The Divisions.

Rail Vehicle Systems Division

Incoming orders in the Rail Vehicle Systems division decreased slightly year on year, falling -0.4 % from € 3,485.1 million to € 3,470.7 million. Growth in the Europe and North America regions was not able to completely compensate for the decrease in demand from the Asia-Pacific region, which had a particularly noticeable impact on the Chinese business. By contrast, the order book, which stood at € 3,875.1 million as of December 31, 2021, was up on the prior-year level of € 3,721.4 million, driven by the positive order situation, especially in the second half of the 2021.

The Rail Vehicle Systems division saw a slight year-on-year decrease in revenues by -0.6 % to € 3,317.0 million (2020: € 3,336.8 million.). Of this, OE business accounted for around 54% of revenues (2020: 55%) and aftermarket business accounted for 46% of revenues (2020: 45%). The slight decrease in revenues was partly caused by Covid-19 and a decrease in the OE volume in all regions other than Europe. In the Asia-Pacific region, and here especially in China, year-on-year decreases in revenues were seen in the high-speed trains and metro businesses. In the North America region, among others, the regional & commuter business and the freight and metro business declined. In the Europe region, significant growth in high-speed trains and in the railway carriage business more than compensated for revenues below the prior-year level in the light rail vehicles business and the regional & commuter business. The acquisition of the EVAC Group made during the 2021 fiscal year contributed revenue of € 31.2 million in the Rail Vehicle Systems division.

In 2021, the Rail Vehicle Systems division’s operating EBIT fell by -6.6% to € 594.7 million due to volume and mix factors (2020: € 636.6 million). At 17.9 % of revenue, the operating EBIT margin was moderately below the prior-year level of 19.1%. Compared with the reported EBIT of € 583.5 million, this was adjusted for the aforementioned restructuring expenses in North America (€ 3.2 million) and in connection with Kiepe (€ 8.0 million). There were no comparable circumstances in the previous year that would have led to an adjustment. In the fiscal year, the division benefited, among other things, from the cost-cutting program launched in the previous year, which had a stabilizing effect.

The Rail Vehicle Systems division’s operating EBITDA, adjusted for the aforementioned restructuring expenses, fell by -5.1% to € 725.4 million due to volume and mix factors (2020: € 764.2 million), leading to an operating EBIT margin from revenues of 21.9%, which was thus moderately lower than the prior-year level of 22.9%.

The Rail Vehicle Systems division’s capital expenditure of € 118.7 million in 2021 (2020: € 109.0 million) focused primarily on capacity expansions of high-growth product groups, automation projects and, additionally, replacement investments. At € 130.7 million, depreciation and amortization was slightly up on the previous year (2020: € 127.7 million).

R&D costs in 2021 came to € 211.1 million, thus increasing moderately by € 8.5 million or 4.2% year on year (2020: € 202.6 million). Compared with the previous year (6.1%), the R&D-to-revenue ratio increased to 6.4% of revenue. Development activities continued to concentrate on solutions for increasing transportation capacity, eco-friendliness, availability, life-cycle management and digitalization.

As of December 31, 2021, the Rail Vehicle Systems division had 16,308 employees, which was 234 more than the prior-year level of 16,074 employees (including temporary staff). This was due not only to the acquisition of the EVAC Group with its 230 employees but also to strategically building up headcount for future-related topics (in R&D, among others).

KEY INDICATORS FOR RAIL VEHICLE SYSTEMS DIVISION

in € millions 2021 2020
Incoming orders 3,470.7 3,485.1
Order book (Dec.31) 3,875.1 3,721.4
Revenues 3,317.0 3,336.8
EBITDA 714.2 764.2
EBITDA margin (as % of revenues) 21.5% 22.9%
Operating EBITDA margin (as % of revenues) 21.9% 22.9%
EBIT 583.5 636.6
EBIT margin (as % of revenues) 17.6% 19.1%
Operating EBIT margin (as % of revenues) 17.9% 19.1%
Capital expenditure (before IFRS 16 and acquisitions) 118.7 109.0
Depreciation, amortization
and impairments
130.7 127.7
R&D costs 211.1 202.6
Employees (as of Dec. 31., incl. temporary staff) 16,308 16,074

Commercial Vehicle Systems Division

The Commercial Vehicle Systems division reported significant growth in incoming orders by 29.2% to € 3,818.0 million in 2021 (2020: € 2,954.2 million). This positive trend was attributable to a global market recovery that benefited all regions and boosted results in the first half of 2021 in particular. Continuing supply bottlenecks across the entire commercial vehicle industry led to delays and decreases in incoming orders in the second half of 2021 and primarily affected the North America region and China. The overall significant growth in incoming orders in the 2021 fiscal year was also reflected in the order book, which increased by 33.7 % year on year to € 1,696.8 million as of December 31, 2021 and reached a new record level (2020: € 1,269.0 million).

Revenues increased significantly year on year by 20.2% to € 3,390.2 million (2020: € 2,819.4 million). This increase was primarily attributable to a global increase in truck production worldwide and the associated strong growth in OE revenues and significant growth in the aftermarket. All regions benefited from this trend, particularly the core markets of North America and Europe. OE customers’ share of the division’s total revenues increased by 0.4 percentage points year on year. As a consequence of this sharper growth in the OE business, the aftermarket share of total revenues decreased slightly year on year to 26.7% despite aftermarket revenues increasing in absolute terms (2020: 27.1%).

The Commercial Vehicle Systems division’s operating and reported EBIT rose very significantly by € 126.0 million or 53.6% to € 361.1 million in 2021 (previous year: € 235.1 million). The operating and reported EBIT margin increased year on year by 240 basis points to 10.7% (2020: 8.3%). This was due not only to the significant increase in revenues but also to systematically continuing the cost control measures introduced. This represents a significant improvement in profitability despite higher costs for freight and procurement owing to the scarcity of semiconductors and to other components.

Operating and reported EBITDA also grew very significantly year on year by 31.3% to € 500.6 million. At 14.8% of revenue, the EBITDA margin achieved was thus significantly higher than the prior-year level of 13.5%.

In 2021, the Commercial Vehicle Systems division’s capital expenditure increased by € 24.1 million year on year to € 234.1 million. As in the previous year, major investments were made in the global provision of supplier tools. In addition, investments were made in connection with our GSBC product platform and for the integration of R. H. Sheppard. Depreciation, amortization and impairment in the Commercial Vehicles Systems division was € 139.5 million and thus € 6.6 million below the previous year (€ 146.1 million).

The division’s R&D costs rose to € 220.3 million in the 2021 fiscal year (2020: € 194.0 million), partly as a result of intensified research and development activity in ADAS/HAD and steering. The disproportionate rise in revenues meant the R&D to revenue ratio fell from 6.9% in the previous year to 6.5% in 2021 despite an increase in R&D costs in absolute terms. Research and development activities focused on the megatrends of road safety, automated driving, emission reduction, e-mobility and connectivity.

The Commercial Vehicle Systems division had 13,459 employees as of December 31, 2021 (previous year: 12,871) and thus 588 or 4.6 % more employees than as of December 31, 2020. This resulted largely from the significant increase in revenues and was particularly due to the area of production.

KEY INDICATORS FOR COMMERCIAL VEHICLE SYSTEMS DIVISION

in € millions 2021 2020
Incoming orders 3,818.0 2,954.2
Order book (Dec. 31) 1,696.8 1,269.0
Revenues 3,390.2 2,819.4
EBITDA 500.6 381.2
EBITDA margin ( as % of revenues) 14.8% 13.5%
Operating EBITDA margin (as % of revenues) 14.8% 13.5%
EBIT 361.1 235.1
EBIT margin (as % of revenues) 10.7% 8.3%
Operating EBIT margin (as % of revenues) 10.7% 8.3%
Capital expenditure (before IFRS 16 and acquisitions) 234.1 210.1
Depreciation, amortization and impairments 139.5 146.1
R&D costs 220.3 194.0
Employees (as of Dec. 31, incl. temporary staff) 13,459 12,871