The Voith Group showed a solid performance in the 2023/24 fiscal year (October 1, 2023, to September 30, 2024) in a challenging market environment with weak economic activity and ongoing geopolitical uncertainty. Both in terms of operating business and financially, Voith remains in robust condition. The Company achieved its sales targets in all three Group Divisions in the reporting period and managed to slightly increase the volume of orders received. Nevertheless, the operating result (EBIT) was lower than in the previous year. In addition, the net result was negatively affected by non-recurring effects. The broad sectoral and geographical diversification and the established market position in all three Group Divisions paid off. “The past fiscal year was very challenging and marked by weak economic activity, explains Andreas Endters, Voith’s acting President and CEO. Nevertheless, Voith managed to achieve its sales targets. We still believe that the clear focus on sustainable technologies is the way to achieve profitable growth,”
2023/24 fiscal year: positive development in orders received and cash flow
Voith’s business performance was solid despite the challenging markets. The Company managed to achieve its targets with respect to orders received and sales. The volume of orders received rose slightly to € 6.34 billion and increased by 3% compared to the previous-year figure. One of the reasons for this result was a major contract at the Group Division Hydro with a volume in the upper three-digit million euro range. As of September 30, 2024, orders on hand stood at € 7.99 billion. Group sales decreased slightly to € 5.23 billion (previous year: € 5.51 billion), as expected.
The operating result (EBIT) was slightly below the previous-year figure as of the reporting date. This decline in the operating result was due to the creation of additional provisions and allowances for expected increases in the cost of individual customer projects in the Group Division Hydro. The net result was also negatively affected by non-recurring effects, for example, due to a planned reclassification of a company into the Group.
Voith made further investments for the future in the reporting year. The investments for R&D amounted to more than € 200 million. The Company managed to significantly increase cash flow from operating activities compared to the previous year. In addition, Voith was able to considerably reduce its net debt. Consequently, the Group’s financial position remains sound.
Industrial sustainability as a business model
As part of its growth strategy, Voith is focusing on the megatrends of decarbonization and digitalization. The transformation towards sustainability is fully underway and offers the Company huge opportunities for growth by further expanding its core business and by opening up new business segments and markets.
To further advance the reduction of greenhouse gas emissions, Voith joined the Science Based Targets initiative (SBTi) at the beginning of 2024. This entails the definition of science-based climate targets in accordance with the Paris climate accord. In January, Voith also joined the UN Global Compact, the largest initiative for sustainable and responsible business management worldwide. In addition, Voith once again was awarded the Silver medal by EcoVadis, a globally recognized provider of sustainability ratings, for its sustainability performance at its own global locations. This award places Voith among the best 15% of all companies rated worldwide.
The Group Division Paper achieved its targets with respect to orders received, sales and operating result. At € 2.19 billion (previous year: € 2.10 billion), the volume of orders received was slightly above the previous-year figure despite the expected cooling of the market in the paper industry. Sales dropped to € 2.14 billion (previous year: € 2.24 billion). EBIT increased appreciably due to the systematic implementation of the strategy.
Outlook for the 2024/25 fiscal year: Appreciable decline in orders received, slight increase in sales, improved profitability
The current 2024/25 fiscal year will continue to be marked by economic and geopolitical uncertainties. Alongside the war in Ukraine and the conflict in the Middle East, these include economic stress factors. Under these circumstances, we can expect weak global economic activity. However, thanks to its broad sectoral and geographical diversification; the established market position in all Group Divisions; and the sound financial position, Voith feels well positioned to continue investing in its future viability and to achieve profitable growth.
For the 2024/25 fiscal year, Voith expects a slight increase in sales. The volume of orders received will decrease appreciably given that it is not likely that the Company will be able to again achieve the exceptionally high values seen in previous years, which were due to two major contracts of the Group Division Hydro. Profitability is expected to improve significantly: firstly, the non-recurring effects that had a negative impact in the past fiscal year will not apply. Secondly, the success of the ongoing strategic programs is becoming more and more apparent. These programs include, for example, the targeted expansion of activities with strong margins; differentiated contractual arrangements that address the risk of an increase in costs in long-term projects; and efficiency gains through optimized structures and processes. They correlate with a significant improvement in the operating result (EBIT); the Group net result; and the return on capital employed (ROCE).
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