Vossloh successfully starts fiscal year 2023 with record sales and highest operating EBIT in 12 years
Vossloh is off to a very successful start in the new fiscal year 2023, with orders received at a gratifyingly high level of €344.9 million. This is only slightly below the previous year's record figure of €378.2 million, which included two major orders from China with a total volume of around €90 million. At the end of the reporting period, the order backlog reaches a new all-time high of €868.6 million, compared with €772.4 million at the end of the prior-year quarter. This corresponds to an increase of 12.5 percent, to which all divisions again contributed. The book-to-bill ratio, which reflects the ratio of orders received to sales, reaches the high value of 1.35 in the reporting period.
Significant increase in sales and EBIT
Group sales in the first quarter of 2023 amount to €256.3 million, up by 15.4 percent from the prior-year level of €222.2 million. Vossloh's infrastructure business thus achieves the highest sales figure in an opening quarter in the company's history. All divisions contribute to the positive development, with the Lifecycle Solutions division showing the strongest growth in percentage terms with a plus of 56.9 percent. At €14.0 million, EBIT in the first quarter of 2023 is significantly higher than the figure for the prior-year period of €8.1 million, thus rising operationally to the highest level in twelve years. The EBIT margin improved from 3.6 percent to 5.5 percent.
The development of the Vossloh Group's net assets and financial position is also positive. Equity increases year on year by 4.7 percent to €626.3 million (prior year: €598.1 million). The equity ratio of 44.5 percent thus remains at a persistently high level (prior year: 45.1 percent). Net financial debt including lease liabilities of €38.8 million (December 31, 2022: €39.9 million) amounted to €273.4 million at the end of the reporting period (December 31, 2022: €237.5 million). The main reason for the increase compared with the end of 2022 was the negative free cash flow typical of the season.
"We are very pleased with the impressive results in the first quarter of fiscal year 2023. In terms of order intake, we can report the third-highest figure within a quarter, and in terms of order backlog even the highest figure ever recorded in the history of our company. Sales also reached a record level and we achieved a remarkable increase in EBIT of around 74 percent. In view of the still challenging business environment, this is an outstanding achievement," says Oliver Schuster, CEO of Vossloh AG, adding: "We have set ourselves ambitious goals for the current and coming years and with the strong first quarter we are seamlessly continuing our successful course. As a company, we are excellently positioned to create value for our global customers and make a significant contribution to sustainable mobility with innovative strength, expertise and tireless diligence."
Profitability and sales increase in the Core Components division
As expected, the Core Components division's orders received of €166.2 million in the first quarter of 2023 were lower than the exceptionally high prior-year level of €196.6 million, which had benefited from two major orders at the Fastening Systems business unit in China. Lower order intakes at the Fastening Systems business unit were offset by significantly higher order intake at the Tie Technologies business unit. Overall, the value of new orders at Vossloh Tie Technologies more than doubled with €85.7 million. This was mainly due to growth in Mexico and the USA. The division's order backlog at the end of the reporting period amounts to €327.5 million and is thus higher than the already high prior-year figure (March 31, 2022: €314.3 million). In terms of sales, the Core Components division achieves an increase of 13.5 percent to €115.1 million in the period under review (prior year: €101.5 million). Sales by Vossloh Fastening Systems increase to €79.2 million (prior year: €73.9 million). Especially in Mexico, the USA, and Germany, sales are higher. The sales increase in the Tie Technologies business unit is spread across all relevant regions, although the increase in the USA is particularly pronounced. Overall, sales improve by 46.5 percent to €41.7 million (previous year: €28.5 million). The Core Components division achieves an EBIT of €12.4 million in the first quarter of 2023 (prior year: €9.0 million). The EBIT margin increases from 8.9 percent in the previous year to 10.8 percent. The noticeable improvement in earnings and profitability is primarily attributable to Vossloh Fastening Systems.
Customized Modules division also increases sales and EBIT
At € 144.1 million, orders received in the Customized Modules division remains stable at the high level of the previous year (€ 146.0 million). At €502.6 million, the order backlog at the end of the first quarter of 2023 significantly exceeds the previous year's figure of €430.9 million and is primarily related to orders in Serbia and France. Sales in the Customized Modules division increase by 14.8 percent to €120.1 million in the reporting period (previous year: €104.7 million). The division generates higher sales, particularly in Mexico and Western and Eastern Europe. EBIT of €7.2 million (previous year: €5.2 million) in an opening quarter marks the highest level in more than ten years. The EBIT margin rises accordingly to 6.0 percent (previous year: 5.0 percent).
Lifecycle Solutions division with very positive business development
At €46.9 million, orders received in the Lifecycle Solutions business unit in the first quarter of 2023 exceed the prior-year figure of €42.3 million by 10.8 percent. The order backlog of €52.1 million at the end of the reporting period also shows a significant increase compared to the previous year's figure of €36.7 million. The Lifecycle Solutions division also achieves a 56.9 percent increase in sales to €31.4 million (previous year: €20.0 million). This significant growth is mainly attributable to the High Speed Grinding business, higher sales contributions from the Dutch company Vossloh ETS, and the Stationary Welding business. As is typical for the season, the division's EBIT is still negative at €(0.9) million but is noticeably above the prior-year level of €(2.3) million. Accordingly, the EBIT margin amounts to (3.0) percent in the reporting period 2023 (prior year: (11.4) percent).
During the first quarter 2023, the average number of employees in the Vossloh Group was 3,903 (prior-year period: 3,713). The increase is mainly attributable to the Core Components division and here primarily to the Tie Technologies business unit.
Outlook for the year 2023
Vossloh AG confirms its outlook for 2023 and, from today's perspective, still expects to generate sales of between €1.05 billion and €1.15 billion in the current fiscal year. Despite the persistently high procurement costs for energy and materials, as well as significantly higher personnel expenses, Vossloh expects a noticeable increase in EBIT to a value between €79 million and €88 million, with all divisions contributing as planned. Based on the midpoint of the sales guidance, an EBIT margin of between 7.2 and 8.0 percent is thus expected.
|Orders received||€ million||344.9||378.2|
|Order backlog as of 3/31||€ million||868.6||772.4|
|Sales revenues||€ million||256.3||222.2|
|Operating EBITDA||€ million||26.9||20.1|
|Operating EBITDA margin||%||10.5||9.1|
|Operating EBIT||€ million||14.0||8.1|
|Operating EBIT margin||%||5.5||3.6|
|Net income||€ million||4.8||3.6|
|Earnings per share||€||0.07||0.02|
|Value added||€ million||(6.0)||(7.9)|
|Net financial debt (incl. Leasing) as of 3/31||€ million||273.4||228.2|
|Equity ratio as of 3/31||%||44.5||45.1|
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.