Talgo : obtained net revenues of €85,2 million

• Q12018 net revenues stood at similar level of last two quarters which reflects the current manufacturing stage of the main manufacturing contracts under execution
• Talgo's backlog stands at €2.7bn in Q1 2018, representing 7.8x of its LTM revenue, showing high potential for future revenues.
• Talgo was awarded in 1Q2018 a project for the conversion of up to 156 Talgo overnight coaches into very-high speed trains, for a total value amounting to 107 €m

Talgo S.A., a leading specialized rolling stock engineering company focused on designing, manufacturing and servicing technologically differentiated, fast, lightweight trains registered net revenues of 85.2 million euros in the first quarter of 2018, compared to 121 million euros in the same period of 2017. Adjusted net profit stood at €8.0 million while adjusted EBITDA stood at 15.8 million euros. The company registered an operative margin of 18,5%, yet it maintains its 2018 margins outlook for the year at 20%.

Talgo´s net revenues and operating margins depend on the timing and phase of the manufacturing projects under execution and are in line with the results obtained in the previous quarters. Talgo's Q12018 results showcase the current transition period between the completion of one of the most relevant projects, the Saudi Arabian Mecca-Medina project, and the beginning of the Talgo Avril very high-speed train project, in accordance with the company's expectations. Talgo expects to increase its revenues by the end of the year as industrial activity regarding the manufacturing of the high-speed train Avril begins.

During the first quarter of 2018, Talgo has registered higher financial expenses due to the provision of financial guarantees related to the projects under execution, particularly Meca-Medina, although the company expects financial expenses to decrease as ongoing projects continue to be delivered. In addition to this, it is also worth highlighting that maintenance services continue to provide a solid revenue base and stability in terms of recurrence and cash generation.

Talgo's backlog stands at €2.7bn in Q1 2018, representing 7.8x of its LTM revenue, showing high potential for future revenues.

New strategic projects

Talgo was awarded in 1Q 2018 a project for the conversion of up to 156 Talgo overnight coaches into very-high speed trains, for a total value amounting to 107 €m. The project includes an option for additional 72 coaches, driving the project total value up to 151 €m.

With regards to ongoing projects, Spain VHS project was awarded in 2017 and includes the manufacturing of 30 VHS trains and its maintenance for 30 years. Talgo is currently finishing its designing and engineering phase and has already started planning its manufacturing phase, starting in Q2 2018.

As for the Mecca-Medina project, Talgo expects to continue to incease its net cash in 2018 as completed units will continue to be delivered. So far, Talgo has fully manufactured 33 units out of the 36 total units. As the project progresses and in line with the needs and expectations of the client, Talgo will continue to deliver the required complete compositions to Saudi Arabia, where there currently are 16 of them.

Talgo is significantly strengthening its commercial activity, currently forseein and working on additional business opportunities of over 9.7bn euros expected to be awarded throughout the period 2018-2020. VHS (41%) and commuter and regional (32%) opportunities lead the pipeline mainly driven by identified tenders in Europe, Asia and MENA region.

About Talgo:

TALGO S.A. is a leading specialized rolling stock engineering company mainly focused on designing, manufacturing and servicing technologically differentiated, fast, lightweight trains with industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and United States. The Company is renowned worldwide for its innovation capacity, its unique technology and reliability. Talgo is the rolling stock provider for the Haramain high speed railway line between La Mecca and Medina in Saudi Arabia.

For further information

Press contact:

Aída Prados

Email: aprados@estudiodecomunicacion.com

Phone no.: +34 91 576 52 50 / +34 636424483