Vossloh concludes first quarter 2016 with positive EBIT
The EBIT of Vossloh Group improved considerably to €2.3 million in the first quarter of 2016. The comparable figure in the first quarter of 2015 had been at -€2.2 million*. The EBIT margin for the first three months of the current financial year was positive at 1.0 percent (previous year: -0.9 percent*). Due to revenue shifts between the quarters, sales at the Vossloh Group of €240.1 million in the first quarter were 7.6 percent below the previous year figure of €259.8 million*, adjusted as a result of the sale of the Rail Vehicles business unit. The seasonally reserved course of business in the first three months of 2016 was in line with the expectations. Nevertheless, Vossloh expects a continuation of the positive business trend in the course of the year. This is also backed by the strong orders received in the first quarter, which were significantly higher than sales and amounted to €289.6 million as compared to €265.5 million* in the previous year. The order backlog for the Group on March 31, 2016 of €1,080.7 million remained at a high level (previous year: €1,147.7 million*).
In the Core Components division, revenues of €51.3 million were generated in the period under review. They were thus 22.6 percent below the previous year (€66.2 million). The division generated sales growth in India and in Qatar while revenues in China and Saudi Arabia were lower compared to the previous year quarter. Despite the drop in sales, EBIT of the division improved to €6.6 million (previous year: €6.4 million). Besides positive effects from the implemented cost-cutting measures, a high-margin product mix contributed to the increase in profitability. The EBIT margin at Core Components amounted to 13.0 percent after 9.6 percent in the previous year. Orders received in the first quarter of 2016 at €65.0 million slightly missed the 2015 figure (€71.4 million). In the period under review, the division won tenders for delivery of fastening systems for the construction of the underground rail network in Riyadh and in Doha, inter alia.
In the Customized Modules division, sales remained by 3.5 percent moderately below the previous year quarter (€115.9 million) and reached €111.9 million. Among others, important reasons were a weaker business development in the USA and Poland, whereas significant revenue increases were achieved form example in France and Israel. EBIT for the division fell to €2.4 million after €5.5 million in the previous year. This was also related to a fine notice of the German Federal Cartel Office for anti-competitive agreements in the switch market, issued in March 2016, which turned out to be slightly higher than expected. The EBIT margin in the first quarter of 2016 amounted to 2.2 percent after 4.8 percent in the previous year. Buoyed by orders from France, USA, Morocco and Sweden, orders received improved by 4.6 percent to €153.9 million (previous year: €147.2 million).
Sales as well as earnings in the Lifecycle Solutions division could be improved. Revenues were at €13.7 million by 15.6 percent above prior year’s level (€11.9 million), primarily due to a growing business volume in Northern Europe. EBIT remained negative at -€1.0 million due to seasonal effects, but exceeded the prior year figure of -€1.6 million. Orders received at Lifecycle Solutions were also higher than in the prior year, amounting to €22.2 million (previous year: €19.3 million). At the beginning of the year, Lifecycle Solutions was able to further expand the collaboration with Deutsche Bahn. By now, Lifecycle Solutions services the three German high-speed rail lines with operating speeds of 300 km/h with its High Speed Grinding technology. These include the Ingolstadt – Munich, Cologne – Frankfurt on the Main and Erfurt/Leipzig – Halle routes.
In the Transportation division, which currently consists of the Vossloh Locomotives and Vossloh Electrical Systems business units, sales of €65.5 million were generated in the first three months of 2016 (previous year: €68.0 million*). EBIT, however, improved from a comparable -€8.8 million* in the first quarter of 2015 to -€2.4 million in the same period of the current year. The consistent implementation of the restructuring measures had a significant effect on this development. Orders received for the division grew considerably as compared to the prior year to €51.1 million (previous year: €30.0 million*), a follow-up order at Vossloh Electrical Systems contributing crucially, among others. In March, Albtal-Verkehrs-Gesellschaft ordered further 25 light rail vehicles from the consortium of Vossloh Kiepe and Stadler Rail (formerly Vossloh Rail Vehicles). By exercising this second option from the contract originally signed in 2011, the total volume of the order increases to 75 vehicles. Also, the execution of existing contracts proceeded well at Electrical Systems. Sales increased by 8.2 percent to €51.0 million (previous year: €47.1 million). At Vossloh Locomotives in Kiel, revenues declined by 28.5 percent to €15.1 million (previous year: €21.1 million) due to a lower used vehicles business volume. Orders received in the business unit amounted to €11.1 million, falling below the previous year level of €12.9 million.
At the end of the first quarter of 2016, 4,854 people were employed by Vossloh Group around the world, 60 people less than at prior year’s date (4,914 employees*). The number of employees at Core Components grew by a net of 11 people, due to the first time consolidation of the affiliate in India. The Lifecycle Solutions division increased its staff by 89 in the course of the business expansion, while the number of employees at Customized Modules fell slightly. In the Transportation division – not including the employees of the former business unit Rail Vehicles – the number of employees declined by 140 as compared to the previous year’s reporting date. The reduction related to both business units.
For the full-year 2016, Vossloh continues to anticipate sales between €1.2 and €1.3 billion (2015: €1,200.7 million) and a further continuous improvement in operational profitability. Particularly strong sales growth is expected in the Core Components division. The EBIT margin of the Group will, from today’s perspective, improve slightly to between 4.0 percent and 4.5 percent in the current financial year as compared to the previous year (2015: 3.8 percent) supported by the continuation of the restructuring measures. For 2017, on the basis of the current Group structure, Vossloh expects an EBIT margin of between 5.5 percent and 6.0 percent. Vossloh is still planning to sell the remaining activities of the Transportation division, which is to lead to a further improvement in profitability.
Overview of the most important key figures of Vossloh Group
|Orders received||€ million||289.6||265.5|
|Order backlog||€ million||1,080.7||1,147.7|
|Value added||€ million||-15.4||-22.2|
|Net profit||€ million||3.8||-1.0|
|Earnings per share||€||0.21||-0.19|
* Prior year figures adjusted due to the sale of the former Rail Vehicles business unit
Werdohl, April 28, 2016
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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. The activities of the Group are divided into the four divisions Core Components, Customized Modules, Lifecycle Solutions and Transportation. In financial year 2015, Vossloh generated sales of €1.2 billion with approximately 4,900 employees.