Vossloh : Quarterly Statement Q3/2023

QUARTERLY

AS OF SEPTEMBER

WERDOHL, OCTOBER

DISCLAIMER

NOTE

This presentation contains statements concerning the future business performance of the Vossloh Group that are based on assumptions and estimations from the Company management. If the assumptions that the projections are based on fail to occur, the actual results of the projected statements may differ substantially. Uncertainties include changes in the political, commercial, and economic climate, the actions of competitors, natural catastrophes, epidemics, legislative reforms, the effects of future case law, and fluctuations in exchange rates and interest rates. Vossloh and its Group companies, consultants, and representatives assume no responsibility for possible losses associated with the use of this presentation or its content. Vossloh assumes no obligation to update the forecast statements in this presentation.

The information contained in this presentation does not constitute an offer or an invitation to sell or buy Vossloh shares or the shares of other companies.

2

Quarterly Statement Q3/2023

VOSSLOH GROUP

VOSSLOH CONTINUES VERY STRONG BUSINESS PERFORMANCE IN Q3

ORDER SITUATION

BUSINESS DEVELOPMENT

GERMAN SUSTAINABILITY AWARD 2023

Orders received in Q3/2023 at €256.7 million (previous year: €269.0 million); orders received after nine months

second highest figure in company history

Major region specific orders received in Q3/2023:

• Germany: Framework agreement for preventive maintenance using High Speed Grinding extended with Deutsche Bahn
• China: another major order for rail fastening systems in the high-speed sector
• Denmark: Expansion of market share in Danish switch market through long-term framework agreement with state rail network operator Banedanmark

Sales in Q3/2023 of €325.3 million substantiates strong market environment, up by 16.3 percent year on year; sales after nine months reach record level of

€925.9 million in infrastructure business

EBIT in Q3/2023 at €27.6 million, noticeably above prior year; EBIT after nine months at a very pleasing €76.9 million

Free cash flow (FCF) in Q3/2023 at €10.5 million (previous year: €(4.5) million); FCF after nine months at a strong €48.0 million and significantly improved on previous year (€(46.5) million)

Sales and earnings guidance for 2023 raised (see ad hoc announcement of October 19, 2023); average value of current sales forecast approximately 15 percent above previous year; mean value of the new EBIT guidance around 24 percent up year on year

German Sustainability Award, Europe's most important award for ecological and social

commitment

Vossloh was selected from a large number of renowned companies and recognized with final participation as one of three pioneers in its industry for the transformation to more sustainability

Winners of the prestigious prize will be announced at the end of October 2023

3 Quarterly Statement Q3/2023

VOSSLOH GROUP

INNOVATIVE DIGITAL SOLUTIONS FOR THE FUTURE OF RAIL TRANSPORT

ACQUISITION	-	PARTNERSHIP WITH
TECHNOLOGY

Vossloh connect facilitates customers access to a variety of innovative digital solutions; all combined on one platform ("one-stop shop platform") for the safer, efficient, and sustainable operation of rail infrastructure

With the support of digital applications from both Vossloh and selected external partners, customers have the opportunity, for example, to monitor their infrastructure condition in real-time

Customers have access to their condition data via Vossloh connect and sophisticated algorithms derive tailored recommendations for action from this data

Vossloh connect can significantly reduce the risk of accidents and disruptions, cut costs for emergency repairs, and significantly extend the service life of rail infrastructure

Expansion of digital monitoring portfolio through acquisition of extensive camera-based technology

By means of optical and acoustic sensors, for instance information on wheel damage, brake pads, train and wagon numbers is recorded

RailWatch technology will provide crucial insights into wheel-rail contact, which significantly influences the condition of the track over time

In addition to further developing the existing monitoring technology, RailWatch team will also work on other digital Group projects across all business units

Predge is a Swedish data specialist focused on creating highly innovative solutions for predictive maintenance

Partnership focuses on switches, among the most technically complex and error-prone elements of the track, especially point machines

The goal is to develop a model that provides accurate failure predictions and thus valuable insights into impending failures

In the future, customers will be able to plan their maintenance activities more proactively, in greater detail and better, noticeably reduce the number of breakdowns, and thus significantly increase the availability of the track

4

Quarterly Statement Q3/2023

VOSSLOH GROUP

SALES AND EBIT SIGNIFICANTLY ABOVE PREVIOUS YEAR, CONTINUED POSITIVE DEVELOPMENT IN FREE CASH FLOW

KEY GROUP INDICATORS	1-9/2022	1-9/2023
Sales revenues	€ mill.		756.2			925.9
EBITDA / EBITDA margin	€ mill. / %	92.8 /	12.3	122.2	/	13.2
EBIT / EBIT margin	€ mill. / %	55.0 /	7.3	76.9	/	8.3
Net income	€ mill.		38.8			43.9
Earnings per share	€		1.62			1.68
Free cash flow	€ mill.		(46.5)			48.0
Capital expenditure	€ mill.		29.7			38.9
Value added	€ mill.		5.2			17.2

NOTES

Sales revenues up by 22.4 percent; all divisions achieve sales growth rates above 20 percent, strongest percentage growth at Lifecycle Solutions

EBIT significantly higher year on year, all divisions contributing to increase, Core Components in particular significantly higher year on year; EBIT margin up by 100 basis points

Net income up year on year due to strong operating earnings performance despite higher interest and tax expense; tax rate in previous year positively affected by write-up of deferred tax assets

Free cash flow also reflects positive performance and is significantly higher than a year earlier; increase mainly due to improved EBIT and significantly lower working capital build-up

Capital expenditure significantly higher year on year mainly due to high increase in Q3/2023; all divisions increase capital expenditure year on year

Value added mainly due to strong EBIT development despite higher cost of capital (8.5 percent vs. 7.0 percent in previous year) significantly higher than previous year

5

Quarterly Statement Q3/2023

VOSSLOH GROUP

WORKING CAPITAL PROGRAM ESTABLISHED, NET FINANCIAL DEBT SIGNIFICANTLY REDUCED COMPARED WITH SEPTEMBER 30, 2022

KEY GROUP INDICATORS	1-9/2022	2022	1-9/2023
9/30/22	12/31/22	9/30/23
Equity	€ mill.	625.0	625.1	636.3
Equity ratio	%	43.6	45.7	45.0
Working capital (average)	€ mill.	215.7	218.1	211.5
Working capital intensity	%	21.4	20.8	17.1
(average)
Closing working capital	€ mill.	258.7	191.6	213.5
Capital employed (average)	€ mill.	947.3	950.6	936.3
Closing capital employed	€ mill.	997.6	923.2	940.4
Net financial debt (excl. lease	€ mill.	253.5	197.6	202.8
liabilities)
Net financial debt	€ mill.	292.6	237.5	239.0

NOTES

Equity significantly increased compared with end of Q3/2022; equity ratio remains at high level

Closing working capital around €45 million below comparative figure at end of

Q3/2022 despite significant sales growth; working capital intensity (average) well below 20% mark and noticeably improved year on year; project to sustainably reduce working capital launched in Q2/2023

Closing capital employed noticeably lower than at the reporting date of the prior-year period due to significantly lower working capital despite higher capital expenditure

Net financial debt incl. lease liabilities down by €53.6 million compared with

end of Q3/2022; dividend, lease, and interest payments significantly exceeded by positive free cash flow of €122.4 million in the past 12 months

6

Quarterly Statement Q3/2023

VOSSLOH GROUP

ORDER BACKLOG REMAINS WELL ABOVE HISTORICAL AVERAGE

ORDERS RECEIVED (in € mill.)		ORDER BACKLOG (in € mill.)
	962.0	945.5
137.5
146.0	814.6	782.0
			55.9	58.1
403.9	373.5
			455.4	437.3

439.4	448.3
	311.8	295.3

1-9/2022	1-9/2023	09/30/2022	9/30/2023
		Core Components		Customized Modules		Lifecycle Solutions

7 Quarterly Statement Q3/2023

NOTES

Orders received reach second-highest level in a nine-month period in the company's history, slightly down from previous year's record figure; previous year boosted by major orders from Egypt; continuing positive trend, particularly in Western Europe

Order backlog 4.0 percent below previous year; Core Components down year on year, mainly lower order backlog at Vossloh Fastening Systems as expected; Customized Modules slightly below previous year, for instance lower order backlog in Poland and Portugal; Lifecycle Solutions slightly up, higher order backlog in Germany and the Netherlands

CORE COMPONENTS DIVISION

SIGNIFICANT INCREASE IN SALES AND EBIT, EBIT MARGIN WELL INTO DOUBLE DIGITS

SALES REVENUES (in € mill.)

418.6

346.7

EBITDA (in € mill.)

EBITDA MARGIN (in %) EBIT (in € mill.)	EBIT MARGIN (in %)

1-9/2022

1-9/2023

	77.7
47.9
1-9/2022	1-9/2023

13.8	18.6
1-9/2022	1-9/2023

	57.3
31.1
1-9/2022	1-9/2023

9.013.7

1-9/20221-9/2023

Sales revenues up by 20.7 percent year on year; both Vossloh Fastening Systems and Vossloh Tie Technologies with high growth rates

ROCE

1-9/202211.4

EBIT after nine months significantly higher year on year; mainly due to significantly higher sales revenues and higher-margin project mix

(in %)

1-9/202322.9

	VALUE ADDED	1-9/2022	11.9
ROCE exceeds 20 percent mark; Value added tripled despite higher cost of capital due to
(in € mill.)
higher cost of capital rate	1-9/2023	36.0

8

Quarterly Statement Q3/2023

FASTENING SYSTEMS BUSINESS UNIT

SALES AND VALUE ADDED AT A VERY HIGH LEVEL

SALES REVENUES (in € mill.)

VALUE ADDED (in € mill.)

283.8

244.1

38.2

12.9

1-9/2022

1-9/2023

1-9/2022

1-9/2023

Orders received in prior year boosted by major order in Egypt worth approx. €40 million;

difference to prior year reduced by further order in China in Q3 compared with Q2

Sales growth mainly in China, North America, and Germany

Value added increased to almost a triple, mainly due to higher sales revenues and a better project mix, especially in China and at the German site

ORDERS	1-9/2022	325.1
RECEIVED
(in € mill.)	1-9/2023	304.0
ORDER	9/30/2022	235.8
BACKLOG	9/30/2023	202.3
(in € mill.)

9

Quarterly Statement Q3/2023

TIE TECHNOLOGIES BUSINESS UNIT

SALES UP SIGNIFICANTLY, ESPECIALLY IN NORTH AMERICA; VALUE ADDED DOWN YEAR ON YEAR DUE TO HIGHER COST OF CAPITAL

SALES REVENUES (in € mill.)

VALUE ADDED (in € mill.)

155.3

113.1

1-9/20221-9/2023

Orders received by 29.8 percent higher year on year; increase mainly due to strong project-related demand in Mexico

Sales up by 37.3 percent year on year, significant increase in sales in Mexico, plus higher sales also in the USA and Australia

(1.0)(1.5)

1-9/20221-9/2023

ORDERS	1-9/2022	129.2
RECEIVED
(in € mill.)	1-9/2023	167.6

Value added after nine months in reporting year lower than in previous year due to higher cost of capital; also impacted by high maintenance expenses at an Australian site and due to the write-down of a financial asset

ORDER	9/30/2022	83.5
BACKLOG	9/30/2023	99.3
(in € mill.)

10

Quarterly Statement Q3/2023