Vossloh makes good progress: Sales and EBIT well above previous year
The first quarter’s improved development over the previous year continues in the second quarter of 2017. Net sales rose by 16.7 % to €492.2 million after six months. In the previous year, net sales were €421.6 million. The initial consolidation of Vossloh Tie Technologies in the USA contributed sales revenues of €43.0 million in the first half of 2017. The Fastening Systems business unit also achieved considerably higher sales in the current reporting period than in the first half of 2016. The Vossloh Group’s EBIT rose significantly by 37.1 % to €26.6 million in the first half of 2017 (previous year: €19.4 million). The EBIT margin consequently improved from 4.6 % in the first half of 2016 to 5.4 % in the first half of 2017. The improved EBIT and margins are attributable to the good business performance of the Core Components division in particular. The orders received by the Vossloh Group remained almost unchanged year over year at €465.0 million (previous year: €472.6 million) and the order backlog as of June 30, 2017, was €737.3 million (previous year: €633.7 million).
In the Core Components division, which has included the activities from the Tie Technologies business unit since the beginning of 2017 in addition to the Fastening Systems business unit, sales in the amount of €174.8 million were achieved in the first six months of the current year (previous year, without Tie Technologies: €106.1 million). Vossloh Tie Technologies contributed sales amounting to €43.0 million in the first half of 2017. Vossloh Fastening Systems was able to improve sales revenues by 25.3 % year over year to €133.0 million (previous year: €106.1 million). This growth in the first half of 2017 primarily stems from high demand for rail fastening systems for the new Peking–Shenyang line in China. For the second half of 2017, Vossloh is assuming that the Fastening Systems business unit will tend to have slightly weaker sales. The EBIT for the Core Components division improved substantially in the first six months of 2017 to €26.7 million (previous year: €12.8 million). The EBIT margin for Core Components rose to 15.3 % (previous year: 12.0 %). Orders received in the first six months of 2017 amounted to €148.3 million (previous year: €115.8 million). This increase is attributable to the initial consolidation of the Tie Technologies business unit.
Sales in the Customized Modules division fell slightly from €246.7 million in 2016 to €237.9 million in the first half of 2017. This was primarily caused by high-speed projects in France coming to a close, but also by lower revenue contributions in Sweden. However, revenue increases were achieved in Africa, particularly in Morocco, and in the Netherlands. The EBIT for the Customized Modules division was at €14.7 million in the first six months of 2017, which is also a slight decrease from the €15.7 million recorded in the same period in the previous year. The EBIT margin has scarcely changed. It was 6.2 % compared to 6.4 % in the previous year. In the second quarter of 2017, there was an increase in orders received. At €139.2 million, the orders received in the second quarter of 2017 were significantly higher than the previous year’s figure of €115.9 million. Hence the orders received in the first half of 2017 were at €248.2 million (previous year: €269.8 million). The order backlog in the Customized Modules division totaled €289.8 million as of June 30, 2017, compared with a total of €321.3 million on the same date from the previous year.
The Lifecycle Solutions division showed a sales increase of 7.9 % compared to the previous year. The sales amounted to €42.8 million in the first six months of 2017 after totaling €39.7 million in the previous year. The division achieved higher sales in Denmark and China. However, the EBIT at €1.8 million fell below the value of the previous year (€3.2 million) due to a demand-related lower profit contribution from stationary welding segment. The orders received in the first six months of 2017 were €44.7 million and therefore down on the previous year’s value (€51.8 million), particularly because of a drop in new orders in Germany. The order backlog rose from €19.9 million as of June 30, 2016, to €31.2 million as of June 30, 2017.
The Transportation division is not part of Vossloh’s core business and now only includes the activities of Vossloh Locomotives after disposals in recent years. The division’s sales rose to €40.2 million in the first half of 2017 (previous year: €34.9 million). The year-over-year increase in sales revenue primarily came from the type DE 18 locomotives. The EBIT amounted to €(9.4) million in the current reporting period after €(6.3) million in the first six months of 2016. The causes included less service business. However, it is expected that the sales and earnings performance of the Transportation division will be similar to the previous year, in which a large number of locomotive deliveries were made in the fourth quarter. For this reason, it is expected that the majority of the sales and earnings for the 2017 fiscal year will once again be recorded in the fourth quarter. The Transportation division showed orders received in the amount of €28.1 million in the first half of 2017 (previous year: €42.3 million). In view of the larger orders received in previous periods, the order backlog amounted to €226.7 million as of the 2017 reporting date (previous year: €106.5 million).
On June 30, 2017, the number of employees in the Vossloh Group totaled 4,311. The number of employees has risen by 5.7 %, or 232 people, from 4,079 on June 30, 2016. Compared to the end of 2016 when there were 4,051 employees, the increase amounts to 260. The increase was mainly due to the initial consolidation of the Tie Technologies business unit into the Core Components division.
Vossloh’s sales target for all of 2017 is still between €1.0 billion and €1.1 billion. The sales growth will primarily be driven by the inclusion of Vossloh Tie Technologies and increasing sales revenues in the Transportation division. Given the current situation and portfolio structure, the Executive Board estimates that the company will reach an EBIT margin between 5.5 % and 6.0 %.
An Overview of Key Figures for the Vossloh Group
|Vossloh Group||Jan-June 2017||Jan-June 2016|
|Orders received*||€ million||465.0||472.6|
|Order backlog*||€ million||737.3||633.7|
|Sales revenues*||€ million||492.2||421.6|
|Value added*||€ million||(5.3)||(12.7)|
|Net income||€ million||13.4||14.6|
|Earnings per share||€||0.56||0.92|
* Prior year's figures were adjusted due to the disposal of the Electrical Systems business unit.
Werdohl, July 26, 2017
Contact information for media:
Dr. Thomas Triska
Phone: (+49-23 92) 52-608
Contact information for investors:
Dr. Daniel Gavranovic
Phone: (+49-23 92) 52-609
Vossloh is a global player in rail technology markets. Our core business is rail infrastructure. In addition, the Group is also active in the locomotive business. The activities of the Group are divided into the four divisions Core Components, Customized Modules, Lifecycle Solutions and Transportation. In financial year 2016, Vossloh generated sales of about €930 million with more than 4,000 employees.