪ Strong mai
Slide 16: Overhaul / heavy maintenance projects
Overhaul / heavy maintenance projects Backlog FY-2022 Conversion of night trains into VHS (Spain) ▪ Project scope – €107 m: o Conversion of Talgo S7 compositions(1). Remodelling o The initial project includes 156 coaches (13 €0.1 bn (5%) compositions) with an option for additional 72 coaches (6 comp
Slide 17: Table of contents
Table of contents 1. Executive summary 2. Other materials I. Business performance II. Financial results ANNEX 16
Slide 18: Profit & loss – Revenues
Profit & loss – Revenues Quarterly revenues (€m) Revenues by business line1 (€m) 3% 134.5 118.3 116.9 99.4 36% 61% Q1-2022 Q2-2022 Q3-2022 Q4-2022 Manufacturing Maintenance Maint. Equip. and other ▪ Revenues reached €469.1 m in FY-2022, below previous year due to lower pace of manufacturing projects
Slide 19: Profit & loss – EBITDA and Net Profit
Profit & loss – EBITDA and Net Profit 20 aEBITDA margin (%) Net Profit (€m) 18 35 16 15.1 14.0 27.5 12.7 30 14 12 10.7 25 10 20 8 10.7% 10.8% 11.2% 12.0% 15 6 10 4 2 5 1.4 0 0 Q1-2022 Q2-2022 Q3-2022 Q4-2022 aEBITDA aEBITDA margin FY-2021 FY-2022 ▪ aEBITDA amounted to € 52.5 m in FY-2022 (margin of
Slide 20: Balance Sheet – Working Capital
Balance Sheet – Working Capital ▪ The Working Capital decreased in H2-2022 reflecting underlying cash flow volatility usually registered the execution period of projects. However, WC increased in the one-year period to reach €217.3 m in FY-2022. ▪ Reschedule of manufacturing projects reducing degree
Slide 21: Cash Flow – Free Cash Flow
Cash Flow – Free Cash Flow ▪ Current manufacturing cycle, together with delays caused by supply chain disruptions registered in the period resulted on higher cash investments in Working Capital, offsetting the aEbitda generated in the period. ▪ Working Capital mainly reflects degree of progress of p
Slide 22: Balance Sheet – Net Financial Debt
Balance Sheet – Net Financial Debt Net Financial Debt (€m)1 Total financial debt2 – Repayment schedule (€m) NFD / LTM Adjusted 0.5x 1.9x EBTIDA 99 97.4 80 52 50 51 35.9 FY-2021 FY-2022 2023 2024 2025 2026 >2027 ▪ Average long-term debt maturity at 2.5 years with Financial debt breakdown (€m) an aver
Slide 23: Table of contents
Table of contents 1. Executive summary 2. Other materials I. Business performance II. Financial results ANNEX 22
Slide 24: Annex 1. P&L
Annex 1. P&L Profit & Loss Account (€m) 2022 2021 % Change Total net turnover 469.1 555.4 (15.5%) Other income 15.3 12.4 23.1% Procurement costs (211.0) (317.2) (33.5%) Employee welfare expenses (150.7) (142.5) 5.8% Other operating expenses (73.4) (47.5) 54.4% EBITDA 49.3 60.6 (18.6%) % Ebitda margi
Slide 25: Annex 2. Balance sheet
Annex 2. Balance sheet Balance Sheet (€m) Dec 2022 Dec 2021 Dec 2020 FIXED ASSETS 265.9 262.9 257.0 Tangible + intangible assets 129.4 122.0 115.2 Goodwill 112.4 112.4 112.4 Other long term assets 24.0 28.5 29.3 CURRENT ASSETS 868.9 768.6 645.9 Inventories 189.5 133.2 145.3 Non- current assets held
Slide 26: Annex 2. Balance sheet (2)
Annex 2. Balance sheet (2) Financial debt (€m) Dec 2022 Dec 2021 Dec 2020 Long term financial liabilities 232.3 248.1 238.4 Short term financial liabilities 99.1 36.0 41.1 Financial leasings 5.4 4.7 6.9 Cash & cash equivalents (239.4) (253.0) (238.3) Net financial debt 97.4 35.9 48.1 Adjusted EBITDA
Slide 27: Annex 3. Cash flow statement
Annex 3. Cash flow statement Cash flow statement (€m) 2022 2021 % Change Net income 1.4 27.5 (94.8%) Corporate income tax 13.5 8.2 65.8% Depreciation & Amortization 17.8 18.6 (4.6%) Financial income/Financial expenses 11.6 8.1 43.2% Other result adjustments 14.1 (5.0) n.a. Changes in working capital
Slide 28: Alternative Performance Measures - definitions
Alternative Performance Measures - definitions ▪ Book-to-bill: Ratio of orders awarded in a period to the sum of revenues for that same period ▪ Order intake: represents the new orders recognized in a certain period. A new order is recognised as an order received only when the contract is awarded an
Slide 29: Disclaimer
Disclaimer This presentation has been prepared and issued by Talgo, S.A. (the “Company”) for the sole purpose expressed therein. Therefore, neither this presentation nor any of the information contained herein constitutes an offer sale or exchange of securities, invitation to purchase or sale shares
Slide 30: Talgo