Talgo reached a revenue of 669.2 million euros in 2024, an all-time record, up 17 million euros (+2.6%) from 652.0 million euros in 2023. This growth is mainly due to increased industrial activity, aligned with the schedules of the ongoing projects. The most relevant projects were: DB (Germany), DSB (Denmark) and power heads for Renfe (Spain), as well as revenues from train maintenance and retrofit.

In terms of profitability, EBITDA reached 69.9 million euros (10.5% margin), without the penalty applied by Renfe. Net income amounted to 8.8 million euros, excluding this provision. Capex investments amounted to 48 million euros, of which 35 million euros were allocated for R&D.

As detailed in Talgo's 2024 Annual Accounts, an important change has taken place during the fiscal year. This is a provision for the recording of penalties related to the project for the manufacture of 30 VHS trains for Renfe.[1].

In July 2022, Renfe informed Talgo of the initiation of the Penalty Dossier. Throughout 2022 and 2023, communications were maintained in which Talgo presented various reports expressing its disagreement with the penalties, citing justifications of force majeure and exogenous factors not attributable to Talgo.

In the second half of 2024, Renfe communicated the rejection of the justifications provided and confirmed the applicability of the penalties, thus closing the Penalty Dossier.

Talgo considers these recent developments as a substantial change in risk and the consequent probability of facing the penalties. As a result, Talgo recorded a provision for the total amount of the maximum penalty.

In any case, and notwithstanding the provision recorded, Talgo maintains the technical and legal arguments that support the delays caused by factors not attributable to the company. Talgo will seek to reach a solution that protects its interests and those of its shareholders, reserving the right to take the matter to the courts if necessary.

The complexity of projects, the long duration of their implementation and the influence of exogenous factors affecting delivery times are common in the railway sector, and it is therefore common practice for circumstances to arise that allow delivery schedules to be adjusted.

Solid orders backlog with strong international demand

Talgo finished 2024 with a solid orders backlog of 4,173.4 million euros, similar to the previous year.

The backlog includes manufacturing (ensuring strong revenue growth with an execution schedule of 2 to 5 years) and maintenance (generating recurrent cash and revenues). In addition, more than 80% of the portfolio corresponds to international projects.

Maintenance activities, corresponding to approximately half of the portfolio, drive stability and provide reliable cash flow, while growing with the new deliveries. Furthermore, maintenance equipment supply projects are a profitable strategic business line, offering commercial synergies that facilitate access to new customers.

Outlook 2025

In the first quarter of 2025 Talgo had to withdraw the 2025 outlook temporarily due to the need to reassess estimates with updated information on the main projects once the ongoing negotiation processes are finished.

The impact on the business could result in potential temporary adjustments in key financial metrics with a focus on stability and adaptation to new conditions.

A new evaluation is expected when the necessary conditions of visibility and certainty are established, which are required for the consolidation of the project portfolio and the capital and shareholding structure.