VDL Bus & Coach turnover dropped -14% in the first half of 2024 (with car assembly division pulling group’s results negative)

2024 is not looking as a positive year for VDL Group financial results. Combined turnover of the group is dropping, and the bus and coach division is still facing very though time, with turnover falling -14% compared to Jan-Jun 2023. And it should be noted that 2023 had also been a truly bad year for buses and coaches at VDL: at the end of last year the bus&coach division’s sales had dropped by 33 percent. “The Buses & Coaches division is loss-making”, VDL writes black on white in the release announcing mid-2024 results.

Source opening picture: https://shorturl.at/XBarC

Most of the losses come from VDL Nedcar, whose turnover was “EUR 1,262 million in the first half of 2023 and has fallen to EUR 176 million this year. At VDL Nedcar, the first six months of 2024 were about ending the large-scale car production for third parties and the consequent downscaling of the workforce“. Excluding VDL Nedcar results, turnover would have been rising 2.1%.

Number of employees in VDL Group is also falling down: -5,8% (around 900 less employees, to 14,356 employees.

At the end of this year, excluding the Car Assembly division, VDL expects a slight growth in turnover from 0 to 5 percent.

VDL Bus & Coach: turnover down 14%

VDL Group states that the turnover of the Bus & Coaches division dropped by 14% from EUR 153 million a year ago to EUR 132 million.

This is mainly explained “by the consequences of the challenges in supply chains which have caused delivery delays of vehicles. Deliveries have now resumed. Also internationally, more new electric city buses – the new generation VDL Citea – are visible, including in Belgium (editor’s take: delivery in July 2024, with order dating back in 2021…), Germany and Finland. Over the coming period, VDL Bus & Coach will focus on reducing the delivery backlog. With respect to coaches, the launch of the third generation VDL Futura is approaching“.

On the consequences of the acquisition of Van Hool

Three elements were involved in the VDL acquisition of parts of Van Hool, as the note by VDL reads: “Some of the Van Hool products supplement the order book of VDL Bus & Coach, long-term access to the North American market will be acquired through the American distributor ABC Companies, and the expertise and competitiveness of the Van Hool bus factory in North Macedonia, where the buses for North America are produced, will further strengthen VDL Bus & Coach. The focus is on Van Hool’s coach activities. Public transport buses will be produced by VDL Bus & Coach in Roeselare (BE) and Valkenswaard (NL). The acquisition of parts of Van Hool will save 1,600 jobs in the European bus and coach industry. In terms of employment, this acquisition is therefore the second largest in the history of VDL Groep”.

These statements by VDL confirm the already discussed strategy of entering North American market and halting the production of city buses (whereas is still unknown how the coach portfolio will develop, while it looks like Astromega will remain, rest of the T range seems set to be discontinued). VDL has stated in June 2024 that it will not assume any warranty obligations on the Van Hool vehicles already delivered.

Combined turnover at VDL Group is falling down

The press note released by the group announcing the mid-year results begins with: “As forecast, 2024 has been less successful than last year. Events which directly impact the results are coming together, including the further winding down at VDL Nedcar, the unfavourable situation caused by the delayed deliveries by the Buses & Coaches division, delays in the market and rising costs (wages, interest, legislation). The combined turnover has fallen. On a positive note, excluding the Car Assembly division, there has been a slight rise in turnover. In the second half of 2024, the turnover will be in line with the turnover for the first six months. The results are expected to show the first steps on the road to recovery”.

After the first six months of 2024, the combined turnover was EUR 2.1 billion (first six months of 2023: EUR 3.2 billion): -34%.

After the first two quarters of 2024, VDL says, the net result is EUR 3.3 million. Last year that was EUR 42 million. In this calendar year, the order book of VDL Groep (excluding the Car Assembly division) has risen slightly and in week 35 is EUR 1,885 million. Since the start of 2024, the number of employees has fallen by around 900 to 14,356 employees.

On the other hand, the subcontracting division has been profitable, with turnover increasing from EUR 1,321 million in the middle of last year to EUR 1,393 million (a 5% increase).

What is happening at VDL Nedcar?

As mentioned ahead, car assembly division VDL Nedcar is ending large-scale car production for third parties. “Work is ongoing on the transition to become a broad development and manufacturing partner – VDL states -. Various sustainable mobility solutions, such as the assembly of battery packs in the Mobility Innovation Centre and the assembly of vehicles and pre-delivery inspections for various clients at VDL Special Vehicles, are taking shape. Conversations are taking place with government authorities about serving other industries in Born”.

“Turbulent first six months”

VDL Groep President & CEO Willem van der Leegte: “We have experienced a turbulent first six months, among others due to the developments at VDL Nedcar, the consequences of the delayed deliveries of our buses and due to the acquisition of parts of Van Hool. Due to the loss of activities at VDL Nedcar, we knew that our turnover would fall significantly. However, excluding VDL Nedcar, compared with 2023, there was a slight growth in turnover in the first six months of 2024. Because of our good position in our growth markets, despite the sluggish market, our order book is at a high level.”