VDL Groep growth on schedule after first six months
VDL Groep in Eindhoven has succeeded in achieving the predicted growth in the first half of 2017. Combined turnover at the end of the first six months amounted to €2.4bn. This is a 53% increase compared to the first half of 2016 (€1.6bn). The result after tax for the first six months showed an increase of over 20%, to €74.6m. At the end of the first six months of 2016 the result was €61.9m. The total order book (excluding the Car assembly division) remains stable at around €800m. The number of employees has increased from 11,827 in mid-2016 to 15,581 a year later.
Subcontracting
Turnover for the Subcontracting division rose to €564m, compared to €451m for the first half of 2016. The order book shows an increase from €307m on 31 December 2016 to €355m after the first six months of this year. In the first half of the year the Subcontracting division has been profitable and we forecast good growth in those businesses of ours that are active in this division. Demand from our customers is also strong.
Car assembly
In the first half of 2017 the Car assembly division has achieved a turnover of €1,326m. This is a sharp increase on the €637m achieved in the first half of 2016. The growth in turnover is mainly due to the production of the MINI Countryman on behalf of BMW Group. While the result in the first half of the year has been positive, it is under pressure because of the organisation of the growth. A doubling of the number of employees in one year is affecting many areas. In the second half of the year further growth is expected, partly because we will be starting production of the BMW X1 in August.
Buses & coaches
Turnover for the Buses & coaches division rose from €218m for the first half of 2016 to €245m for the first half of 2017. The order book declined: from €229m at year-end 2016 to €208m in mid-2017. VDL Bus & Coach ended the first half of 2017 with a slight loss. This was due to high investments in the development of buses, and electric vehicles in particular. We are the European market leaders in the field of electric city transport and we aim to strengthen that position. The investments are based on making the Buses & coaches division structurally profitable. VDL ETS, our development company for the electrification of heavier transport, is also working on building our first electric truck. This truck will be ready for service at the end of 2017.
Finished products
The Finished products division achieved a turnover of €291m in the first half of 2017, compared to €245m in the first half of 2016. The order book declined a little, from €266m at year-end 2016 to €224m in mid-2017. The Finished products division ended the first half-year in profit and the prospects for the second half of the year are positive.
“VDL Groep is experiencing tremendous growth", adds President & CEO Willem van der Leegte. “We are investing in a wide variety of areas in order to organise this growth. We are pleased that in the first half of 2017 we have also managed to improve our net result by over 20%."
Outlook
VDL Groep has positive expectations for the second half of 2017. For the year as a whole, total turnover will be approximately €5bn. The order books are well filled. The net result is expected to slightly surpass the level achieved in the record year of 2016 (€149m). We are concerned about the fact that craftsmen are scarce on the labour market. One way in which VDL Groep is responding to this situation is by having its own recruitment team working actively on the labour market. We are also working with educational institutions and local governments and our companies are training craftsmen themselves. The shortage of craftsmen also means that we are automating certain work processes. We trust that the new cabinet will devote even more attention to facilitating technology in the industry.