DGAP-News: Vossloh Aktiengesellschaft: Vossloh remains on growth track in the first half of 2022

Vossloh remains on growth track in the first half of 2022 rising profitability expected in the second half of the year

• Orders received (+50.9 percent year on year) and order backlog (+41.6 percent year on year) reach historic highs
• Sales revenues up 3.0 percent year on year to 476.4 million
• EBIT of 28.9 million despite enormous rise in procurement prices; significant increase expected over the course of the rest of the year
• Outlook for the full year 2022 communicated in May has been confirmed

Werdohl, August 03, 2022. Vossloh, a long-established and world-leading supplier of rail infrastructure products and services, was able to seamlessly continue its successful start to the year in the second quarter of 2022. Orders received increased in all divisions in the second quarter of 2022. At 314.8 million, it significantly exceeded the figure for the quarter of the previous year by 115.4 million. Overall, orders received in the first half of 2022 totaled 693.0 million. This corresponds to a 50.9 percent increase over the previous years period (459.4 million) and marks a new record in Vosslohs history. The order backlog also developed extremely positive, reaching 827.9 million as of June 30, 2022, up 41.6 percent over the previous years level of 584.6 million. Two major orders from China and one from Egypt for rail fastening systems for the construction of new high-speed lines with a total volume of around 130 million contributed to the remarkable order situation. A framework agreement with a volume of around 90 million was also concluded with the state railway company ARTC in Australia for the delivery of concrete ties. This is one of the biggest infrastructure contract wins in the history of the company.

Group sales exceeded the high level of the previous year by 3.0 percent, reaching 476.4 million during the first six months of 2022. The increase was mainly due to higher sales in the Customized Modules division. While the Lifecycle Solutions division also achieved a noticeable increase in sales, revenues in the Core Components division remained below the high figure of the previous year. This was as expected since the same period of the previous year benefited from pandemic-related catch-up effects from 2020.

The Vossloh Groups EBIT reached 28.9 million in the reporting period. The EBIT margin was 6.1 percent following 9.2 percent in the previous year. Compared with the previous year, earnings were affected in particular by significantly higher procurement prices for materials and energy. In addition, the first half of 2021 was characterized by particularly strong business in rail fastening systems in China. In the current year, the focus of the corresponding deliveries is on the second half of the year.

The Vossloh Groups net assets and financial position remain strong. On the reporting date of June 30, 2022, equity amounted to 596.0 million. The increase compared with the end of 2021 is mainly due to the net income of 17.3 million. The equity ratio also remained at a high level of 43.4 percent at the end of the first half of the year. The Vossloh Groups net financial debt including lease liabilities increased by 39.9 million compared to the figure at the end of the first half of 2021, reaching 281.2 million. The primary driver of this development was an increase in working capital against the backdrop of higher procurement prices and stockpiling of materials to prevent supply bottlenecks. A noticeable decrease in net financial debt is expected by the end of the year.

Despite the challenging conditions, we succeeded in generating extremely respectable half-year results. Our outstanding order situation reflects Vosslohs excellent position in the future-oriented rail infrastructure market. Our customers appreciate Vossloh for the quality of its products and services as well as its unique understanding of the rail track, says Oliver Schuster, CEO of Vossloh AG, adding: Due to our very good and close relationships that span decades, most of our contractual partners are cooperative when it comes to the issue of fairly distributing the burden from rising material and energy prices. Despite the difficult economic situation, we expect a significant increase in earnings contributions in the second half of the current fiscal year compared to both the previous year and the first half of 2022. Notwithstanding the current special situation, the market for rail infrastructure will grow steadily over the coming decades in the course of the inevitable shift from traffic to rail, and Vossloh will profit substantially from this.

Core Components division reports orders at record levels

At 359.8 million, orders received in the Core Components division in the first half of 2022 was significantly higher than the result for the previous years period of 201.7 million. The enormous increase was primarily due to significant higher orders received in the Fastening Systems business unit. The volume of new orders more than doubled from 125.0 million in the first half of 2021 to 274.1 million. In the divisions second business unit, Tie Technologies, orders received increased from 76.9 million in the previous year to 94.6 million. As of June 30, 2022, the order backlog of the Core Components division amounted to 367.6 million, which is significantly higher than the previous year (June 30, 2021: 212.6 million). Sales revenues of the division reached 212.9 million in the reporting period, thereby falling short of the previous years level of 230.4 million. Sales revenues in the Fastening Systems business unit fell slightly year on year to 148.9 million (previous year: 156.4 million). Lower revenues in the Chinese market, which had benefited from catch-up effects from the Covid-19 pandemic in the same period last year, could not be fully offset. Sales in the Tie Technologies business unit amounted to 67.4 million (previous year: 77.2 million) due to lower project-related sales in the USA and Australia. In the first six months of the current year, the Core Components divisions EBIT of 17.3 million was significantly below the previous years level of 35.2 million. In addition to drastically higher material and energy prices, this was mainly due to exceptionally strong business in China in the Fastening Systems business unit in the previous year as a result of pandemic-related catch-up effects. The EBIT margin totaled 8.1 percent (previous year: 15.3 percent).

Customized Modules division increases orders received, sales and EBIT

Orders received in the Customized Modules division increased by 36.7 percent compared with the previous year, reaching 267.0 million (previous year: 195.3 million). At 435.2 million, the order backlog as of June 30, 2022, also significantly exceeded the previous years level (341.4 million). Sales revenues in the Customized Modules division grew by 12.3 percent to 216.0 million during the reporting period (previous year: 192.3 million). Sales revenue growth was particularly strong in Sweden, France and the Netherlands. EBIT rose to 15.2 million (previous year: 14.6 million) despite the impact of higher material and energy prices. This was made possible in particular by higher earnings contributions in France, Australia and Sweden. Due to higher procurement costs, the EBIT margin was 7.0 percent, slightly below the previous years figure of 7.6 percent.

Lifecycle Solutions division with higher sales revenues and EBIT-margin

Orders received in the Lifecycle Solutions division of 78.8 million in the first half of 2022 significantly exceeded the previous years figure of 71.1 million. As of June 30, 2022, the order backlog of 35.1 million was also significantly higher than the 32.4 million on the previous years reporting date. Sales of the Lifecycle Solutions division amounted to 56.5 million and increased significantly compared with the previous year (47.8 million). This was mainly due to the sales revenue contributions of the Dutch company Vossloh ETS, which was acquired in July 2021. This was partly offset by lower revenues from the sale of maintenance machines. The divisions EBIT of 1.6 million was above the previous years level of 1.1 million. The EBIT margin was 2.8 percent in the first half of 2022, up from 2.2 percent in the previous years period.

Employees

As of June 30, 2022, the Vossloh Group had 3,762 employees worldwide. The number of employees thus increased by 186, or 5.2 percent, in the past twelve months. The increase is mainly due to a company in Portugal in the Customized Modules division, which was fully consolidated for the first time in the final quarter of 2021.

Outlook for 2022

Vossloh AG made a slight adjustment to its original sales revenues and earnings forecast in May 2022. From todays perspective, the company expects to achieve sales revenues of between 0.95 billion and 1.05 billion in the current fiscal year. The expected increase in sales revenues is partly due to higher procurement prices for materials and energy being partially passed on to customers. However, this sales revenues do not generate additional EBIT and, in conjunction with cost increases that are not fully passed on or are passed on with a time lag, the Groups profitability will be impaired. Vossloh thus expects an EBITDA margin of 11.5 percent to 13.5 percent and an EBIT margin between 6 percent and 8 percent. The forecast corridor of two percentage points takes into account the uncertainties due to the ongoing war in Ukraine and the further development of the Covid-19 pandemic as well as the resulting impacts on procurement markets.

Contact details for the media:
Andreas Friedemann (Kirchhoff Consult AG)
Phone: +49 (0) 2392 52-608
E-mail: Presse@vossloh.com

Contact details for investors:
Dr. Daniel Gavranovic
Phone: +49 (0) 2392 52-609
E-Mail: Investor.relations@vossloh.com

Vossloh is a global technology group that has stood for quality, safety, customer orientation, reliability and innovative strength for over 135 years. With its comprehensive range of rail-related products and services, Vossloh is one of the world market leaders in this sector. Vossloh offers a uniquely broad range of services under one roof: Rail fastening systems, concrete sleepers, switch systems and crossings as well as innovative and increasingly digital-based services for the entire life cycle of rails and switches. Vossloh uses its systemic understanding of the track to address the central customer need of "availability of the rail track".

Vossloh products are in use in more than 85 countries. With some 80 group companies in around 30 countries and over 35 production locations, Vossloh is active on the ground worldwide. Vossloh is committed to sustainable corporate governance and climate protection and with its products and services makes an important contribution to the sustainable mobility of people and goods.

The Group's activities are divided into three divisions: Core Components, Customized Modules and Lifecycle Solutions. In fiscal 2021, Vossloh generated sales of 942.8 million with around 3,600 employees.

Vossloh AG Vosslohstrasse 4 58791 Werdohl, Germany Telephone +49 (0) 239 252-0 Fax +49 (0) 239 252-538 www.vossloh.com
Company headquarters: Werdohl, Germany Commercial register: Local court of Iserlohn HRB 5292
Chairman of the Supervisory Board: Prof. Dr. Rüdiger Grube
Executive Board: Oliver Schuster (CEO) Dr. Thomas Triska Jan Furnivall