Vossloh with double-digit 3-quarter growth rates in sales and EBIT; forecast for 2008 heightened
- Sales up 24 percent, EBIT accelerating by 41 percent
- Order intake surging 47 percent versus 3Q/2007
- ROCE and EBIT margin well above target
- Net financial assets extend latitude for new acquisitions; stock repurchase program underway
- Forecast for all of 2008 heightened
Three-quarter (3Q) sales by the Vossloh Group rose in 2008 by just under 24 percent to €903.1 million versus 2007, EBIT by 41 percent to €106.0 million. 3Q order intake surged 47 percent to €975.5 million, including 35 percentage points from organic growth alone.
Third-quarter (Q3) group sales at €312.2 million were almost 30 percent up in 2008 (adjusted for acquisitions, 26 percent). Q3 EBIT rose from €23.1 million a year ago to €39.8 million in 2008.
Nine-month ROCE, the Vossloh Group’s key performance indicator, amounted to 17.0 percent in 2008, easily above both the 12.3 percent for 2007 and the 15-percent corporate benchmark.
The 3Q EBIT margin climbed from the year-earlier 10.3 to 11.7 percent in 2008, thus also outshining the 10-percent target. The Group’s Q3 EBIT margin reached 12.7 percent, much above the 9.6 percent in 2007 and to the credit of both divisions.
Both the 2007 and 2008 figures have been adjusted according to IFRS for Vossloh Infrastructure Services (VIS), a business unit disposed of retroactively as of January 1, 2008, and derecognized when the deal was closed this September.
Nine-month group earnings vaulted around 151 percent from €45.9 million the year before to €115.3 million in 2008. This was mainly due to the €42.6 million book gain from the disposal of VIS. Three-quarter net income from continuing operations was also substantially boosted, soaring from €42.7 million in 2007 to €77.2 million in 2008.
Year-on-year, Q3 group earnings alone zoomed from €13.8 million to €69.0 million due to this capital gain.
Commented Werner Andree, Vossloh AG’s CEO: “Thanks to the outstanding operating performance and the gain from the disposal of VIS, Vossloh’s net financial debt has now turned around into a net financial asset. Especially in times of credit restrictions imposed by the banks, this is a solid advantage since we can afford major acquisitions without relying on the debt market.”
More and more business outside of Europe
During the period, Vossloh moved in very close to its self-set target of 30-percent non-European sales. Whereas a year ago the proportion was only 21.7 percent it is now 28.1 percent. About one-third of this advance was derived from the newcomers Vossloh Track Material, Inc. und Cleveland Track Material, Inc. in the USA plus Vossloh Cogifer Australia Pty. Ltd., and some two-thirds from organic growth, largely in China which since late May 2008 has increasingly placed rail fastener call orders for this country’s high-speed lines.
Rail Infrastructure
Excluding VIS, the Rail Infrastructure division’s 3Q sales added up to €514.3 million (up almost 36 percent). Acquisition-adjusted and like-for-like, 9-month sales mounted 22 percent, with both divisions sharing in the growth.
The division’s Fastening Systems business unit reported the biggest percentage rise of around 40 percent to €171.2 million—mainly from rail fasteners for China.
The Switch Systems unit showed a sales surge to €343.9 million (nigh 30 percent), mostly from the newcomers: the two US subsidiaries, consolidated as from Q2/2007 only, plus newly consolidated (as from January 1, 2008) acquirees Vossloh Cogifer Australia, Sportek Maskinfabrik and Kloos Oving. At nearly 12 percent, the business unit’s organic growth, too, was robust.
Rail Infrastructure’s Q3 sales alone grew at an even steeper rate, a good 43 percent from €131.1 million a year ago to €190.8 million in 2008.
The division’s 3Q EBIT jumped 28.5 percent or €19.1 million to €86.2 million in 2008; at 16.8 percent (down from €17.7 percent), the EBIT margin, though lower, was still commendable.
Motive Power&Components
At €388.5 million, 3Q sales by the Motive Power&Components division were likewise strong this year (up close to 11 percent from €350.6 million), both the Locomotives and Electrical Systems business units reporting solid growth.
Nine-month sales by the Locomotives business unit climbed almost 10 percent to €287.5 million, both locations (Valencia €159.3 million and Kiel €125.9 million) sharing in the rise.
Three-quarter sales by the Electrical Systems unit totaled €101.1 million (up 14 percent from 2007).
Q3 sales by Motive Power&Components were revved up 12.5 percent to €121.3 million (up from €107.8 million), both units likewise contributing.
9-month EBIT by the division added up to €32.4 million (up 37 percent from €23.6 million). The related EBIT margin jumped from 6.7 to 8.3 percent, again thanks to both business units.
At 18.7 percent, ROCE for 3Q/2008 was well above the year-earlier 15.5 percent.
Headcount
Excluding VIS, the Vossloh Group employed a workforce worldwide of 4,650 at September 30, 2008 (up around 9 percent from September 30, 2007, and 6 percent versus December 31, 2007).
Forecast
In the first nine months of 2008, the Vossloh Group has outperformed its own budget. Therefore we have stepped up our group forecasts for 2008: For the fiscal year as a whole, we expect sales in the region of €1.17 billion and an EBIT of around €135 million. ROCE, our key operations-controlling parameter, is predicted at around 18 percent. As to group earnings, we are now looking to about €131 million and earnings per share (EpS) of €8.85 (excluding any stock repurchase effects), a major factor being the book gain of €42.6 million from the sale of Vossloh Infrastructure Services. This is a nonrecurring effect confined to 2008. Its one-off impact on EpS is €2.88.
Given the worsening of the financial crisis and the related economic uncertainties, the present assumptions for the Vossloh Group might prove hard to sustain beyond H1/2009. Nonetheless, for 2009 we do perceive opportunities to achieve the targets planned to date, i.e., to further improve sales and EBIT by the Group. We still have abundant orders on hand.
The key figures at a glance
| Vossloh Group | 3Q/2008 | 3Q/2007 | Δ % | Q3/2008 | Q3/2007 | Δ % | |
|---|---|---|---|---|---|---|---|
| Sales1 | € mill. | 903.1 | 729.6 | 23.8 | 312.2 | 240.8 | +29.7 |
| EBIT1 | € mill. | 106.0 | 75.1 | 41.1 | 39.8 | 23.1 | +72.3 |
| ROCE1 | % | 17.0 | 12.3 | – | – | – | – |
| Group earnings | € mill. | 115.3 | 45.9 | 151.2 | 69.0 | 13.8 | +400 |
1 Excluding Vossloh Infrastructure Services
Werdohl, October 30, 2008
Contact:
Uwe Jülichs
Head of Corporate Communication
Vossloh AG
Phone: (+49-2392) 52-608
Mobile: (+49 172) 2909852
Email: uwe.juelichs@ag.vossloh.com
Investor contact:
Lucia Mathée
Head of Investor Relations
Vossloh AG
Phone: (+49-2392) 52-359
Email: investor.relations@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. Excluding the discontinued Vossloh Infrastructure Services operation, 4,066 employees generated sales of €1,014.9 million and an EBIT of €111.2 million in 2007.