Vossloh: looking forward to the years ahead
Record performance predicted for 2007Despite the turmoils confronting the rail industry in general, the Vossloh Group looks back on a most successful fiscal 2004.
At €922.2 million, sales were again stepped up, this time by €10 million or a good 1 percent over the 2003 record of €912.5 million. At €105.8 million EBIT appreciably outperformed the prior year’s €100.9 million. The EBIT margin rose from 11.1 to 11.5 percent. This commendable performance is due to a much more favorable product mix combined with cost savings in response to shrinking demand by a number of submarkets.
The Group’s net earnings, too, were once more visibly stronger, climbing from a solid €55.5 million a year ago to €57.2 million in 2004, despite the increased net interest expense of €1.5 million and the 2 percentage points heavier tax load ratio of 35.5 percent on account of the decline in tax-exempt capital gains. Notwithstanding the higher net earnings, EpS only crept up from €3.90 to €3.91 due to the concurrent advance in the number of shares outstanding.
Group equity progressed from €297.6 million to €331.1 million, equivalent to an equity ratio of 32.4 percent (down from 33.8 percent). The return on equity came to 27.1 percent (down from 29.0 percent).
ROCE slipped from 16.3 to 15.3 percent but is still above the group benchmark of 15 percent.
The Executive and Supervisory Boards will propose to the annual stockholders’ meeting to distribute for fiscal 2004 an unchanged cash dividend of €1.30 per share which, “based on Vossloh’s year-end stock price of €36.35, thus yields 3.6 percent. In comparison to around 35 percent the year before, some 33 percent of net earnings will then be distributed. With this proposal, the Executive and Supervisory Boards are sticking to a dividend policy based on the principle of predictability,” commented Vossloh AG’s CEO Burkhard Schuchmann to the press assembled in Düsseldorf
As of December 31, 2004, the Vossloh Group’s headcount totaled 4,481, up by 186 employees or 4.3 percent. The additions were chiefly due to the first-time consolidation of Vossloh Min Skretnice and Swedish Rail Systems. Personnel expenses per capita inched down from €48,400 to €48,200 while the ratio of payroll to value added further improved from 66.9 to 66.3 percent.
For 2005 and including the Valencia-based diesel locomotive plant acquired from Alstom, the Vossloh Group expects to lift sales to just under €1.1 billion, Valencia contributing around €138 million. In all, sales would then grow by around 19 percent, excluding Valencia by almost 5 percent.
“Due to the groupwide efficiency enhancement and cost-savings programs announced back in December 2004 and meanwhile underway, 2005 will see quite substantial one-off expenses. Despite these initially high-cost measures and notwithstanding the surge in steel prices, we expect to achieve this year an EBIT of €93.4 million and an EBIT margin of 8.5 percent,” emphasized Schuchmann. The group’s net earnings are budgeted at €47.4 million and accordingly, EpS at €3.25. At 14.5 percent and despite the already mentioned burdens, ROCE is likely to be within close range of the 15-percent groupwide benchmark.
Looking forward and ahead Schuchmann stated, “This year we will be sowing the seeds for further successful periods. By 2006, our action programs will be bearing fruit so that, from today’s vantage point, 2007 should prove easily the most successful year in the history of Vossloh.”
Werdohl/Düsseldorf, March 18, 2005
For more information contact
Christiane Konrad, Vossloh AG, phone: (+49-2392) 52-249