Vossloh achieves record sales in H1/2007
- Double-digit sales growth in both divisions
- EBIT margin of 10 percent almost achieved
- Outlook lifted
In the first six months of fiscal 2007, the Vossloh Group generated record sales of €585.2 million, up 27.2 percent over the year-earlier figure* of €460.0 million.
At €56.2 million, H1/2007 EBIT was stronger than sales, almost double the €28.7 million in 2006, while group earnings more than trebled to €32.1 million compared with the €9.0 million of a year ago.
The EBIT margin of 9.6 percent for the period nudged the self-set threshold of 10 percent (up from 6.3 percent in H1/2006). As to the 15-percent ROCE benchmark, this was topped, rising from 7.8 percent in H1/2006 to 15.7 percent in the first six months of fiscal 2007.
During the period under review, Vossloh also moved closer toward its goal of increasing the share of non-European sales to 30 percent. Whereas in H1/2006, the Company generated less than 10 percent of its sales outside of Europe, non-European sales now accounted for around 17 percent of the total, gains being recorded chiefly in the regions of North and Latin America as well as Asia.
Both divisions contributed to the sales and earnings gains in H1/2007 with double-digit growth rates.
Rail Infrastructure
In H1/2007, the Rail Infrastructure division boosted its sales by 16.9 percent from €292.7 million to €342.2 million.
The added sales were chiefly generated by the Switch Systems unit thanks to vigorous organic growth of 32 percent coupled with the first-time consolidation of the new US subsidiaries: Pohl Corp., now operating as Vossloh Track Material Inc., first consolidated as of April 1, 2007, and Cleveland Track Material Inc., a member of the consolidation group since May 1, 2007. The two companies together contributed roughly €15 million to Q2/2007 sales.
The Fastening Systems business unit also registered double-digit sales growth, while sales at the Infrastructure Services unit fell short of the year-earlier level as expected. Not included is the effect on sales and earnings from the intended acquisition of the remaining 50-percent stake in the French affiliate Européenne de Travaux Ferroviaires SA (ETF), because the deal has not yet been closed.
At €47.5 million, Rail Infrastructure's H1/2007 EBIT was 33.1 percent higher than the €35.7 million for 2006.
Motive Power&Components
In the course of H1/2007, Motive Power&Components expanded business volume even more strongly than the Rail Infrastructure division, its sales surging by 45.0 percent from €167.5 million in H1/2006 to €242.8 million. The chief contributor to these gains was the Locomotives business unit and in particular strong demand for locomotives and metro trains at the Valencia production site, although locomotive manufacture at Kiel also recorded double-digit sales gains, as did the Electrical Systems unit.
Thanks to good capacity utilization and a more lucrative product mix, the division's earnings soared from €3.5 million in H1/2006 to €16.8 million in the first six months of the current fiscal year.
Vossloh AG CEO Gerhard Eschenröder reiterated that, "The H1 figures and the current order backlog endorse our assessment that fiscal 2007 will be our best ever."
Prospects
Whereas Vossloh's forecast to date had included only the first US acquisition, Vossloh Track Material Inc., the Group has now integrated the second US acquiree, Cleveland Track Material Inc., into its budgeting. Taking into account the sales and earnings input from the two US subsidiaries, Vossloh now expects for fiscal 2007 sales in the region of €1.14 billion and an EBIT of about €114 million. This would also take the EBIT margin to the 10-percent target for the entire year. From today’s vantage point, Vossloh expects for 2008 sales of around €1.2 billion and an EBIT of about €132 million.
*The H1/2006 figures were adjusted in accordance with IFRS for the Information Technologies division, which was sold in January 2007 and has since September 2006 been shown in the balance sheet as discontinued operation.
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Contact:
Dr. Phoebe Kebbel
Hering Schuppener Consulting
Phone: (+49-69) 92 18 74 77
Mobil: (+49-173) 286 21 10
Email: pkebbel@heringschuppener.com