Vossloh achieves significant increases in orders received, sales revenues and earnings in 2022
Vossloh impressively continues its growth course in fiscal year 2022 and achieves outstanding results. Orders received reach an all-time high of €1.25 billion, surpassing the previous year’s level of €947.6 million by 31.6 percent. The order backlog at the end of the reporting period is up 30.8 percent on the prior-year figure at €799.6 million (December 31, 2021: €611.4 million). The book-to-bill ratio, which reflects the ratio of orders received to sales, reaches a high level of 1.19 during the reporting period (previous year: 1.01). During the past fiscal year 2022, Vossloh was able to win numerous tenders and conclude framework agreements with long terms. These include, for example, the delivery of concrete ties for a major project in Australia, and rail fastening systems for high-speed lines in China and Egypt, and an agreement for preventive rail maintenance in Germany.
Group sales also develop extremely positively during the reporting period, exceeding the billion euro mark in infrastructure business for the first time in the company's history and reaching a level of €1.05 billion. This represents an increase of 11.0 percent compared with the prior-year figure of €942.8 million. Group sales thus exceed the original expectation for fiscal year 2022 and are at the upper end of the forecast corridor of €1 billion to €1.05 billion, which was last raised in October 2022. This positive development is driven by all three divisions - Core Components, Customized Modules and Lifecycle Solutions.
Earnings further increased despite very high prices for materials and energy
Vossloh Group EBIT reaches €78.1 million in the year under review, representing an increase of 8.0 percent compared to previous year’s level of €72.3 million. Thus, Vossloh achieves the highest group EBIT in the last 10 years. Against the backdrop of substantial net burdens due to massively increased procurement prices for materials and energy of more than €10 million, the increase is very remarkable. Despite the adverse impact particularly on profitability, resulting especially from the fact that price increases on the procurement side could not be passed on in full to customers, the EBIT margin of 7.5 percent almost matches the prior-year level of 7.7 percent. At €56.0 million, net income in 2022 is significantly higher than the prior-year level of €35.9 million. Accordingly, earnings per share rise from €1.31 to €2.38.
The Vossloh Group's net assets and financial position stays positive: the equity ratio remains at the high level of the previous year and reach a very solid 45.7 percent at the end of the reporting period (December 31, 2021: 45.6 percent). Net financial debt increase slightly to €237.5 million in 2022 (December 31, 2021: €215.6 million). This happens primarily against the backdrop of a targeted inventory buildup with the aim of ensuring Vossloh's ability to deliver at all times even in these challenging times.
In view of the challenging general conditions, Oliver Schuster, CEO of Vossloh AG, is more than satisfied with the results achieved in fiscal 2022. "Vossloh has again achieved an outstanding performance in fiscal 2022 with orders received at a record level, the infrastructure business exceeding the one billion mark in sales for the first time, and a significant increase in earnings. This success of Vossloh is crucially linked to our technological leadership, our innovative strength, our uniquely comprehensive product and service portfolio, and our forward-looking, sustainable and crisis-resistant business model. We promote the ecologically and economically sensible change in transport. After all, rail is and remains the most energy-efficient and environmentally friendly mode of transport. Governments around the world are therefore initiating infrastructure investment programs from which Vossloh will benefit over the coming decades," says Schuster.
Orders received in the Core Components division almost 40 percent higher
Orders received in the Core Components division reach €554.4 million, exceeding the level of 2021 by almost 40 percent (previous year: €398.4 million). The order backlog as of December 31, 2022, amounts to €285.4 million (prior-year reporting date: €211.8 million), representing an increase of 34.8 percent. The Fastening Systems business unit benefits in particular from three major orders to supply rail fastening systems for the construction of new high-speed lines in China and Egypt. In the Tie Technologies business unit, orders received increase in the USA and Australia. In the Core Components division, Vossloh raises sales during the 2022 reporting period to €482.1 million (up from €429.1 million). This significant growth of 12.4 percent is mainly attributable to the positive development of the Fastening Systems business unit. During the 2022 reporting period, the business unit's sales increase to €341.3 million (previous year: €292.4 million). The noticeable sales growth is mainly attributable to deliveries for projects in Mexico and Turkey and to higher business volumes in Eastern Europe, China and Australia. Sales revenues in the Tie Technologies business unit amount to €156.3 million (previous year: €142.3 million) due to higher demand in Canada and Mexico. The Core Components division generates EBIT of €43.7 million in fiscal 2022 (previous year: €46.7 million). The decrease of €3.0 million is primarily related to higher procurement prices, which could not be fully passed on to customers. As a result, the EBIT margin also fell from 10.9 percent in the previous year to 9.1 percent.
Customized Modules division with very strong business performance
Orders received increase by 24.5 percent year on year to €563.3 million. At €488.1 million, the order backlog at the end of 2022 significantly exceeds the previous year's level (€391.4 million). Sales revenues in the Customized Modules division increase by €37.4 million to €456.1 million during the reporting period (previous year: €418.7 million). Higher sales in France, Portugal and Turkey in particular more than offset lower sales in Egypt. EBIT increases by 9.4 percent to €37.1 million (previous year: €34.0 million). Overall, the EBIT margin thus remains stable at 8.1 percent despite the burdens on the procurement side.
Lifecycle Solutions division with profitable sales growth
At € 162.3 million, orders received during the 2022 reporting period significantly exceed the previous year's level of € 122.2 million. The order backlog of €37.5 million as of December 31, 2022 represents a considerable increase over the figure of €14.9 million as of the previous year's reporting date. The Lifecycle Solutions division increases its sales revenues by 17.7 percent to €136.0 million in 2022 (previous year: €115.5 million). Higher revenues are generated in the Netherlands, in Denmark and Germany. The sales of the Dutch company ETS Spoor, which was acquired in July 2021, also contribute to the increase. The business unit's EBIT raise by €2.2 million to €11.5 million (previous year €9.3 million), mainly due to higher earnings contributions from the Dutch company as well as from machine sales. The EBIT margin thus increases from 8.0 percent in the previous year to 8.4 percent.
EU taxonomy underpins Vossloh's sustainable business model
In fiscal year 2022, the EU Taxonomy Regulation was applied for the second time. According to this standardized classification system for ecologically sustainable economic activities, 100 percent of Vossloh's sales revenues are again classified as taxonomy-eligible. 64 percent (previous year: 62 percent) are assessed as taxonomy-aligned and thus as ecologically sustainable activities. For this to be the case, they must, in accordance with the relevant requirements, be in connection with electrified rail lines, which is ultimately beyond Vossloh's control. Both values are extremely respectable and underline Vossloh's contribution to achieving the climate targets.
During the 2022 fiscal year, the average number of employees in the Vossloh Group was 3,794 (previous year: 3,612). The increase in employees affects all divisions.
Outlook for the year 2023
The Executive Board of Vossloh currently expects the company to generate sales revenues of between €1.05 billion and €1.15 billion in the current fiscal year. All divisions are expected to contribute to the Group's sales growth. With a view to operating earnings, Vossloh expects, notwithstanding a persistently high level of procurement prices for energy and materials as well as significantly higher personnel costs, an EBIT within a corridor of €79 million to €88 million. Based on the midpoint of the sales guidance, this results in an EBIT margin of between 7.2 and 8.0 percent.
Due to the good order situation and the positive business development over the course of the 2022 fiscal year, the Executive and Supervisory Boards will propose to Vossloh AG's annual general meeting to distribute a dividend of €1.00 per share.
|Order backlog as of 12/31
|Operating EBITDA margin
|Operating EBIT margin
|Earnings per share
|Net financial debt as of 12/31/2022
|Equity ratio as of 12/31/2022
Vossloh is a global technology group with a 140-year history of quality, safety, customer focus, reliability, and innovative strength. With its comprehensive range of rail-related products and services, Vossloh ranks among the world market leaders in this sector. Vossloh offers a uniquely broad range of products and services: rail fastening systems, concrete ties, switch systems and crossings, as well as innovative and increasingly digital-based services for the entire life cycle of rails and switches. Vossloh uses its systemic understanding of the track to address the central customer need of "availability of the rail track".
Vossloh products and services are in use in more than 100 countries. With some 75 group companies in almost 30 countries and over 40 production locations, Vossloh is active locally worldwide. Vossloh is committed to sustainable corporate governance and climate protection and with its products and services makes an important contribution to the sustainable mobility of people and goods.
The Group's activities are organized into the three divisions Core Components, Customized Modules, and Lifecycle Solutions. In the 2022 fiscal year, Vossloh generated sales revenues of €1,046.1 million with around 3,800 employees.