Group sales in the period under review increased from the previous year, particularly due to the acquisitions made at the end of 2018, and amounted to €190.0 million (previous year: €178.3 million). EBIT of €(0.6) million was slightly below the previous year’s level (€1.6 million). Business development was accordingly subdued, as is typical for the season, and was within expectations. For seasonal reasons, working capital recorded an increase to €259.9 million (December 31, 2018: €216.0 million). Net financial debt (w/o impact from IFRS 16) was €370.7 million as of March 31, 2019, higher than as of December 31, 2018 (€307.3 million). Net income was €(22.5) million (previous year: €1.4 million) and was burdened by a negative result from discontinued operations. The strong development in orders received, which characterized the 2018 fiscal year, continued during the quarter under review. Orders received in all divisions were above the corresponding previous year’s figures and, at €281.0 million, were around 33 percent higher than in the previous year (€211.4 million). Accordingly, the ratio of new orders to sales (book-to-bill) increased from an already good 1.19 in the first quarter of 2018 to 1.48 in the quarter under review. The order backlog of €686.1 million as of March 31, 2019 was also significantly higher than the previous year’s figure of €513.2 million.
Business performance of divisions
In the Core Components division, Vossloh increased sales in the first quarter of 2019 by about 23 percent to €72.0 million (previous year: €58.5 million). This significant improvement was attributable on the one hand to the stronger business of Vossloh Fastening Systems in the US and in Russia compared to the previous year. In total, Vossloh Fastening Systems generated sales of €46.0 million (previous year: €43.4 million). On the other hand, Vossloh Tie Technologies achieved very significant sales growth in the first quarter of the current year from €15.1 million to €28.5 million, primarily driven by the consolidation of the Australian manufacturer of concrete ties, Austrak, and by deliveries under the framework agreement with Canadian National (CN). The Core Components division’s EBIT improved in the first quarter of 2019 from €5.6 million to €6.5 million, while its EBIT margin was 9.0 percent (previous year: 9.6 percent). The slight decline in the margin compared to the previous year’s period was primarily attributable to effects from the purchase price allocation following the acquisition of Austrak. The Core Components division’s orders received and order backlog performed highly positively in the first quarter of 2019. Orders received amounted to a total of €90.7 million in the first three months of 2019 (previous year: €42.9 million), while the order backlog as of March 31, 2019 amounted to €256.0 million (previous year: €121.0 million). Vossloh Fastening Systems recorded new orders totaling €61.3 million in the first quarter of 2019 (previous year: €35.3 million). Significantly higher orders received of €32.0 million were also achieved in the Tie Technologies business unit during the quarter under review (previous year: €7.6 million).
Sales of €101.0 million in the Customized Modules division in the first three months of 2019 remained slightly below the figure in the comparative period of €106.4 million. EBIT in the division was slightly negative at €(0.3) million (previous year: €2.3 million), partly due to declining sales, but also to the provision of severance payments for staff redundancies. At the same time, orders received in the Customized Modules division performed highly positively. The high number of orders received in the previous year’s quarter, €143.7 million, was exceeded once again. At €160.0 million in the first three months of 2019, this was a record high. Accordingly, the Customized Modules division’s order backlog increased markedly as of March 31, 2019, reaching €404.7 million (previous year: €362.3 million).
In the Lifecycle Solutions division, Vossloh achieved sales growth in the first quarter of 2019 of about 25 percent to €19.1 million (previous year: €15.3 million). This was attributable to higher sales in both the milling business and in the high-speed grinding segment. The division’s EBIT of €(2.6) million was negative, as is typical for the season (previous year: €(1.9) million). Lower earnings contributions from the stationary services and logistics segments as well as amortization on disclosed hidden reserves from the acquired milling business had a harmful effect on earnings. Orders received by the Lifecycle Solutions division also increased very strongly in the first three months of 2019, reaching €36.4 million (previous year: €25.6 million). The order backlog as of the quarterly reporting date amounted to €30.2 million (previous year: €32.4 million).
In the first quarter, the average number of employees in the Vossloh Group was 3,916 (previous year: 3,702). The increase compared to the previous year is overwhelmingly attributable to the acquisitions of the Australian company Austrak Pty Ltd. and the milling business of STRABAG Rail GmbH at the end of 2018.
Performance program 2019
On April 23, 2019, the Executive Board of Vossloh AG resolved the essential cornerstones of a program for a sustainable increase in profitability as well as an improvement in the self-financing capability. The program includes, among other things, a reduction in the number of employees from the end of 2018 amounting to around five percent as well as a systematic review of unprofitable activities. Necessary decisions will be taken in 2019. The resulting measures will mainly be implemented in 2019. In addition, the program will increasingly focus on reducing overheads, savings in capital expenditures and intensified measures for reducing working capital. Further measures are being reviewed on an ongoing basis. With these measures, the Executive Board aims to expand Vossloh’s financial scope for future growth in an increasingly digital rail world.
For the 2019 fiscal year, management continues to assume Group sales of €900 million to €1 billion and EBIT of between €50 million and €60 million from the operational business. Effects on earnings from the performance program cannot yet be sufficiently quantified from the current perspective and therefore are still not incorporated into the 2019 outlook. For the 2020 fiscal year, Vossloh expects Group sales of between €950 million and €1.05 billion and EBIT of between €65 and €80 million, driven among other factors by the good order situation in China.
|Orders received||€ million||281.0||211.4|
|Order backlog as of 3/31||€ million||686.1||513.2|
|Value added||€ million||(17.6)||(12.8)|
|Net income||€ million||(22.5)||1.4|
|Earnings per share||€||(1.50)||0.04|
Werdohl, April 25, 2019
Contact information for media:
Gundolf Moritz (Mirnock Consulting)
Phone: +49 (0) 2392 52-608
Contact information for investors:
Dr. Daniel Gavranovic
Phone: +49 (0) 2392 52-609
Vossloh is active in rail technology markets worldwide. The Company’s core business is rail infrastructure. The Group activities are organized into the three divisions of Core Components, Customized Modules and Lifecycle Solutions. In the 2018 fiscal year, Vossloh achieved sales of €865 million with approximately 3,800 employees.