Vossloh expects further growth in 2009/2010 and announces much higher capital expenditures
- For 2009 and 2010, further market-outpacing growth
- ROCE and EBIT margin firmly above benchmarks
- Capital expenditure drive for added growth
- Dividend proposal for fiscal 2008: €2.00 per share plus €1.00 superdividend
For the next two years, Vossloh AG is counting on further growth: in 2009, group sales in the region of €1,291 million (forecast for 2008: €1,165 million) and an EBIT of €138 million (forecast for 2008: €135 million). A heavier tax burden will depress expected group earnings for 2009 to €86 million, slightly short of the €89 million forecasted for 2008 and adjusted for the €42 million book gain from the disposal of Vossloh Infrastructure Services (VIS). According to current budget, the Group’s key performance benchmark, ROCE, will amount to 18.1 percent in 2009 and hence above the 15-percent target and the 17.5 percent expected for 2008. Likewise exceeding the benchmark from today’s vantage point will be the EBIT margin for 2009 at 10.7 percent and therefore above the self-set threshold of 10 percent. Rising price pressure and a remixed product range will mean, however, that the EBIT margin is not likely to reach the 11.6 percent set for 2008. For 2009, Vossloh is expecting earnings per share (EpS) of €6.37. The rise over what is predicted for 2008 (€5.97 excluding the €2.88 from the sale of VIS) is a consequence of the present treasury stock re-purchase campaign.
Another growth in sales and earnings planned for 2010
For 2010, Vossloh is planning another growth in sales and EBIT. From today’s vantage point, sales are expected to climb versus 2009 by 6 percent to €1,370 million, EBIT by 9 percent to €151 million. ROCE is predicted to improve slightly over 2009.
Forecast for 2008 reaffirmed
In presenting its new budgets, Vossloh also fully reaffirmed its prediction for 2008. Accordingly, sales this year will add up to around €1,165 million, EBIT to about €135 million, and group earnings to some €131 million, including a €42 million one-off gain from the disposal of VIS. In the course of this year, Vossloh had initially adjusted its sales and earnings forecasts for the VIS contributions and then upwardly revised these figures to take account of the solid business performance.
Growth plans across all business units
According to present plans, both divisions—Rail Infrastructure and Motive Power&Components—will increase their sales over the next two years.
Rail Infrastructure's Fastening Systems unit will benefit from further expansion in China, Russia, and the USA plus replacement needs in Europe. The Switch Systems unit will find its business fueled by ongoing robust demand throughout all markets and especially in Scandinavia, Southern Europe, the USA, and North Africa.
At Motive Power&Components, product differentiation is paying off for the Locomotives business unit while Electrical Systems is benefiting from orders throughout Europe. The key performance benchmarks, ROCE and EBIT margin, are evening out at a high level.
Higher spending on the agenda
Says Vossloh AG’s CEO Werner Andree: “We will seize exceptionally promising and in some cases, new market opportunities that open up for us in Asia, North Africa, Russia and the USA. In Europe, too, we identify ongoing growth potential. To strengthen our market position and fuel our growth, we will launch an expenditure drive to include both modernization and expansion at a number of locations and the development of new products—locomotives, for instance.”
Dividend proposal for fiscal 2008
For fiscal 2008, Vossloh AG’s Executive and Supervisory Boards—subject to the approval of the annual accounts for fiscal 2008—will propose to the AGM a dividend increase from €1.70 to €2.00 per share of eligible stock. Additionally, a one-off superdividend of €1.00 will be proposed for distribution, thus allowing stockholders to share in the gain from the sale of the Infrastructure Services business unit.
Key operating indicators*
| Vossloh Group | Budget 2008 (confirmed) | Budget 2009 | Plan 2010 | |
|---|---|---|---|---|
| Sales | € mill. | 1,165 | 1,291 | 1,370 |
| EBIT | € mill. | 135 | 138 | 151 |
| EBIT margin | % | 11.6 | 10.7 | 11.0 |
| ROCE | % | 17.5 | 18.1 | 18.8 |
| Group earnings | € mill. | 89+42 | 86 | 96 |
| EpS | € | 5.97+2.88 | 6.37 | 7.11 |
1 Excluding Vossloh Infrastructure Services
Werdohl, December 4, 2008
Media contact:
Uwe Jülichs
Head of Corporate Communications
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.