Last year Vossloh saw its Ebit fall to €54.2m from €97.5m in 2012, caused by losses incurred by its transportation division (locomotives and traction equipment) which plunged from a positive Ebit of €35.2m in 2012 to a loss of €21.2m in 2013. This was in stark contrast with the performance of its infrastructure division (fastenings, switches and services) where Ebit grew from €81.7m in 2012 to €94.1m last year.
In February, Vossloh's supervisory board, which has been by chaired Mr Heinz Hermann Thiele of Knorr-Bremse since 2013, replaced Vossloh's executive board with a new three-man team led by Dipl-Ing Dr Hans Schabert who joined the company from Siemens, where he was head of the rail division. Schabert was also put in charge of Vossloh's troubled transportation division.
"In the last few weeks, the management team has concentrated on carrying out a careful analysis and evaluation of all activities of the group," says Schabert. "We need to quickly adopt measures to confront the weak operating performance in parts of our business. We will rigorously, and at the same time sustainably, return Vossloh to profitability. It is now essential as a first step to restructure the company and to newly position it according to the market conditions. The goal is to achieve the turn-around by 2015."
Some measures have already been implemented. Vossloh has completed a €250m refinancing by switching from a single US private placement, which it says was expensive, to a more flexible arrangement with lower interest rates with several banks. In addition, the number of managers and division heads has been cut by a third.
As far as the 5300-strong workforce is concerned, Vossloh says: "staff redundancies cannot be ruled out. Talks on that subject start soon."
Vossloh's locomotive factory in Kiel will in future concentrate on the production of industrial and shunting locomotives, which will be increasingly use standard components to reduce costs. The company also wants to transfer production to a more modern factory in Kiel. The development and production of customer-specific locomotives will be transferred immediately from Kiel to Vossloh's plant in Valencia, Spain.
Vossloh Kiepe will cease production of traction equipment for mainline rail vehicles and concentrate on the urban rail and trolleybus markets.