Core business drives Voith's profit growth in 2018/19 fiscal year release date: Source: Voith's order volume and sales were both higher than that of the previous fiscal year, with an increase of 9% and 2% respectively.
the existing order volume reached the highest record in seven years.
sales profit margin and return on capital increased significantly
the proportion of equity and net cash flow continued to maintain a high level
under the severe market and competitive environment, all group business units performed steadily and rose against the trend
despite the full challenges in the market and the fierce competition, Voith group still performed steadily in the 2018/19 fiscal year (up to September 30, 2019), Achieve profitable growth. As we predicted, all key performance indicators of the group have improved: This is mainly due to the strong growth of the hydropower division, which has significantly increased the order volume compared with the expectation. Despite the obvious slowdown in economic growth in many markets and regions, Voith group still achieved gratifying growth in sales. Core KPIs, EBIT and net income, grew even faster. Profit indicators have also improved. Voith group's financial position is still very stable, the proportion of equity is only slightly lower than the record high of the previous year, and the net cash flow is still at a high level
"in the last fiscal year, Voith still maintained strong performance in a challenging market environment. We are in a favorable position in the market, our profitability has been improved, and we can continue to explore the future on the basis of a stable balance sheet. This makes us confident that we will achieve our strategic goals in the next few years."
- Dr. TOEFL Hogg (President and CEO of Voith group)
+ focuses on strengthening the core business with advantages and actively expanding the digital business
Voith adjusted its growth strategy in the last fiscal year, focusing on Further Strengthening the core business of the group and strengthening its core strength through targeted acquisitions. For example, Voith announced the acquisition of BTG in September this year. The transaction volume of this acquisition reached 319million euros, which is the largest acquisition of its kind in the history of the company. BTG is an international supplier providing integrated and highly specialized process solutions for the global pulp and paper industry. Voith consolidated its market position as a whole line supplier through this acquisition. The acquisition transaction was successfully completed on December 1
thanks to a large number of new orders recently won, Voith's organic growth in the next few years will be guaranteed, of which the most notable is the snowy 2.0 project contract: it is one of the largest pumped storage power stations in the world, and the hydropower business department will provide six reversible pump turbines to this power station in Australia. Snowy 2.0 project is the second largest order signed by Voith group since 152 years
the drive division is committed to consolidating its market position, including the establishment of two joint ventures with CRRC, the world's largest rail vehicle manufacturer. The joint venture will contribute to further expanding its business in rail transit and different industrial markets. In addition, the drive division also announced the implementation of the streamlining plan for its production network in Germany, which is also aimed at consolidating and strengthening the long-term competitiveness and business strength of the division
in addition to strengthening core business, it is also a strategic goal to continuously develop and promote the digital process. At present, Voith's customer-oriented digital strategy has achieved initial results. For example, the market demand for Voith's proprietary modular industrial IOT platform oncumulus surged. In addition, for example, for pilotfish4 The acquisition of double window lipstick and green and the establishment of joint ventures such as TSP oncare digital asset Inc. will also help Voith further expand the scope of its digital products and solutions in the value chain of its core business
"By enhancing its core business and demand-oriented digital strategy, Voith has always adhered to a clear goal: Based on extensive technical expertise and in-depth understanding of the market, Voith is committed to becoming a promoter and major participant in the post digital carbon industry. This basic concept has always been applied to all business units of the group, such as the upgrading of hydropower stations, resource-saving papermaking and transportation electrification A concentrated expression of this concept. "
- Dr. TOEFL Hogg (President and CEO of Voith group)
this strategic agenda is linked to clear financial objectives. Therefore, Voith is striving to achieve considerable sales growth and significantly improve key profit indicators
+ financial year 2018/19 review: all the group's goals have been achieved - maintaining good business development in a challenging environment
Voith took an important step on the established development path in the previous financial year. Once again, the group benefits from its worldwide sales and service network and many industries involved. Overall, Voith group's order volume in 2018/19 fiscal year was 4.69 billion euros, a year-on-year increase of 9% compared with 4.29 billion euros in the previous fiscal year. As of the release date of the financial report, the number of existing orders was 5.63 billion euros, an increase of 9% over 5.17 billion euros in the previous fiscal year, a record high in the past seven years
the group's sales reached 4.28 billion euros, an increase of 2% compared with 4.21 billion euros in the previous fiscal year. At the same time, the group's net profit also achieved gratifying results: EBIT increased by 12% to 215million euros (193million euros in the previous fiscal year). This is mainly due to the outstanding contribution of the paper business unit and the significant reduction of the deficit of the digital business unit. The profit margin on sales increased to 5.0% from 4.6% in the previous fiscal year, and the return on capital (roce) increased to 12.0% from 10.9% in the previous fiscal year. The group's net profit increased by 49% to EUR 72million
following the good performance in the previous fiscal year, Voith group's financial position remained stable. As of the financial report release date, the net cash flow was 552million euros, still at a reliable level. This means that even after the acquisition of BTG, the group still has considerable funds available for future acquisitions. The proportion of equity reached a record high of 28.5% in the previous year, but this year it fell slightly to 26.2% due to the impact of pension calculation and other factors
+ the business of all business units of the group grew steadily
as mentioned above, due to the successful acquisition of super large projects in Australia, the order volume of the hydropower business unit almost doubled compared with the previous year. Sales remained stable. In contrast, as the orders being executed came from the market with fierce price competition, the EBIT decreased
in recent years, the paper business unit has recovered its strong performance in completing different experiments, such as the previous top breaking test. In the 2018/19 fiscal year, the performance has returned to the normal high level. As we expected, the order volume decreased from the high point of the previous year. The sales volume declined slightly, mainly due to the decline in China's paper production. In the Chinese market, the government issued a ban on the import of waste paper, resulting in a shortage of raw materials and a significant decline in paper production. The profit before interest and tax of the paper business unit has been significantly improved, and this year has once again made the most important contribution to the operating performance of Voith group
in the face of the increasingly competitive market environment, the driving business unit still performs strongly and is focusing on building a more efficient organizational structure. The order volume of the business unit increased slightly, the sales volume improved significantly, and the EBIT was roughly the same as that of the previous year, which was mainly due to the change in the internal settlement of R & D costs of the standard sample business unit, which can also be processed into circles or rectangles
driven by acquisition and other factors, in the past year, the sales generated by the group's youngest digital business unit and third parties outside the group have increased significantly. As we expect, the construction cost of the digital business unit has decreased significantly in this process
+ outlook for fiscal year 2019/2020: the order volume remains at a high level, and both sales and net profit are expected to grow
in the just started fiscal year 2019/20, Voith group will continue to focus on profit growth. The order volume is expected to remain at the high level of the previous fiscal year. Driven by the growth trend of the paper, drive and digital business units, sales are expected to continue to grow. As an indicator of profitability, the operating performance is expected to continue to maintain considerable growth