2024: transition year for VDL Groep
As forecast, 2024 has been less successful than last year. Events which directly impact the results are coming together, including the further winding down at VDL Nedcar, the unfavourable situation caused by the delayed deliveries by the Buses & Coaches division, delays in the market and rising costs (wages, interest, legislation). The combined turnover has fallen. On a positive note, excluding the Car Assembly division, there has been a slight rise in turnover. In the second half of 2024, the turnover will be in line with the turnover for the first six months. The results are expected to show the first steps on the road to recovery.
After the first six months of 2024, the combined turnover was EUR 2.1 billion (first six months of 2023: EUR 3.2 billion). Excluding Car Assembly, that is 2.4 percent rise and including this division there has been a fall of 34 percent. After the first two quarters of 2024, the net result is EUR 3.3 million. Last year that was EUR 42 million. In this calendar year, the order book of VDL Groep (excluding the Car Assembly division) has risen slightly and in week 35 is EUR 1,885 million. Since the start of 2024, the number of employees has fallen by around 900 to 14,356 employees.
“Turbulent first six months”
VDL Groep President & CEO Willem van der Leegte: “We have experienced a turbulent first six months, among others due to the developments at VDL Nedcar, the consequences of the delayed deliveries of our buses and due to the acquisition of parts of Van Hool. Due to the loss of activities at VDL Nedcar, we knew that our turnover would fall significantly. However, excluding VDL Nedcar, compared with 2023, there was a slight growth in turnover in the first six months of 2024. Because of our good position in our growth markets, despite the sluggish market, our order book is at a high level.”
Subcontracting
The turnover of the Subcontracting division increased from EUR 1,321 million in the middle of last year to EUR 1,393 million. This 5% increase can be explained by the fact that the operating companies in this division are well positioned in VDL’s growth markets (Hightech, Mobility, Energy, Infratech and Foodtech). The focus on high-quality innovation along with long-term, stable relationships with customers and other partners have ensured that, besides production, we have more frequent opportunities to work on developments for our customers. Customers struggling with geopolitical challenges are supported because VDL Groep operates in the three most important continents. The stagnation in some sectors is used to further improve processes and strengthen supply chains. The Subcontracting division has been profitable.
Car Assembly
Last year, the turnover of VDL Nedcar after two quarters was EUR 1,262 million and has fallen to EUR 176 million. At VDL Nedcar, the first six months of 2024 were about ending the large-scale car production for third parties and the consequent downscaling of the workforce. The Car assembly division is loss-making.
At the Born (NL) site, work is ongoing on the transition to become a broad development and manufacturing partner. Various sustainable mobility solutions, such as the assembly of battery packs in the Mobility Innovation Centre and the assembly of vehicles and pre-delivery inspections for various clients at VDL Special Vehicles, are taking shape. Conversations are taking place with government authorities about serving other industries in Born.
Buses & Coaches
The turnover of the Bus & Coaches division dropped by 14% from EUR 153 million a year ago to EUR 132 million. This is mainly explained by the consequences of the challenges in supply chains which have caused delivery delays of vehicles. Deliveries have now resumed. Also internationally, more new electric city buses - the new generation VDL Citea - are visible, including in Belgium, Germany and Finland. Over the coming period, VDL Bus & Coach will focus on reducing the delivery backlog. With respect to coaches, the launch of the third generation VDL Futura is approaching. This will take place in 2025. The Buses & Coaches division is loss-making.
The European bus industry has been struggling for some time. Particularly in that light, the acquisition of parts of the bankrupt Flemish bus producer Van Hool was a prominent development in the first six months. Three elements were involved in the VDL acquisition of parts of Van Hool: some of the Van Hool products supplement the order book of VDL Bus & Coach, long-term access to the North American market will be acquired through the American distributor ABC Companies, and the expertise and competitiveness of the Van Hool bus factory in North Macedonia, where the buses for North America are produced, will further strengthen VDL Bus & Coach. The focus is on Van Hool’s coach activities. Public transport buses will be produced by VDL Bus & Coach in Roeselare (BE) and Valkenswaard (NL). The acquisition of parts of Van Hool will save 1,600 jobs in the European bus and coach industry. In terms of employment, this acquisition is therefore the second largest in the history of VDL Groep.
Finished Products
The VDL companies that make up the Finished Products division jointly generated EUR 432 million in revenue over the first six months of 2024, compared to EUR 437 million in the same period in 2023. This stabilisation shows that despite challenging external circumstances, such as delays in the market, the companies in this division are generally well positioned. The Finished Products division is profitable.
Prospects
Despite stagnating market developments, the results in the second half of 2024 are expected to show recovery and the turnover will be around the same as the turnover in the first six months. As a result of all the challenges, compared with 2023, excluding the Car Assembly division, a slight growth in turnover is expected from 0 to 5 percent.
