2024: bridge year for VDL Groep

The year 2024 is, as anticipated, less successful for VDL Groep than the previous year. Events that directly impact the results are converging, such as the continued downsizing at VDL Nedcar, headwinds caused by delayed deliveries in the Bus division, market delays, and increased costs (wages, interest, legislation). The combined turnover has decreased. Positively, excluding the AutoAssembly division, there is a slight increase in turnover. In the second half of 2024, turnover is expected to align with that of the first six months. The results are anticipated to show the initial steps towards recovery.

After the first six months of 2024, the combined turnover amounts to €2.1 billion (first half of 2023: €3.2 billion). Excluding the Auto Assembly division, this represents a 2.4 percent increase, and including this division, there is a decrease of 34 percent. The net result after the first two quarters of 2024 was €3.3 million. Last year, it was €42 million. VDL Groep's order portfolio (excluding the Auto Assembly division) has slightly increased since the start of this calendar year and stood at €1,885 million in week 35. The number of employees has decreased by approximately 900 since the beginning of 2024 to 14,356 colleagues.

'Moved first half-year'

Chief Executive Officer Willem van der Leegte of VDL Group: “We have had a challenging first six months, partly due to developments at VDL Nedcar, the aftereffects of delayed deliveries of our buses, and the acquisition of parts of Van Hool. Because of the loss of activities at VDL Nedcar, we knew that we would experience a significant decline in revenue. However, excluding VDL Nedcar, there has been a slight increase in turnover in the first half of 2024 compared to 2023. Thanks to our well-prepared position in our growth markets, our order portfolio remains high despite market caution.”

Suppliers

The turnover of the Components division has increased from €1.321 billion mid-last year to €1.393 billion. This 5 percent growth can be explained by the fact that operating companies active in this division are well positioned in VDL’s growth markets (Hightech, Mobility, Energy, Infratech, and Foodtech). Our focus on high-quality innovation and long-term, stable relationships with customers and other partners has ensured that, alongside manufacturing, we are increasingly able to develop solutions for our clients. Customers facing geopolitical challenges are served because VDL Groep is established on the three main continents. The stagnation in some sectors is being used to further improve processes and strengthen supply chains. The Components division is profitable.

Self-assembly

The turnover of VDL Nedcar last year after two quarters was €1,262 million and has decreased to €176 million. The first half of 2024 at VDL Nedcar has been marked by the termination of large-scale car production for third parties and the subsequent downsizing of staff. The Car Assembly division is making a loss.
On the premises in Born, work is being done on the transition to 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 so-called pre-delivery inspections for different clients at VDL Special Vehicles, are taking more shape. Discussions are taking place with governments about serving other industries in Born.

Buses

The turnover of the Bus division has decreased by 14 percent, from €153 million a year ago to €132 million. The main explanation for this are the after-effects of the supply chain challenges that led to delays in vehicle deliveries. The deliveries have now resumed. internationally, more and more new electric city buses – the new generation VDL Citea – are visible on the streets, including in Belgium, Germany, and Finland. In the coming period, VDL Bus & Coach will focus on further catching up with the backlog in deliveries. In the field of touring coaches, the launch of the third generation VDL Futura is approaching. This will take place in 2025. The Bus division is loss-making.
The European bus industry has been struggling for some time. Especially in this context, the acquisition of parts of the insolvency-flown Flemish bus manufacturer Van Hool was a remarkable development in the first half-year. The fact that VDL took over parts of Van Hool is related to three elements: some of Van Hool’s products complement the VDL Bus & Coach product portfolio well, long-term access to the North American market is gained via the American distributor ABC Companies, and the Van Hool bus factory in North Macedonia, where buses for North America are produced, is interesting because of the expertise and competitiveness that VDL Bus & Coach can further strengthen. The focus is on Van Hool’s coach activities. Public transport buses are produced by VDL Bus & Coach in Roeselare and Valkenswaard. With the takeover of parts of Van Hool, 1,600 jobs in the European bus industry have been saved. This takeover is, in terms of employment, the second largest in the history of VDL Groep.

End products

The VDL companies that are part of the Final Products division generated a total turnover of €432 million in the first half of 2024, compared to €437 million in the same period of 2023. This stabilisation demonstrates that the companies in this division – despite challenging external circumstances, such as market delays – are well positioned across the board. The Final Products division is profitable.

Prospects

Despite stagnant market developments, the expectations are that the result in the second half of 2024 will show a recovery and that turnover will be roughly equal to that in the first half of the year. Due to all challenges, excluding the Auto Assembly division, a slight increase in turnover of 0 to 5 percent is forecast compared to 2023.