Vossloh continues strong business development also in third quarter of 2023
The Vossloh Group successfully continues its course of profitable growth. Orders received in the nine-month period of 2023 totaled €945.5 million and were thus only marginally below the previous year's record figure of €962.0 million. The order backlog as of September 30, 2023 amounts to €782.0 million (previous year: €814.6 million). Group sales reach a new high of € 925.9 million during the 2023 reporting period, exceeding the previous year's figure of € 756.2 million by 22.4 percent. The significant increase in sales is attributable to all divisions, each of which achieved growth rates of more than 20 percent.
EBIT also developed extremely positively and totaled €76.9 million. The increase of €21.9 million compared with the previous year's figure of €55.0 million represents a significant rise of 39.9 percent. The EBIT margin increases by one percentage point to 8.3 percent.
Also noteworthy is the significant improvement in free cash flow, which increases from €(46.5) million in the previous year to €48.0 million in the period under review in 2023 despite higher capital expenditure year on year. In addition to the strong operating performance, this is primarily due to a significantly lower increase in working capital compared with the previous year.
"I am very pleased that we again achieved excellent results in the third quarter, some of which exceeded our own expectations. During the third quarter of 2023 we achieved important milestones in all divisions that further strengthen our excellent position in the growth market of rail infrastructure. These include, for example, a multi-year framework agreement with the Danish rail company 'Banedanmark' in the switches business, another major order for the supply of rail fastening systems in China, and an expansion of the cooperation with Deutsche Bahn in high speed grinding as part of preventive rail maintenance," says Oliver Schuster, CEO of Vossloh AG, adding: "We also made remarkable progress in the area of digitalization. Not only were we able to enter into further partnerships with renowned industry players, but we also recently gave the go-ahead for our cloud platform 'Vossloh connect'. There, customers will find a wide variety of digital solutions either developed by ourselves or by our partners that precisely address the most important challenges currently facing the rail industry."
Further improvements were also realized in the Vossloh Group's net assets and financial position. As of September 30, 2023, equity reached a level of €636.3 million (previous year reporting date: €625.0 million). The equity ratio improved by 1.4 percentage points to 45.0 percent. Net financial debt including lease liabilities drops significantly by €53.6 million compared with the figure at the end of the first nine months of 2022 to €239.0 million.
Core Components significantly increases sales, EBIT, and EBIT margin
Orders received by the Core Components division in the first nine months of 2023 totaled €448.3 million, up from €439.4 million a year earlier. Orders received by the Fastening Systems business unit came in at a strong €304.0 million, although the previous year's particularly high level of €325.1 million was not achieved. By contrast, the Tie Technologies business unit increased its orders received by a substantial €38.4 million to €167.6 million. The order backlog of the Core Components division as of September 30, 2023, amounts to €295.3 million and is thus only slightly below the previous year's figure of €311.8 million.
Sales revenues in the division reach €418.6 million in the reporting period, significantly exceeding the previous year's figure of €346.7 million. The increase of 20.7 percent was driven by both business units. Vossloh Fastening Systems contributes sales revenues of €283.8 million, thus exceeding the year-earlier €244.1 million, mainly due to higher sales in China, North America, and Germany. The Tie Technologies business unit achieves sales of €155.3 million during the reporting period, up from €113.1 million in the first nine months of 2022. The significant 37.3 percent increase is related to higher demand in Mexico, the USA, and Australia.
EBIT in the Core Components division improved significantly compared to the prior-year period, rising from €31.1 million to €57.3 million. The increase is mainly due to a higher-margin project mix. The EBIT margin also improved significantly, rising from 9.0 percent to 13.7 percent in this year's reporting period.
Customized Modules with very strong sales growth
Orders received in the Customized Modules division total €373.5 million, down from the previous year's high level of €403.9 million. The strong increase in orders received in Germany could not fully compensate for declining orders received in Poland, Southern Europe, and Egypt. At €437.3 million, the order backlog as of September 30, 2023, is slightly below the prior-year figure of €455.4 million. Sales revenues in the Customized Modules division rise to €411.2 million in the reporting period, up by 23.7 percent on the previous year's figure of €332.4 million. Higher sales revenues are generated in particular in Italy, Serbia, and Mexico. EBIT increases from €26.2 million in the previous year to €28.1 million. By contrast, the EBIT margin decreases from 7.9 percent to 6.8 percent as a result of charges arising from the write-down of an investment and project-related follow-up costs.
Lifecycle Solutions with higher sales revenues and rising profitability
Orders received by the Lifecycle Solutions division increase by 6.2 percent to €146.0 million in the first nine months of 2023 (previous year: €137.5 million). The order backlog improves from €55.9 million on September 30, 2022 to €58.1 million at the end of the reporting period. Sales revenues of the Lifecycle Solutions division rise sharply year on year from €94.1 million to €121.3 million. For instance, this is due to higher sales contributions from a framework agreement on preventive rail maintenance (High Speed Grinding) between Deutsche Bahn and the Track Supply unit. The division's EBIT also improves, reaching €7.4 million compared with €5.2 million a year earlier. The EBIT margin increases slightly from 5.6 percent to 6.1 percent in the current reporting period.
As of September 30, 2023, the Vossloh Group employed 4,035 people worldwide. The number of employees has thus risen by 243 or 6.4 percent in the past twelve months.
Outlook for the current financial year 2023
On October 19, Vossloh AG raised its sales and earnings guidance. From today's perspective, the Company expects to generate sales revenues of between €1.175 billion and €1.225 billion in the current financial year. Most recently, the guidance was for sales revenues in a corridor between €1.125 billion and €1.2 billion. EBIT is also expected to be significantly higher than previously forecast. For the current financial year, the company now expects earnings before interest and taxes of between €94 million and €100 million, compared with a previous forecast of between €87 million and €94 million. Based on the mean value of the updated sales guidance, the EBIT margin range for the financial year 2023 is now between 7.8 percent and 8.3 percent (previously between 7.5 percent and 8.1 percent).
|Order backlog as of 9/30
|Earnings per share
|Net financial debt (including leasing) as of 9/30
|Equity ratio as of 9/30
Vossloh is a global technology group which for around 140 years has stood for 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 under one roof: Rail fastening systems, concrete sleepers, 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.