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Car distributor D'Ieteren expects higher 2023 profit

By Olivier Sorgho and Vittorio Maresca di Serracapriola

(Reuters) - Belgian car distributor and vehicle glass repairer D'Ieteren Group on Wednesday said it expected further profit improvement in 2023, helped by growth in its businesses and the acquisition of Parts Holding Europe (PHE).

The company expects a full-year adjusted profit before tax, group share of around 900 million euros ($950 million), against the 733.4 million reported in 2022, and 486 million in 2021.

"Even if we had some capacity issues... we've been able to generate significant volume growth," the group's finance chief Arnaud Laviolette told analysts in a call.

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Microchip shortages exacerbated by COVID-19 in China and the war in Ukraine weighed on the automotive sector in 2022, raising costs in tight supply chains.

But car registrations in Europe have been recovering since the second half of 2022, while carmakers like D'Ieteren's client Volkswagen, and Stellantis reported upbeat outlooks for 2023.

The company's Belron business, which repairs and replaces car windshields, produced total sales growth of 20% in 2022, helped by higher volumes and a favourable price/mix effect, despite inflation and supply-chain problems, D'Ieteren said.

"If we need to increase the price again, we will do it," Laviolette added in the call.

The company's Automotive business, which distributes brands like Volkswagen, Audi, and Škoda, reported an 11.4% rise in sales, despite a 2.0% drop in the market for new car registrations in Belgium.

"The Belgian market is expected to progressively recover from depressed levels," the company said, referring to automotive sales.

PHE, which D'Ieteren acquired last year, contributed 38.8 million euros in adjusted pre-tax profit in 2022.

"We continue on the bolt-on acquisition strategy," the CFO added.

D'Ieteren proposed a gross ordinary dividend of 3.00 euros per share for 2022, against 2.10 euros in 2021.

($1 = 0.9477 euros)

(Reporting by Olivier Sorgho and Vittorio Maresca di Serracapriola in Gdansk; Editing by Mark Potter and Jane Merriman)