Talgo debuted on the Stock exchange in 2015 and has never exceeded the starting price, of 9.25 euros per share (now trading at little more than five and its capitalization is about 670 million). Lived their minimum of this year after presenting the third quarter results, which reflected lower sales (236 million until October in front of 300 million a year before). But most analyses agree that it is a fleeting moment that puts the point and end of the transition: the company has made to diversify its portfolio of trains to get closer to segments where the competing, oriented to the transportation of suburban and regional.
With an industrial presence in seven countries (besides Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia, and the united States), spent years thinking about expanding its range of products. But it was difficult. “We wanted to focus the commercial focus in other areas”, remember in the company. Talgo only made for the segments with the highest rates in the world of the train. It moved in the so-called “very high speed”, where the machines reach 350 kilometers per hour; the “high speed”, one rung below and the long distance (200 miles per hour). In these products were comfortable, with fewer competitors and higher profit margins (return on sales Talgo is in the 20%). And he got his bet by introducing a next level, suburban and regional trains.
The workload will increase next year thanks to the macrocontrato AVE
they Tried to develop products that they did not vie only in price. “Technologically it was not a challenge, when you have made high-speed trains is easy to download. The challenge was to build a train that would bring advantages with regard to what was in the market. We stayed three years until we decide”, indicate in the signature. Won the second contest in which they presented their new products: a couple of weeks ago they announced an order of 225 million in Latvia, where Pasažieru Vilciens, the railway company public, will buy 32 suburban and regional trains of your model VitTal, low power consumption. That, they say, will open the doors in other countries.
To Cesar Sanchez-Grande, analyst, head of Ahorro Corporación, medium-term opinion on Talgo and its technology are different from the rest is positive thanks to the step that they just give. Remember that the company makes cars lighter and wider than its competition, with a floor at the level of the platform, thanks to a technology pendulum that allows you to increase a 25% speed in the curves. “Enter a new segment takes time, but that can give stability to your portfolio”, you think.
That stability is the most sought after by the industrial firm controlled by the fund Trilantic Capital Partners in a world slope of each outcome on a quarterly basis. A simple review of what happened since its ipo in 2015. “It was a good time to market but realized the first risk contained in the prospectus: the dependence of the price of oil. In 2015 we were very focused in exporting countries (Saudi Arabia, Kazakhstan or Russia). Prices fell, and their plans were cancelled or postponed”. In recent years, the implementation of the projects has gone well: “we have Not had any slippages in timeframes or budget, or quality problems”, highlighted in Talgo, although they had disappointed the market by getting “less workload” of the waiting. Right now they have 2.666 million euros in projects signed, and other 317 million awarded and not signed in to maintenance work related to deliveries involved.
The group is committed to Nakitbahis the high-speed british: want to sell 54 trains
The business rhythm in 2018 has not been at all favorable, because, this year, have won contracts for 116 million for the refurbishment of the railway hotels of Renfe and have checked in the same period 120 million more, so if you continue at that speed would end up “eating” their orders. “In that relationship, the contract of Latvia is not accounted for because, although it has been adjudicated, is not signed. If you sumáramos we would be in a level [orders in front deliveries] very similar”, they defend.
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the consortium of The AVE to Mecca signed a contract in Saudi Arabia
Similarly, they have terminated the contract of the BIRD, between Mecca and Medina. Have been seven years, with 13 companies involved, and a volume of approximately 7,000 million euros that have given so much to talk about. In which they are concerned, all of the 34 trains involved in the agreement are finished and have sent 24 to Saudi Arabia. To change until now have gained 85% of the contract, according to the calendar provided.
looking to next year they have expectations on several fronts. The first is the AVE british, where they have been prequalified in a contract of 2,700 million pounds (3,000 million euros) to sell 54 trains and to cover 30 years of maintenance. The company says do not fear Brexit. On that bet compete with the large manufacturers in the world, from Bombardier Siemens. Are so determined by the Uk, they say, that have committed to open a factory that will provide up to 1,000 new local jobs to engineering and innovation.
Also working in the manufacturing of 30 trains committed in 2017 within the macrocontrato of high speed in Spain, which adds an amount of 1,300 million between machines and maintenance for 30 years. This, together with the contract of Latvia, will represent an enlargement of the template (currently there are nearly 2,100 employees) that the company is not specific, but will focus on Spain. In terms of the R & D, in a sector as purely industrial, are also making major changes that can be seen, above all, in the maintenance. “We have an agreement with Google. The trains sent the incident to the base so that, when they arrive at the station, everything is prepared to do the maintenance,” discussed in the group.
Variables
Debt. Debt: at the end of September the net financial debt is close to zero, because the volume of loans, some 250 billion euros, is equivalent to the case that the company has.
Orders. The portfolio reaches the 2.666 million, almost 3,000 million if you include awards are not signed. The hiring in the first nine months of the year is 116 million.
the Benefit. Until October the net profit of 14.8 million, down 58% due to higher financial expenses relating to more necessary guarantees for manufacturing. Talgo has in Bag for 59% of the capital. Its main shareholder is the venture capital fund, Trilantic, founded by exdirectivos of Lehman Brothers.
