Vossloh with strong growth in sales revenues and earnings in 2021 despite ongoing burdens from Covid 19 pandemic
Vossloh, a long-established and world-leading supplier of rail infrastructure products and services, looks back on a successful fiscal year 2021. Orders received came to €947.6 million, exceeding the previous year's high level of €915.5 million by 3.5 percent. The order backlog was €611.4 million at the end of 2021, a 2.8 percent increase over the previous year’s figure (December 31, 2020: €594.5 million). Over the course of the fiscal year 2021, Vossloh announced that it had won a number of long-term framework agreements with a volume well in excess of €200 million. Framework agreements are generally not recognized immediately in orders received, but only when the customer calls off the agreed services. The positive development in demand continued to improve at the beginning of 2022. The Vossloh Group was awarded a €90 million contract for the delivery of concrete ties in Australia, one of the largest framework agreements in the company’s history. Vossloh was also awarded another major order for rail fastening systems in China, worth nearly €40 million. Vossloh has thus already secured all of its planned sales revenues for the Chinese high-speed segment in 2022.
Group sales also developed very positively and reached €942.8 million during the reporting period. This corresponds to an increase of 8.4 percent compared to the previous year’s value of €869.7 million. Group sales thereby exceeded the original expectations for the 2021 fiscal year and were at the upper end of the most recently forecast range of €900 million to €950 million. This improvement was driven by all divisions – Core Components, Customized Modules and Lifecycle Solutions. Particularly strong sales growth was again recorded in the Fastening Systems business unit (35.2 percent improvement year on year) in the Core Components division.
Profitability continues to improve despite rising prices for materials, logistics and energy
Operating EBIT rose from €57.5 million to €72.3 million, while the operating EBIT margin improved by 1.1 percentage points to 7.7 percent in the 2021 reporting period. Operating EBITDA saw an increase from €107.5 million in the previous year to €124.2 million, with an EBITDA margin of 13.2. percent (previous year: 12.4 percent on an operational basis). The margins were therefore within the forecast ranges. At €35.9 million, net income in the 2021 fiscal year was significantly above the prior year’s level of €20.8 million. The same applies for earnings per share, which increased from €0.98 to €1.31. This is a particularly outstanding performance in light of the significant burdens that increases in the prices of materials, logistics and energy had on earnings.
The Vossloh Group’s net assets and financial position also improved considerably. The equity ratio went up significantly to 45.6 percent on the reporting date of December 31, 2021 (previous year: 34.0 percent). Net financial debt continued to reduce noticeably, to only €215.6 million at the end of the reporting period (December 31, 2021: €351.3 million). These changes were driven by the positive free cash flow and particularly the successful placement of a sustainability-oriented hybrid note of around €150 million in February 2021. This note is recognized as equity in accordance with IFRS accounting standards. Contrary effects resulted from dividend, lease and interest payments, as well as payments made in relation to the acquisition of Dutch company ETS Spoor BV at the end of July 2021. ETS Spoor is a leading provider in the technologically sophisticated and innovative Dutch market for rail infrastructure.
“Despite the challenging conditions related to the pandemic, disruption of supply chains, and sharp increases in the prices of materials, logistics and energy, Vossloh performed again strongly on an operational basis in the 2021 fiscal year. Sales revenues and profitability increased significantly," says Oliver Schuster, Chief Executive Officer of Vossloh AG, adding: “With our products and services we make a significant contribution to sustainability, as impressively substantiated by the results of the EU Taxonomy, which we applied for the first time. 100 percent of our sales qualify as taxonomy-eligible, 62 percent as taxonomy-aligned. This is a great result.”
Sales revenues up by 14.3 percent in the Core Components division
Vossloh’s Core Components division increased its sales revenues to €429.1 million in 2021 (previous year: €375.3 million). This significant increase was driven by improved business in the Fastening Systems business unit. The sales revenue of the business unit went up to €292.4 million in 2021 (previous year: €216.3 million). This strong sales growth was largely due to pandemic-related postponements of deliveries in China from 2020 as well as increased demand from Italy and Germany. The sales revenues of the Tie Technologies business unit came to €142.3 million due to decreased demand from the USA (previous year: €169.1 million). Orders received by the Core Components division came to €398.4 million in 2021 (previous year: €349.6 million). The order backlog came to €211.8 million on December 31, 2021, and was lower than the previous year’s figure, as expected, largely due to the planned processing of the high order backlog in China, the USA and Australia (December 31, 2020: €247.0 million). The Core Components division achieved an EBIT of €46.7 million in 2021 (previous year: €36.0 million on an operating basis). The EBIT margin went up from 9.6 percent on an operational basis in the previous year to 10.9 percent. This considerable improvement on an operational basis was achieved despite the significant negative impact of higher material prices.
Customized Modules division with improved sales revenues and profitability
The Customized Modules division generated €418.7 million in sales revenues, an improvement compared to the previous year’s €401.8 million. Higher sales revenues, particularly in Egypt, Australia and India, more than offset lower sales in France. Orders received were below the previous year’s high figure of €472.6 million, but continued to be on a high level at €452.5 million. The order backlog at the end of 2021 was €391.4 million, significantly higher than the previous year’s level (€338.4 million). EBIT went up 13.2 percent to €34.0 million (previous year: €30.0 million). The EBIT margin rose to 8.1 percent (previous year: 7.5 percent). This improvement is mainly attributable to operational efficiency gains.
Increased sales revenues and EBIT for Lifecycle Solutions division
The Lifecycle Solutions division improved its sales revenues by 11.5 percent to €115.5 million in 2021 (previous year: €103.8 million). Though rail and switch grinding sales revenues fell year on year as expected, the decline was more than compensated for by higher revenues from machine sales and initial sales contributions from the Dutch company ETS acquired in July 2021. Orders received came to €122.2 million during the 2021 reporting period, a considerable rise compared to the previous year’s figure of €103.5 million. The order backlog came to €14.9 million on December 31, 2021, also a significant improvement compared to the previous year’s €10.2 million. The division’s EBIT went up by €0.5 million to €9.3 million (previous year: €8.8 million). By contrast, the EBIT margin went down slightly from 8.4 percent in the previous year to 8.0 percent in 2021 due to expenses in connection with the acquisition of ETS Spoor.
EU Taxonomy substantiates Vossloh’s sustainable business model
The EU Taxonomy Regulation – a standardized system for classifying ecologically sustainable economic activities – was applied for the first time in the 2021 fiscal year. The result: an outstanding 100 percent of Vossloh’s reportable sales revenues in the 2021 fiscal year are taxonomy-eligible. In order to also be classified taxonomy-aligned according to the applicable requirements, sales revenues must be related to electrified rail routes, which is ultimately outside Vossloh’s sphere of influence. Prior to the official reporting obligation, Vossloh has already determined this value for 2021 and achieved a result of an outstanding 62 percent. These impressive figures are further evidence of Vossloh’s significant contribution to sustainability.
During the 2021 fiscal year, the average number of employees in the Vossloh Group was 3,612 (previous year: 3,482). The increase in the workforce was largely due to the first-time full consolidation of an Indian company in the Customized Modules division.
Outlook for 2022
The Executive Board of Vossloh currently expects the company to achieve sales revenues of between €925 million and €1 billion in the current fiscal year. In terms of profitability, Vossloh expects an EBITDA margin of 13 percent to 14 percent and an EBIT margin between 7.5 percent and 8.5 percent. Overall, Vossloh expects a continued increase in sales revenues and EBIT in 2022. From today's perspective, deviations from this expectation, in particular due to a further worsening of pandemic-related influences or possible effects from the political events in Eastern Europe, cannot be ruled out.
|Orders received||€ million||947.6||915.5|
|Order backlog as of 12/31||€ million||611.4||594.5|
|Sales revenues||€ million||942.8||869.7|
|Operating EBITDA||€ million||124.2||107.5|
|Operating EBITDA margin||%||13.2||12.4|
|Operating EBIT||€ million||72.3||57.5|
|Operating EBIT margin||%||7.7||6.6|
|Net income||€ million||35.9||20.8|
|Earnings per share||€||1.31||0.98|
|Value added||€ million||9.5||12.5|
|Net financial debt as of 12/31/2021||€ million||215.6||351.3|
|Equity ratio as of 12/31/2021||%||45.6||34.0|
Vossloh is a globally active technology Group dedicated for over 135 years to quality, safety, reliability, innovation and a focus on the customer. Vossloh’s comprehensive range of track-related products and services make the company a leader in the global market in this area. Vossloh provides a uniquely wide range of services: rail fastening systems, concrete ties, switch systems and crossings as well as innovative and increasingly digital-based services for the entire lifecycle of rails and switches. Vossloh uses its extensive understanding of rail infrastructure to meet the key customer need of track network availability.
Vossloh products are in use in more than 85 countries. With close to 80 Group companies in around 30 countries and over 35 production sites, Vossloh is a global company with a local presence. Vossloh is committed to sustainable governance and climate protection and makes an important contribution to sustainable passenger and freight mobility with its products and services.
The Group activities are organized into the three divisions of Core Components, Customized Modules and Lifecycle Solutions. In the 2021 fiscal year, Vossloh achieved sales of €942.8 million with approximately 3,600 employees.