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Tag: Vitesco Technologies

Q2 2024: Vitesco Technologies Boosts Profitability Amid Challenges

Mumbai, August 12, 2024: Vitesco Technologies, a leading international provider of modern drive technologies and electrification solutions for sustainable mobility, published its results for the second quarter and first half of 2024.

“The key financial figures for the second quarter of 2024 illustrate the slow recovery of the market environment in the automotive sector,” explains Andreas Wolf, CEO of Vitesco Technologies. “Despite these challenging conditions, we achieved a further increase in the profitability of Vitesco Technologies.”

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 €2.02 billion in the second quarter of 2024 (Q2 2023: €2.44 billion). This included sales in electrification products of €347.8 million (Q2 2023: €354.3 million). Adjusted for changes in the scope of consolidation and exchange-rate effects, consolidated sales were thus down by 11.5 percent.

Strict cost discipline in a volatile environment enabled growth in adjusted EBIT to €81.7 million (Q2 2023: €66.6 million). This equates to an adjusted EBIT margin of 4.0 percent (Q2 2023: 2.9 percent).

Compared to the first six months of the previous year, the Group’s sales decreased to €4.02 billion (H1 2023: €4.76 billion). Adjusted for changes in the scope of consolidation and exchange-rate effects, the decline amounted to 9.5 percent. The expected reduction in contract manufacturing for Continental and the divestures of business segments particularly impacted sales. Vitesco Technologies’ adjusted EBIT improved to €114.7 million (H1 2023: €97.4 million), which corresponds to an adjusted EBIT margin of 2.9 percent (H1 2023: 2.1 percent).

Free cash flow declined to -€387.5 million in the second quarter (Q2 2023: -€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 -€478.1 million (H1 2023: -€61.7 million). Capital expenditure on property, plant, and equipment and software amounted to €120.4 million (Q2 2023: €92.8 million). The capex ratio was therefore at 5.9 percent (Q2 2023: 3.8 percent). Vitesco Technologies showed a solid balance sheet as of June 30, 2024, with an equity ratio of 39.4 percent (June 30, 2023: 38.9 percent).

In the second quarter of 2024, Vitesco Technologies’ order intake came in at around €3.2 billion, with electrification components accounting for €1.3 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,” says Andreas Wolf.

Divisional results for Vitesco Technologies

The Powertrain Solutions division generated sales of €1.25 billion in the second quarter of 2024 (Q2 2023: €1.63 billion), which equates to organic growth of -16.3 percent. 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 €118.1 million (Q2 2023: €100.7 million). The division’s adjusted EBIT margin therefore stood at 9.4 percent (Q2 2023: 6.6 percent), with the core business contributing an adjusted EBIT margin of 13.0 percent.

“The Powertrain Solutions division’s core business once again achieved a double-digit adjusted EBIT margin. That speaks for itself,” says CFO Sabine Nitzsche.

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 €786.9 million in the second quarter of 2024 (Q2 2023: €825.2 million). This equates to negative organic growth of 2.7 percent. The division’s adjusted EBIT stood at -€30.9 million (Q2 2023: -€31.0 million), with an adjusted EBIT margin of -3.9 percent (Q2 2023: -3.8 percent).

Sabine Nitzsche adds: “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 €8.1 billion in fiscal year 2024 (+/-€150 million). Vitesco Technologies is also predicting an adjusted EBIT margin for 2024 of around 4.0 percent (+/-0.2 percent) and free cash flow for 2024 of approximately -€400 million (excluding integration costs in connection with the merger with Schaeffler AG)

Vitesco Technologies publishes its third independent Sustainability Report

Hyderabad, April 03, 2024: Vitesco Technologies, a leading international supplier of advanced drive technologies and solutions for e-mobility, today publishes its third independent Sustainability Report. The report documents the company’s progress across seven material topics. Among other things, it is guided by the standards of the Global Reporting Initiative (GRI), the Sustainable Development Goals (SDGs), the United Nations Global Compact (UN GC), and the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).

“Thanks to our passionate team and our strong ambition to be a ‘Driver of Sustainability’, we managed to further embed sustainability in our business processes in 2023,” says Dr. Anja Rivera de la Cruz, Head of Sustainability and Security at Vitesco Technologies: “We have thus performed valuable pioneering work and paved the way for our future endeavors.”

Among other things, the company carried out a comprehensive materiality assessment in 2023 in preparation for the European Corporate Sustainability Reporting Directive (CSRD) based on the final European Sustainability Reporting Standards (ESRS), which were published in July 2023. The Sustainability Agenda was further developed in line with the results of the materiality assessment. The six existing material topics – Clean Mobility, Climate Protection, Resource Efficiency and Circularity, Fair Work and Diversity, Responsible Sourcing and Partnerships, and Occupational Health and Safety – were reconfirmed, and Business Ethics and Compliance was added as a seventh material topic. The present Sustainability Report is also structured according to these material topics.

To measure its progress, Vitesco Technologies uses Key Performance Indicators, such as the eNPS (Employee Net Promoter Score), the accident rate, the waste recycling quota, and the share of electrification solutions in its business. The report also presents a wide range of examples of how sustainability is established at all levels within the company.

Vitesco Technologies achieved an important milestone in the 2023 reporting year with the validation of its short-term climate targets by the Science Based Targets initiative (SBTi): Vitesco Technologies has set itself the target of reducing absolute GHG emissions from its own operational activities (Scope 1 and 2) by 100% by 2030 compared to the base year 2019. Furthermore, the company has committed to reducing its absolute Scope 3 emissions by 25% by 2030 compared to the base year 2021. Beyond this, Vitesco Technologies aims to achieve net-zero greenhouse gas emissions across the entire value chain by 2040.

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.