VDL Groep shows recovery in 2021, despite turbulent circumstances

The year 2021 has been a hectic year for VDL Groep. External factors caused a lot of turbulence. Nonetheless, the industrial family business in the high-end manufacturing industry, headquartered in Eindhoven, has shown resilience: although the results before the corona crisis were not achieved, 2021 brought recovery. The year 2022 also, due to external factors, has again experienced a lot of turbulence. Despite this, VDL Groep continues to invest and innovate extensively.

The combined annual turnover in 2021 amounted to €4.955 billion, an increase of 6 percent compared to the annual turnover of €4.686 billion in 2020. The operational net profit rose from €97 million in 2020 to €145 million in 2021. By way of comparison: the combined turnover in 2019 was €5.780 billion and the net profit €156 million. The order backlog in week 11 of 2022 (excluding the Automotive Assembly division) stood at €1.734 billion, compared to €1.441 billion in week 11 of 2021. The number of employees increased by 1,196 during the same period to a total of 15,926.

'Operational strong recovery'

"Based on our very well-stocked order portfolio, we had a lot of confidence from the beginning of 2021 that we would recover from the COVID-19 dip in 2020," states CEO Willem van der Leegte. "At the same time, there were challenges and uncertainties due to global trade conflicts and the coronavirus crisis. We mainly faced imbalances in supply chains caused by limited availability of materials and price fluctuations. Until the third quarter of 2021, we applied for the NOW subsidy, worth 70 million euros, which was used to continue paying staff salaries, and as a result, all jobs were preserved. Thanks to our risk diversification strategy through the diversification of activities, the first half of 2021 (combined revenue of 2.5 billion euros, net profit of 69 million euros) was relatively good. In the third quarter, deliveries were somewhat delayed, and in the fourth quarter, revenue was again fairly reasonable. Overall, we are certainly not dissatisfied and see a strong operational recovery in results, although we are not yet at the pre-COVID-19 level. In the autumn, we also experienced a cyberattack that forced us to work offline for nearly a month. However, by the end of 2021, we had managed to deliver at least 95 percent of our orders."

Supplies

The revenue of the Supply Division increased from 1.503 billion euros in 2020 to 1.851 billion euros in 2021. This 23 percent increase is mainly attributable to the companies active in this division having positioned themselves positively to facilitate the growth of our customers. The focus on high-quality innovation has further strengthened our position in this sector. The Supply Division is profitable. The order book grew over 12 months from 559 million euros in week 11 of 2021 to 855 million euros in week 11 of 2022.

Auto-assembly

The turnover of the Automotive Assembly division has fallen by 12 percent from €2.320 billion in 2020 to €2.051 billion in 2021. The year ended positively. The coronavirus crisis still has a significant impact on the global automotive industry. Due to a worldwide shortage of electronic components, VDL Nedcar was unable to produce for as many as 48 days in 2021. In the first two months of 2022, 18 production days have already been lost due to the same problem.
In June, we announced that VDL Nedcar would build vehicles for the American start-up Canoo. However, in mid-December, we jointly announced with Canoo that this collaboration would not be continued. Canoo and VDL Groep are exploring the continuation of their cooperation, separate from VDL Nedcar.
At the end of 2021, we informed our employees at VDL Nedcar that we were in discussions with the American company Rivian regarding collaboration on various fronts. These discussions are ongoing. Over the past year, VDL Nedcar has produced 105,214 MINIs and BMWs (production volume 2020: 125,666 cars). Due to disruptions in the supply chain caused by the war in Ukraine, production at our car factory in Born has been halted since week 10 of 2022. Preparations have been made to resume production on Monday, 28 March.

Buses

The turnover of the Bus division increased by 13 percent, from €339 million in 2020 to €384 million in 2021. This division is making a loss. The coronavirus crisis continues to have a significant hold on the Bus division, especially the coach activities. The travel industry has not yet returned to pre-pandemic levels, resulting in virtually no demand for coaches. Nonetheless, throughout the past year, we announced deliveries of dozens of coaches, mostly used in public and intercity transport. Since governments, whether as concession grantors or direct customers, must ensure a structurally adequate public transport network and do not want to delay climate goals, public transport companies are continually deploying new zero-emission vehicles to make their fleets more sustainable. VDL is well positioned as a pioneer in electric mobility. In 2021, we announced several orders, including our largest order for electric city buses so far, 102 e-buses for Oslo. 
The strategy to concentrate production of electric city buses in Valkenswaard and Roeselare is taking shape. In February 2022, we celebrated the commencement of construction of our new, state-of-the-art and CO2-neutral factory in Roeselare, where the first of the newly produced electric buses will be delivered in the first quarter of 2023. With this investment, we strengthen our ambitions: we want to remain at the forefront of e-mobility in Europe. Even in these challenging times for the Bus division, our focus remains on the long term, and we continue to invest in innovation. For example, we are developing our coach VDL Futura further and the new generation of electric city buses VDL Citea. We have reached the milestone of 1,000 electric buses operating in 11 countries. These buses are collectively on their way to 200 million clean, electric kilometres. For context: that is equivalent to 5,000 times around the world. The order portfolio of Buses has decreased over the past 12 months from €510 million in week 11 of 2021 to €421 million in week 11 of 2022.

Final products

Our companies that are part of the End Products division have collectively generated a turnover of 669 million euros over the past year, compared to 524 million euros in 2020. This increase of 28 percent can be explained by the recovery of the declining market demand due to the coronavirus crisis. The End Products division is profitable. The order book has increased over the past 12 months from 372 million euros in week 11 of 2021 to 458 million euros in week 11 of 2022.  

Prospects

The order portfolio of VDL Groep (excluding the Auto Assembly division) has increased by a remarkable 30 percent over the past year and remains at a high level. Under normal circumstances, this growth would translate into an increase in revenue, but we continue to face uncertainties due to disruptive, external factors on the global stage.