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After a somewhat hesitant start, the year 2022 for VDL Groep has primarily been a year of substantial growth. Despite uncertain geopolitical conditions and external challenges such as shortages (of staff and materials) and rising costs (wages, energy, and materials), three of the four divisions showed double-digit revenue growth. The fourth division experienced a slight increase. The results also indicate growth. Because the order book (excluding the Automotive assembly division) remains at a high level, 2023 will once again be focused on organising growth.
The combined annual turnover in 2022 amounted to €5.752 billion, an increase of 16 percent compared to the 2021 annual turnover (€4.995 billion). The net profit grew from €225 million in 2021 to €298 million in 2022, of which €122 million was incidental and €176 million operational. The order backlog stood at €2.019 billion in week 11 of 2023 (excluding the Auto Assembly division), compared to €1.734 billion in week 11 of 2022. This represents a growth of 16 percent. The number of employees during the same period, in a tight labour market, increased by 940 to a total of 16,585 (a 6 percent increase).
President-director Willem van der Leegte: “A remarkable display of strength through collaboration among our employees is, of course, that our VDL companies, despite challenging external circumstances, have been able to achieve significant revenue growth. Three of the four divisions, Supplies, Buses, and End Products, grew by no less than 26 percent combined over the past year. While revenue in the fourth division, Car Assembly, grew slightly (2 percent), and at VDL Nedcar a quarter of production days had to be forcibly cancelled mainly due to material shortages, this is an excellent achievement by our employees in Born. The overall growth of 2022 confirms that our substantial and long-standing investments in innovation (total investment programme 2022: 246 million euros in properties and other assets and 170 million euros in research & development) are clearly bearing fruit. We are well positioned in our five growth markets, Science, Technology & Health, Mobility, Energy & Sustainability, Infratech and Foodtech, to continue providing added value to our customers. The past year has, therefore, largely been dedicated to organising that growth in complex circumstances.”
The turnover of the Supplies division increased from €1.851 billion in 2021 to €2.411 billion in 2022. This increase of no less than 30 percent can be explained by the fact that the VDL companies active in this division have grown across the board. The focus on high-quality innovation and digitalisation, as well as long-term and stable relationships with customers and other partners, has also further strengthened our position.
Trade conflicts, the COVID-19 pandemic and the Ukraine crisis have heightened awareness that we want to be less dependent on other continents. This has led to reshoring (bringing activities back to the home country) becoming more common worldwide. Because the VDL supply companies are located on three continents, we are able to supply our customers locally around the world, reducing the impact of geopolitical developments.
The order portfolio of the Supplies division increased from €855 million in week 11 of 2022 to €939 million in week 11 of 2023.
The turnover of the Auto Assembly division slightly increased in 2022: from 2.051 billion euros in 2021 to 2.085 billion euros in 2022 (an increase of 2 percent). The fact that production at VDL Nedcar had to be cut back by a quarter of the time mainly due to material shortages has had a significant impact. Nevertheless, the total production volume of VDL Nedcar in 2022, thanks to the flexibility of our employees, reached 101,672 vehicles (2021: 105,214).
Much effort has gone into acquiring new clients. This process has been complicated by recent developments in the automotive industry, such as the Russian invasion of Ukraine and protectionist measures, such as the Inflation Reduction Act announced in America. Developments that have played a disruptive role in the choice of OEMs for their production locations. As a result, newcomers to the global passenger car market wanting to make the move to Europe have re-evaluated their priorities.
On the other hand, VDL Nedcar is in discussions with several potential clients for the series production of cars and is also focusing on other automotive-related activities.
Meanwhile, VDL Nedcar is undergoing a transition from an independent car manufacturer to a broader partner in sustainable e-mobility, aiming for more added value and better future resilience. The broadening of activities at VDL Nedcar in Born is visible in three areas: vehicle assembly for various clients, diverse sustainable mobility solutions in the Mobility Innovation Centre, and facilitating the growth strategy of VDL sister companies that, like VDL Nedcar, are active in mobility. Over the past years, land has been acquired and permit processes completed to house these broad activities at VDL Nedcar in Born.
Despite all the turbulence in the global automotive industry, we remain optimistic about the long-term outlook for VDL Nedcar and the employment connected to it in Born. VDL Nedcar has proven capable of adapting flexibly to serve clients and respond to the sector's dynamics.
The turnover of the Bus division increased by 18 percent in 2022, from €384 million in 2021 to €454 million in 2022. This is mainly due to a further increase in revenue from public transport buses. The general trend among coach operators is that 2022 has been a quite decent year. In 2022, sales and deliveries for VDL Bus & Coach moved in line with market developments. Focus has been on reducing stock levels. Through orders for coaches used for regulated transport, which has been less affected by the COVID-19 pandemic, VDL Bus & Coach has been able to resume production during the downturn. Also in 2022, VDL Bus & Coach continued to strengthen its reputation as a leading transition partner on the road to zero-emission public transport. Among other things, VDL Citea Electrics have been delivered to Germany, Italy, Iceland, Luxembourg, Norway, as well as in the home markets the Netherlands and Belgium.
In September 2022, VDL Bus & Coach launched the new generation VDL Citea at the Innotrans mobility fair in Berlin. The reactions have been very positive. VDL Bus & Coach has started the delivery process for the new generation VDL Citea. VDL Bus & Coach is also actively involved in innovations such as autonomous functions, hydrogen as fuel, sustainable use of composite materials, and bus batteries being given a ‘second life’ as energy storage. The factory in Roeselare (Belgium) is operational and will serve as a model of sustainability and innovation in 2023: an energy-neutral production site of more than 20,000 square meters equipped with solar panels and underfloor heating. VDL Bus & Coach continues to lead the way in writing the next chapter towards an energy-efficient future and the world of e-mobility. The order portfolio for buses has increased over the past 12 months from €421 million in week 11 of 2022 to €497 million in week 11 of 2023.
Our companies that are part of the End Products division have collectively achieved a turnover of 802 million euros in the past year, compared to 669 million euros in 2021. This 20 percent increase can be explained by the fact that our companies within this division are well positioned across the board. The order portfolio has increased over the past 12 months from 458 million euros in week 11 of 2022 to 583 million euros in week 11 of 2023.
It is expected that the growth from 2022 will continue into 2023 at VDL Groep. The forecasted growth of the industrial family business, headquartered in Eindhoven, is estimated for the entire year at 5 to 10 percent. Accordingly, it is anticipated that this year, the annual turnover will exceed 6 billion euros. VDL Groep’s investment agenda for the current year is even more ambitious than that of the past year. The more than 100 VDL operating companies are expected to invest approximately 300 million euros in buildings and other assets in 2023.
The Brainport Eindhoven region, home to VDL Groep, is also growing rapidly and is on its way to becoming the country’s most important economic growth engine. Everyone who wants to contribute to this should be given the opportunity to do so. Additionally, sufficient attention must be paid to the preconditions that need to be in place to facilitate this growth: the region must be accessible, it should offer space for affordable housing and a vibrant living and business climate, sufficient talent must be available, and the energy grid congestion must be resolved. Regarding energy scarcity, we see opportunities to connect local demand and supply in our innovative region.
Communications Director and spokesperson for VDL Groep
E: m.timmers@vdl.nl
Tel: +31 6 14767066
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