Q2 2024 financial figures: Vitesco Technologies improves profitability in a challenging environment

Q2 2024 financial figures: Vitesco Technologies improves profitability in a challenging environment

• Quarterly sales amounted to €2.02 billion (Q2 2023: €2.44 billion); €4.02 billion in the first half of 2024 (H1 2023: €4.76 billion)
• Sales in Electrification came in at €347.8 million in the second quarter (Q2 2023: €354.3 million)
• Adjusted EBIT improved to €81.7 million in Q2 2024 (Q2 2023: €66.6 million) with an adjusted EBIT margin of 4.0 percent (Q2 2023: 2.9 percent); adjusted EBIT for H1 2024: €114.7 million (H1 2023: €97.4 million) with an adjusted EBIT margin of 2.9 percent (H1 2023: 2.1 percent)
• Order intake in Q2 2024 totaling to €3.2 billion, with electrification order intake accounting for €1.3 billion
• Vitesco Technologies strengthens its product portfolio in China and starts battery management production

Regensburg, August 8, 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 today.

“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 [1] 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).

Comparison of key figures for the second quarter of 2024 and the first half of 2024 with the prior year periods of 2023

1) Adjusted for changes in the scope of consolidation.

2) Adjusted for amortization of intangible assets from purchase price allocation (PPA), changes in the scope of consolidation, and special effects.

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 2023, Vitesco Technologies recorded sales of €9.23 billion and employs around 35,500 people at around 50 locations worldwide. Vitesco Technologies is headquartered in Regensburg, Germany.

Contact for investors

Heiko Eber

Head of Investor Relations

Tel: +49 941 2031-72348

heiko.eber@vitesco.com

Contact for journalists

Simone Geldhäuser

Head of Communications (interim)

Tel: +49 941 2031 61302

simone.geldhaeuser@vitesco.com

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^[1] Excluding right-of-use assets under IFRS 16.