Vossloh successfully starts into the 2022 fiscal year with sales growth and a peak order backlog
Vossloh, a long-established and world-leading supplier of rail infrastructure products and services, has made a successful start to 2022. The order situation has reached a new peak value. Orders received improved in all divisions and came to €378.2 million in total. This corresponds to an increase of 45.4 percent over the €260.0 million recorded for the same period in the previous year. The order backlog reached €772.4 million at the end of the reporting period on March 31, 2022 – a 19.8 percent increase compared to €644.8 million in the previous year and the highest figure in the company’s history. The pleasingly high demand was largely driven by two significant orders for rail fastening systems for the construction of new high-speed lines in China with a total volume of around €90 million. Thanks to these orders, Vossloh has already covered the entirety of the sales it planned to achieve in China in the high-speed segment in the 2022 fiscal year, as well as the majority of the sales planned for the 2023 fiscal year. Vossloh also concluded a €90 million framework agreement in Australia for the delivery of concrete ties. This agreement will be reflected in orders received time-delayed as orders are called-off.
Group sales went up 7.3 percent to €222.2 million during the 2022 reporting period. This improvement was attributable to increased sales revenues in the Customized Modules division. The Lifecycle Solutions division also improved its sales revenues slightly. As expected, the Core Components division saw a year-on-year downturn in sales revenues.
Profitability remains at a high level in the first quarter
At €8.1 million, EBIT remained pleasingly high in the first quarter of 2022 but as expected could not reach the previous year’s extraordinarily high figure of €12.1 million. This was caused by significantly higher material and energy prices, in addition to the changes in the project mix of the Fastening Systems business unit. The EBIT margin was at 3.6 percent (previous year: 5.8 percent). EBITDA came to €20.1 million in the first three months of 2022 (previous year: €25.6 million), corresponding to an EBITDA margin of 9.1 percent (previous year: 12.4 percent).
The net assets and financial position of the Vossloh Group also improved compared to the previous year. The equity ratio went up to a high 45.1 percent on the reporting date of March 31, 2022 (previous year: 43.8 percent). Net financial debt including lease liabilities continued to fall within a year despite the cash outflow related to the acquisition of ETS Spoor BV, and came to €228.2 million at the end of the reporting period (March 31, 2021: €244.4 million). This change was driven primarily by the positive free cash flow of around €59 million over the last twelve months.
“We are extremely satisfied with the start in the 2022 fiscal year in a challenging market environment. The extraordinarily high orders received figure in the first quarter is yet another indication of our competitiveness. It also shows that we are on the right course with our strategy of continuous organic sales growth,” said Oliver Schuster, Chief Executive Officer of Vossloh AG. “We are working hard on mitigating the impact of the rise in the cost of materials and energy and we are in discussions with our customers to determine how we can fairly distribute the burden of these additional expenses within the context of our existing contractual relationships. This will have a significant impact on our ability to reach our profitability targets over the short to medium term.”
Orders received in the Core Components division almost doubled
Orders received by the Core Components division came to €196.6 million in the first quarter of 2022, almost doubled the previous year’s figure of €99.5 million. This significant improvement was primarily driven by the rise in orders received for Vossloh Fastening Systems in China. The order backlog came to a considerable €314.3 million as of March 31, 2022, well in excess of the previous year’s figure of €237.5 million. The Core Components division achieved sales revenues of €101.5 million in the reporting period (previous year: €105.1 million). The sales revenues of the Fastening Systems business unit went up by 12.8 percent to €73.9 million (previous year: €65.5 million). Sales growth was particularly achieved in Europe, especially in Czechia and Italy. The revenues of the Tie Technologies business unit came to €28.5 million due to decreased demand from the USA and Australia (previous year: €40.6 million). The Core Components division achieved an EBIT of €9.0 million in the first three months of 2022 (previous year: €14.7 million). The EBIT margin decreased from 14.0 percent in the previous year to 8.9 percent. This considerable downturn was caused by significant increases of material and energy prices, in addition to the changes in the project mix of the Fastening Systems business unit.
Customized Modules division increases sales revenues and profitability
Orders received came to €146.0 million in the first quarter for the Customized Modules division – an increase of 14.9 percent compared to the previous year’s figure of €127.0 million. The order backlog as of the end of the first quarter in 2022 came to €430.9 million, representing a significant rise compared to the figure of €380.0 million in the previous year. The Customized Modules division generated €104.7 million in sales revenues, a 19.9 percent improvement compared to the previous year’s €87.3 million. Sales growth was particularly strong in Egypt, Sweden and France. EBIT rose to €5.2 million (previous year: €4.0 million), corresponding to an EBIT margin of 5.0 percent (previous year: 4.6 percent). Earnings and profitability increased despite the impact of higher prices for materials and energy; higher earnings contributions in France and Sweden played a particularly important role.
Stable performance from the Lifecycle Solutions division
Orders received in the Lifecycle Solutions division of €42.3 million in the first quarter of 2022 significantly exceeded the previous year’s figure of €38.9 million. The order backlog came to €36.7 million on March 31, 2022, also a noticeable improvement compared to the previous year’s €28.8 million. The Lifecycle Solutions division posted a slight year-on-year increase in its sales revenues (€20.0 million compared to €19.7 million in the previous year). Contributions to sales revenues from the Dutch company ETS Spoor BV acquired in July 2021 and higher sales revenues from milling as well as rail and switch grinding slightly outweighed the downturn in sales revenues from product sales and stationary welding. The EBIT of the division was largely on a par with the previous year (€(2.3) million compared to €(2.4) million in the previous year). The EBIT margin came to (11.4) percent in 2022 (previous year: (12.1) percent).
During the first quarter of 2022, the average number of employees in the Vossloh Group was 3,713 (previous year: 3,608). The increase is mainly due to a company in Portugal in the Customized Modules division which was fully consolidated for the first time in the final quarter of 2021.
Outlook for 2022
Vossloh AG remains committed to the outlook for 2022 and still expects to achieve sales revenues of between €925 million and €1 billion in the current fiscal year. In terms of profitability, Vossloh continues to expect an EBITDA margin of 13 percent to 14 percent and an EBIT margin between 7.5 percent and 8.5 percent. Profitability is expected to be lower in the second quarter than in the corresponding quarter of the previous year, before increasing significantly in the second half of 2022. Changes in the prices and availability of materials and energy prices will have a significant impact on profitability over the rest of the year, as will the extent to which the additional expenses can be passed on to the customers.
|Order backlog as of 3/31
|Earnings per share
|Net financial debt (including leasing) as of 3/31
|Equity ratio as of 3/31
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.