“The key financial figures for the second quarter of 2024 illustrate the slow recovery of the market environment in the automotive sector. Despite these challenging conditions, we achieved a further increase in the profitability of Vitesco Technologies,” Andreas Wolf, CEO of Vitesco Technologies, said. “
The current decrease in call-offs from vehicle manufacturers and the planned ramp down of non-core business meant that Vitesco Technologies generated consolidated sales of EUR 2.02 billion in the second quarter of 2024 (Q2 2023: EUR 2.44 billion). This included sales in electrification products of EUR 347.8 million (Q2 2023: EUR 354.3 million). Adjusted for changes in the scope of consolidation and exchange-rate effects, consolidated sales were thus down by 11.5%.
Strict cost discipline in a volatile environment enabled growth in adjusted EBIT to EUR 81.7 million (Q2 2023: EUR 66.6 million). This equates to an adjusted EBIT margin of 4% (Q2 2023: 2.9%).
Compared to the first six months of the previous year, the Group’s sales decreased to EUR 4.02 billion (H1 2023: EUR 4.76 billion). Adjusted for changes in the scope of consolidation and exchange-rate effects, the decline amounted to 9.5%. The expected reduction in contract manufacturing for Continental and the divestitures of business segments particularly impacted sales. Vitesco Technologies’ adjusted EBIT improved to EUR 114.7 million (H1 2023: EUR 97.4 million), which corresponds to an adjusted EBIT margin of 2.9% (H1 2023: 2.1%).
Free cash-flow declined to –EUR 387.5 million in the second quarter (Q2 2023: -EUR 20.6 million) due mainly to planned negative non-recurring items in connection with contract manufacturing for Continental. For the first half of 2024, free cash flow came in at –EUR 478.1 million (H1 2023: -€61.7 million). Capital expenditure on property, plant, and equipment and software amounted to EUR 120.4 million (Q2 2023: EUR 92.8 million). The capex ratio was therefore at 5.9% (Q2 2023: 3.8%). Vitesco Technologies showed a solid balance sheet as of June 30, 2024, with an equity ratio of 39.4% (June 30, 2023: 38.9% electrification components accounting for EUR1.3 billion.
Vitesco Technologies also increased its activities in the growth market of China and further expanded its market presence with the recent launch of battery management production.
“Our increased commitment in China is bearing fruit and shows that we are on the right track with our strategy. The new battery management production facility enables us to meet the growing demand in China even better,” Andreas Wolf said.
Divisional results
The Powertrain Solutions division generated sales of EUR 1.25 billion in the second quarter of 2024 (Q2 2023: EUR1.63 billion), which equates to organic growth of -16.3%. The planned phase-out of contract manufacturing for Continental and the divestures of business segments contributed to the decrease in sales. In the same period, adjusted EBIT increased to EUR 118.1 million (Q2 2023: EUR 100.7 million). The division’s adjusted EBIT margin therefore stood at 9.4% (Q2 2023: 6.6%), with the core business contributing an adjusted EBIT margin of 13%.
“The Powertrain Solutions division’s core business once again achieved a double-digit adjusted EBIT margin. That speaks for itself,” CFO Sabine Nitzsche said.
Electrification sales declined slightly year on year because deliveries of battery-powered electric vehicles are fairly stagnant in the European market. Sales generated by the Electrification Solutions division amounted to EUR 786.9 million in the second quarter of 2024 (Q2 2023: EUR 825.2 million). This equates to negative organic growth of 2.7%. The division’s adjusted EBIT stood at -€30.9 million (Q2 2023: -€31.0 million), with an adjusted EBIT margin of -3.9% (Q2 2023: -3.8%nt).
Sabine Nitzsche added, “In the field of electrification, we had a rather slow start in the first quarter, gained momentum in the second quarter and will be profitable from the third quarter onwards.”
Outlook for fiscal year 2024
A further year on year decline in global vehicle production is expected in the second half of 2024. Vitesco Technologies therefore continues to anticipate a challenging market environment for 2024. The company forecasts sales of EUR 8.1 billion in fiscal year 2024 (+/-EUR150 million). Vitesco Technologies is also predicting an adjusted EBIT margin for 2024 of around 4% (+/-0.2%) and free cash-flow for 2024 of approximately –EUR 400 million (excluding integration costs in connection with the merger with Schaeffler AG).
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