Talgo S A : Results Presentation 1H2023

Results Presentation Half Year 2023

27 July 2023

Disclaimer

This presentation has been prepared and issued by Talgo, S.A. (the "Company") for the sole purpose expressed herein. Therefore, neither this presentation nor any of the information contained herein constitutes an offer, sale or exchange of securities, invitation to purchase, sale or exchange shares of the Company or its subsidiaries or any advice or recommendation with respect to such securities.

The content of this presentation is purely for information purposes and the statements it contains reflect certain forward-looking statements, expectations and forecasts about the Company and/or its subsidiaries, operations, capital expenses or strategy of the Company and/or its subsidiaries, or economic data at the time of its elaboration. These expectations and forecasts are not in themselves guarantees of future performance, operations, capital expenses, strategy or economic data as they are subject to risks (including those identified in the documents filed by the Company in the Spanish National Securities Market Commission), uncertainties and other important factors (including economic or industrial, liquidity and financing, capital markets trends, technological changes, regulatory, governmental, environmental, legal and tax, and commercial) beyond the control of the Company and/or its subsidiaries that could result in facts materially differing from those contained in these statements. Save as required by applicable law, the Company shall not update or revise any forward-looking statements, expectations and forecasts contained in this presentation.

This document contains information that has not been audited nor revised by any independent third party. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information.

In addition to the financial information prepared under IFRS, this presentation includes certain alternative performance measures ("APMs") for the purposes of Commission Delegated Regulation (EU) 2019/979, of March 14, 2019 and as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 5 October 2015 (ESMA/2015/1415en). The APMs are performance measures that have been calculated using the financial information from Talgo, S.A. and the companies within its group, but that are not defined or detailed in the applicable financial information framework. These APMs are being used to allow for a better understanding of the financial performance of Talgo, S.A. with measures commonly used in the international financial markets but should be considered only as additional information and in no case as a substitute of the financial information prepared under IFRS. The way Talgo, S.A. defines and calculates these APMs may differ from the way these are calculated by other companies that use similar measures, and therefore they may not be comparable.

This disclaimer should be taken into consideration by all the individuals or entities to whom this document is targeted and by those who consider that they have to make decisions or issue opinions related to securities issued by the Company.

No warranty is made by the Company, its subsidiaries, their directors, representatives, associates, managers, partners, employees or advisors as to the impartiality, accuracy, completeness or correctness of the information or the opinions or statements expressed herein. None of that persons accept any responsibility for this information, the accuracy of the estimations contained herein or unauthorized use of the same.

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Table of contents

1. Executive summary
2. Other materials

1. Business performance

1. Financial results

ANNEX

6) Net Financial Debt to LTM aEBITDA. NFD excludes repayable advances with entities of to the Spanish Public Administration relating to R&D, which are not considered financial debt

Executive Summary - Key Highlighs

Business Performance

• ESG as key element in the pursuit of business excellence. Decreasing working accidents rates to reflect PRL improvements.
• Strong manufacturing pace while addressing new measures to increase capacity optimization and industrial efficiency.
• Outstanding commercial momentum resulting on new orders registered in the period with value amounting €1.9 bn3.
• Revenue growth enhanced by increasing manufacturing activity and supported by the stability of maintenance services.

	H1-2023
Accident freq.1	7.21
Severity2	0.29
Order intake	€205 m
Backlog	€2,668 m

	H1-2023
Revenues	€ 288.6 m

Financial	▪ Higher aEBITDA with stable margins, although higher financial
Results	expenses temporarily impacting net income.
	▪ Scrip dividend completed with 83% of capital accepting shares.
	Share buy-back programme to start on July 31st.
	▪ Industrial visibility and commercial forecasts leads Talgo to
	provide long-term vision over business performance…
Outlook	▪ … while confirming expected figures for FY2023.

1. • Uncertainties in macroeconomic and geopolitical environment.
   • Improvement in supply chain although still a challenge.
2. Accident frequency rate: Includes Talgo FTEs in Spain. Industrial accidents per million man-hours worked. FTEs (Full Time Equivalent Employees).
3. Severity rate: Number of working days lost per 1,000 hours worked. Talgo FTEs in Spain.
4. Includes mainly new extension order from DSB for €184 m, as well as DB for c. €1,400 m, which are already awarded and subject to comply with precedent condition.
5. Backlog execution in the period 2023-2024 based on FY2022 backlog figures.
6. Book-to-billratio: Volume of new orders over revenues.

aEBITDA	€ 35.0 m
aEBITDA Mg.	12.1%
NFD	€ 175.1 m6

	FY-20232025-26
Revenues	40%4	> 650 €m
aEBITDA Mg.	c. 12%	c. 14-15%
NFD	c. 2.0x6	Moderate
Order intake5	c. 3.0x	> 1.0x
Source: Company	4

I. Business performance (I/II)

• Unique commercial momentum for Talgo leading Talgo's backlog and order intake to historical highs.

1. DSB extension awarded in H1-2022 for eight additional Talgo 230 compositions with value amounting €184 m.

• 1. DB extension awarded in H1-2022 for 56 additional Talgo 230 trains with value amounting c. €1,400 m, and ENR new contract for seven night trains for € 280 m, both still pending to meet certain precedent conditions and approvals.
• Recent awards will lead backlog to c. €4.4 bn. On top of this, manufacturing contracts awarded comprise upside in the maintenance services business upon delivery of such trains.
• The commercial success registered in the recent years:
• 1. Provides business stability and industrial visibility for the following years.

1. Consolidates Talgo positioning in the rail-road passenger market with its technology being homologated and operated in the main European markets.

1. Reflects Talgo's transformational commercial model with indexation clauses on manufacturing contracts aiming to mitigate inflation risks and maximize execution efficiencies.

Order backlog H1-2023 (€m)
			+59%
		3.6x Book-to-bill	1,680	4,348
2,748	205	(285)	2,668
				Already awarded
				contracts under
				formalization process

Backlog	Order intake	Consumes	Backlog	Total orders
FY-2022	H1-2023	H1-2023	H1-2023	H1-2023

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Source: Company