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DGAP-News: VTG Aktiengesellschaft: VTG increases profitability again in Q3 2016 - Revenue down slightly year on year

DGAP-News: VTG Aktiengesellschaft / Key word(s): Quarterly / Interim Statement

2016-11-17 / 07:30
The issuer is solely responsible for the content of this announcement.

Press Release

VTG increases profitability again in Q3 2016 -
Revenue down slightly year on year

- Group net profit up nearly 68 percent despite slight drop in revenue

- Sharp reduction in interest expenses combines with synergies from AAE acquisition to further increase profitability

- EBITDA slightly higher than a year ago

- Earnings per share hit highest nine-month figure since 2007

Hamburg, November 17, 2016. VTG Aktiengesellschaft (WKN: VTG999), one of the leading wagon hire and rail logistics companies in Europe, has further increased its profitability in the third quarter of 2016. Although Group revenue of EUR 742.0 million was slightly down year on year (first nine months of 2015: EUR 764.1 million), EBITDA remained virtually unchanged at EUR 255.9 million (first nine months of 2015: EUR 255.5 million). Group net profit once again improved significantly to EUR 45.0 million (first nine months of 2015: EUR 26.8 million), a gain of 68 percent. Earnings per share (EPS) rose further, from EUR 0.69 in the first nine months of 2015 to EUR 1.24 today.

"The third-quarter results show that we have been able to maintain our stable development in a difficult market environment and further increase our profitability. Despite a number of challenges in the first nine months, successful refinancing and the realization of valuable synergies from the acquisition of AAE have driven a pleasing, above-average increase in Group net profit and earnings per share," says Dr. Heiko Fischer, Chairman of the Executive Board of VTG AG. "The results confirm that our strategy is the right one. They also encourage us to systematically pursue our 'VTG 4.0' agenda, one aspect of which is the digitization of VTG's entire European fleet, which we began in November. The market - and top-class investors too - are rewarding this combination of stability and rigorous commitment to a strategy of growth and innovation: In the shape of Joachim-Herz-Stiftung, Kühne Holding AG and Morgan Stanley Infrastructure, we have been able to acquire three powerful new anchor shareholders over the course of the year."

Railcar: EBITDA margin up further - Revenue down slightly

The Railcar Division posted revenue of EUR 387.7 million in the first nine months of 2016 (first nine months of 2015: EUR 403.0 million). Around a third of this year-on-year decline of 3.8 percent has little or no impact on net profit. In a number of segments, demand in the European wagon hire business remains weak - in particular because of lower truck tolls and the low price of diesel. Despite these factors, total fleet utilization of 89.8 percent was slightly better than in the same period a year ago (89.6 percent). Synergies derived from the acquisition of AAE and a positive net result from one-time income and expenses made up for some of the decline in revenue, with the result that EBITDA was up 0.7 percent, increasing from EUR 253.8 million in the first nine months of 2015 to EUR 255.5 million in the period under review. At 65.9 percent, the EBITDA margin too improved year on year by 2.9 percentage points (first nine months of 2015: 63.0 percent).

Capital expenditure of EUR 154.8 million in the first nine months of 2016 was 8.4 percent higher than in the same period in 2015 (EUR 142.8 million). As part of its 'Initiative 2020', VTG is bundling some of the replacement investments that are due between now and 2020 in order to benefit from economies of scale and from the current low price of steel.

Rail Logistics: Operating result more than doubled -
Tank Container Logistics: Revenue down slightly

The Rail Logistics Division saw revenue decline by 1.2 percent to EUR 233.7 million in the first nine months of 2016 (first nine months of 2015: EUR 236.5 million). Alongside further production outages at our customers and the discontinuation of low-margin business, persistently low demand for transportation in the agricultural sector also weighed on revenue development.

Despite the drop in revenue, the division's EBITDA improved sharply in the first nine months of 2016, growing from EUR 2.3 million in the same period a year ago to EUR 4.7 million. Our focus on higher-margin business and successful steps to optimize the division's processes were the drivers of this increase. Accordingly, the gross profit-based EBITDA margin for Rail Logistics climbed from 11.2 percent in the same period a year ago to 22.0 percent in the first nine months of 2016.

Tank Container Logistics saw a positive development in global transportation volumes in the first nine months, although sustained and fierce competitive pressure placed a burden on revenue. In addition, a surprising third-quarter fall in demand in Europe adversely affected the positive earnings trend to date. Compared to the first nine months of the previous year (EUR 124.6 million), revenue was thus down 3.2 percent to EUR 120.6 million. Primarily due to the elimination of one-time income totaling EUR 1.5 million from the sale of an associated company in the first quarter of 2015, EBITDA declined by 23.8 percent, slipping from EUR 10.1 million to EUR 7.7 million in the period under review. Adjusted for this positive one-time effect, EBITDA in the first nine months of 2016 was 10.5 percent below the figure for the same period in the previous year. The gross profit-based EBITDA margin stood at 36.0 percent, 3.8 percentage points down on the adjusted figure for the previous year (39.8 percent).

August revenue and EBITDA forecast confirmed

The Executive Board has confirmed the forecast updated in August, according to which Group revenue is expected to be slightly below that of the previous year (EUR 1.03 billion). EBITDA will probably be at the bottom end of the forecast range of between EUR 345 million and EUR 355 million.

Key Figures for the VTG Group

  1.1.-30.9. 1.1. - 30.9.  
Financial year 2016 2015 Change in %
Revenue in EUR million 742.0 764.1 -2.9
EBITDA in EUR million 255.9 255.5 0.2
EBIT in EUR million 115.9 111.2 4.2
EBT in EUR million 69.2 41.9 65.2
Group net profit in EUR million 45.0 26.8 67.7
Depreciation and amortization in EUR million 140.0 144.3* -2.9
Capital expenditure in EUR million 154.8 142.8 8.4
Operating cash flow in EUR million 226.1 209.5 8.0
Earnings per share in EUR 1.24 0.69 79.7
Railcar Division      
Revenue in EUR million 387.7 403.0 -3.8
EBITDA in EUR million 255.5 253.8 0.7
EBITDA margin in % 65.9 63.0  
Rail Logistics Division      
Revenue in EUR million 233.7 236.5 -1.2
EBITDA in EUR million 4.7 2.3 105.4
EBITDA margin in % 22.0 11.2  
Tank Container Division      
Revenue in EUR million 120.6 124.6 -3.2
EBITDA in EUR million 7.7 10.1 -23.8
EBITDA margin in % 36.0 46.8  
  30.09.2016 30.09.2015 Change in %
Number of employees 1,434 1,444 -0.7
- in Germany 952 936 1.7
- abroad 482 508 -5.1
  30.09.2016 31.12.2015 Change in %
Balance sheet total in EUR million 3,006.4 3,047.1 -1.3
Non-current assets in EUR million 2,669.5 2,708.1 -1.4
Current assets in EUR million 336.9 339.0 -0.6
Shareholders equity in EUR million 748.2 748.2 0.0
Liabilities in EUR million 2,258.2 2,298.9 -1.8
Equity ratio in % 24.9 24.6  

*Number rounded up; the exact figure is EUR144,245 million.

About VTG:

VTG Aktiengesellschaft is one of Europe's leading wagon hire and rail logistics companies, with a fleet consisting of more than 80,000 railcars. VTG offers a full-range service, providing tank cars, intermodal wagons, standard freight wagons and sliding wall wagons. In addition to the hiring of wagons, the Group offers comprehensive multi-modal logistics services, mainly around rail transport, and global tank container transports.

With the combination of its three interlinked divisions Railcar, Rail Logistics and Tank Container Logistics, VTG offers its customers a high-performance platform for international transport of their freight. The Group has many years of experience and specific expertise, in particular in the transport of liquid and sensitive goods. Its customers include numerous well-known companies from almost every industrial sector, for example the chemical, petroleum, automotive, paper and agricultural industries.

In the financial year 2015, VTG generated revenue of EUR 1,027.5 million and operating profit (EBITDA) of EUR 336.5 million. Via its subsidiaries and affiliates the company, which has its head office in Hamburg, is mainly present in Europe, North America, Russia and Asia. As at 31 December 2015, VTG had 1,445 employees worldwide in consolidated companies. VTG AG is listed on the official Prime Standard market of the Frankfurt Stock Exchange and also on the SDAX (WKN: VTG999).

Press contact:

Gunilla Pendt
Head of Corporate Communications
Telephone: +49 (0) 40 23 54-1341
Fax: +49 (0) 40 23 54-1340

Investor relations contact:

Christoph Marx
Head of Investor Relations
Telephone: +49 (0) 40 23 54-1351
Fax: +49 (0) 40 23 54-1350

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2016-11-17 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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