Creditor Relations
Financing principles
Conservative financing structures constitute the central and basic idea of Vossloh's financing strategies. In the management of its capital structure, Vossloh focuses on the key data for companies with an investment grade rating. Financing and the provision of liquidity of the group of companies typically take place centrally through Vossloh AG as the Group holding company. High creditworthiness of contracting parties plays just as significant a role as our commitment to building and maintaining long-term relationships with our lending partners. Vossloh only uses derivative financial instruments to hedge specific risks from existing or expected future underlying transactions.
Financial position
The net financial debt of the Vossloh Group (calculated as financial liabilities minus cash and cash equivalents and short-term securities) excluding lease liabilities decreased from €197.6 million at the end of 2022 to €182.9 million at the end of the 2023 fiscal year. The decrease was mainly due to a significant improvement in free cash flow. Net financial debt, including lease liabilities in the amount of €36.6 million (previous year: € 39.9 million), came to €219.5 million (previous year: €237.5 million) at the end of 2023.
Financial liabilities amounted to €320.0 million at the end of the year under review and were therefore slightly higher than the previous year‘s figure of €316.6 million. €90 million of the financial liabilities were attributable to a Schuldschein loan placed in the 2017 fiscal year with a term of seven years (until July 2024) and a fixed interest rate of 1.763 %. In July 2023, two further Schuldschein loans of €30 million each were issued with terms until July 2028 and July 2030 with variable interest rates above the 6-month Euribor. At the end of November 2023, both Schuldschein loans were hedged with two payer interest rate swaps. A Schuldschein loan in the amount of €25 million with a term of seven years (until December 2028) and a fixed interest rate of 0.8 % had already been placed at the end of 2021. Further around €52 million of the financial liabilities at the end of 2023 were attributable to drawings on the syndicated loan concluded in November 2017 with a current volume of €230 million and a term until November 2024. The interest rate at the end of the year was 4.5 % and was based on the respective reference interest rate (Euribor or €STR) and a margin agreed in the loan agreement, which is based on the ratio of net financial debt to EBITDA. A maximum amount is set for this ratio (covenant), which, if exceeded, gives the lending banks the option of early termination. Compliance with the covenant must be demonstrated every six months; this was the case at the end of the first half and at the end of 2023. Furthermore, at the end of 2023 – unchanged from the previous year – Vossloh AG had a loan of €20 million with DZ-Bank with a term until July 2024 and a margin of 0.75 % above the 3-month Euribor. Due to the reclassification of this loan and the Schuldschein loan also maturing in July 2024 and drawings on the syndicated loan, the share of current financial liabilities increased from €49.2 million in the previous year to €198.4 million. The syndicated loan was refinanced ahead of schedule in February 2024.
The new loan agreement has a term of five years until February 2029. When added together, the sum total of cash and cash equivalents and short-term securities came to €100.5 million at the end of the fiscal year under review (previous year: €79.1 million).
Breakdown of financial liabilities
| € million | 2023 | 2022 |
|---|---|---|
| Other noncurrent liabilities to banks | 95.1 | 209.4 |
| Noncurrent liabilities from leases | 26.5 | 30.0 |
| Bank overdrafts | 0.0 | 28.0 |
| Noncurrent financial liabilities | 121.6 | 267.4 |
| Bank overdrafts | 143.6 | 20.3 |
| Current liabilities to banks | 37.1 | 13.0 |
| Current liabilities from leases | 10.1 | 9.9 |
| Interest payable to hybrid capital investors | 5.1 | 5.1 |
| Other interest payable | 2.5 | 0.9 |
| Current financial liabilities | 198.4 | 49.2 |
| Financial liabilities | 320.0 | 316.6 |
Financial liabilities are principally measured at amortized cost. Current and noncurrent lease liabilities arise from leases which are recognized in accordance with IFRS 16. See the explanatory notes to section (11) on page 140 of the 2023 Annual Report for how these line items are measured. Bank overdrafts are shown separately from current and noncurrent liabilities to banks in the table because they were allocated to cash and cash equivalents in the cash flow statement.
For the reconciliation of the IFRS 9 valuation categories, see pages 160 et seq. of the 2023 Annual Report, “Additional information on financial instruments.”