3Q figures presented: Vossloh showing vigorous sales and earnings surge
- Both divisions with definite increases in sales
- Group EBIT up by 65 percent
- Forecasts for all of 2007 and 2008 again revised upward
In the first nine months (3Q) of the current fiscal year, Vossloh AG raised group sales by 28.4 percent to €885.4 million. This significant improvement is the outcome of sustained healthy performances by both divisions.
At €82.7 million, EBIT was up 65 percent over the year-earlier €50.1 million* while group earnings more than doubled, hiking from €19.6 million to €45.9 million.
The EBIT margin jumped to 9.3 percent, following 7.3 percent the year before. Likewise significantly improved was ROCE, which soared from 9.5 to 13.6 percent.
Included in these figures are also the sales and earnings of the French Européenne de Travaux Ferroviaires SA (ETF), fully taken over by Vossloh as of July 1, 2007, and for the first time fully consolidated in Q3. Incremental Q3 sales from ETF amounted to €14 million.
During the period Vossloh came closer toward its strategic target of stepped-up internationalization of business outside of Europe. Whereas in 3Q/2006, non-European sales had still accounted for less than 10 percent, the share for 3Q/2007 leaped to around 18 percent. Largely contributing to this have been the two US switch manufacturers acquired in the spring of 2007 and rail fastener production for China. However, there was also a pronounced revival of domestic demand.
Both divisions, Rail Infrastructure and Motive Power&Components, shared in this strong performance with clear sales and earnings improvements, in all cases double-digit percentages.
Rail Infrastructure
In 2007, Rail Infrastructure’s 3Q sales at €534.6 million rose 21.2 percent over 3Q/2006.
Vigorous momentum was generated by Vossloh Switch Systems which propelled its sales 46.0 percent to €264.7 million. Alongside strong organic growth, the figure also reflects the first-time consolidation of the two new US subsidiaries, Vossloh Track Material Inc. and Cleveland Track Material Inc., in April and May 2007, respectively. Like-for-like sales by this business unit advanced 27 percent.
Sales by Vossloh Fastening Systems mounted about 19 percent to €122.0 million, chiefly due to again strong domestic demand, orders placed for Spanish suburban transport systems and shipments for the Olympic Tianjin–Beijing line in China in early 2007. Infrastructure projects in Poland likewise broadened business.
Sales at the Infrastructure Services business unit added up to €155.7 million; down from €166.7 million, as expected, and due to the year-earlier large-scale local transport projects in France meanwhile completed during the period.
In all, Rail Infrastructure generated a 3Q EBIT of €74.7 million (up from €57.9 million), a substantial 29.0 percent improvement.
Motive Power&Components
Motive Power&Components raised its 3Q sales by a high 40.8 percent to €350.6 million to which Vossloh Locomotives contributed the lion’s share of €261.9 million (up 46.4 percent).
The Electrical Systems business unit also recorded a double-digit rise to €88.7 million (up 26.7 percent).
Much improved is the division’s EBIT, vaulting from €9.9 million in 3Q/2006 to €23.6 million this year.
Emphasized Werner Andree, Executive Board Spokesman of Vossloh AG: “The excellent performance shown in the first three quarters of 2007 proves that we are on track both operationally and strategically.”
Prospects
A number of considerations such as the first-time consolidation of the ETF Group have prompted Vossloh to revise upward its previous forecasts and again raise its sales and earnings predictions. For all of 2007, Vossloh expects group sales of €1.2 billion (previously budgeted at €1.14 billion), equivalent to a rise of around 18 percent from 2006. EBIT is expected to outpace sales and reach around €118 million (so far forecasted at €114 million). As a consequence the EBIT margin of 9.8 percent is just short of the targeted 10 percent, mainly due to nonrecurring burdens resulting from such factors as, among others, the first-time consolidation of ETF.
For 2008 and from today’s vantage point, Vossloh is targeting sales of €1.3 billion (previously budgeted at €1.2 billion) and an EBIT in the region of €134 million (so far forecasted at €132 million). Vossloh will present its revised 2008 forecasts on completion in December of the 2008 budgeting process.
*The 3Q/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.
For the full interim report go here .
Werdohl, October 30, 2007
Contact:
Phoebe Kebbel
Hering Schuppener Consulting
Phone: (+49-69) 92 18 74 77
Mobile: (+49-173) 286 21 10
Email: pkebbel@heringschuppener.com