Vossloh off to a strong start in Q1/2009
Despite a strong Q1/2008 with sales of €288.4 million, the Vossloh Group’s sales of €288.9 million in the first quarter of 2009 were nonetheless up by €0.5 million or 0.2 percent. EBIT was raised slightly by 0.7 percent, from €30.3 million to €30.5 million. The EBIT margin inched up to 10.6 percent. Group earnings mounted by almost 5 percent from €19.4 million to €20.3 million. EpS for the period climbed year-on-year from €1.31 to €1.49.Vossloh Infrastructure Services was sold retroactively last year as of January 1, 2008, and derecognized when the deal was closed. The year-earlier figures have been restated accordingly.
It was once again the Rail Infrastructure division that contributed the larger share and raised its sales over the Q1/2008 level. The division’s Fastening Systems business unit reported vigorous gains whereas sales at Vossloh Switch Systems receded. Q1/2009 sales at the Motive Power&Components division’s two business units were slightly down from 2008. Whereas Rail Infrastructure’s Q1 EBIT and EBIT margin showed slight improvements in 2009, the corresponding figures for Motive Power&Components declined year-on-year.
“Despite the ailing global economy we performed satisfactorily in Q1/2009 and remain optimistic. Vossloh is solidly positioned. Order backlog at the end of Q1/2009 totaled around €1.2 billion. We are confident of added demand for rail infrastructure and our innovative rail vehicles," says Werner Andree, CEO of Vossloh AG.
ROCE and value added (VA)
Q1 ROCE amounted to 19.5 percent (down from 20.5 like-for-like). For the first time this year Vossloh is reporting its value added (VA). Vossloh has hence again improved on depth and structure of its external reports. True to its strategy of value-focused growth, Vossloh primarily works toward earning a premium on top of the return (cost of capital) claimed by investors and lenders. This premium equals the difference between ROCE (return on capital employed) and WACC (weighted average cost of equity and debt) as a relative indicator and, when multiplied by average capital employed (CE), the value added (VA) in a period is an absolute indicator. VA for the period amounted to €13.3 million, thus somewhat short of the year-earlier €14.0 million.
Rail Infrastructure
Q1 sales by the Rail Infrastructure division amounted to €152.1 million, slightly up by €4.7 million or 3.2 percent over the division’s highly successful Q1/2008. Vossloh Fastening Systems reported surging sales of €56.0 million, up 76.1 percent or €24.2 million versus the year-earlier €31.8 million. Contributing to this improvement were robust domestic business, the ongoing shipment of rail fasteners for the high-speed lines in China and a steep sales uptrend in Spain. Q1 sales at Vossloh Switch Systems were short of the exceptionally high Q1/2008 volume, falling by 20.4 million or 17.5 percent from €116.9 million to €96.5 million in 2009. In the year-earlier quarter, the business unit had largely benefited from shipments of high-speed switch systems to Southern Europe as well as a metro-related megacontract. Rail Infrastructure’s EBIT for the period rose 4.6 percent, from €24.1 million to €25.2 million, its EBIT margin inching up from 16.4 to 16.6 percent.
Motive Power&Components
The Motive Power&Components division reported Q1/2009 sales of €136.6 million, a slight year-on-year drop of €4.4 million or 3.1 percent. Both business units—Locomotives and Electrical Systems—were equally affected. Vossloh Locomotives contributed €101.0 million to Q1/2009 sales, hence €2.9 million or 2.8 percent short of the year-earlier €103.9 million. Order intake at Locomotives rose sharply, especially due to a contract from Valencia for the supply of 22 metro trains. Q1 order intake soared from €72.4 million a year ago to €172.2 million. Order backlog as of March 31, 2009, at the Locomotives business unit leapt from the year-earlier €511.1 million to €602.5 million. Q1/2009 sales at the Electrical Systems business unit amounted to €35.6 million, a moderate €1.5 million or 4.0-percent decrease versus the year-earlier €37.1 million. Year-on-year, the division’s Q1 EBIT dropped by 12.1 percent from €10.7 million to €9.4 million. Also down was the EBIT margin, slimming from 7.6 to 6.9 percent.
Workforce
At March 31, 2009, the Vossloh Group employed a workforce of 4,689, which is 2.3 percent or 104 more than a year ago. Both divisions as well as Vossloh AG hired additional staff. Vossloh’s Q1 average headcount rose in 2009 by 106 to 4,684 (year-on-year).
Stock repurchase program
The stock repurchase program launched by Vossloh AG on October 16, 2008, closed on March 20, 2009, after the maximum permissible number of treasury shares had been purchased. Vossloh AG now holds 1,479,582 treasury shares or 10 percent of the capital stock. To this end, a total of €106.4 million was spent. The share price paid averaged €71.86. Among the purposes for which the shares can be deployed is the funding of acquisitions. Others are defined in the authorization resolution of the AGM of May 21, 2008. So far, no definite decision has been made on the use of the treasury stock.
Prospects
The assessments regarding the development of the Vossloh Group’s operations in 2009, submitted on December 4, 2008, and reaffirmed on presentation of the 2008 annual accounts on March 26, 2009, are endorsed by the Group from today’s vantage point. The forecast is underpinned by the very tall order backlog, partly extending into 2010, and is based on the assumption that in the latter half of the year demand will pick up in North America and that follow-up contracts will be placed in China in the second quarter of 2009. Accordingly, Vossloh is looking for 2009 to sales of around €1,291 million and an EBIT of €138 million. The heavier tax burden will mean a slight decline in expected group earnings to €86 million versus the 2008 figure (adjusted for the €46.8 million profit from the disposal of discontinued operations). ROCE is forecast at 22 percent, the EBIT margin at a good 10 percent, and EpS is predicted at €6.37 for 2009.
| Vossloh Group | Q1/2009 | Q1/2008* | Change (%) | |
|---|---|---|---|---|
| Sales | € mill. | 288.9 | 288.4 | +0.2 |
| EBIT | € mill. | 30.5 | 30.3 | +0.7 |
| Group earnings | € mill. | 20.3 | 19.4 | +4.6 |
| ROCE | % | 19.5 | 20.5 | – |
| Value added (VA) | € mill. | 13.3 | 14.0 | –5.0 |
* excluding Vossloh Infrastructure Services
Werdohl, April 29, 2009
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. In fiscal 2008, almost 4,700 employees generated sales of over €1.2 billion and an EBIT of €137.7 million.