2007: Vossloh's best year ever
- Sales up 21 percent, EBIT up 47 percent
- ROCE and EBIT margin much improved
- Prospects for 2008 reaffirmed
Vossloh AG obtained its best ever results in fiscal 2007 and even exceeded the forecasts twice upwardly revised in the course of the year. Group sales climbed 21 percent to €1,232.1 million; EBIT mounted 47 percent to €121.5 million, and group earnings more than trebled to €71.4 million.
ROCE mounted significantly, too, from 12.9 to 14.9 percent, the EBIT margin from 8.1 to 9.9 percent, these two indicators therefore substantially matching the corporate benchmarks of 15 percent (ROCE) and 10 percent (EBIT margin).
Said Werner Andree, Vossloh AG CEO: "2007 was a year in which we not only reached major strategic milestones such as the opening of the new factory in China and entry into the US market; we also arrived at our self-set profitability goals. And we look confidently ahead, too. At year-end, order backlog was around €1.3 billion and this is in excess of sales generated during all of last year. Particularly within the current capital market environment I see Vossloh's strength in the fact that we are able to forecast business to come with relative accuracy and that our vulnerability to cyclic fluctuations is limited."
Dividend hike to €1.70 per share proposed
In view of the solid performance in fiscal 2007, the Executive and Supervisory Boards will propose to the annual general meeting a dividend of €1.70 per share, up from €1.30 and equivalent to a payout of around 35 percent.
Internationalization making headway
Last year saw progress achieved by Vossloh in its further internationalization efforts, with non-European sales climbing from 9 to 21 percent and thus moving in on Vossloh's target of 30 percent. Largely contributing to this advance were the acquisition of two switch producers in the USA in the spring of 2007 and the first shipments from the new Chinese manufacturing plant of rail fasteners for high-speed lines in that country.
At year-end 2007, the Vossloh Group had worldwide 5,972 employees (up 23 percent from year-end 2006). The workforce in Germany added up to 1,210. The increase was chiefly due to the acquirees and the new production location in China.
Both Vossloh divisions – Rail Infrastructure and Motive Power&Components – contributed double-digit percentages to the sales and EBIT rises.
Rail Infrastructure
Rail Infrastructure generated sales of €763.1 million in fiscal 2007, an improvement of 24 percent over 2006.
Major momentum was delivered by the Switch Systems business unit whose sales jumped 41 percent to €357.4 million. Besides the vigorous organic growth (equivalent to around one-half of the advance), it was the two US companies which were acquired in the spring of 2007 that impacted with a combined €53.2 million.
Vossloh Fastening Systems also reported a sales leap of 30 percent to €198.4 million, a large share of which was inputted by the Chinese factory which came on stream in summer 2007 and for the period contributed sales as high as €38.8 million.
With sales of €217.2 million, the Infrastructure Services business unit was just shy of the prior-year €219.1 million, an anticipated decline due to the phaseout of major (sub)urban transportation projects in France a year ago.
In all, Rail Infrastructure delivered an EBIT of €110.1 million (up by 36 percent from €81.2 million). Decisive in the steeper EBIT rise was the clear growth reported in the two higher-margin business units of Switch Systems and Fastening Systems and once again, the even busier production facilities. Due to the acquisition-related increase in working capital and fixed assets, ROCE did not improve, albeit at 18.2 percent (down from 19.7) it was well above the corporate benchmark of 15 percent.
Motive Power&Components
The Motive Power&Components division boosted its sales by 17 percent to €468.9 million, with both business units inputting double-digit growth rates: Locomotives raised sales by 15 percent to €340.5 million, chiefly due to vigorous business in (sub)urban trains at Vossloh España. The Kiel location also managed to edge up sales.
The Electrical Systems business unit generated sales of €128.4 million (up 23 percent). The growth was derived from international contracts for equipping trolleybuses and from the shipment of electrical systems destined for light rail vehicles (LRV).
The division's EBIT surge outpaced sales, accelerating 30 percent to €30.6 million. At 15.4 percent, ROCE rose 4.5 percentage points, thus exceeding the corporate benchmark of 15 percent. Both business units, in fact, topped Vossloh’s benchmarks. Besides the much improved EBIT, one contributory factor was the downscaled working capital at Vossloh Locomotives.
Outlook
At its annual accounts presentation Vossloh reaffirmed the forecasts for 2008 and 2009 published on December 7, 2007: for 2008, sales in the region of €1,340 million, an EBIT of about €142 million, and group earnings of around €91 million. As to 2009, Vossloh is looking to ongoing growth with sustainable high profitability.
| Vossloh Group | 2007 | 2006 | Change | Q4/07 | Q4/06 | Change | |
|---|---|---|---|---|---|---|---|
| Sales | € mill. | 1,232.1 | 1,015.2 | +21.4% | 346.7 | 325.6 | +6.5% |
| EBIT | € mill. | 121.5 | 82.7 | +46.9% | 38.8 | 32.6 | +19.0% |
| EBIT margin | % | 9.9 | 8.1 | — | 11.2 | 10.0 | — |
| Group earnings | € mill. | 71.4 | 20.3 | +251.7% | 25.5 | 0.7 | n/a |
Contact:
Uwe Jülichs
Head of Corporate Communication
Vossloh AG
Phone: +49 (0) 2392 52-608
Mobile: +49 (0) 172 2909852
Email: uwe.juelichs@ag.vossloh.com
Today's Vossloh is a global player in the rail technology markets. The Group focuses on its core businesses of rail infrastructure, rail vehicles, and trolleybuses. Reflecting this focus, Vossloh's two divisions of Rail Infrastructure and Motive Power&Components operate under the roof of MDAX-listed Vossloh AG. In fiscal 2007, a good 5,900 employees generated sales of €1.2+ billion and an EBIT of €121.5 million.