Quarterly Report • Oct 26, 2023
Quarterly Report
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WERDOHL, OCTOBER 26, 2023
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.
VOSSLOH CONTINUES VERY STRONG BUSINESS PERFORMANCE IN Q3
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:
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
INNOVATIVE DIGITAL SOLUTIONS FOR THE FUTURE OF RAIL TRANSPORT
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
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 |
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
WORKING CAPITAL PROGRAM ESTABLISHED, NET FINANCIAL DEBT SIGNIFICANTLY REDUCED COMPARED WITH SEPTEMBER 30, 2022
| KEY GROUP INDICATORS | 1-9/2022 9/30/22 |
2022 12/31/22 |
1-9/2023 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 (average) |
% | 21.4 | 20.8 | 17.1 |
| 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 liabilities) |
€ mill. | 253.5 | 197.6 | 202.8 |
| Net financial debt | € mill. | 292.6 | 237.5 | 239.0 |
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
ORDER BACKLOG REMAINS WELL ABOVE HISTORICAL AVERAGE
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
SIGNIFICANT INCREASE IN SALES AND EBIT, EBIT MARGIN WELL INTO DOUBLE DIGITS
SALES AND VALUE ADDED AT A VERY HIGH LEVEL
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
SALES UP SIGNIFICANTLY, ESPECIALLY IN NORTH AMERICA; VALUE ADDED DOWN YEAR ON YEAR DUE TO HIGHER COST OF CAPITAL
| (1.0) | (1.5) | |
|---|---|---|
| 1-9/2022 | 1-9/2023 | |
| ORDERS | 1-9/2022 | |
| RECEIVED (in € mill.) |
1-9/2023 | 167.6 |
| ORDER | 9/30/2022 | 83.5 |
| BACKLOG (in € mill.) |
9/30/2023 | 99.3 |
STRONG SALES GROWTH, EBIT ALSO WITH INCREASES
SIGNIFICANTLY HIGHER SALES REVENUES ALONG WITH SLIGHTLY IMPROVED EBIT MARGIN
SALES REVENUES UP SIGNIFICANTLY, ESPECIALLY IN EUROPE, NORTH AMERICA, AND ASIA
OUTLOOK FOR THE CURRENT FINANCIAL YEAR 2023 RAISED ON OCTOBER 19
/ All divisions will contribute to the forecast sales growth. At Group level, sales growth is again expected to be in the double-digit percentage range.
/ The weighted average cost of capital before taxes (WACC) relevant for internal management was increased to 8.5 percent for the financial year 2023 (previous year: 7.0 percent) as a result of interest rate developments. Despite the increase, the value added is expected to rise noticeably in 2023.
/ A significant increase in EBIT is forecast for the financial year 2023. The expected increase is mainly attributable to the Core Components division. Based on the mean value of the sales forecast, the EBIT margin is expected to range between 7.8 percent and 8.3 percent.
HOW YOU CAN REACH US
/ March 2024 Annual Report 2023
/ April 2024 Interim statement as of March 31, 2024
/ May 2024 Annual General Meeting
Contact information for investors:
Contact information for the media:
| € mill. | 1 -9/2022 |
1 -9/2023 |
|---|---|---|
| Sales revenues | 756.2 | 925.9 |
| Cost of sales | (590.1) | (693.3) |
| General administrative and selling expenses | (117.2) | (151.3) |
| Allowances and write -ups of financial assets |
0.8 | (1.2) |
| Research and development costs | (5.9) | (7.5) |
| Other operating income | 13.6 | 12.7 |
| Other operating expense | (5.1) | (8.3) |
| Operating result | 52.3 | 77.0 |
| Income from investments in companies accounted for using the equity method | 2.6 | 5.6 |
| Other financial income | 0.1 | 0.6 |
| Other financial expense | 0.0 | (6.3) |
| Earnings before interest and taxes (EBIT) | 55.0 | 76.9 |
| Interest income | (0.1) | 1.7 |
| Interest expense and similar expense | (7.3) | (14.9) |
| Earnings before taxes (EBT) | 47,6 | 63,7 |
| Income taxes | (9.8) | (20.8) |
| Result from continuing operations | 37.8 | 42.9 |
| Result from discontinued operations | 1.0 | 1.0 |
| Net income | 38.8 | 43.9 |
| thereof attributable to shareholders of Vossloh AG | 28.4 | 29.4 |
| thereof attributable to hybrid capital investors | 4.5 | 4.5 |
| thereof attributable to noncontrolling interests | 5.9 | 10.0 |
| Earnings per share | ||
| Basic/diluted earnings per share (in €) | 1.62 | 1.68 |
| thereof attributable to continuing operations | 1.56 | 1.62 |
| thereof attributable to discontinued operations | 0.06 | 0.06 |
| Assets in € mill. | 9/30/2022 | 12/31/2022 | 9/30/2023 |
|---|---|---|---|
| Intangible assets | 352.7 | 345.0 | 345.1 |
| Property, plant, and equipment | 322.4 | 326.4 | 324.3 |
| Investment properties | 7.1 | 1.3 | 1.0 |
| Investments in companies accounted for using the equity method |
52.1 | 49.4 | 49.1 |
| Other noncurrent financial instruments | 8.8 | 13.7 | 12.0 |
| Other noncurrent assets | 3.2 | 1.5 | 1.5 |
| Deferred tax assets | 12.5 | 17.1 | 17.3 |
| Noncurrent assets | 758.8 | 754.4 | 750.3 |
| Inventories | 259.1 | 236.5 | 258.2 |
| Trade receivables | 272.4 | 228.0 | 248.5 |
| Contract assets | 11.1 | 1.4 | 4.3 |
| Income tax assets | 9.3 | 8.9 | 12.1 |
| Other current financial instruments | 19.9 | 15.5 | 13.7 |
| Other current assets | 37.7 | 28.9 | 41.3 |
| Short-term securities | 1.5 | 2.3 | 1.1 |
| Cash and cash equivalents | 64.7 | 76.8 | 66.7 |
| Current assets | 675.7 | 598.3 | 645.9 |
| Assets held for sale | - | 16.1 | 16.4 |
| Assets | 1,434.5 | 1,368.8 | 1,412.6 |
| Equity and liabilities in € mill. | 9/30/2022 | 12/31/2022 | 9/30/2023 |
|---|---|---|---|
| Capital stock | 49.9 | 49.9 | 49.9 |
| Additional paid-in capital | 190.5 | 190.4 | 190.5 |
| Retained earnings and net income | 185.7 | 199.0 | 219.5 |
| Hybrid capital | 148.2 | 148.3 | 148.3 |
| Accumulated other comprehensive income | 15.4 | 10.3 | (0.1) |
| Equity excluding noncontrolling interests | 589.7 | 597.9 | 608.1 |
| Noncontrolling interests | 35.3 | 27.2 | 28.2 |
| Equity | 625.0 | 625.1 | 636.3 |
| Pension provisions/provisions for other post-employment benefits |
35.1 | 21.9 | 22.5 |
| Other noncurrent provisions | 16.9 | 17.5 | 23.8 |
| Noncurrent financial liabilities | 308.7 | 267.4 | 166.3 |
| Noncurrent trade payables | 0.0 | 1.7 | 0.0 |
| Other noncurrent liabilities | 5.4 | 10.4 | 4.6 |
| Deferred tax liabilities | 7.9 | 9.4 | 9.3 |
| Noncurrent liabilities | 374.0 | 328.3 | 226.5 |
| Other current provisions | 56.7 | 52.7 | 65.7 |
| Current financial liabilities | 50.3 | 49.2 | 140.5 |
| Current trade payables | 162.7 | 167.3 | 178.1 |
| Current income tax liabilities | 7.8 | 9.8 | 14.2 |
| Other current liabilities | 158.0 | 126.6 | 141.8 |
| Current liabilities | 435.5 | 405.6 | 540.3 |
| Liabilities related to assets held for sale | - | 9.8 | 9.5 |
| Equity and liabilities | 1,434.5 | 1,368.8 | 1,412.6 |
| Core Components | Fastening Systems | Tie Technologies | Customized Modules | Lifecycle Solutions | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1-9/2022 | 1-9/2023 | 1-9/2022 | 1-9/2023 | 1-9/2022 | 1-9/2023 | 1-9/2022 | 1-9/2023 | 1-9/2022 | 1-9/2023 | ||
| Sales revenues | € mill. | 346.7 | 418.6 | 244.1 | 283.8 | 113.1 | 155.3 | 332.4 | 411.2 | 94.1 | 121.3 |
| EBITDA | € mill. | 47.9 | 77.7 | 37.3 | 42.2 | 14.6 | 17.8 | ||||
| EBITDA margin | % | 13.8 | 18.6 | 11.2 | 10.3 | 15.6 | 14.7 | ||||
| EBIT | € mill. | 31.1 | 57.3 | 26.2 | 28.1 | 5.2 | 7.4 | ||||
| EBIT margin | % | 9.0 | 13.7 | 7.9 | 6.8 | 5.6 | 6.1 | ||||
| Working capital (average) | € mill. | 122.6 | 104.3 | 74.5 | 78.2 | 22.6 | 33.0 | ||||
| Working capital intensity (average) | % | 26.5 | 18.7 | 16.8 | 14.3 | 18.1 | 20.4 | ||||
| Capital employed (average) | € mill. | 364.9 | 333.1 | 378.3 | 377.4 | 202.8 | 218.2 | ||||
| ROCE | % | 11.4 | 22.9 | 9.2 | 9.9 | 3.4 | 4.5 | ||||
| Value added | € mill. | 11.9 | 36.0 | 12.9 | 38.2 | (1.0) | (1.5) | 6.4 | 4.1 | (5.4) | (6.5) |
| Orders received | € mill. | 439.4 | 448.3 | 325.1 | 304.0 | 129.2 | 167.6 | 403.9 | 373.5 | 137.5 | 146.0 |
| Order backlog (reporting date 9/30) | € mill. | 311.8 | 295.3 | 235.8 | 202.3 | 83.5 | 99.3 | 455.4 | 437.3 | 55.9 | 58.1 |
| Capital expenditure | € mill. | 11.9 | 13.9 | 7.1 | 9.9 | 4.8 | 4.0 | 8.2 | 10.6 | 7.6 | 10.7 |
| Depreciation/amortization | € mill. | (16.9) | (20.4) | (7.9) | (9.8) | (9.0) | (10.6) | (11.1) | (14.0) | (9.4) | (10.5) |
| € mill. |
1-9/2022 | 1-9/2023 |
|---|---|---|
| Earnings before interest and taxes (EBIT) | 55.0 | 76.9 |
| EBIT from discontinued operations | 1.0 | 1.0 |
| Amortization/depreciation/impairment losses/reversal of impairment losses of noncurrent assets | 37.8 | 45.6 |
| Change in noncurrent provisions | 3.5 | 7.0 |
| Gross cash flow | 97.3 | 130.5 |
| Income taxes paid | (16.8) | (20.1) |
| Change in working capital | (82.9) | (22.0) |
| Other changes | (20.1) | (4.5) |
| Cash flow from operating activities | (22.5) | 83.9 |
| Investments in intangible assets and property, plant, and equipment |
(24.7) | (36.9) |
| Cash-effective dividends from companies accounted for using the equity-method |
0.7 | 1.0 |
| Free cash flow | (46.5) | 48.0 |
Reporting date Average Employees 9/30/2022 9/30/2023 1-9/2022 1-9/2023 Core Components 932 1,041 914 1,032 Customized Modules 2,247 2,289 2,240 2,281 Lifecycle Solutions 545 626 543 602 Vossloh AG 68 79 67 78 Group 3,792 4,035 3,764 3,993
SHARE PRICE PERFORMANCE, INFORMATION ON SHARE DATA, AND SHAREHOLDER STRUCTURE
| Information on the Vossloh share | ||||
|---|---|---|---|---|
| ISIN | DE0007667107 | |||
| Trading locations | Xetra, Tradegate, Düsseldorf, Frankfurt, Berlin, Hamburg, Hanover, Stuttgart, Munich |
|||
| Number of shares outstanding at 9/30/2023 | 17,564,180 | |||
| Share price (9/30/2023) | €39.50 | |||
| Price high/low January to September 2023 | €44.65 / €37.20 | |||
| Market capitalization (9/30/2023) | €693.8 mill. | |||
| Reuters code | VOSG.DE | |||
| Bloomberg code | VOS:GR |
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