VDL Groep: satisfied with 2018

VDL Groep’s combined turnover rose by 18% from €5.049 billion in 2017 to €5.973 billion in 2018. The net result increased by 16% from €153 million in 2017 to €178 million in 2018. During 2018, VDL Groep’s combined order book value (excluding VDL Nedcar) grew by 62% from €768 million to €1.244 billion. The number of employees grew by 771 to 16,854 at the end of 2018.  VDL Groep has a strong shareholders’ equity and is a financially healthy family business.

For VDL Groep, the year 2018 was also dominated by a large number of special activities, which included 936 support structures that we made for the mirror of the world's largest telescope in Chile, the largest fleet of electric buses entered into service, additional orders for electric buses, the e-truck co-developed with DAF and of course the acquisition of Siemens Hengelo – the 100th VDL company.

“2018 was challenging and demanding,” explains VDL Groep Chairman Willem van der Leegte. “Because we succeeded in organising our planned growth, we are satisfied with our performance over the last 12 months.”

Subcontracting

The turnover of the Subcontracting and Semi-Finished Products division rose by 16% from €1.159 billion in 2017 to €1,335 billion in 2018. The growth was mainly driven by companies active in the high-tech and automotive industries. The division’s result was positive. Over the last 12 months, the division’s order book value grew from €418 million to €442 million in week 7 of 2019.

Car Assembly

The turnover of the Car Assembly division increased by 28% from €2.850 billion in 2017 to €3.653 billion in 2018. The division ended the year with a positive result. 2018 was a demanding year for VDL Nedcar. Because of the challenging objective, a huge amount of work had to be done. At the end of the year, all targets were reached. The number of MINIs and BMW X1s to be built grew substantially: from 168,969 in 2017 to more than 200,000 cars in 2018. For the fourth time in the history of our car factory the number of cars that was built in one year rose above 200,000.

As a result of developments in the global car market, fewer cars are expected to be built in 2019. We have consequently reduced the number of flex pool workers at VDL Nedcar by more than a thousand. The company now has a total of approximately 6,000 employees.

2018 was also a year for VDL Nedcar with important milestones: we celebrated the 50th anniversary of VDL Nedcar; we made our 500,000th car for BMW Group in the 5 years that we have been working together and the 5,000,000th car in our company history. Receiving the J.D. Power Award for the MINI Countryman was also a wonderful compliment for our employees. The ratings were based on a satisfaction survey from the American institute J.D. Power. The conclusions are based on the views of the drivers.

Buses

The turnover of the Bus & Coach division dropped by 7% from €477 million to €445 million. The total number of large buses delivered in 2018 remained constant compared with 2017. It is extraordinary to note that 100 electric buses were scheduled for service in the Amstelland-Meerlanden concession region at the same time from April 2018 onwards. It is the largest fleet of electronic buses in Europe. In addition, hundreds of electric city buses were ordered last year that will be deployed in a number of Dutch cities including Amsterdam, Rotterdam, and Maastricht. The conclusion can be drawn that VDL Groep provides virtually the entire built-up area of the Netherlands with sustainable public transport. The hundreds of electric buses that we have delivered to 14 cities since November 2016 have clocked up a combined total of more than 22 million ‘clean’ kilometres. The Bus & Coach division is investing in expanding its sales network to, for example, Scandinavia, Spain and Belgium. In order to facilitate customers in our core markets on a local level, we wish to be present in their immediate vicinity. Because of substantial investments in, for example, the development of environmentally-friendly electric drive technology for heavy-duty mobility (battery and hydrogen-powered vehicles), VDL Bus & Coach ended the year with a loss in line with expectations. The steps we are taking are part of a broader programme to make the Bus & Coach division structurally financially healthy. The significant rise in the division’s order book value, which increased from €237 million in week 7 of 2018 to €530 million one year, has given us a great deal of confidence that we will succeed in doing this.

Finished Products

The turnover of the Finished Products division decreased by 5% from €563 million to €541 million. This decrease can be explained by the moment when our project organisations close their projects. Despite the drop in turnover, the division had a positive result. Over the last 12 months, the division’s order book value grew from €161 million to €345 million in week 7 of 2019. The companies in this division strive to acquire a leading position on the market in which they are active by developing and optimising products and processes.

Expectations for 2019

Until now, VDL Groep has shown ‘two faces’ in 2019. The order book value (excluding VDL Nedcar) has further increased from €1.244 billion at the end of 2018 to €1.317 billion in week 7 of 2019. This fact gives us confidence. However, several developments currently taking place are cause for concern, for example, Brexit, import duties resulting from trade disputes and the aforementioned difficulties on the global car market. The collective labour agreement also has two faces. On the one hand, we are pleased that, after nine months, an agreement in principle has finally been reached. The agreement has relieved the tension between the employees and employers. It is obviously good that everyone can benefit in times of economic prosperity, but at the same time we are worried about what will happen to the international competitive position of Dutch manufacturing industry as a result of the major increase in labour costs. Medium-term negative effects on jobs and employment resulting from the substantial rise in costs for employers cannot be ruled out in the Netherlands.

Our targeted annual turnover for 2019 is approximately €5.7 billion. The decrease compared with 2018 can be explained by the fact that VDL Nedcar will make fewer cars. According to VDL Groep Chairman Willem van der Leegte, “We are working to safeguard the future of VDL Nedcar. We want to continue to innovate our businesses faster and take steps to further digitise our factories. We want to turn our loss-making businesses into structurally profitable businesses and we want to integrate acquired companies successfully. VDL Groep expects to invest approximately €165 million in machines, processes, buildings and digitisation in 2019.