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Media
VTG Aktiengesellschaft (Securities Identification Code: VTG999), a private wagon hire and rail logistics company, ended the financial year 2008 with significant increases in revenue and operating profit (EBITDA). VTG increased group revenue by 12.4 per cent and EBITDA by 14.2 per cent, exceeding its forecast for sales and EBITDA.
“2008 was a very successful year for us”, says Dr. Heiko Fischer, CEO of VTG Aktiengesellschaft. “We increased our wagon fleet, expanded our business internationally and enriched our services with a wagon manufacturing plant. So far, we have felt minimum affects by the economic downturn and are looking to 2009 with a healthy mix of realism and optimism.”
In 2008, VTG increased group revenues by EUR 67.3 million to EUR 608.7 million. The EBITDA increased by EUR 19.4 million to EUR 156.4 million. Group profit as adjusted for one-off tax effects also rose by EUR 8.8 million to EUR 27.9 million. As of 31st December 2008, the VTG Group had a total of 1,004 employees, 190 more than in the previous year.
Wagon hire division expanded
At the end of 2008, the Wagon Hire Division had a fleet of some 49,600 wagons (previous year: 47,800). This increase is primarily due to our entry into the North American market with 1,000 wagons and subsequent expansion of the fleet by 80 %. Capacity utilization of the global wagon fleet remained high, at a level of 91.1 per cent at year end. The slight drop in capacity utilization of 2.8 percentage points on the previous year was mainly due to the decline in demand for wagons for transporting automotive parts. Through the acquisition of the wagon manufacturer Graaff in 2008, VTG has secured its own production capacities and construction expertise. This means that the company can accommodate customer requirements with more flexibility. The majority of the Group’s investments in fixed assets, amounting to EUR 140.9 million, were made in the Wagon Hire division. In this division, VTG generated a sales increase in 2008 of 13.0 per cent, taking the figure to EUR 294.1 million. At EUR 152.5 million, EBITDA also exceeded the figure for the previous year by a considerable 11.2 per cent. The EBITDA margin related to sales continued to be strong at 51.8 per cent.
Rail Logistics Division gaining ground in the European market
In 2008, the Rail Logistics Division made an impact with its focus on international transports. The emphasis was on strengthening and expanding operations in Europe, particularly in eastern and south-eastern
Tank Container Logistics division strengthens its position in growth market of
Tank Container Logistics grew considerably, even with the impact of the economic crisis. The chemical industry was still in a relatively good market position in the first six months of 2008 which helped supporting positive growth. As a first step, VTG was able to counteract the subsequent decline in demand to a certain extent through early cancellation of hire contracts for tank containers from external providers. Moreover, the company expanded its operations in the internal Chinese transport market by entering into a joint venture with Cosco Logistics in the summer. The division’s sales increased from EUR 127.2 million to EUR 136.8 million. There was an even more significant increase in EBITDA, which went up by EUR 19.3 per cent to EUR 9.6 million. The EBITDA margin on gross profit rose from 40.9 per cent to 44.3 per cent.
Inclusion in the SDAX and secure financing
The inclusion of VTG in the SDAX selection index in September of last year affirmed the success of the company’s clear growth strategy and gave it a higher profile in the capital market. VTG’s solid, long-term financing strategy has also been important in this respect. Cash flow from operating activities once again rose significantly, to EUR 149.6 million – an increase of 28.0 per cent on the previous year. With an equity ratio of 23.3 per cent, VTG also has a solid balance sheet structure. As at 31st December, total assets had reached EUR 1,240.5 million, a rise of 6.4 per cent on the previous year.
Outlook for 2009: stable growth in a difficult economic environment
The current financial year is set against the backdrop of an economic crisis whose end cannot yet be predicted. The VTG Group is also not impervious to this influence. For 2009, the company expects business development to be slightly below the level achieved in the previous year, with a drop of up to five per cent in revenue and EBITDA as compared with the very high levels of 2008. The very moderate decline is due to the great stability of VTG’s business model. VTG’s services constitute an integral part of the industrial infrastructure, they are also based on long-term customer relationships and are well-diversified, covering various market segments and countries. These elements make the company less susceptible to economic fluctuations than is the case with many other companies in the traditional logistics sector. This also means that VTG can better predict its business development.
“Our business model is designed for sustainable growth. Of course we cannot extricate ourselves completely from the effects of the economic crisis. Our secure long-term financing does enable us to make targeted acquisitions, however we are weighing up good opportunities very carefully and properly against the market situation”, says CFO Dr. Kai Kleeberg.
There are different outlooks for the individual divisions: while in Wagon Hire there will be a certain slowing of growth, in Rail Logistics VTG expects only a slight decline after the very positive results of the fourth quarter. By contrast, the Tank Container Logistics Division will not be spared the effects of the slump, which were already in evidence by the end of 2008.
The executive and supervisory boards shall be proposing to the 2009 Annual General Meeting the issue of a dividend of EUR 0.30 per share for the financial year 2008.
Source: Transportweekly
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