Despite setbacks due to external factors, revenue growth at VDL Groep
Despite turbulence due to external circumstances, VDL Groep’s revenue grew in the first half of 2022. Trade conflicts, the pandemic and the war in Ukraine are creating imbalanced supply chains, resulting in challenges in the timely availability of materials and associated price volatility. In addition, various cost increases, such as for energy, have depressed the net operating result. Thanks to the high order portfolio, the outlook for the second half of the year is positive.
After the first six months of 2022, the combined revenue will amount to 2.6 billion euros. That is an increase of 4 percent compared to the 2.5 billion euros after the first half of 2021. The net operating result for the first two quarters of 2022 was down by 22 percent, from 69 million euros last year to 54 million euros this year. VDL Groep’s order portfolio (not including the Car Assembly division) increased from 1,718 million euros at the end of 2021 to 1,850 million euros in week 26. During that period, the number of employees increased by 280 to 15,925 employees.
‘Revenue growth positive’
President and CEO of VDL Groep Willem van der Leegte: ‘Of course it’s great that our VDL companies have been able to achieve revenue growth despite the challenging circumstances. The decline in revenue in the Car Assembly division is a logical consequence of material shortages, which prevented VDL Nedcar from producing for a large number of production days. Outside of the Car Assembly division, we have been able to realise organic revenue growth by more than a quarter. A fantastic performance by our employees.’
Subcontracting
The revenue of the Subcontracting division increased from 885 million euros last year to 1,087 million euros. This increase of 23 percent can be explained by the fact that the VDL companies that are active in this division have grown across the board. The commitment to high-quality innovation and digitisation has also further strengthened this position. An example of VDL Groep’s broader digitisation strategy is the OrderOn.com platform, launched in April, for the on-demand ordering of metal products that simplifies and accelerates the ordering process for customers. Hundreds of users have already signed up. In the coming period, investments will be made in the further expansion of the platform.
Car Assembly
After two quarters, revenue in VDL Nedcar has reached 856 million euros, a drop of 24 percent compared to the 1,125 million euros of a year ago. As a result of global developments, VDL Nedcar is regularly confronted with material shortages, resulting in a considerable loss of production. Despite these turbulent circumstances, which are accompanied by many uncertainties, our employees in Born realised a fantastic performance. We receive compliments on quality and delivery reliability, from our client BMW Group and from third parties. Two years ago, we were awarded a bronze JD Power Award and last June, we won a silver award as the second best car factory of all car factories in Europe and Africa. In addition, the MINI Convertible from VDL Nedcar has been voted the best in its class.
Another milestone that we recently reflected on with our employees is the millionth car that rolled off our line for BMW. Just before the summer holidays, we extended our cooperation with BMW by 4 months. That means that the original end date of 1 November 2023 moves to 1 March 2024.
One advantage of this extension is that VDL Nedcar gets extra time to further shape its plans for the future. To increase our chances of a successful future for our car factory, we are also working on another scenario, in addition being a car manufacturer. In that scenario, we will develop VDL Nedcar into a centre for mobility and innovation. This includes the production of various vehicles, in smaller series, combined with other activities in mobility, such as innovations in the fields of electrification, connectivity, autonomous driving and services.
Buses & coaches
Revenue of the Buses & Coaches division increased by 34 percent from 187 million euros a year ago to 251 million euros. In the first half of 2022, VDL Buses & Coaches will once again be the European market leader with 242 registered electric buses. We have by now achieved the milestone of 200 million electric kilometres: 1,300 electric VDL Citeas cover more than 240,000 kilometres every day in 11 European countries and 77 cities and regions. These 200 million kilometres (5,000 times around the world) represent a 28-million-kilogramme reduction in CO2 emissions.
The new generation of VDL Citea, fully based on an electric power train, will be presented during InnoTrans in Berlin (20 to 23 September 2022) and will be delivered from this autumn. This now concerns more than 550 new electric Citeas that have been sold to customers in a large number of European countries. The new generation of VDL Citea has won three important awards this year. In the spring for its design, both the prestigious Red Dot Award and an iF Design Award. In July, the EBUS Award, an important German environmental award for the public transport industry, was awarded in the category ‘E-bus manufacturer’.
The foundation stone of the new factory in Roeselare, Belgium, was laid in February. This new ultramodern and CO2-neutral factory will become VDL’s centre for e-mobility from the beginning of 2023, in addition to Valkenswaard. This makes it possible to respond even better to market needs and demand. We are also reinforcing our ambitions in this way: we want to continue to pioneer e-mobility in Europe.
Finished products
The VDL companies that form part of the Finished Products division jointly generated 400 million euros in revenue over the first half of 2022, compared to 305 million euros over the same period in 2020. This increase of 31 percent can be explained by the fact that our companies in this division are well positioned across the board.
Outlook
The order portfolio of VDL Groep (excluding the Car Assembly division) continued to grow during the current third quarter and passed 2 billion euros, a historic record. We assume that in the second half of 2022, we will also be able to convert the growth of the order portfolio into higher revenue, unless uncertainties due to disruptive, external factors on the global stage throw a spanner in the works. Another indicator of revenue growth is the expectation that setbacks in terms of availability of materials are expected to ease somewhat.
About VDL Groep
Strength through cooperation. This is the basis of VDL Groep, an international industrial family business with its head office in the Eindhoven Brainport region, the Netherlands. It was founded in 1953 and now, almost 70 years later, the third Van der Leegte family generation has been at the group’s helm since 2017. VDL Groep has over 15,000 employees and operates in 19 countries. The group comprises 106 operating companies, each with their own specialism, working together intensively. The activities of these companies can be summarised in the ‘five worlds of VDL’: Science Technology & Health, Mobility, Energy & Sustainability, Infratech and Foodtech. In 2021, VDL Groep’s combined annual sales amounted to 4.995 billion euros.