Vossloh reporting order intake surge in H1; sales and EBIT well up
- 6-month (H1) sales up 21 percent, EBIT rise at 27 percent even steeper
- Order intake soaring 67 percent
- ROCE and EBIT margin easily in excess of benchmarks
- Budget restated to allow for disposal of Vossloh Infrastructure Services
- Gain from disposal to substantially raise group earnings for all of 2008
Vossloh AG increased its first-half (H1) sales in 2008 by almost 21 percent to €591.0 million versus 2007. For the same period, EBIT mounted 27 percent to €66.2 million. The H1 figures for both 2008 and 2007 have been adjusted for Vossloh Infrastructure Services (VIS), now disclosed separately as discontinued operation. An agreement was signed on June 30 with Eurovia S.A., a VINCI Group company, regarding the sale and transfer of VIS retroactively as of January 1, 2008.
H1 order intake jumped 67 percent to €679.8 million (up from €406.8 million excluding VIS).
The Vossloh Group's prime performance indicator, ROCE, reached 16.8 percent in the first six months, thus topping the 15-percent benchmark. The H1 EBIT margin climbed from 10.6 to 11.2 percent, thus even higher above the 10-percent benchmark.
Group earnings, which include the discontinued Vossloh Infrastructure Services operation, surged 44 percent to €46.2 million.
Said Werner Andree, CEO of Vossloh AG: "The success of the past six months confirms that we are moving in the right direction of continuing value-driven growth. The disposal of VIS will substantially widen our latitude for future acquisitions, especially for further expanding our product portfolio."
Business outside of Europe booming
Vossloh reports further progress in the internationalization of its business; the share of sales outside of Europe again climbed, thus over 26 percent (up from almost 21 in H1/2007). The Group is moving ever closer to its goal of 30 percent, with the two US subsidiaries acquired by Vossloh in the spring of 2007, Vossloh Track Material and Cleveland Track Material, making major contributions. The Middle East, Asia, Africa, and Oceania also reported definite sales increases, albeit from low starting bases.
Rail Infrastructure
The Rail Infrastructure division generated H1/2008 sales of €323.5 million (excluding VIS), a like-for-like growth of just short of 32 percent.
Once more most of the increase was derived from the Switch Systems business unit whose H1 sales jumped 37 percent to €238.3 million. The main reason was that the revenue from the two US subsidiaries this year was included for the full 6 months, a year ago only for Q2. Also sharing in the growth was the contribution from the new acquirees in Australia, Denmark, and the Netherlands, newly consolidated in 2008. The organic growth of sales by Switch Systems was over 13 percent.
At €85.8 million, sales by Vossloh Fastening Systems rose almost 12 percent. Temporary delays in the construction of the Chinese high-speed line meant that H1 sales at the new production plant in China were short of expectations. Since late May, however, sales here have been back on track.
In all, Rail Infrastructure reported an EBIT of €52.8 million (up around 22 percent); ROCE reached 19.2 percent.
Motive Power&Components
The Motive Power&Components division's H1 sales totaled €267.3 million, a gain of around 10 percent; both business units, Electrical Systems and Locomotives, reported good growth rates.
H1 sales by Vossloh Locomotives added up to €201.6 million (up about 7 percent), with both Valencia (€112.8 million) and Kiel (€87.5 million) sharing in the growth.
H1 sales by Vossloh Electrical Systems reached €65.7 million, an improvement of 19 percent versus 2007.
EBIT at Motive Power&Components again soared, to €21.4 million (up 27 percent) while ROCE at 18.8 percent was well above the group benchmark of 15 percent.
Employees
Excluding VIS, the Vossloh Group employed a worldwide workforce of 4,630 at June 30, 2008. Versus June 30, 2007, this represents a rise of around 12 percent.
Prospects
Following the disposal of VIS, the budgeted figures have been correspondingly adapted. For all of fiscal 2008, sales of €1,126 million are now budgeted (instead of €1,340 million), an LFL rise of around 11 percent. EBIT is set to amount to about €131 million (instead of €142 million), thus around 18 percent in excess of the LFL prior-year figure.
As to group earnings, Vossloh is budgeting around €128 million (instead of €91 million) for 2008, equivalent to an EpS of about €8.65. This vast increase from the prior-year €71.4 million will be attributable to the book gain from the disposal of VIS, which from today's vantage point, is budgeted at €42 million. In contrast, VIS's earnings for all of 2008 will accrued to the new owners. As to 2009 and on an LFL basis, Vossloh is aiming for further growth and sustained profitability.
Key figures at a glance
| Vossloh Group | H1/2008 | H1/2007 | Δ % | Q2/2008 | Q2/2007 | Δ % | |
|---|---|---|---|---|---|---|---|
| Sales* | € mill. | 591.0 | 488.8 | +20.9 | 302.5 | 269.7 | +12.2 |
| EBIT* | € mill. | 66.2 | 52.0 | +27.3 | 35.9 | 32.9 | +9.1 |
| ROCE* | % | 16.8 | 14.5 | – | – | – | – |
| Group earnings | € mill. | 46.2 | 32.1 | +43.9 | 26.9 | 20.1 | +33.8 |
*excluding Vossloh Infrastructure Services
Vossloh forecast for a divestment of VIS in 2008| Vossloh Group | 20071 | (old) | 2008p2 | (old) | 2009p2 | (old) | |
|---|---|---|---|---|---|---|---|
| Sales | € mill. | 1,014.9 | (1,232.1) | 1,126 | (1,340) | 1,175 | (1,402) |
| EBIT | € mill. | 111.2 | (121.5) | 131 | (142) | 137 | (149) |
| Group earnings | € mill. | 71.4 | (71.4) | 128 | (91) | 91 | (93) |
12007: Vossloh Infrastructure Services accounted for as discontinued operation
22008-2009: excluding Vossloh Infrastructure Services
Werdohl, July 30, 200822008-2009: excluding Vossloh Infrastructure Services
Contact:
Uwe Jülichs
Head of Corporate Communication
Vossloh AG
Phone: (+49-2392) 52-608
Mobile: (+49 172) 2909852
Email: uwe.juelichs@ag.vossloh.com
Today's Vossloh is a global player in the rail technology markets. The Group focuses on its core businesses of rail infrastructure, rail vehicles, and trolleybuses. Reflecting this focus, Vossloh's two divisions of Rail Infrastructure and Motive Power&Components operate under the roof of MDAX-listed Vossloh AG. Excluding the discontinued Vossloh Infrastructure Services operation, 4,066 employees generated sales of €1,014.9 million and an EBIT of €111.2 million in 2007.