Mission
To be the leading company in the Spanish railway sector, with an international industrial presence, recognized worldwide for its capacity for innovation, technology, quality, reliability and the added value of its products and services.
Talgo’s
business
1. Profile, identity and commitments
While celebrating the 80th anniversary of its founding in 1942, Talgo pursued three lines of business in 2022:
1The design and manufacture of high-speed and very high-speed, long-distance and regional trains.
2Manufacture of
maintenance
equipment.
maintenance
equipment.
3Provision of maintenance services to railway operators worldwide.
Activity
Manufacturing
- Trains, locomotives and coaches, bogies and wheelsets.
- Refurbishment of own and third party vehicles.
- Maintenance equipment: pit lathes, equipment for measuring wheel parameters, gauges and trolleys.
Maintenance
- Integral and personalized maintenance activities, including, among others, the care, overhaul, repair and complete overhaul of own and third-party trains.
Vision
To be a supplier of products and services capable of implementing comprehensive and innovative solutions in new segments and markets.
Values
2. Business model
Talgo’s activity is focused on the design and manufacture of top quality trains, as well as the supply and provision of equipment and maintenance services for railway operators all over the world.
The Group’s business model aims to deliver long-term value to its stakeholders. It is underpinned by a solid financial model focused on steadily increasing turnover and maintaining attractive returns for shareholders; and by a sustainable model that maximises efficiency and social commitment while reducing the environmental impact of its activities.
Low capital-intensive model (low investment in fixed assets, high flexibility and outsourcing) and focuses its resources on design, engineering, selective manufacturing of high value-added components, assembly, delivery process and after-sales service.
Talgo outsources most of the supply chain, manufacturing only the essential components related to Talgo specifications and particularities (welding of critical steel and aluminum structure and rolling elements).
The company’s engineers receive all the necessary feedback to improve the technology and design of the components, so that they can incorporate these advances continuously into all trains, both in the maintenance and manufacturing phases.
Selection of potential commercial opportunities, through an exhaustive analysis based on three pillars: attractive margin, contractual scope that provides the necessary guarantees and security and a reasonable cash profile in line with the project’s risk profile.
Nurturing talent and promoting training as a means to improve productivity, to add value to both the employee and the company, to generate a competitive advantage in the market and to create a motivated, responsible staff committed to Talgo’s values.
Decarbonisation, business ethics, safety, reliability and quality define our industrial activity and our management systems. We are committed to sustainability and social responsibility as travelling companions and value drivers of our activity. We conceive and apply them in an increasingly consolidated way.
Proprietary products and technologies
Talgo has a broad portfolio of products that are adaptable to customer needs and linked to medium and long distance segments with high and very high speed trains, state-of-the-art passenger coaches and regional and commuter trains to continue boosting its growth in the sector.
Talgo Avril includes a range of technologies and shows that the Group’s skills are available to only a few manufacturers worldwide. Innovation aimed at maximising capacity and minimising operating costs ahead of competitors, with the particularity of including proprietary technology such as the equipment of the change of track gauge.
The Talgo 250 range trains have proven to be the most reliable and cost-effective option for operators looking for equipment designed for accelerated rotation both on networks that have been partially adapted to high-speed and on conventional lines that have not been adapted.
Leading manufacturer of complete train sets for long-distance services on mainly conventional infrastructure. The Talgo 230 (DB and DSB in Germany and Denmark) has established itself as a flexible and efficient benchmark product in the European market. Talgo technology offers very low operating and maintenance costs and is also fully adaptable with its own technological solutions, such as natural tilting or Talgo bogies.
Talgo has developed the Vittal platform in-house, which is designed for high-frequency commuter and regional services around major cities. The excellent power-to-weight ratio improves acceleration and braking coefficients, while its unbeatable accessibility helps to cut the time spent on loading and unloading operations at each station.
Proprietary and differential technology
Talgo’s objective is to offer operators a product that allows them to cover more needs, and with a better cost-effectiveness ratio than other manufacturers, based on a technological paradigm built on six main principles:
Continuous low floor
Independent and guided rolling
Lighter and wider coaches
Natural tilting
Change of gauge
Fully articulated trains
3. Industrial activity and services
Composition of order book
The order book stood at 2.7 billion euros in 2022, reaching 3 billion euros if we include already awarded contracts subject to conditions precedent.
The outlook for the sector is positive, driven by the process of decarbonisation of transport in the coming years and reflected in the expectations of the latest industry surveys.
Still, the current order book offers potential improvements in the company’s two main business lines. Europe, the Middle East and North Africa are the main potential markets for Talgo with additional tenders worth over 5.0 billion euros, mainly in MAV and long distance; 2.0 billion euros in extensions in projects in Germany, Denmark and Saudi Arabia; and an increase in maintenance services activity with the incorporation of new fleets in production over the last few years.
Positive business outlook for 2023 due to decarbonisation of transport in the coming years.
| Millions of euros | 2022 | 2021 | Change |
|---|---|---|---|
| Total order book | 2,748 | 3,249 | -15.4% |
| Order book size: manufacturing | 639 | 976 | -34.5% |
| Order book volume: maintenance services | 1,962 | 2,241 | -12.4% |
| Order book volume: equipment and other | 147 | 32 | 359.4% |
3.1 Manufacturing
Industrial area
63,000 m2
Production capacity:
400-500 pcs/year
Centres:
Las Matas, Madrid (Spain)
Manufacture of high speed train (HS) powerheads and maintenance equipment.
Rivabellosa, Álava (Spain)
Manufacture of passenger coaches.
Milwaukee, United States (*)
Assembly and heavy maintenance projects.
(*) Provided by public bodies.
Manufacturing accounted for 61% of Talgo’s revenues in 2022, calculated on a backbone average, representing 23% of the order book worth 0.6 billion.
The main generators of manufacturing revenues were the projects for DB Talgo 230 (Germany), Renfe MAV powerheads (Spain) and DSB Talgo 230 passenger coach compositions (Denmark).
Although it was a year in which the pace of project implementation slowed down compared to 2021, mainly due to supply chain disruptions. Manufacturing revenue, as a proportion of total Group revenues, remain high due to the impact of Covid-19 on the maintenance business during 2020-2022.
Status of manufacturing projects
High Speed
Renfe Avril MAV (Spain)
| Scope – €900 million | Status |
|---|---|
|
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Renfe MAV locomotives (Spain)
| Scope – €161 million | Status |
|---|---|
|
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Long distance / passenger coaches
DB Talgo 230 km/h (Germany)
| Scope – €550 million (€2.3 B)(1) | Status |
|---|---|
|
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DSB Talgo 230 (Denmark)
| Scope – €152 million (€500 M) (1) | Status |
|---|---|
|
|
ENR Talgo 160 km/h (Egypt)
| Scope – €157 million | Status |
|---|---|
|
|
(1) Maximum scope of the framework agreement.
(2) Abstract Acknowledgement of Debt, with access to up to 60% of the total value of the contract, which allows for advance payment of the contract.
3.2 Maintenance
The maintenance business remained strong in 2022, thanks in part to a strategy based on the use of pioneering technologies that continue to set the industry benchmark. It represented 71% of the 2022 order book and includes services provided to customers in 6 countries with a total amount of 2.0 billion euros. They provide long-term revenue visibility backed by a consolidated and growing maintenance order book.
Location of maintained fleet
3.3 Refurbishment and other
Heavy Maintance and refurbisment
In 2022, the heavy maintenance and refurbishment business accounted for 5% of the total order book with a total order intake of 0.1 billion euros. It is a business that continues to offer growth potential and is the gateway to new markets.
Metrolink redevelopment (USA)
| Scope – €35 million | Status |
|---|---|
|
|
Conversión de trenes nocturnos a MAV (España)
| Scope – €107 million | Status |
|---|---|
|
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Remodelling of AV compositions (Spain)
| Scope – €35 million | Status |
|---|---|
|
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LACMTA redevelopment (USA)
| Scope – €73 million | Status |
|---|---|
|
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4. Talgo’s future
The 2022 results show the resilience of the business with satisfactory performance even in adverse conditions, while the 2023 forecasts point to expected growth in activity and therefore in revenues with a recovery in margins. The Group maintains a favourable commercial position, especially in the long-distance and high-speed segments in European countries and in the Middle East and North Africa.
The rail passenger transport sector is a key element in successfully addressing the decarbonisation objectives and processes of the proposed global transport system for 2030-2035. This, together with the process of liberalisation of the railway map, means that trade prospects are positive for the coming years.
| 2022 Results | 2023 targets | |
|---|---|---|
| Business performance |
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| Profitability |
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| Capital structure |
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| Shareholder remuneration |
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(1) Does not include R&D projects.
(2) On the order book for the year 2022.
(3) Subject to approval by the AGM. Preliminarily, it will be implemented through a Scrip Dividend and a share buy-back programme.
Innovation
Talgo, as a leading national and international group of companies in research and development, assigns the highest priority and resources to this essential driver of business value to ensure its continuity and sustained growth over time.
This commitment is also shown by the fact that, despite the results, 18.3% more has been invested in innovation projects over the course of 2022, totalling 16.1 million euros (13.6 million euros in 2021), with R&D expenditure rising to 1.6 million euros, 14.3% more than in 2021.
Despite the decline in results, Talgo invested 18.3% more in R&D projects in 2022 as a factor for future growth.
Innovation projects 2022
Energy efficiency and sustainability
|
Vittal one hydrogen train
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Box/light structure
|
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Light wheelset
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Viscoelastic panels for structural cushioning
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Metamaterials for interior noise reduction
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Carbon fibre recycling
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Availability and versatility
|
Motorised wheelset
|
Intelligent trains
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Box hoist/structure
|
Maintenance 5G
|
Passenger experience
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Improved acoustic experience
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Indoor guidance using ultrasonic beacons
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Blackout windows
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Variable frequency dampers
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