Slide 1: Talgo's Results 1H 2020
Talgo’s Results 1H 2020 21 July 2020
Slide 2: Table of content
Table of content 1. Key business highlights 2. COVID-19 impact and measures 3. Business Performance 4. Financial Results 5. Outlook APPENDIX 1
Slide 3: Key business highlights of 1H2020
Key business highlights of 1H2020 Strong measures implemented with the objective of protecting employees health o 3.7% of the company workforce affected by the COVID-19 Social awareness committing the company in the fight against the outbreak Negative temporary impact of COVID-19 on 1H2020 res
Slide 4: Table of content
Table of content 1. Key business highlights 2. COVID-19 impact and measures 3. Business Performance 4. Financial Results 5. Outlook APPENDIX 3
Slide 5: Wide range of measures successfully implemented adapting business dynamics (i)
Wide range of measures successfully implemented adapting business dynamics to medical and clients requirements and needs (i) Manufacturing activity Maintenance activity Other activities Slowdown in manufacturing Significant drop or suspension Slow down in overhaul activity activity during 1H20
Slide 6: Wide range of measures successfully implemented adapting business dynamics (ii)
Wide range of measures successfully implemented adapting business dynamics to medical and clients requirements and needs (ii) Implemented packages of measures for all employees with tests, health-care materials and remote working. Employment protection measures temporarily transferring personnel
Slide 7: Talgo committed in the fight against COVID
Talgo committed in the fight against COVID Developing solutions for operators to ensure passengers safety Social commitment with financial and talent resources to support organizations improving measures aimed to fight the outbreak “Talgo supports Spanish National Scientific Research Council (CS
Slide 8: Table of content
Table of content 1. Key business highlights 2. COVID-19 impact and measures 3. Business Performance 4. Financial Results 5. Outlook APPENDIX 7
Slide 9: Significant opportunities ahead throughout all segments of activity with focus on European markets
Significant opportunities ahead throughout all segments of activity with focus on European markets Evolution of the order intake 2018 – 1H2020 (€m) Talgo pipeline by geography 2020-2021(1) LTM Book- 2% 0.5x 2.8x 0.3x 11% to-bill ratio 1,134 10% Pipeline 8.0 €b 77% 176 142 Europe MENA APAC Other 2018
Slide 10: Diversified backlog with high quality projects and proven execution track-record
Diversified backlog with high quality projects and proven execution track-record as best guarantee for clients and shareholders Backlog 1H2020 (€m) Times LTM 8.3x 7.3x 8.0x Revenues 317 (1) 3,655 Strong backlog with increased 3,347 3,338 manufacturing scope provides Awarded, significant visibility o
Slide 11: Manufacturing projects – High Speed
Manufacturing projects – High Speed Renfe Avril VHS (Spain) – 897 €m UTY Talgo 250 HS (Uzbekistan) – 57 €m Project scope: Project scope: o Manufacture of 30 VHS “AVRIL” trains . o Manufacture of 2 HS Talgo 250 trains. o Maintenance for a period of 30 years. o Manufacture of 4 additional coaches.
Slide 12: Manufacturing projects – Long distance / passenger coaches
Manufacturing projects – Long distance / passenger coaches Deutsche Bahn Talgo 230 (Germany) – 550 €m (2.3 €b)1 Project scope: o Framework contract to manufacture of up to 100 trains. o The first order includes the manufacture of 23 trains. Project execution: o In the design and engineering phas
Slide 13: Heavy maintenance and overhaul projects
Heavy maintenance and overhaul projects Conversion of night trains into VHS compositions (Spain) – 107 €m Project scope: o Conversion of Talgo’s series 7 “train hotel”. o Initial project includes 156 coaches (13 compositions) with an option for an additional 72 coaches (6 compositions). Project
Slide 14: Light maintenance projects
Light maintenance projects COVID-19 impacted very significant in the Fleet maintained in # of units by geographical area maintenance activity during 1H2020, with a strong drop or even full stoppage of commercial 3% 7% services registered in most markets with presence. However, the maintenance ac
Slide 15: Table of content
Table of content 1. Key business highlights 2. COVID-19 impact and measures 3. Business Performance 4. Financial Results 5. Outlook APPENDIX 14
Slide 16: Profit & Loss – Revenues
Profit & Loss – Revenues Revenues – Cumulative (€m) Revenues amounted 216.6 €m in 1H2020 (+29% vs. 1H2019) reflecting the increased industrial activity driven by manufacturing projects, mainly +29% 216.6 Spain VHS project. 167.8 Quarterly revenues reflected mix results by business line: o Strong
Slide 17: Profit & Loss – Ebitda
Profit & Loss – Ebitda Operating profitability decreased in the period Adj. Ebitda (€m) and margin (%) 50 45 mainly due to COVID impact on industrial 40 activity: 35 31.0 30 o Manufacturing projects lower productivity and 25 20 18.5% 14.7 supply chain disruption in the period negatively 15 10 6.8%
Slide 18: Balance sheet – Working Capital performance
Balance sheet – Working Capital performance Working Capital increased in 1H2020 mainly due to the increase of materials supply for the projects under execution. Working capital profile of main projects under execution: Spanish VHS project, already in o Spanish VHS project: 2020 will be cash-cons
Slide 19: Balance Sheet – Net Financial Debt
Balance Sheet – Net Financial Debt Net Financial Debt (€m)(1)(2) Long term bank debt – repayment calendar (€m) NFD / LTM Adjust. (1.0x) (0.9x) (0.4x) 98 33% of debt maturities in EBTIDA the period 2020-2022 80 52 (23.1) 27 9 (64.2) (66.6) 1H2019 2019 1H2020 2H2020 2021 2022 2023 >2024 Talgo gross
Slide 20: Cash Flow – Free Cash Flow
Cash Flow – Free Cash Flow Moderate cash consumption was registered during 1H2020, driven by an expected higher working capital required for manufacturing projects, resulting on negative FCF in the period amounting -34.8 €m. Free Cash Flow of the period was the result of mix on business lines wi
Slide 21: Table of content
Table of content 1. Key business highlights 2. COVID-19 impact and measures 3. Business Performance 4. Financial Results 5. Outlook APPENDIX 20
Slide 22: Outlook – Strong confidence with recovery capacity
Outlook – Strong confidence with recovery capacity Talgo withdrew business guidance given for the year 2020 in march due to COVID-19 Given the significant level of uncertainty over the business performance during 2H2020 mainly related to the maintenance activity, the company will not provide new
Slide 23: Table of content
Table of content 1. Key business highlights 2. COVID-19 impact and measures 3. Business Performance 4. Financial Results 5. Outlook APPENDIX 22
Slide 24: Appendix 1. Profit & Loss
Appendix 1. Profit & Loss Profit & Loss Account (€m) 1H20 1H19 % Change Total net turnover 216.6 167.8 29.1% Other income 4.5 2.6 74.0% Procurement costs (124.3) (55.9) 122.6% Employee welfare expenses (59.0) (59.9) (1.4%) Other operating expenses (25.9) (26.7) (3.2%) EBITDA 11.8 27.8 (57.5%) % Ebit
Slide 25: Appendix 2. Balance Sheet
Appendix 2. Balance Sheet Balance Sheet (€m) June 2020 June 2019 Dec 2019 FIXED ASSETS 248.0 250.3 249.9 Tangible + intangible assets 105.2 103.1 106.0 Goodwill 112.4 112.4 112.4 Other long term assets 30.4 34.8 31.5 CURRENT ASSETS 617.7 603.2 632.9 Inventories 157.3 102.9 129.8 Non- current assets
Slide 26: Appendix 2. Balance Sheet (2)
Appendix 2. Balance Sheet (2) Financial debt (€m) June 2020 June 2019 Dec 2019 Long term financial liabilities 217.6 222.8 198.7 Short term financial liabilities 49.0 34.3 58.6 Financial leasings 1.5 1.1 1.7 Cash & cash equivalents (291.1) (322.3) (325.6) Net financial debt (23.1) (64.2) (66.6) Adju
Slide 27: Appendix 3. Cash Flow Statement
Appendix 3. Cash Flow Statement Cash flow statement (€m) 1H20 1H19 % Change 2019 Net income (5.7) 14.0 (140.8%) 38.4 Corporate income tax 3.7 2.7 34.0% 4.5 Depreciation & Amortization 8.1 7.2 11.8% 15.8 Financial income/Financial expenses 3.1 4.0 (24.0%) 8.3 Other result adjustments 0.1 (4.6) (102.0
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