EQS-News: Vitesco Technologies Group AG: Q3 2022: Sales expectations rise for full year 2022 after solid third quarter
EQS-News: Vitesco Technologies Group AG
/ Key word(s): Quarter Results/Change in Forecast
Vitesco Technologies Group AG: Q3 2022: Sales expectations rise for full year 2022 after solid third quarter
14.11.2022 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
Q3 2022: Sales expectations rise for full year 2022 after solid third quarter
Regensburg, Germany, November 14, 2022. Vitesco Technologies, a leading international developer and manufacturer of state-of-the-art powertrain technologies for sustainable mobility, today announced its third quarter 2022 results.
Group sales in the third quarter came in at €2.30 billion (Q3 2021: €1.91 billion). Adjusted for changes in the scope of consolidation and exchange-rate effects, sales increased by 13.6 percent. Electrification sales amounted to €230 million in the third quarter. “We are thus on track to achieve the targeted €1 billion in electrification sales for the full year 2022,” says CEO Andreas Wolf. Adjusted operating profit increased year-on-year to €47.9 million (Q3 2021: €24.5 million), corresponding to an adjusted EBIT margin of 2.1 percent (Q3 2021: 1.3 percent). The net income increased to
‑€13.8 million (Q3 2021: -€91.5 million) and to earnings per share of ‑€0.34 (Q3 2021: -€2.29), respectively.
Due in particular to the further build-up of inventories, free cash flow was slightly negative at -€16.3 million. A significant improvement was achieved compared to the prior-year quarter (Q3 2021: -€213.2 million). However, the previous year was also significantly influenced by spin-off effects. Vitesco Technologies has a solid balance sheet as of September 30, 2022, with an equity ratio of 40.7 percent (September 30, 2021: 37.1 percent).
“In the third quarter of 2022, high inflationary effects in the form of increased material, energy, and transport costs, among other factors, continued to impact the company’s overall results,” notes CFO Werner Volz.
New order booked for battery management system worth €600 million
In a market environment that remains challenging, Vitesco Technologies can look back on a solid third quarter with strong order intake. The volume of new orders booked in the third quarter came in at €4.3 billion, of which €3.2 billion was for electrification products in all business units. “This means we have achieved an electrification order intake of almost €10 billion in the first nine months of 2022,” says CEO Andreas Wolf.
This order volume from the past quarter also includes an order worth around €600 million from a global German automotive manufacturer for Vitesco Technologies’ battery management system (BMS). As Wolf puts it, “This means that, so far in 2022, we have booked orders for our battery management system worth a total value of €3 billion.”
The business units at a glance
The Electrification Technology business unit generated sales of €147.2 million in the third quarter of 2022 (Q3 2021: €128.9 million). Organic sales grew by 16.0 percent. Adjusted operating profit decreased to -€71.0 million (Q3 2021: -€69.2 million). In the past quarter, the adjusted EBIT margin was -48.2 percent (Q3 2021: ‑53.7 percent). The business unit continues to be burdened by ramp-up costs and the research and development expenses included therein. In addition, production volumes in China had to be reduced for a short period of time due to capacity expansions. The business unit continues to achieve high order intake, amounting to €1.9 billion in the third quarter.
In the Electronic Controls business unit, sales in Q3 2022 were €1.03 billion (Q3 2021: €806.8 million). Organic growth amounted to 21.2 percent. Adjusted operating profit was €44.5 million (Q3 2021: €30.1 million), corresponding to an adjusted EBIT margin of 4.3 percent (Q3 2021: 3.8 percent). Improved availability of semiconductors and the successive passing on of additional costs to customers led to an increase in sales. Nevertheless, a lack of customer-specific electronic parts in particular continues to pose a major challenge for the business unit.
For the Sensing & Actuation business unit, sales in Q3 2022 increased to €879.9 million (Q3 2021: €746.7 million). Organic growth amounted to 11.0 percent. Also in this business unit, the improved availability of semiconductors had a positive impact on business. In addition, strong sales growth was noticeable in North America and Germany. Adjusted operating profit was €78.0 million (Q3 2021: €53.5 million), corresponding to an adjusted EBIT margin of 8.9 percent (Q3 2021: 7.2 percent).
Adjusted outlook for the full year 2022
In the current fiscal year 2022, Vitesco Technologies expects global vehicle production to increase by 5 to 7 percent (previously: 3 to 5 percent) compared to the previous year. For the European market, a decline between -1 to -3 percent (previously: 3 to 5 percent) is expected, while double-digit growth rates (10 to 12 percent; previously: 11 to 13 percent) are still forecast for North America. According to company estimates, production figures in China have changed significantly (5 to 7 percent); previously, company estimates had assumed stagnation (-2 to 0 percent).
Due to expected higher global passenger car production figures, as well as effects from currency effects and price adjustments, Vitesco Technologies is raising its 2022 sales forecast to €9.0 to 9.2 billion. Previously, the company was anticipating full-year sales of €8.6 to 9.1 billion. “Although the market environment remains challenging, particularly on the purchasing side, we can now – as the year draws to a close – specify our targets for the full year,” explains CFO Werner Volz.
However, as not all additional costs can be passed on, Vitesco Technologies expects an adjusted operating EBIT margin of 2.3 to 2.5 percent (previously: 2.2 to 2.7 percent) for the full year 2022, also considering the year-to-date performance. In view of the global uncertainties, Vitesco Technologies is lowering its capital expenditure ratio [1] for 2022 to around 5 percent (previously: around 6 percent). Overall, free cash flow of more than €75 million (previously: more than €50 million) is expected in fiscal year 2022.
KEY FIGURES FOR THIRD QUARTER 2022 COMPARED WITH THE PRIOR-YEAR QUARTER 2021
€ million Q3/ 2022 Q3/ 2021 Sales 2,300.1 1,913.8 Reported growth (%) 20.2 Adjusted EBIT1 47.9 24.5 As a percentage of sales 2.1 1.3 EBIT 2.4 -51.9 As a percentage of sales 0.1 -2.7 Capital expenditure on property, plant, and equipment and on software2 88.9 118.2 As a percentage of sales 3.9 6.2 Cash flow before financing activities (free cash flow) -16.3 -213.2 As a percentage of sales -0.7 -11.1 Equity ratio (%) 40.7 37.1 BUSINESS UNITS: ELECTRIFICATION TECHNOLOGY (ET) Sales 147.2 128.9 Reported growth (%) 14.2 Adjusted EBIT1 -71.0 -69.2 As a percentage of sales -48.2 -53.7 ELECTRONIC CONTROLS (EC) Sales 1,032.3 806.8 Reported Growth (%) 27.9 Adjusted EBIT1 44.5 30.1 As a percentage of sales 4.3 3.8 SENSING & ACTUATION (S&A) Sales 879.9 746.7 Reported growth (%) 17.8 Adjusted EBIT1 78.0 53.5 As a percentage of sales 8.9 7.2 CONTRACT MANUFACTURING (CM) Sales 262.3 241.0 Reported growth (%) 8.8 Adjusted EBIT1 1.9 10.4 As a percentage of sales 0.7 4.3Source: company information.
Footnotes:
Adjusted for amortization of intangible assets as a result of purchase price allocation, for changes in the scope of consolidation, and for special effects. Capital expenditure excluding right-of-use assets (IFRS 16).
Vitesco Technologies is a leading international developer and manufacturer of cutting-edge drive systems for sustainable transport solutions. With the help of intelligent system solutions and components for electric, hybrid, and internal combustion drive systems, Vitesco Technologies makes clean, efficient, and affordable transport a reality. The product portfolio includes electric drives, electronic control units, sensors and actuators, and exhaust aftertreatment solutions. In 2021, Vitesco Technologies generated sales of €8.3 billion. It employs nearly 37,000 people at around 50 sites. Vitesco Technologies is headquartered in Regensburg.
Press contact
Fabian Kutz
Press Spokesperson for Business & Finance
Tel: +49 (0)941 2031 61904
fabian.kutz@vitesco.com
Simone Geldhäuser
Head of Media Relations
Tel: +49 (0)941 2031 61302
simone.geldhaeuser@vitesco.com
Press portal
https://www.vitesco-technologies.com/en-us/press
Social media
www.linkedin.com/company/vitesco-technologies
www.facebook.com/VitescoTechnologies
www.instagram.com/vitesco_technologies
www.youtube.com/VitescoTechnologies
www.vitesco-technologies.com/en/WeChat
[1] Capital expenditure excluding right-of-use assets (IFRS 16).
14.11.2022 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com
End of News EQS News Service
1485953 14.11.2022 CET/CEST