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Third quarter: Vitesco Technologies achieves solid results in a challenging market environment

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DGAP-News: Vitesco Technologies Group AG / Key word(s): Quarter Results
11.11.2021 / 08:30
The issuer is solely responsible for the content of this announcement.

Third quarter: Vitesco Technologies achieves solid results in a challenging market environment

Regensburg, November 11, 2021. Vitesco Technologies, a leading international developer and manufacturer of state-of-the-art powertrain technologies for sustainable mobility, today announced its third quarter results for 2021. The quarter remained impacted by the effects of the Covid pandemic as well as shortages in global supply and logistics chains. However, Vitesco Technologies also marked the past quarter with a historic achievement.

The successful listing on the Frankfurt stock exchange following the spin-off from Continental on 16 September 2021 marks a milestone in the corporate history of Vitesco Technologies. With a transaction volume of just under € 2.4 billion, this was also one of the larger stock exchange listings in Germany in recent years. Subsequently, Vitesco Technologies operates as an independent company in the dynamically growing electromobility market. Electrification products are expected to account for the majority of revenues by 2030.

Solid results in a demanding market environment

Group revenues in the third quarter were € 1.9 billion (Q3 2020: € 2.2 billion). Adjusted for changes in the scope of consolidation and exchange rate fluctuations, revenues fell by 14.9 percent. Nonetheless, Vitesco Technologies was resilient in a challenging market environment. Organic sales growth in the third quarter outperformed by nine percentage points above the underlying global automotive production volume. Adjusted operating profit fell year-on-year to € 22.8 million (Q3 2020: € 102.2 million) due to the ongoing semiconductor crisis. This corresponds with an adjusted EBIT margin of 1.2 percent (Q3 2020: 4.7 percent).

The volume of new orders booked in the third quarter was € 2.6 billion, roughly 30 percent of which, approximately € 770 million, accounted for electrification products across all business units.

As of 30 September 2021, Vitesco Technologies has a solid balance sheet with an equity ratio of 37.1 percent (30 September 2020: 33.9 percent). The change in equity ratio compared to the year before is primarily due to the asset reduction as part of the spin-off, largely through the consolidation of financial receivables and liabilities with Continental AG.

"Our industry continues to face major challenges: The Covid pandemic persists and the shortage of components, especially semiconductors, is affecting the entire industry severely. Against this backdrop, we still delivered a solid quarter," said Andreas Wolf, CEO Vitesco Technologies. "With strong cost discipline and our focus on operational efficiency, we were able to compensate the tight supply situation in the semiconductor market to a significant extent," adds Werner Volz, CFO Vitesco Technologies.

CEO Andreas Wolf: "The market environment will continue to be challenging in the coming months, and we do not expect supply chain shortages to ease significantly before year-end 2022.
But what is important for us is that the underlying market dynamics toward e-mobility are still intact. In this respect, we are pushing ahead with our transformation strategy in a targeted manner. This enables us to fully exploit the attractive growth opportunities offered by e-mobility."

"Vitesco Technologies has made significant progress in implementing its transformation in the year to date. This is evidenced in the nine-month period by dynamic sales growth to 6.3 billion euros, a significant improvement in the development of operating profit, and positive free cash flow of around 90 million euros compared with substantial cash outflow in the prior-year period," adds Werner Volz.

Business unit results

Electrification Technology reported revenues of € 128.9 million in the third quarter 2021 (Q3 2020: € 132.3 million). Despite continued high demand for high-voltage electric drives and performance electronics, the development of the semiconductor market also led to a decline in sales in Electrification Technology. Adjusted operating profit decreased to € -69.2 million (Q3 2020: € -61.8 million), corresponding to an adjusted EBIT margin of -53.7 percent (Q3 2020: -46.7 percent). Nonetheless, improvements in the gross margin were achieved year-on-year.

In the Electronic Controls business unit, revenues in Q3 2021 were € 806.8 million (Q3 2020: € 996.9 million). Adjusted operating profit was € 29.4 million (Q3 2020: € 68.7 million), corresponding to an adjusted EBIT margin of 3.6 percent (Q3 2020: 6.9 percent). Higher costs as well as a loss of sales due to the semiconductor market situation were particularly apparent in Electronic Controls.

In Sensing & Actuation, sales in the third quarter 2021 amounted to € 746.7 million (Q3 2020: € 775.7 million). The effects of the semiconductor shortage, especially due to higher material costs, were also noticeable in this business unit. However, the positive demand development in China and parts of Europe partially compensated for the additional costs. Adjusted operating result amounted to € 52.5 million (Q3 2020: € 71.9 million), corresponding to an adjusted EBIT margin of 7.0 percent (Q3 2020: 9.3 percent).

Outlook for the full year 2021

Vitesco Technologies expects the market environment to remain challenging in the fourth quarter. Persistent semiconductor supply shortages will continue to result in higher material and logistics costs. Missing parts may also lead to short-term demand adjustments and production standstills. Against this backdrop, the global automotive market is unlikely to reach the sales levels of the fourth quarter 2020.

For the 2021 financial year, Vitesco Technologies expects global light vehicle production to stagnate at or slightly above the previous year's level. While the North American market should be stable compared to the previous year, a decline of about three percent is expected for Europe. For the Chinese market, Vitesco Technologies also anticipates a slight decline of about one percent.

Despite these developments, the company expects a slight increase in revenues compared to the previous year to around € 8.2 to € 8.4 billion. Resulting from continued strong cost discipline and further progress in the transformation of the company, an adjusted operating EBIT margin of approximately 1.5 percent to 1.7 percent is expected for the full year 2021. The capex ratio without the value in use (IFRS 16, leasing) for 2021 will range between approximately 5.2 percent to 5.5 percent. Overall, a free cash flow of roughly € 70 million to € 120 million is expected for the 2021 financial year.

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Vitesco Technologies is a leading international developer and manufacturer of state-of-the-art powertrain technologies for sustainable mobility. With smart system solutions and components for electric, hybrid and internal combustion drivetrains, Vitesco Technologies makes mobility clean, efficient, and affordable. The product range includes electrified drivetrain systems, electronic control units, sensors and actuators, and exhaust-gas aftertreatment solutions. In 2020, Vitesco Technologies recorded sales of €8 billion and employs more than 40,000 employees at about 50 locations worldwide. Vitesco Technologies is headquartered in Regensburg, Germany.

Contacts for Journalists

Fabian Kutz
Press Spokesperson Finance & Business
Phone: +49 (0) 941 2031-61904
Fabian.Kutz@vitesco.com

Simone Geldhäuser
Head of Media Relations, Press Spokesperson
Technology & Innovation
Phone: +49 (0) 941 2031-61302
Simone.Geldhaeuser@vitesco.com

News portal

www.vitesco-technologies.com/presse

Social Media

www.vitesco-technologies.com

www.linkedin.com/company/vitesco-technologies

www.twitter.com/VitescoT

www.facebook.com/VitescoTechnologies

www.instagram.com/vitesco_technologies

www.youtube.com/VitescoTechnologies

www.vitesco-technologies.com/en/WeChat


11.11.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de

Language:

English

Company:

Vitesco Technologies Group AG

Siemensstraße 12

93055 Regensburg

Germany

Phone:

+49 941 2031 0

E-mail:

ir@vitesco.com

Internet:

www.vitesco-technologies.com

ISIN:

DE000VTSC017

WKN:

VTSC01

Listed:

Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange

EQS News ID:

1247966


End of News

DGAP News Service

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