Despite the Coronavirus crisis, Stadler — the Swiss manufacturer of railway rolling stock — was not affected by a slump in demand in the first half of 2020 and continued to enjoy a leading market position.
No current orders were cancelled, and in the first half of 2020 Stadler received new orders with a total value of CHf3.1 billion (Swiss francs), 1.2 billion of which concern the company’s ‘Service and Components’ division.
These orders represent an overall increase of 35% compared with the first half of 2019. The order backlog rose by a further 12% compared to the 2019 year-end to a record CHf16.8 billion, of which more than 4 billion concerned Service and Components.
However, in contrast to the very solid order situation, Stadler’s net revenue, profitability and cashflow were significantly impacted by the Coronavirus crisis.
In particular, there were interruptions in the supply chains and travel restrictions for employees, customers and regulatory authorities. The substantially reduced timetables of rail operators also resulted in lower than expected revenues for Service and Components.
Overall, net revenue in the first half of 2020 fell to CHf934.7 million, a fall of 16% compared with the first half of 2019. In addition, the temporary closing of the factory in Valencia and the significant slowdown of production capacity in Salt Lake City also had a negative impact on net revenue and EBIT.
Indeed, EBIT for the first half of 2020 stood at CHf5 million, compared to 46.9 million for the first half of 2019. The decline in profitability is mainly due to lower volumes resulting from Coronavirus-related shifts in revenue and interruptions to supply chains.
Stadler says its business is generally subject to ‘strong seasonality’, which typically leads to significantly higher revenue, profitability and cash flow in the second half of the year.
This is usually reflected in the fact that about one third of revenue is generated in the first half of the year and the remaining two thirds in the second half.