Stable start for VTG, with focus on integration of 2011 acquisitions
22.05.2012
In the first quarter of 2012, the Hamburg wagon hire and rail logistics company VTG Aktiengesellschaft (WKN: VTG999) achieved a slight increase in revenue. Operating profit (EBITDA) at the end of the first quarter remained at the level of the previous year. Compared with the first quarter of 2011, revenue increased by 2.9 percent, from EUR 186.4 million to EUR 191.8 million. EBITDA amounted to EUR 41.1 million compared with EUR 41.2 million in the previous year. Operating cash flow rose by EUR 6.7 million to EUR 35.0 million.
“Despite subdued demand from customers in some areas, our revenue increased as a result of our acquisitions. This drop in demand was the result of the weak economic phase of the second half of 2011 reaching us now,” explains Dr. Heiko Fischer, CEO of VTG Aktiengesellschaft. “Internally, we have concentrated on integrating the acquisitions made in the past year. Our expansion in Russia and North America requires the integration of staff as well as the introduction of uniform processes. We expect continued moderate growth in the second half of the year,” adds Fischer.
Railcar Division: slight drop in capacity utilization
In the first three months of 2012, the Railcar Division generated revenue of EUR 77.9 million. This represents an increase of EUR 7.2 million, or 10.2 percent, on the previous year (EUR 70.7 million). This primarily is a result of acquisitions in Russia and North America in the last year. EBITDA amounted to EUR 38.7 million, an increase on the 2011 figure of EUR 37.9 million. The level of EBITDA was affected by increased costs from the integration of new acquisitions and new maintenance regulations. The EBITDA margin related to revenue was 49.6 percent (Q1 2011: 53.6 percent).
In the first three months of 2012, demand for wagons weakened, with the main decline in Europe. This led to a fall in capacity utilization in the first quarter, which reached a level of 90.6 percent on March 31, 2012. This figure was higher than the level for the equivalent period of 2011 (90.1 percent), but below the level at the end of 2011 (91.5 percent). A key factor in this was the insolvency of a customer from the mineral oil sector. This rendered a large number of wagons redundant, bringing capacity utilization down by 0.7 percentage points.
Rail Logistics Division: subdued start to the year
In the first quarter of 2012, revenue for the Rail Logistics Division fell by 2.2 percent from its 2011 level of EUR 77.0 million to EUR 75.3 million. EBITDA, at EUR 2.4 million, was also below the level of the previous year (EUR 3.3 million). The EBITDA margin on gross profit amounted to 36.2 percent (Q1 2011: 50.2 percent). One factor contributing to these developments was the costs of the strategic repositioning of the division in the product segments of agricultural goods, liquids and industrial goods. Customer insolvency also had a negative impact on business in the Rail Logistics Division. Other factors were declines in sales in the agricultural sector due to weather conditions, changed product flows and the fact that one-time items that positively impacted the figures in 2011 no longer apply.
Tank Container Logistics Division: demand satisfactory and at same level as 2011
Revenue in the Tank Container Logistics Division amounted to EUR 38.6 million, remaining at the level of the previous year (EUR 38.7 million). EBITDA decreased slightly to EUR 3.1 million compared with the 2011 figure of EUR 3.3 million. The EBITDA margin on gross profit also narrowed slightly to 48.5 percent (Q1 2011: 49.9 percent).
In the first quarter of 2012, Tank Container Logistics reported good demand, particularly regarding transport volumes, which were just below the level for the first quarter of 2011. The trend in intra-European and intra-Asian transports was particularly positive. While the prospects for growth for the global chemical industry are generally good, the market is highly competitive, with high costs for energy and raw materials, which squeezes the achievable margins.
Significant rise in number of employees
As of March 31, 2012, the VTG Group had 1,205 employees, an increase of 170 since the end of the first quarter of 2011. 816 employees were employed in Germany (Q1 2011: 720), of which 362 were based in Hamburg (Q1 2011: 333). 389 employees were in the companies abroad (Q1 2011: 315). The number of employees increased in all divisions.
Outlook for 2012
VTG is confident that, despite a slight decline in business in the first half of 2012, it will be able to achieve moderate growth overall in the year 2012. On the basis of the expected developments in the divisions and the current economic forecasts, the Executive Board of VTG AG reaffirms its forecast issued in February 2012 for the financial year 2012, predicting revenue of between EUR 760 and 780 million and EBITDA of between EUR 170 and 178 million.
“Despite subdued demand from customers in some areas, our revenue increased as a result of our acquisitions. This drop in demand was the result of the weak economic phase of the second half of 2011 reaching us now,” explains Dr. Heiko Fischer, CEO of VTG Aktiengesellschaft. “Internally, we have concentrated on integrating the acquisitions made in the past year. Our expansion in Russia and North America requires the integration of staff as well as the introduction of uniform processes. We expect continued moderate growth in the second half of the year,” adds Fischer.
Railcar Division: slight drop in capacity utilization
In the first three months of 2012, the Railcar Division generated revenue of EUR 77.9 million. This represents an increase of EUR 7.2 million, or 10.2 percent, on the previous year (EUR 70.7 million). This primarily is a result of acquisitions in Russia and North America in the last year. EBITDA amounted to EUR 38.7 million, an increase on the 2011 figure of EUR 37.9 million. The level of EBITDA was affected by increased costs from the integration of new acquisitions and new maintenance regulations. The EBITDA margin related to revenue was 49.6 percent (Q1 2011: 53.6 percent).
In the first three months of 2012, demand for wagons weakened, with the main decline in Europe. This led to a fall in capacity utilization in the first quarter, which reached a level of 90.6 percent on March 31, 2012. This figure was higher than the level for the equivalent period of 2011 (90.1 percent), but below the level at the end of 2011 (91.5 percent). A key factor in this was the insolvency of a customer from the mineral oil sector. This rendered a large number of wagons redundant, bringing capacity utilization down by 0.7 percentage points.
Rail Logistics Division: subdued start to the year
In the first quarter of 2012, revenue for the Rail Logistics Division fell by 2.2 percent from its 2011 level of EUR 77.0 million to EUR 75.3 million. EBITDA, at EUR 2.4 million, was also below the level of the previous year (EUR 3.3 million). The EBITDA margin on gross profit amounted to 36.2 percent (Q1 2011: 50.2 percent). One factor contributing to these developments was the costs of the strategic repositioning of the division in the product segments of agricultural goods, liquids and industrial goods. Customer insolvency also had a negative impact on business in the Rail Logistics Division. Other factors were declines in sales in the agricultural sector due to weather conditions, changed product flows and the fact that one-time items that positively impacted the figures in 2011 no longer apply.
Tank Container Logistics Division: demand satisfactory and at same level as 2011
Revenue in the Tank Container Logistics Division amounted to EUR 38.6 million, remaining at the level of the previous year (EUR 38.7 million). EBITDA decreased slightly to EUR 3.1 million compared with the 2011 figure of EUR 3.3 million. The EBITDA margin on gross profit also narrowed slightly to 48.5 percent (Q1 2011: 49.9 percent).
In the first quarter of 2012, Tank Container Logistics reported good demand, particularly regarding transport volumes, which were just below the level for the first quarter of 2011. The trend in intra-European and intra-Asian transports was particularly positive. While the prospects for growth for the global chemical industry are generally good, the market is highly competitive, with high costs for energy and raw materials, which squeezes the achievable margins.
Significant rise in number of employees
As of March 31, 2012, the VTG Group had 1,205 employees, an increase of 170 since the end of the first quarter of 2011. 816 employees were employed in Germany (Q1 2011: 720), of which 362 were based in Hamburg (Q1 2011: 333). 389 employees were in the companies abroad (Q1 2011: 315). The number of employees increased in all divisions.
Outlook for 2012
VTG is confident that, despite a slight decline in business in the first half of 2012, it will be able to achieve moderate growth overall in the year 2012. On the basis of the expected developments in the divisions and the current economic forecasts, the Executive Board of VTG AG reaffirms its forecast issued in February 2012 for the financial year 2012, predicting revenue of between EUR 760 and 780 million and EBITDA of between EUR 170 and 178 million.
