Vossloh sees sound opportunities for further growth momentum
Expected performance for this year reaffirmed / annual stockholders’ meeting in DüsseldorfDespite the very difficult situation in the rail industry, the Vossloh Group showed 4-month sales of €257.4 million in 2005, almost at the year-earlier €261.9 million, the slight shortage being mostly due to the lack of invitations to bid for diesel locomotives. The shortfall could not be offset by sales at the diesel-electric locomotive, Valencia, plant acquired from Alstom since the takeover was only possible as of April 1, 2005, and the newcomer has only been included in the consolidated income statement as from that date.
Appropriate provisions have been made by the Group to pay for the necessary restructuring and associated workforce retrenchments, above all at Kiel. These one-off burdens, the somewhat lower volume of business versus 2004, and the sharp rise in steel prices have, as expected, eroded the level of earnings, especially at the Motive Power division. Group EBIT for the first four months 2005 fell from €21.4 million a year ago to €16.4 million. The EBIT margin slipped from 8.2 to 6.4 percent while group earnings for the first third of the year dipped from €11 million to €5.5 million.
For all of 2005, Vossloh is sticking to its budgeted EBIT of €93.4 million, following last year’s €105.8 million. Group earnings are predicted to reach €47.4 million (down from €57.2 million), with earnings per share then amounting to €3.25 (down from €3.91). Group sales should rise to around €1,060 million, up about 15 percent or almost €138 million over 2004. Included in these figures is the Valencia plant (Vossloh España).
At today’s stockholders’ meeting in Düsseldorf, Vossloh AG’s CEO Burkhard Schuchmann pointed out that the capital market had rewarded this strategic focus by the Group on rail technology as its core business combined with sustained growth. “Now, the capital market rightfully awaits further growth momentum for which the Executive Board recognizes sound prospects and is applying its utmost to achieve,” he added.
Such opportunities result above all from the progressing and unstoppable wave of rail operations deregulation and the expected radical changes on the supply side where “simply for microeconomic reasons the large system suppliers will shed parts of their rail businesses while countless smaller players, due to the increasing need for internationalization, will be looking for support to specialty suppliers such as Vossloh who are already global operators,” commented Schuchmann. The consequences for Vossloh: further attractive takeover candidates some of which are already being wooed “to the best of Vossloh’s ability.”
Düsseldorf/Werdohl, May 25, 2005
For more information contact
Christiane Konrad, Vossloh AG, phone: (+49-2392) 52-249