The company’s order backlog also reached a new high, with the total including projects awarded but yet to be signed reaching €3.5bn. This was driven by new orders signed in international markets including Germany, Egypt, Uzbekistan and the United States amounting to €804m.

Adjusted Ebitda for the first half of 2019 stood at €30m, including €14.6m in the second quarter, maintaining the target margin of 18%, in line with market consensus.

Net turnover in the first half of 2019 reached €167.8m, a slight increase from the €163.1m registered in 2018. Talgo says it is also in a strong financial position with more than €320m in cash and €65m in net cash.

The company is continuing its share buyback programme, with €39m invested as of June 2019, 39% of the total allocated. Once the plan is completed, existing shareholders will increase their share of the company by 20%.

New orders in the first half of 2019 amounted to €804m, driven mainly by an order from German Rail (DB) for 23 long-distance trains under a €2.3bn framework agreement for up to 100 Talgo trains.

Talgo also won a €157m contract from Egyptian National Railways (ENR) for six trains and eight years of maintenance, while Uzbekistan Railways (UTY) acquired two additional 250km/h Talgo 230 trains for €57m. In the United States, Talgo won a joint contract with Systra awarded by Southern California Regional Rail Authority (SCRRA) to rebuild up to 121 Bombardier double-deck coaches used by commuter operator Metrolink.

As well as the orders for new fleets, Talgo is continuing to undertake maintenance contracts in seven countries, including on the Mecca - Medina high-speed line in Saudi Arabia which has now transported more than 400,000 passengers since opening in October 2018.

The company is looking to further strengthen its order book and is currently working on more than 20 opportunities due to be awarded over the next 24 months with a total value of €7.3bn. The tenders identified mainly cover the very-high-speed segment, such as Britain’s High Speed 2 (HS2) project, and suburban trains segment with Talgo indicating its intention to bid for a number of regional, suburban and high-speed train packages due to be tendered by Renfe.

2019 H2 outlook

Ahead of the next fiscal year, Talgo has maintained its expectation of strong double-digit revenue growth, reflecting manufacturing ramp-up of existing projects, mainly driven by the Avril very-high-speed train project for Renfe. Talgo also expects the maintenance business to continue successfully performing across all projects. With regards to profitability, the company expects to maintain its adjusted Ebitda margin target at 18% for FY2019.

Talgo is working to expand its commercial presence geographically, which, together with the diversification of its product portfolio, it expects to contribute to the development of new projects in 2019 and the coming years. The company is actively monitoring more than 45 longer term opportunities with an expected value amounting to around €11bn.

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