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    VOS   DE0007667107

VOSSLOH AG

(VOS)
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Vossloh : Very good development after nine months at Vossloh, profitability expectations for 2020 raised

10/29/2020 | 01:45am EST

In the first nine months of 2020, Vossloh achieved sales of €617.7 million. Adjusted for the revenues from U.S. switch activities, which in the meantime had been divested, sales in the previous year totaled €615.7 million (reported: €662.1 million). Sales in the order of €55 million, which were originally expected in the nine-month period, have been postponed into the future as a result of the COVID-19 pandemic. Following an extraordinarily strong third quarter, the EBIT after the first nine months of 2020 stands at €54.5 million (previous year adjusted: €31.9 million). This corresponds to a significantly improved EBIT margin of 8.8 percent (previous year adjusted: 4.8 percent). This figure includes the €15.6 million fair value adjustment recognized in profit and loss that was recognized in the first quarter as part of a business combination achieved in stages of a joint venture in China in the Fastening Systems business unit. After deducting this effect, an EBIT of around €39 million has been achieved. After three quarters, the EBIT reductions related to the COVID-19 pandemic are in the order of €15 million.

Orders received by the Vossloh Group amounted to €717.8 million and were higher than the previous year's figure of €703.0 million, which is adjusted for portfolio effects. This corresponds to a ratio of orders received to sales (book-to-bill ratio) of 1.16. The order backlog as of September 30, 2020 totaled €654.5 million and also surpassed the previous year's figure of €627.6 million adjusted for portfolio effects.

'Our business developed very well in the third quarter. Last year's program to increase efficiency is paying off more and more. The positive effects are clearly apparent in the figures,' says Oliver Schuster, CEO of Vossloh AG. 'The development of the current fiscal year to date underscores not least our above-average crisis stability. All in all, I'm quite confident that we are on a good path.'

Core Components division
In the Core Components division, orders received in the first nine months of 2020 totaled €297.4 million and were, as expected, somewhat lower than the previous year's high figure of €327.5 million. The decline was particularly attributable to major orders won in the previous year in the concrete ties business in Australia. In the third quarter of 2020, Vossloh recorded another major order worth more than €30 million in China in the Fastening Systems business unit. The overall book-to-bill ratio after nine months was 1.15. The order backlog thus reached €311.7 million as of September 30, 2020 (previous year: €320.6 million). In terms of sales, the Core Components division recorded growth of 5.8 percent to €258.4 million. Substantial sales growth in the Tie Technologies business unit, mainly in Australia, more than offset the slightly negative sales performance of the Fastening Systems business unit. Benefited from the effect of a business combination achieved in stages of the joint venture in China, EBIT saw a substantial increase from adjusted €25.8 million to €36.5 million compared with the previous year. As a result of the higher EBIT, an EBIT margin of 14.1 percent was achieved (previous year adjusted: 10.6 percent).

Customized Modules division
Orders received in the Customized Modules division in the first three quarters of 2020 totaled €342.6 million, compared with €309.5 million in the same period of the previous year adjusted for portfolio effects. The substantial growth is particularly attributable to new orders won in Egypt, Poland and the United Kingdom. The book-to-bill ratio was 1.19. The order backlog as of September 30, 2020 reached €327.9 million (previous year adjusted for portfolio effects: €293.7 million). Due mainly to the pandemic-related production shutdowns in France, sales of the Customized Modules division amounted to €287.8 million and were lower than the previous year's figure of €306.6 million after adjustments of portfolio effects (reported: €353.0 million). EBIT, on the other hand, increased significantly from an adjusted €13.4 million in the previous year to €21.3 million. This corresponds to an increase in the EBIT margin from an adjusted 3.8 percent in the previous year to 7.4 percent. The substantial increase is largely attributable to the operational improvements resulting from the performance program, which more than offset the adverse effects from the COVID-19 pandemic. Earnings also benefited slightly from a real estate sale in the third quarter.

Lifecycle Solutions division
The Lifecycle Solutions division received new orders totaling €84.0 million in the first three quarters of 2020, an increase of 6.5 percent compared to €78.8 million in the same period of the previous year. The book-to-bill ratio was 1.06. At the same time, the order backlog slightly increased from €14.9 million as of the end of the third quarter of 2019 to €15.5 million as of the end of September 2020. Sales slightly increased from €76.8 million to €79.0 million during the reporting period, driven by strong capacity utilization in logistics and stationary welding which more than compensated for decreased sales contributions from the sale of track maintenance vehicles. The Lifecycle Solutions division recorded significant gains in EBIT due to the high level of capacity utilization in stationary welding and logistics as well as the effects of the performance program. After nine months, EBIT for 2020 has nearly doubled to €7.2 million (previous year adjusted: €3.7 million). Accordingly, the EBIT margin improved from 4.8 percent to 9.1 percent compared to the same period of the previous year.

Employees
Under the performance program, which provided for a significant reduction in headcount, the number of employees at the Vossloh Group as of 9/30/2020 decreased by 326 to 3,491 compared to the previous year.

Outlook
Due to the strong earnings performance in the third quarter of 2020, the Vossloh Group has raised its guidance with regard to the EBIT and EBITDA margins. Vossloh now expects an EBIT margin of 7.5 to 8.5 percent (previously 7 to 8 percent) and an EBITDA margin of 13 to 14 percent (previously 12 to 13 percent) for the 2020 fiscal year. From the current perspective, the company expects sales revenues in the order of €870 million in the 2020 fiscal year. As already indicated at mid-year, this is slightly below the expectation, which was put into concrete terms at the lower end of the € 900 million to € 1 billion range as a result of the pandemic.

The current guidance assumes that there will be no further plant closures due to the corona pandemic in the remaining fiscal year 2020.

Disclaimer

Vossloh AG published this content on 22 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2020 06:44:00 UTC


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Sales 2021 930 M 1 052 M 1 052 M
Net income 2021 28,6 M 32,3 M 32,3 M
Net Debt 2021 277 M 313 M 313 M
P/E ratio 2021 26,4x
Yield 2021 2,30%
Capitalization 755 M 855 M 855 M
EV / Sales 2021 1,11x
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Nbr of Employees 3 581
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Number of Analysts 6
Last Close Price 43,00 €
Average target price 55,75 €
Spread / Average Target 29,7%
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Managers and Directors
Oliver Schuster Chief Executive Officer
Thomas Triska Chief Financial Officer
RŘdiger Grube Chairman-Supervisory Board
Jan Furnivall Chief Operating Officer
Ulrich M. Harnacke Deputy Chairman-Supervisory Board
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