Vossloh: strong growth in H1/2010
- Sales rising 14%
- EBIT climbing 18.6%
- Forecast revised upward
The Vossloh Group did very well in H1/2010. Sales climbed 14.0% to €683.1 million. After a sluggish Q1, revenue in Q2 showed a particularly steep rise, by 25.0% to €387.7 million. Excluding the Rail Services business unit, consolidated since January 1, group sales mounted 7.0% in the first 6 months and by 15.9% in Q2 alone. EBIT in H1 jumped 18.6% to €80.4 million.
“The first six months were a successful period for us,” says Werner Andree, Vossloh AG’s CEO. “It is, moreover, pleasing that the order situation in locomotive business has improved.”
The Vossloh Group’s H1 EBIT margin climbed from 11.3% to 11.8%. At 18.3%, ROCE was down from the year-earlier 20.8% yet well over the self-set benchmark of 15%. Group earnings and earnings per share (EpS) gained double-digit percentages: the former advanced 13.1% to €50.7 million, EpS from €3.34 to €3.81.
Appreciable growth for Rail Infrastructure
The Rail Infrastructure division boosted its H1 sales by 35.8% to €438.6 million. In the second quarter, the gain was even more outstanding, by 52.7% to €261.0 million. Most of the growth was due to organic expansion: excluding the new Rail Services business unit, the division’s sales climbed year-on-year by 22.7% in H1 and by 36.1% in Q2. EBIT for the period improved by 32.0% to €74.7 million. The division’s EBIT margin and ROCE came to 17% and 21.7%, respectively.
Revenue at the Fastening Systems business unit surged in H1 by 39.2% to €177.3 million, mainly thanks to the megacontract for the supply of rail fasteners destined for the Chinese high-speed Beijing–Shanghai line and sales growth in Kazakhstan, Turkey, and Austria.
The Switch Systems business unit’s sales grew 11.8% to €219.6 million. Whereas the decline in North American freight haulage had squeezed revenue in fiscal 2009, business in this part of the world recovered in H1/2010. Also sharing in the solid development at Vossloh Switch Systems were additional sales in various European markets and in Australia.
Newly consolidated at January 1, the Rail Services business unit reported H1 sales of €42.1 million.
Transportation down, as expected
H1 sales of the Transportation division (formerly Motive Power&Components) shrank year-on-year by 11.4% to €244.4 million and in Q2 alone, by 8.9% to €126.7 million. The division’s H1 EBIT contracted by 28.3% to €14.6 million, its EBIT margin narrowing from 7.4% to 6%. Its 6-month ROCE of 16.1%, though down from 29.5% a year ago, well outmeasured the internal benchmark of 15%.
Sales at the Transportation Systems business unit (formerly Locomotives) for the first six months of 2010 added up to €163.2 million. The (expected) reduction of 19.4% is due to the lack of new locomotive orders during the previous year. Accordingly, sales at Vossloh Locomotives in Kiel dropped 48.2% to €33.8 million, at Valencia by 6.2% to €129.3 million, despite growing sales generated by local-transport vehicles.
During the period, the Electrical Systems business unit contributed sales of €82.3 million, up 12.3% from H1/2009.
Capital expenditure program results in higher outlays
Capital expenditures by the Vossloh Group during the period rose to €26.4 million, almost twice as much as in H1/2009. The reason for this is the program aimed at strengthening market position and fueling extra growth for which Vossloh has allocated in 2010 and 2011 around €60 million annually. The development of new locomotive models alone accounted for €9.1 million in H1. Vossloh will exhibit the first of the new developments under the capex program as well as part of the existing product portfolio at the industry fair InnoTrans in Berlin in September.
Rising headcount
At June 30, 2010, the Vossloh Group employed worldwide a workforce of 4,907, up 4.2% compared with a year ago. The increase is due to the first-time consolidation of Vossloh Rail Services which at midyear had a workforce of 322. As of June 30, 2010, the Vossloh Group employed 1,674 people in Germany.
Prospects improved
In view of the solid progress made in the first six months Vossloh has slightly raised its forecast for all of 2010. From today’s vantage point it expects sales of a good €1.35 billion (previously, 11% to 15% rise to €1.3+ billion), EBIT of at least €150 million, even after taking into account higher commodity prices (previously, an increase of 5% to 7% to over €145 million). Unchanged, the EBIT margin should reach 11% to 11.5%. ROCE is still expected to slip from the 2009 level to around 17%, mainly due to the acquisition of Vossloh Rail Services. Earnings per share are now set at around €7.00 (previously, €6.50 to €7.00). For 2011 and calculated from the higher baseline, Vossloh still forecasts a sales growth of over 2.5% and an ongoing high EBIT margin of between 11% and 11.5%.
Key indicators at a glance
| Vossloh Group | H1/2009 | H1/2010 | Δ % | Q2/2009 | Q2/2010 | Δ % | |
|---|---|---|---|---|---|---|---|
| Sales | € mill. | 599.0 | 683.1 | +14.0 | 310.1 | 387.7 | +25.0 |
| EBIT | € mill. | 67.8 | 80.4 | +18.6 | 37.3 | 44.9 | +20.4 |
| EBIT margin | % | 11.3 | 11.8 | – | 12.0 | 11.6 | – |
| ROCE | % | 20.8 | 18.3 | – | 22.1 | 20.2 | – |
| Value added | € mill. | 32.0 | 32.2 | +0.6 | 18.7 | 20.6 | +9.6 |
| Group earnings | € mill. | 44.9 | 50.7 | +13.1 | 24.6 | 27.9 | +13.6 |
| EpS | € | 3.34 | 3.81 | +14.1 | 1.83 | 2.10 | +14.8 |
Werdohl, July 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.