VOSSLOH AG 
By - Growth hiatus due to delays, especially in China
- Nine-months sales and EBIT down
- Transportation division with rising third-quarter sales
- Bulging group order books a solid launching pad for 2012
The Vossloh Group's growth rate has been held up in the first nine months of 2011. The main reason: project postponements in China. There were also delays in Russia. In addition, the suspension of construction work in Libya as well as shelved order placements in Southern Europe and Scandinavia encumbered business. These temporary, external factors meant that 3-quarter sales and EBIT were in 2011 down and hence short of expectations.
Up to the close of September, group sales totaled €863.8 million (down from €1,011.9 million), EBIT amounted to €67.9 million (down from €122.6 million). Third-quarter sales dropped year-on-year from €328.8 million to €302.4 million due to weaker-than-expected business in rail fasteners and switches. For the period July through September 2011, the Transportation division, however, reported a 7.9-percent sales rise to €102.6 million and thus turned the trend about.
"Our business prospects remain bright," stated Vossloh AG CEO Werner Andree, "for two main reasons: first, we are confident there will soon be an end to most of the project delays. Second, our order books are bulging and hence we can look to once again higher sales and earnings in the year ahead." At €1.4 billion, group order backlog remains very high and far above the €1.1 billion at September 30 a year ago.
For the first nine months of 2011, the EBIT margin amounted to 7.9 percent and ROCE to 11.3 percent. Group earnings reached €39.2 million, earnings per share (EpS) €2.95.
Rail Infrastructure
The Rail Infrastructure division generated 9-month sales of €573.9 million, down 14.6 percent. Its EBIT came to €68.3 million (down from €114.9 million). Besides the project delays, rising competitive and price pressure in Rail Infrastructure depressed sales and earnings.
For the nine months under review, the Fastening Systems business unit reported sales of €200.8 million (down from €284.3 million). The decrease was mainly due to project delays in China where expectations that construction work might resume in the third quarter, failed to materialize. Vossloh is now counting on work to restart not before February 2012. A contract award indicates that China still intends to continue with the extensive expansion of its rail network: In the third quarter, Vossloh again succeeded in winning a major order which comprises the shipment of rail fasteners worth around €35 million for the line Hefei to Fuzhou.
Three-quarter sales at the Switch Systems business unit totaled €308.7 million (down from €321.9 million). In the third quarter, its revenue rose 11.6 percent to €114.2 million. Nine-month sales at the Rail Services business unit climbed 3.1 percent to €68.9 million.
Transportation
For the period January through September, the Transportation division reported sales of €291.2 million (down from €339.6 million). In the third quarter, sales rose for the first time this year, by 7.9 percent to €102.6 million. At the end of September, orders on hand added up to €739.2 million, well above the year-earlier €548 million. "The improved Q3 sales and the year-on-year much taller order backlog indicate that this division is squarely back on track," stated Andree.
Three-quarter sales at Vossloh Transportation Systems reached €185.4 million (down from €223.8 million). The Kiel-based locomotive location raised its sales in the period by 10.8 percent to €76.8 million. At the Spanish location in Valencia, which builds locomotives and local transport rail vehicles, sales, as expected, fell to €108.6 million (down from €154.7 million). However, Q3 sales did rise, by almost one-third to €33.3 million. Given the higher order backlog at Valencia, 2012 is likewise expected to show continuing sales growth.
For the period up to the end of September, the Electrical Systems business unit reported sales of €110.0 million (down from €118.2 million). Order intake for the period more than doubled to €182.1 million.
Over 5,000 employees
At September 30, 2011, the Vossloh Group employed a worldwide workforce of 5,069 (year-on-year up from 4,937). In Germany, the end-September headcount was altogether 1,781 in 2011.
Prospects
Following an initial forecast adjustment announced on July 7, 2011, the Vossloh Group had to again adjust its sales and earnings expectations on September 29, 2011. Given a series of adverse external factors which worsened in the summer of 2011, the Group now expects for the fiscal year 2011 sales of around €1.2 billion and an EBIT ranging between €90 million and €100 million.
Key indicators at a glance
