Hello. Good morning, everyone. Thank you very much for joining the call. The aim of this call is to present the results of the year 2021. For that aim, Gonzalo Urquijo, CEO, will go through the presentation. Thank you very much. At the end of the presentation, we will open a Q&A session in order to answer and clarify any question you may have. Thank you very much.
Thank you very much, Javier. Good morning to all of you and thank you for attending this call. I'm here surrounded by all the financial team. I think they've done a great job, so thank you very much. They will help me in this presentation as always. First of all, if I go to page number 2 of the presentation, you see that we have all those, let's call them balloons. If I start, let's say 10 o'clock by health and safety, that is our number one priority. We'll enter into the figures. We believe even though the frequency ratio doesn't look as good, we have been improving, but still our target is zero accidents. Second balloon would be manufacturing activity. Clearly there, we do have challenges going forward. We have had inflation going up.
We have had a supplier chain disruptions, material increases, so that situation has changed, and it's become tougher, not only for us, for other suppliers and for companies in general. Maintenance, we recovered this area 90%. I have to say that we see it after with the figures that it's 100% for international. The Spanish one has been increasing. It was at 85% for the year, but at the end we're about 90%. We have to do 100% for this year for sure. Commercial activity, new orders, practically EUR 520 million, so it's a 0.9 book-to-bill. At the end, our portfolio remains very similar to what we have. Profitability, EUR 66 million EBITDA, that's 11 point.
Adjusted EBITDA, of course, at 11.9% or practically 12%, which was the high part of the guidance we gave. If you remember, it was between 10% and 12%, and then we came back in the Q2 , I believe it was, and we said between 11% and 12%. As for working capital, 155. We've made progress to that. At the end of the year, we're able to earn cash. We're able to improve that and net financial result of that and the free cash flow we've generated. The net financial debt was EUR 36 million. It's 0.5 of in terms of EBITDA. Shareholder remuneration, which started. I'll go back to this. The main shareholders, we started with a prudent EUR 10 million.
We hope the results are there and everything goes okay to increase in the future. It's a dual program in the sense that it's a scrip dividend, so you can choose for cash if you want or for shares. If you choose for shares, it will mean we'll not have a dilution because we will do buyback in the same proportion, so you don't modify the capital figures. No dilution. I insist it's dual. As for the outlook, which we will see in the last page, we do expect to be above 13%. I know the analyst consensus was more, but we'll try and explain it. Well, we said above 13%.
The debt will grow in 2022, as we have new projects coming in, and the payment of those projects will be extended to the first part of 2022. As I always say, I think it's important to see us in 2 or 3 years. That is when you see where your average working capital is. If I move on to the next page. As always, it is Health and Safety. That is, as I said, our number one priority. The only target here is 0 accidents. That is the target we have. If you see the first figures, we have increased in frequency. I have to tell you, we've included all now, not only our workers, but the subcontractors also. Clearly, we do have to continue improving with our subcontractors.
We do see an issue and a difference between our own employees and subcontractors, and we have a new program to improve that. Additionally, I have to say that fortunately this year, except for one in the severity ratio, we've only had 1 accident that was severe. Somebody fell down some stairs. For the rest, the accidents have not been that important. I would say have been light too for the moment. In terms of COVID, for health, well we have been impacted, especially at the end of the year. At some stage in the company, we were 200 people that were hit by COVID. Now we are around less than 18. We were 18 yesterday, so I expect it is less than that today.
We've come back, and it's really gone down, and it's comparable to what's happened in Spain, I would say. Additionally, to that, we have started our collective bargaining agreement in terms of CPI, Consumer Price Index. The workers or the representative of the workers wanted clearly inflation, which is 6%. We've said no. We continue negotiating that and believe the company cannot lose its productivity, and we cannot afford those increases in salaries. In terms of productivity, you also see the ratio. It is around the average FTEs. We have 2,711, and it's around, in terms of sales, we are at 205 versus 182 of the previous. Next page, please. Okay. Manufacturing.
If I start with manufacturing, I think, this is important. The environment has changed for Talgo and for all of us. It is a challenging environment. We have inflation. We just spoke about what does that mean for our, you know, workers? What does that mean for all the suppliers we have in terms of their own workers? Materials. We've seen raw materials. We've seen at the end, aluminum doubling, steel from EUR 1,500 to more than EUR 2,000. Steel going from, let's say, cold rolled coils from EUR 600 to EUR 1,200 or more. I mean, the price of the cold rolled coils are the last year's the price of scrap today. We're really seeing...
If we go and when we are buying the seats, if we're buying air conditioning, everything, and we're being clearly hit by that, materials and inflation. Additionally, to that, we have had delays in the supply chain. Supply chain has become also complex, and we've also suffered that. Last and not least, since yesterday, sadly, we have this geopolitical situation in Ukraine which does not help and that could have, I have to say, no direct impact. We had a call today with the Russian team we have there. That's only 1% of our sales and 1% of our gross margin. So, in terms of results, that is clearly not significant. What's important is our people. We have 57 employees there. I spoke with a leader this morning. They are there.
They're all okay, and our business is continuously working. This geopolitical situation adds additional uncertainties around, let's say, again, what's going to happen next. Where are the raw materials? Where are the prices? Energy prices with oil and gas, et cetera. That is it. Second, maintenance. Maintenance or international maintenance, we have to say it's 100%, as we say that. Spanish activity has been 85%. We can confirm that for this year, we will be touching for Spain 100% as for international. Unless there's something like a new COVID-19 or something like that, which we all hope not, we should be at 100%. As for the backlog, we should be at EUR 3.2 million. 69% of this is the part of maintenance. Next.
It clearly ensures a good future, at least for the next 3-5 years in the future. Now, next page, please. Page 5 now, I believe. That is in terms of the new contracts we've signed EUR 520 million, as you very well know. That is, we've done for manufacturing. What have we done here? Basically, it's the following. Clearly, we have the Locos, which were one of the bigger in terms of the manufacturing. That is clearly the increase of the contract we have with the Danish railways. Additionally to that, we have a big contract, the maintenance, Mecca, and the Spanish maintenance contract for the high speed. What does this mean in terms of our order intake and book-to-bill ratio? We expect to be around 0.9.
At the end, we have not hit our order intake in this year or by a very small amount I would say. In pipeline, we have a geographical pipeline that you can see here, what is Europe, what is Middle East and the rest. Clearly, we have about EUR 9 million, if I may say. Also, I have to share with you that at this stage, I have to tell you that the last two months, we've seen a change in the commercial situation. I would say it's a positive one, more than positive I mean. Why? If you first, I think the macro of the sector is good. It's a sector which is green. It is ESG compliant. We have solar, we have funding for this.
Additionally, there's new operators coming in that have approached us and want more trains. Additionally, in Spain, we have the ability to produce the variable gauge, so that is helping us also very much. What can I say here? We have, we believe, at present, contracts that are close to be signed. We have Egypt there. We could have the Danish, which we're looking at, could have an increase in there, in Germany, in Saudi Arabia. We've looked at different contracts, which we have now open negotiations with more than half a dozen of them, which is completely specifically seven. Commercially, we have seen, given that this has gained strength now, more than what we had, let's say, 3 months ago. I go now to the next page. It's page 6. It's the financial results.
Can I share with you? In the last quarters, we've had a decrease in turnover that has been impacted in our P&L. I think that is a very good reason. It's due to product mix. I would call it the change in product mix. We were finishing basically the very high-speed Spanish train, the Avril, and we were now getting in with the German ones. We're also finishing Egypt, which we'll finish at least part of it during this year. We are starting with the Danish one. We are moving from projects to other projects. That always, until you get a cruising speed, does take some time.
That's why in terms of revenue range, we put it more between, let's say EUR 140 million and EUR 125 million, let's say. Now, for this year results were EUR 555 million in terms of revenues. They did EUR 66.2 million, 11.9%. The overhead, we've decreased the cost we had agreed, decreasing them by 50% in two years. We have already achieved that 10% in that aspect. Clearly, we are committed to our target and committed to this reduction. In terms of maintenance, what we have seen this year, the increase in international and the improvement of the Spanish one. Especially international has been Saudi Arabia, and that has improved very much.
We see in the lower part to the right, the adjusted EBITDA margin, which you see how it had increased in the last quarter when we adapted toward what I spoke about the projects. We did have also the impact there. Next page, that is the balance sheet. Working capital, we've been able to reduce that. Why? I think we have improved in our days payable, our days receivables. Additionally, in our inventories, we have generated free cash flow. As you can see here at the bottom to the right, it's EUR 16 million. We have a better figure of 156 than what we had, which is a 28% in terms of revenues.
If I go to this figure in terms of days, it has also improved as clearly, we've been focusing very much in the inventory and days receivable and days payable as another source of cash generation. Next page, financial results, Balance Sheet 2. Here, debt reduction. We've seen an important debt reduction higher than the market consensus expectations or our debt is lower. Reduction has been higher. Clearly, as I said, it's through cash flow generation and working capital. Our net financial debt for this year 0.5 times our EBITDA. Additionally, to that, as you can see here, I think the debt restructuring we already addressed it in our previous calls that we are EUR 268 million.
It is 3.4 in terms of maturity and a 1% average cost, which puts us as we had a very good investment grade. Additionally, we do have our cash position is very sound, and we have EUR 253 million plus EUR 109 million undrawn credit lines. We have EUR 20 million which we're already negotiating with banks for 2022. I would say good balance sheet. Last but not least, the close of the target and especially the guidance, which is always so important for all of us, no? In terms of performance, we've had 12%, let's say, profitability EBITDA margin. Working capital, it has been due to a cash plus EUR 16 million. The debt, as I said before, 0.5. CapEx has been 25. Backlog execution, it's ongoing.
Book-to-bill 0.9. Strategy, which we have already reviewed it in the board. Now, I want to be very clear that I can tell you in general terms that our strategy area will review the product strategy. We're satisfied with being in very high speed, high speed regional ones, clearly. If we have good opportunities, we will enter, that means profitable opportunities in the EU market. Additionally, to that in terms of geographies, we have the core ones. It's Europe, it's Middle East, it's CIS, it's U.S., clearly. Maintenance is a core business and key business for us, and we are going to continue reinforcing it. We are looking now and being commercially very active to look for maintenance that is not only for our own products but for third parties.
Additionally, to that, the board has decided there's good opportunities for M&A. We have to be there. Last and not least, I'll address the part of the guidance for 2022. Look what we are saying in terms of EBITDA, more than 13%. I know the consensus, or we know the consensus was higher than that, but we thought that we should be prudent. Why? Because I think there's a lot of uncertainties. We have uncertainties we spoke before of inflation, of raw materials, of supply chains. Additionally, to that, this geopolitical situation clearly adds instability for raw materials, for prices of energy, for transport. At the end, it's clearly. So, we thought it was prudent to put that what we expect to do is more than 13%.
That doesn't mean that our targets going forward are more ambitious than that. Second, in terms of this will be a year where we will have cash consumption. Why will we have cash consumption? At the end, we're getting into the new projects, and at the end, many of these payments, we had some payments at the end of last year, and we have other ones in 2023. At the end, what's advisable is we should see this working capital and our debt that's in 2 to 3 years. If not, it is, as you all very well know, due to the way our business works, we do have, let's say, those ups and downs. This year, in terms of we will consume cash. That's why we put net debt to EBITDA 1.5. That we will hope and expect to be CapEx.
We put it again in EUR 25 million, unless there's a specific project of an interesting medium user that makes strategic sense, and that is basically good profitability, and then that could be increased, but it would have to go through the board, of course. In terms of backlog, it was at 34%. That's what we are comfortable with. That would be this to between around EUR 500 million and EUR 570 million or a bit lower. Now book-to-bill, 1%. That's what we expect to do with what we see now in the market. Strategy I spoke. Last but not least, shareholder remuneration. We started with this. Told you that we spoke of this in the end, second semester, I believe, result presentation. I think we've started with this.
If the results allow it and going forward, and our balance sheet, we would like to grow this going forward. We've done this remuneration to shareholders in a dual way. That is, you can choose for cash, or you can choose for shares. We started scrip dividend. We start with shares. If somebody doesn't want shares, they can sell their rights and they get cash for it. If they want to scale their shares, they get the shares. I think it's important to say this will not mean any dilution because we will, at the end, increase in capital but buy the same amount of shares in order so the capital will remain the same at the end of the dividend.
That is so whoever's chosen shares and get new shares, but we need to buy back and will amortize those shares. Look, thank you very much for your attendance, for your attention. Now, as Javier said before, we'll open your questions. Thank you very much.
Thank you. Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please dial zero one on your telephone keypad or submit your questions through the webcast platform. There will be a brief silence while questions are being registered. Ladies and gentlemen, once again, if you wish to ask a question, please dial zero one on your telephone keypad. We have a question from Pablo Cuadrado from Kepler. Please go ahead.
Yes. Good morning, gentlemen. Good morning, everyone. I wanted to ask two things. First one is on the guidance, and I reckon your comments about being cautious in 2022, and clearly there are different sensitivities. I want to put that 13% EBITDA margin into context, basically versus the 16.5% EBITDA margin that was commented before COVID. My understanding is that the business is clearly recovering from COVID. I think, probably in 2022, you are still not going to be fully recovering from that, but I guess you should be very close.
That gap, let's say from 16.5 that you guided in the past and now 13% is something that we should expect to be maintained going forward if basically the current inflationary pressures, et cetera, are going to remain in place for some time? Or on the contrary, you think that that 13% is a cautious figure for this year, but if everything goes right beyond 2022, you should be able to keep improving that margin reference. The second question is on the pipeline of projects.
I think there has been a jump for at the end of full year when you talk about the pipeline of projects. I think you are mentioning more than EUR 9 billion when compared to the figure of H1 or nine months. If you can provide details, tell us a little bit more which are the key projects that you are including that pipeline or accessible pipeline in order to have in mind. Thank you.
Thank you, Pablo, for your two questions. First of all, in terms of the 13%, I have to say we said we are more than 13%. That is as for number one. Second, clearly, we have been cautious and clearly all of us and in all the companies, and I'm sure all the companies investing and you see and you analyze, there is uncertainties. The uncertainties have become really even worse. That is as for number one. As for number two, it is true there was before COVID I spoke about 16.5% EBITDA margin. Clearly, the company and all the board employees of this company, we do have an internal target, and that is clearly above 13%. There's no doubt, and I can assure you of that.
In that sense, if you tell me when can that be achieved, we're not. I do think we have those uncertainties, so at this stage we should be, at the end, prudent. It is clear we have required maintenance. Two, we have been impacted in the projects, especially in new ones, by these raw materials . And at the end, for the new ones, we are working very hard how to, at the end, not have this compression we have seen that, and that is clearly a target going forward. To come back, look, clearly, our internal targets are clearly higher than 13%. That's what I can tell you now. And it is moving north. I think it's only prudent we would have said something different at this stage.
In terms of the pipeline, that has been moving. It is true that we've seen now in the office. I think we were talking that at some stage we had EUR 7 billion, and then we came up to EUR 9 billion. But what we've seen is more projects and new projects. We have seen that market and that's a bit in line with what I said before commercially, we have seen new projects coming on our tables in the list. That's what I can say in terms of the pipeline. Okay, Pablo?
All right, thank you. I appreciate the answers. Thank you.
Gracias, Pablo.
Thank you. We have the next question from Jaime Escribano from Banco Santander. Please go ahead.
Hello. Hi, good morning. From my side, I would like to ask you if you can tell us the maintenance division, Renfe and Mecca-Medina and the others, if they are fully recovered or there is a little bit of upside there still. Also, I'm sorry because I connected a little bit late, so in case you have said, I can always ask later, but what is the exposure you have to the Russian contract, the corridor that you operate there in terms of revenues, how much this is? In terms of the guidance, you say you aim to do sales of around 33% of the backlog in 2021, 2022.
If I'm not wrong, this makes around top line in 2022 of EUR 550 million. This makes a run rate per quarter of EUR 137 million. My question would be how comfortable you are with this. Should we expect you are making right now something like EUR 120-something million per quarter. You really need to make these EUR 550 million sales in 2022. How should we think about the following quarters evolving in this regard? Thank you very much.
Gracias, Jaime. Thank you very much for your questions. In terms of maintenance, look, I have to tell you, do we have a small uptick? Versus last year, we do have because Saudi Arabia started after the Q1 and Renfe started at lower levels, and it has touched practically 90-something%. Clearly there, when we see the full back of the year, we have two new variables. 12 months you have Saudi Arabia, and you have another variable that is 12 months of better business with Renfe. That is very fast. For your second question, no issue. We will readdress it. Look, this is only in terms of turnover, EUR 5 million, in terms of gross margin, EUR 1 million, and so it has little impact to us. I had a call with the teams this morning. We have 57 people there.
They're all doing fine, and the trains are running fine. If you remember now, we have trains that are running to Nizhny Novgorod, to St. Petersburg, and there's no issue with that. If there was an issue, I have to tell you the impact for us would be minor. In terms of guidance, I think you raised a good point. We have put circa EUR 34, so that gives you some flexibility, I would tell you, Jaime. yes, but yes. Look, we have, you've seen the results here of our turnover. It has been running behind, and we do have to run. I do expect that while the year advances, our way of working with the new projects starts ramping up and accelerating. That is our expectations here.
It is true, as I said before during the presentation, as we're moving from projects that we are finishing and the new ones you're getting in, you always get a ramp up and acceleration, of course, until you have that cruising speed. I hope this happens by the Q2 , but it could be delayed also. I don't say no, and it all depends on the availability of materials or not, right? That is many factors you have there. Clearly, we are looking at those figures. Look, in our range, we have put, let's say, it's more around EUR 125, I would say EUR 130 to 140. That's where we would be and what I can tell you up to now. Okay?
Let's see if we achieve it, and we are able to do more to the end manufacturer in that speed. Okay, Jaime. Gracias.
Great. Thank you very much.
Thank you. We have a next question from José María Cánovas from Jaume Capital. Please go ahead.
Yeah. Hi, good morning. Thank you for taking my questions. Two, if I may. First of all, in the, well, in your targets and the guidance, you say that this year, you committed, kind of EUR 25 million for CapEx. However, when we look in the cash flow statement, I only see EUR 11 million. Should we expect the remaining EUR 14 million cash outflow for 2022? Will this come on top of the EUR 25 million CapEx that you guided? Should we expect around EUR 39 million cash outflow in 2022 relating to CapEx?
The second question is, I know that you do not disclose the figure, but could you guide us a little bit, maybe provide a range or maybe a figure, that could give us a hint on how much have you accessed through the AOD, the Acknowledgement of Debt? Many thanks.
José María Thank you very much. In terms of CapEx, I think we've shown it in page seven, and we are showing EUR 25 million. I don't know if in the accounts there is a question of classification. That is, you may have it under another chapter. But it is EUR 25 million for last year, 2021, and we are expecting the same for 2022, unless it's a specific project to which the end sale is under requirement. That is where we are. In terms of your second question was the guidance on the AOD, the Acknowledgement of Debt. Look, we have used it. We try to use it in parallel with what we are doing in terms of advancing in the project, and we haven't given figures.
Just as we don't give figures or what are the payments we get when we sign the contract or what are the payments we get while you're having the contract. But we have used it, clearly it is linked or pegged to the way we are advancing in the project of DB. Okay, Emmanuel?
Thank you.
Thank you very much. We have no further questions for the moment. Ladies and gentlemen, as a reminder, please dial 01 on your telephone keypad if you wish to ask a question over the phone.
Okay. Meanwhile, we are going to read a couple of questions. We have written questions. The first one comes from Carlos Upierre. It says as follows: Regarding German contract, is it at fixed price? Price, sorry. Did you close the price of procurement? Has it got pass-through clauses?
Thank you, Carlos. Look, the German contract was at fixed price. That is as for the first part or the second part. Does it have pass-through clauses? The answer is no. Three, this is where we've had some deviations which have impacted in our P&L in the last quarter. Going forward, I think you raised a big issue that is the pass-through. I think that's a concept that we hope all the sector you know at the end we should start really thinking of this concept. No, it's a contract at fixed price. That's for number one. It does not have pass-through. But the impact we've already that we've had up to now have already gone through our P&L.
For what is already passed, and for the rest we'll see it in the acceptability of the project going forward. Thank you, Carlos.
Thank you, Carlos. There's a follow-up question also from Carlos. It says: How do you see the industry pricing power for new contracts? I understand how far can we say move to our future clients the increases in price.
Great question, and not an easy answer, I would say. First of all, I think at present now and I hope the producers will improve our pricing power. Why? I think we are in an industry which we are starting to get more and more buyers, so I hope this becomes and makes the sellers like you, the OEMs, stronger. I think the macro is improving, as I said, and we're seeing more and more movement and demand, I would say. So, I do think this helps us. That is as for number one. Two, we do have an issue with state-owned companies or operators, because at the end, when they do their, they come for the offer, it's state-owned, and it's at the end, that can go against the budget of the government of that state-owned company.
At the end, it's difficult to do pass-throughs there. With private operators, it could, or I think it is going to be, easier. That is as for number two. Clearly in the offers going forward, especially with this new situation we have of inflationary world, let's call it, increases in volatility in raw materials, I think more and more, or we go to pass-throughs, or at the end we have to reflect that in the offers and the prices have to be different, taking this into account. That's at least. I don't know what our competitors will do, and it's up to them. That's what we've decided to do. That in that sense, we have to reduce the risk of that. We are fine to play at a pass-through. We have no issue.
If not, at the end, we have to put it in the margin we quote in the project once we quote in the project. Thank you, Carlos. Unless there's further questions.
Okay. It looks like there are no more questions. Thank you very much for everyone for joining the call. In any case, as we usually do, we are pretty open channel for attending any question, additional question you may have. Thank you very much, Carlos. Thank you very much, everyone for the call, and looking forward to see you soon.
Thank you to all the team and thank you to all that have been on the call, all of you. Thank you very much and have a good and safe day. Thank you.