Vossloh continues positive trend in Q2 2023
Vossloh Group has impressively continued its course of sustainable and profitable growth in the first half of 2023. Orders received in the first half of 2023 totaled €688.8 million and thus remain roughly at the level of the prior-year period of €693.0 million, the highest order intake within a six-month period in the entire history of the company. The order backlog reaches €859.4 million as of June 30, 2023, exceeding the prior-year figure of €827.9 million by 3.8 percent. Another major order for rail fastening systems for the construction of a new high-speed line in China with a total volume of almost €50 million, which Vossloh won in June 2023, also contributed to the increase.
Group sales in the first six months of 2023 reach a new half-year record of €600.6 million in the core business rail infrastructure, exceeding the previous year's level of €476.4 million by 26.1 percent. All divisions contributed significantly to the substantial increase in sales revenues.
Vossloh's EBIT builds on the positive development in the first quarter and rises sharply to €49.3 million in the first half of 2023. Compared to the prior-year figure of €28.9 million, this corresponds to an increase of 70.4 percent. The EBIT margin increases by 2.1 percentage points to 8.2 percent.
Particularly noteworthy is the significant improvement in free cash flow from €(42.0) million in the previous year to €37.5 million in the first half of 2023. In addition to the strong operating performance, the main influencing factors include a significant year-on-year improvement in working capital intensity. As a result, there is almost no seasonal increase in working capital during the first six months of the financial year. Vossloh's net financial debt including lease liabilities has therefore dropped significantly by €46.5 million to €234.7 million compared to the figure at the end of H1/2022.
"I am very pleased that in the second quarter we were again able to seamlessly build on the successful first quarter of 2023 and achieved excellent half-year results," says Oliver Schuster, CEO of Vossloh AG, adding: "Our customers around the world trust the products, services, and increasingly also digital solutions that we develop with our unique understanding of the rail track. We have earned this excellent position in the growth market of rail infrastructure and Vossloh will benefit considerably from its momentum in the years to come."
Core Components division significantly increases sales revenues and EBIT
Orders received by the Core Components division in the first half of 2023 totaled €350.5 million, only slightly below the previous year's record level of €359.8 million. Lower order volumes in the Fastening Systems business unit, €233.6 million in the first half of 2023 compared with €274.1 million a year earlier, can be almost offset by the Tie Technologies business unit. Orders received here rise from €94.6 million in the prior-year period to €133.7 million. The order backlog of the Core Components division as of June 30, 2023, amounts to €358.8 million and is thus slightly below the previous year's figure (June 30, 2022: €367.6 million). Sales revenues of the division, on the other hand, rise significantly in the first half of 2023, reaching €263.8 million compared to €212.9 million in the same period of the previous year. Sales revenues of the Fastening Systems business unit increase significantly to €186.1 million (previous year: €148.9 million). The main drivers here are higher project sales in China and Mexico as well as in Germany. Sales revenues in the Tie Technologies business unit increase from €67.4 million in the prior-year period to €92.1 million due to higher sales with Class I companies in the US and project-related higher sales in Mexico. EBIT in the Core Components division almost doubles year on year, rising from €17.3 million to €33.8 million. The increase is mainly due to a higher-margin project mix. The EBIT margin improved significantly from 8.1 percent to 12.8 percent in this year's reporting period.
Strong growth in Customized Modules division
Orders received in the Customized Modules division amounted to €268.2 million, roughly on a par with the previous year's high level of €267.0 million. By contrast, the order backlog as of June 30, 2023, of € 467.9 million is significantly higher than the previous year's figure of € 435.2 million. Sales revenues in the Customized Modules division reach a very high €276.8 million in the reporting period, up 28.1 percent on the previous year's figure of €216.0 million. Higher sales revenues were achieved in particular in Italy, Serbia and Sweden. EBIT increases from €15.2 million in the previous year to €22.0 million and is related to the higher earnings contributions from the sites in Luxembourg and Serbia. The EBIT margin increases accordingly from 7.0 percent to 7.9 percent.
Lifecycle Solutions division also reports growth in sales revenues and EBIT
Orders received by the Lifecycle Solutions division in the first half of 2023 totaled €87.8 million, exceeding the previous year's figure of €78.8 million. The order backlog also increases significantly from €35.1 million on June 30, 2022, to €44.9 million at the end of the reporting period. Sales revenues of the Lifecycle Solutions division increase significantly year on year from €56.5 million to €76.9 million. This was for instance due to high sales contributions from a framework agreement on preventive rail maintenance (high-speed grinding) with Deutsche Bahn. The division's EBIT improves noticeably to €4.1 million from €1.6 million a year earlier. The EBIT margin rises from 2.8 percent in the first half of 2022 to 5.4 percent in this year's reporting period.
As of June 30, 2023, the Vossloh Group employed 4,020 people worldwide. The number of employees has thus risen by 258 or 6.9 percent in the past twelve months.
Outlook for the current financial year 2023
On June 15, 2023, Vossloh AG raised its original sales revenues and earnings forecast of March 16, 2023. From today's perspective, the Company expects to be able to generate sales revenues of between €1.125 billion and €1.2 billion in the current financial year. The previous forecast was for sales revenues in a corridor between €1.05 billion and €1.15 billion. EBIT is also expected to be significantly higher than originally forecast. For the current financial year, the company now expects earnings before interest and taxes of between €87 million and €94 million, compared with a previous forecast of between €79 million and €88 million. Based on the mean value of the updated sales forecast, the EBIT margin range for the financial year 2023 is now between 7.5 percent and 8.1 percent. Previously, the expectation was between 7.2 percent and 8.0 percent.
|Orders received||€ mill.||688.8||693.0|
|Order backlog as of June 30||€ mill.||859.4||827.9|
|Sales revenues||€ mill.||600.6||476.4|
|Net income||€ mill.||29.4||17.3|
|Earnings per share||€||1.15||0.63|
|Value added||€ mill.||9.3||(3.7)|
|Net financial debt (including leasing) as of June 30||€ mill.||234.7||281.2|
|Equity ratio as of June 30||%||43.9||43.4|
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.