The Voith Group has announced that it is making great progress along its path towards a sustainable successful future. Over the course of the anniversary year 2016/2017 to date, the operating business has presented itself in even better shape: the volume of orders received rose noticeably in the first half of the year. Despite the market environment that remains challenging, the Group succeeded in maintaining sales at a roughly stable level and further increasing the operating result in the core business overall. At the same time, Voith has consistently driven forward its strategic agenda. Already in the first year of its existence, the new Voith Digital Solutions Group Division has fully met the expectations placed in it. Voith is developing into a company that is playing a major role in the digital transformation of its industries. Aided by the successful sale of the KUKA shares, the Group’s financial situation has likewise clearly improved.
“In the first half of the year, Voith has once again succeeded in increasing its return on capital and its return on sales, while sales remained roughly at the same level. And we are making substantial progress in the gradual implementation of our digital agenda. Thanks to central strategic decisions made in past years, Voith has a profitable core business, a coherent strategy for the future and a strong balance sheet. Following the Company’s successful transformation it is now in a good position to achieve profitable growth on a sustainable basis,” explained Dr. Hubert Lienhard, president & CEO.
Developments in the core operating business as planned In the first half of the 2016/17 fiscal year, the Voith Group’s core operating business continued to see positive developments. The volume of orders received by the three core businesses, Voith Hydro, Voith Paper and Voith Turbo, totaled €2.32 billion ($2.59 billion). This is an increase of eight percent from the previous-year period. Likewise, the volume of orders on hand increased by eight percent in comparison to the level seen at the end of the past fiscal year and now stands at €5.75 billion (€5.31 billion) ($6.41/$5.92 billion). Significantly above one is Voith’s book-to-bill ratio with a value of 1.18 — this confirms the positive development of the company.
At €1.97 billion (€2.04 billion) ($2.20/$2.27 billion), Group sales were nevertheless around the previous-year level as a result of the low level of market-related orders received by Voith Turbo from some customer industries in the previous year. At the same time, Voith succeeded in further improving the profitability of the core business: the profit from operations of the three established Group Divisions increased to a total of €117 million (€110 million) ($130.40/$122.60 million) with Voith Paper excelling with a growth of 54 percent. In the core business, the return on sales increased to 6 percent (5.5 percent). The ROCE (return on capital employed) also rose to 11.8 percent (11.2 percent). The total profit from operations recorded by the Group fell slightly in comparison to the previous year to €91 million (€97 million) ($101.42/$108.11 million) primarily on account of the budgeted build-up costs for Voith Digital Solutions. With a significant effect coming from the proceeds of the sale of the shareholding in KUKA completed in January 2017, the group net result rose from the previous-year period to €566 million (€-48 million) ($630.84/$-53.50 million). But even without this non-recurring effect, Voith was able to generate a positive net result once again.
The Group’s financial situation has similarly significantly improved over the first half of the year, primarily on account of the high cash inflows from the KUKA sale. The equity ratio rose to 23.8 percent as of March 31 reporting date after 14.9 percent as at the end of the previous fiscal year. The Group’s net liquidity increased over the same period from €168 million to €597 million ($665.39 million). “We have considerable financial headroom at our disposal for organic growth or acquisitions that we are planning to consistently exploit over the coming years – not only in our established business but also in the area of digital services,” said Lienhard.
