Vossloh’s first-quarter profits up year-on-year
- Sales rising 2.2% despite weather-prompted project delays
- EBIT 16.2% above 2009 level
- Forecasts for 2010 and 2011 reaffirmed
For the Vossloh Group the new fiscal year has started with slightly higher sales and a clearly improved EBIT. Q1/2010 sales climbed 2.2% to €295.4 million (excluding the new Rail Services business unit, first consolidated during the period, 2.5% down) while group EBIT improved by 16.2% to €35.4 million.
Whereas the Fastening Systems and Electrical Systems business units reported double-digit revenue growth rates, poor weather brought about delays in switch and rail services business. The harsh winter took its toll on sales in particular during January and February; business then recovered in March. As expected, diesel locomotive revenue was short of the Q1/2009 amount.
“Despite the severe winter, Q1/2010 has been a good period for Vossloh. We are particularly pleased that investments in cargo haulage are picking up again. There seems to be an end in sight to the weak demand for diesel locomotives,” states Werner Andree, CEO of Vossloh AG. “Our prospects are good. We are sticking to our forecasts for 2010 and 2011.”
The Q1/2010 EBIT margin at the Vossloh Group rose to 12.0%, up from 10.6% a year ago. Especially due to the first-time consolidation of Vossloh Rail Services, ROCE fell from 19.5% to 16.4%. Nonetheless, this profitability indicator remained above the corporate benchmark of 15%. Group earnings improved by 12.5% to €22.8 million, earnings per share (EpS) were upgraded by 14.8% to €1.71.
Rail Infrastructure
Q1/2010 sales at the Rail Infrastructure division totaled €177.6 million, an advance of 16.8%. Excluding the Rail Services business unit, newly consolidated in Q1, the organic increase was 7.8%. The division’s EBIT showed a clear improvement of 23% to €31.0 million.
Vossloh Fastening Systems, especially, reported a very strong first quarter, its sales jumping 26.8% to €71.0 million. The determining factor was the megacontract for the shipment of rail fasteners destined for the Chinese high-speed Beijing–Shanghai line and robust sales in various markets of Western Europe and the Near & Middle East.
Sales at the Switch Systems business unit were marginally down. The poor weather delayed call-off orders and hence sales inched down 3.5% to €93.1 million. The previous year, still slack demand in North America for switches and trading products had weighed on this unit’s business; in Q1/2010, demand in the region returned to normal.
Likewise affected by the cold weather was the new Rail Services business unit which reported Q1 sales of €13.7 million.
Transportation
Sales at the Transportation division (formerly Motive Power&Components) were, as expected, below the year-earlier level, shrinking 13.8% to €117.7 million. At €9.0 million, Q1 EBIT declined by 4.3%.
The Transportation Systems (formerly Locomotives) business unit generated Q1 sales of €76.6 million, a decrease of 24.2%. Revenue at the Valencia location slipped 10.5% to €63.7 million; at the Kiel location, the fallout of previous weak demand for diesel locomotives depressed revenue by 56.9% to €12.9 million.
Business at Vossloh Electrical Systems during the period proved strong. Q1 sales at €41.1 million were 15.4% up year-on-year.
Headcount rising
At March 31, 2010, the Vossloh Group employed worldwide a workforce of 4,958 (year-on-year up 5.7%). The addition was due to the first-time consolidation of Vossloh Rail Services which employed 305 persons at the end of the period. Inside Germany, the Vossloh Group had a workforce of 1,623 as of March 31, 2010.
Prospects
Vossloh is sticking to its forecasts for 2010 and 2011 as announced on March 25. The predictions are also endorsed by the likely resurging order intake at Kiel in Q2/2010
For all of 2010 Vossloh therefore expects sales to rise by 11% to 15% to over €1.3 billion. According to present forecasts, EBIT should climb 5% to 7% to €145+ million. ROCE will slip to around 17%, mainly due to the first-time consolidation of Vossloh Rail Services. The EBIT margin will, from today’s viewpoint, range between 11% and 11.5% for 2010. EpS is set to reach €6.50 to €7.00.
For 2011, a sales growth of at least 2.5% and an EBIT of around €150 million are still expected.
Key indicators at a glance
| Vossloh Group | Q1/2009 | Q1/2010 | Δ % | |
|---|---|---|---|---|
| Sales | € mill. | 288.9 | 295.4 | +2.2 |
| EBIT | € mill. | 30.5 | 35.4 | +16.2 |
| EBIT margin | % | 10.6 | 12.0 | – |
| ROCE | % | 19.5 | 16.4 | – |
| Value added | € mill. | 13.3 | 11.6 | –12.8 |
| Group earnings | € mill. | 20.3 | 22.8 | +12.5 |
| EpS | € | 1.49 | 1.71 | +14.8 |
Werdohl, April 28, 2010
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 electric buses. Reflecting this focus, Vossloh’s two divisions of Rail Infrastructure and Transportation (previously “Motive Power&Components”) operate under the roof of MDAX-listed Vossloh AG. In fiscal 2009, a good 4,700 employees generated sales of over €1.17 billion and an EBIT of €137.9 million.