Vossloh Information Technologies sold to Funkwerk AG
Focusing on profitable core businessThe Vossloh Group has sold its Information Technologies division (VIT) to Funkwerk AG which will take over the unit cash and debt free for a preliminary price of €8 million. The price is subject to adjustment depending on VIT’s net working capital trend and the transaction as such to approval from Vossloh AG’s Supervisory Board and from the Federal Cartel Office.
The disposal of VIT allows Vossloh to strengthen its core operations while creating brighter prospects for the division. Because of its limited development potential within the Vossloh Group, it had been earmarked for divestment by the Executive Board in September 2006 as part of the strategic refocus. “With the sale we have achieved our goal of finding a best owner for Information Technologies. An essential aspect of this transaction is that Information Technologies can now expertly continue ongoing projects in the interests of shared customers. Funkwerk is a very well-known company within the rail industry,” stated Dr. Gerhard Eschenröder, Vossloh CEO. “Additionally, the swift conclusion of this process permits us to fully center on the planned expansion of our profitable areas of business.”
For the first nine months of fiscal 2006, Vossloh Information Technologies had reported a pretax loss of €9.3 million. The disposal will result in a book loss of €15 million for the Vossloh Group. As a consequence, group earnings are predicted to amount to €20 million. The definitive 2006 business results will be announced by Vossloh at the annual accounts press conference on March 29, 2007. “We have taken another step forward in our restructuring program. Our operating performance and prospects have improved significantly in recent months and for 2006 we expect to adhere to a continuing dividend payment,” added Dr. Gerhard Eschenröder.
On December 7, 2006, Vossloh had reaffirmed its forecast of the 2006 key indicators: group sales of around €1 billion and an EBIT of €82.5 million. The book loss from the disposal of VIT does not impinge on this figure since Vossloh Information Technologies as a disposal group no longer impacts on the Group’s EBIT.
As to 2007, Vossloh is budgeting sales to rise 8 percent—exclusively from anticipated organic growth. EBIT is predicted in 2007 to soar by 30 percent to €107 million, easily outpacing sales. Vossloh will in future concentrate on rigorously expanding its core operations: rail infrastructure (e.g. rail fastening systems or switches) as well as rail vehicle components. Both these areas are set to show organic growth, especially outside of Europe, while also gaining strength through carefully planned acquisitions.
Werdohl, January 10, 2007
For more information (media):
Christiane Konrad
Vossloh AG
Phone: (+49-2392) 52-249
Email: christiane.konrad@ag.vossloh.com
For more information (investors and analysts)
Werner Andree
Vossloh AG
Phone: (+49-2392) 52-249
Email: werner.andree@ag.vossloh.com