Vossloh: marked improvement in operating business
Forecasts raised during the year slightly exceeded / Bright prospects for 2004The Vossloh Group is again looking back on a very successful fiscal year ending on December 31, 2003. According to projections, sales should reach €892.1 million, thus slightly exceeding the €890 million forecast stepped up back in Q2/2003. As year-earlier sales amounted to €744.5 million, this is an advance of almost 20 percent.
In 2002, Vossloh had placed transport technology at the focus of all its activities through numerous transactions. Of this year's sales growth by €147.6 million, the newly acquired companies account for €36+ million, generating at €447.0 million almost half of total Group sales. The remaining gain of roughly €111 million in 2003 was achieved by Vossloh's established core businesses alone, which, following sales of €333.6 million in 2002, are set to grow by 33.4 percent to €445.1 million in fiscal 2003.
The 2003 operating result should jump by an overproportionate 65 percent from €49.7 million to €82.0 million. Approximately €10 million of this €32.3 increase million is attributable to added sales, the remaining some €22 million resulting from substantial productivity gains and an improved product mix.
Earnings before interest and taxes (EBIT) are likely to come to €97.7 million in fiscal 2003. Following an initial budgeted €94.5 million, the Group had then increased its target to €97.0 million. As a result, EBIT should rise by almost 25 percent over the preceding year's €78.4 million. In this context, it should be borne in mind that the year-earlier EBIT had included nonoperating income (substantially from the sale of the around 45-percent stake in the Austrian switch manufacturer VAE) of €26.2 million. This nonoperating income has shrunk to only €14.7 million in fiscal 2003.
Group earnings are set to exceed the high prior-year level of €52.4 million, reaching €53.7 million in fiscal 2003. The tax load ratio in 2002 came to a mere 12.3 percent whereas it is expected to return to 31.8 percent in 2003. In addition, the sale of the Lighting division in 2002 contributed a further €3.9 million to after-tax profit. The reduced minority interests in net income (particularly VAE’s), down from €7.3 million in 2002 to €1.4 million this year, has helped to improve Group earnings.
The Vossloh Group's earnings of €53.7 million, exceeding the prior-year figure by €1.3 million, have caused earnings per share to inch down from €3.85 to €3.70 due to the higher number of shares ranking for dividend.
Vossloh is expecting ROCE to rise from the year-earlier 13.3 to 15.6 percent. The equity ratio should climb substantially from 25.2 in 2002 to 32.5 percent in fiscal 2003. Thanks to the anticipated increase in equity from €238.6 million to €296.7 million coupled with net debt downscaled from €227.0 million to €215.8 million, net leverage as the net debt-to-equity ratio will improve markedly from 95.1 to 72.7 percent.
The pretax return on equity should rise from 26.7 to 27.2 percent.
For 2004, Vossloh predicts sales to climb by about 8 percent to a good €963 million, the operating result advancing by 27 percent following its anticipated 65-percent rise in 2003. EBIT is forecast to climb almost 9 percent to €106.3 million despite the fact that there will no longer be any VAE-related gains. The EBIT margin should again reach 11 percent in 2004. Vossloh expects its Group earnings to rise by 6 percent to €56.9 million in spite of the increase in the Group's tax load ratio to some 37.5 percent. Earnings per eligible share should edge up from €3.70 in fiscal 2003 to €3.90 in 2004.
Vossloh also believes that all the other key figures will make good progress throughout. As budgeted, e.g., ROCE will be ratcheted up from 15.6 to 15.9 percent and the equity ratio from 32.5 to 34.5 percent. Net debt is budgeted to shrink from €215.8 million to €214.3 million with net leverage recording a further significant reduction from 72.7 to 63.6 percent
For 2004, Vossloh is predicting an average headcount of 4,590, up from 4,408 in fiscal 2003, the increase being distributed among all divisions.
Vossloh AG Executive Board Chairman Burkhard Schuchmann made it clear to the assembled press in Frankfurt/Main that the ongoing and longstanding Vossloh growth story was making solid progress and future chapters were already being drafted. "We will also continue to focus on our repeatedly proclaimed goal of paving the way for the Vossloh Group's annual sales to reach €2 billion," he stressed. The steps toward this objective had been more than merely mooted, Schuchmann noted, adding: "I firmly believe that following this fiscal year now drawing to a close, which has seen the successful integration of the subsidiaries purchased during the previous year and the marked improvement in our operations, we will continue to strengthen and take the Group forward in the coming year through further acquisitions of one kind or another."
Werdohl / Frankfurt/Main, December 10, 2003
For more information please contact:
Christiane Konrad, Vossloh AG, Phone (+49-2392) 52249