STADLER presented its half year results for 2021 on August 25 with chairman and CEO Mr Peter Spuhler saying that recovery from the worst of the 2020 Covid-related problems is continuing.

This compares with the 7% Ebit margin achieved in the second half of 2020 and a full year margin of 5.1% for 2020.  Spuhler says this Ebit margin for the first half of 2021 is likely to be substantially exceeded in the second half of this year as new train deliveries increase following the end of pandemic-related travel restrictions and deliveries are made in the autumn to operators starting services with new fleets, particularly in Germany, from the December timetable change.

Stadler, uniquely among the major train manufacturers, normally books revenue when trains are delivered instead of as construction work progresses, with this sometimes leading to variations in revenue versus forecast. For example, the pandemic led to the late delivery of 130 trains, around 100 of which have now been delivered and therefore revenues booked. Late payment by customers can affect results, especially the final SFr 130m payment from Hungarian national operator MÁV for its Kiss fleet which, whilst forecast for June, was received in July, depressing free cash flow temporarily by a similar amount in the half year accounts.

Spuhler described ongoing major difficulties with some component suppliers and sub-contractors that have been unable to fulfil orders due to pandemic related restrictions on operation, travel or supply chain issues. He said that while the situation was now stable there were still constant problems within the supply chain. In total Stadler lost around 25,000 man days during 2020 due to pandemic-related restrictions such as quarantines. Spuhler said the company’s financial guidance was unchanged but highlighted the risk that future restrictions may be imposed by governments if the pandemic situation worsens again.

Order backlog at record high

Stadler reported an order backlog of SFr 17.9bn with SFr 3.1bnof new orders in the first half of 2021.

Spuhler highlighted Stadler’s recent successes selling versions of its double-deck EMU design to Spanish national operator Renfe and Swiss Federal Railways (SBB). He said he hoped the proposed contract with Austrian Federal Railways (ÖBB) for 185 similar trains would be confirmed following a long running legal challenge by Alstom. Spuhler added that the framework contract has been widely discussed in the Austrian media and was for 90 six-car, 90 four-car and five five-car Kiss units with an initial firm order for 40 trains once the contract is confirmed.

Orders for both Stadler’s new heavy freight locomotive designs - bi-mode EuroDual  and electric Euro 9000 locomotives - plus the company’s new “Tina” LRV platform continue to grow and Stadler confirms it plans to offer the Tina platform in place of both the legacy Variobahn and Tango designs from now on. Whilst the order backlog is a record high, Spuhler added that new orders are required for 2023-24 onwards to keep factories working at full capacity.

Spuhler highlighted the lack of orders from East Asia, except for a locomotive order from Taiwan. He also said that while the new joint venture assembly plant has been built in Indonesia it has yet to start production due to pandemic-related restrictions. Signaling key to future strategy

Spuhler confirmed the importance Stadler attaches to growing its signaling business. He said the approval of Stadler’s Guardia ETCS system for use in Germany is expected in 2022 and that the company is already selling trains to be equipped with the system for use in the country; the system is already in use in new BLS Flirt trains in Switzerland and MÁV trains in Hungary and will be fitted to the 60 new Kiss EMUs ordered by SBB in April. Spuhler confirmed Stadler is actively considering acquiring companies to build its signaling business. Spuhler was clear that Stadler is trying to catch up with ETCS market leaders Siemens and Alstom but thought that Hitachi’s  acquisition of Thales would mainly strengthen an already strong position in metro CBTC type systems.

Future strategy

Spuhler confirmed Stadler’s intention to achieve higher 8-9% Ebit margins through a mix of expanding service contracts and increasing signalling revenues to a position where between them they represent 25% of revenues by 2023, up from 10% currently. Further acquisitions in the train maintenance and service segment are possible.