Dear shareholders, ladies and gentlemen,
As part of our reporting on the first quarter of 2021, we were able to look back in April of this year on the operationally strongest opening quarter in ten years. I am pleased to report to you today that this extremely encouraging performance of our business has continued into the second quarter of the current fiscal year. In the first half of 2021, we were able to generate total sales revenues of €462.6 million. Compared to the same period of the previous year, this represents a substantial increase of 17.7 percent, largely attributable to higher sales contributions from the rail fastening systems business. Despite a positive one-time effect in the same period of the previous year, EBIT increased significantly by 41.2 percent to €42.4 million. The Core Components division, with its Fastening Systems business unit and the Customized Modules division made a major contribution to these excellent half-year results. Positive effects from the restructuring of our infrastructure business initiated in 2019 have substantially supported this development. Last week, based on our current planning, we were also able to significantly raise our sales expectations for 2021, all while maintaining our high profitability. In view of the significant increase in material prices, most of which impacted our Core Components division, I believe the latter is particularly noteworthy and an indication of our strongly improved operating performance. For 2021, we now expect sales revenues in
the range of €900 million to €950 million with an unchanged EBIT margin of 7 to 8 percent.
Following the completion of the realignment of the Vossloh Group and the focus on the growth market of rail infrastructure, we are benefiting significantly from the increasing recognition by political decision- makers worldwide that moving traffic onto the rail network is an indispensable success factor in achieving climate targets. In addition to the topic of sustainability, other megatrends such as population growth, urbanization, globalization and, of course, digitalization are noticeably boosting our business. Against this backdrop, many countries around the world are currently launching comprehensive investment programs for rail as a mode of transport. These include the European Commission's Green Deal, which also declared 2021 the "European Year of Rail". As a result, we are observing increasing tendering activities on the part of our customers and are seeing demand pick up in large parts of the world. In the first six months of 2021, we recorded orders received of €459.4 million, roughly in line with the sharp year on year increase in sales revenues. At the same time, we succeeded in winning very important long-term framework agreements with a volume of well over €100 million that are not directly reflected in our orders received, but rather are recorded there step by step in line with the actual customer orders.
With the goal of increasing our financial flexibility, we were one of the first companies in Germany to place a sustainability-linked hybrid note with a volume of €150 million at the beginning of the year. This financial instrument creates the financial flexibility we need for the further implementation of our Group strategy.
In the short term, this will mainly involve strengthening our position in certain growth markets. In addition, we are also focusing on expanding our portfolio of products and services and on selected innovations.
In the reporting period, we have already achieved some important milestones in the implementation of our strategy. I would like to mention our major "Factory of the Future" project here. The halls at the Werdohl site have been completed, and automated and interlinked production is proceeding according to schedule. Falling unit costs coupled with significantly increased vertical integration will further improve our position in the fiercely contested market for rail fastening systems. In addition, we took a strategically important step in the highly innovative Dutch market with the acquisition of the company ETS Spoor B.V. In addition to strengthening our product business in this region, we see scalable potential here, in particular in the area of trendsetting maintenance models. Finally, together with my colleagues on the Executive Board, I am delighted that our Group-wide suggestion system "Fit4Future" has gotten off to a very successful start. From all divisions and regions, we are receiving suggestions from employees on how we can make Vossloh even more efficient and thus even more secure for the future.