Stockholders give their consent to transactions
Selective expansion into Transport Technology Group/Extraordinary stockholder's meeting of Vossloh AG
At the extraordinary stockholders' meeting in Düsseldorf today, a large majority of the stockholders of Vossloh AG gave their consent to the acquisition of all of the shares in Cogifer SA and Cogifer TF by Vossloh AG, along with the disposal of Vossloh's stake in the VAE Holding GmbH, as well as to the underlying agreements.
With the transfer of its Lighting division at the end of July 2002 to the Japanese Matsushita Electric Works Ltd., which resulted in an influx of €156 million, Vossloh had initiated the Group's strategic realignment. Through selective expansion, Vossloh intends to develop into a transport technology company positioned in attractive growth markets.
"Right now, our group's business is railways. We, of course, want to consolidate our sound positioning in this sector while, at the same time, adding Vehicle Components to our portfolio. This will help improve the entire group's risk structure," emphasized Executive Board Chairman of Vossloh AG, Burkhard Schuchmann. These transactions presented a unique opportunity to further expand railway activities and hence achieve significant added value.
The Cogifer Group comprises the two sister companies Cogifer SA und Cogifer TF. At Cogifer SA, 90 percent of sales, which in 2001 were just under €180 million, is accounted for by rail switches and trackwork, the remaining 10 percent by signal components. Cogifer SA is second only to VAE as the world's biggest supplier of switches and trackwork for passenger, goods and local rail transport, as well as high-speed lines. EBIT in 2001 added up to €24.1 million, some €10 million up over the year earlier.
Cogifer TF, whose sales amounted to €166.1 million last year, operates in the track construction and, especially, track maintenance markets. With these activities, the company leads the field in France, Belgium, and Luxembourg, its customers including not only public rail operators but also the owners of private networks. The products are also used in Germany. In 2001, the company's EBIT reached €10.2 million, some 30 percent higher than the year before.
In a related move, Vossloh disposes of its some 45-percent stake in the Austrian VAE AG, which substantially operates in the same business lines as the Cogifer Group. The stake, which Vossloh AG holds via VAE Holding GmbH, in a 50:50 joint venture with voestalpine Bahnsysteme GmbH, will be taken over at a price of €140.5 million by voestalpine Bahnsysteme GmbH." Acquiring the Cogifer Group affords the opportunity to supply all the track components through majority-controlled companies. The stake in a 50:50 joint venture does not provide such undivided management opportunities needed to exploit strategic options flexibly and to best advantage," stated Vossloh's CEO.
The acquisition of the Kiepe Elektrik Group, as announced a few days ago, will allow Vossloh to selectively expand its railway product and services activities through a company specialized in the production, installation, and marketing of complete electrical component packages and parts for trams and trolleybuses. This group's prime markets are the regional transport and transit companies in Europe, especially Germany and Austria. Last year, the Kiepe Group generated total sales of around €77 million.
These transactions and the related book gains and deconsolidation effects will reflect very favorably on Vossloh earnings in 2002 and 2003. "Taking into account these aspects and along with adequate provisions, we expect net income in 2002 and 2003 to range between €50 million and €55 million, equivalent to an EpS of €3.47 and €3.80, respectively. When by 2004 the newcomers have been fully assimilated, sales are likely to rise to €900 million and net income to around €55 million, all from operating business," stated Schuchmann, who also referred to the improved balance sheet ratios. With an equity ratio unchanged from the 35 percent in 2001, financial debts are expected to shrink to around €198 million from the originally budgeted €222 million.
As to current business, Schuchmann pointed out that as of August 31, 2002, and discounting Lighting and the newly acquired Cogifer and Kiepe, sales had reached €427.1 million, which is 6 percent up over the corresponding year-earlier level. And this is spot on target.
As of August 31, 2002, EBIT totaled €34.8 million, up 7.1 percent yet short of budget mainly due to delays in locomotive shipments, which, however, will be made up for by year end.
So far, this year's Cogifer business (not included under Vossloh's) has proceeded according to expectations.
"For the year as a whole and taking into account all the aforementioned Group transactions we expect sales of €703 million and net income of €50 million, equivalent to an EpS of €3.47. Of the net income, €29.5 million is likely to result from operating business and €20.5 million from the transactions," stated Schuchmann.
Düsseldorf/Werdohl, September 18, 2002
For more information, contact:
Werner Andree, Vossloh AG, phone (+49-2392) 52-407