- Since March 2020, Talgo has adopted contingency plans and significant cost-cutting measures throughout the Company to limit the economic impact of the Covid-19
- In line with the current circumstances, the Chairman, the Chief Executive Officer and the other members of the Board of Directors of Talgo have decided to reduce their salaries by 50% for the period March-December 2020
- The company has a solid order-book with strong visibility of industrial activity for the coming years. Furthermore, it is in an optimal financial situation to successfully execute projects.
Talgo S.A., a leading company in the design, manufacture and maintenance of high-speed light trains, registered a net turnover of 112.8 million euros in the first quarter of 2020, up by 29.6% compared to the same period of the previous year. This increase was driven by a stronger manufacturing activity, mainly in the Spanish High-Speed Railway project (Renfe) and remains at the highest levels of the last three years, despite the impact of Covid-19.
The company registered an Adjusted EBITDA of 14.8 million euro in the first quarter of 2020, which is relatively stable compared to the same period of the previous year. Adjusted EBITDA margins fell to 13.1%, reflecting the extraordinary situation caused by the current economic context.
Adjusted net profit reached 5.3 million euros in the first quarter of 2020, down from 7.5 million euros in the same period of 2019, although this also reflects the financial efficiencies achieved by the lower volume of guarantees and lower cost of financial debt.
Impact of Covid-19
Since mid-March 2020, maintenance activity in Spain was reduced by 77%, as well as in other markets, as a result of the declarations of the state of alarm, which forced the company to adapt to the level of operational activity of its clients. As a direct consequence, Talgo announced a force majeure temporary workforce restructuring plan for 313 workers, which will remain until the situation returns to normal. The recovery of the maintenance activity will depend on the possibilities of resuming normal commercial operation by the customers.
In terms of manufacturing activity, the company saw its industrial activity slowed down due to certain delays in the supply chain. Additionally, from March 30th to April 13th, Talgo's factories in Spain remained closed, in accordance with government measures. After this obligatory temporary interruption of activities in some of the factories, Talgo resumed activity on April 14, adapting the schedules and degree of progress in accordance with customers and the economic situation.
In response to the health emergency and to limit the economic impact of Covid-19, during March and April Talgo adopted contingency plans and significant cost savings measures throughout the Company and its various business units to limit the economic impact of Covid-19. The objective has been to ensure the continuity of the industrial activity by maintaining its commitment to customers, preserving project operating margins and protecting its workers, in full compliance with the indications of the Ministry of Health and competent authorities in Spain.
Among other measures, in line with the current situation, it is worth highlighting the decision of the Chairman, the CEO and the other members of the company's Board of Directors to reduce their salaries by 50% for the period March-December 2020. In addition, the company has implemented the remote working mode for the different office functions, which has allowed it to give continuity to other activities related to the development of the projects, such as the Project Engineering, Purchasing and Commercial activities, among others.
Talgo has a strong order-book with over 1.2 billion euros in manufacturing projects, which will generate long-term revenue visibility and ensure industrial activity for the period 2020-2024.
The volume of new orders amounted to 141 million euros in the first quarter of 2020, mainly due to the project awarded in Denmark for the manufacture of 8 Talgo 230 for 134 million euros, as part of a framework agreement worth up to 500 million euros. At the end of the first quarter of 2020, the order-book reached 3.4 billion euros (of which 1.2 billion euros belong to manufacturing projects).
The company also has an adequate financial position to ensure the proper execution of the projects in the portfolio. The company increased its financial capacity, with credit lines available up to 135 million euros until May 2020 (90 million euros in FY2019), after having refinanced debt maturities scheduled for 2020. The working capital evolved as expected,
Meanwhile, the Share Buy-back Programme was correctly executed in the first quarter of 2020, reaching 9.5% of capital, of which capital will be reduced by 7% in the coming weeks. The aim of this program is to contribute to shareholder remuneration by significantly increasing earnings per share.
With regard to the aforementioned Programme, the Board of Directors has decided on its meeting if May 6, 2020 to declare it expired and executed, once its expiration date is reached on May 19, 2020.
2020 forecast withdrawn in March
In March, Talgo withdrew his forecast for 2020 until he had more visibility of the current situation caused by the COVID. However, the company foresees favourable commercial prospects with a sustainable and reference product in the high-speed segment with attractive opportunities in Europe, including the HS2 project in the UK, as well as in the commuter segment, where Spain is positioned as the main source of opportunities. The current situation generated by COVID-19 could generate certain delays in the awarding processes, although no substantial modifications or cancellations are expected in the opportunities included in the pipeline.
Currently, the company is working on commercial opportunities for the next 24 months for an approximate value of 8.5 billion euros. In addition, Talgo has bids for approximately 5.2 billion euros in identified opportunities, in accordance with a strategy based on consolidating a high-quality portfolio that guarantees sustainable growth in the long term.
Note to editors:
Talgo S.A., is the leading company in the design, manufacture and maintenance of high-speed light trains with an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and the United States. The company is recognized worldwide for its innovative capacity, unique and distinctive technology and reliability. Talgo is the train supplier for the "Haramain" high-speed rail project between Mecca and Medina in Saudi Arabia.
For more information
Telephone: +34 91 576 52 50
- 01Jul Talgo supports Spanish National Scientific Research Council search for COVID-19 vaccine
- 28May Talgo offers its innovation to set rail as the safest transport mode in face of the COVID-19 pandemic
- 06May Talgo increases total net revenues by 29.6% to 112.8 million euros due to increased industrial activity
- 02Apr Talgo collaborates with Renfe to medically equip high-speed trains for the national transfer of Covid19 patients
- 09Mar Talgo will remunerate its shareholders with a 53 million euros dividend
Take part in our photography contest “Talgo Trains,” and you could win a range of prizes and visit our factory.
Photography contest “Talgo Trains”
II EDITION PHOTOGRAPHY CONTEST "TALGO TRAINS"
Once again, Talgo announces the opening of the annual “Talgo trains” photograph contest. This year´s novelty is that you can send us both: photos and videos!
Participants can share their photograhs/videos of Talgo trains operating around the world by filling in the registration form below.
Participate and win prizes up to 1000€ and a visit to our factory!
The deadline for submitting your photos/videos is May, 31st, 2017
For any questions related to the contest, please, email us at: email@example.com
Prize: 1000€ | Video contest: 500€ | Another two prizes of 250€ each will be distributed among both photograph and video categories.Rules of the contest
Fill in your personal information in this application form. Upon completion you will be provided access to the photos/videos uploading area. To log in enter your name, surname and email address and send us as may photos/videos as you want.
From January 24th, 2016 at 00.00 to May 31st, 2017 at 23.59 (Spanish time) any person can participate in the contest by sending us photographs/videos of Talgo trains.
If you are younger than 18 years old, contact us at: firstname.lastname@example.org , and we will inform you on the participation conditions.