Group results in 2018: VTG again boosts revenue | Plans to raise the dividend

Positive end to the year: VTG Aktiengesellschaft (WKN: VTG999) was once again able to increase Group revenue in the 2018 financial year. The figures published today show Group revenue of EUR 1,072.6 million, up 5.7 percent year on year (2017: EUR 1,014.4 million). This significant gain was due in part to dynamic development in the Railcar Division and to the successful integration of the Nacco fleet. The first-time consolidation of Nacco in the fourth quarter of 2018 contributed an extra EUR 22.3 million to revenue. The Group's operating result was up 1.7 percent from EUR 343.4 million a year ago to EUR 349.3 million for the period under review. This figure includes one-time charges of EUR 25.6 million. Adjusted for these extraordinary expenses, EBITDA would have seen a 7.9 percent year-on-year increase to EUR 374.9 million. Earnings per share too were adversely influenced by these one-time effects, declining from EUR 1.93 to EUR 1.01. The adjusted figure was EUR 1.90, only slightly below the adjusted figure of EUR 2.02 from the previous year.

"2018 was a ground-breaking year for VTG," says Dr. Heiko Fischer, Chairman of the Executive Board of VTG AG. "The trend in earnings shows that we are well placed strategically, and that our acquisition of Nacco has charted a clear and important course for the future of the company. Another gratifying consequence was that we were again able to raise the dividend proposal to EUR 0.95. We will continue our successful trajectory in 2019 and further refine and develop our strategy."

Railcar: Revenue and EBITDA up sharply thanks to fleet capacity utilization at a ten-year high

The Railcar Division experienced very dynamic development in the financial year under review. Capacity utilization rose to 93.5 percent – the highest figure for ten years – which positively impacted revenue. In 2018, the division posted revenue of EUR 579.9 million, 11.4 percent more than in the previous year (EUR 520.7 million). Stronger demand and the integration of the Nacco fleet were likewise reflected in the operating result: As a share of revenue, EBITDA rose by 11.0 percent to EUR 381.4 million (2017: EUR 343.6 million). Railcar thus surpassed the forecast published at the start of 2018, which envisaged only a slight increase in revenue and EBITDA.

Logistics units' contribution to Group revenue unchanged year on year – EBITDA negatively affected by market developments

A series of external factors such as the rail strike in France and a shortage of locomotive drivers negatively influenced business development at Rail Logistics in 2018. Against this backdrop, revenue was down 3.6 percent to EUR 324.5 million (2017: EUR 336.4 million), while EBITDA declined by 22.0 percent to EUR 6.5 million (2017: EUR 8.3 million). Rail Logistics thus fell short of the forecasted slight gain in revenue and EBITDA published at the start of 2018.

Thanks to dynamic expansion of transportation volumes, Tank Container Logistics saw its revenue grow by 6.9 percent to EUR 168.2 million (2017: EUR 157.3 million). A different picture emerged on the earnings side, however: changes in overseas freight transportation flows drove up costs, while growing demand in Europe worsened existing infrastructure bottlenecks, leading to higher demurrage and freight costs. Accordingly, EBITDA at this division fell by 42.3 percent to EUR 6.5 million in 2018 (2017: EUR 11.3 million). The forecast of modest growth published at the start of 2018 was therefore met for revenue but not for EBITDA.

Group revenue and EBITDA expected to increase in 2019 – Plans to raise dividend

The Executive Board of VTG expects the positive development to continue in the 2019 financial year, accompanied by higher Group revenue and EBITDA. Although economic growth has flattened somewhat of late, the economic fundamentals in all markets of relevance to VTG remain solid. In Germany, lower track prices for rail freight traffic are expected to provide further positive stimulus for this sector. These factors should further increase demand for railcars and logistical solutions. The Nacco takeover too is expected to deliver an additional effect on revenue and earnings. Nacco will be consolidated for the full financial year for the first time in 2019, whereas transaction and integration costs relating to the acquisition should be considerably lower in the current year. In light of these circumstances, the Executive Board expects revenue to rise tangibly to between EUR 1.15 billion and EUR 1.25 billion in the 2019 financial year. EBITDA is expected to be in the range from EUR 480 million to EUR 510 million. The EBITDA forecast includes a positive contribution of EUR 50 million due to first-time adoption of the new IFRS accounting standard for operating leases. The Executive Board also remains committed to the target of delivering earnings per share (EPS) of EUR 2.50 for the 2019 financial year.

At this year's Annual General Meeting, the Executive Board will propose that the dividend for the 2018 financial year be further increased from EUR 0.90 to EUR 0.95 per share.

VTG AG announces delisting followed by a capital increase in Q2 2019

With the consent of the Supervisory Board, the Executive Board of VTG AG resolved on February 24, 2019, to apply for the listing of VTG's shares for trading in the Regulated Market segment of the Frankfurt Stock Exchange to be revoked. This process is referred to as delisting. Warwick Holding GmbH, VTG´s majority shareholder with approximately 71% informed VTG that it could only support the planned capital increase with subscription rights, designed to repay part of the hybrid capital, if VTG's shares are delisted. In this context, Warwick Holding GmbH has published a delisting purchase offer for VTG's shares. Until April 8, shareholders in VTG can thus sell their shares at a price of EUR 53.00 per share. Delisting will be completed in April of this year. The planned capital increase will take place after VTG AG has been delisted, probably also in the second quarter of 2019