Slide 1: Results Presentation Half Year 2023
Results Presentation Half Year 2023 27 July 2023
Slide 2: Disclaimer
Disclaimer This presentation has been prepared and issued by Talgo, S.A. (the “Company”) for the sole purpose expressed herein. Therefore, neither this presentation nor any of the information contained herein constitutes an offer, sale or exchange of securities, invitation to purchase, sale or excha
Slide 3: Table of contents
1. Executive summary 2. Other materials Table of I. Business performance contents II. Financial results ANNEX
Slide 4: Executive Summary – Key Highlights
Executive Summary – Key Highlighs ▪ ESG as key element in the pursuit of business excellence. H1-2023 Decreasing working accidents rates to reflect PRL improvements. Accident freq.1 7.21 Business ▪ Strong manufacturing pace while addressing new measures to Severity2 0.29 Performance increase capacit
Slide 5: I. Business performance (I/II)
I. Business performance (I/II) ▪ Unique commercial momentum for Talgo leading Talgo’s backlog and order intake to historical highs. o DSB extension awarded in H1-2022 for eight additional Talgo 230 compositions with value amounting €184 m. o DB extension awarded in H1-2022 for 56 additional Talgo 23
Slide 6: I. Business performance (II/II)
I. Business performance (II/II) ▪ Manufacturing gaining pace and maintenance consolidating stability while delivering best-in-class operating ratios: o Ramping up manufacturing activity lead by first orders of DB (Germany) and DSB project (Denmark) and supported by RENFE powerheads and night trains
Slide 7: II. Financial results – P&L
II. Financial results – P&L ▪ Revenues reached €289 m in H1-2023, 33% higher than same period of 2022 as a result of: o Manufacturing projects gaining industrial activity in H1-2023 H1-2022 line with schedules, led by DB, DSB and Renfe. Revenues €289 m €218 m o Maintenance services as recurrent reve
Slide 8: II. Financial results – Balance sheet
II. Financial results – Balance sheet ▪ Working Capital and Net Financial Debt increased in line with manufacturing phases, but improved leverage ratios: H1-2023 H1-2022 o FY-2023 expectations remain unchanged, supported €304 m €278 m by expected Renfe VHS project collections linked to Working Capit
Slide 9: III. Outlook
III. Outlook Targets FY2023 H1-2023 Update Profitability ✓ aEBITDA: c. 12% c. 12% ✓ Working Capital: Stable Working Capital stable3 Capital ✓ Net Financial Debt: c. 2.0x aEBITDA c. 2.0x structure ✓ Capex: c. €30 m c. €30 m1 Business ✓ 2023-24 backlog execution: c. 40%2 c. 40%2 in 2023-24 performance
Slide 10: III. Outlook - Business long term vision (I/II)
III. Outlook - Business long term vision (I/II) ➢ Backlog at historical highs driven by recent awards providing long-term Backlog revenues visibility ➢ Commercial momentum to support additional opportunities in core markets ➢ New contracts with indexation clauses to protect margins over inflation vo
Slide 11: III. Outlook - Business long term vision (II/II)
III. Outlook - Business long term vision (II/II) Long-term expectations (3 years time) Revenues expected to reach historical Revenues Over €700 m highs in accordance with current backlog and schedules Margins to remain strong aEBITDA 14-15% consolidating best-in-class profitability ratios on the ind
Slide 12: Table of contents
1. Executive summary 2. Other materials Table of I. Business performance contents II. Financial results ANNEX
Slide 13: Commercial activity
Commercial activity Rolling stock market and Talgo’s pipeline1 Talgo pipeline 2023-2025: €6.4 bn 37.4 +2.8% 44.1 +2,2% 10.0 8.8 Europe: +9.4% 5.9 €4.3 bn CIS/Asia: 3.4 MENA: €0.1 bn 10.8 +4.3% 13.9 Talgo Pipeline: €2.0 bn 19% (€6.4 bn) 14.4 +0.0% 14.4 2019-2021 2025-2027 Loco & coaches EMUs VHS/HS O
Slide 14: Backlog breakdown
Backlog breakdown Backlog H1-2023 (€m) 5.5x 4.9x Times LTM 8.2x Revenues Manufacturing (1) 4,428 1,680 €0.7 bn (26%) Maintenance 2,748 2,668 €2.7 bn €1.9 bn (69%) Awarded and pending to Repairs and other precedent conditions €0.1 bn (5%) FY-2022 H1-2023 H1-2023 bis ▪ Talgo’s backlog to reach histori
Slide 15: Manufacturing projects – High Speed
Manufacturing projects – High Speed Backlog H1-2023 Renfe Avril VHS (Spain) ▪ Project scope – €900 m: Manufacturing o Manufacture of 30 VHS “Avril” trains. €0.7 bn (26%) o Maintenance for a period of 30 years1. ▪ Project status: o Start of deliveries in the coming months. o Strong cash collections e
Slide 16: Manufacturing projects – Long distance / passenger coaches
Manufacturing projects – Long distance / passenger coaches Backlog H1-2023 DB Talgo 230 km/h (Germany) ▪ Project scope – €1.9 bn (€2.5 bn)1: Manufacturing o Framework contract for up to 100 Talgo 230 trains. €0.7 bn (26%) o Initial order for 23 trains. o Second order awarded in H1-2023 for 56 trains
Slide 17: Light maintenance activity
Light maintenance activity Backlog H1-2023 Location of fleet maintained €2.7 bn Maintenance €1.9 bn (69%) ▪ Installed base stable during H1-2023 with successful delivery services and recurrent revenue contribution. ▪ Stable maintenance backlog with significant upside driven by the existing manufactu
Slide 18: Repairs and overhaul projects
Repairs and overhaul projects Backlog H1-2023 Conversion of night trains into VHS (Spain) ▪ Project scope – €107 m: Repairs and other o Conversion of Talgo S7 compositions(1). €0.1 bn (5%) o The initial project includes 156 coaches (13 compositions) with an option for additional 72 coaches (6 compos
Slide 19: Table of contents
1. Executive summary 2. Other materials Table of I. Business performance contents II. Financial results ANNEX
Slide 20: Profit and Loss – Revenues
Profit and Loss – Revenues Revenues (€m) Revenues by business line(1) 3% 288.6 217.7 38% 59% Manufacturing & Repairs Maintenance H1-2022 H1-2023 Maint. Equip. and other ▪ Strengthening manufacturing backlog imply upside expectations in terms of revenue growth, as it is already comprising H1- 2023 fi
Slide 21: Profit and Loss – EBITDA and Net Income
Profit and Loss – EBITDA and Net Income aEbitda (€m) and margin (%) Net Income (€m) 40 35.0 35 30 25 23.4 20 15 12.1% 7.0 10.7% 5.3 10 5 0 H1-2022 H1-2023 H1-2022 H1-2023 aEBITDA aEBITDA margin ▪ Revenues increased by 50% in H1-2023 vs. same period of previous year to reach €35.0 m, while margins al
Slide 22: Balance Sheet – Working Capital
Balance Sheet – Working Capital ▪ Working Capital increased in H1-2023 to reach €304.4 m in line with cycle of manufacturing projects. ▪ Working Capital reflects degree of progress of projects, and its unevenness correspond to the normal business and projects profile. Thus, current increasing revenu
Slide 23: Balance Sheet – Free Cash Flow
Balance Sheet – Free Cash Flow ▪ Higher working capital requirements resulted on cash flow consumption in the period and offset the EBITDA generated delivering negative FCF. ▪ However, cash flow profile is expected to improve and stabilise as both, revenues and industrial activity gets to recurrence
Slide 24: Balance Sheet – Net Financial Debt
Balance Sheet – Net Financial Debt Net Financial Debt (€m)1 Total financial debt2 – Repayment schedule (€m) NFD / LTM Adjusted 1.9x 2.7x EBTIDA 115 175.1 71 97.4 59 37 29 FY-2022 H1-2023 H2-2023 2024 2025 2026 >2027 ▪ Sound financial profile with only €66 m of maturities for Long-term gross financia
Slide 25: Table of contents
1. Executive summary 2. Other materials Table of I. Business performance contents II. Financial results ANNEX
Slide 26: Annex – P&L
Annex 1 – P&L Profit & Loss Account (€m) H1-2023 H1-2022 % Change Total net turnover 288.6 217.7 32.5% Other income 10.6 9.9 6.6% Procurement costs (138.7) (99.0) 40.2% Employee welfare expenses (83.9) (73.4) 14.4% Other operating expenses (42.9) (35.8) 19.9% EBITDA 33.6 19.5 72.1% % Ebitda margin 1
Slide 27: Annex – Balance Sheet (I/II)
Annex 2 – Balance Sheet (I/II) Balance Sheet (€m) June 2023 June 2022 Dec 2022 FIXED ASSETS 268.1 267.8 265.9 Tangible + intangible assets 131.7 125.9 129.4 Goodwill 112.4 112.4 112.4 Other long term assets 23.9 29.5 24.0 CURRENT ASSETS 781.7 756.5 868.9 Inventories 219.5 157.2 189.5 Non- current as
Slide 28: Annex – Balance Sheet (II/II)
Annex 2 – Balance Sheet (II/II) Financial debt (€m) June 2023 June 2022 Dec 2022 Long term financial liabilities 253.3 196.6 232.3 Short term financial liabilities 58.3 100.2 99.1 Financial leasings 4.4 6.2 5.4 Cash & cash equivalents (140.9) (139.8) (239.4) Net financial debt 175.1 163.3 97.4 Adjus
Slide 29: Annex – Cash Flow Statement
Annex 3 – Cash Flow Statement Cash flow statement (€m) H1-2023 H1-2022 % Change FY2022 Net income 7.0 5.3 32% 1.4 Corporate income tax 4.6 3.0 54% 13.5 Depreciation & Amortization 8.5 8.6 (1%) 17.8 Financial income/Financial expenses 12.2 3.5 249% 11.6 Other result adjustments 2.5 (14.4) n.a. 14.1 C
Slide 30: Alternative Performance Measures: definitions
Alternative Performance Measures: definitions All regulated information, among others, annual accounts, annual report, results presentations, investors/analysts conference calls, press release or related information issued contains alternative performance measures (APMs) as defined in the Guidelines
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