Significant increase in Vossloh’s sales revenues and earnings in the first nine months of 2021
Vossloh generated €698.4 million in Group sales in the first nine months of 2021. This corresponds to an increase of 13.1 percent over the €617.7 million recorded for the same period in the previous year. The increase was largely due to a 66.4 percent increase in sales revenues in the Fastening Systems business unit.
As expected, orders received for the reporting period fell below the previous year’s high figure at €667.3 million (previous year: €717.8 million). Vossloh anticipates a high number of orders received for the final quarter of 2021, including for rail fastening systems for new high-speed routes in China. The Executive Board expects the orders received figure for 2021 to be similar to the anticipated sales revenues. Moreover, in the first nine months of the year, Vossloh signed a number of framework agreements with partners including Norwegian rail operator Bane NOR, Brussels-based transport company STIB, Dutch operator Pro Rail BV and the Australian state-owned company ARTC. Framework agreements are only included in orders received when the customer actually calls off the agreed deliveries. In October, Vossloh concluded a framework agreement for the delivery of concrete ties with Australian state-owned rail company Queensland Rail.
Continued significant increase in operational profitability despite rising material prices
EBIT went up to €62.2 million, a significant 14.0 percent year-on-year increase (previous year: €54.5 million). The previous year’s figure includes a positive book effect of €15.6 million related to the transitional consolidation of a Chinese joint venture. Excluding this book effect, the increase in EBIT margin to 8.9 percent in the current fiscal year is even more impressive. Despite the one-time book effect in the previous year, EBITDA grew significantly from €91.7 million in the previous year to €100.8 million. The EBITDA margin was 14.4 percent and also improved significantly after factoring out the effect described above. Despite substantial burdens from sharply increased material prices, earnings and profitability improved significantly on an operational basis, in part due to the company’s extraordinarily strong performance in China. As a result of the strong business performance, net income came to €33.8 million, a noticeable increase compared to the previous year’s figure of €9.1 million. Earnings per share have almost tripled from €0.45 to €1.30.
The Vossloh Group’s financial position also continued to improve. The equity ratio went up considerably to
45.5 percent on the reporting date of September 30, 2021 (previous year: 32.8 percent). Net financial debt continued to reduce noticeably to €231.7 million at the end of the reporting period, compared to €406.6 million as of September 30, 2020. These changes were driven by the positive free cash flow in Vossloh’s core business, which totaled around €66 million over the past twelve months, and especially the successful placement of a hybrid note totaling around €150 million in February 2021. The hybrid note is recognized as equity in accordance with IFRS. This decrease was partly offset by dividend, lease and interest payments as well as the payment for the acquisition of Dutch company ETS Spoor B.V on July 30, 2021.
“We are extremely satisfied with our performance in the first nine months of 2021. We significantly increased our sales revenues while greatly improving our operating profitability. This is impressive proof that by concentrating on our core competence of rail infrastructure and consistently implementing our comprehensive restructuring program, we are on the right track,” explains Oliver Schuster, CEO of Vossloh AG. “Thanks to the Vossloh Group’s comprehensive range of integrated products and services and solid financial position, we are in an excellent position. We feel very confident about the future. Though increased material prices will continue to have an impact on profitability over the coming months, our prospects over the medium to long term are outstanding. I am convinced that the future growth of rail-based mobility will have a positive impact on our business over the coming decades and will support profitable growth going forward.”
Sales revenues up by 31.3 percent in the Core Components division
Vossloh’s Core Components division increased its sales revenues in the first nine months of 2021 to €339.3 million (previous year: €258.4 million). This significant increase was driven by the Fastening Systems business unit’s improved business in China, largely as a result of deliveries delayed from the 2020 fiscal year to the current year due to the pandemic. The sales revenues of the business unit went up by a considerable €92.9 million in the 2021 reporting period to €232.7 million (previous year: €139.8 million). The revenues of the Tie Technologies business unit fell to €111.4 million due to decreased demand from Class I operators in the USA (previous year: €126.7 million). Orders received by the Core Components division came to €276.7 million in the first nine months of 2021 (previous year: €297.4 million). The order backlog came to €177.5 million on September 30, 2021. The expected decrease compared to the previous year’s figure (September 30, 2020: €311.7 million) was largely due to the planned reduction of the high order backlog in China, the USA and Australia. The Core Components division achieved an EBIT of €45.4 million in the first nine months of 2021 (previous year: €36.5 million). The EBIT margin decreased from
14.1 percent in the previous year to 13.4 percent. The EBIT margin went up considerably on an operational basis when adjusted for the one-time book effect in the previous year. Nevertheless, increasing material prices will continue to have a considerable impact on profitability over the next few months.
Customized Modules division records noticeable improvement in profitability
The Customized Modules division generated €292.6 million in sales revenues, a slight improvement compared to the previous year (€287.8 million). Higher sales revenues, particularly in Egypt, Australia and India, more than offset noticeable lower sales in France. Orders received came to €309.0 million in the first nine months of 2021, down on the previous year’s high figure of €342.6 million. The order backlog totaled €354.6 million at the end of the first nine months of 2021, exceeding the previous year’s figure of €327.9 million. EBIT went up to €23.7 million (previous year: €21.3 million). The EBIT margin rose to 8.1 percent (previous year: 7.4 percent).
Consistent performance from the Lifecycle Solutions division
The Lifecycle Solutions division generated sales revenues of €78.6 million in the first nine months of 2021, in line with the previous year’s performance (€79.0 million). Though rail and switch grinding sales revenues fell year on year as expected, the decline was mostly compensated for by higher earnings from machinery sales, stationary welding and logistics, in addition to still minimal initial sales contributions from the acquired Dutch company ETS. Orders received came to €96.5 million during the 2021 reporting period, a considerable rise compared to the previous year’s figure of €84.0 million. The order backlog of €26.7 million also exceeded the figure from the previous year (€15.5 million). The division’s EBIT fell from €7.2 million in the previous year to €4.1 million. Correspondingly, the same was true for the EBIT margin, which went down from 9.1 percent to 5.2 percent for the first nine months of this year. However, significant sales revenues and earnings contributions are expected in the final quarter of 2021.
In the first nine months of 2021, the average number of employees in the Vossloh Group was 3,587 (previous year: 3,486). The increase in the workforce was largely due to the full consolidation of an Indian company in the Customized Modules division.
Raised half-year guidance confirmed for full year 2021
From today’s perspective, Vossloh expects to generate sales revenues of between €900 and €950 million in the current fiscal year. In terms of profitability, Vossloh continues to forecast an EBITDA margin of 13 percent to
14 percent and an EBIT margin of 7 percent to 8 percent for the 2021 fiscal year. Despite significant burdens from substantially increased material prices in the second half of 2021, Vossloh is in a position to noticeably improve its operating profitability year on year.
|Orders received||€ million||667.3||717.8|
|Order backlog as of 9/30||€ million||554.9||654.5|
|Sales revenues||€ million||698.4||617.7|
|Net income||€ million||33.8||9.1|
|Earnings per share||€||1.30||0.45|
|Value added||€ million||15.2||9.1|
|Net financial debt as of 9/30||€ million||231.7||406.6|
|Equity ratio as of 9/30||%||45.5||32.8|
Vossloh is a globally active technology group dedicated for over 135 years to quality, safety, reliability, innovation and customer orientation. Vossloh’s comprehensive range of rail track-related products and services make the company a leader in the global market in this area. Vossloh provides a uniquely wide 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 lifecycle of rails and turnouts. Vossloh uses its extensive understanding of rail infrastructure to meet the key customer need of track availability.
Vossloh products are in use in more than 85 countries. With roughly 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 corporate management and climate protection and makes an important contribution to sustainable mobility of passengers and goods with its products and services.
The Group activities are organized into the three divisions of Core Components, Customized Modules and Lifecycle Solutions. In the 2020 fiscal year, Vossloh achieved sales of about €870 million with approximately 3,500 employees.