07/30/2015

Vossloh's recovery continues as planned in Q2/2015


In the first six months of 2015, Vossloh Group sales grew by 11.0% to €694.7 million (previous year: €626.0 million). With increasing shares of sales, particularly in America and Africa, the share of non-European business increased in the current reporting period to 38.0% (previous year: 34.7%). Group earnings before interest and income taxes (EBIT) reached €19.0 million and increased significantly compared with the earnings adjusted for one-time items of €11.7 million in the first half of 2014. The development of sales and EBIT benefited from currency effects in the first half of 2015 compared to the first half of 2014. In the first six months of 2015, the Group’s orders received amounted to €602.9 million (previous year: €682.9 million). The vast majority of new business in the first half of the year was generated in the three core business areas. The order backlog of the Group on June 30, 2015 totaled €1.66 billion (previous year: €1.76 billion). Vossloh's business recovery thus also continued as planned in Q2/2015.

In the Core Components division, which currently includes the series product business with rail fastening systems, sales declined as expected in the first six months of 2015. This was due to noticeably decreasing volumes in several countries and to partially lower-margin projects. Revenues in the first half of 2015 totaled €133.0 million (previous year: €155.0 million). After six months, EBIT for Core Components amounted to €14.2 million (previous year, comparable: €26.7 million). The EBIT margin decreased to 10.7%; on a comparable basis it had been 17.2% in the previous year. Since the fall of 2014, Core Components has been focusing on strictly gearing its five international production sites to cost optimization and technology leadership. Orders received in the Core Components division increased in the first half of 2015 by 23.8% to €194.0 million.

The Customized Modules division, which combines the business with individualized infrastructure modules such as switches and control elements and monitoring systems, developed very positively in the first half of 2015. Due to high demand, mainly from the United States, Brazil and Sweden, Customized Modules achieved a significant sales increase of 14.5% to €253.1 million (previous year: €220.9 million). The adjusted EBIT improved by 59.2% to €15.5 million. After deducting the one-off items incurred last year, EBIT in the first half of 2014 had been €9.7 million. The EBIT margin of the division was 6.1% after the first six months of 2015 (previous year, comparable: 4.4%). At €281.0 million, the orders received of Customized Modules grew in comparison to the previous year's figure of €274.9 million.

In the Lifecycle Solutions division, which focuses on specialized services related to the maintenance of rails and switches, revenues in the first six months totaled €28.7 million. They thus still lagged slightly behind the previous year's figure of €30.7 million. EBIT was even as in the previous year (previous year, comparable: €0.5 million). Vossloh expects significant growth in the division in the second half of 2015. An initial three-year reference project with Deutsche Bahn represents groundbreaking success for the business model of Lifecycle Solutions because the division has assumed responsibility within this project for the rail and switch maintenance of defined sections of the rail connection between Leipzig and Dresden. This order supports the lifecycle approach of the division. It includes the independent planning and execution of rail processing for tracks and switches as well as documentation of the results. The orders received of Lifecycle Solutions increased slightly in the first half of 2015 to €35.2 million.

The Transportation division, which includes rail vehicles as well as vehicle components and corresponding services, was able to further increase the positive sales and earnings trend of Q1/2015. Due to positive sales development in the Rail Vehicles and Electrical Systems business units, revenues increased in the first six months of 2015 by 28.3% to €284.4 million (previous year: €221.6 million). EBIT amounted to €-3.4 million after six months. It thus improved significantly compared with the previous year's earnings adjusted for one-time items of €-18.1 million. In Q2/2015, the EBIT of the division returned to positive at €2.1 million after five loss-making quarters in succession. In addition, working continued on the aim of transferring all business units from Transportation to appropriate structures outside the Vossloh Group so that these activities can develop optimally. Here, Vossloh continues to see strong interest and is currently in discussions with potential investors from the industry, which is currently undergoing a consolidation process.
 
At the beginning of July 2015, two new orders were won by Vossloh Electrical Systems and by Vossloh Rail Vehicles, which together total approximately €50 million. Vossloh Rail Vehicles won a major order from the United Kingdom for locomotives of the EUROLIGHT family and, together with Vossloh Electrical Systems, was awarded a follow-up order from the city of Chemnitz for Citylink hybrid tram trains. In addition, the attractiveness of the Citylink light rail vehicles developed by the two divisions was recently underpinned by the fact that the NET 2012 trains of the Karlsruhe Transit Authority were approved by the German Railway Authority for unrestricted operation on regional rail lines.

Employees
On June 30, 2015, the Vossloh Group had a workforce of 5,787 employees. The number of employees has only changed marginally compared with the figure of 5,792 on the previous year's balance sheet date. The number of employees in Germany decreased slightly by 20 to 1,843, while the number of employees abroad increased slightly by 15 to 3,944 on June 30, 2015.

Outlook
Hans M. Schabert, CEO of Vossloh AG: "The transformation of Vossloh planned up to 2017 is taking place dynamically and consistently. Initial successes are already tangible after the first six months of 2015. We are also confident about the remaining months of the current financial year. We are going in the right general direction, and now need to fine-tune the current projects."

Based on the development of this second quarter, the Vossloh Group thus maintains its original forecast for 2015. The Executive Board continues to anticipate overall sales growth of between 3% and 4% for 2015. The Group's EBIT margin will be between 3% and 4% from the current perspective.

Overview of the most important key figures of Vossloh Group
Vossloh Group H1 2015 H1 2014 Δ % Q2 2015 Q2 2014 Δ %
Orders received € mill. 602.9 682.9 -11.7 336.4 226.4 48.6
Order backlog € mill. 1,659.0 1,763.9 -5.9 1,659.0 1,763.9 -5.9
Sales € mill. 694.7 626.0 11.0 374.9 331.8 13.0
EBIT € mill. 19.0 11.7* 62.3 18.0 4.9* -
EBIT margin % 2.7 1.9 - 4.8 1.5 -
ROCE % 4.9 -34.3 - 9.1 -71.3 -
Value added € mill. -19.4 -187.8 - -1.7 -173.2 -
Net profit, € mill. 4.8
 -151.0 - 5.8
 -152.6 -
thereof attributable to shareholders of Vossloh AG € mill. 1.6 -155.9 - 4.2 -155.4 -
Earnings per share € 0.12 -12.31 - 0.31 -11.67 -

Werdohl, July 30, 2015


Contact information for media:
Lucia Mathée, MATHEE GmbH
Phone: (+49-23 92) 52-608
Email: presse@ag.vossloh.com

Contact information for investors:
Lucia Mathée, MATHEE GmbH
Phone: (+49-23 92) 52-609
Email: investor.relations@ag.vossloh.com


Vossloh is a global player in the rail technology markets. The core business is rail infrastructure. In addition, the Group is active in the areas of rolling stock and electric buses. Since January 1, 2015, the Group activities are subdivided in the four divisions Core Components, Customized Modules, Lifecycle Solutions and Transportation. In financial year 2014, Vossloh generated sales of €1.32 billion with more than 5,700 employees.