Good morning, everyone. Thank you very much for joining the call, which is aimed to present the results of the first half, 2023. For this end, Gonzalo Urquijo, the CEO of Talgo, will go through the summary of the presentation we released yesterday. At the end of the presentation, we will open a Q&A session for any questions, please, raise the hand of Teams, and we will provide you the access to the microphone. Thank you very much.
Good morning to all. Thank you very much for joining the call. Gracias, Javier, and to the rest of the financial team and investor relation team that are here. I believe you said you raised your hand in Teams, but if they want to do it by writing, they can also put the questions by writing. First of all, I think we're here. We're presenting better results. I think it's good news. We're also, in the last two pages, presenting something different. That is our vision for the medium to long term. We start with the first page. That is in terms of ESG, that's a big priority for us, and the health and safety and well-being of our workers is the most important priority.
We've had, as you can see there, in terms of frequency rates, that is 7.21. Last year we were 9.9, and in terms of severity, there's a small error. It's 0.26 instead of 0.29, and last year we had 0.14. In that sense, we have not improved. We are working hard on that, especially with our subcontractors. I have to say in the form that we have not had any severe, real accidents. Additionally to that, the commercial momentum is good, of course, and we have to find we're benefiting from that for sure. In many ways, as I will try and explain in a few moments. In terms of financial results, we have increased our manufacturing activity, which is clear.
We have now, and we see it after, key basic, big projects. In maintenance, the activity is good. We are back to previous COVID levels with good and stable margins. In terms of EBITDA, you've seen it's higher sales and higher EBITDA, we have been able to protect and maintain our margin. Shareholders have made a choice, that is, only 80-70% have wanted cash, the rest have chosen shares. In terms of debt, EUR 175 million, it is what we expected. If we compare it to last year, we're even somewhat better, for next year, we're confirming the guidance. In terms of the outlook, I think there's two things. We will confirm our guidance.
There's only one small aspect that we will and have improved, that is the average book-to-bill ratio from two to three. For the rest, as we said before, we've given some visibility for the, in our long-term vision. Next page, please. Business performance. First of all, the backlog, the backlog was EUR 2,748 at the end of the year. What have we included? For the moment, we've only included one project. It's a Danish project. It is EUR 184 million, because DSB has still one issue pending, and we're still pending and finalizing. That is the funding, and once that is signed, it will be incorporated. The Egyptian one, there's also one issue. It has to go through parliament.
There it should be no problem. We hope to see this at the end of when we come back from the summer, or I would say in autumn. That is for sure. Additionally to that, if we go to maybe to the lower part, which I think it's important, we can see the backlog, as I said, was EUR 2,748. Now we've had inflows and outflows, as I say. We had new order intake. That was basically the Danish one and some other small ones in terms of maintenance. We have what we consumed or what there has been the work in progress that has been deducted, and we are at EUR 2,768.
If we put the projects I was mentioning before, it would lead us to EUR 4,350 million, which will be our record, undoubtedly. This backlog is providing stability for us, and it's providing a long-term vision that in the sense we can see that our portfolio is going to be full if everything goes okay for the next four or five years. It is true also, we have become more European because these two last projects are part of Germany and Denmark, that we are always open in terms of risk and so on. We also continue to work in Saudi Arabia, on Uzbekistan, and of course, on the France Road and the other ones I've mentioned before now.
Now, the new contracts, all the indexation, clauses, sorry, we will review in a few minutes. Next page, the business performance. What are the main issues here? First of all, manufacturing is gaining pace. That was we're fully embedded in the ICE L project number one, of course, in the DSB project, and also the Renfe project. The Renfe means now is the powerheads... and the conversion of the night train. Those are our main projects for this year. As I said before, the maintenance is on budget, and it's performing well. We had a lot of customers, for example, in the Haramain, in Ramadan, and that really went out. For example, worked out, very well.
As I said before, the backlog and the profile is somewhat different, even though we are open to all of us. In terms of the opportunities, we see we have EUR 60 billion. 60% of that is Europe, the East North Africa is 30%. As you can see, Spain is shrinking at the moment, unless there's some things in maintenance, for the rest, we have no new production for Spain. This year we have been working with industrial optimization and all our supply chain. Financial results: in revenues, EUR 289. It is for the first semester, it is 33% more than last year, okay? With the projects I mentioned just a few minutes ago.
In terms of EBITDA, EUR 35 million, it's 50% more than previous year, and with a margin of 12.1, while last year we were at 10.7. As I said before, we have been able, even though we've increased sales, to keep the margin above 12%. Last but not least, you've seen we've had higher, higher financial interest as well as financial expenses, but it's basically been a question of the accounting standards affecting the EBITDA, knowledge, contract debt. That is, due to IFRS 9, we had to account for that. That has interest every year, and the accountant now tell us no, that we have to bring it all forward and account for that as of today.
That has meant EUR 4 million more expense increase, but that is not a cash out. It's more of an accounting. You've seen the bottom part, the columns. We have quarterly revenue. This has been a historical high revenue for the quarters, EUR 161 million. Since 2015, we had not had one as high, and the one we had in 2015 was when we were doing the Saudi Arabian trains, and it was EUR 1 million more. If not, it would've been the record it was. That was in 2015, it was EUR 162.5 million. In terms of margins, as I just said, our EBITDA was EUR 19.6 million in Q2, and with 19.6, we have 10.1%.
We have seen we're out of the elevens, clearly, independently of more revenue, we have stabilized for the moment, that EBITDA. Balance sheet-wise, we have increased working capital from EUR 278 last year to EUR 304. It is part of the more revenues, the projects we have been in, at the beginning of the other year and end of last year, we had quite a lot of stock. We did that because we didn't want to have more problems with the supply chain, now it's being we're starting to consume it. That situation, as we have and we increase our work in progress, will be more and more normalized. Additionally to that, you see that in terms of sales, we were 56% and one year ago, 58%.
It is true that we compared to the end of the year, we were at 46%, as you see in the lower columns. That is clear. Now we are in gold. Last year, we were running out of... Not running out, I mean, finishing some projects, and now we're really pushing the new projects. That's our normal course of business, I want to say. In terms of debt, it's EUR 175. One year ago, it was EUR 163, and it is true by the end of the last year, we were at EUR 97.4. As I said, if we compare last year, look, we were at 2.0x multiple at mid-year, and at the end of the year, 1.9x.
For this year, we are at 2.7, and we confirm the 2.0 by the end of the year. Last, that is the outlook, and the outlook, we confirm the EBITDA, the capital structure. As I said at the beginning, the average book-to-bill from 2, we got 6 to 3, which is a good news. I think we have a second good news, is the script dividend that 82% of the shareholders have decided that it should be the share buyback or new shares, the share buyback. I would like to, and it's very important that we at the end, share these two last pages. For us, it's very important.
May I say that this is an outlook, it is a business long-term vision, but we have to be, as always, very prudent to this, because you have many factors that could lead to changes. We have another pandemic or something or any other thing. In this long-term vision, we want to be extremely prudent, and that is what we see as of today. How do we build this? We build it basically with what we have in our order book, what we see and we have signed, that is pending the final signatures, and what are other contracts we are very close to, and we are very advanced in the negotiations. This, we try to look at the, at the, with the long-term vision.
For all this, I think it's important to insist that in terms of backlog, we are still in this historical high. Additionally to that, we see a lot of opportunities in our core markets. Clearly, all these new offers and going forward to the new paradigm, that means invitation, closes to protect us from inflation. We have continued working very hard on all the supply chain and the purchasing departments in terms of widening the base of our suppliers, improving it, so the reduced time, clearly long-term contracts. Last but not least, we, our offers now have also been adapted to the new financial scenario. That means that liquidity is more difficult and interest rates are higher, so that should be embedded in our projects.
Technology, where we have two new platforms, that is the German one, the ICE L, 230 platform, and the Avril, clearly. So we do have two very good products, which are going to be extremely helpful going forward. In terms of commercial, entering new markets, that we say we're still looking at new markets. What do we mean by that? We are looking at homologation for our high-speed train in France. Now, for the German roads, we're looking at the Netherlands, we're looking at Russia and maybe other countries around Germany. Last but not least, and very important, the industrial part. Clearly, we're working very hard on industrial optimization. What does this mean? It means the following: what we are looking is at efficiency, efficiency, efficiency.
This means we're reviewing fully all our industrial processes, it really means that we have to improve or continue improving its cost, time, and quality. The three of them are just as important to us, when we talk of quality, it's internal standards and our customer requirements. What are we doing for this? Clearly, we're looking at all what is technology, digitalization, looking at our value chain, standardization, cost, cost of things that we are looking into, because at the end, we have to benefit from this tremendous opportunity that the market is offering today, and produce as much as possible. In terms of maintenance, we have new contracts that is important going forward. It will be Germany, it'll be Denmark, it'll be Egypt for the nice trains, clearly.
two new ones in Spain, that is the Avril and is the 13,750 train, which we have to renew, and we think we will. With that, also, we're working very hard in maintenance. When we started, it was corrective, then it became preventive, and now it become predictive. That means we have to change our behavior, we're looking through data analysis, through technology, we're able to advance on the extreme, much more efficient in maintenance. Our two main things here is safety and cost. This last page, at the end, what we're trying to summarize what we said in the previous pages, that we see our revenues, and see with the prudence, we have- we see our revenues higher than EUR 700 million going forward. Our EBITDA between 14% and 15%.
Debt, debt profile, which a moderate leverage and we expect to grow the shareholder remuneration in view of the growth of results. That's basically it, and thank you very much, and we are open to questions. Thank you very, very much.
We have today, again, just a, as a reminder, you can raise your hand. It's the option you have on the top of the display, or you can also make questions through the chat. We have a couple of questions. First, yes, coming from Quentin from Oddo BHF. Go ahead.
Yes, hello. Good morning, everyone. Thank you for taking my question. Thank you for providing me the targets. The increase in sales, as compared with the run rate of between EUR 500 million and EUR 600 million, is quite significant, and I'm wondering, what are the underlying drivers to reach the above EUR 700 million of sales in 2025-2026? Should we expect significant CapEx for the coming year in order to increase your industrial capacity? Thank you.
Thank you very much. I'll start by your second question. No, we're not expecting an important CapEx going forward. Maybe some increases, but at the end, we're talking of 15% of what we're doing now, or 20%, no more than that, per year. Very moderate, I would say. In terms of sales going forward, we do believe that with the backlog we have today. At the end, let's not forget that many of these orders are orders that are repeating what we've just done. We believe in our efficiencies there and with all this improvement plan. At the end, we'll see that we're going to see on one side, more maintenance, and on the other side, we'll have a higher volume in terms of manufacture content. Okay.
Thank you very much. There is also a question coming from Bosco Ojeda. Bosco, please go ahead, Bosco.
Hi, good morning. I have a few short questions, if, if I may. First one is on Saudi Arabia. You're still on the race for that, dependent on factoring levels, can you give us an update on, on how much have you discounted from, from clients? Also wanted to ask about the, the legal disputes that you have, the claims. Why are you not provisioning that if you're not, and, and also or if you have any visibility there? Then finally, more, more strategic. You're gaining a lot of contracts in the sort of medium speed, not so much on high speed, whether that means something, if you think that that is likely to be the case for the very long term?
I mean, I can see you have upgraded margins, so maybe those medium-speed trains are still having quite a nice margin. If you can comment on that. Thank you.
Thank you, Bosco, good morning. Okay, in terms of Saudi Arabia, clearly, we're still continuing there. We're looking now. There's, we had already said it. We want to, and we are now negotiating an increase, an extension of the excellent contract in 2020. That's for now, one, and we're looking at other projects in Saudi Arabia. There's a Neom, there's another project of Royal trains at some stage, where we're looking at three projects. I would say the closest we are the one, is the extension of the 20 trains. In terms of factory, I can only tell you, we, we don't give that figure, but what we figure is, it is in the same level of what it was at the end of last year. That is where it is.
In terms of legal disputes, that was your third. Look, first, with Renfe, we do not have a legal dispute. The only thing we've had is they send me a letter with a notary, and that was it. We're saying, "We have the right to claims," and we have answered to that, saying, "Well, this is our answer to all this." We say, "No, there was force majeure. The law has changed. You have changed around trains." That is it. We gave them the answer. That was a 100, 900 pages answer. With this, I have to tell you that they have not answered anything. There's nothing to provision on that, in the sense that there's no legal claim here. There's only a letter saying that they have the right to claim this.
That is, for the second comment, for the U.S., there has been a legal claim. We checked it with our lawyers and our auditors. We believe we have a very good case in that sense, and that's why we don't have to do absolutely no provision, at least for the moment. Your last comment in terms of contracts. Look, I think we see now that two contracts that are, let's say, medium speed, they're also high speed, because the trains that will be going at 230. It's clearly not very high speed or high speed as we understand it in Spain. You're right, and I mean, I think it's a question of when those contracts have come in. We continue to...
First of all, the margins in those, you know, we are very strict on our margins, as good as in high speed, very high speed. Look, when I speak now of Rajasthan, when I speak of Saudi Arabia, when we can speak of La Meca, et cetera, those are very high speed. It's just a question, I think, of momentum, not that we're moving in or out or anything like that. We are, our core sector is, and then, as you know, those regional that go at a high velocity or high speed, and the other have very high speeds. Okay? Thank you.
There was another question coming from a phone number. I don't know if you still want to make the question. I believe so. Please go ahead. The phone number starting 615. You are mute.
Maybe he put the hand away, and he wasn't, he didn't do it on purpose or something.
Yes. Okay. Well, I think he's not able to do it. We are, we also have other questions, we can through the chat. I will read them, so we can, we can go on a second. The first one says, could you give us some updates on the electric train opportunity? Are they being able to obtain financing?
What is the question?
The question comes from the [audio distortion] .
Miguel Angel, como estas? Look, at the end, we continue working on them and on the contract, and they are now the only news we can say and know from them, is they're they are working on the closing the equity and closing the funding. We hope to be have it closed by autumn. Okay? Gracias, Miguel Angel. Hello?
Yes. Following question comes from [audio distortion] . Although no problem has been made for La Meca project because they are confident of a positive resolution, what would be the worst case with the La Meca project?
Well, as I have to tell you, our lawyers believe that we have a good legal case, so that is where we are. The worst case would be the train data, that we think we are very far away. Not only that, we think we have to give us money. That, that's what we're concentrating on. For us, that is where we stand in this position. I have to say we have to be very careful with this, because all of it is legal and confidential and privileged, our legal matters. There's little more we can add to add to that in legal.
Next question comes from César Sánchez-Grande, [audio distortion] . What is the moderate leverage in terms of net debt to EBITDA?
Tessa, good question, but I can't answer more than that. Not the lawyers, but we said it's moderate leverage. You have to run your own numbers and think of it. I can't go forward than what we've put in writing. In any case, thank you. Gracias, César .
Last question, comes from, please, the, the, the one connected to the phone number 615. He's trying to make a question. You have to unmute, so please go ahead.
There's another one also put a question.
In any case, he's not able to make it. Okay.
No further questions?
No further questions. Thank you very much.
Thank you to all. Have a good morning.
Okay. Okay.
Yes, hello?
Hello, good morning. It's [Gonzalo de Manganello from BNTV]. Thank you very much for the presentation, and I much appreciate your long-term guidance, Gonzalo and all the team. I have two questions, if I may. One is regarding the balance sheet and dividend policy. Now that we are more certain of the of normalized margins and of the excellent execution and guidance, what would be the dividend policy long, long term, seeing that all the working capital investment is already more or less low? The second question is regarding M&A, medium to long term, what are the opportunities, accretive opportunities are you mapping and you're analyzing in the market? Maybe maintenance or maybe what, whatever you think might be accretive.
Thank you very much, Gonzalo. Good morning. In terms of dividends, I think we have to say what we said here. We expect the dividends to grow with the results, but little more we can say to that. That's what we put in the outlook in the business long-term revision. We do hope, as we're saying, that EBITDA with this will increase, so net income should also increase, so that should be a trend also for dividends. It will be to a board of directors to propose to the general shareholders meeting and to the general shareholders meeting. That should have a good trend in any case.
Look, in terms of M&A, I think we have to be very careful, and I think last time we talked on this, certainly I was in the press the following day saying that we were going to go with this. We, this, the board of directors of Talgo and the management team always analyze, opportunities that are accretive, Gonzalo. It's in our, you know, let's say, and it can be directly li- linked to more production, to maintenance, as well as things, maybe software, maybe signaling, signaling, or other motorization, other things. But I can just confirm that if there's any opportunity that comes to us or brought to us, we are always analyzing and, looking at it, really makes strategic sense. That means financial, the logic in what we want to do in the next years, et cetera. That would be it, Gonzalo.
Okay?
Thank you very much. Congratulations for the growing results for all the team.
Thank you.
Please, Gonzalo, there's a last question coming also, again, from your area. Have you signed the options to get DB maintenance in Germany?
We are working on that, and I believe we made public that we had signed an LOI with DB. We are working on that, and I think, yes, we should get maintenance. I confirm we will. In principle, we have to sign the final document, but I think you ask me now, we will get maintenance in Germany. The answer is yes, which is key for us and very important. Thank you.
If there are no more questions.
Thank you very much to all of you for your interest and support. Have a good day, but above all, have a good and safe summer. Take care, all, and thank you very much. Bye.