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For the first half of 2019, VDL announced a combined turnover of 2.9 billion euros – a decrease of roughly 5 percent compared to the H1-2018. Despite this drop in revenue, profit for the first two quarters increased by 7 million euros to 76 million euros. The explanation: several projects have reached completion. The total order portfolio of VDL (excluding the Auto Assembly division) has grown by more than 22 percent year on year, from 957 million euros to 1,171 million euros in week 26 of this year.
“We’re satisfied with the past six months,” says VDL CEO Willem van der Leegte. “The turnover and the result are developing in line with expectations. Based on strong foundations, such as our order portfolio, we remain confident. However, we’re vigilant about short-term changes due to economic and political developments.”
VDL expects that economic growth will further level off in the second half of 2019. For example, in the all-important German market, there has been reference made to a possible third-quarter recession. Additionally, due to global trade conflicts and a steep decline of consumer confidence in China, the family-run conglomerate sees turbulent times ahead for the sale of luxury European products, like cars or anything else that contains a chip. This could have big consequences for the business as the automotive and semiconductor industries are the two largest markets in which VDL is active. When adding these factors with the upcoming Brexit and the Italian political and economic crisis that’s brewing, things aren’t expected to calm down any time soon.
Nevertheless, the well-filled order portfolio offers some confidence. VDL is on track to achieve its targeted annual turnover of approximately 5.7 billion euros in 2019. However, the same isn’t expected for the total profit margins, as the company anticipates the 2019 result to be lower than the year prior.