Voith shows solid development

Voith remains in robust shape both operationally and financially. In the period under review, the company achieved its sales targets in all three Group Divisions and was able to slightly increase orders received. However, the operating result (EBIT) was lower than in the previous year. One-off special effects also had a negative impact on earnings after tax. The broad sectoral and geographical diversification and the consolidated market position in the three Group divisions have proven their worth.

"The past fiscal year was very challenging and characterized by low economic momentum. Voith nevertheless achieved its sales targets. We continue to see our clear focus on sustainable technologies as the right path for profitable growth," comments Andreas Endters, acting Chairman of the Voith Management Board.

Positive development in incoming orders and cash flow

Voith showed solid business development in the face of challenging markets. The targets for orders received and sales were achieved. Orders received increased slightly to EUR 6.34 billion, up 3% on the previous year. One of the reasons for this was a major order from the Hydro division with a volume in the upper three-digit million euro range. The order backlog amounted to EUR 7.99 billion as at September 30, 2024. As expected, Group sales decreased slightly to EUR 5.23 billion (previous year: EUR 5.51 billion).

The operating result (EBIT) was slightly down on the previous year as at the reporting date. This decline in the operating result was due to additional risk provisions for expected cost increases for individual customer projects in the Hydro division. Earnings after taxes were also negatively impacted by one-off effects, including the planned reclassification of a company to the Group.

Further investments were made in the future during the reporting period. Investments in research and development alone amounted to over EUR 200 million. Cash flow from operating activities increased significantly compared to the previous year. Net debt was reduced significantly. The Group therefore remains in a solid financial position.

Andreas Endters: "Voith benefits from long-term secured liquidity and its good market position in the three Group Divisions. In a year with very good cash development, we have made significant risk provisions. We will work intensively on improving our competitiveness and prepare for a market environment that remains volatile. This will further improve our profitability."

Industrial sustainability as a business model

Voith's growth strategy focuses on the megatrends of decarbonization and digitalization. The transformation towards sustainability is in full swing and offers the company immense opportunities for growth: on the one hand through the further expansion of its core business, and on the other through the development of new business areas and markets.

Voith has been intensifying its activities in the field of hydrogen for several years now. The company is focusing on the development of hydrogen storage systems for heavy-duty vehicles, which are considered key technologies for a sustainable energy transition. In order to strengthen its position in this growing market, Voith founded its own unit, Voith HySTech GmbH, in the 2023/24 fiscal year.

To expand its position in the Chinese market, Voith signed a strategic cooperation agreement with the Chinese Weifu High Technology Group. The cooperation includes the operation of two joint ventures and collaboration in the research, development, production and application of hydrogen storage systems.

In order to make further progress in reducing greenhouse gas emissions, Voith committed to the Science Based Targets initiative (SBTi) at the beginning of 2024. This involves the definition of science-based climate targets in accordance with the Paris Climate Agreement. Also in January, Voith joined the world's largest initiative for sustainable and responsible corporate governance, the United Nations Global Compact. Voith is thus committed to the ten globally applicable principles of the Global Compact, including in the areas of human and labor rights, diversity and anti-corruption. Voith was once again awarded the silver medal by EcoVadis, a globally recognized provider of sustainability ratings, for its sustainability performance at its own global locations. This puts Voith in the top 15% of all rated companies worldwide.

Outlook for the 2024/25 financial year

The current financial year 2024/25 will continue to be characterized by economic and geopolitical uncertainties. In addition to the war in Ukraine and the conflict in the Middle East, these include negative economic factors. Against this backdrop, global economic momentum is expected to be weak.

Thanks to its broad sectoral and geographical diversification, its consolidated market position in all Group Divisions and its solid financial situation, Voith believes it is in a position to continue investing in its future viability and to grow profitably.

Voith expects a slight increase in sales for the 2024/25 fiscal year. Orders received will decrease noticeably, as the exceptionally high figures of previous years are unlikely to be reached again due to two major orders from the Group Division Hydro. Profitability is expected to improve significantly: On the one hand, the special effects that weighed on the past financial year will no longer apply. On the other hand, the success of the ongoing strategic programs is becoming increasingly visible. These include, for example, the targeted expansion of high-margin activities, differentiated contract structures that address the risk of cost increases in long-term projects and efficiency gains through optimized structures and processes. This is accompanied by a significant improvement in the operating result (EBIT), consolidated earnings after taxes and return on capital employed (ROCE).