Talgo Sa · BME:TLGO
Talgo Sa — H1 2022 Earnings Presentation
30 slides from Talgo Sa's earnings presentation, Jul 28, 2022
Slide 1: Results Presentation Half Year 2022
Results Presentation Half Year 2022 28 July 2022
Slide 2: Table of contents
Table of contents 1. Key Highlights 2. Other materials I. Business performance II. Financial results ANNEX 1
Slide 3: Key Highlights
Key Highlights ▪ Highest Health & Safety standards and best ESG practices. H1-2022 ▪ New paradigm driven by a challenging environment due to I. Business Backlog €2,880 m increase in raw materials costs, inflation and supply chain disruptions performance as strongest concerns… ▪ … while adapting stra
Slide 4: I. Business performance (I/III)
I. Business performance (I/III) ▪ Employee Management Business Model focused on: o Health & Safety highest standards in the industry as main priority, with the objective to target zero accidents in the business activity. o Employee engagement as critical driver for enhancing business competitive adv
Slide 5: I. Business performance (II/III)
I. Business performance (II/III) Business main operating challenges Action plan ➢ Updated salary base for period 2021-22 (9.2%). ▪ Existing contracts: ➢ >70% backlog with indexation clauses. ➢ Negotiating with clients to reflect strong ▪ Increasing labor costs. inflation through prices adjustments.
Slide 6: I. Business performance (III/III)
I. Business performance (III/III) ▪ Company backlog stood at €2.9 bn in H1-2022 o Manufacturing projects comprising mainly DB Talgo 230 trains (Germany), Renfe VHS powerheads (Spain) and DSB Talgo 230 coach compositions (Denmark). o Maintenance represents 69% of the backlog and comprise services pro
Slide 7: II. Financial results – P&L
II. Financial results – P&L ▪ Revenue drop in the period to €99.4 m in 2Q mainly H1-2022 driven by supply chain disruptions causing delays in Revenues €217.7 m manufacturing projects. €23.4 m ▪ Maintenance services in fully operation activity aEBITDA (10.7%) providing stability and recurrency to the
Slide 8: II. Financial results – Balance Sheet
II. Financial results – Balance Sheet ▪ Working Capital and Net Financial Debt increase in the period reflects current context and manufacturing phases. H1-2022 o Egypt and Renfe projects cash-ins expected as trains delivery starts in 2022 and 2023. Working Capital €277.7 m o AAD2 structure (DB proj
Slide 9: Update on 2022 Outlook
Update on 2022 Outlook FY-2022 targets H1-2022 Update (as per FY-2021 Results presentation) Profitability ✓ aEBITDA: >13% c. 11% ✓ Working Capital: Cash consumption Cash consumption Capital ✓ Net Financial Debt: 1.5x aEBITDA c. 2.5x structure ✓ Capex: c. €25 m c. €25 m Business ✓ 2021-22 backlog exe
Slide 10: Table of contents
Table of contents 1. Key Highlights 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 2022-2024: €9.2 bn 37.4 +2.8% 44.1 +2,2% 10.0 NAFTA: CIS/Asia: 8.8 €0.1 bn Europe: €0.4 bn +9.4% 5.9 €5.2 bn 3.4 10.8 +4.3% 13.9 Talgo Pipeline: MENA: 27% (9.2 €b) €3.5 bn 14.4 +0.0% 14.4 2019-2021 2025-2027 Loco & coaches
Slide 12: Backlog breakdown
Backlog breakdown Backlog H1-2022 LTM times 1 6.5x 5.9x 6.0x Revenues Manufacturing €0.7 bn (25%) 3,249 3,184 2,880 Maintenance €2.8 bn €2.0 bn (69%) Remodelling €0.1 bn (5%) 2020 2021 H1-2022 ▪ Backlog as of June 2022 amounting €2.8 bn: o High level of industrial activity expected for the following
Slide 13: Manufacturing projects – High Speed
Manufacturing projects – High Speed Backlog H1-2022 Renfe Avril VHS (Spain) ▪ Project scope – €900 m: Manufacturing o Manufacture of 30 VHS “Avril” trains. €0.7 bn (25%) o Maintenance for a period of 30 years1. ▪ Project status: o Under dynamic testing activity with deliveries €2.8 bn expected to st
Slide 14: Manufacturing projects – Long distance / Passenger coaches
Manufacturing projects – Long distance / Passenger coaches Backlog H1-2022 DB Talgo 230 km/h (Germany) ▪ Project scope – €550 m (€2.3 bn)1: Manufacturing o Framework contract for the manufacture of up to €0.7 bn (25%) 100 Talgo 230 trains. o Initial order for the manufacture of 23 trains. o Maintena
Slide 15: Light maintenance projects
Light maintenance projects Backlog H1-2022 Location of fleet maintained Maintenance €2.8 bn €2.0 bn (69%) ▪ Commercial services have been resumed during the first half of 2022 to reach pre-Covid levels in all markets. ▪ Strong maintenance backlog with an increasing installed base, which is expected
Slide 16: Overhaul / heavy maintenance projects
Overhaul / heavy maintenance projects Backlog H1-2022 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. Key Highlights 2. Other materials I. Business performance II. Financial results ANNEX 16
Slide 18: Profit & loss – Revenues
Profit & loss – Revenues Cumulative revenues - YoY (€m) Revenues by business line2 (€m) 10% 293.3 217.7 34% 56% H1-2021 H1-2022 Manufacturing Maintenance Maint. Equip. and other ▪ Revenues reached €217.7 m in H1-2022, below same period of 2021: o Lower pace of manufacturing projects caused by supply
Slide 19: Profit & loss – EBITDA and Net Profit
Profit & loss – EBITDA and Net Profit aEBITDA (€m) and margin (%) Net Profit (€m) 15 30.5 35 13 30 11 10.2 25 23.4 9 20 10.7% 7 15 10.4% 5.3 5 10 3 5 0 1 H1-2021 H1-2022 -1 aEBITDA aEBITDA margin H1-2021 H1-2022 ▪ aEBITDA amounted to€ 23.4 m in H1-2022 (margin of 10.7%): o Margins adjustments on man
Slide 20: Balance Sheet – Working Capital
Balance Sheet – Working Capital ▪ The Working Capital increased in the period to reach €277.7 m in H1-2022. ▪ Reschedule of manufacturing projects reducing degree of advance results on 1) delays in collection milestones 2) higher inventories and suppliers payments. ▪ DB project (Germany) as main rev
Slide 21: Cash Flow – Free Cash Flow
Cash Flow – Free Cash Flow ▪ High Working Capital requirements in the period offset aEBITDA generated and required cash investments in the projects. ▪ However, Working Capital has a low profile risk given the projects and clients on backlog (low technical risk and low risk of collections). On top of
Slide 22: Balance Sheet – Net Financial Debt
Balance Sheet – Net Financial Debt Net Financial Debt (€m)(1) LT bank debt – Repayment schedule (€m) NFD / LTM Adjusted 0.5x 2.8x EBTIDA 92 163.3 88 52 32 35.9 11 2021 H1-2022 H2-2022 2023 2024 2025 >2026 Financial debt breakdown (€m) ▪ Average long-term debt maturity at 2.95 years with an average c
Slide 23: Table of contents
Table of contents 1. Key Highlights 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) 1H22 1H21 % Change Total net turnover 217.7 293.3 (25.8%) Other income 9.9 7.5 31.8% Procurement costs (99.0) (180.2) (45.1%) Employee welfare expenses (73.4) (70.2) 4.5% Other operating expenses (35.8) (22.1) 62.1% EBITDA 19.5 28.3 (31.2%) % Ebitda margin 9.0
Slide 25: Annex 2. Balance sheet
Annex 2. Balance sheet Balance Sheet (€m) June 2022 June 2021 Dec 2021 FIXED ASSETS 267.8 258.0 262.9 Tangible + intangible assets 125.9 118.1 122.0 Goodwill 112.4 112.4 112.4 Other long term assets 29.5 27.5 28.5 CURRENT ASSETS 756.5 686.2 768.6 Inventories 157.2 150.7 133.2 Non-current assets held
Slide 26: Annex 2. Balance sheet (2)
Annex 2. Balance sheet (2) Financial debt (€m) June 2022 June 2021 Dec 2021 Long term financial liabilities 196.6 259.3 248.1 Short term financial liabilities 100.2 21.3 36.0 Financial leasings 6.2 5.4 4.7 Cash & cash equivalents (139.8) (218.2) (253.0) Net Financial Debt 163.3 67.8 35.9 Adjusted EB
Slide 27: Annex 3. Cash flow statement
Annex 3. Cash flow statement Cash flow statement (€m) 1H22 1H21 % Change Net income 5.3 10.2 (48%) Corporate income tax 3.0 5.0 (40%) Depreciation & Amortization 8.6 9.1 (5%) Financial income/Financial expenses 8.1 4.7 72% Other result adjustments (5.0) 0.4 n.a. Changes in working capital (13.8) (33
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
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