From the Wires
Voith Holds Its Own in a Difficult Environment
Third best operational result in company history despite difficult business environment at Voith Paper
By: PR Newswire
Dec. 12, 2012 12:16 PM
HEIDENHEIM, Germany, Dec. 12, 2012 /PRNewswire/ -- The Voith Group has finished the fiscal year 2012 (ending September 30) satisfactorily in a challenging market environment. The globally active family-owned company increased its Group sales by 2 percent to EUR 5.7 billion compared to the record value of the previous year. With EUR 5.7 billion, orders received were behind the excellent value of last year amounting to EUR 6.4 billion (-10 percent), which, among other things, was due to an extraordinarily high volume of major orders from the hydro power market. At EUR 6.1 billion per September 30, 2012, orders on hand were slightly above the previous record level (2011: EUR 6.0 billion).
All key figures are positive, although on a lower level than in the past year. Despite the declining sales for graphic paper machines in the Group Division Voith Paper, Voith was able to generate one of the best operational results in the history of the Group. The operational result before non-recurring result was EUR 341 million (-18 percent), the net income amounted to EUR 114 million (-43 percent).
An anniversary and important orders in America
Voith has been active in the hydro power segment in North America since the beginning of the 20th century – and its location in York, Pennsylvania has manufactured hydro power equipment for 135 years. In 2012, Voith celebrated this anniversary with customers, business partners, employees and government and community leaders. In fiscal 2011/2012, several orders were placed for the modernization of hydro power plants, a campaign in which Voith is playing a key role. Voith has, for example, secured a contract for equipping the Red Rock hydroelectric facility in the US state of Iowa, and will deliver two vertical Kaplan turbine units including generators and automation systems worth EUR 35 million. Another major order: Voith is currently developing gear units and complete wheelsets for 364 rail vehicles to replace the old metro fleet in Washington D. C., including an option for another 392 vehicles. Voith in the USA has also received a special recognition from Honda. For the second time, the car manufacturer presented the company with the "Supplier of the Year" award, an accolade for the six best among more than 5,000 industrial service providers working for Honda USA.
Stable thanks to broad portfolio
"The year 2011/2012 has presented Voith with massive challenges. We have worked intensively on our profitability and our future growth, and laid crucial foundations to ensure that Voith can continue to grow profitably," said Dr. Hubert Lienhard, President and CEO of the Corporate Management Board of Voith GmbH at the company's Balance Sheet Press Conference. According to Dr. Hermann Jung, Chief Financial Officer of Voith, one of the key reasons for the stable business development despite this challenging market environment is the Group's broad portfolio. "We can offset declining sales in individual markets. Because we serve five core industries that follow different cycles: energy, oil & gas, paper, raw materials, transport & automotive. This portfolio has allowed us to grow during the economic crisis in 2009. We were also able to cushion the noticeable slump in the market for graphic paper machines," stated Jung.
Significant increase in investments, intensive R&D activities
In fiscal 2012, Voith's investment in the sustainability of the company continued unabated. The Group increased its investment volume significantly by nearly one third above the level of the previous year, spending EUR 272 million (+29 percent), which corresponds to an investment quota of 4.8 percent of the overall Group sales. The company also increased its R&D expenditure to EUR 267 million (+3 percent), thus reaching an R&D quota of 4.7 percent.
Outlook 2013: growth expected to be restrained
In view of the ongoing difficult framework conditions, such as the Euro debt crisis, an uncertain capital market environment and subdued economic prospects on all major markets and industries, Voith anticipates that developments in 2013 will continue to be restrained. "Dealing with the changes in some of our core markets will continue to be high on our agenda also in 2013, and we cannot see any dynamic growth in 2012/2013, but we expect altogether stable business developments for the Voith Group," stated Lienhard. Based on the assumption that growth for the global economy will be moderate, the Voith CEO foresees that orders received will be at a high level, with sales and results developing at a measured pace, while the net income will improve.
The complete Annual Report for fiscal 2012 can be downloaded from www.voith.com.
Voith sets standards in the markets energy, oil & gas, paper, raw materials and transport & automotive. Founded in 1867, Voith employs more than 42,000 people, generates EUR 5.7 billion in sales, operates in over 50 countries around the world and is today one of the biggest family-owned companies in Europe.
Contact: Lewis Lowe, 202-333-2234
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