• For FY2025, the company expects equivalent revenues in the range of €560-€590 million

• Talgo expects to book additional contracts before the end of the year and reach new all-time backlog highs

Talgo recorded revenues of €443.1 million in the first nine months of the fiscal year, as a result of an increase in the company’s industrial activity.

The manufacturing and delivery processes have been favoured by milestones of enormous relevance. Over the last three months of the reporting period, the contract with the German operator Deutsche Bahn (DB) – the largest in Europe – has registered the certification and delivery of the first Talgo 230 units.

These trains will star commercial service under the ICE L brand starting in December and were presented on October 17 in Berlin by the customer and the German government as the first fully-accessible, high-speed trains in the country. Talgo and DB continue negotiations to reduce the scope of the ICE L manufacturing contract from 79 to 60 trains, as announced on 30 September.

The first Talgo 230 trains for the Danish operator DSB have been also certified and delivered in recent weeks. As of today, they are used in several daily passenger services between Copenhagen (Denmark) and Hamburg (Germany) under the EuroCity brand.

As reported to CNMV, EBITDA was €-3.3 million because of adjustments in the relationship with LACTMA in the United States and Deutsche Bahn in Germany.

Excluding those adjustments, revenues in the period would have been €480.6 million and EBITDA would have amounted to €36.6 million.

Stabilisation and new contracts

The company maintains guidance for the fiscal year ending in December 31, and expects revenues equivalent to more than €600 million, excluding the impact of the contract with Deutsche Bahn. In line with these same forecasts, EBITDA is expected to be in the range of €40-50 million for the fiscal year excluding those impacts, and close to zero once considered.

Talgo also expects to formalize additional contracts before the end of the year, of several segments and in different markets. These contracts would allow Talgo to close the year with the order book at new all-time highs and with a record number of awards, after last May private transport operator Flix -the first company aspiring to compete throughout Europe-, awarded Talgo the supply and maintenance of up to 65 European high-speed trains on the Talgo 230 platform for €2,400 million, with a first block of 30 units valued at 1,060 million euros.

Reinforcing assets

As part of the shareholder change process, and after the different agreements between the parties, Talgo yesterday convened an Extraordinary General Shareholders’ Meeting to be held on December 12. Different measures for the reinforcement of Talgo’s assets will be submitted for approval by the shareholders.

First, a capital increase of €45 million which will give entry into the shareholding of Sociedad Estatal de Participaciones Industriales (SEPI) with 7.88% of the capital. After the increase, the investment consortium (formed by Clerbil, S.L., Finkatze Kapitala Finkatuz, S.A., Fundación Bancaria BBK and Fundación Bancaria Vital) will have a 27.4% stake.

The Shareholders’ Meeting will also vote on the issuance of convertible bonds: one of €30 million subscribed by SEPI; other of €75 million subscribed by a financing consortium (formed by Ekarpen Private Equity, SA, the BBK Banking Foundation, Clerbil, SL and the Vital Banking Foundation).

Financial strengthening

The Shareholders’ Meeting will also submit the new financing structure for approval in a syndicated format, with credit lines of €770 million and a syndicated guarantee line insured by financial institutions of €500 million.

It is expected that, once confirmed by the Meeting, and subject to the materialisation of the corporate operation, these measures for assets reinforcing and financial strengthening will be formalised before the end of the year.

As of September 30, and therefore without considering the awards that are expected to materialize in the coming weeks, Talgo’s order book amounts to €4,813 million and could surpass €7,000 million once the precedent conditions are met, and the contracts already awarded are formalised.

Market expansion

The company persists in its highly-selective commercial strategy, focusing on projects with indexation clauses and a positive cash profile. Talgo is thus working on opportunities with a combined volume of €16,900 million.

The moment the sector is experiencing, that a reinforced Talgo could take advantage of to improve its positioning, is rather good. In addition to the entry of private operators in Europe in a liberalised rail market, and to the strong demand in the Middle East and North Africa, there is also a commitment to the energy transition within the framework of the climate emergency measures, and with a new perspective from the European Commission for the creation of a pan-European high-speed rail network.

All these trends are expected to increase the demand for long-distance trains in the reference markets. Talgo, with its Talgo Avril and Talgo 230 Intercity high-speed platforms, aspires to become a benchmark thanks to its exclusive technology that reduces the carbon footprint and improves interoperability on international connections, thus assuming the capacity to shift modal from other more carbon-intensive and less efficient modes of transport.

About Talgo

Talgo is a leader in the design, manufacture and maintenance of high-speed and intercity trains, with industrial presence in Spain, Germany, Denmark, Saudi Arabia, Egypt, Kazakhstan, Uzbekistan and the United States. Recognised worldwide for its capacity for innovation, unique and distinctive technology and reliability, the company has a team of more than 3,500 people in 11 countries.

Talgo is the main supplier of high-speed and very high-speed trains to Renfe, and the supplier of trains for the “Haramain” project between Mecca and Medina in Saudi Arabia. Talgo is the manufacturer chosen by state-run companies in Germany and Denmark to decarbonise their mobility with up to 100 and 16 Talgo 230 Intercity trains, respectively. Talgo has also been chosen by giant Flix to become the first private train operating company in the European market.

 

Talgo Press Contact

VK Comunicación
Virginia Knörr Barandiaran
Tfno: 944 01 53 06 – Móvil: 629 15 60 31
E-mail: virginia@vkcomunicacion.com

Maite Gutiérrez Álvaro
Tfno: 639 197 133
maite@vkcomunicacion.com