Vossloh AG published its annual report for the 2017 fiscal year today. The targets set at the beginning of the year were met in total, and key performance indicators were also exceeded. Group sales increased by a sizable 11.7 percent to €918.3 million. The sales increase was primarily attributable to the initial consolidation of the Tie Technologies business unit. The original guidance for the sales of the Vossloh Group was in the range of €1.0 billion to €1.1 billion. This guidance included sales in the amount of approximately €130 million relating to the Transportation division, which meanwhile has been classified as discontinued operations.
The Vossloh Group achieved earnings before interest and taxes (EBIT) totaling €70.3 million in the 2017 fiscal year. This exceeded the previous year’s comparable figure of €57.5 million by 22.2 percent thanks to the extraordinarily good business development in the Core Components division. Profitability in the core business increased in comparison with original expectations. The EBIT margin for 2017 totaled 7.7 percent in 2017 (previous year: 7.0 percent).
At €11.1 million in 2017, the Vossloh Group is able to report positive value added for the first time since the start of its realignment (previous year: €(1.5) million). This is due to the positive business development in the Fastening Systems business unit. However, at €0.3 million, Vossloh’s net income in 2017 fell short of the previous year’s figure of €10.1 million in spite of the clear increase in operating earnings. The decline was primarily attributable to the result from discontinued operations, which was burdened by an impairment of approximately €26 million and also by the net loss recorded for the Transportation division. The result from discontinued operations came to €(35.8) million in 2017. The share of net income attributable to the shareholders of Vossloh AG was negative in 2017. As such, earnings per share were negative, too, at €(0.50) (previous year: €0.22). The earnings per share attributable to continuing operations were positive at €1.74 and well above the previous year’s figure of €1.30.
Based on the clear improvement in profitability within the core business and in view of the continued stabilization of the financial position, the Executive Board and the Supervisory Board of Vossloh AG have resolved to propose a dividend payment in the amount of €1.00 per Vossloh share at the 2018 Annual General Meeting. The total amount of the proposed distribution will therefore be around €16 million.
CEO of Vossloh AG, Andreas Busemann, comments: “Our core business developed exceptionally well in 2017. Our entry into the concrete ties business was remarkably successful and we anticipate that we will be able to sell the locomotive business based in Kiel in the course of the 2018 fiscal year. After the tough cuts seen in recent years, our shareholders now being able to participate in the Company’s success serves as a clear and indicative sign of the progress we have made and will continue to make.”
The Group’s sales and earnings in the 2017 fiscal year were driven primarily by the Core Components division, with the long-standing Fastening Systems business unit and the new Tie Technologies business unit. The division’s sales increased by 36.7 percent year-on-year to €351.4 million (previous year: €257.1 million). This increase was especially attributable to the initial consolidation of Vossloh Tie Technologies, together with significantly higher sales for Vossloh Fastening Systems. In particular, business with fastening systems in China developed much better than expected, particularly as some of the customers there even requested deliveries originally scheduled for 2018. As a result, there was a considerable improvement in the division’s EBIT of 59.8 percent to €51.2 million (previous year: €32.0 million). The EBIT margin of 14.6 percent was also well above the previous year’s margin of 12.5 percent. Vossloh Tie Technologies likewise played a part in the improvement of earnings –earnings contribution was well above expectations.
Revenues in the Customized Modules division fell marginally year-on-year in 2017 to €483.3 million (previous year: €492.3 million). As expected, the high sales achieved in 2016 with switch systems in France could not be replicated in the year under review. Furthermore, business with major U.S. freight operators remained weak in 2017. With an EBIT of €30.5 million in 2017 compared with €34.4 million in the previous year, the division’s EBIT margin fell from 7.0 percent to 6.3 percent.
The Lifecycle Solutions division recorded another significant increase in sales in the fiscal year under review, posting an increase of 9.0 percent to €91.0 million (previous year: €83.5 million). Higher sales were particularly achieved in China in the preventive rail maintenance segment with the sale of vehicles. Additional sales were also realized in Switzerland. As such, the division generated 43.7 percent of its sales outside of Germany. EBIT totaled €6.6 million in 2017, compared with €7.7 million in the previous year. Since the EBIT for the 2016 fiscal year was boosted by a positive one-time effect, on a comparable basis it was possible to achieve an increase in results in the fiscal year 2017.
The average number of people employed by the Vossloh Group in the last fiscal year was 3,934, compared with 3,682 in the previous year. The increase is mainly attributable to the initial consolidation of the Tie Technologies business unit, which was acquired at the start of 2017.
For 2018, the Vossloh Group expects sales at the level of the 2017 fiscal year. EBIT and therefore the EBIT margin are expected to fall short of the 2017 figures. A key reason for this is the very strong development of business in our high-margin focus market, China, in 2017, which will have a partially negative impact on the following year as deliveries originally scheduled for 2018 were brought forward by our customers. These project-related fluctuations are likely to lead to temporarily weaker business performance in the current fiscal year. From today’s perspective, it will not be possible to fully compensate for this development despite the expectation of rising results in the Group’s other divisions. In sum, Group sales between €875 million and €950 million, as well as an EBIT margin between 6.0 percent and 7.0 percent, are expected in 2018. In 2019, an increase in the business activities of the Fastening Systems business unit in China and a tangible revival in demand from major U.S. freight operators are expected – therefore driving a corresponding improvement in profitability.
With the Group’s realignment now in the very advanced stages, Vossloh’s focus in the next few years is on promoting sustainably profitable, organic growth and on specifically seeking out suitable acquisitions and cooperation partners. Based on the ever greater possibilities offered by digitization, Vossloh, as the provider of numerous rail infrastructure components and maintenance services, is set to predict how the state of the infrastructure will develop, and with preventive and condition-based maintenance significantly increase track availability and extend the life cycle of the rail infrastructure, while also reducing the costs for the customers. “The Smart Rail Track by Vossloh” is our vision of cost-effective and customized rail infrastructure management.
|Orders received||€ million||867.2||829.7|
|Order backlog||€ million||474.4||490.7|
|Sales revenues||€ million||918.3||822.5|
|Value added||€ million||11.1||(1.5)|
|Net income||€ million||0.3||10.1|
|Earnings per share||€||(0.50)||0.22|
|Earnings per share from continuing operations||€||1.74||1.30|
* Prior-year figures adjusted due to the treatment of the Transportation division as discontinued operations.
Werdohl, March 22, 2018
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Dr. Thomas Triska
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Vossloh is active in rail technology markets worldwide. The Company’s core business is rail infrastructure. The Group activities are organized into the three divisions of Core Components, Customized Modules and Lifecycle Solutions. In the 2017 fiscal year, Vossloh achieved sales of about €920 million with over 3,900 employees.