Vossloh again reporting slight growth in H1/2009
- Sales up 1.4 percent in H1/2009 and up 2.5 percent in Q2/2009
- Order backlog and intake once more expanding
- Value added stable, ROCE and EBIT margin well over benchmarks
- Forecast for 2009 adjusted: sales now less than expected and rebudgeted at prior-year level; all other forecasts including EBIT reaffirmed
For the Vossloh Group, the second quarter of 2009, as indeed all of the first six months, was a period of slight growth compared with 2008. Q2/2009 sales reached €310.1 million (up €7.6 million or 2.5 percent). In the period January through June of this year, the Vossloh Group generated sales of €599.0 million, up €8.0 million or 1.4 percent from the year-earlier €591.0 million.
Orders on hand again advanced, to €1,232.7 million at June 30, 2009, an increase of €19.6 million or 1.6 percent from a year ago. H1 order intake climbed €25.7 million or 3.8 percent to €705.5 million.
H1 EBIT came to €67.8 million, hence up €1.6 million or 2.4 percent. The EBIT margin crept up from 11.2 to 11.3 percent. At €44.9 million, group earnings were €1.3 million or 2.8 percent short of the €46.2 million reported for H1/2008 (the year-earlier earnings had included €4.6 million of profit of divestee Vossloh Infrastructure Services). However, since the number of shares outstanding dipped, earnings per share (EpS) nonetheless rose from €3.13 to €3.34.
“Despite a very strong H1/2008 performance, we managed to slightly expand business in the first six months of 2009. The fact that growth generally did not meet our expectations was due to spending reluctance on the part of privately financed customers and more unfavorable currency translation effects from sales in US dollars and related currencies. This has prompted us to ratchet down our sales expectations for all of 2009 albeit the EBIT forecast remains unchanged. The Vossloh Group still has a very strong future. Orders on hand and order intake again grew; our net financial debt is low and we are presently working on a series of promising products,” says Vossloh CEO Werner Andree.
ROCE and value added
At 20.8 percent, ROCE in H1/2009 was not quite at the year-earlier level of 21.4 percent but well above the 15-percent benchmark. Value added was virtually unchanged at €32.0 million (H1/2008: €32.1 million).
Rail Infrastructure division
Since the divestment of Vossloh Infrastructure Services in 2008, the Rail Infrastructure division has comprised the Fastening Systems and Switch Systems business units. The contributions by the Infrastructure Services business unit are no longer included in the H1/2008 data. In the first half of 2009, the Rail Infrastructure division generated sales of €323.0 million, a marginal €0.5 million or 0.2 percent short of the highly successful H1/2008. Q2/2009 sales by this division totaled €170.9 million (down from €176.0 million). The Fastening Systems business unit reported a sharp surge which made up for declining business at Vossloh Switch Systems.
Vossloh Fastening Systems repeated its strong Q1 sales performance in the second quarter, with H1 sales rising to €127.4 million (up €41.6 million or 48.5 percent from the year-earlier €85.8 million). During the period, this business unit was awarded a megacontract by the Chinese Ministry of Railways for high-speed rail fastening systems.
At €196.4 million, H1 sales at Vossloh Switch Systems were short of the high year-earlier €238.3 million (down by €41.9 million or 17.6 percent). The very high amount the year before had reflected the shipment of high-speed switch systems to Southern Europe and a metro train megacontract. This year’s downtrend mirrored shortfalls in North American and Australian switch business.
Motive Power&Components division
For H1/2009, the Motive Power&Components division reported slightly rising sales, from €267.3 million to €275.8 million (up €8.5 million or 3.2 percent), most of the growth being contributed by Vossloh Electrical Systems.
The Locomotives division contributed H1 sales of €202.4 million, up year-on-year by €0.8 million or 0.4 percent. Whereas business at Vossloh España boomed, the Kiel location showed a decline. Vossloh España including its maintenance business (Erion Mantenimiento Ferroviario S.A., Madrid) reported H1 sales of €138.0 million (up from €114.5 million). Six-month sales at the Kiel location slumped from €87.5 million to €65.2 million. In order to allow for the ongoing spending reluctance on the part of private-sector customers—due to the prevailing economic risks—this location will work short time as from August 1, 2009.
H1 sales at the Electrical Systems business unit climbed €7.6 million or 11.6 percent from €65.7 million to €73.3 million. Particularly sharp gains were reported for the second quarter of 2009, with sales up 31.8 percent to €37.7 million.
Employees
At the end of June 2009, the Vossloh Group employed a workforce of 4,716, which is 0.7 percent or 32 more than at December 31, 2008. Year-on-year, the headcount rose by 86 or 1.9 percent. Added staff was hired by both divisions. On average, 27.6 percent of the employees worked in Germany, up by 1 percentage point from a year ago.
Prospects
The below-budget decline in demand on the part of privately financed customers as well as adverse currency translation effects have prompted Vossloh management to downwardly revise its original sales forecast of €1,291 million to €1.2 billion (the level of 2008). Nonetheless and encouraged by earnings so far thanks to more favorable prices for input materials, Vossloh is sticking to its EBIT forecast of €138 million. Likewise unchanged are the predictions for group earnings of €86 million and ROCE of 22 percent.
For the next fiscal year 2010, the Group is still looking to further growth in sales and earnings based on its bulging order books and the megacontract for the delivery of rail fastening systems to be installed in China’s high-speed lines. Expectations for 2010 are again based on the assumptions that commodity prices as well as euro/dollar and related parities are not to Vossloh’s disadvantage and that in the latter half of 2009, demand in the North American market will resurge.
Key indicators at a glance
| Vossloh Group | H1/2009 | H1/2008 | Δ % | Q2/2009 | Q2/2008 | Δ % | |
|---|---|---|---|---|---|---|---|
| Sales | € mill. | 599.0 | 591.0 | +1.4 | 310.1 | 302.5 | +2.5 |
| EBIT | € mill. | 67.8 | 66.2 | +2.4 | 37.3 | 35.9 | +3.9 |
| ROCE | € mill. | 20.8 | 21.4 | – | 22.1 | 20.8 | – |
| Value added | % | 32.0 | 32.1 | –0.3 | 18.7 | 18.1 | –3.3 |
| Group earnings* | € mill. | 44.9 | 46.2 | –2.8 | 24.6 | 26.9 | –8.6 |
* 2008 data including profits of Vossloh Infrastructure Services at €4.6 million (H1) and €3.2 million (Q2)
Werdohl, July 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.