Orders received and sales up when adjusted for portfolio effects, profitability significantly higher year on year
Vossloh AG published its figures for the 2020 fiscal year today. In a year marked by COVID-19, Vossloh can look back on a very successful 2020 fiscal year from an operational and strategic perspective, also due to the above-average stability of the rail infrastructure sector in times of crisis. Orders received came to €915.5 million in 2020, an increase of 5.6 percent compared to the previous year’s figure adjusted for portfolio effects of €866.7 million. The order backlog totaled €594.5 million at the end of 2020, 8.2 percent higher than the previous year’s figure of €549.2 million. Sales revenues went up slightly from portfolio-adjusted €861.5 million in the previous year to €869.7 million. Postponements of deliveries and services on the customer side amounted to around €90 million in the 2020 fiscal year due to the pandemic. EBIT came to €73.1 million in the 2020 fiscal year (adjusted figure for the previous year: €55.7 million). This corresponds to an EBIT margin of 8.4 percent (adjusted figure for the previous year: 6.1 percent). This exceeded the original expectations for the 2020 fiscal year and was at the upper end of the most recently forecast range of 7.5 percent to 8.5 percent. The EBITDA margin was 14.2 percent in 2020 (adjusted figure for the previous year: 11.5 percent), and thus even exceeded the most recently forecast range of 13 percent to 14 percent. The margin key figures include negative effects related to COVID-19 totaling around €25 million. These effects were only partially compensated for by an effect recognized in profit and loss of just under €16 million due to the transitional consolidation of a joint venture in China.
The Group’s net assets and financial position also improved noticeably. The equity ratio went up to 34.1 percent (previous year: 30.3 percent). Despite the impacts of the pandemic, free cash flow in the core business of rail infrastructure went up from €2.4 million in the previous year to €58.1 million in the year under review. This strong performance was the main factor that led to the reduction of net financial debt (excluding finance lease liabilities) from €321.3 million in the previous year to €307.4 million at the end of the 2020 fiscal year.
In addition to the positive operational business performance, the 2020 fiscal year was also very successful in strategic terms. Vossloh finished the transformation into a company focused exclusively on rail infrastructure with the sale of the Locomotives business unit completed at the end of May 2020. While the free cash flow in the 2020 fiscal year was still burdened by €54.1 million and earnings per share by €1.49 from discontinued operations, such effects will no longer apply in the future. Vossloh also used the 2020 fiscal year to update its corporate strategy. As a result, the existing business with products and services will be further strengthened through a wide range of measures. At the same time, digital-based business models including the corresponding maintenance services will be expanded on this strong basis and will become noticeably more important for Vossloh going forward.
“After years of realignment and restructuring, 2020 marks a major turning point in the history of our Group. Following the successful completion of Vossloh’s transformation, we can look to the future with confidence. It is time for us to join forces and expand our strong position in the rail infrastructure market. We used 2020 for the last fine-tuning of our corporate strategy,” explains Oliver Schuster, Chief Executive Officer of Vossloh AG. “The importance of rail systems is currently growing rapidly. Vossloh has the range of products and services it needs to not only benefit from the renaissance of rail transport in the digital age, but also be a driving force in this trend. With customer orientation, experience, innovative strength and a strong team. We make a significant contribution to climate protection and green mobility.”
Core Components division
Orders received totaled €349.6 million in 2020, down from the previous year’s high level of €382.0 million as expected. The decline was particularly attributable to major orders won in the previous year in the concrete ties business in Australia. The book-to-bill ratio was 0.93 in 2020. The order backlog amounted to €247.0 million at the end of 2020 (previous year: €267.6 million). In terms of sales, the division grew by 6.7 percent to €375.3 million (previous year: €351.7 million). The increase was due to significantly higher sales in the Tie Technologies business unit. In contrast, sales in the Fastening Systems business unit were down year on year due to the pandemic. The division’s EBIT was €51.6 million, well above the adjusted figure from the previous year of €39.3 million. The increase was largely due to the aforementioned €15.6 million effect recognized in profit and loss. This transpired in the course of the transitional consolidation of a joint venture in China, which had been established in the previous year in the Fastening Systems business unit. The EBIT margin of the division totaled 13.7 percent (previous year’s adjusted figure: 11.2 percent).
Customized Modules division
Orders received in the Customized Modules division went up significantly from a portfolio-adjusted figure of €396.7 million in the previous year to €472.6 million. The increase was largely due to higher orders received in Europe and Australia. The book-to-bill ratio was 1.18. The order backlog came to €338.4 million, 24.0 percent higher than in the previous year (€273.0 million). The division’s sales revenues came to €401.8 million, a slight decrease compared to the previous year’s figure adjusted for portfolio effects of €418.3 million. The temporary shutdowns of several production sites in the 2020 fiscal year due to the pandemic were particularly noticeable in France. In contrast, the division achieved higher sales in Israel, Poland and Croatia, among others. Despite the pandemic-related production shutdowns in spring, the division’s EBIT was €30.0 million in 2020, well above the adjusted figure from the previous year of €23.7 million. The earnings improvements were primarily driven by the positive effects from the 2019 performance program. Accordingly, the EBIT margin of 7.5 percent was also well above the previous year’s adjusted value of 5.0 percent.
Lifecycle Solutions division
The Lifecycle Solutions division posted an orders received figure of €103.5 million, in line with the previous year. The book-to-bill ratio was 1.00. At €10.2 million, the order backlog at the end of 2020 also stood roughly on a par with the previous year (€10.5 million). The Lifecycle Solutions division generated sales revenues totaling €103.8 million, down marginally on the revenues from the 2019 fiscal year (€106.0 million). Lower sales contributions from the sale of maintenance machines, mainly due to the pandemic, were largely offset by higher sales in the subsegments Stationary welding and Logistics. The division’s EBIT went up to €8.8 million, a significant rise compared to the adjusted EBIT of the previous year (€6.2 million). This performance resulted mainly from increased business activity in the Stationary welding and Logistics subsegments. In addition, operating improvements resulting from the performance program contributed to the EBIT increase. Accordingly, the EBIT margin of 8.4 percent was much higher than the previous year’s adjusted figure of 5.9 percent.
In 2020, Vossloh AG employed 3,482 employees on average, compared to 3,774 in the 2019 fiscal year. The 7.7 percent downturn is largely due to the performance program and the related divestments. Employees were added in the year under review, among others, due to the Chinese joint venture Anyang in the Fastening Systems business unit being fully consolidated for the first time.
Vossloh expects sales to see a slight upward trend in the 2021 fiscal year. Based on current knowledge, Vossloh assumes that it will be able to generate sales between €850 million and €925 million in 2021. In the Core Components division, Vossloh expects slightly higher sales overall. Stable sales developments are expected in each of the Customized Modules and Lifecycle Solutions divisions. Vossloh is expecting an EBITDA margin of between 13 and 14 percent. The EBIT margin is expected to be between 7 and 8 percent. Excluding the one-time effect of €15.6 million from the transitional consolidation of the joint venture in China in the 2020 fiscal year, the EBITDA margin and EBIT margin in the past fiscal year were 12.4 percent and 6.6 percent. Vossloh expects its operational profitability to improve significantly, with contributions coming from all divisions. The outlook assumes that there will not be any significant additional impact related to the COVID-19 pandemic.
The Executive Board and Supervisory Board of Vossloh AG intend to propose a dividend of €1.00 per share to the shareholders at the Annual General Meeting scheduled for May 19, 2021. This would correspond to a payout ratio of just over 40 percent of earnings per share from continuing operations.
|Orders received||€ million||915.5||866.71|
|Order backlog||€ million||594.5||549.2|
|Sales revenues||€ million||869.7||861.52|
|EBITDA (2019 adjusted)||€ million||123.1||105.5|
|EBITDA margin (2019 adjusted)||%||14.2||11.5|
|EBIT (2019 adjusted)||€ million||73.1||55.7|
|EBIT margin (2019 adjusted)||%||8.4||6.1|
|Net income||€ million||20.8||(136.8)|
|Earnings per share||€||0.98||(8.32)|
|of which from continuing operations||€||2.47||(4.13)|
|Value added||€ million||12.4||(105.4)|
1 The 2019 orders received figure does not include €71.5 million from the U.S. switch activities sold in the same year for comparability purposes.
2 The 2019 sales figure does not include €54.9 million from the U.S. switch activities sold in the same year for comparability purposes.
Werdohl, March 18, 2021
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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 switches. 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.