Development of core business in line with planning; sale of the Spanish locomotives business tangible
As of September 30, 2015, Vossloh presents the business unit Rail Vehicles as “discontinued operations”. This is because, in light of the ultimately accelerated course of talks with interested parties, it is very likely that an actual sale will take place within the next months. Sales of the continuing operations of the Vossloh Group – not including the business unit Rail Vehicles – were €867.9 million in the first nine months of 2015 up by 6.0 percent compared to the previous year (€819.0 million). The business thus developed within the scope of planning also in the third quarter of 2015. While revenues at Core Components decreased as expected, sales of switches and switch systems rose significantly in the first nine months as compared to the previous year. The Transportation division also reported a significant increase in sales.
Compared to the previous year’s earnings before interest and taxes (EBIT) adjusted for one-time items, EBIT from continuing operations improved considerably in the reporting period to €29.3 million. In the first nine months of 2014, the figure had been at €15.3 million. Including the one-time items incurred in the previous year, EBIT after nine months of 2014 had been significantly negative and, after removing the contributions from the business unit held for sale, amounted to €(158.4) million. The EBIT margin after nine months of the current year was almost twice as high as last year: 3.4 percent (previous year, comparable: 1.9 percent). In the current financial year, sales and EBIT both benefited from positive currency translation effects. Orders received for the Group (in the new reporting structure) decreased to €803.0 million (previous year: €857.7 million), while the order backlog of €1,007.2 million remained unchanged from the closing date in the previous year (€1,160.0 million).
Hans M. Schabert, Chairman of the Executive Board at Vossloh AG: “We are satisfied with the course of the third quarter 2015. Vossloh’s recovery is becoming clearly visible. We have also taken a significant step toward achieving our goal of selling the Transportation division. Further, the stable development of sales and earnings, which is in line with planning over the course of the year, gives us the confidence that we will achieve our operational planning for 2015.”
In the Core Components division, sales declined from €248.6 million in the previous year to €191.7 million in the first nine months of 2015, as expected. The reasons behind this development were, mainly, a lower sales volume in China as well as a weaker business development in Thailand, Poland and Turkey. The EBIT in the division after nine months totaled €22.5 million (previous year, comparable: €37.4 million). The EBIT margin dropped back from a comparable 15.0 percent in the previous year to 11.8 percent in the reporting period. Margin decline was limited thanks to, inter alia, ongoing cost reduction measures. Orders received at Core Components in the first nine months totaled €229.1 million (previous year: €238.7 million), order backlog of €220.0 million as of September 30, 2015 was above the figure from the previous year (€156.6 million). In the current year, the division recorded larger new orders from China and Italy.
At Customized Modules, the positive development of the first half of the year continued in the third quarter of 2015. Sales in the first nine months of 2015 totaled €388.1 million and thus significantly surpassed the prior year figure of €342.1 million. The main reason for this double-digit sales growth was the continued positive business development in Sweden, Brazil and Morocco as well as – primarily driven by currency effects, the US. EBIT improved in the same period to €23.7 million (previous year, comparable: €18.5 million) at a significantly greater rate than sales. The EBIT margin in the division thus increased to 6.1 percent (previous year, comparable: 5.4 percent). Orders received at Customized Modules of €397.4 million was also above the previous year (€370.8 million), while order backlog of €318.5 million declined as compared to the closing date on September 30, 2014 (previous year: €352.3 million).
Sales in the Lifecycle Solutions division were nearly unchanged as compared to the previous year in the first nine months of 2015 at €52.2 million (previous year: €52.9 million). Included in the current figure is a positive amount of approximately €2.3 million from the first-time consolidation of a subsidiary in Finland. EBIT was down from comparable €3.9 million in the prior year period to €2.8 million in the first nine months of 2015. The EBIT margin decreased accordingly from 7.5 percent to 5.3 percent. Orders received in the division were up from €55.1 million in the previous year to €60.2 million in the nine month period of 2015. Order backlog as of September 30 was €18.4 million compared to €9.3 million on the closing date of the previous year. The increase in the two key figures results in particular from a new order for Mobile Services in Croatia.
The Transportation division, excluding the operations of Vossloh Rail Vehicles, generated revenues of €242.3 million in the first nine months of 2015 (previous year: €179.0 million). Sales thus increased by 35.4 %. Thereby, operating development of Vossloh Locomotives improved considerably. It has to be assumed that this positive trend will continue, not least due to the firmly planned move into the new and modern production site in Kiel-Suchsdorf in summer 2016. Sales of the business unit remained hardly unchanged after nine months in 2015 at €68.6 million as compared to €70.7 million previous year.
Sales and profits of Vossloh Electrical Systems recovered significantly as compared to the previous year. All relevant projects advanced substantially. Therefore, an increase in sales of almost 58 % was achieved throughout the first nine months of 2015. EBIT at Vossloh Electrical Systems has recovered above break-even already during the second quarter of 2015. This positive trend intensified throughout the third quarter.
EBIT of the Transportation division improved to €(11,0) million from a comparable €(34.1) million in the previous year. Orders received, on the other hand, fell from €225.4 million in the first nine months of 2014 to €122.1 million in the reporting period. Order backlog as of September 30, 2015 amounted to €521.0 million (previous year: €643.6 million).
Including the employees of Vossloh Rail Vehicles, 5,807 people were employed by the Vossloh Group as of September 30, 2015 (previous year: 5,811). Approximately 69 percent of those were employed outside Germany. Not including the business unit that is being held for sale, the number of employees in the Group on the closing date was 4,866 (previous year: 4,924).
The Executive Board expects sales from continuing operations in 2015 of between €1.130 and €1.160 million and an EBIT margin of 3 to 4 percent. In the coming year, Vossloh will rigorously move forward with its program for sustainably increasing profitability and will consistently develop the company in line with the long-term Group strategy.
Overview of the most important key figures of Vossloh Group (continuing operations)
|Vossloh Group||Jan-Sep 2015||Jan-Sep 2014||Δ %||Q3/2015||Q3/2014||Δ %|
|Orders received||€ million||803.0||885.7||(9.3)||217.3||259.4||(16.2)|
|Order backlog||€ million||1,077.2||1,160.0||(7.1)||1,077.2||1,160.0||(7.1)|
|Value added||€ million||(31.8)||(222.7)||-||(2.8)||(29.0)||-|
|Net profit||€ million||6.6||(167.7)||-||2.1||(16.5)||-|
|thereof attributable to the shareholders of Vossloh AG||€ million||2.6||(174.3)||-||1.0||(18.4)||-|
|Earnings per share||€||0.20||(13.52)||-||0.08||(1.42)||-|
Werdohl, October 29, 2015
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Vossloh is a global player in the rail technology markets. Our core business is rail infrastructure. In addition, the Group is active in the areas of rolling stock and electric buses. Since January 1, 2015, the activities of the Group have been divided into the four divisions Core Components, Customized Modules, Lifecycle Solutions and Transportation. In financial year 2014, Vossloh generated sales of €1.32 billion with more than 5,700 employees.