REVENUE at Spanish suppliers CAF and Talgo increased by 21% and 39% respectively in 2023, as both manufacturers reported positive financial performance for the year while offering an optimistic outlook for 2024.
CAF
While order intake was down by 23% at €4.775bn compared with €6.205bn in 2022, CAF reports an “acceleration of order intake in the last part of the year,” recording a book to bill ratio of 1.2 in 2023, well above its target for the year. It says that commercial successes in the rail maintenance services sector and the bus market, driven by its Solaris subsidiary which returned to growth, are particularly noteworthy.
Ebit was €179m, an increase of 29%, while the Ebit margin was 4.7%, up from 4.4% in 2022. The company’s order backlog also increased by 7% to €14.2bn. CAF reported an overall profit of €89m, an increase of 71% compared with 2022. Cash flow is €55m, while net financial debt fell to €256m in 2023 compared with €278m in 2022, and €434m in 2019.
Rolling stock accounted for 34% of CAF’s orders in 2023, with buses accounting for 27%, services 24% and integrated solutions and systems 15%. More the 50% of the orders for railway activities were existing contract extensions. Performance in services was particularly noteworthy, with a book-to-bill ratio of 2, and the value of orders received exceeding €1bn for the first time.
CAF says 2023 was the first financial year for the new rail businesses acquired from Alstom in France and Germany, and it recorded the first contracts for the Coradia Polyvalent platform, a €161m deal with the French regions confirmed in April. Other notable orders included a €500m-plus agreement with British operator LNER for supply and maintenance for eight years of 10 tri-mode trains; a €150m agreement to supply seven eight-car suburban trains to the Philippines; a €100m agreement with Renfe to maintain 17 Medium Distance EMUs for 15 years; and the supply of 40 LRVs to Rome under an agreement worth more than €130m.
Talgo
Talgo says it registered “strong commercial momentum,” with record orders worth more than €2.1bn in 2023. Revenue of €652m was 39% up on the €469.1m achieved in 2022.
The company reported Ebitda of €76.5m in 2023, an increase of 55% compared with the €49.3m obtained in 2022. Talgo cites an increase in industrial activity for the improvement, in particular the extensions of contracts with German Rail (DB) to design and manufacture an additional 56 locomotive-hauled Talgo 230 ICE L trains taking the total on order to 79, and with Danish State Railways (DSB) for an extra eight Talgo 230 trains, taking the total order to 16.
Net profit was €12.2m, eight-times higher than in 2022. However, this result was impacted by rising interest rates, which resulted in an increase in the company’s financial expenses.
Talgo’s working capital stood at €384.9m at the end of 2023, while net financial debt had increased to €241m, which the company says reflects the current cycle of manufacturing phases.
The company’s order backlog stands at €4.22bn, a 54% increase compared with 2022. The contracts with DB and DSB, as well as a maintenance contract for the Talgo 250 trains, were the major contributors to this result.
Outlook
CAF says its goal for 2024 is to “continue our growth cycle in terms of activity and results and to maintain our current financial stability.” It is projecting a 10% increase in revenue compared with 2023 as well as improved Ebit and net profit.
Talgo is forecasting Ebitda of 11.5% in 2024 and is expecting to maintain its 3.0x Ebitda for net financial debt. It adds that it is working on commercial opportunities “in a large number of markets” with a total potential value of €5bn in 2024-2026.
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