Tenneco has reported fourth-quarter 2019 revenue down US$200m to US$4.1bn.
On a constant currency pro forma basis, total revenue decreased 2% versus last year, while light vehicle industry production declined 5% in the quarter.
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Value-added revenue for the fourth quarter was US$3.4bn. Revenue comparisons include a negative US$88m impact due to a work stoppage at the company’s largest customer.
Including non-cash, non-recurring items of around US$230m, the company reported a net loss for fourth quarter 2019 of US$293m compared with a fourth quarter net loss of US$109m in 2018. Fourth quarter 2019 adjusted net income was US$23m compared with US$105m.
Fourth-quarter EBIT (earnings before interest, taxes and noncontrolling interests) was a loss of US$117m, versus a loss of US$23m last year. EBIT as a percent of revenue was -2.8% versus -0.5% last year. Earnings comparisons include a negative US$27m impact due to a work stoppage at the company’s largest customer.
Fourth-quarter adjusted EBITDA was US$314m versus US$407m last year. Adjusted EBITDA as a percent of value-add revenue was 9.3% versus 11.2% last year. Cash generated from operations was US$380m.
“Continued execution on cost reduction initiatives and operating improvements enabled us to deliver on our fourth quarter guidance, despite challenging economic and business conditions,” said Tenneco CEO, Brian Kesseler.
“We are executing our Accelerate programme to drive additional cost savings, strengthen cash flow performance, and reduce leverage to drive value and better position both the DRiV and New Tenneco divisions for the planned separation.”
The Accelerate program is modeled on the company’s approach to capturing acquisition synergies. Compared to year-end 2019, this two-year programme is expected to deliver the following:
- Annual run rate cost savings of US$200m
- Working capital improvement of US$250m
- Capital expenditure improvements of US$100m
- The company expects to incur around US$250m in one-off costs during the two-year programme
“The Accelerate programme is at the core of our operating plans for 2020 and 2021 as we work to improve capital efficiency and reduce leverage to better position both divisions for the planned separation,” added Kesseler.
“In addition to streamlining our leadership structure, we are working to lower SG&A costs and evaluating multiple strategic options, ranging from the sale of individual product lines to complete divisions.”
Full-Year Results:
For the full year, total revenue was a record high US$17.45bn, up 48%, which includes the first full year of Federal-Mogul revenues. Full-year EBIT was US$148m, versus EBIT of US$322m a year ago.
Adjusted EBITDA was US$1.44bn million, compared to US$1.06bn a year ago. Cash generated by operations for the full year was US$444m, compared with US$439m last year.
