Talgo (TLGO) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached €346.1 million, a 20% year-over-year increase, driven by strong manufacturing activity in Spain, Germany, and Denmark, and stable maintenance operations.

• EBITDA rose to €41 million (11.8% margin), up 22% year-over-year, reflecting operational efficiency and disciplined execution.

• Net profit after tax doubled to €15 million, with net income up from €7.0 million in H1 2023.

• Net financial debt increased to €357 million (4.3x EBITDA), mainly due to higher working capital needs and delayed collections.

• Order backlog stands at over €4.0 billion, with 80% international exposure and significant contract execution ongoing.

Financial highlights

• Revenues grew 20% year-over-year to €346.1 million in H1 2024, driven by manufacturing for DB, DSB, and Renfe.

• EBITDA was €41 million (11.8% margin), EBIT €29 million, and net profit €15 million, all showing strong year-over-year growth.

• Operating cash flow was negative at €100 million, reflecting project cycle and delayed collections.

• Working capital increased to €495 million (92% of LTM revenues), mainly due to €102 million growth in work-in-progress.

• Accessible liquidity stands at €300 million, with cash and cash equivalents at €112 million at period end.

Outlook and guidance

• FY-2024 EBITDA margin expected at ~11.5%.

• Net financial debt forecasted at ~3.5x EBITDA due to higher working capital.

• Order book exceeds €4,000 million, with 80% from international projects and major contract awards anticipated.

• Company is analyzing opportunities worth over €6.7 billion for 2024-2026, mainly in Europe and MENA.

• Ongoing investments in R&D and production capacity to support future growth.