TALGO: FY2024 RESULTS (ANÁLISIS BANCO SABADELL)
4Q'24 vs. 4Q'23 ResultsSales: € 171.4 M (-5.7% vs. -5.8% consensus);
EBITDA: € -104.4 M (€ 18.2 M in FY2023 vs. € 19.3 M consensus);
FY2024 vs. FY2023 Results
Sales: € 669.2 M (+2.6% vs. n/a BS(e) and +2.6% consensus);
EBITDA: € -46.7 M (€ 82.7 M in FY2023 vs. € 77.0 M consensus);
Net Profit: € -107.9 M (€ 12.2 M in FY2023 vs. € 16.0 M consensus);
The results were poor, hit by the provision from the Renfe fine (€ 116 M, no impact on cash, resulting from the delayed delivery of 30 VHS trains, of which 27 have already been delivered). Sales’24 grew +2.6% (in line), hitting a record high for the company, with € 171.4 M of 4Q’24 revenues (-5.7%). Negative EBITDA’24 of € -104.4 M due to the provision from the Renfe fine outlined. Excluding the impact from the fine, EBITDA’24 would have been € 70 M (-10% vs. 2023 and -10% vs. consensus), with a 10.5% margin (vs. 11.7% in 2023 and 11.5% guidance’24), where there were cost overruns in the delivery of the Renfe trains (not detailed). Order intake’24 totalled € 619 M (0.9x sales, below its guidance of >1x sales) and the order backlog remains at very high levels of € 4.17 Bn (>6x sales). Furthermore, the company stressed an opportunity pipeline of € 11.2 Bn for the next 24 months (70% of Europe).
NFD’24 grew 68% vs. 2023 to € 403.9 M, with € -123 M of Operating CF and € 512 M working capital consumption linked to the strong manufacturing activity where the milestones to account revenues have yet to be reached. Furthermore, payments expected for 2024 have been also postponed mainly the contract with Renfe (not detailed). Thus, NFD/EBITDA (excluding the fine) would stand at 5.77x (vs. between 4x and 5x guidance’24). The company has cash and available credit lines worth € 250 M.
As for the guidance’25, the company expects: (i) € >600 M of sales (vs. € 691 M consensus), (ii) ~11% EBITDA margin (vs. 12.1% consensus), (iii) ~4x NFD/EBITDA (vs. 3.3x consensus), with working capital recovery and CAPEX of around € 25 M (€ +30 M in R&D) and (iv) >1x book-to-bill.
The reception would have a negative slant due to the poor results below expectations (due to the provision and in operating terms), with the guidance also below expectations and a more complex financial situation following the increased debt in 2024. UNDERWEIGHT. T.P. Under Revision.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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